EXHIBIT 10.1
EXECUTION COPY
CREDIT AND GUARANTY AGREEMENT
DATED AS OF APRIL 11, 2006
AMONG
NAVISITE, INC.,
CERTAIN SUBSIDIARIES OF NAVISITE, INC.,
AS GUARANTORS,
VARIOUS LENDERS,
AND
SILVER POINT FINANCE, LLC
AS ADMINISTRATIVE AGENT AND COLLATERAL AGENT
$73,000,000
SENIOR SECURED CREDIT FACILITIES
TABLE OF CONTENTS
PAGE
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SECTION 1. DEFINITIONS AND INTERPRETATION................................. 1
1.1 Definitions...................................................... 1
1.2 Accounting Terms................................................. 28
1.3 Interpretation, etc.............................................. 28
SECTION 2. LOANS.......................................................... 28
2.1 Term Loan........................................................ 28
2.2 Revolving Loans.................................................. 29
2.3 [Reserved]....................................................... 30
2.4 Pro Rata Shares; Availability of Funds........................... 30
2.5 Use of Proceeds.................................................. 31
2.6 Evidence of Debt; Register; Lenders' Books and Records; Notes.... 31
2.7 Interest on Loans................................................ 32
2.8 Conversion/Continuation.......................................... 33
2.9 Default Interest................................................. 34
2.10 Fees............................................................. 34
2.11 Scheduled Payments/Commitment Reductions......................... 35
2.12 Voluntary Prepayments/Commitment Reductions...................... 36
2.13 Mandatory Prepayments/Commitment Reductions...................... 37
2.14 Application of Prepayments/Reductions............................ 39
2.15 General Provisions Regarding Payments............................ 40
2.16 Ratable Sharing.................................................. 42
2.17 Making or Maintaining LIBOR Rate Loans........................... 42
2.18 Increased Costs; Capital Adequacy................................ 44
2.19 Taxes; Withholding, etc.......................................... 45
2.20 Obligation to Mitigate........................................... 48
2.21 Defaulting Lenders............................................... 48
2.22 Removal or Replacement of a Lender............................... 49
SECTION 3. CONDITIONS PRECEDENT........................................... 50
3.1 Closing Date..................................................... 50
3.2 Conditions to Each Credit Extension.............................. 55
SECTION 4. REPRESENTATIONS AND WARRANTIES................................. 56
4.1 Organization; Requisite Power and Authority; Qualification....... 56
4.2 Capital Stock and Ownership...................................... 56
4.3 Due Authorization................................................ 57
4.4 No Conflict...................................................... 57
4.5 Governmental Consents............................................ 57
4.6 Binding Obligation............................................... 57
4.7 Historical Financial Statements.................................. 57
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4.8 Projections...................................................... 58
4.9 No Material Adverse Change....................................... 58
4.10 No Restricted Junior Payments.................................... 58
4.11 Adverse Proceedings, etc......................................... 58
4.12 Payment of Taxes................................................. 58
4.13 Properties....................................................... 59
4.14 Environmental Matters............................................ 59
4.15 No Defaults...................................................... 60
4.16 Material Contracts............................................... 60
4.17 Governmental Regulation.......................................... 60
4.18 Margin Stock..................................................... 60
4.19 Employee Matters................................................. 60
4.20 Employee Benefit Plans........................................... 61
4.21 Certain Fees..................................................... 62
4.22 Silicon Valley Bank Facility..................................... 62
4.23 [Reserved........................................................ 62
4.24 Compliance with Statutes, etc.................................... 62
4.25 Disclosure....................................................... 62
4.26 Patriot Act...................................................... 63
SECTION 5. AFFIRMATIVE COVENANTS.......................................... 63
5.1 Financial Statements and Other Reports........................... 63
5.2 Existence........................................................ 68
5.3 Payment of Taxes and Claims...................................... 68
5.4 Maintenance of Properties; Payments of Leaseholds................ 68
5.5 Insurance........................................................ 68
5.6 Inspections...................................................... 69
5.7 Lenders Meetings................................................. 69
5.8 Compliance with Laws............................................. 69
5.9 Environmental.................................................... 69
5.10 Subsidiaries..................................................... 72
5.11 Real Estate Assets............................................... 73
5.12 Interest Rate Protection......................................... 74
5.13 Further Assurances............................................... 74
5.14 Cash Management Systems.......................................... 74
5.15 Post Closing Matters............................................. 74
5.16 Books............................................................ 74
5.17 Atlantic Existing Credit Facility................................ 75
5.18 Atlantic Term Loan Facility...................................... 75
SECTION 6. NEGATIVE COVENANTS............................................. 75
6.1 Indebtedness..................................................... 75
6.2 Liens............................................................ 77
6.3 Equitable Lien................................................... 79
6.4 No Further Negative Pledges...................................... 79
6.5 Restricted Junior Payments....................................... 79
6.6 Restrictions on Subsidiary Distributions......................... 79
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6.7 Investments...................................................... 80
6.8 Financial Covenants.............................................. 80
6.9 Fundamental Changes; Disposition of Assets; Acquisitions......... 83
6.10 Disposal of Subsidiary Interests................................. 84
6.11 Sales and Lease Backs............................................ 84
6.12 Transactions with Shareholders and Affiliates.................... 84
6.13 Conduct of Business.............................................. 85
6.14 Permitted Activities of Company.................................. 85
6.15 Severance and Benefit Plans...................................... 85
6.16 Amendments or Waivers of with respect to Subordinated
Indebtedness..................................................... 85
6.17 Fiscal Year...................................................... 85
6.18 Deposit Accounts................................................. 85
6.19 Amendments to Organizational Agreements and Material Contracts... 85
6.20 Prepayments of Certain Indebtedness.............................. 85
SECTION 7. GUARANTY....................................................... 86
7.1 Guaranty of the Obligations...................................... 86
7.2 Contribution by Guarantors....................................... 86
7.3 Payment by Guarantors............................................ 87
7.4 Liability of Guarantors Absolute................................. 87
7.5 Waivers by Guarantors............................................ 89
7.6 Guarantors' Rights of Subrogation, Contribution, etc............. 90
7.7 Subordination of Other Obligations............................... 91
7.8 Continuing Guaranty.............................................. 91
7.9 Authority of Guarantors or Company............................... 91
7.10 Financial Condition of Company................................... 91
7.11 Bankruptcy, etc.................................................. 91
7.12 Discharge of Guaranty Upon Sale of Guarantor..................... 92
7.13 Taxes............................................................ 92
SECTION 8. EVENTS OF DEFAULT.............................................. 92
8.1 Events of Default................................................ 92
SECTION 9. AGENTS......................................................... 96
9.1 Appointment of Agents............................................ 96
9.2 Powers and Duties................................................ 96
9.3 General Immunity................................................. 96
9.4 Agents Entitled to Act as Lender................................. 97
9.5 Lenders' Representations, Warranties and Acknowledgment.......... 98
9.6 Right to Indemnity............................................... 98
9.7 Successor Administrative Agent................................... 99
9.8 Collateral Documents and Guaranty................................ 99
SECTION 10. MISCELLANEOUS................................................. 100
10.1 Notices.......................................................... 100
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10.2 Expenses......................................................... 101
10.3 Indemnity........................................................ 101
10.4 Set Off.......................................................... 102
10.5 Amendments and Waivers........................................... 102
10.6 Successors and Assigns; Participations........................... 104
10.7 Independence of Covenants........................................ 107
10.8 Survival of Representations, Warranties and Agreements........... 108
10.9 No Waiver; Remedies Cumulative................................... 108
10.10 Marshalling; Payments Set Aside.................................. 108
10.11 Severability..................................................... 108
10.12 Obligations Several; Independent Nature of Lenders' Rights....... 108
10.13 Headings......................................................... 109
10.14 APPLICABLE LAW................................................... 109
10.15 CONSENT TO JURISDICTION.......................................... 109
10.16 WAIVER OF JURY TRIAL............................................. 109
10.17 Confidentiality.................................................. 110
10.18 Usury Savings Clause............................................. 111
10.19 Counterparts..................................................... 111
10.20 Effectiveness.................................................... 111
10.21 Original Issue Discount.......................................... 111
10.22 Patriot Act...................................................... 112
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APPENDICES: A-1 Term Loan Commitments
A-2 Revolving Commitments
B Notice Addresses
SCHEDULES: 1.1 Impaired Leases
4.1 Jurisdictions of Organization and Qualification
4.2 Capital Stock and Ownership
4.11 Adverse Proceedings
4.13(b) Real Estate Assets
4.22 SVB Receivables
4.16 Material Contracts
5.11 Closing Date Leasehold Properties
5.15 Certain Post Closing Matters
6.1 Certain Indebtedness
6.2 Certain Liens
6.7 Certain Investments
6.12 Certain Affiliate Transactions
EXHIBITS: A-1 Funding Notice
A-2 Conversion/Continuation Notice
B-1 Term Loan Note
B-2 Revolving Loan Note
C Compliance Certificate
D-1 Opinion of BRL Law Group LLC
X-0 Xxxxxxx xx Xxxxxxxxx Xxxx Xxxxxxxx Xxxxxxx XXX
X-0 Opinion of Xxxxxx Xxxxxx LLP
E Assignment Agreement
F Certificate Regarding Non Bank Status
G Closing Date Certificate
H Counterpart Agreement
I Pledge and Security Agreement
J Subordination Agreement
K Landlord Waiver and Consent Agreement
L Warrant Agreement
M Severance Plan
N Stock Incentive Plan
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CREDIT AND GUARANTY AGREEMENT
This CREDIT AND GUARANTY AGREEMENT, dated as of April 11, 2006, is entered
into by and among NAVISITE, INC., a Delaware corporation ("COMPANY"), and
CERTAIN SUBSIDIARIES OF COMPANY, as Guarantors ("GUARANTORS"), the Lenders party
hereto from time to time, SILVER POINT FINANCE, LLC ("SILVER POINT"), as
Administrative Agent (together with its permitted successors, in such capacity,
"ADMINISTRATIVE AGENT") and Collateral Agent (together with its permitted
successors, in such capacity, "COLLATERAL AGENT").
RECITALS:
WHEREAS, capitalized terms used in these Recitals shall have the respective
meanings set forth for such terms in Section 1.1 hereof;
WHEREAS, Lenders have agreed to extend certain credit facilities to
Company, in an aggregate amount not to exceed $73,000,000, consisting of
$70,000,000 aggregate principal amount of a Term Loan and up to $3,000,000
aggregate principal amount of Revolving Commitments, the proceeds of which will
be used to refinance certain indebtedness of Company and Guarantors, for working
capital and other general corporate purposes, and to pay certain fees and
expenses associated with the Transactions;
WHEREAS, Guarantors have agreed to guaranty the Obligations of Company
hereunder; and
WHEREAS, each Credit Party has agreed to secure all of its Obligations by
granting to Collateral Agent, for the benefit of Secured Parties, a First
Priority Lien on substantially all of its assets, including a pledge of all of
the Capital Stock of each of its Domestic Subsidiaries and 65% of all the
Capital Stock of each of its Foreign Subsidiaries,
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
SECTION 1. DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS. The following terms used herein, including in the preamble,
recitals, exhibits and schedules hereto, shall have the following meanings:
"ACT" as defined in Section 4.26.
"ADDITIONAL LOANS" as defined in Section 5.17.
"ADJUSTED LIBOR RATE" means, for any Interest Rate Determination Date with
respect to an Interest Period for a LIBOR Rate Loan, the greater of (A) three
and a half percent (3.50%) per annum and (B) the rate per annum obtained by
dividing (and
rounding upward to the next whole multiple of 1/16 of 1%) (i) (a) the rate per
annum (rounded to the nearest 1/100 of 1%) equal to the rate determined by
Administrative Agent to be the offered rate which appears on the page of the
Telerate Screen which displays an average British Bankers Association Interest
Settlement Rate (such page currently being page number 3740 or 3750, as
applicable) for deposits (for delivery on the first day of such period) with a
term equivalent to such period in Dollars, determined as of approximately 11:00
a.m. (London, England time) on such Interest Rate Determination Date, or (b) in
the event the rate referenced in the preceding clause (a) does not appear on
such page or service or if such page or service shall cease to be available, the
rate per annum (rounded to the nearest 1/100 of 1%) equal to the rate determined
by Administrative Agent to be the offered rate on such other page or other
service which displays an average British Bankers Association Interest
Settlement Rate for deposits (for delivery on the first day of such period) with
a term equivalent to such period in Dollars, determined as of approximately
11:00 a.m. (London, England time) on such Interest Rate Determination Date, or
(c) in the event the rates referenced in the preceding clauses (a) and (b) are
not available, the rate per annum (rounded to the nearest 1/100 of 1%) equal to
the rate determined by Administrative Agent in accordance with its customary
procedures and utilizing such electronic or quotation as it considers
appropriate, by (ii) an amount equal to (a) one minus (b) the Applicable Reserve
Requirement.
"ADMINISTRATIVE AGENT" as defined in the preamble hereto.
"ADMINISTRATIVE AGENT'S ACCOUNT" means an account at a bank designated by
Administrative Agent from time to time as the account into which Credit Parties
shall make all payments to Administrative Agent for the benefit of Agent and
Lenders under this Agreement and the other Credit Documents.
"ADVERSE PROCEEDING" means any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration (whether or not purportedly on behalf of Company or any of its
Subsidiaries) at law or in equity, or before or by any Governmental Authority,
domestic or foreign (including any Environmental Claims) or other regulatory
body or any arbitrator, whether pending or, to the best knowledge of Company or
any of its Subsidiaries, threatened against or affecting Company or any of its
Subsidiaries or any property of Company or any of its Subsidiaries.
"AFFECTED LENDER" as defined in Section 2.17(b).
"AFFECTED LOANS" as defined in Section 2.17(b).
"AFFILIATE" means, as applied to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling," "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power (i) to vote 5% or more of the Securities having
ordinary voting power for the election of directors of such
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Person, or (ii) to direct or cause the direction of the management and policies
of that Person, whether through the ownership of voting securities or by
contract or otherwise. Notwithstanding anything to the contrary herein, in no
event shall any Agent or Lender be considered an "Affiliate" of any Credit
Party.
"AGENT" means each of Administrative Agent and Collateral Agent.
"AGGREGATE AMOUNTS DUE" as defined in Section 2.16.
"AGGREGATE PAYMENTS" as defined in Section 7.2.
"AGREEMENT" means this Credit and Guaranty Agreement, dated as of April 11,
2006, as it may be amended, restated, supplemented or otherwise modified from
time to time.
"APPLICABLE MARGIN" means (i) with respect to Loans that are LIBOR Rate
Loans, a percentage equal to 8.00% per annum and (ii) with respect to Loans that
are Base Rate Loans, a percentage equal to 7.00% per annum.
"APPLICABLE RESERVE REQUIREMENT" means, at any time, for any LIBOR Rate
Loan, the maximum rate, expressed as a decimal, at which reserves (including,
without limitation, any basic marginal, special, supplemental, emergency or
other reserves) are required to be maintained with respect thereto against
"Eurocurrency liabilities" (as such term is defined in Regulation D) under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System or other applicable banking regulator. Without limiting the
effect of the foregoing, the Applicable Reserve Requirement shall reflect any
other reserves required to be maintained by such member banks with respect to
(i) any category of liabilities which includes deposits by reference to which
the applicable Adjusted LIBOR Rate or any other interest rate of a Loan is to be
determined, or (ii) any category of extensions of credit or other assets which
include LIBOR Rate Loans. A LIBOR Rate Loan shall be deemed to constitute
Eurocurrency liabilities and as such shall be deemed subject to reserve
requirements without benefits of credit for proration, exceptions or offsets
that may be available from time to time to the applicable Lender. The rate of
interest on LIBOR Rate Loans shall be adjusted automatically on and as of the
effective date of any change in the Applicable Reserve Requirement.
"ASSET SALE" means a sale, lease or sub lease (as lessor or sublessor),
sale and leaseback, assignment, conveyance, transfer or other disposition to, or
any exchange of property with, any Person (other than Company or any Guarantor),
in one transaction or a series of transactions, of all or any part of Company's
or any of its Subsidiaries' businesses, assets or properties of any kind,
whether real, personal, or mixed and whether tangible or intangible, whether now
owned or hereafter acquired, including, without limitation, the Capital Stock of
any of Company's Subsidiaries, other than inventory sold or leased in the
ordinary course of business.
"ASSIGNMENT AGREEMENT" means an Assignment and Assumption Agreement
substantially in the form of Exhibit E, with such amendments or modifications as
may be approved by Administrative Agent.
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"ATLANTIC" means Atlantic Investors, LLC, a Delaware limited liability
company.
"ATLANTIC COLLATERAL RELEASE" means a release, in form and substance
satisfactory to Administrative Agent, pursuant to which Atlantic releases all
collateral security granted to it by any Credit Party to secure any obligation
such Credit Party may have to Atlantic.
"ATLANTIC DEBT DOCUMENTS" means the collective reference to the Atlantic
Existing Credit Facility, the Atlantic Term Loan Agreement and all documents,
instruments and agreements executed or delivered in connection therewith, as the
same may be amended, restated, supplemented or otherwise modified from time to
time, but only to the extent permitted under the terms hereof.
"ATLANTIC EXISTING CREDIT FACILITY" means the $3,691,099.53 Amended and
Restated Loan Agreement, dated as of the date hereof, between Company and
Atlantic.
"ATLANTIC FUND GUARANTY" means a guaranty of Atlantic's obligations under
the Atlantic Term Loan Agreement made by Atlantic Related Entity in favor of
Company and Administrative Agent, in form and substance satisfactory to
Administrative Agent.
"ATLANTIC PLEDGE" means a pledge agreement made by Atlantic in favor of
Collateral Agent pursuant to which Atlantic pledges all shares of Company owned
by it to secure any Supplemental Obligations from time to time outstanding, in
form and substance satisfactory to Agents.
"ATLANTIC RELATED ENTITY" means Unicorn Worldwide Holdings Limited, a
British Virgin Islands corporation.
"ATLANTIC SIDE LETTER" means that certain letter agreement between Atlantic
and Administrative Agent, dated the date hereof, relating to compensation to be
provided in connection with the Supplemental Obligations.
"ATLANTIC TERM LOAN AGREEMENT" means a subordinated, delayed draw term loan
facility in the original principal amount of $5,000,000 (as such amount may be
reduced pursuant to the terms thereof and of the Subordination Agreement)
provided by Atlantic to Company, in form and substance satisfactory to
Administrative Agent.
"AUTHORIZED OFFICER" means, as applied to any Person, any individual
holding the position of chairman of the board (if an officer), chief executive
officer, president or one of its vice presidents (or the equivalent thereof),
and such Person's chief financial officer or treasurer.
"AVERAGE NET BOOKINGS" means, at any time of determination, the arithmetic
average of the New Bookings for each of the prior six months. As used herein,
"NET BOOKINGS" means, with respect to the Company's Hosting and Outsourcing
business unit, for any month (i) new minimum monthly recurring revenue booked
during such month that pursuant to signed and accepted sales orders, minus (ii)
minimum monthly recurring revenue under orders cancelled during such month and
booked during a prior period and
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not then recognized as revenue, minus (iii) any reduction in monthly recurring
revenue in connection with the loss of a customer during such month or a
reduction in a customers minimum committed monthly revenue made during such
month.
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy," as now and hereafter in effect, or any successor statute.
"BASE RATE" means, for any day, a rate per annum equal to the greater of
(i) the Prime Rate in effect on such day, and (ii) the Federal Funds Effective
Rate in effect on such day plus 3%. Any change in the Base Rate due to a change
in the Prime Rate or the Federal Funds Effective Rate shall be effective on the
effective day of such change in the Prime Rate or the Federal Funds Effective
Rate, respectively.
"BASE RATE LOAN" means a Loan bearing interest at a rate determined by
reference to the Base Rate.
"BENEFICIARY" means each Agent and each Lender.
"BLOCKED ACCOUNT" has the meaning provided in the Pledge and Security
Agreement.
"BUSINESS DAY" means (i) any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the State of New York or is a day on
which banking institutions located in such state are authorized or required by
law or other governmental action to close, and (ii) with respect to all notices,
determinations, fundings and payments in connection with the Adjusted LIBOR Rate
or any LIBOR Rate Loans, the term "BUSINESS DAY" shall mean any day which is a
Business Day described in clause (i) and which is also a day for trading by and
between banks in Dollar deposits in the London interbank market.
"CAPITAL LEASE" means, as applied to any Person, any lease of (or other
arrangement conveying the right to use) any property (whether real, personal or
mixed) by that Person as lessee (or the equivalent) that, in conformity with
GAAP, is or should be accounted for as a capital lease on the balance sheet of
that Person.
"CAPITAL STOCK" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation),
including, without limitation, partnership interests and membership interests,
and any and all warrants, rights or options to purchase or other arrangements or
rights to acquire any of the foregoing.
"CASH" means money, currency or a credit balance in any demand or Deposit
Account.
"CASH EQUIVALENTS" means, as at any date of determination, (i) marketable
securities (a) issued or directly and unconditionally guaranteed as to interest
and principal by the United States Government or (b) issued by any agency of the
United States the obligations of which are backed by the full faith and credit
of the United States, in each
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case maturing within one year after such date; (ii) marketable direct
obligations issued by any state of the United States of America or any political
subdivision of any such state or any public instrumentality thereof, in each
case maturing within one year after such date and having, at the time of the
acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Xxxxx'x; (iii) commercial paper maturing no more than one year from the date of
creation thereof and having, at the time of the acquisition thereof, a rating of
at least A-1 from S&P or at least P-1 from Xxxxx'x; (iv) certificates of deposit
or bankers' acceptances maturing within one year after such date and issued or
accepted by any Lender or by any commercial bank organized under the laws of the
United States of America or any state thereof or the District of Columbia that
(a) is at least "adequately capitalized" (as defined in the regulations of its
primary Federal banking regulator), and (b) has Tier 1 capital (as defined in
such regulations) of not less than $100,000,000; and (v) shares of any money
market mutual fund that (a) has at least 95% of its assets invested continuously
in the types of investments referred to in clauses (i) and (ii) above, (b) has
net assets of not less than $500,000,000, and (c) has the highest rating
obtainable from either S&P or Xxxxx'x.
"CERTIFICATE REGARDING NON BANK STATUS" means a certificate substantially
in the form of Exhibit F.
"CHANGE OF CONTROL" means, at any time, (i) unless Company's Leverage Ratio
as at the end of the most recent Fiscal Quarter ending after the Closing Date is
less than 3.0 to 1.0, Atlantic shall cease to beneficially own and control at
least 30% on a fully diluted basis of the economic and voting interests in the
Capital Stock of Company; (ii) any Person or "group" (within the meaning of
Rules 13d-3 and 13d-5 under the Exchange Act) other than Atlantic or an
affiliate of Atlantic shall beneficially own and control 50% or more of the
then-outstanding voting interests in the Capital Stock of Company; (iii) Company
shall cease to, directly or indirectly, beneficially own and control 100% on a
fully diluted basis of the economic and voting interest in the Capital Stock of
any Guarantor; (iv) the majority of the seats (other than vacant seats) on the
board of directors (or similar governing body) of Company cease to be occupied
by Persons who either (a) were members of the board of directors of Company on
the Closing Date, or (b) were nominated for election by the board of directors
of Company, a majority of whom were directors on the Closing Date or whose
election or nomination for election was previously approved by a majority of
such directors; or (v) Atlantic shall grant, or suffer to exist, any Lien on any
shares of Company owned by it to the extent that a foreclosure thereon would
result in a Change of Control under clauses (i) through (ii), above..
"CLASS" means (i) with respect to Lenders, each of the following classes of
Lenders: (a) Lenders having Term Loan Exposure and (b) Lenders having Revolving
Exposure, and (ii) with respect to Loans, each of the following classes of
Loans: (a) the Term Loan and (b) Revolving Loans.
"CLOSING DATE" means the date on which the Term Loan is made.
"CLOSING DATE CERTIFICATE" means a Closing Date Certificate substantially
in the form of Exhibit G-1.
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"COLLATERAL" means, collectively, all of the real, personal and mixed
property (including Capital Stock) in which Liens are purported to be granted
pursuant to the Collateral Documents as security for the Obligations.
"COLLATERAL AGENT" as defined in the preamble hereto.
"COLLATERAL DOCUMENTS" means the Pledge and Security Agreement, the
Landlord Personal Property Collateral Access Agreements, if any, and all other
instruments, documents and agreements delivered by any Credit Party pursuant to
this Agreement or any of the other Credit Documents in order to grant to
Collateral Agent, for the benefit of Secured Parties, a Lien on any real,
personal or mixed property of that Credit Party as security for the Obligations
(including, without limitation, any Mortgage required to be executed and
delivered by any Credit Party after the Closing Date under the terms of this
Agreement).
"COLLATERAL QUESTIONNAIRE" means a certificate in form satisfactory to
Collateral Agent that provides information with respect to the personal or mixed
property of each Credit Party.
"COMMITMENT" means any Revolving Commitment or Term Loan Commitment.
"COMPANY" as defined in the preamble hereto.
"COMPLIANCE CERTIFICATE" means a Compliance Certificate substantially in
the form of Exhibit C.
"CONSOLIDATED ADJUSTED EBITDA" means, for any period, an amount determined
for Company and its Subsidiaries on a consolidated basis equal to (i) the sum,
without duplication, of the amounts for such period of (x) Consolidated Net
Income, plus (y) to the extent deducted in determining Consolidated Net Income
(a) Consolidated Interest Expense, plus (b) provisions for Taxes based on
income, plus (c) total depreciation expense, plus (d) total amortization
expense, plus (e) other non-Cash items reducing Consolidated Net Income
(excluding any such non-Cash item to the extent that it represents an accrual or
reserve for potential Cash items in any future period or amortization of a
prepaid Cash item that was paid in a prior period), plus (f) non-cash impairment
charges taken in respect of leases other than in respect of those leases
identified on Schedule 1.1, plus (g) non-cash stock-based compensation expense
incurred in connection with any options issued by Company in any Fiscal Year in
connection with Company's stock incentive plan, plus (h) severance expense, plus
(i) amortization of financing fees incurred in connection with the Transactions,
plus (j) expenses accrued in connection with the preparation of a public
offering by the Company that was withdrawn prior to the Closing Date to the
extent such expenses were paid prior to the Closing Date minus (ii) to the
extent added in determining Consolidated Net Income the sum, without duplication
of the amounts for such period of (a) other non-Cash items increasing
Consolidated Net Income for such period, plus (b) interest income, plus (c)
other income (including, in any event, income recognized in connection with the
subleasing of
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impaired leases), plus (d) cash obligations paid in connection with impaired
leases other than those cash obligations identified on Schedule 1.1.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the aggregate of
all expenditures of Company and its Subsidiaries during such period determined
on a consolidated basis that, in accordance with GAAP, are or should be included
in "purchase of property and equipment or which should otherwise be capitalized"
or similar items reflected in the consolidated statement of cash flows of
Company and its Subsidiaries, provided, that with respect to any Capital Lease,
Consolidated Capital Expenditures shall only include the current rental payments
due during such period under such Capital Lease.
"CONSOLIDATED CASH INTEREST EXPENSE" means, for any period, Consolidated
Interest Expense for such period, excluding any amount not payable in Cash.
"CONSOLIDATED CURRENT LIABILITIES" means, as at any date of determination,
the total liabilities of Company and its Subsidiaries on a consolidated basis
that may properly be classified as current liabilities in conformity with GAAP,
excluding the current portion of long term debt.
"CONSOLIDATED EXCESS CASH FLOW" means, for any period, an amount (if
positive) determined for Company and its Subsidiaries on a consolidated basis
equal to: (i) the sum, without duplication, of the amounts for such period of
(a) Consolidated Adjusted EBITDA, plus (b) interest income received in cash,
minus (ii) the sum, without duplication, of the amounts for such period of (a)
voluntary and scheduled repayments of Consolidated Total Debt (excluding
repayments of Revolving Loans except to the extent the Revolving Commitments are
permanently reduced in connection with such repayments), plus (b) Consolidated
Capital Expenditures (net of any proceeds of (x) Net Asset Sale Proceeds to the
extent reinvested in accordance with Section 2.13(a), (y) Net
Insurance/Condemnation Proceeds to the extent reinvested in accordance with
Section 2.13(b), and (z) any proceeds of related financings with respect to such
expenditures), plus (c) Consolidated Cash Interest Expense, plus (d) provisions
for cash Taxes based on income of Company and its Subsidiaries and payable in
cash with respect to such period, plus (e) any cash obligations paid in
connection with impaired leases during such period.
"CONSOLIDATED FIXED CHARGES" means, for any period, the sum, without
duplication, of the amounts determined for Company and its Subsidiaries on a
consolidated basis equal to (i) Consolidated Cash Interest Expense, (ii)
scheduled payments of principal on Consolidated Total Debt, (iii) Consolidated
Capital Expenditures, (iv) cash obligations identified on Schedule 1.1 paid in
connection with impaired leases and (v) the portion of Taxes based on income
actually paid in cash and provisions for cash income Taxes.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total interest
expense (including that portion attributable to Capital Leases in accordance
with GAAP and capitalized interest) of Company and its Subsidiaries on a
consolidated basis with respect to all outstanding Consolidated Total Debt,
including all commissions, discounts and
8
other fees and charges owed with respect to letters of credit, but excluding,
however, any amounts referred to in Section 2.10(c) payable on or before the
Closing Date.
"CONSOLIDATED NET INCOME" means, for any period, (i) the net income (or
loss) of Company and its Subsidiaries on a consolidated basis for such period
taken as a single accounting period determined in conformity with GAAP, minus
(ii) the sum of (a) the income (or loss) of any Person (other than a Subsidiary
of Company) in which any other Person (other than Company or any of its
Subsidiaries) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to Company or any of its
Subsidiaries by such Person during such period, plus (b) the income (or loss) of
any Person accrued prior to the date it becomes a Subsidiary of Company or is
merged into or consolidated with Company or any of its Subsidiaries or that
Person's assets are acquired by Company or any of its Subsidiaries, plus (c) the
income of any Subsidiary of Company to the extent that the declaration or
payment of dividends or similar distributions by that Subsidiary of that income
is not at the time permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Subsidiary, plus (d) any after Tax gains or losses
attributable to Asset Sales or returned surplus assets of any Pension Plan plus
(or minus)(e) (to the extent not included in clauses (a) through (d) above) any
net extraordinary losses (or any net extraordinary gains).
"CONSOLIDATED TOTAL DEBT" means, as at any date of determination, the
aggregate stated balance sheet amount of all Indebtedness of Company and its
Subsidiaries determined on a consolidated basis in accordance with GAAP, but
excluding any Indebtedness under the Atlantic Debt Documents and any
Indebtedness of the type described in clause (vi) of the definition thereof.
"CONTRACTUAL OBLIGATION" means, as applied to any Person, any provision of
any Security issued by that Person or of any indenture, mortgage, deed of trust,
contract, undertaking, agreement or other instrument to which that Person is a
party or by which it or any of its properties is bound or to which it or any of
its properties is subject.
"CONTRIBUTING GUARANTORS" as defined in Section 7.2.
"CONVERSION/CONTINUATION DATE" means the effective date of a continuation
or conversion, as the case may be, as set forth in the applicable
Conversion/Continuation Notice.
"CONVERSION/CONTINUATION NOTICE" means a Conversion/Continuation Notice
substantially in the form of Exhibit A-2.
"COUNTERPART AGREEMENT" means a Counterpart Agreement substantially in the
form of Exhibit H delivered by a Credit Party pursuant to Section 5.10.
"CREDIT DATE" means the date of a Credit Extension.
"CREDIT DOCUMENT" means any of this Agreement, the Notes, if any, the
Collateral Documents, the Fee Letter, the Subordination Agreement, the Escrow
9
Agreement, the Intercompany Note, the Atlantic Pledge, the Atlantic Side Letter
and all other certificates, documents, instruments or agreements executed and
delivered by a Credit Party for the benefit of any Agent or any Lender in
connection herewith.
"CREDIT EXTENSION" means the making, conversion or continuance of a Loan.
"CREDIT PARTY" means each Person (other than any Agent or any Lender or any
representative thereof) from time to time party to a Credit Document; provided
that Atlantic shall not be a Credit Party for purposes of any Credit Document
unless it is a party to such Credit Document.
"CURRENCY AGREEMENT" means any foreign exchange contract, currency swap
agreement, futures contract, option contract, synthetic or other similar
agreement or arrangement, each of which is for the purpose of hedging the
foreign currency risk associated with Company's and its Subsidiaries' operations
and not for speculative purposes.
"DEFAULT" means a condition or event that, after notice or lapse of time or
both, would constitute an Event of Default.
"DEFAULT EXCESS" means, with respect to any Defaulting Lender, the excess,
if any, of such Defaulting Lender's Pro Rata Share of the aggregate outstanding
principal amount of Loans of all Lenders (calculated as if all Defaulting
Lenders (other than such Defaulting Lender) had funded all of their respective
Defaulted Loans) over the aggregate outstanding principal amount of all Loans of
such Defaulting Lender.
"DEFAULT PERIOD" means, with respect to any Defaulting Lender, the period
commencing on the date of the applicable Funding Default and ending on the
earliest of the following dates: (i) the date on which all Commitments are
cancelled or terminated and/or the Obligations are declared or become
immediately due and payable, (ii) the date on which (a) the Default Excess with
respect to such Defaulting Lender shall have been reduced to zero (whether by
the funding by such Defaulting Lender of any Defaulted Loans of such Defaulting
Lender or by the non pro rata application of any voluntary or mandatory
prepayments of the Loans in accordance with the terms of Section 2.12 or Section
2.13 or by a combination thereof), and (b) such Defaulting Lender shall have
delivered to Company and Administrative Agent a written reaffirmation of its
intention to honor its obligations hereunder with respect to its Commitments,
and (iii) the date on which Company, Administrative Agent and Requisite Lenders
waive all Funding Defaults of such Defaulting Lender in writing.
"DEFAULT RATE" means any interest payable pursuant to Section 2.9.
"DEFAULTED LOAN" as defined in Section 2.21.
"DEFAULTING LENDER" as defined in Section 2.21.
10
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or like account
with a bank, savings and loan association, credit union or like organization,
other than an account evidenced by a negotiable certificate of deposit.
"DOLLARS" and the sign "$" mean the lawful money of the United States of
America.
"DOMESTIC SUBSIDIARY" means any Subsidiary organized under the laws of the
United States of America, any state thereof or the District of Columbia.
"ELIGIBLE ASSIGNEE" means (i) in the case of the Revolving Loans or
Revolving Commitments, (a) any Lender with Revolving Exposure or any Affiliate
(other than a natural person) of a Lender with Revolving Exposure, (b) a
commercial bank organized under the laws of the United States, or any state
thereof, and having total assets in excess of $100,000,000, (c) a commercial
bank organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development or a political subdivision
of any such country and which has total assets in excess of $100,000,000,
provided that such bank is acting through a branch or agency located in the
United States, and (d) a finance company, insurance company, or other financial
institution or fund that is engaged in making, purchasing, or otherwise
investing in commercial loans in the ordinary course of its business and having
(together with its Affiliates) total assets in excess of $100,000,000, (ii) in
the case of the Term Loan, (a) any Lender, any Affiliate of any Lender and any
Related Fund (any two or more Related Funds being treated as a single Eligible
Assignee for all purposes hereof), and (b) any commercial bank, insurance
company, investment or mutual fund or other entity that is an "accredited
investor" (as defined in Regulation D under the Securities Act) and which
extends credit or buys loans as one of its businesses, and (iii) any other
Person (other than a natural Person) approved by Company (so long as no Default
or Event of Default has occurred and is continuing) and Administrative Agent;
provided, neither (A) Company nor any Affiliate of Company nor (B) Atlantic nor
any Affiliate of Atlantic shall, in any event, be an Eligible Assignee.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as defined in
Section 3(3) of ERISA which is or was sponsored, maintained or contributed to
by, or required to be contributed by, Company, any of its Subsidiaries or any of
their respective ERISA Affiliates.
"ENVIRONMENTAL CLAIM" means any investigation, notice, notice of violation,
claim, action, suit, proceeding, demand, abatement order or other order or
directive (conditional or otherwise), by any Governmental Authority or any other
Person, arising (i) pursuant to or in connection with any actual or alleged
violation of any Environmental Law; (ii) in connection with any Hazardous
Material or any actual or alleged Hazardous Materials Activity; or (iii) in
connection with any actual or alleged damage, injury, threat or harm to health,
safety, natural resources or the environment.
"ENVIRONMENTAL LAWS" means any and all current or future foreign or
domestic, federal or state (or any subdivision of either of them), statutes,
ordinances, orders, rules,
11
regulations, judgments, Governmental Authorizations, or any other requirements
of Governmental Authorities relating to (i) environmental matters, including
those relating to any Hazardous Materials Activity; (ii) the generation, use,
storage, transportation or disposal of Hazardous Materials; or (iii)
occupational safety and health, industrial hygiene, land use or the protection
of human, plant or animal health or welfare, in any manner applicable to Company
or any of its Subsidiaries or any Facility.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor thereto.
"ERISA AFFILIATE" means, as applied to any Person, (i) any corporation
which is a member of a controlled group of corporations within the meaning of
Section 414(b) of the Internal Revenue Code of which that Person is a member;
(ii) any trade or business (whether or not incorporated) which is a member of a
group of trades or businesses under common control within the meaning of Section
414(c) of the Internal Revenue Code of which that Person is a member; and (iii)
any member of an affiliated service group within the meaning of Section 414(m)
or (o) of the Internal Revenue Code of which that Person, any corporation
described in clause (i) above or any trade or business described in clause (ii)
above is a member. Any former ERISA Affiliate of Company or any of its
Subsidiaries shall continue to be considered an ERISA Affiliate of Company or
any such Subsidiary within the meaning of this definition with respect to the
period such entity was an ERISA Affiliate of Company or such Subsidiary and with
respect to liabilities arising after such period for which Company or such
Subsidiary could be liable under the Internal Revenue Code or ERISA.
"ERISA EVENT" means (i) a "reportable event" within the meaning of Section
4043 of ERISA and the regulations issued thereunder with respect to any Pension
Plan (excluding those for which the provision for 30 day notice to the PBGC has
been waived by regulation); (ii) the failure to meet the minimum funding
standard of Section 412 of the Internal Revenue Code with respect to any Pension
Plan (whether or not waived in accordance with Section 412(d) of the Internal
Revenue Code) or the failure to make by its due date a required installment
under Section 412(m) of the Internal Revenue Code with respect to any Pension
Plan or the failure to make any required contribution to a Multiemployer Plan;
(iii) the provision of a notice of intent to terminate a Pension Plan in a
distress termination described in Section 4041(c) of ERISA; (iv) the withdrawal
by Company, any of its Subsidiaries or any of their respective ERISA Affiliates
from any Pension Plan with two or more contributing sponsors or the termination
of any such Pension Plan resulting in liability to Company, any of its
Subsidiaries or any of their respective ERISA Affiliates pursuant to Section
4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedings to
terminate any Pension Plan, or the occurrence of any event or condition which
might constitute grounds under ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan; (vi) the imposition of liability
on Company, any of its Subsidiaries or any of their respective ERISA Affiliates
pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of
Section 4212(c) of ERISA; (vii) the withdrawal of Company, any of its
Subsidiaries or any of their respective ERISA Affiliates in a complete or
partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from
any
12
Multiemployer Plan if there is any liability or potential liability therefor, or
the receipt by Company, any of its Subsidiaries or any of their respective ERISA
Affiliates of notice from any Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to
terminate or has terminated under Section 4041A or 4042 of ERISA; (viii) the
occurrence of an act or omission which could give rise to the imposition on
Company, any of its Subsidiaries or any of their respective ERISA Affiliates of
fines, penalties, Taxes or related charges under Chapter 43 of the Internal
Revenue Code or under Section 409, Section 502(c), (i) or (l), or Section 4071
of ERISA in respect of any Employee Benefit Plan; (ix) the assertion of a
material claim (other than routine claims for benefits) against any Employee
Benefit Plan or the assets thereof, or against Company, any of its Subsidiaries
or any of their respective ERISA Affiliates in connection with any Employee
Benefit Plan; (x) receipt from the Internal Revenue Service of notice of the
failure of any Pension Plan (or any other Employee Benefit Plan intended to be
qualified under Section 401(a) of the Internal Revenue Code) to qualify under
Section 401(a) of the Internal Revenue Code, or the failure of any trust forming
part of any Pension Plan to qualify for exemption from taxation under Section
501(a) of the Internal Revenue Code; or (xi) the imposition of a Lien pursuant
to Section 401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to
ERISA with respect to any Pension Plan.
"ESCROW AGREEMENT" means an escrow agreement, in form and substance
satisfactory to Administrative Agent, among Company, Administrative Agent and
the escrow agent party thereto, pursuant to which $6,400,000 in proceeds of the
Term Loan will be deposited for application, inter alia, to the Indebtedness and
other obligations outstanding under those two unsecured promissory notes, dated
June 13, 2002 issued by ClearBlue Technologies Management, Inc. to Applied
Theory Corporation in an aggregate principal amount of $6,000,000, on the terms
and subject to the conditions contained therein.
"EVENT OF DEFAULT" means each of the conditions or events set forth in
Section 8.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended from
time to time, and any successor statute.
"EXISTING INDEBTEDNESS" means (i) Indebtedness and other obligations
outstanding under those certain convertible promissory notes, dated as of June
10, 2004, issued by Company to Waythere, Inc. (f/k/a Surebridge, Inc.), as
amended prior to the Closing Date, and (ii) Indebtedness and other obligations
outstanding under that certain Accounts Receivable Financing Agreement, dated as
of May 27, 2003, as amended, by and between Silicon Valley Bank, Company and
certain of its Subsidiaries.
"EXTRAORDINARY RECEIPTS" means any Cash received by Company or any of its
Subsidiaries not in the ordinary course of business, including, without
limitation, any foreign, United States, state or local Tax refunds, pension plan
reversions, judgments, proceeds of settlements or other consideration of any
kind in connection with any cause of action, condemnation awards (and payments
in lieu thereof), indemnity payments and
13
any purchase price adjustment received in connection with any purchase agreement
and proceeds of insurance (excluding, however, any Net Insurance/Condemnation
Proceeds, which are subject to Section 2.13(b)); except for any Cash received by
Company or any of its Subsidiaries in the ordinary course of business with
respect to customer contract settlements.
"FACILITY" means any real property (including all buildings, fixtures or
other improvements located thereon) now, hereafter or heretofore owned, leased,
operated or used by Company or any of its Subsidiaries or any of their
respective predecessors or Affiliates.
"FAIR SHARE CONTRIBUTION AMOUNT" as defined in Section 7.2.
"FAIR SHARE" as defined in Section 7.2.
"FEDERAL FUNDS EFFECTIVE RATE" means for any day, the rate per annum
(expressed, as a decimal, rounded upwards, if necessary, to the next higher
1/100 of 1%) equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal Reserve Bank of
New York on the Business Day next succeeding such day; provided, (i) if such day
is not a Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Business Day as so published on the next
succeeding Business Day, and (ii) if no such rate is so published on such next
succeeding Business Day, the Federal Funds Rate for such day shall be the
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
quotations for such day for such transactions received by Administrative Agent
from three Federal funds brokers of recognized standing selected by it.
"FEE LETTER" means the letter agreement dated March 17, 2006 between
Company and Administrative Agent.
"FINANCIAL OFFICER CERTIFICATION" means, with respect to the financial
statements for which such certification is required, the certification of the
chief financial officer of Company that such financial statements fairly
present, in all material respects, the financial condition of Company and its
Subsidiaries as at the dates indicated and the results of their operations and
their cash flows for the periods indicated, in each case in conformity with GAAP
applied on a consistent basis, subject, in the case of interim financial
statements, to changes resulting from normal audit and year end adjustments.
"FINANCIAL PLAN" as defined in Section 5.1(i).
"FIRST PRIORITY" means, with respect to any Lien purported to be created in
any Collateral pursuant to any Collateral Document, that such Lien is the only
Lien to which such Collateral is subject, other than any Permitted Lien.
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
14
"FISCAL YEAR" means the fiscal year of Company and its Subsidiaries ending
on July 31 of each calendar year.
"FIXED CHARGE COVERAGE RATIO" means the ratio as of the last day of (i) the
first Fiscal Quarter ending after the Closing Date of (a) Consolidated Adjusted
EBITDA for such Fiscal Quarter, to (b) Consolidated Fixed Charges for such
Fiscal Quarter, (ii) the second Fiscal Quarter ending after the Closing Date of
(a) Consolidated Adjusted EBITDA for the two Fiscal Quarters period ending on
such date, to (b) Consolidated Fixed Charges for such two Fiscal Quarters, (iii)
the third Fiscal Quarter period ending after the Closing Date of (a)
Consolidated Adjusted EBITDA for the three Fiscal Quarter period ending on such
date, to (b) Consolidated Fixed Charges for such three Fiscal Quarter period,
and (iv) any other Fiscal Quarter of (a) Consolidated Adjusted EBITDA for the
four-Fiscal Quarter period then ending, to (b) Consolidated Fixed Charges for
such four-Fiscal Quarter period.
"FOREIGN SUBSIDIARY" means any Subsidiary that is not a Domestic
Subsidiary.
"FUNDING DEFAULT" as defined in Section 2.21.
"FUNDING GUARANTORS" as defined in Section 7.2.
"FUNDING NOTICE" means a notice substantially in the form of Exhibit A-1.
"GAAP" means, subject to the limitations on the application thereof set
forth in Xxxxxxx 0.0, Xxxxxx Xxxxxx generally accepted accounting principles in
effect as of the date of determination thereof.
"GOVERNMENTAL AUTHORITY" means any federal, state, municipal, national or
other government, governmental department, commission, board, bureau, court,
agency or instrumentality or political subdivision thereof or any entity or
officer exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to any government or any court, in
each case whether associated with a state of the United States, the United
States, or a foreign entity or government.
"GOVERNMENTAL AUTHORIZATION" means any permit, license, authorization,
plan, directive, consent order or consent decree of or from any Governmental
Authority.
"GRANTOR" as defined in the Pledge and Security Agreement.
"GUARANTEED OBLIGATIONS" as defined in Section 7.1.
"GUARANTOR" means each Domestic Subsidiary of Company.
"GUARANTY" means the guaranty of each Guarantor set forth in Section 7.
"HAZARDOUS MATERIALS" means any chemical, material or substance, exposure
to which is prohibited, limited or regulated by any Environmental Law or
Governmental Authority or which may or could pose a hazard to the health and
safety of the owners,
15
occupants or any Persons in the vicinity of any Facility or to the indoor or
outdoor environment.
"HAZARDOUS MATERIALS ACTIVITY" means any past, current, proposed or
threatened activity, event or occurrence involving any Hazardous Materials,
including the use, manufacture, possession, storage, holding, presence,
existence, location, Release, threatened Release, discharge, placement,
generation, transportation, processing, construction, treatment, abatement,
removal, remediation, disposal, disposition or handling of any Hazardous
Materials, and any corrective action or response action with respect to any of
the foregoing.
"HIGHEST LAWFUL RATE" means the maximum lawful interest rate, if any, that
at any time or from time to time may be contracted for, charged, or received
under the laws applicable to any Lender which are presently in effect or, to the
extent allowed by law, under such applicable laws which may hereafter be in
effect and which allow a higher maximum nonusurious interest rate than
applicable laws now allow.
"HISTORICAL FINANCIAL STATEMENTS" means as of the Closing Date, (i) the
audited financial statements of Company and its Subsidiaries, for the
immediately preceding two (2) Fiscal Years, consisting of balance sheets and the
related consolidated statements of income, stockholders' equity and cash flows
for such Fiscal Years, and (ii) for the interim period from August 1, 2005, to
the Closing Date, internally prepared, unaudited financial statements of Company
and its Subsidiaries, consisting of a balance sheet and the related consolidated
statements of income, stockholders' equity and cash flows for each quarterly
period completed prior to forty-six (46) days before the Closing Date and for
each monthly period completed prior to thirty-one (31) days prior to the Closing
Date, in the case of clauses (i) and (ii), certified by the chief financial
officer of Company that they fairly present, in all material respects, the
financial condition of Company and its Subsidiaries as at the dates indicated
and the results of their operations and their cash flows for the periods
indicated, subject, if applicable, to changes resulting from audit and normal
year end adjustments.
"INCREASED COST LENDERS" as defined in Section 2.22.
"INDEBTEDNESS," as applied to any Person, means, without duplication, (i)
all indebtedness for borrowed money and advances and all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments or upon
which interest is customarily paid; (ii) that portion of obligations with
respect to Capital Leases that is properly classified as a liability on a
balance sheet in conformity with GAAP; (iii) notes payable and drafts accepted
representing extensions of credit whether or not representing obligations for
borrowed money; (iv) any obligation owed for all or any part of the deferred
purchase price of property or services, which purchase price is (a) due more
than six months from the date of incurrence of the obligation in respect thereof
or (b) evidenced by a note or similar written instrument; (v) all indebtedness
secured by any Lien on any property or asset owned or held by that Person
regardless of whether the indebtedness secured thereby shall have been assumed
by that Person or is nonrecourse to the credit of that Person; (vi) the face
amount of any letter of credit issued, bankers'
16
acceptances facilities and similar credit transactions for the account of that
Person or as to which that Person is otherwise liable for reimbursement of
drawings or drafts; (vii) all reimbursement, payment or other obligations of
such Person under any conditional sale or title retention agreement with respect
to property used or acquired by such Person; (viii) the direct or indirect
guaranty, endorsement (otherwise than for collection or deposit in the ordinary
course of business), co-making, discounting with recourse or sale with recourse
by such Person of the obligation of another; (ix) any obligation of such Person
the primary purpose or intent of which is to provide assurance to an obligee
that the obligation of the obligor thereof will be paid or discharged, or any
agreement relating thereto will be complied with, or the holders thereof will be
protected (in whole or in part) against loss in respect thereof; (x) any
liability of such Person for an obligation of another through any agreement
(contingent or otherwise) (a) to purchase, repurchase or otherwise acquire such
obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise) or (b) to maintain the solvency
or any balance sheet item, level of income or financial condition of another if,
in the case of any agreement described under subclauses (a) or (b) of this
clause (x), the primary purpose or intent thereof is as described in clause (ix)
above; (xi) all obligations of such Person in respect of any exchange traded or
over the counter derivative transaction, including, without limitation, any
Interest Rate Agreement and Currency Agreement, whether entered into for hedging
or speculative purposes; provided, in no event shall obligations under any
Interest Rate Agreement and Currency Agreement be deemed "Indebtedness" for any
purpose under Section 6.8; and (xii) all obligations referred to in clauses (i)
through (xi) of this definition of another Person secured by (or for which the
existing holder of such Indebtedness has an existing right to be secured by) a
Lien upon property owned by such Person. For the avoidance of doubt, the
Indebtedness of any Person shall include the Indebtedness of any partnership or
joint venture in which such Person is a general partner or joint venturer,
unless such Indebtedness is expressly non-recourse to such Person.
"INDEMNIFIED LIABILITIES" means, collectively, any and all liabilities,
obligations, losses, damages (including natural resource damages), penalties,
claims (including Environmental Claims), costs (including the costs of any
investigation, study, sampling, testing, abatement, cleanup, removal,
remediation or other response action necessary to remove, remediate, clean up or
xxxxx any Hazardous Materials Activity), expenses and disbursements of any kind
or nature whatsoever (including the reasonable fees and disbursements of counsel
for Indemnitees in connection with any investigative, administrative or judicial
proceeding commenced or threatened by any Person, whether or not any such
Indemnitee shall be designated as a party or a potential party thereto, and any
fees or expenses incurred by Indemnitees in enforcing this indemnity), whether
direct, indirect or consequential and whether based on any federal, state or
foreign laws, statutes, rules or regulations (including securities and
commercial laws, statutes, rules or regulations and Environmental Laws), on
common law or equitable cause or on contract or otherwise, that may be imposed
on, incurred by, or asserted against any such Indemnitee, in any manner relating
to or arising out of (i) this Agreement or the other Credit Documents or the
transactions contemplated hereby or thereby (including the Lenders' agreement to
make Credit Extensions or the use or intended use of the proceeds
17
thereof, or any enforcement of any of the Credit Documents (including any sale
of, collection from, or other realization upon any of the Collateral or the
enforcement of the Guaranty)); (ii) the statements contained in the commitment
letter or proposal letter delivered by any Lender to Company with respect to the
transactions contemplated by this Agreement; or (iii) any Environmental Claim
against or any Hazardous Materials Activity relating to or arising from,
directly or indirectly, any past or present activity, operation, land ownership,
or practice of Company or any of its Subsidiaries.
"INDEMNITEE" as defined in Section 10.3.
"INDEMNITEE AGENT PARTY" as defined in Section 9.6.
"INSTALLMENT" as defined in Section 2.11.
"INTERCOMPANY NOTE" as defined in Section 3.1(n)
"INTEREST PAYMENT DATE" means with respect to (i) any Base Rate Loan, (a)
the last day of each month, commencing on the first such date to occur after the
Closing Date, and (b) the final maturity date of such Loan; and (ii) any LIBOR
Rate Loan, the last day of each Interest Period applicable to such Loan.
"INTEREST PERIOD" means, in connection with a LIBOR Rate Loan, an interest
period of one, two or three months, as selected by Company in the applicable
Funding Notice or Conversion/Continuation Notice, (i) initially, commencing on
the Credit Date or Conversion/Continuation Date thereof, as the case may be; and
(ii) thereafter, commencing on the day on which the immediately preceding
Interest Period expires; provided, (a) if an Interest Period would otherwise
expire on a day that is not a Business Day, such Interest Period shall expire on
the next succeeding Business Day unless no further Business Day occurs in such
month, in which case such Interest Period shall expire on the immediately
preceding Business Day; (b) any Interest Period that begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall, subject to clauses (c) and (d), of this definition, end on the last
Business Day of a calendar month; (c) no Interest Period with respect to any
portion of the Term Loan shall extend beyond the Term Loan Maturity Date; and
(d) no Interest Period with respect to any portion of the Revolving Loans shall
extend beyond the Revolving Commitment Termination Date.
"INTEREST RATE AGREEMENT" means any interest rate swap agreement, interest
rate cap agreement, interest rate collar agreement, interest rate hedging
agreement or other similar agreement or arrangement, each of which is (i) for
the purpose of hedging the interest rate exposure associated with Company's and
its Subsidiaries' operations, (ii) approved by Administrative Agent, and (iii)
not for speculative purposes.
"INTEREST RATE DETERMINATION DATE" means, with respect to any Interest
Period, the date that is two (2) Business Days prior to the first day of such
Interest Period.
18
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as amended
to the date hereof and from time to time hereafter, and any successor statute.
"INVESTMENT" means (i) any direct or indirect purchase or other acquisition
by Company or any of its Subsidiaries of, or of a beneficial interest in, any of
the Securities of any other Person (other than a Guarantor); (ii) any direct or
indirect redemption, retirement, purchase or other acquisition for value, by any
Subsidiary of Company from any Person (other than Company or any Guarantor), of
any Capital Stock of such Person; and (iii) any direct or indirect loan, advance
(other than advances to employees for moving, entertainment and travel expenses,
drawing accounts and similar expenditures in the ordinary course of business) or
capital contributions by Company or any of its Subsidiaries to any other Person
(other than Company or any Guarantor), including all indebtedness and accounts
receivable from that other Person that are not current assets or did not arise
from sales to that other Person in the ordinary course of business. The amount
of any Investment shall be the original cost of such Investment plus the cost of
all additions thereto, without any adjustments for increases or decreases in
value, or write ups, write downs or write offs with respect to such Investment.
"JOINT VENTURE" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form; provided, in
no event shall any corporate Subsidiary of any Person be considered to be a
Joint Venture to which such Person is a party.
"LANDLORD PERSONAL PROPERTY COLLATERAL ACCESS AGREEMENT" means a Landlord
Waiver and Consent Agreement substantially in the form of Exhibit K with such
amendments or modifications as may be approved by Collateral Agent.
"LEASEHOLD PROPERTY" means any leasehold interest of any Credit Party as
lessee under any lease of real property, other than any such leasehold interest
designated from time to time by Collateral Agent in its sole discretion as not
being required to be included in the Collateral.
"LENDER" means each financial institution listed on the signature pages
hereto as a Lender, and any other Person that becomes a party hereto pursuant to
an Assignment Agreement.
"LEVERAGE RATIO" means the ratio as of the last day of any Fiscal Quarter
of (i) Consolidated Total Debt as of such day, to (ii) Consolidated Adjusted
EBITDA for the four Fiscal Quarter period ending on such date.
"LIBOR RATE LOAN" means a Loan bearing interest at a rate determined by
reference to the Adjusted LIBOR Rate.
"LIEN" means (i) any lien, mortgage, pledge, assignment, security interest,
charge or encumbrance of any kind (including any agreement to give any of the
foregoing, any conditional sale or other title retention agreement, and any
lease in the nature thereof) and any option, trust or other preferential
arrangement having the practical effect of any of
19
the foregoing, and (ii) in the case of Securities, any purchase option, call or
similar right of a third party with respect to such Securities.
"LOAN" means a Term Loan or a Revolving Loan.
"MARGIN STOCK" as defined in Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on and/or
material adverse developments with respect to (i) the business operations,
properties, assets, condition (financial or otherwise) or prospects of Company
and its Subsidiaries taken as a whole; (ii) a significant portion of the
industry or business segment in which Company or any of its Subsidiaries
operates or relies upon; (iii) the ability of any Credit Party to fully and
timely perform its Obligations; (iv) the legality, validity, binding effect, or
enforceability against a Credit Party of a Credit Document to which it is a
party; or (v) the rights, remedies and benefits available to, or conferred upon,
any Agent and any Lender or any Secured Party under any Credit Document.
"MATERIAL CONTRACT" means, collectively, (i) any contract or other
arrangement to which Company or any of its Subsidiaries is a party (other than
the Credit Documents) for which breach, nonperformance, cancellation or failure
to renew could reasonably be expected to have a Material Adverse Effect and (ii)
any agreement or instrument evidencing or governing Indebtedness in excess of
$1,000,000.
"MATERIAL REAL ESTATE ASSET" means (i) (a) any fee owned Real Estate Asset
having a fair market value in excess of $250,000 as of the date of the
acquisition thereof, and (b) all Leasehold Properties other than those with
respect to which the aggregate payments under the term of the lease are less
than $60,000 per annum, or (ii) any Real Estate Asset that the Requisite Lenders
have determined is material to the business, operations, properties, assets,
condition (financial or otherwise) or prospects of Company or any Subsidiary
thereof, including Company.
"MOODY'S" means Xxxxx'x Investor Services, Inc.
"MORTGAGE" means a fee or leasehold mortgage, deed of trust or similar
instrument in form and substance reasonably satisfactory to the Agent, as the
same may be amended, supplemented, restated or otherwise modified from time to
time.
"MULTIEMPLOYER PLAN" means any Employee Benefit Plan which is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
"NAIC" means The National Association of Insurance Commissioners and any
successor thereto.
"NARRATIVE REPORT" means, with respect to the financial statements for
which such narrative report is required, a narrative report describing the
operations of Company and its Subsidiaries in the form prepared for presentation
to senior management thereof for the Fiscal Quarter or Fiscal Year and for the
period from the beginning of the then
20
current Fiscal Year to the end of such period to which such financial statements
relate with comparison to and variances from the immediately preceding period
and budget.
"NET ASSET SALE PROCEEDS" means, with respect to any Asset Sale, an amount
equal to: (i) Cash payments received by Company or any of its Subsidiaries from
such Asset Sale, minus (ii) any bona fide direct costs incurred in connection
with such Asset Sale, including (a) legal, accounting, tax, investment banking
or other professional service fees (other than any such fees payable to an
Affiliate of a Credit Party), (b) income or gains Taxes payable by the seller as
a result of any gain recognized in connection with such Asset Sale during the
Tax period the sale occurs, (c) payment of the outstanding principal amount of,
premium or penalty, if any, and interest on any Indebtedness (other than the
Loans) that is secured by a Lien on the stock or assets in question and that is
required to be repaid under the terms thereof as a result of such Asset Sale,
and (d) a reasonable reserve for any indemnification payments (fixed or
contingent) attributable to seller's indemnities and representations and
warranties to purchaser in respect of such Asset Sale undertaken by Company or
any of its Subsidiaries in connection with such Asset Sale; provided that upon
release of any such reserve, the amount released shall be considered Net Asset
Sale Proceeds; provided, that proceeds received by Company or any of its
Subsidiaries from the sublease of any asset shall only be included in the
determination of Net Asset Sale Proceeds to the extent that the same exceeds all
amounts required to be paid by Company or such Subsidiary in connection with its
primary lease of such asset.
"NET INSURANCE/CONDEMNATION PROCEEDS" means an amount equal to: (i) any
Cash payments or proceeds received by Company or any of its Subsidiaries (a)
under any casualty, business interruption or "key man" insurance policies in
respect of any covered loss thereunder, or (b) as a result of the taking of any
assets of Company or any of its Subsidiaries by any Person pursuant to the power
of eminent domain, condemnation or otherwise, or pursuant to a sale of any such
assets to a purchaser with such power under threat of such a taking, minus (ii)
(a) any actual and reasonable costs incurred by Company or any of its
Subsidiaries in connection with the adjustment or settlement of any claims of
Company or such Subsidiary in respect thereof, and (b) any bona fide direct
costs incurred in connection with any sale of such assets as referred to in
clause (i)(b) of this definition, including income Taxes payable as a result of
any gain recognized in connection therewith.
"NET WORKING CAPITAL" means, as at any date of determination, an amount
determined on a consolidated basis for Company and its Subsidiaries equal to (i)
the sum, without duplication of the amounts as such date of determination of (a)
the net amount at such date of all "Accounts" (as such term is defined in the
Pledge and Security Agreement) outstanding other than Accounts not paid within
ninety (90) days following their respective due dates or original invoice dates,
plus (b) the book value of all "Inventory" (as such term is defined in the
Pledge and Security Agreement), minus (ii) Consolidated Current Liabilities.
"NON-US LENDER" as defined in Section 2.19(c).
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"NOTE" means a Term Loan Note or a Revolving Loan Note.
"NOTICE" means a Funding Notice or a Conversion/Continuation Notice.
"OBLIGATIONS" means all liabilities and obligations of every nature of each
Credit Party and its Subsidiaries from time to time owed to the Agents
(including former Agents), the Lenders or any of them under any Credit Document,
whether for principal, interest (including interest which, but for the filing of
a petition in bankruptcy with respect to such Credit Party, would have accrued
on any Obligation, whether or not a claim is allowed against such Credit Party
for such interest in the related bankruptcy proceeding), fees, expenses,
indemnification or otherwise and whether primary, secondary, direct, indirect,
contingent, fixed or otherwise (including obligations of performance) and shall
include, in any event, any Supplemental Obligations.
"OBLIGEE GUARANTOR" as defined in Section 7.7.
"ORGANIZATIONAL DOCUMENTS" means (i) with respect to any corporation, its
certificate or articles of incorporation or organization, as amended, and its by
laws, as amended, (ii) with respect to any limited partnership, its certificate
of limited partnership, as amended, and its partnership agreement, as amended,
(iii) with respect to any general partnership, its partnership agreement, as
amended, and (iv) with respect to any limited liability company, its articles of
organization, as amended, and its operating agreement, as amended. In the event
any term or condition of this Agreement or any other Credit Document requires
any Organizational Document to be certified by a secretary of state or similar
governmental official, the reference to any such "Organizational Document" shall
only be to a document of a type customarily certified by such governmental
official.
"OTHER TAXES" means any and all present or future stamp, registration,
recording, filing, transfer documentary, excise or property Taxes, charges or
similar levies arising from any payment made hereunder or from the execution,
delivery or enforcement of, or otherwise with respect to or in connection with,
any Credit Document.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"PENSION PLAN" means any Employee Benefit Plan, other than a Multiemployer
Plan, which is subject to Section 412 of the Internal Revenue Code or Section
302 of ERISA.
"PERMITTED LIENS" means each of the Liens permitted pursuant to Section
6.2.
"PERSON" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and Governmental Authorities.
22
"PLEDGE AND SECURITY AGREEMENT" means the Pledge and Security Agreement to
be executed by Company and each Guarantor substantially in the form of Exhibit
I, as it may be amended, restated, supplemented or otherwise modified from time
to time.
"PREPAYMENT DATE" as defined in Section 2.14(c).
"PREPAYMENT PREMIUM" as defined in Section 2.12(c).
"PRIME RATE" means the rate of interest quoted in The Wall Street Journal,
Money Rates Section as the Prime Rate (currently defined as the base rate on
corporate loans posted by at least 75% of the nation's thirty (30) largest
banks), as in effect from time to time. The Prime Rate is a reference rate and
does not necessarily represent the lowest or best rate actually charged to any
customer. Agent or any other Lender may make commercial loans or other loans at
rates of interest at, above or below the Prime Rate.
"PRINCIPAL OFFICE" means, for Administrative Agent, the "Principal Office"
as set forth on Appendix B, or such other office as Administrative Agent may
from time to time designate in writing to Company and each Lender.
"PROJECTIONS" as defined in Section 4.8.
"PRO RATA SHARE" means (i) with respect to all payments, computations and
other matters relating to the Term Loan of any Lender, the percentage obtained
by dividing (a) the Term Loan Exposure of that Lender, by (b) the aggregate Term
Loan Exposure of all Lenders and (ii) with respect to all payments, computations
and other matters relating to the Revolving Commitment or Revolving Loans of any
Lender, the percentage obtained by dividing (a) the Revolving Exposure of that
Lender, by (b) the aggregate Revolving Exposure of all Lenders. For all other
purposes with respect to each Lender, "Pro Rata Share" means the percentage
obtained by dividing (A) an amount equal to the sum of the Term Loan Exposure
and the Revolving Exposure of that Lender, by (B) an amount equal to the sum of
the aggregate Term Loan Exposure and the aggregate Revolving Exposure of all
Lenders.
"REAL ESTATE ASSET" means, at any time of determination, any interest (fee,
leasehold or otherwise) then owned by any Credit Party in any real property.
"REFINANCING" means the repayment in full by Company of the Existing
Indebtedness on the Closing Date with a portion of the Term Loan.
"REGISTER" as defined in Section 2.6(b).
"REGULATION D" means Regulation D of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"RELATED FUND" means, with respect to any Lender that is an investment
fund, any other investment fund that invests in commercial loans and that is
managed or
23
advised by the same investment advisor as such Lender or by an Affiliate of such
investment advisor.
"RELEASE" means any release, spill, emission, leaking, pumping, pouring,
injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching
or migration of any Hazardous Material into the indoor or outdoor environment
(including the abandonment or disposal of any barrels, containers or other
closed receptacles containing any Hazardous Material), including the movement of
any Hazardous Material through the air, soil, surface water or groundwater.
"REPLACEMENT LENDER" as defined in Section 2.22.
"REQUISITE CLASS LENDERS" means, at any time of determination, but subject
to the provisions of Section 2.21, (i) for the Class of Lenders having Term Loan
Exposure, Lenders holding more than 50% of the aggregate Term Loan Exposure of
all Lenders and (ii) for the Class of Lenders having Revolving Exposure, Lenders
holding more than 50% of the aggregate Revolving Exposure of all Lenders.
"REQUISITE LENDERS" means one or more Lenders having or holding Term Loan
Exposure and/or Revolving Exposure and representing more than 50% of the sum of
(i) the aggregate Term Loan Exposure of all Lenders and (ii) the aggregate
Revolving Exposure of all Lenders.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other distribution,
direct or indirect, on account of any shares of any class of stock of Company or
any Subsidiary now or hereafter outstanding, except a dividend payable solely in
shares of that class of stock to the holders of that class; (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of stock of Company now or
hereafter outstanding; (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock of Company now or hereafter outstanding; (iv)
management or similar fees payable to Atlantic or any of its Affiliates; and (v)
any payment or prepayment of principal of, premium, if any, or interest on, or
redemption, purchase, retirement, defeasance (including in substance or legal
defeasance), sinking fund or similar payment with respect to, any Subordinated
Indebtedness.
"REVOLVING COMMITMENT" means the commitment of a Lender to make or
otherwise fund any Revolving Loan and "REVOLVING COMMITMENTS" means such
commitments of all Lenders in the aggregate. The amount of each Lender's
Revolving Commitment, if any, is set forth on Appendix A-2 or in the applicable
Assignment Agreement, subject to any adjustment or reduction pursuant to the
terms and conditions hereof. The aggregate amount of the Revolving Commitments
as of the Closing Date is $3,000,000.
"REVOLVING COMMITMENT PERIOD" means the period from the first Business Day
following the Closing Date to but excluding the Revolving Commitment Termination
Date.
24
"REVOLVING COMMITMENT TERMINATION DATE" means the earliest to occur of (i)
the fifth anniversary of the Closing Date; (ii) the date the Revolving
Commitments are permanently reduced to zero pursuant to Section 2.12(b) or 2.13;
and (iii) the date of the termination of the Revolving Commitments pursuant to
Section 8.1.
"REVOLVING EXPOSURE" means, with respect to any Lender as of any date of
determination, (i) prior to the termination of the Revolving Commitments, that
Lender's Revolving Commitment; and (ii) after the termination of the Revolving
Commitments, the sum of the aggregate outstanding principal amount of the
Revolving Loans of that Lender.
"REVOLVING LOAN" means a Loan made by a Lender to Company pursuant to
Section 2.2(a).
"REVOLVING LOAN NOTE" means a promissory note in the form of Exhibit B-2,
as it may be amended, restated, supplemented or otherwise modified from time to
time.
"S&P" means Standard & Poor's Ratings Group, a division of The McGraw Hill
Corporation.
"SECURED PARTIES" has the meaning assigned to that term in the Pledge and
Security Agreement.
"SECURITIES" means any stock, shares, partnership interests, voting trust
certificates, certificates of interest or participation in any profit sharing
agreement or arrangement, options, warrants, bonds, debentures, notes, or other
evidences of indebtedness, secured or unsecured, convertible, subordinated or
otherwise, or in general any instruments commonly known as "securities" or any
certificates of interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire, any of the foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time to
time, and any successor statute.
"SILVER POINT" as defined in the preamble hereto.
"SUBJECT TRANSACTION" as defined in Section 6.8(f).
"SUBORDINATED INDEBTEDNESS" means Indebtedness or other obligations
incurred or existing under the Atlantic Debt Documents.
"SUBORDINATION AGREEMENT" means that certain Subordination Agreement
between Atlantic and the Agents, substantially in the form of Exhibit J hereto,
as the same may be amended, restated, supplemented or otherwise modified from
time to time.
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, limited liability company, association, joint venture or other
business entity of which more than 50% of the total voting power of shares of
stock or other ownership interests
25
entitled (without regard to the occurrence of any contingency) to vote in the
election of the Person or Persons (whether directors, managers, trustees or
other Persons performing similar functions) having the power to direct or cause
the direction of the management and policies thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof; provided, in determining
the percentage of ownership interests of any Person controlled by another
Person, no ownership interest in the nature of a "qualifying share" of the
former Person shall be deemed to be outstanding.
"SUPPLEMENTAL LOAN" means any loan made by any Lender or any Affiliate of
any Lender, in its sole discretion, to Company at any time that Atlantic is in
default of its obligations under the Atlantic Term Loan Agreement in an
aggregate principal amount not to exceed $5,000,000 at any time outstanding.
"SUPPLEMENTAL OBLIGATIONS" means all liabilities and obligations of every
nature of each Credit Party and its Subsidiaries from time to time owed to the
Agents (including former Agents), the Lenders or any of them under the Atlantic
Side Letter or any Supplemental Loan, whether for principal, interest (including
interest which, but for the filing of a petition in bankruptcy with respect to
such Credit Party, would have accrued on any Obligation, whether or not a claim
is allowed against such Credit Party for such interest in the related bankruptcy
proceeding), fees, expenses, indemnification or otherwise and whether primary,
secondary, direct, indirect, contingent, fixed or otherwise (including
obligations of performance).
"TAX" means any present or future tax, levy, impost, duty, assessment,
charge, fee, deduction or withholding of any nature and whatever called, by
whomsoever, on whomsoever and wherever imposed, levied, collected, withheld or
assessed; provided, "Tax on the overall net income" of a Person shall be
construed as a reference to a tax imposed by the jurisdiction in which that
Person is organized or in which that Person's applicable principal office
(and/or, in the case of a Lender, its lending office) is located or in which
that Person (and/or, in the case of a Lender, its lending office) is deemed to
be doing business (other than a jurisdiction in which such Person is treated as
doing business as a result of its entering into any Credit Document or its
participation in the transactions governed thereby) on all or part of the net
income, profits or gains (whether worldwide, or only insofar as such income,
profits or gains are considered to arise in or to relate to a particular
jurisdiction, or otherwise) of that Person (and/or, in the case of a Lender, its
applicable lending office).
"TAX RELATED PERSON" means any Person (including, without limitation, a
beneficial owner of an interest in a pass-through entity) whose income is
realized through or determined by reference to the Agent, a Lender or
Participant or any Tax Related Person of any of the foregoing.
"TERM LOAN" means a Term Loan made by a Lender to Company pursuant to
Section 2.1(a).
26
"TERM LOAN COMMITMENT" means the commitment of a Lender to make or
otherwise fund a Term Loan and "TERM LOAN COMMITMENTS" means such commitments of
all Lenders in the aggregate. The amount of each Lender's Term Loan Commitment,
if any, is set forth on Appendix A-1 or in the applicable Assignment Agreement,
subject to any adjustment or reduction pursuant to the terms and conditions
hereof. The aggregate amount of the Term Loan Commitments as of the Closing Date
is $70,000,000.
"TERM LOAN EXPOSURE" means, with respect to any Lender, as of any date of
determination, the outstanding principal amount of the Term Loan of such Lender;
provided, at any time prior to the making of the Term Loan, the Term Loan
Exposure of any Lender shall be equal to such Lender's Term Loan Commitment.
"TERM LOAN MATURITY DATE" means the earlier of (i) the fifth anniversary of
the Closing Date, and (ii) the date that the Term Loan shall become due and
payable in full hereunder, whether by acceleration or otherwise.
"TERM LOAN NOTE" means a promissory note in the form of Exhibit B-1, as it
may be amended, restated, supplemented or otherwise modified from time to time.
"TERMINATED LENDER" as defined in Section 2.22.
"TOTAL UTILIZATION OF REVOLVING COMMITMENTS" means, as at any date of
determination, the sum of the aggregate principal amount of all outstanding
Revolving Loans.
"TRANSACTIONS" means the transactions contemplated by the Credit Documents.
"TRANSACTION COSTS" means the fees, costs and expenses payable by Company
or any of Company's Subsidiaries on or before the Closing Date in connection
with the transactions contemplated by the Credit Documents, to the extent
approved in writing by Administrative Agent.
"TYPE OF LOAN" means with respect to either the Term Loan or Revolving
Loans, a Base Rate Loan or a LIBOR Rate Loan.
"UCC" means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.
"UNADJUSTED LIBOR RATE COMPONENT" means that component of the interest
costs to Company in respect of a LIBOR Rate Loan that is based upon the rate
obtained pursuant to clause (i) of the definition of Adjusted LIBOR Rate.
"WAIVABLE PREPAYMENT" as defined in Section 2.14(c).
"WARRANT" as defined in Section 3.1(z).
"WARRANT AGREEMENT" means a Warrant Purchase Agreement substantially in the
form of Exhibit L.
27
"WARRANT SHARES" as defined in Section 3.1(z).
1.2 ACCOUNTING TERMS. Except as otherwise expressly provided herein, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Company to Lenders pursuant to Section 5.1(a),
5.1(b) and 5.1(c) shall be prepared in accordance with GAAP as in effect at the
time of such preparation (and delivered together with the reconciliation
statements provided for in Section 5.1(e), if applicable). Subject to the
foregoing, calculations in connection with the definitions, covenants and other
provisions hereof shall utilize accounting principles and policies in conformity
with those used to prepare the Historical Financial Statements.
1.3 INTERPRETATION, ETC. Any of the terms defined herein may, unless the context
otherwise requires, be used in the singular or the plural, depending on the
reference. References herein to any Section, Appendix, Schedule or Exhibit shall
be to a Section, an Appendix, a Schedule or an Exhibit, as the case may be,
hereof unless otherwise specifically provided. References to any agreement shall
be to such agreement as amended, restated, modified or supplemented from time to
time and shall include references to appendices, annexes, schedules, and
exhibits thereto. The use herein of the word "include" or "including," when
following any general statement, term or matter, shall not be construed to limit
such statement, term or matter to the specific items or matters set forth
immediately following such word or to similar items or matters, whether or not
no limiting language (such as "without limitation" or "but not limited to" or
words of similar import) is used with reference thereto, but rather shall be
deemed to refer to all other items or matters that fall within the broadest
possible scope of such general statement, term or matter.
SECTION 2. LOANS
2.1 TERM LOAN.
(a) Loan Commitments. Subject to the terms and conditions hereof,
each Lender severally agrees to make, on the Closing Date, a Term Loan to
Company in an amount equal to such Lender's Term Loan Commitment.
Company may make only one borrowing under the Term Loan Commitment
which shall be on the Closing Date. Any amount borrowed under this Section
2.1(a) and subsequently repaid or prepaid may not be reborrowed. Subject to
Sections 2.11 and 2.12, all amounts owed hereunder with respect to the Term Loan
shall be paid in full no later than the Term Loan Maturity Date. Each Lender's
Term Loan Commitment shall terminate immediately and without further action on
the Closing Date after giving effect to the funding of such Lender's Term Loan
Commitment, if any, on such date.
(b) Borrowing Mechanics for the Term Loan.
(i) Company shall deliver to Administrative Agent a fully
executed Funding Notice no later than three (3) Business Days prior to the
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Closing Date. Promptly upon receipt by Administrative Agent of such Funding
Notice, Administrative Agent shall notify each Lender of the proposed
borrowing.
(ii) Each Lender shall make its Term Loan available to
Administrative Agent not later than 12:00 p.m. (New York City time) on the
Closing Date, by wire transfer of same day funds in Dollars, to the
Administrative Agent's Account. Upon satisfaction or waiver of the
conditions precedent specified herein, Administrative Agent shall make the
proceeds of the Term Loan available to Company on the Closing Date by
causing (x) $6,400,000 of the proceeds of the Term Loan to be paid to the
escrow account established under the Escrow Agreement (to the extent
received by Administrative Agent from Lenders) and (y) an amount of same
day funds in Dollars equal to the proceeds of all such Loans received by
Administrative Agent from Lenders (less the amount transferred to the
escrow account described in clause (x), above) to be credited to the
account of Company (account number 3300395109) at Silicon Valley Bank or to
such other account as may be designated in writing to Administrative Agent
by Company.
2.2 REVOLVING LOANS.
(a) Revolving Commitments. During the Revolving Commitment
Period, subject to the terms and conditions hereof, each Lender severally agrees
to make Revolving Loans to Company in an aggregate amount up to but not
exceeding such Lender's Revolving Commitment; provided, that after giving effect
to the making of any Revolving Loans in no event shall the Total Utilization of
Revolving Commitments exceed the Revolving Commitments then in effect. Amounts
borrowed pursuant to this Section 2.2(a) may be repaid and reborrowed during the
Revolving Commitment Period. Each Lender's Revolving Commitment shall expire on
the Revolving Commitment Termination Date and all Revolving Loans and all other
amounts owed hereunder with respect to the Revolving Loans and the Revolving
Commitments shall be paid in full no later than such date.
(b) Borrowing Mechanics for Revolving Loans.
(i) Revolving Loans that are Base Rate Loans shall be in an
aggregate minimum amount of $1,000,000 and integral multiples of $500,000
in excess of that amount and Revolving Loans that are LIBOR Rate Loans
shall be in an aggregate minimum amount of $1,000,000 and integral
multiples of $1,000,000 in excess of that amount.
(ii) Whenever Company desires that Lenders make Revolving Loans,
Company shall deliver to Administrative Agent a fully executed and
delivered Funding Notice no later than 10:00 a.m. (New York City time) at
least three (3) Business Days in advance of the proposed Credit Date in the
case of a LIBOR Rate Loan, and at least one (1) Business Day in advance of
the proposed Credit Date in the case of a Revolving Loan that is a Base
Rate Loan. Except as otherwise provided herein, a Funding Notice for a
Revolving Loan that is a
29
LIBOR Rate Loan shall be irrevocable on and after the related Interest Rate
Determination Date, and Company shall be bound to make a borrowing in
accordance therewith.
(iii) Notice of receipt of each Funding Notice in respect of
Revolving Loans, together with the amount of each Lender's Pro Rata Share
thereof, if any, together with the applicable interest rate, shall be
provided by Administrative Agent to each applicable Lender by telefacsimile
with reasonable promptness, but (provided Administrative Agent shall have
received such notice by 10:00 a.m. (New York City time)) not later than
2:00 p.m. (New York City time) on the same day as Administrative Agent's
receipt of such Notice from Company.
(iv) Each Lender shall make the amount of its Revolving Loan
available to Administrative Agent not later than 12:00 p.m. (New York City
time) on the applicable Credit Date by wire transfer of same day funds in
Dollars, to the Administrative Agent's Account. Except as provided herein,
upon satisfaction or waiver of the conditions precedent specified herein,
Administrative Agent shall make the proceeds of such Revolving Loans
available to Company on the applicable Credit Date by causing an amount of
same day funds in Dollars equal to the proceeds of all such Revolving Loans
received by Administrative Agent from Lenders to be credited to the account
of Company (account number 3300395109) at Silicon Valley Bank or such other
account as may be designated in writing to Administrative Agent by Company.
2.3 [RESERVED]
2.4 PRO RATA SHARES; AVAILABILITY OF FUNDS.
(a) Pro Rata Shares. All Loans shall be made, and all
participations purchased, by Lenders simultaneously and proportionately to their
respective Pro Rata Shares, it being understood that no Lender shall be
responsible for any default by any other Lender in such other Lender's
obligation to make a Loan requested hereunder or purchase a participation
required hereby nor shall any Term Loan Commitment or any Revolving Commitment
of any Lender be increased or decreased as a result of a default by any other
Lender in such other Lender's obligation to make a Loan requested hereunder or
purchase a participation required hereby.
(b) Availability of Funds. Unless Administrative Agent shall have
been notified by any Lender prior to the applicable Credit Date that such Lender
does not intend to make available to Administrative Agent the amount of such
Lender's Loan requested on such Credit Date, Administrative Agent may assume
that such Lender has made such amount available to Administrative Agent on such
Credit Date and Administrative Agent may, in its sole discretion, but shall not
be obligated to, make available to Company a corresponding amount on such Credit
Date. If such corresponding amount is not in fact made available to
Administrative Agent by such Lender, Administrative Agent shall be entitled to
recover such corresponding amount on
30
demand from such Lender together with interest thereon, for each day from such
Credit Date until the date such amount is paid to Administrative Agent, at the
customary rate set by Administrative Agent for the correction of errors among
banks for three (3) Business Days and thereafter at the Base Rate. If such
Lender does not pay such corresponding amount forthwith upon Administrative
Agent's demand therefor, Administrative Agent shall promptly notify Company and
Company shall immediately pay such corresponding amount to Administrative Agent
together with interest thereon, for each day from such Credit Date until the
date such amount is paid to Administrative Agent, at the rate payable hereunder
for Base Rate Loans for such Class of Loans. Nothing in this Section 2.4(b)
shall be deemed to relieve any Lender from its obligation to fulfill its Term
Loan Commitments and Revolving Commitments hereunder or to prejudice any rights
that Company may have against any Lender as a result of any default by such
Lender hereunder.
2.5 USE OF PROCEEDS. The proceeds of the Term Loan made on the Closing Date
shall be applied by Company to consummate the Refinancing and to pay fees and
expenses associated with the Transactions (and to pay any related transaction
expenses). The proceeds of the Revolving Loans made after the Closing Date shall
be applied by Company for working capital and general corporate purposes of
Company and its Subsidiaries. No portion of the proceeds of any Credit Extension
shall be used in any manner that causes or might cause such Credit Extension or
the application of such proceeds to violate Regulation T, Regulation U or
Regulation X of the Board of Governors of the Federal Reserve System or any
other regulation thereof or to violate the Exchange Act.
2.6 EVIDENCE OF DEBT; REGISTER; LENDERS' BOOKS AND RECORDS; NOTES.
(a) Lenders' Evidence of Debt. Each Lender shall maintain on its
internal records an account or accounts evidencing the Obligations of Company to
such Lender, including the amounts of the Loans made by it and each repayment
and prepayment in respect thereof. Any such recordation shall be conclusive and
binding on Company, absent manifest error; provided, that the failure to make
any such recordation, or any error in such recordation, shall not affect any
Lender's Revolving Commitments or Company's Obligations in respect of any
applicable Loans; and provided further, in the event of any inconsistency
between the Register and any Lender's records, the recordations in the Register
shall govern.
(b) Register. Administrative Agent shall maintain at its
Principal Office a register for the recordation of the names and addresses of
Lenders and the Revolving Commitments and Loans of each Lender from time to time
(the "REGISTER"). The Register shall be available for inspection by Company or
any Lender at any reasonable time and from time to time upon reasonable prior
notice. Administrative Agent shall record in the Register the Revolving
Commitments and the Loans, and each repayment or prepayment in respect of the
principal amount of the Loans, and any such recordation shall be conclusive and
binding on Company and each Lender, absent manifest error; provided, failure to
make any such recordation, or any error in such recordation, shall not affect
any Lender's Revolving Commitments or Company's
31
Obligations in respect of any Loan. Company hereby designates the entity serving
as Administrative Agent to serve as Company's agent solely for purposes of
maintaining the Register as provided in this Section 2.6, and Company hereby
agrees that, to the extent such entity serves in such capacity, the entity
serving as Administrative Agent and its officers, directors, employees, agents
and affiliates shall constitute "Indemnitees."
(c) Notes. If so requested by any Lender by written notice to
Company (with a copy to Administrative Agent) at least two (2) Business Days
prior to the Closing Date, or at any time thereafter, Company shall execute and
deliver to such Lender (and/or, if applicable and if so specified in such
notice, to any Person who is an assignee of such Lender pursuant to Section
10.6) on the Closing Date (or, if such notice is delivered after the Closing
Date, promptly after Company's receipt of such notice) a Note or Notes to
evidence such Lender's Term Loan or Revolving Loan, as the case may be.
2.7 INTEREST ON LOANS.
(a) Except as otherwise set forth herein, each Class of Loan
shall bear interest on the unpaid principal amount thereof from the date made
through repayment (whether by acceleration or otherwise) thereof as follows:
(i) if a Base Rate Loan, at the Base Rate plus the Applicable
Margin; or
(ii) if a LIBOR Rate Loan, at the Adjusted LIBOR Rate plus the
Applicable Margin.
(b) The basis for determining the rate of interest with respect
to any Loan, and the Interest Period with respect to any LIBOR Rate Loan, shall
be selected by Company and notified to Administrative Agent and Lenders pursuant
to the applicable Funding Notice or Conversion/Continuation Notice, as the case
may be. If on any day a Loan is outstanding with respect to which a Funding
Notice or Conversion/Continuation Notice has not been delivered to
Administrative Agent in accordance with the terms hereof specifying the
applicable basis for determining the rate of interest, then for that day such
Loan shall be a Base Rate Loan.
(c) In connection with LIBOR Rate Loans, there shall be no more
than five (5) Interest Periods outstanding at any time. In the event Company
fails to specify between a Base Rate Loan or a LIBOR Rate Loan in the applicable
Funding Notice or Conversion/Continuation Notice, such Loan (if outstanding as a
LIBOR Rate Loan) will be automatically converted into a Base Rate Loan on the
last day of the then current Interest Period for such Loan (or if outstanding as
a Base Rate Loan will remain as, or (if not then outstanding) will be made as, a
Base Rate Loan). In the event Company fails to specify an Interest Period for
any LIBOR Rate Loan in the applicable Funding Notice or Conversion/Continuation
Notice, Company shall be deemed to have selected an Interest Period of one
month. As soon as practicable after 10:00 a.m. (New York City time) on each
Interest Rate Determination Date, Administrative Agent shall
32
determine (which determination shall, absent manifest error, be final,
conclusive and binding upon all parties) the interest rate that shall apply to
the LIBOR Rate Loans for which an interest rate is then being determined for the
applicable Interest Period and shall promptly give notice thereof (in writing or
by telephone confirmed in writing) to Company and each Lender.
(d) Interest payable pursuant to Section 2.7(a) shall be computed
on the basis of a 360-day year for LIBOR Rate Loans and Base Rate Loans if the
interest rate on such Base Rate Loans is calculated in reference to the Federal
Funds Rates (or 365 days in the case of Base Rate Loans, the interest rate
payable on which is then based on the Prime Rate), in each case for the actual
number of days elapsed in the period during which it accrues. In computing
interest on any Loan, the date of the making of such Loan or the first day of an
Interest Period applicable to such Loan or, with respect to a Base Rate Loan
being converted from a LIBOR Rate Loan, the date of conversion of such LIBOR
Rate Loan to such Base Rate Loan, as the case may be, shall be included, and the
date of payment of such Loan or the expiration date of an Interest Period
applicable to such Loan or, with respect to a Base Rate Loan being converted to
a LIBOR Rate Loan, the date of conversion of such Base Rate Loan to such LIBOR
Rate Loan, as the case may be, shall be excluded; provided, if a Loan is repaid
on the same day on which it is made, one day's interest shall be paid on that
Loan.
(e) Except as otherwise set forth herein, interest on each Loan
shall be payable in arrears on and to (i) each Interest Payment Date applicable
to that Loan; (ii) upon any prepayment of that Loan, whether voluntary or
mandatory, to the extent accrued on the amount being prepaid; and (iii) at
maturity, including final maturity. Notwithstanding any of the foregoing to the
contrary, accrued interest payable on the Term Loan which (i) exceeds the
Adjusted LIBOR Rate plus 5.00% per annum prior to the first anniversary of the
Closing Date or (ii) exceeds the Adjusted LIBOR Rate plus 7.00% per annum after
the first anniversary of the Closing Date shall to the extent of such excess,
with respect to the Term Loan, be capitalized and added to the outstanding
principal amount of the Term Loan as of the last day of each Fiscal Quarter.
Amounts representing accrued interest which are added to the outstanding
principal of Term Loan accruing such interest and shall thereafter bear interest
in accordance with Section 2.7(a) and otherwise be treated as a Term Loan for
purposes of this Agreement.
2.8 CONVERSION/CONTINUATION.
(a) Subject to Section 2.17 and so long as no Default or Event of
Default shall have occurred and then be continuing, Company shall have the
option:
(i) to convert at any time all or any part of any Term Loan or
Revolving Loan equal to $1,000,000 and integral multiples of $500,000 in
excess of that amount from one Type of Loan to another Type of Loan;
provided, a LIBOR Rate Loan may only be converted on the expiration of the
Interest Period applicable to such LIBOR Rate Loan unless Company shall pay
all amounts due under Section 2.17 in connection with any such conversion;
or
33
(ii) upon the expiration of any Interest Period applicable to any
LIBOR Rate Loan, to continue all or any portion of such Loan equal to
$1,000,000 and integral multiples of $500,000 in excess of that amount as a
LIBOR Rate Loan.
(b) Company shall deliver a Conversion/Continuation Notice to
Administrative Agent no later than 10:00 a.m. (New York City time) at least one
(1) Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan) and at least three (3) Business Days in advance
of the proposed conversion/continuation date (in the case of a conversion to, or
a continuation of, a LIBOR Rate Loan). Except as otherwise provided herein, a
Conversion/Continuation Notice for conversion to, or continuation of, any LIBOR
Rate Loans (or telephonic notice in lieu thereof) shall be irrevocable on and
after the related Interest Rate Determination Date, and Company shall be bound
to effect a conversion or continuation in accordance therewith.
2.9 DEFAULT INTEREST. Upon the occurrence and during the continuance of an Event
of Default, the principal amount of all Loans outstanding and, to the extent
permitted by applicable law, any interest payments on the Loans or any fees or
other amounts owed hereunder, shall thereafter bear interest (including post
petition interest in any proceeding under the Bankruptcy Code or other
applicable bankruptcy laws) payable on demand at a rate that is 2% per annum in
excess of the interest rate otherwise payable hereunder with respect to the
applicable Loans (or, in the case of any such fees and other amounts, at a rate
which is 2% per annum in excess of the interest rate otherwise payable hereunder
for Base Rate Loans); provided, in the case of LIBOR Rate Loans, upon the
expiration of the Interest Period in effect at the time any such increase in
interest rate is effective such LIBOR Rate Loans shall thereupon become Base
Rate Loans and shall thereafter bear interest payable upon demand at a rate
which is 2% per annum in excess of the interest rate otherwise payable hereunder
for Base Rate Loans. Payment or acceptance of the increased rates of interest
provided for in this Section 2.9 is not a permitted alternative to timely
payment and shall not constitute a waiver of any Event of Default or otherwise
prejudice or limit any rights or remedies of Administrative Agent or any Lender.
2.10 FEES.
(a) Company agrees to pay to Lenders having Revolving Exposure
commitment fees equal to (1) the average of the daily difference between (a) the
Revolving Commitments, and (b) the aggregate principal amount of outstanding
Revolving Loans, times (2) one percent (1.00 %) per annum.
All fees referred to in this Section 2.10(a) shall be paid to Administrative
Agent's Account, and upon receipt, Administrative Agent shall promptly
distribute to each Lender its Pro Rata Share thereof.
(b) All fees referred to in Section 2.10(a) shall be calculated
on the basis of a 360-day year and the actual number of days elapsed and shall
be payable quarterly in arrears on March 31, June 30, September 30 and December
31 of each year
34
during the Revolving Commitment Period, commencing on the first such date to
occur after the Closing Date, and on the Revolving Commitment Termination Date.
(c) In addition to any of the foregoing fees, Company agrees to
pay to Agents such other fees in the amounts and at the times separately agreed
upon, including, but not limited to, fees set forth in the Fee Letter.
2.11 SCHEDULED PAYMENTS/COMMITMENT REDUCTIONS.
The principal amounts of the Term Loan shall be repaid in consecutive
quarterly installments (each, an "INSTALLMENT") in the aggregate amounts set
forth below on the last day of each calendar quarter, commencing April 30, 2007:
TERM LOAN
AMORTIZATION DATE: INSTALLMENTS
------------------ ------------
April 30, 2007 $ 500,000
July 31, 2007 $1,200,000
October 31, 2007 $1,200,000
January 31, 2008 $1,400,000
April 30, 2008 $1,600,000
July 31, 2008 $1,700,000
October 31, 2008 $2,300,000
January 31, 2009 $2,300,000
April 30, 2009 $2,300,000
July 31, 2009 $2,300,000
October 31, 2009 $2,900,000
January 31, 2010 $3,000,000
April 30, 2010 $3,000,000
July 31, 2010 $3,000,000
October 31, 2010 $3,100,000
January 31, 2011 $3,200,000
Notwithstanding the foregoing, (x) such Installments shall be reduced in
connection with any voluntary or mandatory prepayments of the Term Loan, as the
case may be, in accordance with Sections 2.12 and 2.13, as applicable; and (y)
the Term Loan, together with all other amounts owed hereunder with respect
thereto, shall, in any event, be paid in full no later than the Term Loan
Maturity Date.
35
2.12 VOLUNTARY PREPAYMENTS/COMMITMENT REDUCTIONS.
(a) Voluntary Prepayments.
(i) Any time and from time to time:
(1) with respect to Base Rate Loans, Company may prepay any
such Loans on any Business Day in whole or in part, in an aggregate minimum
amount of $1,000,000 and integral multiples of $500,000 in excess of that
amount; and
(2) with respect to LIBOR Rate Loans, Company may prepay any
such Loans on any Business Day in whole or in part (together with any
amounts due pursuant to Section 2.17(c)) in an aggregate minimum amount of
$1,000,000 and integral multiples of $500,000 in excess of that amount.
(ii) All such prepayments shall be made:
(1) upon not less than one (1) Business Day's prior written
notice in the case of Base Rate Loans; and
(2) upon not less than three (3) Business Days' prior
written notice in the case of LIBOR Rate Loans,
in each case given to Administrative Agent by 12:00 p.m. (New York City time) on
the date required. Upon the giving of any such notice, the principal amount of
the Loans specified in such notice shall become due and payable on the
prepayment date specified therein. Any such voluntary prepayment shall be
applied as specified in Section 2.14(a) with respect to Revolving Loans and
Section 2.14(b) with respect to the Term Loan.
(b) Voluntary Commitment Reductions.
(i) At any time after the Term Loan has been repaid in full,
Company may, from time to time and upon not less than three (3) Business
Days' prior written notice, terminate in whole or permanently reduce in
part the Revolving Commitments in an amount up to the amount by which the
Revolving Commitments exceed the Total Utilization of Revolving Commitments
at the time of such proposed termination or reduction; provided, any such
partial reduction of the Revolving Commitments shall be in an aggregate
minimum amount of $500,000 and integral multiples of $100,000 in excess of
that amount.
(ii) Company's notice to Administrative Agent shall designate the
date (which shall be a Business Day) of such termination or reduction and
the amount of any partial reduction, and such termination or reduction of
the Revolving Commitments shall be effective on the date specified in
Company's notice and shall reduce the Revolving Commitment of each Lender
proportionately to its Pro Rata Share thereof.
36
(c) Call Protection. If Company prepays, for any reason, all or
any part of the principal balance of any Term Loan, Company shall pay to
Administrative Agent, for the benefit of all Lenders entitled to a portion
of such prepayment a prepayment premium (the "PREPAYMENT PREMIUM") on the
amount so prepaid as follows:
PREPAYMENT PREMIUM AS A PERCENTAGE
DATE OF PREPAYMENT OF THE AMOUNT SO PREPAID
----------------------------------- ----------------------------------
On or prior to first anniversary of 8%
the Closing Date
After the first anniversary of the 4%
Closing Date but on or prior to the
second anniversary
After the second anniversary of the 3%
Closing Date but on or prior to the
third anniversary
After the third anniversary of the 2%
Closing Date but on or prior to the
fourth anniversary
After the fourth anniversary of the 1%
Closing Date
provided, however, that (1) the Prepayment Premium shall be reduced by one-half
(1/2) for the first $5,000,000 of mandatory prepayments required under Section
2.13(c) and (2) the Prepayment Premium shall be zero for (i) mandatory
prepayments required under Sections 2.13(b), (e), (f), and (h) and (ii) all
payments made during the three months prior to the Term Loan Maturity Date.
2.13 MANDATORY PREPAYMENTS/COMMITMENT REDUCTIONS.
(a) Asset Sales. No later than the first Business Day following
the date of receipt by Company or any of its Subsidiaries of any Net Asset Sale
Proceeds, Company shall prepay the Loans and/or the Revolving Commitments shall
be permanently reduced as set forth in Section 2.14(b) in an aggregate amount
equal to 100% of such Net Asset Sale Proceeds; provided, (i) so long as no
Default or Event of Default shall have occurred and be continuing, and (ii) to
the extent that aggregate Net Asset Sale Proceeds from the Closing Date through
the applicable date of determination do not exceed $250,000, Company shall have
the option, directly or through one or more of its Subsidiaries, to invest Net
Asset Sale Proceeds within one hundred eighty (180) days of receipt thereof in
long term productive assets of the general type used in the
37
business of Company and its Subsidiaries; provided further, pending any such
investment all such Net Asset Sale Proceeds shall be applied to prepay Revolving
Loans to the extent outstanding (without a reduction in Revolving Commitments).
(b) Insurance/Condemnation Proceeds. No later than the first
Business Day following the date of receipt by Company or any of its
Subsidiaries, or Administrative Agent as loss payee, of any Net
Insurance/Condemnation Proceeds, Company shall prepay the Loans and/or the
Revolving Commitments shall be permanently reduced as set forth in Section
2.14(b) in an aggregate amount equal to 100% of such Net Insurance/Condemnation
Proceeds; provided, (i) so long as no Default or Event of Default shall have
occurred and be continuing, and (ii) to the extent that aggregate Net
Insurance/Condemnation Proceeds from the Closing Date through the applicable
date of determination do not exceed $250,000, Company shall have the option,
directly or through one or more of its Subsidiaries to invest such Net
Insurance/Condemnation Proceeds within one hundred eighty (180) days of receipt
thereof in long term productive assets of the general type used in the business
of Company and its Subsidiaries, which investment may include the repair,
restoration or replacement of the applicable assets thereof; provided further,
pending any such investment all such Net Insurance/Condemnation Proceeds, as the
case may be, shall be applied to prepay Revolving Loans to the extent
outstanding (without a reduction in Revolving Commitments).
(c) Issuance of Equity Securities. On the date of receipt by
Company or any of its Subsidiaries of any Cash proceeds from a capital
contribution to Company or the issuance of any Capital Stock of Company or any
of its Subsidiaries (other than Capital Stock issued (i) pursuant to any
employee stock or stock option compensation plan, or (ii) for purposes approved
in writing by Administrative Agent), Company shall prepay the Loans and/or the
Revolving Commitments shall be permanently reduced as set forth in Section
2.14(b) in an aggregate amount equal to 50% of such proceeds in excess of
$10,000,000, net of underwriting discounts and commissions and other reasonable
costs and expenses associated therewith, including reasonable legal fees and
expenses.
(d) Issuance of Debt. On the date of receipt by Company or any of
its Subsidiaries of any Cash proceeds from the incurrence of any Indebtedness of
Company or any of its Subsidiaries (other than with respect to any Indebtedness
permitted to be incurred pursuant to Section 6.1), Company shall prepay the
Loans and/or the Revolving Commitments shall be permanently reduced as set forth
in Section 2.14(b) in an aggregate amount equal to 100% of such proceeds, net of
underwriting discounts and commissions and other reasonable costs and expenses
associated therewith, including reasonable legal fees and expenses.
(e) Consolidated Excess Cash Flow. In the event that there shall
be Consolidated Excess Cash Flow for any Fiscal Year (commencing with Fiscal
Year ending on July 31, 2006), Company shall, no later than ninety (90) days
after the end of such Fiscal Year, prepay the Loans and/or the Revolving
Commitments shall be permanently reduced as set forth in Section 2.14(b) in an
aggregate amount equal to 50%
38
of such Consolidated Excess Cash Flow. Any amounts prepaid pursuant to this
Section 2.13(e) with respect to any Fiscal Year in excess of 50% of Consolidated
Excess Cash Flow shall be treated as voluntary prepayments made pursuant to
Section 2.12(a).
(f) Extraordinary Receipts. No later than the first Business Day
following the date of receipt by Company or any of its Subsidiaries of any
Extraordinary Receipts, Company shall prepay the Loans and/or the Revolving
Commitments shall be permanently reduced as set forth in Section 2.14(b) in an
aggregate amount equal to such Extraordinary Receipts.
(g) Revolving Loans. Company shall from time to time prepay the
Revolving Loans to the extent necessary so that the Total Utilization of
Revolving Commitments shall not at any time exceed the Revolving Commitments
then in effect.
(h) Prepayment Certificate. Concurrently with any prepayment of
the Loans and/or reduction of the Revolving Commitments pursuant to Sections
2.13(a) through 2.13(f), Company shall deliver to Administrative Agent a
certificate of an Authorized Officer demonstrating the calculation of the amount
of the applicable net proceeds or Consolidated Excess Cash Flow, as the case may
be. In the event that Company shall subsequently determine that the actual
amount received exceeded the amount set forth in such certificate, Company shall
promptly make an additional prepayment of the Loans and/or the Revolving
Commitments shall be permanently reduced in an amount equal to such excess, and
Company shall concurrently therewith deliver to Administrative Agent a
certificate of an Authorized Officer demonstrating the derivation of such
excess.
2.14 APPLICATION OF PREPAYMENTS/REDUCTIONS.
(a) Application of Voluntary Prepayments of Revolving Loans. Any
prepayment of any Revolving Loan pursuant to Section 2.12 shall be applied to
repay outstanding Revolving Loans to the full extent thereof. No voluntary
prepayment of Revolving Loans pursuant to Section 2.12 shall permanently reduce
the Revolving Commitments.
(b) Application of Prepayments by Type of Loans. Any voluntary
prepayments of the Term Loan pursuant to Section 2.12 and any mandatory
prepayment of any Loan pursuant to Section 2.13 shall be applied as follows:
first, to the payment of all expenses and fees to the full extent
thereof;
second, to the payment of any accrued interest at the Default
Rate, if any;
third, to the payment of the Prepayment Premium, if any, on any
Loan;
39
fourth, to the payment of any accrued interest (other than
Default Rate interest);
fifth, except in connection with any Waivable Prepayment in
Section 2.14(c), to prepay the Term Loan, which prepayments shall be
applied on a pro rata basis to reduce the remaining scheduled Installments
of principal of the Term Loan; and
sixth, to prepay the Revolving Loans to the full extent thereof
and to further permanently reduce the Revolving Commitments by the amount
of such prepayment.
(c) Waivable of Certain Prepayments. Anything contained herein to
the contrary notwithstanding, in the event Company is required to make any
mandatory prepayment (a "WAIVABLE PREPAYMENT") of the Term Loan, not less than
three (3) Business Days prior to the date (the "PREPAYMENT DATE") on which
Company is required to make such Waivable Prepayment, Company shall notify
Administrative Agent of the amount of such prepayment, and Administrative Agent
will promptly thereafter notify each Lender holding an outstanding Term Loan of
the amount of such Lender's Pro Rata Share of such Waivable Prepayment and such
Lender's option to refuse such amount. Each such Lender may exercise such option
by giving written notice to Company and Administrative Agent of its election to
do so on or before the first Business Day prior to the Prepayment Date (it being
understood that any Lender which does not notify Company and Administrative
Agent of its election to exercise such option on or before the first Business
Day prior to the Prepayment Date shall be deemed to have elected, as of such
date, not to exercise such option). On the Prepayment Date, Company shall pay to
Administrative Agent the amount of the Waivable Prepayment, which amount shall
be applied (i) in an amount equal to that portion of the Waivable Prepayment
payable to those Lenders that have elected not to exercise such option, to
prepay the Term Loan of such Lenders (which prepayment shall be applied to the
scheduled Installments of principal of the Term Loan in accordance with Section
2.14(b)), and (ii) to the extent of any excess, to Company for working capital
and general corporate purposes.
(d) Application of Prepayments of Loans to Base Rate Loans and
LIBOR Rate Loans. Considering each Class of Loans being prepaid separately, any
prepayment thereof shall be applied first to Base Rate Loans, if any, to the
full extent thereof before application to LIBOR Rate Loans, in each case in a
manner which minimizes the amount of any payments required to be made by Company
pursuant to Section 2.17(c).
2.15 GENERAL PROVISIONS REGARDING PAYMENTS.
(a) All payments by Company of principal, interest, fees and
other Obligations shall be made in Dollars in same day funds, without defense,
recoupment, setoff or counterclaim, free of any restriction or condition, and
paid to Administrative Agent not later than 12:00 p.m. (New York City time) on
the date due at
40
Administrative Agent's Account for the account of Lenders; funds received by
Administrative Agent after that time on such due date shall be deemed to have
been paid by Company on the next succeeding Business Day.
(b) All payments in respect of the principal amount of any Loan
(other than voluntary prepayments of Revolving Loans) shall be accompanied by
payment of accrued interest on the principal amount being repaid or prepaid.
(c) Administrative Agent shall promptly distribute to each Lender
at such address as such Lender shall indicate in writing, such Lender's
applicable Pro Rata Share of all payments and prepayments of principal and
interest due hereunder, together with all other amounts due thereto, including,
without limitation, all fees payable with respect thereto, to the extent
received by Administrative Agent.
(d) Notwithstanding the foregoing provisions hereof, if any
Conversion/ Continuation Notice is withdrawn as to any Affected Lender or if any
Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share of any LIBOR
Rate Loans, Administrative Agent shall give effect thereto in apportioning
payments received thereafter.
(e) Subject to the provisos set forth in the definition of
"Interest Period," whenever any payment to be made hereunder shall be stated to
be due on a day that is not a Business Day, such payment shall be made on the
next succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder or of the commitment fees
hereunder.
(f) Administrative Agent shall deem any payment by or on behalf
of Company hereunder that is not made in same day funds prior to 12:00 p.m. (New
York City time) to be a non-conforming payment. Any such payment shall not be
deemed to have been received by Administrative Agent until the later of (i) the
time such funds become available funds, and (ii) the applicable next Business
Day. Administrative Agent shall give prompt telephonic notice to Company and
each applicable Lender (confirmed in writing) if any payment is non-conforming.
Any non-conforming payment may constitute or become a Default or Event of
Default in accordance with the terms of Section 8.1(a). Interest shall continue
to accrue on any principal as to which a non-conforming payment is made until
such funds become available funds (but in no event less than the period from the
date of such payment to the next succeeding applicable Business Day) at the
Default Rate determined pursuant to Section 2.9 from the date such amount was
due and payable until the date such amount is paid in full.
(g) If an Event of Default shall have occurred and not otherwise
been waived, and the maturity of the Obligations shall have been accelerated
pursuant to Section 8.1, all payments or proceeds received by Agents hereunder
in respect of any of the Obligations, shall be applied in accordance with the
application arrangements described in Section 7.2 of the Pledge and Security
Agreement.
41
2.16 RATABLE SHARING. Lenders hereby agree among themselves that, except as
otherwise provided in the Collateral Documents with respect to amounts realized
from the exercise of rights with respect to Liens on the Collateral, if any of
them shall, whether by voluntary payment (other than a voluntary prepayment of
Loans made and applied in accordance with the terms hereof), through the
exercise of any right of set off or banker's lien, by counterclaim or cross
action or by the enforcement of any right under the Credit Documents or
otherwise, or as adequate protection of a deposit treated as cash collateral
under the Bankruptcy Code, receive payment or reduction of a proportion of the
aggregate amount of principal, interest, fees and other amounts then due and
owing to such Lender hereunder or under the other Credit Documents
(collectively, the "AGGREGATE AMOUNTS DUE" to such Lender) which is greater than
the proportion received by any other Lender in respect of the Aggregate Amounts
Due to such other Lender, then the Lender receiving such proportionately greater
payment shall (a) notify Administrative Agent and each other Lender of the
receipt of such payment and (b) apply a portion of such payment to purchase
participations (which it shall be deemed to have purchased from each seller of a
participation simultaneously upon the receipt by such seller of its portion of
such payment) in the Aggregate Amounts Due to the other Lenders so that all such
recoveries of Aggregate Amounts Due shall be shared by all Lenders in proportion
to the Aggregate Amounts Due to them; provided, if all or part of such
proportionately greater payment received by such purchasing Lender is thereafter
recovered from such Lender upon the bankruptcy or reorganization of Company or
otherwise, those purchases shall be rescinded and the purchase prices paid for
such participations shall be returned to such purchasing Lender ratably to the
extent of such recovery, but without interest. Company expressly consents to the
foregoing arrangement and agrees that any holder of a participation so purchased
may exercise any and all rights of banker's lien, set off or counterclaim with
respect to any and all monies owing by Company to that holder with respect
thereto as fully as if that holder were owed the amount of the participation
held by that holder.
2.17 MAKING OR MAINTAINING LIBOR RATE LOANS.
(a) Inability to Determine Applicable Interest Rate. In the event
that Administrative Agent shall have determined (which determination shall be
final and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any LIBOR Rate Loans, that by reason of
circumstances affecting the London interbank market adequate and fair means do
not exist for ascertaining the interest rate applicable to such LIBOR Rate Loans
on the basis provided for in the definition of Adjusted LIBOR Rate,
Administrative Agent shall on such date give notice (by telefacsimile or by
telephone confirmed in writing) to Company and each Lender of such
determination, whereupon (i) no Loans may be made as, or converted to, LIBOR
Rate Loans until such time as Administrative Agent notifies Company and Lenders
that the circumstances giving rise to such notice no longer exist, and (ii) any
Funding Notice or Conversion/Continuation Notice given by Company with respect
to the Loans in respect of which such determination was made shall be deemed to
be rescinded by Company.
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(b) Illegality or Impracticability of LIBOR Rate Loans. In the
event that on any date any Lender shall have determined (which determination
shall be final and conclusive and binding upon all parties hereto but shall be
made only after consultation with Company and Administrative Agent) that the
making, maintaining or continuation of its LIBOR Rate Loans (i) has become
unlawful as a result of compliance by such Lender in good faith with any law,
treaty, governmental rule, regulation, guideline or order (or would conflict
with any such treaty, governmental rule, regulation, guideline or order not
having the force of law even though the failure to comply therewith would not be
unlawful), or (ii) has become impracticable, as a result of contingencies
occurring after the date hereof which materially and adversely affect the London
interbank market or the position of such Lender in that market, then, and in any
such event, such Lender shall be an "AFFECTED LENDER" and it shall on that day
give notice (by telefacsimile or by telephone confirmed in writing) to Company
and Administrative Agent of such determination (which notice Administrative
Agent shall promptly transmit to each other Lender). Thereafter (1) the
obligation of the Affected Lender to make Loans as, or to convert Loans to,
LIBOR Rate Loans shall be suspended until such notice shall be withdrawn by the
Affected Lender, (2) to the extent such determination by the Affected Lender
relates to a LIBOR Rate Loan then being requested by Company pursuant to a
Funding Notice or a Conversion/Continuation Notice, the Affected Lender shall
make such Loan as (or continue such Loan as or convert such Loan to, as the case
may be) a Base Rate Loan, (3) the Affected Lender's obligation to maintain its
outstanding LIBOR Rate Loans (the "AFFECTED LOANS") shall be terminated at the
earlier to occur of the expiration of the Interest Period then in effect with
respect to the Affected Loans or when required by law, and (4) the Affected
Loans shall automatically convert into Base Rate Loans on the date of such
termination. Notwithstanding the foregoing, to the extent a determination by an
Affected Lender as described above relates to a LIBOR Rate Loan then being
requested by Company pursuant to a Funding Notice or a Conversion/Continuation
Notice, Company shall have the option, subject to the provisions of Section
2.17(c), to rescind such Funding Notice or Conversion/Continuation Notice as to
all Lenders by giving notice (by telefacsimile or by telephone confirmed in
writing) to Administrative Agent of such rescission on the date on which the
Affected Lender gives notice of its determination as described above (which
notice of rescission Administrative Agent shall promptly transmit to each other
Lender). Except as provided in the immediately preceding sentence, nothing in
this Section 2.17(b) shall affect the obligation of any Lender other than an
Affected Lender to make or maintain Loans as, or to convert Loans to, LIBOR Rate
Loans in accordance with the terms hereof.
(c) Compensation for Breakage or Non-Commencement of Interest
Periods. Company shall compensate each Lender, upon written request by such
Lender (which request shall set forth the basis for requesting such amounts),
for all reasonable losses, expenses and liabilities (including any interest paid
or calculated to be due and payable by such Lender to Lenders of funds borrowed
by it to make or carry its LIBOR Rate Loans and any loss, expense or liability
sustained by such Lender in connection with the liquidation or re employment of
such funds but excluding loss of anticipated profits) which such Lender may
sustain: (i) if for any reason (other than a default by such Lender) a borrowing
of any LIBOR Rate Loan does not occur on a date
43
specified therefor in a Funding Notice or a telephonic request for borrowing, or
a conversion to or continuation of any LIBOR Rate Loan does not occur on a date
specified therefor in a Conversion/Continuation Notice or a telephonic request
for conversion or continuation; (ii) if any prepayment or other principal
payment of, or any conversion of, any of its LIBOR Rate Loans occurs on any day
other than the last day of an Interest Period applicable to that Loan (whether
voluntary, mandatory, automatic, by reason of acceleration, or otherwise); or
(iii) if any prepayment of any of its LIBOR Rate Loans is not made on any date
specified in a notice of prepayment given by Company.
(d) Booking of LIBOR Rate Loans. Any Lender may make, carry or
transfer LIBOR Rate Loans at, to, or for the account of any of its branch
offices or the office of an Affiliate of such Lender.
(e) Assumptions Concerning Funding of LIBOR Rate Loans.
Calculation of all amounts payable to a Lender under this Section 2.17 and under
Section 2.18 shall be made as though such Lender had actually funded each of its
relevant LIBOR Rate Loans through the purchase of a LIBOR deposit bearing
interest at the rate obtained pursuant to clause (i) of the definition of
Adjusted LIBOR Rate in an amount equal to the amount of such LIBOR Rate Loan and
having a maturity comparable to the relevant Interest Period and through the
transfer of such LIBOR deposit from an offshore office of such Lender to a
domestic office of such Lender in the United States of America; provided,
however, each Lender may fund each of its LIBOR Rate Loans in any manner it sees
fit and the foregoing assumptions shall be utilized only for the purposes of
calculating amounts payable under this Section 2.17 and under Section 2.18.
2.18 INCREASED COSTS; CAPITAL ADEQUACY.
(a) Compensation For Increased Costs and Taxes. Subject to the
provisions of Section 2.19 (which shall be controlling with respect to the
matters covered thereby), in the event that any Lender shall determine (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that any law, treaty or governmental rule, regulation
or order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a court or
governmental authority, in each case that becomes effective after the date
hereof, or compliance by such Lender with any guideline, request or directive
issued or made after the date hereof by any central bank or other governmental
or quasi governmental authority (whether or not having the force of law): (i)
subjects such Lender (or its applicable lending office) to any additional Tax
(other than any Tax on the overall net income of such Lender) with respect to
this Agreement or any of the other Credit Documents or any of its obligations
hereunder or thereunder or any payments to such Lender (or its applicable
lending office) of principal, interest, fees or any other amount payable
hereunder; (ii) imposes, modifies or holds applicable any reserve (including any
marginal, emergency, supplemental, special or other reserve), special deposit,
compulsory loan, FDIC insurance or similar requirement against assets held by,
or deposits or other liabilities in or for the account of, or advances or loans
by, or other credit extended by, or any other acquisition of funds by, any
office of such Lender (other
44
than any such reserve or other requirements with respect to LIBOR Rate Loans
that are reflected in the definition of Adjusted LIBOR Rate); or (iii) imposes
any other condition (other than with respect to a Tax matter) on or affecting
such Lender (or its applicable lending office) or its obligations hereunder or
the London interbank market; and the result of any of the foregoing is to
increase the cost to such Lender of agreeing to make, making or maintaining
Loans hereunder or to reduce any amount received or receivable by such Lender
(or its applicable lending office) with respect thereto; then, in any such case,
Company shall promptly pay to such Lender, upon receipt of the statement
referred to in the next sentence, such additional amount or amounts (in the form
of an increased rate of, or a different method of calculating, interest or
otherwise as such Lender in its sole discretion shall determine) as may be
necessary to compensate such Lender for any such increased cost or reduction in
amounts received or receivable hereunder. Such Lender shall deliver to Company
(with a copy to Administrative Agent) a written statement, setting forth in
reasonable detail the basis for calculating the additional amounts owed to such
Lender under this Section 2.18(a), which statement shall be conclusive and
binding upon all parties hereto absent manifest error.
(b) Capital Adequacy Adjustment. In the event that any Lender
shall have determined that the adoption, effectiveness, phase in or
applicability after the Closing Date of any law, rule or regulation (or any
provision thereof) regarding capital adequacy, or any change therein or 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 any Lender (or its applicable lending office) with any
guideline, request or directive regarding capital adequacy (whether or not
having the force of law) of any such Governmental Authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on the capital of such Lender or any corporation controlling such Lender as a
consequence of, or with reference to, such Lender's Loans or Revolving
Commitments, or participations therein or other obligations hereunder with
respect to the Loans to a level below that which such Lender or such controlling
corporation could have achieved but for such adoption, effectiveness, phase in,
applicability, change or compliance (taking into consideration the policies of
such Lender or such controlling corporation with regard to capital adequacy),
then from time to time, within five (5) Business Days after receipt by Company
from such Lender of the statement referred to in the next sentence, Company
shall pay to such Lender such additional amount or amounts as will compensate
such Lender or such controlling corporation on an after-tax basis for such
reduction. Such Lender shall deliver to Company (with a copy to Administrative
Agent) a written statement, setting forth in reasonable detail the basis for
calculating the additional amounts owed to Lender under this Section 2.18(b),
which statement shall be conclusive and binding upon all parties hereto absent
manifest error.
2.19 TAXES; WITHHOLDING, ETC.
(a) Payments to Be Free and Clear. All sums payable by any Credit
Party hereunder and under the other Credit Documents shall (except to the extent
required by law) be paid free and clear of, and without any deduction or
withholding on account of, any Tax imposed, levied, collected, withheld or
assessed by or within the
00
Xxxxxx Xxxxxx xx Xxxxxxx or any political subdivision in or of the United States
of America or any other jurisdiction from or to which a payment is made by or on
behalf of any Credit Party or by any federation or organization of which the
United States of America or any such jurisdiction is a member at the time of
payment.
(b) Withholding of Taxes. If any Credit Party or any other Person
is required by law to make any deduction or withholding on account of any Tax
from any sum paid or payable under any of the Credit Documents: (i) Company
shall notify Administrative Agent of any such requirement or any change in any
such requirement as soon as Company becomes aware of it; (ii) Company shall pay
any such Tax before the date on which penalties attach thereto, such payment to
be made (if the liability to pay is imposed on any Credit Party) for its own
account or (if that liability is imposed on Administrative Agent or such Lender,
as the case may be) on behalf of and in the name of Administrative Agent or such
Lender; (iii) the sum payable by such Credit Party in respect of which the
relevant deduction, withholding or payment, is required shall be increased to
the extent necessary to ensure that, after the making of that deduction,
withholding payment of all Taxes, Administrative Agent or such Lender (including
for these purposes as Issuing Bank, as the case may be, and each of their Tax
Related Persons receives on the due date and contains a net sum equal to what it
would have received and retained had no such deduction, withholding or payment
been required or made; and (iv) within thirty (30) days after making any such
deduction or withholding, and within thirty (30) days after the due date of
payment of any Tax which it is required by clause (ii) above to pay, Company
shall deliver to Administrative Agent evidence satisfactory to the other
affected parties of such deduction, withholding and payment and of the
remittance thereof to the relevant taxing or other authority; provided, no such
additional amount shall be required to be paid to any Lender under clause (iii)
above except to the extent that any change after the date hereof (in the case of
each Lender listed on the signature pages hereof on the Closing Date) or after
the effective date of the Assignment Agreement pursuant to which such Lender
became a Lender (in the case of each other Lender) in any such requirement for a
deduction, withholding or payment as is mentioned therein shall result in an
increase in the rate of such deduction, withholding or payment from that in
effect at the date hereof or at the date of such Assignment Agreement in respect
of payments to such Lender.
(c) Other Taxes. In addition, the Credit Parties shall pay all
Other Taxes to the relevant Governmental Authorities in accordance with
applicable law. The Credit Parties shall deliver to Administrative Agent
official receipts or other evidence of such payment reasonably satisfactory to
Administrative Agent in respect of any Taxes or Other Taxes payable hereunder
promptly after payment of such Taxes or Other Taxes.
(d) The Credit Parties shall indemnify each Agent and each Lender
(including for these purposes an Issuing Bank), within ten days after written
demand therefor, for the full amount of any Taxes paid or incurred by such Agent
or such Lender or their respective Tax Related Persons, as the case may be,
relating to, arising out of, or in connection with any Credit Document or any
payment or transaction contemplated hereby or thereby, whether or not such Taxes
were correctly or legally
46
imposed or asserted by the relevant Governmental Authority; provided, however,
that the Credit Parties shall not be required to indemnify the Agents, Lenders
and Participants for any Taxes that would be excluded from a gross-up under
Section 2.19(b) or to the extent such Taxes are covered by Sections 2.19(b) or
(c). Such indemnification shall be made on an after-Tax basis, such that after
all required deductions and payments of all Taxes (including income Taxes and
deductions applicable to amounts payable under this Section 2.19(d)) and payment
of all reasonable expenses, the Agents, the Lenders and each of their respective
Tax Related Persons receives and retains an amount equal to the sum it would
have received and retained had it not paid or incurred or been subject to such
Taxes. A certificate from the relevant Lender or Agent, setting forth in
reasonable detail the basis and calculation of such Taxes shall be conclusive,
absent manifest error.
(e) Evidence of Exemption From U.S. Withholding Tax. Each Lender
that is not a United States Person (as such term is defined in Section
7701(a)(30) of the Internal Revenue Code) for U.S. federal income Tax purposes
(a "NON-US LENDER") shall deliver to Administrative Agent for transmission to
Company, on or prior to the Closing Date (in the case of each Lender listed on
the signature pages hereof on the Closing Date) or on or prior to the date of
the Assignment Agreement pursuant to which it becomes a Lender (in the case of
each other Lender), and at such other times as may be necessary in the
determination of Company or Administrative Agent (each in the reasonable
exercise of its discretion), (i) two original copies of Internal Revenue Service
Form X-0XXX, X-0XXX or W-8ECI (or any successor forms), properly completed and
duly executed by such Lender, and such other documentation required under the
Internal Revenue Code and reasonably requested by Company to establish that such
Lender is not subject to deduction or withholding of United States federal
income Tax with respect to any payments to such Lender of principal, interest,
fees or other amounts payable under any of the Credit Documents or is subject to
deduction or withholding at a reduced rate, or (ii) if such Lender is not a
"bank" or other Person described in Section 881(c)(3) of the Internal Revenue
Code and cannot deliver Internal Revenue Service Form W-8ECI pursuant to clause
(i) above, a Certificate Regarding Non Bank Status together with two original
copies of Internal Revenue Service Form W-8BEN (or any successor form), properly
completed and duly executed by such Lender, and such other documentation
required under the Internal Revenue Code and reasonably requested by Company to
establish that such Lender is not subject to deduction or withholding of United
States federal income Tax with respect to any payments to such Lender of
interest payable under any of the Credit Documents. Each Lender required to
deliver any forms, certificates or other evidence with respect to United States
federal income Tax withholding matters pursuant to this Section 2.19(c) hereby
agrees, from time to time after the initial delivery by such Lender of such
forms, certificates or other evidence, whenever a lapse in time or change in
circumstances renders such forms, certificates or other evidence obsolete or
inaccurate in any material respect, that such Lender shall promptly deliver to
Administrative Agent for transmission to Company two new original copies of
Internal Revenue Service Form X-0XXX, X-0XXX or W-8ECI, or a Certificate
Regarding Non Bank Status and two original copies of Internal Revenue Service
Form W-8BEN (or any successor form), as the case may be, properly completed and
duly executed by such Lender, and such other documentation required under the
Internal Revenue Code and reasonably requested by Company to confirm or
establish that
47
such Lender is not subject to deduction or withholding of United States federal
income Tax with respect to payments to such Lender under the Credit Documents or
is subject to deduction or withholding at a reduced rate, or notify
Administrative Agent and Company of its inability to deliver any such forms,
certificates or other evidence. Company shall not be required to pay any
additional amount to any Non-US Lender under Section 2.19(b)(iii) if such Lender
shall have failed to deliver the forms, certificates or other evidence referred
to in the second sentence of this Section 2.19(c); that it is legally entitled
to deliver, provided, if such Lender shall have satisfied the requirements of
the first sentence of this Section 2.19(c) on the Closing Date or on the date of
the Assignment Agreement pursuant to which it became a Lender, as applicable,
nothing in this last sentence of Section 2.19(c) shall relieve Company of its
obligation to pay any additional amounts pursuant this Section 2.19 in the event
that, as a result of any change in any applicable law, treaty or governmental
rule, regulation or order, or any change in the interpretation, administration
or application thereof, such Lender is no longer properly entitled to deliver
forms, certificates or other evidence at a subsequent date establishing the fact
that such Lender is not subject to withholding as described herein. Nothing in
this Section 2.19 shall be construed to require a Lender, Agent or Participant
to provide any forms or documentation that it is not legally entitled to
provide.
2.20 OBLIGATION TO MITIGATE. Each Lender agrees that, as promptly as practicable
after the officer of such Lender responsible for administering its Loans becomes
aware of the occurrence of an event or the existence of a condition that would
cause such Lender to become an Affected Lender or that would entitle such Lender
to receive payments under Section 2.17, 2.18 or 2.19, it will, to the extent not
inconsistent with the internal policies of such Lender and any applicable legal
or regulatory restrictions, use reasonable efforts to (a) make, issue, fund or
maintain its Credit Extensions, including any Affected Loans, through another
office of such Lender, or (b) take such other measures as such Lender may deem
reasonable, if as a result thereof the circumstances which would cause such
Lender to be an Affected Lender would cease to exist or the additional amounts
which would otherwise be required to be paid to such Lender pursuant to Section
2.17, 2.18 or 2.19 would be materially reduced and if, as determined by such
Lender in its sole discretion, the making, issuing, funding or maintaining of
such Revolving Commitments or Loans through such other office or in accordance
with such other measures, as the case may be, would not otherwise adversely
affect such Revolving Commitments or Loans or the interests of such Lender;
provided, such Lender will not be obligated to utilize such other office
pursuant to this Section 2.20 unless Company agrees to pay all expenses incurred
by such Lender as a result of utilizing such other office as described above. A
certificate as to the amount of any such expenses payable by Company pursuant to
this Section 2.20 (setting forth in reasonable detail the basis for requesting
such amount) submitted by such Lender to Company (with a copy to Administrative
Agent) shall be conclusive absent manifest error.
2.21 DEFAULTING LENDERS. Anything contained herein to the contrary
notwithstanding, in the event that any Lender, other than at the direction or
request of any regulatory agency or authority, defaults (a "DEFAULTING LENDER")
in its obligation to fund (a "FUNDING DEFAULT") any Revolving Loan (in each
case, a "DEFAULTED LOAN"), then (a) during any Default Period with respect to
such Defaulting Lender, such Defaulting
48
Lender shall be deemed not to be a "Lender" for purposes of voting on any
matters (including the granting of any consents or waivers) with respect to any
of the Credit Documents; (b) to the extent permitted by applicable law, until
such time as the Default Excess with respect to such Defaulting Lender shall
have been reduced to zero, (i) any voluntary prepayment of the Revolving Loans
shall, if Administrative Agent so directs at the time of making such voluntary
prepayment, be applied to the Revolving Loans of other Lenders as if such
Defaulting Lender had no Revolving Loans outstanding and the Revolving Exposure
of such Defaulting Lender were zero, and (ii) any mandatory prepayment of the
Revolving Loans shall, if Administrative Agent so directs at the time of making
such mandatory prepayment, be applied to the Revolving Loans of other Lenders
(but not to the Revolving Loans of such Defaulting Lender) as if such Defaulting
Lender had funded all Defaulted Loans of such Defaulting Lender, it being
understood and agreed that Company shall be entitled to retain any portion of
any mandatory prepayment of the Revolving Loans that is not paid to such
Defaulting Lender solely as a result of the operation of the provisions of this
clause (b); (c) such Defaulting Lender's Revolving Commitment and outstanding
Revolving Loans shall be excluded for purposes of calculating the Revolving
Commitment fee payable to Lenders in respect of any day during any Default
Period with respect to such Defaulting Lender, and such Defaulting Lender shall
not be entitled to receive any Revolving Commitment fee pursuant to Section 2.10
with respect to such Defaulting Lender's Revolving Commitment in respect of any
Default Period with respect to such Defaulting Lender; and (d) the Total
Utilization of Revolving Commitments as at any date of determination shall be
calculated as if such Defaulting Lender had funded all Defaulted Loans of such
Defaulting Lender. No Revolving Commitment of any Lender shall be increased or
otherwise affected, and, except as otherwise expressly provided in this Section
2.21, performance by Company of its obligations hereunder and the other Credit
Documents shall not be excused or otherwise modified as a result of any Funding
Default or the operation of this Section 2.21. The rights and remedies against a
Defaulting Lender under this Section 2.21 are in addition to other rights and
remedies which Company may have against such Defaulting Lender with respect to
any Funding Default and which Administrative Agent or any Lender may have
against such Defaulting Lender with respect to any Funding Default.
2.22 REMOVAL OR REPLACEMENT OF A LENDER. Anything contained herein to the
contrary notwithstanding, in the event that: (a) (i) any Lender (an "INCREASED
COST LENDER") shall give notice to Company that such Lender is an Affected
Lender or that such Lender is entitled to receive payments under Section 2.18,
2.19 or 2.20, (ii) the circumstances which have caused such Lender to be an
Affected Lender or which entitle such Lender to receive such payments shall
remain in effect, and (iii) such Lender shall fail to withdraw such notice
within five (5) Business Days after Company's request for such withdrawal; or
(b) (i) any Lender shall become a Defaulting Lender, (ii) the Default Period for
such Defaulting Lender shall remain in effect, and (iii) such Defaulting Lender
shall fail to cure the default as a result of which it has become a Defaulting
Lender within five (5) Business Days after Company's request that it cure such
default; or (c) in connection with any proposed amendment, modification,
termination, waiver or consent with respect to any of the provisions hereof as
contemplated by Section 10.5(b), the consent of Administrative Agent and
Requisite Lenders shall have been obtained but the consent of one or more of
such other Lenders (each a "NON-CONSENTING LENDER") whose
49
consent is required shall not have been obtained; then, with respect to each
such Increased Cost Lender, Defaulting Lender or Non-Consenting Lender (the
"TERMINATED LENDER"), Administrative Agent may (which, in the case of an
Increased Cost Lender, only after receiving written request from Company to
remove such Increased Cost Lender), by giving written notice to Company and any
Terminated Lender of its election to do so, elect to cause such Terminated
Lender (and such Terminated Lender hereby irrevocably agrees) to assign its
outstanding Loans and its Revolving Commitments, if any, in full to one or more
Eligible Assignees (each a "REPLACEMENT LENDER") in accordance with the
provisions of Section 10.6 and Terminated Lender shall pay any fees payable
thereunder in connection with such assignment; provided, (1) on the date of such
assignment, the Replacement Lender shall pay to Terminated Lender an amount
equal to the sum of (A) an amount equal to the principal of, and all accrued
interest on, all outstanding Loans of the Terminated Lender, (B) an amount equal
to all unreimbursed drawings that have been funded by such Terminated Lender,
together with all then unpaid interest with respect thereto at such time and (C)
an amount equal to all accrued, but theretofore unpaid fees owing to such
Terminated Lender pursuant to Section 2.10; (2) on the date of such assignment,
Company shall pay any amounts payable to such Terminated Lender pursuant to
Section 2.18 or 2.19; and (3) in the event such Terminated Lender is a
Non-Consenting Lender, each Replacement Lender shall consent, at the time of
such assignment, to each matter in respect of which such Terminated Lender was a
Non-Consenting Lender. Upon the prepayment of all amounts owing to any
Terminated Lender and the termination of such Terminated Lender's Revolving
Commitments, if any, such Terminated Lender shall no longer constitute a
"Lender" for purposes hereof; provided, any rights of such Terminated Lender to
indemnification hereunder shall survive as to such Terminated Lender.
SECTION 3. CONDITIONS PRECEDENT
3.1 CLOSING DATE. The obligation of each Lender to make a Credit Extension on
the Closing Date is subject to the satisfaction, or waiver in accordance with
Section 10.5, of the following conditions on or before the Closing Date:
(a) Credit Documents. Administrative Agent shall have received
sufficient copies of each Credit Document originally executed and delivered by
each applicable Credit Party for each Lender.
(b) Organizational Documents; Incumbency. Administrative Agent
shall have received (i) sufficient copies of each Organizational Document
executed and delivered by each Credit Party, as applicable, and, to the extent
applicable, certified as of a recent date by the appropriate governmental
official, for each Lender, each dated the Closing Date or a recent date prior
thereto; (ii) signature and incumbency certificates of the officers of such
Person executing the Credit Documents to which it is a party; (iii) resolutions
of the Board of Directors or similar governing body of each Credit Party
approving and authorizing the execution, delivery and performance of this
Agreement and the other Credit Documents to which it is a party or by which it
or its assets may be bound as of the Closing Date, certified as of the Closing
Date by its secretary or an assistant secretary as being in full force and
effect without modification or amendment;
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(iv) a good standing certificate from the applicable Governmental Authority of
each Credit Party's jurisdiction of incorporation, organization or formation and
in each jurisdiction in which it is qualified as a foreign corporation or other
entity to do business, each dated a recent date prior to the Closing Date; and
(v) such other documents as Administrative Agent may reasonably request.
(c) Organizational and Capital Structure. The organizational
structure and capital structure of Company and its Subsidiaries shall be as set
forth on Schedule 4.1.
(d) Existing Indebtedness; etc. On the Closing Date, Company and
its Subsidiaries shall have (i) repaid in full all Existing Indebtedness, (ii)
terminated any commitments to lend or make other extensions of credit
thereunder, (iii) delivered to Administrative Agent all documents or instruments
necessary to release all Liens securing Existing Indebtedness or other
obligations of Company and its Subsidiaries thereunder being repaid on the
Closing Date, and (iv) made arrangements satisfactory to Administrative Agent
with respect to the cancellation of any letters of credit outstanding
thereunder.
(e) Transaction Costs. On or prior to the Closing Date, Company
shall have delivered to Administrative Agent Company's reasonable best estimate
of the Transactions Costs (other than fees payable to any Agent).
(f) Governmental Authorizations and Consents. Each Credit Party
shall have obtained all Governmental Authorizations and all consents of other
Persons, in each case that are necessary or advisable in connection with the
transactions contemplated by the Credit Documents and each of the foregoing
shall be in full force and effect and in form and substance reasonably
satisfactory to Administrative Agent. All applicable waiting periods shall have
expired without any action being taken or threatened by any competent authority
which would restrain, prevent or otherwise impose adverse conditions on the
transactions contemplated by the Credit Documents and no action, request for
stay, petition for review or rehearing, reconsideration, or appeal with respect
to any of the foregoing shall be pending, and the time for any applicable agency
to take action to set aside its consent on its own motion shall have expired.
(g) Atlantic Documents. Company shall have delivered to
Administrative Agent copies of (i) the Atlantic Existing Credit Facility, (ii)
the Atlantic Term Loan Agreement, (iii) the Atlantic Fund Guaranty, (iv) the
Atlantic Collateral Release, (v) the Atlantic Side Letter and (vi) the
Subordination Agreement, each of which shall have been duly executed and
delivered by each of the parties thereto and in full force and effect:
(h) Personal Property Collateral. In order to create in favor of
Collateral Agent, for the benefit of Secured Parties, a valid, perfected First
Priority security interest in the personal property Collateral, Collateral Agent
shall have received:
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(i) evidence satisfactory to Collateral Agent of the compliance
by each Credit Party of their obligations under the Pledge and Security
Agreement and the other Collateral Documents (including, without
limitation, their obligations to authorize the filing of UCC financing
statements and to execute and/or deliver originals of securities,
instruments and chattel paper (together with any required instruments of
transfer) and any agreements granting "control" deposit and/or securities
accounts as provided therein);
(ii) A completed Collateral Questionnaire dated the Closing Date
and executed by an Authorized Officer of each Credit Party party to the
Pledge and Security Agreement, together with all attachments contemplated
thereby, including (A) the results of a recent search, by a Person
satisfactory to Collateral Agent, of all effective UCC financing statements
(or equivalent filings) made with respect to any personal or mixed property
of any Credit Party in the jurisdictions specified in the Collateral
Questionnaire, together with copies of all such filings disclosed by such
search, and (B) UCC termination statements (or similar documents) duly
executed by all applicable Persons for filing in all applicable
jurisdictions as may be necessary to terminate any effective UCC financing
statements (or equivalent filings) disclosed in such search (other than any
such financing statements in respect of Permitted Liens);
(iii) opinions of counsel (which counsel shall be reasonably
satisfactory to Collateral Agent) with respect to the creation and
perfection of the security interests in Collateral in favor of Collateral
Agent in such Collateral and such other matters governed by the laws of
each jurisdiction in which any filings are required to perfect the security
interests in the Collateral in favor of Collateral Agent as Collateral
Agent may reasonably request, in each case in form and substance reasonably
satisfactory to Collateral Agent; and
(iv) evidence that each Credit Party shall have taken or caused
to be taken any other action, executed and delivered or caused to be
executed and delivered any other agreement, document and instrument
(including without limitation, a Landlord Personal Property Collateral
Access Agreement executed by the landlord of any Leasehold Property and by
the applicable Credit Party) and made or caused to be made any other filing
and recording (other than as set forth herein) reasonably required by
Collateral Agent.
(i) Escrow Agreement. The Escrow Agreement shall have been duly
executed and delivered by each of the parties thereto, and shall be in full
force and effect.
(j) Financial Statements; Projections. Lenders shall have
received from Company (i) the Historical Financial Statements, (ii) pro forma
consolidated balance sheets of Company and its Subsidiaries as at the Closing
Date, the related financings and the other transactions contemplated by the
Credit Documents to occur on or prior to the Closing Date, which pro forma
financial statements shall be in form and substance satisfactory to
Administrative Agent, and (iii) the Projections.
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(k) Evidence of Insurance. Collateral Agent shall have received a
certificate from Company's insurance broker or other evidence satisfactory to it
that all insurance required to be maintained pursuant to Section 5.5 is in full
force and effect, together with endorsements naming the Collateral Agent, for
the benefit of Secured Parties, as additional insured and loss payee thereunder
to the extent required under Section 5.5.
(l) Opinions of Counsel to Credit Parties. Lenders and their
respective counsel shall have received originally executed copies of the
favorable written opinions of (i) BRL Law Group LLC and Sichenzia Xxxx Xxxxxxxx
Xxxxxxx LLP, each counsel for Credit Parties, in the forms of Exhibit D-1 and
Exhibit D-2, respectively, (ii) Xxxxxx Xxxxxx LLP, counsel for Atlantic, in the
form of Exhibit D-3, and (iii) Xxxxxx Westwood and Riegels, counsel for Atlantic
Related Entity, in form and substance satisfactory to Administrative Agent, and,
in each case, as to such other matters as Administrative Agent may reasonably
request, each dated as of the Closing Date and each otherwise in form and
substance reasonably satisfactory to Administrative Agent (and each Credit Party
hereby instructs such counsel to deliver such opinions to Agents and Lenders).
(m) Fees. Company shall have paid to Administrative Agent the
fees payable on the Closing Date referred to in Section 2.10(c).
(n) Intercompany Note. On or prior to the Closing Date, Company
and each of its Domestic' Subsidiaries shall have received an intercompany note
in form substance satisfactory to Administrative Agent executed and delivered by
Company and each of its Domestic Subsidiaries (the "INTERCOMPANY NOTE"), and the
original of the Intercompany Note, duly endorsed by each of the parties thereto,
shall have been delivered to the Collateral Agent as under the terms of the
Pledge and Security Agreement.
(o) Closing Date Certificate. Company and its Subsidiaries shall
have delivered to Administrative Agent an originally executed Closing Date
Certificate, together with all attachments thereto.
(p) Closing Date Loans. Lenders shall have made the Term Loan to
Company on the Closing Date and no Credit Extension constituting a Revolving
Loan shall have been made on the Closing Date.
(q) No Litigation. Except as described on Schedule 4.11, there
shall not exist any action, suit, investigation, litigation or proceeding or
other legal or regulatory developments, pending or threatened in any court or
before any arbitrator or Governmental Authority that, in the reasonable opinion
of Administrative Agent, singly or in the aggregate, materially impairs the
Refinancing or any of the other transactions contemplated by the Credit
Documents, or that could have a Material Adverse Effect.
(r) Due Diligence. Other than changes occurring in the ordinary
course of business, no information or materials are or should have been
available to
53
Company and its Subsidiaries as of the Closing Date that are materially
inconsistent with the material previously provided to Administrative Agent for
its due diligence review of Company and its Subsidiaries. The results of
Administrative Agent's and each Lender's business, legal, and collateral due
diligence review are satisfactory to Administrative Agent and each Lender, each
in its sole discretion.
(s) Minimum EBITDA. The financial statements delivered pursuant
to Section 3.1(j) shall demonstrate in form and substance reasonably
satisfactory to Administrative Agent that on the Closing Date and immediately
after giving effect to any Credit Extensions to be made on the Closing Date,
including the payment of all Transaction Costs required to be paid in Cash,
Company shall have generated trailing twelve month Consolidated Adjusted EBITDA
of at least $12,400,000.
(t) Net Working Capital. The pro forma balance sheet delivered
pursuant to Section 3.1(j) shall demonstrate in form and substance reasonably
satisfactory to Administrative Agent that on the Closing Date and immediately
after giving effect to any Credit Extensions to be made on the Closing Date,
including the payment of all Transaction Costs required to be paid in Cash, the
Net Working Capital of Company and its Subsidiaries is equal to or greater than
$(16,900,000).
(u) Maximum Leverage Ratio. The pro forma balance sheet delivered
pursuant to Section 3.1(j) shall demonstrate in form and substance reasonably
satisfactory to Administrative Agent that on the Closing Date and immediately
after giving effect to any Credit Extensions to be made on the Closing Date,
including the payment of all Transaction Costs required to be paid in Cash, the
ratio of (i) total Indebtedness for Company and its Subsidiaries as of the
Closing Date to (ii) pro forma Consolidated Adjusted EBITDA for the twelve-month
period ending March 31, 2006 shall not be greater than 5.80:1.00.
(v) Minimum Liquidity. Company shall have (and shall have
demonstrated to Administrative Agent's satisfaction that it has), after giving
effect to the making of the Term Loans, the repayment of all Existing
Indebtedness, and the payment of, or provision for, all Transaction Costs, at
least $800,000 of available, unencumbered cash on hand (which shall not include
amounts subject to the Escrow Agreement).
(w) No Material Adverse Change. Since July 31, 2005, no event,
circumstance or change shall have occurred that has caused or evidences, either
in any case or in the aggregate, a Material Adverse Effect.
(x) Completion of Proceedings. All partnership, corporate and
other proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by Administrative Agent and its counsel shall be satisfactory in form
and substance to Administrative Agent and such counsel, and Administrative
Agent, and such counsel shall have received all such counterpart originals or
certified copies of such documents as Administrative Agent may reasonably
request.
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(y) Service of Process. On the Closing Date, Administrative Agent
shall have received evidence that each Credit Party has appointed an agent in
New York City for the purpose of service of process in New York City and such
agent shall agree in writing to give Administrative Agent notice of any
resignation of such service agent or other termination of the agency
relationship.
(z) Warrants. Company shall have authorized the issuance to
Silver Point of warrants for the purchase of an aggregate of 3,514,933 shares of
common stock of Company (the "WARRANT SHARES"), subject to adjustment as set
forth in the Warrants. Such Warrants shall be substantially in the form set
forth as Exhibit A attached to the Warrant Agreement and are referred to
individually as a "WARRANT" and collectively as the "WARRANTS," which terms
shall also include any warrants delivered in exchange or replacement therefor.
Each Lender, by delivering its signature page to this Agreement and funding a
Loan on the Closing Date, shall be deemed to have acknowledged receipt of, and
consented to and approved, each Credit Document and each other document required
to be approved by any Agent, Requisite Lenders or Lenders, as applicable on the
Closing Date.
3.2 CONDITIONS TO EACH CREDIT EXTENSION.
(a) Conditions Precedent. The obligation of each Lender to make
any Loan on any Credit Date, including the Closing Date, are subject to the
satisfaction, or waiver in accordance with Section 10.5, of the following
conditions precedent:
(i) Administrative Agent shall have received a fully executed and
delivered Funding Notice;
(ii) after making the Credit Extensions requested on such Credit
Date, the Total Utilization of Revolving Commitments shall not exceed the
Revolving Commitments then in effect;
(iii) as of such Credit Date, the representations and warranties
contained herein and in the other Credit Documents shall be true and
correct in all material respects on and as of that Credit Date to the same
extent as though made on and as of that date, except to the extent such
representations and warranties specifically relate to an earlier date, in
which case such representations and warranties shall have been true and
correct in all material respects on and as of such earlier date; and
(iv) as of such Credit Date, no event shall have occurred and be
continuing or would result from the consummation of the applicable Credit
Extension that would constitute an Event of Default or a Default.
Any Agent shall be entitled, but not obligated to, request and receive, prior to
the making of any Credit Extension, additional information reasonably
satisfactory to the requesting
55
party confirming the satisfaction of any of the foregoing if, in the good faith
judgment of such Agent such request is warranted under the circumstances.
Each Lender, by delivering its signature page to this Agreement and funding a
Loan on the Closing Date, shall be deemed to have acknowledged receipt of, and
consented to and approved, each Credit Document and each other document required
to be approved by any Agent, Requisite Lenders or Lenders, as applicable on the
Closing Date.
(b) Notices. Any Notice shall be executed by an Authorized
Officer in a writing delivered to Administrative Agent. In lieu of delivering a
Notice, Company may give Administrative Agent telephonic notice by the required
time of any proposed borrowing or conversion/continuation, provided each such
notice shall be promptly confirmed in writing by delivery of the applicable
Notice to Administrative Agent on or before the applicable date of borrowing or
conversion/continuation. Neither Administrative Agent nor any Lender shall incur
any liability to Company in acting upon any telephonic notice referred to above
that Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized on behalf of Company or for
otherwise acting in good faith.
SECTION 4. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make each
Credit Extension to be made thereby, each Credit Party represents and warrants
to each Lender, on the Closing Date and on each Credit Date, that the following
statements are true and correct (it being understood and agreed that the
representations and warranties made on the Closing Date are deemed to be made
concurrently with the consummation of the Refinancing):
4.1 ORGANIZATION; REQUISITE POWER AND AUTHORITY; QUALIFICATION. Each of Company
and its Subsidiaries (a) is duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization as identified in
Schedule 4.1, (b) has all requisite power and authority to own and operate its
properties, to carry on its business as now conducted and as proposed to be
conducted, to enter into the Credit Documents to which it is a party and to
carry out the transactions contemplated thereby, and (c) is qualified to do
business and in good standing in every jurisdiction where its assets are located
and wherever necessary to carry out its business and operations, except in
jurisdictions where the failure to be so qualified or in good standing has not
had, and could not be reasonably expected to have, a Material Adverse Effect.
4.2 CAPITAL STOCK AND OWNERSHIP. The Capital Stock of each of Company and its
Subsidiaries has been duly authorized and validly issued and is fully paid and
non assessable. Except as set forth on Schedule 4.2, as of the date hereof,
there is no existing option, warrant, call, right, commitment or other agreement
to which Company or any of its Subsidiaries is a party requiring, and there is
no membership interest or other Capital Stock of Company or any of its
Subsidiaries outstanding which upon conversion or exchange would require, the
issuance by Company or any of its Subsidiaries of any additional membership
interests or other Capital Stock of Company or any of its
56
Subsidiaries or other Securities convertible into, exchangeable for or
evidencing the right to subscribe for or purchase, a membership interest or
other Capital Stock of Company or any of its Subsidiaries. Schedule 4.2
correctly sets forth the ownership interest of Company and each of its
Subsidiaries in their respective Subsidiaries as of the Closing Date.
4.3 DUE AUTHORIZATION. The execution, delivery and performance of the Credit
Documents have been duly authorized by all necessary action on the part of each
Credit Party that is a party thereto.
4.4 NO CONFLICT. The execution, delivery and performance by Credit Parties of
the Credit Documents to which they are parties and the consummation of the
transactions contemplated by the Credit Documents do not and will not (a)
violate any provision of any law or any governmental rule or regulation
applicable to Company or any of its Subsidiaries, any of the Organizational
Documents of Company or any of its Subsidiaries, or any order, judgment or
decree of any court or other agency of government binding on Company or any of
its Subsidiaries; (b) conflict with, result in a breach of or constitute (with
due notice or lapse of time or both) a default under any Contractual Obligation
of Company or any of its Subsidiaries; (c) result in or require the creation or
imposition of any Lien upon any of the properties or assets of Company or any of
its Subsidiaries (other than any Liens created under any of the Credit Documents
in favor of Collateral Agent, on behalf of Secured Parties); or (d) require any
approval of stockholders, members or partners or any approval or consent of any
Person under any Contractual Obligation of Company or any of its Subsidiaries,
except for such approvals or consents which will be obtained on or before the
Closing Date and disclosed in writing to Lenders.
4.5 GOVERNMENTAL CONSENTS. The execution, delivery and performance by Credit
Parties of the Credit Documents to which they are parties and the consummation
of the transactions contemplated by the Credit Documents do not and will not
require any registration with, consent or approval of, or notice to, or other
action to, with or by, any Governmental Authority, except for filings and
recordings with respect to the Collateral to be made, or otherwise delivered to
Collateral Agent for filing and/or recordation, as of the Closing Date.
4.6 BINDING OBLIGATION. Each Credit Document has been duly executed and
delivered by each Credit Party that is a party thereto and is the legally valid
and binding obligation of such Credit Party, enforceable against such Credit
Party in accordance with its respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors' rights generally or by equitable principles relating to
enforceability.
4.7 HISTORICAL FINANCIAL STATEMENTS. The Historical Financial Statements were
prepared in conformity with GAAP and fairly present, in all material respects,
the financial position, on a consolidated basis, of the Persons described in
such financial statements as at the respective dates thereof and the results of
operations and cash flows, on a consolidated basis, of the entities described
therein for each of the periods then
57
ended, subject, in the case of any such unaudited financial statements, to
changes resulting from audit and normal year end adjustments. As of the Closing
Date, neither Company nor any of its Subsidiaries has any contingent liability
or liability for Taxes, long term lease or unusual forward or long term
commitment that is not reflected in the Historical Financial Statements or the
notes thereto and which in any such case is material in relation to the
business, operations, properties, assets, condition (financial or otherwise) or
prospects of Company and any of its Subsidiaries taken as a whole.
4.8 PROJECTIONS. On and as of the Closing Date, the Projections of Company and
its Subsidiaries provided by Company to Administrative Agent on or about March
1, 2006 for the period of Fiscal Year ending on July 31, 2006 through and
including Fiscal Year ending on July 31, 2010, including monthly projections for
each month during the Fiscal Year in which the Closing Date takes place, (the
"PROJECTIONS") are based on good faith estimates and assumptions made by the
management of Company; provided, the Projections are not to be viewed as facts
and that actual results during the period or periods covered by the Projections
may differ from such Projections in immaterial and material respects; provided
further, as of the Closing Date, management of Company believed that the
Projections were reasonable and attainable.
4.9 NO MATERIAL ADVERSE CHANGE. Since July 31, 2005, no event, circumstance or
change has occurred that has caused or evidences, either in any case or in the
aggregate, a Material Adverse Effect.
4.10 NO RESTRICTED JUNIOR PAYMENTS. Since July 31, 2005, neither Company nor any
of its Subsidiaries has directly or indirectly declared, ordered, paid or made,
or set apart any sum or property for, any Restricted Junior Payment or agreed to
do so except as permitted pursuant to Section 6.5.
4.11 ADVERSE PROCEEDINGS, ETC. Except as described on Schedule 4.11, there are
no Adverse Proceedings, individually or in the aggregate, that could reasonably
be expected to have a Material Adverse Effect. Neither Company nor any of its
Subsidiaries (a) is in violation of any applicable laws (including Environmental
Laws) that, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect, or (b) is subject to or in default with respect
to any final judgments, writs, injunctions, decrees, rules or regulations of any
court or any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
4.12 PAYMENT OF TAXES. Except as otherwise permitted under Section 5.3, all tax
returns and reports of Company and its Subsidiaries required to be filed by any
of them have been timely filed, and all Taxes shown on such tax returns to be
due and payable and all assessments, fees and other governmental charges upon
Company and its Subsidiaries and upon their respective properties, assets,
income, businesses and franchises which are due and payable have been paid when
due and payable. Company knows of no proposed tax assessment against Company or
any of its Subsidiaries which is not being actively contested by Company or such
Subsidiary in good faith and by
58
appropriate proceedings; provided, such reserves or other appropriate
provisions, if any, as shall be required in conformity with GAAP shall have been
made or provided therefor.
4.13 PROPERTIES.
(a) Title. Each of Company and its Subsidiaries has (i) good,
sufficient and legal title to (in the case of fee interests in real property),
(ii) valid leasehold interests in (in the case of leasehold interests in real or
personal property), and (iii) good title to (in the case of all other personal
property), all of their respective properties and assets reflected in their
respective Historical Financial Statements referred to in Section 4.5 and in the
most recent financial statements delivered pursuant to Section 5.1, in each case
except for assets disposed of since the date of such financial statements in the
ordinary course of business or as otherwise permitted under Section 6.9. Except
as permitted by this Agreement, all such properties and assets are free and
clear of Liens.
(b) Real Estate. As of the Closing Date, Schedule 4.13(b)
contains a true, accurate and complete list of (i) all Real Estate Assets, and
(ii) all leases, subleases or assignments of leases (together with all
amendments, modifications, supplements, renewals or extensions of any thereof)
affecting each Real Estate Asset of any Credit Party, regardless of whether such
Credit Party is the landlord or tenant (whether directly or as an assignee or
successor in interest) under such lease, sublease or assignment. Each agreement
listed in clause (ii) of the immediately preceding sentence is in full force and
effect and Company does not have knowledge of any default that has occurred and
is continuing thereunder, and each such agreement constitutes the legally valid
and binding obligation of each applicable Credit Party, enforceable against such
Credit Party in accordance with its terms, except as enforcement may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws relating
to or limiting creditors' rights generally or by equitable principles. As of the
Closing Date, no Credit Party has received any notice of non-payment of rent or
other amounts owed from its landlord of its leased premises located at 000
Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx.
4.14 ENVIRONMENTAL MATTERS. Neither Company nor any of its Subsidiaries nor any
of their respective Facilities or operations are subject to any outstanding
written order, consent decree or settlement agreement with any Person relating
to any Environmental Law, any Environmental Claim, or any Hazardous Materials
Activity that, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect. Neither Company nor any of its Subsidiaries has
received any letter or request for information under Section 104 of the
Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C.
Section 9604) or any comparable state law. There are and, to each of Company's
and its Subsidiaries' knowledge, have been, no conditions, occurrences, or
Hazardous Materials Activities which could reasonably be expected to form the
basis of an Environmental Claim against Company or any of its Subsidiaries that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. Neither Company nor any of its Subsidiaries nor, to any
Credit Party's knowledge, any predecessor of Company or any of its Subsidiaries
has filed any notice under any Environmental Law indicating past or present
treatment of Hazardous Materials at any Facility, and none of Company's or any
of its Subsidiaries' operations
59
involves the generation, transportation, treatment, storage or disposal of
hazardous waste, as defined under 40 C.F.R. Parts 260 270 or any state
equivalent. Compliance with all current or reasonably foreseeable future
requirements pursuant to or under Environmental Laws could not be reasonably
expected to have, individually or in the aggregate, a Material Adverse Effect.
No event or condition has occurred or is occurring with respect to Company or
any of its Subsidiaries relating to any Environmental Law, any Release of
Hazardous Materials, or any Hazardous Materials Activity which individually or
in the aggregate has had, or could reasonably be expected to have, a Material
Adverse Effect.
4.15 NO DEFAULTS. Neither Company nor any of its Subsidiaries is in default in
the performance, observance or fulfillment of any of the obligations, covenants
or conditions contained in any of its Contractual Obligations, and no condition
exists which, with the giving of notice or the lapse of time or both, could
constitute such a default, except where the consequences, direct or indirect, of
such default or defaults, if any, could not reasonably be expected to have a
Material Adverse Effect.
4.16 MATERIAL CONTRACTS. Schedule 4.16 contains a true, correct and complete
list of all the Material Contracts in effect on the Closing Date, which,
together with any updates provided pursuant to Section 5.1(l), all such Material
Contracts are in full force and effect and no defaults currently exist
thereunder (other than as described in Schedule 4.16 or in such updates).
4.17 GOVERNMENTAL REGULATION. Neither Company nor any of its Subsidiaries is
subject to regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of the Obligations
unenforceable. Neither Company nor any of its Subsidiaries is a "registered
investment company" or a company "controlled" by a "registered investment
company" or a "principal underwriter" of a "registered investment company" as
such terms are defined in the Investment Company Act of 1940.
4.18 MARGIN STOCK. Neither Company nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock. No part of
the proceeds of the Loans made to such Credit Party will be used to purchase or
carry any such Margin Stock or to extend credit to others for the purpose of
purchasing or carrying any such Margin Stock or for any purpose that violates,
or is inconsistent with, the provisions of Regulation T, U or X of the Board of
Governors of the Federal Reserve System.
4.19 EMPLOYEE MATTERS. Company and each of its Subsidiaries has good
labor-relations. Company, its Subsidiaries, and their respective employees,
agents and representatives have not committed any material unfair labor practice
as defined in the National Labor Relations Act. Neither Company nor any of its
Subsidiaries has been or is engaged in any unfair labor practice that could
reasonably be expected to have a Material Adverse Effect. There has been and is
(a) no unfair labor practice charge or complaint pending against Company or any
of its Subsidiaries, or to the best knowledge
60
of Company and its Subsidiaries, threatened against any of them before the
National Labor Relations Board or any other Governmental Authority and no
grievance or arbitration proceeding arising out of or under any collective
bargaining agreement or similar agreement that is so pending against Company or
any of its Subsidiaries or to the best knowledge of Company and its
Subsidiaries, threatened against any of them, (b) no labor dispute, strike,
lockout, slowdown or work stoppage in existence or threatened against, involving
or affecting Company or any of its Subsidiaries that could reasonably be
expected to have a Material Adverse Effect, (c) no labor union, labor
organization, trade union, works council, or group of employees of Company or
any of its Subsidiaries has made a pending demand for recognition or
certification, and there are no representation or certification proceedings or
petitions seeking a representation proceeding presently pending or threatened to
be brought or filed with the National Labor Relations Board or any other
Governmental Authority, and (d) to the best knowledge of Company and its
Subsidiaries, no union representation question existing with respect to any of
the employees of Company or any of its Subsidiaries and, to the best knowledge
of Company and its Subsidiaries, no labor union organizing activity with respect
to any employees of Company or any of its Subsidiaries that is taking place,
except (with respect to any matter specified in clause (a), (b), (c) or (d)
above, either individually or in the aggregate) such as is not reasonably likely
to have a Material Adverse Effect.
4.20 EMPLOYEE BENEFIT PLANS. Company, each of its Subsidiaries and each of their
respective ERISA Affiliates are in compliance with all applicable provisions and
requirements of ERISA and the Internal Revenue Code and the regulations and
published interpretations thereunder with respect to each Employee Benefit Plan,
and have performed all their obligations under each Employee Benefit Plan. Each
Employee Benefit Plan which is intended to qualify under Section 401(a) of the
Internal Revenue Code has received a favorable determination letter from the
Internal Revenue Service indicating that such Employee Benefit Plan is so
qualified and nothing has occurred subsequent to the issuance of such
determination letter which would cause such Employee Benefit Plan to lose its
qualified status. No liability to the PBGC (other than required premium
payments) or the Internal Revenue Service has been or is expected to be incurred
by Company, any of its Subsidiaries or any of their ERISA with respect to any
Employee Benefit Plan. No ERISA Event has occurred or is reasonably expected to
occur. Except to the extent required under Section 4980B of the Internal Revenue
Code or similar state laws, or otherwise funded entirely by the participants
thereof, no Employee Benefit Plan provides health or welfare benefits (through
the purchase of insurance or otherwise) for any retired or former employee of
Company, any of its Subsidiaries or any of their respective ERISA Affiliates.
The present value of the aggregate benefit liabilities under each Pension Plan
sponsored, maintained or contributed to by Company, any of its Subsidiaries or
any of their ERISA Affiliates (determined as of the end of the most recent plan
year on the basis of the actuarial assumptions specified for funding purposes in
the most recent actuarial valuation for such Pension Plan), did not exceed the
aggregate current value of the assets of such Pension Plan. As of the most
recent valuation date for each Multiemployer Plan for which the actuarial report
is available, the potential liability of Company, its Subsidiaries and their
respective ERISA Affiliates for a complete or partial withdrawal from such
Multiemployer Plan (within the meaning of Section 4203 or Section 4205 of
ERISA),
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when aggregated with such potential liability for a complete or partial
withdrawal from all Multiemployer Plans is zero. Company, each of its
Subsidiaries and each of their ERISA Affiliates have complied with the
requirements of Section 515 of ERISA with respect to each Multiemployer Plan and
are not in material "default" (as defined in Section 4219(c)(5) of ERISA) with
respect to payments to a Multiemployer Plan.
4.21 CERTAIN FEES. No broker's or finder's fee or commission will be payable
with respect hereto or any of the transactions contemplated hereby.
4.22 SILICON VALLEY BANK FACILITY. Schedule 4.22 sets forth, as of the Closing
Date, (i) the approximate respective values of accounts receivable pledged by
the Credit Parties to Silicon Valley Bank under the account receivables
financing facility described in clause (ii) of the definition of Existing
Indebtedness (the "SVB FACILITY") and (ii) each such Credit Parties'
attributable amount of indebtedness under such facility as of the Closing Date,
based on such Credit Parties' accounts receivable so pledged (for each such
Credit Party, its "SVB PAYOFF ALLOCATION AMOUNT"). On the Closing Date, Company
has made, from the proceeds of the Term Loan, an intercompany loan evidenced by
the Intercompany Note to each of its Subsidiaries party to SVB Facility to fund
each such Subsidiary's SVB Payoff Allocation Amount, and each such Subsidiary
has applied its SVB Payoff Allocation Amount to the repayment of the SVB
Facility on the Closing Date.
4.23 [RESERVED.]
4.24 COMPLIANCE WITH STATUTES, ETC. Each of Company and its Subsidiaries is in
compliance with all applicable statutes, regulations and orders of, and all
applicable restrictions imposed by, all Governmental Authorities, in respect of
the conduct of its business and the ownership of its property (including
compliance with all applicable Environmental Laws with respect to any Real
Estate Asset or governing its business and the requirements of any permits
issued under such Environmental Laws with respect to any such Real Estate Asset
or the operations of Company or any of its Subsidiaries), except such
non-compliance that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
4.25 DISCLOSURE. No representation or warranty of any Credit Party contained in
any Credit Document or in any other documents, certificates or written
statements furnished to Lenders by or on behalf of Company or any of its
Subsidiaries for use in connection with the transactions contemplated hereby
contains any untrue statement of a material fact or omits to state a material
fact (known to Company or any Subsidiary, in the case of any document not
furnished by either of them) necessary in order to make the statements contained
herein or therein not misleading in light of the circumstances in which the same
were made. Any projections and pro forma financial information contained in such
materials are based upon good faith estimates and assumptions believed by
Company or any Subsidiary to be reasonable at the time made, it being recognized
by Lenders that such projections as to future events are not to be viewed as
facts and that actual results during the period or periods covered by any such
projections may differ from the projected results. There are no facts known (or
which should upon the reasonable
62
exercise of diligence be known) to Company or any Subsidiary (other than matters
of a general economic nature) that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect and that have not
been disclosed herein or in such other documents, certificates and statements
furnished to Lenders for use in connection with the transactions contemplated
hereby.
4.26 PATRIOT ACT. To the extent applicable, each Credit Party is in compliance,
in all material respects, with the (i) Trading with the Enemy Act, as amended,
and each of the foreign assets control regulations of the Untied States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling
legislation or executive order relating thereto, and (ii) Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism (USA Patriot Act of 2001) (the "ACT"). No part of the
proceeds of the Loans will be used, directly or indirectly, for any payments to
any governmental official or employee, political party, official of a political
party, candidate for political office, or anyone else acting in an official
capacity, in order to obtain, retain or direct business or obtain any improper
advantage, in violation of the United States Foreign Corrupt Practices Act of
1977, as amended.
SECTION 5. AFFIRMATIVE COVENANTS
Company and each Guarantor covenants and agrees that so long as any
Commitment is in effect and until payment in full of all Obligations, it shall
perform, and shall cause each of its Subsidiaries to perform, all covenants in
this Section 5.
5.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
Unless otherwise provided below, Company will deliver to Administrative
Agent and Lenders:
(a) Monthly Reports. As soon as available, and in any event
within thirty (30) days after the end of each month (including months which
began prior to the Closing Date), the consolidated balance sheet of Company and
its Subsidiaries as at the end of such month and the related consolidated
statements of income, stockholders' equity and cash flows of Company and its
Subsidiaries for such month and for the period from the beginning of the then
current Fiscal Year to the end of such month, setting forth (for each month on
and after April 2007) in each case in comparative form the corresponding figures
for the corresponding periods of the previous Fiscal Year, together with a
Financial Officer Certification and any other operating and management reports
prepared by management for or during such period (with shall include, in any
event, a report prepared on at least a monthly basis on typical operating
metrics and internal weekly cash flow forecasts, each substantially in the form
prepared by management prior to the Closing Date);
(b) Quarterly Financial Statements. As soon as available, and in
any event within forty-five (45) days after the end of each Fiscal Quarter of
each Fiscal Year (including the fourth Fiscal Quarter), the consolidated and
consolidating balance sheets of Company and its Subsidiaries as at the end of
such Fiscal Quarter and the
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related consolidated (and with respect to statements of income, consolidating)
statements of income, stockholders' equity and cash flows of Company and its
Subsidiaries for such Fiscal Quarter and for the period from the beginning of
the then current Fiscal Year to the end of such Fiscal Quarter, setting forth in
each case in comparative form the corresponding figures for the corresponding
periods of the previous Fiscal Year and the corresponding figures from the
Financial Plan for the current Fiscal Year, all in reasonable detail, together
with a Financial Officer Certification and a Narrative Report with respect
thereto;
(c) Annual Financial Statements. As soon as available, and in any
event within ninety (90) days after the end of each Fiscal Year, (i) the
consolidated and consolidating balance sheets of Company and its Subsidiaries as
at the end of such Fiscal Year and the related consolidated (and with respect to
statements of income, consolidating) statements of income, stockholders' equity
and cash flows of Company and its Subsidiaries for such Fiscal Year, setting
forth in each case in comparative form the corresponding figures for the
previous Fiscal Year and the corresponding figures from the Financial Plan for
the Fiscal Year covered by such financial statements, in reasonable detail,
together with a Financial Officer Certification and a Narrative Report with
respect thereto; and (ii) with respect to such consolidated financial statements
a report thereon of KPMG LLP or other independent certified public accountants
of recognized national standing selected by Company, and reasonably satisfactory
to Administrative Agent (which report shall be unqualified as to scope of audit
(and shall not contain any explanatory provisions with respect thereto), and
shall state that such consolidated financial statements fairly present, in all
material respects, the consolidated financial position of Company and its
Subsidiaries as at the dates indicated and the results of their operations and
their cash flows for the periods indicated in conformity with GAAP applied on a
basis consistent with prior years (except as otherwise disclosed in such
financial statements) and that the examination by such accountants in connection
with such consolidated financial statements has been made in accordance with
generally accepted auditing standards) together with a written statement by such
independent certified public accountants stating (1) that their audit
examination has included a review of the terms of the Credit Documents, (2)
whether, in connection therewith, any condition or event that constitutes a
Default or an Event of Default has come to their attention and, if such a
condition or event has come to their attention, specifying the nature and period
of existence thereof, and (3) that nothing has come to their attention that
causes them to believe that the information contained in any Compliance
Certificate is not correct or that the matters set forth in such Compliance
Certificate are not stated in accordance with the terms hereof;
(d) Compliance Certificate. Together with each delivery of
financial statements of Company and its Subsidiaries pursuant to Sections 5.1(b)
and 5.1(c), a duly executed and completed Compliance Certificate;
(e) Statements of Reconciliation after Change in Accounting
Principles. If, as a result of any change in accounting principles and policies
from those used in the preparation of the Historical Financial Statements, the
consolidated financial statements of Company and its Subsidiaries delivered
pursuant to Section 5.1(b) or 5.1(c)
64
will differ in any material respect from the consolidated financial statements
that would have been delivered pursuant to such subdivisions had no such change
in accounting principles and policies been made, then, together with the first
delivery of such financial statements after such change, one or more statements
of reconciliation for all such prior financial statements in form and substance
satisfactory to Administrative Agent;
(f) Notice of Default. Promptly upon any officer of Company or
any Subsidiary obtaining knowledge (i) of any condition or event that
constitutes a Default or an Event of Default or that notice has been given to
Company or any Subsidiary with respect thereto; (ii) that any Person has given
any notice to Company or any of its Subsidiaries or taken any other action with
respect to any event or condition set forth in Section 8.1(b); or (iii) of the
occurrence of any event or change that has caused or evidences, either in any
case or in the aggregate, a Material Adverse Effect, a certificate of its
Authorized Officers specifying the nature and period of existence of such
condition, event or change, or specifying the notice given and action taken by
any such Person and the nature of such claimed Event of Default, Default,
default, event or condition, and what action Company has taken, is taking and
proposes to take with respect thereto;
(g) Notice of Litigation. Promptly upon any officer of Company or
any Subsidiary obtaining knowledge of (i) the institution of, or non frivolous
threat of, any Adverse Proceeding not previously disclosed in writing by Company
to Lenders, or (ii) any material development in any Adverse Proceeding that, in
the case of either clause (i) or (ii) if adversely determined, could be
reasonably expected to have a Material Adverse Effect, or seeks to enjoin or
otherwise prevent the consummation of, or to recover any damages or obtain
relief as a result of, the transactions contemplated hereby, written notice
thereof together with such other information as may be reasonably available to
Company or its Subsidiaries to enable Lenders and their counsel to evaluate such
matters;
(h) ERISA. (i) Promptly upon becoming aware of the occurrence of
or forthcoming occurrence of any ERISA Event, a written notice specifying the
nature thereof, what action Company, any of its Subsidiaries or any of their
respective ERISA Affiliates has taken, is taking or proposes to take with
respect thereto and, when known, any action taken or threatened by the Internal
Revenue Service, the Department of Labor or the PBGC with respect thereto; and
(ii) with reasonable promptness, copies of (1) each Schedule B (Actuarial
Information) to the annual report (Form 5500 Series) filed by Company, any of
its Subsidiaries or any of their respective ERISA Affiliates with the Internal
Revenue Service with respect to each Pension Plan; (2) all notices received by
Company, any of its Subsidiaries or any of their respective ERISA Affiliates
from a Multiemployer Plan sponsor concerning an ERISA Event; and (3) copies of
such other documents or governmental reports or filings relating to any Employee
Benefit Plan as Administrative Agent shall reasonably request;
(i) Financial Plan. As soon as practicable and in any event no
later than forty-five (45) days after the beginning of each Fiscal Year, a
consolidated plan and financial forecast for such Fiscal Year and each Fiscal
Year (or portion thereof) through the final maturity date of the Loans (a
"FINANCIAL PLAN"), including (i) a
65
forecasted consolidated balance sheet and forecasted consolidated statements of
income and cash flows of Company and its Subsidiaries for each such Fiscal Year,
together with pro forma Compliance Certificates for each such Fiscal Year and an
explanation of the assumptions on which such forecasts are based, (ii)
forecasted consolidated statements of income and cash flows of Company and its
Subsidiaries for each month of each such Fiscal Year, (iii) forecasts
demonstrating projected compliance with the requirements of Section 6.8 through
the final maturity date of the Loans, and (iv) forecasts demonstrating adequate
liquidity through the final maturity date of the Loans, together, in each case,
with an explanation of the assumptions on which such forecasts are based all in
form and substance reasonably satisfactory to Agents;
(j) Insurance Report. As soon as practicable and in any event by
the last day of each Fiscal Year, a report in form and substance satisfactory to
Administrative Agent outlining all material insurance coverage maintained as of
the date of such report by Company and its Subsidiaries and all material
insurance coverage planned to be maintained by Company and its Subsidiaries in
the immediately succeeding Fiscal Year;
(k) Notice of Change in Board of Directors. With reasonable
promptness, written notice of any change in the board of directors (or similar
governing body) of Company;
(l) Notice Regarding Material Contracts. Promptly, and in any
event within ten (10) Business Days (i) after any Material Contract of Company
or any of its Subsidiaries is terminated or amended in a manner that is
materially adverse to Company or such Subsidiary, as the case may be, or (ii)
any new Material Contract is entered into, a written statement describing such
event, with copies of such material amendments or new contracts, delivered to
Administrative Agent (to the extent such delivery is permitted by the terms of
any such Material Contract, provided, no such prohibition on delivery shall be
effective if it were bargained for by Company or its applicable Subsidiary with
the intent of avoiding compliance with this Section 5.1(l)), and an explanation
of any actions being taken with respect thereto;
(m) Environmental Reports and Audits. As soon as practicable
following receipt thereof, copies of all environmental audits and reports with
respect to environmental matters at any Facility or which relate to any
environmental liabilities of Company or its Subsidiaries which, in any such
case, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect;
(n) Information Regarding Collateral. (a) Company will furnish to
Collateral Agent prompt written notice of any change (i) in any Credit Party's
corporate name, (ii) in any Credit Party's identity or corporate structure or
(iii) in any Credit Party's Federal Taxpayer Identification Number. Company
agrees not to effect or permit any change referred to in the preceding sentence
unless all filings have been made under the UCC or otherwise that are required
in order for Collateral Agent to continue at all times following such change to
have a valid, legal and perfected security interest in all the Collateral and
for the Collateral at all times following such change to have a valid,
66
legal and perfected security interest as contemplated in the Collateral
Documents. Company also agrees promptly to notify Collateral Agent if any
material portion of the Collateral is damaged or destroyed;
(o) Annual Collateral Verification. Each year, at the time of
delivery of annual financial statements with respect to the preceding Fiscal
Year pursuant to Section 5.1(c), Company shall deliver to Collateral Agent an
Officer's Certificate (i) either confirming that there has been no change in
such information since the date of the Collateral Questionnaire delivered on the
Closing Date or the date of the most recent certificate delivered pursuant to
this Section and/or identifying such changes, or (ii) certifying that all UCC
financing statements (including fixtures filings, as applicable) or other
appropriate filings, recordings or registrations, have been filed of record in
each governmental, municipal or other appropriate office in each jurisdiction
identified in the Collateral Questionnaire or pursuant to clause (i) above to
the extent necessary to protect and perfect the security interests under the
Collateral Documents for a period of not less than 18 months after the date of
such certificate (except as noted therein with respect to any continuation
statements to be filed within such period);
(p) Aging Reports. Together with each delivery of financial
statements of Company and each other Credit Party pursuant to Sections 5.1(a),
5.1(b), and 5.1(c), (i) a summary of the accounts receivable aging report of
each Credit Party as of the end of such period, and (ii) a summary of accounts
payable aging report of each Credit Party as of the end of such period;
(q) Tax Returns. As soon as practicable and in any event within
fifteen (15) days following the filing thereof, copies of each federal income
Tax return filed by or on behalf of any Credit Party;
(r) Lease Reports. As soon as practicable and in any event within
(i) ten (10) days following the end of each calendar month, a report specifying,
for each parcel of real property leased by any Credit Party, whether all rent
and other amounts then due under or in connection with such lease have been paid
and, if any such amounts have not been paid, the amount in arrears and an
explanation of the reasons therefor and (ii) two (2) Business Days of its
receipt thereof, copies of any notice provided by any landlord, mortgagee or
subtenant of any such leased property that alleges any breach or default under
such lease, and sub-lease, or any document relating thereto; and
(s) Other Information. (A) Promptly upon their becoming
available, copies of (i) all financial statements, reports, notices and proxy
statements sent or made available generally by Company to its security holders
acting in such capacity or by any Subsidiary of Company to its security holders
other than Company or another Subsidiary of Company, (ii) all regular and
periodic reports and all registration statements and prospectuses, if any, filed
by Company or any of its Subsidiaries with any securities exchange or with the
Securities and Exchange Commission or any governmental or private regulatory
authority, (iii) all press releases and other statements made available
generally by Company or any of its Subsidiaries to the public concerning
67
material developments in the business of Company or any of its Subsidiaries, and
(B) such other information and data with respect to Company or any of its
Subsidiaries as from time to time may be reasonably requested by Administrative
Agent.
5.2 EXISTENCE. Except as otherwise permitted under Section 6.9, each Credit
Party will, and will cause each of its Subsidiaries to, at all times preserve
and keep in full force and effect its existence and all rights and franchises,
licenses and permits material to its business; provided, no Credit Party or any
of its Subsidiaries shall be required to preserve any such existence, right or
franchise, licenses and permits if such Person's board of directors (or similar
governing body) shall determine that the preservation thereof is no longer
desirable in the conduct of the business of such Person, and that the loss
thereof is not disadvantageous in any material respect to such Person or to
Lenders.
5.3 PAYMENT OF TAXES AND CLAIMS. Each Credit Party will, and will cause each of
its Subsidiaries to, pay all Taxes imposed upon it or any of its properties or
assets or in respect of any of its income, businesses or franchises before any
penalty or fine accrues thereon, and all claims (including claims for labor,
services, materials and supplies) for sums that have become due and payable and
that by law have or may become a Lien upon any of its properties or assets,
prior to the time when any penalty or fine shall be incurred with respect
thereto; provided, no such Tax or claim need be paid if it is being contested in
good faith by appropriate proceedings promptly instituted and diligently
conducted, so long as (a) adequate reserve or other appropriate provision, as
shall be required in conformity with GAAP shall have been made therefor, and (b)
in the case of a Tax or claim which has or may become a Lien against any of the
Collateral, such contest proceedings conclusively operate to stay the sale of
any portion of the Collateral to satisfy such Tax or claim. No Credit Party
will, nor will it permit any of its Subsidiaries to, file or consent to the
filing of any consolidated income tax return with any Person (other than Company
or any of its Subsidiaries).
5.4 MAINTENANCE OF PROPERTIES; PAYMENTS OF LEASEHOLDS. Each Credit Party will,
and will cause each of its Subsidiaries to, maintain or cause to be maintained
in good repair, working order and condition, ordinary wear and tear excepted,
all material properties used or useful in the business of Company and its
Subsidiaries and from time to time will make or cause to be made all appropriate
repairs, renewals and replacements thereof. Each Credit Party will pay, on or
before the same shall become due, all rent and other amounts due under or in
connection with any lease of real property by such Credit Party (other than
leases excluded from the provisions hereof in a writing signed by Company and
Administrative Agent), provided, no such rent or other amount need be paid if it
is being contested in good faith by appropriate proceedings promptly instituted
and diligently conducted, so long as (a) adequate reserve or other appropriate
provision, as shall be required in conformity with GAAP shall have been made
therefor, and (b) Administrative Agent shall have consented in writing to such
non-payment.
5.5 INSURANCE. Company will maintain or cause to be maintained, with financially
sound and reputable insurers, (i) business interruption insurance reasonably
satisfactory to Administrative Agent, and (ii) casualty insurance, such public
liability insurance, third party property damage insurance with respect to
liabilities, losses or damage in respect of
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the assets, properties and businesses of Company and its Subsidiaries as may
customarily be carried or maintained under similar circumstances by Persons of
established reputation engaged in similar businesses, in each case in such
amounts (giving effect to self insurance), with such deductibles, covering such
risks and otherwise on such terms and conditions as shall be customary for such
Persons. Without limiting the generality of the foregoing, Company will maintain
or cause to be maintained replacement value casualty insurance on the Collateral
under such policies of insurance, with such insurance companies, in such
amounts, with such deductibles, and covering such risks as are at all times
carried or maintained under similar circumstances by Persons of established
reputation engaged in similar businesses. Each such policy of insurance shall
(i) name Collateral Agent, on behalf of Lenders as an additional insured
thereunder as its interests may appear, and (ii) in the case of each casualty
insurance policy, contain a loss payable clause or endorsement, satisfactory in
form and substance to Collateral Agent, that names Collateral Agent, on behalf
of Secured Parties as the loss payee thereunder and provides for at least thirty
(30) days' prior written notice to Collateral Agent of any modification or
cancellation of such policy.
5.6 INSPECTIONS. Each Credit Party will, and will cause each of its Subsidiaries
to, permit any authorized representatives designated by any Lender to visit and
inspect any of the properties of any Credit Party and any of its respective
Subsidiaries, to inspect, copy and take extracts from its and their financial
and accounting records, and to discuss its and their affairs, finances and
accounts with its and their officers and independent public accountants, all
upon reasonable notice and at such reasonable times during normal business hours
and as often as may reasonably be requested.
5.7 LENDERS MEETINGS. Company and its Subsidiaries will, upon the request of
Administrative Agent or Requisite Lenders, participate in a meeting of
Administrative Agent and Lenders once during each Fiscal Year to be held at
Company's corporate offices (or at such other location as may be agreed to by
Company and Administrative Agent) at such time as may be agreed to by Company
and Administrative Agent.
5.8 COMPLIANCE WITH LAWS. Each Credit Party will comply, and shall cause each of
its Subsidiaries and all other Persons, if any, on or occupying any Facilities
to comply, with the requirements of all applicable laws, rules, regulations and
orders of any Governmental Authority (including all Environmental Laws),
noncompliance with which could reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect.
5.9 ENVIRONMENTAL.
(a) Environmental Disclosure. Company will deliver to
Administrative Agent and Lenders:
(i) as soon as practicable following receipt thereof, copies of
all environmental audits, investigations, analyses and reports of any kind
or character, whether prepared by personnel of Company or any of its
Subsidiaries or by independent consultants, governmental authorities or any
other Persons,
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with respect to significant environmental matters at any Facility or with
respect to any Environmental Claims;
(ii) promptly upon the occurrence thereof, written notice
describing in reasonable detail (1) any Release required to be reported to
any federal, state or local governmental or regulatory agency under any
applicable Environmental Laws, (2) any remedial action taken by Company or
any other Person in response to (A) any Hazardous Materials Activities the
existence of which has a reasonable possibility of resulting in one or more
Environmental Claims having, individually or in the aggregate, a Material
Adverse Effect, or (B) any Environmental Claims that, individually or in
the aggregate, have a reasonable possibility of resulting in a Material
Adverse Effect, and (3) Company or any Subsidiary's discovery of any
occurrence or condition on any real property adjoining or in the vicinity
of any Facility that could cause such Facility or any part thereof to be
subject to any material restrictions on the ownership, occupancy,
transferability or use thereof under any Environmental Laws;
(iii) as soon as practicable following the sending or receipt
thereof by Company or any of its Subsidiaries, a copy of any and all
written communications with respect to (1) any Environmental Claims that,
individually or in the aggregate, have a reasonable possibility of giving
rise to a Material Adverse Effect, (2) any Release required to be reported
to any federal, state or local governmental or regulatory agency, and (3)
any request for information from any governmental agency that suggests such
agency is investigating whether Company or any of its Subsidiaries may be
potentially responsible for any Hazardous Materials Activity;
(iv) prompt written notice describing in reasonable detail (1)
any proposed acquisition of stock, assets, or property by Company or any of
its Subsidiaries that could reasonably be expected to (A) expose Company or
any of its Subsidiaries to, or result in, Environmental Claims that could
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect or (B) affect the ability of Company or any of its
Subsidiaries to maintain in full force and effect all material Governmental
Authorizations required under any Environmental Laws for their respective
operations and (2) any proposed action to be taken by Company or any of its
Subsidiaries to modify current operations in a manner that could reasonably
be expected to subject Company or any of its Subsidiaries to any additional
material obligations or requirements under any Environmental Laws; and
(v) with reasonable promptness, such other documents and
information as from time to time may be reasonably requested by
Administrative Agent in relation to any matters disclosed pursuant to this
Section 5.9(a).
(b) Hazardous Materials Activities, Etc. Each Credit Party shall
promptly take, and shall cause each of its Subsidiaries promptly to take, any
and all actions necessary to (i) cure any violation of applicable Environmental
Laws by such
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Credit Party or its Subsidiaries that could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, and (ii) make an
appropriate response to any Environmental Claim against such Credit Party or any
of its Subsidiaries and discharge any obligations it may have to any Person
thereunder where failure to do so could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
(c) Right of Access and Inspection. With respect to any event
described in Section 5.9(a), or if an Event of Default has occurred and is
continuing, or if Administrative Agent reasonably believes that Company or any
Subsidiary has breached any representation, warranty or covenant related to
environmental matters (including those contained in Sections 4.11, 4.14, 5.8 or
5.9):
(i) Administrative Agent and its representatives shall have the
right, but not the obligation or duty, to enter the Facilities at
reasonable times for the purposes of observing the Facilities. Such access
shall include, at the reasonable request of Administrative Agent, access to
relevant documents and employees of Company and its Subsidiaries and to
their outside representatives, to the extent necessary to obtain necessary
information related to the event at issue. If an Event of Default has
occurred and is continuing, the Credit Parties shall conduct such tests and
investigations on the Facilities or relevant portion thereof, as reasonably
requested by Administrative Agent, including the preparation of such
sampling or analysis as determined to be necessary under the circumstances
by a qualified environmental engineer or consultant. If an Event of Default
has occurred and is continuing, and if a Credit Party does not undertake
such tests and investigations in a reasonably timely manner following the
request of Administrative Agent, Administrative Agent may hire an
independent engineer, at the Credit Parties' expense, to conduct such tests
and investigations. Administrative Agent will make all reasonable efforts
to conduct any such tests and investigations so as to avoid interfering
with the operation of the Facility.
(ii) Any observations, tests or investigations of the Facilities
by or on behalf of Administrative Agent shall be solely for the purpose of
protecting the Lenders security interests and rights under the Credit
Documents. The exercise of Administrative Agent's rights under this
Subsection (c) shall not constitute a waiver of any default of any Credit
Party or impose any liability on Administrative Agent or any of the
Lenders. In no event will any observation, test or investigation by or on
behalf of Administrative Agent be a representation that Hazardous Materials
are or are not present in, on or under any of the Facilities, or that there
has been or will be compliance with any Environmental Law and
Administrative Agent shall not be deemed to have made any representation or
warranty to any party regarding the truth, accuracy or completeness of any
report or findings with regard thereto. Neither any Credit Party nor any
other party is entitled to rely on any observation, test or investigation
by or on behalf of Administrative Agent. Administrative Agent and the
Lenders owe no duty of care to protect any Credit Party or any other party
against, or to inform any Credit Party or any other party of, any Hazardous
71
Materials or any other adverse condition affecting any of the Facilities.
Administrative Agent may, in its sole discretion, disclose to the
applicable Credit Party, or to any other party if so required by law, any
report or findings made as a result of, or in connection with, its
observations, tests or investigations. If a request is made of
Administrative Agent to disclose any such report or finding to any third
party, then Administrative Agent shall endeavor to give the applicable
Credit Party prior notice of such disclosure and afford such Credit Party
the opportunity to object or defend against such disclosure at its own and
sole cost; provided, that the failure of Administrative Agent to give any
such notice or afford such Credit Party the opportunity to object or defend
against such disclosure shall not result in any liability to Administrative
Agent. Each Credit Party acknowledges that it may be obligated to notify
relevant Governmental Authorities regarding the results of any observation,
test or investigation disclosed to such Credit Party, and that such
reporting requirements are site and fact-specific and are to be evaluated
by such Credit Party without advice or assistance from Administrative
Agent.
(d) Privileged Materials. If counsel to Company or any of its
Subsidiaries reasonably determines (1) that provision to Administrative Agent of
a document otherwise required to be provided pursuant to this Section 5.9 (or
any other provision of this Agreement or any other Credit Document relating to
environmental matters) would jeopardize an applicable attorney-client or work
product privilege pertaining to such document, then Company or its Subsidiary
shall not be obligated to deliver such document to Administrative Agent but
shall provide Administrative Agent with a notice identifying the author and
recipient of such document and generally describing the contents of the
document. Upon request of Administrative Agent, Company and its Subsidiaries
shall take all reasonable steps necessary to provide Administrative Agent with
the factual information contained in any such privileged document.
5.10 SUBSIDIARIES. In the event that any Person becomes a Domestic Subsidiary of
Company, Company shall (a) concurrently with such Person becoming a Domestic
Subsidiary cause such Domestic Subsidiary to become a Guarantor hereunder, a
Grantor under the Pledge and Security Agreement and an Other Obligor under the
Subordination Agreement by executing and delivering to Administrative Agent and
Collateral Agent a Counterpart Agreement, and (b) take all such actions and
execute and deliver, or cause to be executed and delivered, all such documents,
instruments, agreements, and certificates as are similar to those described in
Sections 3.1(b), 3.1(h), 3.1(j), 3.1(l) and, to the extent applicable, Section
5.11, and shall cause such Subsidiary to become a party to the Intercompany Note
pursuant to documentation reasonably satisfactory to Administrative Agent. In
the event that any Person becomes a Foreign Subsidiary of Company, and the
ownership interests of such Foreign Subsidiary are owned by Company or by any
Domestic Subsidiary thereof, Company shall, or shall cause such Domestic
Subsidiary to, deliver, all such documents, instruments, agreements, and
certificates as are similar to those described in Sections 3.1(b), and Company
shall take, or shall cause such Domestic Subsidiary to take, all of the actions
referred to in Section 3.1(h)(i) necessary to grant and to perfect a First
Priority Lien in favor of Collateral Agent, for the benefit of Secured
72
Parties, under the Pledge and Security Agreement in 65% of such ownership
interests. With respect to each such Subsidiary, Company shall promptly send to
Administrative Agent written notice setting forth with respect to such Person
(i) the date on which such Person became a Subsidiary of Company, and (ii) all
of the data required to be set forth in Schedules 4.1 and 4.2 with respect to
all Subsidiaries of Company; provided, such written notice shall be deemed to
supplement Schedule 4.1 and 4.2 for all purposes hereof.
5.11 REAL ESTATE ASSETS.
(a) With respect to each Leasehold Property identified on
Schedule 5.11 hereto, Company and each Credit Party party to the relevant lease
shall use its commercially reasonable efforts to execute and deliver, or cause
to be executed and delivered prior to the date that is sixty days after the
Closing Date (and to the extent not delivered on or prior to such date, to cause
the same to be executed and delivered as soon as practicable thereafter),
leasehold Mortgages and such landlord consents and estoppels, opinions of
counsel, title insurance policies and reports, surveys, flood insurance, ALTA
title insurance, flood insurance (to the extent required) in form and substance
reasonably satisfactory to Collateral Agent and such other documents and
instruments with respect thereto (including environmental reports) that
Collateral Agent shall reasonably request to create in favor of Collateral
Agent, for the benefit of Secured Parties, a valid and, subject to any filing
and/or recording referred to herein, perfected First Priority security interest
in such Leasehold Property and to protect and confirm the leasehold estate
subject to the same (and Collateral Agent's interest therein).
(b) In the event that any Credit Party acquires a Material Real
Estate Asset or a Real Estate Asset owned or leased on the Closing Date becomes
a Material Real Estate Asset and such interest has not otherwise been made
subject to the Lien of the Collateral Documents in favor of Collateral Agent,
for the benefit of Secured Parties, then such Credit Party, contemporaneously
with acquiring such Material Real Estate Asset, or promptly after a Real Estate
Asset owned or leased on the Closing Date becomes a Material Real Estate Asset,
shall take all such actions and execute and deliver, or cause to be executed and
delivered, all such Mortgages and such landlord consents and estoppels, opinions
of counsel, title insurance policies and reports, surveys, flood insurance, ALTA
title insurance, flood insurance (to the extent required) in form and substance
reasonably satisfactory to Collateral Agent and such other documents and
instruments with respect thereto (including environmental reports) that
Collateral Agent shall reasonably request to create in favor of Collateral
Agent, for the benefit of Secured Parties, a valid and, subject to any filing
and/or recording referred to herein, perfected First Priority security interest
in such Material Real Estate Asset and to protect and confirm the estate subject
to the same. In addition, in the event that any Credit Party acquires any
Leasehold Property after the Closing Date, it shall promptly (and in any event
within ten Business Days of entering into the lease relating to such Leasehold
Property), deliver to Collateral Agent a Landlord Personal Property Collateral
Access Agreement duly executed by the landlord of such Leasehold Property and
the applicable Credit Party.
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(c) In addition to the foregoing, Company shall, at the request
of Requisite Lenders, deliver, from time to time, to Administrative Agent such
appraisals as are required by law or regulation of Real Estate Assets with
respect to which Collateral Agent has been granted a Lien.
5.12 INTEREST RATE PROTECTION. No later than thirty days following the Closing
Date and at all times thereafter, Company shall maintain, or caused to be
maintained, in effect one or more Interest Rate Agreements (constituting caps or
collars) in form and substance reasonably satisfactory to Administrative Agent,
which Interest Rate Agreements shall effectively limit the Unadjusted LIBOR Rate
Component of the interest costs to Company with respect to an aggregate notional
principal amount of not less than 70% of the aggregate principal amount of the
Term Loan outstanding from time to time (based on the assumption that such
notional principal amount was a LIBOR Rate Loan with an Interest Period of three
months) for the period commencing 90 days after the Closing Date and ending on
the Term Loan Maturity Date to a rate equal to not more than 6.5% per annum.
5.13 FURTHER ASSURANCES. At any time or from time to time upon the request of
Administrative Agent, each Credit Party will, at its expense, promptly execute,
acknowledge and deliver such further documents and do such other acts and things
as Administrative Agent or Collateral Agent may reasonably request in order to
effect fully the purposes of the Credit Documents, including providing Lenders
with any information reasonably requested pursuant to Section 10.21. In
furtherance and not in limitation of the foregoing, each Credit Party shall take
such actions as Administrative Agent or Collateral Agent may reasonably request
from time to time to ensure that the Obligations are guarantied by the
Guarantors and are secured by substantially all of the assets of Company, and
its Subsidiaries and all of the outstanding Capital Stock of Company and its
Subsidiaries (subject to limitations contained in the Credit Documents with
respect to Foreign Subsidiaries).
5.14 CASH MANAGEMENT SYSTEMS. Company and its Subsidiaries shall establish and
maintain cash management systems reasonably acceptable to Administrative Agent,
including, without limitation, with respect to blocked account arrangements.
5.15 POST CLOSING MATTERS. Company shall, and shall cause each of the Credit
Parties to, satisfy the requirements set forth on Schedule 5.15 on or before the
date specified for such requirement or such later date to be determined by
Administrative Agent.
5.16 BOOKS. Company shall, and shall cause each of its Subsidiaries to, keep
adequate books of record and account, in which complete entries shall be made of
all financial transactions and the assets and business of Company and each such
Subsidiary. Company shall, and shall cause each of its Subsidiaries to, account
for all amounts paid to or on behalf of each other (including, without
limitation, all transfers of cash, near-cash items and other assets and all
payments by Company or any of its Subsidiaries of payroll, rent, taxes, accounts
payable or other obligations on behalf of Company or another Subsidiary) to be
accounted for as intercompany indebtedness (or repayments of
74
existing intercompany indebtedness between such parties) evidenced by the
Intercompany Note.
5.17 ATLANTIC EXISTING CREDIT FACILITY. If Company shall not have repaid in full
all amounts outstanding under the Atlantic Existing Credit Facility within 75
days of the Closing Date from the proceeds of an equity offering that it is
permitted to retain under the terms hereof, Company shall notify Administrative
Agent on or prior to the next succeeding Business Day that the Atlantic Existing
Credit Facility is still outstanding and the amount of principal, interest
(including a calculation of per diem interest that will accrue thereunder after
such date) and other amounts outstanding thereunder (the aggregate of such
amounts as of any day being the "AECF OUTSTANDINGS"). In the event one or more
Lenders (or their respective Affiliates) offer to provide new loans in an
aggregate amount at least equal to the AECF Outstandings on substantially the
same terms and conditions applicable to the Term Loans hereunder (such loans
being the "ADDITIONAL LOANS"), Company agrees (i) that it will borrow the
Additional Loans on or prior to the date that is 89 days after the Closing Date
and apply the proceeds of such loans to repay the AECF Outstandings in full and
(ii) contemporaneously with its borrowing of the Additional Loans, it will issue
warrants (substantially in the form of the Warrants) the lenders providing the
Additional Loans or their designees exercisable for 1% of the fully-diluted
common equity of Company (or, to the event that the AECF Outstandings are then
less than the amount that would have been outstanding on such date had no other
prepayment thereon been made after the Closing Date, a ratable portion of such
warrants).
5.18 ATLANTIC TERM LOAN FACILITY. To the extent of the remaining commitment
thereunder, Company shall request a borrowing under the Atlantic Term Loan
Agreement equal to the lesser of (i) $500,000 and (ii) the remaining commitments
under the Atlantic Term Loan Agreement at any time the sum of (x) Company's cash
on hand plus (y) its undrawn availability under the Revolving Commitments is
less than $750,000 as of the close of business on any Monday.
SECTION 6. NEGATIVE COVENANTS
Each Credit Party covenants and agrees that, so long as any Commitment is
in effect and until payment in full of all Obligations, it shall perform, and
shall cause each of its Subsidiaries to perform, all covenants in this Section
6.
6.1 INDEBTEDNESS. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or guaranty, or
otherwise become or remain directly or indirectly liable with respect to any
Indebtedness, except:
(a) the Obligations;
(b) Indebtedness of any Guarantor to Company or to any other
Guarantor, or of Company to any Guarantor; provided, (i) all such Indebtedness
shall be evidenced by promissory notes and all such notes shall be subject to a
First Priority Lien
75
pursuant to the Pledge and Security Agreement, (ii) all such Indebtedness shall
be unsecured and subordinated in right of payment to the payment in full of the
Obligations pursuant to the terms of the applicable promissory notes or an
intercompany subordination agreement that in any such case, is reasonably
satisfactory to Administrative Agent, and (iii) any payment by any such
Guarantor under any guaranty of the Obligations shall result in a pro tanto
reduction of the amount of any Indebtedness owed by such Subsidiary to Company
or to any of its Subsidiaries for whose benefit such payment is made;
(c) Subordinated Indebtedness;
(d) Indebtedness incurred by Company or any of its Subsidiaries
arising from agreements providing for indemnification, adjustment of purchase
price or similar obligations, incurred in connection with permitted dispositions
of any business, assets or Company or any of its Subsidiaries permitted
hereunder;
(e) Indebtedness which may be deemed to exist pursuant to any
guaranties, performance, surety, statutory, appeal or similar obligations
incurred in the ordinary course of business;
(f) Indebtedness in respect of netting services, overdraft
protections and otherwise in connection with deposit accounts;
(g) Performance guaranties in the ordinary course of business and
consistent with historic practices of the obligations of suppliers, customers,
franchisees and licensees of Company and its Subsidiaries;
(h) guaranties by Company of Indebtedness of a Guarantor or
guaranties by a Subsidiary of Company of Indebtedness of Company or a Guarantor
with respect, in each case, to Indebtedness otherwise permitted to be incurred
pursuant to this Section 6.1;
(i) Indebtedness described in Schedule 6.1, but not any
extensions, renewals or replacements of such Indebtedness except (i) renewals
and extensions expressly provided for in the agreements evidencing any such
Indebtedness as the same are in effect on the date of this Agreement, and (ii)
refinancings and extensions of any such Indebtedness if the terms and conditions
thereof, including those relating to amortization, maturity, collateral and
subordination, are not less favorable to the obligor thereon or to the Lenders
than the Indebtedness being refinanced or extended and the average life to
maturity thereof is greater than or equal to that of the Indebtedness being
refinanced or extended; provided, such Indebtedness permitted under the
immediately preceding clause (i) or (ii) above shall not (A) include
Indebtedness of an obligor that was not an obligor with respect to the
Indebtedness being extended, renewed or refinanced, (B) exceed in a principal
amount the Indebtedness being renewed, extended or refinanced, or (C) be
incurred, created or assumed if any Default or Event of Default has occurred and
is continuing or would result therefrom;
76
(j) Indebtedness with respect to Capital Leases; provided, the
principal amount of such Indebtedness, when aggregated with the principal amount
of all Indebtedness incurred under clause (k) below, shall not exceed at any
time $4,000,000;
(k) purchase money Indebtedness; provided, (i) any such
Indebtedness (A) shall be secured only to the asset acquired in connection with
the incurrence of such Indebtedness, and (B) shall constitute not less than 95%
of the aggregate consideration paid with respect to such asset, and (ii) the
aggregate amount of all such Indebtedness, when aggregated with the principal
amount of all Indebtedness incurred under clause (j) above, shall not exceed at
any time $4,000,000;
(l) unsecured Indebtedness under Interest Rate Agreements and
Currency Agreements entered into in the ordinary course of business and not for
speculative purposes; and
(m) other unsecured Indebtedness of Company and its Subsidiaries,
which is unsecured and subordinated to the Obligations in a manner satisfactory
to Administrative Agent in an aggregate amount not to exceed at any time
$250,000.
6.2 LIENS. No Credit Party shall, nor shall it permit any of its Subsidiaries
to, directly or indirectly, create, incur, assume or permit to exist any Lien on
or with respect to any property or asset of any kind (including any document or
instrument in respect of goods or accounts receivable) of Company or any of its
Subsidiaries, whether now owned or hereafter acquired, or any income or profits
therefrom, or file or permit the filing of, or permit to remain in effect, any
financing statement or other similar notice of any Lien with respect to any such
property, asset, income or profits under the UCC of any state or under any
similar recording or notice statute, except:
(a) Liens in favor of Collateral Agent for the benefit of Secured
Parties granted pursuant to any Credit Document;
(b) Liens for Taxes if obligations with respect to such Taxes are
being contested in good faith by appropriate proceedings promptly instituted and
diligently conducted so long as such reserves or other appropriate provisions,
if any, as shall be required by GAAP shall have been made for any such contested
amounts;
(c) statutory Liens of landlords, banks (and rights of set off),
of carriers, warehousemen, mechanics, repairmen, workmen and materialmen, and
other Liens imposed by law (other than any such Lien imposed pursuant to Section
401(a)(29) or 412(n) of the Internal Revenue Code or by ERISA), in each case
incurred in the ordinary course of business (i) for amounts not yet overdue, or
(ii) for amounts that are overdue and that (in the case of any such amounts
overdue for a period in excess of five days) are being contested in good faith
by appropriate proceedings, so long as such reserves or other appropriate
provisions, if any, as shall be required by GAAP shall have been made for any
such contested amounts;
77
(d) Liens incurred in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other types of
social security, or to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, government contracts, trade contracts,
performance and return of money bonds and other similar obligations (exclusive
of obligations for the payment of borrowed money or other Indebtedness), so long
as no foreclosure, sale or similar proceedings have been commenced with respect
to any portion of the Collateral on account thereof;
(e) easements, rights of way, restrictions, encroachments, and
other minor defects or irregularities in title, in each case which do not and
will not interfere in any material respect with the ordinary conduct of the
business of Company or any of its Subsidiaries;
(f) any interest or title of a lessor or sublessor under any
lease of real estate permitted hereunder;
(g) Liens solely on any xxxx xxxxxxx money deposits made by
Company or any of its Subsidiaries in connection with any letter of intent or
purchase agreement permitted hereunder;
(h) purported Liens evidenced by the filing of precautionary UCC
financing statements relating solely to operating leases of personal property
entered into in the ordinary course of business;
(i) Liens in favor of customs and revenue authorities arising as
a matter of law to secure payment of customs duties in connection with the
importation of goods;
(j) any zoning or similar law or right reserved to or vested in
any governmental office or agency to control or regulate the use of any real
property, in each case which do not will not interfere with or affect in any
material respect the use, value or operations thereof or the ordinary conduct of
the business of Company or such Subsidiary;
(k) licenses of patents, trademarks and other intellectual
property rights granted by Company or any of its Subsidiaries in the ordinary
course of business and not interfering in any respect with the ordinary conduct
of the business of Holdings or such Subsidiary;
(l) Liens described in Schedule 6.2;
(m) Liens on the assets of Siterock Corporation securing
$177,100.18 (plus any additional interest that shall have accrued thereon since
February 8, 2006) in obligations paid to the State of California on the Closing
Date relating to its unpaid obligations under the California Unemployment
Insurance Code and/or Revenue and Taxation Code, provided that such Lien is
discharged of record within 30 days of the Closing Date or such later date as to
which Administrative Agent may agree; and
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(n) Liens securing Indebtedness permitted pursuant to Section
6.1(k); provided, any such Lien shall encumber only the asset acquired with the
proceeds of such Indebtedness.
6.3 EQUITABLE LIEN. If any Credit Party or any of its Subsidiaries shall create
or assume any Lien upon any of its properties or assets, whether now owned or
hereafter acquired, other than Permitted Liens, it shall make or cause to be
made effective provisions whereby the Obligations will be secured by such Lien
equally and ratably with any and all other Indebtedness secured thereby as long
as any such Indebtedness shall be so secured; provided, notwithstanding the
foregoing, this covenant shall not be construed as a consent by Requisite
Lenders to the creation or assumption of any such Lien not otherwise permitted
hereby.
6.4 NO FURTHER NEGATIVE PLEDGES. Except with respect to (a) specific property
encumbered to secure payment of particular Indebtedness or to be sold pursuant
to an executed agreement with respect to an Asset Sale permitted under Section
6.8 and (b) restrictions by reason of customary provisions restricting
assignments, subletting or other transfers contained in leases, licenses and
similar agreements entered into in the ordinary course of business (provided
that such restrictions are limited to the property or assets secured by such
Liens or the property or assets subject to such leases, licenses or similar
agreements, as the case may be) no Credit Party shall, nor shall it permit any
of its Subsidiaries to, enter into any agreement prohibiting the creation or
assumption of any Lien upon any of its properties or assets, whether now owned
or hereafter acquired.
6.5 RESTRICTED JUNIOR PAYMENTS. No Credit Party shall, nor shall it permit any
of its Subsidiaries or Affiliates through any manner or means or through any
other Person to, directly or indirectly, declare, order, pay, make or set apart,
or agree to declare, order, pay, make or set apart, any sum for any Restricted
Junior Payment.
6.6 RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS. Except as provided herein, no
Credit Party shall, nor shall it permit any of its Subsidiaries to, create or
otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any Subsidiary of
Company to (a) pay dividends or make any other distributions on any of such
Subsidiary's Capital Stock owned by Company or any other Subsidiary of Company,
(b) repay or prepay any Indebtedness owed by such Subsidiary to Company or any
other Subsidiary of Company, (c) make loans or advances to Company or any other
Subsidiary of Company, or (d) transfer any of its property or assets to Company
or any other Subsidiary of Company other than restrictions (i) in agreements
evidencing Indebtedness permitted by Section 6.1(k) that impose restrictions on
the property so acquired, (ii) by reason of customary provisions restricting
assignments, subletting or other transfers contained in leases, licenses, joint
venture agreements and similar agreements entered into in the ordinary course of
business, and (iii) that are or were created by virtue of any transfer of,
agreement to transfer or option or right with respect to any property, assets or
Capital Stock not otherwise prohibited under this Agreement. No Credit Party
shall, nor shall it permit its Subsidiaries to, enter into any Contractual
Obligation which would prohibit a Subsidiary of Company from becoming a Credit
Party.
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6.7 INVESTMENTS. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, make or own any Investment in any
Person, including without limitation any Joint Venture, except:
(a) Investments in Cash and Cash Equivalents;
(b) equity Investments owned as of the Closing Date in any
Subsidiary and Investments made after the Closing Date in any wholly owned
Guarantor of Company;
(c) Investments (i) in any Securities received in satisfaction or
partial satisfaction thereof from financially troubled account debtors, and (ii)
constituting deposits, prepayments and other credits to suppliers made in the
ordinary course of business consistent with the past practices of Company and
its Subsidiaries;
(d) intercompany loans to the extent permitted under Section
6.1(b);
(e) Consolidated Capital Expenditures permitted by Section
6.8(d);
(f) loans and advances to employees of Company and its
Subsidiaries made in the ordinary course of business in an aggregate amount not
to exceed $100,000;
(g) Investments described in Schedule 6.7; and
(h) other Investments in an aggregate amount not to exceed at any
time $250,000.
Notwithstanding the foregoing, in no event shall any Credit Party make any
Investment which results in or facilitates in any manner any Restricted Junior
Payment not otherwise permitted under the terms of Section 6.5.
6.8 FINANCIAL COVENANTS.
(a) Fixed Charge Coverage Ratio. Company shall not permit the
Fixed Charge Coverage Ratio as of the last day of any Fiscal Quarter, beginning
with the Fiscal Quarter ending April 30, 2006, to be less than the correlative
ratio indicated:
FISCAL QUARTER FIXED CHARGE
ENDING: COVERAGE RATIO
-------------- --------------
April 30, 2006 0.95:1.00
July 31, 2006 1.35:1.00
October 31, 2006 1.45:1.00
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FISCAL QUARTER FIXED CHARGE
ENDING: COVERAGE RATIO
-------------- --------------
January 1, 2007 1.50:1.00
April 30, 2007 1.35:1.00
Between (and including) July 31, 1.15:1.00
2007 and July 31, 2008
Between (and including) October 1.20:1.00
31, 2008 and January 1, 2010
On April 30, 2010 and thereafter 1.25:1.00
(b) Leverage Ratio. Company shall not permit the Leverage Ratio
as of the last day of any Fiscal Quarter, beginning with the Fiscal Quarter
ending April 30, 2006, to exceed the correlative ratio indicated:
FISCAL QUARTER LEVERAGE
ENDING RATIO
-------------- ---------
April 30, 2006 5.60:1.00
July 31, 2006 4.95:1.00
October 31, 2006 4.25:1.00
January 1, 2007 3.60:1.00
April 30, 2007 3.25:1.00
July 31, 2007 3.10:1.00
October 31, 2007 2.90:1.00
January 1, 2008 2.80:1.00
April 30, 2008 2.70:1.00
On July 31, 2008 and 2.50:1.00
thereafter
(c) Consolidated Adjusted EBITDA. Company shall not permit
Consolidated Adjusted EBITDA as at the end of any Fiscal Quarter, beginning with
the Fiscal Quarter ending April 30, 2006, for the four Fiscal Quarter period
then ended to be less than the correlative amount indicated:
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CONSOLIDATED
FISCAL QUARTER ADJUSTED EBITDA
-------------- ---------------
April 30, 2006 $13,100,000
July 31, 2006 $14,900,000
October 31, 2006 $17,500,000
January 31, 2007 $20,400,000
April 30, 2007 $22,400,000
July 31, 2007 $23,100,000
October 31, 2007 $23,300,000
January 31, 2008 $23,600,000
April 30, 2008 $23,800,000
July 31, 2008 $24,100,000
October 31, 2008 $24,900,000
January 31, 2009 $25,500,000
April 30, 2009 $25,900,000
On July 31, 2009 and at $26,000,000
the end of each Fiscal
Quarter thereafter
(d) Maximum Consolidated Capital Expenditures. Company shall not,
and shall not permit its Subsidiaries to, make or incur Consolidated Capital
Expenditures, in any Fiscal Year indicated below, in an aggregate amount for
Company and its Subsidiaries in excess of the corresponding amount set forth
below opposite such Fiscal Year:
CONSOLIDATED
FISCAL YEAR ENDING CAPITAL EXPENDITURES
------------------ --------------------
July 31, 2006 $7,500,000
July 31, 2007 $7,500,000
July 31, 2008 $6,900,000
July 31, 2009 $6,100,000
July 31, 2010 $4,800,000
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CONSOLIDATED
FISCAL YEAR ENDING CAPITAL EXPENDITURES
------------------ --------------------
July 31, 2011 $3,200,000
(e) Minimum Average Net Bookings. Company shall not permit its
Average Net Bookings determined as at the end of any Fiscal Quarter, beginning
with the Fiscal Quarter ending April 30, 2006, to be less than $80,000.
(f) Certain Calculations. With respect to any period during which
an Asset Sale has occurred (each, a "SUBJECT TRANSACTION"), for purposes of
determining compliance with the financial covenants set forth in this Section
6.8, Consolidated Adjusted EBITDA and the components of Consolidated Fixed
Charges shall be calculated with respect to such period on a pro forma basis
(including pro forma adjustments approved by Administrative Agent in its sole
discretion) using the historical audited financial statements of any business so
acquired or to be acquired or sold or to be sold and the consolidated financial
statements of Company and its Subsidiaries which shall be reformulated as if
such Subject Transaction, and any Indebtedness incurred or repaid in connection
therewith, had been consummated or incurred or repaid at the beginning of such
period (and assuming that such Indebtedness bears interest during any portion of
the applicable measurement period prior to the relevant acquisition at the
weighted average of the interest rates applicable to outstanding Loans incurred
during such period).
6.9 FUNDAMENTAL CHANGES; DISPOSITION OF ASSETS; ACQUISITIONS. No Credit Party
shall, nor shall it permit any of its Subsidiaries to, enter into any
transaction of merger or consolidation, or liquidate, wind up or dissolve itself
(or suffer any liquidation or dissolution), or convey, sell, lease or sub lease
(as lessor or sublessor), exchange, transfer or otherwise dispose of, in one
transaction or a series of transactions, all or any part of its business, assets
or property of any kind whatsoever, whether real, personal or mixed and whether
tangible or intangible, whether now owned or hereafter acquired, or acquired by
purchase or otherwise (other than purchases or other acquisitions of inventory,
materials and equipment and Capital Expenditures in the ordinary course of
business) the business, property or fixed assets of, or stock or other evidence
of beneficial ownership of, any Person or any division or line of business or
other business unit of any Person, except:
(a) any Subsidiary of Company may be merged with or into Company
or any Guarantor, or be liquidated, wound up or dissolved, or all or any part of
its business, property or assets may be conveyed, sold, leased, transferred or
otherwise disposed of, in one transaction or a series of transactions, to
Company or any Guarantor; provided, in the case of such a merger, Company or
such Guarantor, as applicable shall be the continuing or surviving Person;
(b) sales or other dispositions of assets (i) that do not
constitute Asset Sales or (ii) made to Company or any Guarantor Subsidiary;
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(c) Asset Sales, the proceeds of which (i) are less than $150,000
with respect to any single Asset Sale or series of related Asset Sales, and (ii)
when aggregated with the proceeds of all other Asset Sales made within the same
Fiscal Year, are less than $250,000; provided (1) the consideration received for
such assets shall be in an amount at least equal to the fair market value
thereof (determined in good faith by the board of directors of Company (or
similar governing body)), (2) no less than 100% thereof shall be paid in Cash,
and (3) the Net Asset Sale Proceeds thereof shall be applied as required by
Section 2.13(a);
(d) disposals of obsolete or worn out property; and
(e) Investments made in accordance with Section 6.7.
6.10 DISPOSAL OF SUBSIDIARY INTERESTS. Except for any sale of all of its
interests in the Capital Stock of any of its Subsidiaries in compliance with the
provisions of Section 6.9, no Credit Party shall, nor shall it permit any of its
Subsidiaries to, (a) directly or indirectly sell, assign, pledge or otherwise
encumber or dispose of any Capital Stock of any of its Subsidiaries, except to
qualify directors if required by applicable law; or (b) directly or indirectly
to sell, assign, pledge or otherwise encumber or dispose of any Capital Stock of
any of its Subsidiaries, except to another Credit Party (subject to the
restrictions on such disposition otherwise imposed hereunder), or to qualify
directors if required by applicable law.
6.11 SALES AND LEASE BACKS. No Credit Party shall, nor shall it permit any of
its Subsidiaries to, directly or indirectly, become or remain liable as lessee
or as a guarantor or other surety with respect to any lease of any property
(whether real, personal or mixed), whether now owned or hereafter acquired,
which such Credit Party (a) has sold or transferred or is to sell or to transfer
to any other Person (other than Company or any of its Subsidiaries), or (b)
intends to use for substantially the same purpose as any other property which
has been or is to be sold or transferred by such Credit Party to any Person
(other than Company or any of its Subsidiaries) in connection with such lease.
6.12 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES. No Credit Party shall, nor
shall it permit any of its Subsidiaries to, directly or indirectly, enter into
or permit to exist any transaction (including the purchase, sale, lease or
exchange of any property or the rendering of any service) with any holder of 5%
or more of any class of Capital Stock of Company or any of its Subsidiaries or
with any Affiliate of Company or of any such holder, except in the ordinary
course of business and on terms that are less favorable to Company or that
Subsidiary, as the case may be, than those that might be obtained at the time
from a Person who is not such a holder or Affiliate; provided, the foregoing
restriction shall not apply to (a) any transaction between Company and any
Guarantor; (b) reasonable and customary fees paid to members of the board of
directors (or similar governing body) of Company and its Subsidiaries; (c)
compensation arrangements for officers and other employees of Company and its
Subsidiaries entered into in the ordinary course of business; and (d)
transactions described in Schedule 6.12; Company shall disclose in writing each
transaction with any holder of 5% or more of any class of Capital
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Stock of Company or any of its Subsidiaries or with any Affiliate of Company or
of any such holder to Administrative Agent.
6.13 CONDUCT OF BUSINESS. From and after the Closing Date, no Credit Party
shall, nor shall it permit any of its Subsidiaries to, engage in any business
other than (i) the businesses engaged in by such Credit Party on the Closing
Date, and (ii) such other lines of business as may be consented to by
Administrative Agent and Requisite Lenders.
6.14 PERMITTED ACTIVITIES OF COMPANY. Company shall not fail to hold itself out
to the public as a legal entity separate and distinct from all other Persons.
6.15 SEVERANCE AND BENEFIT PLANS. No Credit Party may amend or modify its
employee severance plans from those set forth as Exhibit M hereto without the
prior written consent of the Requisite Lenders. No Credit Party may pay or
provide any severance benefits to employees that are party to separation
agreements with a Credit Party on the Closing Date in excess of those summarized
on a schedule delivered to Administrative Agent on the Closing Date, nor may
they pay or provide any severance benefits to other employees other than in
conformity with the employee severance plans identified on Exhibit M. No Credit
Party may issue employee stock compensation other than in accordance with the
stock incentive plan set forth on Exhibit N hereto (as the same may be amended
with the written consent of the Required Lenders).
6.16 AMENDMENTS OR WAIVERS OF WITH RESPECT TO SUBORDINATED INDEBTEDNESS. No
Credit Party shall, nor shall it permit any of its Subsidiaries to, amend or
otherwise change the terms of any Subordinated Indebtedness, or make any payment
under or with respect thereto that is not permitted under the terms of the
Subordination Agreement.
6.17 FISCAL YEAR. No Credit Party shall, nor shall it permit any of its
Subsidiaries to change its Fiscal Year end from July 31.
6.18 DEPOSIT ACCOUNTS. No Credit Party shall establish or maintain a Deposit
Account that is not a Blocked Account and no Credit Party will deposit proceeds
in a Deposit Account which is not a Blocked Account.
6.19 AMENDMENTS TO ORGANIZATIONAL AGREEMENTS AND MATERIAL CONTRACTS. No Credit
Party shall (a) amend or permit any amendments to any Credit Party's
Organizational Documents; or (b) amend or permit any amendments to, or terminate
or waive any provision of, any Material Contract if such amendment, termination,
or waiver would be adverse to Administrative Agent or the Lenders.
6.20 PREPAYMENTS OF CERTAIN INDEBTEDNESS. No Credit Party shall, directly or
indirectly, voluntarily purchase, redeem, defease or prepay any principal of,
premium, if any, interest or other amount payable in respect of any Indebtedness
prior to its scheduled maturity, other than (i) the Obligations, (ii)
Indebtedness secured by a Permitted Liens if the asset securing such
Indebtedness has been sold or otherwise disposed of in accordance with Section
6.9, (iii) repayment of amounts owing under the under those two unsecured
promissory notes dated June 13, 2002 issued by ClearBlue Technologies
Management, Inc. ("CBTM") to Applied Theory Corporation in an aggregate
principal
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amount of $6,000,000 with Term Loan proceeds deposited in the account subject to
the Escrow Agreement provided, that (A) no Default or Event of Default shall
have occurred and be continuing or shall result therefrom and (B) (1) such Term
Loan proceeds are loaned by Company to CBTM, (2) CBTM shall have executed and
delivered a promissory note to Company (in form and substance satisfactory to
Administrative Agent) to evidence such loan and (3) the original of such note
shall have been pledged and delivered by Company to Administrative Agent
(together with any necessary endorsement) under the Pledge and Security
Agreement and (iv) prepayments of amounts outstanding under the Atlantic
Existing Credit Facility permitted under the Subordination Agreement or made
with proceeds of Additional Loans.
SECTION 7. GUARANTY
7.1 GUARANTY OF THE OBLIGATIONS. Subject to the provisions of Section 7.2,
Guarantors jointly and severally hereby irrevocably and unconditionally guaranty
to Administrative Agent for the ratable benefit of the Beneficiaries the due and
punctual payment in full of all Obligations when the same shall become due,
whether at stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise (including amounts that would become due but for the
operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11
U.S.C. Section 362(a)) (collectively, the "GUARANTEED OBLIGATIONS").
7.2 CONTRIBUTION BY GUARANTORS. All Guarantors desire to allocate among
themselves (collectively, the "CONTRIBUTING GUARANTORS"), in a fair and
equitable manner, their obligations arising under this Guaranty. Accordingly, in
the event any payment or distribution is made on any date by a Guarantor (a
"FUNDING GUARANTOR") under this Guaranty such that its Aggregate Payments
exceeds its Fair Share as of such date, such Funding Guarantor shall be entitled
to a contribution from each of the other Contributing Guarantors in an amount
sufficient to cause each Contributing Guarantor's Aggregate Payments to equal
its Fair Share as of such date. "FAIR SHARE" means, with respect to a
Contributing Guarantor as of any date of determination, an amount equal to (a)
the ratio of (i) the Fair Share Contribution Amount with respect to such
Contributing Guarantor, to (ii) the aggregate of the Fair Share Contribution
Amounts with respect to all Contributing Guarantors multiplied by, (b) the
aggregate amount paid or distributed on or before such date by all Funding
Guarantors under this Guaranty in respect of the obligations Guaranteed. "FAIR
SHARE CONTRIBUTION AMOUNT" means, with respect to a Contributing Guarantor as of
any date of determination, the maximum aggregate amount of the obligations of
such Contributing Guarantor under this Guaranty that would not render its
obligations hereunder or thereunder subject to avoidance as a fraudulent
transfer or conveyance under Section 548 of Title 11 of the United States Code
or any comparable applicable provisions of state law; provided, solely for
purposes of calculating the "FAIR SHARE CONTRIBUTION AMOUNT" with respect to any
Contributing Guarantor for purposes of this Section 7.2, any assets or
liabilities of such Contributing Guarantor arising by virtue of any rights to
subrogation, reimbursement or indemnification or any rights to or obligations of
contribution hereunder shall not be considered as assets or liabilities of such
Contributing Guarantor. "AGGREGATE PAYMENTS" means, with respect to a
Contributing Guarantor as of any date of
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determination, an amount equal to (1) the aggregate amount of all payments and
distributions made on or before such date by such Contributing Guarantor in
respect of this Guaranty (including, without limitation, in respect of this
Section 7.2), minus (2) the aggregate amount of all payments received on or
before such date by such Contributing Guarantor from the other Contributing
Guarantors as contributions under this Section 7.2. The amounts payable as
contributions hereunder shall be determined as of the date on which the related
payment or distribution is made by the applicable Funding Guarantor. The
allocation among Contributing Guarantors of their obligations as set forth in
this Section 7.2 shall not be construed in any way to limit the liability of any
Contributing Guarantor hereunder. Each Guarantor is a third party beneficiary to
the contribution agreement set forth in this Section 7.2.
7.3 PAYMENT BY GUARANTORS. Subject to Section 7.2, Guarantors hereby jointly and
severally agree, in furtherance of the foregoing and not in limitation of any
other right which any Beneficiary may have at law or in equity against any
Guarantor by virtue hereof, that upon the failure of Company to pay any of the
Guaranteed Obligations when and as the same shall become due, whether at stated
maturity, by required prepayment, declaration, acceleration, demand or otherwise
(including amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a)),
Guarantors will upon demand pay, or cause to be paid, in Cash, to Administrative
Agent for the ratable benefit of Beneficiaries, an amount equal to the sum of
the unpaid principal amount of all Guaranteed Obligations then due as aforesaid,
accrued and unpaid interest on such Guaranteed Obligations (including interest
which, but for Company's becoming the subject of a case under the Bankruptcy
Code, would have accrued on such Guaranteed Obligations, whether or not a claim
is allowed against Company for such interest in the related bankruptcy case) and
all other Guaranteed Obligations then owed to Beneficiaries as aforesaid.
7.4 LIABILITY OF GUARANTORS ABSOLUTE. Each Guarantor agrees that its obligations
hereunder are irrevocable, absolute, independent and unconditional and shall not
be affected by any circumstance which constitutes a legal or equitable discharge
of a guarantor or surety other than payment in full of the Guaranteed
Obligations. In furtherance of the foregoing and without limiting the generality
thereof, each Guarantor agrees as follows:
(a) this Guaranty is a guaranty of payment when due and not of
collectability. This Guaranty is a primary obligation of each Guarantor and not
merely a contract of surety;
(b) Administrative Agent may enforce this Guaranty upon the
occurrence of an Event of Default notwithstanding the existence of any dispute
between Company and any Beneficiary with respect to the existence of such Event
of Default;
(c) the obligations of each Guarantor hereunder are independent
of the obligations of Company and the obligations of any other guarantor
(including any other Guarantor) of the obligations of Company, and a separate
action or actions may be brought and prosecuted against such Guarantor whether
or not any action is brought
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against Company or any of such other guarantors and whether or not Company is
joined in any such action or actions;
(d) payment by any Guarantor of a portion, but not all, of the
Guaranteed Obligations shall in no way limit, affect, modify or abridge any
Guarantor's liability for any portion of the Guaranteed Obligations which has
not been paid. Without limiting the generality of the foregoing, if
Administrative Agent is awarded a judgment in any suit brought to enforce any
Guarantor's covenant to pay a portion of the Guaranteed Obligations, such
judgment shall not be deemed to release such Guarantor from its covenant to pay
the portion of the Guaranteed Obligations that is not the subject of such suit,
and such judgment shall not, except to the extent satisfied by such Guarantor,
limit, affect, modify or abridge any other Guarantor's liability hereunder in
respect of the Guaranteed Obligations;
(e) any Beneficiary, upon such terms as it deems appropriate,
without notice or demand and without affecting the validity or enforceability
hereof or giving rise to any reduction, limitation, impairment, discharge or
termination of any Guarantor's liability hereunder, from time to time may (i)
renew, extend, accelerate, increase the rate of interest on, or otherwise change
the time, place, manner or terms of payment of the Guaranteed Obligations; (ii)
settle, compromise, release or discharge, or accept or refuse any offer of
performance with respect to, or substitutions for, the Guaranteed Obligations or
any agreement relating thereto and/or subordinate the payment of the same to the
payment of any other obligations; (iii) request and accept other guaranties of
the Guaranteed Obligations and take and hold security for the payment hereof or
the Guaranteed Obligations; (iv) release, surrender, exchange, substitute,
compromise, settle, rescind, waive, alter, subordinate or modify, with or
without consideration, any security for payment of the Guaranteed Obligations,
any other guaranties of the Guaranteed Obligations, or any other obligation of
any Person (including any other Guarantor) with respect to the Guaranteed
Obligations; (v) enforce and apply any security now or hereafter held by or for
the benefit of such Beneficiary in respect hereof or the Guaranteed Obligations
and direct the order or manner of sale thereof, or exercise any other right or
remedy that such Beneficiary may have against any such security, in each case as
such Beneficiary in its discretion may determine consistent herewith or any
applicable security agreement, including foreclosure on any such security
pursuant to one or more judicial or nonjudicial sales, whether or not every
aspect of any such sale is commercially reasonable, and even though such action
operates to impair or extinguish any right of reimbursement or subrogation or
other right or remedy of any Guarantor against Company or any security for the
Guaranteed Obligations; and (vi) exercise any other rights available to it under
the Credit Documents; and
(f) this Guaranty and the obligations of Guarantors hereunder
shall be valid and enforceable and shall not be subject to any reduction,
limitation, impairment, discharge or termination for any reason (other than
payment in full of the Guaranteed Obligations), including the occurrence of any
of the following, whether or not any Guarantor shall have had notice or
knowledge of any of them: (i) any failure or omission to assert or enforce or
agreement or election not to assert or enforce, or the stay or enjoining, by
order of court, by operation of law or otherwise, of the exercise or
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enforcement of, any claim or demand or any right, power or remedy (whether
arising under the Credit Documents, at law, in equity or otherwise) with respect
to the Guaranteed Obligations or any agreement relating thereto, or with respect
to any other guaranty of or security for the payment of the Guaranteed
Obligations; (ii) any rescission, waiver, amendment or modification of, or any
consent to departure from, any of the terms or provisions (including provisions
relating to events of default) hereof, any of the other Credit Documents or any
agreement or instrument executed pursuant thereto, or of any other guaranty or
security for the Guaranteed Obligations, in each case whether or not in
accordance with the terms hereof or such Credit Document or any agreement
relating to such other guaranty or security; (iii) the Guaranteed Obligations,
or any agreement relating thereto, at any time being found to be illegal,
invalid or unenforceable in any respect; (iv) the application of payments
received from any source (other than payments received pursuant to the other
Credit Documents or from the proceeds of any security for the Guaranteed
Obligations, except to the extent such security also serves as collateral for
indebtedness other than the Guaranteed Obligations) to the payment of
indebtedness other than the Guaranteed Obligations, even though any Beneficiary
might have elected to apply such payment to any part or all of the Guaranteed
Obligations; (v) any Beneficiary's consent to the change, reorganization or
termination of the corporate structure or existence of Company or any of its
Subsidiaries and to any corresponding restructuring of the Guaranteed
Obligations; (vi) any failure to perfect or continue perfection of a security
interest in any collateral which secures any of the Guaranteed Obligations;
(vii) any defenses, set offs or counterclaims which Company may allege or assert
against any Beneficiary in respect of the Guaranteed Obligations, including
failure of consideration, breach of warranty, payment, statute of frauds,
statute of limitations, accord and satisfaction and usury; and (viii) any other
act or thing or omission, or delay to do any other act or thing, which may or
might in any manner or to any extent vary the risk of any Guarantor as an
obligor in respect of the Guaranteed Obligations.
7.5 WAIVERS BY GUARANTORS. Each Guarantor hereby waives, for the benefit of
Beneficiaries: (a) any right to require any Beneficiary, as a condition of
payment or performance by such Guarantor, to (i) proceed against Company, any
other guarantor (including any other Guarantor) of the Guaranteed Obligations or
any other Person, (ii) proceed against or exhaust any security held from
Company, any such other guarantor or any other Person, (iii) proceed against or
have resort to any balance of any Deposit Account or credit on the books of any
Beneficiary in favor of Company or any other Person, or (iv) pursue any other
remedy in the power of any Beneficiary whatsoever; (b) any defense arising by
reason of the incapacity, lack of authority or any disability or other defense
of Company or any other Guarantor including any defense based on or arising out
of the lack of validity or the unenforceability of the Guaranteed Obligations or
any agreement or instrument relating thereto or by reason of the cessation of
the liability of Company or any other Guarantor from any cause other than
payment in full of the Guaranteed Obligations; (c) any defense based upon any
statute or rule of law which provides that the obligation of a surety must be
neither larger in amount nor in other respects more burdensome than that of the
principal; (d) any defense based upon any Beneficiary's errors or omissions in
the administration of the Guaranteed Obligations, except behavior which amounts
to bad faith; (e) (i) any principles or provisions of law, statutory or
otherwise, which are or might be in conflict with the terms hereof and any
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legal or equitable discharge of such Guarantor's obligations hereunder, (ii) the
benefit of any statute of limitations affecting such Guarantor's liability
hereunder or the enforcement hereof, (iii) any rights to set offs, recoupments
and counterclaims, and (iv) promptness, diligence and any requirement that any
Beneficiary protect, secure, perfect or insure any security interest or lien or
any property subject thereto; (f) notices, demands, presentments, protests,
notices of protest, notices of dishonor and notices of any action or inaction,
including acceptance hereof, notices of default hereunder, notices of any
renewal, extension or modification of the Guaranteed Obligations or any
agreement related thereto, notices of any extension of credit to Company and
notices of any of the matters referred to in Section 7.4 and any right to
consent to any thereof; and (g) any defenses or benefits that may be derived
from or afforded by law which limit the liability of or exonerate guarantors or
sureties, or which may conflict with the terms hereof.
7.6 GUARANTORS' RIGHTS OF SUBROGATION, CONTRIBUTION, ETC. Until the Guaranteed
Obligations shall have been indefeasibly paid in full and the Revolving
Commitments shall have terminated, each Guarantor hereby waives any claim, right
or remedy, direct or indirect, that such Guarantor now has or may hereafter have
against Company or any other Guarantor or any of its assets in connection with
this Guaranty or the performance by such Guarantor of its obligations hereunder,
in each case whether such claim, right or remedy arises in equity, under
contract, by statute, under common law or otherwise and including without
limitation (a) any right of subrogation, reimbursement or indemnification that
such Guarantor now has or may hereafter have against Company with respect to the
Guaranteed Obligations, (b) any right to enforce, or to participate in, any
claim, right or remedy that any Beneficiary now has or may hereafter have
against Company, and (c) any benefit of, and any right to participate in, any
collateral or security now or hereafter held by any Beneficiary. In addition,
until the Guaranteed Obligations shall have been indefeasibly paid in full and
the Revolving Commitments shall have terminated, each Guarantor shall withhold
exercise of any right of contribution such Guarantor may have against any other
guarantor (including any other Guarantor) of the Guaranteed Obligations,
including, without limitation, any such right of contribution as contemplated by
Section 7.2. Each Guarantor further agrees that, to the extent the waiver or
agreement to withhold the exercise of its rights of subrogation, reimbursement,
indemnification and contribution as set forth herein is found by a court of
competent jurisdiction to be void or voidable for any reason, any rights of
subrogation, reimbursement or indemnification such Guarantor may have against
Company or against any collateral or security, and any rights of contribution
such Guarantor may have against any such other guarantor, shall be junior and
subordinate to any rights any Beneficiary may have against Company, to all
right, title and interest any Beneficiary may have in any such collateral or
security, and to any right any Beneficiary may have against such other
guarantor. If any amount shall be paid to any Guarantor on account of any such
subrogation, reimbursement, indemnification or contribution rights at any time
when all Guaranteed Obligations shall not have been finally and indefeasibly
paid in full, such amount shall be held in trust for Administrative Agent on
behalf of Beneficiaries and shall forthwith be paid over to Administrative Agent
for the benefit of Beneficiaries to be credited and applied against the
Guaranteed Obligations, whether matured or unmatured, in accordance with the
terms hereof.
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7.7 SUBORDINATION OF OTHER OBLIGATIONS. Any Indebtedness of Company or any
Guarantor now or hereafter held by any Guarantor (the "OBLIGEE GUARANTOR") is
hereby subordinated in right of payment to the Guaranteed Obligations, and any
such indebtedness collected or received by the Obligee Guarantor after an Event
of Default has occurred and is continuing shall be held in trust for
Administrative Agent on behalf of Beneficiaries and shall forthwith be paid over
to Administrative Agent for the benefit of Beneficiaries to be credited and
applied against the Guaranteed Obligations but without affecting, impairing or
limiting in any manner the liability of the Obligee Guarantor under any other
provision hereof.
7.8 CONTINUING GUARANTY. This Guaranty is a continuing guaranty and shall remain
in effect until all of the Guaranteed Obligations shall have been indefeasibly
paid in full and the Revolving Commitments shall have terminated. Each Guarantor
hereby irrevocably waives any right to revoke this Guaranty as to future
transactions giving rise to any Guaranteed Obligations.
7.9 AUTHORITY OF GUARANTORS OR COMPANY. It is not necessary for any Beneficiary
to inquire into the capacity or powers of any Guarantor or Company or the
officers, directors or any agents acting or purporting to act on behalf of any
of them.
7.10 FINANCIAL CONDITION OF COMPANY. Any Credit Extension may be made to Company
or continued from time to time, in each case without notice to or authorization
from any Guarantor regardless of the financial or other condition of Company at
the time of any such grant or continuation. No Beneficiary shall have any
obligation to disclose or discuss with any Guarantor its assessment, or any
Guarantor's assessment, of the financial condition of Company. Each Guarantor
has adequate means to obtain information from Company on a continuing basis
concerning the financial condition of Company and its ability to perform its
obligations under the Credit Documents, and each Guarantor assumes the
responsibility for being and keeping informed of the financial condition of
Company and of all circumstances bearing upon the risk of nonpayment of the
Guaranteed Obligations. Each Guarantor hereby waives and relinquishes any duty
on the part of any Beneficiary to disclose any matter, fact or thing relating to
the business, operations or conditions of Company now known or hereafter known
by any Beneficiary.
7.11 BANKRUPTCY, ETC.
(a) So long as any Guaranteed Obligations remain outstanding, no
Guarantor shall, without the prior written consent of Administrative Agent
acting pursuant to the instructions of Requisite Lenders, commence or join with
any other Person in commencing any bankruptcy, reorganization or insolvency case
or proceeding of or against Company or any other Guarantor. The obligations of
Guarantors hereunder shall not be reduced, limited, impaired, discharged,
deferred, suspended or terminated by any case or proceeding, voluntary or
involuntary, involving the bankruptcy, insolvency, receivership, reorganization,
liquidation or arrangement of Company or any other Guarantor or by any defense
which Company or any other Guarantor may have by reason of the order, decree or
decision of any court or administrative body resulting from any such proceeding.
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(b) Each Guarantor acknowledges and agrees that any interest on
any portion of the Guaranteed Obligations which accrues after the commencement
of any case or proceeding referred to in clause (a) above (or, if interest on
any portion of the Guaranteed Obligations ceases to accrue by operation of law
by reason of the commencement of such case or proceeding, such interest as would
have accrued on such portion of the Guaranteed Obligations if such case or
proceeding had not been commenced) shall be included in the Guaranteed
Obligations because it is the intention of Guarantors and Beneficiaries that the
Guaranteed Obligations which are guaranteed by Guarantors pursuant hereto should
be determined without regard to any rule of law or order which may relieve
Company of any portion of such Guaranteed Obligations. Guarantors will permit
any trustee in bankruptcy, receiver, debtor in possession, assignee for the
benefit of creditors or similar Person to pay Administrative Agent, or allow the
claim of Administrative Agent in respect of, any such interest accruing after
the date on which such case or proceeding is commenced.
(c) In the event that all or any portion of the Guaranteed
Obligations are paid by Company, the obligations of Guarantors hereunder shall
continue and remain in full force and effect or be reinstated, as the case may
be, in the event that all or any part of such payment(s) are rescinded or
recovered directly or indirectly from any Beneficiary as a preference,
fraudulent transfer or otherwise, and any such payments which are so rescinded
or recovered shall constitute Guaranteed Obligations for all purposes hereunder.
7.12 DISCHARGE OF GUARANTY UPON SALE OF GUARANTOR. If all of the Capital Stock
of any Guarantor or any of its successors in interest hereunder shall be sold or
otherwise disposed of (including by merger or consolidation) in accordance with
the terms and conditions hereof, the Guaranty of such Guarantor or such
successor in interest, as the case may be, hereunder shall automatically be
discharged and released without any further action by any Beneficiary or any
other Person effective as of the time of such Asset Sale.
7.13 TAXES. The provisions of Section 2.19 shall apply, mutatis mutandi, to the
Guarantors and payments thereby.
SECTION 8. EVENTS OF DEFAULT
8.1 EVENTS OF DEFAULT. If any one or more of the following conditions or events
shall occur:
(a) Failure to Make Payments When Due. Failure by Company to pay
(i) the principal of and premium, if any, on any Loan (other than any Excess
Cash Flow payment) whether at stated maturity, by acceleration or otherwise;
(ii) when due any installment of principal of any Loan, by notice of voluntary
prepayment, by mandatory prepayment or otherwise; or (iii) when due any interest
on any Loan or any fee or any other amount due hereunder and, in the case of any
payment described in clauses (ii) or (iii) above, such failure shall continue
for three (3) Business Days; or
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(b) Default in Other Agreements. (i) failure of any Credit Party
or any of their respective Subsidiaries to pay when due any principal of or
interest on or any other amount payable in respect of one or more other items of
Indebtedness (other than Indebtedness referred to in Section 8.1(a)) in an
individual principal amount of $250,000 or more in the aggregate beyond the
grace period, if any, provided therefor; or (ii) breach or default by any Credit
Party with respect to any other material term of (1) one or more items of
Indebtedness referred to in clause (i) hereof in the individual or aggregate
principal amounts referred to in clause (i) above, or (2) any loan agreement,
mortgage, indenture or other agreement relating to such item(s) of Indebtedness,
in each case beyond the grace period, if any, provided therefor, if the effect
of such breach or default is to cause, or to permit the holder or holders of
that Indebtedness (or a trustee on behalf of such holder or holders), to cause,
that Indebtedness to become or be declared due and payable (or subject to a
compulsory repurchase or redeemable) prior to its stated maturity or the stated
maturity of any underlying obligation, as the case may be or (iii) any Credit
Party shall receive any notice of default with respect to the lease on the data
center located at 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx relating to rent in
arrearages on the Closing Date or any other writing indicating that the landlord
that owns such premises or its mortgagor intends to exercise any rights in
connection with such arrearages; or
(c) Breach of Certain Covenants. Failure of any Credit Party to
perform or comply with any term or condition contained in Section 2.5, Section
5.1, Section 5.2, Section 5.15 or Section 6; or
(d) Breach of Representations, etc. Any representation, warranty,
certification or other statement made or deemed made by any Credit Party in any
Credit Document or in any statement or certificate at any time given by any
Credit Party or any of its Subsidiaries in writing pursuant hereto or thereto or
in connection herewith or therewith shall be false in any material respect as of
the date made or deemed made; or
(e) Other Defaults Under Credit Documents, etc. Any Credit Party
shall default in the performance of or compliance with any term contained herein
or any of the other Credit Documents, other than any such term referred to in
any other Section of this Section 8.1, and such default shall not have been
remedied or waived within thirty (30) days after the earlier of (i) an officer
of such Credit Party becoming aware of such default, or (ii) receipt by Company
of notice from Administrative Agent or any Lender of such default; or Atlantic
or Atlantic Related Entity shall default in the performance of or compliance
with any term contained in any of the Atlantic Debt Documents, the Subordination
Agreement or Atlantic Fund Guaranty; or
(f) Involuntary Bankruptcy; Appointment of Receiver, etc. (i) A
court of competent jurisdiction shall enter a decree or order for relief in
respect of Company or any of its Subsidiaries (or, at any time the Atlantic or
Atlantic Related Entity has any continuing obligations under the Atlantic
Existing Credit Facility, the Atlantic Fund Guaranty, the Atlantic Pledge, the
Atlantic Side Letter or the Atlantic Term Loan Agreement (the "ATLANTIC
DOCUMENTS"), Atlantic or Atlantic Related Entity) in an
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involuntary case under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, which decree
or order is not stayed; or any other similar relief shall be granted under any
applicable federal or state law; or (ii) an involuntary case shall be commenced
against Company or any of its Subsidiaries (or, at any time the Atlantic or
Atlantic Related Entity has any continuing obligations under any Atlantic
Documents, Atlantic or Atlantic Related Entity) under the Bankruptcy Code or
under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect; or a decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, sequestrator, trustee,
custodian or other officer having similar powers over Company or any of its
Subsidiaries (or, at any time the Atlantic or Atlantic Related Entity has any
continuing obligations under any Atlantic Documents, Atlantic or Atlantic
Related Entity), or over all or a substantial part of its property, shall have
been entered; or there shall have occurred the involuntary appointment of an
interim receiver, trustee or other custodian of Company or any of its
Subsidiaries (or, at any time the Atlantic or Atlantic Related Entity has any
continuing obligations under any Atlantic Documents, Atlantic or Atlantic
Related Entity) for all or a substantial part of its property; or a warrant of
attachment, execution or similar process shall have been issued against any
substantial part of the property of Company or any of its Subsidiaries (or, at
any time the Atlantic or Atlantic Related Entity has any continuing obligations
under any Atlantic Documents, Atlantic or Atlantic Related Entity), and any such
event described in this clause (ii) shall continue for sixty (60) days without
having been dismissed, bonded or discharged; or
(g) Voluntary Bankruptcy; Appointment of Receiver, etc. (i)
Company or any of its Subsidiaries (or, at any time the Atlantic or Atlantic
Related Entity has any continuing obligations under any Atlantic Documents,
Atlantic or Atlantic Related Entity) shall have an order for relief entered with
respect to it or shall commence a voluntary case under the Bankruptcy Code or
under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, or shall consent to the entry of an order for relief in an
involuntary case, or to the conversion of an involuntary case to a voluntary
case, under any such law, or shall consent to the appointment of or taking
possession by a receiver, trustee or other custodian for all or a substantial
part of its property; or Company or any of its Subsidiaries (or, at any time the
Atlantic or Atlantic Related Entity has any continuing obligations under any
Atlantic Documents, Atlantic or Atlantic Related Entity) shall make any
assignment for the benefit of creditors; or (ii) Company or any of its
Subsidiaries (or, at any time the Atlantic or Atlantic Related Entity has any
continuing obligations under any Atlantic Documents, Atlantic or Atlantic
Related Entity) shall be unable, or shall fail generally, or shall admit in
writing its inability, to pay its debts as such debts become due; or the board
of directors (or similar governing body) of Company or any of its Subsidiaries
(or, at any time the Atlantic or Atlantic Related Entity has any continuing
obligations under any Atlantic Documents, Atlantic or Atlantic Related Entity)
(or any committee thereof) shall adopt any resolution or otherwise authorize any
action to approve any of the actions referred to herein or in Section 8.1(f); or
(h) Judgments and Attachments. (i) Any money judgment, writ or
warrant of attachment or similar process involving (A) in any individual case an
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amount in excess of $200,000 or more, in the aggregate (in either case to the
extent not adequately covered by insurance as to which a solvent and
unaffiliated insurance company has acknowledged coverage) shall be entered or
filed against Company or any of its Subsidiaries or any of their respective
assets and shall remain undischarged, unvacated, unbonded or unstayed for a
period of sixty (60) days (or in any event later than five days prior to the
date of any proposed sale thereunder); or (ii) any non-monetary judgment shall
be entered or filed against Company or any of its Subsidiaries or any of their
respective assets which has had, or could reasonably be expected to have, a
Material Adverse Effect; or
(i) Dissolution. Any order, judgment or decree shall be entered
against any Credit Party decreeing the dissolution or split up of such Credit
Party and such order shall remain undischarged or unstayed for a period in
excess of thirty (30) days; or
(j) Employee Benefit Plans. (i) There shall occur one or more
ERISA Events which individually or in the aggregate results in or might
reasonably be expected to result in liability of Company, any of its
Subsidiaries or any of their respective ERISA Affiliates in excess of $100,000
during the term hereof; or (ii) there exists any fact or circumstance that
reasonably could be expected to result in the imposition of a Lien or security
interest under Section 401(a)(29) or 412(n) of the Internal Revenue Code or
under ERISA; or
(k) Change of Control. A Change of Control shall occur; or
(l) Guaranties, Collateral Documents, other Credit Documents,
etc. At any time after the execution and delivery thereof, (i) the Guaranty for
any reason, other than the satisfaction in full of all Obligations, shall cease
to be in full force and effect (other than in accordance with its terms) or
shall be declared to be null and void or any Guarantor shall repudiate its
obligations thereunder, (ii) this Agreement, the Escrow Agreement or any
Collateral Document ceases to be in full force and effect (other than by reason
of a release of Collateral in accordance with the terms hereof or thereof or the
satisfaction in full of the Obligations in accordance with the terms hereof) or
shall be declared null and void, or Collateral Agent shall not have or shall
cease to have a valid and perfected Lien in any Collateral purported to be
covered by the Collateral Documents with the priority required by the relevant
Collateral Document, in each case for any reason other than the failure of
Collateral Agent or any Secured Party to take any action within its control,
(iii) any of the Atlantic Debt Documents, the Subordination Agreement or
Atlantic Fund Guaranty ceases to be in full force and effect or shall be
declared null and void, (iv) any Credit Party shall contest the validity or
enforceability of any Credit Document in writing or deny in writing that it has
any further liability, including with respect to future advances by Lenders,
under any Credit Document to which it is a party, (v) Atlantic, Atlantic Related
Entity or any Credit Party shall contest the validity or enforceability of any
of the Atlantic Debt Documents, the Subordination Agreement or Atlantic Fund
Guaranty in writing or deny in writing that it has any further liability,
including with respect to future advances under the Atlantic Debt Documents,
thereunder, or (vi) the Loans shall cease to constitute first priority secured
Indebtedness under the
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intercreditor provisions of the Subordination Agreement or, in any case, such
subordination provisions shall be invalidated or otherwise cease to be legal,
valid and binding obligations of the parties thereto, enforceable in accordance
with their terms;
THEN, (1) upon the occurrence of any Event of Default described in Section
8.1(f) or 8.1(g), automatically, and (2) upon the occurrence and continuance of
any other Event of Default, Administrative Agent may (and at the request of
Requisite Lenders shall), upon notice to Company by Administrative Agent, (A)
the Commitments, if any, of each Lender having such Commitments shall
immediately terminate; (B) each of the following shall immediately become due
and payable, in each case without presentment, demand, protest or other
requirements of any kind, all of which are hereby expressly waived by each
Credit Party: (I) the unpaid principal amount of and accrued interest on the
Loans and (II) all other Obligations; and (C) Administrative Agent may (and, at
the request of the Requisite Lenders, shall) cause Collateral Agent to enforce
any and all Liens and security interests created pursuant to Collateral
Documents.
SECTION 9. AGENTS
9.1 APPOINTMENT OF AGENTS. Silver Point is hereby appointed Administrative Agent
and Collateral Agent hereunder and under the other Credit Documents and each
Lender hereby authorizes Silver Point, in such capacity, to act as its agent in
accordance with the terms hereof and the other Credit Documents. Silver Point
hereby agrees to act in its capacity as such upon the express conditions
contained herein and the other Credit Documents, as applicable. The provisions
of this Section 9 are solely for the benefit of Agents and Lenders and no Credit
Party shall have any rights as a third party beneficiary of any of the
provisions thereof. In performing its functions and duties hereunder, each Agent
shall act solely as an agent of Lenders and does not assume and shall not be
deemed to have assumed any obligation towards or relationship of agency or trust
with or for Company or any of its Subsidiaries.
9.2 POWERS AND DUTIES. Each Lender irrevocably authorizes each Agent to take
such action on such Lender's behalf and to exercise such powers, rights and
remedies hereunder and under the other Credit Documents as are specifically
delegated or granted to such Agent by the terms hereof and thereof, together
with such powers, rights and remedies as are reasonably incidental thereto. Each
Agent shall have only those duties and responsibilities that are expressly
specified herein and the other Credit Documents. Each Agent may exercise such
powers, rights and remedies and perform such duties by or through its agents or
employees. No Agent shall have, by reason hereof or any of the other Credit
Documents, a fiduciary relationship in respect of any Lender; and nothing herein
or any of the other Credit Documents, expressed or implied, is intended to or
shall be so construed as to impose upon any Agent any obligations in respect
hereof or any of the other Credit Documents except as expressly set forth herein
or therein.
9.3 GENERAL IMMUNITY.
(a) No Responsibility for Certain Matters. No Agent shall be
responsible to any Lender for the execution, effectiveness, genuineness,
validity,
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enforceability, collectability or sufficiency hereof or any other Credit
Document or for any representations, warranties, recitals or statements made
herein or therein or made in any written or oral statements or in any financial
or other statements, instruments, reports or certificates or any other documents
furnished or made by any Agent to Lenders or by or on behalf of any Credit Party
to any Agent or any Lender in connection with the Credit Documents and the
transactions contemplated thereby or for the financial condition or business
affairs of any Credit Party or any other Person liable for the payment of any
Obligations, nor shall any Agent be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions, covenants
or agreements contained in any of the Credit Documents or as to the use of the
proceeds of the Loans or as to the existence or possible existence of any Event
of Default or Default or to make any disclosures with respect to the foregoing.
Anything contained herein to the contrary notwithstanding, Administrative Agent
shall not have any liability arising from confirmations of the amount of
outstanding Loans.
(b) Exculpatory Provisions. No Agent nor any of its officers,
partners, directors, employees or agents shall be liable to Lenders for any
action taken or omitted by any Agent under or in connection with any of the
Credit Documents except to the extent caused by such Agent's gross negligence or
willful misconduct. Each Agent shall be entitled to refrain from any act or the
taking of any action (including the failure to take an action) in connection
herewith or any of the other Credit Documents or from the exercise of any power,
discretion or authority vested in it hereunder or thereunder unless and until
such Agent shall have received instructions in respect thereof from Requisite
Lenders (or such other Lenders as may be required to give such instructions
under Section 10.5) and, upon receipt of such instructions from Requisite
Lenders (or such other Lenders, as the case may be), such Agent shall be
entitled to act or (where so instructed) refrain from acting, or to exercise
such power, discretion or authority, in accordance with such instructions.
Without prejudice to the generality of the foregoing, (i) each Agent shall be
entitled to rely, and shall be fully protected in relying, upon any
communication, instrument or document believed by it to be genuine and correct
and to have been signed or sent by the proper Person or Persons, and shall be
entitled to rely and shall be protected in relying on opinions and judgments of
attorneys (who may be attorneys for Company and its Subsidiaries), accountants,
experts and other professional advisors selected by it; and (ii) no Lender shall
have any right of action whatsoever against any Agent as a result of such Agent
acting or (where so instructed) refraining from acting hereunder or any of the
other Credit Documents in accordance with the instructions of Requisite Lenders
(or such other Lenders as may be required to give such instructions under
Section 10.5).
9.4 AGENTS ENTITLED TO ACT AS LENDER. The agency hereby created shall in no way
impair or affect any of the rights and powers of, or impose any duties or
obligations upon, any Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the Loans, each Agent shall have the same
rights and powers hereunder as any other Lender and may exercise the same as if
it were not performing the duties and functions delegated to it hereunder, and
the term "Lender" shall, unless the context clearly otherwise indicates, include
each Agent in its individual capacity. Any Agent and its Affiliates may accept
deposits from, lend money to, own securities of, and generally
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engage in any kind of banking, trust, financial advisory or other business with
Company or any of its Affiliates as if it were not performing the duties
specified herein, and may accept fees and other consideration from Company for
services in connection herewith and otherwise without having to account for the
same to Lenders.
9.5 LENDERS' REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGMENT.
(a) Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Company and
its Subsidiaries in connection with Credit Extensions hereunder and that it has
made and shall continue to make its own appraisal of the creditworthiness of
Company and its Subsidiaries. No Agent shall have any duty or responsibility,
either initially or on a continuing basis, to make any such investigation or any
such appraisal on behalf of Lenders or to provide any Lender with any credit or
other information with respect thereto, whether coming into its possession
before the making of the Loans or at any time or times thereafter, and no Agent
shall have any responsibility with respect to the accuracy of or the
completeness of any information provided to Lenders.
(b) Each Lender, by delivering its signature page to this
Agreement and funding its Term Loan and/or Revolving Loans on the Closing Date,
shall be deemed to have acknowledged receipt of, and consented to and approved,
each Credit Document and each other document required to be approved by any
Agent, Requisite Lenders or Lenders, as applicable on the Closing Date.
9.6 RIGHT TO INDEMNITY. Each Lender, in proportion to its Pro Rata Share,
severally agrees to indemnify each Agent, their Affiliates and their respective
officers, partners, directors, trustees, employees and agents of each Agent
(each, an "INDEMNITEE AGENT PARTY"), to the extent that such Indemnitee Agent
Party shall not have been reimbursed by any Credit Party, for and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including counsel fees and disbursements) or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by or asserted against such Indemnitee Agent Party in exercising its powers,
rights and remedies or performing its duties hereunder or under the other Credit
Documents or otherwise in its capacity as such Indemnitee Agent Party in any way
relating to or arising out of this Agreement or the other Credit Documents, IN
ALL CASES, WHETHER OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE
COMPARATIVE, CONTRIBUTORY, OR SOLE NEGLIGENCE OF SUCH AGENT; provided, no Lender
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from such Indemnitee Agent Party's gross negligence or willful
misconduct. If any indemnity furnished to any Indemnitee Agent Party for any
purpose shall, in the opinion of such Indemnitee Agent Party, be insufficient or
become impaired, such Indemnitee Agent Party may call for additional indemnity
and cease, or not commence, to do the acts indemnified against until such
additional indemnity is furnished; provided, in no event shall this sentence
require any Lender to indemnify any Indemnitee Agent Party against any
liability, obligation, loss, damage, penalty, action, judgment, suit, cost,
expense or disbursement in excess of such
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Lender's Pro Rata Share thereof; and provided further, this sentence shall not
be deemed to require any Lender to indemnify any Indemnitee Agent Party against
any liability, obligation, loss, damage, penalty, action, judgment, suit, cost,
expense or disbursement described in the proviso in the immediately preceding
sentence.
9.7 SUCCESSOR ADMINISTRATIVE AGENT.
(a) Administrative Agent and Collateral Agent may resign at any
time by giving thirty (30) days' prior written notice thereof to Lenders and
Company. Upon any such notice of resignation, Requisite Lenders shall have the
right, upon five (5) Business Days' notice to Company, to appoint a successor
Administrative Agent and Collateral Agent. Upon the acceptance of any
appointment as Administrative Agent and Collateral Agent hereunder by a
successor Administrative Agent and Collateral Agent, that successor
Administrative Agent and Collateral Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent and Collateral Agent and the retiring Administrative Agent
and Collateral Agent shall promptly (i) transfer to such successor
Administrative Agent and Collateral Agent all sums, Securities and other items
of Collateral held under the Collateral Documents, together with all records and
other documents necessary or appropriate in connection with the performance of
the duties of the successor Administrative Agent and Collateral Agent under the
Credit Documents, and (ii) execute and deliver to such successor Administrative
Agent and Collateral Agent such amendments to financing statements, and take
such other actions, as may be necessary or appropriate in connection with the
assignment to such successor Administrative Agent and Collateral Agent of the
security interests created under the Collateral Documents, whereupon such
retiring Administrative Agent and Collateral Agent shall be discharged from its
duties and obligations hereunder. After any retiring Administrative Agent's and
Collateral Agent's resignation hereunder as Administrative Agent and Collateral
Agent, the provisions of this Section 9 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Administrative Agent
hereunder.
(b) Notwithstanding anything herein to the contrary,
Administrative Agent may assign its rights and duties as Administrative Agent
hereunder to an Affiliate of Silver Point without the prior written consent of,
or prior written notice to, Company or the Lenders; provided that Company and
the Lenders may deem and treat such assigning Administrative Agent as
Administrative Agent for all purposes hereof, unless and until such assigning
Administrative Agent provides written notice to Company and the Lenders of such
assignment. Upon such assignment such Affiliate shall succeed to and become
vested with all rights, powers, privileges and duties as Administrative Agent
hereunder and under the other Credit Documents.
9.8 COLLATERAL DOCUMENTS AND GUARANTY.
(a) Agents under Collateral Documents and Guaranty. Each Lender
hereby further authorizes Administrative Agent or Collateral Agent, as
applicable, on behalf of and for the benefit of Lenders, to be the agent for and
representative of Lenders with respect to the Guaranty, the Collateral and the
Collateral Documents and to
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enter into the Subordination Agreement on its behalf. Subject to Section 10.5,
without further written consent or authorization from Lenders, Administrative
Agent or Collateral Agent, as applicable may execute any documents or
instruments necessary to (i) release any Lien encumbering any item of Collateral
that is the subject of a sale or other disposition of assets permitted hereby or
to which Requisite Lenders (or such other Lenders as may be required to give
such consent under Section 10.5) have otherwise consented, or (ii) release any
Guarantor from the Guaranty pursuant to Section 7.12 or with respect to which
Requisite Lenders (or such other Lenders as may be required to give such consent
under Section 10.5) have otherwise consented.
(b) Right to Realize on Collateral and Enforce Guaranty. Anything
contained in any of the Credit Documents to the contrary notwithstanding,
Company, Administrative Agent, Collateral Agent and each Lender hereby agree
that (i) no Lender shall have any right individually to realize upon any of the
Collateral or to enforce the Guaranty, it being understood and agreed that all
powers, rights and remedies hereunder may be exercised solely by Administrative
Agent, on behalf of Lenders in accordance with the terms hereof and all powers,
rights and remedies under the Collateral Documents may be exercised solely by
Collateral Agent, and (ii) in the event of a foreclosure by Collateral Agent on
any of the Collateral pursuant to a public or private sale, Collateral Agent or
any Lender may be the purchaser of any or all of such Collateral at any such
sale and Collateral Agent, as agent for and representative of Secured Parties
(but not any Lender or Lenders in its or their respective individual capacities
unless Requisite Lenders shall otherwise agree in writing) shall be entitled,
for the purpose of bidding and making settlement or payment of the purchase
price for all or any portion of the Collateral sold at any such public sale, to
use and apply any of the Obligations as a credit on account of the purchase
price for any collateral payable by Collateral Agent at such sale.
SECTION 10. MISCELLANEOUS
10.1 NOTICES. Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given to a Credit Party or an
Agent, shall be sent to such Person's address as set forth on Appendix B or in
the other relevant Credit Document, and in the case of any Lender, the address
as indicated on Appendix B or otherwise indicated to Administrative Agent in
writing. Each notice hereunder shall be in writing or by any telecommunication
device capable of creating a written record (including electronic mail), and may
be personally served, telexed or sent by telefacsimile or United States mail or
courier service and shall be deemed to have been given when delivered in person
or by courier service and signed for against receipt thereof, upon receipt of
telefacsimile or telex, or three (3) Business Days after depositing it in the
United States mail with postage prepaid and properly addressed, when transmitted
to an electronic mail address (or by another means of electronic delivery) or,
if delivered by electronic mail or any other telecommunications device, when
transmitted to an electronic mail address (or by another means of electronic
delivery); provided, no notice to any Agent shall be effective until received by
such Agent.
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10.2 EXPENSES. Whether or not the transactions contemplated hereby shall be
consummated, Company agrees to pay promptly (a) all the actual and reasonable
costs and expenses of preparation of the Credit Documents and any consents,
amendments, waivers or other modifications thereto; (b) all the costs of
furnishing all opinions by counsel for Company and the other Credit Parties; (c)
the reasonable fees, expenses and disbursements of counsel to Agents in
connection with the negotiation, preparation, execution and administration of
the Credit Documents and any consents, amendments, waivers or other
modifications thereto and any other documents or matters requested by Company;
(d) all the actual costs and reasonable expenses of creating and perfecting
Liens in favor of Collateral Agent, for the benefit of Secured Parties pursuant
hereto, including filing and recording fees, expenses and stamp, documentary and
similar taxes and fees and amounts owed pursuant to Section 2.19(c), search
fees, title insurance premiums and reasonable fees, expenses and disbursements
of counsel to each Agent and of counsel providing any opinions that any Agent or
Requisite Lenders may request in respect of the Collateral or the Liens created
pursuant to the Collateral Documents; (e) all the actual costs and reasonable
fees, expenses and disbursements of any auditors, accountants, consultants or
appraisers whether internal or external; (f) all the actual costs and reasonable
expenses (including the reasonable fees, expenses and disbursements of any
appraisers, consultants, advisors and agents employed or retained by Collateral
Agent and its counsel) in connection with the custody or preservation of any of
the Collateral; (g) all other actual and reasonable costs and expenses incurred
by each Agent in connection with the syndication of the Loans and Commitments
and the negotiation, preparation and execution of the Credit Documents and any
consents, amendments, waivers or other modifications thereto and the
transactions contemplated thereby; and (h) after the occurrence of a Default or
an Event of Default, all costs and expenses, including reasonable attorneys'
fees (including allocated costs of internal counsel) and costs of settlement,
incurred by any Agent and Lenders in enforcing any Obligations of or in
collecting any payments due from any Credit Party hereunder or under the other
Credit Documents by reason of such Default or Event of Default (including in
connection with the sale of, collection from, or other realization upon any of
the Collateral or the enforcement of the Guaranty) or in connection with any
refinancing or restructuring of the credit arrangements provided hereunder in
the nature of a "work out" or pursuant to any insolvency or bankruptcy cases or
proceedings.
10.3 INDEMNITY.
(a) In addition to the payment of expenses pursuant to Section
10.2, whether or not the transactions contemplated hereby shall be consummated,
each Credit Party agrees to defend (subject to Indemnitees' selection of
counsel), indemnify, pay and hold harmless, each Agent and Lender, their
Affiliates and their respective officers, partners, directors, trustees,
employees and agents of each Agent and each Lender (each, an "INDEMNITEE"), from
and against any and all Indemnified Liabilities, IN ALL CASES, WHETHER OR NOT
CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE COMPARATIVE, CONTRIBUTORY,
OR SOLE NEGLIGENCE OF SUCH AGENT; provided, no Credit Party shall have any
obligation to any Indemnitee hereunder with respect to any Indemnified
Liabilities to the extent such Indemnified Liabilities arise from the gross
negligence or willful misconduct
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of that Indemnitee. To the extent that the undertakings to defend, indemnify,
pay and hold harmless set forth in this Section 10.3 may be unenforceable in
whole or in part because they are violative of any law or public policy, the
applicable Credit Party shall contribute the maximum portion that it is
permitted to pay and satisfy under applicable law to the payment and
satisfaction of all Indemnified Liabilities incurred by Indemnitees or any of
them.
(b) To the extent permitted by applicable law, no Credit Party
shall assert, and each Credit Party hereby waives, any claim against Lenders,
Agents and their respective Affiliates, directors, employees, attorneys or
agents, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) (whether or not the
claim therefor is based on contract, tort or duty imposed by any applicable
legal requirement) arising out of, in connection with, arising out of, as a
result of, or in any way related to, this Agreement or any Credit Document or
any agreement or instrument contemplated hereby or thereby or referred to herein
or therein, the transactions contemplated hereby or thereby, any Loan or the use
of the proceeds thereof or any act or omission or event occurring in connection
therewith, and Company and its Subsidiaries hereby waive, release and agree not
to xxx upon any such claim or any such damages, whether or not accrued and
whether or not known or suspected to exist in its favor.
10.4 SET OFF. In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence of any Event of Default each Lender and each of its respective
Affiliates is hereby authorized by each Credit Party at any time or from time to
time subject to the consent of Administrative Agent (such consent not to be
unreasonably withheld or delayed), without notice to any Credit Party or to any
other Person (other than Administrative Agent), any such notice being hereby
expressly waived, to set off and to appropriate and to apply any and all
deposits (general or special, including Indebtedness evidenced by certificates
of deposit, whether matured or unmatured, but not including trust accounts (in
whatever currency)) and any other Indebtedness at any time held or owing by such
Lender to or for the credit or the account of any Credit Party (in whatever
currency) against and on account of the obligations and liabilities of any
Credit Party to such Lender hereunder and under the other Credit Documents,
including all claims of any nature or description arising out of or connected
hereto or with any other Credit Document, irrespective of whether or not (a)
such Lender shall have made any demand hereunder, (b) the principal of or the
interest on the Loans or any other amounts due hereunder shall have become due
and payable pursuant to Section 2 and although such obligations and liabilities,
or any of them, may be contingent or unmatured or (c) such obligation or
liability is owed to a branch or office of such Lender different from the branch
or office holding such deposit or obligation or such Indebtedness.
10.5 AMENDMENTS AND WAIVERS.
(a) Requisite Lenders' Consent. Subject to Sections 10.5(b) and
10.5(c), no amendment, modification, termination or waiver of any provision of
the Credit Documents, or consent to any departure by any Credit Party therefrom,
shall in
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any event be effective without the written concurrence of Administrative Agent
and the Requisite Lenders.
(b) Affected Lenders' Consent. Without the written consent of
each Lender (other than a Defaulting Lender) that would be affected thereby, no
amendment, modification, termination, or consent shall be effective if the
effect thereof would:
(i) extend the scheduled final maturity of any Loan or Note;
(ii) waive, reduce or postpone any scheduled repayment (but not
prepayment);
(iii) reduce the rate of interest on any Loan (other than any
waiver of any increase in the interest rate applicable to any Loan pursuant
to Section 2.9) or any fee payable hereunder;
(iv) extend the time for payment of any such interest or fees;
(v) reduce the principal amount of any Loan;
(vi) amend, modify, terminate or waive any provision of this
Section 10.5(b) or Section 10.5(c);
(vii) amend the definition of "REQUISITE LENDERS" or "PRO RATA
SHARE"; provided, with the consent of Administrative Agent and the
Requisite Lenders, additional extensions of credit pursuant hereto may be
included in the determination of "REQUISITE LENDERS" or "PRO RATA SHARE" on
substantially the same basis as the Term Loan Commitments, the Term Loan,
the Revolving Commitments and the Revolving Loans are included on the
Closing Date;
(viii) release all or substantially all of the Collateral or all
or substantially all of the Guarantors from the Guaranty except as
expressly provided in the Credit Documents; or
(ix) consent to the assignment or transfer by any Credit Party of
any of its rights and obligations under any Credit Document.
(c) Other Consents. No amendment, modification, termination or
waiver of any provision of the Credit Documents, or consent to any departure by
any Credit Party therefrom, shall:
(i) increase any Revolving Commitment of any Lender over the
amount thereof then in effect without the consent of such Lender; provided,
no amendment, modification or waiver of any condition precedent, covenant,
Default or Event of Default shall constitute an increase in any Revolving
Commitment of any Lender;
103
(ii) amend the definition of "REQUISITE CLASS LENDERS" without
the consent of Requisite Class Lenders of each Class; provided, with the
consent of Administrative Agent and the Requisite Lenders, additional
extensions of credit pursuant hereto may be included in the determination
of such "REQUISITE CLASS LENDERS" on substantially the same basis as the
Term Loan Commitments, the Term Loan, the Revolving Commitments and the
Revolving Loans are included on the Closing Date;
(iii) amend, modify, terminate or waive any provision of Section
3.2(a) with regard to any Credit Extension (whether constituting a
Revolving Loan or a Term Loan) without the consent of Requisite Class
Lenders of the affected Class;
(iv) alter the required application of any repayments or
prepayments as between Classes pursuant to Section 2.14 without the consent
of Requisite Class Lenders of each Class which is being allocated a lesser
repayment or prepayment as a result thereof; provided, Administrative Agent
and the Requisite Lenders may waive, in whole or in part, any prepayment so
long as the application, as between Classes, of any portion of such
prepayment which is still required to be made is not altered; or
(v) amend, modify, terminate or waive any provision of Section 9
as the same applies to any Agent, or any other provision hereof as the same
applies to the rights or obligations of any Agent, in each case without the
consent of such Agent.
(d) Execution of Amendments, etc. Administrative Agent may, but
shall have no obligation to, with the concurrence of any Lender, execute
amendments, modifications, waivers or consents on behalf of such Lender. Any
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given. No notice to or demand on any Credit
Party in any case shall entitle any Credit Party to any other or further notice
or demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this Section 10.5
shall be binding upon each Lender at the time outstanding, each future Lender
and, if signed by a Credit Party, on such Credit Party.
10.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS.
(a) Generally. This Agreement shall be binding upon the parties
hereto and their respective successors and assigns and shall inure to the
benefit of the parties hereto and the successors and assigns of Lenders. No
Credit Party's rights or obligations hereunder nor any interest therein may be
assigned or delegated by any Credit Party without the prior written consent of
all Lenders. Nothing in this Agreement, expressed or implied, shall be construed
to confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, Affiliates of each of the Agents and Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.
104
(b) Register. Company, Administrative Agent and Lenders shall
deem and treat the Persons listed as Lenders in the Register as the holders and
owners of the corresponding Commitments and Loans listed therein for all
purposes hereof, and no assignment or transfer of any such Commitment or Loan
shall be effective, in each case, unless and until an Assignment Agreement
effecting the assignment or transfer thereof shall have been delivered to and
accepted by Administrative Agent and recorded in the Register as provided in
Section 10.6(e). Prior to such recordation, all amounts owed with respect to the
applicable Commitment or Loan shall be owed to the Lender listed in the Register
as the owner thereof, and any request, authority or consent of any Person who,
at the time of making such request or giving such authority or consent, is
listed in the Register as a Lender shall be conclusive and binding on any
subsequent holder, assignee or transferee of the corresponding Commitments or
Loans. Solely for purposes of maintaining the Register and for Tax purposes only
Administrative Agent shall be deemed to be acting on behalf of the Credit
Parties.
(c) Right to Assign. Each Lender shall have the right at any time
to sell, assign or transfer all or a portion of its rights and obligations under
this Agreement, including, without limitation, all or a portion of any of its
Commitments and/or Loans owing to it or any of its other Obligations (provided,
however, that each such assignment shall be of a uniform, and not varying,
percentage of all rights and obligations under and in respect of any Loan and
any related Commitments):
(i) to any Person meeting the criteria of clause (i)(a) or clause
(ii)(a) of the definition of the term of "Eligible Assignee" upon the
giving of notice to Company and Administrative Agent; and
(ii) to any Person otherwise constituting an Eligible Assignee
with the consent of Administrative Agent; provided, each such assignment
pursuant to this Section 10.6(c)(ii) shall be in an aggregate amount of not
less than (A) $1,000,000 (or such lesser amount as may be agreed to by
Administrative Agent or as shall constitute the aggregate amount of the
Revolving Commitments and Revolving Loans of the assigning Lender) with
respect to the assignment of the Revolving Commitments and Revolving Loans
or (B) $1,000,000 (or such lesser amount as may be agreed to by
Administrative Agent or as shall constitute the aggregate amount of the
Term Loan with respect to the assignment of the Term Loan.
(d) Mechanics. The assigning Lender and the assignee thereof
shall execute and deliver to Administrative Agent an Assignment Agreement,
together with such forms, certificates or other evidence, if any, with respect
to United States federal income Tax withholding matters as the assignee under
such Assignment Agreement may be required to deliver to Administrative Agent
pursuant to Section 2.19(c).
(e) Notice of Assignment. Upon its receipt and acceptance of a
duly executed and completed Assignment Agreement, any forms, certificates or
other evidence required by this Agreement in connection therewith,
Administrative Agent shall
105
record the information contained in such Assignment Agreement in the Register,
shall give prompt notice thereof to Company and shall maintain a copy of such
Assignment Agreement.
(f) Representations and Warranties of Assignee. Each Lender, upon
execution and delivery hereof or upon executing and delivering an Assignment
Agreement, as the case may be, represents and warrants as of the Closing Date or
as of the applicable Effective Date (as defined in the applicable Assignment
Agreement) that (i) it is an Eligible Assignee; (ii) it has experience and
expertise in the making of or investing in commitments or loans such as the
applicable Commitments or Loans, as the case may be; and (iii) it will make or
invest in, as the case may be, its Commitments or Loans for its own account in
the ordinary course of its business and without a view to distribution of such
Commitments or Loans within the meaning of the Securities Act or the Exchange
Act or other federal securities laws (it being understood that, subject to the
provisions of this Section 10.6, the disposition of such Revolving Commitments
or Loans or any interests therein shall at all times remain within its exclusive
control).
(g) Effect of Assignment. Subject to the terms and conditions of
this Section 10.6, as of the "Effective Date" specified in the applicable
Assignment Agreement: (i) the assignee thereunder shall have the rights and
obligations of a "Lender" hereunder to the extent such rights and obligations
hereunder have been assigned to it pursuant to such Assignment Agreement and
shall thereafter be a party hereto and a "Lender" for all purposes hereof; (ii)
the assigning Lender thereunder shall, to the extent that rights and obligations
hereunder have been assigned thereby pursuant to such Assignment Agreement,
relinquish its rights (other than any rights which survive the termination
hereof under Section 10.8) and be released from its obligations hereunder (and,
in the case of an Assignment Agreement covering all or the remaining portion of
an assigning Lender's rights and obligations hereunder, such Lender shall cease
to be a party hereto; provided, anything contained in any of the Credit
Documents to the contrary notwithstanding, such assigning Lender shall continue
to be entitled to the benefit of all indemnities hereunder as specified herein
with respect to matters arising out of the prior involvement of such assigning
Lender as a Lender hereunder); (iii) the Commitments shall be modified to
reflect the Commitment of such assignee and any Commitment of such assigning
Lender, if any; and (iv) if any such assignment occurs after the issuance of any
Note hereunder, the assigning Lender shall, upon the effectiveness of such
assignment or as promptly thereafter as practicable, surrender its applicable
Notes to Administrative Agent for cancellation, and thereupon Company shall
issue and deliver new Notes, if so requested by the assignee and/or assigning
Lender, to such assignee and/or to such assigning Lender, with appropriate
insertions, to reflect the new Commitments and/or outstanding Loans of the
assignee and/or the assigning Lender.
(h) Participations. Each Lender shall have the right at any time
to sell one or more participations to any Person (other than Company, any of its
Subsidiaries or any of its Affiliates) in all or any part of its Commitments,
Loans or in any other Obligation. The holder of any such participation, other
than an Affiliate of the Lender granting such participation, shall not be
entitled to require such Lender to take or omit to take any action hereunder
except with respect to any amendment, modification or
106
waiver that would (i) extend the final scheduled maturity of any Loan or Note in
which such Participant is participating, or reduce the rate or extend the time
of payment of interest or fees thereon (except in connection with a waiver of
applicability of any post default increase in interest rates) or reduce the
principal amount thereof, or increase the amount of the Participant's
participation over the amount thereof then in effect (it being understood that a
waiver of any Default or Event of Default or of a mandatory prepayment or
mandatory reduction in the Commitment shall not constitute a change in the terms
of such participation, and that an increase in any Commitment or Loan shall be
permitted without the consent of any Participant if the Participant's
participation is not increased as a result thereof), (ii) consent to the
assignment or transfer by any Credit Party of any of its rights and obligations
under this Agreement, or (iii) release all or substantially all of the
Collateral under the Collateral Documents or all or substantially all of the
Guarantors from the Guaranty (in each case, except as expressly provided in the
Credit Documents) supporting the Loans hereunder in which such Participant is
participating. Company agrees that each Participant shall be entitled to the
benefits of Sections 2.17(c), 2.18 and 2.19 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to clause (c) of
this Section; provided, (i) a Participant shall not be entitled to receive any
greater payment under Section 2.18 or 2.19 than the applicable Lender would have
been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with Company's prior written consent, and (ii) a Participant that would be a
Non-US Lender if it were a Lender shall not be entitled to the benefits of
Section 2.19 unless Company is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of Company, to comply
with Section 2.19 as though it were a Lender. To the extent permitted by law,
each Participant also shall be entitled to the benefits of Section 10.4 as
though it were a Lender, provided such Participant agrees to be subject to
Section 2.16 as though it were a Lender.
(i) Certain Other Assignments. In addition to any other
assignment permitted pursuant to this Section 10.6, any Lender may assign,
pledge and/or grant a security interest in, all or any portion of its Loans, the
other Obligations owed by or to such Lender, and its Notes, if any, to secure
obligations of such Lender including, without limitation, any Federal Reserve
Bank as collateral security pursuant to Regulation A of the Board of Governors
of the Federal Reserve System and any operating circular issued by such Federal
Reserve Bank; provided, no Lender, as between Company and such Lender, shall be
relieved of any of its obligations hereunder as a result of any such assignment
and pledge, and provided further, in no event shall the applicable Federal
Reserve Bank, pledgee or trustee be considered to be a "Lender" or be entitled
to require the assigning Lender to take or omit to take any action hereunder.
10.7 INDEPENDENCE OF COVENANTS. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or would otherwise be within the limitations of, another covenant shall not
avoid the occurrence of a Default or an Event of Default if such action is taken
or condition exists.
107
10.8 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. All
representations, warranties and agreements made herein shall survive the
execution and delivery hereof and the making of any Credit Extension.
Notwithstanding anything herein or implied by law to the contrary, the
agreements of each Credit Party set forth in Sections 2.17(c), 2.18, 2.19, 10.2,
10.3 and 10.4 and the agreements of Lenders set forth in Sections 2.16, 9.3(b)
and 9.6 shall survive the payment of the Loans and the termination hereof.
10.9 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part of any
Agent or any Lender in the exercise of any power, right or privilege hereunder
or under any other Credit Document shall impair such power, right or privilege
or be construed to be a waiver of any default or acquiescence therein, nor shall
any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other power, right or privilege. The
rights, powers and remedies given to each Agent and each Lender hereby are
cumulative and shall be in addition to and independent of all rights, powers and
remedies existing by virtue of any statute or rule of law or in any of the other
Credit Documents. Any forbearance or failure to exercise, and any delay in
exercising, any right, power or remedy hereunder shall not impair any such
right, power or remedy or be construed to be a waiver thereof, nor shall it
preclude the further exercise of any such right, power or remedy.
10.10 MARSHALLING; PAYMENTS SET ASIDE. Neither any Agent nor any Lender shall be
under any obligation to marshal any assets in favor of any Credit Party or any
other Person or against or in payment of any or all of the Obligations. To the
extent that any Credit Party makes a payment or payments to Administrative Agent
or Lenders (or to Administrative Agent, on behalf of Lenders), or Administrative
Agent, Collateral Agent, or Lenders enforce any security interests or exercise
their rights of setoff, and such payment or payments or the proceeds of such
enforcement or setoff 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 law, any other state
or federal law, common law or any equitable cause, then, to the extent of such
recovery, the obligation or part thereof originally intended to be satisfied,
and all Liens, rights and remedies therefor or related thereto, shall be revived
and continued in full force and effect as if such payment or payments had not
been made or such enforcement or setoff had not occurred.
10.11 SEVERABILITY. In case any provision in or obligation hereunder or any Note
or other Credit Document shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
10.12 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS. The
obligations of Lenders hereunder are several and no Lender shall be responsible
for the obligations or Commitment of any other Lender hereunder. Nothing
contained herein or in any other Credit Document, and no action taken by Lenders
pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other
108
kind of entity. The amounts payable at any time hereunder to each Lender shall
be a separate and independent debt, and each Lender shall be entitled to protect
and enforce its rights arising out hereof and it shall not be necessary for any
other Lender to be joined as an additional party in any proceeding for such
purpose.
10.13 HEADINGS. Section headings herein are included herein for convenience of
reference only and shall not constitute a part hereof for any other purpose or
be given any substantive effect.
10.14 APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW) THEREOF.
10.15 CONSENT TO JURISDICTION. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY
CREDIT PARTY ARISING OUT OF OR RELATING HERETO OR ANY OTHER CREDIT DOCUMENT, OR
ANY OF THE OBLIGATIONS, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN XXX XXXXX, XXXXXX XXX XXXX XX XXX XXXX. BY EXECUTING
AND DELIVERING THIS AGREEMENT, EACH CREDIT PARTY, FOR ITSELF AND IN CONNECTION
WITH ITS PROPERTIES, IRREVOCABLY (A) ACCEPTS GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (B) WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS; (C) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO THE APPLICABLE CREDIT PARTY AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH SECTION 10.1 IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER
THE APPLICABLE CREDIT PARTY IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND
OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND (D)
AGREES THAT AGENTS AND LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY CREDIT PARTY IN THE
COURTS OF ANY OTHER JURISDICTION.
10.16 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING HEREUNDER OR UNDER ANY OF THE OTHER CREDIT DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. THE SCOPE OF THIS WAIVER
IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL
109
DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF
THIS TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS
AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES
THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP,
THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND
THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS.
EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS
WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS
JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING
(OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION
10.16 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR
ANY OF THE OTHER CREDIT DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS
RELATING TO THE LOANS MADE HEREUNDER. IN THE EVENT OF LITIGATION, THIS AGREEMENT
MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
10.17 CONFIDENTIALITY. Each Lender shall hold all non public information
regarding Company and its Subsidiaries and their businesses identified as such
by Company and obtained by such Lender pursuant to the requirements hereof in
accordance with such Lender's customary procedures for handling confidential
information of such nature, it being understood and agreed by Company that, in
any event, a Lender may make (i) disclosures of such information to Affiliates
of such Lender and to their agents and advisors (and to other persons authorized
by a Lender or Agent to organize, present or disseminate such information in
connection with disclosures otherwise made in accordance with this Section
10.17), (ii) disclosures of such information reasonably required by any bona
fide or potential assignee, transferee or participant in connection with the
contemplated assignment, transfer or participation by such Lender of any Loans
or any participations therein, (iii) disclosure to any rating agency when
required by it, provided that, prior to any disclosure, such rating agency shall
undertake in writing to preserve the confidentiality of any confidential
information relating to the Credit Parties received by it from any of the Agents
or any Lender, (iv) to any Lender's financing sources, provided that prior to
any disclosure, such financing source is informed of the confidential nature of
the information, and (v) disclosures required or requested by any governmental
agency or representative thereof or by the NAIC or pursuant to legal or judicial
process; provided, unless specifically prohibited by applicable law or court
order, each Lender shall make reasonable efforts to notify Company of any
request by any governmental agency or representative thereof (other than any
such request in connection with any examination of the financial condition or
other routine examination of such Lender by such governmental agency) for
disclosure of any such non public information
110
prior to disclosure of such information. Notwithstanding the foregoing, on or
after the Closing Date, Administrative Agent may, at its own expense, issue news
releases and publish "tombstone" advertisements and other announcements relating
to this transaction in newspapers, trade journals and other appropriate media.
10.18 USURY SAVINGS CLAUSE. Notwithstanding any other provision herein, the
aggregate interest rate charged or agreed to be paid with respect to any of the
Obligations, including all charges or fees in connection therewith deemed in the
nature of interest under applicable law shall not exceed the Highest Lawful
Rate. If the rate of interest (determined without regard to the preceding
sentence) under this Agreement at any time exceeds the Highest Lawful Rate, the
outstanding amount of the Loans made hereunder shall bear interest at the
Highest Lawful Rate until the total amount of interest due hereunder equals the
amount of interest which would have been due hereunder if the stated rates of
interest set forth in this Agreement had at all times been in effect. In
addition, if when the Loans made hereunder are repaid in full the total interest
due hereunder (taking into account the increase provided for above) is less than
the total amount of interest which would have been due hereunder if the stated
rates of interest set forth in this Agreement had at all times been in effect,
then to the extent permitted by law, Company shall pay to Administrative Agent
an amount equal to the difference between the amount of interest paid and the
amount of interest which would have been paid if the Highest Lawful Rate had at
all times been in effect. Notwithstanding the foregoing, it is the intention of
Lenders and Company to conform strictly to any applicable usury laws.
Accordingly, if any Lender contracts for, charges, or receives any consideration
which constitutes interest in excess of the Highest Lawful Rate, then any such
excess shall be cancelled automatically and, if previously paid, shall at such
Lender's option be applied to the outstanding amount of the Loans made hereunder
or be refunded to Company. In determining whether the interest contracted for,
charged, or received by Administrative Agent or a Lender exceeds the Highest
Lawful Rate, such Person may, to the extent permitted by applicable law, (a)
characterize any payment that is not principal as an expense, fee, or premium
rather than interest, (b) exclude voluntary prepayments and the effects thereof,
and (c) amortize, prorate, allocate, and spread in equal or unequal parts the
total amount of interest, throughout the contemplated term of the Obligations
hereunder.
10.19 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.
10.20 EFFECTIVENESS. This Agreement shall become effective upon the execution of
a counterpart hereof by each of the parties hereto and receipt by Company and
Administrative Agent of written or telephonic notification of such execution and
authorization of delivery thereof.
10.21 ORIGINAL ISSUE DISCOUNT . The parties agree that the "issue price" (as
defined under Section 1273 of the Internal Revenue Code) of the Term Loan is
$64,025,000.00. The parties shall not take any position inconsistent therewith,
including, without
111
limitation, for purposes of reporting any original issue discount on the Term
Loan for U.S. federal income tax purposes.
10.22 PATRIOT ACT. Each Lender and Administrative Agent (for itself and not on
behalf of any Lender) hereby notifies Company that pursuant to the requirements
of the Act, it is required to obtain, verify and record information that
identifies Company, which information includes the name and address of Company
and other information that will allow such Lender or Administrative Agent, as
applicable, to identify Company in accordance with the Act.
[Remainder of page intentionally left blank.]
112
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
NAVISITE, INC.
By: /s/ Xxxx X. Xxxxx, Xx.
------------------------------------
Name: Xxxx X. Xxxxx, Xx.
Title: CFO
AVASTA, INC.
By: /s/ Xxxx X. Xxxxx, Xx.
------------------------------------
Name: Xxxx X. Xxxxx, Xx.
Title: CFO
CLEARBLUE TECHNOLOGIES MANAGEMENT, INC.
By: /s/ Xxxx X. Xxxxx, Xx.
------------------------------------
Name: Xxxx X. Xxxxx, Xx.
Title: CFO
CLEARBLUE TECHNOLOGIES/CHICAGO-XXXXX,
INC.
By: /s/ Xxxx X. Xxxxx, Xx.
------------------------------------
Name: Xxxx X. Xxxxx, Xx.
Title: CFO
CLEAR BLUE TECHNOLOGIES/LAS VEGAS, INC.
By: /s/ Xxxx X. Xxxxx, Xx.
------------------------------------
Name: Xxxx X. Xxxxx, Xx.
Title: CFO
CLEARBLUE TECHNOLOGIES/LOS ANGELES, INC.
By: /s/ Xxxx X. Xxxxx, Xx.
------------------------------------
Name: Xxxx X. Xxxxx, Xx.
Title: CFO
CLEARBLUE TECHNOLOGIES/ MILWAUKEE, INC.
By: /s/ Xxxx X. Xxxxx, Xx.
------------------------------------
Name: Xxxx X. Xxxxx, Xx.
Title: CFO
CLEARBLUE TECHNOLOGIES/OAK BROOK, INC.
By: /s/ Xxxx X. Xxxxx, Xx.
------------------------------------
Name: Xxxx X. Xxxxx, Xx.
Title: CFO
CLEARBLUE TECHNOLOGIES/VIENNA, INC.
By: /s/ Xxxx X. Xxxxx, Xx.
------------------------------------
Name: Xxxx X. Xxxxx, Xx.
Title: CFO
CLEARBLUE TECHNOLOGIES/ DALLAS, INC.
By: /s/ Xxxx X. Xxxxx, Xx.
------------------------------------
Name: Xxxx X. Xxxxx, Xx.
Title: CFO
CLEARBLUE TECHNOLOGIES/NEW YORK, INC.
By: /s/ Xxxx X. Xxxxx, Xx.
------------------------------------
Name: Xxxx X. Xxxxx, Xx.
Title: CFO
CLEARBLUE TECHNOLOGIES/SAN FRANCISCO,
INC.
By: /s/ Xxxx X. Xxxxx, Xx.
------------------------------------
Name: Xxxx X. Xxxxx, Xx.
Title: CFO
CLEARBLUE TECHNOLOGIES/SANTA XXXXX, INC.
By: /s/ Xxxx X. Xxxxx, Xx.
------------------------------------
Name: Xxxx X. Xxxxx, Xx.
Title: CFO
CONXION CORPORATION
By: /s/ Xxxx X. Xxxxx, Xx.
------------------------------------
Name: Xxxx X. Xxxxx, Xx.
Title: CFO
INTREPID ACQUISITION CORP.
By: /s/ Xxxx X. Xxxxx, Xx.
------------------------------------
Name: Xxxx X. Xxxxx, Xx.
Title: CFO
LEXINGTON ACQUISITION CORP.
By: /s/ Xxxx X. Xxxxx, Xx.
------------------------------------
Name: Xxxx X. Xxxxx, Xx.
Title: CFO
XXXXXXXXXX.XXX, INC.
By: /s/ Xxxx X. Xxxxx, Xx.
------------------------------------
Name: Xxxx X. Xxxxx, Xx.
Title: CFO
SUREBRIDGE ACQUISITION CORP.
By: /s/ Xxxx X. Xxxxx, Xx.
------------------------------------
Name: Xxxx X. Xxxxx, Xx.
Title: CFO
SUREBRIDGE SERVICES, INC.
By: /s/ Xxxx X. Xxxxx, Xx.
------------------------------------
Name: Xxxx X. Xxxxx, Xx.
Title: CFO
SITEROCK CORPORATION
By: /s/ Xxxx X. Xxxxx, Xx.
------------------------------------
Name: Xxxx X. Xxxxx, Xx.
Title: CFO
NAVISITE ACQUISITION SUBSIDIARY, INC.
By: /s/ Xxxx X. Xxxxx, Xx.
------------------------------------
Name: Xxxx X. Xxxxx, Xx.
Title: CFO
CLICKHEAR, INC.
By: /s/ Xxxx X. Xxxxx, Xx.
------------------------------------
Name: Xxxx X. Xxxxx, Xx.
Title: CFO
SILVER POINT FINANCE, LLC,
as Administrative Agent and Collateral
Agent
By: /s/ Xxxxxxx Xxxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Authorized Signatory
FIELD POINT I, LTD., as a Lender
By: /s/ Xxxxxxx Xxxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Authorized Signatory
FIELD POINT III, LTD., as a Lender
By: /s/ Xxxxxxx Xxxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Authorized Signatory
SPF CDO I, LLC, as a Lender
By: /s/ Xxxxxxx Xxxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Authorized Signatory
