1
Exhibit 10.60
SENIOR SECURED CREDIT AGREEMENT
dated as of
October 30, 1996
among
CITYSCAPE CORP.,
as Borrower,
THE GUARANTOR named herein,
THE LENDERS named herein,
and
CIBC WOOD GUNDY SECURITIES CORP., as Agent
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TABLE OF CONTENTS
Section Heading Page
------- ------- ----
RECITALS ..........................................................
SECTION 1 DEFINITIONS ..........................................
1.1 Certain Defined Terms ................................
1.2 Accounting Terms .....................................
1.3 Other Definitional Provisions ........................
SECTION 2 AMOUNT AND TERMS OF SENIOR LOAN
COMMITMENT AND SENIOR LOAN; NOTE .....................
2.1 Senior Loan and Note .................................
A. Senior Loan Commitment ...........................
B. Notice of Borrowing ..............................
C. Disbursement of Funds ............................
D. Notes ............................................
E. Maturity of Senior Loan ..........................
F. Termination of Senior Loan
Commitment ....................................
G. Pro Rata Borrowings ..............................
2.2 Interest on the Senior Loan ..........................
A. Rate of Interest .................................
B. Interest Payments ................................
C. Post-Maturity Interest ...........................
D. Computation of Interest ..........................
2.3 Fees .................................................
2.4 Prepayments and Payments .............................
A. Prepayments ......................................
B. Manner and Time of Payment .......................
C. Payments on Non-Business Days ....................
D. Notation of Payment ..............................
2.5 Use of Proceeds ......................................
A. Senior Loan ......................................
B. Margin Regulations ...............................
SECTION 3 CONDITIONS ...........................................
3.1 Conditions to Loan ...................................
SECTION 4 REPRESENTATIONS AND WARRANTIES .......................
4.1 Organization and Good Standing;
Capitalization .....................................
4.2 Authorization and Power ..............................
4.3 No Conflicts or Consents .............................
4.4 Enforceable Obligations ..............................
4.5 Properties; Liens ....................................
4.6 Financial Condition ..................................
4.7 Full Disclosure ......................................
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Section Heading Page
------- ------- ----
4.8 No Default ...........................................
4.9 Compliance with Contracts, Etc. ......................
4.10 No Litigation ........................................
4.11 Use of Proceeds; Margin Stock, Etc. ..................
4.12 Taxes ................................................
4.13 ERISA ................................................
4.14 Compliance with Law...................................
4.15 Government Regulation ................................
4.16 Intellectual Property ................................
4.17 Environmental Matters ................................
4.18 Survival of Representations and
Warranties .........................................
4.19 Permits ..............................................
4.20 Insurance ............................................
4.21 Security Interest ....................................
SECTION 5 AFFIRMATIVE COVENANTS ................................
5.1 Financial Statements and Other Reports................
5.2 Corporate Existence, Etc. ............................
5.3 Payment of Taxes and Claims; Tax
Consolidation ......................................
5.4 Maintenance of Properties; Insurance .................
5.5 Inspection ...........................................
5.6 Equal Security for Loans and Notes;
Pledge of Subsidiary Stock .........................
5.7 Compliance with Laws, Etc. ...........................
5.8 Maintenance of Accurate Records, Etc. ................
5.9 ERISA Compliance .....................................
5.10 Collateral Coverage ..................................
5.11 Intercompany Note ....................................
5.12 Payments in U.S. Legal Tender ........................
5.13 Register .............................................
5.14 City Shares ..........................................
SECTION 6 NEGATIVE COVENANTS ...................................
6.1 Indebtedness .........................................
6.2 Liens; Collateral Coverage ...........................
6.3 Restricted Payments ..................................
6.4 Investments ..........................................
6.5 Contingent Obligations ...............................
6.6 Restriction on Fundamental Changes ...................
6.7 Limitation on Dividend and Other
Payment Restrictions Affecting
Subsidiaries .......................................
6.8 Transactions with Shareholders and
Affiliates .........................................
6.9 Subsidiary Stock .....................................
6.10 Business Activities ..................................
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Section Heading Page
------- ------- ----
6.11 Amendments to Charter Documents ......................
6.12 Refinancing of the Senior Loan in Part ...............
6.13 Asset Sales ..........................................
6.14 Transfer of Assets to Subsidiaries ...................
6.15 No Further Negative Pledges ..........................
6.16 Security Interests ...................................
6.17 Impairment of Security Interest ......................
6.18 Additional Guarantees ................................
SECTION 7 EVENTS OF DEFAULT ....................................
7.1 Failure To Make Payments When Due ....................
7.2 Default in Other Agreements ..........................
7.3 Breach of Certain Covenants ..........................
7.4 Breach of Warranty ...................................
7.5 Other Defaults Under the Agreement or
Senior Loan Documents ..............................
7.6 Involuntary Bankruptcy; Appointment of
Custodian, Etc. ....................................
7.7 Voluntary Bankruptcy; Appointment of
Custodian, Etc. ....................................
7.8 Judgments and Attachments ............................
7.9 Dissolution ..........................................
7.10 Guarantee ............................................
7.11 Collateral Document Default ..........................
SECTION 8 THE AGENT ............................................
8.1 Appointment ..........................................
8.2 Delegation of Duties .................................
8.3 Exculpatory Provisions ...............................
8.4 Reliance by Agent ....................................
8.5 Notice of Default ....................................
8.6 Non-Reliance on Agent and Other Agents ...............
8.7 Indemnification ......................................
8.8 Agent in Its Individual Capacity .....................
8.9 Resignation and Removal of the Agent;
Successor Agent ....................................
SECTION 9 GUARANTEE ............................................
9.1 Unconditional Guarantee ..............................
9.2 Severability .........................................
9.3 Release of a Guarantor ...............................
9.4 Limitation of Guarantor's Liability ..................
9.5 Guarantors May Consolidate, Etc., on
Certain Terms ......................................
9.6 Contribution .........................................
9.7 Waiver of Subrogation ................................
9.8 Evidence of Guarantee ................................
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Section Heading Page
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9.9 Waiver of Stay, Extension or Usury
Laws ...............................................
SECTION 10 MISCELLANEOUS ........................................
10.1 Representation of the Lender .........................
10.2 Participations in and Assignments or
Syndication of Senior Loan and Note ................
10.3 Expenses .............................................
10.4 Indemnity ............................................
10.5 Setoff ...............................................
10.6 Amendments and Waivers ...............................
10.7 Independence of Covenants ............................
10.8 Entirety .............................................
10.9 Notices ..............................................
10.10 Survival of Warranties and Certain
Agreements .........................................
10.11 Failure or Indulgence Not Waiver;
Remedies Cumulative ................................
10.12 Severability .........................................
10.13 Headings .............................................
10.14 Applicable Law .......................................
10.15 Successors and Assigns; Subsequent
Holders of Notes ...................................
10.16 Counterparts; Effectiveness ..........................
10.17 Consent to Jurisdiction; Venue; Waiver
of Jury Trial ......................................
10.18 Payments Pro Rata ....................................
10.19 Taxes.................................................
10.20 Waiver of Stay, Extension or Usury
Laws ...............................................
10.21 Confidentiality ......................................
10.22 Judgment Currency ....................................
10.23 Role of Special Counsel ..............................
10.24 Expenses .............................................
SIGNATURE PAGES ...................................................
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SCHEDULES
A EXISTING LIENS
B SUBSIDIARIES
C ERISA
D EXISTING INVESTMENTS
E INTELLECTUAL PROPERTY
F ENVIRONMENTAL MATTERS
G PERMITS
H EXISTING INDEBTEDNESS
I PAYMENT RESTRICTIONS
EXHIBITS
I FORM OF SENIOR NOTE
II FORM OF COMPLIANCE CERTIFICATE
III FORM OF NOTICE OF BORROWING
IV FORM OF OPINION OF ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
- COUNSEL FOR THE BORROWER
V FORM OF OPINION OF ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
- SPECIAL COUNSEL FOR THE LENDERS
VI FORM OF NOTATION OF GUARANTEE
VII FORM OF PLEDGE AGREEMENT
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This Senior Secured Credit Agreement is dated as of October 30,
1996, and entered into by and among CITYSCAPE CORP., a New York corporation (the
"Company" or the "Borrower"), the Guarantor named on the signature pages hereto,
the Lenders named on the signature pages hereto (the "Lenders") and CIBC Wood
Gundy Securities Corp. ("CIBC"), as agent for the Lenders (in such capacity, the
"Agent").
RECITALS
WHEREAS, the Borrower desires that the Lenders extend a senior
secured credit facility to the Borrower in connection with the Transactions (as
defined herein);
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereby agree as follows:
SECTION 1 DEFINITIONS
1.1 Certain Defined Terms
The following terms used in this Agreement shall have the following
meanings:
"Additional Closing Date" means a Business Day after the Closing
Date and before October 30, 1997.
"Additional Senior Loans" shall have the meaning
provided in Section 2.1.
"Adjusted Net Assets" shall have the meaning provided
in Section 9.6.
"Affiliate," as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For the purposes of this definition, "control" (including with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means (i) the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise, or (ii) the ownership of more than 10% of the voting
securities of that Person; provided that neither
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CIBC nor any of its Affiliates shall be treated as an Affiliate of the Borrower
or of any Subsidiary of the Borrower.
"Agent" has the meaning ascribed to such term in the
introduction to this Agreement.
"Agreement" means this Senior Secured Credit Agreement, dated as of
October 30, 1996, as it may be amended, supplemented or otherwise modified from
time to time in accordance with the terms hereof.
"Amount of Unfunded Benefit Liability" means, with respect to any
Pension Plan, (i) if set forth on the most recent actuarial valuation report
with respect to such Pension Plan, the amount of unfunded benefit liabilities
(as defined in Section 4001(a)(18) of ERISA) and (ii) otherwise, the excess of
(a) the greater of the current liability (as defined in Section 412(l)(7) of the
Internal Revenue Code) or the actuarial present value of the accrued benefits
with respect to such Pension Plan over (b) the market value of the assets of
such Pension Plan.
"Asset Sale" means any direct or indirect sale, issuance,
conveyance, lease, assignment, transfer or other disposition for value
(including, without limitation, pursuant to any amalgamation, merger or
consolidation or pursuant to any sale-and-leaseback transaction) by the Borrower
or by any of its Subsidiaries to any Person other than the Borrower or any of
its Wholly-Owned Subsidiaries with an aggregate fair value in excess of
$2,000,000 (any such transaction, a "disposition") of (i) any of the stock of
any of the Borrower's Subsidiaries (other than director's qualifying shares),
(ii) substantially all of the assets of any division or line of business of a
Borrower or of any of its Subsidiaries, or (iii) any other assets (whether
tangible or intangible) of the Borrower or of any of its Subsidiaries outside of
the ordinary course of business; provided that dispositions in the ordinary
course of business shall include, without limitation, (A) any disposition of
Cash Equivalents or inventory in the ordinary course of business or obsolete
equipment in the ordinary course of business consistent with past practices of
the Borrower or any of its Subsidiaries or whole loan sales or the sale of real
property held for sale or the lease or sublease of any real or personal
property, in each case, in the ordinary course of business, (B) the sale of
consumer and commercial loans, leases and receivables by the Borrower or any of
its Subsidiaries in the ordinary course of its business as conducted on the date
of this
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Agreement (including, without limitation, by securitization or by any pledge of
such loans, leases or receivables as collateral under any Indebtedness permitted
to be secured thereby (other than the sale of the Collateral securing the
Borrower's Obligations hereunder)), (C) any disposition of stock or assets
(including, without limitation, any sale and leasehold transaction of equipment
of the Borrower or any Subsidiary) in any single transaction or related series
of transactions the aggregate value of which is equal to $1,000,000 or less, (D)
any disposition of the Capital Stock of City Auto Resources, Inc. or Phoebus
Software Limited held by the Borrower or its Subsidiaries, (E) the sale of any
property (whether real, personal or mixed) in connection with the incurrence of
a Capitalized Lease Obligation and (F) the sale of the 1996-3 Certificate.
"Bank of Boston Facility" means the Company's agreements with The
First National Bank of Boston (the "Bank of Boston") relating to borrowings by
the Company thereunder, in each case as in effect on the date hereof.
"Bankruptcy Law" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute or any
other United States federal, state or local law or the law of any other
jurisdiction relating to bankruptcy, insolvency, winding-up, liquidation,
reorganization or relief of debtors, whether in effect on the date hereof or
hereafter.
"Bankruptcy Order" means any court order made in a proceeding
pursuant to or within the meaning of any Bankruptcy Law, containing an
adjudication of bankruptcy or insolvency, or providing for liquidation,
winding-up, dissolution or reorganization, or appointing a custodian of a debtor
or of all or any substantial part of a debtor's property, or providing for the
staying, arrangement, adjustment or composition of indebtedness or other relief
of a debtor.
"Board of Directors" means, with respect to any Person, the Board of
Directors of such Person or any duly authorized committee of that Board.
"Borrower" has the meaning ascribed to such term in
the introduction to this Agreement.
"Business Day" means any day excluding Saturday, Sunday and any day
that is a legal holiday under the laws of New York, New York or is a day on
which banking institutions
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therein located are authorized or required by law or other governmental action
to close.
"Capital Lease," as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is required to be accounted for as a capital lease on the
balance sheet of that Person.
"Capitalized Lease Obligation" means obligations under a lease that
is required to be capitalized for financial reporting purposes in accordance
with GAAP, and the amount of Indebtedness represented by such obligations shall
be the capitalized amount of such obligations determined in accordance with
GAAP.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, including,
without limitation, each class of Common Stock and Preferred Stock of such
Person and (ii) with respect to any Person that is not a corporation, any and
all partnership or other equity interests of such Person.
"Cash Equivalents" means (i) marketable direct obligations issued or
unconditionally guaranteed 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 year from the date of acquisition thereof; (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof or by the governments of Britain, France, Germany, Japan
or Switzerland, in each case, maturing within one year from the date of
acquisition thereof and, at the time of acquisition, having the highest rating
obtainable from either Standard & Poor's Rating Group ("S&P") or ▇▇▇▇▇'▇
Investors Service, Inc. ("Moody's") or other nationally recognized rating
agency; (iii) commercial paper maturing no more than one year from the date of
creation thereof and, at the time of acquisition, having the highest rating
obtainable from either S&P's or Moody's or other nationally recognized rating
agency; and (iv) certificates of deposit or bankers' acceptances maturing within
one year from the date of acquisition thereof issued by any commercial bank
organized under the laws of the United States of America or any state thereof or
the District of Columbia that (a) is at least
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"adequately capitalized" (as defined in the regulations of its primary Federal
banking regulator) and (b) has Tier 1 capital (as defined in such regulations)
of not less than $100,000,000; (v) shares of any money market mutual fund that
(a) has its assets invested continuously in the types of investments referred to
in clauses (i), (ii) and (iii) above, (b) has net assets of not less than
$500,000,000, and (c) has the highest rating obtainable from either S&P's or
Moody's or other nationally recognized rating agency; and (vi) repurchase
agreements with respect to, and which are fully secured by a perfected security
interest in, obligations of a type described in clause (i) or clause (ii) above
and are with any commercial bank described in clause (iv) above.
"Cash Proceeds" means, with respect to any Asset Sale, cash payments
(including any cash received by way of deferred payment pursuant to, or
monetization of, a note receivable or otherwise but only as and when so
received, other than the portion of such deferred payment constituting interest,
which shall not be deemed to constitute Cash Proceeds) received from such Asset
Sale.
"Change of Control" means the occurrence of one or more of the
following events: (i) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially all of
the assets of the Company or Parent to any Person or group of related Persons
for purposes of Section 13(d) of the Exchange Act (a "Group"), together with any
Affiliates thereof; (ii) the approval by the holders of Capital Stock of the
Company or Parent of any plan or proposal for the liquidation or dissolution of
the Company or Parent; (iii) any Person or Group (other than the Permitted
Holders) shall become the owner, directly or indirectly, beneficially or of
record, of shares representing more than 35% of the Voting Stock of the Company
or Parent, unless at such time the Permitted Holders beneficially own, in the
aggregate, not less than a majority of such Voting Stock of the Company or
Parent, as the case may be; (iv) any Person or Group (other than the Permitted
Holders) shall become the owner, directly or indirectly, beneficially or of
record, of shares representing 50% or more of the Voting Stock of the Company or
Parent; or (v) the replacement of individuals constituting a majority of the
Board of Directors of the Company or Parent over a two-year period from the
directors who constituted the Board of Directors of the Company or Parent at the
beginning of such period, which replacements shall not have been approved by a
vote of at least a majority of the Board of Directors of the Company or
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Parent then still in office who either were members of such Board of Directors
at the beginning of such period or whose election as a member of such Board of
Directors was previously so approved.
"Change of Control Date" has the meaning ascribed to such term in
Section 2.4A(iv).
"Change of Control Offer" has the meaning ascribed to such term in
Section 2.4A(iv).
"City" means City Mortgage Corporation Limited, a company formed under
the laws of England and Wales, and a direct subsidiary of the Company.
"Closing Date" means October 30, 1996.
"Collateral" means all of the interest-only and residual certificates
of the Borrower, the Intercompany Note, 65% of the Capital Stock of City, the
outstanding shares of the Capital Stock of Cityscape Funding Corporation, a
Delaware corporation, and Cityscape Funding Corporation II, a Delaware
corporation, the Mortgage Servicing Receivables and the shares of all future
SPCs, in each case, as provided in the Pledge Agreement.
"Collateral Coverage Ratio" means, as of any date of determination, the
ratio of (a) the difference between the book value of the Collateral (other than
the Intercompany Note) and all collateral securing the Intercompany Note (the
"Intercompany Collateral") less the amount of any Indebtedness secured by a Lien
on such Collateral or Intercompany Collateral which Indebtedness ranks pari
passu or senior to the Lien granted to the Lenders in respect of the Collateral
or the Intercompany Note to (b) $100,000,000 (as reduced to give effect to any
permanent reduction of the Lenders' commitment hereunder).
"Commission" means the Securities and Exchange Commission.
"Commitment Fee" has the meaning ascribed to such term in Section 2.3.
"Common Stock" of any Person means any and all shares, interests or
other participations in, and other equivalents (however designated and whether
voting or non-voting) of,
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such Person's common stock, whether outstanding on the Closing Date or issued
after the Closing Date, and includes, without limitation, all series and classes
of such common stock.
"Company" has the meaning ascribed to such term in the introduction
to this Agreement.
"Compliance Certificate" means a certificate substantially in the
form of Exhibit II delivered to the Agent by the Borrowers pursuant to Section
5.1(iv)(b).
"Consolidated Net Worth" means, as of any date of determination, as
to any Person the total amount of (a) the sum of (i) the par or stated value of
all outstanding Capital Stock of such Person, plus (ii) paid-in capital or
capital surplus relating to such Capital Stock, plus (iii) any retained earnings
or capital surplus, plus (iv) the surplus from the write-up of assets acquired
after the Closing Date, plus (v) translation gains (or minus such amount if a
loss), plus (vi) unrealized gains on marketable securities, net of taxes (or
minus such amount if a loss), minus (b) to the extent not otherwise excluded,
(i) the cost of treasury stock, (ii) the surplus from write-up of assets after
June 30, 1996, other than with respect to assets acquired after the Closing
Date, and (iii) any accumulated deficit.
"Contested Claim" means any Tax, Indebtedness or other claim or
liability (i) the validity or amount of which is being diligently contested in
good faith, (ii) for which adequate reserve, or other appropriate provision, if
any, as required in conformity with GAAP shall have been made and (iii) with
respect to which any right to execute upon or sell any assets of the Borrower or
of any of its Subsidiaries has not matured or has been and continues to be
effectively enjoined, superseded or stayed.
"Contingent Obligation," as applied to any Person, means any direct
or indirect liability, contingent or otherwise, of that Person (i) with respect
to any Indebtedness, lease, dividend or other obligation of another if the
primary purpose or intent thereof by the Person incurring the Contingent
Obligation is to provide assurance to the obligee of such obligation of another
that such obligation of another will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation will be protected (in whole or in part) against loss in respect
thereof, (ii) with respect to any letter of credit issued for
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the account of that Person or as to which that Person is otherwise liable for
reimbursement of drawings, (iii) under Interest Rate Agreements and Currency
Agreements or (iv) under Yield Maintenance Agreements. Contingent Obligations
shall include, without limitation, (a) the direct or indirect guaranty,
endorsement (otherwise than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by such
Person of the obligation of another, (b) the obligation to make take-or-pay or
similar payments if required regardless of non-performance by any other party or
parties to an agreement, (c) any liability of such Person for the obligation of
another through any agreement (contingent or otherwise) (X) to purchase,
repurchase or otherwise acquire such obligation or any security therefor, or to
provide funds for the payment or discharge of such obligation (whether in the
form of loans, advances, stock purchases, capital contributions or otherwise) or
(Y) to maintain the solvency or any balance sheet item, level of income or
financial condition of another if, in the case of any agreement described under
subclauses (X) or (Y) of this sentence, the primary purpose or intent thereof is
as described in the preceding sentence and (d) with respect to the Company,
reserve obligations of the Company under the U.K. Greenwich Facility and the
U.S. Greenwich Facility to fund the repurchase of mortgage loans in the event of
a first payment default, but only to the extent such reserves exceed $500,000 in
the aggregate outstanding at any one time. The amount of any Contingent
Obligation shall be equal to the amount of the obligation so guaranteed or
otherwise supported or, if less, the amount to which such Contingent Obligation
is specifically limited.
"Contractual Obligation", as applied to any Person, means any
provision of any Security issued by that Person or of any indenture, mortgage,
deed of trust, contract, undertaking, agreement or other instrument to which
that Person is a party or by which it or any of its properties is bound or to
which it or any of its properties is subject.
"Controlled Group" means (i) a controlled group of corporations as
defined in Section 1563(a) of the Internal Revenue Code or (ii) a group of
trades or businesses under common control, as defined in Section 414(c) of the
Internal Revenue Code, of which the Company is a part or becomes a part.
"CoreStates Facility" means the Revolving Credit, Security, and Term
Loan Agreement dated as of June 30, 1995 among the Company, Parent, the lenders
named therein, and
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CoreStates Bank, N.A. ("CoreStates"), as agent, as the same may be amended or
Refinanced from time to time subject to the provisions of this Agreement.
"Covered Taxes" has the meaning ascribed to such term
in Section 10.19.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement or arrangement designed to protect the Borrower or any other
Loan Party against fluctuations in currency values.
"Custodian" means any receiver, interim receiver, receiver and
manager, trustee, assignee, liquidator, sequestrator or similar official charged
with maintaining possession or control over property for one or more creditors,
whether under any Bankruptcy Law or otherwise.
"Disqualified Capital Stock" means any Capital Stock that, by its
terms (or by the terms of any security into which it is convertible or for which
it is exchangeable), or upon the happening of any event (other than an event
which would constitute a Change of Control), (i) matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the sole option of the holder thereof (except upon the occurrence of a Change
of Control), in whole or in part, on or prior to the final maturity date of the
Notes, or (ii) is convertible into or exchangeable for (whether at the option of
the issuer or the holder thereof) (a) debt securities or (b) any Capital Stock
referred to in (i) above, in each case at any time prior to the final maturity
of the Notes; provided that only the portion of Capital Stock that so matures or
is mandatorily redeemable, is so convertible or exchangeable or is so redeemable
at the option of the holder thereof prior to such final maturity date shall be
deemed to be Disqualified Capital Stock.
"Dollars" or the sign "$" means the lawful money of the United
States of America.
"Eligible Assignee" means (A) (i) a commercial bank organized under
the laws of the United States of America or any state thereof; (ii) a savings
and loan association or savings bank organized under the laws of the United
States or any state thereof; (iii) a commercial bank organized under the laws of
any other country or a political subdivision thereof; provided
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that (x) such bank is acting through a branch or agency located in the United
States or (y) such bank is organized under the laws of a country that is a
member of the Organization for Economic Cooperation and Development or a
political subdivision of such country; and (iv) any other entity that is a
qualified institutional buyer (as defined in Rule 144A under the Securities Act)
or an institutional "accredited investor" (as defined in Regulation D under the
Securities Act) that extends credit or buys loans as one of its businesses
including, but not limited to, insurance companies, mutual funds and lease
financing companies, in each case (under clauses (i) through (iv) above) that is
reasonably acceptable to the Agent and having, in the case of clauses (i), (ii)
and (iii), capital and surplus in excess of $500,000,000; and (B) any Lender and
any Affiliate of any Lender.
"Employee Benefit Plan" means any "employee benefit plan" as defined
in Section 3(3) of ERISA (i) that is, or, at any time within the five calendar
years immediately preceding the date hereof, was at any time, maintained or
contributed to by any Loan Party or any of their respective ERISA Affiliates or
(ii) with respect to which a Borrower or its Subsidiaries retains any liability,
including any potential joint and several liability as a result of an
affiliation with an ERISA Affiliate or a party that would be an ERISA Affiliate
except for the fact the affiliation ceased more than five calendar years prior
to the date hereof.
"Environmental Claim" means any accusation, allegation, notice of
violation, claim, demand, abatement order or other order or direction
(conditional or otherwise) by any governmental authority or any Person for any
response or corrective action, any damage, including, without limitation,
personal injury (including sickness, disease or death), tangible or intangible
property damage, contribution, indemnity, indirect or consequential damages,
damage to the environment, nuisance, pollution, contamination or other adverse
effects on the environment, or for fines, penalties or restrictions, in each
case arising under any Environmental Law, including without limitation, relating
to, resulting from or in connection with Hazardous Materials and relating to any
Loan Party or any of their respective properties or predecessors in interest.
"Environmental Laws" means the common law and all statutes,
ordinances, orders, rules, regulations, plans, policies or decrees relating to
(i) environmental matters, including, without limitation, those relating to
fines, injunctions,
17
-11-
penalties, damages, contribution, cost recovery compensation, losses or injuries
resulting from the Release or threatened Release of Hazardous Materials, (ii)
the generation, use, storage, transportation or disposal of Hazardous Materials,
or (iii) occupational safety and health, industrial hygiene, land use or the
protection of human, plant or animal health or welfare, including, without
limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. { 9601 et seq.), the Hazardous Materials Transportation
Act (49 U.S.C. { 1801 et seq.), the Resource Conservation and Recovery Act (42
U.S.C. { 6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C. {
1251 et seq.), the Clean Air Act (42 U.S.C. { 7401 et seq.), the Toxic
Substances Control Act (15 U.S.C. { 2601 et seq.), the Federal Insecticide,
Fungicide and Rodenticide Act (7 U.S.C. { 136 et seq.), the Occupational Safety
and Health Act (29 U.S.C. { 651 et seq.) and the Emergency Planning and
Community Right-to-Know Act (42 U.S.C. { 11001 et seq.), each as amended or
supplemented, as in effect as of the date of determination.
"Environmental Lien" means a Lien in favor of a Tribunal or other
Person (i) for any liability under an Environmental Law or (ii) for damages
arising from or costs incurred by such Tribunal or other Person in response to a
release or threatened release of hazardous or toxic waste, substance or
constituent into the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any successor statute.
"ERISA Affiliate", as applied to any Person, means (i) any
corporation that is, or was at any time within the five calendar years
immediately preceding the date hereof, a member of a controlled group of
corporations within the meaning of Section 414(b) of the Internal Revenue Code
of which that Person is, or was at any time within the five calendar years
immediately preceding the date hereof, a member; (ii) any trade or business
(whether or not incorporated) that is, or was at any time within the five
calendar years immediately preceding the date hereof, a member of a group of
trades or businesses under common control within the meaning of Section 414(c)
of the Internal Revenue Code of which that Person is, or was at any time within
the five calendar years immediately preceding the date hereof, a member; and
(iii) any member of an affiliated service group within the meaning of Section
414(m) or (o) of the Internal Revenue Code of which that Person, any corporation
18
-12-
described in clause (i) above or any trade or business described in clause (ii)
above is, or was at any time within the five calendar years immediately
preceding the date hereof, a member.
"ERISA Event" means (i) a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to any
Pension Plan (excluding those for which the provision for 30-day notice to the
PBGC has been waived by regulation); (ii) the failure to meet the minimum
funding standard of Section 412 of the Internal Revenue Code with respect to any
Pension Plan (whether or not waived in accordance with Section 412(d) of the
Internal Revenue Code) or the failure to make by its due date a required
installment under Section 412(m) of the Internal Revenue Code with respect to
any Pension Plan or the failure to make any required contribution to a
Multiemployer Plan; (iii) the provision by the administrator of any Pension Plan
pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such
plan in a distress termination described in Section 4041(c) of ERISA; (iv) the
withdrawal by the Company or any of its respective ERISA Affiliates from any
Pension Plan with two or more contributing sponsors or the termination of any
such Pension Plan resulting in liability pursuant to Sections 4063 or 4064 of
ERISA; (v) the institution by the PBGC of proceedings to terminate any Pension
Plan, or the occurrence of any event or condition which might reasonably be
expected to constitute grounds under ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan; (vi) the imposition of
liability on a Borrower or any of its respective ERISA Affiliates pursuant to
Section 4062(e) or 4069 of ERISA or by reason of the application of Section
4212(c) of ERISA; (vii) the withdrawal by the Borrower or any of its respective
ERISA Affiliates in a complete or partial withdrawal (within the meaning of
Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if there is any
potential liability therefor, or the receipt by the Borrower or any of its
respective ERISA Affiliates of notice from any Multiemployer Plan that it is in
reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or that
it intends to terminate or has terminated under Section 4041A or 4042 of ERISA;
(viii) the imposition on the Borrower or any of its respective ERISA Affiliates
of fines, penalties, taxes or related charges under Chapter 43 of the Internal
Revenue Code or under Section 409 or 502(c), (i) or (l) or 4071 of ERISA in
respect of any Employee Benefit Plan; (ix) the assertion of a material claim
(other than routine claims for benefits) against any Employee Benefit Plan
19
-13-
other than a Multiemployer Plan or the assets thereof, or against the Borrower
or any of its respective ERISA Affiliates in connection with any such Employee
Benefit Plan; (x) receipt from the Internal Revenue Service of notice of the
failure of any Pension Plan (or any other Employee Benefit Plan intended to be
qualified under Section 401(a) of the Internal Revenue Code) to qualify under
Section 401(a) of the Internal Revenue Code, or the failure of any trust forming
part of any Pension Plan to qualify for exemption from taxation under Section
501(a) of the Internal Revenue Code; or (xi) the imposition of a Lien pursuant
to Section 401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to
ERISA with respect to any Pension Plan.
"Event of Default" means each of the events set forth in Section 7.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"Facilities" means any and all real property (including, without
limitation, all buildings, fixtures or other improvements located thereon) now,
hereafter or heretofore owned, leased, operated or used by the Borrower, its
Subsidiaries or any of their respective predecessors in interest.
"Funding Guarantor" shall have the meaning provided in Section 9.6.
"GAAP" means those generally accepted accounting principles and
practices that are recognized as such by the Financial Accounting Standards
Board and that are consistently applied for all periods after the date hereof so
as to properly reflect the financial conditions, and the results of operations
and changes in financial position, of the Company and its Subsidiaries, except
that any accounting principle or practice required to be changed in order to
continue as a generally accepted accounting principle or practice may be so
changed.
"Guarantee" means the guarantee delivered to the Lenders by the
Guarantor pursuant to Section 10 which is evidenced by notations of guarantee
substantially in the form of Exhibit VI hereto.
"Guarantor" means Parent.
20
-14-
"Hazardous Materials" means (i) any chemical, material or substance
at any time defined as or included in the definition of "hazardous substances,"
"hazardous wastes," "hazardous materials," "extremely hazardous waste,"
"restricted hazardous waste," "infectious waste," "toxic substances" or any
other formulations intended to define, list or classify substances by reason of
deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, toxicity, reproductive toxicity, "TCLP toxicity" or "EP
toxicity" or words of similar import under any applicable Environmental Laws or
publications promulgated pursuant thereto; (ii) any oil, petroleum, petroleum
fraction or petroleum derived substance; (iii) any drilling fluids, produced
waters and other wastes associated with the exploration, development or
production of crude oil, natural gas or geothermal resources; (iv) any flammable
substances or explosives; (v) any radioactive materials; (vi) asbestos in any
form; (vii) urea formaldehyde foam insulation; (viii) electrical equipment that
contains any oil or dielectric fluid containing levels of polychlorinated
biphenyls in excess of fifty parts per million; (ix) pesticides; and (x) any
other chemical, material or substance, exposure to which is prohibited, limited
or regulated by any governmental authority or which may or could pose a hazard
to human health or safety or the environment.
"Incur" means, with respect to any Indebtedness or other obligation
of any Person, to create, issue, incur (by conversion, exchange or otherwise),
assume, guarantee or otherwise become liable in respect of such Indebtedness or
other obligation or the recording, as required pursuant to GAAP or otherwise, of
any such Indebtedness or other obligation on the balance sheet of such Person
(and "Incurrence," "Incurred," "Incurrable" and "Incurring" shall have meanings
correlative to the foregoing); provided that any amendment, modification or
waiver of any document pursuant to which Indebtedness was previously Incurred
shall only be deemed to be an Incurrence of Indebtedness if and to the extent
such amendment, modification or waiver (i) increases the principal thereof or
interest rate or premium payable thereon or (ii) changes to an earlier date the
stated maturity thereof or the date of any scheduled or required principal
payment thereon or the time or circumstances under which such Indebtedness shall
be redeemed; provided, further, that any Indebtedness of a Person existing at
the time such Person becomes a Subsidiary of the Borrower (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be Incurred by such
Subsidiary at the time it becomes a Subsidiary of the Borrower.
21
-15-
"Indebtedness" means, with respect to any Person, without
duplication, (i) all indebtedness, obligations and liabilities of such Person
for borrowed money, (ii) that portion of obligations with respect to Capital
Leases that is properly classified as a liability on a balance sheet of such
Person in conformity with GAAP, (iii) notes payable and drafts accepted
representing extensions of credit of such Person, (iv) any indebtedness,
obligation or liability of such Person owed for all or any part of the deferred
purchase price of property or services (excluding any such obligations incurred
under ERISA), which purchase price is due more than six months (or a longer
period of up to one year, if such terms are available from suppliers in the
ordinary course of business) from the date of incurrence of the obligation in
respect thereof, (v) all indebtedness, obligations and liabilities secured by
any Lien on any property or asset owned or held by that Person regardless of
whether the indebtedness secured thereby shall have been assumed by that Person
or is nonrecourse to the credit of that Person except that "Indebtedness" shall
not include trade payables and accrued liabilities Incurred in the ordinary
course of business for the purchase of goods or services that are not secured by
a Lien other than a Permitted Encumbrance and obligations under Interest Rate
Agreements and Currency Agreements (which constitute Contingent Obligations, not
Indebtedness) and the amount of any such nonrecourse indebtedness, obligation or
liability that shall be "Indebtedness" shall be the lesser of the value of such
property or assets or the amount of such indebtedness, obligation or liability
so secured, (vi) guarantees of such Person in respect of Indebtedness of other
Persons, (vii) all Disqualified Capital Stock issued by such Person with the
amount of Indebtedness represented by such Disqualified Capital Stock being
equal to the greater of its voluntary or involuntary liquidation preference and
its maximum fixed repurchase price, but excluding accrued dividends, if any and
(viii) Obligations of a Person with respect to Yield Maintenance Agreements,
whether or not matured (the "Contingent Yield Maintenance Obligations"), which
at all times shall be deemed to be the lesser of 20% of the full amount of the
securitized Receivables relating to such Yield Maintenance Agreement and the
aggregate amount of payments owing thereunder; provided that with respect to the
1996-3 Certificate, the amount of Indebtedness shall at all times be deemed to
be $2,000,000 or, after an obligation to make payments on a Yield Maintenance
Agreement in respect thereof, the lesser of $2,000,000 or the aggregate amount
of payments owing thereunder. For purposes hereof, the "maximum fixed repurchase
price" of any Disqualified Capital Stock which does not have a
22
-16-
fixed repurchase price shall be calculated in accordance with the terms of such
Disqualified Capital Stock as if such Disqualified Capital Stock were purchased
on any date on which Indebtedness shall be required to be determined pursuant to
this Agreement, and if such price is based upon, or measured by, the fair market
value of such Disqualified Capital Stock, such fair market value to be
determined reasonably and in good faith by the board of directors of the issuer
of such Disqualified Capital Stock. Notwithstanding the foregoing, any
securities issued in a securitization by a special purpose owner trust or
similar entity formed by or on behalf of a Person and to which Receivables have
been sold or otherwise transferred by or on behalf of such Person or its
Subsidiaries shall not be treated as Indebtedness of such Person or its
Subsidiaries.
"Indemnified Liabilities" has the meaning ascribed to such term in
Section 10.4.
"Indemnitees" has the meaning ascribed to such term in Section 10.4.
"Independent Financial Advisor" means a firm (i) that does not, and
whose directors, officers and employees or Affiliates do not, have a direct or
indirect financial interest in the Borrower or the Guarantor and (ii) that, in
the judgment of the Board of Directors of the Company, is otherwise independent
and qualified to perform the task for which it is to be engaged.
"Initial Senior Loan" has the meaning ascribed to such term in
Section 2.1.
"Intellectual Property" means all patents, trademarks, tradenames,
copyrights, technology, know-how and processes used in or necessary for the
conduct of the business of a Borrower and its Subsidiaries as currently
conducted or as proposed to be conducted that are material to the condition
(financial or otherwise), business, operations or prospects of a Borrower and
its Subsidiaries, taken as a whole.
"Intercompany Indebtedness" means any Indebtedness of the Borrower
or any Subsidiary of the Borrower that, in the case of the Borrower, is owing to
any Wholly-Owned Subsidiary of the Borrower and that, in the case of any such
Subsidiary, is owing to the Borrower or any Wholly-Owned Subsidiary of the
Borrower; provided that if as of any date any Person other than the Borrower or
a Wholly-Owned Subsidiary of the Borrower owns
23
-17-
or holds such Indebtedness, or holds any Lien in respect thereof, such
Indebtedness shall no longer be Intercompany Indebtedness permitted to be
Incurred pursuant to Section 6.1(iv).
"Intercompany Note" means the Indebtedness of City to the Company
evidenced by the note issued on October 30, 1996.
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement designed to protect the Borrower or any of its
Subsidiaries against fluctuations in interest rates.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and any successor code or statute.
"Investment" means (i) any direct or indirect purchase or other
acquisition of, or of a beneficial interest in, any Securities of any other
Person or (ii) any direct or indirect loan, advance (other than advances to
employees for moving, entertainment and travel expenses, drawing accounts and
similar expenditures in the ordinary course of business), extension of credit or
capital contribution to any other Person, including all indebtedness and
accounts receivable from that other Person that are not current assets or did
not arise from sales to that other Person in the ordinary course of business.
The amount of any Investment shall be the original cost of such Investment plus
the cost of all additions thereto less the amount of all dividends and other
payments received with respect thereto without any adjustments for increases or
decreases in value, or write-ups, write-downs or write-offs with respect to such
Investment.
"Joint Venture" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form; provided
that, as to any such arrangement in corporate form, such corporation shall not,
as to any Person of which such corporation is a Subsidiary, be considered to be
a Joint Venture to which such Person is a party.
"Laws" means all applicable statutes, laws, ordinances, regulations,
rules, orders, judgments, writs, injunctions or decrees of any state,
commonwealth, nation, territory, possession, province, county, parish, town,
township, village,
24
-18-
municipality or Tribunal, and "Law" means each of the foregoing.
"Lenders" has the meaning ascribed to that term in the introduction
to this Agreement and shall include any assignee of the Senior Loan, any Note or
the Senior Loan Commitment to the extent of such assignment.
"Lien" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.
"Litigation" means any action, suit, proceeding, claim, lawsuit
and/or investigation conducted or threatened by or before any Tribunal.
"Loan Parties" means, collectively, the Borrower and the Guarantor.
"Margin Stock" has the meaning assigned to that term in Regulation U
and Regulation G of the Board of Governors of the Federal Reserve System as in
effect from time to time.
"Material Adverse Change" means a material adverse change in the
business, operations, properties, assets or condition (financial or otherwise)
of the Borrowers and their Subsidiaries, taken as a whole.
"Material Adverse Effect" means (i) a material adverse effect upon
the business, operations, properties, assets or condition (financial or
otherwise) of the Borrower and its Subsidiaries, taken as a whole, or (ii) the
impairment of the ability of the Borrower and its Subsidiaries, taken as a
whole, to perform, or the impairment of the ability of the Agent or any Lender
to enforce, the Obligations.
"Material Subsidiary" means, with respect to any accounting period,
any Subsidiary of the Borrower (i) whose revenues constitute greater than 10% of
the aggregate dollar value of the revenues of the Borrower and its Subsidiaries,
taken as a whole, for such accounting period or (ii) the fair market value of
whose assets at any time during such accounting
25
-19-
period is greater than 10% of the fair market value of all of the assets of
Borrower and its Subsidiaries at such time.
"Maximum Interest Rate" means an interest rate of 15% per annum;
provided that in computing such interest rate, fees paid to the Lenders shall
not be deemed an interest payment.
"Mortgage Servicing Receivables" means the gain realized by the
Borrower on the sale of a mortgage loan due to the excess servicing spread
associated with such loan as recorded at the time of sale.
"Multiemployer Plan" means a Pension Plan that is a "multiemployer
plan" as defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds" means, (i) with respect to any Asset Sale, Cash
Proceeds of such Asset Sale net of bona fide direct costs of such sale
including, but not limited to, (A) income, transfer or other taxes reasonably
estimated to be actually payable as a result of such Asset Sale within two years
of the date of such Asset Sale and (B) payment of the outstanding principal
amount of, premium or penalty, if any, and interest on, any Indebtedness or
contractual obligation that is secured by a Lien on the stock or assets in
question and that is required to be repaid under the terms thereof as a result
of such Asset Sale and (ii) with respect to any sale of Capital Stock or
Indebtedness of any Person, the aggregate net cash proceeds received, after
payment of expenses, commissions and the like Incurred in connection therewith.
"Net Indebtedness" means, on a consolidated basis, the total
Indebtedness of the Company less Indebtedness under or in respect of the
CoreStates Facility and less any amounts included in clause (ii) of the
definition of Performance Assurance Amount.
"Net Leverage Ratio" means, on a consolidated basis determined in
accordance with GAAP, the ratio of the Company's Net Indebtedness to its
Consolidated Net Worth.
"New Bank of Boston Revolver" means the proposed agreement between
Borrower or Parent with the Bank of Boston which provides for unsecured
revolving credit borrowings.
"1996-3 Certificate" means the Cityscape Home Equity Loan Trust
1996-3, Interest-Only Certificate, Series 1996-3.
26
-20-
"Notes" has the meaning ascribed to such term in Section 2.1D.
"Notice of Borrowing" means a notice substantially in the form of
Exhibit III with respect to a proposed borrowing.
"Obligations" means all obligations of every nature of the Borrower
and the Guarantor from time to time owed to the Lenders under the Senior Loan
Documents, whether for principal, reimbursements, interest, fees, expenses,
indemnities or otherwise, and whether primary, secondary, direct, indirect,
contingent, fixed or otherwise (including obligations of performance).
"Offer Payment Date" has the meaning ascribed to such term in
Section 2.4A(iv).
"Officer" means the Chairman of the Board, the President, any Vice
President, the Chief Financial Officer, the Controller, the Treasurer or the
Secretary of the Borrower.
"Officers' Certificate" means, as applied to any Person, a
certificate executed on behalf of such corporation by two Officers; provided
that every Officers' Certificate with respect to the compliance with a condition
precedent to the making of the Senior Loan hereunder shall include (i) a
statement that the Officer or Officers making or giving such Officers'
Certificate have read such condition and any definitions or other provisions
contained in this Agreement relating thereto, (ii) a statement that, in the
opinion of the signers, they have made or have caused to be made such
examination or investigation as is necessary to enable them to express an
informed opinion as to whether or not such condition has been complied with and
(iii) a statement as to whether, in the opinion of the signers, such condition
has been complied with.
"Other Taxes" has the meaning ascribed to such term in Section
10.19.
"Parent" means Cityscape Financial Corp., a Delaware corporation.
"Pari Passu Indebtedness" means, with respect to the Borrower,
Indebtedness that ranks pari passu in right of payment (without regard to
whether or not such Indebtedness is secured) to the Senior Loan.
27
-21-
"Payment Office" shall mean the office of the Agent located at ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or such other office as the Agent may
designate to the Borrower and the Lenders from time to time.
"Payment Restriction" has the meaning ascribed to
such term in Section 6.7.
"PBGC" means the Pension Benefit Guaranty Corporation and any
successor to all or any of the Pension Benefit Guaranty Corporation's functions
under ERISA.
"Pension Plan" means an employee pension benefit plan as defined in
Section 3(2) of ERISA that is subject to the provisions of Title IV of ERISA and
that is maintained for employees of the Borrower, any Subsidiary of the Borrower
or any member of the Controlled Group.
"Performance Assurance Amount" shall have the meaning provided to
such term in Amendment No. 2, dated the date hereof, to the U.S. Greenwich
Facility.
"Permits" has the meaning ascribed to such term in Section 4.20.
"Permitted Collateral Encumbrances" means, with respect to Liens on
the Collateral Incurred in compliance with Section 6.2(b), Liens which are in
addition to the Lien granted to the Lenders in respect of the Collateral.
"Permitted Encumbrances" means, other than with respect to the
Collateral, (i) Liens (a) existing on the Closing Date set forth on Schedule A
to the extent and in the manner such Liens are in effect on the Closing Date or
(b) arising under agreements of the Company to the extent such Liens are
contemplated by such agreements as in effect on the Closing Date; (ii) Liens for
taxes, assessments or governmental charges or claims the payment of which is
not, at the time, required by Section 5.3; (iii) statutory Liens of landlords
and banks and rights of offset, and Liens of carriers, warehousemen, workmen,
repairmen, mechanics and materialmen and other Liens imposed by law incurred in
the ordinary course of business for sums not yet delinquent or being contested
in good faith, if such reserve or other appropriate provision, if any, as shall
be required by GAAP shall have been made therefor; (iv) Liens incurred or
deposits made in the ordinary course of business in connection with workers'
compensation, unemployment insurance
28
-22-
and other types of social security, or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, government
contracts, trade contracts, utility payments, performance and return-of-money
bonds and other similar obligations (exclusive of obligations for the payment of
borrowed money); (v) any attachment or judgment Lien not constituting an Event
of Default; (vi) leases or subleases granted to others not interfering in any
material respect with the ordinary conduct of the business of the Borrower and
its Subsidiaries, taken as a whole; (vii) easements, rights-of-way,
restrictions, utility agreements, covenants, reservations, minor defects,
encroachments or irregularities in title and other similar charges or
encumbrances not interfering in any material respect with the ordinary conduct
of the business of the Borrower and its Subsidiaries, taken as a whole; (viii)
any (a) interest or title of a lessor or sublessor under any lease, (b)
restriction or encumbrance that the interest or title of such lessor or
sublessor may be subject to (including without limitation ground leases or other
prior leases of the demised premises, mortgages, mechanics liens, tax liens, and
easements), or (c) subordination of the interest of the lessee or sublessee
under such lease to any restrictions or encumbrance referred to in the preceding
clause (b); (ix) Liens arising from filing UCC financing statements for
precautionary purposes relating solely to true leases of personal property not
prohibited by this Agreement under which the Borrower or any of its Subsidiaries
is a lessee; (x) any zoning or similar law or right reserved to or vested in any
governmental office or agency to control or regulate the use of any real
property; (xi) Liens securing obligations (other than obligations representing
Indebtedness for borrowed money) under operating, reciprocal easement or similar
agreements entered into in the ordinary course of business of the Borrower and
its Subsidiaries; (xii) Liens upon specific items of inventory or other goods
and proceeds of any Person securing such Person's obligations in respect of
bankers' acceptances issued or created for the account of such Person to
facilitate the purchase, shipment or storage of such inventory or other goods in
the ordinary course of business; (xiii) Liens securing reimbursement obligations
with respect to letters of credit that encumber documents and other property
relating to such letters of credit and the products and proceeds thereof; (xiv)
Liens encumbering customary initial deposits and margin deposits, and other
Liens incurred in the ordinary course of business that are within the general
parameters customary in the industry, in each case securing Indebtedness under
interest swap obligations and foreign exchange agreements and forward contracts,
option futures
29
-23-
contracts, futures options or similar agreements or arrangements designed to
protect the Borrower or any Subsidiary from fluctuations in the price of
commodities; (xv) Liens arising out of consignment or similar arrangements for
the sale of goods entered into by the Borrower or any Subsidiary in the ordinary
course of business in accordance with past practices; (xvi) Liens to secure
Permitted Refinancing Indebtedness to the extent the Indebtedness Refinanced was
secured and such Liens do not extend to any property other than the property
(including after-acquired property) which was subject to the Lien under the
Indebtedness being Refinanced; (xvii) licenses of patents, trademarks and other
intellectual property rights granted by the Company or any of its Subsidiaries
in the ordinary course of business and not interfering in any material respect
with the ordinary conduct of the business of a Borrower or any such Subsidiary;
(xviii) Liens securing purchase money indebtedness; (xix) Liens permitted by
Section 6.2 hereof; and (xx) Liens securing obligations under Yield Maintenance
Agreements, provided that the Lien does not extend beyond the interest-only or
residual certificate to which such Yield Maintenance Agreement applies.
"Permitted Holders" means any Person or Group that holds in excess
of 50% of the Voting Stock of the Company or Parent at the Closing Date.
"Permitted Investments" means (a) Investments in cash and Cash
Equivalents; (b) Investments by the Borrower or by any Subsidiary of the
Borrower in any Person that is or will become immediately after such Investment
a Wholly-Owned Subsidiary of the Borrower that has not Incurred (and will not
Incur as a result of or in connection with such transaction) any Indebtedness
(other than Indebtedness permitted to be Incurred by such Subsidiary under
Section 6.1); provided that (x) such Investment shall be a Permitted Investment
only for so long as any such Subsidiary in which the Investment has been made
meets the conditions set forth above and (y) no Investment in any such Person or
Subsidiary (including any transaction pursuant to which any Person becomes a
Subsidiary of the Company) will be a Permitted Investment if and for so long as
such Subsidiary is or would be subject to any Payment Restriction (other than a
Payment Restriction in effect on the date hereof); (c) any Investments in the
Borrower by any Subsidiary of the Borrower; provided that any Indebtedness of a
Borrower for payment in respect of such Investment is subordinated in right of
payment, pursuant to a written agreement, to the Borrower's Obligations; (d)
Investments made by the Borrower or by its Subsidiaries out
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of the Net Cash Proceeds of an Asset Sale or Securities Offering made in
compliance with Section 2.4A(ii)(a); (e) Intercompany Indebtedness; (f)
Investments by the Company in the Parent; (g) the making or origination of
mortgage loans in the ordinary course of business; (h) the making of loans to
third parties for the origination of mortgage loans in the ordinary course of
business of the Borrower in an aggregate principal amount not to exceed
$25,000,000 at any one time outstanding under the CoreStates Facility or any
refinancing thereof permitted by Section 6.1(vi) and $10,000,000 at any one time
outstanding otherwise payable to the Company; and (i) transfers of residual
certificates to SPCs.
"Permitted Refinancing Indebtedness" means (A) any Refinancing by
the Borrower of Indebtedness of the Borrower or of its Subsidiaries (other than
Indebtedness Incurred or outstanding pursuant to clauses (iii) and (vii) of
Section 6.1, which Indebtedness shall remain subject to the maximum aggregate
amounts outstanding as set forth therein) and (B) any Indebtedness incurred
pursuant to a Refinancing by any Subsidiary of the Borrower of Indebtedness
Incurred by such Subsidiary (other than Indebtedness Incurred or outstanding
pursuant to clauses (iii) and (vii) of Section 6.1, which Indebtedness shall
remain subject to the maximum aggregate amounts outstanding as set forth
therein), in the case of each of (A) and (B), that does not (1) result in an
increase in the total of the greater of the aggregate principal amount of or
(ii) the aggregate principal amount of commitment relating to, the Indebtedness
of such Person being Refinanced as of the date of such proposed Refinancing (if
such Indebtedness that is Refinancing the existing Indebtedness is issued at a
price less than 100% of the principal amount thereof, an increase shall not be
deemed to have occurred unless the gross proceeds of such Indebtedness that is
Refinancing the existing Indebtedness is in excess of the total of the aggregate
principal amount of the Indebtedness being Refinanced as of the date of such
proposed Refinancing) or (2) create Indebtedness with a Weighted Average Life to
Maturity that is less than the Weighted Average Life to Maturity of the
Indebtedness being Refinanced; provided that (x) if such Indebtedness being
Refinanced is Indebtedness of the Borrower, then the Refinancing Indebtedness
shall be Indebtedness solely of the Borrower; provided that Indebtedness of the
Company or any Subsidiary may be Refinanced and become Indebtedness of Parent,
(y) if such Indebtedness being Refinanced is subordinate or junior in right of
payment to the Senior Loan, as the case may be, or if recourse in respect of the
Indebtedness being Refinanced is limited in any respect,
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then such Indebtedness proposed to be Incurred to Refinance the existing
Indebtedness shall be subordinate in right of payment to the Senior Loan and
recourse with respect thereto shall be limited at least to the same extent and
in the same manner as the Indebtedness being Refinanced and (z) if such
Indebtedness being Refinanced is Pari Passu Indebtedness, then such Indebtedness
proposed to be incurred to Refinance the existing Indebtedness shall be Pari
Passu Indebtedness. Any reference to specific Indebtedness referred to in this
Agreement shall also be deemed to include any Permitted Refinancing Indebtedness
of such Indebtedness.
"Person" means and includes natural persons, corporations, limited
liability companies, limited partnerships, general partnerships, joint stock
companies, joint ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts or other organizations, whether or not
legal entities, and governments and agencies and political subdivisions thereof.
"Plan" means an employee benefit plan as defined in Section 3(3) of
ERISA maintained by the Borrower or any of its Subsidiaries for employees of the
Borrower or any of its Subsidiaries.
"Pledge Agreement" means the Pledge Agreement dated the date hereof,
substantially in the form attached hereto as Exhibit VII.
"Potential Event of Default" means a condition or event that, after
notice or lapse of time or both, would constitute an Event of Default if that
condition or event were not cured or removed within any applicable grace or cure
period.
"Preferred Stock" of any Person means any Capital Stock of such
Person that has preferential rights (as compared to any other Capital Stock of
such Person) with respect to dividends or redemptions or upon liquidation.
"pro forma" means, with respect to any calculation made or required
to be made pursuant to the terms of this Agreement, a calculation in accordance
with Article 11 of Regulation S-X under the Securities Act of 1933, as amended,
as interpreted by the Company's chief financial officer or Board of Directors in
consultation with its independent certified public accountants.
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"Qualified Capital Stock" means any Capital Stock that is not
Disqualified Capital Stock.
"Quarterly Period" shall mean the period commencing on the first
calendar day of each three-month period, if such day is a Business Day, or the
first Business Day succeeding the first calendar day of each three-month period
and ending on the day next preceding the first Business Day of the following
Quarterly Period.
"Real Property Assets" means interests in land, buildings,
improvements, and fixtures attached thereto or used in the operation thereof, in
each case owned or leased (as lessee) by the Borrower or its Subsidiaries.
"Receivables" means consumer and commercial loans, leases and
receivables purchased or originated by the Company or any of its Subsidiaries in
the ordinary course of business; provided, however, that for purposes of
determining the amount of a Receivable at any time, such amount shall be
determined in accordance with GAAP, consistently applied, as of the most recent
practicable date.
"Refinance" means, in respect of any security or Indebtedness, to
refinance, extend, renew, refund or defease, or to issue a security or
Indebtedness in exchange or replacement for, such security or Indebtedness in
whole or in part. "Refinanced" and "Refinancing" shall have correlative
meanings.
"Register" has the meaning ascribed to such term in Section 5.11.
"Related Business" means any capital expenditure or Investment in
properties and assets that replace the properties and assets that were the
subject of an Asset Sale or in properties and assets that will be used in the
business of the Company and its Subsidiaries as existing on the Closing Date or
in businesses reasonably related thereto.
"Release" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including, without limitation, the abandonment or disposal of any
barrels, containers or other closed receptacles containing any Hazardous
Materials), or into or out of any Facility,
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including the movement of any Hazardous Material through the air, soil, surface
water, groundwater or property.
"Reportable Event" has the meaning set forth in Section 4043 of
ERISA, but excluding any event for which the 30-day notice requirement has been
waived by applicable regulations of the PBGC.
"Required Lenders" means Lenders holding in the aggregate more than
50% of the outstanding principal amount of Notes.
"Restricted Payment" has the meaning ascribed to such term in
Section 6.3.
"Securities" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any profit
sharing agreement or arrangement, bonds, debentures, options, warrants, notes,
or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Offering" means any offering by the Company or any of
its Subsidiaries of (i) shares of its Capital Stock and all rights, warrants or
options to acquire such Capital Stock and (ii) Indebtedness (other than
Permitted Indebtedness), in each case, whether registered or exempt from
registration under the Securities Act.
"Senior Loan" has the meaning ascribed to such term in Section 2.1.
"Senior Loan Commitment" has the meaning ascribed to such term in
Section 2.1A.
"Senior Loan Documents" means this Agreement, the Notes, the
Guarantee and the Pledge Agreement.
"SPC" means any direct or indirect Subsidiary of the Company in
existence on the date hereof or hereinafter
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organized that is prohibited by the terms of its organizational documents from
guaranteeing any obligations of the Company and the primary purpose of which is
to hold interest-only and/or residual certificates.
"Subordinated Indebtedness" means Indebtedness of the Borrower that
is expressly subordinated in right of payment to the Notes.
"Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of stock or other equity interest entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereto is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person or a combination thereof.
"Taxes" means all taxes, assessments, fees, levies, imposts, duties,
penalties, deductions, liabilities, withholdings or other charges of any nature
whatsoever, including interest penalties, from time to time or at any time
imposed by any Law or any Tribunal.
"Transaction Costs" means the principal, interest, fees, costs and
expenses payable by the Borrowers pursuant hereto and other principal, interest,
fees, costs and expenses payable by the Company or any other Loan Party in
connection with the Transactions.
"Transactions" shall mean, collectively, (i) the repayment of all
amounts outstanding under the Bank of Boston Facility, (ii) repayment of
approximately $4.965 million owed to Greenwich Capital Financial Products, Inc.
with respect to the 1996-3 securitization, (iii) the incurrence of the Senior
Loan hereunder on the Closing Date, (iv) any other transaction on the Closing
Date contemplated in relation to the foregoing and (v) the payment of fees and
expenses in connection with the foregoing.
"Transferee" has the meaning ascribed to such term in Section 10.19.
"Tribunal" means any government, any arbitration panel, any court or
any governmental department, commission, board, bureau, agency, authority or
instrumentality of the United States or any state, province, commonwealth,
nation,
▇▇
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▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇, town, township, village or municipality,
whether now or hereafter constituted and/or existing.
"U.K. Greenwich Facility" means the Purchase Commitment with Respect
to First and Second Mortgage Loans Located in the United Kingdom dated March 28,
1996 between City and Greenwich International, Ltd., as in effect on the date
hereof.
"U.K. Overdraft Facility" means the overdraft facility provided by
The First National Bank of Boston to City, as in effect on the date hereof,
which provides for unsecured revolving credit borrowings.
"U.S. Greenwich Facility" means the Purchase and Sale Agreement
dated as of February 2, 1996 between the Company and Greenwich Capital Financial
Products, Inc., as in effect on the date hereof.
"U.S. Legal Tender" means such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts.
"Voting Stock" means, with respect to any Person, securities of any
class or classes of Capital Stock in such Person entitling the holders thereof
(whether at all times or only so long as no senior class of stock has voting
power by reason of any contingency) to vote in the election of members of the
board of directors or other governing body of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding aggregate principal amount of such Indebtedness into (b) the total
of the products obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect thereof, by (ii) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment.
"Wholly-Owned Subsidiary" means, with respect to any Person, any
other Person of which 100% of the total voting power (other than director's
qualifying shares) of shares of stock or other equity interest entitled (without
regard to the occurrence of any contingency) to vote in the election of
36
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directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Wholly-Owned
Subsidiaries of that Person or a combination thereof.
"Yield Maintenance Agreement" means the obligation of the Borrower
to make payments to the purchaser of an interest-only certificate to protect
such purchaser against a reduction in its return on its investment therein due
to early prepayments of the mortgage loans underlying such interest-only
certificate.
1.2 Accounting Terms
For the purposes of this Agreement, all accounting terms not
otherwise defined herein shall have the meanings assigned to them in conformity
with GAAP.
1.3 Other Definitional Provisions
Any of the terms defined in Section 1.1 may, unless the context
otherwise requires, be used in the singular or the plural depending on the
reference.
SECTION 2 AMOUNT AND TERMS OF SENIOR LOAN COMMITMENT
AND SENIOR LOAN; NOTE
2.1 Senior Loan and Note
A. Senior Loan Commitment. Subject to the terms and conditions of
this Agreement and in reliance upon the representations and warranties of the
Company herein set forth, the Lenders hereby agree to lend to the Borrower (i)
$40,000,000 on the Closing Date (the "Initial Senior Loan") and (ii) on each
Additional Closing Date up to an aggregate of an additional $60,000,000 (or such
lower amount as the Lenders hereunder have committed in excess of the Initial
Senior Loan, as indicated on the signature pages hereto), provided that each
such additional request by the Company shall not be for less than $10,000,000
and shall be in multiples of $100,000 (the "Additional Senior Loan" and,
together with the Initial Senior Loan the "Senior Loan") and, provided, further,
that the aggregate Senior Loans outstanding shall not exceed $100,000,000 (or
such lower amount as the Lenders hereunder have committed, as indicated on the
signature pages hereto). The Lenders' commitment to make the Senior Loan to the
Borrower pursuant to this Section 2.1A is herein called the "Senior Loan
Commitment."
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B. Notice of Borrowing. When the Borrower desires to borrow under
this Section 2.1, it shall deliver to the Agent a Notice of Borrowing no later
than 11:00 A.M. (New York time), at least two Business Days in advance of the
Closing Date or each Additional Closing Date, as the case may be, or such later
date as shall be agreed to by the Agent. The Notice of Borrowing shall specify
the applicable date of borrowing (which shall be a Business Day) and, in the
case of borrowings after the Closing Date, the amount to be borrowed. Upon
receipt of such Notice of Borrowing, the Agent shall promptly notify the Lenders
of the matters covered by the Notice of Borrowing.
C. Disbursement of Funds. (a) No later than 12:00 Noon (New York
time) on the Closing Date or any Additional Closing Date, as the case may be,
each Lender will make available its pro rata share of the Senior Loan in the
manner provided below. All amounts shall be made available in U.S. Legal Tender
and immediately available funds at the Payment Office and the Agent promptly
will make available to the Borrower by depositing to its account at the Payment
Office the aggregate of the amounts so made available in the type of funds
received. Unless the Agent shall have been notified by any Lender prior to the
Closing Date or any Additional Closing Date, as the case may be, that such
Lender does not intend to make available to the Agent its portion of the Senior
Loan to be made on such date, the Agent may assume that such Lender has made
such amount available to the Agent on such date, and the Agent, in reliance upon
such assumption, may (in its sole discretion and without any obligation to do
so) make available to the Company a corresponding amount. If such corresponding
amount is not in fact made available to the Agent by such Lender and the Agent
has made available same to the Borrower, the Agent shall be entitled to recover
such corresponding amount from such Lender. If such Lender does not pay such
corresponding among forthwith upon the Agent's demand therefor, the Agent shall
promptly notify the Borrower, and the Borrower shall immediately pay such
corresponding amount to the Agent. The Agent shall also be entitled to recover
from the Lender or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Agent to the Borrower to the date such
corresponding amount is recovered by the Agent, at a rate per annum equal to (x)
if paid by such Lender, the overnight Federal Funds Rate or (y) if paid by the
Borrower, the then applicable rate of interest on the Loans.
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(b) Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill the Senior Loan Commitments hereunder or to prejudice any
rights that the Company may have against any Lender as a result of any default
by any Lender hereunder.
D. Notes. The Borrower shall execute and deliver to the Lenders on
the Closing Date one or more Notes dated the Closing Date substantially in the
form of Exhibit I to evidence the Lender's portion of the Senior Loan Commitment
and with appropriate insertions.
E. Maturity of Senior Loan. The Senior Loan shall mature and the
Borrower shall pay in full the outstanding principal amount thereof and accrued
interest thereon on October 30, 1998 (the "Maturity Date").
F. Termination of Senior Loan Commitment. The Senior Loan Commitment
hereunder shall terminate on November 8, 1996 if the Initial Senior Loan is not
made on or before such date. The Borrower shall have the right, without premium
or penalty, to reduce or terminate the Senior Loan Commitment of the Lenders
hereunder at any time upon three Business Days' prior written notice to the
Agent.
G. Pro Rata Borrowings. The Senior Loan made under this Agreement
shall be made by the Lenders pro rata on the basis of their respective Senior
Loan Commitments. It is understood that no Lender shall be responsible for any
default by any other Lender of its obligation to make its portion of the Senior
Loan hereunder and that each Lender shall be obligated to make its portion of
the Senior Loan hereunder, regardless of the failure of any other lender to
fulfill its commitments hereunder.
2.2 Interest on the Senior Loan
A. Rate of Interest. The Senior Loan shall bear interest on the
unpaid principal amount thereof from the date made through maturity (whether by
prepayment, acceleration or otherwise) at the rate of 11% per annum, which rate
increases by .50% per annum, effective as of the first day of each quarter for
the period on and after such date, commencing July 1, 1997, for so long as the
Senior Loan remains outstanding; provided that the rate borne by the Senior Loan
shall not exceed the Maximum Interest Rate.
39
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B. Interest Payments. Interest shall be payable (i) with respect to
the Senior Loan, in arrears on each January 30, April 30, July 30, and October
30 commencing on January 30, 1997, and upon any prepayment of the Senior Loan
(to the extent accrued on the amount being prepaid) and at maturity of the
Senior Loan.
C. Post-Maturity Interest. Any principal payments on the Senior Loan
not paid when due and, to the extent permitted by applicable law, any interest
payment on the Senior Loan not paid when due, in each case whether at stated
maturity, by notice of prepayment, by acceleration or otherwise, shall
thereafter bear interest payable upon demand at a rate that is 2.00% per annum
in excess of the rate of interest otherwise payable under this Agreement for the
Senior Loan.
D. Computation of Interest. Interest on the Senior Loan shall be
computed on the basis of a 360-day year comprised of twelve 30-day months. In
computing interest on the Senior Loan, the date of the making of the applicable
Senior Loan shall be included and the date of payment shall be excluded;
provided, however, that if a Senior Loan is repaid on the same day on which it
is made, one day's interest shall be paid on that Senior Loan.
2.3 Fees
The Company agrees to pay to the Agent for the accounts of the
Lenders the following fees:
(a) a commitment fee (the "Commitment Fee") in an amount equal to
1.0% of the full amount of the Senior Loan Commitment upon execution of
this Agreement; provided that if the actual Senior Loan Commitment upon
execution of this Agreement shall be less than $100,000,000 then only 1%
of such actual amount and, thereafter, 1% of any increased amount
immediately upon each increase of the Senior Loan Commitment; and
(b) a funding fee equal to 1.0% of the principal amount of the
portion of Senior Loan borrowed on each Closing Date and Additional
Closing Date, if any, in each case payable at the time of such borrowing.
Once paid, such fees shall not be refundable under any circumstances
and, in the case of the Commitment Fee, shall be payable whether or not any
Senior Loans are made.
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2.4 Prepayments and Payments
A. Prepayments
(i) Voluntary Prepayments. The Borrower may, upon not less than
three Business Days' prior written or telephonic notice confirmed in
writing to the Agent at any time and from time to time, prepay the Senior
Loan made to the Borrowers in whole or in part at 100% of the principal
amount thereon plus accrued interest; provided that unless the Senior Loan
is to be prepaid in full, such voluntary prepayments shall not result in
the aggregate principal amount of the Senior Loan outstanding being less
than $10,000,000.
Notice of prepayment having been given as aforesaid, the principal
amount of the Senior Loan to be so prepaid shall become due and payable on
the prepayment date. Amounts of the Senior Loan so prepaid may not be
reborrowed.
(ii) Mandatory Prepayments
(a) Prepayments from Asset Sales and Securities Offerings. Upon
receipt by the Parent, Borrower or any Subsidiary of the Borrower of Net
Cash Proceeds of any Asset Sale and of any Securities Offering by the
Parent, Borrower or its Subsidiaries occurring after the Closing Date, the
Parent, Borrower or any Subsidiary shall, or shall cause its Subsidiaries
to, (i) first, apply the Net Cash Proceeds to the purchase of assets to be
utilized in a line of business in which the Company or such Subsidiary
is engaged on the Closing Date; provided that any such purchase is
consummated within 180 days of each such Asset Sale or Securities
Offering, as the case may be, and (ii) second, to the extent that the
aggregate Net Cash Proceeds not utilized in accordance with (i) above
exceed $10,000,000, apply the Net Cash Proceeds of such Asset Sale or
Securities Offering, as the case may be, to prepay the Senior Loan;
provided that the commitment thereunder shall be permanently reduced to
the extent of the prepayment. Concurrently with the consummation of an
Asset Sale or Securities Offering, as the case may be, the Borrower shall
deliver to the Agent an Officer's Certificate demonstrating the derivation
of Net Cash Proceeds from the gross sales price of such Asset Sale or
Securities Offering, as the case may be. The Borrower shall, or shall
41
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cause its Subsidiaries to, prepay the Senior Loan with the Net Cash
Proceeds received from any Asset Sale or Securities Offering, as the case
may be, and not applied in accordance with (i) above, on a date not later
than 30 Business Days after the obligation to prepay the Senior Loan is
incurred under (ii) above.
(b) Notice. The Borrower shall notify the Agent of any prepayment to
be made pursuant to this Section 2.4A(ii) at least two Business Days prior
to such prepayment date.
(iii) The Company's Mandatory Prepayment Obligation; Application of
Prepayments. All prepayments shall include payment of accrued interest on
the principal amount so prepaid and shall be applied to payment of
interest before application to principal.
(iv) Mandatory Offer to Purchase the Note
(a) Upon the occurrence of a Change of Control (the date of such
occurrence, the "Change of Control Date"), each Lender shall have the
right to require the repurchase of the Note pursuant to an offer to
purchase (the "Change of Control Offer") at a purchase price equal to the
aggregate principal amount thereof plus accrued interest to the date of
repurchase.
(b) The notice to the Agent shall contain all instructions and
materials necessary to enable the Lender to tender the Note.
(c) Within 30 days following any Change of Control the Borrower
shall mail a notice to the Agent stating:
(1) that the Change of Control Offer is being made pursuant to
this Section 2.5(A)(iv) and that all Notes validly tendered will be
accepted for payment;
(2) the purchase price and the purchase date, which shall be
no earlier than 30 days nor later than 40 days from the date such
notice is mailed (the "Offer Payment Date");
(3) that any Note not tendered will continue to
accrue interest;
42
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(4) that any Note accepted for payment pursuant to the Change
of Control Offer shall cease to accrue interest after the Offer
Payment Date unless the Company shall default in the payment of the
repurchase price of the Notes;
(5) that if the Lender elects to have the Note purchased
pursuant to the Change of Control Offer it will be required to
surrender the Note, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Note completed, to the
Borrower prior to 10:00 a.m. New York time on the Offer Payment
Date;
(6) that the Lender will be entitled to withdraw its election
if the Borrower receives, not later than 5:00 p.m. New York time on
the Business Day preceding the Offer Payment Date, a telegram,
telex, facsimile transmission or letter setting forth the principal
amount of Notes the Lender delivered for purchase, and a statement
that the Lender is withdrawing its election to have the Note
purchased; and
(7) that if the Note is purchased only in part a new Note of
the same type will be issued in principal amount equal to the
unpurchased portion of the Note surrendered.
(d) On or before the Offer Payment Date, the Borrower shall (i)
accept for payment the Note or portions thereof that are to be purchased
in accordance with the above, and (ii) deposit at the Payment Office U.S.
Legal Tender sufficient to pay the purchase price of Notes to be
purchased. The Agent shall promptly mail to the Lender whose Notes are so
accepted payment in an amount equal to the purchase price.
(e) The Borrower shall comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in
connection with the purchase of the Note pursuant to an offer hereunder.
To the extent the provisions of any securities laws or regulations
conflict with the provisions under this Section, the Borrower shall comply
with the applicable securities laws and regulations and shall not be
deemed to have
43
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breached their obligations under this Section by virtue thereof.
B. Manner and Time of Payment. All payments of principal and
interest hereunder and under any Note by the Borrower shall be made without
defense, set-off or counterclaim and in same-day funds and delivered to the
Agent, unless otherwise specified, not later than 12:00 Noon (New York time) on
the date due at the Payment Office for the account of each Lender; funds
received by the Agent after that time shall be deemed to have been paid by the
Borrower on the next succeeding Business Day. The Borrower hereby authorizes the
Agent to charge its account with the Agent in order to cause timely payment to
be made of all principal, interest and fees due hereunder (subject to sufficient
funds being available in their account for that purpose).
C. Payments on Non-Business Days. Whenever any payment to be made
hereunder or under any Note shall be stated to be due on a day that is not a
Business Day, the payment shall be made on the next succeeding Business Day and
such extension of time shall be included in the computation of the payment of
interest hereunder or under the Notes or of the commitment and other fees
hereunder, as the case may be.
D. Notation of Payment. Each Lender agrees that before disposing of
any Note held by it, or any part thereof (other than by granting participations
therein), such Lender will make a notation thereon of all principal payments
previously made thereon and of the date to which interest thereon has been paid
and will notify the Borrower of the name and address of the transferee of such
Note; provided that the failure to make (or any error in the making of) such a
notation or to notify the Borrower of the name and address of such transferee
shall not limit or otherwise affect the obligation of the Company hereunder or
under any Note with respect to the Senior Loan and payments of principal or
interest on such Note.
2.5 Use of Proceeds
A. Senior Loan. The proceeds of the Initial Senior
Loan shall be applied by the Borrower to the payment of the
Transaction Costs and for the general corporate purposes of the
Borrower and its Subsidiaries.
B. Margin Regulations. No portion of the proceeds of the borrowing
under this Agreement shall be used by the
44
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Borrower in any manner that might cause the borrowing or the application of such
proceeds to violate the applicable requirements of Regulation G, Regulation U,
Regulation T or Regulation X of the Board of Governors of the Federal Reserve
System or any other regulation of the Board of Governors or to violate the
Exchange Act, in each case as in effect on the Closing Date and the date of such
use of proceeds.
SECTION 3 CONDITIONS
3.1 Conditions to Loan
The obligation of the Lender to make the Senior Loan is subject to,
at the Closing Date and at each Additional Closing Date, the prior or concurrent
satisfaction of each of the following conditions:
A. On or before the Closing Date and each Additional Closing Date,
as applicable, all corporate and other proceedings taken or to be taken in
connection with the transactions contemplated hereby and all documents
incidental thereto not previously found acceptable by the Lenders shall be
reasonably satisfactory in form and substance to the Lenders, and the Agent
shall have received the following items, each of which shall be in form and
substance satisfactory to the Agent and, unless otherwise noted, dated as of the
Closing Date or each Additional Closing Date, as the case may be:
1. a certified copy of the Company's and the Guarantor's charter,
together with a certificate of status, compliance, good standing or like
certificate with respect to the Borrower and the Guarantor issued by the
appropriate government officials of the jurisdiction of its incorporation
and of each jurisdiction in which it owns any material assets or carries
on any material business, each to be dated a recent date prior to the
Closing Date;
2. a copy of the Company's and the Guarantor's bylaws, certified as
of the Closing Date by one of their respective Officers;
3. resolutions of the Borrower and the Guarantor's Board of
Directors approving and authorizing the execution, delivery and
performance of this Agreement, each of the other Senior Loan Documents and
any other documents, instruments and certificates required to be executed
by the Borrower or the Guarantor in connection herewith and
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therewith and approving and authorizing the execution, delivery and
payment of the Notes and the consummation of the Transactions, each
certified as of the Closing Date by one of its Officers as being in
full force and effect without modification or amendment;
4. signature and incumbency certificates dated as of the Closing
Date of the Borrower and the Guarantor's Officers executing this
Agreement, the Notes and the Guarantees;
5. executed copies of this Agreement and the Notes substantially in
the form of Exhibit I executed in accordance with Section 2.1D drawn to
the order of each Lender and with appropriate insertions;
6. an originally executed Notice of Borrowing substantially in the
form of Exhibit III, signed by the President or a Vice President of the
Borrower on behalf of the Borrower in writing delivered to the Agent;
7. originally executed copies of one or more favorable written
opinions dated the Closing Date and each Additional Closing Date, as the
case may be, of (I) ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the Borrower
and the Guarantor, substantially in the form of Exhibit IV and addressed
to the Lenders and (II) ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, special counsel for the
Lenders, substantially in the form of Exhibit V and addressed to the
Lenders;
8. a certificate, delivered by the Borrower and signed by the
President or a Vice President and the Chief Financial or Accounting
Officer of the Borrower and addressed to the Lenders in form and substance
reasonably satisfactory to the Agent, with appropriate attachments dated
the Closing Date and each Additional Closing Date, as applicable, stating
that, after giving effect to the consummation of the Transactions, the
fair saleable value of the assets of the Borrower and its Subsidiaries
will not be less than the probable liability on their debts, that each of
the Borrower and its Subsidiaries will be able to pay its debts as they
mature and that each will not have unreasonably small capital to conduct
its business in form and substance reasonably satisfactory to the Agent.
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9. true and correct copies of the documentation evidencing the
payment and satisfaction of the Company's Obligations under the Bank of
Boston Facility;
10. a notation of Guarantee, executed and delivered by the
Guarantor, dated the date of issuance of each Note, substantially in the
form of Exhibit IX annexed hereto, as applicable;
11. a copy of all closing documents relating to the other
Transactions as the Agent may reasonably request; and
12. a duly executed copy of the Pledge Agreement.
B. On or before the Closing Date, all authorizations, consents and
approvals necessary in connection with the Transactions shall have been obtained
and remain in full force and effect and evidence of the receipt of such
authorizations, consents and approvals satisfactory to the Agent shall have been
delivered to the Agent.
C. On or before the Closing Date and each Additional Closing Date,
as the case may be, the Borrowers shall have paid to the Agent the fees payable
on the Closing Date pursuant to Section 2.4.
D. On or before the Closing Date and each Additional Closing Date,
as the case may be, the Company shall have performed in all material respects
all agreements that this Agreement provides shall be performed on or before the
Closing Date and each Additional Closing Date, as the case may be, except as
otherwise disclosed to and agreed to in writing by the Agent.
E. The Borrowers and the Lenders shall have entered into all other
financing documentation required by the Lenders relating to the Senior Loan and
the transactions contemplated thereby, on terms and in form and substance
reasonably satisfactory to the Lenders, which financing documentation shall
provide for the security interest contemplated by the Senior Loan Documents in
favor of the Lenders in the Collateral.
F. Simultaneously with the making of each Senior Loan by the Lender,
the Borrower shall have delivered to the Lenders an Officers' Certificate from
the Borrower in form and substance satisfactory to the Agent to the effect that
on or
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prior to the Closing Date and each Additional Closing Date, as the case may be,
(i) the Borrower has performed and complied with all covenants and conditions to
be performed and observed by the Borrower as required herein, (ii) the Borrower
has performed or complied with any agreements or documents referred to herein
required to be performed or complied with by this Agreement and the Borrower is
not in default in the performance or compliance with any of the terms or
provisions thereof and, in the case of the Initial Senior Loan, (iii) all
conditions to the consummation of the Transactions have been satisfied.
G. Neither the Borrower nor any of its Subsidiaries has sustained
any loss or interference with respect to its businesses or properties from fire,
flood, hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental proceeding,
which loss or interference, in the reasonable judgment of the Agent, has had or
could reasonably be expected to have a Material Adverse Effect; there shall not
have been, in the reasonable judgment of the Agent, any Material Adverse Change,
or any development involving a prospective Material Adverse Change.
H. No event shall have occurred and be continuing or would result
from the consummation of the borrowing contemplated by the respective Notice of
Borrowing that would constitute an Event of Default or Potential Event of
Default.
I. No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain any Lender from
making a Senior Loan.
J. There shall not be pending or, to the knowledge of the Borrower,
threatened any action, suit, proceeding, governmental investigation or
arbitration against or affecting the Borrower or any of its Subsidiaries that
has not been disclosed by the Borrower in writing to the Agent and there shall
have occurred no development in any such action, suit, proceeding, governmental
investigation or arbitration, which, in each case, singly or in the aggregate,
in the opinion of the Agent, could reasonably be expected to have a Material
Adverse Effect or a material adverse effect on the making of any Senior Loan. No
injunction or other restraining order shall have been issued and no hearing to
cause an injunction or other restraining order to be issued shall be pending or
noticed with respect to any action, suit or proceeding seeking to restrain,
enjoin, delay, prohibit or otherwise prevent the consummation of, or to recover
any damages or obtain relief as a result of, the
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Transactions. There shall not be threatened, instituted or pending any action,
proceeding or application before or by any Tribunal, or any other Person,
domestic or foreign (i) challenging the Transactions or seeking to restrain,
delay or prohibit the consummation thereof; (ii) seeking to prohibit or impose
material limitations on the Borrower's ownership or operation of all or any
material portion of the Borrower's business or assets (including the business or
assets of any Subsidiary thereof) or to compel the Borrower to dispose of or
hold separate all or any material portion of the Borrower's business or assets
(including the business or assets of any Subsidiary thereof) as a result of the
Transactions; (iii) that, in any event, might adversely affect any Senior Loan;
or (iv) seeking to impose any materially adverse conditions upon the
Transactions.
K. The making of each Senior Loan in the manner contemplated in this
Agreement shall not violate the applicable provisions of Regulation G, T, U or X
of the Board of Governors of the Federal Reserve Board or any other regulation
of the Board.
L. On the Closing Date, after giving effect to the Transactions, the
consolidated Collateral Coverage Ratio shall be at least 1.2 to 1.
M. As of the Closing Date, there shall not have occurred (i) any
general suspension of, or limitation on times or prices for, trading in
securities on the New York Stock Exchange or American Stock Exchange or in the
over-the-counter market in the United States or minimum or maximum prices
established on any such exchanges; (ii) a declaration of a banking moratorium or
any suspension of payments in respect of the banks in the United States or New
York; or (iii) either (A) an outbreak or escalation of hostilities between the
United States and any foreign power, or (B) an outbreak or escalation of any
other insurrection or armed conflict involving the United States or any other
national or international calamity or emergency, or (C) any material change in
the financial markets of the United States, which, in the reasonable judgement
of the Agent, makes it impracticable or inadvisable to proceed with the
consummation of the Transactions or any Senior Loan or any of the other
transactions contemplated hereby or that would materially affect the ability to
sell or syndicate any Senior Loan.
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N. The Agent and its counsel shall be reasonably satisfied that the
consummation of the Transactions and the related financing, including the
funding of any Senior Loan, shall be in compliance with all applicable Laws.
There shall not have been any statute, rule, regulation, injunction or order
applicable to the Transactions, promulgated, enacted, entered or enforced by any
state or federal government or governmental or regulatory authority or agency or
by any federal or state court, or by any Tribunal, nor shall there be pending
any action or proceeding by or before any such authority, court or tribunal, in
each case involving a substantial likelihood of an order, that would prohibit,
restrict, delay or otherwise materially affect the Transactions.
O. Neither the Company nor any of its Material Subsidiaries shall be
subject to a Bankruptcy Order; and a bankruptcy or other insolvency proceeding
or an Event of Default or Potential Event of Default shall not have occurred
under Section 7.6, 7.7 or 7.9.
P. No Event of Default or Potential Event of Default (whether
matured or not) shall have occurred under Section 7.1.
Q. The Lenders shall have perfected the security interest
contemplated by the Senior Loan Documents in the Collateral; provided that to
the extent any such security interest is not so perfected, the Company shall use
its best efforts to cause the security interest in the Collateral to be
perfected within 30 days of the Closing Date. The Company shall perfect its
security interest in the collateral securing the Intercompany Note within 45
days of the Closing Date.
R. From the date hereof, the business of the Borrower and its
Subsidiaries shall have been operated in the ordinary course consistent with
past practice.
SECTION 4 REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement and to
make the Senior Loan, each of the Borrower and the Guarantor, jointly and
severally, represents and warrants to the Lenders that, at the time of execution
hereof and as of the Closing Date and each Additional Closing Date and after
consummation of the Transactions, the following statements are true, correct and
complete:
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4.1 Organization and Good Standing; Capitalization
(a) Each of the Borrower and its Subsidiaries is a corporation duly
organized and existing and in good standing under the laws of its jurisdiction
of incorporation. Each of the Borrower and its Subsidiaries has the corporate
power and authority to own and operate its properties and to carry on its
business as now conducted and is duly qualified as a foreign corporation and in
good standing in all jurisdictions in which it is doing business, except where
failure to be so qualified or in good standing, singly or in the aggregate,
would not have a Material Adverse Effect or a material adverse effect on the
ability of the Borrower and its Subsidiaries to consummate the Transactions and
to execute, deliver and perform its respective obligations under the Senior Loan
Documents and each other document or instrument to be delivered in connection
with the Transactions executed or to be executed by it.
(b) All of the Subsidiaries of the Borrower as of the Closing Date
are identified in Schedule B.
4.2 Authorization and Power
The Borrower and the Guarantor each have the corporate power and
requisite authority, and, to the extent a party thereto, has taken all corporate
action necessary, to consummate the Transactions and to execute, deliver and
perform its obligations under the Senior Loan Documents and each other document
and instrument to be delivered in connection with the Transactions executed or
to be executed by it and to issue the Note.
4.3 No Conflicts or Consents
(a) The execution and delivery of the Senior Loan Documents, the
Agreement and each other document to be executed and delivered in connection
with the Transactions, the consummation of each of the transactions herein or
therein contemplated, the compliance with each of the terms and provisions
hereof or thereof, and the issuance, delivery and performance of each Note do
not and will not (i) violate any provision of any law or any governmental rule
or regulation applicable to the Borrower or any Subsidiary, the Certificate or
Articles of Incorporation or bylaws of either of them or any order, judgment or
decree of any court or other agency of government binding on any of them, (ii)
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a
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default under any Contractual Obligation of the Borrower or any Subsidiary that
could reasonably be expected to result in a Material Adverse Effect or have a
material adverse effect on the ability of the Borrower or any Subsidiary to
consummate the Transactions and to execute, deliver and perform their
obligations under the Senior Loan Documents and each other document and
instrument to be delivered in connection with the Transactions executed or to be
executed by it or (iii) result in or require the creation or imposition of any
Lien upon any of the properties or assets of any Borrower or any Subsidiary.
(b) No consent, approval, authorization or order of any Tribunal or
other Person is required in connection with the execution and delivery by the
Borrower or any Subsidiary of the Senior Loan Documents or any other document or
instrument to be delivered in connection with the Transactions or the
consummation of the transactions contemplated hereby or thereby, other than any
such consent, approval, authorization or order that has been obtained and
remains in full force and effect or that has been waived in writing by the Agent
on behalf of the Lenders or the failure of which to obtain would not, singly or
in the aggregate, have a Material Adverse Effect or a material adverse effect on
the ability of the Borrower or any Subsidiary to consummate the Transactions and
to execute, deliver and perform its respective obligations under the Senior Loan
Documents and each other document or instrument to be delivered in connection
with the Transactions executed or to be executed by it.
4.4 Enforceable Obligations
Each of the Senior Loan Documents and each other document or
instrument to be delivered in connection with the Transactions has been duly
authorized; each of the Senior Loan Documents and each other document or
instrument to be delivered in connection with the Transactions to be executed
and delivered on or prior to the Closing Date or each Additional Closing Date,
as the case may be, has been duly executed and delivered by the Borrower and its
Subsidiaries (to the extent a party thereto); and each of the Senior Loan
Documents and each other document or instrument to be delivered in connection
with the Transactions to be executed and delivered on or prior to the Closing
Date and each Additional Closing Date, as the case may be, is, and each of the
Senior Loan Documents to be executed and delivered after the Closing Date and
each Additional Closing Date, as the case may be, will be, upon such execution
and delivery, the legal, valid and binding obligations of the Borrower and its
Subsidiaries (to the extent a party thereto),
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enforceable in accordance with their respective terms, except to the extent that
the enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization or similar laws affecting the enforcement of creditors' rights
generally or by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
4.5 Properties; Liens
The Borrower has, and after consummation of the Transactions will
have, good, sufficient and legal title to all of its respective properties and
assets, and all properties held under lease by it, are, and immediately after
the consummation of the Transactions will be, held under valid, subsisting and
enforceable leases, and the Borrower is not in default under any lease, except
in each case for such defects or defaults that, singly or in the aggregate,
would not have a Material Adverse Effect. Except as permitted by this Agreement,
all such properties and assets owned or leased are so owned or leased free and
clear of Liens.
4.6 Financial Condition
(a) The audited consolidated balance sheets of the Company and its
Subsidiaries at December 31, 1995 and the related consolidated statements of
income, shareholders equity and cash flows of the Company and its Subsidiaries,
certified by the independent certified public accountants of the Company, copies
of which have been delivered to the Agent, were prepared in accordance with
GAAP, have been prepared from, and are consistent with, the books and records of
the Company and fairly present the consolidated financial position, as at the
date thereof, and the consolidated results of operations and cash flows of the
Company and its Subsidiaries for the periods then ended. Neither the Company nor
any of its Subsidiaries had at December 31, 1995 any material contingent
liabilities, liabilities for Taxes or long-term leases, unusual forward or
long-term commitments or unrealized or unanticipated losses from any unfavorable
commitments which are not reflected or reserved against in the foregoing
statements or in the notes thereto. As of the Closing Date, no events that have
had or could reasonably be expected to have a Material Adverse Effect have
occurred since December 31, 1995 except as reflected therein.
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(b) The unaudited consolidated balance sheet of the Company and its
Subsidiaries at June 30, 1996 as amended by the Company's quarterly report on
Form 10-Q/A filed with the Commission on September 27, 1996 and the related
consolidated statements of income, retained earnings (deficit) and cash flows of
the Company and its Subsidiaries for the period then ended, a copy of which has
been delivered to the Agent, were prepared in accordance with GAAP consistently
applied (except to the extent noted therein), have been prepared from, and are
consistent with, the books and records of the Company and fairly present the
consolidated financial position of the Company and the Subsidiaries of the
Company as of such date and the consolidated results of operations and cash
flows of the Company and its Subsidiaries for the period covered thereby, in
each case subject to normal year-end audit adjustments (including footnotes),
consistent with past practices. Neither the Company nor any of its Subsidiaries
had at June 30, 1996 any material contingent liabilities, liabilities for Taxes
or long-term leases, unusual forward or long-term commitment or unrealized or
unanticipated losses from any unfavorable commitment which are not reflected or
reserved against in the foregoing statements or in the notes thereto.
(c) The pro forma balance sheet of the Company as of August 31,
1996, a copy of which has heretofore been furnished to the Agent, fairly
presents the estimated consolidated opening balance sheet of the Company
assuming the Transactions and any write-downs of assets occurring after August
31, 1996 but before the Closing Date had occurred as of August 31, 1996, and the
financial condition of the Company on the Closing Date and on each Additional
Closing Date, as the case may be, does not differ in any material respect from
the information therein set forth.
(d) Upon giving effect to the Transactions:
(i) The fair saleable value of the assets of each of the Borrower
and the Guarantor, on a stand-alone basis, exceeds the amount that will be
required to be paid on or in respect of the existing debts and other
liabilities (including contingent liabilities) of such Person as they
mature.
(ii) The assets of each of the Borrower and the Guarantor, on a
stand-alone basis, do not constitute unreasonably small capital for any
such Person to carry out its business as now conducted and as proposed to
be conducted
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including the capital needs of any such Person, taking into account the
particular capital requirements of the business conducted by such
Person, and projected capital requirements and capital availability
thereof.
(iii) The Borrower does not intend to, and will not permit any
Guarantor to, incur debts beyond their ability to pay such debts as they
mature (taking into account the timing and amounts of cash to be payable
on or in respect of debt of each of such Person). The cash flow together
with the proceeds received from the liquidation of assets of the Borrower
and the Guarantor, after taking into account all anticipated uses of the
cash of each such Person, will at all times be sufficient to pay all
amounts on or in respect of debt of each such company when such amounts
are required to be paid.
(iv) The Borrower does not intend, and does not believe, that final
judgments against the Borrower or the Guarantor in actions for money
damages will be rendered at a time when, or in an amount such that, any
such Person will be unable to satisfy any such judgments promptly in
accordance with their terms (taking into account the maximum reasonable
amount of such judgments in any such actions and the earliest reasonable
time at which such judgments might be rendered). The cash flow of the
Borrower and the Guarantor, on a stand-alone basis, after taking into
account all other anticipated uses of the cash of each such Person
(including the payments on or in respect of debt referred to in paragraph
(iii) of this Section 4.6(d)), will at all times be sufficient to pay all
such judgments promptly in accordance with their terms.
4.7 Full Disclosure
The financial projections (including, without limitation, the pro
forma financial statements included therewith) heretofore furnished to the Agent
by the Borrower are complete, were prepared by or under the direction of an
Officer of the Borrower and were prepared in good faith on the basis of
information and assumptions that the Borrower believed to be fair, complete and
reasonable as of the date of such information, and which assumptions are
believed to be fair, complete and reasonable as of the date hereof. All other
factual information heretofore or contemporaneously furnished in writing by or
on behalf of the Borrower to the Agent for purposes of or in
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connection with this Agreement does not contain any untrue statement by such
party or, to its knowledge, any other party of a material fact or omit to state
any material fact necessary to keep the statements made by such party or, to its
knowledge, any other party contained herein or therein from being misleading. No
fact is known, no condition exists nor has any event occurred that has not been
disclosed herein or in any other document, certificate or statement furnished to
the Agent or the Lender for use in the transactions contemplated hereby that,
singly or in the aggregate, could reasonably be expected to have a Material
Adverse Effect.
4.8 No Default
No event has occurred and is continuing that constitutes a Potential
Event of Default or an Event of Default.
4.9 Compliance with Contracts, Etc.
Neither the Borrower nor any of its Subsidiaries is in violation of
(A) its certificate of incorporation, by-laws or other organizational documents
or (B) any applicable law, ordinance, administrative or governmental rule or
regulation, except, with respect to this clause (B), for such violations that
would not, singly or in the aggregate, have a Material Adverse Effect, or (C)
any order, decree or judgment of any Tribunal having jurisdiction over any of
them, except as would not, singly or in the aggregate, have a Material Adverse
Effect; no event of default or event that but for the giving of notice or the
lapse of time, or both, would constitute an event of default on the part of the
Borrower or any of its Subsidiaries exists under any material Contractual
Obligation.
4.10 No Litigation
There is no Litigation pending or, to the best knowledge of the
Borrower, threatened, by, against, or that may relate to or affect (a) any Plan
or any fiduciary or administrator thereof, (b) the Transactions or (c) the
Borrower or any of its Subsidiaries that, in each case, singly or in the
aggregate, could reasonably be expected to have a Material Adverse Effect. There
are no outstanding injunctions or restraining orders prohibiting consummation of
any of the transactions contemplated by the Senior Loan Documents. Neither the
Borrower nor any of its Subsidiaries has been advised that there is a reasonable
likelihood of an adverse determination of any Litigation which adverse
determination, should it occur, would have
56
-50-
a Material Adverse Effect or a material adverse effect on the ability of any
Loan Party to consummate the Transactions and to execute, deliver and perform
its respective obligations under the Senior Loan Documents and each other
document or instrument to be delivered in connection with the Transactions
executed or to be executed by it.
4.11 Use of Proceeds; Margin Stock, Etc.
The proceeds of the Senior Loan will be used solely for the purposes
specified herein. None of such proceeds will be used for the purpose of
purchasing or carrying any Margin Stock within the meaning of the applicable
provisions of Regulation G, T, U or X, or for the purpose of reducing or
retiring any Indebtedness that was originally incurred to purchase or carry a
Margin Stock or for any other purpose that might constitute this transaction a
"purpose credit" within the meaning of the applicable provisions of Regulation
G, T, U or X. None of the Loan Parties has taken or will take any action that
might cause any of the Senior Loan Documents to violate the applicable
provisions of Regulation G, T, U or X, or any other regulation of the Board of
Governors of the Federal Reserve System.
4.12 Taxes
All material tax returns, foreign and domestic, required, to the
knowledge of the Company, to be filed by the Borrower and each of its
Subsidiaries in any jurisdiction have been filed, and all material Taxes for
which they are directly or indirectly liable or to which any of their respective
properties or assets are subject have been paid prior to the time that such
Taxes could give rise to a Lien thereon except for contested claims. There is no
material proposed tax assessment against any Borrower or any of its
Subsidiaries, and, to the best knowledge of the Borrowers, there is no basis for
such assessment, except, in each case, for Contested Claims.
4.13 ERISA
A. The Borrower and each of its Subsidiaries and each of their
respective ERISA Affiliates are in material compliance with all applicable
provisions and requirements of the Internal Revenue Code and ERISA and the
regulations and published interpretations thereunder with respect to each
Employee Benefit Plan and have performed all their material obligations
57
-51-
under each Employee Benefit Plan, in each case, to the extent applicable.
B. No ERISA Event has occurred that individually or in the aggregate
resulted in a liability of the Borrower or any of its Subsidiaries or any of
their respective ERISA Affiliates in excess of $500,000 since the Closing Date.
C. Except as disclosed on Schedule C and except to the extent
required under Section 4980B of the Internal Revenue Code, no Employee Benefit
Plan provides health or welfare benefits (through the purchase of insurance or
otherwise) for any retired or former employees of any Loan Party or any of their
respective ERISA Affiliates.
D. In accordance with the most recent actuarial valuations, the
Amount of Unfunded Benefit Liabilities individually or in the aggregate for all
Pension Plans (excluding for purposes of such computation any Pension Plans that
have a negative Amount of Unfunded Benefit Liabilities), does not exceed
$100,000.
E. Except as disclosed in Schedule C, neither the Borrowers nor any
of their Subsidiaries is a party to any Foreign Plans. For purposes hereof, the
term "Foreign Plans" shall mean any plan, program, policy, arrangement or
agreement (other than employment agreements with individual employees)
maintained or contributed to by, or entered into with, the Borrower or any of
its Subsidiaries with respect to employees employed outside the United States.
4.14 Compliance with Law
The Borrower and each of its Subsidiaries are in compliance with all
Laws, except where the failure to comply, singly or in the aggregate, would not
have a Material Adverse Effect.
4.15 Government Regulation
Neither the Borrower nor the Guarantor is an "investment company",
or an "affiliated person" of an "investment company", as such terms are defined
in the Investment Company Act of 1940, as amended. Neither the Borrower nor any
Guarantor is a "holding company", or an "affiliate" of a "holding company", or a
"subsidiary company" of a "holding company", as such terms
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are defined in the Public Utility Holding Company Act of 1935, as amended.
4.16 Intellectual Property
A. Schedule E sets forth a complete and correct list, as of the
Closing Date, of: (i) all material patented or registered Intellectual Property
and pending patent applications or applications for registration of Intellectual
Property owned or filed by or on behalf of the Borrower and its Subsidiaries;
(ii) all material trade names and unregistered trademarks or service marks owned
by or used by the Borrower and its Subsidiaries; and (iii) all material licenses
of Intellectual Property to which the Borrower and its Subsidiaries or any of
them is a party, either as licensee or licensor. Except as set forth on Schedule
E, the Borrower and its Subsidiaries or any of them own or are licensed to use
all Intellectual Property necessary to permit the operation of their businesses
as currently conducted.
B. Except as disclosed on Schedule E, no material claim has been
asserted by any Person with respect to the use of any such Intellectual
Property, or challenging or questioning the validity or effectiveness of any
such Intellectual Property. Except as disclosed on Schedule E, to the best
knowledge of the Company, the use of such Intellectual Property by the Borrower
and each of its Subsidiaries does not infringe on the rights of any Person,
subject to such claims and infringements as do not, in the aggregate, give rise
to any liabilities that would have a Material Adverse Effect.
4.17 Environmental Matters
Except as set forth on Schedule F:
(i) the operations of the Borrower and each of its Subsidiaries
(including, without limitation, all operations and conditions at or in the
Facilities) comply in all material respects with all Environmental Laws
except for any such noncompliance that would not reasonably be expected to
have a Material Adverse Effect;
(ii) the Borrower and each of its Subsidiaries has obtained all
Permits under Environmental Laws necessary to its operations, and all such
Permits are being maintained in good standing, and the Borrower and each
of its Subsidiaries is in compliance with all material terms and
59
-53-
conditions of such Permits except for any such failure to obtain, maintain
or comply that would not reasonably be expected to have a Material Adverse
Effect;
(iii) neither the Borrower nor any of its Subsidiaries has received
(a) any notice or claim to the effect that it is or may be liable to any
Person under any Environmental Law, including without limitation, any
relating to any Hazardous Materials except as would not reasonably be
expected to have a Material Adverse Effect or (b) any letter or request
for information under Section 104 of the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. { 9604) or comparable
foreign or state laws regarding any matter that would reasonably be
expected to result in a Material Adverse Effect, and, to the best of the
Borrower's knowledge, neither the Borrowers nor any of its Subsidiaries is
involved in any investigation, response or corrective action relating to
or in connection with any Hazardous Materials at any Facility or at any
other location except for such of the foregoing that would not reasonably
be expected to have a Material Adverse Effect;
(iv) neither the Borrower nor any of its Subsidiaries is subject to
any judicial or administrative proceeding alleging the violation of or
liability under any Environmental Laws that if adversely determined would
reasonably be expected to have a Material Adverse Effect;
(v) neither the Borrower nor any of its Subsidiaries or any of their
respective Facilities or operations are subject to any outstanding written
order or agreement with any governmental authority or private party
relating to (a) any actual or potential violation of or liability under
Environmental Laws or (b) any Environmental Claims except for such of the
foregoing that would not reasonably be expected to have a Material Adverse
Effect;
(vi) neither the Borrower nor any of its Subsidiaries has any
contingent liability in connection with any Release or threatened Release
of any Hazardous Materials by any of the Loan Parties except for such of
the foregoing that would not reasonably be expected to have a Material
Adverse Effect;
(vii) to the best knowledge of the Borrower, none of the Borrower, any
of its Subsidiaries or any predecessor
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of the Borrower or any of its Subsidiaries has filed any notice under
any Environmental Law indicating past or present treatment, storage or
disposal of hazardous waste, as defined under 40 C.F.R. Parts 260-270
or any state equivalent;
(viii) no Hazardous Materials exist on, under or about any Facility in
a manner that would reasonably be expected to give rise to an
Environmental Claim having a Material Adverse Effect, and none of the
Borrowers nor any of their Subsidiaries has filed any notice or report of
a Release of any Hazardous Materials that would reasonably be expected to
give rise to an Environmental Claim having a Material Adverse Effect;
(ix) neither the Borrower nor any of its Subsidiaries or, to the
best of the Borrower's knowledge, any of their respective predecessors has
disposed of any Hazardous Materials in a manner that would reasonably be
expected to give rise to an Environmental Claim having a Material Adverse
Effect;
(x) to the knowledge of the Borrower no underground storage tanks or
surface impoundments are on or at any Facility; and
(xi) no Lien in favor of any Person relating to or in connection with
any Environmental Claim has been filed or has been attached to any
Facility or other assets of the Borrower or any of its Subsidiaries except
for any such Lien that would not reasonably be expected to have a Material
Adverse Effect.
Notwithstanding anything in this Section 4.18 to the contrary, no event or
condition has occurred that may interfere with present compliance by the
Borrower or any of its Subsidiaries with any Environmental Law or that may give
rise to any liability under any Environmental Law, including, without
limitation, any matter disclosed on Schedule F that, individually or in the
aggregate, has had a Material Adverse Effect.
4.18 Survival of Representations and Warranties
Subject to Section 10.10B, all representations and warranties in the
Senior Loan Documents shall continue until one year after repayment of each Note
and the Obligations, and
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any investigation at any time made by or on behalf of the Lender shall not
diminish the Lender's right to rely thereon.
4.19 Permits
Except as disclosed on Schedule G, the Borrower and each of its
Subsidiaries have such certificates, permits, licenses, franchises, consents,
approvals, authorizations and clearances that are material to the condition
(financial or otherwise), business or operations of the Loan Parties, taken as a
whole ("Permits"), and are in compliance in all material respects with all
applicable Laws of all Tribunals as are necessary to own, lease or operate their
respective properties and to conduct their businesses in the manner as presently
conducted and all such Permits are valid and in full force and effect. The
Borrower and each of its Subsidiaries is in compliance in all material respects
with its respective obligations under such Permits and no event has occurred
that allows, or after notice or lapse of time would allow, revocation or
termination of such Permits, except for any such revocation or termination as
would not, singly or in the aggregate, have a Material Adverse Effect.
4.20 Insurance
The Borrower and each of its Subsidiaries carries or is entitled to
the benefits of insurance (including self-insurance) in such amounts and
covering such risks as is generally maintained by companies of established
repute engaged in the same or similar businesses, and all such insurance is in
full force and effect.
4.21 Security Interest
There has been created in favor of the Agent for the benefit of the
Lenders a valid, enforceable and duly perfected security interest in the
Collateral that secures the full amount of the Senior Loan to be made and all
other amounts outstanding under this Agreement and such other amounts with such
priorities and subject to such terms as are provided in the Pledge Agreement,
subject to the obligation of the Company to perfect its security interest in the
collateral securing the Intercompany Note as provided in Section 3.1Q. The
pledgor has good and legal title to all Collateral covered by the Pledge
Agreement free and clear of all Liens, except as may be expressly permitted by
this Agreement or the Pledge Agreement. No filings or recordings are required to
perfect the security
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interests created under the Pledge Agreement except for such filings or
recordings required in connection with the Pledge Agreement as to which the
Borrower and its Subsidiaries shall cooperate in all respects so that the filing
thereof may be made on or before the Closing Date. The financing statement
recorded on November 2, 1993 by Bank Leumi Trust Co. of New York ("Bank Leumi")
does not represent a valid or enforceable lien on any of the assets of the
Company or any of its Subsidiaries. Any obligations of the Company or any of its
Subsidiaries under any instruments or agreements with Bank Leumi in connection
therewith have been satisfied or otherwise discharged and Bank Leumi otherwise
has no rights in the Collateral.
SECTION 5 AFFIRMATIVE COVENANTS
The Borrower and Guarantor covenant and agree that, until the Senior
Loan and the Note and all other amounts due under this Agreement have been
indefeasibly paid in full they shall perform all covenants in this Section 5
required to be performed by them:
5.1 Financial Statements and Other Reports
The Borrower will maintain, and will cause each of its Subsidiaries
to maintain, a system of accounting established and administered in accordance
with sound business practices to permit preparation of consolidated financial
statements in conformity with GAAP. The Borrower will deliver to each Lender and
the Agent:
(i) as soon as available and in any event within 30 days after the
end of each month ending after the Closing Date, (1) the consolidated
balance sheets of the Company and its Subsidiaries and the consolidating
balance sheets of the Company and the Material Subsidiaries, in each case
as at the end of such month, (2) the related consolidated and
consolidating statements of income, stockholders' equity and cash flows,
in each case for such month and for the period from the beginning of the
then current fiscal year to the end of such month, setting forth in each
case in comparative form the corresponding consolidated figures for the
corresponding periods of the previous fiscal year and the corresponding
figures from the consolidated plan and financial forecast for the current
fiscal year delivered pursuant to Section 5.1(x), all in reasonable detail
and certified by the chief financial
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officer or the controller of the Company that they fairly present the
financial condition of such entities as at the dates indicated and the
results of their operations and their cash flows for the periods
indicated, subject to changes resulting from audit and normal year-end
adjustments and (3) a narrative report describing the operations of the
Company and its Subsidiaries in the form prepared for presentation to
senior management for such monthly period and for the period from the
beginning of the then current fiscal year to the end of such monthly
period;
(ii) as soon as available and in any event within 45 days after the
end of each of the first three fiscal quarters of each fiscal year and
within 100 days after the end of the fourth fiscal quarter of each fiscal
year, (1) the consolidated balance sheets of the Company and its
Subsidiaries and the consolidating balance sheets of the Company and the
Material Subsidiaries as at the end of such fiscal quarter, (2) the
related consolidated and consolidating statements of income, stockholders'
equity and cash flows for such fiscal quarter and for the period from the
beginning of the then current fiscal year to the end of such fiscal
quarter, setting forth in each case in comparative form the corresponding
figures for the corresponding periods of the previous fiscal year and the
corresponding figures from the consolidated plan and financial forecast
for the current fiscal year delivered pursuant to Section 5.1(x), all in
reasonable detail and certified by the chief financial officer of the
Company that they fairly present the financial condition of each the
Company and its Subsidiaries and the Company and the Material
Subsidiaries, as the case may be, as at the dates indicated and the
results of their operations and their cash flows for the periods
indicated, subject to changes resulting from audit and normal year-end
adjustments, and (3) if the Company does not file quarterly reports on
Form 10-Q (or any successor form thereto) with the Commission, a narrative
report describing the operations of the Company and its Subsidiaries (in
the form of management's discussion and analysis of such operations which
would comply with the disclosure requirements of the Exchange Act and
rules and regulations promulgated thereunder with respect to management's
discussion and analysis set forth in quarterly reports on Form 10-Q)
prepared for such fiscal quarter and for the period from the beginning of
the then current fiscal year to the end of such fiscal quarter;
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(iii) as soon as available and in any event within 90 days after the
end of each fiscal year, (1) the consolidated balance sheets of the
Company and its Subsidiaries and the consolidating balance sheets of the
Company and the Material Subsidiaries as at the end of such fiscal year,
(2) the related consolidated and consolidating statements of income,
stockholders' equity and cash flows for such fiscal year, setting forth in
each case in comparative form the corresponding figures for the previous
fiscal year and the corresponding figures from the consolidated plan and
financial forecast for the current fiscal year delivered pursuant to
Section 5.1(x) for the fiscal year covered by such financial statements,
all in reasonable detail and certified by the chief financial officer of
the Company that they fairly present the financial condition of the
Company and its Subsidiaries and the Company and the Material
Subsidiaries, as the case may be, as at the dates and the results of their
operations and their cash flows for the periods indicated, (3) if the
Company does not file annual reports on Form 10-K (or any successor form
thereto) with the Commission, a narrative report describing the operations
of the Company and its Subsidiaries (in the form of management's
discussion and analysis of such operations which would comply with the
disclosure requirements of the Exchange Act and rules and regulations
promulgated thereunder with respect to management's discussion and
analysis set forth in quarterly reports on Form 10-K) prepared for such
fiscal year, and (4) in the case of such consolidated financial
statements, a report thereon of independent certified public accountants
of recognized national standing, which report shall be unqualified as to
scope of audit, shall express no doubts about the ability of the Company
and its Subsidiaries to continue as a "going concern", and shall state
that such consolidated financial statements fairly present the
consolidated financial position of the Company and its Subsidiaries as at
the dates indicated and the results of their operations and their cash
flows for the periods indicated in conformity with GAAP applied on a basis
consistent with prior years (except as otherwise disclosed in such
financial statements) and that the examination by such accountants in
connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards;
(iv) together with each delivery of financial statements pursuant to
Sections 5.1(ii) and (iii) above, (a) an
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Officers' Certificate of the Company stating that the signers have
reviewed the terms of this Agreement and the Notes and have made, or
caused to be made under their supervision, a review in reasonable detail
of the transactions and condition of the Company and its Subsidiaries
during the accounting period covered by such financial statements and that
such review has not disclosed the existence during or at the end of such
accounting period, and that the signers do not have knowledge of the
existence as at the date of the Officers' Certificate, of any condition or
event which constitutes an Event of Default or Potential Event of Default,
or, if any such condition or event existed or exists, specifying the
nature and period of existence thereof and what action the Company has
taken, is taking and proposes to take with respect thereto; and (b) a
Compliance Certificate demonstrating in reasonable detail compliance
during and at the end of such accounting periods with the restrictions
contained in Section 5.10 and Section 6;
(v) together with each delivery of consolidated financial statements
pursuant to Section (iii) above, a written statement by the independent
certified public accountants giving the report thereon (a) stating
whether, in connection with their audit examination, any condition or
event that constitutes an Event of Default or Potential Event of Default
that relates to accounting matters has come to their attention and, if any
such condition or event has come to their attention, specifying the nature
and period of existence thereof; provided that such accountants shall not
be liable by reason of any failure to obtain knowledge of any such Event
of Default or Potential Event of Default that would not be disclosed in
the course of their audit examination, and (b) stating that based on their
audit examination nothing has come to their attention that causes them to
believe that the information contained in the certificates delivered
therewith is not correct;
(vi) promptly upon receipt thereof (unless restricted by applicable
professional standards), copies of all reports in final form (other than
reports of a routine or ministerial nature which are not material)
submitted to the Company by independent certified public accountants in
connection with each annual, interim or special audit of the financial
statements of the Company and its Subsidiaries made by such accountants,
including, without
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limitation, any comment letter submitted by such accountants to
management in connection with their annual audit;
(vii) promptly upon the sending or filing thereof, copies of (a) all
financial statements, reports, notices and proxy statements sent or made
available generally by the Company to its securityholders or by any
Subsidiary of the Company to its securityholders other than the Company or
another Subsidiary of the Company, (b) all regular and periodic reports
and all final registration statements (other than on Form S-8 or a similar
form) and final prospectuses, if any, filed by the Company or any of its
Subsidiaries with any securities exchange or with the Securities and
Exchange Commission or any governmental authority succeeding to its
functions (other than reports of a routine or ministerial nature which are
not material) and (c) all press releases and other statements made
available generally by the Company or any of its Subsidiaries to the
public concerning material developments in the business of the Company or
any of its Subsidiaries;
(viii) promptly upon any executive officer of the Company obtaining
knowledge (a) of any condition or event that constitutes an Event of
Default or Potential Event of Default, or becoming aware that any Lender
or Agent has given any notice or taken any other action with respect to a
claimed Event of Default or Potential Event of Default under this
Agreement, (b) that any Person has given any notice to the Company or any
Subsidiary of the Company or taken any other action with respect to a
claimed default or event or condition that might result in an Event of
Default referred to in Section 7.2, (c) of any condition or event that
would be required to be disclosed in a current report filed with the
Commission on Form 8-K whether or not the Company is required to file such
reports under the Exchange Act, or (d) of the occurrence of any event or
change that has caused or evidences, either in any case or in the
aggregate, a Material Adverse Effect, an Officers' Certificate specifying
the nature and period of existence of any such condition or event, or
specifying the notice given or action taken by such holder or Person and
the nature of such claimed default, Event of Default, Potential Event of
Default, event or condition, and what action the Company has taken, is
taking and proposes to take with respect thereto;
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(ix) promptly upon any executive officer of the Company obtaining
knowledge of (X) the institution of, or non-frivolous threat of, any
action, suit, proceeding (whether administrative, judicial or otherwise),
governmental investigation or arbitration against or affecting the Company
or any of its Subsidiaries or any property of the Company or any of its
Subsidiaries (collectively, "Proceedings") not previously disclosed in
writing by the Company to the Lenders or (Y) any material development in
any Proceeding that, in any case:
(1) if adversely determined, has a reasonable
possibility of giving rise to a Material Adverse
Effect; or
(2) seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain
relief as a result of, the Transactions;
written notice thereof together with such other information as may be
reasonably available to the Company or any of its Subsidiaries to enable
the Lenders and their counsel to evaluate such matters;
(x) as soon as practicable but in any event no later than 40 days
following the first day of each fiscal year a forecast for each of the
twelve months of such fiscal year of the consolidated balance sheet and
the consolidated statements of income, cash flow and cash position of the
Company and its Subsidiaries and the consolidating balance sheet and the
consolidating statements of income, cash flow and cash position of the
Company and the Material Subsidiaries, together with an outline of the
major assumptions upon which the forecast is based. Together with each
delivery of financial statements pursuant to Sections 5.1(ii) and (iii)
above, the Company shall deliver a comparison of the current year to date
financial results against the budget required to be submitted pursuant to
this Section;
(xi) not later than the last day of each fiscal year of the Company,
a report in form and substance satisfactory to the Agent outlining all
material insurance coverage maintained as of the date of such report by
each Borrower and its Subsidiaries and all material insurance coverage
planned to be maintained by such Persons in the subsequent fiscal year;
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(xii) in writing, promptly upon an executive officer of the Company
obtaining knowledge that any Borrower or any of its Subsidiaries has
received notice or otherwise learned of any claim, demand, action, event,
condition, report or investigation indicating any potential or actual
liability arising in connection with (x) the non-compliance with or
violation of the requirements of any Environmental Law that could
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, (y) the release or threatened release of any
Hazardous Material, substance or constituent into the environment that
could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect or that release the Company or any of its
Subsidiaries would have a duty to report to a Tribunal under an
Environmental Law, or (z) the existence of any Environmental Lien on any
properties or assets of the Company or any of its Subsidiaries;
(xiii) with reasonable promptness, such other information and data with
respect to the Company or any of its Subsidiaries or any of their
respective property, business or assets as from time to time may be
reasonably requested by the Agent; provided that no information or data
shall be required to be delivered hereunder or under any other provision
of this Agreement if it would violate any applicable attorney-client or
accountant-client privilege or any agreement to which the Company or any
of its Subsidiaries is party as to the confidentiality of such
information.
5.2 Corporate Existence, Etc.
The Company will at all times preserve and keep in full force and
effect its corporate existence and rights and franchises to its business and
those of each of its Subsidiaries, except as permitted by Section 6.7 or where
the failure to so preserve or keep will not, singly or in the aggregate, have a
Material Adverse Effect.
5.3 Payment of Taxes and Claims; Tax Consolidation
The Company will, and will cause each of its Subsidiaries to, pay
all material Taxes, assessments and other governmental charges imposed upon it
or any of its material properties or assets or in respect of any of its
franchises, business, income or property before any material penalty accrues
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thereon, and all claims (including, without limitation, claims for labor,
services, materials and supplies) for sums that have become due and payable and
that have or may become a Lien upon any of its properties or assets prior to the
time when any material penalty or fine shall be incurred with respect thereto,
provided that no such charge or claim need be paid if the validity or amount of
such charge or claim is being diligently contested in good faith and if such
reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor.
5.4 Maintenance of Properties; Insurance
The Company will maintain or cause to be maintained in good repair,
working order and condition, ordinary wear and tear excepted, all material
properties used or useful in the business of the Company and its Subsidiaries
and from time to time promptly will make or cause to be made all necessary
repairs, renewals and replacements thereof; provided that nothing in this
Section 5.4 shall prevent a Borrower or any of its Subsidiaries from
discontinuing the use, operation or maintenance of any such properties, or
disposing of any of them, if such action is in the ordinary course of business
or, in the reasonable good faith judgment of such entity, necessary or desirable
in the conduct of its business or otherwise permitted by this Agreement. The
Company will maintain or cause to be maintained, with financially sound and
reputable insurers or with self insurance programs, in each case to the extent
consistent with prudent business practices and customary in its industry,
insurance with respect to its properties and business and the properties and
businesses of its Subsidiaries against loss or damage of the kinds (including,
in any event, business interruption insurance) and in the amounts customarily
carried or maintained under similar circumstances by corporations of established
reputation engaged in similar businesses and owning similar properties in the
same general respective areas in which the Company and its Subsidiaries operate
provided that the Company and any of its Subsidiaries may implement programs of
self-insurance in the ordinary course of business and in accordance with
industry standards so long as reserves are maintained in accordance with GAAP
for the liabilities associated therewith.
5.5 Inspection
The Company shall permit any authorized representatives designated
by the Agent to visit and inspect any of the
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properties of the Company or its Subsidiaries, including, without limitation,
its and their financial and accounting records, and to receive copies and
extracts therefrom, and to discuss its and their affairs, finances and accounts
with its and their officers and independent public accountants (provided that
representatives of the Company or any of its Subsidiaries may, if it so chooses,
be present at or participate in any such discussion), all upon reasonable notice
and at such reasonable times during normal business hours and as often as may be
reasonably requested (but no more frequently than quarterly unless an Event of
Default or a Potential Event of Default has occurred and is continuing).
5.6 Equal Security for Loans and
Notes; Pledge of Subsidiary Stock.
(a) If the Company or any of its Subsidiaries shall create, assume
or suffer to exist any Lien upon any of their respective property or assets,
whether now owned or hereafter acquired, other than Liens permitted by the
provisions of this Agreement and the U.S. Greenwich Facility, the Company shall,
at the request of the Agent, make or cause to be made effective provision
whereby the Obligations under this Agreement will be secured by such Lien
equally and ratably with any and all other Indebtedness thereby secured as long
as any such Indebtedness shall be secured; provided that this covenant shall not
be construed as or deemed to be a consent by the Lenders to any violation of the
provisions of Section 6.2; and provided, further, that the Company shall under
no circumstances be required to make or cause to be made effective provision
whereby the Obligations under this Agreement will be secured, directly or
indirectly, by Margin Stock.
(b) The Company shall, and shall cause each of its domestic
Subsidiaries to, pledge under the Pledge Agreement to the Lenders the issued and
outstanding Capital Stock of any SPC or other Subsidiary created or otherwise
organized after the date hereof and holding interest-only or residual
certificates with a value in excess of $10,000.
5.7 Compliance with Laws, Etc.
The Company shall, and shall cause each of its Subsidiaries
to, comply with the requirements of all applicable Laws of any Tribunal, to the
extent noncompliance, singly or in the aggregate, could reasonably be expected
to have a Material Adverse Effect.
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5.8 Maintenance of Accurate Records, Etc.
The Company shall keep, and will cause each of its Subsidiaries to
keep, true books and records and accounts in which full and correct entries will
be made of all its respective business transactions, and will reflect, and cause
each of its Subsidiaries to reflect, in its respective financial statements
adequate accruals and appropriations to reserves all in accordance with GAAP and
consistent with prior business practices.
5.9 ERISA Compliance
The Company and its Subsidiaries will (i) make prompt payment of all
contributions that it is obligated to make under all Pension Plans and that are
required to meet the minimum funding standard set forth in ERISA with respect to
each of the Pension Plans, (ii) within 30 days after the filing thereof, furnish
to the Lenders each Schedule B to the annual return/report (Form 5500 Series),
required to be filed with the Department of Labor and/or the Internal Revenue
Service pursuant to ERISA, with respect to each of the Pension Plans that is not
a Multiemployer Plan for each Plan year, and (iii) notify the Lenders promptly
upon becoming aware of any fact, including but not limited to, any Reportable
Event arising in connection with any of the Pension Plans that is not a
Multiemployer Plan, which could be reasonably expected to constitute grounds for
termination thereof by the PBGC or for the appointment by the appropriate United
States District Court of a trustee to administer such Pension Plan, together
with a statement as to the action, if any, proposed to be taken with respect
thereto.
5.10 Collateral Coverage
The Company shall maintain a consolidated Collateral Coverage Ratio
as of the end of each fiscal quarterly period of the Company of not less than
1.2 to 1.
5.11 Intercompany Note
(a) The Company shall at all times cause the aggregate principal
amount of the Intercompany Note outstanding to be not less than the lesser of
(i) $75 million and (ii) the outstanding principal amount of the Senior Loan.
(b) The Company shall at all times cause the Intercompany Note to be
secured by the assets of City and its
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Subsidiaries which are subject to the security interest granted to the lenders
under the U.K. Greenwich Facility and the notes payable to Greenwich
International, Ltd. in the aggregate principal amount outstanding of $38,000,000
subject only, in each case, to the Lien granted to the lenders thereunder.
5.12 Payments in U.S. Legal Tender
All payments of any Obligations to be made hereunder or under the
Note by the Company or any other obligor with respect thereto shall be made
solely in U.S. Legal Tender.
5.13 Register
The Company hereby designate the Agent to serve as the Company's
agent, solely for purposes of this Section 5.11, to maintain a register (the
"Register") on which it will record the portion of the Senior Loan made by each
Lender and the repayment in respect of the principal amount of such portion of
the Senior Loan. Failure to make any such recordation, or any error in such
recordation, shall not affect the Company's obligations in respect of the Senior
Loan. The transfer of the Senior Loan Commitments of Lender and the rights to
the principal of, and interest on, the Senior Loan made pursuant to the Senior
Loan Commitments shall not be effective until such transfer is recorded on the
Register maintained by the Agent with respect to ownership of the Senior Loan
Commitment and the Senior Loan and prior to such recordation all amounts owing
to the transferor with respect to such Senior Loan Commitments and Senior Loan
shall remain owing to the transferor. The registration of assignment or transfer
of all or part of the Senior Loan Commitment and the Senior Loan shall be
recorded by the Agent on the Register only upon the receipt by the Agent of a
properly executed and delivered assignment and assumption agreement pursuant to
Section 10.2A. Coincident with the delivery of such an assignment and assumption
agreement to the Agent for acceptance and registration of assignment or transfer
of all or part of the Senior Loan, or as soon thereafter as practicable, each
Lender shall surrender the Note(s) evidencing the Senior Loan, and thereupon a
new Note(s) of the same type and in the same aggregate principal amount shall be
issued to the assigning or transferor Lender and/or each new Lender. The Company
and each Guarantor shall be entitled to rely on the Register as to the identity
and address of each Lender and shall have no obligation hereunder with respect
to any Person not identified as a Lender in the Register.
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5.14 City Shares
The Company shall cause the Capital Stock of City to be fully paid
and non-assessable within 15 days of the date hereof.
SECTION 6 NEGATIVE COVENANTS
The Company covenants and agrees that until the satisfaction in full
of the Senior Loan and the Note and all other Obligations due under this
Agreement it will fully and timely perform all covenants in this Section 6.
6.1 Indebtedness
Incurrence of Additional Indebtedness. The Company shall not, and
shall not cause or permit any of its Subsidiaries, directly or indirectly, to
Incur, or remain or become directly or indirectly liable with respect to, any
Indebtedness, except for the following ("Permitted Indebtedness"):
(i) the Company and the Guarantor may Incur and remain liable with
respect to the Obligations, the Notes and the Guarantee;
(ii) the Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations permitted by Section 6.5 and, upon
any matured obligations actually arising pursuant thereto, the
Indebtedness corresponding to the Contingent Obligations so extinguished;
(iii) subject to the proviso contained in Section 6.1(xii) below, the
Company and its Subsidiaries may remain liable with respect to
Indebtedness in respect of Capital Leases;
(iv) the Company and its Subsidiaries may Incur and remain liable
with respect to Intercompany Indebtedness;
(v) the Company and its Subsidiaries may remain or become liable with
respect to the Indebtedness that is existing on, or may arise pursuant to
any agreement existing on the Closing Date, as described on Schedule H;
(vi) the Company and its Subsidiaries may Incur and remain liable
with respect to Permitted Refinancing Indebtedness;
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(vii) subject to the proviso contained in Section 6.1(xii) below, the
Company and its Subsidiaries may Incur and remain liable with respect to
Indebtedness Incurred to finance (a) the purchase price of equipment,
fixtures and any other similar property or the remodeling or other
improvement costs of any facility of the Company or any of its
Subsidiaries or (b) the purchase price of any Real Property Assets;
(viii) the Company may Incur Indebtedness under the CoreStates
Facility in an aggregate amount not to exceed $200,000,000, which amount
may be increased with the consent of the Agent (less the amount of any
prepayments to the extent the commitments thereunder are permanently
reduced);
(ix) [Intentionally omitted]
(x) the Company and its Subsidiaries may become and may remain liable
with respect to obligations consisting of any Interest Rate Agreement,
Currency Agreement, interest rate cap agreement, repurchase agreement,
futures contract or other financial agreement designated to protect the
respective entity against fluctuations in interest rates;
(xi) the Company may remain liable with respect to payment
obligations under the Yield Maintenance Agreement relating to the 1996-3
Certificate;
(xii) the Company and its Subsidiaries may become and remain liable
with respect to other Indebtedness; provided that the aggregate amount of
Indebtedness Incurred under Sections 6.1(iii), 6.1(vii) and this Section
6.1(xii) shall not exceed (i) $12,000,000 with respect to Indebtedness
Incurred in the United States and (ii) 7,500,000 Pounds Sterling with
respect to Indebtedness incurred in the United Kingdom, at any one time
outstanding;
(xiii) City may Incur Indebtedness under the U.K. Overdraft Facility
in an amount not to exceed 250,000 Pounds Sterling at any one time
outstanding;
(xiv) the Company may become or remain liable with respect to the
obligation to reimburse Parent for advances to the Company of proceeds of
the issuance and sale by
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Parent of its 6% Convertible Subordinated Debentures due 2006;
(xv) the Company may Incur Indebtedness under the New Bank of Boston
Revolver in an amount not to exceed $5,000,000 (less the amount of any
prepayments to the extent the commitments thereunder are permanently
reduced); and
(xvi) a Subsidiary of the Company which becomes a Guarantor pursuant
to Section 6.18 hereof may guarantee Indebtedness of the Company under the
CoreStates Facility, provided such guarantee shall rank pari passu with
such Subsidiary's Guarantee hereunder.
In addition to the foregoing, at any time after the Closing Date, if
no Potential Event of Default or Event of Default shall have occurred and be
continuing at the time of or as a consequence of the incurrence of any such
Indebtedness, the Company or the Guarantor may Incur Indebtedness if the Net
Leverage Ratio for the Company's most recently ended fiscal quarter for which
internal financial statements are available immediately preceding the time at
which such additional Indebtedness is Incurred would have been not greater than
2.50 to 1, determined on a pro forma basis in accordance with GAAP to give
effect to the incurrence of such additional Indebtedness and (if applicable) the
application of the net proceeds therefrom (including, without limitation, to
refinance other Indebtedness and/or consummate the Company's or any of the
Company's Subsidiaries' acquisition of any Person or operating assets), as if
such additional Indebtedness had been Incurred and any such refinancing and/or
acquisition had occurred at the beginning of such four-quarter period.
Notwithstanding the foregoing, the Company shall not permit City or
any of the direct or indirect Subsidiaries of City to Incur Indebtedness other
than Indebtedness under the U.K. Greenwich Facility or any Permitted Refinancing
Indebtedness with respect thereto and Indebtedness permitted to be Incurred
under Section 6.1(iii), 6.1(xii) and 6.1(xiii).
6.2 Liens; Collateral Coverage
(a) Except as provided in clause (b) below, the Company shall not,
and shall not cause or permit any of its Subsidiaries to, directly or
indirectly, create, incur, assume or permit to exist any Lien on or with respect
to any property or
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asset (including any document or instrument in respect of goods or accounts
receivable) of the Company or of any of its Subsidiaries, whether now owned or
hereafter acquired, or assign or otherwise convey any right to receive any
income or profits therefrom, or file or permit the filing of, or permit to
remain in effect, any financing statement or other similar notice of any Lien
with respect to any such property, asset, income or profits under the Uniform
Commercial Code of any State or under any similar recording or notice statute,
except:
(i) Liens under and in respect of the Senior Loan Documents;
(ii) Permitted Encumbrances;
(iii) Liens on (a) Real Property Assets or (b) equipment, fixtures
and other similar property of the Company and any of its Subsidiaries, in
each case securing Indebtedness described in Sections 6.1(iii) and
6.1(vii); provided that such Liens shall extend only to the equipment,
fixtures, and other similar property so financed (and improvements or
attachments thereto) and the proceeds thereof;
(iv) the replacement, extension or renewal of any Lien permitted by
this Section 6.2 upon or in the same property subject to such Lien and as
security for the same obligations or any refinancings thereof to the
extent such refinancings are permitted under Section 6.1; provided that
such Lien does not extend to or cover any property other than the property
covered by such Lien immediately prior to such replacement, extension or
renewal of such Lien (and improvements or attachments thereto) and the
principal of the obligations secured thereby is not increased;
(v) Liens securing Indebtedness permitted under Sections 6.1(viii),
6.1(x) and 6.1(xi);
(vi) Liens Incurred in accordance with Section 6.2(b);
(vii) additional Liens other than on the Collateral securing
Indebtedness of the Company and its Subsidiaries incurred under Section
6.1(xii) at any one time outstanding not exceeding the amounts permitted
under Section 6.1(xii);
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(viii) Liens securing Designated Obligations (as defined inthe U.S.
Greenwich Facility) up to the Performance Assurance Amount; and
(ix) Permitted Collateral Encumbrances Incurred pursuant to Section
6.2(b).
(b) In addition to the foregoing, if no Potential Event of Default
or Event of Default shall have occurred and be continuing at the time of or as a
consequence of the Incurrence of any such Lien, the Borrowers and the Guarantor
may Incur Liens, including Permitted Collateral Encumbrances, if the Company's
Collateral Coverage Ratio is at least 2.0 to 1 after giving effect to the
Incurrence of such Lien.
(c) Notwithstanding the foregoing, the Company shall not, and shall
not cause or permit any of its Subsidiaries to, directly or indirectly, create,
incur, assume or permit to exist any Lien or pledge of the capital stock or
other evidence of ownership interests of City or any direct or indirect
Subsidiary of City, other than the Lien granted to the Lenders hereunder.
6.3 Restricted Payments
(a) The Company shall not, and shall not cause or permit any of its
Subsidiaries to, directly or indirectly, (a) declare or pay any dividend, or
make any distribution, on any Capital Stock of the Company (other than dividends
or distributions payable solely in Qualified Capital Stock of the Company), (b)
purchase, redeem or otherwise acquire or retire for value any of the Company's
Capital Stock, or any warrants, rights or options to acquire shares of any class
of such Capital Stock or (c) make any principal payment on, purchase, defease,
redeem, prepay, or otherwise acquire or retire for value, other than any
scheduled final maturity, scheduled repayment or scheduled sinking fund payment,
any Subordinated Indebtedness of the Company (any such dividend, distribution,
purchase, redemption, acquisition, retirement, defeasance or prepayment set
forth in clauses (a), (b) and (c) above a "Restricted Payment").
(b) Notwithstanding the foregoing, if no Potential Event of Default
or Event of Default shall have occurred and be continuing or shall be caused as
a consequence thereof, the provisions set forth in the immediately preceding
paragraph will not prevent (1) the acquisition of any shares of Capital
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Stock of the Company or the repurchase, redemption or other repayment of any
Subordinated Indebtedness of the Company in exchange for or solely out of the
proceeds of the substantially concurrent sale (other than to the Company or a
Subsidiary of the Company) of shares of Qualified Capital Stock of the Company,
(2) the repurchase, redemption or other repayment of any Subordinated
Indebtedness of the Company in exchange for or solely out of the proceeds of the
substantially concurrent sale (other than to the Company or a Subsidiary of the
Company) of Subordinated Indebtedness of the Company with a Weighted Average
Life to Maturity equal to or greater than the then remaining Weighted Average
Life to Maturity of the Subordinated Indebtedness repurchased, redeemed or
repaid, (3) if Parent is the borrower under the New Bank of Boston Revolver,
payments to Parent by the Company to satisfy interest and principal payment
obligations, but only to the extent the Indebtedness incurred by Parent
thereunder was contributed to the Borrower, (4) the payment of dividends to the
Parent solely for the purpose of enabling Parent to pay the ordinary operating
and administrative expenses of the Parent in connection with its complying with
its reporting obligations and obligations to prepare and distribute business
records in the ordinary course of business and the Parent's costs and expenses
relating to taxes (which taxes are attributable to the operations of the Company
and its Subsidiaries or to the Parent's ownership thereof); and (5) the payment
of dividends to the Parent solely for the purpose of enabling the Parent to pay
taxes other than income taxes not attributable to the Borrower or any of its
Subsidiaries, to the extent actually owed and attributable to the operations of
the Company and its Subsidiaries or to the Parent's ownership thereof.
6.4 Investments
The Company shall not, and shall not cause or permit any of its
Subsidiaries to, directly or indirectly, make or own any Investment (other than
Permitted Investments) in any Person, except:
(i) the Company and its Subsidiaries may continue to own the
Investments owned by them as of the Closing Date in any Subsidiaries of
the Company and described on Schedule B;
(ii) the Company and its Subsidiaries may continue to own the
Investments owned by them and described on Schedule D;
▇▇
-▇▇-
(▇▇▇) the Company and its Subsidiaries may accept promissory notes
received in consideration of, or the deferral of a portion of the sales
price accepted with respect to, any Asset Sale permitted under Section
6.14; and
(iv) the Company and its Subsidiaries may make and own Investments
received in connection with the bankruptcy of suppliers and customers or
received pursuant to a plan of reorganization of any supplier or customer,
in each case in settlement of delinquent obligations or disputes with such
suppliers or customers.
6.5 Contingent Obligations
The Company shall not, and shall not cause or permit any of its
Subsidiaries to, directly or indirectly, create or become or remain liable with
respect to any Contingent Obligation, except:
(i) the Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations outstanding on the Closing Date
described in Schedule H;
(ii) the Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations in respect of customary
indemnification and purchase price adjustment obligations incurred in
connection with acquisitions of assets or stock, Asset Sales or other
sales of assets; provided that the maximum assumable liability in respect
of all such obligations with respect to such asset sales and other sales
shall at no time exceed the gross proceeds actually received by the
Company and its Subsidiaries in connection with such Asset Sales and other
sales;
(iii) the Company and its Subsidiaries may become and remain liable
with respect to guarantees of Indebtedness or Contingent Obligations of a
Wholly-Owned Subsidiary of the Company and a Subsidiary of the Company may
become and remain liable with respect to guarantees of Indebtedness or
Contingent Obligations of the Company or a Wholly-Owned Subsidiary of the
Company;
(iv) the Company may become and remain liable with respect to
Contingent Obligations under the Yield Maintenance Agreement relating to
the 1996-3 Certificate and
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with respect to Contingent Yield Maintenance Obligations; and
(v) a Subsidiary of the Company which becomes a Guarantor pursuant
to Section 6.18 hereof may guarantee Indebtedness of the Company under the
CoreStates Facility, provided such guarantee shall rank pari passu with
such Subsidiary's Guarantee hereunder.
6.6 Restriction on Fundamental Changes
Subject to Section 5.2 and other than the sale of 100% of a
Subsidiary of the Company in accordance with Section 2.4A(ii)(a) and Section
6.13, the Company shall not, and shall not cause or permit any of its
Subsidiaries to, directly or indirectly, enter into any transaction, or series
of related transactions, of merger, amalgamation, consolidation or combination,
or consolidate, or liquidate, windup or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease, sublease, transfer or
otherwise dispose of, in one transaction or in a series of transactions, all or
substantially all of its business, property or assets, whether now owned or
hereafter acquired, except that any Subsidiary of the Company may be merged,
amalgamated, consolidated or combined with or into the Company or any
Wholly-Owned Subsidiary of the Company or be liquidated, wound up or dissolved,
or all or substantially all of its business, property or assets may be conveyed,
sold, leased, transferred or otherwise disposed of, in one transaction or in a
series of transactions, to the Company or to any Wholly-Owned Subsidiary of the
Company; provided that (A) no Potential Event of Default or Event of Default
shall have occurred and be continuing or would result therefrom, (B) in the case
of such a merger, amalgamation, consolidation or combination of the Company and
a Subsidiary of the Company, the Company shall be the continuing or surviving
corporation, and (C) the Company (I) continues to be bound as such under this
Agreement and (II) executes and delivers to the Agent immediately upon
consummation of such transaction a written confirmation or acknowledgment to
such effect, in form and substance satisfactory to the Agent, together with
evidence of appropriate corporate power, authority and action and a written
legal opinion in form and substance satisfactory to the Agent to the effect that
this Agreement continues to be a legal, valid and binding obligation of the
Company, enforceable against such entity in accordance with its terms (subject
to customary exceptions in respect of bankruptcy, insolvency and
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other equitable remedies) and with respect to such other matters as the Agent
may reasonably request.
6.7 Limitation on Dividend and Other Payment
Restrictions Affecting Subsidiaries
Except as set forth on Schedule I, or otherwise contemplated by this
Agreement or the Pledge Agreement, the Company shall not, and shall not cause or
permit any of its Subsidiaries to, directly or indirectly, create or otherwise
cause or permit or suffer to exist or become effective any encumbrance or
restriction on the ability of any Subsidiary of the Company to (a) pay dividends
or make any other distributions on its Capital Stock or any other interest or
participation in, or measured by, such Subsidiary's profits; (b) make loans or
advances or pay any Indebtedness or other obligation owed to the Company or to
any Subsidiary of the Company; or (c) transfer any of its property or assets to
the Company or to any Subsidiary of the Company (any such restriction or
encumbrance a "Payment Restriction"), except for such encumbrances or
restrictions existing under or by reason of: (1) any restrictions contained in
(i) the Senior Loan Documents to the extent Incurred in accordance with this
Agreement or (ii) secured Indebtedness otherwise permitted to be incurred
pursuant to Sections 6.1 and 6.2 that limits the right of the debtor to dispose
of the assets securing such Indebtedness; (2) customary non-assignment
provisions of any lease governing a leasehold interest of any Subsidiary of the
Company; (3) customary net worth provisions contained in leases and other
agreements entered into by a Subsidiary in the ordinary course of business; (4)
customary restrictions with respect to a Subsidiary pursuant to an agreement
that has been entered into for the sale or disposition of all or substantially
all of the Capital Stock or assets of such Subsidiary; (5) applicable law; and
(6) any instrument that Refinances any Indebtedness effecting any such
encumbrance or restriction pursuant to clause (1) above; provided that the
provisions relating to any such encumbrance or restriction in any such
instrument are not materially less favorable to the Company or its Subsidiaries
or the Lender than those contained in the agreements referred to in clause (1).
6.8 Transactions with Shareholders and Affiliates
(a) The Company shall not, and shall not cause or permit any of its
Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction or series of
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related transactions (including, without limitation, the purchase, sale, lease
or exchange of any property or the rendering of any service) with, or for the
benefit of, any Affiliate of the Company (each such transaction, an "Affiliate
Transaction") or of any such holder other than (x) Affiliate Transactions
permitted under paragraph (b) below and (y) Affiliate Transactions on terms that
are no less favorable than those that might reasonably have been obtained in a
comparable transaction at such time on an arm's-length basis from a Person that
is not an Affiliate of the Company or such Subsidiary. All Affiliate
Transactions (and each series of related Affiliate Transactions that are similar
or part of a common plan) involving aggregate payments or other property with a
fair market value in excess of $1,000,000 and less than $2,500,000 shall be
approved by the Board of Directors of the Company or such Subsidiary, as the
case may be, such approval to be evidenced by a Board Resolution stating that
such Board of Directors has determined that such transaction complies with the
foregoing provisions. If the Company or any Subsidiary of the Company enters
into an Affiliate Transaction (or a series of related Affiliate Transactions
related to a common plan) other than any Permitted Affiliate Transactions that
involve an aggregate fair market value of more than $2,500,000, the Company or
such Subsidiary, as the case may be, shall, prior to the consummation thereof,
obtain a favorable opinion as to the fairness of such transaction or series of
related transactions to the Company or the relevant Subsidiary, as the case may
be, from a financial point of view, from an Independent Financial Advisor and
file the same with the Agent.
(b) The foregoing restriction shall not apply to the following
"Permitted Affiliate Transactions": (i) any transaction exclusively between the
Company and any of its Wholly-Owned Subsidiaries or exclusively between any of
the Company's Wholly-Owned Subsidiaries to the extent any are consistent with
past practice and are otherwise in compliance with all of the terms of this
Agreement, (ii) reasonable and customary fees paid to members of the Board of
Directors of the Company and of its Subsidiaries and (iii) reasonable and
customary fees and compensation paid to, and indemnity provided on behalf of,
officers, directors or employees of the Company or any of its Subsidiaries, as
determined by the Board of Directors of the Company or any such Subsidiary or
the senior management thereof in good faith, including, without limitation,
issuances of stock, payment of bonuses and other transactions pursuant to
employment or compensation agreements, stock option agreements,
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indemnification agreements and other arrangements in effect on the Closing Date
or substantially similar thereto.
6.9 Subsidiary Stock
Except for any sale of 100% of the Capital Stock or other equity
securities of any of the Company's Subsidiaries in compliance with the
provisions of Section 6.7, the Company will not, and will not permit any of its
Subsidiaries to directly or indirectly sell, assign, pledge or otherwise
encumber or dispose of any shares of Capital Stock or other equity securities of
any of its Subsidiaries, except (i) to qualify directors if required by
applicable law, (ii) to the Company or to a Wholly-Owned Subsidiary of the
Company, (iii) Asset Sales made in compliance with this Agreement or (iv) as
otherwise permitted by this Agreement or the Pledge Agreement.
6.10 Business Activities
The Company shall not, and shall not cause or permit any of its
Subsidiaries to, directly or indirectly, materially alter the nature of the
consolidated business of the Company and its Subsidiaries from that in existence
immediately after giving effect to the Transactions or similar or related
businesses.
6.11 Amendments to Charter Documents
The Company shall not, and shall not cause or permit any of its
Subsidiaries to, amend its certificate of incorporation or bylaws in any respect
that is reasonably likely to have a material adverse effect on the interests of
any Lender.
6.12 Refinancing of the Senior Loan in Part
The Company shall not, and shall not cause or permit any of its
Subsidiaries to, Incur any Indebtedness to Refinance the Senior Loan in part,
unless the terms, conditions, covenants, events of default and other provisions
in respect of the instruments evidencing the Indebtedness Incurred to Refinance
the Senior Loan in part shall have been approved in writing by the Agent prior
to the Incurrence of any such Indebtedness.
6.13 Asset Sales
The Company shall not, and shall not cause or permit any of its
Subsidiaries to, directly or indirectly, consummate
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any Asset Sale unless (1) the Company or such Subsidiary, as the case may be,
receives consideration therefor at the time thereof at least equal to the fair
market value at the time of such Asset Sale of the property, assets or stock
that is the subject of such Asset Sale, (2) at least 85% of the consideration
received therefor by the Company or such Subsidiary is in the form of cash or
Cash Equivalents and (3) all of the Net Cash Proceeds in respect thereof are
applied by the Company or a Subsidiary of the Company in accordance
with Section 2.4A(ii)(a); provided, that the Company may sell or encumber
securitized Receivables, residual certificates or the Capital Stock of an SPC
without complying with Section 2.4A(ii)(a)hereof if, after giving effect to
each such sale or encumbrance, the Company shall have a Consolidated Collateral
Coverage Ratio of at least 2 to 1.
Nothing in this covenant shall be deemed to prevent the exercise of
remedies by secured creditors of the Company or any Subsidiary of the Company.
6.14 Transfer of Assets to Subsidiaries
The Company shall not, and shall not cause or permit any of its
Subsidiaries to, directly or indirectly, transfer (other than in the ordinary
course of business and other than pursuant to a Permitted Investment) any assets
or property to any Subsidiary of the Company unless such Subsidiary pays fair
market value therefor to the Company or to a Wholly-Owned Subsidiary of the
Company. For purposes of this Section 6.14, the fair market value paid by such
Subsidiary shall not consist in whole or in part of any securities or debt
instruments of such Subsidiary or of any Affiliate of such Subsidiary.
6.15 No Further Negative Pledges
Except with respect to prohibitions against other encumbrances on
specific property encumbered to secure payment of particular Indebtedness and
except as set forth in this Agreement, none of the Company or its Subsidiaries
shall enter into any agreement after the date hereof other than pursuant to the
CoreStates Facility prohibiting the creation or assumption of any Lien upon
their respective properties or assets, whether now owned or hereafter acquired.
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6.16 Security Interests
The Company shall, and shall cause each of its Subsidiaries to, duly
and punctually perform any and all acts and, at its expense, will promptly
execute or cause to be executed any and all further instruments and documents
and take such action as the Required Lenders deem necessary or desirable in
obtaining the full benefits of this Agreement, the Pledge Agreement and of each
other Loan Document and of the rights and powers herein and therein granted as
may, in the reasonable judgment of the Required Lenders, be necessary or
desirable in order to grant and maintain in favor of the Lenders a valid and
perfected security interest in the Collateral with such priorities and subject
to such terms as provided in the Pledge Agreement, subject to no other Liens
except as may be expressly permitted under Section 6.2 and as contemplated
hereby.
6.17 Impairment of Security Interest
Neither the Company nor any of its Subsidiaries will take or omit to
take any action which action or omission would have the result of adversely
affecting or impairing the security interest in favor of the Lenders with
respect to the Collateral pursuant to this Agreement or the Pledge Agreement,
and neither the Company nor any of its Subsidiaries shall grant to any Person,
or suffer any Person (other than the Company or its Subsidiaries) to have (other
than to the Lenders) any interest whatsoever in the Collateral except as
otherwise permitted by this Agreement. Neither the Company nor any of its
Subsidiaries will enter into any agreement or instrument that by its terms
requires the proceeds received from any sale of Collateral to be applied to
repay, redeem, defease or otherwise acquire or retire any Indebtedness of any
Person, other than pursuant to this Agreement and the Note.
6.18 Additional Guarantees
Other than with respect to any SPC now existing or hereinafter
organized, if the Company or any of its Subsidiaries transfers or causes to be
transferred, in one transaction or a series of related transactions, any
property to any domestic Subsidiary that is not a guarantor of the Note, or if
the Company or any of its Subsidiaries shall organize, acquire or otherwise
invest in another domestic Subsidiary having total assets with a book value in
excess of $500,000, then such transferee or acquired or other domestic
Subsidiary shall execute and deliver to the Agent a Guarantee in form reasonably
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satisfactory to the Agent pursuant to which such Subsidiary shall
unconditionally guarantee all of the Borrower's Obligations under the Senior
Loan Documents and the Note on the terms set forth herein. Thereafter, such
Subsidiary shall be a Guarantor for all purposes of this Agreement.
SECTION 7 EVENTS OF DEFAULT
If any of the following conditions or events ("Events of Default")
shall occur and be continuing:
7.1 Failure To Make Payments When Due
Failure to pay any installment of principal of or interest on the
Senior Loan when due, whether at stated maturity, by acceleration, by notice of
prepayment or otherwise; or
7.2 Default in Other Agreements
(A) Failure of the Company or any of its Subsidiaries to pay
principal or interest on one or more issues of Indebtedness or Contingent
Obligations of such Borrower or of any of its Subsidiaries (other than
Indebtedness referred to in Section 7.1) or (B) breach or default by any
Borrower or any of its Subsidiaries with respect to any other term of any one or
more issues of Indebtedness or Contingent Obligations of such Borrower or of any
of its Subsidiaries or any agreement or instrument evidencing or securing such
Indebtedness or Contingent Obligations and such breach or default results in the
acceleration of that Indebtedness or Contingent Obligation prior to its stated
maturity and, in any case, the principal amount of such Indebtedness or
Contingent Obligation and all other such Indebtedness or Contingent Obligations
of the Company and its Subsidiaries in respect of which there is such a failure
to pay principal or interest or which has been so accelerated equals $5,000,000
or more; or
7.3 Breach of Certain Covenants
Failure of the Company to perform or comply with any covenant, term
or condition contained in Section 2.4A(ii), 2.4A(iv), 3.1Q or 5.2; or
7.4 Breach of Warranty
Any representation, warranty or certification made by the Company or
any Subsidiary in any Loan Document or in any
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statement or certificate at any time given by any Loan Party in writing pursuant
hereto or thereto or in connection herewith or therewith shall be false or
incorrect in any material respect on the date as of which made or deemed made;
or
7.5 Other Defaults Under the Agreement
or Senior Loan Documents
The Company or any Guarantor shall default in the performance of or
compliance with any covenant, term or condition contained in this Agreement or
the other Senior Loan Documents (other than those covered by Section 7.1, 7.3 or
7.4) and such default shall not have been remedied or waived in accordance with
this Agreement within 30 days after the date of written notice from the holder
or holders of not less than 25% in aggregate principal amount of the Senior Loan
then outstanding of such default; or
7.6 Involuntary Bankruptcy; Appointment
of Custodian, Etc.
A court of competent jurisdiction enters a Bankruptcy Order under
any Bankruptcy Law that:
(A) is for relief against the Company or any Material Subsidiary in
an involuntary case or proceeding, or
(B) appoints a Custodian of the Company or any Material Subsidiary
for all or substantially all of its properties, or
(C) orders the liquidation of the Company or any Material
Subsidiary, and in each case the order or decree remains unstayed and in
effect for 60 days.
7.7 Voluntary Bankruptcy; Appointment
of Custodian, Etc.
The Company or any Material Subsidiary pursuant to or within the
meaning of any Bankruptcy Law:
(A) commences a voluntary case or proceeding, or
(B) consents to the entry of a Bankruptcy Order for relief against
it in an involuntary case or proceeding, or
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(C) consents to the appointment of a Custodian of it or for all or
substantially all of its property, or
(D) makes a general assignment for the benefit of its creditors or
files a proposal or scheme of arrangement involving the rescheduling or
composition of its indebtedness, or
(E) consents to the filing of a petition in bankruptcy against it,
or
(F) shall generally not pay its debts when such debts become due or
shall admit in writing its inability to pay its debts generally.
7.8 Judgments and Attachments
Any money judgment, writ or warrant of attachment, or similar
process involving in any individual case or in the aggregate at any time an
amount in excess of $5,000,000 (to the extent not covered by third-party
insurance as to which the insurance company has acknowledged coverage) shall be
entered or filed against the Company or any of its Subsidiaries or any of their
respective properties or assets and shall remain undischarged, unvacated,
unbonded or unstayed for a period of 60 days or in any event later than five
days prior to the date of any proposed sale thereunder; or
7.9 Dissolution
Any order, judgment or decree shall be entered against the Company
or any Material Subsidiary decreeing the dissolution or split-up of the Company,
that Material Subsidiary and such order shall remain undischarged or unstayed
for a period in excess of 30 days; or
7.10 Guarantee
(i) Any Guarantee or any provision thereof shall cease to be in full
force or effect (other than in accordance with its express terms), or (ii) the
Guarantor or any Person acting by or on behalf of the Guarantor shall deny or
disaffirm the Guarantor's obligations under its Guarantee, or (iii) the
Guarantor shall default in the due performance or observance of any term,
covenant or agreement on its part to be performed or observed, after giving
effect to any applicable grace periods, pursuant to its Guarantee; or
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7.11 Collateral Document Default
(a) Any representation or warranty made by the Borrower or any
Subsidiary of the Borrower in the Pledge Agreement or in any certificate or
report furnished by the Borrower thereunder proves to be untrue in any material
respect on the date as of which made;
(b) The Borrower or any of its Subsidiaries shall not have complied
in any material respect with the provisions of the Pledge Agreement and any
applicable grace period with respect thereto shall have expired;
(c) The Pledge Agreement (together with any other security document
delivered or to be delivered thereunder) after delivery thereof shall for any
reason fail to create or cease to maintain a valid and duly perfected security
interest in the Collateral until such Collateral is released in accordance with
the terms of the Pledge Agreement;
(d) The Collateral shall become subject to a pledge not permitted
under this Agreement and the Pledge Agreement on the Collateral or any Person
takes any action to foreclose on such Collateral or takes any action
inconsistent with the security interest held by the Lenders that could have a
material adverse effect on the validity or requisite priority of such pledge; or
(e) The enforceability of the Lender's security interest in any
Collateral shall be contested by the Company or any of its Subsidiaries.
THEN (i) upon the occurrence of any Event of Default described in
the foregoing Sections 7.6 or 7.7, all of the unpaid principal amount of and
accrued interest on the Senior Loan and all other outstanding Obligations shall
automatically become immediately due and payable, without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by the Borrower, and the commitments of the Lenders hereunder shall
thereupon terminate, and (ii) upon the occurrence of any other Event of Default,
the Agent shall, upon written notice of the holder or holders of a majority in
aggregate principal amount of the Senior Loan then outstanding, by written
notice to the Borrower declare all of the unpaid principal amount of and accrued
interest on the Senior Loan and all other outstanding Obligations to be, and the
same shall forthwith become, due and payable, and the
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obligations of the Lenders hereunder shall thereupon terminate; provided that if
any declaration of acceleration under this Agreement occurs solely because an
Event of Default set forth in Section 7.2 has occurred and is continuing, such
declaration of acceleration shall be automatically annulled if the holders of
the Indebtedness that is the subject of such Event of Default have rescinded
their declaration of acceleration in respect of such Indebtedness within thirty
days of such acceleration of such Indebtedness and the Agent has received
written notice thereof within such time and if no other Event of Default has
occurred during such thirty-day period that has not been cured or waived in
accordance with this Agreement. Nevertheless, if at any time after acceleration
of the maturity of the Senior Loan, the Borrowers shall pay all arrears of
interest and all payments on account of the principal thereof that shall have
become due otherwise than by acceleration (with interest on principal and, to
the extent permitted by law, on overdue interest, at the rates specified in this
Agreement or the Notes) and all Events of Default and Potential Events of
Default (other than non-payment of principal of and accrued interest on the
Senior Loan and the Note due and payable solely by virtue of acceleration) shall
be remedied or waived pursuant to Section 9.6, then the Agent shall, upon
written notice of the holders of a majority in aggregate principal amount of the
Senior Loans then outstanding, by written notice to the Borrower rescind and
annul the acceleration and its consequences; but such action shall not affect
any subsequent Event of Default or Potential Event of Default or impair any
right consequent thereon.
SECTION 8 THE AGENT
8.1 Appointment
The Lenders hereby irrevocably designate and appoint CIBC as Agent
of the Lenders to act as specified herein and in the other Senior Loan
Documents, and the Lenders hereby irrevocably authorize CIBC as the Agent to
take such action on its behalf under the provisions of this Agreement and the
other Senior Loan Documents and to exercise such powers and perform such duties
as are expressly delegated to the Agent by the terms of this Agreement and the
other Senior Loan Documents, together with such other powers as are reasonably
incidental thereto. The Agent agrees to act as such upon the express conditions
contained in this Section 8. Notwithstanding any provision to the contrary
elsewhere in this Agreement or in any other Loan Document, the Agent shall not
have any duties or
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responsibilities, except those expressly set forth herein or in the other Senior
Loan Documents, or any fiduciary relationship with any Agent, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or otherwise exist against the Agent. The provisions
of this Section 8 are solely for the benefit of the Agent and the Lenders, and
the Borrower shall not have any rights as a third party beneficiary of any of
the provisions hereof. In performing its functions and duties under this
Agreement, the Agent shall act solely as agent of the Lenders and the Lenders do
not assume and shall not be deemed to have assumed any obligation or
relationship of agent or trust with or for the Borrower.
8.2 Delegation of Duties
The Agent may execute any of its duties under this Agreement or any
other Loan Document by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties.
The Agent shall not be responsible for the negligence or misconduct of any
agents or attorneys-in-fact selected by it with reasonable care except to the
extent otherwise required by Section 8.3.
8.3 Exculpatory Provisions
Neither the Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates shall be (i) liable for any action
lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement or the other Senior Loan Documents (except for
its or such Person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to the Lenders for any recitals, statements,
representations or warranties made by any Loan Party or any of their respective
officers contained in this Agreement, any other Senior Loan Documents, or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agent under or in connection with, this Agreement or any
other Loan Document or for any failure of any Loan Party or any of their
respective officers to perform its obligations hereunder or thereunder. The
Agent shall not be under any obligation to the Lenders to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement or the other Senior Loan Documents, or to
inspect the properties, books or records of the Loan Parties. The Agent shall
not be responsible to the Lenders for the effectiveness, genuineness,
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validity, enforceability, collectability or sufficiency of this Agreement or any
other Loan Document or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral statement or in
any financial or other statements, instruments, reports, certificates or any
other documents in connection herewith or therewith furnished or made by the
Agent to the Lenders or by or on behalf of any Loan Party to the Agent or the
Lenders or be required to ascertain or inquire as to the performance or
observance of any of the terms, conditions, provisions, covenants or agreements
contained herein or therein or as to the use of the proceeds of the Senior Loan
or of the existence or possible existence of any Potential Event of Default or
Event of Default.
8.4 Reliance by Agent
The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, facsimile, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons, and upon the reasonable advice and statements of legal counsel
(including, without limitation, counsel to the Company or any of its
Subsidiaries), independent accountants and other experts selected by the Agent.
The Agent shall be fully justified in failing or refusing to take any action
under this Agreement or any other Loan Document unless it shall first receive
such advice or concurrence of the Required Lenders as it deems appropriate or it
shall first be indemnified to its satisfaction by the Lenders against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. As between the Agent and the Lenders, the
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement and the other Senior Loan Documents in accordance
with a request of the Required Lenders, and such request and any action taken or
failure to act pursuant thereto shall be binding upon the Lenders.
8.5 Notice of Default
The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Potential Event of Default or Event of Default hereunder
unless the Agent has actually received notice from a Lender or the Company
referring to this
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Agreement, describing such Potential Event of Default or Event of Default and
stating that such notice is a "notice of default." In the event that the Agent
receives such a notice, the Agent shall give prompt notice thereof to each
Lender. The Agent shall take such action with respect to such Potential Event of
Default or Event of Default as shall be reasonably directed by the Required
Lenders; provided that, as between the Agent and the Lender unless and until the
Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Potential Event of Default or Event of Default as it shall deem
advisable in the best interests of the Lenders.
8.6 Non-Reliance on Agent and Other Agents
The Agent expressly acknowledges that neither the Agent nor any of
its respective officers, directors, employees, agents, attorneys-in-fact or
affiliates have made any representations or warranties to it and that no act by
the Agent hereinafter taken, including any review of the affairs of the
Borrowers and their Subsidiaries, shall be deemed to constitute any
representation or warranty by the Agent to the Lenders. The Lenders represent to
the Agent that they have, independently and without reliance upon the Agent, and
based on such documents and information as they have deemed appropriate, made
their own appraisal of and investigation into the business, assets, operations,
property, financial and other condition, prospects and creditworthiness of the
Borrowers and made their own decision to make the Senior Loan and enter into
this Agreement. The Lenders also represent that they will, independently and
without reliance upon the Agent or any Lender, and based on such documents and
information as they shall deem appropriate at the time, continue to make their
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement, and to make such investigation as they deem necessary to
inform themselves as to the business, assets, operations, property, financial
and other condition, prospects and creditworthiness of the Loan Parties. The
Agent shall not have any duty or responsibility to provide the Lenders with any
credit or other information concerning the business, operations, assets,
property, financial and other condition, prospects or creditworthiness of the
Borrower that may come into the possession of any Lender or any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates.
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8.7 Indemnification
The Lenders, jointly and severally, agree to indemnify the Agent in
its capacity as such ratably according to their respective "percentages" as used
in determining the Required Lenders at such time, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, reasonable expenses or disbursements of any kind whatsoever which may at
any time (including, without limitation, at any time following the payment in
full of the Obligations) be imposed on, incurred by or asserted against the
Agent in its capacity as such in any way relating to or arising out of this
Agreement or any other Loan Document, or any documents contemplated by or
referred to herein or the transactions contemplated hereby of any action taken
or omitted to be taken by the Agent under or in connection with any of the
foregoing, but only to the extent that any of the foregoing is not paid by a
Loan Party; provided that the Lenders shall not be liable to the Agent for the
payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
solely from the gross negligence or willful misconduct of the Agent. If any
indemnity furnished to the Agent for any purpose shall, in the opinion of the
Agent be insufficient or become impaired, the Agent may call for additional
indemnity and cease, or not commence, to do the acts indemnified against until
such additional indemnity is furnished. The agreements in this Section 8.7 shall
survive the payment in full of all Obligations.
8.8 Agent in Its Individual Capacity
The Agent and its affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower as though the
Agent were not the Agent hereunder. With respect to the Senior Loans made by it
and all Obligations owing to it, the Agent shall have the same rights and powers
under this Agreement as the Lenders and may exercise the same as though it were
not the Agent and the terms "Lender" and "Lenders" shall include the Agent in
its individual capacity.
8.9 Resignation and Removal of the Agent; Successor
Agent
The Agent may resign as the Agent upon 20 days' notice to the
Lenders and the Borrower and may be removed for
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its malfeasance by the vote of the Required Lenders. Upon the resignation or
removal of the Agent, the Required Lenders shall appoint a successor Agent that
is a bank or a trust company for the Lenders subject to prior approval by the
Borrower (such approval not to be unreasonably withheld or delayed), whereupon
such successor agent shall succeed to the rights, powers and duties of the
Agent, and the term "Agent" shall include such successor agent effective upon
its appointment, and the resigning or removed Agent's, as the case may be,
rights, powers and duties as the Agent shall be terminated, without any other or
further act or deed on the part of such former Agent or any of the parties to
this Agreement. After the resignation or removal of the Agent hereunder, the
provisions of this Section 8 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this Agreement.
SECTION 9 GUARANTEE
9.1 Unconditional Guarantee
Each Guarantor hereby unconditionally, jointly and severally,
guarantees (such guarantee to be referred to herein as the "Guarantee"), to each
of the Lenders and to the Agent and their respective successors and assigns,
that: (i) the principal of and interest on the Senior Loans will be promptly
paid in full when due, subject to any applicable grace period, whether at
maturity, by acceleration or otherwise and interest on the overdue principal, if
any, and interest on any interest, to the extent lawful, of the Senior Loans and
all other obligations of the Borrower to the Lenders or the Agent hereunder or
thereunder will be promptly paid in full or performed, all in accordance with
the terms hereof and thereof; and (ii) in case of any extension of time of
payment or renewal of any of the Senior Loans or of any such other obligations,
the same will be promptly paid in full when due or performed in accordance with
the terms of the extension or renewal, subject to any applicable grace period,
whether at stated maturity, by acceleration or otherwise. Each Guarantor hereby
agrees that its obligations hereunder shall be unconditional, irrespective of
the validity, regularity or enforceability of the Senior Loans or this
Agreement, the absence of any action to enforce the same, any waiver or consent
by any of the Lenders with respect to any provisions hereof or thereof, the
recovery of any judgment against the Borrower, any action to enforce the same or
any other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a Guarantor (other than a
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defense of payment or performance). Each Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of any Borrower, any right to require a proceeding
first against the Company, protest, notice and all demands whatsoever and
covenants that this Guarantee will not be discharged except by complete
performance of the obligations contained in the Loans, this Agreement and in
this Guarantee. If any Lender or the Agent is required by any court or otherwise
to return to any Borrower, any Guarantor, or any custodian, trustee, liquidator
or other similar official acting in relation to the Borrower or any Guarantor,
any amount paid by the Borrower or any Guarantor to the Agent or such Lender,
this Guarantee, to the extent theretofore discharged, shall be reinstated in
full force and effect. Each Guarantor further agrees that, as between each
Guarantor, on the one hand, and the Lenders and the Agent, on the other hand,
(x) the maturity of the obligations guaranteed hereby may be accelerated as
provided in Section 7 for the purposes of this Guarantee, notwithstanding any
stay, injunction or other prohibition preventing such acceleration in respect of
the obligations guaranteed hereby, and (y) in the event of any acceleration of
such obligations as provided in Section 7, such obligations (whether or not due
and payable) shall forthwith become due and payable by each Guarantor for the
purpose of this Guarantee.
9.2 Severability
In case any provision of this Guarantee shall be invalid, illegal or
unenforceable, the validity, legality, and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
9.3 Release of a Guarantor
Upon (i) the sale or disposition (whether by merger, stock purchase,
asset sale or otherwise) of a Guarantor (or all or substantially all its assets)
to an entity which is not a Subsidiary of the Company and which sale or
disposition is otherwise in compliance with the terms of this Agreement, such
Guarantor shall be deemed released from all obligations under this Section 10
without any further action required on the part of the Agent or any Lender;
provided, however, that any such termination shall occur only to the extent that
all obligations of such Guarantor under all of its guarantees of, and under all
of its pledges of assets or other security interests which
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secure, such Indebtedness of any Borrower shall also terminate upon such
release, sale or transfer.
The Agent shall deliver an appropriate instrument evidencing such
release upon receipt of a request by the Borrowers accompanied by an Officers'
Certificate certifying as to the compliance with this Section 9.3. Any Guarantor
not so released remains liable for the full amount of principal of and interest
on the Loans as provided in this Section 9.
9.4 Limitation of Guarantor's Liability
Each Guarantor and by its acceptance hereof each of the Lenders
hereby confirms that it is the intention of all such parties that the guarantee
by such Guarantor pursuant to its Guarantee not constitute a fraudulent transfer
or conveyance for purposes of any Bankruptcy Law, the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar Federal or
state law. To effectuate the foregoing intention, the Lenders and such Guarantor
hereby irrevocably agree that the obligations of such Guarantor under the
Guarantee shall be limited to the maximum amount as will, after giving effect to
all other contingent and fixed liabilities of such Guarantor (including, but not
limited to, the Guarantor Senior Indebtedness of such Guarantor) and after
giving effect to any collections from or payments made by or on behalf of any
other Guarantor in respect of the obligations of such other Guarantor under its
Guarantee or pursuant to Section 9.6, result in the obligations of such
Guarantor under the Guarantee not constituting such fraudulent transfer or
conveyance.
9.5 Guarantors May Consolidate,
Etc., on Certain Terms
(a) Except as set forth in Section 6.7, nothing contained in this
Agreement or in the Senior Loans shall prevent any consolidation or merger of a
Guarantor with or into the Borrower or another Guarantor or shall prevent any
sale or conveyance of the property of a Guarantor as an entirety or
substantially as an entirety, to any Borrower or another Guarantor. Upon any
such consolidation, merger, sale or conveyance, the Guarantee given by such
Guarantor shall no longer have any force or effect.
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9.6 Contribution
In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, inter se, that in the event any payment or
distribution is made by any Guarantor (a "Funding Guarantor") under its
Guarantee, such Funding Guarantor shall be entitled to a contribution from all
other Guarantors in a pro rata amount based on the Adjusted Net Assets of each
Guarantor (including the Funding Guarantor) for all payments, damages and
expenses incurred by that Funding Guarantor in discharging the Borrowers'
obligations with respect to the Obligations. "Adjusted Net Assets" of such
Guarantor at any date shall mean the lesser of (x) the amount by which the fair
value of the property of such Guarantor exceeds the total amount of liabilities,
including, without limitation, contingent liabilities (after giving effect to
all other fixed and contingent liabilities incurred or assumed on such date
(other than liabilities of such Guarantor under Subordinated Indebtedness)), but
excluding liabilities under the Guarantee, of such Guarantor at such date and
(y) the amount by which the present fair salable value of the assets of such
Guarantor at such date exceeds the amount that will be required to pay the
probable liabilities of such Guarantor on its debts including, without
limitation, Guarantor Senior Indebtedness (after giving effect to all other
fixed and contingent liabilities incurred or assumed on such date and after
giving effect to any collection from any Subsidiary of such Guarantor in respect
of the obligations of such Subsidiary under the Guarantee), excluding debt in
respect of the Guarantee of such Guarantor, as they become absolute and matured.
9.7 Waiver of Subrogation
Each Guarantor hereby irrevocably waives any claim or other rights
which it may now or hereafter acquire against any Borrower that arise from the
existence, payment, performance or enforcement of such Guarantor's obligations
under its Guarantee and this Agreement prior to the payment in full to the
Lenders of the Senior Loans and all other obligations of the Borrower to the
Lenders, including, without limitation, any right of subrogation, reimbursement,
exoneration, indemnification, and any right to participate in any claim or
remedy of any Lender against the Borrower, whether or not such claim, remedy or
right arises in equity, or under contract, statute or common law, including,
without limitation, the right to take or receive from the Borrower, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or
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security on account of such claim or other rights. If any amount shall be paid
to any Guarantor in violation of the preceding sentence and the Loans shall not
have been paid in full, such amount shall be deemed to have been paid to such
Guarantor for the benefit of, and held in trust for the benefit of, the Lenders,
and shall, subject to the provisions of Section 8, forthwith be paid to the
Agent for the benefit of such Lenders to be credited and applied upon the Senior
Loans, whether matured or unmatured, in accordance with the terms of this
Agreement. Each Guarantor acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated by this Agreement and that
the waiver set forth in this Section 9.7 is knowingly made in contemplation of
such benefits.
9.8 Evidence of Guarantee
To evidence their guarantees to the Lenders set forth in this
Section 9, each of the Guarantors hereby agrees to execute the notation of
Guarantee in substantially the form included in Exhibit VI. Each such notation
of Guarantee shall be signed on behalf of each Guarantor by two Officers, or an
Officer and an Assistant Secretary or one Officer shall sign and one Officer or
an Assistant Secretary (each of whom shall, in each case, have been duly
authorized by all requisite corporate actions) shall attest to such notation of
Guarantee.
9.9 Waiver of Stay, Extension or Usury Laws
Each Guarantor covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury law or other law that would prohibit or forgive such Guarantor from
performing its Guarantee as contemplated herein, wherever enacted, now or at any
time hereafter in force, or which may affect the covenants or the performance of
this Agreement; and (to the extent that it may lawfully do so) each Guarantor
hereby expressly waives all benefit or advantage of any such law, and covenants
that it will not hinder, delay or impede the execution of any power herein
granted to the Agent, but will suffer and permit the execution of every such
power as though no such law had been enacted.
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SECTION 10 MISCELLANEOUS
10.1 Representation of the Lender
The Lenders hereby represent that they are commercial lenders that
make loans in the ordinary course of their business and that they will make the
Senior Loan hereunder for their own account or the account of their affiliates
in the ordinary course of such business.
10.2 Participations in and Assignments or
Syndication of the Senior Loan and Note
A. The Lenders shall have the right at any time to participate out,
sell, assign or syndicate all or any portion of a Note held by any of them or
the Senior Loan Commitment in an aggregate amount of not less than $2,500,000 to
any Eligible Assignee other than to an Eligible Assignee that has, or has an
affiliate trust that has, a principal line of business similar to any principal
line of business of the Borrower. In the case of any sale, transfer or
negotiation of all or part of the Note or the Senior Loan Commitment authorized
under this Section 10.2A, the assignee, transferee or recipient shall become a
party to this Agreement as a Lender by execution of an assignment and assumption
agreement; provided that (i) at such time Section 2.1A shall be deemed modified
to reflect the Senior Loan Commitment of such new Lender and of any existing
Lenders, (ii) upon surrender of the Note(s), new Note(s) will be issued, at the
Borrower's expense, to such new Lender and to the assigning Lender, such new
Note(s) to be in conformity with the requirements of Section 2.1D (with
appropriate modifications) to the extent needed to reflect the revised Senior
Loan Commitment, and (iii) the Agent shall receive at the time of each such
assignment other than in connection with any initial assignment, from the
assigning or assignee Lender, the payment of a non-refundable assignment fee of
$2,500; and provided, further, that such transfer or assignment will not be
effective until recorded by the Agent on the Register pursuant to Section 5.11.
To the extent of any assignment pursuant to this Section 10.2A, the assigning
Lender shall be relieved of its obligations hereunder with respect to its
assigned Senior Loan Commitment, and the assignee, transferee or recipient shall
have, to the extent of such sale, assignment, transfer or negotiation, the same
rights, benefits and obligations as it would if it were a Lender with respect to
such Note(s) or Senior Loan Commitment, including, without limitation, the right
to approve or disapprove actions that, in accordance with the terms
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hereof, require the approval of the Lender. At the time of each assignment
pursuant to this Section 10.2A to an Eligible Assignee that is not already a
Lender hereunder and that is not a United States Person (as such term is defined
in Section 7701(a)(30) of the Internal Revenue Code) for federal income tax
purposes, the respective Eligible Assignee shall provide to the Borrower and the
Agent the appropriate Internal Revenue Service Forms (and, if applicable, a
Section 10.2E(ii) Certificate) described in Section 10.2E.
B. The Lenders may grant participations in all or any part of the
Note(s) or the Senior Loan Commitment in an aggregate amount of not less than
$2,500,000 to any Eligible Assignee, other than to an Eligible Assignee that
has, or has an Affiliate that has, a principal line of business similar to any
principal line of business of the Borrower.
C. The Company shall, at its own cost and expense, provide such
certificates and acknowledgments in respect of this Agreement and the Senior
Loan as any Lender may reasonably require in connection with any participation,
transfer or assignment pursuant to this Section 10.2.
D. Nothing in this Agreement shall prevent or prohibit a Lender from
pledging its Senior Loan and any Note hereunder to a Federal Reserve Bank in
support of borrowings made by such Lender from such Federal Reserve Bank.
E. Each Lender that is an assignee or transferee of an interest
under this Agreement pursuant to Section 10.2A (unless the respective Lender was
already a Lender hereunder immediately prior to such assignment or transfer) and
that is not a United States Person (as such term is defined in Section
7701(a)(30) of the Internal Revenue Code) agrees to deliver to the Company and
the Agent, on the date of such assignment or transfer to such Lender, (i) two
accurate and complete original signed copies of Internal Revenue Service Form
4224 or 1001 (or successor forms) certifying to such Lender's entitlement to a
complete exemption from United States withholding tax with respect to payments
to be made under this Agreement and under any Note, or (ii) if the Lender is not
a "bank" within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code
and cannot deliver either Internal Revenue Service Form 1001 or 4224 pursuant to
clause (i) above, two accurate and complete original signed copies of Internal
Revenue Service Form W-8 (or successor form) certifying to such Lender's
entitlement to a complete exemption from United States withholding tax with
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respect to payments of interest to be made under this Agreement and under any
Note. In addition, such Lender agrees that, when a lapse in time or change in
circumstances renders the previous certification obsolete or inaccurate in any
material respect, it will deliver to the Borrower and the Agent two new accurate
and complete original signed copies of Internal Revenue Service Form 4224 or
1001, or Form W-8, as the case may be, and such other forms as may be required
in order to confirm or establish the entitlement of the Lender to a continued
exemption from or reduction in United States withholding tax with respect to
payments under this Agreement and any Note, or it shall immediately notify the
Borrower and the Agent of its inability to deliver any such Form or Certificate.
Subject to Section 10.2A and the immediately succeeding sentence, the Borrower
shall be entitled, to the extent they are required to do so by law, to deduct or
withhold income or similar taxes imposed by the United States (or any political
subdivision or taxing authority thereof or therein) from interest, fees or other
amounts payable hereunder or made on any other Loan Document for the account of
any Lender that is not a United States Person (as such term is defined in
Section 7701(a)(30) of the Internal Revenue Code) for U.S. Federal income tax
purposes to the extent that the Lender has not provided to the Borrower U.S.
Internal Revenue Service Forms that establish a complete exemption from such
deduction or withholding. Notwithstanding anything to the contrary contained in
the preceding sentence or elsewhere in this Section 10.2E and except as set
forth in Section 10.2A, the Borrower agrees to pay additional amounts and to
indemnify and hold harmless the Lender (without regard to the identity of the
jurisdiction requiring the deduction or withholding), and reimburse the Lender
upon its written request, in respect of any amounts deducted or withheld by any
of them as described in the immediately preceding sentence in respect of
payments to such Lender solely as a result of any changes after the date of any
assignment or transfer in any applicable law, treaty, governmental rule,
regulation, guideline or order, or in the interpretation thereof, relating to
the deducting or withholding of income or similar Taxes.
10.3 Expenses
Whether or not the transactions contemplated hereby shall be
consummated, the Borrower agrees to promptly pay (i) all the actual and
reasonable direct out-of-pocket costs and expenses of preparation of the Senior
Loan Documents and all the costs of furnishing all opinions by counsel for the
Borrower (including without limitation any opinions requested
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by the Lenders as to any legal matters arising hereunder), and of the Borrower's
performance of and compliance with all agreements and conditions contained
herein on its part to be performed or complied with; (ii) the reasonable fees,
expenses and disbursements of special counsel to the Agent in connection with
the negotiation, preparation, execution and administration of the Senior Loan
Documents and the Senior Loan hereunder, and any amendments, modifications and
waivers hereto or thereto and consents to departures from the terms hereof and
thereof; and (iii) after the occurrence of an Event of Default, all direct out
of pocket costs and expenses (including actual reasonable attorneys fees,
including allocated costs of internal counsel, and costs of settlement) incurred
by the Lenders or the Agent in enforcing any Obligations of or in collecting any
payments due from the Borrowers or under the Note by reason of such Event of
Default or in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a "work-out" or of
any insolvency or bankruptcy proceedings. The Agent agrees to deliver to the
Company, as soon as reasonably practicable, a certificate setting forth in
reasonable detail a computation of amounts arising under this Section 10.3.
10.4 Indemnity
In addition to the payment of expenses pursuant to Section 10.3,
whether or not the transactions contemplated hereby shall be consummated, the
Borrower agrees to indemnify, pay and hold each of the Agent, the Lenders and
any holder of any of the Notes, and each of their respective officers,
directors, partners, employees, agents, representatives and control persons
(collectively called the "Indemnitees"), harmless from and against any and all
other liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, claims, costs, expenses and disbursements of any kind or nature
whatsoever (including, without limitation, the reasonable fees and disbursements
of one counsel for such Indemnitees in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether or not
such Indemnitee shall be designated as a party thereto), that may be suffered
by, imposed on, incurred by, or asserted against that Indemnitee, in any manner
resulting from, connected with, in respect of, relating to or arising out of
this Agreement, the other Senior Loan Documents, the Lenders' agreements to make
the Senior Loan or the use or intended use of any of the proceeds of the Senior
Loan hereunder (the "Indemnified Liabilities"); provided that the Company shall
have no obligation to an Indemnitee hereunder
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with respect to Indemnified Liabilities (i) to the extent such liabilities are
finally judicially determined to have resulted primarily from (A) the gross
negligence or willful misconduct of that Indemnitee or (B) the failure of such
Indemnitee to perform its obligations under any Loan Document or (C) such
Indemnitee's violation of law or (ii) in connection with the obligations of any
Indemnitee under any Loan Document or for any transfer fees or (iii) legal
proceedings commenced against the Agent or any Lender or their respective
officers, directors, partners, employees, agents, representatives or control
persons by any security holder or creditor thereof arising out of and based upon
rights afforded such security holder or creditor solely in its capacity as such
or (iv) legal proceeding commenced against the Agent or any Lender by any
transferee. The Borrower shall not be liable to any Indemnitee for any
settlement of any claim pursuant to this Section 10.4 that is effected without
the Borrower's prior written consent, which shall not be unreasonably withheld
or delayed. To the extent that the undertaking to indemnify, pay and hold
harmless set forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, the Borrower shall contribute the maximum
portion that it is permitted to pay and satisfy under applicable law to the
payment and satisfaction of all Indemnified Liabilities incurred by the
Indemnitees or any of them.
10.5 Setoff
In addition to any rights now or hereafter granted under applicable
law and not by way of limitation of any such rights, upon the occurrence and
during the continuance of any Event of Default, the Lenders, the Agent and any
subsequent holder of any Note is hereby authorized by the Borrower at any time
or from time to time, without notice to the Borrower, or to any other Person,
any such notice being hereby expressly waived, to set off and to appropriate and
to apply any and all deposits (general or special, including, but not limited
to, Indebtedness evidenced by certificates of deposit, whether matured or
unmatured but not including trust accounts or any other accounts held for the
benefit of another Person) and any other Indebtedness at any time held or owing
by such Lender, the Agent or any such subsequent holder to or for the credit or
the account of the Borrower against and on account of the obligations and
liabilities of the Borrower to such Lender, the Agent or such subsequent holder
under this Agreement and the Note(s), including, but not limited to, all claims
of any nature or description arising out of or connected with this
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Agreement or any Note, irrespective of whether or not (a) such Lender, the Agent
or such subsequent holder shall have made any demand hereunder or (b) such
Lender, the Agent or such subsequent holder shall have declared the principal of
or the interest on its portion of the Senior Loan and its Note(s) and other
amounts due hereunder to be due and payable as permitted by Section 7 and
although said obligations and liabilities, or any of them, may be contingent or
unmatured.
10.6 Amendments and Waivers
No amendment, modification, termination or waiver of any term or
provision of this Agreement, of the Notes or of the Pledge Agreement shall in
any event be effective without the prior written concurrence of the Borrower and
the Required Lenders; provided that, notwithstanding the third sentence of
Section 10.15, without the prior written consent of each Lender affected, an
amendment, modification, termination or waiver of this Agreement, any Note, the
Pledge Agreement or consent to departure from a term or provision hereof or
thereof may not: (i) reduce the principal amount of Notes whose holders must
consent to any such amendment, modification, termination, waiver or consent;
(ii) reduce the rate of or extend the time for payment of principal or interest
on any Note; (iii) reduce the principal amount of any Note; (iv) make any Note
payable in money other than that stated in the Note; (v) make any change in
Section 2.4A(iv) or in the definition of Change of Control, in the last
paragraph of Section 7 or in Section 10.6; (vi) reduce the rate or extend the
time of payment of fees or other compensation payable to any Lender hereunder;
or (vii) waive performance by the Borrower of its obligations under, or consent
to any departure from any of the terms and provisions of, Section 2.4A(iv); and
provided, further, that without the consent of the Agent, no such amendment,
modification, termination or waiver may amend, modify, terminate or waive any
provision of Section 8 as the same applies to the Agent or any other provision
of this Agreement as it relates to the rights or obligations of the Agent. Any
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given. No notice to or demand on the Borrower
in any case shall entitle any Borrower to any further notice or demand in
similar or other circumstances. Any amendment, modification, termination, waiver
or consent effected in accordance with this Section 10.6 shall be binding upon
each holder of the Note at the time outstanding, each further holder of the Note
and, if signed by the Borrower, on the Borrower.
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10.7 Independence of Covenants
All covenants hereunder shall be given independent effect so that if
a particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or be otherwise within the
limitation of, another covenant shall not avoid the occurrence of an Event of
Default or Potential Event of Default if such action is taken or condition
exists.
10.8 Entirety
The Senior Loan Documents embody the entire agreement of the parties
and supersede all prior agreements and understandings, if any, relating to the
subject matter hereof and thereof.
10.9 Notices
Unless otherwise provided herein, any notice or other communications
herein required or permitted to be given shall be in writing and may be
personally served, telecopied, telexed or sent by mail and shall be deemed to
have been given when delivered in person, upon receipt of telecopy or telex
against receipt of answer back or four Business Days after depositing it in the
mail, registered or certified, with postage prepaid and properly addressed;
provided that notices shall not be effective until received. For the purposes
hereof, the addresses of the parties hereto (until notice of a change thereof is
delivered as provided in this Section 10.9) shall be set forth under each
party's name on the signature pages hereto.
10.10 Survival of Warranties and Certain Agreements
A. All agreements, representations and warranties made herein shall
survive the execution and delivery of this Agreement, the making of the Senior
Loan hereunder and the execution and delivery of the Note and, notwithstanding
the making of the Senior Loan, the execution and delivery of the Note or any
investigation made by or on behalf of any party, shall continue in full force
and effect. The closing of the transactions herein contemplated shall not
prejudice any right of one party against any other party in respect of anything
done or omitted hereunder or in respect of any right to damages or other
remedies.
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B. Notwithstanding anything in this Agreement or implied by law to
the contrary, the agreements set forth in Sections 10.3, 10.4, 10.14, 10.15,
10.17, 10.19, 10.21, 10.22, 10.23 and 10.24 shall survive the payment of the
Senior Loan and the Note or Notes, as the case may be, and the termination of
this Agreement.
10.11 Failure or Indulgence Not Waiver;
Remedies Cumulative
No failure or delay on the part of the Agent or any holder of any
Note in the exercise of any power, right or privilege hereunder or under the
Note shall impair such power, right or privilege or be construed to be a waiver
of any default or acquiescence therein, nor shall any single or partial exercise
of any such power, right or privilege preclude other or further exercise thereof
or of any other right, power or privilege. All rights and remedies existing
under this Agreement or the Note are cumulative to and not exclusive of any
rights or remedies otherwise available.
10.12 Severability
In case any provision in or obligation under this Agreement or the
Note shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
10.13 Headings
Section and Section headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
10.14 Applicable Law
THIS AGREEMENT AND THE NOTE SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW.
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10.15 Successors and Assigns; Subsequent
Holders of Notes
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of the Lender. The terms and provisions of
this Agreement shall inure to the benefit of any assignee or transferee of the
Note pursuant to Section 10.2A, and in the event of such transfer or assignment,
the rights and privileges herein conferred upon the Lender shall automatically
extend to and be vested in such transferee or assignee, all subject to the terms
and conditions hereof. Except as provided in Section 10.6, in determining
whether the holders of a sufficient aggregate principal amount of the Senior
Loan shall have consented to any action under this Agreement, any amount of the
Senior Loans owned or held by the Borrower or any of its respective Affiliates
shall be disregarded. The Company's rights or any interest therein hereunder may
not be assigned without the prior express written consent of the Lender.
10.16 Counterparts; Effectiveness
This Agreement and any amendments, waivers, consents or supplements
may be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same instrument. This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto, and delivery
thereof to the Agent or, in the case of the Lenders, written telex or facsimile
notice or telephonic notification (confirmed in writing) of such execution and
delivery. The Agent will give the Borrowers and the Lenders prompt notice of the
effectiveness of this Agreement.
10.17 Consent to Jurisdiction; Venue;
Waiver of Jury Trial
A. Any legal action or proceeding with respect to this Agreement or
the Note may be brought in the courts of the State of New York or of the United
States for the Southern District of New York, and, by execution and delivery of
this Agreement, each of the parties to this Agreement hereby irrevocably accepts
for itself and in respect of its respective property, generally and
unconditionally, the jurisdiction of the aforesaid courts. Each of the parties
to this Agreement hereby
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further irrevocably waives any claim that any such courts lack jurisdiction over
such party, and agrees not to plead or claim, in any legal action or proceeding
with respect to this Agreement or the Note brought in any of the aforesaid
courts, that any such court lacks jurisdiction over such party. Each of the
parties to this Agreement irrevocably consents to the service of process in any
such action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to such party, at its respective address for
notices pursuant to Section 10.9, such service to become effective 30 days after
such mailing. To the extent permitted by law, each of the parties to this
Agreement hereby irrevocably waives any objection to such service of process and
further irrevocably waives and agrees not to plead or claim in any action or
proceeding commenced hereunder or under the Note that service of process so
served was in any way invalid or ineffective. Nothing herein shall affect the
right of any party to this Agreement to serve process in any other manner
permitted by law or to commence legal proceedings or otherwise proceed against
any party in any other jurisdiction.
B. Each of the parties to this Agreement hereby irrevocably waives
any objection that it may now or hereafter have to the laying of venue of any of
the aforesaid actions or proceedings arising out of or in connection with this
Agreement or the Note brought in the courts referred to in clause A above and
hereby further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.
C. Each of the parties to this Agreement hereby irrevocably waives
all right to a trial by jury in any action, proceeding or counterclaim arising
out of or relating to this Agreement or the Note or the transactions
contemplated hereby or thereby.
10.18 Payments Pro Rata
A. The Agent agrees that promptly after its receipt of each payment
of any interest or premium on or principal of the Notes from or on behalf of the
Company, it shall, except as otherwise provided in this Agreement, distribute
such payment, where applicable, to the Lenders (other than any Lender that has
consented in writing to waive its pro rata share of such payment) pro rata based
upon their respective pro rata shares, if any, of such payment.
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B. Each of the Lenders agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Senior Loan Documents, or
otherwise) that is applicable to the payment of the principal of, or interest
on, the Senior Loan of a sum that with respect to the related sum or sums
received by other Lenders is in a greater proportion than the total of such
Obligation then owed and due to such Lender bears to the total of such
Obligation then owed and due to all of the Lenders immediately prior to such
receipt, then such Lender receiving such excess payment shall purchase for cash
without recourse or warranty from the other Lenders an interest in the
Obligations of the Borrower to such Lenders in such amount as shall result in a
proportional participation by all of the Lenders in such amount; provided that,
if all or any portion of such excess amount is thereafter recovered from such
Lender, such purchase shall be rescinded and the purchase price restored to the
extent of such recovery, but without interest.
10.19 Taxes
A. Any and all payments by the Borrower hereunder or under any of
the other Senior Loan Documents shall be made free and clear of and without
deduction or withholding for any and all present or future Taxes, unless such
Taxes are required by law or the administration thereof to be deducted or
withheld, excluding (i) in the case of each Lender and the Agent, Taxes imposed
on its net income and franchise taxes imposed on it by the jurisdiction under
the laws of which such Person is organized, managed, controlled or doing
business (other than solely as a result of this Agreement) or any political
subdivision of any of them, (ii) in the case of each Lender and the Agent, any
Taxes that are in effect and that would apply to a payment to such Person, as
applicable, as of the Closing Date, (iii) if any Person acquires any interest in
this Agreement (a "Transferee"), any Taxes to the extent that they are in effect
and would apply to a payment to such Transferee as of the date of the
acquisition of such interest, and (iv) any income or similar taxes imposed by
the United States or any political subdivision thereof or therein that are
governed by Section 10.2E (all such nonexcluded Taxes being hereinafter referred
to as "Covered Taxes"). If the Borrower shall be required by law or the
administration thereof to deduct or withhold any Covered Taxes from or in
respect of any sum payable hereunder or under any other Loan Document, (a) the
sum payable shall be increased
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as may be necessary so that after making all required deductions or withholdings
(including deductions or withholdings applicable to additional amounts paid
under this paragraph), the Lender receives an amount equal to the sum it would
have received if no such deduction or withholding had been made; (b) the
Borrower shall make such deductions or withholdings; and (c) the Borrowers
forthwith shall pay the full amount deducted or withheld to the relevant
taxation or other authority in accordance with applicable Law.
B. The Borrower agrees to pay forthwith any present or future stamp
documentary taxes or any other excise or property taxes, charges or similar
levies (all such taxes, charges and levies being herein referred to as "Other
Taxes") imposed by any jurisdiction (or any political subdivision or taxing
authority thereof or therein) that arise from any payment made by the Borrowers
hereunder or under any of the other Senior Loan Documents or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or the
other Senior Loan Documents.
C. The Borrower agrees to indemnify the Agent and the Lenders for
the full amount of Covered Taxes or Other Taxes not deducted or withheld and
paid by the Company in accordance with Sections 10.19A and 10.19B to the
relevant taxation or other authority and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto, whether or not
any such Covered Taxes or Other Taxes were correctly or legally asserted.
Payment under this indemnification shall be made within 30 days from the date
the Agent or the Lender makes written demand therefor. A certificate as to the
amount of such Covered Taxes or Other Taxes and evidence of payment thereof
submitted to the Company shall be prima facie evidence, absent manifest error,
of the amount due from the Borrower to the Lender or such Lender. The Company
shall be entitled to any refund of such Covered Taxes or Other Taxes to the
extent identified hereunder, together with any interest actually accrued
thereon.
D. The Borrower shall furnish to the Agent and the Lenders the
original or a certified copy of a receipt evidencing any payment of Taxes or
Other Taxes made by the Borrower as soon as such receipt becomes available.
E. The provisions of this Section 10.19 shall survive the
termination of the Agreement and repayment of all Obligations.
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F. Each Lender agrees to take such steps as may be reasonably
necessary to avoid any requirement of applicable law that the Borrower makes any
deduction or withholding for Taxes from amounts payable to that Lender under
this Agreement or any other Senior Loan document or to provide for a reduced
rate of taxation or withholding under any applicable tax treaty.
G. Each Lender on the date hereof is a United States Person as such
term is defined in Section 7701(a)(30) of the Internal Revenue Code.
10.20 Waiver of Stay, Extension or Usury Laws
The Borrower covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury law or other law that would prohibit or forgive it from paying all or any
portion of the principal of or interest on the Senior Loan as contemplated
herein, wherever enacted, now or at any time hereafter in force, or that may
affect the covenants or the performance of this Agreement; and (to the extent
that it may lawfully do so) the Borrower hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Agent, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
10.21 Confidentiality
The Lenders shall hold, and shall cause each of their affiliates to
hold, all non-public information obtained pursuant to the requirements of or in
connection with this Agreement in accordance with the Lenders' customary
procedures for handling confidential information of this nature and in
accordance with safe and sound banking practices, it being understood and agreed
by the Borrower that (i) in any event each Lender may make disclosures
reasonably required by any bona fide assignee, transferee or participant in
connection with the contemplated assignment or transfer by such Lender of the
Senior Loan or any participation therein or as required or requested by any
governmental agency or representative thereof or pursuant to legal process;
provided that unless specifically prohibited by applicable law or court order,
each Lender shall notify the Borrower of any request by any governmental agency
or representative thereof (other than any such request in connection with any
examination of the financial condition of the Lender by such
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governmental agency) for disclosure of any such non-public information prior to
disclosure of such information and (ii) each Lender may share with any of its
affiliates, and such affiliates may share with the Lender, any information
related to the Borrower, or the Borrower's affiliates (including information
relating to creditworthiness) the financing therefor; and provided, further,
that in no event shall any Lender be obligated or required to return any
materials furnished by the Borrowers. In connection with any sales, assignments,
participations or transfers referred to in Section 10.2A, the Lender shall
obtain agreements from the purchasers, assignees, participants or transferees,
as the case may be, reasonably satisfactory to the Company, that such parties
will comply with this Section 10.21.
10.22 Judgment Currency
The Borrower agrees to indemnify the Agent and the Lender against
any loss incurred by any of them as a result of any judgment or order being
given or made for any amount due under this Agreement or any other Loan Document
and such judgment or order being expressed and paid in a currency (the "Judgment
Currency") other than United States dollars and as a result of any variation as
between (i) the rate of exchange at which the United States dollar amount is
converted into the Judgment Currency for the purpose of such judgment or order
and (ii) the spot rate of exchange in The City of New York at which any such
person on the date of payment of such judgment or order is able to purchase
United States dollars with the amount of the Judgment Currency actually received
by such person. The foregoing indemnity shall continue in full force and effect
notwithstanding any such judgment or order as aforesaid. The term "spot rate of
exchange" shall include any premiums and costs of exchange payable in connection
with the purchase of, or conversion into, United States dollars.
10.23 Role of Special Counsel
The role of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, special counsel to the Lenders,
has been limited to functioning on the Senior Loan Documents and such firm has
not performed a due diligence investigation with respect to the Company, any of
its Subsidiaries or their respective affairs.
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10.24 Expenses
The Company agrees, whether or not the transactions contemplated
hereby shall be consummated, to pay, and save each Lender harmless against
liability for the payment of, all reasonable out-of-pocket expenses arising in
connection with such transactions, including all reasonable fees and expenses of
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, special counsel to the Lenders, in connection with this
Agreement and the transactions contemplated hereby.
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WITNESS the due execution hereof by the respective duly authorized
officers of the undersigned as of the date first written above.
BORROWER:
CITYSCAPE CORP.
By: /s/ ▇▇▇▇▇▇ ▇. Patent
-------------------------------
Name: ▇▇▇▇▇▇ ▇. Patent
Title: Executive Vice President
Notice Address:
Attention:
Telephone:
Telecopy:
GUARANTOR:
CITYSCAPE FINANCIAL CORP.
By: /s/ ▇▇▇▇▇▇ ▇. Patent
-------------------------------
Name: ▇▇▇▇▇▇ ▇. Patent
Title: Executive Vice President
Notice Address:
Attention:
Telephone:
Telecopy:
116
AGENT:
CIBC WOOD GUNDY SECURITIES CORP.,
as agent
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director
Notice Address:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
Telephone: (212)
Telecopy: (212)
LENDER:
Commitment:
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director
Notice Address:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇