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Exhibit 10.06
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of April 16, 2001
Among
TELESPECTRUM WORLDWIDE INC.,
as BORROWER,
and
THE LENDERS NAMED HEREIN,
and
BNP PARIBAS
as ADMINISTRATIVE AGENT and COLLATERAL AGENT
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ARTICLE I DEFINITIONS AND ACCOUNTING TERMS.................................2
SECTION 1.01. Certain Defined Terms................................2
SECTION 1.02. Computation of Time Periods; Other Definitional
Provisions..........................................25
SECTION 1.03. Accounting Terms....................................25
ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES...............................25
SECTION 2.01. Term Advances and Term Notes........................25
SECTION 2.02. Working Capital Advances............................28
SECTION 2.03. [Intentionally Omitted].............................30
SECTION 2.04. Repayment of Advances and Deferred Interest
Notes...............................................30
SECTION 2.05. Termination or Reduction of the Working Capital
Commitments.........................................31
SECTION 2.06. Prepayments.........................................31
SECTION 2.07. Interest............................................33
SECTION 2.08. Fees................................................34
SECTION 2.09. [Intentionally Omitted].............................35
SECTION 2.10. Increased Costs, Etc................................35
SECTION 2.11. Payments and Computations...........................36
SECTION 2.12. Taxes...............................................37
SECTION 2.13. Sharing of Payments, Etc............................39
SECTION 2.14. Use of Proceeds.....................................40
SECTION 2.15. Evidence of Debt....................................41
SECTION 2.16. Maximum Lawful Rate.................................41
ARTICLE III CONDITIONS OF LENDING...........................................42
SECTION 3.01. Conditions Precedent to Closing.....................42
SECTION 3.02. Conditions Precedent to Each Working Capital
Borrowing...........................................48
SECTION 3.03. Determinations Under Section 3.01...................49
ARTICLE IV REPRESENTATIONS AND WARRANTIES..................................49
SECTION 4.01. Representations and Warranties of the Borrower......49
ARTICLE V COVENANTS.......................................................55
SECTION 5.01. Affirmative Covenants...............................55
SECTION 5.02. Negative Covenants..................................61
SECTION 5.03. Reporting Requirements..............................68
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SECTION 5.04. Financial Covenants.................................72
ARTICLE VI EVENTS OF DEFAULT............................................74
SECTION 6.01. Events of Default...................................74
SECTION 6.02. [Intentionally omitted.]............................77
ARTICLE VII THE AGENT....................................................77
SECTION 7.01. Authorization and Action............................77
SECTION 7.02. Agent's Reliance, Etc...............................77
SECTION 7.03. BNP and Affiliates..................................78
SECTION 7.04. Lender Party Credit Decision........................78
SECTION 7.05. Indemnification.....................................78
SECTION 7.06. Successor Agent.....................................79
SECTION 7.07. [Intentionally Omitted].............................79
ARTICLE VIII MISCELLANEOUS................................................79
SECTION 8.01. Amendments, Etc.....................................79
SECTION 8.02. Notices, Etc........................................80
SECTION 8.03. No Waiver; Remedies.................................81
SECTION 8.04. Costs and Expenses..................................81
SECTION 8.05. Right of Set-off....................................82
SECTION 8.06. Binding Effect......................................83
SECTION 8.07. Assignments and Participations......................83
SECTION 8.08. Execution in Counterparts...........................85
SECTION 8.09. [Intentionally Omitted].............................85
SECTION 8.10. Jurisdiction, Etc...................................85
SECTION 8.11. Governing Law.......................................86
SECTION 8.12. Judgment............................................86
SECTION 8.13. Waiver of Jury Trial................................86
SECTION 8.14. Confidentiality.....................................86
SECTION 8.15. Release and Waiver..................................87
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SCHEDULES
---------
Schedule I - Commitments and Domestic Lending Offices
Schedule IA - Lenders' Pro Rata Shares of the Facilities
Schedule 1.01 - Accounts Payable
Schedule 3.01(a)(iii)(H) - Blocked Accounts
Schedule 3.01(a)(iv) - Guarantors
Schedule 3.01(a)(x) - Jurisdictions of Activity as Foreign Corporation
Schedule 3.01(i) - [Intentionally Omitted]
Schedule 3.01(k) - Leased Real Property Report
Schedule 3.01(m) - Management Incentive Program
Schedule 4.01(b) - Subsidiaries of the Borrower
Schedule 4.01(d) - Authorizations, Approvals, Actions, Notices and
Filings
Schedule 4.01(j) - Pending Litigation
Schedule 4.01(o) - Plans, Multiemployer Plans and Welfare Plans
Schedule 4.01(p) - Open Years
Schedule 4.01(s) - Existing Debt
Schedule 4.01(u) - Locations of Inventory
Schedule 4.01(v) - Leased Real Property
Schedule 4.01(w) - Existing Investments
Schedule 4.01(x) - Intellectual Property
Schedule 4.01(y) - Existing Liens
Schedule 4.01(aa) - Deposit Accounts
Schedule 4.01(bb) - [Intentionally Omitted]
Schedule 4.01(cc) - Proposals
Schedule 4.01(dd) - Material Contracts
Schedule 5.02(b)(ii)(F) - Structured Vendor Settlements
Schedule 5.04(e) - Minimum Cumulative EBITDA
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EXHIBITS
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EXHIBIT A-1 - Form of Term Note
EXHIBIT A-2 - [Intentionally Omitted]
EXHIBIT A-3 - [Intentionally Omitted]
EXHIBIT A-4 - Form of Working Capital Note
EXHIBIT B - Form of Notice of Borrowing
EXHIBIT C - Form of Assignment and Acceptance
EXHIBIT D - Form of Security Agreement
EXHIBIT E-1 - Form of Canadian Security Agreement
EXHIBIT E-2 - Form of Debenture
EXHIBIT E-3 - Form of Debenture Pledge Agreement
EXHIBIT F-1 - Form of U.S. Guaranty
EXHIBIT F-2 - Form of Canadian Guaranty
EXHIBIT G - Form of Borrowing Base Certificate
EXHIBIT H-1 - Form of Opinion of Counsel to Loan Parties
EXHIBIT H-2 - Form of Opinion of Canadian Counsel to Loan Parties
EXHIBIT J - [Intentionally Omitted]
EXHIBIT I - [Intentionally Omitted]
EXHIBIT K-1 - Form of Intercompany Subordination Agreement
EXHIBIT K-2 - Form of Intercompany Note
EXHIBIT L - [Intentionally Omitted]
EXHIBIT M - [Intentionally Omitted]
EXHIBIT N - Form of Acknowledgment and Consent
EXHIBIT O - Form of Deferred Interest Note
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AMENDED AND RESTATED CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT dated as of April 16,
2001 among TELESPECTRUM WORLDWIDE INC., a Delaware corporation (the "BORROWER"),
the banks, financial institutions and other institutional lenders listed on the
signature pages hereof as the Lenders (the "LENDERS"), BNP PARIBAS (f/k/a Banque
Nationale de Paris) ("BNP"), as administrative agent (the "ADMINISTRATIVE
AGENT"), and as collateral agent (together with any successors appointed
pursuant to Article VII, the "COLLATERAL AGENT"; together with the
Administrative Agent, the "AGENT") for the Lenders.
PRELIMINARY STATEMENTS:
WHEREAS, pursuant to that certain Credit Agreement dated as of June
30, 1999, as amended, by and among Borrower, the banks, financial institutions
and other institutional lenders listed on the signature papers thereof, and BNP,
as collateral agent, swing line bank and initial issuing bank and Bank of
America, N.A. (f//k/a Bank of America, National Trust and Savings Association),
as administrative agent (the "EXISTING CREDIT AGREEMENT"), the Lenders have made
certain credit facilities available to the Borrower for the purpose of, among
other things, providing working capital for the Borrower and its Subsidiaries;
WHEREAS, the parties to the Existing Credit Agreement have agreed to
amend and restate the Existing Credit Agreement in order to, among other things,
(i) convert the Existing Term A Advances, Existing Term B Advances, Existing
Term C Advances and certain of the Existing Working Capital Advances to Term
Advances, (ii) establish a new Termination Date, (iii) amend certain of the
financial covenants and (iv) make certain other amendments to the Existing
Credit Agreement, all as set forth herein;
WHEREAS, it is the intention of the Borrower, the Agent and the
Lenders that such amendment and restatement of the Existing Credit Agreement
shall not constitute a refinancing of, but rather a modification and
continuation of, the Existing Advances outstanding on the Restatement Date;
WHEREAS, to induce the Agent and the Lenders to enter into this
Agreement, the Borrower has agreed to grant to the Agent, or confirm its grant
to the Agent, on behalf of the Lenders, a first priority Lien on substantially
all of its property (real, personal and mixed), including a pledge of all the
capital stock or other ownership interests of its Subsidiaries; and
WHEREAS, to induce the Agent and the Lenders to enter into this
Agreement, each U.S. Subsidiary and each Foreign Subsidiary has agreed to
guaranty, or confirm its guarantee of, the Obligations hereunder and the other
Loan Documents, and each U.S. Subsidiary and each Foreign Subsidiary has agreed
to secure its guaranty by granting to Agent, or confirming its grant to the
Agent, on behalf of Lenders, a first priority Lien on substantially all of its
respective property (real, personal and mixed).
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree that
on the
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Restatement Date the Existing Credit Agreement shall be amended and restated in
its entirety as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"ACCOUNTS PAYABLE" means Debt consisting of trade payables incurred
in the ordinary course of business which are (a) more than 60 days past due if
they are obligations to vendors of telecommunications services, and (b) more
than 90 days past due for all other vendors, as well as those obligations set
forth on Schedule 1.01.
"ACCOUNTS PAYABLE RESERVE" means the reserve against Working Capital
Availability established by the Agent pursuant to Section 2.06(b)(v), in an
amount from time to time equal to (a) the sum of all payments made pursuant to
Section 2.06(b)(v) minus (b) the sum of all Working Capital Advances made
pursuant to Section 2.02(c).
"ACKNOWLEDGEMENT AND CONSENT" means the Acknowledgement and Consent
executed and delivered by each Loan Party substantially in the form of Exhibit N
annexed hereto pursuant to which each such Person acknowledges and consents to
this Agreement and confirms the continuing effectiveness of each Loan Document
to which it is a party.
"ADMINISTRATIVE AGENT" has the meaning specified in the recital of
the parties to this Agreement.
"ADVANCE" means a Term Advance, a Working Capital Advance or the
principal amount of any Deferred Interest Note.
"AFFILIATE" means, as to any Person, any other Person that, directly
or indirectly, controls, is controlled by or is under common control with such
Person or is a director or officer of such Person. For purposes of this
definition, the term "control" (including the terms "controlling", "controlled
by" and "under common control with") of a Person means the possession, direct or
indirect, of the power to vote 5% or more of the Voting Interests of such Person
or to direct or cause the direction of the management and policies of such
Person, whether through the ownership of Voting Interests, by contract or
otherwise.
"AGENT" has the meaning specified in the recital of the parties to
this Agreement.
"AGENT'S ACCOUNT" means the account of the Agent maintained by the
Agent at the Federal Reserve Bank of New York, 00 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, ABA No. 000000000, for further credit to Account No. 750420-701-03,
or such other account maintained by the Agent and designated by the Agent in a
written notice to the Lender Parties and the Borrower.
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"AGREEMENT VALUE" means, for each Hedge Agreement, on any date of
determination, an amount determined by the Agent equal to: (a) in the case of a
Hedge Agreement documented pursuant to the Master Agreement (Multicurrency-Cross
Border) published by the International Swap and Derivatives Association, Inc.
(the "MASTER AGREEMENT"), the amount, if any, that would be payable by any Loan
Party, or any of its Subsidiaries to its counterparty to such Hedge Agreement,
as if (i) such Hedge Agreement was being terminated early on such date of
determination, (ii) such Loan Party or Subsidiary was the sole "Affected Party",
and (iii) the Agent was the sole party determining such payment amount (with the
Agent making such determination pursuant to the provisions of the form of Master
Agreement); or (b) in the case of a Hedge Agreement traded on an exchange, the
xxxx-to-market value of such Hedge Agreement, which will be the unrealized loss
on such Hedge Agreement to the Loan Party or Subsidiary of a Loan Party party to
such Hedge Agreement determined by the Agent based on the settlement price of
such Hedge Agreement on such date of determination, or (c) in all other cases,
the xxxx-to-market value of such Hedge Agreement, which will be the unrealized
loss on such Hedge Agreement to the Loan Party or Subsidiary of a Loan Party
party to such Hedge Agreement determined by the Agent as the amount, if any, by
which (i) the present value of the future cash flows to be paid by such Loan
Party or Subsidiary exceeds (ii) the present value of the future cash flows to
be received by such Loan Party or Subsidiary pursuant to such Hedge Agreement;
capitalized terms used and not otherwise defined in this definition shall have
the respective meanings set forth in the above described Master Agreement.
"APPLICABLE MARGIN" means [_____]% per annum.
"APPROPRIATE LENDER" means, at any time, with respect to the Working
Capital Facility, a Lender that has a Working Capital Commitment with respect to
such Facility at such time.
"APPROVED FUND" means, with respect to any Lender that is a fund
that invests in bank loans, any other fund that invests in bank loans and is
advised or managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"APPROVED MANAGING OFFICER" has the meaning specified in the
definition of "Change in Control" set forth herein.
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"BASE RATE" means a fluctuating interest rate per annum in effect
from time to time, which rate per annum shall at all times be equal to the
higher of:
(a) the rate of interest announced publicly by BNP in New
York, New York, from time to time, as its prime rate (and such term
shall not be construed to be its best or most favorable rate); and
(b) 1/2 of one percent per annum above the Federal Funds Rate.
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"BASE RATE ADVANCE" means an Advance that bears interest as provided
in Section 2.07(a).
"BLOCKED ACCOUNT" means a deposit account for which the Agent has
received a Blocked Account Letter duly executed by the applicable Blocked
Account Bank or over which the Agent holds a perfected Lien or similar security
interest.
"BLOCKED ACCOUNT LETTER" has the meaning specified in the U.S.
Security Agreement.
"BLOCKED ACCOUNT BANK" has the meaning specified in the U.S.
Security Agreement.
"BNP" has the meaning specified in the recital of the parties to
this Agreement.
"BORROWER" has the meaning specified in the recital of the parties
to this Agreement.
"BORROWER'S ACCOUNT" means the account of the Borrower maintained by
the Borrower with BNP at BNP's office at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Account No. 205200-001-88. or such other account as the Borrower and the
Agent may from time to time designate as the "Borrower's Account".
"BORROWING BASE CERTIFICATE" means a certificate in substantially
the form of Exhibit G hereto, duly certified by the chief financial officer of
the Borrower.
"BUSINESS DAY" means a day of the year on which banks are not
required or authorized by law to close in New York City.
"CANADIAN GUARANTY" means that certain Guaranty dated June 30, 1999
executed and delivered by each Canadian Subsidiary of the Borrower in favor of
the Secured Parties, in the form of Exhibit F-2, as amended, supplemented or
otherwise modified from time to time in accordance with its terms.
"CANADIAN SECURITY AGREEMENT" means that certain Security Agreement
dated June 30, 1999 executed and delivered by each Canadian Subsidiary of the
Borrower in favor of the Collateral Agent, in the form of Exhibit E-1, as
amended, supplemented or otherwise modified from time to time in accordance with
its terms.
"CANADIAN SUBSIDIARY" means any Subsidiary of the Borrower organized
under the laws of Canada or any of the provinces of Canada.
"CAPITAL EXPENDITURES" means, for any Person for any period, the sum
of, without duplication, (a) all cash expenditures made, directly or indirectly,
by such Person or any of its Subsidiaries during such period for equipment,
fixed assets, real property or improvements, or for replacements or
substitutions therefor or additions thereto, that have been or should be, in
accordance with GAAP, reflected as additions to property, plant or equipment on
a Consolidated balance sheet of such Person plus (b) the aggregate principal
amount of all Debt (including
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Obligations under Capitalized Leases) assumed or incurred in connection with any
such expenditures.
"CAPITALIZED LEASES" means all leases that have been or should be,
in accordance with GAAP, recorded as capitalized leases.
"CASH EQUIVALENTS" means any of the following, to the extent owned
by the Borrower or any of its Subsidiaries free and clear of all Liens other
than Liens created under the Collateral Documents or Permitted Liens and having
a maturity of not greater than 180 days from the date of acquisition thereof:
(a) readily marketable direct obligations of the Government of the United States
or any agency or instrumentality thereof or obligations unconditionally
guaranteed by the full faith and credit of the government of the United States,
(b) insured certificates of deposit of or time deposits with any commercial bank
that is a Lender Party or a member of the Federal Reserve System and issues (or
the parent of which issues) commercial paper rated as described in clause (c)
and which is organized under the laws of the United States or any State thereof
and has combined capital and surplus of at least $1 billion, (c) commercial
paper in an aggregate amount of no more than $250,000 per issuer outstanding at
any time, issued by any corporation organized under the laws of any State of the
United States and rated at least "Prime-1" (or the then equivalent grade) by
Xxxxx'x Investors Service, Inc. or "A-1" (or the then equivalent grade) by
Standard & Poor's Rating Group, a division of The XxXxxx-Xxxx Companies, Inc.,
or (d) Investments in money market or mutual funds that invest solely in Cash
Equivalents of the types described in clauses (a), (b) and (c), above.
"CHANGE OF CONTROL" means, at any time, (i) the most senior
executive officer of the Borrower primarily responsible for its management shall
cease, for any reason (other than at the request or direction of the Agent or
the Lenders) to be Xxxxx Xxxxxx (or a successor thereto approved in writing by
Required Lenders within 20 days of such cessation; such Person and any successor
being the "APPROVED MANAGING OFFICER"); (ii) the board of directors of the
Borrower shall cease for any reason to have no more than nine members or the
board of directors of the Borrower shall cease for a period of more than 20
days, for any reason to include the Approved Managing Officer, one additional
member of the Borrower's senior management, and at least three additional
independent directors; or (iii) any Person, other than the MDC Group Investors,
or related group for purposes of Section 13(d) of the Securities and Exchange
Act of 1934 (as amended, the "EXCHANGE ACT"), together with any affiliates
thereof, should become the beneficial owner (within the meaning of Rule 13d-3 of
the Exchange Act, directly or indirectly, of securities of the Borrower
representing at least 50.1% of the capital stock entitled to vote for the
election of the directors of the Borrower
"COLLATERAL" means all "COLLATERAL" referred to in the Collateral
Documents and all other property that is or is intended to be subject to any,
Lien in favor of the Agent for the benefit of the Secured Parties.
"COLLATERAL AGENT" has the meaning specified in the recital of the
parties to this Agreement.
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"COLLATERAL DOCUMENTS" means the Security Agreements, the
Debentures, the Debenture Pledge Agreements, the Deed of Charge and any other
agreement that creates or purports to create a Lien in favor of the Agent for
the benefit of the Secured Parties.
"CONFIDENTIAL INFORMATION" means information that any Loan Party or
any of its Subsidiaries furnishes to the Agent or any Lender Party on a
confidential basis, but does not include any such information that is or becomes
generally available to the public or that is or becomes available to the Agent
or such Lender Party from a source other than any Loan Party or any of its
Subsidiaries.
"CONSOLIDATED" refers, with respect to any Person, to the
consolidation of accounts of such Person and its Subsidiaries in accordance with
GAAP.
"CONTINGENT OBLIGATION" means, with respect to any Person, any
Obligation or arrangement of such Person to guarantee or intended to guarantee
any Debt, leases, dividends or other payment Obligations ("PRIMARY OBLIGATIONS")
of any other Person (the "PRIMARY OBLIGOR") in any manner, whether directly or
indirectly, including, without limitation, (a) the direct or indirect guarantee,
endorsement (other than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by such
Person of the Obligation of a primary obligor, (b) the Obligation to make
take-or-pay or similar payments, if required, regardless of nonperformance by
any other party or parties to an agreement or (c) any Obligation of such Person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (A) for the purchase or payment of any such primary obligation or
(B) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, assets, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation or (iv) otherwise to assure
or hold harmless the holder of such primary obligation against loss in respect
thereof, provided, however, that for purposes of this Agreement the term
"Contingent Obligation" shall not include or be a reference to any such
Obligation or arrangement of a Loan Party if such Obligation or arrangement
guarantees an operating lease, consulting agreement or other operating agreement
entered into by any of its Subsidiaries or another Loan Party in the ordinary
course of such Subsidiary's or Loan Party's telemarketing business. The amount
of any Contingent Obligation shall be deemed to be an amount equal to the stated
or determinable amount of the primary obligation in respect of which such
Contingent Obligation is made (or, if less, the maximum amount of such primary
obligation for which such Person may be liable pursuant to the terms of the
instrument evidencing such Contingent Obligation) or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder), as determined by such
Person in good faith.
"CURRENT ASSETS" of any Person means all assets of such Person that
would, in accordance with GAAP, be classified as current assets of a company
conducting a business the same as or similar to that of such Person, after
deducting adequate reserves in each case in which a reserve is proper in
accordance with GAAP.
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"CURRENT LIABILITIES" of any Person means (a) all Debt of such
Person that by its terms is payable on demand or matures within one year after
the date of determination other than Funded Debt and (b) all other items
(including, without limitation, taxes accrued as estimated) that in accordance
with GAAP would be classified as current liabilities of a company conducting a
business the same or similar to that of such Person.
"DEBENTURE" means that certain Demand Debenture dated as of June 30,
1999 executed and delivered by S&P Data Corp. (now known as TeleSpectrum
Worldwide (Canada) Inc.), a Canadian Subsidiary of the Borrower, in favor of the
Agent, in the form of Exhibit E-2, as amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"DEBENTURE PLEDGE AGREEMENT" means that certain Debenture Pledge
Agreement dated June 30, 1999 executed and delivered by S&P Data Corp. (now
known as TeleSpectrum Worldwide (Canada) Inc.), a Canadian Subsidiary of the
Borrower, in favor of the Agent, in the form of Exhibit E-3, as amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"DEBT" of any Person means, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all Obligations, contingent
or otherwise, of such Person for the deferred purchase price of property or
services (other than trade payables not overdue by more than 60 days incurred in
the ordinary course of such Person's business), (c) all Obligations, contingent
or otherwise, of such Person evidenced by notes, bonds, debentures or other
similar instruments, (d) all Obligations, contingent or otherwise, of such
Person created or arising under any conditional sale or other title retention
agreement with respect to property acquired by such Person (even though the
rights and remedies of the seller or lender under such agreement in the event of
default are limited to repossession or sale of such property), (e) all
Obligations, contingent or otherwise, of such Person as lessee under Capitalized
Leases, (f) all Obligations, contingent or otherwise, of such Person under
acceptance, letter of credit or similar facilities, (g) all Obligations of such
Person to purchase, redeem, retire, defease or otherwise make any payment in
respect of any Equity Interests in such Person or any other Person or any
warrants, rights or options (other than warrants, rights or options for which
such Person has sole control over the terms and conditions of the exercise
thereof) to acquire such capital stock, valued, in the case of Redeemable
Preferred Interests, at the greater of its voluntary or involuntary liquidation
preference plus accrued and unpaid dividends, (h) all Obligations of such Person
in respect of Hedge Agreements, valued at the Agreement Value thereof, (i) all
Contingent Obligations of such Person and (j) all indebtedness and other payment
Obligations referred to in clauses (a) through (i) above of another Person
secured by (or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) any Lien on property (including,
without limitation, accounts and contract rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of such
indebtedness or other payment Obligations.
"DEFAULT" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be given or
time elapse or both.
"DEFAULT INTEREST PORTION" has the meaning specified in Section
2.01(h).
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"DEFERRED INTEREST NOTES" means, collectively, the deferred interest
promissory notes executed and delivered by the Borrower pursuant to Section
2.07(c) or Section 3.01(b).
"DOLLAR" and "$" each mean lawful money of the United States of
America.
"DOMESTIC LENDING OFFICE" means, with respect to any Lender Party,
the office of such Lender Party specified as its "Domestic Lending Office"
opposite its name on Schedule I hereto or in the Assignment and Acceptance
pursuant to which it became a Lender Party, as the case may be, or such other
office of such Lender Party as such Lender Party may from time to time specify
to the Borrower and the Agent.
"EBITDA" means, for any period, the sum, determined on a
Consolidated basis without duplication, of (a) net income (or net loss), (b)
Interest Expense net of interest income, (c) income tax expense, (d)
depreciation expense, (e) amortization expense, (f) noncash charges incurred in
connection with stock options granted to employees of the Borrower which charge
reduces net income, (g) the commitment fees and other fees and expenses paid by
the Borrower in connection with this Agreement, and (h) extraordinary or unusual
or non-recurring transactional losses deducted in calculating net income less
extraordinary or unusual gains or non-recurring transactional income added in
calculating net income; provided, however, there shall be excluded from EBITDA,
to the extent therein included, all non-cash foreign currency or Hedge Agreement
(to the extent such Hedge Agreements are permitted under 5.02(b)(i)(A)) losses
and all non-cash foreign currency or Hedge Agreement (to the extent such Hedge
Agreements are permitted under 5.02(b)(i)(A)) gains.
"ELIGIBLE ASSIGNEE" means (a) with respect to the Working Capital
Facility and if a Default has not occurred and is not continuing at the time any
assignment is effected pursuant to Section 8.07: (i) a Working Capital Lender;
(ii) an Affiliate of a Working Capital Lender; (iii) a commercial bank organized
under the laws of the United States, or any State thereof and having a combined
capital and surplus of at least $500,000,000; (iv) a savings and loan
association or savings bank organized under the laws of the United States, or
any State thereof and having a combined capital and surplus of at least
$500,000,000; (v) a commercial bank organized under the laws of any other
country that is a member of the OECD or has concluded special lending
arrangements with the International Monetary Fund associated with its General
Arrangements to Borrow or a political subdivision of any such country, and
having a combined capital and surplus of at least $500,000,000, so long as such
bank is acting through a branch or agency located in the United States; (vi) a
finance company, insurance company or other financial institution or fund
(whether a corporation, partnership, trust or other entity) that is engaged in
making, purchasing or otherwise investing in commercial loans in the ordinary
course of its business and having a combined capital and surplus of at least
$250,000,000; and (vii) any other Person approved by the Agent, any such
approval not to be unreasonably withheld or delayed; and (b) with respect to the
Term Loan Facility, any Lender, an Affiliate of a Lender, or any other Person
approved by the Agent, such approval not to be unreasonably withheld or delayed;
provided, however, that, in the case of clauses (a) and (b) above, neither any
Loan Party nor any Affiliate of a Loan Party shall qualify as an Eligible
Assignee under this definition.
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"ELIGIBLE RECEIVABLES" means any Receivables owned by any Loan Party
free and clear of all Liens (other than Permitted Liens and Liens in favor of
the Secured Parties securing the Secured Obligations) other than the following:
(a) Receivables that do not arise out of sales of goods or
rendering of services in the ordinary course of such Loan Party's
business;
(b) Receivables on terms other than those normal or customary
in such Loan Party's business;
(c) Receivables owing from any Person that is an Affiliate of
the Borrower;
(d) Receivables more than 90 days past the original invoice
date;
(e) Receivables owing from any Person of which an aggregate
amount of more than 25% of such Receivables owing is more than 60 days
past due;
(f) Receivables owing from any Person (i) that has disputed
liability for any Receivable owing from such Person or (ii) that has
otherwise asserted any claim, demand or liability, whether by action,
suit, counterclaim or otherwise; provided, however, that if such
disputed Receivables constitute 10% or less of the Receivables owing
from such Person, Receivables owing from such Person shall be excluded
from the definition of "Eligible Receivables" by this clause (f) only
to the extent of such disputed Receivables;
(g) Receivables owing from any Person that shall take or be
the subject of any action or proceeding of a type described in Section
6.01(f);
(h) Receivables (i) owing from any Person that is also a
supplier to or creditor of the Borrower or its Subsidiaries (other than
a supplier of wireless, internet or telephonic services and any other
Person to whom the Borrower or its Subsidiaries owes less than
$100,000) or (ii) representing any manufacturer's or supplier's
credits, discounts, incentive plans or similar arrangements entitling
the Borrower or its Subsidiaries to discounts on future purchase
therefrom;
(i) Receivables arising out of sales to account debtors
outside the United States of America or Canada unless backed by an
irrevocable letter of credit on terms, and issued by a bank organized
under the laws of the United States, or any State thereof, and having a
combined capital and surplus of at least $500,000,000 or any other
financial institution, acceptable to the Agent and such irrevocable
letter of credit is in the possession of the Agent if so requested;
(j) Receivables arising out of sales on a xxxx-and-hold,
guaranteed sale, sale-or-return, sale on approval or consignment basis
or subject to any right of return, set-off or charge-back;
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(k) Receivables owing from an account debtor that is an
agency, department or instrumentality of the United States or any State
thereof, or Canada or any province thereof exceeding an aggregate
amount of $1,000,000 owing from all such agencies, departments or
instrumentalities unless such Loan Party duly assigns its rights to
payment of such Receivable to the Agent pursuant to the Assignment of
Claims Act of 1940, as amended (31 U.S.C.Sections 3727 et seq.) or
the equivalent thereof under applicable Canadian law;
(l) Receivables in respect of which the Security Agreements,
after giving effect to the related filings of financing statements that
have then been made, if any, does not or has ceased to create a valid
and perfected first priority lien or security interest in favor of the
Agent for the benefit of the Secured Parties securing the Secured
Obligations and as to which no other Liens exist, other than Permitted
Liens; and
(m) Receivables owing from National Telecommunications, Inc.,
its successors or assigns;
provided that Eligible Receivables shall include as of any date of determination
50% of amounts pending invoicing which would constitute Eligible Receivables in
accordance with the above criteria upon invoicing but which have not yet been
invoiced due to normal billing cycles of Borrower and its Subsidiaries for the
applicable account debtor as long as (i) all services, performance and other
action (other than invoicing) required of Borrower and its Subsidiaries to xxxx
and collect such amounts shall have been completed without any contingency and
(ii) no more than 30 days shall have passed since the date of such completion.
The value of such Eligible Receivables shall be their book value
determined in accordance with GAAP unless the Agent determines, in its
reasonable discretion, that such Eligible Receivables shall be valued at a lower
value based upon the Agent's analysis of changes in any Loan Party's operations
or credit and collection experience.
"ENVIRONMENTAL ACTION" means any administrative, regulatory or
judicial action, suit, demand, demand letter, claim, notice of non-compliance or
violation, notice of liability or potential liability, investigation,
proceeding, consent order, consent agreement, abatement order or other order or
directive relating in any way to any Environmental Law, any Environmental Permit
or Hazardous Material or Hazardous Material Activity or arising from any
potential or alleged injury or threat to health, safety, natural resources or
the environment, including, without limitation, (a) by any governmental or
regulatory authority for enforcement, cleanup, removal, response, remedial or
other actions or damages and (b) by any governmental or regulatory authority or
third party for damages, contribution, indemnification, cost recovery,
compensation or injunctive relief.
"ENVIRONMENTAL LAW" means any current or future federal, state,
provincial, local or foreign statute, law, ordinance, rule, regulation, code,
order, writ, judgment, injunction, decree or judicial or agency interpretation,
policy or guidance relating to pollution or protection of the environment,
health, safety or natural resources, including, without limitation, those
relating to the use, handling, transportation, treatment, storage, disposal,
Release or discharge of Hazardous Materials, as amended or supplemented.
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"ENVIRONMENTAL PERMIT" means any permit, approval, certificate,
identification number, license, entitlement or other authorization required
under any Environmental Law or any waiver or amendment of the foregoing.
"EQUIPMENT" means all "Equipment" referred to in Section 1(a) of the
U.S. Security Agreement and Section 1.2(l)(b) of the Canadian Security
Agreement.
"EQUITY INTERESTS" means, with respect to any Person, shares of
capital stock of (or other ownership or profit interests in) such Person,
warrants, options or other rights for the purchase or other acquisition from
such Person of shares of capital stock of (or other ownership or profit
interests in) such Person, securities convertible into or exchangeable for
shares of capital stock of (or other ownership or profit interests in) such
Person or warrants, rights or options for the purchase or other acquisition from
such Person of such shares (or such other interests), and other ownership or
profit interests in such Person (including, without limitation, partnership,
member or trust interests therein), whether voting or nonvoting, and whether or
not such shares, warrants, options, rights or other interests are authorized or
otherwise existing on any date of determination.
"EQUITY INVESTORS" means, collectively, MDC Asia, MDC III, MDC
Europe, and Gamma Fund LLC, a California limited liability corporation.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA AFFILIATE" means any Person that for purposes of Title IV of
ERISA is, or at the applicable time was, a member of the controlled group of any
Loan Party, or under common control with any Loan Party, within the meaning of
Section 414 of the Internal Revenue Code.
"ERISA EVENT" means (a) (i) the occurrence of a reportable event,
within the meaning of Section 4043 of ERISA, with respect to any Plan unless the
30-day notice requirement with respect to such event has been waived by the
PBGC; or (ii) the requirements of subsection (1) of Section 4043(b) of ERISA
(without regard to subsection (2) of such Section) are met with respect to a
contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan, and
an event described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c)
of ERISA is reasonably expected to occur with respect to such Plan within the
following 30 days; (b) the application for a minimum funding waiver with respect
to a Plan, (c) the provision by the administrator of any Plan of a notice of
intent to terminate such Plan, pursuant to Section 4041(a)(2) of ERISA
(including any such notice with respect to a plan amendment referred to in
Section 4041(e) of ERISA); (d) the cessation of operations at a facility of any
Loan Party or any ERISA Affiliate in the circumstances described in Section
4062(e) of ERISA; (e) the withdrawal by any Loan Party or any ERISA Affiliate
from a Multiple Employer Plan during a plan year for which it was a substantial
employer, as defined in Section 4001(a)(2) of ERISA; (f) the conditions for
imposition of a lien under Section 302(f) of ERISA shall have been met with
respect to any Plan; (g) the adoption of an amendment to a Plan requiring the
provision of security to such Plan, pursuant to Section 307 of ERISA; or (h) the
institution by the PBGC of proceedings to terminate a Plan pursuant to Section
4042 of ERISA, or the occurrence of any
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event or condition described in Section 4042 of ERISA that could constitute
grounds for the termination of, or the appointment of a trustee to administer,
such Plan.
"ESATISFY" means xXxxxxxx.xxx, Inc., a Delaware corporation of which
72% of the issued and outstanding common stock is owned by the Borrower.
"EVENTS OF DEFAULT" has the meaning specified in Section 6.01.
"EXCESS CASH FLOW" means, for any Fiscal Quarter, the sum of:
(a) an amount equal to the Consolidated EBITDA of the Borrower
and its Subsidiaries for such Fiscal Quarter; minus
(b) an amount equal to the amount of all Capital Expenditures
of the Borrower and its Subsidiaries paid in cash during such Fiscal
Quarter to the extent permitted by this Agreement; minus
(c) Interest Expense paid in cash for such Fiscal Quarter;
minus
(d) $1,250,000, to the extent actually expended during the
applicable Fiscal Quarter by the Borrower to pay Accounts Payable.
"EXISTING ADVANCES" means the advances outstanding under the
Existing Credit Agreement on or prior to the Restatement Date, including
Existing Term A Advances, Existing Term B Advances, Existing Term C Advances or
Existing Working Capital Advances.
"EXISTING CREDIT AGREEMENT" has the meaning specified in the
Preliminary Statements.
"EXISTING DEBT" means Debt of the Loan Parties and their
Subsidiaries outstanding immediately before the effectiveness of this Agreement.
"EXISTING HEDGE AGREEMENTS" means the interest rate cap agreement,
dated September 13, 1999 between the Borrower and Bank of America, N.A., and the
interest rate cap agreement, dated September 30, 1999 between the Borrower and
IBJ Whitehall Bank & Trust Co.
"EXISTING TERM A ADVANCES" means the Term A Advances made pursuant
to Section 2.01(a) of the Existing Credit Agreement and outstanding under the
Existing Credit Agreement on the Restatement Date.
"EXISTING TERM B ADVANCES" means the Term B Advances made pursuant
to Section 2.01(b) of the Existing Credit Agreement and outstanding under the
Existing Credit Agreement on the Restatement Date.
"EXISTING TERM C ADVANCES" means the Term C Advances made pursuant
to Section 2.01(c) of the Existing Credit Agreement and outstanding under the
Existing Credit Agreement on the Restatement Date.
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"EXISTING WORKING CAPITAL ADVANCES" means the Working Capital
Advances made pursuant to Section 2.01(d) of the Existing Credit Agreement and
outstanding under the Existing Credit Agreement on the Restatement Date.
"EXTRAORDINARY RECEIPT" means any cash received by or paid to or for
the account of any Person not in the ordinary course of business, including,
without limitation, tax refunds, pension plan reversions, proceeds of insurance
(other than proceeds of business interruption insurance to the extent such
proceeds constitute compensation for lost earnings), condemnation awards (and
payments in lieu thereof) and any cash purchase price adjustment or indemnity
payment received in connection with any purchase and sale or merger agreement;
provided, however, that so long as no Default shall have occurred and be
continuing an Extraordinary Receipt shall not include (i) cash receipts received
from proceeds of insurance to the extent that such proceeds in respect of loss
or damage to equipment, fixed assets or real property are applied (or in respect
of which expenditures were previously incurred) to replace or repair the
equipment, fixed assets or real property in respect of which such proceeds were
received in accordance with the terms of the Loan Documents, so long as such
application is made within six months after the occurrence of such damage or
loss, (ii) cash received (A) as an advance under a Government Loan or (B) from
any governmental agency, department or instrumentality as a grant for economic
development or other specific purpose not related to the sale of telemarketing
services to such agency, department or instrumentality and (iii) any cash
proceeds received by the Borrower or any Subsidiary which is required to be paid
directly over to any third party so long as such payment is made to such third
party within 10 Business Days of receipt of such cash proceeds.
"FACILITY" means the Term Loan Facility or the Working Capital
Facility.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest
rate per annum equal for each day during such period (i) to the rate published
by the Dow Xxxxx Markets service on page five of its daily report as the "ASK"
rate as of 10:00 A.M. (New York City time) for such day (or, if such day is not
a Business Day, for the immediately preceding Business Day) or (ii) if the Dow
Xxxxx Markets service shall cease to publish or otherwise shall not publish such
rates for any day that is a Business Day, to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average of the quotations for such day for such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"FINAL MATURITY DATE" means July 1, 2002.
"FISCAL QUARTER" means a fiscal quarter of the Borrower and its
Consolidated Subsidiaries ending on March 31, June 30, September 30 or December
31 in any calendar year.
"FISCAL YEAR" means a fiscal year of the Borrower and its
Consolidated Subsidiaries ending on December 31 in any calendar year.
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"FOREIGN SUBSIDIARY" means a Subsidiary that is organized under the
laws of a jurisdiction other than the United States or any State thereof or the
District of Columbia.
"FUNDED DEBT" of any Person means Debt of such Person (other than
Debt described in clauses (f), (h), (i) and (j) of the definition thereof and
the Intercompany Notes) that by its terms matures more than one year after the
date of creation or matures within one year from such date but is renewable or
extendible, at the option of such Person, to a date more than one year after
such date or arises under a revolving credit or similar agreement that obligates
the lender or lenders to extend credit during a period of more than one year
after such date, including, without limitation, all amounts of Funded Debt of
such Person required to be paid or prepaid within one year after the date of
determination.
"GAAP" has the meaning specified in Section 1.03.
"GOVERNMENT LOAN" means a loan made by any governmental agency,
department or instrumentality for economic development or other specific purpose
not related to the sale of telemarketing services to such agency, department or
instrumentality.
"GUARANTOR" means each of TLSP Trademarks, Inc., TeleSpectrum
Worldwide (Canada) Inc., TeleSpectrum Government Services, Inc., CRW
Financial, Inc., and each other U.S. Subsidiary and Canadian Subsidiary of
the Borrower that may become a guarantor or collateral grantor pursuant to
Section 5.01(j) or 5.01(k).
"GUARANTIES" means the U.S. Guaranty and the Canadian Guaranty.
"HAZARDOUS MATERIALS" means (a) petroleum or petroleum products,
by-products or breakdown products, any flammable substances or explosives,
radioactive materials, asbestos-containing materials, urea formaldehyde foam
insulation, polychlorinated biphenyls, pesticides and radon gas and (b) any
other chemicals, materials or substances designated, classified or regulated or
remediated as hazardous or toxic or as a pollutant or contaminant under any
Environmental Law.
"HAZARDOUS MATERIALS ACTIVITY" means any past, current, proposed or
threatened activity, event or occurrence involving any Hazardous Materials,
including the use, manufacture, presence, storage, Release, threatened Release,
discharge, placement, generation, transportation, processing, construction,
treatment, abatement, removal, remediation, disposal, disposition or handling of
any Hazardous Materials, and any corrective action or response action with
respect to any of the foregoing.
"HEDGE AGREEMENTS" means interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap agreements,
currency future or option contracts and other hedging agreements.
"HEDGE BANK" means any Lender Party or any of its Affiliates in its
capacity as a party to a Secured Hedge Agreement and, in the case of the
Existing Hedge Agreements, Bank of America, N.A. and IBJ Whitehall Bank & Trust
Co.
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"IDRC" International Data Response Corporation, a Delaware
corporation.
"INDEMNIFIED COSTS" has the meaning specified in Section 7.05(a).
"INDEMNIFIED PARTY" has the meaning specified in Section 8.04(b).
"INSUFFICIENCY" means, with respect to any Plan, the amount, if any,
of its unfunded benefit liabilities, as defined in Section 4001(a)(18) of ERISA.
"INTERCOMPANY NOTES" has the meaning specified in Section
5.02(b)(i)(B).
"INTERCOMPANY SUBORDINATION AGREEMENT" has the meaning specified in
Section 5.02(b)(i)(B).
"INTEREST COVERAGE RATIO" means, with respect to any Person for any
period, the ratio of (a) Consolidated EBITDA of such Person and its Subsidiaries
for such period to (b) Interest Expense (excluding Interest Expense not payable
in cash or interest paid in cash pursuant to Section 2.07(c) of such Person and
its Subsidiaries) for such period.
"INTEREST EXPENSE" means, with respect to any Person for any period,
interest expense (including the interest component on obligations under
Capitalized Leases), whether paid or accrued, on all Debt of such Person and its
Subsidiaries for such period, including, without limitation and without
duplication, (a) interest expense in respect of Debt resulting from Advances,
(b) commissions, discounts and other fees and charges payable in connection with
letters of credit, and (c) any net payment payable in connection with Hedge
Agreements less any net credits received in connection with Hedge Agreements.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"INVENTORY" means all "Inventory" referred to in Section 1(b) of the
U.S. Security Agreement and Section 1.2(l)(a) of the Canadian Security
Agreement.
"INVESTMENT" in any Person means any loan or advance to such Person,
any purchase or other acquisition of any Equity Interests or Debt or the assets
comprising a division or business unit or a substantial part or all of the
business of such Person, any capital contribution to such Person or any other
direct or indirect investment in such Person, including, without limitation, any
acquisition by way of a merger or consolidation and any arrangement pursuant to
which the investor incurs Debt of the types referred to in clause (g) or (h) of
the definition of "DEBT" in respect of such Person.
"LEASED REAL PROPERTY REPORT" has the meaning specified in Section
3.01(k).
"LENDER PARTY" means any Lender.
"LENDERS" means the Lenders and each Person that shall become a
Lender hereunder pursuant to Section 8.07.
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"LIEN" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance on title
to real property.
"LOAN DOCUMENTS" means (a) for purposes of this Agreement and the
Notes, and any amendment, supplement or modification hereof or thereof, (i) this
Agreement, (ii) the Notes, (iii) the Collateral Documents, (iv) the Guaranties,
and (v) the Acknowledgement and Consent, and (b) for purposes of the Collateral
Documents and for all other purposes other than for purposes of this Agreement
and the Notes, (i) this Agreement, (ii) the Notes, (iii) the Collateral
Documents, (iv) the Guaranties, (v) the Acknowledgement and Consent, (vi) each
Secured Hedge Agreement, and (vii) any other document or instrument issued
pursuant to or in connection with any, of the foregoing, in each case as
amended, supplemented or otherwise modified from time to time in accordance with
their terms.
"LOAN PARTIES" means the Borrower and each of the Guarantors.
"LOAN VALUE" means, with respect to Eligible Receivables, an amount
up to 65% of the Receivables, provided, however, that the Agent may, in its
reasonable discretion based on its analysis of changes in the operations or
credit and collection policy of any Loan Party arising after the date hereof
that may dilute the value of Eligible Receivables, revise from time to time the
percentage of the value of any individual item of Eligible Receivables that
shall be used in determining Loan Value.
"MAJORITY LENDERS" means at any time Lenders owed or holding more
than 50% of the Pro Rata Shares of all Lenders.
"MANAGEMENT INCENTIVE PROGRAM" has the meaning specified in Section
3.01(m).
"MANAGEMENT STOCK OPTION PLAN" means the TeleSpectrum Worldwide Inc.
1996 Equity Compensation Plan, as amended and restated as of May 12, 1999, and
as further amended, supplemented, or otherwise modified from time to time in
accordance with its terms, to the extent permitted by, and in accordance with,
the Loan Documents.
"MARGIN STOCK" has the meaning specified in Regulation U.
"MATERIAL ADVERSE CHANGE" means any material adverse change in the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower and its Subsidiaries, taken as a whole.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower and its Subsidiaries, taken as a whole,
(b) the rights and remedies of the Agent or any Lender Party under any
Transaction Document or (c) the ability of any Loan Party to perform its
Obligations under any Loan Document, Related Document or Transaction Document to
which it is or is to be a party.
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"MATERIAL CONTRACT" shall mean (a) any contract, lease or other
agreement material to the business of the Borrower and its Subsidiaries or
involving the expenditure or receipt of $100,000 or more (or its property value
equivalents) in any Fiscal Year, and (b) any employment agreement with Xxxxx
Xxxxxx or any other member of the Borrower's senior management team.
"MDC III" XxXxxx XxXxxxx & Co. III, L.P., a California limited
partnership.
"MDC ASIA" XxXxxx XxXxxxx & Co. III (Asia), L.P., a California
limited partnership.
"MDC EUROPE" XxXxxx XxXxxxx & Co. Offshore (Europe) III, L.P., a
Bermuda limited partnership.
"MDC GROUP INVESTORS" means, collectively, the Equity Investors, MDC
Management Company III, L.P., and MDC Management Company IIIA.
"MDC SUBORDINATED DEBT" means the indebtedness of the Borrower
evidenced by the MDC Subordinated Notes.
"MDC SUBORDINATED NOTES" means, collectively, the amended and
restated promissory notes dated as of April 16, 2001 executed and delivered by
the Borrower, as payor, to each of the Equity Investors, as payees,
respectively, as amended, supplemented or otherwise modified from time to time
in accordance with their terms and the terms of this Agreement.
"MDC SUBORDINATION AGREEMENT" means that certain amended and
restated subordination agreement dated as of April 16, 2001 among the Equity
Investors and the Borrower in favor of the Agent, as amended, supplemented or
otherwise modified from time to time in accordance with its terms and the terms
of this Agreement.
"MERGER AGREEMENT" means that certain Merger Agreement dated as of
January 14, 1999, as amended by the Amendment to Agreement and Plan of Merger
dated as of February 25, 1999.
"MULTIEMPLOYER PLAN" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, (a) to which any Loan Party or any ERISA Affiliate
is making or accruing an obligation to make contributions, or (b) to which any
Loan Party or any ERISA Affiliate has contributed and to which any Loan Party or
ERISA Affiliate could have liability under Title IV of ERISA.
"MULTIPLE EMPLOYER PLAN" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any Loan
Party or any ERISA Affiliate and for employees of at least one Person other than
the Loan Parties and the ERISA Affiliates or (b) was so maintained and in
respect of which any Loan Party or any ERISA Affiliate could have liability
under Section 4064 or 4069 of ERISA in the event such plan has been or were to
be terminated.
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"NET CASH PROCEEDS" means, with respect to any sale, lease, transfer
or other disposition of any asset or the incurrence or issuance of any Debt or
capital stock or other ownership or profit interest, any securities convertible
into or exchangeable for capital stock or other ownership or profit interest
(including, without limitation, any capital contribution) or any warrants,
rights, options or other securities to acquire capital stock or other ownership
or profit interest by any Person, or any Extraordinary Receipt received by or
paid to or for the account of any Person, the aggregate amount of cash received
from time to time (whether as initial consideration or through payment or
disposition of deferred consideration) by or on behalf of such Person in
connection with such transaction after deducting therefrom only (without
duplication) (a) reasonable and customary brokerage commissions, underwriting
fees and discounts, legal fees, finder's fees and other similar fees and
commissions, (b) the amount of taxes payable in connection with or as a result
of such transaction and (c) the amount of any Debt secured by a Lien on such
asset that, by the terms of such transaction, is required to be repaid upon such
disposition, in each case to the extent, but only to the extent, that the
amounts so deducted are properly attributable to such transaction or to the
asset that is the subject thereof and are, in the case of clauses (a) and (c),
at the time of receipt of such cash, actually paid to a Person that is not an
Affiliate of such Person or any Loan Party or any Affiliate of any Loan Party
and, in the case of clause (b), on the earlier of the dates on which the tax
return covering such taxes is filed or required to be filed, provided, however,
that in the case of taxes that are deductible under clause (b) but for the fact
that at the time of receipt of such cash, such taxes have not been actually paid
or are not then payable, such Person may deduct an amount (the "RESERVED
AMOUNT") equal to the amount reserved in accordance with GAAP as a reasonable
estimate for such taxes, other than taxes for which such Loan Party or such
Subsidiary is indemnified, provided further, however, that at the time such
taxes are paid, an amount equal to the amount, if any, by which the Reserved
Amount exceeds the amount actually so paid, the amount of such excess shall
constitute "Net Cash Proceeds."
"NOTE" means a Term Note, a Working Capital Note or a Deferred
Interest Note, in each case to the extent required to be issued pursuant to
Section 2.15 or executed and delivered pursuant to Sections 2.07(c) or 3.01(b).
"NOTICE OF BORROWING" has the meaning specified in Section 2.02(b).
"OBLIGATION" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including, without
limitation, any liability, of such Person on any claim, whether or not the right
of any creditor to payment in respect of such claim is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed,
legal, equitable, secured or unsecured, and whether or not such claim is
discharged, staved or otherwise affected by any proceeding referred to in
Section 6.01(f). Without limiting the generality of the foregoing, the
Obligations of any Loan Party under the Loan Documents include (a) the
obligation to pay principal, interest, commissions, charges, expenses, fees,
attorneys' fees and disbursements, consulting and advisory fees and
disbursements, indemnities and other amounts payable by such Loan Party under
any Loan Document and (b) the obligation of any Loan Party to reimburse any
amount in respect of any of the foregoing that such Lender Party, in its sole
discretion, may elect to pay or advance on behalf of such Loan Party.
"OECD" means the Organization for Economic Cooperation and
Development.
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"OPEN YEAR" has the meaning specified in Section 4.01(p).
"OTHER TAXES" has the meaning specified in Section 2.12(b).
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
"PERMITTED LIENS" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding shall have
been commenced: (a) Liens for taxes, assessments and governmental charges or
levies to the extent not required to be paid under Section 5.01(b) hereof, (b)
Liens imposed by law, such as materialmen's, mechanics', carriers', workmen's
and repairmen's Liens and other similar Liens arising in the ordinary course of
business securing obligations that either individually or when aggregated with
all other Permitted Liens outstanding on any date of determination do not
materially affect the use or value of the property to which they relate; (c)
pledges or deposits to secure obligations under workers' compensation laws or
similar legislation or to secure public or statutory obligations; and (d)
easements, rights of way and other encumbrances on title to real property that
do not render title to the property encumbered thereby unmarketable or
materially adversely affect the use of such property for its present purposes.
"PERSON" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"PLAN" means a Single Employer Plan or a Multiple Employer Plan.
"PLEDGED DEBT" means, collectively, the "Initial Pledged Debt"
referred to in the U.S. Security Agreement and any other Debt pledged from time
to time pursuant to any Collateral Document.
"PLEDGED INTERESTS" means, collectively, the "Initial Pledged Equity
Interests" referred to in the U.S. Security Agreement and any other Equity
Interest pledged from time to time pursuant to any Collateral Document.
"PREFERRED INTERESTS" means, with respect to any Person, Equity
Interests issued by such Person that are entitled to a preference or priority
over any other Equity Interests issued by such Person upon any distribution of
such Person's property and assets, whether by dividend or upon liquidation.
"PREPAYMENT AMOUNT" has the meaning specified in Section 5.03(a).
"PREPAYMENT DATE" has the meaning specified in Section 5.03(a).
"PREPAYMENT NOTICE" has the meaning specified in Section 5.03(a).
"PRO RATA SHARE" means (i) with respect to all payments,
computations and other matters relating to the Term Advances of any Term Lender,
the percentage obtained by dividing (x) the Term Advance Exposure of that Term
Lender by (y) the Term Advance Exposure of all
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Term Lenders; (ii) with respect to all payments, computations and other matters
relating to the Working Capital Advances of any Working Capital Lender, the
percentage obtained by dividing (x) the Working Capital Commitment of that
Working Capital Lender by (y) the Working Capital Commitments of all Working
Capital Lenders; (iii) with respect to all payments, computations and other
matters relating to the Deferred Interest Notes of any Lender, the percentage
obtained by dividing (x) the principal amount of the Deferred Interest Note held
by that Lender by (y) the principal amount of the Deferred Interest Notes held
by all Lenders; and (iv) for all other purposes with respect to each Lender
(including, without limitation, determining the calculation of Required
Lenders), the percentage obtained by dividing (x) the sum of that Lender's
Deferred Interest Notes, Term Advance Exposure and the Working Capital
Commitment (or Working Capital Advances if the Working Capital Commitments have
terminated) by (y) the sum of all Deferred Interest Notes, all Term Loan
Advances and all Working Capital Commitments (or Working Capital Advances if the
Working Capital Commitments have been terminated); in any case as the applicable
percentage may be adjusted by assignments permitted pursuant to Section 8.07.
The initial Pro Rata Share of each Lender for purposes of each of clauses (i),
(ii), and (iv) of the preceding sentence is set forth opposite the name of the
Lender in Schedule IA annexed hereto.
"PROPOSAL" has the meaning specified in Section 4.01(cc).
"RECEIVABLES" means all "Receivables" referred to in Section 1(c) of
the U.S. Security Agreements and all receivables referred to in Section
1.2(l)(c) of the Canadian Security Agreement.
"REDEEMABLE" means, with respect to any Equity Interest, any Debt,
or any other right or Obligation, any such Equity Interest, Debt, right or
Obligation, that (a) the issuer has undertaken to redeem at a fixed or
determinable date or dates, whether by operation of a sinking fund or otherwise,
or upon the occurrence of a condition not solely within the control of the
issuer or (b) is redeemable at the option of the holder.
"REGISTER" has the meaning specified in Section 8.07(d).
"REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"RELATED DOCUMENTS" means the Intercompany Notes, the Intercompany
Subordination Agreements, the TLSP Subordination Agreements, the MDC
Subordination Agreement, the MDC Subordinated Notes and any promissory note
evidencing all or a portion of the TLSP Subordinated Debt.
"RELEASE" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including the abandonment or disposal of any barrels, containers or
other closed receptacles containing any Hazardous Materials), including the
movement of any Hazardous Materials through the air, soil, surface water or
groundwater.
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"REQUIRED LENDERS" means at any time Lenders owed or holding at
least 66-2/3% of the Pro Rata Shares of all Lenders.
"RESPONSIBLE OFFICER" means any executive officer of any Loan Party
or any of its Subsidiaries.
"RESTATEMENT DATE" means the date on or before April 16, 2001 on
which all conditions to the effectiveness of this Agreement set forth in Section
3.01 are satisfied or waived.
"RESTRUCTURING FEE" has the meaning specified in Section 2.08(c).
"ROLLING PERIOD" means (a) for purposes of calculating EBITDA used
in determining compliance with the requirements of Section 5.04(e) for any month
or Fiscal Quarter, as the case may be, the consecutive 12-month period ending on
the last day of such month, or the consecutive four-Fiscal Quarter period ending
on the last day of such Fiscal Quarter, respectively, and (b) for all other
purposes, the consecutive 12-month period ending on the last day of such month,
or the consecutive four-Fiscal Quarter period ending on the last day of such
Fiscal Quarter, respectively.
"SECURED HEDGE AGREEMENT" means any Hedge Agreement required or
permitted under Article V that is entered into by and between any Loan Party and
any Hedge Bank.
"SECURED OBLIGATIONS" has the meaning specified in each of the
Security Agreements.
"SECURED PARTIES" means the Agent, the Lender Parties, the Hedge
Banks and the other Persons the Obligations owing to which are or are purported
to be secured by the Collateral under the terms of the Collateral Documents.
"SECURITY AGREEMENTS" means the U.S. Security Agreement and the
Canadian Security Agreement.
"SEVENTH AMENDMENT" means Amendment No. 7 & Limited Waiver dated
as of November 17, 2000 to the Existing Credit Agreement, as amended.
"SINGLE EMPLOYER PLAN" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any Loan
Party or any ERISA Affiliate and for employees of no Person other than the Loan
Parties and the ERISA Affiliates or (b) was so maintained and in respect of
which any Loan Party or any ERISA Affiliate could have liability under Section
4069 of ERISA in the event such plan has been or were to be terminated.
"SUBSIDIARY" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which) more
than 50% of (a) the issued and outstanding capital stock having ordinary voting
power to elect a majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any other class or classes
of such corporation shall or might have voting power upon the occurrence of any
contingency), (b) the interest in the capital or profits of such limited
liability company,
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partnership or joint venture or (c) the beneficial interest in such trust or
estate is at the time directly or indirectly owned or controlled by such Person,
by such Person and one or more of its other Subsidiaries or by one or more of
such Person's other Subsidiaries, provided, however, that for purposes of this
Agreement and the other Loan Documents, eSatisfy shall be deemed not to be a
subsidiary of the Borrower.
"TARP ACQUISITION AGREEMENT" means the Asset Purchase Agreement
dated as of October 1, 1996, as amended by the Mutual Release Agreement dated
September, 1997 and the Amendment to the Asset Purchase Agreement dated as of
December 4, 1998, between and among the Borrower, Technical Assistance Research
Programs, Inc. (formerly known as TARP, Inc.), a District of Columbia
corporation, and Tarp Information Systems, Inc., a Maryland corporation, Xxxx
Xxxxxxx and Xxxx Xxxxxxx.
"TARP EARNOUT" means the earnout arrangement pursuant to the TARP
Acquisition Agreement.
"TAXES" has the meaning specified in Section 2.12(a).
"TERM ADVANCE" means the advances the Lenders have agreed to
maintain in accordance with Sections 2.01(a), (b), (c), (f) and (g).
"TERM ADVANCE EXPOSURE" means, with respect to any Lender as of any
date of determination after the Restatement Date, the outstanding principal
amount of Term Advances of that Lender.
"TERM A LENDER" means any Lender that holds Term A Advances under
the Existing Credit Agreement on the Restatement Date.
"TERM B LENDER" means any Lender that holds Term B Advances under
the Existing Credit Agreement on the Restatement Date.
"TERM C LENDER" means any Lender that holds a Term C Advances under
the Existing Credit Agreement on the Restatement Date.
"TERM LENDER" means (i) prior to the Restatement Date, Term A
Lenders, Term B Lenders and Term C Lenders, and (ii) after the Restatement Date,
any Lender who holds any portion of Term Advances.
"TERM LOAN FACILITY" means, at any time, the aggregate amount of
Term Lenders' Term Advance Exposures at such time.
"TERM NOTES" means promissory notes of the Borrower payable to the
order of any Lender, substantially in the form of Exhibit A hereto, evidencing
the indebtedness of the Borrower to such Lender resulting from the Term Advance
held by such Lender.
"TERMINATION DATE" means the date of termination in whole of the
Working Capital Commitments and acceleration of the Obligations pursuant to this
Agreement.
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"TLSP INVESTMENTS" means TLSP Investments, Inc., a Delaware
corporation and wholly-owned Subsidiary of the Borrower.
"TLSP INVESTMENTS SUBORDINATED DEBT" means the indebtedness
evidenced by (a) the promissory note dated June 30, 1999 made by the Borrower,
as payor, to TLSP Investments, as payee, in a face amount of up to $500,000,000
and (b) the promissory note dated June 30, 1999 made by the TeleSpectrum
Worldwide (Canada) Inc., as payor, to TLSP Investments, as payee, in a face
amount of up to $5,500,000, as such promissory note may be amended, supplemented
or otherwise modified from time to time in accordance with its terms, the TLSP
Investments Subordination Agreement and the terms of this Agreement.
"TLSP INVESTMENTS SUBORDINATION AGREEMENT" means that certain
subordination agreement dated June 30, 1999 executed by TLSP Investments (as
amended, supplemented or otherwise modified in accordance with its terms and the
terms of this Agreement).
"TLSP SUBORDINATED DEBT" means the TLSP Investments Subordinated
Debt and the TLSP Trademarks Subordinated Debt.
"TLSP SUBORDINATION AGREEMENTS" means, collectively, the TLSP
Investments Subordination Agreement and the TLSP Trademarks Subordination
Agreement.
"TLSP TRADEMARKS" means TLSP Trademarks, Inc., a Delaware
corporation and wholly-owned Subsidiary of the Borrower.
"TLSP TRADEMARKS SUBORDINATED DEBT" means the indebtedness evidenced
by the promissory note dated June 30, 1999 made by the Borrower, as payor, to
TLSP Trademarks, as payee, in a face amount of up to $50,000,000, as such
promissory note may be amended, supplemented or otherwise modified from time to
time in accordance with its terms, the TLSP Trademarks Subordination Agreement
and the terms of this Agreement.
"TLSP TRADEMARKS SUBORDINATION AGREEMENT" means that certain
subordination agreement dated June 30, 1999 executed by TLSP Trademarks (as
amended, supplemented or otherwise modified in accordance with its terms and the
terms of this Agreement).
"TRANSACTION DOCUMENTS" means, collectively, the Loan Documents
and the Related Documents.
"U.S. SUBSIDIARY" means any Subsidiary of the Borrower organized
under the laws of the United States or one of the States of the United States.
"UNUSED WORKING CAPITAL COMMITMENT" means, with respect to any
Working Capital Lender at any time, such Lender's Working Capital Commitment at
such time minus the sum of the aggregate principal amount of all Working Capital
Advances made by such Lender and outstanding at such time.
"U.S. GUARANTY" that certain Guaranty dated as of June 30, 1999,
executed and delivered by each U.S. Subsidiary of the Borrower (other than TLSP
Investments) in favor of the
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Secured Parties, in the form of Exhibit F-1, as amended, supplemented or
otherwise modified from time to time in accordance with its terms.
"U.S. SECURITY AGREEMENT" that certain Security Agreement dated as
of June 30, 1999, executed and delivered by the Borrower and its Subsidiaries
(other than TLSP Investments) to the Collateral Agent, in the form of Exhibit D,
as amended, supplemented or otherwise modified from time to time in accordance
with its terms.
"VARIANCE REPORT" means a report to be delivered by the Borrower to
the Agent, in form and substance satisfactory to the Agent and certified as
being true and correct to his or her knowledge after diligent inquiry by the
chief financial officer of the Borrower, on a weekly basis commencing on the
last Business Day of each week after the Restatement Date reflecting the actual
cash receipts and disbursements on a line item basis for the preceding week (and
on a cumulative basis since the beginning of the present Fiscal Quarter), the
percentage variance of such amounts from those set forth in the annual forecasts
delivered pursuant to Section 5.01(r) for the preceding month (and cumulatively)
and containing a narrative analysis of the Borrower's performance for the
preceding month and any variance from such period in the annual forecasts
delivered pursuant to Section 5.01(r).
"VOTING INTERESTS" means shares of capital stock issued by a
corporation, or equivalent Equity Interests in any other Person, the holders of
which are ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such Person,
even if the right so to vote has been suspended by the happening of such a
contingency.
"WAIVER FEE" means that certain waiver and amendment fee equal to
0.50% of all Advances outstanding under the Existing Credit Agreement as of
November 17, 2000, for each 30-day period (or part thereof) during which the
Seventh Amendment was in effect, such fee having been earned in full in November
17, 2000 and converted to Term Advances pursuant to subsection 2.01(g).
"WELFARE PLAN" means a welfare plan, as defined in Section 3(l) of
ERISA, that is maintained for employees of any Loan Party or in respect of which
any Loan Party could have a liability.
"WITHDRAWAL LIABILITY" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.
"WORKING CAPITAL ADVANCE" has the meaning specified in Section
2.02(a).
"WORKING CAPITAL AVAILABILITY" means, on any date, an amount equal
to the difference derived when the sum of the principal amount of Working
Capital Advances then outstanding is subtracted from the lesser of (a) Loan
Value, and (b) the Working Capital Commitments.
"WORKING CAPITAL BORROWING" means a borrowing consisting of
simultaneous Working Capital Advances made by the Working Capital Lenders.
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"WORKING CAPITAL COMMITMENT" means, with respect to any Working
Capital Lender at any time, the amount set forth opposite such Lender's name on
Schedule I hereto under the caption "Working Capital Commitment" or, if such
Lender has entered into one or more Assignment and Acceptances, set forth for
such Lender in the Register maintained by the Agent pursuant to Section 8.07(d)
as such Lender's "Working Capital Commitment", as such amount may be reduced at
or prior to such time pursuant to Section 2.05.
"WORKING CAPITAL FACILITY" means, at any time, the aggregate amount
of the Working Capital Lenders' Working Capital Commitments at such time.
"WORKING CAPITAL LENDER" means any Lender that has a Working
Capital Commitment.
"WORKING CAPITAL NOTE" means a promissory note of the Borrower
payable to the order of any Working Capital Lender, in substantially the form of
Exhibit A-4 hereto, evidencing the aggregate indebtedness of the Borrower to
such Lender resulting from the Working Capital Advances held by such Lender to
the extent required to be issued pursuant to Section 2.15.
SECTION 1.02. Computation of Time Periods; Other Definitional
Provisions. In this Agreement and the other Loan Documents, in the computation
of periods of time from a specified date to a later specified date, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding". References in the Loan Documents to any agreement or contract
"as amended" shall mean and be a reference to such agreement or contract as
amended, amended and restated, supplemented or otherwise modified from time to
time in accordance with its terms.
SECTION 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistent with those applied in the preparation
of the financial statements referred to in Section 4.01(f) ("GAAP").
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. Term Advances and Term Notes.
(a) Conversion of Existing Term A Advances into Term Advances
on the Restatement Date. Notwithstanding anything to the contrary in
this Agreement, subject to the terms and conditions of this Agreement
and in reliance upon the representations and warranties of the Borrower
herein set forth, as of the Restatement Date, $12,057,500 in principal
amount of Existing Term A Advances shall be converted into and shall
thereafter be Term Advances for all purposes of this Agreement. Any
amounts owed (whether or not presently due and payable) by Borrower to
a Term A Lender under or in respect of an Existing Term A Advance
converted into a Term Advance as provided in this subsection 2.01(a)
shall, as of the Restatement Date, be deemed to be owed under or in
respect of the Term Advance into which such Existing Term A Advance was
converted
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and such amounts owed shall thereafter be evidenced by the Term Note
delivered to such Lender by Borrower pursuant to subsection 2.01(j). In
connection with the conversion of Existing Term A Advances into Term
Advances pursuant to this subsection 2.01(a), Borrower shall not be
required to deliver any notice of prepayment or Notice of Borrowing or
to satisfy any other condition relating to required amounts of
prepayments or borrowings hereunder.
(b) Conversion of Existing Term B Advances into Term Advances
on the Restatement Date. Notwithstanding anything to the contrary in
this Agreement, subject to the terms and conditions of this Agreement
and in reliance upon the representations and warranties of Borrower
herein set forth, as of the Restatement Date, $19,564,100 in principal
amount of Existing Term B Advances shall be converted into and shall
thereafter be Term Advances for all purposes of this Agreement. Any
amounts owed (whether or not presently due and payable) by Borrower to
a Term B Lender under or in respect of an Existing Term B Advance
converted into a Term Advance as provided in this subsection 2.01(b)
shall, as of the Restatement Date, be deemed to be owed under or in
respect of the Term Advance into which such Existing Term B Advance was
converted and such amounts owed shall thereafter be evidenced by the
Term Note delivered to such Lender by Borrower pursuant to subsection
2.01(j). In connection with the conversion of Existing Term B Advances
into Term Advances pursuant to this subsection 2.01(b), Borrower shall
not be required to deliver any notice of prepayment or Notice of
Borrowing or to satisfy any other condition relating to required
amounts of prepayments or borrowings hereunder.
(c) Conversion of Existing Term C Advances into Term Advances
on the Restatement Date. Notwithstanding anything to the contrary in
this Agreement, subject to the terms and conditions of this Agreement
and in reliance upon the representations and warranties of Borrower
herein set forth, as of the Restatement Date, $49,403,400 in principal
amount of Existing Term C Advances shall be converted into and shall
thereafter be Term Advances for all purposes of this Agreement. Any
amounts owed (whether or not presently due and payable) by Borrower to
a Term C Lender under or in respect of an Existing Term C Advance
converted into a Term Advance as provided in this subsection 2.01(c)
shall, as of the Restatement Date, be deemed to be owed under or in
respect of the Term Advance into which such Existing Term C Advance was
converted and such amounts owed shall thereafter be evidenced by the
Term Note delivered to such Lender by Borrower pursuant to subsection
2.01(j). In connection with the conversion of Existing Term B Advances
into Term Advances pursuant to this subsection 2.01(c), Borrower shall
not be required to deliver any notice of prepayment or Notice of
Borrowing or to satisfy any other condition relating to required
amounts of prepayments or borrowings hereunder.
(d) [Intentionally Omitted].
(e) [Intentionally Omitted].
(f) Conversion of Certain Existing Working Capital Advances
into Term Advances on the Restatement Date. Notwithstanding anything to
the contrary in this
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Agreement, subject to the terms and conditions of this Agreement and in
reliance upon the representations and warranties of Borrower herein set
forth, as of the Restatement Date, $35,000,000 in principal amount of
Existing Working Capital Advances shall be converted into and shall
thereafter be Term Advances for all purposes of this Agreement. Any
amounts owed (whether or not presently due and payable) by Borrower to
a Working Capital Lender under or in respect of an Existing Working
Capital Advance converted into a Term Advance as provided in this
subsection 2.01(f) shall, as of the Restatement Date, be deemed to be
owed under or in respect of the Term Advance into which such Existing
Working Capital Advance was converted and such amounts owed shall
thereafter be evidenced by the Term Note delivered to such Lender by
Borrower pursuant to subsection 2.01(j). In connection with the
conversion of Existing Working Capital Advances into Term Advances
pursuant to this subsection 2.01(f), Borrower shall not be required to
deliver any notice of prepayment or Notice of Borrowing or to satisfy
any other condition relating to required amounts of prepayments or
borrowings hereunder.
(g) Conversion of Waiver Fee into Term Advances on the
Restatement Date. Notwithstanding anything to the contrary in this
Agreement, subject to the terms and conditions of this Agreement and in
reliance upon the representations and warranties of Borrower herein set
forth, as of the Restatement Date, the Waiver Fee consisting of
$3,199,264.65 in principal amount shall be converted into and shall
thereafter be Term Advances for all purposes of this Agreement. The
principal amount of the Waiver Fee due each Lender which is converted
into Term Advances as provided in the preceding sentence shall be
determined in accordance with each Lender's existing Commitments (as
defined in the Existing Credit Agreement). Each Lender's share of the
Waiver Fee owed by the Borrower in respect of the Existing Advances and
converted into a Term Advance as provided in this subsection 2.01(g)
shall, as of the Restatement Date, be deemed to be owed under or in
respect of the Term Advance into which the Waiver Fee was converted and
such amounts owed shall thereafter be evidenced by the Term Note
delivered to such Lender by Borrower pursuant to subsection 2.01(j). In
connection with the conversion of the Waiver Fee into Term Advances
pursuant to this subsection 2.01(g), Borrower shall not be required to
deliver any notice of prepayment or Notice of Borrowing or to satisfy
any other condition relating to required amounts of prepayments or
borrowings hereunder.
(h) Conversion of Default Interest into Term Advances on the
Restatement Date. Notwithstanding anything to the contrary in this
Agreement, subject to the terms and conditions of this Agreement and in
reliance upon the representations and warranties of Borrower herein set
forth, as of the Restatement Date, the portion of interest on the
Existing Advances calculated at the default rate pursuant to Section
2.07(b) of the Existing Credit Agreement referenced in Section 1 of the
Seventh Amendment consisting of $1,382,327.39 ("DEFAULT INTEREST
PORTION") shall be converted into and shall thereafter be Term Advances
for all purposes of this Agreement. The amount of the Default Interest
Portion due each Lender which is converted into Term Advances as
provided in the preceding sentence shall be determined in accordance
with each Lender's Existing Advances. Each Lender's share of the
Default Interest Portion
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owed by the Borrower in respect of the Existing Advances and converted
into a Term Advance as provided in this subsection 2.01(h) shall, as of
the Restatement Date, be deemed to be owed under or in respect of the
Term Advance into which the Default Interest Portion was converted and
such amounts owed shall thereafter be evidenced by the Term Note
delivered to such Lender by Borrower pursuant to subsection 2.01(j). In
connection with the conversion of the Default Interest Portion into
Term Advances pursuant to this subsection 2.01(h), the Borrower shall
not be required to deliver any notice of prepayment or Notice of
Borrowing or to satisfy any other condition relating to required
amounts of prepayments or borrowings hereunder.
(i) Term Advances. Subject to the terms and conditions of this
Agreement and in reliance upon the representations of Borrower herein
set forth, each Lender hereby severally agrees to maintain its (i)
Existing Term A Advances converted into Term Advances pursuant to
subsection 2.01(a), (ii) Existing Term B Advances converted into Term
Advances pursuant to subsection 2.01(b), (iii) Existing Term C Advances
converted into Term Advances pursuant to subsection 2.01(c), (iv)
Existing Working Capital Advances converted into Term Advances pursuant
to subsection 2.01(f), (v) share of the Waiver Fee converted to Term
Advances pursuant to subsection 2.01(g), and (vi) share of the Default
Interest Portion converted into Term Advances pursuant to subsection
2.01(h), as Term Advances hereunder for the purposes identified in
subsection 2.14.
The amount of the Term Advances of each Lender as of the
Restatement Date is set forth in Schedule I hereto and the aggregate
amount of all Term Advances is $120,606,592.04 as of such date. The
amount of the Term Advances shall be reduced by the amount of all
prepayments thereof made pursuant to subsection 2.06 through the date
of determination. No additional Term Advances may be made under this
Agreement.
(j) Term Notes. Borrower shall execute and deliver to Agent
for the account of each Lender on the Restatement Date a Term Note to
evidence that Lender's Term Advance in the principal amount of that
Lender's Term Advance and with other appropriate insertions. Upon
receipt of all such Term Notes from Borrower on the Restatement Date,
all "Term A Notes" under the Existing Credit Agreement, "Term B Notes"
under the Existing Credit Agreement, "Term C Notes" under the Existing
Credit Agreement, "Term D Notes" under the Existing Credit Agreement,
"Revolving Credit Notes" under the Existing Credit Agreement and
"Working Capital Notes" under the Existing Credit Agreement shall be
marked as "cancelled", returned to the Borrower and deemed superseded
by the Term Notes.
(k) No Swing Line Advances or Letters of Credit Outstanding;
Termination of Existing Commitments. As of the date hereof there are,
and as of the Restatement Date there will be, no Swing Line Advances or
Letters of Credit outstanding (as such terms are defined in the
Existing Credit Agreement). Upon the effectiveness of this Agreement,
no Lender shall have any obligation to make or participate in Swing
Line Advances or to issue or participate in Letters of Credit and all
commitments with respect thereto will be cancelled and terminated.
Without limiting the foregoing, All Term A Commitments, Term B
Commitments, Term C Commitments, Term D Commitments,
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Revolving Credit Commitments, Swing Line Commitments and Letter of
Credit Commitments (as each such term is defined in the Existing Credit
Agreement) outstanding or in effect for any purpose under the Existing
Credit Agreement at the Restatement Date shall terminate as of the
Restatement Date.
SECTION 2.02. Working Capital Advances.
(a) Each Working Capital Lender severally agrees, on the terms
and conditions hereinafter set forth, to make advances (each a "WORKING
CAPITAL ADVANCE") to the Borrower from time to time on any Business Day
during the period from the date hereof until the Termination Date in an
amount for each such Working Capital Advance not to exceed such
Lender's Unused Working Capital Commitment at such time. Each Working
Capital Borrowing shall be in an aggregate amount of $500,000 (or such
amount as may then be available) or an integral multiple of $100,000 in
excess thereof and shall consist of Working Capital Advances made
simultaneously by the Working Capital Lenders ratably according to
their Working Capital Commitments. Within the limits of each Working
Capital Lender's Unused Working Capital Commitment in effect from time
to time, the Borrower may borrow under this Section 2.02(a), prepay
pursuant to Section 2.06(a) and reborrow under this Section 2.02(a).
Notwithstanding anything to the contrary contained in this Section
2.02(a), neither the Agent nor the Working Capital Lenders shall have
any obligation to make any Working Capital Advance in excess of then
existing Working Capital Availability unless such request is made for
such Working Capital Advance to be made from the Accounts Payable
Reserve in accordance with Section 2.02(c).
(b) Each Working Capital Borrowing shall be made on notice,
given not later than 11:00 A.M. (New York City time) on the date of the
proposed Working Capital Borrowing, by the Borrower to the Agent, which
shall give to each Appropriate Lender prompt notice thereof by telex or
telecopier. Each such notice of a Working Capital Borrowing (a "NOTICE
OF BORROWING") shall be in writing, or by telex or telecopier, in
substantially the form of Exhibit B hereto, specifying therein the
requested (i) date of such Working Capital Borrowing, and (ii)
aggregate amount of such Working Capital Borrowing. Each Working
Capital Lender shall, before 11:00 A.M. (New York City time) on the
date of such Working Capital Borrowing, make available for the account
of its Domestic Lending Office to the Agent at the Agent's Account, in
same day funds, such Working Capital Lender's ratable portion of such
Working Capital Borrowing in accordance with the respective Working
Capital Commitments under the Working Capital Facility of such Working
Capital Lender. After the Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article III, the
Agent will make such funds available to the Borrower by crediting the
Borrower's Account.
(c) To the extent any Notice of Borrowing requests that the
Working Capital Lenders make Working Capital Advances from the Accounts
Payable Reserve, the Borrower shall submit to the Agent, together with
the corresponding Notice of Borrowing, a schedule in form and substance
reasonably acceptable to the Agent identifying the Accounts Payable to
be paid with the proceeds of such Working Capital Advance, including
the name of each payee and the amount to be paid to such payee, and
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accompanied by a certification of the Borrower's chief financial
officer that the proceeds of such Working Capital Advance will be used
strictly for the purpose of paying such Accounts Payable.
(d) Each Notice of Borrowing shall be irrevocable and binding
on the Borrower.
(e) Unless the Agent shall have received notice from a Working
Capital Lender prior to the date of any Working Capital Borrowing under
the Working Capital Facility that such Working Capital Lender will not
make available to the Agent such Working Capital Lender's ratable
portion of such Working Capital Borrowing, the Agent may assume that
such Lender has made such portion available to the Agent on the date of
such Working Capital Borrowing in accordance with subsection (b) of
this Section 2.02 and the Agent may, in reliance upon such assumption,
make available to the Borrower on such date a corresponding amount. If
and to the extent that such Working Capital Lender shall not have so
made such ratable portion available to the Agent, such Working Capital
Lender and the Borrower severally agree to repay or pay to the Agent
forthwith on demand such corresponding amount and to pay interest
thereon, for each day from the date such amount is made available to
the Borrower until the date such amount is repaid or paid to the Agent,
at (i) in the case of the Borrower, the interest rate applicable at
such time under Section 2.07 to Advances comprising such Working
Capital Borrowing and (ii) in the case of such Working Capital Lender,
the Federal Funds Rate. If such Working Capital Lender shall pay to the
Agent such corresponding amount, such amount so paid in respect of
principal shall constitute such Working Capital Lender's Advance as
part of such Working Capital Borrowing for all purposes.
(f) The failure of any Working Capital Lender to make such
Working Capital Advance to be made by it as part of any Working Capital
Borrowing shall not relieve any other Working Capital Lender of its
obligation, if any, hereunder to make its Working Capital Advance on
the date of such Working Capital Borrowing, but no Lender shall be
responsible for the failure of any other Lender to make such Working
Capital Advance to be made by such other Lender on the date of any
Working Capital Borrowing.
SECTION 2.03. [Intentionally Omitted].
SECTION 2.04. Repayment of Advances and Deferred Interest Notes.
(a) Term Advances. The Borrower shall repay to the Agent for
the ratable account of the Term Lenders (in accordance with their
applicable Pro Rata Share of the Term Facility), (i) the aggregate
outstanding principal amount of the Term Advances on the earlier of (y)
the Final Maturity Date, or (z) the Termination Date, and (ii) an
aggregate principal amount of the Term Advances in accordance with
Section 2.06.
(b) Working Capital Advances. The Borrower shall repay to the
Agent for the ratable account of the Working Capital Lenders (in
accordance with their applicable Pro Rata Share of the Working Capital
Facility) (i) the aggregate outstanding principal
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amount of the Working Capital Advances then outstanding on the earlier
of (y) the Final Maturity Date and (z) the Termination Date, and (ii)
an aggregate principal amount of the Working Capital Advances in
accordance with Section 2.06.
(c) Deferred Interest Notes. The Borrower shall repay to the
Agent for the ratable account of all Lenders (in accordance with their
applicable Pro Rata Share of the Facilities), (i) the aggregate
outstanding principal amount of the Deferred Interest Notes on the
earlier of (y) the Final Maturity Date, and (z) the Termination Date,
and (ii) an aggregate principal amount of the Deferred Interest Notes
in accordance with Section 2.06.
SECTION 2.05. Termination or Reduction of the Working Capital
Commitments. The Borrower may, upon at least three Business Days' written notice
to the Agent, terminate in whole or reduce in part the Unused Working Capital
Commitments; provided, however, that each partial reduction of the Working
Capital Facility (i) shall be in an aggregate amount of $1,000,000 or an
integral multiple of $500,000 in excess thereof and (ii) shall be made ratably
among the Working Capital Lenders in accordance with their Working Capital
Commitments.
SECTION 2.06. Prepayments. (a) Optional. The Borrower may prepay,
upon at least one Business Day's written notice to the Agent (received not later
than 11:00 A.M. (New York City time) stating the proposed date and aggregate
principal amount of the prepayment, and if such notice is given the Borrower
shall, prepay (i) each Deferred Interest Note then outstanding in whole or in
part, or (ii) if no Deferred Interest Notes are then outstanding, the
outstanding aggregate principal amount of the Advances comprising either Term
Advances or Working Capital Advances in whole or ratably in part, together with
accrued interest to the date of such prepayment on the aggregate principal
amount prepaid; provided, however, that each partial prepayment of Term Advances
or Working Capital Advances shall be in an aggregate principal amount of
$500,000 or an integral multiple of $250,000 in excess thereof. Each such
prepayment which is made with respect to any Deferred Interest Notes, Working
Capital Advances or Term Advances shall be applied ratably to the Deferred
Interest Notes, Working Capital Advances or Term Advances, as applicable.
(b) Mandatory. (i) Commencing with the Fiscal Quarter ending
June 30, 2001, the Borrower shall, no later than the 5th day following the date
on which it delivers the certification referred to in Section 5.03(b)(ii) (but
in any event within 50 days after the end of each Fiscal Quarter), prepay an
amount equal to 100% of the amount of Excess Cash Flow for such Fiscal Quarter;
provided, however, that the required amount of such prepayment shall be reduced
to the extent necessary to ensure that after giving effect to such prepayment,
the aggregate of the sum of (y) the aggregate Unused Working Capital
Commitments, and (z) cash or Cash Equivalents of the Borrower and its
Subsidiaries on hand or deposit as of the date of such prepayment shall not be
less than $5,000,000. Each such prepayment shall be applied as follows:
first, ratably to the Deferred Interest Notes then
outstanding;
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second, to the extent no Deferred Interest Notes are then
outstanding, ratably to the Term Lenders (in accordance with their
applicable Pro Rata Share of the Term Facility); and
third, to the extent that no Term Advances remain outstanding,
to reduce the Working Capital Advances (in accordance with their
applicable Pro Rata Share of the Working Capital Facility).
(ii) The Borrower shall, on the date of receipt of the Net
Cash Proceeds by the Borrower or any of its Subsidiaries from (A) the sale,
lease, transfer or other disposition of any assets of the Borrower or any of its
Subsidiaries (other than any sale, lease, transfer or other disposition of
assets pursuant to Section 5.02(f)(i)), (B) the incurrence or issuance by the
Borrower or any of its Subsidiaries of any Debt (other than Debt incurred or
issued pursuant to Section 5.02(b)), (C) the sale or issuance by the Borrower
(other than under the Management Stock Option Plan) or any of its Subsidiaries
of any capital stock or other ownership or profit interest (including, without
limitation, any capital contribution), any securities convertible into or
exchangeable for capital stock or other ownership or profit interest or any
warrants, rights or options to acquire capital stock or other ownership or
profit interest, (D) any Extraordinary Receipt received by or paid to or for the
account of the Borrower or any of its Subsidiaries and not otherwise included in
clause (A), (B) or (C) above, prepay an amount equal to the amount of such Net
Cash Proceeds. Each such prepayment shall be applied as follows:
first, ratably to the Deferred Interest Notes then
outstanding;
second, to the extent no Deferred Interest Notes are then
outstanding, ratably to the Term Lenders (in accordance with their
applicable Pro Rata Share of the Term Facility); and
third, to the extent that no Term Advances remain outstanding,
to reduce the Working Capital Advances (in accordance with their
applicable Pro Rata Share of the Working Capital Facility).
(iii) The Borrower shall, on the last Business Day of each
week, commencing on April 20, 2001, prepay an aggregate principal amount of the
Working Capital Advances equal to the amount of all cash and Cash Equivalents of
the Borrower and its Subsidiaries on hand or deposit as of 1:00 p.m. (New York
City time) on such day in excess of an amount equal to the sum of (A) all
outstanding disbursements pending clearance, and (B) $1,000,000.
(iv) The Borrower shall, on each Business Day, prepay an
aggregate principal amount of the Working Capital Advances equal to the amount
by which (A) the sum of the aggregate principal amount of the Working Capital
Advances then outstanding exceeds (B) the lesser of (1) the Working Capital
Facility and (2) the Loan Value of Eligible Receivables on such Business Day (as
determined based on the most recent Borrowing Base Certificate delivered to the
Agent hereunder). Such prepayments shall be applied to prepay
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Working Capital Advances ratably to the Working Capital Lenders (in accordance
with their applicable Pro Rata Share of the Working Capital Facility).
(v) The Borrower shall, on each date on which it exercises
any right to defer the payment of monthly interest pursuant to Sections 2.07(c)
and 3.01(b), pay to the Agent, for the benefit of the Working Capital Lenders,
an amount equal to the amount of monthly interest deferred, which payment shall
be applied to reduce the Working Capital Advances then outstanding. Any payment
made to the Agent, for the benefit of the Working Capital Lenders, pursuant to
this Section 2.06(b)(v), shall be used to establish the Accounts Payable
Reserve, which Accounts Payable Reserve shall be available to the Borrower to
pay Accounts Payable in accordance with Section 2.02(c).
(vi) The Borrower shall, upon the payment of all or any
portion of the principal amount of the TARP Earnout, prepay an amount of the
Term Loans equal to the sum of (a) the aggregate principal amount of the Term
Loans, multiplied by (b) a fraction, (i) the numerator of which is the amount of
the principal payment made by the Borrower in respect of the TARP Earnout, and
(ii) the denominator of which is the aggregate principal amount of the TARP
Earnout prior to giving effect to such payment, provided however, that the
Borrower shall have no prepayment obligation pursuant to this Section
2.06(b)(vi) to the extent the payment made in respect of the TARP Earnout is
equal to or less than $50,000.00 in any calendar month. Each such prepayment
required by this Section 2.06(b)(vi) shall be applied as follows:
first, ratably to the Deferred Interest Notes then
outstanding;
second, to the extent no Deferred Interest Notes are then
outstanding, ratably to the Term Lenders (in accordance with their
applicable Pro Rata Share of the Term Facility); and
third, to the extent that no Term Advances remain outstanding,
to reduce the Working Capital Advances (in accordance with their
applicable Pro Rata Share of the Working Capital Facility).
(vii) [Intentionally omitted.]
SECTION 2.07. Interest. (a) Scheduled Interest. Subject to the terms
of subsection (c) of this Section 2.07, the Borrower shall pay interest on the
unpaid principal amount of Advances owing to each Lender, in each case from the
Restatement Date until such principal amount shall be paid in full, at a rate
per annum equal at all times to the sum of (A) the Base Rate in effect from time
to time plus (B) the Applicable Margin in effect from time to time, payable in
arrears monthly on the last Business Day of each month after the Restatement
Date, on the date of any prepayment thereof to the extent required under Section
2.06, on the Termination Date, and on the Final Maturity Date.
(b) Default Interest. Upon the occurrence and during the
continuance of any Event of Default the Agent may, and upon the request of the
Required Lenders shall, require that the Borrower pay interest on (i) the unpaid
principal amount of each Advance owing to each Lender, payable in arrears on the
dates referred to in clause (a) above and on demand, at a rate
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per annum equal at all times to 2% per annum above the rate per annum required
to be paid on such Advance pursuant to clause (a) above, and (ii) to the fullest
extent permitted by law, the amount of any interest, fee or other amount payable
under the Loan Documents that is not paid when due, from the date such amount
shall be due until such amount shall be paid in full, payable in arrears on the
date such amount shall be paid in full and on demand, at a rate per annum equal
at all times to 2% per annum above the rate per annum required to be paid, in
the case of interest, on each Advance on which such interest has accrued
pursuant to clause (a)(i) or (a)(ii) above; provided, however, that following
acceleration of the Advances pursuant to Section 6.01, interest shall accrue and
be payable at the rate required by this Section 2.07(b), whether or not
requested by the Agent or the Required Lenders. In addition, following a final
judgment with respect to any Obligation of the Loan Parties under the Loan
Documents, interest shall accrue at the higher of the statutory judgment rate or
the rate specified in the preceding sentence, payable on demand.
(c) Deferred Interest. From and after the Restatement Date
through and including December 31, 2001, and so long as no Event of Default has
occurred and is continuing each monthly interest payment due and owing pursuant
to Section 2.07(a) shall consist of (i) a cash portion of such interest payment
equal to 75% of the total interest for such month pursuant to Section 2.07(a)
and (ii) a portion consisting of deferred interest equal to 25% of the total
interest for such month to be evidenced by a deferred interest promissory note,
substantially in the form of Exhibit O annexed hereto (each a "DEFERRED INTEREST
NOTE"; collectively, the "DEFERRED INTEREST NOTES"), provided, however, that the
Borrower may elect to pay all or any portion in excess of 75% of the interest on
the Advances in cash in any month. The amount of each Deferred Interest Note
shall be treated as an Advance and interest therein shall be payable in
accordance with this Section 2.07 (including, if applicable, subsection (c)).
Each Deferred Interest Note shall be due and payable on the earlier of (i) the
Final Maturity Date or (ii) the Termination Date. From and after (a) January 1,
2002, or (b) the occurrence and continuation of any Event of Default, the total
interest for any month pursuant to Section 2.07(a) (after giving effect to
Section 2.07(b), if applicable) shall be payable in full in cash.
(d) Existing Eurodollar Rate Advances. Anything in this
Agreement to the contrary notwithstanding, each Eurodollar Rate Advance (as
defined in the Existing Credit Agreement) outstanding under the Existing Credit
Agreement as of the Restatement Date, shall continue to bear interest as a Term
Advance hereunder from and after the Restatement Date through and including the
last date of the Interest Period (as defined in the Existing Credit Agreement)
applicable to such Eurodollar Rate Advance, at a rate per annum equal to the sum
of (a) the Eurodollar Rate (as defined in the Existing Credit Agreement)
applicable to such Eurodollar Rate Advance plus (b) 4.50%, such interest to be
payable on the dates specified in Section 2.07(a) and on the expiration date of
the Interest Period applicable thereto; provided that upon the expiration of
each such Interest Period, each such Eurodollar Rate Advance shall automatically
be converted into a Term Advance bearing interest at the Base Rate as otherwise
provided hereunder, and (ii) for purposes of calculating any broken funding,
increased costs or other special charges with respect to such Eurodollar Rate
Advances, the applicable terms and conditions of the Existing Credit Agreement
shall continue to apply to such Eurodollar Rate Advances for as long as they are
outstanding as Eurodollar Rate Advances hereunder.
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SECTION 2.08. Fees. (a) Commitment Fee. The Borrower shall pay to
the Agent for the account of the Lenders a commitment fee, from the Restatement
Date in the case of each Lender and from the effective date specified in the
Assignment and Acceptance pursuant to which it became a Lender in the case of
each other Lender until the Termination Date, payable in arrears quarterly on
March 31, June 30, September 30 and December 31, commencing June 30, 2001, and
on the Termination Date, at the rate of 0.25% per annum on the average daily
unused portion of each Working Capital Lender's Working Capital Commitment.
(b) Agent's Fees. The Borrower shall pay to the Agent for its
own account an annual agency fee in the amount of .25% per annum of the
aggregate amount of the Facilities which fee shall be determined as of the
Restatement Date and as of each one-year anniversary thereof, and shall be
earned in full on each such date of determination, and which fee shall be
payable on the earlier of (i) the Final Maturity Date and (ii) the Termination
Date.
(c) Restructuring Fee. The Borrower shall pay to the Agent for
the ratable account of the Lenders a restructuring fee equal to 15% of the sum
of the Term Advances and the Working Capital Commitments as of the Restatement
Date, which such fee shall be earned in full on the Restatement Date and shall
be due and payable on the earlier of (i) Termination Date and (ii) the Final
Maturity Date (the "RESTRUCTURING FEE"); provided, that in the event the
Obligations of the Loan Parties under the Loan Documents are repaid in full in
cash on or prior to the dates set forth below, the Restructuring Fee shall be
reduced to the corresponding percentage set forth below:
DATE RESTRUCTURING FEE
June 30, 2001 5.0%
From and after July 1, 10.0%
2001 and on or before
September 30, 2001
From and after October 1, 12.5%
2001 and on or before
December 31, 2001
From and after January 1, 15.0%
2002
SECTION 2.09. [Intentionally Omitted].
SECTION 2.10. Increased Costs, Etc. (a) If, due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any central
bank, or other governmental authority (whether or not having the force of law),
there shall be any increase in the cost to any Lender
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Party of agreeing to make or of making, funding or maintaining any Advance
(excluding, for purposes of this Section 2.10, any such increased costs
resulting from (x) Taxes or Other Taxes (as to which Section 2.12 shall govern)
and (y) changes in the basis of taxation of overall net income or overall gross
income by the United States or by the foreign jurisdiction or state under the
laws of which such Lender Party is organized or has its Domestic Lending Office
or any political subdivision thereof), then the Borrower shall from time to
time, upon demand by such Lender Party (with a copy of such demand to the
Agent), pay to the Agent for the account of such Lender Party additional amounts
sufficient to compensate such Lender Party for such increased cost, provided,
however, that a Lender Party claiming additional amounts under this Section
2.10(a) agrees to use reasonable efforts (consistent with its internal policy
and legal and regulatory restrictions) to designate a different Domestic Lending
Office if the making of such a designation would avoid the need for, or reduce
the amount of, such increased cost that may thereafter accrue and would not, in
the reasonable judgment of such Lender Party, be otherwise disadvantageous to
such Lender Party. A certificate as to the amount of such increased cost,
submitted to the Borrower by such Lender Party, shall be conclusive and binding
for all purposes, absent manifest error.
(b) If any Lender Party determines that either (i) the
introduction of any change on the interpretation of any law or regulation or
(ii) compliance with any law, or regulation or any guideline or request from any
central bank or other governmental authority (whether or not having the force of
law) affects or would affect the amount of capital required or expected to be
maintained by such Lender Party or any corporation controlling such Lender Party
and that the amount of such capital is increased by or based upon the existence
of such Lender Party's commitment to lend, then, upon demand by such Lender
Party (with a copy of such demand to the Agent), the Borrower shall pay to the
Agent for the account of such Lender Party, from time to time as specified by
such Lender Party, additional amounts sufficient to compensate such Lender
Party, in the light of such circumstances, to the extent that such Lender Party
reasonably determines such increase in capital to be allocable to the existence
of such Lender Party's commitment to lend hereunder. A certificate as to such
amounts submitted to the Borrower by such Lender Party shall be conclusive and
binding for all purposes, absent manifest error.
(c) [Intentionally omitted.]
(d) [Intentionally omitted.]
SECTION 2.11. Payments and Computations. (a) The Borrower shall make
each payment hereunder, irrespective of any right of counterclaim or set-off,
not later than 11:00 A.M. (New York City time) on the day when due in U.S.
dollars to the Agent at the Agent's Account in same day funds, with payments
being received by the Agent after such time being deemed to have been received
on the next succeeding Business Day. The Agent will promptly thereafter cause
like funds to be distributed (i) if such payment by the Borrower is in respect
of principal, interest, commitment fees or any other Obligation then payable
hereunder to more than one Lender Party, to such Lender Parties for the account
of their respective Domestic Lending Offices ratably in accordance with the
amounts of such respective Obligations then payable to such Lender Parties and
(ii) if such payment by the Borrower is in respect of any Obligation then
payable hereunder to one Lender Party, to such Lender Party for the account of
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its Domestic Lending Office, in each case to be applied in accordance with the
terms of this Agreement. Upon its acceptance of an Assignment and Acceptance and
recording of the information contained therein in the Register pursuant to
Section 8.07(d), from and after the effective date of such Assignment and
Acceptance, the Agent shall make all payments hereunder in respect of the
interest assigned thereby to the Lender Party assignee thereunder, and the
parties to such Assignment and Acceptance shall make all appropriate adjustments
in such payments for periods prior to such effective date directly between
themselves.
(b) If the Agent receives funds for application to the
Obligations under the Loan Documents under circumstances for which the Loan
Documents do not specify the Advances or the Facility to which, or the manner in
which, such funds are to be applied, the Agent may, but shall not be obligated
to, elect to distribute such funds to each Lender Party ratably in accordance
with such Lender Party's proportionate share of the principal amount of all
outstanding Advances, or in repayment or prepayment of such of the outstanding
Advances or other Obligations owed to such Lender Party, as the Agent shall
direct.
(c) The Borrower hereby authorizes each Lender Party, if and
to the extent payment owed to such Lender Party is not made when due hereunder,
to charge from time to time against any or all of the Borrower's accounts with
such Lender Party any amount so due.
(d) All computations of interest and fees shall be made by the
Agent on the basis of a year of 360 days, in each case for the actual number of
days (including the first day but excluding the last day) occurring in the
period for which such interest or fees are payable. Each determination by the
Agent of an interest rate or fee hereunder shall be conclusive and binding for
all purposes, absent manifest error.
(e) Whenever any payment hereunder shall be stated to be due
on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or commitment fee, as the
case may be; provided, however, that, if such extension would cause any payment
to be made in the next following calendar month, such payment shall be made on
the next preceding Business Day and such adjustment of time shall in such case
be reflected in the computation of payment of interest or commitment fee, as the
case may be.
(f) Unless the Agent shall have received notice from the
Borrower prior to the date on which any payment is due to any Lender Party
hereunder that the Borrower will not make such payment in full, the Agent may
assume that the Borrower has made such payment in full to the Agent on such date
and the Agent may, in reliance upon such assumption, cause to be distributed to
each such Lender Party on such due date an amount equal to the amount then due
such Lender Party. If and to the extent the Borrower shall not have so made such
payment in full to the Agent, each such Lender Party shall repay to the Agent
forthwith on demand such amount distributed to such Lender Party together with
interest thereon, for each day from the date such amount is distributed to such
Lender Party until the date such Lender Party repays such amount to the Agent,
at the Federal Funds Rate.
SECTION 2.12. Taxes. (a) Any and all payments by the Borrower
hereunder or under the Notes shall be made, in accordance with Section 2.11,
free and clear of
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and without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender Party and the Agent, taxes that are
imposed on its overall net income by the United States and taxes that are
imposed on its overall net income (and franchise taxes imposed in lieu thereof)
by the state or foreign jurisdiction under the laws of which such Lender Party
or the Agent (as the case may be) is organized or any political subdivision
thereof and, in the case of each Lender Party, taxes that are imposed on its
overall net income (and franchise taxes in lieu thereof) by the state or foreign
jurisdiction of such Lender Party's Domestic Lending Office or any political
subdivision thereof (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities in respect of payments hereunder or under
the Notes being hereinafter referred to as "TAXES"). If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder to any Lender Party or the Agent, (i) the sum payable by the Borrower
shall be increased as may be necessary so that after the Borrower and the Agent
have made all required deductions (including deductions applicable to additional
sums payable under this Section 2.12), such Lender Party or the Agent, as the
case may be, receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower shall make all such deductions and
(iii) the Borrower shall pay the full amount deducted to the relevant taxation
authority or other governmental authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any present or future
stamp, documentary, excise, property or similar taxes, charges or levies that
arise from any payment made hereunder or under the Notes or from the execution,
delivery or registration of performance under, or otherwise with respect to,
this Agreement or the Notes (hereinafter referred to as "OTHER TAXES").
(c) The Borrower shall indemnify each Lender Party and the
Agent for and hold it harmless against the full amount of Taxes and Other Taxes,
and for the full amount of taxes of any kind imposed by any jurisdiction on
amounts payable under this Section 2.12, imposed on or paid by such Lender Party
or the Agent (as the case may be) and any liability (including penalties,
additions to tax, interest and expenses) arising therefrom or with respect
thereto. This indemnification shall be made within 30 days from the date such
Lender Party or the Agent (as the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the
Borrower shall furnish to the Agent, at its address referred to in Section 8.02,
the original or a certified copy of a receipt evidencing such payment. In the
case of any payment hereunder or under the Notes by or on behalf of the Borrower
through an account or branch outside the United States or on behalf of the
Borrower by a payor that is not a United States person, if the Borrower
determines that no Taxes are payable in respect thereof, the Borrower shall
furnish, or shall cause such payor to furnish, to the Agent, at such address, an
opinion of counsel acceptable to the Agent stating that such payment is exempt
from Taxes. For purposes of subsections (d) and (e) of this Section 2.12, the
terms "United States" and "United States person" shall have the meanings
specified in Section 7701 of the Internal Revenue Code.
(e) Each Lender Party organized under the laws of a
jurisdiction outside the United States shall, on or prior to the date of its
execution and delivery of this Agreement in
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the case of each Lender and on the date of the Assignment and Acceptance
pursuant to which it becomes a Lender Party in the case of each other Lender
Party, and from time to time thereafter if requested in writing by the Borrower
or the Agent (but only so long thereafter as such Lender Party remains lawfully
able to do so), provide the Agent and the Borrower, with two original Internal
Revenue Service Forms 1001 or 4224 or (in the case of a Lender Party that has
certified in writing to the Agent that it is not a "bank" as defined in Section
881(c)(3)(A) of the Internal Revenue Code) Form W-8 (and, if such Lender Party
delivers a Form W-8, a certificate representing that such Lender Party is not a
"bank" for purposes of Section 881(c) of the Internal Revenue Code, is not a
10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the
Internal Revenue Code) of the Borrower and is not a controlled foreign
corporation related to the Borrower (within the meaning of Section 864(d)(4) of
the Internal Revenue Code)), as appropriate, or any successor or other form
prescribed by the Internal Revenue Service, certifying that such Lender Party is
exempt from or entitled to a reduced rate of United States withholding tax on
payments pursuant to this Agreement or the Notes or, in the case of a Lender
Party providing a Form W-8, certifying that such Lender Party is a foreign
corporation, partnership, estate or trust. If the forms provided by a Lender
Party at the time such Lender Party first becomes a party to this Agreement
indicate a United States interest withholding tax rate in excess of zero,
withholding tax at such rate shall be considered excluded from Taxes unless and
until such Lender Party provides the appropriate forms certifying that a lesser
rate applies, whereupon withholding tax at such lesser rate only shall be
considered excluded from Taxes for periods governed by such forms; provided,
however, that if at the effective date of the Assignment and Acceptance pursuant
to which a Lender Party becomes a party to this Agreement, the Lender Party
assignor was entitled to payments under subsection (a) of this Section 2.12 in
respect of United States withholding tax with respect to interest paid at such
date, then, to such extent, the term Taxes shall include (in addition to
withholding taxes that may be imposed in the future or other amounts otherwise
includable in Taxes) United States withholding tax, if any applicable with
respect to the Lender Party, assigned on such date. If any form or document
referred to in this subsection (e) requires the disclosure of information, other
than information necessary to compute the tax payable and information required
on the date hereof by Internal Revenue Service Form 1001, 4224 or W-8 (or the
related certificate described above), that the Lender Party reasonably considers
to be confidential, the Lender Party shall give notice thereof to the Borrower
and shall not be obligated to include in such form or document such confidential
information.
(f) For any period with respect to which a Lender Party has failed to provide
the Borrower with the appropriate form described in subsection (e) above (other
than if such failure is due to a change in law occurring after the date on which
a form originally was required to be provided or if such form otherwise is not
required under subsection (e) above), such Lender Party shall not be entitled to
indemnification under subsection (a) or (c) of this Section 2.12 with respect to
Taxes imposed by the United States by reason of such failure; provided, however,
that should a Lender Party become subject to Taxes because of its failure to
deliver a form required hereunder, the Borrower shall take such steps as such
Lender Party, shall reasonably request to assist such Lender Party to recover
such Taxes.
SECTION 2.13. Sharing of Payments, Etc. (a) If any Lender Party
shall obtain at any time any payment (whether voluntary, involuntary, through
the exercise of any
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right of set-off, or otherwise, other than as a result of an assignment pursuant
to Section 8.07) (a) on account of Obligations due and payable to such Lender
Party hereunder and under the Notes at such time in excess of its ratable share
(according to the proportion of (i) the amount of such Obligations due and
payable to such Lender Party at such time to (ii) the aggregate amount of the
Obligations due and payable to all Lender Parties hereunder and under the Notes
at such time) of payments on account of the Obligations due and payable to all
Lender Parties hereunder and under the Notes at such time obtained by all the
Lender Parties at such time or (b) on account of Obligations owing (but not due
and payable) to such Lender Party hereunder and under the Notes at such time in
excess of its ratable share (according to the proportion of (i) the amount of
such Obligations owing (but not due and payable) to such Lender Party at such
time to (ii) the aggregate amount of the Obligations owing (but not due and
payable) to all Lender Parties hereunder and under the Notes at such time) of
payments on account of the Obligations owing (but not due and payable) to all
Lender Parties hereunder and under the Notes at such time obtained by all of the
Lender Parties at such time, such Lender Party shall forthwith purchase from the
other Lender Parties such interests or participating interests in the
Obligations due and payable or owing to them, as the case may be, as shall be
necessary to cause such purchasing Lender Party to share the excess payment
ratably with each of them; provided, however, that if all or any portion of such
excess payment is thereafter recovered from such purchasing Lender Party, such
purchase from each other Lender Party shall be rescinded and such other Lender
Party shall repay to the purchasing Lender Party the purchase price to the
extent of such Lender Party's ratable share (according to the proportion of (i)
the purchase price paid to such Lender Party, to (ii) the aggregate purchase
price paid to all Lender Parties) of such recovery together with an amount equal
to such Lender Party's ratable share (according to the proportion of (i) the
amount of such other Lender Party's required repayment to (ii) the total amount
so recovered from the purchasing Lender Party) of any interest or other amount
paid or payable by the purchasing Lender Party in respect of the total amount so
recovered. The Borrower agrees that any Lender Party so purchasing an interest
or participating interest from another Lender Party pursuant to this Section
2.13 may, to the fullest extent permitted by law, exercise all its rights of
payment (including the right of set-off) with respect to such interest or
participating interest, as the case may be, as fully as if such Lender Party
were the direct creditor of the Borrower in the amount of such interest or
participating interest, as the case may be.
(b) As of the Restatement Date, each Lender's Pro Rata Share
of the Facilities is as set forth on Schedule IA. As of the Termination Date,
each Lender shall forthwith purchase from, or sell to, such other Lenders such
interests or participating interests in the Facilities, or use any other
mechanism, in each case in accordance with Section 8.07, such that (i) the
aggregate principal amount of such Lender's Advances outstanding under the
Facilities plus (ii) the amount of participations purchased from other Lenders
by such Lender pursuant to this Section 2.13(b) minus (iii) the amount of
participations purchased from such Lender by other Lenders pursuant to this
Section 2.13(b) is identical to such Lender's Pro Rata Share of the Facilities
as of the Restatement Date (as adjusted for assignments pursuant to Section
8.07) times the aggregate outstanding principal amount of all Advances
outstanding under the Facilities on the Termination Date. On or prior to the
Termination Date, the Agent shall send the Lenders a schedule indicating the
amount of participations that must be purchased or sold, as the case may be, by
each Lender pursuant to this Section 2.13(b). Each Lender that is required to
purchase a participation shall, on the first Business Day after receiving the
schedule referred to in the
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previous sentence, pay to the Agent an amount equal to the amount of
participations required to be purchased by such Lender, and the Agent shall
immediately pay to each Lender that is required to sell participations an amount
equal to the amount of participations required to be sold by such Lender
pursuant to this Section 2.13(b).
SECTION 2.14. Use of Proceeds. The proceeds of the Advances shall be
available (and the Borrower agrees that it shall use such proceeds) solely to
provide working capital for the Borrower and its wholly-owned U.S. Subsidiaries
and Canadian Subsidiaries and for general corporate purposes permitted by this
Agreement, provided, however, that Working Capital Advances in accordance with
Section 2.02(c) constituting a release of all or any portion of the Accounts
Payable Reserve shall only be used for the payment of Accounts Payable.
SECTION 2.15. Evidence of Debt. (a) Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Lender resulting from each Advance owing to
such Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder. The Borrower agrees
that upon notice by any Lender Party to the Borrower (with a copy of such notice
to the Agent) to the effect that a Note is required or appropriate in order for
such Lender to evidence (whether for purposes of pledge, enforcement or
otherwise) the Advances owing to or to be made by such Lender Party, the
Borrower shall promptly execute and deliver to such Lender a Term Note or a
Working Capital Note, as applicable, payable to the order of such Lender Party,
in a principal amount equal to the Term Advance Exposure or the Working Capital
Commitment, respectively, of such Lender Party. All references to Notes in the
Loan Documents shall mean Notes, if any, to the extent issued hereunder.
(b) The Register maintained by the Agent pursuant to Section
8.07(d) shall include a control account, and a subsidiary account for each
Lender, in which accounts (taken together) shall be recorded (i) the date and
amount of each Advance made hereunder, (ii) the terms of each Assignment and
Acceptance delivered to and accepted by it, (iii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender Party hereunder, and (iv) the amount of any sum received by the Agent
from the Borrower hereunder and each Lender Party's share thereof.
(c) Entries made in good faith by the Agent in the Register
pursuant to subsection (b) above, and by each Lender Party in its account or
accounts pursuant to subsection (a) above, shall be prima facie evidence of the
amount of principal and interest due and payable or to become due and payable
from the Borrower to, in the case of the Register each Lender Party and, in the
case of such account or accounts such Lender Party, under this Agreement, absent
manifest error; provided, however, that the failure of the Agent or such Lender
Party to make an entry, or any finding that an entry is incorrect, in the
Register or such account or accounts shall not limit or otherwise affect the
obligations of the Borrower under this Agreement.
(d) References herein to Notes shall mean and be references to
the Term Notes and the Working Capital Notes, unless otherwise specifically
indicated, in each case to the extent issued hereunder.
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SECTION 2.16. Maximum Lawful Rate. Anything in this Agreement, the
Notes or the other Loan Documents to the contrary notwithstanding, in no event
shall the rate or amount of interest payable by Borrower in respect of the
Obligations exceed the maximum rate or amount of interest that may be charged or
collected under applicable law (including, without limitation, applicable law
limiting the rate or amount of interest that may be charged or collected without
penalty or other legal sanction, whether civil or criminal, against the payee
thereof). For purposes of this Section 2.16, "interest" shall be defined to
include interest as defined pursuant to or for the purpose of such applicable
law; provided that to the extent permitted by applicable law, Agents and Lenders
may amortize, prorate, allocate and spread such interest throughout the term of
the Obligations until payment in full so that the rate or amount of such
interest does not exceed the maximum amount allowed by such applicable law.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Closing. The obligation of
each Lender to continue any Advance or make any Working Capital Advance on the
Restatement Date is subject to the satisfaction of the following conditions
precedent before or concurrently with the Restatement Date:
(a) The Agent shall have received on or before the Restatement
Date the following, each dated as of the Restatement Date (unless
otherwise specified), in form and substance satisfactory to the Agent
(unless otherwise specified) and (except for any Notes) in sufficient
copies for each Lender Party:
(i) (A) Original counterparts to this Agreement executed by
each Loan Party, (B) Notes payable to the order of the Lenders to the
extent requested by any Lender pursuant to Section 2.15, and (C)
Deferred Interest Notes payable to the order of each Lender to the
extent required pursuant to Section 2.07(c) or Section 3.01(b).
(ii) A Borrowing Base Certificate.
(iii) The Acknowledgment and Consent executed by the Borrower
and each other Loan Party that is a U.S. Subsidiary of the Borrower, in
substantially the form of Exhibit N, together with:
(A) certificates representing the Pledged Interests, to the
extent not previously delivered to the Agent in connection with the
Existing Credit Agreement, accompanied by undated stock powers
executed in blank and instruments evidencing the Pledged Debt, to
the extent not previously delivered to the Agent in connection with
the Existing Credit Agreement, indorsed in blank,
(B) financing statements, to be duly filed on the Restatement
Date under the Uniform Commercial Code of the States of all
jurisdictions that the Agent may deem necessary or desirable in
order to perfect and protect the Liens created under the Collateral
Documents, covering the Collateral described in the
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U.S. Security Agreement (taking into account all financing
statements previously filed in connection with the Existing Credit
Agreement),
(C) completed requests for information, dated on or before the
date of the Restatement Date, listing all effective financing
statements filed in the jurisdictions referred to in clause (B)
above that name any Loan Party or any of its Subsidiaries as debtor,
together with copies of such other financing statements,
(D) evidence of the completion of all other recordings and
filings of or with respect to the U.S. Security Agreement that the
Agent may deem necessary or desirable in order to perfect and
protect the Liens created thereby,
(E) evidence of the insurance required by the terms of the
U.S. Security Agreement,
(F) copies of the Assigned Agreements, if any, referred to in
the U.S. Security Agreement, together with a consent to such
assignment, in substantially the form of Exhibit B to the U.S.
Security Agreement, duly executed by each party to such Assigned
Agreements other than the Loan Parties,
(G) executed termination statements (Form UCC-3 or a
comparable form), in proper form to be duly filed on the date of the
Restatement Date under the Uniform Commercial Code of all
jurisdictions that the Agent may deem desirable in order to
terminate or amend existing Liens on the Collateral described in the
U.S. Security Agreement including, without limitation, UCC-3
termination statements regarding the following UCC-1 financing
statements: (1) UCC-1 Financing Statement No. AP0041517 filed on
April 17, 1998 with the Ohio Secretary of State naming the Borrower
as the debtor and Mellon Bank, N.A. as secured party, and (2) XXX-0
Xxxxxxxxx Xxxxxxxxx Xx. 000000 filed on April 20, 1998 with
Xxxxxxxxxx County, Pennsylvania naming the Borrower as debtor and
Mellon Bank, N.A. as secured party,
(H) the Blocked Account Letters referred to in the U.S.
Security Agreement, duly executed by each Blocked Account Bank
listed on Schedule 3.01(a)(iii)(H) in form and substance
satisfactory to the Agent,
(I) the Securities Account Control Agreement, if any, referred
to in the U.S. Security Agreement, duly executed by each securities
intermediary referred to in such Security Agreement, and
(J) evidence that all other action that the Agent may deem
necessary or desirable in order to perfect and protect the Liens and
security interests created under the U.S. Security Agreement has
been taken.
(iv) an amendment to the Canadian Guaranty duly executed by
each Guarantor listed on Schedule 3.01(a)(iv) that is a Canadian
Subsidiary of the Borrower, in each case, in form and substance
satisfactory to the Agent.
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(v) An amendment to the Canadian Security Agreement, in form
and substance satisfactory to the Agent, duly executed by each Loan
Party that is a Canadian Subsidiary of the Borrower, together with
evidence that all other action that the Agent may deem necessary or
desirable in order to perfect and protect the Liens and security
interests created under such Canadian Security Agreement has been
taken.
(vi) An amendment to each Debenture, in form and substance
satisfactory to the Agent, duly executed by each Loan Party that is a
Canadian Subsidiary of the Borrower, together with evidence that all
other action that the Agent may deem necessary or desirable in order to
perfect and protect the Liens and security interests created under such
Debenture has been taken.
(vii) An amendment to each Debenture Pledge Agreement, in form
and substance satisfactory to the Agent, duly executed by each Loan
Party that is a Canadian Subsidiary of the Borrower, together with
evidence that all other action that the Agent may deem necessary or
desirable in order to perfect and protect the Liens and security
interests created under such Debenture Pledge Agreement has been taken.
(viii) [Intentionally omitted.]
(ix) A copy of a certificate of the Secretary of State of the
jurisdiction of incorporation of each Loan Party and TLSP Investments,
dated reasonably near the Restatement Date, in each case listing the
charter of each Loan Party or TLSP Investments, as applicable, and each
amendment thereto on file in such office and certifying that (A) such
charter is a true and correct copy thereof, (B) such amendments are the
only amendments to such charter on file in such office, (C) such Person
has paid all franchise taxes to the date of such certificate and (D)
such Person is duly incorporated and in good standing under the laws of
the State of the jurisdiction of its incorporation.
(x) A copy of a certificate of the Secretary of State of each
of the States listed on Schedule 3.01(a)(x), dated reasonably near the
Restatement Date, with respect to each Loan Party as listed on Schedule
3.01(a)(x), stating that such Person is duly qualified and in good
standing as a foreign corporation in such State and has filed all
annual reports required to be filed to the date of such certificate.
(xi) A certificate of each Loan Party and TLSP Investments,
signed on behalf of each such Person by its President and its
Secretary, dated the Restatement Date (the statements made in which
certificate shall be true on and as of the Restatement Date),
certifying as to (A) the absence of any amendments to the charter of
such Person since the date of the Secretary of State's certificate
referred to in Section 3.01(a)(ix), (B) a true and correct copy of the
bylaws of such Person as in effect on the Restatement Date, copies of
which shall be attached, (C) the due incorporation and good standing or
valid existence of such Person as a corporation organized under the
laws of the jurisdiction of its incorporation and the absence of any
proceeding for the dissolution or liquidation of such Person, (D) the
completeness and accuracy of the representations and warranties
contained in the Loan Documents as though made on and as of the
Restatement Date, (E) the absence of any event occurring and continuing
that constitutes
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a Default, (F) the approval and authorization of the execution,
delivery and performance of this Agreement and the other Loan Documents
and the Related Documents to which it is a party as evidenced by
appropriate resolutions of the board of directors of each such Loan
Party, copies of which shall be attached, and (G) the signature and
incumbency certificates of the officers of each such Loan Party
executing the Loan Documents and the Related Documents to which it is a
party.
(xii) Certified copies of each of the Related Documents, duly
executed by the parties thereto and in form and substance satisfactory
to the Lender Parties, together with all agreements, instruments and
other documents delivered in connection therewith as the Agent shall
request.
(xiii) Such financial, business and other information
regarding each Loan Party and its Subsidiaries as the Lender Parties
shall have requested, including, without limitation, information as to
possible contingent liabilities, tax matters, environmental matters,
obligations under or with respect to Plans, Multiemployer Plans and
Welfare Plans, collective bargaining agreements and other arrangements
with employees, audited annual financial statements dated December 31,
2000, which shall classify the Obligations of the Borrower to the
Lenders as long term liabilities, and forecasts prepared by management,
in form and substance satisfactory to the Lender Parties, of balance
sheets, income statements and cash flow statements on a monthly basis
for the period commencing on the Restatement Date through and including
the Final Maturity Date.
(xiv) [Intentionally Omitted.]
(xv) A letter, in form and substance satisfactory to the
Agent, from the Borrower to Xxxxxx Xxxxxxxx L.L.C., its independent
certified public accountants, advising such accountants that the Agent
and the Lender Parties have been authorized to exercise all rights of
the Borrower to require such accountants to disclose any and all
financial statements and any other information of any kind that they
may have with respect to the Borrower and its Subsidiaries and
directing such accountants to comply with any reasonable request of the
Agent or any Lender Party for such information.
(xvi) Evidence of insurance naming the Agent as additional
insured and loss payee with such responsible and reputable insurance
companies or associations, and in such amounts and covering such risks
as is satisfactory to the Lender Parties, including, without
limitation, business interruption insurance, product liability
insurance, and directors and officers insurance.
(xvii) [Intentionally Omitted.]
(xviii) Favorable opinions of (A) Cozen and X'Xxxxxx, counsel
to the Loan Parties, in the form of Exhibit H-1 and (B) XxXxxxxx Xxxxx,
Canadian counsel to the Loan Parties, in the form of Exhibit H-2.
(xix) [Intentionally Omitted.]
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(xx) The MDC Subordination Agreement evidencing a
restructuring of the MDC Subordinated Debt, in form and substance
satisfactory to the Agent and the Lenders, duly executed by each of the
Equity Investors and the Borrower.
(xxi) [Intentionally Omitted.]
(xxii) [Intentionally Omitted.]
(xxiii) [Intentionally Omitted.]
(xxiv) [Intentionally Omitted.]
(xxv) Certified copies of each employment agreement relating
to the senior management of the Borrower, including, without
limitation, Xxxxx Xxxxxx as Chief Executive Officer of the Borrower,
Xxxxx Xxxxxxxx as Chief Operating Officer of the Borrower, and Xxxxxx
Xxxx as Executive Vice President of Business Development of the
Borrower, duly executed by the parties thereto and in form and
substance satisfactory to the Required Lenders, and any such other
agreements as the Agent shall request.
(xxvi) Certified copies of any engagement letter between the
Borrower and any third party advisor, including, without limitation,
Birch Advisors, LLC, duly executed by the parties thereto and in form
and substance satisfactory to the Required Lenders.
(b) The Borrower shall have paid, to the extent not otherwise
provided for in this Agreement, (i) all accrued and unpaid interest
under the Existing Credit Agreement through the Restatement Date
("ACCRUED INTEREST"); provided, however, that 50% of all Accrued
Interest shall be paid in cash and the remaining 50% shall be evidenced
by a Deferred Interest Note; provided further, however, that the
Borrower shall pay to the Agent, for the benefit of the Working Capital
Lenders, an amount equal to 50% of all Accrued Interest, which payment
shall be applied to establish the Accounts Payable Reserve in
accordance with Section 2.06(b)(v), and (ii) all accrued fees and
expenses of the Agent and the Lender Parties (including the accrued
fees and expenses of counsel to the Agent, of Canadian counsel to the
Agent, of counsel to the Lenders, of the financial advisors to the
Agent and the Lenders, and fees payable to the Agent and Lenders
pursuant to Section 2.08(b) of this Agreement).
(c) The Lender Parties shall be satisfied with (i) the
corporate and legal structure and capitalization of the Borrower and
its Subsidiaries and (ii) the management of the Loan Parties.
(d) Before giving effect to the transactions contemplated by
this Agreement, there shall have occurred no Material Adverse Change
since December 31, 2000.
(e) Other than as set forth on Schedule 4.01(j), there shall
exist no action, suit, investigation, litigation or proceeding
affecting the Borrower or any other Loan
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Party or any of their Subsidiaries pending or threatened before any
court, governmental agency or arbitrator that could have a Material
Adverse Effect.
(f) The Lenders shall have completed a due diligence
investigation of the Borrower and its Subsidiaries (including, without
limitation, a field examination of the quality of their current assets
and of their management information systems) in scope and with results
satisfactory to the Lenders, and nothing shall have come to the
attention of the Lenders during the course of such due diligence
investigation to lead them to believe (i) that any material information
provided to the Agent or the Lenders has become misleading, incorrect
or incomplete in any material respect and (ii) without limiting the
generality of the foregoing, the Lender Parties shall have been given
such access to the management, records, books of account, contracts and
properties of the Borrower and its Subsidiaries, as they shall have
requested.
(g) The Borrower shall have delivered to the Agent and each
Lender a copy of the unaudited consolidated financial statements for
January 2001 and February 2001 at least 15 days prior to the
Restatement Date.
(h) The Borrower shall have delivered to the Agent and each
Lender a copy of the annual audit report for the Borrower and its
Subsidiaries for the Fiscal Year ended on December 31, 2000, which
shall classify the Obligations of the Borrower to the Lenders as long
term liabilities, and which shall include a Consolidated balance sheet
of the Borrower and its Subsidiaries, as of December 31, 2000, and
Consolidated statements of operations and cash flows of the Borrower
and its Subsidiaries, in each case for the Fiscal Year ending December
31, 2000, accompanied by an opinion of Xxxxxx Xxxxxxxx, LLC, together
with (i) a copy of any management letter prepared by Xxxxxx Xxxxxxxx,
LLC with respect to such Fiscal Year 2000 and distributed to the
Borrower, (ii) a certificate of the chief financial officer of the
Borrower stating that no Default has occurred and is continuing or, if
a Default has occurred and is continuing, a statement as to the nature
thereof and the action that the Borrower has taken and proposes to take
with respect thereto, (iii) in the event of any change from GAAP in the
generally accepted accounting principles used in the preparation of
such financial statements, a statement of reconciliation conforming
such financial statements to GAAP, and (iv) a schedule in form
satisfactory to the Agent of the computations used by the Borrower in
determining compliance with the covenants contained in the Existing
Credit Agreement.
(i) [Intentionally omitted.]
(j) The Borrower shall have delivered to the Agent and each
Lender a copy of its preliminary report containing forecasts prepared
by management of the Borrower, in form satisfactory to the Agent, of
Consolidated balance sheets, statements of operations and cash flows on
a monthly basis for the Fiscal Year 2001 together with a detailed
business plan and budget for Fiscal Year 2001.
(k) The Borrower shall have delivered to the Agent and each
Lender a copy of its report identifying all leased real property
together with a description of the lease term, the annual rent
payments, and any options to extend such Lease, all leased
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property for facilities in which the Borrower and its Subsidiaries are
no longer conducting operations, all leased real property which has
been disposed of during the most recent Fiscal Year, and all leased
real property to be disposed of in the succeeding Fiscal Year, in form
and substance satisfactory to the Agent and the Lenders (the "LEASED
REAL PROPERTY REPORT").
(l) [Intentionally Omitted.]
(m) The Borrower shall have implemented, pursuant to
documentation in form and substance satisfactory to the Agent and the
Lenders, an incentive program for members of the senior management of
the Borrower (the "MANAGEMENT INCENTIVE PROGRAM").
(n) The Agent shall have received a report, satisfactory in
form and substance to the Agent in its sole and absolute discretion,
from FTI/Xxxxxxxx & Xxxxx, as financial consultant to the Agent and the
Lenders ("XXXXXXXX & XXXXX") regarding the financial reporting systems,
operational controls and business plan of the Borrower and its
Subsidiaries, and the Borrower shall have implemented any changes to
such systems, controls or business plan recommended in such report.
Borrower agrees to cooperate with the Lenders and their advisors in
connection with their review of the Borrower and its Subsidiaries,
their assets, financial condition and operations and financial
planning, and to provide, upon reasonable notice, unfettered access to
all books, records and personnel necessary for such review.
(o) The Borrower shall have delivered to the Agent and each
Lender (i) a corporate organizational chart, and (ii) a list of all
management level employees of the Borrower and its Subsidiaries
terminated during the six months immediately preceding the Restatement
Date, as well as any severance arrangements relating to any such
termination.
(p) The Borrower shall have delivered to the Agent, for the
benefit of the Lenders, (i) copies of all Certificates of
Incorporation, Certificates of Merger, Articles of Merger and Articles
of Amalgamation, in each case filed in all proper jurisdictions,
evidencing the dissolution and merger of CRW Financial Acquisition
Corp., IDRC, Federal Compliance Corp., ProMark One Marketing Services
Inc., IntelliSell Corporation, IDRC Teleservices Inc., Telnet Systems
Inc. and IDRC New York, Inc., with or into the Borrower, and the
dissolution or merger of TeleSpectrum Worldwide (Canada) Inc. with or
into S&P Data Corp., and the subsequent name change of S&P Data Corp.
to TeleSpectrum Worldwide (Canada) Inc. and (ii) copies of all records
of proceedings and actions, including any resolutions adopted and
approved by the boards of directors of each of the aforementioned
parties and any amendments to the bylaws of the aforementioned parties,
evidencing such dissolutions or mergers.
SECTION 3.02. Conditions Precedent to Each Working Capital
Borrowing. The obligation of each Working Capital Lender to make a Working
Capital Advance on the occasion of each Working Capital Borrowing shall be
subject to the further conditions precedent that on the date of such Working
Capital Borrowing, (a) the following statements shall be true
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(and the giving of the Notice of Borrowing, and the acceptance by the Borrower
of the proceeds of such Working Capital Borrowing shall constitute a
representation and warranty by the Borrower that both on the date of such notice
and on the date of such Working Capital Borrowing such statements are true):
(i) the representations and warranties contained in each Loan
Document are correct on and as of such date, before and after giving
effect to such Working Capital Borrowing and to the application of the
proceeds therefrom, as though made on and as of such date other than
any such representations or warranties that, by their terms, refer to a
specific date other than the date of such Working Capital Borrowing, in
which case as of such specific date;
(ii) no event has occurred and is continuing, or would result
from such Working Capital Borrowing or from the application of the
proceeds therefrom, that constitutes a Default; and
(iii) the sum of the Loan Values of the Eligible Receivables
(as determined by the Agent based on the most recent Borrowing Base
Certificate delivered to the Lender Parties hereunder) exceeds the
aggregate principal amount of Working Capital Advances then outstanding
and which will be outstanding after giving effect to such Advance;
and (b) the Agent shall have received such other approvals, opinions or
documents as any Appropriate Lender Party through the Agent may reasonably
request.
SECTION 3.03. Determinations Under Section 3.01. For purposes of
determining compliance with the conditions specified in Section 3.01, each
Lender Party shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lender Parties unless an
officer of the Agent responsible for the transactions contemplated by the Loan
Documents shall have received notice from such Lender Party prior to the
Restatement Date specifying its objection thereto.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows:
(a) Each Loan Party (i) is a corporation duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation, (ii) is duly qualified and in good
standing as a foreign corporation in each other jurisdiction in which
it owns or leases property or in which the conduct of its business
requires it to so qualify or be licensed except where the failure to so
qualify or be licensed could not be reasonably likely to have a
Material Adverse Effect and (iii) has all requisite corporate power and
authority (including, without limitation, all governmental licenses,
permits and
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other approvals) to own or lease and operate its properties and to
carry on its business as now conducted and as proposed to be conducted.
All of the outstanding Equity Interests in the Borrower have been
validly issued, are fully paid and non-assessable.
(b) Set forth on Schedule 4.01(b) hereto is a complete and
accurate list of all Subsidiaries of each Loan Party, showing as of the
date hereof (as to each such Subsidiary) the jurisdiction of its
incorporation, the number of shares of each class of its Equity
Interests authorized, and the number outstanding, on the date hereof
and the percentage of the outstanding shares of each such class of its
Equity Interests owned (directly or indirectly) by such Loan Party and
the number of shares covered by all outstanding options, warrants,
rights of conversion or purchase and similar rights at the date hereof.
All of the outstanding Equity Interests in each Loan Party's
Subsidiaries have been validly issued, are fully paid and
non-assessable and are owned by such Loan Party or one or more of its
Subsidiaries free and clear of all Liens, except those created under
the Collateral Documents. Each such Subsidiary (i) is a corporation
duly organized, validly, existing and in good standing under the laws
of the jurisdiction of its incorporation, (ii) is duly qualified and in
good standing as a foreign corporation in each other jurisdiction in
which it owns or leases property or in which the conduct of its
business requires it to so qualify or be licensed except where the
failure to so qualified or be licensed could not be reasonably likely
to have a Material Adverse Effect and (iii) has all requisite corporate
power and authority (including, without limitation, all governmental
licenses, permits and other approvals) to own or lease and operate its
properties and to carry on its business as now conducted and as
proposed to be conducted. Each of CRW Financial Acquisition Corp.,
IDRC, Federal Compliance Corp., ProMark One Marketing Services Inc.,
IntelliSell Corporation, IDRC Teleservices Inc., Telnet Systems Inc.
and IDRC New York, Inc. have been dissolved or merged with or into the
Borrower. TeleSpectrum Worldwide (Canada) Inc. has been dissolved or
merged with or into S&P Data Corp, and S&P Data Corp. has amended its
name to TeleSpectrum Worldwide (Canada) Inc.
(c) The execution, delivery and performance by each Loan Party
of each Transaction Document to which it is or is to be a party, and
the consummation of the transactions contemplated by the Transaction
Documents, are within such Loan Party's corporate powers, have been
duly authorized by all necessary corporate action, and do not (i)
contravene such Loan Party's charter or bylaws, (ii) violate any law,
rule, regulation (including, without limitation, Regulation X of the
Board of Governors of the Federal Reserve System), order, writ,
judgment, injunction, decree, determination or award, (iii) conflict
with or result in the breach of, or constitute a default under, any
contract, loan agreement, indenture, mortgage, deed of trust, lease or
other instrument binding on or affecting any Loan Party, any of its
Subsidiaries or any of their properties or (iv) except for the Liens
created under the Loan Documents, result in or require the creation or
imposition of any Lien upon or with respect to any of the properties of
any Loan Party or any of its Subsidiaries. No Loan Party or any of its
Subsidiaries is in violation of any such law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award or in breach
of any such contract, loan agreement, indenture,
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mortgage, deed of trust, lease or other instrument, the violation or
breach of which could be reasonably likely to have a Material Adverse
Effect.
(d) No authorization or approval or other action by, and no
notice to or filing with any governmental authority or regulatory body
or any other third party is required for (i) the due execution,
delivery, recordation, filing or performance by any Loan Party of any
Transaction Document to which it is or is to be a party or for the
transactions contemplated by the Transaction Documents, (ii) the grant
by any Loan Party of the Liens granted by it pursuant to the Collateral
Documents, (iii) the perfection or maintenance of the Liens created
under the Collateral Documents (including the first priority nature
thereof) or (iv) the exercise by the Agent or any Lender Party of its
rights under the Loan Documents or the remedies in respect of the
Collateral pursuant to the Collateral Documents, except for the
authorizations, approvals, actions, notices and filings listed on
Schedule 4.01(d) hereto, all of which have been duly obtained, taken,
given or made and are in full force and effect. All applicable waiting
periods in connection with the transactions contemplated by the
Transaction Documents have expired without any action having been taken
by any competent authority restraining, preventing or imposing
materially adverse conditions upon the Borrower, and the other
transactions contemplated by the Transaction Documents have expired
without any action having been taken by any competent authority
restraining, preventing or imposing materially adverse conditions upon
the rights of the Loan Parties or their Subsidiaries freely to transfer
or otherwise dispose of, or to create any Lien on, any properties now
provided or hereafter acquired by any of them.
(e) This Agreement has been, each other Transaction Document
when delivered hereunder will have been, and each of the Collateral
Documents have been duly executed and delivered by each Loan Party
party thereto. This Agreement is, and each other Transaction Document
when delivered hereunder will be, the legal, valid and binding
obligation of each Loan Party party thereto, enforceable against such
Loan Party in accordance with its terms. The Collateral Documents,
whether or not amended, supplemented or otherwise modified in
connection with the execution and delivery of this Agreement, are, and
shall continue to be, the legal, valid and binding obligation of each
Loan Party party thereto, enforceable against such Loan Party in
accordance with its terms.
(f) (i) The Consolidated balance sheet of the Borrower and its
Subsidiaries as at December 31, 2000, and the related Consolidated
statements of operations and cash flows of the Borrower and its
Subsidiaries for the fiscal year then ended, accompanied, as to the
Consolidated financial statements of the Borrower and its Subsidiaries,
by an opinion of Xxxxxx Xxxxxxxx L.L.C., independent public
accountants, fairly present, the Consolidated financial condition of
the Borrower and its Subsidiaries as at such dates and the Consolidated
results of the operations of the Borrower and its Subsidiaries for the
periods ended on such dates, all in accordance with generally accepted
accounting principles applied on a consistent basis, and
(ii) since December 31, 2000 there has occurred no Material
Adverse Change.
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(g) [Intentionally Omitted.]
(h) The Consolidated forecasted balance sheet, statements of
operations and statements of cash flows of the Borrower and its
Subsidiaries delivered to the Lender Parties pursuant to Section
3.01(h) and Section 5.03(d) were prepared in good faith on the basis of
the assumptions stated therein, which assumptions were reasonable in
the light of conditions existing at the time of delivery of such
forecasts, and represented, at the time of delivery and on the
Restatement Date, the Borrower's best estimate of the future financial
performance of the Borrower and its Subsidiaries.
(i) None of the other information, exhibits or reports
(excluding any financial projections) taken as a whole, furnished by or
on behalf of any Loan Party to the Agent or any Lender Party, in
connection with the negotiation of the Loan Documents or pursuant to
the terms of the Loan Documents contained any untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements made therein not misleading in light of the circumstances
under which such information was provided and on the Restatement Date.
(j) There is no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of its Subsidiaries,
including any Environmental Action, pending or threatened before any
court, governmental agency or arbitrator that could be reasonably
likely to have a Material Adverse Effect except as set forth on
Schedule 4.01(j). There is no action, suit, investigation, litigation
or proceeding affecting any Loan Party or any of its Subsidiaries,
pending or threatened before any court, governmental agency or
arbitrator that purports to affect the legality, validity or
enforceability of any Transaction Document or the consummation of the
transactions contemplated hereby and thereby.
(k) No Loan Party is engaged in the business of extending
credit for the purpose of purchasing or carrying Margin Stock, and no
proceeds of any Advance will be used to purchase or carry any Margin
Stock or to extend credit to others for the purpose of purchasing or
carrying any Margin Stock.
(l) The Collateral Documents create a valid and perfected
first priority security interest in the Collateral securing the payment
of the Secured Obligations subject only to Liens permitted hereunder,
and all filings and other actions necessary or desirable to perfect and
protect such security interest have been duly taken. The Loan Parties
are the legal and beneficial owners of the Collateral free and clear of
any Lien, except for the Liens and security interests created or
permitted under the Loan Documents.
(m) Neither any Loan Party nor any of its Subsidiaries is an
"investment company" or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended. Neither the
making of any Advances, nor the application of the proceeds or
repayment thereof by the Borrower, nor the consummation of the other
transactions contemplated hereby, will violate any provision of such
Act or any rule, regulation or order of the Securities and Exchange
Commission thereunder.
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(n) [Intentionally omitted.]
(o) (i) No ERISA Event has occurred or is reasonably expected
to occur with respect to any Plan.
(ii) As of the last annual actuarial valuation date, the
funded current liability percentage, as defined in Section 302(d)(8) of
ERISA, of each Plan exceeds 90% and there has been no material adverse
change in the funding status of any such Plan since such date.
(iii) Neither any Loan Party nor any ERISA Affiliate has
incurred or is reasonably expected to incur any Withdrawal Liability to
any Multiemployer Plan.
(iv) Neither any Loan Party nor any ERISA Affiliate has been
notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or has been terminated, within the meaning of
Title IV of ERISA, and no such Multiemployer Plan is reasonably
expected to be in reorganization or to be terminated, within the
meaning of Title IV of ERISA.
(v) Except as set forth in the financial statements referred
to in this Section 4.01 and in Section 5.03, the Loan Parties and their
respective Subsidiaries have no material liability with respect to
"expected post retirement benefit obligations" within the meaning of
Statement of Financial Accounting Standards No. 106.
(vi) Set forth on Schedule 4.01(o) hereto is a complete and
accurate list of all Plans, Multiemployer Plans and Welfare Plans.
(vii) Schedule B (Actuarial Information) to the most recent
annual report (Form 5500 Series) for each Plan, copies of which have
been filed with the Internal Revenue Service and furnished to the
Lender Parties, is complete and accurate and fairly presents the
funding status of such Plan, and since the date of such Schedule B
there has been no material adverse change in such funding status.
(p) (i) Each Loan Party and each of its Subsidiaries and
Affiliates has filed, has caused to be filed or has been included in
all tax returns (federal, state, local and foreign) required to be
filed and has paid all taxes shown thereon to be due, together with
applicable interest and penalties.
(ii) Set forth on Schedule 4.01(p) hereto is a complete and
accurate list, as of the date hereof, of each taxable year of each Loan
Party and each of its Subsidiaries and Affiliates for which federal
income tax returns have been filed and for which the expiration of the
applicable statute of limitations for assessment or collection has not
occurred by reason of extension or otherwise (an "OPEN YEAR").
(iii) There is no unpaid amount, as of the date hereof, of
adjustments to the federal income tax liability of any Loan Party or
any of its Subsidiaries or Affiliates proposed by the Internal Revenue
Service with respect to Open Years. No issues have
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been raised by the Internal Revenue Service in respect of Open Years
that, in the aggregate, could have a Material Adverse Effect.
(iv) There is no unpaid amount, as of the date hereof, of
adjustments to the state, local and foreign tax liability of any Loan
Party or any of its Subsidiaries or Affiliates proposed by all state,
local and foreign taxing authorities (other than amounts arising from
adjustments to federal income tax returns, if any). No issues have been
raised by such taxing authorities that, in the aggregate, could have a
Material Adverse Effect.
(q) Neither the business nor the properties of any Loan Party
or any of its Subsidiaries are affected by any fire, explosion,
accident, strike, lockout or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other
casualty (whether or not covered by insurance) that could be reasonably
likely to have a Material Adverse Effect.
(r) [Intentionally omitted.]
(s) Set forth on Schedule 4.01(s) hereto is a complete and
accurate list of all Existing Debt including all letters of credit
outstanding on the date hereof (each such letter of credit, an
"EXISTING LETTER OF Credit"), showing as of the date hereof the
principal amount outstanding or amount available to be drawn (assuming
all conditions to drawing are satisfied) thereunder, the maturity date
thereof and the amortization schedule therefor.
(t) Neither the Borrower nor any of its Subsidiaries is the
beneficial owner of any real property.
(u) All Inventory of the Borrower or any of its Subsidiaries
that is owned by the Borrower or such Subsidiary free and clear of any
Lien, other than under the Loan Documents, is located at the addresses
specified on Schedule 4.01(u).
(v) Set forth on Schedule 4.01(v) hereto is a complete and
accurate list of all leases of real property under which any Loan Party
or any of its Subsidiaries is the lessee, showing as of the date hereof
the street address, county or other relevant jurisdiction, state,
lessor, lessee, expiration date and annual rental cost thereof, and all
information contained therein is complete and accurate. Each such lease
is the legal, valid and binding obligation of the lessor thereof
enforceable in accordance with its terms.
(w) Set forth on Schedule 4.01(w) hereto is a complete and
accurate list of all Investments held by any Loan Party or any of its
Subsidiaries, showing as of the date hereof the amount, obligor or
issuer and maturity, if any, thereof.
(x) Set forth on Schedule 4.01(x) hereto is a complete and
accurate list of all patents, trademarks, trade names, service marks
and copyrights, and all applications therefor and licenses thereof of
each Loan Party, or any of its Subsidiaries, showing as of
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the date hereof the jurisdiction in which registered, the registration
number, the date of registration and the expiration date.
(y) Set forth on Schedule 4.01(y) hereto is a complete and
accurate list of all Liens on the property or assets of any Loan Party
or any of its Subsidiaries, showing as of the date hereof the
lienholder thereof, the principal amount of the obligations secured
thereby and the property or assets of such Loan Party or such
Subsidiary subject thereto.
(z) The assets and property of TLSP Investments (other than
the TLSP Investments Subordinated Note) and the demand deposit accounts
of TLSP Investments permitted under Section 5.02(g)(ii) do not exceed
$50,000 in the aggregate.
(aa) Set forth on Schedule 4.01(aa) hereto is a complete and
accurate list of all deposit accounts that are not Blocked Accounts of
the Borrower or any of its Subsidiaries as of the date hereof.
(bb) Except as set forth on Schedule 4.01(cc), neither the
Borrower nor any Subsidiary has received any written or oral proposal
for either (a) the sale, in whole or in part, of its business, or (b)
the refinancing of all or substantially all of its Debt (individually,
a "PROPOSAL").
(cc) Set forth on Schedule 4.01(dd) hereto is a complete and
accurate list of all Material Contracts as of the Restatement Date.
(dd) All Obligations of the Borrower and any Loan Party in
connection with the IntelliSell Earnout (as defined in the Existing
Credit Agreement) have been satisfied and all Debts of the Borrower and
any Loan Party in connection with the IntelliSell Earnout Notes (as
defined in the Existing Credit Agreement) have been paid in full.
ARTICLE V
COVENANTS
SECTION 5.01. Affirmative Covenants. So long as any Advance or any
other Obligation of any Loan Party under or in respect of any Loan Document
shall remain unpaid, any Secured Hedge Agreement shall be in effect or any
Lender Party shall have any Term Advance Exposure or Working Capital Commitment
hereunder, the Borrower will:
(a) Compliance with Laws, Etc. Comply and cause each of its
Subsidiaries and eSatisfy to comply, in all material respects, with all
applicable laws, rules, regulations and orders, such compliance to
include, without limitation, compliance with ERISA and the Racketeer
Influenced and Corrupt Organizations Chapter of the Organized Crime
Control Act of 1970.
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(b) Payment of Taxes, Etc. Pay and discharge, and cause each
of its Subsidiaries to pay and discharge, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges or
levies imposed upon it or upon its property and (ii) all lawful claims
that, if unpaid, might by law become a Lien upon its property which is
not otherwise permitted hereunder; provided, however, that neither the
Borrower nor any of its Subsidiaries shall be required to pay or
discharge any such tax, assessment, charge or claim that is being
contested in good faith and by proper proceedings and as to which
appropriate reserves are being maintained, unless and until any Lien
resulting therefrom attaches to its property and becomes enforceable
against its other creditors.
(c) Compliance with Environmental Laws. Comply, and cause each
of its Subsidiaries and all lessees and other Persons operating or
occupying its properties to comply, in all material respects, with all
applicable Environmental Laws and Environmental Permits; obtain and
renew, and cause each of its Subsidiaries to obtain and renew, all
Environmental Permits necessary for its operations and properties; and
conduct, and cause each of its Subsidiaries to conduct, any
investigation, study-sampling and testing, make an appropriate response
to any Environmental Action against the Borrower or any Loan Party or
any of their Subsidiaries and discharge any obligations it may have to
any Person thereunder (except if the Borrower or any Loan Party and
their Subsidiaries do not have standing to contest or respond to such
Environmental Action), and undertake any cleanup, removal, remedial or
other action necessary to remove and clean up all Hazardous Materials
from any of its properties, in material compliance with the
requirements of all governmental authorities and Environmental Laws;
provided, however, that neither the Borrower nor any of its
Subsidiaries shall be required to undertake any such cleanup, removal,
remedial or other action to the extent that its obligation to do so is
being contested in good faith and by proper proceedings and appropriate
reserves are being maintained with respect to such circumstances.
(d) Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses
and owning similar properties in the same general areas in which the
Borrower or such Subsidiary operates.
(e) Preservation of Corporate Existence, Etc. Preserve and
maintain, and cause each of its Subsidiaries to preserve and maintain,
its corporate existence, rights (charter and statutory), permits,
licenses, approvals, privileges and franchises; provided, however, that
neither the Borrower nor any of its Subsidiaries shall be required to
preserve any right, permit, license, approval, privilege or franchise
if the Board of Directors of the Borrower or such Subsidiary shall
determine that the preservation thereof is no longer desirable in the
conduct of the business of the Borrower or such Subsidiary, as the case
may be, and that the loss thereof is not disadvantageous in any
material respect to the Borrower, such Subsidiary or the Lender
Parties.
(f) Visitation Rights. At any reasonable time and from time to
time, upon reasonable prior notice, permit the Agent or any of the
Lender Parties or any agents or representatives thereof to examine and
make copies of and abstracts from the records and
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books of account of, and visit the properties of, the Borrower and any
of its Subsidiaries or eSatisfy, and to discuss the affairs, finances
and accounts of the Borrower and any of its Subsidiaries with any of
their officers or directors and with their independent certified public
accountants.
(g) Keeping of Books. Keep, and cause each of its Subsidiaries
to keep, proper books of record and account, in which full and correct
entries shall be made of all financial transactions and the assets and
business of the Borrower and each such Subsidiary in accordance with
generally accepted accounting principles in effect from time to time.
(h) Maintenance of Properties, Etc. Maintain and preserve, and
cause each of its Subsidiaries to maintain and preserve, all of its
properties that are reasonably required in the conduct of its business
in good working order and condition, ordinary wear and tear excepted.
(i) Transactions with Affiliates. Conduct, and cause each of
its Subsidiaries to conduct, all transactions otherwise permitted under
the Loan Documents with any of their Affiliates on terms that are fair
and reasonable and no less favorable to the Borrower or such Subsidiary
than it would obtain in a comparable arm's-length transaction with a
Person not an Affiliate.
(j) Covenant to Guarantee Obligations and Give Security. Upon
(x) the request of the Agent, (y) the formation or acquisition of any
new direct or indirect Subsidiary of any Loan Party (other than a
Foreign Subsidiary that is not a Canadian Subsidiary if the effect of
such undertaking would have material adverse tax consequences to the
Loan Parties taken as a whole) or (z) the acquisition of any property
by any Loan Party, and such property in the judgment of the Agent shall
not already be subject to a perfected first priority security interest
in favor of the Agent for the benefit of the Secured Parties, then the
Borrower shall, in each case at the Borrower's expense:
(i) within 10 days after the formation or acquisition of a
Subsidiary, cause each such Subsidiary and each direct and indirect
Subsidiary of such Subsidiary, to duly execute and deliver to the Agent
a guaranty or guaranty supplement, in form and substance satisfactory
to the Agent, guaranteeing all of the Loan Parties' Obligations under
the Loan Documents, provided that no guaranty may be required (if
acceptable to the Agent) from a Foreign Subsidiary that is not a
Canadian Subsidiary if the execution and delivery thereof would result
in adverse tax consequences to the Loan Parties;
(ii) within 10 days after such request, formation or
acquisition, furnish to the Agent a description of the real and
personal properties of the Borrower and its Subsidiaries in detail
satisfactory to the Agent;
(iii) within 15 days after such request, formation or
acquisition, duly execute and deliver, and cause each such Subsidiary
and cause each direct and indirect parent of such Subsidiary to duly
execute and deliver, to the Agent mortgages, pledges, assignments,
security agreement supplements and other security agreements, as
specified
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by and in form and substance satisfactory to the Agent, securing
payment of all the Obligations of the Loan Parties under the Loan
Documents and constituting Liens on all such properties, provided that
no mortgage, pledge, assignment, security agreement supplement or other
security agreement may be required (if acceptable to the Agent) from a
Foreign Subsidiary that is not a Canadian Subsidiary if the execution
and delivery thereof would result in adverse tax consequences to the
Loan Parties;
(iv) within 30 days after such request, formation or
acquisition, duly, execute and deliver, and cause each such Subsidiary
and cause each direct and indirect parent of such Subsidiary (other
than any foreign Subsidiary that is not a Canadian Subsidiary) to take
whatever action (including, without limitation, the recording of
mortgages, the filing of Uniform Commercial Code financing statements,
the giving of notices and the endorsement of notices on title
documents) may be necessary or advisable in the opinion of the Agent to
vest in the Agent (or in any representative of the Agent) Liens on the
properties purported to be subject to the mortgages, pledges,
assignments, security agreement supplements and other security,
agreements delivered pursuant to this Section 5.01(j), enforceable
against all third parties in accordance with their terms;
(v) within 30 days after such request, formation or
acquisition, deliver to the Agent, upon the request of the Agent in its
sole discretion, a signed copy of a favorable opinion, addressed to the
Agent and the other Secured Parties, of counsel for the Loan Parties
acceptable to the Agent as to the matters contained in clauses (i),
(iii) and (iv) above, as to such mortgages, pledges, assignments,
security agreement supplements and other security agreements being
legal, valid and binding obligations of each such Loan Party
enforceable in accordance with their terms and as to such other matters
as the Agent may reasonably request;
(vi) as promptly as practicable after such request, formation
or acquisition, deliver, upon the request of the Agent in its sole
discretion, to the Agent with respect to each parcel of real property
owned or held by the entity that is the subject of such request,
formation or acquisition title reports, surveys and engineering, soils
and other reports, and environmental assessment reports, each of scope,
form and substance satisfactory to the Agent, provided, however, that
to the extent that any Loan Party, or any of its Subsidiaries shall
have otherwise received any of the foregoing items with respect to such
real property such items shall promptly after the receipt thereof be
delivered to the Agent, at any time and from time to time, promptly
execute and deliver any and all further instruments and documents and
take all such other action as the Agent may deem necessary or desirable
in obtaining the full benefits of, or in perfecting and presenting the
Liens of, such guaranties, mortgages, pledges, assignments, security
agreements and security agreement supplements; and
(vii) promptly upon organizing, or within five days after
organizing any Subsidiary or joint venture specified in clause (A)
below, or within 15 days after organizing any Person specified in
clause (B), each Loan Party shall pledge to the Agent on behalf of the
Secured Parties (A) in the case of any U.S. Subsidiary or Canadian
Subsidiary, 100% of the outstanding Equity Interests of such Person
owned by such Loan Party; (B) in the case of any Foreign Subsidiary
that is not a Canadian Subsidiary or
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foreign joint venture, 65 % of the total outstanding Equity Interests
of such Person owned by such Loan Party; and (C) in the case of any
domestic joint venture, 100% of the Equity Interests of such Person
held by such Loan Party.
(k) Further Assurances. (i) Promptly upon request by the Agent
or by any Lender Party through the Agent, correct any material defect
or error that may be discovered in any Loan Document or in the
execution, acknowledgment, filing or recordation thereof, and
(ii) Promptly upon request by the Agent or by any Lender Party
through the Agent, do, execute, acknowledge, deliver, record,
re-record, file, re-file, register and re-register any and all such
further acts, deeds, conveyances, pledge agreements, mortgages, deeds
of trust, trust deeds, assignments, financing statements and
continuations thereof, termination statements, notices of assignment,
transfers, certificates, assurances and other instruments as the Agent,
or any Lender Party through the Agent, may reasonably require from time
to time in order to (A) carry out more effectively the purposes of the
Loan Documents, (B) to the fullest extent permitted by applicable law,
subject any Loan Party's or any of its Subsidiaries' properties,
assets, rights or interests to the Liens now or hereafter intended to
be covered by any of the Collateral Documents, (C) perfect and maintain
the validity, effectiveness and priority of any of the Collateral
Documents and any of the Liens intended to be created thereunder and
(D) assure, convey, grant, assign, transfer, preserve, protect and
confirm more effectively unto the Agent and the Lender parties the
rights granted or now or hereafter intended to be granted to the Agent
and the Lender Parties under any Loan Document or under any other
instrument executed in connection with any Loan Document to which any
Loan Party or any of its Subsidiaries is or is to be a party, and cause
each of its Subsidiaries to do so.
(l) Performance of Related Documents. Perform and observe, and
cause each of its Subsidiaries to perform and observe, all of the terms
and provisions of each Related Document to be performed or observed by
it, maintain each such Related Document in full force and effect,
enforce such Related Document in accordance with its terms, take all
such actions to such end as may be from time to time requested by the
Agent and, upon request of the Agent, make to each other party to each
such Related Document such demands and requests for information and
reports or for action as such Loan Party or any of its Subsidiaries is
entitled to make under such Related Document.
(m) Preparation of Environmental Reports. At the request of
the Agent, provide to the Lender Parties within 60 days after such
request, at the expense of the Borrower, a Phase I environmental site
assessment report for any of its or its Subsidiaries' properties
described in such request, prepared by an environmental consulting firm
acceptable to the Agent (and, if based upon the recommendation of such
environmental consulting firm, a Phase II environmental site assessment
report) indicating the presence or absence of Hazardous Materials and
the estimated cost of any compliance, removal or remedial action in
connection with any Hazardous Materials on such properties. Without
limiting the generality of the foregoing, if the Agent determines at
any time that a material risk exists that any such report will not be
provided within the
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time referred to above, the Agent may retain an environmental
consulting firm to prepare such report at the expense of the Borrower,
and the Borrower hereby grants and agrees to cause any Subsidiary that
owns any property described in such request to grant at the time of
such request, to the Agent, the Lender Parties, such firm and any
agents or representatives thereof an irrevocable non-exclusive license,
subject to the rights of tenants, to enter onto their respective
properties to undertake such an assessment. The Borrower will deliver
to Agent promptly following receipt thereof, copies of material
environmental audits, investigations, analyses and reports of any kind
or character, whether prepared by personnel of the Borrower or any of
its Subsidiaries or by independent consultants, governmental
authorities or any other Persons, with respect to material
environmental matters affecting the properties of the Borrower or any
of its Subsidiaries or with respect to any material Environmental
Actions. Agent may, from time to time and in its reasonable discretion,
at the Borrower's expense, retain an independent professional
consultant to review any environmental audits, investigations, analyses
and reports prepared by or for the Borrower or any of its Subsidiaries.
(n) Compliance with Terms of Leaseholds and Material
Contracts. Except in any case in clause (i) or (ii) where the failure
to do so would not be reasonably likely to have a Material Adverse
Effect, (i) with respect to all leases of real property to which the
Borrower or any of its Subsidiaries is a party, make all payments and
otherwise perform all obligations in respect of all such leases, keep
all such leases in full force and effect and not allow any of such
leases to lapse or be terminated or any rights to renew such leases to
be forfeited or canceled, promptly notify the Agent of any material
default by any party with respect to any such lease and cooperate with
the Agent in all respects to cure any such default, and cause each of
its Subsidiaries to do so, and (ii) with respect to all Material
Contracts, make all payments and perform all obligations in respect of
all Material Contacts, keep all Material Contracts in full force and
effect and not allow any Material Contract to lapse or be terminated or
any rights to renew such Material Contract to be forfeited or canceled,
promptly notify the Agent of any default by any party with respect to
any Material Contract and cooperate with the Agent in all respects to
cure any such default, and cause each of its Subsidiaries to do so.
(o) [Intentionally Omitted.]
(p) Proposals. Promptly deliver to the Agent and each Lender
(i) copies of any written Proposal promptly after receipt thereof by
the Borrower, and (ii) a written summary of any oral Proposal promptly
after receipt thereof by the Borrower.
(q) Access to Advisors. Permit the Agent and any Lender or any
agents or representatives thereof full and direct access to any
investment banker and/or financial advisor working for or on behalf of
the Borrower, including, without limitation, Birch Advisors, LLC.
(r) Annual Forecast and Business Plan. Deliver to the Agent
and each Lender prior to or on September 30, 2001, forecasts prepared
by management of the Borrower, in form satisfactory to the Agent, of
Consolidated balance sheets, statements of operations and cash flows on
a monthly basis for the Fiscal Years 2002 and 2003
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together with a narrative description of the business strategy with
respect to each business segment for Fiscal Years 2002 and 2003.
(s) [Intentionally omitted.]
(t) Board of Directors; Lender Representatives. Notify the
Agent and the Lenders of each meeting of the board of directors of the
Borrower and any subcommittee thereof, and permit up to two (2)
designated representatives of the Agent and the Lenders, as determined
by the Agent and the Required Lenders in their sole discretion, and
which shall be reasonably acceptable to the Borrower ("DESIGNATED
REPRESENTATIVES"), to attend all meetings of the board of directors of
the Borrower and any subcommittees thereof; provided, however, that no
Designated Representative shall be permitted to attend any meeting, or
portion thereof, concerning any refinancing of the Obligations of the
Borrower.
(u) Capital Expenditure Plan. Deliver to the Agent and each
Lender on or before June 30, 2001, a copy of the plan of Capital
Expenditures, in form and substance satisfactory to the Required
Lenders, forecasted on a monthly basis through December 31, 2001, and
by September 30, 2001, such plan on a monthly basis through July 1,
2002 (the "CAPITAL EXPENDITURE PLAN").
(v) Management Consultant. By the date not later than 90 days
after the Restatement Date, the Borrower shall have met with two
consultants of national reputation identified by the Agent and Majority
Lenders, and shall have discussed with such consultants the operations
of the Borrower and its Subsidiaries. In addition, from and after the
earlier to occur of (a) any Event of Default which is continuing, and
(b) the date which is 120 days after the Restatement Date, upon the
request of Majority Lenders the Borrower shall, at its own cost, retain
one of the consultants or another consultant reasonably acceptable to
the Borrower and the Majority Lenders pursuant to an engagement letter
in form, substance and scope acceptable to Majority Lenders in their
reasonable discretion. Notwithstanding anything to the contrary
contained in this Section 5.01(v), the aggregate fees payable to any
consultant shall not exceed $1.75 million without the consent of the
Required Lenders.
SECTION 5.02. Negative Covenants. So long as any Advance or any
other Obligation of any Loan Party under or in respect of any Loan Document
shall remain unpaid, or any Secured Hedge Agreement shall be in effect or any
Lender Party shall have any Term Advance Exposure or Working Capital Commitment
hereunder, the Borrower will not at any time:
(a) Liens, Etc. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to
exist, any Lien on or with respect to any of its properties of any
character (including, without limitation, accounts) whether now owned
or hereafter acquired, or sign or file or suffer to exist, or permit
any of its Subsidiaries to sign or file or suffer to exist, under the
Uniform Commercial Code of any jurisdiction, a financing statement that
names the Borrower or any of its Subsidiaries as debtor, or sign or
suffer to exist, or permit any of its Subsidiaries to sign or suffer to
exist,
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any security agreement authorizing any secured party thereunder to file
such financing statement, or assign, or permit any of its Subsidiaries
to assign, any accounts or other right to receive income, excluding,
however, from the operation of the foregoing restrictions the following
(in each case other than under subclauses (i), (ii) and (iii), subject
to Section 5.02(r) with respect to TLSP Investments and TLSP
Trademarks):
(i) Liens created under the Loan Documents;
(ii) Permitted Liens;
(iii) Liens existing on the date hereof and described on
Schedule 4.01(y) hereto;
(iv) Liens arising in connection with Capitalized Leases
permitted under Section 5.02(b)(ii)(B), provided that no such Lien
shall extend to or cover any Collateral or assets other than the assets
subject to such Capitalized Leases;
(v) purchase money Liens upon or in real property or equipment
acquired or held by the Borrower or any of its Subsidiaries in the
ordinary course of business to secure the purchase price of such
property or equipment or to secure Debt incurred solely for the purpose
of financing the acquisition of any such property or equipment to be
subject to such Liens, or Liens existing on any such property or
equipment at the time of acquisition (other than any such Liens created
in contemplation of such acquisition that do not secure the purchase
price), or extensions, renewals or replacements of any of the foregoing
for the same or a lesser amount; provided, however, that no such Lien
shall extend to or cover any property other than the property or
equipment being acquired, and no such extension, renewal or replacement
shall extend to or cover any property, not theretofore subject to the
Lien being extended, renewed or replaced; and provided further that the
aggregate principal amount of the Debt secured by Liens permitted by
this clause (v) shall not exceed the amount permitted under Section
5.02(b)(ii)(B) at any time outstanding and that any such Debt shall not
otherwise be prohibited by the terms of the Loan Documents;
(vi) Liens arising in connection with Government Loans
permitted under Section 5.02(b)(ii)(B) and solely for the benefit of
the governmental entity making such Government Loan, provided that no
such Lien shall extend to or cover any Collateral or assets other than
the equipment, real property and other property purchased or financed
with such Government Loans;
(vii) the filing of financing statements solely as a
precautionary measure in connection with operating leases not
prohibited under Section 5.02(c); and
(viii) the replacement, extension or renewal of any Lien
permitted by clause (iii) above upon or in the same property
theretofore subject thereto or the replacement, extension or renewal
(without increase in the amount or change in any direct or contingent
obligor) of the Debt secured thereby.
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(b) Debt. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist,
any Debt other than:
(i) in the case of the Borrower,
(A) Debt in respect of the Existing Hedge Agreements and any
other Hedge Agreement that is required or otherwise permitted under
Section 5.01(o);
(B) Debt to its wholly-owned U.S. Subsidiaries and Canadian
Subsidiaries that are Loan Parties as of the date hereof to the
extent permitted by Section 5.02(g), so long as such Debt (x) is
subordinated to the Obligations under the Loan Documents pursuant to
an intercompany subordination agreement in substantially the form of
Exhibit K-I hereto (as amended, restated, supplemented or otherwise
modified from time to time in accordance with its terms, the
"INTERCOMPANY SUBORDINATION AGREEMENT"), duly executed by such
Subsidiary, (y) is evidenced by an intercompany note in
substantially the form of Exhibit K-2 hereto (each, as amended,
amended and restated, supplemented or otherwise modified from time
to time in accordance with its terms, an "INTERCOMPANY NOTE"), duly
executed by the Borrower as payor, and (z) shall constitute Pledged
Debt and shall be delivered to the Agent in accordance with Section
5.01(j); provided, however, that in each case, immediately after
giving effect thereto, no Default shall have occurred and be
continuing; and
(C) the MDC Subordinated Debt;
(ii) in the case of the Loan Parties,
(A) Debt under the Loan Documents;
(B) Debt secured by Liens permitted under Section 5.02(a)(v),
Capitalized Leases and Government Loans for which the aggregate
annual principal payments made or to be made in respect thereof
shall not exceed $3,300,000 in the aggregate;
(C) Debt incurred in respect of the TARP Earnout;
(D) Debt in respect of the Existing Hedge Agreements or any
other Hedge Agreement that is required or otherwise permitted under
Section 5.01(o);
(E) Debt owed to the Borrower by its wholly-owned U.S.
Subsidiaries and Canadian Subsidiaries, subject to the requirements
of Section 5.02(b)(i)(B) (except that each reference to the Borrower
in each of clauses (x) and (y) thereof shall be a reference to such
U.S. Subsidiary or Canadian Subsidiary for the purposes of this
subclause (E)) and in each case to the extent permitted by Section
5.02(g); provided, however, that in each case, immediately after
giving effect thereto, no Default shall have occurred and be
continuing;
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(F) Debt consisting of (1) amounts due under those structured
settlements with certain vendors as set forth on Schedule
5.02(b)(ii)(F) hereto, as such amounts may be reduced, (2) amounts
due to Ameritech in an amount not to exceed $2,400,000, as such
amount may be reduced, and (3) trade payables incurred in the
ordinary course of business which are overdue by more than 90 days
and which are (a) not greater than 23% of the aggregate amount of
all trade payables as of the 120th day after the Restatement Date,
and (b) not greater than 20% of the aggregate amount of all trade
payables as of the 210th day after the Restatement Date or any date
thereafter; and
(G) unsecured Debt other than Debt (x) permitted in clauses
(A) through (F) of this Section 5.02(b)(ii) or (y) as set forth on
Schedule 4.01(s), but including Debt that also constitutes
Investments permitted under Section 5.02(g), in an aggregate amount
not to exceed $1,000,000 at any time outstanding;
(H) in the case of the Borrower and TeleSpectrum Worldwide
(Canada) Inc., the TLSP Subordinated Debt; and
(iii) in the case of the Borrower and any of its Subsidiaries,
indorsement of negotiable instruments for deposit or collection or
similar transactions in the ordinary course of business, subject to
Section 5.02(r) in the case of TLSP Investments and TLSP Trademarks.
(c) Lease Obligations. Create, incur, assume or suffer to
exist, or permit any of its Subsidiaries to create, incur, assume or
suffer to exist, any obligations as lessee for the rental or hire of
real or personal property in connection with any sale and leaseback
transaction; provided, however, that so long as no Default has occurred
and is continuing, any Loan Party may enter into an operating lease of
equipment sold pursuant to Section 5.02(f)(iii).
(d) Change in Nature of Business. Make, or permit any of its
Subsidiaries to make, any material change in the nature of its business
as carried on at the date hereof.
(e) Mergers, Etc. Merge into or consolidate with any Person or
permit any Person to merge into it, or permit any of its Subsidiaries
to do so, except that any Subsidiary of the Borrower may merge into or
consolidate with the Borrower or any other such Subsidiary, so long as
the surviving Person is the Borrower or, if the merger or consolidation
is with a Subsidiary other than the Borrower, such surviving Person is
a wholly-owned U.S. Subsidiary or Canadian Subsidiary of the Borrower
and complies with Section 5.01(j).
(f) Sales, Etc. of Assets. Sell, lease, transfer or otherwise
dispose of, or permit any of its Subsidiaries to sell, lease, transfer
or otherwise dispose of, any assets, or grant any option or other right
to purchase, lease or otherwise acquire any assets, except:
(i) inventory in the ordinary course;
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(ii) in a transaction authorized by subsection (e) of this
Section; and
(iii) sales or trade-ins of used equipment for fair value in
the ordinary course of business for like assets or cash in an aggregate
amount not to exceed $250,000 in the aggregate from and after the
Restatement Date.
(g) Investments. Make or hold, or permit any of its
Subsidiaries to make or hold, any Investment other than:
(i) Investments by the Borrower and the other Loan Parties in
wholly-owned Subsidiaries which Investments are outstanding on the date
hereof;
(ii) Investments by the Borrower and its Subsidiaries (other
than TLSP Investments) in demand deposit accounts maintained in the
ordinary course of business with any Person of the type referred to in
clause (i), (ii), (iii), (iv) or (v) of the definition of "Eligible
Assignee" and in Cash Equivalents not on deposit in Blocked Accounts in
an aggregate amount not to exceed $500,000; provided, however, that
TLSP Investments may maintain two demand deposit accounts upon, and
subject to, the Agent's prior written consent;
(iii) Investments by the Borrower in Hedge Agreements
permitted under Section 5.02(b)(i)(A);
(iv) Investments existing on the date hereof and described on
Schedule 4.01(w) hereto; and
(v) Investments by Subsidiaries of the Borrower in the
Borrower.
(h) Restricted Payments. Declare or pay any dividends,
purchase, redeem, retire, defease or otherwise acquire for value any of
its Equity Interests now or hereafter outstanding, return any capital
to its stockholders, partners or members (or the equivalent Persons
thereof) as such or issue or sell any Equity Interests or accept any
capital contributions, or permit any of its Subsidiaries to purchase,
redeem, retire, defease or otherwise acquire for value Equity Interests
of the Borrower or to issue or sell any Equity Interests therein,
except that, so long as no Default shall have occurred and be
continuing at the time of any action described in clause (i) or (ii)
below or would result therefrom;
(i) the Borrower may declare and pay dividends and
distributions payable only in common stock of the Borrower; and
(ii) any Subsidiary of the Borrower may (A) declare and pay
cash dividends to the Borrower, (B) declare and pay cash dividends to
any other wholly-owned U.S. Subsidiary or Canadian Subsidiary of the
Borrower of which it is a Subsidiary, and (C) if not a wholly-owned
Subsidiary of the Borrower, declare and pay cash dividends to each
holder of an Equity Interest therein in proportion to such holding,
provided that the Borrower or other Loan Party, as a holder of Equity
Interest therein,
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shall also receive cash distributions from such Subsidiary on terms no
less favorable than afforded to any other holder of Equity Interests of
the same as such Loan Party's holding.
(i) Amendment of Constitutive Documents. Amend, or permit any
of its Subsidiaries to amend, its certificate of incorporation, bylaws
or other constitutive documents.
(j) Accounting Changes. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in (i) accounting policies
or reporting practices, except (A) as required by GAAP or (B) if such
change has no material effect on the financial information reported, or
(ii) Fiscal Year.
(k) Prepayments, Etc. of Debt. (i) Prepay, redeem, or
otherwise satisfy prior to the scheduled maturity thereof in any
manner, or make any payment in violation of any subordination terms of,
any Debt other than (A) the prepayment of the Advances in accordance
with the terms of this Agreement, (B) if before and after giving effect
to any such prepayment, redemption, purchase, defeasance or other
satisfaction, no Default has occurred and is continuing or would result
therefrom, regularly scheduled or required repayments or redemptions of
Accounts Payable, and (C) if before and after giving effect to any such
prepayment, redemption, purchase, defeasance or other satisfaction, no
Default has occurred and is continuing or would result therefrom, Debt
permitted under Sections 5.02(b)(i)(B) and (ii)(E), or (ii) amend,
modify or change in any manner any term or condition of the MDC
Subordinated Debt or the TLSP Subordinated Debt, or permit any of its
Subsidiaries to do any of the foregoing other than to prepay any Debt
payable to the Borrower.
(l) Amendment, Etc. of Related Documents. Cancel or terminate
any Related Document or consent to or accept any cancellation or
termination thereof, amend, modify or change in any manner any term or
condition of any Related Document or give any consent, waiver or
approval thereunder, waive any default under or any breach of any term
or condition of any Related Document, agree in any manner to any other
amendment, modification or change of any term or condition of any
Related Document or take any other action in connection with any
Related Document that would impair the value of the interest or rights
of any Loan Party thereunder, that would impair the rights or interests
of the Agent or any Lender Party, that would result in a Material
Adverse Change, or that would result in a material increase in the
aggregate compensation, incentives and benefits of the Borrower's
senior management, or permit any of its Subsidiaries to do any of the
foregoing.
(m) Negative Pledge. Enter into or suffer to exist, or permit
any of its Subsidiaries to enter into or suffer to exist, any agreement
prohibiting or conditioning the creation or assumption of any Lien upon
any of its property or assets other than (i) in favor of the Secured
Parties or (ii) in connection with any Debt that is secured by purchase
money Liens or is a Capitalized Lease or a Government Loan, in each
case, to the extent permitted under Section 5.02(b)(ii)(B), and solely
to the extent such agreement is limited to the property covered by such
Liens, subject to Section 5.02(r) in the case of TLSP Investments.
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(n) Partnerships. Become a general partner in any general or
limited partnership or joint venture, or permit any of its Subsidiaries
to do so other than any Subsidiary the sole assets of which consist of
its interest in such partnership or joint venture.
(o) Formation of Subsidiaries. Organize or invest, or permit
any Subsidiary to organize or invest, in any new Subsidiary.
(p) Payment Restrictions Affecting Subsidiaries. Directly or
indirectly, enter into or suffer to exist, or permit any of its
Subsidiaries to enter into or suffer to exist any agreement or
arrangement limiting the ability of any of its Subsidiaries to declare
or pay dividends or other distributions in respect of its Equity
Interests or repay or prepay any Debt owed to, make loans or advances
to, or otherwise transfer assets to or invest in, the Borrower or any
Subsidiary of the Borrower (whether through a covenant restricting
dividends, loans, asset transfers or investments, a financial covenant
or otherwise), except the Loan Documents.
(q) Other Transactions. Engage, or permit any of its
Subsidiaries to engage, in any transaction involving commodity, options
or futures contracts or any similar speculative transactions
(including, without limitation, take-or-pay contracts).
(r) Restricted Subsidiaries. Permit TLSP Investments or TLSP
Trademarks to create, incur, assume or suffer to exist Obligations or
Liens in an aggregate amount in excess of $50,000 at any time, or
suffer to exist or permit TLSP Investments to create, acquire, assume
or own property and assets in the aggregate exceeding $50,000 (other
than the TLSP Investments Subordinated Notes, and, in the case of TLSP
Investments, the demand deposit accounts permitted under Section
5.02(g)(ii)), unless, in the case of TLSP Investments, TLSP Investments
shall have complied with Section 5.01(j) and, as to TLSP Trademarks,
TLSP Trademarks shall have pledged the TLSP Trademarks Subordinated
Debt.
(s) Amendment, Etc. of Material Contracts. Cancel or terminate
any Material Contract, or consent to or accept any cancellation or
termination thereof, amend, modify or change in any manner any term or
condition of any Material Contract or give any consent, waiver or
approval thereunder, waive any default under or any breach of any term
or condition of any Material Contract, agree in any manner to any other
amendment, modification or change of any term or condition of any
Material Contract or take any other action in connection with any
Material Contract that would impair the value of the interest or rights
of any Loan Party thereunder, that would, in any such case, would be
reasonably likely to cause a Material Adverse Change, or that would
result in a material increase in the aggregate compensation, incentives
and benefits of the Borrower's senior management, or permit any of its
Subsidiaries to do any of the foregoing, in each case without the
written consent of the Agent and the Required Lenders.
(t) Management Incentive Plan. (i) Amend or modify, in any
way, or permit any of its Subsidiaries to amend or modify, in any way,
the Management Incentive Program implemented pursuant to Section
3.01(m) without the written consent of
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Required Lenders, or (ii) cause the board of directors (or any
subcommittee thereof) of the Borrower to amend or modify in any way the
Management Incentive Program implemented pursuant to Section 3.01(m) or
approve or implement any other management incentive, bonus or
compensation program or similar program or arrangement other than the
Management Incentive Program implemented pursuant to Section 3.01(m).
SECTION 5.03. Reporting Requirements. So long as any Obligation of
any Loan Party under or in respect of any Loan Document shall remain unpaid, any
Secured Hedge Agreement shall be in effect, or any Lender Party shall have any
Term Advance Exposure or Working Capital Commitment hereunder, the Borrower will
furnish to the Agent and the Lender Parties:
(a) Default and Prepayment Notices. (i) As soon as possible
and in any event within two Business Days after the occurrence of each
Default or any event, development or occurrence reasonably likely to
have a Material Adverse Effect continuing on the date of such
statement, a statement of the chief financial officer of the Borrower
setting forth details of such Default, event, development or occurrence
and the action that the Borrower has taken and proposes to take with
respect thereto, and (ii) as soon as possible and in any event no later
than 11:00 A.M. (New York City time) at least three Business Days
before any prepayment of Term Advances is to be made by the Borrower
pursuant to Section 2.06 (the "PREPAYMENT DATE"), written notice of the
principal amount of such prepayment (the "PREPAYMENT AMOUNT") and the
applicable Prepayment Date. Each such notice (a "PREPAYMENT NOTICE")
shall be by telex or telecopier or otherwise as provided in Section
8.02.
(b) Monthly and Quarterly Financials; Weekly Cash Flow
Statements and Variance Reports. (i) Monthly Financials. As soon as
available and in any event within 30 days after the end of each month
(other than for each month on which a fiscal quarter is also ending, in
which event such financials shall be delivered within 45 days),
commencing with the month of March 2001, a Consolidated balance sheet
of the Borrower and its Subsidiaries, in each case as of the end of
such month, and Consolidated statements of operations and cash flows of
the Borrower and its Subsidiaries, in each case for the period
commencing at the end of the previous month and ending with the end of
such month, and Consolidated statements of operations and cash flows of
the Borrower and its Subsidiaries for the period commencing at the end
of the previous Fiscal Year and ending with the end of such month,
setting forth in each case in comparative form the corresponding
figures for the corresponding month and Fiscal Year-to-date period of
the preceding Fiscal Year and the corresponding figures for the
corresponding month and Fiscal Year-to-date period of the annual
forecast previously delivered pursuant to Section 5.03(d), all in
reasonable detail and duly certified by the chief financial officer of
the Borrower, together with (A) a certificate of said officer stating
that no Default has occurred and is continuing or, if a Default has
occurred and is continuing, a statement as to the nature thereof and
the action that the Borrower has taken and proposes to take with
respect thereto, (B) a schedule in form satisfactory to the Agent of
the computations used by the Borrower in determining compliance with
the covenants contained in Sections 5.04(a) through (f), and (C) in the
event of any change from GAAP in the generally
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accepted accounting principles used in the preparation of such
financial statements, a statement of reconciliation conforming such
financial statements to GAAP and (D) a brief narrative prepared by the
chief financial officer of the Borrower, outlining the factors
impacting the financial results of the Borrower and its Subsidiaries
for such month.
(ii) Quarterly Financials. As soon as available and in any
event within 45 days after the end of each Fiscal Quarter, commencing
with the Fiscal Quarter ended March 31, 2001, a Consolidated balance
sheet of the Borrower and its Subsidiaries, in each case as of the end
of such Fiscal Quarter, and Consolidated statements of operations and
cash flows of the Borrower and its Subsidiaries, in each case for the
period commencing at the end of the previous Fiscal Quarter and ending
with the end of such Fiscal Quarter, and Consolidated statements of
operations and cash flows of the Borrower and its Subsidiaries for the
period commencing at the end of the previous Fiscal Quarter and ending
with the end of such Fiscal Quarter, setting forth in each case in
comparative form the corresponding figures for the corresponding Fiscal
Quarter and Fiscal Year-to-date period of the preceding Fiscal Year and
the corresponding figures for the corresponding month and Fiscal
Year-to-date period of the annual forecast previously delivered
pursuant to Section 5.03(d), all in reasonable detail and duly
certified by the chief financial officer of the Borrower, together with
(A) a certificate of said officer stating that no Default has occurred
and is continuing or, if a Default has occurred and is continuing, a
statement as to the nature thereof and the action that the Borrower has
taken and proposes to take with respect thereto, (B) a schedule in form
satisfactory to the Agent of the computations used by the Borrower in
determining compliance with the covenants contained in Sections 5.04(a)
through (f), and (C) in the event of any change from GAAP in the
generally accepted accounting principles used in the preparation of
such financial statements, a statement of reconciliation conforming
such financial statements to GAAP.
(iii) Weekly Cash Flow Statements; Variance Reports. As soon
as available and in any event not later than the last Business Day of
each week after the Restatement Date, Consolidated cash flow statements
in form and substance satisfactory to the Agent reflecting on a
line-item basis cash receipts and disbursements for the Borrower and
its Subsidiaries for the preceding week, and a Variance Report.
(c) Annual Financials. As soon as available and in any event
within 90 days after the end of each Fiscal Year, a copy of the annual
audit report for such year for the Borrower and its Subsidiaries,
including therein a Consolidated balance sheet of the Borrower and its
Subsidiaries, as of the end of such Fiscal Year, and Consolidated
statements of operations and cash flows of the Borrower and its
Subsidiaries, in each case for the period commencing at the end of the
previous Fiscal Year and ending with the end of such Fiscal Year,
accompanied as to such Consolidated statements by an opinion of an
independent public accountant of recognized standing acceptable to the
Required Lenders, together with (i) a copy of any management letter
prepared by such accounting firm with respect to such Fiscal Year and
distributed to the Borrower, (ii) a certificate of the chief financial
officer of the Borrower stating that no Default has occurred and is
continuing or, if a Default has occurred and is continuing, a statement
as to the nature thereof and the action that the Borrower has taken and
proposes to take with respect
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thereto, (iii) in the event of any change from GAAP in the generally
accepted accounting principles used in the preparation of such
financial statements, a statement of reconciliation conforming such
financial statements to GAAP, (iv) a schedule in form satisfactory to
the event of the computations used by the Borrower in determining
compliance with the covenants contained in Sections 5.04(a) through
(f), and (v) commencing with delivery in respect of the Fiscal Year
ending on December 31, 2001 a schedule in form satisfactory to the
Agent of the computation used by the Borrower in determining Excess
Cash Flow for such previous Fiscal Year.
(d) Annual Forecasts. As soon as available and in any event no
later than 15 days prior to the end of each Fiscal Year, forecasts
prepared by management of the Borrower, in form satisfactory to the
Agent, of Consolidated balance sheets, statements of operations and
cash flows on a monthly basis for the Fiscal Year following such Fiscal
Year then ended.
(e) Litigation. Promptly after the commencement thereof,
notice of all actions, suits, investigations, litigation and
proceedings before any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign,
affecting any Loan Party or any of its Subsidiaries of the type
described in Section 4.01(j).
(f) Securities Reports. Promptly after the sending or filing
thereof, copies of all proxy statements, financial statements and
reports that any Loan Party or any of its Subsidiaries sends to its
stockholders, and copies of all regular, periodic and special reports,
and all registration statements, that any Loan Party or any of its
Subsidiaries files with the Securities and Exchange Commission or any
governmental authority that may be substituted therefor, or with any
national securities exchange.
(g) Creditor Reports. Promptly after the furnishing thereof
copies of any statement or report furnished to any other holder of the
Debt of any Loan Party or of any of its Subsidiaries (including,
without limitation, loan or credit or similar agreement) and not
otherwise required to be furnished to the Lender Parties pursuant to
any other clause of this Section 5.03.
(h) Agreement Notices. Promptly upon receipt thereof, copies
of all notices, requests and other documents received by any Loan Party
or any of its Subsidiaries under or pursuant to any Related Document or
indenture, loan or credit or similar agreement regarding or related to
any breach or default by any party thereto or other event that could
materially impair the value of the interests or the rights of any Loan
Party or any of its Subsidiaries or otherwise have a Material Adverse
Effect, and copies of any amendment, modification or waiver of any
provision of any Related Agreement or indenture, loan or credit or
similar agreement and, from time to time upon request by the Agent,
such information and reports regarding the Related Documents as the
Agent may reasonably request.
(i) ERISA. (i) ERISA Events and ERISA Reports. (A) Promptly
and in any event within 10 days after any Loan Party or any ERISA
Affiliate knows or has
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reason to know that any ERISA Event has occurred, a statement of the
chief financial officer of the Borrower describing such ERISA Event and
the action, if any, that such Loan Party or such ERISA Affiliate has
taken and proposes to take with respect thereto and (B) on the date any
records, documents or other information must be furnished to the PBGC
with respect to any Plan pursuant to Section 4010 of ERISA, a copy of
such records, documents and information.
(ii) Plan Terminations. Promptly and in any event within two
Business Days after receipt thereof by any Loan Party or any ERISA
Affiliate, copies of each notice from the PBGC stating its intention to
terminate any Plan or to have a trustee appointed to administer any
Plan.
(iii) Plan Annual Reports. Promptly and in any event within 10
days after the filing thereof with the Internal Revenue Service, copies
of each Schedule B (Actuarial Information) to the annual report (Form
5500 Series) with respect to each Plan.
(iv) Multiemployer Plan Notices. Promptly and in any event
within five Business Days after receipt thereof by any Loan Party or
any ERISA Affiliate from the sponsor of a Multiemployer Plan, copies of
each notice concerning (A) the position of Withdrawal Liability imposed
by any such Multiemployer Plan, (B) the reorganization or termination,
within the meaning of Title IV of ERISA, of any such Multiemployer Plan
or (C) the amount of liability incurred, or that may be incurred, by
such Loan Party or any ERISA Affiliate in connection with any event
described in clause (A) or (B).
(j) Environmental Conditions. Promptly after the assertion or
occurrence thereof, notice of any Environmental Action against or of
any noncompliance by any Loan Party or any of its Subsidiaries with any
Environmental Law or Environmental Permit that, and notice of any
Release required to be reported to any federal, state, local or foreign
governmental or regulatory agency under any applicable Environmental
Laws and of any remedial action taken by the Borrower or any of its
Subsidiaries or any other Person of which the Borrower has knowledge in
response to any Hazardous Materials or any Environmental Actions that,
could (i) reasonably be expected to have a Material Adverse Effect or
(ii) cause any property described in the mortgages to be subject to any
restrictions on ownership, occupancy use or transferability under any
Environmental Law.
(k) Leased Property. As soon as available and in any event
within 45 days after the end of each Fiscal Quarter, a report
supplementing Schedule 4.01(v) hereto, including an identification of
all leased property disposed of by the Borrower or any of its
Subsidiaries during such Fiscal Quarter, a list and description
(including the street address, county or other relevant jurisdiction,
state, record owner, book value thereof and in the case of leases of
property, lessor, lessee, expiration date and annual rental cost
thereof) of all real property acquired or leased during such Fiscal
Quarter and a description of such other changes in the information,
included in such Schedule as may be necessary for such Schedule to be
accurate and complete.
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(l) Insurance. As soon as available and in any event within 30
days after the end of each Fiscal Year, a report summarizing the
insurance coverage (specifying type, amount and carrier) in effect for
the Borrower and its Subsidiaries and containing such additional
information as any Lender Party (through the Agent) may reasonably
specify.
(m) Borrowing Base Certificate. As soon as available and in
any event within 15 days after the end of each month, a Borrowing Base
Certificate, as at the end of the immediately preceding month,
certified by the chief financial officer of the Borrower.
(n) Other Information. Such other information (i) delivered to
the shareholders of the Borrower or any of its Subsidiaries, including,
without limitation, proxy statements, financial statements and reports,
or required to be filed with the SEC or any national securities
exchange, including, without limitation, any Forms 10-K, 10-Q and 8-K,
in each case promptly after the sending or filing thereof and (ii)
respecting the business, condition (financial or otherwise),
operations, performance, properties or prospects of any Loan Party or
any of its Subsidiaries as any Lender Party (through the Agent) may
from time to time reasonably request.
(o) [Intentionally omitted.]
(p) [Intentionally omitted.]
(q) Supplemental Leased Real Property Reports. As soon as
available and in any event not later than 30 days after the end of each
Fiscal Quarter, commencing on June 30, 2001, a supplement to the Leased
Real Property Report in form and substance reasonably satisfactory to
the Agent and the Required Lenders.
(r) As soon as available and in any event within 15 days after
the end of each month, a schedule of all Accounts Payable, as at the
end of the immediately preceding month, certified by the chief
financial officer of the Borrower.
SECTION 5.04. Financial Covenants. So long as any Advance or any
other Obligation of any Loan Party under or in respect of any Loan Document
shall remain unpaid, any Secured Hedge Agreement shall be in effect or any
Lender Party shall have any Term Advance Exposure or any Working Capital
Commitment hereunder, the Borrower will:
(a) [Intentionally omitted.]
(b) [Intentionally omitted.]
(c) Interest Coverage Ratio. Maintain on a Consolidated basis
for itself and its Subsidiaries an Interest Coverage Ratio for each
Fiscal Quarter ending on or prior to June 30, 2002, determined as of
the last day of such Fiscal Quarter, of not less than the ratio set
forth below for such Fiscal Quarter:
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FISCAL QUARTER ENDING IN RATIO
------------------------ -----
June 2001 1.40 to 1.00
September 2001 2.00 to 1.00
December 2001 2.30 to 1.00
March 2002 1.55 to 1.00
(d) Capital Expenditures. Until such time as the Borrower
shall have delivered the Capital Expenditure Plan pursuant to Section
5.01(u), and the Agent and Required Lenders shall have amended this
Section 5.04(d) with revised Capital Expenditure limits, the Borrower
and its Subsidiaries may make additional Capital Expenditures for
necessary and routine purposes in an aggregate amount not to exceed
$500,000, in each case without the consent of the Agent or any Lender;
provided, however, that neither the Borrower nor any of its
Subsidiaries may make Capital Expenditures in excess of $250,000 in any
Fiscal Quarter. After the Capital Expenditure Plan has been approved
(either with respect to 2001 or 2002, as applicable), the Borrower and
its Subsidiaries may make Capital Expenditures in accordance with such
Capital Expenditure Plan.
(e) Minimum Cumulative EBITDA. For the period commencing on
the Restatement Date through December 31, 2001, maintain on a
Consolidated basis for the Borrower and its Subsidiaries as at the last
day of each fiscal month set forth below cumulative EBITDA for the
period (taken as a single accounting period) from January 1, 2001 to
such last day of such fiscal month in an aggregate amount not less than
the amount corresponding to such fiscal month below:
MINIMUM CUMULATIVE
FISCAL MONTH EBITDA
------------ ------
April 2001 $ 4,343,000
May 2001 $ 5,974,000
June 2001 $ 8,110,000
July 2001 $ 9,894,000
August 2001 $12,022,000
September 2001 $13,736,000
October 2001 $15,787,000
November 2001 $18,222,000
December 2001 $20,301,000
; provided that on and after January 1, 2002, Borrower shall maintain
on a Consolidated basis for Borrower and its Subsidiaries as of the
last day of each fiscal month, cumulative EBITDA for the Rolling Period
ending as of the last day of each such fiscal month in an aggregate
amount of not less than the correlative amount set forth for such month
on Schedule 5.04(e) hereto.
(f) Minimum Revenue Amount. For the period commencing on the
Restatement Date through December 31, 2001, maintain on a Consolidated
basis for itself
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and its Subsidiaries as at the last day of each fiscal month set forth
below a minimum gross revenue from the operations of their business in
the ordinary course of business (excluding any extraordinary,
non-recurring revenue) for the rolling three month period ending
thereon in an aggregate amount not less than the amount corresponding
to such fiscal month below:
MINIMUM REVENUE
FISCAL MONTH AMOUNT
------------ ------
April 2001 $52,326,000
May 2001 $54,567,000
June 2001 $56,109,000
July 2001 $57,668,000
August 2001 $58,671,000
September 2001 $57,759,000
October 2001 $58,600,000
November 2001 $58,638,000
December 2001 $59,492,000
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events
("EVENTS OF DEFAULT") shall occur and be continuing:
(a) (i) the Borrower shall fail to pay any principal of any
Advance when the same becomes due and payable, or (ii) the Borrower
shall fail to pay any interest on any Advance or any Loan Party shall
fail or make any other payment under any Loan Document within two
Business Days of when the same becomes due and payable; or
(b) any representation or warranty made by any Loan Party (or
any of its officers) under or in connection with any Loan Document
shall prove to have been incorrect in any material respect when made;
or
(c) any Loan Party shall fail to perform or observe any term,
covenant or agreement contained in Sections 2.14, 5.01(e), (f), (i),
(j), and (m), 5.02, 5.03 or 5.04; or
(d) any Loan Party shall fail to perform or observe any other
term, covenant or agreement contained in any Loan Document on its part
to be performed or observed if such failure shall remain unremedied for
15 days after the earlier of the date on which (A) a Responsible
Officer of the Borrower becomes aware of such failure or (B) written
notice thereof shall have been given to the Borrower by the Agent or
any Lender Party; or
(e) any Loan Party or any of its Subsidiaries shall fail to
pay any principal of, premium or interest on or any other amount
payable in respect of any Debt that is
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outstanding in a principal amount (or, in the case of any Hedge
Agreement, an Agreement Value) of at least $1,000,000 either
individually or in the aggregate (but excluding Debt outstanding
hereunder) of such Loan Party or such Subsidiary (as the case may be),
when the same becomes due and payable (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise), and such
failure shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such Debt; or any
other event shall occur or condition shall exist under any agreement or
instrument relating to any such Debt and shall continue after the
applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to accelerate,
or to permit the acceleration of, the maturity of such Debt or
otherwise to cause, or to permit the holder thereof to cause, such Debt
to mature, or any such Debt shall be declared to be due and payable or
required to be prepaid or redeemed (other than by a regularly scheduled
required prepayment or redemption), purchased or defeased, or an offer
to prepay, redeem, in each case prior to the stated purchase, or
defease such Debt shall be required to be made upon maturity thereof;
or
(f) any Loan Party or any of its Subsidiaries shall generally
not pay its debts as such debts become due, or shall admit in writing
its inability to pay its debts generally, or shall make a general
assignment for the benefit of creditors, or any proceeding shall be
instituted by or against any Loan Party or any of its Subsidiaries
seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment
of a receiver, trustee, or other similar official for it or for any
substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it) that is
being diligently contested by it in good faith, either such proceeding
shall remain undismissed or unstayed for a period of 30 days or any of
the actions sought in such proceeding (including, without limitation,
the entry of an order for relief against, or the appointment of a
receiver, trustee, custodian or other similar official for, it or any
substantial part of its property) shall occur, or any Loan Party or any
of its Subsidiaries shall take any corporate action to authorize any of
the actions set forth above in this subsection (f); or
(g) any judgment or order for the payment of money in excess
of $500,000 (to the extent not fully paid or discharged) shall be
rendered against any Loan Party or any of its Subsidiaries and either
(i) enforcement proceedings shall have been commenced by any creditor
upon such judgment or order or (ii) there shall be any period of 10
consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in
effect; or
(h) any non-monetary judgment or order shall be rendered
against any Loan Party or any of its Subsidiaries that could reasonably
be likely to have a Material Adverse Effect, and there shall be any
period of 10 consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or otherwise,
shall not be in effect; or
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(i) any provision of any Loan Document after delivery thereof,
pursuant to Section 3.01 or 5.01(j) or (k), shall for any reason cease
to be valid and binding on or enforceable against any Loan Party to it,
or any such Loan Party shall so state in writing; or
(j) any Collateral Document after delivery thereof, pursuant
to Section 3.01 or 5.01(j) or (k), shall for any reason (other than
pursuant to the terms thereof) cease to create a valid and perfected
first priority lien on and security interest in the Collateral
purported to be covered thereby, subject only to the Liens permitted
hereunder; or
(k) a Change of Control shall occur; or
(l) any ERISA Event shall have occurred with respect to a Plan
and the sum (determined as of the date of occurrence of such ERISA
Event) of the Insufficiency of such Plan and the Insufficiency of any
and all other Plans with respect to which an ERISA Event shall have
occurred and then exist (or the liability of the Loan Parties and the
ERISA Affiliates related to such ERISA Event) exceeds $500,000; or
(m) any Loan Party or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that it has incurred
Withdrawal Liability to such Multiemployer Plan in an amount that, when
aggregated with all other amounts required to be paid to Multiemployer
Plans by the Loan Parties and the ERISA Affiliates as Withdrawal
Liability (determined as of the date of such notification), exceeds
$500,000 or requires payments exceeding $100,000 per annum; or
(n) any Loan Party or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or is being terminated, within the meaning of
Title IV of ERISA, and as a result of such reorganization or
termination the aggregate annual contributions of the Loan Parties and
the ERISA Affiliates to all Multiemployer Plans that are then in
reorganization or being terminated have been or will be increased over
the amounts contributed to such Multiemployer Plans for the plan years
of such Multiemployer Plans immediately preceding the plan year in
which such reorganization or termination occurs by an amount exceeding
$100,000; or
(o) there shall occur any Material Adverse Change (as
determined based on the financial conditions of the Borrower and its
Subsidiaries as of the Restatement Date);
then, and in any such event, the Agent (i) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the Working
Capital Commitments of each Working Capital Lender and the obligation of each
Lender to make Advances to be terminated, whereupon the same shall forthwith
terminate, and (ii) shall at the request, or may with the consent, of the
Required Lenders, (A) by notice to the Borrower, declare the Advances, all
interest thereon and all other amounts payable under this Agreement, the Notes,
if any, and the other Loan Documents to be forthwith due and payable, whereupon
the Advances, all such
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interest and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Borrower; provided, however, that in the
event of an actual or deemed entry of an order for relief with respect to any
Loan Party or any of its Subsidiaries under the Bankruptcy Code, (x) the Working
Capital Commitments of each Working Capital Lender and the obligation of each
Lender to make Advances shall automatically be terminated and (y) the Advances,
all such interest and all such amounts shall automatically become and be due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Borrower.
SECTION 6.02. [Intentionally omitted.].
ARTICLE VII
THE AGENT
SECTION 7.01. Authorization and Action. Each Lender Party hereby
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers and discretion under this Agreement and the other Loan
Documents as are delegated to the Agent by the terms hereof and thereof,
together with such powers and discretion as are reasonably incidental thereto.
As to any matters not expressly provided for by the Loan Documents (including,
without limitation, enforcement or collection of the Debt resulting from the
Advances), the Agent shall not be required to exercise any discretion or take
any action but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions shall be binding upon all Lender
Parties and all holders of Notes; provided, however, that the Agent shall not be
required to take any action that exposes the Agent to personal liability or that
is contrary to this Agreement or applicable law. The Agent agrees to give to
each Lender Party prompt notice of each notice given to it by the Borrower
pursuant to the terms of this Agreement.
SECTION 7.02. Agent's Reliance, Etc. Neither the Agent nor any of
its directors, officers, agents or employees shall be liable for any action
taken or omitted to be taken by it or them under or in connection with the Loan
Documents, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the Agent: (a) may treat
the Lender that made any Advance as the holder of the Debt resulting therefrom
until the Agent receives and accepts an Assignment and Acceptance entered into
by such Lender, as assignor, and an Eligible Assignee, as assignee, as provided
in Section 8.07; (b) may consult with legal counsel (including counsel for any
Loan Party), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (c)
makes no warranty or representation to any Lender Party and shall not be
responsible to any Lender Party for any statements, warranties or
representations (whether written or oral) made in or in connection with the Loan
Documents; (d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of any
Loan Document on the part of any Loan Party or to inspect the property
(including the books and records) of any Loan Party; (e) shall not be
responsible to any Lender Party for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value
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of, or the perfection or priority of any lien or security interest created or
purported to be created under or in connection with, any Loan Document or any
other instrument or document furnished pursuant thereto; and (f) shall incur no
liability under or in respect of any Loan Document by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telegram,
telecopy or telex) believed by it to be genuine and signed or sent by the proper
party or parties.
SECTION 7.03. BNP and Affiliates. With respect to its Working
Capital Commitments, the Advances made by it and any Notes issued to it, BNP
shall have the same rights and powers under the Loan Documents as any other
Lender Party and may exercise the same as though it were not the Agent; and the
term "Lender Party" or "Lenders Parties" shall, unless otherwise expressly
indicated, include BNP in its individual capacity. BNP and its affiliates may
accept deposits from, lend money to, act as trustee under indentures of, accept
investment banking engagements from and generally engage in any kind of business
with, any Loan Party, any of its Subsidiaries and any Person who may do business
with or own securities of any Loan Party or any such Subsidiary, all as if BNP
were not the Agent and without any duty to account therefor to the Lender
Parties.
SECTION 7.04. Lender Party Credit Decision. Each Lender Party
acknowledges that it has, independently and without reliance upon the Agent or
any other Lender Party and based on the financial statements referred to in
Section 4.01 and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender Party also acknowledges that it will, independently and
without reliance upon the Agent or any other Lender Party and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement.
SECTION 7.05. Indemnification. (a) Each Lender Party severally
agrees to indemnify each Agent (to the extent not promptly reimbursed by the
Borrower) from and against such Lender Party's ratable share (determined as
provided below) of any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever (including, without limitation, reasonable fees and
expenses of counsel) that may be imposed on, incurred by or asserted against the
Agent in any way relating to or arising out of the Loan Documents or any action
taken or omitted by the Agent under the Loan Documents (collectively, the
"INDEMNIFIED COSTS"); provided, however, that no Lender Party shall be liable
for any portion of such Indemnified Costs resulting from the Agent's gross
negligence or willful misconduct as found in a final, non-appealable judgment by
a court of competent jurisdiction. Without limitation of the foregoing, each
Lender Party agrees to reimburse the Agent promptly upon demand for its ratable
share of any costs and expenses (including, without limitation, fees and
expenses of counsel) payable by the Borrower under Section 8.04, to the extent
that the Agent is not promptly reimbursed for such costs and expenses by the
Borrower. For purposes of this Section 7.05, the Lender Parties' respective
ratable shares of any amount shall be determined, at any time, according to the
sum of (a) the aggregate principal amount of the Advances outstanding at such
time and owing to the respective Lender Parties, and (b) their respective Unused
Working Capital Commitments at such time. In the case of any investigation,
litigation or proceeding giving rise to any Indemnified Costs, this Section 7.05
applies whether any such investigation, litigation or proceeding is brought by
the
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Agent, any Lender, any other Lender Party or a third party. The failure of any
Lender Party to reimburse the Agent promptly upon demand for its ratable share
of any amount required to be paid by the Lender Party to the Agent as provided
herein shall not relieve any other Lender Party of its obligation hereunder to
reimburse the Agent for its ratable share of such amount, but no Lender Party
shall be responsible for the failure of any other Lender Party to reimburse the
Agent for such other Lender Party's ratable share of such amount.
(b) Without prejudice to the survival of any other agreement
of any Lender Party hereunder, the agreement and obligations of each Lender
Party contained in this Section 7.05 shall survive the payment in full of
principal, interest and all other amounts payable hereunder and under the other
Loan Documents.
SECTION 7.06. Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Lender Parties and the Borrower, and may be
removed at any time with or without cause by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Agent or Agents, as the case may be, to any Lender Party or, if no
Default has occurred and is continuing, with the consent of the Borrower, which
consent shall not be unreasonably withheld, to any other Person meeting the
requirement specified in this Section 7.06. If no such successor Agent shall
have been so appointed by the Required Lenders, and shall have accepted such
appointment, within 30 days after such retiring Agent's giving of notice of
resignation or the Required Lenders' removal of such retiring Agent, then such
retiring Agent may, on behalf of the Lender Parties, appoint a successor Agent,
which shall be a commercial bank organized under the laws of the United States
or of any State thereof and having a combined capital and surplus of at least
$250,000,000. Upon the acceptance of any appointment as Agent, hereunder by a
successor Agent, and upon the execution and filing or recording of such
financing statements, or amendments thereto, and such amendments or supplements
to the mortgages, if any, and such other instruments or notices, as may be
necessary or desirable, or as the Required Lenders may request, in order to
continue the perfection of the Liens granted or purported to be granted by the
Collateral Documents, such successor Agent shall succeed to and become vested
with the rights, powers, discretion, privileges and duties of such retiring
Agent, and such retiring Agent shall be discharged from its duties and
obligations under the Loan Documents. If within 45 days after written notice is
given of such retiring Agent's resignation or removal under this Section 7.06 no
successor Agent, shall have been appointed and shall have accepted such
appointment, then on such 45th day (i) such retiring Agent's resignation or
removal shall become effective, (ii) such retiring Agent shall thereupon be
discharged from its duties and obligations under the Loan Documents and (iii)
the Required Lenders shall thereafter perform all duties of such retiring Agent
under the Loan Documents until such time, if any, as the Required Lenders
appoint a successor Agent, as provided above. After any retiring Agent's
resignation or removal hereunder as Agent, shall become effective, the
provisions of this Article VII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent, under this Agreement.
SECTION 7.07. [Intentionally Omitted].
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ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. (a) No amendment or waiver of any
provision of this Agreement or any Notes or any other Loan Document, nor consent
to any departure by the Borrower or any other Loan Party therefrom, shall in any
event be effective unless the same shall be in writing and signed (or, in the
case of the Collateral Documents, consented to) by the Required Lenders, and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given; provided, however, that (i) no
amendment, waiver or consent shall, unless in writing and signed by all of the
Lenders, do any of the following at any time: (A) waive any of the conditions
specified in Section 3.01 or, in the case of any Working Capital Borrowing,
Section 3.02, (B) change the percentage of (x) the Working Capital Commitments,
or (y) the aggregate unpaid principal amount of the Advances that, in each case,
shall be required for the Lenders or any of them to take any action hereunder,
(C) release all or substantially all of the Collateral in any transaction or
series of related transactions or permit the creation, incurrence, assumption or
existence of any Lien on all or substantially all of the Collateral in any
transaction or series of related transactions to secure any Obligations, other
than Obligations owing to the Secured Parties under the Loan Documents, (D)
amend this Section 8.01 or Section 5.01(v), or (E) release any Guarantor from
its obligations under the Loan Documents (except in connection with a
transaction permitted under Section 5.02(e)); and (ii) no amendment, waiver or
consent shall, unless in writing and signed by the Required Lenders and each
Lender that has any Term Advance Exposure or a Working Capital Commitment if
affected by such amendment, waiver or consent (A) increase the Working Capital
Commitments of such Lender or amend Section 2.13, (B) reduce the principal of,
or interest on, the Advances payable to such Lender or any fees or other amounts
payable hereunder to such Lender, (C) postpone any date fixed for any payment of
principal of, or interest on, the Advances payable to such Lender or any fees or
other amounts payable hereunder to such Lender or (D) change the order of
application of any prepayment set forth in Section 2.06 in any manner that
materially affects such Lender; provided further, however, that no amendment,
waiver or consent shall, unless in writing and signed by the Agent in addition
to the Lenders required above to take such action, affect the rights or duties
of the Agent under this Agreement or the other Loan Documents.
(b) Each Lender Party grants (x) to the Agent the right to
purchase all (but not less than all) of such Lender Party's Working Capital
Commitments and Advances owing to it and all of its rights and obligations
hereunder, including costs, if any, payable to such Lender under Section 8.04,
and under the other Loan Documents at a price equal to the aggregate amount of
outstanding Advances owed to such Lender Party (together with all accrued and
unpaid interest and fees owed to such Lender), and (y) so long as no Default has
occurred and is continuing, to the Borrower the right to cause an assignment of
all (but not less than all) of such Lender Party's Working Capital Commitments
and Advances owing to it and all of its rights and obligations hereunder and
under the other Loan Documents, which right may be exercised by the Agent or the
Borrower, as the case may be, if such Lender Party refuses to execute any
amendment, waiver or consent which requires the written consent of all the
Lenders and to which the Required Lenders, the Agent and the Borrower have
agreed. Each Lender Party agrees that if
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the Agent or the Borrower, as the case may be, exercises its option hereunder,
it shall promptly execute and deliver all agreements and documentation necessary
to effectuate such assignment as set forth in Section 8.07.
SECTION 8.02. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy or
telex communication) and mailed, telegraphed, telecopied, telexed or delivered
by an overnight courier of nationally recognized standing, if to the Borrower or
any other Loan Party, at the address of the Borrower at TeleSpectrum Worldwide
Inc., 000 Xxxxx Xxxxx Xxxx, Xxxx xx Xxxxxxx, XX 00000, Attention: Chief
Financial Officer, telecopier number (000) 000-0000; if to any Lender, at its
Domestic Lending Office specified opposite its name on Schedule I hereto; if to
any other Lender Party, at its Domestic Lending Office specified in the
Assignment and Acceptance pursuant to which it became a Lender Party; and if to
the Agent, at its address at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxx Xxxxxxxxx, telecopier number (000) 000-0000; or, as to each
party, at such other address as shall be designated by such party in a written
notice to the other parties. All such notices and communications shall, when
mailed, telegraphed, telecopied, telexed or sent by courier, be effective when
deposited in the mails, delivered to the telegraph company, transmitted by
telecopier, confirmed by telex answerback or delivered to the overnight courier,
respectively, except that notices and communications to the Agent pursuant to
Articles II, III or VIII shall not be effective until received by the Agent.
Delivery by telecopier of an executed counterpart of any amendment or waiver of
any provision of this Agreement or the Notes or of any Exhibit hereto to be
executed and delivered hereunder shall be effective as delivery of a manually
executed counterpart thereof.
SECTION 8.03. No Waiver; Remedies. No failure on the part of any
Lender Party or the Agent to exercise, and no delay in exercising, any right
hereunder or under any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. Costs and Expenses. (a) The Borrower agrees to pay on
demand (i) all costs and expenses of the Agent and each Lender in connection
with the negotiation, preparation, execution, delivery, administration,
modification and amendment of this Agreement and the Loan Documents (including,
without limitation, (A) all due diligence, collateral review, syndication,
transportation, computer, duplication, appraisal, audit, insurance, consultant,
search, filing and recording fees and expenses and (B) the reasonable fees and
expenses of counsel for the Agent and each Lender and financial advisers for the
Agent, with respect to advising the Agent as to its rights and responsibilities,
or the perfection, protection or preservation of rights or interests, under the
Loan Documents, with respect to negotiations with any Loan Party or with other
creditors of any Loan Party or any of its Subsidiaries arising out of any
Default or any events or circumstances that may give rise to a Default, and with
respect to presenting claims in or otherwise participating in or monitoring any
bankruptcy, insolvency or other similar proceeding involving creditors' rights
generally and any proceeding ancillary thereto), and (ii) all costs and expenses
of the Agent and Lender in connection with the enforcement of the Loan
Documents, whether in any action, suit or litigation, any bankruptcy, insolvency
or other similar proceeding affecting creditors' rights generally (including,
without
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limitation, the reasonable fees and expenses of counsel for the Agent and each
Lender Party and any financial advisor for the Agent and each Lender Party with
respect thereto).
(b) The Borrower agrees to indemnify and hold harmless the
Agent, each Lender Party and each of their Affiliates and their officers,
directors, employees, agents and advisors (each an "INDEMNIFIED PARTY") from and
against any and all Indemnified Costs that may be incurred by or asserted or
awarded against any Indemnified Party, in each case arising out of or in
connection with or by reason of the preparation for a defense of any
investigation, litigation or proceeding arising out of, related to or in
connection with (i) the Facilities, the actual or proposed use of the proceeds
of the Advances, the Loan Documents or any of the transactions contemplated
thereby, including, without limitation, any acquisition or proposed acquisition
by the Equity Investors or any of their Subsidiaries or Affiliates of all or any
portion of the stock or debt securities or substantially all the assets of the
Borrower or any of its Subsidiaries, or by the Borrower or any of its
Subsidiaries or Affiliates of all or any portion of the stock or debt securities
or substantially all the assets of IDRC or any of its Subsidiaries, or (ii) the
actual or alleged presence of Hazardous Materials on any property of any Loan
Party or any of its Subsidiaries or any Environmental Action relating in any way
to any Loan Party or any of its Subsidiaries, except to the extent such
Indemnified Costs are found in a final, non-appealable judgment by a court of
competent jurisdiction to have resulted from such Indemnified Party's gross
negligence or willful misconduct. In the case of an investigation, litigation or
other proceeding to which the indemnity in this Section 8.04(b) applies, such
indemnity shall be effective whether or not such investigation, litigation or
proceeding is brought by any Loan Party, its directors, shareholders or
creditors or an Indemnified Party or any Indemnified Party is otherwise a party
thereto and whether or not the transactions contemplated hereby are consummated.
The Borrower also agrees not to assert any claim against the Agent, any Lender
Party or any of their Affiliates, or any of their respective officers,
directors, employees, attorneys and agents, on any theory of liability, for
special, indirect, consequential or punitive damages arising out of or otherwise
relating to the Facilities, the actual or proposed use of the proceeds of the
Advances, the Loan Documents or any of the transactions contemplated thereby.
(c) [Intentionally Omitted.]
(d) If any Loan Party fails to pay when due any costs,
expenses or other amounts payable by it under any Loan Document, including,
without limitation, fees and expenses of counsel and indemnities, such amount
may be paid on behalf of such Loan Party by the Agent or any Lender Party, in
its sole discretion.
(e) Without prejudice to the survival of any other agreement
of any Loan Party hereunder or under any other Loan Document, the agreements and
obligations of the Borrower contained in Sections 2.10 and 2.12 and this Section
8.04 shall survive the payment in full of principal, interest and all other
amounts payable hereunder and under any of the other Loan Documents.
SECTION 8.05. Right of Set-off. Upon (a) the occurrence and during
the continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 6.01 to authorize the Agent to
declare the Advances due and payable pursuant to the provisions of Section 6.01,
each Lender Party and each of its respective
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Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and otherwise apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender Party or such
Affiliate to or for the credit or the account of the Borrower against any and
all of the Obligations of the Borrower now or hereafter existing under this
Agreement and the Note or Notes (if any) held by such Lender Party, irrespective
of whether such Lender Party shall have made any demand under this Agreement or
such Note or Notes and although such obligations may be unmatured. Each Lender
Party agrees promptly to notify the Borrower after any such set-off and
application; provided, however, that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of each Lender
Party and its respective Affiliates under this Section are in addition to other
rights and remedies (including, without limitation, other rights of set-off)
that such Lender Party and its respective Affiliates may have.
SECTION 8.06. Binding Effect. This Agreement shall become effective
when it shall have been executed by the Borrower and the Agent and when the
Agent shall have been notified by each Lender that such Lender has executed it
and thereafter shall be binding upon and inure to the benefit of the Borrower,
the Agent and each Lender Party and their respective successors and assigns,
except that the Borrower shall not have the right to assign its rights hereunder
or any interest herein without the prior written consent of the Lender Parties.
SECTION 8.07. Assignments and Participations. (a) Each Lender may
assign to one or more Eligible Assignees all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Working Capital Commitment, the Advances owing to it and any Note
or Notes held by it); provided, however, that (i) each such assignment shall be
of a uniform, and not a varying, percentage of all rights and obligations under
and in respect of one or more Facilities, (ii) except in the case of an
assignment to a Person that, immediately prior to such assignment, was a Lender,
an Affiliate of any Lender, or an Approved Fund of any Lender, or an assignment
of all of a Lender's rights and obligations under any Facility, the aggregate
amount of the Working Capital Commitments and Advances being assigned to such
Eligible Assignee pursuant to such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no event be
less than $2,000,000 and shall be in an integral multiple of $500,000, (iii)
each such assignment shall be to an Eligible Assignee, and (iv) the parties to
each such assignment shall execute and deliver to the Agent, for its acceptance
and recording in the Register, an Assignment and Acceptance, together with any
Note or Notes subject to such assignment and a processing and recordation fee of
$3,500.
(b) Upon such execution, delivery, acceptance and recording,
from and after the effective date specified in such Assignment and Acceptance,
(x) the assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations of a Lender
hereunder, and (y) the Lender assignor thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto).
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(c) By executing and delivering an Assignment and Acceptance,
each Lender Party assignor thereunder and each assignee thereunder confirm to
and agree with each other and the other parties thereto and hereto as follows:
(i) other than as provided in such Assignment and Acceptance, such assigning
Lender Party makes no representation or warranty and assumes no responsibility
with respect to any statements, warranties or representations made in, or in
connection with, this Agreement or any other Loan Document or the execution,
legality, validity, enforceability, efficiency or value of or genuineness of the
perfection or priority of any lien or security interest created or purported to
be created under or in connection with, this Agreement or any other Loan
Document or any other instrument or document furnished pursuant hereto or
thereto; (ii) such assigning Lender Party makes no representation or warranty
and assumes no responsibility with respect to the financial condition of the
Borrower or any other Loan Party or the performance or observance by any Loan
Party of any of its obligations under any Loan Document or any other instrument
or document furnished pursuant thereto; (iii) such assignee confirms that it has
received a copy of this Agreement, together with copies of the financial
statements referred to in Section 4.01 and such other documents and information
as it has deemed appropriate to make its own credit analysis and decision to
enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon any Agent, such assigning Lender Party
or any other Lender Party and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (v) such assignee confirms
that it is an Eligible Assignee; (vi) such assignee appoints and authorizes each
of the Agent to take such action as agent on its behalf and to exercise such
powers and discretion under the Loan Documents as are delegated to such Agent by
the terms hereof, together with such powers and discretion as are reasonably
incidental thereto; and (vii) such assignee agrees that it perform in accordance
with their terms all of the obligations which by the terms of this Agreement are
required to be performed by it as a Lender.
(d) The Agent shall maintain at its address referred to in
Section 8.02 a copy of each Assignment and Acceptance delivered to and accepted
by it, and a register for the recordation of the names and addresses of the
Lender Parties and the Working Capital Commitment of, and principal amount of
the Advances owing to, each Lender Party from time to time (the "REGISTER"). The
entries in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Borrower, the Agent and the Lender Parties may treat
each Person whose name is recorded in the Register as a Lender Party hereunder
for all purposes of this Agreement. The Register shall be available for
inspection by the Borrower or any Lender Party at any reasonable time and from
time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender Party and an assignee, together with any Note or Notes
requested by the Assignee subject to such assignment, the Agent shall, if such
Assignment and Acceptance has been completed and is in substantially the form of
Exhibit C hereto, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the Borrower.
(f) Each Lender Party may sell participations in or to all or
a portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Working Capital Commitments, the Advances
owing to it, and any Note or Notes held by it), to
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any Person other than any Loan Party or any of its Subsidiaries or Affiliates;
provided, however, that (i) such Lender Party's obligations under this Agreement
(including, without limitation, its Working Capital Commitments) shall remain
unchanged, (ii) such Lender Party shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) such Lender Party
shall remain the holder of such Advances and any such Note for all purposes of
this Agreement, (iv) the Borrower, the Agent and the other Lender Parties shall
continue to deal solely and directly with such Lender Party, in connection with
such Lender Party's rights and obligations under this Agreement and (v) no
participant under any such participation shall have any right to approve any
amendment or waiver of any provision of any Loan Document, or any consent to any
departure by any Loan Party therefrom, except to the extent that such amendment,
waiver or consent would reduce the principal of, or interest on, the Advances or
any fees or other amounts payable hereunder, in each case to the extent subject
to such participation, postpone any date fixed for any payment of principal of,
or interest on, the Advances or any fees or other amounts payable hereunder, in
each case to the extent subject to such participation, or release all or
substantially all of the Collateral.
(g) Any Lender Party may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower or any Loan Party
furnished to such Lender Party by or on behalf of the Borrower.
(h) Notwithstanding any other provision set forth in this
Agreement, any Lender Party may at any time create a security, interest in all
or any portion of its rights under this Agreement (including, without
limitation, the Advances owing to it and any Note or Notes held by it) in favor
of any Federal Reserve Bank in accordance with Regulation A of the Board of
Governors of the Federal Reserve System or, if such Lender Party is an Approved
Fund, to the trustee of such Approved Fund solely to the extent required by, and
in accordance with, the indenture and other constating documents of such
Approved Fund.
SECTION 8.08. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 8.09. [Intentionally Omitted].
SECTION 8.10. Jurisdiction, Etc. (a) Each of the parties hereto
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any New York State court or federal court of
the United States of America sitting in New York City, and any appellate court
from any jurisdiction thereof, in any action or proceeding rising out of or
relating to this Agreement or any of the other Loan Documents to which it is a
party, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in any such
New York State court or, to the extent permitted by law, in such federal court.
Each of the parties hereto agrees that a final Judgment in
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any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions, by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that any party may otherwise
have to bring any action or proceeding relating to this Agreement or any of the
other Loan Documents in the courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this
Agreement or any of the other Loan Documents to which it is a party in
any New York State or federal court. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
SECTION 8.11. Governing Law. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 8.12. Judgment. (a) Rate of Exchange. If, for the purpose of
obtaining judgment in any court, it is necessary to convert a sum due hereunder
or under any other Loan Document in another currency into Dollars, the parties
hereto agree, to the fullest extent that they may effectively do so, that the
rate of exchange used shall be that at which, in accordance with normal banking
procedures, the Agent could purchase such other currency with Dollars in New
York City, New York, at the close of business on the Business Day immediately
preceding the day on which final judgment is given, together with any premiums
and costs of exchange payable in connection with such purchase.
(b) Currency Indemnity. The obligation of the Borrower in
respect of any sum due from it to the Agent or any Lender hereunder or
under any other Loan Document shall, notwithstanding any judgment in a
currency other than Dollars, be discharged only to the extent that on
the Business Day next succeeding receipt by the Agent or such Lender of
any sum adjudged to be so due in such other currency, the Agent or such
Lender, as the case may be, may, in accordance with normal banking
procedures, purchase Dollars with such other currency. If the Dollars
so purchased are less than the sum originally due to the Agent or such
Lender in Dollars, the Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Agent or such
Lender against such loss, and if the Dollars so purchased exceed the
sum originally due to the Agent or any Lender in Dollars, the Agent or
such Lender agrees to remit to such Borrower such excess.
SECTION 8.13. Waiver of Jury Trial. Each of the Loan Parties, the
Agent and the Lender Parties irrevocably waives all right to trial by Jury in
any action, proceeding or counterclaim (whether based on contract, tort or
otherwise) arising out of or relating to any of the Loan Documents, the Advances
or the actions of the Agent or any Lender Party in the negotiation,
administration, performance or enforcement thereof by their respective officers
thereunto duly authorized, as of the date first above written.
SECTION 8.14. Confidentiality. The Agent and each Lender shall hold
all non-public information obtained pursuant to the requirements of this
Agreement which has been
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identified as confidential by the Borrower in accordance with such Lender's
customary procedures for handling confidential information of this nature and in
accordance with safe and sound banking practices, it being understood and agreed
by the Borrower that in any event a Lender may make disclosures to Affiliates of
such Lender or disclosures reasonably required by any bona fide assignee,
transferee or participant or prospective assignee, transferee or participant in
connection with the contemplated assignment or transfer by such Lender of any
Loans or any participations therein or disclosures required or requested by any
governmental agency or representative thereof or pursuant to legal process;
provided that, unless specifically prohibited by applicable law or court order,
each Lender shall notify the Borrower of any request by any governmental agency
or representative thereof (other than any such request in connection with any
examination of the financial condition of such Lender by such governmental
agency) for disclosure of any such non-public information prior to disclosure of
such information; and provided, further that in no event shall any Lender be
obligated or required to return any materials furnished by the Borrower or any
of its Subsidiaries.
SECTION 8.15. Release and Waiver. The Borrower and each of its
Subsidiaries (collectively, the "RELEASORS") hereby releases, remises, acquits
and forever discharges Agent, each Lender and each of their respective
employees, agents representatives, consultants, attorneys, fiduciaries,
servants, officers, directors, partners, predecessors, successors and assigns,
subsidiary corporations, parent corporations, related corporate divisions,
participants and assigns (all of the foregoing hereinafter called the "RELEASED
PARTIES"), from any and all actions and causes of action, judgments, executions,
suits, debts, claims, demands, liabilities, obligations, setoffs, recoupments,
counterclaims, defenses, damages and expenses of any and every character, known
or unknown, suspected or unsuspected, direct and/or indirect, at law or in
equity, of whatsoever kind or nature, whether heretofore or hereafter arising,
for or because of any matter or things done, omitted or suffered to be done by
any of the Released Parties prior to and including the date of execution hereof,
and in any way directly or indirectly arising out of or in any way connected to
this Agreement, the Existing Credit Agreement, the other Loan Documents or any
of the Related Documents (all of the foregoing hereinafter called the "RELEASED
MATTERS"). Each Releasor acknowledges that the agreements in this Section 8.15
are intended to be in full satisfaction of all or any alleged injuries or
damages arising in connection with the Released Matters and constitute a
complete waiver of any right of setoff or recoupment, counterclaim or defense of
any nature whatsoever which arose prior to the date hereof to payment or
performance of the Obligations. Each Releasor represents and warrants that it
has no knowledge of any claim by it against the Released Parties or of any
facts, or acts or omissions of the Released Parties which on the date hereof
would be the basis of a claim by the Releasors against the Released Parties
which is not released hereby. Each Releasor represents and warrants that it has
not purported to transfer, assign, pledge or otherwise convey any of its right,
title or interest in any Released Matter to any other person or entity and that
the foregoing constitutes a full and complete release of all Released Matters.
Releasors have granted this release freely, and voluntarily and without duress.
The Borrower and its Subsidiaries for itself and any successor
(including any trustee or debtor in possession in a case under the Bankruptcy
Code) hereby knowingly, voluntarily, intentionally and irrevocably waive any
right which it may have upon the
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commencement of a case under the Bankruptcy Code to object to or otherwise seek
to disallow or subordinate any of the Obligations of any Loan Party under the
Loan Documents.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
TELESPECTRUM WORLDWIDE INC.
By:
---------------------------------
Name:
Title:
X-0
00
XXX XXXXXXX (f/k/a BANQUE NATIONALE DE
PARIS), as Administrative Agent,
Collateral Agent and a Lender
By:
---------------------------------
Name:
Title:
By:
---------------------------------
Name:
Title:
S-2
96
BANK OF AMERICA, N.A.
as a Lender
By:
---------------------------------
Name:
Title:
S-3
97
FLEET NATIONAL BANK (f/k/a BANKBOSTON,
N.A.), as a Lender
By:
---------------------------------
Name:
Title:
X-0
00
XXX XXXXXX PRIME RATE INCOME TRUST, as a
Lender
By: Xxx Xxxxxx Investment Advisory Corp.
By:
---------------------------------
Name:
Title:
X-0
00
XXX XXXXXX SENIOR FLOATING RATE FUND, as
a Lender
By: Xxx Xxxxxx Investment Advisory Corp.
By:
---------------------------------
Name:
Title:
X-0
000
XXX XXXXXX SENIOR INCOME TRUST, as a
Lender
By: Xxx Xxxxxx Investment Advisory Corp.
By:
---------------------------------
Name:
Title:
S-7
101
IBJ WHITEHALL BANK & TRUST COMPANY, as a
Lender
By:
---------------------------------
Name:
Title:
S-8
102
XXXXX FARGO BANK, N.A., as a Lender
By:
---------------------------------
Name:
Title:
S-9
103
FIRST SOURCE LOAN OBLIGATIONS TRUST, as a
Lender
By: First Source Financial, Inc., its
Servicer and Administrator
By:
---------------------------------
Name:
Title:
S-10
104
KZH ING-1 LLC, as a Lender
By:
---------------------------------
Name:
Title:
S-11
105
KZH ING-2 LLC, as a Lender
By:
---------------------------------
Name:
Title:
S-12
106
KZH ING-3 LLC, as a Lender
By:
---------------------------------
Name:
Title:
S-13
107
ARCHIMEDES FUNDING, L.L.C. , as a Lender
By: ING Capital Advisors, LLC,
as Collateral Manager
By:
---------------------------------
Name:
Title:
S-14
108
ARCHIMEDES FUNDING II, L.L.C., as a Lender
By: ING Capital Advisors, LLC,
as Collateral Manager
By:
---------------------------------
Name:
Title:
S-15
109
FIRST DOMINION FUNDING III, as a Lender
By:
---------------------------------
Name:
Title:
S-16
