REVOLVING CREDIT LOAN AGREEMENT
DATED AS OF JUNE 15, 2005
BY AND AMONG
▇▇▇▇▇ INTERACTIVE CORPORATION
AND
▇▇▇▇▇▇▇ BANK, NATIONAL ASSOCIATION
SCHEDULES
1.01A Revolving Credit Note
4.01 Schedule of Foreign Qualifications
4.06 Other Agreements
4.07 Schedule of Litigation
4.10 Schedule of Subsidiaries
4.11 Schedule of Shareholders
4.15 Schedule of Debts of Borrower
4.17 Directors/Officers
6.01 Liens
6.02 Debt
6.05 Spinoffs
TABLE OF CONTENTS
ARTICLE I - DEFINITIONS AND ACCOUNTING TERMS...................................1
Section 1.01 Defined Terms.............................................1
Section 1.02 Accounting Terms..........................................5
Section 1.03 Section References........................................5
Section 1.04 Terms Generally...........................................5
ARTICLE II - AMOUNT AND TERMS OF THE LOANS.....................................6
Section 2.01 Revolving Credit Line Facility............................6
Section 2.02 Notice of Revolving Credit Loans..........................6
Section 2.03 Use of Proceeds of the Revolving Credit Loans.............7
Section 2.04 Notations.................................................7
Section 2.05 Reliance on Instructions..................................7
Section 2.06 Prepayments of the Loans..................................7
Section 2.07 Application of Prepayments................................7
Section 2.08 Computation of Interest...................................7
Section 2.09 Additional Costs, Etc.....................................8
Section 2.10 Commitment Fee............................................9
Section 2.11 Expenses..................................................9
ARTICLE III - CONDITIONS PRECEDENT.............................................9
Section 3.01 Condition Precedent to Initial Revolving Credit Loan......9
Section 3.02 Conditions Precedent to All Loans........................10
ARTICLE IV - REPRESENTATIONS AND WARRANTIES...................................10
Section 4.01 Incorporation, Good Standing, and Due Qualification......10
Section 4.02 Corporate Power and Authority............................10
Section 4.03 Legally Enforceable Agreement............................11
Section 4.04 Financial Statements.....................................11
Section 4.05 Labor Disputes and Acts of God...........................11
Section 4.06 Other Agreements.........................................11
Section 4.07 Litigation...............................................12
Section 4.08 No Defaults on Outstanding Judgments or Orders...........12
Section 4.09 Ownership and Liens......................................12
Section 4.10 No Subsidiaries..........................................12
Section 4.11 Ownership of Borrower's Stock; Outstanding Warrants or
Other Rights to Purchase Borrower's Stock.......12
Section 4.12 ERISA....................................................12
Section 4.13 Operation of Business....................................13
Section 4.14 Taxes....................................................13
Section 4.15 Debt.....................................................13
Section 4.16 Compliance with Laws.....................................13
Section 4.17 Management...............................................13
Section 4.18 No Brokers...............................................13
Section 4.19 All Consents Obtained....................................13
Section 4.20 Solvency of the Borrower.................................13
Section 4.21 Full Disclosure..........................................14
Section 4.22 No Default...............................................14
ARTICLE V - AFFIRMATIVE COVENANTS.............................................14
Section 5.01 Maintenance of Existence.................................14
Section 5.02 Maintenance of Records...................................14
Section 5.03 Maintenance of Properties................................14
Section 5.04 Conduct of Business......................................14
Section 5.05 Maintenance of Insurance.................................15
Section 5.06 Compliance With Laws.....................................15
Section 5.07 Right of Inspection......................................15
Section 5.08 Reporting Requirements...................................15
Section 5.09 Consolidated and Consolidating Financial Reports.........17
Section 5.10 General Certificate Requirements.........................17
Section 5.11 Bank Accounts............................................18
Section 5.12 Fiscal Year..............................................18
Section 5.13 Accountants..............................................18
Section 5.14 Operation of Business....................................18
Section 5.15 General Reporting Requirements...........................18
ARTICLE VI - NEGATIVE COVENANTS...............................................18
Section 6.01 Liens....................................................18
Section 6.02 Debt.....................................................19
Section 6.03 Mergers, Creation of Subsidiaries, Etc...................19
Section 6.04 Sale and Leaseback.......................................19
Section 6.05 Dividends; Distributions.................................19
Section 6.06 Sale of Assets...........................................20
Section 6.07 Investments..............................................20
Section 6.08 Guaranties, Etc..........................................20
Section 6.09 Transactions with Affiliate..............................20
Section 6.10 Change of Control or Management..........................21
Section 6.11 No New Business Ventures.................................21
Section 6.12 Issuance of Stock........................................21
Section 6.13 Acquisition of Assets....................................21
Section 6.14 ERISA....................................................21
ARTICLE VII - FINANCIAL COVENANTS.............................................21
Section 7.01 Total Leverage Ratio.....................................21
Section 7.02 Interest Coverage Ratio..................................21
Section 7.03 Minimum Consolidated Cash................................21
Section 7.04 Measurement..............................................22
ARTICLE VIII - ENVIRONMENTAL MATTERS..........................................22
Section 8.01 Definitions..............................................22
Section 8.02 Representations..........................................22
Section 8.03 Covenants................................................23
Section 8.04 Indemnity................................................23
Section 8.05 Survival.................................................23
ARTICLE IX - INTENTIONALLY OMITTED............................................23
ARTICLE X - EVENTS OF DEFAULT.................................................23
Section 10.01 Events of Default........................................23
Section 10.02 Remedies.................................................25
ARTICLE XI - MISCELLANEOUS....................................................26
Section 11.01 Amendments, Etc..........................................26
Section 11.02 Notices, Etc.............................................26
Section 11.03 No Waiver; Remedies Cumulative...........................27
Section 11.04 Successors and Assigns...................................27
Section 11.05 Costs, Expenses, and Taxes; Indemnification..............27
Section 11.06 Right of Set.............................................28
Section 11.07 Governing Law............................................28
Section 11.08 Severability of Provisions...............................28
Section 11.09 Headings.................................................28
Section 11.10. Maximum Rate.............................................28
Section 11.11 Method of Payment........................................29
Section 11.12 WAIVER OF NOTICE, HEARING AND BOND BEFORE
PREJUDGMENT REMEDY.....................................29
Section 11.13 OTHER WAIVERS............................................29
Section 11.14 WAIVERS BARGAINED FOR AND KNOWINGLY AND
VOLUNTARILY GIVEN......................................29
Section 11.15 Schedules................................................30
Section 11.16 Consent to Jurisdiction..................................30
REVOLVING CREDIT LOAN AGREEMENT
REVOLVING CREDIT LOAN AGREEMENT, dated as of June 15, 2005 between
▇▇▇▇▇ INTERACTIVE CORPORATION, a Delaware stock corporation having its principal
office at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("Borrower"), and
▇▇▇▇▇▇▇ BANK, NATIONAL ASSOCIATION, a national banking association having an
office at CityPlace II, 185 Asylum Street, Hartford, Connecticut 06103-3494 (the
"Bank").
RECITAL
The Borrower has requested that the Bank extend or maintain credit
to the Borrower in the form of loans by direct advances to the Borrower. The
Bank is prepared to extend or maintain credit as requested by the Borrower on
the terms set forth in this Agreement.
NOW, THEREFORE, THE BORROWER AND THE BANK HEREBY AGREE AS FOLLOWS:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01 DEFINED TERMS. As used in this Agreement, the following
terms have the following meanings (terms defined in the singular to have the
same meaning when used in the plural and vice versa):
"Affiliate" means any Person which directly or indirectly controls,
or is controlled by, or is under common control with Borrower. The term control
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, or by membership, or by contract, or otherwise.
"Agreement" means this Revolving Credit Loan Agreement, as amended,
supplemented, or modified from time to time.
"Bank's Designated Representative" shall mean ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇,
or such other Bank representative who shall be identified to the Borrower in
writing by the Bank as the Bank representative for the Borrower to contact with
respect to obtaining Loans.
"Base Rate" shall mean the higher of (i) the ▇▇▇▇▇▇▇ Bank Prime Rate
and (ii) the Federal Funds Rate plus half a percentage point (0.50%).
"Borrower's Designated Representative" means either ▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, or ▇▇▇▇ ▇. ▇▇▇▇, or such other Borrower's representative as
shall be identified to the Bank in writing by the Borrower as the person
authorized to contact the Bank to obtain Loans.
"Business Day" means any day other than a Saturday, Sunday, or other
day on which commercial banks in Hartford, Connecticut are authorized or
required to close under the laws of the State of Connecticut.
"Capital Lease" means all leases which have been or should be
capitalized on the books of the lessee in accordance with GAAP.
"Cash Equivalents" means (i) marketable direct obligations issued or
unconditionally guarantied by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one (1) year from the date of acquisition thereof;
(ii) commercial paper maturing no more than one (1) year from the date issued
and, at the time of acquisition, having a rating of at least A-1 from Standard &
Poor's Rating Service or at least P-1 from ▇▇▇▇▇'▇ Investors Service, Inc.;
(iii) certificates of deposit or bankers' acceptances maturing within one (1)
year from the date of issuance thereof issued by, or overnight reverse
repurchase agreements from, any commercial bank organized under the laws of the
United States of America or any state thereof or the District of Columbia having
combined capital and surplus of not less than $500,000,000; (iv) time deposits
maturing no more than ninety (90) days from the date of creation thereof with
commercial banks having membership in the Federal Deposit Insurance Corporation
in amounts at any one such institution not exceeding the lesser of $100,000 or
the maximum amount of insurance applicable to the aggregate amount of Borrower's
deposits at such institution and (v) money market accounts that invest in any of
the foregoing.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, and the regulations and published interpretations thereof.
"Current Maturities of Long Term Debt" means current maturities of
long term Debt (excluding Subordinated Debt) as determined in accordance with
GAAP.
"Default Rate" shall mean a rate of interest equal to the lesser of
(i) three and one-half percentage points (3.5%) higher than the Base Rate or
(ii) the maximum rate of interest then permitted by law.
"Demand Date" means the date on which payment is demanded under the
Revolving Credit Note pursuant to acceleration of the Obligations under Section
10.01.
"Dollars" and the sign "$" means lawful money in the United States
of America.
"EBITDA" means the sum of Operating Profit and depreciation and
amortization line items as determined in accordance with GAAP.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations and published interpretations
thereof.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) which together with the Borrower would be treated as a single
employer under Section 414(b), (c), (m) or (o) of the Code or under Section 4001
of ERISA.
-2-
"Event of Default" means any of the events specified in Section
10.01.
"Federal Funds Rate" means, for any day, the rate of interest per
annum (rounded upward, if necessary, to the nearest whole multiple of 1/100 of
1%) equal 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 by the Federal Reserve Bank of New York on the
Business Day next succeeding such day, provided that (i) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day and (ii) if no such rate is so
published on the next succeeding Business Day, the Federal Funds Rate for such
day shall be the average rate quoted to Bank on such day on such transactions as
reasonably determined by Bank. On the date hereof, the Federal Funds Rate is
three percent (3.00%) per annum. Any change in the interest rate under the
Revolving Credit Note resulting from a change in the Federal Funds Rate shall
become effective immediately upon the date on which such change in the Federal
Funds Rate shall be adopted by the Bank.
"GAAP" means generally accepted accounting principles in the United
States, as from time to time in effect, consistently applied.
"Governmental Authority" means the United States of America, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Head Office" means the principal office of the Bank at CityPlace
II, 185 Asylum Street, Hartford Connecticut 06103-3494, or such other address as
the Bank may from time to time designate in writing to the Borrower as the
Bank's Head Office.
"Indebtedness" means the sum of (a) obligations for borrowed money,
(b) obligations representing the deferred purchase price of property or services
other than accounts payable arising in connection with the purchase of goods or
services on terms customary in the trade, (c) obligations, whether or not
assumed, secured by liens or a pledge of or an encumbrance on the proceeds or
production from property now or hereafter owned or acquired, (d) obligations
which are evidenced by notes, acceptances or other instruments, and (e) leases
of real or personal property which are required to be capitalized under GAAP or
which are treated as operating leases under regulations applicable to them but
which otherwise would be required to be capitalized under GAAP.
"Interest Coverage" means EBITDA divided by interest expense, both
for the most recently completed four fiscal quarters.
"Investment" means any direct or indirect purchase or other
acquisition by Borrower of any beneficial interest in those investments
described in the definition of Cash Equivalents. The amount of any Investment
shall be the original cost of such Investment plus the cost of all additions
thereto, without any adjustments for increases or decreases in value, or
write-ups, write-downs or write-offs with respect to such Investment, other than
those required under GAAP.
-3-
"Lien" means any mortgage, deed of trust, pledge, security interest,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), or preference, priority, or other security agreement or preferential
arrangement, charge, or encumbrance of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of any financing statement under the Uniform
Commercial Code or comparable law of any jurisdiction to evidence any of the
foregoing).
"Line Facility" means the line of credit facility provided by the
Bank to the Borrower pursuant to Section 2.01.
"Loan" means any loan made by the Bank pursuant to this Agreement
and "Loans" means all loans made by the Bank pursuant to this Agreement.
"Loan Documents" means this Agreement, the Revolving Credit Note and
any other document evidencing the transactions contemplated thereunder.
"Loan Rate" means with respect to each day the rate per annum equal
to the applicable Base Rate plus one and one-half percentage points (1.5%). On
the date hereof the Loan Rate is seven and one-half percent (7.5%) per annum.
"Material Obligation" means any single obligation of the Borrower to
any Person in excess of Fifty Thousand Dollars ($50,000).
"Multiemployer Plan" means a Plan described in Section 4001(a)(3) of
ERISA relating to employees or former employees of the Borrower or any ERISA
Affiliate.
"Obligations" means all amounts owed by the Borrower and all other
obligations of the Borrower to the Bank pursuant to any one or more of the Loan
Documents.
"Operating Profit" means that formula historically used by Borrower
in its financial statements to determine its "Operating Profit".
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Person" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, governmental authority, or other similar entity of
whatever nature.
"Plan" means any "employee benefit plan" as defined in section 3(3)
of ERISA relating to employees or former employees of the Borrower or any
Subsidiary or ERISA Affiliate.
"Prime Rate" means the interest rate announced from day to day by
▇▇▇▇▇▇▇ Bank, National Association as its "Prime Rate." The Prime Rate is not
necessarily the lowest or most favorable lending rate that the Bank charges its
customers. On the date hereof, the Prime Rate is six percent (6%) per annum. Any
change in the interest rate under the Revolving Credit Note resulting from a
-4-
change in the Prime Rate shall become effective immediately upon the date on
which such change in the Prime Rate shall be adopted by the Bank.
"Prohibited Transaction" means any transaction set forth in Section
406 of ERISA or Section 4975 of the Code.
"Records" means all books, records of any kind or nature, customer
lists, ledger cards, computer programs, computer tapes, disks, printouts and
records, whether now in existence or hereafter created.
"Reportable Event" means any of the events set forth in Section 4043
of ERISA.
"Revolving Credit Commitment" means an amount equal to Ten Million
Dollars ($10,000,000.00).
"Revolving Credit Note" means the revolving credit note of the
Borrower referred to in Section 2.01, which shall be generally in the form and
have the terms set forth in Schedule 1.01A hereto.
"Revolving Credit Termination Date" means the earlier of (i) April
30, 2008, and (ii) Demand Date.
"Subsidiary" means a corporation a majority shares of stock of which
having ordinary voting power (other than stock having such power only by reason
of the happening of a contingency) to elect the board of directors or other
managers of such corporation are at the time owned by the Borrower.
"Total Leverage Ratio" means Indebtedness divided by EBITDA for the
most recently completed four fiscal quarters. EBITDA will be adjusted for
acquisitions and dispositions. For acquisitions, projected EBITDA for the full
year will be added to EBITDA at the first reporting period since the
acquisition. For subsequent reporting periods, actual EBITDA will be added to
the projected EBITDA and projected EBITDA will be subtracted for the same number
of quarters added (assume projected EBITDA divided by four). For dispositions,
the actual EBITDA for the disposed property will be subtracted from EBITDA.
Section 1.02 ACCOUNTING TERMS. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP consistently applied,
and all financial data submitted pursuant to this Agreement shall be prepared in
accordance with such principles.
Section 1.03 SECTION REFERENCES. Unless the context otherwise
requires references herein to a particular Section are references to Sections
hereof.
Section 1.04 TERMS GENERALLY. Singular terms should include the
plural and vice versa, and masculine, feminine and neutral terms shall be deemed
to include the others, unless the context otherwise requires.
-5-
ARTICLE II
AMOUNT AND TERMS OF THE LOANS
Section 2.01 REVOLVING CREDIT LINE FACILITY.
(a) Subject to the terms and conditions set forth in this Agreement
and so long as no Event of Default shall have occurred, upon notice by Borrower
pursuant to Section 2.02, the Bank may make loans to Borrower from time to time
during the period from the date of execution of this Agreement up to, but not
including, the Revolving Credit Termination Date, in a principal amount not
exceeding in the aggregate at any one time outstanding, the Revolving Credit
Commitment. All amounts borrowed under this Section 2.01 shall be payable on the
Revolving Credit Termination Date. Up to the amount of the Revolving Credit
Commitment, the Borrower may borrow, repay and reborrow at any time or from time
to time up to the day preceding the Revolving Credit Termination Date.
(b) Credit shall be extended under the Revolving Credit Commitment
by depositing the funds in the account of the Borrower designated pursuant to
Section 2.02 at the Bank. The aggregate principal amount of all Loans
outstanding shall under no circumstances be permitted to exceed the Revolving
Credit Commitment.
(c) The obligation of the Borrower to repay the Revolving Loans
shall be evidenced by that certain $10,000,000 Revolving Credit Note dated the
date hereof made payable by the Borrower to the order of the Bank (the
"Revolving Credit Note"). The outstanding principal balance of each Loan shall
bear interest at the Loan Rate from the date of advancement until the earlier of
(i) the Revolving Credit Termination Date, (ii) repayment in full or (iii) the
occurrence of an Event of Default, and thereafter at the Default Rate. Interest
shall be calculated on the basis of a year of 360 days and for the actual number
of days elapsed. Interest shall be due and payable by the Borrower to the Bank
quarterly in arrears on the first (1st) day of each January, April, July and
October of each year, commencing October 1, 2005 and continuing until the
Revolving Credit Termination Date and on the Revolving Credit Termination Date.
(d) Any fees and costs payable hereunder with respect to the
Revolving Credit Loans, principal amount and to the extent permitted by law,
interest amount not paid when due (whether a scheduled installment payment, at
maturity, by acceleration or otherwise) which remain unpaid beyond any
applicable grace period shall be subject to charges as provided in Section 2.11
hereof and shall bear interest from the date of such payment was due until such
amount is paid in full (as well after as before judgment) at the Default Rate,
payable on demand.
Section 2.02 NOTICE OF REVOLVING CREDIT LOANS. Whenever the Borrower
desires to obtain a Loan from the Bank pursuant to Section 2.01, the Borrower's
Designated Representative shall give to the Bank written notice (the "Notice of
Borrowing") specifying the amount of such Loan and the requested borrowing date
and a certificate of the Chief Financial Officer certifying that the Borrower is
in compliance with all terms of this Agreement, including the financial
covenants outlined in Article VII hereof, and that no Event of Default has
occurred and is continuing (a "Compliance Certificate"); upon receipt of the
foregoing, the Loan will be made available to the Borrower by the Bank's
crediting the account of the Borrower on the books of the Bank on (i) the same
-6-
Business Day that it receives the Notice of Borrowing if such Notice of
Borrowing is received prior to 11:00 a.m. Hartford, Connecticut local time on a
given Business Day; or (ii) the next Business Day following its receipt of the
Notice of Borrowing if such Notice of Borrowing is received on or after 11:00
a.m. Hartford, Connecticut local time on a given Business Day.
Section 2.03 USE OF PROCEEDS OF THE REVOLVING CREDIT LOANS. The
proceeds of advances under the Line Facility shall be used (i) to pay off
Borrower's outstanding obligations owed to First National Bank of Omaha and (ii)
for general corporate purposes. The Borrower will not, directly or indirectly,
use any part of the proceeds of the Line Facility for the purpose of purchasing
or carrying any margin stock within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System or to extend credit to any Person for
the purpose of purchasing or carrying any such margin stock.
Section 2.04 NOTATIONS. The Bank shall, and is hereby authorized by
the Borrower to, reflect on a schedule prepared by the Bank and made a part of
the Revolving Credit Note an appropriate notation evidencing the date and amount
of each Loan made by the Bank and the date and amount of each payment by the
Borrower with respect thereto, copies of such schedule shall be provided to the
Borrower on demand. Any such notation shall be prima facie evidence of the
Borrower's outstanding obligation to the Bank, absent manifest error. Failure to
reflect a notation on such schedule or computer records shall not affect the
amount of the Loans outstanding.
Section 2.05 RELIANCE ON INSTRUCTIONS. The Bank shall incur no
liability to the Borrower in acting upon any instructions which the recipient
thereof believes in good faith to have been given by one of the Borrower's
Designated Representatives.
Section 2.06 PREPAYMENTS OF THE LOANS. The Borrower may at any time
and from time to time, prepay the Loans then outstanding, in whole or in part,
without premium or penalty, upon at least one (1) Business Day's irrevocable
notice to the Bank's Designated Representative (which notice must be received by
1:00 P.M., Hartford, Connecticut time, on or before the proposed date of
prepayment), specifying the date of prepayment. If any such notice is given by
the Borrower, the Loans shall be due and payable on the date specified therein.
Section 2.07 APPLICATION OF PREPAYMENTS. Any prepayment made on the
Loans hereunder (i) shall be applied first to the payment of any taxes, late
charges, and amounts (other than principal and interest) otherwise due hereunder
and the under Loan Documents, second to accrued and unpaid interest hereunder
and third to the principal outstanding under the Loans. The acceptance of any
such prepayment when there is an Event of Default continuing hereunder or under
any of the Loan Documents shall not constitute a waiver, release or accord and
satisfaction thereof or of any rights with respect thereto by the Bank.
Section 2.08 COMPUTATION OF INTEREST. Interest on the Loans shall be
calculated on the basis of a 360-day year for the actual days elapsed. Any
change in the Loan Rate resulting from a change in the Base Rate shall become
effective as of the opening of business on the day on which such change becomes
effective. The Bank shall as soon as practicable notify the Borrower of the
effective date and the amount of each such change in interest rate. Each
determination of an interest rate by the Bank pursuant to any provision of this
-7-
Agreement shall be conclusive and binding on the Borrower in the absence of
manifest error.
Section 2.09 ADDITIONAL COSTS, ETC. If any present or future
applicable law, which expression, as used herein, includes statutes, rules and
regulations thereunder and interpretations thereof by any competent court or by
any governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notice at any time or from time to time hereafter made upon or
otherwise issued to the Bank by any central bank or other fiscal, monetary or
other authority (whether or not having the force of law), shall;
(a) subject the Bank to any tax, law, impost, duty, charge, fee,
deduction or withholding of any nature with respect to this Agreement, the other
Loan Documents or the Loans (other than taxes based upon or measured by the
income or profits of the Bank), or
(b) materially change the basis of taxation (except for changes in
tax on income or profits) of payments to the Bank of the principal of or the
interest on any Loans or any other amounts payable to the Bank under this
Agreement or any of the other Loan Documents, or
(c) impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Agreement) any special
deposit, reserve, assessment, liquidity, capital adequacy or other similar
requirements (whether or not having the force of law) against assets held by, or
deposits in or for the account of, or loans by, or letters of credit issued by,
or commitments of an office of the Bank, or
(d) impose on the Bank any other conditions or requirements with
respect to this Agreement, the other Loan Documents, the Loans, or any class of
loans or commitments of which any of the Loans forms a part, and the result of
any event described in clause (a), (b), (c) or (d) is
(i) to increase the cost to the Bank of making, funding,
issuing, renewing, extending or maintaining any of the Loans, or
(ii) to reduce the amount of principal, interest or
other amount payable to the Bank hereunder on account of any of the
Loans, or
(iii) to require the Bank to make any payment or to
forego any interest or other sum payable hereunder, the amount of which payment
or foregone interest or other sum is calculated by reference to the gross amount
of any sum receivable or deemed receivable by the Bank from the Borrower
hereunder, then, and in each such case, the Borrower will, upon demand made by
the Bank at any time and from time to time and as often as the occasion therefor
may arise, pay to the Bank such additional amounts as will be sufficient to
compensate the Bank for such additional cost, reduction, payment or foregoing
interest or other sum.
-8-
Section 2.10 COMMITMENT FEE. The Borrower shall pay to the Bank
quarterly on the first Business Day of each January, April, July and October
during the continuance of this Agreement, including any renewals hereof, a
commitment fee (the "Commitment Fee") in an amount equal to five-eighths of a
percent (5/8%) of the average amount available under the Revolving Credit
Commitment for the preceding quarter. The Commitment Fee shall be based on the
actual number of days elapsed on the basis of a 360-day year.
Section 2.11 EXPENSES. Borrower further promises to pay to the Bank,
as incurred, and as an additional part of the unpaid principal balance of the
Loans, all reasonable costs, expenses and reasonable attorneys' fees incurred
(i) in the preparation, protection, modification, collection, defense or
enforcement of all or part of the Loan Documents, or (ii) with respect to any
litigation or controversy arising from or connected with the Loan Documents, or
(iii) with respect to any act to protect, defend, modify, enforce or release any
of its rights or remedies with regard to, or otherwise effect collection of, any
collateral which may now or in the future secure the Revolving Credit Note or
with regard to or against Borrower or any endorser, guarantor or surety of the
Revolving Credit Note.
ARTICLE III
CONDITIONS PRECEDENT
Section 3.01 CONDITION PRECEDENT TO INITIAL REVOLVING CREDIT LOAN .
The obligation of the Bank to make the initial Loan to the Borrower is subject
to the condition precedent that the Bank shall have received on or before the
day of making such Loan, each of the following, in form and substance reasonably
satisfactory to the Bank and its counsel:
(a) REVOLVING CREDIT NOTE. The Revolving Credit Note duly completed
and executed by the Borrower;
(b) EVIDENCE OF ALL CORPORATE ACTION BY THE BORROWER. Certified (as
of the date of this Agreement) copies of all corporate action taken by Borrower,
including resolutions of the Board of Directors, authorizing the execution,
delivery, and performance of the Loan Documents and each other document to be
delivered by the Borrower under this Agreement;
(c) INCUMBENCY AND SIGNATURE CERTIFICATE OF THE BORROWER. A
certificate (dated as of the date of this Agreement) of the Secretary of
Borrower certifying the names and true signatures of the officers of Borrower
authorized to sign the Loan Documents and the other documents to be delivered by
Borrower under this Agreement;
(d) OPINION OF COUNSEL FOR THE BORROWER. A favorable opinion of
counsel for the Borrower covering such matters as the Bank reasonably may
request.
(e) FIRST NATIONAL BANK OF OMAHA. A payoff statement for and payment
of all obligations owing by Borrower to the First National Bank of Omaha.
-9-
(f) Such other documentation as shall reasonably be requested by the
Bank or its counsel.
Section 3.02 CONDITIONS PRECEDENT TO ALL LOANS. The obligation of
the Bank to make each Loan (including the initial Loan) shall be subject to the
further conditions precedent that on the date of each:
(a) WARRANTIES TRUE, NO DEFAULTS. The following statements shall be
true and the Bank shall have received a certificate signed by a duly authorized
officer of the Borrower dated the date thereof, stating that
(i) The representations and warranties contained in the
Agreement are true and correct on and as of the date of such
certificate as though made on and as of the date of such
certificate;
(ii) Those representations and warranties which by their
terms refer to a specific date continue to be true and correct on
and as of such date as though made on and as of the date of such
certificate; and
(iii) On and as of the date of such certificate, no Event of
Default has occurred and is continuing, or would result from the
making of such Loan.
(b) OTHER DOCUMENTS. The Bank shall have received such other
approvals, opinions, or documents as the Bank may reasonably request,
specifically including a Notice of Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to the Bank that as of the date
hereof and continuing for the term of this Agreement:
Section 4.01 INCORPORATION, GOOD STANDING, AND DUE QUALIFICATION.
Borrower is a corporation duly organized, legally existing and in good standing
under the laws of the State of Delaware. Borrower has the corporate power and
authority and all necessary licenses and permits to own its assets and to
transact the business in which it is now engaged or presently proposed to be
engaged; and is duly qualified as a foreign corporation and in good standing
under the laws of the jurisdictions listed in SCHEDULE 4.01 attached hereto, and
neither the character of the properties owned or leased by the Borrower nor the
activities carried on by the Borrower require that it be qualified or registered
as a foreign corporation in any other jurisdiction.
Section 4.02 CORPORATE POWER AND AUTHORITY. The execution, delivery,
and performance by the Borrower of the Loan Documents have been duly authorized
by all necessary corporate action and do not and will not (1) require any
consent or approval of the stockholders or members of the Borrower which has not
been obtained; (2) contravene the Borrower's Certificate of Incorporation or
Bylaws; (3) violate any provision of any law, rule, regulation (including,
without limitation, Regulation U of the Board of Governors of the Federal
-10-
Reserve System), order, writ, judgment, injunction, decree, determination, or
award presently in effect and having applicability to the Borrower; (4) result
in a breach of or constitute a default under any indenture or loan or credit
agreement or any other agreement, lease, or instrument to which the Borrower is
a party or by which it or its properties may be bound or affected; (5) result
in, or require, the creation or imposition of any Lien, upon or with respect to
any of the properties now owned or hereafter acquired by the Borrower except in
favor of the Bank; and (6) cause the Borrower to be in default under any such
law, rule, regulation, order, writ, judgment, injunction, decree, determination,
or award or any such indenture, agreement, lease, or instrument.
Section 4.03 LEGALLY ENFORCEABLE AGREEMENT. Assuming due execution
and delivery thereof by the Bank, this Agreement is, and each of the other Loan
Documents to which Borrower is a party when delivered under this Agreement will
be, legal, valid, and binding obligations of the Borrower enforceable against
that Borrower in accordance with their respective terms, except as enforcement
thereof may be decided by bankruptcy, insolvency and other similar laws
affecting creditors' rights generally and except for the discretionary authority
of any court in which enforcement proceedings may be brought to grant or
withhold equitable remedies.
Section 4.04 FINANCIAL STATEMENTS. The consolidated financial
statements of the Borrower as of March 31, 2005 for the quarter then ended,
copies of which have been furnished to the Bank (the "Financial Statements"),
are complete and correct and fairly present in all material respects the
financial condition of the Borrower as at such date and the results of the
operations of the Borrower for the periods covered by the Financial Statements,
all in accordance with GAAP consistently applied, and since March 31, 2005,
there has been no material adverse change in the financial condition, business,
or operations of the Borrower. There are no liabilities of the Borrower, fixed
or contingent, which are material but are not reflected in the Financial
Statements or in the notes thereto, other than liabilities arising in the
ordinary course of business since March 31, 2005 and normal year-end accruals
and adjustments. No information, exhibit or report furnished by the Borrower to
the Bank in connection with the negotiation of this Agreement contained any
material misstatement of fact or omitted to state a material fact or any fact
necessary to make the statement contained therein not materially misleading.
Section 4.05 LABOR DISPUTES AND ACTS OF GOD. Since March 31, 2005,
neither the business nor the properties of the Borrower has been materially
adversely affected by any fire, explosion, accident, strike, lockout or other
labor dispute, drought, storm, hail, earthquake, embargo, act of God or of the
public enemy, or other casualty not covered by insurance.
Section 4.06 OTHER AGREEMENTS. Except as heretofore disclosed to
Bank (as set forth on SCHEDULE 4.06), the Borrower is not a party to any
indenture, loan, or credit agreement, or to any lease or other agreement or
instrument, or subject to any charter or corporate restriction which have a
material adverse effect on the business, properties, assets, operations, or
conditions, financial or otherwise, of the Borrower, or the ability of the
Borrower to carry out its obligations under the Loan Documents to which it is a
party. The Borrower is not in default in any respect in the performance,
observance, or fulfillment of any of the obligations, covenants, or conditions
contained in any agreement or instrument material to its business to which it is
a party.
-11-
Section 4.07 LITIGATION. Except as listed on SCHEDULE 4.07, there is
no pending or threatened action or proceeding against or affecting the Borrower
before any court, governmental agency, or arbitrator.
Section 4.08 NO DEFAULTS ON OUTSTANDING JUDGMENTS OR ORDERS. The
Borrower has satisfied all judgments (if any) affecting it, and the Borrower is
not in default with respect to any judgment, writ, injunction, decree or order
of any court, arbitrator, or federal, state, municipal, or other governmental
authority, commission, board, bureau, agency, or instrumentality, domestic or
foreign, other than any thereof effectively stayed, and is in compliance in all
material respects with any and all rules or regulations of such tribunals.
Section 4.09 OWNERSHIP AND LIENS. The Borrower has title to, or
valid leasehold interests in, all of its properties and assets, with a fair
market value of in excess of $25,000 in the aggregate, real and personal,
including the properties and assets and leasehold interests reflected in the
financial statements referred to in Section 4.04 (other than any properties or
assets disposed of in the ordinary course of business since March 31, 2005), and
none of the properties and assets owned by the Borrower and none of the
Borrower's leasehold interests is subject to any Lien, except such as may be
permitted pursuant to Section 6.01 of this Agreement.
Section 4.10 NO SUBSIDIARIES. Except as listed on SCHEDULE 4.10,
Borrower has no Subsidiaries.
Section 4.11 OWNERSHIP OF BORROWER'S STOCK; OUTSTANDING WARRANTS OR
OTHER RIGHTS TO PURCHASE BORROWER'S STOCK. SCHEDULE 4.11 correctly sets forth as
of the date of this Agreement all of the classes of capital stock of Borrower,
the number of shares of each class of stock authorized, the record shareholders
of Borrower owning more than five percent (5%) of capital stock together with
the number of shares of such Borrower's capital stock owned by each such
shareholder, and the holders of any warrants or other rights to acquire capital
stock of such Borrower together with the number of shares of such Borrower's
capital stock they are entitled to acquire thereunder.
Section 4.12 ERISA. The Borrower is in compliance in all material
respects with all applicable provisions of ERISA. Neither a Reportable Event nor
a Prohibited Transaction has occurred and is continuing with respect to any
Plan; no notice of intent to terminate a Plan (other than with respect to a
standard termination pursuant to Section 4041(b) of ERISA) has been filed nor
has any Plan been terminated (other than with respect to a standard termination
pursuant to Section 4041(b) of ERISA); no circumstances exist which constitute
grounds entitling the PBGC to institute proceedings to terminate, or appoint a
trustee to administer, a Plan, nor has the PBGC instituted any such proceedings;
neither the Borrower nor any ERISA Affiliate has completely or partially
withdrawn from a Multiemployer Plan; the Borrower and each ERISA Affiliate have
met their minimum funding requirements under ERISA with respect to all of their
Plans and the present value of all vested benefits under each Plan does not
exceed the fair market value of all Plan assets allocable to such benefits, as
determined on the most recent valuation date of the Plan and in accordance with
the provisions of ERISA; and neither the Borrower nor any ERISA Affiliate has
incurred any liability to the PBGC under ERISA (other than premium payments,
which have been paid in the ordinary course).
-12-
Section 4.13 OPERATION OF BUSINESS. The Borrower possesses all
licenses, permits, franchises, patents, copyrights, trademarks, and trade names,
or rights thereto, to conduct its business substantially as now conducted and as
presently proposed to be conducted, the Borrower is not in violation of any
valid rights of others with respect to any of the foregoing, and the Borrower
conducts its business in compliance in all material respects with all such
licenses, permits and franchises.
Section 4.14 TAXES. The Borrower has filed all tax returns (federal,
state, and local) required to be filed and has paid all taxes, assessments, and
governmental charges and levies shown thereon to be due, including interest and
penalties. The tax returns filed are complete and accurate in all material
respects.
Section 4.15 DEBT. SCHEDULE 4.15 is a complete and correct list of
all Debts (except that undetermined unfunded vested benefits under any welfare
plans (as defined in ERISA) of the Borrower are not included), credit
agreements, indentures, purchase agreements, guaranties, Capital Leases, and
other agreements, and arrangements presently in effect providing for or relating
to extensions of credit (including agreements and arrangements for the issuance
of letters of credit or for acceptance financing) in respect of which the
Borrower is in any manner directly or contingently obligated; and the maximum
principal or face amount, of the credit in question, outstanding or to be
outstanding are correctly stated, and all Liens of any nature given or agreed to
be given as security therefore are correctly described or indicated on such
SCHEDULE 4.15.
Section 4.16 COMPLIANCE WITH LAWS. The Borrower is in compliance in
all material respects with all applicable provisions of any and all statutes,
orders and governmental rules and regulations.
Section 4.17 MANAGEMENT. SCHEDULE 4.17 correctly sets forth the
directors and principal officers of the Borrower as of the date hereof.
Section 4.18 NO BROKERS. The Borrower has no obligation to any
Person for any broker, finder or commission fee with respect to this Agreement.
Section 4.19 ALL CONSENTS OBTAINED. No consent or approval or other
authorization of, or exemption by, or declaration or filing with, any Person and
no waiver of any right by any Person is required to authorize or permit, or is
otherwise required in connection with the execution, delivery and performance of
this Agreement or any of the other Loan Documents.
Section 4.20 SOLVENCY OF THE BORROWER.
(a) The Borrower is financially solvent.
(b) After giving effect to the Loans to be made pursuant to this
Agreement, the Borrower will:
(i) be able to pay its debts as they become due;
-13-
(ii) have sufficient funds and capital to carry on its
business as now conducted or as contemplated to be conducted (in
accordance with the terms of the Loan Documents);
(iii) own property having a value both at fair valuation
and at present fair saleable value greater than the amount required
to pay its debts as they become due; and
(iv) not be rendered insolvent as determined by
applicable law.
Section 4.21 FULL DISCLOSURE. Neither this Agreement, nor any of the
other Loan Documents, nor any certificate, agreement, statement or other
document, including, without limitation, any financial statements concerning the
financial condition of the Borrower furnished to or to be furnished to the Bank
or its attorneys by the Borrower in connection with this Agreement, contains or
will contain any untrue statement of a material fact or, to the Borrower's
knowledge, omits or will omit to state a material fact necessary in order to
prevent all statements contained herein and therein from being misleading. There
is no fact to the knowledge of the Borrower which has not been disclosed herein
or in writing to the Bank that materially adversely affects, or in the future,
insofar as the Borrower can reasonably foresee, may materially adversely affect
the business, properties, assets or condition, financial or otherwise, of the
Borrower.
Section 4.22 NO DEFAULT. No event or state of facts which
constitutes, or which with notice or lapse of time, or both, could constitute,
an Event of Default hereunder or under any of the other Loan Documents has
occurred and is continuing.
ARTICLE V
AFFIRMATIVE COVENANTS
So long as any of the Obligations remain unpaid or the Revolving
Credit Commitment under this Agreement has not expired or been terminated,
Borrower will:
Section 5.01 MAINTENANCE OF EXISTENCE. Preserve and maintain its
corporate existence and good standing in the jurisdiction of its incorporation,
and qualify and remain qualified as a foreign corporation in each jurisdiction
in which such qualification is required for the operation of its business.
Section 5.02 MAINTENANCE OF RECORDS. Keep adequate records and books
of account, in which complete entries will be made in accordance with GAAP
consistently applied, reflecting all financial transactions of the Borrower.
Section 5.03 MAINTENANCE OF PROPERTIES. Maintain, keep, and preserve
all of its properties (tangible and intangible) necessary or useful in the
proper conduct of its business in good working order and condition, ordinary
wear and tear excepted.
Section 5.04 CONDUCT OF BUSINESS. Continue to conduct its business
in the media and telecommunications industry.
-14-
Section 5.05 MAINTENANCE OF INSURANCE.
(a) Keep its properties insured against fire and other hazards
(so-called "All Risk" coverage) in amounts and with companies reasonably
satisfactory to the Bank to the same extent and covering such risks as is
customary in the same or a similar business, but in no event in an amount less
than the Revolving Loan Commitment. Such All Risk property insurance coverage
shall provide for a minimum of thirty (30) days' written cancellation notice to
the Bank; and
(b) Maintain public liability coverage against claims for personal
injuries, death or property damage in an amount deemed reasonable by the Bank,
which policy shall name the Bank as an additional loss payee; and
(c) Maintain all worker's compensation, employment or similar
insurance as may be required by applicable law.
Section 5.06 COMPLIANCE WITH LAWS. Comply in all material respects
with all applicable laws, rules, regulations, and orders, including, without
limitation, ERISA and OSHA; such compliance to include, without limitation,
paying before the same become delinquent all taxes, assessments, and
governmental charges imposed upon it or upon its property; provided, however, so
long as no Event of Default has occurred hereunder or under any of the other
Loan Documents, the Borrower may contest by appropriate legal proceedings,
diligently conducted in good faith, the validity or applicability of any law,
the requirements of any governmental authority or the amount of any such taxes,
assessments and other governmental charges due provided (a) the Borrower gives
the Bank thirty (30) days' prior written notice, or such shorter time as is
reasonable under the circumstances, of its intent to contest thereunder, (b)
such contest will not expose the Bank to any civil or criminal liability for
failure to comply with such laws or the requirements of governmental
authorities, and (c) at the reasonable request of the Bank, the Borrower
furnishes the Bank security reasonably satisfactory to the Bank against loss,
injury or costs resulting from such contest, including losses, injuries and
costs resulting from delays in compliance with laws or requirements of
governmental authorities or in paying any such taxes, assessments and other
governmental charges.
Section 5.07 RIGHT OF INSPECTION. At any time during regular
business hours and from time to time, permit the Bank or any agent or
representative thereof to audit, examine and make copies of and abstracts from
the records and books of account of the Borrower, and to discuss the affairs,
finances, and accounts of the Borrower with any of its officers, directors and
independent accountants (an "Audit"). Such inspections by the Bank or its
representatives shall be preformed in such a manner as not to materially
interfere with the business of the Borrower. The Borrower shall reimburse the
Bank for the cost of each such audit at the rate of $600.00 per man day,
provided, however, that as long as no Event of Default shall have occurred, the
aggregate cost of such audits shall not exceed $10,000 per year.
Section 5.08 REPORTING REQUIREMENTS. Furnish to the Bank:
(a) QUARTERLY REPORTS AND FINANCIAL STATEMENTS. As soon as available
and in any event within fifty-five (55) days after the close of the first,
-15-
second and third fiscal quarters, (i) a balance sheet of the Borrower as of such
fiscal quarter; (ii) a statement of income and retained earnings of the Borrower
for such fiscal quarter and for such fiscal year to date; (iii) a statement of
cash flow of the Borrower for such fiscal quarter and for such fiscal year to
date; and (iv) any additional interim reports and statements as Borrower may
provide to its investors or regulators. Each of the foregoing shall be certified
by the Chief Financial Officer of the Borrower as being true and complete in all
material respects. All of the statements required pursuant to (i), (ii) and
(iii) above shall also state in comparative form the respective figures for the
corresponding date and period in the prior fiscal year and shall be prepared in
accordance with GAAP, consistently applied, subject to normal year-end
adjustments and accruals.
(b) ANNUAL REVIEW LEVEL FINANCIAL STATEMENTS; ACCOUNTANTS' REPORT.
As soon as available and in any event within one hundred (100) days after the
end of each fiscal year of the Borrower, a balance sheet of the Borrower as of
the end of such fiscal year and statements of income and retained earnings of
the Borrower for such fiscal year, and a statement of cash flow of the Borrower
for such fiscal year, all in reasonable detail and stating in comparative form
the respective figures for the prior fiscal year and all prepared in accordance
with GAAP consistently applied. The annual financial statements of the Borrower
required hereunder shall be reviewed and reported on by an independent certified
public accountant of recognized standing, selected by the Borrower and approved
by the Bank, which approval shall not be unreasonably withheld. Simultaneously
with the delivery of the annual financial statements referred to in this Section
5.08(b), an unqualified certificate of the independent certified public
accountants who reviewed such statements to the effect that, in making the
examination necessary for the review of such statements, they have obtained no
knowledge of any condition or event which constitutes an Event of Default, or if
such accountants shall have obtained knowledge of any such condition or event,
specifying in such certificate each such condition or event of which they have
knowledge and the nature and status thereof.
(c) ANNUAL BUDGET. Within thirty (30) days after the beginning of
each fiscal year, the annual budget for the Borrower's operations for the then
current fiscal year and, if reasonably requested by the Bank, for a longer
period, certified by the chief financial officer of the Borrower.
(d) MANAGEMENT LETTERS. Promptly upon receipt thereof, copies of any
reports submitted to any Borrower by independent certified public accounts in
connection with examination of the financial statements of any Borrower made by
such accountants.
(e) CERTIFICATE OF NO DEFAULT. Within fifty five (55) days after the
end of the first, second, and third fiscal quarters, and within one hundred
(100) days after the end of the Fiscal Year, a certificate of the Chief
Financial Officer of the Borrower (i) certifying that to the best of his or her
knowledge no Event of Default has occurred and is continuing or, if an Event of
Default has occurred which is continuing, a statement as to the nature thereof
and the action which is proposed to be taken with respect thereto, and (ii)
setting forth computations demonstrating compliance with the covenants contained
in Article VII.
(f) NOTICE OF LITIGATION. Promptly advise the Bank of the
commencement of litigation or a receipt of a threat of litigation, including
-16-
arbitration proceedings and any proceedings before any governmental agency,
which might have an adverse effect upon the condition (financial, operating or
otherwise) of the Borrower, or where the amount involved is $250,000 or more.
(g) NOTICE OF EVENTS OF DEFAULT. As soon as possible and in any
event within five (5) days after the Borrower obtains knowledge of the
occurrence of any Event of Default, a written notice setting forth the details
of such Event of Default and the action which is proposed to be taken by the
Borrower with respect thereto.
(h) ERISA REPORTS. Promptly after filing or receiving thereof,
copies of all reports, including annual reports, and notices which the Borrower
files with or receives from the PBGC, the Internal Revenue Service or the U.S.
Department of Labor under ERISA and the provisions of the Internal Revenue Code;
and as soon as possible and in any event within five (5) days after the Borrower
knows or has reason to know that any Reportable Event or Prohibited Transaction
has occurred with respect to any Plan or that the PBGC or the Borrower has
instituted or will institute proceedings under Title IV of ERISA to terminate
any Plan, the Borrower will deliver to the Bank a certificate of the President
or Chief Financial Officer of the Borrower setting forth details as to such
Reportable Event or Prohibited Transaction or Plan termination and the action
the Borrower proposes to take with respect thereto. Borrower shall identify,
explain and justify any unfunded pension obligations.
(i) REPORTS TO OTHER CREDITORS. Promptly after the furnishing
thereof, copies of any statement or report furnished to any other party pursuant
to the terms of any indenture, loan, or credit or similar agreement (other than
to suppliers in the ordinary course) and not otherwise required to be furnished
to the Bank pursuant to any other clause of this Section 5.08.
(j) PROXY STATEMENTS, ETC. Promptly after the sending or filing
thereof, copies of all proxy statements, financial statements, and public
reports which the Borrower sends to its stockholders, and copies of all regular,
periodic, and special reports, and all registration statements which the
Borrower files with the Securities and Exchange Commission or any governmental
authority which may be substituted therefor, or with any national securities
exchange.
(k) GENERAL INFORMATION. Such other information respecting the
condition or operations, financial or otherwise, of the Borrower as the Bank may
from time to time reasonably request.
Section 5.09 CONSOLIDATED AND CONSOLIDATING FINANCIAL REPORTS. All
financial reports for the Borrower shall be consolidated reports.
Section 5.10 GENERAL CERTIFICATE REQUIREMENTS. All certificates,
statements and calculations and supporting information to be provided under
Section 5.08 shall be in form and substance reasonably satisfactory to the Bank,
and shall be accompanied by a compliance certificate signed by the Borrower's
Chief Financial Officer and/or Treasurer, attesting that the Borrower has
complied with the terms and conditions of this Agreement.
-17-
Section 5.11 BANK ACCOUNTS. Maintain all of its bank accounts with
the Bank.
Section 5.12 FISCAL YEAR. Maintain as its fiscal year the period of
January 1 through December 31.
Section 5.13 ACCOUNTANTS. Retain independent certified public
accountants of recognized standing in the financial community who shall be
acceptable to the Bank, which acceptance will not be unreasonably withheld. The
Bank shall have the right to confer in the Bank's discretion with the Borrower's
independent accountants at any time upon any matter involving the Borrower's
financial condition, and such accountants as a condition of their retention by
the Borrower are hereby authorized to discuss fully and disclose all such
matters with and to the Bank.
Section 5.14 OPERATION OF BUSINESS. Maintain all licenses, permits,
franchises, patents, copyrights, trademarks and trade names, or rights thereto,
used in the conduct of its business substantially as now conducted.
Section 5.15 GENERAL REPORTING REQUIREMENTS.
(a) Notify the Bank of any event causing material loss or unusual
depreciation in any material asset and the amount of same; and
(b) Give prompt written notice to Bank (but in any event within
fifteen (15) days) of (i) any material dispute that may arise between the
borrower and any governmental regulatory body or law enforcement; (ii) any labor
controversy resulting or likely to result in a strike or work stoppage against
the Borrower; (iii) any proposal by any public authority to acquire any asset or
all or any portion of the business of the Borrower; (iv) any proposed or actual
change of the Borrower's name, trade names, identities or corporate structure;
(v) any change in its place or business or the location of assets from its
present place of business and/or locations; and (vi) any other matter which has
resulted or is reasonably likely to result in a material adverse change in the
Borrower's financial condition or operations.
ARTICLE VI
NEGATIVE COVENANTS
So long as any of the Obligations remain unpaid or the Revolving
Credit Commitment under this Agreement has not expired or been terminated, the
Borrower will not:
Section 6.01 LIENS. Create, incur, assume, or suffer to exist any
Lien upon or with respect to any of its properties or assets, including its
interests in Affiliates or Subsidiaries, now owned or hereafter acquired,
except:
(a) Liens in favor of the Bank;
(b) Liens disclosed on SCHEDULE 6.01 attached hereto;
-18-
(c) Liens for taxes or assessments or other government charges or
levies if not yet due and payable or, if due and payable, if they are being
contested as provided in Section 5.06 hereof;
(d) Liens imposed by law, such as mechanics', materialmen's,
landlords', warehousemen's, and carriers' Liens, and other similar Liens,
securing obligations incurred in the ordinary course of business which are not
past due for more than thirty (30) days provided, however, the Borrower shall
not be deemed to be in default hereunder with respect to any lien or claim of
lien for labor or materials which the Borrower shall be contesting by
appropriate legal proceedings diligently conducted in good faith;
(e) Liens under workmen's compensation, unemployment insurance,
social security, or similar legislation;
(f) Other liens or encumbrances (including, without limitation,
zoning requirements, set backs, and rights-of-way) not material in nature and
which do not materially interfere with the use of the property subject thereto;
and
(g) Extensions or renewals of any of the foregoing.
Section 6.02 DEBT. Create, incur, assume, or suffer to exist any
Debt, except:
(a) Debt of the Borrower to the Bank under this Agreement;
(b) Accounts payable to trade creditors for goods or services which
are not aged more than ninety (90) days from billing date and current operating
liabilities (other than for borrowed money) which are not more than ninety (90)
days past due, in each case incurred in the ordinary course of business and paid
within the specified time, unless contested in good faith and by appropriate
proceedings or where payment of such account payable is otherwise deferred in
the ordinary course of business; and
(c) Debt listed on SCHEDULE 6.02 hereof (or extensions or renewals
thereof).
Section 6.03 MERGERS, CREATION OF SUBSIDIARIES, ETC. (i) Sell,
assign, lease or otherwise dispose of (whether in one transaction or in a series
of transactions) all or any material assets of the Borrower (whether now or
hereafter acquired) to any Person; or (ii) unless Borrower is in compliance with
all financial covenants as detailed in Article VII hereof, merge or consolidate
with any Person, acquire all or substantially all of the assets or the business
of any Person, or form or organize a subsidiary corporation.
Section 6.04 SALE AND LEASEBACK. Sell, transfer, or otherwise
dispose of any real or personal property to any Person and thereafter directly
or indirectly lease back the same or similar property.
Section 6.05 DIVIDENDS; DISTRIBUTIONS. (i) Declare or pay any
dividends or distributions; (ii) unless Borrower is in compliance with all
financial covenants as detailed in Article VII hereof, purchase, redeem, retire,
or otherwise acquire for value any of its capital stock now or hereafter
outstanding, except that Borrower shall be permitted at all times to purchase
its own stock so long as such purchase from this date shall not involve the
-19-
purchase of more than 92,100 shares in the aggregate; (iii) make any other
distribution of assets to its stockholders, whether in cash, assets, or
obligations of the Borrower; or (iv) allocate or otherwise set apart any sum for
the payment of any dividend or distribution on, or for the purchase, redemption,
or retirement of, any shares of its capital stock, except as permitted by this
Section 6.05. The foregoing provision shall not preclude either (a) the
repurchase by the Borrower of shares of its common stock resulting from a
reverse stock split of such shares or (b) the spinoff by the Borrower of certain
non-core assets of the Borrower to the shareholders, as described in more detail
in SCHEDULE 6.05.
Section 6.06 SALE OF ASSETS. Sell, lease, assign, transfer, or
otherwise dispose of any of its now owned or hereafter acquired assets
(including, without limitation, receivables, and leasehold interests), except:
(i) inventory, disposed of in the ordinary course of business; (ii) the sale or
other disposition of assets which are (a) obsolete or worn out or (b) no longer
necessary to the Borrower's business, so long as in either case such assets are
replaced with a similar item or more technologically advanced item purchased by
the Borrower suitable to its business having a fair market value at least equal
to that of the assets being disposed; and (iii) the spinoff described in Section
6.05 and SCHEDULE 6.05 hereof.
Section 6.07 INVESTMENTS. Make any loan or advance to any Person,
including but not limited to officers, directors, members and shareholders of
Borrower or any Subsidiary, or purchase or otherwise acquire any capital stock,
assets, obligations, or other securities of, make any capital contributions to,
or otherwise invest in or acquire any interest in any Person, EXCEPT that
Borrower may make and own Investments in Cash Equivalents; PROVIDED that the
Borrower shall not incur any obligation to any Person which could subject such
Cash Equivalents (other than deposit accounts in which no more than $100,000 is
held overnight) to set-off rights.
Nothing contained in this Section 6.07 shall prohibit Borrower from purchasing
its own stock, so long as such purchase shall not exceed 92,100 shares in the
aggregate.
Section 6.08 GUARANTIES, ETC. Assume, guarantee, endorse, or
otherwise be or become directly or contingently responsible or liable
(including, but not limited to, an agreement to purchase any obligation, stock,
assets, goods, or services, or to supply or advance any funds, assets, goods, or
services, or to maintain or cause such Person to maintain a minimum working
capital or net worth, or otherwise to assure the creditors of any Person against
loss) for obligations of any Person, except guaranties by endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business and except for guaranties entered into in connection
with the acquisition of Cal-Ore Telecommunications Company.
Section 6.09 TRANSACTIONS WITH AFFILIATE. Enter into, or be a party
to, any transaction with any Subsidiary or Affiliate (including, without
limitation, transactions involving the purchase, sale or exchange of property or
the rendering of services) except in the ordinary course of business pursuant to
the reasonable requirements of the Borrower and upon fair and reasonable terms
no less favorable than Borrower would obtain in a comparable arm's-length
transaction with a Person other than a Subsidiary or an Affiliate.
-20-
Section 6.10 CHANGE OF CONTROL OR MANAGEMENT. (a) Permit any entity
and/or any of such entity's affiliates to acquire more than fifty percent (50%)
of the ownership of the capital stock of the Borrower; or (b) permit two out of
three of the Chief Financial Officer, Chief Executive Officer or General Counsel
of the Borrower to change from that reflected in SCHEDULE 4.17, unless such
change results in similarly qualified and experienced individuals occupying
those positions.
Section 6.11 NO NEW BUSINESS VENTURES. Undertake any business
ventures significantly different from those currently conducted by the Borrower,
or change its name, location or principal nature of business, except as required
for regulatory purposes (including in connection with acquisition of
subsidiaries not prohibited thereby).
Section 6.12 ISSUANCE OF STOCK. Unless Borrower is in compliance
with all financial covenants as detailed in Article VII hereof, issue any
capital stock or warrants or other rights to acquire any of its capital stock,
other than the issuance of stock pursuant to options, warrants or plans
currently outstanding.
Section 6.13 ACQUISITION OF ASSETS. Purchase any assets other than
in the ordinary course of the Borrower's business.
Section 6.14 ERISA. With respect to ERISA, engage in any "prohibited
transactions," or any "accumulated funding deficiency," terminate any pension
plan so as to create any lien on any asset of Borrower, or otherwise not be in
full compliance with all applicable requirements of ERISA.
ARTICLE VII
FINANCIAL COVENANTS
So long as any Obligations remain unpaid or the Revolving Credit
Commitment under this Agreement has not expired or been terminated:
Section 7.01 TOTAL LEVERAGE RATIO. The Borrower's Total Leverage
Ratio shall not exceed:
PERIOD RATIO
Date of Agreement - 12/31/05 5.25x
01/01/06 - 12/31/06 5.00x
01/01/07 - Revolving Credit Termination Date 4.75x
Section 7.02 INTEREST COVERAGE RATIO. The Borrower's Interest
Coverage Ratio shall exceed 2.5x at all times.
Section 7.03 MINIMUM CONSOLIDATED CASH. Borrower shall maintain a
minimum consolidated cash balance in its consolidated financial statements of at
least Ten Million Dollars ($10,000,000).
-21-
Section 7.04 MEASUREMENT. All financial covenants in this Article 7
shall be measured quarterly on a consolidated basis.
ARTICLE VIII
ENVIRONMENTAL MATTERS
Section 8.01 DEFINITIONS. The term "Polluting Substance" shall mean
any hazardous, ignitable, corrosive, caustic, reactive, toxic or polluting
material, waste or substance including (without limiting the generality of the
foregoing) any of the following: "hazardous waste or constituents" (as defined
in the regulations adopted under RCRA, defined below); "hazardous substance" (as
defined in CERCLA, as defined below); oil or petroleum products; "chemical
liquids or solid, liquid or gaseous products" (as those terms are used in the
Superlien Statute, defined below); asbestos; polychlorinated biphenyls;
formaldehyde compounds; explosives; and radioactive materials. The term
"Environmental Law" shall mean any statutory, regulatory, or decisional law
pertaining to protection of the environment or to any Polluting Substance,
including (without limiting the generality of the foregoing) the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended
("CERCLA"); the Resource Conservation and Recovery Act of 1976, as amended,
("RCRA"); and Title 22a "Environmental Protection" of the Connecticut General
Statutes, including particularly Sections 22a-448 through 22a-457 of the
Connecticut General Statutes (the "Superlien Statute"); as any of them may be
amended from time to time, with the regulations promulgated thereunder. The term
"release" as used herein shall include both the meaning specified in CERCLA and
a "spill" as defined in Section 22a-452c of the Connecticut General Statutes. In
the event any Environmental Law is amended to broaden the meaning of any term
defined thereby, such changed meaning shall apply subsequent to the effective
date of such amendment.
Section 8.02 REPRESENTATIONS. (a) The Borrower represents and
warrants that Borrower and those persons having a legal or beneficial interest
in any Borrower, with the exception of shareholders, and all Subsidiaries and
Affiliates: (i) have not been involved in operations at any of Borrower's, any
Subsidiary's or any Affiliate's properties involving any Polluting Substances in
violation of Environmental Laws; (ii) have not caused any release of a Polluting
Substance at or affecting any of Borrower's, any Subsidiary's or any Affiliate's
properties, or any contiguous land included in the property description of
Borrower's, any Subsidiary's or any Affiliate's properties; (iii) after due
inquiry, know of no Polluting Substance affecting any of Borrower's, any
Subsidiary's or any Affiliate's properties or any contiguous land included in
the property description of Borrower's, any Subsidiary's or any Affiliate's
properties or any other properties adjacent to Borrower's, any Subsidiary's or
any Affiliate's properties in violation of Environmental Law (iv) have not
permitted any tenant or occupant of Borrower's, any Subsidiary's or any
Affiliate's properties to engage in any activity involving any Polluting
Substance in violation of Environmental Law; (v) have not received any notice,
order, claim or demand from any governmental authority under any Environmental
Law; and (vi) the Borrower has disclosed to the Bank all information it has as
to whether Polluting Substances have been disposed of or otherwise released at
any of Borrower's, any Subsidiary's or any Affiliate's properties.
-22-
(b) The Borrower further represents and warrants to the Bank that:
(i) none of the Borrower's, any Subsidiary's or any Affiliate's properties nor
the Borrower, any Subsidiary or any Affiliate are in violation of, or subject
to, any existing, pending or threatened investigation or inquiry by any
governmental authority or any response costs or remedial obligations under any
Environmental Law and this representation and warranty would continue to be true
and correct following disclosure to the applicable governmental authorities of
all relevant facts, conditions and circumstances, if any, pertaining to any of
Borrower's, any Subsidiary's or any Affiliate's properties; and (ii) the
Borrower, any Subsidiary, or any Affiliate has not obtained, and is not required
to obtain, any permits, licenses or similar authorizations to construct, occupy,
operate or use any buildings, improvements, fixtures and equipment forming a
part of any of Borrower's, any Subsidiary's or any Affiliate's properties by
reason of any Environmental Law.
Section 8.03 COVENANTS. The Borrower covenants and agrees that, at
its sole cost and expense, it will comply in all material respects with the
requirements of all Environmental Laws applicable to Borrower and its
properties.
Section 8.04 INDEMNITY. Borrower covenants and agrees
unconditionally and absolutely to defend, indemnify and forever hold the Bank
harmless from and against all fines, charges, fees, response costs (including
clean-up, removal or mitigation), losses, liabilities, damages, diminutions in
value, costs and expenses, causes of actions, suits, claims, demands and
judgments of any nature suffered or incurred by the Bank and arising out of or
in connection with any environmental liabilities incurred by Borrower or
properties owned by Borrower.
Section 8.05 SURVIVAL. This indemnity shall survive the repayment of
the Obligations.
ARTICLE IX
INTENTIONALLY OMITTED
ARTICLE X
EVENTS OF DEFAULT
Section 10.01 EVENTS OF DEFAULT. Any or all of the Loans shall, at
the sole option of Bank, and notwithstanding any time or credit allowed by any
Loan Document, be immediately due and payable, without notice or demand, upon
the occurrence of any of the following events (each an "Event of Default";
collectively, "Events of Default"):
(a) Failure by the Borrower to make due payment of the principal of,
or interest on, the Revolving Credit Note, or failure by the Borrower in the
payment when due of any other Loan or in the payment when due of any other fee
or payment, whether direct or contingent (under guaranty agreements,
reimbursement agreements, interest rate protection agreements, account
agreements or otherwise) owing by the Borrower to the Bank, whether now existing
or hereinafter incurred whether direct or contingent or failure by the Borrower
to pay any other amount due to the Bank or any affiliate of the Bank;
-23-
(b) Any insurance coverage required to be maintained by the Borrower
pursuant to Section 5.05 of this Agreement is cancelled, lapses or is terminated
and is not replaced by coverage with all the requirements of this Agreement
within ten (10) days of such cancellation, lapse or termination;
(c) Any representation or warranty made by the Borrower in this
Agreement or in any other Loan Document or which is contained in any
certificate, document, opinion, or financial or other statement furnished at any
time under or in connection with any Loan Document shall prove to have been
incorrect in any material respect on or as of the date made or deemed made;
(d) Failure of Borrower to perform any covenant, act, duty or
obligation, as required by this Agreement, any related agreement or the
occurrence of any act restricted by this Agreement, any related agreement or any
other agreement between Borrower and the Bank or any affiliate of ▇▇▇▇▇▇▇
Financial Corporation;
(e) The Borrower shall fail to make any payment (whether of
principal, interest or otherwise and regardless of amount) in respect of any
Material Obligation when and as the same shall become due and payable;
(f) The Borrower (i) shall generally not, or shall be unable to, or
shall admit in writing its inability to, pay its debts as such debts become due;
or (ii) shall make an assignment for the benefit of creditors, petition or apply
to any tribunal for the appointment of a custodian, receiver, or trustee for it
or a substantial part of its assets; or (iii) shall commence any proceeding
under any bankruptcy, reorganization, arrangements, readjustment of debt,
dissolution, or liquidation law or statute of any jurisdiction, whether now or
hereafter in effect; or (iv) shall have any such petition or application filed
or any such proceeding commenced against it in which an order for relief is
entered or adjudication or appointment is made and which remains undismissed for
a period of sixty (60) days or more; or (v) by any act or omission shall
indicate its consent to, approval of, or acquiescence in any such petition,
application, or proceeding, or order for relief, or the appointment of a
custodian, receiver, or trustee for all or any substantial part of its
properties; or (vi) shall suffer any such custodianship, receivership, or
trusteeship to continue undischarged for a period of sixty (60) days or more;
(g) One or more judgments, decrees, or orders for the payment of
money in excess of One Hundred Thousand Dollars ($250,000.00) in the aggregate
shall be rendered against the Borrower, and such judgments, decrees, or orders
shall continue unsatisfied and in effect for a period of thirty (30) consecutive
days without being vacated, discharged, satisfied, or stayed or bonded pending
appeal;
(h) Any of the following events occur or exist with respect to the
Borrower or any ERISA Affiliate: (i) any Prohibited Transaction involving any
Plan other than a Multiemployer Plan; (ii) any Reportable Event with respect to
any Plan other than a Multi-employer Plan; (iii) the filing under Section
4041(c) of ERISA of a notice of intent to terminate any Plan; (iv) any event or
circumstance that might constitute grounds entitling the PBGC to institute
proceedings under Section 4042 of ERISA for the termination of, or for the
appointment of a trustee to administer, any Plan, or the institution by the PBGC
of any such proceedings; (v) failure to meet the minimum funding standards of
-24-
any Plan; (vi) failure of any qualified Plan to qualify under the Internal
Revenue Code or notification of intent to disqualify a Plan by the Internal
Revenue Service; (vii) complete or partial withdrawal under Sections 4201
through 4205 of ERISA from a Multiemployer Plan or the reorganization,
insolvency, or termination of any Multiemployer Plan; and subject in each case
above, to the condition that such event or condition, together with all other
events or conditions, if any, could in the opinion of the Bank subject the
Borrower to any tax, penalty, or other liability to a Plan, a Multiemployer
Plan, the PBGC, the Internal Revenue Service or otherwise (or any combination
thereof) which in the aggregate exceed or may exceed Fifty Thousand Dollars
($50,000);
(i) Change in the ownership of the capital stock of the Borrower or
change in the management of the Borrower in violation of Section 6.10 hereof;
(j) The Borrower shall fail to satisfy or observe any reporting
requirement contained in Section 5.08 or any covenant contained in Article VII
hereof;
(k) Any event or condition occurs that results in any Material
Obligation becoming due prior to its scheduled maturity or payment date, or that
enables or permits (with or without the giving of notice, the lapse of time or
both) the holder or holders of any Material Obligation or any trustee or agent
on its or their behalf to cause any Material Obligation to become due prior to
its scheduled maturity or payment date or to require the prepayment, repurchase,
redemption or defeasance thereof prior to their scheduled maturity or payment
date (in each case after giving effect to any applicable cure period), provided
that this clause (k) shall not apply to secured Indebtedness that becomes due
solely as a result of the voluntary sale or transfer of the property or assets
securing such Indebtedness;
(l) Substantial loss, theft, damage or destruction of any of the
assets of the Borrower not covered by insurance;
(m) Encumbrance of any of the assets of the Borrower other than as
permitted herein;
(n) The Borrower shall cease to continue to operate its business in
the ordinary course or shall dissolve or liquidate, or be dissolved or
liquidated, or cease to legally exist, or merger or consolidate, or be merged or
consolidated, with or into any other entity or corporation; or
(o) The Borrower shall lose or have revoked any material licenses
necessary for the conduct of its business.
Section 10.02 REMEDIES. If an Event of Default occurs:
(a) the Bank may (i) declare its obligations under Article II hereof
to be terminated, whereupon the same shall forthwith terminate, and (ii) declare
all Obligations to be forthwith due and payable, whereupon all Obligations shall
become and be forthwith due and payable, without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived by the
Borrower;
-25-
(b) the Bank may exercise any right, power or remedy permitted to it
by law, including without limitation the right to set-off the amounts due under
any Loan Document against any of the deposits, credits and property of the
Borrower in the possession or control of the Bank or in transit to it;
For the purposes of this Section 10.02, the Borrower hereby
irrevocably constitutes the Bank as its attorney-in-fact to issue in the name
and execute or endorse on behalf of the Borrower each and every notice,
instrument and document necessary to carry out the purposes of the provisions of
this Section 10.02. The power of attorney granted hereby shall be
self-executing, but the Borrower shall promptly execute and deliver to the Bank,
upon written request from the Bank, such further powers of attorney as the Bank
may from time to time reasonably request. The Bank will give the Borrower prompt
written notice (and a copy) of any action taken by the Bank pursuant to such
power of attorney.
ARTICLE XI
MISCELLANEOUS
Section 11.01 AMENDMENTS, ETC. No amendment, modification,
termination, or waiver of any provision of any Loan Document to which the
Borrower is a party, nor consent to any departure by the Borrower from any Loan
Document to which it is a party, shall in any event be effective unless the same
shall be in writing and signed by the Bank, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.
Section 11.02 NOTICES, ETC. Except as otherwise specifically
provided in Section 2.02 hereof with respect to Borrower's requests for Loans,
all notices and other communications provided for under this Agreement shall be
in writing and sent by Federal Express or other national overnight delivery
service or by certified mail, return receipt requested or personal delivery.
Notices shall be deemed given (i) upon receipt or refusal to accept if delivered
personally, (ii) the next day if Federal Express or other overnight delivery
service is used or (iii) if sent by certified or registered mail, three (3) days
after deposit in a United States Postal Office, postage prepaid, properly
addressed to the Borrower or to Bank at the addresses stated below, or to such
other addresses as Borrower or Bank may from time to time specify in writing
pursuant to this Section 11.02.
If to Borrower, to: ▇▇▇▇▇ Interactive Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Mr. ▇▇▇▇▇▇ ▇▇▇▇▇, CFO
with a copy to: ▇▇▇▇▇ Interactive Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇, Esq.
-26-
And if to the Bank, to: ▇▇▇▇▇▇▇ Bank, National Association
CityPlace II - Fifth Floor
185 Asylum Street
Hartford, Connecticut 06103-3494
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Vice President
with a copy to: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
CityPlace I - ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Asker ▇. ▇▇▇▇▇, Esq.
Notwithstanding anything contained herein to the contrary, notices to the Bank
pursuant to the provisions of Article II shall not be effective until received
by the Bank no matter what mode of delivery is used.
Section 11.03 NO WAIVER; REMEDIES CUMULATIVE. No failure on the part
of the Bank to exercise, and no delay in exercising, any right, power, or remedy
under any Loan Document shall operate as a waiver thereof; nor shall any single
or partial exercise of any right under any Loan Document preclude any other or
further exercise thereof or the exercise of any other right. The remedies
provided in the Loan Documents are cumulative and not exclusive of any remedies
provided by law.
Section 11.04 SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of the Borrower and the Bank and their
respective successors and assigns, except that the Borrower may not assign or
transfer any rights under any Loan Document.
Section 11.05 COSTS, EXPENSES, AND TAXES; INDEMNIFICATION. The
Borrower agrees to pay on demand all reasonable costs and expenses in connection
with the preparation, execution, delivery and enforcement of any of the Loan
Documents, including, without limitation, the reasonable fees and out-of-pocket
expenses of counsel for the Bank. The Borrower also agrees to pay all such costs
and expenses, including court costs, incurred in connection with the enforcement
of any of the Loan Documents or any amendment, modification or supplement
thereto, whether by negotiation, legal proceedings or otherwise. In addition,
the Borrower shall pay any and all stamp and other taxes and fees payable or
determined to be payable in connection with the execution, delivery, filing, and
recording of any of the Loan Documents and the other documents to be delivered
under any such Loan Documents, and agrees to save the Bank harmless from and
against any and all liabilities with respect to or resulting from any delay in
paying or omission to pay such taxes and fees. The Borrower also agrees to
indemnify and hold harmless the Bank and its affiliates and its respective
directors, officers, employees and agents (collectively, the "Indemnified
Parties") from and against any and all actions, suits, losses, claims and
liabilities to third parties unaffiliated with the Indemnified Parties of any
kind or nature, joint or several, to which such Indemnified Parties may become
subject, related to or arising out of any of the transactions contemplated
herein, including without limitation, the execution of the Loan Documents and
the closing of the Revolving Credit Commitment, and will reimburse the
Indemnified Parties for all out-of-pocket expenses (including attorneys' fees
and expenses) on demand as they are incurred in connection with the
investigation of, preparation for, or defense of any pending or threatened claim
-27-
or any action or proceeding arising therefrom; provided, that no Indemnified
Party shall have any right to indemnification for any of the foregoing to the
extent resulting from the gross negligence or willful misconduct of any
Indemnified Party.
Section 11.06. RIGHT OF SETOFF. The Borrower gives the Bank and the
Bank's participants in this Agreement, if any, a right of set-off as security
for all of the Borrower's Obligations hereunder and under all of the other Loan
Documents, whether now existing or hereafter arising, upon and against all the
deposits (general or special, time or demand, provisional or final), credits and
property of the Borrower and any other property of the Borrower, now or
hereafter in the possession or control of the Bank or the Bank's participants or
in transit to any of them. The Bank and its aforesaid participants may, at any
time after the occurrence of an Event of Default, setoff the same or any part
thereof and apply the same, or any part thereof (or in the case of a
participant, deliver the same or any part thereof to the Bank for application)
to any Obligations of the Borrower now or hereafter existing hereunder or under
any of the other Loan Documents irrespective of whether or not the Bank shall
have made any demand under the Loan Documents and although such obligations may
be unmatured. ANY AND ALL RIGHTS TO REQUIRE THE BANK TO EXERCISE ITS RIGHTS OR
REMEDIES WITH RESPECT TO THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF
SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF THE BORROWER
ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED BY THE BORROWER. The
Bank agrees promptly to notify the Borrower after any such setoff and
application by the Bank, provided that the failure to give such notice shall not
affect the validity of such setoff and application.
Section 11.07. GOVERNING LAW. The Loan Documents shall be governed
by, and construed in accordance with, the laws of the State of Connecticut.
Section 11.08. SEVERABILITY OF PROVISIONS. Any provision of any Loan
Document 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 of such Loan
Document or affecting the validity or enforceability of such provision in any
other jurisdiction.
Section 11.09. HEADINGS. Article and Section headings in the Loan
Documents are included in such Loan Documents for the convenience of reference
only and shall not constitute a part of the applicable Loan Documents for any
other purpose.
Section 11.10. MAXIMUM RATE. Nothing contained in any Loan Document
shall be deemed to establish or require the payment of interest at a rate in
excess of the maximum rate permitted by applicable law. In the event that the
rate of interest required to be paid under any Loan Document exceeds the maximum
rate permitted by applicable law, the rate of interest required to be paid
thereunder shall be automatically reduced to the maximum rate permitted by the
applicable law, and any payment of interest which is found to have exceeded the
maximum permissible rate shall, to the extent in excess of the maximum
permissible rate, be deemed to be payment against principal and shall be so
credited by the Bank.
-28-
Section 11.11. METHOD OF PAYMENT. The Borrower shall make each
payment under the Loan Documents not later than the Bank's close of business on
the date when due in lawful money of the United States to the Bank at the Head
Office in immediately available funds. Whenever any payment to be made under a
Loan Document shall be stated to be due on a date which is not a Business Day,
such payment shall be made on the next succeeding Business Day, and such
extension of time shall in such case be included in the computation of payment
of interest.
Section 11.12 WAIVER OF NOTICE, HEARING AND BOND BEFORE PREJUDGMENT
REMEDY. THE BORROWER ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS AGREEMENT
IS A PART IS A COMMERCIAL TRANSACTION AND NOT A CONSUMER TRANSACTION, AND WAIVES
ANY RIGHT TO (1) NOTICE AND PRIOR HEARING ON THE RIGHT OF THE BANK, OR ITS
SUCCESSORS OR ASSIGNS, TO OBTAIN A PREJUDGMENT REMEDY UNDER CHAPTER 903a OF THE
CONNECTICUT GENERAL STATUTES, REV. 1958, AS AMENDED, OR AS THE SAME MAY BE
AMENDED; (2) NOTICE AND PRIOR HEARING OR OTHER PROCESS ALLOWED UNDER ANY STATE
OR FEDERAL CONSTITUTION, STATUTE OR OTHER LAW, NOW OR HEREAFTER AFFECTING
PREJUDGMENT REMEDIES; AND (3) ANY REQUIREMENT THAT THE BANK POST A BOND IN ORDER
TO OBTAIN ANY PREJUDGMENT REMEDY.
Section 11.13 OTHER WAIVERS. THE BORROWER FURTHER WAIVES DILIGENCE,
DEMAND, PRESENTMENT FOR PAYMENT, NOTICE OF NONPAYMENT, PROTEST AND NOTICE OF
PROTEST, AND NOTICE OF ANY RENEWALS OR EXTENSIONS OF THIS AGREEMENT, THE
REVOLVING CREDIT NOTE OR ANY OTHER LOAN DOCUMENT; ALL RIGHTS TO THE BENEFITS OF
ANY MORATORIUM, APPRAISEMENT, EXEMPTION AND HOMESTEAD NOW PROVIDED OR WHICH MAY
HEREAFTER BE PROVIDED BY ANY FEDERAL OR STATE STATUTE, INCLUDING BUT NOT LIMITED
TO EXEMPTIONS PROVIDED BY OR ALLOWED UNDER THE BANKRUPTCY REFORM ACT OF 1978, AS
THE SAME MAY BE AMENDED, BOTH AS TO ITSELF PERSONALLY AND AS TO ALL OF ITS
PROPERTY, WHETHER REAL OR PERSONAL, AGAINST THE ENFORCEMENT AND COLLECTION OF
THE OBLIGATIONS EVIDENCED BY THIS AGREEMENT, THE REVOLVING CREDIT NOTE, ANY OF
THE OTHER LOAN DOCUMENTS AND ANY AND ALL EXTENSIONS, RENEWALS AND MODIFICATIONS
THEREOF; AND THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR
COUNTERCLAIM, WHETHER IN CONTRACT OR IN TORT, AT LAW OR IN EQUITY, ARISING OUT
OF OR IN ANY WAY RELATED TO THIS AGREEMENT, THE REVOLVING CREDIT NOTE OR ANY OF
THE OTHER LOAN DOCUMENTS.
Section 11.14 WAIVERS BARGAINED FOR AND KNOWINGLY AND VOLUNTARILY
GIVEN. THE BORROWER ACKNOWLEDGES AND AGREES THAT THE WAIVERS CONTAINED IN THIS
AGREEMENT AND IN ALL OF THE OTHER LOAN DOCUMENTS HAVE BEEN SPECIFICALLY
REQUESTED BY THE BANK AND HAVE BEEN GRANTED BY THE BORROWER TO INDUCE THE BANK
-29-
TO PROVIDE CREDIT TO THE BORROWER UNDER THE TERMS OF THIS AGREEMENT AND THAT
SUCH WAIVERS HAVE BEEN KNOWINGLY AND VOLUNTARILY GIVEN ONLY AFTER CONSIDERATION
OF THE RAMIFICATIONS OF SUCH WAIVERS WITH THE BORROWER'S ATTORNEY.
Section 11.15 SCHEDULES. All Schedules referred to herein are
intended to be and hereby are specifically made a part of this Agreement.
Section 11.16 CONSENT TO JURISDICTION. The Borrower and the Bank
hereby agree that any state court or local court of the State of Connecticut and
the United States District Court for the District of Connecticut shall have
jurisdiction to hear and determine any claims or disputes between the Borrower
and the Bank pertaining directly or indirectly to this Agreement, or to any of
the other Loan Documents or to any matter arising herefrom or therefrom. The
Borrower expressly submits and consents in advance to such jurisdiction in any
action or proceeding commenced in such courts, and hereby waives any objections
it may have as to venue of any such suit, action or proceedings brought in such
court or that such court is an inconvenient forum. The choice of forum set forth
in this Section shall not be deemed to preclude the enforcement of any judgment
obtained in such forum in any appropriate jurisdiction.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
▇▇▇▇▇▇▇ BANK, NATIONAL ▇▇▇▇▇ INTERACTIVE
ASSOCIATION CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------- ---------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President Title: Chief Financial Officer
Hereunto Duly Authorized 30 Hereunto Duly Authorized