EXHIBIT 10.1
TERM LOAN AGREEMENT
among
INFOCROSSING, INC.,
The Several Lenders
from Time to Time Parties Hereto
and
INFOCROSSING AGENT, INC.
as Agent
Dated as of October 21, 2003
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS......................................................1
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1.1 Defined Terms.............................................1
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1.2 Other Definitional Provisions............................16
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SECTION 2. GENERAL TERMS...................................................17
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2.1 Loans....................................................17
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2.2 Repayment of Loans; Evidence of Debt.....................17
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2.3 Prepayments..............................................18
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2.4 Interest Rates and Payment Dates.........................20
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2.5 Computation of Interest..................................20
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2.6 Pro Rata Treatment and Payments..........................20
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2.7 Requirements of Law......................................20
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2.8 Taxes....................................................21
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2.9 Indemnity................................................24
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2.10 Agent Fee................................................24
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SECTION 3. REPRESENTATIONS AND WARRANTIES..................................24
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3.1 Financial Condition......................................24
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3.2 Absence of Certain Changes...............................25
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3.3 Corporate Existence; Compliance with Law.................26
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3.4 Corporate Power; Authorization; Enforceable Obligations..26
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3.5 No Legal Bar.............................................27
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3.6 No Material Litigation...................................27
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3.7 Contracts and No Default.................................27
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3.8 Ownership of Property; Liens.............................27
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3.9 Intellectual Property....................................27
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3.10 No Burdensome Restrictions...............................28
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3.11 Taxes....................................................28
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3.12 Federal Regulations......................................29
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3.13 ERISA....................................................29
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3.14 Investment Company Act; Other Regulations................30
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3.15 Subsidiaries.............................................31
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3.16 Environmental Matters....................................31
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3.17 Solvency.................................................32
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3.18 Full Disclosure..........................................32
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SECTION 4. CONDITIONS PRECEDENT TO CLOSING.................................32
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SECTION 5. AFFIRMATIVE COVENANTS...........................................36
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5.1 Financial Statements.....................................36
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5.2 Certificates; Other Information..........................37
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5.3 Payment of Obligations...................................37
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5.4 Conduct of Business and Maintenance of Existence.........37
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5.5 Maintenance of Property; Insurance.......................38
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5.6 Books and Records; Inspection of Property................39
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5.7 Notices..................................................39
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5.8 Environmental Laws.......................................40
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5.9 Further Assurances.......................................40
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5.10 Additional Collateral....................................40
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5.11 Syndication..............................................42
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5.12 Tax Returns..............................................42
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SECTION 6. NEGATIVE COVENANTS..............................................42
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6.1 Financial Condition Covenants............................42
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6.2 Limitation on Indebtedness...............................43
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6.3 Limitation on Liens......................................44
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6.4 Limitation on Fundamental Changes........................46
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6.5 Limitation on Sale of Assets.............................46
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6.6 Limitation on Amendments to Material Agreements..........47
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6.7 Limitation on Dividends..................................47
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6.8 Limitation on Capital Expenditures.......................48
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6.9 Limitation on Investments, Loans and Advances............48
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6.10 Modifications of Debt Instruments........................49
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6.11 Limitation on Transactions with Affiliates...............49
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6.12 Limitation on Sales and Leasebacks.......................49
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6.13 Limitation on Changes in Fiscal Year.....................49
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6.14 Limitation on Negative Pledge Clauses....................49
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6.15 Limitation on Lines of Business..........................50
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SECTION 7. EVENTS OF DEFAULT...............................................50
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SECTION 8. THE AGENT.......................................................52
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8.1 Appointment..............................................52
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8.2 Delegation of Duties.....................................52
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8.3 Exculpatory Provisions...................................53
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8.4 Reliance by Agent........................................53
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8.5 Notice of Default........................................53
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8.6 Non-Reliance on Agent and Other Lenders..................54
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8.7 Indemnification..........................................54
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8.8 Agent in Its Individual Capacity.........................54
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8.9 Successor Agent..........................................55
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8.10 Parity Obligations.......................................55
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SECTION 9. MISCELLANEOUS...................................................55
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9.1 Amendments and Waivers...................................55
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9.2 Notices..................................................56
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9.3 No Waiver; Cumulative Remedies...........................57
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9.4 Survival of Representations and Warranties...............57
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9.5 Payment of Expenses and Taxes............................57
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9.6 Successors and Assigns; Participations and Assignments...58
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9.7 Adjustments; Set-off.....................................60
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9.8 Counterparts.............................................61
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9.9 Severability.............................................61
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9.10 Integration..............................................61
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9.11 GOVERNING LAW............................................61
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9.12 Submission To Jurisdiction; Waivers......................61
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9.13 Acknowledgements.........................................62
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9.14 WAIVERS OF JURY TRIAL....................................62
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9.15 Confidentiality..........................................62
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9.16 Sharing of Liens.........................................63
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SCHEDULES
I Lenders' Addresses.
2.1 Lender's Commitments
2.2 Amortization of Loans
3.2 Absence of Certain Changes
3.4 Consents
3.9 Intellectual Property
3.11 Taxes
3.13 ERISA
3.16 Environmental Matters
6.1(a) Leverage Ratio
6.1(b) Minimum Consolidated EBITDA
6.1(c) Fixed Charge Ratio
6.2(d) Existing Indebtedness
6.3 Existing Liens
EXHIBITS
A Form of Note
B Form of Assignment and Acceptance
C Form of Borrower Deposit Account Control Agreement
D Form of Security Agreement
E Form of Subsidiary Deposit Account Control Agreement
F Form of Stock Pledge Agreement
G Form of Closing Certificate
H Form of Opinion
TERM LOAN AGREEMENT, dated as of October 21, 2003, among
INFOCROSSING, INC., a Delaware corporation (the "Borrower"), the several banks
and other financial institutions from time to time parties to this Agreement
(the "Lenders") and Infocrossing Agent, Inc., as agent for the Lenders
hereunder.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Borrower has issued Series A Cumulative
Convertible Participating Preferred Stock, par value $.01 per share (the
"Existing Preferred Stock") and warrants to purchase the Borrower's Common Stock
at a purchase price of $.01 per share (the "Existing Warrants") to Sandler
Capital Partners V, L.P., Sandler Capital Partners V FTE, L.P., Sandler
Technology Partners Subsidiary, LLC, Sandler Co-Investment Partners, L.P.,
Sandler Capital Partners V Germany, L.P., Price Family Limited Partners and
MidOcean Capital Investors, L.P. (collectively, the "Investors"); and
WHEREAS, on the date hereof, pursuant to the Exchange
Agreement (defined below), the Borrower will enter into a recapitalization
transaction (the "Recapitalization") in which the Investors will exchange all of
their outstanding Existing Preferred Stock and Existing Warrants of the Borrower
for (i) $55,000,000 in cash and (ii) loans outstanding under this Agreement in
the aggregate principal amount of $25,000,000 represented by promissory notes of
the Borrower issued under this Agreement.
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms shall
have the following meanings:
"Affiliate": with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person. For the purposes of this definition, "control"
when used with respect to any Person means the power to direct the management
and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agent": Infocrossing Agent, Inc., as the agent for the
Lenders under this Agreement and the other Loan Documents.
"Agreement": this Term Loan Agreement, as amended,
supplemented or otherwise modified from time to time.
"Applicable Law": as to any Person (a) any United States
federal, state, local or foreign law, statute, rule, regulation, order, writ,
injunction, judgment, decree or permit of any Governmental Authority and (b) any
rule or listing requirement of any applicable national stock exchange or listing
requirement of any national stock exchange or SEC recognized trading market, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"Assignee": as defined in subsection 9.6(c).
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an Assignee (with the consent of any party whose
consent is required by Section 9.6), and accepted by the Agent, in the form of
Exhibit B.
"Borrower Deposit Account Control Agreements": the Deposit
Account Control Agreements to be executed and delivered by the Borrower,
substantially in the form of Exhibit C or in a form acceptable to the Agent, as
the same may be amended, supplemented or otherwise modified from time to time.
"Borrower Property": as defined in subsection 3.16.
"Borrower Security Documents": the collective reference to
the Borrower Deposit Account Control Agreements, the Security Agreement and the
Stock Pledge Agreement.
"Business Day": a day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by
law to close.
"Camden Debentures": the unsecured Debentures issued by the
Borrower on February 1, 2002 to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Strategic Partners Fund, L.P.,
Strategic Associates, L.P., Camden Partners Strategic Fund II-A, L.P. and Camden
Partners Strategic Fund II-B, L.P., as purchasers, in the aggregate initial
principal amount of $10,000,000 pursuant to a securities purchase agreement
between the Borrower and such purchasers.
"Capital Expenditures": for any period, with respect to any
Person, the aggregate of all expenditures by such Person for the acquisition or
leasing (pursuant to a capital lease) of fixed or capital assets or additions to
equipment (including replacements, capitalized repairs and improvements during
such period) which are or should be capitalized under GAAP on a balance sheet of
such Person; provided that, Capital Expenditures shall not include investments
that constitute a Permitted Acquisition pursuant to subsection 6.9(h).
"Capital Stock": (i) with respect to any Person that is a
corporation, any and all shares, interests, participations, rights or other
equivalents (however designated) of corporate stock and (ii) with respect to any
other Person, any and all partnership or other equity interests of such Person
and any and all warrants or options to purchase any of the foregoing.
"Cash Equivalents": (a) securities with maturities of one year
or less from the date of acquisition issued or fully guaranteed or insured by
the United States Government or any agency thereof, (b) certificates of deposit
and eurodollar time deposits with maturities of one year or less from the date
of acquisition and overnight bank deposits of any Lender or of any commercial
bank having capital and surplus in excess of $500,000,000, (c) repurchase
obligations of any Lender or of any commercial bank satisfying the requirements
of clause (b) of this definition, having a term of not more than 30 days with
respect to securities issued or fully guaranteed or insured by the United States
Government, (d) commercial paper of a domestic issuer rated at least A-2 by
Standard and Poor's Rating Group ("S&P") or P-2 by ▇▇▇▇▇'▇ Investors Service,
Inc. ("Moody's"), (e) securities with maturities of one year or less from the
date of acquisition issued or fully guaranteed by any state, commonwealth or
territory of the United States, by any political subdivision or taxing authority
of any such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least A
by S&P or A by Moody's, (f) securities with maturities of one year or less from
the date of acquisition backed by standby letters of credit issued by any Lender
or any commercial bank satisfying the requirements of clause (b) of this
definition or (g) shares of money market mutual or similar funds which invest
exclusively in assets satisfying the requirements of clauses (a) through (f) of
this definition.
"Change of Control": means the occurrence of any of the
following events, whether in a single transaction or a series of related
transactions, and any other similar events: (a) any "person" or "group" (as such
terms are used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes
the "beneficial owner" (as defined in Rule 13d-3 and 13d-5 under the Exchange
Act, except that a person shall be deemed to have "beneficial ownership" of all
securities that such person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of more than 50% of the total Voting Capital Stock of the Borrower;
or (b) the Borrower consolidates with, or merges with or into, another Person or
Persons or sells, assigns, conveys, transfers, leases or otherwise disposes of
all or substantially all of its assets to any Person or Persons, or any Person
or Persons consolidate with, or merge with or into the Borrower, in any such
event pursuant to a transaction in which (i) the holders of the outstanding
Voting Capital Stock of the Borrower immediately prior to such transaction hold
less than 50% of the outstanding Voting Capital Stock of the surviving or
transferee company or its direct or indirect parent company immediately after
the transaction or (ii) immediately after such transaction any "person" or
"group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act)
is the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a person shall be deemed to have "beneficial
ownership" of all securities that such person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time),
directly or indirectly, of more than 50% of the total Voting Capital Stock of
the surviving or transferee company or its direct or indirect parent company
immediately after the transaction; or (c) during any consecutive two-year
period, individuals who at the beginning of such period constituted the Board of
Directors of the Borrower (together with any new directors whose election by the
Board of Directors of the Borrower or whose nomination for election by the
stockholders of the Borrower was approved by a vote of a majority of the
directors then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of the Borrower then in office provided, however, that the change in
individuals constituting the Board of Directors in connection with the closing
of the transactions contemplated by the Exchange Agreement shall be deemed not
to result in a Change of Control pursuant to this clause (c); or (d) any
transaction subject to Rule 13e-3 under the Exchange Act if following such Rule
13e-3 transaction such Person owns more than 50% of the total Voting Capital
Stock of the Borrower.
"Claim": for purposes of the definition of "Environmental
Claims" contained in subsection 3.16, as defined herein.
"Closing Date": the date on which the conditions precedent
set forth in Section 4 shall be satisfied.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral": all assets of the Loan Parties, now owned or
hereinafter acquired, upon which a Lien is purported to be created by any
Security Document.
"Commitment": with respect to each Lender, the commitment of
such Lender with respect to the Loans hereunder on the Closing Date, expressed
as an amount representing the maximum principal amount of the Loans to be held
by such Lender hereunder on the Closing Date after giving effect to the
Recapitalization. The amount of each Lender's Commitment is set forth on
Schedule 2.1. The aggregate amount of the Lenders' Commitments is $25,000,000.
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is part of a group which includes the Borrower and
which is treated as a single employer under Section 414(b) or (c) of the Code.
"Common Stock": the common stock, par value $.01 per share,
of the Borrower.
"Consolidated Current Assets": of any Person at any date, all
amounts (other than cash and Cash Equivalents) that would, in conformity with
GAAP, be set forth opposite the caption "total current assets" (or any like
caption) on a consolidated balance sheet of such Person and its Subsidiaries at
such date.
"Consolidated Current Liabilities": of any Person at any date,
all amounts that would, in conformity with GAAP, be set forth opposite the
caption "total current liabilities" (or any like caption) on a consolidated
balance sheet of such Person and its Subsidiaries at such date, but excluding,
with respect to the Borrower, (a) the current portion of any Funded Debt of the
Borrower and its Subsidiaries and (b), without duplication, all Indebtedness
consisting of revolving credit loans to the extent otherwise included therein.
"Consolidated EBITDA": for any period, Consolidated Net Income
of the Borrower and its Subsidiaries for such period plus, without duplication
and to the extent deducted in determining such Consolidated Net Income for such
period, the sum of (a) consolidated income tax expense, (b) consolidated
interest expense, amortization or writeoff of debt discount and debt issuance
costs and commissions, discounts and other fees and charges associated with
Indebtedness, (c) depreciation and amortization expense, (d) amortization of
intangibles (including, but not limited to, goodwill) and organization costs,
(e) any extraordinary non-cash charges and (f) any other non-cash charges, and
minus, to the extent included in determining such Consolidated Net Income for
such period, the sum of (a) any extraordinary non-cash gains and (b) any other
non-cash items, all as determined on a consolidated basis in accordance with
GAAP.
"Consolidated Fixed Charges": with respect to the Borrower and
its Subsidiaries on a consolidated basis for any period, the aggregate of (i)
regularly scheduled principal payments of all Funded Debt made or to be made by
the Borrower and its Subsidiaries on a consolidated basis during such period and
discount or premium relating to such Funded Debt for such period, whether
expensed or capitalized, (ii) Consolidated Interest Expense during such period,
both expensed and capitalized, and (iii) in respect of leases of real and
personal property (other than finance leases), the aggregate amount of rental
obligations or other commitments thereunder to make any direct or indirect
payment, whether as rent or otherwise, for fixed or minimum rentals or
percentage rentals or contingent rentals for such period, in each case
determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense": of any Person for any period,
total cash interest expense (including that attributable to Financing Leases) of
the Borrower and its Subsidiaries for such period with respect to all
outstanding Indebtedness of the Borrower and its Subsidiaries (including,
without limitation, all commissions, discounts and other fees and charges owed
by such Person with respect to letters of credit and bankers' acceptance
financing and net costs of such Person under hedge agreements in respect of
interest rates to the extent such net costs are allocable to such period in
accordance with GAAP).
"Consolidated Net Income": for any period, the net income or
loss of the Borrower and the Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP; provided that there shall be
excluded (a) the income of any Person (other than a Loan Party) in which any
other Person (other than the Borrower or any Subsidiary or any director holding
qualifying shares in compliance with applicable law) owns an equity interest,
except to the extent of the amount of dividends or other cash distributions
actually paid to the Borrower or any of the Subsidiaries during such period, and
(b) the income or loss of any Person accrued prior to the date it becomes
Subsidiary or is merged into or consolidated with the Borrower or any Subsidiary
or the date that such Person's assets are acquired by the Borrower or any
Subsidiary.
"Consolidated Total Debt": as of any date, the sum of (a) the
aggregate principal amount of Indebtedness of the Borrower and the Subsidiaries
outstanding as of such date, in the amount that would be reflected on a balance
sheet prepared as of such date on a consolidated basis in accordance with GAAP,
plus (b) the aggregate principal amount of Indebtedness of the Borrower and the
Subsidiaries outstanding as of such date that is not required to be reflected on
a balance sheet in accordance with GAAP, determined on a consolidated basis,
provided, that for purposes of clause (b) above, the term "Indebtedness" shall
not include contingent obligations of the Borrower or any Subsidiary as an
account party in respect of any letter of credit or letter or guaranty unless
such letter of credit or letter of guaranty supports an obligation that
constitutes Indebtedness.
"Consolidated Working Capital": at any date, the difference of
(a) Consolidated Current Assets of the Borrower and its Subsidiaries on such
date less (b) Consolidated Current Liabilities of the Borrower and its
Subsidiaries on such date.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Default": any of the events specified in Section 7, whether
or not any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"Deposit Account Control Agreements": the collective
reference to the Borrower Deposit Account Control Agreements and the
Subsidiaries Deposit Account Control Agreements.
"Dollars" and "$": dollars in lawful currency of the United
States of America.
"Domestic Subsidiary": any Subsidiary of the Borrower
organized under the laws of any jurisdiction within the United States.
"Environmental Claims": as defined in subsection 3.16.
"Environmental Laws": as defined in subsection 3.16.
"Equally and Ratably": means, in reference to sharing of any
Liens on Collateral or proceeds of the sale, collection and realization thereof
pursuant to the exercise of the rights and remedies of the Agent and the Lenders
under the Loan Documents, as among the holders of Loan Obligations and Parity
Obligations, shall be allocated and distributed to the holders of the Loan
Obligations and the Parity Obligations ratably in proportion to their respective
Obligations outstanding as of the date of such allocation or distribution.
For this purpose:
(1) Unfunded commitments to extend credit shall not be counted
as outstanding Obligations; and
(2) Obligations of the Borrower or any of its Subsidiaries in
respect of outstanding letters of credit, bank guarantees, bankers' acceptances
or other similar instruments which are part of the Parity Obligations shall be
counted as outstanding Obligations (whether or not contingent) provided, that,
(a) the sum of such Obligations under this clause (2), together with the
principal amount of all other Obligations part of the Parity Obligations, shall
not exceed the aggregate principal amount of the Parity Obligations secured
pursuant to subsection 6.3(l), and (b)(i) if such instrument is collateralized
by cash or Cash Equivalents, then such instrument shall not be counted as
outstanding Obligations and (ii) if any such instrument thereafter expires
without being funded, an equitable adjustment shall be made by the holders of
the Parity Obligations and the holders of the Parity Obligations shall pay over
to the Lenders the amount they would have received if such instrument had never
been outstanding so that the amount applied with respect to such instrument is
shared Equally and Ratably among the holders of the Parity Obligations and the
Lenders.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended, and all regulations promulgated thereunder, as in effect from time
to time.
"Event of Default": any of the events specified in Section 7,
provided that any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"Excess Cash Flow": for any fiscal year of the Borrower, the
difference, if any, of (a) the sum, without duplication, of (i) Consolidated Net
Income for such fiscal year, (ii) the amount of all non-cash charges (including
depreciation and amortization) deducted in arriving at such Consolidated Net
Income, (iii) the amount of the decrease, if any, in Consolidated Working
Capital for such fiscal year (without giving effect to any reduction in the
realization reserve of deferred income tax benefits), (iv) the aggregate net
amount of non-cash loss on the disposition of property by the Borrower and its
Subsidiaries during such fiscal year (other than sales of inventory in the
ordinary course of business), to the extent deducted in arriving at such
Consolidated Net Income and (v) the net increase during such fiscal year (if
any) in long-term deferred tax accounts of the Borrower minus (b) the sum,
without duplication, of (i) the amount of all non-cash credits included in
arriving at such Consolidated Net Income, (ii) the aggregate amount actually
paid by the Borrower and its Subsidiaries in cash during such fiscal year on
account of Capital Expenditures (except to the extent attributable to the
incurrence of capital lease obligations or other Indebtedness in connection with
such expenditures and except to the extent such expenditures are financed with
the proceeds of any Reinvestment Deferred Amount), (iii) the aggregate amount of
all optional prepayments of the Funded Debt during such fiscal year and
mandatory prepayments made pursuant to subsection 2.3(b) with the proceeds of
Prepayment Events described in clause (C) of the definition thereof during such
year to the extent such proceeds are included in the calculation of Consolidated
Net Income for such fiscal year, (iv) the aggregate amount of all regularly
scheduled principal payments of Funded Debt of the Borrower and its Subsidiaries
made during such fiscal year, (v) the amount of the increase, if any, in
Consolidated Working Capital for such fiscal year (without giving effect to any
increase in the realization reserve of deferred income tax benefits), (vi) the
aggregate net amount of non-cash gain on the disposition of property by the
Borrower and its Subsidiaries during such fiscal year (other than sales of
inventory in the ordinary course of business), to the extent included in
arriving at such Consolidated Net Income, and (vii) the net decrease during such
fiscal year (if any) in long-term deferred tax accounts of the Borrower.
"Exchange Act": Securities Exchange Act of 1934, as amended.
"Exchange Agreement": the Exchange Agreement entered into
between the Borrower and the Investors relating to the Recapitalization.
"Existing Preferred Stock": as defined in the recitals.
"Existing Warrants": as defined in the recitals.
"Financing Lease": any lease of property, real or personal,
the obligations of the lessee in respect of which are required in accordance
with GAAP to be capitalized on a balance sheet of the lessee.
"Fixed Early Prepayment Amount": an amount equal to 101% of
the outstanding aggregate principal amount of the Loans to be prepaid.
"Foreign Subsidiary": any Subsidiary of the Borrower
organized under the laws of any jurisdiction outside the United States of
America.
"Funded Debt": means, with respect to the Borrower and its
Subsidiaries as of the date of determination thereof, all Indebtedness of the
Borrower and its Subsidiaries on a consolidated basis outstanding at such time
(including the current portion thereof and amounts outstanding in the final year
of any Funded Debt) which matures more than one year after the date of
calculation, and any such Indebtedness maturing within one year from such date
of calculation which is renewable or extendable at the option of the obligor to
a date more than one year from such date and including in any event the Loans.
"GAAP": generally accepted accounting principles in the United
States of America, consistently applied, which are in effect on the date of this
Agreement; provided, that, if any changes in GAAP are hereafter required or
permitted by the rules, regulations, pronouncements and opinions of the
Financial Accounting Standards Board or the American Institute of Certified
Public Accountants (or successors thereto or agencies with similar functions)
and are adopted by the Borrower with the agreement of its independent certified
public accountants and such changes result in a change in the method of
calculation of any of the covenants, standards or terms found in this Agreement,
the Borrower may request that the parties hereto enter into negotiations in
order to amend such provisions so as to equitably reflect such changes;
provided, however, that no change in GAAP that would affect the method of
calculation of any of the covenants, standards or terms shall be given effect in
such calculations until such provisions are amended, in a manner satisfactory to
the Required Lenders and the Borrower, to so reflect such change in GAAP.
"Governmental Authority": (i) any foreign, Federal, state or
local court or governmental or regulatory agency or authority, (ii) any
arbitration board, tribunal or mediator and (iii) any national stock exchange or
SEC recognized trading market on which securities issued by the Borrower or any
of the Subsidiaries are listed or quoted.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to induce
the creation of which the guaranteeing person has issued a reimbursement,
counterindemnity or similar obligation, in either case guaranteeing or in effect
guaranteeing any Indebtedness, leases, dividends or other obligations (the
"primary obligations") of any other third Person (the "primary obligor") in any
manner, whether directly or indirectly, including, without limitation, any
obligation of the guaranteeing person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefore, (ii) to advance or supply funds (1) for the
purchase or payment of any such primary obligation or (2) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (iv) otherwise to assure or hold harmless the owner
of any such primary obligation against loss in respect thereof; provided,
however, that the term Guarantee Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Guarantee Obligation of any guaranteeing person shall be deemed to
be the lower of (a) an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Guarantee Obligation is made and (b)
the maximum amount for which such guaranteeing person may be liable pursuant to
the terms of the instrument embodying such Guarantee Obligation, unless such
primary obligation and the maximum amount for which such guaranteeing person may
be liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by the Borrower in good
faith.
"Guarantor": any Person party to a Security Agreement other
than the Borrower and the Agent.
"Hazardous Materials": as defined in subsection 3.16.
"Indebtedness": with respect to the Borrower or any specified
Person, all obligations, contingent or otherwise, which in accordance with GAAP
are required to be classified upon the balance sheet of the Borrower (or other
specified Person) as liabilities, but in any event including (without
duplication):
(a) all indebtedness of such Person for borrowed money,
(b) for the deferred purchase price of assets, securities,
property or services, including related non-competition, consulting and stock
repurchase obligations (other than current trade liabilities incurred in the
ordinary course of business),
(c) any other indebtedness of such Person which is evidenced
by a note, bond, debenture or similar instrument,
(d) all obligations of such Person upon which interest charges
are customarily paid,
(e) all obligations of such Person under conditional sale or
other title retention agreements relating to property acquired by such Person,
(f) all obligations of such Person under Financing Leases or
synthetic leases or other similar off-balance sheet leases,
(g) all obligations of such Person in respect of bankers'
acceptances, letters of credit, hedging arrangements or similar facilities,
(h) all liabilities secured by any Lien on any property owned
or acquired by such Person even though such Person has not assumed or otherwise
become liable for the payment thereof,
(i) obligations that are immediately and directly due and
payable out of the proceeds of or production from property,
(j) mandatory redemption or cash dividend rights on Capital
Stock (or other equity securities), or
(k) all Guarantee Obligations in respect of the Indebtedness
of others.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": domestic and foreign patents, patent
applications, patent licenses, software licenses, know-how licenses, trade
names, trademarks, copyrights, unpatented inventions, service marks, trademark
registrations and applications, service ▇▇▇▇ registrations and applications,
copyright registrations and applications, uniform resource locators, Internet
domain names, trade secrets and other confidential and proprietary information.
"Interest Payment Date": the last day of each March, June,
September and December of each year.
"Interest Rate": 9% per annum.
"Investors": as defined in the recitals.
"Leverage Ratio": on any date, with respect to the Borrower
and its Subsidiaries on a consolidated basis, the ratio of (a) Consolidated
Total Debt as of such date to (b) Consolidated EBITDA for the period of four
consecutive fiscal quarters of the Borrower ended on such date (or, if such date
is not the last day of a fiscal quarter, ended on the last day of the fiscal
quarter of the Borrower most recently ended prior to such date).
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement and any
Financing Lease having substantially the same economic effect as any of the
foregoing).
"Loan": any term loan held by any Lender pursuant to this
Agreement and such term loans being referred to collectively as the "Loans".
"Loan Documents": this Agreement, the Notes, the Syndication
Letter, the Security Documents and all other agreements, instruments and
certificates contemplated hereby and thereby, including documents contemplated
under subsection 8.10.
"Loan Obligations": (a) the due and punctual payment by the
Borrower of (i) the principal of, and premium, if any, and interest (including
interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding) on the Loans, when and as due, whether at
maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, and (ii) all other monetary obligations, including fees, costs,
expenses and indemnities, whether primary, secondary, direct, contingent, fixed
or otherwise (including monetary obligations incurred during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding), of the Borrower to the Agent
and the Lenders under the Loan Documents, (b) the due and punctual performance
of all covenants, agreements, obligations and liabilities of the Borrower under
or pursuant to the Loan Documents, and (c) the due and punctual payment and
performance of all the covenants, agreements, obligations and liabilities of the
Guarantors under or pursuant to the Loan Documents.
"Loan Parties": the Borrower and each Subsidiary of the
Borrower which is a party to a Loan Document.
"Material Adverse Effect": a material adverse effect on (a)
the condition (financial or otherwise), business, properties, assets,
liabilities, operations or results of operations of the Borrower and the
Subsidiaries, taken as a whole or (b) the validity or enforceability of this or
any of the other Loan Documents or the rights or remedies of the Agent or the
Lenders hereunder or thereunder.
"Maturity Date": October 21, 2008.
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Proceeds": means, with respect to (a) any sale, transfer
or other disposition of any property or asset of the Borrower or any Subsidiary,
(b) any casualty or condemnation event or (c) any other event set forth in the
definition of Prepayment Event, (i) the cash proceeds received in respect of
such event, including (x) in the case of a casualty, insurance proceeds, and (y)
in the case of a condemnation or similar event, condemnation awards and similar
payments, net of (ii) the sum of (x) all reasonable fees and out-of-pocket
expenses paid by the Borrower and the Subsidiaries to third parties (other than
Affiliates) in connection with such event and (y) the amount of taxes paid or
reasonably estimated to be payable as a result thereof (after taking into
account any available tax credits or deductions and any tax sharing
arrangements).
"Non-Excluded Taxes": as defined in subsection 2.8(a).
"Note": any of the promissory notes executed pursuant to
subsection 2.2(e).
"Obligations": means the principal, interest, premium, fees,
indemnifications, reimbursements, expenses, damages and other liabilities
payable under the documentation governing any Indebtedness.
"Parity Obligations": all Obligations in respect of
Indebtedness permitted to be incurred pursuant to subsection 6.2(i) but only to
the extent that such Indebtedness is permitted to be and is actually secured by
a pari passu Lien pursuant to subsection 6.3(l).
"Participant": as defined in subsection 9.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Permitted Acquisition": the acquisition of all or any portion
of the assets or stock or other equity interests of any Person engaged in a
business that would be permitted under subsection 6.15, including pursuant to a
merger or consolidation; provided that all such acquisitions are approved by the
Board of Directors and stockholders, if required, of the Borrower and the
acquiree and are not otherwise hostile and the Borrower is the surviving entity;
and provided further, that (i) on the closing date of such acquisition, both
before and immediately after giving effect to such proposed acquisition, no
Default or Event of Default has occurred or will occur or be continuing, (ii)
after giving effect to any such acquisition there shall be no negative effect on
Consolidated EBITDA on a pro forma basis, and the Borrower would remain in
compliance with the covenants set forth in subsection 6.1 on a pro forma basis
(determined on a pro forma basis (A) as of the last day of the most recently
ended fiscal quarter of the Borrower for which financial statements are
available (computed on the basis of (X) balance sheet amounts as of the most
recently completed fiscal quarter, and (Y) income statement amounts for the most
recently completed period of four consecutive fiscal quarters) and (B) on the
basis of twelve month projections updated to give effect to such acquisition)
and the Borrower delivers a certificate of a Responsible Officer certifying
compliance with this clause (ii) and (iii) any Person or business acquired
becomes a wholly-owned Subsidiary of the Borrower or a Guarantor following such
acquisition and becomes a Guarantor, and the Borrower shall, and shall cause any
applicable Subsidiary to, execute any documents and take all actions that may be
required under applicable law or that the Agent may reasonably request, in order
to comply with subsection 5.10 herein, all in form and substance satisfactory to
the Agent.
"Person": an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan which
is covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5)
of ERISA.
"Prepayment Event": means (A) any sale, transfer or other
disposition of any property or asset of the Borrower or any Subsidiary
(including pursuant to a sale and leaseback transaction) (other than sales,
transfers or other dispositions permitted under subsections 6.5(c), 6.5(d) and
6.5(e) hereof) or (B) any casualty or other insured damage to, or any taking
under power of eminent domain or by condemnation or similar proceeding of, any
property or asset of the Borrower or any Subsidiary after the Closing Date or
(C) the receipt by the Borrower or any Subsidiary of any unscheduled payment in
excess of $1,000,000 during any fiscal year of the Borrower under any contract
with any third Person including, without limitation, an amount on account of
early termination of such contract; provided that such events shall not
constitute "Prepayment Events" to the extent that (1) the aggregate Net Proceeds
from all such casualty events are less than $250,000 during any fiscal year of
the Borrower or (2) the aggregate Net Proceeds from the sale, transfer or other
disposition of assets of the Borrower or any Subsidiary are less than $250,000
during any fiscal year of the Borrower.
"Private Placement": as defined in subsection 4(f).
"Pro Rata Share: as to any Lender, at any time, the percentage
which the aggregate principal amount of such Lender's Loans then outstanding
constitutes of the aggregate principal amount of the total Loans then
outstanding at such time.
"Recapitalization": as defined in the recitals.
"Register": as defined in subsection 9.6(d).
"Regulation U": Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.
"Reinvestment Amount": with respect to any Reinvestment Event,
the amount expended prior to the relevant Reinvestment Prepayment Date to
acquire real property, equipment or other tangible assets used in or useful in
the Borrower's business.
"Reinvestment Deferred Amount": with respect to any
Reinvestment Event, the aggregate Net Proceeds received by the Borrower or any
of its Subsidiaries in connection therewith that are not applied to prepay the
Loans pursuant to subsection 2.3(b) as a result of the delivery of a
Reinvestment Notice.
"Reinvestment Event": any Prepayment Event in respect of
which the Borrower has delivered a Reinvestment Notice.
"Reinvestment Notice": with respect to Net Proceeds from a
Prepayment Event specified in paragraphs (A) or (B) of the definition of
Prepayment Event, a written notice executed by a Responsible Officer stating (i)
that no Default or Event of Default has occurred and is continuing, (ii) with
respect to Net Proceeds from a Prepayment Event specified in paragraph (A) of
the definition of Prepayment Event, the aggregate amount of Reinvestment Amounts
expended by the Borrower with respect to Prepayment Events specified in
paragraph (A) of the definition of Prepayment Event (directly or indirectly
through a Subsidiary) during the term of this Agreement does not and will not
exceed $5,000,000 (including the specified portion of the Net Proceeds the
subject of such Reinvestment Notice) and specifying such aggregate amount of
such Reinvestment Amounts to date and (iii) that the Borrower (directly or
indirectly through a Subsidiary) intends and expects to use all or a specified
portion of the Net Proceeds of any Prepayment Event to acquire real property,
equipment or other tangible assets used in or useful in its business.
"Reinvestment Prepayment Amount": with respect to any
Reinvestment Event, the Reinvestment Deferred Amount relating thereto less the
Reinvestment Amount relating thereto.
"Reinvestment Prepayment Date": with respect to any
Reinvestment Event, the earlier of (a) the date occurring 180 days after such
Reinvestment Event and (b) the date on which the Borrower shall have determined
not to, or shall have otherwise ceased to, acquire real property, equipment or
other tangible assets used in or useful in the Borrower's business with all or
any portion of the relevant Reinvestment Deferred Amount.
"Release": as defined in subsection 3.16.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
"Reportable Event": any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the thirty day notice
period is waived under subsections 13, 14, 16, 18, 19 or 20 of PBGC Reg.ss.2615.
"Required Lenders": at any time, Lenders whose Pro Rata
Shares aggregate at least 51%.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Responsible Officer": the chief executive officer and the
president of the Borrower or, with respect to financial matters, the chief
financial officer of the Borrower.
"Restricted Payment": means any dividend or other distribution
(whether in cash, securities or other property) with respect to any Capital
Stock in the Borrower or any Subsidiary, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any such Capital Stock or any option, warrant or other right to
acquire any such Capital Stock.
"SEC": United States Securities and Exchange Commission.
"SEC Filings": all reports, registration statements and other
filings filed by the Borrower with the SEC (and all notes, exhibits and
schedules thereto and all documents incorporated by reference therein).
"Securities Act": the Securities Act of 1933, as amended.
"Security Agreement": the Guarantee and Security Agreement to
be executed and delivered by the Borrower and the Subsidiaries, substantially in
the form of Exhibit D, as the same may be amended, supplemented or otherwise
modified from time to time.
"Security Documents": the collective reference to the Deposit
Account Control Agreements, the Security Agreement, the Stock Pledge Agreement
and all other security documents hereafter delivered to the Agent granting a
Lien on any asset or assets of any Person to secure the obligations and
liabilities of the Borrower hereunder and under any of the other Loan Documents
or to secure any guarantee of any such obligations and liabilities.
"Single Employer Plan": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Stock Pledge Agreement": the Stock Pledge Agreement to be
executed and delivered by the Borrower and each relevant Subsidiary,
substantially in the form of Exhibit F, as the same may be amended, supplemented
or otherwise modified from time to time.
"Subsidiaries Deposit Account Control Agreements": the Deposit
Account Control Agreements to be executed and delivered by each Subsidiary,
substantially in the form of Exhibit E or in a form acceptable to the Agent, as
the same may be amended, supplemented or otherwise modified from time to time.
"Subsidiaries Security Documents": the collective reference
to the Subsidiaries Deposit Account Control Agreements, the Security Agreement
and the Stock Pledge Agreement.
"Subsidiary": as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests having
such power only by reason of the happening of a contingency) to elect a majority
of the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise qualified, all references to a "Subsidiary" or
to "Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries
of the Borrower.
"Syndication Letter": the Syndication Letter, to be executed
and delivered by the Borrower, the Agent and the Investors, as the same may be
amended, supplemented or otherwise modified from time to time.
"Transferee": as defined in subsection 9.6(f).
"Voting Capital Stock": means with respect to any Person,
securities of any class or classes of Capital Stock in such Person ordinarily
entitling the holders thereof (whether at all times or at the times that such
class of Capital Stock has voting power by reason of the happening of any
contingency) to vote in the election of members of the board of directors or
comparable governing body of such Person.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in any Notes or any certificate or other document made or delivered
pursuant hereto.
(b) As used herein and in any Notes, and any certificate or other document made
or delivered pursuant hereto, accounting terms relating to the Borrower and its
Subsidiaries not defined in subsection 1.1 and accounting terms partly defined
in subsection 1.1, to the extent not defined, shall have the respective meanings
given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement, and Section, subsection, Schedule
and Exhibit references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally applicable to
both the singular and plural forms of such terms.
SECTION 2. GENERAL TERMS
2.1 Loans. (a) Immediately upon the effectiveness of this Agreement and on the
Closing Date, pursuant to the Exchange Agreement, the Borrower agrees to
exchange all of the outstanding Existing Preferred Stock and the outstanding
Existing Warrants of the Borrower owned by the Investors for (i) $55,000,000 in
cash and (ii) Loans outstanding under this Agreement in the aggregate principal
amount of $25,000,000 represented by Notes issued by the Borrower in favor of
the Investors in their capacity as initial Lenders, and deliver the
aforementioned to the Investors.
(b) Subject to the terms and conditions hereof, each Lender severally agrees to
make a Loan to the Borrower on the Closing Date in an amount not to exceed the
amount of the Commitment of such Lender then in effect by exchanging its
Existing Preferred Stock and Existing Warrants as set forth in the Exchange
Agreement. The Borrower agrees to issue Notes to the Lenders representing the
Loans outstanding under this Agreement. Amounts paid or prepaid in respect of
the Loans may not be reborrowed. The Lenders are under no obligation to make any
additional loans to the Borrower hereunder after the Closing Date.
2.2 Repayment of Loans; Evidence of Debt. (a) (i) In the event that any of the
Investors sells, transfers or assigns any of its Loans to an unaffiliated third
Person who is not another Investor or an Affiliate thereof pursuant to
subsection 9.6, the Borrower hereby unconditionally promises to pay to the Agent
for the account of each Lender the percentage of the unpaid principal amount of
the Loans sold, transferred or assigned by such Investor (or any additional
assignee of such Loans) specified on Schedule 2.2 on each date set forth on
Schedule 2.2, commencing December 31, 2003.
(ii) To the extent not otherwise paid pursuant to subsection 2.2(a)(i), the
Borrower hereby unconditionally promises to pay to the Agent for the
account of each Lender the then unpaid principal amount of the Loan on
the Maturity Date (or the then unpaid principal amount of such Loan, on
the date that the Loans become due and payable pursuant to Section 7).
(iii) In any event, to the extent not previously paid, all Loans shall be due
and payable on the Maturity Date.
(iv) The Borrower hereby further agrees to pay interest on the unpaid
principal amount of the Loans from time to time outstanding from the
date hereof until payment in full thereof at the rates per annum, and
on the dates, set forth in subsection 2.4.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing indebtedness of the Borrower to such
Lender, including the amounts of principal and interest payable and
paid to such Lender from time to time under this Agreement.
(c) The Agent shall maintain the Register pursuant to subsection 9.6(d),
and a subaccount therein for each Lender, in which shall be recorded
(i) the amount of Loan made hereunder, (ii) any assignments of Loans
pursuant to subsection 9.6, (iii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower
to each Lender hereunder and (iv) both the amount of any sum received
by the Agent hereunder from the Borrower and each Lender's share
thereof.
(d) The entries made in the Register and the accounts of each Lender
maintained pursuant to subsection 2.2(b) shall, to the extent permitted
by applicable law, be prima facie evidence of the existence and amounts
of the obligations of the Borrower therein recorded; provided, however,
that the failure of any Lender or the Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect
the obligation of the Borrower to repay (with applicable interest and
premium, if any) the Loans held by such Lender in accordance with the
terms of this Agreement.
(e) The Borrower agrees that, upon the request to the Agent by any Lender,
the Borrower will execute and deliver to such Lender a promissory note
of the Borrower evidencing the Loan of such Lender, substantially in
the form of Exhibit A with appropriate insertions as to date and
principal amount (a "Note").
2.3 Prepayments. (a) The Borrower shall have the right at any time and from time
to time to prepay the Loans in whole or in part subject to the requirements of
this Section without penalty or premium; provided that if the Borrower has
entered into an agreement for a Change of Control or the Borrower or any other
Person otherwise has publicly announced its intention to consummate a
transaction that would institute a Change of Control, the Borrower may only
prepay the Loans at a prepayment amount equal to the Fixed Early Prepayment
Amount, plus accrued and unpaid interest to the date of prepayment.
(b) In the event and on each occasion that any Net Proceeds are received by or
on behalf of the Borrower or any Subsidiary in respect of any Prepayment Event,
then, unless a Reinvestment Notice shall be delivered with respect to Net
Proceeds from a Prepayment Event specified in paragraphs (A) or (B) of the
definition of Prepayment Event, the Borrower shall, within three (3) Business
Days after such Net Proceeds are received, prepay Loans in an aggregate amount
equal to such Net Proceeds; provided, that, on each Reinvestment Prepayment
Date, the Loans shall be repaid in an amount equal to the Reinvestment
Prepayment Amount with respect to the Reinvestment Event.
(c) Following the end of each fiscal year of the Borrower, commencing with the
fiscal year that begins on January 1, 2005, for which there is any Excess Cash
Flow, the Borrower shall prepay Loans in an aggregate amount equal to 75% of
Excess Cash Flow for such fiscal year. Each prepayment pursuant to this
paragraph shall be made on or before the date on which financial statements are
delivered pursuant to subsection 5.1(a) with respect to the fiscal year for
which Excess Cash Flow is being calculated (and in any event within 90 days
after the end of such fiscal year).
(d) In the event and on each occasion that the Borrower or any Subsidiary after
the Closing Date receives cash proceeds from the sale of Capital Stock or other
equity securities, or otherwise receives a cash capital contribution from any
third Person, or raises any private or public capital in cash (other than cash
proceeds received in connection with the exercise of options and warrants to
acquire the common stock of the Borrower that are issued or outstanding on the
date hereof or issued under a Plan or pursuant to the Syndication Letter, or
pursuant to anti-dilution provisions in such options or warrants or applicable
thereto), the Borrower shall, within three (3) Business Days after the receipt
thereof, prepay Loans in an amount equal to 50% of the net amount received.
(e) Upon the occurrence of a Change of Control, the Borrower shall, within three
(3) Business Days after the occurrence thereof, prepay all of the Loans at a
prepayment price equal to the Fixed Early Prepayment Amount, plus accrued and
unpaid interest, if any, to the date of prepayment.
(f) In the event of a prepayment hereunder, the Borrower shall give at least
three (3) Business Days' irrevocable notice to the Agent and the Lenders,
specifying the date, the reason for the prepayment and amount of prepayment. If
any such notice is given, the amount specified in such notice shall be due and
payable on the date specified therein, together with any amounts payable
pursuant to subsection 2.9 and accrued interest to such date on the amount
prepaid. Each prepayment of principal of the Loans pursuant to subsection 2.3(a)
shall be applied pro rata against the remaining scheduled payments of principal
under subsection 2.2. Partial prepayments of the Loans (other than pursuant to
subsection 2.3(a)) shall be applied to the installments of principal thereof in
the inverse order of their scheduled maturities. Amounts prepaid on account of
the Loans may not be reborrowed. Partial prepayments under subsection 2.3(a)
shall be in an aggregate principal amount of $250,000 or a whole multiple
thereof.
2.4 Interest Rates and Payment Dates. (a) Each Loan shall bear interest
at a rate per annum equal to the Interest Rate.
(b) If all or a portion of (i) any principal of any Loan, (ii) any interest
payable thereon or (iii) any other amount payable hereunder shall not be paid
when due (whether at the stated maturity, by acceleration or otherwise), the
principal of the Loans and any such overdue interest or other amount shall bear
interest at a rate per annum equal to the Interest Rate plus 3%, in each case
from the date of such non-payment until such overdue principal, interest or
other amount is paid in full (as well after as before judgment).
(c) Interest shall be payable in arrears on the last day of each March, June,
September and December, commencing December 31, 2003 (each an "Interest Payment
Date"), provided that interest accruing pursuant to paragraph (b) of this
subsection shall be payable from time to time on demand.
2.5 Computation of Interest. (a) Interest shall be calculated on the basis
of a 360-day year and payable for the actual number of days elapsed.
(b) Each determination of an interest rate by the Agent pursuant to any
provision of this Agreement shall be conclusive and binding on the Borrower and
the Lenders in the absence of manifest error.
2.6 Pro Rata Treatment and Payments. Each payment (including each prepayment) by
the Borrower on account of principal of, interest and premium, if any, on the
Loans shall be made pro rata according to the respective Pro Rata Share of the
outstanding principal amount of the Loans then held by the Lenders. All payments
(including prepayments) to be made by the Borrower hereunder, whether on account
of principal, interest, fees or otherwise, shall be made without set off or
counterclaim and shall be made prior to 12:00 Noon, New York City time, on the
due date thereof to the Lenders (or, if the Agent so directs, directly to the
account of the Agent at the office specified in subsection 9.2), for the account
of the Lenders, at the offices of the Lenders notified from time to time to the
Borrower by the Agent, in Dollars and in immediately available funds. The Agent
shall distribute such payments to the Lenders promptly upon receipt in like
funds as received. If any payment hereunder becomes due and payable on a day
other than a Business Day, such payment shall be extended to the next succeeding
Business Day, and, with respect to payments of principal, interest and premium,
if any, thereon shall be payable at the then applicable rate during such
extension.
2.7 Requirements of Law. (a) If the adoption of or any change in any Requirement
of Law or in the interpretation or application thereof or compliance by any
Lender with any request or directive (whether or not having the force of law)
from any central bank or other Governmental Authority made subsequent to the
date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever with respect
to this Agreement, any Note or any Loan made by it, or change the basis
of taxation of payments to such Lender in respect thereof (except for
Non-Excluded Taxes and income taxes and franchise taxes);
(ii) shall impose, modify or hold applicable any reserve, special deposit,
compulsory loan or similar requirement against assets held by, deposits
or other liabilities in or for the account of, advances, loans or other
extensions of credit by, or any other acquisition of funds by, any
office of such Lender; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Loans or to reduce any amount receivable hereunder in
respect thereof, then, in any such case, the Borrower shall promptly pay such
Lender such additional amount or amounts as will compensate such Lender for such
increased cost or reduced amount receivable.
(b) If any Lender (other than an Investor) shall have determined that the
adoption of or any change in any Requirement of Law regarding capital adequacy
or in the interpretation or application thereof or compliance by such Lender or
any corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder to a level below that which such Lender
or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy) by an amount deemed by such Lender to
be material, then from time to time, the Borrower shall promptly pay to such
Lender such additional amount or amounts as will compensate such Lender for such
reduction.
(c) If any Lender becomes entitled to claim any additional amounts pursuant to
this subsection, it shall promptly notify the Borrower (with a copy to the
Agent) of the event by reason of which it has become so entitled. A certificate
as to any additional amounts payable pursuant to this subsection submitted by
such Lender to the Borrower (with a copy to the Agent) shall be conclusive in
the absence of manifest error. The agreements in this subsection shall survive
the termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder.
2.8 Taxes. (a) (i) All payments made by the Borrower under this Agreement and
any Notes shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding net income taxes and franchise or similar taxes (imposed in
lieu of net income taxes), including branch profits tax and minimum tax imposed
on the Agent or any Lender as a result of a present or former connection between
the Agent or such Lender and the jurisdiction of the Governmental Authority
imposing such tax or any political subdivision or taxing authority thereof or
therein (other than any such connection arising solely from the Agent or such
Lender having executed, delivered or performed its obligations or received a
payment under, or enforced, this Agreement or any Note). If any such
non-excluded taxes, levies, imposts, duties, charges, fees deductions or
withholdings ("Non-Excluded Taxes") or Other Taxes are required to be withheld
from any amounts payable to the Agent or any Lender hereunder or under any Note
(A) the amounts so payable to the Agent or such Lender shall be increased as
necessary so that after making all required deductions of Non-Excluded Taxes or
Other Taxes (including deductions of Non-Excluded Taxes or Other Taxes
applicable to additional sums payable under this subsection) the Agent or such
Lender (as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, and (B) the Borrower shall pay the
full amount withheld to the relevant Governmental Authority in accordance with
applicable law, provided, however, that the Borrower shall not be required to
increase any such amounts payable to any Lender that is not organized under the
laws of the United States of America or a state thereof (x) if such Lender fails
to comply with the requirements of paragraph (b) of this subsection or (y) to
the extent of any Non-Excluded Taxes that are in effect and would apply to a
payment under this Agreement or any Note made to such Lender as of the date such
Lender becomes a party to this Agreement or any Note, or, in the case of any
other Lender which changes its lending office with respect to the Loans or any
Note to an office outside the U.S., any Non-Excluded Taxes that are in effect
and would apply to a payment to such Lender as of the date of the change of the
lending office.
(ii) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law. "Other Taxes"
shall mean any and all present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or
enforcement of, or otherwise with respect to, this Agreement.
(iii) Whenever any Non-Excluded Taxes or Other Taxes are payable by the
Borrower, as promptly as possible thereafter the Borrower shall send to
the Agent for its own account or for the account of such Lender, as the
case may be, a certified copy of an original official receipt received
by the Borrower showing payment thereof, or, if the Borrower cannot,
using reasonable efforts, obtain such receipts, other evidence of such
payment by the Borrower reasonably satisfactory to the Agent or such
Lender. If the Borrower fails to pay any Non-Excluded Taxes or Other
Taxes when due to the appropriate taxing authority or fails to remit to
the Agent the required receipts or other required documentary evidence,
the Borrower shall indemnify the Agent and the Lenders for any
incremental taxes, interest or penalties that may become payable by the
Agent or any Lender as a result of any such failure.
(iv) The agreements in this subsection shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable
hereunder.
(b) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof shall:
(i) deliver to the Borrower and the Agent two duly completed copies of
United States Internal Revenue Service Form W-8BEN or Form W-8ECI (or
successor applicable form) claiming that amounts received by the Lender
under this Agreement are either exempt from United States federal
withholding tax under an applicable tax treaty or are effectively
connected income, as the case may be, on or before the date it becomes
a party to this Agreement;
(ii) deliver to the Borrower and the Agent two further copies of any such
form or certification on or before the date that any such form or
certification expires or becomes obsolete and after the occurrence of
any event requiring a change in the most recent form previously
delivered by it to the Borrower; and
(iii) obtain such extensions of time for filing and complete such forms or
certifications as may reasonably be requested by the Borrower or the
Agent;
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender so advises the Borrower and the Agent.
Such Lender shall certify that it is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal income
taxes. Each Person that shall become a Lender or a Participant pursuant to
subsection 9.6 shall, upon the effectiveness of the related transfer, be
required to provide all of the forms and statements required pursuant to this
subsection, provided that in the case of a Participant such Participant shall
furnish all such required forms and statements to the Lender from which the
related participation shall have been purchased.
(c) If the Borrower is required to pay additional amounts to or for the account
of any Lender pursuant to this subsection 2.8 as a result of a change in law or
treaty occurring after such Lender first became a party to this Agreement, and
such Lender has a lending office in another jurisdiction, then such Lender will,
at the request of the Borrower, change the jurisdiction of its applicable
lending office if such change (i) will eliminate or reduce any such additional
payment which may thereafter accrue and (ii) is, in such Lender's sole,
reasonable discretion, determined not to be materially disadvantageous or cause
unreasonable hardship to such Lender, provided that fees, charges, costs or
expenses that are related to such change shall be borne by the Borrower on
behalf of a Lender, and the mere existence of such expenses, fees or costs shall
not be deemed to be materially disadvantageous or cause undue hardship to the
Lender.
(d) If and to the extent that any Lender is able, in its sole opinion, to
receive any tax refund arising out of or in conjunction with any deduction or
withholding which gives rise to an obligation on the Borrower to pay any
Non-Excluded Taxes or Other Taxes pursuant to this subsection 2.8 then such
Lender shall, to the extent that in its sole opinion it can do so without
prejudice to the retention of the refund and without any other adverse tax
consequences for such Lender, reimburse to the Borrower at such time as such
refund shall have actually been received by such Lender such amount as such
Lender shall, in its sole opinion, have determined to be attributable to the
relevant deduction or withholding and as will leave such Lender in no better or
worse position than it would have been in if the payment of such Non-Excluded
Taxes or Other Taxes had not been required.
2.9 Indemnity. The Borrower agrees to indemnify each Lender and to hold each
Lender harmless from any loss or expense which such Lender may sustain or incur
as a consequence of default by the Borrower in making any prepayment after the
Borrower has given a notice thereof in accordance with the provisions of this
Agreement. Such indemnification may include an amount equal to the excess, if
any, of (i) the amount of interest which would have accrued on the amount so
prepaid, for the period from the date of such prepayment to the last day of such
Interest Payment Date in each case at the applicable rate of interest for such
Loans provided for herein over (ii) the amount of interest (as reasonably
determined by such Lender) which would have accrued to such Lender on such
amount by placing such amount on deposit for a comparable period with leading
banks in the interbank eurodollar market. This covenant shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.10 Agent Fee. In the event that any of the Lenders sells, transfers or assigns
any of its Loans to an unaffiliated third Person who is not another Investor or
an Affiliate thereof pursuant to subsection 9.6, the Borrower agrees to pay to
the Agent for its own account an annual administrative fee of $25,000, payable
in full on the effective date of such sale, transfer and assignment (such fee
being pro-rated for the first year in which such fee becomes payable) and each
annual anniversary of the Closing Date thereafter.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Agent and the Lenders to enter into this
Agreement and to make the Loans, the Borrower hereby represents and warrants to
the Agent and each Lender that:
3.1 Financial Condition. (a) Since January 1, 2001, each of the Borrower and
each Subsidiary have duly filed all forms, reports, schedules, proxy statements
and documents required to be filed by it with the SEC. True and correct copies
of all filings made by the Borrower and each Subsidiary with the SEC since such
date and prior to the date hereof (the "SEC Reports"), whether or not under
Requirement of Law and including any registration statement filed by the
Borrower or a Subsidiary under the Securities Act, have been either made
available or are publicly available to the Agent. As of their respective dates,
the SEC Reports (other than preliminary material) complied in all material
respects with the requirements of the Securities Act or the Exchange Act, as
applicable, and the rules and regulations of the SEC thereunder applicable to
such SEC Reports and none of the SEC Reports, at the time filed, contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. No other
Person included in the Loan Parties is subject to periodic reporting
requirements of the Exchange Act or is otherwise required to file documents with
the SEC or comparable Governmental Authority or any national securities exchange
or quotation service.
(b) The consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at December 31, 2002 and the related consolidated statements of
income and of cash flows for the fiscal year ended on such date, reported on by
Ernst & Young LLP, copies of which have heretofore been furnished to each
Lender, present fairly the consolidated financial condition of the Borrower and
its consolidated Subsidiaries as at such date, and the consolidated results of
their operations and their consolidated cash flows for the fiscal year then
ended. The unaudited consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at June 30, 2003 and the related unaudited
consolidated statements of income and of cash flows for the six-month period
ended on such date, certified by a Responsible Officer, copies of which have
heretofore been furnished to each Lender, present fairly the consolidated
financial condition of the Borrower and its consolidated Subsidiaries as at such
date, and the consolidated results of their operations and their consolidated
cash flows for the six-month period then ended (subject to normal year-end audit
adjustments and the absence of footnotes). All such financial statements,
including the related schedules and notes thereto, have been prepared in
accordance with GAAP applied consistently throughout the periods involved
(except as approved by such accountants or Responsible Officer, as the case may
be, and as disclosed therein). Neither the Borrower nor any of its consolidated
Subsidiaries had, at the date of the most recent balance sheet referred to
above, any material Guarantee Obligation, contingent liability or liability for
taxes, or any long-term lease or unusual forward or long-term commitment,
including, without limitation, any interest rate or foreign currency swap or
exchange transaction, which is not reflected in the foregoing statements or in
the notes thereto. During the period from June 30, 2003 to and including the
date hereof there has been no sale, transfer or other disposition by the
Borrower or any of its consolidated Subsidiaries of any material part of its
business or property and no purchase or other acquisition of any business or
property (including any capital stock of any other Person) material in relation
to the consolidated financial condition of the Borrower and its consolidated
Subsidiaries at June 30, 2003.
3.2 Absence of Certain Changes. (a) Except (i) for liabilities incurred in
connection with this Agreement or the transactions contemplated hereby, (ii) as
disclosed by the SEC Reports or (iii) as set forth in Schedule 3.2 to this
Agreement, since December 31, 2002 (a) none of the Borrower or any Subsidiary
have suffered any change, condition, event or development that has had, or could
reasonably be expected to have, a Material Adverse Effect, (b) each of the
Borrower or any Subsidiary have conducted in all material respects their
respective businesses only in the ordinary course consistent with past practice,
except for the negotiation and execution and delivery of this Agreement and (c)
the Borrower has not (i) incurred any Indebtedness or Guarantee Obligation in
excess of $100,000, (ii) granted any Lien in respect of any material asset to
any Person, (iii) made any Restricted Payment or investment in excess of
$250,000 or (iv) entered into any transaction (including any merger or
consolidation) with any Person, except, in each case, as would be permitted
under this Agreement.
3.3 Corporate Existence; Compliance with Law. Each of the Borrower and its
Subsidiaries (a) is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, (b) has the corporate power
and authority, and the legal right, to own and operate its property, to lease
the property it operates as lessee and to conduct the business in which it is
currently engaged, (c) is duly qualified as a foreign corporation and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
and (d) is in compliance with all Requirements of Law, except in the case of the
foregoing clauses (c) and (d), to the extent that the failure to be so qualified
or to comply therewith could not, in the aggregate, reasonably be expected to
have a Material Adverse Effect.
3.4 Corporate Power; Authorization; Enforceable Obligations. The Borrower has
the corporate power and authority, and the legal right, to make, deliver and
perform the Loan Documents to which it is a party and to borrow hereunder and
has taken all necessary corporate action to authorize the borrowings on the
terms and conditions of this Agreement and any Notes and to authorize the
execution, delivery and performance of the Loan Documents to which it is a
party. No consent or authorization of, filing with, notice to or other act by or
in respect of, any Governmental Authority or any other Person (including,
without limitation, Board of Directors, stockholder, warrant holder or NASDAQ
consents, waivers and approvals) is required in connection with the
Recapitalization, the borrowings hereunder or the issuance of Notes hereunder or
with the execution, delivery, performance, validity or enforceability of the
Loan Documents to which the Borrower is a party, except consents,
authorizations, filings and notices described on Schedule 3.4. This Agreement
has been, and each other Loan Document to which it is a party will be, duly
executed and delivered on behalf of the Borrower. This Agreement constitutes,
and each other Loan Document to which it is a party when executed and delivered
will constitute, a legal, valid and binding obligation of the Borrower
enforceable against the Borrower in accordance with its terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing. Each
of the Security Documents creates and grants to the Agent, for its own benefit
and for the benefit of the Lenders, a legal, valid and duly perfected Lien in
the Collateral identified therein prior and superior in right to all other
Persons, except as of the date hereof and as of the Closing Date Liens permitted
pursuant to subsection 6.3(f) and the Liens permitted under subsection 6.3 that
have priority over the Agent's Lien by operation of law, and thereafter, Liens
permitted pursuant to subsection 6.3(f), subsection 6.3(g), subsection 6.3(h)
and subsection 6.3(l), and the Liens permitted under subsection 6.3 that have
priority over the Agent's Lien by operation of law. Such Collateral is not
subject to any other Liens whatsoever, except Liens permitted by Section 6.3
hereof.
3.5 No Legal Bar. The execution, delivery and performance of the Loan Documents
to which the Borrower is a party and the borrowings hereunder will not violate
any Requirement of Law or Contractual Obligation (other than as set forth on
Schedule 3.4) of the Borrower or of any of its Subsidiaries and will not result
in, or require, the creation or imposition of any Lien on any of its or their
respective properties or revenues pursuant to any such Requirement of Law or
Contractual Obligation (other than Liens created by the Security Documents).
3.6 No Material Litigation. No litigation, investigation or proceeding of or
before any arbitrator or Governmental Authority is pending or, to the knowledge
of the Borrower, threatened by or against the Borrower or any of its
Subsidiaries or against any of its or their respective properties or revenues
(a) with respect to any of the Loan Documents or any of the transactions
contemplated hereby or thereby, or (b) that, if reasonably likely to be
adversely determined, which could reasonably be expected to have a Material
Adverse Effect.
3.7 Contracts and No Default. Each of the Borrower and the Subsidiaries is in
compliance with respect to all of its Contractual Obligations, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect. No Default or Event of Default has
occurred and is continuing.
3.8 Ownership of Property; Liens. Each of the Borrower and its Subsidiaries has
good record and marketable title in fee simple to, or a valid leasehold interest
in, all its real property, and good title to, or a valid leasehold interest in,
all its other property, and none of such property is subject to any Lien except
as permitted by subsection 6.3.
3.9 Intellectual Property. Schedule 3.9 contains an accurate and complete list
of all material Intellectual Property which is used in the business of the
Borrower or any of its Subsidiaries, other than off-the-shelf software that is
commercially available. Unless otherwise indicated in the SEC Filings or on
Schedule 3.9, as of the date hereof and as of the Closing Date the Borrower (or
the Subsidiary indicated) owns the entire right, title and interest in and to
the Intellectual Property listed on such Schedule 3.9 (including, without
limitation, the exclusive right to ▇▇▇ and license the same) free and clear of
any Liens, other than Liens permitted by subsection 6.3 hereof (and without
obligation to pay any royalty or other fee with respect thereto) and each item
constituting part of the Intellectual Property which is owned by the Borrower or
any of its Subsidiaries and listed on Schedule 3.9 has been, to the extent
indicated in Schedule 3.9, duly registered with, filed in or issued by, as the
case may be, the United States Patent and Trademark Office or such other
government entities, domestic or foreign, or a duly accredited and appropriate
domain name registrar, as are indicated in Schedule 3.9 and such registrations,
filings and issuances remain in full force and effect. As of the date hereof and
as of the Closing Date, to the best knowledge of the Borrower, neither the
Borrower's nor any of its Subsidiaries' use or practice of the Intellectual
Property infringes any other Person's rights thereto. As of the date hereof and
as of the Closing Date, no Intellectual Property set forth on Schedule 3.9 has
been canceled, abandoned, or otherwise terminated and all renewal fees (if
applicable) in respect thereof have been duly paid. Except as stated in Schedule
3.9, as of the Closing Date are no pending or to the best knowledge of the
Borrower, threatened proceedings or litigation or other adverse claims affecting
or with respect to the Intellectual Property listed on Schedule 3.9. Schedule
3.9 lists all notices or claims pending as of the Closing Date or received by
the Borrower or any of its Subsidiaries during the two years immediately
preceding the Closing Date which claim, as applicable, infringement,
contributory infringement, inducement to infringe, misappropriation, misuse or
breach by the Borrower or any of its Subsidiaries with respect to any
Intellectual Property or license thereof and, except as set forth on Schedule
3.9, as of the Closing Date there is, to the knowledge of the Borrower, no
reasonable basis upon which any such claim may be asserted. As of the date
hereof and as of the Closing Date, to the best knowledge of the Borrower, except
as indicated on Schedule 3.9, no Person is infringing, misappropriating or
misusing any of the Intellectual Property.
3.10 No Burdensome Restrictions. No Requirement of Law or Contractual Obligation
as of the date hereof and as of the Closing Date of the Borrower or any of its
Subsidiaries could reasonably be expected to have a Material Adverse Effect.
3.11 Taxes. Except as set forth on Schedule 3.11:
(a) Each of the Borrower and its Subsidiaries has timely filed or caused to be
timely filed (including by way of permitted extensions) all income Tax Returns
and all material other United States federal, state, county, local and foreign
Tax Returns required to be filed by or with respect to it, and all such Tax
Returns are complete and accurate in all material respects. Each of the Borrower
and its Subsidiaries has timely paid all material Taxes for which it is directly
or indirectly liable and any assessments made against it or any of its property
and all other Taxes, fees or other charges imposed on it or any of its property
by any Governmental Authority, other than any taxes, fees or other charges the
amount or validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided on the June 30, 2003 balance sheet of the Borrower.
(b) There are no audits, examinations, actions, suits, proceedings,
investigations, claims or assessments pending or, to the knowledge of the
Borrower, threatened, against the Borrower or any of its Subsidiaries for any
alleged deficiency in any Tax (a "Tax Controversy") and the Borrower has not
been notified in writing of any proposed Tax Controversy against the Borrower or
any of its Subsidiaries (other than a Tax Controversy set forth on Schedule 3.11
which is being contested in good faith).
(c) For purposes of this Agreement, the term "Tax" means any United States
federal, state, county or local, or foreign or provincial income, gross
receipts, profits, capital gains, capital stock, occupation, severance, stamp,
withholding, property, sales, use, license, excise, franchise, employment,
payroll, value added, alternative or added minimum, ad valorem or transfer tax,
or any other tax, levy, custom, duty or governmental fee or other like
assessment or charge of any kind whatsoever (whether payable directly or by
withholding and whether or not requiring the filing of a Tax Return), together
with all estimated taxes, deficiency assessments, additions to tax, interest or
penalties imposed by any Governmental Authority, and shall include any liability
for such amounts as a result either of being a member of a combined,
consolidated, unitary or affiliated group or of a contractual obligation to
indemnify any person or other entity. The term "Tax Return" means any and all
reports, returns or other information (including any attached schedules or any
amendments to such reports, returns or other information) required to be
supplied to or filed with any Governmental Authority with respect to any Tax,
including an information return, claim for refund, amended return or declaration
or estimated Tax.
3.12 Federal Regulations. No part of the proceeds of any Loans will be used for
"purchasing" or "carrying" any "margin stock" within the respective meanings of
each of the quoted terms under Regulation U of the Board of Governors of the
Federal Reserve System as now and from time to time hereafter in effect. If
requested by any Lender or the Agent, the Borrower will furnish to the Agent and
each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-1 or FR Form U-1 referred to in said Regulation U.
3.13 ERISA. (a) Schedule 3.13 sets forth as of the date hereof and as of the
Closing Date a true and complete list of each "employee benefit plan" (as
defined in Section 3(3) of ERISA) of the Borrower and its Subsidiaries in which
current or former employees, agents, directors, or independent contractors of
the Borrower or its Subsidiaries ("Employees") participate or pursuant to which
the Borrower or any of its Subsidiaries may have a liability with respect to
Employees (each, an "Employee Plan"). Except as disclosed in the SEC Filings or
on Schedule 3.13, as of the date hereof and as of the Closing Date, neither the
Borrower nor any of its Subsidiaries has any commitment to establish any
additional Employee Plans or to modify or change materially any existing
Employee Plan. The Borrower has made available to the Lenders with respect to
each Employee Plan as of date hereof and as of the Closing Date: (i) a true and
complete copy of all written documents comprising such Employee Plan (including
amendments and individual agreements relating thereto) or, if there is no such
written document, an accurate and complete description of such Employee Plan;
and (ii) the most recent financial statements, if any.
(b) Each Employee Plan has been established and maintained in substantial
compliance with its terms and the requirements of all Applicable Law, and all
contributions required to be made to the Employee Plans have been made in a
timely fashion.
(c) Each Employee Plan which is intended to be "qualified" within the meaning of
Section 401(a) of the Code has received a favorable determination letter or
opinion letter from the Internal Revenue Service and, to the Borrower's
knowledge, no event has occurred and no condition exists which could reasonably
be expected to result in the revocation of any such determination letter or
opinion letter. (d) Neither the Borrower nor any of its Subsidiaries currently
maintains or contributes to, or has at any time maintained or contributed to or
been obligated to contribute to, any plan, program or arrangement covered by
Title IV of ERISA or subject to Section 412 of the Code or Section 302 of ERISA.
(e) Neither the Borrower nor any of its Subsidiaries, nor, to the Borrower's
knowledge, any other "disqualified person" or "party in interest" (as defined in
Section 4975(e)(2) of the Code and Section 3(14) of ERISA, respectively) has
engaged in any transactions in connection with any Employee Plan that could
reasonably be expected to result in the imposition of a material penalty
pursuant to Section 502 of ERISA, material damages pursuant to Section 409 of
ERISA or a material tax pursuant to Section 4975 of the Code.
(f) There are no actions, suits, arbitrations, inquiries, investigations or
other proceedings (other than routine claims for benefits) pending or, to the
Borrower's knowledge, threatened, with respect to any Employee Plan, except for
any of the foregoing that do not and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
(g) The Borrower and its Subsidiaries are in compliance in all material respects
with the terms and provisions of the Immigration Reform and Control Act of 1986,
as amended, and all related regulations promulgated thereunder (the "Immigration
Laws"). As of the date hereof and as of the Closing Date, the Borrower and its
Subsidiaries have never been the subject of any inspection or investigation
relating to its compliance with or violation of the Immigration Laws, nor have
they been warned, fined or otherwise penalized by reason of any such failure to
comply with the Immigration Laws, nor is any such proceeding pending or to the
Borrower's knowledge, threatened.
(h) Except as set forth in the SEC Filings or on Schedule 3.13, the Borrower and
its Subsidiaries are in compliance in all material respects with all Applicable
Laws respecting employment and employment practices, terms and conditions and
wages and hours.
3.14 Investment Company Act; Other Regulations. The Borrower is not an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. The
Borrower is not subject to regulation under any Federal or State statute or
regulation (other than Regulation X of the Board of Governors of the Federal
Reserve System) which limits its ability to incur Indebtedness.
3.15 Subsidiaries. The following constitute all the Subsidiaries of the
Borrower at the date hereof and as of the Closing Date: Infocrossing Services,
Inc., ETG, Inc., AmQUEST, Inc. and AmQUEST Services, Inc.
3.16 Environmental Matters. Except as set forth in the SEC Filings or on
Schedule 3.16: (a) Hazardous Materials have not at any time been generated, use,
treated or stored on, or transported to or from, any Borrower Property by the
Borrower or any Subsidiary in a manner which has resulted or is reasonably
likely to result in an Environmental Claim, (b) Hazardous Materials have not at
any time been Released or disposed of on any Borrower Property in a manner which
has resulted or is reasonably likely to result in an Environmental Claim, (c)
the Borrower and each of its Subsidiaries are in compliance in all material
respects with all applicable Environmental Laws and the requirements of any
permits issued under such applicable Environmental Laws with respect to any
Borrower Property, (d) there are no pending or, to the knowledge of the
Borrower, threatened or unresolved past material Environmental Claims against
the Borrower or any of its Subsidiaries or any Borrower Property, (e) there are
no facts, conditions or circumstances that, to the knowledge of the Borrower,
could reasonably be expected to form the basis of an Environmental Claim, and
(f) there are not now and never have been any underground storage tanks located
on any Borrower Property.
For purposes of this Agreement, the following terms shall have the following
meanings: (a) "Borrower Property" means any real property and improvements
currently or formerly owned or leased by the Borrower or any of its
Subsidiaries; (b) "Hazardous Materials" means (i) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is or is reasonably
likely to become friable, urea formaldehyde foam insulation, polychlorinated
biphenyls, and radon gas; and (ii) any chemicals, materials or substances
defined as or included in the definition of "hazardous substances," "hazardous
wastes," "hazardous materials," "extremely hazardous wastes," "restricted
hazardous wastes," "toxic substances," "toxic pollutants," or words of similar
import, under any applicable Environmental Law; (c) "Environmental Law" means
any federal, state or local statute, law, rule, regulation, ordinance, code or
rule of common law in effect and in each case as amended as of the date hereof
and as of the Closing Date, applicable to the Borrower or its operations or
Borrower Property as of the date hereof and as of the Closing Date, including
any judicial or administrative order, consent decree or judgment relating to the
environment, occupational safety and health or Hazardous Materials; and (d)
"Environmental Claims" means any and all administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of noncompliance
or violation, investigations or proceedings under any Environmental Law or any
permit issued under any such Environmental Law (for purposes of this subclause
(d), "Claims"), including without limitation (i) any and all Claims by any
Governmental Authority for enforcement, cleanup, removal, response, remedial or
other actions or damages pursuant to any applicable Environmental Law and (ii)
any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief resulting from
Hazardous Materials or arising from alleged injury or threat of injury to
health, safety or the environment; and (e) "Release" means disposing,
discharging, injecting, spilling, leaking, leaching, dumping, emitting,
escaping, emptying or seeping into or upon any land or water or air, or
otherwise entering into the environment.
3.17 Solvency. As of the date hereof and as of the Closing Date and without
regard to any inter-company debt obligations between the Loan Parties:
(a) the amount of the "present fair saleable value" of the assets of each of the
Loan Parties will, as of such date, exceed the amount of all "liabilities of
such Loan Party, contingent or otherwise", as of such date, as such quoted terms
are determined in accordance with applicable federal and state laws governing
determinations of the insolvency of debtors,
(b) the present fair saleable value of the assets of each Loan Party will, as of
such date, be greater than the amount that will be required to pay the liability
of such Loan Party on its debts as such debts become absolute and matured,
(c) each Loan Party will not have, as of such date, an unreasonably small amount
of capital with which to conduct its business, and
(d) each Loan Party is then able and expects to be able to pay its debts as they
mature.
For purposes of this subsection 3.17, (i) "debt" means liability on a "claim",
and (ii) "claim" means any (x) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (y)
right to an equitable remedy for breach of performance if such breach gives rise
to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured or unmatured, disputed,
undisputed, secured or unsecured.
3.18 Full Disclosure. No statement of fact made by or on behalf of any Person
other than the Lenders in this Agreement, the Security Documents, the documents
relating to the Recapitalization or in any certificate or schedule furnished to
the Lenders pursuant hereto or thereto contains any untrue statement of a
material fact or omits to state any material fact necessary to make statements
contained therein or herein not misleading. There is no fact presently known to
the Borrower which has not been disclosed to the Lenders in writing which has
had or, as far as the Borrower can reasonably foresee, could reasonably be
expected to have a Material Adverse Effect.
SECTION 4. CONDITIONS PRECEDENT TO CLOSING
The making of the Loans hereunder and the agreement of each Lender to be a
party to this Agreement is subject to the satisfaction, immediately prior to or
on the Closing Date, of the following conditions precedent:
(a) Loan Documents. The Lenders shall have received (i) this Agreement,
executed and delivered by a duly authorized officer of the Borrower,
(ii) the Notes, executed and delivered by a duly authorized officer of
the Borrower, (iii) the Stock Pledge Agreement, each executed and
delivered by a duly authorized officer of the parties thereto, (iv) the
Security Agreement executed and delivered by a duly authorized officer
of the parties thereto and (v) each of the Deposit Account Control
Agreements, each executed and delivered by a duly authorized officer of
the party thereto.
(b) Related Agreements. (i) The Lenders shall have received true and
correct copies, certified as to authenticity by the Borrower, of the
Exchange Agreement and the other documents relating to the
Recapitalization, each on terms mutually acceptable to the Lenders and
the Borrower, and such other documents or instruments as may be
reasonably requested by the Lenders, including, without limitation, a
copy of any debt instrument, security agreement or other material
contract to which the Borrower, or its Subsidiaries may be a party.
(ii) The Lenders shall have received evidence satisfactory to them in their
sole discretion that the closing conditions under the Exchange
Agreement have been satisfied.
(c) Closing Certificate. The Lenders shall have received a certificate of
the Borrower, dated the Closing Date, substantially in the form of
Exhibit G, with appropriate insertions and attachments, including
financial statements requested by the Lenders, confirming compliance
with the conditions set forth in Section 4, satisfactory in form and
substance to the Lenders, executed by the Chairman of the Board, the
President or any Vice President of the Borrower.
(d) Corporate Proceedings of the Borrower. The Lenders shall have received
a copy of the resolutions, in form and substance satisfactory to the
Lenders, of the Board of Directors of the Borrower authorizing (i) the
execution, delivery and performance of this Agreement and the other
Loan Documents to which it is a party, (ii) the Loans contemplated
hereunder and (iii) the granting by it of the Liens created pursuant to
the Borrower Security Documents, certified by the Secretary or an
Assistant Secretary of the Borrower as of the Closing Date, which
certificate shall be in form and substance satisfactory to the Lenders
and shall state that the resolutions thereby certified have not been
amended, modified, revoked or rescinded.
(e) Borrower Incumbency Certificate. The Lenders shall have received a
Certificate of the Borrower, dated the Closing Date, as to the
incumbency and signature of the officers of the Borrower executing any
Loan Document satisfactory in form and substance to the Lenders,
executed by the President or any Vice President and the Secretary or
any Assistant Secretary of the Borrower.
(f) Private Placement. The Lenders shall have received at least $55,000,000
in cash from the net proceeds of a successfully consummated private
placement of the Borrower's Common Stock (the "Private Placement"),
which private placement shall have been consummated on terms and
conditions (including, without limitation, the issuance price of the
Common Stock) satisfactory to the Lenders.
(g) Due Diligence. Satisfactory completion of due diligence by the Lenders,
including legal and tax due diligence, to the satisfaction of the
Lenders in their sole and absolute discretion.
(h) Corporate Proceedings of Subsidiaries. The Lenders shall have received
a copy of the resolutions, in form and substance satisfactory to the
Lenders, of the Board of Directors of each Subsidiary of the Borrower
which is a party to a Loan Document authorizing (i) the execution,
delivery and performance of the Loan Documents to which it is a party
and (ii) the granting by it of the Liens created pursuant to the
Subsidiaries Security Documents to which it is a party, certified by
the Secretary or an Assistant Secretary of each such Subsidiary as of
the Closing Date, which certificate shall be in form and substance
satisfactory to the Lenders and shall state that the resolutions
thereby certified have not been amended, modified, revoked or
rescinded.
(i) Subsidiary Incumbency Certificates. The Lenders shall have received a
certificate of each Subsidiary of the Borrower which is a Loan Party,
dated the Closing Date, as to the incumbency and signature of the
officers of such Subsidiaries executing any Loan Document, satisfactory
in form and substance to the Lenders, executed by the President or any
Vice President and the Secretary or any Assistant Secretary of each
such Subsidiary.
(j) Corporate Documents. The Lenders shall have received true and complete
copies of the certificate of incorporation and by-laws of each Loan
Party, certified as of the Closing Date as complete and correct copies
thereof by the Secretary or an Assistant Secretary of such Loan Party.
(k) Consents, Licenses and Approvals. The Lenders shall have received a
certificate of a Responsible Officer of the Borrower (i) attaching
copies of all consents, authorizations and filings referred to in
subsection 3.4 (other than the consent of Dell Financial under
operating leases relating to Master Lease 1558532), and (ii) stating
that such consents, licenses and filings attached are in full force and
effect, and each such consent, authorization and filing attached shall
be in form and substance satisfactory to the Lenders in their sole and
absolute discretion.
(l) Fees. As of the date hereof and as of the Closing Date, all fees owed
to the Agent, the Lenders and their respective Affiliates under this
Agreement and all legal fees and expenses of counsel to the Agent and
the Lenders incurred through such date shall have been paid in full.
(m) Legal Opinions. The Lenders shall have received the following executed
legal opinions:
(i) the executed legal opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel to the
Borrower and the other Loan Parties substantially in the form of
Exhibit H; and
(ii) the executed legal opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP, special Georgia
counsel to the Borrower.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Lenders may require in their
sole and absolute discretion.
(n) Pledged Stock; Stock Powers. The Agent shall have received the certificates
representing the shares pledged pursuant to the Stock Pledge Agreement, together
with an undated stock power for each such certificate executed in blank by a
duly authorized officer of the pledgor thereof.
(o) Actions to Perfect Liens. The Lenders shall have received evidence in form
and substance satisfactory to it that all filings, recordings, registrations and
other actions, including, without limitation, the filing of duly executed
financing statements on form UCC-1, necessary or, in the opinion of the Lenders,
desirable to perfect the first priority Liens created by the Security Documents
shall have been completed.
(p) Lien Searches. The Lenders shall have received the results of a recent
search by a Person satisfactory to the Lenders, of the Uniform Commercial Code,
judgment and tax lien filings which may have been filed with respect to personal
property of the Borrower, and the results of such search shall be satisfactory
to the Lenders in their sole and absolute discretion.
(q) Representations and Warranties. Each of the representations and warranties
made by the Borrower and the Subsidiaries in or pursuant to the Loan Documents
shall be true and correct in all material respects on and as the date hereof and
as of the Closing Date; provided that any such representations and warranties
that by their express terms are made as of a specific date shall have been true
and correct as of such specific date.
(r) No Default. At the time of and immediately after giving effect to the making
of the Loans, no Default shall have occurred and be continuing.
(s) Additional Matters. All corporate and other proceedings, and all documents,
instruments and other legal matters in connection with the transactions
contemplated by this Agreement, the other Loan Documents and the Exchange
Agreement shall be satisfactory in form and substance to the Lenders, and the
Lenders shall have received such other documents in respect of any aspect or
consequence of the transactions contemplated hereby or thereby as it shall
reasonably request.
(t) Closing. The Closing Date shall have occurred before November 1, 2003,
unless otherwise agreed to by the Lenders in their sole and absolute discretion.
(u) Camden Debentures. The Lenders shall have received evidence of the repayment
of the Camden Debentures and termination of the Debentures and the related
securities purchase agreement simultaneously with the closing of this Agreement,
satisfactory to the Lenders in their sole and absolute discretion.
(v) Insurance. The Lenders shall have received evidence of the compliance by the
Borrower with subsection 5.5, satisfactory to the Lenders in their sole and
absolute discretion.
SECTION 5. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as any amount is
owing to any Lender or the Agent hereunder or under any other Loan Document, the
Borrower shall and (except in the case of delivery of financial information,
reports and notices) shall cause each of its Subsidiaries to:
5.1 Financial Statements. Furnish to each Lender:
(a) as soon as available, but in any event within 90 days after the end of each
fiscal year of the Borrower, a copy of the consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at the end of such year and the
related consolidated statements of income and retained earnings and of cash
flows for such year, setting forth in each case in comparative form the figures
for the previous year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the scope of the
audit, by Ernst & Young LLP or other independent certified public accountants of
nationally recognized standing;
(b) as soon as available, but in any event not later than 45 days after the end
of each of the first three quarterly periods of each fiscal year of the
Borrower, the unaudited consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at the end of such quarter and the related
unaudited consolidated statements of income and retained earnings and of cash
flows of the Borrower and its consolidated Subsidiaries for such quarter and the
portion of the fiscal year through the end of such quarter, setting forth in
each case in comparative form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects (subject to
normal year-end audit adjustments and the absence of footnotes); and
(c) as soon as available, but in any event not later than 30 days after the end
of each month, the monthly unaudited consolidated statements of income and
retained earnings and of cash flows of the Borrower and its consolidated
Subsidiaries for such months and the portion of the fiscal year through the end
of such month, setting forth in each case in comparative form the figures for
the previous month and the figures from the budget, together with a narrative of
the performance of the Borrower and its consolidated Subsidiaries for such
period in the same form as delivered to the Board of Directors or the senior
executives of the Borrower, certified by a Responsible Officer as being fairly
stated in all material respects;
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
5.2 Certificates; Other Information. Furnish to each Lender:
(a) concurrently with the delivery of the financial statements referred to in
subsection 5.1(a), a certificate of the independent certified public accountants
reporting on such financial statements stating that in making the examination
necessary therefore no knowledge was obtained of any Default or Event of
Default, except as specified in such certificate;
(b) concurrently with the delivery of the financial statements referred to in
subsections 5.1(a), (b) and (c), a certificate of a Responsible Officer stating
that, to the best of such Officer's knowledge, during such period (i) no
Subsidiary has been formed or acquired (or, if any such Subsidiary has been
formed or acquired, the Borrower has complied with the requirements of
subsection 5.10 with respect thereto, (ii) neither the Borrower nor any of its
Subsidiaries has changed its name, its principal place of business, its chief
executive office or the location of any material item of tangible Collateral
without complying with the requirements of this Agreement and the Security
Documents with respect thereto and (iii) the Borrower has observed or performed
all of its covenants and other agreements contained in this Agreement and the
other Loan Documents to be observed, performed or satisfied by it, and that such
Officer has obtained no knowledge of any Default or Event of Default except as
specified in such certificate;
(c) not later than thirty days prior to the end of each fiscal year of the
Borrower, a copy of the projections by the Borrower of the operating budget and
cash flow budget of the Borrower and its Subsidiaries for the succeeding fiscal
year, such projections to be accompanied by a certificate of a Responsible
Officer stating that such projections are based on estimates, information and
assumptions reasonably believed by such Responsible Officer to be reasonable on
the date of delivery thereof;
(d) within five days after the same are sent, copies of all financial statements
and reports which the Borrower sends to its stockholders, and within five days
after the same are filed, copies of all financial statements and reports which
the Borrower may make to, or file with, the SEC or any successor or analogous
Governmental Authority; and
(e) promptly, such additional financial and other information as any Lender may
from time to time reasonably request.
5.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or before
maturity or before they become delinquent, as the case may be, all its
obligations of whatever nature, except where the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and reserves
in conformity with GAAP with respect thereto have been provided on the books of
the Borrower or its Subsidiaries, as the case may be.
5.4 Conduct of Business and Maintenance of Existence. (a) Continue to engage in
business of the same general type as now conducted by it and preserve, renew and
keep in full force and effect its corporate existence and take all reasonable
action to maintain all rights, privileges and franchises material to the normal
conduct of its business except as otherwise permitted pursuant to subsection
6.5; and (b) comply with all Contractual Obligations and Requirements of Law
except to the extent that failure to comply therewith could not, in the
aggregate, be reasonably expected to have a Material Adverse Effect.
5.5 Maintenance of Property; Insurance.
(a) Maintain in all material respects all property necessary and useful in the
conduct of its business, in good operating condition and repair, ordinary wear
and tear excepted.
(b) Maintain with financially sound and reputable insurers having a rating of at
least A- or better by Best Rating Guide, insurance against loss or damage by
fire with extended coverage; theft, burglary, pilferage and loss in transit;
public liability and third party property damage; larceny, embezzlement or other
criminal liability; business interruption and such other hazards or of such
other types as is customary for Persons engaged in the same or similar business.
Without limiting the foregoing, in the event that any real estate owned or
leased by any Loan Party on which is located any inventory or equipment of a
Loan Party is determined to be located within an area that has been identified
by the Director of the Federal Emergency Management Agency as a Special Flood
Hazard Area ("SFHA"), such Loan Party shall purchase and maintain flood
insurance on the improved real estate and any equipment and inventory located on
such real estate. The amount of said flood insurance will be reasonably
determined by the Agent, and such insurance shall, at a minimum (subject to
customary deductibles), comply with applicable federal regulations as required
by the Flood Disaster Protection Act of 1973, as amended. Such Loan Party shall
also maintain flood insurance for its inventory and equipment which is, at any
time, located in a SFHA.
(c) Cause the Agent, for the ratable benefit of the Agent and the Lenders, to be
named as secured party or mortgagee and loss payee as its interest may appear or
additional insured, in a manner reasonably acceptable to the Agent on each
policy of insurance of such Loan Party. Such Loan Party shall use commercially
reasonable efforts to cause each policy of insurance of such Loan Party to
contain a clause or endorsement requiring the insurer to give not less than
thirty (30) days' prior written notice to the Agent in the event of cancellation
of the policy for any reason whatsoever (other than non-payment of premiums, in
which case not less than ten (10) days' prior written notice is sufficient).
Each policy of such Loan Party for property insurance shall contain a clause or
endorsement stating that the interest of the Agent shall not be impaired or
invalidated by any act or neglect of any Loan Party or any of its Subsidiaries
or the owner of any real estate for purposes more hazardous than are permitted
by such policy. All premiums for such insurance shall be paid by such Loan Party
when due, and certificates of insurance and, if requested by the Agent or any
Lender, photocopies of the policies, shall be delivered to the Agent, in each
case in sufficient quantity for distribution by the Agent to each of the
Lenders. If a Loan Party fails to procure such insurance or to pay the premiums
therefore when due, the Agent may do so, but at the Borrowers' expense and
without any responsibility on the Agent's part for obtaining the insurance, the
solvency of the insurance companies, the adequacy of the coverage, or the
collection of claims.
(d) Such Loan Party shall promptly notify the Agent and the Lenders of any loss,
damage or destruction to any of the Collateral in an amount in excess of
$250,000, whether or not covered by insurance. To the extent that the Borrower
or its Subsidiaries are not permitted to reinvest insurance and condemnation
proceeds hereunder, the Agent is hereby authorized to collect all insurance and
condemnation proceeds in respect of Collateral and directly after deducting from
such proceeds the reasonable expenses, if any, incurred by the Agent in the
collection or handling thereof, the Agent shall apply such proceeds to the
payment of the Loans in the manner provided for in this Agreement.
5.6 Books and Records; Inspection of Property.
(a) Keep proper books of records and account in which full, true and correct
entries in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities.
(b) Permit representatives of the Agent and Lenders (at the expense of the Loan
Parties) to visit and inspect any of its properties, to examine its corporate,
financial and operating records, and make copies thereof or abstracts therefrom
and to discuss its affairs, finances and accounts with its directors (or Persons
serving a similar function), officers and independent public accountants, at
such reasonable times during normal business hours and as soon as may be
reasonably desired, upon reasonable advance notice to such Loan Party; provided,
however, when an Event of Default exists, the Agent or any Lender may do any of
the foregoing at the expense of the Loan Parties at any time during normal
business hours and without advance notice.
5.7 Notices. Promptly give notice to the Agent and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual Obligation of the
Borrower or any of its Subsidiaries or (ii) litigation, investigation or
proceeding which may exist at any time between the Borrower or any of its
Subsidiaries and any Governmental Authority, which in either case, if not cured
or if reasonably likely to be adversely determined, as the case may be, could
reasonably be expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or any of its
Subsidiaries in which the amount involved is $250,000 or more and not covered by
insurance or in which injunctive or similar relief is sought;
(d) the following events, as soon as possible and in any event within 30 days
after the Borrower knows thereof: (i) the occurrence or expected occurrence of
any Reportable Event with respect to any Plan, a failure to make any required
contribution to a Plan, the creation of any Lien in favor of the PBGC or a Plan
or any withdrawal from, or the termination, Reorganization or Insolvency of, any
Multiemployer Plan or (ii) the institution of proceedings or the taking of any
other action by the PBGC or the Borrower or any Commonly Controlled Entity or
any Multiemployer Plan with respect to the withdrawal from, or the terminating,
Reorganization or Insolvency of, any Plan; and
(e) any development or event which could reasonably be expected to have a
Material Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrower proposes to take with respect thereto.
5.8 Environmental Laws. (a) Comply with, and ensure compliance by all of
Borrower's tenants and subtenants on any Borrower Property, if any, with, all
applicable Environmental Laws and obtain and comply with and maintain, and
ensure that all such tenants and subtenants obtain and comply with and maintain,
any and all licenses, approvals, notifications, registrations or permits
required by applicable Environmental Laws except, in each case, to the extent
that failure to do so could not be reasonably expected, individually or in the
aggregate, to have a Material Adverse Effect.
(b) Conduct and complete all investigations, studies, sampling and testing, and
all remedial, removal and other actions that the Borrower or any of its
Subsidiaries are required to complete and conduct under applicable Environmental
Laws and promptly comply with all related lawful orders and directives of all
Governmental Authorities regarding applicable Environmental Laws except to the
extent that (i) the same are being contested, if deemed reasonably necessary to
contest by the Borrower, in good faith by appropriate proceedings and (ii) such
investigations, action or compliance could not be reasonably expected to have a
Material Adverse Effect.
5.9 Further Assurances. Upon the request of the Agent, promptly perform or cause
to be performed any and all acts and execute or cause to be executed any and all
documents (including, without limitation, financing statements and continuation
statements) for filing under the provisions of the Uniform Commercial Code or
any other Requirement of Law which are necessary or advisable to maintain in
favor of the Agent, for the benefit of the Lenders, a fully perfected Lien on
the Collateral prior and superior in right to all other Persons except Liens
permitted pursuant to subsection 6.3(f), subsection 6.3(g), subsection 6.3(h)
and subsection 6.3(l) and other Liens permitted under subsection 6.3 that have
priority over the Agent's Lien by operation of law.
5.10 Additional Collateral. (a) With respect to any assets acquired after the
Closing Date by the Borrower or any of its Domestic Subsidiaries that are
intended to be subject to the Lien created by any of the Security Documents but
which are not so subject (other than (x) any assets described in paragraph (b)
or (c) of this subsection, (y) immaterial assets a Lien on which cannot be
perfected by filing UCC-1 financing statements and (z) property acquired by a
Foreign Subsidiary), promptly (and in any event within 30 days after the
acquisition thereof): (i) execute and deliver to the Agent such amendments to
the relevant Security Documents or such other documents as the Agent shall deem
necessary or advisable to grant to the Agent, for the benefit of the Lenders, a
Lien on such assets, (ii) take all actions necessary or advisable to cause such
Lien to be duly perfected in accordance with all applicable Requirements of Law,
including, without limitation, the filing of financing statements in such
jurisdictions as may be requested by the Agent, and (iii) if requested by the
Agent, deliver to the Agent legal opinions relating to the matters described in
clauses (i) and (ii) immediately preceding, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Agent.
(b) With respect to any Person that, subsequent to the Closing Date, becomes a
Subsidiary (other than a Foreign Subsidiary), promptly upon the request of the
Agent: (i) execute and deliver to the Agent, for the benefit of the Lenders, a
new pledge agreement or such amendments to the Stock Pledge Agreement as the
Agent shall deem necessary or advisable to grant to the Agent, for the benefit
of the Lenders, a Lien on the Capital Stock of such Subsidiary which is owned by
the Borrower or any of its Subsidiaries, (ii) deliver to the Agent the
certificates representing such Capital Stock, together with undated stock powers
executed and delivered in blank by a duly authorized officer of the Borrower or
such Subsidiary, as the case may be, (iii) cause such new Subsidiary (A) to
become a party to the Security Agreement, in each case pursuant to documentation
which is in form and substance satisfactory to the Agent, and (B) to take all
actions necessary or advisable to cause the Lien created by the Security
Agreement to be duly perfected in accordance with all applicable Requirements of
Law, including, without limitation, the filing of financing statements in such
jurisdictions as may be requested by the Agent and (iv) if requested by the
Agent, deliver to the Agent legal opinions relating to the matters described in
clauses (i), (ii) and (iii) immediately preceding, which opinions shall be in
form and substance, and from counsel, reasonably satisfactory to the Agent.
(c) With respect to any Person that, subsequent to the Closing Date, becomes a
Foreign Subsidiary, promptly upon the request of the Agent: (i) execute and
deliver to the Agent a new pledge agreement or such amendments to the Stock
Pledge Agreement as the Agent shall deem necessary or advisable to grant to the
Agent, for the benefit of the Lenders, a Lien on the Capital Stock of such
Subsidiary which is owned by the Borrower or any of its Subsidiaries (provided
that in no event shall more than 65% of the Capital Stock of any such Subsidiary
be required to be so pledged), (ii) deliver to the Agent any certificates
representing such Capital Stock, together with undated stock powers executed and
delivered in blank by a duly authorized officer of the Borrower or such
Subsidiary, as the case may be, and take or cause to be taken all such other
actions under the law of the jurisdiction of organization of such Foreign
Subsidiary as may be necessary or advisable to perfect such Lien on such Capital
Stock and (iii) if requested by the Agent, deliver to the Agent legal opinions
relating to the matters described in clauses (i) and (ii) immediately preceding,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Agent.
(d) Notwithstanding anything to the contrary in this subsection 5.10, paragraphs
(a), (b) and (c) shall not apply to any property, Subsidiary or Foreign
Subsidiary created or acquired after the Closing Date, as applicable, to which
the Agent has determined in its sole discretion that the collateral value
thereof is insufficient to justify the difficulty, time and/or expense of
obtaining a perfected security interest therein.
(e) If the Borrower or any Subsidiary creates any initial or additional Lien
pursuant to subsection 6.3(l) upon any of its property, assets or revenues to
secure Indebtedness incurred under subsection 6.2(i), such Borrower or
Subsidiary shall simultaneously grant a pari passu Lien on such property, assets
or revenues to secure the Loan Obligations. If any Subsidiary that is not a
Guarantor guarantees the payment of Indebtedness incurred under subsection
6.2(i) of the Borrower or any Subsidiary, then such Subsidiary shall
simultaneously become a party to the Security Agreement and a Guarantor.
5.11 Syndication. To assist the Investors in their syndication efforts, upon the
request of the Agent or any Investor, promptly provide such information to such
Investor as the Agent may request with respect to the Borrower and its
Subsidiaries in such form as the Agent or such Investor may reasonably request
(including, without limitation, a true, correct and complete schedule of
material contracts to which the Borrower or any of its Subsidiaries is a party).
5.12 Tax Returns. At the request of the Agent or the Required Lenders, the
Borrower will deliver to the Lenders correct and complete copies of all United
States federal, state, and foreign income Tax Returns (to the extent filed as of
the date hereof or, if not filed, correct and complete copies of extensions
thereof), examination reports, statements of deficiencies assessed against or
agreed to by the Borrower and any of its Subsidiaries, or any other similar
correspondence from a taxing authority, relating to taxable years 2000, 2001 and
2002.
SECTION 6. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as any amount is
owing to any Lender or the Agent hereunder or under any other Loan Document, the
Borrower shall not, and (except with respect to subsection 6.1) shall not permit
any of its Subsidiaries to, directly or indirectly:
6.1 Financial Condition Covenants.
(a) Leverage. Permit the Leverage Ratio at any time during any period set forth
on Schedule 6.1(a) to be greater than the ratio set forth opposite such period
specified on Schedule 6.1(a).
(b) Minimum Consolidated EBITDA. Permit Consolidated EBITDA for any period of
four consecutive fiscal quarters ending on the date set forth on Schedule 6.1(b)
to be less than the amount set forth opposite such period specified on Schedule
6.1(b).
(c) Fixed Charge Ratio. Permit for any period of four consecutive fiscal
quarters ending on the date set forth on Schedule 6.1(c), the ratio of
Consolidated EBITDA for such period to Consolidated Fixed Charges for such
period to be less than the amount set forth opposite such period specified on
Schedule 6.1(c).
6.2 Limitation on Indebtedness. Create, incur, assume or suffer to exist
any Indebtedness, except:
(a) Indebtedness of the Borrower and its Subsidiaries under the Loan Documents;
(b) Indebtedness of the Borrower to any Subsidiary which is a Loan Party and of
any Subsidiary to the Borrower or any other Subsidiary which is a Loan Party;
(c) Indebtedness of the Borrower and any of its Subsidiaries incurred to finance
the acquisition of fixed or capital assets (whether pursuant to a loan, a
Financing Lease or otherwise) in an aggregate principal amount not exceeding as
to the Borrower and its Subsidiaries $2,000,000 at any time outstanding,
provided that such Indebtedness shall be created substantially simultaneously
with the capitalization or recapitalization of such fixed or capital assets on
the balance sheet of the Borrower and its Subsidiaries;
(d) Indebtedness of the Borrower or any of its Subsidiaries outstanding on the
date hereof and listed on Schedule 6.2(d) and extensions, renewals and
replacements of any such Indebtedness that do not increase the outstanding
principal amount thereof or interest thereon (other than with respect to any
reasonable fees) or shorten any maturity or average life to maturity thereof and
otherwise on substantially similar terms to such existing Indebtedness;
(e) Indebtedness of a Person which becomes a Subsidiary after the date hereof,
provided that (i) such indebtedness existed at the time such corporation became
a Subsidiary and was not created in anticipation thereof, (ii) such indebtedness
is in an aggregate principal amount not exceeding as to the Borrower and its
Subsidiaries $5,000,000 at any time outstanding and (iii) immediately after
giving effect to the acquisition of such Person by the Borrower no Default or
Event of Default shall have occurred and be continuing;
(f) Guarantee Obligations made in the ordinary course of business by the
Borrower or any of its Subsidiaries of obligations of the Borrower or any other
Loan Party which obligations are otherwise permitted under this Agreement;
(g) Indebtedness of the Borrower or any of its Subsidiaries in respect of
worker's compensation claims, performance, bid and surety bonds and completion
guarantees, in each case, in the ordinary course of business;
(h) Indebtedness of the Borrower or any of its Subsidiaries consisting of
customary overdraft and similar protections in connection with deposit accounts;
and
(i) Indebtedness of the Borrower or any of its Subsidiaries in an aggregate
principal amount (for the Borrower and all Subsidiaries) not to exceed
$5,000,000 at any time outstanding.
6.3 Limitation on Liens. Create, incur, assume or suffer to exist any Lien upon
any of its property, assets or revenues, whether now owned or hereafter
acquired, except for:
(a) Liens for taxes not yet due or which are being contested in good faith by
appropriate proceedings, provided that adequate reserves with respect thereto
are maintained on the books of the Borrower or its Subsidiaries, as the case may
be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's or other
like Liens arising in the ordinary course of business which are not overdue for
a period of more than 60 days or which are being contested in good faith by
appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation, unemployment
insurance and other social security legislation and deposits securing liability
to insurance carriers under insurance or self-insurance arrangements;
(d) deposits to secure the performance of bids, trade contracts (other than for
borrowed money), leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary course of business which, in the aggregate, are not
substantial in amount and which do not in any case materially detract from the
value of the property subject thereto or materially interfere with the ordinary
conduct of the business of the Borrower or such Subsidiary;
(f) Liens in existence on the date hereof listed on Schedule 6.3, securing
Indebtedness permitted by subsection 6.2(d), provided that no such Lien is
spread to cover any additional property after the Closing Date and that the
amount of Indebtedness secured thereby is not increased;
(g) Liens securing Indebtedness of the Borrower and its Subsidiaries permitted
by subsection 6.2(c) incurred to finance the acquisition of fixed or capital
assets, provided that (i) such Liens and the Indebtedness secured thereby shall
be created or incurred substantially simultaneously with the capitalization or
recapitalization of such fixed or capital assets on the balance sheet of the
Borrower and its Subsidiaries, (ii) such Liens do not at any time encumber any
property other than the property financed by such Indebtedness, (iii) the amount
of Indebtedness secured thereby is not increased and (iv) the principal amount
of Indebtedness secured by any such Lien shall at no time exceed 100% of the
original purchase price of such property at the time it was acquired;
(h) Liens on the property or assets of a corporation which becomes a Subsidiary
after the date hereof securing Indebtedness permitted by subsection 6.2(e),
provided that (i) such Liens existed at the time such corporation became a
Subsidiary and were not created in anticipation thereof, (ii) any such Lien is
not spread to cover any property or assets of such corporation after the time
such corporation becomes a Subsidiary, and (iii) the amount of Indebtedness
secured thereby is not increased;
(i) Liens created pursuant to the Security Documents;
(j) any interest or title of a lessor under any lease entered into by the
Borrower or any of its Subsidiaries in the ordinary course of its business and
covering only the assets so leased and any Lien arising from precautionary
Uniform Commercial Code financing statements (or equivalent filings,
registrations or agreements in foreign jurisdictions) relating to and covering
only equipment leased in accordance with any Loan Document (and such Lien does
not apply to any additional property or assets of the Borrower or any
Subsidiary);
(k) Liens arising from judgments and attachments in connection with court
proceedings provided that the attachment or enforcement of such Liens would not
result in an Event of Default hereunder and such Liens are being contested in
good faith by appropriate proceedings, adequate reserves have been set aside, no
material property is subject to a material risk of loss or forfeiture, the
claims in respect of such Liens are fully covered by insurance (subject to
ordinary and customary deductibles) and a stay of execution pending appeal or
proceeding for review is in effect; and
(l) Liens securing Indebtedness of the Borrower or any of its Subsidiaries
permitted under subsection 6.2(i), provided, that, (a) such Lien shall only be
permitted hereunder if the Leverage Ratio of the Borrower and its Subsidiaries
calculated at the time of incurrence of such Indebtedness and after giving
effect thereto and using Consolidated EBITDA for the most recently completed
period of four consecutive fiscal quarters is less than 3.00:1.00; (b) such Lien
shall be pari passu with the Lien securing the Loan Obligations; (c) the
aggregate amount of Indebtedness secured by such Lien does not exceed (i)
$2,500,000 if the Leverage Ratio at the time of such incurrence and after giving
effect thereto is less than 3.0:1.0 and greater than or equal to 2.0:1.0 or (ii)
$5,000,000 if the Leverage Ratio at the time of such incurrence and after giving
effect thereto is less than 2.0:1.0; provided that for purposes of this
subsection 6.3(l), the time of incurrence with respect to Indebtedness under any
revolving credit facility shall be deemed to be the date such revolving credit
facility was established and the amount incurred shall be the full committed
amount of such revolving credit facility and (d) (i) no portion of the principal
of such Indebtedness is stated to be payable or is required to be paid prior to
the Maturity Date, (ii) the material terms, conditions and restrictive covenants
contained in the instrument governing such Indebtedness, taken as a whole, are
no less favorable to the Borrower or any of its Subsidiaries, as the case may
be, than the terms, conditions and restrictive covenants contained in this
Agreement and (iii) no Default or Event of Default shall be in effect at the
time of or shall have occurred after giving effect to the incurrence of such
Indebtedness.
6.4 Limitation on Fundamental Changes. Enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease, assign, transfer or
otherwise dispose of, all or substantially all of its property, business or
assets, or make any material change in its present method of conducting
business, except that, if at the time thereof and immediately after giving
effect thereto, no Default or Event of Default shall have occurred and be
continuing:
(a) any Subsidiary of the Borrower may be merged or consolidated with or into
the Borrower (provided that the Borrower shall be the continuing or surviving
corporation) or with or into any one or more wholly owned Subsidiaries of the
Borrower (provided that the wholly owned Subsidiary or Subsidiaries shall be the
continuing or surviving corporation and is a Loan Party);
(b) any wholly owned Subsidiary may sell, lease, transfer or otherwise dispose
of any or all of its assets (upon voluntary liquidation or otherwise) to the
Borrower or any other wholly owned Subsidiary of the Borrower that is a Loan
Party; and
(c) the Borrower or any Subsidiary thereof may merge with any Person organized
or existing under the laws of the United States of America, any State thereof or
the District of Columbia in connection with a Permitted Acquisition; provided
that if such transaction involves the Borrower, the Borrower shall be the
continuing or surviving corporation and, if such transaction involves any other
Loan Party, the surviving person must be a Domestic Subsidiary and must become a
Guarantor of the obligations of the Borrower hereunder.
6.5 Limitation on Sale of Assets. Convey, sell, lease, assign, transfer or
otherwise dispose of any of its property, business or assets (including, without
limitation, receivables and leasehold interests), whether now owned or hereafter
acquired, or, in the case of any Subsidiary, issue or sell any shares of such
Subsidiary's Capital Stock to any Person other than the Borrower or any wholly
owned Subsidiary, except:
(a) the sale or other disposition of obsolete or worn out property in the
ordinary course of business;
(b) the sale or other disposition of any property in the ordinary course of
business, provided that (other than inventory) the aggregate book value of all
assets so sold or disposed of in any period of twelve consecutive months shall
not exceed 10% of consolidated total assets of the Borrower and its Subsidiaries
as at the beginning of such twelve-month period;
(c) the sale of inventory in the ordinary course of business;
(d) the sale or discount without recourse of accounts receivable arising in the
ordinary course of business in connection with the compromise or collection
thereof;
(e) as permitted by subsection 6.4(b); and
(f) dispositions of equipment in exchange for other equipment of reasonably
equivalent or greater value in the ordinary course of business.
6.6 Limitation on Amendments to Material Agreements. The Borrower will not, nor
will it permit any Subsidiary to, amend, modify or waive any of its rights under
its certificate of incorporation, by-laws or other organizational documents
(other than to change its name), except, in each case, for such amendments,
modifications or waivers that could not be reasonably expected to effect any
change materially adverse to the interests and rights of the Agent or the
Lenders under any Loan Document.
6.7 Limitation on Dividends. Declare or pay any dividend (other than dividends
payable solely in common stock of the Borrower) on, or make any payment on
account of, or set apart assets for a sinking or other analogous fund for, the
purchase, redemption, defeasance, retirement or other acquisition of, any shares
of any class of Capital Stock of the Borrower or any warrants or options to
purchase any such Capital Stock, whether now or hereafter outstanding, or make
any other distribution in respect thereof, either directly or indirectly,
whether in cash or property or in obligations of the Borrower or any Subsidiary,
except
(i) any Subsidiary may make Restricted Payments to the Borrower or any
Subsidiary Guarantor;
(ii) the Borrower may declare and pay dividends with respect to its Capital
Stock payable solely in additional Capital Stock;
(iii) so long as no Default or Event of Default shall have occurred and be
continuing, the Borrower may purchase its common stock or common stock
options from present or former officers or employees of the Borrower or
any Subsidiary upon the death, disability or termination of employment
of such officer or employee, provided, that the aggregate amount of
payments under this clause (iii) subsequent to the date hereof (net of
any proceeds received by the Borrower subsequent to the date hereof in
connection with resales of any common stock or common stock options so
purchased) shall not exceed $250,000;
(iv) the Borrower may consummate repurchases of Capital Stock that are
deemed to occur upon the non-cash exercise of permitted stock options
and warrants; and
(v) the Borrower and its Subsidiaries may consummate the Recapitalization.
6.8 Limitation on Capital Expenditures. Make or commit to make (by way of the
acquisition of securities of a Person or otherwise) any Capital Expenditures
(excluding any such asset acquired in connection with normal replacement and
maintenance programs properly charged to current operations) except for Capital
Expenditures in the ordinary course of business not exceeding, in the aggregate
for the Borrower and its Subsidiaries during any of the fiscal years of the
Borrower, the amount set forth opposite the applicable Leverage Ratio
(determined on the last day of the prior fiscal year) for the Borrower and its
Subsidiaries,
Leverage Ratio Amount
Greater than or equal to 3.00:1.00 $3,500,000
Less than 3.00:1.00 but greater
than or equal to 2.50:1.0 $4,000,000
Less than 2.5:1.00 $4,250,000
provided, that (i) if at the end of any fiscal year of the Borrower, the amount
specified pursuant to this section for such Capital Expenditures during such
fiscal year exceeds the aggregate amount of Capital Expenditures made or
incurred by the Borrower and its Subsidiaries on a consolidated basis during
such fiscal year (the amount of such excess being referred to herein as the
"Excess Amount"), the Borrower and its Subsidiaries shall be entitled to make
additional Capital Expenditures in the succeeding fiscal year (and only in such
succeeding fiscal year) in an aggregate amount equal to the Excess Amount and
(ii) Capital Expenditures made pursuant to this subsection 6.8 during any fiscal
year shall be deemed made first, in respect of amounts permitted for such fiscal
year as provided above (without giving effect to amounts carried over from the
prior fiscal year pursuant to clause (i) above) and second, in respect of the
Excess Amount carried over from the prior fiscal year pursuant to clause (i)
above.
6.9 Limitation on Investments, Loans and Advances. Make any advance, loan,
extension of credit or capital contribution to, or purchase any stock, bonds,
notes, debentures or other securities of or any assets constituting a business
unit of, or make any other investment in, any Person, except:
(a) extensions of trade credit in the ordinary course of business;
(b) investments in Cash Equivalents;
(c) loans and advances to employees of the Borrower or its Subsidiaries for
travel, entertainment and relocation expenses in the ordinary course of business
in an aggregate amount for the Borrower and its Subsidiaries not to exceed
$100,000 at any one time outstanding;
(d) investments and advances by the Borrower in its Subsidiaries which are Loan
Parties and investments and advances by such Subsidiaries in the Borrower and in
other Subsidiaries which are Loan Parties;
(e) investments in real property, equipment or other tangible assets useful in
the Borrower's or the applicable Subsidiaries business made by the Borrower or
any of its Subsidiaries with the proceeds of any Reinvestment Deferred Amount;
(f) investments, loans and advances consisting of pay-in-kind interest on
employee loans existing as of the date hereof;
(g) investments received in connection with the bankruptcy, reorganization or
settlement of delinquent agreements or disputes with customers and suppliers, in
each case, in the ordinary course of business; and
(h) Permitted Acquisitions by the Borrower or any of its Subsidiaries in an
aggregate amount (valued at cost) not to exceed $10,000,000 during the term of
this Agreement.
6.10 Modifications of Debt Instruments. Amend, modify or change, or consent or
agree to any amendment, modification or change to any of the terms of any
material Indebtedness (including terms of any Parity Obligations), except for
such amendments, modifications or waivers that could not reasonably be expected
to effect any change materially adverse to the interests and rights of the Agent
or the Lenders under any Loan Document.
6.11 Limitation on Transactions with Affiliates. Enter into any transaction,
including, without limitation, any purchase, sale, lease or exchange of property
or the rendering of any service, with any Affiliate unless such transaction is
(a) not prohibited under this Agreement, (b) in the ordinary course of the
Borrower's or such Subsidiary's business and (c) upon fair and reasonable terms
no less favorable to the Borrower or such Subsidiary, as the case may be, than
it would obtain in a comparable arm's length transaction with a Person which is
not an Affiliate.
6.12 Limitation on Sales and Leasebacks. Enter into any arrangement with any
Person providing for the leasing by the Borrower or any Subsidiary of real or
personal property which has been or is to be sold or transferred by the Borrower
or such Subsidiary to such Person or to any other Person to whom funds have been
or are to be advanced by such Person on the security of such property or rental
obligations of the Borrower or such Subsidiary.
6.13 Limitation on Changes in Fiscal Year. Permit the fiscal year of the
Borrower to end on a day other than December 31.
6.14 Limitation on Negative Pledge Clauses. Enter into with any Person any
agreement, other than (a) this Agreement, (b) the Recapitalization documents,
(c) any industrial revenue bonds, purchase money mortgages or Financing Leases
permitted by this Agreement (in which cases, any prohibition or limitation shall
only be effective against the assets securing such Indebtedness) and (d) any
secured Indebtedness permitted under subsection 6.2(i), which prohibits or
limits the ability of the Borrower or any of its Subsidiaries to create, incur,
assume or suffer to exist any Lien upon any of its property, assets or revenues,
whether now owned or hereafter acquired.
6.15 Limitation on Lines of Business. Enter into any business, either directly
or through any Subsidiary, except for those businesses in which the Borrower and
its Subsidiaries are engaged on the date of this Agreement or which are directly
related thereto.
SECTION 7. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan when due in
accordance with the terms thereof or hereof; or the Borrower shall fail to pay
any interest on any Loan, or any other amount payable hereunder, within five
days after any such interest or other amount becomes due in accordance with the
terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by the Borrower or any
other Loan Party herein or in any other Loan Document or which is contained in
any certificate, document or financial or other statement furnished by it at any
time under or in connection with this Agreement or any such other Loan Document
shall prove to have been incorrect in any material respect on or as of the date
made or deemed made; or
(c) The Borrower or any other Loan Party shall default in the observance or
performance of any agreement contained in subsections 5.4(a), 5.5, 5.7, 5.9 or
Section 6 hereof or in the Syndication Letter; or
(d) The Borrower or any other Loan Party shall default in the observance or
performance of any other agreement contained in this Agreement or any other Loan
Document (other than as provided in paragraphs (a) through (c) of this Section),
and such default shall continue unremedied for a period of 30 days; or
(e) The Borrower or any of its Subsidiaries shall (i) default in any payment of
principal of or interest of any Indebtedness (other than the Loans) or in the
payment of any Guarantee Obligation, beyond the period of grace (not to exceed
30 days), if any, provided in the instrument or agreement under which such
Indebtedness or Guarantee Obligation was created; or (ii) default in the
observance or performance of any other agreement or condition relating to any
such Indebtedness or Guarantee Obligation or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
or beneficiary or beneficiaries of such Guarantee Obligation (or a trustee or
agent on behalf of such holder or holders or beneficiary or beneficiaries) to
cause, with the giving of notice if required, such Indebtedness to become due
prior to its stated maturity or such Guarantee Obligation to become payable;
provided, that a default, event or condition described in clause (i), or (ii) of
this paragraph (e) shall not at any time constitute an Event of Default unless,
at such time, one or more defaults, events or conditions of the type described
in clauses (i) and (ii) of this paragraph (e) shall have occurred and be
continuing with respect to Indebtedness the outstanding principal amount of
which exceeds in the aggregate $250,000; or
(f) (i) The Borrower or any of its Subsidiaries shall commence any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian, conservator or other
similar official for it or for all or any substantial part of its assets, or the
Borrower or any of its Subsidiaries shall make a general assignment for the
benefit of its creditors; or (ii) there shall be commenced against the Borrower
or any of its Subsidiaries any case, proceeding or other action of a nature
referred to in clause (i) above which (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii) there shall be
commenced against the Borrower or any of its Subsidiaries any case, proceeding
or other action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of its assets
which results in the entry of an order for any such relief which shall not have
been vacated, discharged, or stayed or bonded pending appeal within 60 days from
the entry thereof; or (iv) the Borrower or any of its Subsidiaries shall take
any action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above;
or (v) the Borrower or any of its Subsidiaries shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts as they
become due; or
(g) (i) Any Person shall engage in any "prohibited transaction" (as defined in
Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) any
"accumulated funding deficiency" (as defined in Section 302 of ERISA), whether
or not waived, shall exist with respect to any Plan or any Lien in favor of the
PBGC or a Plan shall arise on the assets of the Borrower or any Commonly
Controlled Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee shall be
appointed, to administer or to terminate, any Single Employer Plan, which
Reportable Event or commencement of proceedings or appointment of a trustee is,
in the reasonable opinion of the Required Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any Single
Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the
Borrower or any Commonly Controlled Entity shall, or in the reasonable opinion
of the Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or
(vi) any other event or condition shall occur or exist with respect to a Plan;
and in each case in clauses (i) through (vi) above, such event or condition,
together with all other such events or conditions, if any, could reasonably be
expected to have a Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against the Borrower or
any of its Subsidiaries involving in the aggregate a liability (not paid or
fully covered by insurance) of $250,000 or more, and all such judgments or
decrees shall not have been vacated, discharged, stayed or bonded pending appeal
within 60 days from the entry thereof; or
(i) Any of the Security Documents shall cease, for any reason, to be in full
force and effect, or the Borrower or any other Loan Party which is a party to
any of the Security Documents shall so assert or (ii) the Lien created by any of
the Security Documents shall cease to be enforceable and of the same effect and
priority purported to be created thereby (other than by reason of the express
release thereof pursuant to the Security Documents);
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) of this Section with respect to the
Borrower, automatically the Commitments shall immediately terminate and the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement shall immediately become due and payable, and (B) if such
event is any other Event of Default, with the consent of the Required Lenders,
the Agent may, or upon the request of the Required Lenders, the Agent shall, by
notice to the Borrower declare the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement to be due and payable
forthwith, whereupon the same shall immediately become due and payable. Except
as expressly provided above in this Section, presentment, demand, protest and
all other notices of any kind are hereby expressly waived.
SECTION 8. THE AGENT
8.1 Appointment. Each Lender hereby irrevocably designates and appoints the
Agent as the agent of such Lender under this Agreement and the other Loan
Documents, and each such Lender irrevocably authorizes the Agent, in such
capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the Agent.
8.2 Delegation of Duties. The Agent may execute any of its duties under this
Agreement and the other Loan Documents by or through agents or attorneys-in-fact
and shall be entitled to advice of counsel concerning all matters pertaining to
such duties. The Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys in-fact selected by it.
8.3 Exculpatory Provisions. Neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates shall be (i)
liable for any action lawfully taken or omitted to be taken by it or such Person
under or in connection with this Agreement or any other Loan Document (except
for its or such Person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by the Borrower or any officer thereof
contained in this Agreement or any other Loan Document or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Agent under or in connection with, this Agreement or any other Loan
Document or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document or for any failure
of the Borrower to perform its obligations hereunder or thereunder. The Agent
shall not be under any obligation to any Lender to ascertain or to inquire as to
the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of the Borrower.
8.4 Reliance by Agent. The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any Note, writing, resolution, notice, consent,
certificate, affidavit, letter, telecopy, telex or teletype message, statement,
order or other document or conversation believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel (including, without limitation, counsel
to the Borrower), independent accountants and other experts selected by the
Agent. The Agent may deem and treat the payee of any Note as the owner thereof
for all purposes unless a written notice of assignment, negotiation or transfer
thereof shall have been filed with the Agent. The Agent shall be fully justified
in failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Required Lenders as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action. The
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement and the other Loan Documents in accordance with a
request of the Required Lenders, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Loans.
8.5 Notice of Default. The Agent shall not be deemed to have knowledge or notice
of the occurrence of any Default or Event of Default hereunder unless the Agent
has received notice from a Lender or the Borrower referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default". In the event that the Agent receives such a notice, the
Agent shall give notice thereof to the Lenders. The Agent shall take such action
with respect to such Default or Event of Default as shall be reasonably directed
by the Required Lenders; provided that unless and until the Agent shall have
received such directions, the Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the
Lenders.
8.6 Non-Reliance on Agent and Other Lenders. Each Lender expressly acknowledges
that neither the Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates has made any representations or warranties to it
and that no act by the Agent hereinafter taken, including any review of the
affairs of the Borrower, shall be deemed to constitute any representation or
warranty by the Agent to any Lender. Each Lender represents to the Agent that it
has, independently and without reliance upon the Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Borrower and made its
own decision to make its Loans hereunder and enter into this Agreement. Each
Lender also represents that it will, independently and without reliance upon the
Agent or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigation as it deems necessary
to inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Borrower. Except for notices, reports and
other documents expressly required to be furnished to the Lenders by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
the Borrower which may come into the possession of the Agent or any of its
members, partners, officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
8.7 Indemnification. The Lenders agree to indemnify the Agent in its capacity as
such (to the extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so), ratably according to their respective Pro
Rata Share in effect on the date on which indemnification is sought, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including, without limitation, at any time
following the payment of the Loans) be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of, the Commitments,
this Agreement, any of the other Loan Documents or any documents contemplated by
or referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by the Agent under or in connection with
any of the foregoing; provided that no Lender shall be liable for the payment of
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting solely
from the Agent's gross negligence or willful misconduct. The agreements in this
subsection shall survive the payment of the Loans and all other amounts payable
hereunder.
8.8 Agent in Its Individual Capacity. The Agent and its Affiliates may make
loans to, make investments in, hold equity interest in, accept deposits from and
generally engage in any kind of business with the Borrower as though the Agent
were not the Agent hereunder and under the other Loan Documents. With respect to
the Loans made by it, the Agent shall have the same rights and powers under this
Agreement and the other Loan Documents as any Lender and may exercise the same
as though it were not the Agent, and the terms "Lender" and "Lenders" shall
include the Agent in its individual capacity.
8.9 Successor Agent. The Agent may resign as Agent upon 10 days' notice to the
Lenders and the Borrower. If the Agent shall resign as Agent under this
Agreement and the other Loan Documents, then the Required Lenders shall appoint
from among the Lenders a successor agent for the Lenders, which successor agent
(provided that it shall have been approved by the Borrower), shall succeed to
the rights, powers and duties of the Agent hereunder. Effective upon such
appointment and approval, the term "Agent" shall mean such successor agent, and
the former Agent's rights, powers and duties as Agent shall be terminated,
without any other or further act or deed on the part of such former Agent or any
of the parties to this Agreement or any holders of the Loans. After any retiring
Agent's resignation as Agent, the provisions of this Section 8 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement and the other Loan Documents.
8.10 Parity Obligations. The Lenders authorize the Agent to enter into (i) a
collateral trust agreement or other arrangement on terms acceptable to the Agent
and the Required Lenders to secure on an Equal and Ratable basis with the Loan
Obligations, any Parity Obligations, and (ii) an intercreditor agreement on
terms acceptable to the Agent and the Required Lenders with the holders of
Parity Obligations.
SECTION 9. MISCELLANEOUS
9.1 Amendments and Waivers. Neither this Agreement nor any other Loan Document,
nor any terms hereof or thereof may be amended, supplemented or modified except
in accordance with the provisions of this subsection. The Required Lenders may,
or, with the written consent of the Required Lenders, the Agent may, from time
to time, (a) enter into with the Borrower written amendments, supplements or
modifications hereto and to the other Loan Documents (other than the Syndication
Letter) for the purpose of adding any provisions to this Agreement or the other
Loan Documents (other than the Syndication Letter) or changing in any manner the
rights of the Lenders or of the Borrower hereunder or thereunder or (b) waive,
on such terms and conditions as the Required Lenders or the Agent, as the case
may be, may specify in such instrument, any of the requirements of this
Agreement or the other Loan Documents (other than the Syndication Letter) or any
Default or Event of Default and its consequences; provided, however, that no
such waiver and no such amendment, supplement or modification shall (i) reduce
the amount or extend the scheduled date of maturity of any Loan or of any
installment thereof, or reduce the stated rate of any interest or fee payable
hereunder or extend the scheduled date of any payment thereof or increase the
amount or extend the expiration date of any Lender's Commitments, in each case
without the consent of each Lender affected thereby, or (ii) amend, modify or
waive any provision of this subsection or reduce the percentage specified in the
definition of Required Lenders or consent to the assignment or transfer by the
Borrower of any of its rights and obligations under this Agreement and the other
Loan Documents or release all or substantially all of the Collateral, in each
case without the written consent of all the Lenders or (iii) amend, modify or
waive any provision of Section 8 without the written consent of the then Agent.
Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Borrower, the
Lenders, the Agent and all future holders of the Loans. In the case of any
waiver, the Borrower, the Lenders and the Agent shall be restored to their
former positions and rights hereunder and under the other Loan Documents, and
any Default or Event of Default waived shall be deemed to be cured and not
continuing; no such waiver shall extend to any subsequent or other Default or
Event of Default or impair any right consequent thereon.
9.2 Notices. All notices, requests and demands to or upon the respective parties
hereto to be effective shall be in writing (including by facsimile transmission)
and, unless otherwise expressly provided herein, shall be deemed to have been
duly given or made (a) in the case of delivery by hand, when delivered, (b) in
the case of delivery by mail, three days after being deposited in the mails,
postage prepaid, or (c) in the case of delivery by facsimile transmission, when
sent and receipt has been confirmed, addressed as follows in the case of the
Borrower and the Agent, and as set forth in Schedule I in the case of the other
parties hereto, or to such other address as may be hereafter notified by the
respective parties hereto:
The Borrower: Infocrossing, Inc.
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.,
Senior Vice President and General Counsel
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
The Agent: Infocrossing Agent, Inc.
C/ MidOcean Capital Investors, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
And C/ Sandler Capital Partners V, L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. Director, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
provided that any notice, request or demand to or upon the Agent or the Lenders
shall not be effective until received.
9.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the Agent or any Lender, any right, remedy, power or
privilege hereunder or under the other Loan Documents shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
9.4 Survival of Representations and Warranties. All representations and
warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans hereunder.
9.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay or reimburse
the Agent and each Lender and their Affiliates for all their reasonable
out-of-pocket costs and expenses incurred in connection with the development,
preparation and execution of, and any amendment, supplement, waiver or
modification to, this Agreement and the other Loan Documents and any other
documents prepared in connection herewith or therewith (including, for all
purposes of subsection 9.5, documents prepared pursuant to subsection 8.10), and
the consummation and administration of the transactions contemplated hereby and
thereby, including, without limitation, the reasonable fees and disbursements of
counsel to the Agent and each Lender and their Affiliates, provided, that, from
and after the Closing Date, such reimbursement for legal fees shall be limited
to the fees and disbursements of one primary counsel except (i) as provided in
clause (b) of this subsection 9.5, and (ii) for so long as the Investors
together comprise the Required Lenders, (b) to pay or reimburse each Lender and
the Agent and their Affiliates for all its costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement, the other Loan Documents and any such other documents, including,
without limitation, the fees and disbursements of counsel to each Lender and of
counsel to the Agent, (c) to pay, indemnify, and hold each Lender and the Agent
and their Affiliates and the respective members, partners, directors, officers,
employees, agents and advisors of such Person and such Person's Affiliates
harmless from, any and all recording and filing fees and any and all liabilities
with respect to, or resulting from any delay in paying, stamp, excise and other
taxes, if any, which may be payable or determined to be payable in connection
with the execution and delivery of, or consummation or administration of any of
the transactions contemplated by, or any amendment, supplement or modification
of, or any waiver or consent under or in respect of, this Agreement, the other
Loan Documents and any such other documents, and (d) to pay, indemnify, and hold
each Lender and the Agent and their Affiliates and the respective members,
partners, directors, officers, employees, agents and advisors of such Person and
such Person's Affiliates harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of this
Agreement, the other Loan Documents, documents in connection with the
Recapitalization and any such other documents, including, without limitation,
any of the foregoing relating to any Environmental Claims or noncompliance with
Environmental Laws applicable to the operations of the Borrower, any of its
Subsidiaries or any of the Borrower Property (all the foregoing in this clause
(d), collectively, the "indemnified liabilities"), provided that the Borrower
shall have no obligation hereunder to the Agent or any Lender with respect to
indemnified liabilities to the extent determined in the final non-appealable
judgment of a court of competent jurisdiction to have arisen from the gross
negligence or willful misconduct of the Agent or any such Lender. The agreements
in this subsection shall survive repayment of the Loans and all other amounts
payable hereunder.
9.6 Successors and Assigns; Participations and Assignments. (a) This Agreement
shall be binding upon and inure to the benefit of the Borrower, the Lenders, the
Agent and their respective successors and assigns, except that the Borrower may
not assign or transfer any of its rights or obligations under this Agreement
without the prior written consent of each Lender.
(b) Any Lender may at any time sell to one or more banks or other entities
("Participants") participating interests in any Loan owing to such Lender or any
other interest of such Lender hereunder and under the other Loan Documents. In
the event of any such sale by a Lender of a participating interest to a
Participant, such Lender's obligations under this Agreement to the other parties
to this Agreement shall remain unchanged, such Lender shall remain solely
responsible for the performance thereof, such Lender shall remain the holder of
any such Loan for all purposes under this Agreement and the other Loan
Documents, and the Borrower and the Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. No Lender shall
be entitled to create in favor of any Participant, in the participation
agreement pursuant to which such Participant's participating interest shall be
created or otherwise, any right to vote on, consent to or approve any matter
relating to this Agreement or any other Loan Document except for those specified
in clauses (i) and (ii) of the proviso to subsection 9.1. The Borrower agrees
that if amounts outstanding under this Agreement are due or unpaid, or shall
have been declared or shall have become due and payable upon the occurrence of
an Event of Default, each Participant shall, to the maximum extent permitted by
applicable law, be deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement, provided that, in purchasing such participating
interest, such Participant shall be deemed to have agreed to share with the
Lenders the proceeds thereof as provided in subsection 9.7(a) as fully as if it
were a Lender hereunder. The Borrower also agrees that each Participant shall be
entitled to the benefits of subsections 2.7, 2.8 and 2.9 (Requirements of Law,
Taxes and Indemnity) with respect to its participation in the Loans outstanding
from time to time as if it was a Lender; provided that, in the case of
subsection 2.8 (Taxes), such Participant shall have complied with the
requirements of said subsection and provided, further, that no Participant shall
be entitled to receive any greater amount pursuant to any such subsection than
the transferor Lender would have been entitled to receive in respect of the
amount of the participation transferred by such transferor Lender to such
Participant had no such transfer occurred.
(c) Any Lender may at any time and from time to time assign to any Lender, any
affiliate thereof or any other entity having total assets in excess of
$5,000,000 (an "Assignee") all or any part of its rights and obligations under
this Agreement and the other Loan Documents pursuant to an Assignment and
Acceptance, executed by such Assignee, such assigning Lender (and, in the case
of an Assignee that is not then a Lender or an affiliate thereof, by the Agent)
and delivered to the Agent for its acceptance and recording in the Register,
provided that, in the case of any such assignment to any Person other than an
Affiliate of a Lender, the sum of the aggregate principal amount of the Loans
being assigned and, if such assignment is of less than all of the rights and
obligations of the assigning Lender, the sum of the aggregate principal amount
of the Loans remaining with the assigning Lender are each not less than 5% of
the aggregate principal amount of the Loans then outstanding (or such lesser
amount as may be agreed to by the Borrower and the Agent). A Lender may assign
its rights and obligations under this Agreement and the other Loan Documents
relating to the Loans without assigning its rights and obligations with respect
to any warrants that it may own. Upon such execution, delivery, acceptance and
recording, from and after the effective date determined pursuant to such
Assignment and Acceptance, (x) the Assignee thereunder shall be a party hereto
and, to the extent provided in such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder as set forth therein, and (y) the
assigning Lender thereunder shall, to the extent provided in such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all or the remaining portion of an
assigning Lender's rights and obligations under this Agreement, such assigning
Lender shall cease to be a party hereto). At the request of the Assignee and/or
the assigning Lender, new Notes shall be executed and delivered by the Borrower
for any assignment.
(d) The Agent, on behalf of the Borrower, shall maintain at the address of the
Agent referred to in subsection 9.2 a copy of each Assignment and Acceptance
delivered to it and a register (the "Register") for the recordation of the names
and addresses of the Lenders the principal amount(s) of the Loans owing to each
Lender from time to time. The entries in the Register shall be conclusive, in
the absence of manifest error, and the Borrower, the Agent and the Lenders may
(and, in the case of any Loan or other obligation hereunder not evidenced by a
Note, shall) treat each Person whose name is recorded in the Register as the
owner of a Loan or other obligation hereunder as the owner thereof for all
purposes of this Agreement and the other Loan Documents, notwithstanding any
notice to the contrary. Any assignment of any Loan or other obligation hereunder
not evidenced by a Note shall be effective only upon appropriate entries with
respect thereto being made in the Register. Any assignment of any Loan or other
obligation hereunder evidenced by a Note shall be effective only if effected by
the surrender of the Note to the Borrower (or other acceptable affidavit of lost
or misplaced Note from the applicable Lender).
(e) Upon its receipt of an Assignment and Acceptance executed by an assigning
Lender and an Assignee (and, in the case of an Assignee that is not then a
Lender or an affiliate thereof, by the Agent) together with payment to the Agent
of a registration and processing fee of $4000, the Agent shall (i) promptly
accept such Assignment and Acceptance and (ii) on the effective date determined
pursuant thereto record the information contained therein in the Register and
give notice of such acceptance and recordation to the Lenders and the Borrower.
(f) The Borrower authorizes each Lender to disclose to any Participant or
Assignee (each, a "Transferee") and any prospective Transferee, any and all
financial information in such Lender's possession concerning the Borrower and
its Affiliates which has been delivered to such Lender by or on behalf of the
Borrower pursuant to this Agreement or which has been delivered to such Lender
by or on behalf of the Borrower in connection with such Lender's credit
evaluation of the Borrower and its Affiliates prior to becoming a party to this
Agreement.
(g) For avoidance of doubt, the parties to this Agreement acknowledge that the
provisions of this subsection concerning assignments of Loans and Notes relate
only to absolute assignments and that such provisions do not prohibit
assignments creating security interests, including, without limitation, any
pledge or assignment by a Lender of any Loan or Note to any Federal Reserve Bank
in accordance with applicable law.
9.7 Adjustments; Set-off. (a) If any Lender (a "benefited Lender") shall at any
time receive any payment of all or part of its Loans, or interest thereon, or
receive any collateral in respect thereof (whether voluntarily or involuntarily,
by set-off, pursuant to events or proceedings of the nature referred to in
Section 7(f), or otherwise), in a greater proportion than any such payment to or
collateral received by any other Lender, if any, in respect of such other
Lender's Loans, or interest thereon, such benefited Lender shall purchase for
cash from the other Lenders a participating interest in such portion of each
such other Lender's Loan, or shall provide such other Lenders with the benefits
of any such collateral, or the proceeds thereof, as shall be necessary to cause
such benefited Lender to share the excess payment or benefits of such collateral
or proceeds ratably with each of the Lenders; provided, however, that if all or
any portion of such excess payment or benefits is thereafter recovered from such
benefited Lender, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders provided by law, each
Lender shall have the right, without prior notice to the Borrower, any such
notice being expressly waived by the Borrower to the extent permitted by
applicable law, upon any amount becoming due and payable by the Borrower
hereunder (whether at the stated maturity, by acceleration or otherwise) to
set-off and appropriate and apply against such amount any and all deposits
(general or special, time or demand, provisional or final), in any currency, and
any other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender or any branch or agency thereof to or for the
credit or the account of the Borrower. Each Lender agrees promptly to notify the
Borrower and the Agent after any such set-off and application made by such
Lender, provided that the failure to give such notice shall not affect the
validity of such set-off and application.
9.8 Counterparts. This Agreement may be executed by one or more of the parties
to this Agreement on any number of separate counterparts (including by facsimile
transmission), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of this Agreement
signed by all the parties shall be lodged with the Borrower and the Agent.
9.9 Severability. Any provision of this Agreement which 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 hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
9.10 Integration. This Agreement, the Syndication Letter and the other Loan
Documents represent the agreement of the Borrower, the Agent and the Lenders
with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Agent or any Lender relative
to subject matter hereof not expressly set forth or referred to herein, in the
Syndication Letter or in the other Loan Documents.
9.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
9.12 Submission To Jurisdiction; Waivers. The Borrower hereby irrevocably
and unconditionally:
(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement and the other Loan Documents to which it is a party,
or for recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the Courts of the State of New York, the
courts of the United States of America for the Southern District of New York,
and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the Borrower at its
address set forth in subsection 9.2 or at such other address of which the Agent
shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to ▇▇▇ in
any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it may have
to claim or recover in any legal action or proceeding referred to in this
subsection any special, exemplary, punitive or consequential damages.
9.13 Acknowledgements. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and delivery of
this Agreement and the other Loan Documents;
(b) neither the Agent nor any Lender has any fiduciary relationship with or duty
to the Borrower arising out of or in connection with this Agreement or any of
the other Loan Documents, and the relationship between Agent and Lenders, on one
hand, and the Borrower, on the other hand, in connection herewith or therewith
is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Lenders or among the Borrower and the Lenders.
9.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENT AND THE LENDERS HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
9.15 Confidentiality.
(a) Each of the Agent and the Lenders agrees to keep confidential all non-public
information provided to it by the Borrower or any Subsidiary pursuant to this
Agreement that is designated by the Borrower or such Subsidiary as confidential;
provided that nothing herein shall prevent the Agent or any Lender from
disclosing any such information (i) to the Agent, any other Lender or any
affiliate of any thereof, (ii) to any Transferee or prospective Transferee that
agrees to comply with the provisions of this Section or substantially equivalent
provisions, (iii) to any of its employees, directors, agents, attorneys,
accountants and other professional advisors, (iv) upon the request or demand of
any Governmental Authority having jurisdiction over it, (v) in response to any
order of any court or other Governmental Authority or as may otherwise be
required pursuant to any Requirement of Law, (vi) that has been publicly
disclosed other than in breach of this Section, (vii) to the National
Association of Insurance Commissioners or any similar organization or any
nationally recognized rating agency that requires access to information about a
Lender's investment portfolio in connection with ratings issued with respect to
such Lender.
(b) Notwithstanding anything to the contrary in this Agreement, any party to
this Agreement (and each employee, representative, or other agent of any party
to this Agreement) may disclose to any and all Persons, without limitation of
any kind, the tax treatment and tax structure of the transactions contemplated
by this Agreement, and all materials of any kind (including opinions or other
tax analyses) related to such tax treatment and tax structure; provided that
this sentence shall not permit any Person to disclose the name of, or other
information that would identify, any party to such transactions or to disclose
confidential commercial information regarding such transactions not otherwise
permitted hereunder.
9.16 Sharing of Liens. Notwithstanding (i) anything to the contrary contained in
the Loan Documents or any other document executed in connection therewith, (ii)
the time of incurrence of any of the Loan Obligations or the Parity Obligations,
(iii) the order or method of attachment or perfection of any Liens securing the
Parity Obligations, (iv) the time or order of filing or recording of financing
statements, mortgages or other documents filed or recorded to perfect any Lien
upon the Collateral, (v) the time of taking possession or control over any
Collateral, or (vi) the rules for determining priority under any law governing
relative priorities of Liens: (x) all Liens at any time granted by the Borrower
or its Subsidiaries in the Collateral to secure the Loan Obligations or the
Parity Obligations shall secure Equally and Ratably all liabilities of the
Borrower and such Subsidiary under or in respect of the Loan Obligations or the
Parity Obligations; and (y) all proceeds of the sale, collection and realization
of Collateral pursuant to the exercise of the rights and remedies of the Agent
and the Lenders under the Loan Documents subject to a Lien at any time granted
by the Borrower or any of its Subsidiaries in the Collateral to secure the Loan
Obligations or the Parity Obligations shall be allocated and distributed Equally
and Ratably on account of the liabilities of the Borrower or such Subsidiary
under or in respect of the Loan Obligations or the Parity Obligations.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
INFOCROSSING, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
________________________________
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title:Chairman and Chief Executive Officer
INFOCROSSING AGENT, INC., as Agent
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
MIDOCEAN CAPITAL INVESTORS, L.P., as a Lender
By: MidOcean Capital Partners, L.P., its general partner
By: Existing Fund GP, Ltd., its general partner
By: /s/ ▇▇▇▇▇▇ Spring
________________________________
Name: ▇▇▇▇▇▇ Spring
Title:
SANDLER CAPITAL PARTNERS V, L.P., as a Lender
By: Sandler Investment Partners, L.P., General Partner
By: Sandler Capital Management, General Partner
By: MJDM Corp., a General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
SANDLER CAPITAL PARTNERS V FTE, L.P., as a Lender
By: Sandler Investment Partners, L.P., General Partner
By: Sandler Capital Management, General Partner
By: MJDM Corp., a General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
SANDLER TECHNOLOGY PARTNERS SUBSIDIARY, LLC, as a Lender
By: Sandler Technology Partners, L.P., Manager
By: Sander Investment Partners, L.P., General Partner
By: Sandler Capital Management, General Partner
By: MJDM Corp., a General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
SANDLER CO-INVESTMENT PARTNERS, L.P., as a Lender
By: Sandler Capital Management, General Partner
By: MJDM Corp., a General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
SANDLER CAPITAL PARTNERS V GERMANY, L.P., as a Lender
By: Sandler Investment Partners, L.P., General Partner
By: Sandler Capital Management, General Partner
By: MJDM Corp., a General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
PRICE FAMILY LIMITED PARTNERS, as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
________________________________
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: General Partner
Schedule I
Lender's Addresses
MidOcean Capital Investors, L.P. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Sandler Capital Partners V, L.P. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Sandler Capital Partners V FTE, L.P. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Sandler Technology Partners
Subsidiary, LLC ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Sandler Co-Investment Partners, L.P. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Sandler Capital Partners V
Germany, L.P. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Price Family Limited Partners ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ Floor
C/ Evercore Partners, Inc. ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Schedule 2.1
Lender's Commitment
MidOcean Capital Investors, L.P. $12,520,875.00
Sandler Capital Partners V Germany, L.P. $301,308.00
Sandler Capital Partners V, L.P. $8,097,892.00
Sandler Capital Partners V FTE, L.P. $2,994,801.00
Sandler Technology Partners Subsidiary, LLC $834,724.00
Sandler Co-Investment Partners, L.P. $208,675.00
Price Family Limited Partners $41,725.00
---------------
Total Commitment: $25,000,000.00
Schedule 2.2
Amortization of Loans
Payment Date Amount
December 31, 2003 0.25%
March 31, 2004 0.25%
June 30, 2004 0.25%
September 30, 2004 0.25%
December 31, 2004 0.25%
March 31, 2005 0.25%
June 30, 2005 0.25%
September 30, 2005 0.25%
December 31, 2005 0.25%
March 31, 2006 0.25%
June 30, 2006 0.25%
September 30, 2006 0.25%
December 31, 2006 0.25%
March 31, 2007 0.25%
June 30, 2007 0.25%
September 30, 2007 0.25%
December 31, 2007 0.25%
March 31, 2008 0.25%
June 30, 2008 0.25%
Maturity Date 100% less amounts previously paid
---------------------------------
Schedule 6.1(a)
Leverage Ratio
Fiscal quarter ended Ratio
--------------------- -----
December 31, 2003 3.65 to 1.00
March 31, 2004 3.50 to 1.00
June 30, 2004 3.25 to 1.00
September 30, 2004 3.00 to 1.00
December 31, 2004 2.75 to 1.00
March 31, 2005 2.50 to 1.00
June 30, 2005 2.35 to 1.00
September 30, 2005 2.25 to 1.00
December 31, 2005 2.00 to 1.00
March 31, 2006 1.25 to 1.00
June 30, 2006 1.25 to 1.00
September 30, 2006 1.25 to 1.00
December 31, 2006 1.25 to 1.00
March 31, 2007 0.75 to 1.00
June 30, 2007 0.75 to 1.00
September 30, 2007 0.75 to 1.00
December 31, 2007 0.75 to 1.00
March 31, 2008 0.75 to 1.00
June 30, 2008 0.75 to 1.00
September 30, 2008 0.75 to 1.00
Schedule 6.1(b)
Minimum Consolidated EBITDA
Fiscal quarter ended Amount
December 31, 2003 $9,000,000
March 31, 2004 $9,500,000
June 30, 2004 $10,200,000
September 30, 2004 $11,000,000
December 31, 2004 $12,000,000
March 31, 2005 $12,000,000
June 30, 2005 $12,500,000
September 30, 2005 $13,200,000
December 31, 2005 $13,900,000
March 31, 2006 $14,900,000
June 30, 2006 $15,900,000
September 30, 2006 $15,900,000
December 31, 2006 $15,900,000
March 31, 2007 $18,200,000
June 30, 2007 $18,200,000
September 30, 2007 $18,200,000
December 31, 2007 $18,200,000
March 31, 2008 $20,000,000
June 30, 2008 $20,000,000
September 30, 2008 $20,000,000
Schedule 6.1(c)
Fixed Charge Ratio
Fiscal quarter ended Ratio
--------------------- -----
December 31, 2003 0.90 to 1.00
March 31, 2004 0.95 to 1.00
June 30, 2004 1.00 to 1.00
September 30, 2004 1.00 to 1.00
December 31, 2004 1.00 to 1.00
March 31, 2005 1.10 to 1.00
June 30, 2005 1.20 to 1.00
September 30, 2005 1.30 to 1.00
December 31, 2005 1.40 to 1.00
March 31, 2006 1.50 to 1.00
June 30, 2006 1.50 to 1.00
September 30, 2006 1.50 to 1.00
December 31, 2006 1.50 to 1.00
March 31, 2007 1.50 to 1.00
June 30, 2007 1.50 to 1.00
September 30, 2007 1.50 to 1.00
December 31, 2007 1.50 to 1.00
March 31, 2008 1.50 to 1.00
June 30, 2008 1.50 to 1.00
September 30, 2008 1.50 to 1.00