CREDIT AGREEMENT
Dated as of September 10, 1998
among
TRANSACTION NETWORK SERVICES, INC.
as Borrower,
The Several Lenders From Time to Time
Parties Hereto
and
PNC BANK, NATIONAL ASSOCIATION
as Agent
$75,000,000 CREDIT FACILITIES
TABLE OF CONTENTS
Page
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SECTION 1. DEFINITIONS.................................................................. 1
1.1 Defined Terms.................................................................. 1
1.2 Other Definitional Provisions.................................................. 19
SECTION 2. LOANS AND LETTERS OF CREDIT.................................................. 20
2.1 Commitments.................................................................... 20
2.2 Notes.......................................................................... 20
2.3 Procedure for Loans............................................................ 21
2.4 L/C Commitment................................................................. 22
2.5 Procedure for Issuance of Letters of Credit.................................... 23
2.6 Fees, Commissions and Other Charges............................................ 23
2.7 L/C Participations............................................................. 24
2.8 Reimbursement Obligation of the Borrower....................................... 25
2.9 Obligations Absolute........................................................... 26
2.10 Letter of Credit Payments...................................................... 26
2.11 Application.................................................................... 27
SECTION 3. GENERAL PROVISIONS APPLICABLE TO LOANS....................................... 27
3.1 Fees........................................................................... 27
3.2 Interest Rates and Payment Dates............................................... 27
3.3 Default Interest............................................................... 28
3.4 Inability to Determine Interest Rate........................................... 28
3.5 Termination, Reduction and Extension of Commitments............................ 29
3.6 Optional Prepayment of Loans................................................... 30
3.7 Mandatory Prepayments.......................................................... 31
3.8 Illegality..................................................................... 31
3.9 Requirements of Law............................................................ 32
3.10 Taxes.......................................................................... 33
3.11 Indemnity...................................................................... 35
3.12 Pro Rata Treatment of Loans, L/C's and Payments; Commitment Fees............... 36
3.13 Payments....................................................................... 36
3.14 Conversion and Continuation Options............................................ 37
3.15 Minimum Amounts of Tranches; Maximum Number of Tranches........................ 38
3.16 Use of Proceeds................................................................ 38
SECTION 4. REPRESENTATIONS AND WARRANTIES............................................... 38
4.1 Financial Condition............................................................ 38
4.2 No Change...................................................................... 39
4.3 Corporate Existence; Compliance with Law....................................... 39
4.4 Corporate Power; Authorization; Enforceable....................................
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Obligations.......................................................... 39
4.5 No Legal Bar.................................................................. 40
4.6 No Material Litigation........................................................ 40
4.7 No Default.................................................................... 40
4.8 Taxes......................................................................... 41
4.9 Federal Regulations........................................................... 41
4.10 ERISA......................................................................... 41
4.11 Investment Company Act........................................................ 42
4.12 Purpose of Loans.............................................................. 42
4.13 Environmental Matters......................................................... 42
4.14 No Material Misstatements..................................................... 44
4.15 Intellectual Property......................................................... 44
4.16 Subsidiaries ................................................................. 44
4.17 Public Utility Holding Company Act............................................ 44
4.18 Year 2000..................................................................... 45
4.19 Title to Properties........................................................... 45
4.20 No Burdensome Restrictions.................................................... 45
4.21 TASG Acquisition.............................................................. 45
4.22 Solvency...................................................................... 46
SECTION 5. CONDITIONS PRECEDENT........................................................ 46
5.1 Conditions to Initial Extension of Credit..................................... 46
5.2 Conditions to Each Extension of Credit........................................ 48
SECTION 6. AFFIRMATIVE COVENANTS....................................................... 49
6.1 Financial Statements.......................................................... 49
6.2 Certificates; Other Information............................................... 50
6.3 Payment of Obligations........................................................ 50
6.4 Conduct of Business and Maintenance of Existence.............................. 50
6.5 Maintenance of Property; Insurance............................................ 51
6.6 Inspection of Property, Books and Records..................................... 51
6.7 Notices....................................................................... 51
6.8 Environmental Laws............................................................ 52
6.9 Subsequent Credit Terms....................................................... 53
6.10 New Subsidiaries.............................................................. 53
6.11 Management Changes............................................................ 53
6.12 Subordination of Intercompany Loans, Other Loans and Advances to the Borrower. 54
SECTION 7. NEGATIVE COVENANTS.......................................................... 54
7.1 Financial Condition Covenants................................................. 54
7.2 Limitation on Liens........................................................... 55
7.3 Limitation of Indebtedness.................................................... 56
7.4 Limitations on Fundamental Changes............................................ 56
7.5 Limitation on Sale of Assets.................................................. 57
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7.6 Limitation on Distributions................................................... 58
7.7 Transactions with Affiliates.................................................. 58
7.8 Sale and Leaseback............................................................ 58
7.9 Limitation on Investments, Loans and Advances................................. 58
7.10 Limitation on Optional Payments and Modifications of Debt Instruments......... 60
7.11 Limitation on Negative Pledge Clauses......................................... 60
7.12 Fiscal Year................................................................... 61
7.13 Limitation on Conduct of Business............................................. 61
7.14 Changes in Organizational Documents........................................... 61
SECTION 8. EVENTS OF DEFAULT........................................................... 61
8.1 Events of Default............................................................. 61
SECTION 9. THE AGENT................................................................... 65
9.1 Appointment................................................................... 65
9.2 Delegation of Duties.......................................................... 65
9.3 Exculpatory Provisions........................................................ 65
9.4 Reliance by Agent............................................................. 66
9.5 Notice of Default............................................................. 66
9.6 Non-Reliance on Agent and Other Lenders....................................... 67
9.7 Indemnification............................................................... 67
9.8 Agent in its Individual Capacity.............................................. 68
9.9 Successor Agent............................................................... 68
9.10 Beneficiaries................................................................. 69
SECTION 10. MISCELLANEOUS.............................................................. 69
10.1 Amendments and Waivers........................................................ 69
10.2 Notices....................................................................... 70
10.3 No Waiver; Cumulative Remedies................................................ 71
10.4 Survival of Representations and Warranties.................................... 71
10.5 Payment of Expenses and Taxes................................................. 71
10.6 Successors and Assigns........................................................ 72
10.7 Disclosure of Information..................................................... 77
10.8 Adjustments; Set-off.......................................................... 77
10.9 Counterparts.................................................................. 78
10.10 Severability.................................................................. 78
10.11 Integration .................................................................. 78
10.12 GOVERNING LAW................................................................. 78
10.13 Submission To Jurisdiction; Waivers........................................... 79
10.14 Acknowledgements.............................................................. 80
10.15 WAIVERS OF JURY TRIAL......................................................... 80
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CREDIT AGREEMENT
AGREEMENT, dated as of September 10, 1998, among TRANSACTION
NETWORK SERVICES, INC. (the "Borrower"); the several banks and other lenders
from time to time parties hereto (each a "Lender"; collectively, the "Lenders");
and PNC BANK, NATIONAL ASSOCIATION, as Agent (in such capacity, the "Agent").
W I T N E S S E T H:
In consideration of the promises and the agreements
hereinafter set forth, and intending to be legally bound hereby, the parties
hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
"Affiliate": as to any Person, any other Person which,
directly or indirectly, through one or more intermediaries, controls,
or is controlled by, or is under common control with, such Person and
any member, director, officer or employee of any such Person. For
purposes of this definition, "control" shall mean the power, directly
or indirectly, either to (a) vote 10% or more of the Voting Stock of
such Person or (b) direct or in effect cause the direction of the
management and policies of such Person whether by contract or
otherwise.
"Agreement": this Credit Agreement, as amended, supplemented
or otherwise modified from time to time.
"Applicable Margin": on any date, for a Base Rate Loan or
Eurodollar Loan, the percentage per annum set forth below in the column
entitled Base Rate or Euro-Rate, as appropriate, opposite the Leverage
Ratio shown on the last Compliance Certificate delivered by the
Borrower to the Agent pursuant to subsection 6.2(a) prior to such date:
Leverage
Level Ratio Base Rate Euro-Rate
----- -------- --------- ---------
1 Less than or equal to 0% .750%
2.00 to 1
1
2 Greater than 0% 1.000%
2.00 to 1 but
less than or equal
to 2.50 to 1
3 Greater than
2.50 to 1 .250% 1.250%
; provided, however, that (a) adjustments, if any, to the Applicable
Margin resulting from a change in the Leverage Ratio shall be effective
two Business Days after the last date that the applicable Compliance
Certificate is due in accordance with the provisions of subsection
6.2(a), (b) in the event that no Compliance Certificate has been
delivered for a fiscal quarter prior to the last date on which it can
be delivered without violation of subsection 6.2(a), the Applicable
Margin from such date until two Business Days after such Compliance
Certificate is actually delivered shall be that applicable when the
Leverage Ratio is in Level 3, (c) in the event that the actual Leverage
Ratio for any period is subsequently determined to be greater than that
set forth in the Compliance Certificate for such period, the Applicable
Margin shall be recalculated for the applicable period based upon such
actual Leverage Ratio and (d) notwithstanding anything to the contrary
herein other than clause (b) above, until two Business Days after the
last date that the Compliance Certificate for the period ended December
31, 1998 is due in accordance with the provisions of subsection 6.2(a),
the Applicable Margin shall be that applicable when the Leverage Ratio
is in Level 1.
"Application": in respect of each Letter of Credit
issued by the Issuing Bank, an application, in such form as
the Issuing Bank may specify from time to time, requesting
issuance of such Letter of Credit.
"Asset Sale": means any sale, lease, transfer or other
disposition of assets (each referred to for the purposes of this
definition as a "disposition") by the Borrower or any Subsidiary, other
than (a) dispositions of inventory in the ordinary course of business
(including dispositions to a customer of inventory manufactured for
sale to such customer), (b) dispositions of surplus or obsolete
inventory or equipment, waste or by-product material in the ordinary
course of business and (c) dispositions of Cash Equivalents.
"Assignment and Acceptance": an assignment and
acceptance entered into by a Lender and a Purchasing Lender,
and accepted by the Agent, in the form of Exhibit F, or such
other form as shall be approved by the Agent.
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"Available Commitments": at any particular time, an
amount equal to the excess, if any, of the aggregate
Commitments at such time over the sum of (a) the aggregate
unpaid principal amount of the Loans outstanding at such
time and (b) the L/C Obligations outstanding at such time.
"Base Rate": for any day, a rate per annum (rounded upwards,
if necessary, to the next 1/100th of 1%) equal to the greater of (a)
the Prime Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. If for any reason
the Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the
Federal Funds Effective Rate for any reason, including the inability or
failure of the Agent to obtain sufficient quotations in accordance with
the definition of such term, the Base Rate shall be determined without
regard to clause (b) of the first sentence of this definition until the
circumstances giving rise to such inability no longer exist. Any change
in the Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective on the effective date of such change
in the Prime Rate or the Federal Funds Effective Rate, as the case may
be.
"Base Rate Loans": Loans bearing interest at a rate
determined by reference to the Base Rate.
"Borrowing": either (a) a borrowing of Base Rate Loans (b) in
the case of Eurodollar Loans, a group of Loans of a single Type made by
the Lenders on a single date and as to which a single Interest Period
is in effect.
"Borrowing Date": any Business Day on which a Loan is to be
made at the request of the Borrower under this Agreement.
"Business Day": any day other than a Saturday, Sunday or other
day on which commercial banks in Philadelphia, Pennsylvania are
authorized or required by law to close; provided, however, that when
used in connection with a Eurodollar Loan, the term "Business Day"
shall also exclude any day on which banks are not open for dealings in
the London interbank market.
"Capital Expenditure": an expenditure for any fixed asset or
any improvements or additions thereto, including direct or indirect
acquisition of such asset, which expenditure is capitalized in
accordance with GAAP.
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"Capital Lease": at any time, a lease with respect to which
the lessee is required to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"Capital Lease Obligation": at any time, the amount of the
obligations under Capital Leases which would be shown at such time as a
liability on a consolidated balance sheet of the Borrower and its
consolidated Subsidiaries prepared in accordance with GAAP.
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person
(other than a corporation) and any and all warrants or options to
purchase any of the foregoing.
"Cash Equivalents":
(a) marketable direct obligations issued or
unconditionally guaranteed by the United States of America or
any agency thereof or guaranteed by the United States of
America or any agency thereof, in each case maturing within
one year from the date of acquisition thereof;
(b) marketable general obligations issued by any
state of the United States of America or any political
subdivision of any such state or any public instrumentality
thereof maturing within one year from the date of acquisition,
having one of the two highest ratings generally obtainable
from either S&P or Xxxxx'x;
(c) without limiting the provisions of paragraph (d)
of this definition, commercial paper maturing no more than one
year from the date of acquisition thereof and, at the time of
acquisition, having a rating of A-1 (or the equivalent) or
higher from S&P and P-1 (or the equivalent) or higher from
Xxxxx'x;
(d) commercial paper maturing no more than one year
from the date of acquisition thereof and issued by (i) the
holding company of any bank that has (A)
combined capital, surplus and undivided profits (less any
undivided losses) of not less than $250 million, (B) a Xxxxx
Bank Watch Rating of C or better and (C) commercial paper
having a rating of A-2 (or the equivalent) from S&P's or P-2
(or the equivalent) or
4
higher from Xxxxx'x;
(e) domestic and Eurodollar certificates of deposit,
time or demand deposits or bankers' acceptances maturing
within one year from the date of acquisition issued or
guaranteed by or placed with, and money market deposit
accounts issued or offered by:
(i) any Lender,
(ii) any other commercial bank organized under
the laws of the United States of America or any state
thereof or the District of Columbia having combined
capital, surplus and undivided profits (less any
undivided losses) of not less than $500 million,
(iii) any branch located in the United States of
America of a commercial bank organized under the laws
of the United Kingdom, Canada, France, Germany or
Japan having combined capital, surplus and undivided
profits (less any undivided losses) of not less than
$500 million, or
(iv) any domestic commercial bank the deposits of
which are guaranteed by the Federal Deposit Insurance
Corporation, provided that (A) the full amount of the
deposits of the Person making such Cash Equivalents
are so guaranteed and (B) the aggregate amount of all
Cash Equivalents under this clause (e)(iv) does not
exceed $500,000;
(f) fully collateralized repurchase agreements with a
term of not more than 30 days for underlying securities of the
type described in paragraphs (a) and (b) of this definition,
entered into with any institution meeting the qualifications
specified in clause (d) or subclauses (i) through (iii) of
clause (e) of this definition; and
(g) debt securities and equity warrants purchased
by the Borrower on or prior to September 1, 1998
; provided, that, in each case, such obligations are payable
in Dollars.
5
"Change of Control": an event or series of events by which (i)
any "person" or "group" (as such terms are defined in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder) is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under such
Exchange Act, except that a Person shall be deemed to have "beneficial
ownership" of all shares that any such Person has the right to acquire
without condition, other than passage of time, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of more than 20% of the total voting power of the then
outstanding Voting Stock of the Borrower or, in the case of the
Xxxxxxxx Fund, more than 30% of the total voting power of the then
outstanding Voting Stock of the Borrower, or (ii) from and after the
date hereof, individuals who on the date hereof constitute the Board of
Directors of the Borrower (together with any new directors whose
election by such Board of Directors or whose nomination for election by
the shareholders of the Borrower was approved by a vote of 66-2/3% of
the directors then still in office who were either directors on the
date hereof or whose election or nomination for election was previously
so approved) cease for any reason to constitute a majority of the Board
of Directors of the Borrower then in office.
"Closing Date": the date on which the Lenders make
their initial Loans.
"Code": the Internal Revenue Code of 1986, as amended
from time to time.
"Commercial Letter of Credit": as defined in
subsection 2.4(b)(i)(B).
"Commitment": as to any Lender, the obligation of such Lender
to make Loans and to issue and/or acquire participating interests in
Letters of Credit hereunder in an aggregate principal and/or face
amount at any one time outstanding not to exceed the amount set forth
opposite such Lender's name on Schedule I hereto, or the applicable
Assignment and Acceptance, as the case may be, as such
6
amount may be changed from time to time in accordance with the
provisions of this Agreement.
"Commitment Fee": as defined in subsection 3.1(a).
"Commitment Percentage": as to any Lender at any time, the
percentage which such Lender's Commitment then constitutes of the
aggregate Commitments at such time (or, at any time after the
Commitments shall have expired or terminated, the percentage which the
amount of such Lender's Exposure constitutes of the aggregate amount of
the Exposure of all Lenders at such time).
"Commitment Period": the period from and including the date
hereof to but not including the Termination Date, or such earlier date
on which the Commitments shall have terminated as provided herein.
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Borrower within
the meaning of Section 4001 of ERISA or is part of a group which
includes the Borrower and which is treated as a single employer under
Section 414(b), (c), (m) or (o) of the Code.
"Compliance Certificate": means a Certificate substantially in
the form of Exhibit B delivered by the Borrower pursuant to subsection
6.2(a).
"Consolidated Interest Expense": for any fiscal period, the
amount of cash interest expense incurred by the Borrower and its
Subsidiaries for such period (including, in any event, (a) the interest
component of payments in respect of Capital Leases and (b) after giving
effect to any agreements of the nature described in clause (i) of the
definition of Indebtedness)determined on a consolidated basis in
accordance with GAAP.
"Consolidated Net Income": for any fiscal period, the net
income (or loss) after income taxes of the Borrower and its
Subsidiaries for such period determined on a consolidated basis in
accordance with GAAP.
"Consolidated Net Worth": as of the date of determination, all
items which in conformity with GAAP would be included under
shareholders' equity on a consolidated balance sheet of the Borrower
and its Subsidiaries at such
7
date.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or any provision of any agreement,
instrument or other undertaking to which such Person is a party or by
which it or any of its property is bound.
"Default": any of the events specified in Section 8, whether
or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition precedent therein set forth, has been
satisfied.
"Distribution": in respect of any Person (a) dividends or
other distributions on Capital Stock of such Person (except
distributions in common stock of such Person;) (b) the redemption or
acquisition for value of such Capital Stock or of warrants, rights or
other options to purchase such Capital Stock (except when solely in
exchange for common stock of such Person); and (c) any payment on
account of, or the setting apart of any assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance, retirement or
other acquisition of any share of any class of Capital Stock of such
Person or any warrants or options to purchase any such Capital Stock.
"Dollars" and "$": dollars in lawful currency of the
United States of America.
"Domestic Subsidiary": any Subsidiary of the Borrower
this is organized under the laws of the United States of
America or any state thereof.
"Environmental Laws": any and all foreign, Federal, state,
local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees or binding requirements of any Governmental
Authority, or binding Requirement of Law regulating, relating to or
imposing liability or standards of conduct concerning protection of the
environment, as now or may at any time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurodollar Loan": any Loan bearing interest at a rate
determined by reference to the Euro-Rate.
"Euro-Rate": with respect to any Eurodollar Loan for any
Interest Period, the interest rate per annum determined by the Agent by
dividing (the resulting quotient rounded
8
upwards, if necessary, to the nearest 1/100th of 1% per annum) (i) the
rate of interest determined by the Agent in accordance with its usual
procedures (which determination shall be conclusive absent manifest
error) to be the average of the London interbank offered rates for
U.S. Dollars quoted by the British Bankers' Association as set forth
on Dow Xxxxx Markets Service (formerly known as Telerate) (or
appropriate successor or, if British Banker's Association or its
successor ceases to provide such quotes, a comparable replacement
determined by the Agent) display page 3750 (or such other display page
on the Dow Xxxxx Markets Service system as may replace display page
3750) two (2) Business Days prior to the first day of such Interest
Period for an amount comparable to the amount of such Eurodollar Loan
and having a borrowing date and a maturity comparable to such Interest
Period by (ii) a number equal to 1.00 minus the Euro-Rate Reserve
Percentage. The Euro-Rate may also be expressed by the following
formula:
Average of London interbank offered rates quoted by BBA as shown
on Dow Xxxxx Markets Service display page 3750 or appropriate
successor
Euro-Rate = ----------------------------------------------------------------
1.00 - Euro-Rate Reserve Percentage
"Euro-Rate Reserve Percentage": the maximum effective
percentage in effect on such day as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for
determining the reserve requirements (including, without limitation,
supplemental, marginal and emergency reserve requirements) with respect
to eurocurrency funding (currently referred to as "Eurocurrency
liabilities").
"Exposure": as to any Lender at any date, an amount equal to
the sum of (a) the aggregate principal amount of Loans made by such
Lender then outstanding and (b) the L/C Obligations of such Lender then
outstanding.
"Event of Default": any of the events specified in Section 8,
provided that any requirement for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.
"Extensions of Credit": the collective reference to Loans made
and Letters of Credit issued under this Agreement.
9
"Federal Funds Effective Rate": for any day, the weighted
average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds
brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for
the day of such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by it.
"Fee Letter Agreement": the letter agreement between the
Borrower and the Agent dated August 14, 1998, in which the Borrower
agrees, among other things, to pay the fees provided in such letter, as
the same may be amended, supplemented or otherwise modified from time
to time.
"Foreign Subsidiary": any Subsidiary of the Borrower
that is not a Domestic Subsidiary.
"GAAP": generally accepted accounting principles in the United
States of America as in effect from time to time. Notwithstanding the
foregoing, if either the Borrower or the Required Lenders determine
that a change in GAAP from that in effect on the date hereof has
altered the treatment of certain financial data to its detriment under
this Agreement, such party may seek of the other a renegotiation of any
financial covenant or other provision affected thereby. If the Borrower
and the Required Lenders cannot agree on renegotiated covenants, then,
for the purposes of this Agreement (other than Section 6.1(a)), GAAP
will refer to generally accepted accounting principles on the date just
prior to the date on which the change that gave rise to the
renegotiation occurred.
"Governmental Authority": any nation or government, any state
or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guarantee": a Guarantee executed and delivered by a
Subsidiary of the Borrower in favor of the Agent and the Lenders
pursuant to which such Subsidiary shall guarantee the repayment of the
Loans and the L/C Obligations, substantially in the form of Exhibit C
hereto, as the same may be amended, supplemented or otherwise modified
from time to time.
"Guarantee Obligation": means, as to any Person, any
10
direct or indirect liability of that Person, whether or not
contingent, with or without recourse, with respect to any
Indebtedness, lease, dividend, letter of credit or other obligation
(the "primary obligation") of another Person (the "primary obligor"),
including any obligations of that Person (a) to purchase, repurchase
or otherwise acquire such primary obligation or any security therefor,
(b) to advance or provide funds for the payment or discharge of any
such primary obligation, or to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth
or solvency or any balance sheet item, level of income or financial
condition of the primary obligor, (c) to purchase property, securities
or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make
payment of such primary obligation, or (d) otherwise to assure or hold
harmless the holder of any such primary obligation against loss in
respect thereof. The amount of any Guarantee Obligation shall be
deemed equal to the stated or determinable amount of the primary
obligation in respect of which such Guarantee Obligation is made or,
if not stated or if indeterminable, the maximum reasonably anticipated
liability in respect thereof.
"Guarantor": a Subsidiary of the Borrower which
executes and delivers a Guarantee.
"Indebtedness": of any Person at any date:
(a) all indebtedness of such Person for borrowed
money;
(b) all obligations of such Person issued, undertaken
or assumed as the deferred purchase price of property or
services (other than current trade liabilities incurred in the
ordinary course of business and payable in accordance with
customary practices);
(c) any other indebtedness which is evidenced by
a note, bond, debenture or similar instrument;
(d) all Capital Lease Obligations of such Person;
(e) all obligations of such Person in respect of
outstanding letters of credit, acceptances and similar
obligations created for the account of such Person;
(f) all indebtedness created or arising under any
conditional sale or other title retention agreement or
incurred as a financing, in either case with respect to
property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such
property);
11
(g) Indebtedness referred to in clauses (a) through
(f) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien on any property (including accounts
and contract rights) owned by such Person even though such
Person has not assumed or otherwise become liable for the
payment thereof;
(h) Guarantee Obligations of such Person in respect
of obligations of the kind referred to in clauses (a) through
(g) above; and
(i) for purposes of subsection 8.1(e) only, net
liabilities of such Person under interest rate cap agreements,
interest rate swap agreements, foreign currency exchange
agreements, netting agreements and other hedging agreements or
arrangements (calculated on a basis satisfactory to the Agent
and in accordance with accepted practice).
The Indebtedness of any person shall include any Indebtedness of any
partnership in which such Person is a general partner.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": has the meaning ascribed
thereto in subsection 4.15.
"Interest Coverage Ratio": as at the last day of any fiscal
quarter of the Borrower, the ratio of (a) OCF for the two consecutive
fiscal quarters of the Borrower ending on such date to (b) Consolidated
Interest Expense for the two consecutive fiscal quarters of the
Borrower ending on such date; provided that, the Interest Coverage
Ratio at December 31, 1998 shall be equal to the ratio of (x) OCF for
the fiscal quarter ending on such date to (y) Consolidated Interest
Expense for the fiscal quarter ending on such date.
"Interest Payment Date": (a) as to any Base Rate Loan, the
last day of each March, June, September and December while such Loan is
outstanding, (b) as to any Eurodollar Loan having an Interest Period of
three months or less, the last day of such Interest Period, and (c) as
to any Eurodollar Loan having an Interest Period longer than three
months, the day which is (i) three months after the first
12
day of such Interest Period and (ii) the last day of such Interest
Period.
"Interest Period": with respect to any Eurodollar
Loan:
(a) initially the period commencing on the borrowing
or conversion date, as the case may be, with respect to such
Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower in its notice of
borrowing or notice of conversion, given with respect thereto;
and
(b) thereafter, each period commencing on the last day of
the next preceding Interest Period applicable to such
Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower by irrevocable notice
to the Agent not less than three Business Days prior to the
last day of the then current Interest Period with respect
thereto;
provided that, the foregoing provisions relating to Interest
Periods are subject to the following:
(i) if any Interest Period would end on a day other
than a Business Day, such Interest Period shall be extended to
the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which
case such Interest Period shall end on the next preceding
Business Day;
(ii) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last
Business Day of a calendar month;
(iii) an Interest Period that otherwise would extend
beyond the Termination Date shall end on the Termination Date;
and
(iv) the Borrower shall select Interest Periods so as
not to require a payment or prepayment of any Eurodollar Loan
during an Interest Period for such Loan.
"Issuing Bank": PNC, or such other Lender as
designated by the Borrower and approved by the Required
Lenders to issue Letters of Credit hereunder.
13
"L/C Coverage Requirement": with respect to each
Letter of Credit at any time, 100% of the maximum amount
available to be drawn thereunder at such time (determined
without regard to whether any conditions to drawing could be
met at such time).
"L/C Obligations": at any time, an amount equal to the sum of
(a) 100% of the maximum amount available to be drawn under all Letters
of Credit outstanding at such time (determined without regard to
whether any conditions to drawing could be met at such time) and (b)
the aggregate amount of drawings under Letters of Credit which have not
then been reimbursed pursuant to subsection 2.8(a).
"L/C Participant": in respect of each Letter of Credit, each
Lender (other than the Issuing Bank) in its capacity as the holder of a
participating interest in such Letter of Credit.
"Lending Office": means, as to any Lender, the office or
offices of such Lender specified as its "Lending Office" or "Domestic
Lending Office", as the case may be, on Schedule I or the Applicable
Assignment and Acceptance, as the case may be, or such other office or
offices as such Lender may from time to time notify the Borrower and
the Agent.
"Letter of Credit": as defined in subsection 2.4(a).
"Leverage Ratio": as at the last day of any fiscal quarter of
the Borrower, the ratio of (a) Total Debt on such date to (b) OCF for
the two consecutive fiscal quarters of the Borrower ending on such date
multiplied by two; provided that, the Leverage Ratio at December 31,
1998 shall be equal to the ratio of (x) Total Debt on such date to (y)
OCF for the fiscal quarter of the Borrower ending on such date
multiplied by four.
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or
other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title
retention agreement and any Capital Lease having substantially the same
economic effect as any of the foregoing).
"Loan Documents": this Agreement, the Notes, the
Applications and the Guarantees.
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"Loan Parties": the collective reference to the
Borrower and the Guarantors.
"Loans": the meaning ascribed thereto in subsection
2.1.
"Material Adverse Effect": a material adverse effect on (a)
the business, operations, property or condition (financial or
otherwise) of the Borrower and the other Loan Parties taken as a whole,
(b) the ability of the Borrower and the other Loan Parties to perform
their obligations under this Agreement or any other Loan Document or
(c) the validity or enforceability of this Agreement or any of the
other Loan Documents or the rights or remedies of the Agent or the
Lenders hereunder or thereunder; provided that, any write-off by the
Borrower of up to $1,400,000 in connection with transactions involving
Amnex, Inc. as described in the Borrower's Form 10Q for the fiscal
quarter ending June 30, 1998 shall not constitute a Material Adverse
Effect.
"Material Subsidiary": as of any date, any Subsidiary of the
Borrower that (a) has assets with a fair market value of $5,000,000 or
more as of the last day of the most recently ended fiscal quarter of
the Borrower or (b) has revenues for the four-quarter period most
recently ended for which financial statements have been delivered to
the Banks (or annualized revenues for such period in the case of any
Person that has not been a Subsidiary of the Borrower for such full
four-quarter period) equal to 5% or more of the aggregate revenues of
the Borrower and its Subsidiaries for such four-quarter period.
"Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products or any hazardous or toxic substances, materials or wastes,
defined or regulated as such in or under any Environmental Law,
including, without limitation, asbestos, polychlorinated biphenyls, and
ureaformaldehyde insulation.
"Xxxxx'x": Xxxxx'x Investors Services, Inc.
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Proceeds": with respect to any Asset Sale, the amount
equal to (i) the aggregate amount received in cash (including any cash
received by way of deferred payment pursuant to a note receivable,
other non-cash consideration
15
or otherwise, but only as and when such cash is so received) in
connection with such sale or other disposition minus (ii) the sum of
(A) the principal amount of any Indebtedness which is secured by the
asset that is the subject of such Asset Sale (other than Indebtedness
assumed by the purchaser of such asset) and which is required to be,
and is, repaid in connection with such Asset Sale or other disposition
thereof (other than Indebtedness hereunder) and (B) the reasonable
fees, commissions, income taxes and other out-of-pocket expenses
incurred by the Borrower or such Subsidiary in connection with such
Asset Sale other than to the Borrower or any Affiliate thereof.
"Note": as defined in subsection 2.2, as the same may be
amended, supplemented or otherwise modified from time to time.
"Notice of Borrowing": a notice in substantially the
form as Exhibit D.
"OCF": for any fiscal period, Consolidated Net Income of the
Borrower and its Subsidiaries for such fiscal period plus depreciation,
amortization, and other non-cash charges, in each case to the extent
deducted from earnings in determining such Consolidated Net Income plus
Consolidated Interest Expense and income tax expense, in each case to
the extent deducted from earnings in determining such Consolidated Net
Income minus the amount of non-cash credits included in determining
such Consolidated Net Income, all of the above to be determined in
accordance with GAAP on a consolidated basis; provided that, in the
above calculations there also shall be excluded from Consolidated Net
Income (a) any addition for non-operating gains during such period
(including, without limitation, extraordinary or unusual gains, gains
from discontinuance of operations or gains arising from the sale of
capital assets) and (b) any subtraction for non-operating losses during
such period (including, without limitation, extraordinary or unusual
losses, losses from the discontinuance of operations or losses arising
from the sale of capital assets).
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"PNC": PNC Bank, National Association.
"Person": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or
other entity of whatever nature.
16
"Plan": at a particular time, any employee benefit plan which
is covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"Prime Rate": the rate of interest per annum publicly
announced from time to time by PNC as its "prime rate" in effect at its
principal office in Philadelphia, Pennsylvania; each change in the
Prime Rate shall be effective on the date such change is publicly
announced as effective.
"Properties": the collective reference to the
facilities and properties owned, leased or operated by the
Borrower or any of its Subsidiaries.
"Purchasing Lender": as defined in subsection 10.6(b).
"Register": as defined in subsection 10.6(d).
"Regulation U": Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect, and all official
rulings and interpretations thereunder or thereof.
"Regulation X": Regulation X of the Board of Governors of the
Federal Reserve System as from time to time in effect, and all official
rulings and interpretations thereunder or thereof.
"Reimbursement Obligation": in respect of each Letter of
Credit, the obligation of the Borrower to reimburse the Issuing Bank
for all drawings made thereunder in accordance with subsection 2.8(a)
and the Application related to such Letter of Credit for amounts drawn
under such Letter of Credit.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in
Section 403(c)(1), (2), (4), (5), (6), (10) and (13) of
ERISA.
"Required Lenders": at any time, Lenders the Commitment
Percentages of which at such time aggregate at
17
least 662/3%, but in no event less than two Lenders so long as there
shall be at least two Lenders hereunder.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case binding upon such Person or any of its property
or to which such Person or any of its property is subject.
"Responsible Officer": with respect to any Loan Party, the
chief executive officer, president or chief financial officer of such
Loan Party.
"S&P": Standard & Poor's Rating Services.
"Security": "security" as defined in Section 2(1) of
the Securities Act of 1933, as amended.
"Single Employer Plan": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Standby Letter of Credit": as defined in subsection
2.4(b)(i)(A).
"Subsidiary": as to any Person, a corporation, partnership,
limited liability company, business trust or other entity of which
shares of stock or other ownership interests having ordinary voting
power (other than stock or such other ownership interests having such
power only be reason of the happening of a contingency) to elect a
majority of the board of directors or other managers of such
corporation, partnership, limited liability company, business trust or
other entity are at the time owned, or the management of which is
otherwise controlled, directly or indirectly through one or more
intermediaries, or both, by such Person. Unless otherwise qualified,
all references to a "Subsidiary" or to "Subsidiaries" in this Agreement
shall refer to a Subsidiary or Subsidiaries of the Borrower.
"TASG": AT&T Corp, which includes any division or
service thereof referred to as the "Transaction Access
Services Group".
"TASG Acquisition": the acquisition of certain assets
of TASG pursuant to the TASG Acquisition Agreements.
"TASG Acquisition Agreements": that certain Asset Purchase
Agreement, dated as of September 10, 1998, between
18
the Borrower and TASG, and the other documents and agreements entered
into by the Borrower and TASG or its Affiliates in connection
therewith.
"Taxes": as defined in subsection 3.10(a).
"Termination Date": September 9, 2001, or any anniversary of
such date to which the Termination Date shall have been extended
pursuant to subsection 3.5(e) hereof.
"Total Debt": at any date, without duplication, the aggregate
of all Indebtedness of the Borrower and its Subsidiaries, determined on
a consolidated basis.
"Tranche": Eurodollar Loans whose Interest Periods begin on
the same date and end on the same later date (whether or not such Loans
originally were made on the same day).
"Type": when used in respect of any Loan, shall refer to the
Rate by reference to which interest on such Loan is determined. For
purposes hereof, "Rate" shall include the Euro-Rate and the Base Rate.
"Uniform Customs": the Uniform Customs and Practice
for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500, as the same may be
amended, supplemented or otherwise modified from time to
time.
"Voting Stock": Capital Stock of any class or classes of a
Person the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the directors or other
managers of such Person.
1.2 Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in the other Loan Documents or any certificate or other
document made or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to the Borrower and its Subsidiaries not defined in
subsection 1.1 and accounting terms partly defined in subsection 1.1, to the
extent not defined, shall have the respective meanings given to them under GAAP.
19
(c) The words "hereof", "herein" and "hereunder" and words
of similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(d) The meanings given to terms defined in this Agreement
shall be equally applicable to both the singular and plural forms of such terms.
SECTION 2. LOANS AND LETTERS OF CREDIT
2.1 Commitments. (a) Subject to the terms and conditions
hereof, each Lender severally agrees to make revolving credit loans in Dollars
(the "Loans") to the Borrower from time to time during the Commitment Period in
an aggregate principal amount at any one time outstanding which, when added to
such Lender's Commitment Percentage of the then outstanding L/C Obligations,
does not exceed the amount of such Lender's Commitment; provided that, no Loan
shall be made if, after giving effect to the making of such Loan and the
simultaneous application of the proceeds thereof, the aggregate amount of the
Exposure at such time would exceed the aggregate amount of the Commitments at
such time. The Commitments may be terminated or reduced from time to time
pursuant to subsection 3.5. Within the foregoing limits, the Borrower may during
the Commitment Period borrow, repay and reborrow under the Commitments, subject
to and in accordance with the terms and limitations hereof.
(b) The Loans may from time to time be (i) Eurodollar
Loans, (ii) Base Rate Loans or (iii) a combination thereof, as determined by the
Borrower and notified to the Agent in accordance with subsections 2.3 and 3.14;
provided that, no Loan shall be made as a Eurodollar Loan after the date that is
one month prior to the Termination Date.
(c) The failure of any Lender to make any Loan shall not in
itself relieve any other Lender of its obligation to lend hereunder (it being
understood, however, that no Lender shall be responsible for the failure of any
other Lender to make any Loan required to be made by such other Lender). Each
Loan shall be made in accordance with the procedures set forth in subsection
2.3.
2.2 Notes. The Loans made by each Lender shall be evidenced by
a promissory note of the Borrower, substantially in the form of Exhibit A, with
appropriate insertions as to payee, date and principal amount (a "Note"),
payable to the order of
20
such Lender and in a principal amount equal to the amount of the initial
Commitment of such Lender. Each Lender is hereby authorized to record the date,
Type and amount of each Loan made by such Lender, each continuation thereof,
each conversion of all or a portion thereof to another Type, the date and amount
of each payment or prepayment of principal thereof and, in the case of
Eurodollar Loans, the length of each Interest Period with respect thereto, on
the schedule annexed to and constituting a part of its Note, and any such
recordation shall constitute prima facie evidence of the accuracy of the
information so recorded, provided that the failure of any Lender to make such
recordation (or any error in such recordation) shall not affect the obligations
of the Borrower hereunder or under such Note. Each Note (a) shall be dated the
Closing Date and (b) be stated to mature on the Termination Date.
2.3 Procedure for Loans. (a) The Borrower may borrow under the
Commitments during the Commitment Period on any Business Day. The Borrower shall
give the Agent irrevocable notice (which notice must be received by the Agent
prior to 10:00 A.M., Philadelphia time, three Business Days prior to the
requested Borrowing Date, if all or any part of the requested Loans are to be
initially Eurodollar Loans, or prior to 12:00 noon, Philadelphia time, one
Business Day prior to the requested Borrowing Date if all of the requested Loans
are to be initially Base Rate Loans), specifying in the Notice of Borrowing (i)
the amount to be borrowed, (ii) the requested Borrowing Date, (iii) whether the
borrowing is to be of Eurodollar Loans, Base Rate Loans or a combination thereof
and (iv) if the borrowing is to be entirely or partly of Eurodollar Loans, the
amount of such Loan(s) and the length of the initial Interest Period(s)
therefor. Each borrowing under the Commitments shall be in an amount equal to
$5,000,000 or increments of $1,000,000 thereafter (or, if the aggregate
Available Commitments at such time are less than $5,000,000, such lesser
amount).
Upon receipt of a Notice of Borrowing from the Borrower, the
Agent shall promptly notify each Lender thereof. Each Lender will make the
amount of its pro rata share of each borrowing (based on its Commitment
Percentage at that time) available to the Agent for the account of the Borrower
at the office of the Agent specified in subsection 10.2 prior to 12:00 Noon,
Philadelphia time, on the Borrowing Date requested by the Borrower in funds
immediately available to the Agent. Such borrowing will then be made available
to the Borrower by the Agent crediting the account of the Borrower on the books
of such office with the aggregate of the amounts made available to the Agent by
the Lenders and in like funds as received by the Agent.
21
Unless the Agent shall have received notice from a Lender
prior to the date of any borrowing of Loans that such Lender will not make
available to the Agent such Lender's pro rata portion of such borrowing, the
Agent may assume that such Lender has made such portion available to the Agent
on the date of such borrowing in accordance with this subsection and the Agent
may, in reliance upon such assumption, make available to the Borrower on such
date a corresponding amount. If and to the extent that such Lender shall not
have made such portion available to the Agent, such Lender and the Borrower
(without prejudice to the Borrower's rights against such Lender) severally agree
to repay to the Agent forthwith on demand such corresponding amount together
with interest thereon, for each day from the date such amount is made available
to the Borrower until the date such amount is repaid to the Agent at (i) in the
case of the Borrower, the interest rate applicable at the time to the Loans
comprising such borrowing and (ii) in the case of such Lender, the Federal Funds
Effective Rate, provided, that, if such Lender shall not pay such amount within
three Business Days of such Borrowing Date, the interest rate on such overdue
amount shall, at the expiration of such three-Business Day period, be the rate
per annum applicable to Base Rate Loans. If such Lender shall repay to the Agent
such corresponding amount, such amount shall constitute such Lender's Loan as
part of such borrowing for purposes of this Agreement.
(b) If in a Notice of Borrowing no election as to the
Type of Loan is specified, then the requested Loan shall be a Base Rate Loan. If
a Eurodollar Loan is requested but no Interest Period with respect to such Loan
is specified in any such notice, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
2.4 L/C Commitment. (a) Subject to the terms and conditions
hereof, the Issuing Bank, in reliance on the agreements of the other Lenders set
forth in subsection 2.7(a), agrees to issue letters of credit ("Letters of
Credit") in Dollars for the account of the Borrower on any Business Day during
the Commitment Period in such form as may be approved from time to time by the
Issuing Bank; provided, that no Letter of Credit shall be issued if, after
giving effect thereto (i) the aggregate amount of the Exposure at such time
would exceed the aggregate amount of the Commitments at such time or (ii) the
aggregate amount of the L/C Obligations at such time would exceed $10,000,000.
(b) Each Letter of Credit shall;
(i) be denominated in Dollars and shall be
(A) a standby letter of credit (a "Standby Letter of
22
Credit"), or (B) a commercial letter of credit issued in respect of
the purchase of goods or services (a "Commercial Letter of Credit") by
the Borrower or any Subsidiary in the ordinary course of business; and
(ii) expire no later than the earlier of (A)
one year (in the case of Standby Letters of Credit) or 180 days (in the
case of Commercial Letters of Credit) after its date of issuance and
(B) 5 Business Days prior to the Termination Date.
(c) Each Letter of Credit shall be subject to the
Uniform Customs and, to the extent not inconsistent therewith, the laws of the
Commonwealth of Pennsylvania.
(d) The Issuing Bank shall not at any time be
obligated to issue any Letter of Credit hereunder if such issuance would
conflict with, or cause the Issuing Bank or any L/C Participant to exceed any
limits imposed by, any applicable Requirement of Law.
(e) Notwithstanding the provisions of this subsection
2.4, the Lenders and the Borrower hereby agree that the Issuing Bank may issue
upon the Borrower's request, one or more Letter(s) of Credit which by its or
their terms may be extended for additional periods of up to one year each
provided that (i) the initial expiration date (or any subsequent expiration
date) of each such Letter of Credit is not later than 5 Business Days prior the
Termination Date, and (ii) renewal of such Letters of Credit, at the Issuing
Bank's discretion, shall be available upon written request from the Borrower to
the Issuing Bank at least 30 days (or such other time period as agreed by the
Borrower and the Agent) before the date upon which notice of renewal is
otherwise required.
2.5 Procedure for Issuance of Letters of Credit. The Borrower
may from time to time request that the Issuing Bank issue a Letter of Credit by
delivering to the Issuing Bank at its office for notices specified herein an
Application therefor, completed to the satisfaction of the Issuing Bank, and
such other certificates, documents and other papers and information as the
Issuing Bank may reasonably request. Upon receipt by the Issuing Bank of any
Application, the Issuing Bank will process such Application and the
certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and shall
promptly issue the Letter of Credit requested thereby (but in no event shall the
Issuing Bank be required to issue any Letter of Credit earlier than (a) with
respect to Standby Letters of Credit, three (3) Business Days, and (b) with
respect to Commercial Letters of Credit, one
23
Business Day, after its receipt of the Application therefor and all such other
certificates, documents and other papers and information relating thereto) by
issuing the original of such Letter of Credit to the beneficiary thereof or as
otherwise may be agreed by the Issuing Bank and the Borrower.
2.6 Fees, Commissions and Other Charges. (a) The Borrower
shall pay to the Agent, for the account of the Lenders (including the Issuing
Bank) pro rata according to their respective Commitment Percentages, a letter of
credit commission with respect to each Letter of Credit, computed at a rate
equal to the then Applicable Margin for Eurodollar Loans on the daily average
undrawn face amount of such Letter of Credit (computed on the basis of the
actual number of days such Letter of Credit is outstanding in a year of 360
days). Such commissions shall be payable in arrears on the last Business Day of
each March, June, September and December to occur after the date of issuance of
each Letter of Credit, and on the Termination Date or such earlier date as the
Commitments are terminated, and shall be nonrefundable. The Borrower shall also
pay to the Agent, for the account of the Issuing Bank, in respect of each Letter
of Credit issued by the Issuing Bank a fronting fee for the period from and
including the date of issuance of such Letter of Credit to and including the
date of termination of such Letter of Credit computed at the rate of .125% per
annum on the daily average undrawn face amount of such Letter of Credit
(computed on the basis of the actual number of days such Letter of Credit is
outstanding in a year of 360 days). The fees described in the preceding sentence
shall be due and payable quarterly in arrears on the last Business Day of each
March, June, September and December of each year and on the Termination Date or
such earlier date as the Commitments are terminated and shall be nonrefundable.
(b) In addition to the foregoing fees and
commissions, the Borrower shall pay or reimburse the Issuing Bank for such
normal and customary costs and expenses as are incurred or charged by the
Issuing Bank in issuing, effecting payment under, amending or otherwise
administering any Letter of Credit.
(c) The Agent shall, promptly following its receipt
thereof, distribute to the Issuing Bank and the Lenders all fees and commissions
received by the Agent for their respective accounts pursuant to this subsection.
2.7 L/C Participations. (a) The Issuing Bank irrevocably
agrees to grant and hereby grants to each L/C Participant, and, to induce the
Issuing Bank to issue Letters of Credit hereunder, each L/C Participant
irrevocably agrees to accept and purchase and hereby accepts and purchases from
the
24
Issuing Bank, on the terms and conditions hereinafter stated, for such L/C
Participant's own account and risk, an undivided interest equal to such L/C
Participant's Commitment Percentage in the Issuing Bank's obligations and rights
under each Letter of Credit issued by the Issuing Bank hereunder and the amount
of each draft paid by the Issuing Bank thereunder. Each L/C Participant
unconditionally and irrevocably agrees with the Issuing Bank that, if a draft is
paid under any Letter of Credit issued by the Issuing Bank for which the Issuing
Bank is not reimbursed in full by the Borrower in accordance with the terms of
this Agreement, such L/C Participant shall pay to the Issuing Bank upon demand
at the Issuing Bank's address for notices specified herein an amount equal to
such L/C Participant's Commitment Percentage of the amount of such draft or any
part thereof, which is not so reimbursed. Any action taken or omitted by the
Issuing Bank under or in connection with a Letter of Credit, if taken or omitted
in the absence of gross negligence or willful misconduct, shall not create for
the Issuing Bank any resulting liability to any Lender.
(b) If any amount required to be paid by any L/C
Participant to the Issuing Bank pursuant to subsection 2.7(a) in respect of any
unreimbursed portion of any payment made by the Issuing Bank under any Letter of
Credit is not paid to the Issuing Bank on the date such payment is due from such
L/C Participant, such L/C Participant shall pay to the Issuing Bank on demand an
amount equal to the product of (i) such amount, times (ii) the daily average
Federal Funds Effective Rate, as quoted by the Issuing Bank, during the period
from and including the date such payment is required to the date on which such
payment is immediately available to the Issuing Bank, times (iii) a fraction the
numerator of which is the number of days that elapse during such period and the
denominator of which is 360. A certificate of the Issuing Bank submitted to any
L/C Participant with respect to any amounts owing under this subsection shall be
conclusive in the absence of manifest error.
(c) Whenever, at any time after the Issuing Bank has
made payment under any Letter of Credit and has received from any L/C
Participant its pro rata share of such payment in accordance with subsection
2.7(a), the Issuing Bank receives any payment related to such Letter of Credit
(whether directly from the Borrower or otherwise, including by way of set-off or
proceeds of collateral applied thereto by the Issuing Bank), or any payment of
interest on account thereof, the Issuing Bank will distribute to such L/C
Participant its pro rata share thereof; provided, however, that in the event
that any such payment received by the Issuing Bank shall be required to be
returned by the Issuing Bank, such L/C Participant shall return to the
25
Issuing Bank the portion thereof previously distributed by the Issuing Bank to
it.
2.8 Reimbursement Obligation of the Borrower. (a) The Borrower
agrees to reimburse the Issuing Bank in respect of a Letter of Credit on each
date on which a draft presented under such Letter of Credit is paid by the
Issuing Bank for the amount of (i) such draft so paid and (ii) any taxes, fees,
charges or other costs or expenses incurred by the Issuing Bank in connection
with such payment. Each such payment shall be made to the Issuing Bank at its
office listed in subsection 10.2 in U.S. Dollars and in immediately available
funds.
(b) Interest shall be payable on any and all amounts
remaining unpaid by the Borrower under this subsection from the date such
amounts become payable (whether at stated maturity, by acceleration or
otherwise) until payment in full at the per annum rate of the Base Rate plus
2.25% and shall be payable on demand by the Issuing Bank.
2.9 Obligations Absolute. (a) The obligations of the Borrower
under subsections 2.4 through 2.11 shall be absolute and unconditional under any
and all circumstances and irrespective of any set-off, counterclaim or defense
to payment which the Borrower or any Affiliate thereof may have or have had
against the Issuing Bank or any beneficiary of a Letter of Credit or any other
Person.
(b) The Borrower agrees with the Issuing Bank that
the Issuing Bank shall not be responsible for, and the Borrower's Reimbursement
Obligations under subsection 2.8(a) shall not be affected by, among other things
(i) the validity or genuineness of documents or of any endorsements thereon,
even though such documents shall in fact prove to be invalid, fraudulent or
forged, provided, that reliance upon such documents by the Issuing Bank shall
not have constituted gross negligence or willful misconduct of the Issuing Bank
or (ii) any dispute between or among the Borrower or any Affiliate thereof and
any beneficiary of any Letter of Credit or any other party to which such Letter
of Credit may be transferred or (iii) any claims whatsoever of the Borrower or
any Affiliate thereof against any beneficiary of such Letter of Credit or any
such transferee.
(c) The Issuing Bank shall not be liable for any
error, omission, interruption or delay in transmission, dispatch or delivery of
any message or advice, however transmitted, in connection with any Letter of
Credit, except for errors or omissions caused by the Issuing Bank's gross
negligence or willful misconduct.
26
(d) The Borrower agrees that any action taken or
omitted by the Issuing Bank under or in connection with any Letter of Credit or
the related drafts or documents, if done in the absence of gross negligence or
willful misconduct, shall be binding on the Borrower and shall not result in any
liability of the Issuing Bank to the Borrower.
2.10 Letter of Credit Payments. If any draft shall be
presented for payment to the Issuing Bank under any Letter of Credit, the
Issuing Bank shall promptly notify the Borrower of the date and amount thereof.
The responsibility of the Issuing Bank to the Borrower in connection with any
draft presented for payment under any Letter of Credit shall, in addition to any
payment obligation expressly provided for in such Letter of Credit and any other
obligation expressly imposed by the Uniform Customs, be limited to determining
that the documents (including each draft) delivered under such Letter of Credit
in connection with such presentment are in conformity with such Letter of
Credit.
2.11 Application. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Agreement, the provisions of this Agreement shall apply.
SECTION 3. GENERAL PROVISIONS APPLICABLE TO LOANS
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3.1 Fees. (a) The Borrower agrees to pay to the Agent for the
account of each Lender, on each March 31, June 30, September 30 and December 31
during the Commitment Period and on the date on which the Commitments shall be
terminated as provided herein, a commitment fee (the "Commitment Fee") at a rate
per annum equal to .20% on the average daily amount of the Available Commitments
during the preceding quarter (or shorter period commencing with the date hereof
or ending with the Termination Date or the date on which the Commitments shall
be terminated). All Commitment Fees shall be computed on the basis of the actual
number of days elapsed in a year of 360 days and shall be paid in Dollars. The
Commitment Fee due to each Lender shall commence to accrue on the date hereof,
and shall cease to accrue on the earlier of the Termination Date and the
termination of the Commitment of such Lender as provided herein. The Agent shall
distribute the Commitment Fees on the Available Commitments among the Lenders
pro rata in accordance with their respective Commitment Percentages.
(b) The foregoing fees shall be paid on the dates
due, in immediately available funds, to the Agent for distribution, if and as
appropriate, among the Lenders. Once paid, none of the foregoing fees shall be
refundable under any circumstances.
3.2 Interest Rates and Payment Dates. (a) Subject to the
provisions of subsection 3.3, each Base Rate Loan shall bear interest (computed
on the basis of the actual number of days elapsed over a year of 365 or 366
days, as the case may be) at a rate per annum equal to the Base Rate plus the
Applicable Margin.
(b) Subject to the provisions of subsection 3.3, each
Eurodollar Loan shall bear interest (computed on the basis of the actual number
of days elapsed over a year of 360 days) at a rate per annum equal to the
Euro-Rate for the Interest Period in effect for such Eurodollar Loan plus the
Applicable Margin.
(c) Interest on each Loan shall be payable in arrears
on each Interest Payment Date applicable to such Loan; provided that, interest
accruing on overdue amounts pursuant to subsection 3.3 shall be payable on
demand as provided in such subsection.
(d) As soon as practicable the Agent shall notify the
Borrower and the Lenders of (i) each determination of a Euro-Rate and (ii) the
effective date and the amount of each change in
28
the interest rate on a Eurodollar Loan or Base Rate Loan. Each determination of
an interest rate by the Agent pursuant to any provision of this Agreement
(including this subsection 3.2 and subsection 3.3) shall be conclusive and
binding on the Borrower and the Lenders in the absence of clearly demonstrable
error. At the request of the Borrower, the Agent shall deliver to the Borrower a
statement showing the quotations used by it in determining any interest rate
pursuant to subsections 3.2(a) through 3.2(c).
3.3 Default Interest. If the Borrower shall default in the
payment of the principal of or interest on any Loan or any other amount becoming
due hereunder, the Borrower shall on demand from time to time pay interest on
any overdue payment of principal (in lieu of the interest otherwise payable on
such principal under Section 3.2) and, to the extent permitted by law, on
overdue payments of interest and other amounts due hereunder up to the date of
actual payment (after as well as before judgment):
(a) in the case of overdue principal of a Loan, at a
rate determined by the Agent to be the lower of (i) 2% per annum above the rate
which would otherwise be payable on such Loan in accordance with the provisions
hereof or (ii) the maximum rate permitted under applicable law;
(b) in the case of any other amount payable hereunder
(whether for interest, fees or otherwise), at a rate equal to 2.25% per annum
above the Base Rate.
3.4 Inability to Determine Interest Rate. In the event, and on
each occasion, that prior to the first day of the commencement of any Interest
Period for a Eurodollar Loan, the Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that dollar
deposits in the principal amount of such Eurodollar Loan are not generally
available in the London interbank market, or that the rate at which such dollar
deposits are being offered will not adequately and fairly reflect the cost to
the Lenders of making or maintaining the principal amount of such Eurodollar
Loan during such Interest Period, or that reasonable means do not exist for
ascertaining the Euro-Rate, the Agent shall, as soon as practicable thereafter,
give written, telegraphic or telephonic notice of such determination to the
Borrower and the Lenders. After such notice shall have been given and until the
circumstances giving rise to such notice no longer exist, each request for a
Eurodollar Loan or for conversion to or maintenance of a Eurodollar Loan
pursuant to the terms of this Agreement shall be deemed to be a request for a
Base Rate Loan. Each determination by the Agent hereunder shall be conclusive
absent
29
error in calculation or other manifest error.
3.5 Termination, Reduction and Extension of Commitments. (a)
The Commitments shall be automatically terminated on the Termination Date,
whereupon the entire outstanding principal balance of the Loans, plus all
accrued and unpaid interest thereon, and any fees or other amounts owed under
the Loan Documents, shall become due and payable.
(b) Upon at least three Business Days' prior
irrevocable written (including telecopy) notice to the Agent, the Borrower may
at any time in whole permanently terminate, or from time to time in part
permanently reduce, the Commitments; provided, however, that (i) each partial
reduction of any Commitment shall be in a minimum principal amount of $5,000,000
or in whole multiples of $1,000,000 in excess thereof, and (ii) the Commitments
may not be reduced or terminated if, after giving effect thereto and to any
prepayments of the Loans made on the effective date thereof, the aggregate
amount of the Exposure at such time would exceed the aggregate amount of the
Commitments at such time.
(c) Any prepayment of the Loans pursuant to
subsection 3.7(a) shall permanently reduce the Commitments on a
dollar-for-dollar basis.
(d) Each reduction in the Commitments hereunder shall
be made ratably among the Lenders in accordance with their respective Commitment
Percentages. The Borrower shall pay to the Agent for the account of the Lenders
on the date of each termination or reduction of the Commitments, the Commitment
Fees on the amount of the Commitments so terminated or reduced accrued to the
date of such termination or reduction.
(e) During the period beginning sixty days prior to
the first and any subsequent anniversary of the Closing Date and ending on such
anniversary, the Borrower may deliver to the Agent (which shall promptly
transmit to each Lender) a notice requesting that the Commitments be extended to
the first anniversary of the Termination Date then in effect. Within 45 days
after its receipt of any such notice, each Lender shall notify the Agent of its
willingness or unwillingness so to extend its Commitment. Any Lender that shall
fail so to notify the Agent within such period shall be deemed to have declined
to extend its Commitment. If all of the Lenders agree to extend their
Commitments, the Agent shall so notify the Borrower and each Lender, whereupon
(i) the respective Commitments of the
30
Lenders shall without further act be extended to the first anniversary of the
Termination Date then in effect and (ii) the term "Termination Date" shall
thereafter mean such first anniversary. Any such extension shall be evidenced by
a written agreement among the Agent, the Lenders and the Borrower, such
agreement to be in form and substance acceptable to the Agent, the Lenders and
the Borrower.
3.6 Optional Prepayment of Loans. (a) The Borrower shall have
the right at any time and from time to time to prepay any Loan, in whole or in
part, without premium or penalty (but in any event subject to subsection 3.11),
upon prior written, telecopy or telephonic notice to the Agent in the case of
Base Rate Loans no later than 10:30 a.m., Philadelphia time, one Business Day
before any proposed prepayment, and in the case of Eurodollar Loans, no later
than 10:30 a.m., Philadelphia time, three Business Days before any such proposed
prepayment. In each case the notice shall specify the date and amount of each
such prepayment, whether the prepayment is of Eurodollar Loans or Base Rate
Loans or a combination thereof, and, if a combination thereof, the amount
allocable to each; provided, however, that each such partial prepayment shall be
in the principal amount of at least $5,000,000 or in whole multiples of
$1,000,000 in excess thereof.
(b) On the date of any termination or reduction of
the Commitments pursuant to subsection 3.5, the Borrower shall pay or prepay so
much of the Loans as shall be necessary in order that the sum of the aggregate
amount of the Exposure at such time would not exceed the aggregate amount of the
Commitments at such time as so reduced.
(c) Each notice of prepayment shall be irrevocable
and shall commit the Borrower to prepay the amount specified in such notice.
(d) Upon receipt of any notice of prepayment, the
Agent shall promptly notify each Lender thereof.
(e) Amounts prepaid pursuant to subsection 3.6(a) on
account of the Loans may be reborrowed, subject to the terms and conditions
hereof.
3.7 Mandatory Prepayments. (a) Simultaneously with any Asset
Sale, the Borrower shall pay (or cause to be paid) to the Agent an amount equal
to the Net Proceeds of such Asset Sale; provided that, if at the time of an
Asset Sale no Default or Event of Default exists, no payment should be required
pursuant to this clause (a) to the extent that the Borrower intends in good
faith to apply such Net Proceeds to the acquisition of
31
income producing related assets within six (6) months after the date of such
Asset Sale; provided further, that such Net Proceeds shall be paid to the Agent
at the end of such six-month period to the extent that the Borrower has not by
the end of such period utilized such Net Proceeds to purchase substitute income
producing related assets; provided, further, that, in each fiscal year of the
Borrower, the Borrower shall not be required (unless a Default or Event of
Default shall exist hereunder) to make any prepayments pursuant to this clause
(a) until the Net Proceeds from Assets Sales in such fiscal year otherwise
payable hereunder shall exceed $250,000, whereupon the amount of Net Proceeds
that must be applied to the Loans pursuant to this subsection shall equal 100%
of all Net Proceeds in such fiscal year other than those Net Proceeds not
payable hereunder pursuant to the first proviso to this sentence. Any payments
made to the Agent pursuant to this subsection 3.7(a) shall be applied by the
Agent to the principal amount of the Loans and shall reduce the aggregate
Commitments on a dollar-for-dollar basis. The Borrower shall give the Agent at
least one Business Day's prior written notice of each prepayment pursuant to
this subsection 3.7(a) setting forth the date and expected amount thereof.
(b) All prepayments under this subsection 3.7 shall,
to the extent possible, be applied first to any Base Rate Loans then outstanding
and the balance, if any, to Eurodollar Loans then outstanding, with payments
applied to Eurodollar Loans being applied in order of next maturing Interest
Periods. Any prepayment of Eurodollar Loans shall be subject to subsection 3.11.
3.8 Illegality. Notwithstanding any other provision herein, if
any change in any Requirement of Law or in the interpretation or application
thereof shall make it unlawful for any Lender to make or maintain Eurodollar
Loans as contemplated by this Agreement, (a) the commitment of such Lender
hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
refinance Base Rate Loans to Eurodollar Loans shall forthwith be cancelled and
(b) such Lender's Loans then outstanding as Eurodollar Loans, if any, shall be
converted automatically to Base Rate Loans on the respective last days of the
then current Interest Periods with respect to such Loans or within such earlier
period as required by law. If any such conversion of a Eurodollar Loan occurs on
a day which is not the last day of the then current Interest Period with respect
thereto, the Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to subsection 3.11.
3.9 Requirements of Law. (a) In the event that any change in
any Requirement of Law or in the interpretation, or application thereof or
compliance by any Lender with any request
32
or directive (whether or not having the force of law) from any central bank or
other Governmental Authority made subsequent to the date hereof:
(i) shall subject any Lender to any tax of
any kind whatsoever with respect to this Agreement, any Note, any
Letter of Credit, any Application, or any Eurodollar Loan made by it,
or change the basis of taxation of payments to such Lender in respect
thereof (except for taxes covered by subsection 3.10 and changes in the
rate of tax on the net income of such Lender);
(ii) shall impose, modify or hold applicable
any reserve, special deposit, compulsory loan or similar requirement
against assets held by, deposits or other liabilities in or for the
account of, advances, loans or other extensions of credit by, or any
other acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the interest rate on such
Eurodollar Loan, hereunder; or
(iii) shall impose on such Lender any other
condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit or maintaining any Commitment hereunder or to reduce any
amount receivable hereunder in respect thereof then, in any such case, the
Borrower shall as promptly as practicable pay such Lender, upon its demand, any
additional amounts necessary to compensate such Lender for such increased cost
or reduced amount receivable. If any Lender becomes entitled to claim any
additional amounts pursuant to this subsection, it shall as promptly as
practicable notify the Borrower, through the Agent, of the event by reason of
which it has become so entitled. A certificate as to any additional amounts
payable pursuant to this subsection submitted by such Lender, through the Agent,
to the Borrower shall be conclusive in the absence of clearly demonstrable
error. This covenant shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder.
(b) In the event that any Lender shall have
determined that any change in any Requirement of Law regarding capital adequacy
or in the interpretation or application thereof or compliance by such Lender or
any corporation controlling such
33
Lender with any request or directive regarding capital adequacy (whether or not
having the force of law) from any Governmental Authority made subsequent to the
date hereof does or shall have the effect of reducing the rate of return on such
Lender's or such corporation's capital as a consequence of its obligations
hereunder or under any Letter of Credit to a level below that which such Lender
or such corporation could have achieved but for such change or compliance
(taking into consideration such Lender's or such corporation's policies with
respect to capital adequacy) by an amount deemed by such Lender to be material,
then from time to time, the Borrower shall as promptly as practicable pay such
Lender, upon its demand, such additional amount or amounts as will compensate
such Lender for such reduction. If any Lender becomes entitled to claim any
additional amounts pursuant to this subsection, it shall as promptly as
practicable notify the Borrower, through the Agent, of the event by reason of
which it has become so entitled. A certificate as to any additional amounts
payable pursuant to this subsection submitted by such Lender, through the Agent,
to the Borrower shall be conclusive in the absence of clearly demonstrable
error. This covenant shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder.
(c) Each Lender agrees that it will use reasonable
efforts in order to avoid or to minimize, as the case may be, the payment by the
Borrower of any additional amount under subsections 3.9(a) or (b); provided,
however, that no Lender shall be obligated to incur any expense, cost or other
amount (other than insignificant incidental expenses or costs) in connection
with utilizing such reasonable efforts.
3.10 Taxes. (a) All payments made by the Borrower under this
Agreement and the Notes shall be made free and clear of, and without deduction
or withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority (excluding, in the case of the Agent and each Lender, net
income taxes and franchise or gross receipts taxes imposed on the Agent or such
Lender, as the case may be, as a result of a present or former connection
between the jurisdiction of the government or taxing authority imposing such tax
and the Agent or such Lender (excluding a connection arising solely from the
Agent or such Lender having executed, delivered or performed its obligations or
received a payment under, or enforced, this Agreement or the Notes)) (all such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions and
withholdings being hereinafter called "Taxes"). If any Taxes are required to be
withheld from any amounts payable to the Agent or any Lender hereunder or under
the Notes, the amounts so payable
34
to the Agent or such Lender shall be increased to the extent necessary to yield
to the Agent or such Lender (after payment of all Taxes) interest or any such
other amounts payable hereunder at the rates or in the amounts specified in this
Agreement and the Notes. Whenever any Taxes are payable by the Borrower, as
promptly as possible thereafter the Borrower shall send to the Agent for its own
account or for the account of such Lender, as the case may be, a certified copy
of an original official receipt received by the Borrower showing payment
thereof. If the Borrower fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the Agent the required receipts or other
required documentary evidence, the Borrower shall indemnify the Agent and the
Lenders for any incremental taxes, interest or penalties that may become payable
by the Agent or any Lender as a result of any such failure. The agreements in
this subsection shall survive the termination of this Agreement and the payment
of the Loans and all other amounts payable hereunder.
(b) Each Lender that is not incorporated under the
laws of the United States of America or a state thereof agrees that it will
deliver to the Borrower and the Agent (i) two duly completed copies of United
States Internal Revenue Service Form 1001 or 4224 or successor applicable form,
as the case may be, and (ii) an Internal Revenue Service Form W-8 or W-9 or
successor applicable form, or such other properly completed documentation
prescribed by applicable law, as will permit payments hereunder to be made
without withholding or at a reduced rate. Each such Lender also agrees to
deliver to the Borrower and the Agent two further copies of the said Form 1001
or 4224 and Form W-8 or W-9, or successor applicable forms or other manner of
certification, as the case may be, or such other properly completed
documentation prescribed by applicable law, as will permit payments hereunder to
be made without withholding or at a reduced rate, on or before the date that any
such form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form previously delivered by it to the
Borrower, and such extensions or renewals thereof as may reasonably be requested
by the Borrower or the Agent, unless in any such case an event (including,
without limitation, any change in treaty, law or regulation) has occurred prior
to the date on which any such delivery would otherwise be required which renders
all such forms inapplicable or which would prevent such Lender from duly
completing and delivering any such form with respect to it and such Lender so
advises the Borrower and the Agent. Each such Lender shall certify (i) in the
case of a Form 1001 or 4224, that it is entitled to receive payments under this
35
Agreement without deduction or withholding of any United States federal income
taxes and (ii) in the case of a Form W-8 or W-9, that it is entitled to an
exemption from United States backup withholding tax.
(c) Notwithstanding the foregoing subsections 3.10(a)
or 3.10(b), the Borrower shall not be required to pay any additional amounts to
any Lender in respect of United States withholding tax pursuant to such
subsections if (i) the obligation to pay such additional amounts would not have
arisen but for a failure by such Lender to comply with the requirements of
subsection 3.10(b) or (ii) such Lender shall not have furnished the Borrower
with such forms listed in subsection 3.10(b) and shall not have taken such other
steps as reasonably may be available to it under applicable tax laws and any
applicable tax treaty or convention to obtain an exemption from, or reduction
(to the lowest applicable rate) of, such United States withholding tax.
3.11 Indemnity. (a) The Borrower agrees to indemnify each
Lender and to hold each Lender harmless from any loss or expense which such
Lender may sustain or incur as a consequence of (i) default by the Borrower in
payment when due of the principal amount of or interest on any Eurodollar Loan,
(ii) default by the Borrower in making a borrowing of, conversion into or
continuation of Eurodollar Loans, after the Borrower has given a notice
requesting the same in accordance with the provisions of this Agreement, (iii)
default by the Borrower in making any prepayment after the Borrower has given a
notice thereof in accordance with the provisions of this Agreement or (iv) the
making of a prepayment (whether voluntary, mandatory, as a result of
acceleration or otherwise) of Eurodollar Loans on a day which is not the last
day of an Interest Period with respect thereto, including, without limitation,
any such loss or expense arising from the reemployment of funds obtained by it
or from fees payable to terminate the deposits from which such funds were
obtained. A certificate as to any amounts that a Lender is entitled to receive
under this subsection 3.11 submitted by such Lender, through the Agent, to the
Borrower shall be conclusive in the absence of clearly demonstrable error and
all such amounts shall be paid by the Borrower promptly upon demand by such
Lender. This covenant shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder.
(b) For the purpose of calculation of all amounts
payable to a Lender under this subsection, each Lender shall be deemed to have
actually funded its relevant Eurodollar Loan, through the purchase of a deposit
bearing interest at the Euro-Rate, in an amount equal to the amount of that
Eurodollar Loan,
36
and having a maturity comparable to the relevant Interest Period or due date;
provided, however, that each Lender may fund each of its Eurodollar Loans in any
manner it sees fit, and the foregoing assumptions shall be utilized only for the
calculation of amounts payable under this subsection. This covenant shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
3.12 Pro Rata Treatment of Loans, L/C's and Payments;
Commitment Fees. (a) Except as required under subsection 3.8, each borrowing of
Loans, each payment or prepayment of principal of any Loans, each payment of
interest on the Loans, each payment of Commitment Fees with respect to the
Commitments, and each reduction of the Commitments, shall be made pro rata among
the Lenders in accordance with their respective Commitment Percentages.
(b) Each Lender agrees that in computing such
Lender's portion of any borrowing to be made hereunder, the Agent may, in its
discretion, round each Lender's percentage of such borrowing to the next higher
or lower whole dollar amount.
(c) Unless the Agent shall have been notified in
writing by the Borrower prior to the date of any payment being made hereunder
that the Borrower will not make such payment to the Agent, the Agent may assume
that the Borrower will make such payment, and the Agent may, but shall not be
required to, in reliance upon such assumption, make available to the Lenders
their respective pro rata shares of the corresponding amount. If such payment is
not made to the Agent by the Borrower, the Agent shall be entitled to recover,
on demand, from each Lender to which any amount was made available pursuant to
the preceding sentence, the amount so made available with interest thereon from
the date that the Agent made such amount available to such Lender(s)at the rate
per annum equal to the daily average Federal Funds Effective Rate. Nothing
herein shall be deemed to limit the rights of the Agent or any Lender against
the Borrower.
3.13 Payments. (a) The Borrower shall make each payment
(including principal of or interest on any borrowing or any fees or other
amounts including Reimbursement Obligations) hereunder not later than 12:00
(noon), Philadelphia time, on the date when due in Dollars to the Agent at its
office set forth in subsection 10.2, in immediately available funds. Such
payments shall be made without set off or counterclaim of any kind. The Agent
shall distribute to the Lenders or the Issuing Bank any payments received by the
Agent on their behalf promptly upon receipt in like funds as received.
(b) Whenever any payment (including principal of
37
or interest on any borrowing or any fees or other amounts) hereunder (other than
payments on Eurodollar Loans) shall become due, or otherwise would occur, on a
day that is not a Business Day, such payment may be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of interest or fees, if applicable.
3.14 Conversion and Continuation Options. The Borrower shall
have the right at any time upon prior irrevocable notice to the Agent (i) not
later than 12:00 noon, Philadelphia time, one Business Day prior to conversion,
to convert any Eurodollar Loan to a Base Rate Loan, (ii) not later than 10:00
a.m., Philadelphia time, three Business Days prior to conversion or
continuation, to convert any Base Rate Loan into a Eurodollar Loan or to
continue any Eurodollar Loan as a Eurodollar Loan for any additional Interest
Period, (iii) not later than 10:00 a.m., Philadelphia time, three Business Days
prior to conversion, to convert the Interest Period with respect to any
Eurodollar Loan to another permissible Interest Period subject in each case to
the following:
(a) a Eurodollar Loan may not be converted at a time
other than the last day of the Interest Period applicable thereto;
(b) any portion of a Loan required to be repaid in
less than one month or maturing within one month of the Termination Date may not
be converted into or continued as a Eurodollar Loan;
(c) no Eurodollar Loan may be continued as such and
no Base Rate Loan may be converted to a Eurodollar Loan when any Default has
occurred and is continuing and the Agent or the Required Lenders have determined
that such a continuation is not appropriate;
(d) any portion of a Eurodollar Loan that cannot be
converted into or continued as a Eurodollar Loan by reason of paragraph 3.14(b)
or 3.14(c) automatically shall be converted at the end of the Interest Period in
effect for such Loan to a Base Rate Loan;
(e) on the last day of any Interest Period for
Eurodollar Loans, if the Borrower has failed to give notice of conversion or
continuation as described in this subsection or if such conversion or
continuation is not permitted pursuant to subsection 3.14(d), such Loans shall
be converted to Base Rate
38
Loans on the last day of such then expiring Interest Period;
(f) Each request by the Borrower to convert or
continue a Loan shall constitute a representation and warranty that no Default
shall have occurred and be continuing.
Accrued interest on a Loan (or portion thereof) being converted shall be paid by
the Borrower at the time of conversion.
3.15 Minimum Amounts of Tranches; Maximum Number of Tranches.
(a) All borrowings, conversions and continuation of Loans hereunder and all
selections of Interest Periods hereunder shall be in such amounts and be made
pursuant to such elections that, after giving effect thereto, the aggregate
principal amount of the Loans comprising each Tranche of Eurodollar Loans shall
be equal to $5,000,000 or a whole multiple of $1,000,000 in excess thereof.
(b) The Borrower shall not have outstanding at any one
time more than in the aggregate five Tranches of Eurodollar Loans.
3.16 Use of Proceeds. The proceeds of the Loans shall be used
by the Borrower for working capital and general corporate purposes (including
the TASG Acquisition and other acquisitions to the extent permitted hereunder).
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Agent and the Lenders to enter into this
Agreement and to make the Loans and to issue or participate in the Letters of
Credit, the Borrower hereby represents and warrants to the Agent and each Lender
that:
4.1 Financial Condition. The consolidated balance sheet of
the Borrower and its consolidated Subsidiaries as at December 31, 1997 and
the related consolidated statements of income and of cash flows for the
fiscal year ended on such date, copies of which have heretofore been
furnished to each Lender, present fairly the consolidated financial condition
of the Borrower and its consolidated Subsidiaries as at such date, and the
consolidated results of their operations and their consolidated cash flows
for the fiscal year then ended. The unaudited consolidated balance sheet of
the Borrower and its consolidated Subsidiaries as at June 30, 1998 and the
related unaudited consolidated statements of income and of cash flows for the
six-month period ended on such date, certified by a Responsible Officer of
the Borrower, copies of which have heretofore been furnished to each Lender,
present fairly the
39
consolidated financial condition of the Borrower and its consolidated
Subsidiaries as at such date, and the consolidated results of their
operations and their consolidated cash flows for the six-month period then
ended (subject to normal year-end audit adjustments). All such financial
statements, including the related schedules and notes thereto, have been
prepared in accordance with GAAP applied consistently throughout the periods
involved. Neither the Borrower nor any of its consolidated Subsidiaries had,
at the date of the most recent balance sheet referred to above, any material
Guarantee Obligation, liability for taxes, or any long-term lease or unusual
forward or long-term commitment, including, without limitation, any interest
rate or foreign currency swap or exchange transaction, which is required by
GAAP to be but is not reflected in the foregoing statements or in the notes
thereto.
4.2 No Change. Since December 31, 1997, there has been no
development or event nor prospective development or event which has had or could
reasonably be expected to have a Material Adverse Effect.
4.3 Corporate Existence; Compliance with Law. Each of the Loan
Parties and its Subsidiaries (a) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (b) has the
corporate power and authority, and the legal right, to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification, except to the extent that the failure to be so
qualified could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect and (d) is in compliance with all Requirements of Law except to
the extent that the failure to comply therewith could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
4.4 Corporate Power; Authorization; Enforceable Obligations.
Each of the Loan Parties has the corporate power, authority, and legal right, to
make, deliver and perform this Agreement and each other Loan Document to which
it is a party and, in the case of the Borrower, to borrow hereunder (including
through the issuance of Letters of Credit) and has taken all necessary corporate
action (a) in the case of the Borrower, to authorize the borrowings (including
the Letters of Credit) on the terms and conditions of this Agreement and each
other Loan
40
Document to which it is a party, and (b) in the case of each of the Loan
Parties, to authorize the execution, delivery and performance of this Agreement
and each other Loan Document to which it is a party. No consent or authorization
of, filing with or other act by or in respect of, any Governmental Authority or
any other Person (including stockholders and creditors of the Loan Parties) is
required in connection with the Extensions of Credit hereunder or with the
execution, delivery, performance, validity or enforceability of this Agreement
or any other Loan Document. This Agreement has been and each other Loan Document
to which it is a party will be, duly executed and delivered on behalf of such
Loan Party. This Agreement constitutes and each other Loan Document when
executed and delivered will constitute, a legal, valid and binding obligation of
each Loan Party party thereto enforceable against such Loan Parties in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
4.5 No Legal Bar. The execution, delivery and performance of
this Agreement, the Notes and the other Loan Documents by the Loan Parties, the
Extensions of Credit hereunder and the use of the proceeds thereof will not
violate any Requirement of Law or Contractual Obligation of any Loan Party or
any of its Subsidiaries and will not result in, or require, the creation or
imposition of any Lien on any properties or revenues of any Loan Party pursuant
to any such Requirement of Law or Contractual Obligation.
4.6 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Borrower, threatened against any Loan Party or any of
their respective Subsidiaries or against any of its or their respective
properties or revenues (a) with respect to this Agreement, the Notes, the other
Loan Documents or any of the transactions contemplated hereby, or (b) as to
which there is a reasonable likelihood of an adverse determination and which, if
adversely determined, could have a Material Adverse Effect.
4.7 No Default. Neither the Borrower, any other Loan Party nor
any of its or their Subsidiaries is in default under or with respect to any of
its Contractual Obligations in any respect which could have a Material Adverse
Effect. No Default or Event of Default has occurred and is continuing.
4.8 Taxes. Each of the Loan Parties has filed or caused to be
filed all tax returns which, to its knowledge, are
41
required to be filed and has paid all taxes shown to be due and payable on said
returns or on any assessments made against it or any of its property and all
other taxes, fees or other charges imposed on it or any of its property by any
Governmental Authority (other than any the amount or validity of which are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves, if any, in conformity with GAAP have been provided on
the books of the Borrower or its Subsidiaries, as the case may be); no tax Lien
has been filed against any of the Loan Parties or any of their Subsidiaries,
and, to the knowledge of each of the Loan Parties, no claim is being asserted,
with respect to any such tax, fee or other charges.
4.9 Federal Regulations. No part of the proceeds of any Loans
will be used for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation U or for any
purpose which violates the provisions of Regulation U or any other Regulations
of the Board of Governors of the Federal Reserve System. If requested by any
Lender or the Agent, the Borrower will furnish to the Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR Form
G-3 or FR Form U-l referred to in said Regulation U. No part of the proceeds of
the Loans hereunder will be used for any purpose which violates, or which is
inconsistent with, the provisions of Regulation X.
4.10 ERISA. (a) Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan and
each Plan has complied in all material respects with the applicable provisions
of ERISA and the Code. No termination of a Single Employer Plan has occurred and
no Lien in favor of the PBGC or a Plan has arisen during the five-year period
prior to the date as of which this representation is made or deemed made. No
other event or condition has occurred or exists with respect to any Plan that
could reasonably be expected individually or in the aggregate to have a Material
Adverse Effect.
(b) The present value of all accrued benefits under
each Single Employer Plan in which the Borrower or any Commonly Controlled
Entity is a participant (based on those assumptions used to fund the Plans) did
not, as of the last annual valuation date prior to the date on which this
representation is made or deemed made, exceed the value of the assets of such
Plan allocable to such accrued benefits by an amount in excess of five percent
(5%) of Consolidated Net Worth as of the end of the most recent fiscal year of
the Borrower for
42
which financial statements have been delivered to the Lenders pursuant to this
Agreement.
(c) Neither the Borrower nor any Commonly Controlled
Entity has had a complete or partial withdrawal from any Multiemployer Plan, and
neither the Borrower nor any Commonly Controlled Entity would become subject to
any liability under ERISA if the Borrower or any such Commonly Controlled Entity
were to withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made.
(d) No such Multiemployer Plan is in "reorganization"
or "insolvent," within the meaning of such terms as used in ERISA.
(e) The present value (determined using actuarial and
other assumptions which are reasonable in respect of the benefits provided and
the employees participating) of the liability of the Borrower and each Commonly
Controlled Entity for post retirement benefits to be provided to their current
and former employees under Plans which are welfare benefit plans (as defined in
Section 3(1) of ERISA) does not, in the aggregate, exceed the assets under all
such Plans allocable to such benefits by an amount in excess of five percent
(5%) of Consolidated Net Worth as of the end of the most recent fiscal year of
the Borrower for which financial statements have been delivered to the Lenders
pursuant to this Agreement.
4.11 Investment Company Act. None of the Loan Parties is an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
4.12 Purpose of Loans. The proceeds of the Loans shall be used
by the Borrower only for the purposes permitted by subsection 3.16
4.13 Environmental Matters. Except to the extent that all of
the following could not reasonably be expected to result in a liability to the
Borrower or any Subsidiary thereof in an aggregate amount in excess of
$1,000,000:
(a) The Properties do not contain, and have not
previously contained, in, on, or under, including, without limitation, the soil
and groundwater thereunder, any Materials of Environmental Concern in amounts or
concentrations that
43
constitute or constituted a violation of, or reasonably could give rise to
liability under Environmental Laws.
(b) The Properties and all operations and facilities
at the Properties are in compliance, and have in the last five years been in
compliance with all Environmental Laws, and there is no contamination at, under
or about the Properties or violation of any Environmental Law with respect to
the Properties or the business operated by any Loan Party or any Subsidiary
thereof which could interfere with the continued operation of any of the
Properties or impair the fair saleable value of any thereof. None of the Loan
Parties or any of their respective Subsidiaries have assumed any liability of
any Person under Environmental Laws.
(c) Neither the Borrower, any other Loan Party, nor
any of their Subsidiaries has received or is aware of any claim, notice of
violation, alleged violation, non-compliance, investigation or advisory action
or potential liability regarding environmental matters or compliance of
Environmental Law with regard to the Properties which has not been
satisfactorily resolved by the Borrower, such other Loan Party, or such
Subsidiary, nor is the Borrower nor any other Loan Party aware or have reason to
believe that any such action is being contemplated, considered or threatened.
(d) Materials of Environmental Concern have not been
generated, treated, stored, transported, disposed of, at, on, from or under any
of the Properties, nor have any Materials of Environmental Concern been
transferred from the Properties to any other location except in either case in
the ordinary course of business of the Loan Parties or any of their respective
Subsidiaries, in compliance with all Environmental Laws and such that it could
not reasonably be expected to give rise to liability under any applicable
Environmental Law.
(e) There are no governmental, administrative actions
or judicial proceedings pending or, to the best knowledge of the Borrower after
reasonable inquiry, contemplated or threatened under any Environmental Laws to
which the Borrower, any other Loan Party or any of their respective Subsidiaries
is or will be named as a party with respect to the Properties, nor are there any
consent decrees or other decrees, consent orders, administrative orders or other
orders, or other administrative or judicial requirements outstanding under any
Environmental Law with respect to any of the Properties.
(f) There has been no release or threat of release of
Materials of Environmental Concern at or from the Properties, or arising from or
related to the operation of the Borrower or any Subsidiary in connection with
the Properties or
44
otherwise in connection with the business operated by the Borrower or any
Subsidiary in violation of or in amounts or in a manner that could reasonably be
expected to give rise to liability under any Environmental Law.
(g) Each of the representations and warranties set
forth in paragraphs 4.13(a) through (g)is true and correct with respect to each
Property.
4.14 No Material Misstatements. No financial statement,
exhibit or schedule furnished by or on behalf of any Loan Party to the Agent or
any Lender in connection with the negotiation of this Agreement or any other
Loan Document contains any misstatement of fact, or omitted or omits to state
any fact necessary to make the statements therein, when read in the aggregate
with all other information so provided by the Loan Parties, not misleading under
the circumstances under which they were made or given, where such misstatement
or omission would be material to the interests of the Lenders with respect to
the performance of a Loan Party of its obligations hereunder or thereunder.
Prior to the date hereof, the Borrower has disclosed to the Lenders in writing
any and all facts which materially and adversely affect (to the extent the
Borrower can as of the date hereof reasonably foresee), the business, operations
or financial condition of the Borrower and its Subsidiaries taken as a whole,
and the ability of the Loan Parties to perform their obligations under this
Agreement and the other Loan Documents.
4.15 Intellectual Property. Each of the Loan Parties and each
of their respective Subsidiaries owns, or is licensed to use, all trademarks,
tradenames, copyrights, technology, know-how and processes necessary for the
conduct of its business as currently conducted (the "Intellectual Property")
except for those as to which the failure to own or license could not reasonably
be expected to have a Material Adverse Effect. No claim has been asserted and is
pending by any Person challenging or questioning the use of any such
Intellectual Property, nor does such Loan Party know of any valid basis for any
such claim. The use of such Intellectual Property by the Loan Parties and their
Subsidiaries does not infringe the rights of any Person, except for such claims
and infringements that, in the aggregate, do not have such a Material Adverse
Effect.
4.16 Subsidiaries. All of the Subsidiaries of the Borrower at
the date hereof are listed on Schedule 4.16 of this Agreement.
4.17 Public Utility Holding Company Act. No Loan
45
Party is subject to regulation as a "holding company", subject to regulation as
an "affiliate" of a "holding company", or subject to regulation as a "subsidiary
company" of a "holding company", in each case under the Public Utility Holding
Company Act of 1935, as amended.
4.18 Year 2000. Each of the Loan Parties and their
Subsidiaries have reviewed the areas within their businesses and operations
which could be adversely affected by, and have developed or are developing a
program to address on a timely basis, the risk that certain computer
applications, as well as embedded microchips in noncomputing devices, used by
the Loan Parties or their Subsidiaries (or any of their respective material
suppliers, customers or vendors) may be unable to recognize and perform properly
date-sensitive functions involving dates prior to and after December 31, 1999
(the "Year 2000 Problem"). The Year 2000 Problem is not reasonably expected to
result in any Material Adverse Effect.
4.19 Title to Properties. Each of the Loan Parties and its
Subsidiaries has good and marketable title to, or valid leasehold interests in,
all its material real property, except for minor defects in title that do not
interfere in any material respect with its ability to conduct its business as
presently conducted. All such material properties are free and clear of all
Liens, other than Liens permitted by subsection 7.2.
4.20 No Burdensome Restrictions. No Requirement of Law or
Contractual Obligation of any of the Loan Parties or any of their Subsidiaries
could reasonably be expected to have a Material Adverse Effect.
4.21 TASG Acquisition.
(a) Delivery. Complete and correct copies of the TASG
Acquisition Agreements have been provided to the Agent.
(b) Validity. The Borrower has the power and
authority under the laws of its jurisdiction of incorporation and under its
articles of incorporation and by-laws to enter into and perform the TASG
Acquisition Agreements; all actions (corporate or otherwise) necessary for the
execution and performance of the TASG Acquisition Agreements by the Borrower
have been taken; and the TASG Acquisition Agreements constitute the valid and
binding obligation of each party thereto, enforceable in accordance with their
respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
46
(c) No Violations. The making and performance of the
TASG Acquisition Agreements will not violate any provision of any law or
regulation, federal, state or local, including precedents of the jurisdiction of
incorporation of the Borrower, and will not violate any provisions of the
articles of incorporation and by-laws of the Borrower, or constitute a default
under any agreement by which the Borrower or its property may be bound.
(d) Immediately after the consummation of the TASG
Acquisition, the representations and warranties set forth in this Article IV
shall be true and correct in all material respects.
4.22 Solvency. Each of the Loan Parties is, and after receipt
and application of the first loan hereunder will be, solvent such that: (a) the
fair value of its assets (including without imitation the fair salable value of
the goodwill and other intangible property of such Loan Party) is greater than
the total amount of its liabilities, including without limitation, Guarantee
Obligations, (b) the present fair salable value of its assets (including without
limitation the fair salable value of the goodwill and other intangible property
of such Loan Party) is not less than the amount that will be required to pay the
probable liability on its debts as they become absolute and matured, and (c) it
is able to realize upon its assets and pay its debts and other liabilities and
commitments (including Guarantee Obligations) as they mature in the normal
course of business. Each Loan Party (a) does not intend to, and does not believe
that it will, incur debts or liabilities beyond its ability to pay as such debts
and liabilities mature, and (b) is not engaged in a business or transaction, or
about to engage in a business or transaction, for which its property would
constitute unreasonably small capital after giving due consideration to the
prevailing practice and industry in which it is engaged.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Initial Extension of Credit. The agreement
of each Lender to make the initial Extension of Credit requested to be made by
it is subject to the satisfaction, immediately prior to or concurrently with the
making of such Extension of Credit on the Closing Date, of the following
conditions precedent:
47
(a) Credit Agreement. The Agent shall have received
(i) this Agreement, executed and delivered by the Borrower, each Lender party
thereto and the Agent and (ii) for the account of each Lender, a Note executed
by the Borrower.
(b) Other Loan Documents. The Agent shall have
received a Guarantee executed and delivered by TNS Investments, Inc. and TNS
DataLink, Inc.
(c) Corporate Proceedings. The Agent shall have
received a certificate of the Secretary or an Assistant Secretary of each Loan
Party dated as of the Closing Date certifying (A) that attached thereto is a
true and complete copy of the resolutions, in form and substance satisfactory to
the Agent, of the Board of Directors of such Loan Party authorizing (i) the
execution, delivery and performance of this Agreement and the other Loan
Documents to which it is a party, and (ii) the Extensions of Credit contemplated
hereunder, and that such resolutions attached thereto have not been amended,
modified, revoked or rescinded and (B) as to the incumbency and specimen
signature of each officer executing any Loan Document on behalf of a Loan Party;
and such certificate and the attachments thereto shall be in form and substance
satisfactory to the Agent.
(d) Corporate Documents. The Agent shall have
received true and complete copies of the certificate or articles of
incorporation and by-laws of each Loan Party, certified as of the Closing Date
as complete and correct copies thereof by the Secretary or an Assistant
Secretary of such Loan Party.
(e) Fees. The Agent shall have received the fees to
be received on the Closing Date referred to in the Fee Letter Agreement.
(f) Legal Opinions. The Agent shall have received the
executed legal opinion of Arent Fox Xxxxxxx Xxxxxxx & Xxxx, PLLC, counsel to the
Loan Parties, substantially in the form of Exhibit E.
(g) Good Standing. The Agent shall have received
certificates of good standing, subsistence and/or status dated a recent date
from the Secretary of State or appropriate taxing or other authorities in the
state or province of incorporation of each Loan Party.
(h) UCC and Other Searches. The Agent shall have
received the results of (i) Uniform Commercial Code and/or similar searches made
with respect to the Loan Parties in the states or provinces in which their chief
executive offices are
48
located and such other locations selected by the Agent and (ii) such tax and
judgment lien searches as the Agent shall request, and each of the foregoing
searches shall disclose no Liens on any assets, except for Liens permitted under
subsection 7.2 or, if unpermitted Liens are disclosed, the Agent shall have
received satisfactory evidence of the release of such Liens.
(i) TASG Acquisition. The TASG Acquisition shall be
consummated substantially on the terms set forth in the TASG Acquisition
Agreements. The total cost to the Borrower and its Subsidiaries to consummate
such transaction shall not exceed $66,000,000, and the Agent shall be satisfied
with all material aspects of the TASG Acquisition.
(j) Insurance. The Agent shall have received
Certificates of Insurance with respect to each Loan Party's fire, casualty,
liability and other insurance covering its respective property and business.
5.2 Conditions to Each Extension of Credit. The agreement of
each Lender to make any Extension of Credit requested to be made by it on any
date (including, without limitation, its initial Extension of Credit) is subject
to the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by each Loan Party herein or which are
contained in any certificate, document or financial or other statement furnished
at any time under or in connection herewith or therewith, shall be true and
correct in all material respects on and as of such date as if made on and as of
such date.
(b) No Default. No Default or Event of Default shall
have occurred and be continuing on such date or after giving effect to the
Extension of Credit requested to be made on such date.
(c) Additional Matters. All corporate and other
proceedings, and all documents, instruments and other legal matters in
connection with the transactions contemplated by this Agreement and the other
Loan Documents shall be reasonably satisfactory in form and substance to the
Agent, and the Agent shall have received such other documents and legal opinion
in respect of any aspect or consequence of the transactions contemplated hereby
or thereby as it shall reasonably request.
49
Each request by the Borrower for an Extension of Credit hereunder shall
constitute a representation and warranty by the Borrower as of the date of such
Extension of Credit that the conditions contained in this subsection 5.2 have
been satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments
remain in effect, any Note remains outstanding and unpaid, any Letter of Credit
remains outstanding or any other amount is owing to any Lender or the Agent
hereunder, the Borrower shall and shall cause each of its Subsidiaries to:
6.1 Financial Statements. Furnish to each Lender:
(a) as soon as available, but in any event not later
than 90 days after the close of each fiscal year of the Borrower, a copy of the
annual audit report for such year for the Borrower and its consolidated
Subsidiaries, including therein a consolidated balance sheet of the Borrower and
its consolidated Subsidiaries as at the end of such fiscal year, and related
consolidated statements of income and retained earnings and changes in cash
flows of the Borrower and its consolidated Subsidiaries for such fiscal year,
all in reasonable detail, prepared in accordance with GAAP applied on a basis
consistently maintained throughout the period involved and with the prior year
with such changes thereon as shall be approved by the Borrower's independent
certified public accountants, such financial statements to be certified by
Xxxxxx Xxxxxxxx LLP or other nationally recognized independent certified public
accountants selected by the Borrower and reasonably acceptable to the Agent,
without a "going concern" or like qualification or exception or qualification
arising out of the scope of the audit; and
(b) as soon as available, but in any event not later
than 45 days after the end of each of the first three quarterly periods of each
fiscal year of the Borrower, unaudited consolidated and consolidating cash flows
of the Borrower and its consolidated Subsidiaries, including therein (i) a
consolidated and consolidating balance sheet of the Borrower and its
consolidated Subsidiaries as at the end of such fiscal quarter, (ii) the related
consolidated and consolidating statements of income and retained earnings of the
Borrower and its consolidated Subsidiaries, and (iii) the related consolidated
and consolidating statement of changes in financial position of the Borrower and
its consolidated Subsidiaries all for the period from the beginning of such
fiscal quarter to the end of such fiscal quarter and the portion of the fiscal
year through the end of such quarter, setting forth in each case in comparative
form the corresponding figures for the like period of the preceding
50
fiscal year; all in reasonable detail, prepared in accordance with GAAP applied
on a basis consistently maintained throughout the period involved and with prior
periods (except as approved by a Responsible Officer and disclosed therein) and
accompanied by a certificate of a Responsible Officer stating that the financial
statements fairly present the financial condition of the Borrower and its
consolidated Subsidiaries as of the date and for the periods covered thereby
(subject to normal year-end audit adjustments); provided, however, that delivery
of the Borrower's Quarterly Report on Form 10Q for such quarterly period as
filed with the Securities and Exchange Commission shall be deemed to satisfy
this subsection 6.1(b).
6.2 Certificates; Other Information. Furnish to each
Lender:
(a) concurrently with the delivery of the financial
statements referred to in subsection 6.1(a) and (b), a Compliance Certificate
executed by the chief financial officer or Treasurer of the Borrower;
(b) within five days after the same are sent, copies
of all financial statements and reports which the Borrower sent to its
stockholders and within five days after the same are filed, copies of all
financial statements and reports which any Loan Party may make to, or file with,
the Securities and Exchange Commission or any successor of analogous
Governmental Authority;
(c) by December 15 of each year, an annual budget of
the Borrower and its Subsidiaries for the following fiscal year containing
reasonable detail; and
(d) promptly, such additional financial and other
information as the Agent or any Lender may from time to time reasonably request,
including but not limited to projections and tax returns.
6.3 Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its material obligations of whatever nature, except where the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of the Borrower or its Subsidiaries, as the case may be.
6.4 Conduct of Business and Maintenance of Existence.
51
Except as otherwise permitted in subsection 7.4, continue to engage in business
of the same general type as now conducted by it and, preserve, renew and keep in
full force and effect its corporate existence and, except to the extent that the
failure to do so could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect, take all reasonable action to maintain all rights,
privileges and franchises necessary or desirable in the normal conduct of its
business; comply with all Contractual Obligations and Requirements of Law except
to the extent that failure to comply therewith could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
6.5 Maintenance of Property; Insurance. Keep all property
useful and necessary in its business in good working order and condition,
subject to ordinary wear and tear; maintain with financially sound and reputable
insurance companies insurance on all its property in at least such amounts and
against at least such risks (but including in any event public liability,
product liability and business interruption) as are usually insured against in
the same general area by companies engaged in the same or a similar business;
and furnish to each Lender, upon written request, full information as to the
insurance carried.
6.6 Inspection of Property, Books and Records. Keep proper
books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; and upon reasonable
notice permit representatives of any Lender to visit and inspect any of its
properties and examine and make abstracts from any of its books and records
during normal business hours and as often as may reasonably be desired and to
discuss the business, operations, properties and financial and other condition
of the Borrower and its Subsidiaries with officers and employees of the Borrower
and its Subsidiaries and with its independent certified public accountants.
6.7 Notices. Promptly (but in any event, except as provided in
clause (d) below, within seven (7) days) give notice to the Agent and each
Lender of:
(a) the occurrence of any Default or Event of
Default;
(b) any (i) default or event of default under any
Contractual Obligation of the Borrower or any of its Subsidiaries or (ii)
litigation, investigation or proceeding which may exist at any time between the
Borrower or any of its Subsidiaries and any Governmental Authority, which in
either case, if not cured or
52
if adversely determined, as the case may be, could have a Material Adverse
Effect;
(c) any litigation or proceeding affecting the
Borrower or any of its Subsidiaries in which the amount involved is $1,000,000
or more and not covered by insurance as reasonably determined by the Borrower's
corporate counsel or in which injunctive or similar relief is sought;
(d) the following events, as soon as possible and in
any event within 30 days after the Borrower knows or has reason to know thereof:
(i) the occurrence or expected occurrence of any Reportable Event with respect
to any Plan, a failure to make any required contribution to a Plan, any Lien in
favor of PBGC or a Plan or any withdrawal from, or the termination,
Reorganization or Insolvency of any Multiemployer Plan or (ii) the institution
of proceedings or the taking of any other action by the PBGC or any Loan Party
or any Commonly Controlled Entity or any Multiemployer Plan with respect to the
withdrawal from, or the terminating, Reorganization or Insolvency of, any Plan
or (iii) assessment of liability under the Coal Industry Retiree Health Benefit
Act of 1992; and
(e) an event which has had or could reasonably be
expected to have a Material Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth in reasonable detail the occurrence referred
to therein and stating what action the Borrower proposes to take with respect
thereto.
6.8 Environmental Laws. (a) Comply with, and require
compliance by all tenants and all subtenants, if any, with, all Environmental
Laws and obtain and comply with and maintain, and require that all tenants and
subtenants obtain and comply with and maintain, any and all licenses, approvals,
registrations or permits required by Environmental Laws, except to the extent
that failure to so comply or obtain or maintain such documents could not
reasonably be expected to have a Material Adverse Effect;
(b) Comply in all material respects with all lawful
and binding orders and directives of all Governmental Authorities respecting
Environmental Laws; and
(c) Defend, indemnify and hold harmless the Agent and
the Lenders, and their respective employees, agents, officers, directors,
successors and assigns from and against any
53
claims, demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature known or unknown, contingent or otherwise,
arising out of, or in any way relating to any violation of or noncompliance with
or liability under any Environmental Laws, or any orders, requirements or
demands of Governmental Authorities related thereto which in each case relate to
or arise in connection with any Loan Party, any Property or any activities
relating to any other property or business of a Loan Party or the enforcement of
any rights provided herein or in the other Loan Documents, including, without
limitation, reasonable attorneys' and consultants' fees, response costs,
investigation and laboratory fees, court costs and litigation expenses, except
to the extent that any of the foregoing arise out of the gross negligence or
willful misconduct of any of the foregoing enumerated parties. This indemnity
shall continue in full force and effect regardless of the termination of this
Agreement and the payment of the Loans.
6.9 Subsequent Credit Terms. Notify the Agent in writing prior
to entering into any new credit agreement or facility or any amendment or
modification of any existing credit arrangement or facility, pursuant to which a
Loan Party agrees to financial, affirmative and/or negative covenants which are
less favorable in any material respect to a Loan Party than those contained in
this Agreement. Effective upon a Loan Party's entry into any such agreement or
facility, amendment or modification, this Agreement shall unless otherwise
agreed by the Required Lenders, be deemed to be automatically and immediately
amended by adding any covenants, terms and/or conditions of such other agreement
(until such agreement is terminated and all amounts owing thereunder are
repaid); provided, however, that the foregoing shall not be applicable to or be
deemed to affect any provision of this Agreement which is less favorable to such
Loan Party or Loan Parties than any such agreement, facility, amendment or
modification. The Borrower hereby agrees promptly to execute and deliver any and
all such documents and instruments and to take all such further actions as the
Agent may, in its sole discretion, deem necessary or appropriate to effectuate
the provisions of this subsection 6.9.
6.10 New Subsidiaries. Notify the Agent as soon as practicable
after acquiring or creating a new Subsidiary. If requested by the Agent, the
Borrower shall cause any Subsidiary of the Borrower to execute and deliver to
the Agent a Guarantee pursuant to which such Subsidiary shall guarantee the
obligations of the Borrower hereunder and under the other Loan Documents. The
Borrower shall execute and deliver and cause any Guarantor to execute and
deliver to the Agent such further documents and take such actions as the Agent
may reasonably request. Notwithstanding the foregoing, no Subsidiary of the
Borrower
54
shall be required to execute and deliver a Guarantee if such Subsidiary is a
Foreign Subsidiary and, in the reasonable opinion of the Borrower and its
outside counsel, the execution of such Guarantee would result in adverse tax
consequences to the Borrower and/or its Subsidiaries.
6.11 Management Changes. Notify the Agent in writing within
thirty (30) days after any change of its executive officers.
6.12 Subordination of Intercompany Loans, Other Loans and
Advances to the Borrower. Cause any intercompany indebtedness, loans or advances
owed by a Loan Party to any Subsidiary of the Borrower that is not a Loan Party
(other than indebtedness, loans or advances incurred in the ordinary course of
business) to be subordinated on terms satisfactory to the Agent to the Loans,
the L/C Obligations and other obligations owed to the Agent and the Lenders
hereunder or under the other Loan Documents.
SECTION 7. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as any Commitment
remains in effect, any Note remains outstanding and unpaid, any Letter of Credit
remains outstanding or any other amount is owing to any Lender or Agent
hereunder, the Borrower shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly:
7.1 Financial Condition Covenants.
(a) Leverage Ratio. At the last day of each fiscal
quarter of the Borrower commencing with the fiscal quarter ending December 31,
1998, permit the Leverage Ratio to be greater than 3.00 to 1.00.
(b) Interest Coverage Ratio. At the last day of each
fiscal quarter of the Borrower commencing with the fiscal quarter ending
December 31, 1998, permit the Interest Coverage Ratio to be less than 2.00 to
1.00.
(c) Minimum OCF. Permit the product of OCF of the
Borrower and its consolidated Subsidiaries for the quarter ending December 31,
1998 multiplied by four, to be less than $33,725,000; permit for any period of
two consecutive fiscal quarters of the Borrower ending on or after March 31,
1998, the product of OCF of the Borrower and its consolidated Subsidiaries for
such two-quarter period multiplied by two, to be less than $33,725,000.
55
(d) Capital Expenditures. Permit for any period set
forth below Capital Expenditures of the Borrower and its Subsidiaries taken as a
whole incurred in such period to be greater than the number set opposite such
period:
Maximum Permitted
Period Capital Expenditures
------ --------------------
Closing - 12/31/98 $10,000,000
Fiscal year 1999 $15,000,000
Fiscal year 2000 $20,000,000
Each Fiscal Year Thereafter $20,000,000
7.2 Limitation on Liens. Create, incur, assume or suffer to
exist any Lien upon any of its property, assets or revenues, whether now owned
or hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being
contested in good faith by appropriate proceedings, provided that adequate
reserves with respect thereto are maintained on the books of the Borrower or its
Subsidiaries, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics',
materialmen's, repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 30 days or which are
being contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security legislation;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(e) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of business which, in the
aggregate, do not materially detract from the value of the property subject
thereto or materially interfere with the ordinary conduct of the business of the
Borrower and its Subsidiaries taken as a whole; and
56
(f) Liens (including Liens in existence on the
Closing Date) securing Indebtedness of the Borrower and its Subsidiaries
permitted by subsection 7.3(b) incurred to finance the acquisition (including
through Capital Leases) of fixed or capital assets, provided that (i) such Liens
shall be created substantially simultaneously with the acquisition of such fixed
or capital assets or such Liens shall have existed on such assets prior to their
acquisition by the Borrower or its Subsidiary thereof and were not created in
anticipation of the acquisition, (ii) such Liens do not at any time encumber any
property other than the property financed by such Indebtedness or additions
thereto, (iii) the Liens are not modified to secure other Indebtedness and the
amount of Indebtedness secured thereby is not increased and (iv) the principal
amount of Indebtedness secured by any such Lien did not at the time of the
acquisition of such assets exceed 100% of the original purchase price of such
property.
7.3 Limitation of Indebtedness. Create, incur, assume or
suffer to exist any Indebtedness except:
(a) Indebtedness in respect of the Loans, the Notes,
the Letters of Credit and other obligations of the Loan Parties under this
Agreement and the other Loan Documents;
(b) Indebtedness (including Indebtedness existing on
the Closing Date) of the Borrower and any of its Subsidiaries in an aggregate
principal amount not exceeding, as to the Borrower and its Subsidiaries taken
together, $5,000,000 at any one time outstanding;
(c) Indebtedness of the Borrower or any Subsidiary
thereof to the Borrower or any Subsidiary thereof; provided that any
Indebtedness of any Subsidiary that is not a Loan Party to any Loan Party shall
be subject to the limitations set forth in the proviso to subsection 7.9(g); and
(d) guarantees made in the ordinary course of
business by the Borrower or any Subsidiary thereof of the Indebtedness of the
Borrower or any Subsidiary thereof; provided that, any guaranty by any Loan
Party of the Indebtedness of any Subsidiary that is not a Loan Party shall be
subject to the limitations set forth in the proviso to subsection 7.9(g).
7.4 Limitations on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, except that:
57
(a) any Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower(provided that the Borrower shall be the
continuing or surviving corporation) or with or into any other Subsidiary
(provided that if any such transaction shall be between a Subsidiary which is
not a Loan Party and a Subsidiary which is a Loan Party, either the Loan Party
shall be the continuing or surviving corporation or the surviving entity shall
simultaneously with the consummation of such transaction become a Loan Party);
(b) any Subsidiary of the Borrower may sell, lease,
transfer or otherwise dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to any Loan Party; and
(c) subject to the limitations contained in
subsection 7.5, (i) any Subsidiary of the Borrower other than a Material
Subsidiary may sell, lease, transfer or otherwise dispose of all or
substantially all of its assets upon voluntary liquidation or otherwise) or (ii)
the Borrower or any Subsidiary may sell or transfer the Capital Stock of any
Subsidiary thereof, other than a Material Subsidiary whereupon, in the case of
such a sale or transfer of all of the Capital Stock of a Subsidiary, such
Subsidiary shall be released of its obligations hereunder and under the other
Loan Documents without the need for any further action on the part of any party
hereto;
provided that, immediately after any such transaction referred to in paragraphs
(a), (b) and (c) above and after giving effect thereto, the Borrower is in
compliance with this Agreement and no Default or Event of Default shall have
occurred and be continuing or result from such transaction.
7.5 Limitation on Sale of Assets. Convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables and leasehold interests), whether
now owned or hereafter acquired, except:
(a) obsolete or worn out property disposed of in the
ordinary course of business;
(b) the sale of inventory in the ordinary course of
business;
(c) the sale or discount without recourse of accounts
receivable arising in the ordinary course of business in
58
connection with the compromise or collection in the ordinary course of business
of such accounts receivable;
(d) as permitted by Section 7.4(a) or (b); and
(e) in addition to the above subsections 7.5(a)
through 7.5(d) inclusive, any such conveyances, sales, leases, assignments,
transfers or other disposals, the aggregate amount of which for the Borrower and
its Subsidiaries for any fiscal year of the Borrower does not exceed $1,000,000;
provided that (i) such conveyance, sale, lease, assignment, transfer or other
disposition is for cash consideration which the officers or Board of Directors
of the Borrower or its Subsidiary, as the case may be, deems to be fair and
reasonable and (ii) the Net Proceeds are applied to the Loans as provided in and
to the extent required by subsection 3.7.
7.6 Limitation on Distributions. Declare or pay any
Distribution (whether in cash or property or obligations of the Borrower or any
Subsidiary thereof) in respect of the Borrower or any Subsidiary thereof, except
that (a) any Subsidiary may declare and pay dividends to its owners on a pro
rata basis based on their respective ownership interests and (b) the Borrower
may repurchase shares of its common stock in an amount not to exceed the
aggregate (i) in any twelve-month period, $3,000,000 or (ii) from and after the
Closing Date, $7,500,000.
7.7 Transactions with Affiliates. Except as expressly
permitted in this Agreement, directly or indirectly enter into any transaction
or arrangement whatsoever (including without limitations any purchase, sale,
lease or exchange of property or the rendering of any service) or make any
payment to or otherwise deal with any Affiliate, except, as to all of the
foregoing in the ordinary course of and pursuant to the reasonable requirements
of the Borrower's and its Subsidiaries' business and upon fair and reasonable
terms no less favorable to the Borrower or its Subsidiary, as the case may be,
than would be obtained in a comparable arm's length transaction with a Person
not an Affiliate.
7.8 Sale and Leaseback. Enter into any arrangement with any
Person providing for the leasing by the Borrower or any Subsidiary thereof of
real or personal property which has been or is to be sold or transferred by the
Borrower or its Subsidiary to such Person or to any other Person to whom funds
have been or are to be advanced by such Person on the security of such property
or rental obligations thereof.
7.9 Limitation on Investments, Loans and Advances. Purchase,
hold or acquire beneficially any stock, other
59
securities or evidences of indebtedness of, make or permit to exist any loans or
advances to, or make or permit to exist any investment or acquire any interest
whatsoever in, any other Person, except:
(a) extensions of trade credit to customers in the
ordinary course of business;
(b) Cash Equivalents;
(c) loans to officers of the Loan Parties or their
Subsidiaries in an aggregate principal amount outstanding at any time not to
exceed $100,000;
(d) loans and advances to employees of the Borrower
or its Subsidiaries for travel, entertainment and relocation expenses in the
ordinary course of business in an aggregate amount for the Borrower and its
Subsidiaries not to exceed $100,000 at any one time outstanding;
(e) Capital Stock of any Subsidiary;
(f) loans and advances by the Borrower or any
Subsidiary to any Loan Party;
(g) loans, advances and capital contributions by the
Borrower or any Subsidiary to any Subsidiary that is not a Loan Party; provided
that, the sum of (x) the aggregate amount loaned or advanced by a Loan Party to
any such Subsidiary that is not a Loan Party in any fiscal year plus (y) the
aggregate amount of Indebtedness of any such non-Loan Party Subsidiary
guaranteed by a Loan Party in such fiscal year shall not exceed $15,000,000;
(h) acquisitions by the Borrower or any Subsidiary of
less than all or substantially all of the Capital Stock or assets of a Person
(or of any segment or division of a Person) that is in a business that is
directly related to the business of the Borrower or such Subsidiary; provided
that (i) at the time that any definitive agreement is entered into in respect of
any such acquisition, no Default or Event of Default shall exist or would exist
if such acquisition were consummated on such date (assuming for purposes of the
covenants contained in subsection 7.1 that pro forma adjustments are made to the
financial statements of the Borrower giving effect to such acquisition as if it
had occurred on the last day of the Borrower's most recently completed fiscal
quarter), (ii) any such acquisition shall have been approved by the board of
directors of
60
the entity (or, in the case of an entity that is not a corporation, the
comparable Person or Persons) whose stock or assets are being acquired (or, if
such entity is in bankruptcy, by the bankruptcy or other court having
jurisdiction over such entity), and (iii) the aggregate gross purchase price
(including Indebtedness assumed or incurred in connection therewith) for all
such acquisitions shall not exceed $15,000,000 in any fiscal year of the
Borrower; and
(i) acquisitions by the Borrower or any Subsidiary of
all or substantially all of the Capital Stock or assets of a Person (or of any
segment or division of a Person) that is in a business that is directly related
to the business of the Borrower or such Subsidiary; provided that (i) at the
time that any definitive agreement is entered into in respect of any such
acquisition, no Default or Event of Default shall exist or would exist if such
acquisition were consummated on such date (assuming for purposes of the
covenants contained in subsection 7.1 that pro forma adjustments are made to the
financial statements of the Borrower giving effect to such acquisition as if it
had occurred on the last day of the Borrower's most recently completed fiscal
quarter), (ii) any such acquisition shall have been approved by the board of
directors of the entity (or, in the case of an entity that is not a corporation,
the comparable Person or Persons) whose stock or assets are being acquired (or,
if such entity is in bankruptcy, by the bankruptcy or other court having
jurisdiction over such entity), (iii) the aggregate gross purchase price
(including the amount of Indebtedness assumed or incurred in connection
therewith) for all such acquisitions shall not exceed $20,000,000 in any fiscal
year of the Borrower, and (iv) prior to consummating any acquisition involving a
total consideration (including Indebtedness assumed or incurred in connection
therewith) in excess of $5,000,000, the Borrower shall have furnished to the
Lenders financial statements, pro forma projections and other information
relating thereto demonstrating pro forma compliance with the terms of this
Agreement for the period of the next four consecutive fiscal quarters after
completion of such acquisition demonstrating that no Default or Event of Default
exists or would be caused thereby.
7.10 Limitation on Optional Payments and Modifications of Debt
Instruments. Make any optional payment or prepayment on or redemption,
defeasance or purchase of any Indebtedness (other than Indebtedness under this
Agreement), or amend, modify or change, or consent or agree to any amendment,
modification or change to any of the terms, relating to the payment or
prepayment of principal of or interest on, any Indebtedness (other than
Indebtedness under this Agreement), other than (a) optional payments or
prepayments in an aggregate amount in any twelve-month period not to exceed
$250,000 and (b) any amendment,
61
modification or change which would extend the maturity or reduce the amount of
any payment of principal thereof or which would reduce the rate or extend the
date for payment of interest thereon.
7.11 Limitation on Negative Pledge Clauses. Enter into any
agreement with any Person other than the Lenders which prohibits or limits the
ability of the Borrower or any of its Subsidiaries to create, incur, assume or
suffer to exist any Lien upon any of its properties, assets or revenues, whether
now owned or hereafter acquired; provided that the Borrower and its Subsidiaries
may enter into such an agreement in connection with any Lien permitted by
subsection 7.2(g) of this Agreement, when such prohibition or limitation is by
its terms effective only against the assets subject to such Lien.
7.12 Fiscal Year. Permit the fiscal year of the
Borrower to end on a day other than December 31.
7.13 Limitation on Conduct of Business. Enter into any
business either directly or through any Subsidiary except for businesses in
which the Borrower and its Subsidiaries are engaged on the date of this
Agreement and any business directly related to such existing businesses.
7.14 Changes in Organizational Documents. Amend in any respect
its certificate of incorporation (including any provisions or resolutions
relating to Capital Stock), by-laws or other organizational documents, in the
event such change would be adverse to the Agent and/or the Lenders as determined
by the Agent in its reasonable discretion.
SECTION 8. EVENTS OF DEFAULT
8.1 Events of Default. If any of the following events shall
occur and be continuing:
(a) The Borrower shall fail to pay any principal of
any Note or any Reimbursement Obligation when due in accordance with the terms
thereof or hereof; or the Borrower shall fail to pay any interest on any Note,
or any other amount payable hereunder or thereunder (including without
limitation any fees), within three Business Days after any such interest or
other amount becomes due in accordance with the terms thereof or hereof; or
62
(b) Any representation or warranty made or deemed
made by a Loan Party herein or in any other Loan Document or which is contained
in any certificate or financial statement furnished at any time under or in
connection with this Agreement shall prove to have been incorrect or misleading
in any material respect on or as of the date made or deemed made; or
(c) The Borrower shall default in the observance or
performance of any agreement contained in Section 7 of this Agreement; or
(d) A Loan Party shall default in the observance or
performance of any other agreement contained in this Agreement (other than as
provided in subsection (a) through (c) above) or any other Loan Documents, and
such default shall continue unremedied for a period of 30 days; or
(e) A Loan Party or any Material Subsidiary thereof
shall (i) default in the payment of any principal of or interest on or any other
amount payable on any Indebtedness (other than the Notes) beyond the period of
grace, if any, provided in the instrument or agreement under which such
Indebtedness was created and the aggregate amount of such Indebtedness in
respect of which such default or defaults shall have occurred is at least
$1,000,000; or (ii) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder, holders, beneficiary or
beneficiaries of such Indebtedness (or a trustee or agent on behalf of such
holder or holders or beneficiary or beneficiaries) to cause, with the giving of
notice if required, such Indebtedness to become due and payable; or
(f) (i) A Loan Party or any Material Subsidiary
thereof shall commence any case, proceeding or other action (A) under any
existing or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an
order for relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian
or other similar official for it or for all or any substantial part of its
assets, or a Loan Party or any of its Material Subsidiaries shall make a general
assignment for the benefit of its creditors; or (ii) there shall be commenced
against a Loan Party or any of its Material Subsidiaries any case, proceeding or
other action of a nature
63
referred to in clause (i) above which (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii) there shall be
commenced against a Loan Party or any of its Material Subsidiaries any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part of
its assets which results in the entry of an order for any such relief which
shall not have been vacated, discharged, satisfied, or stayed or bonded pending
appeal within 60 days from the entry thereof; or (iv) a Loan Party or any of its
Material Subsidiaries shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth in clause
(i), (ii), or (iii) above; or (v) a Loan Party or any of its Material
Subsidiaries shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they generally become due; or
(g) One or more judgments or decrees shall be entered
against a Loan Party or any of its Material Subsidiaries involving in the
aggregate a liability (excluding any such judgments or orders which are fully
covered by insurance, subject to any customary deductible, and under which the
applicable insurance carrier has acknowledged such full coverage in writing) of
$1,000,000 or more and all such judgments or decrees shall not have been
vacated, discharged, settled, satisfied or paid, or stayed or bonded pending
appeal, within 60 days from the entry thereof; or
(h) Without limiting any other representations or
covenants relating to environmental matters, a Loan Party or any Subsidiary
thereof shall fail to (i) comply with or require compliance by all tenants and,
to the extent possible, all subtenants, if any, with all Environmental Laws or
obtain and comply with and maintain, or require that all tenants and, to the
extent possible, all subtenants, obtain and comply with and maintain, any and
all licenses, approvals, registrations or permits required by Environmental Laws
except to the extent that failure to so comply or obtain or maintain such
documents could not reasonably be expected to have a Material Adverse Effect; or
(ii) comply with all lawful and binding orders and directives of all
Governmental Authorities respecting Environmental Laws except to the extent that
failure to so comply could not reasonably be expected to have a Material Adverse
Effect; or
(i) Without limiting any other representations or
covenants relating to ERISA matters, (i) any Person shall engage
64
in any "prohibited transaction" (as defined in Section 406 of ERISA or Section
4975 of the Code) involving any Plan, (ii) any "accumulated funding deficiency"
(as defined in Section 302 of ERISA), whether or not waived, shall exist with
respect to any Plan or any Lien in favor of the PBGC or a Plan shall arise on
the assets of a Loan Party or any Commonly Controlled Entity, (iii) a Reportable
Event shall occur with respect to, or proceedings shall commence to have a
trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or institution of
proceedings or appointment of a trustee is, in the reasonable opinion of the
Required Lenders, likely to result in the termination of such Plan for purposes
of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for purposes
of Title IV of ERISA, (v) a Loan Party or any Commonly Controlled Entity shall,
or in the reasonable opinion of the Required Lenders is likely to, incur any
liability in connection with a withdrawal from, or the Insolvency or
Reorganization of, a Multiemployer Plan or (vi) any other event or condition
shall occur or exist in regard to a Plan; and in each case in clauses (i)
through (vi) above, such event or condition, together with all other such events
or conditions, if any, could reasonably be expected to have a Material Adverse
Effect; or
(j) Any Change in Control shall occur; or
(k) Any other event shall have occurred which
could reasonably be expected to have a Material Adverse Effect;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement (including all amounts of L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have presented the
documents required thereunder) and the Notes shall automatically and immediately
become due and payable, and (B) if such event is any other Event of Default,
either or both of the following actions may be taken: (i) with the consent of
the Required Lenders, the Agent may, or upon the written request of the Required
Lenders, the Agent shall, by notice to the Borrower declare the Commitments to
be terminated forthwith, whereupon the Commitments shall immediately terminate;
and (ii) with the consent of the Required Lenders, the Agent may, or upon the
written request of the Required Lenders, the Agent shall, by notice of default
to the Borrower, declare the Loans hereunder (with accrued interest thereon) and
all other amounts owing under this Agreement (including, without limitation, all
amounts of L/C Obligations, whether or not the beneficiaries of the then
65
outstanding Letters of Credit shall have presented the documents required
thereunder) and the Notes to be due and payable forthwith, whereupon the same
shall immediately become due and payable. With respect to all Letters of Credit
with respect to which presentment for honor shall not have occurred at the time
of an acceleration pursuant to this subsection 8.1, the Borrower shall at such
time deposit in a cash collateral account opened by the Agent an amount equal to
the L/C Coverage Requirement for each such Letter of Credit. The Borrower hereby
grants to the Agent, for the benefit of the Issuing Bank and the L/C
Participants, a security interest in such cash collateral to secure all
obligations of the Loan Parties under this Agreement and the other Loan
Documents. Amounts held in such cash collateral account shall be applied by the
Agent to the payment of drafts drawn under such Letters of Credit, and the
unused portion thereof after all such Letters of Credit shall have expired or
been fully drawn upon, if any, shall be applied to repay other obligations of
the Loan Parties hereunder and under the other Loan Documents. After all such
Letters of Credit shall have expired or been fully drawn upon, all Reimbursement
Obligations shall have been satisfied and all other obligations of the Loan
Parties hereunder and under the other Loan Documents shall have been paid in
full, the balance, if any, in such cash collateral account shall be returned to
the Borrower or as otherwise directed by a court of competent jurisdiction. The
Borrower shall execute and deliver to the Agent, for the account of the Issuing
Bank and the L/C Participants, such further documents and instruments as the
Agent may request to evidence the creation and perfection of the within security
interest in such cash collateral account. Except as expressly provided above in
this Section, presentment, demand, protest and all other notices of any kind are
hereby expressly waived.
SECTION 9. THE AGENT
9.1 Appointment. Each Lender hereby irrevocably designates and
appoints PNC as the Agent of such Lender under this Agreement and the other Loan
Documents, and each such Lender irrevocably authorizes PNC, as the Agent for
such Lender, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement and the other Loan Documents, the Agent shall
66
not have any duties or responsibilities, except those expressly set forth herein
or therein, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement and the other Loan Documents or otherwise exist
against the Agent. PNC agrees to act as the Agent on behalf of the Lenders to
the extent provided in this Agreement and the other Loan Documents.
9.2 Delegation of Duties. The Agent may execute any of its
duties under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to engage and pay for the advice and
services of counsel concerning all matters pertaining to such duties. The Agent
shall not be responsible to the Lenders for the negligence or misconduct of any
agents or attorneys in-fact selected by it with reasonable care.
9.3 Exculpatory Provisions. Neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be
(a) liable for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with this Agreement or the other Loan Documents
(except for its or such Person's own gross negligence or willful misconduct) or
(b) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by a Loan Party or any officer
thereof contained in this Agreement, the other Loan Documents or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agent under or in connection with, this Agreement or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or the other Loan Documents or for any failure of the Loan
Parties (or any of them) to perform their obligations hereunder or thereunder.
The Agent shall not be under any obligation to any Lender to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement or the other Loan Documents, or to inspect
the properties, books or records of the Loan Parties (or any of them).
9.4 Reliance by Agent. The Agent shall be entitled to rely,
and shall be fully protected in relying, upon any Note, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy,
telex or teletype message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to one or more of the Loan Parties),
independent accountants and other
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experts selected by the Agent. The Agent may deem and treat the payee of any
Note as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Agent. The Agent shall be fully justified in failing or refusing to take any
action under this Agreement or the other Loan Documents unless it shall first
receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement or
the other Loan Documents in accordance with a request of the Required Lenders,
and such request and any action taken or failure to act pursuant thereto shall
be binding upon all the Lenders and all future holders of the Loans.
9.5 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless it has received notice from a Lender or the Borrower referring
to this Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default". In the event that the Agent receives such
a notice, the Agent shall give notice thereof to the Lenders. The Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders; provided that unless and until the
Agent shall have received such directions, it may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the best interests of
the Lenders.
9.6 Non-Reliance on Agent and Other Lenders. Each Lender
expressly acknowledges that neither the Agent nor any of its respective
officers, directors, employees, agents, attorneys-in-fact or Affiliates has made
any representations or warranties to it and that no act by the Agent hereinafter
taken, including any review of the affairs of the Loan Parties, shall be deemed
to constitute any representation or warranty by the Agent to any Lender. Each
Lender represents to the Agent that it has, independently and without reliance
upon the Agent or any other Lender, and based on such documents and information
as it has deemed appropriate, made its own appraisal of and investigation into
the business, operations, property, financial and other condition and
creditworthiness of the Loan Parties and made its own decision to make its Loans
hereunder and enter into this Agreement and each other Loan Document to which it
is a party.
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Each Lender also represents that it will, independently and without
reliance upon the Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigation as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties. Except
for notices, reports and other documents expressly required to be furnished to
the Lenders by the Agent hereunder, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Loan Parties which may come
into the possession of the Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates.
9.7 Indemnification. The Lenders agree to indemnify the Agent
in its capacity as such (to the extent not reimbursed by the Loan Parties and
without limiting the obligation, if any, of the Loan Parties to do so) in
Dollars, ratably according to their respective Commitment Percentages, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including, without limitation, at any time
following the payment of the Loans) be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of this Agreement, the
other Loan Documents, or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by the Agent under or in connection with any of the foregoing;
provided that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from the Agent's gross
negligence or willful misconduct. The agreements in this subsection 9.7 shall
survive the payment of the Loans and all other amounts payable hereunder.
9.8 Agent in its Individual Capacity. The Agent and its
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Loan Parties (or any of them) as though the Agent were
not the Agent hereunder. With respect to its Loans made or renewed by it and
with respect to any Letter of Credit issued or participated in by it, the Agent
shall have the same rights and powers under this Agreement and the other Loan
Documents as any Lender and may exercise the same as though it were not the
Agent, and the terms "Lender" and "Lenders" shall include the Agent in its
individual
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capacity.
9.9 Successor Agent. The Agent may resign as Agent hereunder
and under the other Loan Documents upon 30 days' notice to the Lenders and the
Borrower. If the Agent shall resign, then the Required Lenders shall appoint
from among the Lenders a successor Agent for the Lenders, which appointment
shall be subject to (unless an Event of Default shall have occurred and be
continuing) the approval of the Borrower (which approval shall not be
unreasonably withheld). Any rejection by the Borrower of a successor Agent shall
specify the reasons for such rejection. Failure of the Borrower to approve or
reject a successor agent within ten days following request for approval shall be
deemed to constitute approval. Upon such appointment and approval, such
successor agent shall succeed to the rights, powers and duties of the Agent and
the term "Agent" shall mean such successor agent effective upon its appointment
and the former Agent's rights, powers and duties as Agent shall be terminated,
without any other or further act or deed on the part of such former Agent or any
of the parties to this Agreement or the other Loan Documents or any holders of
the Loans. After any retiring Agent's resignation, the provisions of this
Section 9 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement.
9.10 Beneficiaries. Except as expressly provided herein, the
provisions of this Section 9 are solely for the benefit of the Agent and the
Lenders, and the Loan Parties shall not have any rights to rely on or enforce
any of the provisions hereof. In performing its functions and duties under this
Agreement and the other Loan Documents, the Agent shall act solely as agent of
the Lenders and does not assume and shall not be deemed to have assumed any
obligation toward or relationship of agency or trust with or for the Loan
Parties.
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement, any other
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this subsection. With the
written consent of the Required Lenders, the Agent and the Borrower may, from
time to time, enter into written amendments (including letter amendments),
supplements or modifications hereto and to the other Loan Documents for the
purpose of adding any provisions to this Agreement or any other Loan Document or
changing in any manner the rights of the Lenders or of the Loan Parties
hereunder or thereunder or waiving, on such terms and conditions as the Agent
may specify in such instrument, any of the requirements of this Agreement or any
other Loan Document or any Default or Event of
70
Default and its consequences; provided, however, that no such waiver and no such
amendment, supplement or modification shall directly or indirectly (a) reduce
the amount or extend the maturity of any Note or any installment thereof, or
reduce the rate of interest or extend the time of payment of interest thereon,
or reduce any fee payable to any Lender hereunder or extend the period for
payment thereof, or change the duration or the amount of any Lender's
Commitment, in each case without the consent of the Lender affected thereby, (b)
amend, modify or waive any provision of this subsection or reduce the percentage
specified in the definition of Required Lenders, or consent to the assignment or
transfer by the Loan Parties of any of their rights and obligations under this
Agreement and the other Loan Documents, or release the Borrower as a Loan Party,
in each case without the written consent of all the Lenders, (c) amend, modify
or waive any provision of Section 9 without the written consent of the then
Agent or (d) amend, modify or waive any provision of this Agreement relating to
any outstanding Letter of Credit without the written consent of the Issuing
Bank. Any such waiver and any such amendment, supplement or modification shall
apply equally to each of the Lenders and shall be binding upon the Loan Parties,
the Lenders, the Agent and all future holders of the Notes. In the case of any
waiver, the Loan Parties, the Lenders and the Agent shall be restored to their
former position and rights hereunder and under the outstanding Notes, and any
Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon.
10.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy, telegraph or telex confirmed in writing), and, unless otherwise
expressly provided herein, shall be deemed to have been duly given or made when
delivered by hand, or three days after being deposited in the mail, postage
prepaid, or the next Business Day if sent by reputable overnight courier,
postage prepaid, for delivery on the next Business Day, or, in the case of
telecopy notice, when received during normal business hours with electronic
confirmation, or, in the case of telegraphic notice, when delivered to the
telegraph company, or, in the case of telex notice, when sent, answerback
received, addressed as follows in the case of the Borrower, the Agent or the
Issuing Bank, and as set forth in Schedule I in the case of the other parties
hereto, or to such other address as may be hereafter notified by the respective
parties hereto and any future holders of the Notes:
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The Borrower Transaction Network Services, Inc.
0000 Xxxxxx Xxxxx Xxxxx
Xxxxxx, XX 00000-0000
Attention: Xxx Xxxx
Chief Financial Officer
Telecopy: (000) 000-0000
The Agent and PNC Bank, National Association
the Issuing Bank: 0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx
Vice President
Telecopy: (000) 000-0000
With a Copy to: PNC Bank, National Association
Agent Services
Xxx XXX Xxxxx, 00xx Xxxxx
000 Xxxxx Xxxxxx
Xxxxxx Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxxxx Xxxxx
Telecopy: (000) 000-0000
provided that (a) any notice, request or demand to or upon the Agent or the
Lenders pursuant to subsections 2.3, 2.5, 3.5, 3.6, 3.7, 3.13 and 3.14 shall not
be effective until received and (b) any notice of a Default or Event of Default
hereunder shall be sent by telecopy or reputable overnight courier.
10.3 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Agent or any Lender, any right,
remedy, power or privilege hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights, remedies, powers and
privileges herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.
10.4 Survival of Representations and Warranties. All
representations and warranties made hereunder and in any document, certificate
or statement delivered pursuant hereto or in connection herewith shall survive
the execution and delivery of this Agreement and the other Loan Documents.
10.5 Payment of Expenses and Taxes. The Borrower
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agrees (a) to pay or reimburse the Agent for all its reasonable out-of-pocket
costs and expenses incurred in connection with the development, preparation and
execution of, administration of and the syndication of, this Agreement, the
other Loan Documents and any other documents executed and delivered in
connection herewith or therewith and the consummation of the transactions
contemplated hereby and thereby, including, without limitation, the reasonable
fees and disbursements of counsel to the Agent, (b) to pay or reimburse the
Agent for all its reasonable out-of-pocket costs and expenses incurred in
connection with any amendment, supplement or modification, and any proposed
amendment, supplement or modification, to this Agreement and the other Loan
Documents and any other documents executed and delivered in connection
therewith, or proposed to be executed and delivered in connection therewith,
including without limitation, the reasonable fees and disbursements of counsel,
(c) pay or reimburse each Lender and the Agent for all its costs and expenses
incurred in connection with the enforcement or preservation of any rights under
this Agreement, the other Loan Documents and any such other documents,
including, without limitation, reasonable fees and disbursements of counsel to
the Agent and any Lender, (d) to pay, indemnify, and hold each Lender and the
Agent harmless from, any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other taxes, if any (other than taxes expressly excluded from the
definition of Taxes in subsection 3.10) which may be payable or determined to be
payable in connection with the execution and delivery of, or consummation of any
of the transactions contemplated by, or any amendment, supplement or
modification of, or any waiver or consent under or in respect of, this
Agreement, the other Loan Documents and any such other documents, and (e) to
pay, indemnify, and hold each Lender and the Agent harmless from and against any
and all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance and
administration of this Agreement, the Notes, the other Loan Documents and any
such other documents including, without limitation, any of the foregoing
relating to the use of proceeds of the Loans or the violation of, noncompliance
with or liability under, any Environmental Laws applicable to the operations of
the Loan Parties or their Subsidiaries (all the foregoing, collectively, the
"indemnified liabilities"), provided, that the Borrower shall have no obligation
hereunder to the Agent or any Lender with respect to indemnified liabilities
arising from the gross negligence or willful misconduct of such Person. The
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agreements in this subsection shall survive repayment of the Loans and all other
amounts payable hereunder. All references in this subsection to attorneys fees
shall include the allocable costs of in-house legal services of the Agent.
10.6 Successors and Assigns. (a) Whenever in this Agreement
any of the parties hereto is referred to, such reference shall be deemed to
include the successors and permitted assigns of such party; and all covenants,
promises and agreements by or on behalf of the Borrower, the Agent or the
Lenders that are contained in this Agreement shall bind and inure to the benefit
of their respective successors and assigns. The Borrower may not assign or
transfer any of its rights or obligations under this Agreement or the other Loan
Documents without the prior written consent of each Lender.
(b) Each Lender may, in accordance with applicable
law, sell to any Lender or Affiliate thereof and, with the consent of the
Borrower and the Agent(which consents shall not be unreasonably withheld), to
one or more banks, financial institutions or "accredited investors" (as defined
in Regulation D of the Securities Act of 1933, as amended) (each, a "Purchasing
Lender") all or a pro rata portion of its interests, rights and obligations
under this Agreement, the Notes and the other Loan Documents, other than as
Agent or Issuing Bank (i.e., all or a pro rata portion of its Commitments and
the Loans at the time owing to it and the Notes held by it); provided, however,
that (i) so long as the Commitments are then in effect, such assignment shall be
in an amount not less than $5,000,000 (or such lesser amount as (x) the Borrower
and the Agent shall agree in their sole discretion or (y) is an assignment of
all of a Lender's interests under the Commitments and its Loans), (ii) the
parties to each such assignment shall execute and deliver to the Agent and the
Borrower for its acceptance and recording in the Register an Assignment and
Acceptance, together with the Note or Notes subject to such assignment and a
processing and recordation fee of $3,500. Upon acceptance and recording pursuant
to paragraph (e) of this subsection 10.6, from and after the effective date
specified in an Assignment and Acceptance, which effective date shall be at
least five Business Days after the execution and delivery thereof to the
Borrower and the Agent (or such shorter period as the Agent and the Borrower may
agree in their sole discretion), (A) such Purchasing Lender shall be a party
hereto and, to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of a Lender under this Agreement and
(B) the assigning Lender thereunder shall, to the extent of the interest
assigned by such
74
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this Agreement and
the other Loan Documents, such Lender shall cease to be a party hereto but shall
continue to be entitled to the benefits of subsections 3.9, 3.10, 3.11 and 10.5
(to the extent that such Lender's entitlement to such benefits arose out of such
Lender's position as a Lender prior to the applicable assignment). Such
Assignment and Acceptance shall be deemed to amend this Agreement to the extent,
and only to the extent, necessary to reflect the addition of such Purchasing
Lender and the resulting amounts and percentages held by the Lenders after
giving effect to the purchase by such Purchasing Lender of all or a portion of
the rights and obligations of such assigning Lender under this Agreement and the
other Loan Documents. Notwithstanding any provision of this subsection 10.6, the
consent of the Borrower shall not be required for any assignment which occurs at
any time when an Event of Default shall have occurred and be continuing under
subsection 8.1(a) or subsection 8.1(f).
(c) By executing and delivering an Assignment and
Acceptance, the assigning Lender thereunder and the Purchasing Lender thereunder
shall be deemed to confirm to and agree with each other and the other parties
hereto as follows: (i) such assigning Lender warrants that it is the legal and
beneficial owner of the interest being assigned thereby, free and clear of any
adverse claim, (ii) except as set forth in (i) above, such assigning Lender
makes no representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection with
this Agreement or the other Loan Documents, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement,
the other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto, or the financial condition of the Loan Parties or any
Subsidiary thereof or the performance or observance by the Loan Parties or any
Subsidiary thereof of any of its or their obligations under this Agreement or
the other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto; (iii) such assignee represents and warrants that it is
legally authorized to enter into such Assignment and Acceptance; (iv) such
Purchasing Lender confirms that it has received a copy of this Agreement,
together with copies of the most recent financial statements delivered pursuant
to subsection 6.1 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (v) such Purchasing Lender will independently and
without reliance upon the Agent, such assigning Lender or any other Lender and
based on such documents and information as it
75
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement and the other Loan Documents;
(vi) such Purchasing Lender appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
and the other Loan Documents as are delegated to the Agent by the terms hereof
or thereof, together with such powers as are reasonably incidental thereto; and
(vii) such Purchasing Lender agrees that it will perform in accordance with
their terms all the obligations which by the terms of this Agreement and the
other Loan Documents are required to be performed by it as a Lender including,
if it is becoming a Lender and is organized under the laws of a jurisdiction
outside the United States, its obligation pursuant to subsection 3.10 to deliver
the forms prescribed by the Internal Revenue Service of the United States
certifying as to the Purchasing Lender's exemption from United States
withholding taxes with respect to all payments to be made to the Purchasing
Lender under this Agreement.
(d) The Agent shall maintain at its offices in
Philadelphia, Pennsylvania a copy of each Assignment and Acceptance and the
names and addresses of the Lenders, and the Commitment(s) of, and principal
amount of the Loans and L/C Obligations owing to, each Lender pursuant to the
terms hereof from time to time (the "Register"). The entries in the Register
shall be conclusive in the absence of manifest error and the Borrower, the Agent
and the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower and
any Lender at any reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of a duly completed Assignment
and Acceptance executed by an assigning Lender and a Purchasing Lender (and in
the case of a Purchasing Lender that is not then a Lender or an Affiliate
thereof, by the Borrower and the Agent) together with the Note or Notes subject
to such assignment and the processing and recordation fee referred to in
paragraph (b) above, the Agent shall promptly (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give notice thereof to the Lenders. Within five Business Days after
receipt of notice, the Borrower, at its own expense, shall execute and deliver
to the Agent, in exchange for the surrender of the original Note(s) (A) a new
Note to the order of such Purchasing Lender in an amount equal to the Commitment
assumed and (B) if the assigning Lender
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has retained a Commitment or, with respect to assignments occurring after the
termination of the Commitments, a portion of the Loans, a new Note to the order
of such assignor in the respective amount equal to the Loan retained by it
and/or the Commitment retained by it, as the case may be. Such new Notes shall
be in an aggregate principal amount equal to the aggregate principal amount of
such surrendered Note(s); such new Notes shall be dated the date of the
surrendered Notes which they replace and shall otherwise be in substantially the
form of Exhibit A. Canceled Notes shall be returned to the Borrower.
(f) Each Lender may without the consent of the
Borrower or the Agent (except to the extent provided below) sell participations
to one or more banks or other entities (each a "Participant") in any Loan owing
to such Lender, the Note held by such Lender, any Commitment of such Lender or
any other interest of such Lender hereunder and under the other Loan Documents,
provided, however, that (i) such Lender's obligations under this Agreement to
the other parties to this Agreement shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the performance
of such obligations, (iii) such Lender shall remain the holder of any such Note
for all purposes under this Agreement and the other Loan Documents, (iv) the
Borrower, the Lenders and the Agent shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations under
this Agreement and the other Loan Documents, (v) in any proceeding under the
Bankruptcy Code such Lender shall be, to the extent permitted by law, the sole
representative with respect to the obligations held in the name of such Lender,
whether for its own account or for the account of any Participant, and (vi) such
Lender shall retain the sole right to approve, without the consent of any
Participant, any amendment, modification or waiver of any provision of this
Agreement or the Note held by such Lender or any other Loan Document, other than
any such amendment, modification or waiver with respect to any Loan or
Commitment in which such Participant has an interest that forgives principal,
interest or fees or reduces the interest rate or fees payable with respect to
any such Loan or Commitment, postpones any date fixed for any regularly
scheduled payment of principal of, or interest or fees on, any such Loan, or
releases the Borrower from liability with respect to such Loan.
(g) If amounts outstanding under this Agreement and
the Notes are due or unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Participant
shall be deemed to have the right of set-off in respect of its participating
interest in amounts owing under this Agreement, any Note and the other Loan
Documents to the same extent as if the amount of its participating interest
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were owing directly to it as a Lender under this Agreement or any Note, provided
that in purchasing such participation such Participant shall be deemed to have
agreed to share with the Lenders the proceeds thereof as provided in subsection
10.8. The Borrower also agrees that each Participant shall be entitled to the
benefits of subsections 3.9, 3.10, 3.11 and 10.5 with respect to its
participation in the Commitments and the Loans outstanding from time to time;
provided, that no Participant shall be entitled to receive any greater amount
pursuant to such subsections than the assigning Lender would have been entitled
to receive in respect of the amount of the participation transferred by such
assigning Lender to such Participant had no such transfer occurred.
(h) If any Participant of a Lender is organized under
the laws of any jurisdiction other than the United States or any state thereof,
the assigning Lender, concurrently with the sale of a participating interest to
such Participant, shall cause such Participant (i) to represent to the assigning
Lender (for the benefit of the assigning Lender, the other Lenders, the Agent
and the Borrower) that under applicable law and treaties no taxes will be
required to be withheld by the Agent, the Borrower or the assigning Lender with
respect to any payments to be made to such Participant in respect of its
participation in the Loans and (ii) to agree (for the benefit of the assigning
Lender, the other Lenders, the Agent and the Borrower) that it will deliver the
tax forms and other documents required to be delivered pursuant to paragraph
3.10(b) and comply from time to time with all applicable U.S. laws and
regulations with respect to withholding tax exemptions.
(i) Any Lender may at any time assign all or any
portion of its rights under this Agreement and the Note issued to it to a
Federal Reserve Bank; provided that no such assignment shall release a Lender
from any of its obligations hereunder.
10.7 Disclosure of Information. Unless otherwise consented to
by the Borrower in writing, each of the Lenders and the Agent agrees (on behalf
of itself and each of its affiliates, directors, officers, employees and
representatives) to use reasonable precautions to keep confidential, in
accordance with its customary procedures for handling confidential information
of the same nature and in accordance with safe and sound banking practices, any
non-public information supplied to it by the Borrower pursuant to this
Agreement; provided that nothing herein shall limit the disclosure of any such
information (a) to the extent required by statute, rule, regulation or judicial
process, (b) to counsel for any Lender or the Agent, (c) to bank examiners,
auditors or accountants, (d) to the Agent or any other Lender, (e) in connection
with any litigation to which any one or
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more of the Lenders or the Agent is a party involving the Borrower, any other
Loan Party, or any Subsidiary thereof or any of its or their properties or in
any way relating to this Agreement or any other Loan Documents or any Loans or
other obligations of one or more of the Loan Parties to the Agent or any Lender
and (f) to any participant or Purchasing Lender (or prospective participant or
Purchasing Lender) so long as such Participant or Purchasing Lender (or
prospective participant or Purchasing Lender) agrees to comply with the
requirements of this subsection.
10.8 Adjustments; Set-off. (a) If any Lender (a "benefitted
Lender") shall at any time receive any payment of all or part of its Loans or
the Reimbursement Obligation owing to it, or interest thereon, or receive any
collateral in respect thereof (whether voluntarily or involuntarily, by set-off,
pursuant to events or proceedings of the nature referred to in subsection
8.1(f), or otherwise), in a greater proportion than any such payment to or
collateral received by any other Lender, if any, in respect of such other
Lender's Loans or the Reimbursement Obligations owing to it, or interest
thereon, such benefitted Lender shall purchase for cash from the other Lenders
such portion of each such other Lender's Loans or the Reimbursement Obligations
owing to it, or shall provide such other Lenders with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such
benefitted Lender to share the excess payment or benefits of such collateral or
proceeds ratably with each of the Lenders; provided, however, that if all or any
portion of such excess payment or benefits is thereafter recovered from such
benefitted Lender, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest. The
Borrower agrees that each Lender so purchasing a portion of another Lender's
Loans or Reimbursement Obligations may exercise all rights of payment
(including, without limitation, rights of set-off) with respect to such portion
as fully as if such Lender were the direct holder of such portion.
(b) In addition to any rights and remedies of the
Lenders provided by law, upon the occurrence and during the continuance of an
Event of Default, each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Borrower hereunder or under the Notes (whether at the stated maturity, by
acceleration or otherwise) to set-off and appropriate and apply against such
amount any and all deposits
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(general or special, time or demand, provisional or final), in any currency, and
any other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender to or for the credit or the account of the
Borrower. Each Lender agrees promptly to notify the Borrower and the Agent after
any such set-off and application made by such Lender, provided that the failure
to give such notice shall not affect the validity of such set-off and
application.
10.9 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument.
10.10 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.11 Integration. This Agreement and the other Loan Documents
represent the agreement of the parties hereto with respect to the subject matter
hereof, and there are no promises, undertakings, representations or warranties
by the Agent or any Lender relative to the subject matter hereof not expressly
set forth or referred to herein or in the other Loan Documents.
10.12 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE COMMONWEALTH OF
PENNSYLVANIA.
10.13 Submission To Jurisdiction; Waivers. The
Borrower hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal
action or proceeding relating to this Agreement or any Note, or for recognition
and enforcement of any judgement in respect thereof, to the non-exclusive
general jurisdiction of the Courts of the Commonwealth of Pennsylvania, the
courts of the United States of America for the Eastern District of Pennsylvania,
and appellate courts from any thereof;
(b) consents that any such action or proceeding may
be brought in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or
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proceeding in any such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
(c) waives and hereby acknowledges that it is
estopped from raising any objection based on forum non conveniens, any claim
that any of the above-referenced courts lack proper venue or any objection that
any of such courts lack personal jurisdiction over it so as to prohibit such
courts from adjudicating any issues raised in a complaint filed with such courts
against the Borrower concerning this Agreement or the other Loan Documents;
(d) acknowledges and agrees that the choice of forum
contained in this subsection 10.13 shall not be deemed to preclude the
enforcement of any judgment obtained in any forum or the taking of any action
under the Loan Documents to enforce the same in any appropriate jurisdiction;
(e) agrees that service of process in any such action
or proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage prepaid, to
the Borrower at its address set forth in Section 10.2 or at such other address
of which the Agent shall have been notified pursuant to this Agreement;
(f) agrees that nothing herein shall affect the right
to effect service of process in any other manner permitted by law or shall limit
the right to xxx in any other jurisdiction; and
(g) waives, to the maximum extent not prohibited by
law, any right it may have to claim or recover in any legal action or proceeding
referred to in this subsection any special, exemplary, punitive or consequential
damages.
10.14 Acknowledgements. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the
negotiation, execution and delivery of this Agreement and the other Loan
Documents;
(b) neither the Agent nor any Lender has any
fiduciary relationship to the Borrower or any other Loan Party and the
relationship hereunder between the Agent and the Lenders, on the one hand, and
the Borrower and the other Loan Parties, on
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the other hand, is solely that of debtor and creditor; and
(c) no joint venture exists among the Lenders or
among the Borrower and any other Loan Party, on the one hand, and the Lenders or
the Agent on the other hand.
10.15 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENT
AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, THE NOTES OR ANY
OTHER LOAN DOCUMENT AND FOR ANY MANDATORY COUNTERCLAIM THEREIN.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
TRANSACTION NETWORK SERVICES, INC.
By:
Name:
Title:
PNC BANK, NATIONAL ASSOCIATION,
as a Lender and as Agent
By:
Name:
Title:
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Schedules
Schedule I Lender and Commitment Information
Schedule 4.16 List of Subsidiaries
EXHIBITS
EXHIBIT A Form of Note
EXHIBIT B Form of Compliance Certificate
EXHIBIT C Form of Guarantee
EXHIBIT D Form of Notice of Borrowing
EXHIBIT E Form of Legal Opinion
EXHIBIT F Form of Assignment and Assumption Agreement
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