EXHIBIT 10.4
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CREDIT AGREEMENT
among
USOL HOLDINGS, INC.,
USOL, INC.,
VARIOUS BANKS,
PARIBAS,
as Administrative Agent and Syndication Agent,
and
DEUTSCHE BANK AG, NEW YORK BRANCH,
as Documentation Agent
$35,000,000
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Dated as of December 30, 1999
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CREDIT AGREEMENT, dated as of December 30, 1999, among USOL
HOLDINGS, INC., a corporation organized and existing under the laws of the State
of Oregon ("Holdings"), USOL, INC., a corporation organized and existing under
the laws of the State of Delaware (the "Borrower"), the financial institutions
party hereto from time to time (each a "Bank" and, collectively, the "Banks"),
PARIBAS, as Administrative Agent and Syndication Agent, and DEUTSCHE BANK AG,
NEW YORK BRANCH, as Documentation Agent. Unless otherwise defined herein, all
capitalized terms used herein and defined in Section 11 are used herein as
therein defined.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, subject to and upon the terms and conditions herein
set forth, the Banks are willing to make available to the Borrower the
respective credit facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
Section 1. Amount and Terms of Credit.
1.01 The Commitments. Subject to and upon the terms and
conditions set forth herein, each Bank with a Commitment severally agrees at any
time and from time to time on and after the Initial Borrowing Date and prior to
the Conversion Date, to make a loan or loans (each a "Loan" and, collectively,
the "Loans") to the Borrower, which Loans (i) shall, at the option of the
Borrower, be Base Rate Loans or Eurodollar Loans; provided (x) that except as
otherwise specifically provided in Section 1.10(b), all Loans comprising the
same Borrowing shall at all times be of the same Type and (y) no Eurodollar
Loans may be incurred prior to the Syndication Termination Date and (ii) shall
not exceed for any Bank at any time outstanding in aggregate principal amount
the lesser of (x) the Commitment of such Bank at such time (before giving effect
to any reductions thereto on such date pursuant to Section 2.03(a)(i) but after
giving effect to any reductions thereto on or prior to such date pursuant to
Section 2.03(a)(ii) and (y) that amount which equals such Bank's Percentage of
the Borrowing Base at such time. Once repaid, the Loans may be reborrowed prior
to the Conversion Date in accordance with the provisions hereof. After the
Conversion Date, once repaid Loans may not be reborrowed.
1.02 Minimum Amount of Each Borrowing. The aggregate principal
amount of each Borrowing under the Facility hereunder shall not be less than the
Minimum Borrowing Amount for the Facility and, if greater, shall be in integral
multiples of $250,000 in the case of all Loans. More than one Borrowing may
occur on the same date, but at no time shall there be outstanding more than six
Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. Whenever the Borrower desires to
make a Borrowing hereunder, it shall give the Administrative Agent at its Notice
Office, prior to 11:00 a.m. (New York time) at least one Business Day's prior
written notice (or telephonic notice promptly confirmed in writing) of each
Borrowing of Base Rate Loans and at least three Business Days' prior written
notice (or telephonic notice promptly confirmed in writing) of each Borrowing of
Eurodollar Loans. Each such notice (each a "Notice of Borrowing"), except as
otherwise expressly provided in Section 1.10, shall be irrevocable and shall be
given by the Borrower in the form of Exhibit A-1, appropriately completed to
specify (i) the aggregate principal amount of the Loans to be made pursuant to
such Borrowing, (ii) the date of such Borrowing (which shall be a Business Day)
and (iii) whether the Loans being made pursuant to such Borrowing are to be
initially maintained as Base Rate Loans or Eurodollar Loans and, if Eurodollar
Loans, the initial Interest Period to be applicable thereto. Any notice received
after 11:00 a.m. (New York time) shall be deemed to be received on the next
succeeding Business Day. The Administrative Agent shall promptly give each Bank
which is required to make Loans notice of such proposed Borrowing, of such
Bank's proportionate share thereof and of the other matters specified in the
Notice of Borrowing.
1.04 Disbursement of Funds. No later than 12:00 Noon (New York
time) on the date specified in each Notice of Borrowing, each Bank with a
Commitment will make available its pro rata portion (determined in accordance
with Section 1.07) of each such Borrowing requested to be made on such date. All
such amounts shall be made available in Dollars and in immediately available
funds at the Payment Office of the Administrative Agent, and the Administrative
Agent will make available to the Borrower at the Payment Office the aggregate of
the amounts so made available by the Banks. Unless the Administrative Agent
shall have been notified in writing by any Bank prior to the date of Borrowing
that such Bank does not intend to make available to the Administrative Agent
such Bank's portion of any Borrowing to be made on such date, the Administrative
Agent may assume that such Bank has made such amount available to the
Administrative Agent on such date of Borrowing and the Administrative Agent may,
in reliance upon such assumption, make available to the Borrower a corresponding
amount. If such corresponding amount is not in fact made available to the
Administrative Agent by such Bank, the Administrative Agent shall be entitled to
recover such corresponding amount on demand from such Bank. If such Bank does
not pay such corresponding amount forthwith upon the Administrative Agent's
demand therefor, the Administrative Agent shall promptly notify the appropriate
Borrower, and such Borrower shall immediately pay such corresponding amount to
the Administrative Agent. The Administrative Agent shall also be entitled to
recover on demand from such Bank or such Borrower, as the case may be, interest
on such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Administrative Agent to such
Borrower, until the date such corresponding amount is recovered by the
Administrative Agent, at a rate per annum equal to (i) if recovered from such
Bank, the cost to the Administrative Agent of acquiring overnight federal funds
and (ii) if recovered from either Borrower, the rate of interest applicable to
the respective Borrowing, as determined pursuant to Section 1.08. Nothing in
this Section 1.04 shall be deemed to relieve any Bank from its obligation to
make Loans hereunder or to prejudice any rights which such Borrower may have
against any Bank as a result of any failure by such Bank to make Loans
hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the principal
of, and interest on, the Loans made by each Bank shall be evidenced by a
promissory note duly executed and delivered by the Borrower substantially in the
form of Exhibit B with blanks appropriately completed in conformity herewith
(each, a "Note" and, collectively, the "Notes").
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(b) The Note issued to each Bank with a Commitment shall (i)
be executed by the Borrower, (ii) be payable to the order of such Bank or its
registered assigns and be dated the Initial Borrowing Date, (iii) be in a stated
principal amount equal to the Commitment of such Bank and be payable in the
principal amount of the Loans evidenced thereby, (iv) mature on the Maturity
Date, (v) bear interest as provided in the appropriate clause of Section 1.08 in
respect of the Base Rate Loans and Eurodollar Loans, as the case may be,
evidenced thereby, (vi) be subject to voluntary repayment as provided in Section
3.01, and mandatory repayment as provided in Section 3.02 and (vii) be entitled
to the benefits of this Agreement and the Guaranties and be secured by the
Security Documents.
(c) Each Bank will note on its internal records the amount of
each Loan made by it and each payment in respect thereof and will prior to any
transfer of any of its Notes endorse on the reverse side thereof the outstanding
principal amount of Loans evidenced thereby. Failure to make any such notation
or the making of an incorrect notation shall not affect the Borrower's
obligations in respect of such Loans.
1.06 Conversions. Each Borrower shall have the option to
convert, on any Business Day, all or a portion at least equal to the applicable
Minimum Borrowing Amount of the outstanding principal amount of the Loans, made
pursuant to one or more Borrowings of one Type of Loan into a Borrowing or
Borrowings of the other Type of Loan; provided that:
(i) except as otherwise provided in Section 1.10(b),
Eurodollar Loans may be converted into Base Rate Loans only on the last
day of an Interest Period applicable to the Loans being converted and
no such partial conversion of Eurodollar Loans shall reduce the
outstanding principal amount of such Eurodollar Loans made pursuant to
a single Borrowing to less than the applicable Minimum Borrowing
Amount;
(ii) Base Rate Loans may only be converted into Eurodollar
Loans if no Default or Event of Default is in existence on the date of
the conversion;
(iii) no conversion pursuant to this Section 1.06 shall result
in a greater number of Borrowings than is permitted under Section 1.02;
and
(iv) prior to the Syndication Termination Date, no Loan may
be converted into Eurodollar Loans.
Each such conversion shall be effected by the Borrower by giving the
Administrative Agent at its Notice Office prior to 12:00 Noon (New York time) at
least three Business Days' prior written notice (or telephonic notice promptly
confirmed in writing) (each a "Notice of Conversion") which notice shall be in
the form of Exhibit A-2, appropriately completed to specify the Loans to be so
converted, the Borrowing(s) pursuant to which such Loans were made and, if to be
converted into Eurodollar Loans, the Interest Period to be initially applicable
thereto. The Administrative Agent shall give each Bank prompt notice of any such
proposed conversion affecting any of its Loans.
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1.07 Pro Rata Borrowings. All Borrowings of Loans under this
Agreement shall be incurred from the Banks pro rata on the basis of their
respective Commitments. It is understood that no Bank shall be responsible for
any default by any other Bank of its obligation to make Loans hereunder and that
each Bank shall be obligated to make the Loans provided to be made by it
hereunder regardless of the failure of any other Bank to make its Loans
hereunder.
1.08 Interest. (a) The Borrower agrees to pay interest in
respect of the unpaid principal amount of each Base Rate Loan made to it from
the date of the Borrowing thereof until the earlier of (i) the maturity thereof
(whether by acceleration or otherwise) of such Base Rate Loan and (ii) the
conversion of such Base Rate Loan to a Eurodollar Loan pursuant to Section 1.06,
at a rate per annum which shall at all times be equal to the sum of the
Applicable Margin plus the Base Rate in effect from time to time.
(b) The Borrower agrees to pay interest in respect of the
unpaid principal amount of each Eurodollar Loan made to it from the date of the
Borrowing thereof until the earlier of (i) the maturity thereof (whether by
acceleration or otherwise) of such Eurodollar Loan and (ii) the conversion of
such Eurodollar Loan to a Base Rate Loan pursuant to Section 1.06, 1.09 or
1.10(b), as applicable, at a rate per annum which shall, during each Interest
Period applicable thereto, be equal to the sum of the Applicable Margin plus the
Quoted Rate for such Interest Period.
(c) Overdue principal and, to the extent permitted by law,
overdue interest in respect of each Loan and any other overdue amount payable
hereunder shall, in each case, bear interest at a rate per annum equal to the
rate which is 2.0% in excess of the rate borne by such Loans; provided, however,
with respect to Eurodollar Loans at the end of the then applicable Interest
Period, the rate shall be a rate per annum equal to 2.0% per annum in excess of
the rate otherwise applicable to Base Rate Loans from time to time. Interest
which accrues under this Section 1.08(c) shall be payable on demand.
(d) Accrued (and therefore unpaid) interest shall be payable
(i) in respect of each Base Rate Loan, quarterly in arrears on each Quarterly
Payment Day, (ii) in respect of each Eurodollar Loan on (x) the date of any
prepayment or repayment thereof (on the amount prepaid or repaid), (y) the date
of any conversion into a Base Rate Loan pursuant to Section 1.06, 1.09 or
1.10(b), as applicable (on the amount converted) and (z) on the last day of each
Interest Period applicable thereto and, in the case of an Interest Period in
excess of three months, on each date occurring at three month intervals after
the first day of such Interest Period and (iii) in respect of each Loan, at
maturity (whether by acceleration or otherwise) and, after such maturity, on
demand.
(e) Upon each Interest Determination Date, the Administrative
Agent shall determine the Quoted Rate for the Interest Period applicable to
Eurodollar Loans and shall promptly notify the Borrower and the Banks thereof.
Each such determination shall, absent manifest error, be final and conclusive
and binding on all parties hereto.
(f) All computations of interest hereunder shall be made in
accordance with Section 13.07(b).
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1.09 Interest Periods. At the time it gives any Notice of
Borrowing or Notice of Conversion in respect of the making of, or conversion
into, a Eurodollar Loan (in the case of the initial Interest Period applicable
thereto) or prior to 11:00 a.m. (New York time) on the third Business Day prior
to the expiration of an Interest Period applicable to such Eurodollar Loan (in
the case of any subsequent Interest Period), the Borrower shall have the right
to elect, by giving the Administrative Agent notice thereof, the interest period
(each an "Interest Period") applicable to such Eurodollar Loan, which Interest
Period shall, at the option of such Borrower, be a one, two, three or six month
period; provided that:
(i) all Eurodollar Loans comprising a single Borrowing shall
at all times have the same Interest Period;
(ii) the initial Interest Period for any Eurodollar Loan shall
commence on the date of Borrowing of such Loan (including the date of
any conversion thereto from a Borrowing of Base Rate Loans) and each
Interest Period occurring thereafter in respect of such Loan shall
commence on the day on which the next preceding Interest Period
applicable thereto expires;
(iii) if any Interest Period relating to a Eurodollar Loan
begins on a day for which there is no numerically corresponding day in
the calendar month at the end of such Interest Period, such Interest
Period shall end on the last Business Day of such calendar month;
(iv) if any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day; provided, however, that if any Interest
Period for a Eurodollar Loan would otherwise expire on a day which is
not a Business Day but is a day of the month after which no further
Business Day occurs in such month, such Interest Period shall expire on
the next preceding Business Day;
(v) no Interest Period for a Borrowing shall be selected which
extends beyond the Maturity Date;
(vi) no Interest Period may be selected at any time when any
Default or Event of Default is then in existence;
(vii) no Interest Period in respect of any Borrowing of the
Loans shall be selected which extends beyond any date upon which a
mandatory repayment of such Loans will be required to be made under
Section 3.02(A)(c) if, after giving effect to the selection of such
Interest Period, the aggregate principal amount of such Loans
maintained as Eurodollar Loans which have Interest Periods expiring
after such date will be in excess of the aggregate principal amount of
such Loans then outstanding less the aggregate amount of such required
prepayment; and
(viii) no Interest Period may be selected prior to the ▇▇▇▇▇-
cation Termination Date.
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If upon the expiration of any Interest Period applicable to a
Borrowing of Eurodollar Loans the Borrower has failed to elect a new Interest
Period to be applicable to such Eurodollar Loans as provided above or a Default
or Event of Default then exists, the Borrower shall be deemed to have elected to
convert such Eurodollar Loans into Base Rate Loans effective as of the
expiration date of such current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event that
any Bank shall have determined (which determination shall, absent manifest
error, be final and conclusive and binding upon all parties hereto but, with
respect to clause (i) below, may be made only by the Administrative Agent):
(i) on any Interest Determination Date that, by reason of any
changes arising after the date of this Agreement affecting the
interbank Eurodollar market, adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided for in
the definition of Quoted Rate; or
(ii) at any time, that such Bank shall incur increased costs
or reductions in the amounts received or receivable hereunder with
respect to any Eurodollar Loan because of (x) any change since the date
of this Agreement in any applicable law or governmental rule,
regulation, order, guideline or request (whether or not having the
force of law) or in the interpretation or administration thereof and
including the introduction of any new law or governmental rule,
regulation, order, guideline or request, such as, for example, but not
limited to: (A) a change in the basis of taxation of payments to any
Bank of the principal of or interest on the Notes or any other amounts
payable hereunder (except for changes in the rate of tax on, or
determined by reference to, the net income or profits of such Bank
imposed by the jurisdiction in which its principal office or applicable
lending office is located) or (B) a change in official reserve
requirements (but, in all events, excluding reserves required under
Regulation D to the extent included in the computation of the Quoted
Rate) and/or (y) other circumstances since the date of this Agreement
affecting such Bank or the interbank Eurodollar market or the position
of such Bank in such market; or
(iii) at any time, that the making or continuance of any
Eurodollar Loan has been made (x) unlawful by any law or governmental
rule, regulation or order, (y) impossible by compliance by any Bank in
good faith with any governmental request (whether or not having the
force of law) or (z) impracticable as a result of a contingency
occurring after the date of this Agreement which materially and
adversely affects the interbank Eurodollar market;
then, and in any such event, such Bank (or the Administrative Agent, in the case
of clause (i) above) shall promptly give notice (if by telephone, promptly
confirmed in writing) to the Borrower, and, except in the case of clause (i)
above, to the Administrative Agent of such determination (which notice the
Administrative Agent shall promptly transmit to each of the other Banks).
Thereafter (x) in the case of clause (i) above, Eurodollar Loans shall no longer
be available until such time as the Administrative Agent notifies the Borrower
and the Banks that the circumstances giving rise to such notice by the
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Administrative Agent no longer exist, and any Notice of Borrowing or Notice of
Conversion given by the Borrower with respect to Eurodollar Loans which have not
yet been incurred (including by way of conversion) shall be deemed rescinded by
the Borrower, (y) in the case of clause (ii) above, the Borrower shall pay to
such Bank, upon receipt of written demand therefor, such additional amounts (in
the form of an increased rate of, or a different method of calculating, interest
or otherwise as such Bank in its sole discretion shall determine) as shall be
required to compensate such Bank for such increased costs or reductions in
amounts received or receivable hereunder (a written notice as to the additional
amounts owed to such Bank, showing in reasonable detail the basis for the
calculation thereof, submitted to the Borrower by such Bank shall, absent
manifest error, be final and conclusive and binding on all the parties hereto)
and (z) in the case of clause (iii) above, the Borrower shall take one of the
actions specified in Section 1.10(b) as promptly as possible and, in any event,
within the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected by the circumstances described in
Section 1.10(a)(iii) shall) either (i) if the affected Eurodollar Loan is then
being made initially or pursuant to a conversion, by giving the Administrative
Agent telephonic notice (confirmed in writing) on the same date that such
Borrower was notified by the affected Bank or the Administrative Agent pursuant
to Section 1.10(a)(ii) or (iii), cancel the respective Borrowing or conversion,
or (ii) if the affected Eurodollar Loan is then outstanding, upon at least three
Business Days' written notice to the Administrative Agent, require the affected
Bank to convert such Eurodollar Loan into a Base Rate Loan; provided that if
more than one Bank is affected at any time, then all affected Banks must be
treated the same pursuant to this Section 1.10(b).
(c) If any Bank shall have determined that after the date
hereof, the adoption or effectiveness of any applicable law, rule or regulation
regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by such Bank or any corporation controlling such Bank
with any request or directive regarding capital adequacy (whether or not having
the force of law) of any such authority, central bank or comparable agency, has
or would have the effect of reducing the rate of return on such Bank's or such
other corporation's capital or assets as a consequence of such Bank's Commitment
or Commitments hereunder or its obligations hereunder to a level below that
which such Bank or such other corporation could have achieved but for such
adoption, effectiveness, change or compliance (taking into consideration such
Bank's or such other corporation's policies with respect to capital adequacy),
then from time to time, upon written demand by such Bank (with a copy to the
Administrative Agent), accompanied by the notice referred to in the last
sentence of this clause (c), the Borrower shall pay to such Bank such additional
amount or amounts as will compensate such Bank or such other corporation for
such reduction. In determining such additional amounts, each Bank will act
reasonably and in good faith and will use reasonable averaging and attribution
methods. Each Bank, upon determining that any additional amounts will be payable
pursuant to this Section 1.10(c), will give prompt written notice thereof to the
Borrower (a copy of which shall be sent by such Bank to the Administrative
Agent), which notice shall set forth the basis of the calculation of such
additional amounts, although the failure to give any such notice shall not
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release or diminish the Borrower's obligations to pay additional amounts
pursuant to this Section 1.10(c) upon the subsequent receipt of such notice. A
Bank's reasonable good faith determination of compensation owing under this
Section 1.10(c) shall, absent manifest error, be final and conclusive and
binding on all the parties hereto.
(d) The Borrower shall not be under any obligation to
compensate any Bank under Section 1.10(a)(ii) or (c) with respect to increased
costs or reductions with respect to any period prior to the date that is 90 days
prior to the date on which such Bank knew of the increased costs or reductions.
1.11 Compensation. The Borrower shall compensate each Bank,
upon its written request (which request shall set forth in reasonable detail the
basis for requesting such compensation), for all losses, expenses and
liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other funds
required by such Bank to fund its Eurodollar Loans) which such Bank may sustain:
(i) if for any reason (other than a default by such Bank or the Administrative
Agent) a Borrowing of, or conversion from or into, Eurodollar Loans does not
occur on a date specified therefor in a Notice of Borrowing or Notice of
Conversion (whether or not withdrawn by such Borrower or deemed withdrawn
pursuant to Section 1.10(a)); (ii) if any repayment (including any repayment
made pursuant to Section 4.02 or as a result of an acceleration of the Loans
pursuant to Section 10 or as a result of the replacement of a Bank pursuant to
Section 1.12 or 13.12(b)) or conversion of any of its Eurodollar Loans occurs on
a date which is not the last day of an Interest Period with respect thereto;
(iii) if any prepayment of any of its Eurodollar Loans is not made on any date
specified in a notice of prepayment given by such Borrower; or (iv) as a
consequence of (x) any other default by such Borrower to repay its Loans when
required by the terms of this Agreement or any Note held by such Bank or (y) any
election made pursuant to Section 1.10(b). A Bank's basis for requesting
compensation pursuant to this Section, and a Bank's calculations of the amount
thereof, shall, absent manifest error, be final and conclusive and binding on
all the parties hereto.
1.12 Replacement of Banks. (x) If any Bank becomes a
Defaulting Bank or otherwise defaults in its obligations to make Loans, (y) if
any Bank (other than the Administrative Agent) refuses to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Banks as provided in Section
13.12(b) or (z) upon the occurrence of any event giving rise to the operation of
Section 1.10(a)(ii) or (iii), Section 1.10(c) or Section 3.04 with respect to
any Bank (other than the Agent) which results in such Bank charging to the
Borrower increased costs in an amount materially in excess of those being
charged by the other Banks, then the Borrower shall have the right, if no
Default or Event of Default then exists, to replace such Bank (the "Replaced
Bank") with any other Bank or with one or more Eligible Transferee or
Transferees, none of whom shall constitute a Defaulting Bank or shall be in
default in its obligations to make Loans at the time of such replacement
(collectively, the "Replacement Banks") reasonably acceptable to the
Administrative Agent, provided that:
(i) at the time of any replacement pursuant to this Section
1.12, the Replacement Bank shall enter into one or more assignment
agreements pursuant to Section 13.04(b) (and with all fees payable
pursuant to said Section 13.04(b) to be paid by the Replacement Bank)
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pursuant to which the Replacement Bank shall acquire all of the
Commitments and outstanding Loans of the Replaced Bank and in
connection therewith, shall pay to (x) the Replaced Bank in respect
thereof an amount equal to the sum of (A) an amount equal to the
principal of, and all accrued interest on, all outstanding Loans and
(B) an amount equal to all accrued, but therefore unpaid, Fees owing to
the Replaced Bank pursuant to Section 2.01 hereof; and
(ii) all obligations of the Borrower owing to the Replaced
Bank (other than those specifically described in clause (i) above in
respect of which the assignment purchase price has been, or is
concurrently being, paid) shall be paid in full by the Borrower to such
Replaced Bank concurrently with such replacement.
Upon the execution of the respective assignment documentation, the payment of
amounts referred to in clauses (i) and (ii) above, recordation of the assignment
on the Register by the Administrative Agent pursuant to Section 7.16 and, if so
requested by the Replacement Bank, delivery to the Replacement Bank of the
appropriate Notes executed by the Borrower, the Replacement Bank shall become a
Bank hereunder and the Replaced Bank shall cease to constitute a Bank hereunder
with respect to the Loans and Commitments so transferred, except with respect to
indemnification provisions under this Agreement, which shall survive as to such
Replaced Bank.
1.13 Change of Lending Office. Each Bank agrees that, upon the
occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or
(iii), 1.10(c) or 3.04 with respect to such Bank, it will, if requested by the
Borrower, use reasonable efforts (subject to overall policy considerations of
such Bank) to designate another lending office for any Loans affected by such
event; provided, that such designation is made on such terms that, in the sole
judgment of such Bank, such Bank and its lending office suffer no economic,
legal or regulatory disadvantage, with the object of avoiding the consequences
of the event giving rise to the operation of any such Section. Nothing in this
Section 1.13 shall affect or postpone any of the obligations of the Borrower or
the right of any Bank provided in Section 1.10 or 3.04.
Section 2. Fees; Reductions of Commitment.
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2.01 Fees. (a) The Borrower agrees to pay to the
Administrative Agent for distribution to each Bank with a Commitment a
commitment commission (the "Commitment Commission") for the period from and
including the date of this Agreement to and excluding the Conversion Date (or
such earlier date as the Total Commitment shall have been terminated) computed
at a rate for each day equal to the Applicable Commitment Commission Percentage
per annum on the daily Unutilized Commitment of such Bank. Accrued Commitment
Commission shall be due and payable quarterly in arrears on each Quarterly
Payment Date and on the Conversion Date (or such earlier date upon which the
Total Commitment is terminated).
(b) The Borrower shall pay to the Administrative Agent when
and as due, for its own account, such fees as may be agreed to in writing from
time to time between the Borrower and the Administrative Agent.
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(c) All computations of Fees shall be made in accordance with
Section 13.07(b).
2.02 Voluntary Termination of Unutilized Commitments. (a) Upon
at least five Business Days' prior written notice (or telephonic notice promptly
confirmed in writing) to the Administrative Agent at its Notice Office (which
notice the Administrative Agent shall promptly transmit to each of the Banks),
the Borrower shall have the right, without premium or penalty, to terminate the
Total Unutilized Commitment in whole or in part; provided that (i) each such
reduction shall apply proportionately to reduce the Commitment of each Bank and
(ii) any partial reduction pursuant to this Section 2.02 shall be in an
aggregate principal amount of at least the applicable Minimum Borrowing Amount
and, if greater, in integral multiples of at least $1 million.
(b) In the event of certain refusals by a Bank to consent to
certain proposed changes, waivers, discharges or terminations with respect to
this Agreement which have been approved by the Required Banks as provided in
Section 13.12(b), the Borrower shall have the right, upon five Business Days'
prior written notice to the Administrative Agent at its Notice Office (which
notice the Administrative Agent shall promptly transmit to each of the Banks),
to terminate all of the Commitment of such Bank, so long as all Loans, together
with accrued and unpaid interest, Fees and all other amounts, owing to such Bank
are repaid concurrently with the effectiveness of such termination pursuant to
Section 3.01(b) and at such time, unless the respective Bank continues to act as
a Bank with respect to any Loans or has a Commitment hereunder, such Bank shall
no longer constitute a "Bank" for purposes of this Agreement, except with
respect to indemnifications and similar provisions under this Agreement, which
shall survive as to such repaid Bank.
2.03 Mandatory Reduction of Commitments. (a) In addition to
any other mandatory commitment reductions pursuant to this Section 2.03, the
Total Commitment (and the Commitment of each Bank) shall (i) terminate in its
entirety on the Conversion Date (after giving effect to the making of Loans on
such date), and (ii) prior to the termination of the Total Commitment as
provided in clause (i) above, be reduced from time to time to the extent
required by Section 3.02.
(b) In addition to any other mandatory commitment reductions
pursuant to this Section 2.03, after the Conversion Date the Total Commitment
(and the Commitment of each Bank) shall be reduced at the time any payment is
required to be made on the principal amount of the Loans (or would be required
to be made of the Loans then outstanding) pursuant to Section 3.02(B)(a), by an
amount equal to the maximum amount of the Loans that would be required to be
repaid pursuant to Section 3.02(B)(a), assuming the Loans were outstanding in an
aggregate principal amount equal to the Total Commitment.
10
Section 3. Prepayments; Payments; Taxes.
----------------------------
3.01 Voluntary Prepayments. (a) The Borrower shall have the
right to prepay Loans, without premium or penalty, in whole or in part from time
to time on the following terms and conditions:
(i) the Borrower shall give the Administrative Agent prior to
11:00 a.m. (New York time) at its Notice Office at least five Business
Days' prior written notice in the case of Eurodollar Loans and one
Business Day's prior written notice in the case of Base Rate Loans of
its intent to prepay the Loans, the amount of such prepayment and the
Types of Loans to be prepaid and, in the case of Eurodollar Loans, the
specific Borrowing or Borrowings pursuant to which made, which notice
the Administrative Agent shall promptly transmit to each of the Banks;
(ii) each prepayment shall be in an aggregate principal amount
of at least $250,000 and, if greater, in integral multiples of $10,000;
provided that no partial prepayment of Eurodollar Loans made pursuant
to any Borrowing shall reduce the outstanding Loans made pursuant to
such Borrowing to an amount less than the Minimum Borrowing Amount;
(iii) no prepayments of Eurodollar Loans made pursuant to this
Section 3.01 may be made on a day other than the last day of an
Interest Period applicable thereto; and
(iv) each prepayment in respect of any Loans made pursuant to
a Borrowing shall be applied pro rata among such Loans.
(v) each prepayment of Loans after the Conversion Date
pursuant to this Section 3.01 shall be applied to reduce the then
remaining Scheduled Repayments in inverse order of maturity.
(b) In the event of certain refusals by a Bank to consent to
certain proposed changes, waivers, discharges or terminations with respect to
this Agreement which have been approved by the Required Banks as provided in
Section 13.12(b), the Borrower shall have the right, upon five Business Days'
prior written notice to the Administrative Agent at its Notice Office (which
notice the Administrative Agent shall promptly transmit to each of the Banks) to
repay all Loans, together with accrued and unpaid interest, Fees and all other
amounts owing to such Bank in accordance with said Section 13.12(b) so long as
(A) in the case of the repayment of the Loans of any Bank with a Commitment
pursuant to this clause (b) the Commitment of such Bank is terminated
concurrently with such repayment pursuant to Section 3.02 (at which time
Schedule I shall be deemed modified to reflect the changed Commitments), and (B)
in the case of the repayment of the Loans of any Bank the consents required by
Section 13.12(b) in connection with the repayment pursuant to this clause (b)
shall have been obtained.
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3.02 Mandatory Repayments and Commitment Reductions.
----------------------------------------------
(A) Requirements:
(a) On any day on or prior to the Conversion Date on which the
aggregate outstanding principal amount of Loans exceeds the Total Commitment,
the Borrower shall repay the principal of Loans in the amount equal to such
excess.
(b) Prior to the Conversion Date, if any Borrowing Base
Certificate shall disclose the existence of a Borrowing Base Deficiency, the
Borrower shall, on the date of the delivery of the Borrowing Base Certificate in
accordance with Section 7.01(k), repay the principal of the Loans outstanding in
an aggregate amount equal to the remaining Borrowing Base Deficiency.
(c) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 3.02(A), the Borrower shall be
required to repay on each date set forth below the principal amount of the
Loans, to the extent then outstanding, equal to (i) the aggregate principal
amount of Loans outstanding on the Conversion Date (after giving effect to any
Loans made on such date) multiplied by (ii) the percentage set forth below
opposite such date (each such repayment as the same may be reduced as provided
in Sections 3.01 and 3.02(B), a "Scheduled Repayment" and, collectively referred
to as the "Scheduled Repayments"):
Scheduled Repayment Dates Percentage
------------------------------------
Each Quarterly Payment Date occurring
during the 12 month period commencing
on January 1, 2002 2.00%
Each Quarterly Payment Date occurring
during the 12 month period commencing
on January 1, 2003 2.50%
Each Quarterly Payment Date occurring
during the 12 month period commencing
on January 1, 2004 5.50%
Each Quarterly Payment Date occurring
during the 12 month period commencing
on January 1, 2005 6.75%
Each Quarterly Payment Date occurring
during the 12 month period commencing
on January 1, 2006 8.25%
(d) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 3.02, on the date of the receipt
thereof by Holdings or any of its Subsidiaries, an amount equal to:
(i) 100% of the cash proceeds (net of underwriting discounts
and commissions and all other reasonable costs associated with such
transaction) from any sale or issuance on or after the Effective Date of
equity of Holdings or any Subsidiary of Holdings (other than
Residentclub) and from any contribution to capital of Holdings or any of
its Subsidiaries; and
12
(ii) 100% of the cash proceeds (net of underwriting discounts
and commissions, loan fees and all other reasonable costs associated with
such transaction) from any incurrence of any Indebtedness by Holdings or
any Subsidiary of Holdings (other than Indebtedness permitted by Section
8.05 as said Section is in effect on the Effective Date),
shall be applied as provided in Section 3.02(B).
(e) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 3.02, no later than 90 days after
the last day of each fiscal year of Holdings ending after the Conversion Date,
an amount equal to 75% of Excess Cash Flow of Holdings and its Subsidiaries
(other than Residentclub) for the relevant Excess Cash Flow Payment Period shall
be applied as provided in Section 3.02(B).
(f) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 3.02, on each date on or after
the Effective Date on which Holdings or any Subsidiary of Holdings (other than
Residentclub) receives cash proceeds from any sale of assets or other
dispositions (including capital stock and partnership interests (including,
without limitation, the sale of stock of Residentclub by Holdings or any
Subsidiary of Holdings (other than Residentclub) that holds such stock) and
securities other than capital stock and partnership interests the proceeds from
the sale of which is recaptured under Section 3.02(A)(d), and including payments
on any outstanding notes held by Holdings or any of its Subsidiaries but
excluding (1) sales of inventory in the ordinary course of business and (2) the
sale of assets so long as the aggregate amount of Net Sale Proceeds excluded
pursuant to this clause (2) does not exceed $500,000 in the aggregate for all
such asset sales in any fiscal year of the Borrower), an amount equal to 100% of
the Net Sale Proceeds thereof shall be applied as provided in Section 3.02(B).
(g) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 3.02, on each date on or after
the Effective Date of the receipt thereof by Holdings or any Subsidiary of
Holdings (other than Residentclub), an amount equal to 100% of the cash proceeds
of any Recovery Event (net of reasonable costs incurred in connection with such
Recovery Event (including the estimated marginal increase in income taxes which
will be payable as a result of such Recovery Event by Holdings or any Subsidiary
of Holdings)) shall be applied as provided in Section 3.02(B); provided that
such proceeds not in excess of $500,000 in the aggregate for all Recovery Events
occurring during one fiscal year of Holdings shall not be required to be so
applied on such date to the extent that Holdings delivers a certificate to the
Administrative Agent on or prior to such date stating that such proceeds shall
be used to replace or restore any properties or assets in respect of which such
proceeds were paid within a period specified in such certificate not to exceed
180 days after the date of receipt of such proceeds (which certificate shall set
forth estimates of the proceeds to be so expended); and provided further, that
if all or any portion of such proceeds not so applied pursuant to Section
3.02(B) are not so used within the period specified in the proviso, such
remaining portion shall be applied on the last day of such specified period as
provided in Section 3.02(B).
13
(h) Notwithstanding anything to the contrary contained
elsewhere in this Agreement, all then outstanding Loans shall be repaid in full
on the Maturity Date.
(B) Application:
(a) Each mandatory repayment of Loans pursuant to Section
3.02(A)(d) through (g), inclusive, shall be applied (except as described in
clause (c) below):
(i) first, to prepay the principal of outstanding Loans (with
a corresponding reduction to the Total Commitment), with the total
amount to be applied as a mandatory repayment of Loans pursuant to this
Section 3.02(B); to be applied to reduce the then remaining Scheduled
Repayments on a pro rata basis, based upon the remaining amount of each
such Scheduled Repayment after giving effect to all prior reductions
thereto;
(ii) second, to reduce the Total Commitment (it being
understood and agreed that the amount of such reduction shall be deemed
to be an application of proceeds for purposes of this Section
3.02(B)(a)(ii) even though cash is not actually applied).
(b) With respect to each repayment of Loans required by this
Section 3.02, the Borrower may designate the Types of Loans which are to be
repaid and, in the case of Eurodollar Loans, the specific Borrowing or
Borrowings pursuant to which made; provided that: (i) repayments of Eurodollar
Loans pursuant to this Section 3.02 may only be made on the last day of an
Interest Period applicable thereto unless all Eurodollar Loans with Interest
Periods ending on such date of required repayment and all Base Rate Loans have
been paid in full; (ii) if any repayment of Eurodollar Loans made pursuant to a
single Borrowing shall reduce the outstanding Eurodollar Loans made pursuant to
such Borrowing to an amount less than $1,000,000, such Borrowing shall
immediately be converted into Base Rate Loans; and (iii) each repayment of any
Loans made pursuant to a single Borrowing shall be applied pro rata among such
Loans. In the absence of a designation by the Borrower as described in the
preceding sentence, the Administrative Agent shall, subject to the above, make
such designation in its sole discretion. Notwithstanding the foregoing
provisions of this Section 3.02(B), if at any time the mandatory prepayment of
Loans pursuant to Section 3.02(A) above would result, after giving effect to the
procedures set forth above, in the Borrower incurring breakage costs under
Section 1.11 as a result of Eurodollar Loans being prepaid other than on the
last day of an Interest Period applicable thereto (the "Affected Eurodollar
Loans"), then the Borrower may in its sole discretion initially deposit a
portion (up to 100%) of the amounts that otherwise would have been paid in
respect of the Affected Eurodollar Loans with the Administrative Agent (which
deposit must be equal in amount to the amount of Affected Eurodollar Loans not
immediately prepaid) to be held as security for the obligations of the Borrower
hereunder pursuant to a cash collateral arrangement satisfactory to the
Administrative Agent and the Borrower and shall provide for investments
satisfactory to the Administrative Agent and the Borrower, with such cash
collateral to be directly applied upon the first occurrence (or occurrences)
thereafter of the last day of an Interest Period applicable to the relevant
Loans that are Eurodollar Loans (or such earlier date or dates as shall be
requested by the Borrower), to repay an aggregate principal amount of such Loans
equal to the Affected Eurodollar Loans not initially prepaid pursuant to this
sentence. Notwithstanding anything to the contrary contained in the immediately
14
preceding sentence, all amounts deposited as cash collateral pursuant to the
immediately preceding sentence shall be held for the sole benefit of the Banks
whose Loans would otherwise have been immediately prepaid with the amounts
deposited and upon the taking of any action by the Administrative Agent or by
the Banks pursuant to the remedial provisions of Section 9, any amounts held as
cash collateral pursuant to this Section 3.02(B) shall, subject to the
requirements of applicable law, be immediately applied to the Loans.
(c) Proceeds from the exercise of warrants and options
outstanding on the Effective Date which are exercised prior to the Conversion
Date shall be used to repay Loans but there shall not be a corresponding
reduction to the Commitment.
3.03 Method and Place of Payment. Except as otherwise
specifically provided herein, all payments under this Agreement or any Note
shall be made to the Administrative Agent for the account of the Bank or Banks
entitled thereto not later than 12:00 Noon (New York time) on the date when due
and shall be made in Dollars in immediately available funds at the Payment
Office of the Administrative Agent. Whenever any payment to be made hereunder or
under any Note shall be stated to be due on a day which is not a Business Day,
the due date thereof shall be extended to the next succeeding Business Day and,
with respect to payments of principal, interest shall be payable at the
applicable rate during such extension.
3.04 Net Payments. (a) All payments made by the Borrower
hereunder, or by the Borrower under any Note, will be made without setoff,
counterclaim or other defense. Except as provided in Section 3.04(b), all such
payments will be made free and clear of, and without deduction or withholding
for, any present or future taxes, levies, imposts, duties, fees, assessments or
other charges of whatever nature now or hereafter imposed by any jurisdiction or
by any political subdivision or taxing authority thereof or therein with respect
to such payments (but excluding, except as provided in the second succeeding
sentence, any tax imposed on or measured by the net income of a Bank pursuant to
the laws of the jurisdiction or any political subdivision or taxing authority
thereof or therein in which it is organized or in which the principal office or
applicable lending office of such Bank is located) and all interest, penalties
or similar liabilities with respect thereto (collectively, "Taxes"). If any
Taxes are so levied or imposed, the Borrower agrees to pay the full amount of
such Taxes, and such additional amounts as may be necessary so that every
payment of all amounts due hereunder or under any Note, after withholding or
deduction for or on account of any Taxes, will not be less than the amount
provided for herein or in such Note. If any amounts are payable in respect of
Taxes pursuant to the preceding sentence, then the Borrower shall be obligated
to reimburse each Bank, upon the written request of such Bank, for taxes imposed
on or measured by the net income of such Bank pursuant to the laws of the
jurisdiction or any political subdivision or taxing authority thereof or therein
in which such Bank is organized or in which the principal office or applicable
lending office of such Bank is located and/or any withholding of taxes as such
Bank shall determine are payable by or withheld from such Bank in respect of
such amounts so paid to or on behalf of such Bank pursuant to the preceding
sentence and in respect of any amounts paid to or on behalf of such Bank
pursuant to this sentence. The Borrower will furnish to the Administrative Agent
within 45 days after the date of the payment of any Taxes due pursuant to
applicable law certified copies of tax receipts evidencing such payment by such
Borrower. The Borrower agrees to indemnify and hold harmless each Bank, and
15
reimburse such Bank upon its written request, for the amount of any Taxes so
levied or imposed and paid by such Bank.
(b) Each Bank that is not a United States person (as such term
is defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax
purposes agrees to deliver to the Borrower and the Administrative Agent on or
prior to the Initial Borrowing Date, or in the case of a Bank that is an
assignee or transferee of an interest under this Agreement pursuant to Section
13.04 (unless the respective Bank was already a Bank hereunder immediately prior
to such assignment or transfer), on the date of such assignment or transfer to
such Bank, (i) two accurate and complete original signed copies of Internal
Revenue Service Form W-8ECI or Form W-8BEN (with respect to a complete exemption
under an income tax treaty) (or successor forms) certifying to such Bank's
entitlement as of such date to a complete exemption from United States
withholding tax with respect to payments to be made under this Agreement and
under any Note, or (ii) if the Bank is not a "bank" within the meaning of
Section 881(c)(3)(A) of the Code and cannot deliver either Internal Revenue
Service Form W-8ECI or Form W-8BEN (with respect to a complete exemption under
an income tax treaty) pursuant to clause (i) above, (x) a certificate
substantially in the form of Exhibit C (any such certificate, a "Section
3.04(b)(ii) Certificate") and (y) two accurate and complete original signed
copies of Internal Revenue Service Form W-8BEN (with respect to the portfolio
interest exemption) (or successor form) certifying to such Bank's entitlement to
a complete exemption from United States withholding tax with respect to payments
of interest to be made under this Agreement and under any Note. In addition,
each Bank agrees that from time to time after the Initial Borrowing Date, when a
lapse in time or change in circumstances renders the previous certification
obsolete or inaccurate in any material respect, it will deliver to the Borrower
and the Administrative Agent two new accurate and complete original signed
copies of Internal Revenue Service Form W-8ECI, Form W-8BEN (with respect to the
benefits of any income tax treaty), or Form W-8BEN (with respect to the
portfolio interest exemption and a Section 3.04(b)(ii) Certificate, as the case
may be, and such other forms as may be required in order to confirm or establish
the entitlement of such Bank to a continued exemption from or reduction in
United States withholding tax with respect to payments under this Agreement and
any Note, or it shall immediately notify the Borrower and the Administrative
Agent of its inability to deliver any such Form or Certificate, in which case
such Bank shall not be required to deliver any such Form or Certificate pursuant
to this Section 3.04(b). Notwithstanding anything to the contrary contained in
Section 3.04(a), but subject to the immediately succeeding sentence, (x) the
Borrower shall be entitled, to the extent it is required to do so by law, to
deduct or withhold income or similar taxes imposed by the United States (or any
political subdivision or taxing authority thereof or therein) from interest,
fees or other amounts payable hereunder for the account of any Bank which is not
a United States person (as such term is defined in Section 7701(a)(30) of the
Code) for U.S. Federal income tax purposes to the extent that such Bank has not
provided to the Borrower U.S. Internal Revenue Service Forms that establish a
complete exemption from such deduction or withholding and (y) the Borrower shall
not be obligated pursuant to Section 3.04(a) hereof to gross-up payments to be
made to a Bank in respect of income or similar taxes imposed by the United
States if (I) such Bank has not provided to the Borrower the Internal Revenue
Service Forms required to be provided to the Borrower pursuant to this Section
3.04(b) or (II) in the case of a payment, other than interest, to a Bank
described in clause (ii) above, to the extent that such Forms do not establish a
16
complete exemption from withholding of such taxes. Notwithstanding anything to
the contrary contained in the preceding sentence or elsewhere in this Section
3.04, the Borrower agrees to pay any additional amounts and to indemnify each
Bank in the manner set forth in Section 3.04(a) (without regard to the identity
of the jurisdiction requiring the deduction or withholding) in respect of any
Taxes deducted or withheld by it as described in the immediately preceding
sentence as a result of any changes that are effective after the Effective Date
in any applicable law, treaty, governmental rule, regulation, guideline or
order, or in the interpretation thereof, relating to the deducting or
withholding of such Taxes.
Section 4. Conditions Precedent to Loans on the Initial
Borrowing Date. The obligation of each Bank to make Loans on the Initial
Borrowing Date is subject at the time of such Loan to the satisfaction of the
following conditions:
4.01 Execution of Agreement; Notes. On or prior to the Initial
Borrowing Date (i) the Effective Date shall have occurred and (ii) there shall
have been delivered to the Administrative Agent for the account of each of the
Banks the appropriate Note executed by the Borrower, in each case in the amount,
maturity and as otherwise provided herein.
4.02 Officer's Certificate. On the Initial Borrowing Date, the
Agents shall have received a certificate dated the Initial Borrowing Date signed
on behalf of the Borrower by the Chief Executive Officer, President or Chief
Financial Officer or any Vice President of the Borrower stating that all of the
conditions in Sections 4.10, 4.11, 4.14, 4.16, 5.01, 5.02, 5.03 and 5.04 have
been satisfied on such date; provided the certificate shall not be required to
certify as to the acceptability of any items to the Agents and/or the Banks or
as to whether the Agents and/or the Banks are satisfied with any of the matters
described in said Sections.
4.03 Opinions of Counsel. On the Initial Borrowing Date,
the Agents shall have received from: enkens & ▇▇▇▇▇▇▇▇▇, P.C., counsel to
Holdings and its Subsidiaries, an opinion addressed to the Agents, the
Collateral Agent and each of the Banks and dated the Initial Borrowing Date
covering the matters set forth in Exhibit D.
4.04 Corporate Documents; Proceedings. (a) On the Initial
Borrowing Date, the Agents shall have received a certificate, dated the Initial
Borrowing Date, signed by the Chief Executive Officer, President, Chief
Financial Officer, President or any Vice President of each Credit Party, and
attested to by the Secretary or any Assistant Secretary of such Credit Party, in
the form of Exhibit E with appropriate insertions, together with copies of the
Certificate of Incorporation and By-Laws of such Credit Party and the
resolutions or, consents or similar evidence of authority of such Credit Party
referred to in such certificate, and the foregoing shall be acceptable to the
Agents and the Required Banks in their sole discretion.
(b) All corporate and legal proceedings and all instruments
and agreements relating to the transactions contemplated by this Agreement and
the other Documents shall be satisfactory in form and substance to the Agents
and the Required Banks, and the Agents shall have received all information and
copies of all documents and papers, including records of corporate proceedings,
governmental approvals, good standing certificates and bring-down telegrams, if
17
any, which the Agents or the Required Banks may have requested in connection
therewith, such documents and papers where appropriate to be certified by proper
corporate or governmental authorities.
4.05 Plans; Shareholders' Agreements; Management Agreements;
Employment Agreements; Collective Bargaining Agreements; Debt Agreements;
Affiliate Contracts; Tax Sharing Agreements and Material Contracts. On or prior
to the Initial Borrowing Date, there shall have been delivered to the Banks true
and correct copies, certified as true and complete by an appropriate officer of
Holdings of:
(i) all Plans (and for each Plan that is required to file an
annual report on Internal Revenue Service Form 5500-series, a copy of the most
recent such report (including, to the extent required, the related financial and
actuarial statements and opinions and other supporting statements,
certifications, schedules and information), and for each Plan that is a
"single-employer plan," as defined in Section 4001(a)(15) of ERISA, the most
recently prepared actuarial valuation therefor) and any other "employee benefit
plans," as defined in Section 3(3) of ERISA, and any other material agreements,
plans or arrangements, with or for the benefit of current or former employees of
Holdings or any of its Subsidiaries or any ERISA Affiliate (provided that the
foregoing shall apply in the case of any multiemployer plan, as defined in
4001(a)(3) of ERISA, only to the extent that any document described therein is
in the possession of Holdings or any Subsidiary of Holdings or any ERISA
Affiliate or reasonably available thereto from the sponsor or trustee of any
such plan) (collectively, the "Employee Benefit Plans");
(ii) all agreements entered into by Holdings or any Subsidiary
of Holdings governing the terms and relative rights of its capital stock and any
agreements entered into by shareholders relating to any such entity with respect
to their capital stock (collectively, the "Shareholders' Agreements");
(iii) all agreements with members of, or with respect to the,
management of Holdings or any Subsidiary of Holdings other than Employment
Agreements (collectively, the "Management Agreements");
(iv) any employment agreements entered into by Holdings or any
Subsidiary of Holdings with an officer or director of the Borrower or any
Subsidiary of Holdings (collectively, the "Employment Agreements");
(v) all collective bargaining agreements applying or relat-
ing to any employee of Holdings or any Subsidiary of Holdings (collectively, the
"Collective Bargaining Agreements");
(vi) all agreements evidencing or relating to Indebtedness of
Holdings or any Subsidiary of Holdings whether or not such agreement is to
remain outstanding after giving effect to the incurrence of Loans on the Initial
Borrowing Date (collectively, the "Debt Agreements");
(vii) all tax sharing, tax allocation and other similar
agreements entered into by Holdings or any Subsidiary of Holdings (collectively,
the "Tax Sharing Agreements");
18
(viii) all contracts, agreements or understandings entered
into between Holdings or any of its Subsidiaries on the one hand, and any of its
Affiliates, on the other hand (collectively, the "Affiliate Contracts"); and
(ix) all material contracts and licenses of Holdings or any of
its Subsidiaries, that are to remain in effect after giving effect to the
consummation of the Transaction, including, without limitation, the Firstlink
Merger Documents (collectively, the "Material Contracts");
all of which Employee Benefit Plans, Shareholders' Agreements, Management
Agreements, Employment Agreements, Collective Bargaining Agreements, Debt
Agreements, Tax Sharing Agreements, Affiliate Contracts and Material Contracts
shall be in form and substance satisfactory to the Agents and the Required Banks
and shall be in full force and effect on the Initial Borrowing Date.
4.06 Pledge Agreement. On the Initial Borrowing Date, each
Credit Party shall have duly authorized, executed and delivered a Pledge
Agreement in the form of Exhibit F (as modified, supplemented or amended from
time to time, the "Pledge Agreement") and shall have delivered to the Collateral
Agent, as Pledgee thereunder, all of the Pledged Securities referred to therein
then owned by each such Credit Party (x) endorsed in blank in the case of
promissory notes constituting Pledged Securities and (y) together with executed
and undated irrevocable stock powers, in the case of capital stock constituting
Pledged Securities.
4.07 Security Agreement. On the Initial Borrowing Date, each
Credit Party shall have duly authorized, executed and delivered a Security
Agreement in the form of Exhibit G (as modified, supplemented or amended from
time to time, the "Security Agreement") covering all of such Credit Party's
present and future Security Agreement Collateral, together with:
(i) proper financing statements (Form UCC-1 or such other
financing statements or similar notices as shall be required by local law) fully
executed for filing under the UCC or other appropriate filing offices of each
jurisdiction as may be necessary or, in the opinion of the Collateral Agent,
desirable to perfect the security interests purported to be created by the
Security Agreement;
(ii) certified copies of Requests for Information or Copies
(Form UCC-11), or equivalent reports, listing all judgment liens, tax liens or
effective financing statements that name Holdings or any of its Subsidiaries, or
a division or other operating unit of any such Person, as debtor and that are
filed in the jurisdictions referred to in said clause (i), together with copies
of such other financing statements (none of which shall cover the Collateral
except to the extent evidencing Permitted Liens or for which the Collateral
Agent shall receive termination statements (Form UCC-3 or such other termination
statements as shall be required by local law) fully executed for filing);
(iii) evidence of the completion of all other recordings and
filings of, or with respect to, the Security Agreement as may be necessary or,
in the opinion of the Collateral Agent, desirable to perfect the security
interests intended to be created by such Security Agreement; and
19
(iv) evidence that all other actions necessary or, in the
opinion of the Collateral Agent, desirable to perfect and protect the security
interests purported to be created by the Security Agreement have been taken.
4.08 Subsidiaries Guaranty. On the Initial Borrowing Date,
each Subsidiary of Holdings (other than the Borrower and Residentclub) shall
have duly authorized, executed and delivered a Guaranty in the form of Exhibit H
(as modified, supplemented or amended from time to time, the "Subsidiaries
Guaranty").
4.09 Consent Letter. The Agents shall have received a letter
from CT Corporation System, presently located at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, substantially in the form of Exhibit I hereto, indicating its
consent to its appointment by Holdings and each other Credit Party as their
agent to receive service of process as specified in Section 12.08 of this
Agreement and Section 21 of the Subsidiaries Guaranty.
4.10 Material Adverse Change, etc. Since December 31, 1998,
nothing shall have occurred (and the Banks shall have become aware of no facts
or conditions not previously known) which the Agents or the Required Banks shall
reasonably determine (a) could reasonably be expected to have a material adverse
effect on the rights or remedies of the Banks or the Agents, or on the ability
of Holdings or any of its Subsidiaries to perform their obligations to the
Agents and the Banks under this Agreement or any other Credit Document, (b)
could reasonably be expected to have a materially adverse effect on the
performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of Holdings and its
Subsidiaries taken as a whole or (c) indicates the inaccuracy in any material
respect of the information previously provided to the Agents or the Banks (taken
as a whole) in connection with their analysis of the transactions contemplated
hereby or indicates that the information previously provided omitted to disclose
any material information.
4.11 Litigation. On the Initial Borrowing Date, no litigation
by any entity (private or governmental) shall be pending or threatened with
respect to this Agreement, any other Document or any documentation executed in
connection herewith or with respect to the transactions contemplated hereby, or
which the Agents or Required Banks shall determine could reasonably be expected
to have a materially adverse effect on the Transaction or on the performance,
business, assets, nature of assets, liabilities, operations, properties,
condition (financial or otherwise) or prospects of Holdings and its Subsidiaries
taken as a whole.
4.12 Fees, etc. On the Initial Borrowing Date, Holdings shall
have paid in full to the Agents and the Banks all costs, fees and expenses
(including, without limitation, all legal fees and expenses) payable to the
Agents and the Banks to the extent then due pursuant hereto or as otherwise
agreed between Holdings and the Agents.
4.13 Solvency Certificate; Insurance Analyses. On the Initial
Borrowing Date, the Borrower shall cause to be delivered to the Agents and the
Banks: (i) a certificate from the chief financial officer of Holdings, in the
form of Exhibit J hereto, supporting the conclusions after giving effect to the
Transaction and the incurrence of all financings contemplated herein that each
20
Credit Party, and all Credit Parties taken as a whole, as the case may be, are
not insolvent and will not be rendered insolvent by the Indebtedness incurred in
connection therewith, will not be left with unreasonably small capital with
which to engage in their respective businesses and will not have incurred debts
beyond their ability to pay such debts as they mature and become due and (ii)
evidence (including, without limitation, certificates with respect to each
insurance policy listed on Schedule II) of insurance, complying with the
requirements of Section 7.03, with respect to the business and properties of
Holdings and its Subsidiaries, in scope, form and substance satisfactory to the
Agents and the Required Banks and naming each of the Collateral Agent, the
Agents and the Banks as an additional insured and the Collateral Agent as loss
payee and stating that such insurance shall not be cancelled or revised without
30 days' prior written notice by the insurer to the Collateral Agent.
4.14 Approvals. All necessary governmental and third party
approvals in connection with the Transaction and the transactions contemplated
by the Documents and otherwise referred to herein or therein (including, but not
limited to, those approvals required in respect of existing permits, landlord
consents and transfers of contract rights) shall have been obtained and remain
in effect, and all applicable waiting periods shall have expired without any
action being taken by any competent authority which restrains, prevents or
imposes, in the sole judgment of the Agents or the Required Banks, adverse
conditions upon the consummation of the Transaction or the other transactions
contemplated by the Documents and otherwise referred to herein or therein.
Additionally, there shall not exist any judgment, order, injunction or other
restraint issued or filed or a hearing seeking injunction relief or other
restraint pending or notified prohibiting or imposing materially adverse
conditions upon the consummation of the Transaction or the making of the Loans.
4.15 Financial Statements; Projections; Management Letter
Reports. (a) On or prior to the Initial Borrowing Date, the Banks shall have
received:
(i) the consolidated balance sheet of U.S. Online
Communications, Inc. (or its successors) and Firstlink as at
December 31, 1997, December 31, 1998, and for the nine month
period ended September 30, 1999, and the related statements of
earnings and stockholders' equity and cash flows of such Person,
as applicable for the fiscal periods ended as of said dates,
which, in the case of the annual statements, have been examined
by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, an independent certified public
accountant, who delivered unqualified opinions in respect
thereto;
(ii) the consolidated balance sheet of U.S. Online
Communications, Inc. (or its successors) and Firstlink at March
31, 1999, June 30, 1999 and September 30, 1999 and the related
statements of operations, changes in partners' equity and cash
flows of U.S. Online Communications, Inc. (or its successors) and
Firstlink for each of the three-month periods ended as of March
31, 1999, June 30, 1999 and September 30, 1999; and
(iii) the pro forma (after giving effect to the Transaction
and the related financing thereof) consolidated balance sheet of
Holdings as at the Initial Borrowing Date, which financial
statements shall be prepared in accordance with generally
accepted accounting principles consistent with past practices and
21
shall be in form and substance satisfactory to the Agents and the
Required Banks, and shall not disclose any material adverse
differences in the business, properties, assets, liabilities,
results of operations, condition (financial or otherwise) or
prospects of Holdings and its Subsidiaries taken as a whole from
that previously disclosed to the Agents and the Required Banks.
(b) On the Initial Borrowing Date, the Banks shall have
received detailed consolidated financial projections, certified by the Chief
Financial Officer of Holdings, for Holdings and its Subsidiaries, which include
the projected results of the Borrower, after giving effect to the Transaction
and the other transactions contemplated herein, for the period commencing on the
Initial Borrowing Date and ending after the Maturity Date (the "Projections"),
which Projections, and the supporting assumptions and explanations thereto, and
the accounting practices and procedures to be utilized by Holdings following the
Initial Borrowing Date, shall be satisfactory in form and substance to the
Agents and the Required Banks.
(c) On or prior to the Initial Borrowing Date, the Agents
shall have received a copy of any "management letter" received by Holdings or
any of its Subsidiaries from its certified public accountants.
4.16 Refinancing. (a) On the Initial Borrowing Date and after
giving effect to the Loans incurred on the Initial Borrowing Date, the Firstlink
Merger and the other transactions contemplated hereby, neither Holdings nor any
of its Subsidiaries shall have any Indebtedness or preferred stock outstanding
except for the Loans, and up to $2,500,000 of Capitalized Lease Obligation and
the outstanding preferred stock of Holdings set forth on Schedule V.
(b) The Agents and the Required Banks shall be satisfied with
the amount of and the terms and conditions of the repayment of, and termination
of all commitments and documentation relating to, all Indebtedness repaid by
Holdings or its Subsidiaries, in connection with the transactions contemplated
hereby (collectively, the "Refinanced Indebtedness") and the amount of all
accrued interest, premiums, fees, commissions and expenses owing in connection
with the repayment of such Refinanced Indebtedness. In no event shall the
aggregate amount paid pursuant to the preceding sentence exceed $13,000,000. All
Liens arising in connection with such Refinanced Indebtedness shall have been
terminated (and all appropriate releases, termination statements or other
instruments of assignment with respect thereto shall have been obtained), in
each case to the satisfaction of the Agents and the Required Banks, and the
Banks shall have received opinions of counsel to such effect in form and
substance satisfactory to the Agents and the Required Banks.
(c) The Agents shall have received copies, certified as true
and complete by an appropriate officer of Holdings, of all documents executed in
connection with the repayment and termination of the Refinanced Indebtedness and
the release of the Liens thereunder (the "Debt Termination Documents") all of
which shall be in form and substance satisfactory to the Agents and the Required
Banks.
Section 5. Conditions Precedent to All Credit Events. The
obligation of each Bank to make Loans (including Loans made on the Initial
Borrowing Date) is subject, at the time of each such Loan (except as hereinafter
indicated), to the satisfaction of the following conditions:
22
5.01 No Default; Representations and Warranties. At the time
of each such Loan and also after giving effect thereto (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein and in the other Credit Documents shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on the date of the making of such Loan.
5.02 Notice of Borrowing. Prior to the making of each Loan,
the Administrative Agent shall have received a Notice of Borrowing meeting the
requirements of Section 1.03.
5.03 Pro Forma Compliance. At the time of each Loan, Holdings
shall have delivered to each of the Banks a certificate of its chief financial
officer demonstrating that Holdings would have complied with the financial
covenants set forth in Sections 8.10, 8.11, and 8.13, to the extent then
applicable, at the time of such Loan on a pro forma basis as if the Loans had
been incurred at the beginning of the immediately preceding fiscal month for
which such financial covenants were tested at the end of such immediately
preceding fiscal quarter and determined as if all such Indebtedness had been
outstanding from the first day of the relevant calculation period (and the
interest expense associated with such Indebtedness, shall be determined at the
rates which would have been applicable had such debt been outstanding for the
whole such period).
5.04 ▇▇▇ Agreements. Prior to the making of each Loan, the
proceeds of which are to be used for Capital Expenditures, the Borrower shall
certify to the Administrative Agent that ▇▇▇ Agreements substantially similar to
the ▇▇▇ Agreement Standard Form have been entered into with the owners of
multiple dwelling units to be constructed, in part, with the proceeds of such
Loans.
The acceptance of the benefits of each Loan shall constitute a
representation and warranty by the Borrower to each of the Banks that all the
conditions specified in Section 4 and in this Section 5 and applicable to such
Loan exist as of that time. All of the Notes, certificates, legal opinions and
other documents and papers referred to in Section 4 and in this Section 5,
unless otherwise specified, shall be delivered to the Administrative Agent at
the Notice Office for the account of each of the Banks and, except for the
Notes, in sufficient counterparts for each of the Banks and, unless otherwise
specified, shall be in form and substance satisfactory to the Banks.
Section 6. Representations, Warranties and Agreements. In
order to induce the Banks to enter into this Agreement and to make the Loans,
each of Holdings and the Borrower make the following representations, warranties
and agreements as to itself and as to each of its Subsidiaries, as of the
Initial Borrowing Date (both before and after giving effect to the Transaction
and the other transactions contemplated by the Documents, and all references to
Holdings and Subsidiaries herein and elsewhere in this Agreement, shall, unless
otherwise specifically indicated, be references to Holdings and Subsidiaries
after giving effect to the Transaction) and as of the date of each subsequent
Loan which representations, warranties and agreements shall survive the
23
execution and delivery of this Agreement and the Notes and any subsequent Loan,
with the occurrence of each Loan on or after the Initial Borrowing Date being
deemed to constitute a representation and warranty that the matters specified in
this Section 6 are true and correct on and as of the Initial Borrowing Date and
on the date of each such Loan.
6.01 Corporate Status. Each of Holdings and its Subsidiaries
(i) is a duly organized and validly existing corporation in good standing under
the laws of the jurisdiction of its organization, (ii) has the corporate power
and authority to own its property and assets and to transact the business in
which it is engaged and presently proposes to engage and (iii) is duly qualified
and is authorized to do business and is in good standing in each jurisdiction
where the ownership, leasing or operation of property or the conduct of its
business requires such qualifications except for failures to be so qualified
which, in the aggregate, could not reasonably be expected to have a material
adverse effect on the performance, business, assets, nature of assets,
liabilities, operations, properties, condition (financial or otherwise) or
prospects of Holdings and its Subsidiaries taken as a whole.
6.02 Corporate Power and Authority. Each of Holdings and its
Subsidiaries has the corporate power to execute, deliver and perform the terms
and provisions of each of the Documents to which it is party and has taken all
necessary corporate action to authorize the execution, delivery and performance
by it of each of such Documents. Each of Holdings and its Subsidiaries has duly
executed and delivered each of the Documents to which it is party, and each of
such Documents constitutes its legal, valid and binding obligation enforceable
in accordance with its terms, except as the enforceability thereof may be
limited by bankruptcy, reorganization, moratorium or similar laws relating to or
limiting creditors' rights generally or by general equitable principles
(regardless of whether the issue of enforceability is considered in a proceeding
in equity or at law).
6.03 No Violation. Neither the execution, delivery or
performance by Holdings or any of its Subsidiaries of the Documents to which it
is a party, nor compliance by it with the terms and provisions thereof, (i) will
contravene any provision of any applicable law, statute, rule or regulation or
any order, writ, injunction or decree of any court or governmental
instrumentality, (ii) will conflict with or result in any breach of any of the
terms, covenants, conditions or provisions of, or constitute a default under, or
result in the creation or imposition of (or the obligation to create or impose)
any Lien (except pursuant to the Security Documents) upon any of the property or
assets of Holdings or any of its Subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, credit agreement or loan agreement, or any
other agreement, contract or instrument to which Holdings or its Subsidiaries is
a party or by which it or any of its property or assets is bound or to which it
may be subject or (iii) will violate any provision of the Certificate of
Incorporation, By-Laws (or similar organizational documents) of Holdings or any
of its Subsidiaries.
6.04 Governmental Approvals. No order, consent, approval,
license, authorization or validation of, or filing, recording or registration
with (except as have been obtained or made on or prior to the Initial Borrowing
Date and are in full force and effect), or exemption by, any governmental or
public body or authority, or any subdivision thereof, is required to authorize,
or is required in connection with, (i) the execution, delivery and performance
of any Document or (ii) the legality, validity, binding effect or enforceability
of any such Document.
24
6.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections; etc. (a) (i) The consolidated balance sheet of U.S.
Online Communications, Inc. (or its successors) and Firstlink at December 31,
1997, December 1998, and for the nine month period ended September 30, 1999 and
the related statements of earnings and stockholders' equity and cash flows of
such Person, as applicable for the fiscal periods ended as of said dates, which,
in the case of the annual statements, have been examined by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
an independent certified public accountant, who delivered unqualified opinions
in respect thereto, (ii) the consolidated balance sheet of U.S. Online
Communications, Inc. (or its successor) and Firstlink at March 31, 1999, June
30, 1999 and September 30, 1999 and the related statements of operations,
changes in partners' equity and cash flows of U.S. Online Communications, Inc.
(or its successor) and Firstlink for each of the three-month periods ended as of
March 31, 1999, June 30, 1999 and September 30, 1999 and (iii) the pro forma
(after giving effect to the Transaction and the related financing thereof)
consolidated balance sheet of Holdings as at the Effective Date, copies of which
financial statements have heretofore been furnished to each Bank, present a good
faith estimate of the pro forma financial condition of Holdings and its
Subsidiaries (after giving effect to the Transaction) on a consolidated basis at
the date thereof). Such financial statements have been prepared in accordance
with generally accepted accounting principles and practices consistently applied
except to the extent provided in the notes to said financial statements. Since
December 31, 1998, there has been no material adverse change in the performance,
business, assets, nature of assets, liabilities, operations, properties,
condition (financial or otherwise) or prospects of the Holdings and its
Subsidiaries taken as a whole.
(b) On and as of the Initial Borrowing Date, on a pro forma
basis after giving effect to the Transaction and all other transactions
contemplated by the Documents and to all Indebtedness (including, without
limitation, the Loans) being incurred in connection with the Transaction, and
Liens created, and to be created, by each Credit Party in connection therewith:
(a) the sum of the assets (including all contribution and subrogation rights and
other intangible assets), at a fair valuation, of each Credit Party will exceed
its debts; (b) no Credit Party has incurred or intends to, or believes that it
will, incur debts beyond its ability to pay such debts as such debts mature; and
(c) each Credit Party will have sufficient capital with which to conduct its
business. For purposes of this Section 6.05(b) "debt" means any liability on a
claim, and "claim" means (i) 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 (ii)
right to an equitable remedy for breach of performance if such breach gives rise
to a payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, subordinated, disputed,
undisputed, secured or unsecured.
(c) Except as fully reflected in the financial statements and
the notes related thereto described in Section 6.05(a), there were as of the
Initial Borrowing Date (and after giving effect to the Transaction and the other
transactions contemplated hereby and by the Documents) no liabilities or
obligations with respect to Holdings or any of its Subsidiaries of any nature
whatsoever (whether absolute, accrued, contingent or otherwise and whether or
not due) which, either individually or in aggregate, could reasonably be
expected to be material to Holdings and its Subsidiaries taken as a whole. As of
the Initial Borrowing Date, neither Holdings nor any of its Subsidiaries knows
of any basis for the assertion against Holdings or any of its Subsidiaries of
any liability or obligation of any nature whatsoever that is not fully reflected
25
in the financial statements and the notes related thereto described in Section
6.05(a) which, either individually or in the aggregate, could reasonably be
expected to be material to Holdings and its Subsidiaries taken as a whole. As of
the Initial Borrowing Date (and after giving effect to the Transaction) none of
Holdings or any of its Subsidiaries will have any outstanding Indebtedness or
preferred stock other than (i) the Loans, (ii) the Existing Indebtedness and
(iii) the outstanding preferred stock of Holdings set forth on Schedule V.
(d) On and as of the Initial Borrowing Date, the Projections
have been prepared in good faith by Holdings and there are no statements or
conclusions in any of the Projections which are based upon or include
information known to Holdings to be misleading or which fail to take into
account material information regarding the matters reported therein. On the
Initial Borrowing Date, Holdings believes that the Projections were reasonable
and attainable (although actual results may differ from the Projections and no
representation is made that the Projections will in fact be attained).
6.06 Litigation. There are no actions, suits or proceedings
pending or, to the best knowledge of Holdings, threatened (i) with respect to
any Document, or (ii) that are reasonably likely to materially and adversely
affect the performance, business, assets, nature of assets, liabilities,
operations, properties, condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries taken as a whole.
6.07 True and Complete Disclosure. All factual information
(taken as a whole) heretofore or contemporaneously furnished by or on behalf of
Holdings or any Subsidiary of Holdings in writing to any Bank (including,
without limitation, all information contained in the Documents) for purposes of
or in connection with this Agreement or any transaction contemplated herein is,
and all other such factual information (taken as a whole with all information
previously furnished) hereafter furnished by or on behalf of Holdings or any
Subsidiary of Holdings in writing to any Bank will be, true and accurate in all
material respects on the date as of which such information is dated or certified
and not incomplete by omitting to state any material fact.
6.08 Use of Proceeds; Margin Regulations. (a) All proceeds of
the Loans incurred by the Borrower shall be used to repay the Refinanced
Indebtedness, to pay Transaction Fees and Expenses, for general corporate and
working capital purposes of the Borrower and its Subsidiaries and for Capital
Expenditures.
(b) No part of the proceeds of any Loan will be used to
purchase or carry any Margin Stock or to extend credit for the purpose of
purchasing or carrying any Margin Stock. Neither the making of any Loan nor the
use of the proceeds thereof nor the occurrence of any other Credit Event will
violate or be inconsistent with the provisions of Regulation T, U or X of the
Board of Governors of the Federal Reserve System.
6.09 Tax Returns and Payments. Each of Holdings and each of
its Subsidiaries has timely filed or caused to be timely filed (including
pursuant to any valid extensions of time for filing) with the appropriate taxing
authority, all returns, statements, forms and reports for taxes and all other
material tax returns, domestic and foreign (the "Returns") required to be filed
26
by or with respect to the income, properties or operations of Holdings and/or
any of its Subsidiaries. The Returns accurately reflect in all material respects
all liability for taxes of Holdings and its Subsidiaries as a whole for the
periods covered thereby. Each of Holdings and each of its Subsidiaries have paid
all material taxes and assessments payable by them which have become due other
than those contested in good faith and for which adequate reserves have been
established in accordance with generally accepted accounting principles. There
is no material action, suit, proceeding, investigation, audit, or claim now
pending or, to the knowledge of Holdings or any of its Subsidiaries, threatened
by any authority regarding any taxes relating to Holdings or any of its
Subsidiaries. As of the Initial Borrowing Date, neither Holdings nor any of its
Subsidiaries has entered into an agreement or waiver or been requested to enter
into an agreement or waiver extending any statute of limitations relating to the
payment or collection of taxes of Holdings or any of its Subsidiaries, or is
aware of any circumstances that would cause the taxable years or other taxable
periods of Holdings or any of its Subsidiaries not to be subject to the normally
applicable statute of limitations.
6.10 Compliance with ERISA. (a) Schedule III to be delivered
on or prior to the Initial Borrowing Date and in form and substance satisfactory
to the Agent and the Required Banks sets forth each Plan; each Plan (and each
related trust, insurance contract or fund) is in substantial compliance with its
terms and with all applicable laws, including, without limitation, ERISA and the
Code; each Plan (and each related trust, if any) which is intended to be
qualified under Section 401(a) of the Code has received a determination letter
from the Internal Revenue Service to the effect that it meets the requirements
of Sections 401(a) and 501(a) of the Code; no Reportable Event has occurred; no
Plan which is a multiemployer plan (as defined in Section 4001(a)(3) of ERISA)
is insolvent or in reorganization; no Plan has an Unfunded Current Liability; no
Plan which is subject to Section 412 of the Code or Section 302 of ERISA has an
accumulated funding deficiency, within the meaning of such sections of the Code
or ERISA, or has applied for or received a waiver of an accumulated funding
deficiency or an extension of any amortization period, within the meaning of
Section 412 of the Code or Section 303 or 304 of ERISA; all contributions
required to be made with respect to a Plan have been timely made; neither
Holdings nor any Subsidiary of Holdings nor any ERISA Affiliate has incurred any
material liability (including any indirect, contingent or secondary liability)
to or on account of a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062,
4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971 or
4975 of the Code or expects to incur any such liability under any of the
foregoing sections with respect to any Plan; no condition exists which presents
a material risk to Holdings or any Subsidiary of Holdings or any ERISA Affiliate
of incurring a liability to or on account of a Plan pursuant to the foregoing
provisions of ERISA and the Code; no proceedings have been instituted to
terminate or appoint a trustee to administer any Plan which is subject to Title
IV of ERISA; no action, suit, proceeding, hearing, audit or investigation with
respect to the administration, operation or the investment of assets of any Plan
(other than routine claims for benefits) is pending, expected or threatened;
using actuarial assumptions and computation methods consistent with Part 1 of
subtitle E of Title IV of ERISA, the aggregate liabilities of Holdings, its
Subsidiaries and its ERISA Affiliates to all plans which are multiemployer plans
(as defined in Section 4001(a)(3) of ERISA) in the event of a complete
withdrawal therefrom, as of the close of the most recent fiscal year of each
such Plan ended prior to the date of the most recent Credit Event, would not
exceed $50,000; each group health plan (as defined in Section 607(1) of ERISA or
27
Section 4980B(g)(2) of the Code) which covers or has covered employees or former
employees of Holdings, any Subsidiary of Holdings, or any ERISA Affiliate has at
all times been operated in compliance with the provisions of Part 6 of subtitle
B of Title I of ERISA and Section 4980B of the Code; no lien imposed under the
Code or ERISA on the assets of Holdings or any Subsidiary of Holdings or any
ERISA Affiliate exists or is likely to arise on account of any Plan; and
Holdings and its Subsidiaries may cease contributions to or terminate any
employee benefit plan maintained by any of them without incurring any material
liability.
6.11 The Security Documents. (a) The provisions of the
Security Agreement are effective to create in favor of the Collateral Agent for
the benefit of the Secured Creditors a legal, valid and enforceable security
interest in all right, title and interest of the respective Credit Parties in
the Collateral described therein and the Collateral Agent, for the benefit of
the Secured Creditors, has a fully perfected Lien on, and security interest in,
all right, title and interest of the respective Credit Parties, in all of the
Collateral described therein, subject to no other Liens other than Permitted
Liens. The recordation of the Security Agreement in the United States Patent and
Trademark Office together with filings on Form UCC-1 made pursuant to the
Security Agreement will be effective, under federal and state law, to perfect
the security interest granted to the Collateral Agent in the trademarks and
patents covered by the Security Agreement and the filing of the Security
Agreement with the United States Copyright Office together with filings on Form
UCC-1 made pursuant to the Security Agreement will be effective under federal
and state law to perfect the security interest granted to the Collateral Agent
in the copyrights covered by the Security Agreement. Each of the Credit Parties
party to the Security Agreement has good and merchantable title to all
Collateral described therein, free and clear of all Liens except those described
above in this clause (a).
(b) The security interests created in favor of the Collateral
Agent, as Pledgee for the benefit of the Secured Creditors, under the Pledge
Agreement constitute first perfected security interests in the Pledged
Securities described in the Pledge Agreement, subject to no security interests
of any other Person. No filings or recordings are required in order to perfect
(or maintain the perfection or priority of) the security interests created in
the Pledged Securities and the proceeds thereof under the Pledge Agreement.
6.12 Representations and Warranties in Documents. All
representations and warranties set forth in the Documents are true and correct
in all material respects at the time as of which such representations and
warranties were made and on the Initial Borrowing Date.
6.13 Properties. None of Holdings or its Subsidiaries owns any
real property. Each Leasehold leased by Holdings or any of its Subsidiaries, as
of the Initial Borrowing Date, and the nature of the interest therein, is
correctly set forth in Schedule IV (which Schedule shall be delivered on or
prior to the Initial Borrowing Date and shall be in form and substance
satisfactory to the Administrative Agent and the Required Banks), including but
not limited to all locations where Holdings or its Subsidiaries has the right to
use, occupy, or maintain space for the installation, use or maintenance of its
communications systems. Each Leasehold is in full force and effect. All rents
and additional rents due to date under each of the Leaseholds have been paid in
full, and all other obligations of Holdings, or any of its Subsidiaries, as the
28
case may be as lessees or licensees have been performed. Neither Holdings nor
any of its Subsidiaries has received notice of any default under any of the
Leaseholds. Each of the Leaseholds is in a state of good maintenance and repair
and is adequate and suitable to enable Holdings and its Subsidiaries to engage
in the business of providing communications services. Neither Holdings nor any
of its Subsidiaries has assigned, transferred, conveyed or mortgaged any
interest in any of the Leaseholds.
6.14 Capitalization. On the Initial Borrowing Date and after
giving effect to the Transaction, the authorized capital stock of Holdings and
all owners thereof, shall be as set forth on Schedule V which Schedule shall be
delivered on or prior to the Initial Borrowing Date and shall be in form and
substance satisfactory to the Administrative Agent and the Required Banks.
Except as set forth on Schedule V, neither Holdings nor any of its Subsidiaries
has any outstanding securities convertible into or exchangeable for any of its
equity interests or outstanding rights to subscribe for or to purchase, or
warrants or options for the purchase, or any agreements providing for the
issuance (contingent or otherwise) of, or any calls, commitments or claims of
any character relating to, its partnership or other equity interests, as the
case may be.
6.15 Subsidiaries. On the Initial Borrowing Date, the
corporations listed on Schedule VI are the only Subsidiaries of Holdings which
Schedule shall be delivered on or prior to the Initial Borrowing Date and shall
be in form and substance satisfactory to the Administrative Agent and the
Required Banks. Schedule VI correctly sets forth, as of the Initial Borrowing
Date, the percentage ownership (direct and indirect) of Holdings in each class
of capital stock of each of its Subsidiaries and also identifies the direct
owner thereof.
6.16 Compliance with Statutes, etc. Each of Holdings and its
Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property (including applicable statutes, regulations, orders and
restrictions relating to environmental standards and controls), except with
respect to each of the foregoing such noncompliance as could not, individually
or in the aggregate, reasonably be expected to have a material adverse effect on
the performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of Holdings and its
Subsidiaries taken as a whole.
6.17 Investment Company Act. None of Holdings nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
6.18 Public Utility Holding Company Act. None of Holdings nor
any of its Subsidiaries is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
6.19 Environmental Matters. (a) Holdings and each of its
Subsidiaries have complied with, and on the date of such Credit Event are in
compliance with, in all respects, all applicable Environmental Laws and the
requirements of any permits issued under such Environmental Laws except such
29
noncompliances which, in the aggregate, could not reasonably be expected to have
a material adverse effect on the performance, business, assets, nature of
assets, liabilities, operations, properties, condition (financial or otherwise)
or prospects of Holdings and its Subsidiaries taken as a whole. There are no
past, pending or, to the best knowledge of Holdings, threatened material
Environmental Claims against Holdings or any of its Subsidiaries or any Real
Property currently owned or operated by Holdings or any of its Subsidiaries.
There are no facts, circumstances, conditions or occurrences concerning the
business or operations of Holdings or any of its Subsidiaries or any Real
Property owned or operated at any time by Holdings or any of its Subsidiaries
or, to the knowledge of Holdings, any property adjoining any such Real Property
that could reasonably be expected (i) to form the basis of an Environmental
Claim against Holdings or any of its Subsidiaries or any Real Property owned or
operated by Holdings or any of its Subsidiaries or (ii) to cause such Real
Property to be subject to any restrictions on the ownership, occupancy, use or
transferability of such Real Property under any Environmental Law except such
Environmental Claims and restrictions which individually or in the aggregate
could not reasonably be expected to have a material adverse effect on the
performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of Holdings and its
Subsidiaries taken as a whole.
(b) Neither Holdings nor any of its Subsidiaries has, at any
time, generated, used, treated, stored, transported or released Hazardous
Materials on, to or from any Real Property at any time owned, leased or at any
time operated by Holdings or any of its Subsidiaries in each case which could
reasonably be expected to cause a material adverse effect on the performance,
business, assets, nature of assets, liabilities, operations, properties,
condition (financial or otherwise) or prospects of Holdings and its Subsidiaries
taken as a whole.
(c) There are not now and never have been any underground
storage tanks located on any Real Property owned or operated by Holdings or any
of its Subsidiaries.
(d) No Real Property at any time owned or at any time operated
by Holdings or any of its Subsidiaries is located on any site listed on, or
proposed in the Federal Register for listing on, the Superfund National
Priorities List, or listed on the Comprehensive Environmental Response
Compensation and Liability Information System or their state equivalents.
6.20 Labor Relations. Neither Holdings nor any of its
Subsidiaries is engaged in any unfair labor practice that could reasonably be
expected to have a material adverse effect on Holdings and its Subsidiaries
taken as a whole. There is (i) no significant unfair labor practice complaint
pending against Holdings or any of its Subsidiaries or, to the best knowledge of
Holdings, threatened against any of them, before the National Labor Relations
Board, and no significant grievance or significant arbitration proceeding
arising out of or under any collective bargaining agreement is so pending
against Holdings or any of its Subsidiaries or, to the best knowledge of
Holdings, threatened against any of them and (ii) no significant strike, labor
dispute, slowdown or stoppage pending against Holdings or any of its
Subsidiaries or, to the best knowledge of Holdings, threatened against Holdings
or any of its Subsidiaries in each case that could reasonably be expected to
have a material adverse effect on the performance, business, assets, nature of
assets, liabilities, operations, properties, condition (financial or otherwise)
or prospects of Holdings and its Subsidiaries taken as a whole.
30
6.21 Patents, Licenses, Franchises and Formulas. (a) Holdings,
together with its Subsidiaries, has a license to use or otherwise has the right
to use, free and clear of pending or threatened Liens, all the material patents,
patent applications, trademarks, service marks, trade names, trade secrets,
copyrights, proprietary information, computer programs, data bases, licenses,
franchises and formulas, or rights with respect to the foregoing (collectively,
"Intellectual Property"), and has obtained all licenses and other rights of
whatever nature, necessary for the present conduct of its business, without any
known conflict with the rights of others which, or the failure to obtain which,
as the case may be, could reasonably be expected to have a material adverse
effect on the performance, business, assets, nature of assets, liabilities,
operations, properties, condition (financial or otherwise) or prospects of
Holdings and its Subsidiaries taken as a whole.
(b) Holdings, together with its Subsidiaries, has the right to
practice under and use substantially all of its material Intellectual Property.
(c) Neither Holdings nor any of its Subsidiaries has knowledge
of any claim by any third party contesting the validity, enforceability, use or
ownership of the Intellectual Property, or of any existing state of facts that
would support a claim that use by Holdings or any of its Subsidiaries of any
such Intellectual Property has infringed or otherwise violated any Intellectual
Property right of any other Person and that to the best knowledge of Holdings
and its Subsidiaries no claim is threatened except for such claims that could
not individually or in the aggregate reasonably be expected to have a material
adverse affect on the performance, business, assets, nature of assets,
liabilities, operations, properties, condition (financial or otherwise) or
prospects of Holdings and its Subsidiaries taken as a whole.
6.22 Indebtedness. Schedule VII (which Schedule shall be
delivered on or prior to the Initial Borrowing Date and shall be in form and
substance satisfactory to the Administrative Agent and the Required Banks) sets
forth a true and complete list of all Indebtedness (other than the Loans) and
preferred stock of Holdings and each of its Subsidiaries as of the Initial
Borrowing Date after giving effect to the Transaction and the other transactions
contemplated hereby (the "Existing Indebtedness"), in each case showing the
aggregate amount thereof and the name of the respective obligor and any other
entity which directly or indirectly guaranteed such debt. None of the Existing
Indebtedness was incurred in connection with, or in contemplation of, the
Transaction or the other transactions contemplated hereby.
6.23 Restrictions on or Relating to Subsidiaries. There does
not exist any encumbrance or restriction on the ability of (i) any Subsidiary of
Holdings to pay dividends or make any other distributions on its capital stock,
or any other interest or participation in its profits owned by Holdings or any
Subsidiary of Holdings, or to pay any Indebtedness owed to Holdings or a
Subsidiary of Holdings, (ii) any Subsidiary of Holdings to make loans or
advances to Holdings or any of Holdings' Subsidiaries or (iii) Holdings or any
Subsidiary of Holdings to transfer any of its properties or assets to Holdings
or any Subsidiary of Holdings, except for such encumbrances or restrictions
existing under or by reason of (w) applicable law, (x) this Agreement or the
other Credit Documents or (y) customary provisions restricting subletting or
assignment of any lease governing a leasehold interest of Holdings or a
Subsidiary of Holdings or (z) Indebtedness incurred in accordance with Section
8.05(iii).
31
6.24 The Transaction. All aspects of the Transaction have been
effected in accordance with the Documents and all applicable law. At the time of
consummation thereof, all consents and approvals of, and filings and
registrations with, and all other actions in respect of, all governmental
agencies, authorities or instrumentalities required in order to consummate the
Transaction shall have been obtained, given, filed or taken and are in full
force and effect (or effective judicial relief with respect thereto has been
obtained) in each case where the failure to do so could reasonably be expected
to have a material adverse effect on the performance, business, assets, nature
of assets, liabilities, operations, properties, condition (financial or
otherwise) or prospects of Holdings and its Subsidiaries taken as a whole. All
applicable waiting periods with respect thereto have or, prior to the time when
required, will have, expired without, in all such cases, any action being taken
by any competent authority which restrains, prevents or imposes material adverse
conditions upon the consummation of the Transaction. Additionally, at the time
of consummation thereof, there does not exist any judgment, order or injunction
prohibiting or imposing material adverse conditions upon the consummation of the
Transaction.
6.25 Material Contracts. All Material Contracts of the
Borrower and each of its Subsidiaries as of the Initial Borrowing Date
(including, but not limited to, all of the ▇▇▇ Agreements which are designated
as such on Schedule VIII) are listed on Schedule VIII which Schedule shall be
delivered on or prior to the Initial Borrowing Date and shall be in form and
substance satisfactory to the Administrative Agent and the Required Banks.
6.26 Year 2000 Reprogramming. Any reprogramming required to
permit the proper functioning, in and following the year 2000, of Holdings or
any of its Subsidiaries', (i) computer systems and (ii) equipment containing
embedded microchips (including systems and equipment supplied by others or with
which the Holdings systems interface) and the testing of all such systems and
equipment, as so reprogrammed, has been completed. The costs to Holdings and its
Subsidiaries of such reprogramming and testing and of the reasonably foreseeable
consequences of year 2000 (including, without limitation, reprogramming errors
and the failure of others' systems or equipment) could not reasonably be
expected to have a material adverse effect on the performance, business, assets,
nature of assets, liabilities, operations, properties, condition (financial or
otherwise) or prospects of Holdings and its Subsidiaries taken as a whole. The
computer and management information systems of Holdings and its Subsidiaries
are, and with ordinary course upgrading and maintenance will continue to be for
the term of this Agreement, sufficient to permit the Holdings and its
Subsidiaries to conduct their business without such conduct resulting in a
material adverse effect on the performance, business, assets, nature of assets,
liabilities, operations, properties, condition (financial or otherwise) or
prospects of Holdings and its Subsidiaries taken as a whole.
Section 7. Affirmative Covenants. Each of Holdings and the
Borrower covenants and agrees that on and after the Effective Date and until the
Total Commitment has terminated and the Loans and Notes, together with interest,
Fees and all other Obligations incurred hereunder and thereunder, are paid in
full:
7.01 Information Covenants. The Borrower will furnish to the
Administrative Agent:
32
(a) Monthly Reports. Within 30 days after the end of each
fiscal month (i) other than the last fiscal month of any fiscal quarter of
Holdings, the consolidated and consolidating balance sheets of Holdings and its
Subsidiaries as at the end of such month and the related consolidated and
consolidating statements of earnings for such month and for the elapsed portion
of the fiscal year ended with the last day of such month, in each case setting
forth comparative figures for the corresponding month and elapsed portion of
such fiscal year for the prior fiscal year and comparable budgeted figures for
such period, all of which shall be certified by the chief financial officer or
controller of the Borrower, subject to normal year-end audit adjustments and
shall be accompanied by a management discussion and analysis of the results of
operations and financial condition with respect to such period and (ii) the
Subscriber Penetration Report for such period.
(b) Quarterly Financial Statements. Within 45 days after the
close of each of the first three quarterly accounting periods in each fiscal
year of Holdings, (i) the consolidated and consolidating balance sheets of
Holdings and its Subsidiaries as at the end of such quarterly period and the
related consolidated and consolidating statements of earnings and stockholders'
equity and statement of cash flows for such quarter, in each case for such
quarterly period and for the elapsed portion of the fiscal year ended with the
last day of such quarterly period, in each case, setting forth comparative
figures for the related periods in the prior fiscal year and comparable budgeted
figures for such period, all of which shall be certified by the chief financial
officer or controller of the Borrower, subject to normal year-end audit
adjustments and shall be accompanied by a management discussion and analysis of
the results of operations and financial condition with respect to such period
and (ii) the Subscriber Penetration Report for such period.
(c) Annual Financial Statements. Within 90 days after the
close of each fiscal year of Holdings, (i) the consolidated and consolidating
balance sheets of Holdings and its Subsidiaries as at the end of such fiscal
year and the related consolidated and consolidating statements of earnings and
stockholders' equity and statement of cash flows for such fiscal year and
setting forth comparative figures for the preceding fiscal year and comparable
budgeted figures for such period and certified, (x) in the case of the
consolidating statements, by the chief financial officer of the Borrower and (y)
in the case of the consolidated financial statements of Holdings and its
Subsidiaries, by any of the "big five" or other independent certified public
accountants of recognized national standing reasonably acceptable to the
Required Banks, together with a signed opinion of such accounting firm (which
opinion shall not be qualified in any respect) stating that in the course of its
regular audit of the financial statements of Holdings which audit was conducted
in accordance with generally accepted auditing standards, such accounting firm
obtained no knowledge of any Default or Event of Default which has occurred and
is continuing or, if in the opinion of such accounting firm such a Default or
Event of Default has occurred and is continuing, a statement as to the nature
thereof and shall be accompanied by a management discussion and analysis of the
results of operations and financial condition with respect to such period and
(ii) the Subscriber Penetration Report for such period.
(d) Management Letters. Promptly after the receipt thereof by
Holdings or any of its Subsidiaries, a copy of any "management letter" received
by Holdings or any of its Subsidiaries from its certified public accountants.
33
(e) Budgets. As soon as available but in no event later than
30 days after the first day of the fiscal year of Holdings, a budget for
Holdings and its Subsidiaries in form customarily prepared by Holdings
(including budgeted statements of earnings and sources and uses of cash and
balance sheets) prepared by Holdings for each calendar month of such fiscal year
and on an annual basis for the next succeeding fiscal year prepared in
reasonable detail with appropriate presentation and discussion of the principal
assumptions upon which such budgets are based, accompanied by the statement of
the chief financial officer or controller of the Borrower to the effect that, to
the best of his knowledge, the budget is a reasonable estimate for the periods
covered thereby.
(f) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Section 7.01(a), (b) and (c), a certificate
of the chief financial officer of the Borrower to the effect that no Default or
Event of Default has occurred and is continuing or, if any Default or Event of
Default has occurred and is continuing, specifying the nature and extent
thereof, which certificate, (x) in the case of certificates delivered pursuant
to Section 8.01(b) or (c), shall set forth the calculations required to
establish whether the Borrower was in compliance with the provisions of Sections
2.03, 3.02, 8.02, 8.04, 8.05, 8.06 and 8.08 through 8.13, inclusive at the end
of such fiscal quarter or year, as the case may be, and (y) in the case of
certificates delivered pursuant to Section 8.01(c), the amount of Excess Cash
Flow for the relevant Excess Cash Flow Payment Period.
(g) Notice of Default or Litigation. Promptly, and in any
event within three Business Days after an officer of Holdings or any of its
Subsidiaries obtains knowledge thereof, notice of (i) the occurrence of any
event which constitutes a Default or Event of Default, (ii) any litigation or
governmental investigation or proceeding pending (x) against Holdings or its
Subsidiaries which could reasonably be expected to materially and adversely
affect the performance, business, assets, nature of assets, liabilities,
operations, properties, condition (financial or otherwise) or prospects of
Holdings and its Subsidiaries taken as a whole or (y) with respect to any
Document and (iii) any other event which could reasonably be expected to
materially and adversely affect the performance, business, assets, nature of
assets, liabilities, operations, properties, condition (financial or otherwise)
or prospects of Holdings and its Subsidiaries taken as a whole.
(h) Other Reports and Filings. Promptly upon transmission
thereof, copies of any financial information, proxy materials and other
information and reports, if any, which any Credit Party or any of its
Subsidiaries (x) has filed with the Securities and Exchange Commission (the
"SEC") or (y) has delivered to holders of, or any agent or trustee with respect
to, Indebtedness of any Credit Party or any of its Subsidiaries in its capacity
as such a holder, agent, or trustee.
(i) Environmental Matters. Promptly upon, and in any event
within three Business Days after an officer of Holdings or of any of its
Subsidiaries obtains knowledge thereof, notice of any of the following
environmental matters (i) any pending or threatened material Environmental Claim
against Holdings or any of its Subsidiaries or any Real Property owned or
operated at any time by Holdings or any of its Subsidiaries; (ii) any condition
or occurrence on or arising from any Real Property owned or operated at any time
by Holdings or any of its Subsidiaries that (a) could reasonably be anticipated
to result in a material noncompliance by Holdings or any of its Subsidiaries
34
with any applicable Environmental Law, or (b) could reasonably be anticipated to
form the basis of a material Environmental Claim against Holdings or any of its
Subsidiaries or any Real Property owned or operated by Holdings or any of its
Subsidiaries; (iii) any condition or occurrence on any Real Property owned or
operated by Holdings or any of its Subsidiaries or any property adjoining such
Real Property that could reasonably be anticipated to cause such Real Property
to be subject to any material restrictions on the ownership, occupancy, use or
transferability of such Real Property under any Environmental Law; and (iv) the
taking of any removal or remedial action in response to a material Release or
material threatened Release or the actual or alleged presence of any Hazardous
Material on or from any Real Property owned or operated at any time by the
Borrower or any of its Subsidiaries in each case as required by any
Environmental Law or any governmental or other administrative agency. All such
notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial action and the
Borrower or such Subsidiary's response thereto. In addition, Holdings will
provide the Banks with copies of all material communications with any government
or governmental agency relating to material Environmental Claims, all material
communications with any person relating to material Environmental Claims, and
such detailed reports of any Environmental Claim as may reasonably be requested
by the Required Banks.
(j) Annual Meetings with Banks. Within 120 days after the
close of each fiscal year of Holdings, Holdings shall, at the request of any
Agent or the Required Banks, hold a meeting (at a mutually agreeable location
and time) with all Banks who choose to attend such meeting at which meeting
shall be reviewed the financial results of the previous fiscal year and the
financial condition of the Holdings and its Subsidiaries and the budgets
presented for the current fiscal year of the Holdings and its Subsidiaries.
(k) Borrowing Base Certificate. (i) On the Initial Borrowing
Date and (ii) thereafter, not later than 12:00 noon (New York time) on the 15th
Business Day after the end of each fiscal month, a borrowing base certificate
substantially in the form of Exhibit K (each, a "Borrowing Base Certificate"),
as of (x) in the case of clause (i), November 30, 1999 and (y) in the case of
clause (ii), the last day of the immediately preceding fiscal month, and in each
case, certified by the Chief Financial Officer of the Borrower.
(l) Other Information. From time to time, such other
information or documents (financial or otherwise) with respect to any Credit
Party or any of its Subsidiaries, as any Agent or the Required Banks may
reasonably request.
7.02 Books, Records and Inspections. Holdings will, and will
cause each of its Subsidiaries to, keep proper books of record and account in
which full, true and correct entries, in conformity with United States generally
accepted accounting principles and all requirements of law, shall be made of all
dealings and transactions in relation to its business and activities. Holdings
will, and will cause each of its Subsidiaries to, permit officers and designated
representatives of the Administrative Agent or any Bank (at their own expense)
to visit and inspect, under guidance of officers of Holdings or of such
Subsidiary, any of the properties of Holdings or such Subsidiary, and to examine
the books of account of Holdings or such Subsidiary and discuss the affairs,
finances and accounts of Holdings or of such Subsidiary with, and be advised as
35
to the same by, its and their officers, all at such reasonable times and
intervals and to such reasonable extent as the Administrative Agent or such Bank
may request.
7.03 Maintenance of Property, Insurance. (a) Schedule II sets
forth a true and complete listing of all insurance maintained by Holdings and
each of its Subsidiaries as of the Initial Borrowing Date, which Schedule shall
be delivered on or prior to the Initial Borrowing Date and shall be in form and
substance satisfactory to the Administrative Agent and the Required Banks.
Holdings will, and will cause each of its Subsidiaries to, (i) keep all material
property (including Leaseholds) useful and necessary in its business in good
working order and condition (ordinary wear and tear excepted), (ii) maintain
with financially sound and reputable insurance companies insurance on all its
property in at least such amounts and against at least such risks as are
described on Schedule II, and (iii) furnish to each Bank, upon written request,
full information as to the insurance carried. Within 120 days after the
Effective Date, the Borrower will obtain and thereafter will maintain and keep
in full force and effect key-man life insurance on the life of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ in
the amount of $5,000,000. The Collateral Agent shall be the loss payee with
respect to such insurance. The provisions of this Section 7.03 shall be deemed
to be supplemental to, but not duplicative of, the provisions of any of the
Security Documents that require the maintenance of insurance.
(b) Holdings will at all times keep, and will cause each of
its Subsidiaries (other than Residentclub) to keep, its property insured in
favor of the Collateral Agent, and all policies (including mortgage policies) or
certificates (or certified copies thereof) with respect to such insurance (and
any other insurance maintained by Holdings or its Subsidiaries (other than
employee benefit insurance)) (i) shall be endorsed to the Collateral Agent's
satisfaction for the benefit of the Collateral Agent (including, without
limitation, by naming the Collateral Agent as loss payee and naming the
Collateral Agent, the Administrative Agent and each Bank as an additional
insured) with respect to Collateral, (ii) shall state that such insurance
policies shall not be cancelled or revised without 30 days' prior written notice
thereof by the respective insurer to the Collateral Agent, (iii) shall provide
that the respective insurers irrevocably waive any and all rights of subrogation
with respect to the Collateral Agent, (iv) shall contain the standard
noncontributory mortgagee clause endorsement in favor of the Collateral Agent
with respect to hazard insurance coverage, (v) shall provide that any losses
shall be payable notwithstanding (A) any act or neglect of Holdings or any of
its Subsidiaries, (B) the occupation or use of the properties for purposes more
hazardous than those permitted by the terms of the respective policy if such
coverage is obtainable at commercially reasonable rates and is of the kind from
time to time customarily insured against by Persons owning or using similar
property and in such amounts as are customary, (C) any foreclosure or other
proceeding relating to the insured properties or (D) any change in the title to
or ownership or possession of the insured properties and (vi) shall be deposited
with the Collateral Agent. If Holdings or any of its Subsidiaries shall fail to
maintain insurance in accordance with this Section 7.03, or if Holdings or any
of its Subsidiaries shall fail to endorse and deposit all policies or
certificates with respect thereto, the Collateral Agent shall have the right
(but shall be under no obligation) to procure such insurance and Holdings agrees
to reimburse the Collateral Agent for all costs and expenses of procuring such
insurance.
7.04 Corporate Franchises. Holdings will do, and will cause
each of its Subsidiaries to do or cause to be done, all things necessary to
preserve and keep in full force and effect its existence and its rights,
franchises, licenses, permits, trademarks, service marks, trade names,
36
copyrights and patents necessary for the operation of its respective businesses;
provided, however, that nothing in this Section 7.04 shall prevent the
transactions permitted by Section 8.02 or the withdrawal by Holdings or any
Subsidiary of Holdings of its qualification as a foreign corporation in any
jurisdiction where such withdrawal could not reasonably be expected to have a
material adverse effect on the performance, business, assets, nature of assets,
liabilities, properties, operations, condition (financial or otherwise) or
prospects of Holdings and its Subsidiaries taken as a whole.
7.05 Compliance with Statutes, etc. Holdings will, and will
cause each of its Subsidiaries to, comply with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property except such noncompliances as could
not, individually or in the aggregate, reasonably be expected to have a material
adverse effect on the performance, business, assets, nature of assets,
liabilities, operations, properties, condition (financial or otherwise) or
prospects of or Holdings and its Subsidiaries taken as a whole.
7.06 Compliance with Environmental Laws. (a) Holdings will
comply, and will cause each of its Subsidiaries to comply, in all material
respects with all Environmental Laws applicable to ownership or use of the Real
Property, will promptly pay or cause Holdings to pay all costs and expenses
incurred in such compliance, and will keep or cause to be kept all such Real
Properties free and clear of any Liens imposed pursuant to such Environmental
Laws. None of Holdings nor any Subsidiary of Holdings will generate, use, treat,
store, release or dispose of, or permit the generation, use, treatment, storage,
Release or disposal of Hazardous Materials on any Real Property, or transport or
permit the transportation of Hazardous Materials to or from any Real Property,
other than in compliance with applicable Environmental Law.
(b) At the reasonable request of the Administrative Agent or
the Required Banks at any time and from time to time during the existence of
this Agreement: (i) if an Event of Default exists under this Agreement, (ii)
upon the reasonable belief by the Administrative Agent that Holdings or any of
its Subsidiaries has breached any representation or covenant herein with respect
to any environmental matters and such breach is continuing, or (iii) in the
event notice is provided under Section 7.01(i) herein, Holdings will provide, at
its sole cost and expense (or will cause Holdings to provide at its sole cost
and expense), an environmental site assessment report reasonable in scope
concerning any Real Property of Holdings or its Subsidiaries, prepared by an
environmental consulting firm approved by the Administrative Agent and the
Required Banks, indicating the presence or Release of Hazardous Materials on or
from any of the Real Property and the potential cost of any removal or remedial
action in connection with any Hazardous Materials on such Real Property. If
Holdings fails to provide the same after thirty days' notice, the Administrative
Agent may order the same, and Holdings shall grant and hereby grants to the
Administrative Agent and the Banks and their agents access to such Real Property
and specifically grants the Administrative Agent and the Banks an irrevocable
non-exclusive license to undertake such an assessment all at Holdings' expense.
7.07 ERISA. As soon as possible and, in any event, within ten
(10) days after Holdings, any Subsidiary of Holdings or any ERISA Affiliate
knows or has reason to know of the occurrence of any of the following, Holdings
will deliver to each of the Banks a certificate signed on behalf of Holdings by
37
the chief financial officer of Holdings setting forth the full details as to
such occurrence and the action, if any, that Holdings, such Subsidiary or such
ERISA Affiliate is required or proposes to take, together with any notices
required or proposed to be given to or filed by Holdings, such Subsidiary, the
Plan administrator or such ERISA Affiliate to or with the PBGC or any other
government agency, or a Plan participant and any notices received by Holdings,
such Subsidiary or ERISA Affiliate from the PBGC or any other government agency,
or a Plan participant with respect thereto: that a Reportable Event has occurred
(except to the extent that Holdings has previously delivered to the Banks a
certificate and notices (if any) concerning such event pursuant to the next
clause hereof); that a contributing sponsor (as defined in Section 4001(a)(13)
of ERISA) of a Plan subject to Title IV of ERISA is subject to the advance
reporting requirement of PBGC Regulation Section 4043.61 (without regard to
subparagraph (b)(1) thereof), and an event described in subsection .62, .63,
.64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 is reasonably expected
to occur with respect to such Plan within the following 30 days; that an
accumulated funding deficiency, with the meaning of Section 412 of the Code or
Section 302 of ERISA, has been incurred or an application may be or has been
made for a waiver or modification of the minimum funding standard (including any
required installment payments) or an extension of any amortization period under
Section 412 of the Code or Section 303 or 304 of ERISA with respect to a Plan;
that any contribution required to be made with respect to a Plan has not been
timely made; that a Plan has been or may be terminated, reorganized, partitioned
or declared insolvent under Title IV of ERISA; that a Plan has an Unfunded
Current Liability; that proceedings may be or have been instituted to terminate
or appoint a trustee to administer a Plan which is subject to Title IV of ERISA;
that a proceeding has been instituted pursuant to Section 515 of ERISA to
collect a delinquent contribution to a Plan; that the Borrower, any Subsidiary
of the Borrower or any ERISA Affiliate will or may incur any liability
(including any indirect, contingent, or secondary liability) to or on account of
the termination of or withdrawal from a Plan under Section 4062, 4063, 4064,
4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan under Section
401(a)(29), 4971, 4975 or 4980 of the Code or Section 409 or 502(i) or 502(1) of
ERISA or with respect to a group health plan (as defined in Section 607(1) of
ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the Code; or
that Holdings or any Subsidiary of Holdings may incur any material liability
pursuant to any employee welfare benefit plan (as defined in Section 3(1) of
ERISA) that provides benefits to retired employees or other former employees
(other than as required by Section 601 of ERISA) or any Plan. Holdings will
deliver to the Administrative Agent copies of any records, documents or other
information that must be furnished to the PBGC with respect to any Plan pursuant
to Section 4010 of ERISA. Holdings will also deliver to the Administrative Agent
a complete copy of the annual report (on Internal Revenue Service Form
5500-series) of each Plan (including, to the extent required, the related
financial and actuarial statements and opinions and other supporting statements,
certificates, schedules and information) required to be filed with the Internal
Revenue Service. In addition to any certificates or notices delivered to the
Banks pursuant to the first sentence hereof, copies of annual reports and any
records, documents or other information required to be furnished to the PBGC or
any other government agency and any material notices received by Holdings, any
Subsidiary of Holdings or any ERISA Affiliate with respect to any Plan, shall be
delivered to the Administrative Agent no later than ten (10) days after the date
such annual report has been filed with the Internal Revenue Service or such
38
records, documents and/or information has been furnished to the PBGC or any
other government agency or such notice has been received by Holdings, the
Subsidiary or the ERISA Affiliate, as applicable.
7.08 End of Fiscal Years; Fiscal Quarters. Holdings will cause
its, and will cause each of its Subsidiaries', fiscal years to end on December
31 and each of its, and each of its Subsidiaries', first three fiscal quarters
to end on March 31, June 30 and September 30.
7.09 Performance of Obligations. Holdings will, and will cause
each of its Subsidiaries to, perform all of its obligations under the terms of
each mortgage, indenture, security agreement and other debt instrument by which
it is bound, except such non-performances as could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of Holdings and its
Subsidiaries taken as a whole.
7.10 Payment of Taxes. Holdings will pay and discharge, and
will cause each of its Subsidiaries to pay and discharge, all taxes, assessments
and governmental charges or levies imposed upon it or upon its income or
profits, or upon any properties belonging to it, prior to the date on which
penalties would otherwise attach thereto, and all lawful claims which, if
unpaid, might become a Lien or charge upon any properties of Holdings or any of
its Subsidiaries not otherwise permitted under Section 9.01; provided that
neither Holdings nor any of its Subsidiaries shall be required to pay any such
tax, assessment, charge, levy or claim which is being contested in good faith
and by proper proceedings if it has maintained adequate reserves with respect
thereto in accordance with generally accepted accounting principles.
7.11 Interest Rate Protection. The Borrower shall, upon the
Conversion Date enter into arrangements acceptable to the Administrative Agent
establishing a maximum interest rate acceptable to the Administrative Agent on
the principal amount of loans equal to 50% of the aggregate outstanding
principal amount of Loans on the Conversion Date (after giving effect to all
Loans incurred on such date) for a period of at least 3 years after the
Conversion Date.
7.12 Use of Proceeds. All proceeds of the Loans shall be used
as provided in Section 6.08.
7.13 UCC Searches. On or after the 60th day following the
Initial Borrowing Date at the Administrative Agent's request, Holdings shall
promptly deliver to the Administrative Agent (at Holdings' own cost) copies of
Request for Information or Copies (UCC-11), or equivalent reports for the
purpose of verifying that all financing statements necessary or, in the opinion
of the Collateral Agent desirable, to perfect the security interests purported
to be created by the Security Agreement shall have been properly recorded and
filed.
7.14 Intellectual Property Rights. Holdings will, and will
cause each of its Subsidiaries to, maintain in full force and effect all
Intellectual Property rights necessary or appropriate to the business of
Holdings or any Subsidiary of Holdings and take no action (including, without
limitation, the licensing of Intellectual Property), or fail to take an action,
as the case may be, in connection with such Intellectual Property rights which
39
could reasonably be expected to result in a material adverse effect on the
performance, business, assets, nature of assets, liabilities, properties,
operations, condition (financial or otherwise) or prospects of Holdings and its
Subsidiaries taken as a whole. Holdings will, and will cause each of its
Subsidiaries to, diligently prosecute all pending applications filed in
connection with seeking or seeking to perfect the Intellectual Property rights
and take all other reasonable actions necessary for the protection and
maintenance of the Intellectual Property rights necessary or appropriate to the
business of Holdings or any Subsidiary of Holdings at all times from and after
the Initial Borrowing Date other than any such actions the failure of which, in
the aggregate, could not reasonably be expected to have a material adverse
effect on the performance, business, assets, nature of assets, liabilities,
operations, properties, condition (financial or otherwise) or prospects of
Holdings and its Subsidiaries taken as a whole.
7.15 Year 2000 Reporting. The Borrower ensures that any
reprogramming required to permit the proper functioning, in and following the
year 2000, of the Borrower's or any of its Subsidiaries' (i) computer systems
and (ii) equipment containing embedded microchips (including systems and
equipment supplied by others or with which the Borrower's systems interface) and
the testing of all such systems and equipment, as so reprogrammed, has been
completed, except insofar as the failure to do so will not have a material
adverse effect on the performance, business, assets, nature of assets,
liabilities, operations, properties, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole, and the
Borrower will notify the Administrative Agent and any Bank promptly upon
detecting any material failure to achieve year 2000 computer readiness. In
addition, the Borrower will provide the Administrative Agent and any Bank with
such information about its year 2000 computer readiness (including, without
limitation, information as to contingency plans, budgets and testing results) as
the Administrative Agent or such Bank shall reasonably request.
7.16 Registry. The Borrower hereby designates the
Administrative Agent to serve as the Borrower's agent, solely for purposes of
this Section 7.16, to maintain a register (the "Register") on which it will
record the Commitments from time to time of each of the Banks, the Loans made by
each of the Banks and each repayment in respect of the principal amount of the
Loans of each Bank. Failure to make any such recordation, or any error in such
recordation shall not affect the Borrower's obligations in respect of such
Loans. With respect to any Bank, the transfer of the Commitments of such Bank
and the rights to the principal of, and interest on, any Loan made pursuant to
such Commitments shall not be effective until such transfer is recorded on the
Register maintained by the Administrative Agent with respect to ownership of
such Commitments and Loans and prior to such recordation all amounts owing to
the transferor with respect to such Commitments and Loans shall remain owing to
the transferor. The registration of an assignment or transfer of all or part of
any Commitments and Loans shall be recorded by the Administrative Agent on the
Register only upon the acceptance by the Administrative Agent of a properly
executed and delivered assignment and assumption agreement pursuant to Section
13.04(b). Coincident with the delivery of such an assignment and assumption
agreement to the Administrative Agent for acceptance and registration of
assignment or transfer of all or part of a Loan, or as soon thereafter as
practicable, the assigning or transferor Bank shall surrender the Note
evidencing such Loan, and thereupon one or more new Notes in the same aggregate
principal amount shall be issued to the assigning or transferor Bank and/or the
new Bank. The Borrower agrees to indemnify the Administrative Agent from and
40
against any and all losses, claims, damages and liabilities of whatsoever nature
which may be imposed on, asserted against or incurred by the Administrative
Agent in performing its duties under this Section 7.16.
7.17 Further Actions. (a) Each Credit Party shall grant to the
Collateral Agent, for the benefit of the Secured Creditors, a security interest
in any Real Property owned or leased by any such Credit Party and any other
assets (exclusive of vehicles) of such Credit Party not already subject to a
Mortgage or other Security Document upon the acquisition thereof. Each Credit
Party shall take all actions requested by the Administrative Agent or the
Required Banks (including, without limitation, the execution of UCC-1 Financing
Statements, obtaining of mortgage policies, title surveys and real estate
appraisals satisfying the requirements of all applicable laws) in connection
with the granting and perfection of such security interests. Without limiting
the foregoing, each Credit Party specifically agrees to provide the Collateral
Agent with written notice advising the Collateral Agent that a Credit Party has
entered into a material Leasehold. Such notice shall be delivered in the manner
set forth in Section 13.03 of this Agreement, and shall be delivered within
three (3) Business Days of the execution of the Leasehold by the Credit Party.
The notice shall include a full and complete copy of the instrument creating the
Leasehold, together with all associated documents (including, without
limitation, a copy of the underlying lease for the real property, if
applicable), and a legal description of the Leasehold adequate to enable the
Collateral Agent to effectively file a UCC-1 Financing Statement covering the
fixtures, equipment and other Collateral located on or affixed to the Leasehold.
(b) The security interests required to be granted pursuant to
clause (a) above shall be granted pursuant to mortgages, deeds of trust and
security agreements, in each case satisfactory in form and substance to the
Administrative Agent and the Required Banks, which mortgages and security
agreements shall create valid and enforceable perfected security interests prior
to the rights of all third Persons and subject to no other Liens except
Permitted Liens. The mortgages and other instruments related thereto and
security agreements shall be duly recorded or filed in such manner and in such
places and at such times as are required by law to establish, perfect, preserve
and protect the Liens, in favor of the Collateral Agent for the benefit of the
Secured Creditors, required to be granted pursuant to such documents and all
taxes, fees and other charges payable in connection therewith shall be paid in
full by the Borrower. At the time of the execution and delivery of the
additional documents, the Borrower shall cause to be delivered to the Collateral
Agent such opinions of counsel, mortgage policies, title surveys, real estate
appraisals, certificates of title and other related documents as may be
reasonably requested by the Administrative Agent or the Required Banks to assure
themselves that this Section 7.17 has been complied with.
7.18 Concentration Account. On or prior to the Initial
Borrowing Date, Holdings shall, and shall have caused each of its Subsidiaries
(other than Residentclub) to, have duly authorized, executed and delivered a
Concentration Account Consent Letter in such form as approved by the Collateral
Agent (each as modified, amended or supplemented from time to time in accordance
with the terms thereof and hereof, a "Concentration Account Consent Letter")
with the Collateral Agent and the Concentration Account Bank, acknowledging that
the Concentration Account listed on a notice sent to the Collateral Agent at the
time of creation of such account maintained at the Concentration Account Bank is
41
under the exclusive dominion and control of the Collateral Agent and that all
moneys, instruments and other securities deposited in such Concentration Account
are to be held by the Concentration Account Bank for the benefit of the
Collateral Agent subject to the right of the account parties to utilize such
deposited amounts in accordance with the Concentration Account Consent Letter,
which, in any event, shall permit such utilization at all times when there does
not exist a Default. Each Credit Party represents and warrants that (i) it does
not now maintain, and will not in the future maintain, any other bank account
with any bank other than the applicable Concentration Account; provided,
however, that each such Credit Party shall be permitted to establish new bank
accounts pursuant to the terms of the Security Agreement so long as in all the
bank accounts of the Credit Parties other than the Concentration Account there
is not an amount greater than $100,000 in the aggregate at the end of any day.
7.19. Asset Transfer. On or prior to the Initial Borrowing
Date Holdings shall have transferred all of its assets (other than capital stock
of the Borrower) to the Borrower as a capital contribution.
7.20 Landlord Agreements; UCC Fixture Filings. Holdings
shall use its best efforts to furnish to the Collateral Agent, on or prior to
the Initial Borrowing Date, the following:
(a) agreements from landlords of Real Property leased by
Holdings or any of its Subsidiaries acknowledging, among other things,
the Collateral Agent's security interests in property maintained on the
leased premises and waiving its own security interest, if any, thereon
and the Collateral Agent's authority to obtain access to such property
and covering such other matters as the Collateral Agent may reasonably
request; and
(b) fully executed UCC-1 Financing Statements, in form and
substance satisfactory to the Required Banks (as may be amended,
modified or supplemented from time to time) covering all Collateral
which is or could be determined to be a fixture, and owned by Holdings
or any of its Subsidiaries, which UCC-1 Financing Statements are
necessary or desirable to perfect a first lien security interest in and
to all such Collateral in favor of the Collateral Agent for the benefit
of the Secured Creditors. The UCC-1 Financing Statements described in
the preceding sentence shall be recorded in the real property records
of the county in which such fixtures (or property which could be deemed
to be a fixture) are located.
Section 8. Negative Covenants. Each of Holdings and the
Borrower hereby covenants that on and after the Effective Date and until the
Total Commitment has terminated and the Loans and Notes, together with interest,
Fees and all other Obligations incurred hereunder and thereunder, are paid in
full:
8.01 Liens. Holdings will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets (real or personal, tangible or intangible) of
Holdings or any of its Subsidiaries, whether now owned or hereafter acquired, or
sell any such property or assets subject to an understanding or agreement,
contingent or otherwise, to repurchase such property or assets (including sales
of accounts receivable with recourse to Holdings or any of its Subsidiaries), or
42
assign any right to receive income or permit the filing of any financing
statement under the UCC or any other similar notice of Lien under any similar
recording or notice statute; provided that the provisions of this Section 8.01
shall not prevent Holdings or any of its Subsidiaries from creating, incurring,
assuming or permitting the existence of the following (liens described below are
herein referred to as "Permitted Liens"):
(i) inchoate Liens with respect to Holdings or any of its
Subsidiaries for taxes not yet due or Liens for taxes being contested
in good faith and by appropriate proceedings for which adequate
reserves have been established in accordance with generally accepted
accounting principles;
(ii) Liens in respect of property or assets of the Borrower or
any of its Subsidiaries imposed by law, which were incurred in the
ordinary course of business and do not secure Indebtedness for borrowed
money, such as carriers', warehousemen's, materialmen's, mechanics' and
landlords' liens and other similar Liens arising in the ordinary course
of business, and (x) which do not in the aggregate materially detract
from the value of Holdings' or any of its Subsidiaries' property or
assets or materially impair the use thereof in the operation of the
business of Holdings or its Subsidiaries or (y) which are being
contested in good faith by appropriate proceedings, which proceedings
have the effect of preventing the forfeiture or sale of the property or
assets subject to any such Lien;
(iii) Liens of the Borrower or its Subsidiaries in existence
on the Initial Borrowing Date which are listed, and the property
subject thereto described, on Schedule IX (which Schedule on or prior
to the Initial Borrowing Date and shall be in form and substance
satisfactory to the Administrative Agent and the Required Banks),
together with any refinancing, renewal or extension thereof, provided
that the outstanding principal balance of such Indebtedness secured
thereby is not increased above the amount outstanding immediately prior
to such refinancing, renewal or extension and the Liens do not extend
to any additional assets;
(iv) Liens created pursuant to the Security Documents;
(v) Liens on property of the Borrower and its Subsidiaries
subject to, and securing only, Capitalized Lease Obligations to the
extent such Capitalized Lease Obligations are permitted by Section
8.05(iii); provided that such Liens only serve to secure the payment of
Indebtedness arising under such Capitalized Lease Obligation and the
Lien encumbering the asset giving rise to the Capitalized Lease
Obligation does not encumber any other asset of Holdings or any of its
Subsidiaries;
(vi) Liens (other than any Lien imposed by ERISA) on property
of Holdings or any of its Subsidiaries incurred or deposits made in the
ordinary course of business in connection with (x) workers'
compensation, unemployment insurance and other types of social security
or (y) to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, government contracts, trade
contracts, performance and return-of-money bonds and other similar
43
obligations (exclusive of obligations for the payment of borrowed
money); provided that the aggregate amount of cash and the fair market
value of the property encumbered by Liens described in this clause
(vi)(y) shall not exceed $100,000;
(vii) Liens placed upon equipment or machinery used in the
ordinary course of the business of the Borrower or any of its
Subsidiaries prior to or within 60 days following the time of purchase
thereof by the Borrower or any of its Subsidiaries and improvements and
accretions thereto to secure Indebtedness incurred to pay all or a
portion of the purchase price thereof or any Indebtedness incurred to
refinance such Indebtedness, provided that (x) the aggregate principal
amount of all Indebtedness secured by Liens permitted by this clause
(vii) does not exceed at any one time outstanding the amounts permitted
pursuant to 8.05(iii) with respect to all machinery and equipment and
(y) in all events, the Lien encumbering the equipment or machinery so
acquired and improvements and accretions thereto does not encumber any
other asset of Holdings or any of its Subsidiaries;
(viii) Liens arising from precautionary UCC-1 financing
statement filings regarding operating leases entered into by Holdings
or any of its Subsidiaries in the ordinary course of business;
(ix) inchoate Liens (where there has been no execution or levy
and no pledge or delivery of collateral) arising from and out of
judgments or decrees in existence at such time not constituting an
Event of Default;
(x) Liens on property or assets acquired pursuant to a
Permitted Acquisition, or on property or assets of a Subsidiary of the
Borrower in existence at the time such Subsidiary is acquired pursuant
to a Permitted Acquisition, provided that (i) any Indebtedness that is
secured by such Liens is permitted to exist under Section 8.05, and
(ii) such Liens are not incurred in contemplation of such Permitted
Acquisition and do not attach to any other asset of the Borrower or any
of its Subsidiaries;
(xi) easements, rights-of-way, restrictions, encroachments and
other similar charges or encumbrances on the property of the Borrower
or any of its Subsidiaries arising in the ordinary course of business
and not materially interfering with the conduct of the business of the
Borrower or any such Subsidiary; and
(xii) Liens on assets of the Borrower securing Indebtedness
under Section 8.05(iii) so long as the fair market value of the assets
thereby do not exceed the Indebtedness.
8.02 Consolidation, Merger, Purchase or Sale of Assets, etc.
Holdings will not, and will not permit any of its Subsidiaries to, wind up,
liquidate or dissolve its affairs or enter into any transaction of merger or
consolidation, or convey, sell, lease or otherwise dispose of (or agree to do
any of the foregoing at any future time) all or any part of its property or
assets, or enter into any partnerships, joint ventures or sale-leaseback
44
transactions, or purchase or otherwise acquire (in one or a series of related
transactions) any part of the property or assets (other than purchases or other
acquisitions by Holdings or any of its Subsidiaries of inventory, materials and
equipment in the ordinary course of business) of any Person, except that:
(i) Capital Expenditures by Holdings and its Subsidiaries
shall be permitted to the extent not in violation of Section 8.08;
(ii) so long as there shall not exist a Default or Event of
Default (both before and after giving effect to such sale), Holdings
and its Subsidiaries may sell assets so long as the aggregate amount of
Net Sale Proceeds from such sales pursuant to this clause (ii) in any
one fiscal year does not exceed $500,000;
(iii) each of Holdings and its Subsidiaries may lease (as
lessee) real or personal property to the extent permitted by Sections
8.04 and 8.08;
(iv) investments may be made to the extent permitted by
Section 8.06;
(v) each of the Borrower and its Subsidiaries may make
sales of inventory in the ordinary course of business;
(vi) the Transaction shall be permitted as contemplated by
the Documents;
(vii) Holdings may transfer all its assets (other than capital
stock of the Borrower), including without limitation those assets
Holdings acquired in the Firstlink Merger, to the Borrower;
(viii) so long as no Default or Event of Default then exists
or would result therefrom, the Borrower may acquire all of the assets
or the capital stock of any Person (any such acquisition permitted by
this clause (viii), a "Permitted Acquisition"), provided, that (i) such
Person (or the assets so acquired) was, immediately prior to such
acquisition, engaged (or used) primarily in the Permitted Businesses,
(ii) the aggregate amount of cash paid and Holdings Common Stock issued
in connection with any one acquisition after the Effective Date shall
not exceed $2.5 million and in connection with all such acquisitions
after the Effective Date shall not exceed $10.0 million, (iii) the
Agent and the Required Banks shall be satisfied in their reasonable
discretion that the proposed Permitted Acquisition will not reasonably
likely result in materially increased liabilities (contingent or
otherwise) of Holdings or any of its Subsidiaries (including, without
limitation, tax, ERISA or environmental liabilities, (iv)
recalculations are made by the Borrower of compliance with the
covenants contained in Sections 8.08 through 8.13 inclusive and
compliance with the Borrowing Base requirements of Section 1.01, for
the Calculation Period (or as of the most recent month end, as the case
may be) on a pro forma basis (after giving effect to any additional
Indebtedness in connection with the Permitted Acquisition and the
Consolidated EBITDA of the Person or business, division or product
being acquired for the Calculation Period, such Consolidated EBITDA to
be calculated and verifiable in a manner acceptable to the
Administrative Agent, and such recalculations shall show that all such
covenants would have been complied with throughout the Calculation
Period on such pro forma basis, and (v) the Borrower in good faith
45
believes, based on calculations made by Holdings, on a pro forma basis
(as if the Calculation Period were the one-year period following the
date of the consummation of the respective Permitted Acquisition and
applying the principles contained in the immediately preceding
parenthetical) that the financial covenants contained in such Sections
8.08 through 8.13, inclusive, will continue to be met for the one year
period following the date of the consummation of the respective
Permitted Acquisition;
(ix) Residentclub may enter into any transaction otherwise
prohibited by this Section other than a transaction with Holdings or
any other Subsidiary of Holdings; and
(x) the Borrower may sell its equity interest in Residentclub
or may agree to sale of the assets of Residentclub.
To the extent the Required Banks waive the provisions of this Section 8.02 with
respect to the sale of any Collateral (to the extent the Required Banks are
permitted to waive such provisions in accordance with Section 13.12), or any
Collateral is sold as permitted by this Section 8.02, such Collateral shall be
sold free and clear of the Liens created by the Security Documents, and the
Administrative Agent and Collateral Agent shall be authorized to take any
actions deemed appropriate in order to effect the foregoing.
8.03 Dividends. Holdings will not, nor will Holdings permit
any of its Subsidiaries (other than Residentclub) to, declare or pay any
Dividends with respect to Holdings or any of its Subsidiaries, except that: (i)
any Subsidiary of the Borrower may pay Dividends to the Borrower or any
Wholly-Owned Subsidiary of the Borrower and (ii) so long as there shall exist no
Default or Event of Default (and after giving effect to such Dividends there
will exist no Default or Event of Default), the Borrower may pay cash Dividends
to Holdings for the purpose of paying, and all such proceeds are promptly used
by Holdings to pay its franchise taxes and other fees and expenses required to
maintain its corporate existence.
8.04 Leases. Holdings will not incur any expense (including,
without limitation, any property taxes paid as additional rent or lease
payments) under any agreement to rent or lease any real or personal property (or
any extension or renewal thereof) (excluding Capitalized Lease Obligations) and
Holdings will not permit the aggregate expense (including, without limitation,
any property taxes paid as additional rent or lease payments) incurred by
Holdings and its Subsidiaries (other than Residentclub) on a consolidated basis
under any agreement to rent or lease any real or personal property (or any
extension or renewal thereof) (excluding Capitalized Lease Obligations and
excluding the Borrower's headquarters lease to the extent the aggregate expense
with respect thereto does not exceed the amounts required under the lease with
respect thereto as in effect on the Effective Date) to exceed $200,000.
8.05 Indebtedness. Holdings will not and will not permit any
of its Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and the
other Credit Documents;
46
(ii) Indebtedness of the Borrower or any of its Subsidiaries
under any Interest Rate Protection or Other Hedging Agreement or under
any similar type of agreement to the extent such is entered into to
satisfy the requirements of Section 7.11;
(iii) Indebtedness of the Borrower and its Subsidiaries
evidenced by Capitalized Lease Obligations to the extent permitted
pursuant to Section 8.08 and Indebtedness secured by Liens permitted by
Section 8.01(vii) and other Indebtedness incurred in the ordinary
course of business; provided that the aggregate amount of Indebtedness
evidenced by Capitalized Lease Obligations under all Capital Leases
when aggregated with the amount of Indebtedness secured by Liens
permitted by Section 8.01(vii) and other Indebtedness incurred in the
ordinary course of business and outstanding at any one time shall not
exceed $200,000;
(iv) Existing Indebtedness of the Borrower or any of its
Subsidiaries listed on Schedule VII but no refinancing, renewal,
extension or increases in the principal amount thereof; and
(v) Indebtedness constituting intercompany loans to Resi-
dentclub to the extent permitted by Section 8.06(x).
8.06 Advances, Investments and Loans. Holdings will not, and
will not permit any of its Subsidiaries (other than Residentclub) to, directly
or indirectly lend money or credit or make advances to any Person, or purchase
or acquire any stock, obligations or securities of, or any other interest in, or
make any capital contribution to, any other Person, or purchase or own a futures
contract or otherwise become liable for the purchase or sale of currency or
other commodities at a future date in the nature of a futures contract, or hold
any cash or Cash Equivalents, except that the following shall be permitted:
(i) the Borrower and its Subsidiaries may acquire and hold
receivables owing to any of them, if created or acquired in the
ordinary course of business and payable or dischargeable in accordance
with customary terms;
(ii) Holdings and its Subsidiaries may acquire and hold cash
and Cash Equivalents; provided that (I) all such cash or Cash
Equivalents shall be held by Holdings or such Subsidiary in the
Concentration Account in accordance with the terms of the Concentration
Account Consent Letter; provided further, that at any time that any
Revolving Loans are outstanding, the aggregate amount of cash and Cash
Equivalents permitted to be held by the Holdings and its Subsidiaries
shall not exceed (exclusive of amounts held in the Cash Collateral
Account pursuant to the Cash Collateral Agreement) $100,000 for any
period of three consecutive Business Days;
(iii) the Borrower may enter into interest rate protection
agreements to the extent such is entered into to satisfy the
requirements of Section 7.11;
(iv) the Borrower and its Subsidiaries may make Capital
Expenditures to the extent permitted by Section 8.08;
47
(v) the Transaction shall be permitted in accordance with the
provisions of Section 4;
(vi) the Borrower and its Subsidiaries may endorse negotiable
instruments for collection in the ordinary course of business;
(vii) the Borrower and its Subsidiaries may make loans and
advances in the ordinary course of business consistent with past
practices to their respective employees for moving, travel and
emergency expenses and other similar expenses, so long as the aggregate
principal amount thereof at any one time outstanding (determined
without regard to any write-downs or write-offs of such loans and
advances) shall not exceed $100,000;
(viii) Dividends may be paid to the extent permitted by
Section 8.03;
(ix) Transactions permitted in accordance with Section 8.02;
and
(x) The Borrower may make loans to Residentclub in an
aggregate amount not to exceed $2,000,000; provided, that (i) such loan
is evidenced by an intercompany note in form and substance satisfactory
to the Agent and the Required Banks and (ii) such intercompany note is
pledged to the Collateral Agent for the benefit of the Banks.
8.07 Transactions with Affiliates. Holdings will not, and will
not permit any of its Subsidiaries to, enter into any transaction or series of
related transactions, whether or not in the ordinary course of business, with
any Affiliate of Holdings or any of its Subsidiaries unless such transaction or
series of related transactions is in writing and on terms that are no less
favorable to Holdings or such Subsidiary, as the case may be, than those that
would be available in a comparable transaction in arm's-length dealings with an
unrelated third party; except that (i) Holdings and its Subsidiaries may effect
the Transaction, (ii) loans and advances made in accordance with Section
8.06(vii) shall be permitted, (iii) Holdings or the Borrower may pay customary
fees to non-officer directors of Holdings; and (iv) Holdings and its
Subsidiaries may enter into the Employment Agreements. In no event may any
management, closing or similar fees be paid or payable by Holdings or any of its
Subsidiaries to any Affiliate of Holdings or any of its Subsidiaries and in no
event may any transactions be effected between Residentclub and Holdings or any
of other Subsidiary of Holdings other than loans to Residentclub permitted in
accordance with Section 8.05.
8.08 Capital Expenditures. Holdings will not and will not
permit any of its Subsidiaries (other than Residentclub) to, make any
expenditure for fixed or capital assets (including, without limitation,
expenditures for maintenance and repairs which should be capitalized in
accordance with generally accepted accounting principles and including
Capitalized Lease Obligations (collectively, "Capital Expenditures"), except
that the Borrower and its Subsidiaries may make Capital Expenditures so long as
for each fiscal quarter of Holdings the aggregate amount of Capital Expenditures
related to Cable Passings during such quarter divided by the amount of Cable
Passings newly constructed during such fiscal quarter and in place on the last
day of such quarter shall not be more than $450 and the aggregate amount of
Capital Expenditures related to Telephony Passings during such quarter divided
48
by the amount of Telephony Passings newly constructed during such fiscal quarter
and in place on the first day of such quarter shall not be more than $700 and
the aggregate amount of Capital Expenditures related to Internet Passings during
such quarter on all Internet Passings shall not exceed $200,000 for fiscal
quarters ending in the year 2000 and shall not exceed $250,000 for fiscal
quarters ending thereafter.
8.09 Fixed Charge Coverage Ratio. Holdings will not permit the
Fixed Charge Coverage Ratio for any period of four consecutive fiscal quarters
ending on the last day of a fiscal quarter of Holdings, in each case taken as
one accounting period, to be less than the ratio set forth below opposite such
date:
Fiscal Quarter Ended Ratio
-------------------- -----
March 31, 2003 and thereafter 1.10:1.00
8.10 Interest Coverage. (A) Interest Coverage Ratio. Holdings
will not permit the ratio of its Consolidated EBITDA to its Net Consolidated
Interest Expense for any period of four consecutive fiscal quarters ending on
the last day of a fiscal quarter of Holdings, in each case taken as one
accounting period, to be less than the ratio set forth opposite such date below:
Fiscal Quarter Ended Ratio
-------------------- -----
March 31, 2002 1.00:1.00
June 30, 2002 1.25:1.00
September 30, 2002 1.25:1.00
December 31, 2002 1.75:1.00
March 31, 2003 2.25:1.00
June 30, 2003 2.25:1.00
September 30, 2003 2.75:1.00
December 31, 2003 2.75:1.00
March 31, 2004 3.25:1.00
June 30, 2004 3.25:1.00
September 30, 2004 3.25:1.00
December 31, 2004 3.25:1.00
March 31, 2005 and thereafter 3.50:1.00
(B) Adjusted Interest Coverage. Holdings will not permit the
ratio of its Adjusted Consolidated EBITDA to its Net Consolidated Interest
Expense for any period of four consecutive fiscal quarters ending on the last
day of a fiscal quarter of Holdings (or, if shorter, the period beginning on the
Initial Borrowing Date and ending on the last day of a fiscal quarter of
Holdings ended after the Initial Borrowing Date), in each case taken as one
accounting period, to be less than the ratio set forth opposite such date below:
49
Fiscal Quarter Ended Ratio
-------------------- -----
September 30, 2000 1.50:1.00
December 31, 2000 1.50:1.00
March 31, 2001 1.75:1.00
June 30, 2001 1.75:1.00
September 30, 2001 2.00:1.00
December 31, 2001 2.00:1.00
March 31, 2002 2.50:1.00
June 30, 2002 2.50:1.00
September 30, 2002 2.50:1.00
December 31, 2002 2.50:1.00
8.11 Leverage Ratios. (A) Consolidated Indebtedness to
Annualized Consolidated EBITDA. Holdings will not permit the ratio of
Consolidated Indebtedness as at the end of any fiscal quarter ended on a date
set forth below to Annualized Consolidated EBITDA for such fiscal quarter, in
each case taken as one accounting period, ending on a date set forth below to be
greater than the ratio set forth opposite such date below:
Fiscal Quarter Ended Ratio
-------------------- -----
March 31, 2002 13.00:1.00
June 30, 2002 9.00:1.00
September 30, 2002 9.00:1.00
December 31, 2002 7.00:1.00
March 31, 2003 5.50:1.00
June 30, 2003 5.50:1.00
September 30, 2003 4.00:1.00
December 31, 2003 4.00:1.00
March 31, 2004 3.00:1.00
June 30, 2004 3.00:1.00
September 30, 2004 3.00:1.00
December 31, 2004 3.00:1.00
March 31, 2005 and thereafter 2.00:1.00
(B) Consolidated Indebtedness to Annualized Adjusted
Consolidated EBITDA. Holdings will not permit the ratio of Consolidated
Indebtedness as at the end of any fiscal quarter ended on a date set forth below
to Annualized Adjusted Consolidated EBITDA for such fiscal quarter, in each case
taken as one accounting period, ending on a date set forth below to be greater
than the ratio set forth opposite such date:
Fiscal Quarter Ended Ratio
-------------------- -----
March 31, 2001 8.00:1.00
June 30, 2001 7.50:1.00
September 30, 2001 6.50:1.00
December 31, 2001 6.50:1.00
March 31, 2002 5.00:1.00
June 30, 2002 5.00:1.00
50
September 30, 2002 4.00:1.00
December 31, 2002 4.00:1.00
8.12 Corporate Overhead Expenditures. (a) Holdings will not,
and will not permit any of its Subsidiaries (other than Residentclub) to, make
any Corporate Overhead Expenditures, except that the Borrower and its
Subsidiaries may make Corporate Overhead Expenditures so long as the aggregate
amount thereof does not exceed $1,200,000 during any fiscal quarter.
8.13 Debt Base. Holdings will not permit the Consolidated
Indebtedness of Holdings and its Subsidiaries (other than Residentclub) to
exceed the Debt Base.
8.14 Limitation on Voluntary Payments and Modification;
Limitation on Modifications of Certificate of Incorporation, By-Laws and Certain
Other Agreements; etc. Holdings will not, and will not permit any of its
Subsidiaries (other than Residentclub) to:
(i) make (or give any notice in respect of) any voluntary or
optional payment or prepayment on or redemption (including pursuant to
any change of control provision) or acquisition for value of
(including, without limitation, by way of depositing with the trustee
with respect thereto money or securities before due for the purpose of
paying when due), any Existing Indebtedness;
(ii) amend or modify, or permit the amendment or modification
of, any provision of the Documents, the Existing Indebtedness, or any
agreement relating to any of the foregoing in any manner that would
adversely affect the Banks;
(iii) amend, modify or change its Certificate of Incorporation
(including, without limitation, by the filing or modification of any
certificate of designation) or By-Laws or any agreement entered into by
it, with respect to its capital stock, or enter into any new agreement
with respect to its capital stock in any manner that would adversely
affect the Banks;
(iv) amend, modify or change, terminate, or enter into any
new Shareholders' Agreement in any manner that would adversely affect
the Banks;
(v) amend, modify, change or terminate any Tax Sharing
Agreement or enter into any new Tax Sharing Agreement in any manner
that would adversely affect the Banks; or
(vi) amend, modify or change, or enter into any new Management
Agreement, Employee Benefit Plan or Employment Agreement except if the
aggregate cost to Holdings and its Subsidiaries as a result of such
amendments, modifications, changes to such plans and agreements and new
plans and agreements is not reasonably likely to have a material
adverse effect on the performance, business, property, assets, nature
of assets, liabilities, condition (financial or otherwise) or prospects
of Holdings and its Subsidiaries taken as a whole.
51
8.15 Limitation on Certain Restrictions on Subsidiaries.
Holdings will not, and will not permit any of its Subsidiaries (other than
Residentclub) to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Subsidiary of Holdings to (i) pay dividends or make any other distributions on
its capital stock to Holdings or any Subsidiary of Holdings or any other
interest or participation in its profits owned by Holdings or any Subsidiary of
Holdings, or pay any Indebtedness owed to Holdings or a Subsidiary of Holdings,
(ii) make loans or advances to Holdings or any of Holdings' Subsidiaries or
(iii) transfer any of its properties or assets to Holdings, except for such
encumbrances or restrictions existing on the Effective Date or under or by
reason of (w) applicable law, (x) this Agreement and the other Credit Documents
and (y) customary provisions restricting subletting or assignments of any lease
governing a leasehold interest of Holdings or a Subsidiary of Holdings or (z)
the asset transfer restrictions imposed by Indebtedness permitted pursuant to
Section 8.05(iii) hereof.
8.16 Limitation on Issuance of Capital Stock. (a) Holdings
will not permit any of its Subsidiaries to issue any capital stock (including by
way of sales of treasury stock) or any options or warrants to purchase, or
securities convertible into, capital stock, except (i) for transfers and
replacements of then outstanding shares, (ii) for stock splits, stock dividends
and similar issuances which do not decrease the percentage ownership of any
person in any class of the capital stock of Holdings or such Subsidiary and
(iii) issuances of capital stock by Residentclub. Any stock issued as permitted
by this Section 8.16, if owned by Holdings or any of Holdings' Subsidiaries,
shall be immediately pledged as Collateral and delivered pursuant to the Pledge
Agreement.
(b) Holdings will not issue any capital stock except for
issuances of common stock the proceeds of which are applied in accordance with
Section 3.02.
8.17 Business. Holdings will not conduct any business other
than holding the stock of the Borrower and Holdings will not permit any of its
Subsidiaries to engage (directly or indirectly) in any business other than a
Permitted Business.
8.18 Limitation on Creation of Subsidiaries. Holdings will
not, and will not permit any of its Subsidiaries to, establish, create or
acquire any new Subsidiary except in connection with a Permitted Acquisition
effected in accordance with Section 8.02.
8.19 Concentration Account. Holdings will not, and will not
permit any of its Subsidiaries to, directly or indirectly, open, maintain or
otherwise have any checking, savings or other deposit accounts at any bank or
other financial institution where cash or Cash Equivalents is or may be
deposited or maintained with any Person, other than the Concentration Account.
Section 9. Events of Default. Upon the occurrence of any of
the following specified events (each an "Event of Default"):
9.01 Payments. The Borrower shall (i) default in the payment
when due of any principal of any Loan or any Note or (ii) default, and such
default shall continue unremedied for three or more Business Days, in the
52
payment when due of any interest on any Loan or Note, or any Fees or any other
amounts owing by it hereunder or thereunder; or
9.02 Representations, etc. Any representation, warranty or
statement made by any Credit Party herein or in any other Credit Document or in
any certificate delivered pursuant hereto or thereto shall prove to be untrue in
any material respect on the date as of which made or deemed made; or
9.03 Covenants. Any Credit Party shall (i) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 7.01(g)(i), 7.08, 7.11, 7.16, 7.17 or 8, or (ii) default in the due
performance or observance by it of any other term, covenant or agreement
contained in this Agreement, and such default shall continue unremedied for a
period of 30 days after written notice thereof to the Borrower by the
Administrative Agent or any Bank; or
9.04 Default Under Other Agreements. Holdings or any of its
Subsidiaries shall (i) default in any payment of any Indebtedness (other than
the Indebtedness referred to in Section 9.01) beyond the period of grace (not to
exceed 10 days), if any, provided in the instrument or agreement under which
such Indebtedness was created, (ii) default in the observance or performance of
any agreement or condition relating to any Indebtedness (other than the
Indebtedness referred to in Section 9.01) 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 a trustee or agent on behalf of such holder or holders) to cause (determined
without regard to whether any notice is required), any Indebtedness to become
due prior to its stated maturity and such default shall not have been cured or
waived, or (iii) any Indebtedness (other than the Indebtedness referred to in
Section 9.01) of Holdings or any of its Subsidiaries shall be declared to be due
and payable, or required to be prepaid other than by a regularly scheduled
required prepayment, prior to the stated maturity thereof; provided that it
shall not constitute an Event of Default pursuant to this Section 9.04 unless
the aggregate amount of all Indebtedness referred to in the preceding clauses
(i) through (iii) above exceeds $500,000 at any one time; or
9.05 Bankruptcy, etc. Holdings or any of its Subsidiaries
shall commence a voluntary case concerning itself under Title 11 of the United
States Code entitled "Bankruptcy," as now or hereafter in effect, or any
successor thereto (the "Bankruptcy Code"); or an involuntary case is commenced
against Holdings or any of its Subsidiaries and the petition is not controverted
within 10 days, or is not dismissed or discharged, within 60 days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of the property of
Holdings or any of its Subsidiaries, commences any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether now or
hereafter in effect relating to Holdings or any of its Subsidiaries, or there is
commenced against Holdings or any of its Subsidiaries any such proceeding which
remains undismissed or undischarged for a period of 60 days, or Holdings or any
53
of its Subsidiaries is adjudicated insolvent or bankrupt; or any order of relief
or other order approving any such case or proceeding is entered; or Holdings or
any of its Subsidiaries suffers any appointment of any custodian or the like for
it or any substantial part of its property to continue undischarged or unstayed
for a period of 60 days; or Holdings or any of its Subsidiaries makes a general
assignment for the benefit of creditors; or any corporate action is taken by
Holdings or any of its Subsidiaries for the purpose of effecting any of the
foregoing; or
9.06 ERISA. (a) Any Plan shall fail to satisfy the minimum
funding standard required for any plan year or part thereof under Section 412 of
the Code or Section 302 of ERISA or a waiver of such standard or extension of
any amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, a Reportable Event shall have occurred, a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph
(b)(1) thereof) and an event described in subsection .62, .63, .64, .65, .66,
.67 or .68 of PBGC Regulation 4043 shall be reasonably expected to occur with
respect to such Plan within the following 30 days, any Plan which is subject to
Title IV of ERISA shall have had or is likely to have a trustee appointed to
administer such Plan, any Plan which is subject to Title IV of ERISA is, shall
have been or is likely to be terminated or to be the subject of termination
proceedings under ERISA, any Plan shall have an Unfunded Current Liability, a
contribution required to be made with respect to a Plan has not been timely
made, Holdings or any Subsidiary of Holdings or any ERISA Affiliate has incurred
or is likely to incur any liability to or on account of a Plan or under Section
409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or
Section 401(a)(29), 4971 or 4975 of the Code or on account of a group health
plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code)
under Section 4980B of the Code, or Holdings or any Subsidiary of Holdings has
incurred or is likely to incur liabilities pursuant to one or more employee
welfare benefit plans (as defined in Section 3(1) of ERISA) that provide
benefits to retired employees or other former employees (other than as required
by Section 601 of ERISA) or Plans, a "default," within the meaning of Section
4219(c)(5) of ERISA, shall occur with respect to any Plan; any applicable law,
rule or regulation is adopted, changed or interpreted, or the interpretation or
administration thereof is changed, in each case after the date hereof, by any
governmental authority or agency or by any court (a "Change in Law"), or, as a
result of a Change in Law, an event occurs following a Change in Law, with
respect to or otherwise affecting any Plan; (b) there shall result from any such
event or events the imposition of a lien, the granting of a security interest,
or a liability or a material risk of incurring a liability; and (c) such lien,
security interest or liability, individually, and/or in the aggregate, in the
opinion of the Required Banks, has had, or could reasonably be expected to have,
a material adverse effect upon the business, operations, condition (financial or
otherwise) or prospects of Holdings or any Subsidiary of Holdings; or
9.07 Security Documents. At any time after the execution and
delivery thereof, any of the Security Documents shall cease to be in full force
and effect or shall cease to give the Collateral Agent for the benefit of the
Secured Creditors the Liens, rights, powers and privileges purported to be
created thereby (including, without limitation, a perfected security interest
in, and Lien on, all of the Collateral), in favor of the Collateral Agent,
superior to and prior to the rights of all third Persons (except as permitted by
Section 6.11), and subject to no other Liens (except as permitted by Section
54
6.11), or any Credit Party shall default in the due performance or observance of
any term, covenant or agreement on its part to be performed or observed pursuant
to any of the Security Documents and such default shall continue beyond any
grace period specifically applicable thereto pursuant to the terms of such
Security Document; or
9.08 Guaranties. At any time after the execution and delivery
thereof, any Guaranty or any provision thereof shall cease to be in full force
or effect as to any Guarantor, or any Guarantor or any Person acting by or on
behalf of any Guarantor shall deny or disaffirm such Guarantor's obligations
under the respective Guaranty, or any Guarantor shall default in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to the respective Guaranty and such default shall
continue beyond any grace period specifically applicable thereto; or
9.09 Judgments. One or more judgments or decrees shall be
entered against Holdings or any of its Subsidiaries involving in the aggregate
for Holdings and its Subsidiaries a liability (not paid or fully covered by a
reputable insurance company) in excess of $500,000 for all such judgments and
decrees and any such judgments or decrees shall not be satisfied, vacated,
discharged or stayed or bonded pending appeal for any period of 60 consecutive
days; or
9.10 Change in Control. There shall be a Change in Control;
-----------------
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent, upon the written request of
the Required Banks, shall by written notice to the Borrower, take any or all of
the following actions, without prejudice to the rights of the Agents, any Bank
or the holder of any Note to enforce its claims against any Credit Party
(provided that, if an Event of Default specified in Section 9.05 shall occur
with respect to the Borrower, the result which would occur upon the giving of
written notice by the Administrative Agent to the Borrower as specified in
clauses (i) and (ii) below shall occur automatically without the giving of any
such notice): (i) declare the Total Commitment terminated, whereupon all
Commitments of each Bank shall forthwith terminate immediately and any Fees
shall forthwith become due and payable without any other notice of any kind;
(ii) declare the principal of and any accrued interest in respect of all Loans
and the Notes and all Obligations owing hereunder and thereunder to be,
whereupon the same shall become, forthwith due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
each Credit Party; (iii) exercise any rights or remedies under any of the
Guaranties; and (iv) enforce, as Collateral Agent, all of the Liens and security
interests created pursuant to the Security Documents.
Section 10. Definitions and Accounting Terms.
--------------------------------
10.01 Defined Terms. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
"Acquisitions" shall mean (i) the U.S. Online Acquisition and
(ii) the GMAC Acquisition.
55
"Adjusted Consolidated EBITDA" for any period shall mean
Consolidated EBITDA adjusted by adding thereto the amount of Corporate Overhead
Expenditures for such period.
"Adjusted Consolidated Net Income" for any period shall mean
Consolidated Net Income for such period plus the sum of the amount of all net
non-cash charges (including, without limitation, depreciation, amortization,
deferred tax expense, non-cash interest expense and other non-cash charges)
included in arriving at Consolidated Net Income for such period less the sum of
the amount of all net non-cash gains or losses (exclusive of items reflected in
Adjusted Working Capital) and gains or losses from sales of assets (other than
sales of inventory in the ordinary course of business) included in arriving at
Consolidated Net Income for such period.
"Adjusted Working Capital" shall mean Consolidated Current
Assets (excluding cash and Cash Equivalents) minus Consolidated Current
Liabilities.
"Administrative Agent" shall mean Paribas in its capacity as
Administrative Agent for the Banks hereunder, and shall include any successor to
the Administrative Agent appointed pursuant to Section 11.09.
"Affected Eurodollar Loans" shall have the meaning provided in
Section 3.02(B)(b).
"Affiliate" shall mean, with respect to any Person, any other
Person directly or indirectly controlling (including but not limited to all
directors and officers of such Person), controlled by, or under direct or
indirect common control with, such Person; provided, however, that for purposes
of Section 4.05 and 8.07, an Affiliate of Holdings shall include any Person that
directly or indirectly (including through limited partner or general partner
interests) owns more than 5% of any class of the capital stock of Holdings and
for all purposes of this Agreement, neither the Agents, the Collateral Agent,
any Bank or any of their respective Affiliates, shall be considered an Affiliate
of Holdings or the Borrower or any of its Subsidiaries. A Person shall be deemed
to control another Person if such Person possesses, directly or indirectly, the
power to direct or cause the direction of the management and policies of such
other Person, whether through the ownership of voting securities, by contract or
otherwise.
"Affiliate Contracts" shall have the meaning provided in
Section 4.05.
"Agents" shall mean each of the Administrative Agent,
Collateral Agent, Syndication Agent and Documentation Agent.
"Agreement" shall mean this Credit Agreement, as modified,
supplemented or amended from time to time.
"Annualized Adjusted Consolidated EBITDA" for any period shall
mean Adjusted Consolidated EBITDA for such period times a fraction the numerator
of which is four and the denominator which is the number of fiscal quarters of
Holdings and its Subsidiaries in such period.
56
"Annualized Consolidated EBITDA" for any period shall mean
Consolidated EBITDA for such period times a fraction the numerator of which is
four and the denominator which is the number of fiscal quarters of Holdings and
its Subsidiaries in such period.
"Applicable Commitment Commission Percentage" shall mean, for
any day, a percentage per annum equal to (i) if the Unutilized Commitment on
such day is greater than or equal to 662/3% of the Total Commitment (as of the
Effective Date), 1.25%, (ii) if the Unutilized Commitment on such day is less
than 662/3% of the Total Commitment (as of the Effective Date) and greater than
or equal to 331/3% of the Total Commitment (as of the Effective Date), 1.00%,
and (iii) if the Unutilized Commitment on such day is less than 331/3% of the
Total Commitment (as of the Effective Date), 0.50% of the Unutilized Commitment.
"Applicable Margin" shall mean a percentage per annum equal
to: (i) in the case of Loans which are maintained as Base Rate Loans, 2.75% less
the applicable Leverage Reduction Discount, if any, and (ii) in the case of
Loans which are maintained as Eurodollar Loans, 3.75% less the applicable
Leverage Reduction Discount, if any.
"Bank" shall mean each financial institution listed on
Schedule I, as well as any institution which becomes a "Bank" hereunder pursuant
to Section 13.04.
"Bank Default" shall mean (i) the refusal (which has not been
retracted) of a Bank to make available its portion of any Borrowing or (ii) a
Bank having notified in writing the Borrower and/or the Administrative Agent
that it does not intend to comply with its obligations under Section 1.01,
including in either case as a result of any takeover of such Bank by any
regulatory authority or agency.
"Bankruptcy Code" shall have the meaning provided in Section
9.05.
"Base Rate" shall mean the higher of (i) 1/2 of 1% in excess
of the Federal Funds Rate and (ii) the Prime Lending Rate.
"Base Rate Loan" shall mean any Loan designated or deemed
designated as such by the Borrower at the time of the incurrence thereof or
conversion thereto.
"Borrower" shall have the meaning provided in the first
paragraph of this Agreement.
"Borrowing" shall mean the borrowing of one Type of Loan from
all the Banks having Commitments on a pro rata basis on a given date (or
resulting from a conversion or conversions on such date) having in the case of
Eurodollar Loans the same Interest Period; provided that Base Rate Loans
incurred pursuant to Section 1.10(b) shall be considered part of the related
Borrowing of Eurodollar Loans.
"Borrowing Base" shall mean, as at any date on which the
amount thereof is being determined, an amount equal to the sum of (x) $675
multiplied by the number of Cable Television Subscribers and (y) $450 multiplied
by the number of Telephony Subscribers, less (z) any outstanding Indebtedness
(exclusive of Loans).
57
"Borrowing Base Certificate" shall have the meaning provided
in Section 7.01(k).
"Borrowing Base Deficiency" shall mean, at any time, the
amount, if any, by which the aggregate outstanding principal amount of Loans at
such time exceeds the Borrowing Base then in effect.
"Business Day" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day except Saturday, Sunday and any day which
shall be in New York City a legal holiday or a day on which banking institutions
are authorized or required by law or other government action to close and (ii)
with respect to all notices and determinations in connection with, and payments
of principal and interest on, Eurodollar Loans, any day which is a Business Day
described in clause (i) above and which is also a day for trading by and between
banks in the New York interbank Eurodollar market.
"Cable Passings" shall mean the number of dwelling units which
the Borrower and its Subsidiaries (other than Residentclub) has the opportunity
to provide cable television services to pursuant to the ▇▇▇ Agreements whether
or not all such dwelling units subscribe to such cable television services.
"Cable Television Debt" shall mean the following:
Period Amount
Closing Date - December 31, 2001 $675
January 1, 2002 - December 31, 2002 $600
January 1, 2003 - December 31, 2003 $500
Thereafter $400
"Cable Television Subscribers" shall mean the number of
dwelling units which the Borrower and its Subsidiaries (other than Residentclub)
provide cable television service (as evidenced by a written agreement), who are
not more than 60 days past due on the payment of their cable television ▇▇▇▇.
"Calculation Period" shall mean the period of four consecutive
fiscal quarters (taken as one accounting period) most recently ended prior to
the date of a Permitted Acquisition.
"Capital Lease," as applied to any Person, shall mean any
lease of any property (whether real, personal or mixed) by that Person as lessee
which, in conformity with generally accepted accounting principles, is accounted
for as a capital lease on the balance sheet of that Person.
"Capitalized Lease Obligations" of any Person shall mean all
rental obligations under Capital Leases, in each case taken at the amount
thereof accounted for as Indebtedness in accordance with such principles.
"Cash Equivalents" shall mean, as to any Person, (i)
securities issued or directly and fully guaranteed or insured by the United
States or any agency or instrumentality thereof (provided that the full faith
and credit of the United States is pledged in support thereof) having maturities
58
of not more than six months from the date of acquisition, (ii) time deposits and
certificates of deposit of any commercial bank organized under the laws of the
United States, any State thereof or the District of Columbia having, or which is
the principal banking subsidiary of a bank holding company organized under the
laws of the United States, any State thereof, or the District of Columbia
having, capital, surplus and undivided profits aggregating in excess of
$200,000,000 and having a long-term unsecured debt rating of at least "A" or the
equivalent thereof from Standard & Poor's Corporation ("S&P") or "A2" or the
equivalent thereof from ▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's"), with
maturities of not more than six months from the date of acquisition by such
Person, (iii) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (i) above entered into
with any bank meeting the qualifications specified in clause (ii) above, (iv)
commercial paper issued by any Person incorporated in the United States rated at
least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent
thereof by Moody's and in each case maturing not more than six months after the
date of acquisition by such Person, (v) investments in money market funds
substantially all of whose assets are comprised of securities of the types
described in clauses (i) through (iv) above.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time to
time, 42 U.S.C. ss. 9601 et seq.
"Change in Control" means the occurrence of one or more of the
following: (i) Holdings shall cease to directly own 100% on a fully diluted
basis of the outstanding capital stock of the Borrower, (ii) the Borrower shall
cease to own 100% of all of the equity of its Subsidiaries (other than
Residentclub), (iii) any Person, entity or "group" (within the meaning of
Section 13(d) or 14(d) of the Securities Exchange Act) shall have acquired
beneficial ownership of 51% or more of any outstanding class of capital stock of
Holdings, having ordinary voting power in the election of directors or (iv) the
Board of Directors of Holdings shall cease to consist of Continuing Directors.
"Change in Law" shall have the meaning provided in Section
9.06.
"Claims" shall have the meaning provided in the definition of
"Environmental Claims."
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and the rulings
issued thereunder. Section references to the Code are to the Code, as in effect
at the date of this Agreement, and to any subsequent provision of the Code,
amendatory thereof, supplemental thereto or substituted therefor.
"Collateral" shall mean all property (whether real or
personal) with respect to which any security interests have been granted (or
purport to be granted) pursuant to any Security Document, including, without
limitation, all Pledge Agreement Collateral, all Security Agreement Collateral
and all cash and Cash Equivalents delivered as collateral pursuant to this
Agreement or any other Credit Document.
59
"Collateral Agent" shall mean the Administrative Agent acting
as collateral agent for the Secured Creditors pursuant to the Security
Documents.
"Collective Bargaining Agreements" shall have the meaning
provided in Section 4.05.
"Commitment" shall mean, for each Bank, the amount set forth
opposite such Bank's name on Schedule I hereto directly below the column
entitled "Commitment," as same may be (x) reduced or terminated from time to
time pursuant to Section 2.02, 2.03, 3.02 and/or 9 or (y) adjusted from time to
time as a result of assignments to or from such Bank pursuant to Section 1.12 or
13.04.
"Commitment Commission" shall have the meaning provided in
Section 2.01(a).
"Concentration Account" shall mean a separate account which
shall be established and maintained with the Concentration Account Bank for the
benefit of the Secured Creditors by Holdings and each of its Subsidiaries (other
than Residentclub) and in which the Collateral Agent has a security interest
pursuant to the Concentration Account Consent Letter.
"Concentration Account Bank" shall mean Norwest Bank Texas, NA
or such other bank that may become a Concentration Account Bank in accordance
with the provisions of the Security Agreement.
"Concentration Account Consent Letter" shall have the meaning
provided in Section 7.18.
"Consolidated Current Assets" shall mean the consolidated
current assets of the Holdings and its Subsidiaries (other than Residentclub).
"Consolidated Current Liabilities" shall mean the consolidated
current liabilities of Holdings and its Subsidiaries (other than Residentclub),
but excluding the current portion of any long-term Indebtedness which would
otherwise be included therein.
"Consolidated EBIT" shall mean, for any period, the
Consolidated Net Income before interest income, Consolidated Interest Expense
and provision for taxes and without giving effect to any extraordinary gains or
losses or gains or losses from sales of assets (other than inventory sold in the
ordinary course of business).
"Consolidated EBITDA" for any period shall mean Consolidated
EBIT, adjusted by adding thereto the amount of all amortization of intangibles
and depreciation that were deducted in arriving at Consolidated Net Income for
such period.
"Consolidated Indebtedness" shall mean, at any time, all
Indebtedness of Holdings and its Subsidiaries (other than Residentclub)
determined on a consolidated basis (excluding all Indebtedness of the type
described in clause (vii) of the definition thereof, except to the extent
amounts are owing with respect thereto upon the termination of the respective
agreement constituting such Indebtedness) plus any original issue discount
attributable to such Indebtedness.
60
"Consolidated Interest Expense" shall mean, for any period,
the total consolidated cash interest expense of Holdings and its Subsidiaries
(other than Residentclub) for such period (calculated without regard to any
limitations on the payment thereof) payable during such period in respect of all
Indebtedness of Holdings and its Subsidiaries (other than Residentclub), on a
consolidated basis, for such period (including, without duplication, that
portion of Capitalized Lease Obligations of Holdings and its Subsidiaries (other
than Residentclub) representing the interest factor for such period and all
commitment and similar fees payable with respect to any Indebtedness).
"Consolidated Net Income" shall mean, for any period, net
income of Holdings and its Subsidiaries (other than Residentclub) for such
period determined on a consolidated basis (after provision for taxes); provided,
however, the net income of any Subsidiary of Holdings, which is not a
Wholly-Owned Subsidiary and for which the investment of Holdings therein is
accounted for by the equity method of accounting, shall have its net income
included in the Consolidated Net Income of Holdings and its Subsidiaries only to
the extent of the amount of cash dividends or distributions paid by such
Subsidiary to Holdings.
"Contingent Obligation" shall mean, as to any Person, any
obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends, distributions or other obligations ("primary
obligations") of any other Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation of such
Person, whether or not contingent, (i) to purchase any such primary obligation
or any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (x) for the purchase or payment of any such primary
obligation or (y) 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 holder of such primary obligation against loss in
respect thereof; provided, however, that the term Contingent Obligation should
not include endorsements of instruments for deposit or collection in the
ordinary course of business. The amount of any Contingent Obligation shall be
deemed to be an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Contingent Obligation is made or, if not
stated or determinable, the maximum reasonably anticipated liability in respect
thereof (assuming such Person is required to perform thereunder) as determined
by such Person in good faith.
"Continuing Directors" shall mean the directors of a Person on
the Effective Date and each other director, if such other directors nomination
for election to the Board of Directors of such Person is recommended by a
majority of the then Continuing Directors.
"Conversion Date" shall mean December 31, 2001.
"Corporate Overhead Expenditures" shall mean for any period of
determination all expenses of Holdings and its Subsidiaries (other than
Residentclub) related to corporate and headquarters operations; provided,
however, that Corporate Overhead Expenditures do not include any direct expenses
related to the provision of cable, telephony or Internet services, field
61
operations expenses at individual markets (including technical, sales and
marketing and maintenance expenses incurred at the market level), royalties and
commissions, bad debt expenses and customer service expenses.
"Credit Documents" shall mean this Agreement, each Note, each
Notice of Borrowing, each Notice of Conversion, the Subsidiaries Guaranty and
each Security Document.
"Credit Party" shall mean Holdings and each of its
Subsidiaries (other than Residentclub).
"Debt Agreements" shall have the meaning provided in Section
4.05.
"Debt Base" shall mean, as at any date on which the amount
thereof is being determined, an amount equal to the sum of (x) Cable Television
Subscribers multiplied by Cable Television Debt and (y) Telephony Subscribers
multiplied by Telephone Debt, less (z) any Indebtedness outstanding.
"Debt Termination Documents" shall have the meaning provided
in Section 4.16(c).
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a
Bank Default is then in effect.
"Deutsche Bank" shall mean Deutsche Bank AG, New York Branch,
the New York State licensed branch of a German banking organization.
"Dividend" with respect to any Person shall mean that such
Person has declared or paid a dividend, distribution or returned any equity
capital to its stockholders or authorized or made any other distribution,
payment or delivery of property (other than common stock or preferred stock
(with the same terms as the preferred stock outstanding on the Effective Date)
of such Person) or cash to its stockholders, in their capacity as stockholders,
or redeemed, retired, purchased or otherwise acquired, directly or indirectly,
for a consideration any shares of any class of its capital stock outstanding or
partnership interests on or after the Effective Date (or any options or warrants
issued by such Person with respect to its capital stock), or set aside any funds
for any of the foregoing purposes, or shall have permitted any of its
Subsidiaries to purchase or otherwise acquire for a consideration any shares of
any class of the capital stock of such Person outstanding on or after the
Effective Date (or any options or warrants issued by such Person with respect to
its capital stock). Without limiting the foregoing, "Dividends" with respect to
any Person shall also include all cash payments made or required to be made by
such Person with respect to any stock appreciation rights, Plans, equity
incentive plans, achievement plans or any similar plans or setting aside of any
funds for the foregoing purposes.
"Documentation Agent" shall mean Deutsche Bank in its capacity
as Documentation Agent for the Banks hereunder.
62
"Documents" shall mean the Credit Documents, and the Debt
Termination Documents.
"Dollars" and the sign "$" shall each mean freely trans-
ferable lawful money of the United States.
"Effective Date" shall have the meaning provided in Section
13.10.
"Eligible Transferee" shall mean and include a commercial
bank, financial institution, other "accredited investor" (as defined in
Regulation D of the Securities Act) other than individuals, or a "qualified
institutional buyer" as defined in Rule 144A of the Securities Act.
"Employee Benefit Plans" shall have the meaning provided in
Section 4.05.
"Employment Agreements" shall have the meaning provided in
Section 4.05.
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigations or proceedings relating in
any way to any violation of, or liability under, any Environmental Law or any
permit issued, or any approval given, under any such Environmental Law
(hereafter, "Claims"), including, without limitation, (a) any and all Claims by
governmental or regulatory authorities for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and (b) any and all Claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials arising from alleged injury
or threat of injury to health, safety or the environment.
"Environmental Law" shall mean any Federal, state, foreign
or local statute, law, rule, regulation, ordinance, code, policy and rule of
common law now or hereafter in effect (including, without limitation, the EPA
guidance on asbestos abatement and removal) and in each case as amended, and any
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, relating to the environment,
health, safety or Hazardous Materials, including, without limitation, CERCLA;
RCRA; the Federal Water Pollution Control Act, as amended, 33 ▇.▇.▇.▇▇. 1251 et
seq.; the Toxic Substances Control Act, 15 ▇.▇.▇.▇▇. 2601 et seq.; the Clean Air
Act, 42 ▇.▇.▇.▇▇. 7401 et seq.; the Safe Drinking Water Act, 42 ▇.▇.▇.▇▇. 3803
et seq.; the Oil Pollution Act of 1990, 33 ▇.▇.▇.▇▇. 2701 et seq.; the
Occupational Safety and Health Act, 29 U.S.C.ss.651 et seq.; and any applicable
state and local or foreign counterparts or equivalents.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder. Section references to ERISA are to ERISA, as in
effect at the date of this Agreement, and to any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in
Section 3(9) of ERISA) which together with Holdings or a Subsidiary of Holdings
would be deemed to be a "single employer" (i) within the meaning of Section
63
414(b), (c), (m) or (o) of the Code or (ii) as a result of Holdings or a
Subsidiary of Holdings being or having been a general partner of such person.
"Eurodollar Loan" shall mean each Loan designated as such by
the Borrower at the time of the incurrence thereof or conversion thereto.
"Event of Default" shall have the meaning provided in Section
9.
"Excess Cash Flow" shall mean, for any period, the remainder
of (i) the sum of (a) Adjusted Consolidated Net Income for such period, and (b)
the decrease, if any, in Adjusted Working Capital from the first day to the last
day of such period, minus (ii) the sum of (a) the amount of cash Capital
Expenditures (to the extent not financed with Indebtedness), made by Holdings on
a consolidated basis (other than Residentclub) during such period, (b) the
amount of permanent principal payments of Indebtedness for borrowed money of
Holdings and its Subsidiaries (other than Residentclub) (other than repayments
of Loans); provided that repayments of Loans shall be deducted in determining
Excess Cash Flow if such repayments were applied to Scheduled Repayments
required to be made during such period, were made as a voluntary prepayment with
internally generated funds (but in the case of a voluntary prepayment of Loans
prior to the Conversion Date, only to the extent accompanied by a voluntary
reduction to the Total Commitment) during such period, and (c) the increase, if
any, in Adjusted Working Capital from the first day to the last day of such
period.
"Excess Cash Flow Payment Period" shall mean (a) the period
commencing on the Conversion Date and ending on the last day of the fiscal year
in which the Conversion Date occurs and (b) each fiscal year thereafter.
"Existing Indebtedness" shall have the meaning provided in
Section 6.22.
"Facility" shall mean the credit facility established under
this Agreement.
"Federal Funds Rate" shall mean for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds Brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to or referred
to in Section 3.01.
"Firstlink" shall mean Firstlink Communications, Inc., an
Oregon corporation.
"Firstlink Merger" shall mean the merger of Holdings with and
into Firstlink with Firstlink as the surviving corporation.
64
"Firstlink Merger Agreement" shall mean the Merger Agreement,
dated as of July 21, 1999 between Holdings and Firstlink.
"Firstlink Merger Documents" shall mean the Firstlink Merger
Agreement and all other documents entered into or delivered in connection with
the Firstlink Merger as the same may be supplemented, modified, amended or
restated from time to time.
"Fixed Charge Coverage Ratio" for any period shall mean the
ratio of (x) Consolidated EBITDA less the amount of all Maintenance Capital
Expenditures, made by Holdings or any of its Subsidiaries (other than
Residentclub) for such period to (y) Fixed Charges for such period.
"Fixed Charges" for any period shall mean the sum of (i)
Consolidated Interest Expense for such period, (ii) the aggregate principal
amount of all scheduled payments of Indebtedness (including the principal
portion of rentals under Capitalized Lease Obligations but excluding repayments
of Loans prior to the Conversion Date not accompanied by a permanent reduction
to the Total Commitment) of Holdings or any of its Subsidiaries (other than
Residentclub) required to be made during such period and (iii) taxes paid by
Holdings and its Subsidiaries (other than Residentclub) during such period.
"GMAC" shall mean GMAC Tenant Division, a division of GMAC
Commercial Mortgage Corporation.
"GMAC Acquisition" shall mean the acquisition of all of the
assets of GMAC by the Borrower on July 21, 1999.
"Guaranties" shall mean the Holdings Guaranty and the
Subsidiaries Guaranty.
"Guarantor" shall mean each of Holdings and each Subsidiary of
Holdings.
"Guaranty" shall mean and include each of the Subsidiary
Guaranties executed by the Subsidiaries of Holdings (other than the Borrower)
and the Holdings Guaranty.
"Hazardous Materials" means (a) petroleum or petroleum
products, radioactive materials, asbestos in any form that is friable, urea
formaldehyde foam insulation, transformers or other equipment that contain,
dielectric fluid containing levels of polychlorinated biphenyls, and radon gas;
(b) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances," "hazardous waste," "hazardous materials,"
"extremely hazardous substances," "restricted hazardous waste," "toxic
substances," "toxic pollutants," "contaminants," or "pollutants," or words of
similar meaning and regulatory effect, under any applicable Environmental Law;
and (c) any other chemical, material or substance, exposure to which is
prohibited, limited or regulated under applicable Environmental Laws.
"Holdings" shall have the meaning provided in the first
paragraph of this Agreement.
65
"Holdings Common Stock" shall mean the common stock of
Holdings as set forth on Schedule V.
"Holdings Guaranty" shall mean the guaranty of Holdings
contained in Section 12.
"Indebtedness" shall mean, as to any Person, without
duplication, (i) all indebtedness (including principal, interest, fees and
charges) of such Person for borrowed money or for the deferred purchase price of
property or services other than trade payables and accrued expenses arising in
the ordinary course of business, (ii) the maximum amount available to be drawn
under all letters of credit issued for the account of such Person and all unpaid
drawings in respect of such letters of credit, (iii) all Indebtedness of the
types described in clause (i), (ii), (iv), (v), (vi) or (vii) of this definition
secured by any Lien on any property owned by such Person, whether or not such
Indebtedness has been assumed by such Person, (iv) all Capitalized Lease
Obligations of such Person, (v) all obligations of such person to pay a
specified purchase price for goods or services, whether or not delivered or
accepted, i.e., take-or-pay and similar obligations, (vi) all Contingent
Obligations of such Person and (vii) all obligations under any Interest Rate
Protection or Other Hedging Agreement or under any similar type of agreement
entered into with a Person not a Bank.
"Indemnified Matters" shall have the meaning provided in
Section 13.01.
"Indemnitees" shall have the meaning provided in Section
13.01.
"Initial Borrowing Date" shall mean the date on which the
initial Loan is made.
"Intellectual Property" shall have the meaning provided in
Section 6.21.
"Interest Determination Date" shall mean, with respect to any
Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan.
"Interest Period" shall have the meaning provided in Section
1.09.
"Interest Rate Protection or Other Hedging Agreements" shall
have the meaning provided in the Security Documents.
"Internet Passings" shall mean the number of dwelling units
which the Borrower and its Subsidiaries (other than Residentclub) has the
opportunity to provide Internet service to pursuant to ▇▇▇ Agreements whether or
not all such dwelling units subscribe to such internet services.
"Leaseholds" of any Person means all the right, title and
interest of such Person as lessee or licensee in, to and under leases, easements
or licenses of land, improvements and/or fixtures and all rights incidental or
appurtenant thereto, including without limitation, all rights of entry or
easement to install and maintain Collateral within or on Real Property of
others.
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"Leverage Reduction Discount" shall mean as follows:
(i) on the Initial Borrowing Date and during any period in
which clause (ii) below does not apply, the Leverage Reduction Discount
shall be 0%;
(ii) from and after the Start Date to and including the End Date
and subject to (iii) below, the following percentage, to the extent but
only to the extent that as of the last day of the most recent fiscal
quarter ending immediately prior to such Start Date for which a
certificate has been delivered to the Banks pursuant to the next
succeeding sentence hereinafter the ratio of Consolidated Indebtedness
as of the most recent fiscal quarter ending immediately prior to such
Start Date to Annualized Consolidated EBITDA for the preceding fiscal
quarter shall be as set forth below:
Consolidated Indebtedness to
Basis Points Annualized Consolidated EBITDA
------------ ------------------------------
25 Equal to or greater than
5.00:1.00 but less than
6.00:1.00
50 Less than 5.00:1.00
(iii) notwithstanding (ii) above, if at any time (a) a Default or
Event of Default shall exist, or (b) the Consolidated EBITDA for the
most recent fiscal quarter shall be less than or equal to zero, the
Leverage Reduction Discount shall be 0%.
The Leverage Reduction Discount shall be determined by the
delivery of a certificate of the Borrower, certified by the Chief Financial
Officer of the Borrower, together with the financial statements required to be
delivered pursuant to Section 7.01(b) or (c), as the case may be, which
certificate shall set forth the Leverage Reduction Discount arising from the
calculation of the ratio of Consolidated Indebtedness to Annualized Consolidated
EBITDA of the Borrower for the fiscal quarter ending with the fiscal quarter or
fiscal year with respect to which such certificate is being delivered and the
basis for such calculations. The Leverage Reduction Discount so determined shall
apply, except as set forth above, to the period beginning on the date such
financial statements are delivered and ending on the earlier of (the "End Date")
(i) the next date of actual delivery of the financial statements required to be
delivered pursuant to Section 7.01(b) or (c) or (ii) the date on which such
financial statements are required to be delivered (the day of delivery of such
financial statements on which such period commences being herein referred to as
the "Start Date").
"Lien" shall mean any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other),
preference, priority or other security agreement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, any financing or similar statement or notice filed under
the UCC or any other similar recording or notice statute, and any lease having
substantially the same effect as any of the foregoing).
"Loan" shall have the meaning provided in Section 1.01(b).
67
"Maintenance Capital Expenditures" shall mean, for any period,
the amount of Capital Expenditures of Holdings and its Subsidiaries (other than
Residentclub) during such period less the amount of Capital Expenditures
utilized to effect the new construction of Cable Passings, Internet Passings and
Telephone Passings.
"Management Agreements" shall have the meaning provided in
Section 4.05.
"Margin Stock" shall have the meaning provided in Regulation
U.
"Material Contracts" shall have the meaning provided in
Section 4.05.
"Maturity Date" shall mean December 31, 2006.
"Minimum Borrowing Amount" shall mean $250,000.
"Net Consolidated Interest Expense" shall mean Consolidated
Interest Expense paid by Holdings and its Subsidiaries (other than Residentclub)
less cash interest income earned by Holdings and its Subsidiaries (other than
Residentclub).
"Net Sale Proceeds" shall mean for any sale of assets, the
gross cash proceeds (including any cash received by way of deferred payment
pursuant to a promissory note, receivable or otherwise, but only as and when
received) received from such sale, net of reasonable transaction costs
(including, without limitation, attorneys' fees), the amount of such gross cash
proceeds required to be used to permanently repay any Indebtedness which is
secured by the respective assets which were sold, and the estimated marginal
increase in income taxes and any stamp tax which will be payable by Holdings'
consolidated group as a result of such sale.
"Notes" shall have the meaning provided in Section 1.05(a).
"Notice of Borrowing" shall have the meaning provided in
Section 1.03(a).
"Notice of Conversion" shall have the meaning provided in
Section 1.06.
"Notice Office" shall mean the office of the Administrative
Agent located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇
▇▇▇▇▇▇▇▇▇, or such other office as the Administrative Agent may hereafter
designate in writing as such to the other parties hereto.
"Obligations" shall mean all amounts owing to the Agents, the
Collateral Agent or any Bank pursuant to the terms of this Agreement or any
other Credit Document.
"Paribas" shall mean Paribas, a French banking organization
acting through its New York Branch.
"Payment Office" shall mean the office of the Administrative
Agent located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇
Aizenberg, or such other office as the Administrative Agent may hereafter
designate in writing as such to the other parties hereto.
68
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Percentage" of any Bank at any time prior to the Conversion
Date shall mean a fraction (expressed as a percentage) the numerator of which is
the Commitment of such Bank at such time and the denominator of which is the
Total Commitment at such time, provided that if the Percentage of any Bank is to
be determined after the Total Commitment has been terminated, then the
Percentages of the Banks shall be determined immediately prior (and without
giving effect) to such termination.
"Permitted Acquisitions" shall have the meaning provided in
Section 8.02(viii).
"Permitted Business" shall mean a line of business in which
Holdings and its Subsidiaries is engaged on the Initial Borrowing Date and
reasonably related extensions thereof.
"Permitted Liens" shall have the meaning provided in Section
8.01.
"Person" shall mean any individual, partnership, limited
liability company, joint venture, firm, corporation, association, trust or other
enterprise or any government or political subdivision or any agency, department
or instrumentality thereof.
"Plan" shall mean any pension plan, as defined in Section 3(2)
of ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute of) Holdings, a Subsidiary of Holdings or an ERISA
Affiliate, and each such plan for the five year period immediately following the
latest date on which Holdings, a Subsidiary of Holdings or an ERISA Affiliate
maintained, contributed to or had an obligation to contribute to such plan.
"Pledge Agreement" shall have the meaning provided in Section
4.06.
"Pledge Agreement Collateral" shall mean all "Collateral" as
defined in the Pledge Agreement.
"Pledged Securities" shall have the meaning assigned that term
in the Pledge Agreement.
"Prime Lending Rate" shall mean the rate which The Chase
Manhattan Bank announces from time to time as its prime lending rate, the Prime
Lending Rate to change when and as such prime lending rate changes. The Prime
Lending Rate is a reference rate and does not necessarily represent the lowest
or best rate actually charged to any customer by Paribas or The Chase Manhattan
Bank, who may make commercial loans or other loans at rates of interest at,
above or below the Prime Lending Rate.
"Projections" shall have the meaning provided in Section 4.15.
"Quarterly Payment Date" shall mean the last Business Day of
each December, March, June and September of each fiscal year.
69
"Quoted Rate" shall mean (a) the offered quotation to
first-class banks in the New York interbank Eurodollar market by the
Administrative Agent for U.S. dollar deposits of amounts in immediately
available funds comparable to the outstanding principal amount of the Eurodollar
Loan of the Administrative Agent for which an interest rate is then being
determined with maturities comparable to the Interest Period applicable to such
Eurodollar Loan determined as of 10:00 A.M. (New York time) on the date which is
two Business Days prior to the commencement of such Interest Period, divided
(and rounded upward to the next whole multiple of 1/16 of 1%) by (b) a
percentage equal to 100% minus the then stated maximum rate of all reserve
requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves) applicable to any member bank of the
Federal Reserve System in respect of Eurocurrency funding or liabilities as
defined in Regulation D (or any successor category of liabilities under
Regulation D).
"RCRA" shall mean the Resource Conservation and Recovery Act,
as the same may be amended from time to time, 42 U.S.C. ss. 6901 et seq.
"Real Property" of any Person shall mean all the right, title
and interest of such Person in and to land, improvements and fixtures, including
Leaseholds and all rights incidental or appurtenant thereto, including without
limitation, all rights of entry or easement to install and maintain Collateral
within or on Real Property of others.
"Recovery Event" shall mean the receipt by Holdings or any
Subsidiary of the Holdings (other than Residentclub) of any cash insurance
proceeds or condemnation awards payable: (i) by reason of theft, loss, physical
destruction, damage or taking or any other event with respect to any properties
or assets of Holdings or any Subsidiary of Holdings (including without
limitation, business interruption insurance); and, (ii) under any policy of
insurance required to be maintained under Section 7.03.
"Refinanced Indebtedness" shall have the meaning provided in
Section 4.16(b).
"Register" shall have its meaning provided in Section 7.16.
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing reserve requirements.
"Regulation T" shall mean Regulation T of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
70
"Related Fund" shall mean, with respect to any Bank that is a
fund that invests in loans, any other fund that invests in loans and is managed
by the same investment advisor as such Bank or by an Affiliate of such
investment advisor.
"Release" means disposing, discharging, injecting, spilling,
pumping, leaking, leaching, dumping, emitting, escaping, emptying, seeping,
placing, pouring and the like, into or upon any land or water or air, or
otherwise entering into the environment.
"Replaced Bank" shall have the meaning provided in Section
1.12.
"Replacement Bank" shall have the meaning provided in Section
1.12.
"Reportable Event" shall mean an event described in Section
4043(c) of ERISA with respect to a Plan that is subject to Title IV of ERISA
other than those events as to which the 30-day notice period is waived under
subsection .22, .23, .25, .27 or .28 of PBGC Regulation Section 4043.
"Required Banks" shall mean Banks the sum of whose outstanding
Loans, Commitments (or after the termination thereof, the sum of outstanding
Loans), represent an amount greater than 51% of the sum of all outstanding Loans
and the Total Commitment (or after the termination thereof, the sum of the then
total outstanding Loans).
"Residentclub" shall mean The ▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc., a
Delaware corporation.
"Returns" shall have the meaning provided in Section 6.09.
"▇▇▇ Agreement" shall mean all agreements making the Borrower
or any of its Subsidiaries (other than Residentclub) the exclusive provider of
cable television/video services and/or the preferred provider of telephony
services to the residents of multiple dwelling units.
"▇▇▇ Agreement Standard Form" shall mean the form of ▇▇▇
Agreement delivered to the Banks within 120 days of the Effective Date and in
form and substance reasonably satisfactory to the Required Banks.
"Scheduled Repayment" shall have the meaning provided in
Section 3.02(A)(a).
"SEC" shall have the meaning provided in Section 7.01(h).
"Section 3.04(b)(ii) Certificate" shall have the meaning
provided in Section 3.04(b)(ii).
"Secured Creditors" shall mean (x) the Banks, the Agents, the
Collateral Agent and (y) any Bank which on the date hereof is, or subsequently
becomes, party to any Interest Rate Protection or Other Hedging Agreement.
"Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
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"Securities Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated thereunder.
"Security Agreement" shall have the meaning provided in
Section 4.07.
"Security Agreement Collateral" shall mean all "Collateral" as
defined in the Security Agreement.
"Security Documents" shall mean the Pledge Agreement, the
Security Agreement, and the Concentration Account Consent Letter.
"Shareholders' Agreements" shall have the meaning provided in
Section 4.05.
"Subscriber Penetration Report" shall mean a report on the
number of Cable Passings, Internet Passings and Telephony Passings, the number
of Subscribers, Capital Expenditures, marketing plans and such other information
as requested by the Administrative Agent or Required Banks, all in a form
acceptable to the Administrative Agent and the Required Banks.
"Subscribers" shall mean the total number of subscribers to
the services of Holdings and its Subsidiaries (other than Residentclub),
including both cable television, Internet and telephony subscribers.
"Subsidiaries Guaranty" shall have the meaning provided in
Section 4.08.
"Subsidiary" shall mean, as to any Person, (i) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more Subsidiaries of
such Person has more than a 50% equity interest at the time.
"Syndication Agent" shall mean Paribas in its capacity as
Syndication Agent for the Banks hereunder, and shall include any successor to
the Syndication Agent appointed pursuant to Section 11.09.
"Syndication Termination Date" shall mean the earlier of (x)
120 days after the Effective Date or (y) the date on which the Administrative
Agent, in its sole discretion, determines (and notifies the Borrower) that the
primary syndication (and the resultant addition of institutions as Banks
pursuant to Section 12.04) has been completed.
"Tax Sharing Agreements" shall have the meaning provided in
Section 4.05.
"Taxes" shall have the meaning provided in Section 3.04(a).
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"Telephone Debt" shall mean the following:
Period Amount
Closing Date - December 31, 2001 $450
January 1, 2002 - December 31, 2002 $400
January 1, 2003 - December 31, 2003 $300
Thereafter $200
"Telephony Passings" shall mean the number of dwelling units
which the Borrower has the opportunity to provide telephony services to pursuant
to an ▇▇▇ Agreement regardless of whether all such dwelling units subscribe to
such telephony services.
"Telephony Subscribers" shall mean the number of dwelling
units which the Borrower and its Subsidiaries (other than Residentclub) provide
telephone service (as evidenced by a written agreement) who are not more than 60
days past due on payment of their telephone ▇▇▇▇.
"Total Commitment" shall mean, at any time, the sum of the
Commitments of each of the Banks.
"Total Unutilized Commitment" shall mean, at any time, the sum
of the Unutilized Commitments of each of the Banks.
"Transaction" shall mean collectively, (i) the incurrence of
Loans hereunder on the Initial Borrowing Date, (ii) the issuance of capital
stock of Holdings in connection with the transactions contemplated hereby, (iii)
the repayment of all Refinanced Indebtedness, together with all accrued
interest, premiums, fees, commissions and expenses owing in connection
therewith, and the termination of all commitments thereunder, (iv) the payment
of the Transaction Fees and Expenses in connection therewith and (v) the
Acquisitions.
"Transaction Fees and Expenses" shall mean all fees and
expenses incurred in connection with and arising out of the Transaction and the
transactions contemplated thereby and hereby; provided, however, that the
aggregate amount of such fees and expenses shall not exceed an amount acceptable
to the Required Banks.
"Type" shall mean the type of Loan determined with regard to
the interest option applicable thereto, i.e., whether a Base Rate Loan or a
Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time to
time in effect in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the
amount, if any, by which the value of the accumulated plan benefits under the
Plan determined on a plan termination basis in accordance with actuarial
assumptions at such time consistent with those prescribed by the PBGC for
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purposes of Section 4044 of ERISA, exceeds the fair market value of all plan
assets allocable to such liabilities under Title IV of ERISA (excluding any
accrued but unpaid contributions).
"United States" and "U.S." shall each mean the United States
of America.
"Unutilized Commitment" for any Bank, at any time, shall mean
the Commitment of such Bank at such time less the aggregate principal amount of
Loans made by such Bank and then outstanding.
"U.S. Online Acquisition" shall mean the acquisition of all
of the assets of U.S. Online Communications, Inc. by the Borrower on July 21,
1999.
"U.S. Online Communications, Inc." shall mean U.S. Online
Communications, Inc., a Delaware corporation.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i)
any corporation 100% of whose capital stock is at the time owned by such Person
and/or one or more Wholly-Owned Subsidiaries of such Person and (ii) any
partnership, association, joint venture or other entity in which such Person
and/or one or more Wholly-Owned Subsidiaries of such Person has a 100% equity
interest at such time.
Section 11. The Agents.
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11.01 Appointment. The Banks hereby designate Paribas as
Administrative Agent (for purposes of this Section 11, the term "Administrative
Agent" shall include Paribas in its capacity as Collateral Agent pursuant to the
Security Documents), Paribas as Syndication Agent, and Deutsche Bank, as
Documentation Agent, in each case to act as specified herein and in the other
Credit Documents. Each Bank hereby irrevocably authorizes, and each holder of
any Note by the acceptance of such Note shall be deemed irrevocably to
authorize, the Administrative Agent and the Syndication Agent to take such
action on its behalf under the provisions of this Agreement, the other Credit
Documents and any other instruments and agreements referred to herein or therein
and to exercise such powers and to perform such duties hereunder and thereunder
as are specifically delegated to or required of the Administrative Agent and the
Syndication Agent by the terms hereof and thereof and such other powers as are
reasonably incidental thereto. Each of the Administrative Agent and the
Syndication Agent may perform any of its duties hereunder by or through its
officers, directors, agents or employees.
11.02 Nature of Duties. The Administrative Agent shall have no
duties or responsibilities except those expressly set forth in this Agreement
and the Security Documents. The Syndication Agent and the Documentation Agent
shall not have any duties or responsibilities under this Agreement or any
Security Document or any other document or matter related thereto. None of the
Administrative Agent, the Syndication Agent, the Documentation Agent and any of
their respective officers, directors, agents or employees shall be liable for
any action taken or omitted by it or them hereunder or under any other Credit
Document or in connection herewith or therewith, unless caused by its or their
gross negligence or willful misconduct. The duties of the Administrative Agent
and the Syndication Agent shall be mechanical and administrative in nature; the
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Administrative Agent, the Syndication Agent and the Documentation Agent shall
not have by reason of this Agreement or any other Credit Document a fiduciary
relationship in respect of any Bank or the holder of any Note; and nothing in
this Agreement or any other Credit Document, expressed or implied, is intended
to or shall be so construed as to impose upon the Administrative Agent, the
Syndication Agent or the Documentation Agent any obligations in respect of this
Agreement or any other Credit Document except as expressly set forth herein.
11.03 Lack of Reliance on the Administrative Agent, the
Syndication Agent and the Documentation Agent. Independently and without
reliance upon the Administrative Agent, the Syndication Agent and the
Documentation Agent, each Bank and the holder of each Note, to the extent it
deems appropriate, has made and shall continue to make (i) its own independent
investigation of the financial condition and affairs of Holdings and its
Subsidiaries in connection with the making and the continuance of the Loans and
the taking or not taking of any action in connection herewith and (ii) its own
appraisal of the creditworthiness of Holdings and its Subsidiaries and, except
as expressly provided in this Agreement, the Administrative Agent, the
Syndication Agent and the Documentation Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide any Bank
or the holder of any Note with any credit or other information with respect
thereto, whether coming into its possession before the making of the Loans, the
participation in the Letters of Credit or at any time or times thereafter.
Neither the Administrative Agent, the Syndication Agent nor the Documentation
Agent shall be responsible to any Bank or the holder of any Note for any
recitals, statements, information, representations or warranties herein or in
any document, certificate or other writing delivered in connection herewith or
for the execution, effectiveness, genuineness, validity, enforceability,
perfection, priority or sufficiency of this Agreement or any other Credit
Document or the financial condition of Holdings or its Subsidiaries or be
required to make any inquiry concerning either the performance or observance of
any of the terms, provisions or conditions of this Agreement or any other Credit
Document, or the financial condition of Holdings or its Subsidiaries or the
existence or possible existence of any Default or Event of Default.
11.04 Certain Rights of the Administrative Agent, the
Syndication Agent and the Documentation Agent. If the Administrative Agent or
the Syndication Agent shall request instructions from the Required Banks with
respect to any act or action (including failure to act) in connection with this
Agreement or any other Credit Document, the Administrative Agent or the
Syndication Agent, as the case may be, shall be entitled to refrain from such
act or taking such action unless and until the Administrative Agent shall have
received instructions from the Required Banks; and the Administrative Agent or
the Syndication Agent, as the case may be, shall not incur liability to any
Person by reason of so refraining. Without limiting the foregoing, no Bank or
the holder of any Note shall have any right of action whatsoever against the
Administrative Agent, the Syndication Agent or the Documentation Agent as a
result of the Administrative Agent acting or refraining from acting hereunder or
under any other Credit Document in accordance with the instructions of the
Required Banks.
11.05 Reliance. The Administrative Agent and the Syndication
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any note, writing, resolution, notice, statement, certificate, telex, teletype
or facsimile message, cablegram, radiogram, order or other document or telephone
message signed, sent or made by any Person that the Administrative Agent or the
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Syndication Agent believed to be the proper Person, and, with respect to all
legal matters pertaining to this Agreement and any other Credit Document and its
duties hereunder and thereunder, upon advice of counsel selected by the
Administrative Agent and the Syndication Agent (which may be counsel for the
Credit Parties).
11.06 Indemnification. (a) To the extent the Administrative
Agent, the Syndication Agent or the Documentation Agent or any of their
respective Affiliates is not reimbursed and indemnified by the Borrower, the
Banks will reimburse and indemnify the Administrative Agent, the Syndication
Agent or the Documentation Agent, as the case may be, in proportion to its
respective "percentages" as used in determining the Required Banks, for and
against any and all liabilities, obligations, losses, damages, penalties,
claims, actions, judgments, suits, costs, expenses or disbursements of
whatsoever kind or nature which may be imposed on, asserted against or incurred
by the Administrative Agent, the Syndication Agent or the Documentation Agent,
as the case may be, in performing their respective duties hereunder or under any
other Credit Document, in any way relating to or arising out of this Agreement
or any other Credit Document; provided that no Bank shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the
Administrative Agent's, the Syndication Agent's or the Documentation Agent's, as
the case may be, gross negligence or willful misconduct.
(b) The Administrative Agent, the Syndication Agent and the
Documentation Agent shall be fully justified in failing or refusing to take any
action hereunder and under any other Credit Document (except actions expressly
required to be taken by it hereunder or under the Credit Documents) unless it
shall first be indemnified to its satisfaction by the Banks pro rata against any
and all liability, cost and expense that it may incur by reason of taking or
continuing to take any such action.
11.07 The Administrative Agent, the Syndication Agent and the
Documentation Agent in Their Individual Capacities. With respect to its
obligation to make Loans under this Agreement, each of the Administrative Agent,
the Syndication Agent and the Documentation Agent shall have the rights and
powers specified herein for a "Bank" and may exercise the same rights and powers
as though it were not performing the duties specified herein; and the term
"Banks," "Required Banks," "holders of Notes" or any similar terms shall, unless
the context clearly otherwise indicates, include the Administrative Agent, the
Syndication Agent and the Documentation Agent in their individual capacities.
Each of the Administrative Agent, the Syndication Agent and the Documentation
Agent may accept deposits from, lend money to, and generally engage in any kind
of banking, trust or other business with any Credit Party or any Affiliate of
any Credit Party as if they were not performing the duties specified herein, and
may accept fees and other consideration from the Borrower or any other Credit
Party for services in connection with this Agreement and may purchase and hold
equity interests in the Borrower or any other Credit Party without having to
account for the same to the Banks and otherwise without having to account for
the same to the Banks.
11.08 Holders. The Administrative Agent may deem and treat the
payee of any Note as the owner thereof for all purposes hereof unless and until
a written notice of the assignment, transfer or endorsement thereof, as the case
may be, shall have been filed with the Administrative Agent. Any request,
76
authority or consent of any Person who, at the time of making such request or
giving such authority or consent, is the holder of any Note shall be conclusive
and binding on any subsequent holder, transferee, assignee or indorsee, as the
case may be, of such Note or of any Note or Notes issued in exchange therefor.
11.09 Resignation by the Agent. (a) The Administrative Agent
may resign from the performance of all its functions and duties hereunder and/or
under the other Credit Documents at any time by giving fifteen (15) Business
Days' prior written notice to the Borrower and the Banks. Such resignation shall
take effect upon the appointment of a successor Administrative Agent pursuant to
clauses (b) and (c) below or as otherwise provided below.
(b) Upon any such notice of resignation, the Required Banks
shall appoint a successor Administrative Agent hereunder or thereunder who shall
be a commercial bank or trust company reasonably acceptable to the Borrower (it
being understood and agreed that any Bank is deemed to be acceptable to the
Borrower).
(c) If a successor Administrative Agent shall not have been so
appointed within such fifteen (15) Business Day period, the Administrative
Agent, with the consent of the Borrower, shall then appoint a successor
Administrative Agent who shall serve as Administrative Agent hereunder or
thereunder until such time, if any, as the Banks appoint a successor
Administrative Agent as provided above.
(d) If no successor Administrative Agent has been appointed
pursuant to clause (b) or (c) above by the 30th Business Day after the date such
notice of resignation was given by the Administrative Agent, the Administrative
Agent's resignation shall become effective and the Banks shall thereafter
perform all the duties of the Administrative Agent hereunder and/or under any
other Credit Document until such time, if any, as the Banks appoint a successor
Administrative Agent as provided above.
Section 12. Guaranty.
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12.01 The Guaranty. In order to induce the Banks to enter into
this Agreement and to extend credit hereunder and in recognition of the direct
benefits to be received by Holdings from the proceeds of the Loans, Holdings
hereby agrees with the Banks as follows: Holdings hereby unconditionally and
irrevocably guarantees as primary obligor and not merely as surety the full and
prompt payment when due, whether upon maturity, by acceleration or otherwise, of
any and all indebtedness of the Borrower to the Banks under this Agreement and
the other Credit Documents and under each Interest Rate Protection or Other
Hedging Agreement entered into by a Bank or an affiliate of a Bank with the
Borrower. If any or all of the indebtedness of the Borrower to the Banks becomes
due and payable hereunder or under such other Credit Documents or Interest Rate
Protection or Other Hedging Agreements, Holdings unconditionally promises to pay
such indebtedness to the Banks, or order, on demand, together with any and all
expenses which may be incurred by the Agents or the Banks in collecting any of
the indebtedness. The word "indebtedness" is used in this Section 12 in its most
comprehensive sense and means any and all advances, debts, obligations and
liabilities of the Borrower arising in connection with this Agreement or any
other Credit Documents or under any Interest Rate Protection or Other Hedging
Agreement with a Bank or an affiliate of the Bank, in each case, heretofore,
77
now, or hereafter made, incurred or created, whether voluntarily or
involuntarily, absolute or contingent, liquidated or unliquidated, determined or
undetermined, whether or not such indebtedness is from time to time reduced, or
extinguished and thereafter increased or incurred, whether the Borrower may be
liable individually or jointly with others, whether or not recovery upon such
indebtedness may be or hereafter become barred by any statute of limitations,
and whether or not such indebtedness may be or hereafter become otherwise
unenforceable.
12.02 Bankruptcy. Additionally, Holdings unconditionally and
irrevocably guarantees the payment of any and all indebtedness of the Borrower
to the Banks whether or not due or payable by the Borrower upon the occurrence
of any of the events specified in Section 9.05, and unconditionally and
irrevocably promises to pay such indebtedness to the Banks, or order, on demand,
in lawful money of the United States.
12.03 Nature of Liability. The liability of Holdings hereunder
is exclusive and independent of any security for or other guaranty of the
indebtedness of the Borrower whether executed by Holdings, any other guarantor
or by any other party, and the liability of Holdings hereunder shall not be
affected or impaired by (a) any direction as to application of payment by the
Borrower or by any other party, or (b) any other continuing or other guaranty,
undertaking or maximum liability of a guarantor or of any other party as to the
indebtedness of the Borrower, or (c) any payment on or in reduction of any such
other guaranty or undertaking, or (d) any dissolution, termination or increase,
decrease or change in personnel by the Borrower, or (e) any payment made to the
Agents or the Banks on the indebtedness which the Agents or such Banks repay the
Borrower pursuant to court order in any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceeding, and Holdings waives any right to
the deferral or modification of its obligations hereunder by reason of any such
proceeding.
12.04 Guaranty Absolute. No invalidity, irregularity or
unenforceability of all or any part of the indebtedness guaranteed hereby or of
any security therefor shall affect, impair or be a defense to this Guaranty, and
this Guaranty shall be primary, absolute and unconditional notwithstanding the
occurrence of any event or the existence of any other circumstances which might
constitute a legal or equitable discharge of a surety or guarantor except
payment in full of the indebtedness guaranteed herein.
12.05 Independent Obligation. The obligations of Holdings
hereunder are independent of the obligations of any other guarantor or the
Borrower, and a separate action or actions may be brought and prosecuted against
Holdings whether or not action is brought against any other guarantor or the
Borrower and whether or not any other guarantor or the Borrower be joined in any
such action or actions. Holdings waives, to the fullest extent permitted by law,
the benefit of any statue of limitations affecting its liability hereunder or
the enforcement thereof. Any payment by the Borrower or other circumstance which
operates to toll any statute of limitations as to the Borrower shall operate to
toll the statute of limitations as to Holdings.
12.06 Authorization. Holdings authorizes the Agents and the
Banks without notice or demand, and without affecting or impairing its liability
hereunder, from time to time to:
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(a) change the manner, place or terms of payment of, and/or
change or extend the time of payment of, renew, increase, accelerate or alter,
any of the indebtedness (including any increase or decrease in the rate of
interest thereon), any security therefor, or any liability incurred directly or
indirectly in respect thereof, and the Guaranty herein made shall apply to the
indebtedness as so changed, extended, renewed or altered;
(b) take and hold security for the payment of the indebtedness
and sell, exchange, release, surrender, realize upon or otherwise deal with in
any manner and in any order any property by whomsoever at any time pledged or
mortgaged to secure, or howsoever securing, the indebtedness or any liabilities
(including any of those hereunder) incurred directly or indirectly in respect
thereof or hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against
the Borrower or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers,
guarantors, the Borrower or other obligors;
(e) settle or compromise any of the indebtedness, any security
therefor or any liability (including any of those hereunder) incurred directly
or indirectly in respect thereof or hereof, and may subordinate the payment of
all or any part thereof to the payment of any liability (whether due or not) of
the Borrower to its creditors other than the Banks;
(f) apply any sums by whomsoever paid or howsoever realized to
any liability or liabilities of the Borrower to the Banks regardless of what
liability or liabilities of Holdings or the Borrower remain unpaid;
(g) consent to or waive any breach of, or any act, omission or
default under, this Agreement or any of the instruments or agreements referred
to herein, or otherwise amend, modify or supplement this Agreement or any of
such other instruments or agreements; and/or
(h) take any other action which would, under otherwise
applicable principles of common law, give rise to a legal or equitable discharge
of Holdings from its liabilities under this Section 12.
12.07 Reliance. It is not necessary for the Agents or the
Banks to inquire into the capacity or powers of the Borrower or its Subsidiaries
or the officers, directors, partners or agents acting or purporting to act on
its behalf, and any indebtedness made or created in reliance upon the professed
exercise of such powers shall be guaranteed hereunder.
12.08 Subordination. Any indebtedness of the Borrower now or
hereafter held by Holdings is hereby subordinated to the indebtedness of the
Borrower to the Agents and the Banks; and such indebtedness of the Borrower to
Holdings, if the Agents (at the direction of the Required Banks), after an Event
of Default has occurred, so requests, shall be collected, enforced and received
by Holdings as trustee for the Banks and be paid over to the Banks on account of
the indebtedness of the Borrower to the Banks, but without affecting or
impairing in any manner the liability of Holdings under the other provisions of
this Guaranty. Prior to the transfer by Holdings of any note or negotiable
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instrument evidencing any indebtedness of the Borrower to Holdings, Holdings
shall ▇▇▇▇ such note or negotiable instrument with a legend that the same is
subject to this subordination.
12.09 Waiver. (a) Holdings waives any right to require the
Agents or the Banks to (i) proceed against the Borrower, any other guarantor or
any other party, (ii) proceed against or exhaust any security held from the
Borrower, any other guarantor or any other party or (iii) pursue any other
remedy in the Agents' or the Banks' power whatsoever. Holdings waives any
defense based on or arising out of any defense of the Borrower, any other
guarantor or any other party other than payment in full of the indebtedness
(other than payment), including, without limitation, any defense based on or
arising out of the disability of the Borrower, any other guarantor or any other
party, or the unenforceability of the indebtedness or any part thereof from any
cause, or the cessation from any cause of the liability of the Borrower other
than to the extent of payment in full of the indebtedness. The Agents and the
Banks may, in accordance with the Credit Documents, at their election, foreclose
on any security held by the Agents, the Collateral Agent or the Banks by one or
more judicial or nonjudicial sales, whether or not every aspect of any such sale
is commercially reasonable (to the extent such sale is permitted by applicable
law), or exercise any other right or remedy the Agents and the Banks may have
against the Borrower or any other party, or any security, without affecting or
impairing in any way the liability of Holdings hereunder except to the extent
the indebtedness has been paid. Holdings waives any defense arising out of any
such election by the Agents and the Borrower, even though such election operates
to impair or extinguish any right of reimbursement or subrogation or other right
or remedy of Holdings against the Borrower or any other party or any security.
(b) Except as otherwise specifically required hereunder,
Holdings waives all presentments, demands for performance, protests and notices,
including, without limitation, notices of nonperformance, notices of protest,
notices of dishonor, notices of acceptance of this Guaranty, and notices of the
existence, creation or incurring of new or additional indebtedness. Holdings
assumes all responsibility for being and keeping itself informed of the
Borrower's financial condition and assets, and of all other circumstances
bearing upon the risk of non-payment of the indebtedness and the nature, scope
and extent of the risks which Holdings assumes and incurs hereunder, and agrees
that the Agents and the Banks shall have no duty to advise Holdings of
information known to them regarding such circumstances or risks.
12.10 Guaranty Continuing. This Guaranty is a continuing one
and all liabilities to which it applies or may apply under the terms hereof
shall be conclusively presumed to have been created in reliance hereon. No
failure or delay on the part of any Bank, of any holder of any Note in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
expressly specified are cumulative and not exclusive of any rights or remedies
which any Bank or any subsequent holder of a Note would otherwise have. No
notice to or demand on Holdings in any case shall entitle Holdings to any other
or further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the Bank or any holder, creator or purchaser to any
other or further action in any circumstances without notice or demand.
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12.11 Binding Nature of Guaranties. This Guaranty shall be
binding upon Holdings and its successors and assigns and shall inure to the
benefit of the Bank and their successors and assigns.
12.12 Judgments Binding. If claim is ever made upon any Bank,
any subsequent holder of a Note for repayment or recovery of any amount or
amounts received in payment or on account of any of the indebtedness and any of
the aforesaid payees repays all or part of said amount by reason of (a) any
judgment, decree or order of any court or administrative body having
jurisdiction over such payee or any of its property, or (b) any settlement or
compromise of any such claim effected by such payee with any such claimant
(including the Borrower) then and in such event Holdings agrees that any such
judgment, decree, order, settlement or compromise shall be binding upon
Holdings, notwithstanding any revocation hereof or the cancellation of any Note,
or other instrument evidencing any liability of the Borrower, and Holdings shall
be and remain liable to the aforesaid payees hereunder for the amount so repaid
or recovered to the same extent as if such amount had never originally been
received by any such payee.
Section 13. Miscellaneous.
-------------
13.01 Payment of Expenses, etc. Holdings and the Borrower
hereby jointly and severally agree to: (i) whether or not the transactions
herein contemplated are consummated, pay all reasonable out-of-pocket costs and
expenses of the Agents (including, without limitation, the reasonable fees and
disbursements of White & Case LLP and local counsel and any outside consultants
hired by the Agents) in connection with the preparation, execution and delivery
of this Agreement and the other Credit Documents and the documents and
instruments referred to herein and therein and any amendment, waiver or consent
relating hereto or thereto, of the Agents in connection with its syndication
efforts with respect to this Agreement (including, without limitation, the
reasonable fees and disbursements of White & Case LLP) and of the Agents and
each of the Banks in connection with the enforcement of this Agreement and the
other Credit Documents and the documents and instruments referred to herein and
therein (including, without limitation, the reasonable fees and disbursements of
counsel for the Agents and for each of the Banks); (ii) pay and hold each of the
Banks harmless from and against any and all present and future stamp, excise and
other similar taxes with respect to the foregoing matters and save each of the
Banks harmless from and against any and all liabilities with respect to or
resulting from any delay or omission (other than to the extent attributable to
such Bank) to pay such taxes; and (iii) defend, protect, indemnify and hold
harmless the Agents and each Bank, and each of their respective Affiliates,
officers, directors, employees, representatives, attorneys and agents
(collectively called the "Indemnitees") from and against any and all
liabilities, obligations (including removal or remedial actions), losses,
damages (including foreseeable and unforeseeable consequential damages and
punitive damages), penalties, claims, actions, judgments, suits, costs, expenses
and disbursements (including reasonable attorneys' and consultants' fees and
disbursements) of any kind or nature whatsoever that may at any time be incurred
by, imposed on or assessed against the Indemnitees directly or indirectly based
on, or arising or resulting from, or in any way related to, or by reason of (a)
any investigation, litigation or other proceeding (whether or not the Agents,
the Collateral Agent or any Bank is a party thereto and whether or not any such
81
investigation, litigation or other proceeding is between or among the Agents,
the Collateral Agent, any Bank, the Borrower or any third person or otherwise)
related to the entering into and/or performance of this Agreement or any other
Credit Document or the proceeds of any Loans hereunder or the consummation of
any transactions contemplated herein (including, without limitation, the
Transaction) or in any other Credit Document or the exercise of any of their
rights or remedies provided herein or in the other Credit Documents; or, (b) the
actual or alleged generation, presence or Release of Hazardous Materials on or
from, or the transportation of Hazardous Materials to or from, any Real Property
owned or at any time operated by Holdings or any of its Subsidiaries or; (c) any
Environmental Claim relating to Holdings or any of its Subsidiaries or any Real
Property owned or at any time operated by Holdings or any of its Subsidiaries
or; (d) the exercise of the rights of the Agents and of any Bank under any of
the provisions of this Agreement or any other Credit Document or any Loans
hereunder; or (e) the consummation of any transaction contemplated herein
(including, without limitation, the Transaction) or in any other Credit Document
(the "Indemnified Matters") regardless of when such Indemnified Matter arises;
but excluding any such Indemnified Matter to the extent based on the gross
negligence or willful misconduct of the Indemnitee seeking indemnification
hereunder.
13.02 Right of Setoff. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence and during the continuance of
an Event of Default, each Bank is hereby authorized at any time or from time to
time, without presentment, demand, protest or other notice of any kind to any
Credit Party or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate and apply any and all deposits (general or
special) and any other Indebtedness at any time held or owing by such Bank
(including, without limitation, by branches and agencies of such Bank wherever
located) to or for the credit or the account of each Credit Party against and on
account of the Obligations and liabilities of such Credit Party to such Bank
under this Agreement or under any of the other Credit Documents, including,
without limitation, all interests in Obligations purchased by such Bank pursuant
to Section 13.06(b), and all other claims of any nature or description arising
out of or connected with this Agreement or any other Credit Document,
irrespective of whether or not such Bank shall have made any demand hereunder
and although said Obligations, liabilities or claims, or any of them, shall be
contingent or unmatured.
13.03 Notices. Except as otherwise expressly provided herein,
all notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, facsimile or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered: if to Holdings or the
Borrower, at its address specified opposite its signature below; if to any Bank,
at its address specified opposite its name below; and if to the Administrative
Agent, at its Notice Office; or, as to any Credit Party or the Administrative
Agent, at such other address as shall be designated by such party in a written
notice to the other parties hereto and, as to each Bank, at such other address
as shall be designated by such Bank in a written notice to each Borrower and the
Administrative Agent. All such notices and communications shall, when mailed,
telegraphed, telexed, facsimiled, or cabled or sent by overnight courier, be
effective 3 Business Days after deposited in the mails, certified, return
receipt requested, when delivered to the telegraph company, cable company or one
day following delivery to an overnight courier, as the case may be, or sent by
telex or facsimile device, except that notices and communications to the
Administrative Agent shall not be effective until received by the Administrative
Agent.
82
13.04 Benefit of Agreement. (a) This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto; provided, however, no Credit Party
may assign or transfer any of its rights, obligations or interest hereunder or
under any other Credit Document without the prior written consent of the Banks;
and provided further, that although any Bank may transfer, assign or grant
participations in its rights hereunder, such Bank shall remain a "Bank" for all
purposes hereunder (and may not transfer or assign all or any portion of its
Commitments or Loans hereunder except as provided in Section 13.04(b)) and the
transferee, assignee or participant, as the case may be, shall not constitute a
"Bank" hereunder; and provided further, that no Bank shall transfer or grant any
participation under which the participant shall have rights to approve any
amendment to or waiver of this Agreement or any other Credit Document except to
the extent such amendment or waiver would (i) extend the final scheduled
maturity of any Loan or Note in which such participant is participating, or
reduce the rate or extend the time of payment of interest or Fees thereon
(except in connection with a waiver of applicability of any post-default
increase in interest rates) or reduce the principal amount thereof, or increase
the Commitments in which such participant is participating over the amount
thereof then in effect (it being understood that a waiver of any Default or
Event of Default or of a mandatory reduction in the Total Commitment shall not
constitute a change in the terms of any Commitment, and that an increase in any
Commitment shall be permitted without the consent of any participant if the
participant's participation is not increased as a result thereof), (ii) consent
to the assignment or transfer by any Credit Party of any of its rights and
obligations under this Agreement or (iii) release all or substantially all of
the Collateral under all of the Security Documents (except as expressly provided
in the Credit Documents) supporting the Loans hereunder in which such
participant is participating. In the case of any such participation, the
participant shall not have any rights under this Agreement or any of the other
Credit Documents (the participant's rights against such Bank in respect of such
participation to be those set forth in the agreement executed by such Bank in
favor of the participant relating thereto) and all amounts payable by the
Borrower hereunder shall be determined as if such Bank had not sold such
participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank
together with one or more other Banks) may (x) (A) pledge its Loans and/or Notes
hereunder to a Federal Reserve Bank in support of borrowings made by such Bank
from such Federal Reserve Bank or (B) assign all or a portion of its Loans or
Commitments and related outstanding Obligations hereunder to its parent company,
principal office and/or any Affiliate of such Bank which is at least 50% owned
by such Bank or its parent company or to one or more other Banks or to a Related
Fund or (y) assign all or a portion equal to at least $5,000,000, of such Loans
or Commitments and related outstanding Obligations hereunder to one or more
Eligible Transferees each of which assignees shall become a party to this
Agreement as a Bank by execution of an assignment and assumption agreement
substantially in the form of Exhibit L (appropriately completed); provided that:
(i) at such time Schedule I shall be deemed modified to reflect the Commitments
of such new Bank and of the existing Banks; (ii) new Notes will be issued to
such new Bank and to the assigning Bank upon the request of such new Bank or
assigning Bank, such new Notes to be in conformity with the requirements of
Section 1.05 to the extent needed to reflect the revised Commitments; (iii) the
consent of the Administrative Agent, which consent shall not be unreasonably
withheld, shall be required in connection with any assignment (provided,
83
however, that no such consent by the Administrative Agent shall be required in
the case of any assignment to another Bank, any Bank's Affiliate or Related
Fund); and (iv) the Administrative Agent shall receive at the time of each such
assignment, from the assigning Bank, the payment of a non-refundable assignment
fee of $3,000. To the extent of any assignment pursuant to this Section
13.04(b), the assigning Bank shall be relieved of its obligations hereunder with
respect to its assigned Commitments. No transfer or assignment under this
Section 13.04(b) will be effective until recorded by the Administrative Agent on
the Register pursuant to Section 7.16. At the time of each assignment pursuant
to this Section 13.04(b) to a Person which is not already a Bank hereunder and
which is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for Federal income tax purposes, the respective
assignee Bank shall provide to the Borrower, as the case may be, and the
Administrative Agent the appropriate Internal Revenue Service Forms (and, if
applicable, a Section 3.04(b)(ii) Certificate) required by Section 3.04(b).
13.05 No Waiver; Remedies Cumulative. No failure or delay on
the part of the Administrative Agent or any Bank or any holder of any Note in
exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between Holdings, the Borrower or any other
Credit Party and the Administrative Agent or any Bank or the holder of any Note
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, power or privilege hereunder or under any other Credit Document
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder or thereunder. The rights, powers and
remedies herein or in any other Credit Document expressly provided are
cumulative and not exclusive of any rights, powers or remedies which the
Administrative Agent or any Bank or the holder of any Note would otherwise have.
No notice to or demand on any Credit Party in any case shall entitle any Credit
Party to any other or further notice or demand in similar or other circumstances
or constitute a waiver of the rights of the Administrative Agent or any Bank or
the holder of any Note to any other or further action in any circumstances
without notice or demand.
13.06 Payments Pro Rata. (a) The Administrative Agent agrees
that promptly after its receipt of each payment from or on behalf of any Credit
Party in respect of any Obligations hereunder, it shall distribute such payment
to the Banks pro rata based upon their respective shares, if any, of the
Obligations with respect to which such payment was received.
(b) Each of the Banks agrees that, if it should receive any
amount hereunder (whether by voluntary payment, by realization upon security, by
the exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Loans, Bank Commitment Commission or Fees, of a sum which with respect
to the related sum or sums received by other Banks is in a greater proportion
than the total of such Obligation then owed and due to such Bank bears to the
total of such Obligation then owed and due to all of the Banks immediately prior
to such receipt, then such Bank receiving such excess payment shall purchase for
cash without recourse or warranty from the other Banks an interest in the
Obligations of the respective Credit Party to such Banks in such amount as shall
result in a proportional participation by all the Banks in such amount; provided
that if all or any portion of such excess amount is thereafter recovered from
such Bank, such purchase shall be rescinded and the purchase price restored to
the extent of such recovery, but without interest.
84
13.07 Calculations; Computations. (a) The financial statements
to be furnished to the Banks pursuant hereto shall be made and prepared in
accordance with generally accepted accounting principles in the United States
consistently applied throughout the periods involved (except as set forth in the
notes thereto or as otherwise disclosed in writing by Holdings or the Borrower
to the Banks); provided that, except as otherwise specifically provided herein,
all computations of Excess Cash Flow and all computations determining compliance
with Sections 8.04 and 8.08 through 8.13, inclusive, including the definitions
used therein, shall utilize accounting principles and policies in conformity
with those used to prepare the historical financial statements delivered to the
Banks pursuant to Section 4.14.
(b) All computations of interest, Commitment Commission and
Fees hereunder shall be made on the basis of a year of 360 days for the actual
number of days (including the first day but excluding the last day) occurring in
the period for which such interest, Commitment Commission or Fees are payable.
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER
OF JURY TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, EXCEPT AS
OTHERWISE PROVIDED IN THE MORTGAGES, BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN
THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF
HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT
OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF
THE AFORESAID COURTS. EACH OF HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY
DESIGNATE, APPOINT AND EMPOWER CT CORPORATION SYSTEM WITH OFFICES ON THE DATE
HEREOF AT ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, AS THEIR DESIGNEE, APPOINTEE
AND AGENT TO RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN
RESPECT OF ITS PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES
AND DOCUMENTS WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING. IF FOR ANY
REASON SUCH DESIGNEE, APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS
SUCH, AND EACH OF HOLDINGS AND THE BORROWER AGREES TO DESIGNATE A NEW DESIGNEE,
APPOINTEE AND AGENT ON THE TERMS AND FOR THE PURPOSES OF THIS PROVISION
SATISFACTORY TO THE AGENT UNDER THIS AGREEMENT. EACH OF HOLDINGS AND THE
BORROWER FURTHER IRREVOCABLY CONSENT TO THE SERVICE OF PROCESS OUT OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO HOLDINGS OR THE
BORROWER AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURES BELOW, SUCH SERVICE TO
BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE
85
RIGHT OF THE ADMINISTRATIVE AGENT UNDER THIS AGREEMENT, ANY BANK OR THE HOLDER
OF ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE
LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY CREDIT PARTY IN ANY OTHER
JURISDICTION.
(b) EACH OF HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY WAIVE
ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH
THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN
CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD
OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
13.09 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument. A set of
counterparts executed by all the parties hereto shall be lodged with the
Borrower and the Administrative Agent.
13.10 Effectiveness. This Agreement shall become effective on
the date (the "Effective Date") on which (a) Holdings, the Borrower and each of
the Banks shall have signed a copy hereof (whether the same or different copies)
and shall have delivered the same to the Administrative Agent at its Notice
Office or, in the case of the Banks, shall have given to the Administrative
Agent telephonic (confirmed in writing), written or facsimile transmission
notice (actually received) in accordance with Section 13.03 at such office that
the same has been signed and mailed to it and (b) all fees and expenses owing to
the Agents pursuant to any agreements between the Borrower and the Agents shall
have been paid.
13.11 Headings Descriptive. The headings of the several
sections and subsections of this Agreement are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of this
Agreement.
13.12 Amendment or Waiver. (a) Neither this Agreement nor any
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the respective Credit Parties party thereto and the
Required Banks; provided that no such change, waiver, discharge or termination
shall, without the consent of each Bank (with Obligations of the respective
types being directly affected thereby): (i) extend the scheduled maturity of any
86
Loan or Note or extend any required amortization under Section 3.02(A)(a), or
reduce the rate or extend the time of payment of interest or Fees thereon
(except in connection with a waiver of applicability of any post-default
increase in interest rates), or reduce the principal amount thereof, or increase
the Commitments of any Bank over the amount thereof then in effect (it being
understood that a waiver of any Default or Event of Default or of a mandatory
reduction in the Total Commitment or a mandatory prepayment shall not constitute
an increase of the Commitment of any Bank, and that an increase in the available
portion of any Commitment of any Bank shall not constitute an increase in the
Commitment of such Bank); (ii) release all or substantially all of the
Collateral (except as expressly provided in the relevant Credit Documents);
(iii) amend, modify or waive any provision of this Section 13.12; (iv) reduce
the percentage specified in, or otherwise modify, the definition of Required
Banks (it being understood that, with the consent of the Required Banks,
additional extensions of credit pursuant to this Agreement may be included in
the determination of the Required Banks on substantially the same basis as the
extensions of Loans and Commitments are included on the Effective Date); or (v)
consent to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement; provided further, that no such change, waiver,
discharge or termination shall: (w) increase the Commitments of any Bank over
the amount thereof then in effect (it being understood that a waiver of any
conditions precedent, covenants, Defaults or Events of Default or of a mandatory
reduction in the Total Commitment or of a mandatory prepayment shall not
constitute an increase of the Commitment of any Bank, and that an increase in
the available portion of any Commitment of any Bank shall not constitute an
increase in the Commitment of such Bank) without the consent of such Bank; or
(x) without the consent of the Agents, amend, modify or waive any provision of
Section 11 or any other provision relating to the rights or obligations of the
Agents; or (y) without the consent of the Collateral Agent, amend, modify or
waive any provision of Section 11 or any other provision relating to the rights
or obligations of the Collateral Agent; or (z) amend, modify or waive any of the
definition of Conversion Date.
(b) If, in connection with any proposed change, waiver,
discharge or termination to any of the provisions of this Agreement as
contemplated by clause (a)(i) through (v), inclusive, of the first proviso to
Section 13.12(a), the consent of the Required Banks is obtained but the consent
of one or more of such other Banks whose consent is required is not obtained,
then the Borrower shall have the right to replace each such non-consenting Bank
or Banks (so long as all non-consenting Banks are so replaced) with one or more
Replacement Banks pursuant to Section 1.12 so long as at the time of such
replacement, each such Replacement Bank consents to the proposed change, waiver,
discharge or termination, provided that the Borrower shall not have the right to
replace a Bank solely as a result of the exercise of such Bank's rights (and the
withholding of any required consent by such Bank) pursuant to clauses (w) or (x)
of the second proviso to Section 13.12(a).
(c) Notwithstanding anything to the contrary contained above
in this Section 13.12, the Collateral Agent may (i) enter into amendments to the
Subsidiaries Guaranty and the Security Documents for the purpose of adding
additional Subsidiaries of Holdings (or other Credit Parties) as parties thereto
and (ii) enter into security documents to satisfy the requirements of Section
7.17, in each case without the consent of the Required Banks.
87
13.13 Survival. All indemnities set forth herein including,
without limitation, in Sections 1.10, 1.11, 3.04, 11.06 and 13.01 shall survive
the execution and delivery of this Agreement and the Notes and the making and
repayment of the Loans.
13.14 Domicile of Loans. Each Bank may transfer and carry
its Loans at, to or for the account of any office, Subsidiary or Affiliate of
such Bank.
13.15 Post-Closing Obligations. (a) The Borrower hereby
acknowledges that in connection with certain assignments hereof, the Agents or
any of the Banks may be required to obtain a rating of the Obligations and
Commitments hereunder of the Borrower and the Borrower hereby consent to such
Agent or Bank providing to the respective rating agency such information
regarding the Obligations and creditworthiness of the Borrower as is customary
practice of such rating agency.
(b) Notwithstanding anything to the contrary contained in this
Agreement, it is agreed that all Schedules and Exhibits to this Agreement will
be completed, be satisfactory to the Agents and the Required Banks and become
part of this Agreement on or prior to the Initial Borrowing Date.
88
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address:
10300 Metric Boulevard USOL HOLDINGS, INC.
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ By: ___________________________
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Title:
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇.
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ By: ___________________________
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Title:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Individually and as Administrative
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Agent and Syndication Agent
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
By:___________________________
Title:
By:___________________________
Title:
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ DEUTSCHE BANK AG, NEW YORK
New York, New York 10019 BRANCH,
Attention: ▇▇▇ ▇▇▇▇▇▇ as Documentation Agent
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
By:___________________________
Title:
By:___________________________
Title:
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ DEUTSCHE BANK AG, NEW YORK
New York, New York 10019 AND/OR CAYMAN ISLANDS
Attention: ▇▇▇ ▇▇▇▇▇▇ BRANCHES
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
By:___________________________
Title:
By:___________________________
Title:
Schedule I
----------
COMMITMENTS
-----------
Bank Commitment
------------------------- ----------------------
Paribas $17,500,000.00
------------------------- ----------------------
Deutsche Bank AG, New $17,500,000.00
York and/or Cayman
Islands Branches
------------------------- ----------------------
Total $35,000,000.00
------------------------- ----------------------
Schedule II
-----------
INSURANCE
---------
[ALL SCHEDULES (EXCEPT SCHEDULE I)
TO BE PROVIDED BY BORROWER]
Schedule III
------------
ERISA
-----
Schedule IV
-----------
REAL PROPERTY
-------------
Schedule V
----------
CAPITALIZATION
--------------
Schedule VI
-----------
SUBSIDIARIES
------------
Schedule VII
------------
EXISTING INDEBTEDNESS
---------------------
Schedule VIII
-------------
MATERIAL CONTRACTS
------------------
Schedule IX
-----------
EXISTING LIENS
--------------
TABLE OF CONTENTS
-----------------
Page
Section 1. Amount and Terms of Credit............................................................................1
1.01 The Commitments....................................................................................1
1.02 Minimum Amount of Each Borrowing...................................................................1
1.03 Notice of Borrowing................................................................................1
1.04 Disbursement of Funds..............................................................................2
1.05 Notes..............................................................................................2
1.06 Conversions........................................................................................3
1.07 Pro Rata Borrowings................................................................................4
1.08 Interest...........................................................................................4
1.09 Interest Periods...................................................................................5
1.10 Increased Costs, Illegality, etc...................................................................6
1.11 Compensation.......................................................................................8
1.12 Replacement of Banks...............................................................................8
1.13 Change of Lending Office...........................................................................9
Section 2. Fees; Reductions of Commitment........................................................................9
2.01 Fees...............................................................................................9
2.02 Voluntary Termination of Unutilized Commitments...................................................10
2.03 Mandatory Reduction of Commitments................................................................10
Section 3. Prepayments; Payments; Taxes.........................................................................11
3.01 Voluntary Prepayments..............................................................................11
3.02 Mandatory Repayments and Commitment Reductions....................................................11
3.03 Method and Place of Payment.......................................................................15
3.04 Net Payments......................................................................................15
Section 4. Conditions Precedent to Loans on the Initial Borrowing Date..........................................17
4.01 Execution of Agreement; Notes.....................................................................17
4.02 Officer's Certificate.............................................................................17
4.03 Opinions of Counsel...............................................................................17
4.04 Corporate Documents; Proceedings..................................................................17
4.05 Plans; Shareholders' Agreements; Management Agreements; Employment Agreements; Collective
Bargaining Agreements; Debt Agreements; Affiliate Contracts; Tax Sharing Agreements and
Material Contracts.............................................................................18
4.06 Pledge Agreement..................................................................................19
4.07 Security Agreement................................................................................19
4.08 Subsidiaries Guaranty.............................................................................20
4.09 Consent Letter....................................................................................20
(i)
Page
----
4.10 Material Adverse Change, etc......................................................................20
4.11 Litigation........................................................................................20
4.12 Fees, etc.........................................................................................20
4.13 Solvency Certificate; Insurance Analyses..........................................................20
4.14 Approvals.........................................................................................21
4.15 Financial Statements; Projections; Management Letter Reports......................................21
4.16 Refinancing.......................................................................................22
Section 5. Conditions Precedent to All Credit Events............................................................22
5.01 No Default; Representations and Warranties........................................................23
5.02 Notice of Borrowing...............................................................................23
5.03 Pro Forma Compliance..............................................................................23
5.04 ▇▇▇ Agreements....................................................................................23
Section 6. Representations, Warranties and Agreements...........................................................23
6.01 Corporate Status..................................................................................24
6.02 Corporate Power and Authority.....................................................................24
6.03 No Violation......................................................................................24
6.04 Governmental Approvals............................................................................24
6.05 Financial Statements; Financial Condition; Undisclosed Liabilities; Projections; etc..............25
6.06 Litigation........................................................................................26
6.07 True and Complete Disclosure......................................................................26
6.08 Use of Proceeds; Margin Regulations...............................................................26
6.09 Tax Returns and Payments..........................................................................26
6.10 Compliance with ERISA.............................................................................27
6.11 The Security Documents............................................................................28
6.12 Representations and Warranties in Documents.......................................................28
6.13 Properties........................................................................................28
6.14 Capitalization....................................................................................29
6.15 Subsidiaries......................................................................................29
6.16 Compliance with Statutes, etc.....................................................................29
6.17 Investment Company Act............................................................................29
6.18 Public Utility Holding Company Act................................................................29
6.19 Environmental Matters.............................................................................29
6.20 Labor Relations...................................................................................30
6.21 Patents, Licenses, Franchises and Formulas........................................................31
6.22 Indebtedness......................................................................................31
6.23 Restrictions on or Relating to Subsidiaries.......................................................31
6.24 The Transaction...................................................................................32
6.25 Material Contracts................................................................................32
6.26 Year 2000 Reprogramming...........................................................................32
(ii)
Page
----
Section 7. Affirmative Covenants................................................................................32
7.01 Information Covenants.............................................................................32
7.02 Books, Records and Inspections....................................................................35
7.03 Maintenance of Property, Insurance................................................................36
7.04 Corporate Franchises..............................................................................36
7.05 Compliance with Statutes, etc.....................................................................37
7.06 Compliance with Environmental Laws................................................................37
7.07 ERISA.............................................................................................37
7.08 End of Fiscal Years; Fiscal Quarters..............................................................39
7.09 Performance of Obligations........................................................................39
7.10 Payment of Taxes..................................................................................39
7.11 Interest Rate Protection..........................................................................39
7.12 Use of Proceeds...................................................................................39
7.13 UCC Searches......................................................................................39
7.14 Intellectual Property Rights......................................................................39
7.15 Year 2000 Reporting...............................................................................40
7.16 Registry..........................................................................................40
7.17 Further Actions...................................................................................41
7.18 Concentration Account.............................................................................41
7.19. Asset Transfer...................................................................................42
7.20 Landlord Agreements; UCC Fixture Filings..........................................................42
Section 8. Negative Covenants...................................................................................42
8.01 Liens.............................................................................................42
8.02 Consolidation, Merger, Purchase or Sale of Assets, etc............................................44
8.03 Dividends.........................................................................................46
8.04 Leases............................................................................................46
8.05 Indebtedness......................................................................................46
8.06 Advances, Investments and Loans...................................................................47
8.07 Transactions with Affiliates......................................................................48
8.08 Capital Expenditures..............................................................................48
8.09 Fixed Charge Coverage Ratio.......................................................................49
8.10 Interest Coverage.................................................................................49
8.11 Leverage Ratios...................................................................................50
8.12 Corporate Overhead Expenditures...................................................................51
8.13 Debt Base.........................................................................................51
8.14 Limitation on Voluntary Payments and Modification; Limitation on Modifications of
Certificate of Incorporation, By-Laws and Certain Other Agreements; etc........................51
8.15 Limitation on Certain Restrictions on Subsidiaries................................................52
8.16 Limitation on Issuance of Capital Stock...........................................................52
8.17 Business..........................................................................................52
8.18 Limitation on Creation of Subsidiaries............................................................52
8.19 Concentration Account.............................................................................52
(iii)
Page
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Section 9. Events of Default....................................................................................52
9.01 Payments..........................................................................................52
9.02 Representations, etc..............................................................................53
9.03 Covenants.........................................................................................53
9.04 Default Under Other Agreements....................................................................53
9.05 Bankruptcy, etc...................................................................................53
9.06 ERISA.............................................................................................54
9.07 Security Documents................................................................................54
9.08 Guaranties........................................................................................55
9.09 Judgments.........................................................................................55
9.10 Change in Control.................................................................................55
Section 10. Definitions and Accounting Terms....................................................................55
10.01 Defined Terms....................................................................................55
Section 11. The Agents..........................................................................................74
11.01 Appointment......................................................................................74
11.02 Nature of Duties.................................................................................74
11.03 Lack of Reliance on the Administrative Agent, the Syndication Agent and the Documentation
Agent..........................................................................................75
11.04 Certain Rights of the Administrative Agent, the Syndication Agent and the Documentation
Agent..........................................................................................75
11.05 Reliance.........................................................................................75
11.06 Indemnification..................................................................................76
11.07 The Administrative Agent, the Syndication Agent and the Documentation Agent in Their
Individual Capacities..........................................................................76
11.08 Holders..........................................................................................76
11.09 Resignation by the Agent.........................................................................77
Section 12. Guaranty............................................................................................77
12.01 The Guaranty.....................................................................................77
12.02 Bankruptcy.......................................................................................78
12.03 Nature of Liability..............................................................................78
12.04 Guaranty Absolute................................................................................78
12.05 Independent Obligation...........................................................................78
12.06 Authorization....................................................................................78
12.07 Reliance.........................................................................................79
12.08 Subordination....................................................................................79
12.09 Waiver...........................................................................................80
12.10 Guaranty Continuing..............................................................................80
12.11 Binding Nature of Guaranties.....................................................................81
12.12 Judgments Binding................................................................................81
(iv)
Page
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Section 13. Miscellaneous.......................................................................................81
13.01 Payment of Expenses, etc.........................................................................81
13.02 Right of Setoff..................................................................................82
13.03 Notices..........................................................................................82
13.04 Benefit of Agreement.............................................................................83
13.05 No Waiver; Remedies Cumulative...................................................................84
13.06 Payments Pro Rata................................................................................84
13.07 Calculations; Computations.......................................................................85
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL...........................85
13.09 Counterparts.....................................................................................86
13.10 Effectiveness....................................................................................86
13.11 Headings Descriptive.............................................................................86
13.12 Amendment or Waiver..............................................................................86
13.13 Survival.........................................................................................88
13.14 Domicile of Loans................................................................................88
13.15 Post-Closing Obligations.........................................................................88
SCHEDULE I Commitments
SCHEDULE II Insurance
SCHEDULE III ERISA
SCHEDULE IV Real Property
SCHEDULE V Capitalization
SCHEDULE VI Subsidiaries
SCHEDULE VII Existing Indebtedness
SCHEDULE VIII Material Contracts
SCHEDULE IX Existing Liens
EXHIBIT A-1....... Notice of Borrowing
EXHIBIT A-2....... Notice of Conversion
EXHIBIT B......... Promissory Note
EXHIBIT C......... Section 3.04(b)(ii) Certificate
EXHIBIT D......... Form of Opinion of Jenkens & ▇▇▇▇▇▇▇▇▇, P.C.
EXHIBIT E......... Officers' Certificate of Credit Parties
EXHIBIT F......... Pledge Agreement
EXHIBIT G......... Security Agreement
EXHIBIT H......... Subsidiaries Guaranty
EXHIBIT I......... Consent Letter
EXHIBIT J......... Solvency Certificate
EXHIBIT K......... Borrowing Base Certificate
EXHIBIT L......... Bank Assignment and Assumption Agreement
(v)
EXHIBIT A-1
NOTICE OF BORROWING
Paribas, as Administrative Agent
for the Banks party to the
Credit Agreement referred
to below
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ Aizenberg
Ladies and Gentlemen:
The undersigned, USOL, Inc. (the "Borrower"), refers to the Credit
Agreement, dated as of December 30, 1999 (as amended from time to time, the
"Credit Agreement," the terms defined therein being used herein as therein
defined), among USOL Holdings, Inc., the Borrower, certain financial
institutions from time to time party thereto (the "Banks"), you, as
Administrative Agent and Syndication Agent for such Banks, and Deutsche Bank AG,
New York Branch, as Documentation Agent, and hereby gives you notice,
irrevocably, pursuant to Section 1.03 of the Credit Agreement, that the
undersigned hereby requests a Borrowing under the Credit Agreement, and in that
connection sets forth below the information relating to such Borrowing (the
"Proposed Borrowing") as required by Section 1.03 of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is ______________. (1)
(ii) The aggregate principal amount of the Proposed Borrowing is $________.
(iii)The Loans to be made pursuant to the Proposed Borrowing shall be initially
maintained as [Base Rate Loans][Eurodollar Loans].(2)
[(iv)The initial Interest Period for the Proposed Borrowing is a one, two,
three, or six month period.](3)
The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the Proposed Borrowing:
(A) the representations and warranties contained in the Credit Agreement and
the other Credit Documents are and will be true and correct in all material
respects, before and after giving effect to the Proposed Borrowing and to
the application of the proceeds thereof (except for any representation and
warranty that speaks only as of a specific date, which shall be true and
correct in all material respects as of such date), as though made on such
date; [and]
(B) no Default or Event of Default has occurred and is continuing, or would
result from such Proposed Borrowing or from the application of the proceeds
thereof.
Very truly yours,
USOL, INC.
By:________________________________
Title:
1 Shall be a Business Day at least one Business Day in the case of Base Rate
Loans and three Business Days in the case of Eurodollar Loans, in each
case, after the date hereof.
2 Eurodollar Loans may not be incurred prior to the Syndication Termination
Date.
3 To be included for a Proposed Borrowing of Eurodollar Loans.
EXHIBIT A-2
NOTICE OF CONVERSION
Paribas, as Administrative Agent
for the Banks party to the
Credit Agreement referred
to below
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Ladies and Gentlemen:
The undersigned, USOL, Inc. (the "Borrower"), refers to the Credit
Agreement, dated as of December 30, 1999 (as amended from time to time, the
"Credit Agreement," the terms defined therein being used herein as therein
defined), among USOL Holdings, Inc., the Borrower, certain financial
institutions from time to time party thereto (the "Banks"), you, as
Administrative Agent and Syndication Agent for such Banks, and Deutsche Bank AG,
New York Branch, as Documentation Agent, and hereby gives you notice,
irrevocably, pursuant to Section 1.06 of the Credit Agreement, that the
undersigned hereby requests a conversion of a Loan under the Credit Agreement,
and in that connection sets forth below the information relating to such
Conversion (the "Proposed Conversion") as required by Section 1.06 of the Credit
Agreement:
(i) The Business Day of the Proposed Conversion is _______________.(1)
(ii) The aggregate principal amount of the Proposed Conversion is
$_______________.
(iii)The Borrowing[s] pursuant to which the Loan[s] in clause (ii) were made
[is/are] currently outstanding as [Base Rate/Eurodollar] Loans and [is/are]
hereby requested to be converted into [Eurodollar/Base Rate] Loans and was
made on _________ ___.
[(iv)The Loan[s] to be converted into Eurodollar Loans shall initially have an
Interest Period of a one, two, three or six month period.](2)
[The undersigned hereby certifies that on the date hereof, and on the date
of the Proposed Conversion, no Default or Event of Default has occurred and is
continuing, or would result from such Proposed Conversion or from the
application of the proceeds thereof.](2)
Very truly yours,
USOL, INC.
By:_________________________________
Title:
------------------------
1 Shall be a Business Day at least three Business Days after the earlier of
(i) the date hereof and (ii) the date on which telephonic notice was given
(which telephonic notice was promptly confirmed in writing).
2 To be included in the event the Loan is to be converted into a Eurodollar
Loan.
EXHIBIT B
PROMISSORY NOTE
$__________ New York, New York
____________, 1999
FOR VALUE RECEIVED, USOL, INC., a [Delaware] corporation (the
"Borrower"), hereby promises to pay to the order of __________ (the "Bank"), in
lawful money of the United States of America in immediately available funds, at
the office of Paribas (the "Administrative Agent") located at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, on the Maturity Date (as defined in the
Agreement referred to below) the principal sum of ____________ DOLLARS or, if
less, the then unpaid principal amount of all Loans (as defined in the
Agreement) made by the Bank pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid
principal amount hereof in like money at said office from the date hereof until
paid at the rates and at the times provided in Section 1.08 of the Agreement
referred to below.
This Note is one of the Notes referred to in the Credit
Agreement, dated as of December 30, 1999, among USOL Holdings, Inc., the
Borrower, the financial institutions from time to time party thereto (including
the Bank) and the Administrative Agent (as from time to time in effect, the
"Agreement") and is entitled to the benefits thereof. This Note is also entitled
to the benefits of the Guaranties (as defined in the Agreement) and is secured
by and entitled to the benefits of the Security Documents (as defined in the
Agreement). As provided in the Agreement, this Note is subject to voluntary
prepayment and mandatory repayment prior to the Maturity Date, in whole or in
part.
In case an Event of Default (as defined in the Agreement)
shall occur and be continuing, the principal of and accrued interest on this
Note may be declared to be due and payable in the manner and with the effect
provided in the Agreement.
The Borrower hereby waives presentment, demand, protest or
notice of any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
USOL, INC.
By:______________________________
Title:
EXHIBIT C
Section 3.04(b)(ii) Certificate
Reference is hereby made to the Credit Agreement, dated as of
December 30, 1999, among USOL Holdings, Inc., USOL, Inc., the lenders from time
to time party thereto, Paribas, as Administrative Agent and Syndication Agent,
and Deutsche Bank AG, New York Branch, as Documentation Agent, as amended to the
date hereof (the "Credit Agreement"). Pursuant to the provisions of Section
3.04(b)(ii) of the Credit Agreement, the undersigned hereby certifies that it is
not a "bank" as such term is used in Section 881(c)(3)(A) of the Internal
Revenue Code of 1986, as amended.
[NAME OF BANK]
By:_________________________________
Title:
Date:
EXHIBIT D
[FORM OF OPINION LETTER]
[Date]
To the Agents, the Collateral Agent
and each of the Banks party to the
Credit Agreement referred to below
Gentlemen:
We have acted as counsel to USOL Holdings, Inc., an [Oregon]
corporation ("Holdings") and USOL, Inc., a Delaware corporation (the "Borrower"
and together with Holdings and all Subsidiary Guarantors, each a "Credit Party"
and collectively, the "Credit Parties"), in connection with the preparation,
execution and delivery of the Credit Agreement, dated as of December 30, 1999
(the "Credit Agreement"), among Holdings, the Borrower, the financial
institutions party thereto from time to time (the "Banks"), Paribas, as
Administrative Agent (the "Administrative Agent") and Syndication Agent (the
"Syndication Agent"), and Deutsche Bank AG, New York Branch, as Documentation
Agent (the "Documentation Agent" and together with the Administrative Agent and
Syndication Agent, the "Agents"), and the transactions contemplated thereby
(including, without limitation, the Acquisitions). Unless otherwise defined
herein, terms used herein shall have the respective meanings set forth in the
Credit Agreement.
In connection with this opinion, I have examined originals or
copies, certified or otherwise identified to my satisfaction, of such documents
as I have deemed necessary or appropriate as a basis for the opinions set forth
herein, including, without limitation, the following: (a) the Credit Documents,
including the UCC financing statements referred to in our opinions set forth
herein, (b) the Debt Termination Documents, and (c) such other public, corporate
documents and records as we deem necessary or appropriate in connection with
this opinion (the documents referred to in clauses (a) through (c) are
collectively referred to herein as the "Documents").
This opinion is delivered to you pursuant to Section 4.03(i)
of the Credit Agreement.
In rendering our opinion we have assumed the genuineness of
all signatures (other than the Credit Parties), the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies. As to questions of fact not
independently verified by us we have relied, to the extent we deemed
appropriate, upon
representations and certificates of officers of the Credit Parties, public
officials and other appropriate persons.
Based upon the foregoing, we are of the opinion that:
1. Each Credit Party (i) is a duly organized and validly
existing corporation in good standing under the laws of the state of its
incorporation, (ii) has the corporate power and authority to own its property
and assets and to transact the business in which it is engaged and presently
proposes to engage and (iii) is duly qualified and is authorized to do business
and is in good standing in each jurisdiction where the ownership, leasing or
operation of its property or the conduct of its business requires such
qualifications except for failures to be so qualified which, in the aggregate,
would not reasonably be expected to have a material adverse effect on the
performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of any Credit Party
or any Credit Party and its Subsidiaries taken as a whole.
2. Each Credit Party has the corporate power and authority to
execute, deliver and perform the terms and provisions of each of the Documents
to which it is a party and has taken all necessary corporate action to authorize
the execution, delivery and performance of the Documents to which it is a party.
Each Credit Party has duly executed and delivered each of the Documents to which
it is a party, and each of such Documents constitutes the legal, valid and
binding obligation of such Credit Party enforceable in accordance with its
terms, except as the enforceability thereof may be limited by bankruptcy,
reorganization, moratorium or similar laws relating to or limiting creditors'
rights generally or by general equitable principles (regardless of whether the
issue of enforceability is considered in a proceeding in equity or at law).
3. Neither the execution, delivery or performance by any
Credit Party of the Documents to which it is a party, nor compliance by it with
the terms and provisions thereof, nor consummation of the transactions
contemplated therein, (a) will contravene any provision of any law, statute,
rule or regulation (including, without limitation, Regulations T, U and X of the
Board of Governors of the Federal Reserve System and usury laws), (b) will
contravene any order, writ, injunction or decree known to us of any court or
governmental instrumentality applicable to any Credit Party, (c) will conflict
with or result in any breach of, any of the terms, covenants, conditions or
provisions of, or constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any Lien (except pursuant
to the Security Documents) upon any of the property or assets of any Credit
Party pursuant to the terms of any indenture, mortgage, deed of trust, credit
agreement or loan agreement, or any other Material Contract to which any Credit
Party is a party or by which it or any of its property or assets is bound or to
which it may be subject or (d) will violate any provision of the Certificate of
Incorporation or By-Laws (or similar organizational documents) of any Credit
Party.
4. To the best of our knowledge, there are no actions, suits
or proceedings pending or threatened (i) with respect to any Document or the
transactions contemplated thereby or (ii) that could reasonably be likely to
materially and adversely affect the performance, operations, business, assets,
nature of assets, liabilities, operations, properties, condition (financial
or otherwise) or prospects of any Credit Party or any Credit Party and its
Subsidiaries taken as a whole.
5. No order, consent, approval, license, authorization, or
validation of, or filing, recording or registration with (except as have been
obtained or made prior to the date hereof and are in full force and effect and
except for the additional filing of financing statements, mortgages and other
documents required by the Security Documents as described below), or exemption
by, any governmental or public body or authority, or any subdivision thereof, is
required to authorize, or is required in connection with, (a) the execution,
delivery and performance of any Document, (b) the legality, validity, binding
effect or enforceability of any such Document or (c) the Transaction.
6. Neither Holdings, the Borrower nor any of their
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
7. Neither Holdings, the Borrower nor any of their
Subsidiaries is a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company" within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
8. The Transaction has been consummated in all material
respects in accordance with the terms and conditions of the respective Documents
and all applicable laws. All consents and approvals of, and filings and
registrations with, and all other actions in respect of, all governmental
agencies, authorities or instrumentalities and third parties required in order
to consummate each part of the Transaction have been obtained, given, filed or
taken and are in full force and effect. All applicable waiting periods with
respect thereto have expired without, in all such cases, any action being taken
by any competent authority which restrains, prevents, or imposes material
adverse conditions upon the consummation of the Transaction. Additionally, we
are not aware of any judgment, order or injunction prohibiting or imposing
material adverse conditions on the consummation of the Transaction and we are
not aware of any judgment, order or injunction prohibiting or imposing material
adverse conditions upon the occurrence of any Credit Event or the performance by
Holdings, the Borrower or any of their Subsidiaries of their obligations under
the Documents.
9. On the date hereof and after giving effect to the
Transaction and the other transactions contemplated thereby: (a) the authorized
capital stock of Holdings consists of (i) ________ shares of common stock
("Holdings Common Stock"), $______ par value par share, of which ________ shares
are issued and outstanding and (ii) no shares of preferred stock, and (b) the
authorized capital stock of the Borrower consists of (i) __________ shares of
common stock, $_____ par value per share, of which ________ shares are issued
and outstanding and owned by Holdings ("Borrower Common Stock", together with
the Holdings Common Stock, the "Common Stock") and (ii) no shares of preferred
stock. All such Common Stock has been duly and validly issued, are fully paid
and nonassessable and are free of preemptive rights. All such Common Stock is
owned of record by the Persons and in the amounts set forth on Schedule I.
Neither Holdings nor any of its Subsidiaries has outstanding any securities
convertible into or
exchangeable for its capital stock or outstanding any rights to subscribe for or
to purchase, or any options for the purchase of, or any agreement providing for
the issuance (contingent or otherwise) of, or any calls, commitments or claims
of any character relating to, its capital stock, or any stock appreciation or
similar right with respect thereto.
10. To the best of our knowledge, on the date hereof and after
giving effect to the Transaction, the entities listed on Schedule VIII to the
Credit Agreement are the only Subsidiaries of each of Holdings and the Borrower.
To the best of our knowledge, Schedule VIII to the Credit Agreement correctly
sets forth the direct and indirect ownership interests of Holdings and the
Borrower in each class of capital stock of each of its Subsidiaries as of the
date hereof.
11. Each Credit Party that is a party to the Pledge Agreement
is the record owner of all of the Stock and Notes (as each such terms are
defined in the Pledge Agreement) as listed on Annex B and Annex C to the Pledge
Agreement under such Credit Party's name. After giving effect to the delivery to
the Collateral Agent of the Pledged Stock and the Pledged Notes listed on Annex
B and Annex C to the Pledge Agreement, and assuming the continued possession at
all times hereafter by the Collateral Agent of such Pledged Stock and Pledged
Notes (as defined in the Pledge Agreement) in the State of New York, the
security interest created in favor of the Collateral Agent under the Pledge
Agreement constitutes a valid and enforceable perfected security interest in
such Pledged Securities and proceeds thereof in favor of the Pledgee (as defined
in the Pledge Agreement) for the benefit of the Secured Creditors, subject to no
security interest of any other person assuming that neither the Collateral Agent
nor any of the Banks has notice, at or prior to the time of delivery, of such
Pledged Securities to the Collateral Agent of any adverse claim, and no filings
or recordings are required in order to perfect the security interests created
under the Pledge Agreement.
12. The Security Agreement creates a valid and enforceable
security interest in favor of the Collateral Agent in the Collateral therein
described which constitutes property in which the security interest can be
granted under the UCC as in effect in the States set forth on Annex A (the
"Relevant States"). We have examined the financing statements (the "Financing
Statements") to be filed in the filing offices listed for each party on Annex B
attached hereto (the "Filing Offices") which are in proper form for filing, and
upon the filing of the Financing Statements in the Filing Offices, assuming that
the representations made by each Credit Party in the Security Agreement with
respect to the location of its Collateral (as defined in the Security Agreement)
are and remain true and correct, the perfection of the security interest granted
by such Credit Party to the Collateral Agent under the Security Agreement, with
respect to all Collateral thereunder will have been accomplished and the
security interests granted to the Collateral Agent pursuant to the Security
Agreement in and to such Collateral will constitute a valid and a perfected
security interest therein to the extent that such Collateral consists of the
type of property in which a security interest may be perfected by filing a
financing statement under the UCC as in effect in the Relevant States and no
further filings or recordings of any document or instrument or other action will
be required so to perfect the security interests except for continuation
statements.
13. Assuming that the representation made by each Credit Party
in Section 2.4 of the Security Agreement with respect to the location of its
chief executive office is and remains
true and correct under the law of the State of New York, the perfection and
priority of the security interests granted by each such Credit Party in its
Receivables, Contracts, Contract Rights and General Intangibles (as defined in
the Security Agreement) are governed by the laws of ____________ [State where
such Credit Party's chief executive office is located] to the extent that said
Receivables, Contracts, Contract Rights and General Intangibles consist of
"accounts" and "general intangibles" as described in the New York UCC.
14. We have examined the Patent and Trademark Assignments (the
"Patent and Trademark Filings") and the Copyright Assignments (the "Copyright
Filings") attached hereto as Annexes C and D, respectively. The recordation of
the Security Agreement and the Patent and Trademark Filings in the United States
Patent and Trademark Offices and the filing of the Financing Statements with the
Filing Offices will be effective, under federal law, to perfect the security
interest granted to the Collateral Agent in the trademarks and patents covered
by the Security Agreement, and the filing of the Security Agreement and the
Copyright Filing with the United States Copyright Office and the filing of the
Financing Statements with the Filing Offices will be effective under federal law
to perfect the security interest granted to the Collateral Agent in the
copyrights covered by the Security Agreement.
15. The submission by the Credit Parties to the non-exclusive
jurisdiction of the courts of New York or of the United States for the Southern
District of New York, as set forth in the Credit Documents is valid and binding
on the Parties.
We are members of the Bar of the State of __________ and,
except as described in the following sentence, our opinion set forth in
paragraphs 12 and 13 above (to the extent governed by law other than that of the
United States of America, and the States of ___________ and Delaware) is based
upon my review of generally available compilations of the law relating to such
matters. We do not hold ourselves out as being conversant with, and express no
opinion as to, the laws of any jurisdiction other than those of the United
States of America, the State of ___________ and the general corporate law of the
State of Delaware. To the extent our opinions are governed by laws other than
that of the United States of America, _____________ and the general corporate
law of the State of Delaware, we have assumed that the laws of such other states
are the same as those of _______________.
This opinion letter is solely for your benefit and for the
benefit of each Bank from time to time party to the Credit Agreement, their
participants and assigns, and may not be relied upon by any other person without
our prior written consent. This opinion may not be relied upon for any other
purpose, or relied upon by any other person, firm or corporation for any
purpose, without our prior written consent.
Very truly yours,
[---------------]
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
EXHIBIT E
[NAME OF CREDIT PARTY]
Officers' Certificate
I, the undersigned, [President/Vice President] of [Name of
Credit Party], a corporation organized and existing under the laws of the State
of ________ (the "Company"), do hereby certify on behalf of the Company that:
1. This Certificate is furnished pursuant to the Credit
Agreement, dated as of December 30, 1999, among USOL Holdings, Inc.
("Holdings"), USOL, Inc. (the "Borrower"), the financial institutions from time
to time party thereto, and Paribas, as Administrative Agent and Syndication
Agent, and Deutsche Bank AG, New York Branch, as Documentation Agent (such
Credit Agreement, as in effect on the date of this Certificate, being herein
called the "Credit Agreement"). Unless otherwise defined herein, capitalized
terms used in this Certificate shall have the meanings set forth in the Credit
Agreement.
2. The following named individuals are elected officers of the
Company, each holds the office of the Company set forth opposite his name and
has held such office as of the date of the signing of any Credit Document. The
signature written opposite the name and title of each such officer is his
correct signature.
Name(1) Office Signature
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3. Attached hereto as Exhibit A is a certified copy of the
Certificate of Incorporation of the Company as filed in the Office of the
Secretary of State of the State of ____________ on _______, 19__, together with
all amendments thereto adopted through the date hereof.
4. Attached hereto as Exhibit B is a true and correct copy of
the By-Laws of the Company, together with all amendments thereto, which were
duly adopted and are in full force and effect on the date hereof.
5. Attached hereto as Exhibit C is a true and correct copy of
resolutions which were duly adopted on __________, 19__ [by unanimous written
consent of the Board of Directors of the Company] [by a meeting of the Board of
Directors of the Company at which a quorum was present and acting throughout],
and said resolutions have not been rescinded, amended or modified. Except as
attached hereto as Exhibit C, no resolutions have been adopted by the Board of
Directors of the Company which deal with the execution, delivery or performance
of any of the Documents to which the Company is party.
[6. Attached hereto as Exhibit D are true and correct copies
of all Employee Benefit Plans of Holdings and its Subsidiaries.
7. Attached hereto as Exhibit E are true and correct copies of
all Shareholders' Agreements with respect to the capital stock of Holdings and
its Subsidiaries.
8. Attached hereto as Exhibit F are true and correct copies
of all Management Agreements of Holdings and its Subsidiaries.
9. Attached hereto as Exhibit G are true and correct copies
of all Employment Agreements of Holdings and its Subsidiaries.
10. Attached hereto as Exhibit H are true and correct copies
of all Collective Bargaining Agreements of Holdings and its Subsidiaries.
11. Attached hereto as Exhibit I are true and correct copies
of all Debt Agreements of Holdings and its Subsidiaries.
12. Attached hereto as Exhibit J are true and correct copies
of all Tax Sharing Agreements entered into by Holdings or any of its
Subsidiaries.
13. Attached hereto as Exhibit K are true and correct copies
of all Affiliate Contracts of Holdings or any of its Subsidiaries.
14. Attached hereto as Exhibit K are true and correct copies
of all Material Contracts of Holdings or any of its Subsidiaries.
15. Attached hereto as Exhibit M are true and correct copies
of the Debt Termination Documents.
[6.] [16.] On the date hereof, all of the conditions in
Sections 4.10, 4.11, 4.14, 4.16, 5.01, 5.02 and 5.03 have been satisfied (except
to the extent as to the acceptability of any items to the Agent and/or the
Required Banks or as to whether the Agent and/or the Required Banks are
satisfied with any of the matters described in said Sections).
[7.] [17.] On the date hereof, the representations and
warranties contained in the Credit Agreement and in the other Credit Documents
are true and correct in all material respects,
both before and after giving effect to each Credit Event to occur on the date
hereof and the application of the proceeds thereof.
[8.] [18.] On the date hereof, no Default or Event of Default
has occurred and is continuing or would result from the Credit Events to occur
on the date hereof or from the application of the proceeds thereof.]
[9.] [19.] There is no proceeding for the dissolution or
liquidation of the Company or threatening its existence.
IN WITNESS WHEREOF, I have hereunto set my hand this ___ day
of ____, 1999.
[NAME OF CREDIT PARTY]
--------------------------------
Name:
Title:
I, the undersigned, [Secretary/Assistant Secretary] of the Company, do hereby
certify that:
1. [Name of Person making above certifications] is the
duly elected and qualified [President/Vice President] of the Company and the
signature above is his genuine signature.
2. The certifications made by [name of Person making above
certifications] in Items 2, 3, 4, 5, [11], [17] and [19] above are true and
correct.
IN WITNESS WHEREOF, I have hereunto set my hand this ___ day
of ____, 1999.
[NAME OF CREDIT PARTY]
------------------------------
Name:
EXHIBIT F
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of December __, 1999 (as amended,
modified or supplemented from time to time, the "Agreement"), made by each of
the undersigned (each, a "Pledgor" and collectively the "Pledgors"), in favor of
PARIBAS, as Collateral Agent (the "Pledgee"), for the benefit of (x) the Banks
(as defined below) and the Administrative Agent (as defined below) under, and
any other lender from time to time party to the Credit Agreement hereinafter
referred to (such Banks, the Agent and the other lenders, if any, are
hereinafter called the "Bank Creditors") and (y) if Paribas in its individual
capacity, any Bank or a syndicate of financial institutions organized by Paribas
or any such Bank or an affiliate of Paribas or such Bank enter into one or more
(i) interest rate protection agreements (including, without limitation, interest
rate swaps, caps, floors, collars and similar agreements), (ii) foreign exchange
contracts, currency swap agreements or other similar agreements or arrangements
designed to protect against the fluctuations in currency values and/or (iii)
other types of hedging agreements from time to time (collectively, the "Interest
Rate Protection or Other Hedging Agreements"), with, or guaranteed by, the
Borrower (as defined below), Paribas, any such Bank or an affiliate of Paribas
or such Bank (even if Paribas or any such Bank ceases to be a Bank under the
Credit Agreement for any reason) and any such institution that participates in
such Interest Rate Protection or Other Hedging Agreements and their subsequent
assigns (collectively, the "Other Creditors" and, together with the Bank
Creditors, are herein called the "Secured Creditors"). Except as otherwise
defined herein, terms used herein and defined in the Credit Agreement shall be
used herein as therein defined.
W I T N E S S E T H :
WHEREAS, USOL Holdings, Inc. ("Holdings"), USOL, Inc. (the
"Borrower"), various financial institutions from time to time party thereto (the
"Banks"), Paribas, as Administrative Agent (the "Administrative Agent") and
Syndication Agent, and Deutsche Bank AG, New York Branch, as Documentation
Agent, have entered into a Credit Agreement, dated as of December 30, 1999,
providing for the making of Loans as contemplated therein (as used herein, the
term "Credit Agreement" means the Credit Agreement described above in this
paragraph, as the same may be amended, modified, extended, renewed, replaced,
restated, supplemented, restructured or refinanced from time to time, and
including any agreement extending the maturity of, refinancing or restructuring
(including, but not limited to, the inclusion of additional borrowers thereunder
that are Subsidiaries of Holdings and whose obligations are guaranteed by the
Borrower thereunder or any increase in the amount borrowed) all or any portion
of, the Indebtedness under such agreement or any successor agreements; provided,
that with respect to any agreement providing for the refinancing of Indebtedness
under the Credit Agreement, such agreement shall only be treated as, or as part
of, the Credit Agreement hereunder if (i) either (A) all obligations under the
Credit Agreement being refinanced shall be paid in full at the time of such
refinancing, and all commitments issued pursuant to the refinanced Credit
Agreement shall have terminated in accordance with their terms or (B) the
Required Banks shall have consented in writing to the refinancing Indebtedness
being treated, along with their Indebtedness, as Indebtedness pursuant to the
Credit Agreement, (ii) the refinancing Indebtedness
shall be permitted to be incurred under the Credit Agreement being refinanced
(if such Credit Agreement is to remain outstanding) and (iii) a notice to the
effect that the refinancing Indebtedness shall be treated as issued under the
Credit Agreement shall be delivered by the Borrower to the Collateral Agent);
WHEREAS, pursuant to the Holdings Guaranty, Holdings has
guaranteed to the Secured Creditors the payment when due of all obligations and
liabilities of the Borrower under or with respect to the Credit Documents and
each Interest Rate Protection or Other Hedging Agreements with one or more Other
Creditors;
WHEREAS, pursuant to the Subsidiaries Guaranty, each
Subsidiary of Holdings other than the Borrower (if any) have jointly and
severally guaranteed the payment when due of all obligations and liabilities of
the Borrower under or with respect to the Credit Documents and each Interest
Rate Protection Agreement or Other Hedging Agreement entered into with one or
more Other Creditors;
WHEREAS, the Borrower desires to incur Loans pursuant to the
Credit Agreement;
WHEREAS, the Borrower may at any time and from time to time
enter into one or more Interest Rate Protection or Other Hedging Agreements with
one or more Other Creditors;
WHEREAS, it is a condition to each of the above-described
extensions of credit to the Borrower that each Pledgor shall have executed and
delivered this Agreement to the Pledgee; and
WHEREAS, each Pledgor desires to execute this Agreement to
satisfy the conditions described in the preceding paragraph;
NOW, THEREFORE, in consideration of the benefits accruing to
each Pledgor, the receipt and sufficiency of which are hereby acknowledged, each
Pledgor hereby makes the following representations and warranties to the
Pledgees for the benefit of the Secured Creditors and hereby covenants and
agrees with the Pledgee for the benefit of the Secured Creditors as follows:
1. SECURITY FOR OBLIGATIONS. This Agreement is made by
each Pledgor for the benefit of the Secured Creditors to secure:
(i) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations and
indebtedness (including, without limitation, indemnitees, fees and interest
thereon) of the Borrower and such Pledgor owing to the Bank Creditors, now
existing or hereafter incurred under, arising out of or in connection with any
Credit Document and the due performance and compliance by the Borrower and such
Pledgor with the terms of each such Credit Document (all such obligations and
liabilities under this clause (i), except to the extent consisting of
obligations or indebtedness with respect to Interest Rate
Protection or Other Hedging Agreements, being herein collectively called the
"Credit Document Obligations");
(ii) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations and
indebtedness (including, without limitation, indemnitees, fees and interest
thereon) of the Borrower and such Pledgor owing to the Other Creditors, now
existing or hereafter incurred under, arising out of or in connection with any
Interest Rate Protection or Other Hedging Agreement including, in the case of
Holdings and each Subsidiary Guarantor, all obligations under the Holdings
Guaranty or the Subsidiaries Guaranty in respect of Interest Rate Protection or
Other Hedging Agreements (all such obligations and indebtedness under this
clause (ii) being herein collectively called the "Interest Rate Protection
Obligations");
(iii) any and all sums advanced by the Pledgee in order to
preserve the Collateral (as defined in Section 3.4 herein) or preserve its
security interest in the Collateral;
(iv) in the event of any proceeding for the collection or
enforcement of any indebtedness, obligations, or liabilities referred to in
clauses (i), (ii) and (iii) above, after an Event of Default (such term, as used
in this Agreement, shall mean any Event of Default under, and as defined in, the
Credit Agreement, or any payment default under any Interest Rate Protection or
Other Hedging Agreement and shall in any event include, without limitation, any
payment default on any of the Obligations (as hereinafter defined)) shall have
occurred and be continuing, the reasonable expenses of retaking, holding,
preparing for sale or lease, selling or otherwise disposing or realizing on the
Collateral, or of any exercise by the Pledgee of its rights hereunder, together
with reasonable attorneys' fees and court costs; and
(v) all amounts paid by any Indemnitee as to which
such Indemnitee has the right to reimbursement under Section 11 of this
Agreement;
all such obligations, liabilities, sums and expenses set forth in clauses (i)
through (v) of this Section 1 being herein collectively called the
"Obligations"; provided, that it is acknowledged and agreed that the
"Obligations" shall include extensions of credit of the types described above,
whether outstanding on the date of this Agreement or extended from time to time
after the date of this Agreement.
2. DEFINTIONS; ANNEXES. (a) Unless otherwise defined herein, all
capitalized terms used herein and defined in the Credit Agreement shall be used
herein as therein defined. Reference to singular terms shall include the plural
and vice versa.
(b) The following capitalized terms used herein shall have the
definitions specified below:
"Administrative Agent" shall have the meaning provided in the
preamble to this Agreement.
"Adverse Claim" shall have the meaning given such term in
Section 8-102(a)(1) of the UCC.
"Agreement" shall have the meaning provided in the preamble to
this Agreement.
"Bank Creditors" shall have the meaning provided in the
preamble to this Agreement.
"Banks" shall have the meaning provided in the recitals to the
Agreement.
"Borrower" shall have the meaning provided in the recitals to
this Agreement
"Certificated Security" shall have the meaning given such term
in Section 8-102(a)(4) of the UCC and shall in any event include all Stock and
Notes.
"Clearing Corporation" shall have the meaning provided such
term in Section 8-102(a)(5) of the UCC.
"Collateral" shall have the meaning provided in Section 3.1.
"Collateral Accounts" means any and all accounts established
and maintained by the Pledgee in the name of the Pledgor to which Collateral may
be credited.
"Credit Agreement" shall have the meaning provided in the
recitals to this Agreement.
"Credit Document Obligations" shall have the meaning provided
in Section 1 to this Agreement.
"Domestic Corporation" shall have the meaning provided in the
definition of "Stock."
"Event of Default" shall have the meaning provided in Section
1 to this Agreement.
"Foreign Corporation" shall have the meaning provided in the
definition of "Stock."
"Holdings" shall have the meaning provided in the recitals to
this Agreement.
"Indemnitees" has the meaning set forth in Section 11 hereof.
"Interest Rate Protection or Other Hedging Agreements" shall
have the meaning provided in the preamble to this Agreement.
"Investment Property" has the meaning given such term in
Section 9-115(f) of the UCC.
"Obligations" shall have the meaning provided in Section 1 to
this Agreement.
"Other Creditors" shall have the meaning provided in the
preamble to this Agreement.
"Notes" means all promissory notes at any time issued to the
Pledgors by any its Subsidiaries or Affiliates or any other person.
"Pledged Notes" shall have the meaning provided in Section 3.5
to this Agreement.
"Pledged Securities" shall have the meaning provided in
Section 3.5 to this Agreement.
"Pledged Stock" shall have the meaning provided in Section 3.5
to this Agreement.
"Pledgee" shall have the meaning provided in the preamble to
this Agreement.
"Pledgor" shall have the meaning provided in the preamble to
this Agreement.
"Proceeds" shall have the meaning provided such term in
Section 9-306(l) of the UCC. "Secured Creditors" shall have
the meaning provided in the preamble to this Agreement.
"Securities Act" means the Securities Act of 1933, as amended,
as in effect from time to time.
"Security" and "Securities" shall have the meaning given such
term in Section 8-102(a)(15) of the UCC and shall in any event include all Stock
(to the extent same constitute "Securities" under Section 8-102(a)(15)) and
Notes.
"Security Entitlement" shall have the meaning provided such
term in Section 8-102(a)(17) of the UCC.
"Stock" means (x) with respect to corporations incorporated
under the laws of the United States or any State or territory thereof (each a
"Domestic Corporation"), all of the issued and outstanding shares of capital
stock of any corporation at any time owned by the Pledgor of any Domestic
Corporation and (y) with respect to corporations not Domestic Corporations (each
a "Foreign Corporation"), all of the issued and outstanding shares of capital
stock at any time owned by the Pledgor of any Foreign Corporation.
"Termination Date" has the meaning set forth in Section 19
hereof to this Agreement.
"UCC" means the Uniform Commercial Code as in effect in the
State of New York from time to time.
"Uncertificated Security" shall have the meaning provided
such term in Section 8-102(a)(18) of the UCC.
3. PLEDGE OF SECURITY INTEREST, ETC.
3.1 Pledge. To secure the Obligations now or hereafter owed or
to be performed by the Borrower, the Pledgor does hereby grant, pledge and
assign to the Pledgee for the benefit of the Pledgee and the Banks, and does
hereby create a continuing security interest in favor of the Pledgee for the
benefit of the Pledgee and the Banks, all of the right, title and interest of
the Pledgor in and to any and all of the following, whether now existing or
hereafter from time to time acquired (collectively, the "Collateral");
(a) all Securities;
(b) all Security Entitlements and
(c) all Proceeds of any and all of the foregoing.
3.2 Procedures. (a) To the extent that the Pledgor at any time
or from time to time owns, acquires or obtains any right, title or interest in
any Collateral, such Collateral shall automatically (and without the taking of
any action by the respective Pledgor) be pledged pursuant to Section 3.1 of this
Agreement and, in addition thereto, such Pledgor shall (to the extent provided
below) take the following actions as set forth below (as promptly as practicable
and, in any event, within 10 days after it obtains such Collateral) for the
benefit of the Pledgee and the Secured Creditors:
(i) with respect to a Certificated Security (other than a
Certificated Security credited on the books of a Clearing Corporation),
the respective Pledgor shall physically deliver such Certificated
Security to the Pledgee, accompanied by undated stock powers duly
executed in blank, or such other instruments of transfer as are
acceptable to the Pledgee;
(ii) with respect to an Uncertificated Security (other than an
Uncertificated Security credited on the books of a Clearing
Corporation), the respective Pledgor shall cause the issuer of such
Uncertificated Security to duly authorize and execute, and deliver to
the Pledgee, an agreement for the benefit of the Pledgee and the
Secured Creditors substantially in the form of Annex A hereto
(appropriately completed to the satisfaction of the Pledgee and with
such modifications, if any, as shall be satisfactory to the Pledgee)
pursuant to which such issuer agrees to comply with any and all
instructions originated by the Pledgee without further consent by the
registered owner and not to comply with instructions regarding such
Uncertificated Security originated by any other Person other than a
court of competent jurisdiction;
(iii) with respect to a Certificated Security or
Uncertificated Security, credited on the books of a Clearing
Corporation (including a Federal Reserve Bank, Participants Trust
Company or The Depository Trust Company), the Pledgor shall promptly
take all actions required (i) to comply with the applicable rules of
such Clearing Corporation and (ii) to perfect the security interest of
the Pledgee under applicable law (including, in any event, under
Sections 9-115 (4)(a) and (b), 9-115 (1)(e) and 8-106 (d) of the UCC).
The Pledgor further agrees to take such actions as the Pledgee deems
necessary or desirable to effect the foregoing;
(iv) with respect to a Security Entitlement, the Pledgor shall
promptly take all actions required to perfect the security interest of
the Pledgee under applicable law (including, in any event, under
Sections 9-115(4)(a) and (b), 9-115(1)(e) and 8-106(d) of the UCC). The
Pledgor further agrees to take such actions as the Pledgee deems
necessary or desirable to effect the foregoing; and
(v) with respect to a Note, the respective Pledgor shall
physically deliver such Note to the Pledgee, duly endorsed in blank.
(b) In addition to the actions required to be taken pursuant
to proceeding Section 3.2(a), the Pledgor shall take the following additional
actions with respect to the Collateral:
(i) with respect to all Collateral of the Pledgor whereby or
with respect to which the Pledgee may obtain "control" thereof within
the meaning of Section 8-106 of the UCC (or under any provision of the
UCC as same may be amended or supplemented from time to time, or under
the laws of any relevant State other than the State of New York), the
Pledgor shall take all actions as may be requested from time to time by
the Pledgee so that "control" of such Collateral is obtained and at all
times held by the Pledgee; and
(ii) the Pledgor shall from time to time cause appropriate
financing statements (on Form UCC-1 or other appropriate form) under
the Uniform Commercial Code as in effect in the various relevant
States, on form covering all Collateral hereunder (with the form of
such financing statements to be satisfactory to the Pledgee), to be
filed in the relevant filing offices so that at all times the Pledgee
has a security interest in all Investment Property and other Collateral
which is perfected by the filing of such financing statements (in each
case to the maximum extent perfection by filing may be obtained under
the laws of the relevant States, including, without limitation, Section
9-115(4)(b) of the UCC).
3.3 Subsequently Acquired Collateral. If the Pledgor shall
acquire (by purchase, stock dividend or otherwise) any additional Collateral at
any time or from time to time after the date hereof, such Collateral shall
automatically (and without any further action being required to be taken) be
subject to the pledge and security interests created pursuant to Section 3.1
and, furthermore, the Pledgor will promptly thereafter take (or cause to be
taken) all action with respect to such Collateral in accordance with the
procedures set forth in Section 3.2, and will promptly thereafter deliver to the
Pledgee (i) a certificate executed by a principal executive officer of such
Pledgor describing such Collateral and certifying that the same has been duly
pledged in
favor of the Pledgee (for the benefit of the Secured Creditors) hereunder and
(ii) supplements to Annexes A, B and C hereto as are necessary to cause such
annexes to be complete and accurate at such time.
3.4 Transfer Taxes. Each pledge of Collateral under Section
3.1 or Section 3.3 shall be accompanied by any transfer tax and other revenue
stamps, acquired at the Pledgor's expense, affixed and cancelled, as required in
connection with the pledge of such Collateral.
3.5 Definition of Pledged Stock, Pledged Notes and Pledged
Securities. All Stock at any time pledged or required to be pledged hereunder is
hereinafter called the "Pledged Stock," all Notes at any time pledged or
required to be pledged hereunder are hereinafter called the "Pledged Notes." All
of the Pledged Stock and Pledged Notes together are hereinafter called the
"Pledged Securities."
3.6 Certain Representations and Warranties Regarding the
Collateral. The Pledgor represents and warrants that on the date hereof (i) the
Stock held by such Pledgor consists of the number and type of shares of the
stock of the corporations as described in Annex B hereto; (ii) such Stock
constitutes that percentage of the issued and outstanding capital stock of the
issuing corporation as is set forth in Annex B hereto, (iii) the Notes consist
of the promissory notes described in Annex C hereto; (iv) the Pledgor has
complied with the respective procedure set forth in Section 3.2(a) with respect
to each item of Collateral described in Annex B hereto; (v) it is the legal,
record and sole beneficial owner of, and has good and marketable title to, the
Stock and Notes described in Section 2 hereof subject to direct ownership
thereof as listed in Annex B and Annex C hereto and there exist no options or
preemptive rights in respect of any of the Stock and (vi) on the date hereof,
such Pledgor owns no other Securities.
4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. The Pledgee
shall have the right to appoint one or more sub-agents for the purpose of
retaining physical possession of the Collateral, which may be held (in the
discretion of the Pledgee) in the name of each Pledgor, endorsed or assigned in
blank or in favor of the Pledgee or any nominee or nominees of the Pledgee or a
sub-agent appointed by the Pledgee.
5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until
an Event of Default shall have occurred and be continuing and written notice
thereof shall be given by the Pledgee to the relevant Pledgor (provided that if
any of the Defaults specified in Section 9.05 of the Credit Agreement shall
occur, no such notice should be required), each Pledgor shall be entitled to
exercise any and all voting and other consensual rights pertaining to the
Collateral owned by it and to give consents, waivers or ratifications in respect
thereof; provided, that no vote shall be cast or any consent, waiver or
ratification given or any action taken which would violate or be inconsistent
with any of the terms of this Agreement, any other Credit Document or any
Interest Rate Protection or Other Hedging Agreement (collectively, the "Secured
Debt Agreements"), or which would have the effect of impairing the position or
interests of the Pledgee or any Secured Creditor. All such rights of each
Pledgor to vote and to give consents, waivers and ratifications shall cease in
case an Event of Default shall occur and be continuing, and Section 7 hereof
shall become applicable.
6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless an Event of
Default shall have occurred and be continuing (or would occur as a result
thereof), all cash dividends payable in respect of the Pledged Stock and all
payments in respect of the Pledged Notes shall be paid to the respective
Pledgor; provided, that all cash dividends payable in respect of the Pledged
Stock which are determined by the Pledgee, in its sole discretion, to represent
in whole or in part an extraordinary, liquidating or other distribution in
return of capital shall be paid, to the extent so determined to represent an
extraordinary, liquidating or other distribution in return of capital, to the
Pledgee and retained by it as part of the Collateral. The Pledgee shall also be
entitled to receive directly, and to retain as part of the Collateral:
(i) all other or additional stock or other securities or
property (including, but not limited to, cash dividends other than as set forth
above) paid or distributed by way of dividend or otherwise in respect of the
Collateral;
(ii) all other or additional stock or other securities or
property (including, but not limited to, cash) paid or distributed in respect of
the Collateral by way of stock-split, spin-off, split-up, reclassification,
combination of shares or similar rearrangement;
(iii) all other or additional stock or other securities or
property (including, but not limited to, cash) which may be paid in respect of
the Collateral by reason of any consolidation, merger, exchange of stock,
conveyance of assets, liquidation or similar corporate reorganization; and
(iv) all other property (other than cash) paid or
distributed by way of dividend or distribution in respect of the Collateral.
Nothing contained in this Section 6 shall limit or restrict in any way the
Pledgee's right to receive proceeds of the Collateral in any form in accordance
with Section 3 of this Agreement. All dividends, distributions or other payments
which are received by any Pledgor contrary to the provisions of this Section 6
and Section 7 shall be received in trust for the benefit of the Pledgee, shall
be segregated from other property or funds of such Pledgor and shall be
forthwith paid over to the Pledgee as Collateral in the same form as so received
(with any necessary endorsement).
7. REMEDIES IN CASE OF EVENT OF DEFAULT. In case an Event of
Default shall have occurred and be continuing, the Pledgee shall be entitled to
exercise all of the rights, powers and remedies (whether vested in it by this
Agreement or by any other Credit Document or by law) for the protection and
enforcement of its rights in respect of the Collateral, including, without
limitation, all the rights and remedies of a secured party upon default under
the Uniform Commercial Code of the State of New York, and the Pledgee shall be
entitled, without limitation, to exercise the following rights, which each
Pledgor hereby agrees to be commercially reasonable:
(i) to receive all amounts payable in respect of the Collateral payable to
such Pledgor under Section 6;
(ii) to transfer all or any part of the Collateral into the Pledgee's name
or the name of its nominee or nominees;
(iii) to accelerate any Pledged Note which may be accelerated in accordance
with its terms, and take any other action to collect upon any Pledged Note
(including, without limitation, to make any demand for payment thereon);
(iv) to vote all or any part of the Collateral (whether or not transferred
into the name of the Pledgee) and give all consents, waivers and ratifications
in respect of the Collateral and otherwise act with respect thereto as though it
were the outright owner thereof (each Pledgor hereby irrevocably constituting
and appointing the Pledgee the proxy and attorney-in-fact of such Pledgor, with
full power of substitution to do so);
(v) at any time or from time to time to sell, assign and deliver, or grant
options to purchase, all or any part of the Collateral, or any interest therein,
at any public or private sale, without demand of performance, advertisement or
notice of intention to sell or of the time or place of sale or adjournment
thereof or to redeem or otherwise (all of which are hereby waived by each
Pledgor), for cash, on credit or for other property, for immediate or future
delivery without any assumption of credit risk, and for such price or prices and
on such terms as the Pledgee in its absolute discretion may determine; provided,
that at least 10 days' notice of the time and place of any such sale shall be
given to such Pledgor. The Pledgee shall not be obligated to make such sale of
Collateral regardless of whether any such notice of sale has theretofore been
given. Each purchaser at any such sale shall hold the property so sold
absolutely free from any claim or right on the part of the Pledgor, and the
Pledgor hereby waives and releases to the fullest extent permitted by law any
right or equity of redemption with respect to the Collateral, whether before or
after sale hereunder, all rights, if any, of marshalling the Collateral and any
other security for the Obligations or otherwise, and all rights, if any, of stay
and/or appraisal which it now has or may at any time in the future have under
rule of law or statute now existing or hereafter enacted. At any such sale,
unless prohibited by applicable law, the Pledgee on behalf of all Secured
Creditors (or certain of them) may bid for and purchase (by bidding in
Obligations or otherwise) all or any part of the Collateral so sold free from
any such right or equity of redemption. Neither the Pledgee nor any Secured
Creditor shall be liable for failure to collect or realize upon any or all of
the Collateral or for any delay in so doing nor shall any of them be under any
obligation to take any action whatsoever with regard thereto; and
(vi) to set-off any and all Collateral against any and all Obligations, and
to withdraw any and all cash or other Collateral from any and all Collateral
Accounts and to apply such cash and other Collateral to the payment of any and
all Obligations.
8. REMEDIES, ETC., CUMULATIVE. Each right, power and remedy of
the Pledgee provided for in this Agreement or any other Credit Document or now
or hereafter existing at law or in equity or by statute shall be cumulative and
concurrent and shall be in addition to every other such right, power or remedy.
The exercise or beginning of the exercise by
the Pledgee or any Secured Creditor of any one or more of the rights, powers or
remedies provided for in this Agreement or any other Secured Debt Agreement or
now or hereafter existing at law or in equity or by statute or otherwise shall
not preclude the simultaneous or later exercise by the Pledgee or any Secured
Creditor of all such other rights, powers or remedies, and no failure or delay
on the part of the Pledgee or any Secured Creditor to exercise any such right,
power or remedy shall operate as a waiver thereof. Unless otherwise required by
the Loan Documents, no notice to or demand on the Pledgor in any case shall
entitle such Pledgor to any other or further notice or demand in similar other
circumstances or constitute a waiver of any of the rights of the Pledgee or any
Secured Creditor to any other or further action in any circumstances without
demand or notice. The Secured Creditors agree that this Agreement may be
enforced only by the action of the Agent or the Pledgee, in each case acting
upon the instructions of the Required Banks (or, after the date on which all
Credit Document Obligations have been paid in full, the holders of at least the
majority of the other outstanding Obligations) and that no other Secured
Creditor shall have any right individually to seek to enforce or to enforce this
Agreement or to realize upon the security to be granted hereby, it being
understood and agreed that such rights and remedies may be exercised by the
Administrative Agent or the Pledgee or the holders of at least a majority of the
other outstanding Obligations, as the case may be, for the benefit of the
Secured Creditors upon the terms of this Agreement and the other Credit
Documents.
9. APPLICATION OF PROCEEDS. (a) All moneys collected by the
Pledgee upon any sale or other disposition of the Collateral pursuant to the
terms of this Agreement, together with all other moneys received by the Pledgee
hereunder, shall be applied in the manner provided in the Security Agreement.
(b) It is understood and agreed that the Pledgors shall remain
jointly and severally liable to the extent of any deficiency between the amount
of the proceeds of the Collateral hereunder and the aggregate amount of the
Obligations.
10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral
by the Pledgee hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise), the receipt of the Pledgee or the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold, and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money paid
over to the Pledgee or such officer or be answerable in any way for the
misapplication or nonapplication thereof.
11. INDEMNITY.
11.1 Indemnity. (a) Each Pledgor jointly and severally agrees
to indemnify, reimburse and hold the Pledgee, each Secured Creditor and their
respective successors, permitted assigns, employees, agents and servants
(hereinafter in this Section 11.1 referred to individually as "Indemnitee," and
collectively as "Indemnities") harmless from any and all liabilities,
obligations, damages, injuries, penalties, claims, demands, actions, suits,
judgments and any and all costs, expenses or disbursements (including reasonable
out-of-pocket attorneys' fees and expenses and
liabilities for penalties) (for the purposes of this Section 11.1 the foregoing
are collectively called "expenses") of whatsoever kind and nature imposed on,
asserted against or incurred by any of the Indemnities in any way relating to or
arising out of this Agreement, any other Credit Document or any other document
executed in connection herewith and therewith or in any other way connected with
the administration of the transactions contemplated hereby and thereby or the
enforcement of any of the terms of, or the preservation of any rights under any
thereof, the violation of the laws of any country, state or other governmental
body or unit, any tort or contract claim; provided, that no Indemnitee shall be
indemnified pursuant to this Section 11.1(a) for losses, damages or liabilities
to the extent caused by the gross negligence or willful misconduct of such
Indemnitee; and provided further that the Pledgor shall not be requested to pay
for the legal fees and expenses of more than one outside counsel for all persons
indemnified under this Section 11 unless in the written opinion of outside
counsel reasonably satisfactory to the Pledgor, representation of all such
indemnified persons would be inappropriate due to the existence of an actual or
potential conflict of interest. In no event shall any Indemnitee be liable for
any matter or thing in connection with this Agreement other than to account for
moneys actually received by it in accordance with the terms hereof. Each Pledgor
agrees that upon written notice by any Indemnitee of the assertion of such a
liability, obligation, damage, injury, penalty, claims, demand, action, judgment
or suit, such Pledgor shall assume full responsibility for the defense thereof.
Each Indemnitee agrees to use its best efforts to promptly notify the relevant
Pledgor of any such assertion of which such Indemnitee has knowledge.
(b) Without limiting the application of Section 11.1(a), each
Pledgor jointly and severally agrees to pay or reimburse the Pledgee for any and
all fees, costs and expenses of whatever kind or nature incurred in connection
with the creation, preservation or protection of the Pledgee's Liens on, and
security interest in, the Collateral, including, without limitation, all fees
and taxes in connection with the recording or filing of instruments and
documents in public offices, payment or discharge of any taxes or Liens upon or
in respect of the Collateral and all other fees, costs and expenses in
connection with protecting, maintaining or preserving the Collateral and the
Pledgee's interest therein, whether through judicial proceedings or otherwise,
or in defending or prosecuting any actions, suits or proceedings arising out of
or relating to the Collateral.
(c) If and to the extent that the obligations of any Pledgor
under this Section 11 are unenforceable for any reason, such Pledgor hereby
agrees to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
11.2 Indemnity Obligations Secured by Collateral; Survival.
Any amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Obligations secured by the Collateral. The
indemnity obligations of each Pledgor contained in this Section 11 shall
continue in full force and effect notwithstanding the full payment of all the
Notes issued under the Credit Agreement, the termination of all Interest Rate
Protection or Other Hedging Agreements and the payment of all other Obligations
and notwithstanding the discharge thereof.
12. FURTHER ASSURANCES; POWER-OF-ATTORNEY. (a) Each Pledgor
agrees that it will join with the Pledgee in executing and, at such Pledgor's
own expense, file and refile under the UCC such financing statements,
continuation statements and other documents in such offices as the Pledgee may
deem necessary or appropriate and wherever required or permitted by law in order
to perfect and preserve the Pledgee's security interest in the Collateral and
hereby authorizes the Pledgee to file financing statements and amendments
thereto relative to all or any part of the Collateral without the signature of
such Pledgor where permitted by law, and agrees to do such further acts and
things and to execute and deliver to the Pledgee such additional conveyances,
assignments, agreements and instruments as the Pledgee may reasonably require or
deem advisable to carry into effect the purposes of this Agreement or to further
assure and confirm unto the Pledgee its rights, powers and remedies hereunder.
(b) Each Pledgor hereby appoints the Pledgee as its
attorney-in-fact, with full authority in the place and stead of such Pledgor and
in the name of such Pledgor or otherwise, from time to time after the occurrence
and during the continuance of an Event of Default, in the Pledgee's discretion
to take any lawful action and to execute any instrument which the Pledgee may
reasonably deem necessary or advisable to accomplish the purposes of this
Agreement.
13. THE PLEDGEE AS COLLATERAL AGENT. The Pledgee will hold in
accordance with this Agreement all items of the Collateral at any time received
under this Agreement. It is expressly understood and agreed by the parties
hereto and each Secured Creditor, by accepting the benefits of this Agreement,
acknowledges and agrees that the obligations of the Pledgee as holder of the
Collateral and interests therein and with respect to the disposition thereof,
and otherwise under this Agreement, are only those expressly set forth in this
Agreement. The Pledgee shall act hereunder on the terms and conditions set forth
herein and under the Credit Agreement.
14. TRANSFER BY PLEDGORS. No Pledgor will sell or otherwise
dispose of, grant any option with respect to, or mortgage, pledge or otherwise
encumber any of the Collateral or any interest therein (except as may be
permitted in accordance with the terms of this Agreement and the Credit
Documents).
15. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PLEDGOR. Each
Pledgor represents, warrants and covenants that: (i) it is the legal, beneficial
and record owner of, and has good and marketable title to, all Collateral
consisting of one or more Securities and that it has sufficient interest in all
Collateral in which a security interest is purported to be created hereunder for
such security interest to attach (subject, in each case, to no pledge, lien,
mortgage, hypothecation, security interest, charge, option, Adverse Claim or
other encumbrance whatsoever, except the liens and security interests created by
this Agreement); (ii) it has the full corporate power, authority and legal right
to pledge all the Securities pledged by it pursuant to this Agreement; (iii)
this Agreement has been duly authorized, executed and delivered by such Pledgor
and constitutes a legal, valid and binding obligation of such Pledgor
enforceable in accordance with its terms, except to the extent that the
enforceability hereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
and by equitable principles (regardless of whether enforcement is sought in
equity
or at law); (iv) except to the extent already obtained or made, no consent of
any other party (including, without limitation, any stockholder, limited or
general partners, member or creditor of the Pledgor or any of their Subsidiaries
or other entity in which the Pledgor owns any equity interest) and no consent,
license, permit, approval or authorization of, exemption by, notice or report
to, or registration, filing or declaration with, any governmental authority is
required to be obtained by the Pledgor in connection with (a) the execution,
delivery or performance of this Agreement, (b) the validity or enforceability of
this Agreement (except as set forth in clause (iii) above), (c) the perfection
or enforceability of the Pledgee's security interest in the Collateral or (d)
except for compliance with or as may be required by applicable securities laws,
the exercise by the Pledgee of any of its rights or remedies provided herein;
(v) the execution, delivery and performance of this Agreement does not violate
any provision of any applicable law or regulation or of any order, judgment,
writ, award or decree of any court, arbitrator or governmental authority,
domestic or foreign, or of the certificate of incorporation or by-laws or
limited partnership agreement or limited liability company agreement, as the
case may be, of such Pledgor or of any securities issued by such Pledgor or any
of its Subsidiaries, or of any mortgage, indenture, lease, deed of trust,
agreement, instrument or undertaking to which such Pledgor or any of its
Subsidiaries is a party or which purports to be binding upon such Pledgor or any
of its Subsidiaries or upon any of their respective assets and will not result
in the creation or imposition (or the obligation to create or impose) of any
lien or encumbrance on any of the assets of such Pledgor or any of its
Subsidiaries except as contemplated by this Agreement; (vi) all the shares of
Stock have been duly and validly issued, are fully paid and nonassessable; (vii)
to the best knowledge of Pledgor, each of its Pledged Notes, when executed by
the obligor thereof, will be the legal, valid and binding obligation of such
obligor, enforceable in accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
and by equitable principles (regardless of whether enforcement is sought in
equity or at law); and (viii) the pledge, collateral assignment and delivery to
the Pledgee of the Collateral pursuant to this Agreement creates a valid and
perfected first priority security interest in such Collateral, and the proceeds
thereof, subject to no prior Lien or encumbrance or to any agreement purporting
to grant to any third party a Lien or encumbrance on the property or assets of
such Pledgor which would include the Collateral and the Pledgee is entitled to
all the rights, priorities and benefits afforded by the UCC or other relevant
law as enacted in any relevant jurisdiction to perfect security interests in
respect of the Collateral; and (ix) "control" (as defined in Section 8-106 of
the UCC) has been obtained by the Pledgee over all Collateral consisting of
Securities with respect to which such "control" may be obtained pursuant to
Section 8-106 of the UCC. Each Pledgor covenants and agrees that it will defend
the Pledgee's right, title and security interest in and to the Collateral
pledged by it pursuant to this Agreement and the proceeds thereof against the
claims and demands of all persons whomsoever, and such Pledgor covenants and
agrees that it will have like title to and right to pledge any other property at
any time hereafter pledged to the Pledgee as Collateral hereunder and will
likewise defend the right thereto and security interest therein of the Pledgee
and the Secured Creditors. Each Pledgor covenants and agrees that it will take
no action which would violate any of the terms of any Credit Document.
16. CHIEF EXECUTIVE OFFICE; RECORDS. The chief executive
office of the Pledgor is located at the address specified in Annex D hereto. The
Pledgor will not move its chief executive office except to such new location as
such Pledgor may establish in accordance with the last sentence of this Section
16. The originals of all documents in the possession of the Pledgor evidencing
all Collateral, and the only original books of account and records of the
Pledgor relating thereto are, and will continue to be, kept at such chief
executive office at the location specified in Annex C hereto, or at such new
locations as the Pledgor may establish in accordance with the last sentence of
this Section 16. The Pledgor shall not establish a new location for such offices
until (i) it shall have given to the Collateral Agent not less than 30 days'
prior written notice of its intention so to do, clearly describing such new
location and providing such other information in connection therewith as the
Collateral Agent may reasonably request and (ii) with respect to such new
location, it shall have taken all action, satisfactory to the Collateral Agent,
to maintain the security interest of the Collateral Agent in the Collateral
intended to be granted hereby at all times fully perfected and in full force and
effect. Promptly after establishing a new location for such offices in
accordance with the immediately preceding sentence, the respective Pledgor shall
deliver to the Pledgee a supplement to Annex D hereto so as to cause such Annex
D hereto to be complete and accurate.
17. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC. The obligations of
each Pledgor under this Agreement shall be absolute and unconditional and shall
remain in full force and effect without regard to, and shall not be released,
suspended, discharged, terminated or otherwise affected by, any circumstance or
occurrence whatsoever (other than termination of this Agreement pursuant to
Section 19), including, without limitation: (i) any renewal, extension,
amendment or modification of or addition or supplement to or deletion from any
Credit Document or any other instrument or agreement referred to therein, or any
assignment or transfer of any thereof; (ii) any waiver, consent, extension,
indulgence or other action or inaction under or in respect of any such agreement
or instrument or this Agreement; (iii) any furnishing of any additional security
to the Pledgee or its assignee or any acceptance thereof or any release of any
security by the Pledgee or its assignee; (iv) any limitation on any party's
liability or obligations under any such instrument or agreement or any
invalidity or unenforceability, in whole or in part, of any such instrument or
agreement or any term thereof; or (v) any bankruptcy, insolvency,
reorganization, composition, adjustment, dissolution, liquidation or other like
proceeding relating to such Pledgor or any Subsidiary of such Pledgor, or any
action taken with respect to this Agreement by any trustee or receiver, or by
any court, in any such proceeding, whether or not such Pledgor shall have notice
or knowledge of any of the foregoing.
18. REGISTRATION, ETC. (a) If an Event of Default shall have
occurred and be continuing and the Pledgor shall have received from the Pledgee
a written request or requests that such Pledgor cause any registration,
qualification or compliance under any Federal or state securities law or laws to
be effected with respect to all or any part of the Collateral consisting of
Securities, such Pledgor as soon as practicable and at its expense will use its
best efforts to cause such registration to be effected (and be kept effective)
and will use its best efforts to cause such qualification and compliance to be
effected (and be kept effective) as may be so requested and as would permit or
facilitate the sale and distribution of such Collateral consisting of
Securities,
including, without limitation, registration under the Securities Act of 1933, as
then in effect (or any similar statute then in effect), appropriate
qualifications under applicable blue sky or other state securities laws and
appropriate compliance with any other governmental requirements; provided, that
the Pledgee shall furnish to such Pledgor such information regarding the Pledgee
as such Pledgor may request in writing and as shall be required in connection
with any such registration, qualification or compliance. The Pledgor will cause
the Pledgee to be kept reasonably advised in writing as to the progress of each
such registration, qualification or compliance and as to the completion thereof,
will furnish to the Pledgee such number of prospectuses, offering circulars and
other documents incident thereto as the Pledgee from time to time may reasonably
request, and will indemnify, to the extent permitted by law, the Pledgee and all
other Secured Creditors participating in the distribution of such Collateral
consisting of Securities against all claims, losses, damages and liabilities
caused by any untrue statement (or alleged untrue statement) of a material fact
contained therein (or in any related registration statement, notification or the
like) or by any omission (or alleged omission) to state therein (or in any
related registration statement, notification or the like) a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as the same may have been caused by an untrue
statement or omission based upon information furnished in writing to such
Pledgor by the Pledgee expressly for use therein.
(b) If at any time when the Pledgee shall determine to
exercise its right to sell all or any part of the Collateral consisting of
Securities pursuant to Section 7, and such Collateral or the part thereof to be
sold shall not, for any reason whatsoever, be effectively registered under the
Securities Act of 1933, as then in effect, the Pledgee may, in its sole and
absolute discretion, sell such Collateral or part thereof by private sale in
such manner and under such circumstances as the Pledgee may deem necessary or
advisable in order that such sale may legally be effected without such
registration. Without limiting the generality of the foregoing, in any such
event the Pledgee, in its sole and absolute discretion: (i) may proceed to make
such private sale notwithstanding that a registration statement for the purpose
of registering such Collateral or part thereof shall have been filed under such
Securities Act; (ii) may approach and negotiate with a single possible purchaser
to effect such sale; and (iii) may restrict such sale to a purchaser who will
represent and agree that such purchaser is purchasing for its own account, for
investment, and not with a view to the distribution or sale of such Collateral
or part thereof. In the event of any such sale, the Pledgee shall incur no
responsibility or liability for selling all or any part of the Collateral at a
price which the Pledgee, in its sole and absolute discretion, may in good ▇▇▇▇▇
▇▇▇▇ reasonable under the circumstances, notwithstanding the possibility that a
substantially higher price might be realized if the sale were deferred until the
registration as aforesaid.
19. TERMINATION, RELEASE. (a) On the Termination Date (as
defined below), this Agreement shall terminate (provided that all indemnities
set forth herein including, without limitation, in Section 11 hereof shall
survive any such termination) and the Pledgee, at the request and expense of the
respective Pledgor, will execute and deliver to such Pledgor a proper instrument
or instruments acknowledging the satisfaction and termination of this Agreement
(including, without limitation, UCC termination statements and instruments of
satisfaction, discharge and/or reconveyance), and will duly assign, transfer and
deliver to such Pledgor
(without recourse and without any representation or warranty) such of the
Collateral as may be in the possession of the Pledgee and as has not theretofore
been sold or otherwise applied or released pursuant to this Agreement, together
with any moneys at the time held by the Pledgee or any of its sub-agents
hereunder and, with respect to any Collateral consisting of an Uncertificated
Security (other than an Uncertificated Security credited on the books of a
Clearing Corporation), a termination of the agreement relating thereto executed
and delivered by the issuer of such Uncertificated Security pursuant to Section
3.2(a)(ii). As used in this Agreement, "Termination Date" shall mean the date
upon which the Total Commitment and all Interest Rate Protection and Other
Hedging Agreements have been terminated, no Note is outstanding (and all Loans
have been paid in full), and all other Obligations then owing have been paid in
full and there shall exist no outstanding unsatisfied claim for reimbursement
that has been made by any Indemnitee pursuant to Section 11.2.
(b) In the event that any part of the Collateral is sold or
otherwise transferred in connection with a sale or other transfer permitted by
the Credit Agreement or is otherwise released at the direction of the Required
Banks (or all the Banks if required by Section 13.12 of the Credit Agreement),
and the proceeds of such sale or sales or from such transfer or release are
applied in accordance with the terms of the Credit Agreement, such Collateral
will be sold free and clear of the Liens created by this Agreement and the
Pledgee, at the request and expense of the respective Pledgor, will duly assign,
transfer and deliver to such Pledgor (without recourse and without any
representation or warranty) such of the Collateral of such Pledgor as is then
being (or has been) so sold or released and as may be in possession of the
Pledgee and has not theretofore been released pursuant to this Agreement.
(c) At any time that a Pledgor desires that Collateral be
released as provided in the foregoing Section 19(a) or (b), it shall deliver to
the Pledgee a certificate signed by its chief financial officer or another
authorized senior officer stating that the release of the respective Collateral
is permitted pursuant to Section 19(a) or (b). If requested by the Pledgee
(although the Pledgee shall have no obligation to make any such request), the
relevant Pledgor shall furnish appropriate legal opinions (from counsel, which
may be in-house counsel, reasonably acceptable to the Pledgee) to the effect set
forth in the immediately preceding sentence. The Pledgee shall have no liability
whatsoever to any Secured Creditor as the result of any release of Collateral by
it as permitted by this Section 19.
(d) The Pledgee shall have no liability whatsoever to any
Secured Creditor as the result of any release of Collateral by it in accordance
with this Section 19.
20. NOTICES, ETC. All notices and other communications hereunder shall be
in writing (including telegraphic, telex, facsimile transmission or cable
communication) and shall be delivered, mailed, telegraphed, telexed, facsimile
transmitted or cabled, addressed:
(a) if to any Pledgor, at its address set forth opposite its
signature below;
(b) if to the Pledgee, at:
Paribas
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ Aizenberg
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇;
(c) if to any Bank Creditor, either (x) to the Administrative
Agent, at the address of the Administrative Agent specified in the Credit
Agreement or (y) at such address as such Bank Creditor shall have specified in
the Credit Agreement;
(d) if to any Other Creditor, to the Representative for the
Other Creditors, at such address as such Representative may have provided to the
Borrower and the Pledgee from time to time, or, in the absence of a
Representative, directly to the Other Creditors at such address as the Other
Creditors shall have specified in writing to the Borrower and the Pledgee;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder. All such notices
and communications shall, when mailed, telegraphed, telexed, facsimile
transmitted or cabled or sent by overnight courier, be effective on the third
Business Day following deposit in the mails, certified, return receipt
requested, when delivered to the telegraph company, cable company or on the day
following delivery to an overnight courier, as the case may be, or sent by telex
or facsimile device, except that notices and communications to the Collateral
Agent shall not be effective until received by the Collateral Agent.
21. THE PLEDGEE. The Pledgee will hold, directly or indirectly
in accordance with this Agreement, all items of the Collateral at any time
received by it under this Agreement. It is expressly understood and agreed that
the obligations of the Pledgee with respect to the Collateral, interests therein
and the disposition thereof, and otherwise under this Agreement, are only those
expressly set forth in the UCC and this Agreement.
22. WAIVER; AMENDMENT. None of the terms and conditions of
this Agreement may be changed, waived, modified or varied in any manner
whatsoever unless in writing duly signed by the affected Pledgor and the Pledgee
(with the written consent of the Required Banks (or all the Banks if required by
Section 13.12 of the Credit Agreement)); provided, that any change, waiver,
modification or variance affecting the rights and benefits of a single Class (as
defined below) of Secured Creditors (and not all Secured Creditors in a like or
similar manner) shall require the written consent of the Requisite Creditors (as
defined below) of such Class. For the purpose of this Agreement, the term
"Class" shall mean each class of Secured Creditors, whether (i) the Bank
Creditors as holders of the Credit Document Obligations or (ii) the Other
Creditors as holders of the Interest Rate
Protection Obligations. For the purpose of this Agreement, the term "Requisite
Creditors" of any Class shall mean each of (i) with respect to the Credit
Document Obligations, the Required Banks and (ii) with respect to the Interest
Rate Protection Obligations, the holders of at least a majority of all
obligations outstanding from time to time under the Interest Rate Protection or
Other Hedging Agreements.
23. MISCELLANEOUS. This Agreement shall create a continuing
security interest in the Collateral and shall (i) remain in full force and
effect, subject to release and/or termination as set forth in Section 19, (ii)
be binding upon the Pledgor, its successors and assigns; provided, however, that
the Pledgor shall not assign any of its rights or obligations hereunder without
the prior written consent of the Pledgee (with the prior written consent of the
Required Banks or all the Banks if required by Section 13.12 of the Credit
Agreement), and (iii) inure, together with the rights and remedies of the
Pledgee hereunder, to the benefit of the Pledgee, the Secured Creditors and
their respective successors, transferees and assigns. THIS AGREEMENT SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE
OF NEW YORK. The headings of the several sections and subsections in this
Agreement are for purposes of reference only and shall not limit or define the
meaning hereof. This Agreement may be executed in any number of counterparts,
each of which shall be an original, but all of which together shall constitute
one instrument.
24. WAIVER OF JURY TRIAL. The Pledgor hereby irrevocably
waives all right to a trial by jury in any action, proceeding or counterclaim
arising out of or relating to this agreement or the transactions contemplated
hereby.
25. RECOURSE. This Agreement is made with full recourse to the Pledgor and
pursuant to and upon all the representations, warranties, covenants and
agreements on the part of the Pledgor contained herein and in the other Credit
Documents and otherwise in writing in connection herewith or therewith.
26. LIMITED OBLIGATIONS. It is the desire and intent of each
Pledgor, the Pledgee and the Secured Creditors that this Agreement shall be
enforced against each Pledgor to the fullest extent permissible under the laws
and public policies applied in each jurisdiction in which enforcement is sought.
If and to the extent that the obligations of each Pledgor under this Agreement
shall be adjudicated to be invalid or unenforceable for any reason (including,
without limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers, which laws would determine the solvency of
each Pledgor by reference to the full amount of the Obligations at the time of
the execution and delivery of this Agreement), then the amount of the
Obligations of each Pledgor shall be deemed to be reduced and such Pledgor shall
pay the maximum amount of the Obligations which would be permissible under the
applicable law.
27. 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.
28. SUBSIDIARY AS PLEDGOR. It is understood and agreed that
any Subsidiary of the Borrower that is required to execute a counterpart of this
Agreement after the date hereof pursuant to the Credit Agreement shall
automatically become a Pledgor hereunder by executing a copy hereof and
delivering the same to the Pledgee.
29. PLEDGEE NOT A PARTNER OR LIMITED LIABILITY COMPANY MEMBER.
(a) Nothing herein shall be construed to make the Pledgee or any other Secured
Creditor liable as a member of any limited liability company or partnership and
neither the Pledgee nor any other Secured Creditor by virtue of this Agreement
or otherwise (except as referred to in the following sentence) shall have any of
the duties, obligations or liabilities of a member of any limited liability
company or partnership.
(b) The Pledgee, by accepting this Agreement, did not intend
to become a member of any limited liability company or partnership or otherwise
be deemed to be a co-venturer with respect to the Pledgor or any limited
liability company or partnership either before or after an Event of Default
shall have occurred. The Pledgee shall have only those powers set forth herein
and the Secured Creditors shall assume none of the duties, obligations or
liabilities of a member of any limited liability company or partnership or the
Pledgor.
(c) The Pledgee and the other Secured Creditors shall not be
obligated to perform or discharge any obligation of the Pledgor as a result of
the pledge hereby effected.
(d) The acceptance by the Pledgee of this Agreement, with all
the rights, powers, privileges and authority so created, shall not at any time
or in any event obligate the Pledgee or any Bank to appear in or defend any
action or proceeding relating to the Collateral to which it is not a party, or
to take any action hereunder or thereunder, or to expend any money or incur any
expenses or perform or discharge any obligation, duty or liability under the
Collateral.
IN WITNESS WHEREOF, each Pledgor and the Pledgee have caused
this Agreement to be executed by their duly elected officers duly authorized as
of the date First above written.
Address:
USOL HOLDINGS, INC.,
as a Pledgor
Attention:
Telephone:
Facsimile: By:________________________
Title:
USOL, INC.,
as a Pledgor
Attention:
Telephone:
Facsimile: By:________________________
Title:
[SUBSIDIAIRIES],
as a Pledgor
Attention:
Telephone:
Facsimile: By:________________________
Title:
Accepted and Agreed to:
PARIBAS,
not in its individual capacity but solely as
Collateral Agent and Administrative Agent
for the Banks and Pledgee
By:___________________________
Title:
By:___________________________
Title:
Annex A
Form of Agreement Regarding Uncertificated Securities
AGREEMENT (as amended, modified or supplemented from time to
time, this "Agreement"), dated as of December __, 1999 among the undersigned
pledgor (the "Pledgor"), Paribas, not in its individual capacity but solely as
Collateral Agent (the "Pledgee"), and [ISSUER], as the issuer of the
Uncertificated Securities (as defined below) (the "Issuer").
W I T N E S S E T H :
WHEREAS, the Pledgor and the Pledgee are entering into a
Pledge Agreement, dated as of December __, 1999 (as amended, amended and
restated, modified or supplemented from time to time, the "Pledge Agreement"),
under which, among other things, in order to secure the payment of the
Obligations (as defined in the Pledge Agreement), the Pledgor will pledge to the
Pledgee for the benefit of the Secured Creditors (as defined in the Pledge
Agreement), and grant a security interest in favor of the Pledgee for the
benefit of the Secured Creditors in, all of the right, title and interest of
such Pledgor in and to any and all "uncertificated securities" (as defined in
Section 8-102(a)(18) of the Uniform Commercial Code, as adopted in the State of
New York) ("Uncertificated Securities"), in each case issued from time to time
by the Issuer, whether now existing or hereafter from time to time acquired by
such Pledgor (with all of such Uncertificated Securities being herein
collectively called the "Issuer Pledged Interests"); and
WHEREAS, the Pledgor desires the Issuer to enter into this
Agreement in order to perfect the security interest of the Pledgee under the
Pledge Agreement in the Issuer Pledged Interests, to vest in the Pledgee control
of the Issuer Pledge Interests and to provide for the rights of the parties
under this Agreement;
NOW THEREFORE, in consideration of the premises and the mutual
promises and agreements contained herein, and for other valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. The Pledgor hereby irrevocably authorizes and directs the
Issuer, and the Issuer hereby agrees, to comply with any and all instructions
and orders originated by the Pledgee (and its successors and assigns) regarding
any and all of the Issuer Pledged Interests without the further consent by the
registered owner (including the Pledgor), and not to comply with any
instructions or orders regarding any or all of the Issuer Pledged Interests
originated by any person or entity other than the Pledgee (and its successors
and assigns) or a court of competent jurisdiction.
2. The Issuer hereby certifies that (i) no notice of any
security interest, lien or other encumbrance or claim affecting the Issuer
Pledged Interests (other than the security interest of the Pledgee) has been
received by it, and (ii) the security interest of the Pledgee in the Issuer
Pledged Interests has been registered in the books and records of the Issuer.
3. The Issuer hereby represents and warrants that (i) the
pledge by the Pledgors of, and the granting by the Pledgors of a security
interest in, the Issuer Pledged Interests to the
Pledgee, for the benefit of the Secured Creditors, does not violate the charter,
by-laws, partnership agreement, membership agreement or any other agreement
governing the Issuer or the Issuer Pledged Interests, and (ii) the Issuer
Pledged Interests are fully paid and nonassessable.
4. The Issuer hereby agrees to (i) allow the Pledgee to
exercise any and all withdrawal rights or other redemption rights of the Pledgor
without the further consent of the Pledgor or any other Person and (ii) admit
the Pledgee (or any transferee of the Pledgee with respect to the Issuer Pledged
Interests) as a member of the Issuer, provided that, the Pledgee (or such
transferee of the Pledgee) satisfies all requirements for membership in the
Issuer contained in the Issuer's constituent documents.
5. The Pledgor hereby agrees not to exercise any withdrawal
rights or other redemption rights with respect to the Issuer Pledged Interests
without the prior written consent of the Pledgee, and the Issuer hereby agrees
not to comply with any request by the Pledgor for exercise of withdrawal rights
or other redemption rights with respect to the Issuer Pledged Interests without
the prior written consent of the Pledgee.
6. All notices, statements of accounts, reports, prospectuses,
financial statements and other communications to be sent to the Pledgor by the
Issuer in respect of the Issuer will also be sent to the Pledgee at the
following address:
Paribas
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
7. Until the Pledgee shall have delivered written notice to
the Issuer that all of the Obligations have been paid in full and this Agreement
is terminated, the Issuer will send any and all redemptions, distributions,
interest or other payments in respect of the Issuer Pledged Interests from the
Issuer for the account of the Pledgor only by wire transfers to the following
address:
_____________________
_____________________
[Account Information]
ABA No.: ____________________
Account in the Name of: ___________
Account No.: ____________________
8. Except as expressly provided otherwise in Sections 6 and 7,
all notices, instructions, orders and communications hereunder shall be sent or
delivered by mail, telex, telecopy or overnight courier service and all such
notices and communications shall, when mailed, telexed, telecopied or sent by
overnight courier, be effective when deposited in the mails or
delivered to the overnight courier, prepaid and properly addressed for delivery
on such or the next Business Day, or sent by telex or telecopier, except that
notices and communications to the Pledgee shall not be effective until received
by the Pledgee. All notices and other communications shall be in writing and
addressed as follows:
(b) if to the Pledgor, at:
[Address]
Telephone: __________
Telecopier: __________
Attention: __________;
(c) if to the Pledgee, at:
Paribas
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ Aizenberg
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
(d) if to the Issuer, at:
[Address]
Attention: ______________
Telephone: ___________
Telecopier: ___________
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder. As used in this
Section 8, "Business Day" means any day other than a Saturday, Sunday, or other
day in which banks in New York are authorized to remain closed.
9. This Agreement shall be binding upon the successors and
assigns of the Pledgor and the Issuer and shall inure to the benefit of and be
enforceable by the Pledgee and its successors and assigns. This Agreement may be
executed in any number of counterparts, each of which shall be an original, but
all of which shall constitute one instrument. In the event that any provision of
this Agreement shall prove to be invalid or unenforceable, such provision shall
be deemed to be severable from the other provisions of this Agreement which
shall remain binding on all parties hereto. None of the terms and conditions of
this Agreement may be changed, waived, modified or varied in any manner
whatsoever except in writing signed by the Pledgee, the Issuer and the Pledgor
which at such time owns any Issuer Pledged Interests.
10. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to its
principles of conflict of laws.
IN WITNESS WHEREOF, the Pledgor, the Pledgee and the Issuer
have caused this Agreement to be executed by their duly elected officers duly
authorized as of the date first above written.
[ PLEDGOR ],
as a Pledgor
By:_____________________________
Name:
Title:
Paribas,
not in its individual capacity but solely
as Collateral Agent and Administrative
Agent for the Banks and Pledgee
By:_____________________________
Name:
Title:
[ISSUER ],
the Issuer
By:_____________________________
Name:
Title:
By:_____________________________
Name:
Title:
Annex B
LIST OF STOCK
Name of
Issuing Type of Number of Certificate Percentage Sub-clause of Section 3.2(a)
Corporation Shares Shares No. Owned of Pledge Agreement
----------- -------- ------------ ------------- ---------- -----------------------------
[ALL ANNEXES TO BE COMPLETED BY THE BORROWER]
Annex C
LIST OF NOTES
Annex D
LIST OF CHIEF EXECUTIVE OFFICES
EXHIBIT G
================================================================================
SECURITY AGREEMENT
among
USOL HOLDINGS, INC.,
USOL, INC.,
VARIOUS SUBSIDIARIES
and
PARIBAS,
as Collateral Agent
Dated as of December __, 1999
================================================================================
SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of December __, 1999 (as amended,
modified or supplemented from time to time, this "Agreement"), among each of the
undersigned (each an "Assignor" and collectively, the "Assignors") and PARIBAS,
as Collateral Agent (the "Collateral Agent"), for the benefit of (x) the Banks
(as defined below) and the Agents (as defined below) under, and any other lender
from time to time party to the Credit Agreement hereinafter referred to (such
Banks, the Agents and the other lenders, if any, are hereinafter called the
"Bank Creditors") and (y) if Paribas in its individual capacity, any Bank or a
syndicate of financial institutions organized by Paribas or any such Bank or an
affiliate of Paribas or such Bank enter into one or more (i) interest rate
protection agreements (including, without limitation, interest rate swaps, caps,
floors, collars and similar agreements), (ii) foreign exchange contracts,
currency swap agreements or other similar agreements or arrangements designed to
protect against the fluctuations in currency values and/or (iii) other types of
hedging agreements from time to time (collectively, the "Interest Rate
Protection or Other Hedging Agreements"), with, or guaranteed by, the Borrower
(as defined below) and/or Holdings (as defined below), Paribas, any such Bank,
any such syndicate of financial institutions or any such affiliate of Paribas or
any Bank (even if Paribas or the respective Bank ceases to be a Bank under the
Credit Agreement for any reason) and any such institution that participates in
such Interest Rate Protection or Other Hedging Agreements and their subsequent
assigns (collectively, the "Other Creditors" and, together with the Bank
Creditors, are herein called the "Secured Creditors"). Except as otherwise
defined herein, terms used herein and defined in the Credit Agreement shall be
used herein as therein defined.
W I T N E S S E T H :
WHEREAS, USOL Holdings, Inc. ("Holdings"), USOL, Inc. (the
"Borrower"), various financial institutions from time to time party thereto (the
"Banks"), Paribas, as Administrative Agent (the "Administrative Agent") and
Syndication Agent (the "Syndication Agent") and Deutsche Bank AG, New York
Branch, as Documentation Agent (the "Documentation Agent," and together with the
Administrative Agent and Syndication Agent, the "Agents"), have entered into a
Credit Agreement, dated as of December 30, 1999, providing for the making of
Loans as contemplated therein (as used herein, the term "Credit Agreement" means
the Credit Agreement described above in this paragraph, as the same may be
amended, modified, extended, renewed, replaced, restated, supplemented,
restructured or refinanced from time to time, and including any agreement
extending the maturity of, refinancing or restructuring (including, but not
limited to, the inclusion of additional borrowers thereunder that are
Subsidiaries of Holdings and whose obligations are guaranteed by Holdings or the
Borrower thereunder or any increase in the amount borrowed) all or any portion
of, the Indebtedness under such agreement or any successor agreements; provided,
that with respect to any agreement providing for the refinancing of Indebtedness
under the Credit Agreement, such agreement shall only be treated as, or as part
of, the Credit Agreement hereunder if (i) either (A) all obligations under the
Credit Agreement being refinanced shall be paid in full at the time of such
refinancing, and all commitments pursuant to the refinanced Credit Agreement
shall have terminated in accordance
with their terms or (B) the Required Banks shall have consented in writing to
the refinancing Indebtedness being treated, along with their Indebtedness, as
Indebtedness pursuant to the Credit Agreement, (ii) the refinancing Indebtedness
shall be permitted to be incurred under the Credit Agreement being refinanced
(if such Credit Agreement is to remain outstanding) and (iii) a notice to the
effect that the refinancing Indebtedness shall be treated as issued under the
Credit Agreement shall be delivered by the Borrower to the Collateral Agent);
WHEREAS, pursuant to the Holdings Guaranty, Holdings has
provided an unconditional guaranty of the payment when due of all obligations
and liabilities of the Borrower under and in connection with the Credit
Documents and each Interest Rate Protection Agreement or Other Hedging Agreement
entered into with one or more Other Creditors;
WHEREAS, pursuant to the Subsidiaries Guaranty, each
Subsidiary of Holdings other than the Borrower have jointly and severally
guaranteed to the Secured Creditors the payment when due of all obligations and
liabilities of the Borrower under or with respect to the Credit Documents and
each Interest Rate Protection or Other Hedging Agreement with one or more Other
Creditors;
WHEREAS, the Borrower desires to incur Loans pursuant to the
credit Agreement;
WHEREAS, the Borrower may at any time and from time to time
enter into one or more Interest Rate Protection or Other Hedging Agreements with
one or more Other Creditors;
WHEREAS, it is a condition precedent to the above-described
extensions of credit that each of the Assignors shall have executed and
delivered to the Collateral Agent this Agreement; and
WHEREAS, each Assignor desires to execute this Agreement to
satisfy the condition described in the preceding paragraph;
NOW, THEREFORE, in consideration of the benefits accruing to
each Assignor, the receipt and sufficiency of which are hereby acknowledged,
each Assignor hereby makes the following representations and warranties to the
Collateral Agent and hereby covenants and agrees with the Collateral Agent as
follows:
ARTICLE I
SECURITY INTERESTS
1.1. Grant of Security Interests. (a) As security for the
prompt and complete payment and performance when due of all of the Obligations,
each Assignor does hereby assign and transfer unto the Collateral Agent, and
does hereby grant to the Collateral Agent for the benefit of the Secured
Creditors, a continuing security interest of first priority in, all of the
right, title and interest of such Assignor in, to and under all of the
following, whether now existing or hereafter from time to time acquired: (i)
each and every Receivable, (ii) all Contracts, together with all Contract Rights
arising thereunder, (iii) all Inventory, (iv) the Cash Collateral Account
and any other cash collateral account established for any Assignor and all
moneys, securities and instruments deposited or required to be deposited in such
Cash Collateral Account and any such other cash collateral account, (v) all
Equipment, (vi) all Marks, together with the registrations and right to all
renewals thereof, and the goodwill of the business of such Assignor symbolized
by the Marks, (vii) all Patents and Copyrights, (viii) all computer programs of
such Assignor and all intellectual property rights therein and all other
proprietary information of such Assignor, including, but not limited to, trade
secrets, (ix) (1) the Concentration Account, (2) all moneys, checks, drafts,
securities and instruments deposited or required to be deposited in the
Concentration Account, (3) all investments and all certificates and instruments,
if any, from time to time representing or evidencing such investments and (4)
all interest, dividends, cash, investments and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of the foregoing items listed under subclauses (1) through (3), (x)
the Concentration Account Consent Letter and each other agreement from time to
time entered into by any Assignor with the Concentration Account Bank and all
rights of such Assignor under the Concentration Account Consent Letter and each
other agreement from time to time entered into by any Assignor with the
Concentration Account Bank with respect to the Concentration Account and all
rights of such Assignor under the Concentration Account Consent Letter, (xi) all
other Goods, General Intangibles, Chattel Paper, Documents and Instruments
(other than the Pledged Securities) and (xii) all Proceeds and products of any
and all of the foregoing (all of the above, collectively, the "Collateral"),
provided, however, that if any Contract prohibits, or requires the consent for
(in accordance with the terms thereof after giving effect to any applicable
laws), the granting of a security interest therein, or in the event the granting
of a security interest in any Contract shall violate applicable law, then the
security interest granted hereby shall be limited to the extent (and only to the
extent) necessary so that such Contract may not be so violated or no such
violation of law shall exist, as the case may be.
(b) The security interest of the Collateral Agent under this
Agreement extends to all Collateral of the kind which is the subject of this
Agreement which any Assignor may acquire at any time during the continuation of
this Agreement.
1.2. Power of Attorney. Each Assignor hereby constitutes and
appoints the Collateral Agent its true and lawful attorney, irrevocably, with
full power after the occurrence of and during the continuance of an Event of
Default (in the name of such Assignor or otherwise) to act, require, demand,
receive, compound and give acquittance for any and all moneys and claims for
moneys due or to become due to such Assignor under or arising out of the
Collateral, to endorse any checks or other instruments or orders in connection
therewith and to file any claims or take any action or institute any proceedings
which the Collateral Agent may deem to be necessary or advisable to protect the
interests of the Secured Creditors, which appointment as attorney is coupled
with an interest.
ARTICLE II
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Assignor represents, warrants and covenants, which
representations, warranties and covenants shall survive execution and delivery
of this Agreement, as follows:
2.1. Necessary Filings. All filings, registrations and
recordings necessary or appropriate to create, preserve, protect and perfect the
security interest granted by such Assignor to the Collateral Agent hereby in
respect of the Collateral have been accomplished and the security interest
granted to the Collateral Agent pursuant to this Agreement in and to the
Collateral constitutes a perfected security interest therein prior to the rights
of all other Persons therein and subject to no other Liens (other than Permitted
Liens) and is entitled to all the rights, priorities and benefits afforded by
the Uniform Commercial Code or other relevant law as enacted in any relevant
jurisdiction to perfected security interests.
2.2. No Liens. Such Assignor is, and as to Collateral acquired
by it from time to time after the date hereof such Assignor will be, the owner
of all Collateral free from any Lien, security interest, encumbrance or other
right, title or interest of any Person (other than Permitted Liens), and such
Assignor shall defend the Collateral against all claims and demands of all
Persons at any time claiming the same or any interest therein adverse to the
Collateral Agent.
2.3. Other Financing Statements. There is no financing
statement (or similar statement or instrument of registration under the law of
any jurisdiction) covering or purporting to cover any interest of any kind in
the Collateral (other than Permitted Liens), and so long as the Total Commitment
has not been terminated or any Letter of Credit or Note remains outstanding or
any of the Obligations remain unpaid or any Interest Rate Protection or Other
Hedging Agreement remains in effect or any Obligations are owed with respect
thereto, such Assignor will not execute or authorize to be filed in any public
office any financing statement (or similar statement or instrument of
registration under the law of any jurisdiction) or statements relating to the
Collateral, except financing statements filed or to be filed in respect of and
covering the security interests granted hereby by such Assignor or as permitted
by the Credit Agreement.
2.4. Chief Executive Office; Records. The chief executive
office of such Assignor is located at the address or addresses indicated on
Annex A hereto. Such Assignor will not move its chief executive office except to
such new location as such Assignor may establish in accordance with the last
sentence of this Section 2.4. The originals of all documents evidencing all
Receivables and Contract Rights of such Assignor and the only original books of
account and records of such Assignor relating thereto are, and will continue to
be, kept at such chief executive office or at such other locations as are set
forth on Annex B hereto or at such other locations as such Assignor may
establish in accordance with the last sentence of this Section 2.4. All
Receivables and Contract Rights of such Assignor are, and will continue to be,
maintained at, and controlled and directed (including, without limitation, for
general accounting purposes) from, the office locations described above or such
new location established in accordance with the last sentence of this Section
2.4. No Assignor shall establish new locations for such offices until (i) it
shall have given to the Collateral Agent not less than 30 days' prior written
notice of its intention to do so, clearly describing such new location and
providing such other information in connection therewith as the Collateral Agent
may request, (ii) with respect to such new location, it shall have taken all
action, satisfactory to the Collateral Agent, to maintain the security interest
of the Collateral Agent in the Collateral intended to be granted hereby at all
times fully perfected and in full force and effect, (iii) at the request of the
Collateral Agent, it shall have furnished an opinion of counsel acceptable to
the Collateral Agent to the effect that all financing or continuation statements
and amendments or supplements thereto have been filed in the appropriate filing
office or
offices, and (iv) the Collateral payment of all filing fees and taxes, if any,
payable in connection with such filings) have been taken, in order to perfect
(and maintain the perfection and priority of) the first priority security
interest granted hereby.
2.5. Location of Inventory and Equipment. All Inventory and
Equipment held on the date hereof by each Assignor is located at one of the
locations shown on Annex C hereto. Each Assignor agrees that all Inventory and
Equipment now held or subsequently acquired by it shall be kept at (or shall be
in transport to) any one of the locations shown on Annex C hereto or such new
location as such Assignor may establish in accordance with the last sentence of
this Section 2.5. Any Assignor may establish a new location for Inventory and
Equipment only if (i) it shall have given to the Collateral Agent not less than
30 days prior written notice of its intention so to do, clearly describing such
new location and providing such other information in connection therewith as the
Collateral Agent may request, (ii) with respect to such new location, it shall
have taken all action satisfactory to the Collateral Agent to maintain the
security interest of the Collateral Agent in the Collateral intended to be
granted hereby at all times fully perfected and in full force and effect, (iii)
at the request of the Collateral Agent, it shall have furnished an opinion of
counsel acceptable to the Collateral Agent to the effect that all financing or
continuation statements and amendments or supplements thereto have been filed in
the appropriate filing office or offices, and (iv) the Collateral Agent shall
have received evidence that all other actions (including, without limitation,
the payment of all filing fees and taxes, if any, payable in connection with
such filings) have been taken, in order to perfect (and maintain the perfection
and priority of) the first priority security interest granted hereby.
2.6. Trade Names; Change of Name. No Assignor has or operates
in any jurisdiction under, or previously has had or has operated in any
jurisdiction within the five year period preceding the date of this Agreement
under, any trade names, fictitious names or other names except its legal name
and such other trade or fictitious names as are listed on Annex D hereto. No
Assignor shall change its legal name or assume or operate in any jurisdiction
under any trade, fictitious or other name except those names listed on Annex D
hereto and new names established in accordance with the last sentence of this
Section 2.6. No Assignor shall assume or operate in any jurisdiction under any
new trade, fictitious or other name until (i) it shall have given to the
Collateral Agent not less than 30 days' prior written notice of its intention so
to do, clearly describing such new name and the jurisdictions in which such new
name shall be used and providing such other information in connection therewith
as the Collateral Agent may request, (ii) with respect to such new name, it
shall have taken all action requested by the Collateral Agent, to maintain the
security interest of the Collateral Agent in the Collateral intended to be
granted hereby at all times fully perfected and in full force and effect, (iii)
at the request of the Collateral Agent, it shall have furnished an opinion of
counsel acceptable to the Collateral Agent to the effect that all financing or
continuation statements and amendments or supplements thereto have been filed in
the appropriate filing office or offices, and (iv) the Collateral Agent shall
have received evidence that all other actions (including, without limitation,
the payment of all filing fees and taxes, if any, payable in connection with
such filings) have been taken, in order to perfect (and maintain the perfection
and priority of) the first priority security interest granted hereby.
2.7. Recourse. This Agreement is made with full recourse to
each Assignor and pursuant to and upon all the warranties, representations,
covenants and agreements on the part of
each such Assignor contained herein, in the other Credit Documents, in the
Interest Rate Protection or Other Hedging Agreements and otherwise in writing in
connection herewith or therewith.
ARTICLE III
SPECIAL PROVISIONS CONCERNING RECEIVABLES; CONTRACT
RIGHTS; INSTRUMENTS; CONCENTRATION ACCOUNT
3.1. Additional Representations and Warranties. As of the time
when each of its Receivables arises, the relevant Assignor shall be deemed to
have represented and warranted that such Receivable, and all records, papers and
documents relating thereto are genuine and in all respects what they purport to
be, and that all papers and documents relating thereto (i) will represent the
genuine, legal, valid and binding obligation of the account debtor evidencing
indebtedness unpaid and owed by the respective account debtor arising out of the
performance of labor or services or the sale or lease and delivery of the
inventory, materials, equipment or merchandise listed therein, or both, (ii)
will be the only original writings evidencing and embodying such obligation of
the account debtor named therein (other than copies created for general
accounting purposes), (iii) will evidence true and valid obligations,
enforceable in accordance with their respective terms, except to the extent that
the enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting creditors' rights generally and
by equity principles (regardless of whether enforcement is sought in equity or
at law), and (iv) will be in compliance in all respects and will conform with
all applicable federal, state and local laws and applicable laws of any relevant
foreign jurisdiction.
3.2. Maintenance of Records. Each Assignor will keep and
maintain at its own cost and expense satisfactory and complete records of its
Receivables and Contracts, including, but not limited to, originals or copies of
all documentation (including each Contract) with respect thereto, records of all
payments received, all credits granted thereon, all merchandise returned and all
other dealings therewith, and such Assignor will make the same available on such
Assignor's premises to the Collateral Agent for inspection, at such Assignor's
own cost and expense, at any and all reasonable times during, so long as no
Event of Default has occurred and is continuing, normal business hours and, so
long as no Event of Default has occurred or is continuing, upon prior notice to
the chief financial officer or other authorized officer of such Assignor. Upon
the occurrence and during the continuance of an Event of Default and at the
request of the Collateral Agent, such Assignor shall, at its own cost and
expense, deliver all tangible evidence of its Receivables and Contract Rights
(including, without limitation, all documents evidencing the Receivables and all
Contracts) and such books and records to the Collateral Agent or to its
representatives (copies of which evidence and books and records may be retained
by such Assignor) and, if the Collateral Agent so directs, such Assignor shall
legend, in form and manner satisfactory to the Collateral Agent, the Receivables
and the Contracts, as well as books, records and documents of such Assignor
evidencing or pertaining to such Receivables and Contracts with an appropriate
reference to the fact that such Receivables and Contracts have been assigned to
the Collateral Agent and that the Collateral Agent has a security interest
therein.
3.3. Direction to Account Debtors; Contracting Parties; etc.
Upon the occurrence and during the continuance of an Event of Default, and if
the Collateral Agent so directs any Assignor, to the extent permitted by
applicable law, such Assignor agrees (x) to cause all payments on account of the
Receivables and Contracts to be made directly to the Cash Collateral Account,
(y) that the Collateral Agent may, at its option, directly notify the obligors
with respect to any Receivables and/or under any Contracts to make payments with
respect thereto as provided in preceding clause (x), and (z) that the Collateral
Agent may enforce collection of any such Receivables and Contracts and may
adjust, settle or compromise the amount of payment thereof, in the same manner
and to the same extent as such Assignor. Without notice to or assent by any
Assignor, the Collateral Agent may apply any or all amounts then in, or
thereafter deposited in, the Cash Collateral Account which application shall be
effected in the manner provided in Section 7.4 of this Agreement. The reasonable
out-of-pocket costs and expenses (including reasonable out-of-pocket attorneys'
fees) of collection, whether incurred by an Assignor or the Collateral Agent,
shall be borne by the Assignors.
3.4. Modification of Terms; etc. No Assignor shall rescind or
cancel any indebtedness evidenced by any Receivable or under any Contract, or
modify any term thereof or make any adjustment with respect thereto, or extend
or renew the same, or compromise or settle any dispute, claim, suit or legal
proceeding relating thereto, or sell any Receivable or Contract, or interest
therein, without the prior written consent of the Collateral Agent, except as
permitted by Section 3.5. Each Assignor will duly fulfill all obligations on its
part to be fulfilled under or in connection with the Receivables and Contracts
and will do nothing to impair the rights of the Collateral Agent in the
Receivables or Contracts, except as permitted by Section 3.5.
3.5. Collection. Each Assignor shall endeavor to cause to be
collected from the account debtor named in each of its Receivables or obligor
under any of its Contracts, as and when due (including, without limitation,
amounts, services or products which are delinquent, such amounts, services or
products to be collected in accordance with generally accepted lawful collection
procedures) any and all amounts, services or products owing under or on account
of such Receivable or Contract, and apply forthwith upon receipt thereof all
such amounts, services or products as are so collected to the outstanding
balance of such Receivable or under such Contract, except that, prior to the
occurrence of an Event of Default, any Assignor may allow in the ordinary course
of business as adjustments to amounts, services or products owing under its
Receivables and Contracts (i) an extension or renewal of the time or times of
payment or exchange, or settlement for less than the total unpaid balance, which
such Assignor finds appropriate in accordance with reasonable business judgment
and (ii) a refund or credit due as a result of returned or damaged merchandise
or improperly performed services. The reasonable out-of-pocket costs and
expenses (including, without limitation, reasonable out-of-pocket attorneys'
fees) of collection, whether incurred by an Assignor or the Collateral Agent,
shall be borne by the Assignors.
3.6. Instruments. If any Assignor owns or acquires any
Instrument constituting Collateral, such Assignor will within 10 Business Days
notify the Collateral Agent thereof, and upon request by the Collateral Agent
will promptly deliver such Instrument to the Collateral Agent appropriately
endorsed to the order of the Collateral Agent as further security hereunder.
3.7. Concentration Account. (a) Within sixty days after the
Initial Borrowing Date, the Assignors shall cause to be established the
Concentration Account with the Concentration Account Bank as referenced in
Section 7.18 of the Credit Agreement. Each Assignor hereby agrees that, within
sixty days after the Initial Borrowing Date, it shall notify the Concentration
Account Bank that the Concentration Account maintained with the Concentration
Account Bank by such Assignor is under the exclusive dominion and control of the
Collateral Agent and all moneys, instruments and other securities received in
such Concentration Account are to be held by the Concentration Account Bank for
the benefit of the Collateral Agent. Furthermore, within sixty days after the
Initial Borrowing Date, the Assignors shall cause the Concentration Account Bank
to execute and deliver to the Collateral Agent a Concentration Account Consent
Letter acknowledging the security interest and exclusive dominion and control of
the Collateral Agent in all moneys, instruments and other securities deposited
in the Concentration Account. Each Assignor hereby transfers to the Collateral
Agent the exclusive dominion and control over the Concentration Account. Each
Assignor hereby represents and warrants that it does not now maintain, and will
not in the future maintain, any other account with the Concentration Account
Bank other than the Concentration Account; provided, however, that any Assignor
may establish and maintain additional Concentration Accounts with the
Concentration Account Bank or any new Concentration Account Bank, if (x) in the
case of the existing Concentration Account Bank, such Assignor, the
Concentration Account Bank and the Collateral Agent shall have entered into an
amendment to the existing Concentration Account Consent Letter to include such
new Concentration Account under such Concentration Account Consent Letter, such
amendment to be in form and substance satisfactory to the Collateral Agent, and
(y) in the case of a new Concentration Account Bank (i) the Assignor shall have
given the Collateral Agent at least 15 days' prior written notice of its
intention to establish a new Concentration Account with a new Concentration
Account Bank, (ii) such new Concentration Account Bank shall be reasonably
acceptable to the Collateral Agent and (iii) such new Concentration Account Bank
shall enter into a Concentration Account Consent Letter in the form attached
hereto as Annex E with such changes as may be acceptable to the Collateral
Agent.
(b) Until an Event of Default shall have occurred and be
continuing, each Assignor is hereby authorized by the Collateral Agent to direct
the disposition of any and all moneys, instruments and other securities
deposited in the Concentration Account for use by the Assignor in any manner
permitted by the Credit Agreement.
(c) Upon the occurrence and during the continuance of an Event
of Default, the authorization of the Assignors under Section 3.7(b) shall be
revoked and all deposits contained in the Concentration Account, and any
additional moneys, instruments and other securities subsequently deposited in
the Concentration Account shall be transferred to the Cash Collateral Account,
to be held by the Collateral Agent as Collateral for the Obligations or applied
to the Obligations in accordance with this Agreement (all such deposits in any
such Cash Collateral Account shall constitute "Collateral" for all purposes of
this Agreement). Upon the occurrence and during the continuance of an Event of
Default, without notice to or assent by any Assignor, the Collateral Agent may
apply any or all amounts then in, or thereafter deposited in, the Cash
Collateral Account in the manner provided in Section 7.4 of this Agreement. The
reasonable out-of-pocket costs and expenses (including reasonable out-of-pocket
attorney's fees) of collection, whether incurred by an Assignor or the
Collateral Agent, shall be borne by the Assignors.
3.8. Further Actions. Each Assignor will, at its own expense,
make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent
from time to time such vouchers, invoices, schedules, confirmatory assignments,
conveyances, financing statements, transfer endorsements, powers of attorney,
certificates, reports and other assurances or instruments and take such further
steps relating to its Receivables, Contracts, Instruments and other property or
rights covered by the security interest hereby granted, as the Collateral Agent
may reasonably require.
ARTICLE IV
SPECIAL PROVISIONS CONCERNING TRADEMARKS
4.1. Additional Representations and Warranties. Each Assignor
represents and warrants that it is the true, lawful, sole and exclusive owner of
the Marks listed in Annex F hereto and that said listed Marks constitute all the
Marks that such Assignor presently owns or uses in connection with its business.
Each Assignor represents and warrants that it owns or is licensed to use all
Marks that it uses. Each Assignor further warrants that it has no knowledge as
of the date hereof, of any third party claim that any aspect of such Assignor's
present or contemplated business operations infringes or will infringe any
rights in any trademark, service ▇▇▇▇ or trade name. Each Assignor represents
and warrants that it is the beneficial and record owner of all U.S. and foreign
trademark registrations and applications listed in Annex F hereto and that said
registrations are valid, subsisting and have not been cancelled and that, such
Assignor is not aware of any third-party claim that any of said registrations is
invalid or unenforceable, or that there is any reason that any of said
applications will not pass to registration. Each Assignor represents and
warrants that upon the recordation of an Assignment of Security Interest in
United States Trademarks and Patents in the form of Annex G hereto in the United
States Patent and Trademark Office, together with filings on Form UCC-1 pursuant
to this Agreement, all filings registrations and recordings necessary or
appropriate to perfect the security interest granted to the Collateral Agent in
the United States Marks covered by this Agreement under federal law will have
been accomplished. Each Assignor agrees to execute such an Assignment of
Security Interest in United States Trademarks and Patents covering all right,
title and interest in each United States ▇▇▇▇, and the associated goodwill of
the Assignor, and to record the same. Each Assignor hereby grants to the
Collateral Agent an absolute power of attorney to sign, upon the occurrence and
during the continuance of an Event of Default, any document which may be
required by the U.S. Patent and Trademark Office or secretary of state or
equivalent governmental agency of any State of the United States or in any
foreign jurisdiction in order to effect an absolute assignment of all right,
title and interest in each ▇▇▇▇, and record the same.
4.2. Licenses and Assignments. Each Assignor hereby agrees not
to divest itself of any right under any ▇▇▇▇ absent prior written approval of
the Collateral Agent.
4.3. Infringements. Each Assignor agrees, promptly upon
learning thereof, to notify the Collateral Agent in writing of the name and
address of, and to furnish such pertinent information that may be available with
respect to (i) any party who such Assignor believes is infringing or diluting or
otherwise violating in any respect any of such Assignor's rights in and to any
▇▇▇▇, or (ii) any party claiming that such Assignor's use of any ▇▇▇▇ violates
in any respect
any property right of that party. Each Assignor further agrees, unless otherwise
agreed by the Collateral Agent, diligently to prosecute any Person infringing
any ▇▇▇▇.
4.4. Preservation of Marks. Each Assignor agrees to use its
material Marks in interstate or foreign commerce during the time in which this
Agreement is in effect, sufficiently to preserve such Marks as valid and
subsisting trademarks or service marks under the laws of the United States or
the relevant foreign jurisdictions.
4.5. Maintenance of Registration. Each Assignor shall, at its
own expense, diligently process all documents required by the Trademark Act of
1946, as amended, 15 U.S.C. ▇▇.▇▇. 1051 et seq. and any foreign equivalent
thereof to maintain its material trademark registrations, including but not
limited to affidavits of continued use and applications for renewals of
registration in the United States Patent and Trademark Office or equivalent
governmental agency in any foreign jurisdiction for all of its registered Marks
pursuant to 15 U.S.C. ▇▇.▇▇. 1058, 1059 and 1065 and any foreign equivalent
thereof, and shall pay all fees and disbursements in connection therewith and
shall not abandon any such filing of affidavit of use or any such application of
renewal prior to the exhaustion of all administrative and judicial remedies
without prior written consent of the Collateral Agent. Each Assignor agrees to
notify the Collateral Agent three (3) months prior to the dates on which the
affidavits of continued use or the applications for renewal registration are due
with respect to any ▇▇▇▇ that the affidavits of continued use or the application
for renewal is being processed.
4.6. Future Registered Marks. If any registration for any ▇▇▇▇
issues hereafter to any Assignor as a result of any application now or hereafter
pending before the United States Patent and Trademark Office or any equivalent
governmental agency in any foreign jurisdiction, within 30 days of receipt of
such certificate, such Assignor shall deliver to the Collateral Agent a copy of
such certificate and an assignment for security in such ▇▇▇▇, to the Collateral
Agent and at the expense of such Assignor, confirming the assignment for
security in such ▇▇▇▇ to the Collateral Agent hereunder, the form of such
security to be substantially the same as the form hereof or in such other form
as may be satisfactory to the Collateral Agent.
4.7. Remedies. If an Event of Default shall occur and be
continuing, the Collateral Agent may, by written notice to the relevant
Assignor, take any or all of the following actions: (i) declare the entire
right, title and interest of such Assignor in and to each of the Marks, together
with all trademark rights and rights of protection to the same and the goodwill
of such Assignor's business symbolized by said Marks and the right to recover
for past infringements thereof, vested in the Collateral Agent for the benefit
of the Secured Creditors, in which event such rights, title and interest shall
immediately vest, in the Collateral Agent for the benefit of the Secured
Creditors, and the Collateral Agent shall be entitled to exercise the power of
attorney referred to in Section 4.1 to execute, cause to be acknowledged and
notarized and to record said absolute assignment with the applicable agency;
(ii) take and use or sell the Marks and the goodwill of such Assignor's business
symbolized by the Marks and the right to carry on the business and use the
assets of such Assignor in connection with which the Marks have been used; and
(iii) direct such Assignor to refrain, in which event such Assignor shall
refrain, from using the Marks in any manner whatsoever, directly or indirectly,
and, if requested by the Collateral Agent, change such Assignor's corporate name
to eliminate therefrom any use of any ▇▇▇▇ and execute such
other and further documents that the Collateral Agent may request to further
confirm this and to transfer ownership of the Marks and registrations and any
pending trademark applications therefor in the United States Patent and
Trademark Office or any equivalent governmental agency in any foreign
jurisdiction to the Collateral Agent.
ARTICLE V
SPECIAL PROVISIONS CONCERNING
PATENTS, COPYRIGHTS AND TRADE SECRETS
5.1. Additional Representations and Warranties. Each Assignor
represents and warrants that it is the true, lawful, sole and exclusive owner of
all rights in (i) all trade secrets and proprietary information necessary to
operate the business of such Assignor (the "Trade Secret Rights"), (ii) the
Patents listed in Annex G hereto and (iii) the Copyrights listed in Annex H
hereto, that said Patents constitute all the patents and applications for
patents that such Assignor now owns and that such Copyrights constitute all
registrations of copyrights and applications for copyright registrations that
such Assignor now owns. Each Assignor further represents and warrants that it
has the exclusive right to use and practice under all such Patents and
Copyrights that it owns, uses or practices under. Each Assignor further warrants
that it is aware of no claim that any aspect of such Assignor's present or
contemplated business operations infringes or will infringe any rights of any
third party in any patent or copyright or such Assignor has misappropriated any
trade secret or proprietary information. Each Assignor represents and warrants
that upon the recordation of an Assignment of Security Interest in United States
Trademarks and Patents in the form of Annex I hereto in the United States Patent
and Trademark Office and an Assignment of Security Interest in United States
Copyrights in the form of Annex J hereto in the United States Copyright Office,
together with filings on Form UCC-1 pursuant to this Agreement, all filings
registrations and recordings necessary or appropriate to perfect the security
interest granted to the Collateral Agent in the United States Patents, United
States Copyrights and Trade Secret Rights covered by this Agreement under
federal law will have been accomplished. Each Assignor agrees to execute an
Assignment of Security Interest in United States Patents and Trademarks and an
Assignment of Security Interest in United States Copyrights covering all right,
title and interest in each United States Patent and each United States
Copyright, and the associated goodwill of the Assignor, and to record the same.
Each Assignor hereby grants to the Collateral Agent an absolute power of
attorney to sign, upon the occurrence and during the continuance of any Event of
Default, any document which may be required by the U.S. Patent and Trademark
Office or equivalent governmental agency in any foreign jurisdiction or the U.S.
Copyright Office or equivalent governmental agency in any foreign jurisdiction
in order to effect an absolute assignment of all right, title and interest in
each Patent and Copyright, and to record the same.
5.2. Licenses and Assignments. Each Assignor hereby agrees not
to divest itself of any right under any Patent or Copyright absent prior written
approval of the Collateral Agent.
5.3. Infringements. Each Assignor agrees, promptly upon
learning thereof, to furnish the Collateral Agent in writing with all pertinent
information available to such Assignor with respect to infringement,
contributing infringement or active inducement to infringe in any
Patent or Copyright or to any claim that the practice of any Patent or the use
of any Copyright violates any property right of a third party, or with respect
to any misappropriation of any Trade Secret Right or any claim that practice of
any Trade Secret Right violates any property right of a third party. Each
Assignor further agrees, absent direction of the Collateral Agent to the
contrary, diligently to prosecute any Person infringing any Patent or Copyright
or any Person misappropriating any Trade Secret Right.
5.4. Maintenance of Patents and Copyrights. At its own
expense, each Assignor shall make timely payment of all post-issuance fees
required pursuant to 35 U.S.C. ss. 41 and any foreign equivalent thereof to
maintain in full force rights under each Patent, and to apply as permitted
pursuant to applicable law for any renewal of each Copyright absent prior
written consent of the Collateral Agent.
5.5. Prosecution of Patent Application. At its own expense,
each Assignor shall diligently prosecute all applications for Patents listed in
Annex G hereto and shall not abandon any such application prior to exhaustion of
all administrative and judicial remedies, absent written consent of the
Collateral Agent.
5.6. Other Patents and Copyrights. Within 30 days of the
acquisition or issuance of a Patent or of a Copyright registration, or of filing
of an application for a Patent or Copyright registration, the relevant Assignor
shall deliver to the Collateral Agent a copy of said Copyright registration or
Patent or certificate or registration of, or application therefor, as the case
may be, with an assignment for security as to such Patent or Copyright, as the
case may be, to the Collateral Agent and at the expense of such Assignor,
confirming the assignment for security, the form of such assignment for security
to be substantially the same as the form hereof or in such other form as may be
satisfactory to the Collateral Agent.
5.7. Remedies. If an Event of Default shall occur and be
continuing, the Collateral Agent may by written notice to the relevant Assignor,
take any or all of the following actions: (i) declare the entire right, title,
and interest of such Assignor in each of the Patents and Copyrights vested in
the Collateral Agent for the benefit of the Secured Creditors, in which event
such right, title, and interest shall immediately vest in the Collateral Agent
for the benefit of the Secured Creditors, in which case the Collateral Agent
shall be entitled to exercise the power of attorney referred to in Section 5.1
to execute, cause to be acknowledged and notarized and to record said absolute
assignment with the applicable agency; (ii) take and practice or sell the
Patents and Copyrights; and (iii) direct such Assignor to refrain, in which
event such Assignor shall refrain, from practicing the Patents and using the
Copyrights directly or indirectly, and such Assignor shall execute such other
and further documents as the Collateral Agent may request further to confirm
this and to transfer ownership of the Patents and Copyrights to the Collateral
Agent for the benefit of the Secured Creditors.
ARTICLE VI
PROVISIONS CONCERNING ALL COLLATERAL
6.1. Protection of Collateral Agent's Security. Each Assignor
will do nothing to impair the rights of the Collateral Agent in the Collateral.
Each Assignor will at all times keep its Inventory and Equipment insured in
favor of the Collateral Agent, at such Assignor's own expense to the extent and
in the manner provided in the Credit Agreement; all policies or certificates
with respect to such insurance (and any other insurance (other than employee
benefit insurance) maintained by such Assignor): (i) shall be endorsed to the
Collateral Agent's satisfaction for the benefit of the Collateral Agent
(including, without limitation, by naming the Collateral Agent as loss payee and
naming each of the Banks, the Agent and the Collateral Agent as additional
insureds); and (ii) shall state that such insurance policies shall not be
cancelled or revised without 30 days' prior written notice thereof by the
insurer to the Collateral Agent; and certified copies of such policies shall be
deposited with the Collateral Agent. If any Assignor shall fail to insure its
Inventory and Equipment in accordance with the preceding sentence, or if any
Assignor shall fail to so endorse and deposit all policies with respect thereto,
the Collateral Agent shall have the right (but shall be under no obligation) to
procure such insurance and such Assignor agrees to promptly reimburse the
Collateral Agent for all costs and expenses of procuring such insurance. All
proceeds of any insurance shall be deposited in the Cash Collateral Account
pending application thereof pursuant to the Credit Agreement or pursuant hereto.
The Collateral Agent shall, at the time such proceeds of such insurance are
distributed to the Secured Creditors, apply such proceeds in accordance with
Section 7.4. Each Assignor assumes all liability and responsibility in
connection with the Collateral acquired by it and the liability of such Assignor
to pay the Obligations shall in no way be affected or diminished by reason of
the fact that such Collateral may be lost, destroyed, stolen, damaged or for any
reason whatsoever unavailable to such Assignor.
6.2. Warehouse Receipts Non-negotiable. Each Assignor agrees
that if any warehouse receipt or receipt in the nature of a warehouse receipt is
issued with respect to any of its Inventory, such warehouse receipt or receipt
in the nature thereof shall not be "negotiable" (as such term is used in Section
7-104 of the Uniform Commercial Code as in effect in any relevant jurisdiction
or under other relevant law).
6.3. Further Actions. Each Assignor will, at its own expense,
make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent
from time to time such lists, descriptions and designations of its Collateral,
warehouse receipts, receipts in the nature of warehouse receipts, bills of
lading, documents of title, vouchers, invoices, schedules, confirmatory
assignments, conveyances, financing statements, transfer endorsements, powers of
attorney, certificates, reports and other assurances or instruments and take
such further steps relating to the Collateral and other property or rights
covered by the security interest hereby granted, which the Collateral Agent
deems reasonably appropriate or advisable to perfect, preserve or protect its
security interest in the Collateral.
6.4. Financing Statements. Each Assignor agrees to execute and
deliver to the Collateral Agent such financing statements, in form reasonably
acceptable to the Collateral Agent,
as the Collateral Agent may from time to time reasonably request or as are
necessary or desirable in the opinion of the Collateral Agent to establish and
maintain a valid, enforceable, first priority perfected security interest in the
Collateral (subject to the Permitted Liens) as provided herein and the other
rights and security contemplated hereby all in accordance with the Uniform
Commercial Code as enacted in any and all relevant jurisdictions or any other
relevant law. Each Assignor will pay any applicable filing fees, recordation
taxes and related expenses relating to its Collateral. Each Assignor hereby
authorizes the Collateral Agent to file any such financing statements without
the signature of such Assignor where permitted by law.
ARTICLE VII
REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT
7.1. Remedies; Obtaining the Collateral Upon Default. Each
Assignor agrees that, if any Event of Default shall have occurred and be
continuing, then and in every such case, the Collateral Agent, in addition to
any rights now or hereafter existing under applicable law, shall have all rights
as a secured creditor under the Uniform Commercial Code in all relevant
jurisdictions and may:
(i) personally, or by agents or attorneys, immediately take
possession of the Collateral or any part thereof, from such Assignor or
any other Person who then has possession of any part thereof with or
without notice or process of law, and for that purpose may enter upon
such Assignor's premises where any of the Collateral is located and
remove the same and use in connection with such removal any and all
services, supplies, aids and other facilities of such Assignor;
(ii) instruct the obligor or obligors on any agreement,
instrument or other obligation (including, without limitation, the
Receivables and the Contracts) constituting the Collateral to make any
payment required by the terms of such agreement, instrument or other
obligation directly to the Collateral Agent and may exercise any and
all remedies of such Assignor in respect of such Collateral;
(iii) withdraw all moneys, instruments and other securities in
the Concentration Account and/or the Cash Collateral Account and/or in
any other cash collateral account for application to the Obligations in
accordance with Section 7.4;
(iv) sell, assign or otherwise liquidate any or all of the
Collateral or any part thereof in accordance with Section 7.2, or
direct the relevant Assignor to sell, assign or otherwise liquidate any
or all of the Collateral or any part thereof, and, in each case, take
possession of the proceeds of any such sale or liquidation;
(v) take possession of the Collateral or any part thereof, by
directing the relevant Assignor in writing to deliver the same to the
Collateral Agent at any place or places designated by the Collateral
Agent, in which event such Assignor shall at its own expense:
(x) forthwith cause the same to be moved to the
place or places so designated by the Collateral Agent and
there delivered to the Collateral Agent;
(y) store and keep any Collateral so delivered to the
Collateral Agent at such place or places pending further
action by the Collateral Agent as provided in Section 7.2; and
(z) while the Collateral shall be so stored and kept,
provide such guards and maintenance services as shall be
necessary to protect the same and to preserve and maintain
them in good condition; and
(vi) license or sublicense, whether on an exclusive or
nonexclusive basis, any Marks, Patents or Copyrights included in the
Collateral for such term and on such conditions and in such manner as
the Collateral Agent shall in its sole judgment determine;
it being understood that each Assignor's obligation so to deliver the Collateral
is of the essence of this Agreement and that, accordingly, upon application to a
court of equity having jurisdiction, the Collateral Agent shall be entitled to a
decree requiring specific performance by such Assignor of said obligation.
7.2. Remedies; Disposition of the Collateral. Any Collateral
repossessed by the Collateral Agent under or pursuant to Section 7.1 and any
other Collateral whether or not so repossessed by the Collateral Agent, may be
sold, assigned, leased or otherwise disposed of under one or more contracts or
as an entirety, and without the necessity of gathering at the place of sale the
property to be sold, and in general in such manner, at such time or times, at
such place or places and on such terms as the Collateral Agent may, in
compliance with any mandatory requirements of applicable law, determine to be
commercially reasonable. Any of the Collateral may be sold, leased or otherwise
disposed of, in the condition in which the same existed when taken by the
Collateral Agent or after any overhaul or repair at the expense of the relevant
Assignor which the Collateral Agent shall determine to be commercially
reasonable. Any such disposition which shall be a private sale or other private
proceedings permitted by such requirements shall be made upon not less than 10
days' written notice to the relevant Assignor specifying the time at which such
disposition is to be made and the intended sale price or other consideration
therefor, and shall be subject, for the 10 days after the giving of such notice,
to the right of the relevant Assignor or any nominee of such Assignor to acquire
the Collateral involved at a price or for such other consideration at least
equal to the intended sale price or other consideration so specified. Any such
disposition which shall be a public sale permitted by such requirements shall be
made upon not less than 10 days' written notice to the relevant Assignor
specifying the time and place of such sale and, in the absence of applicable
requirements of law, shall be by public auction (which may, at the Collateral
Agent's option, be subject to reserve), after publication of notice of such
auction not less than 10 days prior thereto in two newspapers in general
circulation in the City of New York. To the extent permitted by any such
requirement of law, the Collateral Agent may bid for and become the purchaser of
the Collateral or any item thereof, offered for sale in accordance with this
Section without accountability to the relevant Assignor. If, under mandatory
requirements of applicable law, the Collateral Agent shall be required to make
disposition of the Collateral within a period of time which does not permit the
giving of notice to the relevant
Assignor as hereinabove specified, the Collateral Agent need give such Assignor
only such notice of disposition as shall be reasonably practicable in view of
such mandatory requirements of applicable law. Each Assignor agrees to do or
cause to be done all such other acts and things as may be reasonably necessary
to make such sale or sales of all or any portion of the Collateral valid and
binding and in compliance with any and all applicable laws, regulations, orders,
writs, injunctions, decrees or awards of any and all courts, arbitrators or
governmental instrumentalities, domestic or foreign, having jurisdiction over
any such sale or sales, all at such Assignor's expense.
7.3. Waiver of Claims. Except as otherwise expressly provided
in this Agreement, EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL
AGENT'S TAKING POSSESSION OR THE COLLATERAL AGENT'S DISPOSITION OF ANY OF THE
COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING
FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH SUCH ASSIGNOR
WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES
OR OF ANY STATE, and the Assignor hereby further waives, to the extent permitted
by law:
(i) all damages occasioned by such taking of possession
except any damages which are the direct result of the Collateral Agent's
gross negligence or willful misconduct;
(ii) all other requirements as to the time, place and terms
of sale or other requirements with respect to the enforcement of the
Collateral Agent's rights hereunder; and
(iii) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any applicable
law in order to prevent or delay the enforcement of this Agreement or
the absolute sale of the Collateral or any portion thereof, and each
Assignor, for itself and all who may claim under it, insofar as it or
they now or hereafter lawfully may, hereby waives the benefit of all
such laws.
Any sale of, or the grant of options to purchase, or any other realization upon,
any Collateral shall operate to divest all right, title, interest, claim and
demand, either at law or in equity, of the relevant Assignor therein and
thereto, and shall be a perpetual bar both at law and in equity against such
Assignor and against any and all Persons claiming or attempting to claim the
Collateral so sold, optioned or realized upon, or any part thereof, from,
through and under such Assignor.
7.4. Application of Proceeds. (a) All moneys collected by the
Collateral Agent (or, to the extent any other Security Document to which the
Assignor is a party requires proceeds of Collateral under such agreement to be
applied in accordance with the provisions of this Agreement, the Pledgee,
Mortgagee or Collateral Agent under such other agreement) upon any sale or other
disposition of the Collateral, together with all other moneys received by the
Collateral Agent hereunder, shall be applied as follows:
(i) first, to the payment of all Obligations owing the
Collateral Agent (or any other Indemnitee, in the case of clause (v)
referenced below) of the type provided in clauses (iii), (iv) and (v)
of the definition of Obligations;
(ii) second, to the extent proceeds remain after the application
pursuant to the preceding clause (i), an amount equal to the
outstanding Primary Obligations shall be paid to the Secured Creditors
as provided in Section 7.4(d), with each Secured Creditor receiving an
amount equal to its outstanding Primary Obligations or, if the proceeds
are insufficient to pay in full all such Primary Obligations, its Pro
Rata Share of the amount remaining to be distributed;
(iii) third, to the extent proceeds remain after the application
pursuant to the preceding clauses (i) and (ii), an amount equal to the
outstanding Secondary Obligations shall be paid to the Secured
Creditors as provided in Section 7.4(d), with each Secured Creditor
receiving an amount equal to its outstanding Secondary Obligations or,
if the proceeds are insufficient to pay in full all such Secondary
Obligations, its Pro Rata Share of the amount remaining to be
distributed; and
(iv) fourth, to the extent proceeds remain after the application
pursuant to the preceding clauses (i), (ii) and (iii) and following the
termination of this Agreement pursuant to Section 10.9 hereof, to the
relevant Assignor or as required by applicable law.
(b) For purposes of this Agreement (x) "Pro Rata Share" shall
mean, when calculating a Secured Creditor's portion of any distribution or
amount, that amount (expressed as a percentage) equal to a fraction the
numerator of which is the then unpaid amount of such Secured Creditor's Primary
Obligations or Secondary Obligations, as the case may be, and the denominator of
which is the then outstanding amount of all Primary Obligations or Secondary
Obligations, as the case may be, (y) "Primary Obligations" shall mean (i) in the
case of the Credit Document Obligations, all principal of, and interest on, all
Loans, and all Fees and (ii) in the case of the Interest Rate Protection
Obligations, all amounts due under the Interest Rate Protection or Other Hedging
Agreements (other than indemnities, fees (including, without limitation,
attorneys' fees) and similar obligations and liabilities) and (z) "Secondary
Obligations" shall mean all Obligations other than Primary Obligations.
(c) When payments to Secured Creditors are based upon their
respective Pro Rata shares, the amounts received by such Secured Creditors
hereunder shall be applied (for purposes of making determinations under this
Section 7.4 only) (i) first, to their Primary Obligations and (ii) second, to
their Secondary Obligations. If any payment to any Secured Creditor of its Pro
Rata Share of any distribution would result in overpayment to such Secured
Creditor, such excess amount shall instead be distributed in respect of the
unpaid Primary Obligations or Secondary Obligations, as the case may be, of the
other Secured Creditors, with each Secured Creditor whose Primary Obligations or
Secondary Obligations, as the case may be, have not been paid in full to receive
an amount equal to such excess amount multiplied by a fraction the numerator of
which is the unpaid Primary Obligations or Secondary Obligations, as the case
may be, of such Secured Creditor and the denominator of which is the unpaid
Primary Obligations or Secondary Obligations, as the case may be, of all Secured
Creditors entitled to such distribution.
(d) All payments required to be made hereunder shall be made
(i) if to the Bank Creditors, to the Agent under the Credit Agreement for the
account of the Bank Creditors, and (ii) if to the Other Creditors, to the
trustee, paying agent or other similar representative (each a "Representative")
for the Other Creditors or, in the absence of such a Representative, directly to
the Other Creditors.
(e) For purposes of applying payments received in accordance
with this Section 7.4, the Collateral Agent shall be entitled to rely upon (i)
the Administrative Agent under the Credit Agreement and (ii) the Representative
for the Other Creditors or, in the absence of such a Representative, upon the
Other Creditors for a determination (which the Administrative Agent, each
Representative for any Secured Creditors and the Secured Creditors agree (or
shall agree) to provide upon request of the Collateral Agent) of the outstanding
Primary Obligations and Secondary Obligations owed to the Bank Creditors or the
Other Creditors, as the case may be. Unless it has actual knowledge (including
by way of written notice from a Bank Creditor or an Other Creditor) to the
contrary, the Administrative Agent and each Representative, in furnishing
information pursuant to the preceding sentence, and the Collateral Agent, in
acting hereunder, shall be entitled to assume that no Secondary Obligations are
outstanding. Unless it has actual knowledge (including by way of written notice
from an Other Creditor) to the contrary, the Collateral Agent, in acting
hereunder, shall be entitled to assume that no Interest Rate Protection or Other
Hedging Agreements are in existence.
(f) It is understood that each Assignor shall remain liable to
the extent of any deficiency between the amount of the proceeds of the
Collateral and the aggregate amount of the sums referred to in clauses (i), (ii)
and (iii) of Section 7.4(a) with respect to the relevant Assignor.
7.5. Remedies Cumulative. Each and every right, power and
remedy hereby specifically given to the Collateral Agent shall be in addition to
every other right, power and remedy specifically given under this Agreement, the
Interest Rate Protection or Other Hedging Agreements, the other Credit Documents
now or hereafter existing at law, in equity or by statute and each and every
right, power and remedy whether specifically herein given or otherwise existing
may be exercised from time to time or simultaneously and as often and in such
order as may be deemed expedient by the Collateral Agent. All such rights,
powers and remedies shall be cumulative and the exercise or the beginning of the
exercise of one shall not be deemed a waiver of the right to exercise any other
or others. No delay or omission of the Collateral Agent in the exercise of any
such right, power or remedy and no renewal or extension of any of the
Obligations shall impair any such right, power or remedy or shall be construed
to be a waiver of any Default or Event of Default or an acquiescence therein. No
notice to or demand on any Assignor in any case shall entitle it to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of any of the rights of the Collateral Agent to any other or further
action in any circumstances without notice or demand. In the event that the
Collateral Agent shall bring any suit to enforce any of its rights hereunder and
shall be entitled to judgment, then in such suit the Collateral Agent may
recover reasonable expenses, including attorneys' fees, and the amounts thereof
shall be included in such judgment.
7.6. Discontinuance of Proceedings. In case the Collateral
Agent shall have instituted any proceeding to enforce any right, power or remedy
under this Agreement by foreclosure,
sale, entry or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the Collateral Agent, then and in every such
case the relevant Assignor, the Collateral Agent and each holder of any of the
Obligations shall be restored to their former positions and rights hereunder
with respect to the Collateral subject to the security interest created under
this Agreement, and all rights, remedies and powers of the Collateral Agent
shall continue as if no such proceeding had been instituted.
ARTICLE VIII
INDEMNITY
8.1. Indemnity. (a) Each Assignor jointly and severally agrees
to indemnify, reimburse and hold the Collateral Agent, each Secured Creditor and
their respective successors, permitted assigns, employees, agents and servants
(hereinafter in this Section 8.1 referred to individually as "Indemnitee," and
collectively as "Indemnitees") harmless from any and all liabilities,
obligations, damages, injuries, penalties, claims, demands, actions, suits,
judgments and any and all reasonable costs, expenses or disbursements (including
reasonable out-of-pocket attorneys' fees and expenses) (for the purposes of this
Section 8.1 the foregoing are collectively called "expenses") of whatsoever kind
and nature imposed on, asserted against or incurred by any of the Indemnitees in
any way relating to or arising out of this Agreement, any Interest Rate
Protection or Other Hedging Agreement, any other Credit Document or any other
document executed in connection herewith or therewith or in any other way
connected with the administration of the transactions contemplated hereby or
thereby or the enforcement of any of the terms of, or the preservation of any
rights under any thereof, or in any way relating to or arising out of the
manufacture, ownership, ordering, purchase, delivery, control, acceptance,
lease, financing, possession, operation, condition, sale, return or other
disposition, or use of the Collateral (including, without limitation, latent or
other defects, whether or not discoverable), the violation of the laws of any
country, state or other governmental body or unit, any tort (including, without
limitation, claims arising or imposed under the doctrine of strict liability, or
for or on account of injury to or the death of any Person (including any
Indemnitee), or property damage), or contract claim; provided that no Indemnitee
shall be indemnified pursuant to this Section 8.1(a) for losses, damages or
liabilities to the extent caused by the gross negligence or willful misconduct
of such Indemnitee. Each Assignor agrees that upon written notice by any
Indemnitee of the assertion of such a liability, obligation, damage, injury,
penalty, claim, demand, action, suit or judgment, the relevant Assignor shall
assume full responsibility for the defense thereof. Each Indemnitee agrees to
use its best efforts to promptly notify the relevant Assignor of any such
assertion of which such Indemnitee has knowledge.
(b) Without limiting the application of Section 8.1(a), each
Assignor agrees, jointly and severally, to pay, or reimburse the Collateral
Agent for any and all reasonable fees, costs and expenses of whatever kind or
nature incurred in connection with the creation, preservation or protection of
the Collateral Agent's Liens on, and security interest in, the Collateral,
including, without limitation, all out-of-pocket fees and taxes in connection
with the recording or filing of instruments and documents in public offices,
payment or discharge of any taxes or Liens upon or in respect of the Collateral,
premiums for insurance with respect to the Collateral and all other reasonable
fees, costs and expenses in connection with protecting, maintaining or
preserving
the Collateral and the Collateral Agent's interest therein, whether through
judicial proceedings or otherwise, or in defending or prosecuting any actions,
suits or proceedings arising out of or relating to the Collateral.
(c) Without limiting the application of Section 8.1(a) or (b),
each Assignor agrees, jointly and severally, to pay, indemnify and hold each
Indemnitee harmless from and against any loss, costs, damages and expenses which
such Indemnitee may suffer, expend or incur in consequence of or growing out of
any misrepresentation by any Assignor in this Agreement, any Interest Rate
Protection or Other Hedging Agreement, any other Credit Document or in any
writing contemplated by or made or delivered pursuant to or in connection with
this Agreement, any Interest Rate Protection or Other Hedging Agreement or any
other Credit Document.
(d) If and to the extent that the obligations of any Assignor
under this Section 8.1 are unenforceable for any reason, such Assignor hereby
agrees to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
8.2. Indemnity Obligations Secured by Collateral; Survival.
Any amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Obligations secured by the Collateral. The
indemnity obligations of each Assignor contained in this Article VIII shall
continue in full force and effect notwithstanding the full payment of all the
Notes issued under the Credit Agreement, the termination of all Interest Rate
Protection or Other Hedging Agreements and the payment of all other Obligations
and notwithstanding the discharge thereof.
ARTICLE IX
DEFINITIONS
The following terms shall have the meanings herein specified.
Such definitions shall be equally applicable to the singular and plural forms of
the terms defined.
"Agent" shall have the meaning provided in the recitals to
this Agreement.
"Agreement" shall have the meaning provided in the preamble to
this Agreement.
"Assignor" shall have the meaning provided in the preamble to
this Agreement.
"Bank Creditors" shall have the meaning provided in the
preamble to this Agreement.
"Banks" shall have the meaning provided in the recitals to
this Agreement.
"Cash Collateral Account" shall mean a non-interest bearing
account maintained with, and in the sole dominion and control of, the Collateral
Agent for the benefit of the Secured Creditors.
"Chattel Paper" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Class" shall have the meaning provided in Section 10.2.
"Collateral" shall have the meaning provided in Section
1.1(a).
"Collateral Agent" shall have the meaning provided in the
preamble to this Agreement.
"Contract Rights" shall mean all rights of any Assignor
(including without limitation all rights to payment) under each Contract.
"Contracts" shall mean all contracts between any Assignor and
one or more additional parties (including, without limitation, any Interest Rate
Protection or Other Hedging Agreements and the Acquisition Documents).
"Copyrights" shall mean any U.S. or foreign copyright owned by
any Assignor, including any registrations of any Copyrights, in the U.S.
Copyright Office or the equivalent thereof in any foreign jurisdiction, as well
as any application for a U.S. or foreign copyright registration now or hereafter
made with the U.S. Copyright Office or the equivalent thereof in any foreign
jurisdiction by any Assignor.
"Credit Agreement" shall have the meaning provided in the
recitals to this Agreement.
"Credit Document Obligations" shall have the meaning provided
in the definition of "Obligations" in this Article IX.
"Default" shall mean any event which, with notice or lapse of
time, or both, would constitute an Event of Default.
"Documents" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Equipment" shall mean any "equipment," as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York, now or hereafter owned by any Assignor and, in any event,
shall include, but shall not be limited to, all machinery, equipment,
furnishings, movable trade fixtures and vehicles now or hereafter owned by any
Assignor and any and all additions, substitutions and replacements of any of the
foregoing, wherever located, together with all attachments, components, parts,
equipment and accessories installed thereon or affixed thereto.
"Event of Default" shall mean any Event of Default under, and
as defined in, the Credit Agreement or any payment default under any Interest
Rate Protection or Other Hedging Agreement and shall in any event, without
limitation, include any payment default on any of the Obligations after the
expiration of any applicable grace period.
"General Intangibles" shall have the meaning provided in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Goods" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Indemnitee" shall have the meaning provided in Section 8.1.
"Instrument" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Interest Rate Protection Obligations" shall have the meaning
provided in the definition of "Obligations" in this Article IX.
"Interest Rate Protection or Other Hedging Agreements" shall
have the meaning provided in the preamble to this Agreement.
"Inventory" shall mean merchandise, inventory and goods, and
all additions, substitutions and replacements thereof, wherever located,
together with all goods, supplies, incidentals, packaging materials, labels,
materials and any other items used or usable in manufacturing, processing,
packaging or shipping same; in all stages of production -- from raw materials
through work-in-process to finished goods -- and all products and proceeds of
whatever sort and wherever located and any portion thereof which may be
returned, rejected, reclaimed or repossessed by the Collateral Agent from any
Assignor's customers, and shall specifically include all "inventory" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York, now or hereafter owned by any Assignor.
"Liens" shall mean any security interest, mortgage, pledge,
lien, claim, charge, encumbrance, title retention agreement, lessor's interest
in a financing lease or analogous instrument, in, of, or on any Assignor's
property.
"Marks" shall mean all right, title and interest in and to any
U.S. or foreign trademarks, service marks and trade names now held or hereafter
acquired by any Assignor, including any registration or application for
registration of any trademarks and service marks in the United States Patent and
Trademark Office, or the equivalent thereof in any State of the United States or
in any foreign country, and any trade dress including logos and/or designs used
by any Assignor in the United States or any foreign country.
"Obligations" shall mean (i) the full and prompt payment when
due (whether at the stated maturity, by acceleration or otherwise) of all
obligations and indebtedness (including, without limitation, indemnities, fees
and interest thereon) of each Assignor owing to the Bank Creditors, now existing
or hereafter incurred under, arising out of or in connection with any Credit
Document and the due performance and compliance by each Assignor with the terms
of each such Credit Document, including, without limitation, in the case of (x)
Holdings, all obligations under the Holdings Guaranty and (y) each Subsidiary
Guarantor, all obligations under the Subsidiaries Guaranty (other than those in
respect of Interest Rate Protection or Other Hedging Agreements) (all such
obligations and indebtedness under this clause (i), except to the
extent consisting of obligations or indebtedness with respect to Interest Rate
Protection or Other Hedging Agreements, being herein collectively called the
"Credit Document Obligations"); (ii) the full and prompt payment when due
(whether at the stated maturity, by acceleration or otherwise) of all
obligations and indebtedness (including, without limitation, indemnities, fees
and interest thereon) of each Assignor owing to the Other Creditors now existing
or hereafter incurred under, arising out of or in connection with any Interest
Rate Protection or Other Hedging Agreement including, without limitation, in the
case of (x) Holdings, all obligations under the Holdings Guaranty and (y) each
Subsidiary Guarantor, all obligations under the Subsidiaries Guaranty, in each
case in respect of Interest Rate Protection or Other Hedging Agreements (all
such obligations and indebtedness under this clause (ii) being herein
collectively called the "Interest Rate Protection Obligations"); (iii) any and
all sums advanced by the Collateral Agent in order to preserve the Collateral or
preserve its security interest in the Collateral; (iv) in the event of any
proceeding for the collection or enforcement of any indebtedness, obligations,
or liabilities referred to in clauses (i), (ii) and (iii) above, after an Event
of Default shall have occurred and be continuing, the reasonable expenses of
re-taking, holding, preparing for sale or lease, selling or otherwise disposing
of or realizing on the Collateral, or of any exercise by the Collateral Agent of
its rights hereunder, together with reasonable attorneys' fees and court costs;
and (v) all amounts paid by any Indemnitee as to which such Indemnitee has the
right to reimbursement under Section 8.1 of this Agreement.
"Other Creditors" shall have the meaning provided in the
preamble to this Agreement.
"Patents" shall mean any U.S. or foreign patent to which any Assignor now
or hereafter has title and any divisions or continuations thereof, as well as
any application for a U.S. or foreign patent now or hereafter made by any
Assignor.
"Primary Obligation" shall have the meaning provided in
Section 7.4(b).
"Pro Rata Share" shall have the meaning provided in Section
7.4(b).
"Proceeds" shall have the meaning provided in the Uniform
Commercial Code as in effect in the State of New York on the date hereof or
under other relevant law and, in any event, shall include, but not be limited
to, (i) any and all proceeds of any insurance, indemnity, warranty or guaranty
payable to the Collateral Agent or any Assignor from time to time with respect
to any of the Collateral, (ii) any and all payments (in any form whatsoever)
made or due and payable to any Assignor from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any governmental authority (or any person acting under
color of governmental authority) and (iii) any and all other amounts from time
to time paid or payable under or in connection with any of the Collateral.
"Receivables" shall mean any "account" as such term is defined
in the Uniform Commercial Code as in effect on the date hereof in the State of
New York, now or hereafter owned by any Assignor and, in any event, shall
include, but shall not be limited to, all of such Assignor's rights to payment
for goods sold or leased or services performed by such Assignor, whether now in
existence or arising from time to time hereafter, including, without limitation,
rights evidenced by an account, note, contract, security agreement, chattel
paper, or other evidence of indebtedness or security, together with (a) all
security pledged, assigned, hypothecated or granted to or held by such Assignor
to secure the foregoing, (b) all of any Assignor's right, title and interest in
and to any goods or services, the sale of which gave rise thereto, (c) all
guarantees, endorsements and indemnifications on, or of, any of the foregoing,
(d) all powers of attorney for the execution of any evidence of indebtedness or
security or other writing in connection therewith, (e) all books, records,
ledger cards, and invoices relating thereto, (f) all evidences of the filing of
financing statements and other statements and the registration of other
instruments in connection therewith and amendments thereto, notices to other
creditors or secured parties, and certificates from filing or other registration
officers, (g) all credit information, reports and memoranda relating thereto and
(h) all other writings related in any way to the foregoing.
"Representative" shall have the meaning provided in Section
7.4(d).
"Requisite Creditors" shall have the meaning provided in
Section 10.2.
"Secondary Obligation" shall have the meaning provided in
Section 7.4(b).
"Secured Creditors" shall have the meaning provided in the
preamble to this Agreement.
"Subsidiaries Guaranty" shall have the meaning provided in the
recitals to this Agreement.
"Termination Date" shall have the meaning provided in Section
10.9.
"Trade Secret Rights" shall have the meaning provided in
Section 5.1.
ARTICLE X
MISCELLANEOUS
10.1. Notices. Except as otherwise specified herein, all
notices, requests, demands or other communications to or upon the respective
parties hereto shall be in writing (including telegraphic, telex, facsimile
transmission or cable communication) and shall be delivered, mailed,
telegraphed, telexed, facsimile transmitted or cabled, addressed:
(a) if to any Assignor, at its address set forth opposite its
signature below;
(b) if to the Collateral Agent:
Paribas
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇;
(c) if to any Bank Creditor, either (x) to the Agent, at the
address of the Agent specified in the Credit Agreement or (y) at such
address as such Bank Creditor shall have specified in the Credit
Agreement;
(d) if to any Other Creditor, to the Representative for the
Other Creditors, at such address as such Representative may have
provided to the Borrowers and the Collateral Agent from time to time,
or, in the absence of a Representative, directly to the Other Creditors
at such address as the Other Creditors shall have specified in writing
to the Borrower and the Collateral Agent;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder. All such notices
and communications shall, when mailed, telegraphed, telexed, facsimile
transmitted or cabled or sent by overnight courier, be effective on the third
Business Day following deposit in the U.S. mails, certified, return receipt
requested, when delivered to the telegraph company, cable company or on the day
following delivery to an overnight courier, as the case may be, or sent by telex
or facsimile device, except that notices and communications to the Collateral
Agent shall not be effective until received by the Collateral Agent.
10.2. Waiver; Amendment. None of the terms and conditions of
this Agreement may be changed, waived, modified or varied in any manner
whatsoever unless in writing duly signed by each Assignor and the Collateral
Agent (with the consent of the Required Banks or, to the extent required by
Section 13.12 of the Credit Agreement, all of the Banks); provided, that any
change, waiver, modification or variance affecting the rights and benefits of a
single Class (as defined below) of Secured Creditors (and not all Secured
Creditors in a like or similar manner) shall require the written consent of the
Requisite Creditors of such Class of Secured Creditors. For the purpose of this
Agreement the term "Class" shall mean each class of Secured Creditors, i.e.,
whether (x) the Bank Creditors as holders of the Credit Document Obligations or
(y) the Other Creditors as the holders of the Interest Rate Protection
Obligations. For the purpose of this Agreement, the term "Requisite Creditors"
of any Class shall mean each of (x) with respect to the Credit Document
Obligations, the Required Banks and (y) with respect to the Interest Rate
Protection Obligations, the holders of at least a majority of all obligations
outstanding from time to time under the Interest Rate Protection or Other
Hedging Agreements.
10.3. Obligations Absolute. The obligations of each Assignor
hereunder shall remain in full force and effect without regard to, and shall not
be impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of such Assignor, except to
the extent that the enforceability thereof may be limited by any such event; (b)
any exercise or non-exercise, or any waiver of, any right, remedy, power or
privilege under or in respect of this Agreement, any other Credit Document or
any Interest Rate Protection or Other Hedging Agreement, except as specifically
set forth in a waiver granted pursuant to Section 10.2; or (c) any amendment to
or modification of any Credit Document or any Interest Rate Protection or Other
Hedging Agreement or any security for any of the Obligations; whether or not any
Assignor shall have notice or knowledge of any of the foregoing, except as
specifically set forth in an amendment or modification executed pursuant to
Section 10.2.
10.4. Successors and Assigns. This Agreement shall be binding
upon each Assignor and its successors and assigns and shall inure to the benefit
of the Collateral Agent and each Secured Creditor and their respective
successors and assigns; provided, that no Assignor may transfer or assign any or
all of its rights or obligations hereunder without the prior written consent of
the Collateral Agent. All agreements, statements, representations and warranties
made by each Assignor herein or in any certificate or other instrument delivered
by such Assignor or on its behalf under this Agreement shall be considered to
have been relied upon by the Secured Creditors and shall survive the execution
and delivery of this Agreement, the other Credit Documents and the Interest Rate
Protection or Other Hedging Agreements regardless of any investigation made by
the Secured Creditors or on their behalf.
10.5. Headings Descriptive. The headings of the several
sections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
10.6. 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.
10.7. Governing Law. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
10.8. Assignor's Duties. It is expressly agreed, anything
herein contained to the contrary notwithstanding, that each Assignor shall
remain liable to perform all of the obligations, if any, assumed by it with
respect to the Collateral and the Collateral Agent shall not have any
obligations or liabilities with respect to any Collateral by reason of or
arising out of this Agreement, nor shall the Collateral Agent be required or
obligated in any manner to perform or fulfill any of the obligations of each
Assignor under or with respect to any Collateral.
10.9. Termination; Release. (a) After the Termination Date,
this Agreement shall terminate (provided that all indemnities set forth herein
including, without limitation, in Section
8.1 hereof shall survive such termination) and the Collateral Agent, at the
request and expense of the respective Assignor, will promptly execute and
deliver to such Assignor a proper instrument or instruments (including Uniform
Commercial Code termination statements on form UCC-3) acknowledging the
satisfaction and termination of this Agreement, and will duly assign, transfer
and deliver to such Assignor (without recourse and without any representation or
warranty) such of its Collateral as may be in the possession of the Collateral
Agent and as has not theretofore been sold or otherwise applied or released
pursuant to this Agreement. As used in this Agreement, "Termination Date" shall
mean the date upon which the Total Commitment and all Interest Rate Protection
or Other Hedging Agreements have been terminated, no Note is outstanding (and
all Loans have been paid in full) and all other Obligations then owing have been
paid in full.
(b) In the event that any part of the Collateral is sold by an
Assignor in connection with a sale permitted by the Credit Agreement or is
otherwise released at the direction of the Required Banks (or all the Banks if
required by Section 13.12 of the Credit Agreement) and the proceeds of such sale
or sales or from such release are applied in accordance with the terms of the
Credit Agreement, such Collateral will be sold free and clear of the Liens
created by this Agreement and the Collateral Agent, at the request and expense
of the respective Assignor, will duly assign, transfer and deliver to such
Assignor (without recourse and without any representation or warranty) such of
the Collateral of such Assignor as is then being (or has been) so sold or
released and as may be in the possession of the Collateral Agent and has not
theretofore been released pursuant to this Agreement.
(c) At any time that an Assignor desires that Collateral be
released as provided in the foregoing Section 10.9(a) or (b), it shall deliver
to the Collateral Agent a certificate signed by its chief financial officer,
chief executive officer or another authorized senior officer stating that the
release of the respective Collateral is permitted pursuant to Section 10.9(a) or
(b). If requested by the Collateral Agent (although the Collateral Agent shall
have no obligation to make any such request), the relevant Assignor shall
furnish appropriate legal opinions (from counsel, which may be in-house counsel,
acceptable to the Collateral Agent) to the effect set forth in the immediately
preceding sentence. The Collateral Agent shall have no liability whatsoever to
any Secured Creditor as the result of any release of Collateral by it as
permitted by this Section 10.
10.10. Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument. A set of
counterparts executed by all the parties hereto shall be lodged with the
Borrower and the Collateral Agent.
10.11. The Collateral Agent. The Collateral Agent will hold in
accordance with this Agreement all items of the Collateral at any time received
under this Agreement. It is expressly understood and agreed by the parties
hereto and each Secured Creditor, by accepting the benefits of this Agreement,
acknowledges and agrees that the obligations of the Collateral Agent as holder
of the Collateral and interests therein and with respect to the disposition
thereof, and otherwise under this Agreement, are only those expressly set forth
in this Agreement. The
Collateral Agent shall act hereunder on the terms and conditions set forth in
Section 11 of the Credit Agreement.
10.12. Limited Obligations. It is the desire and intent of
each Assignor, the Collateral Agent and the Secured Creditors that this
Agreement shall be enforced against each Assignor to the fullest extent
permissible under the laws and public policies applied in each jurisdiction in
which enforcement is sought. If and to the extent that the obligations of each
Assignor under this Agreement shall be adjudicated to be invalid or
unenforceable for any reason (including, without limitation, because of any
applicable state or federal law relating to fraudulent conveyances or transfers,
which laws would determine the solvency of any Assignor by reference to the full
amount of the Obligations at the time of the execution and delivery of this
Agreement), then the amount of the Obligations of such Assignor shall be deemed
to be reduced and such Assignor shall pay the maximum amount of the Obligations
which would be permissible under the applicable law.
10.13. Subsidiary as Assignor. It is understood and agreed
that any Subsidiary of the Borrower and/or Holdings that is required to execute
a counterpart of this Agreement after the date hereof pursuant to the Credit
Agreement shall automatically become a Assignor hereunder by executing a copy
hereof and delivering the same to the Collateral Agent.
IN WITNESS WHEREOF, the parties hereto have caused this
Security Agreement to be executed and delivered by their duly authorized
officers as of the date first above written.
Address:
[___________________ USOL HOLDINGS, INC.,
____________________ as an Assignor
Attention: ____________
Telephone: ________________
Facsimile: _________________] By:________________
Name:
Title:
[___________________ USOL, INC.,
____________________ as an Assignor
Attention: ____________
Telephone: ________________
Facsimile: _________________] By:________________
Name:
Title:
[___________________ [SUBSIDIARIES],
____________________ as an Assignor
Attention: ____________
Telephone: ________________
Facsimile: _________________] By:________________
Name:
Title:
Accepted and Agreed to:
PARIBAS,
as Collateral Agent and Administrative Agent for the Banks
By:______________________
Title:
By:______________________
Title:
ANNEX A
TO
SECURITY
AGREEMENT
SCHEDULE OF CHIEF EXECUTIVE OFFICES/RECORD LOCATIONS
1. USOL Holdings, Inc.
2. USOL, Inc.
3. [Subsidiaries]
[INFORMATION TO ALL ANNEXES
TO BE PROVIDED BY BORROWER]
ANNEX B
TO
SECURITY
AGREEMENT
SCHEDULE OF RECEIVABLES AND CONTRACT RIGHTS LOCATIONS
1. USOL Holdings, Inc.
2. USOL, Inc.
3. [Subsidiaries]
ANNEX C
TO
SECURITY
AGREEMENT
SCHEDULE OF INVENTORY AND EQUIPMENT LOCATIONS
1. USOL Holdings, Inc.
2. USOL, Inc.
3. [Subsidiaries]
ANNEX D
TO
SECURITY
AGREEMENT
TRADE AND FICTITIOUS NAMES
1. USOL Holdings, Inc.
2. USOL, Inc.
3. [Subsidiaries]
ANNEX E
TO
SECURITY
AGREEMENT
CONCENTRATION ACCOUNT CONSENT LETTER
______ __, 199_
[Name and address
of Concentration Account Bank]
Gentlemen:
We refer to account number _____ (the "Concentration Account")
maintained with you by [NAME OF CREDIT PARTY] (the "Company") and into which
certain moneys, instruments and other property are deposited from time to time.
The Company has granted to Paribas, as Collateral Agent (the "Collateral Agent")
for the benefit of the Secured Creditors under, and as defined in, the Security
Agreement, dated as of December __, 1999, among USOL Holdings, Inc., USOL, Inc.,
(the "Borrower"), various subsidiaries and the Collateral Agent, a security
interest in all assets and properties of the Company, including, among other
things, the Concentration Account, all moneys, instruments and other property
deposited therein and all certificates or other instruments, if any,
representing or evidencing the Concentration Account. It is a condition to the
continued maintenance of the Concentration Account with you that you agree to
this Letter Agreement.
By signing this Letter Agreement, you agree that from the date
hereof the Concentration Account shall be under the exclusive dominion and
control of the Collateral Agent and all moneys, instruments and other property
of the Company received in connection therewith whether or not deposited in the
Concentration Account shall be held solely for the benefit of the Collateral
Agent. The Concentration Account shall be subject to written instructions only
from the Collateral Agent. You agree to:
(a) follow your usual operating procedures for the handling of
any remittance received in the Concentration Account that contains
restrictive endorsements, irregularities, such as a variance between
the written and numerical amounts, undated or postdated items, missing
signature, incorrect payee, etc.;
(b) indorse and process all eligible checks and other
remittance items, not covered by subparagraph (a) above, deposit such
checks and other remittance items in the Concentration Account; and
(c) maintain a record of all checks and other remittance items
received in the Concentration Account and, in addition to providing the
Company with photostats, vouchers, enclosures, etc. of checks and other
remittance items received on a daily basis, as well as a monthly
statement, furnish to the Collateral Agent, free of any service charge
payable by the Collateral Agent, your regular bank statement with
respect to the
Concentration Accounts, with the words "Paribas, as
Collateral Agent Re: [NAME OF CREDIT PARTY]" included thereon so that
there is no confusion as to ownership of the Concentration Account and
so that the Collateral Agent is able to properly identify the
Concentration Account.
You hereby agree to follow the instructions of the Borrower
with respect to the disposition of any and all moneys, securities and other
instruments deposited in the Concentration Account as directed by the Borrower
unless and until you have received written instructions to the contrary from the
Collateral Agent, in which case you agree to follow such instructions from the
Collateral Agent.
You waive and agree not to assert, claim or endeavor to
exercise, and by executing this Letter Agreement bar and estop yourself from
asserting, claiming or exercising, and you acknowledge that you have not
heretofore received a notice from any other party asserting, claiming or
exercising, any right of setoff, banker's lien or other purported form of claim
with respect to the Concentration Account and funds from time to time therein.
You shall have no rights in the Concentration Account or the funds therein. To
the extent you may ever have any such rights, you hereby expressly subordinate
all such rights to all rights of the Collateral Agent.
You may terminate this Letter Agreement only upon thirty days'
prior written notice to that effect to the Borrower and the Collateral Agent, by
cancelling the Concentration Account maintained with you and transferring all
funds, if any, in such Concentration Account to the Collateral Agent. After any
such termination, you shall nonetheless remain obligated promptly to transfer to
the Collateral Agent at such address anything from time to time received in the
Concentration Account.
THIS LETTER AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Very truly yours,
[NAME OF CREDIT
PARTY]
By:________________
Title:
PARIBAS,
as Collateral Agent
By:________________
Title:
By:________________
Title:
Acknowledged and agreed to as of
the date first above written.
[CONCENTRATION ACCOUNT BANK]
By:_________________________
Title:
ANNEX F
TO
SECURITY
AGREEMENT
LIST OF MARKS
Registration Registration
Trademark Number Date Country
--------- ------ ---- -------
ANNEX G
TO
SECURITY
AGREEMENT
LIST OF PATENTS AND APPLICATIONS
ANNEX H
TO
SECURITY
AGREEMENT
LIST OF COPYRIGHTS AND APPLICATIONS
ANNEX I
TO
SECURITY
AGREEMENT
ASSIGNMENT OF SECURITY INTEREST IN
UNITED STATES TRADEMARKS AND PATENTS
FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency
of which are hereby acknowledged, [ASSIGNOR], a _______ corporation (the
"Assignor") with principal offices at ______________________________________,
hereby assigns and grants to Paribas, as Collateral Agent, with principal
offices at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Assignee"), a
security interest in (i) all of the Assignor's right, title and interest in and
to the United States trademarks, trademark registrations and trademark
applications (the "Marks") set forth on Schedule A attached hereto, (ii) all of
the Assignor's right, title and interest in and to the United States patents
(the "Patents") set forth on Schedule B attached, in each case together with
(iii) all Proceeds (as such term is defined in the Security Agreement referred
to below) and products of the Marks and Patents, (iv) the goodwill of the
businesses symbolized by the Marks and (v) all causes of action arising prior to
or after the date hereof for infringement of any of the Marks and Patents or
unfair competition regarding the same.
THIS ASSIGNMENT is made to secure the full and prompt
performance and payment of all the Obligations of the Assignor, as such term is
defined in the Security Agreement between the Assignor, the other assignors
party thereto and the Assignee, dated as of December __, 1999 (as amended from
time to time, the "Security Agreement"). Upon the occurrence of the Termination
Date (as defined in the Security Agreement), the Assignee shall, upon such
satisfaction, execute, acknowledge, and deliver to the Assignor an instrument in
writing releasing the security interest in the Marks and Patents acquired under
this Assignment.
This Assignment has been granted in conjunction with the
security interest granted to the Assignee under the Security Agreement. The
rights and remedies of the Assignee with respect to the security interest
granted herein are without prejudice to, and are in addition to those set forth
in the Security Agreement, all terms and provisions of which are incorporated
herein by reference. In the event that any provisions of this Assignment are
deemed to conflict with the Security Agreement, the provisions of the Security
Agreement shall govern.
IN WITNESS WHEREOF, the undersigned has executed this Assignment as of the
____ day of ______, ---.
[ASSIGNOR],
as Assignor
By:__________________________
Title:
PARIBAS,
as Collateral Agent, Assignee
By:__________________________
Title:
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of ________, ____, before me personally came
_________________, who, being by me duly sworn, did state as follows: that [s]he
is ______________ [title] of [ASSIGNOR], that [s]he is authorized to execute the
foregoing Assignment on behalf of said corporation and that he did so by
authority of the Board of Directors of said corporation.
-------------------------
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of ____________, ____, before me personally
came ____________________, who, being by me duly sworn, did state as follows:
that he is [Title] of Paribas, that he is authorized to execute the foregoing
Assignment on behalf of said corporation and that he did so by authority of the
Board of Directors of said corporation.
-------------------------
Notary Public
SCHEDULE A
REGISTERED U.S. TRADEMARKS AND SERVICEMARKS
▇▇▇▇ REG. NO. REG. DATE
---- -------- ---------
SCHEDULE B
UNITED STATES PATENTS
PATENT NO. TITLE ISSUE DATE
---------- ----- ----------
ANNEX J
TO
SECURITY
AGREEMENT
ASSIGNMENT OF SECURITY INTEREST
IN UNITED STATES COPYRIGHTS
WHEREAS, [ASSIGNOR], a ______________ corporation (the
"Assignor"), having its chief executive officer at
________________________________, is the owner of all right, title and interest
in and to the United States copyrights and associated United States copyright
registrations and applications for resignation set forth in Schedule A attached
hereto;
WHEREAS, PARIBAS, as Collateral Agent, having its principal
offices at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Assignee"),
desires to acquire a security interest in, and lien on, said copyrights and
copyright registrations and applications therefor and the goodwill of the
business symbolized by said copyrights; and
WHEREAS, the Assignor is willing to assign to the Assignee,
and to grant to the Assignee a security interest in and lien upon the copyrights
and copyright registrations and applications therefor described above;
NOW, THEREFORE, for good and valuable consideration, the
receipt of which is hereby acknowledged, and subject to the terms and conditions
of the Security Agreement, dated as of December __, 1999, between the Assignor
and the Assignee (as amended from time to time, the "Security Agreement"), the
Assignor hereby assigns to the Assignee, and grants to the Assignee a security
interest in and a lien upon, the copyrights and copyright registrations and
applications therefor set forth in Schedule A attached hereto and the goodwill
of the business symbolized by said copyrights.
This Assignment has been granted in conjunction with the
security interest granted to the Assignee under the Security Agreement. The
rights and remedies of the Assignee with respect to the security granted herein
are without prejudice to, and are in addition to those set forth in the Security
Agreement, all terms and provisions of which are incorporated herein by
reference. In the event that any provisions of this Assignment are deemed to
conflict with the Security Agreement, the provisions of the Security Agreement
shall govern.
Executed at New York, New York, the ____ day of _______, ____.
[ASSIGNOR],
as Assignor
By___________________________
Name:
Title:
PARIBAS,
as Collateral Agent, Assignee
By___________________________
Name:
Title:
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ___ day of ________________, ____, before me
personally came ___________________, who, being duly sworn, did depose and say
that he is ____________________ of [Assignor], that he is authorized to execute
the foregoing Assignment on behalf of said corporation and that he did so by
authority of the Board of Directors of said corporation.
-------------------------
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ___ day of ________________, ____, before me
personally came ___________________, who, being duly sworn, did depose and say
that he is ____________________ of Paribas, that he is authorized to execute the
foregoing Assignment on behalf of said corporation and that he did so by
authority of the Board of Directors of said corporation.
-------------------------
Notary Public
SCHEDULE A
U.S. COPYRIGHTS
REGISTRATION PUBLICATION
NUMBERS DATE COPYRIGHT TITLE
------------- -------------- ---------------
TABLE OF CONTENTS
Page
ARTICLE I SECURITY INTERESTS..................................................2
1.1. Grant of Security Interests.....................................2
1.2. Power of Attorney...............................................3
ARTICLE II GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS..................3
2.1. Necessary Filings...............................................4
2.2. No Liens........................................................4
2.3. Other Financing Statements......................................4
2.4. Chief Executive Office; Records.................................4
2.5. Location of Inventory and Equipment.............................5
2.6. Trade Names; Change of Name.....................................5
2.7. Recourse........................................................5
ARTICLE III SPECIAL PROVISIONS CONCERNING RECEIVABLES; CONTRACT
RIGHTS; INSTRUMENTS; CONCENTRATION ACCOUNT............................6
3.1. Additional Representations and Warranties.......................6
3.2. Maintenance of Records..........................................6
3.3. Direction to Account Debtors; Contracting Parties; etc..........7
3.4. Modification of Terms; etc......................................7
3.5. Collection......................................................7
3.6. Instruments.....................................................7
3.7. Concentration Account..........................................8
3.8. Further Actions.................................................9
ARTICLE IV SPECIAL PROVISIONS CONCERNING TRADEMARKS...........................9
4.1. Additional Representations and Warranties.......................9
4.2. Licenses and Assignments........................................9
4.3. Infringements...................................................9
4.4. Preservation of Marks..........................................10
4.5. Maintenance of Registration....................................10
4.6. Future Registered Marks........................................10
4.7. Remedies.......................................................10
ARTICLE V SPECIAL PROVISIONS CONCERNING
PATENTS, COPYRIGHTS AND TRADE SECRETS................................11
5.1. Additional Representations and Warranties......................11
5.2. Licenses and Assignments.......................................11
5.3. Infringements..................................................11
5.4. Maintenance of Patents and Copyrights..........................12
5.5. Prosecution of Patent Application..............................12
5.6. Other Patents and Copyrights...................................12
5.7. Remedies.......................................................12
ARTICLE VI PROVISIONS CONCERNING ALL COLLATERAL..............................13
6.1. Protection of Collateral Agent's Security......................13
6.2. Warehouse Receipts Non-negotiable..............................13
6.3. Further Actions................................................13
6.4. Financing Statements...........................................13
ARTICLE VII REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT.....................14
7.1. Remedies; Obtaining the Collateral Upon Default................14
7.2. Remedies; Disposition of the Collateral........................15
7.3. Waiver of Claims...............................................16
7.4. Application of Proceeds........................................16
7.5. Remedies Cumulative............................................18
7.6. Discontinuance of Proceedings..................................18
ARTICLE VIII INDEMNITY.......................................................19
8.1. Indemnity......................................................19
8.2. Indemnity Obligations Secured by Collateral; Survival..........20
ARTICLE IX DEFINITIONS.......................................................20
ARTICLE X MISCELLANEOUS......................................................24
10.1. Notices.......................................................24
10.2. Waiver; Amendment.............................................25
10.3. Obligations Absolute..........................................26
10.4. Successors and Assigns........................................26
10.5. Headings Descriptive..........................................26
10.6. Severability..................................................26
10.7. Governing Law.................................................26
10.8. Assignor's Duties.............................................26
10.9. Termination; Release..........................................26
10.10. Counterparts.................................................27
10.11. The Collateral Agent.........................................27
10.12. Limited Obligations..........................................28
10.13. Subsidiary as Assignor.......................................28
ANNEX A Schedule of Chief Executive Offices/Record Locations
ANNEX B Schedule of Receivables and Contract Rights Locations
ANNEX C Schedule of Inventory and Equipment Locations
ANNEX D Trade and Fictitious Names
ANNEX E Concentration Account Consent Letter
ANNEX F List of Marks
ANNEX G List of Patents and Applications
ANNEX H List of Copyrights and Applications
ANNEX I Assignment of Security Interest in United States Trademarks and Patents
ANNEX J Assignment of Security Interest in United States Copyrights
EXHIBIT H
SUBSIDIARIES GUARANTY
GUARANTY, dated as of December __, 1999 (as amended, modified
or supplemented from time to time, this "Guaranty"), made by each of the
undersigned (each a "Guarantor" and, together with each other entity that is
required to execute a counterpart hereof pursuant to Section 25 hereof, the
"Guarantors"). Except as otherwise defined herein, terms used herein and defined
in the Credit Agreement (as defined below) shall be used herein as therein
defined.
W I T N E S S E T H :
WHEREAS, USOL Holdings, Inc. ("Holdings"), USOL, Inc. (the
"Borrower"), various financial institutions from time to time party thereto (the
"Banks"), Paribas, as Administrative Agent (the "Administrative Agent") and
Syndication Agent (the "Syndication Agent"), and Deutsche Bank AG, New York
Branch, as Documentation Agent (the "Documentation Agent", and together with the
Administrative Agent and Syndication Agent, the "Agents"), have entered into a
Credit Agreement, dated as of December 30, 1999 (as amended, modified or
supplemented from time to time, the "Credit Agreement"), providing for the
making of Loans to the Borrower as contemplated therein (the Banks, the Agents
and the Collateral Agent herein called the "Bank Creditors");
WHEREAS, the Borrower may from time to time enter into one or
more (i) interest rate protection agreements (including, without limitation,
interest rate swaps, caps, floors, collars and similar agreements), (ii) foreign
exchange contracts, currency swap agreements or other similar agreements or
arrangements designed to protect against the fluctuations in currency values
and/or (iii) other types of hedging agreements from time to time (each such
agreement or arrangement with an Other Creditor (as hereinafter defined), an
"Interest Rate Protection Agreement or Other Hedging Agreement"), with any Bank,
any affiliate thereof or a syndicate of financial institutions organized by any
such Bank or affiliate of any such Bank or affiliate (even if any such Bank
ceases to be a Bank under the Credit Agreement for any reason) and any such
other institution that participates in such Interest Rate Protection Agreements
or Other Hedging Agreements and their subsequent successors and assigns
collectively, the "Other Creditors", and together with the Bank Creditors, the
"Creditors");
WHEREAS, the Borrower is a Wholly-Owned Subsidiary of Holdings;
WHEREAS, each Guarantor is a direct or indirect Wholly-Owned
Subsidiary of the Borrower;
WHEREAS, it is a requirement under the Credit Agreement that
each Guarantor shall have executed and delivered this Guaranty; and
WHEREAS, each Guarantor will obtain benefits from the
incurrence of Loans by the Borrower under the Credit Agreement and the entering
into of Interest Rate Protection Agreements or Other Hedging Agreements and,
accordingly, desires to execute this Guaranty in order to satisfy the conditions
described in the preceding paragraph and to induce the Banks to
maintain and make Loans to the Borrower and the Other Creditors to maintain and
enter into Interest Rate Protection Agreements or Other Hedging Agreements with
the Borrower;
NOW, THEREFORE, in consideration of the foregoing and other
benefits accruing to each Guarantor, the receipt and sufficiency of which are
hereby acknowledged, each Guarantor hereby makes the following representations
and warranties to the Creditors and hereby covenants and agrees with each
Creditor as follows:
1. Each Guarantor, jointly and severally, irrevocably and
unconditionally guarantees: (i) to the Bank Creditors the full and prompt
payment when due (whether at the stated maturity, by acceleration or otherwise)
of (x) the principal of and interest on the Notes issued by, and the Loans made
to, the Borrower under the Credit Agreement and (y) all other obligations
(including obligations which, but for any automatic stay under Section 362(a) of
the Bankruptcy Code, would become due) and liabilities owing by the Borrower to
the Bank Creditors (including, without limitation, indemnities, Fees and
interest thereon) now existing or hereafter incurred under, arising out of or in
connection with the Credit Agreement or any other Credit Document and the due
performance and compliance with the terms, conditions and agreements contained
in the Credit Documents by the Borrower (all such principal, interest,
liabilities and obligations being herein collectively called the "Credit
Agreement Obligations"); and (ii) to each Other Creditor the full and prompt
payment when due (whether at the stated maturity, by acceleration or otherwise)
of all obligations (including obligations which, but for any automatic stay
under Section 362(a) of the Bankruptcy Code, would become due) and liabilities
owing by the Borrower to the Other Creditors (including, without limitation,
indemnities, fees and interest thereon) under any Interest Rate Protection
Agreements or Other Hedging Agreements, whether now in existence or hereafter
arising, and the due performance and compliance by the Borrower with all terms,
conditions and agreements contained therein (all such obligations and
liabilities under this clause (ii) being herein collectively called the "Other
Obligations", and together with the Credit Agreement Obligations are herein
collectively called the "Guaranteed Obligations"). Each Guarantor understands,
agrees and confirms that the Creditors may enforce this Guaranty up to the full
amount of the Guaranteed Obligations against each Guarantor without proceeding
against any other Guarantor, the Borrower, against any security for the
Guaranteed Obligations, or against any other guarantor under any other guaranty
covering all or a portion of the Guaranteed Obligations. This Guaranty shall
constitute a guaranty of payment and not of collection. All payments by each
Guarantor under this Guaranty shall be made on the same basis as payments by the
Borrower are made under Sections 3.03 and 3.04 of the Credit Agreement.
2. Additionally, each Guarantor, jointly and severally,
unconditionally and irrevocably, guarantees the payment of any and all
Guaranteed Obligations of the Borrower to the Creditors whether or not due or
payable by the Borrower upon the occurrence in respect of the Borrower of any of
the events specified in Section 9.05 of the Credit Agreement, and
unconditionally and irrevocably, jointly and severally, promises to pay such
Guaranteed Obligations to the Creditors, or order, on demand, in lawful money of
the United States.
3. The liability of each Guarantor hereunder is exclusive and
independent of any security for or other guaranty of the indebtedness of the
Borrower whether executed by such Guarantor, any other Guarantor, any other
guarantor or by any other party, and the liability of
each Guarantor hereunder shall not be affected or impaired by (i) any direction
as to application of payment by the Borrower or by any other party, (ii) any
other continuing or other guaranty, undertaking or maximum liability of a
guarantor or of any other party as to the indebtedness of the Borrower, (iii)
any payment on or in reduction of any such other guaranty or undertaking, (iv)
any dissolution, termination or increase, decrease or change in personnel by the
Borrower, (v) any payment made to any Creditor on the indebtedness which any
Creditor repays the Borrower pursuant to court order in any bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceeding, and
each Guarantor waives any right to the deferral or modification of its
obligations hereunder by reason of any such proceeding, (vi) any action or
inaction by the Creditors as contemplated in Section 6 hereof or (vii) any
invalidity, irregularity or unenforceability of all or part of the Guaranteed
Obligations or of any security therefor.
4. The obligations of each Guarantor hereunder are independent
of the obligations of any other Guarantor, any other guarantor of the Borrower
or the Borrower, and a separate action or actions may be brought and prosecuted
against each Guarantor whether or not action is brought against any other
Guarantor, any other guarantor of the Borrower or the Borrower and whether or
not any other Guarantor, any other guarantor of the Borrower or the Borrower be
joined in any such action or actions. Each Guarantor waives, to the fullest
extent permitted by law, the benefit of any statute of limitations affecting its
liability hereunder or the enforcement thereof. Any payment by the Borrower or
other circumstance which operates to toll any statute of limitations as to the
Borrower shall operate to toll the statute of limitations as to each Guarantor.
5. Each Guarantor hereby waives (to the fullest extent
permitted by applicable law) notice of acceptance of this Guaranty and notice of
any liability to which it may apply, and waives promptness, diligence,
presentment, demand of payment, protest, notice of dishonor or nonpayment of any
such liabilities, suit or taking of other action by the Agents or any other
Creditor against, and any other notice to, any party liable thereon (including
such Guarantor or any other guarantor of the Borrower).
6. Any Creditor may at any time and from time to time without
the consent of, or notice to, any Guarantor, without incurring responsibility to
such Guarantor, without impairing or releasing the obligations of such Guarantor
hereunder, upon or without any terms or conditions and in whole or in part:
(i) change the manner, place or terms of payment of, and/or
change or extend the time of payment of, renew or alter, any of the Guaranteed
Obligations, (including any increase or decrease in the rate of interest
thereon), any security therefor, or any liability incurred directly or
indirectly in respect thereof, and the guaranty herein made shall apply to the
Guaranteed Obligations as so changed, extended, renewed or altered;
(ii) take and hold security for the payment of the Guaranteed
Obligations and/or sell, exchange, release, surrender, realize upon or otherwise
deal with in any manner and in any order any property by whomsoever at any time
pledged or mortgaged to secure, or howsoever securing, the Guaranteed
Obligations or any liabilities (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and/or any offset
thereagainst;
(iii) exercise or refrain from exercising any rights against the
Borrower, any Guarantor, any other guarantor of the Borrower or others or
otherwise act or refrain from acting;
(iv) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and may subordinate the
payment of all or any part thereof to the payment of any liability (whether due
or not) of the Borrower to creditors of the Borrower;
(v) apply any sums by whomsoever paid or howsoever realized to
any liability or liabilities of the Borrower to the Creditors regardless of what
liabilities of the Borrower remain unpaid;
(vi) release or substitute any one or more endorsers, guarantors,
Guarantors, the Borrower or other obligors;
(vii) consent to or waive any breach of, or any act, omission or
default under, the Interest Rate Protection Agreements or Other Hedging
Agreements, the Credit Documents or any of the instruments or agreements
referred to therein, or otherwise amend, modify or supplement any of the
Interest Rate Protection Agreements or Other Hedging Agreements, the Credit
Documents or any of such other instruments or agreements; and/or
(viii) act or fail to act in any manner referred to in this
Guaranty which may deprive such Guarantor of its right to subrogation against
the Borrower to recover full indemnity for any payments made pursuant to this
Guaranty.
7. No invalidity, irregularity or unenforceability of all or
any part of the Guaranteed Obligations or of any security therefor shall affect,
impair or be a defense to this Guaranty, and this Guaranty shall be primary,
absolute and unconditional notwithstanding the occurrence of any event or the
existence of any other circumstances which might constitute a legal or equitable
discharge of a surety or guarantor except payment in full of the Guaranteed
Obligations.
8. This Guaranty is a continuing one and all liabilities to
which it applies or may apply under the terms hereof shall be conclusively
presumed to have been created in reliance hereon. No failure or delay on the
part of any Creditor in exercising any right, power or privilege hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein expressly specified are cumulative and not exclusive of any
rights or remedies which any Creditor would otherwise have. No notice to or
demand on any Guarantor in any case shall entitle such Guarantor to any other
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of any Creditor to any other or further action in any
circumstances without notice or demand. It is not necessary for any Creditor to
inquire into the capacity or powers of the Borrower or any of its Subsidiaries
or the officers, directors, partners or agents acting or purporting to act on
its behalf, and any indebtedness made or created in reliance upon the professed
exercise of such powers shall be guaranteed hereunder.
9. Any indebtedness of the Borrower now or hereafter held by
any Guarantor is hereby subordinated to the indebtedness of the Borrower to the
Creditors; and such indebtedness of the Borrower to any Guarantor, if the
Administrative Agent, after an Event of Default has occurred and is continuing,
so requests, shall be collected, enforced and received by such Guarantor as
trustee for the Creditors and be paid over to the Creditors on account of the
indebtedness of the Borrower to the Creditors, but without affecting or
impairing in any manner the liability of such Guarantor under the other
provisions of this Guaranty. Prior to the transfer by any Guarantor of any note
or negotiable instrument evidencing any indebtedness of the Borrower to such
Guarantor, such Guarantor shall ▇▇▇▇ such note or negotiable instrument with a
legend that the same is subject to this subordination. Without limiting the
generality of the foregoing, each Guarantor hereby agrees with the Creditors
that it will not exercise any right of subrogation which it may at any time
otherwise have as a result of this Guaranty (whether contractual, under Section
509 of the Bankruptcy Code or otherwise) until all Guaranteed Obligations have
been irrevocably paid in full in cash.
10. (a) Each Guarantor waives any right (except as shall be
required by applicable statute and cannot be waived) to require the Creditors
to: (i) proceed against the Borrower, any other Guarantor, any other guarantor
of the Borrower or any other party; (ii) proceed against or exhaust any security
held from the Borrower, any other Guarantor, any other guarantor of the Borrower
or any other party; or (iii) pursue any other remedy in the Creditors' power
whatsoever. Each Guarantor waives any defense based on or arising out of any
defense of the Borrower, any other Guarantor, any other guarantor of the
Borrower or any other party other than payment in full of the Guaranteed
Obligations, including, without limitation, any defense based on or arising out
of the disability of the Borrower, any other Guarantor, any other guarantor of
the Borrower or any other party, or the unenforceability of the Guaranteed
Obligations or any part thereof from any cause, or the cessation from any cause
of the liability of the Borrower other than payment in full of the Guaranteed
Obligations. The Creditors may, at their election, foreclose on any security
held by the Agents, the Collateral Agent or the other Creditors by one or more
judicial or nonjudicial sales, whether or not every aspect of any such sale is
commercially reasonable (to the extent such sale is permitted by applicable
law), or exercise any other right or remedy the Creditors may have against the
Borrower or any other party, or any security, without affecting or impairing in
any way the liability of any Guarantor hereunder except to the extent the
Guaranteed Obligations have been paid in full. Each Guarantor waives any defense
arising out of any such election by the Creditors, even though such election
operates to impair or extinguish any right of reimbursement or subrogation or
other right or remedy of such Guarantor against the Borrower or any other party
or any security.
(b) Each Guarantor waives all presentments, demands for
performance, protests and notices, including, without limitation, notices of
nonperformance, notices of protest, notices of dishonor, notices of acceptance
of this Guaranty, and notices of the existence, creation or incurring of new or
additional indebtedness. Each Guarantor assumes all responsibility for being and
keeping itself informed of the Borrower's financial condition and assets, and of
all other circumstances bearing upon the risk of nonpayment of the Guaranteed
Obligations and the nature, scope and extent of the risks which such Guarantor
assumes and incurs hereunder, and agrees that the Creditors shall have no duty
to advise any Guarantor of information known to them regarding such
circumstances or risks.
11. The Creditors agree that this Guaranty may be enforced
only by the action of the Administrative Agent or the Collateral Agent, in each
case acting upon the instructions of the Required Banks (or, after the date on
which all Credit Document Obligations have been paid in full, the holders of at
least a majority of the outstanding Other Obligations) and that no other
Creditor shall have any right individually to seek to enforce or to enforce this
Guaranty or to realize upon the security to be granted by the Security
Documents, it being understood and agreed that such rights and remedies may be
exercised by the Administrative Agent or the Collateral Agent or the holders of
at least a majority of the outstanding Other Obligations, as the case may be,
for the benefit of the Creditors upon the terms of this Guaranty and the
Security Documents. The Creditors further agree that this Guaranty may not be
enforced against any director, officer, employee, or stockholder of any
Guarantor (except to the extent such stockholder is also a Guarantor hereunder).
12. In order to induce the Banks to make Loans pursuant to the
Credit Agreement, and in order to induce the Other Creditors to execute, deliver
and perform the Interest Rate Protection Agreements or Other Hedging Agreements,
each Guarantor represents, warrants and covenants that:
(a) Such Guarantor (i) is a duly organized and validly
existing corporation and is in good standing under the laws of the
jurisdiction of its organization, and has the corporate power and
authority to own its property and assets and to transact the business
in which it is engaged and presently proposes to engage and (ii) is
duly qualified and is authorized to do business and is in good standing
in all jurisdictions where it is required to be so qualified except
where the failure to be so qualified could reasonably be expected to
have a material adverse effect on the business, operations, property,
assets, nature of assets, liabilities, condition (financial or
otherwise) or prospects of such Guarantor or of such Guarantor and its
Subsidiaries taken as a whole.
(b) Such Guarantor has the corporate power and authority to
execute, deliver and carry out the terms and provisions of this
Guaranty and each other Document to which it is a party and has taken
all necessary corporate action to authorize the execution, delivery and
performance by it of this Guaranty and each such other Document. Such
Guarantor has duly executed and delivered this Guaranty and each other
Document to which it is a party, and this Guaranty and each such other
Document constitutes the legal, valid and binding obligation of such
Guarantor enforceable in accordance with its terms, except to the
extent that the enforceability hereof or thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally and equitable
principles (regardless of whether such enforceability is sought in
equity or at law).
(c) Neither the execution, delivery or performance by such
Guarantor of this Guaranty or any other Document to which it is a
party, nor compliance by it with the terms and provisions hereof and
thereof: (i) will contravene any applicable provision of any law,
statute, rule or regulation, or any order, writ, injunction or decree
of any court or governmental instrumentality, (ii) will conflict or be
inconsistent with or result in any breach of, any of the terms,
covenants, conditions or provisions of, or constitute a default under,
or (other than pursuant to the Security Documents) result in the
creation or imposition of (or the obligation to create or impose) any
Lien upon any of the property or assets of such Guarantor or any of its
Subsidiaries pursuant to the terms of any indenture, mortgage, deed of
trust, credit agreement, loan agreement or any other agreement or other
instrument to which such Guarantor or any of its Subsidiaries is a
party or by which it or any of its property or assets is bound or to
which it may be subject or (iii) will violate any provision of the
certificate of incorporation or by-laws (or equivalent organizational
documents) of such Guarantor or any of its Subsidiaries.
(d) No order, consent, approval, license, authorization or
validation of, or filing, recording or registration with, or exemption
by, any foreign or domestic governmental or public body or authority,
or any subdivision thereof, is required to authorize, or is required in
connection with, (i) the execution, delivery and performance of this
Guaranty or any other Document to which such Guarantor is a party, or
(ii) the legality, validity, binding effect or enforceability of this
Guaranty or any other Document to which such Guarantor is a party.
(e) There are no actions, suits or proceedings pending or
threatened (i) with respect to this Guaranty or any other Document to
which such Guarantor is a party, (ii) with respect to any Indebtedness
of such Guarantor or any of its Subsidiaries, (iii) that could
reasonably be expected to have a material adverse effect on the
business, operations, property, assets, nature of assets, liabilities,
condition (financial or otherwise) or prospects of such Guarantor or of
such Guarantor and its Subsidiaries taken as a whole or (iv) that could
reasonably be expected to have a material adverse effect on the rights
or remedies of the Creditors or on the ability of such Guarantor to
perform its respective obligations to the Creditors hereunder and under
the other Credit Documents to which it is a party.
13. Each Guarantor covenants and agrees that on and after the
date hereof and until the termination of the Total Commitment and all Interest
Rate Protection Agreements or Other Hedging Agreements and when no Note remains
outstanding and all other Guaranteed Obligations have been paid in full (other
than indemnities described in Section 13.01 of the Credit Agreement and
analogous provisions in the Security Documents which are not then due and
payable), such Guarantor shall take, or will refrain from taking, as the case
may be, all actions that are necessary to be taken or not taken so that no
violation of any provision, covenant or agreement contained in Section 7 or 8 of
the Credit Agreement, and so that no Default or Event of Default, is caused by
the actions of such Guarantor or any of its Subsidiaries.
14. The Guarantors hereby jointly and severally agree to pay
all out-of-pocket costs and expenses of each Creditor in connection with the
enforcement of this Guaranty and the protection of such Creditor's rights
hereunder, and in connection with any amendment, waiver or consent relating
hereto (including, without limitation, the fees and disbursements of counsel
employed by the Agents or any of the Creditors).
15. This Guaranty shall be binding upon each Guarantor and its
successors and assigns and shall inure to the benefit of the Creditors and their
successors and assigns.
16. Neither this Guaranty nor any provision hereof may be
changed, waived, discharged or terminated in any manner whatsoever unless in
writing duly signed by the Administrative Agent (with the consent of (x) the
Required Banks or, to the extent required by Section 13.12 of the Credit
Agreement, all of the Banks, at all times prior to the time at which all Credit
Agreement Obligations have been paid in full, or (y) the holders of at least a
majority of the outstanding Other Obligations at all times after the time at
which all Credit Agreement Obligations have been paid in full) and each
Guarantor directly affected thereby (it being understood that the addition or
release of any Guarantor hereunder shall not constitute a change, waiver,
discharge or termination affecting any Guarantor other than the Guarantor so
added or released); provided, that any change, waiver, modification or variance
affecting the rights and benefits of a single class (as defined below) of
Creditors (and not all Creditors in a like or similar manner) shall require the
written consent of the Requisite Creditors (as defined below) of such Class. For
the purpose of this Guaranty, the term "Class" shall mean each class of
Creditors, i.e., whether (i) the Bank Creditors as holders of the Credit
Agreement Obligations or (ii) the Other Creditors as holders of the Other
Obligations. For the purpose of this Guaranty, the term "Requisite Creditors" of
any Class shall mean each of (i) with respect to the Credit Agreement
Obligations, the Required Banks and (ii) with respect to the Other Obligations,
the holders of at least a majority of all obligations outstanding from time to
time under the Interest Rate Protection Agreements or Other Hedging Agreements.
17. Each Guarantor acknowledges that an executed (or
conformed) copy of each of the Credit Documents and the Interest Rate Protection
Agreements or Other Hedging Agreements has been made available to its principal
executive officers and such officers are familiar with the contents thereof.
18. In addition to any rights now or hereafter granted under
applicable law (including, without limitation, Section 151 of the New York
Debtor and Creditor Law) and not by way of limitation of any such rights, upon
the occurrence and during the continuance of an Event of Default (such term to
mean and include any "Event of Default" as defined in the Credit Agreement or
any payment default under any Interest Rate Protection Agreement or Other
Hedging Agreement and shall in any event, include, without limitation, any
payment default on any of the Guaranteed Obligations continuing after any
applicable grace period), each Creditor is hereby authorized at any time or from
time to time, without notice to any Guarantor or to any other Person, any such
notice being expressly waived, to set off and to appropriate and apply any and
all deposits (general or special) and any other indebtedness at any time held or
owing by such Creditor to or for the credit or the account of such Guarantor,
against and on account of the obligations and liabilities of such Guarantor to
such Creditor under this Guaranty, irrespective of whether or not such Creditor
shall have made any demand hereunder and although said obligations, liabilities,
deposits or claims, or any of them, shall be contingent or unmatured. Each
Creditor acknowledges and agrees that the provisions of this Section 18 are
subject to the sharing provisions set forth in Section 13.06(b) of the Credit
Agreement.
19. All notices, requests, demands or other communications
pursuant hereto shall be deemed to have been duly given or made when delivered
to the Person to which such notice, request, demand or other communication is
required or permitted to be given or made under this Guaranty, addressed to such
party at (i) in the case of any Bank Creditor, as provided in the
Credit Agreement, (ii) in the case of any Guarantor, at its address set forth
opposite its signature below and (iii) in the case of any Other Creditor, at
such address as such Other Creditor shall have specified in writing to the
Guarantor; or in any case at such other address as any of the Persons listed
above may hereafter notify the others in writing.
20. If claim is ever made upon any Creditor for repayment or
recovery of any amount or amounts received in payment or on account of any of
the Guaranteed Obligations and any of the aforesaid payees repays all or part of
said amount by reason of (i) any judgment, decree or order of any court or
administrative body having jurisdiction over such payee or any of its property
or (ii) any settlement or compromise of any such claim effected by such payee
with any such claimant (including the Borrower), then and in such event each
Guarantor agrees that any such judgment, decree, order, settlement or compromise
shall be binding upon such Guarantor, notwithstanding any revocation hereof or
the cancellation of any Note or any Interest Rate Protection Agreement or Other
Hedging Agreement or other instrument evidencing any liability of the Borrower,
and such Guarantor shall be and remain liable to the aforesaid payees hereunder
for the amount so repaid or recovered to the same extent as if such amount had
never originally been received by any such payee.
21. (A) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE
CREDITORS AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
(B) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
GUARANTY OR ANY OTHER CREDIT DOCUMENT TO WHICH ANY GUARANTOR IS A PARTY MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF
THIS GUARANTY, EACH GUARANTOR HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS. EACH GUARANTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING
BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE
PREPAID, TO EACH GUARANTOR AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE
BELOW, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH
GUARANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND
FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR
PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT TO WHICH SUCH
GUARANTOR IS A PARTY THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR
INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY OF THE CREDITORS TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST EACH GUARANTOR IN ANY OTHER
JURISDICTION.
(C) EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE
AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
GUARANTY OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN
CLAUSE (B) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD
OR CLAIM IN ANY SUCH COURT THAT SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(D) EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS GUARANTY, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
22. In the event that all of the capital stock of one or more
Guarantors is sold or otherwise disposed of or liquidated in compliance with the
requirements of Section 8.02 of the Credit Agreement (or such sale or other
disposition has been approved in writing by the Required Banks (or all Banks if
required by Section 13.12 of the Credit Agreement)) and the proceeds of such
sale, disposition or liquidation are applied in accordance with the provisions
of the Credit Agreement, to the extent applicable, such Guarantor shall be
released from this Guaranty and this Guaranty shall, as to each such Guarantor
or Guarantors, terminate, and have no further force or effect (it being
understood and agreed that the sale of one or more Persons that own, directly or
indirectly, all of the capital stock of any Guarantor shall be deemed to be a
sale of such Guarantor for the purposes of this Section 22).
23. All payments made by any Guarantor hereunder will be made
without setoff, counterclaim or other defense.
24. This Guaranty may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.
25. It is understood and agreed that any Subsidiary of
Holdings that is required to execute a counterpart of this Guaranty pursuant to
the Credit Agreement after the date hereof shall automatically become a
Guarantor hereunder by executing a counterpart hereof and delivering the same to
the Administrative Agent.
26. It is the desire and intent of each Guarantor and the
Creditors that this Guaranty shall be enforced against each Guarantor to the
fullest extent permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought. If, however, and to the extent
that, the obligations of each Guarantor under this Guaranty shall be adjudicated
to be invalid or unenforceable for any reason (including, without limitation,
because of any applicable state or federal law relating to fraudulent
conveyances or transfers), then the amount of the Guaranteed Obligations of such
Guarantor shall be deemed to be reduced and such Guarantor shall pay the maximum
amount of the Guaranteed Obligations which would be permissible under applicable
law.
* * *
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to
be executed and delivered as of the date first above written.
Address: [SUBSIDIARIES]
By: ____________________________________
Title:
Accepted and Agreed to:
PARIBAS, as Administrative Agent for the Banks
By_________________________________
Title:
By_________________________________
Title:
EXHIBIT I
December __, 1999
To the Administrative Agent and the Banks party to the Credit Agreement referred
to below:
Re: USOL, Inc. Credit Facility
Ladies and Gentlemen:
Reference is made to (i) the Credit Agreement, dated as of
December 30, 1999, among USOL Holdings, Inc. ("Holdings"), USOL, Inc. (the
"Borrower"), the financial institutions party thereto from time to time (each, a
"Bank" and, collectively, the "Banks"), Paribas, as Administrative Agent (the
"Administrative Agent") and Syndication Agent (the "Syndication Agent") and
Deutsche Bank AG, New York Branch, as Documentation Agent (the "Documentation
Agent", and together with the Administrative Agent and Syndication Agent, the
"Agents") (as such Credit Agreement may be amended, modified or supplemented
from time to time, the "Credit Agreement") and (ii) the Subsidiaries Guaranty,
dated as of December __, 1999, among various subsidiaries of the Borrower (each
a "Subsidiary Guarantor," and collectively, the "Subsidiary Guarantors") and
Paribas, as Collateral Agent (the "Collateral Agent") (as such Subsidiaries
Guaranty may be amended, modified or supplemented from time to time, the
"Subsidiaries Guaranty").
Each of Holdings and the Borrower, pursuant to Section 13.08
of the Credit Agreement, and each Subsidiary Guarantor, pursuant to Section 21
of the Subsidiaries Guaranty, has irrevocably designated, appointed and
empowered the undersigned (at the undersigned's office located at ▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇), as its authorized designee, appointee and agent to
receive, accept and acknowledge for and on its behalf, and in respect of its
property, service of any and all legal process, summons, notices and documents
which may be served in any such legal action or proceeding with respect to the
Credit Agreement or the Subsidiaries Guaranty, as the case may be, and/or any
other Credit Document (as defined in the Credit Agreement) to which it is a
party in the courts of the State of New York or of the United States of America
for the Southern District of New York.
The undersigned hereby (a) informs you that it irrevocably
accepts such appointment and will perform such obligations as agent as set forth
in Section 13.08 of the Credit Agreement and Section 21 of the Subsidiaries
Guaranty and (b) agrees with you that (i) it will not terminate such agency
relationship prior to December 31, 2006, provided that this appointment as
agentshall remain in full force and effect so long as any dispute arising under,
or relating to, the Credit Agreement, any Credit Document or the transactions
contemplated thereby shall continue and the undersigned is advised in writing of
any extension of such date and also provided that the undersigned has received
payment for service through that date, (ii) it will maintain an office in New
York, New York, at all times to and including said date and will give you prompt
notice of any change of its address during such period and (iii) it will
promptly forward to Holdings, the Borrower, or a Subsidiary Guarantor, as the
case may be, any such summons, complaint or other legal process that the
undersigned receives in connection with its appointment as such agent of
Holdings, the Borrower, and the Subsidiary Guarantors.
As process agent, the undersigned, and its successor or
successors, agree to discharge the above-mentioned obligations and will not
refuse fulfillment of such obligations under Section 13.08 of the Credit
Agreement and Section 21 of the Subsidiaries Guaranty.
Very truly yours,
CT CORPORATION SYSTEM
_______________________________
Name:
Title:
EXHIBIT J
OFFICER'S SOLVENCY CERTIFICATE
I, the undersigned, [Chairman] [President] [Chief Financial Officer] of
USOL Holdings, Inc., a [Delaware] corporation ("Holdings"), do hereby certify on
behalf of Holdings that:
1. This Certificate is furnished to the Banks pursuant to Section 4.13 of
the Credit Agreement, dated as of December 30, 1999, among Holdings, USOL, Inc.,
various financial institutions from time to time party thereto (the "Banks"),
Paribas, as Administrative Agent and Documentation Agent, and Deutsche Bank AG,
New York Branch, as Documentation Agent (such Credit Agreement, as in effect on
the date of this Certificate, being herein called the "Credit Agreement").
Unless otherwise defined herein, capitalized terms used in this Certificate
shall have the meanings set forth in the Credit Agreement.
2. For purposes of this Certificate, the terms below shall have the
following definitions:
(a) "Fair Value"
The amount at which the assets, in their entirety, of each of
(i) Holdings and its Subsidiaries (taken as a whole) and (ii)
the Borrower (on a stand-alone basis) would change hands
between a willing buyer and a willing seller, within a
commercially reasonable period of time, each having reasonable
knowledge of the relevant facts, with neither being under any
compulsion to act.
(b) "Present Fair Salable Value"
The amount that could be obtained by an independent willing
seller from an independent willing buyer if the assets of each
of (i) Holdings and its Subsidiaries (taken as a whole) and
(ii) the Borrower (on a stand-alone basis) are sold with
reasonable promptness under normal selling conditions in a
current market.
(c) "New Financing"
The indebtedness incurred or to be incurred by Holdings and
the other Guarantors under the Credit Documents and all other
financing contemplated by the Credit Documents.
(d) "Stated Liabilities"
The recorded liabilities (including Contingent Liabilities
that would be recorded in accordance with generally accepted
accounting principles ("GAAP") consistently applied) of
Holdings and the other Guarantors at ______________, 1999,
together with (i) the net change in long-term debt (including
current maturities) between ______________, 1999 and the date
hereof and (ii) without duplication, the amount of all New
Financing.
(e) "Contingent Liabilities"
The maximum estimated amount of liability reasonably likely to
result from pending litigation, asserted claims and
assessments, guaranties, uninsured risks and other contingent
liabilities of Holdings and its Subsidiaries (exclusive of
such Contingent Liabilities to the extent reflected in Stated
Liabilities).
(f) "Will be able to pay its Stated Liabilities and Identified
Contingent Liabilities, as they mature"
For the period from the date hereof through the stated
maturity of all New Financing, each of (i) Holdings and its
Subsidiaries (taken as a whole) and (ii) the Borrower (on a
stand-alone basis) will have sufficient assets and cash flow
to pay their respective Stated Liabilities and Contingent
Liabilities as those liabilities mature or otherwise become
due.
(g) "Does not have Unreasonably Small Capital"
For the period from the date hereof through the stated
maturity of all New Financing, each of (i) Holdings and its
Subsidiaries (taken as a whole) and (ii) the Borrower (on a
stand-alone basis), after consummation of all Indebtedness
(including the Loans) being incurred or assumed and Liens
created by Holdings and the Borrower in connection therewith,
is a going concern and has sufficient capital to ensure that
it will continue to be a going concern for such period and to
remain a going concern despite moderately negative deviations
from the Projections discussed below.
3. For purposes of this Certificate, I or officers of Holdings under my
direction and supervision, have performed the following procedures as of and for
the periods set forth below.
(a) I have reviewed the financial statements referred to in
Sections 4.15(a) and 6.05(a) of the Credit Agreement.
(b) I have reviewed the unaudited pro forma consolidated balance
sheet of the Holdings and its Subsidiaries referred to in
Sections 4.15(a) and 6.05(a) of the Credit Agreement.
(c) I have made inquiries of certain officers of the Holdings and
its Subsidiaries who have responsibility for financial and
accounting matters regarding (i) the existence and amount of
Contingent Liabilities associated with the business of
Holdings and its Subsidiaries and (ii) whether the unaudited
pro forma consolidated financial statements referred to in
paragraph (b) above are in conformity with GAAP applied on a
basis substantially consistent with that of the audited
financial statements as at December 31, 1998.
(d) I have knowledge of and have reviewed to my satisfaction the
Credit Documents and the other Documents, and the respective
Schedules and Exhibits thereto.
(e) With respect to Contingent Liabilities, I:
1. inquired of certain officials of Holdings and its Subsidiaries who have
responsibility for legal, financial and accounting matters as to the
existence and estimated liability with respect to all Contingent
Liabilities known to them;
2. confirmed with officers of Holdings and its Subsidiaries, that, to the best
of such officers' knowledge, (i) all appropriate items were included in
Stated Liabilities or the listing of Contingent Liabilities made known to
me in the course of my inquiry and that (ii) the amounts relating thereto
were the maximum estimated amount of liabilities reasonably likely to
result therefrom as of the date hereof; and
3. I hereby certify that, to the best of my knowledge, all material Contingent
Liabilities have been considered in making the certification set forth in
paragraph 4 below, and with respect to each such Contingent Liability the
estimated maximum amount of liability with respect thereto was used in
making such certification.
(f) I have examined the Projections relating to Holdings and its Subsidiaries
which have been previously delivered to the Banks, and have re-examined the
Projections on the date hereof and considered the effect thereon of any
changes since the date of the preparation thereof on the results projected
therein. After such review, I hereby certify that in my opinion the
Projections are reasonable and attainable (although actual results may
differ from the Projections and no representation is made that the
Projections will in fact be attained) and the Projections support the
conclusions contained in paragraph 4 below.
(g) I have made inquiries of certain officers of Holdings and its Subsidiaries
who have responsibility for financial reporting and accounting matters
regarding whether they were aware of any events or conditions that, as of
the date hereof, would cause each of (i) Holdings and its Subsidiaries
(taken as a whole) or (ii) the Borrower (on a stand alone basis), after
giving effect to the Transaction and the related financing transactions
(including the incurrence of the New Financing), to (i) have assets with a
Fair Value or Present Fair Salable Value that are less than the sum of
Stated Liabilities and Contingent Liabilities; (ii) have Unreasonably Small
Capital; or (iii) not be able to pay its Stated Liabilities and Contingent
Liabilities as they mature or otherwise become payable.
4. Based on and subject to the foregoing, I hereby certify on behalf of
Holdings that, after giving effect to the Transaction and the related financing
transactions (including the incurrence of the New Financing), it is my informed
opinion that (x) the Fair Value and Present Fair Salable Value of the assets of
each of (i) Holdings and its Subsidiaries (taken as a whole) or (ii) the
Borrower (on a stand alone basis), exceed their respective Stated Liabilities
and Contingent Liabilities; (y) each of (i) Holdings and its Subsidiaries (taken
as a whole) or (ii) the
Borrower (on a stand alone basis), does not have Unreasonably Small Capital; and
(z) each of (i) Holdings and its Subsidiaries (taken as a whole) or (ii) the
Borrower (on a stand alone basis) will be able to pay their respective Stated
Liabilities and Contingent Liabilities, as they mature or otherwise become
payable.
IN WITNESS WHEREOF, I have hereto set my hand this __ day of
December, 1999.
USOL HOLDINGS, INC.
By:___________________________
Name:
Title:
EXHIBIT K
BORROWING BASE CERTIFICATE AS OF [DATE]
To: The Banks party to the Credit Agreement, dated as of December 30, 1999,
among USOL Holdings, Inc. ("Holdings"), USOL, Inc. (the "Borrower"), the
financial institutions party thereto from time to time (the "Banks"),
Paribas, as Administrative Agent and Syndication Agent and Deutsche Bank
AG, New York Branch, as Documentation Agent (the "Credit Agreement")(1)
Amount in
U.S. Dollars
1. Cable Television Subscribers
$675 multiplied by the number of Cable
Television Subscribers
2. Telephony Subscribers $___________
$450 multiplied by the number of Telephony
Subscribers
3. Indebtedness Outstanding $___________
Less - Indebtedness outstanding (exclusive of Loans)
4. Total $__________
The undersigned hereby certifies that all of the information provided above
is true and correct as of the date first above written.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
_____ day of _____________.
USOL, INC.
By:_________________________
Name:
Title:
------------------------
1 All capitalized terms used herein shall have the meaning provided therefor in
such Credit Agreement.
EXHIBIT L
BANK ASSIGNMENT AND ASSUMPTION AGREEMENT
Date __________________
Reference is made to the Credit Agreement described in Item 2 of Annex I
hereto (as such Credit Agreement may hereafter be amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"). Unless defined in
Annex I hereto, terms defined in the Credit Agreement are used herein as
defined. _________________ (the "Assignor") and _______________ (the "Assignee")
hereby agree as follows:
1. The Assignor hereby sells and assigns to the Assignee without recourse
and without representation or warranty (other than as expressly provided
herein), and the Assignee hereby purchases and assumes from the Assignor, that
interest in and to all of the Assignor's rights and obligations under the Credit
Agreement as of the date hereof which represents the percentage interest
specified in Item 4 of Annex I hereto (the "Assigned Share") of all of the
outstanding rights and obligations under the Credit Agreement relating to the
facilities listed in Item 4 of Annex I hereto, including, without limitation,
(x) in the case of any assignment of all or any portion of the Loan Commitment,
all rights and obligations with respect to the Assigned Share of such Loan
Commitment and (y) in the case of any assignment of Loans not accompanied by an
assignment of a Loan Commitment (which may only occur when there is no Loan
Commitment), all rights and obligations with respect to the Assigned Share of
such Loans. After giving effect to such sale and assignment, the Assignee's Loan
Commitment and the amount of the outstanding Loans owing to the Assignee will be
as set forth in Item 4 Annex I hereto.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Agreement
or the other Credit Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement or the
other Credit Documents or any other instrument or document furnished pursuant
thereto; and (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or any of
its Subsidiaries or the performance or observance by the Credit Parties of any
of their obligations under the Credit Agreement or the other Credit Documents to
which they are a party or any other instrument or document furnished pursuant
thereto.
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement and the other Credit Documents, together with copies of the financial
statements referred to therein and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into this Assignment and Assumption Agreement; (ii) agrees that it will,
independently and without reliance upon the Administrative Agent, the Assignor
or any other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking
action under the Credit Agreement; (iii) confirms that it is an Eligible
Transferee under the Credit Agreement; (iv) appoints and authorizes the
Administrative Agent and the Collateral Agent to take such action as agent and
collateral agent on its behalf and to exercise such powers under the Credit
Agreement and the other Credit Documents as are delegated to the Administrative
Agent and reasonably the Collateral Agent by the terms thereof, together with
such powers as are incidental thereto; [and] (v) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Bank; [and (vi) to the
extent legally entitled to do so, attaches the forms described in Section
3.04(b)(ii) of the Credit Agreement.](1)
4. Following the execution of this Bank Assignment and Assumption Agreement
by the Assignor and the Assignee, an executed original hereof (together all
attachments) will be delivered to the Administrative Agent. The effective date
of this Bank Assignment and Assumption Agreement shall be the date of execution
hereof by the Assignor and the Assignee and the receipt of the consent of
Paribas pursuant to Section 13.04(b) of the Credit Agreement and receipt by the
Administrative Agent of the assignment fee referred to in such Section 13.04(b)
(the "Settlement Date").
5. Upon the delivery of a fully executed original hereof to the
Administrative Agent, as the Settlement Date, (i) the Assignee shall be a party
to the Credit Agreement and, to the extent provided in this Bank Assignment and
Assumption Agreement, have the rights and obligations of a Bank thereunder and
under the other Credit Documents and (ii) the Assignor shall, to the extent
provided in this Bank Assignment and Assumption Agreement, relinquish its rights
and be released from its obligations under the Credit Agreement and the other
Credit Documents.
6. It is agreed that the Assignee shall be entitled to (x) all interest on
the Assigned Share of the Loans at the rates specified in Item 6 of Annex I and
(y) all Commitment Commission (if applicable) on the Assigned Share of the
Unutilized Commitment at the rate specified in Item 7 of Annex I hereto; which,
in each case, accrue on and after the Settlement Date, such interest and, if
applicable, Commitment Commission, to be paid by the Administrative Agent
directly to the Assignee. It is further agreed that all payments of principal
made on the Assigned Share of the Loans which occur on and after the Settlement
Date will be paid directly by the Administrative Agent to the Assignee. Upon the
Settlement Date, the Assignee shall pay to the Assignor an amount specified by
the Assignor in writing which represents the Assigned Share of the principal
amount of the Loans made by the Assignor, net of any closing costs, and which
are being assigned hereunder. The Assignor and the Assignee shall make all
appropriate adjustments in payments under the Credit Agreement for periods prior
to the Settlement Date directly between themselves on the Settlement Date.
7. THIS BANK ASSIGNMENT AND ASSUMPTION AGREEMENT SEIALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Bank Assignment and Assumption
Agreement, as of the date first above written, such execution also being made on
Annex I hereto.
Accepted this __ day [NAME OF ASSIGNOR],
of ________ as Assignor
By ____________________________
Title:
[NAME OF ASSIGNEE],
as Assignee
By____________________________
Title:
Acknowledged and Agreed:
PARIBAS, as Administrative
and Syndication Agent
By_____________________
Title:
By_____________________
Title:
ANNEX I
ANNEX FOR BANK ASSIGNMENT AND ASSUMPTION AGREEMENT
1. Borrower: USOL, Inc.
2. Name and Date of Credit Agreement:
Credit Agreement, dated as of December 30, 1999, among USOL Holdings,
Inc. ("Holdings"), USOL, Inc. (the "Borrower"), the Banks from time to
time party thereto (the "Banks"), Paribas, as Administrative Agent (the
"Administrative Agent") and Syndication Agent and Deutsche Bank AG, New
York Branch, as Documentation Agent.
3. Date of Assignment Agreement:
4. Amounts (as of date of item #3 above):
Loan
Commitment
----------
Aggregate
Amount
for all
Banks $_________
Assigned
Share(2) _______%
Amount of
Assigned Share
$_________
5. Settlement Date:
6. Rate of Interest
to the Assignee: As set forth in Section 1.08 of the Credit Agreement
(unless otherwise agreed to by the Assignor and the
Assignee)(3)
7. Commitment Commission As set forth in Section 2.01(a) of the Credit
to the Assignee: Agreement (unless otherwise agreed to by the
Assignor and the Assignee)
8. Notice:
ASSIGNOR:
-----------------------
-----------------------
-----------------------
-----------------------
Attention:
Telephone:
Telecopier:
Reference:
ASSIGNEE:
-----------------------
-----------------------
-----------------------
-----------------------
Attention:
Telephone:
Telecopier:
Reference:
Payment Instructions:
ASSIGNOR:
-----------------------
-----------------------
-----------------------
-----------------------
Attention:
Reference:
ASSIGNEE:
-----------------------
-----------------------
-----------------------
-----------------------
Reference:
Accepted and Agreed:
[NAME OF ASSIGNEE] [NAME OF ASSIGNOR]
By_____________________ By_____________________
_______________________ _______________________
(Print Name and Title) (Print Name and Title)
___________________
1. If the Assignee is organized under the laws of a jurisdiction outside the
United States.
2 Percentage taken to 12 decimal places.
3 The Borrower and the Agent shall direct the entire amount of the interest
to the Assignee at the rate set forth in Section 1.08 of the Credit
Agreement, with the Assignor and Assignee effecting the agreed upon sharing
of the interest through payments by the Assignee to the Assignor.
