EXHIBIT 10.1
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$150,000,000
CREDIT AGREEMENT
Dated as of December 17, 1997
Among
XPEDITE SYSTEMS, INC.
and
XPEDITE SYSTEMS HOLDINGS (UK) LIMITED,
as Borrowers,
the GUARANTORS party hereto,
the BANKS listed on the signature pages hereof,
NATIONSBANK, N.A.,
as Documentation Agent,
and
THE BANK OF NEW YORK,
as Administrative Agent
Arranged by
BNY CAPITAL MARKETS, INC.
and
NATIONSBANC ▇▇▇▇▇▇▇▇▇▇ SECURITIES, INC.
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TABLE OF CONTENTS
Page
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ARTICLE 1
CREDIT FACILITY
Section 1.01 Commitment to Lend.......................................... 1
Section 1.02 Manner of Borrowing......................................... 1
Section 1.03 Interest.................................................... 3
(a) Rates.................................................. 3
(b) Payment................................................ 3
(c) Conversion and Continuation............................ 3
(d) Maximum Interest Rate.................................. 4
Section 1.04 Repayment................................................... 4
Section 1.05 Prepayments................................................. 4
(a) Optional Prepayments................................... 4
(b) Mandatory Prepayments.................................. 5
(c) Application to Types of Loans.......................... 5
Section 1.06 Limitation on Types of Loans................................ 5
Section 1.07 Reduction of Commitments.................................... 5
(a) Mandatory Reductions................................... 5
(b) Optional Reductions.................................... 5
Section 1.08 Fees........................................................ 6
(a) Commitment Fees........................................ 6
(b) Agents' Fees........................................... 6
(c) Fees Non-Refundable.................................... 6
Section 1.09 Computation of Interest and Fees............................ 6
Section 1.10 Evidence of Indebtedness.................................... 6
Section 1.11 Payments by the Borrowers................................... 6
(a) Time, Place and Manner................................. 6
(b) No Reductions.......................................... 7
(c) Extension of Payment Dates............................. 7
Section 1.12 Distribution of Payments by the Administrative Agent........ 7
Section 1.13 Taxes....................................................... 8
(a) Taxes Payable by the Borrowers......................... 8
(b) Credits and Deductions................................. 9
Section 1.14 Pro Rata Treatment.......................................... 9
ARTICLE 2
CONDITIONS TO LOANS
Section 2.01 Conditions to Initial Loans................................ 10
i
Section 2.02 Conditions to Each Loan....................................................... 12
ARTICLE 3
CERTAIN REPRESENTATIONS AND WARRANTIES
Section 3.01 Organization; Power; Qualification............................................ 13
Section 3.02 Subsidiaries.................................................................. 13
Section 3.03 Authorization; Enforceability; Required Consents; Absence of Conflicts;
Acquisition Documents......................................................... 13
Section 3.04 Taxes......................................................................... 14
Section 3.05 Litigation.................................................................... 14
Section 3.06 No Adverse Change or Event.................................................... 14
Section 3.07 Additional Adverse Facts...................................................... 14
Section 3.08 Investment Company Act........................................................ 15
Section 3.09 Compliance With Applicable Law and Contracts.................................. 15
Section 3.10 Substance Release and Disposal................................................ 15
ARTICLE 4
CERTAIN COVENANTS
Section 4.01 Preservation of Existence and Properties, Scope of Business, Compliance
With Law, Preservation of Enforceability...................................... 15
Section 4.02 Insurance..................................................................... 16
Section 4.03 Additional Significant Subsidiaries........................................... 16
Section 4.04 Use of Proceeds............................................................... 16
Section 4.05 Indebtedness.................................................................. 17
Section 4.06 Guaranties.................................................................... 17
Section 4.07 Liens......................................................................... 17
Section 4.08 Merger or Consolidation; Acquisitions......................................... 17
Section 4.09 Disposition of Assets......................................................... 18
Section 4.10 Restricted Payments........................................................... 18
Section 4.11 Limitation on Restrictive Covenants........................................... 18
Section 4.12 Issuance or Disposition of Capital Securities................................. 18
Section 4.13 Investments................................................................... 18
Section 4.14 Taxes of Other Persons........................................................ 19
Section 4.15 Benefit Plans................................................................. 19
Section 4.16 Transactions With Affiliates.................................................. 19
Section 4.17 Substance Storage and Disposal................................................ 19
Section 4.18 Leverage Ratio................................................................ 19
Section 4.19 Interest Coverage Ratio....................................................... 19
ARTICLE 5
INFORMATION
Section 5.01 Information to Be Furnished................................................... 19
ii
(a) Quarterly Financial Statements........................................... 19
(b) Year-End Financial Statements; Accountants' Certificate.................. 20
(c) Officer's Certificate as to Financial Statements and Defaults............ 20
(d) Reports and Filings...................................................... 20
(e) Requested Information.................................................... 20
(f) Notice of Defaults, Material Adverse Changes and Other Matters........... 20
Section 5.02 Accuracy of Financial Statements and Information.............................. 21
(a) Financial Statements..................................................... 21
(b) Other Information........................................................ 22
Section 5.03 Additional Covenants Relating to Disclosure................................... 22
(a) Accounting Methods and Financial Records................................. 22
(b) Fiscal Year.............................................................. 22
(c) Visits, Inspections and Discussions...................................... 22
Section 5.04 Authorization of Third Parties to Deliver Information......................... 23
ARTICLE 6
DEFAULT
Section 6.01 Events of Default............................................................. 23
Section 6.02 Remedies Upon Event of Default................................................ 26
ARTICLE 7
ADDITIONAL CREDIT FACILITY PROVISIONS
Section 7.01 Mandatory Suspension and Conversion of Eurocurrency Rate Loans................ 26
Section 7.02 Regulatory Changes............................................................ 27
Section 7.03 Funding Losses................................................................ 28
Section 7.04 Certain Determinations........................................................ 28
Section 7.05 Change of Lending Office...................................................... 28
Section 7.06 Replacement of Banks.......................................................... 29
ARTICLE 8
GUARANTY
Section 8.01 Guaranty of Payment and Performance; Limitation of Guaranty................... 29
Section 8.02 Continuance and Acceleration of Guaranteed Obligations Upon
Certain Events................................................................ 30
Section 8.03 Recovered Payments............................................................ 30
Section 8.04 Nature of Guarantors' Obligations............................................. 30
Section 8.05 No Release of Guarantors...................................................... 30
Section 8.06 Certain Waivers............................................................... 32
Section 8.07 Subordination of Rights Against the Borrower and Collateral................... 32
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ARTICLE 9
THE AGENTS
Section 9.01 Appointment and Powers........................................................ 33
Section 9.02 Limitation on Administrative Agent's Liability................................ 33
Section 9.03 Defaults...................................................................... 34
Section 9.04 Rights as a Bank.............................................................. 34
Section 9.05 Indemnification............................................................... 34
Section 9.06 Non-Reliance on Administrative Agent and Other Banks.......................... 35
Section 9.07 Resignation of the Administrative Agent....................................... 35
Section 9.08 Execution and Amendment of Loan Documents on Behalf of the Banks.............. 35
ARTICLE 10
MISCELLANEOUS
Section 10.01 Notices and Deliveries........................................................ 36
Section 10.02 Expenses; Indemnification..................................................... 38
Section 10.03 Amounts Payable Due Upon Request for Payment.................................. 39
Section 10.04 Remedies of the Essence....................................................... 39
Section 10.05 Rights Cumulative............................................................. 39
Section 10.06 Confidentiality and Disclosures............................................... 39
Section 10.07 Amendments; Waivers........................................................... 39
Section 10.08 Set-Off; Suspension of Payment and Performance................................ 40
Section 10.09 Sharing of Recoveries......................................................... 40
Section 10.10 Assignments and Participations................................................ 41
(a) Assignments.............................................................. 41
(b) Participations........................................................... 41
Section 10.11 Governing Law................................................................. 42
Section 10.12 Judicial Proceedings; Waiver of Jury Trial.................................... 42
Section 10.13 Reference Bank................................................................ 43
Section 10.14 Severability of Provisions.................................................... 43
Section 10.15 Counterparts.................................................................. 43
Section 10.16 Survival of Obligations....................................................... 43
Section 10.17 Entire Agreement.............................................................. 43
Section 10.18 Successors and Assigns........................................................ 43
Section 10.19 No Fiduciary Relationship Established by Loan Documents....................... 43
Section 10.20 Judgment Currency............................................................. 44
Section 10.21 Worldwide UK Security Agreement............................................... 44
ARTICLE 11
INTERPRETATION
Section 11.01 Defined Terms................................................................. 44
Section 11.02 Other Interpretive Provisions................................................. 59
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Section 11.03 Accounting Matters............................................... 60
Section 11.04 Representations and Warranties................................... 60
Section 11.05 Captions......................................................... 60
Section 11.06 Interpretation and Related Documents............................. 60
ANNEX A BANKS, LENDING OFFICES AND NOTICE ADDRESSES
Schedule 1.02 NOTICE OF BORROWING FOR LOANS
Schedule 1.03(c)(iv) NOTICE OF CONVERSION OR CONTINUATION
Schedule 1.05(a) NOTICE OF PREPAYMENT
Schedule 2.01(a)(i) CERTIFICATE AS TO RESOLUTIONS, ETC.
Schedule 2.01(a)(iv) FORM OF OPINION OF COUNSEL FOR THE LOAN PARTIES
Schedule 2.01(a)(v) FORM OF OPINION OF ENGLISH COUNSEL FOR XPEDITE
SYSTEMS HOLDINGS (UK) LIMITED
Schedule 2.01(a)(vi) FORM OF OPINION OF WINTHROP, STIMSON, ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇
Schedule 3.02 SCHEDULE OF SUBSIDIARIES
Schedule 3.03 SCHEDULE OF REQUIRED CONSENTS AND
GOVERNMENTAL APPROVALS
Schedule 3.05 SCHEDULE OF MATERIAL LITIGATION
Schedule 3.07 SCHEDULE OF ADDITIONAL MATERIAL ADVERSE FACTS
Schedule 3.10 SCHEDULE OF ENVIRONMENTAL MATTERS
Schedule 4.03 FORM OF SUBSIDIARY GUARANTY SUPPLEMENT
Schedule 4.05 SCHEDULE OF EXISTING INDEBTEDNESS
Schedule 4.06 SCHEDULE OF EXISTING GUARANTIES
Schedule 4.07 SCHEDULE OF EXISTING LIENS
Schedule 4.11 SCHEDULE OF PERMITTED RESTRICTIVE COVENANTS
Schedule 4.13 SCHEDULE OF EXISTING INVESTMENTS
Schedule 4.15 SCHEDULE OF EXISTING BENEFIT PLANS
Schedule 5.02(a) SCHEDULE OF HISTORICAL FINANCIAL INFORMATION
Schedule 10.10(a) NOTICE OF ASSIGNMENT
Schedule 11.01(a) SCHEDULE OF SUBSIDIARIES THAT ARE GUARANTORS AS
OF THE AGREEMENT DATE
Schedule 11.01(b) PERMITTED RESTRUCTURING TRANSACTIONS
Schedule 11.01(c) CALCULATION OF ADDITIONAL STERLING COST
EXHIBIT A FORM OF NOTE
EXHIBIT B FORM OF SECURITY AGREEMENT
EXHIBIT C FORM OF WORLDWIDE UK SECURITY AGREEMENT
EXHIBIT D FORM OF XPEDITE UK SECURITY AGREEMENT
EXHIBIT E FORM OF WORLDWIDE XSL SECURITY AGREEMENT
v
CREDIT AGREEMENT
Dated as of December 17, 1997
XPEDITE SYSTEMS, INC., a Delaware corporation (the "Company"), XPEDITE
SYSTEMS HOLDINGS (UK) LIMITED, an English corporation ("Xpedite UK", with each
of the Company and Xpedite UK individually a "Borrower" and collectively the
"Borrowers"), the GUARANTORS party hereto, the BANKS listed on the signature
pages hereof, NATIONSBANK, N.A., as Documentation Agent, and THE BANK OF NEW
YORK, as Administrative Agent, agree as follows (with certain terms used herein
being defined in Article 11):
ARTICLE 1
CREDIT FACILITY
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Section 1.01 Commitment to Lend. Upon the terms and subject to the
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conditions of this Agreement, each Bank agrees to make, from time to time during
the period from the Agreement Date through the Commitment Termination Date, one
or more Loans to either Borrower in an aggregate unpaid principal amount (with
respect to all Loans made by such Bank to either Borrower and with the
outstanding principal amount of each Loan to Xpedite UK being, for these
purposes, the Dollar Equivalent thereof at such time) not exceeding at any time
such Bank's Commitment at such time; provided, however, that the Banks shall not
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make Loans to Xpedite UK if, after giving effect to such Loans, the Dollar
Equivalent at such time of the aggregate principal amount of all Loans to
Xpedite UK then outstanding would exceed the Sterling Sub-limit. Loans made to
the Company shall be denominated in Dollars and Loans made to Xpedite UK shall
be denominated in Sterling. Subject to Section 1.03 and the other terms and
conditions of this Agreement, (a) the Loans may, at the option of the applicable
Borrower, be made as, and from time to time continued as or converted into,
Eurocurrency Rate Loans of any permitted Type, or any combination thereof and
(b) Loans made to the Company may, at the option of the Company, be made as, and
from time to time continued as or converted into, Base Rate Loans. The aggregate
amount of the Commitments on the Agreement Date is $150,000,000 and the Sterling
Sub-limit on the Agreement Date is $70,000,000.
Section 1.02 Manner of Borrowing. (a) The applicable Borrower shall give
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the Administrative Agent notice (which shall be irrevocable) no later than 11:00
a.m. (New York City time) on (1) in the case of Eurocurrency Rate Loans to be
made to the Company, the third Eurocurrency Business Day, (2) in the case of
Eurocurrency Rate Loans to be made to Xpedite UK, the fourth Eurocurrency
Business Day and (3) in the case of Base Rate Loans to be made to the Company,
the Business Day, before the requested date for the making of Loans. Each such
notice shall be in the form of Schedule 1.02 and shall specify (i) the requested
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date for the making of the requested Loans, which shall be a Eurocurrency
Business Day (or, in the case of Base Rate Loans to be made to the Company, a
Business Day), (ii) the Type or Types of Loans requested and (iii) the amount of
each such Type of Loan, the aggregate of which amounts for all Types of Loans
requested shall be, in the case of Loans made to the Company, $2,000,000 or any
integral multiple of $1,000,000 in excess thereof, or, if less than $2,000,000,
the aggregate amount of the unused Commitments and, in the case of Loans made to
Xpedite UK, (Pounds)2,000,000 or any integral multiple of (Pounds)1,000,000 in
excess thereof, or, if less than (Pounds)2,000,000, the aggregate amount of the
unused Sterling Sub-limit. Upon receipt of any such notice, the Administrative
Agent shall promptly notify each Bank of the contents thereof and of the amount
and Type of each Loan to be made by such Bank on the requested date specified
therein.
(b) Not later than 11:00 a.m. (New York City time) on each requested
date for the making of Loans, each Bank shall make available to the
Administrative Agent, in Dollars or Sterling, as the case may be, in funds
immediately available to the Administrative Agent (or, in the case of Loans
disbursed in Sterling, in funds as may then be customary for the settlement of
international transactions in Sterling) at the Administrative Agent's Office,
the Loans to be made by such Bank on such date. Any Bank's failure to make any
Loan to be made by it on the requested date therefor shall not relieve any other
Bank of its obligation to make any Loan to be made by such other Bank on such
date, but such other Bank shall not be liable for such failure.
(c) Unless the Administrative Agent shall have received notice from a
Bank prior to 10:00 a.m. (New York City time) on the requested date for the
making of any Loans that such Bank will not make available to the Administrative
Agent the Loans requested to be made by such Bank on such date, the
Administrative Agent may assume that such Bank has made such Loans available to
the Administrative Agent on such date in accordance with Section 1.02(b) and the
Administrative Agent in its sole discretion may, in reliance upon such
assumption, make available to the applicable Borrower on such date a
corresponding amount on behalf of such Bank. If and to the extent such Bank
shall not have so made available to the Administrative Agent the Loans requested
to be made by such Bank on such date and the Administrative Agent shall have so
made available to the applicable Borrower a corresponding amount on behalf of
such Bank, such Bank shall, on demand, pay to the Administrative Agent such
corresponding amount together with interest thereon, for each day from the date
such amount shall have been so made available by the Administrative Agent to the
applicable Borrower until the date such amount shall have been repaid to the
Administrative Agent, at a rate per annum equal to, in the case of Loans
denominated in Dollars, the Federal Funds Rate until (and including) the third
Business Day after demand is made and thereafter at the Base Rate and, in the
case of Loans denominated in Sterling, the overnight London interbank Sterling
rate, as determined by the Administrative Agent. If such Bank does not pay such
corresponding amount promptly upon the Administrative Agent's demand therefor,
the Administrative Agent shall promptly notify the applicable Borrower and such
Borrower shall immediately repay such corresponding amount to the Administrative
Agent together with accrued interest thereon at the applicable rate or rates
provided in Section 1.03(a). Nothing in this Section 1.02(c) shall be deemed to
limit the obligation of any Bank to make Loans hereunder or to limit the rights
that the Borrowers may have against any Bank for its failure to make any Loans
hereunder.
(d) All Loans made available to the Administrative Agent in
accordance with Section 1.02(b) shall be disbursed by the Administrative Agent
not later than 12:00 noon (New York City time) on the requested date therefor in
Dollars or Sterling, as the case may be, in funds immediately available to the
applicable Borrower (or, in the case of Loans disbursed in Sterling, in funds as
may then be customary for the settlement of international transactions in
Sterling) by credit to an account of such Borrower at the Administrative Agent's
Office or in such other
2
manner as may have been specified in the applicable notice of borrowing and as
shall be acceptable to the Administrative Agent.
Section 1.03 Interest. (a) Rates. (i) Subject to Section 1.03(a)(ii), each
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Loan shall bear interest on the outstanding principal amount thereof at a rate
per annum equal to (A) in the case of Loans made to the Company, for so long as
it is a Base Rate Loan, the Base Rate as in effect from time to time plus the
Applicable Margin and (B) for so long as it is a Eurocurrency Rate Loan, the
applicable Eurocurrency Rate plus the Applicable Margin.
(ii) If all or any part of a Loan or any other amount due and
payable under the Loan Documents is not paid when due (whether at maturity, by
reason of notice of prepayment or acceleration or otherwise), such unpaid amount
shall, to the maximum extent permitted by Applicable Law, bear interest for each
day during the period from the date such amount became so due until it shall be
paid in full (whether before or after judgment) at a rate per annum equal to the
applicable Post-Default Rate.
(b) Payment. Interest shall be payable, in the case of Loans that are
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(i) Base Rate Loans, on each Interest Payment Date, (ii) Eurocurrency Rate
Loans, on the last day of each applicable Interest Period (and, if an Interest
Period is longer than three months, at intervals of three months after the first
day of such Interest Period), (iii) any Loan, when such Loan shall be due
(whether at maturity, by reason of notice of prepayment or acceleration or
otherwise) or converted, but only to the extent then accrued on the amount then
so due or converted. Interest at the Post-Default Rate shall be payable on
demand. Interest on Loans denominated in Sterling shall be paid in Sterling.
(c) Conversion and Continuation. (i) Subject to Section 7.03, all or
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any part of the principal amount of Loans of any Type may, on any Business Day,
be converted into any other Type or Types of Loans (except that Loans made to
Xpedite UK may not be converted into Base Rate Loans), except that Base Rate
Loans may be converted into Eurocurrency Rate Loans only on a Eurocurrency
Business Day.
(ii) Base Rate Loans shall continue as Base Rate Loans unless
and until such Loans are converted into Loans of another Type. Eurocurrency Rate
Loans of any Type shall continue as Loans of such Type until the end of the then
current Interest Period therefor, at which time they shall be automatically
converted into, in the case of Loans made to the Company, Base Rate Loans and,
in the case of Loans made to Xpedite UK, Eurocurrency Rate Loans having a one
month Interest Period unless, in either case, the applicable Borrower shall have
given the Administrative Agent notice in accordance with Section 1.03(c)(iv)
requesting either that such Loans continue as Loans of such Type for another
Interest Period or that such Loans be converted into Loans of another Type at
the end of such Interest Period.
(iii) Notwithstanding anything to the contrary contained in
Section 1.03(c)(i) or (ii), during a Default, the Administrative Agent may
notify the Borrowers that Loans may only be converted into or continued as Loans
of certain specified Types and, thereafter, until no Default shall continue to
exist, Loans may not be converted into or continued as Loans of any Type other
than one or more of such specified Types.
3
(iv) The applicable Borrower shall give the Administrative Agent
notice (which shall be irrevocable) of each conversion of Loans or continuation
of Eurocurrency Rate Loans no later than 11:00 a.m. (New York City time) on, in
the case of a conversion of Loans made to the Company into Base Rate Loans, the
Business Day before, and, in the case of a conversion into or continuation of
Eurocurrency Rate Loans, the third Eurocurrency Business Day before, the
requested date of such conversion or continuation. Each notice of conversion or
continuation shall be in the form of Schedule 1.03(c)(iv) and shall specify (A)
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the requested date of such conversion or continuation, (B) the amount and Type
and, in the case of Eurocurrency Rate Loans, the last day of the applicable
Interest Period of the Loans to be converted or continued and (C) the amount and
Type or Types of Loans into which such Loans are to be converted or as which
such Loans are to be continued. Upon receipt of any such notice, the
Administrative Agent shall promptly notify each Bank of (x) the contents
thereof, (y) the amount and Type and, in the case of Eurocurrency Rate Loans,
the last day of the applicable Interest Period of each Loan to be converted or
continued by such Bank and (z) the amount and Type or Types of Loans into which
such Loans are to be converted or as which such Loans are to be continued.
(d) Maximum Interest Rate. Nothing contained in the Loan Documents
---------------------
shall require either Borrower at any time to pay interest at a rate exceeding
the Maximum Permissible Rate. If interest payable by either Borrower on any date
would exceed the maximum amount permitted by the Maximum Permissible Rate, such
interest payment shall automatically be reduced to such maximum permitted
amount, and interest for any subsequent period, to the extent less than the
maximum amount permitted for such period by the Maximum Permissible Rate, shall
be increased by the unpaid amount of such reduction. Any interest actually
received from a Borrower for any period in excess of such maximum amount
permitted for such period shall be deemed to have been applied as a prepayment
of the Loans of such Borrower.
Section 1.04 Repayment. The Loans shall mature and become due and payable,
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and shall be repaid by the applicable Borrower in full, on the Commitment
Termination Date.
Section 1.05 Prepayments. (a) Optional Prepayments. Either Borrower may,
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at any time and from time to time, prepay the Loans made to it in whole or in
part, without premium or penalty (but subject to Section 7.03), except that any
partial prepayment of Loans shall be in an aggregate principal amount of, in the
case of Loans denominated in Dollars, $2,000,000 or any integral multiple of
$1,000,000 in excess thereof and, in the case of Loans denominated in Sterling,
(Pounds)2,000,000 or any integral multiple of (Pounds)1,000,000 in excess
thereof. The applicable Borrower shall give the Administrative Agent notice of
each prepayment pursuant to this Section 1.05(a) no later than 11:00 a.m. (New
York City time) on, in the case of a prepayment of Base Rate Loans, the Business
Day before, and, in the case of a prepayment of Eurocurrency Rate Loans, the
third Eurocurrency Business Day before, the date of such prepayment. Each such
notice of prepayment shall be in the form of Schedule 1.05(a) and shall specify
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(i) the date such prepayment is to be made and (ii) the amount and Type and, in
the case of Eurocurrency Rate Loans, the last day of the applicable Interest
Period of the Loans to be prepaid. Upon receipt of any such notice, the
Administrative Agent shall promptly notify each Bank of the contents thereof and
the amount and Type and, in the case of Eurocurrency Rate Loans, the last day of
the applicable Interest Period of each Loan of such Bank to be prepaid. Amounts
to be prepaid pursuant to this Section 1.05(a) shall irrevocably be due and
payable on the date specified in the
4
applicable notice of prepayment, together with interest thereon as provided in
Section 1.03(b). Any Loan that shall have been prepaid prior to the Commitment
Termination Date may, subject to the terms and conditions hereof, be reborrowed
prior to the Commitment Termination Date.
(b) Mandatory Prepayments. If, after giving effect to any partial or
---------------------
total reduction of the Commitments pursuant to Section 1.07, the aggregate
unpaid principal amount of the Loans (with the unpaid principal amount of the
Loans made to Xpedite UK being, for these purposes, the Dollar Equivalent
thereof at such time) exceeds the aggregate Commitments, either or both of the
Borrowers shall prepay the Loans on the date of such reduction in an aggregate
amount (with the amount of any such prepayment of the Loans made to Xpedite UK
being, for these purposes, the Dollar Equivalent thereof at such time) equal to
the amount of such excess, together with interest thereon as provided in Section
1.03.
(c) Application to Types of Loans. Amounts prepaid by either Borrower
-----------------------------
pursuant to this Section 1.05 shall be applied, unless otherwise specified by
such Borrower, to prepay (i) in the case of prepayments by the Company, Base
Rate Loans of the Company, and (ii) (in the case of the Company, to the extent
that the amount of any such prepayment exceeds the then outstanding aggregate
principal amount of such Base Rate Loans) the Eurocurrency Rate Loans of such
Borrower in the order that the Interest Periods for such Loans end. Amounts to
be prepaid pursuant to this Section 1.05 shall be paid on the day specified
therefor, whether or not such payment would require a prepayment of Eurocurrency
Rate Loans prior to the last day of an applicable Interest Period or would
result in losses, costs or expenses compensable under Section 7.03.
Section 1.06 Limitation on Types of Loans. Notwithstanding anything to the
----------------------------
contrary contained in this Agreement, the Borrowers shall borrow, prepay,
convert and continue Loans in a manner such that (a) the aggregate principal
amount of Eurocurrency Rate Loans of the same Type and having the same Interest
Period shall at all times be not less than, in the case of Loans denominated in
Dollars, $2,000,000 and, in the case of Loans denominated in Sterling,
(Pounds)2,000,000, (b) there shall not be, at any one time, more than six
Interest Periods in effect with respect to Eurocurrency Rate Loans of all Types
and (c) no payment of Eurocurrency Rate Loans will have to be made prior to the
last day of an applicable Interest Period in order to repay the Loans (subject
to Section 1.11(c)) on the date specified in Section 1.04.
Section 1.07 Reduction of Commitments. (a) Mandatory Reductions. The
------------------------ --------------------
Commitments shall be automatically reduced by an amount equal to 75% of the
gross proceeds received by the Company or any Subsidiary from any disposition
contemplated by Section 4.09(e) on the second Business Day after the day on
which the Company or such Subsidiary receives such proceeds, provided that no
--------
such reduction shall be required in respect of such gross proceeds to the extent
they do not exceed $1,000,000 in the aggregate for all such dispositions since
the Agreement Date.
(b) Optional Reductions. The Company may reduce the Commitments by
-------------------
giving the Administrative Agent notice (which shall be irrevocable) thereof no
later than 11:00 a.m. (New York City time) on the third Business Day before the
requested date of such reduction, except that no reduction may reduce the
Commitments to an amount less than the aggregate unpaid principal amount of the
Loans at such time (with the amount of the unpaid Loans made to
5
Xpedite UK being, for these purposes, the Dollar Equivalent thereof at such
time) and no partial reduction of the Commitments shall be in an aggregate
amount other than $2,000,000 or any integral multiple of $1,000,000 in excess
thereof. Upon receipt of any such notice, the Administrative Agent shall
promptly notify each Bank of the contents thereof and the amount to which such
Bank's Commitment is to be reduced. No reduction of the Commitments shall reduce
the Sterling Sub-limit except that if, after giving effect to any such reduction
of the Commitments, the aggregate amount of the remaining Commitments would be
less than the Sterling Sub-limit, the Sterling Sub-limit thenceforth shall be
such lesser amount.
Section 1.08 Fees. (a) Commitment Fees. The Borrowers shall pay to the
---- ---------------
Administrative Agent for the account of each Bank a commitment fee on the daily
amount of the unused Commitments (with the amount of the utilization thereof
consisting of Loans made to Xpedite UK being, for these purposes, the Dollar
Equivalent thereof on each such day) for each day from the Agreement Date
through the Commitment Termination Date at a rate per annum of 0.250%, payable
in arrears on successive Quarterly Dates and on the Commitment Termination Date.
(b) Agents' Fees. The Company shall pay the fees payable pursuant to
------------
the Agents' Fee Letters. Such fees shall be paid to the Persons, in the amounts
and at the times provided therein.
(c) Fees Non-Refundable. None of the fees payable under this Section
-------------------
1.08 shall be refundable in whole or in part.
Section 1.09 Computation of Interest and Fees. Interest calculated on the
--------------------------------
basis of the Eurocurrency Rate or the Federal Funds Rate and the commitment fees
shall be computed on the basis of a year of 360 days and paid for the actual
number of days elapsed. Interest calculated on the basis of the Prime Rate shall
be computed on the basis of a year of 365 or 366 days, as applicable, and paid
for the actual number of days elapsed. Interest for any period shall be
calculated from and including the first day thereof to but excluding the last
day thereof.
Section 1.10 Evidence of Indebtedness. Each Bank's Loans and each
------------------------
Borrower's obligation to repay such Loans with interest in accordance with the
terms of this Agreement shall be evidenced by this Agreement, the records of
such Bank and a single Note of each Borrower payable to the order of such Bank.
The records of each Bank shall be prima facie evidence of such Bank's Loans, and
of accrued interest thereon and of all payments made in respect thereof.
Section 1.11 Payments by the Borrowers. (a) Time, Place and Manner. All
------------------------- ----------------------
payments due to the Administrative Agent under the Loan Documents shall be made
to the Administrative Agent at the Administrative Agent's Office or at such
other address as the Administrative Agent may designate by notice to the
applicable Borrower. All payments due to any Bank under the Loan Documents
shall, in the case of payments on account of principal of or interest on the
Loans or fees, be made to the Administrative Agent at the Administrative Agent's
Office and, in the case of all other payments, be made directly to such Bank at
its Domestic Lending Office or at such other address as such Bank may designate
by notice to the applicable Borrower. All payments due to any Bank under the
Loan Documents, whether made to the Administrative Agent or directly to such
Bank, shall be made for the account of, in the case of
6
payments in respect of Eurocurrency Rate Loans, such Bank's Eurocurrency Lending
Office and, in the case of all other payments, such Bank's Domestic Lending
Office. A payment shall not be deemed to have been made on any day unless such
payment has been received by the required Person, at the required place of
payment, in Dollars (or, in the case of the principal of and interest on the
Loans made to Xpedite UK, in Sterling) in funds immediately available to such
Person at such place, no later than 2:00 p.m. (New York City time) on such day.
(b) No Reductions. All payments due to the Administrative Agent or
-------------
any Bank under the Loan Documents shall be made by the applicable Borrower
without any reduction or deduction whatsoever, including any reduction or
deduction for any set-off, recoupment, counterclaim or Tax, except, subject to
Section 1.13, for any withholding or deduction for Taxes required to be withheld
or deducted under Applicable Law.
(c) Extension of Payment Dates. Whenever any payment to the
--------------------------
Administrative Agent or any Bank under the Loan Documents would otherwise be due
on a day that is not a Business Day, or, in the case of payments of the
principal of Eurocurrency Rate Loans, a Eurocurrency Business Day, such payment
shall instead be due on the next succeeding Business or Eurocurrency Business
Day, as the case may be, unless, in the case of a payment of the principal of
Eurocurrency Rate Loans, such extension would cause payment to be due in the
next succeeding calendar month, in which case such due date shall be advanced to
the next preceding Eurocurrency Business Day. If the date any payment under the
Loan Documents is due is extended (whether by operation of any Loan Document,
Applicable Law or otherwise), such payment shall bear interest for such extended
time at the rate of interest applicable hereunder.
Section 1.12 Distribution of Payments by the Administrative Agent. (a) The
----------------------------------------------------
Administrative Agent shall promptly distribute to each Bank its ratable share of
each payment received by the Administrative Agent under the Loan Documents for
the account of the Banks by credit to an account of such Bank at the
Administrative Agent's Office or by wire transfer to an account of such Bank at
an office of any other commercial bank located in the United States.
(b) Unless the Administrative Agent shall have received notice from
the applicable Loan Party prior to the date on which any payment is due to the
Banks under the Loan Documents that such Loan Party will not make such payment
in full, the Administrative Agent may assume that such Loan Party has made such
payment in full to the Administrative Agent on such date and the Administrative
Agent in its sole discretion may, in reliance upon such assumption, cause to be
distributed to each Bank on such due date a corresponding amount with respect to
the amount then due such Bank. If and to the extent such Loan Party shall not
have so made such payment in full to the Administrative Agent and the
Administrative Agent shall have so distributed to any Bank a corresponding
amount, such Bank shall, on demand, repay to the Administrative Agent the amount
so distributed together with interest thereon, for each day from the date such
amount is distributed to such Bank until the date such Bank repays such amount
to the Administrative Agent, at, in the case of any such payment denominated in
Sterling, the overnight London interbank Sterling rate, as determined by the
Administrative Agent, or, in all other cases, the Federal Funds Rate until (and
including) the third Business Day after demand is made and thereafter at the
Base Rate.
7
Section 1.13 Taxes. (a) Taxes Payable by the Borrowers. If under
----- ------------------------------
Applicable Law any Tax (other than a Bank Tax) is required to be withheld or
deducted by either Borrower from, or is otherwise payable by such Borrower in
connection with, any payment to the Administrative Agent or any Bank under the
Loan Documents, such Borrower shall, subject to Section 1.13(a)(ii), pay to the
Administrative Agent or such Bank, as applicable, such additional amounts as may
be necessary so that the net amount received by the Administrative Agent, or
such Bank with respect to such payment, after withholding or deducting all Taxes
(other than Bank Taxes) required to be withheld or deducted by the Borrower, is
equal to the full amount payable under the Loan Documents.
(i) Taxes Payable by the Administrative Agent or any Bank. The
-----------------------------------------------------
applicable Borrower shall, promptly upon request by the Administrative
Agent or any Bank for the payment thereof, but subject to Section
1.13(a)(ii), pay to the Administrative Agent or such Bank, as the case may
be, (A) all Taxes (other than Bank Taxes, payable by the Administrative
Agent or such Bank, as the case may be) with respect to any payment due to
the Administrative Agent or such Bank under the Loan Documents from such
Borrower and (B) all Taxes payable by the Administrative Agent or such Bank
as a result of payments made by such Borrower (whether made to a taxing
authority or to the Administrative Agent or such Bank) pursuant to this
Section 1.13(a)(i).
(ii) Limitations. Notwithstanding anything to the contrary
-----------
contained herein, neither Borrower shall be required to pay any additional
amount in respect of any Taxes pursuant to this Section 1.13 to any Bank
(A) except to the extent such Taxes are required to be withheld as a result
of (1) in the case of a Person that is a Bank on the Agreement Date, a
Regulatory Change Enacted after the Agreement Date and (2) in the case of a
Person that becomes a Bank after the Agreement Date, a Regulatory Change
Enacted after such Person becomes a Bank or (B) to the extent such
withholding is required because such Bank (including any Person that
becomes a Bank or a participant pursuant to Section 10.10) has failed to
submit or submitted incorrectly any form or certificate that it is entitled
to so submit under Applicable Law or required to submit pursuant to Section
1.13(a)(iii).
(iii) Exemption From U.S. Withholding Taxes. There shall be
-------------------------------------
submitted to the Company and the Administrative Agent, (A) on or before the
first date that interest or fees are payable to a Bank (including any Person
that becomes a Bank or a participant pursuant to Section 10.10) under the Loan
Documents, (or at any other time upon the reasonable written request of the
Company or the Administrative Agent) (1) if at the time the same are applicable,
by each Bank that is not a United States Person, (aa) two duly completed and
signed copies of Internal Revenue Service Form 1001 or 4224, entitling such Bank
to a complete exemption from withholding of any United States federal income
taxes on all amounts to be received by such Bank under the Loan Documents, and
(bb) two duly completed and signed copies of Internal Revenue Service Form W-8
establishing a full exemption from U.S. backup withholding in respect of amounts
to be received by such Bank under the Loan Documents, or (2) if at the time any
of the foregoing are inapplicable, duly completed and signed copies of such
form, if any, as entitles such Bank to exemption from withholding of United
States federal income taxes to the maximum extent to which such Bank is then
entitled under Applicable Law, and (B) from time to time thereafter, prior to
the expiration or obsolescence of any previously delivered form or
8
upon any previously delivered form becoming inaccurate or inapplicable, such
further duly completed and signed copies of such form, if any, as entitles such
Bank to exemption from withholding of United States federal income taxes to the
maximum extent to which such Bank is then entitled under Applicable Law. Each
Bank (including any Person that becomes a Bank or a participant pursuant to
Section 10.10) shall promptly notify the Company and the Administrative Agent if
(A) it is required to withdraw or cancel any form or certificate previously
submitted by it or any such form or certificate has otherwise become ineffective
or inaccurate or (B) payments to it are or will be subject to withholding of
United States federal income taxes (or any other Taxes (other than Bank Taxes))
to a greater extent than the extent to which payments to it were previously
subject. On or before the first date that interest or fees are payable to a Bank
(including any Person that becomes a Bank or a participant pursuant to Section
10/10), or upon the request of the Company or the Administrative Agent, each
Bank that is a United States Person shall from time to time submit to the
Company and the Administrative Agent a certificate to the effect that it is such
a United States Person and a duly completed Internal Revenue Service Form W-9. A
Borrower shall be entitled to rely upon the accuracy of any such forms,
documents, certificates or other information furnished to it by any Bank
pursuant to this Section 1.13(a)(iii) and shall have no obligation to make any
additional payments or indemnify the Administrative Agent or any Bank for any
Taxes under Section 1.13(a)(i) that would not have become payable by such Person
had such documentation been accurate.
(b) Credits and Deductions. If the Administrative Agent or any Bank
----------------------
(i) is, in its sole, reasonable, good-faith opinion, able to apply for any
credit, refund, deduction or other reduction in Taxes in respect of any payment
made by a Borrower under Section 1.13(a)(i), the Administrative Agent or such
Bank, as the case may be, shall use reasonable efforts to obtain such credit,
refund, deduction or other reduction or, (ii) realizes a Tax benefit (whether by
way of credit, deduction or otherwise) in respect of or receives a refund of, or
in respect of, any Taxes for which a Borrower has made any payments to or on
behalf of such Administrative Agent or Bank pursuant to Section 1.13(a)(i),
then, upon receipt or realization thereof, the Administrative Agent or such Bank
will pay to such Borrower, as promptly as practicable after the receipt or
realization thereof, such amount, not exceeding the increased amount paid by
such Borrower, as is equal to the net after-tax value to the Administrative
Agent or such Bank, in its sole, reasonable and good-faith opinion, of such part
of such credit, deduction or other reduction as it reasonably considers to be
allocable to such payment by such Borrower, having regard to all of the
Administrative Agent's or such Bank's dealings giving rise to similar credits,
refunds, deductions or other reductions in relation to the same tax period and
to the cost of obtaining the same; provided, however, that (i) the
-------- -------
Administrative Agent or such Bank, as the case may be, shall not be obligated to
disclose to the Borrowers any information regarding its tax affairs or
computations and (ii) nothing in this Section 1.13(b) shall interfere with the
right of the Administrative Agent or such Bank to arrange its tax affairs as it
deems appropriate.
Section 1.14 Pro Rata Treatment. Except to the extent otherwise provided
------------------
herein, (a) Loans of each Type to be made on any day shall be made by the Banks
pro rata in accordance with their respective Commitments, (b) Loans of the Banks
shall be converted and continued pro rata in accordance with their respective
amounts of Loans of the Type and, in the case of Eurocurrency Rate Loans, having
the Interest Period being so converted or continued, (c) each reduction in the
Commitments shall be made pro rata in accordance with the respective amounts
thereof and (d) each payment of the principal of or interest on the Loans or of
fees shall be made
9
for the account of the Banks pro rata in accordance with the respective amounts
thereof then due and payable.
ARTICLE 2
CONDITIONS TO LOANS
-------------------
Section 2.01 Conditions to Initial Loans. The obligation of each Bank to
---------------------------
make its initial Loan is subject to the determination of each Bank in its sole
and absolute discretion, that each of the following conditions has been
fulfilled:
(a) the Administrative Agent shall have received each of the
following, in form and substance and, in the case of the materials referred to
in clauses (i), (ii), (iii), (vii), (viii), (xiv), (xv) and (xvi), certified in
a manner satisfactory to the Administrative Agent:
(i) a certificate of the Secretary or an Assistant
Secretary of each Loan Party, dated the requested date for the making of
such Loan, substantially in the form of Schedule 2.01(a)(i), to which shall
-------------------
be attached copies of the resolutions and by-laws (or equivalent corporate
governing document) referred to in such certificate;
(ii) a copy of the certificate of incorporation (or other
constitutive document) of each Loan Party, certified, as of a recent date,
by the Secretary of State or other appropriate official of such Loan
Party's jurisdiction of organization;
(iii) a good standing certificate (or other analogous
document) with respect to each Loan Party, issued as of a recent date by
the Secretary of State or other appropriate official of such Person's
jurisdiction of organization;
(iv) an opinion of counsel for the Loan Parties, dated the
requested date for the making of such Loan, substantially in the form of
Schedule 2.01(a)(iv);
--------------------
(v) an opinion of English counsel for Xpedite UK, dated
the requested date for the making of such Loan, substantially in the form
of Schedule 2.01(a)(v);
-------------------
(vi) an opinion of Winthrop, Stimson, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
special counsel for the Administrative Agent, dated the requested date for
the making of such Loan, substantially in the form of Schedule 2.01(a)(vi);
--------------------
(vii) a copy of each Governmental Approval and other
consent or approval, and each Governmental Registration, listed on Schedule
--------
3.03;
----
(viii) a certificate of the chief financial officer of the
Company, dated the requested date for the making of such Loan, with respect
to the conditions set forth in Sections 2.02(b) and (c) and setting forth
the calculation of the Leverage Ratio in effect immediately after giving
effect to the making of the initial Loans and the application of the
proceeds thereof (which calculation shall be based upon the Pro Forma
Financial Statements);
10
(ix) a duly executed Note of each Borrower for each
Bank;
(x) a duly executed copy of each of the Security
Agreements and the UK Security Agreements;
(xi) either (A) such duly executed UCC-1 financing
statements and other documents as the Administrative Agent may request, the
filing or recordation of which is necessary or appropriate in the
Administrative Agent's reasonable determination to create or perfect a
security interest in the Collateral under Applicable Law, or (B) evidence
of the filing or recordation of the same in such offices as the
Administrative Agent shall have reasonably specified;
(xii) such instruments and other documents as the
Administrative Agent may reasonably request, the execution, delivery,
filing or possession of which is necessary or appropriate in the
Administrative Agent's determination to create or perfect a security
interest in the Collateral under Applicable Law, including but not limited
to share certificates and stock powers executed in blank with respect to
the Capital Securities subject to the Security Interest;
(xiii) such instruments of termination, release and
discharge and other documents, including UCC-3 financing statements, as the
Administrative Agent may request, the delivery of which is necessary or
appropriate in the Administrative Agent's determination to effect the
termination of all Liens other than Permitted Liens;
(xiv) certificates of insurance and loss payee
endorsements with respect to all insurance policies required under the
Security Agreements and the UK Security Agreements;
(xv) a copy of each of the Acquisition Documents;
(xvi) pro forma financial statements for the Company and
its Consolidated Subsidiaries as at and for the nine-month period ended
September 30, 1997 giving effect to the making of the initial Loans, the
application of the proceeds thereof and the consummation of the
Acquisitions in accordance with the terms of the Acquisition Documents (the
"Pro Forma Financial Statements");
(xvii) a certified copy of minutes of a meeting of the
board of directors of XSL addressing the question of financial assistance
under Section 151 of the Companies Act of 1985 (the "Act") and resolving to
adopt the procedure specified in Sections 155-158 of the Act;
(xviii) a statutory declaration from the directors of XSL
given pursuant to Sections 155(6) and 156 of the Act and annexing a report
from the auditors of XSL in the form required by Section 156(4) of the Act;
and
(xix) a certified copy of a special resolution passed by
a general meeting of XSL and approving the giving of financial assistance
pursuant to Section 155(4) of the Act.
11
(b) all fees payable on or prior to the requested date of such Loan
pursuant to Section 1.08, and all amounts payable pursuant to Section 10.02 for
which invoices (in reasonable detail) have been delivered to the Company on or
prior to such date, shall have been paid in full or arrangements satisfactory to
the Administrative Agent shall have been made to cause them to be paid in full
concurrently with the disbursement of the proceeds of the Loans to be made on
such date;
(c) the Administrative Agent shall be satisfied that, concurrently
with the making of the initial Loans, (i) all Specified Existing Indebtedness
and other amounts due and payable by the Borrowers in connection with the
Specified Existing Indebtedness will be paid in full, (ii) all Liens in favor of
the holders of the Specified Existing Indebtedness arising thereunder and any
related arrangements will be terminated and (iii) there will be delivered to the
Administrative Agent such duly executed UCC-3 financing statements, notices and
releases as are necessary or appropriate to effect or reflect the termination as
aforesaid of all such Liens and any related arrangements; and
(d) the Administrative Agent shall be satisfied that, concurrently
with the making of the initial Loans or promptly thereafter, the Acquisitions
shall be consummated in compliance with Applicable Law and in accordance with
the Acquisition Documents (as any term thereof may have been amended or waived,
so long as any such amendment or waiver that is material and adverse to the
Company or any Subsidiary shall have been consented to by the Required Banks).
Section 2.02 Conditions to Each Loan. The obligation of each Bank to make
-----------------------
each Loan requested to be made by it, including its initial Loan, is subject to
the fulfillment of each of the following conditions:
(a) the Administrative Agent shall have received a notice of
borrowing with respect to such Loan complying with the requirements of Section
1.02;
(b) each Loan Document Representation and Warranty shall be true and
correct at and as of the time such Loan is to be made, both with and without
giving effect to such Loan and all other Loans to be made or issued at such time
and to the application of the proceeds thereof; and
(c) no Default shall have occurred and be continuing at the time such
Loan is to be made or would result from the making of such Loan and all other
Loans to be made at such time or from the application of the proceeds thereof.
Except to the extent that the applicable Borrower shall have disclosed in
the notice of borrowing or in a subsequent notice given to the Banks prior to
5:00 p.m. (New York City time) on the Business Day before the requested date for
the making of the requested Loans, that a condition specified in clause (b) or
(c) above will not be fulfilled as of the requested time for the making of such
Loans, such Borrower shall be deemed to have made a Representation and Warranty
as of the time of the making of such Loans that the conditions specified in such
clauses have been fulfilled as of such time.
12
ARTICLE 3
CERTAIN REPRESENTATIONS AND WARRANTIES
--------------------------------------
In order to induce the Administrative Agent and each Bank to enter into
this Agreement and to make each Loan requested to be made by it, the Company
represents and warrants as follows:
Section 3.01 Organization; Power; Qualification. The Company and each
----------------------------------
Subsidiary are Persons duly organized, validly existing and, where applicable,
in good standing under the laws of their respective jurisdictions of
organization, have the corporate or legal power and authority to own their
respective properties and to carry on their respective businesses as now being
and hereafter proposed to be conducted and, where applicable, are duly qualified
and in good standing as foreign corporations, and are authorized to do business,
in all jurisdictions in which the character of their respective properties or
the nature of their respective businesses requires such qualification or
authorization, except for qualifications and authorizations the lack of which,
singly or in the aggregate, has not had and will not have a Materially Adverse
Effect on (x) the Company and the Consolidated Subsidiaries taken as a whole,
(y) any Loan Document or (z) the Collateral.
Section 3.02 Subsidiaries. Schedule 3.02 sets forth, as of the Agreement
------------ -------------
Date, all of the Subsidiaries, their jurisdictions of organization and the
percentages of the various classes of their Capital Securities owned by the
Company or another Subsidiary and indicates which Subsidiaries are Consolidated
Subsidiaries and which Subsidiaries are Significant Subsidiaries. Except as
otherwise set forth on Schedule 3.02, the Company or another Subsidiary, as the
-------------
case may be, has the unrestricted right to vote, and (subject to limitations
imposed by Applicable Law) to receive dividends and distributions on, all
Capital Securities of the Subsidiaries indicated on Schedule 3.02 as owned by
-------------
the Company or such Subsidiary. All such Capital Securities have been duly
authorized and issued and are fully paid and nonassessable.
Section 3.03 Authorization; Enforceability; Required Consents; Absence of
------------------------------------------------------------
Conflicts; Acquisition Documents. Each of the Loan Parties has the power, and
--------------------------------
has taken all necessary action (including, if a corporation, any necessary
stockholder action) to authorize it, to execute, deliver and perform in
accordance with their respective terms the Loan Documents and, in the case of
the Company, to borrow hereunder in the amount of the unused Commitments and, in
the case of Xpedite UK, to borrow hereunder in the amount of the Sterling Sub-
limit. This Agreement has been, and each of the other Loan Documents when
delivered to the Administrative Agent will have been, duly executed and
delivered by each of the Loan Parties and is, or when so delivered will be, a
legal, valid and binding obligation of each such Person, enforceable against
such Person in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
general principles of equity. The execution, delivery and performance in
accordance with their respective terms by each Loan Party of the Loan Documents,
and each borrowing hereunder, whether or not in the amount of the unused
Commitments, do not and (absent any change in any Applicable Law or applicable
Contract) will not (a) require any Governmental Approval or any other consent or
approval, including any consent or approval of the stockholders of any such
Person, to have been obtained
13
or any Governmental Registration to have been made, by any such Person, other
than Governmental Approvals and other consents and approvals and Governmental
Registrations that have been obtained or made, as the case may be, are final and
not subject to review on appeal or to collateral attack, are in full force and
effect and, in the case of any such required under any Applicable Law or
Contract as in effect on the Agreement Date, are listed on Schedule 3.03, or (b)
-------------
violate, conflict with, result in a breach of, constitute a default under, or
result in or require the creation of any Lien upon any assets of any such Person
or any Subsidiary under, (i) any Contract to which any such Person or any
Subsidiary is a party or by which any such Person or any Subsidiary or any of
their respective properties may be bound or (ii) any Applicable Law binding on
such Person. There are no material agreements to which the Company or any
Subsidiary is a party relating to the Acquisitions, other than the Acquisition
Documents.
Section 3.04 Taxes. The Company and each Subsidiary have (a) filed all
-----
material Tax returns required to have been filed by it under Applicable Law, (b)
paid all Taxes indicated on such returns as due and payable by it or have been
assessed against it except for (i) Taxes the failure to have paid which does not
contravene Section 4.01; or (ii) Taxes which are being contested in good faith
by appropriate proceedings and for which adequate reserves have been established
in accordance with Generally Accepted Accounting Principles, and (c) to the
extent required by Generally Accepted Accounting Principles, reserved against
all Taxes that are payable by it but are not yet due or that are due and payable
by it or have been assessed against it but have not yet been paid.
Section 3.05 Litigation. Except as set forth on Schedule 3.05 or in the
---------- -------------
notes to the most recent audited financial statements set forth on Schedule
--------
5.02(a), there are not, in any court or before any arbitrator of any kind or
-------
before or by any governmental or non-governmental body, any actions, suits or
proceedings pending or (to the knowledge of the Company) threatened against (a)
the Company or any Subsidiary or any of their respective businesses or
properties or (b) any Loan Document, except actions, suits or proceedings that,
if adversely determined, would not, singly or in the aggregate, reasonably be
expected to have a Materially Adverse Effect on (x) the Company and the
Consolidated Subsidiaries taken as a whole, (y) any Loan Document or (z) the
Collateral.
Section 3.06 No Adverse Change or Event. Since December 31, 1996 no change
--------------------------
in the business, assets, Liabilities, financial condition, results of operations
or business prospects of the Company or any Subsidiary has occurred, and no
event has occurred or failed to occur, that has had or could reasonably be
expected to have, either alone or in conjunction with all other such changes,
events and failures, a Materially Adverse Effect on (a) the Company and the
Consolidated Subsidiaries taken as a whole, (b) any Loan Document or (c) the
Collateral. Such an adverse change may have occurred, and such an event may have
occurred or failed to occur, at any particular time notwithstanding the fact
that at such time no Default shall have occurred and be continuing.
Section 3.07 Additional Adverse Facts. Except for facts and circumstances
------------------------
disclosed on Schedule 3.05 or Schedule 3.07 or in the notes to the financial
------------- -------------
statements referred to in Section 5.02(a), no fact or circumstance is known to
the Company, as of the Agreement Date, that, either alone or in conjunction with
all other such facts and circumstances, has had or could reasonably be expected
to have (so far as the Company and the Subsidiaries can foresee) a
14
Materially Adverse Effect on (a) the Company and the Consolidated Subsidiaries
taken as a whole, (b) any Loan Document or (c) the Collateral. If a fact or
circumstance disclosed on such Schedules or in such notes should in the future
have a Materially Adverse Effect on (x) the Company and the Consolidated
Subsidiaries taken as a whole, (y) any Loan Document or (z) the Collateral, such
Materially Adverse Effect shall be a change or event subject to Section 3.06
notwithstanding such disclosure.
Section 3.08 Investment Company Act. Neither the Company nor any
----------------------
Subsidiary is an "investment company" or a Person "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940.
Section 3.09 Compliance With Applicable Law and Contracts. The Company and
--------------------------------------------
each Subsidiary is, to the best of the Company's knowledge, in compliance with
all Applicable Law and the terms of all Contracts to which such Person is a
party or by which it or any of its properties may be bound, except for non-
compliances that, either singly or in the aggregate, would not reasonably be
expected to have a Materially Adverse Effect on (a) the Company and its
Consolidated Subsidiaries taken as a whole, (b) any Loan Document or (c) the
Collateral.
Section 3.10 Substance Release and Disposal. Except as set forth on
------------------------------
Schedule 3.10, there have been no releases or disposals of hazardous wastes,
environmental contaminants or other substances in quantities or locations that,
singly or in the aggregate, could result in the incurrence by the Company or any
Subsidiary of remedial obligations under Applicable Law that would reasonably be
expected to have a Materially Adverse Effect on the Company and the Consolidated
Subsidiaries taken as a whole. Except as set forth on Schedule 3.10, neither the
-------------
Company nor any Subsidiary has received any notice or order advising it that it
has or may have any remedial obligation with respect to any such releases or
disposals or that it is or may be responsible for the costs of any remedial
action taken or to be taken by any other Persons with respect to any such
releases or disposals that, singly or in the aggregate, could reasonably be
expected to have a Materially Adverse Effect on the Company and the Consolidated
Subsidiaries taken as a whole.
ARTICLE 4
CERTAIN COVENANTS
-----------------
From the Agreement Date and until the Repayment Date,
A. The Company shall and shall cause each Subsidiary to:
----------------------------------------------------
Section 4.01 Preservation of Existence and Properties, Scope of Business,
------------------------------------------------------------
Compliance With Law, Preservation of Enforceability. (a) Preserve and maintain
---------------------------------------------------
its corporate existence (except as contemplated by Section 4.08) and all of its
other franchises, licenses, rights and privileges, (b) preserve, protect and
obtain all Intellectual Property, and preserve and maintain in good repair,
working order and condition all other properties, required for the conduct of
its business, (c) engage only in businesses in substantially the same fields as
the businesses conducted on the Agreement Date and in businesses directly
related thereto, (d)
15
comply with Applicable Law and (e) take all action and obtain all consents and
Governmental Approvals and make all Governmental Registrations required so that
its obligations under the Loan Documents will at all times be legal, valid and
binding and enforceable in accordance with their respective terms, except that
this Section 4.01 (other than clauses (a), insofar as it requires any Loan Party
to preserve its corporate existence, (c) and (e)) shall not apply in any
circumstance where noncompliance, together with all other noncompliances with
this Section 4.01, will not have a Materially Adverse Effect on (x) the Company
and the Consolidated Subsidiaries taken as a whole, (y) any Loan Document or (z)
the Collateral.
Section 4.02 Insurance. Maintain insurance with responsible insurance
---------
companies against at least such risks and in at least such amounts as is
customarily maintained by similar businesses, or, if greater in scope or
coverage, as may be required by Applicable Law.
Section 4.03 Additional Significant Subsidiaries. Not later than the tenth
-----------------------------------
day after the date it forms or acquires any new Significant Subsidiary or any
Subsidiary becomes a Significant Subsidiary (as determined on the basis of the
most recent financial statements of the Company and the Consolidated
Subsidiaries furnished to the Banks pursuant to Section 5.01), deliver to the
Administrative Agent (i) certificates representing all (or, in the case of any
such new Significant Subsidiary that is not a United States Person and that is
not a Subsidiary of Xpedite UK, such lesser amount as is the maximum amount that
can be subjected to the Security Interest without, in the reasonable opinion of
the Company, resulting in a material adverse tax consequence to the Company) of
the issued and outstanding shares of capital stock of such new Significant
Subsidiary held by the Company and the Subsidiaries (other than directors'
qualifying shares), together with appropriate stock powers, duly endorsed in
blank, (ii) if the owner or owners of such shares of capital stock have not
executed and delivered a Security Agreement or UK Security Agreement that
subjects such shares of capital stock to the Security Interest, a Security
Agreement in the form of Exhibit B or a UK Security Agreement in the form of
---------
Exhibit E, as the case may be, duly executed by the owner or owners of such
shares of capital stock, (iii) a Security Agreement in the form of Exhibit B if
---------
such new Significant Subsidiary is a United States Person, or a UK Security
Agreement in the form of Exhibit E if such new Significant Subsidiary is
---------
created, incorporated or organized under the laws of the United Kingdom or any
jurisdiction therein, or, in any other case, a security agreement substantially
similar in purpose and effect as the UK Security Agreements and in form
reasonably satisfactory to the Administrative Agent, as the case may be, duly
executed by such new Significant Subsidiary, (iv) a Subsidiary Guaranty
Supplement in the form of Schedule 4.03, duly executed by such new Significant
-------------
Subsidiary and (v) such certificates, resolutions, legal opinions, copies of
filings and notices, and other materials, relating to such new Significant
Subsidiary or such owner or owners, the documents referred to above and the
actions required thereunder, as the Administrative Agent may reasonably request.
Section 4.04 Use of Proceeds. Use the proceeds of the Loans only (a) to
---------------
repay Specified Existing Indebtedness, (b) to fund the purchase price of the
Acquisitions, (c) to pay transaction costs in connection herewith and with the
Acquisitions and (d) for general corporate purposes. None of the proceeds of any
of the Loans shall be used (i) to purchase or carry, or to reduce or retire or
refinance any credit incurred to purchase or carry, any margin stock (within the
meaning of Regulations U and X of the Board of Governors of the Federal Reserve
System) or to extend credit to others for the purpose of purchasing or carrying
any such margin stock or
16
(ii) for the purpose of reducing or discharging, directly or indirectly, any
existing liability of Worldwide in relation to the acquisition of shares in
Xpedite UK. If requested by any Bank, the Borrowers shall complete and sign Part
I of a copy of Federal Reserve Form U-1 referred to in Regulation U and deliver
such copy to such Bank.
B. The Company shall not, and shall not permit any Subsidiary to, directly
-----------------------------------------------------------------------
or indirectly:
-------------
Section 4.05 Indebtedness. Have any Indebtedness at any time, except that
------------
this Section 4.05 shall not apply to (a) the Loans, (b) Guaranties permitted
pursuant to Section 4.06(a), (c) Existing Indebtedness (other than Specified
Existing Indebtedness), (d) Intercompany Indebtedness, (e) Indebtedness of the
Company or any Subsidiary owed to the Company or any Subsidiary and incurred in
the ordinary course of business pursuant to customary cash management practices
of the Company and the Subsidiaries and (f) other Indebtedness in an aggregate
outstanding amount not in excess of $5,000,000 at any time.
Section 4.06 Guaranties. Be obligated, at any time, in respect of any
----------
Guaranty, except that this Section 4.06 shall not apply to (a) Existing
Guaranties and (b) Permitted Guaranties.
Section 4.07 Liens. Permit to exist, at any time, any Lien upon any of its
-----
properties or assets of any character, whether now owned or hereafter acquired,
or upon any income or profits therefrom, except that this Section 4.07 shall not
apply to Permitted Liens; provided, however, that if, notwithstanding this
-------- -------
Section 4.07, any Lien to which this Section is applicable shall be created or
arise, the Liabilities of the Loan Parties under the Loan Documents shall, to
the extent such Lien attaches to any asset that does not constitute Collateral
or to any asset with respect to which such Lien would be prior to the Security
Interest, automatically be secured by such Lien equally and ratably with the
other Liabilities secured thereby, and the holder of such other Liabilities, by
accepting such Lien, shall be deemed to have agreed thereto and to share with
the Banks, on that basis, the proceeds of such Lien, whether or not the Banks'
security interest shall be perfected; provided further, however, that
-------- ------- -------
notwithstanding such equal and ratable securing and sharing, the existence of
such Lien shall constitute a default by the Borrower in the performance or
observance of this Section 4.07.
Section 4.08 Merger or Consolidation; Acquisitions. Merge or consolidate
-------------------------------------
with any Person, or acquire any assets or business from or Capital Securities of
any Person, except that, if after giving effect thereto no Default would exist,
this Section 4.08 shall not apply to (a) any merger or consolidation of the
Company or any Subsidiary (other than Xpedite UK or XSL) with the Company or any
Subsidiary (other than Xpedite UK or XSL), provided that, in the case of a
merger to which the Company is party, the Company shall be the continuing Person
and, in the case of any merger to which any Guarantor that is a United States
Person and any Subsidiary that is not a Guarantor or is not a United States
Person are party, the Guarantor that is a United States Person shall be the
continuing Person, (b) any acquisition of assets in the ordinary course of
business, (c) the Acquisitions, (d) any Permitted Restructuring Transaction and
(e) any other acquisition, so long as the aggregate consideration paid or
otherwise provided by the Company and its Subsidiaries for all such other
acquisitions since the Agreement Date does not exceed $10,000,000.
17
Section 4.09 Disposition of Assets. Sell, lease, license, transfer or
---------------------
otherwise dispose of any asset or any interest therein, except that this Section
4.09 shall not apply to (a) any disposition of any asset or any interest therein
in the ordinary course of business, (b) any disposition of any obsolete or
retired property not used or useful in its business, (c) any disposition of any
asset or any interest therein to the Company or a Guarantor that is a United
States Person, (d) any Permitted Restructuring Transaction, (e) other
dispositions for cash in an aggregate amount with respect to all such
dispositions not in excess of $10,000,000 and (f) any transaction to which any
of the other provisions of this Agreement (other than Section 4.16) is by its
express terms inapplicable.
Section 4.10 Restricted Payments. Make or declare or otherwise become
-------------------
obligated to make any Restricted Payment, except that this Section 4.10 shall
not apply to any Restricted Payment (a) made by any Subsidiary to the Company or
any Guarantor that is a United States Person or in the ordinary course of
business pursuant to customary cash management practices of the Company and the
Subsidiaries or (b) in an amount, together with all other Restricted Payments
made pursuant to this clause (b), not in excess of $100,000.
Section 4.11 Limitation on Restrictive Covenants. Permit to exist, at any
-----------------------------------
time, any consensual restriction limiting the ability (whether by covenant,
event of default, subordination or otherwise) of any Subsidiary to (a) pay
dividends or make any other distributions on shares of its capital stock held by
the Company or any other Subsidiary, (b) pay any obligation owed to the Company
or any other Subsidiary, (c) make any loans or advances to or investments in the
Company or in any other Subsidiary, (d) transfer any of its property or assets
to the Company or any other Subsidiary or (e) create any Lien upon its property
or assets whether now owned or hereafter acquired or upon any income or profits
therefrom, except that this Section 4.11 shall not apply to Permitted
Restrictive Covenants.
Section 4.12 Issuance or Disposition of Capital Securities. Issue any of
---------------------------------------------
its Capital Securities or sell, transfer or otherwise dispose of any Capital
Securities of any Significant Subsidiary, except that this Section 4.12 shall
not apply to (a) any Permitted Restructuring Transaction, (b) any issuance of
Capital Securities of a Significant Subsidiary (i) that are subjected to the
Security Interest in a manner reasonably satisfactory to the Administrative
Agent or (ii) for the purpose of effecting a disposition contemplated by Section
4.09(e), (c) any issuance by the Company of its capital stock to any present or
former employee of the Company pursuant to any stock option plan of the Company
in effect on the Agreement Date or (d) any issuance, sale, transfer or other
disposition of such Capital Securities as consideration for an acquisition
permitted by Section 4.08(e).
Section 4.13 Investments. Make or acquire any Investment or have any
-----------
Investment outstanding, except that this Section 4.13 shall not apply to (a)
Money Market Investments, (b) Investments constituting acquisitions permitted
under Section 4.08, (c) Investments by the Company or any Subsidiary in the
Company or any Guarantor that is a United States Person, (d) Investments
existing on the Agreement Date and set forth on Schedule 4.13, (e) any Permitted
-------------
Restructuring Transactions, (f) Investments by the Company or any Subsidiary in
the Company or any Subsidiary made in the ordinary course of business of the
Company or any Subsidiary pursuant to customary cash management practices of the
Company and the
18
Subsidiaries and (g) other Investments in an aggregate amount with respect to
all such Investments not in excess of $5,000,000 at any time.
Section 4.14 Taxes of Other Persons. (a) File a consolidated, combined,
----------------------
unitary or similar group tax return with any other Person other than, in the
case of the Company, a Consolidated Subsidiary and, in the case of any such
Subsidiary, the Company or a Consolidated Subsidiary, or (b) enter into any tax
sharing agreement or similar Contract to pay, or make payments with respect to,
any Taxes owing by any Person other than the Company or a Consolidated
Subsidiary.
Section 4.15 Benefit Plans. Have, or permit any of its ERISA Affiliates to
-------------
have, any Benefit Plan other than an Existing Benefit Plan.
Section 4.16 Transactions with Affiliates. Effect any transaction (or
----------------------------
series of related transactions) with any Affiliate (other than the Company and
any Guarantor that is a United States Person) that is on a basis less favorable
than would at the time be obtainable with an unrelated third party in a
commercially reasonable transaction, except that this Section 4.16 shall not
apply to (a) any Permitted Restructuring Transaction, (b) the provision of
customary overhead and corporate managerial services by the Company or a
Subsidiary to the Company or to any of the Subsidiaries and (c) transactions in
the ordinary course of business of the Company or any Subsidiary pursuant to
customary cash management practices of the Company and the Subsidiaries.
Section 4.17 Substance Storage and Disposal. Permit any hazardous wastes,
------------------------------
environmental contaminants or other substances the improper release or disposal
of which could result in the incurrence by the Company or any Subsidiary of
remedial obligations under Applicable Law, to be brought onto or stored on the
properties owned or leased by it if such remedial obligations could reasonably
be expected to have a Materially Adverse Effect on the Company and the
Consolidated Subsidiaries taken as a whole.
C. The Company shall not:
---------------------
Section 4.18 Leverage Ratio. Permit the Leverage Ratio to be greater than
--------------
3.50 to 1 at any time.
Section 4.19 Interest Coverage Ratio. Permit the Interest Coverage Ratio
-----------------------
to be less than 3.00 to 1 at any time.
ARTICLE 5
INFORMATION
-----------
Section 5.01 Information to Be Furnished. From the Agreement Date and
---------------------------
until the Repayment Date, the Company shall furnish to each Bank:
(a) Quarterly Financial Statements. As soon as available and in any
------------------------------
event within 55 days after the close of each of the first three quarterly
accounting periods in each fiscal year
19
of the Company commencing with the quarterly period ending March 31, 1998, a
consolidated balance sheet of the Company and the Consolidated Subsidiaries as
at the end of such quarterly period and the related consolidated statements of
income, retained earnings and cash flows of the Company and the Consolidated
Subsidiaries for such quarterly period and for the elapsed portion of the fiscal
year ended with the last day of such quarterly period, setting forth in each
case in comparative form the figures for the corresponding periods of the
previous fiscal year.
(b) Year-End Financial Statements; Accountants' Certificate. As soon
-------------------------------------------------------
as available and in any event within 105 days after the end of each fiscal year
of the Company, commencing with the fiscal year ending December 31, 1997:
(i) a consolidated balance sheet of the Company and the
Consolidated Subsidiaries as at the end of such fiscal year and the related
consolidated statements of income, retained earnings and cash flows of the
Company and the Consolidated Subsidiaries for such fiscal year, setting
forth in comparative form the figures as at the end of and for the previous
fiscal year, and
(ii) an audit report of Ernst & Young, or other independent
certified public accountants of recognized standing reasonably satisfactory
to the Required Banks.
(c) Officer's Certificate as to Financial Statements and Defaults.
-------------------------------------------------------------
At the time that financial statements are furnished pursuant to Section 5.01(a)
or (b), a certificate of the president or chief financial officer of the
Company, stating that to the best of his or her knowledge after due inquiry, no
Default or Event of Default exists or, if one exists, the actions being taken to
remedy it. At the time that financial statements are furnished pursuant to
Section 5.01(a) and (b), a certificate of the president or chief financial
officer of the Company calculating the Leverage Ratio.
(d) Reports and Filings. (i) As soon as practicable upon receipt
-------------------
thereof, copies of all material reports, if any, submitted to the Company or any
Subsidiary, or the Board of Directors of the Company or any Subsidiary, by its
independent certified public accountants, including any management letter; (ii)
as soon as practicable, copies of all such financial statements and reports as
the Company or any Subsidiary shall send to its public stockholders, if any, and
of all registration statements and all regular or periodic reports that the
Company or any Subsidiary shall file with the Securities and Exchange Commission
or any successor commission.
(e) Requested Information. From time to time and promptly upon
---------------------
request of any Bank, such Information regarding the Loan Documents, the Loans or
the business, assets, Liabilities, financial condition, results of operations or
business prospects of the Company and the Subsidiaries as such Bank through the
Administrative Agent may reasonably request.
(f) Notice of Defaults, Material Adverse Changes and Other Matters.
--------------------------------------------------------------
Prompt notice, after a senior officer of any Loan Party shall have become aware
thereof, of:
(i) any Default,
20
(ii) other than any of the following resulting from a Permitted
Restructuring Transaction, the acquisition or formation of a new Subsidiary
and, in the case of each such new Subsidiary, its name, jurisdiction of
incorporation, the percentages of the various classes of its Capital
Securities owned by the Company or another Subsidiary and whether or not
such new Subsidiary is a Consolidated Subsidiary or a Significant
Subsidiary,
(iii) other than any of the following resulting from a Permitted
Restructuring Transaction, any change in the name of any Subsidiary, its
jurisdiction of incorporation, the percentages of the various classes of
its Capital Securities owned by the Company or another Subsidiary or its
status as a Consolidated or non-Consolidated Subsidiary,
(iv) the threatening or commencement of, or the occurrence or
nonoccurrence of any change or event relating to, any action, suit or
proceeding that would cause the Representation and Warranty contained in
Section 3.05 to be incorrect if made at such time,
(v) the occurrence or nonoccurrence of any change or event
that would cause the Representation and Warranty contained in Section 3.06
or Section 3.10 to be incorrect if made at such time,
(vi) any event or condition referred to in clauses (i) through
(vi) of Section 6.01(g), whether or not such event or condition shall
constitute an Event of Default,
(vii) any amendment of the certificate of incorporation or by-
laws of the Company or any Subsidiary that is a Loan Party, and
(viii) any material amendment or material modification of any of
the Acquisition Documents.
Section 5.02 Accuracy of Financial Statements and Information.
-------------------------------------------------
(a) Financial Statements. The Company hereby represents and warrants
--------------------
that (i) Schedule 5.02(a) sets forth a complete and correct list of the
----------------
financial statements submitted by the Company to the Banks in order to induce
them to execute and deliver this Agreement, (ii) such financial statements are
complete and correct and fairly present in all material respects, in accordance
with Generally Accepted Accounting Principles, the consolidated financial
position of the Company and the Consolidated Subsidiaries as at their respective
dates and the consolidated results of operations, retained earnings and, as
applicable, changes in financial position or cash flows of the Company and such
Subsidiaries for the respective periods to which such statements relate (except
that the interim financial statements included therein may omit footnotes and
are subject to year-end adjustments), (iii) except as disclosed or reflected in
such financial statements, as at September 30, 1997, neither the Company nor any
Subsidiary had any Liability, contingent or otherwise, or any unrealized or
anticipated loss, that, singly or in the aggregate, has had or could reasonably
be expected to have a Materially Adverse Effect on the Company and the
Consolidated Subsidiaries taken as a whole, and (iv) the financial statements
furnished pursuant to Section 5.01(a) or (b) will fairly present in all material
respects, in
21
accordance with Generally Accepted Accounting Principles except for changes
therein or departures therefrom that are described in the certificate or report
accompanying such statements and that have been approved in writing by the
Company's then current independent certified public accountants), the
consolidated financial position of the Company and the Consolidated Subsidiaries
as at their respective dates and the consolidated results of operations,
retained earnings and (in the case of audited financial statements included
therein) cash flows of the Company and such Subsidiaries for the respective
periods to which such statements relate (except that the interim financial
statements included therein may omit footnotes and are subject to year-end
adjustments) and the furnishing of the same to the Banks shall constitute a
representation and warranty by the Company made on the date the same are
furnished to the Banks to that effect and to the further effect that, except as
disclosed or reflected in such financial statements, as at the respective dates
thereof, neither the Company nor any Subsidiary had any Liability, contingent or
otherwise, or any unrealized or anticipated loss, that, singly or in the
aggregate, has had or could reasonably be expected to have a Materially Adverse
Effect on the Company and the Consolidated Subsidiaries taken as a whole.
(b) Other Information. The Company hereby represents and warrants
-----------------
that the Information furnished to the Administrative Agent or the Banks by or on
behalf of the Company on or prior to the Agreement Date (other than the
financial statements referred to in Section 5.02(a)), and the Information
furnished to the Administrative Agent or the Banks by or on behalf of the
Company after the Agreement Date (other than the financial statements referred
to in Section 5.02(a)), in the case of any Information prepared in the ordinary
course of business, was or shall be, as the case may be, complete and correct in
all material respects in the light of the purpose prepared, and, in the case of
any Information the preparation of which was requested by any Bank, was or shall
be, as the case may be, complete and correct in all material respects to the
extent necessary to give such Bank true and accurate knowledge of the subject
matter thereof and, in each case, did not or will not, as the case may be,
contain any untrue statement of a material fact.
Section 5.03 Additional Covenants Relating to Disclosure. From the
-------------------------------------------
Agreement Date and until the Repayment Date, the Company shall and shall cause
each Subsidiary to:
(a) Accounting Methods and Financial Records. Maintain a system of
----------------------------------------
accounting, and keep such books, records and accounts, as may be required or
necessary to permit (i) the preparation of financial statements required to be
delivered pursuant to Section 5.01(a) and (b) and (ii) the determination of the
compliance of the Company and the Subsidiaries with the terms of the Loan
Documents.
(b) Fiscal Year. Maintain the same opening and closing date for each
-----------
fiscal year as for the fiscal year reflected in the Base Financial Statements.
(c) Visits, Inspections and Discussions. Subject to Section 10.06,
-----------------------------------
permit representatives (whether or not officers or employees) of any Bank, from
time to time during normal business hours, as often as may be reasonably
requested, upon reasonable prior notice, to (i) visit any of its premises or
property, (ii) inspect, and verify the amount, character and condition of, any
of its property, (iii) review and make copies from its books and records,
including management letters prepared by its independent certified public
accountants, and (iv)
22
discuss with its senior financial officers its business, assets, Liabilities,
financial condition, results of operation and business prospects.
Section 5.04 Authorization of Third Parties to Deliver Information. The
-----------------------------------------------------
Company hereby authorizes and directs each Person whose preparation or delivery
to the Administrative Agent or the Banks of any opinion, report or other
Information is a condition or covenant under the Loan Documents (including under
Article 2 or this Article 5) to so prepare or deliver such Information for the
benefit of the Administrative Agent and the Banks. The Borrower agrees to
promptly execute and deliver from time to time such further authorizations to
effect the purposes of this Section 5.04 as the Agent or any Bank may reasonably
request.
ARTICLE 6
DEFAULT
-------
Section 6.01 Events of Default. Each of the following shall constitute an
-----------------
Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary, or within or without the control of the Company, any
Subsidiary or any other Loan Party, or be effected by operation of law or
pursuant to any judgment or order of any court or any order, rule or regulation
of any governmental or nongovernmental body:
(a) Any payment of principal of or interest on any of the Loans or
the Notes, or any payment of any fees shall not be made (i) in the case of
principal of Loans when and as due (whether at maturity, by reason of notice of
prepayment or acceleration or otherwise) and in any case in accordance with the
terms of this Agreement and the Notes and (ii) in all other cases, within 5 days
of the date on which such payment is due;
(b) Any Loan Document Representation and Warranty shall at any time
prove to have been incorrect or misleading in any material respect when made;
(c) (i) The Company shall default in the performance or observance
of:
(A) any term, covenant, condition or agreement contained in
Section 4.01(a) (insofar as such Section requires the preservation of the
corporate existence of each of the Loan Parties), 4.01(e), 4.04 through
4.19 or 5.01(f)(i); or
(B) any term, covenant, condition or agreement contained in
this Agreement (other than a term, covenant, condition or agreement a
default in the performance or observance of which is elsewhere in this
Section specifically dealt with) and, if capable of being remedied, such
default shall continue unremedied for a period of 30 days after notice of
such default from the Administrative Agent; or
(ii) Any Loan Party shall default in the performance or
observance of:
23
(A) any term, covenant, condition or agreement contained in
Section 8.01 hereof or in Sections 1.02, 2.01(a)(i), 2.01(a)(iii)(B),
2.01(a)(vii), 2.01(b)(i), 2.01(b)(ii), 2.01(b)(iv) or 2.01(c)(v) of any
Security Agreement to which such Loan Party is a party, or, in the case of
Xpedite UK, Sections 6.1.2(A), 9.1.1(A), 9.1.1(B), 9.1.2, 23.3.1 of the
Xpedite UK Security Agreement, or, in the case of XSL or any Significant
Subsidiary of Xpedite UK other than XSL, Sections 6.1.2(A), 9.1.1(A),
9.1.1(B), 9.1.2, 21.3.1 of the XSL Security Agreement or the UK Security
Agreement to which such Significant Subsidiary is a party, as the case may
be, or, in the case of any other security agreement executed and delivered
pursuant to Section 4.03(iii), the sections thereof directly analogous to
such Sections in the UK Security Agreements; or
(B) any term, covenant, condition or agreement contained in
any Loan Document (other than any term, covenant, condition or agreement a
default in the performance or observance of which is elsewhere in this
Section specifically dealt with) and, if capable of being remedied, such
default shall continue unremedied for a period of 30 days after notice of
such default from the Administrative Agent;
(d) (i) The Company, any Subsidiary or any other Loan Party shall
fail to pay, in accordance with its terms and when due and payable (after giving
effect to applicable grace periods), any of the principal of or interest on any
of its Indebtedness having a then outstanding principal amount in excess of
$2,500,000, (ii) the maturity of any such Indebtedness shall, in whole or in
part, have been accelerated, or any such Indebtedness shall, in whole or in
part, have been required to be prepaid prior to the stated maturity thereof, in
accordance with the provisions of any Contract evidencing, providing for the
creation of or concerning such Indebtedness, or (iii) any event shall have
occurred and be continuing that permits any holder or holders of any
Indebtedness of any such Person (other than the Loans), any trustee or
Administrative Agent acting on behalf of such holder or holders or any other
Person so to accelerate such maturity or require any such prepayment;
(e) (i) The Company, any Subsidiary or any other Loan Party shall
(A) commence a voluntary case under the Federal bankruptcy laws (as now or
hereafter in effect), (B) file a petition seeking to take advantage of any other
laws, domestic or foreign, relating to bankruptcy, insolvency, reorganization,
winding up or composition or adjustment of debts, (C) consent to or fail to
contest in a timely and appropriate manner any petition filed against it in an
involuntary case under such bankruptcy laws or other laws, (D) apply for, or
consent to, or fail to contest in a timely and appropriate manner, the
appointment of, or the taking of possession by, a receiver, custodian, trustee,
liquidator or the like of itself or of a substantial part of its assets,
domestic or foreign, (E) admit in writing its inability to pay, or generally not
be paying, its debts (other than those that are the subject of bona fide
disputes) as they become due, (F) make a general assignment for the benefit of
creditors, or (G) take any corporate action for the purpose of authorizing any
of the foregoing;
(ii) (A) A case or other proceeding shall be commenced against
the Company, any Subsidiary or any other Loan Party seeking (1) relief under the
Federal bankruptcy laws (as now or hereafter in effect) or under any other laws,
domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding
up or composition or adjustment of
24
debts, or (2) the appointment of a trustee, receiver, custodian, liquidator or
the like of the Company, any Subsidiary or any other Loan Party, or of all or
any substantial part of the assets, domestic or foreign, of the Company, any
Subsidiary or any other Loan Party, and, with respect to both clauses (1) and
(2), such case or proceeding shall continue undismissed and unstayed for a
period of 60 days, or (B) an order granting the relief requested in such case or
proceeding against the Company, any Subsidiary or any other Loan Party
(including an order for relief under such Federal bankruptcy laws) shall be
entered;
(f) A judgment or order shall be entered against the Company, any
Subsidiary or any other Loan Party by any court, and shall continue undischarged
and unstayed for a period of 45 days (i) in which the aggregate amount of all
such judgments and orders exceeds $2,500,000 or (ii) in the case of any judgment
or order for other than the payment of money, such judgment or order could, in
the reasonable judgment of the Required Banks, together with all other such
judgments or orders, have a Materially Adverse Effect on (A) the Company and the
Consolidated Subsidiaries taken as a whole, (B) any Loan Document or (C) the
Collateral; or
(g) (i) any Termination Event shall occur with respect to any
Benefit Plan of the Company, any Subsidiary, any other Loan Party or any of
their respective ERISA Affiliates, (ii) any Accumulated Funding Deficiency,
whether or not waived, shall exist with respect to any such Benefit Plan, (iii)
any Person shall engage in any Prohibited Transaction involving any such Benefit
Plan, (iv) the Company, any Subsidiary, any other Loan Party or any of their
respective ERISA Affiliates shall be in "default" (as defined in ERISA Section
4219(c)(5)) with respect to payments owing to any such Benefit Plan that is a
Multiemployer Benefit Plan as a result of such Person's complete or partial
withdrawal (as described in ERISA Section 4203 or 4205) therefrom, (v) the
Company, any Subsidiary, any other Loan Party or any of their respective ERISA
Affiliates shall fail to pay when due an amount that is payable by it to the
PBGC or to any such Benefit Plan under Title IV of ERISA or (vi) a proceeding
shall be instituted by a fiduciary of any such Benefit Plan against the Company,
any Subsidiary, any other Loan Party or any of their respective ERISA Affiliates
to enforce ERISA Section 515 and such proceeding shall not have been dismissed
within 30 days thereafter, except that no event or condition referred to in
clauses (i) through (vi) shall constitute an Event of Default if it, together
with all other such events or conditions at the time existing, has not
subjected, and in the reasonable determination of the Required Banks will not
subject, the Company, any Subsidiary or any other Loan Party to any Liability
that, alone or in the aggregate with all such Liabilities for all such Persons,
exceeds $1,000,000; or
(h) Any Loan Party or any Affiliate of any Loan Party asserts, or any
Loan Party or any Affiliate of any Loan Party institutes any proceedings seeking
to establish, that (i) any provision of the Loan Documents is invalid, not
binding or unenforceable or (ii) the Security Interest is not a valid and
perfected first priority security interest in the Collateral subject only to
Permitted Liens; or
(i) (i) The Premier Acquisition shall have been consummated or (ii)
any person or group of persons acting together (within the meaning of Section
13 or 14 of the Securities Exchange Act of 1934) shall have or acquire at any
time after the Agreement Date beneficial ownership (within the meaning of Rule
13d-3 promulgated by the Securities and
25
Exchange Commission under said Act) of, or the right to exercise voting power
with respect to, more than 30% of the Capital Securities of the Company
outstanding at such time.
Section 6.02 Remedies Upon Event of Default. During the continuance of
------------------------------
any Event of Default (other than one specified in Section 6.01(e)) and in every
such event, the Administrative Agent may and, if the Required Banks shall so
request, shall, upon notice to the Company, do either or both of the following:
(a) declare, in whole or, from time to time, in part, the principal of and
interest on the Loans and the Notes and all other amounts owing under the Loan
Documents to be, and the Loans and the Notes and all such other amounts shall
thereupon and to that extent become, immediately due and payable or (b)
terminate, in whole or, from time to time, in part, the Commitments. Upon the
occurrence of an Event of Default specified in Section 6.01(e), automatically
and without any notice to the Borrower or the Guarantor, (a) the principal of
and interest on the Loans and the Notes and all other amounts owing under the
Loan Documents shall be immediately due and payable and (b) the Commitments
shall terminate. Presentment, demand, protest or notice of any kind (other than
the notice provided for in the first sentence of this Section 6.02) are hereby
expressly waived.
ARTICLE 7
ADDITIONAL CREDIT FACILITY PROVISIONS
-------------------------------------
Section 7.01 Mandatory Suspension and Conversion of Eurocurrency Rate
--------------------------------------------------------
Loans. A Bank's obligations to make, continue or convert into Eurocurrency Rate
-----
Loans of any Type shall be suspended, all such Bank's outstanding Loans of that
Type shall be converted (or, in the case of Loans to Xpedite UK, shall be repaid
(unless Xpedite UK and such Bank shall have agreed to an alternative interest
rate on such Bank's Loans to Xpedite UK, which alternative interest rate they
agree to negotiate in good faith)) on the last day of their applicable Interest
Periods (or, if earlier, in the case of clause (c) below, (or, in the case of
Loans to Xpedite UK, shall be repaid) on the last day such Bank may lawfully
continue to maintain Loans of that Type or, in the case of clause (d) below, on
the day determined by such Bank to be the last Business Day before the effective
date of the applicable restriction) into, and all pending requests for the
making or continuation of or conversion into Loans of such Type by such Bank
shall be deemed requests for, Base Rate Loans (or, in the case of Loans to
Xpedite UK, shall be deemed withdrawn (unless Xpedite UK and such Bank shall
have agreed to an alternative interest rate on such Bank's Loans to Xpedite
UK)), if:
(a) on or prior to the determination of an interest rate for a
Eurocurrency Rate Loan of that Type for any Interest Period, the Administrative
Agent reasonably determines that for any reason appropriate information is not
available to it for purposes of determining the Eurocurrency Rate for such
Interest Period;
(b) on or prior to the first day of any Interest Period for a
Eurocurrency Rate Loan of that Type, the Required Banks have informed the
Administrative Agent of their determination that the Eurocurrency Rate as
determined by the Administrative Agent for such Interest Period would not
accurately reflect the cost to such Banks of making, continuing or converting
into a Eurocurrency Rate Loan of such Type for such Interest Period; or
26
(c) at any time such Bank reasonably determines that any Regulatory
Change Enacted after the Agreement Date makes it unlawful or impracticable for
such Bank or its applicable Lending Office to make, continue or convert into, or
fund, any Eurocurrency Rate Loan of that Type, or to comply with its obligations
hereunder in respect thereof.
If, as a result of this Section 7.01, any Loan of any Bank that would otherwise
be made or maintained as or converted into a Eurocurrency Rate Loan of any Type
for any Interest Period is instead made or maintained as or converted into a
Base Rate Loan (or, in the case of Loans to Xpedite UK, if such Bank and Xpedite
UK have agreed to an alternative interest rate on such Bank's Loans to Xpedite
UK), then, unless the corresponding Loan of each of the other Banks is also to
be made or maintained as or converted into a Base Rate Loan, such Loan shall be
treated as being a Eurocurrency Rate Loan of such Type for such Interest Period
for all purposes of this Agreement (including the timing, application and
proration among the Banks of interest payments, conversions and prepayments)
except for the calculation of the interest rate borne by such Loan. The
Administrative Agent shall promptly notify the applicable Borrower and each Bank
of the existence or occurrence of any condition or circumstance specified in
clause (a) or (b) above, and each Bank shall promptly notify the applicable
Borrower and the Administrative Agent of the existence or occurrence of any
condition or circumstance specified in clause (c) above applicable to such
Bank's Loans, but the failure by the Administrative Agent or such Bank to give
any such notice shall not affect such Bank's rights hereunder.
Section 7.02 Regulatory Changes. If in the reasonable determination of
------------------
any Bank, (a) any Regulatory Change Enacted after the Agreement Date shall
directly or indirectly (i) reduce the amount of any sum received or receivable
by such Bank with respect to any Loan, (ii) impose a cost on such Bank or any
Affiliate of such Bank that is attributable to the making, funding or
maintaining of, or such Bank's commitment to make or acquire, any Loan,
including any reserve requirement, whether under Regulation D or otherwise,
(iii) require such Bank or any Affiliate of such Bank to make any payment on or
calculated by reference to the gross amount of any amount received by such Bank
under any Loan Document in respect of its Loans or its obligations to make Loans
or (iv) reduce, or have the effect of reducing, the rate of return on any
capital of such Bank or any Affiliate of such Bank that such Bank or such
Affiliate is required to maintain on account of any Loan or such Bank's
commitment to make or acquire any Loan and (b) such reduction, increased cost or
payment shall not result from a Tax to which Section 1.13 is applicable, then
the applicable Borrower shall pay to such Bank such additional amounts as such
Bank reasonably determines will, together with any adjustment in the applicable
rates of interest payable hereunder, fully compensate for such reduction,
increased cost or payment. Such additional amounts shall be payable, in the case
of those applicable to prior periods, within 15 days after request by such Bank
for such payment and, in the case of those applicable to future periods, on the
dates specified, or determined in accordance with a method specified, by such
Bank. Each Bank will promptly notify the applicable Borrower of any
determination made by it referred to in clauses (a) and (b) above, but the
failure to give such notice shall not affect such Bank's right to compensation;
provided, however, that the applicable Borrower shall not be required to pay
-------- -------
such additional amounts in respect of any Regulatory Change for any period
ending prior to the date that is 90 days prior to the giving of the notice of
the determination of such additional amounts (unless such period shall have
commenced after the date that such Bank notified the applicable Borrower of the
possibility that additional amounts may be payable as a
27
result of such Regulatory Change), except, if such Regulatory Change shall have
been imposed retroactively, for the period from the effective date of such
Regulatory Change to the date that is 90 days after the first date on which such
Bank reasonably should have had knowledge of such Regulatory Change.
Section 7.03 Funding Losses. The applicable Borrower shall pay to each
--------------
Bank, upon request, such amount or amounts as such Bank reasonably determines
are necessary to compensate it for any loss, cost or expense (excluding loss of
the Applicable Margin) incurred by it as a result of (a) any payment, prepayment
or conversion of a Eurocurrency Rate Loan on a date other than the last day of
an Interest Period for such Eurocurrency Rate Loan or (b) a Eurocurrency Rate
Loan for any reason not being made or converted, or any payment of principal
thereof or interest thereon not being made, on the date therefor determined in
accordance with the applicable provisions of this Agreement. At the election of
such Bank, and without limiting the generality of the foregoing, but without
duplication, such compensation on account of losses may include an amount equal
to the excess of (i) the interest that would have been received from the
applicable Borrower under this Agreement (excluding the Applicable Margin) on
any amounts to be reemployed during an Interest Period or its remaining portion
over (ii) the interest component of the return that such Bank determines it
could have obtained had it placed such amount on deposit in the interbank Dollar
or Sterling market, as the case may be, selected by it for a period equal to
such Interest Period or its remaining portion.
Section 7.04 Certain Determinations. In making the determinations
----------------------
contemplated by Sections 7.01, 7.02 and 7.03, each Bank may make such estimates,
assumptions, allocations and the like that such Person reasonably determines to
be appropriate, and such Person's selection thereof in accordance with this
Section 7.04, and the determinations made by such Person on the basis thereof,
shall be final, binding and conclusive upon the Borrowers, except, in the case
of such determinations, for manifest errors in computation or transmission. Each
Bank shall furnish to the applicable Borrower a certificate outlining in
reasonable detail the computation of any amounts claimed by it under Sections
7.02 and 7.03 and the assumptions underlying such computations.
Section 7.05 Change of Lending Office. If an event occurs with respect to
------------------------
a Lending Office of any Bank that obligates either Borrower to pay any amount
under Section 1.13, makes operable the provisions of clause (c) of Section 7.01
or would, absent this Section 7.05, entitle such Bank to make a claim under
Section 1.13(a) or 7.02, such Bank shall, if requested by the applicable
Borrower, use reasonable efforts to designate another Lending Office or Offices
the designation of which will reduce the amount the Borrowers are so obligated
to pay, eliminate such operability or reduce the amount such Bank is so entitled
to claim, provided that such designation would not, in the sole and absolute
discretion of such Bank be disadvantageous to such Bank in any manner or
contrary to such Bank's policies. Each Bank may at any time and from time to
time change any Lending Office and shall give notice of any such change to the
Administrative Agent and the Borrowers. Except in the case of a change in
Lending Offices made at the request of a Borrower, the designation of a new
Lending Office by any Bank shall not obligate the Borrowers to pay any amount to
such Bank under Section 1.13, make operable the provisions of clause (c) of
Section 7.01 or entitle such Bank to make a claim under Section 1.13(a) or 7.02
if such obligation, the operability of such clause or such claim results
directly from such designation and not from a Regulatory Change Enacted
thereafter.
28
Section 7.06 Replacement of Banks. If any Bank requests compensation
--------------------
pursuant to Section 1.13 or 7.02, or such Bank's obligation to make or continue,
or to convert Loans of any other Type into, any Type of Eurocurrency Rate Loan
shall be suspended pursuant to Section 7.01, the Company, upon three Business
Days' notice, may require that such Bank transfer all of its right, title and
interest under this Agreement and such Bank's Notes to any bank or financial
institution identified by the Company with the consent of the Administrative
Agent (a) if such proposed transferee agrees to assume all of the obligations of
such Bank for consideration equal to the outstanding principal amount of such
Bank's Loans, together with interest thereon to the date of such transfer, and
satisfactory arrangements are made for payment to such Bank of all other amounts
payable hereunder to such Bank on or prior to the date of such transfer
(including any fees accrued hereunder and any amounts that would be payable
under Section 7.03 as if all of such Bank's Loans were being prepaid in full on
such date) and (b) if such Bank being replaced has requested compensation
pursuant to Section 1.13 or 7.02, such proposed transferee's aggregate requested
compensation, if any, pursuant to Section 1.13 or 7.02 with respect to such
replaced Bank's Loans is lower than that of the Bank replaced. Without prejudice
to the survival of any other agreement of the Borrowers hereunder, the
agreements of the Borrowers contained in Sections 1.13, 7.02, 7.03 and 10.02)
shall survive for the benefit of any Bank replaced under this Section 7.06 with
respect to the time prior to such replacement.
ARTICLE 8
GUARANTY
--------
Section 8.01 Guaranty of Payment and Performance; Limitation of Guaranty.
-----------------------------------------------------------
(a) Each of the Guarantors hereby (a) absolutely, unconditionally and
irrevocably guarantees to the Guaranteed Parties the due and punctual payment
and performance of all of the Guaranteed Obligations in accordance with their
respective terms and when and as due (whether at maturity, by reason of
acceleration or otherwise, but giving effect to any applicable grace period set
forth in Section 6.01(a)), or deemed to be due pursuant to Section 8.02, and (b)
agrees so to pay the same when so due, or deemed to be due, upon demand.
(b) It is the intention of the Guarantors and the Guaranteed Parties
that the obligations of the Guarantors under this Article 8 shall be in, but not
in excess of, the maximum amount permitted by Applicable Law. To that end, but
only to the extent such obligations would otherwise be avoidable, the
obligations of each Guarantor under this Article 8 shall be limited to the
maximum amount that, after giving effect to the incurrence thereof, would not
render such Guarantor insolvent or unable to pay its debts as they mature or
leave such Guarantor with an unreasonably small capital. The need for any such
limitation shall be determined, and any such needed limitation shall be
effective, with respect to each Guarantor at the time or times that such
Guarantor is deemed, under Applicable Law, to incur obligations thereunder. Any
such limitation shall be apportioned amongst the Guaranteed Obligations of the
Guaranteed Parties pro rata in accordance with their respective amounts thereof.
This Section 8.01(b) is intended solely to preserve the rights of the Guaranteed
Parties under this Article 8 to the maximum extent permitted by Applicable Law,
and none of the Guarantors or any other Person shall have any right under this
Section 8.01(b) that it would not otherwise have under Applicable Law. For the
29
purposes of this Section 8.01(b), "insolvency", "unreasonably small capital" and
"inability to pay debts as they mature" shall be determined in accordance with
Applicable Law.
Section 8.02 Continuance and Acceleration of Guaranteed Obligations Upon
-----------------------------------------------------------
Certain Events. If:
--------------
(a) any Event of Default resulting in the automatic acceleration of
any Guaranteed Obligations shall occur;
(b) any injunction, stay or the like that enjoins any acceleration,
or demand for the payment of any Guaranteed Obligations that would otherwise be
required or permitted under the Loan Documents shall become effective; or
(c) any Guaranteed Obligations shall be or be determined to be or
become discharged (other than by payment or performance in full), disallowed,
invalid, illegal, void or otherwise unenforceable (whether by operation of any
present or future law or by order of any court or governmental agency) against
the applicable Borrower;
then (i) such Guaranteed Obligations shall, for all purposes hereunder, be
deemed (A) in the case of clause (c), to continue to be outstanding and in full
force and effect notwithstanding the unenforceability thereof against the
applicable Borrower and (B) if such is not already the case, to have thereupon
become immediately due and payable and to have commenced bearing interest at the
Post-Default Rate and (ii) the Guaranteed Parties may exercise all of the rights
and remedies hereunder that would be available to them during an Event of
Default.
Section 8.03 Recovered Payments. The Guaranteed Obligations shall be
------------------
deemed not to have been paid, observed or performed, and the Guarantor's
obligations hereunder in respect thereof shall continue and not be discharged,
to the extent that any payment thereof by either Borrower or any Guarantor, or
out of the proceeds of any collateral, is recovered from or paid over by or for
the account of the Guaranteed Parties for any reason, including as a preference
or fraudulent transfer or by virtue of any subordination (whether present or
future or contractual or otherwise) of the Guaranteed Obligations, whether such
recovery or payment over is effected by any judgment, decree or order of any
court or governmental agency, by any plan of reorganization or by settlement or
compromise by the Guaranteed Parties (whether or not consented to by either
Borrower, any of the Guarantors or any other guarantor) of any claim for any
such recovery or payment over. Each of the Guarantors hereby expressly waives
the benefit of any applicable statute of limitations and agrees that it shall be
liable hereunder whenever such a recovery or payment over occurs.
Section 8.04 Nature of Guarantors' Obligations. The Guarantors'
---------------------------------
obligations under the Loan Documents (a) are absolute and unconditional, (b)
constitute a guaranty of payment and not a guaranty of collection, (c) are as
primary obligor and not as a surety only, (d) shall be a continuing guaranty of
all present and future Guaranteed Obligations and all promissory notes and other
documentation given in extension or renewal or substitution for any of the
Guaranteed Obligations and (e) shall be irrevocable.
Section 8.05 No Release of Guarantors. THE OBLIGATIONS OF EACH OF THE
------------------------
GUARANTORS HEREUNDER SHALL NOT BE REDUCED, LIMITED OR TERMINATED,
30
NOR SHALL ANY GUARANTOR BE DISCHARGED FROM ANY THEREOF, FOR ANY REASON
WHATSOEVER (other than, subject to Sections 8.03, the payment, observance and
performance of the Guaranteed Obligations and except in the event such Guarantor
is not a Significant Subsidiary and is disposed of in accordance with Section
4.09(d)), including (and whether or not the same shall have occurred or failed
to occur once or more than once and whether or not any Guarantor shall have
received notice thereof):
(a) (i) any increase in the principal amount of, or interest rate
applicable to, (ii) any extension of the time of payment, observance or
performance of, (iii) any other amendment or modification of any of the other
terms and provisions of, (iv) any release, composition or settlement (whether by
way of acceptance of a plan of reorganization or otherwise) of, (v) any
subordination (whether present or future or contractual or otherwise) of, or
(vi) any discharge, disallowance, invalidity, illegality, voidness or other
unenforceability of, the Guaranteed Obligations;
(b) (i) any failure to obtain, (ii) any release, composition or
settlement of, (iii) any amendment or modification of any of the terms and
provisions of, (iv) any subordination of, or (v) any discharge, disallowance,
invalidity, illegality, voidness or other unenforceability of, any other
guaranties of the Guaranteed Obligations;
(c) (i) any failure to obtain or any release of, (ii) any failure to
protect or preserve, (iii) any release, compromise, settlement or extension of
the time of payment of any obligations constituting, (iv) any failure to perfect
or maintain the perfection or priority of any Lien upon, (v) any subordination
of any Lien upon, or (vi) any discharge, disallowance, invalidity, illegality,
voidness or other unenforceability of any Lien or intended Lien upon, any
collateral now or hereafter securing the Guaranteed Obligations or any other
guaranties thereof;
(d) any termination of or change in any relationship between any
Guarantor and any other Loan Party including any such termination or change
resulting from a change in the ownership of any Guarantor or any other Loan
Party or from the cessation of any commercial relationship between any Guarantor
and any other Loan Party;
(e) any exercise of, or any election not to exercise or failure to
exercise, delay in the exercise of, waiver of, or forbearance or other
indulgence with respect to, any right, remedy or power available to the
Guaranteed Parties, including (i) any election not to exercise or failure to
exercise any right of setoff, recoupment or counterclaim, (ii) any election of
remedies effected by the Guaranteed Parties, including the foreclosure upon any
real estate constituting election of remedies effected by the Guaranteed
Parties, including the foreclosure upon any real estate constituting collateral,
whether or not such election affects the right to obtain a deficiency judgment,
and (iii) any election by the Guaranteed Parties in any proceeding under the
Bankruptcy Code of the application of Section 1111(b)(2) of such Bankruptcy
Code; and
(f) ANY OTHER ACT OR FAILURE TO ACT OR ANY OTHER EVENT OR
CIRCUMSTANCE THAT (i) VARIES THE RISK OF ANY GUARANTOR HEREUNDER OR (ii) BUT FOR
THE PROVISIONS HEREOF, WOULD, AS A MATTER OF STATUTE OR RULE OF LAW OR EQUITY,
OPERATE TO REDUCE, LIMIT OR TERMINATE THE
31
OBLIGATIONS OF ANY GUARANTOR HEREUNDER OR DISCHARGE ANY GUARANTOR FROM ANY
THEREOF.
Section 8.06 Certain Waivers. Each of the Guarantors waives:
---------------
(a) any requirement, and any right to require, that any right or
power be exercised or any action be taken against either Borrower or any
collateral for the Guaranteed Obligations;
(b) all defenses to, and all setoffs, counterclaims and claims of
recoupment against, the Guaranteed Obligations that may at any time be available
to any other Guarantor (and agrees that payments due from such Guarantor
hereunder shall be made without any reduction or deduction whatsoever, including
any reduction or deduction for any setoff, counterclaim or claim of recoupment
otherwise available to such Guarantor or to either Borrower);
(c) (i) notice of acceptance of and intention to rely hereunder,
(ii) notice of the making or renewal of any Loans or other extensions of credit
hereunder and of the incurrence or renewal of any other Guaranteed Obligations,
(iii) notice of any of the matters referred to in Section 8.05 and (iv) all
other notices that may be required by Applicable Law or otherwise to preserve
any rights against any Guarantor hereunder, including any notice of default,
demand, dishonor, presentment and protest;
(d) diligence;
(e) any defense based upon, arising out of or in any way related to
(i) any claim that any sale or other disposition of any collateral for the
Guaranteed Obligations was not conducted in a commercially reasonable fashion or
that a public sale, should the Guaranteed Parties have elected so to proceed,
was, in and of itself, not a commercially reasonable method of sale, (ii) any
claim that any election of remedies by the Guaranteed Parties, including the
exercise by the Guaranteed Parties of any rights against any collateral,
impaired, reduced, released or otherwise extinguished any right that any
Guarantor might otherwise have had against either Borrower or against any
collateral, including any right of subrogation, exoneration, reimbursement or
contribution or right to obtain a deficiency judgment, (iii) any claim based
upon, arising out of or in any way related to any of the matters referred to in
Section 8.06 and (iv) any claim that the Loan Documents should be strictly
construed against the Guaranteed Parties; and
(f) ALL OTHER DEFENSES UNDER ANY APPLICABLE LAW THAT WOULD, BUT FOR
THIS CLAUSE (f), BE AVAILABLE TO ANY GUARANTOR AS A DEFENSE AGAINST OR A
REDUCTION OR LIMITATION OF ITS LIABILITIES AND OBLIGATIONS HEREUNDER.
Section 8.07 Subordination of Rights Against the Borrower and Collateral.
-----------------------------------------------------------
All rights that any Guarantor may at any time have against either Borrower or
any collateral for the Guaranteed Obligations (including rights of subrogation,
exoneration, reimbursement and contribution and whether arising under Applicable
Law or otherwise), and all obligations that
32
either Borrower may at any time have to any Guarantor, arising by virtue of such
Guarantor's obligations to pay principal, interest or other amounts payable to
Guaranteed Parties hereunder, any payment made pursuant thereto or the exercise
by the Guaranteed Parties of their rights with respect to any collateral are
hereby expressly subordinated to the prior payment, observance and performance
in full of the Guaranteed Obligations. No Guarantor shall enforce any of the
rights, or attempt to obtain payment or performance of any of the obligations,
subordinated pursuant to this Section 8.07 until the Guaranteed Obligations have
been paid, observed and performed in full, except that such prohibition shall
not apply to routine acts, such as the giving of notices and the filing of
continuation statements, necessary to preserve any such rights. If any amount
shall be paid to or recovered by any Guarantor (whether directly or by way of
setoff, recoupment or counterclaim) on account of any right or obligation
subordinated pursuant to this Section 8.07, such amount shall be held by such
Guarantor for the benefit of the Guaranteed Parties.
ARTICLE 9
THE AGENTS
----------
Section 9.01 Appointment and Powers. Each Bank hereby irrevocably
----------------------
appoints and authorizes The Bank of New York, and The Bank of New York hereby
agrees, to act as the Administrative Agent for such Bank under the Loan
Documents with such powers as are delegated to the Administrative Agent and the
Secured Party by the terms thereof, together with such other powers as are
reasonably incidental thereto. The Administrative Agent's duties shall be purely
ministerial and it shall have no duties or responsibilities except those
expressly set forth in the Loan Documents. The Administrative Agent shall not be
required under any circumstances to take any action that, in its judgment, (a)
is contrary to any provision of the Loan Documents or Applicable Law or (b)
would expose it to any Liability or expense against which it has not been
indemnified to its satisfaction. The Administrative Agent shall not, by reason
of its serving as the Administrative Agent, be a trustee or other fiduciary for
any Bank. NationsBank, N.A., as Documentation Agent, shall have no rights or
duties under, and no liability arising out of, the Loan Documents in its
capacity as Documentation Agent.
Section 9.02 Limitation on Administrative Agent's Liability. 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 under or in connection with the Loan Documents, except for its or their
own gross negligence or willful misconduct. The Administrative Agent shall not
be responsible to any Bank for (a) any recitals, statements, representations or
warranties contained in the Loan Documents or in any certificate or other
document referred to or provided for in, or received by any of the Banks under,
the Loan Documents, (b) the validity, effectiveness or enforceability of the
Loan Documents or any such certificate or other document or the value or
sufficiency of the Collateral or (c) any failure by the Loan Parties to perform
any of their obligations under the Loan Documents. The Administrative Agent may
employ agents and attorneys-in-fact and shall not be responsible for the
negligence or misconduct of any such agents or attorneys-in-fact so long as the
Administrative Agent was not grossly negligent in selecting or directing such
agents or attorneys-in-fact. The Administrative Agent shall be entitled to rely
upon any certification, notice or other communication (including any thereof by
telephone, telex, telecopier, telegram or cable) believed by it to be genuine
and
33
correct and to have been signed or given 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 the Loan Documents, the Administrative
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under the Loan Documents in accordance with instructions signed by the
Required Banks, and such instructions of the Required Banks and any action taken
or failure to act pursuant thereto shall be binding on all of the Banks.
Section 9.03 Defaults. The Administrative Agent shall not be deemed to
--------
have knowledge of the occurrence of a Default (other than the non-payment to it
of principal of or interest on Loans or fees) unless the Administrative Agent
has received notice from a Bank or a Borrower specifying such Default and
stating that such notice is a "Notice of Default". In the event that the
Administrative Agent has knowledge of such a non-payment or receives such a
notice of the occurrence of a Default, the Administrative Agent shall give
prompt notice thereof to the Banks. In the event of any Default, the
Administrative Agent shall (a) in the case of a Default that constitutes an
Event of Default, take either or both of the actions referred to in clauses (a)
and (b) of the first sentence of Section 6.02 if so directed by the Required
Banks and (b) in the case of any Default, take such other action with respect to
such Default as shall be reasonably directed by the Required Banks. Unless and
until the Administrative Agent shall have received such directions, in the event
of any Default, the Administrative Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default as it shall deem advisable in the best interests of the Banks.
Section 9.04 Rights as a Bank. Each Person acting as the Administrative
----------------
Agent that is also a Bank shall, in its capacity as a Bank, have the same rights
and powers under the Loan Documents as any other Bank and may exercise the same
as though it were not acting as the Administrative Agent, and the term "Bank" or
"Banks" shall include such Person in its individual capacity. Each Person acting
as the Administrative Agent (whether or not such Person is a Bank) and its
Affiliates may (without having to account therefor to any Bank) accept deposits
from, lend money to and generally engage in any kind of banking, trust or other
business with the Loan Parties and their Affiliates as if it were not acting as
the Administrative Agent, and such Person and its Affiliates may accept fees and
other consideration from the Loan Parties and their Affiliates for services in
connection with the Loan Documents or otherwise without having to account for
the same to the Banks.
Section 9.05 Indemnification. The Banks agree to indemnify the
---------------
Administrative Agent (to the extent not reimbursed by the Loan Parties under the
Loan Documents), ratably on the basis of the respective principal amounts of the
Loans outstanding made by the Banks (or, if no Loans are at the time
outstanding, ratably on the basis of their respective Commitments), for any and
all Liabilities, 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 (including the
costs and expenses that the Loan Parties are obligated to pay under the Loan
Documents) in any way relating to or arising out of the Loan Documents or any
other documents contemplated thereby or referred to therein or the transactions
contemplated thereby or the enforcement of any of the terms thereof or of any
such other documents, provided that no Bank shall be liable for any of the
foregoing to the extent (a)
34
they are subject to the indemnity contemplated by the last sentence of Section
10.10(b) or (b) they arise from gross negligence or willful misconduct by the
Administrative Agent.
Section 9.06 Non-Reliance on Administrative Agent and Other Banks. Each
----------------------------------------------------
Bank agrees that it has made and will continue to make, independently and
without reliance on the Administrative Agent or any other Bank, and based on
such documents and information as it deems appropriate, its own credit analysis
of the Loan Parties and its own decision to enter into the Loan Documents and to
take or refrain from taking any action in connection therewith. The
Administrative Agent shall not be required to keep itself informed as to the
performance or observance by the Loan Parties of the Loan Documents or any other
document referred to or provided for therein or to inspect the properties or
books of any Loan Party or any Subsidiary thereof. Except for notices, reports
and other documents and information expressly required to be furnished to the
Banks by the Administrative Agent under the Loan Documents, the Administrative
Agent shall have no obligation to provide any Bank with any information
concerning the business, status or condition of any Loan Party or any Subsidiary
thereof or the Loan Documents that may come into the possession of the
Administrative Agent or any of its Affiliates.
Section 9.07 Resignation of the Administrative Agent. The Administrative
---------------------------------------
Agent may at any time give notice of its resignation to the Banks and the
Borrowers. Upon receipt of any such notice of resignation, the Required Banks
may, with the consent of the Company (which consent shall not be unreasonably
withheld), appoint a successor Administrative Agent. If no successor
Administrative Agent shall have been so appointed by the Required Banks and
shall have accepted such appointment within 30 days after the retiring
Administrative Agent's giving of notice of resignation, then the retiring
Administrative Agent may, on behalf of the Banks and with the consent of the
Company (which consent shall not be unreasonably withheld), appoint a successor
Administrative Agent. Upon the acceptance by any Person of its appointment as a
successor Administrative Agent, such Person shall thereupon succeed to and
become vested with all the rights, powers, privileges, duties and obligations of
the retiring Administrative Agent and the retiring Administrative Agent shall be
discharged from its duties and obligations as Administrative Agent under the
Loan Documents. After any retiring Administrative Agent's resignation as
Administrative Agent, the provisions of this Article 9 shall continue in effect
for its benefit in respect of any actions taken or omitted to be taken by it
while it was acting as the Administrative Agent.
Section 9.08 Execution and Amendment of Loan Documents on Behalf of the
----------------------------------------------------------
Banks. Each Bank hereby authorizes the Administrative Agent to (a) execute and
-----
deliver, in the name of and on behalf of such Bank, (i) the Security Agreements
and the UK Security Agreements, (ii) all UCC financing and continuation
statements and other documents the filing or recordation of which are, in the
determination of the Administrative Agent, necessary or appropriate to create,
perfect or maintain the existence or perfected status of the Security Interest
and (iii) any other Loan Document requiring execution by or on behalf of such
Bank, and (b) release Collateral from the Security Interest to the extent that
such Collateral has been disposed of in accordance with Section 4.09. The
Administrative Agent shall consent to any amendment of any term, covenant,
agreement or condition of the Security Agreements and the UK Security
Agreements, or to any waiver of any right thereunder, if, but only if, the
Administrative Agent is directed to do so in writing by the Required Banks;
provided, however, that (i) the Administrative Agent
-------- -------
35
shall not be required to consent to any such amendment or waiver that affects
its rights or duties and (ii) the Administrative Agent shall not, unless
directed to do so in writing by each Bank, (A) consent to any assignment by any
Loan Party of any of its rights or obligations under any such agreement or (B)
release any Collateral from the Security Interest, except as specified in clause
(b) above.
ARTICLE 10
MISCELLANEOUS
-------------
Section 10.01 Notices and Deliveries. Except as otherwise expressly
----------------------
provided, all notices, communications and materials to be given or delivered
pursuant to the Loan Documents shall be given or delivered in writing (which
shall include telecopy transmissions) at the following respective addresses and
telecopier numbers and to the attention of the following individuals or
departments or at such other address or telecopier or telephone number or to the
attention of such other individual or department as the party to which such
information pertains may hereafter specify:
(a) if to the Company, to it at:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Executive Vice President and Chief Financial Officer
with a copy to:
Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
(b) if to any other Loan Party, to it at:
c/o Xpedite Systems, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
36
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Executive Vice President and Chief Financial Officer
with a copy to:
Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.:(▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
(c) if to the Administrative Agent, to it at:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.:(▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
with a copy to:
The Bank of New York
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.:(▇▇▇) ▇▇▇-▇▇▇▇ (6,7)
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, AFA, 18th Floor
(d) if to any Bank, to it at the address or telecopier number and to
the attention of the individual or department, set forth below such Bank's name
under the heading "Notice Address" on Annex A or, in the case of a Bank that
-------
becomes a Bank pursuant to an assignment, set forth under the heading "Notice
Address" in the Notice of Assignment given to the Borrowers and the
Administrative Agent with respect to such assignment.
Notices, communications and materials shall be deemed given or delivered
when delivered or received at the appropriate address or telecopy number to the
attention of the
37
appropriate individual or department except that notices to be given or items of
Collateral to be delivered to the Administrative Agent or any Bank pursuant to
Sections 1.02, 1.03(c), 1.05, 1.07 and 1.12(b) or pursuant to any Collateral
Document shall not be deemed given or delivered until received by the officer of
the Administrative Agent or, in the case of such notices, such Bank responsible,
at the time, for the administration of the Loan Documents.
Section 10.02 Expenses; Indemnification. Whether or not any Loans are made
-------------------------
hereunder, the Company shall:
(a) pay or reimburse the Administrative Agent and each Bank for all
transfer, documentary, stamp and similar taxes, and all recording and filing
fees and taxes, payable in connection with, arising out of, or in any way
related to, the execution, delivery and performance of the Loan Documents or the
making of the Loans;
(b) pay or reimburse the Administrative Agent for all reasonable
costs and expenses (including reasonable fees and disbursements of legal
counsel, appraisers, accountants and other experts employed or retained by the
Administrative Agent) incurred by the Administrative Agent in connection with,
arising out of, or in any way related to (i) the negotiation, preparation,
execution and delivery of (A) the Loan Documents and (B) whether or not
executed, any waiver, amendment or consent thereunder or thereto, (ii) the
administration of and any operations under the Loan Documents, including (A) the
protection or preservation of the Collateral, (B) the protection, preservation,
exercise or enforcement of any of the rights of the Administrative Agent or the
Banks in, under or related to the Collateral or the Loan Documents or (C) the
performance of any of the obligations of the Administrative Agent or the Banks
under or related to the Loan Documents, (iii) protecting or preserving the
Collateral or (iv) protecting, preserving, exercising or enforcing any of the
rights of the Administrative Agent or the Banks in, under or related to the
Collateral or the Loan Documents, including defending the Security Interest as a
valid, perfected, first priority security interest in the Collateral subject to
Permitted Liens;
(c) pay or reimburse each of the Banks for all reasonable costs and
expenses (including reasonable fees and disbursements of legal counsel and other
experts employed or retained by such Bank) incurred by such Bank after the
occurrence of an Event of Default in connection with, arising out of, or in any
way related to protecting, preserving, exercising or enforcing any of its rights
in, under or related to the Collateral or the Loan Documents; and
(d) indemnify and hold each Indemnified Person harmless from and
against all losses (including judgments, penalties and fines) suffered, and pay
or reimburse each Indemnified Person for all reasonable costs and expenses
(including reasonable fees and disbursements of legal counsel and other experts
employed or retained by such Indemnified Person) incurred, by such Indemnified
Person in connection with, arising out of, or in any way related to (i) any Loan
Document Related Claim (whether asserted by such Indemnified Person, a Borrower,
any Guarantor or any other Person), including the prosecution or defense thereof
and any litigation or proceeding with respect thereto (whether or not, in the
case of any such litigation or proceeding, such Indemnified Person is a party
thereto), or (ii) any investigation, governmental or otherwise, arising out of,
related to, or in any way connected with, the Loan Documents or the
relationships established thereunder, except that the foregoing indemnity shall
38
not be applicable to any loss suffered by any Indemnified Person to the extent
such loss is determined by a judgment of a court that is binding on the
applicable Borrower and such Indemnified Person, to be the result of acts or
omissions on the part of such Indemnified Person constituting (x) gross
negligence or (y) willful misconduct.
Section 10.03 Amounts Payable Due Upon Request for Payment. All amounts
--------------------------------------------
payable by the Borrowers under Section 10.02 and under the other provisions of
the Loan Documents shall, except as otherwise expressly provided, be due within
five Business Days following written request for the payment thereof.
Section 10.04 Remedies of the Essence. The various rights and remedies of
-----------------------
the Administrative Agent and the Banks under the Loan Documents are of the
essence of those agreements.
Section 10.05 Rights Cumulative. Each of the rights and remedies of the
-----------------
Administrative Agent, and the Banks under the Loan Documents shall be in
addition to all of their other rights and remedies under the Loan Documents and
Applicable Law, and nothing in the Loan Documents shall be construed as limiting
any such rights or remedies.
Section 10.06 Confidentiality and Disclosures. The Administrative Agent
-------------------------------
and each Bank agrees to take normal and reasonable precautions and exercise due
care to maintain the confidentiality of all non-public information provided to
it by the Borrowers or any Guarantor in connection with any Loan Document,
provided that the Administrative Agent and the Banks may disclose to, and
--------
exchange and discuss with, any other Person who has agreed (to the extent that
obtaining such agreement is reasonably practicable) to be bound by the
provisions of this Section 10.06 (the Administrative Agent, the Banks and each
such other Person being hereby authorized to do so) any information concerning
the Company or any Subsidiary (whether received by the Administrative Agent, the
Banks or such other Person in connection with or pursuant to the Loan Documents
or otherwise) (a) if such Person is an Affiliate of the Administrative Agent or
such Bank or (b) for the purpose of (i) complying with Applicable Law, (ii)
protecting or preserving the Collateral or protecting, preserving, exercising or
enforcing any of their rights in, under or related to the Collateral or the Loan
Documents, (iii) performing any of their obligations under or related to the
Loan Documents or (iv) consulting with respect to any of the foregoing matters.
Section 10.07 Amendments; Waivers. Any term, covenant, agreement or
-------------------
condition of the Loan Documents may be amended, and any right under the Loan
Documents may be waived, if, but only if, such amendment or waiver is in writing
and is signed by (a) in the case of an amendment or waiver with respect to the
Loan Documents referred to in Section 9.08(a), the Administrative Agent, (b) in
the case of an amendment or waiver with respect to any other Loan Document, the
Required Banks and, if the rights and duties of the Administrative Agent are
affected thereby, by the Administrative Agent and (c) in the case of an
amendment with respect to any Loan Document, by the Borrowers and, if such
amendment amends Article 8 hereof, the Guarantors; provided, however, that no
-------- -------
amendment or waiver shall be effective, unless in writing and signed by each
Bank affected thereby, to the extent it (i) changes the amount of such Bank's
Commitment, (ii) reduces the principal of or the rate of interest on such Bank's
Loans or Notes or any fees payable to such Bank hereunder, (iii) postpones any
date fixed for any payment of principal of or interest on such Bank's Loans,
Notes or any fees payable to such Bank hereunder,
39
(iv) releases any Collateral from the Security Interest except to the extent
that such Collateral has been disposed of in accordance with Section 4.09, or
(v) amends Section 1.14, this Section 10.07, the definition of "Required Banks"
contained in Section 11.01 or any other provision of this Agreement requiring
the consent or other action of all of the Banks. Unless otherwise specified in
such waiver, a waiver of any right under the Loan Documents shall be effective
only in the specific instance and for the specific purpose for which given. No
election not to exercise, failure to exercise or delay in exercising any right,
nor any course of dealing or performance, shall operate as a waiver of any right
of the Administrative Agent or any Bank under the Loan Documents or Applicable
Law, nor shall any single or partial exercise of any such right preclude any
other or further exercise thereof or the exercise of any other right of the
Administrative Agent or any Bank under the Loan Documents or Applicable Law.
Section 10.08 Set-Off; Suspension of Payment and Performance. The
----------------------------------------------
Administrative Agent and each Bank are hereby authorized by the Borrowers, at
any time and from time to time, without notice, during any Event of Default
under Section 6.01(a) or at any time after amounts payable hereunder shall have
been declared immediately due and payable pursuant to Section 6.02, to set off
against, and to appropriate and apply to the payment of, the Liabilities of any
Loan Party under the Loan Documents (whether owing to such Person or to any
other Person that is the Administrative Agent or a Bank and whether matured or
unmatured, fixed or contingent) any and all Liabilities owing by such Person or
any of its Affiliates to any Loan Party (whether payable in Dollars, Sterling or
any other currency, whether matured or unmatured and, in the case of Liabilities
that are deposits, whether general or special, time or demand and however
evidenced and whether maintained at a branch or office located within or without
the United States).
Section 10.09 Sharing of Recoveries. Each Bank agrees that, if, for any
---------------------
reason, including as a result of (i) the exercise of any right of counterclaim,
set-off, banker's lien or similar right, (ii) its claim in any applicable
bankruptcy, insolvency or other similar law being deemed secured by a "debt"
under Section 101(11) of the Bankruptcy Code owed by it to any Loan Party,
including a claim deemed secured under Section 506 of the Bankruptcy Code, or
(iii) the allocation of payments by the Administrative Agent or any Loan Party
in a manner contrary to the provisions of Section 1.14, such Bank shall receive
payment of a proportion of the aggregate amount due and payable to it hereunder
as principal of or interest on the Loans or fees that is greater than the
proportion received by any other Bank in respect of the aggregate of such
amounts due and payable to such other Bank hereunder, then the Bank receiving
such proportionately greater payment shall purchase participations (which it
shall be deemed to have done simultaneously upon the receipt of such payment) in
the rights of the other Banks hereunder so that all such recoveries with respect
to such amounts due and payable hereunder (net of costs of collection) shall be
pro rata; provided that if all or part of such proportionately greater payment
received by the purchasing Bank is thereafter recovered by or on behalf of any
Loan Party from such Bank, such purchases shall be rescinded and the purchase
prices paid for such participations shall be returned to such Bank to the extent
of such recovery, but without interest (unless the purchasing Bank is required
to pay interest on the amount recovered to the Person recovering such amount, in
which case the selling Bank shall be required to pay interest at a like rate).
Each of the Borrowers and the Guarantors expressly consents to the foregoing
arrangements and agrees that any holder of a participation in any rights
hereunder so purchased or acquired pursuant to this Section 10.09 shall, with
respect to such participation, be entitled to
40
all of the rights of a Bank under Sections 7.02, 10.02 and 10.08 (subject to any
condition imposed on a Bank hereunder with respect thereto) and may exercise any
and all rights of set-off with respect to such participation as fully as though
the Loan Parties were directly indebted to the holder of such participation for
Loans in the amount of such participation.
Section 10.10 Assignments and Participations. (a) Assignments. (i) None of
------------------------------ -----------
the Loan Parties may assign any of its rights or obligations under the Loan
Documents without the prior written consent of each Bank, and no assignment of
any such obligation shall release such Loan Party therefrom unless each Bank
shall have consented to such release in a writing specifically referring to the
obligation from which such Loan Party is to be released.
(ii) Each Bank may from time to time assign any or all of its rights
and obligations under the Loan Documents to one or more Persons, provided that,
--------
except in the case of the grant of a security interest to a Federal Reserve Bank
(which may be made without condition or restriction) no such assignment shall be
effective unless (A) the assignment is consented to by the Borrowers (unless an
Event of Default exists at such time or such assignment is to an Affiliate of
such Bank) and the Administrative Agent, (B) a Notice of Assignment with respect
to the assignment, duly executed by the assignor and the assignee, shall have
been given to the Borrowers and the Administrative Agent and (C) except in the
case of an assignment by the Bank that is the Administrative Agent, the
Administrative Agent shall have been paid an assignment fee of $3,500. Upon any
effective assignment, (1) the assignor shall be released from the obligations so
assigned and, in the case of an assignment of all of its Loans and Commitment,
shall cease to be a Bank and (2) the assignee shall have all of the rights and
shall be obligated to perform all of the obligations of a Bank; provided,
--------
however, that no assignee shall be entitled to any amounts that would otherwise
-------
be payable to it with respect to its assignment under Section 1.13 or 7.02
unless (x) such amounts are payable in respect of a Regulatory Change Enacted
after the date the applicable assignment agreement became effective or (y) such
amounts would have been payable to the Bank that made such assignment if such
assignment had not been made. In the event of any effective assignment by a
Bank, each of the Borrowers shall, against (except in the case of a partial
assignment) receipt of the existing Note of the assignor Bank, issue a new Note
to the assignee Bank.
(b) Participations. Each Bank may from time to time sell or otherwise
--------------
grant participations in any or all of its rights and obligations under the Loan
Documents without the consent of the Borrowers, any Guarantor, the
Administrative Agent or any other Bank. In the event of any such grant by a Bank
of a participation, such Bank's obligations under the Loan Documents to the
other parties thereto shall remain unchanged, such Bank shall remain solely
responsible for the performance thereof, and the Loan Parties, the
Administrative Agent and the other Banks may continue to deal solely and
directly with such Bank in connection with such Bank's rights and obligations
thereunder. Each holder of a participation in any rights under the Loan
Documents, except to the extent the applicable participation agreement provides
to the contrary, shall, with respect to such participation, be entitled to all
of the rights of a Bank as fully as though it were a Bank under Sections 1.13,
7.02, 7.03, 10.02(d) and 10.07 (subject to any conditions imposed on a Bank
hereunder with respect thereto, including delivery of the forms and certificates
required under Section 1.13(a)(iii)) and may exercise any rights of set-off with
respect to such participation as fully as though the Loan Parties were directly
indebted to the holder of such participation for Loans in the amount of such
participation; provided, however,
-------- -------
41
that no holder of a participation shall be entitled to any amounts that would
otherwise be payable to it with respect to its participation under Section 1.13
or 7.02 unless such amounts would have been payable to the Bank that granted
such participation if such participation had not been granted. In connection
with the sale of any participation hereunder, each participant (i) shall
represent to the granting Bank for the benefit of the Administrative Agent and
the Borrowers that under Applicable Law and treaties no Taxes (other than Bank
Taxes) will be required to be withheld by the Administrative Agent or any
Borrower with respect to any payments to be made with respect to such
participant under this Agreement, (ii) shall furnish to the granting Bank (which
Bank shall promptly forward to the Borrowers and the Administrative Agent) all
of the forms and statements required by Section 1.13(a)(iii), and (iii) shall
covenant to comply with all of the requirements of Section 1.13(a)(iii),
provided that any required forms and statements shall be provided to the
granting Bank, which Bank shall promptly forward such required forms and
statements to the Administrative Agent and the Borrowers. Notwithstanding the
above, in the event any Taxes are required to be withheld or deducted by any
taxing authority from any payment made to any participant, the Bank that grants
such participation shall (A) withhold or deduct from each payment to the
participant the amount of any Tax required under applicable law to be withheld
or deducted from such payment, and (B) pay any Tax so withheld or deducted by it
to the appropriate taxing authority in accordance with Applicable Law. Each
Bank selling or granting a participation shall indemnify the Loan Parties and
the Administrative Agent for any Taxes (including without limitation, any
interest, penalties, additions to tax and additional amounts incurred in
connection therewith) and Liabilities that they may sustain as a result of such
Bank's failure to withhold and pay any Taxes applicable to payments by such Bank
to its participant in respect of such participation.
Section 10.11 Governing Law. The rights and duties of the Borrowers, the
-------------
Guarantors, the Administrative Agent and the Banks under this Agreement and the
Notes shall, pursuant to New York General Obligations Law, Section 5-1401, be
governed by the law of the State of New York.
Section 10.12 Judicial Proceedings; Waiver of Jury Trial. Any judicial
------------------------------------------
proceeding brought against a Borrower or any Guarantor with respect to any Loan
Document Related Claim may be brought in any court of competent jurisdiction in
the City of New York, and, by execution and delivery of this Agreement, each of
the Borrowers and the Guarantors (a) accepts, generally and unconditionally, the
nonexclusive jurisdiction of such courts and any related appellate court and
irrevocably agrees to be bound by any judgment rendered thereby in connection
with any Loan Document Related Claim and (b) irrevocably waives any objection it
may now or hereafter have as to the venue of any such proceeding brought in such
a court or that such a court is an inconvenient forum. Each of the Borrowers and
the Guarantors hereby waives personal service of process and consents that
service of process upon it may be made by certified or registered mail, return
receipt requested, at its address specified or determined in accordance with the
provisions of Section 10.01, and service so made shall be deemed completed on
the third Business Day after such service is deposited in the mail so long as
such service is also delivered to the Company by overnight courier. Nothing
herein shall affect the right of any Administrative Agent, any Bank or any other
Indemnified Person to serve process in any other manner permitted by law or
shall limit the right of any Administrative Agent, any Bank or any other
Indemnified Person to bring proceedings against a Borrower or any Guarantor in
the courts of any other jurisdiction. To the extent permitted in accordance with
Applicable Law relating to
42
jurisdiction and venue, any judicial proceeding by a Borrower or any Guarantor
against the Administrative Agent or any Bank involving any Loan Document Related
Claim shall be brought only in a court located in the City and State of New
York. THE BORROWERS, THE GUARANTORS, THE ADMINISTRATIVE AGENT AND EACH BANK
HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING ANY LOAN
DOCUMENT RELATED CLAIM.
Section 10.13 Reference Bank. The Reference Bank shall furnish to the
--------------
Administrative Agent timely information for the purpose of determining the
applicable Eurocurrency Rate. If the Reference Bank shall notify the
Administrative Agent that thenceforth it shall not be able to furnish such
information in a timely manner or shall assign all of its Loans or Commitment to
a Person that is not an Affiliate of the Reference Bank, the Administrative
Agent shall, with the consent of the Required Banks and the Company, appoint
another Bank as the Reference Bank in place of such Reference Bank.
Section 10.14 Severability of Provisions. Any provision of the Loan
--------------------------
Documents that is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions thereof or
affecting the validity or enforceability of such provision in any other
jurisdiction. To the extent permitted by Applicable Law, each of the Borrowers
and the Guarantors hereby waives any provision of Applicable Law that renders
any provision of the Loan Documents prohibited or unenforceable in any respect.
Section 10.15 Counterparts. This Agreement may be signed in any number of
-------------
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto were upon the same instrument.
Section 10.16 Survival of Obligations. Except as otherwise expressly
-----------------------
provided therein, the rights and obligations of the Borrowers, the Guarantors,
the Administrative Agent, the Banks and the other Indemnified Persons under the
Loan Documents shall survive the Repayment Date and the termination of the
Security Interest.
Section 10.17 Entire Agreement. This Agreement, the Notes and the other
----------------
Loan Documents embody the entire agreement among the Borrowers, the Guarantors,
the Administrative Agent and the Banks relating to the subject matter hereof and
supersede all prior agreements, representations and understandings, if any,
relating to the subject matter hereof.
Section 10.18 Successors and Assigns. All of the provisions of this
----------------------
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.
Section 10.19 No Fiduciary Relationship Established by Loan Documents.
-------------------------------------------------------
The relationship between each Borrower and the Banks is that of debtor and
creditor. The Loan Documents are not intended to, and do not, establish a
fiduciary relationship, nor does a fiduciary relationship otherwise exist,
between the Loan Parties, on the one hand, and the Administrative Agent and the
Banks, on the other hand. The parties hereto have acted at arm's-length in
negotiating the Loan Documents.
43
Section 10.20 Judgment Currency. If in connection with determining the
-----------------
amount of a judgment to be rendered in a currency (a "Judgment Currency") other
-----------------
than the currency in which the relevant amount was due under this Agreement or a
Note, it is necessary to convert a sum payable by a Borrower or any other Loan
Party under this Agreement, the Notes or any other Loan Document in a currency
other than such Judgment Currency into such Judgment Currency, then, unless
another rate of exchange is required under Applicable Law, the rate of exchange
used shall be the Administrative Agent's spot rate of exchange in New York City
on the Business Day preceding the day on which final judgment is to be rendered.
The obligations of the applicable Loan Party in respect of any such sum payable
by it under the Loan Documents in a currency other than such Judgment Currency
shall, notwithstanding any such judgment in such Judgment Currency, be
discharged only to the extent that on the Business Day following actual receipt
by the Administrative Agent or Banks of the amount of the judgment in such
Judgment Currency, such Person is able to purchase the relevant currency in New
York City with such sum of Judgment Currency, whether or not at the
Administrative Agent's spot rate of exchange. As a separate obligation and
notwithstanding any such judgment, the applicable Loan Party shall pay such
Person on demand in the relevant currency any difference between the amount
originally payable by such Loan Party to such Person in the relevant currency
and the amount of the relevant currency that may be so purchased. In the event
that the amount that may be so purchased exceeds the amount originally payable,
such Person shall promptly remit such excess to the applicable Loan Party.
Section 10.21 Worldwide UK Security Agreement. Notwithstanding anything
-------------------------------
to the contrary in the Worldwide UK Security Agreement, the Administrative Agent
and the Banks hereby agree that no more than 65% (or such other percentage as is
the maximum amount that can be subjected to the Security Interest without, in
the reasonable opinion of the Company, resulting in any adverse tax consequence
to the Company) of the shares of capital stock of Xpedite UK pledged by
Worldwide pursuant thereto shall secure the liabilities of the Company or any
Subsidiary that is a United States Person under the Loan Documents.
ARTICLE 11
INTERPRETATION
--------------
Section 11.01 Defined Terms. For the purposes of this Agreement:
-------------
"Accumulated Funding Deficiency" has the meaning ascribed to that term in
------------------------------
Section 302 of ERISA.
"Acquisition Documents" means the XSL Acquisition Documents and the XSG
---------------------
Acquisition Documents.
"Acquisitions" means the XSL Acquisition and the XSG Acquisition.
------------
"Additional Sterling Cost" means, with respect to Eurocurrency Rate Loans
------------------------
made to Xpedite UK, for any Interest Period, the rate per annum for such
Interest Period determined in accordance with Schedule 11.01(c).
-----------------
44
"Administrative Agent" means The Bank of New York, as Administrative Agent
--------------------
for the Banks under the Loan Documents, and any successor Administrative Agent
appointed pursuant to Section 9.07.
"Administrative Agent's Office" means the address of the Administrative
-----------------------------
Agent specified in or determined in accordance with the provisions of Section
10.01.
"Affiliate" means, with respect to a Person, any other Person that,
---------
directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such first Person; unless
otherwise specified, "Affiliate" means an Affiliate of the Company.
"Agents' Fee Letters" means the letter agreements each dated December 5,
-------------------
1997 between the Company and The Bank of New York and BNY Capital Markets, Inc.,
and NationsBank, N.A. and NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities, Inc., respectively.
"Agreement" means this Credit Agreement, including all schedules, annexes
---------
and exhibits hereto.
"Agreement Date" means the date set forth as such on the signature pages
--------------
hereof, which date is the date the executed copies of this Agreement were
delivered by all parties hereto and, accordingly, this Agreement became
effective and the Banks first became committed to make the Loans and other
extensions of credit contemplated by this Agreement. If no such date is there
set forth, the Agreement Date shall be the date as of which this Agreement is
dated.
"Applicable Law" means, anything in Section 10.11 to the contrary
--------------
notwithstanding, (a) all applicable common law and principles of equity and (b)
all applicable provisions of all (i) constitutions, statutes, rules, regulations
and orders of governmental bodies, (ii) Governmental Approvals and Governmental
Registrations and (iii) orders, decisions, judgments and decrees.
"Applicable Margin" means, at any time, subject to the following sentences
-----------------
of this definition, such percentage applicable to such Type of Loan as set forth
in the following table opposite the applicable Leverage Ratio at such time set
forth below:
Applicable Margin
------------------
Leverage Ratio Base Rate Loans Eurocurrency Rate Loans
-------------- --------------- -----------------------
x greater than
or equal to 2.50:1 0.375% 1.500%
x less than 2.50:1 0.125% 1.250%
Notwithstanding the foregoing, prior to the delivery of the financial statements
of the Company for the fiscal year ending December 31, 1997 pursuant to Section
5.01(b), the Applicable Margin shall be 0.375% for Base Rate Loans and 1.500%
for Eurocurrency Rate Loans. Subsequent to the delivery of such financial
statements, the Applicable Margin shall be determined on the basis of the most
recent financial statements delivered pursuant to Section 5.01. Any change in
the Applicable Margin as a result of a change in the Leverage Ratio shall be
effective as of the third
45
Business Day after the day on which financial statements that indicate such
change are delivered to the Administrative Agent pursuant to Section 5.01.
"Bank" means (a) any Person listed on the signature pages hereof following
----
the Administrative Agent and (b) any Person (other than the Borrower or any of
it's Affiliates) that has been assigned any or all of the rights or obligations
of a Bank pursuant to Section 10.10(a).
"Bank Tax" means any income (including net income), franchise, gains or
--------
profits Taxes (or similar Taxes imposed in lieu of such Taxes) that are imposed
by any taxing authority in any jurisdiction (including any political subdivision
thereof) in which the relevant Bank (or its Lending Office) or the
Administrative Agent (as the case may be) is organized, managed or controlled or
doing business or would not otherwise be subject to such Taxes but for a present
or former connection between such jurisdictions or the taxing authority imposing
such Taxes and the Bank or any Person affiliated with such Bank (including,
without limitation, a connection arising from such Bank or affiliated Person
being or having been a citizen or resident of such jurisdiction, or being or
having been, organized, present or engaged in a trade or business in such
jurisdiction, or having or having had a permanent establishment or fixed place
or business in such jurisdiction).
"Bankruptcy Code" means Title 11 of the United States Code.
---------------
"Base Financial Statements" means the most recent, audited, consolidated
-------------------------
balance sheet of the Company and the Consolidated Subsidiaries referred to in
Section 5.02(a)(i) and the related statements of income, retained earnings and,
as applicable, changes in financial position or cash flows for the fiscal year
ended with the date of such balance sheet.
"Base Rate" means, for any day, a rate per annum equal to the higher of (i)
---------
the Prime Rate in effect on such day and (ii) the sum of the Federal Funds Rate
in effect on such day plus 1/2%.
----
"Base Rate Loan" means any Loan the interest on which is, or is to be, as
--------------
the context may require, computed on the basis of the Base Rate.
"Benefit Plan" of any Person, means, at any time, any employee benefit plan
------------
(including a Multiemployer Benefit Plan), the funding requirements of which
(under Section 302 of ERISA or Section 412 of the Code) are, or at any time
within six years immediately preceding the time in question were, in whole or in
part, the responsibility of such Person.
"Borrower" has the meaning ascribed thereto in the preamble hereof.
--------
"Business Day" means any day other than a Saturday, Sunday or other day on
------------
which banks in New York City are authorized to close.
"Capital Security" means, with respect to any Person, (a) any share of
----------------
capital stock of such Person or (b) any security convertible into, or any
option, warrant or other right to acquire, any share of capital stock of such
Person.
"Code" means the Internal Revenue Code of 1986, as amended.
----
46
"Collateral" means all property in which a Lien is created pursuant to the
----------
Collateral Documents.
"Collateral Documents" means the Security Agreements, the UK Security
--------------------
Agreements and any other Loan Documents evidencing, governing or perfecting the
Security Interest.
"Commitment" of any Bank means (a) the amount set forth opposite such
----------
Bank's name under the heading "Commitment" on Annex A or, in the case of a Bank
that becomes a Bank pursuant to an assignment, the amount of the assignor's
Commitment assigned to such Bank, in either case, as the same may be reduced
from time to time pursuant to Section 1.07 or increased or reduced from time to
time pursuant to assignments in accordance with Section 10.10(a), or (b) as the
context may require, the obligation of such Bank to make Loans in an aggregate
unpaid principal amount not exceeding such amount.
"Commitment Termination Date" means the 364/th/ day following the Agreement
---------------------------
Date.
"Company" has the meaning ascribed thereto in the preamble hereof.
-------
"Consolidated EBITDA" means, for any period, the sum of (a) Consolidated
-------------------
Net Income for such period and (b) to the extent deducted in determining
Consolidated Net Income for such period, interest expense, income tax expense,
depreciation expense and amortization expense, in each case, for purposes of
determining the Leverage Ratio, with respect to any period preceding the
consummation of the Acquisitions, after giving pro forma effect (based on the
Pro Forma Financial Statements) to the Acquisitions.
"Consolidated Indebtedness" means, at any time, the consolidated
-------------------------
Indebtedness of the Company and the Consolidated Subsidiaries as of such time,
after giving pro forma effect (based on the Pro Forma Financial Statements) to
the incurrence of the Indebtedness contemplated to be incurred in connection
with the Acquisitions.
"Consolidated Net Income" means, for any period, the amount of consolidated
-----------------------
net income (or loss) of the Company and the Consolidated Subsidiaries for such
period (taken as a cumulative whole) provided that there shall be excluded: (a)
any net income (or net loss) of a Consolidated Subsidiary (i) for any period
during which it was not a Consolidated Subsidiary or (ii), in case of any such
net income, to the extent that the declaration or payment of dividends or
similar distributions by that Consolidated Subsidiary is not at the time
permitted by operation of the terms of any Contract or Applicable Law; (b) any
net income (or net loss) of any Person (other than a Consolidated Subsidiary) in
which the Company or any Consolidated Subsidiary has an ownership interest,
except to the extent that any such income has actually been received by the
Company or such Subsidiary in the form of cash dividends or similar
distributions or, in the case of any Person not less than 50% of the Capital
Securities or other ownership interests of which is owned by the Company or such
Subsidiary, to the extent that the Company or such Subsidiary has the
contractual right to cause such Person to pay or declare such dividends or other
distributions; (c) any restoration of any contingency reserve, except to the
extent that provision for such reserve was made out of income during such
period; (d) any net gains or losses on the sale or other disposition of
investments and other capital assets other than in the ordinary course of
business, provided that there shall also be excluded any related charges for
47
taxes thereon; (e) any net gains or losses resulting from the extinguishment or
defeasance of any Indebtedness; (f) any earnings from discontinued businesses;
(g) any extraordinary gains or losses; (h) any interest income; (i) all cash and
non-cash nonrecurring charges or gain related to an acquisition by the Company
and the Consolidated Subsidiaries for such period and recorded on the Company's
consolidated statements of operations; and (j) all cash and non-cash
nonrecurring charges paid by the Company in connection with the Agreement and
Plan of Merger dated as of August 8, 1997 between Xpedite Acquisition Corp. and
the Company and in connection with the Premiere Merger Agreement.
"Consolidated Subsidiary" means, with respect to any Person at any time,
-----------------------
any Subsidiary or other Person the accounts of which would be consolidated with
those of such first Person in its consolidated financial statements as of such
time; unless otherwise specified, "Consolidated Subsidiary" means a Consolidated
Subsidiary of the Company.
"Contract" means (a) any agreement, including an indenture, lease or
--------
license, (b) any deed or other instrument of conveyance, (c) any certificate of
incorporation or charter and (d) any by-law.
"Default" means any condition or event that constitutes an Event of Default
-------
or that with the giving of notice or lapse of time or both would, unless cured
or waived, become an Event of Default.
"Dollar Equivalent" means, on any date, with respect to an amount of
-----------------
Sterling, the amount of Dollars that the Administrative Agent determines (which
determination shall be conclusive and binding absent manifest error) could then
be purchased by it, on a spot basis and in accordance with its customary banking
practices, with such amount of Sterling.
"Dollars" and the sign "$" mean lawful currency of the United States of
------- -
America.
"Domestic Lending Office" of any Bank means (a) the branch or office of
-----------------------
such Bank set forth below such Bank's name under the heading "Domestic Lending
Office" on Annex A or, in the case of a Bank that becomes a Bank pursuant to an
-------
assignment, the branch or office of such Bank set forth under the heading
"Domestic Lending Office" in the Notice of Assignment given to the Borrower and
the Administrative Agent with respect to such assignment or (b) such other
branch or office of such Bank designated by such Bank from time to time as the
branch or office at which its Base Rate Loans are to be made or maintained.
"Enacted", as applied to a Regulatory Change, means the date such
-------
Regulatory Change first becomes effective or is implemented or first required or
expected to be complied with, whether the same is the result of an enactment by
a government or any agency or political subdivision thereof, a determination of
a court or regulatory authority, or otherwise.
"ERISA" means the Employee Retirement Income Security Act of 1974.
-----
"ERISA Affiliate" means, with respect to any Person, any other Person,
---------------
including a Subsidiary or other Affiliate of such first Person, that is a member
of any group of organizations within the meaning of Code Sections 414(b), (c),
(m) or (o) of which such first Person is a member.
48
"Eurocurrency Business Day" means any Business Day on which dealings in
-------------------------
Dollar and Sterling deposits are carried on in the London interbank market and
on which commercial banks are open for domestic and international business
(including dealings in Dollar and Sterling deposits) in London, England.
"Eurocurrency Lending Office" of any Bank means (a) the branch or office of
---------------------------
such Bank set forth below such Bank's name under the heading "Eurocurrency
Lending Office" on Annex A or, in the case of a Bank that becomes a Bank
-------
pursuant to an assignment, the branch or office of such Bank set forth under the
heading "Eurocurrency Lending Office" in the Notice of Assignment given to the
Borrower and the Administrative Agent with respect to such assignment or (b)
such other branch or office of such Bank designated by such Bank from time to
time as the branch or office at which its Eurocurrency Rate Loans are to be made
or maintained.
"Eurocurrency Rate" means, for any Interest Period, the sum of (i) the rate
-----------------
per annum determined by the Administrative Agent to be the rate per annum
(rounded upward, if necessary, to the next higher 1/16 of 1%) at which the
Reference Bank offered or would have offered to place with first-class banks in
the London interbank market deposits in Dollars or Sterling, as the case may be,
in amounts comparable to the Eurocurrency Rate Loan of the Reference Bank to
which such Interest Period applies, for a period equal to such Interest Period,
at 11:00 a.m. (London time) on the second Eurocurrency Business Day (or such
other day as is customary for eurocurrency loans denominated in Sterling) before
the first day of such Interest Period plus (ii) in the case of Eurocurrency Rate
----
Loans made to Xpedite UK, the Additional Sterling Cost for such Interest Period.
"Eurocurrency Rate Loan" means any Loan the interest on which is, or is to
----------------------
be, as the context may require, computed on the basis of the Eurocurrency Rate.
"Event of Default" means any of the events specified in Section 6.01.
----------------
"Existing Benefit Plan" means any Benefit Plan listed on Schedule 4.15.
--------------------- -------------
"Existing Guaranty" means (a) any Guaranty outstanding on the Agreement
-----------------
Date, to the extent set forth on Schedule 4.06, and (b) any Guaranty that
-------------
constitutes a renewal, extension or replacement of an Existing Guaranty, but
only if (i) at the time such Guaranty is entered into and immediately after
giving effect thereto, no Default would exist, (ii) such Guaranty is binding
only on the obligor or obligors under the Guaranty so renewed, extended or
replaced, (iii) the principal amount of the obligations Guaranteed by such
Guaranty does not exceed the principal amount of the obligations Guaranteed by
the Guaranty so renewed, extended or replaced at the time of such renewal,
extension or replacement and (iv) the obligations Guaranteed by such Guaranty
bear interest at a rate per annum not exceeding the rate borne by the
obligations Guaranteed by the Guaranty so renewed, extended or replaced except
for any increase that is commercially reasonable at the time of such increase.
"Existing Indebtedness" means (a) any Indebtedness of the Company or any
---------------------
Subsidiary outstanding on the Agreement Date, to the extent set forth on
Schedule 4.05, and (b) any Indebtedness of the Company or such Subsidiary
-------------
constituting a renewal, extension or refunding of any Existing Indebtedness
(other than Specified Existing Indebtedness) of the Company or
49
such Subsidiary, but only if (i) at the time such Indebtedness is incurred and
immediately after giving effect thereto, no Default would exist, (ii) the
principal amount of such Indebtedness does not exceed the principal amount of
the Indebtedness so renewed, extended or refunded and (iii) such Indebtedness
bears interest at a rate per annum not exceeding the rate borne by the
Indebtedness so renewed, extended or refunded except for any increase that is
commercially reasonable at the time such Indebtedness is incurred.
"Federal Funds Rate" means, for any day, the weighted average of the rates
------------------
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York or, if such rate is not so published for any day that
is a Business Day, the average of quotations for such day on such transactions
received by The Bank of New York from three Federal funds brokers of recognized
standing selected by such bank.
"Generally Accepted Accounting Principles" means (a) in the case of the
----------------------------------------
Base Financial Statements, generally accepted accounting principles at the time
of the issuance of the Base Financial Statements and (b) in all other cases, the
accounting principles followed in the preparation of the Base Financial
Statements.
"Governmental Approval" means any authority, consent, approval, license (or
---------------------
the like) or exemption (or the like) of any governmental unit.
"Governmental Registration" means any registration or filing (or the like)
-------------------------
with, or report or notice (or the like) to, any governmental unit.
"Guaranteed Obligations" means all Liabilities of the Borrowers and the
----------------------
other Loan Parties (including in its capacity as a "debtor in possession" under
the Bankruptcy Code) due or owing to, or in favor or for the benefit of, the
Guaranteed Parties under the Loan Documents, of every kind, nature and
description, direct or indirect, absolute or contingent, due or not due, now
existing or hereafter arising, and whether or not (a) due or owing to, or in
favor or for the benefit of, Persons that are Guaranteed Parties as of the
Agreement Date or that become Guaranteed Parties by reason of any succession or
assignment at any time thereafter, (b) ARISING OR ACCRUING BEFORE OR AFTER THE
FILING BY OR AGAINST ANY LOAN PARTY OF A PETITION UNDER THE BANKRUPTCY CODE OR
(c) ALLOWABLE UNDER SECTION 502(b)(2) OF THE BANKRUPTCY CODE; provided, however,
-------- -------
that (i) the Guaranteed Obligations of the Company in its capacity as a
Guarantor shall not include any of such Liabilities of the Company in its
capacity as a Borrower and (ii) solely with respect to the obligations of XSL as
a Guarantor hereunder or any other Guarantor that is not a United States Person,
Guaranteed Obligations shall not include any such Liabilities of the Company or
any Subsidiary that is a United States Person under the Loan Documents.
"Guaranteed Parties" means all Persons that are, or at any time were, the
------------------
Administrative Agent, or a Bank.
50
"Guarantor" means the Company, all Subsidiaries listed on Schedule 11.01(a)
--------- -----------------
and all Subsidiaries that shall have executed and delivered a Subsidiary
Guaranty Supplement pursuant to Section 4.03 at any time after the Agreement
Date.
"Guaranty" of any Person means any obligation, contingent or otherwise, of
--------
such Person (a) to pay any Liability of any other Person or to otherwise
protect, or having the practical effect of protecting, the holder of any such
Liability against loss (whether such obligation arises by virtue of such Person
being a partner of a partnership or participant in a joint venture or by
agreement to pay, to keep well, to purchase assets, goods, securities or
services or to take or pay, or otherwise) or (b) incurred in connection with the
issuance by a third Person of a Guaranty of any Liability of any other Person
(whether such obligation arises by agreement to reimburse or indemnify such
third Person or otherwise). The word "Guarantee" when used as a verb has the
---------
correlative meaning.
"Indebtedness" of any Person means (a) any obligation of such Person for
------------
borrowed money, (b) any obligation of such Person evidenced by a bond,
debenture, note or other similar instrument, (c) any obligation of such Person
to pay the deferred purchase price of property or services, except a trade
account payable that arises in the ordinary course of business, (d) any
obligation of such Person as lessee under a capital lease, (e) any Mandatorily
Redeemable Stock of such Person, (f) any obligation of such Person to purchase
securities or other property that arises out of or in connection with the sale
of the same or substantially similar securities or property, (g) any obligation,
whether or not contingent, of such Person to reimburse any other Person in
respect of amounts paid under a letter of credit or other Guaranty issued by
such other Person, (h) any Indebtedness of others secured by a Lien on any asset
of such Person and (i) any Indebtedness of others Guaranteed by such Person.
"Indemnified Person" means any Person that is, or at any time was, the
------------------
Administrative Agent, a Bank, an Affiliate of the Administrative Agent or a Bank
or a director, officer, employee or Administrative Agent of any such Person.
"Information" means data, certificates, reports, statements (including
-----------
financial statements), documents and other information.
"Intellectual Property" means (a) (i) patents and patent rights, (ii)
---------------------
trademarks, trademark rights, trade names, trade name rights, corporate names,
business names, trade styles, service marks, logos and general intangibles of
like nature and (iii) copyrights, in each case whether registered, unregistered
or under pending registration and, in the case of any such that are registered
or under pending registration, whether registered or under pending registration
under the laws of the United States or any other country, (b) reissues,
continuations, continuations-in-part and extensions of any Intellectual Property
referred to in clause (a), and (c) rights relating to any Intellectual Property
referred to in clause (a) or (b), including rights under applications (whether
pending under the laws of the United States or any other country) or licenses
relating thereto.
"Intercompany Indebtedness" means Indebtedness owed by the Company or any
-------------------------
other Guarantor to the Company or any other Guarantor.
51
"Interest Coverage Ratio" means, at any time, the ratio of (x) Consolidated
-----------------------
EBITDA for the period of four consecutive fiscal quarters of the Company ending
on, or most recently ended prior to, such date of determination to (y) Interest
Expense minus interest income and amortization of financing costs of the Company
-----
and the Consolidated Subsidiaries for such period.
"Interest Expense" means, for any period, without duplication, the sum of
----------------
all interest expense of the Company and the Consolidated Subsidiaries.
"Interest Payment Date" means the last day of each month of each year.
---------------------
"Interest Period" means a period commencing, in the case of the first
---------------
Interest Period applicable to a Eurocurrency Rate Loan, on the date of the
making of, or conversion into, such Loan, and, in the case of each subsequent,
successive Interest Period applicable thereto, on the last day of the
immediately preceding Interest Period, and ending, depending on the Type of
Loan, on the same day, so long as such day is not later than the Commitment
Termination Date, in the first, second, third or sixth calendar month thereafter
or, in the case of Eurocurrency Rate Loans made to Xpedite UK, or made
previously and which have an Interest Period ending, on any day that is less
than one month prior to the Commitment Termination Date, ending on the
Commitment Termination Date, except that (a) any Interest Period that would
otherwise end on a day that is not a Eurocurrency Business Day shall be extended
to the next succeeding Eurocurrency Business Day unless such Eurocurrency
Business Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Eurocurrency Business Day and (b) any Interest
Period that begins on the last Eurocurrency Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the calendar
month in which such Interest Period ends) shall end on the last Eurocurrency
Business Day of a calendar month.
"Investment" of any Person means (a) any Capital Security, evidence of
----------
Indebtedness or other security or instrument issued by any other Person or (b)
any loan, advance or extension of credit to, or any contribution to the capital
of, any other Person.
"Lending Office" of any Bank means the Domestic Lending Office or the
--------------
Eurocurrency Lending Office of such Bank.
"Leverage Ratio" means, at any time, the ratio of Consolidated Indebtedness
--------------
at such time to Consolidated EBITDA for the period of four consecutive fiscal
quarters of the Company ending on, or most recently ended prior to, such date of
determination.
"Liability" of any Person means (in each case, whether with full or limited
---------
recourse) any indebtedness, liability, obligation, covenant or duty of or
binding upon, or any term or condition to be observed by or binding upon, such
Person or any of its assets, of any kind, nature or description, direct or
indirect, absolute or contingent, due or not due, contractual or tortious,
liquidated or unliquidated, whether arising under Contract, Applicable Law, or
otherwise, whether now existing or hereafter arising, and whether for the
payment of money or the performance or non-performance of any act.
52
"Lien" means, with respect to any property or asset (or any income or
----
profits therefrom) of any Person (in each case whether the same is consensual or
nonconsensual or arises by Contract, operation of law, legal process or
otherwise), any mortgage, lien, pledge, attachment, levy or other security
interest of any kind thereupon or in respect thereof. For the purposes of this
Agreement, a Person shall be deemed to own subject to a Lien any asset that it
has acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
relating to such asset.
"Loan" means any amount advanced by a Bank pursuant to Section 1.01.
----
"Loan Document Related Claim" means any claim or dispute (whether arising
---------------------------
under Applicable Law, including any "environmental" or similar law, under
Contract or otherwise and, in the case of any proceeding relating to any such
claim or dispute, whether civil, criminal, administrative or otherwise) in any
way arising out of, related to, or connected with, the Loan Documents, the
relationships established thereunder or any actions or conduct thereunder or
with respect thereto, whether such claim or dispute arises or is asserted before
or after the Agreement Date or before or after the Repayment Date.
"Loan Document Representation and Warranty" means any "Representation and
-----------------------------------------
Warranty" as defined in any Loan Document and any other representation or
warranty made or deemed made under any Loan Document.
"Loan Documents" means (a) this Agreement, the Notes, the Security
--------------
Agreements and the UK Security Agreements and (b) all other agreements,
documents and instruments executed or delivered under or in connection with (i)
any agreement, document or instrument referred to in clause (a), (ii) any other
agreement, document or instrument referred to in this clause (b) or (iii) any of
the transactions contemplated by any agreement, document or instrument referred
to in clause (a) or in this clause (b) (other than the Acquisitions).
"Loan Party" means any Person (other than the Administrative Agent or a
----------
Bank) that is a party to a Loan Document.
"Mandatorily Redeemable Stock" means, with respect to any Person, any share
----------------------------
of such Person's capital stock to the extent that it is (a) redeemable, payable
or required to be purchased or otherwise retired or extinguished, or convertible
into any Indebtedness or other Liability of such Person, (i) at a fixed or
determinable date, whether by operation of a sinking fund or otherwise, (ii) at
the option of any Person other than such Person or (iii) upon the occurrence of
a condition not solely within the control of such Person, such as a redemption
required to be made out of future earnings or (b) convertible into Mandatorily
Redeemable Stock.
"Materially Adverse Effect" means, (a) with respect to a group of Persons
-------------------------
"taken as a whole", any materially adverse effect on such Persons' business,
assets, Liabilities, financial conditions, results of operations or business
prospects taken as a whole on a consolidated basis in accordance with Generally
Accepted Accounting Principles, (b) with respect to any Loan Document, any
materially adverse effect, on the binding nature, validity or enforceability
thereof as an obligation of any Loan Party that is a party thereto and (c) with
respect to any Collateral, or
53
any category of Collateral, pledged by any Loan Party, a materially adverse
effect on the validity, perfection, priority or enforceability of the Security
Interest therein.
"Maximum Permissible Rate" means, with respect to interest payable on any
------------------------
amount, the rate of interest on such amount that, if exceeded, could, under
Applicable Law, result in (a) civil or criminal penalties being imposed on the
payee or (b) the payee's being unable to enforce payment of (or, if collected,
to retain) all or any part of such amount or the interest payable thereon.
"Money Market Investment" means (a) any security issued or directly and
-----------------------
fully guaranteed or insured by the United States government or any agency or
instrumentality thereof having a remaining maturity of not more than one year,
(b) any certificate of deposit, eurodollar time deposit and bankers' acceptance
with remaining maturity of not more than one year, any overnight bank deposit,
and any demand deposit account, in each case with any Bank or with any United
States or United Kingdom commercial bank having capital and surplus in excess of
$500,000,000 or (Pounds)500,000,000, (c) any repurchase obligation with a term
of not more than seven days for underlying securities of the types described in
clauses (a) and (b) above entered into with any financial institution meeting
the qualifications specified in clause (b) above, (d) any commercial paper
issued by any Bank or the parent corporation of any Bank and any other
commercial paper rated A-1 or higher by Standard & Poor's, a division of the
McGraw Hill Companies, Inc., or Prime-1 by ▇▇▇▇▇'▇ Investors Service, Inc. and
in any case having a remaining maturity of not more than one year, (e) any money
market fund that invests solely in any or all of the Money Market Investments
described in clauses (a) through (d) of this definition and (f) foreign currency
investments of credit quality similar to the foregoing by any Subsidiary that is
not a United States Person made in the ordinary course of business and
reasonably related to the business needs of such Subsidiary.
"Multiemployer Benefit Plan" means any Benefit Plan that is a multiemployer
--------------------------
plan as defined in Section 4001(a)(3) of ERISA.
"Note" means any promissory note in the form of Exhibit A.
---- ---------
"Notice of Assignment" means any notice to the Borrowers and the
--------------------
Administrative Agent with respect to an assignment pursuant to Section 10.10(a)
in the form of Schedule 10.10(a).
-----------------
"PBGC" means the Pension Benefit Guaranty Corporation.
----
"Permitted Guaranty" means any Guaranty that is (a) an endorsement for
------------------
deposit or collection in the ordinary course of business, (b) a Guaranty of and
only of the obligations of the Loan Parties under the Loan Documents, (c) a
Guaranty of obligations of the Company or any Subsidiary not constituting
Indebtedness of such Person and not otherwise prohibited by this Agreement or
(d) a Guaranty of Indebtedness permitted pursuant to Section 4.05(c), (d) or
(f).
"Permitted Lien" means (a) with respect to any asset that does not
--------------
constitute Collateral, (i) any Lien existing on the Agreement Date, to the
extent set forth on Schedule 4.07; (ii) any Lien existing on any asset of any
--------------
Person at the time such Person becomes a Subsidiary or on any asset at the time
such asset is acquired by the Company or a Subsidiary, but only, in either case,
if such Lien was not created in contemplation of such Person becoming a
Subsidiary or such
54
asset being acquired and such Lien secures only the obligation secured thereby
at the time such Person becomes a Subsidiary or such asset is acquired; (iii)
any Lien on any asset securing Indebtedness incurred or assumed for the purpose
of financing all or any part of the cost of acquiring such asset, provided that
--------
such Lien attaches to such asset concurrently with or within 30 days after the
acquisition thereof; (iv) any Lien arising out of the refinancing, extension,
renewal or refunding of any Liability secured by any Lien permitted by any of
the foregoing clauses of this Section, provided that such Liability is not
--------
increased and is not secured by any additional assets; (v) Liens on the assets
of the Company or any Subsidiary incidental to conduct of its business or the
ownership of its assets that do not secure Indebtedness; (vi) any Lien securing
and only securing the obligations of the Loan Parties under the Loan Documents;
(vii) Liens securing Indebtedness of the Company or any Subsidiary under a
capital lease to the extent that such Liens attach solely to the assets subject
to such capital lease or acquired with the proceeds of such Indebtedness; (viii)
other Liens securing Indebtedness of the Company and its Subsidiaries not
prohibited by this Agreement in an aggregate principal amount outstanding at any
time not in excess of $1,000,000 and (b) with respect to any asset that
constitutes Collateral, any Lien that constitutes a "Permitted Lien" under the
applicable Security Agreement or UK Security Agreements; and (ix) any Liens for
Taxes which are being contested in good faith by appropriate proceedings and for
which adequate reserves have been established in accordance with Generally
Accepted Accounting Principles.
"Permitted Restrictive Covenants" means (a) any covenant or restriction
-------------------------------
contained in any Loan Document, (b) any covenant or restriction described in
Schedule 4.11, but only to the extent that such covenant or restriction is there
-------------
identified by specific reference to the provision of the Contract in which such
covenant or restriction is contained, or (c) any covenant or restriction that
(i) is not more burdensome than an existing Permitted Restrictive Covenant that
is such by virtue of clause (b), (ii) is contained in a Contract constituting a
renewal, extension or replacement of the Contract in which such existing
Permitted Restrictive Covenant is contained and (iii) is binding only on the
Person or Persons bound by such existing Permitted Restrictive Covenant.
"Permitted Restructuring Transaction" means any corporate restructuring
-----------------------------------
transaction involving the Company and its Subsidiaries that is described in
Schedule 11.01(b).
-----------------
"Person" means any individual, sole proprietorship, corporation,
------
partnership, limited liability company, trust, unincorporated organization,
mutual company, joint stock company, estate, union, employee organization,
government or any agency or political subdivision thereof or, for the purpose of
the definition of "ERISA Affiliate", any trade or business.
"Post-Default Rate" means the rate otherwise applicable under Section
-----------------
1.03(a)(i) plus 2.0%.
"Premiere Acquisition" means the consummation of the transactions
--------------------
contemplated by the Premiere Merger Agreement.
"Premiere Merger Agreement" means the Agreement and Plan of Merger, dated
-------------------------
as of November 13, 1997, among the Company, Nets Acquisition Corp. and Premiere
Technologies, Inc.
55
"Prime Rate" means the prime commercial lending rate of The Bank of New
----------
York, as publicly announced to be in effect from time to time. The Prime Rate
shall be adjusted automatically, without notice, on the effective date of any
change in such prime commercial lending rate. The Prime Rate is not necessarily
The Bank of New York's lowest rate of interest.
"Pro Forma Financial Statements" has the meaning ascribed to such term in
------------------------------
Section 2.01(a)(xvi).
"Prohibited Transaction" means any transaction that is prohibited under
----------------------
Code Section 4975 or ERISA Section 406 and not exempt under Code Section 4975 or
ERISA Section 408.
"Quarterly Date" means the last day of each March, June, September and
--------------
December of each year.
"Reference Bank" means The Bank of New York and any replacement Reference
--------------
Bank appointed pursuant to Section 10.13.
"Regulation D" means Regulation D of the Board of Governors of the Federal
------------
Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the Federal
------------
Reserve System.
"Regulatory Change" means any Applicable Law, interpretation, directive,
-----------------
request or guideline (whether or not having the force of law), or any change
therein or in the administration or enforcement thereof, that is Enacted after
the Agreement Date, including any such that imposes, increases or modifies any
Tax, reserve requirement, insurance charge, special deposit requirement,
assessment or capital adequacy requirement, but excluding any such that imposes,
increases or modifies any Bank Tax.
"Repayment Date" means the later of (a) the termination of the Commitments
--------------
(whether as a result of the occurrence of the Commitment Termination Date,
reduction to zero pursuant to Section 1.07 or termination pursuant to Section
6.02) and (b) the payment in full of all principal of and interest on the Loans
and all other amounts payable or accrued hereunder.
"Reportable Event" means, with respect to any Benefit Plan of any Person,
----------------
(a) the occurrence of any of the events set forth in ERISA Sections 4043(c),
other than an event as to which the requirement of 30 days' notice, or the
penalty for failure to provide such notice, has been waived by the PBGC, (b) the
existence of conditions sufficient to require advance notice to the PBGC
pursuant to ERISA Section 4043(b), (c) the occurrence of any of the events set
forth in ERISA Sections 4062(e) or 4063(a) or the regulations thereunder, (d)
any event requiring such Person or any of its ERISA Affiliates to provide
security to such Benefit Plan under Code Section 401(a)(29) or (e) any failure
to make a payment required by Code Section 412(m) with respect to such Benefit
Plan.
"Representation and Warranty" means any representation or warranty made
---------------------------
pursuant to or under (a) Section 2.02, Article 3, Section 5.02 or any other
provision of this Agreement or (b) any amendment to, or waiver of rights under,
this Agreement.
56
"Required Banks" means, at any time, Banks having more than 51% of the
--------------
aggregate amount of the Commitments or, if the Commitments shall have expired or
been terminated, Banks having more than 51% of the aggregate amount of the Loans
outstanding.
"Restricted Payment" means (a) any payment with respect to or on account of
------------------
any of the Company's or any Subsidiary's Capital Securities, including any
dividend or other distribution on any such Capital Securities or (b) any payment
on account of any purchase, redemption, retirement, exchange, defeasance or
conversion of, or on account of any claim relating to or arising out of the
offer, sale or purchase of, any such Capital Security. For the purposes of this
definition, a "payment" shall include the transfer of any asset or the
incurrence of any Indebtedness or other Liability (the amount of any such
payment to be the fair market value of such asset or the amount of such
obligation, respectively) but shall not include the issuance of any capital
stock of the Company or any Subsidiary other than Mandatorily Redeemable Stock.
"Secured Party" has the meaning ascribed to such term in the Security
-------------
Agreements and to the term "Agent" in the UK Security Agreements and to any
analogous term in any other security agreement executed and delivered pursuant
to Section 4.03(iii).
"Security Agreements" means collectively (a) each of the Security Agreement
-------------------
between Worldwide and the Administrative Agent and the Security Agreement
between the Company and the Administrative Agent, in each case in substantially
the form of Exhibit B and (b) any other security agreement entered into by a
---------
Significant Subsidiary and the Administrative Agent pursuant to Section 4.03, in
each case in substantially the form of Exhibit B.
---------
"Security Interest" means the Liens created, or purported to be created, by
-----------------
the Loan Documents.
"Significant Subsidiary" means, at any time, any Subsidiary whose assets
----------------------
(after elimination of intercompany items) equal or exceed 10% of the total
consolidated assets of the Company and the Consolidated Subsidiaries, or whose
revenues (after elimination of intercompany items) equal or exceed 10% of the
total consolidated revenues of the Company and the Consolidated Subsidiaries, in
each case as shown on the most recent financial statements of the Company and
its Consolidated Subsidiaries furnished to the Banks pursuant to Section 5.01.
"Specified Existing Indebtedness" means Existing Indebtedness specified on
-------------------------------
Schedule 4.05 to be Specified Existing Indebtedness.
-------------
"Sterling" and the sign "(Pounds)" mean lawful currency of the United
-------- --------
Kingdom.
"Sterling Sub-limit" means $70,000,000, as such amount may be decreased
------------------
from time to time pursuant to Section 1.07.
"Subsidiary" means, with respect to any Person, any other Person (a)
----------
securities of which having ordinary voting power to elect a majority of the
board of directors (or other persons having similar functions) or (b) other
ownership interests of which ordinarily constituting a majority voting interest,
are at the time, directly or indirectly, owned or controlled by such first
Person, or by one or more of its Subsidiaries, or by such first Person and one
or more of its Subsidiaries; unless otherwise specified, "Subsidiary" means a
Subsidiary of the Company.
57
"Tax" means any Federal, State or foreign tax, assessment or other
---
governmental charge (including any withholding tax) upon a Person or upon its
assets, revenues, income or profits.
"Termination Event" means, with respect to any Benefit Plan, (a) any
-----------------
Reportable Event with respect to such Benefit Plan, (b) the termination of such
Benefit Plan, or the filing of a notice of intent to terminate such Benefit
Plan, or the treatment of any amendment to such Benefit Plan as a termination
under ERISA Section 4041(c), (c) the institution of proceedings to terminate
such Benefit Plan under ERISA Section 4042 or (d) the appointment of a trustee
to administer such Benefit Plan under ERISA Section 4042.
"Type" means, with respect to Loans, any of the following, each of which
----
shall be deemed to be a different "Type" of Loan: Base Rate Loans, Eurocurrency
Rate Loans having a one-month Interest Period, Eurocurrency Rate Loans having a
two-month Interest Period, Eurocurrency Rate Loans having a three-month Interest
Period, and Eurocurrency Rate Loans having a six-month Interest Period. Any
Eurocurrency Rate Loan having an Interest Period that differs from the duration
specified for a Type of Eurocurrency Rate Loan listed above solely as a result
of the operation of clauses (a) and (b) of the definition of "Interest Period"
shall be deemed to be a Loan of such above-listed Type notwithstanding such
difference in duration of Interest Periods.
"UK Security Agreements" means collectively (a) the Worldwide UK Security
----------------------
Agreement, (b) the Xpedite UK Security Agreement, (c) the XSL Security Agreement
and (d) any other security agreement entered into by a Subsidiary of Xpedite UK
that is a Significant Subsidiary and the Administrative Agent pursuant to
Section 4.03, in each case in substantially the form of Exhibit E.
---------
"United States Person" means a corporation, partnership or other entity
--------------------
created, organized or incorporated under the laws of the United States of
America or a State thereof (including the District of Columbia).
"Worldwide" means Xpedite Systems Worldwide, Inc.
---------
"Worldwide UK Security Agreement" means the Deed of Charge over Shares and
-------------------------------
Securities dated December 17, 1997 between Worldwide, as Chargor, and The Bank
of New York, as Agent, in substantially the form of Exhibit C.
---------
"Xpedite UK" has the meaning ascribed thereto in the preamble hereto.
----------
"Xpedite UK Security Agreement" means the Fixed and Floating Charge dated
-----------------------------
December 17, 1997 between Xpedite UK and The Bank of New York, as Agent, in
substantially the form of Exhibit D.
---------
"XSG" means Xpedite Systems, GmbH, a German corporation.
---
"XSG Acquisition" means the acquisition to be effected pursuant to and in
---------------
accordance with the terms of the XSG Acquisition Documents.
58
"XSG Acquisition Documents" means (i) the Share Purchase Agreement dated as
-------------------------
of December 18, 1997 among the Company, Worldwide, APA Expert
Beteiligungsgesellschaft mbH and APA German European Ventures L.P. Limited
Partnership and (ii) the Share Purchase Agreement dated as of December 18, 1997
among the Company, Worldwide and the shareholders of XSG named therein.
"XSL" means Xpedite Systems Limited., an English corporation.
---
"XSL Acquisition" means the acquisition to be effected pursuant to and in
---------------
accordance with the terms of the XSL Acquisition Documents.
"XSL Acquisition Documents" means (i) the Share Purchase Agreement dated
-------------------------
August 8, 1997 among the Company, Xpedite UK and the shareholders XSL and (ii)
the Buyback Agreement dated August 8, 1997 between Eagle Nominees Limited and
XSL, each as amended through the Agreement Date.
"XSL Security Agreement" means the Fixed and Floating Charge dated December
----------------------
17, 1997 between XSL and The Bank of New York, as Agent, in substantially the
form of Exhibit E.
---------
Section 11.02 Other Interpretive Provisions.
-----------------------------
(a) Except as otherwise specified herein, all references herein or in
any other Loan Document (i) to any Person shall be deemed to include such
Person's successors and assigns, (ii) to any Applicable Law defined or referred
to herein shall be deemed references to such Applicable Law or any successor
Applicable Law as the same may have been or may be amended or supplemented from
time to time and (iii) to any Loan Document or Contract defined or referred to
herein shall be deemed references to such Loan Document or Contract (and, in the
case of any Note or any other instrument, any instrument issued in substitution
therefor) as the terms thereof may have been or may be amended, supplemented,
waived or otherwise modified from time to time.
(b) When used in this Agreement, the words "herein", "hereof" and
"hereunder" and words of similar import shall refer to this Agreement as a whole
and not to any provision of this Agreement, and the words "Article", "Section",
"Annex", "Schedule" and "Exhibit" shall refer to Articles and Sections of, and
Annexes, Schedules and Exhibits to, this Agreement unless otherwise specified.
(c) Whenever the context so requires, the neuter gender includes the
masculine or feminine, the masculine gender includes the feminine, and the
singular number includes the plural, and vice versa.
(d) Any item or list of items set forth following the word
"including", "include" or "includes" is set forth only for the purpose of
indicating that, regardless of whatever other items are in the category in which
such item or items are "included", such item or items are in such category, and
shall not be construed as indicating that the items in the category in which
such item or items are "included" are limited to such items or to items similar
to such items.
59
(e) Except as otherwise specified herein, all references herein to
the Agent, any Bank or any Loan Party shall be deemed to refer to such Person
however designated in Loan Documents, so that (i) a reference to rights or
duties of the Administrative Agent under the Loan Documents shall be deemed to
include the rights or duties of such Person as the Security Party under the
Security Agreements and the UK Security Agreements, (ii) a reference to costs
incurred by a Bank in connection with the Loan Documents shall be deemed to
include costs incurred by such Person as a Principal under (and as defined in)
the Security Agreements and the UK Security Agreements, and (iii) a reference to
the obligations of the Borrowers or any other Loan Party under the Loan
Documents shall be deemed to include the obligations of such Person in any
capacity under the Loan Documents.
Section 11.03 Accounting Matters. All accounting determinations hereunder
------------------
and all computations utilized by the Company in complying with the covenants
contained herein shall be made, all accounting terms used herein shall be
interpreted, and all financial statements required to be delivered hereunder
shall be prepared, in accordance with Generally Accepted Accounting Principles,
except, in the case of such financial statements, for changes in Generally
Accepted Accounting Principles that may from time to time be approved by a
significant segment of the accounting profession.
Section 11.04 Representations and Warranties. All Representations and
------------------------------
Warranties shall be deemed made (a) in the case of any Representations and
Warranties contained in this Agreement at the time of its initial execution and
delivery, at and as of the Agreement Date and (b) in the case of any particular
Representation and Warranty, wherever contained, at such other time or times as
such Representation and Warranty is made or deemed made in accordance with the
provisions of this Agreement or the document pursuant to, under or in connection
with which such Representation and Warranty is made or deemed made.
Section 11.05 Captions. Captions to Articles, Sections and subsections
--------
of, and Annexes, Schedules and Exhibits to, this Agreement are included for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or in any way affect the meaning or construction of any
provision of this Agreement.
Section 11.06 Interpretation and Related Documents. Except as otherwise
------------------------------------
specified therein, terms that are defined herein that are used in Notes,
certificates, opinions and other documents delivered in connection herewith
shall have the meanings ascribed to them herein and such documents shall be
otherwise interpreted in accordance with the provisions of this Article 11.
60
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized officers all as of the Agreement Date.
XPEDITE SYSTEMS, INC.
By /s/
--------------------------------------
Name:
Title:
XPEDITE SYSTEMS HOLDINGS (UK) LIMITED
By /s/
--------------------------------------
Name:
Title:
XPEDITE SYSTEMS WORLDWIDE, INC.
By /s/
--------------------------------------
Name:
Title:
XPEDITE SYSTEMS LIMITED
By /s/
--------------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Administrative Agent and as a Bank
By /s/
--------------------------------------
Name:
Title:
NATIONSBANK, N.A.,
as Documentation Agent and as a Bank
By /s/
--------------------------------------
Name:
Title:
Agreement Date:
ANNEX A
-------
BANKS, LENDING OFFICES
AND NOTICE ADDRESSES COMMITMENTS
--------------------- -----------
THE BANK OF NEW YORK $75,000,000
Domestic Lending Office:
The Bank of New York
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Eurocurrency Lending Office:
The Bank of New York
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Notice Address:
The Bank of New York
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
BANKS, LENDING OFFICES
AND NOTICE ADDRESSES COMMITMENTS
--------------------- -----------
NATIONSBANK, N.A. $75,000,000
Domestic Lending Office:
NationsBank, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Eurocurrency Lending Office:
NationsBank, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Notice Address:
NationsBank, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Schedule 1.02
-------------
NOTICE OF BORROWING FOR LOANS
[Name and address
of Administrative Agent in accordance with
Section 10.01]
Date:
Ladies and Gentlemen:
Reference is made to the Credit Agreement, dated as of December 17, 1997,
among Xpedite Systems, Inc. and Xpedite Systems Holdings (UK) Limited, as
Borrowers, the Guarantors party thereto, the Banks listed on the signature pages
thereof, NationsBank, N.A., as Documentation Agent, and The Bank of New York, as
Administrative Agent (the "Credit Agreement"). Terms defined in the Credit
Agreement that are not otherwise defined herein are used herein with the
meanings therein ascribed to them. The undersigned hereby gives notice pursuant
to Section 1.02 of the Credit Agreement of its request to have the following
Loans made to it on [insert requested date of borrowing or issuance]:
Type of Loan/1/ Amount
------------ ------
_________________________________ ______________
_________________________________ ______________
_________________________________ ______________
[Please disburse the proceeds of the Loans by [insert requested method of
disbursement].]/2/
The undersigned represents and warrants that (a) the borrowing requested
hereby complies with the requirements of Section 1.02 of the Credit Agreement
and (b) [except to the extent set forth on Annex A hereto,]3 (i) each Loan
Document Representation and Warranty is true and correct at and as of the date
hereof and (except to the extent the undersigned gives notice to the Banks to
the contrary prior to 5:00 p.m. on the Business Day before the requested date
for the making of the Loans) will be true and correct at and as of the time the
Loans are made, in each case both with and without giving effect to the Loans
and the application of the proceeds thereof, and (ii) no Default has occurred
and is continuing as of the date hereof or would result from the making of the
Loans or from the application of the proceeds thereof if the
Loans were made on the date hereof, and (except to the extent the undersigned
gives notice to the Banks to the contrary prior to 5:00 p.m. on the Business Day
before the requested date for the making of the Loans) no Default will have
occurred and be continuing at the time the Loans are to be made or would result
from the making of the Loans or from the application of the proceeds thereof.
[XPEDITE SYSTEMS, INC.]
[XPEDITE SYSTEMS HOLDINGS (UK) LIMITED]
By _______________________________,
Name:
Title:
_____________________
1. Be sure to specify the duration of the Interest Period in the case of
Eurocurrency Rate Loans (e.g., one-month Eurocurrency Rate).
----
2. Include and complete this sentence if the proceeds of the requested Loans
are to be disbursed in a manner other than by credit to an account of the
Borrower at the Administrative Agent's Office.
3. If the representation and warranty in either clause (b)(i) or (b)(ii) would
be incorrect, include the material in brackets and set forth the reasons
such representation and warranty would be incorrect on an attachment
labeled Annex A.
Schedule 1.03(c)(iv)
--------------------
NOTICE OF CONVERSION OR CONTINUATION
[Name and address
of Administrative Agent in accordance with
Section 10.01]
Date:
Ladies and Gentlemen:
Reference is made to the Credit Agreement, dated as of December 17, 1997,
among Xpedite Systems, Inc. and Xpedite Systems Holdings (UK) Limited, as
Borrowers, the Guarantors party thereto, the Banks listed on the signature pages
thereof, NationsBank, N.A., as Documentation Agent, and The Bank of New York, as
Administrative Agent (the "Credit Agreement"). The undersigned hereby gives
notice pursuant to Section 1.03(c)(iv) of the Credit Agreement of its desire to
convert or continue the Loans specified below into or as Loans of the Types and
in the amounts specified below on [insert date of conversion or continuation]:
Loans to be Converted or Continued Converted or Continued Loans
---------------------------------- ----------------------------
Last Day of
Type Current Type
of Loan/1/ Interest Period Amount of Loan/1/ Amount
---------- --------------- ------ ---------- ------
_______________ _______________ ______________ ________________ ______________
_______________ _______________ ______________ ________________ ______________
_______________ _______________ ______________ ________________ ______________
The undersigned represents and warrants that conversions and continuations
requested hereby comply with the requirements of the Credit Agreement.
[XPEDITE SYSTEMS, INC.]
[XPEDITE SYSTEMS HOLDINGS
(UK) LIMITED]
By:____________________________
Name:
Title:
__________________________
/1/ Be sure to specify the duration of the Interest Period in the case of
Eurocurrency Rate Loans (e.g., one-month Eurocurrency Rate).
Schedule 1.05(a)
----------------
NOTICE OF PREPAYMENT
[Name and address
of Administrative Agent in accordance with
Section 10.01]
Date:
Ladies and Gentlemen:
Reference is made to the Credit Agreement, dated as of December 17, 1997,
among Xpedite Systems, Inc. and Xpedite Systems Holdings (UK) Limited, as
Borrowers, the Guarantors party thereto, the Banks listed on the signature pages
thereof, NationsBank, N.A., as Documentation Agent, and The Bank of New York, as
Administrative Agent (the "Credit Agreement"). The undersigned hereby gives
notice pursuant to Section 1.05(a) of the Credit Agreement that it will prepay
the Loans specified below on [insert date of prepayment]:
[Last Day of
Current
Type of Loan/1/ Interest Period] Amount
--------------- ---------------- ------
______________ __________ ______
______________ __________ ______
______________ __________ ______
The undersigned represents and warrants that the prepayment
requested hereby complies with the requirements of the Credit Agreement.
[XPEDITE SYSTEMS, INC.]
[XPEDITE SYSTEMS HOLDINGS (UK)
LIMITED]
By ____________________________
Name:
Title:
_______________________
/1/ Be sure to specify the duration of the Interest Period in the case of
Eurocurrency Rate Loans (e.g., one-month Eurocurrency Rate).
Schedule 2.01(a)(i)
-------------------
[INSERT NAME OF LOAN PARTY]
CERTIFICATE AS TO RESOLUTIONS, ETC.
I, __________, [Assistant] Secretary of [insert name of loan party], a
[__________] corporation (the "Company"), hereby certify, pursuant to Section
2.01(a)(i) of the Credit Agreement, dated as of December 17, 1997, among Xpedite
Systems, Inc. and Xpedite Systems Holdings (UK) Limited, as Borrowers, the
Guarantors party thereto, the Banks listed on the signature pages thereof,
NationsBank, N.A., as Documentation Agent, and The Bank of New York, as
Administrative Agent (the "Credit Agreement"), that:
1. The below named persons have been duly elected (or appointed) and have
duly qualified as, and on this day are, officers of the Company holding their
respective offices below set opposite their names, and the signatures below set
opposite their names are their genuine signatures:
Name Office Signature
---- ------ ---------
[Insert names and offices _______________________________
of persons authorized to sign _______________________________
the Loan Documents to which _______________________________
the Company is a party _______________________________
and any related documents] _______________________________
2. (a) Attached as Annex A is a true and correct copy of resolutions duly
adopted by [unanimous written consent of] the Board of Directors of the Company.
Such resolutions have not been amended, modified or revoked and are in full
force and effect on the date hereof.
[(b) Attached as Annex A-1 is a true and correct copy of resolutions duly
adopted by [unanimous written consent of] the stockholders of the Company. Such
resolutions have not been amended, modified or revoked and are in full force and
effect on the date hereof.]1
3. The loan documents to which the Company is a party, in each case as
executed and delivered on behalf of the Company, are in the forms thereof
approved by [unanimous written consent of] the Board of Directors of the
Company.
4. There has been no amendment to the Certificate of Incorporation of the
Company since __________, 19__./2/
5. Attached as Annex B is a true and correct copy of the By-laws of the
Company as in effect on __________, 19__/3/ and at all subsequent times to and
including the date hereof.
IN WITNESS WHEREOF, I have signed this certificate this __ day of
__________, 1997.
___________________________
[Assistant] Secretary
I, __________, [title] of the Company, hereby certify that [name of the
above [Assistant] Secretary] has been duly elected or appointed and has been
duly qualified as, and on this day is, [Assistant] Secretary of the Company, and
the signature in paragraph 1 above is his genuine signature.
IN WITNESS WHEREOF, I have signed this certificate this __ day of
__________, 19__.
___________________________
[Title]
____________________
1. Omit if not applicable.
2. Insert date of the Secretary of State's Certificate of Incorporation
required by Section 2.01(a)(ii).
3. Insert date of the Board of Directors' meeting adopting the resolutions
referred to in paragraph 2(a).
2
Schedule 2.01(a)(iv)
--------------------
FORM OF OPINION OF COUNSEL
FOR THE LOAN PARTIES
Schedule 2.01(a)(v)
-------------------
FORM OF OPINION OF ENGLISH COUNSEL FOR XPEDITE SYSTEMS
HOLDINGS (UK) LIMITED
Schedule 2.01 (a)(vi)
---------------------
FORM OF OPINION OF
WINTHROP, STIMSON, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
December [_], 1997
To the Administrative Agent and each Bank party
to the Credit Agreement referred to below
Ladies and Gentlemen:
We have acted as counsel to The Bank of New York, as Administrative Agent,
and NationsBank, N.A., as Documentation Agent, in connection with the
negotiation, execution and delivery of the Credit Agreement, dated as of
December 17, 1997, among Xpedite Systems, Inc. and Xpedite Systems Holdings (UK)
Limited, as Borrowers, the Guarantors party thereto, the Banks listed on the
signature pages thereof, NationsBank, N.A., as Documentation Agent, and The Bank
of New York, as Administrative Agent (the "Credit Agreement"). Terms defined in
----------------
the Credit Agreement that are not otherwise defined herein are used herein with
the meanings therein ascribed to them.
For the purposes of rendering the opinions contained in this letter, we
have examined executed counterparts of the Credit Agreement, the Notes delivered
on the date hereof, and the Security Agreements (collectively, the "Loan
----
Documents").
---------
For the purposes of this opinion, we have assumed (i) the authenticity of
all such documents submitted to us as originals, (ii) the due authorization,
execution and delivery by the Administrative Agent and the Banks of the Loan
Documents to which they are parties, (iii) that each of the Loan Parties has the
corporate power, and has taken all necessary corporate action to authorize it,
to execute, deliver and perform each of the Loan Documents to which it is a
party, (iv) that the Loan Documents have been duly executed and delivered by
each of the Loan Parties and (v) that the execution, delivery and performance in
accordance with their respective terms by each of the Loan Parties of the Loan
Documents to which it is a party do not and will not (A) require any
Governmental Approval or any other consent or approval, other than Governmental
Approvals and other consents or approvals that have been obtained, are final and
not subject to review or collateral attack and are in full force and effect, or
(B) violate or conflict with, result in a breach of, or constitute a default
under (1) any Contract to which any of the Loan Parties is a party or by which
it or its properties may be bound or (2) any Applicable Law referred to in
clause (ii)(B) or (C) of the definition thereof contained in the Credit
Agreement.
Based upon the foregoing, and subject to the qualifications and limitations
set forth herein, we are of the opinion that the Loan Documents are legal, valid
and binding obligations of the Loan Parties party thereto, enforceable against
such Loan Parties in accordance with their respective terms.
Our opinion above is subject to the following qualifications and
limitations:
(a) Our opinion is subject to the effect of applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance and other laws affecting the
enforcement of creditors' rights generally and to the effect of general
equitable principles (whether considered in a proceeding in equity or at law).
Such principles applied by a court might include a requirement that a creditor
act with reasonableness and good faith. Furthermore, a court may refuse to
enforce a covenant where a court deems such covenant to be violative of
applicable public policy.
(b) Our opinions are limited to the law of the State of New York and
the Federal law of the United States. Without limiting the generality of the
foregoing, we express no opinion as to the effect of the law of any jurisdiction
other than the State of New York wherein any Bank may be located or wherein
enforcement of the Loan Documents may be sought that limits the rates of
interest legally chargeable or collectable.
(c) Certain remedial provisions of the Security Agreements may be
unenforceable in whole or in part, but the inclusion of such provisions does not
affect the validity of any of the Security Agreements, and each of the Security
Agreements taken as a whole contains adequate provisions for enforcing the
obligations of the Loan Parties pursuant thereto and for the practical
realization of the benefits created thereby. In addition, certain remedial
provisions of the Security Agreements may be subject to procedural requirements
not set forth therein.
(d) Our opinion (to the extent it relates to the Security Agreements)
is also subject to the limitation that we express no opinion with respect to:
(i) the perfection or priority of the Security Interest;
(ii) each Loan Party's rights in or title to or legal or
beneficial ownership of any of the Collateral; and
(iii) the validity or enforceability of the Security Interest
except to the extent that the creation thereof is governed by Article 8 or 9 of
the Uniform Commercial Code as in effect on the date hereof in the State of New
York.
This opinion is intended for the sole benefit of the Administrative Agent
and the Banks and no other Person shall be entitled to rely hereon for any
purpose.
Very truly yours,
2
Schedule 3.02
-------------
SCHEDULE OF SUBSIDIARIES
Schedule 3.03
-------------
SCHEDULE OF REQUIRED CONSENTS AND
GOVERNMENTAL APPROVALS
[NONE]
Schedule 3.05
-------------
SCHEDULE OF MATERIAL LITIGATION
[NONE]
Schedule 3.07
-------------
SCHEDULE OF ADDITIONAL MATERIAL ADVERSE FACTS
[NONE]
Schedule 3.10
-------------
SCHEDULE OF ENVIRONMENTAL MATTERS
[NONE]
Schedule 4.03
-------------
FORM OF SUBSIDIARY GUARANTY SUPPLEMENT
Credit Agreement, dated as of December 17, 1997,
-----------------------------------------------_
among Xpedite Systems, Inc. and Xpedite Systems Holdings (UK)
-------------------------------------------------------------
Limited, as Borrowers, the Guarantors party thereto, the Banks party
--------------------------------------------------------------------
thereto, NationsBank, N.A., as Documentation Agent, and The Bank of
-------------------------------------------------------------------
New York, as Administrative Agent (the "Credit Agreement")
----------------------------------------------------------
Reference is made to the Credit Agreement as defined above;
capitalized terms used herein and not otherwise defined herein shall
have the meanings given to such terms in the Credit Agreement. The
undersigned hereby agrees that, upon delivery hereof to the
Administrative Agent referred to above, the undersigned Subsidiary
shall be and become a Guarantor for all purposes of the Credit
Agreement as fully and to the same extent as if it were an original
signatory thereto and, without limiting the foregoing, shall be deemed
to have made on the date hereof the representations and warranties set
forth in Article 3 of the Credit Agreement.
[Name of Subsidiary]
By: _______________________
Name:
Title:
Dated: ____________________
Notice Address:
Attention:
Telephone:
Telecopy:
Schedule 4.05
-------------
SCHEDULE OF EXISTING INDEBTEDNESS
[NONE]
Schedule 4.06
-------------
SCHEDULE OF EXISTING GUARANTIES
[NONE]
Schedule 4.07
-------------
SCHEDULE OF EXISTING LIENS
[NONE]
Schedule 4.11
-------------
SCHEDULE OF PERMITTED RESTRICTIVE COVENANTS
[NONE]
Schedule 4.13
-------------
SCHEDULE OF EXISTING INVESTMENTS
[NONE]
Schedule 4.15
-------------
SCHEDULE OF EXISTING BENEFIT PLANS
[NONE]
Schedule 5.02(a)
----------------
SCHEDULE OF HISTORICAL FINANCIAL INFORMATION
Schedule 10.10(a)
-----------------
NOTICE OF ASSIGNMENT
[Name and address
of each Borrower in accordance
with Section 10.01]
[Name and address
of each Guarantor in accordance
with Section 10.01]
[Name and address
of Administrative Agent in accordance with
Section 10.01]
Date:
Ladies and Gentlemen:
Reference is made to the Credit Agreement, dated as of December 17,
1997, among Xpedite Systems, Inc. and Xpedite Systems Holdings (UK) Limited, as
Borrowers, the Guarantors party thereto, the Banks listed on the signature pages
thereof, NationsBank, N.A., as Documentation Agent, and The Bank of New York, as
Administrative Agent (the "Credit Agreement"). The undersigned hereby give
notice pursuant to Section 10.10(a) of the Credit Agreement that [name of
Assignor] [(the "Assignor")]/1/ has made the following assignment to [name of
Assignee] [(the "Assignee")]/2/:
Rights and Obligations
Assigned:
Effective Date of
Assignment:
[The Assignee's Lending Offices and address for notices are as
follows:
Domestic Lending Office:
Eurocurrency Lending Office:
Notice Address:]/3/
[The Assignor hereby requests that [each Borrower] [each Guarantor]
[and the Administrative Agent] consent to the assignment described above by
signing a copy of this letter in the space provided below and returning it to
the Assignor. Such consent shall release the Assignor from all of the
obligations described above as having been assigned to the Assignee.]/4/
[NAME OF ASSIGNOR]
By ______________________________
Name:
Title:
[NAME OF ASSIGNEE]
By ______________________________
Name:
Title:
Assignment and release consented to:/4/
XPEDITE SYSTEMS, INC.
By _____________________________
Name:
Title:
XPEDITE SYSTEMS HOLDINGS (UK) LIMITED
By _____________________________
Name:
Title:
2
[GUARANTORS]
By _______________________________
Name:
Title:
THE BANK OF NEW YORK,
as Administrative Agent
By _______________________________
Name:
Title:
__________
1. Include definition if Footnote 4 material is to be included.
2. Include definition if Footnote 3 or Footnote 4 material is to be included.
3. Omit if the Assignee is a Bank.
4. Include the appropriate portion of the bracketed provision if (i) the
Assignor desires to be released from the assigned obligations, (ii) the
consent of the Borrowers and/or the Guarantors and/or the Administrative
Agent is required for such release and (iii) the Assignor has not otherwise
obtained such consents.
3
Schedule 11.01(a)
-----------------
INITIAL GUARANTORS
------------------
Schedule 11.01(b)
-----------------
PERMITTED RESTRUCTURING TRANSACTIONS
------------------------------------
Schedule 11.01(c)
-----------------
CALCULATION OF ADDITIONAL STERLING COST
---------------------------------------
1 The Additional Sterling Cost for any period shall (subject to paragraph 5
below) be calculated in accordance with the following formula:
BY + L(Y-X) + S(Y-Z) per cent per annum
--------------------
100 (B+S)
where on the day of application of the formula:
B is the percentage of the Administrative Agent's eligible liabilities
which the Bank of England then requires the Administrative Agent to
hold on a non-interest-bearing deposit account in accordance with its
cash ratio requirements;
Y is the rate at which Sterling deposits are offered by the
Administrative Agent to leading banks in the London Interbank Market
at or about 11 a.m. on that day for the relevant period;
L is the percentage of eligible liabilities which (as a result of the
requirements of the Bank of England) the Administrative Agent
maintains as secured money with members of the London Discount Market
Association or in certain marketable or callable securities approved
by the Bank of England, which percentage shall (in the absence of
evidence that any other figure is appropriate) be conclusively
presumeed to be 5 per cent;
X is the rate at which secured Sterling investments may be placed by the
Administrative Agent with members of the London Discount Market
Association at or about 11 a.m. on that day for the relevant period
or, if greater, the rate at which Sterling bills of exchange (of a
tenor equal to the duration of the relevant period) eligible for
rediscounting at the Bank of England can be discounted in the London
Discount Market at or about 11 a.m. on that day;
S is the percentage of the Administrative Agent's eligible liabilities
which the Bank of England requires the Administrative Agent to place
as a special deposit; and
Z is the interest rate expressed as a percentage per annum allowed by
the Bank of England on special deposits.
2 For the purposes of this schedule 5:
(a) "eligible liabilities" and "special deposits" have the meanings given
to them at the time of application of the formula by the Bank of
England; and
(b) "relevant period" in relation to each period for which Additional
Sterling Cost falls to be calculated means:
(i) if it is 3 months or less, that period; or
(ii) if it is more than 3 months, 3 months.
3 In the application of the formula, B, Y, L, X, S and Z are included in the
formula as figures and not as percentages, e.g. if B = 0.5 per cent and Y =
15 per cent BY is calculated as 0.5 x 15.
4 The formula shall be applied on the first day of each relevant period.
Each amount shall be rounded up to the nearest four decimal places.
5 If the Administrative Agent (acting reasonably) determines that a change in
circumstances has rendered, or will render, the formula inappropriate, the
Administrative Agent (after consultation with the Banks) shall notify the
Borrowers of the manner in which the Additional Cost will subsequently be
calculated. The manner of calculation so notified by the Administrative
Agent shall, in the absence of manifest error, be binding on all parties.
EXHIBIT A
[XPEDITE SYSTEMS, INC.]/[XPEDITE SYSTEMS HOLDINGS (UK) LIMITED]
NOTE
_______________, 19__
FOR VALUE RECEIVED, [NAME OF BORROWER] (the "Borrower") hereby promises to
pay to the order of __________ (the "Bank"), for the account of its applicable
Lending Office, the unpaid principal amount of each Loan made by such Bank to
the Borrower under the Credit Agreement referred to below, on the dates and in
the amounts specified in Section 1.04 of such Credit Agreement, and to pay
interest on the principal amount of each such Loan on the dates and at the rates
specified in Section 1.03 of such Credit Agreement. All payments due the Bank
hereunder shall be made to the Bank at the place, in the type of money and funds
and in the manner specified in Section 1.11 of such Credit Agreement.
Each holder hereof is authorized to endorse on the grid attached hereto, or
on a continuation thereof, each Loan of the Bank and each payment, with respect
thereto, provided that the failure of the Bank to make any such endorsement
shall not affect the obligations of the Borrower hereunder or under such Credit
Agreement.
Presentment, demand, protest, notice of dishonor and notice of intent to
accelerate are hereby waived by the undersigned.
This Note evidences Loans made under, and is entitled to the benefits of,
the Credit Agreement, dated as of December 17, 1997, among the Borrower,
[Xpedite Systems, Inc.][Xpedite Systems Holdings (UK) Limited], the Guarantors
party thereto, the Banks listed on the signature pages thereof, NationsBank,
N.A., as Documentation Agent, and The Bank of New York, as Administrative Agent,
as the same may be amended from time to time. Reference is made to such Credit
Agreement, as so amended, for provisions relating to the prepayment and the
acceleration of the maturity hereof.
This Note shall, pursuant to New York General Obligations Law Section 5-
1401, be governed by the law of the State of New York.
[XPEDITE SYSTEMS, INC.]
[XPEDITE SYSTEMS HOLDINGS (UK) LIMITED]
By ____________________________________
Name:
Title:
NOTE GRID
________________________________________________________________________________
Amount of Amount of
Notation
Date Loan Principal Repaid
---- ---- ----------------
Made By
-------
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
EXHIBIT B
================================================================================
SECURITY AGREEMENT
Dated as of ______________, 199_
Between
[PLEDGOR]
and
THE BANK OF NEW YORK,
as Secured Party
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE I
SECURITY INTEREST
Section 1.01 Grant of Security Interest............................................................ 1
Section 1.02 Validity and Priority of Security Interest; Authorized Action......................... 1
Section 1.03 Pledgor Remains Obligated; Secured Party and Other Principals Not Obligated.......... 2
Section 1.04 Proceeds of Collateral................................................................ 2
Section 1.05 Limitation of Pledgor's Obligations................................................... 2
ARTICLE II
CERTAIN REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 2.01 Collateral............................................................................ 3
Section 2.02 Consent to Pledge; Control Letters.................................................... 5
Section 2.03 New Accounts.......................................................................... 5
Section 2.04 Change of Jurisdiction................................................................ 5
Section 2.05 Jurisdictions of Securities and Commodity Intermediaries.............................. 6
Section 2.06 Requirement of Materially Adverse Effect.............................................. 6
ARTICLE III
EVENT OF DEFAULT
Section 3.01 Application of Proceeds............................................................... 6
Section 3.02 ...................................................................................... 7
(a) Use of Premises and Intellectual Property...................................... 7
(b) Directors, Officers and Employees.............................................. 7
(c) Power of Sale.................................................................. 7
(d) Foreclosure.................................................................... 7
(e) Receiver....................................................................... 7
(f) Collection of Collateral Proceeds by Pledgor................................... 7
(g) Notification................................................................... 8
(h) Secured Party's Rights with Respect to Proceeds and Other Collateral........... 8
(i) Enforcement by Secured Party................................................... 8
(j) Adjustments.................................................................... 8
(k) Warehousing.................................................................... 8
i
Section 3.03 Securities and Instrument Collateral.................................................... 8
(a) Registration and Indemnification.................................................. 8
(b) Restricted Offering Dispositions.................................................. 9
ARTICLE IV
MISCELLANEOUS
Section 4.01 Expenses of Pledgor's Agreements and Duties............................................. 9
Section 4.02 Secured Party's Right to Perform on Pledgor's Behalf.................................... 9
Section 4.03 Secured Party's Right to Use Agents and to Act in Name of Pledgor....................... 9
Section 4.04 No Interference, Compensation or Expense................................................ 9
Section 4.05 Limitation of Obligations with Respect to Collateral.................................... 9
Section 4.06 Rights of Secured Party under Uniform Commercial Code and Applicable Law................ 10
Section 4.07 Waivers of Rights Inhibiting Enforcement................................................ 10
Section 4.08 Power of Attorney....................................................................... 11
Section 4.09 Termination of Security Interest........................................................ 11
Section 4.10 Notices and Deliveries.................................................................. 11
(a) Notices and Materials Other than Collateral....................................... 11
(b) Collateral........................................................................ 13
Section 4.11 Governing Law........................................................................... 13
Section 4.12 LIMITATION OF LIABILITY................................................................. 13
Section 4.13 Counterparts............................................................................ 14
Section 4.14 Entire Agreement........................................................................ 14
Section 4.15 Successors and Assigns.................................................................. 14
Section 4.16 Delivery of Opinions Authorized......................................................... 14
ARTICLE V
INTERPRETATION
Section 5.01 Definitional Provisions................................................................. 14
(a) Certain Terms Defined by Reference................................................ 14
(b) Other Defined Terms............................................................... 14
Section 5.02 Other Interpretive Provisions........................................................... 20
Section 5.03 Representations and Warranties.......................................................... 21
Section 5.04 Captions................................................................................ 21
Schedule 1.02 Schedule of Required Action
Schedule 1.02(a) Form of UCC-1 Financing Statement
Schedule 1.02(c) Form of Financial Intermediary Agreement
Schedule 1.02(d)-A Memorandum of Security Agreement; Patents
Schedule 1.02(d)-B Memorandum of Security Agreement; Trademarks
ii
Schedule 1.02(d)-C Memorandum of Security Agreement; Copyrights
Schedule 1.02A Schedule of Permitted Liens
Schedule 2.01(c)(v) Schedule of Initial Securities and Instrument Collateral
Schedule 2.01(c)(vi) Form of Security Agreement Questionnaire
Schedule 5.01(a)-1 Securities Account Control Agreement
Schedule 5.01(a)-2 Commodity Account Control Agreement
iii
SECURITY AGREEMENT
Dated as of ______________, 199_
In consideration of the execution and delivery of the Credit Agreement,
dated as of December 17, 1997, by the Banks listed on the signature pages
thereof and The Bank of New York, as Administrative Agent, [PLEDGOR], a
[JURISDICTION] corporation, hereby agrees with THE BANK OF NEW YORK, as Secured
Party, as follows (with certain terms used herein being defined in Article 5):
ARTICLE I
SECURITY INTEREST
-----------------
Section 1.01 Grant of Security Interest. To secure the payment, observance
--------------------------
and performance of the Secured Obligations, the Pledgor hereby mortgages,
pledges and assigns the Collateral to the Secured Party, and grants to the
Secured Party a continuing security interest in, and a continuing lien upon, the
Collateral.
Section 1.02 Validity and Priority of Security Interest; Authorized
------------------------------------------------------
Action. (a) The Pledgor agrees that the Security Interest shall, and that the
------
Pledgor shall take all action necessary or desirable, or that the Secured Party
may reasonably request, including the actions specified on Schedule 1.02, (a) to
-------------
ensure that the Security Interest shall, at all times be valid, perfected and
enforceable against the Pledgor and all third parties, in accordance with the
terms hereof, as security for the Secured Obligations, and that neither the
Collateral, including, if the Collateral includes any securities accounts or
commodity accounts, any financial asset or commodity contract carried therein,
nor, if the Collateral includes any securities entitlements, any financial asset
subject thereto, shall at any time be subject to (x) control by any Person other
than the Secured Party or (y) any Lien, other than a Permitted Lien, that is
prior to, on a parity with or junior to such Security Interest, except that,
unless an Event of Default exists, this Section 1.02, shall not require the
continuation of the perfection of the Security Interest in Collateral that the
Pledgor is entitled to, and does, receive or retain pursuant to Section 1.04,
(b) to protect and preserve the Collateral and (c) to protect and preserve, and
to enable the exercise or enforcement of, the rights of the Secured Party
therein and hereunder and under the other Collateral Documents.
(b) (i) The Secured Party is hereby authorized to file one or more
financing or continuation statements or amendments thereto with respect to the
Collateral without the signature of or in the name of the Pledgor. A carbon,
photographic or other reproduction of this Agreement or of any financing
statement filed in connection with this Agreement shall be sufficient as a
financing statement.
(ii) Each (A) issuer of an uncertificated security registered in
the name of the Pledgor, (B) each securities intermediary maintaining a security
account for the Pledgor and (C) each commodity intermediary maintaining a
commodity account for the Pledgor, in each case to
the extent it constitutes Collateral, is hereby authorized and directed by the
Pledgor to disclose to the Secured Party, at any time and from time to time, all
agreements pursuant to which any such issuer, securities intermediary or
commodity intermediary has agreed, without further consent by the Pledgor, to
(1) comply with, (aa) in the case of any such issuer, instructions with respect
to such a security originated by a Person other than the Pledgor and (bb) in the
case of any such securities intermediary, entitlement orders originated by a
Person other than the Pledgor and (2) apply, in the case of any such commodity
intermediary, any value distributed on account of any commodity contract carried
in such commodity account as directed by the Secured Party.
Section 1.03 Pledgor Remains Obligated; Secured Party and Other Principals
-------------------------------------------------------------
Not Obligated. The grant by the Pledgor to the Secured Party of the Security
-------------
Interest shall not (a) relieve the Pledgor of any Liability to any Person under
or in respect of any of the Collateral or (b) impose on the Secured Party or the
other Principals any such Liability or any Liability for any act or omission on
the part of the Pledgor relative thereto.
Section 1.04 Proceeds of Collateral. (a) Except during an Event of
----------------------
Default, the Pledgor shall be entitled to receive and retain all Account
Proceeds, Ordinary Distributions and proceeds of dispositions of Collateral not
prohibited under Section 4.09 of the Credit Agreement.
(b) Subject to the Pledgor's rights under Section 1.04(a), the Secured
Party shall be entitled to receive and retain all proceeds of Collateral and all
Distribution Collateral. The Secured Party is hereby irrevocably authorized,
upon the occurrence and continuation of an Event of Default, either in the name
and on behalf of the Pledgor or in its own name, to endorse and deposit, or
cause to be deposited, for collection, present, draw upon or under, or otherwise
take action to realize upon, all instruments, chattel paper, securities, letters
of credit and documents constituting part of the Collateral for the purpose of
holding and disposing of the proceeds thereof in accordance with the terms
hereof.
Section 1.05 Limitation of Pledgor's Obligations. It is the intention of
-----------------------------------
the Pledgor and the Secured Party that the obligations of the Pledgor under this
Agreement shall be in, but not in excess of, the maximum amount permitted by
Applicable Law. To that end, but only to the extent such obligations would
otherwise be avoidable, the obligations of the Pledgor under this Agreement
shall be limited to the maximum amount that, after giving effect to the
incurrence thereof, would not render the Pledgor insolvent or unable to pay its
debts as they mature or leave the Pledgor with an unreasonably small capital.
The need for any such limitation shall be determined, and any such needed
limitation shall be effective, at the time or times that the Pledgor is deemed,
under Applicable Law, to incur obligations thereunder. This Section 1.05 is
intended solely to preserve the rights of the Secured Party under this Agreement
to the maximum extent permitted by Applicable Law, and neither the Pledgor nor
any other Person shall have any right under this Section 1.05 that it would not
otherwise have under Applicable Law. For the purposes of this Section 1.05,
"insolvency", "unreasonably small capital" and "inability to pay debts as they
mature" shall be determined in accordance with Applicable Law.
2
ARTICLE II
CERTAIN REPRESENTATIONS, WARRANTIES AND COVENANTS
-------------------------------------------------
The Pledgor represents, warrants and covenants as follows:
Section 2.01 Collateral. (a) Except as permitted under the Credit
----------
Agreement, the Pledgor shall: (i) be the sole owner of each and every item of
Collateral free from any right, title or interest of any third Person (other
than the holder of a Permitted Lien), (ii) defend the Collateral against the
claims and demands of all third Persons (other than holders of Permitted Liens),
(iii) in the case of tangible property constituting part of the Collateral, (A)
properly maintain such property and keep it in good order and repair, subject to
normal wear and tear, and (B) keep such property fully insured with responsible
companies of recognized national standing or otherwise acceptable to the Secured
Party against such risks as such Collateral may be subject to under policies
containing loss payable clauses naming the Secured Party as loss payee, (iv)
comply with (A) all Applicable Laws relating to or affecting the Collateral and
(B) the terms of all deeds and leases, mortgages and other Contracts relating to
premises where any Collateral is located and (C) all license and franchise
agreements and other Contracts pertaining to any of the Collateral, (v) duly
fulfill all obligations on its part to be fulfilled under or in connection with
all Receivables and General Intangibles and do nothing intentionally to impair
the security interests of the Secured Party therein, (vi) subject, during an
Event of Default, to the Secured Party's rights under Sections 3.02(f) and
3.02(i) hereof, endeavor to collect from the Collateral Debtor of each
Collateral Obligation when due all amounts owing thereunder, except that this
clause (vi) shall not require the Pledgor to take any action not in accordance
with its customary collection practices, (vii) maintain its chief executive
office and, if different from its chief executive office, each office where the
books and records relating to any Receivables or General Intangibles are kept,
only at and shall keep all tangible property constituting part of the Collateral
only at or in transit to, (A) in the case of such chief executive office or
other office, the location thereof specified in, and in the case of any such
tangible property constituting part of the Collateral, any of the respective
locations therefor specified in, the Questionnaire, or (B) in any case, a
location of which the Secured Party has received not less than 30 days prior
written notice and which is located within one of the States of the United
States, (viii) give the Secured Party (A) prompt notice of (1) the location of
each new place of business opened by the Pledgor and (2) each new location of
any Collateral, (ix) deliver to the Secured Party all certificates and
instruments evidencing Securities and Instrument Collateral, duly endorsed in
favor of the Secured Party or accompanied by stock powers duly executed in
blank, in either case as reasonably requested by the Secured Party and (x)
provide the Secured Party with such other information as to the Collateral as
the Secured Party may reasonably request.
(b) Except as permitted by the Credit Agreement, the Pledgor shall not
(i) sell, lease, transfer or otherwise dispose of any Collateral, including, if
the Collateral includes any securities accounts or commodity accounts, any
financial asset or commodity contract carried therein, or, if the Collateral
includes any security entitlements, any financial asset subject thereto, or any
interest therein or thereunder, including any license or sublicense, except for,
in the case of General Intangibles, the grant of any license or sublicense
therein in the ordinary course of business; or in the case of Inventory, sales
of Inventory in the ordinary course of business; or in the case of Machinery and
Equipment, sales of any thereof that Pledgor intends to no longer use
3
or is no longer useful in the operation of the Pledgor's business, (ii) rescind
or cancel any obligation evidenced by any Receivable or General Intangible or
modify any term thereof or make any adjustment with respect thereto or extend or
renew the same, or compromise or settle any dispute, claim, suit or legal
proceeding relating thereto, except in the ordinary course of business and
subject, during an Event of Default, to the rights of the Secured Party under
Sections 3.02(i) and 3.02(j), (iii) (A) enter into any Contract providing for
any deduction from any Receivable that is an Account except for agreements made
in the ordinary course of business, or (B) subject to the penultimate sentence
of Section 2.01(d), cancel or terminate, or amend, modify or waive in any manner
materially adverse to the holder thereof any provision of, any Securities and
Instrument Collateral that constitutes Indebtedness, or (C) subject to the
penultimate sentence of Section 2.01(d), enter into or permit to exist any
restriction with respect to any rights under any Securities and Instrument
Collateral, or any other such asset referred to in clause (B), other than
restrictions arising under the Loan Documents or the Premiere Merger Agreement,
(iv) without giving at least 30 days' prior written notice to the Secured Party,
(A) change its name, identity or corporate structure or (B) do business under
any name, trade name or trade style not listed on the Questionnaire, or (v)
agree with any securities intermediary that such securities intermediary may
grant any Lien on any financial asset with respect to which the Pledgor is an
entitlement holder.
(c) (i) Each Receivable that is an Account (A) is and shall at all
times represent the legal, valid and binding obligation of its Collateral Debtor
and, subject to clause (B)(1), is and shall at all times be enforceable in
accordance with its terms, (B) shall at no time be subject to (1) any defense,
setoff or counterclaim other than one arising in the ordinary course of
business, (2) any agreement prohibiting assignment or requiring notice of or
consent to assignment, or (3) any stamp or other Tax, (C) shall comply with all
Applicable Laws, and (D) shall be genuine and in all respects what it purports
to be and shall arise out of a bona fide transaction.
(ii) All Inventory (A) is and at all times shall be in good
condition, (B) meets and at all times shall meet all governmental standards
applicable thereto or to its manufacture, use or sale, and (C) is and shall at
all times be currently either usable or saleable in the ordinary course of the
Pledgor's business.
(iii) All Machinery and Equipment (A) is and shall at all times
be in good operating condition and repair, normal wear and tear excepted, and
(B) complies and is operated and shall at all times comply and be operated in
compliance with all Applicable Laws.
(iv) All General Intangibles that constitute Intellectual
Property shall at all times be subsisting, valid and enforceable against third
Persons.
(v) (A) All Securities and Instrument Collateral is and at all
times shall be duly authorized, validly issued, fully paid and non-assessable,
and (B) as of the Agreement Date, the shares of capital stock or other units of
ownership interests that constitute Securities and Instrument Collateral listed
on Schedule 2.01(c)(v) represent the respective percentages of the outstanding
shares of such capital stock or other units of ownership interests that are set
forth on such Schedule.
4
(vi) The Questionnaire is, as of the Agreement Date, complete
and correct in all material respects.
(d) The Secured Party shall have the right, during an Event of
Default, (i) in the name of the Secured Party, in the name and on the stationery
of the Pledgor or any such other name as the Secured Party may select, to verify
the validity, amount or any other matter relating to any Receivable or General
Intangible by mail, telegram, telephone or any other means, (ii) after a notice
to the Pledgor that it intends to exercise its rights under this Section
2.01(d)(ii), to transfer into or register in its name or the name of its nominee
any or all of the Securities and Instrument Collateral and, in its own or the
Pledgor's name, to exercise any and all rights, powers and privileges with
respect to the Securities and Instrument Collateral, and with the same force and
effect, as could the Pledgor. Unless and until the Secured Party exercises its
rights under Section 2.01(d)(ii), the Pledgor may, with respect to any of the
Securities and Instrument Collateral, vote and give consents, ratifications and
waivers with respect thereto, except to the extent that any such action would
(x) be for a purpose that would constitute or result in an Event of Default or
(y) in the reasonable judgment of the Required Banks, detract from the value
thereof as Collateral, and from time to time, upon request from the Pledgor, the
Secured Party shall deliver to the Pledgor suitable proxies confirming the right
of the Pledgor to cast such votes, consents, ratifications and waivers. Each
such request from the Pledgor shall constitute a Representation and Warranty by
the Pledgor hereunder that no Event of Default exists or would result therefrom.
Section 2.02 Consent to Pledge; Control Letters. (a) (i) As of the
----------------------------------
Agreement Date, the Pledgor has not agreed with any securities intermediary that
such securities intermediary may grant any Lien on any financial asset with
respect to which the Pledgor is an entitlement holder.
(ii) No financial asset with respect to which the Pledgor is
the entitlement holder is subject to any Lien other than the Security Interest.
(b) As of the Agreement Date, the Pledgor is not a party to any
Control Letter or similar agreement relating to any investment property that
constitutes Collateral, except for those to which the Secured Party is a party.
Section 2.03 New Accounts. The Pledgor shall give to the Secured Party not
------------
less than 15 days' prior notice of the opening of each new securities account or
commodity account that itself will constitute Collateral, or to which financial
assets are to be credited (or with respect to which there will be security
entitlements), or in which commodity contracts are to be carried, that
constitute or are to constitute Collateral, specifying, as appropriate, the
securities intermediary or the commodity intermediary maintaining such account,
the account number and the jurisdiction of each such Person, determined in
accordance with, in the case of a securities intermediary, Section 8-110(e) of
the Uniform Commercial Code and, in the case of a commodity intermediary,
Section 9-103(6)(e) of the Uniform Commercial Code.
Section 2.04 Change of Jurisdiction. Promptly upon its obtaining knowledge
----------------------
thereof, the Pledgor shall give to the Secured Party notice of any change of the
jurisdiction of a securities intermediary or a commodity intermediary
maintaining a securities account or commodity account that itself constitutes
Collateral, or to which financial assets are credited (or with respect
5
to which there are security entitlements), or in which commodity contracts are
carried, that constitute Collateral, specifying such new jurisdiction.
Section 2.05 Jurisdictions of Securities and Commodity Intermediaries.
--------------------------------------------------------
(a) The Pledgor shall not, after the Agreement Date, enter into any Contract
with any securities intermediary or with any commodity intermediary with respect
to any investment property that is or is to be Collateral, unless such Contract
or another agreement specifies effectively with respect to such investment
property that such securities intermediary's or commodity intermediary's
jurisdiction shall be the State of New York.
(b) The Pledgor shall use its best effort to cause each Contract with
each securities intermediary or commodities intermediary in effect on the
Agreement Date that relates to investment property that is or is to be
Collateral, and that does not so provide, to be amended so that thereafter such
Contract shall specify effectively with respect to such investment property that
such securities intermediary's or commodity intermediary's jurisdiction shall be
the State of New York. If in any case such an amendment shall not be effective
within 30 days of the Agreement Date, the Pledgor shall terminate such Contract,
and enter into a new Contract relating to such investment property with another
securities intermediary or commodity intermediary, as the case may be, which
does effectively so provide.
Section 2.06 Requirement of Materially Adverse Effect. Clauses (i), (ii),
----------------------------------------
(iii), (iv), (v), (vi) and (viii) of Section 2.01(a), clauses (i), (ii), (iii)
and (iv)(B) of Section 2.01(b), and clauses (i), (ii), (iii) and (iv) of Section
2.01(c), shall not apply in any circumstances where noncompliance, together with
all other noncompliances with this Agreement will not have a Materially Adverse
Effect on the Collateral taken as a whole.
ARTICLE III
EVENT OF DEFAULT
----------------
During an Event of Default, and in each such case:
A. Proceeds.
--------
Section 3.01 Application of Proceeds. All cash proceeds received by the
-----------------------
Secured Party upon any sale of, collection of, or other realization upon, all or
any part of the Collateral and all cash held by the Secured Party as Collateral
shall, subject to the Secured Party's right to continue to hold the same as cash
Collateral, be applied as follows:
First: To the payment of all out-of-pocket costs and expenses incurred in
connection with the sale of or other realization upon Collateral, including
attorneys' fees and disbursements;
Second: To the payment of the Secured Obligations owing to the Secured
Party in such order as the Secured Party may elect (with the Pledgor remaining
liable for any deficiency);
6
Third: To the payment of the other Secured Obligations ratably in
accordance with the amounts owed to each holder thereof and in such order as the
Required Banks may elect (with the Pledgor remaining liable for any deficiency);
and
Fourth: To the extent of the balance (if any) of such proceeds, to the
payment to the Pledgor, subject to Applicable Law and to any duty to pay such
balance to the holder of any subordinate Lien in the Collateral.
B. Remedies.
--------
Section 3.02 (a) Use of Premises and Intellectual Property . The Secured
-----------------------------------------
Party may (i) enter the Pledgor's premises and, until the Secured Party
completes the enforcement of its rights in the Collateral, take exclusive
possession of such premises or place custodians in exclusive control thereof,
remain on such premises and use the same and all machinery and equipment for the
purpose of (A) completing any work in process, preparing Collateral for
disposition and disposing thereof and (B) collecting Collateral Obligations, and
(ii) in the exercise of its rights under this Agreement, use the Pledgor's
rights in, to and under all patents, trademarks and copyrights and licenses and
sublicenses thereof, to the extent of the rights of the Pledgor therein, and the
Pledgor hereby grants a license to the Secured Party for such purpose, subject
to the consent, if required, of any licensor, franchisor or other third Person.
(b) Directors, Officers and Employees. The Secured Party may
---------------------------------
retain the Pledgor's directors, officers and employees, in each case upon such
terms as the Secured Party and any such Person may agree, notwithstanding the
provisions of any employment, confidentiality or non-disclosure agreement
between any such Person and the Pledgors, and the Pledgor hereby waives its
rights under any such agreement and consents to each such retention.
(c) Power of Sale. The Secured Party (i) may sell the Collateral
-------------
in one or more parcels at public or private sale, at any of its offices or
elsewhere, for cash, on credit or for future delivery, and at such price or
prices and upon such other terms as it may deem commercially reasonable, (ii)
shall not be obligated to make any sale of Collateral regardless of notice of
sale having been given, and (iii) may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was so
adjourned.
(d) Foreclosure. The Secured Party, instead of exercising the
-----------
power of sale conferred upon it by Section 3.02(c) and Applicable Law, may
proceed by a suit or suits at law or in equity to foreclose the Security
Interest and sell the Collateral, or any portion thereof, under a judgment or a
decree of a court or courts of competent jurisdiction.
(e) Receiver. The Secured Party may obtain the appointment of a
--------
receiver of the Collateral and the Pledgor consents to and waives any right to
notice of such appointment.
(f) Collection of Collateral Proceeds by Pledgor. The Secured
--------------------------------------------
Party may, by notice to the Pledgor, direct it to, and thereupon the Pledgor
shall, receive all proceeds of Collateral in trust for the Secured Party, not
commingle the same with any other property or funds of the Pledgor and, unless
the Secured Party shall have otherwise instructed the Pledgor, deliver or cause
to be delivered all such proceeds in the exact form received, together with any
7
necessary endorsements, to the Secured Party or to such Person or Persons as the
Secured Party may designate.
(g) Notification. The Secured Party may notify, or request the
------------
Pledgor to notify, in writing or otherwise, each Collateral Debtor to make
payment directly to the Secured Party. If, notwithstanding the giving of any
notice, any such Person shall make payments to the Pledgor, the Pledgor shall
hold all such payments it receives in trust for the Secured Party, without
commingling the same with other funds or property of the Pledgor or any other
Person, and shall deliver the same to the Secured Party immediately upon receipt
by the Pledgor in the identical form received, together with any necessary
endorsements.
(h) Secured Party's Rights with Respect to Proceeds and Other
---------------------------------------------------------
Collateral. All payments and other deliveries received by or for the account of
----------
the Secured Party from time to time pursuant to Section 3.02(f) or (g), together
with the proceeds of all other Collateral from time to time held by or for the
account of the Secured Party may, at the election of the Secured Party, (i) be
or continue to be held by the Secured Party, or any Person designated by the
Secured Party to receive or hold the same, as Collateral, (ii) be applied as
provided in Section 3.01 or (iii) be disposed of in accordance with the
provisions of this Agreement and Applicable Law.
(i) Enforcement by Secured Party. The Secured Party may, with
----------------------------
only such notice to the Pledgor as is required by, and not waivable under,
Applicable Law and at such time or times as the Secured Party in its sole
discretion may determine, exercise any or all of the Pledgor's rights in, to and
under, or in any way connected with or related to, any or all of the Collateral.
(j) Adjustments. The Secured Party may settle or adjust disputes
-----------
and claims directly with Collateral Debtors for amounts and on terms that the
Secured Party considers advisable and in all such cases only the net amounts
received by the Secured Party in payment of such amounts, after deduction of
out-of-pocket costs and expenses of collection, including reasonable attorney's
fees, shall be subject to the other provisions of this Agreement. The Pledgor
shall have no further right under Section 2.01(b) or otherwise to make any such
settlements or adjustments or to accept any returns of merchandise.
(k) Warehousing. The Secured Party may cause any or all of the
-----------
Inventory and the Machinery and Equipment to be placed in a public or field
warehouse.
Section 3.03 Securities and Instrument Collateral. (a) Registration and
------------------------------------ ----------------
Indemnification. If the Secured Party elects to sell or otherwise dispose of any
---------------
Securities and Instrument Collateral, the Pledgor shall, if it controls the
issuer or if it otherwise has the right to effect such registration, and if the
Secured Party deems such registration to be desirable, (i) cause the same to be
registered under the Securities Act of 1933 and take all other action, including
complying with the "blue sky" or securities laws of the several States of the
United States and delivering to the Secured Party appropriate quantities of
prospectuses, necessary or appropriate so as to permit the public sale or other
disposition thereof by the Secured Party in such jurisdictions as the Secured
Party may select, and (ii) indemnify, in the form then customary, all Persons
that are underwriters (whether statutory or otherwise) and all Affiliates of all
such Persons, in connection with such sale or disposition, such indemnity, to
the extent applicable to
8
the Principals, to be in addition to and supplementary of (and not to be
construed as being in derogation of) that afforded the Principals under Article
8 and Section 10.02 of the Credit Agreement.
(b) Restricted Offering Dispositions. Whether or not the Pledgor
--------------------------------
controls the issuer or otherwise has the right to effect the registrations and
compliances referred to in Section 3.03(a) and as an alternative to its rights
thereunder, in connection with any sale of any of the Securities and Instrument
Collateral, the Secured Party may, at its election, comply with any limitation
or restriction (including any restrictions on the number of prospective bidders
and purchasers or any requirement that they have certain qualifications or that
they represent and agree that they are purchasing for their own account for
investment and not with a view to the distribution or resale of such Securities
and Investment Collateral) as it may be advised by counsel is necessary in order
to avoid any violation of Applicable Law or to obtain any Governmental Approval,
and such compliance shall not result in such sale being considered or deemed not
to have been made in a commercially reasonable manner, nor shall any Principal
be liable or accountable to the Pledgor for any discount allowed by reason of
the fact that such Securities and Instrument Collateral is sold in compliance
with any such limitation or restriction.
ARTICLE IV
MISCELLANEOUS
-------------
Section 4.01 Expenses of Pledgor's Agreements and Duties. The terms,
-------------------------------------------
conditions, covenants and agreements to be observed or performed by the Pledgor
under the Collateral Documents shall be observed or performed by it at its sole
cost and expense.
Section 4.02 Secured Party's Right to Perform on Pledgor's Behalf. If the
----------------------------------------------------
Pledgor shall fail to observe or perform any of the terms, conditions, covenants
and agreements to be observed or performed by it under the Collateral Documents,
the Secured Party, upon five business days notice to the Pledgor specifying the
action to be taken, may (but shall not be obligated to) do the same or cause it
to be done or performed or observed, either in its name or in the name and on
behalf of the Pledgor, and the Pledgor hereby authorizes the Secured Party so to
do.
Section 4.03 Secured Party's Right to Use Agents and to Act in Name of
---------------------------------------------------------
Pledgor. The Secured Party may exercise its rights and remedies under the
-------
Collateral Documents through an agent or other designee and, in the exercise
thereof, the Secured Party or any such other Person may act in its own name or
in the name and on behalf of the Pledgor.
Section 4.04 No Interference, Compensation or Expense. The Secured Party
----------------------------------------
may exercise its rights and remedies under the Collateral Documents (a) without
resistance or interference by the Pledgor, (b) without payment of any rent,
license fee or compensation of any kind to the Pledgor and (c) during an Event
of Default, for the account, and at the expense, of the Pledgor.
Section 4.05 Limitation of Obligations with Respect to Collateral. (a)
----------------------------------------------------
Neither the Secured Party nor any other Principal shall have any obligation to
protect or preserve any Collateral or to preserve rights pertaining thereto
other than the obligation to use reasonable care
9
in the custody and preservation of any Collateral in its actual possession. The
Secured Party shall be deemed to have exercised reasonable care in the custody
and preservation of any Collateral in its possession if such Collateral is
accorded treatment substantially equal to that which the Secured Party accords
its own property. The Secured Party shall be relieved of all responsibility for
any Collateral in its possession upon surrendering it, or tendering surrender of
it, to the Pledgor.
(b) Nothing contained in the Collateral Documents shall be construed
as requiring or obligating the Secured Party or any other Principal, and neither
the Secured Party nor any other Principal shall be required or obligated, to (i)
make any demand, or to make any inquiry as to the nature or sufficiency of any
payment received by it, or to present or file any claim or notice or take any
action, with respect to any Collateral Obligation or any other Collateral or the
monies due or to become due thereunder or in connection therewith, (ii)
ascertain or take action with respect to calls, conversions, exchanges,
maturities, tenders, offers or other matters relating to any Collateral, whether
or not the Secured Party or any other Principal has or is deemed to have
knowledge or notice thereof, (iii) take any necessary steps to preserve rights
against any prior parties with respect to any Collateral or (iv) notify the
Pledgor of any decline in the value of any Collateral.
Section 4.06 Rights of Secured Party under Uniform Commercial Code and
---------------------------------------------------------
Applicable Law. The Secured Party shall have, with respect to the Collateral, in
--------------
addition to all of its rights and remedies under the Collateral Documents, (a)
the rights and remedies of a secured party under the Uniform Commercial Code,
whether or not the Uniform Commercial Code would otherwise apply to the
Collateral in question, and (b) the rights and remedies of a secured party under
all other Applicable Law.
Section 4.07 Waivers of Rights Inhibiting Enforcement. The Pledgor waives
----------------------------------------
(a) any claim that, as to any part of the Collateral, a public sale, should the
Secured Party elect so to proceed, is, in and of itself, not a commercially
reasonable method of sale for such Collateral, (b) the right to assert in any
action or proceeding between it and the Secured Party any offsets or
counterclaims (other than compulsory counterclaims) that it may have, (c) except
as otherwise provided in any of the Collateral Documents, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, NOTICE OR JUDICIAL HEARING IN CONNECTION WITH THE
SECURED PARTY'S TAKING POSSESSION OR DISPOSITION OF ANY OF THE COLLATERAL
INCLUDING ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR
REMEDIES AND ANY SUCH RIGHT THAT THE PLEDGOR WOULD OTHERWISE HAVE UNDER THE
CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR OF ANY STATE, AND ALL OTHER
REQUIREMENTS AS TO THE TIME, PLACE AND TERMS OF SALE OR OTHER REQUIREMENTS WITH
RESPECT TO THE ENFORCEMENT OF THE SECURED PARTY'S RIGHTS HEREUNDER, (d) all
rights of redemption, appraisement, valuation, stay and extension or moratorium
to the extent permitted by Applicable Law and (e) all other rights the exercise
of which would, directly or indirectly, prevent, delay or inhibit the
enforcement of any of the rights or remedies under the Collateral Documents or
the absolute sale of the Collateral, now or hereafter in force under any
Applicable Law, and the Pledgor, for itself and all who may claim under it,
insofar as it or they now or hereafter lawfully may, hereby waive the benefit of
all such laws and rights.
10
Section 4.08 Power of Attorney. In addition to the other powers granted
-----------------
the Secured Party by the Pledgor under the Collateral Documents, the Pledgor
hereby appoints the Secured Party, and any other Person that the Secured Party
may designate, as the Pledgor's attorney-in-fact to act, in the name, place and
stead of the Pledgor in any way in which the Pledgor itself could do, with
respect to each of the following during an Event of Default: (a) endorsing the
Pledgor's name on (i) any checks, notes, acceptances, money orders, drafts or
other forms of payment, (ii) any proxies, documents, instruments, notices,
freight bills, bills of lading or other documents or agreements relating to the
Collateral, (iii) notices of assignment, financing statements and other public
records, and endorsing and depositing, or causing to be deposited, for
collection, presenting, drawing upon or under, or otherwise taking action to
realize upon, all instruments, chattel paper, securities, letters of credit and
documents constituting part of the Collateral for the purpose of holding and
disposing of the proceeds thereof in accordance with the terms of this
Agreement; (b) claiming for, adjusting, and instituting legal proceedings to
collect, any amounts payable under insurance, and applicable loss payable
endorsements, required to be maintained under any of the Collateral Documents;
(c) taking any actions or exercising any rights, powers or privileges that the
Pledgor is entitled to take or exercise and that, under the terms of any of the
Collateral Documents, the Secured Party is authorized to take or exercise; (d)
doing or causing to be done any or all things necessary or, in the determination
of the Secured Party, desirable to observe or perform the terms, conditions,
covenants and agreements to be observed or performed by the Pledgor under the
Collateral Documents and otherwise to carry out the provisions of the Collateral
Documents; and (e) notifying the post office authorities to change the address
for delivery of the Pledgor's mail to an address designated by the Secured
Party, and receiving, opening and disposing of all mail addressed to the Pledgor
(with all mail not constituting, evidencing or relating to the Collateral to be
forwarded by the Secured Party to the Pledgor). The Pledgor hereby ratifies and
approves all acts of the attorney pursuant to the foregoing other than any acts
that are determined by a judgment of a court that is binding on the Pledgor to
constitute gross negligence or willful misconduct.
Section 4.09 Termination of Security Interest. The Security Interest and
--------------------------------
all of the Pledgor's obligations under Articles 1, 2, 3 and 4 shall terminate
upon (a) the payment in full of the Secured Obligations and (b) the discharge,
dismissal with prejudice, settlement, release or other termination of any Loan
Document Related Claims that may then be pending against the Indemnified
Persons.
Section 4.10 Notices and Deliveries. (a) Notices and Materials Other than
---------------------- --------------------------------
Collateral . Except as provided in Section 4.10(b):
----------
(i) Manner of Delivery. All notices, communications and
------------------
materials (including all Information) to be given or delivered pursuant to
the Collateral Documents shall, except in those cases where giving notice
by telephone is expressly permitted, be given or delivered in writing
(which shall include telex and telecopy transmissions). In the event of a
discrepancy between any telephonic notice and any written confirmation
thereof, such written confirmation shall be deemed the effective notice
except to the extent the Secured Party has acted in reliance on such
telephonic notice.
11
(ii) Addresses. All notices, communications and materials to
---------
be given or delivered pursuant to the Collateral Documents shall be given
or delivered at the following respective addresses and telex, telecopier
and telephone numbers and to the attention of the following individuals or
departments:
A. if to the Pledgor, to it at:
[PLEDGOR]
[c/o Xpedite Systems, Inc.]
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.:
Telephone No.:
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Executive Vice President and
Chief Financial Officer
with a copy to:
Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
B. if to the Secured Party, to it at:
The Bank of New York
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
with a copy to:
The Bank of New York
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇(6, 7)
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, AFA,
18th Floor
12
or at such other address or telex, telecopier or telephone number or to the
attention of such other individual or department as the party to which such
information pertains may hereafter specify for the purpose in a notice to
the other specifically captioned "Notice of Change of Address."
(iii) Effectiveness. Each notice and communication and any
-------------
material to be given or delivered pursuant to the Collateral Documents
shall be deemed so given or delivered (A) if sent by any means of physical
delivery, when such notice, communication or material is delivered or
received at the appropriate address as above provided, (B) if sent by
telecopier, when such notice, communication or material is transmitted to
the appropriate telecopier number as above provided and is received at such
number and (C) if given by telephone, when communicated to the individual
or any member of the department specified as the individual or department
to whose attention notices, communications and materials are to be given or
delivered except that notices, communications and materials to be given or
delivered to the Secured Party pursuant to the Collateral Documents shall
not be deemed given or delivered until received by the officer of the
Secured Party responsible, at the time, for the administration of the
Collateral Documents.
(iv) Reasonable Notice. Any requirement under Applicable
-----------------
Law of reasonable notice by the Secured Party to the Pledgor of any event
in connection with, or in any way related to, the Loan Documents or the
exercise by the Secured Party of any of its rights thereunder shall be met
if notice of such event is given to the Pledgor in the manner prescribed
above at least 10 days before (A) the date of such event or (B) the date of
the day after which such event will occur.
(b) Collateral. Until the Secured Party shall otherwise specify,
----------
all Collateral to be delivered to the Secured Party pursuant to the Collateral
Documents consisting of instruments, securities, chattel paper, letters of
credit or documents shall be delivered to the Secured Party at the Secured
Party's Office either by hand delivery or by registered or certified mail,
postage prepaid, return receipt requested, in either case insured in an amount
not less than the greater of the aggregate face amount and the aggregate fair
market value of the Collateral so being delivered. All other Collateral to be
delivered to the Secured Party pursuant to the Collateral Documents shall be
delivered to such Person, at such address, by such means and in such manner as
the Secured Party may designate.
Section 4.11 Governing Law. The rights and duties of the Pledgor, the
-------------
Secured Party and the Principals under the Collateral Documents (including
matters relating to the Maximum Permissible Rate) shall, pursuant to New York
General Obligations Law Section 5-1401, be governed by the law of the State of
New York.
Section 4.12 LIMITATION OF LIABILITY. NEITHER THE SECURED PARTY NOR ANY
-----------------------
OTHER PRINCIPAL SHALL HAVE ANY LIABILITY WITH RESPECT TO, AND THE PLEDGOR HEREBY
WAIVES, RELEASES AND AGREES NOT TO ▇▇▇ FOR ANY LOSS OR DAMAGE SUSTAINED BY THE
PLEDGOR, OR ANY LOSS, DAMAGE, DEPRECIATION OR OTHER DIMINUTION IN THE VALUE OF
ANY COLLATERAL, THAT MAY OCCUR AS A RESULT OF, IN CONNECTION WITH, OR THAT IS IN
ANY
13
WAY RELATED TO, ANY EXERCISE OF ANY RIGHT OR REMEDY UNDER THE COLLATERAL
DOCUMENTS, EXCEPT FOR ANY SUCH LOSS, DAMAGE, DEPRECIATION OR DIMINUTION TO THE
EXTENT THAT THE SAME IS DETERMINED BY A JUDGMENT OF A COURT THAT IS BINDING ON
THE PLEDGOR AND SUCH PRINCIPAL, TO BE THE RESULT OF (i) A BREACH BY SUCH
PRINCIPAL OF ITS OBLIGATIONS HEREUNDER OR (ii) ACTS OR OMISSIONS ON THE PART OF
SUCH PRINCIPAL CONSTITUTING GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
Section 4.13 Counterparts. Each Collateral Document may be signed in any
------------
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto were upon the same instrument.
Section 4.14 Entire Agreement. This Agreement embodies the entire
----------------
agreement among the Pledgor, the Secured Party and the Banks relating to the
subject matter hereof and supersedes all prior agreements, representations and
understandings, if any, relating to the subject matter hereof.
Section 4.15 Successors and Assigns. All of the provisions of each
----------------------
Collateral Document shall be binding upon and inure to the benefit of the
Pledgor, the Secured Party and the other Principals and their respective
successors and assigns.
Section 4.16 Delivery of Opinions Authorized. The Pledgor hereby
-------------------------------
acknowledges and agrees that each Person that has rendered or may render an
opinion, report or similar communication, including legal opinions and
accountant's reports, to any Person in connection with the Collateral Documents,
has been and is hereby authorized and directed to so deliver such opinion,
report or communication.
ARTICLE V
INTERPRETATION
--------------
Section 5.01 Definitional Provisions. (a) Certain Terms Defined by
----------------------- ------------------------
Reference. (i) Except where the context clearly indicates a different meaning,
---------
all terms defined in Article 1, 8 or 9 of the Uniform Commercial Code, as in
effect on the date of this Agreement, are used herein with the meanings therein
ascribed to them. In addition, the terms "account", "collateral" and "security
interest", when capitalized, have the meanings specified in subsection (b) below
and the term "deposit account" includes an account evidenced by a certificate of
deposit.
(ii) Except in the case of "Agreement", "Agreement Date",
"Collateral", "Intellectual Property", "Permitted Lien", "Representation and
Warranty" and "Security Interest" and as otherwise specified herein, all terms
defined in the Credit Agreement are used herein with the meanings therein
ascribed to them.
(b) Other Defined Terms. For purposes of this Agreement:
-------------------
14
"Account" means a Receivable that represents the right to payment for goods
-------
sold or leased or for services rendered, in each case in the ordinary course of
business.
"Account Proceeds" means proceeds of an Account other than an Account
----------------
representing the sale or other disposition of Machinery and Equipment pursuant
to Section 2.02(b)(i).
"Agreement" means this Security Agreement, including all schedules, annexes
---------
and exhibits hereto.
"Agreement Date" means the date set forth as such on the last signature
--------------
page hereof, which date is the date the executed copies of this Agreement were
delivered by all parties hereto and, accordingly, the date this Agreement became
effective and, for the first time, binding upon such parties.
"Collateral" means the Pledgor's interest (WHATEVER IT MAY BE) in each of
----------
the following, IN EACH CASE WHETHER NOW OR HEREAFTER EXISTING OR NOW OWNED OR
HEREAFTER ACQUIRED BY THE PLEDGOR AND WHETHER OR NOT THE SAME IS NOW
CONTEMPLATED, ANTICIPATED OR FORESEEABLE, whether or not the same is subject to
Article 8 or 9 of the Uniform Commercial Code, whether or not the same
constitutes Collateral by reason of one or more than one of the following
clauses, AND WHEREVER THE SAME MAY BE LOCATED:
(i) all Receivables;
(ii) all General Intangibles;
(iii) all Inventory;
(iv) all Machinery and Equipment;
(v) all Securities and Instrument Collateral;
(vi) all Securities Accounts;
(vii) all Commodity Accounts;
(viii) all books, records, ledgercards, files, correspondence,
computer programs, tapes, disks and related data processing software (owned
by the Pledgor or in which it has an interest) that at any time evidence or
contain information relating to any Collateral or are otherwise necessary
or helpful in the collection thereof or realization thereupon;
(ix) all goods and other property, whether or not delivered,
(A) the sale, lease or furnishing of which gives or purports to give rise
to any Receivable, including all merchandise returned or rejected by or
repossessed from customers, or (B) securing any Receivable, including all
of the Pledgor's rights as an unpaid vendor or lienor, including stoppage
in transit, replevin and reclamation with respect to such goods and other
properties;
15
(x) all documents of title, policies and certificates of
insurance, securities, chattel paper and other documents or instruments
evidencing or pertaining to any Collateral;
(xi) all guaranties, Liens on real or personal property, leases
and other agreements and property that in any way secure or relate to any
Collateral, or are acquired for the purpose of securing and enforcing any
item thereof;
(xii) all claims (including the right to ▇▇▇ or otherwise
recover on such claims) (A) to items referred to in the definition of
Collateral, (B) under warranties relating to any Collateral and (C) against
third parties for (1)(aa) loss, destruction, requisition, confiscation,
condemnation, seizure, forfeiture or infringement of, or damage to, any
Collateral, (bb) payments due or to become due under leases, rentals and
hires of any Collateral, (cc) proceeds payable under or unearned premiums
with respect to policies of insurance relating to any Collateral and (2)
breach of any Contract constituting Collateral; and
(xiii) all products and proceeds of Collateral in whatever form.
The inclusion of "proceeds" of Collateral in the definition of "Collateral"
shall not be deemed a consent by the Secured Party to any sale or other
disposition of any Collateral not otherwise specifically permitted by the
terms hereof or of the Credit Agreement.
"Collateral Debtor" means a Person (including an issuer of any share of
-----------------
capital stock or other unit of ownership interest constituting Securities and
Instrument Collateral) obligated on, bound by, or subject to, a Collateral
Obligation.
"Collateral Documents" means (i) this Agreement and (ii) all other
--------------------
agreements, documents and instruments executed or delivered under or in
connection with, (A) this Agreement, (B) any other agreement, document or
instrument referred to in this clause (ii), or (C) any of the transactions
contemplated by this Agreement or any such other agreement, document or
instrument, in each case whether now or hereafter executed.
"Collateral Obligation" means a Liability constituting part of the
---------------------
Collateral and includes any such constituting or arising under any Receivable,
General Intangible or Securities and Instrument Collateral.
"Commodity Account" means any commodity account.
-----------------
"Commodity Account Control Letter" means a control letter substantially in
--------------------------------
the form of Schedule 5.01(a)1.
-----------------
"Control Letter" means a Securities Account Control Letter and a Commodity
--------------
Account Control Letter.
"Credit Agreement" means the Credit Agreement, dated as of December 17,
----------------
1997, among Xpedite Systems, Inc. and Xpedite Systems Holdings (UK) Limited, as
Borrowers, the Guarantors party thereto, the Banks listed on the signature pages
thereof, NationsBank, N.A., as Documentation Agent, and The Bank of New York, as
Administrative Agent.
16
"Distribution Collateral" means (i) all Distributions on or in respect of
-----------------------
(A) the instruments and securities listed on Schedule 2.01(c)(v), (B) any shares
-------------------
of capital stock of or other units of ownership interests in any Significant
Subsidiary which the Pledgor forms or acquires, or of any Subsidiary that
becomes a Significant Subsidiary, after the date hereof that constitute
Securities and Instrument Collateral or (C) any instruments, securities or
property that constitute Distribution Collateral by virtue of any provision of
this definition, including this clause (i)(C) and (ii) all other instruments or
securities and other property issued with respect to or in exchange for (A) the
instruments or securities listed on Schedule 2.01(c)(v), (B) any shares of
-------------------
capital stock of or other units of ownership interests in any Significant
Subsidiary which the Pledgor forms or acquires, or of any Subsidiary that
becomes a Significant Subsidiary, after the date hereof that constitute
Securities and Instrument Collateral or (C) any instruments, securities or other
property that constitute Distribution Collateral by virtue of any provision of
this definition, including this clause (ii)(C) (whether, in either case, upon
conversion of convertible securities included therein or through stock split,
spin-off, reclassification, merger, consolidation, sale of assets, combination
of shares or otherwise).
"Distributions" means Ordinary Distributions and Extraordinary
-------------
Distributions.
"Extraordinary Distributions" means (in each case whether or not in cash)
---------------------------
all dividends, interest, principal payments, other distributions and other
property (including cash, instruments and securities payable in connection with
calls, conversions, redemptions and the like or otherwise) on or in respect of
or in exchange for, and all proceeds (including cash, instruments and securities
receivable in connection with tender or other offers or otherwise) of,
Securities and Instrument Collateral other than Ordinary Distributions.
"General Intangibles" means general intangibles (except to the extent that
-------------------
the terms of any lease or other contract would prohibit the Pledgor from
conveying the Security Interest in its interest in such lease or contract).
"Intellectual Property" means (i) (A) patents and patent rights, (B)
---------------------
trademarks, trademark rights, trade names, trade name rights, corporate names,
business names, trade styles, service marks, logos and general intangibles of
like nature, together with, in the case of each item referred to in or
contemplated by clauses (A), (B) or (C), the goodwill of the business connected
with the use of or symbolized by the same, and (C) copyrights, in each case
whether registered, unregistered or under pending registration and, in the case
of any such that are registered or under pending registration, whether
registered or under pending registration under the laws of the United States or
any other country, (ii) reissues, continuations, continuations-in-part and
extensions of any Intellectual Property referred to in clause (i), and (iii)
rights relating to any Intellectual Property referred to in clause (i) or (ii),
including rights under applications (whether pending under the laws of the
United States or any other country) or licenses relating thereto.
"Inventory" means all inventory.
---------
"Machinery and Equipment" means all equipment wherever located and whether
-----------------------
or not the same constitutes "fixtures."
17
"Ordinary Distributions" means cash dividends to the extent paid out of
----------------------
retained earnings or capital surplus, and interest paid in cash, in each case
with respect to Securities and Instrument Collateral or other securities or
instruments, except to the extent that any such dividend is made in connection
with partial or total liquidation or a reduction of capital, or any such
interest is penalty interest, or, in each case, to the extent the same is not
declared or paid in the ordinary course.
"Permitted Lien" means (i) (A) a Lien listed on Schedule 1.02A and (B) a
-------------- --------------
Lien described in clause (a)(v) of the definition of "Permitted Lien" in the
Credit Agreement, including (1) a Lien for Taxes either not yet due or that are
being contested in good faith by appropriate proceedings and with respect to
which foreclosure, distraint, sale or other similar proceedings shall not have
been commenced or shall have been stayed and adequate reserves have been
established therefor in accordance with Generally Accepted Accounting Principles
and (2) in the case of any Collateral other than Securities and Instrument
Collateral and its proceeds, any other Lien, such as those in favor of a
landlord, warehouseman, carrier, or the like, arising by operation of law and
incurred in the ordinary course of business that does not (aa) arise under ERISA
or under any environmental law or (bb) secure an obligation for borrowed money,
(ii) any interest or title of a lessor under any lease (including UCC filings
relating to any such leasehold interest), (iii) any Lien securing a judgment (or
any equivalent prejudgment attachment) so long as, and to the extent that, such
judgment (or requested judgment) does not constitute an Event of Default under
Section 6.01(f) of the Credit Agreement, (iv) any easements, rights-of-way,
restrictions, minor defects or irregularities in title and other similar charges
or encumbrances not interfering in any material respect with the ordinary
conduct of the business of the Loan Parties (v) deposits made to secure
Liabilities other than Indebtedness or constituting Indebtedness (such as in
connection with letters of credit or surety bonds) incurred to provide a
substitute for, or similar security as, such a deposit and (vi) a Lien created
in favor of the Secured Party under the Collateral Documents.
"Pledgor" means [PLEDGOR], a [JURISDICTION] corporation.
-------
"Principals" means all Persons that are, or at any time were, the Secured
----------
Party, an Administrative Agent, a Bank or any other Indemnified Person.
"Questionnaire" means the Questionnaire in the form attached hereto as
-------------
Schedule 2.01(c)(vi) executed and delivered by the Pledgor to the Secured Party
--------------------
in connection with this Agreement.
"Receivables" means (i) all accounts and (ii) all other rights to the
-----------
payment of money.
"Representation and Warranty" means each representation or warranty made
---------------------------
pursuant to or under (i) Article 2 or any other provision of this Agreement,
(ii) any of the other Collateral Documents or (iii) any amendment to, or waiver
of rights under, this Agreement or any of the other Collateral Documents.
"Secured Obligations" means all Liabilities of the Pledgor owing to, or in
-------------------
favor or for the benefit of, or purporting to be owing to, or in favor or for
the benefit of, the Principals under the Loan Documents or any interest rate
swap or similar hedging agreement, in each case
18
(i) WHETHER NOW EXISTING OR HEREAFTER ARISING OR ACQUIRED, and (ii) whether
owing to, or in favor or for the benefit of, or purporting to be owing to, or in
favor or for the benefit of, Persons that are Principals as of the Agreement
Date or that become Principals by reason of any permitted succession or
assignment at any time thereafter.
"Secured Party" means the Administrative Agent, acting both on its own
-------------
behalf as Administrative Agent and as the agent for and representative (within
the meaning of Section 9-105(m) of the Uniform Commercial Code) of the other
Principals.
"Secured Party's Office" means the address of the Secured Party specified
----------------------
in or determined in accordance with the provisions of Section 4.10.
"Securities Account" means any securities account.
------------------
"Securities and Instrument Collateral" means (i) all securities and
------------------------------------
instruments listed on Schedule 2.01(c)(v), (ii) without limiting the Loan
-------------------
Parties' obligations under the Loan Documents, (A) all other Capital Securities
at any time created, issued or granted to Pledgor by any Person named on
Schedule 2.01(c)(v) that is a United States Person and (B) 65% (or such other
percentage which in the reasonable determination of the Company constitutes the
maximum percentage which may be pledged hereunder without adversely affecting
the United States taxation treatment of the Company) of all other Capital
Securities at any time created, issued or granted to Pledgor by any Person named
on Schedule 2.01(c)(v) that is not a United States Person, (iii) all shares of
capital stock of or other units of ownership interests in any Significant
Subsidiary that is a United States Person which the Pledgor forms or acquires,
or in any Subsidiary that is a United States Person that becomes a Significant
Subsidiary, after the date hereof, (v) 65% (or such other percentage which in
the reasonable determination of the Company constitutes the maximum percentage
which may be pledged hereunder without adversely affecting the United States
taxation treatment of the Company) of the outstanding shares of capital stock or
other units of ownership interests in any Significant Subsidiary that is not a
United States Person which the Pledgor forms or acquires, or in any Subsidiary
that is not a United States Person that becomes a Significant Subsidiary, after
the date hereof, (vi) all Indebtedness described on Schedule 2.01(c)(v), (vii)
-------------------
all other Indebtedness from time to time owed to the Pledgor by [SECURITY
--------
AGREEMENT EXECUTED BY WORLDWIDE OR ANOTHER SIGNIFICANT SUBSIDIARY THAT IS A
---------------------------------------------------------------------------
UNITED STATES PERSON: the Company or another] [SECURITY AGREEMENT EXECUTED BY
-------------------- ------------------------------
THE COMPANY: a] Significant Subsidiary, (viii) all Distribution Collateral, (ix)
-----------
all replacements and substitutions for any Collateral that constitutes (whether
by virtue of clause (i), clause (ii), clause (iii), clause (iv), clause (v),
clause (vi), clause (vii), clause (viii) or this clause (ix)) Securities and
Instrument Collateral and (x) the certificates, if any, representing the
foregoing [SECURITY AGREEMENT EXECUTED BY WORLDWIDE: ; provided that,
---------------------------------------- --------
notwithstanding the foregoing, Securities and Instruments Collateral shall not
include any property of the Pledgor otherwise constituting Securities and
Instrument Collateral that has been effectively pledged to the Secured Party
pursuant to the Worldwide UK Security Agreement].
"Security Account Control Letter" means a control letter substantially in
-------------------------------
the form of Schedule 5.01(a)-2.
-------------------
19
"Security Interest" means the mortgages, pledges and assignments to the
-----------------
Secured Party of, the continuing security interest of the Secured Party in, and
the continuing lien of the Secured Party upon, the Collateral intended to be
effected by the terms of this Agreement or any of the other Collateral
Documents.
Section 5.02 Other Interpretive Provisions. (a) Except as otherwise
-----------------------------
specified herein or in the Credit Agreement, all references herein (i) to any
Person shall be deemed to include such Person's permitted successors and
assigns, (ii) to any Applicable Law defined or referred to herein shall be
deemed references to such Applicable Law or any successor Applicable Law as the
same may have been or may be amended or supplemented from time to time and (iii)
to any Loan Document or Contract defined or referred to herein shall be deemed
references to such Loan Document or Contract (and, in the case of any
instrument, any other instrument issued in substitution therefor) as the terms
thereof may have been or may be amended, supplemented, waived or otherwise
modified from time to time.
(b) When used in this Agreement, the words "herein", "hereof" and
"hereunder" and words of similar import shall refer to this Agreement as a whole
and not to any provision of this Agreement, and the words "Article", "Section",
"Annex", "Schedule" and "Exhibit" shall refer to Articles and Sections of, and
Annexes, Schedules and Exhibits to, this Agreement unless otherwise specified.
(c) Whenever the context so requires, the neuter gender includes the
masculine or feminine, the masculine gender includes the feminine, and the
singular number includes the plural, and vice versa.
(d) Any item or list of items set forth following the word
"including", "include" or "includes" is set forth only for the purpose of
indicating that, regardless of whatever other items are in the category in which
such item or items are "included", such item or items are in such category, and
shall not be construed as indicating that the items in the category in which
such item or items are "included" are limited to such items or to items similar
to such items.
(e) Each power of attorney in favor of the Secured Party or any other
Person granted by or pursuant to this Agreement shall be deemed to be
irrevocable and coupled with an interest.
(f) Except as otherwise indicated, any reference herein to the
"Collateral", the "Secured Obligations", the "Loan Documents", the "Collateral
Documents", the "Principals" or any other collective or plural term shall be
deemed a reference to each and every item included within the category described
by such collective or plural term, so that (i) a reference to the "Collateral",
the "Secured Obligations" or the "Principals" shall be deemed a reference to any
or all of the Collateral, the Secured Obligations or the Principals, as the case
may be, and (ii) a reference to the "obligations" of the Pledgor under the "Loan
Documents" or the "Collateral Documents" shall be deemed a reference to each and
every obligation under each and every Loan Document or Collateral Document, as
the case may be, whether any such obligation is incurred under one, some or all
of the Loan Documents or the Collateral Documents, as the case may be.
20
(g) Except where the context clearly indicates a different meaning,
references in this Agreement to Receivables, General Intangibles, Inventory and
Machinery and Equipment means the same to the extent they constitute Collateral.
(h) Except as otherwise specified therein, all terms defined in this
Agreement shall have the meanings herein ascribed to them when used in the other
Collateral Documents or any certificate, opinion or other document delivered
pursuant hereto or thereto.
Section 5.03 Representations and Warranties. All Representations and
------------------------------
Warranties shall be deemed made (a) in the case of any Representation and
Warranty contained in this Agreement at the time of its initial execution and
delivery, at and as of the Agreement Date, (b) in the case of any Representation
and Warranty contained in this Agreement at the time any Loan is made at and as
of such time and (c) in the case of any particular Representation and Warranty,
wherever contained, at such other time or times as such Representation and
Warranty is made or deemed made in accordance with the provisions of this
Agreement or the document pursuant to, under or in connection with which such
Representation and Warranty is made or deemed made.
Section 5.04 Captions. Captions to Articles, Sections and subsections of,
--------
and Annexes, Schedules and Exhibits to, the Collateral Documents are included
for convenience of reference only and shall not constitute a part of the
Collateral Documents for any other purpose or in any way affect the meaning or
construction of any provision of the Collateral Documents.
21
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers all as of the Agreement Date.
[PLEDGOR]
By:________________________________
Name:
Title:
THE BANK OF NEW YORK,
as Secured Party
By:________________________________
Name:
Title:
Agreement Date:
22
Schedule 1.02
-------------
SCHEDULE OF REQUIRED ACTION
Pursuant to, and without thereby limiting, its obligations under Section
1.02, the Pledgor hereby agrees that it will:
(a) file UCC-1 financing statements in the form of Schedule 1.02(a);
----------------
(b) within five Business Days (or, during an Event of Default, such
shorter period as the Secured Party may specify) after receipt by the Pledgor or
any of its agents, deliver or caused to be delivered to the Secured Party,
stamped, marked, endorsed or accompanied by such instruments of assignment as
the Secured Party may specify, all instruments, chattel paper, certificated
securities, letters of credit and documents evidencing or forming a part of the
Collateral and not constituting Account Proceeds;
(c) (i) in the case of each Securities Account or Commodity Account
that is Collateral, deliver to the Secured Party a Securities Account Control
Letter or Commodity Account Control Letter, as the case may be, duly executed by
the securities intermediary or commodity intermediary, as the case may be, and
the Pledgor;
(d) in the case of any Collateral constituting Intellectual Property,
cause a duly executed copy of Schedule 1.02(d)-A, -B or -C, as appropriate, with
------------------ -- --
respect thereto to be filed in the appropriate filing office; and
(e) at all times ▇▇▇▇ its books and records as may be necessary or
appropriate to evidence, protect and perfect the Security Interest.
Schedule 1.02(a)
----------------
STANDARD FORM UCC-1
FINANCING STATEMENT
1. Debtor: [Insert Pledgor's name and address]
2. Secured Party: The Bank of New York, as Secured Party, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
3. "Collateral" as defined in Annex A attached hereto, whether now or
hereafter existing or now owned or hereafter acquired, including certain
accounts, contract rights and general intangibles; certain goods, including
certain machinery, fixtures and attachments, accessories, components and
parts installed therein or affixed thereto, finished goods, work-in-process
and raw materials; certificated and uncertificated securities and
instruments; securities account and commodity accounts; and proceeds of the
foregoing (including, in the case of securities and instruments, all
payments and distributions on or with respect thereto, whether constituting
principal, interest or dividends).
Signature Lines:
Debtor: [Insert Pledgor's name]
Secured Party: The Bank of New York, as Secured Party
ANNEX A TO UCC-1 FINANCING STATEMENT
DEBTOR:
SECURED PARTY:
THE TERMS "RECEIVABLES", "GENERAL INTANGIBLES", "INVENTORY", "MACHINERY AND
EQUIPMENT", "SECURITIES AND INSTRUMENTS COLLATERAL" "SECURITIES ACCOUNTS" AND
"COMMODITY ACCOUNTS" ARE DEFINED IN THE SECURITY AGREEMENT DATED AS OF DECEMBER
___, 1997 BETWEEN DEBTOR AND SECURED PARTY, AS AMENDED FROM TIME TO TIME.
COLLATERAL DESCRIPTION
"Collateral" means the Debtor's interest (whatever it may be) in each of
----------
the following, in each case whether now or hereafter existing or now owned or
hereafter acquired by the Debtor and whether or not the same is now
contemplated, anticipated or foreseeable, or constitutes Collateral by reason of
one or more than one of the following clauses, and wherever the same may be
located:
(a) all Receivables;
(b) all General Intangibles;
(c) all Inventory;
(d) all Machinery and Equipment;
(e) all Securities and Instruments Collateral;
(f) all Securities Accounts;
(g) all Commodity Accounts;
(h) all books, records, ledgercards, files, correspondence, computer
programs, tapes, disks and related data processing software (owned by the Debtor
or in which it has an interest) that at any time evidence or contain information
relating to any Collateral or are otherwise necessary or helpful in the
collection thereof or realization thereupon;
(i) all goods and other property, whether or not delivered, (i) the
sale, lease or furnishing of which gives or purports to give rise to any
Receivable, including all merchandise returned or rejected by or repossessed
from customers, or (ii) securing any Receivable, including all of the Debtor's
rights as an unpaid vendor or lienor, including stoppage in transit, replevin
and reclamation with respect to such goods and other properties;
(j) all documents of title, policies and certificates of insurance,
securities, chattel paper and other documents or instruments evidencing or
pertaining to any Collateral;
(k) all guaranties, liens on real or personal property, leases and
other agreements and property that in any way secure or relate to any
Collateral, or are acquired for the purpose of securing and enforcing any item
thereof;
(l) all claims (including the right to ▇▇▇ or otherwise recover on
such claims) (i) to items referred to in the definition of Collateral, (ii)
under warranties relating to any Collateral, (iii) against third parties for (A)
(1) loss, destruction, requisition, confiscation, condemnation, seizure,
forfeiture or infringement of, damage to, (2) payments due or to become due
under leases, rentals or hires of, and (3) proceeds payable under or unearned
premiums with respect to policies of insurance relating to, any Collateral and
(B) breach of any Contract constituting Collateral; and
(m) all products and proceeds of Collateral in whatever form.
Some of the Collateral may be located at: [Insert locations of Collateral]
2
Schedule 1.02(d)-A
------------------
MEMORANDUM OF SECURITY AGREEMENT
--------------------------------
PATENTS
-------
Pursuant to a Security Agreement dated as of ____, 1997 (the "Security
Agreement"), [name of Pledgor], whose chief executive office is located at
[insert address] (the "Pledgor"), has granted to The Bank of New York, whose
chief executive office is located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, as
Administrative Agent (the "Secured Party"), a continuing security interest in,
and a continuing lien upon, all of Pledgor's right, title and interest in and to
the patents and patent applications listed on the attached Schedule and all
reissues, divisions, continuations, continuations-in-part, extensions and
renewals thereof. Such security interest and lien can be terminated only in
accordance with the terms of the Security Agreement.
Dated: ____, 19__
[name of Pledgor]
By:______________________________________
Name:
Title:
SCHEDULE
Patent Registrations
--------------------
Title Inventor(s) Patent No. Issue Date Expiration Date
----- ----------- ---------- ---------- ---------------
Patent Applications
-------------------
Title Inventor(s) Application Serial No. Filing Date
----- ----------- ---------------------- -----------
Schedule 1.02(d)-B
------------------
MEMORANDUM OF SECURITY AGREEMENT
--------------------------------
TRADEMARKS
----------
Pursuant to a Security Agreement dated as of ____, 1997 (the "Security
Agreement"), [name of Pledgor], whose chief executive office is located at
[insert address] (the "Pledgor"), has granted to The Bank of New York, whose
chief executive office is located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, as
Administrative Agent (the "Secured Party"), a continuing security interest in,
and a continuing lien upon, all of Pledgor's right, title and interest in and to
the trademarks and trademark applications listed on the attached Schedule,
together with the goodwill connected with the use of and symbolized by each of
such trademarks, and all renewals thereof. Such security interest and lien can
be terminated only in accordance with the terms of the Security Agreement.
Dated: ____, 19__
[name of Pledgor]
By:____________________________________
Name:
Title:
SCHEDULE
Trademark Registrations
-----------------------
Trademark Registration No. Registration Date
--------- ---------------- -----------------
Trademark Applications
----------------------
Trademark Application Serial No. Filing Date
--------- ---------------------- -----------
Schedule 1.02(d)-C
------------------
MEMORANDUM OF SECURITY AGREEMENT
--------------------------------
COPYRIGHTS
----------
Pursuant to a Security Agreement dated as of _____, 1997 (the "Security
Agreement"), [name of Pledgor], whose chief executive office is located at
[insert address] (the "Pledgor"), has granted to The Bank of New York, whose
chief executive office is located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, as
Administrative Agent (the "Secured Party"), a continuing security interest in,
and a continuing lien upon, all of Pledgor's right, title and interest in and to
the copyrights and copyright applications listed on the attached Schedule and
all renewals and extensions thereof. Such security interest and lien can be
terminated only in accordance with the terms of the Security Agreement.
Dated: _________, 19__
[name of Pledgor]
By:__________________________________
Name:
Title:
SCHEDULE
Copyright Registrations
-----------------------
Title Registration No. Registration Date
----- ---------------- -----------------
Copyright Applications
----------------------
Title _________________________ Filing Date
----- -----------
Schedule 1.02A
--------------
SCHEDULE OF PERMITTED LIENS
Schedule 2.01(c)(v)
-------------------
Schedule of Initial Securities and Instrument Collateral
Capital Securities
------------------
Jurisdiction of Number of Certificate Date of
Name Incorporation Shares Number % Ownership Issue
---- ------------- ------- ------- ----------- -----
Indebtedness
------------
Date of
Instrument Maker Payee Amount of Loan Interest Rate
---------- ----- ----- -------------- -------------
Other Securities and Instrument Collateral
------------------------------------------
Schedule 2.02(c)(vi)
--------------------
SECURITY AGREEMENT QUESTIONNAIRE
_______________________________________________________________________________
The undersigned (the "Pledgor") is entering into a Security Agreement with The
Bank of New York, as Administrative Agent. In connection with the Security
Agreement the Pledgor is required to answer the following questions.
1. What is the Pledgor's exact corporate name as it appears in its certificate
of incorporation (or, if not a corporation, the Pledgor's complete name)?
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
2. Has the Pledgor ever changed its name? If so, state each other name the
Pledgor has had.
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
3a. Does the Pledgor do business under any other name? If so, state each such
name.
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
b. Does the Pledgor use or has the Pledgor used any trade names or trade
styles? If so, list each of them.
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
c. If the Pledgor has at any time during the preceding five years done
business under any name or used any trade name or trade style not listed
under a. or b., list each such name or style.
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
4. Has the Pledgor changed its identity or corporate structure in any way
within the past five years? Changes in corporate structure would include
incorporation of a partnership or sole proprietorship, reincorporation in a
different state, mergers, consolidations and acquisitions. If any such
change has taken place, indicate the nature of such change and give the
names of each corporation or other entity that was incorporated, merged or
consolidated with or acquired by the Pledgor in such transaction (including
each name under which each such corporation or entity has done business)
and the address of each place of business of each such corporation or
entity immediately prior to such incorporation, merger, consolidation or
acquisition and within five years prior to the date of this Questionnaire.
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
5a. State the complete address (including the county) of the Pledgor's place of
business or, if the Pledgor has more then one place of business, its chief
executive office and, if different from its chief executive office, of the
office where the Pledgor keeps its books and records relating to its
accounts or contract rights, specifying in each case whether such location
is owned or leased by the Pledgor and, if leased, specifying the name and
address of the landlord.
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
b. If the Pledgor maintains any records relating to any of the Collateral with
an independent computer service firm or the like specify the address
(including the county) of each such Person.
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
6. Has the Pledgor's place of business, chief executive office or office where
the Pledgor keeps its books and records relating to its accounts or
contract rights been located at any other address (including that of any
independent computer service firm or the like) during the past four months?
If so, specify each such address (including the county) and whether such
location was owned or leased by the Pledgor and, if leased, specifying the
name and address of the landlord.
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
2
7. State the complete address (including the county) of each other place of
business that the Pledgor presently has, specifying in each case whether
such location is owned or leased by the Pledgor and, if leased, specifying
the name and address of the landlord.
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
8. State the complete address (including the county) of each place of business
that the Pledgor has had in the past four months, other than those listed
in the answers to questions 5, 6 and 7, specifying in each case whether
such location was owned or leased by the Pledgor and, if leased, specifying
the name and address of the landlord.
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
9. State the complete address (including the county) of each location where
the Pledgor keeps any inventory or machinery and equipment, specifying (a)
in each case whether such location is owned or leased by the Pledgor and,
if leased, specifying the name and address of the landlord and (b) the
approximate book value of the (i) inventory and (ii) machinery and
equipment maintained at each such location.
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
10. Has any of the Pledgor's inventory or machinery and equipment been located
during the past four months at any location other than the locations listed
in the answers to questions 5, 6, 7, 8 and 9? If so, state the complete
address (including the county) of each such location, specifying in each
case whether such location was owned or leased by the Pledgor and, if
leased, specifying the name and address of the landlord.
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
11. Are any of the Pledgor's accounts receivables payable by the United States
Government or any department or agency thereof? If so, please state the
aggregate amount thereof and the percentage that those accounts receivables
are of all of the Pledgor's accounts receivables, in each case as of a
recent, specified date.
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
3
12a. Please supply the following information with respect to each patent and
patent application in which the Pledgor has any interest (whether as owner,
licensee or otherwise):
Patents
-------
Nature of Interest
(e.g.,owner, licensee) Registered Patent No. Issue Date Country of Issue
----------------------- ------------------------ -------------- --------------------
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Patent Applications
-------------------
Nature of Interest
(e.g., owner, licensee) Serial No. Filing Date Country of Issue
------------------------ ------------- --------------- --------------------
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
b. If the Pledgor's interest in any of the foregoing is otherwise than as
owner, please describe the nature of such interest.
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
13a. Please supply the following information with respect to each registered
trademark and trademark application in which the Pledgor has any interest
(whether as owner, licensee or otherwise):
Registered Trademarks
---------------------
Nature of
Interest (e.g.,
owner, Registered Registration Int'l Services Goods or Date Country of
licensee) Trademark No. Class Covered Covered Registered Registration
------------- ---------- ------------ ------------- -------------- -------------- ---------------
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
4
Trademark Applications
----------------------
Trademark
Application
Nature of relates to
Interest (e.g., following Int'l Class Goods or Country of
owner, licensee) Trademark Serial No. Covered Services Covered Application
------------------ --------------- --------------- ----------------- ------------------- ------------------
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
b. If the Pledgor's interest in any of the foregoing is otherwise than as
owner, please describe the nature of such interest.
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
14a. Please supply the following information with respect to each copyright and
copyright application in which the Pledgor has any interest (whether as
owner, licensee or otherwise):
Copyrights
----------
Nature of
Interest (e.g.,
owner, Property Date of Country of
licensee) Copyright Copyright No. Covered Copyright Docket No. Registration
----------------- -------------- ------------------ ------------- -------------- --------------- ----------------
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Copyright Applications
----------------------
Copyright application
Nature of Interest (e.g., relates to following
owner, licensee) Copyright Property Covered Country of Registration
-------------------------- -------------------------- ----------------------- -----------------------------
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
5
b. If the Pledgor's interest in any of the foregoing is otherwise than as
owner, please describe the nature of such interest.
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
15. State the following information, in each case as of the Agreement Date,
with respect to each security that is to constitute Collateral on the
Agreement Date.
Number of
Shares or Percent of
Principal Outstanding
Debt or Certificated or Class or Amount Class or
Issuer Equity Uncertificated Series Owned Series
----------- ------------- ------------------ --------------- ------------- ----------------
16. State the following information, in each case as of the Agreement Date,
with respect to each instrument that is to constitute Collateral on the
Agreement Date.
Principal Percent of
Maker or Certificated or Class or Amount Outstanding
Drawer Uncertificated Series Owned Class or Series
----------- ------------------ ----------- ------------- -------------------
6
17. State the following information, in each case as of the Agreement Date,
with respect to each securities account that is to constitute Collateral on
the Agreement Date.
Securities Intermediary's Jurisdiction
(Determined Under Uniform Commercial Code
Account No. Section 8-110(e))
----------- -----------------
18. State the following information, in each case as of the Agreement Date,
with respect to each security entitlement that is to constitute Collateral
on the Agreement Date.
Securities Intermediary Financial Asset(s)
----------------------- ------------------
No. of Shares % on Agreement
Class or or Principal Date of Outstanding
Issuer Series Amount Class or Series
---------- ---------- ---------------- ---------------------
1(a) [Insert here name of applicable
Securities Intermediary]
[Security Account(s):
No. _______
(b) [Insert here Securities Intermediary's
Jurisdiction (Determined Under
Uniform Commercial
Code Section 8-110(e))]
2(a) [Insert here name of applicable
Securities Intermediary]
7
[Security Account(s):
No _______
No _______]
(b) [Insert here Securities Intermediary's
Jurisdiction (Determined Under
Uniform Commercial
Code Section 8-110(e))]
19. State the following information, in each case as of the Agreement Date,
with respect to each commodity account that is to constitute Collateral on
the Agreement Date.
Commodity Intermediary's Jurisdiction
(Determined Under Uniform Commercial
Account No. Code Section 9-103(e))
----------- ----------------------
20. State the following information, in each case as of the Agreement Date,
with respect to each commodity contract that is to constitute collateral on
the Agreement Date.
Commodity Intermediary's Jurisdiction
(Determined Under Uniform Commercial
Code Section 9-103(e)) If Commodity
Contract Is Maintained With Such
Description of Commodity Contract Commodity Intermediary
--------------------------------- ----------------------
21. Does the Pledgor have any existing lockbox arrangements? If so, please
identify each bank or other entity with which any such arrangement is
maintained.
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
8
The Pledgor hereby certifies that its answers to the foregoing questions
are complete and correct and confirms that such answers constitute
representations and warranties under the Security Agreement.
Date: _______________, 1997
[Pledgor]:
By ____________________
Name:
Title:
9
Schedule 5.01(a)-1
------------------
Securities Account Control Agreement
_______________, 19__
[Insert here name and address
of Securities Intermediary]
Attention:
Re: Securities Accounts
-------------------
You ("Securities Intermediary") hereby represent and warrant to, and agree
with, The Bank of New York (the "Secured Party") as follows:
1. Xpedite Systems, Inc. (the "Pledgor") maintains the following
securities accounts with Securities Intermediary at the specified offices of the
Securities Intermediary:
Account Number Office
--------------- ------
2. Until the Secured Party shall have notified the Securities
Intermediary in writing to the contrary, the Securities Intermediary:
(a) will comply, without further consent by the Pledgor, with entitlement
orders originated by the Secured Party relating to any one or more of the
present or future security entitlements carried in any of the securities
accounts listed in paragraph 1 above or in any securities account that the
Pledgor may in the future maintain with the Securities Intermediary,
whether at its main office or any of its branch offices;
(b) will make all payments due to the Pledgor representing dividends,
interest or other distributions on, or proceeds of the sale or other
disposition of, any securities or other financial assets that are now or
hereafter the subject of any of present or future security entitlements
carried in any of the Pledgor's present or future securities accounts with
the Securities Intermediary, directly to the Secured Party at its address
set forth below or at such other address as the Pledgor may hereafter
specify, without any reduction or deduction for any set-off, or counter
claim;
(c) will not execute and deliver, or otherwise become bound by, any
agreement (a "control agreement") under which the Securities Intermediary
agrees with any party other than the Pledgor or the Secured Party to comply
with entitlement orders originated by such party relating to any of the
security accounts or security entitlements that are the subject of this
Securities Account Control Agreement;
(d) will not grant any security interest in any financial asset that is the
subject of any security entitlement that is the subject of this Securities
Account Control Agreement; and
(e) hereby subordinates any security interest it may now or hereafter have
in any securities account, security entitlement, or financial asset that is
the subject of a security entitlement, that is the subject of this
Securities Account Control Agreement to the security interest therein, if
any, of the Secured Party.
2
3. Except for those listed on Annex A hereto, as of the date hereof,
-------
there are no (i) control agreements outstanding or (ii) any security interests
in any of the securities accounts, securities entitlements, or financial assets
that are the subject of any security entitlement, that are the subjects of this
Securities Account Control Agreement.
4. The copy of the securities account agreement between the Pledgor and
the Securities Intermediary relating to the securities accounts listed in
paragraph 1 above delivered to the Secured Party is, as of the date hereof,
accurate and complete,.
5. The rights and duties of the Secured Party, the Securities
Intermediary and the Pledgor under this Securities Account Control Agreement
shall be governed by the law of the State of New York.
6. This Securities Account Control Agreement may be signed in any number
of counterparts each of which shall be an original, with the same effect as if
the signatures thereto were upon the same instrument.
7. All of the provisions of this Securities Account Control Agreement
shall be binding upon and inure to the benefit of parties hereto and their
respective successors and assigns.
The Securities Intermediary hereby acknowledges that it has been informed
that (1) the securities accounts and the security entitlements carried therein
that are the subject of this Securities Account Control Agreement are the
subject of a security interest granted by the
3
Pledgor to the Secured Party and (2) the Pledgor has agreed with the Secured
Party that such assets shall be subject to no other security interests.
Very truly yours,
The Bank of New York
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇/▇▇/ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Executed and Agreed to:
[Insert here name of the Securities Intermediary]
By:_________________________________
(Authorized Signature)
Consented to:
Xpedite Systems, Inc.
By:__________________________________
(Authorized Signature)
4
Schedule 5.01(a)-2
------------------
Commodity Account Control Agreement
_______________, 19__
[Insert here name and address
of Commodity Intermediary]
Attention:
Re: Commodity Accounts
------------------
You ("Commodity Intermediary") hereby represent and warrant to, and agree
with, The Bank of New York (the "Secured Party") as follows:
1. Xpedite Systems, Inc. (the "Pledgor") maintains the following
commodity accounts with Commodity Intermediary at the specified offices of the
Commodity Intermediary:
Account Number Office
--------------- ------
2. Until the Secured Party shall have notified the Commodity Intermediary
in writing to the contrary, the Commodity Intermediary:
(a) will apply as directed by the Secured Party, without further consent
by the Pledgor, any value distributed on account of any one or more of the
present or future
commodity contracts carried in any of the commodity accounts listed in
paragraph 1 above or in any commodity account that the Pledgor may in the
future maintain with the Commodity Intermediary, whether at its main office
or any of its branch offices;
(b) will make all payments due to the Pledgor of any value distributed on
account of any commodity contracts carried in any of the Pledgor's present
or future commodity accounts with the Commodity Intermediary, directly to
the Secured Party at its address set forth below or at such other address
as the Pledgor may hereafter specify, without any reduction or deduction
for any set-off, or counter claim;
(c) will not execute and deliver, or otherwise become bound by, any
agreement (a "control agreement") under which the Commodity Intermediary
agrees with any party other than the Pledgor or the Secured Party to apply
as directed by such party any value distributed on account of any of the
commodity accounts or commodity contracts that are the subject of this
Commodity Account Control Agreement;
(d) will not grant any security interest in any commodity account or
commodity contract that is the subject of this Commodity Account Control
Agreement; and
(e) hereby subordinates any security interest it may now or hereafter have
in any commodity account or commodity contract that is the subject of this
Commodity Account Control Agreement to the security interest therein, if
any, of the Secured Party.
3. Except for those listed on Annex A hereto, as of the date hereof,
-------
there are no (i) control agreements outstanding or (ii) any security interests
in any of the commodity accounts or commodity contracts that are the subjects of
this Commodity Account Control Agreement.
2
4. The copy of the commodity account agreement between the Pledgor and
the Commodity Intermediary relating to the commodity accounts listed in
paragraph 1 above delivered to the Secured Party is, as of the date hereof,
accurate and complete,.
5. The rights and duties of the Secured Party, the Commodity Intermediary
and the Pledgor under this Commodity Account Control Agreement shall be governed
by the law of the State of New York.
6. This Commodity Account Control Agreement may be signed in any number
of counterparts each of which shall be an original, with the same effect as if
the signatures thereto were upon the same instrument.
7. All of the provisions of this Commodity Account Control Agreement
shall be binding upon and inure to the benefit of parties hereto and their
respective successors and assigns.
The Commodity Intermediary hereby acknowledges that it has been informed
that (1) the commodity accounts and the contracts carried therein that are the
subject of this Commodity Account Control Agreement are the subject of a
security interest granted by the
3
Pledgor to the Secured Party and (2) the Pledgor has agreed with the Secured
Party that such assets shall be subject to no other security interests.
Very truly yours,
The Bank of New York
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇/▇▇/ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Executed and Agreed to:
[Insert here name of the Commodity Intermediary]
By:_________________________________
(Authorized Signature)
Consented to:
Xpedite Systems, Inc.
By:__________________________________
(Authorized Signature)
4
EXHIBIT C
FORM OF WORLDWIDE UK SECURITY AGREEMENT
EXHIBIT D
FORM OF XPEDITE UK SECURITY AGREEMENT
EXHIBIT E
FORM OF XSL SECURITY AGREEMENT