1
Exhibit 10.8
CREDIT AGREEMENT
Dated as of
September 15, 1999
among
MEMBERWORKS INCORPORATED
THE LENDERS PARTIES HERETO,
and
▇▇▇▇▇ BROTHERS ▇▇▇▇▇▇▇▇ & CO.,
as Agent
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TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS.................................................................................... 1
1.1 Defined Terms......................................................................... 1
1.2 Other Definitional Provisions......................................................... 12
1.3 Accounting Principles................................................................. 12
SECTION 2. CREDIT FACILITY................................................................................ 12
2.1 Loans................................................................................. 13
2.2 Manner of Borrowing................................................................... 13
2.3 Disbursement of Loans................................................................. 13
2.4 Notes................................................................................. 13
2.5 Repayment of Principal; Optional Prepayments.......................................... 14
2.6 Payment of Interest................................................................... 15
2.7 Conversion or Continuation of Loans................................................... 16
2.8 Extension of Final Maturity Date...................................................... 16
2.9 Computation of Interest and Fees...................................................... 16
2.10 Capital Adequacy...................................................................... 17
2.11 Increased Costs....................................................................... 18
2.12 Illegality............................................................................ 19
SECTION 3. FEES; PAYMENTS................................................................................. 19
3.1 Fees.................................................................................. 19
3.2 Pro Rata Treatment and Payments....................................................... 20
3.3 Taxes................................................................................. 20
3.4 Assumed Payments...................................................................... 21
SECTION 4. CONDITIONS PRECEDENT........................................................................... 21
4.1 Conditions to Effectiveness........................................................... 21
4.2 Conditions to Each Extension of Credit................................................ 23
SECTION 5. REPRESENTATIONS AND WARRANTIES................................................................. 24
5.1 Financial Condition................................................................... 24
5.2 No Change............................................................................. 25
5.3 Corporate Existence................................................................... 25
5.4 Corporate Power; Authorization........................................................ 26
5.5 Binding Effect........................................................................ 26
5.6 Consents; Non-Contravention........................................................... 26
5.7 No Material Litigation................................................................ 27
5.8 No Default............................................................................ 27
5.9 Ownership of Property; Liens.......................................................... 27
5.10 No Burdensome Restrictions............................................................ 27
5.11 Taxes................................................................................. 28
5.12 Margin Regulations.................................................................... 28
5.13 Investment Company Act................................................................ 28
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5.14 Compliance with ERISA................................................................. 28
5.15 Environmental Matters................................................................. 29
5.16 Disclosure............................................................................ 30
5.17 Collateral............................................................................ 30
5.18 Employment Agreements................................................................. 30
5.19 Dividends............................................................................. 30
5.20 Year 2000............................................................................. 30
5.21 Use of Proceeds....................................................................... 31
SECTION 6. AFFIRMATIVE COVENANTS.......................................................................... 31
6.1 Financial Statements.................................................................. 31
6.2 Certificates; Other Information....................................................... 32
6.3 Compliance with Laws.................................................................. 33
6.4 Conduct of Business and Maintenance of Existence...................................... 33
6.5 Maintenance of Property; Insurance.................................................... 33
6.6 Inspection of Property; Books and Records; Discussions................................ 34
6.7 Notice of Certain Events.............................................................. 34
6.8 Payment of Taxes and Claims........................................................... 36
6.9 Security.............................................................................. 36
6.10 Use of Proceeds....................................................................... 37
6.11 Further Assurances.................................................................... 37
SECTION 7. NEGATIVE COVENANTS............................................................................. 37
7.1 Negative Pledge....................................................................... 37
7.2 Merger................................................................................ 38
7.3 Sale of Assets........................................................................ 38
7.4 Loans and Investments................................................................. 39
7.5 Restricted Payments................................................................... 39
7.6 Transactions with Affiliates.......................................................... 39
7.7 Indebtedness.......................................................................... 39
7.8 Fiscal Year........................................................................... 40
7.9 Amendment of Certain Documents........................................................ 40
7.10 Operating Leases...................................................................... 40
7.11 Debt Coverage Ratio................................................................... 40
7.12 Fixed Charge Coverage Ratio........................................................... 40
7.13 ERISA................................................................................. 40
7.14 Acquisitions.......................................................................... 41
SECTION 8. EVENTS OF DEFAULT.............................................................................. 41
8.1 Events of Default..................................................................... 41
8.2 Remedies.............................................................................. 44
8.3 Set-Off............................................................................... 44
8.4 Default Interest...................................................................... 44
SECTION 9. THE AGENT AND THE COLLATERAL AGENT............................................................. 45
9.1 Appointment........................................................................... 45
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9.2 Delegation of Duties.................................................................. 45
9.3 Exculpatory Provisions................................................................ 45
9.4 Reliance by Agent and Collateral Agent................................................ 46
9.5 Notice of Failure to Perform.......................................................... 46
9.6 Credit Decision....................................................................... 47
9.7 Indemnification....................................................................... 47
9.8 Individual Capacity................................................................... 48
9.9 Successor Agents...................................................................... 48
SECTION 10. GENERAL PROVISIONS............................................................................. 49
10.1 Amendments and Waivers................................................................ 49
10.2 Notices............................................................................... 49
10.3 No Waiver; Cumulative Remedies........................................................ 51
10.4 Survival of Representations and Warranties............................................ 51
10.5 Payment of Expenses and Taxes......................................................... 51
10.6 Benefit of Agreement; Participations; Assignments..................................... 52
10.7 Sharing of Payments................................................................... 53
10.8 Counterparts.......................................................................... 53
10.9 Headings.............................................................................. 54
10.10 Obligations Several................................................................... 54
10.11 Governing Law......................................................................... 54
10.12 Submission to Jurisdiction............................................................ 54
10.13 Waiver of Jury Trial.................................................................. 54
10.14 Severability.......................................................................... 55
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SCHEDULES
Schedule 1 - List of Lending Offices
Schedule 4.1 - List of Leased Premises
Schedule 5.3 - Foreign Qualifications
Schedule 5.7 - Material Litigation
Schedule 5.9 - Liens
Schedule 5.18 - List of Employment Agreements
EXHIBITS
A - Form of Note
B-1 - Form of Notice of Borrowing
B-2 - Form of Notice of Continuation or Conversion
C - Form of Security Agreement
D - Form of Subsidiary Guaranty
E - Form of Subsidiary Security Agreement
F - Form of Assignment and Assumption Agreement
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CREDIT AGREEMENT dated as of September 15, 1999 among MEMBERWORKS
INCORPORATED, a Delaware corporation (the "Company"), the lenders parties hereto
(each a "Lender") and, collectively, the "Lenders"), and ▇▇▇▇▇ BROTHERS ▇▇▇▇▇▇▇▇
& CO., as agent for the Lenders (in such capacity, the "Agent").
W I T N E S S E T H :
WHEREAS, the Company has requested that the Lenders extend it a
revolving credit facility for working capital and general corporate purposes and
for the purchase of the Company's common stock; and
WHEREAS, the Lenders are willing to provide such financing on the terms
and conditions specified herein;
NOW, THEREFORE, in consideration of the premises and agreements herein
contained, the parties hereto agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms shall
have the following meanings:
"Affiliate" shall mean as to any Person, (a) any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person or (b) any Person who is a director or officer of (i)
such Person or (ii) any Person described in clause (a) above.
"Agreement" shall mean this Credit Agreement, as amended, restated,
supplemented or otherwise modified from time to time.
"Applicable Interest Rate" means for any Loan, the Base Rate or
Eurodollar Rate for such Loan, plus in each case the Applicable Margin.
"Applicable Margin" means:
(a) with respect to Base Rate Loans, zero percent per annum;
(b) with respect to Eurodollar Rate Loans, the applicable rate per
annum set forth in the schedule below:
Applicable Margin
-----------------
Level I Borrowing 0.75%
Level II Borrowing 1.25%
Level III Borrowing 1.50%
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"Assessment Rate" means, at any time, the average of the rates (rounded
upwards, if necessary, to the nearest 1/100 of 1%) then charged by the Federal
Deposit Insurance Corporation (or any successor) to any Lender for deposit
insurance for Dollar time deposits with such Lender as determined by the Lender.
"Base Rate" shall mean, on any day, the higher of (i) the rate of
interest established by ▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ & Co. as its base commercial
lending rate for such day and (ii) the Federal Funds Rate for such day plus 0.5%
per annum. The interest rate of each Base Rate Loan shall change on the date of
any change in the Base Rate.
"Base Rate Loan" shall mean a Loan which bears interest at the Base
Rate, plus the Applicable Margin.
"Borrowing" shall mean a borrowing hereunder consisting of Loans made
at the same time by the Lenders to the Company pursuant to Section 2.
"Business Day" shall mean a day on which commercial banks in New York,
New York are not authorized or required by law or executive order to remain
closed except that, with respect to Borrowings, notices, determinations and
payments with respect to Eurodollar Rate Loans, such day shall be a "Business
Day" only if it is also a day for trading by and between banks in the London
interbank Eurodollar market.
"Capitalized Lease" shall mean, as to any Person, (a) any lease of
property, real or personal, if the then present value of the minimum rental
commitment thereunder should, in accordance with GAAP, be capitalized on a
balance sheet of such Person and (b) any other such lease the obligations under
which are capitalized on the balance sheet of such Person.
"CERCLA" shall have the meaning given to such term in Subsection 5.15.
"Closing Date" shall mean September 15, 1999.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" shall mean any property in which the Collateral Agent, for
the benefit of the Agent and the Lenders, has been granted a security interest
pursuant to the Security Agreement, the Pledged Securities Documents or a
Subsidiary Security Agreement.
"Collateral Agent" shall mean ▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ & Co., in its
capacity as collateral agent.
"Commitment" shall mean, as to each Lender, the obligation of such
Lender to make Loans in an aggregate principal amount at any one time
outstanding up to but not exceeding the amount set forth opposite such Lender's
name on the signature pages hereof under the heading "Commitment" or in an
assignment agreement executed and delivered by such Lender pursuant to
Subsection 10.6 (as the same may be increased or reduced pursuant to the terms
hereof).
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"Continue", "Continuation", and "Continued" shall refer to the
continuation pursuant to Subsection 2.7 hereof of a Eurodollar Rate Loan from
one Interest Period to the next Interest Period.
"control" shall mean, with respect to any Person, the power, direct or
indirect, to vote 5% or more of the securities having ordinary voting power for
the election of directors (or persons performing similar functions) of such
Person or to direct or cause the direction of the management and policies of
such Person whether through ownership of voting securities, by contract or
otherwise.
"Convert", "Conversion", and "Converted" shall refer to a conversion
pursuant to Subsection 2.7 hereof of Base Rate Loans into Eurodollar Rate Loans
or of Eurodollar Rate Loans into Base Rate Loans.
"▇▇▇▇▇▇▇▇▇" shall mean ▇▇▇▇▇▇▇▇▇ & Company, Inc., a company organized
under the laws of Georgia.
"Default" shall mean any Event of Default or any event which with the
giving of notice, the lapse of time, or both, would become an Event of Default.
"Dollars" and "$" shall mean lawful currency of the United States of
America.
"Eligible Securities" shall mean (a) direct obligations of the U.S.
Treasury including Treasury bills, notes, and bonds having a maturity of three
years or less; (b) Federal Agency Securities having a maturity of three years or
less; (c) Repurchase and Reverse Repurchase Agreements collateralized by U.S.
Treasury and Federal Agency Securities having a maturity of one month or less;
(d) U.S. Dollar-denominated Certificates of Deposit, Time Deposits, and Banker's
Acceptances having a maturity of one year or less (three months or less in the
case of Time Deposits and six months or less in the case of Bankers Acceptances)
and issued by U.S. or foreign banks having a short term debt rating of A1/P1 or
higher and an investment grade long-term debt rating, or a rating of A from
Thomson BankWatch; (e) U.S. Dollar-denominated corporate obligations including
commercial paper, corporate bonds, medium notes and euronotes, and asset-backed
securities having a maturity of three years or less (nine months or less in the
case of commercial paper) and issued by U.S. or foreign entities having a short
term debt rating of A1/P1 or higher and an investment grade long-term debt
rating; and (f) money market funds which maintain a constant net asset value and
provide daily liquidity.
"Environmental Laws" shall mean any and all federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes into the
environment including, without limitation, ambient air, surface water, ground
water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes.
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"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"ERISA Group" shall mean the Company and all members of a controlled
group of corporations and all trades or businesses (whether or not incorporated)
under common control which, together with the Company, are treated as a single
employer under Section 4001 of ERISA or Section 414(b), (c), (m), (n) or (o) of
the Code.
"Eurodollar Rate" shall mean, for any Interest Period applicable to a
Eurodollar Rate Loan, the rate per annum (rounded upward, if necessary, to the
nearest 1/32 of one percent) as determined on the basis of the offered rates for
deposits in Dollars, for a period of time comparable to such Interest Period
which appears on the Bloomberg system as of 11:00 a.m. London time on the day
that is two London Banking Days preceding the first day of such Interest Period;
provided however, if the rate described above does not appear on the Bloomberg
system on any applicable interest determination date, the Eurodollar Rate shall
be the rate (rounded upwards as described above, if necessary) which appears on
the Telerate page 3750, British Bankers Association Interest Settlement Rates as
of 11:00 a.m. London time on the day that is two London Banking Days preceding
the first day of such Interest Period; provided further however, if the rate
described above does not appear on the Telerate System on any applicable
interest determination date, the Eurodollar Rate shall be the rate (rounded
upwards as described above, if necessary) for deposits in dollars for a period
substantially equal to the Interest Period on the Reuters Page "LIBO" (or such
other page as may replace the LIBO Page on that service for the purpose of
displaying such rates), as of 11:00 a.m. (London Time), on the day that is two
(2) London Banking Days prior to the beginning of such Interest Period. "Banking
Day" shall mean, in respect of any city, any date on which commercial banks are
open for business in that city
If the Bloomberg, Telerate and Reuters systems are unavailable, then
the rate for that date will be determined on the basis of the offered rates for
deposits in U.S. dollars for a period of time comparable to such Interest Period
which are offered by four major banks in the London interbank market at
approximately 11:00 a.m. London time, on the day that is two (2) London Banking
Days preceding the first day of such Interest Period as selected by the Agent.
The principal London office of no fewer than two major London banks will be
requested to provide a quotation of its U.S. dollar deposit offered rate. If at
least two such quotations are provided, the rate for that date will be
arithmetic mean of the quotations. If fewer than two quotations are provided as
requested, the rate for that date will be determined on the basis of the basis
of the rates quoted for loans in U.S. dollars to leading European banks for a
period of time comparable to such Interest Period offered by major banks in New
York City at approximately 11:00 a.m. New York City time, on the day that its
two London Banking Days preceding the first day of such Interest Period. In the
event that the Agent is unable to obtain any such quotation as provided above,
it will be deemed that the Eurodollar Rate pursuant to a Eurodollar Rate Loan
cannot be determined.
In the event that the Board of Governors of the Federal Reserve System
shall impose a Reserve Requirement with respect to Eurodollar Rate deposits,
then for any period during which such Reserve Requirement shall apply, the
Eurodollar Rate shall be equal to the amount determined above divided by an
amount equal to one (1) minus the Reserve Requirement.
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"Eurodollar Rate Loan" means a Loan which bears interest at the
Eurodollar Rate, plus the Applicable Margin.
"Event of Default" shall mean any of the events specified in Subsection
8.1.
"Excluded Cash and Securities" shall mean, any cash or Eligible
Securities owned by the Company in which the Company has granted a Lien to any
Person other than the Collateral Agent.
"Federal Funds Rate" shall mean, for any day or any other period, the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations for such day on such transactions received by the Agent from three
Federal funds brokers of recognized standing selected by it.
"Final Maturity Date" shall mean August 31, 2001 or such later date as
determined in accordance with Subsection 2.8.
"Fixed Charge Coverage Ratio" shall mean, for the Company for any
period, the ratio of (a) the sum of (i) Net Cash Provided by Operating
Activities Before Changes in Working Capital for such period plus (ii) any
amount deducted in the calculation thereof for interest and rent expense to (b)
the sum of (i) the aggregate interest and rent expense of the Company and its
Subsidiaries, determined on a consolidated basis, for such period, plus (ii)
required principal payments of Indebtedness of the Company and its Subsidiaries
for such period.
"GAAP" shall mean generally accepted accounting principles in the
United States of America in effect from time to time.
"Governmental Authority" shall mean any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Guaranty" by any Person shall mean any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Indebtedness
or other obligation of any other Person and, without limiting the generality of
the foregoing, any obligation, direct or indirect, contingent or otherwise, of
such Person (i) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness or other obligation (whether arising by virtue
of partnership arrangements, by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (ii) entered into for the purpose of
assuring in any other manner the obligee of such Indebtedness or other
obligation of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part), provided that the term Guaranty shall not
include endorsements for collection or deposit in the ordinary course of
business. The term "Guaranty" used as a verb has a corresponding meaning.
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"Indebtedness" shall mean, for any Person (without duplication), (i)
all indebtedness or other obligations of such Person for borrowed money and all
indebtedness of such Person with respect to any other items (including, without
limitation, obligations evidenced by bonds, debentures, notes or other similar
instruments but excluding accounts payable in the ordinary course of business
that are not more than 60 days past due, deferred revenue and accrued expenses)
which would, in accordance with GAAP, be classified as a liability on the
balance sheet of such Person, (ii) all obligations of such Person to pay the
deferred purchase price of property or services (including indebtedness created
under or arising out of any conditional sale or other title retention
agreement), (iii) all obligations of such Person (contingent or otherwise) under
reimbursement or similar agreements with respect to the issuance of letters of
credit, (iv) all indebtedness or other obligations of such Person under or with
respect to any swap or other financial hedging arrangement, (v) all obligations
of such Person under any Capitalized Lease, (vi) all indebtedness or other
obligations of any other Person (other than a wholly owned Subsidiary) of the
type specified in clause (i), (ii), (iii), (iv) or (v) above, the payment or
collection of which such Person has Guaranteed and (vii) all indebtedness or
other obligations of any other Person of the type specified in clause (i), (ii),
(iii), (iv), (v) or (vi) above secured by (or for which the holder of such
indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien upon or in property (including, without limitation, accounts and
contract rights) owned by such Person, whether or not such Person has assumed or
becomes liable for the payment of such indebtedness or obligations.
"Interest Period" means (a) for each Eurodollar Rate Loan comprising
part of the same Borrowing, the period commencing on the date of such Eurodollar
Rate Loan or on the last day of the preceding Interest Period, as the case may
be, and ending on the numerically corresponding day of the last month of the
period selected by the Company pursuant to the following provisions: the
duration of each Eurodollar Rate Loan Interest Period shall be one (1), two (2)
or three (3) months, in each case as the Company may select, upon notice
received by the Agent not later than 11:00 a.m. (New York time) on the third
Business Day prior to the first day of such Interest Period and (b) for each
Base Rate Loan comprising part of the same Borrowing, the period commencing on
the date of such Base Rate Loan or on the last day of the preceding Interest
Period, as the case may be, pursuant to notice received by the Agent not later
than 11:00 a.m. (New York time) on any Business Day selected by the Company as
the first day of such Interest Period, and ending on the last day of each
calendar month after the date of such Base Rate Loan; provided, however, that:
(i) all Eurodollar Rate Loans comprising part of the same
Borrowing shall be of the same duration;
(ii) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such
Interest Period shall be extended to occur on the next
succeeding Business Day; provided that, if such extension
would cause the last day of such Interest Period to occur in
the next following calendar month, the last day of such
Interest Period shall occur on the next preceding Business
Day;
(iii) each Interest Period that commences on the last Business Day
of a calendar month (or on any day for which there is no
numerically corresponding day in the applicable subsequent
calendar month) shall end on the last Business Day of the
applicable subsequent month; and
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(iv) no Interest Period for any Loan shall extend beyond the Final
Maturity Date.
"Lending Office" shall mean, with respect to each Lender the office
specified opposite such Lender's name on Schedule I or such other office as such
Lender may designate in writing from time to time to the Company and the Agent.
"Level I Borrowing" shall mean, all Borrowings which are in an amount
less than or equal to the value of the Restricted Securities.
"Level II Borrowing" shall mean, all Borrowings which are in an amount
above the value of the Pledged Securities but equal to or below the value of the
cash and Eligible Securities owned by the Company; provided however, the value
of the Excluded Cash and Securities shall not be included in such valuation.
"Level III Borrowing" shall mean, all Borrowings which are in an amount
above the value of the cash and Eligible Securities owned by the Company;
provided however, the value of the Excluded Cash Securities shall not be
included in such valuation.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, security interest, lien (statutory or other)
or preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever (including, without limitation, any conditional
sale or other title retention agreement, any Capitalized Lease having
substantially the same economic effect as any of the foregoing, and the filing
of any financing statement under the Uniform Commercial Code or comparable law
of any jurisdiction in respect of any of the foregoing).
"Loan" shall mean a loan by a Lender pursuant to Subsection 2.1. Each
Loan shall be a Base Rate Loan or a Eurodollar Rate Loan.
"Multiemployer Plan" shall mean a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Cash Provided by Operating Activities Before Changes in Working
Capital" shall mean, for any period, the net cash provided by operating
activities before changes in working capital, calculated as follows: (i) the net
income (loss) plus (minus) (ii) the cumulative effect of any change in
accounting principles minus (iii) membership solicitation and other deferred
costs plus (iv) the amortization of membership solicitation and other deferred
costs plus (minus) (v) the increase (decrease) in deferred membership fees plus
(vi) depreciation, amortization and other non-cash items; in each case,
calculated for the Company and its Subsidiaries in the same manner as calculated
and reported in the Company's consolidated financial statements included in the
Company's annual 10-K filing with the Securities and Exchange Commission.
"Note" shall mean a promissory note of the Company payable to the order
of a Lender, evidencing the Loans made by such Lender as provided for herein,
substantially in the form of Exhibit A, and any promissory note or notes of the
Company issued in substitution thereof.
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"Notice of Borrowing" shall mean an irrevocable notice from the Company
to the Agent, substantially in the form of Exhibit B-1, pursuant to which the
Company requests a Borrowing.
"Notice of Continuation or Conversion" means the certificate, in the
form of Exhibit B-2, to be delivered by the Company to the Agent pursuant to
Subsection 2.7.
"Obligations" shall mean any and all of the debts, obligations and
liabilities of the Company to the Lenders or the Agent provided for or arising
under this Agreement or the Related Documents to which the Company is a party
(including, without limitation, the obligation to repay all Loans and to pay
interest thereon or fees related thereto and to pay all costs of collection,
including the fees and disbursements of counsel), whether now existing or
hereafter arising, voluntary or involuntary, direct or indirect, absolute or
contingent, liquidated or unliquidated, and whether or not from time to time
decreased or extinguished and later increased, created or incurred.
"Operating Lease" shall mean any lease of real or personal property
other than a Capitalized Lease.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA or any successor thereto.
"Percentage of Total Commitment" shall mean, with respect to any
Lender, the percentage of the Total Commitment represented by such Lender's
Commitment to make Loans to the Company.
"Person" shall mean an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
"Plan" shall mean any employee benefit plan which is covered by Title
IV of ERISA or is subject to the funding requirements under Section 412 of the
Code (or the corresponding provisions of ERISA) and in respect of which the
Company or any member of the ERISA Group is (or, if such plan were terminated at
such time, would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"Pledged Securities" shall mean "investment property", as such term is
defined in the UCC.
"Quarterly Payment Dates" shall mean the last day of each March, June,
September and December of each year, commencing September 30, 1999.
"RCRA" shall have the meaning given to such term in Subsection 5.15.
"Regulatory Change" means any change after the date of this Agreement
in United States federal, state or foreign laws or regulations (including
Regulation D and the laws or regulations which designate any assessment rate
relating to certificates of deposit or otherwise (including the "Assessment
Rate" if applicable to any Loan)) or the adoption or making after such date of
any
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orders, rulings, interpretations, directives, guidelines or requests
applying to a class of banks including the Lenders, of or under any United
States federal, state, or foreign laws or regulations (whether or not having the
force of law) by any court or governmental or monetary authority charged with
the interpretation or administration thereof.
"Related Documents" shall mean each Note, the Security Agreement, the
Pledged Securities Documents, each Subsidiary Guaranty and each Subsidiary
Security Agreement.
"Reportable Event" shall mean any of the events set forth in Section
4043(b) of ERISA.
"Reserve Requirement" means for any Eurodollar Rate Loans for any
quarterly period (or, as the case may be, shorter period) as to which interest
is payable hereunder, the average maximum rate at which reserves (including any
marginal, supplemental or emergency reserves) are required to be maintained
during such period under Regulation D by member banks of the Federal Reserve
System in Boston, Massachusetts with deposits exceeding one billion Dollars
against "Eurocurrency liabilities" (as such term is used in Regulation D).
Without limiting the effect of the foregoing, the Reserve Requirement shall
reflect any other reserves required to be maintained by such member banks by
reason of any Regulatory Change against: (i) any category of liabilities which
includes deposits by references to which the Eurodollar Rate for Eurodollar Rate
Loans is to be determined as provided in the definition of "Eurodollar Rate" in
this Article 1, or (ii) any category of extensions of credit or other assets
which include Eurodollar Rate Loans.
"Restricted Securities" shall mean those Pledged Securities
constituting cash or Eligible Securities acceptable to the Collateral Agent
owned by the Company and held by the Collateral Agent in an amount equal to 50%
of the Total Commitment.
"Revenues" shall mean the total revenues of the Company and its
Subsidiaries calculated in the same manner as calculated and reported in the
Company's consolidated financial statements included in the Company's annual
10-K filing with the Securities and Exchange Commission.
"Security Agreement" shall mean the Security Agreement in substantially
the form of Exhibit C between the Company and the Collateral Agent.
"Single Employer Plan" shall mean any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Significant Subsidiary" shall mean as to the Company at any time, (i)
▇▇▇▇▇▇▇▇▇ and (ii) each other Subsidiary which either (a) contributed 5% or more
of the Revenues of the Company and its Subsidiaries on a consolidated basis for
the most recently completed fiscal year (or other 12 month period as referred to
in Subsection 6.12) or (b) owned 5% or more of the total assets of the Company
and its Subsidiaries on a consolidated basis as of the end of the most recently
completed fiscal year (or other determination date referred to in Subsection
6.12).
"Subsidiary" shall mean as to any Person, a corporation or other
business entity of which shares of stock or other ownership interests having
ordinary voting power to elect a majority of the board of directors or other
managers of such corporation or other business entity are at the time owned,
directly or indirectly through one or more intermediaries, by such Person.
Unless otherwise
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qualified, all references to a "Subsidiary" or to "Subsidiaries" in this
Agreement shall refer to a Subsidiary or Subsidiaries of the Company.
"Subsidiary Guaranty" shall mean a Guaranty in substantially the form
of Exhibit D executed by a Subsidiary of the Company guaranteeing payment of the
Obligations.
"Subsidiary Security Agreement" shall mean a Security Agreement in
substantially the form of Exhibit E between a Subsidiary of the Company and the
Collateral Agent securing such Subsidiary's obligations under a Subsidiary
Guaranty.
"Test Period" shall mean, at any date, the period consisting of the
most-recent four consecutive fiscal quarters of the Company ending on or prior
to such date.
"Total Commitment" shall mean $10,000,000.
"UCC" shall mean the Uniform Commercial Code as in effect on the date
hereof in the State of New York, as amended from time to time.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the Related Documents or any certificate or other document made or
delivered pursuant hereto or thereto.
(b) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and section, Subsection,
schedule and exhibit references are to this Agreement unless otherwise
specified.
(c) Defined terms in this Agreement shall include in the singular
number, the plural and in the plural number, the singular. The correlative of
any term defined in this Agreement shall, unless the context otherwise requires,
have the same meaning as such defined term.
(d) Unless the context otherwise requires, any pronoun shall include
the corresponding masculine, feminine and neuter forms.
(e) References in this Agreement to any other agreement, document or
instrument shall, unless the context otherwise requires, include such other
agreement, document or instrument as the same may be from time to amended,
restated, supplemented or otherwise modified.
1.3 Accounting Principles. (a) As used herein and in the Related
Documents and in any other certificate or document made or delivered pursuant
hereto or thereto, accounting terms relating to the Company not defined in
Subsection 1.1 shall have the respective meanings given to them under GAAP.
(b) Unless (i) otherwise required under applicable accounting rules,
(ii) required in the case of a filing of a registration statement with the
Securities and Exchange Commission in connection with an initial public offering
of securities by the Company or (iii) the Company and its firm of independent
accountants of nationally recognized standing acceptable to the Lenders deem a
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change to be appropriate, the Company shall not make any change in the
accounting treatment utilized by the Company under GAAP without the consent of
the Lenders; provided, that if any of clause (i), (ii) or (iii) is applicable,
the Company will notify the Lenders prior thereto and advise the Lenders of the
effect, if any, such change will have on the presentation of the Company's
financial statements and the financial computations required hereunder.
SECTION ▇.▇▇▇▇▇▇ FACILITY
1.4 Loans. Each Lender severally agrees, on the terms and subject to
the conditions of this Agreement, from time to time during the period from the
Closing Date to but not including the Final Maturity Date, to make Loans to the
Company in an aggregate principal amount at any one time outstanding up to but
not exceeding the amount of its Commitment; provided that the sum of all
outstanding Loans immediately after the making of each Loan shall not exceed the
Total Commitment. Within such limit, the Company may borrow, prepay, repay and
reborrow pursuant to this Subsection 2.1.
1.5 Manner of Borrowing. The Company shall give the Agent a duly
completed Notice of Borrowing not later than 10:00 a.m., New York City time, on
the Business Day immediately preceding the date of a Borrowing of a Base Rate
Loan and at least three Business Days before a Borrowing of a Eurodollar Rate
Loan. Each such Notice of Borrowing shall be irrevocable and shall specify: (i)
the amount of such Borrowing, which in the case of a Base Rate Loan shall be in
the principal amount of $100,000 or a multiple thereof and in the case of a
Eurodollar Rate Loan shall be in the principal amount of not less than$250,000
or any greater amount which is an integral multiple thereof; (ii) the date of
such Borrowing, which shall be a Business Day; and (iii) whether the Loan
comprising such Borrowing is to be a Base Rate Loan or a Eurodollar Rate Loan;
and if a Eurodollar Rate Loan, the initial Interest Period with respect to such
Borrowing. Each Borrowing shall be made ratably from the Lenders in proportion
to each Lender's Percentage of the Total Commitment. Upon receipt by the Agent
of a Notice of Borrowing as aforesaid, the Agent shall promptly advise each
Lender of the details thereof. There shall be no more than three Interest
Periods relating to Eurodollar Rate Loans.
1.6 Disbursement of Loans. Upon notification from the Agent that a
Borrowing has been requested by the Company pursuant to Subsection 2.2, each
Lender shall make the Loans to be made by it available by transferring the
amount thereof in Dollars to the Agent not later than 12:00 noon, New York City
time, on the relevant borrowing date. The Agent shall make the amounts received
from the Lenders immediately available to the Company by crediting the amount
thereof on the date of borrowing to the Company's account with the Agent.
1.7 Notes. The Loans made by each Lender shall be evidenced by a Note.
Each Lender will note on its internal records the date and amount of each Loan
made by such Lender, the date and amount of each repayment of principal thereof
and will, prior to any transfer of its Note, endorse on the reverse side thereof
the outstanding principal amount of the Loans evidenced thereby. Failure to so
record any such information shall not alter the obligations of the Company under
this Agreement or such Note.
1.8 Repayment of Principal; Optional Prepayments.
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(a) The Company shall repay to the Agent for the account of the Lenders
the outstanding principal amount of each Lender's Loans on the Final Maturity
Date. In addition, if at any time the aggregate outstanding principal amount of
all Loans exceeds the Total Commitment, then the Company shall immediately pay
to the Agent for the account of the Lenders the amount equal to such excess,
together with accrued interest thereon.
(b) Anything herein to the contrary notwithstanding, the Company may at
any time and from time to time prepay the then outstanding Base Rate Loans
comprising any Borrowing, in whole or in part, without premium or penalty, upon
not less than one (1) Business Day's irrevocable notice to the Agent, specifying
the date and amount of prepayment and, if more than one such Borrowing is
outstanding, which Borrowing is to be prepaid. Upon receipt of any such notice,
the Agent shall promptly notify each Lender thereof. Any notice of prepayment
given by the Company shall obligate the Company to make the prepayment specified
in such notice on the date specified therein. Accrued interest on any amount
prepaid in accordance with the terms hereof shall, in accordance with Subsection
2.6, be payable on the date such prepayment is required to be made as provided
herein. Any partial prepayment of a Borrowing comprised of Base Rate Loans shall
be in an aggregate principal amount of $100,000 or whole multiples of $100,000
in excess thereof, and shall not result in the remaining amount of such
Borrowing being less than $100,000.
(c) Anything herein to the contrary notwithstanding, the Company may at
any time and from time to time prepay the then outstanding Eurodollar Rate Loans
comprising any Borrowing, in whole or in part, without premium or penalty, upon
not less than three (3) Business Days' irrevocable notice to the Agent,
specifying the date and amount of prepayment and, if more than one such
Borrowing is outstanding, which Borrowing is to be prepaid. Upon receipt of any
such notice, the Agent shall promptly notify each Lender thereof. Any notice of
prepayment given by the Company shall obligate the Company to make the
prepayment specified in such notice on the date specified therein. Accrued
interest on any amount prepaid in accordance with the terms hereof shall, in
accordance with Subsection 2.6, be payable on the date such prepayment is
required to be made as provided herein. If such prepayment occurs on a date that
is not the last day of the Interest Period applicable to such Eurodollar Rate
Loan, the Company shall pay any amounts as shall be sufficient (in the
reasonable opinion of each Lender) to compensate such Lender for any reasonable
losses, costs or expenses (excluding any losses of anticipated profit), as
certified by such Lender (such certification setting forth the basis for such
compensation), which such Lender may reasonably incur as a result of such
prepayment, including without limitation, any loss, cost or expense incurred by
reason of funds liquidation or reemployment of deposits or other funds acquired
by such Lender to fund or maintain such Eurodollar Rate Loan and any
administrative costs, expenses or charges of the Lender as a result thereof. Any
partial prepayment of a Borrowing comprised of a Eurodollar Rate Loan shall be
in an aggregate principal amount of $100,000 or whole multiples of $100,000 in
excess thereof, and shall not result in the remaining amount of such Borrowing
being less than $100,000.
Without limiting the effect of the preceding paragraph, compensation
shall include an amount equal to the excess, if any, of (i) the amount of
interest that otherwise would have accrued on the principal amount so prepaid
for the period from the date of such prepayment to the last day of the then
current Interest Period for such Eurodollar Rate Loan at the applicable rate of
interest for
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such Eurodollar Rate Loan provided for herein over (ii) the amount of interest
that otherwise would have accrued on such principal amount at a rate per annum
equal to the interest component of the amount the Lender would have bid in the
London interbank market for Dollar deposits of leading banks in amounts
comparable to such principal amount and with maturities comparable to such
period (as reasonably determined by the Lender), if the Lender has match-funded
such Eurodollar Rate Loan, or the Lender's cost of funds, if the Lender has not
match-funded. Such Lender will furnish to the Company a certificate setting
forth the basis and amount of each request by the Lender for compensation under
this Subsection 2.5.
1.9 Payment of Interest.
(a) The Company shall pay interest on the unpaid principal amount of
each Base Rate Loan from and including the date of such Base Rate Loan to but
not including the date on which such Loan is paid in full at a fluctuating rate
per annum equal to the Base Rate in effect from time to time plus the Applicable
Margin. Such interest shall be due and payable on the last day of the Interest
Period applicable thereto.
(b) The Company shall pay interest on the unpaid principal amount of
each Eurodollar Rate Loan from and including the date of such Loan to but not
including the date on which such Loan is paid in full at a rate per annum equal
to the Eurodollar Rate in effect for the relevant Interest Period plus the
Applicable Margin. Such interest shall be due and payable on the last day of the
Interest Period applicable thereto.
(c) Notwithstanding the foregoing subparagraphs (a) and (b), if the
Company shall fail to pay any installment of principal of or interest on any
Loan when due, or if any other Event of Default shall occur, then the Company
shall pay interest as provided in Subsection 8.4.
(d) For purposes of determining whether a Level II Borrowing exists,
the Company shall determine the value of the Cash and Eligible Securities owned
by the Company on the date of each new Level II Borrowing and no less frequently
than each month end thereafter so long as a Level II Borrowing remains
outstanding and shall certify to such value in a certificate delivered to the
Agent, provided however, if the Company fails to provide the Agent with such a
certificate, with respect to all Borrowings in excess of a Level I Borrowing,
the Agent shall deem there to be a Level III Borrowing; provided further, if the
Company has a Level II Borrowing Outstanding at any time and the Company has
knowledge that it does not meet the requirements for a Level II Borrowing, the
Company shall notify the Agent of such knowledge.
1.10 Conversion or Continuation of Loans. The Company shall have the
right to Convert Loans of one type into Loans of another type or to Continue
Eurodollar Rate Loans, at any time or from time to time, provided that: (a) the
Company shall give the Agent a Notice of Continuation or Conversion in the form
of Exhibit B-2, as applicable, prior to 11:00 a.m. (New York time) on the date
at least (i) three (3) Business Days prior to the last day of the Interest
Period of any Loan to be Converted into or Continued as a Eurodollar Rate Loan
and (ii) one (1) Business Day prior to the last day of the Interest Period of
any Loan to be Converted into a Base Rate Loan; (b) Eurodollar Rate Loans may be
Converted or Continued only on the last day of an Interest Period for such
Loans; (c) each Conversion or Continuation of a Eurodollar Rate Loan shall be in
an amount at least
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equal to $100,000 or in any greater amount which is an integral multiple
thereof; (d) no Event of Default shall have occurred and be continuing at the
time of any Conversion or Continuation of any such Loan into a subsequent
Interest Period; (e) accrued interest on the Loan (or portion thereof) being
Converted or Continued shall be paid by the Company at the time of Continuation
or Conversion; and (f) each request for a Continuation as or Conversion to a
Eurodollar Rate Loan which fails to state an applicable Interest Period shall be
deemed to be a request for an Interest Period of one (1) month.
Notwithstanding anything to the contrary herein contained, if, upon the
expiration of any Interest Period applicable to any Eurodollar Rate Loan, the
Company shall fail to give a Notice of Continuation or Conversion as set forth
in this Subsection 2.7, the Company shall be deemed to have given a Notice of
Continuation of such Eurodollar Rate Loan in principal amount equal to the
outstanding principal amount of such Eurodollar Rate Loan and having an Interest
Period of one (1) month.
1.11 Extension of Final Maturity Date. So long as no Default exists,
the Final Maturity Date shall automatically be extended for an additional 364
days from the then current Final Maturity Date unless the Company or any Lender
provides written notice to the Agent no later than 120 days prior to such Final
Maturity Date that it does not agree to such extension; provided however, the
Final Maturity Date shall not be so extended more than three (3) times.
1.12 Computation of Interest and Fees. All interest and fees shall be
calculated on the basis of a 360-day year and paid for the actual days elapsed.
Any change in the interest rate on a Loan resulting from a change in the Base
Rate shall become effective as of the opening of business on the day on which
such change is announced. In computing the amount of interest or fees payable in
respect of any period, the first day of such period shall be included and the
last day of such period shall be excluded. All computations of interest and like
payments hereunder on the Loans shall, in the absence of clearly demonstrable
error, be considered correct and binding on the Company and each Lender, unless
within thirty (30) Business Days after receipt of any notice by the Agent of
such outstanding amount, the Company or any Lender notifies the Agent to the
contrary.
1.13 Capital Adequacy. (a) In the event that any Lender shall have
determined that the adoption or implementation of, or any change in, any law,
rule, regulation or guideline regarding capital adequacy, capital maintenance or
similar requirement or any change in the interpretation or application thereof
or compliance by any Lender or any corporation controlling any Lender with any
request, guideline, policy or directive regarding capital adequacy (whether or
not having the force of law) from any central bank or other Governmental
Authority, has or would have the effect of reducing the rate of return on such
Lender's or such Lender's controlling corporation's capital as a consequence of
its obligations hereunder or its Loans to a level below that which such Lender
or such Lender's controlling corporation could have achieved but for such
adoption, implementation, change or compliance (taking into consideration such
Lender's or such Lender's controlling corporation's policies with respect to
capital adequacy), then from time to time, upon demand by such Lender to the
Company (with a copy to the Agent), the Company shall pay to such Lender such
additional amount or amounts as will compensate such Lender for such reduction.
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(b) Any such Lender will promptly notify the Company and the Agent upon
becoming aware of any event which will cause it to demand payment of any
additional amount pursuant to paragraph (a) above and shall furnish to the
Company a certificate containing a determination made in good faith of such
additional amount and the justification therefor and showing in reasonable
detail the computation thereof. Determinations and allocations by any Lender of
any additional amounts payable by the Company pursuant to paragraph (a) of this
Subsection 2.10 shall be conclusive absent manifest error.
(c) If any additional amount becomes or will in the future become
payable for the account of any Lender under paragraph (a) of this Subsection
2.10, then such Lender will (if so requested by the Company, but without
prejudice to the provisions of this Subsection 2.10 ) consult with the Company
and the Agent with a view to agreeing upon a mutually acceptable alternative
arrangement (including the transfer of such Lender's Lending Office to another
jurisdiction, if, in its sole discretion, such transfer is not in any way
disadvantageous to it or contrary to its policies) which will avoid or minimize
the payment of such additional amount in the future and which is not prejudicial
to it.
(d) The agreements contained in this Subsection 2.10 shall survive for
a period of one year following repayment of the Obligations.
1.14 Increased Costs. (a) If after the date hereof, due to either (i)
the introduction of or any change in or in the interpretation or enforcement of,
any law, regulation, order, ruling, directive, guideline or request, or (ii) the
compliance with any order, ruling, directive, guideline or request from any
central bank or other governmental authority (whether or not having the force of
law) issued, announced, published, promulgated or made after the date hereof,
there shall be any increase in the cost to any Lender of agreeing to make or
making, funding or maintaining Eurodollar Rate Loans, then the Company shall be
liable for, and shall from time to time, within thirty (30) days following a
demand by the Lender, pay to the Agent for the account of the Lender additional
amounts sufficient to compensate such Lender for such increased cost; provided,
however, that before making any such demand, the Lender agrees to use reasonable
efforts (consistent with its internal policy and legal and regulatory
restrictions) to designate a different Lending Office if the making of such a
designation would allow the Lender or its Lending Office to continue to perform
its obligations to make Eurodollar Rate Loans or to continue to fund or maintain
Eurodollar Rate Loans and would not, in the reasonable judgment of the Lender,
be otherwise disadvantageous to the Lender. A certificate substantiating the
amount of such increased cost, submitted to the Company by the Lender, shall be
conclusive, absent demonstrable error.
(b) Any such Lender will promptly notify the Company and the Agent upon
becoming aware of any event which will cause it to demand payment of any
additional amount pursuant to paragraph (a) above and shall furnish to the
Company a certificate containing a determination made in good faith of such
additional amount and the justification therefor and showing in reasonable
detail the computation thereof. Determinations and allocations by any Lender of
any additional amounts payable by the Company pursuant to paragraph (a) of this
Subsection 2.11 shall be conclusive absent manifest error.
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(c) If any additional amount becomes or will in the future become
payable for the account of any Lender under paragraph (a) of this Subsection
2.11, then such Lender will (if so requested by the Company, but without
prejudice to the provisions of this Subsection 2.11) consult with the Company
and the Agent with a view to agreeing upon a mutually acceptable alternative
arrangement (including the transfer of such Lender's Lending Office to another
jurisdiction, if, in its sole discretion, such transfer is not in any way
disadvantageous to it or contrary to its policies) which will avoid or minimize
the payment of such additional amount in the future and which is not prejudicial
to it.
(d) The agreements contained in this Subsection 2.11 shall survive for
a period of one year following repayment of the Obligations.
1.15 Illegality. Notwithstanding any other provision of this Agreement,
if after the date hereof the introduction of, or any change in or in the
interpretation or enforcement of, any law, regulation, order, ruling, directive,
guideline or request shall make it unlawful, or any central bank or other
governmental authority shall assert that it is unlawful, for any Lender or its
Lending Office to perform its obligations hereunder to make Eurodollar Rate
Loans or to continue to fund or maintain Eurodollar Rate Loans hereunder, then,
on notice thereof by such Lender to the Company, (i) the obligation of the
Lender to make Eurodollar Rate Loans shall terminate (and the Lender shall make
all of its Loans as Base Rate Loans notwithstanding any election by the Company
to have the Lender make Eurodollar Rate Loans) and (ii) if legally permissible,
at the end of the current Interest Period for such Eurodollar Rate Loans,
otherwise five Business Days after such notice and demand, all Eurodollar Rate
Loans of the Lender then outstanding will automatically convert into Base Rate
Loans; provided, however, that before making any such demand, the Lender agrees
to use reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions) to designate a different Lending Office if the making
of such a designation would allow the Lender or its Lending Office to continue
to perform its obligations to make Eurodollar Rate Loans and would not, in the
judgment of the Lender, be otherwise disadvantageous to the Lender. A
certificate describing such introduction or change in or in the interpretation
or enforcement of such law, regulation, order, ruling, directive, guideline or
request, submitted to the Company by such Lender, shall be conclusive evidence
of such introduction, change, interpretation or enforcement, absent demonstrable
error. The Lender and the Company agree to negotiate in good faith in order to
agree upon a mutually acceptable mechanism to provide that Eurodollar Rate Loans
made by the Lender as to which the foregoing conditions occur shall convert into
Base Rate Loans.
SECTION 3. FEES; PAYMENTS
1.16 Fees.
(a) Closing Fee. The Company shall pay to the Agent, for the account of
the Lenders, on the Closing Date a closing fee equal to $25,000.
(b) Agent Fee. The Company shall pay to the Agent, for its own account,
a fee equal to $20,000 per annum. Such fee shall be due and payable on or prior
to the Closing Date and on or before each anniversary thereof until the Final
Maturity Date, as such date may be extended from time to time pursuant to
Subsection 2.8. Notwithstanding the foregoing, the Agent hereby waives
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such fee payable to the Agent until the Total Commitment shall be greater than
$10,000,000 and there shall be more than one Lender hereunder.
(c) Facility Fee. The Company shall pay to the Agent, for the account
of each Lender, a facility fee from and including the Closing Date to and
including the Final Maturity Date, computed at the rate of .25% per annum on the
average daily unused portion of each Lender's Commitment with respect to the
Loans. Such fee shall be payable quarterly in arrears on the Quarterly Payment
Date.
1.17 Pro Rata Treatment and Payments. Each Borrowing by the Company
from the Lenders and each payment by the Company on account of any fee (other
than fees for the account of the Agent) shall be made pro rata according to each
Lender's Percentage of the Total Commitment, except as otherwise expressly
provided herein. Each payment by the Company on account of principal of and
interest on the Loans shall be made pro rata according to the respective
outstanding principal amounts of such Loans held by each Lender. All payments to
be made by the Company on account of principal, interest and fees shall be made
without set-off or counterclaim and shall be made to the Agent, for the account
of the Lenders (except for fees for the account of the Agent), at the Agent's
office designated for such purpose, in Dollars and in immediately available
funds not later than 12:00 noon, New York City time, on the date on which such
payment shall become due. Any payment received after such time on any Business
Day shall be deemed to have been received on the next Business Day. The Agent
shall distribute such payments to the Lenders in like funds on the day of
receipt or deemed receipt of such payments. If any payment hereunder becomes due
and payable on a day other than a Business Day, such payment shall be extended
to the next succeeding Business Day, and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during such
extension.
1.18 Taxes. (a) All payments made by the Company under this Agreement
and the Notes shall be made free and clear of, and without reduction for or on
account of, any present or future taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any Governmental Authority, excluding, in the case of
the Agent and each Lender, net income and franchise taxes imposed on it by the
jurisdiction under the laws of which it is organized or in which it has its
principal office or its Lending Office or any political subdivision or taxing
authority thereof or therein (such non-excluded taxes being called "Taxes") . If
any Taxes are required to be withheld from any amounts payable to the Agent or
any Lender hereunder or under the Notes, the amounts so payable shall be
increased to the extent necessary to yield to the Agent or such Lender (after
payment of all Taxes) interest or any such other amounts payable hereunder or
under the Notes at the rates or in the amounts specified in this Agreement and
the Notes. Whenever any Taxes are payable by the Company, as promptly as
possible thereafter, the Company shall send to the Agent for its own account or
for the account of each Lender, as the case may be, a certified copy of an
original official receipt showing payment thereof. If the Company fails to pay
Taxes when due to the appropriate taxing authority or fails to remit to the
Agent the required receipts or other required documentary evidence, the Company
shall indemnify and hold harmless the Agent and the Lenders against, and
reimburse the Agent and the Lenders upon demand for, any incremental taxes,
interest or penalties that may become payable by the Agent or any Lender as a
result of any such failure.
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(b) Each Lender will promptly notify the Company and the Agent upon
becoming aware of any event which will cause the Company to pay any additional
amount pursuant to paragraph (a) above.
1.19 Assumed Payments. Unless the Agent shall have been notified by a
Lender or the Company prior to the date on which such Lender or the Company is
scheduled to make payment to the Agent of (in the case of a Lender) the proceeds
of a Loan to be made by it hereunder or (in the case of the Company) a payment
to the Agent for account of one or more of the Lenders hereunder (such payment
being herein called the "Required Payment"), which notice shall be effective
upon receipt, that it does not intend to make the Required Payment to the Agent,
the Agent may assume that the Required Payment has been made and may, in
reliance upon such assumption (but shall not be required to) , make the amount
thereof available to the intended recipient(s) on such date and, if such Lender
or the Company (as the case may be) has not in fact made the Required Payment to
the Agent, the recipient(s) of such payment shall, on demand, repay to the Agent
the amount so made available. In addition, the party that failed to make the
Required Payment shall, on demand, pay interest to the Agent for its own account
in respect of each day during the period commencing on the date such amount was
so made available by the Agent until the date the Agent recovers such amount at
a rate equal to the sum of the Base Rate plus 2% per annum; provided, however,
that if the party that failed to make the Required Payment is a Lender, such
interest shall accrue at the Federal Funds Rate for the first three Business
Days such amount is unpaid and thereafter at the Base Rate plus 2% per annum.
SECTION 4. CONDITIONS PRECEDENT
1.20 Conditions to Effectiveness. This Agreement shall be effective
upon the satisfaction of each of the following conditions precedent:
(a) This Agreement. The Agent shall have received, with copies for each
Lender, a counterpart hereof duly executed by the Company;
(b) Notes. The Agent shall have received duly executed Notes payable to
each Lender;
(c) Related Documents. The Agent shall have received, with copies for
each Lender, the Security Agreement and the Pledged Securities Documents duly
executed by the Company and a Subsidiary Guaranty and a Subsidiary Security
Agreement duly executed by each Significant Subsidiary;
(d) Legal Opinions of Counsel to the Company. The Agent shall have
received, with copies for each Lender, an executed legal opinion dated the
Closing Date and addressed to the Agent and the Lenders, of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇'▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇ LLP, counsel to the Company and the Significant
Subsidiaries, in a form reasonably satisfactory to the Agent, the Lenders and
each of their special counsel;
(e) Corporate Proceedings. The Agent shall have received, with a copy
for each Lender, a copy of resolutions, in form and substance reasonably
satisfactory to the Agent, of the Board of Directors of the Company and each
Significant Subsidiary authorizing the execution, delivery and
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performance by it of this Agreement, the Notes and the Related Documents (as
applicable) certified by the Secretary or an Assistant Secretary of the Company
or such Significant Subsidiary, which certificate shall state that the
resolutions thereby certified are in full force and effect and have not been
amended, modified, revoked or rescinded as of the Closing Date;
(f) Good Standing Certificates. The Agent shall have received, with a
copy for each Lender, a certificate of recent date from the Secretary of State,
or other appropriate authority, evidencing the good standing of the Company and
each Significant Subsidiary in its jurisdiction of incorporation and, if
different, its principal place of business;
(g) Tax Good Standing. The Agent shall have received, with a copy for
each Lender, a certificate of recent date or similar instrument from the
appropriate tax authority in its jurisdiction of incorporation and, if
different, its principal place of business, as to the payment by the Company of
all taxes owed;
(h) Corporate Documents. The Agent shall have received, with a copy for
each Lender, a copy of (i) the charter of the Company and each Significant
Subsidiary and all amendments thereto, certified as of a recent date by the
Secretary of State, or other appropriate authority, of the jurisdiction of its
incorporation, and (ii) the by-laws of the Company and each Significant
Subsidiary, certified as of the Closing Date by its Secretary or an Assistant
Secretary;
(i) Incumbency Certificate. The Agent shall have received, with an
executed counterpart for each Lender, a certificate dated the Closing Date of
the Secretary or an Assistant Secretary of the Company and each Significant
Subsidiary certifying as to the incumbency and signatures of its officers
executing this Agreement, the Notes and the Related Documents (as applicable)
and any certificate or other document to be delivered by it pursuant hereto and
thereto, together with evidence of the incumbency of such Secretary or Assistant
Secretary;
(j) Officer's Certificate. The Agent shall have received, with a copy
for each Lender, a certificate dated the Closing Date from an appropriate
officer of the Company certifying that (i) the representations and warranties
contained in Section 5 and in the Related Documents are accurate and complete
and (ii) no Default has occurred and is continuing or will occur as a result of
the initial Loans;
(k) Fees and Expenses. The Agent shall have received all compensation
and other amounts payable to it, including, without limitation, all amounts
payable under Subsections 3.1(a), 3.1(b) and 10.5(a), on or prior to the date of
the initial Loan;
(l) Collateral. The Collateral Agent shall have received (i) evidence
that all filings and other action necessary to perfect the Collateral Agent's
security interest in the Collateral or any other filings or recordings
necessary, on behalf of the Agent and the Lenders, have been made and the Lien
perfected by any such filings has priority over any other Liens except as
otherwise provided herein, (ii) to the extent Collateral is maintained on any of
the leased premises listed on Schedule 4.1, an agreement from the landlord of
the premises located in Stamford, Connecticut and Omaha, Nebraska confirming
that such landlord has subordinated its landlord lien in the Company's personal
property to the security interests of the Collateral Agent, for the benefit of
the Agent and the Lenders, and that such landlord will provide the Collateral
Agent with reasonable access to such
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facility to exercise, to the extent permitted by law, the Collateral Agent's
remedies; provided however, the Agent and the Lenders hereby agree to accept
such agreements within 90 days of the Closing Date, and (iii) evidence that the
Restricted Securities have been deposited with the Collateral Agent hereto;
(m) Supporting Documents. The Agent shall have received, with copies
for each Lender, such other documents, certificates, opinions or financial or
other information as the Agent or any of the Lenders may reasonably request; and
(n) Other. All corporate and other proceedings, and all documents,
instruments and other legal matters in connection with the transactions
contemplated by this Agreement and the Related Documents, shall be reasonably
satisfactory in form and substance to the Agent and its counsel.
1.21 Conditions to Each Extension of Credit. The obligation of each
Lender to make any Loan (including, without limitation, its initial Loan) is
subject to the satisfaction of the following conditions precedent as of the date
such Loan is made:
(a) Representations and Warranties. Each of the representations and
warranties made by the Company pursuant to this Agreement and the Related
Documents, and each of the representations and warranties contained in any
certificate, document or financial or other statement furnished at any time
under or in connection with this Agreement or any of the Related Documents,
shall be true and complete on and as of such date as if made on and as of such
date, except to the extent that such representations and warranties expressly
relate to particular date; and
(b) No Default. No Default shall have occurred and be continuing on
such date or after giving effect to the Loans requested to be made on such date.
(c) No Material Adverse Change. There shall have been no material
adverse change in the financial condition, operations, properties, business or
prospects of the Company and its Subsidiaries, if any, taken as a whole, since
the date of the last Borrowing under this Agreement (or if no Borrowing has
occurred, since the date of this Agreement);
(d) Notice. The Agent shall have received a Notice of Borrowing in the
form of Exhibit B-1; and
(e) If the Company requests a Borrowing resulting in a Level II
Borrowing or a Level III Borrowing, the Agent shall have received a certificate
from the chief financial officer of the Company indicating the value of the
Company's cash and Eligible Securities.
Each Borrowing hereunder shall constitute a representation and warranty by the
Company as of the date of such Borrowing that the conditions contained in this
Subsection 4.2 have been satisfied.
SECTION 5. REPRESENTATIONS AND WARRANTIES
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The Company hereby makes the following representations and warranties
to the Agent and to each Lender.
1.22 Financial Condition. (a) The consolidated balance sheets of the
Company as at June 30, 1997 and 1998 and 1999 and the related consolidated
statements of income, stockholders' investment and cash flows for the fiscal
year ended on each such date, audited by Price Waterhouse, copies of which have
heretofore been furnished to the Agent and to each Lender, are complete and
correct and present fairly the consolidated financial condition of the Company
as at each such date, and the consolidated results of its operations and cash
flows for the fiscal years then ended. All such financial statements, including
the related schedules and notes thereto, have been prepared in accordance with
GAAP applied consistently throughout the periods involved (except as approved by
such accountants or officer, as the case may be, and as disclosed therein).
(b) As of the date hereof, the Company does not have any material
liability or obligation of any nature, absolute, accrued, contingent or
otherwise, or any material judgment or long term lease or unusual forward or
long term commitment, which is not reflected in the financial statements
referred to in Subsection 5.1(a), or the notes accompanying such financial
statements, or otherwise set forth on Schedule 4.1 other than liabilities and
obligations incurred under this Agreement.
(c) The Company is not entering into the arrangements contemplated
hereby and by the Related Documents nor does it intend to make any transfer or
incur any obligations hereunder or thereunder with actual intent to hinder,
delay or defraud either present or future creditors. On and as of the Closing
Date, on a pro forma basis after giving effect to the transactions, contemplated
hereby (x) the Company will not have incurred nor does the Company intend or
believe that it will incur debts beyond its ability to pay such debts as such
debts mature (taking into account the timing and amounts of cash to be received
from any source and amounts payable on or in respect of any of its debts); (y)
the Company, after taking into account all other anticipated uses of its cash,
anticipates being able to pay all amounts on or in respect of its debts when
such amounts are required to be paid; and (z) the Company has sufficient capital
with which to conduct its present and proposed business and its property does
not constitute unreasonably small capital with which to conduct its present or
proposed business. For purposes of this Subsection 5.1(c), "debt" means any
liability on a claim, and a "claim" means a (i) right to payment whether or not
such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured
or unsecured; or (ii) right to an equitable remedy for breach of performance if
such breach gives rise to a payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured or unsecured. On the date of each Borrowing (and after
giving effect to all Borrowings as of such date), the representations set forth
in this Subsection 5.1(c) shall be true and correct with respect to the Company
on such date.
1.23 No Change. Since June 30, 1999, there has been no material adverse
change in the business, operations, prospects, or financial condition of the
Company or any of its Subsidiaries or in any of the Collateral or the ability of
the Company to perform its obligations under this Agreement, the Notes or any
other Related Document to which it is a party.
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1.24 Corporate Existence. The Company and each of its Subsidiaries (a)
is duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation, (b) has the corporate power and authority to own
and operate its property, to lease the property it operates as lessee and to
conduct the business in which it is currently engaged, (c) has obtained all
licenses (governmental or otherwise), authorizations and consents necessary to
own and operate its properties and transact its business and (d) is duly
qualified as a foreign corporation and in good standing under the laws of each
jurisdiction in which a failure so to qualify could reasonably be expected to
have a material adverse effect on its business, operations, prospects or
financial condition. The Company and each of its Significant Subsidiaries is
duly qualified as a foreign corporation in each of the respective jurisdictions
identified on Schedule 5.3. As of the Closing Date, the Company has no
Significant Subsidiary other than ▇▇▇▇▇▇▇▇▇.
1.25 Corporate Power; Authorization. The Company has the corporate
power and authority to execute, deliver and perform its obligations under this
Agreement and the Related Documents to which it is a party and to consummate the
transactions contemplated herein and therein and has taken all necessary
corporate action to authorize the execution and delivery of this Agreement and
the Related Documents to which it is a party and the consummation of the
transactions contemplated herein and therein. Each Significant Subsidiary has
the corporate power and authority to execute, deliver and perform its
obligations under the Related Documents to which it is a party and to consummate
the transactions contemplated therein and has taken all necessary corporate
action to authorize the execution, delivery and performance of the Related
Documents to which it is a party and the consummation of the transactions
contemplated therein.
1.26 Binding Effect. This Agreement and the Related Documents to which
the Company is a party have been duly executed and delivered by the Company and
constitute its legal, valid and binding obligations enforceable against it in
accordance with their respective terms except as enforcement of such terms may
be limited by bankruptcy, insolvency or other similar laws affecting the rights
of creditors generally. The Related Documents to which each Significant
Subsidiary is a party have been duly executed and delivered by such Significant
Subsidiary and constitute its legal, valid and binding obligations enforceable
against it in accordance with their terms except as enforcement of such terms
may be limited by bankruptcy, insolvency or other similar laws affecting the
rights of creditors generally.
1.27 Consents; Non-Contravention. No consent or authorization of,
filing with or other act by or in respect of any Governmental Authority or any
other Person is required in connection with the execution, delivery or
performance by the Company or any Subsidiary of this Agreement and the Related
Documents or the consummation of the transactions contemplated herein and
therein, except such as have been obtained or made and are in full force and
effect. The execution and delivery of this Agreement and the Related Documents
and the consummation of the transactions contemplated hereby and thereby, will
not (a) violate any law, rule or regulation applicable to the Company or its
Subsidiaries or any provision of the charter or by-laws of the Company or any of
its Subsidiaries, (b) conflict with, result in a breach or termination of, or
constitute a default under, any provision of any indenture, mortgage, lease
(capital or operating) or other agreement or instrument to which the Company or
any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries or any of their respective assets is bound, or any license,
judgment, order or decree of any Governmental Authority having jurisdiction over
the
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Company or any of its Subsidiaries or any of their respective activities or
properties or (c) result in, or require the creation or imposition of, any Lien
upon or with respect to any properties now or hereafter owned by the Company or
any of its Subsidiaries other than the Liens created under the Security
Agreement and any Subsidiary Security Agreement.
1.28 No Material Litigation. Except as set forth on Schedule 5.7, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Company,
threatened by or against the Company or any of its Subsidiaries or against any
of their respective properties or revenues (a) which if adversely determined may
have a material adverse effect on the business, operations, prospects or
financial condition of the Company and its Subsidiaries, taken as a whole, or on
the ability of the Company to perform its obligations under this Agreement and
the Related Documents to which it is a party or (b) which questions or would
question the validity or enforceability of this Agreement or the Related
Documents.
1.29 No Default. Neither the Company nor any of its Subsidiaries is in
violation of or in default under any term or provision of any (a) charter or
by-law or (b) mortgage, indenture, lease, agreement, instrument, law, rule,
regulation, judgment, decree, order, writ or injunction applicable to it, except
in the case of this clause (b) for such violations or defaults that would not
have a material adverse effect on the business, operations, prospects or
financial condition of the Company and its Subsidiaries, taken as a whole, or on
the ability of the Company or any Subsidiary to perform its obligations under
this Agreement and the Related Documents to which it is a party. No Default has
occurred and is continuing.
1.30 Ownership of Property; Liens. (a) The Company and each of its
Significant Subsidiaries has good and valid title to, or valid leasehold
interests in, all its real property and other property, subject in each case
only to encumbrances that do not materially adversely affect its ability to use
such property for the purposes for which it is currently being used, and none of
such property is subject to any Lien, except as set forth in Schedule 5.9 hereof
and any Lien previously granted in favor of the Collateral Agent.
(b) The Company and each of its Subsidiaries possesses sufficient
permits, licenses, patents, patent rights, trademarks, trademark rights, trade
names, trade name rights, service marks, service ▇▇▇▇ rights and copyrights
necessary for the conduct of the business of the Company and each of its
Subsidiaries.
1.31 No Burdensome Restrictions. Neither the Company nor any of its
Subsidiaries is party to any agreement or instrument or subject to any
legislative or charter or other corporate restriction or any judgment, order,
writ, injunction, decree, or to the best of its knowledge, any rule or
regulation, which could reasonably be expected to materially and adversely
affect its business, operations, prospects or financial condition; provided
however, it is understood by the parties hereto that (i) any such restrictions
and regulations in existence on the Closing Date which do not prohibit the
Company or any of its Subsidiaries and (ii) any future legislative enactments
and regulations which do not prohibit the Company or any of its Subsidiaries,
taken as a whole, from conducting its business as presently conducted shall not
be deemed to materially and adversely affect its business, operations, prospects
or financial condition.
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1.32 Taxes. The Company and each of its Subsidiaries have filed or
caused to be filed all tax returns that are required to be filed and have paid
all taxes shown to be due and payable on said returns or on any assessment
relating to such tax returns made against it or any of its properties and all
other taxes, assessments, fees or other charges imposed on it or any of its
properties by any Governmental Authority or agency which are not yet delinquent,
except for any taxes, assessments, fees or other charges which are being
contested in good faith by appropriate proceedings and for which adequate
reserves, to the extent required by GAAP, have been established; no tax liens
have been filed other than Liens for taxes on property not yet delinquent, and,
to the knowledge of the Company, no material claims are being asserted with
respect to any such taxes, fees or other charges, except for any claims which
are being contested in good faith by appropriate proceedings and for which
adequate reserves, to the extent required by GAAP, have been established.
1.33 Margin Regulations. Neither the Company nor any of its
Subsidiaries is engaged, principally or as one of its important activities, in
the business of extending credit for the purpose of "purchasing" or "carrying"
any "margin stock" within the respective meanings of each of the quoted terms
under Regulations U and T of the Board of Governors of the Federal Reserve
System. No part of the proceeds of any Loans hereunder will be used directly or
indirectly for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulations U and T of the
Board of Governors of the Federal Reserve System or for any purpose which
violates, or which would be inconsistent with, the provisions of the regulations
of such Board of Governors. Without limiting the foregoing, the Company shall
not use the proceeds of any Loan hereunder for the purchase of the Company's
common stock other than for the purposes of retiring such stock, unless the
Company maintains an amount of Collateral sufficient to ensure that such Loan
will not result in a violation of such regulations of the Board of Governors.
1.34 Investment Company Act. Neither the Company nor any of its
Subsidiaries is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
1.35 Compliance with ERISA. Each member of the ERISA Group has
fulfilled its obligations under the minimum funding standards of ERISA and the
Code with respect to each Single Employer Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and the Code
with respect to each Single Employer Plan. No member of the ERISA Group has (i)
sought a waiver of the minimum funding standard under Section 412 of the Code in
respect of any Single Employer Plan, (ii) failed to make any contribution or
payment to any Single Employer Plan or Multiemployer Plan, or made any amendment
to any Single Employer Plan, which has resulted in, or could result in, the
imposition of a Lien or the posting of a bond or other security under ERISA or
the Code, (iii) incurred any liability under Title IV of ERISA with respect to
any Plan which has not been paid in full, other than a liability to the PBGC for
premiums under Section 4007 of ERISA, (iv) taken any steps to terminate any
Single Employer Plan or to appoint a receiver to administer any such Plan, or to
withdraw from any Multiemployer Plan or initiated steps to do so or (v) adopted
any amendment to a Plan with respect to which security is required pursuant to
Section 401 (a) (29) of the Code or initiated any steps to do so. No Reportable
Event or non-exempt "prohibited transaction" (as defined in Section 4975 of the
Code or Section 406 of ERISA) has occurred with respect to any Single Employer
Plan or, to the best of its knowledge, any Multiemployer Plan. No condition
exists under which any member of the ERISA Group could have liability under
Section 4069 or 4212 of ERISA.
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1.36 Environmental Matters. (a) To the best of the Company's knowledge,
the Company and each of its Subsidiaries has complied and is currently in
compliance with all Environmental Laws; (b) to the best of the Company's
knowledge, no solid or hazardous or toxic wastes or hazardous substances (as
defined in the Comprehensive Environmental Response, Compensation and Liability
Act, as amended ("CERCLA"), or the Resources Conservation and Recovery Act, as
amended ("RCRA"), or under any successor or similar law or any applicable state
or local law) are processed, discharged, stored, treated, disposed of, or
managed at any facility owned, leased or operated by the Company or any of its
Subsidiaries or, at the request or behest of the Company or any of its
Subsidiaries, at any adjoining site, so as to require a license, permit or
authorization of any type from any Governmental Authority other than licenses,
permits or authorizations which have been obtained or applied for or where the
failure to obtain such licenses, permits or authorizations could not have a
material adverse effect on the Company or any of its Subsidiaries; and (c) no
claim has been made against the Company or any of its Subsidiaries or, to the
best of its knowledge, against any predecessor in respect of any "facility"
owned, leased or operated by it under CERCLA, or under a federal, state, local
or municipal statute, ordinance or regulation in respect of the environment, or
by the Environmental Protection Agency or by any federal, state, local or
municipal enforcement agency having jurisdiction over the protection of the
environment, or by any private Person bringing an action in respect of or under
any law designed to protect the environment. To the best of the Company's
knowledge, the Company and each of its Subsidiaries is in compliance with all
applicable zoning and land use and building codes, laws, rules, regulations and
ordinances.
1.37 Disclosure. No representation or warranty made by the Company in
this Agreement, or by the Company or any Significant Subsidiary in the Related
Documents to which it is a party or in any other document furnished from time to
time in connection herewith or therewith, contains any misrepresentation of a
material fact or omits to state any material fact necessary to make the
statements herein or therein not misleading. There is no fact known to the
Company which materially adversely affects, or which reasonably could be
expected in the future to materially adversely affect, the business, operations,
prospects or financial condition of the Company or any of its Subsidiaries or
the ability of the Company and its Subsidiaries to perform their respective
obligations under this Agreement and the Related Documents.
1.38 Collateral. The Security Agreement and each Subsidiary Security
Agreement creates or will create a valid security interest in favor of the
Collateral Agent, acting on behalf of the Agent and the Lenders, in the
Collateral described therein securing the payment of the obligations secured
thereby. All action necessary to perfect the security interest of the Collateral
Agent, for the benefit of the Agent and the Lender, in such Collateral has been,
or will be, taken, and such security interest has, or will have, priority over
all other Liens except any perfected Liens arising in connection with any
Capitalized Lease entered into by the Company.
1.39 Employment Agreements. Set forth on Schedule 5.18 is a complete
list of agreements between the Company or any of its Significant Subsidiaries
and any other Person providing for employment, severance, deferred or bonus
payments, stock options or similar payments or arrangements for the benefit of
any officer or director of the Company or any of its Significant Subsidiaries. A
true, correct and complete copy of each agreement or other document
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listed on Schedule 5.18 has been provided to the Agent which shall provide
copies to each of the Lenders.
1.40 Dividends. Since June 30, 1994, the Company has not declared or
paid any dividends (other than dividends declared but not paid on the Series E
Preferred Stock and the Series F Preferred Stock of the Company) or made any
other distributions in respect of its capital stock or redeemed, retired,
purchased or otherwise acquired for value any shares of its capital stock other
than with respect to the Series G Preferred Stock.
1.41 Year 2000. The Company and its Subsidiaries have reviewed the
effect of the possible failure of computer software, hardware and firmware
systems and equipment containing embedded computer chips to properly receive,
transmit, process, manipulate, store, retrieve, re-transmit or in any other way
utilize data and information due to the occurrence of the year 2000 or the
inclusion of dates on or after January 1, 2000. To the best of the Company's
knowledge, the Company's and its Subsidiaries' computer and other systems used
in its business operations currently operate in a manner so that as of the date
hereof on and after December 31, 1999 the Company and its Subsidiaries will be
able to operate their business in the same manner as they are operating as of
the date hereof.
1.42 Use of Proceeds. The Company shall use the proceeds of each Loan
for (i) working capital and general corporate purposes and (ii) the purchase of
the Company's common stock; provided however, no more than $10,000,000 of the
Total Commitment shall be used for the purpose described in subdivision (ii) of
this Subsection 5.21.
SECTION 6. AFFIRMATIVE COVENANTS
The Company hereby agrees that, so long as the Commitments remain in
effect, and until the payment and performance in full of all Obligations:
1.43 Financial Statements. The Company will furnish to the Agent (which
will provide copies to each Lender):
(a) as soon as available, but in any event within 90 days after the end
of each fiscal year of the Company, a copy of (i) the audited consolidated
balance sheet of the Company as at the end of such year and the related audited
consolidated statements of income, stockholders' equity and cash flows for such
year, setting forth in each case in comparative form the figures as of the end
of and for the previous year, all in reasonable detail, certified, without
qualification, by a firm of independent accountants of nationally recognized
standing acceptable to the Lenders; provided however, that the firm
PricewaterhouseCoopers LLP shall be acceptable to the Lenders; and
(b) as soon as available, but in any event not later than 45 days after
the end of each of the first three fiscal quarters of each fiscal year of the
Company, a copy of the unaudited consolidated balance sheet of the Company as at
the end of each such fiscal quarter and the related unaudited consolidated
statements of income, stockholders' investment and cash flows of the Company for
such quarter and the portion of the fiscal year through such date, all in
reasonable detail and setting forth in comparative form the figures as of the
end of and for the corresponding
32
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period of the previous year, certified as to fairness of presentation by the
chief financial officer, treasurer or controller of the Company;
all such financial statements to be complete and correct in all material
respects (subject, in the case of interim statements, to normal year-end audit
adjustments) and to be prepared in reasonable detail and in accordance with GAAP
(except, in the case of interim financial statements, that such financial
statements need not contain footnotes and shall be prepared substantially in
accordance with GAAP) applied consistently throughout the periods reflected
therein (except as approved by the Company's independent accountants and
disclosed therein). In addition to the financial statements required to be
delivered pursuant to (a) and (b) above, the Company agrees to deliver
consolidating financial statements (including a balance sheet and statements of
income, stockholders' investment and cash flows) at the same time it delivers
its consolidated financial statements if the Company begins preparing
consolidating financial statements in the ordinary course of its business or
otherwise for filing with the Securities and Exchange Commission.
1.44 Certificates; Other Information. The Company will furnish to the
Agent (which will provide copies to each Lender):
(a) concurrently with the delivery of the financial statements referred
to in Subsection 6.1(a) (or on such later date as received by the Company), (i)
a certificate of the independent accountants reporting on such financial
information stating that in the course of performing its audit of the Company's
financial statements, no knowledge was obtained of any Default, except as
specified in such certificate and (ii) a copy of the management letter delivered
to the Company by its independent accountants in connection with such financial
statements or, if there is no management letter, a letter from such independent
accountants that no material weakness in internal control came to the attention
of such accountants during such examinations other than weaknesses that have
been corrected;
(b) concurrently with the delivery of the financial statements referred
to in Subsections 6.1(a) and (b), a certificate signed by the chief financial
officer of the Company setting forth computations in reasonable detail
demonstrating compliance with the financial covenants set forth in Section 7,
together with a statement that, to the best of such officer's knowledge, the
Company during the relevant period has observed or performed all of its
covenants and other agreements hereunder, and satisfied every condition
contained in this Agreement to be observed, performed or satisfied by it, and
that such officer has obtained no knowledge of any Default except as described
in such certificate (any such description to be in reasonable detail and to
include a description of any action to be taken with respect to such Default);
(c) promptly, copies of any regular and periodic financial information,
and any other information and reports, which the Company shall send or make
generally available to its security holders;
(d) within 45 days after the end of each fiscal year of the Company, a
report in form and substance reasonably satisfactory to the Agent outlining any
changes in the Company's insurance coverage during such year and any changes
planned in the subsequent fiscal year which materially affect such insurance
coverage;
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(e) promptly, such additional financial and other information as the
Agent or any Lender (acting through the Agent) may from time to time reasonably
request; and
(f) no less frequently than monthly, in the event a Level II Borrowing
or a Level III Borrowing remains outstanding, a certificate from an appropriate
officer of the Company indicating the value of the Company's cash and Eligible
Securities.
It is understood that the foregoing certificates may be made by officers of the
Company in reliance on information provided by other officers, employees or
agents of the Company and its Subsidiaries. As long as any of the foregoing
certificates is provided in good faith and without actual knowledge that such
certificate contains any inaccuracy or material omission, the officer signing
such certificate shall not be personally liable to the Agent or any Lender for
omissions or inaccuracies contained in any such certificate.
1.45 Compliance with Laws. The Company will comply, and cause each of
its Subsidiaries to comply, with all laws, rules and regulations applicable to
it (including, without limitation, all Environmental Laws) , non-compliance with
which could, singly or in the aggregate, materially adversely affect its
business, operations, prospects or financial condition or which could impair the
ability of the Company or any Subsidiary to perform its obligations under this
Agreement, the Notes or any of the other Related Documents to which it is a
party.
1.46 Conduct of Business and Maintenance of Existence. The Company will
continue, and cause each of its Subsidiaries to continue, to engage in business
of the same general type as now conducted by it and reasonable extensions
thereof and preserve, renew and keep in full force and effect its corporate
existence and take all reasonable action to maintain, and cause each of its
Subsidiaries to maintain, all rights, privileges, contracts, copyrights,
patents, trademarks, trade names and franchises necessary or desirable in the
normal conduct of its business.
1.47 Maintenance of Property; Insurance. The Company will keep, and
cause each of its Subsidiaries to keep, all property useful and necessary in its
business in good working order and condition; maintain, and cause each of its
Subsidiaries to maintain, with financially sound and reputable insurance
companies insurance on all its and its Subsidiaries' property in at least such
amounts and against at least such risks (but including, in any event, public
liability and product liability insurance if available) as are usually insured
against in the same general area by companies engaged in the same or a similar
business and furnish to the Agent on behalf of the Lenders, upon written
request, full information as to all insurance carried. All insurance policies
required by this Subsection 6.5 shall be in form and substance and issued by
companies reasonably satisfactory to the Agent and the Lenders. The Company may
maintain the coverages required by this Subsection 6.5 under blanket policies
covering the premises and other locations owned or operated by the Company or
any of its Subsidiaries if the terms of such blanket policies otherwise comply
with the provisions of this Subsection 6.5. Each policy of insurance required
under this Subsection 6.5 shall provide that it may not be canceled or otherwise
terminated without at least 30 days' prior written notice (or such other period
as the Lenders may agree) to the Collateral Agent and shall permit (but not
require or obligate) the Collateral Agent to pay any premium therefor within 10
days after receipt of any notice stating that such premium has not been paid
when due. Settlement of any
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claim under any of the insurance policies referred to in this Subsection 6.5
involving a loss of $250,000 or more (in the reasonable judgment of the Agent)
shall require the prior written approval of the Agent and all the Lenders. At
least 30 days prior to the expiration of any insurance policy (or such other
period as the Lenders may agree), a policy or policies renewing or extending
such expiring policy or renewal or extension certificates shall be delivered to
the Collateral Agent, together with a receipt showing payment of the premium
therefor. The Company shall not purchase separate insurance policies concurrent
in form or contributing in the event of loss with those policies required to be
maintained under this Subsection 6.5 unless the policy evidencing such insurance
otherwise complies with the requirements of this Subsection 6.5. The Company
shall immediately notify the Agent whenever any such separate insurance policy
is obtained and shall promptly deliver to the Collateral Agent the policy or
certificate evidencing such insurance. The Company shall, immediately upon
receipt of any written notice of any failure by the Company to pay any insurance
premium in respect of any insurance required to be maintained under this
Subsection 6.5, furnish a copy of such notice to the Agent and the Collateral
Agent. Upon the occurrence of an Event of Default hereunder, all insurance
policies shall name the Collateral Agent, for the benefit of the Agent and the
Lenders, as sole loss payee and as an additional insured under all such policies
and thereafter the Collateral Agent shall continue to be named as sole loss
payee and as an additional named insured whether or not an Event of Default
shall be continuing.
1.48 Inspection of Property; Books and Records; Discussions. (a) The
Company will keep, and cause each of its Subsidiaries to keep, proper books and
records and accounts in which full, true and correct entries in conformity with
GAAP consistently applied shall be made of all dealings and transactions in
relation to its business and activities; and (b) permit, and cause its
Subsidiaries to permit, representatives and agents of the Agent or any Lender to
visit and inspect any of its properties and examine and make abstracts from any
of its books and records upon reasonable notice at any reasonable time and as
often as may reasonably be desired, and to discuss its business, operations,
properties and financial and other condition with its officers, employees and
independent accountants.
1.49 Notice of Certain Events. The Company will furnish to the Agent
(which shall provide copies to each Lender):
(a) promptly, and in any event within two Business Days of obtaining
knowledge thereof, notice of the occurrence of any Default, which notice shall
be accompanied by a reasonably detailed description of such Default and of any
action to be taken with respect thereto;
(b) promptly, and in any event within five Business Days of obtaining
knowledge thereof, notice of any (i) litigation, investigation or proceeding
which may exist at any time between the Company or any of its Subsidiaries and
any Governmental Authority or other Person, which if adversely determined would
have a material adverse effect on the business, operations, prospects or
financial condition of the Company or any of its Subsidiaries or on the ability
of the Company to perform its obligations under this Agreement, the Notes or any
of the other Related Documents to which it is a party, (ii) any litigation,
investigation or proceeding which questions the validity or enforceability of
this Agreement or any of the Related Documents, (iii) any litigation or
proceeding potentially adversely affecting the Company or any of its
Subsidiaries (A) if the amount involved among all such litigations or
proceedings in the aggregate is $5,000,000 or more or (B) in which
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injunctive or similar relief is sought, or (iv) any judgment or decree entered
against the Company or any of its Subsidiaries (A) involving a liability of
$1,000,000 or more (singly or in the aggregate) to the extent not paid or fully
covered by insurance for which the insurer has accepted liability in writing or
(B) in which injunctive or similar relief is granted;
(c) if and when the Company knows that any member of the ERISA Group
(i) gives or is required to give notice to the PBGC of any Reportable Event with
respect to any Single Employer Plan which might constitute grounds for a
termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Single Employer Plan has given or is required to give
notice of any such Reportable Event, a copy of the notice of such Reportable
Event given or required to be given to the PBGC; (ii) receives notice of
complete or partial withdrawal liability under Title IV of ERISA with respect to
any Multiemployer Plan or notice that any Multiemployer Plan is in
reorganization, is insolvent or has been terminated, a copy of such notice;
(iii) receives notice from the PBGC under Title IV of ERISA of an intent to
terminate, impose liability (other than for premiums under Section 4007 of
ERISA) in respect of, or appoint a trustee to administer, any Single Employer
Plan, a copy of such notice; (iv) applies for a waiver of the minimum funding
standard under Section 412 of the Code, a copy of such application; (v) gives
notice of intent to terminate any Single Employer Plan under Section 4041(c) of
ERISA, a copy of such notice and other information filed with the PBGC; (vi)
gives notice of withdrawal from any Single Employer Plan pursuant to Section
4063 of ERISA, a copy of such notice; or (vii) fails to make any material
payment or contribution to any Single Employer Plan or Multiemployer Plan or
makes any amendment to any Single Employer Plan which has resulted or could
result in the imposition of a Lien or the posting of a bond or other security, a
certificate of the chief financial officer of the Company setting forth details
as to such occurrence;
(d) promptly, and in any event, within five Business Days of obtaining
knowledge thereof, notice of any occurrence or development which causes the
representation contained in Subsection 5.15 to be incorrect in any material
respect;
(e) promptly, and in any event at least five Business Days prior to the
filing thereof with any Governmental Authority, copies of any amendment or
supplement to its charter;
(f) promptly, and in any event within five Business Days after
obtaining knowledge thereof, notice of any change or proposed change in any law,
statute, rule or regulation applicable to the Company or any of its
Subsidiaries, including, without limitation, any law, statute, rule or
regulation governing automatic renewals of membership or contract terms, that
has or may reasonably be expected to have a material adverse effect on the
business, operations, prospects or financial condition of the Company or any of
its Subsidiaries; and
(g) promptly, and in any event, within five Business Days of obtaining
knowledge thereof, notice of any material adverse change in the business,
operations, prospects or financial condition of the Company or any of its
Subsidiaries.
Each notice pursuant to this Subsection 6.7 shall be accompanied by a statement
of an appropriate officer of the Company setting forth details of the occurrence
referred to therein and stating what action the Company or, if applicable, the
member of the ERISA Group proposes to take with respect thereto.
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1.50 Payment of Taxes and Claims. The Company will pay and discharge,
and cause each of its Subsidiaries to pay and discharge, promptly all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits or upon any of its properties, as well as all lawful claims
for labor, materials and supplies which, if unpaid, will by law become a Lien
upon any of its properties; provided that the payment of any such tax,
assessment, charge, levy or claim shall not be required so long as the amount,
applicability or validity thereof shall be contested in good faith by
appropriate proceedings and adequate reserves are established with respect
thereto in accordance with GAAP.
1.51 Security. The Company will (a) maintain the Collateral Agent's
security interest in the Collateral, on behalf of the Agent, (b) maintain a
minimum deposit of 50% of the Total Commitment in cash and Eligible Securities
with the Agent and (c) cause any Subsidiary which becomes a Significant
Subsidiary after the Closing Date to duly execute and deliver to the Agent a
Subsidiary Security Agreement and Subsidiary Guaranty along with any opinions,
corporate documents, certificates and other documents reasonably requested by
the Agent and its special counsel in form and substance satisfactory to the
Agent and its special counsel within 30 days of such Subsidiary being deemed a
Significant Subsidiary; provided however, if a Person shall be deemed a
Significant Subsidiary prior to the acquisition of such Person by the Company,
the Company shall cause such documents to be delivered to the Agent within 30
days of the closing of such acquisition.
1.52 Use of Proceeds. The proceeds of the Loans shall be used (a) for
working capital and general corporate purposes and (b) for the purchase of the
Company's common stock; provided however, no more than $10,000,000 shall be used
for the purpose described in subdivision (b) of this Subsection 6.10.
1.53 Further Assurances. The Company will take all such further actions
and execute and file or record, at its own cost and expense, all such further
documents and instruments as the Agent or any Lender may at any time reasonably
determine may be necessary or advisable; and shall do, execute, acknowledge,
deliver, record, register and re-register any and all such further acts, deeds,
conveyances, estoppel certificates, transfers, certificates, assurances and
other instruments as the Agent or any Lender may reasonably require from time to
time in order to carry out more effectively the purposes of this Agreement and
the other Related Documents.
1.54 Determination of Significant Subsidiary. For purposes of
determining whether a Subsidiary is a Significant Subsidiary for purposes of
this Agreement, the Company shall make such a determination (i) within 60 days
of the end of each fiscal year of the Company by conducting a review of each of
its Subsidiaries as of the end of such fiscal year, and (ii) prior to the
acquisition of a Person which shall become a Subsidiary of the Company upon such
acquisition as of the end of the then most recently completed 12-month period.
The Company shall promptly, and in any case within 5 days, notify the Agent of
its determination. Once a Subsidiary becomes a Significant Subsidiary, it shall
thereafter remain a Significant Subsidiary until the Company and each Lender
agree that such Subsidiary shall no longer be a Significant Subsidiary for
purposes of this Agreement.
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SECTION 7. NEGATIVE COVENANTS
The Company hereby agrees that, so long as the Commitments remain in effect, and
until the payment and performance in full of all Obligations:
1.55 Negative Pledge. (a) The Company will not, and will not permit any
of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon
any of its property, assets or revenues, whether now owned or hereafter
acquired, except for:
(i) Liens created pursuant to the Related Documents;
(ii) Liens arising under any Capitalized Lease permitted under
Subsection 7.7;
(iii) Liens constituting purchase money security interests
that secure Indebtedness in an amount not to exceed in the aggregate $1,000,000
at any time; provided that each such lien covers only the particular equipment
or property purchased with such Indebtedness;
(iv) Liens for taxes, assessments or governmental charges or
claims not yet delinquent or Liens for taxes, assessments or governmental
charges or claims being contested in good faith and by appropriate proceedings
for which adequate reserves, as may be required by GAAP, have been established;
(v) Deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other types of
social security, or to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, government contracts, performance and
return-of-money bonds and other similar obligations incurred in the ordinary
course of business (exclusive of obligations in respect of the payment for
borrowed money or the equivalent);
(vi) Liens for secured Indebtedness (other than arising in
connection with this Agreement and the Related Documents) not exceeding in the
aggregate $1,000,000 at any time; and
(vii) The Lien created pursuant to a Security Agreement dated
June 30, 1999 in favor of First Union National Bank; provided such Lien covers
only the collateral described in such Security Agreement as of the date hereof.
(b) The Company will not, and will not permit any of its
Subsidiaries to, enter into any agreement prohibiting the creation or assumption
of any Liens upon its property or assets whether now owned or hereafter
acquired, other than this Agreement and the Related Documents.
1.56 Merger. The Company will not, and will not permit any of its
Subsidiaries to, liquidate or dissolve or merge with or into or consolidate with
any other Person, or agree to do any of the foregoing. For purposes of this
Subsection 7.2, the term "merge" includes but is not limited to a sale of all or
substantially all assets, or substantially all operating assets, to another
Person or to Persons under common control.
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1.57 Sale of Assets. The Company will not, and will not permit any of
its Subsidiaries to, sell, lease, assign, transfer, or otherwise dispose of any
of its now owned or hereafter acquired assets (including, without limitation,
shares of stock of other Persons owned by it and leasehold interests and the
ownership or control of its financial interest in memberships sold by the
Company or any of its Subsidiaries and contracts evidencing such memberships),
except for:
(i) inventory disposed of in the ordinary course of
business,
(ii) old or outdated equipment to be replaced by new
equipment,
(iii) assets no longer used or useful in the conduct of its
business.
Notwithstanding the foregoing, it is understood that in no event shall the
Company or any of its Subsidiaries sell, lease, assign, transfer, or otherwise
dispose of any of its now or hereafter acquired assets, cash or Eligible
Securities to an Affiliate pursuant to subsection (iii) above.
1.58 Loans and Investments. The Company will not, and will not permit
any of its Subsidiaries to, at any time make or suffer to remain outstanding any
loan or advance to, or purchase, acquire or own any stock, bonds, notes or
securities of, or any partnership interest (whether general or limited) in, or
acquire all or substantially all of the business or assets of or any other
interest in, or make any capital contribution to, any other Person, or agree,
become or remain liable to do any of the foregoing, except that the Company
shall be permitted to make investments in Eligible Securities and except as
permitted pursuant to Subsection 7.14 hereof.
1.59 Restricted Payments. The Company will not, and will not permit any
of its Subsidiaries to, declare any dividend on, or make any payment on account
of, or set apart assets for a sinking or other analogous fund for the purchase,
redemption, defeasance, retirement or other acquisition of, any shares of any
class of stock of the Company or any option or warrant thereon, whether now or
hereafter outstanding, or make any other distribution in respect thereof or on
any option or warrant thereon, either directly or indirectly, whether in cash or
property or in obligations of the Company or such Subsidiary.
1.60 Transactions with Affiliates. The Company will not, and will not
permit any of its Subsidiaries to, enter into any transaction, including,
without limitation, any purchase, sale, lease or exchange of property or the
rendering of any service, with any Affiliate unless such transactions are
otherwise permitted under this Agreement, are in the ordinary course of its
business and are upon fair and reasonable terms no less favorable to it than it
would obtain in a comparable arm's-length transaction with a Person not an
Affiliate.
1.61 Indebtedness. The Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume, Guaranty, suffer
to exist, or otherwise become or remain directly or indirectly liable with
respect to, any Indebtedness except:
(a) the Obligations;
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(b) Capitalized Leases to which the Company or any Subsidiary is a
party which, in the aggregate, are less than or equal to $5,000,000;
(c) Indebtedness not exceeding in the aggregate $1,000,000 at any
time;
(d) Indebtedness secured by the purchase money security interests
permitted pursuant to Subsection 7.1(iii) not to exceed in the aggregate
$1,000,000 at any time;
(e) any account payable of the Company or its Subsidiaries which
is more than 60 days past due provided (i) the amount or validity of such
account payable is being disputed in good faith by the Company or the applicable
Subsidiary, (ii) adequate reserves with respect to such account payable have
been established on the books and records of the Company and its Subsidiaries in
accordance with GAAP and (iii) the aggregate amount of all such accounts payable
does not exceed $200,000.
1.62 Fiscal Year. The Company will not change its fiscal year.
1.63 Amendment of Certain Documents. The Company will not, and will not
permit any of its Significant Subsidiaries to amend, modify or change its
charter (including, without limitation, by the filing of any certificate of
designation) or by-laws, or any agreement with respect to its capital stock
(including, without limitation, any shareholders or other similar agreement), or
enter into any new agreement with respect to its capital stock.
1.64 Operating Leases. The Company will not, and will not permit any of
its Subsidiaries to, enter into, incur or assume (whether directly or
contingently) obligations under Operating Leases if the minimum rental
commitment under non-cancelable Operating Leases of the Company and its
Subsidiaries for any fiscal year would exceed $7,500,000.
1.65 Debt Coverage Ratio. The Company will not permit the ratio of (a)
total Indebtedness of the Company and its Subsidiaries, determined on a
consolidated basis, to (b) Net Cash Provided by Operating Activities Before
Changes in Working Capital to be greater than 1.5 to 1.0 as of the end of any
Test Period.
1.66 Fixed Charge Coverage Ratio. The Company will not permit its Fixed
Charge Coverage Ratio to be less than 4.0 to 1.0 as of the end of any Test
Period.
1.67 ERISA. The Company will not, and will not permit its Subsidiaries
or any other member of the ERISA Group to, adopt, maintain or sponsor or agree
to contribute to, or otherwise have any liability with respect to, any Plan
other than as heretofore been disclosed to the Agent and the Lenders, unless
each of the Lenders provides prior written consent to such act.
1.68 Acquisitions. The Company will not, and will not permit its
Subsidiaries to acquire all or substantially all of the assets or capital stock
of another Person (i) from the Closing Date to and including August 31, 2001 if
the total consideration for such acquisition is greater than $30,000,000 without
the consent of each Lender; provided however, the Company may acquire all or
substantially all of the assets or capital stock of Encore Marketing
International Inc., if, after
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giving effect to such transaction, no Default or Event of Default would exist
and (ii) after August 31, 2001 if the total consideration for such acquisition
is greater than 10% of the consolidated Revenues of the Company and its
Subsidiaries as of the most recently completed 12-month period without the
consent of each Lender.
SECTION 8. EVENTS OF DEFAULT
1.69 Events of Default. Each of the following events shall constitute
an Event of Default:
(a) The Company shall fail to pay (i) any principal of any
Note or any Loan when due (whether at stated maturity or otherwise) in
accordance with the terms thereof or hereof, (ii) any interest on any Note or
any Loan within three Business Days after the date on which such amount becomes
due in accordance with the terms hereof or thereof, or (iii) any other amount
payable hereunder within three Business Days after the date on which any such
amount becomes due in accordance with the terms hereof; or
(b) Any representation or warranty made or deemed made by the
Company herein, or by the Company in any Related Document to which it is a party
or in any certificate, document or financial or other statement furnished at any
time under or in connection with this Agreement or any of the Related Documents
to which it is a party, shall prove to have been incorrect in any material
respect on or as of the date made or deemed made; or
(c) The Company shall default in the observance or performance
of any covenant contained in Subsections 6.4, 6.5, 6.8 or 6.10 or Section 7
hereof or in the Security Agreement and such default shall continue unremedied
for a period of 15 days; or
(d) The Company shall default in the observance or performance
of any other agreement or covenant contained in this Agreement or in any Related
Document to which it is a party, and such default shall continue unremedied for
a period of 30 days after notice thereof to the Company by the Agent or any
Lender; or
(e) (i) The Company or any or its Subsidiaries shall, with
respect to any Indebtedness (other than the Notes) having an outstanding
aggregate principal amount in excess of $200,000, (A) default in any payment of
principal of or premium or interest on any such Indebtedness, beyond the grace
period (not to exceed 30 days), if any, provided in the instrument or agreement
under which such Indebtedness was incurred, or (B) default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event shall occur or any other condition shall
exist, the effect of which default or other event or condition is to cause, or
to permit the holder or holders of such Indebtedness (or a trustee or agent on
behalf of such holder or holders) to cause, with the giving of notice if
required, such Indebtedness to become due prior to its stated maturity, or (ii)
any such Indebtedness shall be declared to be due and payable, or required to be
prepaid, redeemed, purchased or deceased (other than by a regularly scheduled
required prepayment, redemption, purchase or defeasance) prior to the stated
maturity thereof; or
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(f) (i) The Company or any of its Subsidiaries shall commence
any case, proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian or other similar official
for it or for all or any substantial part of its assets, or the Company or any
of its Subsidiaries shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against the Company or any of its
Subsidiaries any case, proceeding or other action of a nature referred to in
clause (i) above which results in the entry of an order for relief or any such
adjudication or appointment; or (iii) the Company or any of its Subsidiaries
shall take any action in furtherance of, or indicating its consent to, approval
of, or acquiescence in, any of the acts set forth in clause (i) or (ii) above;
or (iv) the Company or any of its Subsidiaries shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts as they
become due; or
(g) (i) Any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to any
Single Employer Plan, (ii) a notice is provided or application is made with
respect to a "distress termination" of a Single Employer Plan under Section 4041
of ERISA, (iii) the PBGC has initiated proceedings to terminate a Single
Employer Plan or cause a trustee to be appointed to administer a Single Employer
Plan, (iv) any Lien is imposed on the assets of the Company or any member of the
ERISA Group relating to any termination of a Single Employer Plan or failure to
make a contribution to a Single Employer Plan, (v) the Company or any member of
the ERISA Group shall incur any liability in connection with a withdrawal from,
or the insolvency or reorganization of, a Multiemployer Plan, (vi) any
Reportable Event or termination or other similar event or condition shall occur
or exist with respect to a Single Employer Plan or (vii) there shall occur any
"prohibited transaction" (as defined in Section 4975 of the Code) involving any
Single Employer Plan which results in a material liability of the Company for an
excise tax or civil penalty in connection therewith; or
(h) One or more judgments or decrees shall be entered against
the Company or any of its Subsidiaries involving in the aggregate a liability
(to the extent not paid or covered by insurance and for which the insurer has
accepted liability in writing) of $350,000 or more and all such judgments or
decrees shall not have been vacated, discharged, stayed or bonded (if required
in order to effect an appeal) pending appeal within 30 days from the entry
thereof; or
(i) Any change in any law, statute, rule or regulation shall
occur that has, or reasonably could be expected to (A) have, a material adverse
effect on the business, operations, prospects or financial condition of the
Company and its Subsidiaries taken as a whole, (B) prohibit or render invalid
the extension of the Final Maturity Date pursuant to Subsection 2.8, or (C)
prohibit or render invalid the practice of the automatic renewals of memberships
or contract terms; provided such law, statute, rule or regulation could
reasonably be expected to have a material adverse effect on the Company and its
Subsidiaries, taken as a whole); or
(j) The Collateral Agent, on behalf of the Agent and the
Lenders, does not have or ceases to have a valid and perfected first priority
security interest in the Collateral; or any of the Security Agreement, the
Pledged Securities Documents, any Subsidiary
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Guaranty or any Subsidiary Security Agreement shall cease to be in full force
and effect; or any Person shall assert that any of the Security Agreement, any
Subsidiary Guaranty or any Subsidiary Security Agreement is not valid and
enforceable in accordance with its terms; or
(k) Any representation or warranty made by any Subsidiary in
any Related Document to which it is a party or in any certificate, document or
financial or other statement furnished to the Agent or any Lender in connection
therewith shall prove to be incorrect in any material respect on or as of the
date made or deemed made or shall be breached; or
(l) Any Subsidiary shall default in the observance or
performance of any covenant or agreement contained in any Related Document to
which it is a party, and such default shall continue unremedied for a period of
30 days after notice thereof by the Agent or any Lender; or
(m) The Company shall fail to deliver to the Agent duly
executed agreements pursuant to Subsection 4.1(l)(ii) in a form reasonably
satisfactory to the Agent, the Lenders and each of their special counsel within
90 days of the Closing Date; provided however, failure by the Company to provide
such agreement with respect to the premises located at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
in Stamford, Connecticut shall not constitute an Event of Default hereunder if
the Company shall have attempted to obtain such agreement in good faith and with
due diligence and the landlord of such premises shall have refused to duly
execute such agreement.
1.70 Remedies. If any Event of Default shall occur and be continuing,
then, and in any such event, (a) if such event is an Event of Default specified
in Subsection 8.1(f), automatically the Commitments shall immediately terminate
and the Obligations shall immediately become due and payable, and (b) if such
event is any other Event of Default, either or both of the following actions may
be taken: (i) the Agent may, or upon the request of the Lenders the Agent shall,
by notice to the Company declare the Commitments to be terminated forthwith,
whereupon the Commitments shall immediately terminate; and (ii) the Agent may,
or upon the request of the Lenders the Agent shall, by notice of default to the
Company, declare the Obligations to be due and payable forthwith, whereupon the
same shall immediately become due and payable. In the event of a declaration by
the Agent pursuant to clause (b) (ii) above, the Agent may, and at the request
of the Lenders the Agent shall, enforce its rights and remedies hereunder and
under any other document or instrument delivered in connection herewith,
including directing the Collateral Agent to enforce any or all of its rights and
remedies under the Security Agreement, the Pledged Securities Documents, any
Subsidiary Guaranty and any Subsidiary Security Agreement. Except as expressly
provided above in this Subsection 8.2, presentment, demand, protest and all
other notices of any kind are hereby expressly waived.
1.71 Set-Off. In addition to any rights and remedies of the Agent or
the Lenders provided by law, the Agent and each Lender shall have the right,
without prior notice to the Company, any such notice being expressly waived by
the Company to the extent permitted by applicable law, upon the occurrence of
any Event of Default, to set off and apply against any indebtedness, whether
matured or unmatured, of the Company to the Agent or such Lender, any amount
owing from the Agent or such Lender at any of its branches or offices or from a
corporation controlling the Agent or such Lender to the Company at, or at any
time after, the occurrence of such Event of Default. The
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Agent and each Lender agrees promptly to notify the Company and the Agent after
any such set-off and application, provided that the failure to give such notice
shall not affect the validity of such set-off and application.
1.72 Default Interest. Notwithstanding any other provision of this
Agreement to the contrary, (a) if the Company shall fail to pay any amount owing
to the Agent or any Lender under this Agreement when due (whether at stated due
date, on acceleration or otherwise), then the Company will pay interest (before,
as well as after, judgment) on demand to the Agent or such Lender, as the case
may be, on the amount in default from the date such payment became due until
payment in full at a rate equal to the sum of the Base Rate plus 2% per annum,
such rate to change as and when the Base Rate changes and (b) if any Event of
Default shall occur, then during the period such Event of Default shall be
continuing, the rate of interest payable hereunder shall be the rate as provided
in clause (a) above.
SECTION 9. THE AGENT AND THE COLLATERAL AGENT
1.73 Appointment. Each Lender hereby irrevocably designates and
appoints each of the Agent and the Collateral Agent as the agents of such Lender
under this Agreement and the Related Documents, and each Lender irrevocably
authorizes the Agent and the Collateral Agent to take such action on its behalf
under the provisions of this Agreement and the Related Documents and to exercise
such powers and perform such duties as are delegated to the Agent or the
Collateral Agent, as the case may be, by the terms hereof or thereof, together
with such other powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary elsewhere in this Agreement, neither the Agent nor the
Collateral Agent shall have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any Related Document or
otherwise exist against the Agent or the Collateral Agent.
1.74 Delegation of Duties. The Agent and the Collateral Agent may
execute any of their duties under this Agreement and the Related Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. Neither the Agent nor the
Collateral Agent shall be responsible for the negligence or misconduct of any
agents or attorneys-in-fact selected by them with reasonable care except to the
extent otherwise required by Subsection 9.3.
1.75 Exculpatory Provisions. Neither the Agent nor the Collateral Agent
nor any of their respective partners, officers, directors, employees, attorneys,
agents, attorneys-in-fact or Affiliates shall be (i) liable for any action
lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement or any Related Document (except for its or such
Person's own gross negligence or willful misconduct), or (ii) responsible in any
manner to any of the Lenders for any recitals, statements, representations or
warranties made by the Company or any of its Affiliates or any officer thereof
contained in this Agreement or any Related Document or in any certificate,
report, statement or other document referred to or provided for in or received
by the Agent or the Collateral Agent under or in connection with this Agreement
or any Related Document or for the value, validity, effectiveness (except its
own due execution hereof), genuineness, enforceability or
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sufficiency of this Agreement or any Related Document or for any failure of the
Company to perform its obligations hereunder or thereunder. Except as otherwise
provided herein, neither the Agent nor the Collateral Agent shall be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any Related Document, or to inspect the properties, books or
records of the Company or any of its Affiliates. Neither the Agent nor the
Collateral Agent shall be responsible to any Lender for the effectiveness,
genuineness, validity, enforceability, collectibility or sufficiency of this
Agreement or any Related Document or for any representations, warranties,
recitals or statements made herein or therein or made in any written or oral
statement or any financial or other statements, instruments, reports,
certificates or any other documents in connection herewith or therewith
furnished, or made in reliance on information furnished by or on behalf of the
Company, by the Agent or the Collateral Agent to the Lenders or by or on behalf
of the Company to the Agent, the Collateral Agent or any Lender.
1.76 Reliance by Agent and Collateral Agent. The Agent and the
Collateral Agent shall be entitled to rely, and shall be fully protected in
relying, upon any Note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Company), independent accountants and other experts
selected by the Agent and the Collateral Agent. The Agent and the Collateral
Agent may deem and treat the payee of any Note as the owner thereof for all
purposes unless a written notice of assignment, negotiation or transfer thereof
shall have been filed with the Agent or the Collateral Agent. The Agent and the
Collateral Agent shall each be fully justified in failing or refusing to take
any action under this Agreement or any Related Document unless it shall first
receive such advice or concurrence of the Lenders as it deems appropriate or it
shall first be indemnified to its satisfaction by the Lenders against any and
all liability and expense (other than any liability or expense resulting from
the Agent's or the Collateral Agent's gross negligence or wilful misconduct)
which may be incurred by it by reason of taking or continuing to take any such
action. The Agent and the Collateral Agent shall in all cases be fully protected
in acting, or in refraining from acting, under this Agreement or any Related
Document in accordance with a request of the Lenders, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all future
holders of the Notes.
1.77 Notice of Failure to Perform. Unless the Agent has actual notice
of a Default, the Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or of the failure of the Company to satisfy any
condition to borrowing hereunder unless the Agent has received notice from a
Lender or the Company referring to this Agreement, describing such Default or
failure and stating that such notice is a "notice of failure to perform its
obligations". In the event that the Agent receives such a notice, the Agent
shall promptly give notice thereof to the Lenders. In the case of any Default,
the Agent shall take such action with respect to such Default as shall be
reasonably directed by the Lenders, provided, however, that unless and until the
Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action for the protection and preservation of the
Collateral as it shall deem advisable in the best interests of the Lenders. Each
Lender agrees that it shall not make any demand for repayment of any amounts
payable to such Lender hereunder unless each Lender agrees to make a demand for
repayment of all
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amounts payable to such Lender. Prior to taking any such actions, the Lenders
shall consult with each other and the Agent to determine the general plan of
action and the steps to be taken in connection with such action, and they shall
continue to consult with one another with respect thereto.
1.78 Credit Decision. Each Lender expressly acknowledges that neither
the Agent nor the Collateral Agent nor any of their respective partners,
officers, directors, employees, attorneys, agents, attorneys-in-fact or
Affiliates has made any representations or warranties to it and that no act by
the Agent or the Collateral Agent hereafter taken, including any review of the
affairs of the Company, shall be deemed to constitute any representation or
warranty by the Agent or the Collateral Agent to any Lender. Each Lender
represents to the Agent and the Collateral Agent that it has, independently and
without reliance upon the Agent, the Collateral Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Company and made its
own decision to make its Loans hereunder and enter into this Agreement. Each
Lender also represents that it will, independently and without reliance upon the
Agent, the Collateral Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other condition
and creditworthiness of the Company. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the Agent
hereunder or are furnished to the Agent pursuant to the terms hereof in
sufficient copies or counterparts for or for the account of the Lenders, the
Agent shall not have any duty or responsibility to provide any Lender with any
credit or other information concerning the business, operations, property,
financial and other condition or creditworthiness of the Company or any of its
Affiliates which may come into the possession of the Agent or any of its
partners, officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
1.79 Indemnification. The Lenders agree to indemnify the Agent and the
Collateral Agent (to the extent not reimbursed by the Company and without
limiting the obligation of the Company to do so), ratably according to their
respective Percentages of Total Commitment, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Notes)
be imposed on, incurred by or asserted against the Agent or the Collateral Agent
in any way relating to or arising out of this Agreement or the Related
Documents, or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by the Agent or the Collateral Agent under or in connection with any of the
foregoing; provided, however, that no Lender shall be liable for the payment of
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting solely
from the Agent's or the Collateral Agent's gross negligence or willful
misconduct. The agreements in this Subsection 9.7 shall survive the repayment of
the Obligations.
1.80 Individual Capacity. The Agent, the Collateral Agent and their
respective Affiliates may make loans to, accept deposits from and generally
engage in any kind of business with the
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Company and any of its Subsidiaries as though it were not the Agent or the
Collateral Agent. With respect to its Loans made or renewed by it and any Note
issued to it, the Agent and the Collateral Agent shall have the same rights and
powers under this Agreement and the Related Documents as any Lender and may
exercise the same as though it were not the Agent or the Collateral Agent, and
the terms "Lender" and "Lenders" shall include the Agent and the Collateral
Agent in their individual capacities.
1.81 Successor Agents. Subject to the last sentence of this Subsection
9.9, the Agent and the Collateral Agent may resign as Agent or Collateral Agent,
as the case may be, at any time by giving written notice thereof to the Lenders
and the Company and may be removed at any time with or without cause by the
Lenders, provided that no such resignation or removal shall become effective
until a successor Agent or Collateral Agent, as the case may be, shall have been
appointed and shall have accepted such appointment as provided in this
Subsection 9.9. Upon any such resignation or removal, the Lenders shall have the
right to appoint a successor Agent or Collateral Agent, as the case may be. If
no successor Agent or Collateral Agent shall have been so appointed by the
Lenders and shall have accepted such appointment within 30 days after the
retiring Agent's or Collateral Agent's giving of notice of resignation or the
Lenders' removal of the retiring Agent or Collateral Agent, then, upon five
Business Days' notice to the Company and the Lenders, the retiring Agent or
Collateral Agent may, on behalf of the Lenders, appoint a successor Agent or
Collateral Agent, as the case may be, which shall be a bank which maintains an
office in the United States, or a commercial bank organized under the laws of
the United States of America or of any State thereof, or any Affiliate of such a
bank, having a combined capital and surplus of at least $100,000,000. Upon the
acceptance of any appointment as Agent or Collateral Agent hereunder by a
successor Agent or Collateral Agent, such successor Agent or Collateral Agent,
as the case may be, shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent or Collateral Agent,
as the case may be, and the retiring Agent or Collateral Agent shall be
discharged from its duties and obligations under this Agreement. After the
retiring Agent's or Collateral Agent's resignation or removal hereunder as such
agent, the provisions of this Section 9 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was such agent under this
Agreement. Anything in this Subsection 9.9 to the contrary notwithstanding, so
long as the Company has not failed to perform its obligations under this
Agreement or under any Related Document, ▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ & Co. agrees
not to resign as Agent or Collateral Agent or to take any action in its capacity
as a Lender to remove itself as Agent or Collateral Agent.
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SECTION 10. GENERAL PROVISIONS
1.82 Amendments and Waivers Neither this Agreement, any Note, any other
Related Document, nor any terms hereof or thereof may be amended, supplemented
or modified except in accordance with the provisions of this Section 10.1. With
the written consent of the Agent or the Collateral Agent, as applicable, the
Company may, from time to time enter into written amendments, supplements or
modifications hereto and to the Notes and the other Related Documents or
changing in any manner the rights of the Lenders or of the Company hereunder or
thereunder or waiving, on such terms and conditions as the Agent or Collateral
Agent, as applicable, may specify in such instrument, any of the requirements of
this Agreement, the Notes or the other Related Documents or any Default or Event
of Default and its consequences; provided, however, that no such waiver and no
such amendment, supplement or modification shall reduce the amount or extend the
maturity of any Note, or reduce the rate or extend the time of payment of
interest thereon, or reduce any fee payable to any Lender hereunder, or change
the amount of any Lender's Percentage of Total Commitment, or amend, modify or
waive any provision of this Section 10.1, or release any Guaranty or any of the
Collateral, in each case without the written consent of the Agent and all of the
Lenders. Any such waiver and any such amendment, supplement or modification
shall apply equally to each of the Lenders and shall be binding upon the
Company, the Lenders, the Agent and all present and future holders of the Notes.
1.83 Notices Except as expressly otherwise provided herein, all
notices, requests and demands to or upon the respective parties hereto shall be
in writing (including by telecopy or telex) and shall be effective when actually
received at the following address in the case of the Company, the Agent and the
Collateral Agent, and at the address set forth in Schedule I in the case of the
other parties hereto, or in each case at such other address as may be hereafter
notified by the respective parties hereto and any future holders of the Notes:
The Company:
MemberWorks Incorporated
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇. - ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇, Esq.
MemberWorks Incorporated
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇. - ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III, Esq.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇'▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
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Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
The Agent:
▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Chief Credit Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
The Collateral Agent:
▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Chief Credit Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Any notice, request or demand received on a day which is not a Business Day
shall be deemed to have been received on the next following Business Day.
1.84 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Agent or any Lender, any right, remedy,
power or privilege hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights, remedies, powers
and privileges provided at law, in equity or otherwise.
1.85 Survival of Representations and Warranties All representations and
warranties made hereunder, in any Related Document and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the Related
Documents for a period of three (3) years after the repayment of the
Obligations.
1.86 Payment of Expenses and Taxes The Company agrees (a) to pay or
reimburse the Agent for all its out-of-pocket costs and expenses incurred in
connection with the preparation, execution and delivery of, and any amendment,
restatement, supplement or modification to, this Agreement and the Related
Documents, and the consummation of the transactions contemplated hereby and
thereby, including, without limitation, the reasonable fees and disbursements of
counsel to the Agent, (b) to pay or reimburse each Lender and the Agent for all
their out-of-pocket costs and expenses incurred in connection with the
enforcement or preservation of any rights under this Agreement or the Related
Documents, including, without limitation, reasonable fees and disbursements of
counsel to the Agent and to each Lender, (c) to pay, and indemnify and hold
harmless each Lender, the Agent and the Collateral Agent from and against, any
and all recording and filing fees and any and all liabilities with respect to,
or resulting from any delay in paying, documentary, stamp, excise and other
taxes (other than income taxes), if any, which may be payable
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or determined to be payable in connection with the execution and delivery of, or
consummation of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement or the Related Documents, and (d) to pay, and indemnify and hold
harmless each Lender, the Agent and the Collateral Agent from and against, any
and all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including, without limitation, reasonable
fees and disbursements of counsel) or disbursements of any kind or nature
whatsoever incurred with respect to the execution, delivery, enforcement,
performance and administration of this Agreement and the Related Documents (all
the foregoing, collectively, the "indemnified liabilities"), provided that the
Company shall have no obligation hereunder to the Agent, the Collateral Agent or
any Lender with respect to indemnified liabilities arising from the gross
negligence or willful misconduct of the Agent, the Collateral Agent or any such
Lender. The agreements in this Subsection 10.5 shall survive the repayment of
the Obligations.
1.87 Benefit of Agreement; Participations; Assignments (a) This
Agreement shall be binding upon and inure to the benefit of the Company, the
Lenders, the Agent, the Collateral Agent and their respective successors and
assigns, except that (i) the Company may not assign or transfer any of its
rights or obligations under this Agreement without the prior written consent of
each Lender and (ii) the Lenders may assign or transfer their respective rights
or obligations under this Agreement only as provided in paragraphs (b) and (c)
of this Subsection 10.6. Any Lender may from time to time change the office,
branch or agency of such Lender at which the Loans are made or carried; provided
that if at the time of any change from one office, branch or agency to another
the effect thereof would be to increase any amount payable by the Company under
this Agreement then such change shall not be made without the prior written
consent of the Company.
(b) Any Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time sell to one or more
banks or other entities ("Participants") participating interests in any Loan
owing to such Lender, any Note held by such Lender, or any other rights and
obligations of such Lender hereunder. In the event of any such sale by a Lender
of participating interests to a Participant, such Lender's rights and
obligations under this Agreement to the other parties under this Agreement shall
remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such Note for
all purposes under this Agreement, and the Company and the Agent shall continue
to deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement. The Company agrees that each
Participant shall be entitled to the benefits of Subsection 3.4 with respect to
its participation in the Loans outstanding from time to time; provided that no
Participant shall be entitled to receive any greater amount pursuant to such
Subsection 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. No Participant shall have the
right to consent to any amendment to, or waiver of, any provision of this
Agreement, except any such amendment or waiver which would require the consent
of all of the Lenders pursuant to Subsection 9.1.
(c) Subject to the last sentence of this paragraph (c), any Lender may,
in the ordinary course of its commercial banking business and in accordance with
applicable law, at any time sell to any Lender or to one or more additional
banks or financial institutions (each an "Assignee") all or
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any part of its rights and obligations under this Agreement and the Notes
pursuant to an assignment agreement between such Assignee and such transferor
Lender, substantially in the form of Exhibit F, with the consent of the Company
(which consent shall not be unreasonably withheld). Such assignment agreement
shall be executed by such Assignee and such transferor Lender and shall be
delivered to the Agent for acceptance by the Agent not less than five Business
Days before the proposed effective date of such assignment, together with the
payment of a $2,000 assignment fee for the Agent. Upon such execution, delivery,
acceptance and payment, from and after the effective date specified in such
assignment agreement, (x) the Assignee thereunder shall be a party hereto and,
to the extent of the portion of the rights and obligations of the transferor
Lender purchased by it, have the rights and obligations of a Lender hereunder
and under the Related Documents and (y) the transferor Lender thereunder shall,
to the extent of the portion of its rights and obligations so sold, be released
from its obligations under this Agreement (and, in the case of an assignment
agreement covering all or the remaining portion of a transferor Lender's rights
and obligations under this Agreement, such transferor Lender shall cease to be a
party hereto) . On or after the effective date specified in such assignment
agreement, upon request of the transferor Lender or the Assignee, the Company
shall issue a new Note to the transferor Lender and/or the Assignee. Anything in
this paragraph (c) notwithstanding, no transfer shall be made pursuant to this
paragraph (c) if (i) such transfer by any one transferor Lender to any one
Assignee which is not a Lender is in respect of less than $1,000,000 of the
rights and obligations of such transferor Lender, or (ii) when less than all of
the rights and obligations of such transferor Lender is transferred, the amount
held by any transferor Lender would be less than $1,000,000 after giving effect
to such transfer.
(d) Notwithstanding anything to the contrary contained in this
Agreement, any Lender may pledge, hypothecate or otherwise grant a security
interest in all or any part of its rights hereunder or under its Note to any
Federal Reserve Bank; provided that no such pledge, hypothecation or grant shall
relieve such Lender of any of its obligations under this Agreement.
1.88 Sharing of Payments If any Lender (a "benefitted Lender") shall at
any time receive any payment of all or part of its Loans, or interest thereon,
or receive any Collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, or otherwise) in a greater proportion than any such
payment to and Collateral received by any other Lender, if any, in respect of
such other Lender's Loans, or interest thereon, such benefitted Lender shall
purchase for cash from the other Lenders such portion of each such other
Lender's Loans, or shall provide such other Lenders with the benefits of any
such Collateral, or the proceeds thereof, as shall be necessary to cause such
benefitted Lender to share the excess payment or benefits of such Collateral or
proceeds ratably with each of the Lenders; provided, however, that if all or any
portion of such excess payment or benefits is thereafter recovered from such
benefitted Lender, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest. The
Company agrees, to the extent it may do so under applicable law, that each
Lender so purchasing a portion of another Lender's Loans may exercise all rights
of payment (including, without limitation, rights of set-off) with respect to
such portion as fully as if such Lender were the direct holder of such portion.
1.89 Counterparts. This Agreement may be executed in one or more
counterparts and by the different parties hereto on separate counterparts, all
of which counterparts taken together shall be deemed to constitute one and the
same instrument.
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1.90 Headings The Section and Subsection headings in this Agreement are
for convenience of reference only and shall not affect the interpretation
hereof.
1.91 Obligations Several. The rights and obligations of each Lender
hereunder is several, and no Lender shall be responsible for the obligations of
any other Lender hereunder. The amounts payable by the Company at any time
hereunder or under any Note to each Lender shall be a separate and independent
debt and each Lender shall be entitled to protect and enforce its rights arising
hereunder and thereunder and it shall not be necessary for any other Lender or
the Agent to consent to, or be joined as an additional party in, any proceedings
for such purpose. Nothing contained in this Agreement and no action taken by
Lenders pursuant hereto shall be deemed to constitute Lenders to be a
partnership, an association, a joint venture or any other kind of entity.
1.92 Governing Law THIS AGREEMENT AND THE NOTES AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO ITS CONFLICTS OF LAWS PRINCIPLES.
1.93 Submission to Jurisdiction The Company hereby irrevocably and
unconditionally: (i) submits for itself and its property in any legal action or
proceeding relating to this Agreement or any Related Document, or for
recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the courts of the State of New York, the
courts of the United States of America for the Southern District of New York,
and appellate courts from any thereof; (ii) consents that any such action or
proceeding may be brought in such courts, and waives any objection that it may
now or hereafter have to the venue of any such action or proceeding in any such
court or that such action or proceeding was brought in an inconvenient forum and
agrees not to plead or claim the same; (iii) agrees that service of process in
any such action or proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form of mail),
postage prepaid, to the Company at its address set forth in or designated
pursuant to Subsection 9.2; and (iv) agrees that nothing herein shall affect the
right to effect service of process in any other manner permitted by law or shall
limit the right to ▇▇▇ in any other jurisdiction.
1.94 Waiver of Jury Trial EACH OF THE PARTIES TO THIS AGREEMENT
IRREVOCABLY AND UNCONDITIONALLY WAIVES ALL RIGHT TO TRIAL BY JURY AS TO ANY
ISSUE RELATING HERETO IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. 1.1
1.95 Severability Any provision of this Agreement (or any Related
Document) that is illegal, invalid or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such illegality,
invalidity or unenforceability without invalidating the remaining provisions
hereof (or thereof) or affecting the legality, validity or enforceability of
such provision in any other jurisdiction. The parties hereto agree to negotiate
in good faith to replace any illegal, invalid or unenforceable provision of this
Agreement (or such Related Document) with a legal, valid and enforceable
provision that, to the extent possible, will preserve the economic bargain of
this
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Agreement (or such Related Document), or to otherwise amend this Agreement (or
such Related Document) to achieve such result.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
MEMBERWORKS INCORPORATED
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President and Chief
Financial Officer
per pro ▇▇▇▇▇ BROTHERS ▇▇▇▇▇▇▇▇ & CO., as
Agent
/s/ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ III
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Name: ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ III
Title: Senior Manager
53
Percentage of
Total Commitment Commitment Lenders
100% $10,000,000 per pro ▇▇▇▇▇ BROTHERS
▇▇▇▇▇▇▇▇ & CO.
/s/ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ III
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Name: ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ III
Title: Senior Manager