EXHIBIT 10.9
$10,000,000.00
Amended and Restated Credit Agreement
dated as of
February 20, 1998
between
Datasouth Computer Corporation
and
Wachovia Bank, N.A.
TABLE OF CONTENTS
[Not a part of the Agreement]
ARTICLE I. DEFINITIONS........................................................1
SECTION 1.01. Definitions.....................................................1
SECTION 1.02. Accounting Terms and Determinations.............................9
SECTION 1.03. References.....................................................10
ARTICLE II. THE CREDITS.......................................................10
SECTION 2.01. Commitment to Lend.............................................10
SECTION 2.02 Method of Borrowing............................................10
SECTION 2.03. Notes..........................................................11
SECTION 2.04. Maturity of Advances...........................................11
SECTION 2.05. Interest Rates.................................................12
SECTION 2.06. Commitment Fee.................................................13
SECTION 2.07. Optional Termination or Reduction of Facility B Commitment.....14
SECTION 2.08. Mandatory Reduction and Termination of Commitments.............14
SECTION 2.09. Optional Prepayments...........................................14
SECTION 2.10. Mandatory Prepayments..........................................14
SECTION 2.11. General Provisions Concerning Payments.........................14
SECTION 2.12. Computation of Interest and Fees...............................15
ARTICLE III. CHANGE IN CIRCUMSTANCES; COMPENSATION...........................15
SECTION 3.01. Basis for Determining Interest Rate Inadequate or Unfair.......15
SECTION 3.02. Illegality.....................................................15
SECTION 3.03. Increased Cost and Reduced Return..............................16
SECTION 3.04. Base Rate Loans Substituted for Affected Euro-Dollar Loans.....16
SECTION 3.05. Compensation...................................................17
ARTICLE IV. CONDITIONS TO BORROWINGS..........................................17
SECTION 4.01. Conditions to First Borrowing..................................17
SECTION 4.02. Conditions to All Borrowings...................................18
ARTICLE V. REPRESENTATIONS AND WARRANTIES....................................18
SECTION 5.01. Corporate Existence and Power..................................18
SECTION 5.02. Corporate and Governmental Authorization; Contravention........19
SECTION 5.03. Binding Effect.................................................19
SECTION 5.04. Financial Information..........................................19
SECTION 5.05. Litigation.....................................................19
SECTION 5.06. Compliance with ERISA..........................................19
SECTION 5.07. Taxes..........................................................19
SECTION 5.08. Subsidiaries...................................................20
SECTION 5.09. Not an Investment Company......................................20
SECTION 5.10. Ownership of Property; Liens...................................20
SECTION 5.11. No Default.....................................................20
SECTION 5.12. Full Disclosure................................................20
SECTION 5.13. Environmental Matters.........................................20
SECTION 5.14. Compliance with Laws. ........................................21
ARTICLE VI. COVENANTS........................................................21
SECTION 6.01. Information....................................................21
SECTION 6.02. Inspection of Property, Books and Records......................22
SECTION 6.03. Ratio of Consolidated Funded Debt to EBITDA. .................22
SECTION 6.04. Minimum Stockholders' Equity...................................22
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SECTION 6.05. Fixed Charges Coverage.........................................22
SECTION 6.06. Investments. .................................................23
SECTION 6.07. Negative Pledge. .............................................23
SECTION 6.08. Maintenance of Existence. ....................................23
SECTION 6.09. Dissolution. .................................................23
SECTION 6.10. Consolidations, Mergers and Sales of Assets. .................23
SECTION 6.11. Use of Proceeds. .............................................23
SECTION 6.12. Compliance with Laws; Payment of Taxes. ......................23
SECTION 6.13. Insurance. ...................................................24
SECTION 6.14. Change in Fiscal Year. .......................................24
SECTION 6.15. Maintenance of Property. .....................................24
SECTION 6.16. Environmental Notices. .......................................24
SECTION 6.17. Environmental Matters. .......................................24
SECTION 6.18. Environmental Release. .......................................24
SECTION 6.19. Debt...........................................................24
SECTION 6.20. Collateral Maintenance.........................................24
SECTION 6.21 Interest Rate Protection........................................25
ARTICLE VII. DEFAULTS........................................................25
SECTION 7.01. Events of Default..............................................25
SECTION 7.02. Remedies on Default............................................27
SECTION 7.03. Security.......................................................27
ARTICLE VIII. MISCELLANEOUS..................................................27
SECTION 8.01. Notices........................................................27
SECTION 8.02. No Waivers.....................................................28
SECTION 8.03. Expenses; Documentary Taxes....................................28
SECTION 8.04. Amendments and Waivers.........................................28
SECTION 8.05. Successors and Assigns.........................................28
SECTION 8.06. Confidentiality................................................30
SECTION 8.07. Interest Limitation............................................30
SECTION 8.08. Governing Law..................................................30
SECTION 8.09. Counterparts...................................................30
SECTION 8.10. Consent to Jurisdiction........................................30
SECTION 8.11. Severability...................................................30
SECTION 8.12. Captions.......................................................30
EXHIBIT A Form of Facility A Note
EXHIBIT B Form of Facility B Note
EXHIBIT C Form of Assignment and Acceptance
EXHIBIT D Form of Opinion of Counsel
ii
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT, made as of the 20th day of
February, 1998, by and between DATASOUTH COMPUTER CORPORATION, a Delaware
corporation (together with its successors, the "Borrower"), and WACHOVIA BANK,
N.A., a national banking association (together with endorsees, successors and
assigns, the "Bank").
BACKGROUND
The Borrower and the Bank entered into an Amended and Restated Credit
Agreement dated as of October 9, 1997 (the "1997 Credit Agreement") pursuant to
which the Bank agreed to provide to the Borrower revolving loans of up to
$5,500,000.00 from time to time outstanding as therein provided. The Borrower
and the Bank desire to amend and restate the 1997 Credit Agreement in order,
among other things, to decrease the maximum amount of revolving loans which may
at any time be outstanding to $5,000,000.00 and to provide for a term loan in
the principal amount of $5,000,000.00, subject to the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the promises herein
contained, and each intending to be legally bound hereby, the parties agree as
follows:
ARTICLE I. DEFINITIONS
SECTION 1.01 Definitions. The terms as defined in this Section 1.01 shall,
for all purposes of this Agreement and any amendment hereto (except as herein
otherwise expressly provided or unless the context otherwise requires), have the
meanings set forth herein (terms defined in the singular to have the same
meanings when used in the plural and vice versa):
"Adjusted London Interbank Offered Rate" applicable to any Interest Period
means a rate per annum equal to the quotient obtained (rounded upwards, if
necessary, to the next higher 1/100th of 1%) by dividing (i) the applicable
London Interbank Offered Rate for such Interest Period by (ii) 1.00 minus the
Euro-Dollar Reserve Percentage.
"Advance" means any advance by the Bank under the Commitments.
"Affiliate" of any Person means (i) any other Person which directly, or
indirectly through one or more intermediaries, controls such Person, (ii) any
other Person which directly, or indirectly through one or more intermediaries,
is controlled by or is under common control with such Person, or (iii) any other
Person of which such Person owns, directly or indirectly, 20% or more of the
common stock or equivalent equity interests. As used herein, the term "control"
means possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agreement" means this Amended and Restated Credit Agreement, together with
all amendments and supplements hereto.
"Applicable Margin" means (x) for any Base Rate Loan, for any day a number
equal to zero percent (0.0%), and (y) for any Euro-Dollar Loan, the applicable
percentage determined in accordance with Section 2.05(c).
"Assignee" has the meaning set forth in Section 8.05(c).
"Assignment and Acceptance" means an Assignment and Acceptance executed in
accordance with Section 8.05(c) in the form attached hereto as Exhibit C.
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"Authority" has the meaning set forth in Section 3.02.
"Base Rate" means for any Base Rate Loan for any day, the rate per annum
equal to the higher as of such day of (i) the Prime Rate, and (ii) one-half of
one percent above the Federal Funds Rate for such day. For purposes of
determining the Base Rate for any day, changes in the Prime Rate and/or the
Federal Funds Rate shall be effective on the date of each such change.
"Base Rate Loan" means an Advance made or to be made as a Base Rate Loan
pursuant to the applicable Notice of Borrowing or Article III.
"Borrowing" shall mean a borrowing under either of the Commitments
consisting of an Advance by the Bank. A Borrowing is a "Euro-Dollar Borrowing"
if the Advance is made as a Euro-Dollar Loan and a "Base Rate Borrowing" if the
Advance is made as a Base Rate Loan.
"Bull Run" means Bull Run Corporation, a Georgia corporation of which the
Borrower is a Wholly Owned Subsidiary.
"Capital Stock" means any nonredeemable capital stock of the Borrower or
any Consolidated Subsidiary of the Borrower (to the extent issued to a Person
other than the Borrower), whether common or preferred.
"CERCLA" means the Comprehensive Environmental Response Compensation and
Liability Act.
"CERCLIS" means the Comprehensive Environmental Response Compensation and
Liability Inventory System established pursuant to CERCLA.
"Change of Law" shall have the meaning set forth in Section 3.02.
"Closing Date" means February 20, 1998.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor Federal tax code.
"Commitments" means, collectively, the Facility A Commitment and the
Facility B Commitment.
"Commitment Fee Payment Date" means the first day of each June, September,
December and March, commencing March 1, 1998; provided that if any such day is
not a Domestic Business Day, the Commitment Fee Payment Date shall be on the
next succeeding Domestic Business Day.
"Commitment Fee Rate" has the meaning set forth in Section 2.06(b) and is
expressed as a percentage
"Consolidated Debt" means at any date the Debt of the Borrower and its
Consolidated Subsidiaries, determined on a consolidated basis as of such date.
"Consolidated Fixed Charges" for any period means the sum (without
duplication) of Consolidated Interest Expense for such period, plus capital
lease expense for the Borrower and its Consolidated Subsidiaries for such
period, plus operating lease expense for the Borrower and its Consolidated
Subsidiaries for all leases which require aggregate lease payments during the
term of such lease of $2,500.00 or more, plus scheduled principal payments on
Consolidated Debt for such period.
"Consolidated Funded Debt" means Funded Debt of the Borrower and its
Consolidated Subsidiaries in accordance with GAAP applied on a consistent basis.
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"Consolidated Interest Expense" for any period means interest, whether
expensed or capitalized, in respect of Debt of the Borrower or any of its
Consolidated Subsidiaries outstanding during such period.
"Consolidated Operating Profits" means, for any period, the Operating
Profits of the Borrower and its Consolidated Subsidiaries.
"Consolidated Subsidiary" means as to Bull Run or the Borrower, as the
context hereof may require, at any date, any Subsidiary or other entity the
accounts of which, in accordance with GAAP, would be consolidated with those of
Bull Run or the Borrower, as applicable, in its consolidated financial
statements as of such date.
"Consolidated Total Assets" means, at any time, the total assets of the
Borrower and its Consolidated Subsidiaries, determined on a consolidated basis,
as set forth or reflected on the most recent consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries, prepared in accordance with GAAP.
"Controlled Group" means all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
which, together with the Borrower, are treated as a single employer under
Section 414 of the Code.
"Debt" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business, (iv) all obligations of such Person as lessee under capital leases,
(v) all obligations of such Person to reimburse any bank or other Person in
respect of amounts payable under a banker's acceptance, (vi) all Redeemable
Preferred Stock of such Person (in the event such Person is a corporation),
(vii) all obligations of such Person to reimburse any bank or other Person in
respect of amounts paid under a standby letter of credit or similar instrument,
(viii) all Debt of others secured by a Lien on any asset of such Person, whether
or not such Debt is assumed by such Person, and (ix) all Debt of others
Guaranteed by such Person; provided, however, that the amount of such Debt
shall, in the case of clause (viii), be deemed to be the lesser of the fair
market value of such asset or the amount of the Debt so secured, and provided
further that for purposes of any calculation of the Debt of the Borrower and its
Consolidated Subsidiaries, Debt of Bull Run shall be excluded for purposes of
clauses (viii) and (ix) of this definition.
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Depreciation" means for any Person for any period the sum of all
depreciation expenses of such Person for such period, as determined in
accordance with GAAP.
"Dollars" or "$" means dollars in lawful currency of the United States of
America.
"Domestic Business Day" means any day except a Saturday, Sunday or other
day on which commercial banks in Charlotte, North Carolina are authorized by law
to close.
"EBITDA" means, without duplication, for any fiscal period, as applied to
the Borrower and its Consolidated Subsidiaries, the sum of the amounts for such
fiscal period of: (i) Net Income (Loss), (ii) Depreciation, (iii) amortization
expense and non cash charges, less any non cash gains, (iv) all interest expense
determined in accordance with GAAP during such period on Debt, (v) all taxes
paid, accrued or deferred, during such period, all as determined and computed in
accordance with GAAP, and (vi) the Borrower's pretax gain (or loss) attributable
to shares of common stock of Xxxx Communications Systems, Inc.
"Environmental Authority" means any foreign, federal, state, local or
regional
3
government that exercises any form of jurisdiction or authority under any
Environmental Requirement.
"Environmental Authorizations" means all licenses, permits, orders,
approvals, notices, registrations or other legal prerequisites for conducting
the business of the Borrower required by any Environmental Requirement.
"Environmental Judgments and Orders" means all judgments, decrees or orders
arising from or in any way associated with any Environmental Requirements,
whether or not entered upon consent or written agreements with an Environmental
Authority or other entity arising from or in any way associated with any
Environmental Requirement, whether or not incorporated in a judgment, decree or
order.
"Environmental Liabilities" means any liabilities, whether accrued,
contingent or otherwise, arising from and in any way associated with any
Environmental Requirements.
"Environmental Notices" means notice from any Environmental Authority or by
any other person or entity, of possible or alleged noncompliance with any
Environmental Requirement, including without limitation any complaints,
citations, demands or requests from any Environmental Authority or from any
other person or entity for correction of any violation of any Environmental
Requirement or any investigations concerning any violation of any Environmental
Requirement.
"Environmental Proceedings" means any judicial or administrative
proceedings arising from or in any way associated with any Environmental
Requirement.
"Environmental Releases" means releases as defined in CERCLA or under any
applicable state or local environmental law or regulation.
"Environmental Requirements" means any legal requirement relating to
health, safety or the environment and applicable to the Borrower, any Subsidiary
of the Borrower or the Properties, including but not limited to any such
requirement under CERCLA or similar state legislation.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, or any successor law, including any rules or
regulations promulgated thereunder. Any reference to any provision of ERISA
shall also be deemed to be a reference to any successor provision or provisions
thereof.
"Euro-Dollar Business Day" means any Domestic Business Day on which
dealings in Dollar deposits are carried out in the London interbank market.
"Euro-Dollar Loan" means an Advance made or to be made (pursuant to the
applicable Notice of Borrowing) as a Euro-Dollar Loan.
"Euro-Dollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in respect of "Eurocurrency liabilities" (or in respect of any
other category of liabilities which includes deposits by reference to which the
interest rate on Euro-Dollar Loans is determined or any category of extensions
of credit or other assets which includes loans by a non-United States office of
the Bank to United States residents). The Adjusted London Interbank Offered Rate
shall be adjusted automatically on and as of the effective date of any change in
the Euro-Dollar Reserve Percentage.
"Event of Default" shall have the meaning assigned to such term in Section
7.01.
"Facility A Commitment" shall have the meaning assigned to it in Section
2.01(a).
4
"Facility A Commitment Reduction Date" shall mean the last day of each
March, June, September and December commencing March 31, 1998 and continuing
through the Facility A Maturity Date; provided that if any such day is not a
Domestic Business Day, the Facility A Commitment Reduction Date shall be on the
next succeeding Domestic Business Day.
"Facility A Maturity Date" shall mean December 31, 2002.
"Facility A Note" shall mean a promissory note of the Borrower payable to
the order of the Bank, in substantially the form of Exhibit A hereto, evidencing
the maximum principal indebtedness of the Borrower to the Bank under the
Facility A Commitment, either as originally executed or as it may be from time
to time supplemented, modified, amended, renewed or extended.
"Facility B Commitment" shall have the meaning assigned to it in Section
2.01(b).
"Facility B Commitment Reduction Date" shall mean February 1, 1999,
provided that if such day is not a Domestic Business Day, the Facility B
Commitment Reduction Date shall be the next succeeding Domestic Business Day.
"Facility B Note" shall mean a promissory note of the Borrower payable to
the order of the Bank, in substantially the form of Exhibit B hereto, evidencing
the maximum principal indebtedness of the Borrower to the Bank under the
Facility B Commitment, either as originally executed or as it may be from time
to time supplemented, modified, amended, renewed or extended.
"Facility B Termination Date" shall mean February 20, 2001 or such later
date as to which the Borrower and the Bank may agree pursuant to Section
2.04(b).
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the next higher 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic Business Day
next succeeding such day, provided that (i) if the day for which such rate is to
be determined is not a Domestic Business Day, the Federal Funds Rate for such
day shall be such rate on such transactions on the next preceding Domestic
Business Day as so published on the next succeeding Domestic Business Day, and
(ii) if such rate is not so published for any day, the Federal Funds Rate for
such day shall be the average rate charged to Wachovia on such day on such
transactions.
"Fiscal Quarter" means any fiscal quarter of the Borrower.
"Fiscal Year" means any fiscal year of the Borrower.
"Fixed Charges Coverage Ratio" has the meaning set forth in Section
6.05(b).
"Funded Debt" means as of the end of each Fiscal Quarter, without
duplication, the sum of Long-Term Debt (excluding for purposes of this
definition of Funded Debt any indebtedness of Bull Run Corporation) plus the
principal portion of all obligations of the Borrower and its Consolidated
Subsidiaries under capital leases plus current maturities of Long-Term Debt and
notes payable of the Borrower and its Consolidated Subsidiaries.
"GAAP" means generally accepted accounting principles applied on a basis
consistent with those which, in accordance with Section 1.02, are to be used in
making the calculations for purposes of determining compliance with the terms of
this Agreement.
"Guarantee" by any Person means any obligation, contingent or otherwise, of
such Person directly or indirectly guaranteeing any Debt or other obligation of
any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or
5
otherwise, of such Person (i) to secure, purchase or pay (or advance or supply
funds for the purchase or payment of) such Debt or other obligation (whether
arising by virtue of partnership arrangements, by agreement to keep-well, to
purchase assets, goods, securities or services, to provide collateral security,
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 Debt 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
Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning.
"Hazardous Materials" includes, without limitation, (a) solid or hazardous
waste, as defined in the Resource Conservation and Recovery Act of 1980, or in
any applicable state or local law or regulation, (b) hazardous substances, as
defined in CERCLA, or in any applicable state or local law or regulation, (c)
gasoline, or any other petroleum product or by-product, (d) toxic substances, as
defined in the Toxic Substances Control Act of 1976, or in any applicable state
or local law or regulation or (e) insecticides, fungicides, or rodenticides, as
defined in the Federal Insecticide, Fungicide, and Rodenticide Act of 1975, or
in any applicable state or local law or regulation, as each such Act, statute or
regulation may be amended from time to time.
"Income Available for Fixed Charges" for any period means EBITDA as
determined with respect to the Borrower and its Consolidated Subsidiaries on a
consolidated basis for such period and in accordance with GAAP and less the
aggregate amount of capital expenditures for the Borrower and its Consolidated
Subsidiaries for such period in accordance with GAAP.
"Interest Period" means: with respect to each Euro-Dollar Borrowing under
the Facility A Commitment, the period commencing on the date of such Borrowing
and ending on the numerically corresponding day in the third calendar month
thereafter, and with respect to Euro-Dollar Borrowings under the Facility B
Commitment, the period commencing on the date of such Borrowing and ending on
the numerically corresponding day in the first, second, third or sixth calendar
month thereafter, as the Borrower may elect in the applicable Notice of
Borrowing; provided that:
(a) any Interest Period (other than an Interest Period determined
pursuant to clause (c) or (d) below) which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day
falls in another calendar month, in which case such Interest Period shall
end on the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the appropriate subsequent calendar month) shall,
subject to clauses (c) and (d) below, end on the last Euro-Dollar Business
Day of the appropriate subsequent calendar month;
(c) any Interest Period which begins before the Facility B Termination
Date and would otherwise end after the Facility B Termination Date shall
end on the Facility B Termination Date; and
(d) any Interest Period which begins before the Facility A Maturity
Date and would otherwise end after the Facility A Maturity Date shall end
on the Facility A Maturity Date.
"Investment" means any investment in any Person, whether by means of
purchase or acquisition of obligations or securities of such Person, capital
contribution to such Person, loan or advance to such Person, making of a time
deposit with such Person, Guarantee or assumption of any obligation of such
Person or otherwise.
"Lending Office" means the Bank's office located at its address set forth
on the signature pages hereof (or identified on the signature pages hereof as
its Lending Office) or such other office as the Bank may hereafter designate as
its Lending Office by notice to the
6
Borrower.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, the Borrower or any Subsidiary of the
Borrower shall be deemed to own subject to a Lien any asset which it has
acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
relating to such asset.
"Loan Access Agreement" means the Financial Management Account
Investment/Commercial Loan Access Agreement dated February 20, 1998 between the
Borrower and the Bank, together with all amendments and supplements thereto.
"Loan Documents" means this Agreement, the Notes, the Security Agreement,
the Pledge Agreement and any other document evidencing or securing the Advances.
"London Interbank Offered Rate" applicable to any Euro-Dollar Loan means
for the Interest Period of such Euro-Dollar Loan the rate per annum determined
on the basis of the rate for deposits in Dollars of amounts equal or comparable
to the principal amount of such Euro-Dollar Loan offered for a term comparable
to such Interest Period, which rate appears on the display designated as Page
A3750@ of the Telerate Service (or such other page as may replace page 3750 of
that service or such other service or services as may be nominated by the
British Bankers= Association for the purpose of displaying London interbank
offered rates for U.S. dollar deposits), determined as of 1:00 p.m. (Charlotte,
North Carolina time), 2 Euro-Dollar Business Days prior to the first day of such
Interest Period.
"Long-Term Debt" means at any date any Consolidated Debt which matures (or
the maturity of which may at the option of the Borrower or any Consolidated
Subsidiary be extended such that it matures) more than one year after such date,
excluding any Consolidated Debt which is subordinated to Debt outstanding under
this Agreement.
"Margin Stock" means "margin stock" as defined in Regulations G, T, U or X
of the Board of Governors of the Federal Reserve System, as in effect from time
to time, together with all official rulings and interpretations issued
thereunder.
"Multiemployer Plan" shall have the meaning set forth in Section 4001(a)(3)
or ERISA.
"Net Income (Loss)" means, as applied to any Person for any period, net
income or loss of such Person as determined in accordance with GAAP.
"Notes" means collectively the Facility A Note and the Facility B Note.
"Notice of Borrowing" shall have the meaning assigned to it in Section
2.02.
"Obligations" means all indebtedness, obligations and liabilities to the
Bank existing on the date of this Agreement or arising thereafter, direct or
indirect, joint or several, absolute or contingent, matured or unmatured,
liquidated or unliquidated, secured or unsecured, arising by contract, operation
of law or otherwise, of the Borrower under this Agreement or any other Loan
Document.
"Operating Profits" means, as applied to any Person for any period, the
operating income of such Person for such period, as determined in accordance
with GAAP.
"Participant" has the meaning set forth in Section 8.05(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
7
"Permitted Encumbrances" means:
(a) Liens existing on the date of this Agreement;
(b) any Lien existing on any asset of any Person at the time such
Person becomes a Consolidated Subsidiary of the Borrower and not created in
contemplation of such event;
(c) any Lien on any asset securing Debt incurred or assumed for the
purpose of financing all or any part of the cost of acquiring or
constructing such asset, provided that such Lien attaches to such asset
concurrently with or within 18 months after the acquisition or completion
of construction thereof;
(d) any Lien on any asset of any Person existing at the time such
Person is merged or consolidated with or into the Borrower or a
Consolidated Subsidiary of the Borrower and not created in contemplation of
such event;
(e) any Lien existing on any asset prior to the acquisition thereof by
the Borrower or a Consolidated Subsidiary of the Borrower and not created
in contemplation of such acquisition;
(f) Liens securing Debt owing by any Subsidiary of the Borrower to the
Borrower;
(g) any Lien arising out of the refinancing, extension, renewal or
refunding of any Debt secured by any Lien permitted by any of the foregoing
clauses of this Section, provided that (i) such Debt is not secured by any
additional assets, and (ii) the amount of such Debt secured by any such
Lien is not increased;
(h) Liens incidental to the conduct of its business or the ownership
of its assets which (i) do not secure Debt and (ii) do not in the aggregate
materially detract from the value of its assets or materially impair the
use thereof in the operation of its business;
(i) any Lien on Margin Stock; and
(j) Liens in favor of the Bank.
"Person" means any individual, joint venture, corporation, company,
voluntary association, partnership, trust, joint stock company, limited
liability company, unincorporated organization, association, government, or any
agency, instrumentality, or political subdivision thereof, or any other form of
entity or organization.
"Plan" means at any time an employee pension benefit plan which is covered
by Title IV of ERISA or subject to the minimum funding standards under Section
412 of the Code and is either (i) maintained by a member of the Controlled Group
for employees of any member of the Controlled Group or (ii) maintained pursuant
to a collective bargaining agreement or any other arrangement under which more
than one employer makes contributions and to which a member of the Controlled
Group is then making or accruing an obligation to make contributions or has
within the preceding five plan years made contributions.
"Pledge Agreement" means the Pledge Agreement of even date herewith
executed by the Borrower for the benefit of the Bank, together with all
amendments and supplements thereto, covering certain capital stock of Xxxx
Communications Systems, Inc.
"Prime Rate" refers to that interest rate so denominated and set by
Wachovia from time to time as an interest rate basis for borrowings. The Prime
Rate is but one of several interest rate bases used by Wachovia. Wachovia lends
at interest rates above and below the Prime Rate. A change in the Prime Rate
shall be effective on the date of such change.
8
"Properties" means all real property owned, leased or otherwise used or
occupied by the Borrower or any Subsidiary of the Borrower, wherever located.
"Rate Determination Date" has the meaning given such term in Section
2.05(c).
"Redeemable Preferred Stock" of any Person means any preferred stock issued
by such Person which is at any time prior to the Facility A Maturity Date either
(i) mandatorily redeemable (by sinking fund or similar payments or otherwise) or
(ii) redeemable at the option of the holder thereof.
"Reportable Event" has the meaning given such term in Section 4043(b) of
Title V of ERISA.
"Reported Net Income" means, for any period, the Net Income (Loss) of the
Borrower and its Consolidated Subsidiaries determined on a consolidated basis.
"Security Agreement" means the General Security Agreement of even date
herewith executed by the Borrower for the benefit of the Bank, together with all
amendments and supplements thereto.
"Stockholders' Equity" means, at any time, the shareholders' equity of the
Borrower and its Consolidated Subsidiaries, as set forth or reflected on the
most recent consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries prepared in accordance with GAAP, but excluding any Redeemable
Preferred Stock of the Borrower or any of its Consolidated Subsidiaries.
Shareholders' Equity would generally include, but not be limited to (i) the par
or stated value of all outstanding Capital Stock, (ii) capital surplus, (iii)
retained earnings, and (iv) various deductions such as (A) purchases of treasury
stock, (B) receivables due from an employee stock ownership plan, (C) employee
stock ownership plan debt guarantees, and (D) translation adjustments for
foreign currency transactions.
"Subsidiary" of a Person means any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by such Person. Unless otherwise
indicated, all references herein to Subsidiaries refer to Subsidiaries of Bull
Run or the Borrower as the context may require.
"Third Parties" means all lessees, sublessees, licenses and other users of
the Properties, excluding those users of the Properties in the ordinary course
of the Borrower's business and on a temporary basis.
"Transferee" has the meaning set forth in Section 8.05(d).
"Unused Commitment" means at any date an amount equal to the Facility B
Commitment less the aggregate outstanding principal amount of the Advances made
pursuant to the Facility B Commitment.
"Wachovia" means Wachovia Bank, N.A., a national banking association,
together with its successors.
"Wholly Owned Subsidiary" means any Subsidiary all of the shares of capital
stock or other ownership interests of which (except directors' qualifying
shares) are at the time directly or indirectly owned by Bull Run or the
Borrower, as the context of this Agreement may require.
SECTION 1.02. Accounting Terms and Determinations. Unless otherwise
specified herein, all terms of an accounting character used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP, applied on a basis consistent (except for changes
concurred in by Bull Run's independent public accountants) with the most recent
9
audited consolidating and consolidated financial statements of Bull Run and its
Consolidated Subsidiaries delivered to the Bank.
SECTION 1.03. References. Except as otherwise expressly provided in this
Agreement: the words "herein," "hereof," "hereunder" and other words of similar
import refer to this Agreement as a whole, including the Schedule hereto which
is a part hereof, and not to any particular Section, Article, paragraph or other
subdivision; the singular includes the plural and the plural includes the
singular; "or" is not exclusive; the words "include," "includes" and "including"
are not limiting; a reference to any agreement or other contract includes past
and future permitted supplements, amendments, modifications and restatements
thereto or thereof; a reference to an Article, Section, paragraph or other
subdivision is a reference to an Article, Section, paragraph or other
subdivision of this Agreement; a reference to any law includes any amendment or
modification to such law and any rules and regulations promulgated thereunder; a
reference to a Person includes its permitted successors and assigns; any right
may be exercised at any time and from time to time; and, except as otherwise
expressly provided therein, all obligations under any agreement or other
contract are continuing obligations throughout the term of such agreement or
contract.
ARTICLE II. THE CREDITS
SECTION 2.01. Commitment to Lend.
(a) The Bank agrees, in addition to the funds to be advanced under
subsection (b) below and on the terms and conditions set forth herein, to make
Advances to the Borrower on the Closing Date in an aggregate principal amount
equal to $5,000,000.00 (as such figure may be reduced from time to time as
provided in this Agreement, the "Facility A Commitment"). Funds advanced under
the Facility A Commitment may not be reborrowed. The Bank shall have no
obligation to advance funds in excess of the amount of the Facility A Commitment
under this Section 2.01(a).
(b) The Bank agrees, in addition to the funds to be advanced under
subsection (a) above and on the terms and conditions set forth herein, to make
Advances to the Borrower from time to time before the Facility B Termination
Date; provided that, immediately after each such Advance is made, the aggregate
principal amount of outstanding Advances (exclusive of all Advances made in
respect of the Facility A Commitment) shall not exceed $5,000,000.00 (as such
figure may be reduced from time to time as provided in this Agreement, the
"Facility B Commitment"). Within the foregoing limits, the Borrower may borrow
under this Section, repay or, to the extent permitted by Section 2.09, prepay
Advances and reborrow under this Section at any time before the Facility B
Termination Date. The Bank shall have no obligation to advance funds in excess
of the amount of the Facility B Commitment.
(c) Each Euro-Dollar Borrowing under this Section shall be in an aggregate
principal amount of $100,000.00 or any larger multiple of $50,000.00.
SECTION 2.02. Method of Borrowing. (a) The Borrower shall give the Bank
notice (a "Notice of Borrowing") at least three Euro-Dollar Business Days before
each Euro-Dollar Borrowing and at least one Domestic Business Day before each
Base Rate Borrowing, specifying:
(i) the date of such Borrowing, which shall be a Euro-Dollar Business
Day for Euro-Dollar Borrowings or a Domestic Business Day for Base Rate
Borrowings,
(ii) the aggregate amount of such Borrowing, and
(iii) the duration of the Interest Period applicable thereto, subject
to the provisions of the definition of Interest Period, for Euro-Dollar
Borrowings;
(b) A Notice of Borrowing, once given, shall be irrevocable. The Bank shall
be entitled
10
to rely on any telephonic Notice of Borrowing which it believes in good faith to
have been given by a duly authorized officer of the Borrower and any Advances
made by the Bank based on such telephonic notice shall, when credited by the
Bank to the regular deposit account maintained by the Borrower with the Bank, be
an Advance for all purposes hereunder. Not later than 2:00 p.m., Charlotte,
North Carolina time, on the date specified for the Borrowing in the Notice of
Borrowing, the Bank shall credit, in immediately available funds, the amount of
such Borrowing to the regular deposit account maintained by the Borrower with
the Bank.
(c) Notwithstanding the foregoing provisions of this Section 2.02, all
Advances under the Facility B Commitment shall be funded by the Bank in
accordance with the Loan Access Agreement.
(d) If the Bank makes a new Advance hereunder on a day on which the
Borrower is to repay all or any part of an outstanding Advance, the Bank shall
apply the proceeds of its new Advance to make such repayment and only an amount
equal to the difference (if any) between the amount being borrowed and the
amount being repaid shall be made available by the Bank to the Borrower as
provided in subsection (b) or (c) of this Section, or remitted by the Borrower
to the Bank as provided in Section 2.11, as the case may be.
(e) Notwithstanding anything to the contrary contained in this Agreement,
no Euro-Dollar Borrowing may be made if there shall have occurred a Default or
an Event of Default, which Default or Event of Default shall not have been cured
or waived.
(f) If the Borrower is otherwise entitled under this Agreement to repay any
Advance maturing at the end of an Interest Period applicable thereto with the
proceeds of a new Borrowing, and the Borrower fails to repay such Advance using
its own moneys and fails to give a Notice of Borrowing in connection with such
new Borrowing, a new Borrowing shall be deemed to be made on the date such
Advance matures in an amount equal to the principal amount of the Advance so
maturing, and the Advance comprising such new Borrowing shall be a Base Rate
Loan.
SECTION 2.03. Notes. The Advances under the Facility A Commitment shall be
evidenced by the Facility A Note payable to the order of the Bank for the
account of its Lending Office in an amount equal to the original principal
amount of the Facility A Commitment. The Advances under the Facility B
Commitment shall be evidenced by the Facility B Note payable to the order of the
Bank for the account of its Lending Office in an amount equal to the original
principal amount of the Facility B Commitment. The Bank shall record, and prior
to any transfer of either Note shall endorse on the schedule forming a part
thereof appropriate notations to evidence, the date, amount and maturity of, and
effective interest rate for, each Advance made by it, the date and amount of
each payment of principal made by the Borrower with respect thereto and whether
such Advance is a Base Rate Loan or a Euro-Dollar Loan, and such recordations
and endorsements shall constitute rebuttable presumptive evidence of the
principal amount owing and unpaid on the Notes; provided that the failure of the
Bank to make any such recordation or endorsement shall not affect the obligation
of the Borrower hereunder or under the Notes. The Bank is hereby irrevocably
authorized by the Borrower so to endorse the Notes and to attach to and make a
part of either Note a continuation of any such schedule as and when required.
SECTION 2.04. Maturity of Advances. (a) Each Advance included in any
Euro-Dollar Borrowing shall mature, and the principal amount thereof shall be
due and payable, on the last day of the Interest Period applicable to such
Euro-Dollar Borrowing. Each Advance included in any Base Rate Borrowing shall
finally mature on the Facility A Maturity Date or the Facility B Termination
Date, as applicable, and the principal amount thereof shall be due and payable
from time to time as herein provided or as provided in the Loan Access
Agreement, if applicable to such Advance.
(b) Upon written request of Borrower, which may be made from time to time
and which shall be made in writing and delivered to the Bank on a Domestic
Business Day no fewer than
11
60 days prior to the third and fourth anniversary of the Closing Date, the Bank
in its sole and absolute discretion may (but shall not be obligated to) extend
the then effective Facility B Termination Date for a period of 1 year; provided
that in no event shall the Facility B Termination Date be extended later than
February 20, 2003. In the event that the Bank chooses to extend the Facility B
Termination Date for such a 1 year period, notice shall be given by the Bank to
the Borrower not more than 45, nor fewer than 30, days prior to the next
succeeding anniversary of the Closing Date.
SECTION 2.05. Interest Rates. (a) Each Advance made as a Base Rate Loan
shall bear interest on the outstanding principal amount thereof, for each day
from the date such Advance is made until it becomes due, at a rate per annum
equal to the Base Rate for such day plus the Applicable Margin. Such interest on
Advances under the Facility B Commitment shall be payable as provided in the
Loan Access Agreement, or if the Loan Access Agreement shall have terminated as
provided therein, monthly on the first Domestic Business Day of each month. Such
interest on Advances under the Facility A Commitment shall be payable monthly on
the first Domestic Business Day of each month. Any overdue principal of and, to
the extent permitted by applicable law, overdue interest on any Advance so made
as a Base Rate Loan shall bear interest, payable on demand, for each day until
paid at a rate per annum equal to the sum of 2% plus the rate otherwise
applicable to such Advance, so made as a Base Rate Loan, for such day.
(b) Each Advance made as a Euro-Dollar Loan shall bear interest on the
outstanding principal amount thereof, for the Interest Period applicable
thereto, at a rate per annum equal to the sum of the Applicable Margin plus the
applicable Adjusted London Interbank Offered Rate for such Interest Period;
provided that if any Advance made as a Euro-Dollar Loan shall, as a result of
clauses (1)(c) or 1(d) of the definition of Interest Period, have an Interest
Period of less than one month, such Advance so made as a Euro-Dollar Loan shall
bear interest during such Interest Period at the rate applicable to Advances
made as Base Rate Loans during such period. Such interest on Advances under the
Facility B Commitment shall be payable as provided in the Loan Access Agreement,
or if the Loan Access Agreement shall have terminated as therein provided, for
each Interest Period on the last day thereof and if such Interest Period is
longer than three months, at intervals of three months after the first day
thereof. Such interest on Advances under the Facility A Commitment shall be
payable for each Interest Period on the last day thereof and, if such Interest
Period is longer than three months, at intervals of three months after the first
day thereof. Any overdue principal of and, to the extent permitted by law,
overdue interest on any Euro-Dollar Loan shall bear interest, payable on demand,
for each day until paid at a rate per annum equal to the sum of 2% plus the
higher of (x) the sum of the Applicable Margin plus the Adjusted London
Interbank Offered Rate applicable to such Euro-Dollar Loan or (y) the rate which
would be applicable for such day to such Advance if it had been made as Base
Rate Loan.
(c) The Applicable Margin for any Euro-Dollar Loan for any day shall be the
rate per annum set forth below as determined to be applicable based on the
applicable ratio of Consolidated Funded Debt to EBITDA:
(i) if the ratio of Consolidated Funded Debt to EBITDA is greater than
or equal to 2.00 to 1.00, then the Applicable Margin for Euro-Dollar Loans
shall be 2.75% per annum;
(ii) if the ratio of Consolidated Funded Debt to EBITDA is less than
2.00 to 1.00 but greater than 1.00 to 1.00, then the Applicable Margin for
Euro-Dollar Loans shall be 2.50% per annum; and
(iii) if the ratio of Consolidated Funded Debt to EBITDA is less than
or equal to 1.00 to 1.00, then the Applicable Margin for Euro-Dollar Loans
shall be 2.25% per annum.
The Applicable Margin for Euro-Dollar Loans shall be determined and
adjusted quarterly on the date (each a "Rate Determination Date") five (5)
Domestic Business Days after the date by which the annual and quarterly
compliance certificates and related financial statements and
12
information are required in accordance with the provisions of Sections 6.01(a),
(b) and (c), as appropriate; provided that (A) the initial Applicable Margin for
Euro-Dollar Loans shall be 2.75% and shall remain in effect until the first Rate
Determination Date to occur after the Closing Date, and (B) in the event an
annual or quarterly compliance certificate and related financial statements and
information are not delivered timely to the Bank by the date required by
Sections 6.01(a), (b) and (c), as appropriate, the Applicable Margin shall be
two and three quarters percent (2.75%) until such time as such an appropriate
compliance certificate and related financial statements and information are
delivered, whereupon the Applicable Margin shall be adjusted based on the
information contained in such compliance certificate and related financial
statements and information. Each Applicable Margin shall be effective from a
Rate Determination Date until the next such Rate Determination Date, and shall
be effective as to existing Advances as well as new Advances made thereafter.
(d) Notwithstanding anything herein to the contrary, if one or more
Facility A Commitment Reduction Dates are scheduled to occur during an Interest
Period in which the Facility A Advances are Euro-Dollar Loans other than on the
last day of such Interest Period, then during such Interest Period a portion of
the outstanding balance of the Facility A Advances which is equal to the
aggregate amount of the principal payment due under the Facility A Commitment on
such Facility A Commitment Reduction Dates shall be Base Rate Loans, and only
the remaining portion of the outstanding principal of the Advances under the
Facility A Commitment shall constitute Euro-Dollar Loans.
SECTION 2.06. Commitment Fee. (a) From and after the date hereof up to and
including the Facility B Termination Date, the Borrower shall pay to the Bank a
commitment fee at the Commitment Fee Rate, as determined in accordance with
Section 2.06(b) (calculated from the date hereof on the basis of a year of 360
days and payable for the actual number of days elapsed) on the average daily
balance of the Unused Commitment (the "Commitment Fee"). The Commitment Fee
shall be payable by the Borrower quarterly in arrears on each Commitment Fee
Payment Date and on the Facility B Termination Date, provided that should the
Facility B Commitment be terminated at any time prior to the Facility B
Termination Date (whether by termination of the Facility B Commitment as
provided in Section 2.07 or Section 2.08, refinancing of the Advances or
otherwise), the entire accrued and unpaid Commitment Fee shall be paid on the
date of such termination.
(b) The Commitment Fee Rate for any day shall be the percentage rate per
annum set forth below as determined to be applicable based on the applicable
ratio of Consolidated Funded Debt to EBITDA:
(i) if the ratio of Consolidated Funded Debt to EBITDA is greater than
or equal to 2.00 to 1.00, then the Commitment Fee Rate shall be 0.500% per
annum;
(ii) if the ratio of Consolidated Funded Debt to EBITDA is less than
2.00 to 1.00 but greater than 1.00 to 1.00, then the Commitment Fee Rate
shall be 0.400% per annum; and
(iii) if the ratio of Consolidated Funded Debt to EBITDA is less than
or equal to 1.00 to 1.00, then the Commitment Fee Rate shall be 0.300% per
annum.
The Commitment Fee Rate shall be determined and adjusted quarterly on each
Rate Determination Date; provided that (A) the initial Commitment Fee Rate shall
be 0.500% and shall remain in effect until the first Rate Determination Date to
occur after the Closing Date, and (B) in the event an annual or quarterly
compliance certificate and related financial statements and information are not
delivered timely to the Bank by the date required by Sections 6.01(a), (b) and
(c), as appropriate, the Commitment Fee Rate shall be one-half of one percent
(0.500%) until such time as such an appropriate compliance certificate and
related financial statements and information are delivered, whereupon the
Commitment Fee Rate shall be adjusted based on the information contained in such
compliance certificate and related financial statements and information. Each
Commitment Fee Rate shall be effective from a Rate Determination Date until the
next such Rate Determination Date.
13
SECTION 2.07. Optional Termination or Reduction of Facility B Commitment.
The Borrower may, upon at least three Domestic Business Days' notice to the
Bank, terminate the Facility B Commitment at any time, or reduce the Facility B
Commitment from time to time by an aggregate minimum amount of at least
$500,000.00 or an integral multiple of $100,000.00 in excess thereof. If the
Facility B Commitment is so reduced, such reduction shall be accounted for in
determining the fees due under Section 2.06. If the Facility B Commitment is so
terminated in its entirety, all accrued fees (as provided under Section 2.06)
shall be payable on the effective date of such termination. A notice of
reduction or termination of the Facility B Commitment hereunder, once given,
shall not thereafter be revocable by the Borrower.
SECTION 2.08. Mandatory Reduction and Termination of Commitments.
(a) The Facility A Commitment shall terminate and the unpaid principal
balance and all accrued and unpaid interest on the Facility A Note will be due
and payable upon the first of the following dates or events to occur: (i)
acceleration of the maturity of the Facility A Note in accordance with the
remedies contained in Section 7.02; or (ii) the Facility A Maturity Date.
(b) The amount of the Facility A Commitment shall be reduced on each
Facility A Commitment Reduction Date by an amount equal to $250,000.00.
(c) The Facility B Commitment shall terminate and the unpaid principal
balance and all accrued and unpaid interest on the Facility B Note will be
payable upon the first of the following dates or events to occur: (i)
acceleration of the maturity of the Facility B Note in accordance with the
remedies contained in Section 7.02; or (ii) upon the expiration of the Facility
B Commitment on the Facility B Termination Date.
(d) The amount of the Facility B Commitment shall be reduced on the
Facility B Commitment Reduction Date by an amount equal to $1,000,000.00.
SECTION 2.09. Optional Prepayments. (a) The Borrower may, upon at least one
Domestic Business Days' notice to the Bank, prepay any Base Rate Borrowing in
whole at any time, or from time to time in part, by paying the principal amount
to be prepaid together with accrued interest thereon to the date of prepayment.
(b) Except as provided in Section 3.05, the Borrower may not prepay all or
any portion of the principal amount of any Euro-Dollar Loan prior to the
maturity thereof.
(c) A notice of prepayment pursuant to this Section, once given, shall not
thereafter be revocable by the Borrower.
SECTION 2.10. Mandatory Prepayments. On each date on which the Commitments
are reduced or terminated pursuant to Section 2.07 and 2.08, the Borrower shall
repay or prepay such principal amount of the outstanding Advances, if any
(together with interest accrued thereon), as may be necessary so that after such
payment the aggregate unpaid principal amount of the outstanding Advances does
not exceed the aggregate amount of the respective Commitments as then reduced.
Each such mandatory prepayment shall be applied to reduce the Facility A
Commitment or the Facility B Commitment, as the case may be, on the applicable
Facility A Commitment Reduction Date or the Facility B Commitment Reduction Date
or on the date on which either of the Facility A Commitment or the Facility B
Commitment is terminated, as applicable.
SECTION 2.11. General Provisions Concerning Payments. (a) All payments of
principal of, or interest on, the Notes, and of the Commitment Fee, shall be
made in Federal or other funds immediately available to the Bank at its office
in Charlotte, North Carolina not later than 11:00 a.m., Charlotte, North
Carolina time. Funds received after 11:00 a.m. shall be deemed to have been paid
on the next following Domestic Business Day.
(b) Whenever any payment of principal of, or interest on, the Base Rate
Loans or of the
14
Commitment Fees shall be due on a day which is not a Domestic Business Day, the
date for payment thereof shall be extended to the next succeeding Domestic
Business Day. Whenever any payment of principal of, or interest on, the
Euro-Dollar Loans shall be due on a day which is not a Euro-Dollar Business Day,
the date for payment thereof shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another
calendar month, in which case the date for payment thereof shall be the next
preceding Euro-Dollar Business Day. If the date for any payment of principal is
extended by operation of law or otherwise, interest thereon shall be payable for
such extended time.
SECTION 2.12. Computation of Interest and Fees. Interest on Base Rate Loans
and Euro-Dollar Loans shall be computed on the basis of a year of 360 days and
paid for the actual number of days elapsed, in the case of Base Rate Loans as
provided in the Loan Access Agreement and in the case of Euro-Dollar Loans, as
to each Interest Period from and including the first day thereof to but
excluding the last day thereof. Commitment fees hereunder shall be computed on
the basis of a year of 360 days and paid for the actual number of days elapsed
(including the first day but excluding the last day).
ARTICLE III. CHANGE IN CIRCUMSTANCES; COMPENSATION
SECTION 3.01. Basis for Determining Interest Rate Inadequate or Unfair. If
on or prior to the first day of any Interest Period:
(a) the Bank determines that deposits in Dollars (in the applicable
amounts) are not being offered in the relevant market for such Interest
Period, or
(b) the Bank determines that the Interbank Offered Rate as determined
by the Bank will not adequately and fairly reflect the cost to the Bank of
funding Euro-Dollar Loans for such Interest Period,
the Bank shall forthwith give notice thereof to the Borrower, whereupon until
the Bank notifies the Borrower that the circumstances giving rise to such
suspension no longer exist, the obligations of the Bank to make or maintain
Euro-Dollar Loans shall be suspended. Unless the Borrower notifies the Bank at
least two Domestic Business Days before the date of any Borrowing of or the
commencement of any Interest Period for Euro-Dollar Loans for which a Notice of
Borrowing has previously been given that it elects not to borrow on such date,
such Borrowing shall instead be made as a Base Rate Borrowing.
SECTION 3.02. Illegality. If, after the date hereof, the adoption of any
applicable law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof (any such authority, bank or agency being referred to as an "Authority"
and any such event being referred to as a "Change of Law"), or compliance by the
Bank (or its Lending Office) with any request or directive (whether or not
having the force of law) of any Authority shall make it unlawful or impossible
for the Bank (or its Lending Office) to make, maintain or fund its Euro-Dollar
Loans and the Bank shall so notify the Borrower, whereupon until the Bank
notifies the Borrower that the circumstances giving rise to such suspension no
longer exist, the obligation of the Bank to make Euro-Dollar Loans shall be
suspended. Before giving any notice pursuant to this paragraph, the Bank shall
designate a different Lending Office if able to do so and if such designation
will avoid the need for giving such notice and will not, in the judgment of the
Bank, be otherwise disadvantageous to the Bank. If the Bank shall determine that
it may not lawfully continue to maintain and fund any of its outstanding
Euro-Dollar Loans to maturity and shall so specify in such notice, the Borrower
shall immediately prepay in full the then outstanding principal amount of each
Euro-Dollar Loan, together with accrued interest thereon. Concurrently with
prepaying each such Advance, the Borrower shall borrow an Advance as a Base Rate
Loan in an equal principal amount from the Bank and the Bank shall make such an
Advance.
15
SECTION 3.03. Increased Cost and Reduced Return. (a) If after the date
hereof, a Change of Law or compliance by the Bank (or its Lending Office) with
any request or directive (whether or not having the force of law) of any
Authority:
(i) shall subject the Bank (or its Lending Office) to any tax, duty or
other charge with respect to its Euro-Dollar Loans, the Notes or its
obligation to make or maintain Euro-Dollar Loans, or shall change the basis
of taxation of payments to the Bank (or its Lending Office) of the
principal of or interest on its Euro-Dollar Loans or any other amounts due
under this Agreement in respect of its Euro-Dollar Loans or its obligation
to make or maintain Euro-Dollar Loans (except for changes in the rate of
tax on the overall net income of the Bank or its Lending Office imposed by
the jurisdiction in which the Bank's principal executive office or Lending
Office is located); or
(ii) shall impose, modify or deem applicable any reserve, special
deposit or similar requirement (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal Reserve
System, but excluding with respect to any Euro-Dollar Loan any such
requirement included in an applicable Euro-Dollar Reserve Percentage)
against assets of, deposits with or for the account of, or credit extended
by, the Bank (or its Lending Office); or
(iii) shall impose on the Bank (or its Lending Office) or the London
interbank market any other condition affecting its Euro-Dollar Loans, its
Notes or its obligation to make or maintain Euro-Dollar Loans;
and the result of any of the foregoing is to increase the cost to the Bank (or
its Lending Office) of making or maintaining any Euro-Dollar Loan, or to reduce
the amount of any sum received or receivable by the Bank (or its Lending Office)
under this Agreement or under the Notes with respect thereto, by an amount
deemed by the Bank to be material, then, within 15 days after demand by the
Bank, the Borrower shall pay to the Bank such additional amount or amounts as
will compensate the Bank for such increased cost or reduction.
(b) If the Bank shall have determined that after the date hereof the
adoption of any applicable law, rule or regulation regarding capital adequacy,
or any change therein, or any change in the interpretation or administration
thereof, or compliance by the Bank (or its Lending Office) with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any Authority, has or would have the effect of reducing the rate of return on
the Bank's capital as a consequence of its obligations under this Agreement with
respect to any Advance to a level below that which the Bank could have achieved
but for such adoption, change or compliance (taking into consideration the
Bank's policies with respect to capital adequacy) by an amount deemed by the
Bank to be material, then from time to time, within 15 days after demand by the
Bank, the Borrower shall pay to the Bank such additional amount or amounts as
will compensate the Bank for such reduction.
(c) The Bank will promptly notify the Borrower of any event of which it has
knowledge, occurring after the date hereof, which will entitle the Bank to
compensation pursuant to this Section and will designate a different Lending
Office if such designation will avoid the need for, or reduce the amount of,
such compensation and will not, in the judgment of the Bank, be otherwise
disadvantageous to the Bank. A certificate of the Bank claiming compensation
under this Section and setting forth the additional amount or amounts to be paid
to it hereunder shall be conclusive in the absence of manifest error. In
determining such amount, the Bank may use any reasonable averaging and
attribution methods.
(d) The provisions of this Section shall be applicable with respect to any
Participant in, or Assignee or other Transferee of, the obligations of the
Borrower hereunder to the Bank, and any calculations required by such provisions
shall be made based upon the circumstances of such Participant, Assignee or
other Transferee.
SECTION 3.04. Base Rate Loans Substituted for Affected Euro-Dollar Loans.
If (i) the
16
obligation of the Bank to make or maintain Euro-Dollar Loans has been suspended
pursuant to Section 3.01 or Section 3.02, or (ii) the Bank has demanded
compensation under Section 3.03, and if in either case the Borrower, by at least
one Domestic Business Day's prior notice to the Bank shall have elected that the
provisions of this Section shall apply, then, unless and until the Bank notifies
the Borrower that the circumstances giving rise to such suspension or demand for
compensation no longer apply:
(a) all Advances which would otherwise be made by the Bank as
Euro-Dollar Loans shall be made instead as Base Rate Loans, and
(b) after each of its Euro-Dollar Loans has been repaid, all payments
of principal which would otherwise be applied to repay such Euro-Dollar
Loans shall be applied to repay its Base Rate Loans instead.
SECTION 3.05. Compensation. Upon the request of the Bank, delivered to the
Borrower, the Borrower shall pay to the Bank such amount or amounts as shall
compensate the Bank for any loss, cost or expense actually incurred by the Bank
as a result of:
(a) any optional or mandatory payment or prepayment (pursuant to
Section 3.02 or otherwise) of a Euro-Dollar Loan on a date other than the
last day of an Interest Period for such Euro-Dollar Loan; or
(b) any failure by the Borrower to prepay a Euro-Dollar Loan on the
date for such prepayment specified in the relevant notice of prepayment of
or notice of reduction of either Commitment hereunder, as the case may be;
or
(c) any failure by the Borrower to borrow an Advance as a Euro-Dollar
Loan on the date for the Borrowing specified in the applicable Notice of
Borrowing delivered pursuant to Section 2.02;
such compensation to include, without limitation, but only to the extent such
loss, cost or expense is actually incurred by the Bank, an amount equal to the
excess, if any, of (x) the amount of interest which would have accrued on the
amount so paid or prepaid or not prepaid or borrowed, for the period from the
date of such payment, prepayment or failure to prepay or borrow to the last day
of the then current Interest Period for such Euro-Dollar Loan (or, in the case
of a failure to prepay or borrow, the Interest Period for such Euro-Dollar Loan
which would have commenced on the date of such failure to prepay or borrow) at
the applicable rate of interest for such Euro-Dollar Loan provided for herein
over (y) the amount of interest (as reasonably determined by the Bank) the Bank
would have paid on deposits in Dollars of comparable amounts having terms
comparable to such period placed with it by leading banks in the London
interbank market.
ARTICLE IV. CONDITIONS TO BORROWINGS
SECTION 4.01. Conditions to First Borrowing. The obligation of the Bank to
make an Advance on the occasion of the first Borrowing is subject to the
satisfaction of the conditions set forth in Section 4.02 and the following
additional conditions:
(a) receipt by the Bank from the Borrower of a duly executed
counterpart of this Agreement signed by the Borrower;
(b) receipt by the Bank of the duly executed Notes complying with the
provisions of Section 2.03;
(c) receipt by the Bank of the duly executed Security Agreement,
Pledge Agreement and related financing statements in form and substance
satisfactory to the Bank;
17
(d) receipt by the Bank of a certificate, dated the date of the first
Borrowing, signed by a principal financial officer of the Borrower to the
effect that (i) no Default hereunder has occurred and is continuing on the
date of the first Borrowing and (ii) the representations and warranties of
the Borrower contained in Article V are true on and as of the date of the
first Borrowing hereunder;
(e) receipt by the Bank of all documents which the Bank may reasonably
request relating to the existence of the Borrower, the corporate authority
for and the validity of this Agreement and the Notes, and any other matters
relevant hereto, all in form and substance satisfactory to the Bank,
including without limitation a certificate of incumbency of the Borrower,
signed by the Secretary or an Assistant Secretary of the Borrower,
certifying as to the names, true signatures and incumbency of the officer
or officers of the Borrower authorized to execute and deliver the Loan
Documents, and certified copies of the following items: (i) the Borrower's
Certificate of Incorporation, (ii) the Borrower's Bylaws, (iii) a
certificate of the Secretary of State (or other appropriate office) of the
jurisdiction of the Borrower's incorporation as to the good standing of the
Borrower as a corporation of such jurisdiction, and (iv) the action taken
by the Board of Directors of the Borrower authorizing the Borrower's
execution, delivery and performance of this Agreement, the Notes and the
other Loan Documents to which the Borrower is a party; and
(f) receipt by the Bank of an opinion of counsel of Xxxxxx & Bird LLP,
counsel for the Borrower, substantially in the form of Exhibit D hereto,
and covering such additional matters relating to the transactions
contemplated hereby as the Bank may reasonably request.
SECTION 4.02. Conditions to All Borrowings. The obligation of the Bank to
make an Advance on the occasion of each Borrowing is subject to the satisfaction
of the following conditions:
(a) receipt by the Bank of Notice of Borrowing if required by Section
2.02;
(b) the fact that, immediately after such Borrowing, no Default shall
have occurred and be continuing;
(c) the fact that the representations and warranties of the Borrower
contained in Article V shall be true on and as of the date of such
Borrowing; and
(d) the fact that, immediately after such Borrowing, the aggregate
outstanding principal amount of the Advances under the respective
Commitments will not exceed the amount of the respective Commitments.
Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Borrower on the date of such Borrowing as to the facts specified in clauses
(b), (c) and (d) of this Section; provided that such Borrowing shall not be
deemed to be such a representation and warranty to the effect set forth in
Section 5.04(b) as to any material adverse change which has theretofore been
disclosed in writing by the Borrower to the Bank if the aggregate outstanding
principal amount of the Advances immediately after such Borrowing will not
exceed the aggregate outstanding principal amount of Advances immediately before
such Borrowing.
ARTICLE V. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 5.01. Corporate Existence and Power. The Borrower is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, is duly qualified to transact business in
every jurisdiction where, by the nature of its business, such qualification is
necessary, and has all corporate powers and all governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted.
18
SECTION 5.02. Corporate and Governmental Authorization; Contravention. The
execution, delivery and performance by the Borrower of this Agreement, the Notes
and the other Loan Documents (i) are within the Borrower's corporate powers,
(ii) have been duly authorized by all necessary corporate action, (iii) require
no action by or in respect of, or filing with, any governmental body, agency or
official, (iv) do not contravene, or constitute a default under, any provision
of applicable law or regulation or of the certificate of incorporation or
by-laws of the Borrower or of any agreement, judgment, injunction, order, decree
or other instrument binding upon the Borrower or any of its Subsidiaries, and
(v) do not result in the creation or imposition of any Lien on any asset of the
Borrower or any of its Subsidiaries except for Permitted Encumbrances.
SECTION 5.03. Binding Effect. This Agreement constitutes a valid and
binding agreement of the Borrower enforceable in accordance with its terms, and
the Notes and the other Loan Documents, when executed and delivered in
accordance with this Agreement, will constitute valid and binding obligations of
the Borrower enforceable in accordance with their respective terms, provided
that the enforceability hereof and thereof is subject in each case to general
principles of equity and to bankruptcy, insolvency and similar laws affecting
the enforcement of creditors' rights generally.
SECTION 5.04. Financial Information. (a) The consolidating and consolidated
balance sheet of Bull Run and its Consolidated Subsidiaries as of December 31,
1996 and the related consolidating and consolidated statements of income,
shareholders' equity and cash flows for the Fiscal Year then ended, reported on
(in the case of the consolidated balance sheet and consolidated statements of
income, shareholders' equity and cash flows only) by Ernst & Young LLP, copies
of which have been delivered to the Bank, and the unaudited consolidating and
consolidated financial statements of Bull Run and its Consolidated Subsidiaries
for the interim period ended September 30, 1997, copies of which have been
delivered to the Bank, fairly present, in conformity with GAAP, the
consolidating and consolidated financial position of Bull Run and its
Consolidated Subsidiaries as of such dates and their consolidating results of
operations and cash flows for such periods stated.
(b) Since September 30, 1997 there has been no material adverse change in
the business, financial position, results of operations or prospects of Bull Run
and its Consolidated Subsidiaries.
SECTION 5.05. Litigation. Except as disclosed on Schedule 5.05 hereto,
there is no action, suit or proceeding pending, or to the knowledge of the
Borrower threatened, against or affecting Bull Run, the Borrower or any of their
respective Subsidiaries before any court or arbitrator or any governmental body,
agency or official which could materially adversely affect the business,
consolidated financial position or consolidated results of operations of Bull
Run, the Borrower and their respective Consolidated Subsidiaries, or which in
any manner draws into question the validity of, or could impair the ability of
the Borrower to perform its obligations under, this Agreement, the Notes or any
of the other Loan Documents.
SECTION 5.06. Compliance with ERISA. (a) The Borrower and each member of
the Controlled Group have fulfilled their obligations under the minimum funding
standards of ERISA and the Code with respect to each Plan and are in compliance
in all material respects with the presently applicable provisions of ERISA and
the Code, and have not incurred any liability to the PBGC or a Plan under Title
IV of ERISA.
(b) Neither the Borrower nor any member of the Controlled Group is or ever
has been obligated to contribute to any Multiemployer Plan.
SECTION 5.07. Taxes. There have been filed on behalf of Bull Run, the
Borrower and their respective Subsidiaries all Federal, state and local income,
excise, property and other tax returns which are required to be filed by them
and all taxes due pursuant to such returns or pursuant to any assessment
received by or on behalf of Bull Run, the Borrower or any Subsidiary of Bull Run
or the Borrower have been paid except for those which are in good faith
19
being contested by such Person and for which adequate reserves have been
provided in accordance with GAAP. The charges, accruals and reserves on the
books of Bull Run, the Borrower and their respective Subsidiaries in respect of
taxes or other governmental charges are, in the opinion of the Borrower,
adequate. United States income tax returns of Bull Run, the Borrower and their
respective Subsidiaries have been examined and closed through the Fiscal Year
ended December 31, 1996.
SECTION 5.08. Subsidiaries. Each of Bull Run's Subsidiaries is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, and has all corporate powers and all
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted except where the failure to have such licenses,
authorizations, consents and approvals could not reasonably be expected to have
a material adverse effect on such Subsidiaries, taken as a whole.
SECTION 5.09. Not an Investment Company. The Borrower is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
SECTION 5.10. Ownership of Property; Liens. Each of the Borrower and its
Consolidated Subsidiaries has title to its properties sufficient for the conduct
of its business, and none of such property is subject to any Lien except for
Permitted Encumbrances.
SECTION 5.11. No Default. Neither the Borrower nor any of its Consolidated
Subsidiaries is in default under or with respect to any agreement, instrument or
undertaking to which it is a party or by which it or any of its property is
bound which will be materially adverse to the business, operations, property or
financial or other condition of the Borrower and its Consolidated Subsidiaries,
or which will materially adversely affect the ability of the Borrower to perform
its obligations under the Loan Documents. No Default has occurred and is
continuing (except for the Defaults existing on the date of this Agreement
described in Section 7.01(f)).
SECTION 5.12. Full Disclosure. All information heretofore furnished by the
Borrower to the Bank for purposes of or in connection with this Agreement or any
transaction contemplated hereby is, and all such information hereafter furnished
by the Borrower to the Bank will be, true, accurate and complete in every
material respect or based on reasonable estimates on the date as of which such
information is stated or certified. The Borrower has disclosed to the Bank in
writing any and all facts which materially and adversely affect or may affect
(to the extent the Borrower can now reasonably foresee), the business,
operations, prospects or condition, financial or otherwise, of the Borrower and
its Consolidated Subsidiaries or the ability of the Borrower to perform its
obligations under this Agreement.
SECTION 5.13. Environmental Matters. (a) Neither the Borrower nor any
Subsidiary of the Borrower is subject to any Environmental Liability which is
likely to have a material adverse effect on the business, financial position,
results of operations or prospects of the Borrower or any of its Subsidiaries
and neither the Borrower nor any of its Subsidiaries has been designated as a
potentially responsible party under CERCLA or under any state statute similar to
CERCLA. None of the Properties have been identified on any current or proposed
(i) National Priorities List under 40 C.F.R. Sec. 300, (ii) CERCLIS list or
(iii) any list arising from a state statute similar to CERCLA.
(b) No Hazardous Materials have been or are being used, produced,
manufactured, processed, generated, stored, disposed of, managed at, or shipped
or transported to or from the Properties or are otherwise present at, on, in or
under the Properties, or, to the best of the knowledge of the Borrower, at or
from any adjacent site or facility, except for Hazardous Materials, such as
cleaning solvents, pesticides and other materials used, produced, manufactured,
processed, generated, stored, disposed of, and managed in the ordinary course of
business in compliance with all applicable Environmental Requirements.
(c) The Borrower and each of its Subsidiaries has procured all
Environmental
20
Authorizations necessary for the conduct of its business, and is in compliance
with all Environmental Requirements in connection with the operation of the
Properties and the Borrower's and each of its Subsidiary's and Affiliate's
respective businesses except, in either case, where the failure to procure such
Environmental Authorizations or to be in compliance with such Environmental
Requirements could not reasonably be expected to have a material adverse effect
on the Borrower and its Subsidiaries, taken as a whole.
SECTION 5.14. Compliance with Laws. The Borrower and each Subsidiary of the
Borrower is in compliance with all applicable laws, except where any failure to
comply with any such laws could not, alone or in the aggregate, be reasonably
expected to have a material adverse effect on the business, financial position,
results of operations or prospects of the Borrower or any of its Subsidiaries,
taken as a whole.
ARTICLE VI. COVENANTS
The Borrower agrees that, so long as the Commitments are in effect
hereunder or any amount payable under this Agreement remains unpaid:
SECTION 6.01. Information. The Borrower will deliver or cause to be
delivered to the Bank:
(a) as soon as available and in any event within 90 days after the end
of each Fiscal Year, a consolidating and consolidated balance sheet of Bull
Run and its Consolidated Subsidiaries as of the end of such Fiscal Year and
the related consolidating and consolidated statements of income,
shareholders' equity and cash flows for such Fiscal Year, setting forth in
each case in comparative form the figures for the previous fiscal year, and
in the case of the consolidated balance sheet and consolidated statements
of income, shareholders' equity and cash flows certified by Ernst & Young
LLP or other independent public accountants of nationally recognized
standing, with such certification to be free of exceptions and
qualifications not acceptable to Bank, and in the case of the consolidating
balance sheet and the consolidating statements of income, shareholders'
equity and cash flows certified by the chief financial officer or the chief
accounting officer of Bull Run or the Borrower as to fairness of
presentation, GAAP and consistency.
(b) as soon as available and in any event within 60 days after the end
of each of the first three quarters of each Fiscal Year, a consolidating
and consolidated balance sheet of Bull Run and its Consolidated
Subsidiaries as of the end of such quarter and the related consolidating
and consolidated statement of income and statement of cash flows for such
quarter and for the portion of the Fiscal Year ended at the end of such
quarter, all certified (subject to normal year-end adjustments) as to
fairness of presentation, GAAP and consistency by the chief financial
officer or the chief accounting officer of Bull Run or the Borrower;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of the
chief financial officer or the chief accounting officer of Bull Run or the
Borrower (i) setting forth in reasonable detail the calculations required
to establish whether the Borrower was in compliance with the requirements
of Sections 6.03 through 6.07, inclusive, on the date of such financial
statements and (ii) stating whether any Default exists on the date of such
certificate and, if any Default then exists, setting forth the details
thereof and the action which the Borrower is taking or proposes to take
with respect thereto;
(d) within five Domestic Business Days after the Borrower becomes
aware of the occurrence of any Default, a certificate of the chief
financial officer or the chief accounting officer of the Borrower setting
forth the details thereof and the action which the Borrower is taking or
proposes to take with respect thereto;
(e) promptly upon the mailing thereof to the shareholders of Bull Run
or the Borrower generally, copies of all financial statements, reports and
proxy statements so mailed;
21
(f) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements
on Form S-8 or its equivalent) and annual, quarterly or monthly reports
which the Borrower or Bull Run shall have filed with the Securities and
Exchange Commission;
(g) if and when any member of the Controlled Group (i) gives or is
required to give notice to the PBGC of any Reportable Event with respect to
any Plan which might constitute grounds for a termination of such Plan
under Title IV of ERISA, or knows that the plan administrator of any 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, a copy of such notice; or (iii) receives
notice from the PBGC under Title IV of ERISA of an intent to terminate or
appoint a trustee to administer any Plan, a copy of such notice; and
(h) from time to time such additional information regarding the
financial position or business of Bull Run, the Borrower and their
respective Subsidiaries as the Bank may reasonably request.
SECTION 6.02. Inspection of Property, Books and Records. The Borrower will
keep, and will cause each of its Subsidiaries to keep, proper books of record
and account in which full, true and correct entries in conformity with GAAP
shall be made of all dealings and transactions in relation to its business and
activities; and will permit, and will cause each of its Subsidiaries to permit,
representatives of the Bank at the Bank's expense prior to the occurrence of an
Event of Default and at the Borrower's expense after the occurrence of an Event
of Default to visit and inspect any of their respective properties, to examine
and make abstracts from any of their respective books and records and to discuss
their respective affairs, finances and accounts with their respective officers,
employees and independent public accountants. The Borrower agrees to cooperate
and assist in such visits and inspections, in each case at such reasonable times
and as often as may reasonably be desired.
SECTION 6.03. Ratio of Consolidated Funded Debt to EBITDA. The ratio of
Consolidated Funded Debt to EBITDA will not at any time exceed the following
limits:
(a) from December 31, 1998 through December 31, 1999, the ratio of
Consolidated Funded Debt to EBITDA will not exceed 4.00 to 1.00;
(b) from January 1, 2000 through December 31, 2000, the ratio of
Consolidated Funded Debt to EBITDA will not exceed 2.50 to 1.00; and
(c) from January 1, 2001 until the Facility A Maturity Date, the ratio
of Consolidated Funded Debt to EBITDA will not exceed 2.00 to 1.00.
SECTION 6.04. Minimum Stockholders' Equity. Stockholders' Equity will at no
time be less than $22,456,681.00 plus the sum of 50% of the cumulative Reported
Net Income of the Borrower and its Consolidated Subsidiaries during any period
after December 31, 1996 (taken as one accounting period), calculated quarterly
beginning March 31, 1998 and quarterly thereafter but excluding from such
calculations any quarter in which the Net Income of the Borrower and its
Consolidated Subsidiaries is negative.
SECTION 6.05. Fixed Charges Coverage. (a) At the end of each Fiscal
Quarter, commencing with the Fiscal Quarter ending December 31, 1998, the Fixed
Charges Coverage Ratio, as determined in accordance with Section 6.05(b), shall
not be less than the following limits:
(i) from December 31, 1998 through December 31, 1999, the Fixed
Charges Coverage Ratio shall not be less than 1.00 to 1.00;
(ii) from January 1, 2000 through December 31, 2000, the Fixed Charges
Coverage
22
Ratio shall not be less than 2.00 to 1.00;
(iii) from January 1, 2001 and thereafter, the Fixed Charges Coverage
Ratio shall not be less than 2.50 to 1.00.
(b) The Fixed Charges Coverage Ratio shall be determined at the end of each
Fiscal Quarter, commencing with the Fiscal Quarter ending December 31, 1998, and
shall be the ratio of Income Available for Fixed Charges for the twelve months
then ended to Consolidated Fixed Charges for the twelve months then ended.
SECTION 6.06. Investments. The Borrower shall not make Investments in any
Person except (a) Investments in (i) direct obligations of the United States
Government maturing within one year, (ii) certificates of deposit issued by a
commercial bank whose credit is satisfactory to the Bank, (iii) commercial paper
rated A-1 or the equivalent thereof by Standard & Poor's Corporation or P-1 or
the equivalent thereof by Xxxxx'x Investors Service, Inc. and in either case
maturing within 6 months after the date of acquisition and/or (iv) tender bonds
the payment of the principal of and interest on which is fully supported by a
letter of credit issued by a United States bank whose long-term certificates of
deposit are rated at least AA or the equivalent thereof by Standard & Poor's
Corporation and Aa or the equivalent thereof by Xxxxx'x Investors Service, Inc.
and (b) other Investments to the extent such Investments do not cause the
Borrower to be in violation of any other provision of this Agreement, including,
without limitation, Section 6.04.
SECTION 6.07. Negative Pledge. Neither the Borrower nor any Consolidated
Subsidiary of the Borrower will create, assume or suffer to exist any Lien on
any asset now owned or hereafter acquired by it, except for Permitted
Encumbrances.
SECTION 6.08. Maintenance of Existence. The Borrower shall, and shall cause
each of its Subsidiaries to, maintain its corporate existence and carry on its
business in substantially the same manner and in substantially the same fields
as such business is now carried on and maintained.
SECTION 6.09. Dissolution. Neither the Borrower nor any of its Subsidiaries
shall suffer or permit dissolution or liquidation either in whole or in part or
redeem or retire any shares of its own stock or that of any of its Subsidiaries,
except through corporate reorganization to the extent permitted by Section 6.10.
SECTION 6.10. Consolidations, Mergers and Sales of Assets. The Borrower
will not, nor will it permit any of its Subsidiaries to, consolidate or merge
with or into, or sell, lease or otherwise transfer all or any substantial part
of its assets to, any other Person, or discontinue or eliminate any business
line or segment, provided that
(a) the Borrower may merge with another Person if (i) such Person was
organized under the laws of the United States of America or one of its
states, (ii) the Borrower is the corporation surviving such merger and
(iii) immediately after giving effect to such merger, no Default shall have
occurred and be continuing, and
(b) Subsidiaries of the Borrower may merge with one another.
SECTION 6.11. Use of Proceeds. No portion of the proceeds of the Advances
will be used by the Borrower (i) in connection with any tender offer for, or
other acquisition of, stock of any corporation with a view towards obtaining
control of such other corporation, (ii) directly or indirectly, for the purpose,
whether immediate, incidental or ultimate, of purchasing or carrying any Margin
Stock, or (iii) for any purpose in violation of any applicable law or
regulation.
SECTION 6.12. Compliance with Laws; Payment of Taxes. The Borrower will,
and will cause each of its Subsidiaries and each member of the Controlled Group
to, comply with
23
applicable laws (including but not limited to ERISA), regulations and similar
requirements of governmental authorities (including but not limited to PBGC),
except where the necessity of such compliance is being contested in good faith
through appropriate proceedings or where the failure to comply could not
reasonably be expected to have a material adverse effect on the Borrower or any
of its Consolidated Subsidiaries. The Borrower will, and will cause each of its
Subsidiaries to, pay promptly when due all taxes, assessments, governmental
charges, claims for labor, supplies, rent and other obligations which, if
unpaid, might become a lien against the property of the Borrower or any of its
Subsidiaries, except liabilities being contested in good faith and against
which, if requested by the Bank, the Borrower will set up reserves satisfactory
to the Bank.
SECTION 6.13. Insurance. The Borrower will maintain, and will cause each of
its Subsidiaries to maintain (either in the name of the Borrower or in such
Subsidiary's own name), with financially sound and reputable insurance
companies, insurance on all its property in at least such amounts and against at
least such risks as are usually insured against in the same general area by
companies of established repute engaged in the same or similar business.
SECTION 6.14. Change in Fiscal Year. The Borrower will not change its
Fiscal Year without the consent of the Bank.
SECTION 6.15. Maintenance of Property. The Borrower shall, and shall cause
each of its Subsidiaries to, maintain all of its properties and assets in good
condition, repair and working order, ordinary wear and tear excepted.
SECTION 6.16. Environmental Notices. The Borrower shall furnish to the Bank
prompt written notice of all Environmental Liabilities, pending, threatened or
anticipated Environmental Proceedings, Environmental Notices, Environmental
Judgments and Orders, and Environmental Releases at, on, in, under or in any way
affecting the Properties or any adjacent property, and all facts, events, or
conditions that could lead to any of the foregoing.
SECTION 6.17. Environmental Matters. The Borrower will not, and will not
permit any Third Party to, use, produce, manufacture, process, generate, store,
dispose of, manage at, or ship or transport to or from the Properties any
Hazardous Materials except for Hazardous Materials such as cleaning solvents,
pesticides and other similar materials used, produced, manufactured, processed,
generated, stored, disposed or managed in the ordinary course of business in
compliance with all applicable Environmental Requirements.
SECTION 6.18. Environmental Release. The Borrower agrees that upon the
occurrence of an Environmental Release it will act immediately to investigate
the extent of, and to take appropriate remedial action to eliminate, such
Environmental Release, whether or not ordered or otherwise directed to do so by
any Environmental Authority.
SECTION 6.19. Debt. The Borrower will not, and will not permit any of its
Consolidated Subsidiaries to, incur, borrow, assume or suffer to exist any Debt
other than Debt outstanding under this Agreement and other Debt outstanding on
the date of this Agreement and reflected in the financial statements referenced
in Section 5.04 (but not increases of any such other Debt outstanding on the
date of this Agreement).
SECTION 6.20. Collateral Maintenance. The Obligations are secured by
personal property described in the Security Agreement and certain investment
securities described in the Pledge Agreement. The Borrower agrees that the
Borrower will at all times maintain collateral in which the Bank shall have a
first priority perfected security interest having an aggregate value (as
determined quarterly based on the value reflected for such collateral in the
financial statements furnished to the Bank pursuant to Section 6.01(a) and (b))
at least equal to the aggregate amount of the Obligations at the time of
determination; provided that in determining the value of collateral pledged to
the Bank to secure the Obligations as provided in this Section, the investment
securities pledged to the Bank pursuant to the Pledge Agreement shall be
excluded.
24
SECTION 6.21 Interest Rate Protection. The Borrower shall enter into on or
before the Closing Date and maintain so long as any Obligations under the
Facility A Commitment remain outstanding an interest rate protection agreement
or other interest rate hedge or arrangement in form and substance satisfactory
to the Bank fixing the interest rate on Advances under the Facility A
Commitment. The Bank acknowledges that the International Swap Dealers
Association Master Agreement and related documentation dated January 15, 1998
executed by the Borrower and the Bank satisfy the requirements of this Section
so long as such documentation remains in effect.
ARTICLE VII. DEFAULTS
SECTION 7.01. Events of Default. The occurrence of any one or more of the
following events shall constitute an Event of Default by the Borrower under this
Agreement:
(a) the Borrower shall fail to pay when due any principal of any
Advance or shall fail to pay any interest on any Advance within five
Domestic Business Days after such interest shall become due, or shall fail
to pay any fee or other amount payable hereunder within five Domestic
Business Days after such fee or other amount becomes due; or
(b) the Borrower shall fail to observe or perform any covenant
contained in Sections 6.03 through 6.11, inclusive; or
(c) the Borrower shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those covered by clause
(a) or (b) above) for thirty days after the earlier of (i) the first day on
which a responsible officer of the Borrower has knowledge of such failure,
or (ii) written notice thereof has been given to the Borrower by the Bank;
or
(d) any representation, warranty, certification or statement made by
the Borrower in Article V or in any certificate, financial statement or
other document delivered pursuant to this Agreement shall prove to have
been incorrect in any material respect when made (or deemed made); or
(e) Bull Run shall fail to make any payment in respect of any Debt
outstanding in the aggregate in excess of $500,000 when due or within any
applicable grace period or the Borrower or any Subsidiary of Bull Run or
the Borrower shall fail to make any payment in respect of any Debt
outstanding (other than the Notes) in the aggregate in excess of $250,000
when due or within any applicable grace period; or
(f) (i) any event or condition shall occur which results in the
acceleration of the maturity of Debt outstanding of Bull Run in the
aggregate in excess of $500,000 or of Debt of the Borrower or any
Subsidiary of Bull Run or the Borrower in the aggregate in excess of
$250,000 or the purchase of such Debt in the aggregate in excess of
$500,000 by Bull Run (or its designees) prior to the scheduled maturity
thereof, or the purchase of such Debt in the aggregate in excess of
$250,000 by the Borrower (or its designee) or such Subsidiary of Bull Run
(or its designee) or such Subsidiary of the Borrower (or its designee)
prior to the scheduled maturity thereof or (ii) enables (or, with the
giving of notice or lapse of time or both, would enable) the holders of
such Debt or any Person acting on such holders' behalf to accelerate the
maturity of Debt in the aggregate in excess of $500,000 or require the
purchase thereof by Bull Run (or its designee) prior to the scheduled
maturity thereof, or enables (or, with the giving of notice or lapse of
time or both, would enable) the holders of such Debt or any Person acting
on such holders' behalf to accelerate the maturity of Debt in the aggregate
in excess of $250,000 or require the purchase thereof by the Borrower (or
its designee) or such Subsidiary of Bull Run (or its designee) or such
subsidiary of the Borrower (or its designee) prior to the scheduled
maturity thereof, without regard to whether such holders or other Person
shall have exercised or waived their right to do so; provided, however,
that if the holder of any such Debt shall have waived its right to
accelerate the maturity of such Debt or require the purchase of such Debt
prior to its scheduled maturity and the Bank shall not have declared the
Notes to be due and payable pursuant to Section 7.02, Bank shall be deemed
to have waived any Event of Default
25
(and its right to declare an Event of Default) arising by reason of this
subsection (ii); and provided further that the defaults under the financing
agreements between Bull Run and NationsBank, N.A. existing on the date of
this Agreement resulting from violations of the leverage ratio and debt
service coverage covenants shall not constitute Events of Default hereunder
so long as (A) NationsBank, N.A. does not accelerate the maturity of the
Debt outstanding thereunder or exercise any other remedies in connection
therewith, (B) such defaults have been cured or waived on or before April
20, 1998 and no other defaults under such financing agreements shall then
be in existence, and (C) the Borrower shall certify to the Bank no later
than April 20, 1998 that the conditions specified in clauses (A) and (B)
above have been satisfied and furnish to the Bank no later than April 20,
1998 copies of the documents executed by NationsBank, N.A. and Bull Run
evidencing the waiver and/or modification of the existing covenant
defaults.
(g) Bull Run, the Borrower or any Subsidiary of Bull Run or the
Borrower shall commence a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to itself or its
debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial
part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary
case or other proceeding commenced against it, or shall make a general
assignment for the benefit of creditors, or shall fail generally to pay its
debts as they become due, or shall take any corporate action to authorize
any of the foregoing; or
(h) an involuntary case or other proceeding shall be commenced against
Bull Run, the Borrower or any Subsidiary of Bull Run or the Borrower
seeking liquidation, reorganization or other relief with respect to it or
its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial
part of its property, and such involuntary case or other proceeding shall
remain undismissed and unstayed for a period of 60 days; or an order for
relief shall be entered against Bull Run, the Borrower or any Subsidiary of
Bull Run or the Borrower under the federal bankruptcy laws as now or
hereafter in effect; or
(i) the Borrower or any member of the Controlled Group shall fail to
pay when due any material amount which it shall have become liable to pay
to the PBGC or to a Plan under Title IV of ERISA; or the PBGC shall
institute proceedings under Title IV of ERISA to terminate or to cause a
trustee to be appointed to administer any such Plan or Plans or a
proceeding shall be instituted by a fiduciary of any such Plan or Plans to
enforce Section 515 or 4219(c)(5) of ERISA and such proceeding shall not
have been dismissed within 60 days thereafter; or a condition shall exist
by reason of which the PBGC would be entitled to obtain a decree
adjudicating that any such Plan or Plans must be terminated; or
(j) one or more judgments or orders for the payment of money in an
aggregate amount in excess of $250,000.00 (exclusive of any amounts covered
by insurance as to which the insurance carrier is not disputing its
obligations with respect to such insurance) shall be rendered against the
Borrower or any Subsidiary of the Borrower and such judgment or order shall
continue unsatisfied and unstayed for a period of 30 days; or
(k) a federal tax lien shall be filed against the Borrower under
Section 6323 of the Code or a lien of the PBGC shall be filed against the
Borrower under Section 4068 of ERISA and in either case such lien shall
remain undischarged for a period of 60 days after the date of filing; or
(l) any Person or two or more Persons acting in concert shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of
1934) of 20% or more of the outstanding shares of the voting stock of Bull
Run or the Borrower; or (ii) as of any date a majority of the Board of
Directors of Bull Run or the Borrower consists of individuals who were not
either (A) directors of Bull Run or the Borrower as of the corresponding
date of the previous year, (B) selected or nominated
26
to become directors by the Board of Directors of Bull Run or the Borrower
of which a majority consisted of individuals described in clause (A), or
(C) selected or nominated to become directors by the Board of Directors of
Bull Run or the Borrower of which a majority consisted of individuals
described in clause (A) and individuals described in clause (B).
SECTION 7.02. Remedies on Default. Upon the occurrence of an Event of
Default, the Bank may, by notice to the Borrower, terminate the Commitments
which shall thereupon terminate, and by notice to the Borrower declare the Notes
(together with accrued interest thereon) to be, and the Notes and all
outstanding Advances shall thereupon become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower; provided that if any Event of Default specified
in clause (g) or (h) above occurs with respect to the Borrower, without any
notice to the Borrower or any other act by the Bank, the Commitments shall
thereupon terminate and the Notes and all outstanding Advances (together with
accrued interest thereon) and fees shall become immediately due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrower.
SECTION 7.03. Security Interest; Offset. In addition to, and not in
limitation of, all rights of offset that the Bank or other holder of either Note
may have under applicable law, the Borrower hereby grants to the Bank, and to
each Participant, Assignee or other Transferee, as security for the full and
punctual payment and performance of the obligations to pay to the Bank the
principal of and interest on the Advances and other amounts due hereunder, a
continuing lien on and security interest in all deposits and other sums credited
by or due from the Bank (or such Participant, Assignee or other Transferee) to
the Borrower or subject to withdrawal by the Borrower; and regardless of the
adequacy of any collateral or other means of obtaining repayment of the
Obligations, the Bank (and each such Assignee and, to the extent permitted by
applicable law, each such Participant and other Transferee) may, at any time
after the occurrence of an Event of Default and without notice to the Borrower,
set off the whole or any portion or portions of any or all such deposits and
other sums against the amounts owing under this Agreement and the Notes, whether
or not any other Person or Persons could also withdraw money therefrom.
ARTICLE VIII. MISCELLANEOUS
SECTION 8.01. Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including facsimile transmission or
similar writing) and shall be given to such party at its address set forth below
or such other address as such party may hereafter specify for the purpose by
notice to the other party:
(a) If to the Borrower:
Datasouth Computer Corporation
P. O. Xxx 000000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxxxxxx
Fax number: (000) 000-0000
(b) If to the Bank:
Wachovia Bank, N.A.
P. O. Xxx 00000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxxxxxxxxx X. Xxxxxxx
Fax number: (000) 000-0000
Each such notice, request or other communication shall be effective (i) if given
by mail, 72 hours after such communication is deposited in the mails with first
class postage prepaid,
27
addressed as aforesaid or (ii) if given by any other means, when delivered at
the address specified in this Section; provided that notices to the Bank under
Article II or Article III shall not be effective until received.
SECTION 8.02. No Waivers. No failure or delay by the Bank in exercising any
right, power or privilege hereunder or under the Notes shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative and not exclusive of
any rights or remedies provided by law.
SECTION 8.03. Expenses; Documentary Taxes. (a) The Borrower shall pay (i)
all out-of-pocket expenses of the Bank, including fees and disbursements of
counsel for the Bank, in connection with the preparation of this Agreement and
the other Loan Documents, any waiver or consent hereunder or any amendment
hereof or any actual or alleged Default hereunder and (ii) if an Event of
Default occurs, all out-of-pocket expenses incurred by the Bank, including fees
and disbursements of counsel, in connection with such Event of Default and
collection and other enforcement proceedings resulting therefrom, including
out-of-pocket expenses incurred in enforcing this Agreement and the other Loan
Documents. The Borrower shall indemnify the Bank against any transfer taxes,
documentary taxes, assessments or charges made by any Authority by reason of the
execution and delivery of this Agreement or the other Loan Documents.
(b) The Borrower shall indemnify the Bank and each Affiliate thereof and
their respective directors, officers, employees and agents from, and hold each
of them harmless against, any and all losses, liabilities, claims or damages to
which any of them may become subject, insofar as such losses, liabilities,
claims or damages arise out of or result from any actual or proposed use by the
Borrower of the proceeds of any extension of credit by the Bank hereunder or
breach by the Borrower of this Agreement or any other Loan Document or from
investigation, litigation (including, without limitation, any actions taken by
the Bank to enforce this Agreement or any of the other Loan Documents) or other
proceeding (including, without limitation, any threatened investigation or
proceeding) relating to the foregoing, and the Borrower shall reimburse the
Bank, and each Affiliate thereof and their respective directors, officers,
employees and agents, upon demand for any expenses (including, without
limitation, legal fees) incurred in connection with any such investigation or
proceeding; but excluding any such losses, liabilities, claims, damages or
expenses incurred by reason of the gross negligence or willful misconduct of the
Person to be indemnified.
SECTION 8.04. Amendments and Waivers. Any provision of this Agreement, the
Notes or any other Loan Documents may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by the Borrower and the Bank.
SECTION 8.05. Successors and Assigns. (a) The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that the Borrower may not assign or
otherwise transfer any of its rights under this Agreement.
(b) The Bank may at any time sell to one or more Persons (each a
"Participant") participating interests in any Advance, the Notes, the
Commitments hereunder or any other interest of the Bank hereunder. In the event
of any such sale by the Bank of a participating interest to a Participant, the
Bank's obligations under this Agreement shall remain unchanged, the Bank shall
remain solely responsible for the performance thereof, the Bank shall remain the
holder of the Notes for all purposes under this Agreement, and the Borrower
shall continue to deal solely and directly with the Bank in connection with the
Bank's rights and obligations under this Agreement. In no event shall the Bank
be obligated to the Participant to take or refrain from taking any action
hereunder except that the Bank may agree that it will not (except as provided
below), without the consent of the Participant, agree to (i) the change of any
date fixed for the payment of principal of or interest on the related Advance or
Advances, (ii) the change of the amount of any principal, interest or fees due
on any date fixed for the payment
28
thereof with respect to the related Advance or Advances, (iii) the change of the
principal of the related Advance or Advances, (iv) any change in the rate at
which either interest is payable thereon or (if the Participant is entitled to
any part thereof) commitment fee is payable hereunder from the rate at which the
Participant is entitled to receive interest or commitment fee (as the case may
be) in respect of such participation, (v) the release or substitution of all or
any substantial part of the collateral (if any) held as security for the
Advances, or (vi) the release of any guaranty given to support payment of the
Advances. The Bank shall, within ten Domestic Business Days after selling a
participating interest in any Advance, the Notes, the Commitments or other
interest under this Agreement, provide the Borrower with written notification
stating that such sale has occurred and identifying the Participant and the
interest purchased by such Participant. The Borrower agrees that each
Participant shall be entitled to the benefits of Article III and Section 7.03
with respect to its participation in Advances outstanding from time to time.
(c) The Bank may at any time assign to one or more banks or financial
institutions (each an "Assignee") all, or a proportionate part of all, of its
rights and obligations under this Agreement and one or both Notes, and such
Assignee shall assume all such rights and obligations, pursuant to an Assignment
and Acceptance in the form attached hereto as Exhibit C executed by such
Assignee, the Bank and the Borrower; provided that (i) no interest may be sold
by the Bank pursuant to this paragraph (c) unless the Assignee shall agree to
assume ratably equivalent portions of the respective Commitment, and (ii) no
interest may be sold by the Bank pursuant to this paragraph (c) to any Assignee
which is not an Affiliate of the Bank without the consent of the Borrower, which
consent shall not be unreasonably withheld or delayed. Upon (A) execution of the
Assignment and Acceptance by the Bank, such Assignee, and the Borrower, (B)
delivery of an executed copy of the Assignment and Acceptance to the Borrower,
and (C) payment by such Assignee to the Bank of an amount equal to the purchase
price agreed between the Bank and such Assignee, such Assignee shall for all
purposes be a Bank party to this Agreement and shall have all the rights and
obligations of a Bank under this Agreement to the same extent as if it were an
original party hereto with a Commitment as set forth in such instrument of
assumption, and the Bank shall be released from its obligations hereunder to a
corresponding extent, and no further consent or action by the Borrower or the
Bank shall be required. Upon the consummation of any transfer to an Assignee
pursuant to this paragraph (c), the Bank and the Borrower shall make appropriate
arrangements so that, if required, a new Note or Notes are issued to such
Assignee.
(d) Subject to the provisions of Section 8.06, the Borrower authorizes the
Bank to disclose to any Participant, Assignee or other transferee (each a
"Transferee") and any prospective Transferee any and all financial information
in the Bank's possession concerning the Borrower which has been delivered to the
Bank by the Borrower pursuant to this Agreement or which has been delivered to
the Bank by the Borrower in connection with the Bank's credit evaluation prior
to entering into this Agreement.
(e) No Transferee shall be entitled to receive any greater payment under
Section 3.03 than the transferor Bank would have been entitled to receive with
respect to the rights transferred, unless such transfer is made with the
Borrower's prior written consent or by reason of the provisions of Section 3.02
or 3.03 requiring the Bank to designate a different Lending Office under certain
circumstances or at a time when the circumstances giving rise to such greater
payment did not exist.
(f) Anything in this Section 8.05 to the contrary notwithstanding, the Bank
may assign and pledge all or any portion of the loans and/or obligations owing
to it to any Federal Reserve Bank or the United States Treasury as collateral
security pursuant to Regulation A of the Board of Governors of the Federal
Reserve System and Operating Circular issued by such Federal Reserve Bank,
provided that any payment in respect of such assigned Loan and/or obligations
made by the Borrower to the Bank in accordance with the terms of this Agreement
shall satisfy the Borrower's obligations hereunder in respect of such assigned
Loan and/or obligations to the extent of such payment. No such assignment shall
release the Bank from its obligations hereunder.
29
SECTION 8.06. Confidentiality. The Bank agrees to exercise its best efforts
to keep any information delivered or made available by the Borrower to it which
is clearly indicated to be confidential information, confidential from any one
other than persons employed or retained by the Bank who are or are expected to
become engaged in evaluating, approving, structuring or administering the
Advances; provided, however, that nothing herein shall prevent the Bank from
disclosing such information (i) upon the order of any court or administrative
agency, (ii) upon the request or demand of any regulatory agency or authority
having jurisdiction over the Bank, (iii) which has been publicly disclosed, (iv)
to the extent reasonably required in connection with any litigation to which the
Bank or their respective Affiliates may be a party, (v) to the extent reasonably
required in connection with the exercise of any remedy hereunder, (vi) to the
Bank's legal counsel and independent auditors and (vii) to any actual or
proposed Participant, Assignee or other Transferee of all or part of its rights
hereunder which has agreed in writing to be bound by the provisions of this
Section.
SECTION 8.07. Interest Limitation. Notwithstanding any other term of this
Agreement, the Notes or any other Loan Document, the maximum amount of interest
which may be charged to or collected from any person liable hereunder or under
the Notes by the Bank shall be absolutely limited to, and shall in no event
exceed, the maximum amount or interest which could lawfully be charged or
collected under applicable law (including, to the extent applicable, the
provisions of section 5197 of the Revised Statutes of the United States of
America, as amended, 12 U.S.C. Sec. 85, as amended), so that the maximum of
all amounts constituting interest under applicable law, howsoever computed,
shall never exceed as to any Person liable therefor such lawful maximum, and
any term of this Agreement, the Notes or any other Loan Document which could be
construed as providing for interest in excess of such lawful maximum shall be
and hereby is made expressly subject to and modified by the provisions of this
paragraph.
SECTION 8.08. Governing Law. This Agreement and the Notes shall be
construed in accordance with and governed by the law of the State of North
Carolina. This Agreement and the Notes are intended to be effective as
instruments executed under seal.
SECTION 8.09. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
SECTION 8.10. Consent to Jurisdiction. The Borrower (a) submits to personal
jurisdiction in the State of North Carolina, the courts thereof and the United
States District Courts sitting therein, for the enforcement of this Agreement,
the Notes and the other Loan Documents, (b) waives any and all personal rights
under the law of any jurisdiction to object on any basis (including, without
limitation, inconvenience of forum) to jurisdiction or venue within the State of
North Carolina for the purpose of litigation to enforce this Agreement, the
Notes or the other Loan Documents, and (c) agrees that service of process may be
made upon it in the manner prescribed in Section 8.01 for the giving of notice
to the Borrower. Nothing herein contained, however, shall prevent the Bank from
bringing any action or exercising any rights against any security and against
the Borrower personally, and against any assets of the Borrower, within any
other state or jurisdiction.
SECTION 8.11. Severability. If any provisions of this Agreement shall be
held invalid under any applicable laws, such invalidity shall not affect any
other provision of this Agreement that can be given effect without the invalid
provision, and, to this end, the provisions hereof are severable.
SECTION 8.12. Captions. Captions in this Agreement are for the convenience
of reference only and shall not affect the meaning or interpretation of the
provisions hereof.
30
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the year and day first above written.
BORROWER:
DATASOUTH COMPUTER CORPORATION
ATTEST:
/s/ XXXXXXXXX X. XXXXXXXX By: /s/ XXXXXXXXX X. XXXXXXXX
------------------------- ----------------------------------
Secretary Title: Executive VP - Finance &
Administration
--------------------------------
[CORPORATE SEAL]
BANK:
Lending Office WACHOVIA BANK, N.A.
Wachovia Bank, N.A.
P. O. Xxx 00000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000 By: /s/ XXXX X. XXXXXX
----------------------------------
Title: Banking Officer
--------------------------------
31
