Exhibit 10.1
EXECUTION COPY
$6,580,000
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of April 30, 2001
among
MEDIABAY, INC.
(f/k/a AUDIO BOOK CLUB, INC.)
XXXXX XXXXXXX, INC.
and
AUDIO BOOK CLUB, INC.,
as Borrowers,
THE BANKS, FINANCIAL INSTITUTIONS AND
OTHER INSTITUTIONAL LENDERS NAMED HEREIN,
as Lender Parties,
and
ING (U.S.) CAPITAL LLC,
as Administrative Agent
TABLE OF CONTENTS
Page
----
ARTICLE 1 DEFINITIONS AND ACCOUNTING TERMS...................................................1
SECTION 1.1 Certain Defined Terms............................................................1
SECTION 1.2 Computation of Time Periods.....................................................26
SECTION 1.3 Accounting Terms................................................................26
SECTION 1.4 Other Definitional Provisions...................................................26
ARTICLE 2 AMOUNTS AND TERMS OF THE ADVANCES AND THE LETTERS OF CREDIT......................27
SECTION 2.1 The Advances....................................................................27
SECTION 2.2 Making the Advances.............................................................28
SECTION 2.3 Issuance of and Drawings and Reimbursement Under Letters of Credit..............29
SECTION 2.4 Repayment of Advances...........................................................31
SECTION 2.5 Termination or Reduction of the Commitments.....................................32
SECTION 2.6 Prepayments.....................................................................32
SECTION 2.7 Interest........................................................................34
SECTION 2.8 Fees............................................................................35
SECTION 2.9 Increased Costs, Etc............................................................36
SECTION 2.10 Payments and Computations......................................................37
SECTION 2.11 Taxes..........................................................................38
SECTION 2.12 Sharing of Payments, Etc.......................................................40
SECTION 2.13 Use of Proceeds................................................................41
SECTION 2.14 Defaulting Lenders.............................................................41
ARTICLE 3 CONDITIONS OF LENDING.............................................................43
SECTION 3.1 Conditions Precedent to Extension of Revolving Credit Termination Date..........43
SECTION 3.2 Conditions Precedent to Each Borrowing and Issuance.............................48
SECTION 3.3 Determinations Under Section 3.1................................................49
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE BORROWERS...................................49
SECTION 4.1 Organization....................................................................49
SECTION 4.2 Subsidiaries....................................................................49
SECTION 4.3 Corporate Power, Authorization..................................................50
SECTION 4.4 Governmental Authorizations, Approvals..........................................50
SECTION 4.5 Due Execution, Validity, Enforceability.........................................51
SECTION 4.6 Financial Statements............................................................51
SECTION 4.7 Inactive Subsidiaries...........................................................51
SECTION 4.8 Accurate Information............................................................52
SECTION 4.9 Litigation......................................................................52
SECTION 4.10 Regulation U...................................................................52
SECTION 4.11 ERISA..........................................................................52
SECTION 4.12 Casualty.......................................................................52
SECTION 4.13 Environmental Matters..........................................................52
SECTION 4.14 Restrictive Agreements.........................................................53
SECTION 4.15 Priority of Liens..............................................................53
SECTION 4.16 Taxes..........................................................................54
SECTION 4.17 Compliance with Securities Laws................................................54
SECTION 4.18 [Intentionally Left Blank.]...................................................54
- ii -
TABLE OF CONTENTS
Page
----
SECTION 4.19 Debt...........................................................................54
SECTION 4.20 No Defaults, Compliance with Laws..............................................55
SECTION 4.21 Owned Real Property............................................................55
SECTION 4.22 Leased Real Property...........................................................55
SECTION 4.23 Material Contracts.............................................................56
SECTION 4.24 Investments....................................................................56
SECTION 4.25 Intellectual Property..........................................................56
SECTION 4.26 Fees...........................................................................56
SECTION 4.27 Government Consents for Conduct of Business....................................57
ARTICLE 5 AFFIRMATIVE COVENANTS.............................................................57
SECTION 5.1 Compliance with Law.............................................................57
SECTION 5.2 Payment of Taxes, Etc...........................................................57
SECTION 5.3 Compliance with Environmental Laws..............................................58
SECTION 5.4 Preparation of Environmental Reports............................................58
SECTION 5.5 Maintenance of Insurance........................................................59
SECTION 5.6 Preservation of Corporate Existence, Etc........................................59
SECTION 5.7 Rights..........................................................................59
SECTION 5.8 Keeping of Books................................................................60
SECTION 5.9 Maintenance of Properties, Etc..................................................60
SECTION 5.10 Compliance with Terms of Leaseholds............................................60
SECTION 5.11 Performance of Material Contracts..............................................60
SECTION 5.12 Transactions with Affiliates...................................................60
SECTION 5.13 Agreement to Grant Additional Security.........................................60
SECTION 5.14 Borrow's Account...............................................................62
ARTICLE 6 NEGATIVE COVENANTS................................................................62
SECTION 6.1 Liens, Etc......................................................................63
SECTION 6.2 Debt............................................................................64
SECTION 6.3 Accounts Payable................................................................66
SECTION 6.4 Fundamental Changes.............................................................66
SECTION 6.5 Sales, Etc. of Assets...........................................................66
SECTION 6.6 Investments in Other Persons....................................................67
SECTION 6.7 Dividends, Etc..................................................................68
SECTION 6.8 Change in Nature of Business....................................................69
SECTION 6.9 Charter Amendments..............................................................69
SECTION 6.10 Accounting Changes.............................................................69
SECTION 6.11 Prepayments, Etc. of Debt......................................................69
SECTION 6.12 Amendment, Etc. of Material Contracts, Including Debt..........................69
SECTION 6.13 Negative Pledge................................................................70
SECTION 6.14 Partnerships, New Subsidiaries.................................................70
SECTION 6.15 Speculative Transactions.......................................................71
SECTION 6.16 Capital Expenditures...........................................................71
SECTION 6.17 Issuance of Stock..............................................................71
SECTION 6.18 Management Fees................................................................72
SECTION 6.19 Senior Subordinated Debt Payments..............................................72
SECTION 6.20 Xxxxxxx Senior Secured Note Payments...........................................72
- iii -
TABLE OF CONTENTS
Page
----
ARTICLE 7 REPORTING REQUIREMENTS............................................................72
SECTION 7.1 Default Notice..................................................................72
SECTION 7.2 Monthly Financials..............................................................73
SECTION 7.3 Quarterly Financials............................................................73
SECTION 7.4 Annual Financials...............................................................74
SECTION 7.5 ERISA Events and ERISA Reports..................................................74
SECTION 7.6 Plan Terminations...............................................................74
SECTION 7.7 Actuarial Reports...............................................................75
SECTION 7.8 Plan Annual Reports.............................................................75
SECTION 7.9 Annual Plan Summaries...........................................................75
SECTION 7.10 Multiemployer Plan Notices.....................................................75
SECTION 7.11 Litigation.....................................................................75
SECTION 7.12 Securities Reports.............................................................75
SECTION 7.13 Creditor Reports...............................................................76
SECTION 7.14 Agreement Notices..............................................................76
SECTION 7.15 Revenue Agent Reports..........................................................76
SECTION 7.16 Environmental Conditions.......................................................76
SECTION 7.17 Real Property..................................................................76
SECTION 7.18 Insurance......................................................................76
SECTION 7.19 Borrowing Base Reports and Certificates........................................77
SECTION 7.20 Management Letters.............................................................78
SECTION 7.21 Permitted Acquisition Documents................................................77
SECTION 7.22 Other Information..............................................................77
SECTION 7.23 Cash Flow Projections..........................................................77
SECTION 7.24 Receivables Report.............................................................77
SECTION 7.25 Periodic Audit.................................................................78
ARTICLE 8 FINANCIAL COVENANTS...............................................................78
SECTION 8.1 Minimum EBITDA..................................................................78
ARTICLE 9 EVENTS OF DEFAULT.................................................................79
SECTION 9.1 Payment.........................................................................79
SECTION 9.2 Representations and Warranties..................................................79
SECTION 9.3 Certain Covenants...............................................................79
SECTION 9.4 Other Covenants.................................................................79
SECTION 9.5 Other Defaults..................................................................79
SECTION 9.6 Bankruptcy, Etc.................................................................80
SECTION 9.7 Judgments.......................................................................80
SECTION 9.8 Loan Documents..................................................................80
SECTION 9.9 Liens...........................................................................80
SECTION 9.10 Change of Control..............................................................80
SECTION 9.11 ERISA Events...................................................................81
SECTION 9.12 Subordination Provisions.......................................................81
SECTION 9.13 Management.....................................................................81
SECTION 9.14 Borrowing Base Deficiency......................................................81
SECTION 9.15 Note Escrow Agreement..........................................................82
- iv -
TABLE OF CONTENTS
Page
----
ARTICLE 10 THE ADMINISTRATIVE AGENT.........................................................82
SECTION 10.1 Authorization and Action.......................................................83
SECTION 10.2 Agent's Reliance, Etc..........................................................83
SECTION 10.3 ING and Affiliates.............................................................84
SECTION 10.4 Lender Party Credit Decision...................................................84
SECTION 10.5 Indemnification................................................................84
SECTION 10.6 Successor Administrative Agents................................................85
SECTION 10.7 Events of Default..............................................................86
ARTICLE 11 MISCELLANEOUS....................................................................86
SECTION 11.1 Amendments, Etc................................................................86
SECTION 11.2 Notices Etc....................................................................87
SECTION 11.3 No Waiver; Remedies; Counterclaims.............................................89
SECTION 11.4 Costs and Expenses.............................................................89
SECTION 11.5 Right of Set-off...............................................................90
SECTION 11.6 Binding Effect.................................................................91
SECTION 11.7 Assignments and Participations.................................................91
SECTION 11.8 Execution in Counterparts......................................................94
SECTION 11.9 No Liability of the Issuing Bank...............................................94
SECTION 11.10 Confidentiality...............................................................94
SECTION 11.11 Survival of Agreements and Representations; Construction......................95
SECTION 11.12 Assurances....................................................................95
SECTION 11.13 Severability..................................................................95
SECTION 11.14 JURISDICTION, ETC.............................................................96
SECTION 11.15 GOVERNING LAW.................................................................96
SECTION 11.16 WAIVER OF JURY TRIAL..........................................................96
SECTION 11.17 FINAL AGREEMENT...............................................................97
SECTION 11.18 Amendment, Restatement and Waiver.............................................97
- v -
TABLE OF CONTENTS
Page
----
EXHIBITS
Exhibit A - Form of Assignment and Acceptance
Exhibit B - Form of Revolving Credit Note
Exhibit C - Form of Compliance Certificate
Exhibit D - Form of Notice of Borrowing
Exhibit E - Form of Security Agreement
Exhibit F - Form of Borrowing Base Certificate
Exhibit G - Form of Intellectual Property Security Agreement
Exhibit H - Form of Subsidiary Guaranty
Exhibit I - Prior Loan Default Letter
SCHEDULES
Schedule I Commitments and Applicable Lending Offices
Schedule 4.2 Organization and Subsidiaries
Schedule 4.4 Required Authorizations and Approvals
Schedule 4.7 Inactive Subsidiaries
Schedule 4.9 Disclosed Litigation
Schedule 4.11 Welfare Plans
Schedule 4.13 Environmental Assessment Reports
Schedule 4.14 Restrictive Agreements
Schedule 4.16 Open Tax Years
Schedule 4.19(a) Existing Debt
Schedule 4.19(b) Surviving Debt
Schedule 4.20 No Defaults
Schedule 4.21 Owned Real Estate
Schedule 4.22 Leased Real Estate
Schedule 4.23 Material Contracts
Schedule 4.24 Investments
Schedule 4.25 Intellectual Property
Schedule 5.5 Insurance
Schedule 5.12 Certain Transactions
Schedule 6.1(c) Liens
Schedule 6.6(a) Investments in Subsidiaries
Schedule 6.17 Existing Issuances, Etc. of Stock
Schedule 6.19 Senior Subordinated Debt Holders
AMENDED AND RESTATED CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of April 30, 2001, by
and among MediaBay, Inc. (f/k/a Audio Book Club, Inc.), a Florida corporation
("MediaBay" or the "Company"), Xxxxx Xxxxxxx, Inc., a Delaware corporation
("Xxxxx Xxxxxxx"), and Audio Book Club, Inc., a Delaware corporation ("Audio
Book Club," and together with MediaBay and Xxxxx Xxxxxxx, the "Borrowers" and
each individually, a "Borrower"), the banks, financial institutions and other
institutional lenders listed on the signature pages hereof as the Lender Parties
(the "Lender Parties"), ING (U.S.) CAPITAL LLC, as issuing bank ("Issuing Bank")
and as administrative agent (together with any successor appointed pursuant to
Article 10, the "Administrative Agent") for the Lender Parties (the "Credit
Agreement").
PRELIMINARY STATEMENTS:
MediaBay desires to amend and restate the terms and provisions of the
Credit Agreement, dated as of December 31, 1998 (as amended by Amendment and
Supplement No. 1 to the Credit Agreement dated as of June 14, 1999, Amendment
No. 2 to the Credit Agreement dated as of November 10, 1999, Amendment No. 3 to
the Credit Agreement dated as of April 4, 2000, Amendment No. 4 to the Credit
Agreement dated as of July 29, 2000, Amendment No. 5 to the Credit Agreement
dated as of August 9, 2000, and Amendment No. 6 to the Credit Agreement dated as
of November 30, 2000, the "Prior Credit Agreement"), among MediaBay, the banks,
financial institutions and other institutional lenders named therein as Initial
Lenders and Fleet National Bank as Initial Issuing Bank, Swing Line Bank and
Administrative Agent, in the form hereof in order to, among other things, extend
the Revolving Credit Termination Date to September 30, 2002 and to add Xxxxx
Xxxxxxx and Audio Book Club as Borrowers.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
ARTICLE 1
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1 Certain Defined Terms. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
"Acquisition Puts" means the obligation of any Borrower or any of its
Subsidiaries to repurchase any of such Borrower's Common Stock or other Equity
Interests as and may be required as a result of any acquisition and as set forth
on Schedule 6.17.
"Additional Collateral Documents" has the meaning specified in Section
5.13(e).
"Administrative Agent" has the meaning specified in the recital of parties
to this Agreement.
"Administrative Agent's Account" means the account of the Administrative
Agent maintained by the Administrative Agent with The Chase Manhattan Bank,
Account Name: ING
(U.S.) Capital LLC, Account No. 000-000-000, Attention: Xxx Xxxx or such other
account as Administrative Agent shall designate in writing.
"Advance" means a Revolving Credit Advance or a Letter of Credit Advance.
"Affiliate" means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person or is a director or officer of such Person. For purposes of this
definition, (a) the term "control" (including the terms "controlling,"
"controlled by" and "under common control with") of a Person means the
possession, direct or indirect, of the power to vote 50% or more of the Voting
Stock of such Person or to direct or cause the direction of the management and
policies of such Person, whether through the ownership of Voting Stock, by
contract or otherwise and (b) the families of any one or more of Xxxxxx Xxxxxxx,
Xxxxxx Xxxxxxx and Xxxxxxx Xxxxxxx shall be deemed to be Affiliates of each of
them. Without limiting the foregoing, a trust shall be deemed an Affiliate of
the trust's trustee.
"After-Acquired Mortgaged Property" means any parcel (or adjoining parcels)
of real property (including any leaseholds) acquired by any Loan Party after the
Effective Date subject to a Mortgage granted to the Administrative Agent for the
benefit of the Secured Parties pursuant to Section 5.13.
"Applicable Lending Office" means, with respect to each Lender Party, such
Lender Party's Domestic Lending Office.
"Applicable Margin" means at any time and from time to time for Prime Rate
Advances a percentage per annum equal to 2.00%.
"Asset Disposition" shall mean the disposition of any or all of the fixed
assets of any Borrower or any of its Subsidiaries whether by sale, lease,
transfer, loss, damage, destruction, condemnation or otherwise; provided,
however, that for purposes of Section 2.6(b), the term "Asset Disposition" shall
not include any sale, lease, transfer or other disposition of Inventory in the
ordinary course of business or any sale pursuant to Section 6.5(b), (e) or (f).
"Assignment and Acceptance" means an assignment and acceptance entered into
by a Lender Party and an Eligible Assignee, and accepted by the Administrative
Agent and, so long as no Event of Default shall have occurred and be continuing,
by the Borrowers, in accordance with Section 11.7 and in substantially the form
of Exhibit A hereto.
"Audio Book Club" has the meaning specified in the recital of parties to
this Agreement.
"Available Amount" of any Letter of Credit means, at any time, the maximum
amount available to be drawn under such Letter of Credit at such time (assuming
compliance at such time with all conditions to drawing).
"Bank Hedge Agreement" means any interest rate Hedge Agreement permitted
under this Agreement that is entered into by and between the Borrowers and any
Lender.
"Borrower(s)" has the meaning specified in the recital of parties to this
Agreement.
- 2 -
"Borrowers' Account" means the account of the Borrowers maintained by the
Borrowers with Fleet National Bank at its office at Xxx Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, Account No. 9417544039.
"Borrowing" means a Revolving Credit Borrowing.
"Borrowing Base" on any date means the sum of (i) 70% of the value of the
net Eligible Receivables plus (ii) 40% of the value of the net Eligible
Inventory, in each case set forth in the most recent Borrowing Base Certificate
delivered to the Administrative Agent pursuant to the terms of this Agreement on
or prior to such date.
"Borrowing Base Certificate" means a certificate in substantially the form
of Exhibit F hereto, duly certified by the Chief Financial Officer of MediaBay.
"Borrowing Base Deficiency" means, at any time, the failure of the
Borrowing Base at such time to equal or exceed the lesser of (a) the aggregate
principal amount of the Revolving Credit Advances and the Letter of Credit
Advances outstanding at such time plus the aggregate Available Amount under all
Letters of Credit outstanding at such time or (b) $5,000,000.
"Business Day" means a day of the year on which banks are not required or
authorized by law to close in New York, New York.
"Capital Expenditures" means, for any Person for any period, the sum of all
expenditures made, directly or indirectly, by such Person or any of its
Subsidiaries during such period for Equipment, fixed assets, real property or
improvements, and including computer software and internet development costs or
other costs typically treated as capital expenditures pursuant to GAAP, or for
replacements or substitutions therefor or additions thereto, that have been or
should be, in accordance with GAAP, reflected as additions to property, plant or
Equipment on a Consolidated balance sheet of such Person; provided, that Capital
Expenditures shall not include capital expenditures to the extent that such
expenditures constitute a reinvestment of Net Cash Proceeds from any Asset
Disposition permitted under this Agreement in similar fixed assets, which
investment is made before or within one hundred eighty days after receipt of
such Net Cash Proceeds.
"Capitalized Leases" means all leases that have been or should be, in
accordance with GAAP, recorded as capitalized leases.
"Cash Equivalents" means any of the following, to the extent owned by a
Borrower or any of its Subsidiaries, free and clear of all Liens other than
Liens created under the Collateral Documents: (a) readily marketable direct
obligations of the Government of the United States or any agency or
instrumentality thereof or obligations unconditionally guaranteed by the full
faith and credit of the Government of the United States having a maturity of not
greater than one year from the date of issuance thereof, (b) insured
certificates of deposit of or time deposits having a maturity of not greater
than one year from the date of issuance thereof with , or overnight Federal
Funds transactions that are issued or sold by, any commercial bank that is a
Lender Party or a member of the Federal Reserve System that issues (or the
parent of which issues) commercial paper rated as described in clause (c) and is
organized under the laws of the United States or any
- 3 -
State thereof and has combined capital and surplus of at least 500 million, (c)
commercial paper, including asset-backed commercial paper, having a maturity of
not greater than one year from the date of issuance thereof, in an aggregate
amount of no more than $2,500,000 per issuer outstanding at any time, issued by
any corporation organized under the laws of any State of the United States and
rated at least "Prime-1" (or the then equivalent grade) by Xxxxx'x Investors
Service, Inc. or "A-1" (or the then equivalent grade) by Standard & Poor's
Ratings Group or an equivalent rating of any other nationally recognized rating
agency, (d) eurodollar time deposits maturing not more than one year after such
time with any commercial bank of the stature referred to in clause (b) above;
(e) any repurchase agreement entered into with any commercial bank of the
stature referred to in clause (b) or a registered broker/dealer of the stature
referred to in clause (f) below which is (i) secured by a perfected security
interest in any obligation of the type described in any of the clauses (a)
through (d) and (ii) has a market value at the time such repurchase agreements
is entered into of not less than 100% of the repurchase obligation of such
commercial bank or broker/dealer thereunder, (f) investments in short-term asset
management accounts managed by any commercial bank of the stature referred to in
clause (b) or a registered securities broker/dealer having regulatory net
capital, as per its most recently filed FOCUS report, of not less than $100,000
million which are invested in indebtedness of any state or municipality of the
United States and which are rated under one of the two highest ratings from any
nationally recognized rating agency and/or general investment contracts and/or
investments of the type described in clauses (a) through (e) above or (g)
insured money market funds investing primarily in investments of the types
described in clauses (a) through (f).
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C.ss.9601 et seq., as amended from time to time.
"CERCLIS" means the Comprehensive Environmental Response, Compensation and
Liability Information System maintained by the U.S. Environmental Protection
Agency.
"Change of Control" means any of the following: (a) Xxxxxx Xxxxxxx, Xxxxxxx
Xxxxxxx and/or Xxxxxx Xxxxxxx, together with their Affiliates, shall at any time
cease to own and control at least 15% of the common stock of MediaBay
outstanding at any time after the date hereof; or (b) Xxxxx Xxxxxxx or Audio
Book Club cease to be Wholly-Owned Subsidiaries of MediaBay; or (c) during any
period, individuals who on the Effective Date constituted the Board of Directors
of any Borrower shall cease for any reason to constitute at least a majority
thereof unless the election, or the nomination for election by such Borrower's
shareholders, of each new director shall be approved by a vote of at least
two-thirds of the directors then still in office who were directors at the
beginning of the period, or (d) Xxxxxx Xxxxxxx or any trust of which he is a
beneficiary shall at any time at any time after the Effective Date cease to own
and control at least 2,960,000 shares of the common stock of MediaBay. For
purposes of this definition "control", when used with respect to any specified
Person, means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract, by family relationship or otherwise; and the terms "controlling" and
"controlled" have the meanings correlative to the foregoing.
"Collateral" means all "Collateral" referred to in the Collateral Documents
and all other property that is or is intended to be subject to any Lien in favor
of the Administrative Agent for the benefit of the Secured Parties.
- 4 -
"Collateral Documents" means the Security Agreement, the Intellectual
Property Security Agreement, each Collateral Assignment of Lease, the Mortgages
and any other agreement that creates or purports to create a Lien in favor of
the Administrative Agent for the benefit of the Secured Parties, including the
Additional Collateral Documents delivered pursuant to Section 5.13.
"Commitment" means a Revolving Credit Commitment or a Letter of Credit
Commitment.
"Company" has the meaning specified in the recital of parties to this
Agreement.
"Compliance Certificate" with respect to the Borrowers and their
Subsidiaries, a certificate in substantially the form of Exhibit C hereto to the
effect that: (a) as of the effective date of the certificate, no Default or
Event of Default under this Agreement exists or would exist after giving effect
to the action intended to be taken by any Loan Party, as described in such
certificate, including, without limitation, that the covenant set forth in
Article 8 hereof would not be breached after giving effect to such action,
together with a calculation in reasonable detail, and in form reasonably
satisfactory to the Administrative Agent, of such compliance, and (b) the
representations and warranties contained in Article 4 hereof are true and with
the same effect as though such representations and warranties were made on the
date of such certificate, unless stated to relate to a specific earlier date in
which case such specified representations and warranties shall be true and
correct as of such earlier date, and, except for changes in the ordinary course
of business not prohibited by this Agreement, none of which, either singly or in
the aggregate, have had a Material Adverse Effect on the Borrowers and their
Subsidiaries taken as a whole, which certificate shall be executed and delivered
by the chief financial officer of each of the Borrowers.
"Confidential Information" means information that any Borrower furnishes to
the Administrative Agent or any Lender Party other than any such information
that is or becomes generally available to the public other than as a result of a
breach by the Administrative Agent or any Lender Party of its obligations
hereunder or that is or becomes available to the Administrative Agent or such
Lender Party from a source other than a Borrower that is not, to the best of the
Administrative Agent's or such Lender Party's knowledge, acting in violation of
a confidentiality agreement with the Borrowers, provided that Confidential
Information shall include the Information Memorandum and all projections,
forecasts, budgetary data, business plans and other forward-looking information
of the Borrowers and their Subsidiaries unless such information becomes publicly
available as described above.
"Consolidated" refers to the consolidation of accounts, in accordance with
GAAP, of any Person and all of its Subsidiaries, and if not specified, the
Borrowers and all of their Subsidiaries.
"Consolidated Debt to EBITDA" has the same meaning as Consolidated Debt to
EBITDA Ratio.
"Consolidated Debt to EBITDA Ratio" means, for any fiscal quarter of a
Borrower, a ratio of (a) Debt of such Borrower and its Subsidiaries as at the
end of such fiscal quarter to (b)
- 5 -
EBITDA for the most recently completed four fiscal quarters of such Borrower and
its Subsidiaries.
"Current Assets" of any Person means all assets of such Person that would,
in accordance with GAAP, be classified as current assets of a company conducting
a business the same as or similar to that of such Person, after deducting
adequate reserves in each case in which a reserve is proper in accordance with
GAAP.
"Current Liabilities" of any Person means (a) Debt of such Person, except
Funded Debt, that by its terms is payable on demand or matures within one year
after the date of determination (excluding any Debt renewable or extendible, at
the option of such Person, to a date more than one year from such date or
arising under a revolving credit or similar agreement that obligates the lender
or lenders to extend credit during a period of more than one year from such
date), (b) all amounts of Funded Debt of such Person required to be paid or
prepaid within one year after such date and (c) all other items (including taxes
accrued as estimated) that in accordance with GAAP would be classified as
current liabilities of such Person.
"Debt" of any Person means, without duplication, the following:
(a) all indebtedness of such Person for borrowed money;
(b) all Obligations of such Person for the deferred purchase price of
property or services other than accounts payable and accrued expenses
included in Current Liabilities which payables and expenses were incurred
in respect of property or services purchased in the ordinary course of
business;
(c) all Obligations of such Person evidenced by notes, bonds,
debentures or other similar borrowing or securities instruments;
(d) all Obligations of such Person created or arising under any
conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of
the seller or lender under such agreement in the event of default are
limited to repossession or sale of such property);
(e) all Obligations of such Person as lessee under Capitalized Leases;
(f) all Obligations, contingent or otherwise, of such Person under
acceptance, letter of credit or similar facilities;
(g) all Obligations of such Person to purchase, redeem, retire,
defease or otherwise make any payment in respect of any capital stock of or
other ownership or profit interest in such Person or any other Person or
any warrants, rights or options to acquire such capital stock other than
the Obligations of any Borrower or its Subsidiaries pursuant to the
Acquisition Puts, provided that in the event such Acquisition Puts are
converted into indebtedness of such Borrower or its Subsidiaries any such
amounts owed in respect thereof shall be deemed to be "Debt";
- 6 -
(h) all Debt of others referred to in clauses (a) through (g) above or
clause (i) below guaranteed directly or indirectly in any manner by such
Person, or in effect guaranteed directly or indirectly by such Person
through an agreement (A) to pay or purchase such Debt or to advance or
supply funds for the payment or purchase of such Debt, (B) to purchase,
sell or lease (as lessee or lessor) property, or to purchase or sell
services, primarily for the purpose of enabling the debtor to make payment
of such Debt or to assure the holder of such Debt against loss, (C) to
supply funds to or in any other manner invest in the debtor (including any
agreement to pay for property or services irrespective of whether such
property is received or such services are rendered) primarily for the
purpose of enabling the debtor to make payment of such Debt or to assure
the holder of such Debt against loss, or (D) otherwise to assure a creditor
against loss; and
(i) all Debt referred to in clauses (a) through (h) above of another
Person secured by (or for which the holder of such Debt has an existing
right, contingent or otherwise, to be secured by) any Lien on property
(including, without limitation, accounts, contract rights or inventory)
owned by such Person, even though such Person has not assumed or become
liable for the payment of such Debt;
provided, however, that for purposes of clarification, customary indemnities
issued by any Borrower or its Subsidiaries in the ordinary course of business
shall not be deemed to be Debt.
"Debt Issuance" means any issuance or sale or other incurrence by any
Borrower or any of its Subsidiaries of any Debt; provided, however, that for
purposes of determination of Net Cash Proceeds under Section 2.6(b)(iii), the
term "Debt Issuance" shall not include the incurrence of Debt permitted under
Section 6.2.
"Default" means any Event of Default or any event that would constitute an
Event of Default but for the requirement that notice be given or time elapse or
both.
"Defaulted Advance" means, with respect to any Lender Party at any time,
the portion of any Advance required to be made by such Lender Party to the
Borrowers pursuant to Section 2.1 or 2.2 at or prior to such time which has not
been made by such Lender Party or by the Administrative Agent for the account of
such Lender Party pursuant to Section 2.2(e) as of such time. In the event that
a portion of a Defaulted Advance shall be deemed made pursuant to Section
2.15(a), the remaining portion of such Defaulted Advance shall be considered a
Defaulted Advance originally required to be made pursuant to Section 2.1 on the
same date as the Defaulted Advance so deemed made in part.
"Defaulted Amount" means, with respect to any Lender Party at any time, any
amount required to be paid by such Lender Party to the Administrative Agent or
any other Lender Party hereunder or under any other Loan Document at or prior to
such time which has not been so paid as of such time, including, without
limitation, any amount required to be paid by such Lender Party to (a) the
Issuing Bank pursuant to Section 2.3(c) to purchase a portion of a Letter of
Credit Advance made by the Issuing Bank, (b) the Administrative Agent pursuant
to Section 2.2(e) to reimburse the Administrative Agent for the amount of any
Advance made by the Administrative Agent for the account of such Lender Party,
(c) any other Lender Party pursuant to Section 2.13 to purchase any
participation in Advances owing to such other Lender Party and (d) the
- 7 -
Administrative Agent or the Issuing Bank pursuant to Section 10.5 to reimburse
the Administrative Agent or the Issuing Bank for such Lender Party's ratable
share of any amount required to be paid by the Lender Parties to the
Administrative Agent or the Issuing Bank as provided therein. In the event that
a portion of a Defaulted Amount shall be deemed paid pursuant to Section
2.15(b), the remaining portion of such Defaulted Amount shall be considered a
Defaulted Amount originally required to be paid hereunder or under any other
Loan Document on the same date as the Defaulted Amount so deemed paid in part.
"Defaulting Lender" means, at any time, any Lender Party that, at such
time, (a) owes a Defaulted Advance or a Defaulted Amount or (b) shall take any
action or be the subject of any action or proceeding of a type described in
Section 9.6.
"Disclosed Litigation" has the meaning specified in Section 4.9.
"Disposal" means the discharge, deposit, injection, dumping, spilling,
leaking or placing of any solid waste or hazardous waste, as those terms are
defined by any federal, state, local or foreign law, into or on any land or
water so that such solid waste or hazardous waste or any constituents thereof
may enter the environment or be emitted into the air or discharged into any
waters, including ground waters.
"Domestic Lending Office" means, with respect to any Lender Party, the
office of such Lender Party specified as its "Domestic Lending Office" opposite
its name on Schedule I hereto or in the Assignment and Acceptance pursuant to
which it became a Lender Party, as the case may be, or such other office of such
Lender Party as such Lender Party may from time to time specify to the Borrowers
and the Administrative Agent.
"Domestic Subsidiary" means any Subsidiary organized under the laws of the
United States of America or any State thereof.
"EBITDA" means, for any period, the sum, determined on a Consolidated
basis, of (i) net income (or net loss), (ii) Interest Expense, (iii) income tax
expense, (iv) depreciation expense, (v) extraordinary and nonrecurring losses
and (vi) amortization expense, minus extraordinary and nonrecurring gains (in
each case determined in accordance with GAAP) plus (i) the pro forma effect on
EBITDA for such period of any Permitted Acquisition made by a Borrower (such pro
forma effect to be reasonably acceptable to the Administrative Agent) and (ii)
non-cash stock compensation, provided that, as required by the last sentence of
Section 1.3, EBITDA shall be adjusted for the effect of reporting advertising
expenses and New Member Acquisition Costs as expensed as incurred.
"Effective Date" has the meaning specified in Section 11.18(a).
"Eligible Assignee" means with respect to any Facility (other than the
Letter of Credit Facility), (a) a Lender; (b) an Affiliate of a Lender; and (c)
subject to the prior approval of the Administrative Agent and, so long as no
Event of Default shall have occurred and be continuing, the Borrowers, such
approval by the Borrowers not to be unreasonably withheld or delayed, (i) a
commercial bank organized under the laws of the United States, or any State
thereof, and having total assets in excess of $500,000,000; (ii) a savings and
loan association or savings bank
- 8 -
organized under the laws of the United States, or any State thereof, and having
total assets in excess of $500,000,000; (iii) a commercial bank organized under
the laws of any other country that is a member of the OECD or has concluded
special lending arrangements with the International Monetary Fund associated
with its General Arrangements to Borrow or of the Cayman Islands, or a political
subdivision of any such country, and having total assets in excess of
$500,000,000, so long as such bank is acting through a branch or agency located
in the United States; (iv) the central bank of any country that is a member of
the OECD; and (v) a finance company, insurance company or other financial
institution or fund (whether a corporation, partnership, trust or other entity)
that is engaged in making, purchasing or otherwise investing in commercial loans
in the ordinary course of its business and having total assets in excess of
$500,000,000; and, with respect to the Letter of Credit Facility, a Person that
is an Eligible Assignee under subclause (i) or (iii) of clause (c) of this
definition and is approved by the Administrative Agent and the Borrowers, such
approval by the Borrowers not to be unreasonably withheld or delayed; provided,
however, that no Loan Party or Affiliate of a Loan Party shall qualify as an
Eligible Assignee under this definition.
"Eligible Inventory" means Inventory of a Borrower located in the
continental United States (minus any reserves reasonably requested by the
Administrative Agent) as to which (a) such Borrower has acquired title, (b) the
Lenders have a first and only perfected security interest and (c) such Borrower
shall have furnished to the Administrative Agent information adequate for
purposes of identification at times and in form and substance as may be
reasonably requested by the Administrative Agent; provided, that Inventory shall
not constitute Eligible Inventory (i) if and when such Borrower sells it,
otherwise passes title thereto or consumes it, (ii) if the Lenders release their
security interest therein, or (iii) to the extent that it (A) is obsolete or not
currently useable or salable in the ordinary course of such Borrower's business,
(B) is produced in violation of the Fair Labor Standards Act and subject to the
so-called "hot goods" provision contained in Title 29, ss.215(a) (1) of the
United States Code, (C) constitutes raw materials or work in process (i.e. is
other than "finished goods"), or (D) is Inventory held for consumption by such
Borrower or a Subsidiary of such Borrower and not for sale in the ordinary
course of business. Any Inventory which is Eligible Inventory at any time, but
which subsequently fails to meet any of the foregoing requirements, shall
forthwith cease to be Eligible Inventory until such time as it once again meets
all of the foregoing requirements.
"Eligible Receivables" means only such Receivables of a Borrower as the
Administrative Agent, in its reasonable judgment, shall from time to time elect
to consider Eligible Receivables for purposes of this Agreement. The value of
such Receivables shall be determined by the Administrative Agent in its
reasonable judgment taking into consideration, among other factors, their book
value determined in accordance with GAAP, including, not by limitation, reserves
with respect to such Receivables arising from xxxx-and-hold, guaranteed sale,
sale-or-return, sale on consignment basis or otherwise. By way of example only
(without deducting amounts more than once), and without limiting the discretion
of the Administrative Agent to consider any Receivables not to be Eligible
Receivables, the Administrative Agent shall consider any of the following
classes of Receivables not to be Eligible Receivables:
(a) Receivables that do not arise out of sales of goods or rendering
of services in the ordinary course of such Borrower's business;
- 9 -
(b) Receivables on terms other than those normal or customary in such
Borrower's business;
(c) Receivables owing from any Person that is an Affiliate of such
Borrower;
(d) Receivables more than 60 days past the date due, with respect to
retail Receivables, or more than 90 days past the original invoice date,
with respect to consumer Receivables;
(e) Retail Receivables owing from any one retail customer from which
more than 50% of the retail Receivables owing from such customer is more
than 60 days past due;
(f) Receivables owing from any Person that shall take or be the
subject of any action or proceeding of a type described in Section 9.6;
(g) Receivables (i) owing from any Person that is also a supplier to
or creditor of such Borrower unless such Person has waived any right of
set-off in a manner reasonably acceptable to the Administrative Agent or
(ii) representing any manufacturer's or supplier's credits, discounts,
incentive plans or similar arrangements entitling such Borrower to
discounts on future purchases therefrom;
(h) Receivables owing from an account debtor that is an agency,
department or instrumentality of the United States or any State thereof
unless such Borrower shall have satisfied the requirements of the
Assignment of Claims Act of 1940, as amended, and any similar State
legislation and the Administrative Agent is satisfied as to the absence of
set-offs, counterclaims and other defenses on the part of such account
debtor;
(i) Receivables the full and timely payment of which the
Administrative Agent in its reasonable judgment, after consultation with
such Borrower, believes to be doubtful; and
(j) Receivables in respect of which the Security Agreement, after
giving effect to the related filings of financing statements that have then
been made, if any, does not or has ceased to create a valid and perfected
first and only priority lien or security interest in favor of the Secured
Parties securing the Secured Obligations.
"Environmental Action" means any action, suit, demand, demand letter,
claim, notice of non-compliance or violation, notice of liability or potential
liability, investigation, proceeding, consent order or consent agreement
relating in any way to any Environmental Law, any Environmental Permit or
Hazardous Material or arising from alleged injury or threat to public health and
safety or the environment, including, without limitation, (a) by any
governmental or regulatory authority or third party for enforcement, cleanup,
Removal, Response, Remedial or other actions or damages and (b) by any
governmental or regulatory authority or third party for damages, contribution,
indemnification, cost recovery, compensation or injunctive relief.
"Environmental Law" means any international or transnational law, federal,
state, local or foreign statute, law, ordinance, rule, regulation, code, order,
writ, judgment, injunction, decree or judicial or agency interpretation, policy
or guidance relating to pollution or protection of the
- 10 -
environment or natural resources, including, without limitation, those relating
to the use, handling, transportation, treatment, storage, disposal, threatened
release, release or discharge of Hazardous Materials.
"Environmental Permit" means any permit, approval, identification number,
license or other authorization required under any Environmental Law.
"Equipment" has the meaning specified in Section 1(a) of the Security
Agreement.
"Equity Issuance" means any issuance or sale by a Borrower or any of its
Subsidiaries of its capital stock or other equity securities or any obligations
convertible into or exchangeable for, or giving any Person a right, option or
warrant to acquire such stock, securities or such convertible or exchangeable
obligations; provided, however, that for purposes of Section 2.6(b)(iii), the
term "Equity Issuance" shall not include any issuance or sale of (a) Equity
Interests of such Borrower to any Person as consideration paid in connection
with a Permitted Acquisition; (b) Equity Interests of such Borrower issued on or
before the Effective Date in connection with any acquisition which are
consistent with the provisions of Section 6.17 and disclosed on Schedule 6.17
hereto; (c) common stock of such Borrower issued to any director of such
Borrower required by applicable law in connection with such Person acting in
such capacity; (d) common stock of such Borrower to management and employees
thereof, respectively, pursuant to any stock option plan permitted hereunder or
the exercise of options issued pursuant thereto; (e) common stock of such
Borrower issued upon exercise of any outstanding warrants, rights or options or
upon conversion of any outstanding convertible securities, in each case only if
outstanding on the Effective Date or issued to the holder of the Senior
Subordinated Debt thereafter in accordance with the Letter Agreement; (f) Equity
Interests issued in compliance with the provisions of Section 6.17(e), except to
the extent net proceeds thereof exceed the net proceeds actually applied to
replace or repay, in whole or in part, the Senior Subordinated Debt in
accordance with Section 6.17 (e); and (g) Equity Interests issued by such
Borrower to the extent the net proceeds therefrom are applied to satisfy such
Borrower's obligations under the Acquisition Puts (in each case if then required
to be paid) so long as (i) such application is made within one hundred eighty
(180) days after the issuance of such Equity Interests, (ii) any such net
proceeds not so applied within such period shall be applied to repay the
Advances in accordance with Section 2.6, and (iii) such Borrower otherwise
complies with Section 6.7(c) and Section 6.7(e) in satisfying the Acquisition
Puts.
"Equity Interests" means, in any Person, any and all shares, interests,
participations, rights or other equivalents (however designated) of any capital
stock or other ownership of any profit interest, and any and all warrants,
rights, options, obligations or other securities of or in such Person, and
rights to acquire any of the foregoing, including, without limitation,
partnership interests and joint venture (whether general or limited) and any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, such
partnership or joint venture, but excluding debt for borrowed money and
excluding any debt security that is convertible into, or exchangeable for any of
the foregoing equity interests.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
- 11 -
"ERISA Affiliate" means any Person that for purposes of Title IV of ERISA
is a member of the controlled group of any Loan Party, or under common control
with any Loan Party, within the meaning of Section 414 of the Internal Revenue
Code.
"ERISA Event" means (a) (i) the occurrence of a reportable event, within
the meaning of Section 4043 of ERISA, with respect to any Plan unless the 30-day
notice requirement with respect to such event has been waived by the PBGC, or
(ii) the requirements of subsection (1) of Section 4043(b) of ERISA (without
regard to subsection (2) of such Section) are met with respect to a contributing
sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan, and an event
described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA
is reasonably expected to occur with respect to such Plan within the following
30 days; (b) the application for a minimum funding waiver with respect to a
Plan; (c) the provision by the administrator of any Plan of a notice of intent
to terminate such Plan under ERISA Section 4041(c), pursuant to Section
4041(a)(2) of ERISA (including any such notice with respect to a plan amendment
referred to in Section 4041(e) of ERISA); (d) the cessation of operations at a
facility of any Loan Party or any ERISA Affiliate in the circumstances described
in Section 4062(e) of ERISA; (e) the withdrawal by any Loan Party or any ERISA
Affiliate from a Multiple Employer Plan during a plan year for which it was a
substantial employer, as defined in Section 4001(a)(2) of ERISA; (f) the
conditions for imposition of a lien under Section 302(f) of ERISA shall have
been met with respect to any Plan; (g) the adoption of an amendment to a Plan
requiring the provision of security to such Plan pursuant to Section 307 of
ERISA; or (h) the institution by the PBGC of proceedings to terminate a Plan
pursuant to Section 4042 of ERISA, or the occurrence of any event or condition
described in Section 4042 of ERISA that constitutes grounds for the termination
of, or the appointment of a trustee to administer, such Plan.
"Events of Default" has the meaning specified in Article 9.
"Excess Cash Flow" means for any period the sum of (a) EBITDA of MediaBay
and its Subsidiaries for such period (provided that EBITDA, for purposes of this
definition of Excess Cash Flow, shall be computed without giving effect to the
final clause of the definition of "EBITDA" relating to the addition of the pro
forma effect of Permitted Acquisitions) plus (b) the aggregate amount of all
non-cash charges deducted from Consolidated net income for such period, but not
added back in arriving at EBITDA plus (c) if there was a net increase in
Consolidated Current Liabilities of MediaBay and its Subsidiaries during such
period, the amount of such net increase other than arising out of (i) Debt
permitted pursuant to Section 6.2, (ii) the reclassification of the Obligations,
and (iii) the Huntingdon Financing Debt and the Huntingdon Secured Subordinated
Debt, plus (d) if there was a net decrease in Consolidated Current Assets
(excluding cash and Cash Equivalents and deferred member acquisition costs) of
MediaBay and its Subsidiaries during such period the amount of such net decrease
less (e) the aggregate amount of mandatory and optional prepayments (other than
optional prepayments of the Letter of Credit Advances or Revolving Credit
Advances made pursuant to clause (i) of the second sentence of Section 2.6(a))
or repayments of principal made by MediaBay and its Subsidiaries on any Funded
Debt of MediaBay and its Subsidiaries during such period or made or required to
be made pursuant to Section 2.6(b) during or subsequent to such period less (f)
Capital Expenditures of MediaBay and its Subsidiaries during such period less
(g) the aggregate amount of all federal, state, local and foreign taxes paid by
MediaBay and its
- 12 -
Subsidiaries during such period less (h) the aggregate amount of interest paid
on any Debt of MediaBay and its Subsidiaries during such period less (i) the
aggregate amount of all non-cash credits included in arriving at such EBITDA
less (j) if there was a net decrease in Consolidated Current Liabilities
(excluding the reclassification of the Obligations, the Huntingdon Financing
Debt and the Huntingdon Secured Subordinated Debt) of MediaBay and its
Subsidiaries during such period, the amount of such net decrease less (k) if
there was a net increase in Consolidated Current Assets (excluding cash and Cash
Equivalents) of MediaBay and its Subsidiaries during such period the amount of
such increase less (l) dividends paid by MediaBay to the holders of its common
stock during such period to the extent that MediaBay is permitted to pay such
dividends under this Agreement.
"Existing Debt" has the meaning specified in Section 4.19(a).
"Extraordinary Receipt" means any cash received by or paid to or for the
account of any Person not in the ordinary course of business, including, without
limitation, tax refunds, pension plan reversions, proceeds of insurance (other
than proceeds of business interruption and associated similar insurance to the
extent such proceeds constitute compensation for lost earnings), condemnation
awards (and payments in lieu thereof) and indemnity payments; provided, however,
that an Extraordinary Receipt shall not include cash receipts received from
proceeds of insurance, condemnation awards (and payments in lieu thereof) or
indemnity payments to the extent that such proceeds, awards or payments (a) in
respect of loss or damage to Equipment, fixed assets, real property or Inventory
are applied (or in respect of which expenditures were previously incurred) to
replace or repair the Equipment, fixed assets, real property or Inventory in
respect of which such proceeds, awards or payments were received in accordance
with the terms of the Loan Documents, so long as (i) such application is made
within one hundred eighty (180) days after such Person's receipt of such
proceeds, awards or payments and (ii) such proceeds, awards or payments are
received by such Person within fifteen (15) months after the occurrence of such
damage or loss; or (b) are received by any Person in respect of any third party
claim against such Person and applied to pay (or to reimburse such Person for
its prior payment of) such claim and the costs and expenses of such Person with
respect thereto.
"Facility" means the Revolving Credit Facility or the Letter of Credit
Facility.
"Federal Funds Rate" means, for any period, a fluctuating interest rate per
annum equal for each day during such period to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Fiscal Year" means a fiscal year of any Borrower and its Consolidated
Subsidiaries ending on December 31 in any calendar year.
"Fleet" means Fleet National Bank in its capacity as a Lender or Issuing
Bank or Swing Line Bank under the Prior Credit Agreement.
- 13 -
"Foreign Subsidiary" means any Subsidiary organized under the laws of any
jurisdiction other than the United States of America or any State thereof.
"Funded Debt" means, with respect to the Borrowers, the Advances, and with
respect to the Borrowers and the other Loan Parties and any other Person, all
other Debt of such Person that by its terms matures more than one year after the
date of determination or matures within one year from such date but is renewable
or extendible, at the option of such Person, to a date more than one year after
such date or arises under a revolving credit or similar agreement that obligates
the lender or lenders to extend credit during a period of more than one year
after such date, including the current portion of all such Debt.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board and statements, pronouncements, rules
and regulations of the Securities and Exchange Commission that are applicable to
the circumstances as of the date of determination.
"Guaranteed Obligations" has the meaning specified in the Subsidiary
Guaranties.
"Guarantors" means (a) each Domestic Subsidiary of the Borrowers (other
than Xxxxx Xxxxxxx and Audio Book Club and the Inactive Subsidiaries) and (b)
each Person which shall have executed and delivered or become a party to a
Subsidiary Guaranty hereunder.
"Hazardous Materials" means (a) petroleum or petroleum products,
by-products or breakdown products, radioactive materials, asbestos-containing
materials, polychlorinated biphenyls and radon gas and (b) any other chemicals,
materials or substances designated, classified or regulated as hazardous or
toxic or as a pollutant or contaminant under any Environmental Law.
"Hedge Agreements" means interest rate swap, cap or collar agreements,
interest rate future or option contracts, currency swap agreements, currency
future or option contracts and other similar agreements.
"Hedge Bank" means any Lender in its capacity as a party to a Bank Hedge
Agreement.
"Huntingdon" means Huntingdon Corporation, a Florida corporation.
"Huntingdon Financing Debt" means the $2,500,000 senior secured loan (which
may be increased to $3,000,000) made to MediaBay and its Subsidiaries on or
about the date hereof by Huntingdon or its affiliates which, on the Huntingdon
Issue Date will become evidenced by the Huntingdon Senior Secured Note.
"Huntingdon Financing Documents" means all documents entered into or
delivered in connection with the Huntingdon Financing Debt including, without
limitation, the Huntingdon Senior Secured Note.
- 14 -
"Huntingdon Financing Intercreditor Agreement" means the Intercreditor
Agreement dated the date of this Agreement among, inter alia, the lenders of the
Huntingdon Financing Debt and the Lenders, and comprising one of the Huntingdon
Financing Documents.
"Huntingdon Issue Date" means the tenth calendar day following the date on
which the Company sends written notice to its shareholders of the Huntingdon
Financing Debt and the Huntingdon Secured Subordinated Debt.
"Huntingdon Secured Subordinated Debt" means the secured subordinated loan
in the amount of $800,000 made to MediaBay pursuant to the Huntingdon Secured
Subordinated Note.
"Huntingdon Secured Subordinated Debt Documents" means all documents
entered into or delivered in connection with the Huntingdon Secured Subordinated
Debt, including, without limitation, the Huntingdon Secured Subordinated Note.
"Huntingdon Secured Subordinated Intercreditor Agreement" means the
Intercreditor Agreement dated the date of this Agreement among, inter alia, the
lenders of the Huntingdon Secured Subordinated Debt and the Lenders, and
comprising one of the Huntingdon Secured Subordinated Debt Documents.
"Huntingdon Secured Subordinated Note" means that certain secured
convertible subordinated promissory note in the amount of $800,000 which will be
dated as of the Huntingdon Issue Date payable by MediaBay to Huntingdon.
"Huntingdon Senior Secured Note" means that certain senior secured
convertible promissory note in the amount of $2,500,000 which will be dated as
of the Huntingdon Issue Date (and the date of an additional $500,000 loan by
Huntingdon to the Company, if made) payable by MediaBay to Huntingdon.
"Inactive Subsidiaries" means the Domestic Subsidiaries identified on
Schedule 4.7.
"Indemnified Party" has the meaning specified in Section 11.4(b).
"ING" means ING (U.S.) Capital LLC in its capacity as a Lender or Issuing
Bank.
"Initial Issuing Bank" has the meaning specified in the Preliminary
Statements to this Agreement.
"Initial Lenders" has the meaning specified in the Preliminary Statements
to this Agreement.
"Insufficiency" means, with respect to any Plan, the amount, if any, of its
unfunded benefit liabilities, as defined in Section 4001(a)(18) of ERISA.
"Intellectual Property Security Agreement" has the meaning specified in
Section 3.1(a).
"Interest Expense" means, with respect to any Person for any period,
interest expense on all Debt of such Person for such period net of interest
income for such period, whether paid or
- 15 -
accrued, determined on a Consolidated basis for such Person and its Subsidiaries
and in accordance with GAAP, and including, without limitation, (a) in the case
of the Borrower, interest expense in respect of Debt resulting from Advances,
(b) the interest component of all obligations under Capitalized Leases, (c)
commissions, discounts and other fees and charges payable in connection with
letters of credit (including, without limitation, Letters of Credit), and (d)
all fees paid by the Borrowers pursuant to Section 2.8(a).
"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended
from time to time, and the regulations promulgated and rulings issued
thereunder.
"Inventory" of any person means all of such Person's now owned and
hereafter acquired inventory, goods, merchandise and other personal property,
wherever located, to be furnished under any contract of service or held for sale
or lease, all returned goods, raw materials, other materials and supplies of any
kind, nature or description which are or might be consumed in such Person's
business or used in connection with the packing, shipping, advertising, selling
or finishing of such goods, merchandise and such other personal property, and
all documents of title or other documents representing them.
"Investment" in any Person means any loan or advance to such Person, any
purchase or other acquisition of any capital stock or other ownership or profit
interest, warrants, rights, options, obligations or other securities of such
Person, any capital contribution to such Person or any other investment in such
Person, including, without limitation, any arrangement pursuant to which the
investor incurs Debt of the types referred to in clause (h) or (i) of the
definition of "Debt" in respect of such Person.
"Issuing Bank" means the Issuing Bank and each Eligible Assignee to which a
Letter of Credit Commitment hereunder has been assigned pursuant to Section
11.7.
"L/C Cash Collateral Account" has the meaning specified in the Security
Agreement.
"L/C Related Documents" has the meaning specified in Section 2.4(b)(ii)(A).
"Lender Party" means any Lender or the Issuing Bank.
"Lenders" means the Initial Lenders and each Person that shall become a
Lender hereunder pursuant to Section 11.7.
"Letter of Credit" means any Letter of Credit issued hereunder (as
specified in Section 2.3(a)).
"Letter of Credit Advance" means an advance made by the Issuing Bank or any
Revolving Credit Lender pursuant to Section 2.3(c).
"Letter of Credit Agreement" has the meaning specified in Section 2.3(a).
"Letter of Credit Commitment" means, with respect to the Issuing Bank, the
amount set forth opposite the Issuing Bank's name on Schedule I hereto under the
caption "Letter of Credit Commitment" or, if the Issuing Bank has entered into
one or more Assignments and
- 16 -
Acceptances, set forth for the Issuing Bank in the Register maintained by the
Administrative Agent pursuant to Section 11.7(d) as the Issuing Bank's "Letter
of Credit Commitment", as such amount may be reduced at or prior to such time
pursuant to Section 2.5.
"Letter of Credit Facility" means, at any time, an amount equal to the
amount of the Issuing Bank's Letter of Credit Commitment at such time, as such
amount may be reduced pursuant to Section 2.5.
"Lien" means any lien, security interest or other charge or encumbrance of
any kind, or any other type of preferential arrangement, including, without
limitation, the lien or retained security title of a conditional vendor and any
easement, right of way or other encumbrance on title to real property.
"Loan Documents" means (a) this Agreement, (b) the Notes, (c) each
Subsidiary Guaranty, (d) the Collateral Documents, (e) each Letter of Credit
Agreement, (f) each Additional Collateral Document, and (g) all other
agreements, instruments and documents executed in connection therewith, in each
case as the same may at any time be amended, supplemented, restated or otherwise
modified and in effect.
"Loan Parties" means the Borrowers, each Guarantor, and each other Person
who shall, at any time, have executed and delivered a Loan Document to the
Administrative Agent.
"Management Fees" for any period, all fees, emoluments or similar
compensation paid to or incurred with respect to any Person (other than any such
fees, emoluments or similar compensation paid to or incurred and payable to any
Loan Party) in respect of services rendered in connection with the management or
supervision of the management of any Loan Party, other than (a) salaries,
bonuses and other compensation paid to any full-time executive employee in
respect of such full-time employment, (b) fees and other compensation paid in
the ordinary course of business by any Loan Party to any Person who is not an
Affiliate thereof and (c) reimbursement to Affiliates of expenses (not
management fees) for services provided to a Borrower and/or its Subsidiaries in
the ordinary course of business including, without limitation, for bookkeeping
services, tax and legal advice, use of an aircraft and use of accounting or
other personnel, on terms which are no less favorable to such Borrower and its
Subsidiaries than they would obtain in a comparable arms-length transaction with
a Person not an Affiliate so long as the aggregate amount payable by all Loan
Parties to all Affiliates (excluding payments by the Subsidiaries of such
Borrower directly to such Borrower or to other Wholly-Owned Subsidiaries or
payments by such Borrower to its Wholly-Owned Subsidiaries) does not exceed Two
Hundred Thousand ($200,000.00) Dollars, for all Borrowers, in any single fiscal
year of the Borrowers.
"Margin Stock" has the meaning specified in Regulation U.
"Material Adverse Effect" means (a) a material adverse effect on the
business, condition (financial or otherwise), results of operations,
performance, reasonably foreseeable business prospects or properties of a
Borrower and its Subsidiaries (taken as a whole), (b) a material adverse affect
on the ability of any Loan Party to perform its obligations under the Loan
Documents to which it is a party, (c) an adverse affect on the rights and
remedies of the
- 17 -
Administrative Agent and the Lender Parties under any of the Loan Documents or
(d) a material adverse affect on the Facilities.
"Material Contract" means, with respect to any Person, each contract listed
on Schedule 4.23, each contract which is a replacement or a substitute for any
contract listed on such Schedule and each other contract to which such Person is
a party which is material to the business, financial condition, operations,
performance, properties or reasonably foreseeable business prospects of such
Person.
"MediaBay" has the meaning specified in the recital of parties to this
Agreement.
"Mortgage" means each mortgage, deed of trust, leasehold mortgage or
leasehold deed of trust or other similar document executed and delivered by the
appropriate Loan Party, in form and substance acceptable to the Administrative
Agent and the Lenders in order (a) to provide that such Loan Party is the
mortgagor or grantor, (b) to comply with and/or provide for specific laws of the
jurisdictions in which the real property or leasehold property to be encumbered
is located, and (c) to assure that the Administrative Agent for the benefit of
the Secured Parties has a perfected Lien on such Property.
"Mortgaged Property" means each real property or leasehold property
specified on Schedule 4.21 or 4.22, respectively, that is subject to a Mortgage
and shall include After-Acquired Mortgaged Property.
"Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate is making or
accruing an obligation to make contributions, or has within any of the preceding
five plan years made or accrued an obligation to make contributions.
"Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any Loan
Party or any ERISA Affiliate and at least one Person other than the Loan Parties
and the ERISA Affiliates or (b) was so maintained and in respect of which any
Loan Party or any ERISA Affiliate could have liability under Section 4064 or
4069 of ERISA in the event such plan has been or were to be terminated.
"Net Cash Proceeds" means, with respect to any sale, lease, transfer or
other disposition of any asset or any Debt Issuance or Equity Issuance by any
Person, or any Extraordinary Receipt received by or paid to or for the account
of any Person, the aggregate amount of cash received from time to time (whether
as initial consideration or through payment or disposition of deferred
consideration) by or on behalf of such Person in connection with such
transaction after deducting therefrom only (without duplication) (a) reasonable
and customary brokerage commissions, underwriting fees and discounts, legal
fees, finder's fees and other normal and customary out-of-pocket costs incurred
in connection with such transaction, (b) the amount of taxes payable in
connection with or as a result of such transaction and (c) with respect to any
asset, the amount of any Debt secured by a Lien on such asset that, by the terms
of such transaction, is required to be repaid upon such disposition, in each
case to the extent, but only to the extent, that the amounts so deducted are, at
the time of or shortly after the receipt of such
- 18 -
cash, actually paid to a Person that is not an Affiliate of such Person or any
Loan Party or any Affiliate of any Loan Party and are properly attributable to
such transaction or to the asset that is the subject thereof.
"New Member Acquisition Costs" means amounts expended by a Borrower or a
Subsidiary of a Borrower for any type of advertising in any medium for the
purpose of acquiring customers.
"Note" means a Revolving Credit Note.
"Notice of Borrowing" has the meaning specified in Section 2.2(a).
"Notice of Issuance" has the meaning specified in Section 2.3(a).
"Notice of Renewal" has the meaning specified in Section 2.1(b).
"Notice of Termination" has the meaning specified in Section 2.1(b).
"NPL" means the National Priorities List under CERCLA.
"Obligation" means, with respect to any Person, any payment, performance or
other obligation of such Person of any kind, including, without limitation, any
liability of such Person on any claim, whether or not the right of any creditor
to payment in respect of such claim is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, disputed, undisputed, legal,
equitable, secured or unsecured, and whether or not such claim is discharged,
stayed or otherwise affected by any proceeding referred to in Section 9.7.
Without limiting the generality of the foregoing, the Obligations of the Loan
Parties under the Loan Documents include (a) the obligation to pay principal,
interest, Letter of Credit commissions, charges, expenses, fees, attorneys' fees
and disbursements, indemnities and other amounts payable by any Loan Party under
any Loan Document, (b) the obligation of any Loan Party to reimburse any amount
in respect of any of the foregoing that any Lender Party may, after the
occurrence and during the continuance of an Event of Default, elect to pay or
advance on behalf of such Loan Party, and (c) any other obligations arising out
of or under, based upon or relating to the Loan Documents.
"OECD" means the Organization for Economic Cooperation and Development.
"Open Year" has the meaning specified in Section 4.16.
"Other Taxes" has the meaning specified in Section 2.11(b).
"Owned Xxxxxxx Shares" means any or all shares of capital stock issued by
MediaBay having voting rights, that are owned or controlled (whether
beneficially and/or of record) by Xxxxxx Xxxxxxx, Xxxxxxx Xxxxxxx, Xxxxxx
Xxxxxxx and their Affiliates in the aggregate.
"PBGC" means the Pension Benefit Guaranty Corporation (or any successor).
"Permitted Acquisitions" means any acquisition by any of the Borrowers'
Subsidiaries of all or substantially all of the assets or the capital stock of
any Person (or segment of such
- 19 -
Person's business) which has been consented to in writing by the Administrative
Agent and the Required Lenders. Concurrently with the making of a Permitted
Acquisition, the Borrowers shall, as additional collateral security for the
Obligations, grant or cause to be granted to the Administrative Agent for the
ratable benefit of the Lenders, prior liens on and security interest (subject to
Permitted Liens existing with respect to such assets at the time of the
Permitted Acquisition) in any of the acquired assets by the execution and
delivery to the Administrative Agent of such agreements, instruments and
documents as shall be reasonably satisfactory in form and substance to the
Administrative Agent and the Borrowers shall have delivered to the
Administrative Agent a Compliance Certificate effective as of the date of
consummation of such acquisition
"Permitted Liens" means any of the following: (a) Liens for taxes,
assessments and governmental charges or levies (i) not yet due and payable or
(ii) that are due and payable and that are being contested in good faith and by
appropriate proceedings diligently conducted, provided that in the case of Liens
under this clause (ii), reserves or other appropriate provisions shall have been
established therefor in accordance with GAAP; (b) Liens imposed by law, such as
materialmen's, mechanics', carriers', workmen's and repairmen's Liens and other
similar Liens arising in the ordinary course of business securing obligations
that are not overdue for a period of more than sixty (60) days or which, if
overdue, are being contested in good faith and by appropriate proceedings
diligently conducted, provided that reserves or other appropriate provisions
shall have been established therefor in accordance with GAAP; (c) pledges or
deposits to secure obligations under workers' compensation laws or similar
legislation or to secure public or statutory obligations; (d) Permitted Real
Property Encumbrances; (e) in the case of any Permitted Acquisition, any Lien in
respect of property of the acquired Person existing at the time of such
acquisition if such Lien would constitute a Permitted Lien under any of the
preceding clauses of this definition or otherwise permitted by Section 6.1(d) or
(e) provided that in respect of all Liens referred to in this clause (e) (i)
such Lien was not created in contemplation of such event, and (ii) no such Lien
shall at any time extend to or cover any asset of a Borrower or any Subsidiary
other than the assets on which it was originally imposed and improvements
thereto and proceeds thereof; (f) judgment and other similar Liens arising in
connection with court proceedings, provided the execution or other enforcement
of such Liens is effectively stayed or bonded and the claims secured thereby are
being contested in good faith and by appropriate proceedings and no Default
otherwise exists under Section 9.7 hereof; (g) Liens (other than Liens created
or imposed under ERISA) incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance and
other types of social security, or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, government
contracts, performance and return-of-money bonds and other similar obligations
(exclusive in any case of obligations incurred in connection with the borrowing
of money or the obtaining of advances or credit); (h) Liens arising from the
sales of accounts receivable for collection in the ordinary course of business
to the extent such sales are permitted in accordance with the terms of Section
6.5(g); (i) the junior Liens on all of the Borrowers assets (excluding
inventory, receivables and cash) granted to Huntingdon in connection with the
Xxxxxxx Secured Subordinated Loan; and (j) the Liens on all of the assets of the
Borrowers (excluding inventory, receivables and cash) granted to Huntingdon in
connection with the Huntingdon Financing Debt, provided, that, the holders of
the Liens set forth in clauses (i) and (j) above shall have no rights to vote as
a secured creditor in any proceeding of the type described in Section 9.6.
- 20 -
"Permitted Real Property Encumbrances" means, with respect to any
particular real property, easements, zoning restrictions or other restrictions,
rights-of-way, minor encroachments, covenants or encumbrances on real property
imposed by law or arising in the ordinary course of business that do not arise
out of the incurrence of any Debt and that do not and could not reasonably be
expected to materially detract from the value of the affected property or
interfere materially with the ordinary conduct of business of a Borrower or any
of its Subsidiaries or materially impair the use thereof to a Borrower or any
Subsidiary.
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Prime Rate" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to the higher of:
(a) the rate of interest announced publicly by The Wall Street Journal
as the "base rate on corporate loans posted by at least 75% of the nation's
30 largest banks" (or, if The Wall Street Journal ceases quoting a base
rate of the type described, the highest per annum rate of interest
published by the Federal Reserve Board in Federal Reserve statistical
release H.15 (519) entitled "Selected Interest Rates" as the Bank prime
loan rate or its equivalent); or
(b) 1/2 of one percent per annum above the Federal Funds Rate.
Each change in any interest rate provided for in the Credit Agreement based
upon the Prime Rate shall take effect at the time of such change in the Prime
Rate.
"Prime Rate Advance" means an Advance that bears interest as provided in
Section 2.7(a).
"Prior Credit Agreement" has the meaning specified in the Preliminary
Statements to this Agreement.
"Prior Loan Default Letter" means the letter attached hereto as Exhibit I
setting forth the defaults of MediaBay and Guarantors under the Prior Credit
Agreement.
"Pro Rata Share" of any amount means, with respect to any Revolving Credit
Lender at any time, the product of such amount times a fraction the numerator of
which is the amount of such Lender's Revolving Credit Commitment at such time
and the denominator of which is the Revolving Credit Facility at such time.
"Xxxxx Xxxxxxx" has the meaning specified in the recital of parties to this
Agreement.
"Xxxxx Xxxxxxx Subordinated Security Agreement" means the Security
Agreement dated and effective as of December 11, 1998 between MediaBay, Classic
Radio Holding Corp. and
- 21 -
Classic Radio Acquisition Corp., on the one hand, and Xxxx Xxxxx, on the other
hand, as in effect on the date of this Agreement.
"Receivables" means all Receivables referred to in Section 1(c) of the
Security Agreement.
"Reduction Amount" has the meaning specified in Section 2.6(b)(v).
"Register" has the meaning specified in Section 11.7(d).
"Regulation T" means Regulation T of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"Regulation X" means Regulation X of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"Regulatory Authority" means any federal, state, local or other U.S. or
foreign governmental authority, bureau or agency.
"Release" means any release, spill, emission, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping or
disposing into the environment (including the abandonment or discarding of
barrels, containers and other closed receptacles containing any Hazardous
Materials) or into or from any property, including, without limitation, the
movement of any Hazardous Materials through the air, soil, surface waters or
ground water.
"Remedial" shall have the meaning as set forth in CERCLA at 42 U.S.C. ss.
9601(24) and/or any other applicable Environmental Laws.
"Removal" shall have the meaning as set forth in CERCLA at 42 U.S.C. ss.
9601(23) and/or any other applicable Environmental Laws.
"Required Lenders" means at any time Lenders owed or holding 100% (or if
there are more than two (2) Lenders, greater than 50%) of the sum of (a) the
aggregate principal amount of the Advances outstanding at such time and (b) the
aggregate Available Amount of all Letters of Credit outstanding at such time,
or, if no such principal amount and no Letters of Credit are outstanding at such
time, Lenders holding 100% of the aggregate of the Revolving Credit Commitments;
provided, however, that if any Lender shall be a Defaulting Lender at such time,
there shall be excluded from the determination of Required Lenders at such time
(i) the aggregate principal amount of the Advances owing to such Lender (in its
capacity as a Lender) and outstanding at such time, and (ii) the Revolving
Credit Commitment of such Lender at such time. For purposes of this definition,
the Letter of Credit Advances owing to the Issuing Bank and the Available Amount
of each Letter of Credit shall be considered to be owed to the Revolving Credit
Lenders ratably in accordance with their respective Revolving Credit
Commitments.
- 22 -
"Response" shall have the meaning as set forth in CERCLA at 42 U.S.C. ss.
9601(25) and/or any other applicable Environmental Laws.
"Responsible Officer" means, with respect to any Loan Party, the Chief
Executive Officer, the President, the Chief Financial Officer, any Vice
President, the Controller or the Treasurer of such Loan Party.
"Revolving Credit Advance" has the meaning specified in Section 2.1(a).
"Revolving Credit Availability" means, at any time, the lesser of (a) the
Revolving Credit Facility and (b) the Borrowing Base; provided, however, so long
as the Borrowing Base is at least $5,000,000, the entire Revolving Credit
Facility may remain outstanding.
"Revolving Credit Borrowing" means a borrowing consisting of simultaneous
Revolving Credit Advances of the same Type made by the Revolving Credit Lenders.
"Revolving Credit Commitment" means, with respect to any Revolving Credit
Lender at any time, the amount set forth opposite such Lender's name on Schedule
I hereto under the caption "Revolving Credit Commitment" or, if such Lender has
entered into one or more Assignments and Acceptances, set forth for such Lender
in the Register maintained by the Administrative Agent pursuant to Section
11.7(d) as such Lender's "Revolving Credit Commitment," as such amount may be
reduced at or prior to such time pursuant to Section 2.5; provided, however, the
aggregate amount of the "Revolving Credit Commitment" shall not exceed
$6,580,000 with respect to any or all Revolving Credit Lenders at any time.
"Revolving Credit Facility" means, at any time, the aggregate amount of the
Revolving Credit Lenders' Revolving Credit Commitments at such time.
"Revolving Credit Lender" means any Lender that has a Revolving Credit
Commitment.
"Revolving Credit Note" means a promissory note of the Borrowers payable to
the order of any Revolving Credit Lender, in substantially the form of Exhibit B
hereto, evidencing the aggregate indebtedness of the Borrowers to such Lender
resulting from the Revolving Credit Advances made by such Lender.
"Revolving Credit Termination Date" means September 30, 2002.
"Secured Obligations" has the meaning specified in the Security Agreement.
"Secured Parties" means the Administrative Agent, the Lender Parties, and
the Hedge Banks and the other Persons the Obligations owing to which are or are
purported to be secured by the Collateral under the terms of the Collateral
Documents.
"Security Agreement" has the meaning specified in Section 3.1(a).
"Senior Debt" means, as at any date of determination thereof, the aggregate
outstanding principal balance of (a) all Revolving Credit Advances (b) all Debt
of the Borrower and its Subsidiaries, if any, secured by purchase money security
interests, conditional sale arrangements
- 23 -
or other similar security interests, (c) obligations of any Borrower and its
Subsidiaries, if any, with respect to Capitalized Leases and (d) other Debt of
any Borrower and its Subsidiaries, if any, which is senior to other Debt in the
priority of payment.
"Senior Subordinated Debt" means the 9% Convertible Senior Subordinated
Promissory Notes due December 31, 2004 issued by MediaBay as set forth on
Schedule 6.19 and any guaranties thereof permitted to be issued by the
Subsidiaries of the Company from time to time pursuant to Section 6.2(c)(iv), as
the same may be amended, modified or supplemented from time to time consistent
with the terms of this Agreement.
"Senior Subordinated Debt Documents" means all documents entered into or
delivered in connection with the Senior Subordinated Debt.
"Senior Subordinated Security Agreement" means the Security Agreement dated
December 30, 1998 between MediaBay, Classic Radio Holding Corp. and Classic
Radio Acquisition Corp. on the one hand, and Xxxxxx Xxxxxxx as a holder of
$1,984,250 of the Senior Subordinated Debt.
"Single Employer Plan" means a single employer plan, as defined in Section
4001(a)(15) of ERISA, that (a) is maintained for employees of any Loan Party or
any ERISA Affiliate and no Person other than the Loan Parties and the ERISA
Affiliates or (b) was so maintained and in respect of which any Loan Party or
any ERISA Affiliate could have liability under Section 4069 of ERISA in the
event such plan has been or were to be terminated.
"Solvent" and "Solvency" mean, with respect to any Person on a particular
date, that on such date (a) the fair value of the assets of such Person is
greater than the total amount of liabilities, including, without limitation,
contingent liabilities, of such Person, (b) the present fair salable value of
the assets of such Person is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they become absolute
and matured, (c) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person's ability to pay such debts
and liabilities as they mature and (d) such Person is not engaged in business or
a transaction, and is not about to engage in business or a transaction, for
which such Person's property would constitute an unreasonably small capital. The
amount of contingent liabilities at any time shall be computed as the amount
that, in the light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.
"Standby Letter of Credit" means any Letter of Credit other than a Trade
Letter of Credit.
"Subordinated Debt" means any Debt of a Borrower that is subordinated to
the Obligations of such Borrower under the Loan Documents and that otherwise
contains terms and conditions satisfactory to the Administrative Agent and
Required Lenders and shall include, without limitation, the Senior Subordinated
Debt.
"Subsidiary" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which) more
than 50% of (a) the issued and outstanding capital stock having ordinary voting
power to elect a majority of the Board of
- 24 -
Directors of such corporation (irrespective of whether at the time capital stock
of any other class or classes of such corporation shall or might have voting
power upon the occurrence of any contingency), (b) the interest in the capital
or profits or distributions or general or limited partnership interests of such
partnership, joint venture or limited liability company or (c) the beneficial
interest in such trust or estate, is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more of its other
Subsidiaries or by one or more of such Person's other Subsidiaries. Unless
otherwise specified herein, the term Subsidiary shall mean a Subsidiary of a
Borrower.
"Subsidiary Guaranty" has the meaning specified in Section 3.1(a).
"Surviving Debt" shall have the meaning specified in Section 4.19(b).
"Taxes" has the meaning specified in Section 2.11(a).
"Termination Date" means the date of termination in whole of the
Commitments pursuant to Section 2.5 or Article 9.
"Trade Letter of Credit" means any Letter of Credit that is issued for the
benefit of a supplier of Inventory to a Borrower or any of its Subsidiaries to
effect payment for such Inventory, the conditions to drawing under which include
the presentation to the Issuing Bank of negotiable bills of lading, invoices and
related documents sufficient, in the judgment of the Issuing Bank, to create a
valid and perfected lien on or security interest in such Inventory, bills of
lading, invoices and related documents in favor of the Issuing Bank.
"Transaction" means the transactions contemplated by the Loan Documents.
"Voting Stock" means capital stock issued by a corporation, or equivalent
interests in any other Person, the holders of which are ordinarily, in the
absence of contingencies, entitled to vote for the election of directors (or
persons performing similar functions) of such Person, even if the right so to
vote has been suspended by the happening of such a contingency.
"Welfare Plan" means a welfare plan, as defined in Section 3(1) of ERISA,
that is maintained for employees of any Loan Party or in respect of which any
Loan Party could have liability.
"Wholly-Owned Subsidiary" of any Person means a Subsidiary of such Person
all of the outstanding Equity Interests of which shall at the time be owned by
such Person or by one or more Wholly-Owned Subsidiaries of that Person or a
combination thereof.
"Withdrawal Liabilities" has the meaning specified in Part I of Subtitle E
of Title IV of ERISA.
- 25 -
SECTION 1.2 Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding."
SECTION 1.3 Accounting Terms. For purposes of this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to such terms in conformity with GAAP. Financial statements and other
information furnished to Lender pursuant to Article 7 shall be prepared in
accordance with GAAP (as in effect at the time of such preparation) on a
consistent basis, subject to the final sentence of this Section 1.3. In the
event any "Accounting Changes" (as defined below) shall occur and such changes
affect financial covenants, standards or terms in this Agreement (other than
changes which have an immaterial effect on such financial covenants, standards
or terms), then the Borrowers and the Lenders agree to enter into negotiations
in order to amend such provisions of this Agreement so as to equitably reflect
such Accounting Changes with the desired result that the criteria for evaluating
the financial condition of any Borrower shall be the same after such Accounting
Changes as if such Accounting Changes had not been made, and until such time as
such an amendment shall have been executed and delivered by the Borrowers and
the Lenders, (a) all financial covenants, standards and terms in this Agreement
shall be calculated and/or construed as if such Accounting Changes had not been
made, and (b) the Borrowers shall prepare footnotes to each Compliance
Certificate and the financial statements required to be delivered hereunder that
show the differences between the financial statements delivered (which reflect
such Accounting Changes) and the basis for calculating financial covenant
compliance (without reflecting such Accounting Changes), and, in any event, the
terms of the last sentence of this Section 1.3 shall supersede the provisions of
this sentence to the extent of any inconsistency. "Accounting Changes" means:
(a) changes in accounting principles required by GAAP and implemented by
Borrower; (b) changes in accounting principles recommended by a Borrower's
certified public accountants; (c) changes in carrying value of a Borrower's or
any of its Subsidiaries' assets, liabilities or equity accounts resulting from
adjustments that, in each case, were applicable to, but not included in, the
audited Financials; and (d) changes in accounting principles permitted by GAAP
(other than with respect to any changes to a Borrower's method of accounting for
New Member Acquisition Costs or advertising expenses as reflected in the
financial statements of a Borrower and its Subsidiaries provided by such
Borrower pursuant to Section 4.6) which in the reasonable opinion of such
Borrower's management provide for more meaningful disclosure in light of the
business conducted by such Borrower and its Subsidiaries and which changes are
concurred with by such Borrower's certified public accountants and which do not
effect a material change. Notwithstanding any other provision in this Agreement,
in any event, for all purposes of reporting and compliance under this Agreement,
New Member Acquisition Costs and advertising expenses shall be treated as
expensed and not amortized regardless of GAAP, provided that, in complying with
the reporting provisions of this Agreement, including applicable provisions of
Section 7 hereof, the Borrowers shall be permitted to deliver their audited or
publicly filed financial statements, in accordance with GAAP (which may require
amortization of advertising expenses and New Member Acquisition Costs) so long
as together therewith the Borrowers shall have delivered to the Lenders a
schedule reporting EBITDA and net income as if advertising and New Members
Acquisition Costs were expensed as incurred .
SECTION 1.4 Other Definitional Provisions. References to "Sections",
"subsections", "Exhibits" and "Schedules" shall be to Sections, subsections,
Exhibits and Schedules,
- 26 -
respectively, of this Agreement unless otherwise specifically provided. Any of
the terms defined in Section 1.1 may, unless the context otherwise requires, be
used in the singular or the plural depending on the reference. In this
Agreement, words importing any gender include the other genders; the words
"including," "includes" and "include" shall be deemed to be followed by the
words "without limitation"; references to agreements and other contractual
instruments shall be deemed to include subsequent amendments, assignments, and
other modifications thereto, but only to the extent such amendments, assignments
and other modifications are not prohibited by the terms of this Agreement or any
other Loan Document; references to Persons include their respective permitted
successors and assigns or, in the case of governmental Persons, Persons
succeeding to the relevant functions of such Persons; and all references to
statutes and related regulations shall include any amendments of same and any
successor statutes and regulations.
ARTICLE 2
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.1 The Advances.
(a) The Revolving Credit Advances. Each Revolving Credit Lender severally
agrees, on the terms and conditions hereinafter set forth, to make advances
(each a "Revolving Credit Advance") to the Borrowers from time to time on any
Business Day during the period from the date hereof until the Revolving Credit
Termination Date in an amount for each such Advance not to exceed such Lender's
Unused Revolving Credit Commitment at such time; provided, however, that no
Revolving Credit Lender shall have any obligation to make a Revolving Credit
Advance under this Section 2.1(a) to the extent such Revolving Credit Advance
would cause the aggregate amount of Revolving Credit Advances outstanding (after
giving effect to any immediate application of the proceeds thereof) to exceed
the Revolving Credit Availability; and provided, further, that during the
respective periods described below no Revolving Credit Advance or Letter of
Credit Advance shall be made or remain outstanding and no Letter of Credit shall
be issued if, after giving effect thereto, the outstanding principal amount of
all Revolving Credit Advances, Letter of Credit Advances and Available Amounts,
would exceed $6,580,000. Each Revolving Credit Borrowing shall be in an
aggregate amount of $500,000 or an integral multiple of $100,000 (other than, in
each case, a Borrowing the proceeds of which shall be used solely to repay or
prepay in full outstanding Letter of Credit Advances) and shall consist of
Revolving Credit Advances made simultaneously by the Revolving Credit Lenders
ratably according to their Revolving Credit Commitments.
(b) Letters of Credit. The Issuing Bank agrees, on the terms and conditions
hereinafter set forth, to issue letters of credit for the account of the
Borrowers from time to time on any Business Day during the period from the
Effective Date until sixty (60) days before the Revolving Credit Termination
Date (i) in an aggregate Available Amount for all Letters of Credit not to
exceed at any time the Issuing Bank's Letter of Credit Commitment at such time
and (ii) in an Available Amount for each such Letter of Credit not to exceed an
amount equal to the Unused Revolving Credit Commitments of the Revolving Credit
Lenders at such time. No Letter of Credit shall have an expiration date
(including all rights of the Borrowers or the beneficiary to
- 27 -
require renewal) later than (A) the earlier of sixty (60) days before the
Revolving Credit Termination Date, (B) in the case of a Standby Letter of
Credit, 365 days after the date of issuance thereof and (C) in the case of a
Trade Letter of Credit, 180 days after the date of issuance thereof. The
foregoing notwithstanding, any Standby Letter of Credit may, by its terms, be
renewable annually upon notice (a "Notice of Renewal") given to the Issuing Bank
and the Administrative Agent on or prior to any date for notice of renewal set
forth in such Letter of Credit (but in any event at least five (5) Business Days
prior to the date of the proposed renewal of such Standby Letter of Credit) and
upon fulfillment of the applicable conditions set forth in Article 3 unless such
Issuing Bank shall have notified the Borrowers (with a copy to the
Administrative Agent) on or prior to the date for notice of termination set
forth in such Letter of Credit (but in any event at least thirty (30) Business
Days prior to the date of automatic renewal) of its election not to renew such
Standby Letter of Credit (a "Notice of Termination"); provided that the terms of
each Standby Letter of Credit that is automatically renewable annually shall not
permit the expiration date (after giving effect to any renewal) of such Standby
Letter of Credit in any event to be extended to a date later than sixty (60)
days before the Revolving Credit Termination Date. If either a Notice of Renewal
is not given by the Borrowers or a Notice of Termination is given by the Issuing
Bank pursuant to the immediately preceding sentence, such Standby Letter of
Credit shall expire on the date on which it otherwise would have been
automatically renewed; provided, however, that even in the absence of receipt of
a Notice of Renewal, the Issuing Bank may, in its discretion unless instructed
to the contrary by the Administrative Agent or the Borrowers, deem that a Notice
of Renewal had been timely delivered and, in such case, a Notice of Renewal
shall be deemed to have been so delivered for all purposes under this Agreement.
Within the limits of the Letter of Credit Facility, and subject to the limits
referred to above, the Borrowers may request the issuance of Letters of Credit
under this Section 2.1(b), repay any Letter of Credit Advances resulting from
drawings under Letters of Credit pursuant to Section 2.3(c) and request the
issuance of additional Letters of Credit under this Section 2.1(b).
SECTION 2.2 Making the Advances.
(a) Except as otherwise provided in Section 2.3 each Borrowing shall be
made on notice, given not later than 11:00 A.M. (New York time) on the first
Business Day prior to the date of the proposed Borrowing by the Borrowers to the
Administrative Agent, which shall give to each appropriate Lender prompt notice
thereof by telex or telecopier. Each such notice of a Borrowing (a "Notice of
Borrowing") may be by telephone, confirmed immediately in writing, or telex or
telecopier in substantially the form of Exhibit D hereto, specifying therein the
requested (i) date of such Borrowing, (ii) Facility under which such Borrowing
is to be made, and (iii) aggregate amount of such Borrowing. Each appropriate
Lender shall, before 11:00 A.M. (New York time) on the date of such Borrowing,
make available for the account of its Applicable Lending Office to the
Administrative Agent at the Administrative Agent's Account, in same day funds,
such Lender's ratable portion of such Borrowing in accordance with the
respective Commitments under the applicable Facility of such Lender and the
other appropriate Lenders. After the Administrative Agent's receipt of such
funds and upon fulfillment of the applicable conditions set forth in Article 3,
the Administrative Agent will make such funds available to the Borrowers by
crediting the Borrowers' Account; provided, however, that in the case of any
Revolving Credit Borrowing, the Administrative Agent shall first make a portion
of such funds equal to the aggregate principal amount of any Letter of Credit
Advances made by the Issuing Bank and by any other Revolving Credit Lender and
outstanding on the date of such Revolving Credit Borrowing, plus interest
accrued and
- 28 -
unpaid thereon to and as of such date, available to the Issuing Bank and such
other Revolving Credit Lenders for repayment of such Letter of Credit Advances.
(b) Each Notice of Borrowing shall be irrevocable and binding on the
Borrowers.
(c) Unless the Administrative Agent shall have received notice from an
appropriate Lender prior to the date of any Borrowing under a Facility under
which such Lender has a Commitment that such Lender will not make available to
the Administrative Agent such Lender's ratable portion of such Borrowing, the
Administrative Agent may assume that such Lender has made such portion available
to the Administrative Agent on the date of such Borrowing in accordance with
subsection (a) of this Section 2.2 and the Administrative Agent may, in reliance
upon such assumption, make available to the Borrowers on such date a
corresponding amount. If and to the extent that such Lender shall not have so
made such ratable portion available to the Administrative Agent, such Lender and
the Borrowers severally agree to repay or pay to the Administrative Agent
forthwith on demand such corresponding amount and to pay interest thereon, for
each day from the date such amount is made available to the Borrowers until the
date such amount is repaid or paid to the Administrative Agent, at (i) in the
case of the Borrowers, the interest rate applicable at such time under Section
2.7 to Advances comprising such Borrowing and (ii) in the case of such Lender,
the Federal Funds Rate. If any Lender so fails to make its ratable portion
available to the Administrative Agent, the Administrative Agent shall use its
best efforts to obtain such ratable portion from such Lender and, upon receipt
of such amount, shall promptly forward it to Borrowers, provided that the
foregoing shall not be deemed to change the Administrative Agent's obligations
hereunder, or to cause the several obligations of the Lenders to become joint
obligations. If such Lender shall pay to the Administrative Agent such
corresponding amount, such amount so paid shall constitute such Lender's Advance
as part of such Borrowing for all purposes.
(d) The failure of any Lender to make the Advance to be made by it as part
of any Borrowing shall not relieve any other Lender of its obligation, if any,
hereunder to make its Advance on the date of such Borrowing, but no Lender shall
be responsible for the failure of any other Lender to make the Advance to be
made by such other Lender on the date of any Borrowing.
SECTION 2.3 Issuance of and Drawings and Reimbursement Under Letters of
Credit.
(a) Request for Issuance. Each Letter of Credit shall be issued upon
notice, given not later than 11:00 A.M. (New York time) on the fifth Business
Day prior to the date of the proposed issuance of such Letter of Credit, by the
Borrowers to the Issuing Bank, which shall give to the Administrative Agent and
each Revolving Credit Lender prompt notice thereof by telex or telecopier. Each
such notice of issuance of a Letter of Credit (a "Notice of Issuance") shall be
by telephone, confirmed immediately in writing, or telex or telecopier,
specifying therein the requested (i) date of such issuance (which shall be a
Business Day), (ii) Available Amount of such Letter of Credit, (iii) expiration
date of such Letter of Credit, (iv) name and address of the beneficiary of such
Letter of Credit and (v) form of such Letter of Credit, and shall be accompanied
by such application and agreement for letter of credit as the Issuing Bank may
specify to the Borrowers for use in connection with such requested Letter of
Credit (a "Letter of Credit Agreement"). If the requested form of such Letter of
Credit is reasonably acceptable to
- 29 -
the Issuing Bank, the Issuing Bank will, upon fulfillment of the applicable
conditions set forth in Article 3, make such Letter of Credit available to the
Borrowers at its office referred to in Section 11.2 or as otherwise agreed with
the Borrowers in connection with such issuance. In the event and to the extent
that the provisions of any such Letter of Credit Agreement shall conflict with
this Agreement, the provisions of this Agreement shall govern.
(b) Letter of Credit Reports. The Issuing Bank shall furnish (i) to the
Administrative Agent on the first Business Day of each week a written report
summarizing issuance and expiration dates of Letters of Credit issued during the
previous week and drawings during such week under all Letters of Credit, (ii) to
the Administrative Agent, the Borrowers and each Revolving Credit Lender on the
first Business Day of each month a written report summarizing issuance and
expiration dates of Letters of Credit issued during the preceding month and
drawings during such month under all Letters of Credit and (iii) to the
Administrative Agent, the Borrowers and each Revolving Credit Lender on the
first Business Day of each calendar quarter a written report setting forth the
average daily aggregate Available Amount during the preceding calendar quarter
of all Letters of Credit.
(c) Drawing and Reimbursement. The payment by the Issuing Bank of a draft
drawn under any Letter of Credit shall constitute for all purposes of this
Agreement the making by the Issuing Bank of a Letter of Credit Advance which
shall be a Prime Rate Advance in the amount of such draft. Each of the
Borrowers, the Administrative Agent and each Revolving Credit Lender hereby
acknowledges and agrees that Letter of Credit Advances may be made, or deemed
made, by the Issuing Bank in respect of any Letter of Credit and to participate
in all Letter of Credit Advances made hereunder as provided herein. Upon written
demand by the Issuing Bank, with a copy of such demand to the Administrative
Agent, each Revolving Credit Lender shall purchase from the Issuing Bank, and
the Issuing Bank shall sell and assign to each such Revolving Credit Lender,
such Lender's Pro Rata Share of such outstanding Letter of Credit Advance as of
the date of such purchase, by making available (for the account of its
Applicable Lending Office) to the Administrative Agent (for the account of the
Issuing Bank), by deposit to the Administrative Agent's Account, in same day
funds, an amount equal to the portion of the outstanding principal amount of
such Letter of Credit Advance to be purchased by such Lender. Promptly after
receipt thereof, the Administrative Agent shall transfer such funds to the
Issuing Bank. The Borrowers hereby agree to each such sale and assignment. Each
Revolving Credit Lender agrees to purchase its Pro Rata Share of an outstanding
Letter of Credit Advance on (i) the Business Day on which demand therefor is
made by the Issuing Bank; provided that notice of such demand is given not later
than 11:00 A.M. (New York time) on such Business Day or (ii) the first Business
Day next succeeding such demand if notice of such demand is given after such
time. Upon any such assignment by the Issuing Bank to any other Revolving Credit
Lender of a portion of a Letter of Credit Advance, the Issuing Bank represents
and warrants to such other Lender that the Issuing Bank is the legal and
beneficial owner of such interest being assigned by it, free and clear of any
liens, but makes no other representation or warranty and assumes no
responsibility with respect to such Letter of Credit Advance, the Loan Documents
or any Loan Party. If and to the extent that any Revolving Credit Lender shall
not have so made the amount of such Letter of Credit Advance available to the
Administrative Agent, such Revolving Credit Lender agrees to pay to the
Administrative Agent forthwith on demand such amount together with interest
thereon, for each day from the date of demand by the Issuing Bank until the date
such amount is paid to the Administrative Agent, at the Federal Funds Rate for
its account or the
- 30 -
account of the Issuing Bank, as applicable. If such Lender shall pay to the
Administrative Agent such amount for the account of the Issuing Bank on any
Business Day, such amount so paid in respect of principal shall constitute a
Letter of Credit Advance made by such Lender on such Business Day for purposes
of this Agreement, and the outstanding principal amount of the Letter of Credit
Advance made by the Issuing Bank shall be reduced by such amount on such
Business Day.
(d) Failure to Make Letter of Credit Advances. The failure of any Lender to
make any Letter of Credit Advance to be made by it on the date specified in
Section 2.3(c) shall not relieve any other Lender of its obligation hereunder to
make its Letter of Credit Advance on such date, but no Lender shall be
responsible for the failure of any other Lender to make the Letter of Credit
Advance to be made by such other Lender on such date.
SECTION 2.4 Repayment of Advances.
(a) Revolving Credit Advances. The Borrowers shall repay to the
Administrative Agent for the ratable account of the Revolving Credit Lenders
outstanding Revolving Credit Advances on the following dates in the amounts
indicated, each of which repayments shall result in a corresponding, automatic
and permanent reduction, on a pro rata basis, of the aggregate Revolving Credit
Commitments of the Revolving Lenders:
Date Amount
---- ------
September 30, 2001 $100,000
Each of December 31, 2001, March 31, 2002 and June 30, 2002 $300,000
and the Borrowers shall repay to the Administrative Agent for the ratable
account of the Revolving Credit Lenders on the Revolving Credit Termination Date
the aggregate principal amount of the Revolving Credit Advances then
outstanding.
(b) Letter of Credit Advances. (i) The Borrowers shall repay to the
Administrative Agent for the account of the Issuing Bank and each other
Revolving Credit Lender that has made a Letter of Credit Advance on the earlier
of demand made by the Administrative Agent to the Borrowers and the Revolving
Credit Termination Date the outstanding principal amount of each Letter of
Credit Advance made by each of them.
(ii) The Obligations of the Borrowers under this Agreement, any Letter
of Credit Agreement and any other agreement or instrument relating to any
Letter of Credit shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement, such Letter of
Credit Agreement and such other agreement or instrument under all
circumstances, including, without limitation, the following circumstances:
(A) any lack of validity or enforceability of any Loan Document,
any Letter of Credit Agreement, any Letter of Credit or any other
agreement or instrument
- 31 -
relating to any of the foregoing (all of the foregoing being,
collectively, the "L/C Related Documents");
(B) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Obligations of the Borrower in
respect of any L/C Related Document or any other amendment or waiver
of or any consent to departure from all or any of the L/C Related
Documents;
(C) the existence of any claim, set-off, defense or other right
that the Borrower may have at any time against any beneficiary or any
transferee of a Letter of Credit (or any Persons for whom any such
beneficiary or any such transferee may be acting), the Issuing Bank,
or any other Person, whether in connection with the transactions
contemplated by the L/C Related Documents or any unrelated
transaction;
(D) any statement or any other document presented under a Letter
of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any
respect, except where the Issuing Bank acts with gross negligence or
willful misconduct in accepting an insufficient such statement or
document; or
(E) any exchange, release or non-perfection of any Collateral or
other collateral, or any release or amendment or waiver of or consent
to departure from any Subsidiary Guaranty or any other guarantee, for
all or any of the Obligations of the Borrower in respect of the L/C
Related Documents.
SECTION 2.5 Termination or Reduction of the Commitments.
(a) Optional. The Borrowers jointly may, upon at least three Business Days'
notice to the Administrative Agent, terminate in whole or reduce in part the
unused portions of the Unused Revolving Credit Commitments; provided, however,
that each partial reduction of a Facility (i) shall be in an aggregate amount of
$100,000 or an integral multiple of $100,000 in excess thereof, and (ii) shall
be made ratably among the appropriate Lenders in accordance with their
Commitments with respect to such Facility.
(b) Mandatory. From time to time thereafter upon each repayment pursuant to
Section 2.4(a) or prepayment of any portion of outstanding Revolving Credit
Advances, the aggregate Revolving Credit Commitments of the Revolving Credit
Lenders shall be automatically and permanently reduced, on a pro rata basis, by
an amount equal to the amount by which the aggregate Revolving Credit
Commitments immediately prior to such reduction exceed the aggregate Revolving
Credit Advances then outstanding.
SECTION 2.6 Prepayments.
(a) Optional. The Borrowers may, without premium or penalty, upon at least
one (1) Business Day's notice to the Administrative Agent stating the proposed
date and aggregate principal amount of the prepayment, and if such notice is
given, the Borrowers shall, prepay the outstanding aggregate principal amount of
the Advances, in whole or ratably in part, together with accrued interest to the
date of such prepayment on the aggregate principal amount prepaid;
- 32 -
provided, however, that each partial prepayment shall be in an aggregate
principal amount of $100,000 or an integral multiple of $100,000 in excess
thereof. Each prepayment made pursuant to this Section 2.6(a) shall, at the
Borrowers' option, be applied to repay the Facilities in the following manner:
first, ratably to the Revolving Credit Facility, and ratably to each unpaid
amortization payment set forth in Section 2.4(a) until such amortization
payments are paid in full; second, to prepay Revolving Credit Advances then
outstanding until such Revolving Credit Advances are paid in full; and third,
deposited in the L/C Cash Collateral Account to cash collateralize 100% of the
Available Amount of the Letters of Credit then outstanding. Upon the drawing of
any Letter of Credit for which funds are on deposit in the L/C Cash Collateral
Account, such funds shall be applied to reimburse the Issuing Bank or the
Revolving Credit Lenders, as applicable.
(b) Mandatory. (i) Within ninety (90) days following the end of Fiscal Year
2001, if the ratio of Consolidated Debt to EBITDA at the end of such Fiscal Year
exceeds 4.25:1, the Borrowers shall execute and deliver to the Administrative
Agent a certificate of the applicable Borrower's Chief Executive Officer or
Chief Financial Officer demonstrating its calculation of Excess Cash Flow for
such Fiscal Year along with a prepayment of the then outstanding Advances equal
to seventy-five percent (75%) of the annual Excess Cash Flow; provided, however,
that (A) if the ratio of Consolidated Debt to EBITDA, measured at the end of and
for such Fiscal Year of such Borrower, for such Fiscal Year of such Borrower, is
less than or equal to 4.25:1, then the required prepayment of the then
outstanding Advances shall be in the amount of fifty percent (50%) of the annual
Excess Cash Flow for such Fiscal Year rather than seventy-five percent (75%) of
such annual Excess Cash Flow.
(ii) Upon receipt by any Loan Party or any of its Subsidiaries of Net
Cash Proceeds from any Asset Disposition, the Borrowers shall prepay the
then outstanding Advances in an amount equal to one-hundred percent (100%)
of such Net Cash Proceeds payable concurrently with consummation of such
Asset Disposition.
(iii) Within fifteen (15) days after receipt by any Loan Party or any
of its Subsidiaries of Net Cash Proceeds from any Equity Issuance, the
Borrowers may retain up to $2,000,000 in the aggregate, as working capital
and then shall prepay the then outstanding Advances in an amount equal to
fifty percent (50%) of such Net Cash Proceeds in excess of $2,000,000.
(iv) Within fifteen (15) days after receipt of Net Cash Proceeds by
any Loan Party or any of its Subsidiaries from any Extraordinary Receipt
received by or paid to or for the account of any Loan Party or any of its
Subsidiaries and not otherwise included in clause (i), (ii) or (iii) above,
the Borrowers shall prepay the then outstanding Advances in an amount equal
to one hundred percent (100%) of such Net Cash Proceeds.
(v) Each prepayment made pursuant to clause (i), (ii), (iii) or (iv)
shall be subject to the provisions of Section 11.4(c) and shall be applied
to prepay the Facilities in the following manner: first, ratably to the
Revolving Credit Facility to repay Revolving Credit Advances then
outstanding until such Revolving Credit Advances are paid in full; second,
to repay Letter of Credit Advances then outstanding until such Letter of
Credit Advances are paid in full; and third, deposited in the L/C Cash
Collateral Account to cash collateralize 100% of the
- 33 -
Available Amount of the Letters of Credit then outstanding. Upon the
drawing of any Letter of Credit for which funds are on deposit in the L/C
Cash Collateral Account, such funds shall be applied to reimburse the
Issuing Bank or the Revolving Credit Lenders, as applicable. The amount
remaining (if any) after the required prepayment of the Advances then
outstanding and the 100% cash collateralization of the aggregate Available
Amount of Letters of Credit then outstanding (the sum of such prepayment
amounts, cash collateralization amounts and remaining amount being referred
to herein as the "Reduction Amount") may be retained by the Borrowers. Upon
the drawing of any Letter of Credit for which funds are on deposit in the
L/C Cash Collateral Account, such funds shall be applied to reimburse the
Issuing Bank or the Revolving Credit Lenders, as applicable. Upon the
termination of all of the Commitments and the indefeasible payment in full
of all Obligations, including, without limitation, termination or
expiration of all Letters of Credit and the indefeasible payment in full of
all Obligations in respect of all Letters of Credit, then all amounts
remaining on deposit in the L/C Cash Collateral Account shall be returned
to the Borrowers.
(vi) The Borrowers shall, within fifteen (15) days following the end
of each month in each Fiscal Year, pay to the Administrative Agent for
deposit in the L/C Cash Collateral Account an amount sufficient to cause
the aggregate amount on deposit in such Account to equal the amount by
which the aggregate Available Amount of all Letters of Credit then
outstanding exceeds the Letter of Credit Facility on such Business Day.
(vii) At any time that the aggregate amount of Revolving Credit
Advances outstanding exceeds the Revolving Credit Facility, the Borrowers
shall immediately repay Revolving Credit Advances to the extent necessary
to reduce the principal balance of Revolving Credit Borrowings to an amount
equal to or less than the Revolving Credit Facility.
(viii) The foregoing notwithstanding, the provisions of this Section
2.6(b) shall not be construed to permit any Equity Issuance, Debt Issuance
or Asset Disposition otherwise prohibited under the terms of this
Agreement.
(c) Application of Prepayments to the Revolving Facility. Upon receipt of
any amounts to be applied to the prepayment in respect of the Revolving Credit
Facility pursuant to this Section 2.6, the Administrative Agent shall apply such
amounts to the prepayment of the Revolving Credit Advances ratably.
SECTION 2.7 Interest.
(a) Scheduled Interest. The Borrowers shall pay to the Administrative
Agent, for the benefit of the Lenders, interest on the unpaid principal amount
of each Advance owing to each Lender from the date of such Advance until such
principal amount shall be paid in full at a rate per annum equal at all times to
the sum of (x) the Prime Rate in effect from time to time plus (y) the
Applicable Margin for such Advance in effect from time to time, payable in
arrears on the last day of each month commencing April 30, 2001, during such
periods and on the date such Prime Rate Advance shall be paid in full.
(b) Default Interest. Upon the occurrence and during the continuance of a
Default, the Borrowers shall pay interest on (i) the unpaid principal amount of
each Advance owing to
- 34 -
each Lender, payable in arrears on the dates referred to in clause (a) above and
on demand, at a rate per annum equal at all times to 2% per annum above the rate
per annum required to be paid on such Advance pursuant to clause (a) above and
(ii) to the fullest extent permitted by law, the amount of any interest, fee or
other amount payable hereunder that is not paid when due (whether at the stated
maturity, by acceleration or otherwise), from the date such amount shall be due
until such amount shall be paid in full, payable in arrears on the date such
amount shall be paid in full and on demand, at a rate per annum equal at all
times to 2% per annum above the rate per annum required to be paid, in the case
of interest, on the Advance on which such interest has accrued pursuant to
clause (a) above, and, in all other cases, on Prime Rate Advances pursuant to
clause (a) above.
(c) Notice of Interest Rate. Promptly after receipt of a Notice of
Borrowing pursuant to Section 2.2(a), the Administrative Agent shall give notice
to the Borrowers and each appropriate Lender of the applicable interest rate
determined by the Administrative Agent.
(d) Limitations on Interest. All agreements between and among any Borrower,
any Guarantors, any other Loan Party and the Lenders and/or the Administrative
Agent are hereby expressly limited so that in no contingency or event
whatsoever, whether by reason of acceleration of maturity of the Indebtedness
evidenced hereby or otherwise, shall the amount paid or agreed to be paid to any
Lender for the use or the forbearance of the Indebtedness incurred hereunder
exceed the maximum permissible under applicable law. As used herein the term
"applicable law" shall mean the law in effect as of the date hereof; provided,
however, that in the event there is a change in the law which results in a
higher permissible rate of interest, then this Agreement and the Notes issued
hereunder shall be governed by such new law as of its effective date. In this
regard it is expressly agreed that it is the intent of the Borrowers, the
Lenders and the Administrative Agent in execution, delivery and acceptance of
this Agreement to contract in strict compliance with the laws of the State of
New York from time to time in effect. If under any circumstances whatsoever,
fulfillment of any provision hereof or of any of the Loan Documents at the time
performance of such provision shall be due shall involve transcending the limits
of such validity prescribed by applicable law, then the obligation to be
fulfilled shall automatically be reduced to the limits of such validity, and if
under or from any circumstance whatsoever the Administrative Agent or any Lender
should ever receive as interest any amount which would exceed the highest lawful
rate, such amount which would be excessive interest shall be applied to the
reduction of the principal balance evidenced by the Notes issued hereunder and
not to the payment of interest. This provision shall control every other
provision of all agreements between and among any Borrowers, any Guarantors, any
other Loan Party, the Administrative Agent and the Lenders.
SECTION 2.8 Fees.
(a) Closing Fees. The Borrowers will pay on the Effective Date to the
Administrative Agent for the Account of the Lenders a closing fee equal to one
quarter of one percent (1/4%) of the Revolving Credit Facility.
(b) Letter of Credit Fees. (i) The Borrowers shall pay to the
Administrative Agent for the account of each Revolving Credit Lender a
commission, payable in arrears quarterly on the last Business Day of each March,
June, September and December, commencing June 30, 2001
- 35 -
and on the earliest to occur of the full drawing, expiration, termination or
cancellation of any such Letter of Credit and on the Revolving Credit
Termination Date, on such Lender's Pro Rata Share of the average daily aggregate
Available Amount during such quarter of all Letters of Credit outstanding from
time to time at the rate per annum equal to the Applicable Margin then in effect
under the Revolving Credit Facility.
(ii) In addition to the foregoing fees described in (i) above, the
Borrowers shall pay to the Issuing Bank, for its own account, (x) on the
Available Amount of each Letter of Credit outstanding, a fronting fee, for
the period from the date of issuance of such Letter of Credit to and
including the termination thereof, computed at the rate of one quarter of
one percent (1/4%) per annum, payable in arrears quarterly on the last
Business Day of each March, June, September and December of each year and
on the date of termination thereof and (y) transfer fees and other
customary fees and charges in connection with the issuance or
administration of each Letter of Credit as the Borrower and the Issuing
Bank shall agree.
(c) Administrative Agent's Fees. The Borrowers shall pay to the
Administrative Agent for its own account such fees as may from time to time be
agreed between the Borrower and the Administrative Agent.
SECTION 2.9 Increased Costs, Etc.
(a) If, after the date hereof, due to (i) the introduction or effectiveness
of, any change in, or any change in the interpretation of any law or regulation,
or (ii) the compliance with any guideline or request from any central bank or
other governmental authority (whether or not having the force of law), there
shall be any increase in the cost to any Lender Party of agreeing to make or of
making, funding or maintaining Prime Rate Advances or of agreeing to issue or of
issuing or maintaining Letters of Credit or of agreeing to make or of making or
maintaining Letter of Credit Advances (excluding for purposes of this Section
2.9 any such increased costs resulting from (x) Taxes or Other Taxes (as to
which Section 2.11 shall govern) and (y) changes in the basis of taxation of
overall net income or overall gross income by the United States or by the
foreign jurisdiction or state under the laws of which such Lender Party is
organized or has its Applicable Lending Office or any political subdivision
thereof), then the Borrowers shall either (i) from time to time, upon demand by
such Lender Party (with a copy of such demand to the Administrative Agent), pay
to the Administrative Agent for the account of such Lender Party additional
amounts sufficient to compensate such Lender Party for such increased cost or
(ii) repay in full the outstanding principal balance of such affected Advances,
together with all interest accrued and unpaid thereon; provided, however, that a
Lender Party claiming additional amounts under this Section 2.9(a) agrees to use
best efforts (consistent with its internal policy and legal and regulatory
restrictions) to designate a different Applicable Lending Office if the making
of such a designation would avoid the need for, or reduce the amount of, such
increased cost that may thereafter accrue and would not, in the reasonable
judgment of such Lender Party, be otherwise disadvantageous to such Lender
Party. A certificate as to the amount of such increased cost, submitted to the
Borrowers by such Lender Party, shall be conclusive and binding for all
purposes, absent manifest error.
(b) If, after the date hereof, due to (i) the introduction or effectiveness
of, any change in, or any change in the interpretation of, any law or regulation
or (ii) the compliance with any
- 36 -
guideline or request from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in the
amount of capital required or reasonably expected to be maintained by any Lender
Party or any corporation controlling such Lender Party as a result of or based
upon the existence of such Lender Party's commitment to lend or to issue Letters
of Credit hereunder and other commitments of such type or the issuance or
maintenance of the Letters of Credit (or similar contingent obligations), then,
upon demand by such Lender Party (with a copy of such demand to the
Administrative Agent), the Borrowers shall pay to the Administrative Agent for
the account of such Lender Party, from time to time as reasonably specified by
such Lender Party, additional amounts sufficient to compensate such Lender Party
in the light of such circumstances, to the extent that such Lender Party
reasonably determines such increase in capital to be allocable to the existence
of such Lender Party's commitment to lend or to issue Letters of Credit
hereunder or to the issuance or maintenance of any Letters of Credit. A
certificate as to such amounts submitted to the Borrowers by such Lender Party
shall be conclusive and binding for all purposes, absent manifest error.
SECTION 2.10 Payments and Computations.
(a) The Borrowers shall make each payment hereunder and under the Notes,
irrespective of any right of counterclaim or set-off (except as otherwise
provided in Section 2.14), not later than 11:00 A.M. (New York time) on the day
when due in U.S. dollars to the Administrative Agent at the Administrative
Agent's Account in same day funds. The Administrative Agent will promptly
thereafter cause like funds to be distributed (i) if such payment by the
Borrowers is in respect of principal, interest, commitment fees or any other
Obligation then payable hereunder and under the Notes to more than one Lender
Party, to such Lender Parties for the account of their respective Applicable
Lending Offices ratably in accordance with the amounts of such respective
Obligations then payable to such Lender Parties and (ii) if such payment by the
Borrowers is in respect of any Obligation then payable hereunder to one Lender
Party, to such Lender Party for the account of its Applicable Lending Office, in
each case to be applied in accordance with the terms of this Agreement. Upon its
acceptance of an Assignment and Acceptance and recording of the information
contained therein in the Register pursuant to Section 11.7(d), from and after
the effective date of such Assignment and Acceptance, the Administrative Agent
shall make all payments hereunder and under the Notes in respect of the interest
assigned thereby to the Lender Party assignee thereunder, and the parties to
such Assignment and Acceptance shall make all appropriate adjustments in such
payments for periods prior to such effective date directly between themselves.
(b) If the Administrative Agent receives funds for application to the
Obligations under the Loan Documents under circumstances for which the Loan
Documents do not specify the Advances or the Facility to which, or the manner in
which, such funds are to be applied, the Administrative Agent may, but shall not
be obligated to, elect to distribute such funds to each Lender Party ratably in
accordance with such Lender Party's proportionate share of the principal amount
of all outstanding Advances and the Available Amount of all Letters of Credit
then outstanding in repayment or prepayment of such of the outstanding Advances
or other Obligations owed to such Lender Party, and for application to such
principal installments, as the Administrative Agent shall direct.
- 37 -
(c) The Borrowers hereby authorize each Lender Party, if and to the extent
payment owed to such Lender Party is not made when due hereunder or, in the case
of a Lender, under the Note held by such Lender, to charge from time to time
against any or all of the Borrowers' accounts with such Lender Party any amount
so due.
(d) All computations of interest, fees and Letter of Credit commissions
shall be made by the Administrative Agent on the basis of a year of 360 days, in
each case for the actual number of days (including the first day but excluding
the last day) occurring in the period for which such interest, fees or
commissions are payable; provided, however, that interest on Prime Rate Loans
shall be computed on the basis of a year of 365 days. Each determination by the
Administrative Agent of an interest rate, fee or commission hereunder shall be
conclusive and binding for all purposes, absent manifest error.
(e) Whenever any payment hereunder or under the Notes shall be stated to be
due on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or commitment fee, as the
case may be.
(f) Unless the Administrative Agent shall have received notice from the
Borrowers prior to the date on which any payment is due to any Lender Party
hereunder that the Borrowers will not make such payment in full, the
Administrative Agent may assume that the Borrowers have made such payment in
full to the Administrative Agent on such date and the Administrative Agent may,
in reliance upon such assumption, cause to be distributed to each such Lender
Party on such due date an amount equal to the amount then due such Lender Party.
If and to the extent the Borrowers shall not have so made such payment in full
to the Administrative Agent, each such Lender Party shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Lender
Party together with interest thereon, for each day from the date such amount is
distributed to such Lender Party until the date such Lender Party repays such
amount to the Administrative Agent, at the Federal Funds Rate.
SECTION 2.11 Taxes.
(a) Any and all payments by the Borrowers hereunder or under the Notes
shall be made, in accordance with Section 2.10, free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding, in
the case of each Lender Party and the Administrative Agent, net income taxes
that are imposed by the United States and net income taxes (or franchise taxes
imposed in lieu thereof) that are imposed on such Lender Party or the
Administrative Agent by the state or foreign jurisdiction under the laws of
which such Lender Party or the Administrative Agent (as the case may be) is
organized or any political subdivision thereof and, in the case of each Lender
Party, net income taxes (or franchise taxes imposed in lieu thereof) that are
imposed on such Lender Party by the state or foreign jurisdiction of such Lender
Party's Applicable Lending Office or any political subdivision thereof (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities in respect of payments hereunder or under the Notes being
hereinafter referred to as "Taxes"). If the Borrowers shall be required by law
to deduct any Taxes from or in respect of any sum payable hereunder or under any
Note to any Lender Party or the Administrative Agent, (i) the sum payable shall
be increased as may be
- 38 -
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.11) such Lender Party
or the Administrative Agent (as the case may be) receives an amount equal to the
sum it would have received had no such deductions been made, (ii) the Borrowers
shall make such deductions and (iii) the Borrowers shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable law.
(b) In addition, the Borrowers shall pay any present or future stamp,
documentary, excise, property or similar taxes, charges or levies that arise
from any payment made hereunder or under the Notes or from the execution,
delivery or registration of, performing under, or otherwise with respect to,
this Agreement or the Notes (hereinafter referred to as "Other Taxes").
(c) The Borrowers shall indemnify each Lender Party and the Administrative
Agent for the full amount of Taxes and Other Taxes, and for the full amount of
taxes imposed by any jurisdiction on amounts payable under this Section 2.11,
imposed on or paid by such Lender Party or the Administrative Agent (as the case
may be) and any liability (including penalties, additions to tax, interest and
expenses) arising therefrom or with respect thereto, except with respect to any
Lender Party or the Administrative Agent, as the case may be, for such a
liability arising from such Lender Party's or the Administrative Agent's, as the
case may be, willful misconduct or gross negligence. This indemnification shall
be made within thirty (30) days from the date on which such Lender Party or the
Administrative Agent, as the case may be, makes written demand specifying in
reasonable detail the basis therefor.
(d) Within thirty (30) days after the date of any payment of Taxes, the
Borrowers shall furnish to the Administrative Agent, at its address referred to
in Section 11.2, the original receipt of payment thereof or a certified copy of
such receipt. In the case of any payment hereunder or under the Notes by or on
behalf of the Borrowers through an account or branch outside the United States
or by or on behalf of the Borrowers by a payor that is not a United States
person, if the Borrowers determine that no Taxes are payable in respect thereof,
the Borrowers shall furnish, or shall cause such payor to furnish, to the
Administrative Agent, at such address, an opinion of counsel acceptable to the
Administrative Agent stating that such payment is exempt from Taxes. For
purposes of this subsection (d) and subsection (e), the terms "United States"
and "United States person" shall have the meanings specified in Section 7701 of
the Internal Revenue Code.
(e) Each Lender Party organized under the laws of a jurisdiction outside
the United States shall, on or prior to the date of its execution and delivery
of this Agreement in the case of each Initial Lender or Initial Issuing Bank, as
the case may be, and on the date of the Assignment and Acceptance pursuant to
which it became a Lender Party in the case of each other Lender Party, and from
time to time thereafter as requested in writing by the Borrowers or the
Administrative Agent (but only so long thereafter as such Lender Party remains
lawfully able to do so), provide each of the Administrative Agent and the
Borrowers with two (2) original Internal Revenue Service forms 1001 or 4224, as
appropriate, or any successor or other form prescribed by the Internal Revenue
Service, certifying that such Lender is exempt from or entitled to a reduced
rate of United States withholding tax on payments pursuant to this Agreement or
the Notes. If the forms provided by a Lender Party at the time such Lender Party
first becomes a party to this Agreement indicates or such Lender Party is later
subject to a United
- 39 -
States interest withholding tax rate in excess of zero, withholding tax at such
rate shall be considered excluded from Taxes unless and until such Lender Party
provides the appropriate form certifying that a lesser rate applies, whereupon
withholding tax at such lesser rate only shall be considered excluded from Taxes
for periods governed by such form; provided, however, that, if at the date of
the Assignment and Acceptance pursuant to which a Lender Party becomes a party
to this Agreement, the Lender Party assignor was entitled to payments under
subsection (a) in respect of United States withholding tax with respect to
interest paid at such date, then, to such extent, the term Taxes shall include
(in addition to withholding taxes that may be imposed in the future or other
amounts otherwise includable in Taxes) United States withholding tax, if any,
applicable with respect to the Lender Party assignee on such date. If any form
or document referred to in this subsection (e) requires the disclosure of
information, other than information necessary to compute the tax payable and
information required on the date hereof by Internal Revenue Service form 1001 or
4224, that the Lender Party reasonably considers to be confidential, the Lender
Party shall give notice thereof to the Borrowers and shall not be obligated to
include in such form or document such confidential information.
(f) For any period with respect to which a Lender Party has failed to
provide the Borrowers with the appropriate form described in subsection (e)
(other than if such failure is due to a change in law occurring after the date
on which a form originally was required to be provided or if such form otherwise
is not required under subsection (e)), such Lender Party shall not be entitled
to indemnification under subsection (a) or (c) with respect to Taxes imposed by
the United States by reason of such failure; provided, however, that should a
Lender Party become subject to Taxes because of its failure to deliver a form
required hereunder, the Borrowers shall take such steps as such Lender Party
shall reasonably request to assist such Lender Party to recover such Taxes.
SECTION 2.12 Sharing of Payments, Etc.
If any Lender Party shall obtain at any time any payment (whether
voluntary, involuntary, through the exercise of any right of set-off, or
otherwise) (i) on account of Obligations due and payable to such Lender Party
hereunder or under the Notes at such time in excess of its ratable share
(according to the proportion of (x) the amount of such Obligations due and
payable to such Lender Party at such time to (y) the aggregate amount of the
Obligations due and payable to all Lender Parties hereunder and under the Notes
at such time) of payments on account of the Obligations due and payable to all
Lender Parties hereunder or under the Notes at such time obtained by all the
Lender Parties at such time or (ii) on account of Obligations owing (but not due
and payable) to such Lender Party hereunder and under the Notes at such time in
excess of its ratable share (according to the proportion of (x) the amount of
such Obligations owing to such Lender Party at such time to (y) the aggregate
amount of the Obligations owing (but not due and payable) to all Lender Parties
hereunder and under the Notes at such time) of payments on account of the
Obligations owing (but not due and payable) to all Lender Parties hereunder and
under the Notes at such time obtained by all of the Lender Parties at such time,
such Lender Party shall forthwith purchase from the other Lender Parties such
participations in the Obligations due and payable or owing to them, as the case
may be, as shall be necessary to cause such purchasing Lender Party to share the
excess payment ratably with each of them; provided, however, that if all or any
portion of such excess payment is thereafter recovered from such purchasing
Lender Party, such purchase from each other Lender Party shall be rescinded and
each such other Lender Party shall repay to the purchasing Lender Party the
purchase price to the extent of such Lender Party's ratable share (according to
the
- 40 -
proportion of (x) the purchase price paid to such Lender Party to (y) the
aggregate purchase price paid to all Lender Parties) of such recovery together
with an amount equal to such Lender Party's ratable share (according to the
proportion of (x) the amount of such other Lender Party's required repayment to
(y) the total amount of such required repayments to the purchasing Lender Party)
of any interest or other amount paid or payable by the purchasing Lender Party
in respect of the total amount so recovered.
The Borrowers agree that any Lender Party so purchasing a participation from
another Lender Party pursuant to this Section 2.12 may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
set-off) with respect to such participation as fully as if such Lender Party
were the direct creditor of the Borrowers in the amount of such participation.
SECTION 2.13 Use of Proceeds.
The proceeds of the Advances and the issuances of Letters of Credit shall
be available, and the Borrowers shall use such proceeds and Letters of Credit
for general corporate purposes and working capital needs of Borrowers and their
subsidiaries.
SECTION 2.14 Defaulting Lenders.
(a) In the event that, at any one time, (i) any Lender Party shall be a
Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Advance to
the Borrowers and (iii) the Borrowers shall be required to make any payment
hereunder or under any other Loan Document to or for the account of such
Defaulting Lender, then the Borrowers may, so long as no Default shall occur or
be continuing at such time and to the fullest extent permitted by applicable
law, set off and otherwise apply the obligation of the Borrowers to make such
payment to or for the account of such Defaulting Lender against the obligation
of such Defaulting Lender to make such Defaulted Advance. In the event that, on
any date, the Borrowers shall so set off and otherwise apply its obligation to
make any such payment against the obligation of such Defaulting Lender to make
any such Defaulted Advance on or prior to such date, the amount so set off and
otherwise applied by the Borrowers shall constitute for all purposes of this
Agreement and the other Loan Documents an Advance by such Defaulting Lender made
on the date under the Facility pursuant to which such Defaulted Advance was
originally required to have been made pursuant to Section 2.1. Such Advance
shall be a Prime Rate Advance and shall be considered, for all purposes of this
Agreement, to comprise part of the Borrowing in connection with which such
Defaulted Advance was originally required to have been made pursuant to Section
2.1. The Borrowers shall notify the Administrative Agent at any time the
Borrowers exercise their right of set-off pursuant to this subsection (a) and
shall set forth in such notice (i) the name of the Defaulting Lender and the
Defaulted Advance required to be made by such Defaulting Lender and (ii) the
amount set off and otherwise applied in respect of such Defaulted Advance
pursuant to this subsection (a). Any portion of such payment otherwise required
to be made by the Borrowers to or for the account of such Defaulting Lender
which is paid by the Borrowers, after giving effect to the amount set off and
otherwise applied by the Borrowers pursuant to this subsection (a), shall be
applied by the Administrative Agent as specified in subsection (b) or (c) of
this Section 2.14.
(b) In the event that, at any one time, (i) any Lender Party shall be a
Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Amount to
the Administrative Agent or any of the other Lender Parties and (iii) the
Borrowers shall make any payment hereunder or under any other Loan Document to
the Administrative Agent for the account of such Defaulting
- 41 -
Lender, then the Administrative Agent may, on its behalf or on behalf of such
other Lender Parties and to the fullest extent permitted by applicable law,
apply at such time the amount so paid by the Borrowers to or for the account of
such Defaulting Lender to the payment of each such Defaulted Amount to the
extent required to pay such Defaulted Amount. In the event that the
Administrative Agent shall so apply any such amount to the payment of any such
Defaulted Amount on any date, the amount so applied by the Administrative Agent
shall constitute for all purposes of this Agreement and the other Loan
Documents, payment, to such extent, of such Defaulted Amount on such date. Any
such amount so applied by the Administrative Agent shall be retained by the
Administrative Agent or distributed by the Administrative Agent to such other
Lender Parties, ratably in accordance with the respective portions of such
Defaulted Amounts payable at such time to the Administrative Agent and such
other Lender Parties and, if the amount of such payment made by the Borrower
shall at such time be insufficient to pay all Defaulted Amounts owing at such
time to the Administrative Agent and the other Lender Parties, in the following
order of priority:
(i) first, to the Administrative Agent for any Defaulted Amount then
owing to the Administrative Agent; and
(ii) second, to the Lender Parties for any Defaulted Amounts then
owing to such Lender Parties, ratably in accordance with such respective
Defaulted Amounts then owing to such Lender Parties.
Any portion of such amount paid by the Borrowers for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by the
Administrative Agent pursuant to this subsection (b), shall be applied by the
Administrative Agent as specified in subsection (c) of this Section 2.14.
(c) In the event that, at any one time, (i) any Lender Party shall be a
Defaulting Lender, (ii) such Defaulting Lender shall not owe a Defaulted Advance
or a Defaulted Amount and (iii) the Borrowers, the Administrative Agent or any
other Lender Party shall be required to pay or distribute any amount hereunder
or under any other Loan Document to or for the account of such Defaulting
Lender, then the Borrowers or such other Lender Party shall pay such amount to
the Administrative Agent to be held by the Administrative Agent, to the fullest
extent permitted by applicable law, in escrow or the Administrative Agent shall,
to the fullest extent permitted by applicable law, hold in escrow such amount
otherwise held by it. Any funds held by the Administrative Agent in escrow under
this subsection (c) shall be deposited by the Administrative Agent in an account
with Fleet, in the name and under the control of the Administrative Agent, but
subject to the provisions of this subsection (c). The terms applicable to such
account, including the rate of interest payable with respect to the credit
balance of such account from time to time, shall be Fleet's standard terms
applicable to escrow accounts maintained with it. Any interest credited to such
account from time to time shall be held by the Administrative Agent in escrow
under, and applied by the Administrative Agent from time to time in accordance
with the provisions of, this subsection (c). The Administrative Agent shall, to
the fullest extent permitted by applicable law, apply all funds so held in
escrow from time to time to the extent necessary to make any Advances required
to be made by such Defaulting Lender and to pay any amount payable by such
Defaulting Lender hereunder and under the other Loan Documents to the
Administrative Agent or any other Lender Party, as and when such Advances
- 42 -
or amounts are required to be made or paid and, if the amount so held in escrow
shall at any time be insufficient to make and pay all such Advances and amounts
required to be made or paid at such time, in the following order of priority:
(i) first, to the Administrative Agent for any amount then due and
payable by such Defaulting Lender to the Administrative Agent hereunder;
(ii) second, to the Lender Parties for any amount then due and payable
by such Defaulting Lender to such Lender Parties hereunder, ratably in
accordance with such respective amounts then due and payable to such Lender
Parties; and
(iii) third, to the Borrowers for any Advance then required to be made
by such Defaulting Lender pursuant to a Commitment of such Defaulting
Lender.
In the event that any Lender Party that is a Defaulting Lender shall, at any
time, cease to be a Defaulting Lender, any funds held by the Administrative
Agent in escrow at such time with respect to such Lender Party shall be
distributed by the Administrative Agent to such Lender Party and applied by such
Lender Party to the Obligations owing to such Lender Party at such time under
this Agreement and the other Loan Documents in such manner as the Administrative
Agent shall reasonably direct.
(d) The rights and remedies against a Defaulting Lender under this Section
2.14 are in addition to other rights and remedies that the Borrowers may have
against such Defaulting Lender with respect to any Defaulted Advance and that
the Administrative Agent or any Lender Party may have against such Defaulting
Lender with respect to any Defaulted Amount.
ARTICLE 3
CONDITIONS OF LENDING
SECTION 3.1 Conditions Precedent to Extension of Revolving Credit
Termination Date. The obligation of each Lender to extend the Revolving Credit
Termination Date on the terms provided herein is subject to the satisfaction of
each of the following conditions precedent before or concurrently with the
Effective Date:
(a) The Administrative Agent shall have received on or before the Effective
Date the following, each dated such day (unless otherwise specified), in form
and substance satisfactory to the Administrative Agent and the Lenders, and in
sufficient copies, for each Lender Party:
(i) The Notes payable to the order of the Lenders duly executed by the
Borrowers.
(ii) A security agreement in substantially the form of Exhibit E
(together with each other security agreement delivered pursuant to Section
5.13, in each case as amended, supplemented or otherwise modified from time
to time in accordance with its terms, each a "Security Agreement"), duly
executed by the Borrowers and each Guarantor, together with:
- 43 -
(A) proper, duly executed financing statements (or assignments or
amendments thereto) under the Uniform Commercial Code of all
jurisdictions that the Administrative Agent may deem necessary or
desirable in order to perfect or continue perfection and protect the
first priority Liens and security interests created under the Security
Agreement, covering the Collateral described in the Security Agreement
which are able to be perfected by filing;
(B) evidence of the completion of all other recordings and
filings of or with respect to the Security Agreement that the
Administrative Agent may deem necessary or desirable in order to
perfect and protect the Liens created thereby;
(C) evidence of the insurance required by the terms of the
Security Agreement;
(D) copies of the Assigned Agreements, if any, referred to in the
Security Agreement, together with a consent (to the extent required by
the Administrative Agent) to such assignments, if any, in
substantially the form of Exhibit C to the Security Agreement, duly
executed by each party to such Assigned Agreements other than the
applicable Borrower;
(E) certificates representing the Pledged Shares referred to in
the Security Agreement, accompanied by undated stock powers executed
in blank and irrevocable proxies;
(F) a duly executed note assignment agreement in form and
substance satisfactory to the Administrative Agent (as amended,
modified and supplemented from time to time, the "Note Assignment
Agreement") covering (and together with) all intercompany notes made
by the Borrowers' Subsidiaries payable to the Borrowers and duly
endorsed to the Administrative Agent;
(G) evidence that all other action that the Administrative Agent
may deem necessary or desirable in order to perfect the first priority
liens and security interests created under the Security Agreement has
been taken.
(iii) An intellectual property security agreement in substantially the
form of Exhibit G hereto (together with each other intellectual property
security agreement delivered pursuant to Section 5.13, in each case as
amended, supplemented or otherwise modified from time to time in accordance
with its terms, each an "Intellectual Property "Security Agreement"), duly
executed by the Borrowers and each Guarantor, together with evidence that
all action that the Administrative Agent may deem necessary or desirable in
order to perfect and protect the first priority Liens and security
interests created under the Intellectual Property Security Agreement has
been taken.
(iv) A guaranty in substantially the form of Exhibit H hereto (as
hereafter amended, supplemented or otherwise modified from time to time in
accordance with its terms, whether one or more, the "Subsidiary Guaranty"),
duly executed by each Domestic Subsidiary of the Borrowers other than
Inactive Subsidiaries, provided, that each such Inactive Subsidiary is
- 44 -
dissolved or merged into MediaBay within thirty (30) days after the
Effective Date (or sixty (60) days with respect to any corporation
organized under the laws of the state of New York) and that a duly
certified copy of each applicable certificate of dissolution or merger is
delivered to Administrative Agent.
(v) For each Borrower, (i) a true and correct copy of the charter of
such Borrower and each amendment thereto, (ii) a true and correct copy of
the by-laws of such Borrower and (iii) resolutions of the Board of
Directors of such Borrower approving this Agreement, the Notes, the
Huntingdon Financing Documents, the Huntingdon Secured Subordinated Debt
Documents and each other Loan Document to which it is or is to be a party,
and of all documents evidencing other necessary corporate action and
governmental and other third party approvals and consents, if any, with
respect to this Agreement, the Notes, the Huntingdon Financing Documents,
the Huntingdon Secured Subordinated Debt Documents and each other Loan
Document, each certified as of the Effective Date by such Borrower's
corporate secretary or an assistant secretary as being in full force and
effect without any modification or amendment.
(vi) For each Borrower, a copy of a certificate of the Secretary of
State of the jurisdiction of its incorporation, dated within twenty (20)
Business Days of the Effective Date, listing the charter of such Borrower
and each amendment thereto on file in its office and certifying that (A)
such amendments are the only amendments to such Borrower's charter on file
in its office, (B) to the extent obtainable, that such Borrower has paid
all franchise taxes to the date of such certificate and (C) such Borrower
is duly incorporated and in good standing or existing, as the case may be,
under the laws of the State of the jurisdiction of its incorporation.
(vii) [Intentionally Left Blank]
(viii) A certificate of each Loan Party signed on behalf of such Loan
Party by a Responsible Officer and the Secretary or an Assistant Secretary
of such Loan Party, dated the Effective Date (the statements made in such
certificate shall be true on and as of the Effective Date), certifying as
to (and attaching in the case of (A)): (A) resolutions of the Board of
Directors of such Loan Party approving this Agreement, the Notes, the
Subsidiary Guaranty, the Huntingdon Financing Documents, the Huntingdon
Secured Subordinated Debt Documents and each other Loan Document to which
it is or is to be a party, and of all documents evidencing other necessary
corporate action and governmental and other third party approvals and
consents, if any, with respect to this Agreement, the Notes, the Huntingdon
Financing Documents, the Huntingdon Secured Subordinated Debt Documents and
each other Loan Document, (B) the due incorporation and good standing of
such Loan Party as a corporation organized under the laws of the
jurisdiction of its incorporation, and the absence of any proceeding for
the dissolution or liquidation of such Loan Party, (C) the truth of the
representations and warranties contained in the Loan Documents as though
made on and as of the Effective Date except for such representations and
warranties that expressly relate to an earlier date and except for changes
in the ordinary course of business none of which individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect
and (D) after giving effect to this Agreement, the absence of any event
occurring and continuing, or resulting from the amendment and restatement
of the Prior Credit Agreement, that constitutes a Default or an Event of
Default.
- 45 -
(ix) A certificate of the Secretary or an Assistant Secretary of each
Loan Party certifying the names and true signatures of the officers of such
Loan Party authorized to sign this Agreement, the Notes, each other Loan
Document to which they are or are to be parties and the other documents to
be delivered hereunder and thereunder.
(x) Such financial, business and other information regarding each Loan
Party as any of the Lenders shall have reasonably requested.
(xi) Evidence that the Huntingdon Financing Debt has been made on
terms and conditions satisfactory to the Lenders and that an advance
thereunder, in the amount of $2,500,000, has been made to MediaBay.
(xii) A certified copy of the Huntingdon Financing Documents.
(xiii) A certified copy of the Huntingdon Secured Subordinated Loan
Documents.
(xiv) The Lenders and lenders of the Huntingdon Financing Debt shall
have executed the Huntingdon Financing Intercreditor Agreement dated the
date hereof in form and substance satisfactory to the Required Lenders.
(xv) The Lenders and lenders of the Huntingdon Secured Subordinated
Loan shall have executed the Huntingdon Secured Subordinated Intercreditor
Agreement dated the date hereof in form and substance satisfactory to the
Required Lenders.
(xvi) Evidence that the holders of all outstanding Senior Subordinated
Debt have consented to the Transaction, the Huntingdon Financing Debt and
the Huntingdon Secured Subordinated Loan.
(xvii) A copy of a certificate of the Secretary of State of Florida,
dated within twenty (20) Business Days of the Effective Date, listing the
charter of Huntingdon and each amendment thereto on file in its office and
certifying that (A) such amendments are the only amendments to Huntingdon's
charter on file in its office, (B) to the extent obtainable, that such
Huntingdon has paid all franchise taxes to the date of such certificate and
(C) Huntingdon is duly incorporated and in good standing or existing, as
the case may be, under the laws of the State of Florida.
(xviii) A certificate of the Secretary or an Assistant Secretary of
Huntingdon certifying the names and true signatures of the officers of
Huntingdon authorized to sign each Loan Document to which it is a party and
the other documents to be delivered hereunder and thereunder.
(xix) A fee letter of even date herewith (the "ING Fee Letter")
between Borrowers and ING setting forth the agency fees to be paid to ING
thereunder at the times specified for payment therein.
(b) Perfection of Liens. All Uniform Commercial Code and other filing and
recording fees and taxes shall have been paid or duly provided for. All Liens
granted to the
- 46 -
Administrative Agent with respect to the Collateral are valid and effective and,
upon the filing of the duly executed Uniform Commercial Code financing
statements (or similar filings required by the applicable statutes of any
jurisdiction in which the Administrative Agent is being granted a Lien by any
Loan Party), will be perfected and of first priority, except as otherwise
permitted under this Agreement and except for compliance with the Assignment of
Claims Act of 1940, as amended, with respect to Receivables where the account
debtor is the United States of America or any department, agency or
instrumentality thereof. All certificates representing capital stock included in
the Collateral shall have been delivered to the Administrative Agent (with duly
executed stock powers, as appropriate) and all instruments included in the
Collateral shall have been delivered to the Administrative Agent (duly endorsed
to the Administrative Agent).
(c) The Lenders shall be satisfied that all Surviving Debt shall be on
terms and conditions satisfactory to the Lenders.
(d) There shall have occurred no change in the business, condition
(financial or otherwise), results of operations, performance or properties of
the Borrowers and their Subsidiaries, taken as a whole, since December 31, 2000,
that could reasonably be expected to result in a Material Adverse Effect, and
there shall have occurred no change in the business, condition (financial or
otherwise).
(e) Other than the Disclosed Litigation, there shall exist no action, suit,
investigation, litigation or proceeding pending or threatened in any court or
before any arbitrator or governmental or regulatory agency or authority that
could reasonably be expected to have a Material Adverse Effect, and there shall
have been no Material Adverse Effect in the status, or financial effect on the
Borrowers or their Subsidiaries as a whole, of the Disclosed Litigation from
that described on Schedule 4.9.
(f) All governmental and third party consents and approvals necessary in
connection with any aspect of the Transaction, the Huntingdon Financing Debt,
the Huntingdon Secured Subordinated Debt and the Senior Subordinated Debt
(including, but not limited to, a letter of consent from the Nasdaq Stock Market
indicating its consent to the issuance of the Series A Convertible Preferred
Stock of MediaBay which shall be issuable pursuant to the terms of the
Huntingdon Financing Documents, the Huntingdon Secured Subordinated Debt
Documents and the Senior Subordinated Debt Documents) shall have been obtained
(without the imposition of any conditions that are not acceptable to the
Lenders) and shall remain in effect; all applicable waiting periods shall have
expired without any adverse action being taken by any competent authority; and
no law or regulation shall be applicable in the judgment of the Lenders that
restrains, prevents or imposes materially adverse conditions upon any aspect of
the Facilities.
(g) After giving effect to this Agreement, there shall exist no Default or
Event of Default under any of the Loan Documents, and all legal matters incident
to this Agreement shall be reasonably satisfactory to counsel for the
Administrative Agent.
(h) All accrued reasonable fees and expenses of the Administrative Agent
under the Prior Credit Agreement, the Administrative Agent and the Lenders
(including the fees and expenses of counsel for the Administrative Agent and the
Lenders under the Prior Credit
- 47 -
Agreement, the Administrative Agent and the Lenders and local counsel for the
Administrative Agent) shall have been paid.
(i) The Administrative Agent shall be reasonably satisfied with the amount,
types and terms and conditions of all insurance maintained by or to be
maintained by MediaBay and its Subsidiaries, and the Administrative Agent shall
have received, as deemed necessary in its sole discretion, endorsements naming
the Administrative Agent, on behalf of the Lenders, as loss payee or an
additional insured, as applicable, under all insurance policies to be maintained
with respect to the properties of MediaBay and its Subsidiaries forming any part
of the Lenders' Collateral under the Security Agreement and the other Loan
Documents and Collateral Documents.
(j) The Administrative Agent shall have received duly executed and
delivered counterparts of landlord waivers from all landlords and leasehold
mortgage holders and bailee letters from all warehousemen and bailees with
respect to any Inventory located at a location that is not owned by a Borrower,
as deemed necessary or desirable in the Administrative Agent's sole discretion,
to preserve or otherwise in respect of the Administrative Agent's rights in
Collateral. The Administrative Agent shall also have received such bank agency
and/or lockbox agreements, third party consents, intercreditor agreements or
other agreements, as deemed necessary or desirable in the Administrative Agent's
sole discretion, to preserve or otherwise in respect of the Administrative
Agent's rights in the Collateral.
(k) The Administrative Agent shall have received such other approvals,
opinions or documents as any Lender through the Administrative Agent may
reasonably request, and all legal matters incident to such Borrowing shall be
satisfactory to counsel for the Administrative Agent.
(l) The Administrative Agent shall have received satisfactory opinions of
counsel for the Borrowers and the Guarantors and local and special counsel to
the extent reasonably requested by the Administrative Agent, as to the
Transaction.
SECTION 3.2 Conditions Precedent to Each Borrowing and Issuance.
The obligation of each appropriate Lender to make an Advance (other than a
Letter of Credit Advance made by the Issuing Bank or a Revolving Credit Lender
pursuant to Section 2.3(c), and the obligation of the Issuing Bank to issue a
Letter of Credit (including the initial issuance thereof) or renew a Letter of
Credit and the right of the Borrowers to request the issuance or renewal of a
Letter of Credit, shall each be subject to the further conditions precedent that
on the date of each such Borrowing or issuance or renewal:
(a) Each of the conditions precedent listed in Section 3.1 shall have been
satisfied or waived in accordance with this Agreement.
(b) The following statements shall be true and the Administrative Agent
shall have received a certificate signed by a duly authorized Responsible
Officer of each of the Borrowers, dated the date of such Borrowing or issuance
or renewal, stating that (and each of the giving of the applicable Notice of
Borrowing, or Notice of Issuance or Notice of Renewal and the acceptance by the
Borrowers of the proceeds of a Borrowing or of a Letter of Credit or the
- 48 -
renewal of a Letter of Credit shall constitute a representation and warranty by
the Borrowers that both on the date of such notice and on the date of such
Borrowing or issuance or renewal such statements are true):
(i) the representations and warranties contained in each Loan Document
are correct on and as of such date, before and after giving effect to such
Borrowing or issuance or renewal and to the application of the proceeds
therefrom, as though made on and as of such date (except for such
representations and warranties that expressly relate to an earlier date and
except for changes in the ordinary course of business which are not
prohibited hereunder and none of which individually or in the aggregate
would reasonably be expected to have a Material Adverse Effect); and
(ii) no event has occurred and is continuing, or would result from
such Borrowing or issuance or renewal or from the application of the
proceeds therefrom, that constitutes a Default or an Event of Default.
(c) The Administrative Agent shall have received such other approvals,
opinions or documents as any appropriate Lender through the Administrative Agent
may reasonably request, and all legal matters incident to such Borrowing or
issuance of such Letter of Credit shall be satisfactory to counsel for the
Administrative Agent.
SECTION 3.3 Determinations Under Section 3.1.
For purposes of determining compliance with the conditions specified in
Section 3.1, each Lender shall be deemed to have consented to, approved or
accepted or to be satisfied with each document or other matter required
thereunder to be consented to or approved by or acceptable or satisfactory to
the Lenders unless an officer of the Administrative Agent responsible for the
transactions contemplated by the Loan Documents shall have received written
notice from such Lender prior to the Effective Date specifying its objection
thereto.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE BORROWERS
Each Borrower, jointly and severally, represents and warrants as follows:
SECTION 4.1 Organization.
Each Loan Party (a) is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation, (b) is
duly qualified and in good standing as a foreign corporation in each other
jurisdiction in which it owns or leases property or in which the conduct of its
business requires it to so qualify or be licensed except where the failure to so
qualify or be licensed could not reasonably be expected to have a Material
Adverse Effect and (c) has all requisite corporate power and authority
(including, without limitation, all governmental licenses, permits and other
approvals) to own or lease and operate its properties and to carry on its
business as now conducted and as proposed to be conducted.
SECTION 4.2 Subsidiaries.
Set forth on Schedule 4.2 hereto is a complete and accurate list of the
Borrowers and all Subsidiaries of each Loan Party, showing as of the date hereof
(and
- 49 -
updated on a quarterly basis to reflect changes permitted under this Agreement)
(i) the jurisdiction of its incorporation or formation, (ii) the jurisdictions
in which such Loan Party is duly qualified and in good standing as a foreign
corporation or Person, (iii) the number of shares of each class of capital stock
or other equity interests authorized, and the number outstanding, and as to each
of them that is a legal entity other than a corporation (but not a natural
person), and the record owners (other than shares of such Borrower publicly held
other than by Affiliates) of such equity interests, and the percentage of the
outstanding shares or other interests of each such class owned (directly or
indirectly) by such Loan Party and the number of shares or other interests
covered by all outstanding options, warrants, rights of conversion or purchase
and similar rights. All of the outstanding capital stock or other interests of
all of such Borrower and each of such Subsidiaries has been validly issued, is
fully paid and non-assessable and is owned by such Loan Party (except for the
publicly owned stock of such Borrower) or one or more of its Subsidiaries free
and clear of all Liens, except those created under the Collateral Documents.
SECTION 4.3 Corporate Power, Authorization.
The execution, delivery and performance by each Loan Party of this
Agreement, the Notes, and each other Loan Document to which it is or is to be a
party, and the consummation of the Transaction, are within such Loan Party's
corporate powers, have been duly authorized by all necessary corporate action,
and do not (a) contravene such Loan Party's charter or bylaws, (b) violate any
law (including, without limitation, the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, and the Racketeer Influenced and
Corrupt Organizations Chapter of the Organized Crime Control Act of 1970), rule,
regulation (including, without limitation, Regulation T, U or X of the Board of
Governors of the Federal Reserve System), order, writ, judgment, injunction,
decree, determination or award, (c) conflict with or result in the breach of, or
constitute a default under, any material contract, loan agreement, indenture,
mortgage, deed of trust, lease or other material instrument or agreement binding
on or affecting any Loan Party, any of its Subsidiaries or any of their
respective properties where the conflict, breach or default relates to an
instrument, agreement or other document involving assets, revenues or
liabilities in excess of $250,000 individually or $500,000 in the aggregate or
otherwise could reasonably be expected to have a Material Adverse Effect, or (d)
except for the Liens created under the Collateral Documents, result in or
require the creation or imposition of any Lien upon or with respect to any of
the properties of any Loan Party or any of its Subsidiaries. No Loan Party or
any of its Subsidiaries is in violation of any such law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award or in breach
of any such contract, loan agreement, indenture, mortgage, deed of trust, lease
or other instrument or agreement, the violation or breach of which could
reasonably be expected to have a Material Adverse Effect.
SECTION 4.4 Governmental Authorizations, Approvals.
No authorization or approval or other action by, and no notice to or filing
with, any governmental authority or regulatory body or any other third party is
or was required for (a) the due execution, delivery, recordation, filing or
performance by any Loan Party of this Agreement, the Notes, any other Loan
Document to which it is or is to be a party, or for the consummation of the
Transaction, (b) the grant by any Loan Party of the Liens granted by it pursuant
to the Collateral Documents, (c) the perfection or maintenance of the Liens
created by the Collateral Documents (including the first priority nature
thereof) which Liens are able to be perfected by filings or the taking of
possession with respect to the Collateral or such other actions as may be
required by the Administrative Agent and
- 50 -
agreed upon by the Borrowers or (d) the exercise by the Administrative Agent or
any Lender Party of its rights under the Loan Documents or the remedies in
respect of the Collateral pursuant to the Collateral Documents, except for the
authorizations, approvals, actions, notices and filings listed on Schedule 4.4,
all of which have been duly obtained, taken, given or made and are in full force
and effect, except for such actions regarding the perfection of certain items of
Collateral not required to be taken by the Administrative Agent or except where
the failure to receive any authorizations, approvals, actions, notices or
filings under instruments, agreements or other documents relates to an
instrument, agreement or other document involving assets, revenues or
liabilities in excess of $250,000 individually, or $500,000 in the aggregate or
otherwise would not be reasonably likely to have a Material Adverse Effect. All
applicable waiting periods in connection with the Transaction have expired
without any action having been taken by any competent authority restraining,
preventing or imposing materially adverse conditions upon the Transaction or the
rights of the Loan Parties or their Subsidiaries freely to transfer or otherwise
dispose of, or to create any Lien on, any properties now owned or hereafter
acquired by any of them.
SECTION 4.5 Due Execution, Validity, Enforceability.
This Agreement and each of the Notes and each other Loan Document has been
or when delivered hereunder will have been, duly executed and delivered by each
Loan Party thereto. This Agreement and each of the Notes and each other Loan
Document has been or when delivered hereunder will be, the legal, valid and
binding obligation of each Loan Party thereto, enforceable against such Loan
Party in accordance with its terms, except (a) as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally, except
that such laws shall not materially interfere with the practical realization of
the benefits of the Security Documents or the security interests or Liens
created thereby except for (i) possible delay, (ii) situations which may arise
under Chapter 11 of the Bankruptcy Code, and (iii) equitable orders of the
Bankruptcy Court, and (b) to the extent that such enforceability is subject to
general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law).
SECTION 4.6 Financial Statements.
The Borrowers have delivered or at Closing will deliver to the
Administrative Agent (i) the balance sheets of the Borrowers as at December 31,
2000, and the related statements of income and cash flows for the fiscal year
then ended. The financial statements of the Borrowers and their Subsidiaries
referred to above have been duly certified by the Chief Financial Officer of the
applicable Borrower, copies of which have been furnished to each Lender Party,
present fairly the Consolidated (and, with respect to the balance sheets dated
December 31, 2000, consolidating) financial condition of the Borrowers and their
Subsidiaries as at such date and the Consolidated (and, with respect to the
statements of income dated December 31, 2000, consolidating) results of the
operations of the Borrowers and their Subsidiaries for the period ended on such
date, all in accordance with GAAP applied on a consistent basis, and, since
September 30, 2000, there has been no change that could reasonably be expected
to have a Material Adverse Effect on the Borrowers and their Subsidiaries or, to
its knowledge, material adverse effect on the business, financial condition,
results of operations, performance, reasonably foreseeable business prospects or
properties taken as a whole.
SECTION 4.7 Inactive Subsidiaries.
Each of the Subsidiaries set forth on Schedule 4.7 conducts no business and
has no material assets or liabilities.
- 51 -
SECTION 4.8 Accurate Information.
None of the information, exhibits or reports furnished by any Loan Party to
the Administrative Agent or any Lender Party in connection with the Loan
Documents or pursuant to the terms of the Loan Documents contained any untrue
statement of a material historical fact or omitted to state a material
historical fact necessary to make the statements made therein not misleading,
provided that with regard to any forward-looking statements contained in such
documents or information, exhibits or reports, such forward-looking statements
are based on assumptions that were reasonable as of the time at which they were
made.
SECTION 4.9 Litigation.
Other than the litigation disclosed on Schedule 4.9 (the "Disclosed
Litigation"), there is no action, suit, investigation, litigation or proceeding
affecting the Borrowers, any other Loan Party or any of their respective
Subsidiaries, including, without limitation, any Environmental Action, pending
or, to its knowledge, threatened before any court, governmental agency or
arbitrator that could reasonably be expected to have a Material Adverse Effect,
and there has been no change in the status, or financial effect on any Loan
Party or any of its Subsidiaries, of the Disclosed Litigation from that
described on Schedule 4.9 that could reasonably be expected to have a Material
Adverse Effect.
SECTION 4.10 Regulation U.
Neither the Borrowers nor any other Loan Party nor any of their respective
Subsidiaries is engaged in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
SECTION 4.11 ERISA.
(a) Except as set forth on Schedule 4.11 hereto, neither the Borrowers nor
any of their ERISA Affiliates maintains or has maintained any Plans or
Multiemployer Plans. Set forth on Schedule 4.11 is a complete and accurate list
of all Welfare Plans and all defined contribution plans in respect of which any
Loan Party could have liability.
(b) Except as set forth in the financial statements referred to in Section
4.6 and in Article 7, neither the Borrowers, any of the other Loan Parties nor
any of their respective Subsidiaries has any material liability with respect to
"expected post retirement benefit obligations" within the meaning of Statement
of Financial Accounting Standards No. 106.
SECTION 4.12 Casualty.
Neither the business nor the properties of any Loan Party or any of its
Subsidiaries are affected by any fire, explosion, accident, strike, lockout or
other labor dispute, drought, storm, hail, earthquake, embargo, act of God or of
the public enemy or other casualty (whether or not covered by insurance) that
could reasonably be expected to have a Material Adverse Effect.
SECTION 4.13 Environmental Matters.
(a) The operations and properties of each Loan Party and each of its
Subsidiaries comply in all known material respects with all applicable
Environmental Laws and Environmental Permits, all known past non-compliance with
such Environmental Laws and Environmental Permits has been resolved without
ongoing obligations or costs, and no circumstances exist that could reasonably
be expected to (i) form the basis of an Environmental
- 52 -
Action against any Loan Party or any of its Subsidiaries or any of their
properties that could reasonably be expected to have a Material Adverse Effect
or (ii) cause any such property to be subject to any material restrictions on
ownership, occupancy, use or transferability under any Environmental Law.
(b) Except as disclosed in the environmental assessment reports listed on
Schedule 4.13 hereto, (i) none of the properties currently or formerly owned or
operated by any Loan Party or any of its Subsidiaries is listed or proposed for
listing on the NPL or on the CERCLIS or any analogous foreign, state or local
list or is adjacent to any such property; (ii) there are no and, to the best of
its knowledge, never have been any underground or aboveground storage tanks or
any surface impoundments, septic tanks, pits, sumps or lagoons in which
Hazardous Materials are being or, to the best of its knowledge, have been
treated, stored or disposed on any property currently owned or operated by any
Loan Party or any of its Subsidiaries or on any property formerly owned or
operated by any Loan Party or any of its Subsidiaries; (iii) there is no
asbestos or asbestos-containing material on any property currently owned or
operated by any Loan Party or any of its Subsidiaries; and (iv) Hazardous
Materials have not been released, discharged or disposed of on any property
currently owned or operated by any Loan Party or any of its Subsidiaries, or any
property formerly owned or operated by any Loan Party or any of its
Subsidiaries.
(c) Except as disclosed in the environmental assessment reports listed on
Schedule 4.13, no Loan Party nor any of its Subsidiaries is undertaking or has
not completed, either individually or together with other potentially
responsible parties, any investigation or assessment or Remedial, Response or
Removal action relating to any actual or threatened release, discharge or
disposal of Hazardous Materials at any site, location or operation, either
voluntarily or pursuant to the order of any governmental or regulatory authority
or the requirements of any Environmental Law; and all Hazardous Materials
generated, used, treated, handled or stored at, or transported to or from, any
property currently owned or operated by any Loan Party or any of its
Subsidiaries or any property formerly owned or operated by any Loan Party or any
of its Subsidiaries have been disposed of in a manner not reasonably expected to
result in material liability to any Loan Party or any of its Subsidiaries.
SECTION 4.14 Restrictive Agreements.
Except as set forth on Schedule 4.14, no Loan Party nor any of its
Subsidiaries is a party to any indenture, loan or credit agreement or any lease
or other agreement or instrument or subject to any charter or corporate
restriction that could reasonably be expected to have a Material Adverse Effect.
SECTION 4.15 Priority of Liens.
The Collateral Documents, together with all filings and delivery to the
Administrative Agent or its agent of instruments requiring possession for
perfection create in favor of the Administrative Agent, for the ratable benefit
of the Lenders, a valid and perfected first priority security interest in the
Collateral which security interest is able to be perfected by filings or the
taking of possession with respect to the Collateral, to the extent the
Administrative Agent actually takes such possession, securing the payment of the
Obligations, and all filings and other actions necessary or reasonably desirable
to perfect and protect such security interest as requested by the Administrative
Agent have been duly taken. The Loan Parties are the legal and beneficial owners
of the Collateral free and clear of any Lien,
- 53 -
except for the liens and security interests created or expressly permitted under
the Loan Documents.
SECTION 4.16 Taxes.
(a) Each Loan Party and each of its Subsidiaries has filed, has caused to
be filed or has been included in all tax returns (Federal, state, local and
foreign) required to be filed and has paid all taxes shown thereon to be due,
together with applicable interest and penalties.
(b) Set forth on Schedule 4.16 is a complete and accurate list of each
taxable year of each Loan Party and each of its Subsidiaries for which Federal
income tax returns have been filed and for which the expiration of the
applicable statute of limitations for assessment or collection has not occurred
by reason of extension or otherwise (an "Open Year").
(c) There is no unpaid amount of adjustments to the Federal income tax
liability of each Loan Party and each of its Subsidiaries proposed by the
Internal Revenue Service to the Borrowers or any of their Subsidiaries with
respect to Open Years. No issues have been raised by the Internal Revenue
Service to the Borrower or any of their Subsidiaries in respect of Open Years
that, in the aggregate, could reasonably be expected to have a Material Adverse
Effect.
(d) There is no unpaid amount of adjustments to the state, local and
foreign tax liability of each Loan Party and each of its Subsidiaries proposed
by any state, local or foreign taxing authorities to the Borrowers or any of
their Subsidiaries (other than amounts arising from adjustments to Federal
income tax returns). No issues have been raised by such taxing authorities to
such Borrower or any of its Subsidiaries that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
SECTION 4.17 Compliance with Securities Laws.
No Loan Party and none of any Loan Party's Subsidiaries is an "investment
company," or an "affiliated person" of, or "promoter" or "principal underwriter"
for, an "investment company," as such terms are defined in the Investment
Company Act of 1940, as amended. Neither the making of any Advances, nor the
issuance of any Letters of Credit, nor the application of the proceeds or
repayment thereof by the Borrowers, nor the consummation of the Transaction,
will violate any provision of such Act or any rule, regulation or order of the
Securities and Exchange Commission thereunder or any takeover, disclosure or
other federal, state or foreign securities law or Regulations T, U or X of the
Federal Reserve Board. The Borrowers are not subject to regulation under any
federal, state or foreign statute or regulation which limits its ability to
incur Debt.
SECTION 4.18 [Intentionally Left Blank.]
SECTION 4.19 Debt.
(a) Set forth on Schedule 4.19(a) is a complete and accurate list of all
Debt of the Borrowers and their Subsidiaries the principal amount of each such
Debt which is greater than $250,000 (the "Existing Debt"), showing as of the
date hereof immediately before giving effect to the Transactions the principal
amount outstanding thereunder and the maturity date thereof.
- 54 -
(b) Set forth on Schedule 4.19(b) is a complete and accurate list of all
Debt of the Borrowers and their Subsidiaries the principal amount of each such
Debt which is greater than $100,000, which Debt shall remain outstanding after
giving effect to the Transaction (the "Surviving Debt"), showing as of the date
hereof the principal amount outstanding thereunder, the maturity date thereof
and the amortization schedule therefor.
SECTION 4.20 No Defaults, Compliance with Laws.
(a) Except as set forth on Schedule 4.20 hereto, no Loan Party is in
default under any agreement, ordinance, resolution, decree, bond, note,
indenture, order or judgment to which it is a party or by which it is bound, or
any other agreement or other instrument by which any of the properties or assets
owned by it or used in the conduct of its business is affected, which default
would be reasonably likely to have a Material Adverse Effect, except to the
extent that any such default in respect of an order or judgment is being
contested in good faith and by proper proceedings and adequate reserves and does
not otherwise constitute an Event of Default under this Agreement.
(b) Each Loan Party has complied and is in compliance in all respects with
all applicable laws, rules, ordinances, regulations, resolutions, orders, writs,
decrees and other similar documents and instruments of all courts and
governmental authorities, bureaus and agencies, domestic and foreign, including,
without limitation, any Regulatory Authority and all applicable provisions of
the Americans with Disabilities Act (42 U.S.C. ss. 12101-12213) and the
regulations issued thereunder and all applicable Environmental Laws,
non-compliance with which could reasonably be expected to have a Material
Adverse Effect.
SECTION 4.21 Owned Real Property.
Set forth on Schedule 4.21 is a complete and accurate list of all real
property owned by any Loan Party or any of its Subsidiaries or in which any Loan
Party has an interest as a contract vendee, showing as of the date hereof the
street address, county or other relevant jurisdiction, state, record owner and
book and estimated fair value thereof. Such Loan Party or such Subsidiary has
good, marketable and insurable fee simple title to such real property, free and
clear of all Liens, other than Permitted Real Property Encumbrances. Each
Mortgage creates, as security for the obligations purported to be secured
thereby, a valid and enforceable perfected security interest in and Lien on all
of the Mortgaged Property (and will create a valid and enforceable perfected
security interest in and Lien on all fixtures and improvements related to such
Mortgaged Property and affixed or added thereto on or after the Effective Date)
in favor of the Administrative Agent (or such other trustees that may be named
therein) for the benefit of the Secured Parties, superior to and prior to the
rights of all third Persons (except that the security interest created in the
Mortgaged Property may be subject to the Permitted Real Property Encumbrances
related thereto) and subject to no other Liens (other than Permitted Real
Property Encumbrances).
SECTION 4.22 Leased Real Property.
Set forth on Schedule 4.22 is a complete and accurate list of all leases of
real property under which any Loan Party or any of its Subsidiaries is the
lessee, showing as of the date hereof the street address, county or other
relevant jurisdiction, state, lessor, lessee, expiration date and annual rental
cost thereof. To the best knowledge of each Loan Party, each such lease is the
legal, valid and binding obligation of the lessor thereof, enforceable in
accordance with its terms, except (a) as such enforceability may be limited by
- 55 -
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally, and (b) to the extent
that such enforceability is subject to general principles of equity (regardless
of whether such enforcement is considered in a proceeding in equity or at law).
SECTION 4.23 Material Contracts.
Set forth on Schedule 4.23 is a complete and accurate list of all Material
Contracts of each Loan Party and its Subsidiaries. Except as could not
reasonably be expected to have a Material Adverse Effect, each such Material
Contract has been duly authorized, executed and delivered by each Loan Party and
its Subsidiaries, as the case may be, and any other parties thereto, has not
been amended or otherwise modified, is in full force and effect and is binding
upon and enforceable against each Loan Party and its Subsidiaries, as the case
may be, and any other parties thereto in accordance with its terms, except (a)
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally, and (b) to the extent that such enforceability is
subject to general principles of equity (regardless of whether such enforcement
is considered in a proceeding in equity or at law). There exists no material
default under any Material Contract by the Borrowers or any of their
Subsidiaries party thereto and, to the best knowledge of each Loan Party, there
exists no default under any Material Contract by any other party thereto.
SECTION 4.24 Investments.
Set forth on Schedule 4.24 is a complete and accurate list of all
Investments in excess of $250,000 held by any Loan Party or any of its
Subsidiaries, showing as of the date hereof the amount, obligor or issuer and
maturity, if any, thereof.
SECTION 4.25 Intellectual Property.
Set forth on Schedule 4.25 is a complete and accurate list of all patents,
trademarks, trade names, service marks and copyrights, and all applications
therefor and material licenses thereof, of each Loan Party or any of its
Subsidiaries, showing as of the date hereof the jurisdiction in which
registered, the registration number, the date of registration and the expiration
date. Each Loan Party and each of their respective Subsidiaries owns or has
rights to use all patents, trademarks, trade names, service marks, copyrights
and other intellectual property necessary to conduct its business as now or
heretofore conducted by it or proposed to be conducted by it. Each Loan Party
and each of their respective Subsidiaries conducts its business and affairs
without infringement of or interference with any patent, trademark, trade name,
service xxxx, copyright or other intellectual property of any other Person
except for infringements or interferences that would have an immaterial effect
on the Borrower and its Subsidiaries taken as a whole or on the rights and
remedies of the Lender Parties and the Administrative Agent. The Intellectual
Property Security Agreement, together with all filings and other actions
required to be taken in connection therewith, creates, as security for the
obligations purported to be secured thereby, a valid and enforceable perfected
security interest in and Lien on all of the Collateral purported to be covered
thereby in favor of the Administrative Agent for the benefit of the Secured
Parties, superior to and prior to the rights of all third Persons except for
Permitted Liens.
SECTION 4.26 Fees.
No broker's or finder's fees or commissions or any similar fees or
commissions will be payable by any Loan Party or any of its Subsidiaries with
respect to the incurrence and maintenance of the Obligations, any other
transaction contemplated by the Loan Documents or any services rendered in
connection with any such transactions. The Borrowers
- 56 -
hereby covenant and agree to indemnify the Administrative Agent and each Lender
Party against and hold the Administrative Agent and each Lender Party harmless
from any claim, demand or liability for broker's or finder's fees or similar
fees or commissions.
SECTION 4.27 Government Consents for Conduct of Business.
(a) Except as set forth on Schedule 4.4, each Loan Party has, and is in
good standing with respect to, all approvals, permits, licenses, consents,
authorizations, franchises, certificates, and inspections of all Regulatory
Agencies and are otherwise necessary for a Loan Party to continue to conduct
business and own, use, operate, and maintain its property and assets as
heretofore conducted, owned, used, operated, and maintained which, if not
obtained (whether directly or by lawful and effective assignment) or not
maintained in good standing, could reasonably be expected to have a Material
Adverse Effect. No such approval, permit, license, consent, authorization,
franchise, or certificate is conditioned or limited any more so than as is
generally the case with respect to Persons engaged in the same or similar lines
of business. Each such approval, permit, license, consent, authorization,
franchise, or certificate was duly and validly granted or issued, is in full
force and effect, and neither has been, nor, to the knowledge of any Loan Party,
has been threatened to be, amended, modified, suspended, rescinded, revoked,
forfeited, or assigned. Further, to its knowledge, no condition(s) exist(s) or
event(s) has (have) occurred that, with the giving of notice or lapse of time or
both, could result in the amendment, modification, suspension, rescission,
revocation, forfeiture, or non-renewal of any such approval, permit, license,
consent, authorization, franchise, or certificate.
ARTICLE 5
AFFIRMATIVE COVENANTS
While any of the Commitments is outstanding and, in the event any Advance
remains outstanding, so long as any Borrower or any other Loan Party is indebted
to any of the Lender Parties or the Administrative Agent under any of the Loan
Documents, any Letter of Credit is outstanding and until payment in full of the
Notes and full and complete performance of all of its other obligations arising
hereunder, each Borrower shall:
SECTION 5.1 Compliance with Law.
Comply, and cause each of its Subsidiaries to comply, in all material
respects, with all applicable laws, rules, regulations and orders, such
compliance to include, without limitation, compliance with ERISA; provided,
however, that the Borrowers and their Subsidiaries shall not be required to
comply with any such laws, rules, regulation and orders to the extent that its
obligation to do so is being contested in good faith and by proper proceedings
and adequate reserves are being maintained in connection with such
circumstances.
SECTION 5.2 Payment of Taxes, Etc.
Timely pay and discharge, and cause each of its Subsidiaries to timely pay
and discharge, (a) all taxes, assessments and governmental charges or levies
imposed upon it or upon its property and (b) all lawful claims that, if unpaid,
might by law become a Lien upon its property; provided, however, that the
Borrowers and their Subsidiaries shall not be required to pay or discharge any
such tax, assessment, charge or claim that is being contested in good faith and
by proper proceedings and as to which appropriate reserves are being
- 57 -
maintained, unless and until any Lien resulting therefrom attaches to its
property and becomes enforceable against the Borrowers or any of their
Subsidiaries.
SECTION 5.3 Compliance with Environmental Laws.
Comply, and cause each of its Subsidiaries and all lessees and other
Persons operating or occupying its properties to comply, in all material
respects, with all applicable Environmental Laws and Environmental Permits;
obtain and renew and cause each of its Subsidiaries to obtain and renew all
Environmental Permits reasonably necessary for its operations and properties;
and conduct, and cause each of its Subsidiaries to conduct, any investigation,
study, sampling and testing, and undertake any Removal, Remedial or other
Response action necessary to remove and clean up all Hazardous Materials from
any of its properties, in accordance with the requirements of all Environmental
Laws; provided, however, that the Borrowers and their Subsidiaries shall not be
required to comply with any such Environmental Law or Environmental Permit or
undertake any such cleanup, Removal, Remedial, Response or other action to the
extent that its obligation to do so is being contested in good faith and by
proper proceedings and adequate reserves as reasonably determined by the
Administrative Agent are being maintained with respect to such circumstances.
SECTION 5.4 Preparation of Environmental Reports.
The Borrowers agree that the Administrative Agent may, upon reasonable
prior notice, from time to time (but in any event no more frequently than once
every two years) in its reasonable discretion, retain, at the Borrowers'
expense, an independent professional consultant to prepare environmental site
assessment reports for the Borrowers or any of their Subsidiaries and/or to
review any report relating to Hazardous Materials prepared by or for the
Borrowers and, upon a reasonable belief that any Borrower or any of its
Subsidiaries has breached any covenant or representation with respect to
environmental matters or that there has been a material violation of
Environmental Laws by any Borrower or one of its Subsidiaries, the
Administrative Agent may conduct its own investigation of such matter at any
facility or property currently owned, leased, operated or used by any Borrower
or one of its Subsidiaries and the Borrowers agree to use commercially
reasonable efforts to obtain permission for the Administrative Agent's
professional consultant to conduct its own investigation of any such matter at
any facility or property previously owned, leased, operated or used by any
Borrower or one of its Subsidiaries. The Borrowers and their Subsidiaries hereby
grant to the Administrative Agent, its employees, consultants and contractors,
the right to enter into or onto the facilities or properties currently owned,
leased, operated or used by any Borrower or its Subsidiaries upon reasonable
notice to the Borrowers to perform such assessments on such property as are
reasonably necessary to conduct such a review and/or investigation. Any such
investigation of any such facility or property shall be conducted, unless
otherwise agreed to by the Borrowers and the Administrative Agent, during normal
business hours and, to the extent reasonably practicable, shall be conducted so
as not to interfere with the ongoing operations at any facility or property or
to cause any damage or loss to any facility or property. The Borrowers and the
Administrative Agent hereby acknowledge and agree that any report of any
investigation conducted at the request of the Administrative Agent will be
obtained and shall be used by the Administrative Agent and Lender Parties for
the purpose of internal credit decisions to monitor and police the Advances
and/or protect the Administrative Agent's and Lender Parties' security interests
in the Collateral. The Administrative Agent agrees to deliver a copy of any such
report to the Borrowers with the understanding that the Borrowers acknowledge
and agree that (i) the Borrowers will indemnify
- 58 -
and hold harmless the Administrative Agent and each Lender Party from any costs,
losses or liabilities relating to the Borrowers' use of or reliance on such
report and (ii) neither the Administrative Agent nor any Lender Party makes any
representation or warranty with respect to such report.
SECTION 5.5 Maintenance of Insurance.
(a) Maintain, and cause each of their Subsidiaries to maintain, insurance
with responsible and reputable insurance companies or associations in such
amounts and covering such risks as is usually carried by companies engaged in
similar businesses and owning similar properties in the same general areas in
which such Borrower or such Subsidiary operates including, without limitation,
the policies described on Schedule 5.5 (or other policies comparable thereto);
(b) file with the Administrative Agent upon its request a detailed list of the
insurance then in effect, stating the names of the insurance companies, the
amounts and rates of the insurance, the dates of the expiration thereof and the
properties and risks covered thereby; and (c) deliver to the Administrative
Agent, in form and substance reasonably satisfactory to the Administrative
Agent, endorsements to (A) all "all-risk" and casualty and (if any) business
interruption insurance naming the Administrative Agent, on behalf of itself and
the Lenders, as loss payee if permitted thereunder (or assignee, in the case of
business interruption insurance, if any) insuring in the case of "all-risk"
against loss or damage by fire, lightening, windstorm, explosion, hail, tornado,
and if to the extent in a flood hazard area, a flood insurance policy, and (B)
all general liability and other liability policies naming the Administrative
Agent, on behalf of itself and the Lenders, as additional insured if permitted
thereunder, and providing, in any event, that such insurance policies shall not
be canceled without thirty (30) days' prior written notice thereof by the
respective insurer to the Administrative Agent and shall contain standard
non-contributory mortgagee clause endorsement in favor of the Administrative
Agent with respect to hazard insurance coverage.
SECTION 5.6 Preservation of Corporate Existence, Etc.
Except as otherwise expressly permitted in the Loan Documents preserve and
maintain, and cause each of its Subsidiaries to preserve and maintain, its
existence, legal structure, legal name, and to the extent necessary for it to
conduct its business, rights (charter and statutory) permits, licenses,
approvals, privileges and franchises, provided, that, MediaBay shall be required
to dissolve or to merge each Inactive Subsidiary into MediaBay or another Loan
Party, with MediaBay or such other Loan Party being the surviving corporation,
within thirty (30) days after the Effective Date (or sixty (60) days after the
Effective Date with respect to any corporation organized under the laws of the
state of New York).
SECTION 5.7 Rights.
(a) At any reasonable time and from time to time during normal business
hours, upon reasonable notice, permit the Administrative Agent, or, after the
occurrence of a Default, the Lender Parties, or any agents or representatives
thereof, to examine and make copies of and abstracts from the records and books
of account of and visit the properties of the Borrowers and their Subsidiaries,
and to discuss the affairs, finances and accounts of the Borrowers and any such
Subsidiaries with any of their officers or directors.
(b) Permit the Administrative Agent and the Lender Parties to conduct at
Borrowers' expense such commercial finance examinations, appraisals and/or
Collateral audits of the
- 59 -
Borrowers and their Subsidiaries during each calendar year as the Administrative
Agent may reasonably request during normal business hours and so as not to
interfere with the ongoing operations of the Borrower and its Subsidiaries.
SECTION 5.8 Keeping of Books.
Keep, and cause each of its Subsidiaries to keep, proper books of record
and account, in which full and correct entries shall be made of all financial
transactions and the assets and business of the Borrowers and each Subsidiary in
accordance with GAAP.
SECTION 5.9 Maintenance of Properties, Etc.
Maintain and preserve, and cause each of its Subsidiaries to maintain and
preserve, all of its properties that are reasonably necessary in the conduct of
its business in good working order and condition, ordinary wear and tear
excepted and except for insured casualty losses on such properties.
SECTION 5.10 Compliance with Terms of Leaseholds. Make all payments and
otherwise perform all obligations in respect of all leases of real property to
which the Borrowers or any of their Subsidiaries is a party, keep such leases in
full force and effect and not allow such leases to lapse or be terminated or any
rights to renew such leases to be forfeited or canceled, notify the
Administrative Agent of any default by any party with respect to such leases and
cooperate with the Administrative Agent in all respects to cure any such
default, and cause each of its Subsidiaries to do so except, in any case, where
the failure to do so, either individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
SECTION 5.11 Performance of Material Contracts.
Perform and observe, and cause each of its Subsidiaries to perform and
observe, all of the material terms and provisions of each Material Contract to
be performed or observed by it, maintain, and cause each of its Subsidiaries to
maintain, each such Material Contract in full force and effect, and enforce, and
cause each of its Subsidiaries to enforce, each such Material Contract in
accordance with its terms, except where the failure to do so would not be
reasonably likely to have a Material Adverse Effect and except where its failure
to do so is being contested in good faith and by proper proceedings.
SECTION 5.12 Transactions with Affiliates.
Notwithstanding anything in this Agreement to the contrary, except as set
forth in Schedule 5.12 hereto, conduct, and cause each of its Subsidiaries to
conduct, all transactions otherwise permitted under the Loan Documents with any
of their Affiliates on terms that are fair and reasonable and no less favorable
to the Borrowers or such Subsidiary than it would obtain in a comparable
arms-length transaction with a Person not an Affiliate; provided, however, that
this Section 5.12 shall not be deemed to prohibit any intercompany transactions
solely between such Borrower and its Wholly-Owned Subsidiaries carried out in
the ordinary course of business, subject, however, to any applicable provisions
of Article 6, and shall not be deemed to prohibit the transactions contemplated
by the Senior Subordinated Debt Documents as in effect on the date hereof,
including the Warrants (as defined therein).
SECTION 5.13 Agreement to Grant Additional Security.
(a) Promptly, and in any event within thirty (30) days after the
acquisition of assets of the type that would have constituted Collateral at the
date hereof and investments of the type that
- 60 -
would have constituted Collateral on the date hereof (other than assets with a
fair market value of less than $50,000), including the capital stock of any
direct or indirect Subsidiary of each Borrower, notify the Administrative Agent
of the acquisition of such assets or investments and, to the extent not already
Collateral in which the Administrative Agent has a perfected security interest
pursuant to the Collateral Documents, such assets and investments will become
additional Collateral hereunder to the extent the Administrative Agent deems the
pledge of such assets practicable (the "Additional Collateral"), and the
Borrower will, and will cause each of its direct and indirect Subsidiaries to,
take all necessary action, including the filing of appropriate financing
statements under the provisions of the UCC, applicable foreign, domestic or
local laws, rules or regulations in each of the offices where such filing is
necessary or appropriate to grant Administrative Agent a perfected Lien in such
Collateral (or comparable interest under foreign law in the case of foreign
Collateral) pursuant to and to the full extent required by the Collateral
Documents and this Agreement.
(b) Promptly, and in any event no later than thirty (30) days after a
request with respect thereto, cause each of such Borrower's direct and indirect
Subsidiaries (except such as the Administrative Agent shall exempt) to become
party to, or to execute and deliver, a Subsidiary Guaranty, guarantying to the
Administrative Agent and the Lenders the prompt payment, when and as due, of all
Obligations of the Loan Parties under the Loan Documents, including all
obligations under any hedging agreements.
(c) Promptly, and in any event no later than thirty (30) days after a
request with respect thereto, cause each Guarantor created or established after
the date hereof to grant to the Administrative Agent, for the ratable benefit of
the Lenders, a first priority Lien on all property (tangible and intangible) of
such Guarantor, including, without limitation, all of the capital stock of any
of its Domestic Subsidiaries and 65% of the stock of any of its Foreign
Subsidiaries, upon terms similar to those set forth in the Collateral Documents
and otherwise satisfactory in form and substance to the Administrative Agent.
The Borrowers shall cause each Guarantor, at its own expense, to become a party
to a Security Agreement, an Intellectual Property Security Agreement, a Mortgage
and any other Collateral Document and to execute, acknowledge and deliver, or
cause the execution, acknowledgment and delivery of, and thereafter register,
file or record in any appropriate governmental office, any document or
instrument reasonably deemed by Administrative Agent to be necessary or
desirable for the creation and perfection of the foregoing Liens (including
legal opinion, title insurance, consents, corporate documents and any additional
or substitute security agreements or mortgages or deeds of trust). The Borrowers
will cause each such Guarantor to take all actions requested by Administrative
Agent (including, without limitation, the filing of UCC-1's) in connection with
the granting of such security interests.
(d) Promptly, and in any event not later than thirty (30) days after a
request with respect thereto, (i) deliver to the Administrative Agent the
original of all instruments, documents and chattel paper, and all other
Collateral of which the Administrative Agent determines it should have physical
possession in order to perfect its security interest therein, duly pledged,
endorsed or assigned to the Administrative Agent without restriction; (ii)
obtain landlord waivers, in form and substance reasonably satisfactory to the
Administrative Agent, with respect to any Inventory or other tangible Collateral
located at a location that is not owned by such Borrower or a Subsidiary; (iii)
deliver to the Administrative Agent warehouse receipts covering
- 61 -
any portion of the Inventory or other Collateral located in warehouses and for
which warehouse receipts are issued; (iv) when an Event of Default exists,
transfer Inventory to locations designated by the Administrative Agent; (v) if
any Collateral is at any time in the possession or control of any warehousemen,
bailee or any Borrower's agents or processors, notify the Administrative Agent
thereof and notify such person of the Administrative Agent's security interest
in such Collateral and obtain a bailee letter, in form and substance reasonably
satisfactory to the Administrative Agent, from such person and instruct such
person to hold all such Collateral for the Administrative Agent's account
subject to the Administrative Agent's instructions; (vi) if at any time any
Inventory or other Collateral is located on any real property of any Borrower
which is subject to a mortgage or other Lien, obtain a mortgagee waiver, in form
and substance reasonably satisfactory to the Administrative Agent, from the
holder of each mortgage or other Lien on such real property; and (vii) take all
such other actions and obtain all such other agreements as the Administrative
Agent may reasonably deem necessary or desirable in respect of any Collateral.
(e) The security interests required to be granted pursuant to this Section
shall be granted pursuant to the Collateral Documents or, in the Administrative
Agent's discretion, such other security documentation (which shall be
substantially similar to the Collateral Documents already executed and delivered
by the Borrowers and the Guarantors) as is reasonably satisfactory in form and
substance to Administrative Agent (the "Additional Collateral Documents") and
shall constitute valid and enforceable perfected security interests prior to the
rights of all third Persons and subject to no other Liens except Liens permitted
under Section 6.1. The Additional Collateral Documents and other instruments
related thereto shall be duly recorded or filed in such manner and in such
places and at such times as are required by law to establish, perfect, preserve
and protect the Liens, in favor of Administrative Agent, for the benefit of the
Lender Parties, granted pursuant to the Additional Collateral Documents and, all
taxes, fees and other charges payable in connection therewith shall be paid in
full by the Borrowers. At the time of the execution and delivery of Additional
Collateral Documents, the Borrowers shall cause to be delivered to
Administrative Agent such agreements, opinions of counsel, and other related
documents as may be reasonably requested by the Administrative Agent or the
Required Lenders to assure themselves that this Section has been complied with.
SECTION 5.14 Borrower's Account. Within thirty (30) days after the
Effective Date Borrowers' Account will have been relocated to Administrative
Agent or its affiliate or Borrowers will have entered into a tri-party blocked
account agreement, in form and substance satisfactory to Administrative Agent,
with Administrative Agent and Fleet National Bank.
ARTICLE 6
NEGATIVE COVENANTS
While any of the Commitments is outstanding and, in the event any Advance
remains outstanding, so long as any Borrower or any other Loan Party is indebted
to any of the Lender Parties or the Administrative Agent under any of the Loan
Documents, any Letter of Credit is outstanding and until payment in full of the
Notes and full and complete performance of all of its other obligations arising
hereunder, each Borrower covenants that it will not, at any time, and
- 62 -
will not permit any Loan Party to do, agree to do or permit to be done, any of
the following without the prior written consent of the Required Lenders:
SECTION 6.1 Liens, Etc. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist, any Lien on
or with respect to any of its properties of any character (including, without
limitation, accounts receivable, Inventory and other Collateral) whether now
owned or hereafter acquired, or sign or file or suffer to exist, or permit any
of its Subsidiaries to sign or file or suffer to exist, under the Uniform
Commercial Code or any other statute of any jurisdiction, a financing statement
that names any Borrower or any of their Subsidiaries as debtor, or sign or
suffer to exist, or permit any of its Subsidiaries to sign or suffer to exist,
any security agreement authorizing any secured party thereunder to file any such
financing statement, or assign, or permit any of its Subsidiaries to assign, any
accounts or other right to receive income, excluding, however, from the
operation of the foregoing restrictions the following:
(a) Liens created under the Loan Documents;
(b) Permitted Liens;
(c) Liens existing on the date hereof and described on Schedule
6.1(c);
(d) Purchase money Liens securing Debt permitted under Section
6.2(c)(i) upon real property or Equipment acquired or held by any Borrower
or any of its Subsidiaries in the ordinary course of business to secure the
purchase price of such real property or Equipment or to secure Debt
incurred solely for the purpose of financing the acquisition, construction
or improvement of any such real property or Equipment to be subject to such
Liens, or Liens existing on any such real property or Equipment at the time
of acquisition (other than any such Liens created in contemplation of such
acquisition that do not secure the purchase price), or extensions, renewals
or replacements of any of the foregoing for the same or a lesser amount;
provided, however, that no such Lien shall extend to or cover any property
other than the real property or Equipment being acquired, constructed or
improved, and no such extension, renewal or replacement shall extend to or
cover any property not theretofore subject to the Lien being extended,
renewed or replaced;
(e) Liens arising in connection with Capitalized Leases permitted
under Section 6.2(c)(i) or true operating leases; provided, that no such
Lien shall extend to or cover any Collateral or any assets other than the
assets subject to such Capitalized Leases or operating leases, as the case
may be;
(f) (i) Liens created under the Xxxxx Xxxxxxx Subordinated Security
Agreement; and
(ii) Liens on the same assets as described under clause (f)(i)
granted to secure the Senior Subordinated Debt but only on terms and
conditions satisfactory to the Administrative Agent as acknowledged in
writing; provided that said Liens shall in any event be co-terminous
with the Liens referred to in clause (f)(i) above and the holder of
such Liens shall have no rights to vote as a secured creditor in any
proceeding of the type described in Section 9.6.
- 63 -
(g) The replacement, extension or renewal of any Lien permitted
by clauses (a) through (f) above upon or in the same property
theretofore subject thereto in connection with the replacement,
extension or renewal (without increase in the amount or any change in
any direct or contingent obligor) of the Debt secured thereby.
SECTION 6.2 Debt.
Create, incur, assume or suffer to exist, or permit any of its Subsidiaries
to create, incur, assume or suffer to exist, any Debt other than:
(a) In the case of the Borrowers, Debt incurred pursuant to the Loan
Documents;
(b) In the case of MediaBay, debt owed to any Wholly-Owned Subsidiary
of MediaBay, and in the case of any of the Subsidiaries of MediaBay
(including Xxxxx Xxxxxxx and Audio Book Club), Debt owed to MediaBay or to
a Wholly-Owned Subsidiary of MediaBay; provided, that all such Debt owed by
any Subsidiary to MediaBay shall be evidenced by a promissory note, such
promissory note shall be pledged to the Administrative Agent pursuant to
the terms of the Security Agreement or such other document (including,
without limitation, the Note Assignment Agreement) and, in the case of Debt
owed by any Subsidiary, there shall be no restrictions whatsoever on the
ability of such Subsidiary to repay such Debt; and
(c) In the case of the Borrowers and any of their Subsidiaries:
(i) Debt (A) secured by Liens permitted by Section 6.1(d) and (B)
Capitalized Leases, collectively not to exceed in the aggregate
$500,000 at any time outstanding;
(ii) endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business;
(iii) the Surviving Debt;
(iv) Senior Subordinated Debt, provided that (A) principal and
interest shall be payable or paid by MediaBay only in accordance with
the terms and conditions of the applicable Subordinated Debt Documents
and subject to Section 6.19 hereof and (B) the Borrower may, as
required by the Senior Subordinated Debt Documents, cause its existing
Subsidiaries and any Subsidiaries of the Company hereafter formed
and/or acquired by the Company (or any Subsidiary of the Company) to
issue guaranties of MediaBay Obligations under the Senior Subordinated
Debt, which guaranties shall be substantially similar to the
Subsidiary Guaranty issued pursuant to this Agreement, except that
such guaranties will be subordinated to the Obligations of such
Subsidiaries under the Subsidiary Guaranty or Guaranties issued or to
be issued under this Agreement consistent with the subordination
provisions set forth in the Convertible Senior Subordinated Note
included in the Senior Subordinated Debt, will guaranty the
Obligations of MediaBay under such Note and otherwise be in form and
substance reasonably satisfactory to the Administrative Agent and the
holder of such Note;
(v) Subordinated Debt, notwithstanding any other provision of
this Section 6.2.
(vi) any Debt extending the maturity of, or refunding or
refinancing, in whole or in part, the Debt referred to in this Section
6.2(c), provided that (A) the principal amount of
- 64 -
such Debt shall not be increased above the principal amount thereof
outstanding immediately prior to the refinancing and the direct and
contingent obligors shall not be changed, as a result of or in
connection with such extension, refunding or refinancing, except that
any Subsidiary of the Company in existence at, or formed or acquired
by the Company (or any Subsidiary of the Company) subsequent to, the
date of any of such extension of the maturity of, or refunding or
refinancing, in whole or in part, of the Senior Subordinated Debt,
shall be permitted to guarantee such Debt as so extended, refunded or
refinanced, to the same extent as such Subsidiaries are permitted to
guarantee such Debt pursuant to Section 6.2(c)(iv) hereof, and no
prepayment premium or penalty of any kind shall be incurred in
connection therewith, and the terms thereof are no less favorable to
any Borrower or the Lender Parties or the Administrative Agent (except
as and to the extent set forth in respect of Senior Subordinated Debt
under clause (vi)(B) below) than the terms of the refunded or
refinanced Debt and the fees, expenses and other costs associated
therewith are reasonably acceptable to the Administrative Agent in the
exercise of its reasonable discretion; (B) no amendment, modification
or supplement to the terms of any Debt or any refinanced or refunded
Debt shall be made except if and to the extent permitted under Section
6.13, but amendments and modifications to any replacement for the
Senior Subordinated Debt which are not inconsistent with the terms of
Section 6.13(b) shall be deemed acceptable to the Lenders and the
Administrative Agent; and (C) with respect to the first refinancing of
the Senior Subordinated Debt that exists on the Effective Date, the
principal amount of the replacement Debt shall at least equal the sum
of (i) the principal amount then outstanding of such Senior
Subordinated Debt which is refinanced and (ii) the fees, expenses and
other costs payable by MediaBay or its Subsidiaries in connection with
such refinancing;
(vii) the Huntingdon Financing Debt, provided that principal and
interest shall be payable or paid by MediaBay only in accordance with
the terms and conditions of the applicable Subordinated Debt Documents
and subject to Section 6.20 hereof;
(viii) the Huntingdon Secured Subordinated Loan, provided that
principal and interest shall be payable or paid by MediaBay only in
accordance with the terms and conditions of the applicable
Subordinated Debt Documents and subject to Section 6.19 hereof; and
(ix) up to $500,000 in additional senior secured indebtedness
provided by Huntingdon or Xxxxxx Xxxxxxx, his family or affiliates on
the same terms and conditions applicable to the Huntingdon Financing
Debt provided that the holders of such senior secured indebtedness
execute an intercreditor agreement in form and substance satisfactory
to the Lenders and provided further that principal and interest shall
be payable or paid by MediaBay only in accordance with the terms and
conditions of the applicable Subordinated Debt Documents and subject
to Section 6.20 hereof.
SECTION 6.3 Accounts Payable.
No accounts payable of any Borrower or any of its Subsidiaries arising from
the purchase of property or services, including, without limitation, Inventory
acquired for resale shall be outstanding for longer than 180 days from the date
of incurrence, except (a) accounts for which the vendor has entered into an
agreement with the applicable Loan Party to extend the payment date thereof or
(b) accounts payable that are subject to good faith dispute by the Borrower.
- 65 -
SECTION 6.4 Fundamental Changes.
(a) Merge into or consolidate with any Person or permit any Person to merge
into it, or permit any of its Subsidiaries to do so, except that so long as no
Default or Event of Default shall have occurred and be continuing and so long as
no Default or Event of Default would result therefrom, (A) Wholly-Owned
Subsidiaries of any Borrower may make Permitted Acquisitions; (B) any Subsidiary
of any Borrower may consolidate with or merge into any Borrower or any
Wholly-Owned Subsidiary of any Borrower if such Borrower or such Wholly-Owned
Subsidiary will be the surviving corporation; (C) any Subsidiary may sell,
lease, transfer, contribute or otherwise dispose of its assets, in whole or in
part, to any Borrower or any other Wholly-Owned Subsidiary of any Borrower, and
may, following any such disposition in whole, liquidate and dissolve and such
Borrower may transfer, contribute or otherwise dispose of its assets in whole or
in part to any Wholly-Owned Subsidiary of any Borrower; (D) MediaBay may on a
single occasion transfer any or all of its accounts receivable to its
Wholly-Owned Subsidiary, ABC Investment Corp., and such Subsidiary may transfer
any or all of its accounts receivable to MediaBay (in each case subject to the
continuing existence of the Administrative Agent's perfected security interest
therein) and (E) a merger of any Borrower with and into a newly-formed Delaware
Wholly-Owned Subsidiary of such Borrower for the sole purpose of effecting a
reincorporation of such Borrower in Delaware, provided that the Borrowers shall
have given the Administrative Agent not less than ten (10) Business Days prior
written notice and prior to effecting such Merger Borrowers shall take all
actions, if any, reasonably required by the Administrative Agent to preserve the
Administrative Agent's security interest in the Collateral and all other rights
and remedies of the Lenders and the Administrative Agent under the Loan
Documents or otherwise then existing by law;
(b) Except as otherwise expressly permitted herein, liquidate, wind-up or
dissolve itself (or suffer any liquidation or dissolution), convey, sell,
assign, lease, transfer or otherwise dispose of (or agree to do any of the
foregoing at any future time) all or substantially all of its property, business
or assets, or permit any of its Subsidiaries to do any of the foregoing;
(c) Except as otherwise expressly permitted herein, acquire or permit any
Subsidiary to acquire all or substantially all of the assets or any capital
stock of any other Person, except that (A) Wholly-Owned Subsidiaries of any
Borrower may consummate Permitted Acquisitions and (B) any Borrower or any
Wholly-Owned Subsidiary of any Borrower may acquire any asset permitted to be
sold, leased, transferred, contributed or otherwise disposed of by any Borrower
or any of its Subsidiaries pursuant to Section 6.4(a)(C).
SECTION 6.5 Sales, Etc. of Assets.
Except as otherwise expressly set forth in Section 6.4 with respect to
transfers or other dispositions between any Borrower and any of its Subsidiaries
or between or among such Subsidiaries, sell, lease, transfer or otherwise
dispose of, or permit any of its Subsidiaries to sell, lease, transfer or
otherwise dispose of, any assets or grant any option or other right to purchase,
lease or otherwise acquire any assets, except:
(a) Sales of Inventory in the ordinary course of business;
(b) Sales of obsolete or surplus Equipment or Equipment which is no
longer useful in the ordinary course of business;
(c) Sell or liquidate Cash Equivalents in the ordinary course of
business;
- 66 -
(d) Transactions in the ordinary course of business including, without
limitation, relating to rental, lease or licensing of customer lists and
programs and similar rights to third party users in which revenues are
shared by any Borrower (or one of its Subsidiaries), provided that in
respect of each of the foregoing, no rights in any assets of the Borrower
or any of its Subsidiaries shall be granted to any person that would limit
such Borrower's rights in such assets in any materially adverse way or the
Administrative Agent's rights with respect thereto in any materially
adverse way or that would diminish the value of the assets to such Borrower
or its Subsidiaries or its value as collateral to the Administrative Agent
in any materially adverse way.
SECTION 6.6 Investments in Other Persons.
Make or hold, or permit any of its Subsidiaries to make or hold, any
Investment utilizing cash (or if not utilizing cash, then subject to the terms
of Section 6.6(i)) in any Person other than:
(a) Investments by any Borrower and its Subsidiaries in their
Subsidiaries outstanding on the date hereof and described on Schedule
6.6(a);
(b) Loans and advances to officers and other employees in the ordinary
course of business of the Borrowers and their Subsidiaries, outstanding as
July 31, 2000, in an aggregate principal amount not to exceed $250,000, for
all Borrowers taken as a whole, provided, that, any amount repaid on such
loans or advances may not be relent or readvanced;
(c) Investments by any Borrower and its Subsidiaries in Cash
Equivalents;
(d) Investments consisting of intercompany Debt permitted under
Section 6.2(b);
(e) Investments by any Borrower and its Subsidiaries in deposit
accounts opened in the ordinary course of business and located at or
assigned to the Administrative Agent;
(f) Investments consisting of accounts receivable in the ordinary
course of business;
(g) Investments received in the ordinary course of business in
connection with the settlement of debts, including receivables, owed to any
Borrower or its Subsidiaries, which debts shall not exceed $1,000 in any
single instance and $20,000 in the aggregate; and
(h) Investments utilizing Equity Interests issued by any Borrower and
not utilizing cash or other assets of any Loan Party, but only on the
following terms and conditions:
(i) no such Investment would, before or after giving effect
thereto, conflict with or be inconsistent with any of the other
provisions of this Agreement (including, without limitation,
provisions relating to Permitted Acquisitions) or cause a Default or
Event of Default; and
(ii) no such Investment would result in any liability or
obligation being incurred at any time by any Borrower or any of its
Subsidiaries, except as otherwise expressly permitted by this
Agreement.
SECTION 6.7 Dividends, Etc.
Subject to Section 6.17, declare or pay any dividends, purchase, redeem,
retire, defease or otherwise acquire for value any of its capital stock or any
- 67 -
warrants, rights or options to acquire such capital stock, now or hereafter
outstanding, return any capital to its stockholders as such, make any
distribution of assets, capital stock, warrants, rights, options, obligations or
securities to its stockholders as such, or permit any of its Subsidiaries to do
any of the foregoing or permit any of its Subsidiaries to purchase, redeem,
retire, defease or otherwise acquire for value any capital stock of any Borrower
or any warrants, rights or options to acquire such capital stock or to issue or
sell any such capital stock or any warrants, rights or options to acquire such
capital stock, except:
(a) The Borrowers may declare and pay dividends and make distributions
payable solely in Equity Interests of such Borrower, including common
stock, warrants, options and rights to purchase common stock, but only on
the condition that no such instrument or security by its terms shall
mandate or require such Borrower to, and no holder thereof shall have the
right to require such Borrower to, declare or pay any dividends or
distributions in respect thereof or purchase, redeem, retire, defease or
otherwise acquire for value any of its capital stock, warrants, options or
rights to acquire such capital stock;
(b) A Subsidiary of any Borrower may declare and pay dividends and
distributions to such Borrower or to another Subsidiary that is a
Wholly-Owned Subsidiary of such Borrower;
(c) The Borrowers may satisfy the Acquisition Puts, provided that
satisfaction of the Acquisition Puts shall be subject to the conditions
that no Default or Event of Default then exists or would exist after giving
effect to the satisfaction of any such Acquisition Puts, and the
Administrative Agent shall have received a Compliance Certificate duly
executed by each of the Borrowers evidencing the Borrowers' compliance with
the covenants set forth in Article 8 before and after giving effect to the
satisfaction of any Acquisition Put;
(d) For issuances of stock expressly permitted by Section 6.18 and
issuances of warrants to any Lender Party and for repurchases, required for
regulatory compliance, of warrants held by financial institutions; and
(e) For issuances of stock expressly permitted by and pursuant to the
terms set forth in Section 6.17(e).
SECTION 6.8 Change in Nature of Business.
Make, or permit any of its Subsidiaries to make, any material change in the
nature of its business as carried on at the date hereof except as expressly
permitted hereby.
SECTION 6.9 Charter Amendments.
Amend, or permit any of its Subsidiaries to amend, its certificate or
articles of incorporation or bylaws if such amendment could impair the interests
or rights of the Administrative Agent or any Lender Party.
SECTION 6.10 Accounting Changes.
Make or permit, or permit any of its Subsidiaries to make or permit, any
change in accounting policies or reporting practices except as described in
clauses (a), (b), (c) and (d) of the definition of Accounting Changes in Section
1.3.
SECTION 6.11 Prepayments, Etc. of Debt.
(a) Prepay, redeem, purchase, defease or otherwise satisfy prior to the
scheduled maturity thereof in any manner, or make any payment in violation of
any subordination terms of, any Debt, other than prepayment of the Advances in
- 68 -
accordance with the terms of this Agreement; (b) amend, modify or change in any
manner any term or condition of any Existing Debt or Surviving Debt, except to
the extent that such benefit inures to the benefit of the Borrowers and could
not be adverse to the interests or rights of the Lender Parties or the
Administrative Agent, or (c) permit any of its Subsidiaries to do any of the
foregoing other than to repay any Debt payable to the Borrowers.
SECTION 6.12 Amendment, Etc. of Material Contracts, Including Debt.
(a) Cancel or terminate any Material Contract or consent to or accept any
cancellation or termination thereof, amend or otherwise modify any Material
Contract or give any consent, waiver or approval thereunder, waive any default
under or breach of any Material Contract or take any other action in connection
with any Material Contract that would materially impair the value of the
interests or rights of such Borrower thereunder or that could impair the
interests or rights of the Administrative Agent or any Lender Party (except in
an immaterial way and not in any event from and after the occurrence of any
Default or Event of Default hereunder) , or permit any of their Subsidiaries to
do any of the foregoing; provided however, that the Borrowers or their
Subsidiaries may take any such actions if individually or in the aggregate such
actions could not reasonably be expected to have a Material Adverse Effect; or
(b) Modify, amend or supplement:
(i) any documentation entered into in connection with any Subordinated
Debt or the Huntingdon Financing Debt (excluding for purposes of this
clause (i) the Senior Subordinated Debt Documents), except as approved by
the Administrative Agent in its sole discretion; or
(ii) the Senior Subordinated Debt Documents if the effect of such
amendment, supplement or modification is to: (A) increase the interest rate
on the Senior Subordinated Debt in excess of eleven (11%) per annum
(provided that nothing contained herein shall preclude imposition of any
default rate of interest in the amount provided in the Senior Subordinated
Debt Documents), (B) accelerate or shorten the dates upon which payments of
principal or interest are due on the Senior Subordinated Debt; (C) change
the redemption or prepayment provisions of the Senior Subordinated Debt
(other than any such change which would reduce the amount of any scheduled
redemption or prepayment or of any premium or interest payable in
connection therewith or that would defer the date on which any such
redemption or prepayment is otherwise scheduled to be made); (D) make more
restrictive any of the covenants contained in the Senior Subordinated Debt
Documents, or add any events of default, or modify any events of default so
as to be triggered sooner in each case in comparison with any such
covenants or events of default contained in the Senior Subordinated Debt
Documents as in effect prior to such proposed amendment, except for changes
that individually and in the aggregate are immaterial and provided that
modifications to the terms of replacement Senior Subordinated Debt
refinancing the Senior Subordinated Debt existing on the Effective Date in
regard to certain types of covenants that are customary for subordinated
debt transactions of similar type and amount (such as financial covenants
identical to those contained herein but looser to such reasonable extent as
the Required Lenders may agree) that do not adversely affect the rights of
the Lenders or the Administrative Agent in any way other than immaterial
ways shall be deemed acceptable to the Lenders and the Administrative Agent
so long as copies of all documents relating to such replacement Senior
Subordinated Debt shall have been received by
- 69 -
the Administrative Agent in sufficient time for review to confirm
compliance with the foregoing, with the delivery of such confirmation not
to be unreasonably withheld and the determination of approval or objection
not to be unreasonably delayed; (E) change any provisions of Article 3 (or
comparable provisions) of the Senior Subordinated Debt Documents or modify
any of the defined terms used in such Article 3 (or comparable provisions)
or (F) provide for any additional security in respect of the obligations
under the Senior Subordinated Debt Documents, in each case, without the
prior written consent of the Required Lenders or
(c) Modify, amend, supplement or terminate any agreements, instruments or
documents relating to the incurrence (if consented to by the Administrative
Agent except to the extent such consent is not required under Section 6.2(c)(vi)
of this Agreement) of any Debt or other obligations, contingent or otherwise, of
any Borrower or any Subsidiary permitted under Section 6.2(c)(vi) owing under
any Permitted Acquisition documents or arising in connection with any Permitted
Acquisition other than modifications, amendments and/or supplements which are
immaterial and other than refinancing, in accordance with the provisions of
Section 6.2(c)(viii), of up to $500,000 in principal amount of indebtedness
permitted to be incurred in connection with Permitted Acquisitions in accordance
with the terms of Section 6.2(c)(vi).
SECTION 6.13 Negative Pledge.
Enter into or suffer to exist, or permit any of the Subsidiaries of any
Borrower to enter into or suffer to exist, any agreement prohibiting or
conditioning the creation or assumption of any Lien upon any of its properties
or assets, other than as provided in the Loan Documents.
SECTION 6.14 Partnerships, New Subsidiaries.
(a) Become a general partner in any general or limited partnership or joint
venture or permit any of its Subsidiaries to do so, or
(b) Create any new Subsidiary, unless such newly created Subsidiary shall
become a Guarantor pursuant to the terms of the Subsidiary Guaranty and an
additional grantor pursuant to the terms of the Security Agreement and
Intellectual Property Security Agreement and all shares of the capital stock of
such Subsidiary are pledged to the Administrative Agent pursuant to the Security
Agreement.
SECTION 6.15 Speculative Transactions.
Engage, or permit any of its Subsidiaries to engage, in any transaction
involving commodity options or futures contracts or derivatives or any similar
speculative transactions.
SECTION 6.16 Capital Expenditures.
Make, or permit any of its Subsidiaries to make, any Capital Expenditures
that would cause the aggregate of all such Capital Expenditures made by the
Borrowers and their Subsidiaries to exceed $300,000, in the aggregate for all
Borrowers taken as a whole, in any Fiscal Year of the Borrowers.
SECTION 6.17 Issuance of Stock.
Except as otherwise expressly permitted under Sections 6.4, 6.6 and 6.7
hereof, the Borrowers will not, and will not permit any of their Subsidiaries
to, directly or indirectly, issue, sell, assign, pledge or otherwise encumber or
dispose
- 70 -
of any shares of capital stock or other Equity Interests of the Borrowers or any
Subsidiary of the Borrowers, except (a) to the Borrowers or a Subsidiary of any
Borrower, (b) to qualify directors if required by applicable law, (c) as set
forth in Schedule 6.17; (d) in respect of Acquisition Puts in accordance with
the summary of terms of the Acquisition Puts set forth on Schedule 6.17; (e)
issuances of Equity Interests of MediaBay in replacement for the Senior
Subordinated Debt, the Huntingdon Financing Debt and/or the Huntington Secured
Subordinated Debt, in whole or in part, in existence on the date of this
Agreement; provided, that, such Equity Interests (i) shall be in an amount at
least equal to the sum of the principal amount then outstanding of such Senior
Subordinated Debt which is replaced plus the fees, expenses and other costs
payable by the Borrowers or their Subsidiaries in connection with such
replacement and (ii) do not mandate or require the Borrower to, and no holder
thereof shall have the right to require any Borrower to declare or pay any cash
dividends or cash distributions in respect thereof or purchase, redeem, retire,
defease or otherwise acquire for cash any such Equity Interests, except for
payments of cash dividends in respect of such Equity Interests on substantially
the same economic terms and having substantially the same economic effect as the
payments of interest on the Senior Subordinated Debt, Huntingdon Financing Debt
or Huntingdon Secured Subordinated Debt, as applicable, in effect on the
Effective Date and having a cash dividend not in excess of the rate of interest
and payable on dates comparable to (or less frequently than) the payment dates
set forth in the Senior Subordinated Debt, Huntingdon Financing Debt or
Huntingdon Secured Subordinated Debt, as applicable, in effect on the Effective
Date (provided, that, with respect to any Equity Interests issued upon
conversion of any Senior Subordinated Debt, Huntingdon Financing Debt or
Huntingdon Secured Subordinated Debt held by Xxxxxx Xxxxxxx, his family or
affiliates, dividends shall accrue, be paid-in-kind or be paid in shares of
common stock until the obligations under the Credit Agreement have been paid in
full) and subject to blockage of such payments upon substantially the same terms
as apply to such payments of interest, and (iii) do not contain any rights,
whether or not on conversion or otherwise, that, if exercisable or exercised on
the date of issuance could result in a Change of Control, or if exercisable or
exercised at any time thereafter could reasonably be expected to result in a
Change of Control, and provided that the amount and terms of any fees and
expenses and other costs associated therewith are reasonably acceptable to the
Administrative Agent; and (f) issuances of Equity Interests of any Borrower not
otherwise covered by clauses (a) through (e) above but only on the condition
that no such instrument or security by its terms shall mandate or require any
Borrower to, and no holder thereof shall have the right to require the Borrower
to, (i) declare or pay any cash dividends or cash distributions in respect
thereof or (ii) purchase, redeem, retire, defease or otherwise acquire for cash
any of its capital stock, warrants, options or rights to acquire such capital
stock or (iii) issue securities in respect thereof which payments of or in
respect of which are not subordinate to the Obligations under the Loan
Documents; and, provided, further that no such Equity Interests shall contain
any rights, whether or not on conversion or otherwise that, if exercisable or
exercised on the date of issuance could result in a Change of Control, or if
exercisable or exercised at any time thereafter could reasonably be expected to
result in a Change of Control, and any references in this Agreement to permitted
issuances of Equity Interests shall be subject to the terms of this subsection
6.17(f).
SECTION 6.18 Management Fees.
Notwithstanding any other provision contained in this Agreement or any of
the other Loan Documents, pay, or be or become obligated to pay, any Management
Fees to any Person or any interest on any deferred obligation therefor,
including,
- 71 -
without limitation, to any shareholder, director, officer or employee of any
Borrower, or any Loan Party.
SECTION 6.19 Senior Subordinated Debt Payments.
Make any further cash payments with respect to any payments of principal,
interest or otherwise due in connection with MediaBay's Senior Subordinated Debt
held by Xxxxxx Xxxxxxx, his family or affiliates or the Xxxxxxx Secured
Subordinated Loan. Any such payments shall accrue, be paid-in-kind or be paid in
shares of common stock of MediaBay in lieu of and in full satisfaction of paying
such payments in cash until all Obligations under the Credit Agreement have been
paid in full. So long as no default or Event of Default under the Credit
Agreement has occurred and is continuing, MediaBay may make cash interest
payments in connection with the Senior Subordinated Debt held by non-affiliates.
Any or all of the Senior Subordinated Debt or the Huntingdon Secured
Subordinated Debt may be converted into preferred stock and if all amortization
payments pursuant to Section 2.4(a) have been paid in full through such date and
no default or Event of Default under the Credit Agreement has occurred and is
continuing, a dividend, in an amount not to exceed the rate of interest
currently in effect on such Subordinated Debt may be paid thereon provided,
that, with respect to any preferred stock issued upon conversion of any Senior
Subordinated Debt or any Huntingdon Secured Subordinated Debt held Xxxxxx
Xxxxxxx, his family or affiliates, dividends shall accrue, be paid-in-kind or be
paid in shares of common stock of MediaBay in lieu of and in full satisfaction
of paying such payments in cash until all Obligations under the Credit Agreement
have been paid in full.
SECTION 6.20 Huntingdon Senior Secured Note Payments.
Make any cash payments with respect to any prepayments of principal,
payments of interest or otherwise in connection with the Huntingdon Senior
Secured Note other than regularly scheduled principal payments which shall be
payable on the same dates and in the same amounts as set forth in Section 2.4(a)
hereof. Any such payments shall accrue, be paid-in-kind or be paid in shares of
common stock of MediaBay in lieu of and in full satisfaction of paying such
payments in cash until all Obligations under the Credit Agreement have been paid
in full.
ARTICLE 7
REPORTING REQUIREMENTS
While any of the Commitments is outstanding and, in the event any Advance
remains outstanding, so long as any Borrower or any other Loan Party is indebted
to any of the Lender Parties or the Administrative Agent under any of the Loan
Documents, any Letter of Credit is outstanding and until payment in full of the
Notes and full and complete performance of all of its other obligations arising
hereunder, the Borrowers shall furnish to the Administrative Agent and Lender
Parties:
SECTION 7.1 Default Notice.
As soon as possible and in any event within five (5) Business Days after a
Responsible Officer of a Borrower obtains knowledge of the occurrence of any
Default or any event, development or occurrence reasonably likely to have a
Material Adverse Effect, a statement of the Chief Financial Officer of such
Borrower setting forth details
- 72 -
of such Default or event, development or occurrence and the action that such
Borrower has taken and proposes to take with respect thereto.
SECTION 7.2 Monthly Financials.
As soon as available and in any event within thirty (30) days (or in the
case of the January 2001 and February 2001 reports within sixty (60) days and
forty-five (45) days, respectively) after the end of each month which is not a
fiscal quarter end, a Consolidated balance sheet, statement of income and cash
flows for each month commencing February 2001, as of the end of such month of
the Borrowers and their Subsidiaries, and consolidating balance sheet and
statements of income of the Borrowers and their Subsidiaries, for the period
commencing at the end of the previous month and ending with the end of such
month and Consolidated statement of income and a Consolidated statement of cash
flows of the Borrowers and their Subsidiaries, and consolidating statements of
income of the Borrowers and their Subsidiaries, for the period commencing at the
end of the previous Fiscal Year and ending with the end of such month, setting
forth in each case commencing February 2001 in comparative form the
corresponding figures for the corresponding period of the prior Fiscal Year, all
in reasonable detail and duly certified by the chief financial officer of the
applicable Borrower.
SECTION 7.3 Quarterly Financials.
As soon as available and in any event within fifty (50) days after the end
of each of the first three fiscal quarters of each Fiscal Year:
(a) a Consolidated balance sheet of the Borrowers and their
Subsidiaries, and consolidating balance sheets of the Borrowers and their
Subsidiaries, as of the end of such quarter and a Consolidated statement of
income and a Consolidated statement of cash flows of the Borrowers and
their Subsidiaries, and consolidating statements of income and
consolidating statements of cash flows of the Borrower and its
Subsidiaries, for the period commencing at the end of the previous fiscal
quarter and ending with the end of such fiscal quarter; and
(b) a Consolidated statement of income and a Consolidated statement of
cash flows of the Borrowers and their Subsidiaries and consolidating
statements of income and consolidating statements of cash flows of the
Borrowers and their Subsidiaries for the period commencing at the end of
the previous Fiscal Year and ending with the end of such fiscal quarter,
setting forth in each case in comparative form the corresponding figures
for the corresponding period of the preceding Fiscal Year and the
corresponding figures from the budgets for such period and for the Fiscal
Year which includes such period, all of the foregoing in reasonable detail
and duly certified by the chief financial officer of each of the Borrowers
as having been prepared in accordance with GAAP (subject to normal year-end
audit adjustments), together with (i) a Compliance Certificate (provided
that the Compliance Certificate must be delivered in no event later than
fifty (50) days after the end of each of the first three fiscal quarters of
each Fiscal Year) of said officer stating, inter alia, that no Default has
occurred and is continuing or, if a Default has occurred and is continuing,
a statement as to the nature thereof and the action that the Borrowers have
taken and propose to take with respect thereto and (ii) a schedule in form
reasonably satisfactory to the Administrative Agent of the computations
used by the Borrowers in determining compliance with the financial
covenants contained in Article 8, provided, that in the event of any change
in GAAP used in the preparation of such financial statements, the Borrowers
shall also provide, if necessary for the determination of compliance with
Article 8, a statement of reconciliation conforming such financial
statements to GAAP; provided, further,
- 73 -
that to the extent that comparable information is set forth in a Borrower's
quarterly report on Form 10-Q filed with the Securities and Exchange
Commission for each such quarter, delivery to the Administrative Agent and
the Lender Parties of such 10-Q within the time period specified above
shall be acceptable for purposes of this Section 7.3.
SECTION 7.4 Annual Financials.
As soon as available and in any event within one hundred five (105) days
after the end of each Fiscal Year with respect to all deliveries pursuant to
this Section 7.4 except for the certificate referred to in clause (c) below
which, in any event, shall be delivered within ninety (90) days after the end of
each Fiscal Year, a copy of the annual audit report for such year for the
Borrowers and their Subsidiaries, including therein a Consolidated balance sheet
of the Borrowers and their Subsidiaries, and consolidating balance sheets of
Borrowers and their Subsidiaries, as of the end of such Fiscal Year and a
Consolidated statement of income and a Consolidated statement of cash flows of
the Borrowers and their Subsidiaries, and consolidating statements of income and
consolidating statements of cash flows of the Borrowers and their Subsidiaries,
for such Fiscal Year, in each case setting forth in comparative form the
corresponding figures for the prior Fiscal Year and the corresponding figures
from the budget for such Fiscal Year and in each case accompanied (in the case
of such Consolidated financial statements) by an opinion with respect to such
Consolidated financial statements acceptable to the Administrative Agent of
Deloitte & Touche or other independent certified public accountants of
recognized national standing reasonably acceptable to the Administrative Agent
together with (a) a letter of such accounting firm to the Administrative Agent
and Lender Parties stating that in the course of the regular audit of the
business of the Borrowers and their Subsidiaries, which audit was conducted by
such accounting firm in accordance with generally accepted auditing standards,
such accounting firm has obtained no knowledge that a Default has occurred and
is continuing, or if, in the opinion of such accounting firm, a Default has
occurred and is continuing, a statement as to the nature thereof, (b) a schedule
in form reasonably satisfactory to the Administrative Agent of the computations
used by such accountants in determining, as of the end of such Fiscal Year,
compliance with the covenants contained in Article 8, provided, that in the
event of any change in GAAP used in the preparation of such financial
statements, the Borrowers shall also provide, if necessary for the determination
of compliance with Article 8, a statement of reconciliation conforming such
financial statements to GAAP and (c) a certificate of the Chief Financial
Officer of the applicable Borrower stating that no Default has occurred and is
continuing or, if a Default has occurred and is continuing, a statement as to
the nature thereof and the action that such Borrower has taken and proposes to
take with respect thereto.
SECTION 7.5 ERISA Events and ERISA Reports.
(i) Promptly and in any event within thirty (30) days after any Loan Party
or any ERISA Affiliate knows or has reason to know that any ERISA Event has
occurred, a statement of the Chief Financial Officer of the applicable Borrower
describing such ERISA Event and the action, if any, that such Loan Party or such
ERISA Affiliate has taken and proposes to take with respect thereto and (ii) on
the date any records, documents or other information must be furnished to the
PBGC with respect to any Plan pursuant to Section 4010 of ERISA, a copy of such
records, documents and information.
SECTION 7.6 Plan Terminations.
Promptly and in any event within ten (10) Business Days after receipt
thereof by any Loan Party or any ERISA Affiliate, copies of each notice from
- 74 -
the PBGC stating its intention to terminate any Plan or to have a trustee
appointed to administer any Plan or correspondence from the PBGC indicating it
is considering termination of any Plan.
SECTION 7.7 Actuarial Reports.
Promptly upon receipt thereof by any Loan Party or any ERISA Affiliate, a
copy of the annual actuarial valuation report for each Plan the funded current
liability percentage (as defined in Section 302(d)(8)(B) of ERISA) of which is
less than 90% or the unfunded current liability (as defined in Section
302(d)(8)(A) of ERISA) of which exceeds $500,000. The present value of benefit
liabilities as of the latest actuarial valuation date for such Plan (but not
prior to 12 months prior to the date hereof), determined on the basis of a shut
down of the company in accordance with actuarial assumptions used by the PBGC in
single-employer plan terminations, shall not exceed the market value of assets
exclusive of any contributions due to the Plan by more than $500,000.
SECTION 7.8 Plan Annual Reports.
Upon the request, from time to time, of the Administrative Agent, promptly
and in any event within thirty (30) days after the filing thereof with the
Internal Revenue Service, copies of each Schedule B (Actuarial Information) to
the annual report (Form 5500 Series) with respect to each Plan.
SECTION 7.9 Annual Plan Summaries.
As soon as available and in any event within one hundred twenty (120) days
after the end of each Fiscal Year, an annual summary of actuarial valuation and
other information with respect to each Plan in form, substance and detail
satisfactory to the Administrative Agent.
SECTION 7.10 Multiemployer Plan Notices.
Promptly and in any event within five (5) Business Days after receipt
thereof by any Loan Party or any ERISA Affiliate from the sponsor of a
Multiemployer Plan, copies of each notice concerning, or other correspondence
with respect to, (i) the imposition of Withdrawal Liability by any such
Multiemployer Plan, (ii) the reorganization or termination, within the meaning
of Title IV of ERISA, of any such Multiemployer Plan or (iii) the amount of
liability incurred, or that may be incurred, by such Loan Party or any ERISA
Affiliate in connection with any event described in clause (i) or (ii).
SECTION 7.11 Litigation.
Promptly after the commencement thereof, notice of all material actions,
suits, investigations, litigation and proceedings before any court or
governmental department, commission, board, bureau, agency or instrumentality,
Federal, state, local or foreign, affecting any Loan Party or any of its
Subsidiaries and, promptly after the occurrence thereof, notice of any change in
the status or the financial effect on any Loan Party or any of its Subsidiaries
of the Disclosed Litigation from that described on Schedule 4.9 that in each
case could reasonably be expected to have a Material Adverse Effect.
SECTION 7.12 Securities Reports.
Promptly after the sending or filing thereof, copies of all proxy
statements, financial statements and reports that any Loan Party or any of its
Subsidiaries sends to its stockholders, and copies of all regular, periodic and
special reports, and all final registration statements, that any Loan Party or
any of its Subsidiaries files with the Securities and Exchange Commission or any
other governmental authority or with any national securities exchange.
- 75 -
SECTION 7.13 Creditor Reports.
Promptly after the furnishing thereof, copies of any statement or report
furnished to any other holder of the securities of any Loan Party or of any of
its Subsidiaries pursuant to the terms of any indenture, loan or credit
agreement or similar agreement or instrument and not otherwise required to be
furnished to the Lender Parties pursuant to any other clause of this Article 7.
SECTION 7.14 Agreement Notices.
Promptly upon receipt thereof, copies of all notices, requests and other
documents received by any Loan Party or any of its Subsidiaries under or
pursuant to any Material Contract or indenture, loan or credit agreement or
similar agreement or instrument regarding or related to any breach or default by
any party thereto or any event that could materially impair the value of the
interests or the rights of any Loan Party or any of its Subsidiaries (other than
immaterial interests or rights) or otherwise have a Material Adverse Effect and
copies of any amendment, modification or waiver of any provisions of any
Material Contract or indenture, loan or credit agreement or similar agreement or
indenture and, from time to time upon request by the Administrative Agent, such
information and reports regarding the foregoing as the Administrative Agent may
reasonably request.
SECTION 7.15 Revenue Agent Reports.
Within ten (10) days after receipt, copies of all Revenue Agent Reports
(Internal Revenue Service Form 886), or other written proposals of the Internal
Revenue Service, that propose, determine or otherwise set forth any adjustments
to the Federal income tax liability of the affiliated group (within the meaning
of Section 1504(a)(1) of the Internal Revenue Code) of which any Borrower is a
member aggregating $250,000 or more.
SECTION 7.16 Environmental Conditions.
Promptly after the assertion or occurrence thereof, notice of any
Environmental Action against or of any noncompliance by any Loan Party or any of
its Subsidiaries with any Environmental Law or Environmental Permit that could
reasonably be expected to have a Material Adverse Effect.
SECTION 7.17 Real Property.
Upon the request, from time to time, of the Administrative Agent, promptly
and in any event within thirty (30) days after any such request, a report
supplementing Schedules 4.21 and 4.22 hereto, including an identification of all
real and leased property disposed of by any Borrower or any of its Subsidiaries
during such Fiscal Year, a list and description (including the street address,
county or other relevant jurisdiction, state, record owner and, in the case of
leases of property, lessor, lessee, expiration date and annual rental cost
thereof) of all real property acquired or leased during such Fiscal Year and a
description of such other changes in the information included in such Schedules
as may be necessary for such Schedules to remain accurate and complete in all
respects.
SECTION 7.18 Insurance.
Upon the request, from time to time, of the Administrative Agent, promptly
and in any event within thirty (30) days after any such request, a report
summarizing the insurance coverage (specifying type, amount and carrier) in
effect for each Loan Party and its Subsidiaries and containing such additional
information as the Administrative Agent may reasonably request.
- 76 -
SECTION 7.19 Borrowing Base Reports and Certificates.
(a) Borrowing Base Reports. By the close of business on each Monday, the
Borrowers shall provide to Agent a Borrowing Base Report providing the
following:
(1) Accounts receivable from retail customers at the close of business
at the end of the prior week.
(2) Accounts receivable from consumers at the close of business at the
end of the most recent week for which such information is available
adjusted by adding accounts receivable from consumers for each subsequent
week and subtracting cash receipts from consumer accounts receivable for
each subsequent week.
(3) Actual Inventory amounts at the end of the most recent week for
which such amounts are available adjusted by adding purchases of inventory
for each subsequent week and subtracting cost of products sold in each
subsequent week. Cost of product shall be calculated by taking 20% of the
prior weeks gross sales.
(4) A summary of aged retail accounts receivable as of the end of the
prior week.
(b) Borrowing Base Certificate. By the close of business on each Monday,
the Borrowers shall provide to Agent a Borrowing Base Certificate, substantially
in the form delivered by MediaBay on April 4, 2000, reflecting information at
the close of business at the end of the prior week certified by the Chief
Financial Officer of the MediaBay.
SECTION 7.20 Management Letters.
As soon as available and in any event within ten (10) Business Days after
the receipt thereof, copies of any "management letter" or similar letter
received by any Borrower or its Board of Directors (or any Committee thereof)
from its independent public accountants.
SECTION 7.21 Permitted Acquisition Documents.
Within twenty (20) Business Days following the consummation of each
Permitted Acquisition, complete copies of the related material documents
evidencing such Permitted Acquisition, certified as true and correct by an
appropriate officer of the applicable Borrower.
SECTION 7.22 Other Information.
Such other information respecting the business, condition (financial or
otherwise), operations, performance, properties or prospects of any Loan Party
or any of its Subsidiaries or the Collateral as the Administrative Agent or any
Lender Party (through the Administrative Agent) may from time to time reasonably
request.
SECTION 7.23 Cash Flow Projections.
On every Friday, beginning on the next Friday after the Effective Date, the
Borrowers shall deliver a weekly cash flow projection for the thirteen-week
period immediately following the delivery of such projection.
SECTION 7.24 Receivables Report.
For Retail Receivables, as soon as available and in any event within 5
Business days after the end of the month, an aged summary accounts receivable
trial balance by customer shall be provided. For Receivables arising out of
sales directly to consumers, a one page aged Receivables summary taken from the
detail records by
- 77 -
customer shall be provided as soon as available but in no event later than 30
days from the end of the previous month.
SECTION 7.25 Periodic Audit.
After the Effective Date, one periodic audit of the Receivables and
Inventory may be conducted by Agent or Lenders, in their sole discretion. Based
on the results of such audit, Agent expressly reserves the right, in its
reasonable discretion and after consultation with the Borrowers, to adjust, (i)
the definitions of each of Eligible Receivables and Eligible Inventory and (ii)
the percentage of each of Eligible Receivables and Eligible Inventory which
shall be included in the Borrowing Base provided, however, in no event shall
such percentages be reduced to less than 50% and 30% respectively. Borrowers
shall be responsible for the expenses, fees and costs incurred by Agent or
Lenders in connection with such audit in an amount not to exceed $15,000.
ARTICLE 8
FINANCIAL COVENANTS
While any of the Commitments is outstanding and, in the event any Advance
remains outstanding, so long as any Borrower or any other Loan Party is indebted
to any of the Lender Parties or the Administrative Agent under any of the Loan
Documents, any Letter of Credit is outstanding and until payment in full of the
Notes and full and complete performance of all of its other obligations arising
hereunder, MediaBay shall:
SECTION 8.1 Minimum EBITDA.
Maintain on a Consolidated basis with respect to MediaBay and its
Subsidiaries as of the end of each fiscal period of MediaBay set forth below
EBITDA at not less than the respective amounts set forth below evidence of which
shall be delivered to Administrative Agent within 30 days of the end of such
period:
Period Minimum EBITDA
------ --------------
(a) For the period beginning on -$1,100,000 (i.e., a negative amount)
January 1, 2001 and ending on
Xxxxx 00, 0000
(x) For the period beginning on -$600,000 (i.e., a negative amount)
January 1, 2001 and ending on
June 30, 2001
(c) For the period beginning on -$500,000 (i.e., a negative amount)
January 1, 2001 and ending on
September 30, 2001
(d) For the period beginning on $1,500,000
January 1, 2001 and ending on
December 31, 2001
(e) For the period beginning on $1,200,000
January 1, 2001 and ending on
Xxxxx 00, 0000
(x) For the period beginning on $2,000,000
January 1, 2001 and ending on
June 30, 2002
- 78 -
ARTICLE 9
EVENTS OF DEFAULT
If any of the following ("Events of Default") shall occur and be
continuing:
SECTION 9.1 Payment.
(a) The Borrowers shall fail to pay any principal of any Advance when the
same shall become due and payable or (b) the Borrowers shall fail to pay any
interest on any Advance, or any Loan Party shall fail to make any other payment
under any Loan Document, in each case under this clause (b) within three (3)
Business Days after the same becomes due and payable; or
SECTION 9.2 Representations and Warranties.
Any representation or warranty made by any Loan Party (or any of its
officers) under or in connection with any Loan Document shall prove to have been
incorrect in any material respect when made or confirmed; or
SECTION 9.3 Certain Covenants.
Any Borrower shall fail to perform or observe any term, covenant or
agreement contained in Section 2.13, 5.5, 5.6, 5.7, or 5.13, Article 6 or
Article 8 and such failure shall, if caused by a violation of the provisions of
Section 6.1(b), (d) or (e), 6.6, 6.13, 6.15, 6.16 and if able to be remedied,
remain unremedied for fifteen (15) days after the date of such failure; or
SECTION 9.4 Other Covenants.
Any Loan Party shall fail to perform any other term, covenant or agreement
contained in any Loan Document or other documents executed or delivered to any
of the Lenders in connection with this Agreement on its part to be performed or
observed if such failure shall remain unremedied for thirty (30) days after the
earlier of the date on which (a) a Responsible Officer of any Loan Party becomes
aware of such failure or (b) written notice thereof shall have been given to the
Borrowers by the Administrative Agent or any Lender Party; or
SECTION 9.5 Other Defaults.
Any Loan Party or any of its Subsidiaries shall fail to pay any principal
of, premium or interest on or any other amount payable in respect of any Debt
that is outstanding in a principal or notional amount of at least $500,000
either individually or in the aggregate (but excluding Debt outstanding
hereunder) of such Loan Party or such Subsidiary (as the case may be), when the
same becomes due and payable after any applicable grace period (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise); or
any other event shall occur or condition shall exist under any agreement or
instrument relating to any such Debt, in each case if the effect of such event
or condition is to accelerate, or to permit the acceleration of, the maturity of
such Debt or otherwise to cause, or to permit the holder thereof to cause, such
Debt to mature; or any such Debt shall be declared to be due and payable or
required to be prepaid or redeemed (other than by a regularly scheduled required
prepayment or redemption), purchased or defeased, or an offer to prepay, redeem,
purchase or defease such Debt shall be required to be made, in each case prior
to the stated maturity thereof; or
- 79 -
SECTION 9.6 Bankruptcy, Etc.
Any Loan Party or any of its Subsidiaries shall generally not pay its debts
as such debts become due, or shall admit in writing its inability to pay its
debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against any Loan Party or
any of its Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee or other
similar official for it or for any substantial part of its property and, in the
case of any such proceeding instituted against it (but not instituted by it)
that is being diligently contested by it in good faith, any such proceeding
shall remain undismissed or unstayed for a period of sixty (60) days or any of
the actions sought in such proceeding (including, without limitation, the entry
of an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or any substantial part of its
property) shall occur, or any Loan Party or any of its Subsidiaries shall take
any corporate action to authorize any of the actions set forth above in this
Section 9.6; or
SECTION 9.7 Judgments.
(a) Any judgment or order for the payment of money in excess of Five
Hundred Thousand ($500,000) Dollars individually or in the aggregate (other than
such a judgment or order which is fully covered by insurance for which the
appropriate insurer has acknowledged responsibility in writing) shall be
rendered against any Loan Party or any of its Subsidiaries and (i) enforcement
proceedings shall have been commenced by any creditor upon such judgment or
order and (ii) there shall be a period of fifteen (15) consecutive days during
which a stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; or
(b) Any non-monetary judgment or order shall be rendered against any Loan
Party or any of its Subsidiaries that is reasonably likely to have a Material
Adverse Effect; or
SECTION 9.8 Loan Documents.
Any material provision of any Loan Document after delivery thereof shall
for any reason cease to be valid and binding on or enforceable against any Loan
Party which is party to it, or any such Loan Party shall so state in writing; or
SECTION 9.9 Liens.
Any Collateral Document after delivery thereof, together with all filings
and other required perfection actions taken in connection therewith, shall for
any reason cease to or otherwise not create a valid and perfected first priority
lien on and security interest in the Collateral purported to be covered thereby
(other than non-perfection of Liens on specific collateral as identified
expressly in the Security Agreement or Intellectual Property Security
Agreement); or any Event of Default shall have occurred under the Xxxxx Xxxxxxx
Subordinated Security Agreement or the Senior Subordinated Security Agreement or
the secured party under either thereof shall have taken any action in violation
of the terms thereof; or the bailee under any bailee letter relating to
inventory of any Loan Party shall take any action in respect of such inventory
having a value of $500,000 or more that could adversely affect the
Administrative Agent's rights in collateral covered thereby in a material way;
or
SECTION 9.10 Change of Control.
Any Change of Control shall occur; or
- 80 -
SECTION 9.11 ERISA Events.
(a) Any ERISA Event shall have occurred with respect to a Plan and the sum
(determined as of the date of occurrence of the last such ERISA Event) of the
Insufficiency of such Plan and the Insufficiency of any and all other Plans with
respect to which an ERISA Event shall have occurred and then exist (or the
liability of the Loan Parties and the ERISA Affiliates related to such ERISA
Events) exceeds $500,000; or
(b) Any Loan Party or any ERISA Affiliate shall have been notified by the
sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability to
such Multiemployer Plan in an amount that, when aggregated with all other
amounts required to be paid to Multiemployer Plans by the Loan Parties and the
ERISA Affiliates as Withdrawal Liability (determined as of the date of such
notification), exceeds $500,000 or requires payments exceeding 300,000 per
annum; or
(c) Any Loan Party or any ERISA Affiliate shall have been notified by the
sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of ERISA,
and as a result of such reorganization or termination the aggregate annual
contributions of the Loan Parties and the ERISA Affiliates to all Multiemployer
Plans that are then in reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer Plans for the plan
years of such Multiemployer Plans immediately preceding the plan year in which
such reorganization or termination occurs by an amount exceeding $300,000; or
SECTION 9.12 Subordination Provisions.
The subordination provisions contained in any instrument pursuant to which
the Subordinated Debt permitted under Section 6.2(c)(iv) is created or in any
instrument evidencing such Subordinated Debt shall cease, for any reason, to be
in full force and effect or enforceable in accordance with their terms (other
than as the result of payment or prepayment in accordance with the terms
hereof); or
SECTION 9.13 Management.
Xxxxxx Xxxxxxx shall cease for any reason whatsoever, including, without
limitation, death or disability (as such disability shall be determined in the
sole and absolute judgment of the Administrative Agent) to be and continuously
perform the duties of Chairman of MediaBay or, if such cessation shall occur as
a result of the death or such disability, neither (i) Xxxxxxx Xxxxxxx nor (ii)
another successor reasonably satisfactory to the Administrative Agent, shall
have become and shall have commenced to perform the duties of Chairman of
MediaBay within thirty (30) days after such cessation; provided, however, that
if Xxxxxxx Xxxxxxx or another such reasonably satisfactory successor shall have
been so elected and shall have commenced performance of such duties within such
period, the name of Xxxxxxx Xxxxxxx or such other successor, as the case may be,
shall be deemed to have been inserted in place of Xxxxxx Xxxxxxx, in this
Section 9.13;
SECTION 9.14 Borrowing Base Deficiency.
Any Borrowing Base Deficiency shall occur and be continuing which is not
eliminated by the Borrowers' prepayment within seven (7) Business Days of then
outstanding Revolving Credit Advances in an amount sufficient to eliminate such
Borrowing Base Deficiency; or
- 81 -
SECTION 9.15 Note Escrow Agreement.
The Huntingdon Senior Secured Note and the Huntingdon Secured Subordinated
Note have not been issued within thirty (30) business days after the Effective
Date;
then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to the Borrowers,
declare the Commitments of each appropriate Lender (other than the Commitment in
respect of Letter of Credit Advances by the Issuing Bank or a Revolving Credit
Lender pursuant to Section 2.3(c)) and of the Issuing Bank to issue Letters of
Credit to be terminated, whereupon the same shall forthwith terminate, and (ii)
shall at the request, or may with the consent, of the Required Lenders, (A) by
notice to the Borrowers, declare the Notes, all interest thereon and all other
amounts payable under this Agreement and the other Loan Documents to be
forthwith due and payable, whereupon the Notes, all such interest and all such
other amounts shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Borrowers and (B) by notice to each party
required under the terms of any agreement in support of which a Standby Letter
of Credit is issued, request that all Obligations under such agreement be
declared to be due and payable; provided, however, that in the event of an
actual or deemed entry of an order for relief with respect to any Loan Party or
any of its Subsidiaries under the Federal Bankruptcy Code, (x) the obligation of
each Lender to make Advances (other than Letter of Credit Advances by the
Issuing Bank or a Revolving Credit Lender pursuant to Section 2.3(c)) and of the
Issuing Bank to issue Letters of Credit shall automatically be terminated and
(y) the Notes, all such interest and all such amounts shall automatically become
and be due and payable, without presentment, demand, protest or any notice of
any kind, all of which are hereby expressly waived by the Borrowers.
If any Event of Default shall have occurred and be continuing, the
Administrative Agent may, or shall at the request of the Required Lenders,
irrespective of whether it is taking any of the actions described in Article 9
or otherwise, make demand upon the Borrowers to, and forthwith upon such demand
the Borrowers will, pay to the Administrative Agent on behalf of the Lender
Parties in same day funds at the Administrative Agent's office designated in
such demand, for deposit in the L/C Cash Collateral Account, an amount equal to
the aggregate Available Amount of all Letters of Credit then outstanding. If at
any time the Administrative Agent determines that any funds held in the L/C Cash
Collateral Account are subject to any right or claim of any Person other than
the Administrative Agent and the Lender Parties or that the total amount of such
funds is less than the aggregate Available Amount of all Letters of Credit, the
Borrowers will, forthwith upon demand by the Administrative Agent, pay to the
Administrative Agent, as additional funds to be deposited and held in the L/C
Cash Collateral Account, an amount equal to the excess of (a) such aggregate
Available Amount over (b) the total amount of funds, if any, then held in the
L/C Cash Collateral Account that the Administrative Agent determines to be free
and clear of any such right and claim.
ARTICLE 10
THE ADMINISTRATIVE AGENT
SECTION 10.1 Authorization and Action.
(a) Each Lender Party (in its capacities as a Lender, and/or Issuing Bank)
hereby appoints and authorizes the Administrative Agent to take
- 82 -
such action as agent on its behalf and to exercise such powers and discretion
under this Agreement and the other Loan Documents as are delegated to the
Administrative Agent by the terms hereof and thereof, together with such powers
and discretion as are reasonably incidental thereto. The Administrative Agent
shall have no duties or responsibilities except those expressly set forth in
this Agreement and the other Loan Documents and shall not be a trustee or
fiduciary for any Lender Party.
(b) As to any matters not expressly provided for by the Loan Documents
(including, without limitation, enforcement or collection of the Notes), the
Administrative Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions shall be binding upon all Lender
Parties and all holders of Notes and any action taken or failure to act pursuant
thereto shall be binding on all the Lender Parties; provided, however, that the
Administrative Agent shall not be required to take any action that exposes the
Administrative Agent to personal liability or that is contrary to this
Agreement, any other Loan Document or applicable law and except for action
expressly required by the Administrative Agent hereunder or under the Loan
Documents, the Administrative Agent shall in all cases be fully justified in
failing or refusing to act hereunder or thereunder unless it shall be
indemnified to its satisfaction by the Lender Parties against any and all
liability and expense that may be incurred by it by reason of taking or
continuing to take any such action.
SECTION 10.2 Agent's Reliance, Etc.
Neither the Administrative Agent nor any of its directors, officers, agents
or employees shall be liable for any action taken or omitted to be taken by it
or them under or in connection with the Loan Documents, except for its or their
own gross negligence or willful misconduct. Without limitation of the generality
of the foregoing, the Administrative Agent: (a) may treat the payee of any Note
as the holder thereof until the Administrative Agent receives and accepts an
Assignment and Acceptance entered into by the Lender that is the payee of such
Note, as assignor, and an Eligible Assignee, as assignee, as provided in Section
11.7; (b) may consult with legal counsel (including counsel for any Loan Party),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (c) makes no
warranty or representation to any Lender Party and shall not be responsible to
any Lender Party for recitals, any statements, warranties or representations
(whether written or oral) made in or in connection with the Loan Documents; (d)
shall not have any duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of any Loan Document on
the part of any Loan Party or to inspect the property (including the books and
records) of any Loan Party; (e) shall not be responsible to any Lender Party for
the due execution, legality, validity, enforceability, genuineness, sufficiency
or value of, or the perfection or priority of any lien or security interest
created or purported to be created under or in connection with, any Loan
Document or any other instrument or document furnished pursuant thereto; (f)
shall incur no liability under or in respect of any Loan Document by acting upon
any notice, consent, certificate or other instrument or writing (which may be by
telegram, telecopy or telex) believed by it to be genuine and signed or sent by
or on behalf of the proper party or parties; and (g) may employ agents and
attorneys-in-fact and shall not be answerable for the negligence or misconduct
of any such agents or attorneys-in-fact selected by it with reasonable care.
- 83 -
SECTION 10.3 ING and Affiliates.
With respect to its Commitments, the Advances made by it and the Notes
issued to it, ING shall have the same rights and powers under the Loan Documents
as any other Lender Party and may exercise the same as though it were not the
Administrative Agent; and the term "Lender Party" or "Lender Parties" shall,
unless otherwise expressly indicated, include ING in its individual capacity.
ING and its affiliates may accept deposits from, lend money to, act as trustee
under indentures of, accept investment banking engagements from and generally
engage in any kind of business with, any Loan Party, any of its Subsidiaries and
any Person who may do business with or own securities of any Loan Party or any
such Subsidiary and may accept fees and other consideration from any Borrower or
its Affiliates, for services in connection with this Agreement, the other Loan
Documents or otherwise, all as if ING were not the Administrative Agent and
without any duty to account therefor to the Lender Parties.
SECTION 10.4 Lender Party Credit Decision.
Each Lender Party acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender Party and based on
the financial statements referred to in Section 4.6 and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender Party also acknowledges that
it will, independently and without reliance upon the Administrative Agent or any
other Lender Party and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
SECTION 10.5 Indemnification.
(a) Each Lender Party severally agrees to indemnify the Administrative
Agent (to the extent not promptly reimbursed by the Borrowers) from and against
such Lender Party's ratable share (determined as provided below) of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against the Administrative Agent in any way
relating to or arising out of any of the Loan Documents or any transaction
contemplated hereby and thereby or any action taken or omitted by the
Administrative Agent under any of the Loan Documents; provided, however, that no
Lender Party shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements to the extent resulting from the Administrative Agent's gross
negligence or willful misconduct. Without limitation of the foregoing, each
Lender Party agrees to reimburse the Administrative Agent promptly upon demand
for its ratable share of any costs and expenses (including, without limitation,
fees and expenses of counsel) payable by the Borrowers under Section 11.4, to
the extent that the Administrative Agent is not promptly reimbursed for such
costs and expenses by the Borrowers.
(b) Each Lender Party severally agrees to indemnify the Issuing Bank (to
the extent not promptly reimbursed by the Borrowers) from and against such
Lender Party's ratable share (determined as provided below) of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against the Issuing Bank in any way
relating to or arising out of any of the Loan Documents or any action taken or
omitted by the Issuing Bank under any of the Loan Documents; provided, however,
that no Lender Party shall be liable
- 84 -
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
Issuing Bank's gross negligence or willful misconduct. Without limitation of the
foregoing, each Lender Party agrees to reimburse the Issuing Bank promptly upon
demand for its ratable share of any costs and expenses (including, without
limitation, fees and expenses of counsel) payable by the Borrowers under Section
11.4, to the extent that the Issuing Bank is not promptly reimbursed for such
costs and expenses by the Borrowers.
(c) For purposes of Sections 10.5(a) and 10.5(b), the Lender Parties'
respective ratable shares of any amount shall be determined, at any time,
according to the sum of (i) the aggregate principal amount of the Advances
outstanding at such time and owing to the respective Lender Parties, (ii) their
respective Pro Rata Shares of the aggregate Available Amount of all Letters of
Credit outstanding at such time, (iii) the aggregate unused portions of their
respective Term Commitments at such time, and (iv) their respective Unused
Revolving Credit Commitments at such time; provided, that the aggregate
principal amount of Letter of Credit Advances owing to the Issuing Bank shall be
considered to be owed to the Revolving Credit Lenders ratably in accordance with
their respective Revolving Credit Commitments. In the event that any Defaulted
Advance shall be owing by any Defaulting Lender at any time, such Lender Party's
Commitment with respect to the Facility under which such Defaulted Advance was
required to have been made shall be considered to be unused for purposes of this
Section 10.5 to the extent of the amount of such Defaulted Advance. The failure
of any Lender Party to reimburse the Administrative Agent or the Issuing Bank,
as the case may be, promptly upon demand for its ratable share of any amount
required to be paid by the Lender Parties to the Administrative Agent or the
Issuing Bank, as the case may be, as provided herein shall not relieve any other
Lender Party of its obligation hereunder to reimburse the Administrative Agent
or the Issuing Bank, as the case may be, for its ratable share of such amount,
but no Lender Party shall be responsible for the failure of any other Lender
Party to reimburse the Administrative Agent or the Issuing Bank, as the case may
be, for such other Lender Party's ratable share of such amount. Without
prejudice to the survival of any other agreements of any Lender Party hereunder,
the agreement and obligations of each Lender Party contained in this Section
10.5 shall survive the payment in full of principal, interest and all other
amounts payable hereunder and under the other Loan Documents.
SECTION 10.6 Successor Administrative Agents.
The Administrative Agent may resign as to any or all of the Facilities at
any time by giving written notice thereof to the Lender Parties and the
Borrowers and may be removed as to all of the Facilities at any time with or
without cause by the Required Lenders. Upon any such resignation or removal, the
Required Lenders shall have the right to appoint a successor Administrative
Agent as to such of the Facilities as to which the Administrative Agent has
resigned or been removed. If no successor Administrative Agent shall have been
so appointed by the Required Lenders, and shall have accepted such appointment,
within thirty (30) days after the retiring Administrative Agent's giving of
notice of resignation or the Required Lenders' removal of the retiring
Administrative Agent, then the retiring Administrative Agent may, on behalf of
the Lender Parties, appoint a successor Administrative Agent, which shall be a
Lender which is a commercial bank organized under the laws of the United States
or of any State thereof and having a combined capital and surplus of at least
$250,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent as to all of the Facilities and
upon the execution and filing
- 85 -
or recording of such financing statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as the Required
Lenders may request, in order to continue the perfection of the Liens granted or
purported to be granted by the Collateral Documents, such successor
Administrative Agent shall succeed to and become vested with all the rights,
powers, discretion, privileges and duties of the retiring Administrative Agent,
and the retiring Administrative Agent shall be discharged from all of its duties
and obligations under this Agreement and the other Loan Documents. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent as to less than all of the Facilities and upon the
execution and filing or recording of such financing statements, or amendments
thereto, and such other instruments or notices, as may be necessary or
desirable, or as the Required Lenders may request, in order to continue the
perfection of the Liens granted or purported to be granted by the Collateral
Documents, such successor Administrative Agent shall succeed to and become
vested with all the rights, powers, discretion, privileges and duties of the
retiring Administrative Agent as to such Facilities, other than with respect to
funds transfers and other similar aspects of the administration of Borrowings
under such Facilities, issuances of Letters of Credit (notwithstanding any
resignation as Administrative Agent with respect to the Letter of Credit
Facility) and payments by the Borrowers in respect of such Facilities, and the
retiring Administrative Agent shall be discharged from its duties and
obligations under this Agreement as to such Facilities, other than as aforesaid.
After any retiring Administrative Agent's resignation or removal hereunder as
Administrative Agent as to all of the Facilities, the provisions of this Article
10 shall inure to its benefit as to any actions taken or omitted to be taken by
it while it was Administrative Agent as to any Facilities under this Agreement.
SECTION 10.7 Events of Default.
The Administrative Agent shall not be deemed to have knowledge of the
occurrence of a Default (other than the non-payment of principal of or interest
on Loans) unless the Administrative Agent has received notice from a Lender or
the Borrowers specifying such Default and stating that such notice is a "Notice
of Default". In the event that the Administrative Agent receives such a notice
of the occurrence of a Default, the Administrative Agent shall give notice
thereof to the Lenders (and shall give each Lender notice of each such
non-payment). The Administrative Agent shall (subject to Section 10.1(b) hereof)
take such action with respect to such Default as shall be directed by the
Required Lenders.
ARTICLE 11
MISCELLANEOUS
SECTION 11.1 Amendments, Etc.
No amendment or waiver of any provision of this Agreement or the Notes or
any other Loan Document, nor consent to any departure by the Borrowers
therefrom, shall in any event be effective unless the same shall be in writing
and signed (or, in the case of the Collateral Documents, consented to) by the
Required Lenders and Revolving Credit Lenders holding 100% (or if there are more
than two (2) Lenders, greater than 50%) of the aggregate Revolving Credit
Commitments, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
however, that (a) no amendment, waiver or consent shall, unless in writing and
signed by all of the Lenders (other than any Lender Party that is, at such time,
a Defaulting Lender), do any of the following at any time: (i) change the
percentage of (A) the Commitments, (B) the aggregate unpaid principal amount of
the Advances or (C) the aggregate Available Amount of outstanding
- 86 -
Letters of Credit that, in each case, shall be required for the Lenders or any
of them to take any action hereunder; (ii) release all or substantially all of
the Collateral in any transaction or series of related transactions or permit
the creation, incurrence, assumption or existence of any Lien on any material
portion of the Collateral in any transaction or series of related transactions
to secure any liabilities or obligations other than Obligations owing to the
Secured Parties under the Loan Documents; (iii) release any of the Guarantors
from their Subsidiary Guaranty; (iv) amend this Section 11.1 or the definition
of Required Lenders; or (v) limit the liability of any Loan Party under any of
the Loan Documents and (b) no amendment, waiver or consent shall, unless in
writing and signed by the Required Lenders and each Lender that has a Commitment
under the Revolving Credit Facility if affected by such amendment, waiver or
consent, (i) increase the Commitments of such Lender or subject such Lender to
any additional obligations, (ii) reduce the principal of, or interest on, the
Notes held by such Lender or any fees or other amounts payable hereunder to such
Lender, (iii) change any date fixed for any payment of principal of, or interest
on, the Notes held by such Lender or any fees or other amounts payable hereunder
to such Lender or (iv) change the order of application of any prepayment set
forth in Section 2.6 in any manner that materially affects such Lender;
provided, further, that no amendment, waiver or consent shall, unless in writing
and signed by the Issuing Bank, in addition to the Lenders required above to
take such action, affect the rights or obligations of the Issuing Bank, as the
case may be, under this Agreement or any other Loan Document; and provided,
further, that no amendment, waiver or consent shall, unless in writing and
signed by the Administrative Agent in addition to the Lenders required above to
take such action, affect the rights or duties of the Administrative Agent under
this Agreement or any other Loan Document.
SECTION 11.2 Notices Etc.
All notices and other communications provided for hereunder shall be in
writing (including telegraphic, telecopy or telex communication) and mailed,
telegraphed, telecopied, telexed or delivered, by overnight courier services or
personally served,
(a) if to any Borrower:
c/o MediaBay, Inc.
0 Xxxxxxxxx Xxxxxx - Xxxxx 000
Xxxxx Xxxxxx, Xxx Xxxxxx 00000
Attention: Mr. Xxxxxx Xxxxxxx
Chairman
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
with a copy to:
Blank Rome Xxxxxx Xxxxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
- 87 -
(b) if to the Administrative Agent:
ING (U.S.) Capital LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Credit Officer
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
with copies to:
ING (U.S.) Capital LLC
Atlanta Xxxxxx
000 Xxxxxxxx Xxxxxxx - Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention : Xxxx Xxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
and
Winston & Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
(c) if to any Lender or the Issuing Bank, at its Domestic Lending
Office specified opposite its name on Schedule I attached hereto.
(d) if to any other Lender Party, at its Domestic Lending Office
specified in the Assignment and Acceptance pursuant to which it became
a Lender Party;
or, as to any Borrower or the Administrative Agent, at such other address as
shall be designated by such party in a written notice to the other parties and,
as to each other party, at such other address as shall be designated by such
party in a written notice to the Borrowers and the Administrative Agent. All
such notices and communications shall, (i) when mailed by certified mail, return
receipt requested, be effective three (3) days after mailing, (ii) when
telegraphed, telecopied or telexed be effective upon delivery to the telegraph
company, upon transmission by telecopier or upon confirmation by telex
answerback, (iii) when delivered in person, be effective when delivered, and
(iv) when delivered by overnight courier, be effective two (2) Business Days
after delivery to the courier properly addressed, except that notices and
communications to the Administrative Agent pursuant to Article 2, 3 or 10 shall
not be effective until received by the Administrative Agent. Delivery by
telecopier of an executed counterpart of this Agreement, the Notes or any other
Loan Document or of any Exhibit hereto or thereto or of any amendment
- 88 -
or waiver of any provision thereof shall be as effective as delivery of a
manually executed counterpart thereof.
SECTION 11.3 No Waiver; Remedies; Counterclaims.
No failure on the part of any Lender Party or the Administrative Agent to
exercise, and no delay in exercising, any right hereunder or under any Note or
under any other Loan Document shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law or in
equity. The due payment and performance of the Obligations shall be without
regard to any counterclaim, right of offset or any other claim whatsoever that
any Borrower or other Loan Party may have against any Lender Party or the
Administrative Agent and without regard to any other obligation of any nature
whatsoever that any Lender Party or the Administrative Agent may have to any
Borrower or Loan Party, and no such counterclaim or offset shall be asserted by
any Borrower (unless such counterclaim or offset would, under applicable law, be
permanently and irrevocably lost if not brought in such action) in any action,
suit or proceeding instituted by any Lender Party or the Administrative Agent
for payment or performance of the Obligations.
SECTION 11.4 Costs and Expenses.
(a) Each Borrower, jointly and severally, agrees to pay on demand (i) all
reasonable costs and expenses of the Lenders in connection with the preparation,
execution, delivery, administration, modification and amendment of the Loan
Documents (including, without limitation, (A) all reasonable due diligence,
collateral review, syndication (including printing, distribution and bank
meetings), transportation, computer, duplication, appraisal, audit, insurance,
consultant, search, filing and recording fees and expenses, (B) the fees and
expenses of counsel for the Lenders with respect thereto, including advising the
Lenders as to their rights and responsibilities, or the perfection, protection
or preservation of rights or interests under the Loan Documents, negotiating
with any Loan Party or with other creditors of any Loan Party or any of its
Subsidiaries arising out of any Default or any events or circumstances that may
give rise to a Default, and presenting claims in or otherwise participating in
or monitoring any bankruptcy, insolvency or other similar proceeding involving
creditors' rights generally and any proceeding ancillary thereto) and, (C) all
costs and expenses of the Administrative Agent and the Lender in connection with
the enforcement of the Loan Documents, whether in any action, suit or litigation
or any bankruptcy, insolvency or other similar proceeding affecting creditors'
rights generally or otherwise (including, without limitation, the fees and
expenses of counsel for the Administrative Agent and each Lender with respect
thereto).
(b) Each Borrower, jointly and severally,) agrees to indemnify and hold
harmless the Administrative Agent, each Lender Party and each of their
respective Affiliates and their respective officers, directors, employees,
agents and advisors (each, an "Indemnified Party") from and against any and all
claims, damages, losses, liabilities and expenses (including, without
limitation, reasonable fees and expenses of counsel) that may be incurred by or
asserted or awarded against any Indemnified Party, in each case arising out of
or in connection with or by reason of, or in connection with the preparation for
a defense of, any commenced or threatened investigation, litigation or
proceeding arising out of, related to or in connection with (and whether under
any federal securities law or any other statute of any jurisdiction or any
regulation
- 89 -
or at common) law or otherwise against any Indemnified Party, (i) the
Transaction or any other transaction of any Borrower or any of its Subsidiaries
or other Affiliates and any of the other transactions contemplated by the Loan
Documents, (ii) any Permitted Acquisition and any other acquisition or proposed
acquisition or similar business combination or proposed business combination by
any Borrower or any of its Subsidiaries or other Affiliates of all or any
portion of the shares of capital stock or substantially all of the property and
assets of any other Person or any acts, practices or omissions of any Borrower,
any of its Subsidiaries or its agents related thereto, or any withdrawals,
termination or cancellation of any such proposed transaction for any reason,
(iii) the Facilities, the actual or proposed use of the proceeds of the Advances
or the Letters of Credit by any Borrower or any of its Subsidiaries or other
Affiliates and any of the other transactions contemplated by the Loan Documents,
or (iv) the actual or alleged presence of Hazardous Materials on any property of
any Loan Party or any of its Subsidiaries or any Environmental Action relating
in any way to any Loan Party or any of its Subsidiaries, in each case whether or
not such investigation, litigation or proceeding is brought by any Loan Party,
its directors, officers, employees, stockholders or creditors or an Indemnified
Party or any Indemnified Party is otherwise a party thereto and whether or not
the Transaction or any other transaction contemplated hereby is consummated,
except to the extent such claim, damage, loss, liability or expense is found in
a final, non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence or willful misconduct.
Each Borrower also agrees not to assert any claim against the Administrative
Agent, any Lender Party or any of their respective Affiliates, or any of their
respective officers, directors, employees, attorneys and agents, on any theory
of liability, for special, indirect, consequential or punitive damages arising
out of or otherwise relating to the Acquisitions, the Facilities, the actual or
proposed use of the proceeds of the Advances or the Letters of Credit, the Loan
Documents or any of the Transaction or other transactions contemplated thereby,
other than claims for direct, as opposed to consequential, damages.
(c) If any Loan Party fails to pay when due any costs, expenses or other
amounts payable by it under any Loan Document, including, without limitation,
fees and expenses of counsel and indemnities, such amount may be paid on behalf
of such Loan Party by the Administrative Agent, in its sole discretion.
(d) Without prejudice to the survival of any other agreement of any Loan
Party hereunder or under any other Loan Document, the agreements and obligations
of each Borrower contained in Sections 2.9 and 2.11 and this Section 11.4 shall
survive the payment in full of principal, interest and all other amounts payable
hereunder and under any of the other Loan Documents.
SECTION 11.5 Right of Set-off.
Upon (a) the occurrence and during the continuance of any Event of Default
and (b) the making of the request or the granting of the consent specified by
Article 9 to authorize the Administrative Agent to declare the Notes due and
payable pursuant to the provisions of Article 9, each Lender Party and each of
its respective Affiliates is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and otherwise apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by such Lender Party or
such Affiliate to or for the credit or the account of any Borrower or any of its
Subsidiaries against any and all of the Obligations of any Borrower now or
hereafter existing under this Agreement and the Note or
- 90 -
Notes (if any) held by such Lender Party, irrespective of whether such Lender
Party shall have made any demand under this Agreement or such Note or Notes and
although such obligations may be unmatured. Each Lender Party agrees promptly to
notify the Borrowers and the Administrative Agent after any such set-off and
application; provided, however, that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of each Lender
Party and its respective Affiliates under this Section are in addition to other
rights and remedies (including, without limitation, other rights of set-off)
that such Lender Party and its respective Affiliates may have at law, in equity
or otherwise.
SECTION 11.6 Binding Effect.
This Agreement shall become effective when it shall have been executed by
each Borrower and the Administrative Agent and when the Administrative Agent
shall have been notified by each Initial Lender and the Initial Issuing Bank
that each such Initial Lender and the Initial Issuing Bank has executed it and
thereafter shall be binding upon and inure to the benefit of each Borrower, the
Administrative Agent and each Lender Party and their respective successors and
assigns, except that no Borrower shall not have the right to assign any of its
rights hereunder or any interest herein without the prior written consent of the
Lender Parties.
SECTION 11.7 Assignments and Participations.
(a) Each Lender may assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment or Commitments, the Advances
owing to it and the Note or Notes held by it); provided, however, that (i)
without the prior written consent of the Administrative Agent (which may be
withheld for any reason) each such assignment shall be of a uniform, and not a
varying, percentage of all rights and obligations under and in respect of each
of the Facilities on a pro rata basis with respect to each Facility, and no
Facility may be assigned in full or in part without a contemporaneous assignment
to the same assignee of each of the other Facilities, (ii) except in the case of
an assignment to a Person that, immediately prior to such assignment, was a
Lender or an assignment of all of a Lender's rights and obligations under this
Agreement, the amount of the Commitment of the assigning Lender being assigned
pursuant to each such assignment (determined as of the date of the Assignment
and Acceptance with respect to such assignment) shall in no event be less than
$5,000,000, (iii) no such assignments shall be permitted without the prior
consent of the Administrative Agent (which may be withheld for any reason) until
the Administrative Agent shall have notified the Lender Parties that syndication
of the Commitments hereunder has been completed, but in any event not later than
90 days following the Effective Date, (iv) no such assignment shall be permitted
if, immediately after giving effect thereto, any Borrower would be required to
make payments to or on behalf of the assignee Lender Party pursuant to Section
2.9(a) or (b) and the assignor Lender Party was not, at the time of such
assignment, entitled to receive any payment pursuant to Section 2.9(a) or (b),
and (v) the parties to each such assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance, together with any Note or Notes subject to such
assignment and a processing and recordation fee of $3,500.
(b) Upon such execution, delivery, acceptance and recording, from and after
the effective date specified in such Assignment and Acceptance, (x) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it
- 91 -
pursuant to such Assignment and Acceptance, have the rights and obligations of a
Lender or Issuing Bank, as the case may be, hereunder and (y) the Lender or
Issuing Bank assignor thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations under
this Agreement (and, in the case of an Assignment and Acceptance covering all or
the remaining portion of an assigning Lender's or Issuing Bank's rights and
obligations under this Agreement, such Lender or Issuing Bank shall cease to be
a party hereto).
(c) By executing and delivering an Assignment and Acceptance, the Lender
Party assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Lender Party makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, this Agreement or any other Loan Document or any
other instrument or document furnished pursuant hereto or thereto; (ii) such
assigning Lender Party makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Borrower or any
other Loan Party or the performance or observance by any Loan Party of any of
its obligations under any Loan Document or any other instrument or document
furnished pursuant thereto; (iii) such assignee confirms that it has received a
copy of this Agreement, together with copies of the financial statements
referred to in Section 4.6 and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the Administrative Agent, such assigning Lender Party or
any other Lender Party and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (v) such assignee confirms
that it is an Eligible Assignee; (vi) such assignee appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers and discretion under this Agreement and the other Loan Documents as
are delegated to the Administrative Agent by the terms hereof and thereof,
together with such powers and discretion as are reasonably incidental thereto;
and (vii) such assignee agrees that it will perform in accordance with their
terms all of the obligations which by the terms of this Agreement are required
to be performed by it as a Lender or Issuing Bank, as the case may be.
(d) The Administrative Agent shall maintain at its address referred to in
Section 11.2 a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and addresses of the
Lender Parties and the Commitment under each Facility of, and principal amount
of the Advances owing under each Facility to, each Lender Party from time to
time (the "Register"). The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and the Borrowers, the
Administrative Agent and the Lender Parties may treat each Person whose name is
recorded in the Register as a Lender Party hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrowers or
any Lender Party at any reasonable time and from time to time upon reasonable
prior notice.
- 92 -
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender Party and an assignee, together with any Note or Notes subject
to such assignment and the appropriate processing and reconciliation fee, the
Administrative Agent shall, if such Assignment and Acceptance has been completed
and is in substantially the form of Exhibit A hereto, (i) accept such Assignment
and Acceptance, (ii) record the information contained therein in the Register
and (iii) give prompt notice thereof to the Borrowers. In the case of any
assignment by a Lender, within five (5) Business Days after its receipt of such
notice, the Borrowers, at their own expense, shall execute and deliver to the
Administrative Agent in exchange for the surrendered Note or Notes a new Note to
the order of such Eligible Assignee in an amount equal to the Commitment assumed
by it under a Facility pursuant to such Assignment and Acceptance and, if the
assigning Lender has retained a Commitment hereunder under such Facility, a new
Note to the order of the assigning Lender in an amount equal to the Commitment
retained by it hereunder. Such new Note or Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such surrendered
Note or Notes, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of Exhibit B hereto.
(f) The Issuing Bank may assign to an Eligible Assignee all of its rights
and obligations under the undrawn portion of its Letter of Credit Commitment at
any time; provided, however, that (i) each such assignment shall be to an
Eligible Assignee and (ii) the parties to each such assignment shall execute and
deliver to the Administrative Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with a processing and
recordation fee of $3,500.
(g) Each Lender Party may sell participations to one or more Persons (other
than any Loan Party or any of its Affiliates) in or to all or a portion of its
rights and obligations under this Agreement (including, without limitation, all
or a portion of its Commitments, the Advances owing to it and the Note or Notes,
if any, held by it) at any time and from time to time and without the consent of
or notice to any Borrower or any Guarantor; provided, however, that (i) such
Lender Party's obligations under this Agreement (including, without limitation,
its Commitments) shall remain unchanged, (ii) such Lender Party shall remain
solely responsible to the other parties hereto for the performance of such
obligations, (iii) such Lender Party shall remain the holder of any such Note
for all purposes of this Agreement, (iv) the Borrowers, the Administrative Agent
and the other Lender Parties shall continue to deal solely and directly with
such Lender Party in connection with such Lender Party's rights and obligations
under this Agreement and (v) no participant under any such participation shall
have any right to approve any amendment, waiver or other modification of any
provision of this Agreement or any other Loan Document, or any consent to any
departure by any Loan Party therefrom, except to the extent that such amendment,
waiver, modification or consent would reduce the principal of, or interest on,
the Notes or any fees or other amounts payable hereunder, in each case to the
extent subject to such participation, postpone any date fixed for any payment of
principal of, or interest on, the Notes or any fees or other amounts payable
hereunder, in each case to the extent subject to such participation, or release
all or substantially all of the Collateral.
(h) Any Lender Party may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
11.7, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrowers
- 93 -
furnished to such Lender Party by or on behalf of the Borrowers; provided,
however, that, prior to any such disclosure, the assignee or participant or
proposed assignee or participant shall agree to preserve the confidentiality of
any Confidential Information received by it from such Lender Party.
(i) Notwithstanding any other provision set forth in this Agreement, any
Lender Party may at any time create a security interest in all or any portion of
its rights under this Agreement (including, without limitation, the Advances
owing to it and the Note or Notes held by it) in favor of any Federal Reserve
Bank in accordance with Regulation A of the Board of Governors of the Federal
Reserve System.
SECTION 11.8 Execution in Counterparts.
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of a
signature page to this Agreement by telecopier shall be as effective as delivery
of a manually executed counterpart of this Agreement.
SECTION 11.9 No Liability of the Issuing Bank.
Each Borrower, jointly and severally, assumes all risks of the acts or
omissions of any beneficiary or transferee of any Letter of Credit with respect
to its use of such Letter of Credit. Neither the Issuing Bank nor any of its
officers, directors, employees or agents shall be liable or responsible for: (a)
the use that may be made of any Letter of Credit or any acts or omissions of any
beneficiary or transferee in connection therewith; (b) the validity, sufficiency
or genuineness of documents, or of any endorsement thereon, even if such
documents should prove to be in any or all respects invalid, insufficient,
fraudulent or forged; (c) payment by the Issuing Bank against presentation of
documents that do not comply with the terms of a Letter of Credit, including
failure of any documents to bear any reference or adequate reference to the
Letter of Credit; or (d) any other circumstances whatsoever in making or failing
to make payment under any Letter of Credit, except that the Borrowers shall have
a claim against the Issuing Bank, and the Issuing Bank shall be liable to the
Borrowers, to the extent of any direct, but not consequential, damages suffered
by the Borrowers that the Borrowers prove were caused by (i) the Issuing Bank's
willful misconduct or gross negligence in determining whether documents
presented under any Letter of Credit comply with the terms of the Letter of
Credit or (ii) the Issuing Bank's willful failure to make lawful payment under a
Letter of Credit after the presentation to it of a draft and certificates
strictly complying with the terms and conditions of the Letter of Credit. In
furtherance and not in limitation of the foregoing, the Issuing Bank may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary.
SECTION 11.10 Confidentiality.
Neither the Administrative Agent nor any Lender Party shall disclose any
Confidential Information to any Person without the consent of the Borrowers,
other than (a) to the Administrative Agent or to the Administrative Agent's or
such Lender Party's Affiliates and their officers, directors, employees, agents
and advisors and to actual or prospective Eligible Assignees and participants,
and then only on a confidential basis, (b) as required by any law, rule or
regulation or judicial process and (c) as requested or required by any state,
federal or foreign authority or examiner regulating banks or banking. In the
event
- 94 -
of any required disclosure under clauses (a), (b), or (c) above, the
Administrative Agent and the other Lender Parties agree to use reasonable
efforts to inform the Borrowers as promptly as practicable prior to the
disclosure of any such Confidential Information.
SECTION 11.11 Survival of Agreements and Representations; Construction.
All agreements, representations and warranties made herein shall survive
the delivery of this Agreement and the Notes. The headings used in this
Agreement and the table of contents are for convenience only and shall not be
deemed to constitute a part hereof
SECTION 11.12 Assurances.
(a) At any time and from time to time, upon the request of the
Administrative Agent, the Borrowers and each other Loan Party shall execute,
deliver and acknowledge or cause to be executed, delivered and acknowledged,
such further documents and instruments and do such other acts and things as the
Administrative Agent may reasonably request in order to fully effect the
purposes of this Agreement, the other Loan Documents and any other agreements,
instruments and documents delivered pursuant hereto or in connection with the
Loans, including, without limitation, the execution and delivery to the
Administrative Agent of mortgages in form and substance satisfactory to the
Administrative Agent covering all real property or interests therein acquired by
any Borrower or other Loan Party, and all leases of real property entered into
by any Borrower or other Loan Party as tenant or lessee, after the date of this
Agreement, promptly after such acquisition or the entering into of any such
lease.
(b) Upon receipt of an affidavit of an officer of the Administrative Agent
or any Lender as to the loss, theft, destruction or mutilation of any Note or
Collateral Document which is not of public record, and, in the case of any such
mutilation, upon the surrender and cancellation of such Note or Collateral
Document, the Borrowers will issue, in lieu thereof, a replacement Note or other
Collateral Document in the same principal amount thereof (in the case of any
Note) and otherwise of like tenor.
SECTION 11.13 Severability.
The provisions of this Agreement are severable, and if any clause or
provision hereof shall be held invalid or unenforceable in whole or in part in
any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision, or part thereof, in such jurisdiction and shall not in
any manner affect such clause or provision in any other jurisdiction, or any
other clause or provision in this Agreement in any jurisdiction. Each of the
covenants, agreements and conditions contained in this Agreement is independent
and compliance by any Borrower with any of them shall not excuse non-compliance
by any Borrower with any other. 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 be otherwise 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.
- 95 -
SECTION 11.14 JURISDICTION, ETC.
(a) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY
NEW YORK STATE COURT OR FEDERAL COURT OF THE UNITED STATES OF AMERICA SITTING IN
NEW YORK CITY, NEW YORK AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION OR ENFORCEMENT OF ANY
JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD
AND DETERMINED IN ANY SUCH NEW YORK STATE COURT OR, TO THE EXTENT PERMITTED BY
LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW. NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT ANY
LENDER PARTY MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO
THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS IN THE COURTS OF ANY
JURISDICTION.
(b) EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO
THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS TO WHICH IT IS A PARTY IN ANY NEW YORK STATE OR FEDERAL COURT. EACH OF
THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT.
SECTION 11.15 GOVERNING LAW. THIS AGREEMENT, THE NOTES AND THE OTHER LOAN
DOCUMENTS (OTHER THAN THE MORTGAGES WHICH SHALL BE GOVERNED BY THE LAW OF THE
JURISDICTION WHERE THE PROPERTY COVERED THEREBY IS LOCATED) SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO ITS RULES PERTAINING TO CONFLICTS OF LAWS OTHER THAN
GENERAL OBLIGATIONS LAW SECTION 5-1401.
SECTION 11.16 WAIVER OF JURY TRIAL. EACH OF THE BORROWERS, THE LOAN
PARTIES, THE ADMINISTRATIVE AGENT AND THE LENDER PARTIES VOLUNTARILY,
INTENTIONALLY AND IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE)
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS,
THE ADVANCES OR THE ACTIONS OF THE ADMINISTRATIVE AGENT OR ANY LENDER PARTY IN
THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT
- 96 -
THEREOF. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR THE LENDER PARTIES
AND THE ADMINISTRATIVE AGENT TO ENTER INTO THIS AGREEMENT AND TO MAKE ADVANCES
HEREUNDER.
SECTION 11.17 FINAL AGREEMENT.
THIS WRITTEN AGREEMENT, THE NOTES AND THE OTHER LOAN DOCUMENTS REPRESENT
THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. THE PARTIES HERETO
ACKNOWLEDGE AND AFFIRM THE STATEMENT MADE IN THE PRECEDING SENTENCE.
SECTION 11.18 Amendment, Restatement and Waiver.
(a) On and after the date on which all of the conditions precedent set
forth in Section 3.1 of this Agreement are satisfied or waived (the "Effective
Date"), this Agreement will automatically and without further action of any kind
amend and restate in its entirety the Prior Credit Agreement and, upon the
Effective Date, the terms and provisions of the Prior Credit Agreement shall,
subject to this Section 11.18, be superseded hereby; provided, however, that
notwithstanding the amendment and restatement of the Prior Credit Agreement by
this Agreement, the Loan Parties shall continue to be liable to Fleet and each
Lender Party (as each such term is defined in the Prior Credit Agreement) with
respect to agreements on the part of the Loan Parties under the Prior Credit
Agreement to indemnify and hold Fleet (individually and as Administrative Agent)
and such Lender Parties harmless from and against all claims, demands,
liabilities, damages, losses, costs, charges and expenses to which Fleet
(individually and as Administrative Agent) or any such Lender Party may be
subject arising in connection with any action taken, failure to take action or
transaction contemplated in or under the Prior Credit Agreement during the
period that such agreement was in effect. Without limiting the generality of the
foregoing, Sections 2.10, 2.12 and 11.4 of the Prior Credit Agreement shall not
be superseded, modified or otherwise affected by this Agreement.
(b) Notwithstanding the amendment and restatement of the Prior Credit
Agreement by this Agreement, the Loans under, and as defined in, the Prior
Credit Agreement ("Continuing Loans") owing to the Lenders by MediaBay will
remain outstanding as of the date hereof, and will remain outstanding as of the
Effective Date, and will constitute continuing Obligations of each of the
Borrowers hereunder and will continue to be secured by the Collateral.
(c) The Continuing Loans and the Liens securing payment thereof shall in
all respects be continuing, and this Agreement shall not be deemed to evidence
or result in a novation or repayment and re-borrowing of the Continuing Loans.
In furtherance of and without limiting the foregoing, (i) all amounts owing with
respect to the Continuing Loans, other than the principal amount thereof, but
including, accrued interest, fees and expenses with respect to the Continuing
Loans, shall have been paid in accordance with the Prior Credit
- 97 -
Agreement for periods prior to the Effective Date and (ii) from and after the
Effective Date, the terms, conditions, and covenants governing the Continuing
Loans shall be solely as set forth in this Agreement, which shall supersede the
Prior Credit Agreement in its entirety, provided, however, that any bailee
letters, landlord waivers, bank agency agreements, insurance loss payee
endorsements and other like documents evidencing the Lenders security interest
in the Collateral delivered in connection with the Prior Credit Agreement, to
the extent not specifically amended and restated by the terms hereof, shall
remain valid and enforceable and ING (U.S.) Capital LLC, as successor
administrative agent to Fleet National Bank, shall be deemed to be the
administrative agent thereunder.
(d) As of the date hereof, Borrower and Guarantors acknowledge that there
exist Defaults and Events of Default under the Prior Credit Agreement and each
such Default or Event of Default is set forth in the Prior Loan Default Letter.
The Administrative Agent and Lenders hereby acknowledge the existence of such
Defaults and Events of Default and waive such Defaults and Events of Default
under the Prior Credit Agreement; provided, however, that nothing contained
herein shall operate as a waiver with respect to any other Default or Event of
Default other than those expressly enumerated in the Prior Loan Default Letter
nor does it constitute a waiver any Defaults or Events of Default occurring
after the date hereof. Upon the effectiveness of this Agreement, the Loan
Parties represent and warrant that there are no other Defaults or Events of
Default under this Agreement or any other Loan Document.
[SIGNATURE PAGES FOLLOW]
- 98 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
MEDIABAY, INC.
By:
------------------------------------
Title:
---------------------------------
XXXXX XXXXXXX, INC.
By:
------------------------------------
Title:
---------------------------------
AUDIO BOOK CLUB, INC.
By:
------------------------------------
Title:
---------------------------------
ING (U.S.) CAPITAL LLC,
as Administrative Agent
By:
------------------------------------
Title:
---------------------------------
- 99 -
LENDERS:
ING (U.S.) CAPITAL LLC
By:
------------------------------------
Title:
---------------------------------
ARK CLO 2000-1, Limited
By: PATRIARCH PARTNERS, LLC,
its Collateral manager
By:
--------------------------------
Title:
------------------------------
- 100 -
