SECOND AMENDED AND RESTATED ACCOUNTS RECEIVABLE
MANAGEMENT AND SECURITY AGREEMENT
This Second Amended and Restated Accounts Receivable
Management and Security Agreement is made as of November 14, 1997 by and
between BNY FINANCIAL CORPORATION ("BNY"), each of the undersigned financial
institutions and the various other financial institutions which become Lenders
hereunder (BNY and each of the other financial institutions collectively, the
"Lenders" and individually a "Lender"), BNY as agent for the Lenders (BNY in
such capacity, the "Agent") and TMP WORLDWIDE INC. ("Borrower"), a Delaware
corporation.
BACKGROUND
Borrower and BNY are parties to (i) an Amended and Restated
Accounts Receivable Management and Security Agreement made as of June 27, 1996
(as same has been amended, modified or supplemented from time to time, the
"Original ARM Agreement"). Borrower is presently indebted to BNY under the
Original ARM Agreement in the aggregate principal sum of $86,480,779
(including all outstanding Letters of Credit) plus all interest accrued
thereon. Borrower has requested and BNY has agreed to amend, by restating in
full, the terms of the Original ARM Agreement. The parties intend (a) that all
amounts advanced or financial accommodations provided pursuant to the Original
ARM Agreement will remain outstanding and all security interests and liens
granted pursuant to the Existing Ancillary Agreements shall remain in full
force and effect and not be limited but rather shall be expanded and ratified
by this Agreement and the Ancillary Agreements to be for the benefit of all
Lenders and to secure all Loans (as defined herein) and (b) to restate and
amend the Original ARM Agreement on the terms and conditions hereafter set
forth. The parties further intend that the terms and conditions of all
existing and future Loans (as hereafter defined) and Collateral (as hereafter
defined) interests shall be governed by this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings and the terms and conditions contained herein, the parties hereto
agree as follows:
A. AMENDMENT AND RESTATEMENT
As of the date of this Agreement, the terms,
conditions, covenants, agreements, representations and warranties contained in
the Original ARM Agreement shall be deemed amended and restated in their
entirety as follows and the Original ARM Agreement shall be consolidated with
and into and superseded by this Agreement; provided, however, that nothing
contained in this Agreement shall impair, limit or affect the liens and
security interests heretofore granted, pledged and/or assigned to Agent for
the ratable benefit of Lenders as security for Borrower's Obligations to
Lenders under the Original ARM Agreement.
1. (A) General Definitions. When used in this
Agreement, the following terms shall have the following meanings:
"Acquisition" shall have the meaning set forth in paragraph
12(m).
"Affiliate" of any Person means (a) any Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is controlled by,
or is under common control with such Person, or (b) any Person who is a
director or officer (i) of such Person, (ii) of any Subsidiary of such Person
or (iii) of any Person described in clause (a) above. For purposes of this
definition, control of a Person shall mean the power, direct or indirect, (i)
to vote 5% or more of the securities having ordinary voting power for the
election of directors of such Person, or (ii) to direct or cause the direction
of the management and policies of such Person whether by contract or
otherwise.
"Affiliate Receivables" means and includes all of each
Scheduled Affiliate's now owned or hereafter acquired accounts and contract
rights, instruments, insurance proceeds, documents, chattel paper, letters of
credit and each Scheduled Affiliate's rights to receive payment thereunder,
any and all rights to the payment or receipt of money or other forms of
consideration of any kind at any time now or hereafter owing or to be owing to
a Scheduled Affiliate, all proceeds thereof and all files in which any
Scheduled Affiliate has any interest whatsoever containing information
identifying or pertaining to any of a Scheduled Affiliate's Receivables,
together with all of such Scheduled Affiliate's rights to any merchandise
which is represented thereby, and all of such Scheduled Affiliate's right,
title, security and guaranties with respect to each Affiliate Receivable,
including, without limitation, all rights of stoppage in transit, replevin and
reclamation and all rights as an unpaid vendor.
"Alternate Base Rate" means, for any day, a rate per annum
equal to the higher of (i) the Prime Rate in effect on such day and (ii) the
Federal Funds Rate in effect on such day plus 1/2 of 1%.
"Alternate Base Rate Loan" shall mean any Loan that bears
interest based upon the Alternate Base Rate.
"Alternate Currencies" shall mean collectively, (i)
Sterling, Canadian Dollars and Australian Dollars and (ii) such other
currencies as shall be requested by Borrower to be an Alternate Currency
hereunder subject to the approval of Agent and all of the Lenders in their
sole and absolute discretion; (each, an "Alternate Currency").
"Alternate Currency Base Rate" shall mean, with respect to
Sterling Loans, the U.K. Base Rate; with respect to Canadian Loans, the
Canadian Prime Rate; with respect to Australian Loans, the Australian Base
Rate and with respect to all other Alternate Currency Loans, the base
commercial lending rate of interest charged by commercial banks as publicly
announced by a bank located in the applicable country and selected by Agent in
its sole discretion to be in effect from time to time, such rate to be
adjusted automatically, without notice, on the effective date of any change in
such rate.
"Alternate Currency Base Rate Loans" shall mean an Alternate
Currency Loan which bears interest at the Alternate Currency Base Rate.
"Alternate Currency Equivalent" shall mean with respect to
any Alternate Currency, on any date of determination thereof, the amount of
such Alternate Currency which could be purchased with the amount of Dollars
involved in such computation at the spot rate at which such Alternate Currency
may be exchanged into Dollars as determined by the Bank as of
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11:00 a.m. (London time) on such date of determination thereof for delivery
two Business Days later, which such determination shall be made on the basis
of the spot exchange rate then being quoted by the Bank to its corporate
customers with comparable credit status to Borrower.
"Alternate Currency Loan" shall mean a Loan denominated in
an Alternate Currency.
"Ancillary Agreements" means all agreements, instruments,
and documents including, without limitation, mortgages, pledges, powers of
attorney, consents, assignments, contracts, notices, security agreements,
trust agreements whether heretofore, concurrently, or hereafter executed by or
on behalf of Borrower or delivered to Agent or any Lender, relating to the
Original ARM Agreement, this Agreement, the U.K. Security Documents, the U.K.
Credit Agreement, the Canadian Security Documents, the Canadian Credit
Agreement or to the transactions contemplated hereby or thereby.
"Annual Minimum" means $450,000,000.
"Applicable Margin" means, with respect to Alternate Base
Rate Loans, LIBO Rate Loans, Canadian Loans and Sterling Loans, the
percentages which, when added to or subtracted from the Alternate Base Rate,
the LIBO Rate, the Canadian Prime Rate or the U.K. Base Rate, as the case may
be, comprise the Contract Rate.
"Xxxxxx Xxxxxx" shall mean Xxxxxx Xxxxxx Limited, a company
organized under the laws of the United Kingdom.
"Australian Base Rate" shall mean the base commercial
lending rate of interest charged by commercial banks as publicly announced by
a bank located in Australia and selected by Agent in its sole discretion to be
in effect from time to time, such rate to be adjusted automatically, without
notice, on the effective date of any change in such rate.
"Australian Dollars" shall mean the lawful money of Australia.
"Australian Facility" shall mean a credit facility which may
be provided by Agent (or, at the direction of Agent, by another BNY Company)
in its sole discretion, pursuant to which Agent or such BNY Company provides
Loans to Borrowers' Australian Subsidiaries in an amount not to exceed a
Dollar Equivalent of $15,000,000 pursuant to a lending facility in form and
substance satisfactory to Borrower and Agent or a BNY Company and which
facility may be structured as a new lending facility or as an assumption, at
the direction of Agent, by a BNY Company of the existing loan facility
currently in place with Scottish Pacific Bank and which shall provide for
loans at a rate of interest equal to at least (i) 3.95% in excess of the
interest rate per annum from time to time publicized by the Scottish Pacific
Bank as its 30-day xxxx rate or (ii) Australian Base Rate.
"Australian Loans" shall mean Loans denominated and payable
in Australian Dollars.
"Australian Subsidiary" shall mean any Subsidiary of
Borrower which is formed under the laws of Australia.
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"Australian Subsidiary Obligations" shall mean all
indebtedness and obligations of Borrower's Australian Subsidiaries under the
Australian Facility.
"Bank" means The Bank of New York.
"BNY Canada" shall mean BNY Financial Corporation - Canada.
"BNY Company" shall mean, individually and collectively, Agent, XXX, XXX XX,
XXX - Xxxxxx or any Affiliate thereof.
"BNY Overadvances" shall have the meaning set forth in
Section 2(c).
"BNY UK" shall mean BNY Financial Ltd.
"Borrowing Base Certificate" shall mean the certificates and
assignment schedule duly executed and delivered by an officer of Borrower to
Agent appropriately completed and in substantially the form attached as
Exhibit 1.2 hereto.
"Borrower on a Consolidated Basis" means the combination in
accordance with GAAP of (i) the consolidation in accordance with GAAP of the
accounts and other items of Borrower and its consolidated Subsidiaries (ii)
the combination in accordance with GAAP of the accounts and other items of all
Scheduled Affiliates (other than as included in preceding clause (i)).
"Borrowing Notice" shall have the meaning set forth in the
Section 4 hereof.
"Business Day" shall mean with respect to (i) Sterling
Loans, any day on which commercial banks are open for domestic and
international business, including dealings in Dollar deposits in London,
England or New York, New York, (ii) Canadian Loans, any day other than a day
on which commercial banks in Toronto, Canada are authorized or required by law
to close, (iii) Alternate Currency Loans other than Sterling Loans and
Canadian Loans, any day other than a day on which commercial banks in the
applicable country are authorized or required by law to close and (iv) all
other loans, any day other than a day on which commercial banks in New York
are authorized or required by law to close.
"Cala" shall mean Cala H.R.C., Ltd., a company organized
under the laws of Canada.
"Calendar Year" shall mean each twelve month period
beginning on January 1 and ending on December 31.
"Canadian Borrowers" shall mean TMP Canada, Cala and Dir-Ad.
"Canadian Collateral" shall mean substantially all of the
assets (both real and personal) of Borrower and each of its Subsidiaries
located in Canada and described in the Canadian Security Documents.
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"Canadian Credit Agreement" shall mean the Accounts
Receivable Management and Security Agreement dated March 13, 1995 entered into
by BNY-Canada with TMP Canada and Cala, as amended, supplemented, restated or
replaced from time to time, pursuant to which BNY-Canada funds Canadian Loans
to the Canadian Borrowers, and all other agreements executed in connection
therewith.
"Canadian Dollars" shall mean the lawful money of Canada.
"Canadian Loans" shall mean Loans denominated and payable in
Canadian Dollars.
"Canadian Prime Rate" shall mean the interest rate per annum
from time to time publicized by The Toronto-Dominion Bank as its prime rate,
such rate to be adjusted automatically, without notice, on the effective date
if any change in such rate. This rate of interest is determined from time to
time and is neither tied to any external rate of interest or index nor does it
necessarily reflect the lowest rate of interest actually charged to any
particular class or category of customers.
"Canadian Receivables" means and includes all of any
Canadian Subsidiary's now owned or hereafter acquired accounts and contract
rights, instruments, insurance proceeds, documents, chattel paper, letters of
credit and each Canadian Subsidiary's rights to receive payment thereunder,
any and all rights to the payment or receipt of money or other forms of
consideration of any kind at any time now or hereafter owing or to be owing to
a Canadian Subsidiary, all proceeds thereof and all files in which any
Canadian Subsidiary has any interest whatsoever containing information
identifying or pertaining to any of a Canadian Subsidiary's Receivables,
together with all of such Canadian Subsidiary's rights to any merchandise
which is represented thereby, and all of such Canadian Subsidiary's right,
title, security and guaranties with respect to each Canadian Receivable,
including, without limitation, all rights of stoppage in transit, replevin and
reclamation and all rights as an unpaid vendor.
Canadian Security Documents" shall mean each agreement
executed by a Canadian Subsidiary in favor xx XXX Xxxxxx pursuant to which BNY
Canada is granted a Lien or hypothec upon the Canadian Collateral as security
for the Canadian Subsidiary Obligations.
"Canadian Subsidiaries" shall mean TMP Canada, Cala and
Dir-Ad.
"Canadian Subsidiary Obligations" shall have the meaning
given to the term "OBLIGATIONS" under the Canadian Credit Agreement.
"Change of Control" shall mean the occurrence of any event
(whether in one or more transactions and including any merger or consolidation
of or with Borrower or a Scheduled Affiliate or sale of all or substantially
all of the property or assets of Borrower or a Scheduled Affiliate other than
the sale of substantially all of the assets of Xxxxxx Advertising) which
results in a transfer of control of Borrower or a Scheduled Affiliate to a
Person other than the Original Owner or a Person controlled by the Original
Owner For purposes of this definition, "control of Borrower or a Scheduled
Affiliate" shall mean the power, direct or indirect (x) to vote 50% or more of
the securities having ordinary voting power for the election of directors of
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Borrower or an Affiliate or (y) to direct or cause the direction of the
management and policies of Borrower or an Affiliate by contract or otherwise.
"Closing Date" means November 14, 1997 or such other date as
may be agreed upon by the parties hereto.
"Collateral" means and includes
(A) all Inventory;
(B) all Equipment;
(C) all General Intangibles;
(D) all Receivables;
(E) all books, records, ledgercards, files, correspondence,
computer programs, tapes, disks and related data processing software (owned by
Borrower or in which it has an interest) which at any time evidence or contain
information relating to (A), (B), (C) and (D) above or are otherwise necessary
or helpful in the collection thereof or realization thereupon;
(F) documents of title, policies and certificates of
insurance, securities, chattel paper, other documents or instruments
evidencing or pertaining to (A), (B), (C), (D) and (E) above;
(G) all guaranties, liens on real or personal property,
leases, and other agreements and property granted to Borrower or a Scheduled
Affiliate which in any way secure or relate to (A), (B), (C), (D), (E) and (F)
above, or are acquired for the purpose of securing and enforcing any item
thereof;
(H) (i) all cash held as cash collateral to the extent not
otherwise constituting Collateral, all other cash or property at any time on
deposit with or held by Agent or any Lender for the account of Borrower
(whether for safekeeping, custody, pledge, transmission or otherwise), (ii)
all present or future deposit accounts (whether time or demand, interest or
non-interest bearing) of Borrower with Lender or any other Person including
those to which any such cash may at any time and from time to time be
credited, (iii) all investments and reinvestments (however evidenced) of
amounts from time to time credited to such accounts, and (iv) all interest,
dividends, distributions and other proceeds payable on or with respect to (x)
such investments and reinvestments and (y) such accounts; and
(I) all products and proceeds of (A), (B), (C), (D), (E),
(F), (G) and (H) above (including, but not limited to, all claims to items
referred to in (A), (B), (C), (D), (E), (F), (G) and (H) above) and all claims
of Borrower against third parties (x) for (i) loss of, damage to, or
destruction of, and (ii) payments due or to become due under leases, rentals
and hires of, any or all of (A), (B), (C), (D), (E), (F), (G) and (H) above
and (y) proceeds to Borrower and unearned premiums of Borrower with respect to
policies of insurance in whatever form.
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"Commitment Percentage" of any Lender shall mean the
percentage set forth below such Lender's name on the signature page hereof as
same may be adjusted upon any assignment by a Lender pursuant to Section 15
hereof.
"Commitment Transfer Supplement" shall mean a document in
the form of Exhibit 15 hereto, properly completed and otherwise in form and
substance satisfactory to Agent by which the Purchasing Lender purchases and
assumes a portion of the obligation of Lenders to make Loans under this
Agreement.
"Contract Rate" means an interest rate per annum equal to
the (i) sum of the Alternate Base Rate plus the Applicable Margin with respect
to Alternate Base Rate Loans, (ii) the sum of the LIBO Rate plus the
Applicable Margin with respect to LIBO Rate Loans, as applicable, (iii) the
sum of the Canadian Prime Rate plus the Applicable Margin with respect to
Canadian Loans made to Borrower or (iv) the sum of the U.K. Base Rate plus the
Applicable Margin with respect to Sterling Loans made to Borrower.
"Contract Year" means the twelve month period beginning on
the Closing Date or on the anniversary of the Closing Date in any year.
"Current Assets" at a particular date, means all cash, cash
equivalents, accounts and inventory of Borrower on a Consolidated Basis and
all other items which would, in conformity with GAAP, be included under
current assets on a balance sheet of Borrower on a Consolidated Basis as at
such date; provided, however, that such amounts shall not include (a) any
amounts for any indebtedness owing by Borrower or any Affiliate to Borrower or
another Affiliate, unless such indebtedness arose in connection with the sale
of goods or other property in the ordinary course of business and would
otherwise constitute current assets in conformity with GAAP, (b) any shares of
stock issued by Borrower or any Affiliate to Borrower or another Affiliate,
(c) the cash surrender value of any life insurance policy (d) any assets which
would be classified as intangible assets under GAAP, or (e) any prepaid
expenses.
"Current Liabilities" at a particular date, means all
amounts which would, in conformity with GAAP, be included under current
liabilities on a balance sheet of Borrower as at such date, but in any event
including, without limitation, the amounts of (a) all indebtedness payable on
demand, or, at the option of the Person to whom such indebtedness is owed, not
more than twelve (12) months after such date, (b) any payments in respect of
any indebtedness (whether installment, serial maturity, sinking fund payment
or otherwise) required to be made not more than twelve (12) months after such
date, (c) all reserves in respect of liabilities or indebtedness payable on
demand or, at the option of the Person to whom such indebtedness is owed, not
more than twelve (12) months after such date, the validity of which is
contested at such date, and (d) whether or not in conformity with GAAP (i) all
accruals for federal or other taxes measured by income payable within a twelve
(12) month period and (ii) all Revolving Credit Advances.
"Customer" means and includes the account debtor with
respect to any Receivable or Affiliate Receivable, and/or the prospective
purchaser of goods, services or both with respect to any contract or contract
right, and/or any party who enters into or proposes to enter into any contract
or other arrangement with Borrower or any Scheduled Affiliate, pursuant
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to which Borrower or any Scheduled Affiliate is to deliver any personal
property or perform any services.
"Cycle Billing" means xxxxxxxx made by Borrower or a
Scheduled Affiliate to a Customer on the basis of equal monthly installments,
the first installment to be billed no later than the first month following the
"closing date" for submission of advertisements or the first month following
the "publication date" of such advertisements, as applicable on behalf of such
Customer to the applicable directory, each in an amount equal to between 1/2
and 1/12 of the xxxxxxxx to such Customer with respect to the applicable
directory; provided that Borrower or such Scheduled Affiliate may not change
the billing rate with respect to specific services rendered.
"Default Rate" means a rate equal to two (2%) percent per
annum in excess of the Alternate Base Rate.
"Dilution" means, with respect to any period, the percentage
obtained by dividing (a) the sum of chargebacks plus credit memos issued for
such period as determined by Agent, by (b) the sum of collections,
chargebacks, open deductions and credit memos issued for such period.
"Dir-Ad" shall mean Dir-Ad Inc., a company organized under
the laws of Canada.
"Dispute" means any cause asserted for nonpayment of any
Receivable or Affiliate Receivable, including without limitation, any alleged
defense, counterclaim, offset, dispute or other claim (real or merely
asserted) whether arising from or relating to the sale of goods or rendition
of services or arising from or relating to any other transaction or
occurrence.
"Dollar" and the sign "$" shall mean lawful money of the
United States of America.
"Dollar Equivalent" shall mean, on any date of determination
thereof, the amount of Dollars which could be purchased with the amount of the
relevant Alternate Currency at the spot rate then being offered by the Bank to
its corporate customers with comparable credit status to Borrower at which
Dollars may be exchanged into the applicable Alternate Currency as shall be
determined by Agent.
"Dollar Loans" means Loans denominated and payable in Dollars.
"Domestic Persons" means any Financial Party or any
Subsidiary of any Financial Party (i) which has been formed or incorporated
pursuant to the laws of a state or commonwealth of the United States of
America or (ii) as to which no less than 90% of the value of such party's
assets are located in the United States of America.
"Domestic Working Capital" means Working Capital as
calculated solely with respect to Domestic Persons.
"Eligible Canadian Receivables" shall mean Eligible
Receivables consisting of Canadian Receivables.
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"Eligible Receivables" means and includes each Receivable
and Affiliate Receivable (1) (x) for which BNY performs accounts receivable
management with respect thereto or (y) which is a U.K. Receivable or Canadian
Receivable (but only to the extent such Receivables would otherwise conform
with the applicable eligibility criteria under the U.K. Credit Agreements and
Canadian Credit Agreement, respectively), and (2) which conforms to the
following criteria: (a) the rendition of services has been completed; (b)
services shall not have been rejected or disputed by the Customer and there
shall not have been asserted any offset, defense, counterclaim, or Dispute
with respect to such Receivable or Affiliate Receivable; (c) it continues to
be in full conformity with the representations and warranties made by Borrower
or another Financial Party to Lenders with respect thereto; (d) Agent is, and
continues to be, in the good faith exercise of its reasonable discretion
satisfied with the credit standing of the Customer in relation to the amount
of credit extended; (e) it is documented by an invoice in a form approved by
Agent (evidence of which has been received by Agent or, in Agent's sole
discretion, has been sent to but not yet received by Agent) and shall not be
unpaid more than: (x)(i) sixty (60) days from due date where Borrower is
performing the collection function and (ii) ninety (90) days from due date
where Agent is performing the collection function, (y)(i) ninety (90) days
from invoice date where Borrower is performing the collection function and
(ii) one hundred and twenty (120) days from invoice date where Agent is
performing the collection function; all with respect to regular billing and
(z) three hundred sixty (360) days from the first invoice date with respect to
Cycle Billing; (f) less than 75% of the unpaid amount of invoices due from
such Customer remain unpaid more than ninety (90) days from due date; (g) it
is not evidenced by chattel paper or an instrument of any kind with respect to
or in payment of the Receivable or Affiliate Receivable unless such instrument
is duly endorsed to and in possession of Agent or represents a check in
payment of a Receivable or Affiliate Receivable; (h) if the Customer is not in
the United States, Canada or the United Kingdom, the services which gave rise
to such Receivable or Affiliate Receivable were provided after receipt by
Borrower or any other Financial Party from or on behalf of the Customer of an
irrevocable letter of credit, assigned and delivered to Agent and confirmed by
a financial institution acceptable to Agent and is in form and substance
acceptable to Agent, payable in the full amount of the Receivable or Affiliate
Receivable in Dollars at a place of payment located within the United States;
(i) such Receivable or Affiliate Receivable is not subject to any lien, other
than Permitted liens; (j) it does not arise out of transactions with any
employee, officer, agent, director, stockholder or Affiliate of Borrower or
any other Financial Party; (k) it is payable to Borrower or any other
Financial Party; (l) if the Receivable or Affiliate Receivable arises out of a
sale to any Person to which Borrower or any other Financial Party is indebted,
the amount of such indebtedness, and any anticipated indebtedness, may in
Agent's sole discretion be deducted in determining the face amount of such
Receivable or Affiliate Receivable; (m) it is net of any returns, discounts,
claims, credits and allowances; (n) if the Receivable or Affiliate Receivable
arises out of contracts between Borrower or any other Financial Party and the
United States, any state, or any department, agency or instrumentality of any
of them, Borrower or any other Financial Party has so notified Agent, in
writing, prior to the creation of such Receivable, and, if Agent so requests,
there has been compliance with any governmental notice or approval
requirements, including without limitation, compliance with the Federal
Assignment of Claims Act; (o) it is a good and valid account representing an
undisputed bona fide indebtedness incurred by the Customer therein named, for
a fixed sum as set forth in the invoice relating thereto with respect to work,
labor and/or services rendered by Borrower or any other Financial Party; (p)
(i) such Affiliate Receivable arises out of a sale or rendition of services by
a Financial Party that (x) has executed
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and delivered a Guaranty and Guarantor Security Agreement, (y) is majority
owned or controlled by Xxxxxx XxXxxxxx, Borrower or a Guarantor and (ii) Agent
shall have received evidence, in form and substance satisfactory to Agent,
including, without limitation, a certificate of ownership executed by the
Secretary of Borrower with respect to Xxxxxx XxXxxxxx'x share ownership of
Borrower and each other Financial Party) that Xxxxxx XxXxxxxx, Borrower or the
applicable Guarantor is the majority owner of the applicable Financial Party;
(q) is a Receivable and/or Affiliate Receivable for which BNY is performing
record keeping services pursuant to this Agreement; and (r) is otherwise
satisfactory to Agent as determined in good faith by Agent in the reasonable
exercise of its discretion.
"Eligible U.K. Receivables" shall mean Eligible Receivables
consisting of U.K. Receivables.
"Equipment" means and includes all of Borrower's now owned
or hereafter acquired and owned equipment, machinery and goods (excluding
Inventory), whether or not constituting fixtures, including, without
limitation: plant and office equipment, tools, dies, parts, data processing
equipment, furniture and trade fixtures, trucks, trailers, loaders and other
vehicles and all replacements and substitutions therefore and all accessions
thereto. "Equipment" shall not include that certain Dassault-Breguet Falcon 50
jet aircraft (Reg. No. N22TZ) owned by CVY International, LLC, a wholly-owned
subsidiary of Volando, Inc. (a wholly-owned subsidiary of Borrower).
"Equity Event" shall mean the receipt of cash proceeds by
Borrower resulting from a public offering of the capital stock or debt of any
Financial Party after the date hereof.
"Event of Default" means the occurrence of any of the events
set forth in paragraph 18.
"Existing Ancillary Agreements" shall mean collectively, the
Original ARM Agreement and all other documents, instruments and agreements
executed and delivered in connection therewith.
"Federal Funds Rate" means, 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 for
such day (or if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or if such rate is not
so published for any day which is a Business Day, the average of quotations
for such day on such transactions received by Bank from three Federal funds
brokers of recognized standing selected by Bank.
"Financial Party" and collectively, "Financial Parties"
means Borrower and any Scheduled Affiliate.
"Fiscal Quarter" means each quarterly accounting period of
Borrower during any Fiscal Year.
"Foreign Indebtedness" means Indebtedness (other than
Indebtedness owed to Lenders or their Affiliates) incurred by a Financial
Party which is not a Domestic Person.
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"Foreign Losses" shall mean the aggregate of all monetary
losses whatsoever which any BNY Company may suffer or incur by reason of a
Foreign Subsidiary's failure to observe or perform in full all of their
Foreign Subsidiary Obligations however arising, including but not limited to
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses, fees or disbursements of any kind or nature whatsoever
and/or all liabilities of a BNY Company to a Foreign Subsidiary and/or third
parties arising out of or related to any Foreign Subsidiary Credit Agreements
"Foreign Subsidiary Credit Agreements" shall mean any and
all agreements evidencing Foreign Subsidiary Obligations.
"Foreign Subsidiary Obligations" shall mean all Indebtedness
owing to a BNY Company by any Subsidiary of Borrower which is not a Domestic
Person, including, without limitation, all U.K. Subsidiary Obligations,
Canadian Subsidiary Obligations and Australian Subsidiary Obligations.
"Formula Amount" shall have the meaning set forth in
paragraph 2(b).
"GAAP" means generally accepted accounting principles,
practices and procedures in the United States of America in effect from time
to time.
"General Intangibles" means and includes all of Borrower's
now owned or hereafter acquired general intangibles as said term is defined in
the Uniform Commercial Code in effect in the State of New York including,
without limitation, trademarks, tradenames, tradestyles, trade secrets,
equipment formulation, manufacturing procedures, quality control procedures,
product specifications, patents, patent applications, copyrights,
registrations, contract rights, choses in action, causes of action, corporate
or other business records, inventions, designs, goodwill, claims under
guarantees, licenses, franchises, tax refunds, tax refund claims, computer
programs, computer data bases, computer program flow diagrams, source codes,
object codes, customer lists and all other intangible property of every kind
and nature.
"Guarantor" means individually, each of the Persons listed
on Schedule 1(B) and any other Person who may hereafter guarantee payment or
performance of the whole or any part of the Obligations and "Guarantors" means
collectively all such Persons.
"Guarantor Security Agreements" means collectively, each
Security Agreement executed by a Guarantor in favor of Agent, as same may be
amended, modified, supplemented or ratified from time to time.
"Guaranty Agreements" means collectively, (i) the Amended
and Restated Guaranties and Guaranties described on Exhibit 1(C) which are
executed by each Guarantor in favor of Agent and (ii) such other Guaranties as
shall be executed and delivered hereafter from time to time by a Guarantor.
"Hazardous Substance" means, without limitation, any
flammable explosives, radon, radioactive materials, asbestos, urea
formaldehyde foam insulation, polychlorinated biphenyls, petroleum and
petroleum products, methane, hazardous materials, hazardous wastes,
11
hazardous or toxic substances or related materials as defined in CERCLA, the
Hazardous Materials Transportation Act, as amended (49 U.S.C. Sections 1801,
et seq.), RCRA, Articles 15 and 27 of the New York State Environmental
Conservation Law or any other applicable Environmental Law and in the
regulations adopted pursuant thereto.
"Incipient Event of Default" means any act or event which,
with the giving of notice or passage of time or both, would constitute an
Event of Default.
"Indebtedness" means as to any Person (without duplication):
(a) any indebtedness for borrowed money which such Person
has directly or indirectly created, incurred or assumed; and
(b) any indebtedness, whether or not for borrowed money,
secured by any Lien in respect of property owned by such Person, whether or
not such Person has assumed or become liable for the payment of such
indebtedness; and
(c) any indebtedness, whether or not for borrowed money,
including any capital lease obligation, with respect to which such Person has
become directly or indirectly liable and which represents or has been incurred
to finance the purchase price (or a portion thereof) of any property or
services or business acquired by such Person, whether by purchase,
consolidation, merger or otherwise (excluding accounts payable incurred in the
ordinary course of business, if (i) such accounts payable are not more than
150 days past due or (ii) such accounts payable are more than 150 days past
due, are being contested in good faith, and would not, in accordance with
GAAP, appear as Indebtedness on a balance sheet of such person; and
(d) any indebtedness of any other Person of the character
referred to in subdivision (a), (b) or (c) of this definition with respect to
which the Person whose Debt is being determined has become liable by way of a
guaranty.
"Interest Period" shall have the meaning set forth in
Section 4(c) hereof.
"Inventory" means and includes all of Borrower's now owned
or hereafter acquired goods, merchandise and other personal property, wherever
located, to be furnished under any contract of service or held for sale or
lease, all raw materials, work in process, artwork, finished goods and
materials and supplies (including but not limited to art supplies) of any
kind, nature or description which are or might be used or consumed in
Borrower's business or used in selling or furnishing such goods, merchandise
and other personal property, and all documents of title or other documents
representing them.
"Lender" and "Lenders" means the persons identified as
"Lenders" and listed on the signature pages of this Agreement, together with
their successors and assigns.
"Lender Settlement Date" shall mean the Closing Date and
thereafter Wednesday of each week unless such day is not a Business Day in
which case it shall be the next succeeding Business Day.
"Letters of Credit" shall have the meaning set forth in
Section 2(m).
12
"Letter of Credit Fees" shall have the meaning set forth in
Section 5(b).
"LC Reserve" shall mean an amount at any time equal to the
aggregate face amount of outstanding Letters of Credit.
"LIBO Rate" shall mean, relative to any day for the then
current Interest Period relating to any LIBO Rate Loan, the rate of interest
quoted by the Bank two (2) Business Days prior to the first day of such
Interest Period for the offering by the Bank to prime commercial banks in the
London interbank Eurodollar market of Dollar deposits in immediately available
funds for a period equal to such Interest Period and in an amount equal to the
amount of such LIBO Rate Loan.
"LIBO Rate Loan" shall mean the Loans or any portion thereof
bearing interest at a rate of interest determined by reference to the LIBO
Rate.
"Loan Sale" shall have the meaning set forth in Section
5(b)(iii).
"Loans" means the Revolving Credit Advances (including
Alternate Currency Loans), Letters of Credit and all other extensions of
credit hereunder.
"Matured Funds Rate" means the rate of interest, announced
by BNY from time to time, as the rate applicable to matured funds, such rate
to be adjusted automatically on the effective date of any change in such rate
as announced by BNY.
"Maximum Loan Amount" means at any time, $175,000,000 less
the outstanding balance of Foreign Subsidiary Obligations.
"Media Billing Receivables" means Receivables which require
delivery to the customer of a copy of the advertisement which appears in the
directory publication.
"Minimum Volume Charges" shall have the meaning set forth in
Section 5(e)(ii).
"Net Face Amount" of Receivables or Affiliate Receivables
means the gross face invoice amount thereof, less returns, discounts (the
calculation of which shall be determined by Agent where optional terms are
given), anticipation or any other unilateral deductions taken by Customers,
and credits and allowances to Customers of any nature.
"Obligations" means and includes all Loans, all advances,
debts, liabilities, obligations, covenants and duties owing by Borrower to (a)
all Lenders (other than BNY) direct or indirect, absolute or contingent, due
or to become due, contractual or tortious, liquidated or unliquidated, whether
existing by operation of law or otherwise now existing or hereafter arising
under or as a result of this Agreement and the Ancillary Agreements, together
with all reasonable expenses and reasonable attorneys fees chargeable to
Borrower's account or incurred by a Lender in connection with Borrower's
account whether provided for herein or in any Ancillary Agreement and (b) BNY
(or any corporation that directly or indirectly controls or is controlled by
or is under common control with BNY) of every kind and description (whether or
not evidenced by any note or other instrument and whether or not for the
payment of money or the
13
performance or non-performance of any act), direct or indirect, absolute or
contingent, due or to become due, contractual or tortious, liquidated or
unliquidated, whether existing by operation of law or otherwise now existing
or hereafter arising including, without limitation, any debt, liability or
obligation owing from Borrower to others which BNY may have obtained by
assignment or otherwise and further including, without limitation, all
interest, charges or any other payments Borrower is required to make by law or
otherwise arising under or as a result of this Agreement and the Ancillary
Agreements, together with all reasonable expenses and reasonable attorneys'
fees chargeable to Borrower's account or incurred by Lender in connection with
Borrower's account whether provided for herein or in any Ancillary Agreement.
"Obligations" shall also include all Canadian Subsidiary Obligations and U.K.
Subsidiary Obligations.
"Original Owner" means Xxxxxx XxXxxxxx.
"Participation Year" shall mean the twelve month period
commencing as of the first day of the month in which the first Loan Sale
occurs.
"Partial Year" shall have the meaning set forth in Section
5(e)(ii).
"Past Due Payables" shall mean all accounts payable of
Borrower and Scheduled Affiliates that (i) remain unpaid beyond their
respective originally granted terms or (ii) have begun to accrue interest.
"Permitted Liens" means (i) liens of carriers, warehousemen,
mechanics and materialmen incurred in the ordinary course of business securing
sums not overdue; (ii) liens incurred in the ordinary course of business in
connection with workmen's compensation, unemployment insurance or other forms
of governmental insurance or benefits, relating to employees, securing sums
(a) not overdue or (b) being diligently contested in good faith provided that
adequate reserves with respect thereto are maintained on the books of Borrower
in conformity with GAAP, (iii) liens in favor of Agent, (iv) liens for taxes
(a) not yet due or (b) being diligently contested in good faith, provided that
adequate reserves with respect thereto are maintained on the books of Borrower
in conformity with GAAP, (v) liens placed on equipment or on any fixed assets
within 180 days of their acquisition to secure a portion of the purchase price
thereof provided (x) any such lien shall not encumber any other property of
Borrower and (y) the aggregate amount of indebtedness secured by such liens
incurred as a result of such purchases during any fiscal year shall not exceed
the amount provided for in Section 12(p) hereof and (vi) liens specified on
Schedule 1(A) hereto.
"Permitted Overadvances" shall have the meaning set forth in
Section 2(c).
"Permitted Period" shall have the meaning provided in
Section 2(c) hereof.
"Person" means an individual, partnership, corporation,
trust or unincorporated organization, or a government or agency or political
subdivision thereof.
"Prime Rate" means the prime commercial lending rate of Bank
as publicly announced in New York, New York to be in effect from time to time,
such rate to be adjusted automatically, without notice, on the effective date
of any change in such rate. This rate of
14
interest is determined from time to time and is neither tied to any external
rate of interest or index nor does it necessarily reflect the lowest rate of
interest actually charged to any particular class or category of customers.
"Purchasing Lender" shall have the meaning set forth in
Section 15 hereof.
"Receivables" means and includes all of Borrower's now owned
or hereafter acquired accounts and contract rights (including Affiliate
Receivables acquired by Borrower), instruments, insurance proceeds, documents,
chattel paper, letters of credit and Borrower's rights to receive payment
thereunder, any and all rights to the payment or receipt of money or other
forms of consideration of any kind at any time now or hereafter owing or to be
owing to Borrower, all proceeds thereof and all files in which a Financial
Party has any interest whatsoever containing information identifying or
pertaining to any of Borrower's Receivables, together with all of Borrower's
rights to any merchandise which is represented thereby, and all Borrower's
right, title, security and guaranties with respect to each Receivable,
including, without limitation, all rights of stoppage in transit, replevin and
reclamation and all rights as an unpaid vendor.
"Receivables Advance Rate" shall have the meaning set forth
in the definition of Receivables Availability.
"Receivables Availability" means the amount of Revolving
Credit Advances against Eligible Receivables Lenders may from time to time
during the term of this Agreement make available to Borrower up to 90%
("Receivables Advance Rate") of the net face amount of the Eligible
Receivables and Unbilled Media Billing Receivables; provided, however, that
the maximum amount of Revolving Credit Advances outstanding at any time
against Unbilled Media Billing Receivables shall not exceed $10,000,000.
"Reports" shall have the meaning set forth in Section 14.
"Required Lenders" shall mean Lenders holding at least
fifty-one percent (51%) in aggregate principal amount of the Loans outstanding
at that time.
"Retained Goods" shall have the meaning set forth in Section
8(h).
"Revolving Credit Advances" shall mean all Loans made
hereunder other than Letters of Credit.
"Scheduled Affiliates" shall mean those Persons which are
listed on Schedule 1(B) and which are Guarantors hereunder as well as those
Scheduled Affiliates that hereafter become Guarantors and Scheduled Affiliates
hereunder upon written notice to Agent and execution of all necessary
documentation by such Scheduled Affiliate.
"Secondary Equity Event" shall mean the receipt of cash
proceeds by Original Owner and/or Borrower in an amount not less than
$50,000,000 resulting from a secondary public offering of the capital stock of
Borrower.
15
"Settlement Date" means (i) with respect to Canadian
Receivables, three (3) Business Days after the day on which the applicable
Canadian Receivable is actually collected by Agent, (ii) three (3) Business
Days after (a) with respect to U.K. Receivables, the date of receipt of the
funds in the bank account of BNY Financial Limited in the case of a U.K.
Receivable paid in cash or by bank credit transfer or (b) the date of
collection of such U.K. Receivables from the drawee or acceptor thereof, in
the case of a U.K. Receivable paid by check or other instrument and (iii) with
respect to all other Receivables and Affiliate Receivables, two (2) Business
Days after the day on which the applicable Receivable or Affiliate Receivable
(to the extent payable to a Scheduled Affiliated domiciled in the United
States of America) is actually collected by Agent.
"Sterling" and the sign "(pound)" mean the lawful currency
of the United Kingdom.
"Sterling Loans" means Loans denominated and payable in
Sterling.
"Stock Pledge Agreement" shall have the meaning set forth in
Section 12(z) hereof.
"Subordinated Debt" means any debt subordinated to Lenders
upon terms and conditions satisfactory to Agent in its sole discretion and
pursuant to agreements in form and substance satisfactory to Agent and its
counsel in all respects.
"Subsidiary" of any Person means a corporation or other
entity 50% or more of whose shares of stock or other ownership interests
having ordinary voting power (other than stock or other ownership interests
having such power only by reason of the happening of a contingency) to elect a
majority of the directors of such corporation, or other Persons performing
similar functions for such entity, are owned, directly or indirectly, by such
Person.
"Tangible Net Worth" at a particular date means (a) the
aggregate amount of all assets of Borrower on a Consolidated Basis as may be
properly classified as such in accordance with GAAP consistently applied
(including such assets owned on the Closing Date as are properly classified as
intangible assets under GAAP), less (b) the aggregate amount of all
liabilities of Borrower on a Consolidated Basis. Notwithstanding the
foregoing, for purposes of calculating Tangible Net Worth, the maximum amount
of Intangibles may not exceed the greater of (i) $65,000,000 or (ii) 40% of
the amount of all of the assets of Borrower on a Consolidated Basis and any
excess shall not be included in the calculation of Tangible Net Worth.
"Term" means the Closing Date through and including June 26,
2001, subject to acceleration upon the occurrence of an Event of Default
hereunder or other termination hereunder.
"Total Liabilities" at a particular date means all
Indebtedness of Borrower on a Consolidated Basis as at such date.
"TMP Canada" shall mean TMP Worldwide Ltd., an Ontario
corporation.
16
"U.K. Base Rate" shall mean the base commercial lending rate
of Lloyds Bank Place., as publicly announced in London, England to be in
effect from time to time, such rate to be adjusted automatically, without
notice, on the effective date of any change in such rate.
"U.K. Collateral" shall mean substantially all of the assets
(both real and personal) of Borrower and each of its Subsidiaries located in
the United Kingdom and described in the U.K. Security Documents.
"U.K. Credit Agreements" shall mean the Invoice Discounting
Agreements between each of the U.K. Subsidiaries and BNY UK pursuant to which
BNY UK makes Sterling Loan accommodations to the U.K. Subsidiaries and all
other agreements executed in connection therewith.
"U.K. Guaranty" shall mean the guaranty issued by Borrower
or a Guarantor of the obligations of the U.K. Subsidiaries to BNY UK under the
U.K. Credit Agreement.
"U.K. Receivables" means and includes all of each U.K.
Subsidiary's now owned or hereafter acquired accounts and contract rights,
instruments, insurance proceeds, documents, chattel paper, letters of credit
and each U.K. Subsidiary's rights to receive payment thereunder, any and all
rights to the payment or receipt of money or other forms of consideration of
any kind at any time now or hereafter owing or to be owing to a U.K.
Subsidiary, all proceeds thereof and all files in which any U.K. Subsidiary
has any interest whatsoever containing information identifying or pertaining
to any of a U.K. Subsidiary's Receivables, together with all of such U.K.
Subsidiary's rights to any merchandise which is represented thereby, and all
of such U.K. Subsidiary's right, title, security and guaranties with respect
to each U.K. Receivable, including, without limitation, all rights of stoppage
in transit, replevin and reclamation and all rights as an unpaid vendor.
"U.K. Security Documents" shall mean each of the debentures
executed by each U.K. Subsidiary in favor of Agent pursuant to which BNY UK is
granted a Lien upon the U.K. Collateral as security for the U.K.
Subsidiary Obligations.
"U.K. Subsidiaries shall mean Xxxxxx Xxxxxx, TMP UK,
Lonsdale Advertising Services Limited and MSL International Limited.
"U.K. Subsidiary Obligations" shall have the meaning given
to the term "Obligations" under the U.K. Credit Agreement.
"Volume" shall have the meaning set forth in Section 5(e)(ii).
"Unbilled Media Billing Receivables" shall mean Media
Billing Receivables which constitute Eligible Receivables except that they
have not been documented by an invoice.
"Week" shall mean the time period commencing with a
Wednesday and ending on the following Tuesday.
"Working Capital" at a particular date means the excess, if
any, of Current Assets over Current Liabilities at such date.
17
(B) Accounting Terms. Any accounting terms used in this
Agreement which are not specifically defined shall have the meanings
customarily given them in accordance with GAAP.
(C) Other Terms. All other terms used in this Agreement and
defined in the Uniform Commercial Code as adopted in the State of New York,
shall have the meaning given therein unless otherwise defined herein.
2. Accounts Receivables Management; Loans; Letters of
Credit.
(a) BNY for itself and not in its capacity as Agent shall
perform accounts receivable management and record keeping services for
Borrower with respect to all Receivables and Affiliate Receivables (excluding
U.K. Receivables but including Receivables of any U.S. Subsidiary of any U.K.
Subsidiary). The procedure manual BNY has delivered to Borrower describes
BNY's current practices and procedures regarding its accounts receivable
management and record keeping services. BNY reserves the right to vary such
practices and procedures from time to time in its sole discretion. BNY's
liability to Borrower for any alleged failure on BNY's part to provide
adequate accounts receivable management and record keeping services shall be
expressly limited to a refund of commissions paid by Borrower during the
period of such alleged failure and BNY shall have no liability of any kind
whatsoever for consequential or other damages or penalties based upon any such
alleged failure on BNY's part unless BNY shall have significantly and
materially adversely departed from its published practices and procedures. In
such event, Borrower may, upon one hundred twenty (120) days prior written
notice, terminate BNY's right and obligation to provide collection services
regarding Borrower's accounts receivable provided that such termination shall
not affect BNY's right to continue to conduct accounts receivable management
for Borrower provided, however, that Borrower shall continue to pay BNY the
fees provided for in Section 5(e) less an amount equal to the actual decrease
in BNY's costs and expenses as a result of the termination of its obligation
to perform collection functions with respect to the Receivables and/or
Affiliate Receivables. Notwithstanding anything to the contrary contained
herein, so long as no Event of Default shall have occurred hereunder, in the
event that Borrower shall have (i) acquired Receivables and/or Affiliate
Receivables or (ii) entered into transactions with new Customers which give
rise to Receivables or Affiliate Receivables and, in either case, the
Receivables or Affiliate Receivables have an average face amount of $1,000 or
less, Borrower may elect not to have BNY perform accounts receivable
management and/or record keeping services with respect to such Receivables or
Affiliate Receivables, provided that Borrower shall remit the proceeds of such
Receivables or Affiliate Receivables to a blocked account maintained by
Borrower in accordance with Section 22 hereof. Upon an Event of Default and
during the continuance thereof, BNY for itself and not in its capacity as
Agent may, in its sole discretion, perform the accounts receivable management
and record keeping services described herein with respect to U.K. Receivables
as described herein.
(b) Subject to the terms and conditions set forth herein and
in the Ancillary Agreements, each Lender, severally and not jointly, shall
make Revolving Credit Advances to Borrower from time to time during the Term
which, in aggregate amounts outstanding at any time equal such Lender's
Commitment Percentage of the lesser of (x) the Maximum Loan
18
Amount less the aggregate amount of outstanding Letters of Credit or (y) an
amount equal to the sum of:
(i) Receivables Availability, minus
(ii) the aggregate amount of outstanding Letters of
Credit, minus
(iii) such reserves as Agent may reasonably deem
proper and necessary from time to
time including, without limitation, the LC Reserve.
The sum of 2(b)(i), minus (ii) minus (iii) shall be referred
to as the "Formula Amount".
Revolving Credit Advances may be (i) Dollar Loans in which
case they may be made as one or more (A) Alternate Base Rate Loans, (B) LIBO
Rate Loans or (C) any combination thereof or (ii) in Agent's discretion,
Alternate Currency Loans, in which case they shall be made as one or more
Alternate Currency Base Rate Loans, provided, however, in no event shall the
aggregate outstanding principal balance of (A) Sterling Loans to Borrower
(determined on the basis of the Dollar Equivalent of each Sterling Loan)
exceed $50,000,000 less the outstanding balance of U.K. Subsidiary
Obligations, (B) Canadian Loans to Borrower (determined on the basis of the
Dollar Equivalent of each Canadian Loan) exceed $10,000,000 less the
outstanding balance of Canadian Subsidiary Obligations, (C) Australian Loans
to Borrower (determined on the basis of the Dollar Equivalent of each
Australian Loan) exceed $15,000,000 less the outstanding balance of Australian
Subsidiary Obligations. In no event shall Alternate Currency Loans plus U.K.
Subsidiary Obligations plus Canadian Subsidiary Obligations plus Australian
Subsidiary Obligations (each determined on the basis of the Dollar Equivalent
thereof) exceed a Dollar Equivalent amount equal to 50% of the outstanding
amount of Revolving Credit Advances or such amount as Agent in its sole
discretion deems acceptable.
(c) Notwithstanding the limitations set forth above, Lenders
retain the right to lend Borrower from time to time such amounts in excess of
such limitations as Lenders may determine in their sole discretion. The term
"Permitted Overadvances" means (i) involuntary overadvances that may result
from time to time due to the fact that any borrowing formulas set forth in
this Agreement were unintentionally exceeded (whether at the time of any Loan
or at the time of the issuance of any Letter of Credit or otherwise) for any
reason (other than Agent's gross negligence or willful misconduct), including
Collateral believed to be eligible in fact being or becoming ineligible or the
return of uncollected checks or other items applied to the reduction of the
Loans or other Obligations, as well as overadvances made by Agent without
Lenders' consent for up to two weeks after discovering the unintentional
overadvance, provided that Agent does not during that period voluntarily
increase the amount by which the borrowing formulas had been exceeded as of
the start of that period, and (ii) (X) voluntary overadvances made by Agent in
its sole discretion which shall not cause the Obligations to exceed the
borrowing formulas by the lesser of (1) 10% of the amount permitted to be
borrowed under Section 2(b) or (2) $10,000,000 at any one time outstanding,
and (Y) voluntary overadvances made by BNY in its sole discretion ("BNY
Overadvances") which shall (A) be designated by BNY as a BNY Overadvance, (B)
be due and payable to BNY on demand (subject to the last sentence of this
Section (c)), (C) not exceed $7,500,000 at any time outstanding, (D) be
secured by the Collateral on a basis junior to all other Obligations of
Borrower hereunder and (E) not
19
result in the then aggregate Revolving Credit Advances outstanding exceeding
the Maximum Loan Amount. Any such Permitted Overadvances in excess of
$2,500,000 (other than with respect to a BNY Overadvance) may remain
outstanding for no more than any sixty (60) day period. To the extent any
Permitted Overadvances are made (other than with respect to a BNY
Overadvance), each Lender shall bear its Commitment Percentage thereof. BNY
shall not demand repayment of a BNY Overadvance, unless after giving effect to
such repayment the then aggregate outstanding principal balance of outstanding
Loans (including any Permitted Overadvances) is less than the lesser of (A)
the Maximum Loan Amount or (B) the Formula Amount.
(d) Reserved.
(e) Borrower acknowledges that the good faith exercise of
Agent's discretionary rights hereunder may result during the Term in one or
more increases or decreases in the Receivables Advance Rate and Borrower
hereby consents to any such increases or decreases which may limit or restrict
advances requested by Borrower, including, without limitation, any decreases
in the Receivables Advance Rate imposed by Agent in the event Borrower shall
have terminated BNY's obligation to perform accounts receivable management for
Borrower pursuant to Section 2(a) hereof.
(f) On the date that any interest, fees, costs, charges or
commissions to Agent or any Lender are due, Borrower shall thereby be deemed
to have requested, and Agent is hereby authorized at its discretion to make
and charge to Borrower's account, a Revolving Credit Advance to Borrower as of
such date in an amount equal to such unpaid interest, fees, costs, charges or
commissions.
(g) Any sums expended by Agent or any Lender due to
Borrower's failure to perform or comply with its obligations under this
Agreement, including but not limited to the payment of taxes, insurance
premiums or leasehold obligations, shall be charged to Borrower's account as a
Revolving Credit Advance and added to the Obligations.
(h) Agent will account to Borrower monthly with a statement
of all Loans and other advances, charges and payments made pursuant to this
Agreement, and such account rendered by Agent shall be deemed final, binding
and conclusive unless Agent is notified by Borrower in writing to the contrary
within thirty (30) days of the date each account was rendered specifying the
item or items to which objection is made.
(i) During the Term, Borrower may borrow, prepay and
reborrow Revolving Credit Advances, all in accordance with the terms and
conditions hereof.
(j) The aggregate balance of Loans outstanding at any time
shall not exceed the Maximum Loan Amount. The aggregate balance of Revolving
Credit Advances outstanding at any time shall not exceed the Formula Amount.
(k) Subject to the terms and conditions hereof, Agent shall
(a) issue or cause the issuance of Letters of Credit ("Letters of Credit")
provided, however, that Agent will not be required to issue or cause to be
issued any Letters of Credit to the extent that the face amount of such
Letters of Credit would then cause the sum of (i) the outstanding Revolving
Credit
20
Advances plus (ii) outstanding Letters of Credit (with the requested Letter of
Credit being deemed to be outstanding for purposes of this calculation) to
exceed the lesser of (x) the Maximum Loan Amount or (y) the Formula Amount
which is calculated as if the requested Letter of Credit had been issued. The
maximum amount of outstanding Letters of Credit hereunder and under the U.K.
Credit Agreement and the Canadian Credit Agreement shall not exceed
$10,000,000 (or the Alternate Currency Equivalent) in the aggregate at any
time. All disbursements or payments related to Letters of Credit shall be
deemed to be Revolving Credit Advances and shall bear interest at the
applicable Contract Rate; Letters of Credit that have not been drawn upon
shall not bear interest. Letters of Credit shall be subject to the terms and
conditions set forth in the Letter of Credit and Security Agreement attached
hereto as Exhibit 2(l).
(l) Borrower may request Agent to issue or cause the
issuance of a Letter of Credit by delivering to Agent, Agent's standard form
of Letter of Credit and Security Agreement together with Bank's standard form
of Letter of Credit Application (collectively, the "Letter of Credit
Application"), completed to the satisfaction of Agent; and, such other
certificates, documents and other papers and information as Agent may
reasonably request.
(m) Each Letter of Credit shall, among other things, (i)
provide for the payment of sight drafts when presented for honor thereunder in
accordance with the terms thereof and when accompanied by the documents
described therein and (ii) have an expiry date not later than twelve (12)
months after such Letter of Credit's date of issuance and in no event later
than the last day of the Term. Each Letter of Credit Application and each
Letter of Credit shall be subject to the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, and any amendments or revision thereof and, to the extent
not inconsistent therewith, the laws of the State of New York.
(n) In connection with the issuance of any Letter of Credit
Borrower shall indemnify, save and hold Agent and each Lender harmless from
any loss, cost, expense, or liability, including, without limitation, payments
made by Agent and any Lender, and expenses and reasonable attorneys' fees
incurred by Agent or any Lender arising out of, or in connection with, any
Letter of Credit to be issued or created for Borrower. Borrower shall be bound
by Agent's or any issuing or accepting bank's regulations and good faith
interpretations of any Letter of Credit issued or created for Borrower's
account, although this interpretation may be different from Borrower's own;
and neither Agent nor any Lender, nor the bank which opened the Letter of
Credit, nor any of its correspondents shall be liable for any error,
negligence, or mistakes, whether of omission or commission, in following
Borrower's instructions or those contained in any Letter of Credit or of any
modifications, amendments or supplements thereto or in issuing or paying any
Letter of Credit, except for Agent's or any Lender's or such correspondents'
willful misconduct.
(o) Borrower shall authorize and direct any bank which
issues a Letter of Credit at Agent's direction to name Borrower as the
"Account Party" therein and to deliver to Agent all instruments, documents,
and other writings and property received by the bank pursuant to the Letter of
Credit and to accept and rely upon Agent's instructions and agreements with
respect to all matters arising in connection with the Letter of Credit, the
application therefor or any acceptance therefor.
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(p) In connection with all Letters of Credit issued or
caused to be issued by Agent under this Agreement, Borrower hereby appoints
Agent, or its designee, as its attorney, with full power and authority (i) to
sign and/or endorse Borrower's name upon any warehouse or other receipts,
letter of credit applications and acceptances; (ii) to sign Borrower's name on
bills of lading; (iii) to clear Inventory through the United States of America
Customs Department ("Customs") in the name of Borrower or Agent or Agent's
designee, and to sign and deliver to Customs officials powers of attorney in
the name of Borrower for such purpose; and (iv) to complete in Borrower's name
or Agent's, or in the name of Agent's designee, any order, sale or
transaction, obtain the necessary documents in connection therewith, and
collect the proceeds thereof. Neither Agent nor its attorneys will be liable
for any acts or omissions nor for any error of judgment or mistakes of fact or
law, except for Agent's or its attorney's willful misconduct. This power,
being coupled with an interest, is irrevocable as long as any Letters of
Credit remain outstanding.
(q) Each Lender shall to the extent of the percentage amount
equal to the product of such Lender's Commitment Percentage times the
aggregate amount of all unreimbursed reimbursement obligations with respect to
the Letters of Credit be deemed to have irrevocably purchased an undivided
participation in each such unreimbursed reimbursement obligation. In the event
that at the time a disbursement is made the unpaid balance of Revolving Credit
Advances exceeds or would exceed, with the making of such disbursement, the
lesser of the Maximum Loan Amount or the Formula Amount, and such disbursement
is not reimbursed by Borrower within two (2) Business Days, Agent shall
promptly notify each Lender and upon Agent's demand each Lender shall pay to
Agent such Lender's proportionate share of such unreimbursed disbursement
together with such Lender's proportionate share of Agent's unreimbursed costs
and expenses relating to such unreimbursed disbursement. Upon receipt by Agent
of a repayment from Borrower of any amount disbursed by Agent for which Agent
had already been reimbursed by the Lenders, Agent shall deliver to each of the
Lenders that Lender's pro rata share of such repayment. Each Lender's
participation commitment shall continue until the last to occur of any of the
following events: (A) Agent ceases to be obligated to issue Letters of Credit
hereunder; (B) no Letter of Credit issued hereunder remains outstanding and
uncancelled or (C) all Persons (other than Borrower) have been fully
reimbursed for all payments made under or relating to Letters of Credit.
(r) Borrower shall use the proceeds of the Loans to provide
for its and its Subsidiaries' working capital needs and general corporate
purposes.
3. Repayment of Loans.
(a) Subject to the provisions of the last three paragraphs
of Section 2(b) and the provisions of Section 2(c) hereof, Borrower shall be
required to (i) make a mandatory prepayment hereunder at any time that the
aggregate outstanding principal balance of the Loans made by Lenders to
Borrower hereunder is in excess of the lesser of the (x) Maximum Loan Amount
or (y) Formula Amount in an amount equal to such excess, and (ii) repay on the
expiration of the Term (x) the then aggregate outstanding principal balance of
Revolving Credit Advances made by any Lender to Borrower hereunder together
with accrued and unpaid interest, fees, charges and commissions and (y) all
other amounts owed any Lender under this Agreement and the Ancillary
Agreements.
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(b) Subject to Section 2(c) hereof with respect to BNY
Overadvances, each payment (including each prepayment) by Borrower on account
of the principal of and interest on the Revolving Credit Advances, shall be
applied to the Revolving Credit Advances pro rata according to the Commitment
Percentages of the Lenders. Except as expressly provided herein, all payments
(including prepayments) to be made by Borrower on account of principal,
interest and fees shall be made without set-off or counterclaim and shall be
made to Agent on behalf of the Lenders, in each case on or prior to 1:00 P.M.,
New York time, in Dollars, with respect to Dollar Loans and in the applicable
Alternate Currency or the Dollar Equivalent with respect to Alternate Currency
Loans and in immediately available funds.
(c) Unless Agent shall have been notified by telephone,
confirmed in writing, by any Lender that such Lender will not make the amount
which would constitute its Commitment Percentage of the Loans available to
Agent, Agent may (but shall not be obligated to) assume that such Lender shall
make such amount available to Agent and, in reliance upon such assumption,
make available to Borrower a corresponding amount. Agent will promptly notify
Borrower of its receipt of any such notice from a Lender. If such amount is
made available to Agent on a date after a Lender Settlement Date, such Lender
shall pay to Agent on demand an amount equal to the product of (i) the daily
average federal funds rate (computed on the basis of a year of 360 days)
during such period as quoted by Agent, times (ii) such amount, times (iii) the
number of days from and including such Lender Settlement Date to the date on
which such amount becomes immediately available to Agent. A certificate of
Agent submitted to any Lender with respect to any amounts owing under this
paragraph (e) shall be conclusive, in the absence of manifest error. If such
amount is not in fact made available to Agent by such Lender within three (3)
Business Days after such Lender Settlement Date, Agent shall be entitled to
recover such an amount, with interest thereon at the rate per annum then
applicable to Revolving Credit Advances hereunder, on demand from Borrower;
provided, however, that Agent's right to such recovery shall not prejudice or
otherwise adversely affect Borrower's rights (if any) against such Lender.
(d) If on any date that the Dollar Equivalent is required to
be calculated pursuant to Section 35 the aggregate amount of Loans shall
exceed the Formula Amount, Borrower shall prepay the Loans in an aggregate
principal amount such that immediately after giving effect thereto, the
aggregate amount of Loans shall not exceed the Formula Amount. In addition, if
on any date that the Dollar Equivalent is required to be calculated pursuant
to Section 35, the outstanding principal balance of (i) Alternate Currency
Loans (including Sterling Loans and Canadian Loans) (determined on the basis
of the Dollar Equivalent thereof) shall exceed a Dollar Equivalent amount
equal to fifty percent (50%) of the outstanding amount of Revolving Credit
Advances, (ii) Sterling Loans (determined on the basis of the Dollar
Equivalent thereof) shall exceed $50,000,000, (iii) Canadian Loans (determined
on the basis of the Dollar Equivalent thereof) shall exceed $10,000,000 or
(iv) Australian Loans (determined on the basis of the Dollar Equivalent
thereof) shall exceed $15,000,000, Borrower shall prepay such Alternate
Currency Loans in an aggregate principal amount such that immediately after
giving effect thereto, the outstanding principal balance of the Alternate
Currency Loans, Sterling Loans and Canadian Loans (determined on the basis of
the Dollar Equivalent thereof) shall not exceed the limits set forth in
subsections (i), (ii), (iii) and (iv) above. Agent may increase each of the
limits set forth in subsections (i), (ii), (iii) and (iv) above in the
exercise of its sole discretion provided that at the time of such increase and
after giving effect to any additional Alternate Currency Loans, the
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outstanding balance of Alternate Currency Loans does not exceed a Dollar
Equivalent amount equal to fifty percent (50%) of the outstanding amount of
Revolving Credit Advances.
4. Procedure for Revolving Credit Advances.
(a) Borrower may, by telephonic notice (or at Agent's
request by written notice) to Agent ("Borrowing Notice"), request a borrowing
of Revolving Credit Advances prior to 1:00 P.M. New York time (i) on the
Business Day of its request to incur, on that day, a Dollar Loan and (ii) at
least one (1) Business Day prior to the date of its request to incur an
Alternate Currency Loan. The Borrowing Notice shall specify (i) the date of
the proposed borrowing (which shall be a Business Day), (ii) that portion of
the Revolving Credit Advances then being requested which are to be (A) Dollar
Loans and, if so, whether such borrowing is to consist of one or more
Alternate Base Rate Loans, LIBO Rate Loans or a combination thereof or (B) as
Alternate Currency Loans and, if so, whether such borrowing is to consist of a
Sterling Loan, Canadian Loan, an Alternate Currency Loan other than a Sterling
Loan or a Canadian Loan or a combination thereof and (iii) the amount to be
borrowed.
(b) Alternate Currency Loans shall be made at Agent's sole
discretion and, notwithstanding the provisions of (a) above, (i) any request
for an Alternate Currency Loan not constituting either a Sterling Loan, a
Canadian Loan or an Australian Loan shall be made upon three (3) days advance
written notice to Agent and Lenders, (ii) Borrower and Agent may establish an
alternative procedure in the United Kingdom for the requesting and making of
Sterling Loans and (iii) Agent shall not be obligated to accept Borrower's
request for (a) Sterling Loan at any time that the U.K. Subsidiaries shall
have the right to request an advance under the U.K. Credit Agreement or (b) a
Canadian Loan at any time that the Canadian Subsidiaries shall have the right
to request an advance under the Canadian Credit Agreement or (c) if
applicable, an Australian Loan at any time that the Australian Subsidiaries
shall have the right to request an advance under the Australian Facility. All
Revolving Credit Advances shall be disbursed in the currency in which such
Loan is to be made from whichever office or other place Agent may designate
from time to time by notice to Borrower and, together with any and all other
Obligations of Borrower to Lenders, shall be charged to Borrower's account on
Agent's books. The proceeds of each Revolving Credit Advance made by the
Lenders shall be made available to Borrower on the day so requested. Any and
all Obligations due and owing hereunder may be charged to Borrower's account
and shall constitute Revolving Credit Advances.
(c) Notwithstanding the provisions of (a) above, in the
event Borrower desires to obtain a LIBO Rate Loan, it shall give Agent at
least three (3) Business Days' prior written notice; specifying (i) the date
of the proposed borrowing (which shall be a Business Day), (ii) the type of
borrowing and the amount to be borrowed, which amount on the date of such Loan
shall be an integral multiple of $500,000, and (iii) the duration of the first
Interest Period therefor. "Interest Periods" for LIBO Rate Loans shall be for
one, two or three months. No LIBO Rate Loan shall be made available to
Borrower during the continuance of a Default or an Event of Default.
(d) Each Interest Period of a LIBO Rate Loan shall commence
on the date such LIBO Rate Loan is made and shall end on such date as Borrower
may elect as set forth in (c)(iii) above provided that:
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(i) any Interest Period which would otherwise end
on a day which is not a Business Day shall be the next preceding or succeeding
Business Day as is the Bank's custom in the market to which such LIBO Rate
Loan relates;
(ii) no Interest Period shall end after the last
day of the Term; and
(iii) any Interest Period which begins on a day for
which there is no numerically corresponding day in the calendar month during
which such Interest Period is to end, shall (subject to clause (i) above) end
on the last day of such calendar month.
Borrower shall elect the initial Interest Period applicable
to a LIBO Rate Loan by its notice of borrowing given to Agent pursuant to
Section 4(a) or by its notice of conversion given to Agent pursuant to Section
4(e), as the case may be. Borrower shall elect the duration of each succeeding
Interest Period by giving irrevocable written notice to Agent of such duration
not less than three (3) Business Days prior to the last day of the then
current Interest Period applicable to such LIBO Rate Loan. If Agent does not
receive timely notice of the Interest Period elected by Borrower, Borrower
shall be deemed to have elected to convert to an Alternate Base Rate Loan
subject to Section 4(e) hereinbelow.
(e) Provided that no Event of Default shall have occurred
and be continuing, Borrower may, on the last Business Day of the then current
Interest Period applicable to any outstanding LIBO Rate Loan, or Alternate
Base Rate Loan, convert any such loan into a loan of another type in the same
aggregate principal amount provided that any conversion of a LIBO Rate Loan
shall be made only on the last Business Day of the then current Interest
Period applicable to such LIBO Rate Loan. If Borrower desires to convert a
loan, it shall give Agent not less than three (3) Business Days' prior written
notice to convert from an Alternate Base Rate Loan to a LIBO Rate Loan or one
(1) Business Day's prior written notice to convert from a LIBO Rate Loan to an
Alternate Base Rate Loan, specifying the date of such conversion, the loans to
be converted and if the conversion is from an Alternate Base Rate Loan to any
other type of loan, the duration of the first Interest Period therefor. After
giving effect to each such conversion, there shall not be outstanding more
than seven (7) LIBO Rate Loans, in the aggregate.
(f) At its option and upon three (3) Business Days'
prior written notice, Borrower may prepay the LIBO Rate Loans in whole at any
time, with accrued interest on the principal being prepaid to the date of such
repayment. In the event that any prepayment of a LIBO Rate Loan is required or
permitted on a date other than the last Business Day of the then current
Interest Period with respect thereto, Borrower shall indemnify Agent and
Lenders therefor in accordance with Section 4(g) hereof. A certificate as to
any additional amounts payable pursuant to the foregoing sentence submitted by
Agent or any Lender to Borrower shall be conclusive absent manifest error.
(g) Borrower shall indemnify Agent and Lenders and
hold Agent and Lenders harmless from and against any and all losses or
expenses that Agent and Lenders may sustain or incur as a consequence of any
prepayment, conversion of or any default by Borrower in the payment of the
principal of or interest on any LIBO Rate Loan or failure by Borrower to
complete a borrowing of, a prepayment of or conversion of or to a LIBO Rate
Loan after notice
25
thereof has been given, including (but not limited to) any interest payable by
Agent or Lenders to lenders of funds obtained by it in order to make or
maintain its LIBO Rate Loans hereunder.
5. Interest; Fees; Commissions.
(a) Interest.
(i) Except as modified by paragraph 5(a)(iii)
below, interest on Revolving Credit Advances shall be paid to Agent for the
benefit of the Lenders in arrears on the last day of each month with respect
to Alternate Base Rate Loans and at the end of each Interest Period with
respect to LIBO Rate Loans. Interest charges shall be computed on the actual
principal of Revolving Credit Advances outstanding during the month (the
"Monthly Advances") at a rate per annum equal to the applicable Contract Rate.
Whenever subsequent to the date of this Agreement, the Alternate Base Rate is
increased or decreased, the applicable Contract Rate for Alternate Base Rate
Loans shall be similarly changed without notice or demand of any kind by an
amount equal to the amount of such change in the Alternate Base Rate during
the time such change or changes remain in effect.
(ii) Interest shall be computed on the basis of
actual days elapsed over a 360-day year.
(iii) Upon the occurrence and during the
continuance of an Event of Default, at Agent's option interest shall be
payable at the Default Rate.
(iv) Notwithstanding the foregoing, in no event
shall interest exceed the maximum rate permitted under any applicable law or
regulation, and if any provision of this Agreement or an Ancillary Agreement
is in contravention of any such law or regulation, such provision shall be
deemed amended to provide for interest at said maximum rate and any excess
amount shall either be applied, at Lender's option, to the outstanding Loans
in such order as Lender shall determine or refunded by Lender to Borrower.
(v) Borrower shall pay principal, interest and all
other amounts payable hereunder, or under any Ancillary Agreement, without any
deduction whatsoever, including, but not limited to, any deduction for any
set-off or counterclaim.
(vi) The Applicable Margin shall be (a) minus one
percent (-1.0%) with respect to Alternate Base Rate Loans, (b) one and one
half percent (1.5%) with respect to LIBO Rate Loans, (c) zero percent (0%)
with respect to Canadian Loans and (d) one and one half percent (1.5%) with
respect to Sterling Loans.
(b) Fees.
(i) Unused Line Fee. In the event the average
closing daily unpaid balances of all Revolving Credit Advances (which, for
these purposes shall include the aggregate face amount of all outstanding
Letters of Credit) hereunder during any calendar month is less than
$175,000,000, Borrower shall pay to Agent, for the ratable benefit of Lenders,
a fee at a rate per annum equal to one-eighth of one percent (1/8%) of the
amount by which $175,000,000 exceeds such average daily unpaid balance. Such
fee shall be calculated on the basis of a year of
26
360 days and actual days elapsed, and shall be charged to Borrower's account
on the first day of each month with respect to the prior month.
(ii) Agent's Fee. In addition to the fee described
in subsection (b)(i) above, in the event the average closing daily unpaid
balances of all Revolving Credit Advances (which, for these purposes shall
include the aggregate face amount of all outstanding Letters of Credit and
Foreign Subsidiary Obligations) hereunder during any calendar month is less
than $175,000,000, Borrower shall pay to Agent, for its account only, a fee at
a rate per annum equal to one-eighth of one percent (1/8%) of the amount by
which BNY's Commitment Percentage of $175,000,000 exceeds BNY's Commitment
Percentage of the average daily unpaid balance. Such fee shall be calculated
on the basis of a year of 360 days and actual days elapsed, and shall be
charged to Borrower's account on the first day of each month with respect to
the prior month and shall not be subject to proration.
(iii) Intentionally Omitted.
(iv) U.K. Collateral Monitoring Fee. For conducting
collateral monitoring in the United Kingdom, Borrower shall pay Agent a
collateral monitoring fee equal to (pound)7,500 per month commencing on
October 1, 1997 and on the first day of each month thereafter.
(v) Collateral Agent Fee. Borrower shall pay Agent
an annual collateral agent fee of $15,000 following the sale, assignment or
transfer of any of the Obligations ("Loan Sale") to any other financial
institutions which shall be payable in full on the first day of the month
following the month in which such Loan Sale occurs and on each 12 month
anniversary date of such day thereafter during the term hereof. Such fee shall
be deemed earned in full on the date when same is due and payable hereunder
and shall not be subject to rebate or proration upon termination of this
Agreement for any reason.
(vi) Letter of Credit Fees. Borrower shall pay
Agent (i) (A) for issuing or causing the issuance of a standby Letter of
Credit, a fee computed at a rate per annum of one and one-half percent (1.50%)
on the outstanding amount thereof from time to time and (B) for issuing or
causing the issuance of a Letter of Credit that is not a standby Letter of
Credit, a fee equal to 1/4% of the original and each increase in the face
amount thereof for each 30 days or part thereof of its term (the fees set
forth in (A) and (B) referred to as "Letter of Credit Fees") and (ii) Bank's
other customary charges payable in connection with Letters of Credit as in
effect from time to time (which charges shall be furnished to Borrower by
Agent upon request). Such fees and charges shall be payable (i) in the case of
any Letter of Credit, on its opening (ii) in the case of a standby Letter of
Credit, (A) monthly thereafter in advance and (B) upon each increase in the
outstanding amount thereof and (iii) in the case of any Letter of Credit that
is not a standby Letter of Credit, at the time of each increase in face amount
thereof. Any such charge in effect at the time of a particular transaction
shall be the charge for that transaction, notwithstanding any subsequent
change in Bank's prevailing charges for that type of transaction. All Letter
of Credit Fees payable hereunder shall be deemed earned in full on the date
when the same are due and payable hereunder and shall not be subject to rebate
or proration upon the termination of this Agreement for any reason. For
purposes of calculating any fees payable hereunder any amount which is
denominated in a currency other than Dollars shall be valued based on the
Dollar Equivalent.
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(vii) Permitted Overadvance Fee. For each "Excess
Permitted Overadvance" a fee equal to the product of (a) $5,000 multiplied by
(b) the number of days in such month during which Excess Permitted
Overadvances were outstanding may, in Agent's sole discretion, be charged.
Such fee shall be paid on the last day of each month. For purposes of this
clause (vi) an Excess Permitted Overadvance shall be deemed to exist on any
day (other than during any two periods of five consecutive days in each month
when Borrower may have outstanding Permitted Overadvances of not more than
$5,000,000) when Borrower's Permitted Overadvances (other than BNY
Overadvances) exceed $1,000,000. Notwithstanding the foregoing, no such Fee
shall be charged with respect to one Excess Permitted Overadvance per month
which is eliminated within three Business Days of its occurrence. If such
Excess Permitted Overadvance is not eliminated within such period, any fee
which is charged shall be calculated for each day during that month on which
an Excess Permitted Overadvance occurred.
(c) Increased Costs. In the event that any applicable law,
treaty or governmental regulation, or any change therein or in the
interpretation or application thereof, or compliance by any Lender (for
purposes of this Section 5(c), the term "Lender" shall include any Lender and
any corporation or bank controlling Lender) with any request or directive
(whether or not having the force of law) from any central bank or other
financial, monetary or other authority, shall:
(i) subject any Lender to any tax of any kind
whatsoever with respect to this Agreement or change the basis of taxation of
payments to any Lender of principal, fees, interest or any other amount
payable hereunder or under any Ancillary Agreements (except for changes in the
rate of tax on the overall net income of any Lender by the jurisdiction in
which it maintains its principal office);
(ii) impose, modify or hold applicable any reserve,
special deposit, assessment or similar requirement against assets held by, or
deposits in or for the account of, advances or loans by, or other credit
extended by, any office of any Lender, including (without limitation) pursuant
to Regulation D of the Board of Governors of the Federal Reserve System; or
(iii) impose on any Lender any other condition with
respect to this Agreement or any Ancillary Agreements;
and the result of any of the foregoing is to increase the cost to any Lender
of making, renewing or maintaining its Loans hereunder by an amount that any
Lender deems to be material or to reduce the amount of any payment (whether of
principal, interest or otherwise) in respect of any of the Loans by an amount
that any Lender deems to be material, then, in any case Borrower shall
promptly pay such Lender, upon its demand, such additional amount as will
compensate such Lender for such additional cost or such reduction, as the case
may be. Agent shall certify the amount of such additional cost or reduced
amount to Borrower, and such certification shall be conclusive absent manifest
error.
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(d) Capital Adequacy.
(i) In the event that Agent shall have determined
that any applicable law, rule, regulation or guideline regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof,
or compliance by Lender (for purposes of this Section 5(d), the term "Lender"
shall include any Lender and any corporation or bank controlling any Lender)
with any request or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on any
Lender's capital as a consequence of its obligations hereunder to a level
below that which such Lender could have achieved but for such adoption, change
or compliance (taking into consideration such Lender's policies with respect
to capital adequacy) by an amount deemed by such Lender to be material, then,
from time to time, Borrower shall pay upon demand to such Lender such
additional amount or amounts as will compensate such Lender for such
reduction. In determining such amount or amounts, such Lender may use any
reasonable averaging or attribution methods. The protection of this Section
shall be available to such Lender regardless of any possible contention of
invalidity or inapplicability with respect to the applicable law, regulation
or condition.
(ii) A certificate of Agent setting forth such
amount or amounts as shall be necessary to compensate Lender with respect to
Section 5(d) hereof when delivered to Borrower shall be conclusive absent
manifest error.
(e) Commission.
(i) In consideration of the accounts receivable
management and bookkeeping services to be provided by BNY hereunder, Borrower
shall pay to BNY monthly, for its own account and not in its capacity as Agent
hereunder, on the fifteenth day of each month, a commission at the rate of (x)
.225% of the gross face amount of each invoice assigned to BNY evidencing the
first $400,000,000 in aggregate Receivables and Affiliate Receivables
purchased hereunder in any Calendar Year, (y) .175% of the gross face amount
of each invoice assigned to BNY evidencing Receivables and Affiliate
Receivables in excess of $400,000,000 but no more than $500,000,000 in
aggregate Receivables and Affiliate Receivables for any Calendar Year and (z)
.125% of the gross face amount of each invoice assigned to BNY evidencing
Receivables (including, at BNY's discretion, upon the occurrence and during
the continuance of an Event of Default, U.K. Receivables) and Affiliate
Receivables in excess of $500,000,000 in aggregate Receivables and Affiliate
Receivables for any Calendar Year. In the event that Borrower acquires a
majority of the capital stock or all or substantially all of the assets of
another Person not theretofore a Scheduled Affiliate and the sales to invoice
ratio with respect to the Receivables and/or Affiliate Receivables acquired in
connection with such Transaction shall increase BNY's costs of managing the
Receivables and Affiliate Receivables hereunder, Borrower shall negotiate, in
good faith, an increase in the commissions payable by Borrower under this
Section 5(e) with respect to the Receivables and/or Affiliate Receivables so
acquired. If Borrower and BNY shall not agree on the increased fee, Borrower
(rather than BNY) shall thereafter be obligated to perform any collection
function with respect to the Receivables and/or Affiliate Receivables so
acquired and BNY shall only be obligated to perform record keeping services
with respect to the Receivables and/or Affiliate Receivables; provided,
however,
29
Borrower shall in that event pay BNY .15% of the gross face amount of
each invoice assigned to BNY evidencing the Receivables and/or Affiliate
Receivables so acquired. Further, in the event that at the end of any month
the average xxxxxxxx per customer have decreased by more than 25% in the
aggregate from the average xxxxxxxx per Customer in existence on March 31,
1994, Borrower shall negotiate, in good faith, an increase in the commissions
payable by Borrower under this Section 5(e). If Borrower and BNY shall not
agree on the increased fee, BNY shall have the right to terminate its
obligation to perform any collection function and remain responsible only for
record keeping services, for which Borrower shall in the event pay BNY a fee
equal to .15% of the gross face amount of each invoice assigned to BNY
evidencing the Receivables and/or Affiliate Receivables so serviced.
(ii) Notwithstanding anything contained in the
foregoing subsection (i) to the contrary, the aggregate amount of Receivables
and Affiliate Receivables with respect to which Borrower shall be obligated to
pay commissions hereunder and which Borrower shall be obligated to assign to
Agent hereunder ("Volume") shall not be less than the Annual Minimum for each
year during the Term (a "Contract Year") or that part of the Contract Year
during which this Agreement is in effect in the event of termination prior to
the end of a Contract Year (a "Partial Year"). In the event the Volume during
any Contract Year or Partial Year, as applicable, is less than the Annual
Minimum, then BNY shall charge Borrower's account in an amount equal to the
amount by which the commission on the Annual Minimum exceeds the commission on
the Volume for the Contract Year or Partial Year, as applicable. The foregoing
amounts which BNY shall charge to Borrower's account are hereinafter referred
to as "Minimum Volume Charges." BNY shall compute the Minimum Volume Charges
on a calendar quarterly basis and charge Borrower's account for the same on
the first day of the month following the end of such calendar quarter or on
the first day of the month following the effective date of termination of this
Agreement in the case of a Partial Year.
(f) Matured Funds. On the last day of each month during the
Term, BNY shall credit Borrower's account with interest at the Matured Funds
Rate in effect during such month on the average daily balance during such
month of any amounts payable by BNY to Borrower hereunder which are not drawn
by Borrower on the Settlement Date.
(g) Withholding Taxes; Non-US Transferees.
(i) All sums payable by any Financial Party under
this Agreement shall be paid in full without set off or counterclaim and free
and clear of and without any deduction or withholding for or on account of,
any present or future withholding or similar taxes.
(ii) If any Financial Party shall be required by
law to make any such deduction or withholding from any payment for the account
of Lender, then such Financial Party will ensure that such deduction or
withholding does not exceed the minimum legal liability therefor and will
forthwith pay to Agent or any Lender such additional amount as will result in
the receipt by Agent or such Lender of the full amount which would otherwise
have been receivable hereunder had no such deduction or withholding been made.
(iii) If a Financial Party pays any additional
amount referred to in sub-clause (ii) above ("tax payment") to Agent or any
Lender pursuant to the clause and Agent or such Lender, in its absolute
discretion, effectively obtains a refund of that tax payment ("tax
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credit") which it is able to identify as being attributable to that tax
payment, then if it can, do so without prejudicing the retention of that tax
credit, Agent or such Lender shall reimburse such Financial Party such
proportion of that tax credit as it determines will leave it (after such
reimbursement) in no better or worse position than if that tax payment had not
been required. Agent or such Lender shall have complete discretion as to (a)
whether to claim any tax credit (and, if so, the extent, order and manner of
such claim) and (b) whether any amount is due from it hereunder (and, if so,
the amount and time of payment). Neither Agent nor any Lender shall be obliged
to disclose any information regarding its tax affairs and computations.
(iv) Each Lender (or Transferee) that is not a
citizen or resident of the United States of America, a corporation,
partnership or other entity created or organized in or under the laws of the
United States of America (or any jurisdiction thereof), or any estate or trust
that is subject to federal income taxation regardless of the source of its
income (a "Non-U.S. Lender") shall deliver to Borrower and Agent (or, in the
case of a Participant, to the Lender from which the related participation
shall have been purchased) two copies of either U.S. Internal Revenue Service
Form 1001 or Form 4224, or, in the case of a Non-U.S. Lender claiming
exemption from U.S. federal withholding tax under Section 871 (h) or 881(c) of
the Code with respect to payments of "portfolio interest", a Form W-8, or any
subsequent versions thereof or successors thereto (and, if such Non-U.S.
Lender delivers a Form W-8, an annual certificate representing that such
Non-U.S. Lender is not a "bank" for purposes of Section 881(c) of the Code, is
not a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of
the Code) of Borrower and is not a controlled foreign corporation related to
Borrower (within the meaning of Section 864(d)(4) of the Code)), properly
completed and duly executed by such Non-U.S. Lender claiming complete
exemption from U.S. federal withholding tax on all payments by Borrower under
this Agreement and the other Ancillary Agreements. Such forms shall be
delivered by each Non-U.S. Lender on or before the date it becomes a party to
this Agreement) or, in the case of any Participant, on or before the date such
Participant purchases the related participation). In addition, each Non-U.S.
Lender shall deliver such forms promptly upon the obsolescence or invalidity
of any form previously delivered by such Non-U.S. Lender. Each Non-U.S. Lender
shall promptly notify Borrower at any time it determines that it is no longer
in a position to provide any previously delivered certificate to Borrower (or
any other form of certification adopted by the U.S. taxing authorities for
such purpose).
(v) In the event that Agent shall have determined
that any applicable tax law, treaty or governmental regulation, or any change
therein or in the interpretation or application thereof, or compliance by any
Lender necessitates an amendment, modification or supplement to this
Agreement, Borrower will cooperate with Agent in completing any such
amendment, modification or supplement.
5A. (a) Conditions to Initial Loans. Notwithstanding any
other provisions contained in this Agreement, the agreement of Agent and
Lenders to make the initial Loans requested to be made on the Closing Date is
subject to the satisfaction, or waiver by Agent, immediately prior to or
concurrently with the making of such Loans, of the following conditions
precedent:
(1) Loan Agreement. Agent shall have received
counterparts of this Agreement signed by each of the parties hereto.
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(2) Closing Documents. Agent shall have received,
in form and substance satisfactory to Agent, executed Guaranties, U.K.
Guaranties, Guaranty Security Agreements, Stock Pledge Agreements, U.K.
Security Documents, Canadian Security Documents and all other Ancillary
Agreements (to the extent not currently existing), each in form and substance
satisfactory to Lenders;
(3) Filings, Registrations and Recordings. Each
document (including, without limitation, any Uniform Commercial Code financing
statement) required by this Agreement, any Ancillary Agreement or under law or
reasonably requested by Agent to be filed, registered or recorded in order to
create, in favor of Agent, a perfected security interest in or lien upon the
Collateral shall have been properly filed, registered or recorded in each
jurisdiction in which the filing, registration or recordation thereof is so
required or requested, and Agent shall have received an acknowledgment copy,
or other evidence satisfactory to it, of each such filing, registration or
recordation and satisfactory evidence of the payment of any necessary fee, tax
or expense relating thereto;
(4) Corporate Proceedings of Borrower. Agent shall
have received a copy of the resolutions in form and substance reasonably
satisfactory to Agent, authorizing (i) the execution, delivery and performance
of this Agreement and any related agreements (collectively the "Documents")
and (ii) the granting by Borrower and Guarantors of the security interests in
and liens upon the Collateral in each case certified by the Secretary or an
Assistant Secretary of Borrower or the applicable Guarantor as of the Closing
Date; and, such certificate shall state that the resolutions thereby certified
have not been amended, modified, revoked or rescinded as of the date of such
certificate;
(5) Incumbency Certificates of Borrower. Agent
shall have received a certificate of the Secretary or an Assistant Secretary
of Borrower and each Guarantor, dated the Closing Date, as to the incumbency
and signature of the officers of Borrower and such Guarantor executing this
Agreement or any Ancillary Agreement, any certificate or other documents to be
delivered by it pursuant hereto, together with evidence of the incumbency of
such Secretary or Assistant Secretary;
(6) Certificates. Agent shall have received a copy
of the Articles or Certificate of Incorporation of Borrower and each
Guarantor, and all amendments thereto, certified by the Secretary of State or
other appropriate official of its jurisdiction of incorporation together with
copies of the By-Laws of Borrower and such Guarantor;
(7) Good Standing Certificates. Agent shall have
received good standing certificates for Borrower and Guarantors dated not more
than 10 days prior to the Closing Date, issued by the Secretary of State or
other appropriate official of Borrower's and each Guarantor's jurisdiction of
incorporation and each jurisdiction where the conduct of Borrower's and each
Guarantor's business activities or the ownership of its properties
necessitates qualification;
(8) Legal Opinion. Agent shall have received the
executed legal opinions of Xxxxxxx Leisure Xxxxxx & Irvine, counsel to
Borrower, each in form and substance satisfactory to Agent which shall cover
such matters incident to the transactions contemplated by
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this Agreement and related agreements as Agent may reasonably require and
Borrower hereby authorizes and directs such counsel to deliver such opinions
to Agent and the Lenders;
(9) No Litigation. (i) No litigation, investigation
or proceeding before or by any arbitrator or governmental authority shall be
continuing or threatened against Borrower or against the officers or directors
of Borrower (A) in connection with the Documents or any of the transactions
contemplated thereby and which, in the reasonable opinion of Agent, is deemed
material or (B) which if adversely determined, could, in the reasonable
opinion of Agent, have a Material Adverse Effect; and (ii) no injunction,
writ, restraining order or other order of any nature materially adverse to
Borrower or the conduct of its business or inconsistent with the due
consummation of the transactions contemplated by this Agreement shall have
been issued by any governmental authority;
(10) Fees. Agent shall have received all fees
(including all accrued fees and reasonable fees and expenses of counsel)
payable to Agent and the Lenders on or prior to the Closing Date Agent shall
have the option to charge Borrower's account for such fees.
(11) Payment Instructions. Agent shall have
received written instructions from Borrower directing the application of
proceeds of the initial Loans made pursuant to this Agreement;
(12) Consents. Agent shall have received any and
all governmental and third party consents necessary to permit the effectuation
of the transactions contemplated by this Agreement, the Ancillary Agreements
and the Xxxxxx Xxxxxx Acquisition Documentation; and, Agent shall have
received such consents and waivers of such third parties as might assert
claims with respect to the Collateral (including the Foreign Collateral), as
Agent and its counsel shall deem necessary;
(13) No Adverse Material Change. (i) Since June 30,
1997, there shall not have occurred (x) any material adverse change in the
condition, financial or otherwise, operations, properties or prospects of
Borrower or any Guarantor, (y) no material damage or destruction to any of the
Collateral nor any material depreciation in the value thereof and (z) no
event, condition or state of facts which could have a Material Adverse Effect
and (ii) no representations made or information supplied to Agent or any
Lender shall have been proven to be inaccurate or misleading in any material
respect;
(14) Closing Certificate. Agent shall have received
a closing certificate signed by the Chief Financial Officer of Borrower dated
as of the date hereof, stating that (i) all representations and warranties set
forth in this Agreement and the Other Documents are true and correct on and as
of such date, (ii) Borrower is on such date in compliance with all the terms
and provisions set forth in this Agreement and the other Documents and (iii)
on such date no Default or Event of Default has occurred or is continuing;
(15) Warranties and Representations. All of the
warranties and representations contained in this Agreement or any Ancillary
Agreement shall be true and correct in all material respects on and as of the
date of such Revolving Credit Advance on issuance of Letters of Credit as if
made on such date and each request for a Revolving Credit Advance or Letter of
Credit shall constitute an affirmation by Borrower that such warranties and
33
representations are then true and correct in all material respects in each
case, except to the extent that such warranties and representations either
relate to an earlier date or shall be untrue or incorrect solely as a result
of occurrences permitted under this Agreement or are consented to by Agent or
the Required Lenders in writing.
(16) No Default. No Event of Default shall have
occurred or will result from such Revolving Credit Advance or issuance of
Letter of Credit and no Incipient Event of Default shall have occurred which
may become an Event of Default or will result from such Revolving Credit
Advance or issuance of Letter of Credit.
(17) Amendment to Canadian Security Documents.
TMP's Canadian Subsidiaries and BNY Canada shall have entered into a Second
Amendment to Accounts Receivable Management and Security Agreement and each of
the Canadian Subsidiaries shall have executed guaranties of the obligations
and such hypothecs, agreements and documents deemed appropriate by Agent and
its counsel.
(18) Stock Pledge Agreements. Borrower shall have
delivered a pledge of shares, pursuant to stock pledge agreements satisfactory
to Agent, of one hundred percent (100%) of the issued and outstanding shares
of TMP U.K. Borrower shall use its best efforts, consistent with applicable
tax law, to provide a pledge of one hundred percent (100%) the issued and
outstanding shares of TMP Canada and 3055078 Canada Inc.
(19) Other. All corporate and other proceedings,
and all documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement shall be satisfactory in form and
substance to Agent, the Lenders and their counsel.
(b) Condition to All Loans. Notwithstanding any other
provisions contained in this Agreement, the making of each Revolving Credit
Advance and issuance of a Letter of Credit provided for in this Agreement
shall be conditioned upon the satisfaction of the matters set forth in this
Section 5A(b), and each request by Borrower for a Revolving Credit Advance or
Letter of Credit shall constitute a representation to Agent and the Lenders
that each such condition set forth below has been met or satisfied.
(1) Warranties and Representations. All of the
warranties and representations contained in this Agreement or any Ancillary
Agreement shall be true and correct in all material respects on and as of the
date of such Revolving Credit Advance or issuance of Letters of Credit as if
made on such date and each request for a Revolving Credit Advance or Letter of
Credit shall constitute an affirmation by Borrower that such warranties and
representations are then true and correct in all material respects in each
case, except to the extent that such warranties and representations either
relate to an earlier date or shall be untrue or incorrect solely as a result
of occurrences permitted under this Agreement or are consented to by Agent or
the Required Lenders in writing.
(2) No Event of Default. No Event of Default shall
have occurred or will result from such Revolving Credit Advance or issuance of
Letter of Credit and no Incipient Event of Default shall have occurred which
may become an Event of Default or will result from such Revolving Credit
Advance or issuance of Letter of Credit.
34
6. Security Interest.
(a) To secure the prompt payment to Lenders of the
Obligations, Borrower hereby acknowledges, confirms and agrees that Agent has
and shall continue to have for the benefit of the Lenders a continuing
security interest in and upon all Collateral heretofore granted to Agent
pursuant to the Original ARM Agreement and, to the extent not otherwise
granted to or held by Agent, hereby assigns, pledges and grants to Agent, for
the benefit of the Lenders, a continuing security interest in and to the
Collateral, whether now owned or existing or hereafter acquired or arising and
wheresoever located (whether or not the same is subject to Article 9 of the
Uniform Commercial Code). All of Borrower's ledger sheets, files, records,
books of account, business papers and documents relating to the Collateral
shall, until delivered to or removed by Agent, be kept by Borrower in trust
for Agent until all Obligations have been paid in full. Each confirmatory
assignment schedule or other form of assignment hereafter executed by Borrower
shall be deemed to include the foregoing grant, whether or not the same
appears therein.
(b) Agent may file one or more financing statements
disclosing Agent's security interest in the Collateral without Borrower's
signature appearing thereon or Agent may sign on Borrower's behalf as provided
in paragraph 13 hereof. The parties agree that a carbon, photographic or other
reproduction of this Agreement shall be sufficient as a financing statement.
If any Receivable or Affiliate Receivable becomes evidenced by a promissory
note or any other instrument for the payment of money, Borrower will
immediately deliver such instrument to Agent appropriately endorsed. Borrower
will execute any and all documents reasonably requested by Agent to Borrower
to effectuate the assignment of any and all tax refunds payable to Borrower
including, without limitation, powers of attorney.
7. Representations Concerning the Collateral. Borrower
represents and warrants (each of which such representations and warranties
shall be deemed repeated upon the making of each request for a Revolving
Credit Advance and made as of the time of each and every Revolving Credit
Advance hereunder):
(a) all the Collateral (i) is owned by Borrower free and
clear of all claims, liens, security interests and encumbrances (including
without limitation any claims of infringement) except (A) those in Agent's
favor and (B) Permitted Liens and (ii) is not subject to any agreement
prohibiting the granting of a security interest or requiring notice of or
consent to the granting of a security interest;
(b) all Receivables and Affiliate Receivables (i) represent
complete bona fide transactions which require no further act under any
circumstances on Borrower's part to make such Receivables or Affiliate
Receivable payable by Customers other than the acts which must reasonably and
promptly in the ordinary course be taken by Borrower in connection with Cycle
Xxxxxxxx and Media Xxxxxxxx Receivables with respect to billing and delivery
of invoices, (ii) to the best of Borrower's knowledge, are not subject to any
present, future or contingent Disputes and (iii) do not represent xxxx and
hold sales, consignment sales, guaranteed sales, sale or return or other
similar understandings or obligations of any Scheduled Affiliate or Subsidiary
of Borrower.
35
(c) that Borrower and the Scheduled Affiliates ("Obligated
Party") are solely responsible for payment of all advertising purchased by the
Obligated Party from such media source and that the media source has no
recourse against the Customer of an Obligated Party with respect to any such
payment.
8. Covenants Concerning the Collateral. During the Term,
Borrower covenants that it shall:
(a) not dispose of any of the Collateral whether by sale,
lease or otherwise except for the disposition or transfer of obsolete and
worn-out Equipment in the ordinary course of business during any fiscal year
and provided the proceeds of any such dispositions which exceed $250,000 in
the aggregate during any fiscal year (x) are used or committed to be used to
acquire replacement Equipment which is subject to Agent's first priority
security interest (subject to Permitted Liens as described in clause (vi) of
the definition thereof) and which has a fair market value not less than the
Equipment which was disposed or transferred or (y) to the extent not so used
or committed to be used, the proceeds of which are remitted to Agent in
reduction of the Obligations;
(b) not encumber, mortgage, pledge, assign or grant any
security interest in any Collateral or any of Borrower's other assets to
anyone other than Agent except (i) Permitted Liens and (ii) as set forth on
Schedule 1(A) attached hereto and made a part hereof.
(c) place notations upon Borrower's books of account and any
quarterly or annual financial statement prepared by Borrower to disclose
Agent's security interest in the Collateral;
(d) defend the Collateral against the claims and demands of
all parties.
(e) keep and maintain the Equipment in good operating
condition, except for ordinary wear and tear, and shall make all necessary
repairs and replacements thereof so that the value and operating efficiency
shall at all times be maintained and preserved. Borrower shall not permit any
such items to become a fixture to real estate or accessions to other personal
property;
(f) not extend the payment terms of any Receivable without
prompt notice thereof to Agent;
(g) perform all other steps requested by Lender to create
and maintain in Agent's favor a valid perfected first security interest in all
Collateral; and
(h) Borrower shall promptly upon request provide Agent with
duplicate originals of all credits which Borrower issues to its Customers and
immediately notify Agent of any merchandise returns or Disputes. Borrower
shall settle all Disputes at no cost or expense to Lenders. Should Agent so
elect, upon the occurrence of any Event of Default, Agent may at any time in
its discretion (i) withdraw Borrower's authority to issue credits to its
Customers without Agent's prior written consent; (ii) litigate Disputes or
settle them directly with Customers on terms acceptable to Agent; or (iii)
direct Borrower to set aside and identify as Agent's property any returned or
repossessed merchandise or other goods which by sale resulted in Receivables
or Affiliate Receivables theretofore assigned to Agent ("Retained Goods"). All
Retained Goods
36
(and the proceeds thereof) shall be (A) held by Borrower in trust for Agent as
Agent's property, (B) subject to Agent's security interest hereunder and (C)
disposed of only in accordance with Agent's express written instructions.
9. Collection and Maintenance of Collateral and Records.
Agent may at any time verify Receivables or Affiliate Receivables utilizing an
audit control company or any other agent of Agent. Agent will endeavor to
conduct such verifications without disclosing its relationship with Borrower
and shall have no liability to Borrower in the event of such disclosure except
as a direct result of Agent's gross (not mere) negligence or willful
misconduct. Agent or Agent's designee may notify Customers, at any time at
Agent's sole discretion, of Agent's security interest in Receivables or
Affiliate Receivables, collect them directly and charge the collection costs
and expenses to Borrower's account, but, unless and until Agent does so or
gives Borrower other instructions, Borrower shall instruct all of its
Customers to make payments on account of Receivables or Affiliate Receivables
to an account under Agent's dominion and control at such bank as Agent may
designate, as provided by the terms of Section 23. To the extent Borrower
receives any payments on account of Receivables or Affiliate Receivables, it
shall hold such payments for Agent's benefit in trust as Agent's trustee and
immediately deliver them to Agent in their original form with all necessary
endorsements or, as directed by Agent, deposit such payments as directed by
Agent pursuant to Section 22 hereof. Agent will credit (conditional upon final
collection) all such payments to Borrower's account on the Settlement Date.
Promptly after the creation of any Receivables or Affiliate Receivables,
Borrower shall provide Agent with schedules describing all Receivables or
Affiliate Receivables created or acquired by Borrower and shall execute and
deliver confirmatory written assignments of such Receivables or Affiliate
Receivables to Agent, but Borrower's failure to execute and deliver such
schedules or written confirmatory assignments of such Receivables or Affiliate
Receivables shall not affect or limit Agent's security interest or other
rights in and to the Receivables or Affiliate Receivables. Notwithstanding the
foregoing, Borrower shall deliver to Agent (at a location in the United
Kingdom to be identified in the applicable U.K. Credit Agreement) each day as
and for the prior day, a Borrowing Base Certificate with respect to U.K
Receivables updated to reflect the most recent sales and collections of
Borrower and U.K. Subsidiaries with respect to U.K. Receivables. Borrower
shall furnish at Agent's request, copies of contracts, invoices or the
equivalent, any original shipping and delivery receipts for all merchandise
sold or services rendered including, without limitation, copies of all "tear
sheets" (i.e., copies of all advertisements placed for Customers) and such
other documents and information as Agent may require. All of Borrower's
invoices shall bear the terms stated on the applicable customer order, as
submitted to Agent, and no change from the original terms of such Customer
order shall be made without the prior written consent of Agent. Borrower shall
provide Agent on a monthly (within ten (10) days after the end of each month),
or more frequent basis, as requested by Agent, a summary report of Borrower's
current Inventory, unbilled Receivables, Receivables subject to Cycle Billing,
Media Billing Receivables and accounts payable reports, certified as true and
accurate by Borrower's President or Chief Financial Officer, as well as an
aged trial balance of Borrower's existing accounts payable. Borrower shall
provide Agent, as requested by Agent, such other schedules, documents and/or
information regarding the Collateral as Agent may require.
10. Inspections. At all times during normal business hours,
Agent shall have the right to (a) visit and inspect Borrower's properties and
the Collateral, (b) inspect, audit and make extracts from Borrower's relevant
books and records, including, but not limited to,
37
management letters prepared by independent accountants, and (c) discuss with
Borrower's principal officers, and independent accountants, Borrower's
business, assets, liabilities, financial condition, results of operations and
business prospects. Borrower will deliver to Agent any instrument necessary
for Agent to obtain records from any service bureau maintaining records for
Borrower.
11. Financial Information. The Financial Parties shall
provide Lenders (a) as soon as available, but in any event within ninety (90)
days after the end of each fiscal year of the Financial Parties (one hundred
five (105) days with respect to those Subsidiaries in which Borrower does not
own more that 50% of its issued shares) and, a balance sheet as at the end of
such fiscal year and the related statements of income, retained earnings and
changes in cash flow for such fiscal year with respect to (1) Borrower and its
Subsidiaries on a consolidated and consolidating basis, (2) Scheduled
Affiliates (without duplication) on a combining and combined basis, setting
forth in comparative form the figures as at the end of and for the previous
fiscal year with respect to the Financial Parties on a similar basis, which
shall have been reported on by independent certified public accountants who
shall be satisfactory to Agent and shall be accompanied by an unqualified
audit report issued by such independent certified public accountants provided,
that, with respect to Scheduled Affiliates, an audit report shall be required
only with respect to a Scheduled Affiliate (exclusive of the reporting Persons
described in (1) (2) and (4) above) which has assets, as reflected on its then
most current balance sheet having a value in excess of $10,000,000; (b) as
soon as available, but in any event within forty five (45) days after the
close of each quarter, the balance sheet as at the end of such quarter and the
related statements of income, retained earnings and changes in cash flow for
such quarter with respect to (1) Borrower and its Subsidiaries on a
consolidated basis, (2) Scheduled Affiliates (without duplication) on a
consolidating basis, which have been internally prepared by the Chief
Financial Officer for each Financial Party. All financial statements required
under (a) and (b) above shall be prepared in accordance with GAAP, subject to
year-end adjustments in the case of quarterly statements. Together with the
financial statements furnished pursuant to (a) above Borrower shall deliver a
certificate of Borrower's certified public accountants addressed to Agent
stating that (i) they have caused this Agreement and the Ancillary Agreements
to be reviewed and (ii) in making the examination necessary for the issuance
of such financial statements, nothing has come to their attention to lead them
to believe that any Event of Default or Incipient Event of Default exists and,
in particular, they have no knowledge of any Event of Default or Incipient
Event of Default or, if such is not the case, specifying such Event of Default
or Incipient Event of Default and its nature, when it occurred and whether it
is continuing. At the times the financial statements are furnished pursuant to
(a) and (b) above and at the end of each month during the Term, a certificate
of Borrower's Chief Financial Officer shall be delivered to Agent stating that
to the best knowledge of such officer no Event of Default or Incipient Event
of Default exists, or, if such is not the case, specifying such Event of
Default or Incipient Event of Default and its nature, when it occurred,
whether it is continuing and the steps being taken by Borrower with respect to
such event. If any internally prepared financial information, including that
required under this paragraph, is unsatisfactory in any manner to Agent, Agent
may request that Borrower's independent certified public accountants review
same. In addition, Borrower shall provide Agent with such other reports and
documents as shall be reasonably requested including, but not limited to,
reports to stockholders, any documents filed with any governmental agencies or
stock exchanges and any management letters received by Borrower from its
accountants.
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In addition to the foregoing financial statements, each
Financial Party shall furnish Agent prior to the beginning of each fiscal year
commencing with fiscal year 1997, a month by month projected operating budget
and cash flow for such fiscal year (including an income statement for each
month and a balance sheet as at the end of the last month in each fiscal
quarter), such projections to be accompanied by a certificate signed by
Borrower's President or Chief Financial Officer to the effect that such
projections have been prepared on the basis of sound financial planning
practice consistent with past budgets and financial statements and that such
officer has no reason to question the reasonableness of any material
assumptions on which such projections were prepared.
12. Additional Representations, Warranties and Covenants.
Borrower represents and warrants (each of which such representations and
warranties shall be deemed repeated upon the making of a request for a
Revolving Credit Advance and made as of the time of each Revolving Credit
Advance made hereunder), and covenants that:
(a) Borrower is a corporation duly organized and validly
existing under the laws of the State of Delaware and duly qualified and in
good standing in every other state or jurisdiction in which the nature of
Borrower's business requires such qualification;
(b) the execution, delivery and performance of this
Agreement and the Ancillary Agreements (i) have been duly authorized, (ii) are
not in contravention of Borrower's certificate of incorporation, by-laws or of
any indenture, agreement or undertaking to which Borrower is a party or by
which Borrower is bound and (iii) are within Borrower's corporate powers;
(c) this Agreement and the Ancillary Agreements executed and
delivered by Borrower are Borrower's legal, valid and binding obligations,
enforceable in accordance with their terms;
(d) it keeps and will continue to keep all of its books and
records concerning the Collateral at Borrower's executive offices located at
the addresses set forth on Schedule 12(d) hereof and will not move such books
and records to any location other than as set forth on Schedule 12(d) without
giving Agent at least thirty (30) days prior written notice;
(e) (i) the operation of Borrower's business is and will
continue to be in compliance in all material respects with all applicable
federal, state and local laws, including but not limited to all applicable
environmental laws and regulations and Borrower shall not engage in any
business activity which has been adjudicated to have violated an applicable
state or federal statute relative to health, safety or public morals.
(ii) Borrower will establish and maintain a system
to assure and monitor continued compliance with all applicable environmental
laws, which system shall include, if applicable, periodic reviews of such
compliance.
(iii) In the event Borrower obtains, gives or
receives notice of any release or threat of release of a reportable quantity
of any Hazardous Substances on its property (any such event being hereinafter
referred to as a "Hazardous Discharge") or receives any notice of violation,
request for information or notification that it is potentially responsible for
39
investigation or cleanup of environmental conditions on its property, demand
letter or complaint, order, citation, or other written notice with regard to
any Hazardous Discharge or violation of any environmental laws affecting its
property or Borrower's interest therein (any of the foregoing is referred to
herein as an "Environmental Complaint") from any Person or entity, including
any state agency responsible in whole or in part for environmental matters in
the state in which such property is located or the United States Environmental
Protection Agency (any such person or entity hereinafter the "Authority"),
then Borrower shall, within five (5) Business Days, give written notice of
same to Agent detailing facts and circumstances of which Borrower is aware
giving rise to the Hazardous Discharge or Environmental Complaint and
periodically inform Agent of the status of the matter. Such information is to
be provided to allow Agent to protect its security interest in the Collateral
and is not intended to create nor shall it create any obligation upon Agent
with respect thereto.
(iv) Borrower shall respond promptly to any
Hazardous Discharge or Environmental Complaint and take all necessary action
in order to safeguard the health of any Person and to avoid subjecting the
Collateral to any lien, charge, claim or encumbrance. If Borrower shall fail
to respond promptly to any Hazardous Discharge or Environmental Complaint or
Borrower shall fail to comply with any of the requirements of any
environmental laws, Agent may, but without the obligation to do so, for the
sole purpose of protecting Agent's interest in Collateral: (A) give such
notices or (B) enter onto Borrower's property (or authorize third parties to
enter onto such property) and take such actions as Agent (or such third
parties as directed by Agent) deem reasonably necessary or advisable, to clean
up, remove, mitigate or otherwise deal with any such Hazardous Discharge or
Environmental Complaint. All reasonable costs and expenses incurred by Agent
(or such third parties) in the exercise of any such rights, including any sums
paid in connection with any judicial or administrative investigation or
proceedings, fines and penalties, together with interest thereon from the date
expended at the Default Rate for Revolving Credit Advances shall be paid upon
demand by Borrower, and until paid shall be added to and become a part of the
Obligations secured by the Liens created by the terms of this Agreement or any
other agreement between Agent and Borrower.
(v) Borrower shall defend and indemnify the Lenders
and hold the Lenders harmless from and against all loss, liability, damage and
expense, claims, costs, fines and penalties, including attorney's fees,
suffered or incurred by Agent under or on account of any environmental laws,
including, without limitation, the assertion of any lien thereunder, with
respect to any Hazardous Discharge, the presence of any hazardous substances
affecting Borrower's property, whether or not the same originates or emerges
from Borrower's property or any contiguous real estate, including any loss of
value of the Collateral as a result of the foregoing except to the extent such
loss, liability, damage and expense is attributable to any Hazardous Discharge
resulting from actions on the part of Agent. Borrower's obligations under this
paragraph 12(e) shall arise upon the discovery of the presence of any
Hazardous Substances on Borrower's property, whether or not any federal,
state, or local environmental agency has taken or threatened any action in
connection with the presence of any hazardous substances. Borrower's
obligation and the indemnifications hereunder shall survive the termination of
this Agreement.
(vi) For purposes of paragraph 12(e) all references
to Borrower's property shall be deemed to include all of Borrower's right,
title and interest in and to all owned and/or leased premises;
40
(f) based upon the Employee Retirement Income Security Act
of 1974 ("ERISA"), and the regulations and published interpretations
thereunder: (i) Borrower has not engaged in any Prohibited Transactions as
defined in paragraph 406 of ERISA and paragraph 4975 of the Internal Revenue
Code, as amended; (ii) Borrower has met all applicable minimum funding
requirements under paragraph 302 of ERISA in respect of its plans; (iii)
Borrower has no knowledge of any event or occurrence which would cause the
Pension Benefit Guaranty Corporation to institute proceedings under Title IV
of ERISA to terminate any employee benefit plan(s); (iv) Borrower has no
fiduciary responsibility for investments with respect to any plan existing for
the benefit of persons other than Borrower's employees; and (v) Borrower has
not withdrawn, completely or partially, from any multi-employer pension plan
so as to incur liability under the Multiemployer Pension Plan Amendments Act
of 1980;
(g) it is solvent, able to pay its debts as they mature, has
capital sufficient to carry on its business and all businesses in which it is
about to engage and the fair salable value of its assets (calculated on a
going concern basis) is in excess of the amount of its liabilities;
(h) there is no pending or threatened litigation, actions or
proceeding which is reasonably likely to materially and adversely affect
Borrower's business, assets, operations, condition or prospects, financial or
otherwise, or the Collateral or the ability of Borrower to perform this
Agreement;
(i) all balance sheets and income statements which have been
delivered to Agent fairly, accurately and properly state Borrower's financial
condition on a basis consistent with that of previous financial statements and
there has been no material adverse change in Borrower's financial condition as
reflected in such statements since the date thereof and such statements do not
fail to disclose any fact or facts which might materially and adversely affect
Borrower's financial condition;
(j) (x) it possesses all of the licenses, patents,
copyrights, trademarks, tradenames and permits necessary to conduct its
business, (y) there has been no assertion or claim of violation or
infringement with respect thereof and (z) all such licenses, patents,
copyrights, trademarks, tradenames and permits are listed on Schedule 12(j);
(k) it will pay or discharge when due all taxes, assessments
and governmental charges or levies imposed upon it;
(l) it will promptly inform Agent in writing of: (i) the
commencement of all proceedings and investigations by or before and/or the
receipt of any notices from, any governmental or nongovernmental body and all
actions and proceedings in any court or before any arbitrator against or in
any way concerning any of Borrower's properties, assets or business, which
might singly or in the aggregate, have a materially adverse effect on
Borrower; (ii) any amendment of Borrower's certificate of incorporation or
by-laws; (iii) any change in Borrower's business, assets, liabilities,
condition (financial or otherwise), results of operations or business
prospects which has had or might have a materially adverse effect on Borrower;
(iv) any Event of Default or Incipient Event of Default; (v) any default or
any event which with the passage of time or giving of notice or both would
constitute a default under any agreement for the payment of money to which
Borrower is a party or by which Borrower or any of Borrower's properties
41
may be bound which would have a material adverse effect on Borrower's
business, operations, property or condition (financial or otherwise) or the
Collateral; (vi) any change in the location of Borrower's executive offices;
(vii) any change in the location of Borrower's Inventory or Equipment from the
locations listed on Schedule 12(l) attached hereto, (viii) any change in
Borrower's corporate name; (ix) any material delay in Borrower's performance
of any of its obligations to any material Customer; (x) any assertion of any
material claims, offsets, counterclaims or Disputes by any Customer; (xi) any
material allowances, credits and/or other monies granted by it to any
Customer; (xii) all material adverse information relating to the financial
condition of any account debtor; and (xiii) any material return of goods;
(m) it will not nor will any other Financial Party (i)
create, incur, assume or suffer to exist any indebtedness (exclusive of trade
debt) whether secured or unsecured other than (x) their indebtedness to
Lenders, (y) indebtedness for capital expenditures permitted under Section
12(p) and (z) as set forth on Schedule 12(m) attached hereto and made a part
hereof; (ii) declare, pay or make any dividend or distribution in cash on any
shares of their common stock or preferred stock or apply any of their funds,
property or assets to the purchase, redemption or other retirement of any of
their common or preferred stock; (iii) directly or indirectly, prepay any
indebtedness for borrowed money (other than to Agent), or repurchase, redeem,
retire or otherwise acquire any of their indebtedness; (iv) make advances,
loans or extensions of credit to any Person other than (a) loans, advances or
extensions of credit to any Person other than (x) another Financial Party or
(y) to Affiliates which, in the case of Affiliates which are not Scheduled
Affiliates, shall not exceed in the aggregate outstanding at any one time
$5,000,000 or (z) to wholly owned Subsidiaries of one or more Financial
Parties which, for all such Subsidiaries except those Subsidiaries to which
loans, advances or extensions of credit are now outstanding (and then only as
to the amount now outstanding), shall not exceed in the aggregate outstanding
at any one time after the date hereof $25,000,000 and (b) an advance to
National Media Holding Company, Inc. in the original principal sum of
$5,000,000; (v) become either directly or contingently liable upon the
obligations of any Person by assumption, endorsement or guaranty thereof or
otherwise other than the endorsement of checks in the ordinary course of
business except (i) as listed on Schedule 12(m) and (ii) with respect to the
issuance of the guaranties of indebtedness of foreign Affiliates or Foreign
Subsidiaries provided that at any time, the maximum aggregate outstanding
amount of indebtedness secured by all such guaranties which are not guaranties
of collection and which were not in the sole judgment of Agent incurred by
foreign Affiliates or foreign Subsidiaries on a fully secured basis shall not
exceed $20,000,000; (vi) enter into any merger, consolidation or other
reorganization ("Merger") with or into any other Person or permit any other
Person to consolidate with or merge with it unless (a) Borrower shall be the
surviving Person in such Merger, consolidation or reorganization, (b) such
surviving Person shall have a financial condition, in Agent's reasonable
judgment, equal to or better than Borrower had before such event (c) the
surviving Person shall be in compliance on a pro forma basis with respect to
each and every financial covenant set forth in Sections 11(n)(q)(r)(s)(t)
after giving effect to such Merger as of the end of the fiscal quarter
immediately preceding the fiscal quarter in which such Merger is taking place
and (d) no Event of Default shall have occurred and then be continuing; (vii)
form any Subsidiary unless such Subsidiary expressly joins in this Agreement
as a borrower and becomes jointly and severally liable for the obligations of
Borrower hereunder or enter into any partnership, joint venture or similar
arrangement which requires contributions of cash or assets by any Financial
Party in an amount greater than $250,000 per year; (viii) materially change
the nature of the business in which it is presently engaged; (ix) change its
fiscal year or make any changes in accounting treatment and
42
reporting practices without prior written notice to Agent except as required
by GAAP or in the tax reporting treatment or except as required by law; (x)
except as provided in Section 12(m)(xiii), enter into any transaction with any
Affiliate (other than a Scheduled Affiliate), except in ordinary course on
arms-length terms; (xi) xxxx Receivables under any name except the present
name of Borrower or such other tradenames as may be set forth on Schedule
12(m) hereto; (xii) acquire all or a portion of the assets or stock of any
Person (in one or more transactions) ("Acquisition") which Acquisitions (1)
result in an aggregate purchase price in excess of (A) $10,000,000 in cash and
$10,000,000 in unsecured note obligations during the period commencing on the
Closing Date and continuing through December 31, 1997, and (B) $20,000,000 in
the aggregate in cash and in unsecured note obligations during any other
fiscal year, (2) involves a Person other than a Person, engaged solely in the
business of recruitment advertising or national yellow page advertising other
classified advertising or internet related business ("Permitted Business") and
(3) increases the aggregate face amount of outstanding Receivables of Borrower
and Affiliate Receivables by more than 10% from the level existing immediately
prior to such acquisition, provided that Borrower shall make no Acquisition
following the occurrence and during the continuance of an Event of Default or
if an Event of Default would result after giving effect to such Acquisition;
or (xiii) purchase any accounts receivable from any Affiliate except in the
ordinary course on arms-length terms. For purposes of clause (xii) above,
unsecured shall mean that the note obligations are not secured by any assets
of a Financial Party other than the capital stock of the person being
acquired.
(n) it shall not at any time permit Tangible Net Worth to be
less than the following amounts at the end of each fiscal quarter during the
following periods:
Period Amount
------ ------
9/30/97 through 12/30/98 85,000,000
12/31/98 through 12/30/99 100,000,000
12/31/99 through 12/30/00 120,000,000
12/31/00 and at all times thereafter 140,000,000
provided, that at any time from and after an Equity Event, the amounts set
forth above shall be increased by an amount equal to the proceeds of the
Equity Event multiplied by 75%;
(o) all financial projections of Borrower's performance
prepared by Borrower or at Borrower's direction and delivered to Agent will
represent, at the time of delivery to Agent, Borrower's best estimate of
Borrower's future financial performance and will be based upon assumptions
which are reasonable in light of Borrower's past performance and then current
business conditions;
(p) the Financial Parties will not make capital expenditures
in any fiscal year in an aggregate amount (exclusive of expenditures made by
Borrower pursuant to Section 8(a) hereof) in excess of (i) $12,500,000 during
the fiscal year ended December 31, 1997, (ii) $10,000,000 during the fiscal
year ended December 31, 1998 and (iii) $6,000,000 during any fiscal year
thereafter;
43
(q) it shall not at any time permit any deficit in its
Working Capital or Domestic Working Capital to be more than the following
amounts at the end of each fiscal quarter during the following periods:
Period Amount
------ ------
9/30/97 through 12/30/98 ($ 125,000,000)
12/31/98 through 12/30/99 ($ 110,000,000)
12/31/99 through 12/30/00 ($ 110,000,000)
12/31/00 and at all times thereafter ($ 100,000,000)
provided, that at any time from and after an Equity Event, the amounts set
forth above shall be adjusted by an amount equal to the proceeds of the Equity
Event multiplied by fifty (50%) percent;
(r) it shall cause to be maintained a ratio of Current
Assets to Current Liabilities not less than the following ratios at the end of
each fiscal quarter during the following periods;
Date Ratio
---- -----
12/31/96 through 12/30/97 .65 to 1.00
12/31/97 through 12/30/98 .70 to 1.00
12/31/98 through 12/30/99 .75 to 1.00
12/31/99 through 12/30/00 .80 to 1.00
12/31/00 through 12/30/01 .85 to 1.00
01/01/01 and at all times thereafter 1.00 to 1.00
(s) it will not permit the ratio of the earnings of Borrower
on a Consolidated Basis before interest, taxes, depreciation, amortization and
business non-compete expenses to total interest expense (cash and accrued
interest) of Borrower on a Consolidated Basis or such ratio as calculated
solely with respect to Domestic Persons to be less than (i) 2.0 to 1.0 for
each fiscal quarter through and including the fiscal quarter ending December
31, 1997 and (ii) 3.0 to 1.0 for each fiscal quarter thereafter;
(t) Borrower on a Consolidated Basis will not incur a loss
before taxes of more than (i) $1,500,000 for any six month period ending the
last day of any calendar month and (ii) $2,000,000 for any three month period
ending the last day of any calendar month;
(t-1) the amount of Foreign Indebtedness (excluding Foreign
Indebtedness payable to BNY, an affiliate of BNY or to BNY as agent for other
financial institutions) outstanding at any time shall not exceed an amount
equal to twenty-five percent (25%) of the Tangible Net Worth of Borrower on a
Consolidated Basis as of such date;
(u) none of the proceeds of the Loans hereunder will be used
directly or indirectly to "purchase" or "carry" "margin stock" or to repay
indebtedness incurred to "purchase" or "carry" "margin stock" within the
respective meanings of each of the quoted terms
44
under Regulation G of the Board of Governors of the Federal Reserve System as
now and from time to time hereafter in effect;
(v) it will bear the full risk of loss from any loss of any
nature whatsoever with respect to the Collateral. At it's own cost and expense
in amounts and with carriers acceptable to Agent, it shall (i) keep all its
insurable properties and properties in which it has an interest insured
against the hazards of fire, flood, sprinkler leakage, those hazards covered
by extended coverage insurance and such other hazards, and for such amounts,
as is customary in the case of companies engaged in businesses similar to
Borrower's including, without limitation, business interruption insurance;
(ii) maintain a bond in such amounts as is customary in the case of companies
engaged in businesses similar to Borrower's insuring against larceny,
embezzlement or other criminal misappropriation of insured's officers and
employees who may either singly or jointly with others at any time have access
to the assets or funds of Borrower either directly or through authority to
draw upon such funds or to direct generally the disposition of such assets;
(iii) maintain public and product liability insurance against claims for
personal injury, death or property damage suffered by others; (iv) maintain
all such workmen's compensation or similar insurance as may be required under
the laws of any state or jurisdiction in which Borrower is engaged in
business; (v) furnish Agent with (x) copies of all policies and upon Agent's
request evidence of the maintenance of such policies at least thirty (30) days
before any expiration date, and (y) appropriate loss payable endorsements in
form and substance satisfactory to Agent, naming Agent as loss payee and
providing that as to Agent the insurance coverage shall not be impaired or
invalidated by any act or neglect of Borrower and the insurer will provide
Agent with at least thirty (30) days notice prior to cancellation. Borrower
shall instruct the insurance carriers that in the event of any loss
thereunder, the carriers shall make payment for such loss to Agent and not to
Borrower and Agent jointly. If any insurance losses are paid by check, draft
or other instrument payable to Borrower and Agent jointly, Agent may endorse
Borrower's name thereon and do such other things as Agent may deem advisable
to reduce the same to cash. Agent is hereby authorized to adjust and
compromise claims. All loss recoveries received by Agent upon any such
insurance may be applied to the Obligations, in such order as Agent in its
sole discretion shall determine. Any surplus shall be paid by Agent to
Borrower or applied as may be otherwise required by law. Any deficiency
thereon shall be paid by Borrower to Agent, on demand;
(w) will not acquire the Receivables of a Person which are
not comparable to the current Receivables of Borrower and Affiliated
Receivables with respect to credit quality and payment terms and eligibility;
(x) not more than 10% of yellow pages publisher media
payables will be more than 60 days past due and not more than 10% of newspaper
and similar media accounts payable of Borrower will be more than 30 days past
due;
(y) Borrower will cause each of (i) its Scheduled Affiliates
and Domestic Subsidiaries, (ii) the Scheduled Affiliates and Domestic
Subsidiaries of Xxxxxx XxXxxxxx, (iii) each Guarantor and (iv) any other
Scheduled Affiliate or Domestic Subsidiary of any Financial Party, to execute
and deliver to Agent a Guaranty Agreement and Guaranty Security Agreement;
45
(z) it has (i) advised its certified public accountants that
Agent and the Lenders will be relying on all financial and other information
prepared by such accountants and (ii) authorized its accountants to confer
directly from time to time with Agent;
(aa) other than as permitted pursuant to Section 12(m)
hereof it shall not nor shall any other Financial Party purchase or acquire
obligations or stock of, or any other interest in, or make any investment in
any entity, except (A) obligations issued or guaranteed by the United States
of America or any agency thereof, (B) commercial paper with maturities of not
more than 180 days and a published rating of not less than A-1 or P-1 (or the
equivalent rating), (C) certificates of time deposit and bankers' acceptances
having maturities of not more than 180 days and repurchase agreements backed
by United States government securities of a commercial bank if (x) such bank
has a combined capital and surplus of at least $500,000,000, or (y) its debt
obligations, or those of a holding company of which it is a subsidiary, are
rated not less than A (or the equivalent rating) by a nationally recognized
investment rating agency, (D) U.S. money market funds that invest solely in
obligations issued or guaranteed by the United States of America or an Agency
thereof, (E) Eurodollar time deposits with financial institutions with a
published rating of not less than A-1 or P-1 (or the equivalent rating), (F)
notes evidencing amounts due from customers provided such notes have been
delivered to Agent as additional Collateral and (G) investments not in excess
of $5,000,000 in the aggregate at any time outstanding which consist of cash
or cash equivalents and which are made by a Financial Party in the ordinary
course of business;
(bb) Agent shall be given a right to bid on each and every
institutional financing in excess of $2,500,000 hereafter sought by a
Financial Party;
(cc) Dilution shall not exceed ten percent (10%) on a
cumulative basis for any three month period ending the last day of any
calendar month (as determined by Agent in the good faith exercise of it sole
discretion);
(dd) Borrower covenants that BNY UK (or its affiliates)
shall be Borrower's and its U.K. Subsidiaries' sole working capital lender in
the United Kingdom;
(ee) Borrower covenants that BNY (or its affiliates) shall
be Borrower's and its Canadian Subsidiaries' sole working capital lender in
Canada;
(ff) Borrower shall use its best efforts to obtain landlord,
mortgagee or warehouseman agreements satisfactory to Agent with respect to all
premises leased by Borrower at which Inventory and books and records are
located and with respect to which such an agreement is not currently in place;
(gg) Not later than 120 days from the Closing Date, Borrower
shall either (i) cause TMP Australia Pty Ltd. to reincorporate in a territory
in Australia which does subject Borrower to a stamp duty in connection with
the pledge of shares of stock owned by Borrower of such company not later than
120 days from the Closing Date and deliver to Agent a pledge (pursuant to a
Pledge Agreement in form and substance satisfactory to Agent) of one hundred
percent (100%) of the issued and outstanding stock of TMP Australia or (ii)
deliver to Agent a pledge (pursuant to a Pledge Agreement in form and
substance satisfactory to Agent) of one
46
hundred percent (100%) of the issued and outstanding shares of a newly formed
holding company of TMP Australia and Borrower's other Australian Subsidiaries.
(hh) Borrower shall not enter into foreign currency exchange
contracts involving an aggregate notional amount in excess of an amount equal
to 150% of the amount of capital expenditures permitted to be made in
accordance with section 12(m) or 12 (p) hereof, provided that Borrower shall
not enter into any foreign currency contract upon the occurrence and during
the continuation of an Event of Default; and
(ii) Within nine months from the Closing Date, Borrower
shall cause its invoices to its Customers or agreements with, representing at
least 90% of all of its Customers, to contain a notation to the effect that
Borrower is acting as a principal and not as such Customer's agent vis-a-vis
publishers.
13. Power of Attorney. Borrower hereby appoints Agent or any
other Person whom Agent may designate as Borrower's attorney, with power to:
(i) endorse Borrower's name on any checks, notes, acceptances, money orders,
drafts or other forms of payment or security that may come into any Lender's
possession; (ii) sign Borrower's name on any invoice or xxxx of lading
relating to any Receivables, drafts against Customers, schedules and
assignments of Receivables, notices of assignment, financing statements and
other public records, verifications of account and notices to or from
Customers; (iii) verify the validity, amount or any other matter relating to
any Receivable by mail, telephone, telegraph or otherwise with Customers; (iv)
execute customs declarations and such other documents as may be required to
clear Inventory through Customs; (v) do all things necessary to carry out this
Agreement, any Ancillary Agreement and all related documents; and (vi) on or
after the occurrence and continuation of an Event of Default, notify the post
office authorities to change the address for delivery of Borrower's mail to an
address designated by Agent, and to receive, open and dispose of all mail
addressed to Borrower. Borrower hereby ratifies and approves all acts of the
attorney. Neither Agent nor the attorney will be liable for any acts or
omissions or for any error of judgment or mistake of fact or law. This power,
being coupled with an interest, is irrevocable so long as any Receivable which
is assigned to Agent or in which Agent has a security interest remains unpaid
and until the Obligations have been fully satisfied.
14. Expenses. Borrower shall pay all of BNY's out-of-pocket
costs and expenses, including without limitation reasonable fees and
disbursements of counsel retained or employed by BNY and appraisers, in
connection with the preparation, execution and delivery of this Agreement and
the Ancillary Agreements, and in connection with the prosecution or defense of
any action, contest, dispute, suit or proceeding concerning any matter in any
way arising out of, related to or connected with this Agreement or any
Ancillary Agreement. Borrower shall also pay all of Lender's and each Lender's
out-of-pocket costs and expenses, including without limitation reasonable fees
and disbursements of counsel retained or employed by Agent, in connection with
(a) the preparation, execution and delivery of any waiver, any amendment
thereto or consent proposed or executed in connection with the transactions
contemplated by this Agreement or the Ancillary Agreements, (b) Agent's
obtaining performance of the Obligations under this Agreement and any
Ancillary Agreements, including, but not limited to, the enforcement or
defense of Agent's security interests, assignments of rights and liens
hereunder as valid perfected security interests, (c) any attempt to inspect,
verify, protect, collect, sell, liquidate or otherwise dispose of any
Collateral, and (d) any consultations in connection with any
47
of the foregoing. Borrower shall also pay Agent's then standard price for
furnishing Borrower or its designees copies of any statements, records, files
or other data (collectively, "Reports") requested by Borrower or its
designees, other than reports of the kind furnished to Borrower and Agent's
other borrowers on a regular, periodic basis in the ordinary course of Agent's
business or such reports as Borrower would have generated itself were it
conducting its own accounts receivable management. Borrower shall also pay
Agent's customary bank charges, including, without limitation, all wire
transfer fees incurred by Agent, for all bank services performed or caused to
be performed by Agent for Borrower at Borrower's request. All such costs and
expenses together with all filing, recording and search fees, taxes and
interest payable by Borrower to Agent shall be payable on demand and shall be
secured by the Collateral. If any tax by any governmental authority is or may
be imposed on or as a result of any transaction between Borrower and Agent
which Agent is or may be required to withhold or pay, Borrower agrees to
indemnify and hold Lender and each Lender harmless in respect of such taxes,
and Borrower will repay to Agent any such taxes which shall be charged to
Borrower's account; and until Borrower shall furnish Agent with indemnity
therefor (or supply Agent with evidence satisfactory to it that due provision
for the payment thereof has been made), Agent may hold without interest any
balance standing to Borrower's credit and Agent shall retain its security
interests in any and all Collateral. Borrower hereby acknowledges that Agent
shall not be liable in any manner whatsoever for any selling expenses, orders,
purchases or contracts of any kind resulting from any transaction between
Borrower and any other Person and Borrower hereby indemnifies and holds Agent
harmless with respect thereto, which indemnity shall survive termination of
this Agreement.
15. Assignment By a Lender. (a) This Agreement shall be
binding upon and inure to the benefit of Borrower, Agent, each Lender, all
future holders of the Loans and their respective successors and assigns,
except that Borrower may not assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of Agent
and each Lender.
(b) Borrower acknowledges that in the regular course of
commercial banking business one or more Lenders may at any time and from time
to time sell participating interests in the Loans to other financial
institutions (each such transferee or purchaser of a participating interest, a
"Transferee"). Each Transferee may exercise all rights of payment (including
without limitation rights of set-off) with respect to the portion of such
Loans held by it or other Obligations payable hereunder as fully as if such
Transferee were the direct holder thereof provided that Borrower shall not be
required to pay to any Transferee more than the amount which it would have
been required to pay to the Lender which granted an interest in its Loans or
other Obligations payable hereunder to such Transferee had such Lender
retained such interest in the Loans hereunder or other Obligations payable
hereunder and in no event shall Borrower be required to pay any such amount
arising from the same circumstances and with respect to the same Loans or
other Obligations payable hereunder to both such Lender and such Transferee.
Borrower hereby grants to any Transferee a continuing security interest in any
deposits, moneys or other property actually or constructively held by such
Transferee as security for the Transferee's interest in the Loans.
(c) Any Lender may sell, assign or transfer all or any part
of its rights under this Agreement and the Ancillary Agreements to one or more
additional banks or financial institutions which are able to make Loans with
the prior written consent of Agent and one or
48
more of such additional banks or financial institutions may commit to make
Loans hereunder (each a "Purchasing Lender"), pursuant to a Commitment
Transfer Supplement, executed by a Purchasing Lender, the transferor Lender,
and Agent and delivered to Agent for recording. Upon such execution, delivery,
acceptance and recording, from and after the transfer effective date
determined pursuant to such Commitment Transfer Supplement, (i) Purchasing
Lender thereunder shall be a party hereto and, to the extent provided in such
Commitment Transfer Supplement, have the rights and obligations of a Lender
thereunder with a Commitment Percentage as set forth therein, and (ii) the
transferor Lender thereunder shall, to the extent provided in such Commitment
Transfer Supplement, be released from its obligations under this Agreement,
the Commitment Transfer Supplement creating a novation for that purpose. Such
Commitment Transfer Supplement 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 adjustment of the Commitment Percentages
and the Maximum Loan Amount, if any, arising from the purchase by such
Purchasing Lender of all or a portion of the rights and obligations of such
transferor Lender under this Agreement and the Ancillary Agreements. Agent
shall notify Borrower of the addition of any Purchasing Lender. Borrower
hereby consents to the addition of such Purchasing Lender and the resulting
adjustment of the Commitment Percentages arising from the purchase by such
Purchasing Lender of all or a portion of the rights and obligations of such
transferor Lender under this Agreement and the Ancillary Agreements. Borrower
shall execute such further documents and do such further acts and things in
order to effectuate the foregoing. Notwithstanding anything hereinabove to the
contrary, no Lender shall sell, assign or transfer its rights hereunder to any
Purchasing Lender unless such Lender has first given Agent thirty (30) days
prior written notice, during which period Agent shall have the option to
repurchase from such Lender its rights under this Agreement on the same basis
as provided to the proposed Purchasing Lender. If Agent exercises its option,
the parties shall execute a Commitment Transfer Supplement and the transferor
Lender shall be released from its obligations under the Agreement to the
extent provided in such Commitment Transfer Supplement. In addition, in the
event there shall occur a material adverse change in the financial condition
or affairs of any Lender, Agent shall have the right to repurchase such
Lender's rights under the Agreement in the manner described above.
(d) Agent shall maintain at its address a copy of each
Commitment Transfer Supplement delivered to it and a register (the "Register")
for the recordation of the names and addresses of the Loans owing to each
Lender from time to time. The entries in the Register shall be conclusive, in
the absence of manifest error, and Borrower, Agent and Lenders may treat each
Person whose name is recorded in the Register as the owner of the Loans
recorded therein for the purposes of this Agreement. The Register shall be
available for inspection by Borrower or any Lender at any reasonable time and
from time to time upon reasonable prior notice. Agent shall receive a
processing fee in the amount of $3,500 payable by the applicable Purchasing
Lender upon the effective date of each transfer or assignment to such
Purchasing Lender.
(e) Borrower authorizes each Lender to disclose to any
Transferee or Purchasing Lender and any prospective Transferee or Purchasing
Lender any and all financial information in such Lender's possession
concerning Borrower which has been delivered to such Lender by or on behalf of
Borrower pursuant to this Agreement or in connection with such Lender's credit
evaluation of Borrower and each Purchasing Lender and any Transferee shall
hold all non-public information obtained pursuant to the requirements of this
Agreement in accordance with applicable federal and state securities laws and
its customary procedures for
49
handling confidential information of this nature; provided, however each
Purchasing Lender or Transferee may disclose such confidential information (a)
to its examiners, affiliates, outside auditors, counsel and other professional
advisors, (b) to any other prospective Transferees, and (c) as required or
requested by any governmental authority or representative thereof or pursuant
to legal process.
16. Waivers. Borrower waives presentment and protest of any
instrument and notice thereof, notice of default and all other notices to
which Borrower might otherwise be entitled.
17. Term of Agreement. (A) This Agreement shall continue in
full force and effect until the expiration of the Term unless terminated by
either party as provided herein. The Term shall be automatically extended for
successive periods of one (1) year each unless either party shall have
provided the other with a written notice of termination, at least ninety (90)
days prior to the expiration of the initial Term or any renewal Term,
provided, however, that Borrower may terminate this Agreement at any time upon
one hundred twenty (120) days' prior written notice ("Termination Date"). Upon
and concurrently with such termination, Borrower shall be obligated to pay to
Agent (solely for Agent's benefit and not for the benefit of the Lenders), a
termination fee as follows:
Termination occurs between: Fee
--------------------------- ---
Closing Date through June 30, 1998 $2,000,000
July 1, 1998 through June 30, 1999 $1,000,000
July 1, 1999 through June 30, 2000 $ 500,000
July 1, 2000 through June 30, 2001 0
(B) Prior to any such termination, Borrower shall provide Lenders a good faith
opportunity to match the terms of any proposed replacement financing and
Borrower shall revoke any termination notice previously sent if Lenders
proposed pricing proposal is within 25 basis points of the all-in cost of the
replacement financing. For purposes of this comparison, the required
termination fee shall be included as an additional cost of the replacement
financing; provided, however, that for purposes of this calculation, such fee
shall be amortized over the lesser of (a) the term of the replacement
financing and (b) three years.
18. Events of Default. The occurrence of any of the
following shall constitute an Event of Default:
(a) failure to make payment of any of the Obligations when
due when required hereunder;
(b) failure to pay any taxes in excess of $100,000 when due
unless such taxes are being contested in good faith by appropriate proceedings
and with respect to which adequate reserves have been provided on Borrower's
books;
(c) failure to perform under and/or committing any breach of
this Agreement or any Ancillary Agreement or any other agreement between
Borrower and Agent which (except with respect to Sections 12(m), (n), (p),
(q), (r), (s), (t), (t)(1) and (u) hereof) such failure or
50
breach is not cured within 10 business days following receipt of notice of
such failure or breach from Agent;
(d) occurrence of a default under any agreement to which
Borrower is a party with third parties which has a material adverse affect
upon Borrower's business, operations, property or condition (financial or
otherwise) including all leases for any premises where Inventory or Equipment
is located;
(e) any representation, warranty or statement made by
Borrower hereunder, in any Ancillary Agreement, any certificate, statement or
document delivered pursuant to the terms hereof, or in connection with the
transactions contemplated by this Agreement should when made be false or
misleading in any material respect;
(f) an attachment or levy is made upon any of Borrower's
assets having an aggregate value in excess of $1,000,000 or a judgment is
rendered against Borrower or any of Borrower's property involving a liability
of more than $100,000, which shall not have been vacated, discharged, stayed
or bonded pending appeal within thirty (30) days from the entry thereof;
(g) Agent shall have notified Borrower of any change in
Borrower's condition or affairs (financial or otherwise) which in Agent's good
faith opinion impairs the Collateral or the ability of Borrower to perform its
Obligations;
(h) any lien created hereunder or under any Ancillary
Agreement for any reason ceases to be or is not a valid and perfected lien
having a first priority interest;
(i) if Borrower shall (i) apply for or consent to the
appointment of, or the taking of possession by, a receiver, custodian, trustee
or liquidator of itself or of all or a substantial part of its property, (ii)
make a general assignment for the benefit of creditors, (iii) commence a
voluntary case under the federal bankruptcy laws (as now or hereafter in
effect), (iv) be adjudicated a bankrupt or insolvent, (v) file a petition
seeking to take advantage of any other law providing for the relief of
debtors, (vi) acquiesce to, or fail to have dismissed, within thirty (30)
days, any petition filed against it in any involuntary case under such
bankruptcy laws, or (vii) take any action for the purpose of effecting any of
the foregoing;
(j) Borrower shall admit either orally or in writing its
inability, or be generally unable to pay its debts as they become due or cease
operations of its present business;
(k) any Subsidiary or any Guarantor (or any Affiliate whose
accounts receivable are Affiliate Receivables hereunder) shall (i) apply for
or consent to the appointment of, or the taking possession by, a receiver,
custodian, trustee or liquidator of itself or of all or a substantial part of
its property, (ii) admit in writing its inability, or be generally unable, to
pay its debts as they become due or cease operations of its present business,
(iii) make a general assignment for the benefit of creditors, (iv) commence a
voluntary case under the federal bankruptcy laws (as now or hereafter in
effect), (v) be adjudicated a bankrupt or insolvent, (vi) file a petition
seeking to take advantage of any other law providing for the relief of
debtors, (vii) acquiesce to, or fail to have dismissed, within thirty (30)
days, any petition filed against it in any
51
involuntary case under such bankruptcy laws, or (viii) take any action for the
purpose of effecting any of the foregoing;
(l) any Affiliate (other than an Affiliate whose accounts
receivable are Affiliate Receivables hereunder) shall (i) apply for or consent
to the appointment of, or the taking possession by, a receiver, custodian,
trustee or liquidator of itself or of all or a substantial part of its
property, (ii) admit in writing its inability, or be generally unable, to pay
its debts as they become due or cease operations of its present business,
(iii) make a general assignment for the benefit of creditors, (iv) commence a
voluntary case under the federal bankruptcy laws (as now or hereafter in
effect), (v) be adjudicated a bankrupt or insolvent, (vi) file a petition
seeking to take advantage of any other law providing for the relief of
debtors, (vii) acquiesce to, or fail to have dismissed, within thirty (30)
days, any petition filed against it in any involuntary case under such
bankruptcy laws, or (viii) take any action for the purpose of effecting any of
the foregoing and the occurrence of any of the foregoing shall have a material
adverse impact on Borrower, the Collateral or the ability of Borrower to
perform its obligations;
(m) Borrower directly or indirectly sells, assigns,
transfers, conveys, or suffers or permits to occur any sale, assignment,
transfer or conveyance of any assets of Borrower in excess of $2,500,000 in
the aggregate during any fiscal year of Borrower or any interest therein,
except as permitted herein;
(n) Intentionally Omitted;
(o) a default that has not been cured within any applicable
grace period by Borrower in the payment, when due, of any principal of or
interest on any indebtedness for money borrowed exceeding $1,000,000;
(p) if any Guarantor attempts to terminate, challenges the
validity of, or its liability under any Guaranty Agreement or Guarantor
Security Agreement;
(q) should any Guarantor default in its obligations under
any Guaranty Agreement or any Guarantor Security Agreement or if any
proceeding shall be brought to challenge the validity, binding effect of any
Guaranty Agreement or any Guarantor Security Agreement, or should any
Guarantor breach any representation, warranty or covenant contained in any
Guaranty Agreement or any Guarantor Security Agreement or should any Guaranty
Agreement or Guarantor Security Agreement cease to be a valid, binding and
enforceable obligation;
(r) there shall occur a Change of Control;
(s) Borrower or another person involved in the media
industry (such person to be mutually agreed upon by Borrower and Agent) shall
advise Lender that there is a change in (i) the laws, regulations or rules
regulating the media industry or in the interpretation or application of such
laws, regulations or rules, (ii) the technology utilized by the media industry
or (iii) the organization of or policies or procedures employed by the media
industry, which shall have an adverse impact on Borrower and its operations;
52
(t) Any of Borrower's eight largest yellow pages publishers,
which at any time singularly account for more than 20% of the outstanding
aggregate amount of payable then due from Borrower to all of its yellow pages
publishers, require payment by Borrower to such publisher less than 40 days
after issuance from the invoice date thereof.
(u) Any of Borrowers newspaper publishers, which at any time
singularly account for more than 15% of the outstanding aggregate amount of
payables then due from Borrower to all of its newspaper publishers, require
payment by Borrower to such publisher less than 25 days after issuance from
the invoice date thereof.
(v) More than twenty percent (20%) of the aggregate amount
of Receivables and Affiliate Receivables shall at any time not constitute
Eligible Receivables as determined by Agent in the good faith exercise of its
sole discretion;
(w) As of the end of any fiscal year, Borrower and the
Scheduled Affiliates shall have lost customers during the course of such
fiscal year which in the aggregate accounted for more than 10% of sales for
such fiscal year (such calculations to take into account the addition of new
customers during such fiscal year);
(x) At any time following the occurrence of a Secondary
Equity Event, Xxxxxx XxXxxxxx shall be indebted to Borrower for money borrowed
in an aggregate gross amount in excess of $8,000,000 or in excess of
$1,000,000 after giving effect to offsetting amounts due from Borrower to
Xxxxxx XxXxxxxx; or
(y) If Borrower and/or any Scheduled Affiliates shall
default in any of their obligations to any newspaper publisher or yellow pages
publisher which shall cause Borrower or such Affiliate to be unable to
complete orders from customers in accordance with applicable purchase orders.
(z) There should occur a default or an event of default
under the Canadian Credit Agreement, or any Canadian Security Agreement, or
the UK Credit Agreement or any UK Security Agreement.
19. Remedies. (a) Upon the occurrence of (i) an Event of
Default pursuant to paragraph 18(i) herein, all Obligations shall be
immediately due and payable and this Agreement shall be deemed terminated;
(ii) upon the occurrence and continuation of any other of the Events of
Default, Agent shall have the right to demand repayment in full of all
Obligations, whether or not otherwise due and (iii) the filing of a petition
against any Borrower in any involuntary case under any state or federal
bankruptcy laws the obligations of the Lenders to make Loans hereunder shall
be terminated other than as may be required by appropriate order of the
bankruptcy court having jurisdiction over Borrower. Until all Obligations have
been fully satisfied, Agent shall retain its security interest in all
Collateral. Agent shall have, in addition to all other rights provided herein,
the rights and remedies of a secured party under the Uniform Commercial Code,
and under other applicable law, all other legal and equitable rights to which
Agent may be entitled, including without limitation, the right to take
immediate possession of the Collateral, to require Borrower to assemble the
Collateral, at Borrower's expense, and to make it available to Agent at a
place designated by Agent which is reasonably convenient to both parties and
to enter any of the premises of Borrower or wherever the Collateral shall be
located, with or
53
without force or process of law, and to keep and store the same on said
premises until sold (and if said premises be the property of Borrower,
Borrower agrees not to charge Agent for storage thereof for a period up to at
least sixty (60) days after sale or disposition of said Collateral). Further,
Agent may, at any time or times after default by Borrower, sell and deliver
all Collateral held by or for Agent at public or private sale for cash, upon
credit or otherwise, at such prices and upon such terms as Agent, in Agent's
sole discretion, deems advisable or Agent may otherwise recover upon the
Collateral in a commercially reasonable manner as Agent, in its sole
discretion, deems advisable. In addition, upon the occurrence of an Event of
Default, Borrower shall pledge, and shall cause its direct or indirect
Subsidiaries to pledge to Agent the issued shares of any such direct or
indirect Subsidiary as may be required by Agent as additional security for the
Obligations. Except as to that part of the Collateral which is perishable or
threatens to decline speedily in nature or is of a type customarily sold on a
recognized market, the requirement of reasonable notice shall be met if such
notice is mailed postage prepaid to Borrower at Borrower's address as shown in
Agent's records, at least ten (10) days before the time of the event of which
notice is being given. Agent may be the purchaser at any sale, if it is
public. In connection with the exercise of the foregoing remedies, Agent is
granted permission to use all of Borrower's trademarks, tradenames,
tradestyles, patents, patent applications, licenses, franchises and other
proprietary rights which are used in connection with (a) Inventory for the
purpose of disposing of such Inventory and (b) Equipment for the purpose of
completing the manufacture of unfinished goods. The proceeds of sale shall be
applied first to all costs and expenses of sale, including attorneys' fees,
and second to the payment (in whatever order Agent elects) of all Obligations;
provided that all payments, other than payments with respect to the repayment
of BNY Overadvances made in accordance with Section 2(c) hereof, shall be
applied pro rata according to the respective Commitment Percentages of the
Lenders. Agent will return any excess to Borrower and Borrower shall remain
liable to Agent for any deficiency.
20. Waiver; Cumulative Remedies. Failure by Agent to
exercise any right, remedy or option under this Agreement or any supplement
hereto or any other agreement between Borrower and Agent or delay by Agent in
exercising the same, will not operate as a waiver; no waiver by Agent will be
effective unless it is in writing and then only to the extent specifically
stated. Agent's rights and remedies under this Agreement will be cumulative
and not exclusive of any other right or remedy which Agent may have.
21. Application of Payments. Borrower irrevocably waives the
right to direct the application of any and all payments at any time or times
hereafter received by Agent from or on Borrower's behalf and Borrower hereby
irrevocably agrees that Agent shall have the continuing exclusive right to
apply and reapply any and all payments received at any time or times hereafter
against Borrower's Obligations hereunder in such manner as Agent may deem
advisable notwithstanding any entry by Agent upon any of Agent's books and
records.
22. Depository Accounts. Any payment received by Borrower on
account of any Collateral shall be held by Borrower in trust for Agent and
Borrower shall promptly deliver same in kind to Agent or deposit all such
payments into a cash collateral account at such bank as Agent may designate
for application to payment of the Obligations. Borrower shall also execute
such further documents as Agent may deem necessary to establish such an
account and all funds deposited in such account shall immediately be deemed
Agent's property.
54
23. Lock Box Accounts. Borrower shall instruct all of its
Customers to make such payments on account of Receivables to an account under
Agent's dominion and control at Bank or at such bank as Agent may designate
provided that UK Receivables shall be directed to such location as may be
required pursuant to the applicable UK Credit Agreement. Borrower shall also
execute such further documents as Agent may deem necessary to establish such
an account and all funds deposited in such account shall immediately be deemed
Agent's property.
24. Revival. Borrower further agrees that to the extent
Borrower makes a payment or payments to Agent, which payment or payments or
any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy act, state or federal law, common law or
equitable cause, then, to the extent of such payment or repayment, the
obligation or part thereof intended to be satisfied shall be revived and
continued in full force and effect as if said payment had not been made.
25. Notices. Any notice or request hereunder may be given to
Borrower or Agent at the respective addresses set forth below or as may
hereafter be specified in a notice designated as a change of address under
this paragraph. Any notice or request hereunder shall be given by registered
or certified mail, return receipt requested, or by overnight mail or by
telecopy (confirmed by mail). Notices and requests shall be, in the case of
those by mail or overnight mail, deemed to have been given when deposited in
the mail or with the overnight mail carrier, and, in the case of a telecopy,
when confirmed.
Notices shall be provided as follows:
If to Agent: BNY Financial Corporation
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxx
Xxxxx Xxxxxxx, Esq.
Xxxxx Xxxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy to: Xxxx & Hessen LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
If to Borrower: TMP Worldwide Inc.
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Vice Chairman
and Xxxxx X. Xxxxxxxxxx, Vice
President and General Counsel
Telephone: (000) 000-0000
55
Telecopier: (000) 000-0000
With a copy to: Xxxxxxx Leisure Xxxxxx & Irvine
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx XxXxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
26. Governing Law and Waiver of Jury Trial. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK. AGENT SHALL HAVE THE RIGHTS AND REMEDIES OF A SECURED
PARTY UNDER APPLICABLE LAW INCLUDING, BUT NOT LIMITED TO, THE UNIFORM
COMMERCIAL CODE OF NEW YORK. BORROWER AGREES THAT ALL ACTIONS AND PROCEEDINGS
RELATING DIRECTLY OR INDIRECTLY TO THIS AGREEMENT OR ANY ANCILLARY AGREEMENT
OR ANY OTHER OBLIGATIONS SHALL BE BROUGHT IN THE FEDERAL DISTRICT COURT OF THE
SOUTHERN DISTRICT OF NEW YORK OR, AT AGENT'S OPTION, IN ANY OTHER COURTS
LOCATED IN NEW YORK STATE OR ELSEWHERE AS AGENT MAY SELECT AND THAT SUCH
COURTS ARE CONVENIENT FORUMS AND BORROWER SUBMITS TO THE PERSONAL JURISDICTION
OF SUCH COURTS. BORROWER WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS THAT
SERVICE OF PROCESS UPON BORROWER MAY BE MADE BY CERTIFIED OR REGISTERED MAIL,
RETURN RECEIPT REQUESTED, DIRECTED TO BORROWER AT BORROWER'S ADDRESS APPEARING
ON AGENT'S RECORDS, AND SERVICE SO MADE SHALL BE DEEMED COMPLETED TWO (2) DAYS
AFTER THE SAME SHALL HAVE BEEN SO MAILED. BOTH PARTIES HERETO WAIVE THE RIGHT
TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BETWEEN BORROWER AND AGENT AND
BORROWER WAIVES THE RIGHT TO ASSERT IN ANY ACTION OR PROCEEDING INSTITUTED BY
AGENT WITH REGARD TO THIS AGREEMENT OR ANY OF THE OBLIGATIONS (EXCEPT TO THE
EXTENT THAT THE LAWS OF THE SELECTED FORUM REQUIRE ASSERTION OR LOSS OR
FORFEITURE THEREOF) ANY OFFSETS OR COUNTERCLAIMS WHICH IT MAY HAVE.
27. Limitation of Liability. Borrower acknowledges and
understands that in order to assure repayment of the Obligations hereunder
Agent may be required to exercise any and all of Agent's rights and remedies
hereunder and agrees that neither Agent nor any of Agent's agents shall be
liable for acts taken or omissions made in connection herewith or therewith
except for actual bad faith.
28. Entire Understanding. (a) This Agreement and the
Ancillary Agreements contain the entire understanding between Borrower, Agent
and each Lender and supersedes all prior agreements and understandings, if
any, relating to the subject matter hereof. Any promises, representations,
warranties or guarantees not herein contained and hereinafter made shall have
no force and effect unless in writing, signed by Borrower's, Agent's and each
Lender's respective officers. Neither this Agreement nor any portion or
provisions hereof may be changed, modified, amended, waived, supplemented,
discharged, cancelled or terminated orally or by any course of dealing, or in
any manner other than by an agreement in writing, signed by the party to
56
be charged. Borrower acknowledges that it has been advised by counsel in
connection with the execution of this Agreement and Ancillary Agreements and
is not relying upon oral representations or statements inconsistent with the
terms and provisions of this Agreement.
(b) The Required Lenders, Agent with the consent in writing
of the Required Lenders, and Borrower may, subject to the provisions hereof,
from time to time enter into written supplemental agreements to this Agreement
or the Ancillary Agreements executed by Borrower, for the purpose of adding or
deleting any provisions or otherwise changing, varying or waiving in any
manner the rights of the Lenders, Agent or Borrower thereunder or the
conditions, provisions or terms thereof or waiving any Event of Default
thereunder, but only to the extent specified in such written agreements;
provided, however, that Agent may, without the consent of any Lender, enter
into any supplemental agreement to amend the fees described in Section 5(b)
hereof; and provided, further that no such supplemental agreement shall,
without the consent of all the Lenders:
(i) increase the Commitment Percentage of any
Lender.
(ii) increase the Maximum Loan Amount, any
sublimits hereunder or the Receivables Advance Rate.
(iii) extend the maturity of any note or the due
date for any amount payable hereunder, or decrease the rate of interest or
reduce any fee payable by Borrower to Lenders pursuant to this Agreement.
(iv) alter the definition of the term Required
Lenders or alter, amend or modify this Section 28.
(v) release any Collateral during any calendar year
having an aggregate value in excess of $2,500,000, provided that consent of
all Lenders shall be required for the release of any Collateral to the extent
such release results in or would result in an overadvance.
(vi) change the rights and duties of Agent.
Any such supplemental agreement shall apply equally to each of the Lenders and
shall be binding upon Borrower, the Lenders, Agent and all future holders of
the Obligations. In the case of any waiver, Borrower, Agent and the Lenders
shall be restored to their former positions and rights, and any Event of
Default waived shall be deemed to be cured and not continuing, but no waiver
of a specific Event of Default shall extend to any subsequent Event of Default
(whether or not the subsequent Event of Default is the same as the Event of
Default which was waived), or impair any right consequent thereon.
29. Modification. This Agreement and the Ancillary
Agreements constitute the complete agreement between the parties with respect
to the subject matter hereof and thereof and may not be modified, altered or
amended except by an agreement in writing signed by the parties hereto and
thereto.
57
30. Severability. Wherever possible each provision of this
Agreement or the Ancillary Agreements shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Agreement or the Ancillary Agreements shall be prohibited by or invalid under
applicable law such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions thereof.
31. Captions. All captions are and shall be without
substantive meaning or content of any kind whatsoever.
32. Counterparts. This Agreement may be executed in one or
more counterparts, each of which taken together shall constitute one and the
same instrument.
33. Construction. The parties acknowledge that each party
and its counsel have reviewed this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement
or any amendments, schedules or exhibits thereto.
34. (a) Agreement Among Agent and Lenders. Each Lender
hereby designates BNY to act as Agent for such Lender under this Agreement and
the Ancillary Agreements. Each Lender hereby irrevocably authorizes Agent to
take such action on its behalf under the provisions of this Agreement and the
Ancillary Agreements and to exercise such powers and to perform such duties
hereunder and thereunder as are specifically delegated to or required of Agent
by the terms hereof and thereof and such other powers as are reasonably
incidental thereto and Agent shall hold all Collateral, payments of principal
and interest, fees (except the fees set forth in Sections 5(b)(ii), 5(b)(iii)
and 5(e), charges and collections (without giving effect to any collection
days) received pursuant to this Agreement, for the ratable benefit of Lenders.
Agent may perform any of its duties hereunder by or through its agents or
employees. As to any matters not expressly provided for by this Agreement
Agent shall not be required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be fully
protected in so acting or refraining from acting) upon the instructions of the
Required Lenders, and such instructions shall be binding; provided, however,
that Agent shall not be required to take any action which exposes Agent to
liability or which is contrary to this Agreement or the Ancillary Agreements
or applicable law unless Agent is furnished with an indemnification reasonably
satisfactory to Agent with respect thereto.
(b) Agent shall have no duties or responsibilities except
those expressly set forth in this Agreement and the Ancillary Agreements.
Neither Agent nor any of its officers, directors, employees or agents shall be
(i) liable for any action taken or omitted by them as such hereunder or in
connection herewith, unless caused by their gross negligence (but not mere
negligence) or willful misconduct or gross (not mere) negligence, or (ii)
responsible in any manner for any recitals, statements, representations or
warranties made by Borrower or any officer thereof contained in this
Agreement, or in any of the Ancillary Agreements or in any certificate,
report, statement or other document referred to or provided for in, or
received by Agent under or in connection with, this Agreement or any of the
Ancillary Agreements or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement, or any of the Ancillary
Agreements or for any failure of Borrower to perform its obligations
hereunder. Agent shall not be under any obligation to any Lender to ascertain
or to inquire as to
58
the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any of the Ancillary Agreements, or to
inspect the properties, books or records of Borrower. The duties of Agent as
respects the Loans to Borrower shall be mechanical and administrative in
nature; Agent shall not have by reason of this Agreement a fiduciary
relationship in respect of any Lender; and nothing in this Agreement,
expressed or implied, is intended to or shall be so construed as to impose
upon Agent any obligations in respect of this Agreement except as expressly
set forth herein.
(c) Notwithstanding anything to the contrary contained
herein, commencing with the first Business Day following the Closing Date,
each borrowing of Revolving Credit Advances shall be advanced by Agent and
each payment by Borrower on account of Revolving Credit Advances shall be
applied first to those Revolving Credit Advances made by Agent. On or before
1:00 P.M., New York time, on each Lender Settlement Date commencing with the
first Lender Settlement Date following the Closing Date, Agent and the Lenders
shall make certain payments as follows: (I) if the aggregate amount of new
Revolving Credit Advances made by Agent during the preceding Week exceeds the
aggregate amount of repayments applied to outstanding Revolving Credit
Advances during such preceding Week, then each Lender shall provide Agent with
funds in an amount equal to its Commitment Percentage of the difference
between (w) such Revolving Credit Advances and (x) such repayments and (II) if
the aggregate amount of repayments applied to outstanding Revolving Credit
Advances during such Week exceeds the aggregate amount of new Revolving Credit
Advances made during such Week, then Agent shall provide each Lender with its
Commitment Percentage of the difference between (y) such repayments and (z)
such Revolving Credit Advances.
(i) Each Lender shall be entitled to earn interest
at the applicable Contract Rate on outstanding Revolving Credit Advances which
it has funded.
(ii) Promptly following each Lender Settlement
Date, Agent shall submit to each Lender a certificate with respect to payments
received and Loans made during the Week immediately preceding such Lender
Settlement Date. Such certificate of Agent shall be conclusive in the absence
of manifest error.
(d) If any Lender or Participant (a "benefitted Lender")
shall at any time receive any payment of all or part of its Loans or interest
thereon, or receive any Collateral in respect thereof (whether voluntarily or
involuntarily or by set-off) in a greater proportion than any such payment to
and Collateral received by any other Lender, if any, in respect of such other
Lender's Loans, or interest thereon, and such greater proportionate payment or
receipt of Collateral is not expressly permitted hereunder, such benefitted
Lender shall purchase for cash from the other Lenders such portion of each
such other Lender's Loans, or shall provide such other Lender 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. Each Lender so purchasing a
portion of another Lender's Loans may exercise all rights of payment
(including, without limitation, rights of set-off) with respect to such
portion as fully as if such Lender were the direct holder of such portion.
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(e) Independently and without reliance upon Agent or any
other Lender, each Lender has made and shall continue to make (i) its own
independent investigation of the financial condition and affairs of Borrower
and its Subsidiaries in connection with the making and the continuance of the
Loans hereunder or the loans made under the Foreign Subsidiary Credit
Agreements (the "Foreign Loans") and the taking or not taking of any action in
connection herewith or therewith, and (ii) its own appraisal of the
creditworthiness of Borrower. Agent shall have no duty or responsibility,
either initially or on a continuing basis, to provide any Lender with any
credit or other information with respect thereto, whether coming into its
possession before making of the Loans or the Foreign Loans or at any time or
times thereafter except as shall be provided by Borrower or a Subsidiary of
Borrower pursuant to the terms hereof and thereof. Agent shall not be
responsible to any Lender for any recitals, statements, information,
representations or warranties herein or in any agreement, document,
certificate or a statement delivered in connection with or for the execution,
effectiveness, genuineness, validity, enforceability, collectability or
sufficiency of this Agreement, any Ancillary Agreement or any Foreign
Subsidiary Credit Agreement, or of the financial condition of Borrower or any
Subsidiary, or be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of
this Agreement, the Note, the Ancillary Agreements or any Foreign Subsidiary
Credit Agreement or the financial condition of Borrower, or the existence of
any Event of Default or any Default.
Agent may resign on sixty (60) days' written notice to each
of Lenders and Borrower and upon such resignation, the Required Lenders will
promptly designate a successor Agent reasonably satisfactory to Borrower.
Any such successor Agent shall succeed to the rights, powers
and duties of 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. After any Agent's resignation as Agent, the
provisions of this Section 34 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.
(f) If Agent shall request instructions from Lenders with
respect to any act or action (including failure to act) in connection with
this Agreement or any Ancillary Agreement, Agent shall be entitled to refrain
from such act or taking such action unless and until Agent shall have received
instructions from the Required Lenders; and Agent shall not incur liability to
any Person by reason of so refraining. Without limiting the foregoing, Lenders
shall not have any right of action whatsoever against Agent as a result of its
acting or refraining from acting hereunder in accordance with the instructions
of the Required Lenders.
(g) Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, statement,
certificate, telex, teletype or telecopier message, cablegram, order or other
document or telephone message believed by it to be genuine and correct and to
have been signed, sent or made by the proper person or entity, and, with
respect to all legal matters pertaining to this Agreement and the Ancillary
Agreements and its duties hereunder, upon advice of counsel selected by it.
Agent may employ agents and attorneys-in-fact and shall not be liable for the
default or misconduct of any such agents or attorneys-in-fact selected by
Agent with reasonable care.
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(h) Agent shall not be deemed to have knowledge or notice of
the occurrence of any Default or Event of Default hereunder or under the
Ancillary Agreements, unless Agent has received notice from a Lender or
Borrower referring to this Agreement or the Ancillary Agreements, describing
such Default or Event of Default and stating that such notice is a "notice of
default". In the event that Agent receives such a notice, Agent shall give
notice thereof to Lenders. 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 Agent shall have received such
directions, Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of Lenders.
(i) To the extent Agent is not reimbursed and indemnified by
Borrower, each Lender will reimburse and indemnify Agent in proportion to its
respective portion of the Loans (or, if no Loans are outstanding, according to
its Commitment Percentage), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, fees or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against Agent in performing its duties
hereunder, including, but not limited to fees in connection with Paragraph
5(b)(ii) hereof, in the event such fees exceed $75,000 and Borrower is not
responsible for such fees pursuant to such Paragraph, or in any way relating
to or arising out of this Agreement or any Ancillary Agreement, provided that,
Lenders shall not be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from Agent's gross (but not mere) negligence or
willful misconduct.
(j) With respect to the obligation of Agent to lend under
this Agreement, the Loans made by it shall have the same rights and powers
hereunder as any other Lender and as if it were not performing the duties as
Agent specified herein; and the term "Lender" or any similar term shall,
unless the context clearly otherwise indicates, include Agent in its
individual capacity as a Lender. Agent may engage in business with Borrower as
if it were not performing the duties specified herein, and may accept fees and
other consideration from Borrower for services in connection with this
Agreement or otherwise without having to account for the same to Lenders.
(k) To the extent Agent receives documents and information
from Borrower pursuant to the terms of this Agreement or any Foreign
Subsidiary Credit Agreement, Agent will promptly furnish such documents and
information to Lenders.
(l) Without prejudice to their respective obligations to the
Lenders under the other provisions of this Agreement, Borrower hereby
undertakes with Agent to pay to Agent from time to time on demand all amounts
from time to time due and payable by it for the account of Agent or the
Lenders or any of them pursuant to this Agreement to the extent not already
paid. Any payment made pursuant to any such demand shall pro tanto satisfy
Borrower's obligations to make payments for the account of the Lenders or the
relevant one or more of them pursuant to this Agreement.
(m)(1) Each Lender shall, to the extent of the percentage
amount equal to the product of such Lender's
Commitment Percentage times the aggregate amount of
all Foreign Subsidiary Obligations be deemed to
have irrevocably purchased an undivided risk
participation (the "Risk
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Participation") in all such outstanding Foreign
Subsidiary Obligations. The Risk Participation
shall be payable from time to time by each Lender
to Agent on demand following receipt of notice by
such Lender of (i) the incurrence by a BNY Company
of Foreign Losses and the amount thereof or (ii)
the occurrence of an event of default under the
applicable Foreign Subsidiary Credit Agreement
(each, a "Payment Event"). Prior to the occurrence
of a Payment Event (the "Risk Participation
Period"), Agent shall pay each Lender an amount
calculated at a rate per annum equal to one and one
quarter percent (1 1/4%) on its pro rata share of
the outstanding amount of Foreign Subsidiary
Obligations as at the end of each month (the "Risk
Participation Fee"), payable by Agent five (5)
Business Days following the end of such month. Such
fee shall be calculated on the basis of a year of
such number of days as is provided in the
applicable Foreign Subsidiary Credit Agreement. In
addition to the Risk Participation Fee, each Lender
shall be entitled to receive its pro rata share of
all additional fees paid to a BNY Company for
amending or waiving the terms of any Foreign
Subsidiary Credit Agreements. Other than the Risk
Participation Fee and the foregoing amendment fee,
no Lenders shall be entitled to any other fees
relating to the purchase of the Risk Participation.
Agent's obligation to pay the foregoing fees shall
terminate upon the occurrence of a Payment Event.
(2) Following payment by any Lender of its Risk
Participation as provided above, such Lender shall
be entitled to receive its pro rata share of
outstanding Foreign Subsidiary Obligations
consisting of principal, interest and fees as
prescribed in the applicable Foreign Subsidiary
Credit Agreement, provided, however, that such
Lender shall not be entitled to any interest or
fees which are specifically designated in such
agreement to be payable to a BNY Company as "agent"
under the applicable Foreign Subsidiary Credit
Agreement. The foregoing payments of principal,
interest and fees shall be payable to each Lender
as and when paid to Agent or another BNY Company
(whether directly from Borrower or a Subsidiary of
Borrower or under any guarantee or as respects any
collateral). Any determination by Agent or any
other BNY Company as to the allocation of any
payment or otherwise to the Foreign Subsidiary
Obligations or to the interest, principal, fees or
any other amount payable in respect of the Foreign
Subsidiary Credit Agreements shall be final and
conclusive absent manifest error.
(3) Each Lender's Risk Participation shall continue
until the last to occur of any of the following
events: (A) the BNY Companies cease to be obligated
to make loans to Borrowers' foreign Subsidiaries in
accordance with the Foreign Subsidiary Credit
Agreements; (B) no Foreign Subsidiary Obligations
remain outstanding or (C) all Persons (other than
Borrower or any of its foreign Subsidiaries) have
been fully reimbursed for all payments made under
or relating to such Foreign Subsidiary Obligations.
The obligation of each Lender to make payments to
Agent and of Agent to make payments to the Lender
in accordance with the provisions of this
62
subsection (m) shall be absolute and unconditional.
All payments to be made hereunder by any Lender to
Agent shall be made without any set-off, deduction
withholding or retention whatsoever. To the extent
that any Lender makes or is obliged to make any
such deduction, withholding or retention such
Lender shall forthwith make such further payment to
Agent as may be required so that Agent receives in
aggregate a sum equal to the payment which should
have been made by Agent hereunder if such
deduction, withholding or retention had not been
made.
(4) Agent and the applicable BNY Company will have the
exclusive right to manage, perform and enforce the
terms of the Foreign Subsidiary Credit Agreements
and to exercise and enforce all privileges and
rights exercisable or enforceable by it thereunder,
for the joint benefit of the applicable BNY Company
and each other Lender, according to Agent's and
such BNY Company's discretion and the exercise of
its business judgment. Agent and the applicable BNY
Company may, in its sole discretion and without the
consent of the other Lenders amend or modify the
Foreign Subsidiary Credit Agreement, or waive its
rights thereunder; provided, however, that no such
amendment or waiver shall, without the consent of
all the Lenders, (i) increase the maximum loan
amount under the applicable Foreign Subsidiary
Credit Agreement or (ii) extend the maturity of any
note or the due date for any amount payable
thereunder, or decrease the rate of interest or
reduce any fee payable by a Foreign Subsidiary to a
BNY Company pursuant to the applicable Foreign
Subsidiary Credit Agreement (other than interest or
fees which are specifically designated in such
agreement to be payable to a BNY Company as "agent"
under the applicable Foreign Subsidiary Credit
Agreement, in which event no consent shall be
required).
35. Determination of Dollar Equivalent. For purposes of this
Agreement, the Dollar Equivalent of each Alternate Currency Loan designated in
an Alternate Currency shall be recalculated (i) on each borrowing of an
Alternate Currency Loan, (ii) on each date that the Maximum Loan Amount or the
Formula Amount is reduced and (iii) on the last Business Day of each month.
The Dollar Equivalent for each Alternate Currency Loan shall remain in effect
until the same is recalculated by Agent as provided above and notice of such
recalculation is sent to Borrower. Agent shall promptly notify Borrower and
the Lenders of each such determination of the Dollar Equivalent for each
Alternate Currency Loan.
36. European Monetary Union. It is hereby acknowledged that
during the term of this Agreement the United Kingdom may adopt a single
European currency as its lawful currency in place of Sterling as part of the
anticipated European Economic and Monetary Union. It is hereby acknowledged
and agreed that "Sterling", as defined herein, shall include any such
successor currency and that conversion into such successor currency shall be
made at the official rate of conversion on the date on which Sterling is so
replaced, and that the denomination of the original currency shall be retained
hereunder for so long as it is legally permissible. It is hereby
63
further acknowledged and agreed that the provisions of this Agreement relating
to Sterling Loans shall remain in full force and effect upon such conversion,
and that neither the introduction of a single European currency, the
replacement of Sterling thereby, the fixing of the official rate of
conversion, nor any economic consequences resulting therefrom shall give rise
to any right to terminate, contest, cancel, modify or renegotiate the
provisions of this Agreement.
37. Deliveries. Notwithstanding the method of delivery of
any document, certificate, report or other writing delivered hereunder by
Borrower or any of its officers or directors, such items shall be deemed to
have been delivered by United States mail.
38. Additional Documents. Execute and deliver to Agent, upon
request, such documents and agreements as Agent may, from time to time,
reasonably request to carry out the purposes, terms or conditions of this
Agreement.
[INTENTIONAL END OF PAGE; SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, this Agreement has been duly executed as
of the day and year first above written.
TMP WORLDWIDE INC.
By: _______________________________
Name: Xxxxxx Xxxxxxxx
Title: Vice President
BNY FINANCIAL CORPORATION,
as Agent and as Lender
By: _______________________________
Name: _____________________________
Title: ____________________________
Commitment Percentage: ________
DEUTSCHE FINANCIAL SERVICES HOLDING
CORPORATION, as Lender
By: _______________________________
Name: _____________________________
Title: ____________________________
Commitment Percentage: ________
BANK POLSKA KASA OPIEKI, S.A.,
as Lender
By: _______________________________
Name: _____________________________
Title: ____________________________
Commitment Percentage: ________
SCHEDULES
Schedule A - Proposed Mergers
Lenders consent to and waive the following proposed mergers:
Target Acquisition Corp. into Borrower
Directory Services International Corporation into Borrower
BMS Acquisition Corp. into Borrower
HGI Acquisition Corp. into Borrower
Xxxxxx Acquisition Corp. into Borrower
YPMS Acquisition Corp. into Borrower
BBL Acquisition Corp into Borrower
Xxxxxxxx Direct, Inc. into Xxxxxxxx, Inc.
Xxxxxxxx, Inc into Borrower
BTD Acquisition, Inc into Interdict Inc.
CPC Acquisition Corp. into Interdirect, Inc.
Interdirect, Inc into Borrower
Online Career Management, Inc. into Volando, Inc
Schedule 1(A)
Permitted Liens
Schedule 1(B)
Scheduled Affiliates
General Directory Advertising Services, Inc.,
a Delaware corporation
M.S.I. - Market Support International, Inc., a
New Jersey corporation
Schedule 12(d)
Record Locations
Schedule 12(j) Licenses, Patents, Trademarks and Copyrights
Schedule 12(l) - Inventory Locations
Schedule 12(m) - Permitted Indebtedness
Permitted Guaranties
Tradestyles
