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FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF DECEMBER 31, 1999
by and among
NCO GROUP, INC., as Borrower
and
THE FINANCIAL INSTITUTIONS identified herein as Lenders
and
MELLON BANK, N.A., as Administrative Agent
and
SUCH MANAGING AGENTS, CO-AGENTS AND OTHER AGENTS
AS MAY BE APPOINTED
FROM TIME TO TIME HEREAFTER
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TABLE OF CONTENTS
Page
----
ARTICLE I Credit Facility.......................................................................................2
1.1 Commitment To Lend.............................................................................2
1.2 [Intentionally omitted]........................................................................2
1.3 Manner Of Borrowing............................................................................2
1.4 Repayments.....................................................................................3
1.5 Voluntary Prepayments..........................................................................4
1.6 Payments By The Borrower In General............................................................4
1.7 Reductions Of RC Commitment....................................................................6
1.8 Interest.......................................................................................7
1.9 Fees...........................................................................................8
1.10 Computation Of Interest And Fees..............................................................10
1.11 Promissory Notes; Records Of Account..........................................................10
1.12 Pro Rata Treatment............................................................................10
1.13 Taxes On Payments.............................................................................10
1.14 Registered Notes And Loans....................................................................12
1.15 Issuance Of Letters Of Credit................................................................13
ARTICLE II Yield Protection and Breakage Indemnity.............................................................18
2.1 Mandatory Suspension And Conversion Of LIBO Rate Loans........................................18
2.2 Regulatory Changes............................................................................19
2.3 Capital And Reserve Requirements..............................................................20
2.4 Breakage......................................................................................20
2.5 Determinations................................................................................20
2.6 Replacement Of Lenders........................................................................21
2.7 Change Of Lending Office......................................................................21
ARTICLE III Conditions to Effectiveness of Agreement and Fundings..............................................22
3.1 Conditions To Initial Loans...................................................................22
3.2 Conditions To All Loans.......................................................................25
ARTICLE IV Representations and Warranties......................................................................26
4.1 Representations And Warranties................................................................26
4.2 Representations And Warranties Absolute.......................................................31
ARTICLE V Affirmative Covenants................................................................................31
5.1 Basic Reporting Requirements..................................................................31
5.2 Insurance.....................................................................................34
5.3 Payment Of Taxes And Other Potential Charges And Priority Claims..............................35
5.4 Preservation Of Corporate Status..............................................................35
5.5 Governmental Approvals And Filings............................................................35
5.6 Maintenance Of Properties.....................................................................36
5.7 Avoidance Of Other Conflicts..................................................................36
5.8 Financial Accounting Practices................................................................36
5.9 Use Of Proceeds...............................................................................36
5.10 Continuation Of Or Change In Business.........................................................36
5.11 Consolidated Tax Return.......................................................................36
5.12 Fiscal Year...................................................................................36
5.13 Bank Accounts.................................................................................37
5.14 Submission Of Collateral Documents............................................................37
5.15 Collection Of Accounts........................................................................37
5.16 Subsidiaries As Guarantors....................................................................37
5.17 Update Of Schedules...........................................................................37
5.18 Compliance With Laws..........................................................................37
5.19 Keyman Life Insurance.........................................................................38
ARTICLE VI Negative Covenants..................................................................................38
6.1 Financial Covenants...........................................................................38
6.2 Liens.........................................................................................39
6.3 Indebtedness..................................................................................39
6.4 Guaranties, Indemnities, Etc..................................................................40
6.5 Loans, Advances And Investments...............................................................41
6.6 Dividends And Related Distributions...........................................................41
6.7 Sale-Leasebacks...............................................................................41
6.8 Leases........................................................................................42
6.9 Mergers, Acquisitions, Etc....................................................................42
6.10 Dispositions Of Properties....................................................................42
6.11 Issuance Of Stock.............................................................................43
6.12 Dealings With Affiliates......................................................................43
6.13 Acquired Delinquent Pools Of Accounts.........................................................43
6.14 Capital Expenditures..........................................................................44
6.15 Limitations On Modification Of Certain Agreements And Instruments.............................44
6.16 Limitation On Payments Of Purchase Money Indebtedness.........................................44
6.17 Limitation On Other Restrictions On Liens.....................................................44
6.18 Limitation On Other Restrictions On Amendment Of The Loan Documents, Etc......................44
ARTICLE VII Defaults...........................................................................................45
7.1 Events Of Default.............................................................................45
7.2 Consequences Of An Event Of Default...........................................................47
7.3 Application Of Proceeds.......................................................................48
ARTICLE VIII The Administrative Agent..........................................................................49
8.1 Appointment...................................................................................49
8.2 General Nature Of Administrative Agent's Duties...............................................49
8.3 Exercise Of Powers............................................................................50
8.4 General Exculpatory Provisions................................................................50
8.5 Administration By The Administrative Agent....................................................51
8.6 Lenders Not Relying On Administrative Agent Or Other Lenders..................................52
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8.7 Indemnification...............................................................................52
8.8 Administrative Agent's Records................................................................52
8.9 Successor Administrative Agent................................................................53
8.10 Additional Agents............................................................................53
8.11 Calculations..................................................................................54
8.12 Administrative Agent In Its Individual Capacity...............................................54
ARTICLE IX Special Inter-Obligor Provisions....................................................................54
9.1 Acknowledgements of Synergies and Inter-dependence............................................54
9.2 Certain Inter-Obligor Agreements..............................................................55
9.3 Borrower's Records............................................................................55
ARTICLE X Definitions, Construction............................................................................56
10.1 Certain Definitions...........................................................................56
10.2 Construction..................................................................................73
10.3 Accounting Principles.........................................................................74
ARTICLE XI Miscellaneous.......................................................................................74
11.1 Notices.......................................................................................74
11.2 Prior Understandings; Entire Agreement........................................................75
11.3 Severability..................................................................................75
11.4 Descriptive Headings..........................................................................75
11.5 Governing Law.................................................................................75
11.6 Non-Merger Of Remedies........................................................................75
11.7 No Implied Waiver; Cumulative Remedies........................................................76
11.8 Amendments; Waivers...........................................................................76
11.9 Successors And Assigns........................................................................77
11.10 Counterparts; Photocopied Or Telecopied Signature Pages.......................................79
11.11 Maximum Lawful Interest Rate..................................................................79
11.12 Indemnification...............................................................................79
11.13 Expenses......................................................................................80
11.14 Maximum Amount Of Joint And Several Liability.................................................81
11.15 Authorization Of NCO Group By Other Obligors..................................................81
11.16 Certain Waivers By Borrower...................................................................82
11.17 Set-Off.......................................................................................82
11.18 Sharing Of Collections........................................................................82
11.19 Other Loan Documents..........................................................................83
11.20 Certain Borrower Acknowledgements.............................................................83
11.21 Consent To Jurisdiction, Service And Venue; Waiver Of Jury Trial; Damages.....................83
11.22 Most Favored Borrower.........................................................................84
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Exhibits
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A Form of RC Note
B Form of Borrowing Notice
C Form of Prepayment Notice
D Form of LIBO Rate Selection Notice
E Form of Amended and Restated Security Agreement
F Form of Amended and Restated Stock Pledge
G Form of Subsidiary Guaranty
H Form of Certificate of Pro Forma Covenant Compliance
I Form of Quarterly Compliance Certificate
J Form of Seller Subordination Agreement
K Form of Seller Subordination Agreement (for seller notes aggregating
less than $2,000,000 in original principal amount)
K-1 Form of Seller Subordination Agreement (for seller notes aggregating
less than $10,000,000 in original principal amount)
L Form of Assignment and Acceptance
M Form of Joinder Agreement
Schedules
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1.1 Lender's RC Commitments
4.1(a) Jurisdictions
4.1(h) Undisclosed Liabilities
4.1(m) Partnerships
4.1(n) Ownership
4.1(r) Insurance
4.1(t) Intellectual Property
4.1(v) Employee Benefits
4.1(w) Environmental Matters
4.1(y) Names
5.16 Excluded Subsidiaries
5.4 Corporate Restructuring
6.2 Liens
6.3 Indebtedness
6.5 Loans and Investments
6.12 Affiliate Transactions
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CREDIT AGREEMENT
THIS FIFTH AMENDED AND RESTATED CREDIT AGREEMENT, dated as of December
31, 1999, by and between NCO GROUP, INC., a Pennsylvania corporation ("NCO
Group" or the "Borrower") and the Lenders referred to on the signature page
hereto (together with other lenders party hereto from time to time pursuant to
Section 11.9 below, and their successors and assigns, the "Lenders"), MELLON
BANK, N.A., a national banking association ("Mellon") for itself and as
Administrative Agent for the other Lenders (in such capacity, together with its
successors and assigns in such capacity, the "Administrative Agent") and MELLON
BANK, N.A., a national banking association, as issuer of Letters of Credit
hereunder (in such capacity, together with its successors and assigns in such
capacity, the "Issuer").
Recitals:
A. NCO Financial Systems, Inc. ("NCO Financial") and Mellon
entered into that certain Credit Agreement dated as of July 28, 1995 ("Original
Credit Agreement"), pursuant to which Mellon made available to NCO Financial
certain credit facilities. The Original Credit Agreement was amended and
restated on September 5, 1996 (the "1996 Credit Agreement") pursuant to which
NCO Financial, NCO Group, Inc. ("NCO Group"), NCO Funding, Inc., and NCO of New
York, Inc. each became parties to the 1996 Credit Agreement, and further amended
on September 11, 1996, December 13, 1996, and February 11, 1998. The 1996 Credit
Agreement was amended and restated as of March 23, 1998 (the "March 1998 Credit
Agreement") and further clarified by those certain Closing Memoranda dated May
5, 1998 and May 29, 1998. The March 1998 Credit Agreement was amended and
restated as of November 30, 1998 (the "November 1998 Credit Agreement"),
pursuant to which all U.S. subsidiaries as of that date (other than the then
Excluded Subsidiaries) of NCO Group became parties to the November 1998 Credit
Agreement. The November 1998 Credit Agreement was modified by a Closing
Memorandum dated November 30, 1998, a Global Amendment dated as of January 11,
1999 and a First Amendment dated February 11, 1999. The November 1998 Credit
Agreement was amended and restated as of May 20, 1999 (the "Existing Credit
Agreement") under which the credit facilities were increased and restructured.
The Existing Credit Agreement was modified by a Closing Memorandum dated as of
May 20, 1999. In preparation for syndication of the new reducing revolving
credit facility, certain other changes were made in an interim draft of the
Existing Credit Agreement dated as of July 23, 1999; these changes were made
retroactive to May 20, 1999 and approved by NCO Group by letter dated as of July
27, 1999.
B. In response to accounting issues that government
regulations have made problematic, the Borrower has requested that the existing
credit facility be restructured as a loan to NCO Group that is guaranteed by all
U.S. subsidiaries other than the Excluded Subsidiaries of NCO Group. The Lenders
have agreed to make this structural change and certain other changes on the
terms and conditions set forth below.
C. In connection with the foregoing modifications, all Loans
outstanding under the Existing Credit Agreement shall be deemed repaid and
immediately reborrowed by NCO Group alone on the date hereof.
D. In furtherance of their goals, the parties have agreed to
amend and restate the Credit Agreement on the terms and conditions set forth
below.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants herein contained and intending to be legally bound hereby, the
Borrower and the Lenders agree that the Credit Agreement is hereby amended and
restated in its entirety as follows:
ARTICLE I
CREDIT FACILITY
1.1 Commitment To Lend. Upon the terms and subject to the conditions of
this Agreement (including all conditions precedent in Section 3.1), each Lender
agrees to make, from time to time during the period from and including the
Closing Date to but excluding the Maturity Date, one or more revolving credit
loans ("RC Loans") to the Borrower in an aggregate unpaid principal amount not
exceeding at any time such Lender's RC Commitment at such time; provided,
however, that the Borrower shall not request, and the Lenders shall have no
obligation to make, any Loans at any time in excess of the Available RC
Commitment. The total amount of the RC Commitment of all Lenders on the Closing
Date is $350,000,000.00.
1.2 [Intentionally omitted].
1.3 Manner Of Borrowing.
(a) Notice of Borrowing. The Borrower shall give the
Administrative Agent notice (which shall be irrevocable), in the case of Prime
Rate Loans, no later than 12:00 p.m. (Philadelphia, Pennsylvania time) on the
Business Day for the making of such RC Loans and, in the case of LIBO Rate
Loans, 12:00 p.m. (Philadelphia, Pennsylvania, time) three (3) Business Days
before the requested date for the making of such RC Loans. Each such notice
shall be in the form of Exhibit B hereto and shall specify (i) the requested
date for the making of such RC Loans which date shall be a Business Day, (ii)
the Type or Types of Loans requested and (iii) the amount of each such Type of
Loan, which amount shall be $1,000,000.00 or any integral multiple of
$500,000.00 in excess thereof (except that the amount of the requested RC Loan
may be less if the amount requested is equal to the total Available RC
Commitment). Upon receipt of any such notice, the Administrative Agent shall
promptly notify each applicable Lender of the contents thereof and of the amount
and Type of each Loan to be made by such Lender on the requested date specified
therein.
(b) Funding by Lenders. Not later than 3:00 p.m.
(Philadelphia, Pennsylvania time) on each requested date for the making of
Loans, each Lender shall make available to the Administrative Agent, in Dollars
and in funds immediately available to the Administrative Agent at the office
designated by the Administrative Agent, the Loans to be made by such Lender on
such date, provided however that if a Lender does not receive timely notice from
the Administrative Agent as set forth in paragraph (a) above, such Lender shall
fund the required amount promptly upon receipt of such notice. The obligations
of the Lenders hereunder are several; accordingly, any Lender's failure to make
any Loan to be made by it on the requested date therefor shall not relieve any
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other Lender of its obligation to make any Loan to be made by it on such date,
but the latter shall not be liable for the former's failure.
(c) Permitted Assumption as to Funding. Unless the
Administrative Agent shall have received notice from a Lender prior to 1:00 p.m.
(Philadelphia, Pennsylvania time) on the requested date for the making of any
Loan that such Lender will not make available to the Administrative Agent the
Loan requested to be made by it on such date, the Administrative Agent may
assume that such Lender has made such Loan available. The Administrative Agent
in its sole discretion and in reliance upon such assumption, may make available
to the Borrower on the requested date a corresponding amount on behalf of such
Lender. If and to the extent such Lender shall not have made available to the
Administrative Agent the Loans requested to be made by such Lender on such date
and the Administrative Agent shall have so made available to the Borrower a
corresponding amount on behalf of such Lender, (i) such Lender shall, on demand,
pay to the Administrative Agent such corresponding amount together with interest
thereon, for each day from the date such amount shall have been so made
available by the Administrative Agent to the Borrower until the date such amount
shall have been paid in full to the Administrative Agent, at the Federal Funds
Rate until (and including) the third Business Day after demand is made and
thereafter at the Prime Rate, and (ii) the Administrative Agent shall be
entitled to all interest payable by Borrower on such amount for the period
commencing on the date such amount was advanced by the Administrative Agent to
but not including the date on which such amount is received by the
Administrative Agent from such Lender. Moreover, any Lender that shall have
failed to make available the required amount shall not be entitled to vote on
such matters as Lenders or Majority Lenders are otherwise entitled to vote on or
consent to or approve under this Agreement and the other Loan Documents until
such amount with interest is paid in full to the Administrative Agent by such
Lender. Without limiting any obligations of any Lender pursuant to this
paragraph (c), if such Lender does not pay such corresponding amount promptly
upon the Administrative Agent's demand therefor, the Administrative Agent shall
notify the Borrower and the Borrower shall promptly repay such corresponding
amount to the Administrative Agent together with accrued interest thereon at the
applicable rate or rates on such Loans.
(d) Disbursements of Funds to Borrower. All amounts made
available to the Administrative Agent in accordance with paragraph (b) above
shall be disbursed by the Administrative Agent promptly but in any event not
later than 4:00 p.m. (Philadelphia, Pennsylvania time) on the requested date
therefor in Dollars, in funds immediately available to the Borrower by crediting
such amount to an account of Borrower at the Administrative Agent's Domestic
Lending Office or in such other manner as may be agreed to by Borrower and the
Administrative Agent.
1.4 Repayments. The aggregate outstanding principal amount of the RC
Loans shall mature and become due and payable, and shall be repaid by the
Borrower, on the Maturity Date. Borrower shall also repay immediately the amount
by which the outstanding RC Loans exceed the RC Commitment at any time following
a reduction in the RC Commitment.
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1.5 Voluntary Prepayments.
(a) Optional Prepayments. The Borrower may, at any time and
from time to time, prepay the Loans in whole or in part, without premium or
penalty (but with any payment required under Section 2.4 (Breakage)), except
that any optional partial prepayment (other than a prepayment of all outstanding
Loans) shall be in an aggregate principal amount of $500,000.00 or any integral
multiple of $250,000.00 in excess thereof. Amounts to be so prepaid shall
irrevocably be due and payable on the date specified in the applicable notice of
prepayment delivered pursuant to paragraph (b) of this Section 1.5 together with
interest thereon as provided in Section 1.8 (Interest), other fees, charges and
expenses set forth herein and together with any payment required under Section
2.4 (Breakage).
(b) Application and Timing of Prepayments.
(i) Notice. The Borrower shall give the
Administrative Agent notice of each prepayment of Loans, which notice, in the
case of a prepayment of Prime Rate Loans, shall be given no later than 1:00 p.m.
(Philadelphia, Pennsylvania time) one (1) Business Day before and, in the case
of a prepayment of LIBO Rate Loans, no later than 12:00 P.M. (Philadelphia,
Pennsylvania, time) three (3) Business Days before, the date of such prepayment.
Each such notice of prepayment shall be in the form of Exhibit C hereto and
shall specify (i) the date such prepayment is to be made, and (ii) the amount
and Type and, in the case of any LIBO Rate Loan, the last day of the applicable
Interest Period for the RC Loan to be prepaid. Upon receipt of any such notice,
the Administrative Agent shall promptly notify each applicable Lender of the
contents thereof.
(ii) Timing and Application of Voluntary Prepayments.
Any voluntary prepayments pursuant to paragraph (a) of this Section 1.5 shall be
applied in the following order unless otherwise directed by the Borrower:
(1) First, prepayments shall be applied
against any interest, breakage and other fees,
charges and expenses due and payable in respect of
the Obligations.
(2) Second, prepayments shall be applied
against the RC Loans but with no corresponding
reduction in the amount of the Commitment unless
otherwise specified by Borrower in accordance with
Section 1.7 hereof.
Any excess shall be applied to any other amounts owing in respect of the
Obligations and, if all such Obligations have been then paid in full, then any
excess amount shall be returned to Borrower or as otherwise required by
applicable Law.
1.6 Payments By The Borrower In General.
(a) Time, Place and Manner. All payments due to the
Administrative Agent and the Lenders under the Loan Documents shall be made to
the Administrative Agent at the office designated by the Administrative Agent on
the signature pages hereto or to such other Person or at such other address as
the Administrative Agent may designate by written notice to Borrower. Until
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further notice from the Administrative Agent and except as otherwise provided
herein, all such payments shall be made by charging the Borrower's deposit
account with the Administrative Agent as provided in Section 1.6(c). Except as
otherwise set forth in this Agreement, a payment shall not be deemed to have
been made on any day unless such payment has been received by the required
Person, at the required place of payment, in Dollars in funds immediately
available to such Person, no later than 1:00 p.m. (Philadelphia, Pennsylvania
time) on such day; provided, however, that the failure of the Borrower to make
any such payment by such time shall not constitute a Default hereunder so long
as such payment is received no later than 3:00 p.m. (Philadelphia, Pennsylvania
time) on such day, but any such payment received later than 1:00 p.m.
(Philadelphia, Pennsylvania time) on such day shall be deemed to have been made
on the next Business Day for the purpose of calculating interest on the amount
paid, provided further, that any such payment made with the proceeds of Loans
shall be deemed to have been made on the date of the making of such Loans, so
long as such proceeds are immediately so applied and are not otherwise disbursed
to the Borrower.
(b) No Reductions. All payments due to the Administrative
Agent or any Lender under this Agreement and the other Loan Documents, shall be
made by the Borrower without any reduction or deduction whatsoever, including
any reduction or deduction for any charge, set-off, holdback, recoupment or
counterclaim (whether sounding in tort, contract or otherwise).
(c) Authorization to Charge Accounts. The Borrower hereby
authorizes the Administrative Agent to charge any amounts due under this
Agreement against any or all of the demand deposit or other accounts (other than
accounts containing escrow funds) of Borrower with the Administrative Agent
(whether maintained at a branch or office located within or without the United
States), with the Borrower remaining liable for any deficiency. The
Administrative Agent shall give the Borrower one day prior notice of the amount
to be charged; provided, however, that advance notice shall not be required to
charge any amount due for interest or the Unused Fee, and the Administrative
Agent shall only advise of such charge after such charge has been made.
(d) Extension of Payment Dates if Not a Business Day. Whenever
any payment to the Administrative Agent or any Lender under the Loan Documents
would otherwise be due (except by reason of acceleration) on a day that is not a
Business Day, such payment shall instead be due on the next succeeding Business
Day unless, in the case of a payment of the principal of LIBO Rate Loans, such
extension would cause payment to be due in the next succeeding calendar month,
in which case such due date shall be advanced to the next preceding Eurodollar
Business Day. If the due date for any payment under the Loan Documents is
extended (whether by operation of any Loan Document, applicable Law or
otherwise), such payment shall bear interest for such extended time at the rate
of interest applicable hereunder.
(e) Disbursement of Payments to Lenders. The Administrative
Agent shall promptly distribute to each applicable Lender its ratable share of
each payment received by the Administrative Agent under the Loan Documents for
the account of such Lender by crediting an account of such Lender at the
Administrative Agent's office or by wire transfer to an account of such Lender
at an office of any other commercial bank located in the United States or at any
Federal Reserve Bank designated by such Person. Unless the Administrative Agent
shall have received notice from Borrower prior to the date on which any payment
is due to
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any Lenders under the Loan Documents that the Borrower will not make such
payment in full, the Administrative Agent may assume that the Borrower has made
such payment in full to the Administrative Agent on such date and the
Administrative Agent, in its sole discretion may, in reliance upon such
assumption, cause to be distributed to each applicable Lender on such due date,
a corresponding amount with respect to the amount then due to such Person. If
and to the extent that the Borrower shall not have so made such payment in full
to the Administrative Agent, and the Administrative Agent shall have so
distributed to such Lender or Lenders a corresponding amount, such Lender shall,
on demand, repay to the Administrative Agent the amount so distributed together
with interest thereon, for each day from the date such amount is distributed to
such Lender until the date such Person repays such amount to the Administrative
Agent, at the Federal Funds Rate until (and including) the third Business Day
after demand is made and thereafter at the Prime Rate. Moreover, any Lender that
shall have failed to make available the required amount shall not be entitled to
vote on such matters as Lenders or Majority Lenders are otherwise entitled to
vote on or consent to or approve under this Agreement and the other Loan
Documents until such amount with interest is paid in full to the Administrative
Agent by such Lender. Nothing in this Section 1.6 shall relieve the Borrower
from any payment obligations.
(f) Breakage Costs on LIBO Rate Loans. Any repayment or
prepayment of a LIBO Rate Loan made on a day other than the last day of the
applicable Interest Period therefor shall be subject to payments in respect of
breakage costs as required to be paid in respect thereof pursuant to Section 2.4
below.
1.7 Reductions Of RC Commitment.
(a) Mandatory Reductions.
(i) Quarterly Reductions. Beginning March 31, 2001,
the RC Commitment shall be reduced quarterly by $6,250,000 on the last day of
each calendar quarter until the Maturity Date.
(ii) Debt or Equity Offerings. After March 31, 2000,
Borrower shall apply at least fifty percent (50%) of the net proceeds received
from any offering of debt or equity by Borrower to reduce the RC Commitment
permanently.
(b) Optional Reductions and Termination. The Borrower may
reduce or terminate the RC Commitment by giving the Administrative Agent notice
(which shall be irrevocable) thereof no later than 11:00 a.m. (Philadelphia,
Pennsylvania, time) on the third Business Day (fifth Business Day for
termination of the RC Commitment) before the requested date of such reduction or
termination, provided, that each partial reduction thereof shall be in an amount
equal to $5,000,000.00 or any integral multiple of $1,000,000.00 in excess
thereof and, provided, further, that no reduction shall reduce the Commitment to
an amount less than the aggregate of the principal amount of all Loans
outstanding on such date (after giving effect to any repayment or prepayment of
RC Loans made on or prior to such date). Upon receipt of any such notice, the
Administrative Agent shall promptly notify each Lender of the contents thereof
and the amount (based on a pro rata reduction to each Lender's RC Commitment) to
which such Lender's RC Commitment is to be reduced.
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(c) No Reinstatement of RC Commitment. All reductions of the
RC Commitment are permanent and the RC Commitment cannot be restored without the
written consent of all Lenders.
(d) Payment. On each date ("Reduction Date") on which the RC
Commitment is reduced (either voluntarily or involuntarily) the Borrower shall
pay to the Administrative Agent the amount, if any, by which the outstanding
principal balance of the RC Loans exceeds the amount of the RC Commitment as
reduced on such Reduction Date.
(e) Application of Reductions. Each mandatory reduction made
pursuant to Section 1.7(a)(ii) and each optional reduction under Section 1.7(b)
shall be applied pro-rata across the remaining quarterly reductions required
under Section 1.7(a)(i).
1.8 Interest.
(a) Interest Rates in General. Subject to the terms and
conditions of this Agreement, each Loan, at the option of the Borrower, shall
bear interest on the outstanding principal amount thereof until paid in full at
a rate per annum equal to (i) the Prime Rate as in effect from time to time plus
the Applicable Margin or (ii) the applicable LIBO Rate for a specified Interest
Period plus the Applicable Margin.
(b) Election of LIBO Rate. Unless otherwise designated by the
Borrower as a LIBO Rate Loan in accordance with this paragraph (b), each Loan
shall be deemed to be a Prime Rate Loan as more fully set forth below.
(i) Prime Rate Unless Otherwise Designated. Prime
Rate Loans shall continue as Prime Rate Loans unless and until such Loans are
converted into Loans of another Type. LIBO Rate Loans for any Interest Period
shall continue as Loans of such Type until the end of the then current Interest
Period therefor, at which time they shall be automatically converted into Prime
Rate Loans unless Borrower shall have given the Administrative Agent notice in
accordance with clause (ii) below requesting that such Loans continue as LIBO
Rate Loans for another Interest Period of a specified duration.
(ii) Election of LIBO Rate. To elect a LIBO Rate,
Borrower shall give the Administrative Agent notice (which shall be irrevocable)
no later than 12:00 p.m. (Philadelphia, Pennsylvania, time) three (3) Eurodollar
Business Days before the requested date of the funding, conversion or
continuation which date shall be a Eurodollar Business Day. Each such notice
shall be in the form of Exhibit D hereto and shall specify (A) the requested
date of such funding, conversion or continuation, (B) whether the subject Loan
is a new advance or an existing Loan that is to be converted or continued, (C)
in the case of any LIBO Rate Loan being continued, the last day of the current
Interest Period, and (D) the amount of, and the desired Interest Period for, the
Loan subject to such LIBO Rate election, provided that the Borrower shall not be
entitled to select an Interest Period for any Loan which shall end on a date
later than the Maturity Date. Upon receipt of any such notice, the
Administrative Agent shall promptly notify each applicable Lender of the
contents thereof.
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(iii) LIBO Rate Suspended During Event of Default.
Notwithstanding anything to the contrary contained in clause (i) or (ii) of this
paragraph (b), so long as an Event of Default shall have occurred and be
continuing, the Administrative Agent may (and, at the request of the Majority
Lenders, shall) notify Borrower that Loans may only be converted into or
continued upon the expiration of the applicable current Interest Period therefor
as Prime Rate Loans or Loans of such specified Types as shall be acceptable to
the Majority Lenders. Thereafter, until no Event of Default shall continue to
exist, Loans may not be converted into or continued as Loans of any Type other
than Prime Rate Loans or one or more of such specified Types.
(iv) Limitation on Types of Loans. Notwithstanding
anything to the contrary contained in this Agreement, the Borrower shall borrow,
prepay, convert and continue Loans in a manner such that (A) unless otherwise
agreed to by the Administrative Agent, the aggregate principal amount of LIBO
Rate Loans of the same Type shall, at all times, be not less than $1,000,000.00
and (B) there shall be, at any one time, no more than ten (10) Interest Periods
for LIBO Rate Loans in effect.
(v) Flexibility as to Source. Each Lender may fund
LIBO Rate Loans from any source that such Lender deems (in its sole discretion)
appropriate without loss of any rights hereunder.
(c) Interest Payment Dates. Interest shall be payable, (i) in
the case of Prime Rate Loans, monthly in arrears on each Monthly Payment Date,
(ii) in the case of LIBO Rate Loans, on the last day of each applicable Interest
Period (and, in the case of any LIBO Rate Loan having an Interest Period longer
than three months, on each three month anniversary of the first day of such
Interest Period) and (iii) in the case of any Loan, when such Loan shall be due
(whether at maturity, upon mandatory prepayment, by reason of notice of
prepayment or acceleration or otherwise) or converted, but only to the extent
then accrued on the amount then so due or converted.
(d) Default Rate. At any time that an Event of Default shall
have occurred and shall be continuing, any amount payable hereunder and under
each other Loan Document shall bear interest (whether before or after judgment),
payable on demand, at a rate per annum equal to the applicable Default Rate.
1.9 Fees.
(a) Unused Fee. The Borrower shall pay to the Administrative
Agent, for the account of each Lender, an unused fee ("Unused Fee") calculated
at a rate per annum equal to the percentage amount set forth below, under the
caption "Unused Fee" opposite the relevant Consolidated Funded Debt/Consolidated
EBITDA Ratio, on the daily unused amount of such Lender's RC Commitment for each
day from and including the Closing Date to but excluding the Maturity Date:
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GRID A (pre-offering)
Consolidated Funded Debt/
Consolidated EBITDA Ratio Unused Fee
------------------------- ----------
below 2.0 1/8%
greater than or equal to 2.0
less than or equal to 3.0 1/4%
> 3.0 3/8%
GRID B (post-offering)
Consolidated Funded Debt/
Consolidated EBITDA Ratio Unused Fee
------------------------- ----------
below 2.0 1/8%
greater than or equal to 2.0 < 3.0 1/4%
greater than or equal to 3.0
less than or equal to 3.5 3/8%
> 3.5 1/2%
The Unused Fee will be initially calculated based on Grid A. In the event
Borrower successfully completes by March 31, 2000 (i ) a convertible
subordinated debt issuance in the minimum amount of $150,000,000 and/or (ii) a
common stock issuance in the minimum amount of $100,000,000 and/or (iii) a
convertible subordinated debt issuance in the minimum amount of $100,000,000 in
conjunction with a common stock issuance in the minimum amount of $25,000,000,
the Unused Fee shall be calculated on Grid B beginning on the first day of the
quarter following such event. Notwithstanding anything above to the contrary, if
the RC Loans outstanding are less than $150,000,000 the Unused Fee shall not be
less than 1/4%.
The Unused Fee shall be payable in arrears (i) on successive Monthly Payment
Dates beginning with the first Monthly Payment Date after the Closing Date (ii)
on the date of any reduction of the Commitment (to the extent accrued and unpaid
on the amount of such reduction) and (iii) on the Maturity Date. The Unused Fee
shall be adjusted on the first Business Day of the month after delivery of each
Officer's Compliance Certificate under Section 5.1 or in the event of any
Permitted Acquisition, on the first Business Day of the month after closing and
delivery of the Pro-Forma Covenant Compliance Certificate required for the
acquisition. If an Officer's Compliance Certificate is required to be delivered
pursuant to Section 5.1 and is not delivered by its deadline, then five (5)
Business Days after notice to Borrower the Unused Fee shall be the highest
percentage specified above until the Officer's Compliance Certificate is so
delivered.
(b) Letter of Credit Fees. The Borrower shall pay to the
Issuer for the ratable benefit of the Lenders, a "Letter of Credit Fee" on the
face amount of each Letter of Credit at a rate per annum equal to 1 1/2%. Such
fee shall be payable upon issuance of each Letter of Credit and, if the Letter
of Credit is "evergreen", on each anniversary of such issuance for so long as
the Letter of Credit remains outstanding. The Borrower shall also pay to the
Issuer for the Issuer's sole account the Issuer's then in effect standard
document preparation fees and reasonable administrative expenses payable with
respect to Letters of Credit.
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(c) Other Fees. The Borrower shall pay to the Administrative
Agent for the sole account of the Administrative Agent, such fees, including an
annual Administrative Agent's fee, as have been or may be agreed to in writing
by the Borrower and the Administrative Agent in connection with this Agreement
and the transactions contemplated by this Agreement.
1.10 Computation Of Interest And Fees. Interest and fees shall be
computed on the basis of a year of 360 days and paid for the actual number of
days elapsed. Interest and fees for any period shall be calculated from and
including the first day thereof to but excluding the last day thereof.
1.11 Promissory Notes; Records Of Account. Each Lender's Loans and the
Borrower's obligations to repay such Loans with interest in accordance with the
terms of this Agreement shall be evidenced by this Agreement, the records of the
Administrative Agent and such Lender and a single RC Note payable to the order
of such Lender. The records of each Lender shall be prima facie evidence of such
Lender's Loans and, in each case, of accrued interest thereon and all payments
made in respect thereto. In the event that there is any dispute concerning the
amount of any such obligations, the amount of each Lender's RC Commitment and
the amount of outstanding Obligations of each and every Type shall at all times
be ascertained from the records of the Administrative Agent, which shall be
conclusive absent manifest error.
1.12 Pro Rata Treatment. Except to the extent otherwise provided
herein, RC Loans shall be made by, and principal, interest and fees in respect
thereof shall be paid or repaid to, the Lenders pro rata in accordance with
their respective RC Commitments and interest in RC Loans.
1.13 Taxes On Payments.
(a) Taxes Payable by the Borrower. If any Tax is required to
be withheld or deducted from, or is otherwise payable by the Borrower in
connection with, any payment due to the Administrative Agent or any Lender that
is not a "United States Person" (as such term is defined in Section 7701(a)(30)
of the Code), the Borrower (i) shall, if required, withhold or deduct the amount
of such Tax from such payment and, in any case, pay such Tax to the appropriate
taxing authority in accordance with applicable Law and (ii) except in the case
of any Bank Tax, shall pay to such Lender or the Administrative Agent such
additional amounts as may be necessary so that the net amount received by such
Person with respect to such payment, after withholding or deducting all Taxes
required to be withheld or deducted (including Taxes on additional amounts
payable under this paragraph (a)), is equal to the full amount payable
hereunder. If any Tax is withheld or deducted from, or is otherwise payable by
the Borrower in connection with, any payment due to any Lender or the
Administrative Agent hereunder, the Borrower shall furnish to such Person the
original or a certified copy of a receipt (if any) for such Tax from the
applicable taxing authority or other evidence of payment thereof satisfactory to
such Person within 30 days after the date of such payment (or, if such receipt
shall not have been made available by such taxing authority within such time,
the Borrower shall use reasonable efforts to promptly obtain and furnish such
receipt). If the Borrower fails to pay any such Taxes when due to the
appropriate taxing authority or fail to remit to any Lender or the
Administrative Agent the required receipts or other evidence of payment thereof
satisfactory to such Person, the Borrower shall indemnify such Person for any
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Taxes, interest, penalties or additions to Tax that may become payable by such
Person as a result of any such failure.
(b) Taxes Payable by any Lender or the Administrative Agent.
The Borrower shall, promptly upon request by any Lender or the Administrative
Agent that is not a United States Person, pay to such Person an amount equal to
(i) all Taxes (other than Bank Taxes and without duplication of amounts paid
pursuant to the preceding paragraph (a)) payable by such Person with respect to
any payment due to such Person hereunder and (ii) all Taxes (other than Bank
Taxes) payable by such Person as a result of payments made by the Borrower
(whether made to a taxing authority or to such Person pursuant to the preceding
paragraph (a) or this paragraph (b)).
(c) Credits and Deductions. If any Lender or the
Administrative Agent is, in its sole opinion, able to apply for any refund,
offset, credit, deduction or other reduction in Taxes by reason of any payment
made by the Borrower under the preceding paragraph (a) or (b), such Lender or
the Administrative Agent, as the case may be, shall use reasonable efforts to
obtain such refund, offset, credit, deduction or other reduction and, upon
receipt thereof, will pay to the Borrower such amount, not exceeding the
increased amount paid by the Borrower, as is equal to the net after-tax value to
such Lender or the Administrative Agent, in its sole opinion, of such part of
such refund, offset, credit, deduction or other reduction as it considers to be
allocable to such payment by the Borrower, having regard to all of such Person's
dealings giving rise to similar refunds, offsets, credits, deductions or other
reductions in relation to the same tax period and to the cost of obtaining the
same; provided, however, that if such Person has made a payment to the Borrower
pursuant to this paragraph (c) and the applicable refund, offset, credit,
deduction or other reduction in Tax is subsequently disallowed, the Borrower
shall, promptly upon request by the Administrative Agent or such Lender refund
to such Person that portion of such payment determined by such Person, in its
sole opinion, relating to such disallowance; and provided, further that (i) the
Administrative Agent or such Lender, as the case may be, shall not be obligated
to disclose to the Borrower any information regarding its Tax affairs or
computations and (ii) nothing in this paragraph (c) shall interfere with the
right of such Person to arrange its Tax affairs as it deems appropriate.
(d) Exemption from U.S. Withholding Taxes. Each Lender that is
not a United States Person shall submit to the Borrower and the Administrative
Agent, on or before the fifth day prior to the first Monthly Payment Date
occurring after the Closing Date (or, in the case of a Person that is not a
United States Person and that became a Lender by assignment, promptly upon such
assignment), two duly completed and signed copies of either (A) Form 1001 of the
United States Internal Revenue Service (or successor form) entitling such Lender
to a complete exemption from withholding on all amounts to be received by such
Lender pursuant to this Agreement and the Loans, (B) Form 4224 of the United
States Internal Revenue Service (or successor form) relating to all amounts to
be received by such Lender pursuant to this Agreement and the Loans or (C) in
the case of a Lender that is claiming an exemption from United States
withholding tax under Section 871(h) or 881(c) of the Internal Revenue Code with
respect to payments of "portfolio interest" two accurate and complete signed
original Forms W-8 (or any successor form prescribed by the Internal Revenue
Service, certifying that such Lender is exempt from or is entitled to a reduced
rate of United States withholding tax on payments under this Agreement or the
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Notes) and, if such Lender delivers such Forms W-8 (or successor form), two
signed certificates that such Lender (1) is not a "bank" for purposes of Section
881(c) of the Internal Revenue Code, (2) is not a 10% shareholder (within the
meaning of Section 871(h)(3)(B) of the Internal Revenue Code) of Borrower and
(3) is not a controlled foreign corporation related to Borrower (within the
meaning of Section 864(d)(4) of the Internal Revenue Code), as appropriate. Each
such Lender shall, from time to time after submitting either such form, submit
to the Borrower and the Administrative Agent such additional duly completed and
signed copies of one or the other such forms (or any successor forms as shall be
adopted from time to time by the relevant United States taxing authorities) as
may be (A) requested in writing by the Borrower or the Administrative Agent and
(B) appropriate under the circumstances and under then current United States law
or regulations to avoid or reduce United States withholding taxes on payments in
respect of all amounts to be received by such Lender pursuant to this Agreement
or the Loans. Upon the request of the Borrower or the Administrative Agent, each
Lender that is a United States Person shall submit to the Borrower and the
Administrative Agent a certificate to the effect that it is a United States
Person.
(e) Survival. Obligations under this Section 1.13 shall
survive payment of the Loans and the other Obligations.
1.14 Registered Notes And Loans.
(a) Request for Registration. Any Lender may request the
Borrower (through the Administrative Agent), and the Borrower agrees thereupon,
to register such Loans as provided in Section 1.14(c) and to issue such Lender's
Note(s), evidencing such Loans, or to exchange such Note(s) for new Note(s),
registered as provided in Section 1.14(c) (each, a "Registered Note"). A
Registered Note may not be exchanged for a Note that is not in registered form.
A Registered Note shall be deemed to be and shall be a Note for all purposes of
this Agreement and the other Loan Documents.
(b) Delivery of Tax Forms. Each Non-U.S. Lender that requests
or holds a Registered Note pursuant to Section 1.14(a) or registers its Loans
pursuant to Section 1.14(a) (a "Registered Lender") (or, if such Registered
Lender is not the beneficial owner thereof, such beneficial owner) shall deliver
to Borrower (with a copy to the Administrative Agent) prior to or at the time
such Non-U.S. Lender becomes a Registered Lender, the applicable form described
in Section 1.13(d) (or such successor and related forms as may from time to time
be adopted by the relevant taxing authorities of the United States) together
with an annual certificate stating that such Registered Lender or beneficial
owner, as the case may be, is not a "bank" within the meaning of Section
881(c)(3)(A) of the Code and is not otherwise described in Section 881(c)(3) of
the Code. Each Registered Lender or beneficial owner, as the case may be, shall
promptly notify Borrower (with a copy to the Administrative Agent) if at any
time such Registered Lender or beneficial owner, as the case may be, determines
that it is no longer in a position to provide such previously delivered
certificate to the Borrower (or any other form of certification adopted by the
relevant taxing authorities of the United States for such purposes).
(c) Registration of Loans. The Administrative Agent, acting,
for this purpose, as agent of the Borrower, shall, upon request of any
Registered Lender, enter in the Register the name, address and taxpayer
identification number (if provided) of the Registered Lender or beneficial
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owner, as the case may be. In addition to the requirements of Section 11.9
(Successors and Assigns), a Registered Note and the Loans evidenced thereby (or
such Loans pending delivery of such Registered Note) or any other Loans
registered pursuant to Section 1.14(a) above may be assigned or otherwise
transferred in whole or in part only by registration of such assignment or
transfer of such Registered Note and/or the Loans so registered on the Register
(and each such Registered Note shall expressly so provide). Any assignment or
transfer of all or part of such Loans and such Registered Note shall be
registered on the Register only upon compliance with the provisions of Section
11.9 and, in the case of Registered Notes, surrender for registration of
assignment or transfer of the Registered Note evidencing such Loans, duly
endorsed by (or accompanied by a written instrument of assignment or transfer
fully executed by) the Registered Lender thereof, and thereupon one or more new
Registered Notes in the same aggregate principal amount shall be issued to the
designated assignee(s) or transferee(s) and, if less than all of such Registered
Notes is thereby being assigned or transferred, the assignor or transferor.
1.15 Issuance Of Letters Of Credit.
(a) In General. Upon the terms and subject to the conditions
of this Agreement, the Issuer shall, from time to time, from the Closing Date to
the date which is 90 days prior to the Maturity Date, issue one or more Letters
of Credit for the account of Borrower, provided that the sum of the Contingent
Reimbursement Obligations (after giving effect to the requested Letter of
Credit) plus the aggregate unpaid amount of all Drawings under Letters of Credit
shall not exceed $10,000,000 and provided, further, that the face amount of the
Letter of Credit so requested shall not exceed the Lenders' Available RC
Commitments at such time. Each Letter of Credit shall be in a form and shall
contain such terms as shall be reasonably satisfactory to the Issuer. Letters of
Credit shall be issued only on a Business Day and shall be used for the general
corporate purposes of the Borrower or for such other purposes as shall be
acceptable to the Issuer in its sole discretion.
(b) Terms. Each Letter of Credit shall be denominated only in
Dollars and shall expire on or before the first anniversary of the issuance
thereof and in any event not later than the fifth Business Day preceding the
Maturity Date. No Letter of Credit shall have an expiration date which is
extendable under an "evergreen" or similar provision unless the Issuer expressly
agrees to the same in its sole discretion in any particular case. All other
extensions and renewals are also at the sole discretion of the Issuer. For
purposes of Section 3.2 only, any extension of the expiry date of a Letter of
Credit to a date beyond the first anniversary of the issuance thereof shall
constitute an "issuance" of such Letter of Credit for all purposes hereof.
(c) Form of Request. The Borrower shall request the issuance
of a Letter of Credit by furnishing to the Agent and the Issuer, at least five
Business Days before the requested date of such issuance (or at such later time
as shall be acceptable to the Issuer), such notice thereof as shall be
reasonably satisfactory to the Issuer to which shall be attached a certificate
of the chief financial officer representing that the Borrower is not, and after
giving effect to the additional Indebtedness will not be, in Default hereunder.
(d) Participation by Lenders. Upon the date of issuance of a
Letter of Credit, the Issuer shall be deemed to have granted to each Lender
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(other than the Issuer), and each Lender (other than the Issuer) shall be deemed
to have acquired from the Issuer without further action by any party hereto, a
participation in such Letter of Credit and any Drawings that may at any time be
made thereunder, to the extent of such Lender's pro rata share of the
Commitment.
(e) Notice of Drawings. The Issuer shall promptly notify
Borrower of its receipt of each Drawing request with respect to a Letter of
Credit, stating the date and amount of the Drawing requested thereby and the
date and amount of each Drawing disbursed pursuant to such request. The failure
of the Issuer to give, or delay in giving, any such notice shall not release or
diminish the obligations hereunder of the Borrower in respect of such Drawing.
(f) Reimbursement of Drawings by Borrower. If at any time
Borrower receives notice of a Drawing, the Borrower shall reimburse such Drawing
by paying to the Issuer in immediately available funds the amount of the payment
made by the Issuer with respect to such Drawing, together with interest thereon
at a rate per annum equal to the Prime Rate from the day that the Drawing is
made until the day such reimbursement is made if such Drawing is not reimbursed
on the day the Drawing is made. Such reimbursement shall be made by the Borrower
to the Issuer no later than one (1) Business Day following the Business Day that
Borrower receives the relevant notice of Drawing if such notice is received on
or prior to 10:00 a.m. (Philadelphia, Pennsylvania time) and no later than two
(2) Business Days following the date that Borrower receives the relevant notice
of Drawing if such notice is received after 10:00 a.m. (Philadelphia,
Pennsylvania time). If the Borrower shall fail to make any payment required by
this paragraph (f) at the time specified, and if at such time, there shall be
any Commitment, the Administrative Agent may (but is not obligated to) assume
that the Borrower intends to use the proceeds of Loans to make such payment. In
reliance on such assumption, the Administrative Agent may (but is not obligated
to) notify the Lenders (and Borrower) that notwithstanding the Borrower's
failure to provide notice pursuant to Section 1.3(a), such notice is deemed
given pursuant to this paragraph (f) requesting a Loan bearing interest at the
Prime Rate in an amount sufficient to make the payments required by this
paragraph. Such notice from the Administrative Agent shall be treated by the
Lenders in the same manner as a notice from the Borrower under Section 1.3(a).
The Administrative Agent may, at the direction of the Issuer, apply the proceeds
of such Loans to satisfy the requirements of this paragraph.
(g) Obligations of Lenders to Issuer. In the event that the
Borrower shall fail to make any payment when due pursuant to the preceding
paragraph (f) and for so long as such failure shall be continuing, the Issuer
may give notice of such failure to the Administrative Agent and each Lender,
which notice shall include, in the case of a Lender, the amount of such Lender's
participating interest in such Drawing, whereupon each such Lender (other than
the Issuer) shall promptly remit such amount to the Administrative Agent for the
account of the Issuer as provided in this paragraph (g). Each Lender (other than
the Issuer) shall, in the event it receives such notice from the Issuer at or
before 12:00 noon (Philadelphia, Pennsylvania time) on any Business Day, fund
its participation in any unreimbursed Drawing by remitting to the Administrative
Agent, no later than 2:00 p.m. (Philadelphia, Pennsylvania time) on such day, in
immediately available funds its share of the reimbursement obligations in
respect of each Drawing. In the event that the Administrative Agent receives
such funds from a Lender at or before 2:00 p.m. (Philadelphia, Pennsylvania
time) on any day, the Administrative Agent shall make available the amount
thereof to the Issuer, in immediately available funds no later than 4:00 p.m.
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(Philadelphia, Pennsylvania time) on that same day. Any amount payable by a
Lender to the Administrative Agent for the account of the Issuer under this
paragraph (g), and any amount payable by the Administrative Agent to the Issuer
under this paragraph (g), shall bear interest for each day from the date due
(and including such day if paid after 2:00 p.m. (Philadelphia, Pennsylvania
time) in the case of any such payment by a Lender to the Administrative Agent,
or 4:00 p.m. (Philadelphia, Pennsylvania time), in the case of any such payment
by the Administrative Agent to the Issuer, on such day) until the date it is
received by the Issuer at a rate equal to the Federal Funds Rate until (and
including) the third Business Day after the date due and thereafter at the Prime
Rate. Moreover, any Lender that shall have failed to make available the required
amount shall not be entitled to vote on such matters, other than those set forth
in Section 11.8, as Lenders or Majority Lenders or Super Majority Lenders are
otherwise entitled to vote on or consent to or approve under this Agreement and
the other Loan Documents until such amount with interest is paid in full to the
Administrative Agent by such Lender. Each Lender shall, upon the demand of the
Issuer, reimburse the Issuer, through the Administrative Agent to the extent
that the Issuer has not been reimbursed by the Borrower after demand therefor,
for the reasonable costs and expenses (including reasonable legal fees) incurred
by it (other than as a result of its willful misconduct or gross negligence as
finally determined by a court of competent jurisdiction) in connection with the
collection of amounts due under, the administration of, and the preservation and
enforcement of any rights conferred by, the Letters of Credit or the performance
of the Issuer's obligations under this Agreement in respect thereof on a pro
rata basis relative to such Lender's pro rata share of the Commitment (as of the
time such costs and expenses are incurred). The Issuer shall refund through the
Administrative Agent any costs and expenses reimbursed by such Lender that are
subsequently recovered from the Borrower in an amount equal to such Lender's
ratable share thereof.
(h) Cash Collateral. It is intended that at all times that the
Borrower shall have contingent or other obligations (including obligations in
respect of fees) relating to Letters of Credit, there shall be sufficient
availability under the Commitment to reimburse the Issuer (and the Lenders) out
of proceeds of Loans. Accordingly, in the event that there shall, at any time,
be insufficient availability under the Commitment (after giving effect to all
outstanding Loans) to do so (whether because the amount of the Commitment is
reduced pursuant to a mandatory reduction or is terminated at maturity, upon
acceleration or otherwise or because the amount of outstanding Loans and such
Letter of Credit obligations exceeds the amount of the Commitment for any other
reason), the Borrower shall forthwith pay to the Administrative Agent an amount
equal to the aggregate face value of all outstanding Letters of Credit plus the
aggregate amount of all unreimbursed Drawings plus the amount of all fees or
other obligations in respect of Letters of Credit to the extent of such excess.
Such amount shall be maintained by the Administrative Agent in an
interest-bearing cash collateral account in the name of and for the benefit of
the Issuer and the Lenders to secure such payment obligations of the Borrower.
Upon receipt of a notice from the Issuer that there are unreimbursed Drawings or
other amounts due in respect of such Letters of Credit (which notice shall set
forth the amount of such unreimbursed Drawings or other obligations) the
Administrative Agent shall promptly disburse from the cash collateral account
the amount specified in the notice and shall pay such amount to the Issuer and
Lenders ratably in accordance with the respective amounts owing to each such
Person, first, for fees and indemnities until the same are paid in full and,
second, for unreimbursed Drawings. The Administrative Agent and the Issuer may
rely on their records as to any amounts so owing and shall be fully protected in
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doing so. Such records shall be conclusive, absent manifest error. At any time
that the Commitment again becomes available for reimbursement of Drawings under
outstanding Letters of Credit such that (i) the sum of the Commitment at that
time and the amount in the cash collateral account exceeds (ii) the sum of all
outstanding Loans, the face amount of all outstanding Letters of Credit and the
amount of all unreimbursed Drawings, then, upon written request of Borrower
(which request shall (A) represent that there exists no Default or Event of
Default and (B) specify the amount of such excess), the Administrative Agent
shall release such excess amount to the Borrower from the cash collateral
account. If all Obligations (other than Obligations constituting contingent
obligations under indemnification provisions which survive indefinitely, so long
as no unsatisfied claim has been made under any such indemnification provision)
have been indefeasibly paid in full in cash, all Commitments have terminated and
all Letters of Credit have expired, promptly following demand by Borrower, the
Administrative Agent shall release to the Borrower all remaining funds in the
Letter of Credit cash collateral account.
(i) Obligations Absolute. The obligation of Borrower and each
Lender to make available to the Issuer the amounts set forth in this Section
1.15 shall be absolute, unconditional and irrevocable under any and all
circumstances without reduction for any set-off or counterclaim of any nature
whatsoever, and may not be terminated, suspended or delayed for any reason
whatsoever, shall not be subject to any qualification or exception and shall be
made in accordance with the terms and conditions of this Agreement under all
circumstances, including any of the following circumstances:
(1) any lack of validity or enforceability of this
Agreement or any of the other Loan Documents;
(2) the existence of any claim, setoff, defense or
other right which Borrower may have at any time against a
beneficiary named in a Letter of Credit, any transferee of
any Letter of Credit (or any Person for whom any such
transferee may be acting), the Administrative Agent, the
Issuer, any Lender or any other Person, whether in
connection with this Agreement, any Letter of Credit, the
transactions contemplated herein or any unrelated
transactions (including any underlying transaction between
Borrower and the beneficiary named in any such Letter of
Credit);
(3) any draft, certificate or any other document
presented under any Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any
respect;
(4) the surrender or impairment of any security for
the performance or observance of any of the terms of any
of the Loan Documents; or
(5) the occurrence of any Default or Event of
Default.
(j) Limitations on Liability; Protection of Issuer,
Administrative Agent and Lenders.
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(1) Limitation on Liability of Lenders.
Without affecting any rights any Lenders may have
under applicable Law, Borrower agrees that none of
the Lenders, the Issuer, the Administrative Agent or
their respective officers or directors shall be
liable or responsible for, and the obligations of the
Borrower to the Lenders, the Issuer and the
Administrative Agent hereunder shall not in any
manner be affected by: (A) the use that may be made
of any Letter of Credit or the proceeds thereof by
the beneficiary thereof or any other Person or any
acts or omissions of such beneficiary or any other
Person; (B) the validity, sufficiency or genuineness
of documents presented in connection with any
Drawing, or of any endorsements thereon, even if such
documents should, in fact, prove to be in any or all
respects, invalid, insufficient, fraudulent or
forged; or (C) any other circumstances whatsoever in
making or failing to make payment under any Letter of
Credit or any other action taken or omitted to be
taken by any Person under or in connection with any
Letter of Credit, except that the Borrower shall have
a claim against the Issuer and the Issuer shall be
liable to the Borrower, in each case to the extent
and only to the extent of any damages suffered by the
Borrower that it proves are caused by the Issuer's
willful misconduct or gross negligence. In
furtherance and not in limitation of the foregoing,
in determining whether to pay under any Letter of
Credit, the Issuer shall not have any obligation
relative to the other Lenders other than to determine
that any documents required to be delivered under
such Letter of Credit appear to have been delivered
and that they appear to comply on their face with the
requirements of such Letter of Credit, regardless of
any notice or information to the contrary. Any action
taken or omitted to be taken by the Issuer under or
in connection with any Letter of Credit (if taken or
omitted in the absence of gross negligence or willful
misconduct, as finally determined by a court of
competent jurisdiction) shall not create for the
Issuer any resulting liability to Borrower or any
Lender.
(2) Indemnification and Expenses. In
addition to any other amounts payable under this
Agreement, the Borrower agrees to protect, indemnify,
pay and hold the Issuer and each Lender harmless from
and against any and all claims, costs, charges and
expenses (including reasonable attorneys' fees) which
the Issuer may incur or be subject to as a
consequence, direct or indirect, of (A) the issuance
of, or payment of any drawing under, any Letter of
Credit, other than as a result of the gross
negligence or willful misconduct of the Issuer and/or
such Lender as finally determined by a court of
competent jurisdiction or (B) the failure of the
Issuer to honor a Drawing under any Letter of Credit
as a result of any act or omission of any present or
future government or Governmental Authority.
(3) Issuer Not Responsible. In furtherance
of the foregoing limitations on liability, the Issuer
shall not be responsible for: (A) the form, validity,
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sufficiency, accuracy, genuineness or legal effect of
any document submitted by any party in connection
with the issuance of Letters of Credit; (B) the
validity or sufficiency of any instrument
transferring or assigning or purporting to transfer
or assign a Letter of Credit or the rights or
benefits thereunder or proceeds thereof in whole or
in part; (C) errors, omissions, interruptions, or
delays in transmissions or delivery of any messages,
by mail, cable, telecopy, telex or otherwise, whether
or not in cipher; (D) the misapplication by the
beneficiary of any Letter of Credit or the proceeds
of any drawing under such Letter of Credit; or (E)
any consequence arising from causes beyond the
control of the Issuer, including any governmental
acts except for damages proven to be caused by the
Issuer's gross negligence or willful misconduct.
ARTICLE II
YIELD PROTECTION AND BREAKAGE INDEMNITY
2.1 Mandatory Suspension And Conversion Of LIBO Rate Loans. Each
Lender's obligations to make, continue or convert into LIBO Rate Loans of any
Type shall be suspended, all such Lender's outstanding Loans of such Type shall
be converted into Prime Rate Loans on the last day of their applicable Interest
Periods (or, in the case of clause (c) below, on the last day such Lender may
lawfully continue to maintain Loans of such Type if earlier, or, in the case of
clause (d) below, on the day determined by such Lender to be the last Business
Day before the effective date of the applicable restriction), and all pending
requests for the making or continuation of or conversion into Loans of such Type
by such Lender shall be deemed requests for Prime Rate Loans, if:
(a) on or prior to the date required for the determination of
a LIBO Rate for any Interest Period, the Administrative Agent determines that
for any reason appropriate information is not available to it for purposes of
determining the LIBO Rate for such Interest Period;
(b) on or prior to the first day of any Interest Period for a
LIBO Rate Loan, the Majority Lenders have informed the Administrative Agent of
their determination that the LIBO Rate as determined by the Administrative Agent
for such Interest Period would not accurately reflect the cost to such Lenders
of making, continuing or converting into a LIBO Rate Loan for such Interest
Period;
(c) at any time such Lender determines that any Regulatory
Change makes it unlawful or impracticable for such Lender or its applicable
Eurodollar Lending Office to make, continue or convert into a LIBO Rate Loan of
such Type, or to comply with its obligations hereunder in respect thereof; or
(d) such Lender notifies the Administrative Agent of its
determination that (i) by reason of any Regulatory Change, such Lender or its
applicable Eurodollar Lending Office is restricted, directly or indirectly, in
the amount that it may hold of (A) a category of liabilities that includes
deposits by reference to which, or on the basis of which, the interest rate
applicable to LIBO Rate Loans of such Type is directly or indirectly determined
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or (B) the category of assets that includes LIBO Rate Loans of such Type and
(ii) in connection therewith, such Lender has elected not to make available
hereunder LIBO Rate Loans of such Type.
If, as a result of this Section 2.1, any Loan of any Lender that would otherwise
be made or maintained as or converted into a LIBO Rate Loan for any Interest
Period is instead made or maintained as or converted into a Prime Rate Loan,
then, unless the corresponding Loan of each of the other Lenders is also to be
made or maintained as or converted into a Prime Rate Loan, such Loan shall be
treated as being a LIBO Rate Loan of such Type for such Interest Period for all
purposes of this Agreement (including the timing, application and proration
among the Lenders of interest payments, conversions and prepayments) except for
the calculation of the interest rate borne by such Loan. The Administrative
Agent shall promptly notify Borrower and each Lender of the existence or
occurrence of any condition or circumstance specified in clause (a) or (b)
above, and each Lender shall promptly notify Borrower and the Administrative
Agent of the existence, occurrence or termination of any condition or
circumstance specified in clause (c) or (d) above applicable to such Lender's
Loans, but the failure by the Administrative Agent or such Lender to give any
such notice shall not affect such Lender's rights hereunder.
2.2 Regulatory Changes. If in the determination of any Lender (a) any
Regulatory Change shall actually directly or indirectly
(i) reduce the amount of any sum received or receivable by
such Lender with respect to any LIBO Rate Loan or the return to be earned by
such Lender on any LIBO Rate Loan,
(ii) impose a cost on such Lender or any Affiliate of such
Lender that is attributable to the making or maintaining of, or such Lender's
commitment to make or acquire, any LIBO Rate Loan,
(iii) require such Lender or any Affiliate of such Lender to
make any payment on or calculated by reference to any amount received by such
Lender in respect of its LIBO Rate Loans or its obligations to make LIBO Rate
Loans or
(iv) reduce, or have the effect of reducing, the rate of
return on any capital such Lender or any Affiliate of such Lender is required to
maintain on account of any LIBO Rate Loan or such Lender's commitment to make
any LIBO Rate Loan.
and (b) such reduction, increased cost or payment shall not be fully compensated
for by an adjustment in the applicable rates of interest payable under the Loan
Documents, then the Borrower shall pay to such Lender such additional amounts as
such Lender determines will fully compensate it for such reduction, increased
cost or payment. Such additional amounts shall be payable, in the case of those
applicable to prior periods, within 15 Business Days after request for such
payment by such Lender, accompanied by the certificate described in Section 2.5
and, in the case of those applicable to future periods, on the dates specified,
or determined in accordance with a method specified, by such Lender, provided
that the Borrower shall not be liable for any amount payable with respect to any
period more than 90 days before the date of such request or certificate, or, if
earlier the retroactive effective date of the Regulatory Change if such
Regulatory Change occurs during such 90-day period.
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2.3 Capital And Reserve Requirements. If, in the determination of any
Lender, such Lender or any Affiliate thereof is required, under applicable Law
(including Regulation D), or interpretations, directives, requests and
governmental or regulatory guidelines (whether or not having the force of law),
to maintain capital or deposit any reserve on account of any Loan, or any
commitment to make any Loan, or to participate in any Letter of Credit then,
upon request by such Lender, the Borrower shall pay to such Lender such
additional amounts as such Person determines will fully compensate it for any
actual reduction in the rate of return on the capital that such Lender or such
Affiliate thereof is so required to maintain. Such additional amounts shall be
payable, in the case of those applicable to prior periods, within 15 Business
Days after request by such Lender for such payment accompanied by the
certificate described in Section 2.5 (provided that the Borrower shall not be
liable for any amount payable with respect to any period more than 90 days
before the date of such request or certificate, or, if earlier, the retroactive
effective date of such determination if made during such 90-day period), and, in
the case of those relating to future periods, on the dates specified, or
determined in accordance with a method specified, by such Lender.
2.4 Breakage. The Borrower shall pay to each Lender, upon request, such
amount as such Lender reasonably determines is necessary to compensate it for
any actual loss, cost or expense incurred by it as a result of (a) any payment,
prepayment or conversion of a LIBO Rate Loan on a date other than the last day
of an Interest Period for such LIBO Rate Loan or (b) a LIBO Rate Loan for any
reason not being made or converted, or any payment of principal thereof or
interest thereon not being made, on the date determined therefor in accordance
with the applicable provisions of this Agreement. At the election of such
Lender, and without limiting the generality of the foregoing, but without
duplication, such compensation on account of losses may include an amount equal
to the excess of (i) the interest that would have been received from the
Borrower under this Agreement during the remainder of the applicable Interest
Period over (ii) the interest component of the return that such Lender
determines it could have obtained had it placed such amount on deposit in the
interbank Dollar market for a period equal to such remaining portion of the
Interest Period.
2.5 Determinations. In making the determinations contemplated by this
Article 2, each Lender shall make such estimates, assumptions, allocations and
the like that such Person in good faith determines to be appropriate, and such
Person's selection thereof in accordance with this Section 2.5, and the
determinations made by such Person on the basis thereof, shall be final, binding
and conclusive upon the Borrower, except, in the case of such determinations,
for manifest errors. Each Lender shall furnish to the Borrower, at the time of
any request for compensation under Section 2.2 or 2.3, a certificate outlining
in reasonable detail the computation of any amounts claimed by it under this
Article 2 and the assumptions underlying such computations, which shall include
a statement of an officer of such Person certifying that such request for
compensation is being made pursuant to a policy adopted by such Person to seek
such compensation generally from customers similar to the Borrower and having
similar provisions in agreements with such Person.
2.6 Replacement Of Lenders. If any Lender requests compensation
pursuant to Sections 1.13 (Taxes on Payments), 2.2 (Regulatory Changes) or 2.3
(Capital and Reserve Requirements), or such Lender's obligation to make or
continue Loans as LIBO Rate Loans shall be suspended pursuant to Section 2.1
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(Mandatory Suspension and Conversion of LIBO Rate Loans) or such Lender has
defaulted on its obligations to make or participate in Loans pursuant to Section
1.3 (Manner of Borrowing), Borrower, upon three (3) Business Days' notice, may
require that such Lender transfer all of its right, title and interest under
this Agreement, such Lender's Notes, if any, and the other Loan Documents to any
Eligible Institution identified by Borrower subject to
(a) the consent of the Administrative Agent (which consent
shall not be unreasonably withheld),
(b) satisfaction of the other conditions specified in Section
11.9 below (Successors and Assigns),
(c) the agreement of the proposed transferee to assume all of
the obligations of such Lender hereunder and under the other Loan Documents for
consideration equal to the outstanding principal amount of such Lender's Loans,
interest thereon to the date of such transfer, and all other amounts payable
hereunder to such Lender to the date of transfer,
(d) such transferor Lender shall have been paid on or prior to
the date of such transfer all fees and other amounts payable to such transferor
hereunder including those amounts payable under said Sections 1.13, 2.2 or 2.3,
as applicable (and including any fees accrued hereunder and any amounts that
would be payable under Section 2.4 (Breakage) as if all of such Lender's Loans
were being prepaid in full on such date) or arrangements satisfactory to the
transferor Lender shall have been made for such payments, and
(e) satisfaction of the condition that if the Lender being
replaced has requested compensation pursuant to Sections 1.13, 2.2 or 2.3, the
proposed transferee's aggregate requested compensation, if any, pursuant to
Sections 1.13, 2.2 or 2.3 with respect to such replaced Lender's Loans is lower
than that of the Lender replaced.
Without prejudice to the survival of any other agreement of the Borrower
hereunder, the agreements of the Borrower contained in Sections 1.13 (Taxes on
Payments), 2.2 (Regulatory Changes), 2.3 (Capital and Reserve Requirements), 2.4
(Breakage), 11.12 (Indemnification) and 11.12 (Expenses) (without duplication of
any payments made to such Lender by the Borrower or the proposed transferee)
shall survive for the benefit of any Lender replaced under this Section 2.6 with
respect to the time prior to such replacement.
2.7 Change Of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Sections 1.13 (Taxes on
Payments), 2.1 (Mandatory Suspension and Conversion of LIBO Rate Loans), 2.2
(Regulatory Changes) or 2.3 (Capital and Reserve Requirements) with respect to
such Lender, it will, if requested by the Borrower, use reasonable efforts
(subject to overall policy considerations of such Lender) to designate another
lending office for any Loans affected by such event, provided that such
designation is made on such terms that such Lender and its lending office suffer
no material economic, legal or regulatory disadvantage, with the object of
avoiding the consequence of the event giving rise to the operation of any such
Section. Nothing in this Section 2.7 shall affect or postpone any of the
obligations of the Borrower or the right of any Lender provided in Section 1.12
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(Taxes on Payments), 2.1 (Mandatory Suspension and Conversion of LIBO Rate
Loans), 2.2 (Regulatory Changes) or 2.3 (Capital and Reserve Requirements).
ARTICLE III
CONDITIONS TO EFFECTIVENESS OF AGREEMENT AND FUNDINGS
3.1 Conditions To Initial Loans. The effectiveness of this Agreement
(other than this Article 3) and the obligation of the Lenders to make Loans and
of the Issuer to issue Letters of Credit on the Closing Date are subject to the
satisfaction, immediately prior to or concurrently with the making of such Loan
or the issuance of such Letter of Credit, of the following conditions precedent
in each case to the satisfaction of the Administrative Agent, in addition to the
conditions precedent set forth in Section 3.2 hereof:
(a) Agreement; Note. The Administrative Agent shall have
received this Agreement and RC Notes, in the form of Exhibit A hereto, each duly
executed on behalf of Borrower.
(b) Subsidiary Guaranty. The Administrative Agent shall have
received Guaranties in the form of Exhibit G attached hereto duly executed on
behalf of each of the Guarantors (each such agreement, as it may be further
amended, modified or supplemented from time to time, a "Subsidiary Guaranty").
(c) Certain Security Documents Pertaining to Personal
Property. The Administrative Agent shall have received the following documents
(as amended, modified or supplemented from time to time, each a "Security
Document" and collectively the "Security Documents"), each of which shall be in
form and substance satisfactory to the Administrative Agent, (except for the
certificates representing the stock certificates and other instruments pledged
pursuant to such Security Documents and the stock powers delivered in connection
therewith):
(i) Executed copies of each of the following:
(A) An Amended and Restated Security
Agreement, duly executed on behalf of each Obligor, in substantially the form of
Exhibit E attached hereto (such agreement as it may be further amended, modified
or supplemented from time to time, the "Security Agreement").
(B) Amended and Restated Stock Pledge
Agreements, duly executed on behalf of each Obligor owning stock in a
non-excluded subsidiary of another Obligor, in substantially the form of Exhibit
F attached hereto (such agreements as they may be further amended, modified or
supplemented from time to time, the "Stock Pledge Agreements").
(ii) Certificates and instruments representing the
stock certificates and other instruments pledged pursuant to such Security
Documents, accompanied by duly executed instruments of transfer or assignment in
blank, and, to the extent required by the Security Documents, duly endorsed to
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the order of the Administrative Agent, in form and substance satisfactory to the
Administrative Agent.
(iii) Evidence of the completion of all recordings
and filings of or with respect to, and of all other actions with respect to, the
above Security Documents as may be necessary or, in the opinion of the
Administrative Agent, desirable to create or perfect the Liens created or
purported to be created by such Security Documents as valid, continuing and
perfected Liens in favor of the Administrative Agent securing the Obligations,
prior to all other Liens other than Permitted Liens; and evidence of the payment
of any necessary fee, tax or expense relating to such recording or filing.
Without limitation of the foregoing, the Administrative Agent shall receive:
(A) Proper financing statements duly
executed by the Obligors necessary or desirable by Administrative Agent to
create or perfect such Liens in favor of Mellon Bank, N.A. as Administrative
Agent and representative of the Lenders.
(iv) Evidence of the insurance required by the terms
of the above Security Documents, containing the endorsements required by such
Security Documents and this Agreement.
(v) Waivers of landlord's liens, warehouseman's liens
and like rights.
(vi) Evidence that all other actions necessary or, in
the opinion of the Administrative Agent, desirable to create, perfect or protect
the Liens created or purported to be created by the above Security Documents
have been taken.
(vii) A contemporaneous search of UCC, tax, judgment
and litigation dockets and records and other appropriate registers shall have
revealed no filings or recordings in effect with respect to the Collateral
purported to be covered by the above Security Documents, except such as are
acceptable to the Administrative Agent (it being understood that such acceptance
does not limit the obligations of the Obligors with respect to the priority of
the Liens in favor of the Lenders), and the Administrative Agent shall have
received a copy of the search reports received as a result of the search and of
the acknowledgment copies of the financing statements or other instruments
required to be filed or recorded pursuant to this subsection bearing evidence of
the recording of such statements or instruments at each of such filing or
recording places. (Pending completion of the corporate restructuring described
on Schedule 5.4, this condition may be satisfied after the Closing Date via the
delivery of post-closing searches of the surviving entities.)
(d) Capitalization, Etc. The corporate and capital structure
of each Obligor shall be reasonably satisfactory to the Administrative Agent.
(e) Corporate Proceedings. The Administrative Agent shall have
received certificates by the Secretary or Assistant Secretary of each Obligor
dated as of the Closing Date as to (i) true copies of the articles of
incorporation and by-laws (or other constituent documents) of each Obligor in
effect on such date (which, in the case of articles of incorporation or other
constituent documents filed or required to be filed with the Secretary of State
or other Governmental Authority in its jurisdiction of incorporation, shall be
-23-
certified to be true, correct and complete by such Secretary of State or other
Governmental Authority not more than 30 days before the Closing Date) or
certificates from a Responsible Officer of each Obligor stating that the
articles of incorporation and bylaws of each Obligor have not been amended or
modified since furnished to the Administrative Agent in connection with the
Existing Credit Agreement, (ii) true copies of all corporate action taken by
each Obligor relative to this Agreement and the other Loan Documents and (iii)
the incumbency and signature of the respective officer of each Obligor executing
this Agreement and the other Loan Documents, together with satisfactory evidence
of the incumbency of such Secretary or Assistant Secretary. The Administrative
Agent shall have received certificates from the appropriate Secretaries of State
or other applicable Governmental Authorities dated not more than 30 days before
the Closing Date showing the good standing of each Obligor in its state of
incorporation and each state in which each Obligor does business.
(f) Insurance. The Administrative Agent shall have received a
report from each Obligor's insurance broker, addressed to the Administrative
Agent, satisfactory in form and substance to the Administrative Agent, as to
insurance matters pertaining to each Obligor. The Administrative Agent shall
have received evidence satisfactory to it that the insurance policies required
by this Agreement and the other Loan Documents have been obtained, containing
the endorsements required hereby and thereby.
(g) Financial Statements. The Administrative Agent shall have
received copies of the financial statements and other information referred to in
Section 4.1 hereof.
(h) Legal Opinions of Counsel. The Administrative Agent shall
have received an opinion addressed to the Lenders, dated the Closing Date, of
Blank Rome ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel to the Obligors, in form and
substance satisfactory to the Administrative Agent and its counsel (which will
be substantially the same as the opinion issued in connection with the Existing
Credit Agreement, with appropriate additional provisions which address the
transactions described herein).
(i) Responsible Officer Certificates. The Administrative Agent
shall have received certificates from a Responsible Officer of each Obligor as
to such matters as the Administrative Agent may request.
(j) Fees, Expenses, etc. All fees, interest, expenses and
other amounts required to be paid to the Administrative Agent on behalf of the
Lenders under the Existing Credit Agreement, this Credit Agreement, or any other
written agreement on or prior to the Closing Date shall have been paid or
received.
(k) Interest Rate Hedging Agreement. [Intentionally omitted;
condition satisfied under Existing Credit Agreement.]
(l) Management Letters. The Administrative Agent shall have
received copies of the management letters issued by Borrower's certified public
accountants in connection with its audited financial statements dated December
31, 1998 or a letter from such accountants that no such management letters were
issued.
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(m) No Material Adverse Effect. The Responsible Officer of
each Obligor shall provide the Administrative Agent with a certificate stating
that since September 30, 1999 (the date of the Borrower's most recent financial
statements), there has not occurred, or been threatened, any event, act or
condition which could have a Material Adverse Effect.
(n) Keyman Life Insurance. The Administrative Agent shall have
received evidence that the Borrower has in place at least $2,000,000 in keyman
life insurance on the life of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
(o) Additional Matters. All corporate and other proceedings,
and all documents, instruments and other matters in connection with the
transactions contemplated by this Agreement and the other Loan Documents shall
be reasonably satisfactory in form and substance to the Administrative Agent.
3.2 Conditions To All Loans. The obligation of the Lenders to make any
Loan and of the Issuer to issue any Letter of Credit is subject to performance
by each Obligor of its obligations to be performed hereunder or under the other
Loan Documents on or before the date of such Loan or Letter of Credit,
satisfaction of the conditions precedent set forth herein and in the other Loan
Documents and to satisfaction of the following further conditions precedent:
(a) Notice. Appropriate notice of such Loan or request for a
Letter of Credit, as applicable shall have been given by the Borrower as
provided in Article 1 hereof.
(b) Representations and Warranties. Each of the
representations and warranties made by Borrower in Article 4 hereof shall be
true and correct in all material respects on and as of such date as if made on
and as of such date, both before and after giving effect to the Loans or the
issuance of the Letter of Credit requested to be made on such date.
(c) No Defaults. No Event of Default or Default shall have
occurred and be continuing on such date or after giving effect to the Loans
requested to be made on such date.
(d) No Violations of Law, etc. Neither the making nor use of
the Loans nor issuance of any Letter of Credit shall cause the Lenders to
violate or conflict with any Law.
(e) No Material Adverse Effect. There shall not have occurred,
or be threatened, any other event, act or condition which could have a Material
Adverse Effect since the date of the Borrower's most recent financial statements
delivered to the Administrative Agent.
Each request by Borrower for any Loan or for the issuance of a
Letter of Credit shall constitute a representation and warranty by Borrower that
the conditions set forth in this Section 3.2 have been satisfied as of the date
of such request. Failure of the Administrative Agent to receive notice from the
Borrower to the contrary before such Loan is made shall constitute a further
representation and warranty by the Borrower that the conditions referred to in
this Section 3.2 have been satisfied as of the date such Loan is made.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 Representations And Warranties. The Borrower hereby represents and
warrants to the Lenders as follows:
(a) Corporate Status. Each Obligor is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation. Each Obligor has corporate power and authority to
own its property and transact the business in which it is engaged or presently
proposes to engage. Each Obligor is duly qualified to do business as a foreign
corporation and is in good standing in all jurisdictions in which the ownership
of its properties or the nature of its activities or both makes such
qualification necessary or advisable. Schedule 4.1(a) hereof states as of the
date hereof the jurisdiction of incorporation of each Obligor and the
jurisdictions in which each Obligor is qualified to do business as a foreign
corporation.
(b) Corporate Power and Authorization. Each Obligor has
corporate power and authority to execute, deliver, perform, and take all actions
contemplated by each Loan Document to which it is a party, and all such action
has been duly and validly authorized by all necessary corporate proceedings on
its part. Without limitation of the foregoing, each Obligor has the corporate
power and authority to borrow pursuant to the Loan Documents to the fullest
extent permitted hereby and thereby from time to time, and has taken all
necessary corporate action to authorize such borrowings.
(c) Execution and Binding Effect. This Agreement and each
other Loan Document to which any Obligor is a party and which is required to be
delivered on or before the Closing Date pursuant to Section 3.1 hereof has been
duly and validly executed and delivered by such Obligor. This Agreement, and
each other Loan Document constitute, the legal, valid and binding obligation of
each Obligor, enforceable against Borrower in accordance with its terms, except
as the enforceability thereof may be limited by bankruptcy, insolvency or other
similar laws of general application affecting the enforcement of creditors'
rights or by general principles of equity limiting the availability of equitable
remedies.
(d) Governmental Approvals and Filings. No approval, order,
consent, authorization, certificate, license, permit or validation of, or
exemption or other action by, or filing, recording or registration with, or
notice to, any Governmental Authority (collectively, "Governmental Action") is
or will be necessary or advisable in connection with the execution and delivery
of any Loan Document, consummation of the transactions herein or therein
contemplated, performance of or compliance with the terms and conditions hereof
or thereof or to ensure the legality, validity, binding effect, enforceability
or admissibility in evidence hereof or thereof, provided that Borrower may be
required to file the Loan Documents with the Securities and Exchange Commission.
(e) Absence of Conflicts. Neither the execution and delivery
of any Loan Document, nor consummation of the transactions herein or therein
contemplated, nor performance of or compliance with the terms and conditions
hereof or thereof does or will
(i) violate or conflict with any Law, or
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(ii) violate, conflict with or result in a breach of
any term or condition of, or constitute a default under, or result in (or give
rise to any right, contingent or otherwise, of any Person to cause) any
termination, cancellation, prepayment or acceleration of performance of, or
result in the creation or imposition of (or give rise to any obligation,
contingent or otherwise, to create or impose) any Lien upon any property of any
Obligor (except for any Lien in favor of the Lender securing the Obligations)
pursuant to, or otherwise result in (or give rise to any right, contingent or
otherwise, of any Person to cause) any change in any right, power, privilege,
duty or obligation of the Borrower under or in connection with,
(A) the articles of incorporation or by-laws
(or other constituent documents) of any Obligor,
(B) any agreement or instrument creating,
evidencing or securing any Indebtedness to which any Obligor is a party or by
which any of them or any of their respective properties (now owned or hereafter
acquired) may be subject or bound, or
(C) any other material agreement or
instrument to which any Obligor is a party or any of its properties (now owned
or hereafter acquired) may be subject or bound.
(f) Audited Financial Statements. The Borrower has heretofore
furnished to the Administrative Agent financial statements for Borrower and its
Subsidiaries as of December 31, 1998 and the related statements of income, cash
flows and changes in stockholders' equity for the fiscal year then ended, as
examined and reported on by PriceWaterhouseCoopers, who delivered an unqualified
opinion in respect thereof. The financial statements present fairly the
financial condition of the Borrower and its Subsidiaries, as of the end of such
fiscal year, and the results of its operations and its cash flows for the fiscal
year then ended, all in conformity with GAAP.
(g) Interim Financial Statements. The Borrower has heretofore
furnished to the Administrative Agent interim company prepared financial
statements for the Borrower and its Subsidiaries, dated September 30, 1999 for
the fiscal quarter then ending. Such financial statements present fairly the
financial condition of the Borrower and its Subsidiaries, as of the end of such
fiscal quarter and the results of its operations and its cash flows for such
fiscal quarter, all in conformity with GAAP, subject to normal and recurring
year-end audit adjustments.
(h) Absence of Undisclosed Liabilities. No Obligor has any
liability or obligation of any nature whatever (whether absolute, accrued,
contingent or otherwise, whether or not due), forward or long-term commitments
or unrealized or anticipated losses from unfavorable commitments, except (w) as
disclosed in the financial statements referred to in Sections 4.1(f) and (g)
hereof, (x) matters that, individually or in the aggregate, could not have a
Material Adverse Effect, (y) as disclosed in Schedule 4.1(h) hereof, and (z)
liabilities, obligations, commitments and losses incurred after December 31,
1998 in the ordinary course of business and consistent with past practices.
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(i) Absence of Material Adverse Changes. Since September 30,
1999, there has been no change in the business, operations, or condition
(financial or otherwise) of any Obligor that could reasonably be expected to
have a Material Adverse Effect.
(j) Accurate and Complete Disclosure. All information (taken
as a whole) heretofore, contemporaneously or hereafter provided (orally or in
writing) by any Obligor to the Administrative Agent pursuant to or in connection
with any Loan Document or any transaction contemplated hereby or thereby is or
will be (as the case may be) true and accurate in all material respects on the
date as of which such information is dated (or, if not dated, when received by
the Administrative Agent as the case may be) and does not or will not (as the
case may be) omit to state any material fact necessary to make such information
(taken as a whole) not misleading at such time in light of the circumstances in
which it was provided. The Obligor has disclosed to the Administrative Agent in
writing every fact or circumstance which has, or which could have, a Material
Adverse Effect.
(k) Solvency. On and as of the Closing Date, and after giving
effect to all Loans and other obligations and liabilities being incurred on such
date in connection therewith, and on the date of each subsequent Loan or other
extension of credit hereunder and after giving effect to application of the
proceeds thereof in accordance with the terms of the Loan Documents, the
Obligors on a consolidated basis are and will be Solvent.
(l) Margin Regulations. No part of the proceeds of any Loan
hereunder will be used for the purpose of buying or carrying any "margin stock,"
as such term is used in Regulation U of the Board of Governors of the Federal
Reserve System, as amended from time to time, or to extend credit to others for
the purpose of buying or carrying any "margin stock". No Obligor is engaged in
the business of extending credit to others for the purpose of buying or carrying
"margin stock". No Obligor owns any "margin stock". Neither the making of any
Loan nor any use of proceeds of any such Loan will violate or conflict with the
provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System, as amended from time to time.
(m) Partnerships, Etc. Except as set forth on Schedule 4.1(m),
no Obligor is a partner (general or limited) of any partnership, is a party to
any joint venture, or owns (beneficially or of record) any equity or similar
interest in any such Person (including but not limited to any interest pursuant
to which such Obligor has or may in any circumstance have an obligation to make
capital contributions to, or be generally liable for or on account of the
liabilities, acts or omissions of such other Person).
(n) Ownership and Control. Schedule 4.1(n) hereof states as of
the date hereof the authorized capitalization of each Obligor, the number of
shares of each class of capital stock issued and outstanding of each Obligor and
the number and percentage of outstanding shares of each such class of capital
stock and the names of the record owners of such shares and the direct or
indirect beneficial owners of such shares (except that for Borrower the listing
shall include only the names of any parties beneficially owning, individually or
through affiliates, more than 5% of Borrower's stock). The outstanding shares of
capital stock of each Obligor have been duly authorized and validly issued and
are fully paid and nonassessable. Except as described in Schedule 4.1(n), there
are no options, warrants, calls, subscriptions, conversion rights, exchange
rights, preemptive rights or other rights, agreements or arrangements
(contingent or otherwise) which may in any circumstances now or hereafter
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obligate Borrower to issue any shares of its capital stock or any other
securities.
(o) Litigation. To the best of Borrower's knowledge, there is
no pending or (to Borrower's knowledge after due inquiry) threatened action,
suit, proceeding or investigation by or before any Governmental Authority
against any Obligor which would cause a Material Adverse Effect.
(p) Absence of Events of Default. No event has occurred and is
continuing and no condition exists which constitutes an Event of Default or
Default.
(q) Absence of Other Conflicts. No Obligor is in violation of
or conflict with, or is subject to any contingent liability on account of any
violation of or conflict with:
(i) any Law to the best of Borrower's knowledge,
after due inquiry,
(ii) its articles of incorporation or by-laws (or
other constituent documents), or
(iii) any material agreement or instrument or
arrangement to which it is party or by which it or any of its properties (now
owned or hereafter acquired) may be subject or bound.
(r) Insurance. Each Obligor maintains with financially sound
and reputable insurers insurance with respect to its properties and business and
against at least such liabilities, casualties and contingencies and in at least
such types and amounts as is customary in the case of corporations engaged in
the same or a similar business or having similar properties similarly situated.
Schedule 4.1(r) hereof sets forth a list of all insurances currently maintained
by each Obligor, setting forth the identity of the insurance carrier, the type
of coverage, the amount of coverage and the deductible. There are no claims,
actions, suits, or proceedings against, arising under or based upon any of such
insurance policies except as set forth in such Schedule 4.1(r).
(s) Title to Property. Each Obligor has good and marketable
title in fee simple to all real property owned or purported to be owned by it
and good title to all other property of whatever nature owned or purported to be
owned by it, including but not limited to all property reflected in the most
recent audited balance sheet referred to in Section 4.1(f) hereof or submitted
pursuant to Section 5.1(a) hereof, as the case may be (except as sold or
otherwise disposed of in the ordinary course of business after the date of such
balance sheet), in each case free and clear of all Liens, other than Permitted
Liens.
(t) Intellectual Property. Each Obligor owns, or is licensed
or otherwise has the right to use, all the patents, trademarks, service marks,
names (trade, service, fictitious or otherwise), copyrights, technology
(including but not limited to computer programs and software), processes, data
bases and other rights, free from burdensome restrictions, necessary to own and
operate its properties and to carry on its business as presently conducted and
presently planned to be conducted without conflict with the rights of others.
Except as described in Schedule 4.1(t), no Obligor owns any patents, trademarks
or copyrights.
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(u) Taxes. All tax and information returns required to be
filed by or on behalf of any Obligor have been properly prepared, executed and
filed. All taxes, assessments, fees and other governmental charges upon any
Obligor or upon any of its properties, incomes, sales or franchises which are
due and payable have been paid other than those not yet delinquent and payable
without premium or penalty, and except for those being diligently contested in
good faith by appropriate proceedings, and in each case adequate reserves and
provisions for taxes have been made on the books of each Obligor. The reserves
and provisions for taxes on the books of any Obligor are adequate for all open
years and for its current fiscal period. No Obligor has knowledge of any
proposed additional assessment or basis for any material assessment for
additional taxes (whether or not reserved against).
(v) Employee Benefits. Except as set forth on Schedule 4.1(v),
no Obligor has a Plan or Plans.
(w) Environmental Matters.
(i) Each Obligor, and each of its respective
Environmental Affiliates, is and has been in full compliance with all applicable
Environmental Laws, except for (x) matters set forth in Schedule 4.1(w) hereof
and (y) matters which, individually or in the aggregate, could not have a
Material Adverse Effect. There are to each Obligor's knowledge after due inquiry
no circumstances that may prevent or interfere with such full compliance in the
future.
(ii) Each Obligor and its respective Environmental
Affiliates has all Environmental Approvals necessary or desirable for the
ownership and operation of their respective properties, facilities and
businesses as presently owned and operated and as presently proposed to be owned
and operated, except for (x) matters set forth in Schedule 4.1(x) hereof and (y)
matters which, individually or in the aggregate, could not have a Material
Adverse Effect.
(iii) There is no Environmental Claim pending or, to
the knowledge of any Obligor after due inquiry, threatened, and there are no
past or present acts, omissions, events or circumstances that could form the
basis of any Environmental Claim, against any Obligor or any of its respective
Environmental Affiliates, except for (x) matters set forth in Schedule 4.1(w)
hereof, and (y) matters which, if adversely decided, individually or in the
aggregate, could not have a Material Adverse Effect.
(iv) No facility or property now or previously owned,
operated or leased by any Obligor or any of its respective Environmental
Affiliates is an Environmental Cleanup Site. No Obligor or any Environmental
Affiliate has directly transported or directly arranged for the transportation
of any Environmental Concern Materials to any Environmental Cleanup Site. No
Lien exists, and to Borrower's knowledge no condition exists which could result
in the filing of a Lien, against any property of any Obligor or any of its
respective Environmental Affiliates under any Environmental Law.
(x) Business Interruptions. Within two (2) years prior to the
Closing Date, none of the business, property or operations of any Obligor has
been materially and adversely affected in any way by any casualty, strike,
lockout, combination of workers, order of the United States of America, or any
state or local government, or any political subdivision or agency thereof,
directed against such Obligor. To the best of Borrower's knowledge,
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there are no pending or threatened labor disputes, strikes, lockouts or similar
occurrences or grievances against the business being operated by any Obligor.
(y) Names. In the five (5) years prior to the Closing Date, no
Obligor has conducted business under or used any names (whether corporate or
assumed) except for its present corporate name and those names listed in
Schedule 4.1(y) attached hereto and made a part hereof. Each Obligor is the sole
owner of its name and any and all business done and all invoices using such name
or any names listed in Schedule 4.1(y) represent sales and business of such
Obligor and are owned solely by such Obligor.
(z) Regulation O. No director, executive officer or principal
shareholder of any Obligor is a director, executive officer or principal
shareholder of any Lender. For the purposes hereof the terms "director" (when
used with reference to any Lender), "executive officer" and "principal
shareholder" have the respective meanings assigned thereto in Regulation O
issued by the Board of Governors of the Federal Reserve System.
(aa) Year 2000 Compliance. As described more fully in
Borrower's Form 10-K for 1998, Obligors have (a) reviewed the areas within their
business and operations which could be adversely affected by a computer failure
to recognize the change in the century at the year 2000 ("Year 2000 Problem")
and (b) developed and are implementing plans, which to the best of their
knowledge (based on testing to date) will be effective, to avoid any adverse
impact as a consequence of a Year 2000 Problem.
4.2 Representations And Warranties Absolute. The representations and
warranties of the Borrower set forth in this Article 4 are unaffected by any
prior or subsequent investigation by, or knowledge of, the Administrative Agent
or any Lender.
ARTICLE V
AFFIRMATIVE COVENANTS
So long as any Loan shall remain unpaid, any Letter of Credit
is outstanding or any Lender shall have any Commitment under this Agreement,
Borrower shall comply, and shall cause each other Obligor to comply, with the
following covenants:
5.1 Basic Reporting Requirements.
(a) Annual Audit Reports. As soon as practicable, and in any
event within 90 days after the close of each fiscal year of the Borrower, the
Borrower shall furnish to the Administrative Agent and each of the Lenders
consolidated statements of income, cash flows and changes in stockholders'
equity of the Borrower and its Subsidiaries for such fiscal year and a
consolidated balance sheet of the Borrower and its Subsidiaries as of the close
of such fiscal year, and notes to each, all in reasonable detail, setting forth
in comparative form the corresponding figures for the preceding fiscal year,
together with all management letters issued, or letters stating that no
management letters are being issued, in connection therewith. Such financial
statements shall be accompanied by an opinion of independent certified public
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accountants of recognized national standing selected by the Borrower and
reasonably satisfactory to the Administrative Agent. A copy of the opinion of
such accountants shall be delivered to the Administrative Agent and each of the
Lenders and signed by such accountants. Such opinion shall be free of exceptions
or qualifications not acceptable to the Administrative Agent in its reasonable
discretion and in any event shall be free of any exception or qualification
which is of "going concern" or like nature or which relates to a limited scope
of examination. Such opinion in any event shall contain a written statement of
such accountants substantially to the effect that (i) such accountants examined
such financial statements in accordance with generally accepted auditing
standards and accordingly made such tests of accounting records and such other
auditing procedures as such accountants considered necessary under the
circumstances and (ii) in the opinion of such accountants such financial
statements present fairly the financial position of the Borrower and its
Subsidiaries as of the end of such fiscal year and the results of their
operations and their cash flows and changes in stockholders' equity for such
fiscal year, in conformity with GAAP.
(b) Quarterly Financial Statements. As soon as practicable but
in any event within 45 days after the end of each quarter, the Borrower shall
furnish to the Administrative Agent and each of the Lenders financial statements
in the form filed with Borrower's Form 10-Q filing with the Securities and
Exchange Commission.
(c) Quarterly Compliance Certificates. The Borrower shall
deliver to the Administrative Agent and each of the Lenders a Quarterly
Compliance Certificate in substantially the form set forth as Exhibit I hereto,
duly completed and signed by the Chief Financial Officer of Borrower
concurrently with the delivery of the financial statements referred to in
subsections (a) and (b). The Quarterly Compliance Certificate shall confirm that
the unamortized remaining invested balance of all acquired delinquent pools of
Accounts does not exceed $25,000,000, in the aggregate among all Obligors, at
any point in time. From time to time the Borrower may seek the prior written
consent of the Majority Lenders (in their sole discretion) so that the
unamortized remaining invested balance of all acquired delinquent pools of
accounts may exceed $25,000,000.
(d) Annual Budget. As soon as practicable, and in any event
within 45 days after the start of each fiscal year, the Borrower shall deliver
to the Administrative Agent a consolidated annual budget, which shall include
the annual projections of profit and loss statements, balance sheets and cash
flow reports (prepared on an annual basis) for the succeeding fiscal year,
together with a statement of the assumptions and estimates upon which such
projections are based in form and substance consistent with past practice. The
projections shall be accompanied by a cover letter stating that such
projections, estimates and assumptions, as of the date of preparation thereof,
are reasonable, made in good faith, consistent with the Loan Documents, and
represent the Borrower's best judgment as to such matters.
(e) Commercial Finance Reports. Within 30 days of a request by
the Administrative Agent, the Borrower shall furnish to the Administrative Agent
a report of a Responsible Officer of the Borrower setting forth information as
to (i) receivables, and (ii) payables (which may include, among other things, a
breakout of aging and payments).
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(f) Certain Other Reports and Information. Promptly upon their
becoming available to the Borrower, the Borrower shall deliver to the
Administrative Agent a copy of (i) all regular or special reports, registration
statements and amendments to the foregoing which the Borrower shall file with
the Securities and Exchange Commission (or any successor thereto) or any
securities exchange, (ii) all reports, proxy statements, financial statements
and other information distributed by the Borrower to its stockholders,
bondholders or the financial community generally, and (iii) all accountants'
management letters pertaining to, all other reports submitted by accountants in
connection with any audit of, and all other material reports from outside
accountants with respect to, the Borrower.
(g) Further Information. The Borrower will promptly furnish to
the Administrative Agent or any Lender such other information and in such form
as the Administrative Agent or any Lender may reasonably request from time to
time.
(h) Notice of Certain Events. Promptly upon becoming aware of
any of the following, the Borrower shall give the Administrative Agent notice
thereof, together with a written statement of a Responsible Officer of the
Borrower setting forth the details thereof and any action with respect thereto
taken or proposed to be taken by the Borrower:
(i) Any Event of Default or Default.
(ii) Any material adverse change in the business,
operations or condition (financial or otherwise) of any Obligor.
(iii) Any pending or threatened action, suit,
proceeding or investigation by or before any Governmental Authority against or
affecting any Obligor, except for matters that if adversely decided,
individually or in the aggregate, could not have a Material Adverse Effect.
(iv) Any material violation, breach or default by any
Obligor under any agreement or instrument which could have a Material Adverse
Effect.
(v) Any material amendment or supplement to, or
extension, renewal, refinancing, or refunding of, or waiver by any other party
thereto of any right under or conditions of, any agreement or instrument
creating, evidencing or securing any Indebtedness of any Obligor; any agreement
or instrument material to the business, operations or condition (financial or
otherwise) of any Obligor, and any negotiations pertaining to any of the
foregoing.
(vi) Any Pension-Related Event. Such notice shall be
accompanied by: (A) a copy of any notice, request, return, petition or other
document received by any Obligor or any Controlled Group Member from any Person,
or which has been or is to be filed with or provided to any Person (including
without limitation the Internal Revenue Service, PBGC or any Plan participant,
beneficiary, alternate payee or employer representative), in connection with
such Pension-Related Event, and (B) in the case of any Pension-Related Event
with respect to a Plan, the most recent Annual Report (5500 Series), with
attachments thereto, and the most recent actuarial valuation report, for such
Plan, if not previously provided.
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(vii) Any Environmental Claim pending or threatened
against any Obligor, or any past or present acts, omissions, events or
circumstances (including but not limited to any dumping, leaching, deposition,
removal, abandonment, escape, emission, discharge or release of any
Environmental Concern Material at, on or under any facility or property now or
previously owned, operated or leased by any Obligor that could form the basis of
such Environmental Claim, which Environmental Claim, if adversely resolved,
individually or in the aggregate, could have a Material Adverse Effect.
(i) Visitation; Verification. Borrower shall permit such
Persons as the Administrative Agent or any Lender may designate from time to
time to visit and inspect any of the properties of any Obligor, to examine its
books and records and take copies and extracts therefrom and to discuss its
affairs with its directors, officers, employees and independent accountants at
such times and as often as the Administrative Agent may reasonably request.
Borrower hereby authorizes such officers, employees and independent accountants
to discuss with the Administrative Agent the affairs of such Obligors. The
Administrative Agent shall have the right to examine accounts, inventory and
other properties and liabilities of each Obligor from time to time, and Borrower
shall cooperate with the Administrative Agent in such examination.
5.2 Insurance. Each Obligor shall maintain insurance covering the
properties (including tangible Collateral) and business against fire, flood,
casualty and such other hazards and risks (including the risk of business
interruption from a casualty event) as may be reasonably acceptable to the
Administrative Agent in such amounts, with such deductibles and with such
insurers as may be reasonably acceptable to the Administrative Agent. In
addition:
(a) Administrative Agent as Loss Payee and Additional Insured.
All casualty insurance policies covering tangible Collateral shall contain
standard Loss Payable Clauses issued in favor of the Administrative Agent for
the benefit of the Lenders under which all losses thereunder shall be paid to
the Administrative Agent for the Lenders as their interests may appear. All
other insurance policies shall name the Administrative Agent as an additional
insured on behalf of the Lenders as their interests may appear. Such policies
shall expressly provide that the requisite insurance cannot be altered or
canceled without thirty (30) days prior written notice to the Administrative
Agent and shall insure the Lenders notwithstanding the act or neglect of the
insured.
(b) Administrative Agent's Right to Purchase Insurance. In the
event any Obligor fails to procure or cause to be procured any such insurance or
to timely pay or cause to be paid the premium(s) on any such insurance, the
Administrative Agent may do so for such Obligor but such Obligor shall continue
to be liable for the cost of such insurance.
(c) Disposition of Insurance Proceeds. Each Obligor, for
itself and each Obligor, hereby appoints the Administrative Agent as its
attorney-in-fact, exercisable at the Administrative Agent's option, to endorse
any check which may be payable to any Obligor in order to collect the proceeds
of such insurance. In the absence of a Default or Event of Default, the
Administrative Agent shall turn over to the Borrower all insurance proceeds the
Administrative Agent receives. The Borrower may use the proceeds for the repair,
reconstruction or replacement of Collateral, toward the replacement of lost
revenues, for working capital, or for any other proper business purpose;
provided that any proceeds that remain unused (i) more than 12 months after the
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Borrower receives them or (ii) at the time a Default or Event of Default occurs
shall be applied immediately as the Majority Lenders may in their discretion
direct, including against the Obligations and as a permanent reduction of the RC
Commitment.
(d) Evidence of Insurance. Each Obligor shall furnish to the
Administrative Agent from time to time upon request the policies under which the
required insurance is issued, certificates of insurance, loss payable
endorsements, and such other information relating to such insurance as the
Administrative Agent may request, and provide such other insurance and
endorsements as are required by this Agreement and the other Loan Documents.
5.3 Payment Of Taxes And Other Potential Charges And Priority Claims.
Each Obligor shall pay or discharge
(a) on or prior to the date on which penalties attach thereto,
all taxes, assessments and other governmental charges imposed upon it or any of
its properties;
(b) on or prior to the date when due, all lawful claims of
materialmen, mechanics, carriers, warehousemen, landlords and other like Persons
which, if unpaid, might result in the creation of a Lien upon any such property;
and
(c) on or prior to the date when due, all other lawful claims
which, if unpaid, might result in the creation of a Lien upon any such property
or which, if unpaid, might give rise to a claim entitled to priority over
general creditors of such Obligor in a case under Title 11 (Bankruptcy) of the
United States Code, as amended;
provided, that unless and until foreclosure, distraint, levy, sale or similar
proceedings shall have been commenced such Obligor need not pay or discharge any
such tax, assessment, charge or claim so long as (x) the validity thereof is
contested in good faith and by appropriate proceedings diligently conducted, and
(y) such reserves or other appropriate provisions as may be required by GAAP
shall have been made therefor.
5.4 Preservation Of Corporate Status. Except as contemplated by the
corporate restructuring described in Schedule 5.4, each Obligor shall maintain
its status as a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and to be duly
qualified to do business as a foreign corporation and in good standing in all
jurisdictions in which the ownership of its properties or the nature of its
business or both make such qualification necessary.
5.5 Governmental Approvals And Filings. Each Obligor shall keep and
maintain in full force and effect all Governmental Actions necessary or
advisable in connection with execution and delivery of any Loan Document,
consummation of the transactions herein or therein contemplated, performance of
or compliance with the terms and conditions hereof or thereof or to ensure the
legality, validity, binding effect, enforceability or admissibility in evidence
hereof or thereof.
5.6 Maintenance Of Properties. Each Obligor shall maintain or cause to
be maintained in good repair, working order and condition the properties now or
hereafter owned, leased or otherwise possessed by it and shall make or cause to
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be made all needful and proper repairs, renewals, replacements and improvements
thereto so that the business carried on in connection therewith may be properly
and advantageously conducted at all times.
5.7 Avoidance Of Other Conflicts. No Obligor shall violate or conflict
with, be in violation of or conflict with, or be or remain subject to any
liability (contingent or otherwise) on account of any violation or conflict with
(a) any Law in a manner which could cause a Material Adverse
Effect,
(b) its articles of incorporation or by-laws (or other
constituent documents), or
(c) any material agreement or instrument to which it is a
party or by which any of them or any of their respective properties (now owned
or hereafter acquired) may be subject or bound.
5.8 Financial Accounting Practices. Each Obligor shall make and keep
books, records and accounts which, in reasonable detail, accurately and fairly
reflect its transactions and dispositions of its assets and maintain a system of
internal accounting controls sufficient to provide reasonable assurances that
(a) transactions are executed in accordance with management's general or
specific authorization, (b) transactions are recorded as necessary (i) to permit
preparation of financial statements in conformity with GAAP and (ii) to maintain
accountability for assets, (c) access to assets is permitted only in accordance
with management's general or specific authorization and (d) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
5.9 Use Of Proceeds. Subject to the terms and conditions of this
Agreement, the Borrower shall apply the proceeds of all Loans hereunder only for
working capital and acquisition financing. The Borrower shall not use the
proceeds of any Loans hereunder directly or indirectly for any unlawful purpose
or inconsistent with any other provision of any Loan Document.
5.10 Continuation Of Or Change In Business. Each Obligor shall continue
to engage in its business substantially as conducted and operated during the
present and preceding fiscal year, and no Obligor shall engage in any other
business not substantially similar to the business as presently conducted.
5.11 Consolidated Tax Return. No Obligor shall file or consent to the
filing of any consolidated income tax return with any Person other than another
Obligor, except as required by the Code.
5.12 Fiscal Year. No Obligor shall change its fiscal year or fiscal
quarter.
5.13 Bank Accounts. As additional consideration for the establishment
of the credit facilities hereunder, each Obligor shall maintain its primary
depository and disbursement accounts with the Administrative Agent. If the
Administrative Agent fails to service the Obligors' depository and disbursement
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accounts in a commercially-reasonable manner, Obligors may move the accounts to
another financial institution of their choice.
5.14 Submission Of Collateral Documents. Each Obligor shall promptly,
but in no event later than twenty (20) days following the conversion of an
Account to an instrument or chattel paper, notify the Administrative Agent if an
Account becomes evidenced or secured by an instrument or chattel paper and, upon
request of the Administrative Agent, promptly deliver any such instrument or
chattel paper to the Lender.
5.15 Collection Of Accounts. Each Obligor shall continue to collect its
Accounts in the ordinary course of its business.
5.16 Subsidiaries As Guarantors.
(a) Each Obligor shall cause all of its Subsidiaries, now
existing or hereafter formed or acquired, other than (i) foreign Subsidiaries
listed on Schedule 5.16 or hereafter formed or acquired if doing so would cause
an adverse tax consequence under Section 956 of the Internal Revenue Code as
amended ("IRC") or under any similar law, and (ii) other Excluded Subsidiaries,
to be or become Guarantors hereunder by Subsidiary Guaranties. All capital stock
or other equity interests in each new Guarantor and all of its property meeting
the definition of "Collateral" shall be pledged to the Lenders under the
Security Documents, which pledge may be accomplished via new Security Documents
executed by the new Guarantor or by a Joinder Agreement in the form of Exhibit M
attached hereto.
(b) Notwithstanding the exclusion of certain foreign
Subsidiaries as Obligors, Borrower shall cause each such foreign Subsidiary to
comply with the terms and conditions of this Agreement and the appropriate
Obligor shall grant to the Administrative Agent (on behalf of the Lenders) a
first priority security interest in and lien on 65% of the capital stock or
other equity interests in each such foreign Subsidiary so long as such pledge
shall not trigger adverse tax consequences under Section 956 of the IRC or
similar law.
5.17 Update Of Schedules. Each Obligor shall promptly, but in no event
later than thirty (30) days, following a Permitted Acquisition or other event
which would result in a material change to any of the information on the
disclosure schedules hereto, provide the Administrative Agent with revised
schedule(s). The revised schedules must be acceptable in all respects to the
Administrative Agent; they will not be acceptable if they disclose actual or
potential Events of Default.
5.18 Compliance With Laws. Each Obligor shall comply with all Laws
governing such Obligor in the operation of its business, including Environmental
Laws and any Laws relating to employment practices and pension benefits and
occupational and health standards and controls, but excluding any Laws whose
violation would not cause a Material Adverse Effect.
5.19 Keyman Life Insurance. Borrower will at all times maintain at
least $2,000,000 in keyman life insurance on the life of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
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ARTICLE VI
NEGATIVE COVENANTS
So long as any Obligations shall remain unpaid or any Lender shall have
any Commitment under this Agreement, Borrower shall comply, and shall cause each
other Obligor to comply, with the following covenants.
6.1 Financial Covenants.
(a) Consolidated Fixed Charge Coverage Ratio. The Consolidated
Fixed Charge Coverage Ratio shall not at any time be less than
1.15 to 1.00 for any quarter during the period from October 1, 1999 through
December 31, 2000; or
1.35 to 1.00 for any quarter thereafter.
(b) Consolidated Net Worth. As of the last day of each fiscal
quarter Consolidated Net Worth shall not be less than (i) $193,397,400 plus (ii)
50% of Consolidated Net Income for that quarter and, on a cumulative basis
without deductions for net losses, all other quarters ending after March 31,
1999 plus (iii) the net proceeds of any offering of equity after March 31, 1999
that are not applied to the reduction of the RC Commitment plus (iv) 90% of the
book value of any equity issued after March 31, 1999 in consideration for any
acquisition.
(c) Consolidated Funded Debt to Consolidated EBITDA. The ratio
of Consolidated Funded Debt to annualized Consolidated EBITDA shall not be more
than
4.5 to 1.00 for the quarter ending on December 31, 1999;
4.0 to 1.00 for any quarter ending during the period from January 1, 2000
through December 31, 2000;
3.5 to 1.00 for any quarter ending during the period from January 1, 2001
through December 31, 2001; or
3.25 to 1.00 for any quarter ending during the period ending after January 1,
2002.
Consolidated EBITDA shall be annualized by multiplying Consolidated EBITDA for
the fiscal quarter being tested, adjusted for any acquisition completed during
the quarter, by four. For purposes of calculating pro forma compliance with this
provision in analyzing a proposed acquisition, Consolidated EBITDA shall include
the pre-acquisition EBITDA of the target for the most recently completed quarter
annualized after adjustment for unusual expense items.
(d) Consolidated Interest Coverage Ratio. The Consolidated
Interest Coverage Ratio shall not be less than 2.25 to 1.00 for any quarter.
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(e) Consolidated Senior Debt to Consolidated EBITDA. The ratio
of Consolidated Senior Debt to annualized Consolidated EBITDA shall not be more
than
3.75 to 1.00 for the quarter ending on December 31, 1999;
3.0 to 1.00 for any quarter ending during the period from January 1, 2000
through December 31, 2000;
2.5 to 1.00 for any quarter ending during the period from January 1, 2001
through December 31, 2001; or
2.25 to 1.00 for any quarter ending during the period ending after January 1,
2002.
Consolidated EBITDA shall be annualized by multiplying Consolidated EBITDA for
the fiscal quarter being tested, adjusted for any acquisition completed during
the quarter, by four. For purposes of calculating pro forma compliance with this
provision in analyzing a proposed acquisition, Consolidated EBITDA shall include
the pre-acquisition EBITDA of the target for the most recently completed quarter
annualized after adjustment for unusual expense items.
6.2 Liens. No Obligor shall at any time create, incur, assume or suffer
to exist any Lien on any of its property (now owned or hereafter acquired), or
agree, become or remain liable (contingently or otherwise) to do any of the
foregoing, except for the following ("Permitted Liens"):
(a) Liens pursuant to the Security Documents in favor of the
Administrative Agent (on behalf of the Lenders) to secure the Obligations;
(b) Liens existing on the date hereof securing obligations
existing on the date hereof, as such Liens and obligations are listed in
Schedule 6.2 hereto or Liens relating to Purchase Money Indebtedness for Capital
Expenditures permitted by Section 6.14;
(c) Liens arising from taxes, assessments, charges or claims
described in Section 5.3 hereof that are not yet due or that remain payable
without penalty or to the extent permitted to remain unpaid under the proviso to
such Section 5.3 , provided that the aggregate amount secured by all Liens
described in this Section 6.2(c) shall not at any time exceed $300,000;
"Permitted Lien" shall in no event include any Lien imposed by, or required to
be granted pursuant to, ERISA or any Environmental Law. Nothing in this Section
6.2 shall be construed to limit any other restriction on Liens imposed by the
Security Documents or otherwise in the Loan Documents.
6.3 Indebtedness. No Obligor shall at any time create, incur, assume or
suffer to exist any Indebtedness, or agree, become or remain liable
(contingently or otherwise) to do any of the foregoing, except:
(a) Indebtedness to the Lenders pursuant to this Agreement and
the other Loan Documents;
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(b) Indebtedness of such Obligor existing on the date hereof
and listed in Schedule 6.3 hereof (but not any extensions, renewals or
refinancings thereof);
(c) Purchase Money Indebtedness which is permitted as a
Capital Expenditure;
(d) Accounts payable to trade creditors arising out of
purchases of goods or services in the ordinary course of business;
(e) Indebtedness, not to exceed $10,000,000 in the aggregate
over the term of this Agreement among all Obligors under Capitalized Leases
which are permitted as Capital Expenditures;
(f) Permitted Acquisition Indebtedness;
(g) Inter-Obligor Indebtedness permitted under Section 6.5(e);
and
(h) Indebtedness under Interest Rate Hedging Agreements.
(i) Indebtedness of NCO Group, not to exceed $150,000,000,
under unsecured, convertible, subordinated notes issued on terms acceptable to
the Administrative Agent and the Majority Lenders in their sole discretion.
Acceptable terms of subordination shall include a prohibition on principal
payments while any Obligations to the Lenders are outstanding; provision for the
payment of regularly scheduled interest on the notes until an Event of Default;
and a 180 day "standstill" period following a default under the notes during
which the noteholders shall be prohibited from exercising their remedies. If the
notes are issued after March 31, 2000, 50% of the net proceeds from the issuance
shall be applied as a permanent reduction of the RC Commitment under Section
1.7(a)(ii).
6.4 Guaranties, Indemnities, Etc. No Obligor shall be or become subject
to or bound by any Guaranty or Guaranty Equivalent, or agree, become or remain
liable (contingently or otherwise) to do any of the foregoing, except:
(a) Guaranties and Guaranty Equivalents of the obligations of
third parties (including unconsolidated subsidiaries but excluding consolidated
subsidiaries) which, together with loans and advances by all Obligors to such
third parties, in the aggregate do not exceed $785,000 at any one time;
(b) Contingent liabilities arising from the endorsement of
negotiable or other instruments for deposit or collection or similar
transactions in the ordinary course of business;
(c) Indemnities an Obligor of the liabilities of its directors
or officers in their capacities as such pursuant to provisions presently
contained in their articles of incorporation or by-laws (or other constituent
documents) or as permitted by Law; and
(d) Guaranties by an Obligor of Permitted Indebtedness of
other Obligors.
(e) Guaranties by any Obligor of Borrower's Obligations
hereunder.
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6.5 Loans, Advances And Investments. No Obligor shall at any time make
or suffer to exist or remain outstanding any loan or advance to, or purchase,
acquire or own (beneficially or of record) any stock, bonds, notes or securities
of, or any partnership interest (whether general or limited) in, or any other
interest in, or make any capital contribution to or other investment in, any
other Person, or agree, become or remain liable (contingently or otherwise) to
do any of the foregoing, except:
(a) Loans and investments existing on the date hereof and
listed in Schedule 6.5 hereof; but not any amendments, extensions or
refinancings thereof;
(b) Receivables owing to such Obligor arising from sales of
inventory under usual and customary terms in the ordinary course of business;
(c) Demand advances to officers and employees of an Obligor to
meet expenses incurred by such officers and employees in the ordinary course of
business and in amounts at any time outstanding not exceeding $5,000 to any one
officer or employee and $10,000 in the aggregate among all Obligors;
(d) Cash Equivalent Investments;
(e) Loans from one Obligor to another Obligor, provided that
the Borrower shall cause any such loans to be evidenced by a promissory note,
which shall immediately be delivered as Collateral to the Administrative Agent
on behalf of the Lenders;
(f) Permitted Acquisitions;
(g) investments in one Obligor by another Obligor;
(h) other loans and advances to third parties (including
unconsolidated subsidiaries but excluding consolidated subsidiaries), the
aggregate principal amount of which together with Guaranties and Guaranty
Equivalents issued by Obligors for such third parties, do not exceed $785,000 at
any time for all Obligors; and
(i) investments in entities purchasing delinquent pools of
Accounts in accordance with Section 6.13 so long as the Borrower causes such
entities to comply with the other applicable provisions of this Agreement.
6.6 Dividends And Related Distributions. No Obligor shall declare or
make any Stock Payment, or agree, become or remain liable (contingently or
otherwise) to do any of the foregoing, except that one Obligor may make a Stock
Payment to another Obligor.
6.7 Sale-Leasebacks. No Obligor shall at any time enter into or suffer
to remain in effect any transaction to which such Obligor is a party involving
the sale, transfer or other disposition by such Obligor of any property (now
owned or hereafter acquired), with a view directly or indirectly to the leasing
back of any part of the same property or any other property used for the same or
a similar purpose or purposes, or agree, become or remain liable (contingently
or otherwise) to do any of the foregoing.
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6.8 Leases. No Obligor shall at any time enter into or suffer to remain
in effect any lease, as lessee, of any property, or agree, become or remain
liable (contingently or otherwise) to do any of the foregoing, except:
(a) Operating leases of equipment or office space used by the
lessee in the ordinary course of business;
(b) Leases cancelable by the lessee without penalty on not
more than 90 days' notice; and
(c) Capitalized Leases permitted under Section 6.3 hereof.
6.9 Mergers, Acquisitions, Etc. No Obligor shall (a) except for
Permitted Acquisitions and mergers among Obligors and Excluded Subsidiaries
(provided that the Borrower shall survive any merger between it and another
Obligor and an Obligor shall survive any merger between it and an Excluded
Subsidiary) merge with or into or consolidate with any other Person, (b)
liquidate, wind-up, dissolve or divide, (c) except for Permitted Acquisitions,
acquire all or any substantial portion of the properties of any going concern or
going line of business, (d) except for Permitted Acquisitions, acquire all or
any substantial portion of the properties of any other Person, or (e) agree,
become or remain liable (contingently or otherwise) to do any of the foregoing;
provided, however, that the Borrower may seek the prior written consent of the
Super Majority Lenders for an acquisition which is not a Permitted Acquisition.
In connection with considering Borrower's request, the Lenders may conduct their
own due diligence or require appropriate third party due diligence regarding the
proposed acquisition. Such due diligence shall be coordinated through the
Administrative Agent. The results of all such due diligence must be satisfactory
to the Super Majority Lenders. Obligors shall bear the cost of all such due
diligence.
6.10 Dispositions Of Properties. No Obligor shall sell, convey, assign,
lease, transfer, abandon or otherwise dispose of, voluntarily or involuntarily,
any of its properties, or agree, become or remain liable (contingently or
otherwise) to do any of the foregoing, except:
(a) Obligors may sell inventory in the ordinary course of
business;
(b) Obligors may dispose of equipment which is obsolete or no
longer useful in their business;
(c) Obligors may make the Cash Equivalent Investments
described in Section 6.5(d); and
(d) Obligors may dispose of any division or Subsidiary with an
enterprise value on an arms length basis per transaction of $500,000 or less.
By way of illustration, and without limitation, it is understood that the
following are dispositions of property prohibited under this Section 6.10: any
disposition of accounts, chattel paper or general intangibles, with or without
recourse, and any disposition of any leasehold interest. Nothing in this Section
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6.10 shall be construed to limit any other restriction on dispositions of
property imposed by the Security Documents or otherwise in the Loan Documents.
6.11 Issuance Of Stock. No Obligor, other than Borrower, shall issue,
sell, otherwise dispose or suffer to remain outstanding, voluntarily or
involuntarily, any additional shares of capital stock, or any options, warrants,
calls, subscriptions, conversion rights, exchange rights, preemptive rights or
other rights, agreements or arrangements (contingent or otherwise) which may in
any circumstances now or hereafter obligate such Obligor to issue any shares of
its capital stock, except to Borrower or another Obligor and except options
issued to employees of the Obligors. The Borrower shall use 50% of the net
proceeds of any issuance of equity after March 31, 2000 to reduce the RC
Commitment as required by Section 1.7(a)(ii).
6.12 Dealings With Affiliates. No Obligor shall enter into or carry out
any transaction with (including, without limitation, purchase or lease property
or services from, sell or lease property or services to, loan or advance to, or
enter into, suffer to remain in existence or amend any contract, agreement or
arrangement with) any Affiliate of such Obligor, directly or indirectly, or
agree, become or remain liable (contingently or otherwise) to do any of the
foregoing, except:
(a) Obligors may continue to perform under contracts,
agreements and arrangements in existence as of the date hereof and set forth in
Schedule 6.12 hereof;
(b) Directors, officers and employees of an Obligor may be
compensated for services rendered in such capacity to such Obligor, provided
that such compensation is in good faith and on terms no less favorable to such
Obligor than those that could have been obtained in a comparable transaction on
an arm's-length basis from an unrelated Person, and the board of directors of
such Obligor (including a majority of the directors having no direct or indirect
interest in such transaction) approve the same;
(c) Transactions in the ordinary course of business and
consistent with past practices between one Obligor and another Obligor, in good
faith and on terms no less favorable to Borrower than those that could have been
obtained in a comparable transaction on an arm's-length basis from an unrelated
Person; and
(d) Other transactions with Affiliates in good faith and on
terms no less favorable to Borrower than those that could have been obtained in
a comparable transaction on an arm's-length basis from an unrelated Person.
6.13 Acquired Delinquent Pools Of Accounts. No Obligor shall acquire
delinquent pools of Accounts or make investments in entities purchasing
delinquent pools of Accounts if such acquisition would cause the unamortized
remaining invested balance for all such pools as reflected on the Borrower's
consolidated balance sheet to exceed $25,000,000, in the aggregate among all
Obligors, at any given point in time. From time to time the Borrower may seek
the prior written consent of the Majority Lenders (in their sole discretion) so
that the unamortized remaining invested balance of all acquired delinquent pools
of accounts or investments in entities purchasing delinquent pools of Accounts
may exceed $25,000,000.
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6.14 Capital Expenditures. No Obligor shall make any Capital
Expenditure that would cause the aggregate amount of Capital Expenditures made
by all Obligors to exceed the sum of (a) (i) in 1999, three percent (3%) of
Consolidated Pro-Forma Revenue for 1998 or (ii) in any year after 1999, two
percent (2%) of Consolidated Pro-Forma Revenue for the previous year plus (b)
the amount of money, not to exceed $1,000,000, Borrower could have used pursuant
to the foregoing clause (a), but did not use, for Capital Expenditures in 1999
or any year thereafter. For purposes of this provision, (a) all leases, except
for real estate leases and automobile leases, shall be deemed to be Capitalized
Leases (which under Section 6.3 are limited to $10,000,000 in the aggregate
during the term of this Agreement) and therefore shall be accounted for as a
Capital Expenditure and (b) Purchase Money Indebtedness shall be accounted for
as a Capital Expenditure without duplication.
6.15 Limitations On Modification Of Certain Agreements And Instruments.
No Obligor shall materially amend, modify or supplement materially its articles
of incorporation or by-laws (or similar constituent documents), if so doing
would adversely affect the Lenders' rights or benefits under the Loan Documents.
6.16 Limitation On Payments Of Purchase Money Indebtedness. No Obligor
shall directly or indirectly pay, prepay, purchase, redeem, retire, defease or
acquire, or make any payment (on account of principal, interest, premium or
otherwise) of, or grant or suffer the existence of any Lien on any of its
property (now owned or hereafter acquired) to secure any indebtedness,
obligation or liability with respect to, or amend, modify or supplement any of
the terms and conditions of, any Purchase Money Indebtedness, or agree, become
or remain liable (contingently or otherwise) to do any of the foregoing, except
that so long as no Event of Default or Default has occurred, the Borrower may
pay principal and interest on Purchase Money Indebtedness when due, to the
extent consistent with the subordination provisions of such Purchase Money
Indebtedness.
6.17 Limitation On Other Restrictions On Liens. No Obligor shall enter
into, become or remain subject to any agreement or instrument (other than the
Loan Documents) to which such Obligor is a party or by which its properties (now
owned or hereafter acquired) may be subject or bound that would prohibit the
grant of any Lien upon any of its properties (now owed or hereafter required),
except Permitted Liens.
6.18 Limitation On Other Restrictions On Amendment Of The Loan
Documents, Etc. No Obligor shall enter into, become or remain subject to any
agreement or instrument to which such Obligor is a party or by which such
Obligor or any of its respective properties (now owned or hereafter acquired)
may be subject or bound that would prohibit or require the consent of any Person
to any amendment, modification or supplement to any of the Loan Documents,
except for the Loan Documents.
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ARTICLE VII
DEFAULTS
7.1 "Events Of Default." An Event of Default shall mean the occurrence
or existence of one or more of the following events or conditions (for any
reason, whether voluntary, involuntary or effected or required by Law):
(a) Borrower shall fail to pay when due principal of any Loan.
(b) Borrower shall fail to pay when due interest on any Loan,
any fees, indemnity or expenses, or any other amount due hereunder or under any
other Loan Document.
(c) Any representation or warranty made or deemed made by any
Obligor in or pursuant to or in connection with any Loan Document, or any
statement made by any Obligor in any financial statement, certificate, report,
exhibit or document furnished by any Obligor to the Lenders pursuant to or in
connection with any Loan Document, shall prove to have been false or misleading
in any material adverse respect as of the time when made or deemed made
(including by omission of material information necessary to make such
representation, warranty or statement not misleading).
(d) Any Obligor shall default in the performance or observance
of any covenant, agreement or duty under this Agreement or any other Loan
Document and (i) in the case of a default under Section 5.1 hereof such default
shall have continued for a period of ten (10) days and (ii) in the case of any
other default such default shall have continued for a period of ten (10) days
after the Administrative Agent has sent notice of such default (as long as such
ten (10) day period does not extend more than thirty (30) days beyond the date
of occurrence of such default) provided that such default is capable of being
cured (which shall be determined in the sole and absolute discretion of the
Administrative Agent); provided, however that the foregoing notice and grace
periods shall not apply to the defaults described in subsections (a), (b) or (c)
of Section 7.1.
(e) Any Cross-Default Event shall occur with respect to any
Cross-Default Obligation; provided, that if a Cross-Default Event would have
occurred with respect to a Cross-Default Obligation but for the grant of a
waiver or similar indulgence, a Cross-Default Event shall nevertheless be deemed
to have occurred if any Obligor directly or indirectly gave or agreed to give
any consideration for such waiver or indulgence (including but not limited to a
reduction in maturity, an increase in rates or the granting of collateral). As
used herein, "Cross-Default Obligation" shall mean any (1) Indebtedness,
Guaranty or Guaranty Equivalent of any Obligor in which the principal obligation
of such Obligor exceeds $500,000, or (2) any Indebtedness under any Interest
Rate Hedging Agreement or any agreement or instrument creating, evidencing or
securing such Indebtedness, Guaranty or Guaranty Equivalent. As used herein,
"Cross-Default Event" with respect to a Cross-Default Obligation shall mean the
occurrence of any default, event or condition which permits or causes any Person
or Persons to cause all or any part of such Cross-Default Obligation to become
due (by acceleration, mandatory prepayment or repurchase, or otherwise) before
its otherwise stated maturity, or failure to pay all or any part of such
Cross-Default Obligation at its stated maturity.
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(f) One or more judgments for the payment of money shall have been
entered against any Obligor, which judgment or judgments exceed $250,000 in the
aggregate, and such judgment or judgments shall have remained undischarged and
unstayed for a period of thirty consecutive days.
(g) One or more writs or warrants of attachment, garnishment,
execution, distraint or similar process exceeding in value the aggregate amount
of $250,000 shall have been issued against any Obligor or any of their
properties and shall have remained undischarged and unstayed for a period of
thirty consecutive days.
(h) Any Governmental Action now or hereafter made by or with any
Governmental Authority required in connection with any Loan Document is not
obtained or shall have ceased to be in full force and effect or shall have been
materially modified or amended or shall have been held to be illegal or invalid,
and the Majority Lenders shall have determined in good faith (which
determination shall be conclusive) that such event or condition could have a
Material Adverse Effect.
(i) Any Security Document shall cease to be in full force and effect,
or any Lien created or purported to be created in any Collateral pursuant to any
Security Document shall fail to be a valid, enforceable and perfected Lien in
favor of the Lenders securing the Obligations, prior to all other Liens, except
Permitted Liens, or any Obligor or any Governmental Authority shall assert any
of the foregoing.
(j) Any Loan Document or term or provision thereof shall cease to be in
full force and effect, or any Obligor shall, or shall purport to, terminate,
repudiate, declare voidable or void or otherwise contest, any Loan Document or
term or provision thereof or any obligation or liability of any Obligor
thereunder, and the result of which is a material effect on the rights and
remedies of the Lenders under the Loan Documents.
(k) The Majority Lenders shall have determined in good faith that an
event or condition has occurred which will have a Material Adverse Effect.
(l) Any one or more Pension-Related Events referred to in subsection
(a)(ii), (b) or (e) of the definition of "Pension-Related Event" shall have
occurred; or any one or more other Pension-Related Events shall have occurred
and the Majority Lenders shall determine in good faith (which determination
shall be conclusive) that such other Pension-Related Events, individually or in
the aggregate, could have a Material Adverse Effect.
(m) Any one or more of the events or conditions set forth in the
following clauses (i) or (ii) shall have occurred in respect of any Obligor, and
the Majority Lenders shall determine in good faith (which determination shall be
conclusive) that such events or conditions, individually or in the aggregate,
could have a Material Adverse Effect: (i) any past or present violation of any
Environmental Law by such Person, (ii) the existence of any pending or
threatened Environmental Claim against any such Person, or the existence of any
past or present acts, omissions, events or circumstances that could form the
basis of any Environmental Claim against any such Person.
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(n) A Change of Management shall have occurred.
(o) A proceeding shall have been instituted in respect of any
Obligor:
(i) subject to clause (p)(4) below, seeking to have
an order for relief entered in respect of any Obligor, or seeking a declaration
or entailing a finding that any Obligor is insolvent or a similar declaration or
finding, or seeking dissolution, winding-up, charter revocation or forfeiture,
liquidation, reorganization, arrangement, adjustment, composition or other
similar relief with respect to any Obligor, its assets or its debts under any
Law relating to bankruptcy, insolvency, relief of debtors or protection of
creditors, termination of legal entities or any other similar Law now or
hereafter in effect, or
(ii) subject to clause (p)(5) below, seeking
appointment of a receiver, trustee, liquidator, assignee, sequestrator or other
custodian for such Person or for all or any substantial part of its property,
and such proceeding shall result in the entry, making or grant of any such order
for relief, declaration, finding, relief or appointment, or such proceeding
shall remain undismissed and unstayed for a period of sixty consecutive days.
(p) Obligors on a consolidated basis shall (i) become
insolvent; (ii) fail to pay their debts as they become due or (iii) become
unable to pay their debts as they become due; or any Obligor shall (1) state
that it is or will be unable to pay, its debts as they become due; (2)
voluntarily suspend transaction of its business; (3) make a general assignment
for the benefit of creditors; (4) institute (or fail to controvert in a timely
and appropriate manner) a proceeding described in Section 7.1(o)(i) hereof, or
(whether or not any such proceeding has been instituted) shall consent to or
acquiesce in any such order for relief, declaration, finding or relief described
therein; (5) institute (or fail to controvert for a period of sixty consecutive
days in a timely and appropriate manner) a proceeding described in Section
7.1(o)(ii) hereof, or (whether or not any such proceeding has been instituted)
shall consent to or acquiesce in any such appointment or to the taking of
possession by any such custodian of all or any substantial part of its property;
shall dissolve, wind-up, revoke or forfeit its charter (or other constituent
documents) or liquidate itself or any substantial part of its property; or (6)
take any action in furtherance of any of the foregoing.
(q) Any person or any affiliated group of persons, other than
present management, obtains control of a majority of the voting stock of NCO
Group.
(r) An event of default shall occur under an Interest Rate
Hedging Agreement.
7.2 Consequences Of An Event Of Default.
(a) Events of Default in General. If an Event of Default
(other than one specified in paragraphs (o) and (p) of Section 7.1 (Insolvency,
Bankruptcy, Etc.) hereof) shall occur and be continuing or shall exist, then, in
addition to all other rights and remedies which the Administrative Agent or any
other Lender may have hereunder or under any other Loan Document, at law, in
equity or otherwise, the Lenders shall be under no further obligation to make
Loans, the Issuer shall have no obligation to issue Letters of Credit and the
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Administrative Agent may, (and, upon the written request of the Majority Lenders
shall) by notice to Borrower, from time to time do any or all of the following:
(i) Declare the Commitments terminated, whereupon the
Commitments will terminate and any fees hereunder shall be immediately due and
payable without presentment, demand, protest or further notice of any kind, all
of which are hereby waived, and an action therefor shall immediately accrue.
(ii) Declare the unpaid principal amount of the
Loans, interest accrued thereon and all other Obligations (other than
obligations incurred under an Interest Rate Hedging Agreement) to be immediately
due and payable without presentment, demand, protest or further notice of any
kind, all of which are hereby waived, and an action therefor shall immediately
accrue.
(iii) Exercise such other remedies as may be
available to the Lenders under applicable Law.
(b) Automatic Acceleration; Certain Bankruptcy-Related Events.
If an Event of Default specified in paragraph (o) or (p) of Section 7.1
(Insolvency, Bankruptcy, Etc.) hereof shall occur or exist, then, in addition to
all other rights and remedies which any Lender may have hereunder or under any
other Loan Document, at law, in equity or otherwise, the Commitments shall
automatically terminate and the Lenders shall be under no further obligation to
make Loans, the Issuer shall have no obligation to issue Letters of Credit, and
the unpaid principal amount of the Loans, interest accrued thereon and all other
Obligations shall become immediately due and payable without presentment,
demand, protest or notice of any kind, all of which are hereby waived, and an
action therefor shall immediately accrue, and in addition, the Administrative
Agent may, and upon the written request of the Majority Lenders, shall exercise
such other remedies as may be available to the Lenders under applicable Law.
(c) Equitable Remedies. It is agreed that, in addition to all
other rights hereunder or under Law, the Administrative Agent shall have the
right to institute proceedings in equity or other appropriate proceedings for
the specific performance of any covenant or agreement made in any of the Loan
Documents or for an injunction against the violation of any of the terms of any
of the Loan Documents or in aid of the exercise of any power granted in any of
the Loan Documents or by Law or otherwise.
7.3 Application Of Proceeds. After the occurrence of an Event of
Default and acceleration of the Loans, any amounts received on account of
Obligations shall be applied by the Administrative Agent in the following order:
First, to payment of that portion of the Obligations
constituting fees, indemnities, expenses and other amounts due to the
Administrative Agent in its capacity as such;
Second, to payment of that portion of the Obligations
constituting fees, indemnities due to the Lenders, ratably among them
in proportion to the amounts described in this clause Second due to
them;
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Third, to payment of that portion of the Obligations
constituting accrued and unpaid interest on Loans, ratably among the
Lenders in proportion to the respective amounts described in this
clause Third due to them;
Fourth, to payment of that portion of the Obligations
constituting unpaid principal of the Loans ratably among the Lenders in
proportion to the respective amounts described in this clause Fourth
due to them;
Fifth, to payment of all other Obligations, ratably among the
Lenders in proportion to the respective amounts described in this
clause Fifth due to them; and
Finally, the balance, if any, after all of the Obligations
have been indefeasibly paid in full, to Borrower or as otherwise
required by Law.
ARTICLE VIII
THE ADMINISTRATIVE AGENT
8.1 Appointment. Subject to the provisions of the second sentence of
Section 8.9 below, each Lender hereby irrevocably appoints Mellon to act as
Administrative Agent for such Lender under this Agreement and the other Loan
Documents. Each Lender hereby irrevocably authorizes the Administrative Agent to
take such action on behalf of such Lender under the provisions of this Agreement
and the other Loan Documents, and to exercise such powers and to perform such
duties, as are expressly delegated to or required of the Administrative Agent by
the terms hereof or thereof, together with such powers as are reasonably
incidental thereto. Mellon hereby agrees to act as Administrative Agent on
behalf of the Lenders on the terms and conditions set forth in this Agreement
and the other Loan Documents, subject to its right to resign as provided in
Section 8.9 hereof. Each Lender hereby irrevocably authorizes the Administrative
Agent to execute and deliver each of the Loan Documents and to accept delivery
of such of the other Loan Documents as may not require execution by the
Administrative Agent. Each Lender agrees that the rights and remedies granted to
the Administrative Agent under the Loan Documents shall be exercised exclusively
by the Administrative Agent (or a Person designated by the Administrative
Agent), and that no Lender shall have any right individually to exercise any
such right or remedy, except to the extent, if any, expressly provided herein or
therein.
8.2 General Nature Of Administrative Agent's Duties. Notwithstanding
anything to the contrary elsewhere in this Agreement or in any other Loan
Document:
(a) The Administrative Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement and the
other Loan Documents, and no implied duties or responsibilities on the part of
the Administrative Agent shall be read into this Agreement or any other Loan
Document or shall otherwise exist.
(b) The duties and responsibilities of the Administrative
Agent under this Agreement and the other Loan Documents shall be mechanical and
administrative in nature, and the Administrative Agent shall not have a
fiduciary relationship with respect to any Lender.
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(c) The Administrative Agent's relationship with and to the
Lenders is governed exclusively by the terms of this Agreement and the other
Loan Documents. The Administrative Agent does not assume, and shall not at any
time be deemed to have, any relationship of agency or trust with or for, any
Lender or any other Person or (except only as expressly provided in this
Agreement and the other Loan Documents) any other duty or responsibility to such
Lender or other Person.
(d) The Administrative Agent shall be under no obligation to
take any action hereunder or under any other Loan Document if the Administrative
Agent believes in good faith that taking such action may conflict with any Law
or any provision of this Agreement or any other Loan Document, or may require
the Administrative Agent to qualify to do business in any jurisdiction where it
is not then so qualified.
(e) The authority of the Administrative Agent to request
information from the Borrower or take any other voluntary action hereunder shall
impose no duty of any kind on the Administrative Agent to make such request or
take any such action.
8.3 Exercise Of Powers. The Administrative Agent shall take any action
of the type specified in this Agreement or any other Loan Document as being
within the Administrative Agent's rights, powers or discretion in accordance
with directions from the Majority Lenders (or if expressly required herein the
Super Majority Lenders) (or as otherwise expressly provided in the Loan
Documents). In the absence of such direction, the Administrative Agent shall
have the authority (but under no circumstances shall be obligated), in its sole
discretion, to take any such action, except to the extent that this Agreement or
such other Loan Document expressly requires the direction or consent of the
Majority Lenders (or the Super Majority Lenders, all of the Lenders), in which
case the Administrative Agent shall not take such action absent such direction
or consent. Any action or inaction pursuant to such direction, discretion or
consent shall be binding on each Lender (whether or not it so consented). The
Administrative Agent shall not have any liability to any Person as a result of
any action or inaction in conformity with this Section 8.3.
8.4 General Exculpatory Provisions. Notwithstanding anything to the
contrary elsewhere in this Agreement or any other Loan Document:
(a) The Administrative Agent shall not be liable for any
action taken or omitted to be taken by it under or in connection with this
Agreement or any other Loan Document, except only for direct (as opposed to
consequential or other) damages suffered by a Person and only to the extent that
such Person proves that such damages were caused by the Administrative Agent's
own gross negligence or willful misconduct.
(b) The Administrative Agent shall not be responsible for (i)
the execution, delivery, effectiveness, enforceability, genuineness, validity or
adequacy of any Loan Document, (ii) any recital, representation, warranty,
document, certificate, report or statement in, provided for in, or received
under or in connection with, any Loan Document, or (iii) any failure of any
Obligor or, any Lender to perform any of their respective obligations under any
Loan Document.
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(c) The Administrative Agent shall not be under any obligation
to ascertain, inquire or give any notice relating to (i) the performance or
observance of any of the terms or conditions of this Agreement or any other Loan
Document on the part of any Obligor, (ii) the business, operations, condition
(financial or otherwise) or prospects of any Obligor or any other Person (even
if the Administrative Agent knows or should know that some event or condition
exists or fails to exist), or (iii) except to the extent set forth in Section
8.5(f) below, the existence of any Event of Default or Default.
(d) The Administrative Agent shall not be under any
obligation, either initially or on a continuing basis, to provide any Lender
with any notices, reports or information of any nature, whether in its
possession presently or hereafter, whether obtained under or in connection with
this Agreement or otherwise, except for such notices, reports and other
information expressly required by this Agreement or any other Loan Document to
be furnished by the Administrative Agent to such Lender.
8.5 Administration By The Administrative Agent.
(a) The Administrative Agent may rely upon any notice or other
communication of any nature (written or oral, including but not limited to
telephone conversations, whether or not such notice or other communication is
made in a manner permitted or required by this Agreement or any other Loan
Document) purportedly made by or on behalf of the proper party or parties, and
the Administrative Agent shall not have any duty to verify the identity or
authority of any Person giving such notice or other communication.
(b) The Administrative Agent may consult with legal counsel
(including in-house counsel for the Administrative Agent or in-house or other
counsel for any Obligor), independent public accountants and any other experts
selected by it from time to time, and the Administrative Agent shall not be
liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts.
(c) The Administrative Agent may conclusively rely upon the
truth of the statements and the correctness of the opinions expressed in any
certificates or opinions furnished to the Administrative Agent in accordance
with the requirements of this Agreement or any other Loan Document. Whenever the
Administrative Agent shall deem it necessary or desirable that a matter be
proved or established with respect to any Obligor or Lender, such matter may be
established by a certificate of any Obligor or Lender, as the case may be, and
the Administrative Agent may conclusively rely upon such certificate (unless
other evidence with respect to such matter is specifically prescribed in this
Agreement or another Loan Document).
(d) The Administrative Agent may fail or refuse to take any
action unless it shall be directed by the Majority Lenders (or the Super
Majority Lenders or all of the Lenders, if this Agreement or another Loan
Document so expressly requires) to take such action and it shall be indemnified
to its satisfaction from time to time against any and all amounts, liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature which may be imposed on,
incurred by or asserted against the Administrative Agent by reason of taking or
continuing to take any such action.
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(e) The Administrative Agent may perform any of its duties
under this Agreement or any other Loan Document by or through agents or
attorneys-in-fact. The Administrative Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
(f) The Administrative Agent shall not be deemed to have any
knowledge or notice of the occurrence of any Event of Default or Default unless
the Administrative Agent has received notice from a Lender or Borrower referring
to this Agreement, describing such Event of Default or Default, and stating that
such notice is a "notice of default." If the Administrative Agent receives such
a notice, the Administrative Agent shall give prompt notice thereof to each
Lender.
8.6 Lenders Not Relying On Administrative Agent Or Other Lenders. Each
Lender acknowledges as follows: (a) neither the Administrative Agent nor any
other Lender has made any representations or warranties to it, and no act taken
hereafter by the Administrative Agent or any other Lender shall be deemed to
constitute any representation or warranty by the Administrative Agent or such
other Lender to it; (b) it has, independently and without reliance upon the
Administrative Agent or any other Lender, and based upon such documents and
information as it has deemed appropriate, made its own credit and legal analysis
and decision to enter into this Agreement and the other Loan Documents; and (c)
it will, independently and without reliance upon the Administrative Agent or any
other Lender, and based upon such documents and information as it shall deem
appropriate at the time, make its own decisions to take or not take action under
or in connection with this Agreement and the other Loan Documents.
8.7 Indemnification. Each Lender agrees to reimburse and indemnify the
Administrative Agent and its directors, officers, employees and agents (to the
extent not reimbursed by Obligors and without limitation of the obligations of
the Obligors to do so), in proportion to the Lenders' respective pro rata share
of the Commitment, from and against any and all amounts, losses, liabilities,
claims, damages, expenses, obligations, penalties, actions, judgments, suits,
costs or disbursements of any kind or nature (including the fees and
disbursements of counsel for the Administrative Agent or such other Person in
connection with any investigative, administrative or judicial proceeding
commenced or threatened, whether or not the Administrative Agent or such other
Person shall be designated a party thereto) that may at any time be imposed on,
incurred by or asserted against the Administrative Agent or such other Person as
a result of, or arising out of, or in any way related to or by reason of, this
Agreement, any other Loan Document, any Acquisition or any other transaction
from time to time contemplated hereby or thereby, or any transaction actually or
proposed to be financed in whole or in part, directly or indirectly, with the
proceeds of any Loan, provided that no Lender shall be liable for any portion of
such amounts, losses, liabilities, claims, damages, expenses, obligations,
penalties, actions, judgments, suits, costs or disbursements that such Lender
proves were the result of the gross negligence or willful misconduct of the
Administrative Agent or such other Person. Payments under this Section 8.7 shall
be due and payable on demand.
8.8 Administrative Agent's Records. The Administrative Agent shall
maintain at its address referred to in Section 11.1 a copy of each Assignment
and Acceptance Agreement delivered to and accepted by it and an electronic
record of the names and addresses of the Lenders and the Commitment of, and
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principal amount of the Loans and stated interest thereon owing to, each Lender
from time to time (the "Record"). The entries in the Record shall be conclusive
and binding for all purposes, absent manifest error, and the Borrower, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Record as a Lender hereunder for all purposes of this Agreement.
8.9 Successor Administrative Agent. The Administrative Agent may resign
at any time by giving 30 days' prior written notice thereof to the other Lenders
and NCO Group. The Administrative Agent may be removed by the Majority Lenders
at any time for cause by such Majority Lenders giving 30 days' prior written
notice thereof to the Administrative Agent, the other Lenders and NCO Group.
Upon any such resignation or removal, the Majority Lenders shall have the right
to appoint a successor Administrative Agent with (so long as no Default or Event
of Default shall have occurred and then be continuing) the consent of NCO Group
whose consent shall not be unreasonably withheld or delayed. If no successor
Administrative Agent shall have been so appointed and consented to, and shall
have accepted such appointment, within 30 days after such notice of resignation
or removal, then another Lender shall have the right to become the successor
Administrative Agent by giving written notice thereof to NCO Group and the
Lenders and if no Lender volunteers to become successor Administrative Agent or
fails to give such notice within thirty five (35) days after the retiring
Administrative Agent's notice of resignation or removal, then the retiring
Administrative Agent may (but shall not be required to) appoint a successor
Administrative Agent. Each successor Administrative Agent shall be a Lender if
any Lender shall at the time be willing to become the successor Administrative
Agent, and if no Lender shall then be so willing, then such successor
Administrative Agent shall be an Eligible Institution. Upon the acceptance by a
successor Administrative Agent of its appointment as Administrative Agent
hereunder, such successor Administrative Agent shall thereupon succeed to and
become vested with all the properties, rights, powers, privileges and duties of
the former Administrative Agent in its capacity as such, without further act,
deed or conveyance. Upon the effective date of resignation or removal of a
retiring Administrative Agent, such Administrative Agent shall be discharged
from its duties under this Agreement and the other Loan Documents, but the
provisions of this Agreement shall inure to its benefit as to any actions taken
or omitted by it while it was Administrative Agent under this Agreement. If and
so long as no successor Administrative Agent shall have been appointed, then any
notice or other communication required or permitted to be given by the
Administrative Agent shall be sufficiently given if given by the Majority
Lenders, all notices or other communications required or permitted to be given
to the Administrative Agent shall be given to each Lender, and all payments to
be made to the Administrative Agent shall be made directly to the Borrower or to
the Lender for whose account such payment is made.
8.10 Additional Agents. If the Administrative Agent shall from time to
time deem it necessary or advisable, for its own protection in the performance
of its duties hereunder or in the interest of the Lenders, the Administrative
Agent and the Borrower shall execute and deliver a supplemental agreement and
all other instruments and agreements necessary or advisable, in the opinion of
the Administrative Agent, to constitute one or more other Persons designated by
the Administrative Agent, to act as an "Agent", with such titles as may be
designated by the Administrative Agent, including but not limited to, Managing
Agent, Co-Agent, Syndication Agent or Documentation Agent. None of the Lenders
designated as an Agent herein or in any other document or instrument executed
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and delivered in connection herewith shall have any right, power, obligation,
liability, responsibility or duty under this Agreement other than those
applicable to all Lenders as such. Without limiting the foregoing, none of such
Lenders shall have or be deemed to have any fiduciary relationship with any
other Lender hereunder or under the other Loan Documents. Each Lender
acknowledges that it has not relied, and will not rely, on any of the Lenders so
identified in deciding to enter into this Agreement or in taking or not taking
action hereunder.
8.11 Calculations. The Administrative Agent shall not be liable for any
calculation, apportionment or distribution of payments made by it in good faith
and without gross negligence or willful misconduct. If such calculation,
apportionment or distribution is subsequently determined to have been made in
error, the sole recourse of any Lender to whom payment was due but not made
shall be to recover from the other Lenders any payment in excess of the amount
to which they are determined to be entitled or, if the amount due was not paid
by Borrower to recover such amount from Borrower.
8.12 Administrative Agent In Its Individual Capacity. With respect to
its Commitment hereunder and the Obligations owing to it, the Administrative
Agent shall have the same rights and powers under this Agreement and each other
Loan Document as any other Lender and may exercise the same as though it were
not the Administrative Agent, and the terms "Lender", "Holder of Notes" and like
terms shall include the Administrative Agent in its individual capacity as such.
The Administrative Agent and its Affiliates may, without liability to account,
make loans to, accept deposits from, acquire debt or equity interests in, act as
trustee under indentures of, enter into Interest Rate Hedging Agreements with,
serve as "Administrative Agent" for other financing vehicles, issue letters of
credit on behalf of, and engage in any other business with, (a) any Obligor or
any stockholder, Subsidiary or Affiliate of any Obligor, or (b) any other
Person, whether such other Person may be engaged in any conflict or dispute with
any Obligor or any Lender or otherwise, as though the Administrative Agent were
not the Administrative Agent hereunder.
ARTICLE IX
SPECIAL INTER-OBLIGOR PROVISIONS
9.1 Acknowledgements of Synergies and Inter-dependence.
(a) Each Obligor will enjoy significant benefits from the
business conducted by the other Obligors because of, inter alia, their combined
ability to bargain with other Persons including without limitation their ability
to negotiate the credit facilities for the Borrower on the favorable terms
granted by this Agreement and other Loan Documents which would not have been
available to an individual Obligor acting alone. Each Obligor has determined
that it is in its best interest to procure credit facilities which the Borrower
may utilize directly and which receive the credit support of the other Obligors
as contemplated by this Agreement and the other Loan Documents.
(b) The Lenders have advised the Borrower that they are
unwilling to enter into this Agreement and the other Loan Documents and make
available the credit facilities extended hereby unless each Obligor (other than
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Borrower) agrees, among other things, to be liable for the due and proper
payment of the obligations of Borrower under this Agreement and other Loan
Documents. Each Obligor has determined that it is in its best interest and in
pursuit of its purposes that it so induce the Lenders to extend credit pursuant
to this Agreement and the other documents executed in connection herewith (i)
because of the desirability to each Obligor of the credit facilities, the
interest rates and the modes of borrowing available to Borrower hereunder, (ii)
because each Obligor may engage in transactions jointly with other Obligors and
(iii) because each Obligor may require, from time to time, access to funds under
this Agreement for the purposes herein set forth.
(c) Each Obligor has determined that it has and, after giving
effect to the transactions contemplated by this Agreement and the other Loan
Documents (including, without limitation, the inter-Obligor arrangement set
forth in this Article 9) will have, assets having a fair saleable value in
excess of the amount required to pay its probable liability on its existing
debts as they fall due for payment and that the sum of its debts is not and will
not then be greater than all of its property at a fair valuation, that such
Obligor has, and will have, access to adequate capital for the conduct of its
business and the ability to pay its debts from time to time incurred in
connection therewith as such debts mature and that the value of the benefits to
be derived by such Obligor from the access to funds under this Agreement
(including, without limitation, the inter-Obligor arrangement set forth in this
Article 9) is reasonably equivalent to the obligations undertaken pursuant
hereto.
9.2 Certain Inter-Obligor Agreements.
(a) Subject to paragraph (b) below, each Obligor as indemnitor
shall indemnify the other Obligor as indemnitees for all Obligations incurred by
the indemnitee Obligor for proceeds of Loans advanced to the indemnitor Obligor.
(b) The rights and obligations of the Obligors pursuant to
paragraph (a) above shall be subordinated in all respects to the rights of the
Administrative Agent and the Lenders with respect to the Obligations and,
accordingly, each Obligor agrees that it shall not make any payment or receive
any payment pursuant to the preceding paragraph (a) at any time a Default has
occurred and is continuing or would be caused thereby. Each Obligor agrees that
in the event it receives any payment described by or in violation of this
paragraph (b), it shall accept such payment as agent of the Administrative
Agent, for the benefit of the Lenders, and hold the same in trust on behalf of
and for the benefit of the Administrative Agent, for the benefit of the Lenders.
9.3 Borrower's Records. Borrower (on behalf of each Obligor) shall
maintain records specifying (a) all Obligations incurred by each Obligor, (b)
the date of such incurrence, (c) the date and amount of any payments made in
respect of such Obligations and (d) all inter-Obligor obligations pursuant to
paragraph 9.2 above. Borrower shall make copies of such records available to the
Administrative Agent, upon request.
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ARTICLE X
DEFINITIONS; CONSTRUCTION
10.1 Certain Definitions. As used in this Agreement, the following
terms have the following meanings, (terms defined in the singular to have a
correlative meaning when used in the plural) unless the context hereof otherwise
clearly requires:
"Accumulated Funding Deficiency" has the meaning given to such term in
ss.4001(a)(18) of ERISA.
"Administrative Agent" has the meaning ascribed to such term in the
preamble of this Agreement.
"Affiliate" of a Person (the "Specified Person") shall mean (a) any
Person which directly or indirectly controls, or is controlled by, or is under
common control with, the Specified Person, (b) any director or officer (or, in
the case of a Person which is not a corporation, any individual having analogous
powers) of the Specified Person or of a Person who is an Affiliate of the
Specified Person within the meaning of the preceding clause (a), and (c) for
each individual who is an Affiliate of the Specified Person within the meaning
of the foregoing clauses (a) or (b), any other individual related to such
Affiliate by consanguinity within the third degree or in a step or adoptive
relationship within such third degree or related by affinity with such Affiliate
or any such individual. For purposes of the preceding sentence, "control" of a
Person means (a) the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of such Person, whether
through the ownership of voting securities, by contract or otherwise.
"Agent" has the meaning ascribed to such term in Section 8.10.
"Agreement" means this Credit Agreement as the same may be amended,
modified, restated or supplemented from time to time in accordance with its
terms.
"Applicable Margin" means a marginal rate of interest which is added to
the LIBO Rate or Prime Rate to determine the effective rate of interest on LIBO
Rate Loans or the Prime Rate Loans, as the case may be. The Applicable Margin
shall be determined in the following manner:
For any LIBO Rate Loan or Prime Rate Loan, the Applicable Margin shall be the
percentage amount set forth below under the caption "Applicable Margin" for such
Loan opposite the relevant Consolidated Funded Debt/Consolidated EBITDA Ratio:
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Grid A (pre-offering)
Consolidated Funded Debt/ Applicable Margin Applicable Margin
Level Consolidated EBITDA Ratio LIBO Rate Loans Prime Rate Loans
------- ------------------------- --------------- ----------------
1 below 1.50 1.25% .25%
2 greater than or equal to
1.50 less than or equal to
2.00 1.50% .25%
3 > 2.00 less than or equal to
2.50 1.75% .25%
4 > 2.50 less than or equal to
3.00 2.00% .25%
5 > 3.00 2.25% .50%
The Applicable Margin shall be adjusted on the first Business Day of the month
after delivery of each Officer's Compliance Certificate under Section 5.1 or in
the event of any Permitted Acquisition, on the first Business day of the month
after closing and delivery of the Pro-Forma Covenant Compliance Certificate
required for the acquisition. If an Officer's Compliance Certificate is required
to be delivered pursuant to Section 5.1 and is not delivered by its deadline,
then five Business Days after notice to NCO Group the Applicable Margin shall be
the highest rate specified above until the Officer's Compliance Certificate is
so delivered.
In the event NCO Group successfully completes by March 31, 2000 (i) a
convertible subordinated debt issuance in the minimum amount of $150,000,000
and/or (ii) a common stock issuance in the minimum amount of $100,000,000 and/or
(iii) a convertible subordinated debt issuance in the minimum amount of
$100,000,000 in conjunction with a common stock issuance in the minimum amount
of $25,000,000, then the Applicable Margin shall be based on Grid B:
Grid B (post-offering)
Consolidated Funded Debt/ Applicable Margin Applicable Margin
Level Consolidated EBITDA Ratio LIBO Rate Loans Prime Rate Loans
------- ------------------------- --------------- ----------------
1 below 1.50 1.00% .25%
2 greater than or equal to
1.50 less than or equal to 2.00 1.25% .25%
3 > 2.00 less than or equal to 2.50 1.50% .25%
4 > 2.50 less than or equal to 3.00 1.75% .25%
5 > 3.00 less than or equal to 3.50 2.00% .25%
6 > 3.50 less than or equal to 4.00 2.25% .50%
7 > 4.00 2.50% .75%
"Assignment and Acceptance Agreement" shall have the meaning ascribed
to such term in Section 11.9.
"Available RC Commitment" means, as of any date, the difference
obtained by subtracting (a) minus (b) where (a) is the amount of the RC
Commitment on such date and (b) is the aggregate outstanding principal amount of
all Loans plus amounts available to be drawn under Letters of Credit on such
date plus the aggregate outstanding amount of all unreimbursed Drawings.
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"Bank Tax" means (i) any Tax based on or measured by net income of a
Lender, any franchise Tax and any doing business Tax imposed upon any Lender by
any jurisdiction (or any political subdivision thereof) in which such Lender or
any lending office of a Lender is located and (ii) for the purposes of Section
1.13, any other Tax imposed by a jurisdiction other than the United States or a
political subdivision thereof that would not have been imposed but for a present
or former connection between such Lender or lending office (as the case may be)
and such jurisdiction.
"Business Day" means any day other than a Saturday, Sunday, public
holiday under the laws of the Commonwealth of Pennsylvania, or other day on
which banking institutions are authorized or obligated to close in the city in
which the Administrative Agent's Domestic Lending Office is located provided,
however, that whether or not expressly stated in this Agreement or other Loan
Documents, when "Business Day" is used with respect to any LIBO Rate Loan, such
Business Day must also be a Eurodollar Business Day.
"Capital Expenditures", of any Person shall mean, for any period, all
expenditures (whether paid in cash or accrued as liabilities during such period)
of such Person during such period which would be classified as capital
expenditures in accordance with GAAP (including, without limitation,
expenditures for maintenance and repairs which are capitalized, Capitalized
Leases to the extent an asset is recorded in connection therewith in accordance
with GAAP, and Purchase Money Indebtedness), but excluding any capital assets
acquired as part of a Permitted Acquisition.
"Capitalized Lease" shall mean at any time any lease, other than a real
estate lease or automobile lease, which is, or is required under GAAP to be,
capitalized on the balance sheet of the lessee at such time, and "Capitalized
Lease Obligation" of any Person at any time shall mean the aggregate amount
which is, or is required under GAAP to be, reported as a liability on the
balance sheet of such Person at such time as lessee under a Capitalized Lease.
"Cash Equivalent Investments" shall mean any of the following, to the
extent acquired for investment and not with a view to achieving trading profits:
(a) obligations fully backed by the full faith and credit of the United States
of America maturing not in excess of nine months from the date of acquisition,
(b) commercial paper maturing not in excess of nine months from the date of
acquisition and rated "P-1" by ▇▇▇▇▇'▇ Investors Service or "A-1" by Standard &
Poor's Corporation on the date of acquisition, and (c) the following obligations
of any domestic commercial bank having capital and surplus in excess of
$500,000,000, which has, or the holding company of which has, a commercial paper
rating meeting the requirements specified in clause (b) above: (i) time
deposits, certificates of deposit and acceptances maturing not in excess of nine
months from the date of acquisition, or (ii) repurchase obligations with a term
of not more than seven days for underlying securities of the type referred to in
clause (a) above.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, and any successor statute of similar
import, and regulations thereunder, in each case as in effect from time to time.
"CERCLIS" shall mean the Comprehensive Environmental Response,
Compensation and Liability Information System List, as the same may be amended
from time to time.
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"Change of Management" shall mean (a) that a majority of the Board of
Directors of NCO Group shall be other than those who were directors on the date
hereof; or (b) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ for any reason shall cease to serve as chief
executive officer of NCO Group; provided, however, that the cessation of ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇'▇ status as chief executive officer shall not fall within the definition
of a Change of Management so long as a replacement is hired within ninety (90)
calendar days of such cessation who is reasonably satisfactory to the Super
Majority Lenders.
"Closing Date" means the date of execution and delivery of this
Agreement.
"COBRA Violation" means any violation of the "continuation coverage
requirements" of "group health plans" of former ss.162(k) of the Code (as in
effect for tax years beginning on or before December 31, 1988) and of ss.4980B
of the Code (as in effect for tax years beginning on or after January 1, 1989)
and Part 6 of Subtitle B of Title I of ERISA.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute of similar import, and regulations thereunder, in each case as
in effect from time to time, and the Treasury regulations thereunder.
"Collateral" shall mean the property from time to time subject to the
Liens of the Security Documents.
"Commitment" shall mean the RC Commitment.
"Consolidated EBIT" for any period, with respect to NCO Group and its
consolidated Subsidiaries, shall mean the sum of (a) Consolidated Net Income for
such period, (b) Consolidated Interest Expense for such period, (c) charges
against income for Taxes for such period, (d) extraordinary losses to the extent
included in determining such Consolidated Net Income, minus (e) extraordinary
gains to the extent included in determining such Consolidated Net Income, all as
determined on a consolidated basis in accordance with GAAP.
"Consolidated EBITDA" for any period, with respect to NCO Group and its
consolidated Subsidiaries, shall mean the sum of (a) Consolidated EBIT for such
period, (b) depreciation expense for such period, and (c) amortization expense
for such period, all as determined on a consolidated basis in accordance with
GAAP.
"Consolidated Fixed Charge Coverage Ratio" for any period, with respect
to NCO Group and its consolidated Subsidiaries, shall mean the ratio of (i)
Consolidated EBITDA minus Capital Expenditures for such period to (ii) the sum
for such period of (a) Consolidated Interest Expense, (b) principal payments on
Indebtedness and (c) Taxes, all as determined on a consolidated basis in
accordance with GAAP.
"Consolidated Funded Debt" shall mean all Indebtedness of NCO Group and
its consolidated Subsidiaries for borrowed money, including without limitation
the Obligations, Capitalized Leases and Subordinated Debt.
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"Consolidated Interest Coverage Ratio" for any period shall mean the
ratio of Consolidated EBIT for such period to the Consolidated Interest Expense
for such period.
"Consolidated Interest Expense" for any period shall mean the total
Interest Expense of NCO Group and its consolidated Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income" for any period shall mean the net earnings
(or loss) after taxes of NCO Group and its consolidated Subsidiaries for such
period determined on a consolidated basis in accordance with GAAP; provided,
that there shall be deducted therefrom (a) the income (or deficit) of any Person
accrued prior to the date it becomes a consolidated Subsidiary or is merged into
or consolidated, acquired by or combined with NCO Group or any consolidated
Subsidiary in a business combination accounted for as a pooling of interests,
including, in the case of a successor to NCO Group or any consolidated
Subsidiary by consolidation or merger or transfer of assets, any earnings of the
successor corporation prior to such consolidation, merger or transfer of assets,
(b) income or loss accounted for by NCO Group on the equity method because of
the income (or deficit) during such period of any Person (other than a
consolidated Subsidiary) in which NCO Group or any consolidated Subsidiary has
an ownership interest, but the deduction for such equity income shall be
reversed to the extent that during such period or at any subsequent time an
amount not in excess of such income has been actually received by NCO Group or
such consolidated Subsidiary in the form of cash or cash equivalents, (c) income
or loss of a foreign Subsidiary, but the deduction for such Subsidiary income
shall be reversed to the extent that during such period or at any subsequent
time an amount not in excess of such income has been actually received by NCO
Group or such consolidated Subsidiary in the form of cash or property dividends
or similar distributions, not subject to foreign currency translation, (d) the
undistributed earnings of any consolidated Subsidiary to the extent that the
declaration or payment of dividends or similar distributions by such
consolidated Subsidiary is restricted (whether such restriction arises by
operation of Law, by agreement, by its articles of incorporation or by-laws (or
other constituent documents), or otherwise), (e) any restoration to income of
any contingency reserve, except to the extent that provision for such reserve
was made against income during such period, and (f) any gain arising from the
acquisition of any securities, or the extinguishment, under GAAP, of any
Indebtedness, of NCO Group or any consolidated Subsidiary.
"Consolidated Net Worth" at any time shall mean the total amount of
stockholders' equity of NCO Group and its consolidated Subsidiaries at such time
determined on a consolidated basis in accordance with GAAP.
"Consolidated Pro-Forma Revenue" for any period shall mean (a) all
revenue reported on the consolidated financial statements of the Borrower
provided pursuant to Section 5.1 for the period plus (b) to the extent not
included in such reported revenue, revenues during the period generated by
properties or businesses Borrower acquires in Permitted Acquisitions during the
period minus (c) to the extent not already excluded from the revenue numbers
under clauses (a) and (b), any revenues generated by properties or businesses
that Borrower or an acquired company has divested during the period.
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"Consolidated Senior Debt" shall mean all Indebtedness of NCO Group and
its consolidated Subsidiaries for borrowed money, including without limitation
the Obligations and Capitalized Leases, but excluding Subordinated Debt.
"Contingent Reimbursement Obligation" shall mean the contingent
obligation of the Borrower to reimburse the Issuer for any Drawings that may be
made under an outstanding Letter of Credit, whenever issued. Without limiting
the generality of the foregoing, the amount of all Contingent Reimbursement
Obligations at any time shall be the aggregate amount available to be drawn
under outstanding Letters of Credit at such time.
"Controlled Group Member" shall mean each trade or business (whether or
not incorporated) which together with Borrower is treated as a single employer
under Sections 4001(a)(14) or 4001(b)(1) of ERISA or Sections 414(b), (c), (m)
or (o) of the Code.
"Default" means any event or condition which with notice, passage of
time or both, would constitute an Event of Default.
"Default Rate" means, with respect to any amounts payable hereunder or
under the other Loan Documents, a rate equal to the sum of (a) two percent (2%)
per annum plus (b) the interest rate otherwise in effect with respect to such
amounts or, if no such rate is otherwise in effect with respect to such amounts,
a rate equal to the sum of (i) the Prime Rate plus (ii) two percent (2%) per
annum.
"Dollar," "Dollars" and the symbol "$" means lawful money of the United
States of America.
"Domestic Lending Office" means, with respect to any Lender (i) the
office designated as such on the signature page hereof, or (ii) the branch or
office of such Lender designated, from time to time, by such Lender in a notice
to the Administrative Agent and NCO Group.
"Drawing" shall mean (a) any amount disbursed by the Issuer pursuant to
the terms of a Letter of Credit or (b) as the context may require, the
obligation of the Borrower to reimburse the Issuer for such disbursement.
"Eligible Institution" means (i) a Lender; (ii) an Affiliate of a
Lender; (iii) a commercial bank organized under the laws of the United States,
or any State thereof, and having a combined capital and surplus of at least
$1,000,000,000.00; (iv) a savings and loan association or savings bank organized
under the laws of the United States, or any State thereof, and having a combined
capital and surplus of at least $1,000,000,000.00; (v) a commercial bank
organized under the laws of any other country that is a member of the
Organization for Economic Cooperation and Development or has concluded special
lending arrangements with the International Monetary Fund associated with its
General Arrangements to Borrow or under the laws of a political subdivision of
any such country, and having a combined capital and surplus of at least
$1,000,000,000.00, so long as such bank is acting through a branch or agency
located in the United States; and (vi) a finance company, insurance company or
other financial institution or fund (whether a corporation, partnership, trust
or other entity) that is engaged in making, purchasing or otherwise investing in
commercial loans in the ordinary course of its business and having a combined
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capital and surplus or total assets of at least $500,000,000.00 and (vii) with
respect to any Lender that is a fund, any other fund with assets in excess of
$100,000,000.00 that invests in bank loans and is managed by the same investment
advisor as such Lender; provided, however, that neither Borrower nor any
Affiliate of Borrower shall qualify as an Eligible Institution under this
definition.
"Environmental Affiliate" shall mean, with respect to any Person, any
other Person whose liability (contingent or otherwise) for any Environmental
Claim such Person has retained, assumed or otherwise is liable for (by Law,
agreement or otherwise).
"Environmental Approvals" shall mean any Governmental Action pursuant
to or required under any Environmental Law.
"Environmental Claim" shall mean, with respect to any Person, any
action, suit, proceeding, investigation, notice, claim, complaint, demand,
request for information or other communication (written or oral) by any other
Person (including but not limited to any Governmental Authority, citizens' group
or present or former employee of such Person) alleging, asserting or claiming
any actual or potential (a) violation of any Environmental Law, (b) liability
under any Environmental Law or (c) liability for investigatory costs, cleanup
costs, governmental response costs, natural resources damages, property damages,
personal injuries, fines or penalties arising out of, based on or resulting from
the presence, or release into the environment, of any Environmental Concern
Materials at any location, whether or not owned by such Person.
"Environmental Cleanup Site" shall mean any location which is listed or
proposed for listing on the National Priorities List, on CERCLIS or on any
similar state list of sites requiring investigation or cleanup, or which is the
subject of any pending or threatened action, suit, proceeding or investigation
related to or arising from any alleged violation of any Environmental Law.
"Environmental Concern Materials" shall mean (a) any flammable
substance, explosive, radioactive material, hazardous material, hazardous waste,
toxic substance, solid waste, pollutant, contaminant or any related material,
raw material, substance, product or by-product of any substance specified in or
regulated or otherwise affected by any Environmental Law (including but not
limited to any "hazardous substance" as defined in CERCLA or any similar state
Law), (b) any toxic chemical or other substance from or related to industrial,
commercial or institutional activities, and (c) asbestos, gasoline, diesel fuel,
motor oil, waste and used oil, heating oil and other petroleum products or
compounds, polychlorinated biphenyls, radon and urea formaldehyde.
"Environmental Law" shall mean any Law, whether now existing or
subsequently enacted or amended, relating to (a) pollution or protection of the
environment, including natural resources, (b) exposure of Persons, including but
not limited to employees, to Environmental Concern Materials, (c) protection of
the public health or welfare from the effects of products, by-products, wastes,
emissions, discharges or releases of Environmental Concern Materials or (d)
regulation of the manufacture, use or introduction into commerce of
Environmental Concern Materials including their manufacture, formulation,
packaging, labeling, distribution, transportation, handling, storage or
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disposal. Without limitation, "Environmental Law" shall also include any
Environmental Approval and the terms and conditions thereof.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended, and any successor statute of similar import, and regulations
thereunder, in each case as in effect from time to time. References to sections
of ERISA shall be construed also to refer to any successor sections.
"Eurodollar Business Day" means any Business Day on which dealings in
Dollar deposits are carried on in the London interbank market and on which
commercial banks are open for domestic and international business (including
dealings in Dollar deposits) in London, England.
"Eurodollar Lending Office" means, with respect to any Lender, the
branch or office of such Lender designated by such Person on the signature page
hereof or in a notice to the Administrative Agent and NCO Group.
"Event of Default" shall mean any of the Events of Default described in
Article VII hereof.
"Excluded Subsidiaries" means those Subsidiaries listed on Schedule
5.16 hereof.
"Federal Funds Rate" for any day means the rate per annum determined by
the Administrative Agent (which determination shall be conclusive) to be the
rate per annum announced by the Federal Reserve Bank of New York on such day as
being the weighted average of the rates on overnight Federal funds transactions
arranged by federal funds brokers on the previous trading day, or, if such
Federal Reserve Bank does not announce such rate on any day, the rate for the
last day on which such rate was announced.
"GAAP" has the meaning set forth in Section 10.3 hereof.
"Governmental Action" has the meaning set forth in Section 4.1(d)
hereof.
"Governmental Authority" means any government or political subdivision
or any agency, authority, bureau, central bank, commission, department or
instrumentality of either, or any court, tribunal, grand jury or arbitrator, in
each case whether foreign or domestic.
"Guarantors" means each U.S. Subsidiary of Borrower other than the
Excluded Subsidiaries. Unless the Administrative Agent agrees otherwise, each
Person which is now or hereafter becomes a direct or indirect Subsidiary of NCO
Group shall at all times after becoming a Subsidiary of NCO Group be a
"Guarantor" pursuant to the terms of this Agreement.
"Guaranty" means, with respect to any Person, any contractual or other
obligation, contingent or otherwise, of such Person to pay any Indebtedness or
other obligation of any other Person or to otherwise protect the holder of any
such Indebtedness or other obligation against loss (whether such obligation
arises by agreement to pay, to keep well, to purchase assets, goods, securities
or services or otherwise); provided, however, that the term "Guaranty" shall not
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include an endorsement for collection or deposit in the ordinary course of
business. The term, "Guaranty," when used as a verb has the correlative meaning.
"Guaranty Equivalent" shall have the meaning set forth below: A Person
(the "Deemed Guarantor") shall be deemed to subject to a Guaranty Equivalent in
respect of any indebtedness, obligation or liability (the "Assured Obligation")
of another Person (the "Deemed Obligor") if the Deemed Guarantor directly or
indirectly guarantees, becomes surety for, endorses, assumes, agrees to
indemnify the Deemed Obligor against, or otherwise agrees, becomes or remains
liable (contingently or otherwise) for, such Assured Obligation. Without
limitation, a Guaranty Equivalent shall be deemed to exist if a Deemed Guarantor
agrees, becomes or remains liable (contingently or otherwise), directly or
indirectly: (a) to purchase or assume, or to supply funds for the payment,
purchase or satisfaction of, an Assured Obligation, (b) to make any loan,
advance, capital contribution or other investment in, or to purchase or lease
any property or services from, a Deemed Obligor (i) to maintain the solvency of
the Deemed Obligor, (ii) to enable the Deemed Obligor to meet any other
financial condition, (iii) to enable the Deemed Obligor to satisfy any Assured
Obligation or to make any Stock Payment or any other payment, or (iv) to assure
the holder of such Assured Obligation against loss, (c) to purchase or lease
property or services from the Deemed Obligor regardless of the non-delivery of
or failure to furnish of such property or services, (d) in a transaction having
the characteristics of a take-or-pay or throughput contract or as described in
paragraph 6 of FASB Statement of Financial Accounting Standards No. 47, or (e)
in respect of any other transaction the effect of which is to assure the payment
or performance (or payment of damages or other remedy in the event of nonpayment
or nonperformance) of any Assured Obligation.
"Indebtedness" of a Person shall mean:
(a) All obligations on account of money borrowed by, or credit
extended to or on behalf of, or for or on account of deposits with or
advances to, such Person;
(b) All obligations of such Person evidenced by bonds,
debentures, notes or similar instruments;
(c) All obligations of such Person for the deferred purchase
price of property or services, including without limitation, with
respect to the Obligors, all obligations incurred by the Obligors to a
seller in connection with any Permitted Acquisition;
(d) All obligations secured by a Lien on property owned by
such Person (whether or not assumed); and all obligations of such
Person under Capitalized Leases (without regard to any limitation of
the rights and remedies of the holder of such Lien or the lessor under
such Capitalized Lease to repossession or sale of such property);
(e) The face amount of all letters of credit issued for the
account of such Person and, without duplication, the unreimbursed
amount of all drafts drawn thereunder, and all other obligations of
such Person associated with such letters of credit or draws thereon;
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(f) All obligations of such Person in respect of acceptances
or similar obligations issued for the account of such Person;
(g) All obligations of such Person under a product financing
or similar arrangement described in paragraph 8 of FASB Statement of
Accounting Standards No. 49 or any similar requirement of GAAP; and
(h) All obligations of such Person under any interest rate or
currency protection agreement, interest rate or currency future,
interest rate or currency option, interest rate or currency swap or cap
or other interest rate or currency hedge agreement.
"Indemnified Parties" shall mean the Administrative Agent, the Lenders,
their respective affiliates, and the directors, officers, employees, attorneys
and agents of each of the foregoing.
"Interest Expense" means, for any Person, for any period, the sum
(without duplication) of (a) all interest accrued (or accreted) on Indebtedness
of such Person during such period whether or not actually paid plus (b) the net
amount accrued under any Interest Rate Hedging Agreements (or less the net
amount receivable thereunder) during such period.
"Interest Period" means with respect to any LIBO Rate Loan, (a)
initially, the period commencing on the borrowing or conversion date, as the
case may be, and ending one, two, three or six months thereafter as selected by
the Borrower pursuant to Section 1.8 above and (b) thereafter, each period
commencing on the day after the last day of the preceding Interest Period and
ending one, two, three or six months thereafter, as selected by the Borrower
pursuant to Section 1.8 above provided, however, if any such Interest Period
would otherwise end on a day which is not a Eurodollar Business Day, such
Interest Period shall be extended to the next succeeding Eurodollar Business Day
unless the result of such extension would be to carry such Interest Period into
another calendar month in which event such Interest Period shall end on the
immediately preceding Eurodollar Business Day and provided, further, if any such
Interest Period begins on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period (as may be the case
with an Interest Period commencing at the end of a calendar month) the Interest
Period shall end on the last Eurodollar Business Day of the relevant calendar
month.
"Interest Rate Hedging Agreement" means any rate swap, cap or collar
agreement with a term as may be acceptable to the Lenders to which Borrower is a
party and which is on terms and conditions satisfactory to the Majority Lenders.
"Issuer" shall have the meaning set forth in the preamble.
"Law" means any law (including common law), constitution, statute,
treaty, convention, regulation, licensing requirement, rule, ordinance, order,
injunction, writ, decree or award of any Governmental Authority.
"Lender" has the meaning ascribed to such term in the preamble hereto.
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"Letter of Credit" shall mean any letter of credit issued by Issuer
pursuant to Section 1.15 hereof.
"Letter of Credit Participation" shall mean, with respect to any
Lender, the participation interest of such Lender in any Letter of Credit
acquired pursuant to Section 1.15. The amount of the Letter of Credit
Participation of a Lender in any Letter of Credit shall be deemed to be the
amount equal to such Lender's pro rata share (determined on the basis of the
Commitment at such time) of the sum of (a) the aggregate unpaid amount of all
Drawings thereunder at such time and (b) the amount of any Contingent
Reimbursement Obligations with respect thereto at such time.
"LIBO Rate" means the rate per annum determined by the Administrative
Agent by dividing (the resulting quotient to be rounded upward to the nearest
1/100 of 1%) (a) the rate of interest (which shall be the same for each day in
such Interest Period) determined in good faith by the Administrative Agent
(which determination shall be conclusive) to be the average of the rates per
annum for deposits in Dollars offered to major money center banks in the London
interbank market at approximately 11:00 a.m., London time, two Eurodollar
Business Days prior to the first day of the applicable Interest Period for
delivery on the first day of such Interest Period in similar amounts and
maturities as the proposed LIBO Rate Loan by (b) a number equal to 1.0 minus the
Reserve Percentage. "Reserve Percentage" for any day means the percentage
(expressed as a decimal, rounded upward to the nearest 1/100 of 1%), as
determined in good faith by the Administrative Agent (which determination shall
be conclusive), which is in effect on such day as prescribed by the Board of
Governors of the Federal Reserve System representing the maximum reserve
requirement (including supplemental, marginal and emergency reserve
requirements) with respect to eurocurrency funding (currently referred to as
"Eurocurrency liabilities") of a member bank in such System. The LIBO Rate shall
be adjusted automatically as of the effective date of each change in the Reserve
Percentage.
"LIBO Rate Loan" means a Loan bearing interest at the per annum rate of
the LIBO Rate plus Applicable Margin.
"Licenses" means any and all licenses, permits, franchises, rights to
conduct business, approvals by a Governmental Authority or otherwise, consents,
qualifications, operating authority, and/or any other authorizations.
"Lien" shall mean any mortgage, deed of trust, pledge, lien, security
interest, charge or other encumbrance or security arrangement of any nature
whatsoever, including but not limited to any conditional sale or title retention
arrangement, and any assignment, deposit arrangement or lease intended as, or
having the effect of, security.
"Limitation" means a revocation, suspension, termination, impairment,
probation, limitation, non-renewal, forfeiture, declaration of ineligibility,
and/or loss of any other rights.
"Loan" shall mean any loan by the Lenders to Borrower under this
Agreement, and "Loans" shall mean all Loans made by the Lenders under this
Agreement.
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"Loan Documents" shall mean this Agreement, the Notes, the Subsidiary
Guaranties, the Security Documents, and all other agreements and instruments
extending, renewing, refinancing or refunding any indebtedness, obligation or
liability arising under any of the foregoing, in each case as the same may be
amended, modified or supplemented from time to time hereafter.
"Majority Lenders" means, as of any date, at least four Lenders
holding, in the aggregate, at least 51% of the aggregate outstanding Loans and
available Commitments. If any one Lender holds more than 35%, then Majority
Lenders shall include at least one Lender designated by the Administrative Agent
as an additional Agent under Section 8.10. If the Administrative Agent holds
less than 35% and another Lender holds more than 35%, the Administrative Agent
may count as the required "additional Agent" for purposes of determining
"Majority Lenders."
"Material Adverse Effect" shall mean: (a) a material adverse effect on
the business, operations or condition (financial or otherwise) of the Obligors
taken as a whole, (b) a material adverse effect on the ability of Obligors,
taken as a whole, to perform or comply with any of the terms and conditions of
any Loan Document, or (c) a material adverse effect on the legality, validity,
binding effect, enforceability or admissibility into evidence of any Loan
Document, or the ability of the Lender to enforce any rights or remedies under
or in connection with any Loan Document.
"Maturity Date" shall mean the fifth anniversary of the Closing Date.
"Mellon" means Mellon Bank, N.A.
"Monthly Payment Date" means the last Business Day of each month.
"Multiemployer Plan" has the meaning ascribed to such term in
ss.4001(a)(3) of ERISA.
"Non-U.S. Lender" means any Lender that is not a United States Person.
"Note" means RC Notes.
"Obligations" shall mean all indebtedness, obligations and liabilities
of any Obligor to the Administrative Agent and the Lenders from time to time
arising under or in connection with or related to or evidenced by or secured by
or under color of this Agreement, any other Loan Document, or any Interest Rate
Hedging Agreement, together with all extensions, renewals or refinancings
thereof, whether such indebtedness, obligations or liabilities are direct or
indirect, otherwise secured or unsecured, joint or several, absolute or
contingent, due or to become due, whether for payment or performance, now
existing or hereafter arising. Without limitation of the foregoing, such
indebtedness, obligations and liabilities include the principal amount of all
Loans, Letters of Credit, interest, fees, indemnities or expenses under or in
connection with this Agreement or any other Loan Document, and all extensions,
renewals and refinancings thereof, whether or not such Loans were made, or such
Letters of Credit were issued, in compliance with the terms and conditions of
this Agreement or in excess of the obligation of the Lender to lend. Obligations
shall remain Obligations notwithstanding any assignment or transfer or any
subsequent assignment or transfer of any of the Obligations or any interest
therein.
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"Obligors" means the Borrower and the Guarantors.
"Officer's Compliance Certificate" means a certificate, as of a
specified date, of the chief financial officer or controller of NCO Group in
substantially the form of Exhibit H hereto as to each of the following: (a) the
absence of any Event of Default or Default on such date, (b) the truth of the
representations and warranties herein and in the other Loan Documents as of such
date, and (c) compliance with the financial covenants set forth in Article 6.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Pension Plan" means a pension plan (as defined in ss.3(2) of ERISA)
which is subject to Part 3 of Subtitle B of Title I of ERISA or subject to
ss.412 of the Code and maintained by Borrower or any member of its Controlled
Group.
"Pension-Related Event" shall mean any of the following events or
conditions:
(a) Any action is taken by any Person (i) to terminate, or
which would result in the termination of, a Plan, either pursuant to
its terms or by operation of law (including, without limitation, any
amendment of a Plan which would result in a termination under Section
4041(e) of ERISA), or (ii) to have a trustee appointed for a Plan
pursuant to Section 4042 of ERISA;
(b) PBGC notifies any Person of its determination that an
event described in Section 4042 of ERISA has occurred with respect to a
Plan, that a Plan should be terminated, or that a trustee should be
appointed for a Plan;
(c) Any Reportable Event occurs with respect to a Plan;
(d) Any action occurs or is taken which could result in any
Obligor becoming subject to liability for a complete or partial
withdrawal by any Person from a Multiemployer Plan (including, without
limitation, seller liability incurred under Section 4204(a)(2) of
ERISA), or any Obligor or any Controlled Group Member receives from any
Person a notice or demand for payment on account of any such alleged or
asserted liability; or
(e) (i) There occurs any failure to meet the minimum funding
standard under Section 302 of ERISA or Section 412 of the Code with
respect to a Plan, or any tax return is filed showing any tax payable
under Section 4971(a) of the Code with respect to any such failure, or
any Obligor or any Controlled Group Member receives a notice of
deficiency from the Internal Revenue Service with respect to any
alleged or asserted such failure, or (ii) any request is made by any
Person for a variance from the minimum funding standard, or an
extension of the period for amortizing unfunded liabilities, with
respect to a Plan.
"Permitted Acquisition" shall mean any acquisition (by way of stock
purchase, merger, asset purchase or otherwise) by any Obligor of all of the
properties of any going concern or going line of business; provided, however,
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that (1) each such business being acquired by such Obligor must (a) have a
positive EBITDA for the immediately preceding twelve months prior to the
acquisition, after adjustments for unusual expense items and (b) be in the same
or a similar line of business as such Obligor; (2) after recasting the
Borrower's consolidated financial statements for the immediately preceding
twelve month period to include the results of operations from the target of the
acquisition, and preparing pro-forma financial statements for the immediately
succeeding twelve month period, the combined Obligor and target shall have met
the financial covenants described in Section 6.1 of this Agreement for the
immediately preceding twelve months prior to the acquisition and on a pro-forma
basis for the immediately following twelve month period after the acquisition
(such compliance to be evidenced by a Pro-Forma Covenant Compliance Certificate
in the form of Exhibit H attached hereto ("Pro-Forma Covenant Compliance
Certificate"), (3) with respect to any merger, the Obligor shall be the
surviving corporation, (4) after giving effect to the acquisition, no Event of
Default or Default shall exist, (5) the disclosure schedules shall be updated to
account for the acquisition as required by Section 5.17 and (6) the cash
consideration to be paid by such Obligor for the acquisition must not exceed
$25,000,000 in any rolling twelve month period. An acquisition meeting the
criteria set forth in this definition does not require the consent of any Lender
provided that the due diligence on such acquisition, including a review of all
acquisition documents shall be satisfactory to the Super Majority Lenders. Any
acquisition which does not meet the criteria set forth in the provisos to this
definition requires the prior written consent of the Super Majority Lenders.
"Permitted Acquisition Indebtedness" means Indebtedness incurred by an
Obligor to the seller in connection with a Permitted Acquisition that is (1)
unsecured, (2) subordinated to the Obligations as provided in the next sentence,
and (3) without financial covenants binding on any Obligor. The terms of
subordination, which at the request of the Administrative Agent shall be
embodied in a separate subordination agreement in the form of Exhibit J attached
hereto, shall prohibit the Obligor from making any payments of principal,
interest, or other sums on the Indebtedness following an Event of Default under
this Agreement; prior to an Event of Default, the Obligor may make regularly
scheduled payments of principal and interest on the Indebtedness. Despite the
foregoing, (1) the Obligors may incur up to an aggregate of $2,000,000 (based on
the original principal amount of notes outstanding at any one time) in
Indebtedness to sellers in connection with Permitted Acquisitions on which
Obligors may make regularly scheduled payments of principal and interest despite
the existence of an Event of Default (other than a bankruptcy or insolvency
default, in which case such payments will be prohibited until the Obligations
have been repaid in full) so long as such Indebtedness otherwise meets the above
requirements (except that the subordination agreement shall take the form of
Exhibit K attached hereto) and (2) the Obligors may incur up to an aggregate of
$10,000,000 (based on the original principal amount of notes outstanding at any
one time) in Indebtedness to sellers in connection with Permitted Acquisitions
on which Obligors may make regularly scheduled payments of principal and
interest until the occurrence of an Event of Default and may resume such
payments six months after the occurrence of such Event of Default (unless the
Event of Default is a bankruptcy or insolvency default, or an Event of Default
as to which the Lenders are exercising remedies; in any such case such payments
will be prohibited until the Obligations have been repaid in full) so long as
such Indebtedness otherwise meets the above requirements (except that the
subordination agreement shall take the form of Exhibit K-1 attached hereto).
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"Permitted Liens" shall have the meaning set forth in Section 6.2
hereof.
"Person" means an individual, corporation, partnership, trust,
unincorporated association, limited liability company, joint venture,
joint-stock company, Governmental Authority or any other entity.
"Plan" means any employee pension benefit plan within the meaning of
Section 3(2) of ERISA (other than a Multiemployer Plan) covered by Title IV of
ERISA by reason of Section 4021 of ERISA, of which any Obligor or any Controlled
Group Member is or has been within the preceding five years a "contributing
sponsor" within the meaning of Section 4001(a)(13) of ERISA, or which is or has
been within the preceding five years maintained for employees of any Obligor or
any Controlled Group Member.
"Prime Rate" means the interest rate per annum announced from time to
time by the Administrative Agent as its prime rate. The Prime Rate may be
greater or less than other interest rates charged by the Administrative Agent to
other customers.
"Prime Rate Loan" means any Loan bearing interest at the Prime Rate.
"Pro-Forma Covenant Compliance Certificate" has the meaning ascribed to
such term in the definition of "Permitted Acquisition."
"Prohibited Transaction" has the meaning given to such term in ss.406
of ERISA or ss.4975(c) of the Code.
"Purchase Money Indebtedness" shall mean at any time any (a)
Indebtedness incurred for the deferred purchase price in connection with a
Capital Expenditure and (b) Indebtedness for borrowed money of any Obligor which
is incurred in connection with a Permitted Acquisition, and which (i) is
unsecured, (ii) is fully and permanently subordinated, as to both principal and
interest, to any Obligations, (iii) contains no financial covenants, and (iv)
contains permanent "stand still" or forbearance provisions acceptable to the
Lender which apply upon the occurrence of an Event of Default or Default under
this Agreement.
"Quarterly Payment Dates" means the last Business Day of each December,
March, June and September.
"RC Commitment" means, with respect to any Lender, (a) the obligation
of such Lender to make Loans and participate in Letters of Credit in an amount
as set forth opposite such Lender's name under the heading "RC Commitment" on
Schedule 1.1 (as such Schedule may be amended from time to time) hereto or, in
the case of a Lender that becomes a Lender pursuant to an assignment, the amount
of the assignor's RC Commitment assigned to such Lender, in either case as the
same may be reduced from time to time pursuant to Section 1.7 above or increased
or reduced from time to time pursuant to assignments in accordance with Section
11.9 below, or (b) as the context may require, the obligation of such Lender to
make Loans in an aggregate unpaid principal amount not exceeding such amount;
and "RC Commitment" means with respect to all Lenders, the sum of their
individual RC Commitments.
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"RC Loan" has the meaning ascribed to such term in Section 1.1 of this
Agreement.
"RC Note" means each promissory note of the Borrower issued to an RC
Lender relating to such Lender's RC Loans and RC Commitments substantially in
the form of Exhibit A hereto, together with any allonges thereto, from time to
time, and any promissory note issued in substitution therefor pursuant to the
terms hereof, together with all extensions, renewals, refinancings or refundings
thereof in whole or part, in each case as the same may be amended, modified,
restated or supplemented from time to time.
"Records" of the Administrative Agent or "Administrative Agent's
Records" has the meaning given to such term in Section 8.8 hereof.
"Registered Lender" has the meaning ascribed to such term in Section
1.14 hereof.
"Registered Note" has the meaning ascribed to such term in Section 1.14
hereof.
"Regulatory Change" means any applicable law, interpretation,
directive, request or guideline (whether or not having the force of law), or any
change therein or in the administration or enforcement thereof, that becomes
effective or is implemented or first required or expected to be complied with
after the Closing Date (including any applicable law that shall have become such
as the result of any act or omission of the Borrower or any of its Affiliates,
without regard to when such applicable law shall have been enacted or
implemented), whether the same is (a) the result of an enactment by a government
or any agency or political subdivision thereof, a determination of a court or
regulatory authority or otherwise or (b) enacted, adopted, issued or proposed
before or after the Closing Date, including any such that imposes, increases or
modifies any Tax, reserve requirement, insurance charge, special deposit
requirement, assessment or capital adequacy requirement, but excluding any such
that imposes, increases or modifies any Bank Tax.
"Reorganization" has the meaning ascribed to such term in ERISA.
"Reportable Event" means (a) a reportable event described in Section
4043 of ERISA, (b) a withdrawal by a substantial employer from a Plan to which
more than one employer contributes, as referred to in Section 4063(b) of ERISA,
(c) a cessation of operations at a facility causing more than twenty percent
(20%) of Plan participants to be separated from employment, as referred to in
Section 4062(e) of ERISA, or (d) a failure to make a required installment or
other payment with respect to a Plan when due in accordance with Section 412 of
the Code or Section 302 of ERISA which causes the total unpaid balance of missed
installments and payments (including unpaid interest) to exceed $750,000.
"Responsible Officer" shall mean ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ or such other person designated by the Borrower and
reasonably acceptable to Administrative Agent.
"Security Agreement" shall have the meaning ascribed to such term in
Section 3.1(c) hereof.
"Security Documents" shall have the meaning set forth in Section 3.1(c)
hereof.
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"Solvent" means, with respect to any Person at any time, that at such
time (a) the sum of the debts and liabilities (including, without limitation,
contingent liabilities) of such Person is not greater than all of the assets of
such Person at a fair valuation, (b) the present fair salable value of the
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 has not incurred, will not incur, does not intend to
incur, and does not believe that it will incur, debts or liabilities (including,
without limitation, contingent liabilities) beyond such person's ability to pay
as such debts and liabilities mature, (d) such Person is not engaged in, and is
not about to engage in, a business or a transaction for which such person's
property constitutes or would constitute unreasonably small capital, and (e)
such Person is not otherwise insolvent as defined in, or otherwise in a
condition which could in any circumstances then or subsequently render any
transfer, conveyance, obligation or act then made, incurred or performed by it
avoidable or fraudulent pursuant to, any Law that may be applicable to such
Person pertaining to bankruptcy, insolvency or creditors' rights (including but
not limited to the Bankruptcy Code of 1978, as amended, and, to the extent
applicable to such Person, the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act, or any other applicable Law pertaining to fraudulent
conveyances or fraudulent transfers or preferences).
"Stock Payment" by any Person shall mean any dividend, distribution or
payment of any nature (whether in cash, securities, or other property) on
account of or in respect of any shares of the capital stock (or warrants,
options or rights therefor) of such Person, including but not limited to any
payment on account of the purchase, redemption, retirement, defeasance or
acquisition of any shares of the capital stock (or warrants, options or rights
therefor) of such Person, in each case regardless of whether required by the
terms of such capital stock (or warrants, options or rights) or any other
agreement or instrument.
"Subordinated Debt" means Indebtedness of an Obligor that has been
subordinated to the Obligations in writing on terms satisfactory to the
Administrative Agent.
"Subsidiary" of a Person means (i) a corporation (a) at least 50% of
the voting stock of which is at the time owned, directly or indirectly, by such
Person and (b) of which such Person, directly or indirectly, has the right to
elect a majority of the members of the board of directors either as a result of
the ownership of a majority of the voting stock of such corporation or pursuant
to a shareholders or other voting agreement or (ii) any partnership, joint
venture, limited liability company or similar entity at least 50% of the total
equity and voting interests of which (x) is at the time owned, directly or
indirectly, by such Person whether in the form of membership, general, special
or limited partnership, or otherwise and (y) such Person or any wholly owned
Subsidiary of such Person is a controlling general partner or otherwise controls
such entity.
"Super Majority Lenders" means, as of any date, at least six Lenders
holding, in the aggregate, at least 66 2/3% of the aggregate outstanding Loans
and available Commitments. If any one Lender holds more than 35%, then Super
Majority Lenders shall include at least one Lender designated by the
Administrative Agent as an additional Agent under Section 8.10. If the
Administrative Agent holds less than 35% and another Lender holds more than 35%,
the Administrative Agent may count as the required "additional Agent" for
purposes of determining "Super Majority Lenders."
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"Tax" means any federal, state, local or foreign tax assessment or
other governmental charge or levy (including any withholding tax) upon a Person
or upon its assets, revenues, income or profits.
"Third Party Claims" has the meaning set forth in Section 11.12 hereof.
"Transaction Documents" means each of the material documents as may
exist from time to time with such changes thereto as are permitted by the terms
of this Agreement.
"Type" means with respect to Loans, any of the following, each of which
shall be deemed to be a different "Type" of Loan: Prime Rate Loans, LIBO Rate
Loans having a one-month Interest Period commencing on a specified date, LIBO
Rate Loans having a two-month Interest Period commencing on a specified date,
LIBO Rate Loans having a three-month Interest Period commencing on a specified
date, and LIBO Rate Loans having a six-month Interest Period commencing on a
specified date.
"UCC" means the Uniform Commercial Code as adopted in the Commonwealth
of Pennsylvania.
"Unused Fee" has the meaning ascribed to such term in Section 1.9
hereof.
"United States Person" has the meaning ascribed to such term in Section
1.13 hereof.
"Withdrawal Liability" has the meaning given to such term in ss.4201 of
ERISA.
10.2 Construction. In this Agreement and each other Loan Document,
unless the context otherwise clearly requires,
(a) references to the plural include the singular, the
singular the plural and the part the whole;
(b) "or" has the inclusive meaning represented by the phrase
"and/or;"
(c) the terms "property" and "assets" each include all
properties and assets of any kind or nature, tangible or intangible, real,
personal or mixed, now existing or hereafter acquired;
(d) the words "hereof," "herein" and "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;
(e) the words "includes" and "including" (and similar terms)
in this Agreement or any other Loan Document mean "includes, without limitation"
and "including, without limitation," respectively whether or not stated; and
(f) references to "determination" (and similar terms) by the
Administrative Agent or any Lender include good faith estimates by the
Administrative Agent or Lender (in the case of quantitative determinations) and
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good faith beliefs by the Administrative Agent or Lender (in the case of
qualitative determinations).
No doctrine of construction of ambiguities in agreements or instruments against
the interests of the party controlling the drafting thereof shall apply to this
Agreement or any other Loan Document. The section and other headings contained
in this Agreement and in each other Loan Document, and any tables of contents
contained herein or therein, are for reference purposes only and shall not
affect the construction or interpretation of this Agreement or such other Loan
Document in any respect. Whenever this Agreement requires the delivery of
financial projections, it is understood that the projections shall be made in
good faith, consistent with the Loan Documents and based on NCO Group's
reasonable judgment as to the anticipated financial performance and results of
operations. However, any such financial projections shall not constitute a
representation or warranty that such future financial performance or results of
operations will in fact be achieved.
10.3 Accounting Principles.
(a) As used herein, "GAAP" shall mean generally accepted
accounting principles (other than as set forth herein as to consolidation) in
the United States, applied on a basis consistent with the principles used in
preparing the financial statements of NCO Group and its consolidated
Subsidiaries as of December 31, 1998 and for the fiscal year then ended. When
the word "consolidated" is used in this Agreement, it shall be used in a manner
consistent with generally accepted accounting principles in the United States
except that such principles relating to what entities shall be consolidated
shall be superseded by any terms of this Agreement which designate what entities
shall be consolidated for purposes relating hereto.
(b) Except as otherwise provided in this Agreement, all
computations and determinations as to accounting or financial matters shall be
made, and all financial statements to be delivered pursuant to this Agreement
shall be prepared, in accordance with GAAP and all accounting or financial terms
shall have the meanings ascribed to such terms by GAAP; provided that if because
of a change in GAAP after the date hereof Borrower would be required to alter a
previously utilized accounting principle, method or policy in order to remain in
compliance with GAAP, such determination shall continue to be made in accordance
with Borrower's previous accounting principles, methods and policies unless
otherwise agreed by the Administrative Agent (on behalf of the Lenders).
ARTICLE XI
MISCELLANEOUS
11.1 Notices. Unless otherwise expressly provided under this Agreement
all notices, requests, demands, directions and other communications
(collectively "notices") given to or made upon any party under the provisions of
this Agreement (and unless otherwise specified, in each other Loan Document)
shall be by telephone (immediately confirmed in writing) or in writing
(including facsimile communication) and if in writing shall be delivered by
hand, nationally recognized overnight courier or U.S. mail or sent by facsimile
to the respective parties at the addresses and numbers set forth under their
respective names on the signature pages of this Agreement or in accordance with
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any subsequent unrevoked written direction from any party to the others. All
notices shall, except as otherwise expressly provided in this Agreement, be
effective (a) in the case of facsimile, when received, (b) in the case of
hand-delivered notice, when hand delivered, (c) in the case of telephone, when
telephoned, provided, however, that in order to be effective unless otherwise
expressly provided, telephonic notices must be confirmed in writing no later
than the next day by letter or facsimile, (d) if given by U.S. mail, the day
after such communication is deposited in the mails with overnight first class
postage prepaid, return receipt requested, and (e) if given by any other means
(including by air courier), when delivered; provided, further, that notices to
the Administrative Agent shall not be effective until received. Any Lender
giving any notice to the Borrower shall simultaneously send a copy of such
notice to the Administrative Agent, and the Administrative Agent shall promptly
notify the other Lenders of the receipt by it of any such notice. Except as
otherwise provided in this Agreement, in the event of a discrepancy between any
telephonic or written notice, the written notice shall control.
11.2 Prior Understandings; Entire Agreement. This Agreement and the
other Loan Documents supersede all prior and contemporaneous understandings and
agreements, whether written or oral, among the parties hereto relating to the
transactions provided for herein and therein except as expressly provided
otherwise (e.g., certain fee agreements and fee arrangements with the
Administrative Agent). This Agreement and the other Loan Documents represent the
entire agreement between the parties to this Agreement with respect to the
transactions contemplated hereby or thereby and, except as expressly provided
herein or in the other Loan Documents, shall not be affected by reference to any
other documents.
11.3 Severability. Every provision of this Agreement and each of the
other Loan Documents is intended to be severable, and if any term or provision
of this Agreement or any of the other Loan Documents shall be invalid, illegal
or unenforceable for any reason, the validity, legality and enforceability of
the remaining provisions shall not be affected or impaired thereby, and any
invalidity, illegality or unenforceability in any jurisdiction shall not affect
the validity, legality or enforceability of any such term or provision in any
other jurisdiction. If any provision of this Agreement shall be held invalid or
unenforceable in whole or in part in any jurisdiction, this Agreement shall, as
to such jurisdiction, be deemed amended to modify or delete, as necessary, the
offending provision or provisions and to alter the bounds thereof in order to
render it or them valid and enforceable to the maximum extent permitted by
applicable Law, without in any manner affecting the validity or enforceability
of such provision or provisions in any other jurisdiction or the remaining
provisions hereof in any jurisdiction.
11.4 Descriptive Headings. The descriptive headings of the several
sections of this Agreement are inserted for convenience only and shall not
affect the meaning or construction of any of the provisions of this Agreement.
11.5 Governing Law. This Agreement and the rights and obligations of
the parties under this Agreement and under the other Loan Documents shall be
construed in accordance with and shall be governed by the laws of the
Commonwealth of Pennsylvania.
11.6 Non-Merger Of Remedies. The covenants and obligations of the
Borrower and the rights and remedies of the Administrative Agent and other
Lenders hereunder and under the other Loan Documents shall not merge with or be
extinguished by the entry of a judgment hereunder or thereunder, and such
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covenants, obligations, rights and remedies shall survive any entry of a
judgment until payment in full of the Obligations and termination of the
Commitment. All obligations under the Loan Documents shall continue to apply
with respect to and during the collection of amounts due under the Loan
Documents or the proof and allowability of any claim arising under this
Agreement or any other Loan Document, whether in bankruptcy or receivership
proceedings or otherwise, and in any workout, restructuring or in connection
with the protection, preservation, exercise or enforcement of any of the terms
of this Agreement or of any rights under this Agreement or under any other Loan
Document or in connection with any foreclosure, collection or bankruptcy
proceedings. Without limiting the generality of the foregoing, post-judgment
interest rate shall be the interest rate provided in paragraph (d) of Section
1.8 (Default Rate) above.
11.7 No Implied Waiver; Cumulative Remedies. No course of dealing and
no delay or failure of the Administrative Agent or any other Lender in
exercising any right, power or privilege under this Agreement or any other Loan
Document shall affect any other or future exercise thereof or exercise of any
other right, power or privilege; nor shall any single or partial exercise of any
such right, power or privilege or any abandonment or discontinuance of steps to
enforce such a right, power or privilege preclude any further exercise thereof
or of any other right, power or privilege. The rights and remedies of the
Administrative Agent and the other Lenders under this Agreement and any other
Loan Document are cumulative and not exclusive of any rights or remedies which
the Administrative Agent or any other Lender would otherwise have hereunder or
thereunder, at law, in equity or otherwise. Any waiver of a specific default
made in accordance with Section 11.8 below shall be effective only as to such
specific default and shall not apply to any subsequent default.
11.8 Amendments; Waivers.
(a) Any term, covenant, agreement or condition of any Loan
Document to which the Lenders (or the Administrative Agent) are party may be
amended, and any right under the Loan Documents may be waived, if, but only if,
such amendment or waiver is in writing and is signed by the Majority Lenders or,
as to any term requiring the consent or approval of the Super Majority Lenders,
by the Super Majority Lenders (or by the Administrative Agent at the direction
of the Majority Lenders or Super Majority Lenders, as appropriate); provided,
however, if the rights and duties of the Administrative Agent are affected
thereby, such amendment or waiver must be executed by the Administrative Agent;
and provided, always that no such amendment or waiver shall be effective unless
in writing and signed by all Lenders, if it would
(i) amend the definition of "Majority Lenders" or
"Super Majority Lenders" or reduce the number of Lenders required for the
approval of any matter hereunder;
(ii) release any Obligor from its Obligations or
modify the joint and several nature of the Obligors' Obligations;
(iii) change the principal amount of the Loans;
(iv) change the maturity of any Loan or the time of
any scheduled principal payment of any Loan or any Reduction Date;
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(v) decrease the rates of interest or amount of fees
payable hereunder or extend the time for payment of interest or fees hereunder;
(vi) release any Collateral, except in connection
with a disposition of stock or assets permitted under this Agreement; or
(vii) amend this Section 11.8.
In addition, the Administrative Agent may, without the consent
of any Person, release Borrower as a court of competent jurisdiction may direct.
For purposes of determining whether "all Lenders", "Super
Majority Lenders", "the Majority Lenders" or "any Lender" has consented to any
amendment or waiver, no effect shall be given to the determination of any Lender
who has lost its right to vote pursuant to Sections 1.3(c) or 1.6(e).
Further, the Administrative Agent and the Lenders may amend or
modify the provisions of Article 8 hereof (except for Section 8.9 (Successor
Administrative Agent) and Article 11 hereof) without the need for any consent or
approval from the Borrower, it being acknowledged that the Borrower is not a
third party beneficiary of the provisions of said Article 9 (except for Section
9.9 (Successor Administrative Agent)) and (y) without the consent of any
Lenders, the Administrative Agent may enter into amendments and modifications to
this Agreement and the other Loan Documents as necessary or desirable to cure
any ambiguities herein or therein or to add additional Obligors or add
collateral.
11.9 Successors And Assigns
(a) Assignments by the Borrower. Without the prior written
consent of all of the Lenders, no Obligor may assign any of its rights or
delegate any of its duties or obligations under this Agreement or any other Loan
Document.
(b) Participations. Any Lender may sell participations to one
or more Eligible Institutions of all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a portion of its
Commitment); provided, however, that, with respect to any Lender, (i) such
Lender's obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties to this Agreement
for the performance of such obligations, (iii) all amounts payable by the
Borrower under this Agreement shall be determined as if such transferor Lender
had not sold such participation and no participant shall be entitled to receive
any greater amount pursuant to this Agreement than the transferor Lender would
have been entitled to receive in respect of the amount of the participation
transferred by such transferor Lender to such participant had no such transfer
occurred, (iv) such participant shall agree to be bound by the provisions of
this Agreement and the other Loan Documents, and (v) the Borrower, the
Administrative Agent and the other Lenders shall continue to deal solely and
directly with such transferor Lender in connection with such Lender's rights and
obligations under this Agreement, and such Lender shall retain the sole rights
and responsibility vis-a-vis the Borrower to enforce the obligations of the
Borrower relating to the Loans including the right to approve any amendment,
modification or waiver of any provision of this Agreement (except that such
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Lender may give its participants the right to direct such Lender to approve or
disapprove any amendment, modification or waiver which would require such
Lender's consent under clause (a) (b), (c), of the preceding Section 11.8).
(c) Assignments by Lenders. Each Lender may assign to one or
more Eligible Institutions all or a portion of its interest, rights and
obligations under this Agreement (including all or a portion of its Commitment)
and the other Loan Documents; provided, however, that with respect to any
assignment, (i) the aggregate principal amount of the interest, rights and
obligations so assigned to any assignee may not be less than $5,000,000; (ii)
unless the assignee is (prior to the effective time of the assignment) an
existing Lender or an Affiliate of an existing Lender, the Administrative Agent
and, if no Event of Default has occurred and is continuing, NCO Group must give
its prior written consent to such assignment (which consent shall not be
unreasonably withheld), and (iii) the parties to each such assignment shall
execute and deliver to the Administrative Agent and, unless an Event of Default
has occurred and is continuing, NCO Group, for their acceptance, an Assignment
and Acceptance Agreement in substantially the form attached hereto as Exhibit L
(an "Assignment and Acceptance Agreement"), together with (A) any Note subject
to such assignment, and (B) a processing and recordation fee of $3,500.00. If
the assignee is not incorporated under the laws of the United States of America
or a state thereof, it shall, prior to the first date on which interest or fees
are payable hereunder for its account, deliver to NCO Group and the
Administrative Agent certification as to exemption from deduction or withholding
of any United States federal income taxes.
(d) Procedures Respecting Assignment. Upon their receipt of an
Assignment and Acceptance executed by the assignor and the assignee, subject to
the conditions set forth in the preceding paragraph (c), the Administrative
Agent and (unless an Event of Default shall have occurred and be continuing) NCO
Group shall accept such Assignment and Acceptance. Within thirty (30) days after
such Assignment and Acceptance is signed and accepted by all parties and made
effective, the Borrower, at its own expense, shall execute and deliver to the
Administrative Agent new Notes in exchange for the surrendered Notes, each to
the order of such assignee in an amount equal to its portion of the Commitment
and Loans, assigned to it pursuant to such Assignment and Acceptance and new
Notes to the order of the assigning Lender in an amount equal to the Commitment
and Loans retained by it. Such Notes shall be in an aggregate principal amount
equal to the aggregate principal amount of such surrendered Notes, shall be
dated the date of such surrendered Notes (each assignee shall confirm in the
Assignment and Acceptance that, notwithstanding the date of the new Notes made
in favor of such assignee, such assignee shall have no right to, or interest in,
any fees or interest which shall have accrued on the Loans prior to the
effective date of the Assignment and Acceptance). Cancelled or replaced Notes
shall be returned to the Borrower upon the execution of such new Notes.
(e) Assignments to Federal Reserve Bank. Notwithstanding any
of the terms of this Section 11.9, without the consent of the Administrative
Agent and the Borrower, any Lender may assign all or any portion of its rights
to payments in connection with this Agreement to a Federal Reserve Bank as
collateral in accordance with Regulation A of the Board of Governors of the
Federal Reserve System. Such assignment shall not affect any other rights or any
obligations of the assigning Lender
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11.10 Counterparts; Photocopied Or Telecopied Signature Pages. Any Loan
Document may be executed in one or more counterparts, each of which shall
constitute an original, but all of which together shall constitute one and the
same instrument. Delivery of a photocopy or telecopy of an executed counterpart
of a signature page to any Loan Document shall be as effective as delivery of a
manually executed counterpart of such Loan Document.
11.11 Maximum Lawful Interest Rate. Notwithstanding any provision
contained in this Agreement or the Notes or any other Loan Document, the total
liability of the Borrower for payment of interest pursuant to this Agreement and
the Notes shall not exceed the maximum amount of such interest permitted by Law
to be charged, collected, or received from the Borrower, and if any payment by
the Borrower includes interest in excess of such a maximum amount, each Lender
shall apply such excess to the reduction of the unpaid principal amount due
pursuant to this Agreement and the Notes, or if none is due, to the other
Obligations, if any, and then such excess shall be refunded to NCO Group.
11.12 Indemnification.
(a) Whether or not any fundings are made under this Agreement,
the Borrower shall unconditionally upon demand, pay or reimburse the
Administrative Agent and Lenders for, and indemnify and save the Administrative
Agent, the Lenders and their respective Affiliates, officers, directors,
employees, agents, attorneys, shareholders and consultants (collectively,
"Indemnitees") harmless from and against, any and all losses, liabilities,
claims, damages, expenses, obligations, penalties, actions, judgments, suits,
costs or disbursements of any kind or nature whatsoever (including the
reasonable fees and disbursements of counsel for such Indemnitee in connection
with any investigative, administrative or judicial proceeding commenced or
threatened, whether or not such Indemnitee shall be designated a party thereto)
that may at any time be imposed on, asserted against or incurred by such
Indemnitee as a result of, or arising out of, or in any way related to or by
reason of, this Agreement or any other Loan Document, any acquisition or
transaction from time to time contemplated hereby or by any other Loan Document,
or any transaction actually or proposed to be financed in whole or in part or
directly or indirectly with the proceeds of any Loan, any transaction
contemplated by the Transaction Documents but excluding any such losses,
liabilities, claims, damages, expenses, obligations, penalties, actions,
judgments, suits, costs or disbursements that the Borrower proves were the
result solely of the gross negligence or willful misconduct of such
Indemnitee(s), as finally determined by a court of competent jurisdiction. If
and to the extent that the foregoing obligations of the Borrower under this
paragraph (a), or any other indemnification obligation of the Borrower hereunder
or under any other Loan Document are unenforceable for any reason, the Borrower
hereby agrees to make the maximum contribution to the payment and satisfaction
of such obligations which is permissible under applicable Law.
(b) Without limiting the generality of the foregoing, the
Borrower hereby indemnifies and agrees to defend and hold harmless each
Indemnitee, from and against any and all claims, actions, causes of action,
liabilities, penalties, fines, damages, judgments, losses, suits, expenses,
legal or administrative proceedings, interest, costs and expenses (including
court costs and reasonable attorneys', consultants' and experts' fees) arising
out of or in any way relating to: (i) the use, handling, management, production,
treatment, processing, storage, transfer, transportation, disposal, release or
threat of release of any Environmental Concern Material by or on behalf of, any
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Obligor or any of its Environmental Affiliates; (ii) the presence of
Environmental Concern Materials on, about, beneath or arising from any premises
owned or occupied by Borrower or any of its Environmental Affiliates (herein
collectively, the "Premises"); (iii) the failure of Borrower or Environmental
Affiliate of Borrower or any occupant of any Premises to comply with the
Environmental Laws; (iv) any Obligor's breach of any of the representations,
warranties and covenants contained herein or in any Loan Documents; (v)
Regulatory Actions (as hereinafter defined) and Third Party Claims (as
hereinafter defined); or (vi) the imposition or recording of a Lien against any
Premises in connection with any release at, on or from any Premises or any
activities undertaken on or occurring at any Premises, or arising from such
Premises or pursuant to any Environmental Law. The Borrower's indemnity and
defense obligations under this section shall include, whether foreseeable or
unforeseeable, any and all costs related to any remedial action. "Regulatory
Action" means any notice of violation, citation, complaint, request for
information, order, directive, compliance schedule, notice of claim, consent
decree, action, litigation or proceeding brought or instituted by any
governmental authority under or in connection with any Environmental Law
involving any Obligor or any occupant of any of the Premises or involving any of
the Premises or any activities undertaken on or occurring at any Premises.
"Third Party Claims" means claims by a party (other than a party to this
Agreement and other than Regulatory Actions) based on negligence, trespass,
strict liability, nuisance, toxic tort or detriment to human health or welfare
due to Environmental Concern Materials on, about, beneath or arising from any
Premises or in any way related to any alleged violation of any Environmental
Laws or any activities undertaken on or occurring at any Premises.
(c) The indemnities contained herein shall survive repayment
of the Obligations, termination of the Commitment and satisfaction, release, and
discharge of the Loan Documents, whether through full payment of the Loans,
foreclosure, deed in lieu of foreclosure or otherwise.
(d) The foregoing amounts are in addition to any other amounts
which may be due and payable to the Administrative Agent and/or the Lenders
under this Agreement. A certification by the Administrative Agent or a Lender
hereunder of the amount of liabilities, losses, costs, expenses, claims and/or
charges shall be conclusive, absent manifest error.
11.13 Expenses.
Whether or not there shall be any funding hereunder, the
Borrower agrees to pay promptly or cause to be paid promptly and to hold
harmless
(i) the Administrative Agent (and after an Event of
Default, and for the period in which the same shall continue, each Lender)
against liability for the payment of all reasonable out-of-pocket costs and
expenses (including but not limited to reasonable fees and expenses of counsel,
including local counsel, auditors, consulting engineers, appraisers, and all
other professional, accounting, evaluation and consulting costs) incurred by it
from time to time arising from or relating to (1) the negotiation, preparation,
execution and delivery of this Agreement and the other Loan Documents, (2) the
syndication of the credit facilities this Agreement establishes, (3)the
administration and performance of this Agreement and the other Loan Documents,
and (4) any requested amendments, modifications, supplements, waivers or
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consents (whether or not ultimately entered into or granted) to this Agreement
or any other Loan Document;
(ii) the Administrative Agent (and, with respect to
clause (2) of this paragraph (ii) after an Event of Default, and for the period
in which the same shall continue, each Lender) against liability for the payment
of all reasonable out-of-pocket costs and expenses (including but not limited to
reasonable fees and expenses of counsel, including local counsel, auditors,
consulting engineers, appraisers, and all other professional, accounting,
evaluation and consulting costs) incurred by it from time to time arising from
or relating to the enforcement or preservation of rights under, or
administration of, or syndication of, this Agreement or any other Loan Document
(including but not limited to any such costs or expenses arising from or
relating to (1) collection or enforcement of an outstanding Loan, Obligation,
and (2) any litigation, proceeding, dispute, work-out, restructuring or
rescheduling related in any way to this Agreement or the other Loan Documents);
and
(iii) each Lender against liability for all stamp,
document, transfer, recording, filing, registration, search, sales and excise
fees and taxes and all similar impositions now or hereafter determined by any
Lender to be payable in connection with this Agreement or any other Loan
Documents.
11.14 Maximum Amount Of Joint And Several Liability. To the extent that
applicable Law otherwise would render the full amount of the joint and several
obligations of any Subsidiary of NCO Group under the Loan Documents invalid or
unenforceable, such Obligors' obligations hereunder and under the other Loan
Documents shall be limited to the maximum amount which does not result in such
invalidity or unenforceability, provided, however, that each Obligor's
obligations under the Loan Documents shall be presumptively valid and
enforceable to their fullest extent in accordance with the terms hereof or
thereof, as if this Section 11.14 were not a part of this Agreement.
11.15 Authorization Of NCO Group By Other Obligors.
(a) Each of the Obligors has irrevocably authorized NCO Group
to give notices, make requests, make payments, receive payments and notices,
give receipts and execute agreements, make agreements or take any other action
whatever on behalf of all Obligors under and with respect to any Loan Document
and each Obligor has agreed to be bound thereby. This authorization has been
coupled with an interest and shall be irrevocable, and the Administrative Agent
and each Lender may rely on any notice, request, information supplied by NCO
Group and every document executed by NCO Group, agreement made by NCO Group or
other action taken by NCO Group in respect of the Obligors or any thereof as if
the same were supplied, made or taken by any or all Obligors. Without limiting
the generality of the foregoing, the failure of one or more Obligor to join in
the execution of any writing in connection herewith shall not, unless the
context clearly requires, relieve any such Obligor from obligations in respect
of such writing.
(b) The Borrower acknowledges that the credit provided
hereunder is on terms more favorable than any Obligor acting alone would receive
and that each Obligor benefits indirectly from all Loans and Letters of Credit
hereunder. Borrower and, subject only to the terms of the preceding paragraph
(a), each Guarantor, in accordance with the terms of its respective Subsidiary
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Guaranty, shall be liable for all Obligations, regardless of, inter alia, which
Obligor benefitted from the proceeds of a particular Loan.
11.16 Certain Waivers By Borrower. Borrower hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Obligations and any requirement that any Lender exhaust any right or take any
action against any Obligor or any other Person or any collateral or other direct
or indirect security for any of the Obligations. Without limiting the generality
of the foregoing, Borrower acknowledges and agrees that the Administrative Agent
or other Lender may commence an action against any Obligor whether or not any
action is brought against any other Obligor or against any collateral and it
shall be no defense to any action brought against any Obligor that the Lenders
have failed to bring an action against any other Obligor or any Collateral.
11.17 Set-Off. The Borrower hereby agrees that, to the fullest extent
permitted by Law, if any Loan shall be due and payable (by acceleration or
otherwise), each Lender shall have the right, without notice to any Obligor, to
set-off against and to appropriate and apply to such Loan any indebtedness,
liability or obligation of any nature owing to any Obligor by such Lender,
including but not limited to all deposits now or hereafter maintained by any
Obligor with such Lender but not including any escrow account maintained by any
Obligor. Such right shall exist whether or not such Lender or any other Person
shall have given notice or made any demand to any Obligor or any other Person.
The Borrower hereby agrees that, to the fullest extent permitted by Law, any
participant and any Affiliate of any Lender or any participant shall have the
same rights of set-off as a Lender as provided in this Section 11.17. The rights
provided by this Section 11.17 are in addition to all other rights of set-off
and banker's lien and all other rights and remedies which any Lender (or any
such participant, or Affiliate) may otherwise have under this Agreement, any
other Loan Document, at law or in equity, or otherwise.
11.18 Sharing Of Collections. The Lenders hereby agree among themselves
that if any Lender shall receive (by voluntary payment, realization upon
security, charging of accounts, set-off or from any other source) any amount on
account of the Obligations in greater proportion than any such amount received
by any other Lender (based on the relative amount of each such Lender's interest
in the Obligations), then the Lender receiving such proportionately greater
payment shall notify each other Lender and the Administrative Agent of such
receipt, and equitable adjustment will be made in the manner stated in this
Section 11.18 so that, in effect, all such excess amounts will be shared ratably
among all of the Lenders. The Lender receiving such excess amount shall purchase
(which it shall be deemed to have done simultaneously upon the receipt of such
excess amount) for cash from the other Lenders a participation in the applicable
Obligations owed to such other Lenders in such amount as shall result in a
ratable sharing by all Lenders of such excess amount (and to such extent the
receiving Lender shall be a participant). If all or any portion of such excess
amount is thereafter recovered from the Lender making such purchase, such
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, together with interest or other amounts, if any, required by Law
to be paid by the Lender making such purchase. The Borrower hereby consents to
and confirms the foregoing arrangements. Each participant shall be bound by this
Section 11.18 as fully as if it were a Lender hereunder.
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11.19 Other Loan Documents. Each Lender acknowledges that on signing
this Agreement it is bound by the terms of the Loan Documents.
11.20 Certain Borrower Acknowledgements. Each Borrower hereby
acknowledges that neither the Administrative Agent nor any other Lender has any
fiduciary relationship with, or any fiduciary duty to any Borrower arising out
of or in connection with this Agreement or any of the other Loan Documents and
the relationship between the Administrative Agent and the other Lenders, on the
one hand, and the Borrower, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor.
11.21 Consent To Jurisdiction, Service And Venue; Waiver Of Jury Trial;
Damages.
(a) Consent to Jurisdiction, Service and Venue. For the
purpose of enforcing payment and performance of the Loan Documents, including,
any payment under the Notes and performance of other obligations under the Loan
Documents, or in any other matter relating to, or arising out of, the Loan
Documents, Borrower hereby consents to the jurisdiction and venue of the courts
of the Commonwealth of Pennsylvania or of any federal court located in such
state, waives personal service of any and all process upon it and consents that
all such service of process be made by certified or registered mail directed to
NCO Group at the address provided for in Section 11.1 and service so made shall
be deemed to be completed upon actual receipt or execution of a receipt by any
Person at such address. Borrower hereby waives the right to contest the
jurisdiction and venue of the courts located in the Commonwealth of Pennsylvania
on the ground of inconvenience or otherwise and, further, waives any right to
bring any action or proceeding against (a) the Administrative Agent in any court
outside the Commonwealth of Pennsylvania, or (b) any other Lender other than in
a state within the United States designated by such Lender. The provisions of
this Section 11.21 shall not limit or otherwise affect the right of the
Administrative Agent or any other Lender to institute and conduct an action in
any other appropriate manner, jurisdiction or court.
(b) WAIVER OF JURY TRIAL; DAMAGES. NEITHER ANY LENDER NOR
BORROWER, NOR ANY ASSIGNEE, SUCCESSOR, HEIR OR PERSONAL REPRESENTATIVE OF THE
FOREGOING SHALL SEEK A JURY TRIAL IN ANY PROCEEDING BASED UPON OR ARISING OUT OF
THIS AGREEMENT, OR ANY OTHER LOAN DOCUMENT, OR INVOLVING ANY COLLATERAL OR ANY
GUARANTY RELATING TO THE INDEBTEDNESS HEREUNDER OR THE RELATIONSHIP BETWEEN OR
AMONG SUCH PERSONS OR ANY OF THEM. NO SUCH PERSON WILL SEEK TO CONSOLIDATE ANY
SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT
BEEN WAIVED. EXCEPT AS PROHIBITED BY LAW, EACH PARTY TO THIS AGREEMENT WAIVES
ANY RIGHTS IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO IN THIS
SECTION 11.21 ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY
DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. EACH PARTY TO THIS
AGREEMENT (I) CERTIFIES THAT NEITHER THE ADMINISTRATIVE AGENT NOR ANY LENDER NOR
ANY REPRESENTATIVE, OR ATTORNEY OF THE ADMINISTRATIVE AGENT OR ANY LENDER HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE ADMINISTRATIVE AGENT OR SUCH
LENDER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVERS AND (II) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS
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AGREEMENT AND EACH OTHER LOAN DOCUMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS PARAGRAPH (B) OF SECTION 11.21. THE
PROVISIONS OF THIS SECTION 11.21 HAVE BEEN FULLY DISCLOSED TO THE PARTIES AND
THE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. NO PARTY HAS IN ANY WAY AGREED
WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF THIS SECTION 11.21
WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
11.22 Most Favored Borrower. Notwithstanding anything in this Agreement
to the contrary, Borrower is required to pay taxes, charges and other amounts to
Lender(s) and/or Administrative Agent under Sections 1.13, 2.2, 2.3 and 2.4 only
if, and to the extent, such Lender(s) and/or Administrative Agent charge
similarly situated customers similar amounts under similar circumstances.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto, by their officers
thereunto duly authorized, have executed and delivered this Agreement as of the
date first above written.
NCO GROUP, INC.
By_________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
as President and Chief Executive Officer
[Corporate Seal]
Address for Notices to Borrower:
--------------------------------
c/o NCO Group, Inc.
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▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to: BLANK ROME ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
[Signature Page to Fifth Amended & Restated Credit Agreement]
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