REVOLVING CREDIT
AND
SECURITY AGREEMENT
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PNC BANK, NATIONAL ASSOCIATION
(AS LENDER AND AS AGENT)
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WITH
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TRESCOM INTERNATIONAL, INC.
TRESCOM U.S.A., INC.
INTEX TELECOMMUNICATIONS, INC.
THE ST. XXXXXX AND SAN XXXX TELEPHONE COMPANY, INC.
AND
STSJ OVERSEAS TELEPHONE COMPANY, INC.
(BORROWERS)
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July 31, 1997
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REVOLVING CREDIT AND
SECURITY AGREEMENT
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Revolving Credit and Security Agreement dated July 31, 1997 (the
"Agreement") among TRESCOM INTERNATIONAL, INC., a corporation organized under
the laws of the State of Florida ("TresCom"), TRESCOM U.S.A., INC., a
corporation organized under the laws of the State of Florida ("TresCom U.S.A."),
INTEX TELECOMMUNICATIONS, INC., a corporation organized under the laws of the
State of South Carolina ("Intex"), THE ST. XXXXXX AND SAN XXXX TELEPHONE, INC.,
a corporation organized under the laws of the U.S. Virgin Islands ("STSJ") and
STSJ OVERSEAS TELEPHONE COMPANY, INC. (d/b/a TresCom P.R.), a corporation
organized under the laws of Puerto Rico ("Telecom") (TresCom, TresCom U.S.A.,
Intex, STSJ and Telecom, each a "Borrower" and jointly and severally,
"Borrowers"), the financial institutions which are now or which hereafter become
a party hereto (individually, a "Lender" and collectively, the "Lenders") and
PNC BANK, NATIONAL ASSOCIATION ("PNC"), as agent for Lenders (PNC, in such
capacity, the "Agent").
IN CONSIDERATION of the mutual covenants and undertakings herein
contained, Borrowers, Lenders and Agent hereby agree as follows:
I. DEFINITIONS.
1.1. ACCOUNTING TERMS. As used in this Agreement, the Note or any
certificate, report or other document made or delivered pursuant to this
Agreement, accounting terms not defined in Section 1.2 or elsewhere in this
Agreement and accounting terms partly defined in Section 1.2 to the extent not
defined, shall have the respective meanings given to them under GAAP; PROVIDED,
HOWEVER, whenever such accounting terms are used for the purposes of determining
compliance with financial covenants in this Agreement, such accounting terms
shall be defined in accordance with GAAP as applied in preparation of the
audited financial statements of Borrowers for the fiscal year ended December 31,
1996 and each fiscal year thereafter.
1.2. GENERAL TERMS. For purposes of this Agreement the following
terms shall have the following meanings:
"ACCOUNTANTS" shall have the meaning set forth in Section 9.7
hereof.
"ADVANCES" shall mean and include the Revolving Advances and
Letters of Credit.
"ADVANCE RATES" shall have the meaning set forth in Section
2.1(a) hereof.
"AFFILIATE" of any Person shall mean any Person (other than a
Subsidiary) which, directly or indirectly, is in
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control of, is controlled by, or is under common control with such Person.
For purposes of this definition, control of a Person shall mean the power,
direct or indirect, (x) to vote 5% or more of the securities having ordinary
voting power for the election of directors of such Person, or (y) to direct
or cause the direction of the management and policies of such Person
whether by contract or otherwise excluding officers and directors acting solely
in their capacity as officers and directors.
"AGENT" shall have the meaning set forth in the preamble to
this Agreement and shall include its successors and permitted assigns.
"ALTERNATE BASE RATE" shall mean, for any day, a rate per annum
equal to the higher of (i) the Base Rate in effect on such day and (ii) the
Federal Funds Rate in effect on such day plus 1/2 of 1%.
"AUTHORITY" shall have the meaning set forth in Section
4.19(c).
"ASSIGNMENT" shall mean, collectively, the Assignment of
Accounts Receivable dated as of the Closing Date between Telecom and Agent and
the Statement of Assignment of Accounts Receivable dated as of the Closing Date
between Telecom and Agent.
"BASE RATE" shall mean the base commercial lending rate of PNC
as publicly announced to be in effect from time to time, such rate to be
adjusted automatically, without notice, on the effective date of any change in
such rate. This rate of interest is determined from time to time by PNC as a
means of pricing some loans to its customers and is neither tied to any external
rate of interest or index nor does it necessarily reflect the lowest rate of
interest actually charged by PNC to any particular class or category of
customers of PNC.
"BLOCKED ACCOUNTS" shall have the meaning set forth in Section
4.15(h).
"BORROWER" or "BORROWERS" shall have the meaning set forth in
the preamble to this Agreement and shall extend to all permitted successors and
assigns of such Persons.
"BORROWERS' ACCOUNT" shall have the meaning set forth in
Section 2.8.
"BORROWING AGENT" shall mean TresCom.
"BUSINESS DAY" shall mean with respect to Eurodollar Rate
Loans, any day on which commercial banks are open for domestic and international
business, including dealings in Dollar deposits in London, England and New York,
New York and with respect to all other matters, any day other than a day on
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which commercial banks in New York, Pennsylvania or New Jersey are authorized or
required by law to close.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. Sections 9601 ET
SEQ.
"CHANGE OF CONTROL" shall mean (a) with respect to all
Borrowers other than TresCom, the occurrence of any event (whether in one or
more transactions) which results in a transfer of control of any Borrower to a
Person who is not an Original Owner, (b) with respect to TresCom, a Person or
group of Persons acting in concert as a partnership, limited partnership,
syndicate or other group ("Group of Persons"), together with any Affiliates
thereof (other than one or more Original Owners), shall succeed in having a
sufficient number of its nominees elected to the Board of Directors of TresCom
such that such nominees, when added to any existing directors remaining on the
Board of Directors of TresCom after such election who are Affiliates of such
Person or Group of Persons, will constitute a majority of the Board of Directors
of TresCom or (c) with respect to all Borrowers, any merger or consolidation of
or with any Borrower or sale of all or substantially all of the property or
assets of any Borrower to a Person who is not an Original Owner. For purposes of
this definition, "control of Borrower" shall mean the power, direct or indirect
(x) to vote 50% of the securities having ordinary voting power for the election
of directors of any Borrower or (y) to direct or cause the direction of the
management and policies of any Borrower by contract or otherwise excluding
officers and directors acting solely in their capacity as officers and
directors.
"CHANGE OF OWNERSHIP" shall mean (a) with respect to TresCom,
the Original Owner ceases to own the largest percentage of the securities having
ordinary voting power for the election of directors of TresCom, or (b) with
respect to all other Borrowers, 100% of the common stock of such Borrower is no
longer owned or controlled by a Person who is an Original Owner or a Borrower,
in each case including for the purposes of the calculation of percentage
ownership, any shares of common stock into which any capital stock of such
Borrower held by any Original Owner is convertible or for which any such shares
of the capital stock of such Borrower or of any other Person may be exchanged
and any shares of common stock issuable to such Original Owner upon exercise of
any warrants, options or similar rights which may at the time of calculation be
held by such Original Owner.
"CHARGES" shall mean all taxes, charges, fees, imposts, levies
or other assessments, including, without limitation, all net income, gross
income, gross receipts, sales, use, ad valorem, value added, transfer,
franchise, profits, inventory, capital stock, license, withholding, payroll,
employment, social security, unemployment, excise, severance, stamp, occupation
and property taxes, custom duties, fees, assessments, liens, claims and charges
of any kind whatsoever, together with any interest and any penalties, additions
to tax or additional amounts, imposed by any taxing or other authority,
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domestic or foreign (including, without limitation, the Pension Benefit Guaranty
Corporation or any environmental agency or superfund), upon the Collateral, any
Borrower or any of its Affiliates (other than Warburg or a Warburg Affiliate).
"CLOSING DATE" shall mean July 31, 1997 or such other later
date as may be agreed to by the parties hereto.
"CODE" shall mean the Internal Revenue Code of 1986, as amended
from time to time and the regulations promulgated thereunder.
"COLLATERAL" shall mean and include:
(a) all Receivables;
(b) all General Intangibles;
(c) all Licenses (but only to the extent permitted by
FCC Rules and any law, statute, rule, regulation or ordinance of any
Governmental Body);
(d) (i) all of each Borrower's rights as an unpaid
vendor, mechanic, artisan, or other lienor, including stoppage in transit,
setoff, detinue, replevin, reclamation and repurchase; (ii) all additional
amounts due to any Borrower from any Customer relating to the Receivables; (iii)
all of each Borrower's contract rights, rights of payment which have been earned
under a contract right, instruments, documents, chattel paper, warehouse
receipts, deposit accounts, money, securities and investment property; (iv) if
and when obtained by any Borrower, all real and personal property of third
parties in which such Borrower has been granted a lien or security interest as
security for the payment or enforcement of Receivables; and (v) any other goods,
personal property or real property now owned or hereafter acquired in which any
Borrower may in the future grant a security interest to Agent hereunder, or in
any amendment or supplement hereto or thereto, or under any other agreement
between Agent and any Borrower;
(e) all of each Borrower's ledger sheets, ledger
cards, files, correspondence, records, books of account, business papers,
computers, computer software (owned by any Borrower or in which it has an
interest (but only to the extent such interest is assignable)), computer
programs, tapes, disks and documents relating to (a), (b), (c) or (d) of this
Paragraph; and
(f) all proceeds and products of (a), (b), (c), (d) or
(e) in whatever form, including, but not limited to: cash, deposit accounts
(whether or not comprised solely of proceeds), certificates of deposit,
insurance proceeds (including hazard, flood and credit insurance), negotiable
instruments and other instruments for the payment of money, chattel paper,
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security agreements, documents, eminent domain proceeds, condemnation proceeds
and tort claim proceeds.
"COMMITMENT PERCENTAGE" of any Lender shall mean the percentage
set forth below such Lender's name on the signature page hereof as same may be
adjusted upon any assignment by a Lender pursuant to Section 16.3(b) hereof.
"COMMITMENT TRANSFER SUPPLEMENT" shall mean a document in the
form of EXHIBIT 16.3 hereto, properly completed and otherwise in form and
substance satisfactory to Agent by which the Purchasing Lender purchases and
assumes a portion of the obligation of Lenders to make Advances under this
Agreement.
"COMMUNICATIONS ACT" shall mean the Communications Act of 1934,
as amended.
"CONSENTS" shall mean all filings and all licenses, permits,
consents, approvals, authorizations, qualifications and orders of governmental
authorities and other third parties, domestic or foreign, necessary to carry on
any Borrower's business, including, without limitation, any Consents required
under all applicable federal, state or other applicable law.
"CONTROLLED GROUP" shall mean all members of a controlled group
of corporations and all trades or businesses (whether or not incorporated) under
common control which, together with any Borrower, are treated as a single
employer under Section 414 of the Code.
"CUSTOMER" shall mean and include the account debtor with
respect to any Receivable and/or the prospective purchaser of goods, services or
both with respect to any contract or contract right, and/or any party who enters
into or proposes to enter into any contract or other arrangement with any
Borrower, pursuant to which such Borrower is to deliver any personal property or
perform any services.
"DEFAULT" shall mean an event which, with the giving of notice
or passage of time or both, would constitute an Event of Default.
"DEFAULT RATE" shall have the meaning set forth in Section 3.1
hereof.
"DEFAULTING LENDER" shall have the meaning set forth in Section
2.16(a) hereof.
"DEPOSITORY ACCOUNTS" shall have the meaning set forth in
Section 4.15(h) hereof.
"DOCUMENTS" shall have the meaning set forth in Section 8.1(c)
hereof.
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"DOLLAR" and the sign "$" shall mean lawful money of the United
States of America.
"DOMESTIC RATE LOAN" shall mean any Advance that bears interest
based upon the Alternate Base Rate.
"EARLY TERMINATION DATE" shall have the meaning set forth in
Section 13.1 hereof.
"EARNINGS BEFORE INTEREST AND TAXES" shall mean for any period
the sum of (i) net income (or loss) of TresCom on a consolidated basis for such
period (excluding extraordinary gains and losses) PLUS (ii) Total Interest
Expense for such period, PLUS (iii) all charges against income of TresCom on a
consolidated basis for such period for federal, state and local taxes actually
paid.
"EBITDA" shall mean for any period the sum of (i) Earnings
Before Interest and Taxes for such period PLUS (ii) depreciation expenses for
such period, PLUS (iii) amortization expenses for such period PLUS (iv) Non-Cash
Items.
"ELIGIBLE IX - PLUS UNBILLED RECEIVABLES" shall mean a
Receivable which would otherwise constitute an Eligible Receivable except for
the fact that it has not been invoiced, provided that such Receivable shall be
invoiced within four (4) days from the end of the month during which the
services giving rise to such Receivables were performed.
"ELIGIBLE OAN RECEIVABLES" shall mean a Receivable which, when
paid, is to be remitted by OAN to a Borrower in connection with the submission
by OAN of call records of such Borrower to an LEC for billing and collection
from end-users of such Borrower's services so long as (a) such Receivable would
otherwise constitute an Eligible Receivable hereunder and (b) the LEC is subject
to the federal regulations with respect to the telecommunications industry as in
effect on the Closing Date.
"ELIGIBLE RECEIVABLES" shall mean and include with respect to
each Borrower, each Receivable of such Borrower arising in the ordinary course
of such Borrower's business and which Agent, in its sole credit judgment, shall
deem to be an Eligible Receivable, based on such considerations as Agent may
from time to time deem appropriate. A Receivable shall not be deemed eligible
unless such Receivable is subject to Agent's first priority perfected security
interest and no other Lien (other than Permitted Encumbrances), and is evidenced
by an invoice or other documentary evidence satisfactory to Agent. In addition,
no Receivable shall be an Eligible Receivable if:
(a) it arises out of a sale made by any Borrower to an
Affiliate (other than Warburg or a Warburg Affiliate) of any Borrower or to a
Person controlled by an Affiliate (other than Warburg or a Warburg Affiliate) of
any Borrower;
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(b) it is due or unpaid more than ninety (90) days after the
original invoice date;
(c) fifty percent (50%) or more of the Receivables from such
Customer are not deemed Eligible Receivables hereunder. Such percentage may, in
Agent's sole discretion, be increased or decreased from time to time;
(d) any covenant, representation or warranty contained in
this Agreement with respect to such Receivable has been breached;
(e) the Customer shall (i) apply for, suffer, or consent to the
appointment of, or the taking of possession by, a receiver, custodian, trustee
or liquidator of itself or of all or a substantial part of its property or call
a meeting of its creditors, (ii) admit in writing its inability, or be generally
unable, to pay its debts as they become due or cease operations of its present
business, (iii) make a general assignment for the benefit of creditors, (iv)
commence a voluntary case under any state or federal bankruptcy laws (as now or
hereafter in effect), (v) be adjudicated a bankrupt or insolvent, (vi) file a
petition seeking to take advantage of any other law providing for the relief of
debtors, (vii) acquiesce to, or fail to have dismissed, any petition which is
filed against it in any involuntary case under such bankruptcy laws, or (viii)
take any action for the purpose of effecting any of the foregoing;
(f) the sale is to a Customer outside the United States of
America, Puerto Rico or the U.S. Virgin Islands, unless the sale is on letter of
credit, guaranty or acceptance terms, in each case acceptable to Agent in its
sole discretion;
(g) Agent believes, in its sole judgment, that collection of
such Receivable is insecure or that such Receivable may not be paid by reason of
the Customer's financial inability to pay;
(h) the Customer is the United States of America, the
Commonwealth of Puerto Rico, any state or any department, agency or
instrumentality of any of them, unless the applicable Borrower assigns its right
to payment of such Receivable to Agent pursuant to the Assignment of Claims Act
of 1940, as amended (31 U.S.C. Sub-Section 3727 ET SEQ. and 41 U.S.C.
Sub-Section 15 ET SEQ.), Articles 200 and 201 of the Puerto Rico Political Code,
3 PR Xxxx Xxx Section 901, or has otherwise complied with other applicable
statutes or ordinances;
(i) the services giving rise to such Receivable have not been
performed by the applicable Borrower or the Receivable does not represent a
final sale;
(j) the Receivable is subject to any offset, deduction,
defense, dispute, or counterclaim (but only to the extent of such offset,
deduction, defense, dispute or
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counterclaim) or the Receivable is contingent in any respect or for any reason;
(k) the applicable Borrower has made any agreement with any
Customer for any deduction therefrom, except for discounts or allowances made in
the ordinary course of business for prompt payment, all of which discounts or
allowances are reflected in the calculation of the face value of each respective
invoice related thereto;
(l) the rendition of services has not been completed;
(m) such Receivable is not payable to a Borrower or, solely
with respect to STSJ, to a representative acting on behalf of STSJ;
(n) the Customer is also a creditor or supplier of a Borrower
other than the portion of such Receivable which exceeds the payables that such
Borrower owes such creditor or supplier; or
(o) such Receivable is not otherwise satisfactory to Agent as
determined in good faith by Agent in the exercise of its discretion in a
reasonable manner.
"ELIGIBLE UNBILLED RECEIVABLES" shall mean a Receivable (other
than an Eligible IX Unbilled Receivable) which would otherwise constitute an
Eligible Receivable except for the fact that it has not been invoiced, provided
that such Receivable shall be evidenced by an invoice within thirty (30) days
from the end of the month during which the services and/or goods giving rise to
such Receivable were performed.
"ENVIRONMENTAL COMPLAINT" shall have the meaning set forth in
Section 4.19(c) hereof.
"ENVIRONMENTAL LAWS" shall mean all federal, state, local,
territorial and commonwealth environmental, land use, zoning, health, chemical
use, safety and sanitation laws, statutes, ordinances and codes relating to the
protection of the environment and/or governing the use, storage, treatment,
generation, transportation, processing, handling, production or disposal of
Hazardous Substances and the rules, regulations, policies, guidelines,
interpretations, decisions, orders and directives of federal, state, local,
territorial and commonwealth governmental agencies and authorities with respect
thereto to the extent in writing and generally available to the public.
"EQUIPMENT" shall mean and include as to each Borrower all of
such Borrower's goods (other than inventory) whether now owned or hereafter
acquired and wherever located including, without limitation, all equipment,
machinery, apparatus, motor vehicles, fittings, furniture, furnishings,
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fixtures, parts, accessories and all replacements and substitutions therefor or
accessions thereto.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time and the rules and regulations promulgated
thereunder.
"EURODOLLAR RATE LOAN" shall mean an Advance at any time that
bears interest based on the Eurodollar Rate.
"EURODOLLAR RATE" shall mean for any Eurodollar Rate Loan for
the then current Interest Period relating thereto the interest rate per annum
determined by PNC by dividing (the resulting quotient rounded upward, if
necessary, to the nearest 1/100 of one percent (1.0%) per annum) (i) the rate of
interest determined by PNC in accordance with its usual procedures (which
determination shall be conclusive absent manifest error) to be the eurodollar
rate two (2) Business Days prior to the first day of such Interest Period for an
amount comparable to such Eurodollar Rate Loan and having a borrowing date and a
maturity comparable to such Interest Period by (ii) a number equal to 1.00 minus
the Reserve Percentage.
"EVENT OF DEFAULT" shall mean the occurrence of any of the
events set forth in Article X hereof.
"FCC" shall mean the Federal Communications Commission or any
successor governmental entity that has jurisdiction over the matters which are
within the jurisdiction of the FCC.
"FCC RULES" shall mean the rules and regulations of the FCC
published in Title 47 of the Code of Federal Regulations, as well as those rules
and regulations not yet incorporated into Title 47 but published in the Federal
Register or in a FCC report and order, including rules and regulations adopted
but not yet effective.
"FEDERAL FUNDS RATE" shall mean, for any day, the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or if such rate is not so published for
any day which is a Business Day, the average of quotations for such day on such
transactions received by PNC from three Federal funds brokers of recognized
standing selected by PNC.
"FORMULA AMOUNT" shall have the meaning set forth in Section
2.1(a).
"GAAP" shall mean generally accepted accounting principles in
the United States of America in effect from time to time.
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"GENERAL INTANGIBLES" shall mean and include as to each
Borrower all of such Borrower's general intangibles, whether now owned or
hereafter acquired including, without limitation, all choses in action, causes
of action, corporate or other business records, inventions, designs, patents,
patent applications, equipment formulations, manufacturing procedures, quality
control procedures, trademarks, service marks, trade secrets, goodwill,
copyrights, design rights, registrations, licenses, franchises, customer lists,
tax refunds, tax refund claims, computer programs, all claims under guaranties,
security interests or other security held by or granted to such Borrower to
secure payment of any of the Receivables by a Customer, all rights of
indemnification and all other intangible property of every kind and nature
(other than Receivables).
"GOVERNMENTAL BODY" shall mean any nation or government, any
state or other political subdivision thereof or any entity exercising the
legislative, judicial, regulatory or administrative functions of or pertaining
to a government.
"GUARANTOR" shall mean TresCom Network Services, Inc. and any
other Person who may hereafter guarantee payment or performance of the whole
or any part of the Obligations and "GUARANTORS" means collectively all such
Persons.
"GUARANTY" shall mean any guaranty of the obligations of
Borrowers executed by a Guarantor in favor of Agent for the ratable benefit of
Lenders.
"HAZARDOUS DISCHARGE" shall have the meaning set forth in
Section 4.19(c) hereof.
"HAZARDOUS SUBSTANCE" shall mean, without limitation, any
flammable explosives, radon, radioactive materials, asbestos, urea formaldehyde
foam insulation, polychlorinated biphenyls, petroleum and petroleum products,
methane, hazardous materials, Hazardous Wastes, hazardous or Toxic Substances or
related materials as defined in CERCLA, the Hazardous Materials Transportation
Act, as amended (49 U.S.C. Sections 1801, ET SEQ.), RCRA, Articles 15 and 27 of
the New York State Environmental Conservation Law or any other applicable
Environmental Law and in the regulations adopted pursuant thereto.
"HAZARDOUS WASTES" shall mean all waste materials subject to
regulation under CERCLA, RCRA or applicable state, local, territory or
commonwealth law, and any other applicable Federal, state, local, territory and
commonwealth laws now in force or hereafter enacted relating to hazardous waste
disposal.
"INDEBTEDNESS" of a Person at a particular date shall mean all
obligations of such Person which in accordance with GAAP would be classified
upon a balance sheet as liabilities (except capital stock and surplus earned or
otherwise) and in any event, without limitation by reason of enumeration, shall
include
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all indebtedness, debt and other similar monetary obligations of such Person
whether direct or guaranteed, and all premiums, if any, due at the required
prepayment dates of such indebtedness, and all indebtedness secured by a Lien on
assets owned by such Person, whether or not such indebtedness actually shall
have been created, assumed or incurred by such Person. Any indebtedness of such
Person resulting from the acquisition by such Person of any assets subject to
any Lien shall be deemed, for the purposes hereof, to be the equivalent of the
creation, assumption and incurring of the indebtedness secured thereby, whether
or not actually so created, assumed or incurred.
"INTEREST COVERAGE RATIO" shall mean, for any period, the ratio
of (x) EBITDA for such period LESS any cash actually expended by any Borrower in
connection with the closing of certain sales offices by such Borrower at any
time after the Closing Date and prior to December 31, 1997 to (y) Total Interest
Expense net of Total Interest Income for such period.
"INTEREST PERIOD" shall mean the period provided for any
Eurodollar Rate Loan pursuant to Section 2.2(b).
"INTEX" shall have the meaning set forth in the Preamble
hereto.
"ISSUER" shall mean any Person who issues a Letter of Credit
and/or accepts a draft pursuant to the terms hereof.
"LEC" shall mean the local exchange carriers which provide
billing services to Borrowers with respect to Borrowers' business and
residential Customers.
"LENDER" and "LENDERS" shall have the meaning ascribed to such
term in the preamble to this Agreement and shall include each Person which
becomes a transferee, successor or assign of any Lender.
"LETTER OF CREDIT FEES" shall have the meaning set forth in
Section 3.2.
"LETTERS OF CREDIT" shall have the meaning set forth in Section
2.9.
"LICENSES" shall mean the licenses, permits, or other
authorizations together with all pending applications therefor, issued by the
FCC or PRTRB to any Borrower, whether now existing or hereafter issued.
"LIEN" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, security interest, lien (whether statutory or
otherwise), Charge, claim or encumbrance, or preference, priority or other
security agreement or preferential arrangement held or asserted in respect of
any asset of any kind or nature whatsoever including, without limitation, any
conditional sale or other title retention agreement, any
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lease having substantially the same economic effect as any of the foregoing, and
the filing of, or agreement to give, any financing statement under the Uniform
Commercial Code or comparable law of any jurisdiction.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect
on (a) the condition, operations, assets, business or prospects of TresCom on a
consolidated basis, (b) Borrowers' ability to pay the Obligations in accordance
with the terms thereof, (c) the value of the Collateral, or Agent's Liens on the
Collateral or the priority of any such Lien or (d) the practical realization of
the benefits of Agent's and each Lender's rights and remedies under this
Agreement and the Other Documents.
"MAXIMUM REVOLVING ADVANCE AMOUNT" shall mean $25,000,000.
"MULTIEMPLOYER PLAN" shall mean a "multiemployer plan" as
defined in Sections 3(37) and 4001(a)(3) of ERISA.
"NET COST AMOUNTS" shall mean the difference between (i) the
consideration paid by any Borrower for any assets acquired by such Borrower and
(ii) the fair market value of such assets.
"NON-CASH ITEMS" shall mean for any period, the sum of (i) any
non-cash compensation given by any Borrower to its employees with respect to
stock options issued by such Borrower to such employees, (ii) the amortization
of telemarketing expenses incurred by Borrowers during such period, and (iii)
the amortization of upfront fees credited by Borrowers to Global Link during
such period, so long as the amounts described in clauses (i), (ii) and (iii)
have been previously capitalized in accordance with GAAP.
"NOTE" shall mean the Revolving Credit Note.
"OAN" shall mean OAN Services, Inc., a Texas corporation and
any successor or assign thereof.
"OAN RECEIVABLES ADVANCE RATE" shall have the meaning set forth
in Section 2.1(a)(y)(iii) hereof.
"OAN SERVICES AGREEMENT" shall mean the Billing and Related
Services Agreement dated as of April 15, 1994 between OAN and TresCom U.S.A. (as
successor in interest to Total Telecommunications, Inc.).
"OBLIGATIONS" shall mean and include any and all of each
Borrower's Indebtedness and/or liabilities to Agent or Lenders or any
corporation that directly or indirectly controls or is controlled by or is under
common control with Agent or any Lender of every kind, nature and description,
direct or indirect, secured or unsecured, joint, several, joint and several,
absolute or contingent, due or to become due, now existing or hereafter
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arising, contractual or tortious, liquidated or unliquidated, regardless of how
such indebtedness or liabilities arise or by what agreement or instrument they
may be evidenced or whether evidenced by any agreement or instrument, including,
but not limited to, any and all of any Borrower's Indebtedness and/or
liabilities under this Agreement or the Other Documents and all obligations of
any Borrower to Agent or Lenders to perform acts or refrain from taking any
action.
"ORIGINAL OWNERS" shall mean (i) with respect to TresCom,
Warburg, (ii) with respect to Telecom, TresCom or STSJ, and (iii) with respect
to all Borrowers other than TresCom and Telecom, TresCom.
"OSHA" shall mean the Occupational Safety and Health Act, and
all rules and regulations from time to time promulgated thereunder.
"OTHER DOCUMENTS" shall mean the Note, the Questionnaire, any
Guaranty, the Assignment and any and all other agreements, instruments and
documents, including, without limitation, guaranties, pledges, powers of
attorney, consents, and all other writings heretofore, now or hereafter executed
by any Borrower or any Guarantor and/or delivered to Agent or any Lender in
respect of the transactions contemplated by this Agreement.
"PARENT" of any Person shall mean a corporation or other entity
owning, directly or indirectly at least 50% of the shares of stock or other
ownership interests having ordinary voting power to elect a majority of the
directors of the Person, or other Persons performing similar functions for any
such Person.
"PARTICIPANT" shall mean each Person who shall be granted the
right by any Lender to participate in any of the Advances and who shall have
entered into a participation agreement in form and substance satisfactory to
such Lender.
"PAYMENT OFFICE" shall mean initially Xxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx Xxxxxxxxx, Xxx Xxxxxx 00000; thereafter, such other office of
Agent, if any, which it may designate by notice to Borrowing Agent and to each
Lender to be the Payment Office.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"PERMITTED ACQUISITIONS" shall mean an acquisition by any
Borrower of all or substantially all of the assets or all or substantially all
of the shares of capital stock of a Person engaged in a business substantially
similar to the business of Borrowers described in Section 5.22 hereof, PROVIDED,
HOWEVER, that no such acquisition shall be permitted hereunder unless (i) at the
time and after giving effect to such acquisition, no Event
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of Default or Default has occurred and is continuing, (ii) after giving effect
to such acquisition, Undrawn Availability shall be no less than $4,000,000,
(iii) the acquired assets shall be subject to Agent's first priority security
interest created hereunder to the extent that such acquired assets constitute
the type of Collateral in which Agent has been granted a security interest
herein, (iv) to the extent that any portion of the purchase price paid for such
acquisition consists of Indebtedness of such Borrower to the seller or sellers
of such assets or stock, such Indebtedness shall be subordinated in right of
payment to the prior payment in full of the Obligations on terms and conditions
satisfactory to Agent in all respects and (v) such Borrower provides Agent with
fifteen (15) days prior written notice and PROVIDED, FURTHER, that Agent
reserves the right to perform all necessary due diligence that Agent deems
necessary on such acquired assets before including the acquired assets in the
calculation of the Formula Amount.
"PERMITTED ENCUMBRANCES" shall mean (a) Liens in favor of Agent
for the benefit of Agent and Lenders; (b) Liens for taxes, assessments or other
governmental charges not delinquent or being contested in good faith and by
appropriate proceedings and with respect to which proper reserves have been
taken by Borrowers; PROVIDED, THAT, the Lien shall have no effect on the
priority of the Liens in favor of Agent or the value of the assets in which
Agent has such a Lien and a stay of enforcement of any such Lien shall be in
effect; (c) Liens disclosed in the financial statements referred to in Section
5.5; (d) deposits or pledges to secure obligations under worker's compensation,
social security or similar laws, or under unemployment insurance; (e) deposits
or pledges to secure bids, tenders, contracts (other than contracts for the
payment of money), leases, statutory obligations, surety and appeal bonds and
other obligations of like nature arising in the ordinary course of any
Borrower's business; (f) judgment Liens that have been stayed or bonded and
mechanics', workers', materialmen's or other like Liens arising in the ordinary
course of any Borrower's business with respect to obligations which are not due
or which are being contested in good faith by the applicable Borrower; (g) Liens
placed upon fixed assets hereafter acquired to secure a portion of the purchase
price thereof, provided that (x) any such lien shall not encumber any other
property of the Borrowers and (y) the aggregate amount of Indebtedness secured
by such Liens incurred as a result of such purchases during any fiscal year
shall not exceed the amount provided for in Section 7.6; and (h) Liens disclosed
on SCHEDULE 1.2.
"PERMITTED INVESTMENT" shall mean an investment in any
Subsidiary formed or acquired by any Borrower solely for the purpose of entering
into a partnership, joint venture or similar arrangement which will provide
certain telecommunication services so long as at the time of and after giving
effect to such investment, (i) Undrawn Availability shall exceed $2,000,000 and
(ii) no Default or Event of Default shall have occurred and be continuing and,
PROVIDED, further that (a) the aggregate amount
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of all such investments in any fiscal year shall not exceed $2,000,000 and (b)
such Borrower pledges to Agent for the ratable benefit of Lenders the stock of
such Subsidiary pursuant to a Pledge Agreement to be executed between Agent and
such Borrower, which agreement shall be in form and substance reasonably
satisfactory to Agent in all respects.
"PERSON" shall mean any individual, sole proprietorship,
partnership, corporation, business trust, joint stock company, trust,
unincorporated organization, association, limited liability company,
institution, public benefit corporation, joint venture, entity or government
(whether Federal, state, county, city, municipal or otherwise, including any
instrumentality, division, agency, body or department thereof).
"PLAN" shall mean any employee benefit plan within the meaning
of Section 3(3) of ERISA, maintained for employees of Borrowers or any member of
the Controlled Group or any such Plan to which any Borrower or any member of the
Controlled Group is required to contribute on behalf of any of its employees.
"PROJECTIONS" shall have the meaning set forth in Section
5.5(a) hereof.
"PRTRB" shall mean the Puerto Rico Telecommunications
Regulatory Board or any successor governmental entity that has jurisdiction over
the matters which are within the jurisdiction of the PRTRB.
"PURCHASING LENDER" shall have the meaning set forth in Section
16.3 hereof.
"QUESTIONNAIRE" shall mean the Documentation Information
Questionnaire and the responses thereto provided by Borrowers and delivered to
Agent.
"RCRA" shall mean the Resource Conservation and Recovery Act,
42 U.S.C. Sections 6901 ET SEQ., as same may be amended from time to time.
"REAL PROPERTY" shall mean all of each Borrower's right, title
and interest in and to the owned and leased premises identified on SCHEDULE 4.19
hereto.
"RECEIVABLES" shall mean and include, as to each Borrower, all
of such Borrower's accounts, contract rights, instruments (including those
evidencing indebtedness owed to Borrowers by their Affiliates), documents,
chattel paper, general intangibles relating to accounts, drafts and acceptances,
and all other forms of obligations owing to such Borrower arising out of or in
connection with the rendition of services, all guarantees and other security
therefor, whether secured or unsecured, now existing or hereafter created, and
whether or not specifically sold or assigned to Agent hereunder.
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"RECEIVABLES ADVANCE RATE" shall have the meaning set forth in
Section 2.1(a)(y)(i) hereof.
"RECEIVABLES IX - PLUS ADVANCE RATE" shall have the meaning set
forth in Section 2.1(a)(y)(ii) hereof.
"RELEASE" shall have the meaning set forth in Section 5.7(c)(i)
hereof.
"REPORTABLE EVENT" shall mean a reportable event described in
Section 4043(b) of ERISA or the regulations promulgated thereunder.
"REQUIRED LENDERS" shall mean Lenders holding at least
fifty-one percent (51%) of the Advances and, if no Advances are outstanding,
shall mean Lenders holding fifty-one percent (51%) of the Commitment
Percentages.
"RESERVE PERCENTAGE" shall mean the maximum effective
percentage in effect on any day as presented by the Board of Governors of the
Federal Reserve System (or any successor for determining the reserve
requirements, including, without limitation, supplemental, marginal and
emergency reserve requirements) with respect to eurocurrency funding.
"REVOLVING ADVANCES" shall mean Advances made other than
Letters of Credit.
"REVOLVING CREDIT NOTE" shall mean the promissory note referred
to in Section 2.1(a) hereof.
"REVOLVING INTEREST RATE" shall mean an interest rate per annum
equal to (a) the sum of the Alternate Base Rate plus one quarter of one percent
(.25%) with respect to Domestic Rate Loans, (b) the sum of the Eurodollar Rate
plus two and one half percent (2.50%) with respect to Eurodollar Rate Loans.
"SALES EXPENSES" shall mean all expenses incurred and/or
accrued by Borrowers during the period from the Closing Date to and including
December 31, 1997 in connection with the closing of certain sales offices not to
exceed the aggregate amount of up to $6,000,000.
"SBA" shall mean the Small Business Administration Agency and
any successor thereto.
"SBA LOAN" shall mean the indebtedness and obligations of STSJ
to the SBA in the aggregate original principal amount of $500,000, and which as
of the Closing Date has an outstanding balance of $393,000.
"SETTLEMENT DATE" shall mean the Closing Date and thereafter
Wednesday of each week unless such day is not a Business Day in which case it
shall be the next succeeding Business Day.
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"STSJ" shall have the meaning set forth in the Preamble hereto.
"SUBSIDIARY" shall mean a corporation or other entity of whose
shares of stock or other ownership interests having ordinary voting power (other
than stock or other ownership interests having such power only by reason of the
happening of a contingency) to elect a majority of the directors of such
corporation, or other Persons performing similar functions for such entity, are
owned, directly or indirectly, by such Person.
"TANGIBLE NET WORTH" shall mean, at a particular date, an
amount equal to (a) the aggregate amount of all assets of TresCom on a
consolidated basis as may be properly classified as such in accordance with GAAP
consistently applied (excluding such other assets as are properly classified as
intangible assets under GAAP other than ten percent (10%) of all Net Cost
Amounts), LESS (b) the aggregate amount of all liabilities of TresCom on a
consolidated basis, PLUS (c) the amount of all Sales Expenses.
"TELECOM" shall have the meaning set forth in the Preamble
hereto.
"TELECOMMUNICATIONS ACT" shall mean Telecommunications Act of
1996, as amended from time to time.
"TERM" shall have the meaning set forth in Section 13.1 hereof.
"TERMINATION EVENT" shall mean (i) a Reportable Event with
respect to any Plan or Multiemployer Plan; (ii) the withdrawal of any Borrower
or any member of the Controlled Group from a Plan or Multiemployer Plan during a
plan year in which such entity was a "substantial employer" as defined in
Section 4001(a)(2) of ERISA; (iii) the providing of notice of intent to
terminate a Plan in a distress termination described in Section 4041(c) of
ERISA; (iv) the institution by the PBGC of proceedings to terminate a Plan or
Multiemployer Plan; (v) any event or condition (a) which might constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Plan or Multiemployer Plan, or (b) that may
result in termination of a Multiemployer Plan pursuant to Section 4041A of
ERISA; or (vi) the partial or complete withdrawal within the meaning of Sections
4203 and 4205 of ERISA, of any Borrower or any member of the Controlled Group
from a Multiemployer Plan.
"TOTAL INTEREST EXPENSE" shall mean, for any period, the
aggregate interest expense of TresCom on a consolidated basis during such
period, as determined in accordance with GAAP consistently applied.
"TOTAL INTEREST INCOME" shall mean, for any period, the
aggregate interest income of TresCom on a consolidated basis during such period,
as determined in accordance with GAAP consistently applied.
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"TOXIC SUBSTANCE" shall mean and include any material present
on the Real Property or the Leasehold Interests which has been shown to have
significant adverse effect on human health or which is subject to regulation
under the Toxic Substances Control Act (TSCA), 15 U.S.C. Sections 2601 ET SEQ.,
applicable state, local, territory or commonwealth law, or any other applicable
Federal or state laws now in force or hereafter enacted relating to toxic
substances. "Toxic Substance" includes but is not limited to asbestos,
polychlorinated biphenyls (PCBs) and lead-based paints.
"TRANSACTIONS" shall have the meaning set forth in Section 5.5
hereof.
"TRANSFEREE" shall have the meaning set forth in Section
16.3(b) hereof.
"TRESCOM" shall have the meaning set forth in the Preamble
hereto.
"TRESCOM ON A CONSOLIDATED BASIS" shall mean the consolidation
in accordance with GAAP of the accounts or other items of TresCom and its
Subsidiaries.
"TRESCOM U.S.A." shall have the meaning set forth in the
Preamble hereto.
"UNBILLED RECEIVABLES ADVANCE RATE" shall have the meaning set
forth in Section 2.1(a)(iv) hereof.
"UNDRAWN AVAILABILITY" at a particular date shall mean an
amount equal to (a) the lesser of (i) the Formula Amount or (ii) the Maximum
Revolving Advance Amount, MINUS (b) the sum of (i) the outstanding amount of
Advances PLUS (ii) all amounts due and owing to Borrowers' trade creditors which
are sixty (60) days or more past due, PLUS (iii) fees and expenses for which
Borrowers are liable but which have not been paid or charged to Borrowers'
Account.
"WARBURG" shall mean X.X. Xxxxxxx, Xxxxxx and Co., LLC,
Warburg, Xxxxxx Investors, LP, or any other venture capital or investment fund
in which X.X. Xxxxxxx, Xxxxxx & Co., LLC is, directly or indirectly, the
managing partner or managing member thereof.
"WARBURG AFFILIATE" shall mean any Person (other than any
Borrower) in which Warburg has the power, direct or indirect, to vote 5% or more
of the securities having ordinary voting power for the election of directors of
such Person.
"WEEK" shall mean the time period commencing with the opening
of business on a Wednesday and ending on the end of business the following
Tuesday.
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1.3. UNIFORM COMMERCIAL CODE TERMS. All terms used herein and defined
in the Uniform Commercial Code as adopted in the State of New York shall have
the meaning given therein unless otherwise defined herein.
1.4. CERTAIN MATTERS OF CONSTRUCTION. The terms "herein", "hereof" and
"hereunder" and other words of similar import refer to this Agreement as a whole
and not to any particular section, paragraph or subdivision. Any pronoun used
shall be deemed to cover all genders. Wherever appropriate in the context, terms
used herein in the singular also include the plural and VICE VERSA. All
references to statutes and related regulations shall include any amendments of
same and any successor statutes and regulations. Unless otherwise provided, all
references to any instruments or agreements to which Agent is a party,
including, without limitation, references to any of the Other Documents, shall
include any and all modifications or amendments thereto and any and all
extensions or renewals thereof.
II. ADVANCES, PAYMENTS.
2.1. (a) REVOLVING ADVANCES. Subject to the terms and conditions set
forth in this Agreement, each Lender, severally and not jointly, will make
Revolving Advances to Borrowers in aggregate amounts outstanding at any time
equal to such Lender's Commitment Percentage of the lesser of (x) the Maximum
Revolving Advance Amount less the aggregate amount of outstanding Letters of
Credit or (y) an amount equal to the sum of:
(i) up to 85%, subject to the provisions of Section 2.1(c)
hereof ("Receivables Advance Rate"), of Eligible Receivables,
PLUS
(ii) up to 85%, subject to the provisions of Section 2.1(c)
hereof ("Receivables IX - Plus Advance Rate"), of Eligible IX -
Plus Unbilled Receivables; PLUS
(iii) up to 70%, subject to the provisions of Section 2.1(c)
hereof ("OAN Receivables Advance Rate") of Eligible OAN
Receivables; PLUS
(iv) up to 50%, subject to the provisions of Section 2.1(c)
hereof ("Unbilled Receivables Advance Rate") of Eligible
Unbilled Receivables (the Receivables Advance Rate, Receivables
IX Plus Advance Rate, the OAN Receivables Advance Rate and the
Unbilled Receivables Advance Rate shall be referred to
collectively, as the "Advance Rates"); MINUS
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(v) the aggregate amount of outstanding Letters of Credit,
MINUS
(vi) such reserves as Agent may reasonably deem proper and
necessary from time to time.
The amount derived from the sum of (x) Sections 2.1(a)(y)(i), (ii),
(iii) and (iv) MINUS (y) Section 2.1 (a)(y)(vi) at any time and from time to
time shall be referred to as the "Formula Amount". The Revolving Advances shall
be evidenced by the secured promissory note (the "Revolving Credit Note")
substantially in the form attached hereto as EXHIBIT 2.1(A).
(b) PERMITTED ACQUISITIONS AND INVESTMENTS. The maximum amount
of Revolving Advances which may be used by Borrowers to make Permitted
Acquisitions and Permitted Investments shall not exceed $6,000,000 in the
aggregate at any time or from time to time. Revolving Advances made in
connection with a Permitted Acquisition and a Permitted Investment shall be
deemed to be the last Revolving Advances that are repaid by Borrowers hereunder
at any time and from time to time.
(c) DISCRETIONARY RIGHTS. The Advance Rates may be increased or
decreased by Agent at any time and from time to time in the exercise of its
reasonable business judgement. Each Borrower consents to any such increases or
decreases and acknowledges that decreasing the Advance Rates or increasing the
reserves may limit or restrict Advances requested by Borrowing Agent.
2.2. PROCEDURE FOR BORROWING REVOLVING ADVANCES.
(a) Borrowing Agent on behalf of any Borrower may notify Agent
prior to 12:00 p.m. on a Business Day of a Borrower's request to incur, on that
day, a Revolving Advance hereunder by telephonic or facsimile request from any
of the individuals listed on EXHIBIT 2.2 attached hereto and made a part hereof
followed by written confirmation within forty-eight (48) hours of any such
request. Should any amount required to be paid as interest hereunder, or as fees
or other charges under this Agreement or any other agreement with Agent or
Lenders, or with respect to any other Obligation, become due, same shall be
deemed a request for a Revolving Advance as of the date such payment is due, in
the amount required to pay in full such interest, fee, charge or Obligation
under this Agreement or any other agreement with Agent or Lenders, and such
request shall be irrevocable.
(b) Notwithstanding the provisions of (a) above, in the event
any Borrower desires to obtain a Eurodollar Rate Loan, Borrowing Agent shall
give Agent at least three (3) Business Days' prior written notice, specifying
(i) the date of the proposed borrowing (which shall be a Business Day), (ii) the
type of borrowing and the amount on the date of such Advance to
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be borrowed, which amount shall be an integral multiple of $500,000, and (iii)
the duration of the first Interest Period therefor. Interest Periods for
Eurodollar Rate Loans shall be for one, two or three months. No Eurodollar Rate
Loan shall be made available to Borrower during the continuance of a Default or
an Event of Default.
(c) Each Interest Period of a Eurodollar Rate Loan shall
commence on the date such Eurodollar Rate Loan is made and shall end on such
date as Borrowing Agent may elect as set forth in (b)(iii) above provided that
the exact length of each Interest Period shall be determined in accordance with
the practice of the interbank market for offshore Dollar deposits and no
Interest Period shall end after the last day of the Term.
Borrowing Agent shall elect the initial Interest Period applicable to a
Eurodollar Rate Loan by its notice of borrowing given to Agent pursuant to
Section 2.2(b) or by its notice of conversion given to Agent pursuant to Section
2.2(d), as the case may be. Borrowing Agent shall elect the duration of each
succeeding Interest Period by giving irrevocable written notice to Agent of such
duration not less than three (3) Business Days prior to the last day of the then
current Interest Period applicable to such Eurodollar Rate Loan. If Agent does
not receive timely notice of the Interest Period elected by Borrowing Agent,
Borrowers shall be deemed to have elected to convert to a Domestic Rate Loan
subject to Section 2.2(d) hereinbelow.
(d) Provided that no Event of Default shall have occurred and
be continuing, any Borrower may, on the last Business Day of the then current
Interest Period applicable to any outstanding Eurodollar Rate Loan, or on any
Business Day with respect to Domestic Rate Loans, convert any such loan into a
loan of another type in the same aggregate principal amount provided that any
conversion of a Eurodollar Rate Loan shall be made only on the last Business Day
of the then current Interest Period applicable to such Eurodollar Rate Loan. If
a Borrower desires to convert a loan, Borrowing Agent shall give Agent not less
than three (3) Business Days' prior written notice to convert from a Domestic
Rate Loan to a Eurodollar Rate Loan or one (1) Business Day's prior written
notice to convert from a Eurodollar Rate Loan to a Domestic Rate Loan,
specifying the date of such conversion, the loans to be converted and if the
conversion is from a Domestic Rate Loan to any other type of loan, the duration
of the first Interest Period therefor. After giving effect to each such
conversion, there shall not be outstanding more than seven (7) Eurodollar Rate
Loans, in the aggregate.
(e) At its option and upon three (3) Business Days' prior
written notice, any Borrower may prepay the Eurodollar Rate Loans in whole at
any time or in part from time to time, without premium or penalty, but with
accrued interest on the principal being prepaid to the date of such repayment.
Such Borrower shall specify the date of prepayment of Advances which are
Eurodollar Rate Loans and the amount of such prepayment. In
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the event that any prepayment of a Eurodollar Rate Loan is required or permitted
on a date other than the last Business Day of the then current Interest Period
with respect thereto, such Borrower shall indemnify Agent and Lenders therefor
in accordance with Section 2.2(f) hereof.
(f) Each Borrower shall indemnify Agent and Lenders and hold
Agent and Lenders harmless from and against any and all losses or expenses that
Agent and Lenders may sustain or incur as a consequence of any prepayment,
conversion of or any default by any Borrower in the payment of the principal of
or interest on any Eurodollar Rate Loan or failure by any Borrower to complete a
borrowing of, a prepayment of or conversion of or to a Eurodollar Rate Loan
after notice thereof has been given, including, but not limited to, any interest
payable by Agent or Lenders to lenders of funds obtained by it in order to make
or maintain its Eurodollar Rate Loans hereunder. A certificate as to any
additional amounts payable pursuant to the foregoing sentence submitted by Agent
or any Lender to Borrowing Agent shall be conclusive absent manifest error.
(g) Notwithstanding any other provision hereof, if any
applicable law, treaty, regulation or directive, or any change therein or in the
interpretation or application thereof, shall make it unlawful for any Lender
(for purposes of this subsection (g), the term "Lender" shall include any Lender
and the office or branch where any Lender or any corporation or bank controlling
such Lender makes or maintains any Eurodollar Rate Loans) to make or maintain
its Eurodollar Rate Loans, the obligation of Lenders to make Eurodollar Rate
Loans hereunder shall forthwith be cancelled and Borrowers shall, if any
affected Eurodollar Rate Loans are then outstanding, promptly upon request from
Agent, either pay all such affected Eurodollar Rate Loans or convert such
affected Eurodollar Rate Loans into loans of another type. If any such payment
or conversion of any Eurodollar Rate Loan is made on a day that is not the last
day of the Interest Period applicable to such Eurodollar Rate Loans, Borrowers
shall pay Agent, upon Agent's request, such amount or amounts as may be
necessary to compensate Lenders for any loss or expense sustained or incurred by
Lenders in respect of such Eurodollar Rate Loan as a result of such payment or
conversion, including (but not limited to) any interest or other amounts payable
by Lenders to lenders of funds obtained by Lenders in order to make or maintain
such Eurodollar Rate Loan. A certificate as to any additional amounts payable
pursuant to the foregoing sentence submitted by Lenders to Borrowing Agent shall
be conclusive absent manifest error.
2.3. DISBURSEMENT OF ADVANCE PROCEEDS. All Advances shall be disbursed
from whichever office or other place Agent may designate from time to time and,
together with any and all other Obligations of Borrowers to Agent or Lenders,
shall be charged to Borrowers' Account on Agent's books. During the Term,
Borrowers may use the Revolving Advances by borrowing, prepaying and
reborrowing, all in accordance with the terms and conditions
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hereof. The proceeds of each Revolving Advance requested by Borrowers or deemed
to have been requested by Borrowers under Section 2.2(a) hereof shall, with
respect to requested Revolving Advances to the extent Lenders make such
Revolving Advances, be made available to the applicable Borrower on the day so
requested by way of credit to such Borrower's operating account at PNC, or such
other bank as Borrowing Agent may designate following notification to Agent, in
immediately available federal funds or other immediately available funds or,
with respect to Revolving Advances deemed to have been requested by any
Borrower, be disbursed to Agent to be applied to the outstanding Obligations
giving rise to such deemed request.
2.4. INTENTIONALLY OMITTED.
2.5. MAXIMUM ADVANCES. The aggregate balance of Revolving Advances
outstanding at any time shall not exceed the lesser of (a) the Maximum Revolving
Advance Amount less outstanding Letters of Credit or (b) the Formula Amount less
outstanding Letters of Credit.
2.6. REPAYMENT OF ADVANCES.
(a) The Advances shall be due and payable in full on the last
day of the Term subject to earlier prepayment as herein provided.
(b) Each Borrower recognizes that the amounts evidenced by
checks, notes, drafts or any other items of payment relating to and/or proceeds
of Collateral may not be collectible by Agent on the date received. In
consideration of Agent's agreement to conditionally credit Borrowers' Account as
of the Business Day on which Agent receives those items of payment, each
Borrower agrees that, in computing the charges under this Agreement, all items
of payment shall be deemed applied by Agent on account of the Obligations one
(1) Business Day after the Business Day Agent receives such payments via wire
transfer or electronic depository check. Agent is not, however, required to
credit Borrowers' Account for the amount of any item of payment which is
unsatisfactory to Agent and Agent may charge Borrowers' Account for the amount
of any item of payment which is returned to Agent unpaid.
(c) All payments of principal, interest and other amounts
payable hereunder, or under any Other Document shall be made to Agent at the
Payment Office not later than 1:00 P.M. (New York Time) on the due date therefor
in lawful money of the United States of America in federal funds or other funds
immediately available to Agent. Agent shall have the right to effectuate payment
on any and all Obligations due and owing hereunder by charging Borrowers'
Account or by making Advances as provided in Section 2.2 hereof.
(d) Borrowers shall pay principal, interest, and all other
amounts payable hereunder, or under any Other Document,
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without any deduction whatsoever, including, but not limited to, any deduction
for any setoff or counterclaim.
2.7. REPAYMENT OF EXCESS ADVANCES. The aggregate balance of Advances
outstanding at any time in excess of the maximum amount of Advances permitted
hereunder shall be immediately due and payable without the necessity of any
demand, at the Payment Office, whether or not a Default or Event of Default has
occurred.
2.8. STATEMENT OF ACCOUNT. Agent shall maintain, in accordance with its
customary procedures, a loan account ("Borrowers' Account") in the name of
Borrowers in which shall be recorded the date and amount of each Advance made by
Agent and the date and amount of each payment in respect thereof; PROVIDED,
HOWEVER, the failure by Agent to record the date and amount of any Advance shall
not adversely affect Agent or any Lender. Each month, Agent shall send to
Borrowing Agent a statement showing the accounting for the Advances made,
payments made or credited in respect thereof, and other transactions between
Agent and Borrowers, during such month. The monthly statements shall be deemed
correct and binding upon Borrowers in the absence of manifest error and shall
constitute an account stated between Lenders and Borrowers unless Agent receives
a written statement of Borrowers' specific exceptions thereto within sixty (60)
days after such statement is received by Borrowing Agent. The records of Agent
with respect to the loan account shall be conclusive evidence absent manifest
error of the amounts of Advances and other charges thereto and of payments
applicable thereto.
2.9. LETTERS OF CREDIT. Subject to the terms and conditions hereof,
Agent shall issue or cause the issuance of standby Letters of Credit to support
guarantees of Borrowers obligations under contracts ("Letters of Credit") on
behalf of any Borrower; PROVIDED, HOWEVER, that Agent will not be required to
issue or cause to be issued any Letters of Credit to the extent that the face
amount of such Letters of Credit would then cause the sum of (i) the outstanding
Revolving Advances PLUS (ii) outstanding Letters of Credit to exceed the lesser
of (x) the Maximum Revolving Advance Amount or (y) the Formula Amount. The
maximum amount of outstanding Letters of Credit shall not exceed $5,000,000 in
the aggregate at any time. All disbursements or payments related to Letters of
Credit shall be deemed to be Domestic Rate Loans consisting of Revolving
Advances and shall bear interest at the applicable Revolving Interest Rate for
Domestic Rate Loans; Letters of Credit that have not been drawn upon shall not
bear interest.
2.10. ISSUANCE OF LETTERS OF CREDIT.
(a) Borrowing Agent, on behalf of Borrowers, may request Agent
to issue or cause the issuance of a standby Letter of Credit by delivering to
Agent at the Payment Office, Agent's form of Letter of Credit Application (the
"Letter of Credit Application") completed to the satisfaction of Agent; and,
such
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other certificates, documents and other papers and information as Agent may
reasonably request. Borrowing Agent, on behalf of Borrowers, also has the right
to give instructions and make agreements with respect to any application, any
applicable letter of credit and security agreement, any applicable letter of
credit reimbursement agreement and/or any other applicable agreement, any letter
of credit and the disposition of documents, disposition of any unutilized funds,
and to agree with Agent upon any amendment, extension or renewal of any Letter
of Credit.
(b) Each Letter of Credit shall, among other things, (i)
provide for the payment of sight drafts when presented for honor thereunder in
accordance with the terms thereof and when accompanied by the documents
described therein and (ii) have an expiry date not later than six (6) months
after such Letter of Credit's date of issuance and in no event later than the
last day of the Term. Each Letter of Credit shall be subject to the Uniform
Customs and Practice for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500, and any amendments or revision thereof
adhered to by the Issuer and, to the extent not inconsistent therewith, the laws
of the State of New York.
(c) Agent shall use its reasonable efforts to notify Lenders of
the request by Borrowing Agent for a Letter of Credit hereunder.
2.11. REQUIREMENTS FOR ISSUANCE OF LETTERS OF CREDIT.
(a) In connection with the issuance of any Letter of Credit
Borrowers shall indemnify, save and hold Agent, each Lender and each Issuer
harmless from any loss, cost, expense or liability, including, without
limitation, payments made by Agent, any Lender or any Issuer and expenses and
reasonable attorneys' fees incurred by Agent, any Lender or Issuer arising out
of, or in connection with, any Letter of Credit to be issued or created for any
Borrower. Borrowers shall be bound by Agent's or any Issuer's regulations and
good faith interpretations of any Letter of Credit issued or created for
Borrowers' Account, although this interpretation may be different from its own;
and, neither Agent, nor any Lender, nor any Issuer nor any of their
correspondents shall be liable for any error, negligence, or mistakes, whether
of omission or commission, in following Borrowing Agent's or any Borrower's
instructions or those contained in any Letter of Credit or of any modifications,
amendments or supplements thereto or in issuing or paying any Letter of Credit,
except for Agent's, any Lender's, any Issuer's or such correspondents' gross
(not mere) negligence or willful misconduct.
(b) Borrowing Agent shall authorize and direct any Issuer to
name the applicable Borrower as the "Applicant" or "Account Party" of each
Letter of Credit. If Agent is not the Issuer of any Letter of Credit, Borrower
shall authorize and direct the Issuer to deliver to Agent all instruments,
documents, and other writings and property received by the Issuer pursuant
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to the Letter of Credit and to accept and rely upon Agent's instructions and
agreements with respect to all matters arising in connection with the Letter of
Credit or the application therefor.
(c) In connection with all Letters of Credit issued or caused
to be issued by Agent under this Agreement, each Borrower hereby appoints Agent,
or its designee, as its attorney, with full power and authority (i) to sign
and/or endorse such Borrower's name upon any letter of credit applications and
acceptances; and (ii) to complete in such Borrower's name or Agent's, or in the
name of Agent's designee, any order, sale or transaction, obtain the necessary
documents in connection therewith, and collect the proceeds thereof. Neither
Agent nor its attorneys will be liable for any acts or omissions nor for any
error of judgment or mistakes of fact or law, except for Agent's or its
attorney's gross (not mere) negligence or willful misconduct. This power, being
coupled with an interest, is irrevocable as long as any Letters of Credit remain
outstanding.
(d) Each Lender shall to the extent of the percentage amount
equal to the product of such Lender's Commitment Percentage times the aggregate
amount of all unreimbursed reimbursement obligations arising from disbursements
made or obligations incurred with respect to the Letters of Credit be deemed to
have irrevocably purchased an undivided participation in each such unreimbursed
reimbursement obligation. In the event that at the time a disbursement is made
the unpaid balance of Revolving Advances exceeds or would exceed, with the
making of such disbursement, the lesser of the Maximum Revolving Advance Amount
less the outstanding Letters of Credit or the Formula Amount less the
outstanding Letters of Credit, and such disbursement is not reimbursed by
Borrowers within two (2) Business Days, Agent shall promptly notify each Lender
and upon Agent's demand each Lender shall pay to Agent such Lender's
proportionate share of such unreimbursed disbursement together with such
Lender's proportionate share of Agent's unreimbursed costs and expenses relating
to such unreimbursed disbursement. Upon receipt by Agent of a repayment from any
Borrower of any amount disbursed by Agent for which Agent had already been
reimbursed by Lenders, Agent shall deliver to each Lender that Lender's pro rata
share of such repayment. Each Lender's participation commitment shall continue
until the last to occur of any of the following events: (A) Agent ceases to be
obligated to issue or cause to be issued Letters of Credit hereunder; (B) no
Letter of Credit issued hereunder remains outstanding and uncancelled or (C) all
Persons (other than the applicable Borrower) have been fully reimbursed for all
payments made under or relating to Letters of Credit.
2.12. ADDITIONAL PAYMENTS. Any sums expended by Agent or any Lender
due to any Borrower's failure to perform or comply with its obligations under
this Agreement or any Other Document including, without limitation, any
Borrower's obligations under Sections 4.2, 4.4, 4.12, 4.13, 4.14 and 6.1 hereof,
may be
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charged to Borrowers' Account as a Revolving Advance and added to the
Obligations.
2.13. MANNER OF BORROWING AND PAYMENT.
(a) Each borrowing of Revolving Advances shall be advanced
according to the applicable Commitment Percentages of Lenders.
(b) Each payment (including each prepayment) by Borrowers on
account of the principal of and interest on the Revolving Advances, shall be
applied to the Revolving Advances pro rata according to the applicable
Commitment Percentages of Lenders. Except as expressly provided herein, all
payments (including prepayments) to be made by any Borrower on account of
principal, interest and fees shall be made without set off or counterclaim and
shall be made to Agent on behalf of the Lenders to the Payment Office, in each
case on or prior to 1:00 P.M., New York time, in Dollars and in immediately
available funds.
(c) (i) Notwithstanding anything to the contrary contained in
Sections 2.13(a) and (b) hereof, commencing with the first Business Day
following the Closing Date, each borrowing of Revolving Advances shall be
advanced by Agent and each payment by any Borrower on account of Revolving
Advances shall be applied first to those Revolving Advances advanced by Agent.
On or before 1:00 P.M., New York time, on each Settlement Date commencing with
the first Settlement Date following the Closing Date, Agent and Lenders shall
make certain payments as follows: (I) if the aggregate amount of new Revolving
Advances made by Agent during the preceding Week (if any) exceeds the aggregate
amount of repayments applied to outstanding Revolving Advances during such
preceding Week, then each Lender shall provide Agent with funds in an amount
equal to its applicable Commitment Percentage of the difference between (w) such
Revolving Advances and (x) such repayments and (II) if the aggregate amount of
repayments applied to outstanding Revolving Advances during such Week exceeds
the aggregate amount of new Revolving Advances made during such Week, then Agent
shall provide each Lender with funds in an amount equal to its applicable
Commitment Percentage of the difference between (y) such repayments and (z) such
Revolving Advances.
(ii) Each Lender shall be entitled to earn interest at
the applicable Revolving Interest Rate on outstanding Revolving Advances which
it has funded.
(iii) Promptly following each Settlement Date, Agent
shall submit to each Lender a certificate with respect to payments received and
Revolving Advances made during the Week immediately preceding such Settlement
Date. Such certificate of Agent shall be conclusive in the absence of manifest
error.
(d) If any Lender or Participant (a "benefitted Lender")
shall at any time receive any payment of all or part of
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its Advances, or interest thereon, or receive any Collateral in respect thereof
(whether voluntarily or involuntarily or by set-off) in a greater proportion
than any such payment to and Collateral received by any other Lender, if any, in
respect of such other Lender's Advances, or interest thereon, and such greater
proportionate payment or receipt of Collateral is not expressly permitted
hereunder, such benefitted Lender shall purchase for cash from the other Lenders
a participation in such portion of each such other Lender's Advances, or shall
provide such other Lender with the benefits of any such Collateral, or the
proceeds thereof, as shall be necessary to cause such benefitted Lender to share
the excess payment or benefits of such Collateral or proceeds ratably with each
of Lenders; PROVIDED, HOWEVER, that if all or any portion of such excess payment
or benefits is thereafter recovered from such benefitted Lender, such purchase
shall be rescinded, and the purchase price and benefits returned, to the extent
of such recovery, but without interest. Each Lender so purchasing a portion of
another Lender's Advances may exercise all rights of payment (including, without
limitation, rights of set-off) with respect to such portion as fully as if such
Lender were the direct holder of such portion.
(e) Unless Agent shall have been notified by telephone,
confirmed in writing, by any Lender that such Lender will not make the amount
which would constitute its applicable Commitment Percentage of the Advances
available to Agent, Agent may (but shall not be obligated to) assume that such
Lender shall make such amount available to Agent on the next Settlement Date
and, in reliance upon such assumption, make available to Borrowers a
corresponding amount. Agent will promptly notify Borrowers of its receipt of any
such notice from a Lender. If such amount is made available to Agent on a date
after such next Settlement Date, such Lender shall pay to Agent on demand an
amount equal to the product of (i) the daily average Federal Funds Rate
(computed on the basis of a year of 360 days) during such period as quoted by
Agent, times (ii) such amount, times (iii) the number of days from and including
such Settlement Date to the date on which such amount becomes immediately
available to Agent. A certificate of Agent submitted to any Lender with respect
to any amounts owing under this paragraph (e) shall be conclusive, in the
absence of manifest error. If such amount is not in fact made available to Agent
by such Lender within three (3) Business Days after such Settlement Date, Agent
shall be entitled to recover such an amount, with interest thereon at the rate
per annum then applicable to such Revolving Advances hereunder, on demand from
Borrowers; PROVIDED, HOWEVER, that Agent's right to such recovery shall not
prejudice or otherwise adversely affect Borrowers' rights (if any) against such
Lender.
2.14. INTENTIONALLY OMITTED.
2.15. USE OF PROCEEDS. Borrowers shall apply the proceeds of
Advances to (i) repay on the Closing Date existing indebtedness owed to SunTrust
Bank, South Florida, N.A., (ii) pay
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fees and expenses relating to this transaction, (iii) make Permitted
Acquisitions and Permitted Investments subject to the limitations set forth in
Section 2.1(b) hereof and (iv) provide for their working capital needs.
2.16. DEFAULTING LENDER.
(a) Notwithstanding anything to the contrary contained herein,
in the event any Lender (x) has refused (which refusal constitutes a breach by
such Lender of its obligations under this Agreement) to make available its
portion of any Advance or (y) notifies either Agent or Borrowing Agent that it
does not intend to make available its portion of any Advance (if the actual
refusal would constitute a breach by such Lender of its obligations under this
Agreement) (each, a "Lender Default"), all rights and obligations hereunder of
such Lender (a "Defaulting Lender") as to which a Lender Default is in effect
and of the other parties hereto shall be modified to the extent of the express
provisions of this Section 2.16 while such Lender Default remains in effect.
(b) Advances shall be incurred pro rata from Lenders (the
"Non-Defaulting Lenders") which are not Defaulting Lenders based on their
respective Commitment Percentages, and no Commitment Percentage of any Lender or
any pro rata share of any Advances required to be advanced by any Lender shall
be increased as a result of such Lender Default. Amounts received in respect of
principal of any type of Advances shall be applied to reduce the applicable
Advances of each Lender pro rata based on the aggregate of the outstanding
Advances of that type of all Lenders at the time of such application; provided,
that, such amount shall not be applied to any Advances of a Defaulting Lender at
any time when, and to the extent that, the aggregate amount of Advances of any
Non-Defaulting Lender exceeds such Non-Defaulting Lender's Commitment Percentage
of all Advances then outstanding.
(c) A Defaulting Lender shall not be entitled to give
instructions to Agent or to approve, disapprove, consent to or vote on any
matters relating to this Agreement and the Other Documents. All amendments,
waivers and other modifications of this Agreement and the Other Documents may be
made without regard to a Defaulting Lender and, for purposes of the definition
of "Required Lenders", a Defaulting Lender shall be deemed not to be a Lender
and not to have Advances outstanding.
(d) Other than as expressly set forth in this Section 2.16, the
rights and obligations of a Defaulting Lender (including the obligation to
indemnify Agent) and the other parties hereto shall remain unchanged. Nothing in
this Section 2.16 shall be deemed to release any Defaulting Lender from its
obligations under this Agreement and the Other Documents, shall alter such
obligations, shall operate as a waiver of any default by such Defaulting Lender
hereunder, or shall prejudice any rights which any Borrower, Agent or any Lender
may have against
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any Defaulting Lender as a result of any default by such Defaulting Lender
hereunder.
(e) In the event a Defaulting Lender retroactively cures to the
satisfaction of Agent the breach which caused a Lender to become a Defaulting
Lender, such Defaulting Lender shall no longer be a Defaulting Lender and shall
be treated as a Lender under this Agreement.
III. INTEREST AND FEES.
3.1. INTEREST. Interest on Revolving Advances shall be payable in
arrears on the first day of each month with respect to Domestic Rate Loans and,
with respect to Eurodollar Rate Loans, at the end of each Interest Period.
Interest charges shall be computed at a rate per annum equal to the applicable
Revolving Interest Rate. Whenever, subsequent to the date of this Agreement, the
Alternate Base Rate is increased or decreased, the applicable Revolving Interest
Rate for Domestic Rate Loans shall be similarly changed without notice or demand
of any kind by an amount equal to the amount of such change in the Alternate
Base Rate during the time such change or changes remain in effect. The
Eurodollar Rate shall be adjusted with respect to Eurodollar Rate Loans without
notice or demand of any kind on the effective date of any change in the Reserve
Percentage as of such effective date. Upon and after the occurrence of an Event
of Default, and during the continuation thereof, (i) the Obligations shall bear
interest at the applicable Revolving Interest Rate plus two (2%) percent per
annum (the "Default Rate").
3.2. LETTER OF CREDIT FEES.
Borrowers shall pay (x) to Agent, for the benefit of Lenders,
fees for each Letter of Credit for the period from and excluding the date of
issuance of same to and including the date of expiration or termination, equal
to the average daily face amount of each outstanding Letter of Credit multiplied
by one and one-half percent (1.50%) per annum, such fees to be calculated on the
basis of a 360-day year for the actual number of days elapsed and to be payable
monthly in arrears on the first day of each month and on the last day of the
Term and (y) to the Issuer, any and all fees and expenses as agreed upon by the
Issuer and the Borrowing Agent in connection with any Letter of Credit,
including, without limitation, in connection with the opening, amendment or
renewal of any such Letter of Credit and shall reimburse Agent for any and all
fees and expenses, if any, paid by Agent to the Issuer (all of the foregoing
fees, the "Letter of Credit Fees"). All such charges shall be deemed earned in
full on the date when the same are due and payable hereunder and shall not be
subject to rebate or proration upon the termination of this Agreement for any
reason. Any such charge in effect at the time of a particular transaction shall
be the charge for that transaction, notwithstanding any subsequent change in the
Issuer's prevailing charges for that type of
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transaction. All Letter of Credit Fees payable hereunder shall be deemed earned
in full on the date when the same are due and payable hereunder and shall not be
subject to rebate or proration upon the termination of this Agreement for any
reason.
3.3. (a) CLOSING FEE. Upon the execution of this Agreement, Borrowers
shall pay to Agent for the ratable benefit of Lenders a closing fee of $187,500
less that portion of the commitment fee of $75,000 and the deposit fee of
$30,000 heretofore paid by Borrowers to Agent remaining after application of
such fees to out of pocket expenses.
(b) FACILITY FEE. If, for any fiscal quarter during the Term,
the average daily unpaid balance of Advances for each day of such quarter does
not equal the Maximum Revolving Advance Amount, then Borrowers shall pay to
Agent for the ratable benefit of Lenders a fee at a rate equal to three eighths
of one percent (.375%) per annum on the amount by which the Maximum Revolving
Advance Amount exceeds such average daily unpaid balance. Such fee shall be
payable to Agent in arrears on the first day of each fiscal quarter.
3.4. (a) COLLATERAL EVALUATION FEE. Borrowers shall pay Agent a
collateral evaluation fee equal to $2,500 per month commencing on the first day
of the month following the Closing Date and on the first day of each month
thereafter during the Term. The collateral evaluation fee shall be deemed earned
in full on the date when same is due and payable hereunder and shall not be
subject to rebate or proration upon termination of this Agreement for any
reason.
(b) COLLATERAL MONITORING FEE. Borrowers shall pay to Agent on
the first day of each month following any month in which Agent performs any
collateral monitoring - namely any field examination, collateral analysis or
other business analysis, the need for which is to be determined by Agent and
which monitoring is undertaken by Agent or for Agent's benefit a collateral
monitoring fee in an amount equal to $600 per day for each person employed to
perform such monitoring, plus all reasonable out-of-pocket costs and
disbursements incurred by Agent in the performance of such examination or
analysis, PROVIDED, HOWEVER, that absent the occurrence of an Event of Default,
Borrowers shall be obligated to pay for no more than five (5) such collateral
monitorings performed by Agent or for Agent's benefit in any fiscal year.
3.5. COMPUTATION OF INTEREST AND FEES. Interest and fees hereunder
shall be computed on the basis of a year of 360 days and for the actual number
of days elapsed. If any payment to be made hereunder becomes due and payable on
a day other than a Business Day, the due date thereof shall be extended to the
next succeeding Business Day and interest thereon shall be payable at the
applicable Revolving Interest Rate for Domestic Rate Loans during such
extension.
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3.6. MAXIMUM CHARGES. In no event whatsoever shall interest and other
charges charged hereunder exceed the highest rate permissible under law. In the
event interest and other charges as computed hereunder would otherwise exceed
the highest rate permitted under law, such excess amount shall be first applied
to any unpaid principal balance owed by Borrowers, and if the then remaining
excess amount is greater than the previously unpaid principal balance, Lenders
shall promptly refund such excess amount to Borrowers and the provisions hereof
shall be deemed amended to provide for such permissible rate.
3.7. INCREASED COSTS. In the event that any applicable law, treaty or
governmental regulation, or any change therein or in the interpretation or
application thereof, or compliance by any Lender (for purposes of this Section
3.7, the term "Lender" shall include Agent or any Lender and any corporation or
bank controlling Agent or any Lender) and the office or branch where Agent or
any Lender (as so defined) makes or maintains any Eurodollar Rate Loans with any
request or directive (whether or not having the force of law) from any central
bank or other financial, monetary or other authority, shall:
(a) subject Agent or any Lender to any tax of any kind
whatsoever with respect to this Agreement or any Other Document or change the
basis of taxation of payments to Agent or any Lender of principal, fees,
interest or any other amount payable hereunder or under any Other Documents
(except for changes in the rate of tax on the overall net income of Agent or any
Lender by the jurisdictions in which it maintains its principal office);
(b) impose, modify or hold applicable any reserve, special
deposit, assessment or similar requirement against assets held by, or deposits
in or for the account of, advances or loans by, or other credit extended by, any
office of Agent or any Lender, including (without limitation) pursuant to
Regulation D of the Board of Governors of the Federal Reserve System; or
(c) impose on Agent or any Lender or the London interbank
Eurodollar market any other condition with respect to this Agreement or any
Other Document;
and the result of any of the foregoing is to increase the cost to Agent or any
Lender of making, renewing or maintaining its Advances hereunder by an amount
that Agent or such Lender deems to be material or to reduce the amount of any
payment (whether of principal, interest or otherwise) in respect of any of the
Advances by an amount that Agent or such Lender deems to be material, then, in
any case Borrowers shall promptly pay Agent or such Lender, upon its demand,
such additional amount as will compensate Agent or such Lender for such
additional cost or such reduction, as the case may be, provided that the
foregoing shall not apply to increased costs which are reflected in the
Eurodollar Rate, as the case may be. Agent or such Lender shall certify the
amount of such additional cost or reduced amount to
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Borrowers, and such certification shall be conclusive absent manifest error.
3.8. BASIS FOR DETERMINING INTEREST RATE INADEQUATE OR
UNFAIR. In the event that Agent or any Lender shall have determined that:
(a) reasonable means do not exist for ascertaining the
Eurodollar Rate applicable pursuant to Section 2.2 hereof for any Interest
Period; or
(b) Dollar deposits in the relevant amount and for the relevant
maturity are not available in the London interbank Eurodollar market, with
respect to an outstanding Eurodollar Rate Loan, a proposed Eurodollar Rate Loan,
or a proposed conversion of a Domestic Rate Loan into a Eurodollar Rate Loan,
then Agent shall give Borrowing Agent prompt written, telephonic or telegraphic
notice of such determination. If such notice is given, (i) any such requested
Eurodollar Rate Loan shall be made as a Domestic Rate Loan, unless Borrowing
Agent shall notify Agent no later than 10:00 a.m. (New York City time) two (2)
Business Days prior to the date of such proposed borrowing, that its request for
such borrowing shall be cancelled or made as an unaffected type of Eurodollar
Rate Loan, (ii) any Domestic Rate Loan or Eurodollar Rate Loan which was to have
been converted to an affected type of Eurodollar Rate Loan shall be continued as
or converted into a Domestic Rate Loan, or, if Borrowing Agent shall notify
Agent, no later than 10:00 a.m. (New York City time) two (2) Business Days prior
to the proposed conversion, shall be maintained as an unaffected type of
Eurodollar Rate Loan, and (iii) any outstanding affected Eurodollar Rate Loans
shall be converted into a Domestic Rate Loan, or, if Borrowing Agent shall
notify Agent, no later than 10:00 a.m. (New York City time) two (2) Business
Days prior to the last Business Day of the then current Interest Period
applicable to such affected Eurodollar Rate Loan, shall be converted into an
unaffected type of Eurodollar Rate Loan, on the last Business Day of the then
current Interest Period for such affected Eurodollar Rate Loans. Until such
notice has been withdrawn, Lenders shall have no obligation to make an affected
type of Eurodollar Rate Loan or maintain outstanding affected Eurodollar Rate
Loans and no Borrower shall have the right to convert a Domestic Rate Loan or an
unaffected type of Eurodollar Rate Loan into an affected type of Eurodollar Rate
Loan.
3.9. CAPITAL ADEQUACY.
(a) In the event that Agent or any Lender shall have determined
that any applicable law, rule, regulation or guideline regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by Agent or any Lender (for purposes of this Section 3.9, the
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term "Lender" shall include Agent or any Lender and any corporation or bank
controlling Agent or any Lender) and the office or branch where Agent or any
Lender (as so defined) makes or maintains any Eurodollar Rate Loans with any
request or directive regarding capital adequacy (whether or not having the force
of law) of any such authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on Agent or any Lender's capital
as a consequence of its obligations hereunder to a level below that which Agent
or such Lender could have achieved but for such adoption, change or compliance
(taking into consideration Agent's and each Lender's policies with respect to
capital adequacy) by an amount deemed by Agent or any Lender to be material,
then, from time to time, Borrowers shall pay upon demand to Agent or such Lender
such additional amount or amounts as will compensate Agent or such Lender for
such reduction. In determining such amount or amounts, Agent or such Lender may
use any reasonable averaging or attribution methods. The protection of this
Section 3.9 shall be available to Agent and each Lender regardless of any
possible contention of invalidity or inapplicability with respect to the
applicable law, regulation or condition.
(b) A certificate of Agent or such Lender setting forth such
amount or amounts as shall be necessary to compensate Agent or such Lender with
respect to Section 3.9(a) hereof when delivered to Borrowers shall be conclusive
absent manifest error.
IV. COLLATERAL: GENERAL TERMS
4.1. SECURITY INTEREST IN THE COLLATERAL. To secure the prompt payment
and performance to Agent and each Lender of the Obligations, each Borrower
hereby assigns, pledges and grants to Agent for the ratable benefit of each
Lender a continuing security interest in and to all of its Collateral, whether
now owned or existing or hereafter acquired or arising and wheresoever located.
Each Borrower shall xxxx its books and records as may be necessary or
appropriate to evidence, protect and perfect Agent's security interest and shall
cause its financial statements to reflect such security interest.
4.2. PERFECTION OF SECURITY INTEREST. Each Borrower shall take all
action that may be necessary or desirable, or that Agent may reasonably request,
so as at all times to maintain the validity, perfection, enforceability and
priority of Agent's security interest in the Collateral or to enable Agent to
protect, exercise or enforce its rights hereunder and in the Collateral,
including, but not limited to, (i) immediately discharging all Liens other than
Permitted Encumbrances, (ii) obtaining landlords' or mortgagees' lien waivers,
(iii) delivering to Agent, endorsed or accompanied by such instruments of
assignment as Agent may specify, and stamping or marking, in such manner as
Agent may specify, any and all chattel paper, instruments, letters of credits
and advices thereof and documents evidencing or forming a part of the
Collateral, (iv) entering
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into warehousing, lockbox and other custodial arrangements satisfactory to
Agent, (v) obtaining approval of the FCC or PRTRB for any action or transaction
contemplated by this Agreement which is required by law, and specifically,
without limitation, preparing, signing and filing with the FCC or PRTRB, as
applicable, the assignor's or transferor's portion of any application or
applications for consent to the assignment of a License necessary or appropriate
under the FCC Rules or any law, statute, rule, regulation or ordinance of any
Governmental Body and (vi) executing and delivering financing statements,
instruments of pledge, mortgages, notices and assignments, in each case in form
and substance satisfactory to Agent, relating to the creation, validity,
perfection, maintenance or continuation of Agent's security interest under the
Uniform Commercial Code or other applicable law. Agent is hereby authorized to
file financing statements signed by Agent instead of Borrower in accordance with
Section 9-402(2) of Uniform Commercial Code as adopted in the State of New York.
All reasonable out-of-pocket charges, expenses and fees Agent may incur in doing
any of the foregoing, and any local taxes relating thereto, shall be charged to
Borrowers' Account as a Revolving Advance of a Domestic Rate Loan and added to
the Obligations, or, at Agent's option, shall be paid to Agent for the ratable
benefit of Lenders immediately upon demand.
4.3. DISPOSITION OF COLLATERAL. Each Borrower will safeguard and
protect all Collateral for Agent's general account and make no disposition
thereof whether by sale, lease or otherwise.
4.4. PRESERVATION OF COLLATERAL. Following the occurrence of a Default
or Event of Default and after the expiration of any applicable cure period, in
addition to the rights and remedies set forth in Section 11.1 hereof, Agent: (a)
may at any time take such steps as Agent deems necessary to protect Agent's
interest in and to preserve the Collateral, including the hiring of such
security guards or the placing of other security protection measures as Agent
may deem appropriate; (b) may employ and maintain at any of any Borrower's
premises a custodian who shall have full authority to do all acts necessary to
protect Agent's interests in the Collateral; and (c) shall have, and is hereby
granted, a right of ingress and egress to the places where the Collateral is
located, and may proceed over and through any of Borrower's owned or leased
property. Each Borrower shall cooperate fully with all of Agent's efforts to
preserve the Collateral and will take such actions to preserve the Collateral as
Agent may direct. All of Agent's reasonable out-of-pocket expenses of preserving
the Collateral, including any reasonable out-of-pocket expenses relating to the
bonding of a custodian, shall be charged to Borrowers' Account as a Revolving
Advance of a Domestic Rate Loan and added to the Obligations.
4.5. OWNERSHIP OF COLLATERAL. With respect to the Collateral, at
the time the Collateral becomes subject to Agent's
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security interest: (a) each Borrower shall be the sole owner of and fully
authorized and able to sell, transfer, pledge and/or grant a first priority
security interest in each and every item of its respective Collateral to Agent
(other than any Collateral which secures the SBA Loan in which STSJ shall grant
to Agent for the ratable benefit of Lenders a second priority security interest
therein); and, except for Permitted Encumbrances the Collateral shall be free
and clear of all Liens and encumbrances whatsoever; (b) each document and
agreement executed by each Borrower or delivered to Agent or any Lender in
connection with this Agreement shall be true and correct in all respects; and
(c) all signatures and endorsements of each Borrower that appear on such
documents and agreements shall be genuine and each Borrower shall have full
capacity to execute same.
4.6. DEFENSE OF AGENT'S AND LENDERS' INTERESTS. Until (a) payment and
performance in full of all of the Obligations and (b) termination of this
Agreement, Agent's interests in the Collateral shall continue in full force and
effect. During such period no Borrower shall, without Agent's prior written
consent, pledge, sell, assign, transfer, create or suffer to exist a Lien upon
or encumber or allow or suffer to be encumbered in any way except for Permitted
Encumbrances, any part of the Collateral. Each Borrower shall defend Agent's
interests in the Collateral against any and all Persons whatsoever. At any time
following demand by Agent for payment of all Obligations, Agent shall have the
right to take possession of the indicia of the Collateral and the Collateral in
whatever physical form contained, including without limitation: labels,
stationery, documents, instruments and advertising materials. If Agent exercises
this right to take possession of the Collateral, Borrowers shall, upon demand,
assemble it in the best manner possible and make it available to Agent at a
place reasonably convenient to Agent. In addition, with respect to all
Collateral, Agent and Lenders shall be entitled to all of the rights and
remedies set forth herein and further provided by the Uniform Commercial Code or
other applicable law. Each Borrower shall, and Agent may, at its option,
instruct all Persons holding cash, checks, documents or instruments in which
Agent holds a security interest to deliver same to Agent and/or subject to
Agent's order and if they shall come into any Borrower's possession, they, and
each of them, shall be held by such Borrower in trust as Agent's trustee, and
such Borrower will immediately deliver them to Agent in their original form
together with any necessary endorsement.
4.7. BOOKS AND RECORDS. Each Borrower shall (a) keep proper books of
record and account in which full, true and correct entries will be made of all
dealings or transactions of or in relation to its business and affairs; (b) set
up on its books accruals with respect to all taxes, assessments, charges, levies
and claims; and (c) on a reasonably current basis set up on its books, from its
earnings, allowances against doubtful Receivables, advances and investments and
all other proper accruals (including without limitation by reason of
enumeration, accruals for premiums, if any, due on required payments and
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accruals for depreciation, obsolescence, or amortization of properties), which
should be set aside from such earnings in connection with its busine All
determinations pursuant to this subsection shall be made in accordance with, or
as required by, GAAP consistently applied in the opinion of such independent
public accountant as shall then be regularly engaged by Borrowers.
4.8. FINANCIAL DISCLOSURE. Each Borrower hereby irrevocably authorizes
and directs all accountants and auditors employed by such Borrower at any time
during the Term to exhibit and deliver to Agent and each Lender copies of any of
any Borrower's financial statements, trial balances or other accounting records
of any sort in the accountant's or auditor's possession, and to disclose to
Agent and each Lender any information such accountants may have concerning such
Borrower's financial status and business operations. Each Borrower hereby
authorizes all federal, state and municipal authorities to furnish to Agent and
each Lender copies of reports or examinations relating to such Borrower, whether
made by such Borrower or otherwise; however, Agent and each Lender will attempt
to obtain such information or materials directly from such Borrower prior to
obtaining such information or materials from such accountants or such
authorities. Agent acknowledges that Borrowers have been advised by Ernst &
Young LLP, Borrowers' accountants as of the Closing Date, that Ernst & Young LLP
will not provide Agent or any Lender with the information set forth in this
Section 4.8. This acknowledgement has no effect whatsoever on any Borrower's
obligation to comply with the requirements set forth in this Section 4.8 during
the Term.
4.9. COMPLIANCE WITH LAWS. Each Borrower shall comply with all acts,
rules, regulations and orders of any legislative, administrative or judicial
body or official applicable to its respective Collateral or any part thereof or
to the operation of such Borrower's business the non-compliance with which could
reasonably be expected to have a Material Adverse Effect. Each Borrower may,
however, contest or dispute any acts, rules, regulations, orders and directions
of those bodies or officials in any reasonable manner, provided that any related
Lien is inchoate or stayed and sufficient reserves are established to the
reasonable satisfaction of Agent to protect Agent's Lien on or security interest
in the Collateral. The assets of Borrowers at all times shall be maintained in
accordance with the requirements of all insurance carriers which provide
insurance with respect to the assets of Borrowers so that such insurance shall
remain in full force and effect.
4.10. INSPECTION OF PREMISES. At all reasonable times Agent and each
Lender shall have full access to and the right to audit, check, inspect and make
abstracts and copies from each Borrower's books, records, audits, correspondence
and all other papers relating to the Collateral and the operation of each
Borrower's business. Agent, any Lender and their agents may enter upon any of
Borrower's premises at any time during business
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hours and at any other reasonable time, and from time to time, for the purpose
of inspecting the Collateral and any and all records pertaining thereto and the
operation of such Borrower's business.
4.11. INSURANCE. Each Borrower shall bear the full risk of any loss of
any nature whatsoever with respect to the Collateral. At each Borrower's own
cost and expense in amounts and with carriers acceptable to Agent, each Borrower
shall (a) keep all its insurable properties and properties in which such
Borrower has an interest insured against the hazards of fire, flood, sprinkler
leakage, windstorm, those hazards covered by extended coverage insurance and
such other hazards, and for such amounts, as is customary in the case of
companies engaged in businesses similar to such Borrower's including, without
limitation, business interruption insurance; (b) maintain a bond in such
amounts as is customary in the case of companies engaged in businesses similar
to such Borrower insuring against larceny, embezzlement or other criminal
misappropriation of insured's officers and employees who may either singly or
jointly with others at any time have access to the assets or funds of such
Borrower either directly or through authority to draw upon such funds or to
direct generally the disposition of such assets; (c) maintain public and product
liability insurance against claims for personal injury, death or property damage
suffered by others; (d) maintain all such worker's compensation or similar
insurance as may be required under the laws of any state or jurisdiction in
which such Borrower is engaged in business; (e) furnish Agent with (i) copies of
all policies and evidence of the maintenance of such policies by the renewal
thereof at least thirty (30) days before any expiration date, and (ii)
appropriate loss payable endorsements in form and substance satisfactory to
Agent, naming Agent as a co-insured and loss payee as its interests may appear
with respect to all insurance coverage referred to in clauses (a) and (c) above,
and providing (A) that all proceeds thereunder shall be payable to Agent, (B) no
such insurance shall be affected by any act or neglect of the insured or owner
of the property described in such policy, and (C) that such policy and loss
payable clauses may not be cancelled, amended or terminated unless at least
thirty (30) days' prior written notice is given to Agent. In the event of any
loss thereunder, the carriers named therein hereby are directed by Agent and the
applicable Borrower to make payment for such loss to Agent and not to such
Borrower and Agent jointly. If any insurance losses are paid by check, draft or
other instrument payable to any Borrower and Agent jointly, Agent may endorse
such Borrower's name thereon and do such other things as Agent may deem
advisable to reduce the same to cash. Agent is hereby authorized to adjust and
compromise claims under insurance coverage referred to in clauses (a) and (c)
above. All loss recoveries received by Agent upon any such insurance may be
applied to the Obligations, in such order as Agent in its sole discretion shall
determine. Any surplus shall be paid by Agent to Borrowers or applied as may be
otherwise required by law. Any deficiency thereon shall be paid by Borrowers to
Agent, on demand.
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4.12. FAILURE TO PAY INSURANCE. If any Borrower fails to obtain
insurance as hereinabove provided, or to keep the same in force, Agent, if Agent
so elects, may obtain such insurance and pay the premium therefor on behalf of
Borrower, and charge Borrowers' Account therefor as a Revolving Advance of a
Domestic Rate Loan and such expenses so paid shall be part of the Obligations.
4.13. PAYMENT OF TAXES. Each Borrower will pay, when due, all taxes,
assessments and other Charges lawfully levied or assessed upon such Borrower or
any of the Collateral including, without limitation, real and personal property
taxes, assessments and charges and all franchise, income, employment, social
security benefits, withholding, and sales taxes. If any tax by any governmental
authority is or may be imposed on or as a result of any transaction between any
Borrower and Agent or any Lender which Agent or any Lender may be required to
withhold or pay or if any taxes, assessments, or other Charges remain unpaid
after the date fixed for their payment, or if any claim shall be made which, in
Agent's or any Lender's opinion, may possibly create a valid Lien on the
Collateral, Agent may without notice to Borrowers pay the taxes, assessments or
other Charges and each Borrower hereby indemnifies and holds Agent and each
Lender harmless in respect thereof. Agent will not pay any taxes, assessments or
Charges to the extent that any Borrower has contested or disputed those taxes,
assessments or Charges in good faith, by expeditious protest, administrative or
judicial appeal or similar proceeding provided that any related tax lien is
stayed and sufficient reserves are established to the reasonable satisfaction of
Agent to protect Agent's security interest in or Lien on the Collateral. The
amount of any payment by Agent under this Section 4.13 shall be charged to
Borrowers' Account as a Revolving Advance of a Domestic Rate Loan and added to
the Obligations and, until Borrowers shall furnish Agent with an indemnity
therefor (or supply Agent with evidence satisfactory to Agent that due provision
for the payment thereof has been made), Agent may hold without interest any
balance standing to Borrowers' credit and Agent shall retain its security
interest in any and all Collateral held by Agent.
4.14. PAYMENT OF LEASEHOLD OBLIGATIONS. Each Borrower shall at all
times pay, when and as due following any applicable cure period contained in any
lease, its rental obligations under all leases under which it is a tenant, and
shall otherwise comply, in all material respects, with all other terms of such
leases and keep them in full force and effect and, at Agent's request will
provide evidence of having done so other than rental obligations which are being
contested in good faith by any Borrower and such Borrower has established
reserves in an amount satisfactory to Agent.
4.15. RECEIVABLES.
(a) NATURE OF RECEIVABLES. Each of the Receivables shall be
a bona fide and valid account representing a
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bona fide indebtedness incurred by the Customer therein named, for a fixed sum,
including as set forth in the invoice relating thereto to the extent such
Receivable is invoiced (provided immaterial or unintentional invoice errors
shall not be deemed to be a breach hereof) with respect to an absolute sale or
lease and delivery of goods upon stated terms of a Borrower, or work, labor or
services theretofore rendered by a Borrower as of the date each Receivable is
created. Same shall be due and owing in accordance with the applicable
Borrower's standard terms of sale without dispute, setoff or counterclaim except
as may be stated on the accounts receivable schedules delivered by Borrowers to
Agent.
(b) SOLVENCY OF CUSTOMERS. Each Customer, to the best of each
Borrower's knowledge, as of the date each Receivable is created, is and will be
solvent and able to pay all Receivables on which the Customer is obligated in
full when due or with respect to such Customers of any Borrower who are not
solvent such Borrower has set up on its books and in its financial records bad
debt reserves adequate to cover such Receivables.
(c) LOCATIONS OF BORROWER. Each Borrower's chief executive
office is located at the addresses set forth on SCHEDULE 4.15(C) hereto. Until
written notice is given to Agent by Borrowing Agent of any other office at which
any Borrower keeps its records pertaining to Receivables, all such records shall
be kept at the executive office or at 000 X.X. Xxxxx Xxxxxx, Xxxx Xxxxxxxxxx,
Xxxxxxx.
(d) COLLECTION OF RECEIVABLES. Until any Borrower's authority
to do so is terminated by Agent (which notice Agent may give at any time
following the occurrence of an Event of Default or a Default or when Agent in
its reasonable discretion deems it to be in Lenders' best interest to do so),
each Borrower will, at such Borrower's sole cost and expense, but on Agent's
behalf and for Agent's account, collect as Agent's property and in trust for
Agent all amounts received on Receivables, and shall not commingle such
collections with any Borrower's funds or use the same except to pay Obligations.
Each Borrower shall, upon request, deliver to Agent, or deposit in the Blocked
Account, in original form and on the date of receipt thereof, all checks,
drafts, notes, money orders, acceptances, cash and other evidences of
Indebtedness.
(e) NOTIFICATION OF ASSIGNMENT OF RECEIVABLES. At any time
following the occurrence of an Event of Default or a Default, Agent shall have
the right to send notice of the assignment of, and Agent's security interest in,
the Receivables to any and all Customers or any third party holding or otherwise
concerned with any of the Collateral. Thereafter, Agent shall have the sole
right to collect the Receivables, take possession of the Collateral, or both.
Agent's actual collection expenses, including, but not limited to, stationery
and postage, telephone and telegraph, secretarial and clerical expenses and the
salaries
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of any collection personnel used for collection, may be charged to Borrowers'
Account and added to the Obligations.
(f) POWER OF AGENT TO ACT ON BORROWERS' BEHALF. Agent shall
have the right to receive, endorse, assign and/or deliver in the name of Agent
or any Borrower any and all checks, drafts and other instruments for the payment
of money relating to the Receivables, and each Borrower hereby waives notice of
presentment, protest and non-payment of any instrument so endorsed. Each
Borrower hereby constitutes Agent or Agent's designee as such Borrower's
attorney with power (i) to endorse such Borrower's name upon any notes,
acceptances, checks, drafts, money orders or other evidences of payment or
Collateral; (ii) to sign such Borrower's name on any invoice or xxxx of lading
relating to any of the Receivables, drafts against Customers, assignments and
verifications of Receivables; (iii) to send verifications of Receivables to any
Customer; (iv) to sign such Borrower's name on all financing statements or any
other documents or instruments deemed necessary or appropriate by Agent to
preserve, protect, or perfect Agent's interest in the Collateral and to file
same; (v) to demand payment of the Receivables; (vi) to enforce payment of the
Receivables by legal proceedings or otherwise; (vii) to exercise all of
Borrowers' rights and remedies with respect to the collection of the Receivables
and any other Collateral; (viii) to settle, adjust, compromise, extend or renew
the Receivables; (ix) to settle, adjust or compromise any legal proceedings
brought to collect Receivables; (x) to prepare, file and sign such Borrower's
name on a proof of claim in bankruptcy or similar document against any Customer;
(xi) to prepare, file and sign such Borrower's name on any notice of Lien,
assignment or satisfaction of Lien or similar document in connection with the
Receivables; and (xii) to do all other acts and things necessary to carry out
this Agreement. All acts of said attorney or designee are hereby ratified and
approved, and said attorney or designee shall not be liable for any acts of
omission or commission nor for any error of judgment or mistake of fact or of
law, unless done maliciously or with gross (not mere) negligence; this power
being coupled with an interest is irrevocable while any of the Obligations
remain unpaid. Agent shall have the right at any time following the occurrence
of an Event of Default or Default, to change the address for delivery of mail
addressed to any Borrower to such address as Agent may designate and to receive,
open and dispose of all mail addressed to any Borrower.
(g) NO LIABILITY. Neither Agent nor any Lender shall, under any
circumstances or in any event whatsoever, have any liability for any error or
omission or delay of any kind occurring in the settlement, collection or payment
of any of the Receivables or any instrument received in payment thereof, or for
any damage resulting therefrom, except to the extent that any liability or
damage arises out of the willful misconduct or gross (not mere) negligence of
Agent or such Lender. Following the occurrence of an Event of Default or Default
Agent may, without notice or consent from any Borrower, xxx upon or otherwise
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collect, extend the time of payment of, compromise or settle for cash, credit or
upon any terms any of the Receivables or any other securities, instruments or
insurance applicable thereto and/or release any obligor thereof.
(h) ESTABLISHMENT OF A LOCKBOX ACCOUNT, DOMINION ACCOUNT. All
proceeds of Collateral shall, at the direction of Agent, be deposited by
Borrowers into a lockbox account, dominion account or such other "blocked
account" ("Blocked Accounts") as Agent may require pursuant to an arrangement
with such bank as may be selected by Borrowers and be acceptable to Agent.
Borrowers shall issue to any such bank, an irrevocable letter of instruction
directing said bank to transfer such funds so deposited to Agent, either to any
account maintained by Agent at said bank or by wire transfer to appropriate
account(s) of Agent. All funds deposited in such "blocked account" shall
immediately become the property of Agent and Borrowers shall obtain the
agreement by such bank to waive any offset rights against the funds so
deposited. Neither Agent nor any Lender assumes any responsibility for such
"blocked account" arrangement, including without limitation, any claim of accord
and satisfaction or release with respect to deposits accepted by any bank
thereunder. Alternatively, Agent may establish depository accounts ("Depository
Accounts") in the name of Agent at a bank or banks for the deposit of such funds
and Borrowers shall deposit all proceeds of Collateral or cause same to be
deposited, in kind, in such Depository Accounts of Agent in lieu of depositing
same to the Blocked Accounts.
(i) ADJUSTMENTS. No Borrower will, without Agent's consent,
compromise or adjust any Receivables (or extend the time for payment thereof) or
grant any additional discounts, allowances or credits thereon except for those
compromises, adjustments, returns, discounts, credits and allowances as have
been heretofore customary in the business of such Borrower.
4.16. INTENTIONALLY OMITTED.
4.17. MAINTENANCE OF PROPERTIES. Each Borrower will cause all material
properties owned by such Borrower or used or held for use in the conduct of its
business to be maintained and kept in good condition, repair and working order
and supplied with all necessary Equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of such Borrower may be necessary so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times.
4.18. EXCULPATION OF LIABILITY. Nothing herein contained shall be
construed to constitute Agent or any Lender as any Borrower's agent for any
purpose whatsoever, nor shall Agent or any Lender be responsible or liable for
any shortage, discrepancy, damage, loss or destruction of any part of the
Collateral wherever the same may be located and regardless of the
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cause thereof, except to the extent that any liability arises out of the willful
misconduct or gross (not mere) negligence of Agent or such Lender. Neither Agent
nor any Lender, whether by anything herein or in any assignment or otherwise,
assume any of any Borrower's obligations under any contract or agreement
assigned to Agent or such Lender, and neither Agent nor any Lender shall be
responsible in any way for the performance by any Borrower of any of the terms
and conditions thereof.
4.19. ENVIRONMENTAL MATTERS. (a) Borrowers shall ensure that the
Real Property remains in compliance with all Environmental Laws and they shall
not place or permit to be placed any Hazardous Substances on any Real Property
except as not prohibited by applicable law or appropriate governmental
authorities.
(b) Borrowers shall (i) employ in connection with the use of
the Real Property appropriate technology necessary to maintain compliance with
any applicable Environmental Laws and (ii) dispose of any and all Hazardous
Waste generated at the Real Property only at facilities and with carriers that
maintain valid permits under RCRA and any other applicable Environmental Laws.
Borrowers shall use their best efforts to obtain certificates of disposal, such
as hazardous waste manifest receipts, from all treatment, transport, storage or
disposal facilities or operators employed by Borrowers in connection with the
transport or disposal of any Hazardous Waste generated at the Real Property.
(c) In the event any Borrower obtains, gives or receives notice
of any Release or threat of Release of a reportable quantity of any Hazardous
Substances at the Real Property (any such event being hereinafter referred to as
a "Hazardous Discharge") or receives any notice of violation, request for
information or notification that it is potentially responsible for investigation
or cleanup of environmental conditions at the Real Property, demand letter or
complaint, order, citation, or other written notice with regard to any Hazardous
Discharge or violation of Environmental Laws affecting the Real Property or any
Borrower's interest therein (any of the foregoing is referred to herein as an
"Environmental Complaint") from any Person, including any state agency
responsible in whole or in part for environmental matters in the state in which
the Real Property is located or the United States Environmental Protection
Agency (any such person or entity hereinafter the "Authority"), then Borrowing
Agent shall, within five (5) Business Days, give written notice of same to Agent
detailing facts and circumstances of which any Borrower is aware giving rise to
the Hazardous Discharge or Environmental Complaint. Such information is to be
provided to allow Agent to protect its security interest, if any, in the Real
Property and is not intended to create nor shall it create any obligation upon
Agent or any Lender with respect thereto.
(d) Borrowers shall promptly forward to Agent copies of any
request for information, notification of potential
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liability, demand letter relating to potential responsibility with respect to
the investigation or cleanup of Hazardous Substances at any other site owned,
operated or used by any Borrower to dispose of Hazardous Substances and shall
continue to forward copies of correspondence between any Borrower and the
Authority regarding such claims to Agent until the claim is settled. Borrowers
shall promptly forward to Agent copies of all documents and reports concerning a
Hazardous Discharge at the Real Property that any Borrower is required to file
under any Environmental Laws. Such information is to be provided solely to allow
Agent to protect Agent's security interest in the Real Property and the
Collateral.
(e) Borrowers shall respond promptly to any Hazardous Discharge
or Environmental Complaint and take all necessary action in order to safeguard
the health of any Person and to avoid subjecting the Collateral or Real Property
to any Lien. If any Borrower shall fail to respond promptly to any Hazardous
Discharge or Environmental Complaint or any Borrower shall fail to comply with
any of the requirements of any Environmental Laws, Agent on behalf of Lenders
may, but without the obligation to do so, for the sole purpose of protecting
Agent's interest in Collateral: (A) give such notices or (B) enter onto the Real
Property (or authorize third parties to enter onto the Real Property) and take
such actions as Agent (or such third parties as directed by Agent) deem
reasonably necessary or advisable, to clean up, remove, mitigate or otherwise
deal with any such Hazardous Discharge or Environmental Complaint. All
reasonable out-of-pocket costs and expenses incurred by Agent and Lenders (or
such third parties) in the exercise of any such rights, including any sums paid
in connection with any judicial or administrative investigation or proceedings,
fines and penalties, together with interest thereon from the date expended at
the Default Rate for Domestic Rate Loans constituting Revolving Advances shall
be paid upon demand by Borrowers, and until paid shall be added to and become a
part of the Obligations secured by the Liens created by the terms of this
Agreement or any other agreement between Agent, any Lender and any Borrower.
(f) Promptly upon the written request of Agent from time to
time, (which request shall only be made by Agent if, in the exercise of Agent's
reasonable judgment, Agent believes that a Hazardous Discharge exists at the
Real Property, a Hazardous Substance has been placed at the Real Property or
that any Borrower is not in compliance with Environmental Laws), Borrowers shall
provide Agent, at Borrowers' expense, with an environmental site assessment or
environmental audit report prepared by an environmental engineering firm
acceptable in the reasonable opinion of Agent, to assess with a reasonable
degree of certainty the existence of a Hazardous Discharge and the potential
costs in connection with abatement, cleanup and removal of any Hazardous
Substances found on, under, at or within the Real Property. Any report or
investigation of such Hazardous Discharge proposed and acceptable to an
appropriate Authority that is charged to oversee the clean-up of such Hazardous
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Discharge shall be acceptable to Agent. If such estimates, individually or in
the aggregate, exceed $100,000, Agent shall have the right to require Borrowers
to post a bond, letter of credit or other security reasonably satisfactory to
Agent to secure payment of these costs and expenses.
(g) Borrowers shall defend and indemnify Agent and Lenders and
hold Agent, Lenders and their respective employees, agents, directors and
officers harmless from and against all loss, liability, damage and expense,
claims, costs, fines and penalties, including attorney's fees, suffered or
incurred by Agent or Lenders under or on account of any Environmental Laws,
including, without limitation, the assertion of any Lien thereunder, with
respect to any Hazardous Discharge, the presence of any Hazardous Substances
affecting the Real Property, whether or not the same originates or emerges from
the Real Property or any contiguous real estate, including any loss of value of
the Real Property as a result of the foregoing except to the extent such loss,
liability, damage and expense is attributable to any Hazardous Discharge
resulting from actions on the part of Agent or any Lender. Borrowers'
obligations under this Section 4.19 shall arise upon the discovery of the
presence of any Hazardous Substances at the Real Property, whether or not any
federal, state, or local environmental agency has taken or threatened any action
in connection with the presence of any Hazardous Substances. Borrowers'
obligation and the indemnifications hereunder shall survive the termination of
this Agreement.
(h) For purposes of Section 4.19 and 5.7, all references to
Real Property shall be deemed to include all of Borrowers' right, title and
interest in and to its owned and leased premises.
4.20. FINANCING STATEMENTS. Except as respects the financing
statements filed by Agent and the financing statements described on SCHEDULE
1.2, no financing statement covering any of the Collateral or any proceeds
thereof is on file in any public office.
V. REPRESENTATIONS AND WARRANTIES.
Each Borrower represents and warrants as follows:
5.1. AUTHORITY. Each Borrower has full power, authority and legal right
to enter into this Agreement and the Other Documents and to perform all its
respective Obligations hereunder and thereunder. The execution, delivery and
performance of this Agreement and of the Other Documents (a) are within such
Borrower's corporate powers, have been duly authorized, are not in contravention
of law or the terms of such Borrower's by-laws, certificate of incorporation or
other applicable documents relating to such Borrower's formation or to the
conduct of such Borrower's business or of any material agreement or undertaking
to which such Borrower is a party or by which such Borrower is
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bound, and (b) will not conflict with nor result in any breach in any of the
provisions of or constitute a default under or result in the creation of any
Lien except Permitted Encumbrances upon any asset of such Borrower under the
provisions of any agreement, charter document, instrument, by-law, or other
instrument to which such Borrower or its property is a party or by which it may
be bound.
5.2. FORMATION AND QUALIFICATION. (a) Each Borrower is duly
incorporated and in good standing under the laws of the state, territorial or
commonwealth listed on SCHEDULE 5.2(A) and is qualified to do business and is in
good standing in the states and commonwealths listed on SCHEDULE 5.2(A) which
constitute all states, territories and commonwealths in which qualification and
good standing are necessary for such Borrower to conduct its business and own
its property and where the failure to so qualify could reasonably be expected to
have a Material Adverse Effect. Each Borrower has delivered to Agent true and
complete copies of its certificate of incorporation and by-laws and will
promptly notify Agent of any amendment or changes thereto.
(b) The only Subsidiaries of each Borrower are listed on
SCHEDULE 5.2(B).
5.3. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties of such Borrower contained in this Agreement and the Other
Documents shall be true at the time of such Borrower's execution of this
Agreement and the Other Documents, and shall survive the execution, delivery and
acceptance thereof by the parties thereto and the closing of the transactions
described therein or related thereto.
5.4. TAX RETURNS. Each Borrower's federal tax identification number is
set forth on SCHEDULE 5.4. Each Borrower has filed all federal, state and local
tax returns and other reports each is required by law to file other than for
fiscal year ending December 31, 1996 and has paid all taxes, assessments, fees
and other governmental charges that are due and payable. Borrowers have been
granted an extension to file their tax returns for fiscal year ending December
31, 1996 and Borrowers will not incur any income tax liability for such fiscal
year. Federal, state and local income tax returns of each Borrower have been
examined and reported upon by the appropriate taxing authority or closed by
applicable statute and satisfied for all fiscal years prior to and including the
fiscal year ending December 31, 1995. The provision for taxes on the books of
each Borrower are adequate for all years not closed by applicable statutes, and
for its current fiscal year, and no Borrower has any knowledge of any deficiency
or additional assessment in connection therewith not provided for on its books.
5.5. FINANCIAL STATEMENTS.
(a) The twelve-month cash flow projections of TresCom on a
consolidated basis for the fiscal year ending
-47-
December 31, 1997, copies of which are annexed hereto as EXHIBIT 5.5(A) (the
"Projections") were prepared by the Chief Financial Officer of Borrowing Agent,
are based on underlying assumptions which provide a reasonable basis for the
projections contained therein and reflect Borrowers' judgment based on present
circumstances of the most likely set of conditions and course of action for the
projected period. Since December 31, 1996, there has been no material change in
the cash flows of TresCom on a consolidated basis as set forth in the
Projections.
(b) The consolidated and consolidating balance sheets of
Borrowers, their Subsidiaries and such other Persons described therein
(including the accounts of all Subsidiaries for the respective periods during
which a subsidiary relationship existed) as of December 31, 1996, and the
related statements of income, changes in stockholder's equity, and changes in
cash flow for the period ended on such date, all accompanied by reports thereon
containing opinions without qualification by independent certified public
accountants, copies of which have been delivered to Agent, have been prepared in
accordance with GAAP, consistently applied (except for changes in application in
which such accountants concur) and present fairly the financial position of the
Borrowers and their Subsidiaries at such date and the results of their
operations for such period. Since December 31, 1996 there has been no material
change in the condition, financial or otherwise, of Borrowers or their
Subsidiaries as shown on the consolidated balance sheet as of such date and no
material change in the aggregate value of machinery, equipment and Real Property
owned by Borrowers and their Subsidiaries, except changes in the ordinary course
of business, none of which individually or in the aggregate has been materially
adverse.
5.6. CORPORATE NAME. Except as set forth on SCHEDULE 5.6, no Borrower
has been known by any other corporate name in the past five years and does not
conduct business under any other name nor has any Borrower been the surviving
corporation of a merger or consolidation or acquired all or substantially all of
the assets of any Person during the preceding five (5) years.
5.7. O.S.H.A. AND ENVIRONMENTAL COMPLIANCE.
(a) Each Borrower has duly complied with, and its facilities,
business, assets, property, leaseholds and Equipment are in compliance in all
material respects with, the provisions of the Federal Occupational Safety and
Health Act, the Environmental Protection Act, RCRA and all other Environmental
Laws, unless such failure to comply could not reasonably be expected to result
in a Material Adverse Effect; there have been no outstanding citations, notices
or orders of non-compliance issued to any Borrower or relating to its business,
assets, property, leaseholds or Equipment under any such laws, rules or
regulations.
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(b) Each Borrower has been issued all required material
federal, state and local licenses, certificates or permits relating to all
applicable Environmental Laws.
(c) (i) There are no visible signs of releases, spills,
discharges, leaks or disposal (collectively referred to as "Releases") of
Hazardous Substances at, upon, under or within any Real Property; (ii) to the
best of Borrowers' knowledge, there are no underground storage tanks or
polychlorinated biphenyls on the Real Property; (iii) the Real Property has not
been used as a treatment, storage or disposal facility of Hazardous Waste by any
Borrower since such Borrower has occupied the Real Property nor, to the best of
such Borrower's knowledge, has the Real Property ever been used as a treatment,
storage or disposal facility of Hazardous Waste; and (iv) to the best of
Borrowers' knowledge, no Hazardous Substances are present on the Real Property,
excepting such quantities as are handled in accordance with all applicable
manufacturer's instructions and governmental regulations and in proper storage
containers and as are necessary for the operation of the commercial business of
any Borrower or of its tenants.
5.8. SOLVENCY; NO LITIGATION, VIOLATION, INDEBTEDNESS OR DEFAULT.
(a) Borrowers are solvent, able to pay their debts as they
mature, have capital sufficient to carry on their business and all businesses in
which they are about to engage, and (i) as of the Closing Date, the fair present
saleable value of their assets, calculated on a going concern basis, is in
excess of the amount of their liabilities and (ii) subsequent to the Closing
Date, the fair saleable value of their assets (calculated on a going concern
basis) will be in excess of the amount of their liabilities.
(b) Except as disclosed in SCHEDULE 5.8(B), no Borrower has (i)
any pending or to the best of Borrowers' knowledge, threatened litigation,
arbitration, actions or proceedings which involve the possibility of having a
Material Adverse Effect, and (ii) any liabilities nor indebtedness for borrowed
money other than the Obligations.
(c) No Borrower is in violation of any applicable statute,
regulation or ordinance in any respect which could reasonably be expected to
have a Material Adverse Effect, nor is any Borrower in violation of any order of
any court, governmental authority or arbitration board or tribunal which could
reasonably be expected to have a Material Adverse Effect.
(d) No Borrower nor any member of the Controlled Group
maintains or contributes to any Plan other than those listed on SCHEDULE 5.8(D)
hereto. Except as set forth in SCHEDULE 5.8(D), (i) no Plan has incurred any
"accumulated funding deficiency," in excess of $100,000 at any time or from time
to time as defined in Section 302(a)(2) of ERISA and Section
-49-
412(a) of the Code, whether or not waived, and each Borrower and each member of
the Controlled Group has met all applicable minimum funding requirements under
Section 302 of ERISA in respect of each Plan, (ii) each Plan which is intended
to be a qualified plan under Section 401(a) of the Code as currently in effect
has been determined by the Internal Revenue Service to be qualified under
Section 401(a) of the Code and the trust related thereto is exempt from federal
income tax under Section 501(a) of the Code, (iii) no Borrower nor any member of
the Controlled Group has incurred any liability to the PBGC other than for the
payment of premiums, and there are no premium payments which have become due
which are unpaid, (iv) no Plan has been terminated by the plan administrator
thereof nor by the PBGC, and there is no occurrence which would cause the PBGC
to institute proceedings under Title IV of ERISA to terminate any Plan, (v) at
this time, the current value of the assets of each Plan exceeds the present
value of the accrued benefits and other liabilities of such Plan and no Borrower
nor any member of the Controlled Group knows of any facts or circumstances which
would materially change the value of such assets and accrued benefits and other
liabilities, (vi) no Borrower nor any member of the Controlled Group has
breached any of the responsibilities, obligations or duties imposed on it by
ERISA with respect to any Plan, (vii) no Borrower nor any member of a Controlled
Group has incurred any liability for any excise tax arising under Section 4972
or 4980B of the Code, and no fact exists which could give rise to any such
liability, (viii) no Borrower nor any member of the Controlled Group nor any
fiduciary of, nor any trustee to, any Plan, has engaged in a "prohibited
transaction" described in Section 406 of the ERISA or Section 4975 of the Code
nor taken any action which would constitute or result in a Termination Event
with respect to any such Plan which is subject to ERISA, (ix) each Borrower and
each member of the Controlled Group has made all contributions due and payable
with respect to each Plan, (x) there exists no event described in Section
4043(b) of ERISA, for which the thirty (30) day notice period contained in 29
CFR Section 2615.3 has not been waived, xi) no Borrower nor any member of the
Controlled Group has any fiduciary responsibility for investments with respect
to any plan existing for the benefit of persons other than employees or former
employees of any Borrower and any member of the Controlled Group, and (xii) no
Borrower nor any member of the Controlled Group has withdrawn, completely or
partially, from any Multiemployer Plan so as to incur liability under the
Multiemployer Pension Plan Amendments Act of 1980.
5.9. PATENTS, TRADEMARKS, COPYRIGHTS AND LICENSES. All patents, patent
applications, trademarks, trademark applications, service marks, service xxxx
applications, copyrights, copyright applications, design rights, tradenames,
assumed names, trade secrets and licenses owned or utilized by any Borrower are
set forth on SCHEDULE 5.9, are valid and have been duly registered or filed with
all appropriate governmental authorities and constitute all of the intellectual
property rights which are necessary for the operation of its business; there is
no objection to or pending challenge to the validity of any such
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material patent, trademark, copyright, design right, tradename, trade secret or
license and no Borrower is aware of any grounds for any challenge, except as set
forth in SCHEDULE 5.9 hereto. Each patent, patent application, patent license,
trademark, trademark application, trademark license, service xxxx, service xxxx
application, service xxxx license, copyright, copyright application and
copyright license owned or held by any Borrower and all trade secrets used by
any Borrower consist of original material or property developed by such Borrower
or was lawfully acquired by such Borrower from the proper and lawful owner
thereof. Each of such items which Borrowers believe in their business judgment
have any meaningful value to their businesses has been maintained so as to
preserve the value thereof from the date of creation or acquisition thereof.
5.10. LICENSES AND PERMITS. Each Borrower (a) is in compliance with and
(b) has procured and is now in possession of, all material licenses or permits
required by any applicable federal, state, provincial, territorial or local law
or regulation for the operation of its business in each jurisdiction wherein it
is now conducting or proposes to conduct business and where the failure to
procure such licenses or permits could reasonably be expected to have a Material
Adverse Effect.
5.11. DEFAULT OF INDEBTEDNESS. No Borrower is in default in the payment
of the principal of or interest on any Indebtedness or under any instrument or
agreement under or subject to which any Indebtedness has been issued and no
event has occurred under the provisions of any such instrument or agreement
which with or without the lapse of time or the giving of notice, or both,
constitutes or would constitute an event of default thereunder.
5.12. NO DEFAULT. No Borrower is in default in the payment or
performance of any of its contractual obligations and no Default has occurred
which could reasonably be expected to have a Material Adverse Effect.
5.13. NO BURDENSOME RESTRICTIONS. No Borrower is party to any contract
or agreement the performance of which could have a Material Adverse Effect on
such Borrower. No Borrower has agreed or consented to cause or permit in the
future (upon the happening of a contingency or otherwise) any of its property,
whether now owned or hereafter acquired, to be subject to a Lien which is not a
Permitted Encumbrance.
5.14. NO LABOR DISPUTES. No Borrower is involved in any labor dispute;
there are no strikes or walkouts or union organization of any Borrower's
employees in existence or, to the best of Borrowers' knowledge, threatened and
no labor contract is scheduled to expire during the Term other than as set forth
on SCHEDULE 5.14 hereto.
5.15. MARGIN REGULATIONS. No Borrower is engaged, nor will it engage,
principally or as one of its important
-51-
activities, in the business of extending credit for the purpose of "purchasing"
or "carrying" any "margin stock" within the respective meanings of each of the
quoted terms under Regulation U or Regulation G of the Board of Governors of the
Federal Reserve System as now and from time to time hereafter in effect. No part
of the proceeds of any Advance will be used for "purchasing" or "carrying"
"margin stock" as defined in Regulation U of such Board of Governors.
5.16. INVESTMENT COMPANY ACT. No Borrower is an "investment company"
registered or required to be registered under the Investment Company Act of
1940, as amended, nor is it controlled by such a company.
5.17. DISCLOSURE. No representation or warranty made by any Borrower in
this Agreement or in any financial statement, report, certificate or any other
document furnished in connection herewith contains any untrue statement of a
material fact or omits to state any material fact necessary to make the
statements herein or therein not misleading, in light of the circumstances
existing when such representation or warranty was made. There is no fact known
to Borrowers or which reasonably should be known to Borrowers which Borrowers
have not disclosed to Agent in writing with respect to the transactions
contemplated by this Agreement which could reasonably be expected to have a
Material Adverse Effect.
5.18. FCC, PRTRB AND STATE COMPLIANCE.
(a) Each Borrower has duly complied with the provisions of the
Telecommunications Act, the Communications Act, the FCC, the FCC Rules and the
PRTRB including, without limitation, the reporting requirements thereunder and
there have been no outstanding citations, notices or orders of non-compliance
issued to any Borrower relating to its business or assets under any such laws,
rules or regulations except for such noncompliance which in the aggregate cannot
reasonably be expected to have a Material Adverse Effect.
(b) Each Borrower has been issued all required federal, state,
territorial and local licenses, certificates or permits relating to all
applicable telecommunication laws necessary or appropriate to operate its
business, other than licenses, permits and certificates as to which the lack
thereof cannot reasonably be expected to have a Material Adverse Effect.
(c) Each Borrower is certified, tariffed or otherwise qualified
to provide its services in all states, territories and commonwealths where such
certification or qualification is necessary for such Borrower to operate its
business and such Borrower has filed and maintained all necessary tariffs with
the appropriate federal, state, local or territorial authorities except for
those as to which the lack thereof will not have a Material Adverse Effect.
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5.19. SWAPS. No Borrower is a party to, nor will it be a party to, any
swap agreement whereby such Borrower has agreed or will agree to swap interest
rates or currencies unless same provides that damages upon termination following
an event of default thereunder are payable on an unlimited "two-way basis"
without regard to fault on the part of either party.
5.20. CONFLICTING AGREEMENTS. No provision of any mortgage, indenture,
contract, agreement, judgment, decree or order binding on any Borrower or
affecting the Collateral conflicts with, or requires any Consent which has not
already been obtained to, or would in any way prevent the execution, delivery or
performance of, the terms of this Agreement or the Other Documents.
5.21. APPLICATION OF CERTAIN LAWS AND REGULATIONS. Each Borrower and
any Affiliate (other than Warburg or a Warburg Affiliate) of such Borrower is in
compliance with all statutes, rules or regulations which regulate the incurrence
of any Indebtedness, including without limitation, statutes or regulations
relative to common or interstate carriers or to the sale of electricity, gas,
steam, water, telephone, telegraph or other public utility services except for
any non-compliance which in the aggregate cannot reasonably be expected to have
a Material Adverse Effect.
5.22. BUSINESS AND PROPERTY OF BORROWER. Upon and after the Closing
Date, Borrowers do not propose to engage in any business other than providing or
utilizing long distance or local telecommunications services and activities
necessary to conduct the foregoing. On the Closing Date, each Borrower will own
all the property and possess all of the rights and Consents necessary for the
conduct of the business of such Borrower except for those as to which the lack
thereof will not have a Material Adverse Effect.
VI. AFFIRMATIVE COVENANTS.
Each Borrower shall, until payment in full of the Obligations and
termination of this Agreement:
6.1. PAYMENT OF FEES. Pay to Agent on demand all usual and customary
fees and out-of-pocket expenses which Agent incurs in connection with (a) the
forwarding of Advance proceeds and (b) the establishment and maintenance of any
Blocked Accounts or Depository Accounts as provided for in Section 4.15(h).
Agent may, without making demand, charge Borrowers' Account for all such fees
and out-of-pocket expenses.
6.2. CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE AND ASSETS.
(a) Conduct continuously and operate actively its business according to good
business practices and maintain all of its properties useful or necessary in its
business in good working order and condition (reasonable wear and tear excepted
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and except as may be disposed of in accordance with the terms of this
Agreement), including, without limitation, all licenses, patents, copyrights,
design rights, tradenames, trade secrets and trademarks and take all actions
necessary to enforce and protect the validity of any intellectual property right
or other right included in the Collateral; (b) keep in full force and effect its
existence and comply in all material respects with the laws and regulations
governing the conduct of its business where the failure to do so could
reasonably be expected to have a Material Adverse Effect; and (c) make all such
reports and pay all such franchise and other taxes and license fees and do all
such other acts and things as may be lawfully required to maintain its rights,
licenses, leases, powers and franchises under the laws of the United States or
any political subdivision thereof.
6.3. VIOLATIONS. Promptly notify Agent in writing of any violation
of any law, statute, regulation or ordinance of any Governmental Body, or of any
agency thereof, applicable to any Borrower which could reasonably be expected to
have a Material Adverse Effect.
6.4. GOVERNMENT RECEIVABLES. Take all steps necessary to protect
Agent's interest in the Collateral under the Federal Assignment of Claims Act or
other applicable state or local statutes or ordinances and deliver to Agent
appropriately endorsed, any instrument or chattel paper connected with any
Receivable arising out of contracts between any Borrower and the United States,
any state, any territory, any commonwealth or any department, agency or
instrumentality of any of them.
6.5. TANGIBLE NET WORTH. Maintain Tangible Net Worth at the end of
each fiscal quarter set forth below of not less than the amount set forth
opposite such quarter:
==================================================================
FISCAL QUARTER ENDING: AMOUNT:
------------------------------------------------------------------
09/30/97 $27,500,000
------------------------------------------------------------------
12/31/97 $25,700,000
------------------------------------------------------------------
03/31/98 $24,500,000
------------------------------------------------------------------
06/30/98 $23,500,000
------------------------------------------------------------------
09/30/98 and each fiscal quarter $23,000,000
thereafter
==================================================================
6.6. INTEREST COVERAGE RATIO. Maintain an Interest Coverage Ratio
as at the end of the fiscal quarter set forth below with respect to the four (4)
fiscal quarters then ended of not less than the ratio set forth opposite such
quarter:
===========================================================================
FISCAL QUARTER ENDING: RATIO:
---------------------------------------------------------------------------
09/30/97 1.00 to 1.00
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---------------------------------------------------------------------------
12/31/97 1.00 to 1.00
---------------------------------------------------------------------------
03/31/98 1.00 to 1.00
---------------------------------------------------------------------------
06/30/98 1.25 to 1.00
---------------------------------------------------------------------------
09/30/98 1.25 to 1.00
---------------------------------------------------------------------------
12/31/98 and each fiscal quarter thereafter 1.50 to 1.00
===========================================================================
6.7. EXECUTION OF SUPPLEMENTAL INSTRUMENTS. Execute and deliver to
Agent from time to time, upon demand, such supplemental agreements, statements,
assignments and transfers, or instructions or documents relating to the
Collateral, and such other instruments as Agent may request, in order that the
full intent of this Agreement may be carried into effect.
6.8. PAYMENT OF INDEBTEDNESS. Pay, discharge or otherwise satisfy at or
before maturity (subject, where applicable, to specified grace periods and, in
the case of the trade payables, to normal payment practices) all its obligations
and liabilities of whatever nature, except when the failure to do so could not
reasonably be expected to have a Material Adverse Effect or when the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and each Borrower shall have provided for such reserves as Agent may
reasonably deem proper and necessary, subject at all times to any applicable
subordination arrangement in favor of Lenders.
6.9. STANDARDS OF FINANCIAL STATEMENTS. Cause all financial statements
referred to in Sections 9.7, 9.9, 9.10, 9.11, 9.12, 9.13 and 9.14 as to which
GAAP is applicable to be complete and correct in all material respects (subject,
in the case of interim financial statements, to normal year-end audit
adjustments) and to be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein (except as
concurred in by such reporting accountants or officer, as the case may be, and
disclosed therein).
VII. NEGATIVE COVENANTS.
No Borrower shall, until satisfaction in full of the Obligations and
termination of this Agreement, without the prior written consent of Agent and
Required Lenders:
7.1. MERGER, CONSOLIDATION, ACQUISITION AND SALE OF ASSETS.
(a) Enter into any merger, consolidation or other
reorganization with or into any other Person or acquire all or a substantial
portion of the assets or stock of any Person other than pursuant to a Permitted
Acquisition or a Permitted
-55-
Investment or permit any other Person to consolidate with or merge with it.
(b) Sell, lease, transfer or otherwise dispose of (i) any
Collateral or (ii) any of its properties or assets (other than Collateral) in
excess of $250,000 in any fiscal year.
7.2. CREATION OF LIENS. Create or suffer to exist any Lien or
transfer upon or against any of its property or assets now owned or hereafter
acquired, except Permitted Encumbrances.
7.3. GUARANTEES. Become liable upon the obligations of any Person
by assumption, endorsement or guaranty thereof or otherwise (other than to
Lenders) except the endorsement of checks in the ordinary course of business.
7.4. INVESTMENTS. Purchase or acquire obligations or stock of, or any
other interest in, any Person, except (a) obligations issued or guaranteed by
the United States of America or any agency thereof, (b) certificates of time
deposit and bankers' acceptances having maturities of not more than 180 days and
repurchase agreements backed by United States government securities of a
commercial bank if (i) such bank has a combined capital and surplus of at least
$500,000,000, or (ii) its debt obligations, or those of a holding company of
which it is a Subsidiary, are rated not less than A (or the equivalent rating)
by a nationally recognized investment rating agency, (c) U.S. money market funds
that invest solely in obligations issued or guaranteed by the United States of
America or an agency thereof, and (d) Permitted Acquisitions and Permitted
Investments.
7.5. LOANS. Make advances, loans or extensions of credit to any Person,
including without limitation, any Parent, Subsidiary or Affiliate other than (a)
loans or advances among Borrowers, (b) trade debt due to any Borrower which has
been converted into loans evidenced by promissory notes so long as such trade
debt does not at any time constitute Eligible Receivables and PROVIDED, further,
that any such promissory notes in excess of $50,000 shall be pledged and
delivered to Agent as security for the Obligations or (c) loans and advances to
employees not to exceed $25,000 in the aggregate outstanding at any time or from
time to time.
7.6. CAPITAL EXPENDITURES. Contract for, purchase or make any
expenditure or commitments for fixed or capital assets (including capitalized
leases) in an amount in excess of (a) $7,000,000 for the period commencing on
the Closing Date and ending on December 31, 1997, (b) $12,000,000 in any fiscal
year thereafter through and including the fiscal year ending December 31, 2001
and (c) $6,000,000 during the period commencing on January 1, 2002 and ending on
July 30, 2002.
7.7. DIVIDENDS. Declare, pay or make any dividend or distribution
on any shares of the common stock or preferred stock of any Borrower (other than
dividends or distributions payable in
-56-
its stock, or split-ups or reclassifications of its stock or dividends payable
by a Borrower to another Borrower) or apply any of its funds, property or assets
to the purchase, redemption or other retirement of any common or preferred
stock, or of any options to purchase or acquire any such shares of common or
preferred stock of any Borrower, other than any redemption or purchase of any
such stock of TresCom issued to any of its employees, PROVIDED, HOWEVER, that
such purchase and/or redemption price does not exceed $500,000 in the aggregate
for all employees in any fiscal year and PROVIDED, further that at the time of
and after giving effect to each such purchase or redemption (a) Undrawn
Availability is at least $2,000,000 and (b) no Event of Default has occurred and
is continuing.
7.8. INDEBTEDNESS. Create, incur, assume or suffer to exist any
Indebtedness for borrowed money (exclusive of trade debt) except in respect of
(i) Indebtedness to Agent and/or Lenders; (ii) Indebtedness incurred for capital
expenditures permitted under Section 7.6 hereof, (iii) Indebtedness due under
the SBA Loan as in existence on the Closing Date, (iv) Indebtedness due under
capitalized leases as in existence on the Closing Date and (v) Indebtedness
incurred in connection with Permitted Acquisitions.
7.9. NATURE OF BUSINESS. Substantially change the nature of the
business in which it is presently engaged, nor except as specifically permitted
hereby purchase or invest, directly or indirectly, in any assets or property
other than in the ordinary course of business for assets or property which are
useful in, necessary for and are to be used in its business as presently
conducted.
7.10. TRANSACTIONS WITH AFFILIATES. Directly or indirectly, purchase,
acquire or lease any property from, or sell, transfer or lease any property to,
or otherwise deal with, any Affiliate other than another Borrower, except
transactions disclosed in the ordinary course of business, on an arm's-length
basis on terms no less favorable than terms which would have been obtainable
from a Person other than an Affiliate.
7.11. INTENTIONALLY OMITTED.
7.12. SUBSIDIARIES.
(a) Form or acquire any Subsidiary except in connection with
(a) a Permitted Investment or (b) a Permitted Acquisition so long as in
connection with such Permitted Acquisition, (i) such Subsidiary expressly joins
in this Agreement as a borrower and becomes jointly and severally for the
obligations of Borrowers hereunder, under the Notes and under any other
agreement between any Borrower, Agent and/or Lenders and (ii) Agent shall have
received all documents, including legal opinions, it may reasonably require to
establish Agent's first priority security interest in the assets of the
Subsidiary to the
-57-
extent such assets constitute "Collateral" hereunder and compliance with each of
the foregoing conditions.
(b) Enter into any partnership, joint venture or similar
arrangement.
7.13. FISCAL YEAR AND ACCOUNTING CHANGES. Change its fiscal year from
December 31 or make any change (i) in accounting treatment and reporting
practices except as required or permitted by GAAP or (ii) in tax reporting
treatment except as required or permitted by law.
7.14. PLEDGE OF CREDIT. Now or hereafter pledge Agent's or any Lender's
credit on any purchases or for any purpose whatsoever or use any portion of any
Advance in or for any business other than such Borrower's business as conducted
on the date of this Agreement, or as permitted to be conducted in the future by
the terms of this Agreement.
7.15. AMENDMENT OF ARTICLES OF INCORPORATION, BY-LAWS, LEC CONTRACTS.
Amend, modify or waive any material term or material provision of (x) its
Articles of Incorporation or ByLaws unless required by law or (y) any Agreement
with any LEC, except for amendments, modifications or waivers which could not
reasonably be expected to have a Material Adverse Effect.
7.16. COMPLIANCE WITH ERISA. (i) (x) Maintain, or permit any member of
the Controlled Group to maintain, or (y) become obligated to contribute, or
permit any member of the Controlled Group to become obligated to contribute, to
any Plan, other than those Plans disclosed on SCHEDULE 5.8(D), (ii) engage, or
permit any member of the Controlled Group to engage, in any non-exempt
"prohibited transaction", as that term is defined in section 406 of ERISA and
Section 4975 of the Code, (iii) incur, or permit any member of the Controlled
Group to incur, any "accumulated funding deficiency" in excess of $100,000 at
any time or from time to time, as that term is defined in Section 302 of ERISA
or Section 412 of the Code, (iv) terminate, or permit any member of the
Controlled Group to terminate, any Plan where such event could result in any
liability of any Borrower or any member of the Controlled Group or the
imposition of a lien on the property of any Borrower or any member of the
Controlled Group pursuant to Section 4068 of ERISA, (v) assume, or permit any
member of the Controlled Group to assume, any obligation to contribute to any
Multiemployer Plan not disclosed on SCHEDULE 5.8(D), (vi) incur, or permit any
member of the Controlled Group to incur, any withdrawal liability to any
Multiemployer Plan; (vii) fail promptly to notify Agent of the occurrence of any
Termination Event, (viii) fail to comply, or permit a member of the Controlled
Group to fail to comply, with the requirements of ERISA or the Code or other
applicable laws in respect of any Plan, (ix) fail to meet, or permit any member
of the Controlled Group to fail to meet, all minimum funding requirements under
ERISA or the Code or postpone or delay or allow any member of the Controlled
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Group to postpone or delay any funding requirement with respect of any Plan.
7.17. PREPAYMENT OF INDEBTEDNESS. At any time, directly or
indirectly, prepay any Indebtedness (other than to Agent and/or Lenders), or
repurchase, redeem, retire or otherwise acquire any Indebtedness of any
Borrower.
7.18. DEPOSIT ACCOUNT BALANCES. At any time, maintain a balance in the
respective operating accounts of each of STSJ and TeleCom in excess of $15,000
and, to the extent the balance exceeds such amount, Borrowers shall cause such
excess to be transferred on a daily basis to the Blocked Account.
VIII. CONDITIONS PRECEDENT.
8.1. CONDITIONS TO INITIAL ADVANCES. The agreement of Lenders to make
the initial Advances requested to be made on the Closing Date is subject to the
satisfaction, or waiver by all of the Lenders, immediately prior to or
concurrently with the making of such Advances, of the following conditions
precedent:
(a) NOTE. Agent shall have received the Note duly executed
and delivered by an authorized officer of each Borrower;
(b) FILINGS, REGISTRATIONS AND RECORDINGS. Each document
(including, without limitation, any Uniform Commercial Code financing statement)
required by this Agreement, any Other Document or under law or reasonably
requested by the Agent to be filed, registered or recorded in order to create,
in favor of Agent, a perfected security interest in or lien upon the Collateral
shall have been properly filed, registered or recorded in each jurisdiction in
which the filing, registration or recordation thereof is so required or
requested, and Agent shall have received an acknowledgment copy, or other
evidence satisfactory to it, of each such filing, registration or recordation
and satisfactory evidence of the payment of any necessary fee, tax or expense
relating thereto;
(c) CORPORATE PROCEEDINGS OF BORROWERS. Agent shall have
received a copy of the resolutions in form and substance reasonably satisfactory
to Agent, of the Board of Directors of each Borrower and Guarantor authorizing
(i) with respect to such Borrower and Guarantor the execution, delivery and
performance of this Agreement and the Other Documents which such Person is a
party, (collectively the "Documents") and (ii) with respect to such Borrower,
the granting of the security interests in and liens upon the Collateral in each
case certified by the Secretary or an Assistant Secretary of each Borrower and
Guarantor as of the Closing Date; and, such certificate shall state that the
resolutions thereby certified have not been amended, modified, revoked or
rescinded as of the date of such certificate;
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(d) INCUMBENCY CERTIFICATES OF BORROWERS AND GUARANTOR. Agent
shall have received a certificate of the Secretary or an Assistant Secretary of
each Borrower and Guarantor, dated the Closing Date, as to the incumbency and
signature of the officers of such Borrower and Guarantor, executing this
Agreement, any certificate or other documents to be delivered by it pursuant
hereto, together with evidence of the incumbency of such Secretary or Assistant
Secretary;
(e) CERTIFICATES. Agent shall have received a copy of the
Articles or Certificate of Incorporation of each Borrower and Guarantor and all
amendments thereto, certified by the Secretary of State or other appropriate
official of its jurisdiction of incorporation together with copies of the
By-Laws of each Borrower and Guarantor and all agreements of each Borrower's
shareholders certified as accurate and complete by the Secretary of each
Borrower and Guarantor;
(f) GOOD STANDING CERTIFICATES. Agent shall have received good
standing certificates for each Borrower and Guarantor dated not more than thirty
(30) days prior to the Closing Date, issued by the Secretary of State or other
appropriate official of each Borrower's jurisdiction of incorporation and each
jurisdiction where the conduct of each Borrower's business activities or the
ownership of its properties necessitates qualification;
(g) LEGAL OPINION. Agent shall have received the executed legal
opinion of Xxxxxx Xxxx & Xxxxxx LLP in form and substance satisfactory to Agent
which shall cover such matters incident to the transactions contemplated by this
Agreement and the Other Documents (other than the Assignment), and such other
local counsel opinions as Agent may reasonably require and each Borrower and
Guarantor hereby authorizes and directs such counsel to deliver such opinions to
Agent and Lenders;
(h) NO LITIGATION. (i) No litigation, investigation or
proceeding before or by any arbitrator or Governmental Body shall be continuing
or threatened against any Borrower or against the officers or directors of any
Borrower (A) in connection with the Other Documents or any of the transactions
contemplated thereby and which, in the reasonable opinion of Agent, is deemed
material or (B) which could, in the reasonable opinion of Agent, have a Material
Adverse Effect; and (ii) no injunction, writ, restraining order or other order
of any nature materially adverse to any Borrower or the conduct of its business
or inconsistent with the due consummation of the Transactions shall have been
issued by any Governmental Body;
(i) FINANCIAL CONDITION CERTIFICATES. Agent shall have
received an executed Financial Condition Certificate in the form of EXHIBIT
8.1(i).
(j) COLLATERAL EXAMINATION. Agent shall have completed
Collateral examinations and received appraisals, the
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results of which shall be satisfactory in form and substance to Agent, of the
Receivables and General Intangibles, of each Borrower and all books and records
in connection therewith;
(k) FEES. Agent shall have received all fees payable to
Agent and Lenders on or prior to the Closing Date pursuant to Article III
hereof;
(l) PROJECTIONS. Agent shall have received a copy of the
Projections which shall be satisfactory in all respects to Agent;
(m) OAN DOCUMENTATION. Agent shall have received executed
copies of all documentation related to the OAN Services Agreement;
(n) GUARANTIES AND OTHER DOCUMENTS. Agent shall have received
a duly executed Guaranty and all Other Documents, each in form and substance
satisfactory to Agent;
(o) INSURANCE. Agent shall have received in form and substance
satisfactory to Agent, certified copies of Borrowers' casualty insurance
policies, together with loss payable endorsements on Agent's standard form of
loss payee endorsement naming Agent as loss payee, and certified copies of
Borrowers' liability insurance policies, together with endorsements naming Agent
as a co-insured;
(p) PAYMENT INSTRUCTIONS. Agent shall have received written
instructions from Borrowers directing the application of proceeds of the initial
Advances made pursuant to this Agreement;
(q) BLOCKED ACCOUNTS. Agent shall have received duly executed
agreements establishing the Blocked Accounts or Depository Accounts with
SunTrust Bank/South Florida, National Association for the collection or
servicing of the Receivables and proceeds of the Collateral;
(r) CONSENTS. Agent shall have received any and all Consents
necessary to permit the effectuation of the transactions contemplated by this
Agreement and the Other Documents; and, Agent shall have received such Consents
and waivers of such third parties as might assert claims with respect to the
Collateral, as Agent and its counsel shall deem necessary;
(s) NO MATERIAL ADVERSE CHANGE. (i) since May 31, 1997, there
shall not have occurred any event, condition or state of facts which could
reasonably be expected to have a Material Adverse Effect and (ii) no
representations made or information supplied to Agent shall have been proven to
be inaccurate or misleading in any material respect;
(t) LEASEHOLD AGREEMENTS. Agent shall have received
landlord, mortgagee or warehouseman agreements
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satisfactory to Agent with respect to all premises leased by any Borrower at
which such Borrower's books and records are located;
(u) CONTRACT REVIEW. Agent shall have reviewed all material
contracts of Borrowers including, without limitation, leases, union contracts,
labor contracts, vendor supply contracts, license agreements and distributorship
agreements and such contracts and agreements shall be satisfactory in all
respects to Agent;
(v) CLOSING CERTIFICATE. Agent shall have received a closing
certificate signed by the Chief Financial Officer of TresCom and the Vice
President of the other Borrowers dated as of the date hereof, stating that (i)
all representations and warranties set forth in this Agreement and the Other
Documents are true and correct on and as of such date, (ii) Borrowers are on
such date in compliance with all the terms and provisions set forth in this
Agreement and the Other Documents and (iii) on such date no Default or Event of
Default has occurred or is continuing;
(w) BORROWING BASE. Agent shall have received evidence from
Borrowers that the aggregate amount of Eligible Receivables, Eligible IX - Plus
Unbilled Receivables, Eligible OAN Receivables and Eligible Unbilled Receivables
is sufficient in value and amount to support Advances in the amount requested by
Borrowers on the Closing Date and that after giving effect to the initial
Advances hereunder, Borrowers shall have Undrawn Availability of at least
$5,500,000 as evidenced by the Borrowing Base Certificate in substantially the
form of EXHIBIT 8.1(w) hereof prepared and delivered by TresCom to Agent on the
Closing Date, which certificate shall be satisfactory to Agent in all respects;
(x) COMPLIANCE WITH LAWS. Agent shall be reasonably satisfied
that each Borrower is in compliance with all pertinent federal, state, local and
territorial regulations including but not limited to those with respect to EPA,
OSHA, ERISA, FCC and PRTRB;
(y) SBA DOCUMENTATION. Agent shall have received executed
copies of all documentation related to the SBA Loan and the SBA shall have
consented in writing to the incurrence by STSJ of the Indebtedness to Agent and
Lenders contemplated herein and the creation of the Liens upon the Collateral;
and
(z) OTHER. All corporate and other proceedings, and all
documents, instruments and other legal matters in connection with the
Transactions shall be satisfactory in form and substance to Agent and its
counsel.
8.2. CONDITIONS TO EACH ADVANCE. The agreement of Lenders to make
any Advance requested to be made on any date (including, without limitation, the
initial Advance), is subject
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to the satisfaction of the following conditions precedent as of the date such
Advance is made:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations
and warranties made by any Borrower in or pursuant to this Agreement and any
Other Document to which it is a party, and each of the representations and
warranties contained in any certificate, document or financial or other
statement furnished at any time under or in connection with this Agreement or
any Other Document shall be true and correct in all material respects on and as
of such date as if made on and as of such date unless such representations or
warranties expressly relate to a particular date and except with respect to any
events, changes or conditions expressly permitted under this Agreement;
(b) NO DEFAULT. No Event of Default or Default shall have
occurred and be continuing on such date, or would exist after giving effect to
the Advances requested to be made, on such date; PROVIDED, HOWEVER that Lenders,
in their sole discretion, may continue to make Advances notwithstanding the
existence of an Event of Default or Default and that any Advances so made shall
not be deemed a waiver of any such Event of Default or Default;
(c) MAXIMUM ADVANCES. In the case of any Advances requested
to be made, after giving effect thereto, the aggregate Advances shall not exceed
the maximum amount of Advances permitted under Sections 2.1 and 2.11 hereof; and
(d) MATERIAL PROVISIONS. No material provision of this
Agreement shall, for any reason, cease to be valid and binding on any Borrower,
or any Borrower shall so claim in writing to Agent.
Each request for an Advance by any Borrower hereunder shall constitute a
representation and warranty by each Borrower as of the date of such Advance that
the conditions contained in this subsection shall have been satisfied.
IX. INFORMATION AS TO BORROWERS.
Each Borrower shall, until satisfaction in full of the Obligations and
the termination of this Agreement:
9.1. DISCLOSURE OF MATERIAL MATTERS. Immediately upon learning thereof,
report to Agent all matters materially affecting the value, enforceability or
collectibility of any portion of the Collateral including, without limitation,
any Borrower's reclamation or repossession of, or the return to any Borrower of,
a material amount of goods or claims or disputes asserted by any Customer or
other obligor.
9.2. SCHEDULES. Deliver to Agent (a) on or before Wednesday of each
week as and for the prior week, a detailed
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listing of all sales made by any Borrower during the prior week and (b) on or
before the 15th day of each month as and for the prior month (i) accounts
receivable ageings together with a Certificate of the President and/or
Vice-President of Telecom in substantially the form of EXHIBIT 9.2 attached
hereto and made a part hereof and (ii) accounts payable schedules. In addition,
each Borrower will deliver to Agent at such intervals as Agent may reasonably
require: (i) confirmatory assignment schedules, (ii) copies of Customer's
invoices, (iii) evidence of shipment or delivery, and (iv) such further
schedules, documents and/or information regarding the Collateral as Agent may
reasonably require including, without limitation, trial balances and test
verifications. Agent shall have the right to confirm and verify all Receivables
by any manner and through any medium it considers advisable and do whatever it
may deem reasonably necessary to protect its interests hereunder. The items to
be provided under this Section are to be in form reasonably satisfactory to
Agent and executed by each Borrower and delivered to Agent from time to time
solely for Agent's convenience in maintaining records of the Collateral, and any
Borrower's failure to deliver any of such items to Agent shall not affect,
terminate, modify or otherwise limit Agent's Lien with respect to the
Collateral.
9.3. ENVIRONMENTAL REPORTS. Furnish Agent, concurrently with the
delivery of the financial statements referred to in Sections 9.7, with a
certificate signed by the President of each Borrower stating, to the best of his
knowledge, that each Borrower is in compliance in all material respects with all
federal, state, local, territorial and commonwealth laws relating to
environmental protection and control and occupational safety and health. To the
extent any Borrower is not in compliance with the foregoing laws, the
certificate shall set forth with specificity all areas of non-compliance and the
proposed action such Borrower will implement in order to achieve full
compliance.
9.4. LITIGATION. Promptly notify Agent in writing of any litigation,
suit or administrative proceeding affecting any Borrower, whether or not the
claim is covered by insurance, and of any suit or administrative proceeding,
which in any such case could reasonably be expected to have a Material Adverse
Effect.
9.5. MATERIAL OCCURRENCES. Promptly notify Agent in writing upon the
occurrence of (a) any Event of Default or Default; (b) any event, development or
circumstance whereby any financial statements or other reports furnished to
Agent fail in any material respect to present fairly, in accordance with GAAP
consistently applied, the financial condition or operating results of any
Borrower as of the date of such statements; (c) any accumulated retirement plan
funding deficiency which, if such deficiency continued for two plan years and
was not corrected as provided in Section 4971 of the Code, could subject any
Borrower to a tax imposed by Section 4971 of the Code; (d) each and every
default by any Borrower which might result in the acceleration of the maturity
of any Indebtedness in excess of $100,000, including the names and addresses of
the holders of such Indebtedness with
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respect to which there is a default existing or with respect to which the
maturity has been or could be accelerated, and the amount of such Indebtedness;
and (e) any other development in the business or affairs of any Borrower which
could reasonably be expected to have a Material Adverse Effect; in each case
describing the nature thereof and the action Borrowers propose to take with
respect thereto.
9.6. GOVERNMENT RECEIVABLES. Notify Agent immediately if any of its
Receivables arise out of contracts between any Borrower and the United States
and/or Puerto Rico, any state, or any department, agency or instrumentality of
any of them.
9.7. ANNUAL FINANCIAL STATEMENTS. Furnish Agent within ninety (90) days
after the end of each fiscal year of Borrowers, financial statements of TresCom
on a consolidating and consolidated basis including, but not limited to,
statements of income and stockholders' equity and cash flow from the beginning
of the current fiscal year to the end of such fiscal year and the balance sheet
as at the end of such fiscal year, all prepared in accordance with GAAP applied
on a basis consistent with prior practices, and in reasonable detail and
reported upon without qualification by an independent certified public
accounting firm selected by TresCom and satisfactory to Agent (the
"Accountants"). The report of the Accountants shall be accompanied by a
statement of the Accountants certifying that (i) they have caused the Loan
Agreement to be reviewed, (ii) in making the examination upon which such report
was based either no information came to their attention which to their knowledge
constituted an Event of Default or a Default under this Agreement or any Other
Document or, if such information came to their attention, specifying any such
Default or Event of Default, its nature, when it occurred and whether it is
continuing, and such report shall contain or have appended thereto calculations
which set forth Borrowers' compliance with the requirements or restrictions
imposed by Sections 6.5, 6.6 and 7.6 hereof. In addition, the reports shall be
accompanied by a certificate of the President and/or Chief Financial Officer of
TresCom which shall state that, based on an examination sufficient to permit him
to make an informed statement, no Default or Event of Default exists, or, if
such is not the case, specifying such Default or Event of Default, its nature,
when it occurred, whether it is continuing and the steps being taken by
Borrowers with respect to such event, and such certificate shall have appended
thereto calculations which set forth Borrowers' compliance with the requirements
or restrictions imposed by Sections 6.5, 6.6 and 7.6 hereof.
9.8. MONTHLY FINANCIAL STATEMENTS. Furnish Agent within thirty (30)
days after the end of each month, an unaudited balance sheet and unaudited
statements of income and stockholders' equity and cash flow of TresCom on a
consolidated and consolidating basis reflecting results of operations from the
beginning of the fiscal year to the end of such month and for such month,
prepared on a basis consistent with prior practices
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and complete and correct in all material respects, subject to normal year end
adjustments. The reports shall be accompanied by a certificate of the Chief
Financial Officer and/or President of TresCom which shall state that, based on
an examination sufficient to permit him to make an informed statement, no
Default or Event of Default exists, or, if such is not the case, specifying such
Default or Event of Default, its nature, when it occurred, whether it is
continuing and the steps being taken by Borrowers with respect to such event,
and such certificate shall have appended thereto calculations which set forth
Borrowers' compliance with the requirements or restrictions imposed by Sections
6.5, 6.6 and 7.6 hereof.
9.9. QUARTERLY FINANCIAL STATEMENTS. Furnish Agent within forty five
(45) days after the end of each of the first three fiscal quarters of each
fiscal year, an unaudited balance sheet of TresCom on a consolidated and
consolidating basis and unaudited statements of income and stockholders' equity
and cash flow of TresCom on a consolidated and consolidating basis reflecting
results of operations from the beginning of the fiscal year to the end of such
quarter and for such quarter, prepared on a basis consistent with prior
practices and complete and correct in all material respects, subject to normal
year end adjustments. The reports shall be accompanied by a certificate of the
President and/or Chief Financial Officer of TresCom, which shall state that,
based on an examination sufficient to permit him to make an informed statement,
no Default or Event of Default exists, or, if such is not the case, specifying
such Default or Event of Default, its nature, when it occurred, whether it is
continuing and the steps being taken by Borrowers with respect to such event
and, such certificate shall have appended thereto calculations which set forth
Borrowers' compliance with the requirements or restrictions imposed by Sections
6.5, 6.6 and 7.6 hereof.
9.10. OTHER REPORTS. Furnish Agent as soon as available, but in any
event within ten (10) days after the issuance thereof, (i) with copies of such
financial statements, reports and returns as each Borrower shall send to its
stockholders and (ii) all notices sent in connection with the SBA Loan.
9.11. ADDITIONAL INFORMATION. Furnish Agent with such additional
information as Agent shall reasonably request in order to enable Agent to
determine whether the terms, covenants, provisions and conditions of this
Agreement and the Note have been complied with by Borrowers including, without
limitation and without the necessity of any request by Agent, (a) copies of all
environmental audits and reviews, (b) at least thirty (30) days prior thereto,
notice of any Borrower's opening of any new office or place of business or any
Borrower's closing of any existing office or place of business, and (c) promptly
upon any Borrower's learning thereof, notice of any labor dispute to which any
Borrower may become a party, any strikes or walkouts relating to any of its
plants or other facilities, and the expiration of any
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labor contract to which any Borrower is a party or by which any Borrower is
bound.
9.12. PROJECTED OPERATING BUDGET. Furnish Agent, no later than thirty
(30) days prior to the beginning of each Borrower's fiscal years commencing with
fiscal year 1998, a month by month projected operating budget and cash flow of
Borrowers on a consolidated basis for such fiscal year (including an income
statement for each month and a balance sheet as at the end of the last month in
each fiscal quarter), such projections to be accompanied by a certificate signed
by the President or Chief Financial Officer of Borrowing Agent on behalf of
Borrowers to the effect that such projections have been prepared on the basis of
sound financial planning practice and that such officer has no reason to
question the reasonableness of any material assumptions on which such
projections were prepared.
9.13. VARIANCES FROM OPERATING BUDGET. Furnish Agent, concurrently with
the delivery of the financial statements referred to in Section 9.7 and each
quarterly report referred to in Section 9.9, a written report summarizing all
material variances from budgets submitted by Borrowers pursuant to Section 9.12
and a discussion and analysis by management with respect to such variances.
9.14. NOTICE OF SUITS, ADVERSE EVENTS. Furnish Agent with prompt notice
of (i) any lapse or other termination of any Consent issued to any Borrower by
any Governmental Body or any other Person that is material to the operation of
Borrowers' business taken as a whole, (ii) any refusal by any Governmental Body
or any other Person to renew or extend any such Consent except for any Consent
which could not reasonably be expected to have a Material Adverse Effect; and
(iii) copies of any periodic or special reports filed by any Borrower with any
Governmental Body or Person, if such reports indicate any material change in the
business, operations, affairs or condition of any Borrower, or if copies thereof
are requested by Lender, and (iv) copies of any material notices and other
communications from any Governmental Body which specifically relate to any
Borrower.
9.15. ERISA NOTICES AND REQUESTS. Furnish Agent with immediate written
notice in the event that (i) any Borrower or any member of the Controlled Group
knows or has reason to know that a Termination Event has occurred, together with
a written statement describing such Termination Event and the action, if any,
which such Borrower or member of the Controlled Group has taken, is taking, or
proposes to take with respect thereto and, when known, any action taken or
threatened by the Internal Revenue Service, Department of Labor or PBGC with
respect thereto, (ii) any Borrower or any member of the Controlled Group knows
or has reason to know that a prohibited transaction (as defined in Sections 406
of ERISA and 4975 of the Code) has occurred together with a written statement
describing such transaction and the action which such Borrower or any member of
the Controlled Group has taken, is taking or proposes to take
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with respect thereto, (iii) a funding waiver request has been filed with respect
to any Plan together with all communications received by any Borrower or any
member of the Controlled Group with respect to such request, (iv) any increase
in the benefits of any existing Plan or the establishment of any new Plan or the
commencement of contributions to any Plan to which any Borrower or any member of
the Controlled Group was not previously contributing shall occur, (v) any
Borrower or any member of the Controlled Group shall receive from the PBGC a
notice of intention to terminate a Plan or to have a trustee appointed to
administer a Plan, together with copies of each such notice, (vi) any Borrower
or any member of the Controlled Group shall receive any favorable or unfavorable
determination letter from the Internal Revenue Service regarding the
qualification of a Plan under Section 401(a) of the Code, together with copies
of each such letter; (vii) any Borrower or any member of the Controlled Group
shall receive a notice regarding the imposition of withdrawal liability,
together with copies of each such notice; (viii) any Borrower or any member of
the Controlled Group shall fail to make a required installment or any other
required payment under Section 412 of the Code on or before the due date for
such installment or payment; (ix) any Borrower or any member of the Controlled
Group knows that (a) a Multiemployer Plan has been terminated, (b) the
administrator or plan sponsor of a Multiemployer Plan intends to terminate a
Multiemployer Plan, or (c) the PBGC has instituted or will institute proceedings
under Section 4042 of ERISA to terminate a Multiemployer Plan.
9.16. FCC AND PRTRB NOTICES AND REQUESTS. Furnish Agent with immediate
written notice that (a) the FCC has re-classified any Borrower as a dominant
inter-exchange carrier, (b) any Borrower knows or has reason to know that the
FCC intends to exercise its statutory power to closely regulate the charges,
practices or classifications of "non-dominant" carriers, (c) the FCC or PRTRB,
as applicable, has revoked or denied the renewal of any Licenses or (d) any
Borrower has failed to comply in any material respects with the reporting or
other requirements of the FCC or PRTRB.
9.17. SECURITIES REPORTS. Promptly furnish Agent and Lenders with
copies of all regular, periodic and special reports which TresCom files with the
Securities and Exchange Commission or any governmental authority which may be
substituted therefor, or any national securities exchange.
9.18. OAN NOTICES. Furnish Agent with immediate written notice of (i)
the occurrence of a Reserve Event under and as defined in the OAN Services
Agreement, (ii) the occurrence of a default thereunder or (iii) the termination
thereof.
9.19. ADDITIONAL DOCUMENTS. Execute and deliver to Agent, upon
request, such documents and agreements as Agent may, from time to time,
reasonably request to carry out the purposes, terms or conditions of this
Agreement.
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X. EVENTS OF DEFAULT.
The occurrence of any one or more of the following events shall
constitute an "Event of Default":
10.1. failure by any Borrower to pay any principal or interest on the
Obligations when due, whether at maturity or by reason of acceleration pursuant
to the terms of this Agreement, or by required prepayment or failure to pay any
other liabilities or make any other payment, fee or charge provided for herein
when due or in any Other Document;
10.2. any representation or warranty made or deemed made by any
Borrower in this Agreement or any Other Document or in any certificate, document
or financial or other statement furnished at any time in connection herewith or
therewith shall prove to have been misleading in any material respect on the
date when made or deemed to have been made;
10.3. failure by any Borrower to (i) furnish financial information
when due or when reasonably requested, or (ii) permit the inspection of its
books or records;
10.4. issuance of a notice of Lien, levy, assessment, injunction or
attachment against a material portion of one or more Borrowers' property in
excess of $400,000 which is not lifted, satisfied, stayed or discharged within
forty (40) days of the issuance of such notice, levy, assessment, injunction or
attachment and which is being contested in good faith and Borrowers have
established reserves in an amount satisfactory to Agent;
10.5. except as otherwise provided for in Sections 10.1 and 10.3,
failure or neglect of any Borrower to perform, keep or observe any term,
provision, condition, covenant herein contained, or contained in any other
agreement or arrangement, now or hereafter entered into between any Borrower and
Agent or any Lender, except for a failure or neglect of Borrowers to perform,
keep or observe any term, provision, condition or covenant, contained in
Sections 4.6, 4.7, 4.9, 4.11, 4.13 (solely with respect to any such taxes,
assessments or Charges not to exceed $25,000 in the aggregate), 6.1, 6.3, 6.4,
9.4 or 9.6 hereof which is cured within thirty (30) days from the occurrence of
such failure or neglect;
10.6. any judgment or judgments are rendered or judgment liens filed
against one or more Borrowers for an aggregate amount in excess of $400,000
which within forty (40) days of such rendering or filing is not either
satisfied, stayed or discharged of record and such judgments or judgment liens
shall be contested in good faith and Borrowers establish reserves in an amount
satisfactory to Agent;
10.7. any Borrower shall (i) apply for, consent to or suffer the
appointment of, or the taking of possession by, a
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receiver, custodian, trustee, liquidator or similar fiduciary of itself or of
all or a substantial part of its property, (ii) make a general assignment for
the benefit of creditors, (iii) commence a voluntary case under any state or
federal bankruptcy laws (as now or hereafter in effect), (iv) be adjudicated a
bankrupt or insolvent, (v) file a petition seeking to take advantage of any
other law providing for the relief of debtors, (vi) acquiesce to, or fail to
have dismissed, within sixty (60) days, any petition filed against it in any
involuntary case under such bankruptcy laws, or (vii) take any action for the
purpose of effecting any of the foregoing;
10.8. any Borrower shall admit in writing its inability, or be
generally unable, to pay its debts as they become due or cease operations of its
present business;
10.9. any Affiliate (other than Warburg or a Warburg Affiliate) or any
Subsidiary of any Borrower, or any Guarantor, shall (i) apply for, consent to or
suffer the appointment of, or the taking of possession by, a receiver,
custodian, trustee, liquidator or similar fiduciary of itself or of all or a
substantial part of its property, (ii) admit in writing its inability, or be
generally unable, to pay its debts as they become due or cease operations of its
present business, (iii) make a general assignment for the benefit of creditors,
(iv) commence a voluntary case under any state or federal bankruptcy laws (as
now or hereafter in effect), (v) be adjudicated a bankrupt or insolvent, (vi)
file a petition seeking to take advantage of any other law providing for the
relief of debtors, (vii) acquiesce to, or fail to have dismissed, within sixty
(60) days, any petition filed against it in any involuntary case under such
bankruptcy laws, or (viii) take any action for the purpose of effecting any of
the foregoing;
10.10. any change in any Borrower's condition or affairs (financial or
otherwise) which in Agent's reasonable opinion has a Material Adverse Effect;
10.11. any Lien created hereunder or provided for hereby or under any
Other Document for any reason ceases to be or is not a valid and perfected Lien
having a first priority interest or, in the case of Collateral securing the SBA
Loan, a second priority interest therein;
10.12. a default of the obligations of any Borrower under any other
agreement to which it is a party in a principal amount in excess of $100,000
shall occur which default is not cured within any applicable grace period and
which default causes the acceleration of such obligations;
10.13. termination or breach of any Guaranty or similar agreement
executed and delivered to Agent in connection with the Obligations of any
Borrower, or if any Guarantor attempts to terminate, challenges the validity of,
or its liability under, any such Guaranty or similar agreement;
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10.14. any Change of Ownership or Change of Control shall occur;
10.15. (i) any Governmental Body shall (A) revoke, terminate, suspend
or adversely modify any license, permit, patent trademark or tradename of any
Borrower, the continuation of which is material to the continuation of
Borrowers' business taken as a whole , or (B) commence proceedings to suspend,
revoke, terminate or adversely modify any such license, permit, trademark,
tradename or patent and such proceedings shall not be dismissed or discharged
within sixty (60) days, or (c) schedule or conduct a hearing on the renewal of
any license, permit, trademark, tradename or patent necessary for the
continuation of Borrowers' businesses taken as a whole and the staff of such
Governmental Body issues a report recommending the termination, revocation,
suspension or material, adverse modification of such license, permit, trademark,
tradename or patent; (ii) any agreement which is necessary or material to the
operation of Borrowers' businesses taken as a whole shall be revoked or
terminated and not replaced by a substitute acceptable to Agent within thirty
(30) days after the date of such revocation or termination, and such revocation
or termination and non- replacement would reasonably be expected to have a
Material Adverse Effect;
10.16. any portion of the Collateral shall be seized or taken by a
Governmental Body, or any Borrower or the title and rights of any Borrower or
any Original Owner which is the owner of any material portion of the Collateral
shall have become the subject matter of litigation which might, in the opinion
of Agent, upon final determination, result in impairment or loss of the security
provided by this Agreement or the Other Documents;
10.17. the operations of Borrowers' businesses taken as a whole are
interrupted at any time for any period of four (4) consecutive days, unless such
Borrower shall (i) be entitled to receive for such period of interruption,
proceeds of business interruption insurance sufficient to assure that its per
diem cash needs during such period is at least equal to its average per diem
cash needs for the consecutive three month period immediately preceding the
initial date of interruption and (ii) receive such proceeds in the amount
described in clause (i) preceding not later than thirty (30) days following the
initial date of any such interruption; provided, however, that notwithstanding
the provisions of clauses (i) and (ii) of this section, an Event of Default
shall be deemed to have occurred if such Borrower shall be receiving the
proceeds of business interruption insurance for a period of sixty (60)
consecutive days; or
10.18. an event or condition specified in Sections 7.16 or 9.15 hereof
shall occur or exist with respect to any Plan and, as a result of such event or
condition, together with all other such events or conditions, any Borrower or
any member of the Controlled Group shall incur, or in the opinion of Agent be
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reasonably likely to incur, a liability to a Plan or the PBGC (or both) which,
in the reasonable judgment of Agent, would have a Material Adverse Effect.
XI. LENDERS' RIGHTS AND REMEDIES AFTER DEFAULT.
11.1. RIGHTS AND REMEDIES. (a) Upon the occurrence of (i) an Event of
Default pursuant to Section 10.7 all Obligations shall be immediately due and
payable and this Agreement and the obligation of Lenders to make Advances shall
be deemed terminated; and, (ii) any of the other Events of Default and at any
time thereafter (such Event of Default not having previously been cured), at the
option of Required Lenders all Obligations shall be immediately due and payable
and Lenders shall have the right to terminate this Agreement and to terminate
the obligation of Lenders to make Advances and (iii) a filing of a petition
against Borrower in any involuntary case under any state or federal bankruptcy
laws, the obligation of Lenders to make Advances hereunder shall be terminated
other than as may be required by an appropriate order of the bankruptcy court
having jurisdiction over any Borrower. Upon the occurrence of any Event of
Default, Agent shall have the right to exercise any and all other rights and
remedies provided for herein, under the Uniform Commercial Code and at law or
equity generally, including, without limitation, the right to foreclose the
security interests granted herein and to realize upon any Collateral by any
available judicial procedure and/or to take possession of and sell any or all of
the Collateral with or without judicial process. Agent may enter any of
Borrower's premises without legal process and without incurring liability to any
Borrower therefor, and Agent may thereupon, or at any time thereafter, in its
discretion without notice or demand, take the Collateral and remove the same to
such place as Agent may deem advisable and Agent may require Borrowers to make
the Collateral available to Agent at a convenient place. With or without having
the Collateral at the time or place of sale, Agent may sell the Collateral, or
any part thereof, at public or private sale, at any time or place, in one or
more sales, at such price or prices, and upon such terms, either for cash,
credit or future delivery, as Agent may elect. Except as to that part of the
Collateral which is perishable or threatens to decline speedily in value or is
of a type customarily sold on a recognized market, Agent shall give Borrowers
reasonable notification of such sale or sales, it being agreed that in all
events written notice mailed to Borrowers at least five (5) days prior to such
sale or sales is reasonable notification. At any public sale Agent or any Lender
may bid for and become the purchaser, and Agent, any Lender or any other
purchaser at any such sale thereafter shall hold the Collateral sold absolutely
free from any claim or right of whatsoever kind, including any equity of
redemption and such right and equity are hereby expressly waived and released by
each Borrower. In connection with the exercise of the foregoing remedies, Agent
is granted permission to use all of each Borrower's trademarks, trade styles,
trade names, patents, patent
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applications, licenses, franchises and other proprietary rights which are used
in connection with the exercise by Agent of its rights with respect to the
Collateral. The proceeds realized from the sale and/or collection of any
Collateral shall be applied as follows: first, to the reasonable costs, expenses
and attorneys' fees and expenses incurred by Agent for collection and for
acquisition, completion, protection, removal, storage, sale and delivery of the
Collateral; second, to interest due upon any of the Obligations and any fees
payable under this Agreement; and, third, to the principal of the Obligations.
If any deficiency shall arise, Borrowers shall remain liable to Agent and
Lenders therefor.
(b) Notwithstanding anything to the contrary contained in this
Agreement and subsection (a) of this Section 11, Agent will not take any action
pursuant to this Agreement which would constitute or result in any assignment of
a License owned by any Borrower or any Change of Control of such Borrower if
such assignment or Change of Control would require under then existing law
(including, without limitation, the FCC Rules), the prior approval of the FCC
and PRTRB, without first obtaining such approval of the FCC and PRTRB, as
applicable.
11.2. AGENT'S DISCRETION. Agent shall have the right in its sole
discretion to determine which rights, Liens, security interests or remedies
Agent may at any time pursue, relinquish, subordinate, or modify or to take any
other action with respect thereto and such determination will not in any way
modify or affect any of Agent's or Lenders' rights hereunder.
11.3. SETOFF. In addition to any other rights which Agent or any Lender
may have under applicable law, upon the occurrence of an Event of Default
hereunder, Agent and such Lender shall have a right to apply any Borrower's
property held by Agent and such Lender to reduce the Obligations.
11.4. RIGHTS AND REMEDIES NOT EXCLUSIVE. The enumeration of the
foregoing rights and remedies is not intended to be exhaustive and the exercise
of any right or remedy shall not preclude the exercise of any other right or
remedies provided for herein or otherwise provided by law, all of which shall be
cumulative and not alternative.
XII. WAIVERS AND JUDICIAL PROCEEDINGS.
12.1. WAIVER OF NOTICE. Each Borrower hereby waives demand,
presentment, protest and notice thereof with respect to any and all instruments,
notice of acceptance hereof, notice of loans or advances made, credit extended,
Collateral received or delivered, or any other action taken in reliance hereon,
and all other demands and notices of any description, except such as are
expressly provided for herein.
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12.2. DELAY. No delay or omission on Agent's or any Lender's part in
exercising any right, remedy or option shall operate as a waiver of such or any
other right, remedy or option or of any default.
12.3. JURY WAIVER. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES
ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A)
ARISING UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR (B) IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO
OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
SOUNDING IN CONTRACT OR TORT OR OTHERWISE AND EACH PARTY HEREBY CONSENTS THAT
ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENTS OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
XIII. EFFECTIVE DATE AND TERMINATION.
13.1. TERM. This Agreement, which shall inure to the benefit of and
shall be binding upon the respective successors and permitted assigns of each
Borrower, Agent and each Lender, shall become effective on the date hereof and
shall continue in full force and effect until July 29, 1998 (the "Term") unless
sooner terminated as herein provided; PROVIDED, HOWEVER, that the Term will be
automatically extended to July 30, 2002 after all required regulatory approvals
are obtained and effective, which approvals shall be in substance satisfactory
to Agent. Borrowers may terminate this Agreement at any time upon ninety (90)
days' prior written notice upon payment in full of the Obligations. In the event
that Borrowers elect to terminate this Agreement and the Obligations are prepaid
in full and the commitment of Agent and Lenders to make Advances to Borrower
shall be terminated prior to the last day of the Term (the date of such
prepayment hereinafter referred to as the "Early Termination Date"), Borrowers
shall pay to Agent for the benefit of Lenders an early termination fee in an
amount equal to (x) one percent (1.0%) of the Maximum Revolving Advance Amount
if the Early Termination Date occurs on or after the Closing Date to and
including the date immediately preceding the second anniversary of the Closing
Date, and (y) one half of one percent (.5%) of the Maximum Revolving Advance
Amount if the Early Termination Date occurs on or after the second anniversary
of the Closing Date to and including the date immediately preceding the third
anniversary of the Closing Date.
13.2. TERMINATION. The termination of the Agreement shall not affect
any Borrower's, Agent's or any Lender's rights,
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or any of the Obligations having their inception prior to the effective date of
such termination, and the provisions hereof shall continue to be fully operative
until all transactions entered into, rights or interests created or Obligations
have been fully disposed of, concluded or liquidated. The security interests,
Liens and rights granted to Agent and Lenders hereunder and the financing
statements filed hereunder shall continue in full force and effect,
notwithstanding the termination of this Agreement or the fact that Borrowers'
Account may from time to time be temporarily in a zero or credit position, until
all of the Obligations of each Borrower have been paid or performed in full
after the termination of this Agreement or each Borrower has furnished Agent and
Lenders with an indemnification satisfactory to Agent and Lenders with respect
thereto. Accordingly, each Borrower waives any rights which it may have under
Section 9-404(1) of the Uniform Commercial Code to demand the filing of
termination statements with respect to the Collateral, and Agent shall not be
required to send such termination statements to each Borrower, or to file them
with any filing office, unless and until this Agreement shall have been
terminated in accordance with its terms and all Obligations paid in full in
immediately available funds. All representations, warranties, covenants, waivers
and agreements contained herein shall survive termination hereof until all
Obligations are paid or performed in full.
XIV. REGARDING AGENT.
14.1. APPOINTMENT. Each Lender hereby designates PNC to act as Agent
for such Lender under this Agreement and the Other Documents. Each Lender hereby
irrevocably authorizes Agent to take such action on its behalf under the
provisions of this Agreement and the Other Documents and to exercise such powers
and to perform such duties hereunder and thereunder as are specifically
delegated to or required of Agent by the terms hereof and thereof and such other
powers as are reasonably incidental thereto and Agent shall hold all Collateral,
payments of principal and interest, fees (except the fees set forth in Sections
3.3(a) and 3.4), charges and collections (without giving effect to any
collection days) received pursuant to this Agreement, for the ratable benefit of
Lenders. Agent may perform any of its duties hereunder by or through its agents
or employees. As to any matters not expressly provided for by this Agreement
(including without limitation, collection of the Note) Agent shall not be
required to exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding; PROVIDED, HOWEVER, that Agent shall not be
required to take any action which exposes Agent to liability or which is
contrary to this Agreement or the Other Documents or applicable law unless Agent
is furnished with an indemnification reasonably satisfactory to Agent with
respect thereto.
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14.2. NATURE OF DUTIES. Agent shall have no duties or responsibilities
except those expressly set forth in this Agreement and the Other Documents.
Neither Agent nor any of its officers, directors, employees or agents shall be
(i) liable for any action taken or omitted by them as such hereunder or in
connection herewith, unless caused by their gross (not mere) negligence or
willful misconduct, or (ii) responsible in any manner for any recitals,
statements, representations or warranties made by any Borrower or any officer
thereof contained in this Agreement, or in any of the Other Documents or in any
certificate, report, statement or other document referred to or provided for in,
or received by Agent under or in connection with, this Agreement or any of the
Other Documents or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement, or any of the Other Documents
or for any failure of any Borrower to perform its obligations hereunder. Agent
shall not be under any obligation to any Lender to ascertain or to inquire as to
the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any of the Other Documents, or to inspect the
properties, books or records of any Borrower. The duties of Agent as respects
the Advances to Borrowers shall be mechanical and administrative in nature;
Agent shall not have by reason of this Agreement a fiduciary relationship in
respect of any Lender; and nothing in this Agreement, expressed or implied, is
intended to or shall be so construed as to impose upon Agent any obligations in
respect of this Agreement except as expressly set forth herein.
14.3. LACK OF RELIANCE ON AGENT AND RESIGNATION. Independently and
without reliance upon Agent or any other Lender, each Lender has made and shall
continue to make (i) its own independent investigation of the financial
condition and affairs of each Borrower in connection with the making and the
continuance of the Advances hereunder and the taking or not taking of any action
in connection herewith, and (ii) its own appraisal of the creditworthiness of
each Borrower. Agent shall have no duty or responsibility, either initially or
on a continuing basis, to provide any Lender with any credit or other
information with respect thereto, whether coming into its possession before
making of the Advances or at any time or times thereafter except as shall be
provided by any Borrower pursuant to the terms hereof. Agent shall not be
responsible to any Lender for any recitals, statements, information,
representations or warranties herein or in any agreement, document, certificate
or a statement delivered in connection with or for the execution, effectiveness,
genuineness, validity, enforceability, collectibility or sufficiency of this
Agreement or any Other Document, or of the financial condition of any Borrower,
or be required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of this Agreement, the
Note, the Other Documents or the financial condition of any Borrower, or the
existence of any Event of Default or any Default.
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Agent may resign on sixty (60) days' written notice to each of Lenders
and Borrowing Agent and upon such resignation, the Required Lenders will
promptly designate a successor Agent reasonably satisfactory to Borrowers.
Any such successor Agent shall succeed to the rights, powers and duties
of Agent, and the term "Agent" shall mean such successor agent effective upon
its appointment, and the former Agent's rights, powers and duties as Agent shall
be terminated, without any other or further act or deed on the part of such
former Agent. After any Agent's resignation as Agent, the provisions of this
Article XIV shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement.
14.4. CERTAIN RIGHTS OF AGENT. If Agent shall request instructions from
Lenders with respect to any act or action (including failure to act) in
connection with this Agreement or any Other Document, Agent shall be entitled to
refrain from such act or taking such action unless and until Agent shall have
received instructions from the Required Lenders; and Agent shall not incur
liability to any Person by reason of so refraining. Without limiting the
foregoing, Lenders shall not have any right of action whatsoever against Agent
as a result of its acting or refraining from acting hereunder in accordance with
the instructions of the Required Lenders.
14.5. RELIANCE. Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, statement,
certificate, telex, teletype or telecopier message, cablegram, order or other
document or telephone message believed by it to be genuine and correct and to
have been signed, sent or made by the proper person or entity, and, with respect
to all legal matters pertaining to this Agreement and the Other Documents and
its duties hereunder, upon advice of counsel selected by it. Agent may employ
agents and attorneys-in-fact and shall not be liable for the default or
misconduct of any such agents or attorneys-in-fact selected by Agent with
reasonable care.
14.6. NOTICE OF DEFAULT. Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder or under
the Other Documents, unless Agent has received notice from a Lender or a
Borrower referring to this Agreement or the Other Documents, describing such
Default or Event of Default and stating that such notice is a "notice of
default". In the event that Agent receives such a notice, Agent shall give
notice thereof to Lenders. Agent shall take such action with respect to such
Default or Event of Default as shall be reasonably directed by the Required
Lenders; PROVIDED, THAT, unless and until Agent shall have received such
directions, Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of Lenders.
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14.7. INDEMNIFICATION. To the extent Agent is not reimbursed and
indemnified by Borrowers, each Lender will reimburse and indemnify Agent in
proportion to its respective portion of the Advances (or, if no Advances are
outstanding, according to its Commitment Percentage), from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by or asserted against Agent in performing its
duties hereunder, or in any way relating to or arising out of this Agreement or
any Other Document; PROVIDED THAT, Lenders shall not be liable for any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from Agent's gross
(not mere) negligence or willful misconduct.
14.8. AGENT IN ITS INDIVIDUAL CAPACITY. With respect to the obligation
of Agent to lend under this Agreement, the Advances made by it shall have the
same rights and powers hereunder as any other Lender and as if it were not
performing the duties as Agent specified herein; and the term "Lender" or any
similar term shall, unless the context clearly otherwise indicates, include
Agent in its individual capacity as a Lender. Agent may engage in business with
any Borrower as if it were not performing the duties specified herein, and may
accept fees and other consideration from any Borrower for services in connection
with this Agreement or otherwise without having to account for the same to
Lenders.
14.9. DELIVERY OF DOCUMENTS. To the extent Agent receives financial
statements required under Sections 9.7 and 9.9 from any Borrower pursuant to the
terms of this Agreement, Agent will promptly furnish such documents and
information to Lenders.
14.10. BORROWERS' UNDERTAKING TO AGENT. Without prejudice to their
respective obligations to Lenders under the other provisions of this Agreement,
each Borrower hereby undertakes with Agent to pay to Agent from time to time on
demand all amounts from time to time due and payable by it for the account of
Agent or Lenders or any of them pursuant to this Agreement to the extent not
already paid. Any payment made pursuant to any such demand shall PRO TANTO
satisfy the relevant Borrower's obligations to make payments for the account of
Lenders or the relevant one or more of them pursuant to this Agreement.
XV. BORROWING AGENCY.
15.1. BORROWING AGENCY PROVISIONS.
(a) Each Borrower hereby irrevocably designates Borrowing Agent
to be its attorney and agent and in such capacity to borrow, sign and endorse
notes, and execute and deliver all instruments, documents, writings and further
assurances now or hereafter required hereunder, on behalf of such Borrower or
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Borrowers, and hereby authorizes Agent to pay over or credit all loan proceeds
hereunder in accordance with the request of Borrowing Agent.
(b) The handling of this credit facility as a co- borrowing
facility with a borrowing agent in the manner set forth in this Agreement is
solely as an accommodation to Borrowers and at their request. Neither Agent nor
any Lender shall incur liability to Borrowers as a result thereof. To induce
Agent and Lenders to do so and in consideration thereof, each Borrower hereby
indemnifies Agent and each Lender and holds Agent and each Lender harmless from
and against any and all liabilities, expenses, losses, damages and claims of
damage or injury asserted against Agent or any Lender by any Person arising from
or incurred by reason of the handling of the financing arrangements of Borrowers
as provided herein, reliance by Agent or any Lender on any request or
instruction from Borrowing Agent or any other action taken by Agent or any
Lender with respect to this Section 15.1 except due to willful misconduct or
gross (not mere) negligence by the indemnified party.
(c) All Obligations shall be joint and several, and each
Borrower shall make payment upon the maturity of the Obligations by acceleration
or otherwise, and such obligation and liability on the part of each Borrower
shall in no way be affected by any extensions, renewals and forbearance granted
to Agent or any Lender to any Borrower, failure of Agent or any Lender to give
any Borrower notice of borrowing or any other notice, any failure of Agent or
any Lender to pursue or preserve its rights against any Borrower, the release by
Agent or any Lender of any Collateral now or thereafter acquired from any
Borrower, and such agreement by each Borrower to pay upon any notice issued
pursuant thereto is unconditional and unaffected by prior recourse by Agent or
any Lender to the other Borrowers or any Collateral for such Borrower's
Obligations or the lack thereof.
15.2. WAIVER OF SUBROGATION. Each Borrower expressly waives any and all
rights of subrogation, reimbursement, indemnity, exoneration, contribution of
any other claim which such Borrower may now or hereafter have against the other
Borrowers or other Person directly or contingently liable for the Obligations
hereunder, or against or with respect to the other Borrowers' property
(including, without limitation, any property which is Collateral for the
Obligations), arising from the existence or performance of this Agreement, until
termination of this Agreement and repayment in full of the Obligations.
XVI. MISCELLANEOUS.
16.1. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applied to
contracts to be performed wholly within the State of New York. Any judicial
proceeding brought by or against any
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Borrower with respect to any of the Obligations, this Agreement or any Other
Document may be brought in any court of competent jurisdiction in the State of
New York, United States of America, and, by execution and delivery of this
Agreement, each Borrower accepts for itself and in connection with its
properties, generally and unconditionally, the non-exclusive jurisdiction of the
aforesaid courts, and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Agreement. Each Borrower hereby waives personal
service of any and all process upon it and consents that all such service of
process may be made by registered mail (return receipt requested) directed to
Borrowing Agent at its address set forth in Section 16.6 and service so made
shall be deemed completed five (5) days after the same shall have been so
deposited in the mails of the United States of America, or, at the Agent's
and/or any Lender's option, by service upon Borrowing Agent which each Borrower
irrevocably appoints as such Borrower's Agent for the purpose of accepting
service within the State of New York. Nothing herein shall affect the right to
serve process in any manner permitted by law or shall limit the right of Agent
or any Lender to bring proceedings against any Borrower in the courts of any
other jurisdiction. Each Borrower waives any objection to jurisdiction and venue
of any action instituted hereunder and shall not assert any defense based on
lack of jurisdiction or venue or based upon FORUM NON CONVENIENS. Any judicial
proceeding by any Borrower against Agent or any Lender involving, directly or
indirectly, any matter or claim in any way arising out of, related to or
connected with this Agreement or any Other Document, shall be brought only in a
federal or state court located in the County of New York, State of New York.
16.2. ENTIRE UNDERSTANDING. (a) This Agreement and the documents
executed concurrently herewith contain the entire understanding between each
Borrower, Agent and each Lender and supersedes all prior agreements and
understandings, if any, relating to the subject matter hereof. Any promises,
representations, warranties or guarantees not herein contained and hereinafter
made shall have no force and effect unless in writing, signed by each
Borrower's, Agent's and each Lender's respective officers. Neither this
Agreement nor any portion or provisions hereof may be changed, modified,
amended, waived, supplemented, discharged, cancelled or terminated orally or by
any course of dealing, or in any manner other than by an agreement in writing,
signed by the party to be charged. Each Borrower acknowledges that it has been
advised by counsel in connection with the execution of this Agreement and Other
Documents and is not relying upon oral representations or statements
inconsistent with the terms and provisions of this Agreement.
(b) The Required Lenders, Agent with the consent in writing of
the Required Lenders, and Borrowers may, subject to the provisions of this
Section 16.2 (b), from time to time enter into written supplemental agreements
to this Agreement or the Other Documents executed by Borrowers, for the purpose
of adding
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or deleting any provisions or otherwise changing, varying or waiving in any
manner the rights of Lenders, Agent or Borrowers thereunder or the conditions,
provisions or terms thereof or waiving any Event of Default thereunder, but only
to the extent specified in such written agreements; PROVIDED, HOWEVER, that no
such supplemental agreement shall, without the consent of all Lenders:
(i) increase the Commitment Percentage of any Lender.
(ii) extend the maturity of any Note or the due date
for any amount payable hereunder, or decrease the rate of interest or reduce any
fee payable by Borrowers to Lenders pursuant to this Agreement.
(iii) alter the definition of the term Required Lenders or
alter, amend or modify this Section 16.2(b).
(iv) release any Collateral during any calendar year
(other than in accordance with the provisions of this Agreement) having an
aggregate value in excess of $250,000.
(v) change the rights and duties of Agent.
(vi) permit any Revolving Advance to be made if after
giving effect thereto the total of Advances outstanding hereunder would exceed
the Formula Amount for more than sixty (60) consecutive Business Days or exceed
one hundred and ten percent (110%) of the Formula Amount.
(vii) increase the Advance Rates above the Advance Rates
in effect on the Closing Date.
(viii) increase the Maximum Revolving Advance Amount.
Any such supplemental agreement shall apply equally to each Lender and shall be
binding upon Borrowers, Lenders and Agent and all future holders of the
Obligations. In the case of any waiver, Borrowers, Agent and Lenders shall be
restored to their former positions and rights, and any Event of Default waived
shall be deemed to be cured and not continuing, but no waiver of a specific
Event of Default shall extend to any subsequent Event of Default (whether or not
the subsequent Event of Default is the same as the Event of Default which was
waived), or impair any right consequent thereon.
In the event that Agent requests the consent of a Lender pursuant to
this Section 16.2 and such Lender shall not respond or reply to Agent in writing
within five (5) days of delivery of such request, such Lender shall be deemed to
have consented to the matter that was the subject of the request. In the event
that Agent requests the consent of a Lender pursuant to this Section 16.2 and
such consent is denied, then PNC may, at its
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option, require such Lender to assign its interest in the Advances to PNC or to
another Lender or to any other Person designated by the Agent (the "Designated
Lender"), for a price equal to the then outstanding principal amount thereof
plus accrued and unpaid interest and fees due such Lender, which interest and
fees shall be paid when collected from Borrower. In the event Agent elects to
require any Lender to assign its interest to Agent or to the Designated Lender,
PNC will so notify such Lender in writing within forty five (45) days following
such Lender's denial, and such Lender will assign its interest to Agent or the
Designated Lender no later than five (5) days following receipt of such notice
pursuant to a Commitment Transfer Supplement executed by such Lender, Agent or
the Designated Lender, as appropriate.
16.3. SUCCESSORS AND ASSIGNS; PARTICIPATIONS; NEW LENDERS.
(a) This Agreement shall be binding upon and inure to the
benefit of Borrowers, Agent, each Lender, all future holders of the Obligations
and their respective successors and assigns, except that no Borrower may assign
or transfer any of its rights or obligations under this Agreement without the
prior written consent of Agent and each Lender.
(b) Each Borrower acknowledges that in the regular course of
commercial banking business one or more Lenders may at any time and from time to
time sell participating interests in the Advances to other financial
institutions (each such transferee or purchaser of a participating interest, a
"Transferee"). Each Transferee may exercise all rights of payment (including
without limitation rights of set-off) with respect to the portion of such
Advances held by it or other Obligations payable hereunder as fully as if such
Transferee were the direct holder thereof provided that Borrowers shall not be
required to pay to any Transferee more than the amount which it would have been
required to pay to Lender which granted an interest in its Advances or other
Obligations payable hereunder to such Transferee had such Lender retained such
interest in the Advances hereunder or other Obligations payable hereunder and in
no event shall Borrowers be required to pay any such amount arising from the
same circumstances and with respect to the same Advances or other Obligations
payable hereunder to both such Lender and such Transferee. Each Borrower hereby
grants to any Transferee a continuing security interest in any deposits, moneys
or other property actually or constructively held by such Transferee as security
for the Transferee's interest in the Advances.
(c) Any Lender may with the consent of Agent which shall not be
unreasonably withheld or delayed sell, assign or transfer all or any part of its
rights under this Agreement and the Other Documents to one or more additional
banks or financial institutions and one or more additional banks or financial
institutions may commit to make Advances hereunder (each a
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"Purchasing Lender"), in minimum amounts of not less than $5,000,000 and
increments of $1,000,000 thereafter, pursuant to a Commitment Transfer
Supplement, executed by a Purchasing Lender, the transferor Lender, and Agent
and delivered to Agent for recording. Upon such execution, delivery, acceptance
and recording, from and after the transfer effective date determined pursuant to
such Commitment Transfer Supplement, (i) Purchasing Lender thereunder shall be a
party hereto and, to the extent provided in such Commitment Transfer Supplement,
have the rights and obligations of a Lender thereunder with a Commitment
Percentage as set forth therein, and (ii) the transferor Lender thereunder
shall, to the extent provided in such Commitment Transfer Supplement, be
released from its obligations under this Agreement, the Commitment Transfer
Supplement creating a novation for that purpose. Such Commitment Transfer
Supplement shall be deemed to amend this Agreement to the extent, and only to
the extent, necessary to reflect the addition of such Purchasing Lender and the
resulting adjustment of the Commitment Percentages arising from the purchase by
such Purchasing Lender of all or a portion of the rights and obligations of such
transferor Lender under this Agreement and the Other Documents. Borrowers hereby
consent to the addition of such Purchasing Lender and the resulting adjustment
of the Commitment Percentages arising from the purchase by such Purchasing
Lender of all or a portion of the rights and obligations of such transferor
Lender under this Agreement and the Other Documents. Borrowers shall execute and
deliver such further documents and do such further acts and things in order to
effectuate the foregoing.
(d) Agent shall maintain at its address a copy of each
Commitment Transfer Supplement delivered to it and a register (the "Register")
for the recordation of the names and addresses of the Advances owing to each
Lender from time to time. The entries in the Register shall be conclusive, in
the absence of manifest error, and Borrowers, Agent and Lenders may treat each
Person whose name is recorded in the Register as the owner of the Advance
recorded therein for the purposes of this Agreement. The Register shall be
available for inspection by Borrowers or any Lender at any reasonable time and
from time to time upon reasonable prior notice. Agent shall receive a fee in the
amount of $2,500 payable by the applicable Purchasing Lender upon the effective
date of each transfer or assignment to such Purchasing Lender.
(e) Borrowers authorize each Lender to disclose to any
Transferee or Purchasing Lender and any prospective Transferee or Purchasing
Lender any and all financial information in such Lender's possession concerning
Borrowers which has been delivered to such Lender by or on behalf of Borrowers
pursuant to this Agreement or in connection with such Lender's credit evaluation
of Borrowers.
16.4. APPLICATION OF PAYMENTS. Agent shall have the continuing and
exclusive right to apply or reverse and re-apply any payment and any and all
proceeds of Collateral to any portion
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of the Obligations. To the extent that any Borrower makes a payment or Agent or
any Lender receives any payment or proceeds of the Collateral for any Borrower's
benefit, which are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, debtor in
possession, receiver, custodian or any other party under any bankruptcy law,
common law or equitable cause, then, to such extent, the Obligations or part
thereof intended to be satisfied shall be revived and continue as if such
payment or proceeds had not been received by Agent or such Lender.
16.5. INDEMNITY. Each Borrower shall indemnify Agent, each Lender and
each of their respective officers, directors, Affiliates, employees and agents
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses and disbursements of any
kind or nature whatsoever (including, without limitation, reasonable fees and
disbursements of counsel) which may be imposed on, incurred by, or asserted
against Agent or any Lender in any litigation, proceeding or investigation
instituted or conducted by any governmental agency or instrumentality or any
other Person with respect to any aspect of, or any transaction contemplated by,
or referred to in, or any matter related to, this Agreement or the Other
Documents, whether or not Agent or any Lender is a party thereto, except to the
extent that any of the foregoing arises out of the willful misconduct or gross
(not mere) negligence of the party being indemnified.
16.6. NOTICE. Any notice or request hereunder may be given to any
Borrower or to Agent or any Lender at their respective addresses set forth below
or at such other address as may hereafter be specified in a notice designated as
a notice of change of address under this Section. Any notice or request
hereunder shall be given by (a) hand delivery, (b) overnight courier, (c)
registered or certified mail, return receipt requested, (d) telex or telegram,
subsequently confirmed by registered or certified mail, or (e) telecopy to the
number set out below (or such other number as may hereafter be specified in a
notice designated as a notice of change of address) with electronic confirmation
of its receipt. Any notice or other communication required or permitted pursuant
to this Agreement shall be deemed given (a) when personally delivered to any
officer of the party to whom it is addressed, (b) on the earlier of actual
receipt thereof or three (3) days following posting thereof by certified or
registered mail, postage prepaid, or (c) upon actual receipt thereof when sent
by a recognized overnight delivery service or (d) upon actual receipt thereof
when sent by telecopier to the number set forth below with electronic
confirmation of its receipt, in each case addressed to each party at its address
set forth below or at such other address as has been furnished in writing by a
party to the other by like notice:
(A) If to Agent or PNC Bank, National Association
PNC at: Xxx Xxxxx Xxxxxx Xxxxxxxxx
Xxxx Xxxxxxxxx, Xxx Xxxxxx 00000
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Attention: Xxxx Peak
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy to: Xxxx & Hessen LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx X. Xxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(B) If to a Lender other than Agent, as specified on the
signature pages hereof
(C) If to Borrowing Agent
or any Borrower, at: TresCom International, Inc.
000 Xxxx Xxxxxxx Xxxx.
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy to: Xxxxxx Xxxx & Xxxxxx LLP
000 X. Xxxxxxxx Xxxxxxxxx
0000 Xxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
16.7. SURVIVAL. The obligations of Borrowers under Sections 2.2(f),
3.7, 3.8, 3.9, 4.19(g), 14.7 and 16.5 shall survive termination of this
Agreement and the Other Documents and payment in full of the Obligations.
16.8. SEVERABILITY. If any part of this Agreement is contrary to,
prohibited by, or deemed invalid under applicable laws or regulations, such
provision shall be inapplicable and deemed omitted to the extent so contrary,
prohibited or invalid, but the remainder hereof shall not be invalidated thereby
and shall be given effect so far as possible.
16.9. EXPENSES. All reasonable costs and out-of-pocket expenses
including, without limitation, reasonable attorneys' fees and disbursements
incurred by Agent, Agent on behalf of Lenders and Lenders (a) in all efforts
made to enforce payment of any Obligation or effect collection of any
Collateral, or (b) in connection with the entering into, modification,
amendment, administration and enforcement of this Agreement or any consents or
waivers hereunder and all Other Documents, or (c) in instituting, maintaining,
preserving, enforcing and foreclosing on Agent's security interest in or Lien on
any of the Collateral, whether through judicial proceedings or otherwise, or (d)
in defending or prosecuting any actions or proceedings arising out of or
relating to Agent's or any Lender's transactions with any
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Borrower, or (e) in connection with any advice given to Agent or any Lender with
respect to its rights and obligations under this Agreement and all Other
Documents, may be charged to Borrowers' Account and shall be part of the
Obligations.
16.10. INJUNCTIVE RELIEF. Each Borrower recognizes that, in the event
any Borrower fails to perform, observe or discharge any of its obligations or
liabilities under this Agreement, any remedy at law may prove to be inadequate
relief to Lenders; therefore, Agent, if Agent so requests, shall be entitled to
temporary and permanent injunctive relief in any such case without the necessity
of proving that actual damages are not an adequate remedy.
16.11. CONSEQUENTIAL DAMAGES. Neither Agent nor any Lender, nor any
agent or attorney for any of them, shall be liable to any Borrower for
consequential damages arising from any breach of contract, tort or other wrong
relating to the establishment, administration or collection of the Obligations.
16.12. CAPTIONS. The captions at various places in this
Agreement are intended for convenience only and do not constitute
and shall not be interpreted as part of this Agreement.
16.13. COUNTERPARTS; TELECOPIED SIGNATURES. This Agreement may be
executed in any number of and by different parties hereto on separate
counterparts, all of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute one and the same agreement. Any signature
delivered by a party by facsimile transmission shall be deemed to be an original
signature hereto.
16.14. CONSTRUCTION. The parties acknowledge that each party and its
counsel have reviewed this Agreement and that the normal rule of construction to
the effect that any ambiguities are to be resolved against the drafting party
shall not be employed in the interpretation of this Agreement or any amendments,
schedules or exhibits thereto.
16.15. CONFIDENTIALITY; SHARING INFORMATION.
(a) Agent, each Lender and each Transferee shall hold all non-public
information obtained by Agent, such Lender or such Transferee pursuant to the
requirements of this Agreement in accordance with Agent's, such Lender's and
such Transferee's customary procedures for handling non-public information of
this nature; PROVIDED, HOWEVER, Agent, each Lender and each Transferee may
disclose such non-public information in accordance with Agent's, such Lender's
and such Transferee's customary procedures for handling non-public information
of this nature, (i) to its examiners, affiliates, outside auditors, counsel and
other professional advisors, (ii) to Agent, any Lender or to any prospective
Transferees and Purchasing Lenders who have executed a confidentiality agreement
reasonably acceptable to Borrowers and Agent or who are parties hereto, and
(iii) as required or
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requested by any Governmental Body or representative thereof or pursuant to
legal process; PROVIDED, FURTHER that (x) unless specifically prohibited by
applicable law or court order, Agent, each Lender and each Transferee shall use
its best efforts prior to disclosure thereof, to notify Borrowing Agent of the
applicable request for disclosure of such non-public information (A) by a
Governmental Body or representative thereof (other than any such request in
connection with an examination of the financial condition of a Lender or a
Transferee by such Governmental Body) or (B) pursuant to legal process and (y)
in no event shall Agent, any Lender or any Transferee be obligated to return any
materials furnished by any Borrower other than those documents and instruments
in possession of Agent or any Lender in order to perfect its Lien on the
Collateral once (A) all Indebtedness hereunder including, without limitation,
all outstanding Advances, accrued interest thereon, fees, expenses and other
charges payable to Agent and the Lenders hereunder has been paid in full, (B)
each Borrower has furnished Agent and Lenders with an indemnity reasonably
satisfactory to Agent with respect to any outstanding claims for indemnification
hereunder and (C) this Agreement has been terminated.
(b) Each Borrower acknowledges that from time to time financial
advisory, investment banking and other services may be offered or provided to
such Borrower or one or more of its Affiliates (in connection with this
Agreement or otherwise) by any Lender or by one or more Subsidiaries or
Affiliates of such Lender and such Borrower hereby authorizes each Lender to
share any information delivered to such Lender by such Borrower and its
Subsidiaries pursuant to this Agreement, or in connection with the decision of
such Lender to enter into this Agreement, to any such Subsidiary or Affiliate of
such Lender, it being understood that any such Subsidiary or Affiliate of any
Lender receiving such information shall be bound by the provision of this
Section 16.15 as if it were a Lender hereunder. Such authorization shall survive
the repayment of the other Obligations and the termination of the Loan
Agreement.
16.16. PUBLICITY. Each Borrower hereby authorizes Agent to make
appropriate announcements of the financial arrangement entered into among
Borrowers, Agent and Lenders, including, without limitation, announcements which
are commonly known as tombstones, in such publications and to such selected
parties as Agent shall in its sole and absolute discretion deem appropriate.
Each of the parties has signed this Agreement as of the day and year
first above written.
TRESCOM INTERNATIONAL, INC.
WITNESS:
/s/ Xxxxxxx Xxxxxxx
/s/ Xxxx Xxxxxxx, Esq. By:_______________________________
_______________________ Xxxxxxx Xxxxxxx
Name:_____________________________
Chief Executive Officer
Title:____________________________
000 Xxxx Xxxxxxx Xxxx.
Xx. Xxxxxxxxxx, Xxxxxxx 00000
-87-
TRESCOM U.S.A., INC.
WITNESS:
/s/ Xxxxxxx Xxxxxxx
/s/ Xxxx Xxxxxxx, Esq. By:_______________________________
_______________________ Xxxxxxx Xxxxxxx
Name:_____________________________
Vice President
Title:____________________________
000 Xxxx Xxxxxxx Xxxx.
Xx. Xxxxxxxxxx, Xxxxxxx 00000
INTEX TELECOMMUNICATIONS, INC.
WITNESS:
/s/ Xxxxxxx Xxxxxxx
/s/ Xxxx Xxxxxxx, Esq. By:_______________________________
_______________________ Xxxxxxx Xxxxxxx
Name:_____________________________
Vice President
Title:____________________________
000 Xxxx Xxxxxxx Xxxx.
Xx. Xxxxxxxxxx, Xxxxxxx 00000
-88-
THE ST. XXXXXX AND SAN XXXX
WITNESS: TELEPHONE COMPANY, INC.
/s/ Xxxxxxx Xxxxxxx
/s/ Xxxx Xxxxxxx, Esq. By:_______________________________
_______________________ Xxxxxxx Xxxxxxx
Name:_____________________________
Vice President
Title:____________________________
000 Xxxx Xxxxxxx Xxxx.
Xx. Xxxxxxxxxx, Xxxxxxx 00000
STSJ OVERSEAS TELEPHONE COMPANY, INC.
WITNESS:
/s/ Xxxxxxx Xxxxxxx
/s/ Xxxx Xxxxxxx, Esq. By:_______________________________
_______________________ Xxxxxxx Xxxxxxx
Name:_____________________________
Vice President
Title:____________________________
000 Xxxx Xxxxxxx Xxxx.
Xx. Xxxxxxxxxx, Xxxxxxx 00000
PNC BANK, NATIONAL ASSOCIATION, as
Lender and as Agent
WITNESS:
/s/ Xxxxx Xxxxxxxxxx
/s/ Xxxx Xxxxxxx, Esq. By:_______________________________
_______________________ Xxxxx Xxxxxxxxxx
Name:_____________________________
Vice President
Title:____________________________
Xxx Xxxxx Xxxxxx Xxxxxxxxx
Xxxx Xxxxxxxxx, Xxx Xxxxxx 00000
Commitment Percentage: 100%
-00-
XXXXX XX XXX XXXX )
) ss.
COUNTY OF NEW YORK )
On this 31st day of July, 1997, before me personally came Xxxxxxx
Xxxxxx, to me known, who, being by me duly sworn, did depose and say that he is
the Chief Financial Officer of TresCom International, Inc., the corporation
described in and which executed the foregoing instrument; that he knows the seal
of said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by order of the board of directors of said
corporation, and that he signed his name thereto by like order.
/s/ Xxxxxx Xxxxxx
------------------------------
NOTARY PUBLIC
STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
On this 31st day of July, 1997, before me personally came Xxxxxxx
Xxxxxx, to me known, who, being by me duly sworn, did depose and say that he is
the Vice President of TresCom U.S.A., Inc., the corporation described in and
which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by order of the board of directors of said corporation,
and that he signed his name thereto by like order.
/s/ Xxxxxx Xxxxxx
------------------------------
NOTARY PUBLIC
STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
On this 31st day of July, 1997, before me personally came
Xxxxxxx Xxxxxx, to me known, who, being by me duly sworn, did
depose and say that he is the Vice President of Intex Telecommunications,
Inc., the corporation described in and which executed the foregoing instrument;
that he knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by order of the board
of directors of said corporation, and that he signed his name thereto by like
order.
/s/ Xxxxxx Xxxxxx
------------------------------
NOTARY PUBLIC
-00-
XXXXX XX XXX XXXX )
) ss.
COUNTY OF NEW YORK )
On this 31st day of July, 1997, before me personally came Xxxxxxx
Xxxxxx, to me known, who, being by me duly sworn, did depose and say that he is
the Vice President of The St. Xxxxxx and San Xxxx Telephone Company, Inc., the
corporation described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by order of the board of directors
of said corporation, and that he signed his name thereto by like order.
/s/ Xxxxxx Xxxxxx
------------------------------
NOTARY PUBLIC
STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
On this 31st day of July, 1997, before me personally came Xxxxxxx
Xxxxxx, to me known, who, being by me duly sworn, did depose and say that he is
the Vice President of STSJ Overseas Telephone Company, Inc., the corporation
described in and which executed the foregoing instrument; that he knows the seal
of said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by order of the board of directors of said
corporation, and that he signed his name thereto by like order.
/s/ Xxxxxx Xxxxxx
------------------------------
NOTARY PUBLIC
STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
On this 31st day of July, 1997, before me personally came Xxxxx
Xxxxxxxxxx, to me known, who, being by me duly sworn, did depose and say that he
is a Vice President of PNC BANK, NATIONAL ASSOCIATION, the national association
described in and which executed the foregoing instrument and that he signed his
name thereto by on behalf of said national association.
/s/ Xxxxxx Xxxxxx
------------------------------
NOTARY PUBLIC
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LIST OF EXHIBITS AND SCHEDULES
Exhibits
Exhibit 2.1(a) Revolving Credit Note
Exhibit 2.2 Authorized Persons
Exhibit 5.5(b) Financial Projections
Exhibit 8.1(i) Financial Condition Certificate
Exhibit 9.2 Certificate
Exhibit 8.1(v) Borrowing Base Certificate
Exhibit 16.3 Commitment Transfer Supplement
Schedules
Schedule 1.2 Permitted Encumbrances
Schedule 4.15(c) Location of Executive Offices
Schedule 4.19 Real Property
Schedule 5.2(a) States of Qualification and Good Standing
Schedule 5.2(b) Subsidiaries
Schedule 5.4 Federal Tax Identification Number
Schedule 5.6 Prior Names
Schedule 5.8(b) Litigation
Schedule 5.8(d) Plans
Schedule 5.9 Intellectual Property, Source Code Escrow
Agreements
Schedule 5.10 Licenses and Permits
Schedule 5.14 Labor Disputes
TABLE OF CONTENTS
I. DEFINITIONS.......................................................... 2
1.1. Accounting Terms............................................ 2
1.2. General Terms............................................... 2
1.3. Uniform Commercial Code Terms............................... 20
1.4. Certain Matters of Construction............................. 20
II. ADVANCES, PAYMENTS................................................... 20
2.1. (a) Revolving Advances................................... 20
(b) Permitted Acquisitions............................... 21
(c) Discretionary Rights................................. 21
2.2. Procedure for Borrowing Revolving Advances.................. 21
2.3. Disbursement of Advance Proceeds............................ 24
2.4. INTENTIONALLY OMITTED....................................... 24
2.5. Maximum Advances............................................ 24
2.6. Repayment of Advances....................................... 24
2.7. Repayment of Excess Advances................................ 25
2.8. Statement of Account........................................ 25
2.9. Letters of Credit........................................... 25
2.10. Issuance of Letters of Credit............................... 26
2.11. Requirements For Issuance of Letters of Credit.............. 26
2.12. Additional Payments......................................... 28
2.13. Manner of Borrowing and Payment............................. 28
2.14. INTENTIONALLY OMITTED....................................... 30
2.15. Use of Proceeds............................................. 30
2.16. Defaulting Lender........................................... 30
III. INTEREST AND FEES.................................................... 31
3.1. Interest.................................................... 31
3.2. Letter of Credit Fees....................................... 31
3.3. (a) Closing Fee.......................................... 32
(b) Facility Fee......................................... 32
3.4. (a) Collateral Evaluation Fee............................ 32
(b) Collateral Monitoring Fee............................ 32
3.5. Computation of Interest and Fees............................ 33
3.6. Maximum Charges............................................. 33
3.7. Increased Costs............................................. 33
3.8. Basis For Determining Interest Rate Inadequate or
Unfair...................................................... 34
3.9. Capital Adequacy............................................ 35
IV. COLLATERAL: GENERAL TERMS........................................... 35
4.1. Security Interest in the Collateral......................... 35
4.2. Perfection of Security Interest............................. 36
4.3. Disposition of Collateral................................... 36
4.4. Preservation of Collateral.................................. 36
4.5. Ownership of Collateral..................................... 37
4.6. Defense of Agent's and Lenders' Interests................... 37
4.7. Books and Records........................................... 38
4.8. Financial Disclosure........................................ 38
4.9. Compliance with Laws........................................ 38
4.10. Inspection of Premises...................................... 39
4.11. Insurance................................................... 39
4.12. Failure to Pay Insurance.................................... 40
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4.13. Payment of Taxes............................................ 40
4.14. Payment of Leasehold Obligations............................ 41
4.15. Receivables................................................. 41
(a) Nature of Receivables................................ 41
(b) Solvency of Customers................................ 41
(c) Locations of Borrower................................ 41
(d) Collection of Receivables............................ 41
(e) Notification of Assignment of Receivables............ 42
(f) Power of Agent to Act on Borrowers' Behalf........... 42
(g) No Liability......................................... 43
(h) Establishment of a Lockbox Account, Dominion
Account.............................................. 43
(i) Adjustments.......................................... 43
4.16. I........................................................... 43
4.17. Maintenance of Properties................................... 43
4.18. Exculpation of Liability.................................... 44
4.19. Environmental Matters....................................... 44
4.20. Financing Statements........................................ 46
V. REPRESENTATIONS AND WARRANTIES....................................... 47
5.1. Authority................................................... 47
5.2. Formation and Qualification................................. 47
5.3. Survival of Representations and Warranties.................. 47
5.4. Tax Returns................................................. 47
5.5. Financial Statements........................................ 48
5.6. Corporate Name.............................................. 48
5.7. O.S.H.A. and Environmental Compliance....................... 48
5.8. Solvency; No Litigation, Violation, Indebtedness
or Default.................................................. 49
5.9. Patents, Trademarks, Copyrights and Licenses................ 51
5.10. Licenses and Permits........................................ 51
5.11. Default of Indebtedness..................................... 51
5.12. No Default.................................................. 51
5.13. No Burdensome Restrictions.................................. 51
5.14. No Labor Disputes........................................... 52
5.15. Margin Regulations.......................................... 52
5.16. Investment Company Act...................................... 52
5.17. Disclosure.................................................. 52
5.18. FCC, PRTRB and State Compliance............................. 52
5.19. Swaps....................................................... 53
5.20. Conflicting Agreements...................................... 53
5.21. Application of Certain Laws and Regulations................. 53
5.22. Business and Property of Borrower........................... 53
VI. AFFIRMATIVE COVENANTS................................................ 53
6.1. Payment of Fees............................................. 54
6.2. Conduct of Business and Maintenance of Existence
and Assets.................................................. 54
6.3. Violations.................................................. 54
6.4. Government Receivables...................................... 54
6.5. Tangible Net Worth.......................................... 54
6.6. Interest Coverage Ratio..................................... 55
6.7. Execution of Supplemental Instruments....................... 55
6.8. Payment of Indebtedness..................................... 55
6.9. Standards of Financial Statements........................... 55
VII. NEGATIVE COVENANTS................................................... 56
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7.1. Merger, Consolidation, Acquisition and Sale of
Assets...................................................... 56
7.2. Creation of Liens........................................... 56
7.3. Guarantees.................................................. 56
7.4. Investments................................................. 56
7.5. Loans....................................................... 56
7.6. Capital Expenditures........................................ 57
7.7. Dividends................................................... 57
7.8. Indebtedness................................................ 57
7.9. Nature of Business.......................................... 57
7.10. Transactions with Affiliates................................ 57
7.11. INTENTIONALLY OMITTED....................................... 57
7.12. Subsidiaries................................................ 57
7.13. Fiscal Year and Accounting Changes.......................... 58
7.14. Pledge of Credit............................................ 58
7.15. Amendment of Articles of Incorporation, By-Laws............. 58
7.16. Compliance with ERISA....................................... 58
7.17. Prepayment of Indebtedness.................................. 59
7.18. Deposit Account Balances.................................... 59
VIII. CONDITIONS PRECEDENT................................................. 59
8.1. Conditions to Initial Advances.............................. 59
(a) Note................................................. 59
(b) Filings, Registrations and Recordings................ 59
(c) Corporate Proceedings of Borrowers................... 59
(d) Incumbency Certificates of Borrowers and
Guarantor............................................ 60
(e) Certificates......................................... 60
(f) Good Standing Certificates........................... 60
(g) Legal Opinion........................................ 60
(h) No Litigation........................................ 60
(i) Financial Condition Certificates..................... 61
(j) Collateral Examination............................... 61
(k) Fees................................................. 61
(l) Projections.......................................... 61
(m) OAN Documentation.................................... 61
(n) Guaranties and Other Documents....................... 61
(o) Insurance............................................ 61
(p) Payment Instructions................................. 61
(q) Blocked Accounts..................................... 61
(r) Consents............................................. 61
(s) No Material Adverse Change........................... 62
(t) Leasehold Agreements................................. 62
(u) Contract Review...................................... 62
(v) Closing Certificate.................................. 62
(w) Borrowing Base....................................... 62
..................................................... 62
(x) Compliance with Laws................................. 62
(y) SBA Documentation.................................... 62
(z) Other................................................ 63
8.2. Conditions to Each Advance.................................. 63
(a) Representations and Warranties....................... 63
(b) No Default........................................... 63
(c) Maximum Advances..................................... 63
(d) Material Provisions.................................. 63
IX. INFORMATION AS TO BORROWER........................................... 63
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9.1. Disclosure of Material Matters.............................. 63
9.2. Schedules................................................... 64
9.3. Environmental Reports....................................... 64
9.4. Litigation.................................................. 64
9.5. Material Occurrences........................................ 64
9.6. Government Receivables...................................... 65
9.7. Annual Financial Statements................................. 65
9.8. ............................................................ 66
9.9. Quarterly Financial Statements.............................. 66
9.10. Other Reports............................................... 66
9.11. Additional Information...................................... 66
9.12. Projected Operating Budget.................................. 67
9.13. Variances From Operating Budget............................. 67
9.14. Notice of Suits, Adverse Events............................. 67
9.15. ERISA Notices and Requests.................................. 67
9.16. FCC and PRTRB Notices and Requests.......................... 68
9.17. Securities Reports.......................................... 68
9.18. OAN Notices................................................. 68
9.19. Additional Documents........................................ 69
X. EVENTS OF DEFAULT.................................................... 69
XI. LENDERS' RIGHTS AND REMEDIES AFTER DEFAULT........................... 72
11.1. Rights and Remedies......................................... 72
11.2. Agent's Discretion.......................................... 73
11.3. Setoff...................................................... 73
11.4. Rights and Remedies not Exclusive........................... 73
XII. WAIVERS AND JUDICIAL PROCEEDINGS..................................... 73
12.1. Waiver of Notice............................................ 73
12.2. Delay....................................................... 74
12.3. Jury Waiver................................................. 74
XIII. EFFECTIVE DATE AND TERMINATION....................................... 74
13.1. Term........................................................ 74
13.2. Termination................................................. 75
XIV. REGARDING AGENT...................................................... 75
14.1. Appointment................................................. 75
14.2. Nature of Duties............................................ 76
14.3. Lack of Reliance on Agent and Resignation................... 76
14.4. Certain Rights of Agent..................................... 77
14.5. Reliance.................................................... 77
14.6. Notice of Default........................................... 77
14.7. Indemnification............................................. 78
14.8. Agent in its Individual Capacity............................ 78
14.9. Delivery of Documents....................................... 78
14.10. Borrowers' Undertaking to Agent............................. 78
XV. BORROWING AGENCY..................................................... 78
15.1. Borrowing Agency Provisions................................. 79
15.2. Waiver of Subrogation....................................... 79
XVI. MISCELLANEOUS........................................................ 80
16.1. Governing Law............................................... 80
16.2. Entire Understanding........................................ 80
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16.3. Successors and Assigns; Participations; New
Lenders..................................................... 82
16.4. Application of Payments..................................... 84
16.5. Indemnity................................................... 84
16.6. Notice...................................................... 84
16.7. Survival.................................................... 85
16.8. Severability................................................ 85
16.9. Expenses.................................................... 85
16.10. Injunctive Relief........................................... 86
16.11. Consequential Damages....................................... 86
16.12. Captions.................................................... 86
16.13. Counterparts; Telecopied Signatures......................... 86
16.14. Construction................................................ 86
16.15. Confidentiality............................................. 86
16.16. Publicity................................................... 87
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