Exhibit 10.1
LOAN AND SECURITY AGREEMENT
by and between
CTC COMMUNICATIONS CORP.
as Borrower,
and
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P. and
FLEET NATIONAL BANK
as Lenders,
and
FLEET NATIONAL BANK
as Agent
and
▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS L.P.
as Arrangement, Structuring & Syndication Agent
Dated as of September 1, 1998
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (this "Agreement"), is entered into as of
September 1, 1998, between and among the financial institutions listed on
the signature pages hereof (such financial institutions, together with
their respective successors and assigns, are referred to hereinafter each
individually as a "Lender" and collectively as the "Lenders"), ▇▇▇▇▇▇▇
▇▇▇▇▇ CREDIT PARTNERS L.P., a Bermuda limited partnership, as an agent for
the Lenders (in such capacity, "Arrangement, Structuring & Syndication
Agent"), with a place of business located at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, FLEET NATIONAL BANK, a national banking association, with
a place of business located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, as an agent for the Lenders (in such capacity, "Agent"), and CTC
COMMUNICATIONS CORP., a Massachusetts corporation ("Borrower"), with its
chief executive office located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
The parties agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
1.1 Definitions.
As used in this Agreement, the following terms shall have the following
definitions:
"Account Debtor" means any Person who is or who may become obligated
under, with respect to, or on account of, an Account, General Intangible,
or Negotiable Collateral.
"Accounts" means all currently existing and hereafter arising accounts,
contract rights, and all other forms of obligations owing to Borrower
arising out of the sale, license, or lease of goods or General Intangibles
or the rendition of services by Borrower, irrespective of whether earned
by performance, and any and all credit insurance, guaranties, or security
therefor.
"Advances" has the meaning set forth in Section 2.1(a).
"Affiliate" means, as applied to any Person, any other Person who,
directly or indirectly, controls, is controlled by, or is under common
control with such Person. For purposes of this definition, "control"
means the possession, directly or indirectly, of the power to vote 5% or
more of the Stock having ordinary voting power for the election of
directors (or comparable managers) or the direct or indirect power to
direct the management and policies of a Person.
"Agent" means Fleet, solely in its capacity as an agent for the Lenders,
and shall include any successor Agent.
"Agent Account" has the meaning set forth in Section 2.9
"Agent's Liens" means the Liens on the Collateral granted by Borrower to
Agent for the benefit of the Lender Group under this Agreement and the
other Loan Documents.
"Agent Priority Collateral" means all Collateral other than the Cisco
Priority Collateral.
"Agent-Related Persons" means Agent and any successor agents together with
their respective Affiliates, and the officers, directors, employees,
counsel, agents, and attorneys-in-fact of such Persons and their
Affiliates.
"Agreement" has the meaning set forth in the preamble hereto.
"Annualized Quarterly Revenues" means the product of four (4) times either
(a) for measurement periods that coincide with the end of a fiscal quarter
of Borrower, the fiscal quarterly revenues of Borrower for that quarter,
or (b) for measurement periods the end of which do not coincide with the
end of a fiscal quarter of Borrower, the prior full fiscal quarter's
revenues plus any revenues thus far accrued in the current fiscal quarter
as of any interim measurement date less the comparable revenues accrued
for the comparable interim measurement period from the previous quarter.
"Applicable Collections Period" means the number of days set forth below
as of any date of determination during the period corresponding thereto:
Period Days
Closing Date through March 31, 1999 120
April 1, 1999 through April 30, 1999 118
May 1, 1999 through May 31, 1999 115
June 1, 1999 through June 30, 1999 113
July 1, 1999 through July 31, 1999 111
August 1, 1999 through August 31, 1999 109
September 1, 1999 through September 30, 1999 106
October 1, 1999 through October 31, 1999 104
November 1, 1999 through November 30, 1999 102
December 1, 1999 through December 31, 1999 100
January 1, 2000 through January 31, 2000 97
February 1, 2000 through February 29, 2000 95
March 1, 2000 through March 31, 2000 93
April 1, 2000 and thereafter 90
"Applicable Prepayment Premium" means (a) from the Closing Date through
February 28, 2000, 2%, and (b) thereafter, 0%; provided, however, that if
Borrower in good faith requests an increase in the maximum Capital
Expenditure covenant contained in Section 7.21, and such request is denied
by the Lender Group, then from the date of such denial through the date
that is 120 days after the date of such denial, the Applicable Prepayment
Premium shall be 0%.
"Arrangement, Structuring and Syndication Agent" means GSCP, solely in its
capacity as an agent for the Lenders, and shall include any successor
Arrangement, Structuring and Syndication Agent.
"Assignee" has the meaning set forth in Section 15.1.
"Assignment and Acceptance" means an Assignment and Acceptance in the form
of Exhibit A-1 attached hereto.
"Authorized Person" means any officer or other employee of Borrower.
"Average Unused Portion of Maximum Revolving Amount" means, as of any date
of determination, (a) the Maximum Revolving Amount, less (b) the sum of
(i) the average Daily Balance of Advances that were outstanding during the
immediately preceding month, plus (ii) the average Daily Balance of the
Letter of Credit Usage during the immediately preceding month.
"Bankruptcy Code" means the United States Bankruptcy Code (11 U.S.C. sec
101 et seq.), as amended, and any successor statute.
"Base Rate" means, as of any date of determination, the variable rate of
interest, per annum, most recently publicly announced by The Chase
Manhattan Bank, or any successor thereto, as its prime lending rate in
effect at its principal office in New York City, irrespective of whether
such announced rate is the best rate available from such financial
institution, and such institution may make loans at rates of interest
above, or below any such announced prime lending rate.
"▇▇▇▇ Atlantic Agreements" means those certain agreements entered into
between Borrower and ▇▇▇▇ Atlantic with respect to the resale of
telecommunications services by Borrower.
"Benefit Plan" means a "defined benefit plan" (as defined in Section 3(35)
of ERISA) for which Borrower, any Subsidiary of Borrower, or any ERISA
Affiliate has been an "employer" (as defined in Section 3(5) of ERISA)
within the past six years.
"Borrower" has the meaning set forth in the preamble to this Agreement.
"Borrower's Books" means all of Borrower's books and records including:
ledgers; records indicating, summarizing, or evidencing Borrower's
properties or assets (including the Collateral) or liabilities; all
information relating to Borrower's business operations or financial
condition; and all computer programs, disk or tape files, printouts, runs,
or other computer prepared information.
"Borrowing" means a borrowing hereunder consisting of Advances made on the
same day by the Lenders, or Agent on behalf thereof, to Borrower.
"Borrowing Base" has the meaning set forth in Section 2.1(a). Anything in
Section 2.1(a) to the contrary notwithstanding, following any acquisition
by Borrower of any Person or business, the approval of Required Lenders
shall be required before any Collections of such acquired Person or
business may be included within the calculation of the Borrowing Base.
"Business Day" means any day that is not a Saturday, Sunday, or other day
on which national banks are authorized or required to close.
"Capital Expenditures" means expenditures made or liabilities incurred for
the acquisition of fixed assets or improvements, replacements,
substitutions, or additions thereto that are required to be accounted for
as capital expenditures under GAAP, including the total principal portion
of Capitalized Lease Obligations.
"Capitalized Lease Obligation" means any Indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP.
"Change of Control" shall be deemed to have occurred at such time as: (a)
a "person" or "group" (within the meaning of Sections 13(d) and 14(d)(2)
of the Exchange Act), other than a Permitted Holder, becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of more than the Threshold Percentage of the total
voting power of all classes of Stock then outstanding entitled to vote in
the election of directors (1) of Borrower prior to the consummation of the
Holding Company Reorganization, or (2) of New Holding Company from and
after consummation of the Holding Company Reorganization, (b) a majority
of members of the board of directors of Borrower shall not be Continuing
Directors; (c) Borrower shall cease to own and control, directly and of
record, 100% of the issued and outstanding capital Stock of each of the
Subsidiaries of Borrower; or (d) from and after consummation of the
Holding Company Reorganization, (1) a majority of members of the board of
directors of New Holding Company shall not be Holding Company Continuing
Directors, or (2) New Holding Company shall cease to own and control,
directly and of record, 100% of the issued and outstanding capital Stock
of Borrower.
"Cisco" means Cisco Systems, Inc. and/or Cisco Systems Capital
Corporation.
"Cisco Financing Documents" shall have the meaning set forth in the
Intercreditor Agreement.
"Cisco Priority Collateral" has the meaning ascribed to such term in the
Intercreditor Agreement.
"Closing Date" means the date of the first to occur of the making of the
initial Advance or the issuance of the initial Letter of Credit.
"Closing Date Business Plan" means the set of Projections of Borrower for
the 3 year period following the Closing Date (on a year by year basis, and
on a quarter by quarter basis), in form and substance (including as to
scope and underlying assumptions) satisfactory to each Lender in its sole
and absolute discretion.
"Code" means the New York Uniform Commercial Code.
"Collateral" means all of Borrower's right, title, and interest in and to
each of the following:
(a) the Accounts,
(b) Borrower's Books,
(c) the Equipment,
(d) the General Intangibles,
(e) the Inventory,
(f) the Investment Property,
(g) the Negotiable Collateral,
(h) any money, or other assets of Borrower that now or
hereafter come into the possession, custody, or control of any member of
the Lender Group, and
(i) the proceeds and products, whether tangible or
intangible, of any of the foregoing, including proceeds of insurance
covering any or all of the Collateral, and any and all Accounts,
Borrower's Books, Equipment, General Intangibles, Inventory, Investment
Property, Negotiable Collateral, Real Property, money, deposit accounts,
or other tangible or intangible property resulting from the sale,
exchange, collection, or other disposition of any of the foregoing, or any
portion thereof or interest therein, and the proceeds thereof.
"Collateral Access Agreement" means a landlord waiver or consent,
mortgagee waiver or consent, bailee letter, or acknowledgement agreement
of any warehouseman, processor, lessor, consignee, or other Person in
possession of, having a Lien upon, or having rights or interests in the
Equipment or Inventory, in each case, in form and substance satisfactory
to Agent.
"Collections" means all cash, checks, notes, instruments, and other items
of payment (including, insurance proceeds, proceeds of cash sales, rental
proceeds, and tax refunds).
"Commitment" means, at any time with respect to a Lender, the principal
amount set forth beside such Lender's name under the heading "Commitment"
on Schedule C-1 attached hereto or on the signature page of the Assignment
and Acceptance pursuant to which such Lender became a Lender hereunder in
accordance with the provisions of Section 15.1, as such Commitment may be
adjusted from time to time in accordance with the provisions of Section
15.1, and "Commitments" means, collectively, the aggregate amount of the
commitments of all of the Lenders.
"Compliance Certificate" means a certificate substantially in the form of
Exhibit C-2 and delivered by the chief accounting officer of Borrower to
Agent.
"Continuing Director" means, as of any date of determination, a member of
the board of directors of Borrower who (a) was a member of the board of
directors of Borrower on the Closing Date, or (b) was nominated to be a
member of the board of directors of Borrower by a majority of the
Continuing Directors then in office to fill a vacancy left by the death,
expiration of term, permanent disability, or resignation of a Continuing
Director.
"Copyright Security Agreement" means that certain Copyright Security
Agreement, in form and substance satisfactory to Agent, to be executed and
delivered by Borrower in favor of Agent, for the benefit of the Lender
Group.
"Daily Balance" means the amount of an Obligation owed at the end of a
given day.
"deems itself insecure" means that Agent (a) believes, in good faith, that
Borrower has committed fraud, made an intentional misrepresentation, is
diverting Collections from the Lockbox Account, or is concealing or
converting any portion of the Collateral, and (b) deems itself insecure
with respect thereto in accordance with the provisions of Section 1208 of
the code.
"Default" means an event, condition, or default that, with the giving of
notice, the passage of time, or both, would be an Event of Default.
"Deposit Account Security Agreement" means a Deposit Account Security
Agreement, in form and substance satisfactory to Agent, by Borrower in
favor of Agent, for the benefit of the Lender Group.
"Designated Account" means account number 0796788396 of Borrower
maintained with Borrower's Designated Account Bank, or such other deposit
account of Borrower (located within the United States) that has been
designated, in writing and from time to time, by Borrower to Agent.
"Designated Account Bank" means Fleet National Bank, whose office is
located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, and whose ABA number
is ▇▇▇▇▇▇▇▇▇.
"Dollars" or "$" means United States dollars.
"Early Termination Premium" has the meaning set forth in Section 3.6.
"EBITDA" means, with respect to any fiscal period, Borrower's net earnings
(or loss) before interest expense, taxes, amortization, and depreciation
for such period, and excluding extraordinary or non-recurring income and
expenses, in each case as determined in accordance with GAAP.
"Eligible Transferee" means: (a) a commercial bank organized under the
laws of the United States, or any state thereof, and having total assets
in excess of $250,000,000; (b) a commercial bank organized under the laws
of any other country which is a member of the Organization for Economic
Cooperation and Development or a political subdivision of any such
country, and having total assets in excess of $250,000,000; provided that
such bank is acting through a branch or agency located in the United
States; (c) a finance company, insurance company or other financial
institution or fund that is engaged in making, purchasing or otherwise
investing in commercial loans in the ordinary course of its business and
having total assets in excess of $250,000,000; (d) any Affiliate (other
than individuals) of a pre-existing Lender; (e) so long as no Event of
Default has occurred and is continuing, any other Person approved by Agent
and Borrower; and (f) during the continuation of an Event of Default, any
other Person approved by Agent.
"Equipment" means all of Borrower's present and hereafter acquired
machinery, machine tools, motors, equipment, furniture, furnishings,
fixtures, vehicles (including motor vehicles and trailers), tools, parts,
goods (other than consumer goods, farm products, or Inventory), wherever
located, including, (a) any interest of Borrower in any of the foregoing,
and (b) all attachments, accessories, accessions, replacements,
substitutions, additions, and improvements to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, 29
U.S.C. sec. 1000 et seq., amendments thereto, successor statutes, and
regulations or guidance promulgated thereunder.
"ERISA Affiliate" means (a) any corporation subject to ERISA whose
employees are treated as employed by the same employer as the employees of
Borrower under IRC Section 414(b), (b) any trade or business subject to
ERISA whose employees are treated as employed by the same employer as the
employees of Borrower under IRC Section 414(c), (c) solely for purposes of
Section 302 of ERISA and Section 412 of the IRC, any organization subject
to ERISA that is a member of an affiliated service group of which Borrower
is a member under IRC Section 414(m), or (d) solely for purposes of
Section 302 of ERISA and Section 412 of the IRC, any party subject to
ERISA that is a party to an arrangement with Borrower and whose employees
are aggregated with the employees of Borrower under IRC Section 414(o).
"ERISA Event" means (a) a Reportable Event with respect to any Benefit
Plan or Multiemployer Plan, (b) the withdrawal of Borrower, any of its
Subsidiaries or ERISA Affiliates from a Benefit Plan during a plan year in
which it was a "substantial employer" (as defined in Section 4001(a)(2) of
ERISA), (c) the providing of notice of intent to terminate a Benefit Plan
in a distress termination (as described in Section 4041(c) of ERISA),
(d) the institution by the PBGC of proceedings to terminate a Benefit Plan
or Multiemployer Plan, (e) any event or condition (i) that provides a
basis under Section 4042(a)(1), (2), or (3) of ERISA for the termination
of, or the appointment of a trustee to administer, any Benefit Plan or
Multiemployer Plan, or (ii) that may result in termination of a
Multiemployer Plan pursuant to Section 4041A of ERISA, (f) the partial or
complete withdrawal within the meaning of Sections 4203 and 4205 of ERISA,
of Borrower, any of its Subsidiaries or ERISA Affiliates from a
Multiemployer Plan, or (g) providing any security to any Plan under
Section 401(a)(29) of the IRC by Borrower or its Subsidiaries or any of
their ERISA Affiliates.
"Event of Default" has the meaning set forth in Section 8.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
any successor statute thereto.
"Existing Lender" means Fleet National Bank, a national banking
association.
"▇▇▇▇▇▇▇▇▇▇▇▇" means ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇.
"▇▇▇▇▇▇▇▇▇▇▇▇ Related Parties" means ▇▇▇▇▇▇▇▇▇▇▇▇, the Family Members of
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ Family Trusts, and any wholly owned Subsidiary
of any combination of the foregoing.
"▇▇▇▇▇▇▇▇▇▇▇▇ Family Trusts" means trusts or other estate planning
vehicles established for the benefit of the Family Members of
▇▇▇▇▇▇▇▇▇▇▇▇.
"Family Member" means, with respect to any individual, any other
individual having a relationship by blood (to the second degree of
consanguinity), marriage, or adoption to such individual.
"FEIN" means Federal Employer Identification Number.
"Fleet" means Fleet National Bank, a national banking association, in its
capacity as a Lender.
"Funding Date" means the date on which a Borrowing occurs.
"Funds Flow Agreement" means an agreement among Borrower and the Lender
Group regarding the extensions of credit to be made on the Closing Date,
and the related flow of funds, the form and substance of which shall be
satisfactory to Agent.
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States, consistently applied.
"General Intangibles" means all of Borrower's present and future general
intangibles and other personal property (including contract rights, rights
arising under common law, statutes, or regulations, choses or things in
action, goodwill, patents, trade names, trademarks, servicemarks,
copyrights, blueprints, drawings, purchase orders, customer lists, monies
due or recoverable from pension funds, route lists, rights to payment and
other rights under any royalty or licensing agreements, infringement
claims, computer programs, information contained on computer disks or
tapes, literature, reports, catalogs, deposit accounts, insurance premium
rebates, tax refunds, and tax refund claims), other than goods, Accounts,
and Negotiable Collateral.
"Governing Documents" means, with respect to any person, the certificate
or articles of incorporation, by-laws, or other organizational or
governing documents of such Person.
"GSCP" means ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P., a Bermuda limited
partnership, in its capacity as a Lender.
"Governmental Authority" shall mean any federal, state, local, or other
governmental or administrative body, instrumentality, department, or
agency or any court, tribunal, administrative hearing body, arbitration
panel, commission, or other similar dispute-resolving panel or body.
"Hazardous Materials" means (a) substances that are defined or listed in,
or otherwise classified pursuant to, any applicable laws or regulations as
"hazardous substances," "hazardous materials," "hazardous wastes," "toxic
substances," or any other formulation intended to define, list, or
classify substances by reason of deleterious properties such as
ignitability, corrosivity, reactivity, carcinogenicity, reproductive
toxicity, or "EP toxicity", (b) oil, petroleum, or petroleum derived
substances, natural gas, natural gas liquids, synthetic gas, drilling
fluids, produced waters, and other wastes associated with the exploration,
development, or production of crude oil, natural gas, or geothermal
resources, (c) any flammable substances or explosives or any radioactive
materials, and (d) asbestos in any form or electrical equipment that
contains any oil or dielectric fluid containing levels of polychlorinated
biphenyls in excess of 50 parts per million.
"Holding Company Continuing Director" means, as of any date of
determination, a member of the board of directors of New Holding Company
who (a) was a member of the board of directors of Borrower on the Closing
Date and is elected to the board of directors of New Holding Company, or
(b) was nominated to be a member of the board of directors of New Holding
Company by a majority of the Holding Company Continuing Directors then in
office to fill a vacancy left by the death, expiration of term, permanent
disability, or resignation of a Holding Company Continuing Director.
"Holding Company Guaranty" means a general continuing guaranty in form and
substance satisfactory to Agent, to be executed and delivered by New
Holding Company to Agent at the time of the Holding Company
Reorganization.
"Holding Company Reorganization" means the reorganization, on terms
reasonably satisfactory to the Lender Group, of Borrower into a holding
company structure in which the New Holding Company owns 100% of the issued
and outstanding stock of Borrower.
"Indebtedness" means: (a) all obligations of Borrower for borrowed money,
(b) all obligations of Borrower evidenced by bonds, debentures, notes, or
other similar instruments and all reimbursement or other obligations of
Borrower in respect of letters of credit, bankers acceptances, interest
rate swaps, or other financial products, (c) all Capitalized Lease
Obligations, (d) all obligations or liabilities of others secured by a
Lien on any property or asset of Borrower, irrespective of whether such
obligation or liability is assumed, and (e) any obligation of Borrower
guaranteeing or intended to guarantee (whether guaranteed, endorsed, co-
made, discounted, or sold with recourse to Borrower) any indebtedness,
lease, dividend, letter of credit, or other obligation of any other
Person.
"Indemnified Liabilities" has the meaning set forth in Section 11.3.
"Indemnified Person" has the meaning set forth in Section 11.3.
"Insolvency Proceeding" means any proceeding commenced by or against any
Person under any provision of the Bankruptcy Code or under any other
bankruptcy or insolvency law, assignments for the benefit of creditors,
formal or informal moratoria, compositions, extensions generally with
creditors, or proceedings seeking reorganization, arrangement, or other
similar relief.
"Intangible Assets" means, with respect to any Person, that portion of the
book value of all of such Person's assets that would be treated as
intangibles under GAAP.
"Intercreditor Agreement" means an Intercreditor Agreement between Agent
(on behalf of the Lender Group) and Cisco in form and substance
satisfactory to each Lender. By entering into the Intercreditor Agreement
on behalf of the Lender Group, Agent shall bind each member of the Lender
Group to the terms thereof.
"Inventory" means all present and future inventory in which Borrower has
any interest, including goods held for sale or lease or to be furnished
under a contract of service and all of Borrower's present and future raw
materials, work in process, finished goods, and packing and shipping
materials, wherever located.
"Investments" means, with respect to any Person, all investments by such
Person in any other Person (including Affiliates) in the form of loans,
guarantees, advances, or capital contributions (excluding (a) commission,
travel, and similar advances to officers and employees of such Person made
in the ordinary course of business, and (b) bona fide accounts receivable
arising from the sale of gods or services in the ordinary course of
business consistent with past practice), purchases or other acquisitions
for consideration of Indebtedness, Stock, or other securities, and any
other items that are or would be classified as investments on a balance
sheet prepared in accordance with GAAP
"Investment Property" means "investment property" as that term is defined
in Section 9-115 of the Code.
"IRC" means the Internal Revenue Code of 1986, as amended, and the
regulations thereunder.
"Legal Requirements" means all applicable international, foreign, federal,
state, and local laws, judgments, decrees, orders, statutes, ordinances,
rules, regulations, or Permits.
"Lender" and "Lenders" have the respective meanings set forth in the
preamble to this Agreement, and shall include any other Person made a
party to this Agreement in accordance with the provisions of Section 15.1
hereof.
"Lender Group" means, individually and collectively, each of the
individual Lenders, Agent, and Arrangement, Structuring and Syndication
Agent.
"Lender Group Expenses" means all: costs or expenses (including taxes,
and insurance premiums) required to be paid by Borrower under any of the
Loan Documents that are paid or incurred by the Lender Group; fees or
charges paid or incurred by the Lender Group in connection with the Lender
Group's transactions with Borrower, including, fees or charges for
photocopying, notarization, couriers and messengers, telecommunication,
public record searches (including tax lien, litigation, and UCC (or
equivalent) searches and including searches with the patent and trademark
office, the copyright office, or the department of motor vehicles),
filing, recording, publication, appraisal (including periodic Collateral
appraisals, and including out-of-pocket appraisal costs and expenses paid
to third party appraisers employed or utilized by Agent to conduct any
such appraisals), costs and expenses incurred by Agent in the disbursement
of funds to Borrower (by wire transfer or otherwise); charges paid or
incurred by Agent resulting from the dishonor of checks; costs and
expenses paid or incurred by the Lender Group to correct any default or
enforce any provision of the Loan Documents, or in gaining possession of,
maintaining, handling, preserving, storing, shipping, selling, preparing
for sale, or advertising to sell the Collateral or the Collateral, or any
portion thereof, irrespective of whether a sale is consummated; costs and
expenses paid or incurred by Agent in examining Borrower's Books or in
performing examinations or audits with respect to the Collateral,
including out-of-pocket costs and expenses paid to third parties employed
or utilized by Agent to conduct such examinations or audits; costs and
expenses of third party claims or any other suit paid or incurred by the
Lender Group in enforcing or defending the Loan Documents or in connection
with the transactions contemplated by the Loan Documents or the Lender
Group's relationship with Borrower (or any of its Subsidiaries party to
one or more Loan Documents); and the Lender Group's reasonable attorneys
fees and expenses incurred in advising, structuring, drafting, reviewing,
administering, amending, terminating, enforcing (including attorneys fees
and expenses incurred in connection with a "workout," a "restructuring,"
or an Insolvency Proceeding concerning Borrower or any guarantor of the
Obligations), defending, or concerning the Loan Documents, irrespective of
whether suit is brought. The foregoing notwithstanding, unless an Event
of Default has occurred and is continuing and all the Obligations are
currently due and payable (either by their terms or following
acceleration), Borrower shall not be responsible for paying the fees,
expenses, or disbursements of more than one set of attorneys for the
Lender Group except that, in connection with the initial closing, Borrower
shall be responsible, in addition to the reasonable fees, expenses, and
disbursements of the attorneys employed by GSCP (consisting of ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, and Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, as
special counsel to GSCP with respect to the Intercreditor Agreement), for
fees, expenses, and disbursements of attorneys employed by Fleet not to
exceed $7,500 in the aggregate.
"Lender-Related Person" means, with respect to any Lender, such Lender,
together with such Lender's Affiliates, and the officers, directors,
managing directors, partners, employees, counsel, agents, and attorneys-
in-fact of such Lender and such Lender's Affiliates.
"Letter of Credit" has the meaning set forth in Section 2.2(a).
"Letter of Credit Usage" means, as of any date of determination, the sum
of (a) the undrawn amount of outstanding Letters of Credit plus (b) the
amount of unreimbursed drawings under Letters of Credit.
"Lien" means any interest in property securing an obligation owed to, or a
claim by, any Person other than the owner of the property, whether such
interest shall be based on the common law, statute, or contract, whether
such interest shall be recorded or perfected, and whether such interest
shall be contingent upon the occurrence of some future event or events or
the existence of some future circumstance or circumstances, including the
lien or security interest arising from a mortgage, deed of trust,
encumbrance, pledge, hypothecation, assignment, deposit arrangement,
security agreement, adverse claim or charge, conditional sale or trust
receipt, or from a lease, consignment, or bailment for security purposes
and also including reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases, and other
title exceptions and encumbrances affecting Real Property.
"Loan" means each related set of Advances made by the Lenders.
"Loan Account" has the meaning set forth in Section 2.12.
"Loan Documents" means this Agreement, the Copyright Security Agreement
(from and after the date that it is executed and delivered), the Deposit
Account Security Agreement, the Funds Flow Agreement, the Letters of
Credit, the Lockbox Agreements, the Stock Pledge Agreement (from and after
the date that it is executed and delivered), the Warrants, the
Intercreditor Agreement, the Holding Company Guaranty (from and after the
date that it is executed and delivered), any note or notes executed by
Borrower and payable to the Lender Group, and any other agreement entered
into, now or in the future, in connection with this Agreement.
"Lockbox Account" shall mean a depositary account established pursuant to
one of the Lockbox Agreements.
"Lockbox Agreements" means those certain Lockbox Operating Procedural
Agreements and those certain Depository Account Agreements, in form and
substance satisfactory to Agent, each of which is among Borrower, Agent,
and one of the Lockbox Banks.
"Lockbox Bank" means Fleet.
"Lockboxes" has the meaning set forth in Section 2.9.
"Material Adverse Change" means (a) a material adverse change in the
business, prospects, operations, results of operations, assets,
liabilities or condition (financial or otherwise) of Borrower, (b) the
material impairment of Borrower's ability to perform its obligations under
the Loan Documents to which it is a party or of the Lender Group to
enforce the Obligations or realize upon the Collateral, (c) a material
adverse effect on the value of the Collateral or the amount that the
Lender Group would be likely to receive (after giving consideration to
delays in payment and costs of enforcement) in the liquidation of such
Collateral, or (d) a material impairment of the priority of Agent's Liens
with respect to the Collateral.
"Maturity Date" has the meaning set forth in Section 3.4.
"Maximum Revolving Amount" means $75,000,000.
"Multiemployer Plan" means a "multiemployer plan" (as defined in Section
4001(a)(3) of ERISA) to which Borrower, any of its Subsidiaries, or any
ERISA Affiliate has contributed, or was obligated to contribute, within
the past six years.
"Negotiable Collateral" means all of a Person's present and future letters
of credit, notes, drafts, instruments, Investment Property, documents,
personal property leases (wherein such Person is the lessor), chattel
paper, and Books relating to any of the foregoing.
"Net Funded Debt" means the total Indebtedness of Borrower, reduced by the
amount of cash and cash equivalents of Borrower on hand as of any date of
measurement thereof.
"Network Capex" means capital expenditures by Borrower relative to
bridges, routers, or other equipment related to the network developed or
to be developed by Borrower. The foregoing notwithstanding, "Network
Capex" shall not include capital expenditures by Borrower made relative to
Borrower's network operations center, network design, systems integration,
MIS systems, branch expansion, or corporate headquarters.
"Network Services Group" means an internal division of Borrower that
comprises personnel and related infrastructure capable of operating, and
whose function is to operate, the network developed or to be developed by
Borrower, and capable of providing Borrower's services to its customers
with respect to such network.
"New Capital Proceeds" means the net proceeds received by New Holding
Company from any offerings of debt or equity securities after the Closing
Date.
"New Holding Company" means a Delaware corporation to be created as part
of the Holding Company Reorganization for the purpose of owning 100% of
the issued and outstanding shares of stock of Borrower.
"Obligations" means all loans, Advances, debts, principal, interest
(including any interest that, but for the provisions of the Bankruptcy
Code, would have accrued), contingent reimbursement obligations under any
outstanding Letters of Credit, premiums (including Early Termination
Premiums), liabilities (including all amounts charged to Borrower's Loan
Account pursuant hereto), obligations, fees, charges, costs, or Lender
Group Expenses (including any fees or expenses that, but for the
provisions of the Bankruptcy Code, would have accrued), lease payments,
guaranties, covenants, and duties owing by Borrower to the Lender Group of
any kind and description (whether pursuant to or evidenced by the Loan
Documents or pursuant to any other agreement between the Lender Group and
Borrower, and irrespective of whether for the payment of money), whether
direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising, and including any debt, liability, or
obligation owing from Borrower to others that the Lender Group may have
obtained by assignment or otherwise, and further including all interest
not paid when due and all Lender Group Expenses that Borrower is required
to pay or reimburse by the Loan Documents, by law, or otherwise.
"Old ▇▇▇▇ Atlantic Collections" means Collections with respect to past due
claims of Borrower against ▇▇▇▇ Atlantic or its Subsidiaries arising out
of or related to Borrower's former agency relationship with ▇▇▇▇ Atlantic
or its Subsidiaries.
"Overadvance" has the meaning set forth in Section 2.5.
"Participant" has the meaning set forth in Section 15.1(e).
"Pay-Off Letter" means a letter, in form and substance reasonably
satisfactory to Agent, from Existing Lender respecting the amount
necessary to repay in full all of the obligations of Borrower owing to
Existing Lender and obtain a termination or release of all of the Liens
existing in favor of Existing Lender in and to the properties or assets of
Borrower.
"PBGC" means the Pension Benefit Guaranty Corporation as defined in Title
IV of ERISA, or any successor thereto.
"Permits" of a Person shall mean all rights, franchises, permits,
authorities, licenses, certificates of approval or authorizations,
including licenses and other authorizations issuable by a Governmental
Authority, which pursuant to applicable Legal Requirements are necessary
to permit such Person lawfully to conduct and operate its business as
currently conducted and to own and use its assets.
"Permitted Distributions" means dividends or distributions by Borrower to
New Holding Company made after the effective date of the Holding Company
Reorganization pursuant to a budget submitted in advance by Borrower to
Agent and approved in advance by the Lender Group in its reasonable
discretion, for the purpose of paying the portion of reasonable holding
company overhead, public filing costs, accounting costs, and like expenses
reasonably allocable to Borrower (but not the portion of any such costs or
expenses reasonably allocable to other Subsidiaries of New Holding Company
that are not Subsidiaries of Borrower); provided that in no event shall
such dividends or distributions be made or used for the purpose of paying
interest, fees, costs, or expenses with respect to Indebtedness of New
Holding Company or of any Subsidiary of New Holding Company.
"Permitted Holder" means the ▇▇▇▇▇▇▇▇▇▇▇▇ Related Parties or the Spectrum
Related Parties.
"Permitted Liens" means (a) Liens held by Agent for the Benefit of the
Lender Group, (b) Liens for unpaid taxes that either (i) are not yet due
and payable or (ii) are the subject of Permitted Protests, (c) Liens set
forth on Schedule P-1, (d) the interests of lessors under operating
leases, (e) Purchase Money Liens securing Purchase Money Indebtedness, (f)
Liens arising by operation of law in favor of warehousemen, landlords,
carriers, mechanics, materialmen, laborers, or suppliers, incurred in the
ordinary course of business of Borrower and not in connection with the
borrowing of money, and which Liens either (i) are for sums not yet due
and payable, or (ii) are the subject of Permitted Protests, (g) Liens
arising from deposits made in connection with obtaining worker's
compensation or other unemployment insurance, (h) Liens or deposits to
secure performance of bids, tenders, or leases (to the extent that such
leases are entered into in conformity with any applicable provisions of
this Agreement), incurred in the ordinary course of business of Borrower
and not in connection with the borrowing of money, (i) Liens arising by
reason of security for surety or appeal bonds in the ordinary course of
business of Borrower, (j) Liens of or resulting from any judgment or award
that reasonably could not be expected to result in a Material Adverse
Change and as to which the time for the appeal or petition for rehearing
of which has not yet expired, or in respect of which Borrower is in good
faith prosecuting an appeal or proceeding for a review and in respect of
which a stay of execution pending such appeal or proceeding for review has
been secured, (k) Liens on the Collateral granted to Cisco pursuant to the
terms of the Cisco Financing Documents that are the subject of the
Intercreditor Agreement; and (l) with respect to any Real Property,
easements, rights of way, zoning and similar covenants and restrictions,
and similar encumbrances that customarily exist on properties of Persons
engaged in similar activities and similarly situated and that in any event
do not materially interfere with or impair the use or operation of the
Collateral by Borrower or the value of the Liens of Agent on behalf of the
Lender Group thereon or therein, or materially interfere with the ordinary
conduct of the business of Borrower.
"Permitted Protest" means the right of Borrower to protest any Lien other
than any such Lien that secures the Obligations, tax (other than payroll
taxes or taxes that are the subject of a United States federal tax lien),
or rental payment, provided that (a) a reserve with respect to such
obligation is established on the books of Borrower in an amount that is
reasonably satisfactory to Agent, (b) any such protest is instituted and
diligently prosecuted by Borrower in good faith, and (c) Agent is
satisfied that, while any such protest is pending, there will be no
impairment of the enforceability, validity, or priority of any of the
Liens of Agent on behalf of the Lender Group in and to the Collateral.
"Person" means and includes natural persons, corporations, limited
liability companies, limited partnerships, general partnerships, limited
liability partnerships, joint ventures, trusts, land trusts, business
trusts, or other organizations, irrespective of whether they are legal
entities, and governments and agencies and political subdivisions thereof.
"Plan" means any employee benefit plan, program, or arrangement maintained
or contributed to by Borrower or with respect to which it may incur
liability.
"Projections" means Borrower's forecasted (a) balance sheets, (b) profit
and loss statements, (c) cash flow statements, and (d) capitalization
statements, all prepared on a consistent basis with Borrower's historical
financial statements, together with appropriate supporting details and a
statement of underlying assumptions.
"Pro Rata Share" means:
(a) with resect to a Lender's obligation to make Advances and receive
payments of interest and principal with respect thereto, the percentage
obtained by dividing (i) such Lender's Commitment to make Advances, as set
forth on Schedule C-1, by (ii) all such Commitments of all Lenders to make
Advances, as set forth on Schedule C-1;
(b) with respect to a Lender's obligation to participate in Letters of
Credit, and receive payments of fees with respect thereto, the percentage
obtained by dividing (i) such Lenders sub-Commitment to participate in the
Letters of Credit, as set forth on Schedule C-1, by (ii) all such sub-
Commitments of all Lenders to participate in the Letters of Credit, as set
forth on Schedule C-1; and
(c) with respect to all other matters (including the indemnification
obligations arising under Section 17.7), the percentage obtained by
dividing (i) such Lender's aggregate Commitments to make Advances and to
participate in the Letters of Credit, as set forth on Schedule C-1, by
(ii) the aggregate Commitments of all Lenders to make Advances and to
participate in the Letters of Credit, as set forth on Schedule C-1.
"Purchase Money Indebtedness" means Indebtedness incurred to enable the
Borrower to acquire rights in any item of Collateral.
"Purchase Money Liens" means a Lien on an item of Collateral (a) taken by
the seller of such item of Collateral to secure all or part of its price;
or (b) taken by a Person who by making advances or incurring an obligation
gives value to enable the Borrower to acquire rights in or use of
collateral if such value is in fact so used.
"Real Property" means any estates or interests in real property now owned
or hereafter acquired by Borrower.
"Regulatory Change" means any adoption, interpretation, or change of any
statute, law, order, regulation, or directive.
"Reportable Event" means any of the events described in Section 4043(c) of
ERISA or the regulations thereunder other than a Reportable Event as to
which the provision of 30 days notice to the PBGC is waived under
applicable regulations.
"Required Lenders" means, at any time, Lenders whose Pro Rata Shares
aggregate 70.00% of the Commitments, or if the Commitments have been
terminated irrevocably, 70.00% of the Obligations then outstanding.
"Retiree Health Plan" means an "employee welfare benefit plan" within the
meaning of Section 3(1) of ERISA that provides benefits to individuals
after termination of their employment, other than as required by
Section 601 of ERISA.
"Revolving Facility Usage" means, as of any date of determination, the sum
of the aggregate amount of Advances outstanding.
"Risk Participation Liability" means, as to each Letter of Credit, all
reimbursement obligations of Borrower to the issuer of the letter of
credit with respect to the transaction for which the Letter of Credit was
executed and delivered (to the extent such reimbursement obligations are
subject to such Letter of Credit), consisting of (a) the amount available
to be drawn or which may become available to be drawn; (b) all amounts
which have been paid and made available by the issuing bank to the extent
not reimbursed by Borrower, whether by the making of an Advance or
otherwise; and (c) all accrued and unpaid interest, fees and expenses with
respect thereto. For purposes of determining the outstanding amount of
Risk Participation Liability, the maximum amount potentially owing under
any Letter of Credit will be considered outstanding unless the bank which
is the issuer of such Letter of Credit reports daily activity to Agent
showing actual outstanding amounts remaining available to be drawn under
such Letter of Credit.
"Settlement Date" has the meaning set forth in Section 2.5(c)(ii).
"Solvent" means, with respect to any Person on a particular date, that on
such date (a) at fair valuations, all of the properties and assets of such
Person are greater than the sum of the debts, including contingent
liabilities, of such Person, (b) the present fair salable value of the
properties and assets of such Person is not less than the amount that will
be required to pay the probable liability of such Person on its debts as
they become absolute and matured, (c) such Person is able to realize upon
its properties and assets and pay its debts and other liabilities,
contingent obligations and other commitments as they mature in the normal
course of business, (d) such Person does not intend to, and does not
believe that it will, incur debts beyond such Person's ability to pay as
such debts mature, and (e) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for
which such Person's properties and assets would constitute unreasonably
small capital after giving due consideration to the prevailing practices
in the industry in which such Person is engaged. In computing the amount
of contingent liabilities at any time, it is intended that such
liabilities will be computed at the amount that, in light of all the facts
and circumstances existing at such time, represents the amount that
reasonably can be expected to become an actual or matured liability.
"Spectrum Related Parties" means Spectrum Equity Investors, L.P. and any
of its Subsidiaries.
"Stock" means all shares, options, warrants, interests, participations, or
other equivalents (regardless of how designated) of or in a corporation or
equivalent entity, whether voting or nonvoting, including common stock,
preferred stock, or any other "equity security" (as such term is defined
in Rule 3a11-1 of the General Rules and Regulations promulgated by the SEC
under the Exchange Act).
"Stock Pledge Agreement" means a stock pledge agreement, in form and
substance satisfactory to Agent, to be executed and delivered by New
Holding Company to Agent at the time of the Holding Company Reorganization
with respect to the pledge of the capital Stock of Borrower.
"Subsidiary" of a Person means a corporation, partnership, limited
liability company, or other entity in which that Person directly or
indirectly owns or controls the shares of Stock having ordinary voting
power to elect a majority of the board of directors (or appoint other
comparable managers) of such corporation, partnership, limited liability
company, or other entity.
"Threshold Percentage" means, as of any date of determination, (a) if the
aggregate percentage of the total voting power of all classes of Stock of
Borrower or New Holding Company, as applicable, then outstanding and
beneficially owned (within the meaning of Sections 13(d) and 14(d)(2) of
the Exchange Act) by the Permitted Holders equals or exceeds 30%, then the
Threshold Percentage is 40%, and (b) if the aggregate percentage of the
total voting power of all classes of Stock of Borrower or New Holding
Company, as applicable, then outstanding and beneficially owned (within
the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) by the
Permitted Holders is less than 30%, then the Threshold Percentage is such
aggregate percentage.
"VA Sub" means CTC Communications of Virginia Inc., a Virginia
corporation, which is a wholly owned Subsidiary of Borrower
"Voidable Transfer" has the meaning set forth in Section 15.8.
"Warrants" means those certain common stock purchase warrants issued to
the Lenders or their designees (in accordance with their Pro Rata Shares)
by Borrower, in form and substance satisfactory to Agent and each Lender,
on the Closing Date for the purchase of 7.5% of the outstanding shares of
Borrower's common stock, $0.01 par value, at an exercise price of $6.75
per share.
"Year 2000 Compliant" means, with regard to any Person, that all software
in goods produced or sold by, or utilized by and material to the business
operations or financial condition of, such Person are able to interpret
and manipulate data on and involving all calendar dates correctly and
without causing any abnormal ending scenario, including in relation to
dates in and after the year 2000.
1.2 Accounting Terms.
All accounting terms not specifically defined herein shall be construed
in accordance with GAAP. When used herein, the term "financial
statements" shall include the notes and schedules thereto. Whenever the
term "Borrower" is used in respect of a financial covenant or a related
definition, it shall be understood to mean Borrower on a consolidated
basis with the Subsidiaries of Borrower unless the context clearly
requires otherwise.
1.3 Code.
Any terms used in this Agreement that are defined in the Code shall be
construed and defined as set forth in the Code unless otherwise defined
herein.
1.4 Construction.
Unless the context of this Agreement or any other Loan Document clearly
requires otherwise, references to the plural include the singular,
references to the singular include the plural, the term "including" is not
limiting, and the term "or" has, except where otherwise indicated, the
inclusive meaning represented by the phrase "and/or." The words "hereof,"
"herein," "hereby," "hereunder," and similar terms in this Agreement or
any other Loan Document refer to this Agreement or such other Loan
Document, as the case may be, as a whole and not to any particular
provision of this Agreement or such other Loan Document, as the case may
be. An Event of Default shall "continue" or be "continuing" until such
Event of Default has been waived in writing by Agent. Section,
subsection, clause, schedule, and exhibit references herein are to this
Agreement unless otherwise specified. Any reference in this Agreement or
in the Loan Documents to this Agreement or any of the Loan Documents shall
include all alterations, amendments, changes, extensions, modifications,
renewals, replacements, substitutions, joinders, and supplements, thereto
and thereof, as applicable.
1.5 Schedules and Exhibits.
All of the schedules and exhibits attached to this Agreement shall be
deemed incorporated herein by reference. With the consent of the Lender
Group, which shall not unreasonably be withheld, Borrower from time to
time may update or supplement the schedules to the Loan Documents.
2. LOAN AND TERMS OF PAYMENT.
2.1 Revolving Advances.
(a) Subject to the terms and conditions of this
Agreement, and during the term of this Agreement, each Lender agrees to
make advances ("Advances") to Borrower in an amount at any one time
outstanding not to exceed such Lender's Pro Rata Share of an amount equal
to the lesser of (i) the Maximum Revolving Amount less the Letter of
Credit Usage, or (ii) the Borrowing Base less the Letter of Credit Usage.
For purposes of this Agreement, "Borrowing Base", as of any date of
determination, shall mean the result of:
(x) the lesser of (i) an amount equal to
Borrower's Collections (excluding Old ▇▇▇▇ Atlantic
Collections) with respect to Accounts collected from telephone
service customers for the Applicable Collections Period
immediately preceding such date, and (ii) $60,000,000, plus
(y) $15,000,000, minus
(z) the aggregate amount of reserves, if any,
established by Agent hereunder (including Section 2.1(b)).
(b) Anything to the contrary in this Section 2.1
notwithstanding, Agent shall have the right to establish reserves in such
amounts as Agent in its reasonable credit judgment (from the perspective
of a secured lender) shall deem necessary or appropriate, against the
Borrowing Base on account of (i) sums chargeable against the Loan Account
as Advances under any section of this Agreement or any other Loan
Document, (ii) without duplication of the foregoing, amounts owing by
Borrower to any Person to the extent secured by a Lien, other than a
Permitted Lien securing Purchase Money Indebtedness, on, or trust over,
any assets of Borrower, which Lien or trust, in the reasonable
determination of Agent, would be likely to have a priority superior to the
Liens of the Lender Group (such as landlord liens, ad valorem taxes, or
sales taxes where given priority under applicable law).
(c) The Lenders shall have no obligation to make
further Advances hereunder to the extent such further Advances would cause
the outstanding Obligations to exceed the Maximum Revolving Amount.
(d) Amounts borrowed pursuant to this Section 2.1 may
be repaid and, subject to the terms and conditions of this Agreement,
reborrowed at any time during the term of this Agreement.
2.2 Letters of Credit.
(a) Subject to the terms and conditions of this
Agreement, Agent agrees to issue standby letters of credit (each such
standby letter of credit, a "Letter of Credit") for the account of
Borrower. Agent shall have no obligation to issue a Letter of Credit if
any of the following would result:
(i) the Letter of Credit Usage would exceed the lesser
of (A) the Borrowing Base less the amount of outstanding
Advances, or (B) $5,000,000; or
(ii) the outstanding Obligations would exceed the
Maximum Revolving Amount.
Borrower and the Lender Group acknowledge and agree that certain of the
letters of credit that are to be the subject of Letters of Credit may be
outstanding on the Closing Date. Each Letter of Credit shall have an
expiry date no later than 60 days prior to the date on which this
Agreement is scheduled to terminate under Section 3.4 (without regard to
any potential renewal term) and all such Letters of Credit shall be in
form and substance acceptable to Agent in its sole discretion. If Agent
is obligated to advance funds under a Letter of Credit, Borrower
immediately shall reimburse such amount to Agent and, in the absence of
such reimbursement, the amount so advanced immediately and automatically
shall be deemed to be an Advance hereunder and, thereafter, shall bear
interest at the rate then applicable to Advances under Section 2.8.
(b) Each Lender agrees to fund its Pro Rata Share of
any Advance made pursuant to Section 2.2(a). If no such Advance is made,
each Lender agrees to purchase, and shall be deemed to have purchased, a
participation in such Letter of Credit, in an amount equal to its Pro Rata
Share of the Risk Participation Liability of such Letter of Credit, and
each Lender agrees to pay to Agent such Lender's Pro Rata Share of any
payments made by Agent under such Letter of Credit. The obligation of
each Lender to deliver to Agent an amount equal to its respective Pro Rata
Share pursuant to the preceding two sentences shall be absolute and
unconditional and such remittance shall be made notwithstanding the
occurrence or continuation of an Event of Default or Default or the
failure to satisfy any condition set forth in Section 3.2. If any Lender
fails to make available to Agent the amount of such Lender's Pro Rata
Share of any payments made by Agent in respect of such Letter of Credit as
provided in this Section 2.2(b), Agent shall be entitled to recover such
amount on demand from such Lender together with interest at the Base Rate.
(c) Borrower hereby agrees to indemnify, save, defend,
and hold the Lender Group harmless from any loss, cost, expense, or
liability, including payments made by the Lender Group, expenses, and
reasonable attorneys fees incurred by the Lender Group arising out of or
in connection with any Letter of Credit. Borrower agrees to be bound by
the issuing bank's regulations and interpretations of any letters of
credit guarantied by the Lender Group and opened to or for Borrower's
account, even though this interpretation may be different from Borrower's
own, and Borrower understands and agrees that the Lender Group shall not
be liable for any error, negligence, or mistake, whether of omission or
commission, in following Borrower's instructions or those contained in the
Letter of Credit or any modifications, amendments, or supplements thereto.
Borrower understands that the Letters of Credit may require the Lender
Group to indemnify the issuing bank for certain costs or liabilities
arising out of claims by Borrower against such issuing bank. Borrower
hereby agrees to indemnify, save, defend, and hold the Lender Group
harmless with respect to any loss, cost, expense (including reasonable
attorneys fees), or liability incurred by the Lender Group under any
Letter of Credit as a result of the Lender Group's indemnification of any
such issuing bank.
(d) Borrower hereby authorizes and directs any bank
that issues a Letter of Credit to deliver to Agent all instruments,
documents, and other writings and property received by the issuing bank
pursuant to such letter of credit, and to accept and rely upon Agent's
instructions and agreements with respect to all matters arising in
connection with such Letter of Credit and the related application.
Borrower shall be the "applicant" or "account party" with respect to such
Letter of Credit.
(e) Any and all charges, commissions, fees, and costs
incurred by the Lender Group relating to the Letters of Credit shall be
considered Lender Group Expenses for purposes of this Agreement and
immediately shall be reimbursable by Borrower to Agent.
(f) Immediately upon the termination of this
Agreement, Borrower agrees to either (i) provide cash collateral to be
held by Agent in an amount equal to 105% of the maximum amount of the
Lender Group's obligations under Letters of Credit, or (ii) cause to be
delivered to Agent releases of all of the Lender Group's obligations under
outstanding Letters of Credit. At Agent's discretion, any proceeds of
Collateral received by the Lender Group after the occurrence and during
the continuation of an Event of Default may be held as the cash collateral
required by this Section 2.2(f).
(g) If by reason of (i) any change in any applicable
law, treaty, rule, or regulation or any change in the interpretation or
application by any governmental authority of any such applicable law,
treaty, rule, or regulation, or (ii) compliance by the issuing bank or the
Lender Group with any direction, request, or requirement (irrespective of
whether having the force of law) of any governmental authority or monetary
authority including, without limitation, Regulation D of the Board of
Governors of the Federal Reserve System as from time to time in effect
(and any successor thereto):
(i) any reserve, deposit, or similar requirement is or
shall be imposed or modified in respect of any Letter of
Credit issued hereunder, or
(ii) there shall be imposed on the issuing bank or the
Lender Group any other condition regarding any Letter of
Credit issued pursuant hereto;
and the result of the foregoing is to increase, directly or indirectly,
the cost to the Lender Group of issuing any Letter of Credit, or to reduce
the amount receivable in respect thereof the Lender Group, then, and in
any such case, Agent may, at any time within a reasonable period after the
additional cost is incurred or the amount received is reduced, notify
Borrower, and Borrower shall pay on demand such amounts as Agent may
specify to be necessary to compensate the Lender Group for such additional
cost or reduced receipt, together with interest on such amount from the
date of such demand until payment in full thereof at the rate then
applicable to Advances pursuant to Section 2.8(a) or (c), as applicable.
The determination by Agent of any amount due pursuant to this Section
2.2(g), as set forth in a certificate setting forth the calculation
thereof in reasonable detail, shall, in the absence of manifest or
demonstrable error, be final and conclusive and binding on all of the
parties hereto.
2.3 [Intentionally Omitted].
2.4 Requirements of Law.
(a) In the event that any Regulatory Change shall:
(i) change the taxation of any amounts payable to any
Lender under this Agreement or any note issued pursuant hereto
in respect of any Advance (other than taxes imposed on the net
income of such Lender);
(ii) impose or modify any reserve, compulsory loan
assessment, special deposit or similar requirement relating to
any extensions of credit or other assets of, or any deposits
with or other liabilities of, any applicable office of such
Lender (including any of such Advances); or
(iii) impose any other conditions affecting this
Agreement in respect of Advances (or any of such extensions of
credit, assets, deposits or liabilities);
and the result of any of the foregoing shall be to increase such Lender's
costs of making or maintaining any Advances or any Commitment, or to
reduce any amount receivable by such Lender hereunder in respect of any of
its Advances or any Commitment, in each case only to the extent that such
additional amounts are not already included in the interest rate
applicable to such Advances, then the Borrower shall pay on demand to such
Lender, through the Agent and from time to time as specified by such
Lender, such additional amounts as such Lender shall reasonably determine
are sufficient to compensate such Lender for such increased cost or
reduced amount receivable.
(b) If at any time after the date of this Agreement
any Lender shall have determined that the applicability of any law, rule,
regulation or guideline adopted after the Closing Date pursuant to, or
arising after the Closing Date out of, the July 1988 report of the Basle
Committee on Lending Regulations and Supervisory Practices entitled
"International Convergence of Capital Measurement and Capital Standards",
or the adoption or implementation after the Closing Date of any other
Regulatory Change regarding capital adequacy or any change after the
Closing Date in the interpretation or administration thereof by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof (whether or not having the force
of law), has or will have the effect of reducing the rate of return on
such Lender's capital or on the capital of such Lender's holding company,
if any, as a consequence of the existence of its obligations hereunder to
a level below that which such Lender or its holding company could have
achieved but for such adoption, change or compliance (taking into
consideration such Lender's policies with respect to capital adequacy) by
an amount reasonably deemed by such Lender to be material, then from time
to time following written notice by such Lender to the Borrower as
provided in paragraph (c) of this Section, within fifteen (15) days after
demand by such Lender, the Borrower shall pay to such Lender, through the
Agent, such additional amount or amounts as such Lender shall reasonably
determine will compensate such Lender or such Lender's holding company, as
the case may be, for such reduction, provided that to the extent that any
or all of the Borrower's liability under this Section arises following the
date of the adoption of any such Regulatory Change (the "Effective Date"),
such compensation shall be payable only with respect to that portion of
such liability arising after notice of such Regulatory Change is given by
such Lender to the Borrower (unless such notice is given within sixty (60)
days after the Effective Date, in which case such compensation shall be
payable in full).
(c) If any Lender becomes entitled to claim any
additional amounts pursuant to this Section, it shall promptly notify the
Borrower of the event by reason of which it has become so entitled. A
certificate setting forth in reasonable detail the computation of any
additional amounts payable pursuant to this Section shall be delivered to
the Borrower and the other Lenders promptly after the incurrence of such
additional amounts and such certificate shall be presumed correct in the
absence of manifest error. The covenants contained in this Section shall
survive the termination of this Agreement and the payment of the
outstanding Obligations. No failure on the part of any Lender to demand
compensation under paragraph (a) or (b) above on any one occasion shall
constitute a waiver of its rights to demand compensation on any other
occasion. The protection of this Section shall be available to each Lender
regardless of any possible contention of the invalidity or inapplicability
of any law, regulation or other condition which shall give rise to any
demand by such Lender for compensation thereunder. In the event that any
of the losses or payments for which any Lender or its holding company is
compensated under this Section are reimbursed or otherwise restored to
such Lender or its holding company for any reason, including the
rescission, nullification or retroactive modification of any such
Regulatory Change, such Lender shall reimburse the Borrower accordingly as
soon as reasonably practicable.
2.5 Borrowing Procedures and Settlements.
(a) Procedure for Borrowing. Each Loan shall be made
upon Borrower's irrevocable request therefor delivered to Agent (which
notice must be received by Agent no later than 11:00 a.m. (New York time)
on the Business Day that is the requested Funding Date) specifying (i) the
amount of such Loan, and (ii) the requested Funding Date, which shall be a
Business Day.
(b) Disbursement of Funds. Agent may, on behalf of
the Lenders, disburse funds to Borrower for Loans requested. If any
Lender fails to pay the amount necessary to adjust such Lender's actual
Pro Rata Share pursuant to Section 2.5(c), Agent shall promptly notify
Borrower, and Borrower shall immediately repay such amount to Agent. Any
repayment required pursuant to this Section 2.5(b) shall be without
premium or penalty. Nothing in this Section 2.5(b) or elsewhere in this
Agreement or the other Loan Documents, including the provisions of Section
2.5(d), shall be deemed to require Agent to advance funds on behalf of any
Lender or to relieve any Lender from its obligation to fulfill its
Commitments hereunder or to prejudice any rights that Agent or Borrower
may have against any Lender as a result of any default by such Lender
hereunder.
(c) Settlements.
(i) The Revolving Facility Usage may fluctuate from
day to day through Agent's disbursement of funds to, and
receipt of funds from, Borrower. In order to minimize the
frequency of transfers of funds between Agent and each Lender
notwithstanding terms to the contrary set forth herein,
Advances and payments will be settled among Agent and Lenders
according to the procedures described in this Section 2.5(c).
These procedures notwithstanding, each Lender's obligation to
fund its portion of any Advances made by Agent to Borrower
will commence on the date such Advances are made by Agent.
Such payments will be made by such Lender without set-off,
counterclaim or reduction of any kind.
(ii) On the second Business Day of each week, or more
frequently (including daily), if the Required Lenders so agree
(each such day being a "Settlement Date"), Agent will advise
each Lender by telephone or telecopy of the amount of each
such Lender's Pro Rata Share of the Revolving Facility Usage
as of the close of business of the second Business Day
immediately preceding the Settlement Date. In the event that
payments are necessary to adjust such Lender's actual Pro Rata
Share of the Revolving Facility Usage as of any Settlement
Date to equal the amount of such Lender's required Pro Rata
Share of the Revolving Facility Usage, the party from which
such payment is due will pay the other, in same day funds, by
wire transfer to the other's account not later than 1:00 p.m.
(New York time) on the Business Day immediately following the
Settlement Date.
(d) Availability of Lender's Pro Rata Share.
(i) Unless Agent shall have received notice from a
Lender prior to a Funding Date that such Lender will not make
available its Pro Rata Share of a Loan requested by Borrower,
Agent may assume that such Lender has made such amount
available to Agent on the Business Day following the next
Settlement Date. If a Lender has not in fact made its Pro
Rata Share available to the Agent on such date, then such
Lender and Borrower severally agree to pay to Agent forthwith
on demand such amount without set-off, counterclaim or
deduction of any kind, together with interest thereon, for
each day from and including the date such amount was to have
been made available to Agent by such Lender to, but excluding,
the date of payment to Agent, at (a) in the case of such
Lender, the federal funds rate, or (b) in the case of
Borrower, the interest rate applicable under this Agreement
with respect to such Loan. Until any such amount is paid to
Agent, Agent shall not be obligated to submit to such Lender
any payment made by Borrower to Agent with respect to any Loan
or any fees or other payments with respect thereto.
(ii) Nothing contained in this Section 2.5(d) will be
deemed to relieve a Lender of its obligation to fulfill its
commitments or to prejudice any rights Agent or Borrower may
have against such Lender as a result of any such default by
such Lender under this Agreement.
(e) Return of Payments.
(i) If Agent pays an amount to a Lender under this
Agreement in the belief or expectation that a related payment
has been or will be received by Agent from Borrower and such
related payment is not received by Agent, then Agent will be
entitled to recover such amount from such Lender without
set-off, counterclaim or deduction of any kind together with
interest thereon, for each day from and including the date
such amount is made available by Agent to such Lender to, but
excluding, the date of repayment to Agent, at the Federal
Funds Effective Rate, and such payment to such Lender shall be
deemed to not have been made.
(ii) If Agent determines at any time that any amount
received by Agent under this Agreement must be returned to
Borrower or paid to any other person pursuant to any
requirement at law, court order or otherwise, then,
notwithstanding any other term or condition of this Agreement,
Agent will not be required to distribute any portion thereof
to any Lender. In addition, each Lender will repay to Agent
on demand any portion of such amount that Agent has
distributed to such Lender, together with interest at such
rate, if any, as Agent is required to pay to Borrower or such
other Person, without set-off, counterclaim or deduction of
any kind.
(f) Lenders' Failure to Perform. It is understood
that (i) no Lender shall be responsible for any failure by any other
Lender to perform its obligation to make any Advances hereunder, nor shall
any Commitment of any Lender be increased or decreased as a result of any
failure by any other Lender to perform its obligation to make any Advances
hereunder, and (ii) no failure by any Lender to perform its obligation to
make any Advances hereunder shall excuse any other Lender from its
obligation to make any Advances hereunder.
(g) Zero Balance Disbursement Arrangement. If and
when Borrower establishes with Agent a zero balance disbursement
arrangement, any terms and provisions of such arrangement shall govern and
control in the event of any inconsistency with the provisions of this
Section 2.5.
2.6 Payments.
(a) Payments by Borrower.
(i) All payments to be made by Borrower shall be made
without set-off, recoupment, deduction, or counterclaim,
except as otherwise required by law. Except as otherwise
expressly provided herein, all payments by Borrower shall be
made to Agent for the account of the Lenders at Agent's
address set forth in Section 12, and shall be made in
immediately available funds, no later than 2:30 p.m. (New York
time) on the date specified herein. Any payment received by
Agent later than 2:30 p.m. (New York time), at the option of
Agent, shall be deemed to have been received on the following
Business Day and any applicable interest or fee shall continue
to accrue until such following Business Day.
(ii) Whenever any payment is due on a day other than a
Business Day, such payment shall be made on the following
Business Day, and such extension of time shall in such case be
included in the computation of interest or fees, as the case
may be.
(iii) Unless Agent receives notice from Borrower prior
to the date on which any payment is due to the Lenders that
Borrower will not make such payment in full as and when
required, Agent may assume that Borrower has made such payment
in full to Agent on such date in immediately available funds
and Agent may (but shall not be so required), in reliance upon
such assumption, distribute to each Lender on such due date an
amount equal to the amount then due such Lender. If and to
the extent Borrower has not made such payment in full to
Agent, each Lender shall repay to Agent on demand such amount
distributed to such Lender, together with interest thereon at
the Base Rate for each day from the date such amount is
distributed to such Lender until the date repaid.
(b) Apportionment, Application, and Reversal of
Payments. Except as otherwise provided with respect to defaulting
Lenders, aggregate principal and interest payments shall be apportioned
ratably among the Lenders (according to the unpaid principal balance of
the Advances to which such payments relate held by each Lender) and
payments of the fees (other than fees designated for Agent's sole and
separate account) shall, as applicable, be apportioned ratably among the
Lenders. All payments shall be remitted to Agent and all such payments
not relating to principal or interest of specific Advances or loans, or
not constituting payment of specific fees, and all proceeds of Accounts or
other Collateral received by Agent, shall be applied as in the following
order:
(i) to pay any fees, or expense reimbursements then
due to Agent from Borrower;
(ii) to pay any fees or expense reimbursements then due
to the Lenders from Borrower;
(iii) to pay interest due in respect of all outstanding
Advances;
(iv) to pay fees, charges, commission, and costs in
respect of all outstanding Letters of Credit;
(v) ratably to pay principal of all outstanding
Advances;
(vi) upon the occurrence and during the continuance of
any Event of Default, or upon the termination of this
Agreement, provide cash collateral to be held by Agent, for
the ratable benefit of the Lender Group, in an amount equal to
105% of the maximum amount of the Lender Group's obligations
under Letters of Credit; and
(vii) ratably to pay any other Obligations due to Agent
or any Lender by Borrower.
(c) Zero Balance Disbursement Arrangement. If and
when Borrower establishes with Agent a zero balance disbursement
arrangement, any terms and provisions of such arrangement shall govern and
control in the event of any inconsistency with the provisions of this
Section 2.6.
2.7 Overadvances.
If, at any time or for any reason, the amount of Obligations owed by
Borrower to the Lender Group pursuant to Sections 2.1 and 2.2 is greater
than either the Dollar or percentage limitations set forth in Sections 2.1
or 2.2, (an "Overadvance"), Borrower immediately shall pay to Agent, in
cash, the amount of such excess, which amount shall be used by Agent to
reduce the Obligations in accordance with the priority set forth in
Section 2.6(b).
2.8 Interest and Letter of Credit Fees: Rates, Payments, and
Calculations.
(a) Interest Rate. Except as provided in clause (b)
of this section, all Obligations (except for undrawn Letters of Credit)
shall bear interest at a per annum rate of 1.75 percentage points above
the Base Rate.
(b) Letter of Credit Fee. Borrower shall pay Agent
(for the ratable benefit of the Lender Group (in accordance the Lenders'
Pro Rata Shares)) a fee (in addition to the charges, commissions, fees,
and costs set forth in Section 2.2(e)) equal to 2.875% per annum times the
aggregate undrawn amount of all Letters of Credit.
(c) Default Rate. Upon the occurrence and during the
continuation of an Event of Default, (i) all Obligations (except undrawn
Letters of Credit) shall bear interest at a per annum rate equal to 2.0
percentage points above the per annum rate otherwise applicable thereto as
set forth in Section 2.8(a), and (ii) the Letter of Credit fee provided in
Section 2.8(b) shall be increased to 4.875% per annum times the amount of
the undrawn Letters of Credit that were outstanding during the immediately
preceding month.
(d) [Intentionally Omitted].
(e) Payments. Interest and Letter of Credit fees
payable hereunder shall be due and payable, in arrears, on the first day
of each month during the term hereof. Borrower hereby authorizes Agent,
at its option, without prior notice to Borrower, to charge such interest
and Letter of Credit fees, all Lender Group Expenses (as and when
incurred), the charges, commissions, fees, and costs provided for in
Section 2.2(e), (as and when accrued or incurred), the fees and charges
provided for in Section 2.13 (as and when accrued or incurred), and all
installments or other payments due under any Loan Document to Borrower's
Loan Account, which amounts thereafter shall accrue interest at the rate
then applicable to Advances hereunder. Any interest not paid when due
shall be compounded and shall thereafter accrue interest at the rate then
applicable to Advances hereunder.
(f) Computation. The Base Rate as of the date of this
Agreement is 8.5% per annum. In the event the Base Rate is changed from
time to time hereafter, the applicable rates of interest hereunder
automatically and immediately shall be increased or decreased by an amount
equal to such change in the Base Rate. All interest and fees chargeable
under the Loan Documents shall be computed on the basis of a 360 day year
for the actual number of days elapsed.
(g) Intent to Limit Charges to Maximum Lawful Rate.
In no event shall the interest rate or rates payable under this Agreement,
plus any other amounts paid in connection herewith, exceed the highest
rate permissible under any law that a court of competent jurisdiction
shall, in a final determination, deem applicable. Borrower and the Lender
Group, in executing and delivering this Agreement, intend legally to agree
upon the rate or rates of interest and manner of payment stated within it;
provided, however, that, anything contained herein to the contrary
notwithstanding, if said rate or rates of interest or manner of payment
exceeds the maximum allowable under applicable law, then, ipso facto as of
the date of this Agreement, Borrower is and shall be liable only for the
payment of such maximum as allowed by law, and payment received from
Borrower in excess of such legal maximum, whenever received, shall be
applied to reduce the principal balance of the Obligations to the extent
of such excess.
2.9 Collection of Accounts.
Borrower shall at all times maintain lockboxes (the "Lockboxes") and,
immediately after the Closing Date, (a) shall instruct all Account Debtors
with respect to the Accounts, General Intangibles, and Negotiable
Collateral of Borrower to remit all Collections in respect thereof to such
Lockboxes, and (b) shall deposit all other Collections received by
Borrower from any source immediately upon receipt in to the Lockbox
Accounts. Borrower, Agent, and the Lockbox Banks shall enter into the
Lockbox Agreements, which among other things shall provide for the opening
of a Lockbox Account for the deposit of Collections at a Lockbox Bank.
Borrower agrees that all Collections and other amounts received by
Borrower from any Account Debtor or any other source immediately upon
receipt shall be deposited into a Lockbox Account. No Lockbox Agreement
or arrangement contemplated thereby shall be modified by Borrower without
the prior written consent of Agent. Upon the terms and subject to the
conditions set forth in the Lockbox Agreements, all amounts received in
each Lockbox Account shall be wired each Business Day into an account (the
"Agent Account") maintained by Agent at a depositary selected by Agent
(which depositary may be Fleet).
2.10 Crediting Payments; Application of Collections.
The receipt of any Collections by Agent (whether from transfers to Agent
by the Lockbox Banks pursuant to the Lockbox Agreements or otherwise)
immediately shall be applied provisionally to reduce the Obligations
outstanding under Section 2.1, but shall not be considered a payment on
account unless such Collection item is a wire transfer of immediately
available federal funds and is made to the Agent Account or unless and
until such Collection item is honored when presented for payment. From
and after the Closing Date, Agent on behalf of the Lender Group (for the
ratable benefit of the Lender Group (in accordance the Lenders' Pro Rata
Shares)) shall be entitled to charge Borrower for 1 Business Day of
`clearance' or `float' at the rate set forth in Section 2.8(a) or
Section 2.8(c), as applicable, on all Collections (other than Old ▇▇▇▇
Atlantic Collections) that are received by Agent (regardless of whether
forwarded by the Lockbox Banks to Agent, whether provisionally applied to
reduce the Obligations under Section 2.1, or otherwise). This across-the-
board 1 Business Day clearance or float charge on all Collections is
acknowledged by the parties to constitute an integral aspect of the
pricing of the Lender Group's financing of Borrower, and shall apply
irrespective of the characterization of whether receipts are owned by
Borrower or the Lender Group, and whether or not there are any outstanding
Advances, the effect of such clearance or float charge being the
equivalent of charging 1 Business Day of interest on such Collections.
Should any Collection item not be honored when presented for payment, then
Borrower shall be deemed not to have made such payment, and interest shall
be recalculated accordingly. Anything to the contrary contained herein
notwithstanding, any Collection item shall be deemed received by Agent
only if it is received into the Agent Account on a Business Day on or
before 2:30 p.m. New York time. If any Collection item is received into
the Agent Account on a non-Business Day or after 2:30 p.m. New York time
on a Business Day, it shall be deemed to have been received by Agent as of
the opening of business on the immediately following Business Day.
2.11 Designated Account.
Agent and the Lenders are authorized to make the Advances and issue the
Letters of Credit under this Agreement based upon telephonic or other
instructions received from anyone purporting to be an Authorized Person,
or without instructions if pursuant to Section 2.8(e). Borrower agrees to
establish and maintain the Designated Account with the Designated Account
Bank for the purpose of receiving the proceeds of the Advances hereunder.
Unless otherwise agreed by Agent and Borrower, any Advance requested by
Borrower and made by hereunder shall be made to the Designated Account.
2.12 Maintenance of Loan Account; Statements of Obligations.
Agent shall maintain an account on its books in the name of Borrower (the
"Loan Account") on which Borrower will be charged with all Advances made
by Agent or the Lenders to Borrower or for Borrower's account, including,
accrued interest, Lender Group Expenses, and any other payment Obligations
of Borrower. In accordance with Section 2.10, the Loan Account will be
credited with all payments received by Agent from Borrower or for
Borrower's account, including all amounts received in the Agent Account
from any Lockbox Bank. Agent shall render monthly statements regarding
the Loan Account to Borrower, including principal, interest, fees, and
including an itemization of all charges and expenses constituting Lender
Group Expenses owing, and such statements shall be conclusively presumed
to be correct and accurate and constitute an account stated between
Borrower and the Lender Group unless, within 30 days after receipt thereof
by Borrower, Borrower shall deliver to Agent written objection thereto
describing the error or errors contained in any such statements.
2.13 Fees.
Borrower shall pay to Agent for the ratable benefit of the Lender Group
(in accordance the Lenders' Pro Rata Shares) the following fees:
(a) Closing Fee. On the Closing Date, a closing fee
of $2,531,250;
(b) Unused Line Fee. On the first day of each month
during the term of this Agreement, an unused line fee in an amount equal
to 0.5% per annum times the Average Unused Portion of the Maximum
Revolving Amount; and
(c) Monthly Fee. On the first day of each month, in
arrears, during the term of this Agreement, a monthly fee in an amount
equal to $150,000.
3. CONDITIONS; TERM OF AGREEMENT.
3.1 Conditions Precedent to the Initial Advance and Letter of Credit.
The obligation of the Lender Group (or any member thereof) to make the
initial Advance or to issue the initial Letter of Credit is subject to the
fulfillment, to the satisfaction of Agent, each Lender, and their
respective counsel, of each of the following conditions on or before the
Closing Date:
(a) the Closing Date shall occur on or before
September 15, 1998;
(b) Borrower shall have delivered all financing
statements and fixture filings required by the Lender Group in the name of
Agent for the benefit of the Lender Group, duly executed by Borrower, and
each Lender, to the extent it so requires, shall have received searches
reflecting the filing of such financing statements and fixture filings;
(c) Each Lender, to the extent is so requires, shall
have received each of the following documents, duly executed, and each
such document shall be in full force and effect:
(i) the Lockbox Agreements (subject to Section
3.3(g));
(ii) the Funds Flow Agreement;
(iii) the Pay-Off Letter, together with UCC termination
statements and other documentation evidencing the termination
by Existing Lender of its Liens in and to the properties and
assets of Borrower that exist or existed with respect to the
financing by Existing Lender that preceded this Agreement;
(iv) the Warrants;
(v) the Intercreditor Agreement; and
(vi) the Deposit Account Security Agreement;
(d) Each Lender, to the extent it so requires, shall
have received a certificate from the Clerk of Borrower attesting to the
resolutions of Borrower's Board of Directors authorizing its execution,
delivery, and performance of this Agreement and the other Loan Documents
to which Borrower is a party and authorizing specific officers of Borrower
to execute the same;
(e) Each Lender, to the extent it so requires, shall
have received copies of Borrower's Governing Documents, as amended,
modified, or supplemented to the Closing Date, certified by the Clerk of
Borrower;
(f) Each Lender, to the extent it so requires, shall
have received a certificate of status with respect to Borrower, dated
within 10 days of the Closing Date, such certificate to be issued by the
appropriate officer of the jurisdiction of organization of Borrower, which
certificate shall indicate that Borrower is in good standing in such
jurisdiction;
(g) Each Lender, to the extent it so requires, shall
have received certificates of status with respect to Borrower, each dated
within 15 days of the Closing Date, such certificates to be issued by the
appropriate officer of the jurisdictions in which its failure to be duly
qualified or licensed would constitute a Material Adverse Change, which
certificates shall indicate that Borrower is in good standing in such
jurisdictions;
(h) Each Lender, to the extent it so requires, shall
have received a certificate of insurance, together with the endorsements
thereto, as are required by Section 6.10, the form and substance of which
shall be satisfactory to Agent, each Lender, and their respective counsel;
(i) Each Lender, to the extent it so requires, shall
have received stock certificates evidencing 100% of the issued and
outstanding shares of VA Sub or copies thereof, together with blank stock
powers executed by Borrower with respect thereto;
(j) [Intentionally omitted];
(k) Each Lender, to the extent it so requires, shall
have received an opinion of Borrower's counsel in form and substance
satisfactory to Agent and each Lender in their sole discretion;
(l) [Intentionally omitted];
(m) [Intentionally omitted];
(n) Each Lender, to the extent it so requires, shall
have received satisfactory evidence that all tax returns required to be
filed by Borrower have been timely filed and all taxes upon Borrower or
its properties, assets, income, and franchises (including real property
taxes and payroll taxes) have been paid prior to delinquency, except such
taxes that are the subject of a Permitted Protest;
(o) Each Lender or its designees, to the extent such
Lender requires, shall have completed its field survey and valuation of
the Collateral (which completion hereby is acknowledged), the results of
which shall in each case be satisfactory to Agent and each Lender (which
satisfactory results hereby are acknowledged by Agent and each Lender);
(p) Each Lender, to the extent it so requires, shall
have received and approved the Closing Date Business Plan (which is hereby
acknowledged by each Lender);
(q) Agent shall have received payment of all accrued
and unpaid Lender Group Expenses;
(r) Each Lender, to the extent it so requires, shall
have received satisfactory evidence that there has been no Material
Adverse Change in the financial condition of Borrower or the Collateral;
and
(s) all other documents and legal matters in
connection with the transactions contemplated by this Agreement shall have
been delivered, executed, or recorded and shall be in form and substance
satisfactory to Agent, each Lender, and their respective counsel.
3.2 Conditions Precedent to all Advances and Letters of Credit.
The following shall be conditions precedent to the making of all Advances
and the issuance of all Letters of Credit hereunder:
(a) the representations and warranties contained in
this Agreement and the other Loan Documents shall be true and correct in
all respects on and as of the date of such extension of credit, as though
made on and as of such date (except to the extent that such
representations and warranties relate solely to an earlier date);
(b) no Default or Event of Default shall have occurred
and be continuing on the date of such extension of credit, nor shall
either result from the making thereof;
(c) no injunction, writ, restraining order, or other
order of any nature prohibiting, directly or indirectly, the extending of
such credit shall have been issued and remain in force by any governmental
authority against Borrower, Agent, any Lender, or any of their Affiliates;
and
(d) if the covenant contained in Section 7.24 is
applicable, Borrower shall be in compliance therewith.
3.3 Conditions Subsequent.
As conditions subsequent to initial closing hereunder, Borrower shall
perform or cause to be performed the following (the failure by Borrower to
so perform or cause to be performed constituting an Event of Default):
(a) within 30 days of the Closing Date, deliver to
Agent the certified copies of the policies of insurance, together with the
endorsements thereto, as are required by Section 6.10, the form and
substance of which shall be satisfactory to Agent, each Lender, and their
respective counsel, or binders with respect thereto (and, if only binders
are provided within such 30 days, the certified policies and endorsements
shall be provided within 60 days of the Closing Date);
(b) within 90 days of the Closing Date, consummate the
Holding Company Reorganization, and deliver to Agent the Holding Company
Guaranty and the Stock Pledge Agreement, in each case, duly executed by
New Holding Company, together with the pledged stock certificates of
Borrower and Stock Powers related thereto executed in blank; provided,
however, that if within such time, Borrower has obtained approval of the
Holding Company Reorganization from Borrower's board of directors and
shareholders, and the Holding Company Reorganization is not consummated
within such time solely because Borrower has not received approvals from
such regulatory and other governmental agencies as are required to
consummate the Holding Company Reorganization, then so long as Borrower is
diligently proceeding with obtaining such approvals, Borrower shall have
such time as is reasonably necessary to obtain comply with the provisions
contained in this subsection;
(c) within 30 days of the Closing Date, deliver to
Agent satisfactory evidence as to all material copyrighted or
copyrightable works of authorship (including software and including
derivative works) owned by Borrower (as opposed to works with respect to
which Borrower is merely a licensee from a third party), and, if any such
material copyrighted or copyrightable works exist, within 60 days of the
Closing Date, the fully executed Copyright Security Agreement together
with satisfactory evidence that all material copyrights of Borrower that
are capable of being registered have been registered with the United
States Copyright Office, and that all such copyrights and any proceeds
thereof are specifically encumbered by the Copyright Security Agreement.
(d) within 120 days of the Closing Date, deliver to
Agent and each Lender a preliminary draft of a plan for the development of
the Network Services Group, and, within 180 days of the Closing Date,
deliver to Agent and each Lender a fully developed plan for the
development of the Network Services Group including a timetable and budget
for the implementation of such plan, which such plan, timetable, and
budget are reasonably satisfactory to Agent and each Lender.
(e) use its reasonable best efforts to, within 30 days
of the Closing Date, deliver to Agent an executed Collateral Access
Agreement from the landlord with respect to Borrower's new headquarters
facility on Bear Hill Road in Waltham, Massachusetts.
(f) within 30 days of the Closing Date, deliver to
Agent a general continuing guaranty executed and delivered by VA Sub with
respect to the Obligations, a general security agreement executed and
delivered by VA Sub securing VA Sub's obligations to the Lender Group
(including those arising under the previously referenced guaranty), such
financing statements with respect to VA Sub as Agent reasonably may
require, and an opinion of counsel for VA Sub covering such matters as
Agent reasonably may require, in each case in form and substance
satisfactory to Agent.
(g) within 7 days of the Closing Date, link the
Lockbox Account to the Agent Account, and, within 30 days of the Closing
Date, establish the zero balance disbursement account arrangement
currently underway between Borrower and Agent.
3.4 Term.
This Agreement shall become effective upon the execution and delivery
hereof by Borrower and the Lender Group and shall continue in full force
and effect for a term ending on the date (the "Maturity Date") that is 3
years from the Closing Date, unless sooner terminated pursuant to the
terms hereof. The foregoing notwithstanding, the obligations of the
Lender Group under this Agreement may be terminated pursuant to Section
9.1 upon the occurrence and during the continuation of an Event of
Default.
3.5 Effect of Termination.
On the date of termination of this Agreement, all Obligations (including
contingent reimbursement obligations of Borrower with respect to any
outstanding Letters of Credit) immediately shall become due and payable
without notice or demand. No termination of this Agreement, however,
shall relieve or discharge Borrower of Borrower's duties, Obligations, or
covenants hereunder, continuing security interests in the Collateral, for
the benefit of the Lender Group, shall remain in effect until all
Obligations have been fully and finally discharged and the Lender Group's
obligations to provide additional credit hereunder have been terminated.
If Borrower has sent a notice of termination pursuant to the provisions of
Section 3.4, but fails to pay the Obligations in full on the date set
forth in said notice, then the Lender Group may, but shall not be required
to, renew this Agreement for an additional term of 1 year.
3.6 Early Termination by Borrower.
The provisions of Section 3.4 that allow termination of this Agreement
by Borrower only on the Maturity Date notwithstanding, Borrower has the
option, at any time upon 10 Business Days prior written notice to Agent,
to terminate this Agreement by paying to Agent, for the ratable benefits
of the Lender Group, in cash, the Obligations (including either (i)
providing cash collateral to be held by Agent for the ratable benefit of
the Lender Group in an amount equal to 105% of the maximum amount of the
Lender Group's obligations under outstanding Letters of Credit, or (ii)
causing the original Letters of Credit to be returned to Agent) in full,
together with a premium (the "Early Termination Premium") equal to the
Applicable Prepayment Premium times the Maximum Revolving Amount. In the
event any such notice is timely received by Agent, and Borrower thereafter
fails to timely pay to Agent the amount set forth in the immediately
preceding sentence, such notice shall be deemed to never have been given.
3.7 Termination Upon Event of Default.
Subject to the last sentence of this section, if the Lender Group
terminates this Agreement upon the occurrence of an Event of Default, in
view of the impracticability and extreme difficulty of ascertaining actual
damages and by mutual agreement of the parties as to a reasonable
calculation of the Lender Group's lost profits as a result thereof,
Borrower shall pay to Agent, for the ratable benefit of the Lender Group,
upon the effective date of such termination, a premium in an amount equal
to the Early Termination Premium. The Early Termination Premium shall be
presumed to be the amount of damages sustained by the Lender Group as the
result of the early termination and Borrower agrees that it is reasonable
under the circumstances currently existing. The Early Termination Premium
provided for in this Section 3.7 shall be deemed included in the
Obligations. Anything in this section to the contrary notwithstanding, no
Early Termination Premium shall be payable under this section unless the
Lender Group affirmatively determines in good faith than any Event of
Default upon which the termination of this Agreement is premised was
intentionally caused by, or permitted to occur by, Borrower for the
purpose of evading payment of an Early Termination Premium that would be
payable in connection with the voluntary termination by Borrower of this
Agreement.
4. CREATION OF SECURITY INTEREST.
4.1 Grant of Security Interest.
Borrower hereby grants to Agent, for the benefit of the Lender Group a
continuing security interest in all currently existing and hereafter
acquired or arising Collateral in order to secure prompt repayment of any
and all Obligations and in order to secure prompt performance by Borrower
of each of its covenants and duties under the Loan Documents ("Agent's
Liens"). Agent's Liens in and to the Collateral shall attach to all
Collateral without further act on the part of the Lender Group or
Borrower. Anything contained in this Agreement or any other Loan Document
to the contrary notwithstanding, Borrower has no authority, express or
implied, to dispose of any item or portion of the Collateral, except for
(a) the sale of Inventory to buyers in the ordinary course of business, or
(b) so long as no Event of Default has occurred and is continuing,
dispositions of Equipment or other fixed assets which, in the aggregate
during any twelve-month period, have a fair market value or book value,
whichever is greater, of $1,000,000 or less, provided that (i) all
proceeds thereof are remitted to Agent for application to the Obligations,
or (ii) such Equipment or other fixed assets are substantially worn,
damaged or obsolete, replacement Equipment or other fixed assets of like
kind, function and value shall be acquired prior to or concurrently with
such disposition, and such replacement Equipment or other fixed assets are
free and clear of Liens other than Permitted Liens.
4.2 Negotiable Collateral.
In the event that any Collateral, including proceeds, is evidenced by or
consists of Negotiable Collateral, Borrower, immediately upon the request
of Agent, shall endorse and deliver physical possession of such Negotiable
Collateral to Agent.
4.3 Collection of Accounts, General Intangibles, and Negotiable
Collateral.
At any time that an Event of Default has occurred and is continuing,
Agent or Agent's designee may (a) notify customers or Account Debtors of
Borrower that the Accounts, General Intangibles, or Negotiable Collateral
have been assigned to Agent for the benefit of the Lender Group or that
Agent for the benefit of the Lender Group or that Agent for the benefit of
the Lender Group has a security interest therein, and (b) collect the
Accounts, General Intangibles, and Negotiable Collateral directly and
charge the collection costs and expenses to the Loan Account. Borrower
agrees that it will hold in trust for the Lender Group, as the Lender
Group's trustee, any Collections that it receives and immediately will
deliver said Collections to Agent in their original form as received by
Borrower.
4.4 Delivery of Additional Documentation Required.
At any time upon the request of Agent, Borrower shall execute and
deliver to Agent, all financing statements, continuation financing
statements, fixture filings, security agreements, pledges, assignments,
endorsements of certificates of title, applications for title, affidavits,
reports, notices, schedules of accounts, letters of authority, and all
other documents that Agent reasonably may request, in form satisfactory to
Agent, to perfect and continue perfected Agent's Liens on the Collateral
(whether now owned or hereafter arising or acquired), and in order to
fully consummate all of the transactions contemplated hereby and under the
other the Loan Documents.
4.5 Power of Attorney.
Borrower hereby irrevocably makes, constitutes, and appoints Agent (and
any of Agent's officers, employees, or agents designated by Agent) as
Borrower's true and lawful attorney, with power to (a) if Borrower refuses
to, or fails timely to execute and deliver any of the documents described
in Section 4.4, sign the name of Borrower on any of the documents
described in Section 4.4, (b) at any time that an Event of Default has
occurred and is continuing or Agent deems itself insecure, sign Borrower's
name on any invoice or ▇▇▇▇ of lading relating to any Account, drafts
against Account Debtors, schedules and assignments of Accounts,
verifications of Accounts, and notices to Account Debtors, or on any
notices to ▇▇▇▇ Atlantic with respect to assignment of the ▇▇▇▇ Atlantic
Agreements pursuant to the terms thereof, (c) send requests for
verification of Accounts, (d) endorse Borrower's name on any Collection
item that may come into the Lender Group's possession, (e) at any time
that an Event of Default has occurred and is continuing or Agent deems
itself insecure, notify the post office authorities to change the address
for delivery of Borrower's mail to an address designated by Agent, to
receive and open all mail addressed to Borrower, and to retain all mail
relating to the Collateral and forward all other mail to Borrower, (f) at
any time that an Event of Default has occurred and is continuing or Agent
deems itself insecure, make, settle, and adjust all claims under
Borrower's policies of insurance to the extent they pertain to the Agent
Priority Collateral and make all determinations and decisions with respect
to such policies of insurance to the extent they pertain to the Agent
Priority Collateral, and (g) at any time that an Event of Default has
occurred and is continuing or Agent deems itself insecure, settle and
adjust disputes and claims respecting the Accounts directly with Account
Debtors, for amounts and upon terms that Agent determines to be
reasonable, and Agent may cause to be executed and delivered any documents
and releases that Agent determines to be necessary. The appointment of
Agent as Borrower's attorney, and each and every one of Agent's rights and
powers, being coupled with an interest, is irrevocable until all of the
Obligations have been fully and finally repaid and performed and the
Lender Group's obligations to extend credit hereunder are terminated.
4.6 Right to Inspect.
Agent and each Lender (through any of their respective officers,
employees, or agents) shall have the right, from time to time hereafter to
inspect Borrower's Books and to check, test, and appraise the Collateral
in order to verify Borrower's financial condition or the amount, quality,
value, condition of, or any other matter relating to, the Collateral. So
long as no Event of Default has occurred and is continuing and Agent does
not deem itself insecure, audits and examinations of Borrower shall not be
conducted more frequently than quarterly. The out-of-pocket costs and
expenses of Agent and third parties employed or utilized by Agent in
connection with such examinations and audits shall be Lender Group
Expenses, provided that, so long as no Event of Default has occurred and
is continuing and Agent does not deem itself insecure, Borrower's
responsibility for payment of such Lender Group Expenses during any
calendar year shall not exceed 15 person-days per year of such costs and
expenses. Such audits and examinations may include examination and audit
of Borrower's Books, discussions with representatives of Borrower,
inspection and evaluation of Collateral and the perfection of Agent's
Liens therein, reconcilation of reports provided by Borrower to Agent,
verification of the Borrowing Base and the adequacy of any reserves, and
such other matters as are customarily included within the scope of audits
and examinations conducted by senior secured lenders.
5. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lender Group to enter into this Agreement, Borrower
makes the following representations and warranties to the Lender Group
which shall be true, correct, and complete in all respects as of the date
hereof, and shall be true, correct, and complete in all respects as of the
Closing Date, and at and as of the date of the making of each Advance or
issuance of each Letter of Credit thereafter, as though made on and as of
the date of such Advance or Letter of Credit (except to the extent that
such representations and warranties relate solely to an earlier date) and
such representations and warranties shall survive the execution and
delivery of this Agreement:
5.1 No Encumbrances.
Borrower has good and indefeasible title to the Collateral, free and
clear of Liens except for Permitted Liens.
5.2 [Intentionally Omitted].
5.3 [Intentionally Omitted].
5.4 Equipment.
All of the Equipment is used or held for use in Borrower's business and
is fit for such purposes.
5.5 Location of Inventory and Equipment.
The Inventory and Equipment are not stored with a bailee, warehouseman,
or similar party (without Agent's prior written consent) and are located
only at the locations identified on Schedule 6.12 or otherwise permitted
by Section 6.12.
5.6 Inventory Records.
Borrower keeps correct and accurate records itemizing and describing the
kind, type, quality, and quantity of the Inventory, and Borrower's cost
therefor.
5.7 Location of Chief Executive Office; FEIN.
The chief executive office of Borrower is located at the address
indicated in the preamble to this Agreement and Borrower's FEIN is 04-273-
1202.
5.8 Due Organization and Qualification; Subsidiaries.
(a) Borrower is duly organized and existing and in
good standing under the laws of the jurisdiction of its incorporation and
qualified and licensed to do business in, and in good standing in, any
state where the failure to be so licensed or qualified reasonably could be
expected to have a Material Adverse Change.
(b) Set forth on Schedule 5.8, is a complete and
accurate description of the authorized capital Stock of Borrower, by
class, and, as of the Closing Date, a description of the number of shares
of each such class that are issued and outstanding and the number of such
shares that are held in Borrower's treasury. Other than as described on
Schedule 5.8, all such outstanding shares have been validly issued and, as
of the Closing Date, are fully paid and nonassessable shares as to which
there are no contractual preemptive rights. The issuance and sale of all
such shares have been in compliance with all applicable federal and state
securities laws. Other than as described on Schedule 5.8, on the Closing
Date, there are no subscriptions, options, warrants, or calls relating to
any shares of Borrower's capital Stock, including any right of conversion
or exchange under any outstanding security or other instrument. Other
than as described on Schedule 5.8, Borrower is not subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of its capital Stock or any security convertible into or
exchangeable for any of its capital Stock.
(c) Set forth on Schedule 5.8, is a complete and
accurate list of Borrower's direct and indirect Subsidiaries, showing: (i)
the jurisdiction of their incorporation; (ii) the number of shares of each
class of common and preferred Stock authorized for each of such
Subsidiaries; and (iii) the number and the percentage of the outstanding
shares of each such class owned directly or indirectly by Borrower. All
of the outstanding capital Stock of each such Subsidiary has been validly
issued and is fully paid and non-assessable.
(d) Except as set forth on Schedule 5.8, no capital
Stock (or any securities, instruments, warrants, options, purchase rights,
conversion or exchange rights, calls, commitments or claims of any
character convertible into or exercisable for Stock) of any direct or
indirect Subsidiary of Borrower is subject to the issuance of any
security, instrument, warrant, option, purchase right, conversion or
exchange right, call, commitment or claim of any right, title, or interest
therein or thereto.
(e) VA Sub exists solely for the purpose of complying
with regulatory requirements of Virginia law, has no material assets other
than governmental licenses and permits, and does not engage in active
business operations other than proposed sales operations.
5.9 Due Authorization; No Conflict.
(a) The execution, delivery, and performance by
Borrower of this Agreement and the other Loan Documents to which it is a
party have been duly authorized by all necessary corporate action.
(b) The execution, delivery, and performance by
Borrower of this Agreement and the other Loan Documents to which it is a
party do not and will not (i) violate any provision of federal, state, or
local law or regulation (including Regulations T, U, and X of the Federal
Reserve Board) applicable to Borrower, the Governing Documents of
Borrower, or any order, judgment, or decree of any court or other
Governmental Authority binding on Borrower, (ii) conflict with, result in
a breach of, or constitute (with due notice or lapse of time or both) a
default under any material contractual obligation or material lease of
Borrower, (iii) result in or require the creation or imposition of any
Lien of any nature whatsoever upon any properties or assets of Borrower,
other than Permitted Liens, or (iv) require any approval of stockholders
or any approval or consent of any Person under any material contractual
obligation of Borrower.
(c) Other than the filing of appropriate financing
statements, fixture filings, and mortgages, the execution, delivery, and
performance by Borrower of this Agreement and the other Loan Documents to
which Borrower is a party do not and will not require any registration
with, consent, or approval of, or notice to, or other action with or by,
any federal, state, foreign, or other Governmental Authority or other
Person.
(d) This Agreement and the other Loan Documents to
which Borrower is a party, and all other documents contemplated hereby and
thereby, when executed and delivered by Borrower will be the legally valid
and binding obligations of Borrower, enforceable against Borrower in
accordance with their respective terms, except as enforcement may be
limited by equitable principles or by bankruptcy, insolvency,
reorganization, moratorium, or similar laws relating to or limiting
creditors' rights generally; provided that no representation or warranty
is made in this paragraph with respect to the Deposit Account Security
Agreement.
(e) The Agent's Liens granted by Borrower to Agent,
for the benefit of the Lender Group, in and to its properties and assets
pursuant to this Agreement and the other Loan Documents are validly
created, perfected, and first priority Liens, subject only to Permitted
Liens; provided that no representation or warranty is made in this
paragraph with respect to the Deposit Account Security Agreement.
5.10 Litigation.
There are no actions or proceedings pending by or against Borrower
before any court or administrative agency and Borrower does not have
knowledge or belief of any pending, threatened, or imminent litigation,
governmental investigations, or claims, complaints, actions, or
prosecutions involving Borrower or any guarantor of the Obligations,
except for: (a) ongoing collection matters in which Borrower is the
plaintiff; (b) matters disclosed on Schedule 5.10; and (c) matters arising
after the date hereof that, if decided adversely to Borrower, reasonably
could not be expected to result in a Material Adverse Change.
5.11 No Material Adverse Change.
All financial statements relating to Borrower or any guarantor of the
Obligations that have been delivered by Borrower to the Lender Group have
been prepared in accordance with GAAP (except, in the case of unaudited
financial statements, for the lack of footnotes and being subject to year-
end audit adjustments) and fairly present Borrower's (or such guarantor's,
as applicable) financial condition as of the date thereof and Borrower's
results of operations for the period then ended. There has not been a
Material Adverse Change with respect to Borrower (or such guarantor, as
applicable) since March 31, 1998.
5.12 Fraudulent Transfer.
(a) Borrower is Solvent.
(b) No transfer of property is being made by Borrower
and no obligation is being incurred by Borrower in connection with the
transactions contemplated by this Agreement or the other Loan Documents
with the intent to hinder, delay, or defraud either present or future
creditors of Borrower.
5.13 Employee Benefits.
None of Borrower, any of its Subsidiaries, or any of their ERISA
Affiliates maintains or contributes to any Benefit Plan, other than those
listed on Schedule 5.13. Borrower, each of its Subsidiaries and each
ERISA Affiliate have satisfied the minimum funding standards of ERISA and
the IRC with respect to each Benefit Plan to which it is obligated to
contribute. No ERISA Event has occurred nor has any other event occurred
that may result in an ERISA Event that reasonably could be expected to
result in a Material Adverse Change. None of Borrower or its
Subsidiaries, any ERISA Affiliate, or any fiduciary of any Plan is subject
to any direct or indirect liability with respect to any Plan under any
applicable law, treaty, rule, regulation, or agreement. None of Borrower
or its Subsidiaries or any ERISA Affiliate is required to provide security
to any Plan under Section 401(a)(29) of the IRC.
5.14 Environmental Condition.
None of Borrower's properties or assets has ever been used by Borrower
or, to the best of Borrower's knowledge, by previous owners or operators
in the disposal of, or to produce, store, handle, treat, release, or
transport, any Hazardous Materials. None of Borrower's properties or
assets has ever been designated or identified in any manner pursuant to
any environmental protection statute as a Hazardous Materials disposal
site, or a candidate for closure pursuant to any environmental protection
statute. No Lien arising under any environmental protection statute has
attached to any revenues or to any real or personal property owned or
operated by Borrower. Borrower has not received a summons, citation,
notice, or directive from the Environmental Protection Agency or any other
federal or state governmental agency concerning any action or omission by
Borrower resulting in the releasing or disposing of Hazardous Materials
into the environment.
5.15 Brokerage Fees.
No brokerage commission or finders fees has or shall be incurred or
payable in connection with or as a result of Borrower's obtaining
financing from the Lender Group under this Agreement, and Borrower has not
utilized the services of any broker or finder in connection with
Borrower's obtaining financing from the Lender Group under this Agreement.
5.16 Year 2000 Compliance.
(a) On the basis of a comprehensive inventory, review
and assessment currently being undertaken by Borrower of Borrower's
computer applications utilized by Borrower or contained in products
produced or sold by Borrower, and upon inquiry made of Borrower's material
suppliers and vendors, Borrower's management is of the considered view
that Borrower, its products, and all such suppliers and vendors will be
Year 2000 Compliant before October 1, 1999.
(b) Borrower (i) has undertaken a detailed inventory,
review and assessment of all areas within its business and operations that
could be adversely affected by the failure of Borrower or its products to
be Year 2000 Compliant on a timely basis, (ii) is developing a detailed
plan and timeline for becoming Year 2000 Compliant on a timely basis, and
(iii) to date, is implementing that plan in accordance with that timetable
in all material respects. Borrower reasonably anticipates that it will be
Year 2000 Compliant on a timely basis.
5.17 Intellectual Property.
Borrower and each of its Subsidiaries own, or hold licenses in, all
trademarks, trade names, copyrights, patents, patent rights, and licenses
which are necessary in all material respects to conduct their respective
businesses and to operate their respective properties as now conducted and
operated. The consummation of the transactions contemplated by this
Agreement and the Loan Documents will not alter or impair any of such
rights of Borrower or any of its Subsidiaries.
5.18 Leases.
Borrower and each of its Subsidiaries enjoy peaceful and undisturbed
possession under all leases material to the business, operations, and
financial condition of Borrower and its Subsidiaries, taken as a whole, to
which any of them is a party or under which any of them is operating. All
of such leases are valid and subsisting and no material default by
Borrower or any of its Subsidiaries exists under any of them.
6. AFFIRMATIVE COVENANTS.
Borrower covenants and agrees that, so long as any credit hereunder shall
be available and until full and final payment of the Obligations, and
unless the Lender Group shall otherwise consent in writing, Borrower shall
do all of the following:
6.1 Accounting System.
Maintain a standard and modern system of accounting that enables
Borrower to produce financial statements in accordance with GAAP, and
maintain records pertaining to the Collateral that contain information as
from time to time may be requested by Agent. Borrower also shall keep a
modern inventory reporting system that shows all additions, sales, claims,
returns, and allowances with respect to the Inventory.
6.2 Collateral Reporting.
Provide Agent with the following documents at the following times in
form satisfactory to Agent: (a) on a weekly basis and, in any event, by no
later than the 2nd Business Day following the last day of each week (for
which purpose weeks shall be deemed to end at the close of business on
each Friday) during the term of this Agreement, a detailed calculation of
the Borrowing Base, (b) on a monthly basis and, in any event, by no later
than the 10th day of each month during the term of this Agreement, a
detailed aging, by total, of the Accounts, together with a reconciliation
to the detailed calculation of the Borrowing Base previously provided to
Agent, (c) on a monthly basis and, in any event, by no later than the 25th
day of each month during the term of this Agreement, (i) a summary aging,
by vendor, of Borrower's accounts payable and any book overdraft, (ii) a
report detailing additions to the Cisco Priority Collateral during the
month most recently ended, (iii) a report of Borrower's ▇▇▇▇▇▇▇▇,
collections, and billing adjustments for the month most recently ended,
(iv) a report summarizing provisioned access line equivalents added by
Borrower during the month most recently ended, and (v) a report of
Borrower's revenues for the month most recently ended, (d) upon specific
request, copies of invoices in connection with the Accounts, and copies of
purchase orders and invoices for Inventory and Equipment acquired by
Borrower, (e) upon specific request, a detailed list of Borrower's
customers, and (f) such other reports as to the Collateral or the
financial condition of Borrower as Agent reasonably may request from time
to time. Statements evidencing monthly sales shall be mailed by Borrower
to each Account Debtor.
6.3 Financial Statements, Reports, Certificates.
Deliver to Agent, with copies to each Lender (a) as soon as available,
but in any event within 45 days after the end of each month during each of
Borrower's fiscal years, a company prepared balance sheet, income
statement, and statement of cash flow covering Borrower's operations
during such period (including quarterly information with respect to each
month that is the end of a fiscal quarter of Borrower); provided that
monthly financial statements with respect to any month that is not the
last month of a fiscal quarter of Borrower need not contain all detail
that would be required by GAAP, may be subject to quarter-end and year-end
adjustments, and will be sufficient hereunder if they are in the same form
as is submitted internally by Borrower to the senior management of
Borrower, and quarterly financial statements of Borrower may be subject to
year-end adjustments; and (b) as soon as available, but in any event
within 90 days after the end of each of Borrower's fiscal years, financial
statements of Borrower for each such fiscal year, audited by independent
certified public accountants reasonably acceptable to Agent and certified,
without any qualifications, by such accountants to have been prepared in
accordance with GAAP, together with a certificate of such accountants
addressed to Agent stating that such accountants do not have knowledge of
the existence of any Default or Event of Default. Such audited financial
statements shall include a balance sheet, profit and loss statement, and
statement of cash flow and, if prepared, such accountants' letter to
management. If Borrower is a parent company of one or more Subsidiaries,
or Affiliates, or is a Subsidiary or Affiliate of another company, then,
in addition to the financial statements referred to above, Borrower agrees
to deliver financial statements prepared on a consolidating basis so as to
present Borrower and each such related entity separately, and on a
consolidated basis.
Together with the above, Borrower also shall deliver to Agent, with copies
to each Lender, Borrower's Form 10-Q Quarterly Reports, Form 10-K Annual
Reports, and Form 8-K Current Reports, and any other filings made by
Borrower with the Securities and Exchange Commission, if any, as soon as
the same are filed, or any other information that is provided by Borrower
to its shareholders, and any other report reasonably requested by the
Lender Group relating to the financial condition of Borrower (including,
without limitation, any oral reports regarding the status of Borrower's
litigation with ▇▇▇▇ Atlantic from time to time requested by Agent).
Each month, together with the financial statements provided pursuant to
Section 6.3(a), Borrower shall deliver to Agent, with copies to each
Lender, a certificate signed by its treasurer or chief financial officer
to the effect that: (i) all financial statements delivered or caused to
be delivered to any one or more members of the Lender Group hereunder have
been prepared in accordance with GAAP (except, in the case of unaudited
financial statements, for the lack of footnotes or other detail and being
subject to year-end (and in the case of monthly statements for months
other than the last month of a fiscal quarter of Borrower, quarter-end
adjustments, and provided, further, that, with respect to such monthly
statements, such certificate may be qualified by the representation that
such financial statements may not be fully in compliance with GAAP but are
in the same form as is provided internally by Borrower to the senior
management of Borrower) and (subject to the qualifications permitted
above) fairly present the financial condition of Borrower, (ii) the
representations and warranties of Borrower contained in this Agreement and
the other Loan Documents are true and correct in all material respects on
and as of the date of such certificate, as though made on and as of such
date (except to the extent that such representations and warranties relate
solely to an earlier date), (iii) for each month that also is the date on
which a financial covenant in Section 7.20 is to be tested, a Compliance
Certificate demonstrating in reasonable detail compliance at the end of
such period with the applicable financial covenants contained in
Section 7.20, and (iv) on the date of delivery of such certificate to
Agent there does not exist any condition or event that constitutes a
Default or Event of Default (or, in the case of clauses (i), (ii), or
(iii), to the extent of any non-compliance, describing such non-compliance
as to which he or she may have knowledge and what action Borrower has
taken, is taking, or proposes to take with respect thereto).
Subject to the limitation contained at the end of this paragraph, Borrower
shall have issued written instructions to its independent certified public
accountants authorizing them to communicate with Agent and to release to
Agent whatever financial information concerning Borrower that Agent may
request. Borrower hereby irrevocably authorizes and directs all auditors,
accountants, or other third parties to deliver to Agent, at Borrower's
expense, copies of Borrower's financial statements, papers related
thereto, and other accounting records of any nature in their possession,
and to disclose to Agent any information they may have regarding
Borrower's business affairs and financial conditions. The foregoing
notwithstanding, Agent shall request any such information in the first
instance from Borrower, shall give Borrower a reasonable opportunity
itself to obtain such information for Agent and provide same to Agent, and
shall not directly contact Borrower's auditors, accountants, or other
third parties unless Borrower fails to provide the requested information
within 10 days.
6.4 Tax Returns.
Deliver to Agent copies of each of Borrower's future federal income tax
returns, and any amendments thereto, within 30 days of the filing thereof
with the Internal Revenue Service. Deliver satisfactory evidence of
payment of applicable excise taxes in each jurisdictions in which (a)
Borrower conducts business or is required to pay any such excise tax, (b)
where Borrower's failure to pay any such applicable excise tax would
result in a Lien on the properties or assets of Borrowers, or (c) where
Borrower's failure to pay any such applicable excise tax would constitute
a Material Adverse Change.
6.5 Guarantor Reports.
After the Holding Company Reorganization is consummated, cause New
Holding Company to deliver its annual financial statements at the time
when Borrower provides its audited financial statements to Agent and
copies of all federal income tax returns as soon as the same are available
and in any event no later than 30 days after the same are required to be
filed by law.
6.6 Certain Information in Connection With Acquisitions.
Prior to making any acquisition governed by Section 7.13(a), Borrower
shall provide to Agent updated Projections through the Maturity Date that
give effect to such acquisition on a pro forma basis and demonstrate that
Borrower will have sufficient working capital after giving effect to such
acquisition to operate its business and perform the Obligations in
accordance with their terms. If such acquisition is based in whole or in
part on subsections 7.13(a)(C) or (D), then, before such acquisition may
be consummated, Required Lenders must approve such Projections, which
approval shall not unreasonably be withheld.
6.7 Title to Equipment.
Upon Agent's request, and subject to the terms of the Intercreditor
Agreement, Borrower immediately shall deliver to Agent, properly endorsed,
any and all evidences of ownership of, certificates of title, or
applications for title to any items of Equipment other than Cisco Priority
Collateral or Equipment subject to Permitted Liens with priority over
those of Agent.
6.8 Maintenance of Equipment.
Maintain the Equipment in good operating condition and repair (ordinary
wear and tear excepted), and make all necessary replacements thereto so
that the value and operating efficiency thereof shall at all times be
maintained and preserved. Other than those items of Equipment that
constitute fixtures on the Closing Date, Borrower shall not permit any
item of Equipment to become a fixture to real estate or an accession to
other property, and such Equipment shall at all times remain personal
property.
6.9 Taxes.
Cause all assessments and taxes, whether real, personal, or otherwise,
due or payable by, or imposed, levied, or assessed against Borrower or any
of its property to be paid in full, before delinquency or before the
expiration of any extension period, except to the extent that the validity
of such assessment or tax shall be the subject of a Permitted Protest.
Borrower shall make due and timely payment or deposit of all such federal,
state, and local taxes, assessments, or contributions required of it by
law, and will execute and deliver to Agent, on demand, appropriate
certificates attesting to the payment thereof or deposit with respect
thereto. Borrower will make timely payment or deposit of all tax payments
and withholding taxes required of it by applicable laws, including those
laws concerning F.I.C.A., F.U.T.A., state disability, and local, state,
and federal income taxes, and will, upon request, furnish Agent with proof
satisfactory to Agent indicating that Borrower has made such payments or
deposits.
6.10 Insurance.
(a) At its expense, keep the Collateral insured
against loss or damage by fire, theft, explosion, sprinklers, and all
other hazards and risks, and in such reasonable amounts, as are ordinarily
insured against by other owners in similar businesses. Upon the request
of Agent, Borrower also shall maintain reasonable amounts of business
interruption, public liability, product liability, and property damage
insurance relating to Borrower's ownership and use of the Collateral, as
well as reasonable amounts of insurance against larceny, embezzlement, and
criminal misappropriation.
(b) At its expense, obtain and maintain (i) insurance
of the type necessary to insure any improvements and chattels for the full
replacement cost thereof, against any loss by fire, lightning, windstorm,
hail, explosion, aircraft, smoke damage, vehicle damage, earthquakes,
elevator collision, and other risks from time to time included under
"extended coverage" policies, in such amounts as Agent reasonably may
require, but in any event in amounts sufficient to prevent Borrower from
becoming a co-insurer under such policies, (ii) combined single limit
bodily injury and property damages insurance against any loss, liability,
or damages on, about, or relating to each business location of Borrower,
in reasonable amounts; and (iii) insurance for such other risks as Agent
reasonably may require. Replacement costs, at Agent's option, may be
redetermined by an insurance appraiser, satisfactory to Agent, not more
frequently than once every 12 months at Borrower's cost.
(c) All such policies of insurance shall be in such
form, with such companies, and in such amounts as may be reasonably
satisfactory to Agent. All insurance required herein shall be written by
companies which have a Best's rating of A for capital and X for financial
stability. All hazard insurance, and such other insurance as Agent
reasonably shall specify, shall contain a standard form mortgagee
endorsement, or an equivalent endorsement satisfactory to Agent, showing
Agent as loss payee thereof as its interests may appear, and shall contain
a waiver of the insurer's right to deny coverage to Agent based on any
breach of warranty by Borrower. Every policy of insurance referred to in
this Section 6.10 shall contain an agreement by the insurer that it will
not cancel such policy except after 30 days prior written notice to Agent
and that any loss payable thereunder shall be payable notwithstanding any
act or negligence of Borrower or the Lender Group which might, absent such
agreement, result in a forfeiture of all or a part of such insurance
payment and notwithstanding (i) occupancy or use of the Collateral for
purposes more hazardous than permitted by the terms of such policy, (ii)
any foreclosure or other action or proceeding taken by the Lender Group
pursuant to the Loan Documents upon the happening of an Event of Default,
or (iii) any change in title or ownership of the Collateral. Upon
request, Borrower shall deliver to Agent certified copies of such policies
of insurance and evidence of the payment of all premiums therefor.
(d) Original policies or certificates thereof or
binders with respect thereto reasonably satisfactory to Agent evidencing
such insurance shall be delivered to Agent prior to the expiration of the
existing or preceding policies. Borrower shall give Agent prompt notice
of any loss covered by such insurance. Subject to the terms of the
Intercreditor Agreement and any rights of CISCO with respect to the
adjustment of losses pertaining to the CISCO Priority Collateral, Agent
shall have the exclusive right to adjust all material losses payable under
any such insurance policies without any liability to Borrower whatsoever
in respect of such adjustments. Subject to the terms of the Intercreditor
Agreement with respect to the rights of CISCO as to any monies payable
with respect to CISCO Priority Collateral, any monies received as payment
for any loss under any insurance policy including the insurance policies
mentioned above, to the extent it pertains to the Agent Priority
Collateral, shall be paid over to Agent to be applied at the option of the
Required Lenders either to the prepayment of the Obligations without
premium, in such order or manner as Agent may elect, or shall be disbursed
to Borrower under staged payment terms satisfactory to Agent for
application to the cost of repairs, replacements, or restorations. All
repairs, replacements, or restorations shall be effected with reasonable
promptness and shall be of a value at least equal to the value of the
items or property destroyed prior to such damage or destruction. Upon the
occurrence of an Event of Default, the Lender Group shall have the right
to apply all prepaid premiums to the payment of the Obligations in such
order or form as Agent shall determine.
(e) Borrower shall not take out separate insurance
concurrent in form or contributing in the event of loss with that required
to be maintained under this Section 6.10, unless Agent is included thereon
as named insured with the loss payable to Agent under a standard form
mortgagee endorsement, or its local equivalent. Borrower immediately
shall notify Agent whenever such separate insurance is taken out,
specifying the insurer thereunder and full particulars as to the policies
evidencing the same, and originals of such policies, or binders with
respect thereto, immediately shall be provided to Agent.
6.11 No Setoffs or Counterclaims.
Make payments hereunder and under the other Loan Documents by or on
behalf of Borrower without setoff or counterclaim and free and clear of,
and without deduction or withholding for or on account of, any federal,
state, or local taxes.
6.12 Location of Inventory and Equipment.
Keep the Inventory and Equipment only at the locations identified on
Schedule 6.12; provided, however, that Borrower may amend Schedule 6.12 so
long as such amendment occurs by written notice to Agent not less than 30
days prior to the date on which the Inventory or Equipment is moved to
such new location, so long as such new location is within the continental
United States, and so long as, at the time of such written notification,
Borrower provides any financing statements or fixture filings necessary to
perfect and continue perfected the Agent's Liens on such assets and also
provides to Agent a Collateral Access Agreement.
6.13 Compliance with Laws.
Comply with the requirements of all applicable laws, rules, regulations,
and orders of any governmental authority, including the Fair Labor
Standards Act and the Americans With Disabilities Act, and all orders,
judgments, or decrees of any court, in each case, other than laws, rules,
regulations, orders, judgments, or decrees the non-compliance with which,
individually or in the aggregate, would not result in and reasonably could
not be expected to result in a Material Adverse Change.
6.14 Employee Benefits.
(a) Cause to be delivered to Agent, each of the
following: (i) promptly, and in any event within 10 Business Days after
Borrower or any of its Subsidiaries knows or has reason to know that an
ERISA Event has occurred that reasonably could be expected to result in a
Material Adverse Change, a written statement of the chief financial
officer of Borrower describing such ERISA Event and any action that is
being taking with respect thereto by Borrower, any such Subsidiary or
ERISA Affiliate, and any action taken or threatened by the IRS, Department
of Labor, or PBGC. Borrower or such Subsidiary, as applicable, shall be
deemed to know all facts known by the administrator of any Benefit Plan of
which it is the plan sponsor, (ii) promptly, and in any event within 3
Business Days after the filing thereof with the IRS, a copy of each
funding waiver request filed with respect to any Benefit Plan and all
communications received by Borrower, any of its Subsidiaries or, to the
knowledge of Borrower, any ERISA Affiliate with respect to such request,
and (iii) promptly, and in any event within 3 Business Days after receipt
by Borrower, any of its Subsidiaries or, to the knowledge of Borrower, any
ERISA Affiliate, of the PBGC's intention to terminate a Benefit Plan or to
have a trustee appointed to administer a Benefit Plan, copies of each such
notice.
(b) Cause to be delivered to Agent, upon Agent's
request, each of the following: (i) a copy of each Plan (or, where any
such plan is not in writing, complete description thereof) (and if
applicable, related trust agreements or other funding instruments) and all
amendments thereto, all written interpretations thereof and written
descriptions thereof that have been distributed to employees or former
employees of Borrower or its Subsidiaries; (ii) the most recent
determination letter issued by the IRS with respect to each Benefit Plan;
(iii) for the three most recent plan years, annual reports on Form 5500
Series required to be filed with any governmental agency for each Benefit
Plan; (iv) all actuarial reports prepared for the last three plan years
for each Benefit Plan; (v) a listing of all Multiemployer Plans, with the
aggregate amount of the most recent annual contributions required to be
made by Borrower or any ERISA Affiliate to each such plan and copies of
the collective bargaining agreements requiring such contributions;
(vi) any information that has been provided to Borrower or any ERISA
Affiliate regarding withdrawal liability under any Multiemployer Plan; and
(vii) the aggregate amount of the most recent annual payments made to
former employees of Borrower or its Subsidiaries under any Retiree Health
Plan.
6.15 Leases.
(a) Pay when due all rents and other amounts payable
under any leases to which Borrower is a party or by which Borrower's
properties and assets are bound, unless such payments are the subject of a
Permitted Protest. To the extent that Borrower fails timely to make
payment of such rents and other amounts payable when due under its leases,
Agent shall be entitled, in its discretion, to reserve an amount equal to
such unpaid amounts against the Borrowing Base.
(b) With respect to each lease entered into by
Borrower after the Closing Date relative to the placement of switches or
other Equipment integral to the operation of Borrower's business, Borrower
shall only enter into such lease if (i) Borrower has exerted its best
efforts to negotiate provisions in such lease that permit its free
assignability by Borrower, (ii) subject to obtaining any required consent
referred to in clause (iii) below, Borrower has executed a collateral
assignment of Borrower's rights under such lease in favor of Agent for the
benefit of the Lender Group,(iii) if required by the terms of such lease
or applicable law, Borrower has exerted its best efforts to cause the
lessor under such lease to have consented to such collateral assignment,
and (iv) Borrower has exerted its best efforts to cause such lessor to
enter into a Collateral Access Agreement with Agent.
6.16 Brokerage Commissions.
Borrower agrees to indemnify, defend, and hold Agent and the Lender
Group harmless from and against any claim of any broker or finder arising
out of Borrower's obtaining financing from the Lender Group under this
Agreement.
6.17 Year 2000 Compliance.
Be Year 2000 Compliant by October 1, 1999.
6.18 Projections.
Not later than 30 days after annual budgets have been presented to the
board of directors of Borrower, but in any event not later than the 90th
day of the first fiscal year of Borrower to which such Projections relate,
deliver to Agent Projections of Borrower, in form and substance (including
as to scope and underlying assumptions) satisfactory to each Lender in its
discretion, for the forthcoming 3 fiscal years of Borrower, year by year,
and for the forthcoming fiscal year of Borrower, quarter by quarter,
certified by the Clerk of Borrower as being true, correct, and complete
and certified by the chief financial officer of Borrower as being such
officer's good faith best estimate of the financial performance of
Borrower during the period covered thereby.
6.19 Corporate Existence, etc.
At all time preserve and keep in full force and effect Borrower's valid
corporate existence and good standing and any rights and franchises
material to Borrower's businesses.
6.20 Disclosure Updates.
Promptly and in no event later than 5 Business Days after obtaining
knowledge thereof, (i) notify Agent if any written information, exhibit,
or report furnished to the Lender Group contained any untrue statement of
a material fact or omitted to state any material fact necessary to make
the statements contained therein not misleading in light of the
circumstances in which made, and (ii) correct any defect or error that may
be discovered therein or in any Loan Document or in the execution,
acknowledgement, filing, or recordation thereof.
6.21 Modification of Standard Forms.
Promptly following the Closing Date, modify Borrower's standard forms of
contracts used with its customers, on a prospective basis, expressly to
provide for the assignability of Borrower's rights thereunder, and, to the
maximum extent practicable, require the use of such modified forms going
forward (subject to good faith negotiated changes in individual
transactions, and subject to the possibility of not being able to use such
forms in transactions with parties of superior bargaining power who insist
on the use of different forms); provided that Borrower shall not be
required to modify existing customer contracts currently in effect.
7. NEGATIVE COVENANTS.
Borrower covenants and agrees that, so long as any credit hereunder shall
be available and until full and final payment of the Obligations, Borrower
will not do any of the following without the Lender Group's prior written
consent:
7.1 Secured Indebtedness.
Create, incur, assume, or permit to exist, directly or indirectly, any
secured Indebtedness other than:
(a) Indebtedness secured by Permitted Liens; and
(b) refinancings, renewals, or extensions of
Indebtedness permitted under clause (a) of this Section 7.1 (and
continuances of any Permitted Liens associated therewith) so long as: (i)
the terms and conditions of such refinancings, renewals, or extensions do
not materially impair the prospects of repayment of the Obligations by
Borrower, (ii) the net cash proceeds of such refinancings, renewals, or
extensions do not result in an increase in the aggregate principal amount
of the Indebtedness so refinanced, renewed, or extended, (iii) such
refinancings, renewals, refundings, or extensions do not result in a
shortening of the average weighted maturity of the Indebtedness so
refinanced, renewed, or extended, and (iv) to the extent that Indebtedness
that is refinanced was subordinated in right of payment to the
Obligations, then the subordination terms and conditions of the
refinancing Indebtedness must be at least as favorable to the Lender Group
as those applicable to the refinanced Indebtedness.
7.2 Liens.
Create, incur, assume, or permit to exist, directly or indirectly, any
Lien on or with respect to any of its property or assets, of any kind,
whether now owned or hereafter acquired, or any income or profits
therefrom, except for Permitted Liens (including Liens that are
replacements of Permitted Liens to the extent that the original
Indebtedness is refinanced under Section 7.1(b) and so long as the
replacement Liens only encumber those assets or property that secured the
original Indebtedness; provided, however, that with respect to any
refinacings, renewals, or extensions of Indebtedness to Cisco with a
Person other than Cisco, the replacement Liens shall not encumber any
assets or property that secured the original Indebtedness that is not
Cisco Priority Collateral ).
7.3 Restrictions on Fundamental Changes.
(a) Enter into any merger, consolidation,
reorganization, or recapitalization, or reclassify its Stock with the
exception of the Holding Company Reorganization.
(b) Liquidate, wind up, or dissolve itself (or suffer
any liquidation or dissolution).
(c) Convey, sell, assign, lease, transfer, or
otherwise dispose of, in one transaction or a series of transactions, all
or any substantial part of its property or assets.
7.4 Disposal of Assets.
Sell, lease, assign, transfer, or otherwise dispose of any of Borrower's
properties or assets other than sales of Inventory to buyers in the
ordinary course of Borrowers business as currently conducted, except as
permitted by Section 4.1.
7.5 Change Name.
Change Borrower's name, FEIN, corporate structure (within the meaning of
Section 9-402(7) of the Code), or identity, or add any new fictitious
name.
7.6 Guarantee.
Guarantee or otherwise become in any way liable with respect to the
obligations of any third Person except by endorsement of instruments or
items of payment for deposit to the account of Borrower or which are
transmitted or turned over to Agent.
7.7 Nature of Business.
Make any change in the principal nature of Borrower's business.
Borrower shall not permit VA Sub to acquire any material assets other than
governmental licenses and permits, nor to engage in active business
operations other than proposed sales operations.
7.8 Prepayments and Amendments.
To the extent repayments or redemptions are prohibited under the
Intercreditor Agreement, any other intercreditor agreement, or any
subordination agreement, as applicable, entered into in connection with
such Indebtedness prepay, redeem, retire, defease, purchase, or otherwise
acquire any Indebtedness owing to any third Person, other than the
Obligations in accordance with this Agreement. Borrower shall not enter
into any amendment of the Cisco Financing Documents that would change the
amortization of Borrower's obligations thereunder, as contemplated by the
term sheet provided to Lenders prior to the Closing Date, without the
prior written consent of the Required Lenders. Borrower shall not agree
in the Cisco Financing Documents to a cross-default provision with the
Loan Documents, but may agree to a cross-acceleration provision.
7.9 Cisco Transactions.
Enter into any secured credit transaction with Cisco other than
substantially in accordance with the term sheet presented by Borrower to
Lenders prior to the Closing Date (provided that the aggregate amount of
such transactions is not limited to $25,000,000, and may exceed such
amount so long as the other terms thereof are substantially in accordance
with, or more favorable to Borrower than, the other applicable provisions
of such term sheet) and pursuant to Cisco Financing Documents in form and
substance reasonably satisfactory to Agent.
7.10 Margin Stock.
Use or permit the use of any of the proceeds of the Advances, directly
or indirectly, for the purpose of purchasing or carrying, or for the
purpose of reducing or retiring any indebtedness which was originally
incurred to purchase or carry, any Margin Stock (as defined in Regulation
U referred to below) or for any other purpose which might constitute the
transactions contemplated hereby a "purpose credit" within the meaning of
Regulation U (12 CFR Part 221) of the Board of Governors of the Federal
Reserve System, or cause any Advance, the application of proceeds thereof
or this Agreement to violate Regulation U, Regulation T or Regulation X of
the Board of Governors of the Federal Reserve System or any other
regulation of such Board or the Securities Exchange Act of 1934, as
amended, or any rules or regulations promulgated under such statutes.
7.11 Distributions.
Except for Permitted Distributions, make (or permit New Holding Company
to make) any distribution or declare or pay (or permit New Holding Company
to declare or pay) any dividends (in cash or other property, other than
Stock) on, or purchase, acquire, redeem, or retire any of Borrower's Stock
(or permit New Holding Company to purchase, acquire, redeem, or retire any
of New Holding Company's Stock), of any class, whether now or hereafter
outstanding.
7.12 Accounting Methods.
Modify or change its method of accounting or enter into, modify, or
terminate any agreement currently existing, or at any time hereafter
entered into with any third party accounting firm or service bureau for
the preparation or storage of Borrower's accounting records without said
accounting firm or service bureau agreeing to provide Agent information
regarding the Collateral or Borrower's financial condition. Borrower
waives the right to assert a confidential relationship, if any, it may
have with any accounting firm or service bureau in connection with any
information requested by Agent pursuant to or in accordance with this
Agreement, and agrees that Agent may contact directly any such accounting
firm or service bureau in order to obtain such information.
7.13 Investments.
(a) Directly or indirectly make, acquire, or incur
any liabilities (including contingent obligations), which, in the
aggregate, exceed the sum of (A) $5,000,000, plus (B) $10,000,000 of Stock
of Borrower or New Holding Company (but not cash or other property other
than Stock of Borrower or New Holding Company), plus (C) 85% of the amount
of New Capital Proceeds actually contributed by New Holding Company to
Borrower after the Closing Date, plus (D) Old ▇▇▇▇ Atlantic Collections in
excess of $10,000,000 (if any), for or in connection with (i) the
acquisition of the securities (whether debt or equity) of, or other
interests in, a Person, (ii) loans, advances, capital contributions, or
transfers of property to a Person, in connection with any acquisition
permitted by clause (i) or clause (iii) of this paragraph, or (iii) the
acquisition of all or substantially all of the properties or assets of a
Person; provided that, in the case of any acquisition of any Subsidiary,
Borrower shall cause to be provided to the Lender Group a pledge of the
Stock of such Subsidiary, a guaranty from such Subsidiary of the
Obligations, and a first priority Lien (subject only to Permitted Liens)
on the assets of such Subsidiary to secure the obligations of such
Subsidiary under its previously referenced guaranty, in each case in form
and substance satisfactory to Agent.
(b) Permit New Holding Company directly or indirectly
to make, acquire, or incur any liabilities (including contingent
obligations) for or in connection with (i) the acquisition of the
securities (whether debt or equity) of, or other interests in, a Person,
(ii) loans, advances, capital contributions, or transfers of property to a
Person, or (iii) the acquisition of all or substantially all of the
properties or assets of a Person.
7.14 Transactions with Affiliates.
Directly or indirectly enter into or permit to exist any material
transaction with any Affiliate of Borrower except for (a) transactions set
forth on Schedule 7.14, or (b) transactions that are in the ordinary
course of Borrower's business, upon fair and reasonable terms, that are
fully disclosed to Agent, and that are no less favorable to Borrower than
would be obtained in an arm's length transaction with a non-Affiliate.
7.15 Suspension.
Suspend or go out of a substantial portion of its business.
7.16 [Intentionally Omitted].
7.17 Use of Proceeds.
(a) Use the proceeds of the Advances made hereunder
for any purpose other than (i) on the Closing Date, (y) to repay in full
the outstanding principal, accrued interest, and accrued fees and expenses
owing to Existing Lender, and (z) to pay transactional fees, costs, and
expenses incurred in connection with this Agreement, and (ii) thereafter,
consistent with the terms and conditions hereof, for its lawful and
permitted corporate purposes, provided, however, that until such time as
Borrower obtains equipment financing pursuant to the Cisco Financing
Documents or other similar vendor financing acceptable to the Lender
Group, Borrower shall not use the proceeds of the Advances made hereunder
for Network Capex.
(b) Cause permit any proceeds of any Cisco Priority
Collateral to be deposited into the Lockboxes or the Lockbox Account.
7.18 Change in Location of Chief Executive Office; Inventory and
Equipment with Bailees.
Relocate its chief executive office to a new location without providing
30 days prior written notification thereof to Agent and so long as, at the
time of such written notification, Borrower provides any financing
statements or fixture filings necessary to perfect and continue perfected
the Agent's Liens and also exercises its best efforts to provide to Agent
a Collateral Access Agreement with respect to such new location. The
Inventory and Equipment shall not at any time now or hereafter be stored
with a bailee, warehouseman, or similar party without Agent's prior
written consent.
7.19 No Prohibited Transactions Under ERISA.
Directly or indirectly:
(a) engage, or permit any Subsidiary of Borrower to
engage, in any prohibited transaction which is reasonably likely to result
in a civil penalty or excise tax described in Sections 406 of ERISA
or 4975 of the IRC for which a statutory or class exemption is not
available or a private exemption has not been previously obtained from the
Department of Labor;
(b) permit to exist with respect to any Benefit Plan
any accumulated funding deficiency (as defined in Sections 302 of ERISA
and 412 of the IRC), whether or not waived;
(c) fail, or permit any Subsidiary of Borrower to
fail, to pay timely required contributions or annual installments due with
respect to any waived funding deficiency to any Benefit Plan;
(d) terminate, or permit any Subsidiary of Borrower to
terminate, any Benefit Plan where such event would result in any liability
of Borrower, any of its Subsidiaries or any ERISA Affiliate under Title IV
of ERISA;
(e) fail, or permit any Subsidiary of Borrower to
fail, to make any required contribution or payment to any Multiemployer
Plan;
(f) fail, or permit any Subsidiary of Borrower to
fail, to pay any required installment or any other payment required under
Section 412 of the IRC on or before the due date for such installment or
other payment;
(g) amend, or permit any Subsidiary of Borrower to
amend, a Plan resulting in an increase in current liability for the plan
year such that either of Borrower, any Subsidiary of Borrower or any ERISA
Affiliate is required to provide security to such Plan under
Section 401(a)(29) of the IRC; or
(h) withdraw, or permit any Subsidiary of Borrower to
withdraw, from any Multiemployer Plan where such withdrawal is reasonably
likely to result in any liability of any such entity under Title IV of
ERISA;
which, individually or in the aggregate, results in or reasonably would be
expected to result in a claim against or liability of Borrower, any of its
Subsidiaries or any ERISA Affiliate in excess of $10,000.
7.20 Financial Covenants.
Fail to maintain:
(a) Minimum Revenues. Achieve net revenues determined
in accordance with GAAP of not less than the amount set forth below for
the fiscal quarter ending on the date corresponding thereto:
Fiscal Quarter Ending Date Minimum Revenues
December 31, 1998 17,500,000
March 31, 1999 23,500,000
June 30, 1999 31,000,000
September 30, 1999 39,500,000
December 31, 1999 48,000,000
March 31, 2000 56,000,000
June 30, 2000 60,500,000
September 30, 2000 66,500,000
December 31, 2000 73,000,000
March 31, 2001 79,000,000
June 30, 2001 85,000,000
(b) Minimum EBITDA. Achieve EBITDA of not less than
the amount shown below for the period of 6 consecutive months ending on
the date corresponding thereto:
Period Ending Date Minimum EBITDA
December 31, 1998 (18,000,000)
March 31, 1999 (18,000,000)
June 30, 1999 (18,000,000)
September 30, 1999 (18,000,000)
December 31, 1999 (14,000,000)
March 31, 2000 (11,000,000)
June 30, 2000 (11,000,000)
September 30, 2000 (11,000,000)
December 31, 2000 (6,000,000)
March 31, 2001 (0)
June 30, 2001 2,500,000
7.21 Capital Expenditures.
Other than capital expenditures made with the proceeds of Purchase Money
Indebtedness, make capital expenditures in excess of (a) for the period
from the Closing Date through March 31, 2000, $32,000,000, and (b) for the
period from April 1, 2000 through the Maturity Date, $87,000,000.
7.22 Minimum Provisioned Access Line Equivalents.
Fail to cause the total number of Borrower's provisioned access line
equivalents to be at least equal to the numbers set forth below with
respect to and as of the dates set forth below:
Period Ending Date
Minimum Number of Provisioned Access Line Equivalents
December 31, 1998 81,387
March 31, 1999 101,387
June 30, 1999 121,387
September 30, 1999 141,387
December 31, 1999 161,387
March 31, 2000 181,387
June 30, 2000 201,387
September 30, 2000 221,387
December 31, 2000 241,387
March 31, 2001 261,387
June 30, 2001 281,387
7.23 Violation of Material Agreements.
Breach any material contractual obligation (including but not limited to
the ▇▇▇▇ Atlantic Agreements).
7.24 Maximum Net Funded Debt to Annualized Quarterly Revenues.
If New Holding Company has not raised at least $50,000,000 of New
Capital Proceeds on or prior to December 31, 1999, then the following
additional financial covenant shall go into effect on December 31, 1999,
for each of the quarterly periods specified below, until such time, if
any, as New Holding Company does raise at least $50,000,000 of New Capital
Proceeds. This covenant shall be measured quarterly at the end of each
fiscal quarter, if any, in which it applies
(a) To the extent this covenant is applicable, as set
forth above, Borrower shall not incur Net Funded Debt in amounts that
would cause the ratio of Net Funded Debt to Annualized Quarterly Revenues
to be in excess of the following ratios as of the quarter end for each of
the fiscal quarters ending on the following dates:
December 31, 1999 0.57x
March 31, 2000 0.57x
June 30, 2000 0.57x
September 30, 2000 0.57x
December 31, 2000 0.50x
March 31, 2001 0.45x
June 30, 2001 0.45x
(b) In the event that Borrower is not in compliance
with this Section 7.24(a) as of any applicable measurement date, no
further Advances or Letters of Credit shall be available, and Borrower
shall be prohibited from incurring any additional Indebtedness, until such
time, if any, that Borrower demonstrates that it is in compliance with the
ratios set forth in Section 7.24(a). During any period in which Borrower
is not in compliance with the ratios set forth in Section 7.24(a), the Net
Funded Debt/Annualized Quarterly Revenue ratio shall be measured weekly at
the same time as the Borrowing Base is established to determine whether
Borrower has come into compliance.
(c) Notwithstanding anything to the contrary contained
in this Agreement, a breach of this Section 7.24 shall not be an Event of
Default unless Borrower incurs Indebtedness in violation of Section
7.24(b) during any period when Borrower is prevented from doing so.
8. EVENTS OF DEFAULT.
Any one or more of the following events shall constitute an event of
default (each, an "Event of Default") under this Agreement:
8.1
If Borrower fails to pay when due and payable or when declared due and
payable, any portion of the Obligations (whether of principal, interest
(including any interest which, but for the provisions of the Bankruptcy
Code, would have accrued on such amounts), fees and charges due the Lender
Group, reimbursement of Lender Group Expenses, or other amounts
constituting Obligations);
8.2
(a) If Borrower fails or neglects to perform, keep, or observe any term,
provision, condition, covenant, or agreement contained in any negative
covenant set forth in Article 7 of this Agreement (other than Section 7.24
hereof, unless Borrower incurs any Indebtedness in breach of Section
7.24(b)), contained in any negative covenant set forth in any other Loan
Document, or contained in Section 6.10 of this Agreement; or (b) If
Borrower fails or neglects to perform, keep, or observe any term,
provision, condition, covenant, or agreement contained in this Agreement
(other than Section 7.24 hereof), in any of the Loan Documents, or in any
other present or future agreement between Borrower and the Lender Group,
other than those covered by clause (a) of this Section 8.2, and such
failure or neglect, in each case, is not cured to the Lender Group's
reasonable satisfaction within 15 Business Days after the sooner to occur
of Borrower's receipt of notice of such failure or neglect from Agent or
the date on which such failure or neglect first becomes actually known to
any of the chairman of the board, chief executive officer, president,
treasurer, chief financial officer, or corporate controller of Borrower;
provided that if any failure or neglect referred to in this paragraph is
the subject of another provision of this Section 8, in such event such
other provision of this Section 8 shall govern;
8.3
If properties or assets of Borrower with an aggregate value (based on
greater of cost or market) in excess of $2,000,000 are attached, seized,
subjected to a writ or distress warrant, or is levied upon, or come into
the possession of any third Person (provided that the Lender Group may
create a reserve against the Borrowing Base for all such amounts if the
aggregate value of the affected properties or assets exceeds $500,000);
8.4
If an Insolvency Proceeding is commenced by Borrower;
8.5
If an Insolvency Proceeding is commenced against Borrower and any of the
following events occur: (a) Borrower consents to the institution of the
Insolvency Proceeding against it; (b) the petition commencing the
Insolvency Proceeding is not timely controverted; (c) the petition
commencing the Insolvency Proceeding is not dismissed within 45 calendar
days of the date of the filing thereof; provided, however, that, during
the pendency of such period, Agent (including any successor agent), GSCP,
and each other member of the Lender Group shall be relieved of its
obligation to extend credit hereunder; (d) an interim trustee is appointed
to take possession of all or a substantial portion of the properties or
assets of, or to operate all or any substantial portion of the business
of, Borrower; or (e) an order for relief shall have been issued or entered
therein;
8.6
If Borrower is enjoined, restrained, or in any way prevented by court
order from continuing to conduct all or any material part of its business
affairs;
8.7
If a notice of Lien, levy, or assessment is filed of record with respect
to any of Borrower's properties or assets by the United States Government,
or any department, agency, or instrumentality thereof, or by any state,
county, municipal, or governmental agency, or if any taxes or debts in an
aggregate amount exceeding $2,000,000 owing at any time hereafter to any
one or more of such entities becomes a Lien, whether ▇▇▇▇▇▇ or otherwise,
upon any of Borrower's properties or assets and the same is not paid on
the payment date thereof (provided that the Lender Group may create a
reserve against the Borrowing Base for all such amounts if the aggregate
amount thereof is in excess of $500,000);
8.8
If any judgments or other claims in an aggregate amount exceeding
$2,000,000 become a Lien or encumbrance upon any of Borrower's properties
or assets (provided that the Lender Group may create a reserve against the
Borrowing Base for all such amounts if the aggregate amount thereof is in
excess of $500,000);
8.9
If there is a default in any material agreement to which Borrower is a
party with one or more third Persons and (a) the aggregate amount of
Borrower's obligations under all such material agreements in which there
is a default exceeds $2,000,000, and (b) such default (i) occurs at the
final maturity of the obligations thereunder, or (ii) results in a right
by such third Person(s), irrespective of whether exercised, to accelerate
the maturity of Borrower's obligations thereunder to terminate such
agreement, or to refuse to renew such agreement pursuant to an automatic
renewal right therein;
8.10
If Borrower makes any payment on account of Indebtedness that has been
contractually subordinated in right of payment to the payment of the
Obligations, except to the extent such payment is permitted by the terms
of the subordination provisions applicable to such Indebtedness;
8.11
If any material misstatement or misrepresentation exists now or hereafter
in any warranty, representation, statement, or report made to the Lender
Group by Borrower or any officer, employee, agent, or director of
Borrower, or if any such warranty or representation is withdrawn; or
8.12
If the obligation of any guarantor under its guaranty or other third
Person under any Loan Document is limited or terminated by operation of
law or by the guarantor or other third Person thereunder, or any such
guarantor or other third Person becomes the subject of an Insolvency
Proceeding.
8.13
Except with respect to the Holding Company Reorganization, if a Change of
Control occurs.
9. THE LENDER GROUP'S RIGHTS AND REMEDIES.
9.1 Rights and Remedies.
Upon the occurrence, and during the continuation, of an Event of
Default, the Required Lenders (at their election but without notice of
their election and without demand) may, except to the extent otherwise
expressly provided or required below, authorize and instruct Agent to do
any one or more of the following on behalf of the Lender Group (and Agent,
acting upon the instructions of the Required Lenders, shall do the same on
behalf of the Lender Group), all of which are authorized by Borrower:
(a) Declare all Obligations, whether evidenced by this
Agreement, by any of the other Loan Documents, or otherwise, immediately
due and payable;
(b) Cease advancing money or extending credit to or
for the benefit of Borrower under this Agreement, under any of the Loan
Documents, or under any other agreement between Borrower and the Lender
Group;
(c) Terminate this Agreement and any of the other Loan
Documents as to any future liability or obligation of the Lender Group,
but without affecting Agent's rights and security interests, for the
benefit of the Lender Group, in the Collateral or the Collateral and
without affecting the Obligations;
(d) Settle or adjust disputes and claims directly with
Account Debtors for amounts and upon terms which Agent considers
advisable, and in such cases, Agent will credit Borrower's Loan Account
with only the net amounts received by Agent in payment of such disputed
Accounts after deducting all Lender Group Expenses incurred or expended in
connection therewith;
(e) Cause Borrower to hold all returned Inventory in
trust for the Lender Group, segregate all returned Inventory from all
other property of Borrower or in Borrower's possession and conspicuously
label said returned Inventory as the property of the Lender Group;
(f) Without notice to or demand upon Borrower or any
guarantor, make such payments and do such acts as Agent considers
necessary or reasonable to protect its security interests in the
Collateral. Borrower agrees to assemble the Collateral if Agent so
requires, and to make the Collateral available to Agent as Agent may
designate. Borrower authorizes Agent to enter the premises where the
Collateral is located, to take and maintain possession of the Collateral,
or any part of it, and to pay, purchase, contest, or compromise any
encumbrance, charge, or Lien that in Agent's determination appears to
conflict with the Agent's Liens and to pay all expenses incurred in
connection therewith. With respect to any of Borrower's owned or leased
premises, Borrower hereby grants Agent a license to enter into possession
of such premises and to occupy the same, without charge, for up to 120
days in order to exercise any of the Lender Group's rights or remedies
provided herein, at law, in equity, or otherwise;
(g) Without notice to Borrower (such notice being
expressly waived), and without constituting a retention of any collateral
in satisfaction of an obligation (within the meaning of Section 9-505 of
the Code), set off and apply to the Obligations any and all (i) balances
and deposits of Borrower held by the Lender Group (including any amounts
received in the Lockbox Accounts), or (ii) indebtedness at any time owing
to or for the credit or the account of Borrower held by the Lender Group;
(h) Hold, as cash collateral, any and all balances and
deposits of Borrower held by the Lender Group, and any amounts received in
the Lockbox Accounts, to secure the full and final repayment of all of the
Obligations;
(i) Ship, reclaim, recover, store, finish, maintain,
repair, prepare for sale, advertise for sale, and sell (in the manner
provided for herein) the Collateral. Borrower is hereby grants to Agent a
license or other right to use, without charge, Borrower's labels, patents,
copyrights, rights of use of any name, trade secrets, trade names,
trademarks, service marks, and advertising matter, or any property of a
similar nature, as it pertains to the Collateral, in completing production
of, advertising for sale, and selling any Collateral and Borrower's rights
under all licenses and all franchise agreements shall inure to the Lender
Group's benefit;
(j) Sell the Collateral at either a public or private
sale, or both, by way of one or more contracts or transactions, for cash
or on terms, in such manner and at such places (including Borrower's
premises) as Agent determines is commercially reasonable. It is not
necessary that the Collateral be present at any such sale;
(k) Agent shall give notice of the disposition of the
Collateral as follows:
(i) Agent shall give Borrower and each holder of a
security interest in the Collateral who has filed with Agent a
written request for notice, a notice in writing of the time
and place of public sale, or, if the sale is a private sale or
some other disposition other than a public sale is to be made
of the Collateral, then the time on or after which the private
sale or other disposition is to be made;
(ii) The notice shall be personally delivered or
mailed, postage prepaid, to Borrower as provided in Section
12, at least 5 days before the date fixed for the sale, or at
least 5 days before the date on or after which the private
sale or other disposition is to be made; no notice needs to be
given prior to the disposition of any portion of the
Collateral that is perishable or threatens to decline speedily
in value or that is of a type customarily sold on a recognized
market. Notice to Persons other than Borrower claiming an
interest in the Collateral shall be sent to such addresses as
they have furnished to Agent;
(iii) If the sale is to be a public sale, Agent also
shall give notice of the time and place by publishing a notice
one time at least 5 days before the date of the sale in a
newspaper of general circulation in the county in which the
sale is to be held;
(l) The Lender Group may credit bid and purchase at
any public sale; and
(m) The Lender Group shall have all other rights and
remedies available to it at law or in equity pursuant to any other Loan
Documents; and
(n) Any deficiency that exists after disposition of
the Collateral as provided above will be paid immediately by Borrower.
Any excess will be returned, without interest and subject to the rights of
third Persons, by Agent to Borrower.
9.2 Remedies Cumulative.
The rights and remedies of the Lender Group under this Agreement, the
other Loan Documents, and all other agreements shall be cumulative. The
Lender Group shall have all other rights and remedies not inconsistent
herewith as provided under the Code, by law, or in equity. No exercise by
the Lender Group of one right or remedy shall be deemed an election, and
no waiver by the Lender Group of any Event of Default shall be deemed a
continuing waiver. No delay by the Lender Group shall constitute a
waiver, election, or acquiescence by it.
10. TAXES AND EXPENSES.
If Borrower fails to pay any monies (whether taxes, assessments, insurance
premiums, or, in the case of leased properties or assets, rents or other
amounts payable under such leases) due to third Persons, or fails to make
any deposits or furnish any required proof of payment or deposit, all as
required under the terms of this Agreement, then, to the extent that Agent
determines that such failure by Borrower could result in a Material
Adverse Change, in its discretion and without prior notice to Borrower,
Agent may do any or all of the following: (a) make payment of the same or
any part thereof; (b) set up such reserves in Borrower's Loan Account as
Agent deems necessary to protect the Lender Group from the exposure
created by such failure; or (c) obtain and maintain insurance policies of
the type described in Section 6.10, and take any action with respect to
such policies as Agent deems prudent. Any such amounts paid by Agent
shall constitute Lender Group Expenses. Any such payments made by Agent
shall not constitute an agreement by the Lender Group to make similar
payments in the future or a waiver by the Lender Group of any Event of
Default under this Agreement. Agent need not inquire as to, or contest
the validity of, any such expense, tax, or Lien and the receipt of the
usual official notice for the payment thereof shall be conclusive evidence
that the same was validly due and owing.
11. WAIVERS; INDEMNIFICATION.
11.1 Demand; Protest; etc.
Borrower waives demand, protest, notice of protest, notice of default or
dishonor, notice of payment and nonpayment, nonpayment at maturity,
release, compromise, settlement, extension, or renewal of accounts,
documents, instruments, chattel paper, and guarantees at any time held by
the Lender Group on which Borrower may in any way be liable.
11.2 The Lender Group's Liability for Collateral.
Borrower hereby agrees that: (a) so long as the Lender Group complies
with its obligations, if any, under Section 9-207 of the Code, the Lender
Group shall not in any way or manner be liable or responsible for: (i)
the safekeeping of the Collateral; (ii) any loss or damage thereto
occurring or arising in any manner or fashion from any cause; (iii) any
diminution in the value thereof; or (iv) any act or default of any
carrier, warehouseman, bailee, forwarding agency, or other Person; and (b)
all risk of loss, damage, or destruction of the Collateral shall be borne
by Borrower.
11.3 Indemnification.
Borrower shall pay, indemnify, defend, and hold the Agent-Related
Persons, the Lender-Related Persons with respect to each Lender, each
Participant, and each of their respective officers, directors, employees,
counsel, agents, and attorneys-in-fact (each, an "Indemnified Person")
harmless (to the fullest extent permitted by law) from and against any and
all claims, demands, suits, actions, investigations, proceedings, and
damages, and all reasonable attorneys fees and disbursements and other
costs and expenses actually incurred in connection therewith (as and when
they are incurred and irrespective of whether suit is brought), at any
time asserted against, imposed upon, or incurred by any of them in
connection with or as a result of or related to the execution, delivery,
enforcement, performance, and administration of this Agreement and any
other Loan Documents or the transactions contemplated herein, and with
respect to any investigation, litigation, or proceeding related to this
Agreement, any other Loan Document, or the use of the proceeds of the
credit provided hereunder (irrespective of whether any Indemnified Person
is a party thereto), or any act, omission, event or circumstance in any
manner related thereto (all the foregoing, collectively, the "Indemnified
Liabilities"). Borrower shall have no obligation to any Indemnified
Person under this Section 11.3 with respect to any Indemnified Liability
that a court of competent jurisdiction finally determines to have resulted
from the gross negligence or willful misconduct of such Indemnified
Person. This provision shall survive the termination of this Agreement
and the repayment of the Obligations. If any Indemnified Person makes any
payment to any other Indemnified Person with respect to which Borrower was
required to indemnify the Indemnified Person receiving such payment, the
Indemnified Person making such payment is entitled to be indemnified and
reimbursed by Borrower with respect thereto.
12. NOTICES.
Unless otherwise provided in this Agreement, all notices or demands by any
party relating to this Agreement or any other Loan Document shall be in
writing and (except for financial statements and other informational
documents which may be sent by first-class mail, postage prepaid) shall be
personally delivered or sent by registered or certified mail (postage
prepaid, return receipt requested), overnight courier, or telefacsimile to
the relevant party, as the case may be, at its address set forth below:
If to Borrower: CTC COMMUNICATIONS CORP.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Mr. ▇▇▇▇▇▇ ▇▇▇▇▇
Fax No. ▇▇▇.▇▇▇.▇▇▇▇
with copies to: ROPES & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., and
▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Fax No. ▇▇▇.▇▇▇.▇▇▇▇
and to: ▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Fax No. ▇▇▇.▇▇▇.▇▇▇▇
If to GSCP or
Arrangement,
Structuring, and
Syndication Agent: ▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS L.P.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇
Fax No. ▇▇▇.▇▇▇.▇▇▇▇
with copies to: ▇▇▇▇▇▇▇, PHLEGER & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇ Hilson, Esq.
Fax No. ▇▇▇.▇▇▇.▇▇▇▇
(counsel to GSCP only)
If to Fleet
or Agent: FLEET NATIONAL BANK
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Vice
President
Fax No. ▇▇▇.▇▇▇.▇▇▇▇
with copies to: ▇▇▇▇▇▇ & DODGE
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Fax No. ▇▇▇.▇▇▇.▇▇▇▇
The parties hereto may change the address at which they are to receive
notices hereunder, by notice in writing in the foregoing manner given to
all other parties. All notices or demands sent in accordance with this
Section 12, other than notices by the Lender Group in connection with
Sections 9-504 or 9-505 of the Code, shall be deemed received on the
earlier of the date of actual receipt or 3 days after the deposit thereof
in the mail. Borrower acknowledges and agrees that notices sent by the
Lender Group in connection with Sections 9-504 or 9-505 of the Code shall
be deemed sent when deposited in the mail or personally delivered, or,
where permitted by law, transmitted telefacsimile or other similar method
set forth above.
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS
EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF
SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND
ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND
THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR
RELATED HERETO OR THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION
WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND
LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF
NEW YORK, STATE OF NEW YORK, PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT
THE REQUIRED LENDERS' OPTION, IN THE COURTS OF ANY JURISDICTION WHERE THE
REQUIRED LENDERS ELECT TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR
OTHER PROPERTY MAY BE FOUND. BORROWER AND THE LENDER GROUP WAIVE, TO THE
EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT
THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT
ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 13.
BORROWER AND THE LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF
ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW OR STATUTORY CLAIMS. BORROWER AND THE LENDER GROUP
REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE
FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
14. DESTRUCTION OF BORROWER'S DOCUMENTS.
All documents, schedules, invoices, agings, or other papers delivered to
any one or more members of the Lender Group may be destroyed or otherwise
disposed of by such member of the Lender Group 4 months after they are
delivered to or received by such member of the Lender Group, unless
Borrower requests, in writing, the return of said documents, schedules, or
other papers and makes arrangements, at Borrower's expense, for their
return.
15. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.
15.1 Assignments and Participations.
(a) Any Lender may, with the written consent of Agent,
assign and delegate to one or more assignees (provided that no written
consent of Agent shall be required in connection with any assignment and
delegation by a Lender to an Eligible Transferee) (each an "Assignee")
all, or any ratable part of all, of the Obligations, the Commitments and
the other rights and obligations of such Lender hereunder and under the
other Loan Documents, in a minimum amount of $5,000,000; provided,
however, that Borrower and Agent may continue to deal solely and directly
with such Lender in connection with the interest so assigned to an
Assignee until (i) written notice of such assignment, together with
payment instructions, addresses and related information with respect to
the Assignee, shall have been given to Borrower and Agent by such Lender
and the Assignee; (ii) such Lender and its Assignee shall have delivered
to Borrower and Agent an Assignment and Acceptance; and (iii) the assignor
Lender or Assignee has paid to Agent for Agent's sole and separate account
a processing fee in the amount of $2,500. Anything contained herein to
the contrary notwithstanding, the consent of Agent shall not be required
(and payment of any fees shall not be required) if such assignment is in
connection with any merger, consolidation, sale, transfer, or other
disposition of all or any substantial portion of the business or loan
portfolio of such Lender. Anything in the Loan Documents to the contrary
notwithstanding, any rights of GSCP with respect to participation in
activities of the boards of directors of Borrower and/or New Holding
Company are personal rights of GSCP that are not assignable.
(b) From and after the date that Agent notifies the
assignor Lender that it has received an executed Assignment and Acceptance
and payment of the above-referenced processing fee, (i) the Assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment
and Acceptance, shall have the rights and obligations of a Lender under
the Loan Documents, and (ii) the assignor Lender shall, to the extent that
rights and obligations hereunder and under the other Loan Documents have
been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights (except with respect to Section 11.3 hereof) and be released
from its obligations under this Agreement (and in the case of an
Assignment and Acceptance covering all or the remaining portion of an
assigning Lender's rights and obligations under this Agreement and the
other Loan Documents, such Lender shall cease to be a party hereto and
thereto), and such assignment shall effect a novation between Borrower and
the Assignee.
(c) By executing and delivering an Assignment and
Acceptance, the assigning Lender thereunder and the Assignee thereunder
confirm to and agree with each other and the other parties hereto as
follows: (1) other than as provided in such Assignment and Acceptance,
such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other Loan Document furnished pursuant
hereto; (2) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of
Borrower or the performance or observance by Borrower of any of its
obligations under this Agreement or any other Loan Document furnished
pursuant hereto; (3) such Assignee confirms that it has received a copy of
this Agreement, together with such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to
enter into such Assignment and Acceptance; (4) such Assignee will,
independently and without reliance upon Agent, such assigning Lender or
any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (5) such Assignee
appoints and authorizes Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement as are delegated to Agent
by the terms hereof, together with such powers as are reasonably
incidental thereto; and (6) such Assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of
this Agreement are required to be performed by it as a Lender.
(d) Immediately upon each Assignee's making its
processing fee payment under the Assignment and Acceptance, this Agreement
shall be deemed to be amended to the extent, but only to the extent,
necessary to reflect the addition of the Assignee and the resulting
adjustment of the Commitments arising therefrom. The Commitment allocated
to each Assignee shall reduce such Commitments of the assigning Lender pro
tanto.
(e) Any Lender may at any time, with the written
consent of Agent, sell to one or more commercial banks, financial
institutions, or other Persons not Affiliates of such Lender (a
"Participant") participating interests in the Obligations, the Commitment,
and the other rights and interests of that Lender (the "originating
Lender") hereunder and under the other Loan Documents (provided that no
written consent of Agent shall be required in connection with any sale of
any such participating interests by a Lender to an Eligible Transferee);
provided, however, that (i) the originating Lender's obligations under
this Agreement shall remain unchanged, (ii) the originating Lender shall
remain solely responsible for the performance of such obligations,
(iii) Borrower and Agent shall continue to deal solely and directly with
the originating Lender in connection with the originating Lender's rights
and obligations under this Agreement and the other Loan Documents, (iv) no
Lender shall transfer or grant any participating interest under which the
Participant has the sole and exclusive right to approve any amendment to,
or any consent or waiver with respect to, this Agreement or any other Loan
Document, except to the extent such amendment to, or consent or waiver
with respect to this Agreement or of any other Loan Document would (A)
extend the final maturity date of the Obligations hereunder in which such
Participant is participating; (B) reduce the interest rate applicable to
the Obligations hereunder in which such Participant is participating; (C)
release all or a material portion of the Collateral or guaranties (except
to the extent expressly provided herein or in any of the Loan Documents)
supporting the Obligations hereunder in which such Participant is
participating; (D) postpone the payment of, or reduce the amount of, the
interest or fees payable to such Participant through such Lender; or (E)
change the amount or due dates of scheduled principal repayments or
prepayments or premiums; and (v) all amounts payable by Borrower hereunder
shall be determined as if such Lender had not sold such participation;
except that, if amounts outstanding under this Agreement are due and
unpaid, or shall have been declared or shall have become due and payable
upon the occurrence of an Event of Default, each Participant shall be
deemed to have the right of set-off in respect of its participating
interest in amounts owing under this Agreement to the same extent as if
the amount of its participating interest were owing directly to it as a
Lender under this Agreement. The rights of any Participant only shall be
derivative through the originating Lender with whom such Participant
participates and no Participant shall have any direct rights as to the
other Lenders, Agent, Borrower, the Collections, the Collateral, or
otherwise in respect of the Obligations. No Participant shall have the
right to participate directly in the making of decisions by the Lenders
among themselves.
(f) In connection with any such assignment or
participation or proposed assignment or participation, a Lender may
disclose all documents and information which it now or hereafter may have
relating to Borrower or Borrower's business.
(g) Any other provision in this Agreement
notwithstanding, any Lender may at any time create a security interest in,
or pledge, all or any portion of its rights under and interest in this
Agreement in favor of any Federal Reserve Bank in accordance with
Regulation A of the Federal Reserve Bank or U.S. Treasury Regulation 31
CFR sec. 203.14, and such Federal Reserve Bank may enforce such pledge or
security interest in any manner permitted under applicable law.
15.2 Successors.
This Agreement shall bind and inure to the benefit of the respective
successors and assigns of each of the parties; provided, however, that
Borrower may not assign this Agreement or any rights or duties hereunder
without the Lenders' prior written consent and any prohibited assignment
shall be absolutely void ab initio. No consent to assignment by the
Lenders shall release Borrower from its Obligations. A Lender may assign
this Agreement and the other Loan Documents and its rights and duties
hereunder and thereunder pursuant to Section 15.1 hereof and, except as
expressly required pursuant to Section 15.1 hereof, no consent or approval
by Borrower is required in connection with any such assignment.
16. AMENDMENTS; WAIVERS.
16.1 Amendments and Waivers.
No amendment or waiver of any provision of this Agreement or any other
Loan Document, and no consent with respect to any departure by Borrower
therefrom, shall be effective unless the same shall be in writing and
signed by the Required Lenders (or by Agent at the written request of the
Required Lenders) and Borrower and then any such waiver or consent shall
be effective only in the specific instance and for the specific purpose
for which given; provided, however, that no such waiver, amendment, or
consent shall, unless in writing and signed by all the Lenders and
Borrower and acknowledged by Agent, do any of the following:
(a) increase or extend the Commitment of any Lender;
(b) postpone or delay any date fixed by this Agreement
or any other Loan Document for any payment of principal, interest, fees or
other amounts due to the Lenders (or any of them) hereunder or under any
other Loan Document;
(c) reduce the principal of, or the rate of interest
specified herein on any Loan, or any fees or other amounts payable
hereunder or under any other Loan Document;
(d) change the percentage of the Commitments that is
required for the Lenders or any of them to take any action hereunder;
(e) amend this Section or any provision of the
Agreement providing for consent or other action by all Lenders;
(f) release Liens on Collateral other than as
permitted by Section 17.11;
(g) change the definition of "Required Lenders";
(h) release Borrower from any Obligation for the
payment of money, or consent to any assignment or transfer by Borrower of
any Obligation;
(i) amend any of the provisions of Sections 16 or 17;
or
(j) release any guarantor from its obligations under a
guaranty.
and, provided further, however, that no amendment, waiver or consent
shall, unless in writing and signed by Agent, affect the rights or duties
of Agent under this Agreement or any other Loan Document. The foregoing
notwithstanding, any amendment, modification, waiver, consent,
termination, or release of or with respect to any provision of this
Agreement or any other Loan Document that relates only to the relationship
of the Lender Group among themselves, and that does not affect the rights
or obligations of Borrower, shall not require consent by or the agreement
of Borrower.
16.2 No Waivers; Cumulative Remedies.
No failure by Agent or any Lender to exercise any right, remedy, or
option under this Agreement, any other Loan Document, or any present or
future supplement hereto or thereto, or in any other agreement between or
among Borrower and Agent or any Lender, or delay by Agent or any Lender in
exercising the same, will operate as a waiver thereof. No waiver by Agent
or any Lender will be effective unless it is in writing, and then only to
the extent specifically stated. No waiver by Agent or the Lenders on any
occasion shall affect or diminish Agent's and each Lender's rights
thereafter to require strict performance by Borrower of any provision of
this Agreement. Agent's and each Lender's rights under this Agreement and
the other Loan Documents will be cumulative and not exclusive of any other
right or remedy which Agent or any Lender may have.
17. AGENT; THE LENDER GROUP.
17.1 Appointment and Authorization of Agent.
Each Lender hereby designates and appoints GSCP and Fleet as its agents
under this Agreement and the other Loan Documents and each Lender hereby
irrevocably authorizes Agent and Arrangement, Structuring, and Syndication
Agent to take such action on its behalf under the provisions of this
Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Agent and Arrangement, Structuring, and
Syndication Agent agree to act as such on the express conditions contained
in this Section 17. The provisions of this Section 17 are solely for the
benefit of Agent, Arrangement, Structuring and Syndication Agent, and the
Lenders, and Borrower shall have no rights as a third party beneficiary of
any of the provisions contained herein; provided, however, that certain of
the provisions of Section 17.10 hereof also shall be for the benefit of
Borrower. Any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document notwithstanding, neither Agent nor
Arrangement, Structuring, and Syndication Agent shall have any duties or
responsibilities, except those expressly set forth herein, nor shall Agent
nor Arrangement, Structuring, and Syndication Agent have or be deemed to
have any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be
read into this Agreement or any other Loan Document or otherwise exist
against Agent or Arrangement, Structuring, and Syndication Agent; it being
expressly understood and agreed that the use of the words "Agent" and
"Arrangement, Structuring, and Syndication Agent" is for convenience only,
that Fleet and GSCP are merely the representatives of the Lenders, and
have only the contractual duties set forth herein. Except as expressly
otherwise provided in this Agreement, Agent and Arrangement, Structuring,
and Syndication Agent shall have and may use their sole discretion with
respect to exercising or refraining from exercising any discretionary
rights or taking or refraining from taking any actions which Agent or
Arrangement, Structuring, and Syndication Agent, as applicable, is
expressly entitled to take or assert under or pursuant to this Agreement
and the other Loan Documents. Without limiting the generality of the
foregoing, or of any other provision of the Loan Documents that provides
rights or powers to Agent, Lenders agree that Agent shall have the right
to exercise the following powers as long as this Agreement remains in
effect: (a) maintain, in accordance with its customary business
practices, ledgers and records reflecting the status of the Advances, the
Collateral, the Collections, and related matters; (b) execute or file any
and all financing or similar statements or notices, amendments, renewals,
supplements, documents, instruments, proofs of claim, notices and other
written agreements with respect to the Loan Documents; (c) make Advances,
for itself or on behalf of Lenders as provided in the Loan Documents; (d)
exclusively receive, apply, and distribute the Collections as provided in
the Loan Documents; (e) open and maintain such bank accounts and lock
boxes as Agent deems necessary and appropriate in accordance with the Loan
Documents for the foregoing purposes with respect to the Collateral and
the Collections; (f) perform, exercise, and enforce any and all other
rights and remedies of the Lender Group with respect to Borrower, the
Obligations, the Collateral, the Collections, or otherwise related to any
of same as provided in the Loan Documents; and (g) incur and pay such
Lender Group Expenses as Agent may deem necessary or appropriate for the
performance and fulfillment of its functions and powers pursuant to the
Loan Documents.
17.2 Delegation of Duties.
Except as otherwise provided in this section, Agent may execute any of
its duties under this Agreement or any other Loan Document by or through
agents, employees or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. Agent shall not
be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects as long as such selection was made in
compliance with this section and without gross negligence or willful
misconduct.
17.3 Liability of Agent.
None of the Agent-Related Persons shall (i) be liable for any action
taken or omitted to be taken by any of them under or in connection with
this Agreement or any other Loan Document or the transactions contemplated
hereby (except for its own gross negligence or willful misconduct), or
(ii) be responsible in any manner to any of the Lenders for any recital,
statement, representation or warranty made by Borrower or any Subsidiary
or Affiliate of Borrower, or any officer or director thereof, contained in
this Agreement or in any other Loan Document, or in any certificate,
report, statement or other document referred to or provided for in, or
received by Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document, or for any
failure of Borrower or any other party to any Loan Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall be
under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect
the properties, books or records of Borrower or any of Borrower's
Subsidiaries or Affiliates. The foregoing notwithstanding, nothing in
this section is intended to create a standard of care or impose liability
on any Agent-Related Person that would not otherwise exist but for this
section.
17.4 Reliance by Agent.
Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, resolution, notice, consent, certificate,
affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine
and correct and to have been signed, sent, or made by the proper Person or
Persons, and upon advice and statements of legal counsel (including
counsel to Borrower or counsel to any Lender), independent accountants and
other experts selected by Agent. 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 Lenders as it deems appropriate and until such instructions are
received, Agent shall act, or refrain from acting, as it deems advisable.
If Agent so requests, it shall first be indemnified to its reasonable
satisfaction by Lenders against any and all liability and expense that may
be incurred by it by reason of taking or continuing to take any such
action. Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Loan Document in
accordance with a request or consent of the Lenders and such request and
any action taken or failure to act pursuant thereto shall be binding upon
all of the Lenders.
17.5 Notice of Default or Event of Default.
Agent shall not be deemed to have knowledge or notice of the occurrence
of any Default or Event of Default, except with respect to defaults in the
payment of principal, interest, fees, and expenses required to be paid to
Agent for the account of the Lenders, except with respect to Events of
Default of which Agent has actual knowledge, unless Agent shall have
received written notice from a Lender or Borrower referring to this
Agreement, describing such Default or Event of Default, and stating that
such notice is a "notice of default." Agent promptly will notify the
Lenders of its receipt of any such notice or of any Event of Default of
which Agent has actual knowledge. If any Lender obtains actual knowledge
of any Event of Default, such Lender promptly shall notify the other
Lenders and Agent of such Event of Default. Each Lender shall be solely
responsible for giving any notices to its Participants, if any. Subject
to Section 17.4, Agent shall take such action with respect to such Default
or Event of Default as may be requested by the Required Lenders in
accordance with Section 9; provided, however, that unless and until Agent
has received any such request, Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable.
17.6 Credit Decision.
Each Lender acknowledges that none of the Agent-Related Persons has made
any representation or warranty to it, and that no act by Agent hereinafter
taken, including any review of the affairs of Borrower and its
Subsidiaries or Affiliates, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lender.
Each Lender represents to Agent that it has, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property,
financial and other condition and creditworthiness of Borrower and any
other Person (other than the Lender Group) party to a Loan Document, and
all applicable bank regulatory laws relating to the transactions
contemplated hereby, and made its own decision to enter into this
Agreement and to extend credit to Borrower. Each Lender also represents
that it will, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this
Agreement and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects,
operations, property, financial and other condition and creditworthiness
of Borrower and any other Person (other than the Lender Group) party to a
Loan Document. Except for notices, reports and other documents expressly
herein required to be furnished to the Lenders by Agent, Agent shall not
have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, prospects, operations,
property, financial and other condition or creditworthiness of Borrower
and any other Person party to a Loan Document that may come into the
possession of any of the Agent-Related Persons.
17.7 Costs and Expenses; Indemnification.
Agent may incur and pay Lender Group Expenses to the extent Agent deems
reasonably necessary or appropriate for the performance and fulfillment of
its functions, powers, and obligations pursuant to the Loan Documents,
including without limiting the generality of the foregoing, court costs,
reasonable attorneys fees and expenses, costs of collection by outside
collection agencies and auctioneer fees and costs of security guards or
insurance premiums paid to maintain the Collateral, whether or not
Borrower is obligated to reimburse Agent or Lenders for such expenses
pursuant to the Loan Agreement or otherwise. Agent is authorized and
directed to deduct and retain sufficient amounts from Collections to
reimburse Agent for such out-of-pocket costs and expenses prior to the
distribution of any amounts to Lenders. In the event Agent is not
reimbursed for such costs and expenses from Collections, each Lender
hereby agrees that it is and shall be obligated to pay to or reimburse
Agent for the amount of such Lender's Pro Rata Share thereof. Whether or
not the transactions contemplated hereby are consummated, the Lenders
shall indemnify upon demand the Agent-Related Persons (to the extent not
reimbursed by or on behalf of Borrower and without limiting the obligation
of Borrower to do so), according to their Pro Rata Shares, from and
against any and all Indemnified Liabilities; provided, however, that no
Lender shall be liable for the payment to the Agent-Related Persons of any
portion of such Indemnified Liabilities resulting solely from such
Person's gross negligence or willful misconduct. Without limitation of
the foregoing, each Lender shall reimburse Agent upon demand for its
ratable share of any costs or out-of-pocket expenses (including attorneys
fees and expenses) incurred by Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise)
of, or legal advice in respect of rights or responsibilities under, this
Agreement, any other Loan Document, or any document contemplated by or
referred to herein, to the extent that Agent is not reimbursed for such
expenses by or on behalf of Borrower. The undertaking in this section
shall survive the payment of all Obligations hereunder and the resignation
or replacement of Agent.
17.8 Agent in Individual Capacity.
Fleet, GSCP, and their Affiliates may make loans to, issue letters of
credit for the account of, accept deposits from, acquire equity interests
in and generally engage in any kind of banking, trust, financial advisory,
underwriting or other business with Borrower and its Subsidiaries and
Affiliates and any other Person (other than the Lender Group) party to any
Loan Documents as though GSCP and Fleet were not agents hereunder and
without notice to or consent of the Lenders. The Lenders acknowledge
that, pursuant to such activities, GSCP, Fleet, or their Affiliates may
receive information regarding Borrower or its Affiliates and any other
Person (other than the Lender Group) party to any Loan Documents that is
subject to confidentiality obligations in favor of Borrower or such other
Person and that prohibit the disclosure of such information to the
Lenders, and the Lenders acknowledge that, in such circumstances (and in
the absence of a waiver of such confidentiality obligations, which waiver
Agent will use its reasonable best efforts to obtain), Agent shall be
under no obligation to provide such information to them. The terms
"Lender" and "Lenders" include GSCP and Fleet in their individual
capacities.
17.9 Successor Agent.
Agent may resign as Agent upon 45 days notice to the Lenders. If Agent
resigns under this Agreement, the Required Lenders shall appoint a
successor Agent for the Lenders. If no successor Agent is appointed prior
to the effective date of the resignation of Agent, Agent may appoint,
after consulting with the Lenders, a successor Agent. If Agent has
materially breached or failed to perform any material provision of this
Agreement or of applicable law, the Required Lenders may agree in writing
to remove and replace Agent with a successor Agent from among the Lenders.
In any such event, upon the acceptance of its appointment as successor
Agent hereunder, such successor Agent shall succeed to all the rights,
powers and duties of the retiring Agent and the term "Agent" shall mean
such successor Agent and the retiring Agent's appointment, powers and
duties as Agent shall be terminated. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Section 17 shall
inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent under this Agreement. If no successor Agent has
accepted appointment as Agent by the date which is 45 days following a
retiring Agent's notice of resignation, the retiring Agent's resignation
shall nevertheless thereupon become effective and the Lenders shall
perform all of the duties of Agent hereunder until such time, if any, as
the Lenders appoint a successor Agent as provided for above.
17.10 Withholding Tax.
(a) If any Lender is a "foreign corporation,
partnership or trust" within the meaning of the IRC and such Lender claims
exemption from, or a reduction of, U.S. withholding tax under Sections
1441 or 1442 of the IRC, such Lender agrees with and in favor of Agent and
Borrower, to deliver to Agent and Borrower:
(i) if such Lender claims an exemption from, or a
reduction of, withholding tax under a United States tax
treaty, properly completed IRS Forms 1001 and W-8 before the
payment of any interest in the first calendar year and before
the payment of any interest in each third succeeding calendar
year during which interest may be paid under this Agreement;
(ii) if such Lender claims that interest paid under
this Agreement is exempt from United States withholding tax
because it is effectively connected with a United States trade
or business of such Lender, two properly completed and
executed copies of IRS Form 4224 before the payment of any
interest is due in the first taxable year of such Lender and
in each succeeding taxable year of such Lender during which
interest may be paid under this Agreement, and IRS Form W-9;
and
(iii) such other form or forms as may be required under
the IRC or other laws of the United States as a condition to
exemption from, or reduction of, United States withholding
tax.
Such Lender agrees promptly to notify Agent and Borrower of any change in
circumstances which would modify or render invalid any claimed exemption
or reduction.
(b) If any Lender claims exemption from, or reduction
of, withholding tax under a United States tax treaty by providing IRS Form
1001 and such Lender sells, assigns, grants a participation in, or
otherwise transfers all or part of the Obligations of Borrower to such
Lender, such Lender agrees to notify Agent of the percentage amount in
which it is no longer the beneficial owner of Obligations of Borrower to
such Lender. To the extent of such percentage amount, Agent will treat
such Lender's IRS Form 1001 as no longer valid.
(c) If any Lender claiming exemption from United
States withholding tax by filing IRS Form 4224 with Agent sells, assigns,
grants a participation in, or otherwise transfers all or part of the
Obligations of Borrower to such Lender, such Lender agrees to undertake
sole responsibility for complying with the withholding tax requirements
imposed by Sections 1441 and 1442 of the IRC.
(d) If any Lender is entitled to a reduction in the
applicable withholding tax, Agent may withhold from any interest payment
to such Lender an amount equivalent to the applicable withholding tax
after taking into account such reduction. If the forms or other
documentation required by subsection (a) of this Section are not delivered
to Agent, then Agent may withhold from any interest payment to such Lender
not providing such forms or other documentation an amount equivalent to
the applicable withholding tax.
(e) If the IRS or any other Governmental Authority of
the United States or other jurisdiction asserts a claim that Agent did not
properly withhold tax from amounts paid to or for the account of any
Lender (because the appropriate form was not delivered, was not properly
executed, or because such Lender failed to notify Agent of a change in
circumstances which rendered the exemption from, or reduction of,
withholding tax ineffective, or for any other reason) such Lender shall
indemnify Agent fully for all amounts paid, directly or indirectly, by
Agent as tax or otherwise, including penalties and interest, and including
any taxes imposed by any jurisdiction on the amounts payable to Agent
under this Section, together with all costs and expenses (including
attorneys fees and expenses). The obligation of the Lenders under this
subsection shall survive the payment of all Obligations and the
resignation or replacement of Agent.
17.11 Collateral Matters.
(a) The Lenders hereby irrevocably authorize Agent, at
its option and in its sole discretion, to release any Lien on any
Collateral (i) upon the termination of the Commitments and payment and
satisfaction in full by Borrower of all Obligations; (ii) constituting
property being sold or disposed of if a release is required or desirable
in connection therewith and if Borrower certifies to Agent that the sale
or disposition is permitted under Section 7 of this Agreement or the other
Loan Documents (and Agent may rely conclusively on any such certificate,
without further inquiry); (iii) constituting property in which Borrower
owned no interest at the time the security interest was granted or at any
time thereafter; or (iv) constituting property leased to Borrower under a
lease that has expired or is terminated in a transaction permitted under
this Agreement. Except as provided above, Agent will not execute and
deliver a release of any Lien on any Collateral without the prior written
authorization of (y) if the release is of all or substantially all of the
Collateral, all of the Lenders, or (z) otherwise, the Required Lenders.
Upon request by Agent or Borrower at any time, the Lenders will confirm in
writing Agent's authority to release any such Liens on particular types or
items of Collateral pursuant to this Section 17.11; provided, however,
that (1) Agent shall not be required to execute any document necessary to
evidence such release on terms that, in Agent's opinion, would expose
Agent to liability or create any obligation or entail any consequence
other than the release of such Lien without recourse, representation, or
warranty, and (2) such release shall not in any manner discharge, affect,
or impair the Obligations or any Liens (other than those expressly being
released) upon (or obligations of Borrower in respect of) all interests
retained by Borrower, including, the proceeds of any sale, all of which
shall continue to constitute part of the Collateral.
(b) Agent shall have no obligation whatsoever to any
of the Lenders to assure that the Collateral exists or is owned by
Borrower or is cared for, protected, or insured or has been encumbered, or
that the Agent's Liens have been properly or sufficiently or lawfully
created, perfected, protected, or enforced or are entitled to any
particular priority, or to exercise at all or in any particular manner or
under any duty of care, disclosure or fidelity, or to continue exercising,
any of the rights, authorities and powers granted or available to Agent
pursuant to any of the Loan Documents, it being understood and agreed that
in respect of the Collateral, or any act, omission or event related
thereto, subject to the terms and conditions contained herein, Agent may
act in any manner it may deem appropriate, in its sole discretion given
Agent's own interest in the Collateral in its capacity as one of the
Lenders and that Agent shall have no other duty or liability whatsoever to
any Lender as to any of the foregoing, except as otherwise provided
herein.
17.12 Restrictions on Actions by Lenders; Sharing of Payments.
(a) Each of the Lenders agrees that it shall not,
without the express consent of Agent, and that it shall, to the extent it
is lawfully entitled to do so, upon the request of Agent, set off against
the Obligations, any amounts owing by such Lender to Borrower or any
accounts of Borrower now or hereafter maintained with such Lender. Each
of the Lenders further agrees that it shall not, unless specifically
requested to do so by Agent, take or cause to be taken any action,
including, the commencement of any legal or equitable proceedings, to
foreclose any Lien on, or otherwise enforce any security interest in, any
of the Collateral the purpose of which is, or could be, to give such
Lender any preference or priority against the other Lenders with respect
to the Collateral.
(b) Subject to Section 17.8, if, at any time or times
any Lender shall receive (i) by payment, foreclosure, setoff or otherwise,
any proceeds of Collateral or any payments with respect to the Obligations
arising under, or relating to, this Agreement or the other Loan Documents,
except for any such proceeds or payments received by such Lender from
Agent pursuant to the terms of this Agreement, or (ii) payments from Agent
in excess of such Lender's ratable portion of all such distributions by
Agent, such Lender promptly shall (1) turn the same over to Agent, in
kind, and with such endorsements as may be required to negotiate the same
to Agent, or in same day funds, as applicable, for the account of all of
the Lenders and for application to the Obligations in accordance with the
applicable provisions of this Agreement, or (2) purchase, without recourse
or warranty, an undivided interest and participation in the Obligations
owed to the other Lenders so that such excess payment received shall be
applied ratably as among the Lenders in accordance with their Pro Rata
Shares; provided, however, that if all or part of such excess payment
received by the purchasing party is thereafter recovered from it, those
purchases of participations shall be rescinded in whole or in part, as
applicable, and the applicable portion of the purchase price paid therefor
shall be returned to such purchasing party, but without interest except to
the extent that such purchasing party is required to pay interest in
connection with the recovery of the excess payment.
17.13 Agency for Perfection.
Agent and each Lender hereby appoints each other Lender as agent for the
purpose of perfecting the Agent's Liens in assets which, in accordance
with Article 9 of the UCC can be perfected only by possession. Should any
Lender obtain possession of any such Collateral, such Lender shall notify
Agent thereof, and, promptly upon Agent's request therefor shall deliver
such Collateral to Agent or in accordance with Agent's instructions.
17.14 Payments by Agent to the Lenders.
All payments to be made by Agent to the Lenders shall be made by bank
wire transfer or internal transfer of immediately available funds pursuant
to such wire transfer instructions as each party may designate for itself
by written notice to Agent. Concurrently with each such payment, Agent
shall identify whether such payment (or any portion thereof) represents
principal, premium or interest on revolving advances or otherwise.
17.15 Concerning the Collateral and Related Loan Documents.
Each member of the Lender Group authorizes and directs Agent to enter
into this Agreement and the other Loan Documents relating to the
Collateral, for the benefit of the Lender Group. Each member of the
Lender Group agrees that any action taken by Agent or all Lenders, as
applicable, in accordance with the terms of this Agreement or the other
Loan Documents relating to the Collateral and the exercise by Agent or all
Lenders, as applicable, of their respective powers set forth therein or
herein, together with such other powers that are reasonably incidental
thereto, shall be binding upon all of the Lenders.
17.16 Field Audits and Examination Reports; Confidentiality; Disclaimers
by Lenders; Other Reports and Information.
By signing this Agreement, each Lender:
(a) is deemed to have requested that Agent furnish
such Lender, promptly after it becomes available, a copy of each field
audit or examination report (each a "Report" and collectively, "Reports")
prepared by or for Agent, and Agent shall so furnish each Lender with such
Reports;
(b) expressly agrees and acknowledges that neither
GSCP nor Agent (i) makes any representation or warranty as to the accuracy
of any Report, or (ii) shall be liable for any information contained in
any Report;
(c) expressly agrees and acknowledges that the Reports
are not comprehensive audits or examinations, that Agent or other party
performing any audit or examination will inspect only specific information
regarding Borrower and will rely significantly upon Borrower's books and
records, as well as on representations of Borrower's personnel;
(d) agrees to keep all Reports and other material,
non-public information regarding Borrower and its Subsidiaries and their
operations, assets, and existing and contemplated business plans in a
confidential manner; it being understood and agreed by Borrower that in
any event such Lender may make disclosures (a) to counsel for and other
advisors, accountants, and auditors to such Lender, (b) reasonably
required by any bona fide potential or actual Assignee, transferee, or
Participant in connection with any contemplated or actual assignment or
transfer by such Lender of an interest herein or any participation
interest in such Lender's rights hereunder, (c) of information that has
become public by disclosures made by Persons other than such Lender, its
Affiliates, assignees, transferees, or participants, or (d) as required or
requested by any court, governmental or administrative agency, pursuant to
any subpoena or other legal process, or by any law, statute, regulation,
or court order; provided, however, that, unless prohibited by applicable
law, statute, regulation, or court order, such Lender shall notify
Borrower of any request by any court, governmental or administrative
agency, or pursuant to any subpoena or other legal process for disclosure
of any such non-public material information concurrent with, or where
practicable, prior to the disclosure thereof; and
(e) without limiting the generality of any other
indemnification provision contained in this Agreement, agrees: (i) to
hold Agent and any such other Lender preparing a Report harmless from any
action the indemnifying Lender may take or conclusion the indemnifying
Lender may reach or draw from any Report in connection with any loans or
other credit accommodations that the indemnifying Lender has made or may
make to Borrower, or the indemnifying Lender's participation in, or the
indemnifying Lender's purchase of, a loan or loans of Borrower; and (ii)
to pay and protect, and indemnify, defend and hold Agent and any such
other Lender preparing a Report harmless from and against, the claims,
actions, proceedings, damages, costs, expenses and other amounts
(including, attorney costs) incurred by Agent and any such other Lender
preparing a Report as the direct or indirect result of any third parties
who might obtain all or part of any Report through the indemnifying
Lender.
In addition to the foregoing: (x) Any Lender may from time to time
request of Agent in writing that Agent provide to such Lender a copy of
any report or document provided by Borrower to Agent that has not been
contemporaneously provided by Borrower to such Lender, and, upon receipt
of such request, Agent shall provide a copy of same to such Lender
promptly upon receipt thereof from Borrower; (y) To the extent that Agent
is entitled, under any provision of the Loan Documents, to request
additional reports or information from Borrower, any Lender may, from time
to time, reasonably request Agent to exercise such right as specified in
such Lender's notice to Agent, whereupon Agent promptly shall request of
Borrower the additional reports or information specified by such Lender,
and, upon receipt thereof from Borrower, Agent promptly shall provide a
copy of same to such Lender; and (z) Any time that Agent renders to
Borrower a statement regarding the Loan Account, Agent shall send a copy
of such statement to each Lender.
17.17 Several Obligations; No Liability
Notwithstanding that certain of the Loan Documents now or hereafter may
have been or will be executed only by or in favor of Agent in its capacity
as such, and not by or in favor of the Lenders, any and all obligations on
the part of Agent (if any) to make any credit available hereunder shall
constitute the several (and not joint) obligations of the respective
Lenders on a ratable basis, according to their respective Commitments, to
make an amount of such credit not to exceed, in principal amount, at any
one time outstanding, the amount of their respective Commitments. Nothing
contained herein shall confer upon any Lender any interest in, or subject
any Lender to any liability for, or in respect of, the business, assets,
profits, losses, or liabilities of any other Lender. Each Lender shall be
solely responsible for notifying its Participants of any matters relating
to the Loan Documents to the extent any such notice may be required, and
no Lender shall have any obligation, duty, or liability to any Participant
of any other Lender. Except as provided in Section 17.7, no member of the
Lender Group shall have any liability for the acts of any other member of
the Lender Group. No Lender shall be responsible to Borrower or any other
Person for any failure by any other Lender to fulfill its obligations to
make credit available hereunder, nor to advance for it or on its behalf in
connection with its Commitment, nor to take any other action on its behalf
hereunder or in connection with the financing contemplated herein.
18. GENERAL PROVISIONS.
18.1 Effectiveness.
This Agreement shall be binding and deemed effective when executed by
Borrower and each member of the Lender Group whose signature is provided
for on the signature pages hereof.
18.2 Section Headings.
Headings and numbers have been set forth herein for convenience only.
Unless the contrary is compelled by the context, everything contained in
each section applies equally to this entire Agreement.
18.3 Interpretation.
Neither this Agreement nor any uncertainty or ambiguity herein shall be
construed or resolved against the Lender Group or Borrower, whether under
any rule of construction or otherwise. On the contrary, this Agreement
has been reviewed by all parties and shall be construed and interpreted
according to the ordinary meaning of the words used so as to fairly
accomplish the purposes and intentions of all parties hereto.
18.4 Severability of Provisions.
Each provision of this Agreement shall be severable from every other
provision of this Agreement for the purpose of determining the legal
enforceability of any specific provision.
18.5 Amendments in Writing.
This Agreement can only be amended by a writing signed by Agent, the
Required Lenders, and Borrower.
18.6 Counterparts; Telefacsimile Execution.
This Agreement may be executed in any number of counterparts and by
different parties on separate counterparts, each of which, when executed
and delivered, shall be deemed to be an original, and all of which, when
taken together, shall constitute but one and the same Agreement. Delivery
of an executed counterpart of this Agreement by telefacsimile shall be
equally as effective as delivery of an original executed counterpart of
this Agreement. Any party delivering an executed counterpart of this
Agreement by telefacsimile also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original
executed counterpart shall not affect the validity, enforceability, and
binding effect of this Agreement. The foregoing shall apply to each other
Loan Document mutatis mutandis.
18.7 Revival and Reinstatement of Obligations.
If the incurrence or payment of the Obligations by Borrower or any
guarantor of the Obligations or the transfer by either or both of such
parties to the Lender Group of any property of either or both of such
parties should for any reason subsequently be declared to be void or
voidable under any state or federal law relating to creditors' rights,
including provisions of the Bankruptcy Code relating to fraudulent
conveyances, preferences, and other voidable or recoverable payments of
money or transfers of property (collectively, a "Voidable Transfer"), and
if the Lender Group is required to repay or restore, in whole or in part,
any such Voidable Transfer, or elects to do so upon the reasonable advice
of its counsel, then, as to any such Voidable Transfer, or the amount
thereof that the Lender Group is required or elects to repay or restore,
and as to all reasonable costs, expenses, and attorneys fees of the Lender
Group related thereto, the liability of Borrower or such guarantor
automatically shall be revived, reinstated, and restored and shall exist
as though such Voidable Transfer had never been made.
18.8 Integration.
This Agreement, together with the other Loan Documents, reflects the
entire understanding of the parties with respect to the transactions
contemplated hereby and shall not be contradicted or qualified by any
other agreement, oral or written, before the date hereof.
[Signature page to follow.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed and delivered as of the date first above written.
CTC COMMUNICATIONS CORP.
a Massachusetts corporation
By
Title:
FLEET NATIONAL BANK,
a national banking association, as Agent, and as a Lender
By
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.,
a Bermuda limited partnership, as Arrangement, Structuring, and
Syndication Agent and as a Lender
By
Title: Authorized Signatory