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Exhibit 10.79
CREDIT AGREEMENT
by and among
VIDEO SERVICES CORPORATION,
VSC MAL CORP.,
THE LENDERS PARTY HERETO,
and
KEYBANK NATIONAL ASSOCIATION,
as the Issuer and as the Agent
--------------------------
$50,000,000
--------------------------
Dated as of August 27, 1997
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TABLE OF CONTENTS
1. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION............................1
1.1 Definitions....................................................1
1.2 Principles of Construction....................................19
2. AMOUNT AND TERMS OF LOANS............................................20
2.1 Loans.........................................................20
2.2 Notes.........................................................21
2.3 Notice of Borrowing...........................................22
2.4 Use of Proceeds...............................................22
2.5 Termination or Reduction of Commitments.......................23
2.6 Amortization of the Term Loans................................23
2.7 Prepayments of the Loans......................................24
2.8 Letter of Credit Sub-facility.................................26
2.9 Letter of Credit Participation................................27
2.10 Absolute Obligation with respect to Letter of Credit Payments.28
3. PROCEEDS, PAYMENTS, CONVERSIONS, INTEREST, YIELD PROTECTION
AND FEES.............................................................28
3.1 Disbursement of the Proceeds of the Loans.....................28
3.2 Payments......................................................29
3.3 Conversions; Other Matters....................................29
3.4 Interest Rates and Payment Dates..............................31
3.5 Indemnification for Loss......................................33
3.6 Reimbursement for Costs, Etc..................................33
3.7 Illegality of Funding.........................................34
3.8 Option to Fund; Substituted Interest Rate.....................34
3.9 Certificates of Payment and Reimbursement.....................35
3.10 Taxes; Net Payments...........................................36
3.11 Commitment Fees...............................................37
3.12 Facility Fee..................................................37
3.13 Letter of Credit Fee..........................................37
3.14 Replacement of Lenders........................................38
3.15 Change of Lending Office......................................39
4. REPRESENTATIONS AND WARRANTIES.......................................39
4.1 Subsidiaries; Capital Stock...................................39
4.2 Existence and Power...........................................39
4.3 Authority.....................................................40
4.4 Binding Agreement.............................................40
4.5 Litigation....................................................40
4.6 No Conflicting Agreements.....................................40
4.7 Taxes.........................................................41
4.8 Compliance with Applicable Laws; Filings......................41
4.9 Governmental Regulations......................................42
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4.10 Federal Reserve Regulations...................................42
4.11 No Misrepresentation..........................................42
4.12 Plans.........................................................42
4.13 Environmental Matters.........................................43
4.14 Financial Statements..........................................43
4.15 Combined and Pro-forma Financial Statements...................44
4.16 Financial Condition...........................................45
4.17 Merger Documents..............................................45
5. CONDITIONS OF CREDIT - THE FIRST BORROWING DATE......................45
5.1 Evidence of Partnership and Corporate Action..................45
5.2 Notes.........................................................45
5.3 Search Reports................................................46
5.4 Security Agreement............................................46
5.5 Guaranty......................................................46
5.6 Merger........................................................47
5.7 Drop Down.....................................................47
5.8 Mortgage and Assignment of Leases.............................47
5.9 Title Search and Title Policy.................................47
5.10 Other Real Estate Matters.....................................47
5.11 Approvals.....................................................50
5.12 Litigation....................................................50
5.13 Insurance.....................................................50
5.14 Approval of Special Counsel...................................50
5.15 Opinions of Counsel to the Borrower and the Subsidiaries......50
5.16 Payment of Fees...............................................51
5.17 CFO's Certificate.............................................51
5.18 Other Documents...............................................51
6. CONDITIONS OF LENDING - ALL LOANS AND LETTERS OF CREDIT..............51
6.1 Compliance....................................................51
6.2 Loan Closings.................................................52
7. AFFIRMATIVE AND FINANCIAL COVENANTS..................................52
7.1 Legal Existence...............................................52
7.2 Taxes.........................................................52
7.3 Insurance.....................................................52
7.4 Performance of Obligations....................................54
7.5 Condition of Property.........................................54
7.6 Observance of Legal Requirements..............................54
7.7 Financial Statements and Other Information....................54
7.8 Inspection....................................................58
7.9 Authorizations................................................58
7.10 Subsidiaries..................................................58
7.11 Leverage Ratio................................................58
7.12 Fixed Charge Coverage Ratio...................................59
7.13 Minimum Net Worth.............................................59
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7.14 Additional Subsidiaries.......................................59
8. NEGATIVE COVENANTS...................................................60
8.1 Indebtedness..................................................60
8.2 Liens.........................................................61
8.3 Dispositions..................................................62
8.4 Mergers and Acquisitions......................................62
8.5 Investments...................................................63
8.6 Capital Expenditures..........................................64
8.7 Restricted Payments...........................................64
8.8 Limitation on Subsidiaries....................................65
8.9 Line of Business..............................................65
8.10 Amendment of Certain Documents and Agreements.................65
8.11 Transactions with Affiliates..................................65
8.12 Compliance with ERISA.........................................65
8.13 Payments and Prepayments of Indebtedness......................66
9. DEFAULT..............................................................66
9.1 Events of Default.............................................66
9.2 Contract Remedies.............................................68
10. THE AGENT............................................................69
10.1 Appointment...................................................69
10.2 Delegation of Duties..........................................69
10.3 Exculpatory Provisions........................................70
10.4 Reliance by Agent.............................................70
10.5 Notice of Default.............................................71
10.6 Non-Reliance..................................................71
10.7 Indemnification...............................................72
10.8 Agent in Its Individual Capacity..............................72
10.9 Successor Agent...............................................72
11. OTHER PROVISIONS.....................................................73
11.1 Amendments, Waivers, Etc......................................73
11.2 Notices.......................................................74
11.3 No Waiver; Cumulative Remedies................................75
11.4 Survival of Representations and Warranties....................76
11.5 Payment of Expenses and Taxes.................................76
11.6 Lending Offices...............................................76
11.7 Successors and Assigns........................................77
11.8 Counterparts..................................................78
11.9 Set-off and Sharing of Payments...............................79
11.10 Indemnity.....................................................80
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11.11 Governing Law.................................................81
11.12 Severability..................................................81
11.13 Integration...................................................81
11.14 Acknowledgments...............................................81
11.15 Consent to Jurisdiction.......................................81
11.16 Service of Process............................................82
11.17 No Limitation on Service or Suit..............................82
11.18 Waiver of Trial by Jury.......................................82
11.19 Effective Date................................................82
11.20 Treatment of Certain Information..............................83
11.21 Joint and Several Obligations.................................83
11.22 Limitations on Liability......................................83
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Credit Agreement, dated as of August 27, 1997, by and among Video Services
Corporation, a Delaware corporation formerly known as International Post Limited
(the "Borrower"), VSC MAL Corp., a Delaware corporation (the "Debtor"), the
several banks and other financial institutions from time to time parties to this
Agreement (each a "Lender" and, collectively, the "Lenders"), and KeyBank
National Association ("KBNA"), as agent for the Lenders (in such capacity, the
"Agent") and as the Issuer (as such term is defined below).
1. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION
1.1 Definitions
(a) For purposes of Sections 4.16 and 5.17, "debt" means any
liability on a claim, and "claim" means any (i) right to payment, whether such a
right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured, or
unsecured, or (ii) right to an equitable remedy for breach of performance if
such breach gives rise to a right to payment, whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured,
disputed, undisputed, secured, unsecured, liquidated or unliquidated.
(b) Unless otherwise provided herein, when used herein, each of the
following capitalized terms shall have the meaning ascribed thereto:
"ABR Advances": Revolving Credit ABR Advances and Term Loan ABR Advances.
"Accountants": Ernst & Young, LLP or any other "big six" accounting firm,
or such other firm of independent certified public accountants of recognized
national standing as shall be selected by the Borrower and reasonably
satisfactory to the Agent.
"Accumulated Funding Deficiency": as defined in Section 302 of ERISA.
"Acquisition": with respect to any Person, the purchase or other
acquisition by such Person, by any means whatsoever (including by devise,
bequest, gift, through a dividend or otherwise), of (a) Stock of, or other
equity securities of, any other Person if, immediately thereafter, such other
Person would be either a consolidated subsidiary of such Person or otherwise
under the control of such Person, (b) any business, going concern or division or
segment thereof, or (c) the Property of any other Person other than in the
ordinary course of business, provided, however, that no acquisition of
substantially all of the assets of such other Person shall be deemed to be in
the ordinary course of business.
"Additional Permitted Acquisitions": as defined in Section 8.4(e).
"Adjusted EBITDA": with respect to any fiscal period, EBITDA in respect of
such period minus all Capital Expenditures made by the Borrower and the
Subsidiaries on a
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Consolidated basis during such period. Notwithstanding anything in this
definition to the contrary, with respect to the fiscal period ending September
30, 1997, there shall be subtracted, without duplication, from "Adjusted EBITDA"
for such period the following: with respect to Old IPL and its consolidated
subsidiaries for the period from July 1, 1997, through the day immediately
preceding the Merger, all Capital Expenditures made during such period
determined on a consolidated basis.
"Advance": an ABR Advance or a Eurodollar Advance, as the case may be.
"Affected Advance": as defined in Section 3.8(b).
"Affiliate": with respect to any Person at any time and from time to time,
any other Person (other than a consolidated subsidiary of such Person) which, at
such time (a) controls such Person, or (b) is under common control with such
Person. The term "control", as used in this definition with respect to any
Person, means the power, whether direct, or indirect through one or more
intermediaries, to direct or cause the direction of the management and policies
of such Person, whether through the ownership of voting securities or other
interests, by contract or otherwise.
"Affiliate Obligations": as of any date and with respect to the Borrower
and the Subsidiaries on a Consolidated basis, all obligations (of the type
required to be reflected as a liability on the Consolidated balance sheet of the
Borrower and the Subsidiaries in accordance with GAAP) owed to any Affiliate of
the Borrower, other than an employee of the Borrower or any Subsidiary.
"Aggregate Commitment Amount": at any date, the sum of the Aggregate
Revolving Credit Commitment Amount and the Aggregate Term Loan Commitment
Amount.
"Aggregate Revolving Credit Commitment Amount": at any date, the sum of
the Revolving Credit Commitment Amounts of all Lenders on such date.
"Aggregate Revolving Credit Exposure": at any date, the sum of the
Revolving Credit Exposures of all Lenders on such date.
"Agreement": this Credit Agreement, as the same may be amended,
supplemented or otherwise modified from time to time.
"Allowable Amount": as defined in Section 8.6.
"Alternate Base Rate": for any day, a rate per annum equal to the greater
of (a) the KBNA Rate in effect on such day, or (b) 0.50% plus the Federal Funds
Effective Rate (rounded, if necessary, to the nearest 1/100th of 1% or, if there
is no nearest 1/100 of 1%, then to the next higher 1/100 of 1%) in effect on
such day.
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"Applicable Margin":
(a) During the period commencing on the Effective Date and ending on
the last day of the month in which the Compliance Certificate in respect of the
fiscal period ending June 30, 1998 shall have been delivered to the Agent in
accordance with Section 7.7(d), (i) with respect to Revolving Credit Eurodollar
Advances, Term Loan Eurodollar Advances and the Letter of Credit Fee, 1.750%,
and (ii) with respect to the Commitment Fee, 0.375%.
(b) On and after the first day of the month following the date upon
which the Compliance Certificate in respect of the fiscal period ending June 30,
1998 shall have been delivered to the Agent in accordance with Section 7.7(d),
(i) with respect to Revolving Credit Eurodollar Advances and Term Loan
Eurodollar Advances, the applicable margin set forth below under the heading
"Eurodollar", (ii) with respect to the Commitment Fee, the applicable margin set
forth below under the heading "Commitment Fee", and (iii) with respect to the
Letter of Credit Fee, the applicable margin set forth below under the heading
"LC Fee":
Whenever the Commitment
Leverage Ratio is: Eurodollar Fee LC Fee
------------------ ---------- ---------- ------
> 2.50 1.750% 0.375% 1.750%
> 2.00 < 2.50 1.500% 0.375% 1.500%
- -
> 1.25 < 2.00 1.250% 0.250% 1.250%
- -
< 1.25 1.000% 0.250% 1.000%
(c) Except as provided in clause (a) above, changes in the
Applicable Margin resulting from a change in the Leverage Ratio shall become
effective on the first day of the month following the date upon which the
Compliance Certificate with respect to each fiscal year end shall have been
delivered pursuant to Section 7.7(d).
(d) Notwithstanding anything to the contrary contained in this
definition, during the continuance of a Default under Section 7.7(d), the
Leverage Ratio shall conclusively be deemed to be in excess of 2.50.
"Approved Subordinated Debt": up to $7,800,000 of Indebtedness of the
Borrower to the extent it is subordinated to the Loan Party Obligations on the
terms, and subject to the conditions, set forth in the Approved Subordinated
Debt Documents.
"Approved Subordinated Debt Documents": collectively, (a) the 4%
Convertible Subordinated Note, dated May 4, 1995, made by the Borrower, payable
to the order of XX
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Xxxxxxxxxxx, x Xxx Xxxx general partnership, and in the principal sum of
$2,914,650, (b) the 4% Convertible Subordinated Note, dated May 4, 1995, made by
the Borrower, payable to the order of Xxxx Xxxxxx, and in the principal sum of
$323,850, (c) the 4% Convertible Subordinated Note, dated May 4, 1995, made by
the Borrower, payable to the order of ET Partnership, a New York general
partnership, and in the principal sum of $2,540,000, (d) the 4% Convertible
Subordinated Note, dated May 4, 1995, made by the Borrower, payable to the order
of Xxxxxxx Xxxxxx, in the principal sum of $571,500, and (e) any other
promissory notes provided that (i) each was issued by the Borrower in lieu of
the payment of cash to one or more of the holders of the Approved Subordinated
Debt Documents, and (ii) each is subordinated to the obligations of the Borrower
hereunder upon the same terms and conditions as such convertible subordinated
notes.
"Assignment": as defined in Section 11.7(c).
"Assignment and Acceptance Agreement": an assignment and acceptance
agreement executed by an assignor and an assignee pursuant to which, subject to
the terms and conditions hereof, the assignor assigns to the assignee all or any
portion of such assignor's Loans, Notes and Commitments, substantially in the
form of Exhibit F.
"Assignment Fee": as defined in Section 11.7(c).
"Assignment of Leases": that certain Assignment of Leases and Rents dated
as of even date herewith by the Debtor in favor of the Lender covering the
Mortgaged Premises, substantially in the form of Exhibit L.
"Borrowing Date": as defined in Section 2.3.
"Borrowing Request": a request for Loans in the form of Exhibit C.
"Capital Expenditures": shall mean, with respect to any Person for any
period, the aggregate of all expenditures incurred by such Person during that
period which, in accordance with GAAP, are or should be included in "additions
to property, plant or equipment" or similar items reflected in the statement of
cash flows of such Person (other than the portion of the purchase price of any
Operating Entity which, under GAAP, would be recorded as such additions).
"CFO": the chief financial officer of the Borrower or such other officer
thereof as shall be reasonably satisfactory to the Agent.
"Code": the Internal Revenue Code of 1986, as the same may be amended, or
any successor thereto, and the rules and regulations issued thereunder, as from
time to time in effect.
"Cognitive": as defined in Section 8.7.
"Collateral": the assets and other property in which a security interest
is granted under the Collateral Documents.
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"Collateral Documents": collectively, (a) upon the execution and delivery
thereof: the Security Agreement, the Guaranty, the Consolidation Agreement, the
Mortgage, the Gap Mortgage, the Assignment of Leases, and (b) all documents
executed or delivered in connection with any of the foregoing.
"Commitment Amount": with respect to any Lender, its Revolving Credit
Commitment Amount or Term Loan Commitment Amount, as the case may be.
"Commitment Fee": as defined in Section 3.11.
"Commitment Percentage": as of any date and with respect to any Lender, a
fraction the numerator of which is the sum of such Lender's Revolving Credit
Commitment Amount and Term Loan Commitment Amount on such date, and the
denominator of which is the Aggregate Commitment Amount on such date.
"Commitments": with respect to any Lender, its Revolving Credit Commitment
and Term Loan Commitment.
"Company": the Borrower or the Debtor, as the case may be.
"Compensatory Interest Payment": as defined in Section 3.4(c).
"Compliance Certificate": a certificate in the form of Exhibit H.
"Consolidated": the Borrower and the Subsidiaries on a consolidated basis
in accordance with GAAP.
"Consolidating Accounting Principles": with respect to the financial
recordkeeping and reporting of the Borrower, GAAP consistently applied, but
excluding any GAAP which would require or permit the consolidation of financial
statement information.
"Consolidation Agreement": that certain Consolidation, Modification and
Extension Agreement dated as of even date herewith by and between the Debtor and
the Agent which consolidates the Liens of, and modifies the terms, and extends
the maturity date of, the Existing Mortgage and the Gap Mortgage, substantially
in the form of Exhibit G.
"Contingent Obligation": as to any Person (the "secondary obligor"), any
obligation of such secondary obligor (a) guaranteeing or in effect guaranteeing
any return on any Investment made by another Person, or (b) guaranteeing or in
effect guaranteeing any Indebtedness, lease, dividend or other obligation
("primary obligations") of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, including any obligation of such
secondary obligor, 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
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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,
securities or services primarily for the purpose of assuring the beneficiary of
any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation, (iv) otherwise to assure or hold harmless
the beneficiary of such primary obligation against loss in respect thereof, and
(v) in respect of the Indebtedness of any partnership in which such secondary
obligor is a general partner, except to the extent that such Indebtedness of
such partnership is nonrecourse to such secondary obligor and its separate
Property; provided, however, that the term "Contingent Obligation" shall not
include the indorsement of instruments for deposit or collection in the ordinary
course of business.
"Control Person": as defined in Section 3.6.
"Default": any of the events specified in Section 9.1, whether or not any
requirement for the giving of notice, the lapse of time, or both, or any other
condition, has been satisfied.
"Disposition": with respect to any Person, any sale, assignment, transfer
or other disposition by such Person, by any means, of (a) the Stock of, or other
equity interests of, any other Person, (b) any business, going concern or
division or segment thereof, or (c) any other Property of such Person (other
than in the ordinary course of business, it being understood that the
disposition of equipment that is obsolete, not "state of the art" or otherwise
no longer useful in a Person's business will constitute a disposition in the
ordinary course of business, subject to the limitations contained in the
following proviso), provided, however, that no such sale, assignment, transfer
or other disposition of Property (other than inventory, except to the extent
subject to a bulk sale) shall be deemed to be in the ordinary course of business
(i) if the fair market value thereof is in excess of $1,000,000, or (ii) to the
extent that the fair market value thereof, when aggregated with all other sales,
assignments, transfers and other dispositions (other than those contemplated by
Section 8.3(a), (b) or (c)) made by such Person within the same fiscal year,
exceeds $2,500,000, and then only to the extent of such excess, if any, or (ii)
it is the sale, assignment, transfer or disposition of (1) all or substantially
all of the Property of such Person, or (2) any Operating Entity.
"Dollar or "$": lawful currency of the United States of America.
"Domestic Business Day": any day on which the Agent shall be open to the
public at its office set forth in Section 11.2 for the transaction of its normal
banking business.
"Domestic Subsidiary": as of any date, each Subsidiary organized under the
laws of the United States of America, any state thereof or the District of
Columbia.
"Drop Down": the contribution to the Borrower or any Subsidiary of the
land and buildings located at 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx and 000
Xxx Xxxx Xxxx, Xxxxxx, Xxx Xxxx and a sublease of the building located at 000
Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx, together with the assumption by the
Borrower or such Subsidiary of any indebtedness (in the aggregate not in excess
of $5,000,000) related to such properties and sublease.
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"EBITDA": with respect to the Borrower and the Subsidiaries for any
period, the net income thereof on a consolidated basis in accordance with GAAP
during such period, exclusive of each of the following to the extent utilized in
determining such net income: (a) Interest Expense, (b) provision for income
taxes, (c) depreciation, (d) amortization, and (e) all other unusual and/or
extraordinary non-cash additions to and subtractions from such net income.
Notwithstanding anything in this definition to the contrary, with respect to the
fiscal period ending September 30, 1997, there shall be added, without
duplication, to "EBITDA" for such period the following: with respect to Old IPL
and its consolidated subsidiaries for the period from July 1, 1997, through the
day immediately preceding the Merger, the net income thereof on a consolidated
basis in accordance with GAAP during such period, exclusive of each of the
following to the extent utilized in determining such net income: (a) Interest
Expense, (b) provision for income taxes, (c) depreciation, (d) amortization, and
(e) all other unusual and/or extraordinary non-cash additions to and
subtractions from such net income.
"Effective Date": as defined in Section 11.19.
"Eligible Institution": as defined in Section 11.7(c).
"Employee Benefit Plan": an employee benefit plan within the meaning of
Section 3(3) of ERISA maintained, sponsored or contributed to by the Borrower or
any Subsidiary; provided, however, that for purposes of Section 9.1(k), such
term shall include an employee benefit plan maintained, sponsored or contributed
to by an ERISA Affiliate.
"Equitable": The Equitable Life Assurance Society of the United States and
Equitable Deal Flow Fund, L.P., each for so long as they, collectively, shall
maintain beneficial ownership of Subject Shares which constitute more than 19%
of the issued and outstanding shares of capital voting stock of the Borrower.
"Equity Offering": with respect to the Borrower, the issuance by the
Borrower of additional capital stock or any warrant or option therefor or other
Stock convertible into such capital stock, except to the extent such issuance is
consummated in connection with any compensation program for existing or former
employees and/or directors, provided, however, that the conversion of all or any
portion of the Approved Subordinated Debt upon the terms and subject to the
conditions set forth in the relevant Approved Subordinated Debt Document shall
not constitute an "Equity Offering".
"ERISA": the Employee Retirement Income Security Act of 1974, as amended
from time to time, or any successor thereto, and the rules and regulations
issued thereunder, as from time to time in effect.
"ERISA Affiliate": when used with respect to an Employee Benefit Plan,
Pension Plan, ERISA, the PBGC or a provision of the Code pertaining to employee
benefit plans, any Person that is a member of any group of organizations within
the meaning of Sections 414(b) or (c) of
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the Code or, solely with respect to applicable provisions of the Code, Sections
414(m) or (o) of the Code, of which the Borrower or any Subsidiary is a member.
"Eurodollar Advance": a Revolving Credit Eurodollar Advance or a Term Loan
Eurodollar Advance.
"Eurodollar Business Day": any Domestic Business Day on which the Agent is
open for international business (including dealings in Dollar deposits).
"Eurodollar Interest Period": the period commencing on any Eurodollar
Business Day selected by the Borrower in accordance with Section 2.3 or Section
3.3 and ending one, two, three, six (or, to the extent available, nine or
twelve) months thereafter, as selected by the Borrower in accordance with such
Sections, subject to the following:
(i) if any Interest Period would otherwise end on a day which is not
a Eurodollar Business Day, such Interest Period shall be extended to the
immediately succeeding Eurodollar Business Day unless the result of such
extension would be to carry the end of such Interest Period into another
calendar month, in which event such Interest Period shall end on the Eurodollar
Business Day immediately preceding such day; and
(ii) if any Interest Period shall begin on the last Eurodollar
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period),
such Interest Period shall end on the last Eurodollar Business Day of such
latter calendar month.
"Eurodollar Rate": with respect to each Eurodollar Advance and as
determined by KBNA and reported to the Agent, the rate of interest per annum
(rounded, if necessary, to the nearest 1/16 of 1% or, if there is no nearest
1/16 of 1%, then to the next higher 1/16 of 1%) equal to a fraction, the
numerator of which is the rate, as reported by KBNA to the Agent, quoted by KBNA
to leading banks in the interbank eurodollar market as the rate at which KBNA is
offering Dollar deposits in an amount approximately equal to KBNA's Commitment
Percentage of such Eurodollar Advance and having a period to maturity
approximately equal to the Interest Period applicable to such Eurodollar
Advance, as quoted two Eurodollar Business Days prior to the first day of such
Interest Period, and the denominator of which is an amount equal to 1.00 minus
the aggregate of the then stated maximum rates during such Interest Period of
all reserve requirements (including marginal, emergency, supplemental and
special reserves), expressed as a decimal, established by the Board of Governors
of the Federal Reserve System and any other banking authority to which KBNA and
other major United States money center banks are subject, in respect of
eurocurrency liabilities without benefit of credits for proration, exceptions or
offsets which may be available from time to time to KBNA.
"Event of Default": any of the events specified in Section 9.1, provided
that any requirement for the giving of notice, the lapse of time, or both, or
any other condition has been satisfied.
"Excluded Property": the following property owned by the Borrower on the
date hereof: (a) 25 shares of Coca Cola, 197 shares of Rea Gold Corp., 80 shares
of American Resources,
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1 share of Viacom, Inc., and (b) until such time, if any, as the same are
represented by a certificate or instrument which is not lost, 50,000 shares of
Xxxxxxx Mobile Robotics, Inc., promissory note issued by Manhattan Transfer/Edit
Inc. to International Post Finance Limited ("IPFL") on June 1, 1994 in the
amount of $14,310,000.00, note issued by Audio plus Video International to IPFL
on June 1, 1994 in the amount of $7,440,000.00, and note issued by Old IPL to
IPFL on July 12, 1995 in the amount of $24,490,000.00.
"Excluded Taxes": as defined in Section 3.10.
"Existing Debt": all obligations and liabilities listed on Schedule 1.1A.
"Existing Mortgage": that certain Mortgage dated May 8, 1990 in the
original principal amount of $2,200,000 made by M.A.L. Partners to Savings Bank
of Rockland Co. and recorded in the Office of the Clerk of Rockland County on
June 25, 1990 in Reel 415, page 331 and the mortgage note(s) secured thereby, as
extended and modified by that certain Extension and Modification Agreement dated
September 1, 1995 made by and between M.A.L. Partners and First Fidelity Bank,
National Association and recorded in the said Clerk's Office on September 29,
1995 in Reel 752, page 5887, upon which there remains outstanding as of the date
hereof the unpaid principal amount of $1,485,030.06.
"Existing Pension Plan": a Pension Plan listed on Schedule 1.1B hereto.
"Facility Fee": as defined in Section 3.12.
"Federal Funds Effective Rate": for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Domestic Business Day, for the next preceding Domestic
Business Day) by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Domestic Business Day, the average (rounded,
if necessary, to the nearest 1/100 of 1% or, if there is no nearest 1/100 of 1%,
then to the next higher 1/100 of 1%) of the quotations for such day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"Fees": as defined in Section 3.2(a).
"Financial Statements": as defined in Section 4.14.
"Fixed Charge Coverage Ratio": (i) as of the fiscal quarter ending
September 30, 1997, the ratio of (a) Adjusted EBITDA in respect of the fiscal
quarter then ending, to (b) Fixed Charges in respect of the fiscal quarter then
ending, (ii) as of the fiscal quarter ending December 31, 1997, the ratio of (a)
Adjusted EBITDA in respect of the two consecutive fiscal quarters then ending,
to (b) Fixed Charges in respect of the two consecutive fiscal quarters then
ending,
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(iii) as of the fiscal quarter ending March 31, 1998, the ratio of (a) Adjusted
EBITDA in respect of the three consecutive fiscal quarters then ending, to (b)
Fixed Charges in respect of the three consecutive fiscal quarters then ending,
and (iv) as of each fiscal quarter ending on or after June 30, 1998, the ratio
of (a) Adjusted EBITDA for the four consecutive fiscal quarters then ended, to
(b) Fixed Charges in respect of the four consecutive fiscal quarters then ended.
"Fixed Charges": in respect of any period, the sum, without duplication,
of each of the following in respect of the Borrower and the Subsidiaries on a
Consolidated basis: (a) Interest Expense in respect of such period or any prior
period to the extent paid in such period, plus (b) with respect to all Funded
Debt of the Borrower and the Subsidiaries, all repayments of such Funded Debt
which were scheduled (after giving effect to any applicable grace period) to be
made during such period, plus (c) without duplication, all Restricted Payments
made by the Borrower, plus (d) all income taxes paid by the Borrower and the
Subsidiaries during such period. Notwithstanding anything in this definition to
the contrary, with respect to the fiscal period ending September 30, 1997, there
shall be added, without duplication, to "Fixed Charges" for such period the
following: with respect to Old IPL and its consolidated subsidiaries for the
period from July 1, 1997, through the day immediately preceding the Merger, the
sum, without duplication, of each of the following: (a) Interest Expense in
respect of such period or any prior period to the extent paid in such period,
plus (b) with respect to all Indebtedness of Old IPL and its consolidated
subsidiaries, all repayments of such Indebtedness which were scheduled (after
giving effect to any applicable grace period) to be made during such period,
plus (c) without duplication, all Restricted Payments made by Old IPL, plus (d)
all income taxes paid by Old IPL and its consolidated subsidiaries during such
period.
"Funded Current Liability Percentage": as defined in Section 401(a)(29) of
the Code.
"Funded Debt": with respect to any Person as of any date, all Indebtedness
of such Person on such date, other than any such Indebtedness which constitutes
Indebtedness of such Person solely by reason of clause (d)(ii) of the defined
term "Indebtedness".
"GAAP": generally accepted accounting principles as from time to time in
effect in the United States.
"Gap Mortgage": that certain mortgage dated the date hereof in the
original principal sum of $514,969.94 made by the Debtor to the Agent to be
recorded in the Rockland County Clerk's Office.
"Governmental Authority": any foreign, federal, state, municipal or other
government, or any department, commission, board, bureau, agency, public
authority or instrumentality thereof, or any court or arbitrator.
"Guarantors": as defined in the Guaranty.
"Guaranty": as defined in Section 5.5.
"Highest Lawful Rate": the maximum rate of interest, if any, which at any
time or from time to time may be contracted for, taken, charged or received on
the Loans or the Notes or
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which may be owing to any Lender or the Issuer pursuant to this Agreement under
the laws applicable to such Lender or the Issuer, as the case may be, and this
Agreement.
"Impermissible Qualification": means, relative to any opinion by the
Accountants as to any financial statement delivered pursuant hereto, any
qualification or exception to such opinion: (a) which is of a "going concern" or
a similar nature with respect to the Borrower or any Subsidiary, (b) which
relates to the limited scope of examination of matters relevant to such
financial statement (other than scope limitations included in the standard form
of opinion utilized by the Accountants or with respect to Persons other than the
Borrower or such Subsidiary), or (c) which relates to the treatment or
classification of any item in such financial statement and which, as a condition
to its removal, would require an adjustment to such item the effect of which
would be to cause the Borrower to be in default of any obligation under Sections
7.11, 7.12 or 7.13.
"Indebtedness": as to any Person, at a particular time, all items of such
Person which constitute, without duplication, (a)(i) indebtedness for borrowed
money, or (ii) the deferred purchase price of Property (excluding, to the extent
included therein and without duplication, (1) trade payables, (2) accrued
expenses incurred in the ordinary course of business, (3) indebtedness which, at
such time and in accordance with GAAP, is contingent, and (4) xxxxxxxx in excess
of cost on uncompleted contracts), (b) indebtedness evidenced by notes, bonds,
debentures or similar instruments, (c) obligations with respect to (i) any
conditional sale or (ii) other title retention agreement (which shall be deemed
to exclude any such agreement which would be deemed to be a title retention
agreement solely by reason of it constituting an operating lease), (d)(i)
indebtedness arising under acceptance facilities, (ii) the amount available to
be drawn under all letters of credit issued for the account of such Person, and
(iii) without duplication of amounts under clause (d)(ii), all drafts drawn
thereunder to the extent such Person shall not have reimbursed the issuer in
respect of the issuer's payment of such drafts, (e) all liabilities secured by
any Lien on any Property owned by such Person even though such Person shall not
have assumed or otherwise become liable for the payment thereof (other than
carriers', warehousemen's, mechanics', repairmen's or other like non-consensual
Liens arising in the ordinary course of business), (f) that portion of any
obligation of such Person, as lessee, which in accordance with GAAP is required
to be capitalized on the balance sheet of such Person, and (g) Contingent
Obligations.
"Indemnified Liabilities": as defined in Section 11.5.
"Indemnified Tax Person": as defined in Section 3.10(a).
"Initial Transactions": as defined in Section 7.7(e).
"Intercompany Acquisition": an Acquisition by the Borrower or any
Guarantor from the Borrower or any other Guarantor.
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"Intercompany Debt": (a) Indebtedness of the Borrower to one or more of
the Guarantors, (b) Indebtedness of one or more of the Guarantors, to any one or
more of the Guarantors, and (c) demand Indebtedness of one or more of the
Guarantors to the Borrower.
"Intercompany Disposition": a Disposition by the Borrower or any Guarantor
to the Borrower or any other Guarantor.
"Interest Expense": for any period and in respect of any Person, the
interest expense of such Person in respect of such period (after giving effect
to all Interest Rate Protection Arrangements), determined in accordance with
GAAP.
"Interest Payment Date": (i) with respect to each ABR Advance, the last
day of each March, June, September and December commencing on the first of such
days to occur after such ABR Advance is made or any Eurodollar Advance is
converted to an ABR Advance, (ii) with respect to each Eurodollar Advance, the
last day of such Interest Period, (iii) with respect to each Eurodollar Advance
in respect of which the Borrower has selected an Interest Period greater than
three months, at the end of each consecutive three month period during such
Interest Period, and (iv) with respect to the Term Loans, each date upon which a
scheduled installment thereon becomes due.
"Interest Period": a Eurodollar Interest Period.
"Interest Rate Protection Arrangement": any interest rate swap, cap or
collar arrangement or any other derivative product customarily offered by banks
to their customers in order to reduce the exposure of such customers to interest
rate fluctuations, as the same may be amended, supplemented or otherwise
modified from time to time.
"Investments": as defined in Section 8.5.
"Issuer": KeyBank National Association.
"KBNA": as defined in the preamble.
"KBNA Rate": a rate of interest per annum equal to the rate of interest
publicly announced by KBNA from time to time as its prime commercial lending
rate, such rate to be adjusted automatically (without notice) on the effective
date of any change in such publicly announced rate.
"Letter of Credit Commitment": the commitment of the Issuer to issue
Letters of Credit under and in accordance with the terms of this Agreement.
"Letter of Credit Exposure": at any date, (a) in respect of all the
Lenders, the sum, without duplication, of (i) the aggregate amount which may be
drawn under all unexpired Letters of Credit outstanding on such date (whether or
not the conditions for drawing thereunder have or may be satisfied), (ii) the
aggregate amount, on such date, of all unpaid drafts (which have not been
dishonored) drawn on all Letters of Credit, and (iii) the aggregate unpaid
reimbursement obligations in respect of the Letters of Credit on such date, and
(b) in respect of any Lender, an
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amount equal to such Lender's Commitment Percentage multiplied by the amount
determined under clause (a) of this definition.
"Letter of Credit Fee": as defined in Section 3.13.
"Letter of Credit Participation": with respect to each Lender, its
obligations to the Issuer hereunder.
"Letter of Credit Request": a request in the form of Exhibit I.
"Letters of Credit": as defined in Section 2.8(a).
"Leverage Ratio": (i) as of the fiscal quarter ending September 30, 1997,
the ratio of (a) Total Funded Debt on such date, to (b) four multiplied by
EBITDA in respect of the fiscal quarter then ending, (ii) as of the fiscal
quarter ending December 31, 1997, the ratio of (a) Total Funded Debt on such
date, to (b) two multiplied by EBITDA in respect of the two consecutive fiscal
quarters then ending, (iii) as of the fiscal quarter ending on March 31, 1998,
the ratio of (a) Total Funded Debt on such date, to (b) (4/3) multiplied by
EBITDA in respect of the three consecutive fiscal quarters then ending, and (iv)
as of each fiscal quarter ending on or after June 30, 1998, the ratio of (a)
Total Funded Debt on such date, to (b) EBITDA in respect of the four consecutive
fiscal quarters then ending.
"Lien": any mortgage, pledge, collateral assignment, lien, charge,
encumbrance or security interest of any kind, or the interest of a vendor or
lessor under any conditional sale agreement, capital lease or other title
retention agreement.
"Loan": a Revolving Credit Loan or a Term Loan, as the case may be.
"Loan Documents": this Agreement, the Collateral Documents and, upon the
execution and delivery thereof, the Notes and the Reimbursement Agreements.
"Loan Party": with respect to any Loan Document, any Person (other than
the Agent, the Issuer or any Lender) which, in accordance with the terms of such
Loan Document, is or is to be a party thereto.
"Loan Party Obligations": all of the obligations and liabilities of the
Loan Parties under each Interest Rate Protection Arrangement with one or more of
the Lenders and under the Loan Documents, in each case whether fixed,
contingent, now existing or hereafter arising, created, assumed, incurred or
acquired.
"Loans": the Revolving Credit Loans and the Term Loans.
"Margin Stock": any "margin stock", as said term is defined in Regulation
U of the Board
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of Governors of the Federal Reserve System, as the same may be amended or
supplemented from time to time.
"Material Adverse": with respect to any change or effect, a material
adverse change in, or effect on, as the case may be, (i) the financial
condition, operations, business, prospects or Property of the Borrower and the
Subsidiaries taken as a whole, (ii) the ability of the Borrower to perform its
obligations under the Loan Documents, or (iii) except to the extent caused by
the gross negligence or willful misconduct of the Agent, the Issuer or any
Lender, the ability of the Agent, the Issuer or such Lender to enforce the Loan
Documents.
"Merger": as defined in Section 5.6.
"Merger Agreement": the Agreement and Plan of Merger, dated as of June 27,
1997, among Old IPL, Old VSC and all of the shareholders of Old VSC, as the same
may be amended, supplemented or otherwise modified from time to time.
"Merger Documents": the Merger Agreement, together with all documents,
instruments and other agreements entered into in connection with the Merger
Agreement.
"Mortgage": the Existing Mortgage covering the Mortgaged Premises, as
assigned to the Agent by the current holder of such Existing Mortgage and as
increased by the Gap Mortgage, together as consolidated under the Consolidation
Agreement, as the same may be hereafter amended, supplemented or otherwise
modified from time to time.
"Mortgaged Premises": the real property owned in fee simple by the Debtor
commonly known as 000 Xxx Xxxx Xxxx, Xxxxxx of Tappan, Town of Orangetown,
Xxxxxxxx Xxxxxx, Xxx Xxxx 00000 (Section 77.15, Xxxxx 0, Xxx 00), as more
particularly described in the Mortgage.
"Multiemployer Plan": a multiemployer plan as defined in Section
4001(a)(3) of ERISA to which the Borrower, any Subsidiary or any ERISA Affiliate
contributes or is obligated to contribute.
"Net Cash Proceeds": with respect to any Disposition by the Borrower or
any Subsidiary, the aggregate gross sales proceeds received by the Borrower or
such Subsidiary in connection with such Disposition less the sum of (a) sales
and other commissions and reasonable legal and other expenses incurred in
connection with such Disposition, (b) any taxes paid or payable by the Borrower
or such Subsidiary in connection therewith or arising therefrom, (c) the amount
of Indebtedness secured by the Property subject to such Disposition which, in
accordance with the terms governing such Indebtedness, is required to be repaid
upon such Disposition, (d) the face amount of any seller financing provided by
the Borrower or such Subsidiary attributable to such Disposition, but in no
event in excess of 15% of such aggregate gross sales proceeds, and (e) all other
costs and expenses incurred by the Borrower or such Subsidiary in consummating
such sale, such as advertising, repairs or improvements, or readying the
Property disposed of for such Disposition.
"Note": a Revolving Credit Note or a Term Note, as the case may be.
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"Notes": the Revolving Credit Notes or the Term Notes.
"Old IPL": the Borrower, immediately prior to the Merger.
"Old VSC": Video Services Corporation, a New Jersey corporation.
"Operating Entity": (a) any Person, (b) any business or operating unit of
a Person which is operated separate and apart from the other businesses and
operations of such Person, or (c) any other line of business or business
segment.
"Other Liens": all Liens on Property of the Borrower or any Subsidiary,
other than Liens permitted pursuant to clauses (a) - (l) of Section 8.2.
"Outstandings": with respect to the Issuer and each other Lender, as the
case may be, as of any date, an amount equal to (a) the outstanding principal
balance on such date of all the Loans of the Issuer or such other Lender, plus
(b) with respect to the Issuer only, the excess of (i) the aggregate sum of all
drafts honored under all Letters of Credit, over (ii) all payments made to the
Issuer by the Borrower and the Lenders in reimbursement thereof or participation
therein, as the case may be, plus (c) with respect to each Lender, the excess of
(i) the aggregate sum of all payments by such Lender in participation of the
Reimbursement Obligations, over (ii) all payments to such Lender in respect of
such participation.
"Outstanding Percentage": as of any date and with respect to the Issuer
and each other Lender, as the case may be, a fraction the numerator of which is
the Outstandings of the Issuer or such other Lender, as applicable, on such
date, and the denominator of which is the aggregate Outstandings of the Issuer
and all other Lenders on such date.
"PBGC": the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA, or any Governmental Authority succeeding to the
functions thereof.
"Pension Plan": at any time, any employee benefit plan (excluding a
Multiemployer Plan) subject to Section 302 of ERISA or Section 412 of the Code,
the funding requirements of which are, or at any time within the six years
immediately preceding the time in question, were in whole or in part, the
responsibility of the Borrower, any Subsidiary or an ERISA Affiliate.
"Person": any individual, firm, partnership, joint venture, limited
liability company, corporation, association, business enterprise, joint stock
company, unincorporated association, trust, Governmental Authority or any other
entity, whether acting in an individual, fiduciary, or other capacity; provided
that for the purpose of the definition of "ERISA Affiliate", any such Person
shall be conducting a trade or business.
"Prohibited Transaction": a transaction that is prohibited under Section
4975 of the Code or Section 406 of ERISA and not exempt under Section 4975 of
the Code, Section 408 of
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ERISA, or an individual or class prohibited transaction exception.
"Property": in respect of any Person, all types of real, personal or mixed
property and all types of tangible or intangible property owned or leased by
such Person.
"Put Agreement": The Put Agreement, dated as of January 22, 1997, by and
among Cognitive, Old IPL, Xxxxx Xxxxxx, Xxxxxxx Xxxxxxx and Xxxxx Xxxxxx, as the
same may be amended, supplemented or otherwise modified from time to time.
"Regulatory Change": (a) the introduction or phasing in of any law, rule
or regulation after the date hereof, (b) the issuance or promulgation after the
date hereof of any directive, guideline or request from any central bank or
United States or foreign Governmental Authority (whether or not having the force
of law), or (c) any change after the date hereof in the interpretation of any
existing law, rule, regulation, directive, guideline or request by any central
bank or United States or foreign Governmental Authority charged with the
administration thereof.
"Reimbursement Agreement": as defined in Section 2.8(b).
"Reimbursement Obligations": all of the obligations and liabilities of the
Borrower and the Subsidiaries (a) under each Reimbursement Agreement, and (b)
hereunder in respect of the Letters of Credit.
"Reportable Event": with respect to any Pension Plan, (a) any event set
forth in Sections 4043(c) of ERISA (other than a Reportable Event as to which
the 30 day notice requirement is waived by the PBGC under applicable
regulations), (b) an event requiring the Borrower, any Subsidiary or any ERISA
Affiliate to provide security to a Pension Plan under Section 401(a)(29) of the
Code, or (c) failure to make any payment required by Section 412(m) of the Code.
"Required Lenders": (a) at any time when no Loans or Letters of Credit are
outstanding, two or more Lenders the sum of whose Revolving Credit Commitment
Amounts and Term Loan Commitment Amounts equal or exceed 60% of the Aggregate
Commitment Amount, and (b) at all other times, two or more Lenders having
Outstandings equal to or more than 60% of the aggregate Outstandings of the
Issuer and all Lenders.
"Restricted Payment": with respect to any Person, any of the following,
whether direct or indirect: (a) the declaration or payment by such Person of any
dividend or distribution on any class of Stock of such Person, other than a
dividend payable solely in shares of that class of Stock to the holders of such
class, (b) the declaration or payment by such Person of any distribution on any
other type or class of equity interest or equity investment in such Person, and
(c) any redemption, retirement, purchase or acquisition of, or sinking fund or
other similar payment in respect of, any class of Stock of, or other type or
class of equity interest or equity investment in, such Person.
"Revolving Credit ABR Advance": the Revolving Credit Loans (or any
portions thereof) at such time as they (or such portions) are made or are being
maintained at a rate of interest based upon the Alternate Base Rate.
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"Revolving Credit Commitment": in respect of any Lender, such Lender's
undertaking to make Revolving Credit Loans to the Borrower, subject to the terms
and conditions hereof, in an aggregate outstanding principal amount not
exceeding the Revolving Credit Commitment Amount of such Lender.
"Revolving Credit Commitment Amount": as of any date and with respect to
any Lender, the amount set forth adjacent to its name under the heading
"Revolving Credit Commitment Amount" in Exhibit A on such date or, in the event
that such Lender is not listed on Exhibit A, the "Revolving Credit Commitment
Amount" which such Lender shall have assumed from another Lender in accordance
with Section 11.7 on or prior to such date, as all of the same may be adjusted
from time to time pursuant to Sections 2.5 and 11.7(c).
"Revolving Credit Commitment Period": the period commencing on the
Effective Date and ending on the Revolving Credit Commitment Termination Date.
"Revolving Credit Commitment Termination Date": the earlier to occur of
(a) September 30, 2002, and (b) such other date upon which the Revolving Credit
Commitments shall have been terminated in accordance with Section 2.5 or Section
9.2.
"Revolving Credit Eurodollar Advance": a given portion of the Revolving
Credit Loans selected by the Borrower to bear interest during an Interest Period
selected by the Borrower at a rate per annum based upon a Eurodollar Rate
determined with reference to such Interest Period, all pursuant to and in
accordance with Sections 2.3 and 3.3.
"Revolving Credit Exposure": with respect to any Lender as of any date,
the sum as of such date of (a) the outstanding principal balance of such
Lender's Revolving Credit Loans, and (b) an amount equal to such Lender's Letter
of Credit Exposure.
"Revolving Credit Loans": as defined in Section 2.1.
"Revolving Credit Note": as defined in Section 2.2(a).
"Security Agreement": as defined in Section 5.4.
"Significant Subsidiary": as of any date (a) each Guarantor which is a
Subsidiary on such date, and (b) each other Subsidiary which is a "Significant
Subsidiary" under, and as such term is defined in, Regulation S-X, as in effect
on the date hereof, of the United States Securities and Exchange Commission,
provided, however, that all references to "10 percent" contained in such term
shall, for purposes of this definition, be deemed to be references to "5
percent".
"Special Counsel": Xxxxx, Xxxxxx & Xxxxxx, LLP, or such other counsel as
the Agent shall retain as its counsel in connection herewith.
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"Spin-off": the spin-off by Old VSC to the shareholders thereof of its
business segment known as Diversified Products.
"Stock": any and all shares, interests, warrants, options, rights of
conversion, participations or other equivalents (however designated) of
corporate stock.
"Subject Shares": the shares of capital voting stock of the Borrower owned
by Equitable on the date hereof.
"Subsidiary": at any time and from time to time, any corporation,
association, partnership, joint venture, limited liability company, or other
business entity of which the Borrower and/or any Subsidiary of the Borrower,
directly or indirectly at such time, either (a) in respect of a corporation,
owns or controls more than 50% of the outstanding stock having ordinary voting
power to elect a majority of the board of directors or similar managing body,
irrespective of whether a class or classes shall or might have voting power by
reason of the happening of any contingency, or (b) in respect of an association,
partnership, joint venture or other business entity, is entitled to share in
more than 50% of the profits and losses, however determined.
"Taxes": as defined in Section 3.10.
"Term Loan": as defined in Section 2.1(b).
"Term Loan ABR Advance": the Term Loans (or any portions thereof) at such
time as they (or such portions) are made or are being maintained at a rate of
interest based upon the Alternate Base Rate.
"Term Loan Commitment": in respect of any Lender, such Lender's
undertaking to make a Term Loan to the Borrower, subject to the terms and
conditions hereof, in an aggregate outstanding principal amount not exceeding
the Term Loan Commitment Amount of such Lender.
"Term Loan Commitment Amount": as of the first Borrowing Date and with
respect to any Lender, the amount set forth adjacent to its name under the
heading "Term Loan Commitment Amount" in Exhibit A on such date or, in the event
that such Lender is not listed on Exhibit A, the "Term Loan Commitment Amount"
which such Lender shall have assumed from another Lender in accordance with
Section 11.7 on or prior to the first Borrowing Date, as all of the same may be
adjusted from time to time pursuant to Sections 2.5 and 11.7(c).
"Term Loan Eurodollar Advance": a given portion of the Term Loans selected
by the Borrower to bear interest during an Interest Period selected by the
Borrower at a rate per annum based upon a Eurodollar Rate determined with
reference to such Interest Period, all pursuant to and in accordance with
Sections 2.3 and 3.3.
"Term Note": as defined in Section 2.2(b).
"Termination Event": with respect to any Pension Plan, (a) a Reportable
Event, (b) the termination of a Pension Plan under Section 4041(c) of ERISA
(which shall include the filing of
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a notice of intent to terminate a Pension Plan under Section 4041(c) of ERISA),
or (c) the institution of proceedings by the PBGC to terminate a Pension Plan
under Section 4042 of ERISA (which shall include the appointment of a trustee to
administer any Pension Plan under Section 4042 of ERISA).
"Total Funded Debt": as of any date and with respect to the Borrower and
the Subsidiaries on a Consolidated basis, the sum of the following, without
duplication: (i) all Funded Debt, plus (ii) all Affiliate Obligations.
"Transaction Documents": the Loan Documents, the Merger Documents and the
Approved Subordinated Debt Documents.
"Unfunded Pension Liabilities": with respect to any Pension Plan, as of
the last day of the fiscal year of such Pension Plan preceding the time in
question, the amount determined by taking the accumulated benefit obligation, as
disclosed in accordance with Statement of Accounting Standards No. 87,
"Employers' Accounting for Pensions", over the fair market value of Pension Plan
assets.
"Unqualified Amount": as defined in Section 3.4(c).
"Unrecognized Retiree Welfare Liability": with respect to any Employee
Benefit Plan that provides postretirement benefits other than pension benefits,
the amount of the transition obligation, as determined in accordance with
Statement of Financial Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions," as of the most recent valuation
date, that has not been recognized as an expense in the income statement of the
Borrower and its Consolidated Subsidiaries, provided that prior to the date such
Statement is applicable to the Borrower, such amount shall be based on an
estimate made in good faith of the transition obligation.
"Upstream Payments": as defined in Section 8.8.
"Wholly-Owned Subsidiary": each Subsidiary 100% of the outstanding capital
stock of which is held by the Borrower and/or any one or more Wholly-Owned
Subsidiaries.
1.2 Principles of Construction
(a) Each capitalized term ascribed a meaning by this Agreement shall
have such meaning when used in the other Loan Documents or any certificate,
opinion or other document made or delivered pursuant hereto or thereto, unless
otherwise expressly provided therein.
(b) As used in the Loan Documents and in any certificate, opinion or
other document made or delivered pursuant thereto, accounting terms not defined
in Section 1.1, and
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accounting terms partly defined in Section 1.1 to the extent not defined, shall
have the respective meanings given to them under GAAP. Unless otherwise
expressly provided herein, the word "fiscal" when used herein shall refer to the
relevant fiscal period of the Borrower. Each Consolidating financial statement
and the worksheet attached to each Compliance Certificate, in each case required
to be delivered hereunder, shall be substantially in the form of the financial
statement or worksheet, as the case may be, attached hereto as Exhibit M.
(c) The words "hereof", "herein", "hereto" and "hereunder" and
similar words when used in each Loan Document shall refer to such Loan Document
as a whole and not to any particular provision hereof, and Section, schedule and
exhibit references contained therein shall refer to Sections thereof or
schedules or exhibits thereto unless otherwise expressly provided therein.
(d) All references in each Loan Document to a time of day shall mean
such time in New York, New York, unless otherwise expressly provided therein.
(e) Section headings have been inserted in certain Loan Documents
for convenience only and shall not be construed to be a part thereof. As used in
each Loan document, unless otherwise expressly provided therein, words in the
singular number include the plural, and words in the plural include the
singular.
(f) Whenever in any Loan Document or in any certificate or other
document made or delivered pursuant thereto, the terms thereof require that a
Person sign or execute the same or refer to the same as having been so signed or
executed, such terms shall mean that the same shall be, or was, duly signed or
executed by (i) in respect of any Person that is a corporation, any duly
authorized officer thereof, and (ii) in respect of any other Person (other than
an individual), any analogous counterpart thereof.
(g) The words "include" and "including", when used in each Loan
Document, shall mean that the same shall be included "without limitation",
unless otherwise expressly provided therein.
2. AMOUNT AND TERMS OF LOANS
2.1 Loans
(a) Revolving Credit Loans
Subject to the terms and conditions hereof, each Lender severally
(and not jointly) agrees to make loans (each a "Revolving Credit Loan" and,
collectively with each other Revolving Credit Loan of such Lender and/or with
each Revolving Credit Loan of each other Lender, the "Revolving Credit Loans")
to the Borrower from time to time during the Revolving Credit Commitment Period,
during which period the Borrower may borrow, prepay and reborrow in accordance
with the provisions hereof, provided that immediately after making each
Revolving Credit Loan and after giving effect to all reimbursements of Letters
of Credit made concurrently with the making of such Revolving Credit Loan, (x)
such Lender's Revolving Credit Exposure would not exceed such Lender's Revolving
Credit Commitment Amount, and (y) the
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Aggregate Revolving Credit Exposure would not exceed the Aggregate Revolving
Credit Commitment Amount. The principal amount of each Lender's Revolving Credit
Loan made on a Borrowing Date shall be an amount equal to its Commitment
Percentage of all Revolving Credit Loans made on such date. Subject to the
provisions of Sections 2.3 and 3.3, Revolving Credit Loans may be made as (i)
one or more Revolving Credit ABR Advances, (ii) one or more Revolving Credit
Eurodollar Advances, or (iii) any combination thereof.
(b) Term Loans
Subject to the terms and conditions hereof, each Lender severally
(and not jointly) agrees to make an advance, on behalf of the Debtor (each a
"Mortgage Advance" and, collectively with the Mortgage Advance of each other
Lender, the "Mortgage Advances") on the first Borrowing Date, but in no event
later than September 15, 1997, in an amount not to exceed the lesser (the
"Mortgage Advance Limit") of (i) such Lender's Term Loan Commitment Amount less
the amount of such Lender's Term Advance, and (ii) $2,000,000. The principal
amount of each Lender's Mortgage Advance shall be an amount equal to its
Commitment Percentage of all of the Mortgage Advances made. Subject to the terms
and conditions hereof, each Lender severally (and not jointly) agrees to make an
advance (each a "Term Advance" and, collectively with the Term Advance of each
other Lender, the "Term Advances") to the Borrower on the first Borrowing Date,
but in no event later than September 15, 1997, in an amount not to exceed such
Lender's Term Loan Commitment Amount less the amount of such Lender's Mortgage
Advance. The principal amount of each Lender's Term Advance shall be an amount
equal to its Commitment Percentage of all of the Term Advances made. For
purposes hereof, the defined term "Term Loan" shall refer, collectively, to the
Mortgage Advance and the Term Advance of any Lender, and the defined term "Term
Loans" shall refer, collectively, to the Term Loans of all Lenders. Subject to
the provisions of Sections 2.3 and 3.3, Term Loans may be made as (a) one or
more ABR Advances, (b) one or more Term Loan Eurodollar Advances, or (c) any
combination thereof.
2.2 Notes
(a) Revolving Credit Notes
The Revolving Credit Loans made by each Lender shall be evidenced by
a promissory note of the Borrower substantially in the form of Exhibit B-1
(each, as indorsed or modified from time to time, a "Revolving Credit Note" and,
collectively with the Revolving Credit Note of each other Lender, the "Revolving
Credit Notes"), payable to the order of such Lender, dated the first Borrowing
Date, and in the maximum stated principal amount equal to such Lender's
Revolving Credit Commitment Amount.
(b) Term Notes
The Term Loan made by each Lender shall be evidenced by a
promissory
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note of the Borrower and the Debtor, substantially in the form of Exhibit B-2
(each, as indorsed or modified from time to time, a "Term Note" and,
collectively with the Term Note of each other Lender, the "Term Notes"), payable
to the order of such Lender, dated the first Borrowing Date, and in a stated
principal amount equal to such Lender's Term Loan.
2.3 Notice of Borrowing
The Borrower agrees to notify in writing the Agent, which
notification shall be irrevocable, no later than 12:00 noon at least (a) one
Domestic Business Day, in the case of an ABR Advance, and (b) three Eurodollar
Business Days, in the case of a Eurodollar Advance, in each such case prior to
each date it intends to borrow Loans under this Agreement (each a "Borrowing
Date"), specifying the aggregate amount requested to be borrowed under the
Revolving Credit Commitments and/or the Term Loan Commitments, as the case may
be, the proposed Borrowing Date, the Company requesting such Loans (in the case
of a request for Term Loans), whether the borrowing is to be of Revolving Credit
Loans and/or Term Loans (and, in the case of the Term Loans, whether they
constitute Mortgage Advances or Term Advances), whether the borrowing is to be
of one or more ABR Advances, one or more Revolving Credit Eurodollar Advances,
and/or Term Loan Eurodollar Advances, or a combination thereof, and the amount
of each thereof, and the Interest Period for each Eurodollar Advance, which
notice shall be promptly confirmed by delivery to the Agent of a Borrowing
Request. The Agent shall promptly notify each Lender (by telephone or otherwise,
such notice to be confirmed by facsimile or other writing) of such borrowing
request. Subject to its receipt of each such notice from the Agent and subject
to the terms and conditions hereof, each Lender shall make immediately available
funds available to the Agent at the address therefor set forth in Section 11.2
not later than 1:00 P.M. on each Borrowing Date in an amount equal to such
Lender's Commitment Percentage of the Loans requested by the Borrower on such
Borrowing Date, provided, however, that (i) each Eurodollar Advance to be made
on a Borrowing Date, when aggregated with all amounts to be converted to a
Eurodollar Advance on such date and having the same Interest Period as such
first Eurodollar Advance, shall equal no less than $500,000, or an integral
multiple of $100,000 in excess thereof, and (ii) each ABR Advance made on each
Borrowing Date shall equal no less than $100,000 or an integral multiple of in
excess thereof.
2.4 Use of Proceeds
The Companies agree that the proceeds of the Loans shall be used
solely (i) in the case of Revolving Credit Loans, (a) for general working
capital purposes, (b) up to $10,000,000 in aggregate principal amount, for
Additional Permitted Acquisitions, and (c) to pay fees and expenses in
connection with the Merger, and, (ii) in the case of the Term Loans, (a) to
refinance the Existing Debt, and (b) general corporate purposes. The Borrower
covenants and agrees that the Letters of Credit shall be issued in connection
with (A) its general corporate purposes, and (B) workers' compensation insurance
obligations of the Borrower and the Guarantors. Notwithstanding anything to the
contrary contained in any Loan Document, the Borrower further agrees that no
part of the proceeds of any Loan, nor any Letter of Credit, will be used,
directly or indirectly, for a purpose which violates any law, rule or regulation
of any Governmental Authority, including the provisions of Regulations G, U or X
of the Board of Governors of the Federal Reserve System, as amended.
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2.5 Termination or Reduction of Commitments
(a) Voluntary Termination or Reduction
At the Borrower's option and upon at least three Domestic
Business Days' prior irrevocable written notice to the Agent, (i) the Borrower
may terminate the Term Loan Commitments at any time provided that immediately
after giving effect thereto there shall be no Term Loans outstanding, (ii) the
Borrower may, provided that the Term Loan Commitments shall have been
terminated, terminate the Revolving Credit Commitments provided that immediately
after giving effect thereto there shall be no Revolving Credit Loans
outstanding, and (iii) the Borrower may permanently reduce the Aggregate
Revolving Credit Commitment Amount in part at any time and from time to time,
provided that (A) immediately after giving effect to each such reduction, the
Aggregate Revolving Credit Commitment Amount shall equal or exceed the Revolving
Credit Exposure, and (B) each such partial reduction shall be in an amount equal
to at least $1,000,000, or an integral multiple thereof.
(b) Reductions Generally
Each reduction of the Aggregate Revolving Credit Commitment
Amount shall be made by reducing each Lender's Revolving Credit Commitment
Amount by a sum equal to such Lender's Commitment Percentage of the amount of
such reduction.
2.6 Amortization of the Term Loans
(a) The aggregate outstanding principal balance of the Term Loans
shall be due and payable in installments, payable on such dates, and in such
amounts, as follows:
Date Amount
December 31, 1997 $1,000,000
March 31, 1998 $1,000,000
June 30, 1998 $1,000,000
September 30, 1998 $1,000,000
December 31, 1998 $1,250,000
March 31, 1999 $1,250,000
June 30, 1999 $1,250,000
September 30,1999 $1,250,000
December 31, 1999 $1,750,000
March 31, 2000 $1,750,000
June 30, 2000 $1,750,000
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September 30, 2000 $1,750,000
December 31, 2000 $1,750,000
March 31, 2001 $1,750,000
June 30, 2001 $1,750,000
September 30, 2001 $2,000,000
December 31, 2001 $2,000,000
March 31, 2002 $2,000,000
June 30, 2002 $2,000,000
September 30, 2002 $3,750,000
(b) All payments made on the Term Loans shall be applied first, to
the repayment or prepayment, as the case may be, in full of the Term Advances
and, thereafter, to the Mortgage Advances; provided, however, that
notwithstanding anything to the contrary contained herein, in the event that the
entire Mortgaged Premises have been condemned or sold, assigned, transferred or
otherwise disposed of and, in connection therewith, the Borrower has made all
repayments and prepayments of the Term Loans required by the terms of the Loan
Documents, all payments made on the Term Loans on and after the Effective Date
shall instead be deemed to have been applied first, to the repayment or
prepayment, as the case may be, in full of the Mortgage Advances and,
thereafter, to the Term Advances, and the Borrower, the Lenders and the Agent
shall make appropriate changes in their books and records to reflect the same.
2.7 Prepayments of the Loans
(a) Voluntary Prepayments. Either Company may, at its option, prepay
the Loans, in whole or in part, without premium or penalty (but subject to
Section 3.5), at any time and from time to time, by notifying the Agent in
writing at least three Eurodollar Business Days, in the case of a prepayment of
a Eurodollar Advance, or one Domestic Business Day, in the case of a prepayment
of an ABR Advance, prior to the proposed prepayment date and specifying (i) the
amount to be prepaid, (ii) the date of prepayment, (iii) the amount of such
prepayment to be applied to Term Loans and to Revolving Credit Loans, and (iv)
the respective amounts to be applied to outstanding ABR Advances or Eurodollar
Advances. Upon receipt of each such notice, the Agent shall promptly notify each
Lender thereof. Each such notice given pursuant to this Section 2.7(a) shall be
irrevocable. Each partial prepayment under this Section 2.7(a) shall be in a
minimum amount of $500,000 or an integral multiple of $100,000 in excess thereof
in the case of Eurodollar Advances, and in a minimum amount of $100,000 or in
integral multiples thereof in the case of each ABR Advance.
(b) Mandatory Prepayments. Subject to Section 2.7(d), upon the date
of each Disposition by the Borrower or any Subsidiary (other than an
Intercompany Disposition permitted pursuant to Section 8.3(c)), the Borrower
shall prepay the Loans in an amount equal to the Net Cash Proceeds of such
Disposition.
(c) Application of Prepayments. Subject to Section 2.7(d), all
mandatory prepayments of the Loans required to be made pursuant to this
Agreement shall be applied first, to
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the outstanding principal balance of the Term Loan ABR Advances, if any, second
to the outstanding principal balance of the Term Loan Eurodollar Advances, if
any, third to the outstanding principal balance of the Revolving Credit ABR
Advances, if any, and last, to the outstanding principal balance of Revolving
Credit Eurodollar Advances, if any. Subject to Section 2.7(d), all voluntary
prepayments made pursuant to Section 2.7(a) hereof shall be applied to the
respective outstanding principal balances of the Revolving Credit Loans and the
Term Loans in such amounts as the Borrower shall specify; to the extent applied
to outstanding Revolving Credit Loans, prepayments shall be applied first to the
outstanding principal balance of Revolving Credit ABR Advances, if any, and then
to the outstanding principal balance of Revolving Credit Eurodollar Advances,
and to the extent applied to outstanding Term Loans, applied first to the
outstanding principal balance of Term Loan ABR Advances, and then to the
outstanding principal balance of Term Loan Eurodollar Advances. Each prepayment
pursuant to this Section 2.7 that is applied to Term Loans shall be applied
first, pro rata against installments of principal, if any, required to be paid
during the fiscal year of the Borrower in which such prepayment is made, then
pro rata against the remaining installments of principal required to be made
during the calendar years 2001 and 2002, and then pro rata against the remaining
installments of principal.
(d) In General. Simultaneously with each prepayment of a Loan, the
Companies shall prepay all accrued interest on the amount prepaid through the
date of prepayment and any amounts due under Section 3.5. In the event the
amount of any prepayment of the Term Loans required or permitted to be made
pursuant hereto shall exceed the aggregate outstanding principal balance of Term
Loan ABR Advances outstanding on the date of such prepayment or the amount of
any prepayment of the Revolving Credit Loans required or permitted to be made
pursuant hereto shall exceed the aggregate outstanding principal balance of
Revolving Credit ABR Advances outstanding on the date of such prepayment (the
aggregate amount of any such excess being referred to as the "Excess Amount"),
the Borrower shall have the right, in lieu of making such prepayment in full
(but not later than the date such prepayment would otherwise be due), to prepay
the applicable outstanding principal balance of Term Loan ABR Advances or
Revolving Credit ABR Advances, as the case may be, and to deposit an amount
equal to the Excess Amount with the Agent in a cash collateral account
maintained (pursuant to documentation reasonably satisfactory to the Agent but
which, in any event, shall provide that the Agent shall have a first perfected
Lien on such account and all sums on deposit therein) by and in the sole
dominion and control of the Agent. Any amounts so deposited shall be held by the
Agent as collateral for the Loan Party Obligations and, until depleted,
automatically applied to the prepayment of each Term Loan Eurodollar Advance (in
the event of a prepayment originally relating to Term Loans) or each Revolving
Credit Eurodollar Advance (in the event of a prepayment originally relating to
Revolving Credit Loans) at the end of the Interest Period therefor as the same
shall expire. On a Business Day on which (i) collected amounts remain on deposit
in or to the credit of such cash collateral account after giving effect to the
payments made on such day pursuant to this Section 2.7(d) and (ii) the Borrower
shall have delivered to the Agent a written request or a telephonic request
(which shall be promptly confirmed in writing) that such remaining collected
amounts be invested in Investments of the
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type specified in Section 8.5(a), (b), (c) or (d), as specified in such request,
the Agent shall use its reasonable efforts to invest such remaining collected
amounts in such specified Investments, provided, however that the Agent shall
have full and continuous dominion and control over any such Investments (and
over any interest that accrues thereon and any proceed thereof) to the same
extent that it has dominion and control over such cash collateral account and no
such Investment shall mature after the end of the Interest Period to which it is
to be applied. The Borrower shall not have the right to withdraw any amount from
such cash collateral account. All prepayments of the Loans shall be applied in
accordance with Section 2.6(b).
2.8 Letter of Credit Sub-facility
(a) Subject to the terms and conditions of this Agreement and the
payment by the Borrower to the Issuer of such fees as the Borrower and the
Issuer shall have agreed, the Issuer agrees, in reliance on the agreement of the
other Lenders set forth in Section 2.9, to issue standby letters of credit (each
a "Letter of Credit" and, collectively, the "Letters of Credit") during the
Revolving Credit Commitment Period for the account of the Borrower, provided
that immediately after the issuance of each Letter of Credit (i) the aggregate
amount available to be drawn under all Letters of Credit (whether or not the
conditions for drawing thereunder have or may be satisfied) shall not exceed
$5,000,000, and (ii) the Aggregate Revolving Credit Exposure would not exceed
the Aggregate Revolving Credit Commitment Amount. Each Letter of Credit shall
have an expiration date which shall not be later than the earlier of (1) twelve
months from the date of issuance thereof (or, in the case of any renewal or
extension thereof, twelve months after such renewal or extension), or (2) the
day immediately preceding the Revolving Credit Commitment Termination Date.
(b) Each Letter of Credit shall be issued for the account of the
Borrower in support of an obligation of the Borrower or any Subsidiary in favor
of a beneficiary who has requested the issuance of such Letter of Credit as a
condition to a transaction entered into in connection with the Borrower's or
such Subsidiary's business. The Borrower shall give the Agent a Letter of Credit
Request for the issuance of each Letter of Credit by 12:00 Noon, five Domestic
Business Days prior to the requested date of issuance. Such Letter of Credit
Request shall be accompanied by the Issuer's standard Application and Agreement
for Standby Letter of Credit (each, a "Reimbursement Agreement") executed by the
Borrower, and shall specify (i) the beneficiary of such Letter of Credit and the
obligations of the Borrower or such Subsidiary in respect of which such Letter
of Credit is to be issued, (ii) the Borrower's proposal as to the conditions
under which a drawing may be made under such Letter of Credit and the
documentation to be required in respect thereof, (iii) the maximum amount to be
available under such Letter of Credit, and (iv) the requested date of issuance.
Upon receipt of such Letter of Credit Request from the Borrower, the Agent shall
promptly notify the Issuer and each Lender thereof. The Issuer shall, on the
proposed date of issuance (or up to five days earlier, if so consented to by the
Borrower) and subject to the terms and conditions of the Loan Documents, issue
the requested Letter of Credit, provided, however, that no Letter of Credit
shall be issued if the Agent, the Issuer or any Lender by notice to the Agent no
later than 3:00 P.M. four Domestic Business Days prior to the requested date of
issuance of such Letter of Credit, shall have determined that any condition set
forth in Sections 5 or 6 shall not have been satisfied. Each Letter of Credit
shall be in form and substance reasonably satisfactory to the Issuer, with such
provisions with respect to the conditions under which a drawing may be made
thereunder and
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the documentation required in respect of such drawing as the Issuer shall
reasonably require.
(c) Upon each payment by the Issuer of a draft drawn under a Letter
of Credit, the Borrower shall reimburse the Issuer for the amount thereof within
one Business Day after demand therefor by the Issuer. If all or any portion of
any reimbursement obligation in respect of a Letter of Credit shall not be paid
when due (whether upon demand, by acceleration or otherwise), such overdue
amount shall bear interest, payable upon demand by the Issuer, at a rate per
annum equal to the Alternate Base Rate for the period from the date of such
drawing to the Business Day immediately succeeding demand therefor and
thereafter until paid, at a rate per annum equal to the Alternate Base Rate plus
2% (whether before or after the entry of a judgment thereon).
(d) Notwithstanding anything to the contrary contained in any
Reimbursement Agreement, to the extent that the terms of this Agreement shall be
inconsistent with the terms of such Reimbursement Agreement, the terms of this
Agreement shall govern.
2.9 Letter of Credit Participation
(a) Each Lender hereby unconditionally and irrevocably, severally
(and not jointly) takes an undivided participating interest in the obligations
of the Issuer under and in connection with each Letter of Credit in an amount
equal to such Lender's Commitment Percentage of the amount of such Letter of
Credit. Each Lender shall be liable to the Issuer for its Commitment Percentage
of the unreimbursed amount of each draft drawn and honored under each Letter of
Credit. Each Lender shall also be liable for an amount equal to the product of
its Commitment Percentage and any amounts paid by the Borrower pursuant to
Sections 2.8(c) and 2.10 that are subsequently rescinded or avoided, or must
otherwise be restored or returned. Such liabilities shall be unconditional and
without regard to the occurrence of any Default or Event of Default or the
compliance by the Borrower with any of its obligations under the Loan Documents.
(b) The Issuer shall promptly notify the Agent, and the Agent will
promptly notify each Lender (which notice shall be promptly confirmed in
writing), of the date and the amount of each draft paid under each Letter of
Credit with respect to which full reimbursement shall not have been made by the
Borrower as provided in Section 2.8(c), and forthwith upon receipt of such
notice, each such Lender shall make available to the Agent for the account of
the Issuer its Commitment Percentage of the amount of such unreimbursed draft at
the office of the Agent specified in Section 11.2, in lawful money of the United
States and in immediately available funds, before 4:00 P.M., on the day such
notice was given by the Agent, if such notice was given by the Agent at or prior
to 12:00 Noon, on such day, and before 12:00 Noon, on the next Domestic Business
Day, if such notice was given by the Agent after 12:00 Noon, on such day. The
Agent shall deliver the payments made by each Lender pursuant to the immediately
preceding sentence to the Issuer promptly upon receipt thereof in like funds as
received. Each Lender shall indemnify and hold harmless the Agent and the Issuer
from and against any and all losses,
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liabilities (including liabilities for penalties), actions, suits, judgments,
demands, costs and expenses (including reasonable attorneys' fees and expenses
payable to the Issuer as the issuer of the relevant Letter of Credit) resulting
from any failure on the part of such Lender to pay, or from any delay in
payingthe Agent any amount such Lender is required to pay in accordance with
this Section 2.9(b) (except in respect of losses, liabilities or other
obligations suffered by the Issuer resulting from the gross negligence or
willful misconduct of the Issuer), and such Lender shall be required to pay
interest to the Agent for the account of the Issuer from the date such amount
was due until paid in full, on the unpaid portion thereof, at a rate of interest
per annum equal to the Alternate Base Rate plus 2%, payable upon demand by the
Issuer. The Agent shall distribute such interest payments to the Issuer upon
receipt thereof in like funds as received.
(c) Whenever the Agent is reimbursed by the Borrower, for the
account of the Issuer, for any payment under a Letter of Credit and such payment
relates to an amount previously paid by a Lender in respect of its Commitment
Percentage of the amount of such payment under such Letter of Credit, the Agent
will pay over such payment to such Lender (i) before 4:00 P.M. on the day such
payment from the Borrower is received, if such payment is received at or prior
to 12:00 Noon on such day, or (ii) before 12:00 Noon on the next succeeding
Domestic Business Day, if such payment from the Borrower is received after 12:00
Noon on such day.
2.10 Absolute Obligation with respect to Letter of Credit Payments
The Borrower's obligation to reimburse the Agent for the account of
the Issuer in respect of a Letter of Credit for each payment under or in respect
of such Letter of Credit shall be absolute and unconditional under any and all
circumstances and irrespective of any set-off, counterclaim or defense to
payment which the Borrower may have or have had against the beneficiary of such
Letter of Credit, the Agent, the Issuer, any Lender or any other Person,
including any defense based on the failure of any drawing to conform to the
terms of such Letter of Credit, any drawing document proving to be forged,
fraudulent or invalid, or the illegality, invalidity, irregularity or
unenforceability of such Letter of Credit, provided, however, that the Borrower
shall not be obligated to reimburse the Agent for the account of the Issuer for
any wrongful payment under such Letter of Credit made as a result of the
Issuer's gross negligence or willful misconduct.
3. PROCEEDS, PAYMENTS, CONVERSIONS, INTEREST, YIELD PROTECTION AND FEES
3.1 Disbursement of the Proceeds of the Loans
The Agent shall disburse the proceeds of the Loans (other than in
respect of Mortgage Advances) at its office designated in Section 11.2 by
crediting to the Borrower's general deposit account with the Agent the funds
received from each Lender. Unless the Agent shall have received prior notice
from a Lender (by telephone or otherwise, such notice to be confirmed by
facsimile or other writing) that such Lender will not make available to the
Agent such Lender's Commitment Percentage of the Loans requested by the Borrower
on a Borrowing Date, the Agent may assume that such Lender has made such amount
available to the Agent on
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such Borrowing Date in accordance with this Section 3.1, provided that such
Lender received notice of the proposed borrowing from the Agent in accordance
with the terms hereof, and the Agent may, in reliance upon such assumption, make
available to the Borrower on such Borrowing Date a corresponding amount. If and
to the extent such Lender shall not have so made such amount available to the
Agent, such Lender and the Borrower severally agree to pay to the Agent,
forthwith on demand, such corresponding amount (to the extent not previously
paid by the other), together with interest thereon for each day from the date
such amount is made available to the Borrower until the date such amount is paid
to the Agent, at a rate per annum equal to, in the case of the Borrower, the
applicable interest rate set forth in Section 3.4(a) and, in the case of such
Lender, the Alternate Base Rate. Any such payment by the Borrower shall be
without prejudice to its rights against such Lender. If such Lender shall pay to
the Agent such corresponding amount, such amount so paid shall constitute such
Lender's Loan as part of such Loans made on such Borrowing Date for purposes of
this Agreement, which Loan shall be deemed to have been made by such Lender on
the Borrowing Date applicable to such Loans.
3.2 Payments
(a) Each payment, including each prepayment, of principal and
interest on the Loans, of the Commitment Fee, the Facility Fee and the Letter of
Credit Fee and of all of the other fees to be paid to the Agent and the Lenders
in connection with this Agreement (the Commitment Fee, together with all of such
other fees, being sometimes hereinafter collectively referred to as the "Fees")
shall be made to the Agent at its office set forth in Section 11.2 in funds
immediately available in New York by 12:00 noon on the due date for such
payment. The failure of either Company to make any such payment by such time
shall not constitute a default hereunder, provided that such payment is made on
such due date, but any such payment made after 12:00 noon on such due date shall
be deemed to have been made on the next Domestic Business Day or Eurodollar
Business Day, as the case may be, for the purpose of calculating interest on
amounts outstanding on the Loans. Promptly upon receipt thereof by the Agent,
each payment of principal and interest on the Loans shall be remitted by the
Agent in like funds as received to each Lender pro rata according to its
Outstanding Percentage of the Loans. Promptly upon receipt thereof by the Agent,
each payment of the Commitment Fee shall be remitted by the Agent in like funds
as received to each Lender pro rata according to such Lender's Commitment
Percentage.
(b) If any payment hereunder or under the Notes shall be due and
payable on a day which is not a Domestic Business Day or Eurodollar Business
Day, as the case may be, the due date thereof (except as otherwise provided in
the definition of Eurodollar Interest Period) shall be extended to the next
Domestic Business Day or Eurodollar Business Day, as the case may be, and
(except with respect to payments in respect of the Fees) interest shall be
payable at the applicable rate specified herein during such extension.
3.3 Conversions; Other Matters
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(a) (i) Revolving Credit Conversions. The Borrower may elect at any
time and from time to time to convert one or more Revolving Credit Eurodollar
Advances to a Revolving Credit ABR Advance by giving the Agent at least one
Domestic Business Day's prior irrevocable notice of such election, specifying
the amount to be so converted, provided, that any such conversion shall only be
made on the last day of the Interest Period applicable to each such Revolving
Credit Eurodollar Advance. In addition, the Borrower may elect from time to time
to convert a Revolving Credit ABR Advance to any one or more new Revolving
Credit Eurodollar Advances or to convert any one or more existing Revolving
Credit Eurodollar Advances to any one or more new Revolving Credit Eurodollar
Advances by giving the Agent at least three Eurodollar Business Days' prior
irrevocable notice of such election, specifying the amount to be so converted
and the initial Interest Period relating thereto. Revolving Credit Loans may be
converted pursuant to this Section 3.3(a)(i) in whole or in part, provided that
the amount to be converted to each Revolving Credit Eurodollar Advance, when
aggregated with any Revolving Credit Eurodollar Advance to be made on such date
in accordance with Section 2.1 and having the same Interest Period as such first
Revolving Credit Eurodollar Advance, shall equal no less than $500,000 or an
integral multiple of $100,000 in excess thereof.
(ii) Term Loan Conversions. The Borrower may elect at any time
and from time to time to convert one or more Term Loan Eurodollar Advances to a
Term Loan ABR Advance by giving the Agent at least one Domestic Business Day's
prior irrevocable notice of such election, specifying the amount to be so
converted, provided, that any such conversion shall only be made on the last day
of the Interest Period applicable to each such Term Loan Eurodollar Advance. In
addition, the Borrower may elect from time to time to convert a Term Loan ABR
Advance to any one or more new Term Loan Eurodollar Advances or to convert any
one or more existing Term Loan Eurodollar Advances to any one or more new Term
Loan Eurodollar Advances by giving the Agent at least three Eurodollar Business
Days' prior irrevocable notice of such election, specifying the amount to be so
converted and the initial Interest Period relating thereto. Term Loan may be
converted pursuant to this Section 3.3(a)(ii) in whole or in part, provided that
the amount to be converted to each Term Loan Eurodollar Advance, when aggregated
with any Term Loan Eurodollar Advance to be made on such date in accordance with
Section 2.1 and having the same Interest Period as such first Term Loan
Eurodollar Advance, shall equal no less than $500,000 or an integral multiple of
$100,000 in excess thereof.
(iii) Generally. Notwithstanding anything to the contrary
contained herein, (A) any conversion of an Advance to a Eurodollar Advance shall
only be made on a Eurodollar Business Day, and (B) any conversion of an existing
Eurodollar Advance shall only be made on the last day of the Interest Period
applicable thereto. The Agent shall promptly provide the Lenders with notice of
each election pursuant to this Section 3.3(a).
(b) Each such conversion shall be effected by each Lender by
applying the proceeds of the new ABR Advance or Eurodollar Advance, as the case
may be, to the existing Advance (or portion thereof) being converted (it being
understood that such conversion shall not constitute a borrowing for purposes of
Sections 4, 5 or 6).
(c) Notwithstanding anything in this Agreement to the contrary, upon
the occurrence and during the continuance of a Default or an Event of Default,
the Borrower shall have no right to elect to convert any existing ABR Advance to
a new Eurodollar Advance or to
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convert any existing Eurodollar Advance to a new Eurodollar Advance. In such
event, such ABR Advance shall be automatically continued as an ABR Advance or
such Eurodollar Advance shall be automatically converted to an ABR Advance on
the last day of the Interest Period applicable to such Eurodollar Advance.
(d) Notwithstanding any other provision of any other Loan Document:
(i) If the Borrower shall have failed to elect a Eurodollar
Advance under Section 2.3 or 3.3, as the case may be, in connection with
any borrowing of new Loans or expiration of an Interest Period with
respect to any existing Eurodollar Advance, the amount of the Loans
subject to such borrowing or such existing Eurodollar Advance shall
thereafter be an ABR Advance until such time, if any, as the Borrower
shall elect a new Eurodollar Advance pursuant to this Section 3.3,
(ii) The Borrower shall not be permitted to select (A) any
Revolving Credit Eurodollar Advance the Interest Period in respect of
which ends later than the Revolving Credit Commitment Termination Date, or
(B) any Term Loan Eurodollar Advance the Interest Period in respect of
which ends later than September 30, 2002,
(iii)When electing a Term Loan Eurodollar Advance the Interest
Period in respect of which extends beyond any date on which a scheduled
amortization payment is required pursuant to Section 2.6, the Borrower
shall select Interest Periods such that, on such date, the outstanding
principal balance of all Term Loan ABR Advances, when added to the
aggregate principal balance of each Term Loan Eurodollar Advance the
Interest Period in respect of which shall end prior to such date, shall
equal or exceed the amount of the prepayment or reduction, as the case may
be, required to be made on such date, and
(iv) The Borrower shall not be permitted to have more than
fifteen Eurodollar Advances outstanding at any one time.
3.4 Interest Rates and Payment Dates
(a) Prior to Maturity. Except as otherwise provided in Section
3.4(b) and Section 3.4(c), the Loans shall bear interest on the unpaid principal
balance thereof at the applicable interest rate or rates per annum set forth
below:
ADVANCES RATE
-------- ----
Each ABR Advance Alternate Base Rate minus 1.00%.
Each Eurodollar Advance Eurodollar Rate applicable thereto plus
the Applicable Margin.
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(b) Default Rate. Upon the occurrence and during the continuance of
any Event of Default under Sections 9.1(a) or 9.1(b) or as a result of any
default by the Borrower under Section 8 or Sections 7.11, 7.12 or 7.13, and 30
days after the occurrence and during the continuance of any other Event of
Default, the unpaid principal balance of each Loan shall bear interest at a rate
per annum equal to 2% plus the rate which would otherwise be applicable from
time to time pursuant to Section 3.4(a).
(c) Highest Lawful Rate. Notwithstanding anything to the contrary
contained in this Agreement, at no time shall the interest rate payable on any
Lender's Loans or in respect of any Reimbursement Obligation, together with the
Fees and other amounts payable to such Lender or the Issuer hereunder or with
respect hereto, to the extent the same constitute or are deemed to constitute
interest, exceed the Highest Lawful Rate with respect to such Lender or the
Issuer, as the case may be. If in respect of any period during the term of this
Agreement, any amount paid hereunder to any Lender or the Issuer, to the extent
the same shall (but for the provisions of this Section 3.4) constitute or be
deemed to constitute interest on a Loan of such Lender or Reimbursement
Obligation of the Issuer, would exceed the maximum amount of interest permitted
by the Highest Lawful Rate applicable thereto during such period (such amount
being hereinafter referred to as an "Unqualified Amount"), then (i) such
Unqualified Amount shall be applied or shall be deemed to have been applied as a
prepayment of such Loan or Reimbursement Obligation, as the case may be, and
(ii) if in any subsequent period during the term of this Agreement, all amounts
payable hereunder in respect of such period which constitute or shall be deemed
to constitute interest on a Loan of such Lender or Reimbursement Obligation
shall be less than the maximum amount of interest permitted by the Highest
Lawful Rate applicable to such Lender or the Issuer, as the case may be, during
such period, then the Borrower shall pay to such Lender or the Issuer, as the
case may be, in respect of such period an amount (each a "Compensatory Interest
Payment") equal to the lesser of (x) a sum which, when added to all such
amounts, would equal the maximum amount of interest permitted by the Highest
Lawful Rate applicable to such Lender or the Issuer, as the case may be, during
such period, and (y) an amount equal to the aggregate sum of all Unqualified
Amounts less all other Compensatory Interest Payments.
(d) General. Interest shall be payable in arrears on each Interest
Payment Date and upon each payment (including each prepayment) of the Loans. Any
change in the interest rate on the Loans resulting from a change in the
Alternate Base Rate, any reserve requirement, or any deposit insurance
assessment shall become effective as of the opening of business on the day on
which such change shall become effective. The Agent shall, as soon as
practicable, notify the Borrower and the Lenders of the effective date and the
amount of each such change in the KBNA Rate, but any failure to so notify shall
not in any manner affect the obligation of the Borrower to pay interest on the
Loans in the amounts and on the dates set forth herein. Each determination by
the Agent of the Alternate Base Rate and the Eurodollar Rate pursuant to this
Agreement shall be conclusive and binding on the Borrower absent manifest error.
The Borrower acknowledges that to the extent interest payable on the Loans is
based on the Alternate Base Rate, such rate is only one of the bases for
computing interest on loans made by the Lenders, and by basing interest payable
on the ABR Advances on the Alternate Base Rate, the Lenders have not committed
to charge, and the Borrower has not in any way bargained for,
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interest based on a lower or the lowest rate at which the Lenders may now or in
the future make extensions of credit to other Persons. Interest on ABR Advances
shall be calculated on the basis of a 365(6) day year for the actual number of
days elapsed, and interest on Eurodollar Advances shall be calculated on the
basis of a 360 day year for the actual number of days elapsed.
3.5 Indemnification for Loss
Notwithstanding anything contained herein to the contrary, if either
Company shall fail to borrow or determine not to convert an Advance after it
shall have given notice to do so in which it shall have requested a Eurodollar
Advance pursuant to Section 2.3 or 3.3, as the case may be, or if a Eurodollar
Advance shall be terminated for any reason prior to the last day of the Interest
Period applicable thereto, or if any repayment or prepayment of all or any part
of the principal amount of a Eurodollar Advance is made for any reason on a date
which is prior to the last day of the Interest Period applicable thereto, the
Companies agree to indemnify each Lender against, and to pay on demand directly
to such Lender the amount (calculated by such Lender using any method chosen by
such Lender which is customarily used by such Lender for such purpose) equal to
any loss or expense suffered by such Lender as a result of such failure to
borrow or convert, or such termination, repayment or prepayment, including any
loss, cost or expense suffered by such Lender in liquidating or employing
deposits acquired to fund or maintain the funding of such Eurodollar Advance, or
redeploying funds prepaid or repaid, in amounts which correspond to such
Eurodollar Advance, and any internal processing charge customarily charged by
such Lender in connection therewith.
3.6 Reimbursement for Costs, Etc.
(a) If at any time or from time to time there shall occur a
Regulatory Change and the Issuer or any Lender shall have determined that such
Regulatory Change
(i) shall have had or will thereafter have the effect of
reducing (A) the rate of return on the Issuer's or such Lender's capital
or the capital of any Person directly or indirectly owning or controlling
the Issuer or such Lender (each a "Control Person"), or (B) the asset
value (for capital purposes) to the Issuer, such Lender or such Control
Person, as applicable, of the Reimbursement Obligations, any participation
therein or Eurodollar Advances or any participation therein, in any case
to a level below that which the Issuer, such Lender or such Control Person
could have achieved or would thereafter be able to achieve but for such
Regulatory Change (after taking into account the Issuer's, such Lender's
or such Control Person's policies regarding capital),
(ii) will impose, modify or deem applicable any reserve,
asset, special deposit or special assessment requirements on deposits
obtained in the interbank eurodollar market in connection with Eurodollar
Advances (excluding, with respect to any Eurodollar Advance, any such
requirement which is included in the determination of the rate applicable
thereto),
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(iii)will subject the Issuer or such Lender to any Tax
(including, without limitation, any documentary or stamp tax) with respect
to this Agreement or any Note, or
(iv) change the basis of taxation of payments to the Issuer or
such Lender of principal, interest or fees payable under this Agreement or
any Note (except for any Excluded Tax and any changes in the rate of tax
on the Issuer's or such Lender's overall net income imposed by the United
States or any other jurisdiction),
then, in each such case, within ten days after demand by the Issuer or such
Lender, the Companies shall pay to the Issuer, such Lender or such Control
Person, as the case may be, such additional amount or amounts as shall be
sufficient to compensate the Issuer, such Lender or such Control Person, as the
case may be, for (1) any such reduction referred to in clause (a)(i) of this
Section 3.6, and (2) any taxes, losses, costs or expenses (excluding general
administrative and overhead costs) attributable to the Issuer's or such Lender's
compliance during the term hereof with such Regulatory Change.
(b) The Issuer and each Lender agree to provide the Borrower with
notice of each Regulatory Change which would require the Borrower to make a
payment to the Issuer or such Lender, as the case may be, under this Section 3.6
promptly upon such Lender obtaining actual knowledge thereof and determining
that it intends to require the Borrower to make such payment.
3.7 Illegality of Funding
Notwithstanding any other provision hereof, if any Lender shall
reasonably determine that any Regulatory Change shall make it unlawful for such
Lender to make or maintain any type of Eurodollar Advance as contemplated by
this Agreement, (a) the commitment of such Lender to make such type of
Eurodollar Advance or convert ABR Advances to such type of Eurodollar Advance
shall forthwith be suspended, and (b) such Lender's Loans then outstanding as
such type of Eurodollar Advance, if any, shall be converted automatically to an
ABR Advance on the last day of the then current Interest Period applicable
thereto or at such earlier time as may be required in connection with such
Regulatory Change. If the commitment of any Lender with respect to any type of
Eurodollar Advance is suspended pursuant to this Section 3.7 and such Lender
shall notify the Agent and the Borrower that it is once again legal for such
Lender to make or maintain such type of Eurodollar Advance, such Lender's
commitment to make or maintain such type of Eurodollar Advance shall be
reinstated.
3.8 Option to Fund; Substituted Interest Rate
(a) Each Lender has indicated that, if the Borrower requests a
Eurodollar Advance, such Lender may wish to purchase one or more deposits in
order to fund or maintain its funding of its Commitment Percentage of such
Eurodollar Advance during the Interest Period with respect thereto; it being
understood that the provisions of this Agreement relating to such funding are
included only for the purpose of determining the rate of interest to be paid in
respect of such Eurodollar Advance and any amounts owing under Sections 3.5 and
3.6. Each Lender
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shall be entitled to fund and maintain its funding of all or any part of each
Eurodollar Advance in any manner it sees fit, but all such determinations
hereunder shall be made as if each Lender had actually funded and maintained its
Commitment Percentage of each Eurodollar Advance during the applicable Interest
Period through the purchase of deposits in an amount equal to its Commitment
Percentage of such Eurodollar Advance having a maturity corresponding to such
Interest Period. Any Lender may fund its Commitment Percentage of each
Eurodollar Advance from or for the account of any branch or office of such
Lender as such Lender may choose from time to time.
(b) In the event that (i) the Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that by reason
of circumstances affecting the interbank eurodollar market or the domestic
certificate of deposit market either adequate and reasonable means do not exist
for ascertaining the Eurodollar Rate applicable pursuant to Section 2.3 or
Section 3.3, or (ii) the Required Lenders shall have notified the Agent that
they have determined (which determination shall be conclusive and binding on the
Borrower and the Agent) that the applicable Eurodollar Rate will not adequately
and fairly reflect the cost to such Lenders of maintaining or funding loans
bearing interest based on such Eurodollar Rate with respect to any portion of
the Loans that the Borrower has requested be made as a Eurodollar Advance or any
Eurodollar Advance that will result from the requested conversion of any portion
of the Loans into a Eurodollar Advance (each, an "Affected Advance"), the Agent
shall promptly notify the Borrower and the Lenders (by telephone or otherwise,
to be promptly confirmed in writing) of such determination on or, to the extent
practicable, prior to the requested Borrowing Date or conversion date for such
Affected Advance. If the Agent shall give such notice, (A) any Affected Advances
shall be made as ABR Advances, (B) the Loans (or any portion thereof) that were
to have been converted to Affected Advances shall be converted to or continued
as ABR Advances, and (C) any outstanding Affected Advances shall be converted,
on the last day of the then current Interest Period with respect thereto, to ABR
Advances. Until any notice under clauses (i) or (ii), as the case may be, of
this Section 3.8(b) has been withdrawn by the Agent (by notice to the Borrower)
promptly upon either (x) the Agent having determined that such circumstances
affecting the relevant market no longer exist and that adequate and reasonable
means do exist for determining the Eurodollar Rate pursuant to Section 2.3 or
Section 3.3, or (y) the Agent having been notified by such Required Lenders that
circumstances no longer render the Loans (or any portion thereof) Affected
Advances, no further Eurodollar Advances of the affected type shall be required
to be made by the Lenders nor shall the Borrower have the right to convert all
or any portion of the Loans to such type of Eurodollar Advances.
3.9 Certificates of Payment and Reimbursement
The Issuer and each Lender severally agree, in connection with any
request by it for payment or reimbursement pursuant to Section 3.5 or 3.6, to
provide the Borrower with a certificate, signed by an officer of the Issuer or
such Lender, as the case may be, setting forth a description in reasonable
detail of any such payment or reimbursement. Each Lender's determination of such
payment or reimbursement shall be conclusive absent manifest error.
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3.10 Taxes; Net Payments
(a) All payments made by the Companies under the Loan Documents
shall be made free and clear of, and without reduction for or on account of, any
taxes required by law to be withheld from any amounts payable under the Loan
Documents excluding (all such excluded taxes being herein referred to as
"Excluded Taxes"), in the case of the Agent, the Issuer, and each Lender (each,
an "Indemnified Tax Person"), (i) taxes imposed on the net income of such
Indemnified Tax Person by the jurisdiction in which such Indemnified Tax Person
has its situs of organization or in which such Indemnified Tax Person's lending
office is located, (ii) taxes imposed on the net income of such Indemnified Tax
Person other than those taxes described in clause (i), provided that such taxes
shall be included if and to the extent that such taxes would not have been
incurred but for the situs of organization, any place of business or the
activities of either Company, in the jurisdiction imposing the tax, (iii) taxes
(other than withholding taxes) imposed on or measured by the gross income, gross
receipts or capital of such Indemnified Tax Person, provided that such taxes
shall be included if and to the extent that such taxes would not have been
incurred but for the situs of organization, any place of business or the
activities of either Company, in the jurisdiction imposing the tax, (iv) any
withholding taxes imposed with respect to a payment by either Company under the
Loan Documents to any person who has become a Lender as a result of an
Assignment to the extent such withholding arises as a result of Section
881(c)(3)(A) of the Code, (v) any tax imposed on a transfer of a Note, and (vi)
any tax imposed as a result of the willful misconduct of such Indemnified Tax
Person (all such taxes other than Excluded Taxes being herein referred to as
"Taxes"). In the event that either Company is prohibited by law from making
payments under the Loan Documents free of deductions or withholdings in respect
of Taxes, then the Companies shall pay such additional amounts to the Agent, for
the benefit of the Issuer and the Lenders, as may be necessary in order that the
actual amounts received by the Issuer and each Lender in respect of interest and
any other amounts payable hereunder, under its Note and under the other Loan
Documents after deduction or withholding (and after payment of any additional
taxes or other charges due as a consequence of the payment of such additional
amounts, taking into account any tax savings realized as a result of deductions,
credits or other allowances) shall equal the amount that would have been
received if such deduction or withholding were not required. In the event that
any such deduction or withholding with respect to Taxes can be reduced or
nullified as a result of the application of any relevant double taxation
convention, the Agent, the Issuer or the relevant Lender, as the case may be,
will cooperate with the Borrower (at the sole expense of the Borrower) in making
application to the relevant taxing authorities to seek to obtain such reduction
or nullification, provided, however, that the Agent, the Issuer and the Lenders
shall have no obligation to engage in litigation with respect thereto. If either
Company shall make any payments under this Section 3.10 or shall make any
deductions or withholdings from amounts paid in accordance with this Section
3.10, the Companies shall, as promptly as practicable thereafter, forward to the
Agent original or certified copies of official receipts or other evidence
acceptable to the Agent establishing such payment and the Agent in turn shall
distribute copies of such receipts to the Issuer and each Lender. In the event
that the Agent, the Issuer or any Lender shall have determined that it received
a refund or credit for Taxes paid by the Companies under this Section 3.10, the
Agent, as the case may be, the Issuer or such Lender, as the case may be, shall
promptly notify the Agent and the Borrower of such fact and shall remit to the
Borrower the amount of such refund or credit applicable to the payments made by
the Companies in respect of the Issuer or such Lender under this Section 3.10.
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(b) The Agent, the Issuer, each Lender and each Eligible Institution
to which a participation has been granted pursuant to Section 11.7(d) (each a
"Participant") shall deliver to the Borrower such certificates, documents, or
other evidence as the Borrower may reasonably require from time to time as are
necessary to establish that such Person is not subject to withholding under
Section 1441, 1442 or 3406 of the Code or any similar provision of the laws of
any state, local or foreign jurisdiction or as may be necessary to establish,
under any law imposing upon either Company hereafter, an obligation to withhold
any portion of the payments made by such Company under the Loan Documents, that
payments to the Agent on behalf of such Person are not subject to withholding.
Notwithstanding any provision herein to the contrary, neither Company shall have
any obligation to pay to any such Person any amount which such Company is liable
to withhold (and shall have no obligation to otherwise indemnify the Issuer or
any Lender with respect to such amount) to the extent that such liability is due
to the failure of such Person to timely deliver any statement of exemption
required pursuant to this Section 3.10(b).
3.11 Commitment Fees
The Borrower agrees to pay to the Agent for the account of the
Lenders a fee (the "Commitment Fee"), payable quarterly in arrears during the
Revolving Credit Commitment Period on the last day of each March, June,
September and December of each year, commencing on the last day of the fiscal
quarter in which the Effective Date shall have occurred, and on the Revolving
Credit Commitment Termination Date, at a rate per annum equal to the rate for
Commitment Fees set forth in the definition of "Applicable Margin" on the
average daily excess of the (a) the Aggregate Revolving Credit Commitment
Amount, over (b) the sum of the Aggregate Revolving Credit Exposure. In
addition, upon each reduction of the Aggregate Revolving Credit Commitment
Amount, the Borrower shall pay the Commitment Fee accrued on the amount of such
reduction through the date of such reduction, and upon the termination of the
Revolving Credit Commitments the Borrower shall pay the Commitment Fee accrued
to the date of such termination. The Commitment Fee shall be computed on the
basis of a 360 day year for the actual number of days elapsed.
3.12 Facility Fee
The Borrower agrees to pay to the Agent at closing a facility fee
(the "Facility Fee"), for the pro rata account of the Lenders, in an aggregate
amount equal to 0.20% of the sum of the Aggregate Revolving Credit Commitment
Amount plus the Aggregate Term Loan Commitment Amount.
3.13 Letter of Credit Fee
The Borrower agrees to pay to the Agent, for the account of the
Lenders, fees (each a "Letter of Credit Fee") with respect to each Letter of
Credit for the period from and including the Effective Date to and including the
expiration date thereof, at a rate per annum
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equal to the rate for Letter of Credit Fees set forth in the definition of
"Applicable Margin" in effect on such date multiplied by the average daily
amount available to be drawn under such Letter of Credit. Each Letter of Credit
Fee shall be (i) calculated on the basis of a 360 day year for the actual number
of days elapsed and (ii) payable quarterly in arrears on the last day of each
March, June, September and December of each year, on the expiration or
cancellation of such Letter of Credit, and on the Revolving Credit Commitment
Termination Date.
3.14 Replacement of Lenders
(a) If any Lender defaults in its obligations to make Loans or to
fund its Commitment Percentage of the unreimbursed amount of any draft drawn and
honored under any Letter of Credit, (b) if any Lender has not signed an
amendment, waiver or consent which must be signed by all the Lenders to become
effective, and such amendment, waiver or consent has been signed by Required
Lenders, or (c) upon the occurrence of any event giving rise to the operation of
Sections 3.5, 3.6 or 3.10 with respect to any Lender which results in such
Lender charging to either Company increased costs, then the Borrower shall have
the right, if no Default or Event of Default then exists, to replace such Lender
(the "Replaced Lender") with any other Lender or with one or more Eligible
Institutions acceptable to the Agent (each a "Replacement Lender"), provided,
that:
(i) at the time of any replacement pursuant to this Section
3.14, the Replacement Lender shall enter into one or more assignment agreements
pursuant to Section 11.7(c) (and with all fees payable pursuant to said Section
11.7(c) to be paid by the Replacement Lender) pursuant to which the Replacement
Lender shall acquire all of the Commitments and outstanding Loans of, and
participations in Letters of Credit by, the Replaced Lender and, in connection
therewith, shall pay to (x) the Replaced Lender in respect thereof an amount
equal to the sum of (A) an amount equal to the principal of, and accrued
interest on, all outstanding Loans and Letters of Credit participations of the
Replaced Lender, (B) an amount equal to all accrued, but theretofore unpaid,
Fees owing to the Replaced Lender pursuant to Sections 3.11 and 3.13, and (y)
the Issuer an amount equal to such Replaced Lender's Commitment Percentage of
any unpaid drawing to the extent such amount was not theretofore funded by such
Replaced Lender; and
(ii) all obligations of the Companies owing to the Replaced
Lender (other than those specifically described in clause (i) above in respect
of which the assignment purchase price has been, or is concurrently being, paid)
shall be paid in full to such Replaced Lender concurrently with such
replacement.
Upon the execution of the respective assignment documentation, the payment of
amounts referred to in clauses (i) and (ii) above and, if so requested by the
Replacement Lender, delivery to the Replacement Lender of the appropriate Notes
executed by the Borrower and the Debtor, the Replacement Lender shall become a
Lender hereunder and the Replaced Lender shall cease to constitute a Lender
hereunder except with respect to indemnification provisions under this Agreement
which shall survive as to such Replaced Lender.
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3.15 Change of Lending Office
Each Lender agrees that upon the occurrence of any event giving rise
to the operation of Sections 3.5, 3.6 or 3.10 with respect to such Lender, it
will, if requested by the Borrower, use reasonable efforts to designate another
lending office of such Lender for any Loans or Letters of Credit affected by
such event, provided, that such designation is made on such terms that such
Lender or its respective lending offices suffer no economic, legal or regulatory
disadvantage as a result thereof, with the object of avoiding the consequences
of the event giving rise to the operation of such Sections.
4. REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement and to make
the Loans, and to induce the Issuer to enter into this Agreement and issue the
Letters of Credit, the Borrower hereby makes the following representations and
warranties to the Agent, the Issuer and the Lenders:
4.1 Subsidiaries; Capital Stock
As of the date of this Agreement and immediately after giving effect
to the Merger, the Borrower has only the Subsidiaries set forth on, and the
authorized, issued and outstanding capital stock of the Borrower and each such
Subsidiary (or partnership or other interests, as the case may be) is as set
forth on, Schedule 4.1. Except as set forth on Schedule 4.1, the shares of, or
partnership or other interests in, each Subsidiary are owned beneficially and of
record by the Borrower or another Subsidiary, are free and clear of all Liens
except as otherwise permitted by Section 8.2, and are duly authorized, validly
issued, fully paid and, except in the case of shares of Subsidiaries organized
under New York law, as provided in Section 630 of the New York Business
Corporation Law, nonassessable. As of the date of this Agreement and immediately
after giving effect to the Merger, except as set forth on Schedule 4.1, (a)
neither the Borrower nor any Subsidiary has issued any securities convertible
into, or options or warrants for, any common or preferred equity securities
thereof, (b) there are no agreements, voting trusts or understandings binding
upon the Borrower or any Subsidiary with respect to the voting securities of the
Borrower or any Subsidiary or affecting in any manner the sale, pledge,
assignment or other disposition thereof, including any right of first refusal,
option, redemption, call or other right with respect thereto, whether similar or
dissimilar to any of the foregoing, and (c) the Borrower owns, directly or
indirectly, all of the outstanding capital stock of each Subsidiary.
4.2 Existence and Power
Each of the Borrower and each Subsidiary is duly organized, validly
existing and, except as set forth on Schedule 4.1, in good standing under the
laws of the jurisdiction of its formation, has all requisite power and authority
to own its Property and to carry on its
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business as now conducted, and is in good standing and authorized to do business
in each jurisdiction in which the failure so to qualify would be likely to have
a Material Adverse effect.
4.3 Authority
Each of the Borrower and each Subsidiary has full power and
authority to enter into, execute, deliver and perform the terms of the
Transaction Documents to which it is a party, all of which have been duly
authorized by all proper and necessary corporate or partnership action, as the
case may be, and are in full compliance with its certificate of incorporation
and by-laws or partnership agreement, as the case may be. Except as set forth on
Schedule 4.3, no consent or approval of, or other action by, shareholders of the
Borrower, any Governmental Authority or any other Person, which has not already
been obtained, is required to authorize in respect of the Borrower or any
Subsidiary, or is required in connection with the execution, delivery and
performance by the Borrower and each Subsidiary of, the Transaction Documents to
which it is a party, or is required as a condition to the enforceability against
the Borrower or such Subsidiary of the Loan Documents to which it is a party.
4.4 Binding Agreement
The Loan Documents constitute the valid and legally binding
obligations of the Borrower and each Subsidiary to the extent the Borrower or
such Subsidiary, as the case may be, is a party thereto, enforceable in
accordance with their respective terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
equitable principles relating to the availability of specific performance as a
remedy.
4.5 Litigation
Except as set forth on Schedule 4.5, there are no actions, suits,
arbitration proceedings or claims (whether purportedly on behalf of the
Borrower, any Subsidiary or otherwise) pending or, to the knowledge of the
Borrower, threatened against the Borrower or any Subsidiary, or maintained by
the Borrower or any Subsidiary, or which affect the Property of the Borrower or
such Subsidiary, at law or in equity, before any Governmental Authority which
would be likely to have a Material Adverse effect. There are no proceedings
pending or, to the knowledge of the Borrower, threatened against the Borrower or
any Subsidiary (a) which call into question the validity or enforceability of,
or otherwise seek to invalidate any Transaction Document, or (b) which would be
likely to have, individually or in the aggregate, a material and adverse affect
any of the transactions contemplated by any Transaction Document.
4.6 No Conflicting Agreements
(a) Neither the Borrower nor any Subsidiary is in default under any
agreement to which it is a party or by which it or any of its Property is bound,
which default would be likely to have a Material Adverse effect. No notice to,
or filing with, any Governmental Authority is required for the due execution,
delivery and performance by the Borrower or any Subsidiary of the Transaction
Documents to which it is a party other than the UCC-1 financing statements and
UCC-3 termination statements contemplated by the Loan Documents.
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(b) No provision of any existing mortgage, indenture, contract,
agreement, statute, rule, regulation, judgment, decree or order binding on the
Borrower or any Subsidiary or affecting the Property of the Borrower or any
Subsidiary conflicts with, or requires any consent which has not already been
obtained under, or would in any way prevent the execution, delivery or
performance by the Borrower or any Subsidiary of the terms of, any Loan Document
to which it is a party. The execution, delivery or performance by the Borrower
and each Subsidiary of the terms of each Loan Document to which it is a party
will not constitute a default under, or result in the creation or imposition of,
or obligation to create, any Lien upon the Property of the Borrower or any
Subsidiary pursuant to the terms of any such mortgage, indenture, contract or
agreement.
4.7 Taxes
Except as set forth on Schedule 4.7, the Borrower and each
Subsidiary has filed or caused to be filed all tax returns required to be filed
on or before the date on which this representation and warranty is being made,
and has paid, or has made adequate provision for the payment of, all taxes shown
to be due and payable on said returns or in any assessments made against them,
the failure of which to file or pay would be likely to have a Material Adverse
effect, and no tax Liens have been filed against the Borrower or any Subsidiary
and no claims are being asserted with respect to such taxes which are required
by GAAP (as in effect on the Effective Date) to be reflected in the Financial
Statements and are not so reflected therein. The charges, accruals and reserves
on the books of the Borrower and each Subsidiary with respect to all federal,
state, local and other taxes are considered by the management of the Borrower to
be adequate, and, except as set forth on Schedule 4.7, the Borrower knows of no
unpaid assessment which is or might be due and payable against it or any
Subsidiary or any Property of the Borrower or any Subsidiary, except such
thereof as are being contested in good faith and by appropriate proceedings
diligently conducted, and for which adequate reserves have been set aside in
accordance with GAAP.
4.8 Compliance with Applicable Laws; Filings
Neither the Borrower nor any Subsidiary is in default with respect
to any judgment, order, writ, injunction, decree or decision of any Governmental
Authority which default would be likely to have a Material Adverse effect.
Except as set forth on Schedule 4.8, the Borrower and each Subsidiary is
complying with all applicable statutes, rules and regulations of all
Governmental Authorities, a violation of which would be likely to have a
Material Adverse effect. Except as set forth on Schedule 4.8, the Borrower and
each Subsidiary has filed or caused to be filed with all Governmental
Authorities all reports, applications, documents, instruments and information
required to be filed pursuant to all applicable laws, rules, regulations and
requests which, if not so filed, would be likely to have a Material Adverse
effect.
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4.9 Governmental Regulations
Neither the Borrower nor any Subsidiary is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, or
the Investment Company Act of 1940, each as amended, or is subject to any
statute or regulation which regulates the incurrence of Indebtedness, including
statutes or regulations relative to common or contract carriers or to the sale
of electricity, gas, steam, water, telephone, telegraph or other public utility
services. The incurrence of Indebtedness under the Loan Documents by the
Borrower is not prohibited or otherwise restricted by the Public Utility Holding
Company Act of 1935, the Federal Power Act, or the Investment Company Act of
1940, each as amended, or any statute or regulation which regulates the
incurrence of Indebtedness, including statutes or regulations relative to common
or contract carriers or to the sale of electricity, gas, steam, water,
telephone, telegraph or other public utility services.
4.10 Federal Reserve Regulations
The Borrower is not engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying any margin stock within the meaning of Regulations G, U or X of the
Board of Governors of the Federal Reserve System, as amended. After giving
effect to the making of each Loan and the use of each Letter of Credit, Margin
Stock will constitute less than 25% of the assets (as determined by any
reasonable method) of the Borrower and the Subsidiaries. Anything in this
Agreement to the contrary notwithstanding, no Lender shall be obligated to
extend credit to the Borrower in violation of any limitation or prohibition
provided by any applicable law, regulation or statute, including Regulations G,
U or X of the Board of Governors of the Federal Reserve System.
4.11 No Misrepresentation
No representation or warranty contained in any Loan Document and no
certificate or written report furnished or to be furnished by the Borrower in
connection with the transactions contemplated hereby, contains or will contain,
as of its date, a misstatement of material fact, or omits or will omit to state,
as of its date, a material fact required to be stated in order to make the
statements therein contained not misleading in the light of the circumstances
under which made.
4.12 Plans
Each Employee Benefit Plan of the Borrower and each Subsidiary is in
compliance with ERISA and the Code, where applicable, in all material respects.
At the date hereof (a) the amount of all Unfunded Pension Liabilities under the
Pension Plans does not exceed $500,000, and (b) the amount of the aggregate
Unrecognized Retiree Welfare Liability under all applicable Employee Benefit
Plans does not exceed $100,000. The Borrower, each Subsidiary and each ERISA
Affiliate have complied with the requirements of Section 515 of ERISA with
respect to each Multiemployer Plan. At the date hereof, the aggregate potential
annual withdrawal liability payments, as determined in accordance with Title IV
of ERISA, for which the Borrower, each Subsidiary and each ERISA Affiliate would
become obligated in the event of a complete or partial withdrawal from all
Multiemployer Plans is $100,000. The Bor-
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rower, each Subsidiary and each ERISA Affiliate has, as of the date hereof, made
all contributions or payments to or under each such Pension Plan or
Multiemployer Plan required by law or the terms of such Pension Plan or
Multiemployer Plan or any contract or agreement. No material liability to the
PBGC has been, or is expected by the Borrower, any Subsidiary or any ERISA
Affiliate to be, incurred by the Borrower, any Subsidiary or any ERISA
Affiliate. Liability, as referred to in this Section 4.12, includes any joint
and several liability. Each Employee Benefit Plan which is a group health plan
within the meaning of Section 5000(b)(1) of the Code is in material compliance
with the continuation of health care coverage requirements of Section 4980B of
the Code.
4.13 Environmental Matters
Except as disclosed in Schedule 4.13, neither the Borrower nor any
Subsidiary (a) has received written notice or otherwise learned of any claim,
demand, action, event, condition, report or investigation indicating or
concerning any potential or actual liability which individually or in the
aggregate would be likely to have a Material Adverse effect, arising in
connection with (i) any non-compliance with or violation of the requirements of
any applicable federal, state or local environmental health or safety statute or
regulation, or (ii) the release or threatened release of any toxic or hazardous
waste, substance or constituent, or other substance into the environment, (b) to
the best knowledge of the Borrower, has any threatened or actual liability in
connection with the release or threatened release of any toxic or hazardous
waste, substance or constituent, or other substance into the environment which
individually or in the aggregate would be likely to have a Material Adverse
effect, (c) has received notice of any federal or state investigation evaluating
whether any remedial action is needed to respond to a release or threatened
release of any toxic or hazardous waste, substance or constituent or other
substance into the environment for which the Borrower or any Subsidiary is or
would be liable, which liability would be likely to have a Material Adverse
effect, or (d) has received notice that the Borrower or any Subsidiary is or may
be liable to any Person under the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, 42 U.S.C. Section 9601 et seq., or
any analogous state law, which liability would be likely to have a Material
Adverse effect. The Borrower and each Subsidiary is in compliance with the
financial responsibility requirements of federal and state environmental laws to
the extent applicable, including those contained in 40 C.F.R., parts 264 and
265, subpart H, and any analogous state law, except in those cases in which the
failure so to comply would not be likely to have a Material Adverse effect.
4.14 Financial Statements
The Borrower has heretofore delivered to the Lenders copies of
(a)(i) the audited consolidated Balance Sheet of Old IPL as of July 31, 1996,
and the related Consolidated Statement of Income and Consolidated Statement of
Cash Flows, for the fiscal year then ended, and (ii) the unaudited Consolidated
Balance Sheet of Old IPL as of April 30, 1997, and the related Consolidated
Statement of Income and Consolidated Statement of Cash Flows, for the
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three fiscal quarters then ended (collectively, together with the related notes
and schedules, the "Old IPL Financial Statements"), and (b)(i) the audited
Consolidated Balance Sheet of Old VSC as of June 30, 1996, and the related
Consolidated Statement of Income and Consolidated Statement of Cash Flows, for
the fiscal year then ended, and (ii) the unaudited Consolidated Balance Sheet of
Old VSC as of March 31, 1997, and the related Consolidated Statement of Income
and Consolidated Statement of Cash Flows, for the three fiscal quarters then
ended (collectively, together with the related notes and schedules, the "Old VSC
Financial Statements" and, together with the Old IPL Financial Statements, the
"Financial Statements"). The Old IPL Financial Statements fairly present the
Consolidated financial condition and results of the operation of Old IPL and its
consolidated subsidiaries as of the dates and for the periods indicated therein
and have been prepared in conformity with GAAP as then in effect (but, in the
case of such unaudited financial statements, without footnotes and subject to
year-end adjustments). The Old VSC Financial Statements fairly present the
consolidated financial condition and results of the operations of Old VSC and
its subsidiaries as of the dates and for the periods indicated therein and have
been prepared in conformity with GAAP as then in effect (but, in the case of
such unaudited financial statements, without footnotes and subject to year-end
adjustments). Neither Old IPL nor any consolidated subsidiary thereof has any
obligation or liability of any kind (whether fixed, accrued, contingent,
unmatured or otherwise) which, in accordance with GAAP as then in effect, should
have been disclosed in the IPL Financial Statements and was not. Neither Old VSC
nor any subsidiary thereof has any obligation or liability of any kind (whether
fixed, accrued, contingent, unmatured or otherwise) which, in accordance with
GAAP as then in effect, should have been disclosed in the Old VSC Financial
Statements and was not. Since July 31, 1996, there has been no Material Adverse
change, and (except as contemplated by the Merger Documents) the Borrower and
each Subsidiary have conducted their businesses only in the ordinary course.
4.15 Combined and Pro-forma Financial Statements
The Borrower has heretofore delivered to the Lenders a copy of the
unaudited pro-forma condensed combined Balance Sheet of Old IPL (together with
its consolidated subsidiaries) and Old VSC (together with its consolidated
subsidiaries) as of March 31, 1997 (the "Combined Balance Sheet"), together with
the related unaudited pro-forma condensed combined Statements of Income for the
nine months ended March 31, 1997 (the "Combined Income Statement", and, together
with the Combined Balance Sheet, the "Combined Financial Statements"). The
Combined Financial Statements fairly present the pro-forma financial position
and results of operations of Old IPL and Old VSC and their respective
consolidated subsidiaries as of the dates and for the periods indicated therein,
assuming, in the case of the Combined Balance Sheet, that the Merger and certain
related transactions described in the notes thereto occurred as of March 31,
1997 and, in the case of the Combined Income Statements, that the Merger and
such related transactions occurred as of July 1, 1995. The Combined Financial
Statements have been prepared based upon certain good faith estimates by Old IPL
and Old VSC, are not necessarily indicative of the actual results of operations
that would have occurred had the Merger and such related transactions been
consummated as of the dates indicated above or of operating results that may be
obtained in the future.
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4.16 Financial Condition
Immediately after the consummation of the Initial Transactions and
on each Borrowing Date (a) the sum of the assets, at a fair valuation, of the
Borrower exceeds its debts, (b) the Borrower has not incurred or intended to,
and does not believe that it will, incur debts beyond its ability to pay such
debts as such debts mature, and (c) the Borrower has sufficient capital with
which to conduct its business.
4.17 Merger Documents
Immediately after the consummation of the Initial Transactions and
on each Borrowing Date, the Merger Documents shall be in full force and effect
and no term or provision thereof has been amended or waived, except as may be
permitted by Section 8.10 or as described in Schedule 4.17.
5. CONDITIONS OF CREDIT - THE FIRST BORROWING DATE
In addition to the requirements set forth in Section 6, the obligation of
each Lender to make one or more Loans, and the obligation of the Issuer to issue
one or more Letters of Credit, in either case on the first Borrowing Date, is
subject to the fulfillment of the following conditions prior to or
simultaneously with the making of such Loans or the issuance of such Letters of
Credit:
5.1 Evidence of Partnership and Corporate Action
The Agent shall have received (A) a certificate, dated the first
Borrowing Date, of the Secretary or other analogous counterpart of each Loan
Party (i) attaching a true and complete copy of the resolutions of its Board of
Directors or other analogous managing body and of all documents evidencing all
necessary corporate, partnership or similar action (in form and substance
reasonably satisfactory to the Agent) taken by it to authorize the Loan
Documents to which it is a party and the transactions contemplated thereby, (ii)
attaching a true and complete copy of its organic documents, and (iii) setting
forth the incumbency of the corporate officer(s) or other analogous counterparts
thereof who may sign such Loan Documents, including therein a signature specimen
of such corporate officer or counterpart, as the case may be, and (B) with
respect to each Loan Party other than Interactive Edge, Inc., a certificate of
good standing of the Secretary of State of the State of its formation and of
each other State in which it is qualified to do business.
5.2 Notes
The Borrower shall have delivered to the Agent (for delivery to each
Lender) each of the Notes, executed by the Borrower and the Debtor.
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5.3 Search Reports
The Borrower shall have delivered to the Agent, (a) UCC, federal tax
and judgment lien search reports with respect to each public office where Liens
are authorized or required to be filed against Old IPL, Old VSC or any
subsidiary of either of them (the "Search Reports") disclosing that there are no
Liens of record in such official's office covering any Collateral or showing any
such Person as debtor thereunder (other than Liens permitted hereunder or under
the Guaranty), and (b) a certificate of the Borrower, dated the first Borrowing
Date, certifying that, upon the making of the first Loans, there exist no Liens
on the Collateral other than Liens permitted hereunder or under the Guaranty.
Notwithstanding the foregoing, in the event that the Search Reports disclose the
existence of one or more Liens, other than Liens permitted hereunder or under
the Guaranty, the Borrower shall, with respect to each such disclosed Lien,
deliver to the Agent, on the first Borrowing Date, (A) (1) in the case of
security interests under the Uniform Commercial Code, evidence in all respects
reasonably satisfactory to the Agent that Termination Statements on Form UCC-3
have been filed in the appropriate public office to evidence the release of such
Lien, or (2) in the case of any other type of Lien, such evidence of release of
lien as the Agent shall reasonably require, or (B) (1) in the case of security
interests under the Uniform Commercial Code, Termination Statements on Form
UCC-3, executed by the appropriate creditor and suitable for filing in the
appropriate public office to evidence the release of such Lien, together with a
sum equal to the amount of the filing fees therefor, or (2) in the case of any
other type of Lien, such other evidence of release or releases of Lien as the
Agent shall reasonably require, together with a check in the amount of any
required filing fee therefor.
5.4 Security Agreement
The Borrower shall have delivered to the Agent (a) a security
agreement, dated as of the date hereof, executed by the Borrower and in the form
of Exhibit D (as the same may be amended, supplemented or otherwise modified
from time to time, the "Security Agreement"), (b) one or more share
certificates, representing, with respect to each direct Domestic Subsidiary
thereof, all of the issued and outstanding capital stock of such Domestic
Subsidiary held beneficially or of record by the Borrower, together with one
undated stock power, executed in blank by the Borrower, in respect of each such
certificate, and (c) such UCC Financing Statements, executed by the Borrower, as
shall be reasonably requested by the Agent in order to perfect the security
interest in any collateral security granted under the Security Agreement,
together with a sum equal to the amount of the filing fees therefor.
5.5 Guaranty
Each Wholly-Owned Subsidiary which is a Domestic Subsidiary shall
have delivered to the Agent (a) a guaranty and security agreement, dated as of
the date hereof, executed by such Wholly-Owned Subsidiary and in the form of
Exhibit E (as the same may be amended, supplemented or otherwise modified from
time to time, the "Guaranty"), (b) one or more share certificates, representing,
with respect to each direct Domestic Subsidiary thereof, all of the issued and
outstanding capital stock of such Domestic Subsidiary held beneficially or of
record by such Wholly-Owned Subsidiary, together with one undated stock power,
executed in blank by such Wholly-Owned Subsidiary, in respect of each such
certificate, and (c) such UCC Financing Statements, executed by such
Wholly-Owned Subsidiary, as shall be reasonably
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requested by the Agent in order to perfect the security interest in any
collateral security granted under the Guaranty, together with a sum equal to the
amount of the filing fees therefor.
5.6 Merger
(a) Old VSC shall have merged into and with the Borrower under, and
in accordance with the terms of, the Merger Agreement (the "Merger"), (b) the
Agent shall have received a certificate from the Secretary of the Borrower to
such effect, (c) the Agent shall have received a copy of each of the Merger
Documents, certified to be a true, complete and correct copy thereof on and as
of the Effective Date by an executive officer of the Borrower, and (d) the Agent
shall have received evidence satisfactory to it that the Merger has been
consummated.
5.7 Drop Down
All of the terms and conditions of the Drop Down, including, without
limitation, the assets assigned to and liabilities assumed by the Borrower,
shall be satisfactory to the Agent, the Drop Down shall have occurred, and the
Agent shall have received evidence satisfactory to it that the Drop Down has
been consummated.
5.8 Mortgage and Assignment of Leases
(a) The Agent shall have received the Existing Mortgage which shall
have been duly assigned by the current holder thereof to the Agent, together
with the Gap Mortgage, and the Consolidation Agreement dated the first Borrowing
Date and executed by the Debtor.
(b) The Agent shall have received the Assignment of Leases dated the
first Borrowing Date and executed by the Debtor.
5.9 Title Search and Title Policy
The Agent shall have received such documents, security, assurances
and undertakings as may be reasonably required by the Agent and its counsel
(including without limitation, a marked-up title insurance binder and a current
or redated survey of the Mortgaged Premises which shall be satisfactory in all
respects to the Agent and its counsel).
5.10 Other Real Estate Matters
(a) The Agent shall have received the following with respect to the
Mortgaged Premises and the Mortgage which must be acceptable in all respects to
the Agent and its counsel:
(i) Litigation and No Adverse Change Letters - A letter from
the Borrower, in all respects satisfactory to the Agent, to the effect that
there has been no material ad-
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verse change in the condition of the Mortgaged Premises since the appraisal
conducted by the Agent and describing in detail any litigation pending against
the Borrower, the Debtor and/or the Mortgaged Premises (other than the
certiorari proceedings);
(ii) Insurance - Fire with extended coverage insurance,
general liability, boiler and machinery, and such other insurance, including,
but not limited to, flood insurance if the Mortgaged Premises are in a flood
hazard area as the Agent shall from time to time require in respect of the
Mortgaged Premises. All such insurance shall be obtained from such companies, in
such amounts and with such provisions and the Agent deems necessary or desirable
to protect its interest. The policies required by the Agent shall name the Agent
as an additional insured and loss payee under a standard New York mortgagee
clause;
(iii) Certificate of Occupancy and Local Law Compliance - A
Certificate of Occupancy satisfactory to the Agent and municipal searches
showing no violations and evidence of compliance with all applicable local laws.
If violations are shown, then the Agent must have received (in the Agent's sole
discretion) either satisfactory evidence of the curing of the same or such
undertakings, escrow deposits or affidavits relating thereto as the Agent shall
require;
(iv) Rent Roll, Leases and Other Documents - A copy of the
rent roll for the Mortgaged Premises and a complete copy of all leases, all
certified by the Borrower to be true and correct and which must be acceptable in
all respects by the Agent and its counsel, and estoppel certificates from all
commercial tenants (other than the National Hockey League), and subordination
agreements from any tenant whose lease is not subordinate to the Mortgage by its
terms (other than the National Hockey League Possession Agreement). The Borrower
shall also deliver to the Agent such other documents relating to the Mortgaged
Premises as the Agent shall reasonably require including, without limitation,
copies of the deeds, easements, encumbrances, management agreements, brokerage
agreements, operating agreements, etc.;
(v) Environmental Audit - A written report made at Borrower's
sole expense to the Agent by an engineer on the Agent's approved list, stating
whether or not there exists any Hazardous Material located on or beneath, or
stored at, the Mortgaged Premises, and including a certification, in the event
of the presence of any Hazardous Material, concerning whether such Hazardous
Material may become a hazard to public health, or violates any standards then
applicable requiring removal, containment or treatment. The term "Hazardous
Material" means (i) any hazardous or toxic substance, material or waste,
including, but not limited to, those substances, materials, and wastes listed in
the United States Department of Transportation Hazardous Materials Table (49 CFR
172.101) or by the Environmental Protection Agency as hazardous substances (40
CFR Part 302) and amendments thereto and replacements therefor; or (ii) such
substances, materials or wastes as are regulated by The Resource Conservation
and Recovery Act of 1976 or the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, any amendments thereto or orders,
regulations, directions, or requirements thereunder; or (iii) such toxic or
hazardous substances, materials or wastes that are or may become regulated under
any other applicable county, municipal, state or federal law, rule, ordinance,
direction, or regulation. The Borrower agrees to take such remedial action in
respect of the Mortgaged Premises as the Agent may determine is appropriate
(including the taking of escrows) as a result of such report as a condition to
extend any Loans here-
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under;
(vi) Appraisal - The Agent shall prepare or obtain, at the
Borrower's expense, an appraisal of the Mortgaged Premises which shall be
prepared by the Agent or by an appraiser selected by the Agent which must
indicate a value satisfactory in all respects to the Agent. Such appraisal must
be satisfactory to the Agent in all respects. The cost of the appraisal (and any
reappraisal during the term of the Loan that may be required from time to time
by the Agent) shall be borne by the Borrower whether or not the appraisal is
prepared by the Agent or by an appraiser selected by the Agent. The fees for the
appraisal, in any event, shall be paid to the Agent prior to preparation of the
appraisal;
(vii) No Default Under Existing Mortgage - Evidence
satisfactory in all respects to the Agent of the absence of any default under
the Existing Mortgage and the mortgage note(s) secured thereby;
(viii) Assignment of Existing Mortgage - Assignment to the
Agent of the Existing Mortgage pursuant to an instrument of assignment duly
executed in recordable form by the holder thereof which shall be satisfactory in
form and substance to the Agent and its counsel, and delivery of said assignment
by the holder of the Existing Mortgage, together with all the original mortgage
notes, mortgages, consolidation/modification/extension documents relating to the
Existing Mortgage, including an extension agreement in respect of the Existing
Mortgage in the event the Existing Mortgage shall have matured prior to such
assignment;
(ix) Payoff Letter - A certification by the holder of the
Existing Mortgage of the amount required to purchase the same from said holder;
(x) [Reserved]; and
(xi) Other Assurances. Such other documents, security,
assurances and undertakings as may be reasonably required by the Agent and its
counsel.
(b) Compliance with Local Laws. The Mortgaged Premises and the
proposed and actual use thereof must comply in all material respects with all
laws, ordinances, rules and regulations of all governmental authorities (local,
state and federal) claiming or having jurisdiction over the same.
(c) Taxes. All taxes and assessments affecting the Mortgaged
Premises shall be current as of the date of the extension of a Loan.
(d) No Intervening Casualty. The Agent shall receive evidence
satisfactory to it and its counsel that neither the Mortgaged Premises nor any
part thereof have suffered any casualty or is subject to actual or threatened
condemnation or taking by eminent domain or otherwise.
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(e) Environmental Indemnity Agreement and ADA Indemnity Agreement.
The Agent shall have received an environmental indemnity agreement and ADA
indemnity agreement with respect to the Mortgaged Premises dated the first
Borrowing Date and executed by the Debtor, in form acceptable to the Agent.
(f) Assignment of Contracts. The Agent shall have received an
assignment of all management contracts with respect to the Mortgaged Premises
dated the first Borrowing Date and executed by the Debtor, in form reasonably
acceptable to the Agent.
5.11 Approvals
The Agent shall have received evidence reasonably satisfactory to it
that all approvals and consents, other than those set forth on Schedule 4.3, of
all Persons required to be obtained in connection with the consummation of the
transactions contemplated by the Transaction Documents have been obtained and
that all required notices have been given and all required waiting periods have
expired.
5.12 Litigation
There shall be no injunction, writ, preliminary restraining order or
other order of any nature issued by any Governmental Authority in any respect
affecting any Transaction Document or any transaction contemplated by the
Transaction Documents, and no action or proceeding by or before any Governmental
Authority shall have been commenced and be pending seeking to prevent or delay
any of the foregoing or challenging any term or provision thereof or seeking any
damages in connection therewith, and the Agent shall have received a
certificate, in all respects reasonably satisfactory to the Agent, of an
executive officer or analogous counterpart of the Borrower to the foregoing
effect.
5.13 Insurance
The Agent shall have received a certificate of insurance with
respect to all insurance required to be maintained under Section 7.3, in form
and substance reasonably satisfactory to the Agent.
5.14 Approval of Special Counsel
All legal matters incident to the making of the Loans, and the
issuance of the Letters of Credit, on the first Borrowing Date shall be
reasonably satisfactory to Special Counsel, and the Agent shall have received
from Special Counsel an opinion, dated the first Borrowing Date, and in the form
of Exhibit J.
5.15 Opinions of Counsel to the Borrower and the Subsidiaries
The Agent shall have received opinions of Xxxxxx Xxxxxx Butowsky
Xxxxxxx Shalov & Xxxx, counsel to the Borrower and the Subsidiaries, Xxxxxx
Xxxxxxxx, General Counsel to the Borrower and the Subsidiaries, and Xxxxx,
Xxxxxxxx & Tannenwald, P.C., special regulatory counsel to the Borrower and the
Subsidiaries, each dated the first Borrowing Date,
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and in the forms of Exhibits K-1, K-2 and K-3, respectively.
5.16 Payment of Fees
The Borrower shall have paid to the Agent and the Lenders all Fees
and expenses which it shall have agreed to pay, to the extent such Fees and
expenses shall have become payable on or prior to the first Borrowing Date, and
shall have paid the reasonable fees and disbursements of Special Counsel which
the Borrower is obligated to pay in accordance with Section 11.5 and which shall
have accrued up to the first Borrowing Date.
5.17 CFO's Certificate
The Agent shall have received a certificate executed by the CFO on
behalf of the Borrower, in all respects reasonably satisfactory to the Agent
certifying that immediately after giving effect to the Initial Transactions (1)
to the best knowledge of such officer, the sum of the assets, at a fair
valuation, of the Borrower, will exceed its debts, (2) to the best knowledge of
such officer, the Borrower will not have incurred debts beyond its ability to
pay such debts as such debts mature, (3) such officer does not believe that the
Borrower, in the ordinary course of its business during the reasonably
foreseeable future, will incur debts beyond its ability to pay such debts as
such debts mature, and (4) to the best knowledge of such officer, the Borrower
will have sufficient capital with which to conduct its business, and (b)
attaching a budget for the fiscal year ending 1998 and otherwise conforming to
the requirements therefor contained in Section 7.7(n).
5.18 Other Documents
The Agent shall have received such other documents (including
financial statements, projections and records regarding working capital
accounts), each in form and substance reasonably satisfactory to the Agent, as
the Agent shall reasonably require in connection with the making of the Loans on
the first Borrowing Date.
6. CONDITIONS OF LENDING - ALL LOANS AND LETTERS OF CREDIT
The obligation of each Lender to make each Loan, and the obligation of the
Issuer to issue each Letter of Credit, is subject to the receipt by the Agent of
a Borrowing Request, in the case of such Loan, or a Letter of Credit Request, in
the case of such Letter of Credit, executed by the Borrower and the fulfillment
of the following conditions precedent:
6.1 Compliance
On each Borrowing Date, and after giving effect to the Loans to be
made on, and the Letters of Credit to be issued on, such Borrowing Date, (a) the
Borrower shall be in
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compliance with all of the terms, covenants and conditions of each Loan Document
in all material respects, (b) there shall exist no Default or Event of Default,
and (c) the representations and warranties contained in this Agreement
(including those in Section 4) shall be true and correct in all material
respects with the same effect as though such representations and warranties had
been made on such Borrowing Date (or, if any such representation and warranty is
expressly stated to have been made only as of a specific date, as of such
specific date).
6.2 Loan Closings
All Loan Documents and all other documents required by the
provisions of the Loan Documents to have been executed or delivered by the
Borrower to the Agent or any Lender on or before the applicable Borrowing Date
shall have been so executed or delivered on or before such Borrowing Date.
7. AFFIRMATIVE AND FINANCIAL COVENANTS
The Borrower covenants and agrees that on and after the Effective Date and
until the later to occur of (a) the Revolving Credit Commitment Termination
Date, and (b) the payment in full of the Notes and the performance by the
Borrower of all of its other obligations under the Loan Documents, the Borrower
will:
7.1 Legal Existence
Except as may otherwise be permitted by Sections 8.3 and 8.4,
maintain, and cause each Significant Subsidiary to maintain, its corporate or
partnership existence, as the case may be, in good standing in the jurisdiction
of its incorporation or formation and in each other jurisdiction in which the
failure so to do would be likely to have a Material Adverse effect.
7.2 Taxes
Pay and discharge when due, and cause each Subsidiary so to do, all
taxes, assessments, governmental charges, license fees and levies upon or with
respect to the Borrower and such Subsidiary, and upon the income, profits and
Property thereof unless, and only to the extent, that (a)(i) such taxes,
assessments, governmental charges, license fees and levies shall be contested in
good faith and by appropriate proceedings diligently conducted by the Borrower
or such Subsidiary, and (ii) such reserve or other appropriate provision as
shall be required by GAAP shall have been made therefor, or (b) the failure to
pay and discharge when due would not be likely to have a Material Adverse
effect.
7.3 Insurance
(a) Maintain, and cause each Guarantor to maintain, insurance with
insurance carriers having a "claims paying ability" rating by A.M. Best & Co.,
of not lower than 'A-' against at least such risks, and in at least such
amounts, as are usually insured against by similar businesses, including public
liability (bodily injury and property damage), fidelity, workers' compensation
and property insurance, and including business interruption insurance on terms
and condi-
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tions substantially similar to the terms and conditions of the Borrower's
business interruption insurance as in effect on the date hereof, and which, in
the case of such property insurance, shall be (A) in amounts sufficient to
prevent the Borrower and each Guarantor from becoming a co-insurer and (B)
against all risks; and file with the Agent at least once every 12 months a
detailed list of such insurance then in effect, stating the names of the
carriers thereof, the policy numbers, the insureds thereunder, the amounts of
insurance, dates of expiration thereof, and the Property and risks covered
thereby, together with a certificate of the CFO certifying that in the opinion
of such officer such insurance is adequate in nature and amount, complies with
the obligations of the Borrower under this Section 7.3, and is in effect.
(b) Promptly upon request therefor, deliver or cause to be delivered
to the Agent originals or duplicate originals of all such policies of insurance.
All such insurance policies in respect of property insurance (other than
property insurance insuring the real property subject to the mortgages listed on
Schedule 8.2, such insurance being hereinafter referred to as "Excepted
Insurance") and business interruption insurance shall contain a standard loss
payable clause and shall be endorsed to provide that, in respect of the
interests of the Agent and the Lenders: (i) the Agent, as such, shall be named
as an additional insured and shall be the sole loss payee, (ii) thirty days'
prior written notice of any cancellation, reduction of amounts payable, or any
changes and amendments shall be given to the Agent, and (iii) the Agent shall
have the right, but not the obligation, to pay any premiums due or to acquire
other such insurance upon the failure of the Borrower or any Guarantor to pay
the same or to so insure. Unless an Event of Default shall have occurred and be
continuing (i) the proceeds of all insurance (other than Excepted Insurance)
aggregating $2,500,000 or less per occurrence shall be retained by, or if paid
to the Agent delivered by the Agent over to, the Borrower or the proper
Guarantor, and (ii) insurance (other than Excepted Insurance) proceeds exceeding
$2,500,000 per occurrence shall be applied to the Loan Party Obligations or to
repair, restore and replace Property, in each case as the relevant Loan Party
and the Agent shall agree. Upon the occurrence and during the continuance of an
Event of Default, all insurance (other than Excepted Insurance) proceeds shall
be retained by, or if paid to the Borrower or any Guarantor, held in trust
thereby separate and apart from all other Property for the benefit of the Agent
and promptly delivered by the Borrower or such Guarantor over to, the Agent, and
the Agent shall, at its option (A) hold the proceeds of such payment as
collateral until such Default or Event of Default shall no longer exist and then
pay over the same to the Borrower or the applicable Guarantor to enable the
Borrower or such Guarantor to repair, restore or replace the Property subject to
the claim which resulted in such payment, or (B) apply the same to the Loan
Party Obligations of the relevant Loan Party, in each case in such order, in
such amounts and at such times as the Agent may decide.
(c) Neither the Borrower nor any Guarantor shall take out separate
property or business interruption insurance concurrent in form or contributing
in the event of loss with that required to be maintained pursuant to Section
7.3(a) or 7.3(b) unless (i) the Agent shall have approved the carrier and the
form and content of the insurance policy, or (ii) such insurance conforms in all
respects with the requirements of Sections 7.3(a) and 7.3(b).
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7.4 Performance of Obligations
Pay and discharge promptly when due, and cause each Subsidiary so to
do, all lawful Indebtedness, obligations and claims for labor, materials and
supplies or otherwise which, if unpaid, would be likely to (a) have a Material
Adverse effect, or (b) become a Lien on the Property of the Borrower or any
Subsidiary, except those Liens permitted under Section 8.2, provided that
neither the Borrower nor such Subsidiary shall be required to pay or discharge
or cause to be paid or discharged any such Indebtedness, obligation or claim so
long as (i) the validity thereof shall be contested in good faith and by
appropriate proceedings diligently conducted by the Borrower or such Subsidiary,
and (ii) such reserve or other appropriate provision as shall be required by
GAAP shall have been made therefor.
7.5 Condition of Property
Except for ordinary wear and tear, at all times, maintain, protect
and keep in good repair, working order and condition, all material Property
necessary for the operation of its business (other than Property which is
replaced with similar Property), and cause each Subsidiary so to do, except in
each case where the failure to do so would not be likely to have a Material
Adverse effect.
7.6 Observance of Legal Requirements
Observe and comply in all material respects, and cause each
Subsidiary so to do, with all laws, ordinances, orders, judgments, rules,
regulations, certifications, franchises, permits, licenses, directions and
requirements of all Governmental Authorities, which now or at any time hereafter
may be applicable to it or to such Subsidiary, a violation of which would be
likely to have a Material Adverse effect.
7.7 Financial Statements and Other Information
Maintain, and cause each Subsidiary to maintain, a standard system
of accounting in accordance with GAAP, and furnish to the Issuer and each
Lender:
(a) As soon as available and, in any event, within (x) 105 days
after the close of each fiscal year, a copy of (i) the Borrower's 10-K, if any,
in respect of such fiscal year, and (ii) the Borrower's Consolidated Balance
Sheet as of the end of such fiscal year, and the related Consolidated Statement
of Income and Consolidated Statement of Cash Flows, as of and through the end of
such fiscal year, and (y) 105 days after the close of each fiscal year, a copy
of the Borrower's Consolidating Balance Sheet as of the end of such fiscal year,
and the related Consolidating Statement of Income as of and through the end of
such fiscal year, setting forth in each case in comparative form (to the extent
available) the corresponding figures in respect of the previous fiscal year, all
in reasonable detail, and (1) in the case of such Consolidated financial
statements, (I) accompanied by a report of the Accountants, which report shall
be without Impermissible Qualification and shall state that (A) the Accountants
audited such financial statements, (B) such audit was made in accordance with
generally accepted auditing standards in effect at the time and provides a
reasonable basis for such opinion, and (C) said financial statements have been
prepared in accordance with GAAP, and (II) together with a
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certificate of the CFO, which certificate shall state that (A) all such
financial statements fairly present the Consolidated financial condition and
results of operations of the Borrower, and (B) said financial statements have
been prepared in accordance with GAAP, and (2) in the case of such Consolidating
financial statements, prepared in accordance with Consolidating Accounting
Principles in all material respects and set forth with eliminations, together
with a certificate of the CFO, which certificate shall state that (A) all such
financial statements fairly present the Consolidating financial condition and
results of operations of the Borrower and each Significant Subsidiary, and (B)
that such Consolidating financial statements have been prepared in accordance
with Consolidating Accounting Principles in all material respects (but without
footnotes);
(b) Simultaneously with the delivery of the audited financial
statements required by clause (a) above, a certificate of such Accountants
stating that, in making the examination necessary for their audit of the
financial statements of the Borrower for such fiscal year and reviewing the
computations by the Borrower (which computations shall accompany such
certificate and shall be in reasonable detail), nothing came to their attention
that caused them to believe that the Borrower was not in compliance with
Sections 7.11, 7.12, 7.13, 8.1, 8.5, 8.6 and 8.7 and are in accordance with such
Sections;
(c) As soon as available and, in any event, within
(x) 60 days after the close of each of the first three fiscal
quarters of each fiscal year, a copy of (i) the Borrower's 10-Q, if any,
in respect of such fiscal quarter, and (ii) the Borrower's Consolidated
Balance Sheet as of the end of such fiscal quarter, and the related
Consolidated Statement of Income and Consolidated Statement of Cash Flows,
as of and through the end of such fiscal quarter, and
(y) 60 days after the close of each of the first three fiscal
quarters of each fiscal year, a copy of the Borrower's Consolidating
Balance Sheet as of the end of such fiscal quarter, and the related
Consolidating Statement of Income as of and through the end of such fiscal
quarter, setting forth in each case in comparative form (to the extent
available) the corresponding figures in respect of the previous fiscal
year, all in reasonable detail, and (1) in the case of such Consolidated
financial statements, together with a certificate of the CFO, which
certificate shall state that (A) all such financial statements fairly
present the Consolidated financial condition and results of operations of
the Borrower, and (B) said financial statements have been prepared in
accordance with GAAP (but without footnotes and subject to year-end
adjustments), and (2) in the case of such Consolidating financial
statements, prepared in accordance with Consolidating Accounting
Principles in all material respects and set forth with eliminations,
together with a certificate of the CFO, which certificate shall state that
(A) all such financial statements fairly present the Consolidating
financial condition and results of operations of the Borrower and each
Significant Subsidiary, and (B) that such Consolidating financial
statements have been prepared in accordance with Consolidating Accounting
Prin-
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ciples in all material respects;
(d) Within 60 days after the end of each of the first three fiscal
quarters, and within 105 days after the end of the last fiscal quarter, of each
fiscal year, a Compliance Certificate, as of the end of such fiscal quarter,
duly completed and certified by the CFO on behalf of the Borrower;
(e) As soon as available and, in any event, by no later than
September 30, 1997,
(i) an audited Consolidated Balance Sheet of the Borrower and
its Subsidiaries as of June 30, 1997, and an audited combined Balance
Sheet of Old IPL and its subsidiaries and Old VSC and its subsidiaries
(the "June 30 Balance Sheet"), together with the related combined Income
Statement thereto, accompanied by a report of the Accountants, which
report shall be without Impermissible Qualification and shall state that
(A) the Accountants audited such financial statements, (B) such audit was
made in accordance with generally accepted auditing standards in effect at
the time and provides a reasonable basis for such opinion, and (C) said
financial statements have been prepared in accordance with GAAP,
(ii) a pro-forma Consolidated Balance Sheet (the "Pro-forma
Balance Sheet") as of June 30, 1997 (based upon the June 30 Balance
Sheet), after giving effect to the following (collectively, the "Initial
Transactions"): (a) the Loans to be made, and the Letters of Credit to be
issued, on the first Borrowing Date, (b) the use of the proceeds of such
Loans, (c) the Drop Down, (d) the Spin-off, and (e) the Merger,
accompanied by a certificate of the CFO on behalf of the Borrower stating
that the Pro-forma Balance Sheet presents the Borrower's good faith
estimate of the Consolidated pro-forma financial condition of the Borrower
at the date thereof as if each of the Initial Transactions occurred on
June 30, 1997, and
(iii) with respect to Old IPL and its consolidated
subsidiaries for the period from July 1, 1997, through the day immediately
preceding the Merger, the consolidated Balance Sheet thereof as of the end
of such period together with the related consolidated Statement of Income
and consolidated Statement of Cash Flows, as of and through the end of
such period, together with a certificate of the CFO executed on behalf of
the Borrower, which certificate shall state that (A) all such financial
statements fairly present the consolidated financial condition and results
of operations of Old IPL, and (B) said financial statements have been
prepared in accordance with GAAP (but without footnotes and subject to
year-end adjustments);
(f) Prompt written notice upon the Borrower obtaining knowledge
that: (i) any Indebtedness of the Borrower or any Subsidiary in an aggregate
amount in excess of $500,000 shall have been declared or become due and payable
prior to its stated maturity, or called and not paid when due, or (ii) the
holders of any notes (other than the Notes), or other evidence of Indebtedness,
certificates or securities evidencing any such Indebtedness, or any obligees
with respect to any other Indebtedness of the Borrower or any Subsidiary, have
the right to declare Indebtedness in an aggregate amount in excess of $500,000
due and payable prior to
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its stated maturity;
(g) Prompt written notice of: (i) any citation, summons, subpoena,
order to show cause or other order naming the Borrower or any Subsidiary a party
to any proceeding before any Governmental Authority which would be likely to
have a Material Adverse effect, and include with such notice a copy of such
citation, summons, subpoena, order to show cause or other order, (ii) any lapse
or other termination of any license, permit, franchise or other authorization
issued to the Borrower or any Subsidiary by any Governmental Authority, (iii)
any refusal by any Governmental Authority to renew or extend any license,
permit, franchise or other authorization, and (iv) any dispute between the
Borrower or any Subsidiary and any Governmental Authority, which lapse,
termination, refusal or dispute, referred to in clause (ii), (iii) or (iv)
above, would be likely to have a Material Adverse effect;
(h) Promptly upon becoming available, copies of all regular,
periodic or special reports, schedules and other material which the Borrower or
any Subsidiary may now or hereafter be required to file with or deliver to any
securities exchange or the Securities and Exchange Commission, or any other
Governmental Authority succeeding to the functions thereof, and copies of all
material news releases sent to financial analysts or stockholders;
(i) Prompt written notice in the event that the Borrower or any
Subsidiary knows, or has reason to know, that (i) any Termination Event with
respect to a Pension Plan has occurred, (ii) the Borrower, any Subsidiary or any
ERISA Affiliate has applied for a waiver of the minimum funding standard under
Section 412 of the Code with respect to a Pension Plan, (iii) the aggregate
amount of the Unfunded Pension Liabilities under all Pension Plans has increased
to an amount in excess of $500,000, (iv) the aggregate amount of Unrecognized
Retiree Welfare Liability under all applicable Employee Benefit Plans has
increased to an amount in excess of $500,000, (v) the Borrower or any Subsidiary
has engaged in a Prohibited Transaction with respect to an Employee Benefit
Plan, (vi) the imposition of a tax upon the Borrower or any Subsidiary under
Section 4980B(a) of the Code, (vii) the assessment of a civil penalty under
Section 502(c) of ERISA against the Borrower or any Subsidiary, or (viii) any
condition with respect to a Multiemployer Plan exists which would be reasonably
likely to have a Material Adverse effect, in each case together with a
certificate of the president or CFO of the Borrower setting forth the details of
such event and the action which the Borrower, such Subsidiary or such ERISA
Affiliate proposes to take with respect thereto, together with a copy of all
notices and filings with respect thereto;
(j) Prompt written notice in the event that the Borrower, any
Subsidiary or any ERISA Affiliate shall receive a demand letter from the PBGC
notifying the Borrower, such Subsidiary or such ERISA Affiliate of any final
decision finding liability of the Borrower, any Subsidiary or any ERISA
Affiliate and the date by which such liability must be paid, together with a
copy of such letter and a certificate of the president or CFO of the Borrower
setting forth the action which the Borrower, such Subsidiary or such ERISA
Affiliate proposes to take with respect thereto;
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(k) Upon becoming aware thereof, prompt written notice of the
occurrence of (i) each Default, (ii) each Event of Default, and (iii) each
Material Adverse change;
(l) Promptly upon receipt thereof, copies of all audit reports and
all management letters relating to the Borrower or any Subsidiary submitted by
the Accountants in connection with each annual, interim or special audit of the
books of the Borrower or any Subsidiary;
(m) As soon as available, but not later than the last day of each
July hereafter, budgets for the Borrower and the Subsidiaries (including profit
and loss statements in respect of each Subsidiary) for the coming fiscal year,
in each case in form and substance reasonably satisfactory to the Agent; and
(n) Promptly upon request therefor, such other information and
reports relating to the past, present or future financial condition, operations,
business, property, plans, prospects, budgets and projections of the Borrower
and the Subsidiaries, as the Agent or any Lender at any time or from time to
time may reasonably request.
7.8 Inspection
At all reasonable times, upon reasonable prior notice, permit
representatives of the Agent or any Lender to visit the offices of the Borrower
and each Subsidiary, to examine the books and records thereof and Accountants'
reports relating thereto, and to make copies or extracts therefrom, to discuss
the affairs of the Borrower and each Subsidiary with the respective officers
thereof, and to examine and inspect the Property of the Borrower and each
Subsidiary and to meet and discuss the affairs of the Borrower and each
Subsidiary with the Accountants.
7.9 Authorizations
Maintain and cause each Subsidiary to maintain, in full force and
effect, all material copyrights, patents, trademarks, trade names, franchises,
licenses, permits, applications, reports, and other authorizations and rights,
as are necessary for the conduct from time to time of their businesses.
7.10 Subsidiaries
Except as set forth on Schedule 4.1 or as may otherwise be permitted
by Sections 8.3 and 8.4, at all times maintain (directly or indirectly),
beneficially and of record, 100% of the voting control of, and 100% of the
equity in, each Domestic Subsidiary.
7.11 Leverage Ratio
At each fiscal quarter end occurring during each period set forth
below, have a Leverage Ratio not greater than the ratio set forth adjacent to
such period:
Period Ratio
------ -----
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September 30, 1997 through
March 31, 1998 3.00:1.00
April 1, 1998 through
March 31, 1999 2.50:1.00
April 1, 1999 through
March 31, 2000 2.25:1.00
April 1, 2000 through
September 30, 2002 2.00:1.00
7.12 Fixed Charge Coverage Ratio
At each fiscal quarter end occurring on and after September 30,
1997, have a Fixed Charge Coverage Ratio greater than or equal to 1.00:1.00.
7.13 Minimum Net Worth
(a) At each fiscal quarter end, have a Net Worth equal to no less
than the sum of (a) $20,000,000, plus (b) 100% of the positive net income of the
Borrower and the Subsidiaries on a Consolidated basis in respect of each fiscal
quarter ending after the Effective Date, plus (c) 100% of the net proceeds to
the Borrower of each Equity Offering, minus (d) the lesser of (x) $3,000,000, or
(y) the sum of the actual net loss of Old VSC and its subsidiaries on a
consolidated basis in accordance with GAAP for the period from April 1, 1997
through June 30, 1997, plus the actual net loss of Old IPL and its subsidiaries
on a consolidated basis in accordance with GAAP for the period from May 1, 1997
through July 31, 1997, and (B) at the fiscal quarter end June 30, 1998, have a
Net Worth equal to no less than the greater of (a) $20,200,000, or (b) the
amount determined under clause (A) of this Section 7.13. For purposes of this
Section 7.13, "Net Worth" shall mean, as of any date, (i) all assets of the
Borrower and the Subsidiaries on a Consolidated basis, minus (ii) all
liabilities of the Borrower and the Subsidiaries on a Consolidated basis.
7.14 Additional Subsidiaries
(a) On or prior to each date hereafter upon which a Person shall
have become both a Wholly-Owned Subsidiary and a Domestic Subsidiary, cause such
Subsidiary (i) to become a party to the Guaranty, in accordance with the terms
thereof, on and as of such date, (ii) to deliver to the Agent one or more share
certificates representing all of the issued and outstanding capital stock of
each Domestic Subsidiary owned directly by such Subsidiary, together with one
undated stock power executed in blank by such Subsidiary in respect of each such
certificate, and (iii) to deliver to the Agent such UCC Financing Statements
(duly executed on behalf of such Subsidiary), together with such other items, as
shall be reasonably requested by the
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Agent in order to perfect the security interest in any collateral security
granted under the Guaranty.
(b) Cause each Subsidiary which shall have become a party to the
Guaranty at any time after the first Borrowing Date, to deliver to the Agent,
simultaneously with the execution and delivery of the same, (i) a certificate,
dated the date such Subsidiary shall have become a party to the Guaranty,
executed by such Subsidiary and substantially in the form of, and with
substantially the same attachments as, the certificate which would have been
required under Section 5.1 if such Subsidiary had become a party to the Guaranty
on or before the first Borrowing Date, and (ii) if requested by the Agent, an
opinion of counsel to such Subsidiary, covering the same matters with respect to
such Subsidiary as were covered by the opinions delivered pursuant to Section
5.16, in form and substance reasonably satisfactory to the Agent.
8. NEGATIVE COVENANTS
The Borrower covenants and agrees that on and after the Effective Date and
until the later to occur of (a) the Revolving Credit Commitment Termination
Date, and (b) the payment in full of the Notes and the performance by the
Borrower of all of its other obligations under the Loan Documents, the Borrower
will not:
8.1 Indebtedness
Create, incur, assume or suffer to exist any Indebtedness, or permit
any Subsidiary so to do, except any one or more of the following types of
Indebtedness: (a) Indebtedness under the Loan Documents, (b) Funded Debt of the
Borrower arising out of Interest Rate Protection Arrangements covering a
notional principal amount not in excess of $33,000,000, (c) Intercompany Debt,
(d) Indebtedness existing on the date hereof and set forth on Schedule 8.1 and
any refinancings, refundings, renewals or extensions thereof, provided that the
amount of such Indebtedness is not increased at the time of such refinancing,
refunding, renewal or extension, (e) Approved Subordinated Debt and any
refinancings, refundings, renewals or extensions thereof, provided that the
amount of such Approved Subordinated Debt is not increased at the time of such
refinancing, refunding, renewal or extension and the other terms and conditions
thereof (including, without limitation, the terms and conditions relating to
amortization, covenants, events of default, remedies and subordination) taken as
a whole, shall be no less favorable to the Lenders than the terms and conditions
of the Approved Subordinated Debt, (f) other Indebtedness of the Borrower in the
aggregate under this Section 8.1(f) not in excess of $5,000,000 at any one time
outstanding, (g) guarantees by the Borrower of Indebtedness of any Subsidiary
permitted under any other clause of this Section 8.1 and guarantees by any
Subsidiary of Indebtedness of the Borrower or any other Subsidiary permitted
under any other clause of this Section 8.1, and (h) the Existing Debt, provided
that it shall be repaid in full before, or simultaneously with, the making of
the Loans on the first Borrowing Date.
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8.2 Liens
Create, incur, assume or suffer to exist any Lien against or on any
Property now owned or hereafter acquired by the Borrower or any Subsidiary, or
permit any Subsidiary so to do, except any one or more of the following types of
Liens: (a) Liens in connection with workers' compensation, unemployment
insurance or other social security obligations (which phrase shall not be
construed to refer to ERISA or the minimum funding obligations under Section 412
of the Code), (b) Liens to secure the performance of bids, tenders, letters of
credit, contracts (other than contracts for the payment of Indebtedness),
leases, statutory obligations, surety, customs, appeal, performance and payment
bonds and other obligations of like nature, in each such case arising in the
ordinary course of business, (c) mechanics', workmen's, carriers',
warehousemen's, materialmen's, landlords', or other like Liens arising in the
ordinary course of business with respect to obligations which are not due or
which are being contested in good faith and by appropriate proceedings
diligently conducted, (d) Liens for taxes, assessments, fees or governmental
charges or levies which are not delinquent or are being contested in good faith
and by appropriate proceedings diligently conducted, and in respect of which
adequate reserves shall have been established in accordance with GAAP on the
books of the Borrower or such Subsidiary, (e) Liens of attachments, judgments or
awards against the Borrower or any Subsidiary with respect to which an appeal or
proceeding for review shall be pending or a stay of execution shall have been
obtained, or which are otherwise being contested in good faith and by
appropriate proceedings diligently conducted, and in respect of which adequate
reserves shall have been established in accordance with GAAP on the books of the
Borrower or such Subsidiary, (f) easements, rights of way, restrictions, leases
of Property to others, easements for installations of public utilities, title
imperfections and restrictions, zoning ordinances and other similar encumbrances
affecting Property which in the aggregate do not materially adversely affect the
value of such Property or materially impair its use for the operation of the
business of the Borrower or such Subsidiary, (g) Liens existing on the Effective
Date and set forth on Schedule 8.2, and substitute Liens therefor, provided that
no such substitute Lien shall cover any Property not covered by the original
Lien or secure any obligation or liability in excess of the obligation or
liability secured by such original Lien, (h) Liens created under the Collateral
Documents, (i) statutory Liens in favor of lessors arising in connection with
Property leased to the Borrower or any Subsidiary, (j) Liens on Margin Stock to
the extent that a prohibition on such Liens pursuant to this Section 8.2 would
violate Regulation U of the Board of Governors of the Federal Reserve System, as
amended, (k) Liens on Property hereafter acquired by the Borrower or any
Subsidiary and either existing on such Property when acquired, or created
contemporaneously with such acquisition, to secure the payment or financing of
the purchase price thereof, provided that such Liens attach only to the Property
so acquired and provided further that the Indebtedness secured by such Liens is
permitted by Section 8.1(g), (l) Liens in respect of capital leases permitted by
Section 8.1(d) or Section 8.1(f), provided that such Liens attach only to the
Property leased pursuant thereto, and (m) the Other Liens, provided that such
Liens shall be discharged before, or simultaneously with, the making of the
Loans on the first Borrowing Date.
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8.3 Dispositions
Make any Disposition or permit any Subsidiary so to do, except any
one or more of the following: (a) Dispositions of any Investments permitted
under Section 8.5(a), (b), (c) or (d), (b) Dispositions of Margin Stock to the
extent that a prohibition on such Dispositions pursuant to this Section 8.3
would violate Regulation U of the Board of Governors of the Federal Reserve
System, as amended, (c) Intercompany Dispositions of Property having a fair
market value which, when aggregated with the fair market value of all other
Property subject to Intercompany Dispositions during the same fiscal year, would
not exceed $1,000,000, and (d) other Dispositions of Property (other than
capital stock of the Debtor), provided that (i) immediately after giving effect
to each such Disposition pursuant to this Section 8.3(d), the aggregate fair
market value of all Property subject to such Dispositions during any fiscal year
shall not exceed $1,000,000, (ii) immediately before and after giving effect to
each such Disposition pursuant to this Section 8.3(d), no Default or Event of
Default shall or would exist, (iii) simultaneously with each such Disposition
pursuant to this Section 8.3(d), the Borrower shall have prepaid the Loans to
the extent required by Section 2, and (iv) not less than 85% of the
consideration therefor shall be in cash and paid substantially simultaneously
with such Disposition.
8.4 Mergers and Acquisitions
Consolidate or merge into or with any Person, or make any
Acquisition, or enter into any binding agreement to do any of the foregoing
which is not contingent on obtaining the consent of the Required Lenders, or
permit any Subsidiary so to do, except any one or more of the following:
(a) Capital Expenditures permitted by Section 8.6,
(b) any Subsidiary may merge into or be acquired by the Borrower,
provided that the Borrower is the survivor thereof, any Subsidiary may
merge into or be acquired by a Guarantor, provided that the Guarantor is
the survivor thereof, and any Subsidiary (other than a Guarantor) may
merge into or be acquired by another Subsidiary (other than a Guarantor),
in each case referred to in this clause (b) provided that immediately
before and after giving effect thereto no Default or Event of Default
shall or would exist,
(c) Acquisitions of Investments permitted by Section 8.5,
(d) Intercompany Acquisitions, provided that, immediately before and
after giving effect thereto, no Default or Event of Default shall have
occurred or be continuing, and
(e) other Acquisitions by the Borrower or any Guarantor, in either
case of one or more Operating Entities (each an "Additional Permitted
Acquisition"), provided that
(i) immediately before and after giving effect to each such
Acquisition no Default or Event of Default shall or would exist,
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(ii) immediately after giving effect to each such Acquisition,
all of the representations and warranties contained in Section 4
shall be true and correct as if then made,
(iii) the aggregate consideration paid in connection with each
such Acquisition (or series of related transactions) shall not
exceed $5,000,000,
(iv) the aggregate consideration paid for all such
Acquisitions during each period of four consecutive fiscal quarters
(i) ending on or after the Effective Date and on or before June 30,
1998, shall not exceed $5,000,000, and (ii) ending after June 30,
1998, shall not exceed $7,500,000,
(v) such Operating Entity (A) if a Person, shall be organized
under the laws of the United States of America or any State thereof,
and (B) shall not have any place of business (other than a foreign
sales office), or tangible assets having a fair market value in
excess of $250,000, located outside of the United States of America,
and
(vi) no Stock issued by or other debt or equity interests in
such Operating Entity, if any, shall be registered under the
Securities Act of 1933, as amended.
8.5 Investments
At any time hold, purchase, invest in or otherwise acquire any debt
security or Stock of, or any other equity interest in, any Person, or make any
loan or advance to, or enter into any arrangement for the purpose of providing
funds or credit to, or make any other investment, whether by way of capital
contribution or otherwise, in any Person (all of which are sometimes referred to
herein as "Investments"), or permit any Subsidiary so to do, except any one or
more of the following Investments: (a) Investments in short-term direct
obligations of the United States of America (and not the agencies or
instrumentalities thereof), (b) Investments in short-term debt securities of any
issuer, provided that the principal thereof and interest thereon is
unconditionally guaranteed by the United States of America (and not the agencies
or instrumentalities thereof), (c) Investments in short-term certificates of
deposit, in Dollars, of any Lender or any other depository institution chartered
under the laws of the United States of America or any State thereof the deposits
of which are insured by the Federal Deposit Insurance Corporation and which has
capital and undivided surplus of not less than $500,000,000, (d) Investments in
commercial paper having the highest commercial paper rating by Standard and
Poor's Corporation or Xxxxx'x Investors Service, Inc., (e) Investments existing
on the date hereof and set forth on Schedule 8.5, (f) Investments by the
Borrower or any Guarantor in Intercompany Debt, provided that such Intercompany
Debt shall be evidenced by a promissory note and such note shall be pledged to
the Agent pursuant to the Collateral Documents, (g)
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Acquisitions permitted by Section 8.4, (h) existing Investments in Subsidiaries,
(i) additional Investments, not in excess of $100,000 per annum in the
aggregate, in Persons which, immediately following such Investment, shall become
a Guarantor, (j) loans to officers and other Affiliates of the Borrower and the
Guarantors in the ordinary course of business, provided that, immediately after
giving effect to each such loan, the aggregate unpaid principal balance of all
such loans shall not exceed $500,000, (k) Investments in Interest Rate
Protection Agreements, (l) Investments arising out of the receipt by the
Borrower or any Subsidiary of noncash consideration for any Disposition
permitted under Section 8.3, (m) accounts receivable arising, and trade credit
granted, in the ordinary course of business and any securities received in
satisfaction or partial satisfaction thereof from financially troubled account
debtors to the extent reasonably necessary in order to prevent or limit loss,
(n) credits to suppliers made in the ordinary course of business consistent with
past practices of the Borrower or any Subsidiary, (o) additional equity
investments, not in excess of $2,000,000 per anum in the aggregate, in one or
more Guarantors, and (p) Investments consisting of membership interests in
Cognitive purchased pursuant to the Put Agreement.
8.6 Capital Expenditures
(a) Make any Capital Expenditure, or permit any Subsidiary so to do,
except any one or more of the following: (i) Acquisitions permitted under
Sections 8.4 or 8.5, and (ii) any Capital Expenditure made in any fiscal year
ending on or after June 30, 1998, which, when added to all of the other Capital
Expenditures of the Borrower and the Subsidiaries on a Consolidated basis during
such period (excluding all of those permitted by Section 8.6(a)(i)), does not
exceed an amount (the "Allowable Amount") equal to (x) in respect of the fiscal
year ending June 30, 1998, $8,000,000 and (y) in respect of each fiscal year
ending after such date, $10,000,000.
(b) In the event that any Additional Permitted Acquisition of an
Operating Entity shall be consummated during any fiscal year referred to in
Section 8.6(a), the Allowable Amount with respect to such fiscal year shall be
increased by an amount equal to the average of the Capital Expenditures of such
Operating Entity for the two consecutive fiscal years of such Operating Entity
ended immediately prior to the date of such Acquisition.
(c) In the event that, in respect of any fiscal year referred to in
Section 8.6(a), the Allowable Amount shall exceed the actual amount of Capital
Expenditures of the Borrower and the Subsidiaries on a Consolidated basis, the
Borrower and its Subsidiaries may make additional Capital Expenditures in the
immediately succeeding fiscal year in an amount not exceeding such excess on a
Consolidated basis.
8.7 Restricted Payments
Make any Restricted Payment or permit any Subsidiary so to do,
except that (a) any Wholly-Owned Subsidiary may make Restricted Payments to the
Borrower or any direct or indirect Wholly-Owned Subsidiary, (b) Cognitive
Communications, LLC ("Cognitive") and Edge Communications, Inc., may make
Restricted Payments provided that the Borrower receives its pro rata share of
each such Restricted Payment in accordance with its ownership interest therein,
and (c) Cognitive may purchase membership interests of certain members thereof
pursuant to the Put Agreement.
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8.8 Limitation on Subsidiaries
Permit any Subsidiary to enter into or agree, or otherwise be or
become subject, to any agreement, contract or other arrangement (other than this
Agreement) with any Person pursuant to the terms of which (a) such Subsidiary is
or would be prohibited from declaring or paying any cash dividends on any class
of its stock owned directly or indirectly by the Borrower or any other
Subsidiary or from making any other distribution on account of any class of any
such stock or otherwise making a loan or advance to the Borrower or any other
Subsidiary (herein referred to as "Upstream Payments"), or (b) the declaration
or payment of Upstream Payments by a Subsidiary to the Borrower or another
Subsidiary, on an annual or cumulative basis, is or would be otherwise limited
or restricted.
8.9 Line of Business
Engage in any business other than one or more of the lines of
business currently engaged in by the Borrower or any Subsidiary, or any other
business closely related thereto, or permit any Subsidiary so to do.
8.10 Amendment of Certain Documents and Agreements
(a) Amend, supplement or otherwise modify, or permit any Significant
Subsidiary thereof so to do, its certificate of incorporation or by-laws (or any
analogous partnership agreement or similar document) if such amendment,
supplement or modification would reasonably be expected to have a Material
Adverse effect.
(b) Amend, supplement or otherwise modify any MergerDocument, the
Put Agreement or any Approved Subordinated Debt Document.
8.11 Transactions with Affiliates
Except as set forth on Schedule 8.11 or as described in the
prospectus contained in the Borrower's Registration Statement on Form S-3, as
filed with the Securities and Exchange Commission on July 22, 1997, under the
headings "The Merger -- Contribution, Resale Restrictions, Registration Rights
and Interests of Certain Persons in the Merger" and in the Notes (f), (i) and
(l) of the Notes to Unaudited Pro-Forma Condensed Combined Financial Statements
contained in such prospectus, become, or permit any Subsidiary to become, a
party to any transaction with any Affiliate of the Borrower on a basis less
favorable to the Borrower or such Subsidiary in any material respect than if
such transaction were not with an Affiliate of the Borrower.
8.12 Compliance with ERISA
(a) Establish or contribute, or permit any Subsidiary thereof so to
do, to any
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Pension Plan (other than an Existing Pension Plan) except to the extent that the
same would not be likely to have a Material Adverse effect, (b) amend any
Pension Plan in a manner that would cause a Lien to arise pursuant to Section
401(a)(29) of the Code, or (c) increase benefits, or permit any Subsidiary
thereof so to do, under any Employee Benefit Plan or establish or contribute to
any new Employee Benefit Plan, except, with respect to clause (b) or (c), to the
extent that the same would not be likely to have a Material Adverse effect.
8.13 Payments and Prepayments of Indebtedness
Prepay or obligate itself to prepay, in whole or in part, any
Indebtedness, or permit any Subsidiary so to do, except (a) Intercompany Debt,
and (b) Indebtedness under the Loan Documents.
9. DEFAULT
9.1 Events of Default
The following shall each constitute an "Event of Default" hereunder:
(a) The failure of the Companies to make any payment when due and
payable of principal on any Note; or
(b) The failure of the Companies to make any payment of interest on
any Loan, or pay any Fee, or make any payment in respect of a Reimbursement
Obligation on any date when due and payable and such default shall continue
unremedied for a period of five Domestic Business Days after the same shall have
become due; or
(c) The failure of the Borrower to observe or perform any covenant
or agreement contained in Sections 2.4, 7.11, 7.12, 7.13 or in Section 8; or
(d) The failure of either Company to observe or perform any other
covenant or agreement required to be observed or performed by such Company
pursuant to the terms of this Agreement, and such failure shall have continued
unremedied for a period of 30 days after such Company shall have become aware of
such failure; or
(e) Any representation or warranty of any Loan Party (or of any of
its officers on its behalf) made in any Loan Document or in any certificate,
report, opinion (other than an opinion of counsel) or other document delivered
on or after the date hereof (excluding projections), shall in any such case
prove to have been incorrect or misleading (whether because of misstatement or
omission) in any material respect when made; or
(f) (i) Obligations of the Borrower (other than its obligations
hereunder and under the Notes) and the Subsidiaries, whether as principal,
guarantor, surety or other obligor, for the payment of any Indebtedness in an
aggregate principal amount in excess of $1,000,000, (A) shall become or shall be
declared to be due and payable prior to the expressed maturity thereof, or (B)
shall not be paid when due or, if a grace period is provided for the payment
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thereof, within such grace period, or (ii) circumstances shall have occurred
giving any holder of any such obligations the right to declare the Indebtedness
evidenced thereby due and payable prior to its stated maturity; or
(g) The Borrower or any Subsidiary shall (i) suspend or discontinue
its business (except as may otherwise be expressly permitted by Sections 7.1 or
8.4), or (ii) make an assignment for the benefit of creditors, or (iii)
generally not be paying its debts as such debts become due, or (iv) admit in
writing its insolvency or its inability to pay its debts as they become due, or
(v) file a voluntary petition in bankruptcy, or (vi) [Reserved], or (vii) file
any petition or answer seeking for itself any reorganization, arrangement,
composition, readjustment of debt, liquidation or dissolution or similar relief
under any present or future statute, law or regulation of any jurisdiction, or
(viii) petition or apply to any Governmental Authority for any receiver,
custodian or any trustee for any substantial part of its Property, or (ix) be
the subject of any such proceeding filed against it which remains undismissed
for a period of 60 days, or (x) file any answer admitting or not contesting the
material allegations of any such petition filed against it, or of any order,
judgment or decree approving such petition in any such proceeding, or (xi) seek,
approve, consent to, or acquiesce in any such proceeding, or in the appointment
of any trustee, receiver, custodian, liquidator, or fiscal agent for it, or any
substantial part of its Property, or an order is entered appointing any such
trustee, receiver, custodian, liquidator or fiscal agent and such order remains
unstayed and in effect for 60 days, or (xii) take any formal action for the
purpose of effecting any of the foregoing; or
(h) An order for relief is entered under the United States
bankruptcy laws or any other decree or order is entered by any Governmental
Authority having jurisdiction and continues unstayed and in effect for a period
of 60 days (i) adjudging the Borrower or any Subsidiary bankrupt or insolvent,
or (ii) approving as properly filed a petition seeking reorganization,
liquidation, arrangement, adjustment or composition of, or in respect of the
Borrower or any Subsidiary under the United States bankruptcy laws or any other
applicable Federal or state law, or (iii) appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator (or other similar official) of the
Borrower or any Subsidiary or of any substantial part of the Property of any
thereof, or (iv) ordering the winding up or liquidation of the affairs of the
Borrower or any Subsidiary; or
(i) Judgments or decrees in an aggregate amount in excess of
$750,000 (exclusive of amounts covered by insurance in respect of which a claim
has been filed and not rejected) against the Borrower or any Subsidiary shall
remain unpaid, unstayed on appeal, undischarged, unbonded or undismissed for a
period of 60 days; or
(j) After the Effective Date any Person (other than Equitable, Xxxxx
X. Xxxxxxxxxx and Xxxxxx X. Xxxxxxxx) acting alone or with a group of Persons
(other than Equitable, Xxxxx X. Xxxxxxxxxx and Xxxxxx X. Xxxxxxxx) acting in
concert, shall have or acquire beneficial ownership of securities (or options
therefor) having 40% or more of the ordinary voting power of the Borrower; or
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(k) (i) any Termination Event shall occur with respect to any
Pension Plan, (ii) any Accumulated Funding Deficiency, whether or not waived,
shall exist with respect to any Pension Plan, (iii) any Person shall engage in
any Prohibited Transaction involving any Employee Benefit Plan, (iv) the
Borrower, any Subsidiary or any ERISA Affiliate shall fail to pay when due an
amount which is payable by it to the PBGC or to a Pension Plan or Multiemployer
Plan under Title IV of ERISA, (v) the imposition of any tax under Section
4980(B)(a) of the Code, (vi) the assessment of a civil penalty with respect to
any Employee Benefit Plan under Section 502(c) of ERISA, or (vii) any other
event or condition shall occur or exist with respect to an Employee Benefit
Plan, which in the case of clauses (i) - (vii) immediately above, individually
or in the aggregate, would have a Material Adverse effect; or
(l) Any Collateral Document shall cease to be in full force and
effect, or an "Event of Default" shall have occurred under, and as such term is
defined in, any Collateral Document; or
(m) Xxxxx X. Xxxxxxxxxx shall, for any reason, cease to be the Chief
Executive Officer of the Borrower and, within six months thereof, a successor
thereto reasonably acceptable to the Agent shall not have been appointed or
elected; or
(n) All or any portion of the Approved Subordinated Debt (or any
replacement debt therefor) shall, for any reason (other than the gross
negligence or willful misconduct of, or written agreement by, the Lenders), not
be or cease to be subordinated (to the extent purported to be provided in the
Approved Subordinated Debt Documents or any replacement debt documents therefor)
to all or any portion of the Loan Party Obligations; or
(o) The Borrower shall have failed to deliver to the Agent, by no
later than November 30, 1997, UCC, federal tax and judgment lien search reports,
in all respects reasonably satisfactory to the Agent, with respect to the
Borrower or any Subsidiary thereof, or Old IPL, Old VSC or any subsidiary of
either of them, provided, however, that no such report shall be deemed to be
unsatisfactory by the Agent solely by reason of the disclosure thereon of Liens
set forth on Schedule 8.2 which, by the terms of such Schedule, are intended to
survive the closing of the first Loans under this Agreement; or
(p) The Borrower shall have failed to deliver to the Agent, by no
later than October 31, 1997, the Environmental Questionnaire provided by Summit
Bank, duly completed in all material respects by all of the Loan Parties.
9.2 Contract Remedies
(a) Upon the occurrence or at any time during the continuance of an
Event of Default, the Agent, at the written request of the Required Lenders,
shall notify the Companies that all of the Commitments have been terminated and
that all of the Notes have been declared immediately due and payable, provided
that upon the occurrence of an Event of Default under Section 9.1(g) or (h), all
of the Commitments shall automatically terminate and all of the Notes shall
become immediately due and payable without declaration or notice to the
Borrower. To the fullest extent not prohibited by law, except for the notice
provided for in the preceding sen-
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tence, the Borrower hereby expressly waives any presentment, demand, protest,
notice of protest or other notice of any kind in connection with the Loan
Documents and its obligations thereunder. To the fullest extent not prohibited
by law, each Company further expressly waives and covenants not to assert any
appraisement, valuation, stay, extension, redemption or similar law, now or at
any time hereafter in force which might delay, prevent or otherwise impede the
performance or enforcement of this Agreement and the other Loan Documents.
(b) In the event that the Commitments shall have been terminated or
all of the Notes shall have been declared due and payable pursuant to the
provisions of this Section 9.2, the Lenders agree, among themselves, that any
funds received from or on behalf of the Companies under any Loan Document by any
of the Lenders (except funds received by any Lender as a result of a purchase
from such Lender pursuant to the provisions of Section 11.9) shall be remitted
to the Agent, and shall be applied by the Agent in payment of the Loans and the
obligations of the Companies hereunder in the following manner and order: (i)
first, to reimburse the Agent and, thereafter, the Lenders for any expenses due
from the Borrower pursuant to the provisions of Section 11.5, (ii) second, to
the payment of the Fees, (iii) third, to the payment of any other fees, expenses
or amounts (other than the principal of and interest on the Notes) payable by
the Companies to the Agent or any of the Lenders under the Loan Documents, (iv)
fourth, to the payment, pro rata according to the Outstanding Percentage of each
Lender, of interest due on the Notes, (v) fifth, to the payment, pro rata
according to the sum of the aggregate outstanding principal balance of the Notes
and the obligations of the Companies to the Lenders arising out of any Interest
Rate Protection Arrangements, of such principal and obligations, and (vi) sixth,
any remaining funds shall be paid to whomsoever shall be entitled thereto or as
a court of competent jurisdiction shall direct.
10. THE AGENT
10.1 Appointment
The Issuer and each Lender hereby irrevocably designates and
appoints KBNA as the Agent of the Issuer and such Lender under the Loan
Documents and the Issuer and each Lender hereby irrevocably authorizes KBNA, as
Agent, to take such action on its behalf under the provisions of the Loan
Documents and to exercise such powers and perform such duties as are expressly
delegated to the Agent by the terms of the Loan Documents, together with such
other powers as are reasonably incidental thereto. Notwithstanding any provision
to the contrary contained elsewhere in this Agreement or in any other Loan
Document, the Agent shall not have any duties or responsibilities except those
expressly set forth herein or therein, or any fiduciary relationship with the
Issuer or any Lender, and no implied covenants, functions, responsibilities,
duties, obligations or liabilities shall be read into the Loan Documents or
otherwise exist against the Agent.
10.2 Delegation of Duties
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The Agent may execute any of its duties under the Loan Documents by
or through agents or attorneys-in-fact and shall be entitled to rely upon the
advice of counsel concerning all matters pertaining to such duties.
10.3 Exculpatory Provisions
Neither the Agent nor any of its respective officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be (i) liable for any
action lawfully taken or omitted to be taken by it or such Person under or in
connection with the Loan Documents (except the Agent or any such Person for its
own gross negligence or willful misconduct), or (ii) responsible in any manner
to the Issuer or any Lender for any recitals, statements, representations or
warranties made by any party contained in the Loan Documents or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agent under or in connection with, the Loan Documents or for
the value, validity, effectiveness, genuineness, enforceability or sufficiency
of any of the Loan Documents or for any failure of the Borrower, any of its
Subsidiaries, or any other Person to perform its obligations hereunder or
thereunder. The Agent shall not be under any obligation to the Issuer or any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, the Loan Documents, or to inspect
the properties, books or records of the Borrower or any of its Subsidiaries. The
Agent shall not be under any liability or responsibility to the Borrower or any
other Person as a consequence of any failure or delay in performance, or any
breach, by the Issuer or any Lender of any of its obligations under any of the
Loan Documents, provided that the foregoing shall not relieve the Issuer or any
Lender of liability or responsibility it may have to the Borrower or any other
Person as a consequence of such failure, delay in performance or breach. The
Issuer and the Lenders acknowledge that the Agent shall not be under any duty to
take any discretionary action permitted hereunder unless the Agent shall be
requested in writing to do so by the Required Lenders.
10.4 Reliance by Agent
The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, resolution, notice, consent, certificate, affidavit,
opinion, letter, cablegram, telegram, facsimile, telex or teletype message,
statement, order or other document or conversation reasonably believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including
counsel to the Debtor and the Borrower), independent accountants and other
experts selected by the Agent. The Agent may treat each Lender, or the Person
designated in the last notice filed with the Agent under Section 11.7, as the
holder of all of the interests of such Lender in its Loans and in its Note until
written notice of transfer, signed by such Lender (or the Person designated in
the last notice filed with the Agent) and by the Person designated in such
written notice of transfer, in form and substance satisfactory to the Agent,
shall have been filed with the Agent. The Agent shall not be under any duty to
examine or pass upon the validity, effectiveness or genuineness of the Loan
Documents or any instrument, document or communication furnished pursuant
thereto or in connection therewith, and the Agent shall be entitled to assume
that the same are valid, effective and genuine, have been signed or sent by the
proper parties and are what they purport to be. The Agent shall be fully
justified in failing or refusing to take any action under the Loan Documents
unless it shall first receive such advice or concurrence of the Required Lenders
as it deems ap-
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propriate. The Agent shall in all cases be fully protected in acting, or in
refraining from acting, under the Loan Documents in accordance with a request of
the Required Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon the Issuer and all the Lenders and all
future holders of the Notes.
10.5 Notice of Default
The Agent shall be deemed not to have knowledge or notice of the
occurrence of any Default or Event of Default unless the Agent shall have
received express written notice thereof from the Issuer, either Company or any
Lender. In the event that the Agent receives such a notice, the Agent shall
promptly give notice thereof to the Issuer and the Lenders. The Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders, provided that unless and until the
Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action or give such directions, or refrain from taking
such action or giving such directions, with respect to such Default or Event of
Default as it shall deem to be in the best interests of the Issuer and the
Lenders.
10.6 Non-Reliance
The Issuer and each Lender expressly acknowledges that neither the
Agent nor any of its respective officers, directors, employees, agents,
attorneys-in-fact or affiliates has made any representations or warranties to it
and that no act by the Agent hereinafter, including any review of the affairs of
the Borrower or its Subsidiaries, shall be deemed to constitute any
representation or warranty by the Agent to the Issuer or any Lender. The Issuer
and each Lender represents to the Agent that it has, independently and without
reliance upon the Agent, the Issuer or any other Lender, and based on such
documents and information as it has deemed appropriate, reviewed the Loan
Documents and made its own evaluation of and investigation into the business,
operations, Property, financial and other condition and creditworthiness of the
Borrower and its Subsidiaries and made its own decision to enter into this
Agreement. The Issuer and each Lender also represents that it will,
independently and without reliance upon the Agent, the Issuer or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit analysis, evaluations and decisions
in taking or not taking action under the Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, Property, financial and other condition and creditworthiness of the
Borrower and its Subsidiaries. Except for notices, reports and other documents
expressly required to be furnished to the Issuer and the Lenders by the Agent
hereunder, the Issuer or the Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the business,
operations, Property, financial and other condition or creditworthiness of the
Borrower or any of its Subsidiaries which may come into the possession of the
Agent or any of its respective officers, directors, employees, agents,
attorneys-in-fact or affiliates.
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10.7 Indemnification
Each Lender agrees to indemnify the Agent in its capacity as such
(to the extent not promptly reimbursed by the Companies and without limiting the
obligation of the Loan Parties to do so), ratably according to its Commitment
Percentage or, in the event any Loans shall be outstanding, its Outstanding
Percentage, from and against any and all liabilities, obligations, claims,
losses, damages, penalties, actions, judgments, suits, costs, expenses and
disbursements of any kind whatsoever, including any amounts paid to the Lenders
(through the Agent) by or for the account of the Companies pursuant to the terms
hereof, that are subsequently rescinded or avoided (or must otherwise be
restored or returned) which may at any time (including at any time following the
payment of the Notes) be imposed on, incurred by or asserted against the Agent
in any way relating to or arising out of this Agreement, any other Loan Document
or any other document contemplated by or referred to herein or the transactions
contemplated hereby or any action taken or omitted to be taken by the Agent
under or in connection with any of the foregoing; provided, however, that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements to the extent resulting solely from the gross
negligence or willful misconduct of the Agent. The agreements in this Section
10.7 shall survive termination of the Aggregate Commitments, the payment of the
Notes, the Reimbursement Obligations and all other amounts payable under the
Loan Documents and the performance and observance by the Companies of all of
their other obligations under the Loan Documents.
10.8 Agent in Its Individual Capacity
KBNA and its respective affiliates may make loans to, accept
deposits from, issue letters of credit for the account of and generally engage
in any kind of business with, the Borrower and its Subsidiaries as though KBNA
was not the Issuer or the Agent hereunder. With respect to the Aggregate
Commitments made or renewed by KBNA and each Note issued to KBNA, KBNA shall
have the same rights and powers under this Agreement as any Lender and may
exercise the same as though it was not the Issuer or the Agent and the term
"Lender" shall include KBNA.
10.9 Successor Agent
If at any time the Agent deems it advisable, in its sole discretion,
it may submit to the Issuer and each Lender a written notification of its
resignation as Agent under this Agreement, such resignation to be effective on
the earlier to occur of (a) the thirtieth day after the date of such notice, and
(b) the date upon which any successor Agent, in accordance with the provisions
of this Section 10.9, shall have accepted in writing its appointment as such
successor Agent. Upon any such resignation, the Required Lenders shall have the
right to appoint from among the Lenders a successor Agent reasonably acceptable
to the Borrower. If no successor Agent shall have been so appointed by the
Required Lenders and accepted such appointment within 30 days after the retiring
Agent's giving of notice of resignation, then the retiring Agent may, on behalf
of the Issuer and the Lenders, appoint a successor Agent, which successor Agent
shall be a commercial bank organized under the laws of the United States of
America or of any State thereof and having a combined capital and surplus of at
least $500,000,000. Upon the written acceptance of any appointment as Agent
hereunder by a successor Agent, such successor
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Agent shall automatically become a party to this Agreement and shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent, and the retiring Agent's rights, powers, privileges and
duties as Agent under this Agreement shall be terminated. The Companies, the
Issuer and the Lenders shall execute such documents as shall be necessary to
effect such appointment. After any retiring Agent's resignation as Agent, the
provisions of this Section 10 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this Agreement. If at any
time there shall not be a duly appointed and acting Agent, upon notice duly
given, each Company agrees to make each payment when due hereunder and under the
Notes and the other Loan Documents directly to the Issuer and the Lenders
entitled thereto during such time.
11. OTHER PROVISIONS
11.1 Amendments, Waivers, Etc.
(a) Except as otherwise provided in Section 11.1(b), with the
written consent of the Required Lenders, the Agent and the appropriate parties
to the Loan Documents (other than the Lenders) may, from time to time, enter
into written amendments, supplements or modifications thereof and, with the
consent of the Required Lenders, the Agent on behalf of the Lenders may execute
and deliver to any such parties a written instrument waiving or consenting to
the departure from, on such terms and conditions as the Agent may specify in
such instrument, any of the requirements of the Loan Documents or any Default or
Event of Default and its consequences, provided that no such amendment,
supplement, modification, waiver or consent shall, without the consent of all of
the Lenders (i) increase the Aggregate Commitment Amount or increase any
Commitment Amount of any Lender, (ii) extend any Commitment Period, (iii) reduce
the amount, or extend the time of payment, of any Fee, (iv) reduce the amount or
rate of, or extend the time of payment of, interest on any Loan or any Note, (v)
reduce the amount, or extend the time of payment of any installment or other
payment of principal on any Loan or any Note, (vi) decrease or forgive the
principal amount of any Loan or any Note, (vii) consent to any assignment or
delegation by the Borrower or any Subsidiary of any of its rights or obligations
under any Loan Document, (viii) release all or substantially all of the
obligations of any Subsidiary under the Guaranty (other than in connection with
(1) a Disposition by or of such Subsidiary permitted by Section 8.3, or (2) the
dissolution of such Subsidiary to the extent permitted by Section 7.1), (ix)
release any collateral or any security interest therein (other than in
connection with (A) a Disposition permitted under Section 8.3, (B) any release
specifically provided for in the Collateral Documents, or (C) any release of
Collateral having a fair market value of $2,500,000 or less during any fiscal
year), (x) change the provisions of Sections 3.5, 3.6, 3.7, 3.8 or 3.10, Section
9.1(a) or this Section 11.1, (xi) change the definition of Required Lenders,
(xii) change the several nature of the Lenders' and Issuer's obligations, or
(xiii) change any provision governing the sharing of payments and liabilities
among the Issuer and/or the Lenders, and provided further that no such
amendment, supplement, modification, waiver or consent shall (A) amend, modify
or waive any provision of Section 10 or otherwise change any of the rights or
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obligations of the Agent under any Loan Document without the written consent of
the Agent, or (B) amend, modify or waive any provision of Section 2.8, 2.9 or
2.10 or otherwise change any of the rights or obligations of the Issuer under
any Loan Document without the written consent of the Issuer. Any such amendment,
supplement, modification, waiver or consent shall apply equally to each of the
Lenders and shall be binding upon the parties to the applicable agreement, each
Lender, the Issuer and the Agent and all future holders of the Notes. In the
case of any waiver, the parties to the applicable agreement, each Lender, the
Issuer and the Agent shall be restored to their former position and rights
hereunder and under the other Loan Documents, and any Default or Event of
Default waived shall not extend to any subsequent or other Default or Event of
Default, or impair any right consequent thereon.
(b) Notwithstanding anything to the contrary contained in Section 11.1(a), the
Agent may, at any time and from time to time without the consent of the Issuer
or any one or more of the Lenders, (i) release all or any of the obligations of
any one or more Subsidiaries under the Guaranty in connection with (1) a
Disposition of such Subsidiary permitted by Section 8.3, or (2) the dissolution
of such Subsidiary to the extent permitted by Section 7.1, and (ii) release any
Collateral or any security interest therein in connection with (A) any
disposition of such Collateral permitted by Section 8.3, (B) any release
specifically provided for in the Collateral Documents, or (C) any release of
Collateral having a fair market value of $2,500,000 or less during any fiscal
year.
11.2 Notices
Except as otherwise expressly provided herein, all notices, requests
and demands to or upon the respective parties hereto to be effective shall be in
writing and, if in writing, shall be deemed to have been duly given or made (a)
when delivered by hand, (b) one Domestic Business Day after having been sent by
overnight courier service, (c) five Domestic Business Days after having been
deposited in the mail, first-class postage prepaid, or (d) in the case of
facsimile notice, when sent, addressed as follows in the case of the Borrower
and the Agent, and as set forth in Exhibit A in the case of each of the Lenders,
or to such other addresses as to which the Agent may be hereafter notified by
the respective parties hereto or any future holders of the Notes:
either Company:
Video Services Corporation
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxxxxxx Xxxxxxxxxx,
Senior Vice President
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
with a copy in the case of a notice of a Default:
Xxxxxx Xxxxxx Butowsky Xxxxxxx
Shalov & Xxxx
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000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxxx Xxxxx Xxxxx, Esq.
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
The Agent and the Issuer:
KeyBank National Association
0 Xxxxxxx Xxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx,
Vice President
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
with a copy to, in the case of all Borrowing Requests and Letter of Credit
Requests, prepayment notices under Section 2.7(a) and notices under Section 3.3,
and to the attention of, in the case of all fundings by the Lenders:
KeyBank National Association
0 Xxxxxxx Xxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
except that any notice, request or demand by either Company to or upon the
Agent, the Issuer or the Lenders pursuant to Sections 2.3 or 3.3 shall not be
effective until received. Any party to a Loan Document may rely on signatures of
the parties thereto which are transmitted by telecopier or other electronic
means as fully as if originally signed.
11.3 No Waiver; Cumulative Remedies
No failure to exercise and no delay in exercising, on the part of
the Agent, the Issuer or any Lender, any right, remedy, power or privilege under
any Loan Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege under any Loan
Document preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights, remedies, powers and
privileges under the Loan Documents are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
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11.4 Survival of Representations and Warranties
All representations and warranties made in the Loan Documents and in
any document, certificate or statement delivered pursuant thereto or in
connection therewith shall survive the execution and delivery of the other Loan
Documents.
11.5 Payment of Expenses and Taxes
The Companies agree, promptly upon presentation of a statement or
invoice therefor, and whether any Loan is made or Letter of Credit issued, (a)
to pay or reimburse the Agent for all its out-of-pocket costs and expenses
incurred in connection with the development, syndication, preparation and
execution of, and any amendment, waiver, consent, supplement or modification to,
the Loan Documents, any documents prepared in connection therewith and the
consummation of the transactions contemplated thereby whether such Loan
Documents or any such amendment, waiver, consent, supplement or modification to
the Loan Documents or any documents prepared in connection therewith are
executed and whether the transactions contemplated thereby are consummated,
including the reasonable fees and disbursements of Special Counsel not in excess
of $30,000, (b) to pay or reimburse the Agent, the Issuer and the Lenders for
all of their respective out-of-pocket costs and expenses incurred in connection
with the enforcement or preservation of any rights under the Loan Documents,
including reasonable fees and disbursements of counsel (including the allocated
costs of in-house counsel), (c) to pay, indemnify, and hold each Lender, the
Issuer and the Agent harmless from any and all recording and filing fees and any
and all liabilities with respect to, or resulting from any delay in paying,
stamp, excise and other similar taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
the Loan Documents and any such other documents, and (d) to pay, indemnify and
hold each Lender, the Issuer and the Agent and each of their respective
officers, directors and employees harmless from and against any and all other
liabilities, obligations, claims, losses, damages, penalties, actions,
judgments, suits, costs, expenses and disbursements of any kind or nature
whatsoever (including reasonable counsel fees and disbursements (including the
allocated costs of in-house counsel to the extent that outside counsel is not
utilized)) with respect to the enforcement and performance of the Loan Documents
(all the foregoing, collectively, the "Indemnified Liabilities") and, if and to
the extent that the foregoing indemnity may be unenforceable for any reason, the
Companies agree to make the maximum payment permitted under applicable law;
provided, however, that neither Company shall have any obligation hereunder to
pay Indemnified Liabilities to the Agent, the Issuer, any Lender or any other
Person arising from the gross negligence or willful misconduct of the Agent, the
Issuer, such Lender or such other Person, as the case may be. The agreements in
this Section 11.5 shall survive the termination of the Commitments, the payment
of the Notes and all other amounts payable under the Loan Documents, and the
performance of all of the other obligations of the Loan Parties thereunder.
11.6 Lending Offices
Subject to Section 3.15, each Lender shall have the right at any
time and from time to time to transfer any Loan to a different office of such
Lender.
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11.7 Successors and Assigns
(a) This Agreement, the Notes and the other Loan Documents to which
each Company is a party shall be binding upon and inure to the benefit of such
Company, the Lenders, the Issuer, the Agent, all future holders of the Notes and
their respective successors and assigns.
(b) Subject to Section 11.7(e), the Issuer and each Lender may at
any time assign all or any portion of its rights under one or more of the Loan
Documents to any Federal Reserve Bank.
(c) In addition to its rights under Section 11.7(b), each Lender
shall have the right to sell, assign, transfer or negotiate (each an
"Assignment") one hundred percent, or any lesser percentage, of its Loans, its
Letter of Credit Participation, its Commitments and its Notes to any subsidiary
or affiliate of such Lender, to any other Lender, or, with the consent of the
Agent and the Issuer, to any other bank, insurance company, financial
institution, pension fund, mutual fund or other similar fund (each an "Eligible
Institution"), provided that (i) each such Assignment shall be of a constant,
and not a varying, percentage of the assignor Lender's rights and obligations
under the Loan Documents, (ii) the Commitment Amounts of the Commitments
assigned, together with the outstanding principal amount of the Term Loans being
assigned, shall be not less than $5,000,000, or the full Commitment Amounts of
such assignor Lender's Commitments together with the entire outstanding
principal amount of such Lender's Term Loans, (iii) unless the assignee is
another Lender or a subsidiary or affiliate of any Lender, or unless at the time
of such Assignment an Event of Default shall exist, the Borrower shall have
consented thereto in writing (which consent shall not be unreasonably withheld),
and (iv) the assignor Lender and such assignee shall deliver to the Agent three
copies of an Assignment and Acceptance Agreement executed by each of them, along
with an assignment fee in the sum of $2,500 for the account of the Agent. Upon
receipt of such number of executed copies of each such Assignment and Acceptance
Agreement together with the assignment fee therefor and the Borrower's consent
to such Assignment, if required, the Agent shall record the same and execute not
less than two copies of such Assignment and Acceptance Agreement in the
appropriate place, deliver one such copy to the assignor and one such copy to
the assignee, and deliver one photocopy thereof, as executed, to the Borrower.
From and after the Assignment Effective Date specified in, and as defined in,
such Assignment and Acceptance Agreement, the assignee thereunder shall be a
party hereto and shall for all purposes of this Agreement and the other Loan
Documents be deemed a "Lender" and, to the extent provided in such Assignment
and Acceptance Agreement, the assignor Lender thereunder shall be released from
its obligations under this Agreement and the other Loan Documents. Each Company
agrees that, in connection with each such Assignment, it shall at its own cost
and expense execute and deliver (1) to the Agent or such assignee (x) a
Revolving Credit Note in a maximum principal amount equal to the Revolving
Credit Commitment Amount of the Revolving Credit Commitment assumed by such
assignee, and (y) a Term Note in a principal amount equal to the amount of the
Term Loan assigned to such assignee, each payable to the order of such assignee
and dated the first Borrowing Date, and (2) to the Agent or such assignor
Lender, in the event that such assignor
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Lender shall not have assigned all of its Commitments or Loans, (x) a Revolving
Credit Note in a maximum principal amount equal to the Revolving Credit
Commitment Amount of the Revolving Credit Commitment retained by such assignor,
and (y) a Term Note in a principal amount equal to the amount of the Term Loan
retained by such assignor, in each case either in escrow pending the delivery
of, or against receipt of, such assignor Lender's existing Notes. The Agent
shall be entitled to rely upon the representations and warranties made by the
assignee under each Assignment and Acceptance Agreement.
(d) In addition to the participations provided for in Section
11.9(b), each Lender may grant participations in all or any part of its Loans,
its Note and its Commitments to one or more Eligible Institutions, provided that
(i) such Lender's obligations under this Agreement and the other Loan Documents
shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties to this Agreement and the other Loan Documents for the performance
of such obligations, (iii) the Companies, the Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and the other Loan
Documents and such Lender shall retain the sole right to enforce the obligations
of the Companies relating to the Advances and to approve any modification,
amendment, or waiver of any provision of this Agreement, subject to the
provisions of Section 11.7(d)(vi), (iv) no sub-participations shall be
permitted, (v) the granting of such participation does not require that any
out-of-pocket cost or expense be borne by either Company, and (vi) the voting
rights of any holder of any participation shall be limited to the right to
consent to any action taken or omitted to be taken by such Lender under the Loan
Documents which would (A) increase any Commitment Amount of any Lender (provided
that no waiver of a Default or Event of Default or of any mandatory reduction of
any of the foregoing shall be deemed to constitute such a change), (B) extend
any Commitment Period, (C) reduce the amount or extend the time of payment of
any Fee, (D) reduce the rate or extend the time of payment of interest on any
Loan or any Note (other than the applicability of any post-default increase in
such rate of interest), (E) reduce the amount or extend the time of payment of
any installment or other payment of principal on any Loan or any Note, (F)
decrease or forgive the principal amount of any Loan or any Note, (G) consent to
any assignment or delegation by the Borrower or any of its Subsidiaries, or any
other Loan Party, of all of its rights or obligations under all of the Loan
Documents, (H) release all of the obligations of or by any Loan Party under the
Collateral Documents (other than in connection with a Disposition of such Loan
Party permitted by Section 8.3), or (I) release all of the Collateral (other
than any release specifically provided for in the Collateral Documents).
(e) No Lender shall, as between and among the Companies, the Agent,
and such Lender, be relieved of any of its obligations under the Loan Documents
as a result of any assignment of or granting of participations in, all or any
part of its Loans, its Commitments and its Notes, except that a Lender shall be
relieved of its obligations to the extent of any such Assignment of all or any
part of its Loans, its Commitments or its Notes pursuant to Section 11.7(c).
11.8 Counterparts
Each of the Loan Documents (other than the Notes) may be executed on
any number of separate counterparts and all of said counterparts taken together
shall be deemed to
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constitute one and the same agreement. It shall not be necessary in making proof
of any Loan Document to produce or account for more than one counterpart signed
by the party to be charged. A set of the copies of this Agreement and each of
the other Loan Documents signed by all of the parties thereto shall be lodged
with each of the Borrower and the Agent. Any party to a Loan Document may rely
upon the signatures of any other party thereto which are transmitted by
facsimile or other electronic means to the same extent as if originally signed.
11.9 Set-off and Sharing of Payments
(a) In addition to any rights and remedies of the Issuer and each
Lender, as the case may be, provided by law, upon the occurrence of an Event of
Default and acceleration of the Notes and the Reimbursement Obligations, or at
any time upon the occurrence and during the continuance of an Event of Default
under Sections 9.1(a) or 9.1(b), the Issuer and each Lender, as the case may be,
shall have the right, without prior notice to either Company, any such notice
being expressly waived by each Company to the extent permitted by applicable
law, to set-off and apply against any Indebtedness or other liability, whether
matured or unmatured, of such Company to the Issuer or such Lender, as the case
may be, arising under the Loan Documents, any amount owing from the Issuer or
such Lender, as the case may be, to such Company. To the extent permitted by
applicable law, the aforesaid right of set-off may be exercised by the Issuer or
such Lender, as the case may be, against such Company or against any trustee in
bankruptcy, custodian, debtor in possession, assignee for the benefit of
creditors, receiver, or execution, judgment or attachment creditor of such
Company, or against anyone else claiming through or against such Company or such
trustee in bankruptcy, custodian, debtor in possession, assignee for the benefit
of creditors, receivers, or execution, judgment or attachment creditors,
notwithstanding the fact that such right of set-off shall not have been
exercised by the Issuer or such Lender, as the case may be, prior to the making,
filing or issuance of, service upon the Issuer or such Lender, as the case may
be, of, or notice to such the Issuer or such Lender, as the case may be, of, any
petition, assignment for the benefit of creditors, appointment or application
for the appointment of a receiver, or issuance of execution, subpoena, order or
warrant. The Issuer and each Lender, as the case may be, agrees promptly to
notify the Borrower and the Agent after each such set-off and application made
by the Issuer or such Lender, as the case may be, provided that the failure to
give such notice shall not affect the validity of such set-off and application.
(b) If any Lender shall obtain any payment (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise) on
account of its Loans, its Notes or the Reimbursement Obligations in excess of
its Outstanding Percentage of payments then due and payable on account of the
Loans, the Notes and the Reimbursement Obligations received by all the Lenders,
such Lender shall forthwith purchase, without recourse, for cash, from the other
Lenders such participations in their Loans and Notes as shall be necessary to
cause such purchasing Lender to share such excess payment with each of them
according to their Outstanding Percentages, provided, however, that if all or
any portion of such excess payment is thereafter recovered from such purchasing
Lender, such purchase from such other Lenders shall be re-
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scinded and such other Lenders shall repay to the purchasing Lender the purchase
price to the extent of such recovery, together with an amount equal to the
Lender's pro rata share (according to the proportion of (i) the amount of other
Lender's required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. Each Company
agrees that any Lender so purchasing a participation from such other Lenders, as
the case may be, pursuant to this Section 11.9(b) may exercise such rights to
payment (including the right of set-off) with respect to such participation as
fully as if such Lender were the direct creditor of such Company in the amount
of such participation.
11.10 Indemnity
Each Company agrees to indemnify and hold harmless the Agent, the
Issuer and each Lender from and against (x) any and all liabilities,
obligations, claims, losses, damages, penalties, actions, judgments, suits,
costs, expenses and disbursements of any kind whatsoever (excluding Taxes) which
may at any time (including at any time following the payment of the Notes) be
imposed on, incurred by or asserted against the Agent, the Issuer or any Lender
relating to or arising out of this Agreement, any other Loan Document or any
other document contemplated by or referred to herein or the transactions
contemplated hereby or any action taken or omitted to be taken by the Agent, the
Issuer or such Lender under or in connection with any of the foregoing, and/or
(y) any loss, cost, liability, damage or expense, including the reasonable fees
and disbursements of counsel (including the allocated costs and expenses of
in-house counsel to the extent that outside counsel is not utilized) to the
Agent, the Issuer and each Lender incurred by the Agent, the Issuer or such
Lender in investigating, preparing for, defending against, or providing
evidence, producing documents or taking any other action in respect of, any
commenced or threatened litigation, administrative proceeding or investigation
under any federal securities law or any other statute of any jurisdiction, or
any regulation, or at common law or otherwise, which is alleged to arise out of
or is based upon (1) any untrue statement or alleged untrue statement of any
material fact, in any document or schedule executed or filed with any
Governmental Authority by or on behalf of the Borrower or any of its
Subsidiaries which relates to the transactions contemplated by the Loan
Documents, (2) any omission or alleged omission to state any material fact
required to be stated in such document or schedule, or necessary to make the
statements made therein, in light of the circumstances under which made, not
misleading, (3) any acts, practices or omissions or alleged acts, practices or
omissions of either Company or its agents relating to the use of the proceeds of
any Loan which is alleged to be in violation of Section 2.4, or in violation of
any federal securities law or of any other statute, regulation or other law of
any jurisdiction applicable thereto, or (4) this Agreement, any other Loan
Document or any other document contemplated by or referred to herein or the
transactions contemplated hereby or any action taken or omitted to be taken by
the Agent, the Issuer or such Lender under or in connection with any of the
foregoing. The indemnity set forth herein shall be in addition to any other
obligations or liabilities of the Companies to the Agent, the Issuer and the
Lenders hereunder or at common law or otherwise, shall include the fees and
expenses of counsel (including the allocated costs and expenses of in-house
counsel to the extent that outside counsel is not utilized) incurred in
connection with establishing liability under this Section 11.10 or collecting
amounts payable under this Section 11.10 and shall survive any termination of
this Agreement, the expiration of the Aggregate Commitments and the payment of
all indebtedness of the Companies hereunder and under the other Loan Documents,
provided that neither Company shall
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have any obligation under this Section 11.10 to the Agent, the Issuer or any
Lender with respect to any of the foregoing to the extent determined in a final
judgment, after available appeals, to have arisen from the gross negligence or
willful misconduct of the Agent, the Issuer or any Lender.
11.11 Governing Law
The Loan Documents and the rights and obligations of the parties
thereto shall be governed by, and construed and interpreted in accordance with,
the laws of the State of New York.
11.12 Severability
Every provision of this Agreement and the other Loan Documents is
intended to be severable, and if any term or provision hereof or thereof shall
be invalid, illegal or unenforceable for any reason, the validity, legality and
enforceability of the remaining provisions hereof or thereof shall not be
affected or impaired thereby, and any invalidity, illegality or unenforceability
in any jurisdiction shall not affect the validity, legality or enforceability of
any such term or provision in any other jurisdiction.
11.13 Integration
All exhibits to this Agreement and any other Loan Document shall be
deemed to be a part of this Agreement or such other Loan Document, as the case
may be. Each Loan Document embodies the entire agreement and understanding
between or among the parties thereto with respect to the subject matter thereof
and supersedes all prior agreements and understandings between or among the
parties thereto with respect to the subject matter thereof.
11.14 Acknowledgments
Each Loan Party acknowledges that (a) it has been advised by counsel
in the negotiation, execution and delivery of the Loan Documents, (b) by virtue
of the Loan Documents, neither the Agent, the Issuer nor any Lender has any
fiduciary relationship to such Loan Party, and the relationship between the
Agent, the Issuer and the Lenders, on the one hand, and such Loan Party, on the
other hand, is solely that of debtor and creditor, and (c) by virtue of the Loan
Documents, no joint venture exists among the Agent, the Issuer and the Lenders
or among such Loan Party and the Agent and/or the Lenders and/or the Issuer.
11.15 Consent to Jurisdiction
Each Loan Party irrevocably submits to the jurisdiction of any New
York State or Federal Court sitting in the City of New York over any suit,
action or proceeding arising out of or relating to the Loan Documents. Each Loan
Party irrevocably waives, to the fullest extent
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permitted by law, any objection which it may now or hereafter have to the laying
of the venue of any such suit, action or proceeding brought in such a court and
any claim that any such suit, action or proceeding brought in such a court has
been brought in an inconvenient forum. Each Loan Party agrees that a final
judgment in any such suit, action or proceeding brought in such a court, after
all appropriate appeals, shall be conclusive and binding upon it.
11.16 Service of Process
Each Loan Party agrees that process may be served against it in any
suit, action or proceeding referred to in Section 11.15 by sending the same by
first class mail, return receipt requested or by overnight courier service, to
the address of such Loan Party set forth in Section 11.2 or in the applicable
Loan Document executed by such Loan Party. Each Loan Party agrees that any such
service (i) shall be deemed in every respect effective service of process upon
it in any such suit, action, or proceeding, and (ii) shall to the fullest extent
enforceable by law, be taken and held to be valid personal service upon and
personal delivery to it.
11.17 No Limitation on Service or Suit
Nothing in the Loan Documents or any modification, waiver, or
amendment thereto shall affect the right of the Agent, the Issuer or any Lender
to serve process in any manner permitted by law or limit the right of the Agent,
the Issuer or any Lender to bring proceedings against any Loan Party in the
courts of any jurisdiction or jurisdictions.
11.18 WAIVER OF TRIAL BY JURY
THE AGENT, THE ISSUER, THE LENDERS AND EACH LOAN PARTY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER OR IN CONNECTION WITH THE LOAN
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY. FURTHER, EACH LOAN PARTY
HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF THE AGENT, THE ISSUER OR THE
LENDERS, OR COUNSEL TO THE AGENT, THE ISSUER OR THE LENDERS, HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT THE AGENT, THE ISSUER OR THE LENDERS WOULD NOT, IN
THE EVENT OF SUCH LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL
PROVISION. EACH LOAN PARTY ACKNOWLEDGES THAT THE AGENT, THE ISSUER AND THE
LENDERS HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, INTER ALIA, THE
PROVISIONS OF THIS SECTION 11.18.
11.19 Effective Date
This Agreement shall be effective at such time (the "Effective
Date") as executed counterparts hereof shall have been delivered to the Agent
and the Borrower by the Agent, the Borrower, the Debtor, the Issuer and each
Lender.
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11.20 Treatment of Certain Information
Each Lender, the Issuer and the Agent agrees (on behalf of itself
and each of its affiliates, directors, officers, employees and representatives)
to use reasonable precautions to keep confidential, in accordance with their
customary procedures for handling confidential information of the same nature,
all non-public information supplied by the Borrower or any Subsidiary pursuant
to this Agreement which (a) is identified by such Person as being confidential
at the time the same is delivered to such Lender, the Issuer or the Agent, or
(b) constitutes any financial statement, financial projections or forecasts,
budget, compliance certificate, audit report, management letter or accountants'
certification delivered hereunder, provided, however, that nothing herein shall
limit the disclosure of any such information (i) to the extent required by
statute, rule, regulation or judicial process, (ii) on a confidential basis, to
counsel for any of the Lenders, the Issuer or the Agent, (iii) to bank
examiners, auditors or accountants, and any analogous counterpart thereof, (iv)
to the Agent, the Issuer or the Lenders, (v) in connection with any litigation
to which any one or more of the Lenders, the Issuer or the Agent is a party,
(vi) to any assignee or participant (or prospective assignee or participant) so
long as such assignee or participant (or prospective assignee or participant)
agrees to keep such information confidential on substantially the same basis as
set forth in this Section 11.20, or (vii) to affiliates of the Agent, the Issuer
and each Lender.
11.21 Joint and Several Obligations
Subject to Section 11.22, the obligations and liabilities of each
Company under this Agreement and the Notes shall be joint and several.
11.22 Limitations on Liability
Notwithstanding anything to the contrary contained in any Loan
Document, the maximum liability of the Debtor under the Loan Documents shall
not, as of any date of determination, exceed the lesser of (i) the highest
amount that is valid and enforceable against the Debtor under principles of New
York State contract law, and (ii) the sum of (A) all Consideration received by
the Debtor as of such date of determination, plus (B) 95% of the Net Worth of
the Debtor on such date of determination. "Consideration" shall mean, as of any
date of determination and with respect to the Debtor, an amount equal to the
lesser of (a) the total "value" (within the meaning of Section 548 of the
Bankruptcy Code as in effect on the date hereof) given, directly or indirectly,
to the Debtor during the period commencing on the date the Debtor became a party
to this Agreement and ending on such date of determination, in exchange for the
execution and delivery of the Loan Documents, and (b) the amount of "fair
consideration" (within the meaning of Article 10 of the New York Debtor Creditor
Law as in effect on the date hereof) given, directly or indirectly, to the
Debtor during the period commencing on the date the Debtor became a party to
this Agreement and ending on such date of determination in exchange for the
execution and delivery of the Loan Documents. "Net Worth" shall mean, as of any
date and with respect to the Debtor, the lesser of the following:
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(a)(i) all of the Debtor's "property, at a fair valuation" (within
the meaning of Section 101(32) of the Bankruptcy Code as in effect on the
date hereof) on such date, minus (ii) the sum of the Debtor's "debts"
(within the meaning of Section 101(12) of the Bankruptcy Code as in effect
on the date hereof) on such date (excluding its obligations under this
Agreement), or
(b)(i) the "fair salable value of the assets" (within the meaning of
Article 10 of the New York Debtor Creditor Law as in effect on the date
hereof) of the Debtor on such date, minus (ii) "the amount that will be
required to pay the Debtor's probable liability on its existing debts as
they become absolute and matured" (as such phrase would be construed under
Article 10 of the New York Debtor Creditor Law as in effect on the date
hereof) on such date (excluding its obligations under the Loan Documents).
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AS EVIDENCE of its agreement to the terms and conditions herein contained,
each of the undersigned has caused this Agreement to be executed on its behalf.
VIDEO SERVICES CORPORATION
By: /s/ Xxxxxxxxxxx Xxxxxxxxx
--------------------------------
Name:
------------------------------
Title:
-----------------------------
1
91
VSC MAL CORP.
By: /s/ Xxxxxxxxxxx Xxxxxxxxx
--------------------------------
Name:
------------------------------
Title:
-----------------------------
2
92
KEYBANK NATIONAL ASSOCIATION, in its
capacity as a Lender, as the
Issuer, and as the Agent
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Name:
------------------------------
Title:
-----------------------------
3
93
SUMMIT BANK
By: /s/ Xxxxxx X. Xxxxx
--------------------------------
Name:
------------------------------
Title:
-----------------------------
4
