EXHIBIT 99.3
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of April 29, 2002
Among
TELESPECTRUM WORLDWIDE INC.,
as BORROWER,
and
THE LENDERS NAMED HEREIN,
and
BNP PARIBAS
as ADMINISTRATIVE AGENT and COLLATERAL AGENT
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS ...................................... 2
SECTION 1.01. Certain Defined Terms .................................... 2
SECTION 1.02. Computation of Time Periods; Other Definitional Provisions 18
SECTION 1.03. Accounting Terms ......................................... 19
ARTICLE II AMOUNTS AND TERMS OF THE LOANS ....................................... 19
SECTION 2.01. Term Loans and Term Notes ................................ 19
SECTION 2.02. [Intentionally Omitted] .................................. 20
SECTION 2.03. [Intentionally Omitted] .................................. 20
SECTION 2.04. Repayment of Term Loans .................................. 21
SECTION 2.05. [Intentionally Omitted] .................................. 21
SECTION 2.06. Prepayments .............................................. 21
SECTION 2.07. Interest ................................................. 21
SECTION 2.08. Agent's Fees ............................................. 22
SECTION 2.09. [Intentionally Omitted] .................................. 22
SECTION 2.10. Increased Costs, Etc ..................................... 22
SECTION 2.11. Payments and Computations ................................ 23
SECTION 2.12. Taxes .................................................... 24
SECTION 2.13. Sharing of Payments, Etc ................................. 26
SECTION 2.14. Use of Proceeds .......................................... 27
SECTION 2.15. Evidence of Debt ......................................... 27
SECTION 2.16. Maximum Lawful Rate ...................................... 27
ARTICLE III CONDITIONS OF LENDING ............................................... 28
SECTION 3.01. Conditions Precedent to Closing .......................... 28
SECTION 3.02. Determinations Under Section 3.01 ........................ 33
ARTICLE IV REPRESENTATIONS AND WARRANTIES ....................................... 33
SECTION 4.01. Representations and Warranties of the Borrower ........... 33
ARTICLE V COVENANTS ............................................................. 39
SECTION 5.01. Affirmative Covenants .................................... 39
SECTION 5.02. Negative Covenants ....................................... 44
SECTION 5.03. Reporting Requirements ................................... 49
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TABLE OF CONTENTS
(CONTINUED)
PAGE
SECTION 5.04. Financial Covenants ...................................... 53
ARTICLE VI EVENTS OF DEFAULT .................................................... 54
SECTION 6.01. Events of Default ........................................ 54
ARTICLE VII THE AGENT ........................................................... 57
SECTION 7.01. Authorization and Action ................................. 57
SECTION 7.02. Agent's Reliance, Etc .................................... 57
SECTION 7.03. BNP and Affiliates ....................................... 58
SECTION 7.04. Lender Party Credit Decision ............................. 58
SECTION 7.05. Indemnification .......................................... 58
SECTION 7.06. Successor Agent .......................................... 59
ARTICLE VIII MISCELLANEOUS ...................................................... 59
SECTION 8.01. Amendments, Etc .......................................... 59
SECTION 8.02. Notices, Etc ............................................. 60
SECTION 8.03. No Waiver; Remedies ...................................... 60
SECTION 8.04. Costs and Expenses ....................................... 61
SECTION 8.05. Right of Set-off ......................................... 62
SECTION 8.06. Binding Effect ........................................... 62
SECTION 8.07. Assignments and Participations ........................... 62
SECTION 8.08. Execution in Counterparts ................................ 65
SECTION 8.09. [Intentionally Omitted] .................................. 65
SECTION 8.10. Jurisdiction, Etc ........................................ 65
SECTION 8.11. Governing Law ............................................ 65
SECTION 8.12. Judgment ................................................. 65
SECTION 8.13. Waiver of Jury Trial ..................................... 66
SECTION 8.14. Confidentiality .......................................... 66
SECTION 8.15. Release and Waiver ....................................... 66
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TABLE OF CONTENTS
PAGE
SCHEDULES
Schedule I - Commitments and Domestic Lending Offices
Schedule IA - Lenders' Pro Rata Shares of the Facilities
Schedule 3.01(a)(iii)(H) - Blocked Accounts
Schedule 3.01(a)(iv) - Guarantors
Schedule 3.01(a)(x) - Jurisdictions of Activity as Foreign Corporation
Schedule 3.01(a)(xx) - Unrestructured Indebtedness
Schedule 3.01(i) - [Intentionally Omitted]
Schedule 3.01(k) - Leased Real Property Report
Schedule 4.01(b) - Subsidiaries of the Borrower
Schedule 4.01(d) - Authorizations, Approvals, Actions, Notices and Filings
Schedule 4.01(j) - Pending Litigation
Schedule 4.01(o) - Plans, Multiemployer Plans and Welfare Plans
Schedule 4.01(p) - Open Years
Schedule 4.01(u) - Locations of Inventory
Schedule 4.01(v) - Leased Real Property
Schedule 4.01(w) - Existing Investments
Schedule 4.01(x) - Intellectual Property
Schedule 4.01(y) - Existing Liens
Schedule 4.01(aa) - Deposit Accounts
Schedule 4.01(bb) - [Intentionally Omitted]
Schedule 4.01(dd) - Material Contracts
Schedule 5.02(b)(ii)(F) - Structured Vendor Settlements
Schedule 5.04(e) - Intentionally Omitted
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TABLE OF CONTENTS
(CONTINUED)
PAGE
EXHIBITS
EXHIBIT A-1 - Form of Term Note
EXHIBIT B - [Intentionally Omitted]
EXHIBIT C - Form of Assignment and Acceptance
EXHIBIT D - Form of Security Agreement
EXHIBIT E-1 - Form of Canadian Security Agreement
EXHIBIT E-2 - Form of Debenture
EXHIBIT E-3 - Form of Debenture Pledge Agreement
EXHIBIT F-1 - Form of U.S. Guaranty
EXHIBIT F-2 - Form of Canadian Guaranty
EXHIBIT G - [Intentionally Omitted]
EXHIBIT H-1 - Form of Opinion of Counsel to Loan Parties
EXHIBIT H-2 - Form of Opinion of Canadian Counsel to Loan Parties
EXHIBIT I - Form of Acknowledgment and Consent
EXHIBIT J - Form of Restructuring Agreement
EXHIBIT K-1 - Form of Intercompany Subordination Agreement
EXHIBIT K-2 - Form of Intercompany Note
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT
This SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of April
29, 2002 among TELESPECTRUM WORLDWIDE INC., a Delaware corporation (the
"BORROWER"), the banks, financial institutions and other institutional lenders
listed on the signature pages hereof as the Lenders (the "LENDERS"), BNP PARIBAS
(f/k/a Banque Nationale de Paris) ("BNP"), as administrative agent (the
"ADMINISTRATIVE AGENT"), and as collateral agent (together with any successors
appointed pursuant to Article VII, the "COLLATERAL AGENT"; together with the
Administrative Agent, the "AGENT") for the Lenders.
PRELIMINARY STATEMENTS:
WHEREAS, pursuant to that certain Amended and Restated Credit
Agreement dated as of April 16, 2001, by and among the Borrower, the banks,
financial institutions and other institutional lenders listed on the signature
papers thereof, and the Agent (as heretofore amended, restated, supplemented or
otherwise modified, the "EXISTING CREDIT AGREEMENT"), the Lenders have made
certain credit facilities available to the Borrower in accordance with the terms
thereof;
WHEREAS, as of the date hereof, the aggregate amount of the Existing
Advances (including, without limitation, all principal and accrued and unpaid
interest, fees and expenses) is $160,915,586;
WHEREAS, the parties to the Existing Credit Agreement have agreed to
amend and restate the Existing Credit Agreement in its entirety in order to,
among other things, (i) convert the aggregate principal amount of $25,000,000 of
the Existing Advances to Term Loans, (ii) convert pursuant to the Restructuring
Agreement the aggregate amount of $40,000,000 of the Existing Advances to 40,000
shares of Series A Preferred Stock, (iii) convert pursuant to the Restructuring
Agreement the remaining balance of the Existing Advances as of the Second
Restatement Date, approximating $96,000,000, to 90,000 shares of Series B
Convertible Preferred Stock, (iv) establish a new Final Maturity Date, (v) amend
certain of the financial and other covenants contained in the Existing Credit
Agreement, and (vi) make certain other amendments to the Existing Credit
Agreement, all as set forth herein;
WHEREAS, it is the intention of the Borrower, the Agent and the
Lenders that such amendment and restatement of the Existing Credit Agreement
shall not constitute a refinancing of, but rather a modification and
continuation of, the Existing Advances outstanding on the Second Restatement
Date;
WHEREAS, to induce the Agent and the Lenders to enter into this
Agreement, the Borrower has agreed to grant to the Agent, or confirm its grant
to the Agent, on behalf of the Lenders, a first priority Lien on substantially
all of the Borrower's property (real, personal and mixed), including a pledge of
all the capital stock or other ownership interests of its Subsidiaries; and
WHEREAS, to induce the Agent and the Lenders to enter into this
Agreement, each U.S. Subsidiary and each Foreign Subsidiary has agreed to
guaranty, or confirm its guarantee of, the Obligations hereunder and under the
other Loan Documents, and each U.S.
Subsidiary and each Foreign Subsidiary has agreed to secure its guaranty by
granting to Agent, or confirming its grant to the Agent, on behalf of the
Lenders, a first priority Lien on substantially all of its respective property
(real, personal and mixed).
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree that
on the Second Restatement Date the Existing Credit Agreement shall be amended
and restated in its entirety as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"ACKNOWLEDGEMENT AND CONSENT" means the Acknowledgement and Consent
executed and delivered by each Loan Party substantially in the form of Exhibit I
annexed hereto pursuant to which each such Person acknowledges and consents to
this Agreement and confirms the continuing effectiveness of each Loan Document
to which it is a party.
"ADMINISTRATIVE AGENT" has the meaning specified in the recital of
the parties to this Agreement.
"AFFILIATE" means, as to any Person, any other Person that, directly
or indirectly, controls, is controlled by or is under common control with such
Person or is a director or officer of such Person. For purposes of this
definition, the term "control" (including the terms "controlling", "controlled
by" and "under common control with") of a Person means the possession, direct or
indirect, of the power to vote 5% or more of the Voting Interests of such Person
or to direct or cause the direction of the management and policies of such
Person, whether through the ownership of Voting Interests, by contract or
otherwise.
"AGENT" has the meaning specified in the recital of the parties to
this Agreement.
"AGENT'S ACCOUNT" means the account of the Agent maintained by the
Agent at the Federal Reserve Bank of New York, 00 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, ABA No. 000000000, for further credit to Account No. 750420-701-03,
or such other account maintained by the Agent and designated by the Agent in a
written notice to the Lender Parties and the Borrower.
"APPLICABLE MARGIN" means 4.0% per annum.
"APPROVED FUND" means, with respect to any Lender that is a fund
that invests in bank loans, any other fund that invests in bank loans and is
advised or managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
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"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy," as now and hereafter in effect, or any successor statute.
"BASE RATE" means a fluctuating interest rate per annum in effect
from time to time, which rate per annum shall at all times be equal to the
higher of:
(a) the rate of interest announced publicly by BNP in New York, New
York, from time to time, as its prime rate (and such term shall not be construed
to be its best or most favorable rate); and
(b) 1/2 of one percent per annum above the Federal Funds Rate.
"BLOCKED ACCOUNT" means a deposit account for which the Agent has
received a Blocked Account Letter duly executed by the applicable Blocked
Account Bank or over which the Agent holds a perfected Lien or similar security
interest.
"BLOCKED ACCOUNT LETTER" has the meaning specified in the U.S.
Security Agreement.
"BLOCKED ACCOUNT BANK" has the meaning specified in the U.S.
Security Agreement.
"BNP" has the meaning specified in the recital of the parties to
this Agreement.
"BORROWER" has the meaning specified in the recital of the parties
to this Agreement.
"BORROWER'S ACCOUNT" means the account of the Borrower maintained by
the Borrower with BNP at BNP's office at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Account No. 205200-001-88. or such other account as the Borrower and the
Agent may from time to time designate as the "Borrower's Account".
"BUSINESS DAY" means a day of the year on which banks are not
required or authorized by law to close in New York City.
"CANADIAN GUARANTY" means that certain Guaranty dated June 30, 1999
executed and delivered by each Canadian Subsidiary of the Borrower in favor of
the Secured Parties, in the form of Exhibit F-2, as amended, supplemented or
otherwise modified from time to time in accordance with its terms.
"CANADIAN SECURITY AGREEMENTS" means those certain Security
Agreements dated June 30, 1999 executed and delivered by each Canadian
Subsidiary of the Borrower in favor of the Collateral Agent, in the form of
Exhibit E-1, as amended, supplemented or otherwise modified from time to time in
accordance with its terms.
"CANADIAN SUBSIDIARY" means any Subsidiary of the Borrower organized
under the laws of Canada or any of the provinces of Canada.
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"CAPITAL EXPENDITURES" means, for any Person for any period, the sum
of, without duplication, (a) all cash expenditures made, directly or indirectly,
by such Person or any of its Subsidiaries during such period for equipment,
fixed assets, real property or improvements, or for replacements or
substitutions therefor or additions thereto, that have been or should be, in
accordance with GAAP, reflected as additions to property, plant or equipment on
a Consolidated balance sheet of such Person plus (b) the aggregate principal
amount of all Debt (including Obligations under Capitalized Leases) assumed or
incurred in connection with any such expenditures.
"CAPITAL LEASE" as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee, that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"CAPITALIZED LEASES" means all leases that have been or should be,
in accordance with GAAP, recorded as capitalized leases.
"CASH EQUIVALENTS" means any of the following, to the extent owned
by the Borrower or any of its Subsidiaries free and clear of all Liens other
than Liens created under the Collateral Documents or Permitted Liens and having
a maturity of not greater than 180 days from the date of acquisition thereof:
(a) readily marketable direct obligations of the Government of the United States
or any agency or instrumentality thereof or obligations unconditionally
guaranteed by the full faith and credit of the government of the United States,
(b) insured certificates of deposit of or time deposits with any commercial bank
that is a Lender Party or a member of the Federal Reserve System and issues (or
the parent of which issues) commercial paper rated as described in clause (c)
and which is organized under the laws of the United States or any State thereof
and has combined capital and surplus of at least $1 billion, (c) commercial
paper in an aggregate amount of no more than $250,000 per issuer outstanding at
any time, issued by any corporation organized under the laws of any State of the
United States and rated at least "Prime-1" (or the then equivalent grade) by
Xxxxx'x Investors Service, Inc. or "A-1" (or the then equivalent grade) by
Standard & Poor's Rating Group, a division of The XxXxxx-Xxxx Companies, Inc.,
or (d) Investments in money market or mutual funds that invest solely in Cash
Equivalents of the types described in clauses (a), (b) and (c), above.
"CHARTER AMENDMENT" means the amendment of the Borrower's
certificate of incorporation to increase the number of authorized shares of
common stock to permit the conversion of all shares of Series B Convertible
Preferred Stock into common stock of the Borrower such that immediately after
giving effect to such conversion Lenders will hold 95% of the then outstanding
shares of common stock of the Borrower and the related adoption by the Board of
Directors of the Borrower of a resolution approving and recommending same.
"COLLATERAL" means all "COLLATERAL" referred to in the Collateral
Documents and all other property that is or is intended to be subject to any
Lien in favor of the Agent for the benefit of the Secured Parties.
"COLLATERAL AGENT" has the meaning specified in the recital of the
parties to this Agreement.
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"COLLATERAL DOCUMENTS" means the Security Agreements, the
Debentures, the Debenture Pledge Agreements, and any other agreement that
creates or purports to create a Lien in favor of the Agent for the benefit of
the Lenders.
"CONFIDENTIAL INFORMATION" means information that any Loan Party or
any of its Subsidiaries furnishes to the Agent or any Lender Party on a
confidential basis, but does not include any such information that is or becomes
generally available to the public or that is or becomes available to the Agent
or such Lender Party from a source other than any Loan Party or any of its
Subsidiaries.
"CONSOLIDATED EBITDA" means, for any period, the sum, determined on
a Consolidated basis without duplication, of (a) net income (or net loss), (b)
Consolidated Interest Expense net of interest income, (c) income tax expense,
(d) depreciation expense, (e) amortization expense, (f) the legal and financial
advisory fees and expenses paid by the Borrower in connection with the
negotiation, execution and delivery of this Agreement and the Restructuring
Agreement and the consummation of the transactions contemplated hereby and
thereby, and (g) extraordinary or unusual or non-recurring transactional losses
deducted in calculating net income less extraordinary or unusual gains or
non-recurring transactional income added in calculating net income.
"CONSOLIDATED" refers, with respect to any Person, to the
consolidation of accounts of such Person and its Subsidiaries in accordance with
GAAP.
"CONSOLIDATED FIXED CHARGES" means, for any period, the sum (without
duplication) of the amounts for such period of (i) Consolidated Interest
Expense, (ii) scheduled principal payments in respect of Consolidated Total
Debt, (iii) provisions for taxes based on income, (iv) dividends paid in cash ,
(v) Capital Expenditures paid in cash and (vi) the aggregate amount of all rents
paid or payable during that period under all Capital Leases to which Borrower or
any of its Subsidiaries is a party as lessee, all of the foregoing as determined
on a Consolidated basis.
"CONSOLIDATED INTEREST EXPENSE" means, with respect to any Person
for any period, interest expense (including the interest component on
obligations under Capitalized Leases), whether paid or accrued, on all Debt
(other than Debt under the Structured Vendor Settlements set forth on Schedule
5.02(b)(ii)(F) and any amounts payable to Xxxx Xxxxxxx pursuant to the Consent
to Entry of Judgment between the Borrower and Xxxx Xxxxxxx) of such Person and
its Subsidiaries for such period, including, without limitation and without
duplication, (a) interest expense in respect of Debt (including in respect of
the Term Loans) and (b) commissions, discounts and other fees and charges
payable in connection with letters of credit.
"CONSOLIDATED TOTAL DEBT" means, as at any date of determination,
the aggregate stated balance sheet amount of all Debt of Borrower and its
Subsidiaries (other than Debt under the Structured Vendor Settlements set forth
on Schedule 5.02(b)(ii)(F) and any amounts payable to Xxxx Xxxxxxx pursuant to
the Consent to Entry of Judgment between the Borrower and Xxxx Xxxxxxx),
determined on a Consolidated basis.
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"CONTINGENT OBLIGATION" means, with respect to any Person, any
Obligation or arrangement of such Person to guarantee or intended to guarantee
any Debt, leases, dividends or other payment Obligations ("PRIMARY OBLIGATIONS")
of any other Person (the "PRIMARY OBLIGOR") in any manner, whether directly or
indirectly, including, without limitation, (a) the direct or indirect guarantee,
endorsement (other than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by such
Person of the Obligation of a primary obligor, (b) the Obligation to make
take-or-pay or similar payments, if required, regardless of nonperformance by
any other party or parties to an agreement or (c) any Obligation of such Person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (A) for the purchase or payment of any such primary obligation or
(B) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, assets, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation or (iv) otherwise to assure
or hold harmless the holder of such primary obligation against loss in respect
thereof, provided, however, that for purposes of this Agreement the term
"Contingent Obligation" shall not include or be a reference to any such
Obligation or arrangement of a Loan Party if such Obligation or arrangement
guarantees an operating lease, or other operating agreement entered into by any
of its Subsidiaries or another Loan Party in the ordinary course of such
Subsidiary's or Loan Party's telemarketing business. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made (or, if less, the maximum amount of such primary
obligation for which such Person may be liable pursuant to the terms of the
instrument evidencing such Contingent Obligation) or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder), as determined by such
Person in good faith.
"DEBENTURE" means that certain Demand Debenture dated as of June 30,
1999 executed and delivered by S&P Data Corp. (now known as TeleSpectrum
Worldwide (Canada) Inc.), a Canadian Subsidiary of the Borrower, in favor of the
Agent, in the form of Exhibit E-2, as amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"DEBENTURE PLEDGE AGREEMENT" means that certain Debenture Pledge
Agreement dated June 30, 1999 executed and delivered by S&P Data Corp. (now
known as TeleSpectrum Worldwide (Canada) Inc.), a Canadian Subsidiary of the
Borrower, in favor of the Agent, in the form of Exhibit E-3, as amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"DEBT" of any Person means, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all Obligations, contingent
or otherwise, of such Person for the deferred purchase price of property or
services (other than trade payables not overdue by more than 60 days incurred in
the ordinary course of such Person's business), (c) all Obligations, contingent
or otherwise, of such Person evidenced by notes, bonds, debentures or other
similar instruments, (d) all Obligations, contingent or otherwise, of such
Person created or arising under any conditional sale or other title retention
agreement with respect to property acquired by such Person (even though the
rights and remedies of the seller or lender under such agreement in the
6
event of default are limited to repossession or sale of such property), (e) all
Obligations, contingent or otherwise, of such Person as lessee under Capitalized
Leases, (f) all Obligations, contingent or otherwise, of such Person under
acceptance, letter of credit or similar facilities, (g) all Obligations of such
Person to purchase, redeem, retire, defease or otherwise make any payment in
respect of any Equity Interests in such Person or any other Person or any
warrants, rights or options (other than warrants, rights or options for which
such Person has sole control over the terms and conditions of the exercise
thereof) to acquire such capital stock, valued, in the case of Redeemable
Preferred Interests, at the greater of its voluntary or involuntary liquidation
preference plus accrued and unpaid dividends but excluding the Series A
Preferred Stock and Series B Convertible Preferred Stock until such time as it
is required to be redeemed, (h) all Obligations of such Person in respect of any
Hedge Agreement, (i) all Contingent Obligations of such Person and (j) all
indebtedness and other payment Obligations referred to in clauses (a) through
(i) above of another Person secured by (or for which the holder of such Debt has
an existing right, contingent or otherwise, to be secured by) any Lien on
property (including, without limitation, accounts and contract rights) owned by
such Person, even though such Person has not assumed or become liable for the
payment of such indebtedness or other payment Obligations.
"DEFAULT" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be given or
time elapse or both.
"DOLLAR" and "$" each mean lawful money of the United States of
America.
"DOMESTIC LENDING OFFICE" means, with respect to any Lender Party,
the office of such Lender Party specified as its "Domestic Lending Office"
opposite its name on Schedule I hereto or in the Assignment and Acceptance
pursuant to which it became a Lender Party, as the case may be, or such other
office of such Lender Party as such Lender Party may from time to time specify
to the Borrower and the Agent.
"ELIGIBLE ASSIGNEE" means with respect to the Term Loan Facility,
any Lender, an Affiliate of a Lender, or any other Person approved by the Agent,
such approval not to be unreasonably withheld or delayed; provided, however,
that neither any Loan Party nor any Affiliate of a Loan Party shall qualify as
an Eligible Assignee under this definition.
"ENVIRONMENTAL ACTION" means any administrative, regulatory or
judicial action, suit, demand, demand letter, claim, notice of non-compliance or
violation, notice of liability or potential liability, investigation,
proceeding, consent order, consent agreement, abatement order or other order or
directive relating in any way to any Environmental Law, any Environmental Permit
or Hazardous Material or Hazardous Material Activity or arising from any
potential or alleged injury or threat to health, safety, natural resources or
the environment, including, without limitation, (a) by any governmental or
regulatory authority for enforcement, cleanup, removal, response, remedial or
other actions or damages and (b) by any governmental or regulatory authority or
third party for damages, contribution, indemnification, cost recovery,
compensation or injunctive relief.
"ENVIRONMENTAL LAW" means any current or future federal, state,
provincial, local or foreign statute, law, ordinance, rule, regulation, code,
order, writ, judgment, injunction, decree
7
or judicial or agency interpretation, policy or guidance relating to pollution
or protection of the environment, health, safety or natural resources,
including, without limitation, those relating to the use, handling,
transportation, treatment, storage, disposal, Release or discharge of Hazardous
Materials, as amended or supplemented.
"ENVIRONMENTAL PERMIT" means any permit, approval, certificate,
identification number, license, entitlement or other authorization required
under any Environmental Law or any waiver or amendment of the foregoing.
"EQUIPMENT" means all "Equipment" referred to in Section 1(a) of the
U.S. Security Agreement and Section 1.2(l)(b) of the Canadian Security
Agreements.
"EQUITY INTERESTS" means, with respect to any Person, shares of
capital stock of (or other ownership or profit interests in) such Person,
warrants, options or other rights for the purchase or other acquisition from
such Person of shares of capital stock of (or other ownership or profit
interests in) such Person, securities convertible into or exchangeable for
shares of capital stock of (or other ownership or profit interests in) such
Person or warrants, rights or options for the purchase or other acquisition from
such Person of such shares (or such other interests), and other ownership or
profit interests in such Person (including, without limitation, partnership,
member or trust interests therein), whether voting or nonvoting, and whether or
not such shares, warrants, options, rights or other interests are authorized or
otherwise existing on any date of determination.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA AFFILIATE" means any Person that for purposes of Title IV of
ERISA is, or at the applicable time was, a member of the controlled group of any
Loan Party, or under common control with any Loan Party, within the meaning of
Section 414 of the Internal Revenue Code.
"ERISA EVENT" means (a) (i) the occurrence of a reportable event,
within the meaning of Section 4043 of ERISA, with respect to any Plan unless the
30-day notice requirement with respect to such event has been waived by the
PBGC; or (ii) the requirements of subsection (1) of Section 4043(b) of ERISA
(without regard to subsection (2) of such Section) are met with respect to a
contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan, and
an event described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c)
of ERISA is reasonably expected to occur with respect to such Plan within the
following 30 days; (b) the application for a minimum funding waiver with respect
to a Plan, (c) the provision by the administrator of any Plan of a notice of
intent to terminate such Plan, pursuant to Section 4041(a)(2) of ERISA
(including any such notice with respect to a plan amendment referred to in
Section 4041(e) of ERISA); (d) the cessation of operations at a facility of any
Loan Party or any ERISA Affiliate in the circumstances described in Section
4062(e) of ERISA; (e) the withdrawal by any Loan Party or any ERISA Affiliate
from a Multiple Employer Plan during a plan year for which it was a substantial
employer, as defined in Section 4001(a)(2) of ERISA; (f) the conditions for
imposition of a lien under Section 302(f) of ERISA shall have been met with
respect to any Plan; (g) the adoption of an amendment to a Plan requiring the
provision
8
of security to such Plan, pursuant to Section 307 of ERISA; or (h) the
institution by the PBGC of proceedings to terminate a Plan pursuant to Section
4042 of ERISA, or the occurrence of any event or condition described in Section
4042 of ERISA that could constitute grounds for the termination of, or the
appointment of a trustee to administer, such Plan.
"EVENTS OF DEFAULT" has the meaning specified in Section 6.01.
"EXISTING ADVANCE" means an Existing Term Loan, an Existing Working
Capital Advance, the principal amount of any Existing Deferred Interest Note or
any fees payable to the Lenders under the Existing Credit Agreement.
"EXISTING CREDIT AGREEMENT" has the meaning specified in the
Preliminary Statements.
"EXISTING DEBT" means Debt of the Loan Parties and their
Subsidiaries pursuant to the Existing Credit Agreement and outstanding on the
Second Restatement Date.
"EXISTING DEFERRED INTEREST NOTES" means, collectively, those
deferred interest promissory notes, if any, executed and delivered by the
Borrower pursuant to Section 2.07(c) or Section 3.01(b) of the Existing Credit
Agreement and outstanding under the Existing Credit Agreement on the Second
Restatement Date.
"EXISTING TERM LENDER" means, prior to the Second Restatement Date,
any Lender who holds any portion of the Existing Term Loans.
"EXISTING TERM LOANS" means the Term Loans made pursuant to Section
2.01 of the Existing Credit Agreement and outstanding under the Existing Credit
Agreement on the Second Restatement Date.
"EXISTING WORKING CAPITAL ADVANCES" means the Working Capital
Advances made pursuant to Section 2.02 of the Existing Credit Agreement and
outstanding under the Existing Credit Agreement on the Second Restatement Date.
"EXISTING WORKING CAPITAL LENDER" means, prior to the Second
Restatement Date, any Lender who holds any portion of the Existing Working
Capital Advances.
"EXTRAORDINARY RECEIPT" means any cash received by or paid to or for
the account of any Person not in the ordinary course of business, including,
without limitation, tax refunds, pension plan reversions, proceeds of insurance
(other than proceeds of business interruption insurance to the extent such
proceeds constitute compensation for lost earnings), condemnation awards (and
payments in lieu thereof) and any cash purchase price adjustment or indemnity
payment received in connection with any purchase and sale or merger agreement;
provided, however, that so long as no Default shall have occurred and be
continuing an Extraordinary Receipt shall not include (i) cash receipts received
from proceeds of insurance to the extent that such proceeds in respect of loss
or damage to equipment, fixed assets or real property are applied (or in respect
of which expenditures were previously incurred) to replace or repair the
equipment, fixed assets or real property in respect of which such proceeds were
received in accordance with the terms of the Loan Documents, so long as such
application is made within six
9
months after the occurrence of such damage or loss, (ii) cash received (A) as an
advance under a Government Loan or (B) from any governmental agency, department
or instrumentality as a grant for economic development or other specific purpose
not related to the sale of telemarketing services to such agency, department or
instrumentality and (iii) any cash proceeds received by the Borrower or any
Subsidiary which is required to be paid directly over to any third party so long
as such payment is made to such third party within 10 Business Days of receipt
of such cash proceeds.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest
rate per annum equal for each day during such period (i) to the rate published
by the Dow Xxxxx Markets service on page five of its daily report as the "ASK"
rate as of 10:00 A.M. (New York City time) for such day (or, if such day is not
a Business Day, for the immediately preceding Business Day) or (ii) if the Dow
Xxxxx Markets service shall cease to publish or otherwise shall not publish such
rates for any day that is a Business Day, to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average of the quotations for such day for such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"FINAL MATURITY DATE" means May 31, 2005.
"FISCAL QUARTER" means a fiscal quarter of the Borrower and its
Consolidated Subsidiaries ending on March 31, June 30, September 30 or December
31 in any calendar year.
"FISCAL YEAR" means a fiscal year of the Borrower and its
Consolidated Subsidiaries ending on December 31 in any calendar year.
"FOREIGN SUBSIDIARY" means a Subsidiary that is organized under the
laws of a jurisdiction other than the United States or any State thereof or the
District of Columbia.
"GAAP" has the meaning specified in Section 1.03.
"GOVERNMENT LOAN" means a loan made by any governmental agency,
department or instrumentality for economic development or other specific purpose
not related to the sale of telemarketing services to such agency, department or
instrumentality.
"GUARANTOR" means each of TLSP Trademarks, Inc., TLSP Investments,
Inc. TeleSpectrum Worldwide (Canada) Inc., TeleSpectrum Government Services,
Inc., CRW Financial, Inc., and each other U.S. Subsidiary and Canadian
Subsidiary of the Borrower that may become a guarantor or collateral grantor
pursuant to Section 5.01(j) or 5.01(k).
"GUARANTIES" means the U.S. Guaranty and the Canadian Guaranty.
"HAZARDOUS MATERIALS" means (a) petroleum or petroleum products,
by-products or breakdown products, any flammable substances or explosives,
radioactive materials, asbestos-containing materials, urea formaldehyde foam
insulation, polychlorinated biphenyls,
10
pesticides and radon gas and (b) any other chemicals, materials or substances
designated, classified or regulated or remediated as hazardous or toxic or as a
pollutant or contaminant under any Environmental Law.
"HAZARDOUS MATERIALS ACTIVITY" means any past, current, proposed or
threatened activity, event or occurrence involving any Hazardous Materials,
including the use, manufacture, presence, storage, Release, threatened Release,
discharge, placement, generation, transportation, processing, construction,
treatment, abatement, removal, remediation, disposal, disposition or handling of
any Hazardous Materials, and any corrective action or response action with
respect to any of the foregoing.
"HEDGE AGREEMENTS" means interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap agreements,
currency future or option contracts and other hedging agreements.
"IDRC" International Data Response Corporation, a Delaware
corporation.
"INDEMNIFIED COSTS" has the meaning specified in Section 7.05(a).
"INDEMNIFIED PARTY" has the meaning specified in Section 8.04(b).
"INSUFFICIENCY" means, with respect to any Plan, the amount, if any,
of its unfunded benefit liabilities, as defined in Section 4001(a)(18) of ERISA.
"INTERCOMPANY NOTES" has the meaning specified in Section
5.02(b)(i).
"INTERCOMPANY SUBORDINATION AGREEMENT" has the meaning specified in
Section 5.02(b)(i).
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"INVENTORY" means all "Inventory" referred to in Section 1(b) of the
U.S. Security Agreement and Section 1.2(l)(a) of the Canadian Security
Agreements.
"INVESTMENT" in any Person means any loan or advance to such Person,
any purchase or other acquisition of any Equity Interests in, or Debt of, or the
assets comprising a division or business unit or a substantial part or all of
the business of, such Person, any capital contribution to such Person or any
other direct or indirect investment in such Person, including, without
limitation, any acquisition by way of a merger or consolidation and any
arrangement pursuant to which the investor incurs Debt of the types referred to
in clause (g) or (h) of the definition of "DEBT" in respect of such Person.
"LEASED REAL PROPERTY REPORT" has the meaning specified in Section
3.01(k).
"LENDERS" means the Lenders and each Person that shall become a
Lender hereunder pursuant to Section 8.07.
11
"LIEN" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance on title
to real property.
"LOAN DOCUMENTS" means (a) for purposes of this Agreement and the
Term Notes, and any amendment, supplement or modification hereof or thereof, (i)
this Agreement, (ii) the Term Notes, (iii) the Collateral Documents, (iv) the
Guaranties, and (v) the Acknowledgement and Consent, and (b) for purposes of the
Collateral Documents and for all other purposes other than for purposes of this
Agreement and the Term Notes, (i) this Agreement, (ii) the Term Notes, (iii) the
Collateral Documents, (iv) the Guaranties, (v) the Acknowledgement and Consent,
and (vi) any other document or instrument issued pursuant to or in connection
with any, of the foregoing, in each case as amended, supplemented or otherwise
modified from time to time in accordance with their terms.
"LOAN PARTIES" means the Borrower and each of the Guarantors.
"MARGIN STOCK" has the meaning specified in Regulation U.
"MATERIAL ADVERSE CHANGE" means any material adverse change in the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower and its Subsidiaries, taken as a whole.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower and its Subsidiaries, taken as a whole,
(b) the rights and remedies of the Agent or any Lender under any Loan Document
or (c) the ability of any Loan Party to perform its Obligations under any Loan
Document to which it is or is to be a party.
"MATERIAL CONTRACT" shall mean any contract, lease or other
agreement material to the business of the Borrower and its Subsidiaries or
involving the expenditure or receipt of $100,000 or more (or its property value
equivalents) in any Fiscal Year.
"MERGER AGREEMENT" has the meaning set forth in the Existing Credit
Agreement.
"MULTIEMPLOYER PLAN" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, (a) to which any Loan Party or any ERISA Affiliate
is making or accruing an obligation to make contributions, or (b) to which any
Loan Party or any ERISA Affiliate has contributed and to which any Loan Party or
ERISA Affiliate could have liability under Title IV of ERISA.
"MULTIPLE EMPLOYER PLAN" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any Loan
Party or any ERISA Affiliate and for employees of at least one Person other than
the Loan Parties and the ERISA Affiliates or (b) was so maintained and in
respect of which any Loan Party or any ERISA Affiliate could have liability
under Section 4064 or 4069 of ERISA in the event such plan has been or were to
be terminated.
12
"NET CASH PROCEEDS" means, with respect to any sale, lease, transfer
or other disposition of any asset or the incurrence or issuance of any Debt or
capital stock or other ownership or profit interest, any securities convertible
into or exchangeable for capital stock or other ownership or profit interest
(including, without limitation, any capital contribution) or any warrants,
rights, options or other securities to acquire capital stock or other ownership
or profit interest by any Person, or any Extraordinary Receipt received by or
paid to or for the account of any Person, the aggregate amount of cash received
from time to time (whether as initial consideration or through payment or
disposition of deferred consideration) by or on behalf of such Person in
connection with such transaction after deducting therefrom only (without
duplication) (a) reasonable and customary brokerage commissions, underwriting
fees and discounts, legal fees, finder's fees and other similar fees and
commissions, (b) the amount of taxes payable in connection with or as a result
of such transaction and (c) the amount of any Debt secured by a Lien on such
asset that, by the terms of such transaction, is required to be repaid upon such
disposition, in each case to the extent, but only to the extent, that the
amounts so deducted are properly attributable to such transaction or to the
asset that is the subject thereof and are, in the case of clauses (a) and (c),
at the time of receipt of such cash, actually paid to a Person that is not an
Affiliate of such Person or any Loan Party or any Affiliate of any Loan Party
and, in the case of clause (b), on the earlier of the dates on which the tax
return covering such taxes is filed or required to be filed, provided, however,
that in the case of taxes that are deductible under clause (b) but for the fact
that at the time of receipt of such cash, such taxes have not been actually paid
or are not then payable, such Person may deduct an amount (the "RESERVED
AMOUNT") equal to the amount reserved in accordance with GAAP as a reasonable
estimate for such taxes, other than taxes for which such Loan Party or such
Subsidiary is indemnified, provided further, however, that at the time such
taxes are paid, an amount equal to the amount, if any, by which the Reserved
Amount exceeds the amount actually so paid, the amount of such excess shall
constitute "Net Cash Proceeds."
"OBLIGATION" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including, without
limitation, any liability, of such Person on any claim, whether or not the right
of any creditor to payment in respect of such claim is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed,
legal, equitable, secured or unsecured, and whether or not such claim is
discharged, stayed or otherwise affected by any proceeding referred to in
Section 6.01(f). Without limiting the generality of the foregoing, the
Obligations of any Loan Party under the Loan Documents include (a) the
obligation to pay principal, interest, commissions, charges, expenses, fees,
attorneys' fees and disbursements, consulting and advisory fees and
disbursements, indemnities and other amounts payable by such Loan Party under
any Loan Document and (b) the obligation of any Loan Party to reimburse any
amount in respect of any of the foregoing that such Lender Party, in its sole
discretion, may elect to pay or advance on behalf of such Loan Party.
"OECD" means the Organization for Economic Cooperation and
Development.
"OPEN YEAR" has the meaning specified in Section 4.01(p).
"OTHER TAXES" has the meaning specified in Section 2.12(b).
13
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
"PERMITTED LIENS" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding shall have
been commenced: (a) Liens for taxes, assessments and governmental charges or
levies to the extent not required to be paid under Section 5.01(b) hereof, (b)
Liens imposed by law, such as materialmen's, mechanics', carriers', workmen's
and repairmen's Liens and other similar Liens arising in the ordinary course of
business securing obligations that either individually or when aggregated with
all other Permitted Liens outstanding on any date of determination do not
materially affect the use or value of the property to which they relate; (c)
pledges or deposits to secure obligations under workers' compensation laws or
similar legislation or to secure public or statutory obligations; and (d)
easements, rights of way and other encumbrances on title to real property that
do not render title to the property encumbered thereby unmarketable or
materially adversely affect the use of such property for its present purposes.
"PERSON" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"PLAN" means a Single Employer Plan or a Multiple Employer Plan.
"PLEDGED DEBT" means, collectively, the "Initial Pledged Debt"
referred to in the U.S. Security Agreement and any other Debt pledged from time
to time pursuant to any Collateral Document.
"PLEDGED INTERESTS" means, collectively, the "Initial Pledged Equity
Interests" referred to in the U.S. Security Agreement and any other Equity
Interest pledged from time to time pursuant to any Collateral Document.
"PREFERRED INTERESTS" means, with respect to any Person, Equity
Interests issued by such Person that are entitled to a preference or priority
over any other Equity Interests issued by such Person upon any distribution of
such Person's property and assets, whether by dividend or upon liquidation.
"PREFERRED STOCK" means the Series A Preferred Stock and the Series
B Convertible Preferred Stock.
"PREPAYMENT AMOUNT" has the meaning specified in Section 5.03(a).
"PREPAYMENT DATE" has the meaning specified in Section 5.03(a).
"PREPAYMENT NOTICE" has the meaning specified in Section 5.03(a).
"PRO RATA SHARE" means, with respect to all payments, computations
and other matters (including, without limitation, determining the calculation of
Required Lenders), the percentage obtained by dividing (i) with respect to the
Existing Advances, (x) the sum of any Lender's Existing Working Capital
Advances, Existing Term Loan Advances and Deferred
14
Interest Notes and any fees payable to such Lender under the Existing Credit
Agreement, in each case as of April 15, 2002 by (y) the sum of all Lenders'
Existing Working Capital Advances, Existing Term Loan Advances and Deferred
Interest Notes and all fees owed to the Lenders under the Existing Credit
Agreement, in each case as of April 15, 2002, and (ii) with respect to the Term
Loan after the Second Restatement Date, (x) the sum of any Lender's Term Loan
Exposure by (y) the sum of all Lenders' Term Loan Exposure; in any case as the
applicable percentage may be adjusted by assignments permitted pursuant to
Section 8.07. The initial Pro Rata Share of each Lender as of the Second
Restatement Date is set forth opposite the name of the Lender in Schedule IA
annexed hereto.
"RECEIVABLES" means all "Receivables" referred to in Section 1(c) of
the U.S. Security Agreements and all receivables referred to in Section
1.2(l)(c) of the Canadian Security Agreements.
"REDEEMABLE" means, with respect to any Equity Interest, any Debt,
or any other right or Obligation, any such Equity Interest, Debt, right or
Obligation, that (a) the issuer has undertaken to redeem at a fixed or
determinable date or dates, whether by operation of a sinking fund or otherwise,
or upon the occurrence of a condition not solely within the control of the
issuer or (b) is redeemable at the option of the holder.
"REGISTER" has the meaning specified in Section 8.07(d).
"REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"RELATED DOCUMENTS" means the Intercompany Notes, the Intercompany
Subordination Agreements, the TLSP Subordination Agreements, and any promissory
note evidencing all or a portion of the TLSP Subordinated Debt.
"RELEASE" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including the abandonment or disposal of any barrels, containers or
other closed receptacles containing any Hazardous Materials), including the
movement of any Hazardous Materials through the air, soil, surface water or
groundwater.
"REQUIRED LENDERS" means at any time Lenders owed or holding at
least 66-2/3% of the Obligations.
"RESPONSIBLE OFFICER" means any executive officer of any Loan Party
or any of its Subsidiaries.
"RESTRUCTURING AGREEMENT" means the Preferred Stock Issuance and
Restructuring Agreement dated as of the Second Restatement Date by and among the
Borrower, the Lenders and the Agent, substantially in the form of Exhibit J
annexed hereto.
"ROLLING PERIOD" has the meaning set forth in the Existing Credit
Agreement.
15
"SECOND RESTATEMENT DATE" means the date on or before April 29, 2002
on which all conditions to the effectiveness of this Agreement set forth in
Section 3.01 are satisfied or waived.
"SECURED OBLIGATIONS" has the meaning specified in each of the
Security Agreements.
"SECURED PARTIES" means the Agent, the Lender Parties, and the other
Persons the Obligations owing to which are or are purported to be secured by the
Collateral under the terms of the Collateral Documents.
"SECURITY AGREEMENTS" means the U.S. Security Agreement and the
Canadian Security Agreements.
"SERIES A PREFERRED CERTIFICATE OF DESIGNATIONS" means the
Certificate of Designations relating to the Series A Preferred Stock, in the
form annexed as Exhibit A-1 to the Restructuring Agreement, as the same may be
amended from time to time.
"SERIES A PREFERRED STOCK" means the Series A Preferred Stock of
Borrower issued pursuant to the Series A Preferred Certificate of Designations.
"SERIES B CONVERTIBLE PREFERRED CERTIFICATE OF DESIGNATIONS" means
the Certificate of Designations relating to the Series B Convertible Preferred
Stock, in the form annexed as Exhibit A-2 to the Restructuring Agreement, as the
same may be amended from time to time.
"SERIES B CONVERTIBLE PREFERRED STOCK" means the Series B
Convertible Preferred Stock of Borrower issued pursuant to the Series B
Convertible Preferred Certificate of Designations.
"SINGLE EMPLOYER PLAN" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any Loan
Party or any ERISA Affiliate and for employees of no Person other than the Loan
Parties and the ERISA Affiliates or (b) was so maintained and in respect of
which any Loan Party or any ERISA Affiliate could have liability under Section
4069 of ERISA in the event such plan has been or were to be terminated.
"STRUCTURED VENDOR SETTLEMENTS" means the settlements of certain
obligations of the Loan Parties as set forth on Schedule 5.02(b)(ii)(F).
"SUBSIDIARY" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which) more
than 50% of (a) the issued and outstanding capital stock having ordinary voting
power to elect a majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any other class or classes
of such corporation shall or might have voting power upon the occurrence of any
contingency), (b) the interest in the capital or profits of such limited
liability company, partnership or joint venture or (c) the beneficial interest
in such trust or estate is at the time
16
directly or indirectly owned or controlled by such Person, by such Person and
one or more of its other Subsidiaries or by one or more of such Person's other
Subsidiaries.
"TAXES" has the meaning specified in Section 2.12(a).
"TERMINATION DATE" means the date of acceleration of the Obligations
pursuant to this Agreement.
"TERM LOAN" means the Existing Advances the Lenders have agreed to
maintain in accordance with Section 2.01 hereof.
"TERM LOAN EXPOSURE" means, with respect to any Lender as of any
date of determination after the Second Restatement Date, the outstanding
principal amount of Term Loans of that Lender.
"TERM LOAN FACILITY" means, at any time, the aggregate amount of
Term Lenders' Term Loans at such time.
"TERM NOTES" means promissory notes of the Borrower payable to the
order of any Lender, substantially in the form of Exhibit A hereto, evidencing
the indebtedness of the Borrower to such Lender resulting from the Term Loan
held by such Lender.
"TLSP INVESTMENTS" means TLSP Investments, Inc., a Delaware
corporation and wholly-owned Subsidiary of the Borrower.
"TLSP INVESTMENTS SUBORDINATED DEBT" means the indebtedness
evidenced by (a) the promissory note dated June 30, 1999 made by the Borrower,
as payor, to TLSP Investments, as payee, in a face amount of up to $500,000,000
and (b) the amended and restated promissory note dated February 1, 2001 made by
the TeleSpectrum Worldwide (Canada) Inc., as payor, to TLSP Investments, as
payee, in a face amount of up to $10,000,000, as such promissory notes may be
amended, supplemented or otherwise modified from time to time in accordance with
their terms, the TLSP Investments Subordination Agreement and the terms of this
Agreement.
"TLSP INVESTMENTS SUBORDINATION AGREEMENT" means that certain
subordination agreement dated June 30, 1999 executed by TLSP Investments (as
amended, supplemented or otherwise modified in accordance with its terms and the
terms of this Agreement).
"TLSP SUBORDINATED DEBT" means the TLSP Investments Subordinated
Debt and the TLSP Trademarks Subordinated Debt.
"TLSP SUBORDINATION AGREEMENTS" means, collectively, the TLSP
Investments Subordination Agreement and the TLSP Trademarks Subordination
Agreement.
"TLSP TRADEMARKS" means TLSP Trademarks, Inc., a Delaware
corporation and wholly-owned Subsidiary of the Borrower.
17
"TLSP TRADEMARKS SUBORDINATED DEBT" means the indebtedness evidenced
by (a) the amended and restated promissory note dated January 30, 2002 made by
the Borrower, as payor, to TLSP Trademarks, as payee, in a face amount of up to
$65,000,000 and (b) the amended and restated promissory note dated January 30,
2002 made by TeleSpectrum Worldwide (Canada) as payor, to TLSP Trademarks, as
payee, in a face amount of up to $5,000,000, as such promissory notes may be
amended, supplemented or otherwise modified from time to time in accordance with
their terms, the TLSP Trademarks Subordination Agreement and the terms of this
Agreement.
"TLSP TRADEMARKS SUBORDINATION AGREEMENT" means that certain
subordination agreement dated June 30, 1999 executed by TLSP Trademarks (as
amended, supplemented or otherwise modified in accordance with its terms and the
terms of this Agreement).
"U.S. GUARANTY" means that certain Guaranty dated as of June 30,
1999, executed and delivered by each U.S. Subsidiary of the Borrower (other than
TLSP Investments) in favor of the Secured Parties, in the form of Exhibit F-1,
as amended, supplemented or otherwise modified from time to time in accordance
with its terms.
"U.S. SECURITY AGREEMENT" means that certain Security Agreement
dated as of June 30, 1999, executed and delivered by the Borrower and its
Subsidiaries (other than TLSP Investments) to the Collateral Agent, in the form
of Exhibit D, as amended, supplemented or otherwise modified from time to time
in accordance with its terms.
"U.S. SUBSIDIARY" means any Subsidiary of the Borrower organized
under the laws of the United States or one of the States of the United States.
"VARIANCE REPORT" means a report to be delivered by the Borrower to
the Agent, in form and substance satisfactory to the Agent and certified as
being true and correct to his or her knowledge after diligent inquiry by the
chief financial officer of the Borrower, on a weekly basis commencing on the
last Business Day of each week after the Second Restatement Date reflecting the
actual cash receipts and disbursements on a line item basis for the preceding
week (and on a cumulative basis since the beginning of the present Fiscal
Quarter), the percentage variance of such amounts from those set forth in the
forecasts delivered pursuant to Section 5.01(r) for such week, and containing a
narrative analysis of the Borrower's performance for such period.
"VOTING INTERESTS" means shares of capital stock issued by a
corporation, or equivalent Equity Interests in any other Person, the holders of
which are ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such Person,
even if the right so to vote has been suspended by the happening of such a
contingency.
"WELFARE PLAN" means a welfare plan, as defined in Section 3(l) of
ERISA, that is maintained for employees of any Loan Party or in respect of which
any Loan Party could have a liability.
"WITHDRAWAL LIABILITY" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.
18
"WORKING CAPITAL COMMITMENT" has the meaning set forth in the
Existing Credit Agreement.
"WORKING CAPITAL NOTE" has the meaning set forth in the Existing
Credit Agreement.
SECTION 1.02. Computation of Time Periods; Other Definitional
Provisions. In this Agreement and the other Loan Documents, in the computation
of periods of time from a specified date to a later specified date, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding." References in the Loan Documents to any agreement or contract
"as amended" shall mean and be a reference to such agreement or contract as
amended, amended and restated, supplemented or otherwise modified from time to
time in accordance with its terms.
SECTION 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistent with those applied in the preparation
of the financial statements referred to in Section 4.01(f) ("GAAP").
ARTICLE II
AMOUNTS AND TERMS OF THE LOANS
SECTION 2.01. Term Loans and Term Notes.
(a) Conversion of Existing Advances into Term Loans on the Second
Restatement Date. Notwithstanding anything to the contrary in this Agreement,
subject to the terms and conditions of this Agreement and in reliance upon the
representations and warranties of the Borrower herein set forth, as of the
Second Restatement Date, $25,000,000 of the Existing Advances shall be converted
into $25,000,000 in aggregate principal amount of Term Loans for all purposes of
this Agreement, with the balance of such Existing Advances to be treated in
accordance with the Restructuring Agreement. Each Lender shall initially retain
its Pro Rata Share of the Existing Advances as Term Loans in accordance with
Schedule IA hereto. In furtherance of the foregoing:
(i) Any amounts owed (whether or not presently due and
payable) by Borrower to a Term Lender under or in respect of an Existing
Term Loan converted into a Term Loan as provided in this subsection
2.01(a) shall, as of the Second Restatement Date, be deemed to be owed
under or in respect of the Term Loan into which such Existing Term Loan
was converted and such amounts owed shall thereafter be evidenced by the
Term Note delivered to such Lender by Borrower pursuant to subsection
2.01(c). In connection with the conversion of Existing Term Loans into
Term Loans pursuant to this subsection 2.01(a), Borrower shall not be
required to deliver any notice of prepayment or Notice of Borrowing or to
satisfy any other condition relating to required amounts of prepayments or
borrowings hereunder.
(ii) Any amounts owed (whether or not presently due and
payable) by Borrower to a Working Capital Lender under or in respect of an
Existing Working
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Capital Advance converted into a Term Loan as provided in this subsection
2.01(a) shall, as of the Second Restatement Date, be deemed to be owed
under or in respect of the Term Loan into which such Existing Working
Capital Advance was converted and such amounts owed shall thereafter be
evidenced by the Term Note delivered to such Lender by Borrower pursuant
to subsection 2.01(c). In connection with the conversion of Existing
Working Capital Advances into Term Loans pursuant to this subsection
2.01(a), Borrower shall not be required to deliver any notice of
prepayment or Notice of Borrowing or to satisfy any other condition
relating to required amounts of prepayments or borrowings hereunder.
(iii) Any amounts owed (whether or not presently due and
payable) by Borrower to a Lender under or in respect of an Existing
Deferred Interest Note converted into a Term Loan as provided in this
subsection 2.01(a) shall, as of the Second Restatement Date, be deemed to
be owed under or in respect of the Term Loan into which such Existing
Deferred Interest Note was converted and such amounts owed shall
thereafter be evidenced by the Term Note delivered to such Lender by
Borrower pursuant to subsection 2.01(c). In connection with the conversion
of Existing Deferred Interest Notes into Term Loans pursuant to this
subsection 2.01(a), Borrower shall not be required to deliver any notice
of prepayment or Notice of Borrowing or to satisfy any other condition
relating to required amounts of prepayments or borrowings hereunder.
(iv) Any amounts owed (whether or not presently due and
payable) by Borrower to a Lender in respect of fees payable under the
Existing Credit Agreement converted into a Term Loan as provided in this
subsection 2.01(a) shall, as of the Second Restatement Date, be deemed to
be owed under or in respect of the Term Loan into which such fees were
converted and such amounts owed shall thereafter be evidenced by the Term
Note delivered to such Lender by Borrower pursuant to subsection 2.01(c).
In connection with the conversion of such fees into Term Loans pursuant to
this subsection 2.01(a), Borrower shall not be required to deliver any
notice of prepayment or Notice of Borrowing or to satisfy any other
condition relating to required amounts of prepayments or borrowings
hereunder.
(b) Term Loans. Subject to the terms and conditions of this
Agreement and in reliance upon the representations of Borrower herein set forth,
each Lender hereby severally agrees to maintain its Pro Rata Share of Existing
Term Loans, Existing Working Capital Advance and Existing Deferred Interest
Notes, in each case as converted into Term Loans pursuant to subsection 2.01(a),
as Term Loans hereunder for the purposes identified in subsection 2.14.
The amount of the Term Loans of each Lender as of the Second
Restatement Date is set forth in Schedule I hereto and the aggregate amount of
all Term Loans is $25,000,000 as of such date. The amount of the Term Loans
shall be reduced by the amount of all prepayments thereof made pursuant to
subsection 2.06 through the date of determination. No additional Term Loans may
be made under this Agreement, and any amount repaid hereunder may not be
reborrowed.
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(c) Term Notes. Borrower shall execute and deliver to Agent for the
account of each Lender on the Second Restatement Date a Term Note to evidence
that Lender's Term Loan in the principal amount of that Lender's Term Loan and
with other appropriate insertions. Upon receipt of all such Term Notes from
Borrower on the Second Restatement Date, all "Term Notes" under the Existing
Credit Agreement, "Working Capital Notes" under the Existing Credit Agreement,
and "Deferred Interest Notes" under the Existing Credit Agreement shall be
deemed "cancelled" and superseded by the Term Notes executed and delivered by
the Borrower on the Second Restatement Date pursuant to this Agreement and the
Lenders shall return such cancelled notes to Borrower promptly after Closing and
shall indemnify Borrower for any loss or expense incurred by Borrower as a
result of the failure to return such cancelled Notes.
(d) Termination of Existing Working Capital Commitments. All Working
Capital Commitments of each Working Capital Lender outstanding or in effect for
any purpose under the Existing Credit Agreement at the Second Restatement Date
shall terminate as of the Second Restatement Date.
SECTION 2.02. [Intentionally Omitted]
SECTION 2.03. [Intentionally Omitted]
SECTION 2.04. Repayment of Term Loans.
The Borrower shall repay to the Agent for the ratable account of the
Lenders (in accordance with their applicable Pro Rata Share of the Term Loan
Facility), (i) the aggregate outstanding principal amount of the Term Loans on
the earlier of (y) the Final Maturity Date, or (z) the Termination Date, and
(ii) an aggregate principal amount of the Term Loans in accordance with Section
2.06.
SECTION 2.05. [Intentionally Omitted]
SECTION 2.06. Prepayments. (a) Optional. The Borrower may prepay,
upon at least one Business Day's written notice to the Agent (received not later
than 11:00 A.M. (New York City time) stating the proposed date and aggregate
principal amount of the prepayment, and if such notice is given the Borrower
shall, prepay the outstanding aggregate principal amount of the Term Loans in
whole or ratably in part, together with accrued interest to the date of such
prepayment on the aggregate principal amount prepaid; provided, however, that
each partial prepayment of Term Loans shall be in an aggregate principal amount
of $500,000 or an integral multiple of $250,000 in excess thereof.
(b) Mandatory. The Borrower shall, on the date of receipt of the Net
Cash Proceeds by the Borrower or any of its Subsidiaries from (A) the sale,
lease, transfer or other disposition of any assets of the Borrower or any of its
Subsidiaries (other than any sale, lease, transfer or other disposition of
assets pursuant to Section 5.02(f)(i)), (B) the incurrence or issuance by the
Borrower or any of its Subsidiaries of any Debt (other than Debt incurred or
issued pursuant to Section 5.02(b)), (C) the sale or issuance by the Borrower
other than under any restricted stock or option plan) or any of its Subsidiaries
of any capital stock or other ownership or profit interest (including, without
limitation, any capital contribution), any securities convertible into or
exchangeable for capital stock or other ownership or profit interest
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or any warrants, rights or options to acquire capital stock or other ownership
or profit interest, (D) any Extraordinary Receipt received by or paid to or for
the account of the Borrower or any of its Subsidiaries and not otherwise
included in clause (A), (B) or (C) above, prepay an amount equal to the amount
of such Net Cash Proceeds. Each such prepayment shall be applied ratably to the
Term Lenders (in accordance with their applicable Pro Rata Share of the Term
Loan Facility).
SECTION 2.07. Interest. (a) Scheduled Interest. The Borrower shall
pay interest on the unpaid principal amount of the Term Loans owing to each
Lender, in each case from the Second Restatement Date until such principal
amount shall be paid in full, at a rate per annum equal at all times to the sum
of (A) the Base Rate in effect from time to time plus (B) the Applicable Margin
payable in arrears monthly on the last Business Day of each month after the
Second Restatement Date, on the date of any prepayment thereof to the extent
required under Section 2.06, on the Termination Date, and on the Final Maturity
Date.
(b) Default Interest. Upon the occurrence and during the continuance
of any Event of Default, the Agent may, and upon the request of the Required
Lenders shall, require that the Borrower pay interest on (i) the unpaid
principal amount of the Term Loans owing to each Lender, payable in arrears on
the dates referred to in clause (a) above and on demand, at a rate per annum
equal at all times to 2% per annum above the rate per annum required to be paid
on such Term Loans pursuant to clause (a) above, and (ii) to the fullest extent
permitted by law, the amount of any interest, fees or other amounts payable
under the Loan Documents that is not paid when due, from the date such amount
shall be due until such amount shall be paid in full, payable in arrears on the
date such amount shall be paid in full and on demand, at a rate per annum equal
at all times to 2% per annum above the rate per annum required to be paid, in
the case of interest on the Term Loans on which such interest has accrued
pursuant to clause (a) above; provided, however, that following acceleration of
the Obligations of the Loan Parties under the Loan Documents pursuant to Section
6.01, interest shall accrue and be payable at the rate required by this Section
2.07(b), whether or not requested by the Agent or the Required Lenders. In
addition, following a final judgment with respect to any Obligation of the Loan
Parties under the Loan Documents, interest shall accrue at the higher of the
statutory judgment rate or the rate specified in the preceding sentence, payable
on demand.
SECTION 2.08. Agent's Fees. The Borrower shall pay to the Agent for
its own account an annual agency fee in the amount of $100,000, payable on the
Second Restatement Date and on each one-year anniversary thereof, and shall be
earned in full on each such date.
SECTION 2.09. [Intentionally Omitted]
SECTION 2.10. Increased Costs, Etc. (a) If, due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any central
bank, or other governmental authority (whether or not having the force of law),
there shall be any increase in the cost to any Lender of agreeing to make or of
making, funding or maintaining any Term Loan (excluding, for purposes of this
Section 2.10, any such increased costs resulting from (x) Taxes or Other Taxes
(as to which Section 2.12 shall govern) and (y) changes in the basis of taxation
of overall net income or
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overall gross income by the United States or by the foreign jurisdiction or
state under the laws of which such Lender is organized or has its Domestic
Lending Office or any political subdivision thereof), then the Borrower shall
from time to time, upon demand by such Lender (with a copy of such demand to the
Agent), pay to the Agent for the account of such Lender additional amounts
sufficient to compensate such Lender for such increased cost, provided, however,
that a Lender claiming additional amounts under this Section 2.10(a) agrees to
use reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions) to designate a different Domestic Lending Office if the
making of such a designation would avoid the need for, or reduce the amount of,
such increased cost that may thereafter accrue and would not, in the reasonable
judgment of such Lender, be otherwise disadvantageous to such Lender. A
certificate as to the amount of such increased cost, submitted to the Borrower
by such Lender, shall be conclusive and binding for all purposes, absent
manifest error.
(b) If any Lender determines that either (i) the introduction of any
change on the interpretation of any law or regulation or (ii) compliance with
any law, or regulation or any guideline or request from any central bank or
other governmental authority (whether or not having the force of law) affects or
would affect the amount of capital required or expected to be maintained by such
Lender or any corporation controlling such Lender and that the amount of such
capital is increased by or based upon the existence of such Lender's commitment
to lend, then, upon demand by such Lender (with a copy of such demand to the
Agent), the Borrower shall pay to the Agent for the account of such Lender, from
time to time as specified by such Lender, additional amounts sufficient to
compensate such Lender, in the light of such circumstances, to the extent that
such Lender reasonably determines such increase in capital to be allocable to
the existence of such Lender's commitment to lend hereunder. A certificate as to
such amounts submitted to the Borrower by such Lender shall be conclusive and
binding for all purposes, absent manifest error.
SECTION 2.11. Payments and Computations. (a) The Borrower shall make
each payment hereunder, irrespective of any right of counterclaim or set-off,
not later than 11:00 A.M. (New York City time) on the day when due in Dollars to
the Agent at the Agent's Account in same day funds, with payments being received
by the Agent after such time being deemed to have been received on the next
succeeding Business Day. The Agent will promptly thereafter cause like funds to
be distributed (i) if such payment by the Borrower is in respect of principal,
interest or any other Obligation then payable hereunder to more than one Lender,
to such Lender Parties for the account of their respective Domestic Lending
Offices ratably in accordance with the amounts of such respective Obligations
then payable to such Lender Parties and (ii) if such payment by the Borrower is
in respect of any Obligation then payable hereunder to the Agent or any one
Lender, to the Agent or such Lender for the account of its Domestic Lending
Office, in each case to be applied in accordance with the terms of this
Agreement. Upon its acceptance of an Assignment and Acceptance and recording of
the information contained therein in the Register pursuant to Section 8.07(d),
from and after the effective date of such Assignment and Acceptance, the Agent
shall make all payments hereunder in respect of the interest assigned thereby to
the Lender assignee thereunder, and the parties to such Assignment and
Acceptance shall make all appropriate adjustments in such payments for periods
prior to such effective date directly between themselves.
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(b) If the Agent receives funds for application to the Obligations
of the Loan Parties under the Loan Documents under circumstances for which the
Loan Documents do not specify the purpose for which, or the manner in which,
such funds are to be applied, the Agent may, but shall not be obligated to,
elect to distribute such funds to each Lender ratably in accordance with such
Lender's Pro Rata Share of the principal amount of all outstanding Term Loans,
or in repayment or prepayment of such of the outstanding Term Loans or other
Obligations owed to such Lender, as the Agent shall direct.
(c) The Borrower hereby authorizes each Lender, if and to the extent
payment owed to such Lender is not made when due hereunder, to charge from time
to time against any or all of the Borrower's accounts with such Lender any
amount so due.
(d) All computations of interest and fees shall be made by the Agent
on the basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest or fees are payable. Each determination by the Agent of an
interest rate or fee hereunder shall be conclusive and binding for all purposes,
absent manifest error.
(e) Whenever any payment hereunder shall be stated to be due on a
day other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of payment of interest; provided, however, that, if such extension
would cause any payment to be made in the next following calendar month, such
payment shall be made on the next preceding Business Day and such adjustment of
time shall in such case be reflected in the computation of payment of interest.
(f) Unless the Agent shall have received notice from the Borrower
prior to the date on which any payment is due to any Lender hereunder that the
Borrower will not make such payment in full, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date and the Agent
may, in reliance upon such assumption, cause to be distributed to each such
Lender on such due date an amount equal to the amount then due such Lender. If
and to the extent the Borrower shall not have so made such payment in full to
the Agent, each such Lender shall repay to the Agent forthwith on demand such
amount distributed to such Lender together with interest thereon, for each day
from the date such amount is distributed to such Lender until the date such
Lender repays such amount to the Agent, at the Federal Funds Rate.
SECTION 2.12. Taxes. (a) Any and all payments by the Borrower
hereunder or under the Term Notes shall be made, in accordance with Section
2.11, free and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings, and all liabilities
with respect thereto, excluding, in the case of each Lender and the Agent, taxes
that are imposed on its overall net income by the United States and taxes that
are imposed on its overall net income (and franchise taxes imposed in lieu
thereof) by the state or foreign jurisdiction under the laws of which such
Lender or the Agent (as the case may be) is organized or any political
subdivision thereof and, in the case of each Lender, taxes that are imposed on
its overall net income (and franchise taxes in lieu thereof) by the state or
foreign jurisdiction of such Lender's Domestic Lending Office or any political
subdivision thereof (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and
24
liabilities in respect of payments hereunder or under the Term Notes being
hereinafter referred to as "TAXES"). If the Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder to any Lender
or the Agent, (i) the sum payable by the Borrower shall be increased as may be
necessary so that after the Borrower and the Agent have made all required
deductions (including deductions applicable to additional sums payable under
this Section 2.12), such Lender or the Agent, as the case may be, receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make all such deductions and (iii) the Borrower shall
pay the full amount deducted to the relevant taxation authority or other
governmental authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any present or future stamp,
documentary, excise, property or similar taxes, charges or levies that arise
from any payment made hereunder or under the Term Notes or from the execution,
delivery or registration of performance under, or otherwise with respect to,
this Agreement or the Term Notes (hereinafter referred to as "OTHER TAXES").
(c) The Borrower shall indemnify each Lender and the Agent for and
hold it harmless against the full amount of Taxes and Other Taxes, and for the
full amount of taxes of any kind imposed by any jurisdiction on amounts payable
under this Section 2.12, imposed on or paid by such Lender or the Agent (as the
case may be) and any liability (including penalties, additions to tax, interest
and expenses) arising therefrom or with respect thereto. This indemnification
shall be made within 30 days from the date such Lender or the Agent (as the case
may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the
Borrower shall furnish to the Agent, at its address referred to in Section 8.02,
the original or a certified copy of a receipt evidencing such payment. In the
case of any payment hereunder or under the Term Notes by or on behalf of the
Borrower through an account or branch outside the United States or on behalf of
the Borrower by a payor that is not a United States person, if the Borrower
determines that no Taxes are payable in respect thereof, the Borrower shall
furnish, or shall cause such payor to furnish, to the Agent, at such address, an
opinion of counsel acceptable to the Agent stating that such payment is exempt
from Taxes. For purposes of subsections (d) and (e) of this Section 2.12, the
terms "United States" and "United States person" shall have the meanings
specified in Section 7701 of the Internal Revenue Code.
(e) Each Lender organized under the laws of a jurisdiction outside
the United States shall, on or prior to the date of its execution and delivery
of this Agreement in the case of each Lender and on the date of the Assignment
and Acceptance pursuant to which it becomes a Lender in the case of each other
Lender, and from time to time thereafter if requested in writing by the Borrower
or the Agent (but only so long thereafter as such Lender remains lawfully able
to do so), provide the Agent and the Borrower, with two original Internal
Revenue Service Forms 1001 or 4224 or (in the case of a Lender that has
certified in writing to the Agent that it is not a "bank" as defined in Section
881(c)(3)(A) of the Internal Revenue Code) Form W-8 (and, if such Lender
delivers a Form W-8, a certificate representing that such Lender is not a "bank"
for purposes of Section 881(c) of the Internal Revenue Code, is not a 10-percent
shareholder (within the meaning of
25
Section 871(h)(3)(B) of the Internal Revenue Code) of the Borrower and is not a
controlled foreign corporation related to the Borrower (within the meaning of
Section 864(d)(4) of the Internal Revenue Code)), as appropriate, or any
successor or other form prescribed by the Internal Revenue Service, certifying
that such Lender is exempt from or entitled to a reduced rate of United States
withholding tax on payments pursuant to this Agreement or the Term Notes or, in
the case of a Lender providing a Form W-8, certifying that such Lender is a
foreign corporation, partnership, estate or trust. If the forms provided by a
Lender at the time such Lender first becomes a party to this Agreement indicate
a United States interest withholding tax rate in excess of zero, withholding tax
at such rate shall be considered excluded from Taxes unless and until such
Lender provides the appropriate forms certifying that a lesser rate applies,
whereupon withholding tax at such lesser rate only shall be considered excluded
from Taxes for periods governed by such forms; provided, however, that if at the
effective date of the Assignment and Acceptance pursuant to which a Lender
becomes a party to this Agreement, the Lender assignor was entitled to payments
under subsection (a) of this Section 2.12 in respect of United States
withholding tax with respect to interest paid at such date, then, to such
extent, the term Taxes shall include (in addition to withholding taxes that may
be imposed in the future or other amounts otherwise includable in Taxes) United
States withholding tax, if any applicable with respect to the Lender, assigned
on such date. If any form or document referred to in this subsection (e)
requires the disclosure of information, other than information necessary to
compute the tax payable and information required on the date hereof by Internal
Revenue Service Form 1001, 4224 or W-8 (or the related certificate described
above), that the Lender reasonably considers to be confidential, the Lender
shall give notice thereof to the Borrower and shall not be obligated to include
in such form or document such confidential information.
(f) For any period with respect to which a Lender has failed to
provide the Borrower with the appropriate form described in subsection (e) above
(other than if such failure is due to a change in law occurring after the date
on which a form originally was required to be provided or if such form otherwise
is not required under subsection (e) above), such Lender shall not be entitled
to indemnification under subsection (a) or (c) of this Section 2.12 with respect
to Taxes imposed by the United States by reason of such failure; provided,
however, that should a Lender become subject to Taxes because of its failure to
deliver a form required hereunder, the Borrower shall take such steps as such
Lender, shall reasonably request to assist such Lender to recover such Taxes.
SECTION 2.13. Sharing of Payments, Etc. If any Lender shall obtain
at any time any payment (whether voluntary, involuntary, through the exercise of
any right of set-off, or otherwise, other than as a result of an assignment
pursuant to Section 8.07) (a) on account of Obligations due and payable to such
Lender hereunder and under the Term Notes at such time in excess of its ratable
share (according to the proportion of (i) the amount of such Obligations due and
payable to such Lender at such time to (ii) the aggregate amount of the
Obligations due and payable to all Lenders hereunder and under the Term Notes at
such time) of payments on account of the Obligations due and payable to all
Lenders hereunder and under the Term Notes at such time obtained by all the
Lenders at such time or (b) on account of Obligations owing (but not due and
payable) to such Lender
26
hereunder and under the Term Notes at such time in excess of its ratable share
(according to the proportion of (i) the amount of such Obligations owing (but
not due and payable) to such Lender at such time to (ii) the aggregate amount of
the Obligations owing (but not due and payable) to all Lenders hereunder and
under the Term Notes at such time) of payments on account of the Obligations
owing (but not due and payable) to all Lenders hereunder and under the Term
Notes at such time obtained by all of the Lenders at such time, such Lender
shall forthwith purchase from the other Lenders such interests or participating
interests in the Obligations due and payable or owing to them, as the case may
be, as shall be necessary to cause such purchasing Lender to share the excess
payment ratably with each of them; provided, however, that if all or any portion
of such excess payment is thereafter recovered from such purchasing Lender, such
purchase from each other Lender shall be rescinded and such other Lender shall
repay to the purchasing Lender the purchase price to the extent of such Lender's
ratable share (according to the proportion of (i) the purchase price paid to
such Lender, to (ii) the aggregate purchase price paid to all Lenders) of such
recovery together with an amount equal to such Lender's ratable share (according
to the proportion of (i) the amount of such 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. The Borrower agrees that any Lender so purchasing an
interest or participating interest from another Lender pursuant to this Section
2.13 may, to the fullest extent permitted by law, exercise all its rights of
payment (including the right of set-off) with respect to such interest or
participating interest, as the case may be, as fully as if such Lender were the
direct creditor of the Borrower in the amount of such interest or participating
interest, as the case may be.
SECTION 2.14. Use of Proceeds. The proceeds of the Existing Advances
were applied by the Borrower for the purposes set forth in Section 2.14 of the
Existing Credit Agreement.
SECTION 2.15. Evidence of Debt. (a) Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Lender resulting from each Term Loan owing
to such Lender from time to time, including the amounts of principal and
interest payable and paid to such Lender from time to time hereunder. The
Borrower agrees that upon notice by any Lender to the Borrower (with a copy of
such notice to the Agent) to the effect that a Term Note is required or
appropriate in order for such Lender to evidence (whether for purposes of
pledge, enforcement or otherwise) the Term Loans owing to or to be made by such
Lender, the Borrower shall promptly execute and deliver to such Lender a Term
Note payable to the order of such Lender, in a principal amount equal to the
Term Loan Exposure of such Lender. All references to "Notes" in the Loan
Documents shall mean Term Notes, if any, to the extent issued hereunder.
(b) The Register maintained by the Agent pursuant to Section 8.07(d)
shall include a control account, and a subsidiary account for each Lender, in
which accounts (taken together) shall be recorded (i) the date and amount of
each Term Loan made hereunder, (ii) the terms of each Assignment and Acceptance
delivered to and accepted by it, (iii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder, and (iv) the amount of any sum received by the Agent from the
Borrower hereunder and each Lender's share thereof.
(c) Entries made in good faith by the Agent in the Register pursuant
to subsection (b) above, and by each Lender in its account or accounts pursuant
to subsection (a) above, shall be prima facie evidence of the amount of
principal and interest due and payable or to become due and payable from the
Borrower to, in the case of the Register each Lender and, in
27
the case of such account or accounts such Lender, under this Agreement, absent
manifest error; provided, however, that the failure of the Agent or such Lender
to make an entry, or any finding that an entry is incorrect, in the Register or
such account or accounts shall not limit or otherwise affect the obligations of
the Borrower under this Agreement.
(d) References herein to Notes shall mean and be references to the
Term Notes, unless otherwise specifically indicated, to the extent issued
hereunder.
SECTION 2.16. Maximum Lawful Rate. Anything in this Agreement, the
Term Notes or the other Loan Documents to the contrary notwithstanding, in no
event shall the rate or amount of interest payable by Borrower in respect of the
Obligations exceed the maximum rate or amount of interest that may be charged or
collected under applicable law (including, without limitation, applicable law
limiting the rate or amount of interest that may be charged or collected without
penalty or other legal sanction, whether civil or criminal, against the payee
thereof). For purposes of this Section 2.16, "interest" shall be defined to
include interest as defined pursuant to or for the purpose of such applicable
law; provided that to the extent permitted by applicable law, Agents and Lenders
may amortize, prorate, allocate and spread such interest throughout the term of
the Obligations until payment in full so that the rate or amount of such
interest does not exceed the maximum amount allowed by such applicable law.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Closing. The obligation of
each Lender to convert Existing Advances to Term Loans and to continue any Term
Loan on the Second Restatement Date is subject to the satisfaction of the
following conditions precedent before or concurrently with the Second
Restatement Date:
(a) The Agent shall have received on or before the Second
Restatement Date the following, each dated as of the Second Restatement Date
(unless otherwise specified), in form and substance satisfactory to the Agent
(unless otherwise specified) and (except for any Term Note) in sufficient copies
for each Lender:
(i) (A) Original counterparts to this Agreement executed by
each Loan Party, and (B) Term Notes payable to the order of each Lender to
the extent requested by any Lender pursuant to Section 2.15.
(ii) (A) U.S. Security Agreement Supplement in form and
substance satisfactory to Agent executed by TLSP Investments pursuant to
which the TLSP Investments Subordinated Debt is pledged to the Collateral
Agent for its benefit and the benefit of the Lenders and (B) U.S. Guaranty
Supplement in form and substance satisfactory to Agent executed by TLSP
Investments.
(iii) The Acknowledgment and Consent executed by the Borrower
and each other Loan Party that is a U.S. Subsidiary or Canadian Subsidiary
of the Borrower, in substantially the form of Exhibit I, together with:
28
(A) certificates representing the Pledged Interests
accompanied by undated stock powers executed in blank, and
instruments evidencing the Pledged Debt indorsed in blank including,
without limitation, notes evidencing all TLSP Subordinated Debt (in
each case to the extent not previously delivered to the Agent in
connection with the Existing Credit Agreement),
(B) financing statements, to be duly filed on the Second
Restatement Date under the Uniform Commercial Code of the States of
all jurisdictions that the Agent may deem necessary or desirable in
order to perfect and protect the Liens created under the Collateral
Documents, covering the Collateral described in the U.S. Security
Agreement (taking into account all financing statements previously
filed in connection with the Existing Credit Agreement),
(C) completed requests for information, dated on or
before the date of the Second Restatement Date, listing all
effective financing statements filed in the jurisdictions referred
to in clause (B) above that name any Loan Party or any of its
Subsidiaries as debtor, together with copies of such other financing
statements,
(D) evidence of the completion of all other recordings
and filings of or with respect to the Security Agreements that the
Agent may deem necessary or desirable in order to perfect and
protect the Liens created thereby,
(E) evidence of the insurance required by the terms of
the U.S. Security Agreement,
(F) copies of the Assigned Agreements, if any, referred
to in the U.S. Security Agreement, together with a consent to such
assignment, in substantially the form of Exhibit B to the U.S.
Security Agreement, duly executed by each party to such Assigned
Agreements other than the Loan Parties,
(G) executed termination statements (Form UCC-3 or a
comparable form), in proper form to be duly filed on the date of the
Second Restatement Date under the Uniform Commercial Code of all
jurisdictions that the Agent may deem desirable in order to
terminate or amend existing Liens in favor of any Person other than
Agent on the Collateral described in the U.S. Security Agreement.
(H) the Blocked Account Letters referred to in the U.S.
Security Agreement, duly executed by each Blocked Account Bank
listed on Schedule 3.01(a)(iii)(H), in form and substance
satisfactory to the Agent (to the extent not previously delivered to
the Agent in connection with the Existing Agreement),
(I) the Securities Account Control Agreement, if any,
referred to in the U.S. Security Agreement, duly executed by each
securities intermediary referred to in such Security Agreement, and
29
(J) evidence that all other action that the Agent may
deem necessary or desirable in order to perfect and protect the
Liens and security interests created under the Security Agreements,
the Debenture and the Debenture Pledge Agreement has been taken.
(iv) The First Amendment to U.S. Security Agreement in form
and substance satisfactory to Agent executed by the Borrower and each
other Loan Party that is a U.S. Subsidiary of the Borrower.
(v) The First Amendment to the TLSP Trademarks Subordination
Agreement in form and substance satisfactory to Agent executed by TLSP
Trademarks, Inc., TeleSpectrum Worldwide (Canada) and the Borrower.
(vi) The Agent, as secured party for the Lenders, shall have
released its Lien on the stock of xXxxxxxx.xxx, Inc. and payables owing
from xXxxxxxx.xxx, Inc. to the Company as of the date hereof which shall
be assigned to XxXxxx De Leeuw and certain of their affiliates in
settlement of the MDC Subordinated Debt.
(vii) [Intentionally Omitted]
(viii) Borrower shall have made a payment in the amount of
$176,215.28 to the Agent for distribution to the Lenders in accordance
with their Pro Rata Shares under the Existing Credit Agreement.
(ix) A copy of a certificate of the Secretary of State of the
jurisdiction of incorporation of each Loan Party and TLSP Investments,
dated reasonably near the Second Restatement Date, in each case listing
the charter of each Loan Party or TLSP Investments, as applicable, and
each amendment thereto on file in such office and certifying that (A) such
charter is a true and correct copy thereof, (B) such amendments are the
only amendments to such charter on file in such office, (C) such Person
has paid all franchise taxes to the date of such certificate and (D) such
Person is duly incorporated and in good standing under the laws of the
State of the jurisdiction of its incorporation.
(x) A copy of a certificate of the Secretary of State of each
of the States listed on Schedule 3.01(a)(x), dated reasonably near the
Second Restatement Date, with respect to each Loan Party as listed on
Schedule 3.01(a)(x) and TLSP Investments, stating that such Person is duly
qualified and in good standing as a foreign corporation in such State and
has filed all annual reports required to be filed to the date of such
certificate.
(xi) A certificate of each Loan Party and TLSP Investments,
signed on behalf of each such Person by its President and its Secretary,
dated the Second Restatement Date (the statements made in which
certificate shall be true on and as of the Second Restatement Date),
certifying as to (A) the absence of any amendments to the charter of such
Person since the date of the Secretary of State's certificate referred to
in Section 3.01(a)(ix), (B) a true and correct copy of the bylaws of such
Person as in effect on the Second Restatement Date, copies of which shall
be attached, (C) the due incorporation and good standing or valid
existence of such Person as a corporation
30
organized under the laws of the jurisdiction of its incorporation and the
absence of any proceeding for the dissolution or liquidation of such
Person, (D) the completeness and accuracy of the representations and
warranties contained in the Loan Documents as though made on and as of the
Second Restatement Date, (E) the absence of any event occurring and
continuing that constitutes a Default, (F) the approval and authorization
of the execution, delivery and performance of this Agreement and the other
Loan Documents to which it is a party as evidenced by appropriate
resolutions of the board of directors of each such Loan Party, copies of
which shall be attached, and (G) the signature and incumbency certificates
of the officers of each such Loan Party executing the Loan Documents to
which it is a party.
(xii) [Intentionally Omitted]
(xiii) Such financial, business and other information
regarding each Loan Party and its Subsidiaries as the Lenders shall have
requested, including, without limitation, information as to possible
contingent liabilities, tax matters, environmental matters, obligations
under or with respect to Plans, Multiemployer Plans and Welfare Plans,
collective bargaining agreements and other arrangements with employees,
audited annual financial statements dated December 31, 2001, which shall
classify the Obligations of the Borrower to the Lenders as long term
liabilities, and forecasts prepared by management, in form and substance
satisfactory to the Lenders, of balance sheets, income statements and cash
flow statements on a monthly basis for the period commencing on the Second
Restatement Date through and including the Final Maturity Date.
(xiv) [Intentionally Omitted]
(xv) A letter, in form and substance satisfactory to the
Agent, from the Borrower to Xxxxxx Xxxxxxxx LLP, its independent certified
public accountants, advising such accountants that the Agent and the
Lenders have been authorized to exercise all rights of the Borrower to
require such accountants to disclose any and all financial statements and
any other information of any kind that they may have with respect to the
Borrower and its Subsidiaries and directing such accountants to comply
with any reasonable request of the Agent or any Lender for such
information.
(xvi) Evidence of insurance naming the Agent as additional
insured and loss payee with such responsible and reputable insurance
companies or associations, and in such amounts and covering such risks as
is satisfactory to the Lenders, including, without limitation, business
interruption insurance, product liability insurance, and directors and
officers insurance.
(xvii) [Intentionally Omitted]
(xviii) Favorable opinions of (A) Cozen X'Xxxxxx, counsel to
the Loan Parties, in the form of Exhibit H-1 and (B) XxXxxxxx Xxxxx,
Canadian counsel to the Loan Parties, in the form of Exhibit H-2.
(xix) [Intentionally Omitted]
31
(xx) Evidence of (i) each Structured Vendor Settlement set
forth on Schedule 5.02(b)(ii)(F), and (ii) with the exception of Debt
identified on Schedule 3.01(a)(xx) as "Unrestructured Debt," a
restructuring of all other Debt of the Loan Parties, including, without
limitation, Debt evidenced by the MDC Subordinated Debt (as defined in the
Existing Credit Agreement) in each case in form and substance satisfactory
to the Agent and the Lenders, duly executed by each of the requisite
parties and appropriate Loan Party.
(b) The board of directors of the Borrower shall be comprised of
five (5) directors, with three (3) directors designated by the holders of the
Series B Convertible Preferred Stock (who shall not be current employees of any
Lender).
(c) The Lenders shall be satisfied with the corporate and legal
structure and capitalization of the Borrower and its Subsidiaries.
(d) Before giving effect to the transactions contemplated by this
Agreement, except with respect to the revenue deterioration previously disclosed
to Agent and Lenders, there shall have occurred no Material Adverse Change since
December 31, 2001.
(e) Other than as set forth on Schedule 4.01(j), there shall exist
no action, suit, investigation, litigation or proceeding affecting the Borrower
or any other Loan Party or any of their Subsidiaries pending or threatened
before any court, governmental agency or arbitrator that could have a Material
Adverse Effect.
(f) The Lenders shall have completed a due diligence investigation
of the Borrower and its Subsidiaries (including, without limitation, a field
examination of the quality of their current assets and of their management
information systems) in scope and with results satisfactory to the Lenders, and
nothing shall have come to the attention of the Lenders during the course of
such due diligence investigation to lead them to believe (i) that any material
information provided to the Agent or the Lenders has become misleading,
incorrect or incomplete in any material respect and (ii) without limiting the
generality of the foregoing, the Lenders shall have been given such access to
the management, records, books of account, contracts and properties of the
Borrower and its Subsidiaries, as they shall have requested.
(g) The Borrower shall have delivered to the Agent and each Lender a
copy of the unaudited consolidated financial statements for January 2002.
(h) The Borrower shall have delivered to the Agent and each Lender a
copy of the annual audit report for the Borrower and its Subsidiaries for the
Fiscal Year ended on December 31, 2001, which shall classify the Obligations of
the Borrower to the Lenders as long term liabilities, and which shall include a
Consolidated balance sheet of the Borrower and its Subsidiaries, as of December
31, 2001, and Consolidated statements of operations and cash flows of the
Borrower and its Subsidiaries, in each case for the Fiscal Year ending December
31, 2001, accompanied by an opinion of Xxxxxx Xxxxxxxx, LLP, together with (i) a
copy of any management letter prepared by Xxxxxx Xxxxxxxx, LLP with respect to
such Fiscal Year 2001 and distributed to the Borrower, (ii) a certificate of the
chief financial officer of the Borrower stating that no Default has occurred and
is continuing or, if a Default has occurred and is continuing, a
32
statement as to the nature thereof and the action that the Borrower has taken
and proposes to take with respect thereto, (iii) in the event of any change from
GAAP in the generally accepted accounting principles used in the preparation of
such financial statements, a statement of reconciliation conforming such
financial statements to GAAP, and (iv) a schedule in form satisfactory to the
Agent of the computations used by the Borrower in determining compliance with
the financial covenants contained in this Agreement.
(i) All conditions to Closing set forth in the Restructuring
Agreement shall have been satisfied or waived in writing by the appropriate
party.
(j) The Borrower shall have delivered to the Agent and each Lender a
copy of its preliminary report containing forecasts prepared by management of
the Borrower, in form satisfactory to the Agent, of Consolidated balance sheets,
statements of operations and cash flows on a monthly basis for the Fiscal Year
2002.
(k) The Borrower shall have delivered to the Agent and each Lender a
copy of its report identifying all leased real property together with a
description of the lease term, the annual rent payments, and any options to
extend such Lease, all leased property for facilities in which the Borrower and
its Subsidiaries are no longer conducting operations, all leased real property
which has been disposed of during the most recent Fiscal Year, and all leased
real property to be disposed of in the succeeding Fiscal Year, in form and
substance satisfactory to the Agent and the Lenders (the "LEASED REAL PROPERTY
REPORT").
(l) [Intentionally Omitted]
(m) [Intentionally Omitted]
(n) [Intentionally Omitted]
(o) The Borrower shall have delivered to the Agent and each Lender
(i) a corporate organizational chart, and (ii) a list of all management level
employees of the Borrower and its Subsidiaries terminated during the six months
immediately preceding the Second Restatement Date, as well as any severance
arrangements relating to any such termination in form satisfactory to the Agent.
(p) All fees and expenses payable to counsel for and the financial
advisors to the Agent and the Lenders incurred on or prior to the Second
Restatement Date shall have been paid in full.
SECTION 3.02. Determinations Under Section 3.01. For purposes of
determining compliance with the conditions specified in Section 3.01, each
Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lenders unless an officer
of the Agent responsible for the transactions contemplated by the Loan Documents
shall have received notice from such Lender prior to the Second Restatement Date
specifying its objection thereto.
33
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows:
(a) Each Loan Party (i) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases property or in
which the conduct of its business requires it to so qualify or be licensed
except where the failure to so qualify or be licensed could not be reasonably
likely to have a Material Adverse Effect and (iii) has all requisite corporate
power and authority (including, without limitation, all governmental licenses,
permits and other approvals) to own or lease and operate its properties and to
carry on its business as now conducted and as proposed to be conducted. All of
the outstanding Equity Interests in the Borrower have been validly issued, are
fully paid and non-assessable.
(b) Set forth on Schedule 4.01(b) hereto is a complete and accurate
list of all Subsidiaries of each Loan Party, showing as of the date hereof (as
to each such Subsidiary) the jurisdiction of its incorporation, the number of
shares of each class of its Equity Interests authorized, and the number
outstanding, on the date hereof and the percentage of the outstanding shares of
each such class of its Equity Interests owned (directly or indirectly) by such
Loan Party and the number of shares covered by all outstanding options,
warrants, rights of conversion or purchase and similar rights at the date
hereof. All of the outstanding Equity Interests in each Loan Party's
Subsidiaries have been validly issued, are fully paid and non-assessable and are
owned by such Loan Party or one or more of its Subsidiaries free and clear of
all Liens, except those created under the Collateral Documents. Each such
Subsidiary (i) is a corporation duly organized, validly, existing and in good
standing under the laws of the jurisdiction of its incorporation, (ii) is duly
qualified and in good standing as a foreign corporation in each other
jurisdiction in which it owns or leases property or in which the conduct of its
business requires it to so qualify or be licensed except where the failure to so
qualify or be licensed could not be reasonably likely to have a Material Adverse
Effect and (iii) has all requisite corporate power and authority (including,
without limitation, all governmental licenses, permits and other approvals) to
own or lease and operate its properties and to carry on its business as now
conducted and as proposed to be conducted. Each of CRW Financial Acquisition
Corp., IDRC, Federal Compliance Corp., ProMark One Marketing Services Inc.,
IntelliSell Corporation, IDRC Teleservices Inc., Telnet Systems Inc. and IDRC
New York, Inc. have been dissolved or merged with or into the Borrower.
TeleSpectrum Worldwide (Canada) Inc. has been dissolved or amalgamated with or
into S&P Data Corp., and S&P Data Corp. has amended its name to TeleSpectrum
Worldwide (Canada) Inc.
(c) The execution, delivery and performance by each Loan Party of
each Transaction Document to which it is or is to be a party, and the
consummation of the transactions contemplated by the Transaction Documents, are
within such Loan Party's corporate powers, have been duly authorized by all
necessary corporate action, and do not (i) contravene such Loan Party's charter
or bylaws, (ii) violate any law, rule, regulation (including, without
limitation,
34
Regulation X of the Board of Governors of the Federal Reserve System), order,
writ, judgment, injunction, decree, determination or award, (iii) conflict with
or result in the breach of, or constitute a default under, any contract, loan
agreement, indenture, mortgage, deed of trust, lease or other instrument binding
on or affecting any Loan Party, any of its Subsidiaries or any of their
properties or (iv) except for the Liens created under the Loan Documents, result
in or require the creation or imposition of any Lien upon or with respect to any
of the properties of any Loan Party or any of its Subsidiaries. No Loan Party or
any of its Subsidiaries is in violation of any such law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award or in breach
of any such contract, loan agreement, indenture, mortgage, deed of trust, lease
or other instrument, the violation or breach of which could be reasonably likely
to have a Material Adverse Effect.
(d) No authorization or approval or other action by, and no notice
to or filing with any governmental authority or regulatory body or any other
third party is required for (i) the due execution, delivery, recordation, filing
or performance by any Loan Party of any Transaction Document to which it is or
is to be a party or for the transactions contemplated by the Transaction
Documents, (ii) the grant by any Loan Party of the Liens granted by it pursuant
to the Collateral Documents, (iii) the perfection or maintenance of the Liens
created under the Collateral Documents (including the first priority nature
thereof) or (iv) the exercise by the Agent or any Lender of its rights under the
Loan Documents or the remedies in respect of the Collateral pursuant to the
Collateral Documents, except for the authorizations, approvals, actions, notices
and filings listed on Schedule 4.01(d) hereto, all of which have been duly
obtained, taken, given or made and are in full force and effect. All applicable
waiting periods in connection with the transactions contemplated by the
Transaction Documents have expired without any action having been taken by any
competent authority restraining, preventing or imposing materially adverse
conditions upon the Borrower, and the other transactions contemplated by the
Transaction Documents have expired without any action having been taken by any
competent authority restraining, preventing or imposing materially adverse
conditions upon the rights of the Loan Parties or their Subsidiaries freely to
transfer or otherwise dispose of, or to create any Lien on, any properties now
provided or hereafter acquired by any of them.
(e) This Agreement has been, each other Transaction Document when
delivered hereunder will have been, and each of the Collateral Documents have
been duly executed and delivered by each Loan Party party thereto. This
Agreement is, and each other Transaction Document when delivered hereunder will
be, the legal, valid and binding obligation of each Loan Party party thereto,
enforceable against such Loan Party in accordance with its terms. The Collateral
Documents, whether or not amended, supplemented or otherwise modified in
connection with the execution and delivery of this Agreement, are, and shall
continue to be, the legal, valid and binding obligation of each Loan Party party
thereto, enforceable against such Loan Party in accordance with its terms.
(f) (i) The Consolidated balance sheet of the Borrower and its
Subsidiaries as at December 31, 2001, and the related Consolidated statements of
operations and cash flows of the Borrower and its Subsidiaries for the fiscal
year then ended, accompanied, as to the Consolidated financial statements of the
Borrower and its Subsidiaries, by an opinion of Xxxxxx Xxxxxxxx LLP, independent
public accountants, fairly present, the Consolidated financial condition of the
Borrower and its Subsidiaries as at such dates and the Consolidated results of
the
35
operations of the Borrower and its Subsidiaries for the periods ended on such
dates, all in accordance with generally accepted accounting principles applied
on a consistent basis, and
(ii) since December 31, 2001 there has occurred no Material
Adverse Change, except with respect to the revenue deterioration
previously disclosed to Agent and Lenders.
(g) [Intentionally Omitted]
(h) The Consolidated forecasted balance sheet, statements of
operations and statements of cash flows of the Borrower and its Subsidiaries
delivered to the Lenders pursuant to Section 3.01(h) and Section 5.03(d) were
prepared in good faith on the basis of the assumptions stated therein, which
assumptions were reasonable in the light of conditions existing at the time of
delivery of such forecasts, and represented, at the time of delivery and on the
Second Restatement Date, the Borrower's best estimate of the future financial
performance of the Borrower and its Subsidiaries.
(i) None of the other information, exhibits or reports (excluding
any financial projections) taken as a whole, furnished by or on behalf of any
Loan Party to the Agent or any Lender, in connection with the negotiation of the
Loan Documents or pursuant to the terms of the Loan Documents contained any
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements made therein not misleading in light of the
circumstances under which such information was provided and on the Second
Restatement Date.
(j) There is no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of its Subsidiaries, including any
Environmental Action, pending or threatened before any court, governmental
agency or arbitrator that could be reasonably likely to have a Material Adverse
Effect except as set forth on Schedule 4.01(j). There is no action, suit,
investigation, litigation or proceeding affecting any Loan Party or any of its
Subsidiaries, pending or threatened before any court, governmental agency or
arbitrator that purports to affect the legality, validity or enforceability of
any Transaction Document or the consummation of the transactions contemplated
hereby and thereby.
(k) No Loan Party is engaged in the business of extending credit for
the purpose of purchasing or carrying Margin Stock, and no proceeds of any Term
Loan will be used to purchase or carry any Margin Stock or to extend credit to
others for the purpose of purchasing or carrying any Margin Stock.
(l) The Collateral Documents create a valid and perfected first
priority security interest in the Collateral securing the payment of the Secured
Obligations subject only to Permitted Liens, and all filings and other actions
necessary or desirable to perfect and protect such security interest have been
duly taken. The Loan Parties are the legal and beneficial owners of the
Collateral free and clear of any Lien, except for Permitted Liens and security
interests created under the Loan Documents.
(m) Neither any Loan Party nor any of its Subsidiaries is an
"investment company" or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company," as such terms are defined in the
Investment Company Act of 1940, as
36
amended. Neither the making of any Advances, nor the application of the proceeds
or repayment thereof by the Borrower, nor the consummation of the other
transactions contemplated hereby, will violate any provision of such Act or any
rule, regulation or order of the Securities and Exchange Commission thereunder.
(n) [Intentionally Omitted]
(o) (i) No ERISA Event has occurred or is reasonably expected to
occur with respect to any Plan.
(ii) As of the last annual actuarial valuation date, the
funded current liability percentage, as defined in Section 302(d)(8) of
ERISA, of each Plan exceeds 90% and there has been no material adverse
change in the funding status of any such Plan since such date.
(iii) Neither any Loan Party nor any ERISA Affiliate has
incurred or is reasonably expected to incur any Withdrawal Liability to
any Multiemployer Plan.
(iv) Neither any Loan Party nor any ERISA Affiliate has been
notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or has been terminated, within the meaning of
Title IV of ERISA, and no such Multiemployer Plan is reasonably expected
to be in reorganization or to be terminated, within the meaning of Title
IV of ERISA.
(v) Except as set forth in the financial statements referred
to in this Section 4.01 and in Section 5.03, the Loan Parties and their
respective Subsidiaries have no material liability with respect to
"expected post retirement benefit obligations" within the meaning of
Statement of Financial Accounting Standards No. 106.
(vi) Set forth on Schedule 4.01(o) hereto is a complete and
accurate list of all Plans, Multiemployer Plans and Welfare Plans.
(vii) Schedule B (Actuarial Information) to the most recent
annual report (Form 5500 Series) for each Plan, copies of which have been
filed with the Internal Revenue Service and furnished to the Lenders, is
complete and accurate and fairly presents the funding status of such Plan,
and since the date of such Schedule B there has been no material adverse
change in such funding status.
(p) (i) Each Loan Party and each of its Subsidiaries and Affiliates
has filed, has caused to be filed or has been included in all tax returns
(federal, state, local and foreign) required to be filed and has paid all taxes
shown thereon to be due, together with applicable interest and penalties.
(ii) Set forth on Schedule 4.01(p) hereto is a complete and
accurate list, as of the date hereof, of each taxable year of each Loan
Party and each of its Subsidiaries and Affiliates for which federal income
tax returns have been filed and for which the expiration of the applicable
statute of limitations for assessment or collection has not occurred by
reason of extension or otherwise (an "OPEN YEAR").
37
(iii) There is no unpaid amount, as of the date hereof, of
adjustments to the federal income tax liability of any Loan Party or any
of its Subsidiaries or Affiliates proposed by the Internal Revenue Service
with respect to Open Years. No issues have been raised by the Internal
Revenue Service in respect of Open Years that, in the aggregate, could
have a Material Adverse Effect.
(iv) There is no unpaid amount, as of the date hereof, of
adjustments to the state, local and foreign tax liability of any Loan
Party or any of its Subsidiaries or Affiliates proposed by all state,
local and foreign taxing authorities (other than amounts arising from
adjustments to federal income tax returns, if any). No issues have been
raised by such taxing authorities that, in the aggregate, could have a
Material Adverse Effect.
(q) Neither the business nor the properties of any Loan Party or any
of its Subsidiaries are affected by any fire, explosion, accident, strike,
lockout or other labor dispute, drought, storm, hail, earthquake, embargo, act
of God or of the public enemy or other casualty (whether or not covered by
insurance) that could be reasonably likely to have a Material Adverse Effect.
(r) [Intentionally Omitted]
(s) Set forth on Schedule 3.01(a)(xx) hereto is a complete and
accurate list of all Debt (other than Debt due under the Structured Vendor
Settlements set forth on Schedule 5.02(b)(ii)(F)) including all letters of
credit outstanding on the date hereof, showing as of the date hereof the
principal amount outstanding or amount available to be drawn (assuming all
conditions to drawing are satisfied) thereunder, the maturity date thereof and
the amortization schedule therefor.
(t) Neither the Borrower nor any of its Subsidiaries is the
beneficial owner of any real property.
(u) All Inventory of the Borrower or any of its Subsidiaries is
owned by the Borrower or such Subsidiary free and clear of any Lien, other than
under the Loan Documents, and is located at the addresses specified on Schedule
4.01(u).
(v) Set forth on Schedule 4.01(v) hereto is a complete and accurate
list of all leases of real property under which any Loan Party or any of its
Subsidiaries is the lessee, showing as of the date hereof the street address,
county or other relevant jurisdiction, state, lessor, lessee, expiration date
and annual rental cost thereof, and all information contained therein is
complete and accurate. Each such lease is the legal, valid and binding
obligation of the lessor thereof enforceable in accordance with its terms.
(w) Set forth on Schedule 4.01(w) hereto is a complete and accurate
list of all Investments held by any Loan Party or any of its Subsidiaries,
showing as of the date hereof the amount, obligor or issuer and maturity, if
any, thereof.
(x) Set forth on Schedule 4.01(x) hereto is a complete and accurate
list of all patents, trademarks, trade names, service marks and copyrights, and
all applications therefor and
38
licenses thereof of each Loan Party, or any of its Subsidiaries, showing as of
the date hereof the jurisdiction in which registered, the registration number,
the date of registration and the expiration date.
(y) Set forth on Schedule 4.01(y) hereto is a complete and accurate
list of all Liens on the property or assets of any Loan Party or any of its
Subsidiaries, showing as of the date hereof the lienholder thereof, the
principal amount of the obligations secured thereby and the property or assets
of such Loan Party or such Subsidiary subject thereto.
(z) The assets and property of TLSP Investments and TSLP Trademarks
(other than the TSLP Subordinated Debt) and the demand deposit accounts of TLSP
Investments permitted under Section 5.02(g)(ii) do not exceed $50,000 in the
aggregate.
(aa) Set forth on Schedule 4.01(aa) hereto is a complete and
accurate list of all deposit accounts of the Borrower and each of its
Subsidiaries as of the date hereof.
(bb) [Intentionally Omitted]
(cc) [Intentionally Omitted]
(dd) Set forth on Schedule 4.01(dd) hereto is a complete and
accurate list of all Material Contracts as of the Second Restatement Date.
ARTICLE V
COVENANTS
SECTION 5.01. Affirmative Covenants. So long as any Term Loan or any
other Obligation of any Loan Party under or in respect of any Loan Document
shall remain unpaid or any Lender Party shall have any Term Loan Exposure
hereunder, the Borrower will:
(a) Compliance with Laws, Etc. Comply and cause each of its
Subsidiaries to comply, in all material respects, with all applicable laws,
rules, regulations and orders, such compliance to include, without limitation,
compliance with ERISA and the Racketeer Influenced and Corrupt Organizations
Chapter of the Organized Crime Control Act of 1970.
(b) Payment of Taxes, Etc. Pay and discharge, and cause each of its
Subsidiaries to pay and discharge, before the same shall become delinquent, (i)
all taxes, assessments and governmental charges or levies imposed upon it or
upon its property and (ii) all lawful claims that, if unpaid, might by law
become a Lien upon its property which is not otherwise permitted hereunder;
provided, however, that neither the Borrower nor any of its Subsidiaries shall
be required to pay or discharge any such tax, assessment, charge or claim that
is being contested in good faith and by proper proceedings and as to which
appropriate reserves are being maintained, unless and until any Lien resulting
therefrom attaches to its property and becomes enforceable against its other
creditors.
(c) Compliance with Environmental Laws. Comply, and cause each of
its Subsidiaries and all lessees and other Persons operating or occupying its
properties to comply, in
39
all material respects, with all applicable Environmental Laws and Environmental
Permits; obtain and renew, and cause each of its Subsidiaries to obtain and
renew, all Environmental Permits necessary for its operations and properties;
and conduct, and cause each of its Subsidiaries to conduct, any investigation,
study-sampling and testing, make an appropriate response to any Environmental
Action against the Borrower or any Loan Party or any of their Subsidiaries and
discharge any obligations it may have to any Person thereunder (except if the
Borrower or any Loan Party and their Subsidiaries do not have standing to
contest or respond to such Environmental Action), and undertake any cleanup,
removal, remedial or other action necessary to remove and clean up all Hazardous
Materials from any of its properties, in material compliance with the
requirements of all governmental authorities and Environmental Laws; provided,
however, that neither the Borrower nor any of its Subsidiaries shall be required
to undertake any such cleanup, removal, remedial or other action to the extent
that its obligation to do so is being contested in good faith and by proper
proceedings and appropriate reserves are being maintained with respect to such
circumstances.
(d) Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or associations in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning similar properties
in the same general areas in which the Borrower or such Subsidiary operates.
(e) Preservation of Corporate Existence, Etc. Preserve and maintain,
and cause each of its Subsidiaries to preserve and maintain, its corporate
existence, rights (charter and statutory), permits, licenses, approvals,
privileges and franchises; provided, however, that neither the Borrower nor any
of its Subsidiaries shall be required to preserve any right, permit, license,
approval, privilege or franchise if the Board of Directors of the Borrower or
such Subsidiary shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Borrower or such Subsidiary, as
the case may be, and that the loss thereof is not disadvantageous in any
material respect to the Borrower, such Subsidiary or the Lenders.
(f) Visitation Rights. At any reasonable time and from time to time,
upon reasonable prior notice, permit the Agent or any Lenders or any agents or
representatives thereof to examine and make copies of and abstracts from the
records and books of account of, and visit the properties of, the Borrower and
any of its Subsidiaries, and to discuss the affairs, finances and accounts of
the Borrower and any of its Subsidiaries with any of their officers or directors
and with their independent certified public accountants.
(g) Keeping of Books. Keep, and cause each of its Subsidiaries to
keep, proper books of record and account, in which full and correct entries
shall be made of all financial transactions and the assets and business of the
Borrower and each such Subsidiary in accordance with generally accepted
accounting principles in effect from time to time.
(h) Maintenance of Properties, Etc. Maintain and preserve, and cause
each of its Subsidiaries to maintain and preserve, all of its properties that
are reasonably required in the conduct of its business in good working order and
condition, ordinary wear and tear excepted.
40
(i) Transactions with Affiliates. Conduct, and cause each of its
Subsidiaries to conduct, all transactions otherwise permitted under the Loan
Documents with any of their Affiliates on terms that are fair and reasonable and
no less favorable to the Borrower or such Subsidiary than it would obtain in a
comparable arm's-length transaction with a Person not an Affiliate.
(j) Covenant to Guarantee Obligations and Give Security. Upon (x)
the request of the Agent, (y) the formation or acquisition of any new direct or
indirect Subsidiary of any Loan Party (other than a Foreign Subsidiary that is
not a Canadian Subsidiary if the effect of such undertaking would have material
adverse tax consequences to the Loan Parties taken as a whole) or (z) the
acquisition of any property by any Loan Party, and such property in the judgment
of the Agent shall not already be subject to a perfected first priority security
interest in favor of the Agent for the benefit of the Lenders, then the Borrower
shall, in each case at the Borrower's expense:
(i) within 10 days after the formation or acquisition of a
Subsidiary, cause each such Subsidiary and each direct and indirect
Subsidiary of such Subsidiary, to duly execute and deliver to the Agent a
guaranty or guaranty supplement, in form and substance satisfactory to the
Agent, guaranteeing all of the Loan Parties' Obligations under the Loan
Documents, provided that no guaranty may be required (if acceptable to the
Agent) from a Foreign Subsidiary that is not a Canadian Subsidiary if the
execution and delivery thereof would result in adverse tax consequences to
the Loan Parties;
(ii) within 10 days after such request, formation or
acquisition, furnish to the Agent a description of the real and personal
properties of the Borrower and its Subsidiaries in detail satisfactory to
the Agent;
(iii) within 15 days after such request, formation or
acquisition, duly execute and deliver, and cause each such Subsidiary and
cause each direct and indirect parent of such Subsidiary to duly execute
and deliver, to the Agent mortgages, pledges, assignments, security
agreement supplements and other security agreements, as specified by and
in form and substance satisfactory to the Agent, securing payment of all
the Obligations of the Loan Parties under the Loan Documents and
constituting Liens on all such properties, provided that no mortgage,
pledge, assignment, security agreement supplement or other security
agreement may be required (if acceptable to the Agent) from a Foreign
Subsidiary that is not a Canadian Subsidiary if the execution and delivery
thereof would result in adverse tax consequences to the Loan Parties;
(iv) within 30 days after such request, formation or
acquisition, duly, execute and deliver, and cause each such Subsidiary and
cause each direct and indirect parent of such Subsidiary (other than any
foreign Subsidiary that is not a Canadian Subsidiary) to take whatever
action (including, without limitation, the recording of mortgages, the
filing of Uniform Commercial Code financing statements, the giving of
notices and the endorsement of notices on title documents) as may be
necessary or advisable in the opinion of the Agent to vest and perfect in
the Agent (or in any representative of the Agent) Liens on the properties
purported to be subject to the mortgages, pledges, assignments, security
agreement supplements and other security,
41
agreements delivered pursuant to this Section 5.01(j), enforceable against
all third parties in accordance with their terms;
(v) within 30 days after such request, formation or
acquisition, deliver to the Agent, upon the request of the Agent in its
sole discretion, a signed copy of a favorable opinion, addressed to the
Agent and the other Secured Parties, of counsel for the Loan Parties
acceptable to the Agent as to the matters contained in clauses (i), (iii)
and (iv) above, as to such mortgages, pledges, assignments, security
agreement supplements and other security agreements being legal, valid and
binding obligations of each such Loan Party enforceable in accordance with
their terms and as to such other matters as the Agent may reasonably
request;
(vi) as promptly as practicable after such request, formation
or acquisition, deliver, upon the request of the Agent in its sole
discretion, to the Agent with respect to each parcel of real property
owned or held by the entity that is the subject of such request, formation
or acquisition title reports, surveys and engineering, soils and other
reports, and environmental assessment reports, each of scope, form and
substance satisfactory to the Agent, provided, however, that to the extent
that any Loan Party, or any of its Subsidiaries shall have otherwise
received any of the foregoing items with respect to such real property
such items shall promptly after the receipt thereof be delivered to the
Agent, at any time and from time to time, promptly execute and deliver any
and all further instruments and documents and take all such other action
as the Agent may deem necessary or desirable in obtaining the full
benefits of, or in perfecting and presenting the Liens of, such
guaranties, mortgages, pledges, assignments, security agreements and
security agreement supplements; and
(vii) promptly upon organizing, or within five days after
organizing any Subsidiary or joint venture specified in clause (A) below,
or within 15 days after organizing any Person specified in clause (B),
each Loan Party shall pledge to the Agent on behalf of the Secured Parties
(A) in the case of any U.S. Subsidiary or Canadian Subsidiary, 100% of the
outstanding Equity Interests of such Person owned by such Loan Party; (B)
in the case of any Foreign Subsidiary that is not a Canadian Subsidiary or
foreign joint venture, 65 % of the total outstanding Equity Interests of
such Person owned by such Loan Party; and (C) in the case of any domestic
joint venture, 100% of the Equity Interests of such Person held by such
Loan Party.
(k) Further Assurances. (i) Promptly upon request by the Agent or by
any Lender Party through the Agent, correct any material defect or error that
may be discovered in any Loan Document or in the execution, acknowledgment,
filing or recordation thereof, and
(ii) Promptly upon request by the Agent or by any Lender Party
through the Agent, do, execute, acknowledge, deliver, record, re-record,
file, re-file, register and re-register any and all such further acts,
deeds, conveyances, pledge agreements, mortgages, deeds of trust, trust
deeds, assignments, financing statements and continuations thereof,
termination statements, notices of assignment, transfers, certificates,
assurances and other instruments as the Agent, or any Lender Party through
the Agent, may reasonably require from time to time in order to (A) carry
out more
42
effectively the purposes of the Loan Documents, (B) to the fullest extent
permitted by applicable law, subject any Loan Party's or any of its
Subsidiaries' properties, assets, rights or interests to the Liens now or
hereafter intended to be covered by any of the Collateral Documents, (C)
perfect and maintain the validity, effectiveness and priority of any of
the Collateral Documents and any of the Liens intended to be created
thereunder and (D) assure, convey, grant, assign, transfer, preserve,
protect and confirm more effectively unto the Agent and the Lender parties
the rights granted or now or hereafter intended to be granted to the Agent
and the Lender Parties under any Loan Document or under any other
instrument executed in connection with any Loan Document to which any Loan
Party or any of its Subsidiaries is or is to be a party, and cause each of
its Subsidiaries to do so.
(l) [Intentionally Omitted]
(m) Preparation of Environmental Reports. At the request of the
Agent, provide to the Lenders within 60 days after such request, at the expense
of the Borrower, a Phase I environmental site assessment report for any of its
or its Subsidiaries' properties described in such request, prepared by an
environmental consulting firm acceptable to the Agent (and, if based upon the
recommendation of such environmental consulting firm, a Phase II environmental
site assessment report) indicating the presence or absence of Hazardous
Materials and the estimated cost of any compliance, removal or remedial action
in connection with any Hazardous Materials on such properties. Without limiting
the generality of the foregoing, if the Agent determines at any time that a
material risk exists that any such report will not be provided within the time
referred to above, the Agent may retain an environmental consulting firm to
prepare such report at the expense of the Borrower, and the Borrower hereby
grants and agrees to cause any Subsidiary that owns any property described in
such request to grant at the time of such request, to the Agent, the Lenders,
such firm and any agents or representatives thereof an irrevocable non-exclusive
license, subject to the rights of tenants, to enter onto their respective
properties to undertake such an assessment. The Borrower will deliver to Agent
promptly following receipt thereof, copies of material environmental audits,
investigations, analyses and reports of any kind or character, whether prepared
by personnel of the Borrower or any of its Subsidiaries or by independent
consultants, governmental authorities or any other Persons, with respect to
material environmental matters affecting the properties of the Borrower or any
of its Subsidiaries or with respect to any material Environmental Actions. Agent
may, from time to time and in its reasonable discretion, at the Borrower's
expense, retain an independent professional consultant to review any
environmental audits, investigations, analyses and reports prepared by or for
the Borrower or any of its Subsidiaries.
(n) Compliance with Terms of Leaseholds and Material Contracts.
Except in any case in clause (i) or (ii) where the failure to do so would not be
reasonably likely to have a Material Adverse Effect, (i) with respect to all
leases of real property to which the Borrower or any of its Subsidiaries is a
party, make all payments and otherwise perform all obligations in respect of all
such leases, keep all such leases in full force and effect and not allow any of
such leases to lapse or be terminated or any rights to renew such leases to be
forfeited or canceled, promptly notify the Agent of any material default by any
party with respect to any such lease and cooperate with the Agent in all
respects to cure any such default, and cause each of its Subsidiaries to do so,
and (ii) with respect to all Material Contracts, make all payments and
43
perform all obligations in respect of all Material Contacts, keep all Material
Contracts in full force and effect and not allow any Material Contract to lapse
or be terminated or any rights to renew such Material Contract to be forfeited
or canceled, promptly notify the Agent of any default by any party with respect
to any Material Contract and cooperate with the Agent in all respects to cure
any such default, and cause each of its Subsidiaries to do so.
(o) [Intentionally Omitted]
(p) [Intentionally Omitted]
(q) Access to Advisors. Permit the Agent and any Lender or any
agents or representatives thereof full and direct access to any investment
banker and/or financial advisor working for or on behalf of the Borrower.
(r) Annual Forecast and Business Plan. Deliver to the Agent and each
Lender prior to or on October 31, 2002, forecasts prepared by management of the
Borrower, in form satisfactory to the Agent, of Consolidated balance sheets,
statements of operations and cash flows on a monthly basis for Fiscal Year 2003
together with a narrative description of the business strategy with respect to
each business segment for Fiscal Year 2003.
SECTION 5.02. Negative Covenants. So long as any Term Loan or any
other Obligation of any Loan Party under or in respect of any Loan Document
shall remain unpaid or any Lender shall have any Term Loan Exposure hereunder,
the Borrower will not at any time:
(a) Liens, Etc. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist, any Lien on
or with respect to any of its properties of any character (including, without
limitation, accounts) whether now owned or hereafter acquired, or sign or file
or suffer to exist, or permit any of its Subsidiaries to sign or file or suffer
to exist, under the Uniform Commercial Code of any jurisdiction, a financing
statement that names the Borrower or any of its Subsidiaries as debtor, or sign
or suffer to exist, or permit any of its Subsidiaries to sign or suffer to
exist, any security agreement authorizing any secured party thereunder to file
such financing statement, or assign, or permit any of its Subsidiaries to
assign, any accounts or other right to receive income, excluding, however, from
the operation of the foregoing restrictions the following (in each case other
than under subclauses (i), (ii) and (iii), subject to Section 5.02(r) with
respect to TLSP Investments and TLSP Trademarks):
(i) Liens created under the Loan Documents;
(ii) Permitted Liens;
(iii) Liens existing on the date hereof and described on
Schedule 4.01(y) hereto;
(iv) Liens arising in connection with Capitalized Leases
permitted under Section 5.02(b)(ii)(B), provided that no such Lien shall
extend to or cover any Collateral or assets other than the assets subject
to such Capitalized Leases;
44
(v) purchase money Liens upon or in real property or equipment
acquired or held by the Borrower or any of its Subsidiaries in the
ordinary course of business to secure the purchase price of such property
or equipment or to secure Debt incurred solely for the purpose of
financing the acquisition of any such property or equipment to be subject
to such Liens, or Liens existing on any such property or equipment at the
time of acquisition (other than any such Liens created in contemplation of
such acquisition that do not secure the purchase price), or extensions,
renewals or replacements of any of the foregoing for the same or a lesser
amount; provided, however, that no such Lien shall extend to or cover any
property other than the property or equipment being acquired, and no such
extension, renewal or replacement shall extend to or cover any property,
not theretofore subject to the Lien being extended, renewed or replaced;
and provided further that the aggregate principal amount of the Debt
secured by Liens permitted by this clause (v) shall not exceed the amount
permitted under Section 5.02(b)(ii)(B) at any time outstanding and that
any such Debt shall not otherwise be prohibited by the terms of the Loan
Documents;
(vi) Liens arising in connection with Government Loans
permitted under Section 5.02(b)(ii)(B) and solely for the benefit of the
governmental entity making such Government Loan, provided that no such
Lien shall extend to or cover any Collateral or assets other than the
equipment, real property and other property purchased or financed with
such Government Loans;
(vii) the filing of financing statements solely as a
precautionary measure in connection with operating leases not prohibited
under Section 5.02(c); and
(viii) the replacement, extension or renewal of any Lien
permitted by clause (iii) above upon or in the same property theretofore
subject thereto or the replacement, extension or renewal (without increase
in the amount or change in any direct or contingent obligor) of the Debt
secured thereby.
(b) Debt. Create, incur, assume or suffer to exist, or permit any of
its Subsidiaries to create, incur, assume or suffer to exist, any Debt other
than:
(i) in the case of the Borrower, Debt to its wholly owned U.S.
Subsidiaries and Canadian Subsidiaries that are Loan Parties as of the
date hereof to the extent permitted by Section 5.02(g), so long as such
Debt (x) is subordinated to the Obligations under the Loan Documents
pursuant to an intercompany subordination agreement in substantially the
form of Exhibit K-1 hereto (each as amended, restated, supplemented or
otherwise modified from time to time in accordance with its terms, an
"INTERCOMPANY SUBORDINATION AGREEMENT"), duly executed by such Subsidiary,
(y) is evidenced by an intercompany note in substantially the form of
Exhibit K-2 thereto (each, as amended, amended and restated, supplemented
or otherwise modified from time to time in accordance with items terms, an
"INTERCOMPANY NOTE"), duly executed by the Borrower as payor, and (z)
shall constitute Pledged Debt and shall be delivered to the Agent in
accordance with Section 5.01(j); provided, however, that in each case,
immediately after giving effect thereto, no Default shall have occurred
and be continuing; and
45
(ii) in the case of the Loan Parties,
(A) Debt under the Loan Documents;
(B) Debt secured by Liens permitted under Section
5.02(a)(v), Capitalized Leases and Government Loans, the aggregate
principal amount of which shall at no time exceed $3,000,000;
(C) Debt described on Schedule 3.01(a)(xx);
(D) [Intentionally Omitted]
(E) Debt owed to the Borrower by its wholly owned U.S.
Subsidiaries and Canadian Subsidiaries, subject to the requirements
of Section 5.02(b)(i) (except that each reference to the Borrower in
each of clauses (x) and (y) thereof shall be a reference to such
U.S. Subsidiary or Canadian Subsidiary for the purposes of this
subclause (E) and in each case to the extent permitted by Section
5.02(g); provided, however, that in each case, immediately after
giving effect thereto, no Default shall have occurred and be
continuing;
(F) Debt consisting of amounts due under the Structured
Vendor Settlements set forth on Schedule 5.02(b)(ii)(F); and
(G) In the case of the Borrower and TeleSpectrum
Worldwide (Canada) Inc., the TLSP Subordinated Debt; provided that
the requirements of 5.02(b)(i) have been satisfied; and
(iii) in the case of the Borrower and any of its Subsidiaries,
endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business, subject to Section
5.02(r) in the case of TLSP Investments and TLSP Trademarks.
(c) Lease Obligations. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to exist, any
obligations as lessee for the rental or hire of real or personal property in
connection with any sale and leaseback transaction; provided, however, that so
long as no Default has occurred and is continuing, any Loan Party may enter into
an operating lease of equipment sold pursuant to Section 5.02(f)(iii).
(d) Change in Nature of Business. Make, or permit any of its
Subsidiaries to make, any material change in the nature of its business as
carried on at the date hereof.
(e) Mergers, Etc. Merge into or consolidate with any Person or
permit any Person to merge into it, or permit any of its Subsidiaries to do so,
except that any Subsidiary of the Borrower may merge into or consolidate with
the Borrower or any other such Subsidiary, so long as the surviving Person is
the Borrower or, if the merger or consolidation is with a Subsidiary other than
the Borrower, such surviving Person is a wholly-owned U.S. Subsidiary or
Canadian Subsidiary of the Borrower and complies with Section 5.01(j).
46
(f) Sales, Etc. of Assets. Sell, lease, transfer or otherwise
dispose of, or permit any of its Subsidiaries to sell, lease, transfer or
otherwise dispose of, any assets, or grant any option or other right to
purchase, lease or otherwise acquire any assets, except:
(i) inventory in the ordinary course;
(ii) in a transaction authorized by subsection (e) of this
Section; and
(iii) sales or trade-ins of used equipment for fair value in
the ordinary course of business for like assets or cash in an aggregate
amount not to exceed $100,000 in the aggregate from and after the Second
Restatement Date.
(g) Investments. Make or hold, or permit any of its Subsidiaries to
make or hold, any Investment other than:
(i) Investments by the Borrower and the other Loan Parties in
wholly-owned Subsidiaries which Investments are outstanding on the date
hereof;
(ii) Investments by the Borrower and its Subsidiaries (other
than TLSP Investments) in demand deposit accounts maintained in the
ordinary course of business with any Lender and in Cash Equivalents not on
deposit in Blocked Accounts (x) in an aggregate amount not to exceed
$50,000, (y) in the demand deposit accounts set forth on Schedule 4.01(w)
which will be closed on or before June 30, 2002 and which at no time shall
have an aggregate balance in excess of $1,500,000 and (z) in prefunded
accounts in support of ACH transactions; provided, however, that TLSP
Investments may maintain two demand deposit accounts upon, and subject to,
the Agent's prior written consent;
(iii) [Intentionally Omitted];
(iv) Investments existing on the date hereof and described on
Schedule 4.01(w) hereto; and
(v) Investments by Subsidiaries of the Borrower in the
Borrower.
(h) Restricted Payments. Declare or pay any dividends, purchase,
redeem, retire, defease or otherwise acquire for value any of its Equity
Interests now or hereafter outstanding, return any capital to its stockholders,
partners or members (or the equivalent Persons thereof) as such or issue or sell
any Equity Interests or accept any capital contributions, or permit any of its
Subsidiaries to purchase, redeem, retire, defease or otherwise acquire for value
Equity Interests of the Borrower or to issue or sell any Equity Interests
therein, except that, so long as no Default shall have occurred and be
continuing at the time of any action described in clause (i) or (ii) below or
would result therefrom;
(i) the Borrower may declare and pay dividends solely in
respect of the Series A Preferred Stock in cash or in additional shares of
Series A Preferred Stock; and
47
(ii) any Subsidiary of the Borrower may (A) declare and pay
cash dividends to the Borrower, (B) declare and pay cash dividends to any
other wholly-owned U.S. Subsidiary or Canadian Subsidiary of the Borrower
of which it is a Subsidiary, and (C) if not a wholly-owned Subsidiary of
the Borrower, declare and pay cash dividends to each holder of an Equity
Interest therein in proportion to such holding, provided that the Borrower
or other Loan Party, as a holder of Equity Interest therein, shall also
receive cash distributions from such Subsidiary on terms no less favorable
than afforded to any other holder of Equity Interests of the same as such
Loan Party's holding.
(i) Amendment of Constitutive Documents. Except for the Charter
Amendment, amend, or permit any of its Subsidiaries to amend, its certificate of
incorporation, bylaws or other constitutive documents.
(j) Accounting Changes. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in (i) accounting policies or
reporting practices, except (A) as required by GAAP or (B) if such change has no
material effect on the financial information reported, or (ii) Fiscal Year.
(k) Prepayments, Etc. of Debt. Prepay, redeem, or otherwise satisfy
prior to the scheduled maturity thereof in any manner, or make any payment in
violation of any subordination terms of, any Debt other than the prepayment of
the Term Loans in accordance with the terms of this Agreement.
(l) [Intentionally Omitted]
(m) Negative Pledge. Enter into or suffer to exist, or permit any of
its Subsidiaries to enter into or suffer to exist, any agreement prohibiting or
conditioning the creation or assumption of any Lien upon any of its property or
assets other than (i) in favor of the Agent and the Lenders or (ii) in
connection with any Debt that is secured by purchase money Liens or is a
Capitalized Lease or a Government Loan, in each case, to the extent permitted
under Section 5.02(b)(ii)(B), and solely to the extent such agreement is limited
to the property covered by such Liens.
(n) Partnerships. Become a general partner in any general or limited
partnership or joint venture, or permit any of its Subsidiaries to do so other
than any Subsidiary the sole assets of which consist of its interest in such
partnership or joint venture.
(o) Formation of Subsidiaries. Organize or invest, or permit any
Subsidiary to organize or invest, in any new Subsidiary.
(p) Payment Restrictions Affecting Subsidiaries. Directly or
indirectly, enter into or suffer to exist, or permit any of its Subsidiaries to
enter into or suffer to exist any agreement or arrangement limiting the ability
of any of its Subsidiaries to declare or pay dividends or other distributions in
respect of its Equity Interests or repay or prepay any Debt owed to, make loans
or advances to, or otherwise transfer assets to or invest in, the Borrower or
any Subsidiary of the Borrower (whether through a covenant restricting
dividends, loans, asset transfers or investments, a financial covenant or
otherwise), except the Loan Documents.
48
(q) Other Transactions. Engage, or permit any of its Subsidiaries to
engage, in any transaction involving commodity, options or futures contracts or
any similar speculative transactions (including, without limitation, take-or-pay
contracts).
(r) Restricted Subsidiaries. Permit TLSP Investments or TLSP
Trademarks to create, incur, assume or suffer to exist Obligations or Liens in
an aggregate amount in excess of $50,000 at any time, or suffer to exist or
permit TLSP Investments or TSLP Trademarks to create, acquire, assume or own
property and assets in the aggregate exceeding $50,000 (other than the TLSP
Subordinated Notes, and, in the case of TLSP Investments, the demand deposit
accounts permitted under Section 5.02(g)(ii)), unless, in the case of TLSP
Investments, TLSP Investments shall have complied with Section 5.01(j).
(s) Amendment, Etc. of Material Contracts. Cancel or terminate any
Material Contract, or consent to or accept any cancellation or termination
thereof, amend, modify or change in any manner any term or condition of any
Material Contract or give any consent, waiver or approval thereunder, waive any
default under or any breach of any term or condition of any Material Contract,
agree in any manner to any other amendment, modification or change of any term
or condition of any Material Contract or take any other action in connection
with any Material Contract that would impair the value of the interest or rights
of any Loan Party thereunder, that would, in any such case, would be reasonably
likely to cause a Material Adverse Change, or permit any of its Subsidiaries to
do any of the foregoing, in each case without the written consent of the Agent
and the Required Lenders.
(t) [Intentionally Omitted]
(u) [Intentionally Omitted]
SECTION 5.03. Reporting Requirements. So long as any Obligation of
any Loan Party under or in respect of any Loan Document shall remain unpaid, or
any Lender shall have any Term Loan Exposure hereunder, the Borrower will
furnish to the Agent and the Lenders:
(a) Default and Prepayment Notices. (i) As soon as possible and in
any event within two Business Days after the occurrence of each Default or any
event, development or occurrence reasonably likely to have a Material Adverse
Effect continuing on the date of such statement, a statement of the chief
financial officer of the Borrower setting forth details of such Default, event,
development or occurrence and the action that the Borrower has taken and
proposes to take with respect thereto, and (ii) as soon as possible and in any
event no later than 11:00 A.M. (New York City time) at least three Business Days
before any prepayment of Term Loans is to be made by the Borrower pursuant to
Section 2.06 (the "PREPAYMENT DATE"), written notice of the principal amount of
such prepayment (the "PREPAYMENT AMOUNT") and the applicable Prepayment Date.
Each such notice (a "PREPAYMENT NOTICE") shall be by telex or telecopier or
otherwise as provided in Section 8.02.
(b) Monthly and Quarterly Financials; Weekly Cash Flow Statements
and Variance Reports. (i) Monthly Financials. As soon as available and in any
event within 30 days after the end of each month, commencing with the month of
April 2002, a Consolidated balance
49
sheet of the Borrower and its Subsidiaries, in each case as of the end of such
month, and Consolidated statements of operations and cash flows of the Borrower
and its Subsidiaries, in each case for the period commencing at the end of the
previous month and ending with the end of such month, and Consolidated
statements of operations and cash flows of the Borrower and its Subsidiaries for
the period commencing at the end of the previous Fiscal Year and ending with the
end of such month, setting forth in each case in comparative form the
corresponding figures for the corresponding month and Fiscal Year-to-date period
of the preceding Fiscal Year and the corresponding figures for the corresponding
month and Fiscal Year-to-date period of the annual forecast previously delivered
pursuant to Section 5.03(d), all in reasonable detail and duly certified by the
chief financial officer of the Borrower, together with (A) a certificate of said
officer stating that no Default has occurred and is continuing or, if a Default
has occurred and is continuing, a statement as to the nature thereof and the
action that the Borrower has taken and proposes to take with respect thereto,
(B) a schedule in form satisfactory to the Agent of the computations used by the
Borrower in determining compliance with the covenants contained in Sections
5.04(a) through (c), and (C) in the event of any change from GAAP in the
generally accepted accounting principles used in the preparation of such
financial statements, a statement of reconciliation conforming such financial
statements to GAAP and (D) a brief narrative prepared by the chief financial
officer of the Borrower, outlining the factors impacting the financial results
of the Borrower and its Subsidiaries for such month.
(ii) Quarterly Financials. As soon as available and in any
event within 45 days after the end of each Fiscal Quarter, commencing with
the Fiscal Quarter ended March 31, 2002, a Consolidated balance sheet of
the Borrower and its Subsidiaries, in each case as of the end of such
Fiscal Quarter, and Consolidated statements of operations and cash flows
of the Borrower and its Subsidiaries, in each case for the period
commencing at the end of the previous Fiscal Quarter and ending with the
end of such Fiscal Quarter, and Consolidated statements of operations and
cash flows of the Borrower and its Subsidiaries for the period commencing
at the end of the previous Fiscal Quarter and ending with the end of such
Fiscal Quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding Fiscal Quarter and Fiscal
Year-to-date period of the preceding Fiscal Year and the corresponding
figures for the corresponding month and Fiscal Year-to-date period of the
annual forecast previously delivered pursuant to Section 5.03(d), all in
reasonable detail and duly certified by the chief financial officer of the
Borrower, together with (A) a certificate of said officer stating that no
Default has occurred and is continuing or, if a Default has occurred and
is continuing, a statement as to the nature thereof and the action that
the Borrower has taken and proposes to take with respect thereto, (B) a
schedule in form satisfactory to the Agent of the computations used by the
Borrower in determining compliance with the covenants contained in
Sections 5.04(a) through (d), and (C) in the event of any change from GAAP
in the generally accepted accounting principles used in the preparation of
such financial statements, a statement of reconciliation conforming such
financial statements to GAAP.
(iii) Weekly Cash Flow Statements; Variance Reports. As soon
as available and in any event not later than the last Business Day of each
week after the Second Restatement Date, Consolidated cash flow statements
in form and substance satisfactory to the Agent reflecting on a line-item
basis cash receipts and disbursements for the Borrower and its
Subsidiaries, and a Variance Report with respect to the
50
preceding week. Such weekly statement shall include a weekly cash flow
forecast for the 13 week period immediately following the date of
delivery, a statement of the assumptions underlying such forecast
(including, without limitation, assumptions as to days sales outstanding
and days payable outstanding), and shall state with particularity whether,
for any week contained in such forecast, 10% or more of projected revenues
are dependent upon collections from a single account debtor.
(c) Annual Financials. As soon as available and in any event within
90 days after the end of each Fiscal Year, a copy of the annual audit report for
such year for the Borrower and its Subsidiaries, including therein a
Consolidated balance sheet of the Borrower and its Subsidiaries, as of the end
of such Fiscal Year, and Consolidated statements of operations and cash flows of
the Borrower and its Subsidiaries, in each case for the period commencing at the
end of the previous Fiscal Year and ending with the end of such Fiscal Year,
accompanied as to such Consolidated statements by an opinion of an independent
public accountant of recognized standing acceptable to the Required Lenders,
together with (i) a copy of any management letter prepared by such accounting
firm with respect to such Fiscal Year and distributed to the Borrower, (ii) a
certificate of the chief financial officer of the Borrower stating that no
Default has occurred and is continuing or, if a Default has occurred and is
continuing, a statement as to the nature thereof and the action that the
Borrower has taken and proposes to take with respect thereto, (iii) in the event
of any change from GAAP in the generally accepted accounting principles used in
the preparation of such financial statements, a statement of reconciliation
conforming such financial statements to GAAP, and (iv) a schedule in form
satisfactory to the Agent of the computations used by the Borrower in
determining compliance with the covenants contained in Sections 5.04(a) through
(c).
(d) Annual Forecasts. As soon as available and in any event no later
than 60 days prior to the end of each Fiscal Year, a detailed business plan
prepared by management of the Borrower and approved by the Board of Directors,
in form satisfactory to the Agent, setting forth the financial projections for
the Borrower on a monthly basis for the following Fiscal Year, and including
Consolidated balance sheets, statements of operations and cash flows on a
monthly basis and a detailed narrative description of the financial and other
assumptions utilized by management in preparing such plan.
(e) Litigation. Promptly after the commencement thereof, notice of
all actions, suits, investigations, litigation and proceedings before any court
or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting any Loan Party or any of its
Subsidiaries of the type described in Section 4.01(j).
(f) Securities Reports. Promptly after the sending or filing
thereof, copies of all proxy statements, financial statements and reports that
any Loan Party or any of its Subsidiaries sends to its stockholders, and copies
of all regular, periodic and special reports, and all registration statements,
that any Loan Party or any of its Subsidiaries files with the Securities and
Exchange Commission or any governmental authority that may be substituted
therefor, or with any national securities exchange.
(g) Creditor Reports. Promptly after the furnishing thereof copies
of any statement or report furnished to any other holder of the Debt of any Loan
Party or of any of its
51
Subsidiaries (including, without limitation, loan or credit or similar
agreement) and not otherwise required to be furnished to the Lender Parties
pursuant to any other clause of this Section 5.03.
(h) Agreement Notices. Promptly upon receipt thereof, copies of all
notices, requests and other documents received by any Loan Party or any of its
Subsidiaries under or pursuant to any Related Documents or indenture, loan or
credit or similar agreement regarding or related to any breach or default by any
party thereto or other event that could materially impair the value of the
interests or the rights of any Loan Party or any of its Subsidiaries or
otherwise have a Material Adverse Effect, and copies of any amendment,
modification or waiver of any provision of any Related Agreement or indenture,
loan or credit or similar agreement and, from time to time upon request by the
Agent, such information and reports regarding the Related Documents as the Agent
may reasonably request.
(i) ERISA. (i) ERISA Events and ERISA Reports. (A) Promptly and in
any event within 10 days after any Loan Party or any ERISA Affiliate knows or
has reason to know that any ERISA Event has occurred, a statement of the chief
financial officer of the Borrower describing such ERISA Event and the action, if
any, that such Loan Party or such ERISA Affiliate has taken and proposes to take
with respect thereto and (B) on the date any records, documents or other
information must be furnished to the PBGC with respect to any Plan pursuant to
Section 4010 of ERISA, a copy of such records, documents and information.
(ii) Plan Terminations. Promptly and in any event within two
Business Days after receipt thereof by any Loan Party or any ERISA
Affiliate, copies of each notice from the PBGC stating its intention to
terminate any Plan or to have a trustee appointed to administer any Plan.
(iii) Plan Annual Reports. Promptly and in any event within 10
days after the filing thereof with the Internal Revenue Service, copies of
each Schedule B (Actuarial Information) to the annual report (Form 5500
Series) with respect to each Plan.
(iv) Multiemployer Plan Notices. Promptly and in any event
within five Business Days after receipt thereof by any Loan Party or any
ERISA Affiliate from the sponsor of a Multiemployer Plan, copies of each
notice concerning (A) the position of Withdrawal Liability imposed by any
such Multiemployer Plan, (B) the reorganization or termination, within the
meaning of Title IV of ERISA, of any such Multiemployer Plan or (C) the
amount of liability incurred, or that may be incurred, by such Loan Party
or any ERISA Affiliate in connection with any event described in clause
(A) or (B).
(j) Environmental Conditions. Promptly after the assertion or
occurrence thereof, notice of any Environmental Action against or of any
noncompliance by any Loan Party or any of its Subsidiaries with any
Environmental Law or Environmental Permit that, and notice of any Release
required to be reported to any federal, state, local or foreign governmental or
regulatory agency under any applicable Environmental Laws and of any remedial
action taken by the Borrower or any of its Subsidiaries or any other Person of
which the Borrower has knowledge in response to any Hazardous Materials or any
Environmental Actions that, could (i) reasonably be expected to have a Material
Adverse Effect or (ii) cause any property described
52
in the mortgages to be subject to any restrictions on ownership, occupancy use
or transferability under any Environmental Law.
(k) Supplemental Leased Property Report. As soon as available and in
any event within 45 days after the end of each Fiscal Quarter, a report
supplementing Schedule 4.01(v) hereto, including an identification of all leased
property disposed of by the Borrower or any of its Subsidiaries during such
Fiscal Quarter, a list and description (including the street address, county or
other relevant jurisdiction, state, record owner, book value thereof and in the
case of leases of property, lessor, lessee, expiration date and annual rental
cost thereof) of all real property acquired or leased during such Fiscal Quarter
and a description of such other changes in the information, included in such
Schedule as may be necessary for such Schedule to be accurate and complete.
(l) Insurance. As soon as available and in any event within 30 days
after the end of each Fiscal Year, a report summarizing the insurance coverage
(specifying type, amount and carrier) in effect for the Borrower and its
Subsidiaries and containing such additional information as any Lender Party
(through the Agent) may reasonably specify.
(m) Accounts Receivable and Accounts Payable Aging. As soon as
available and in any event within 30 days after the end of each month, a
detailed schedule, in form and substance satisfactory to the Agent, setting
forth (as of the end of the immediately preceding month) (a) all accounts
receivable (by customer) , together with a statement of the number of days each
such account receivable has been outstanding since invoice date, (b) the amount
(by customer) of all unbilled accounts, (c) all accounts payable (by payee),
together with a statement of the number of days each such account payable has
been outstanding since invoice date, and (d) the amount (by payee) of all
accrued and unpaid expenses.
(n) Other Information. Such other information (i) delivered to the
shareholders of the Borrower or any of its Subsidiaries, including, without
limitation, proxy statements, financial statements and reports, or required to
be filed with the SEC or any national securities exchange, including, without
limitation, any Forms 10-K, 10-Q and 8-K, in each case promptly after the
sending or filing thereof and (ii) respecting the business, condition (financial
or otherwise), operations, performance, properties or prospects of any Loan
Party or any of its Subsidiaries as any Lender Party (through the Agent) may
from time to time reasonably request.
(o) [Intentionally Omitted]
(p) [Intentionally Omitted]
(q) [Intentionally Omitted]
SECTION 5.04. Financial Covenants. So long as any Term Loan or any
other Obligation of any Loan Party under or in respect of any Loan Document
shall remain unpaid or any Lender shall have any Term Loan Exposure hereunder,
the Borrower will:
(a) Minimum Consolidated EBITDA. Not permit Consolidated EBITDA for
any period set forth below to be less than the correlative amount indicated:
53
PERIOD MINIMUM CONSOLIDATED EBITDA
----------------------------------- ---------------------------------
April 1, 2002 - June 30, 2002 $ 733,970
July 1, 2002 - September 30, 2002 $1,187,127
October 1, 2002 - December 31, 2002 $1,109,047
January 1, 2003 - March 31, 2003 $1,349,323
For each Fiscal Quarter commencing after March 31, 2003, Minimum
Consolidated EBITDA shall not be less than 85% of the projected
Consolidated EBITDA for such Fiscal Quarter as set forth in the business
plan covering such Fiscal Quarter, delivered pursuant to Section 5.03(d)
hereof.
(b) Minimum Fixed Charge Coverage Ratio. Not permit the ratio of (i)
Consolidated EBITDA to (ii) Consolidated Fixed Charges for any period set forth
below to be less than the correlative ratio indicated:
MINIMUM FIXED CHARGE
PERIOD COVERAGE RATIO
----------------------------------- ---------------------------------
April 1, 2002 - June 30, 2002 0.76:1.00
April 1, 2002 - September 30, 2002 1.01:1.00
April 1, 2002 - December 31, 2002 1.07:1.00
The ratio of (i) Consolidated EBITDA to (ii) Consolidated Fixed Charges
for any rolling four-Fiscal Quarter period ending after December 31, 2002 shall
not be less than 1.04:1.00.
(c) Maximum Capital Expenditures. Not permit Capital Expenditures
during any of the periods set forth below to exceed the correlative amounts
indicated:
PERIOD MAXIMUM CONSOLIDATED EXPENDITURES
----------------------------------- ---------------------------------
April 1, 2002 - June 30, 2002 $325,000
July 1, 2002 - September 30, 2002 $300,000
October 1, 2002 - December 31, 2002 $300,000
January 1, 2003 - March 31, 2003 $750,000
For any Fiscal Quarter commencing after March 31, 2003, Capital
Expenditures shall not exceed projected Capital Expenditures for such
Fiscal Quarter as set forth in the business plan covering such Fiscal
Quarter, delivered pursuant to Section5.03(d) hereof.
54
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events
("EVENTS OF DEFAULT") shall occur and be continuing:
(a) (i) the Borrower shall fail to pay any principal of any Term
Loan when the same becomes due and payable, or (ii) the Borrower shall fail to
pay any interest on any Term Loan or any Loan Party shall fail or make any other
payment under any Loan Document within two Business Days of when the same
becomes due and payable; or
(b) any representation or warranty made by any Loan Party (or any of
its officers) under or in connection with any Loan Document shall prove to have
been incorrect in any material respect when made; or
(c) any Loan Party shall fail to perform or observe any term,
covenant or agreement contained in Xxxxxxxx 0.00, 0.00(x), (x), (x), (x), (x)
and (r), 5.02, 5.03 or 5.04; or
(d) any Loan Party shall fail to perform or observe any other term,
covenant or agreement contained in any Loan Document on its part to be performed
or observed if such failure shall remain unremedied for 15 days after the
earlier of the date on which (A) a Responsible Officer of the Borrower becomes
aware of such failure or (B) written notice thereof shall have been given to the
Borrower by the Agent or any Lender Party; or
(e) any Loan Party or any of its Subsidiaries shall fail to pay any
principal of, premium or interest on or any other amount payable in respect of
any Debt that is outstanding in a principal amount of at least $250,000 either
individually or in the aggregate (but excluding Debt outstanding hereunder) of
such Loan Party or such Subsidiary (as the case may be), when the same becomes
due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue after the
applicable grace period, if any, specified in the agreement or instrument
relating to such Debt; or any other event shall occur or condition shall exist
under any agreement or instrument relating to any such Debt and shall continue
after the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to accelerate, or to
permit the acceleration of, the maturity of such Debt or otherwise to cause, or
to permit the holder thereof to cause, such Debt to mature, or any such Debt
shall be declared to be due and payable or required to be prepaid or redeemed
(other than by a regularly scheduled required prepayment or redemption),
purchased or defeased, in each case prior to the stated maturity thereof; or
(f) any Loan Party or any of its Subsidiaries shall generally not
pay its debts as such debts become due, or shall admit in writing its inability
to pay its debts generally, or shall make a general assignment for the benefit
of creditors, or any proceeding shall be instituted by or against any Loan Party
or any of its Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver,
55
trustee, or other similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted against it (but not
instituted by it) that is being diligently contested by it in good faith, either
such proceeding shall remain undismissed or unstayed for a period of 30 days or
any of the actions sought in such proceeding (including, without limitation, the
entry of an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or any substantial part of its
property) shall occur, or any Loan Party or any of its Subsidiaries shall take
any corporate action to authorize any of the actions set forth above in this
subsection (f); or
(g) any judgment or order for the payment of money in excess of
$250,000 (to the extent not fully paid or discharged) shall be rendered against
any Loan Party or any of its Subsidiaries and either (i) enforcement proceedings
shall have been commenced by any creditor upon such judgment or order or (ii)
there shall be any period of 10 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(h) any non-monetary judgment or order shall be rendered against any
Loan Party or any of its Subsidiaries that could reasonably be likely to have a
Material Adverse Effect, and there shall be any period of 10 consecutive days
during which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect; or
(i) any provision of any Loan Document after delivery thereof,
pursuant to Section 3.01 or 5.01(j) or (k), shall for any reason cease to be
valid and binding on or enforceable against any Loan Party to it, or any such
Loan Party shall so state in writing; or
(j) any Collateral Document after delivery thereof, pursuant to
Section 3.01 or 5.01(j) or (k), shall for any reason (other than pursuant to the
terms thereof) cease to create a valid and perfected first priority lien on and
security interest in the Collateral purported to be covered thereby, subject
only to the Liens permitted hereunder; or
(k) [Intentionally Omitted]
(l) any ERISA Event shall have occurred with respect to a Plan and
the sum (determined as of the date of occurrence of such ERISA Event) of the
Insufficiency of such Plan and the Insufficiency of any and all other Plans with
respect to which an ERISA Event shall have occurred and then exist (or the
liability of the Loan Parties and the ERISA Affiliates related to such ERISA
Event) exceeds $250,000; or
(m) any Loan Party or any ERISA Affiliate shall have been notified
by the sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability
to such Multiemployer Plan in an amount that, when aggregated with all other
amounts required to be paid to Multiemployer Plans by the Loan Parties and the
ERISA Affiliates as Withdrawal Liability (determined as of the date of such
notification), exceeds $250,000 or requires payments exceeding $50,000 per
annum; or
(n) any Loan Party or any ERISA Affiliate shall have been notified
by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of ERISA,
and as a result of such reorganization or
56
termination the aggregate annual contributions of the Loan Parties and the ERISA
Affiliates to all Multiemployer Plans that are then in reorganization or being
terminated have been or will be increased over the amounts contributed to such
Multiemployer Plans for the plan years of such Multiemployer Plans immediately
preceding the plan year in which such reorganization or termination occurs by an
amount exceeding $50,000; or
(o) there shall occur any Material Adverse Change (as determined
based on the financial conditions of the Borrower and its Subsidiaries as of the
Second Restatement Date); or
(p) the failure of the Charter Amendment to be effective and
properly filed with the Secretary of State of the State of Delaware within 120
days after the Second Restatement Date (unless such failure is the direct result
of any action by the Lenders (whether individually or collectively) or the
result of the failure of Lenders to take any action within their control to
facilitate approval of the Charter Amendment);
then, and in any such event, the Agent (i) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the
obligation of each Lender to maintain Term Loans to be terminated, whereupon the
same shall forthwith terminate, and (ii) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the Term
Loans, all interest thereon and all other amounts payable under this Agreement,
the Term Notes, if any, and the other Loan Documents to be forthwith due and
payable, whereupon the Term Loans, all such interest and all such amounts shall
become and be forthwith due and payable, without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived by the
Borrower; provided, however, that in the event of an actual or deemed entry of
an order for relief with respect to any Loan Party or any of its Subsidiaries
under the Bankruptcy Code, (x) the obligation of each Lender to maintain Term
Loans shall automatically be terminated and (y) the Term Loans, all such
interest and all such amounts shall automatically become and be due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Borrower.
ARTICLE VII
THE AGENT
SECTION 7.01. Authorization and Action. Each Lender Party hereby
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers and discretion under this Agreement and the other Loan
Documents as are delegated to the Agent by the terms hereof and thereof,
together with such powers and discretion as are reasonably incidental thereto.
As to any matters not expressly provided for by the Loan Documents (including,
without limitation, enforcement or collection of the Debt resulting from the
Term Loans), the Agent shall not be required to exercise any discretion or take
any action but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions shall be binding upon all Lender
Parties and all holders of Term Notes; provided, however, that the Agent shall
not be required to take any action that exposes the Agent to personal liability
or that
57
is contrary to this Agreement or applicable law. The Agent agrees to give to
each Lender Party prompt notice of each notice given to it by the Borrower
pursuant to the terms of this Agreement.
SECTION 7.02. Agent's Reliance, Etc. Neither the Agent nor any of
its directors, officers, agents or employees shall be liable for any action
taken or omitted to be taken by it or them under or in connection with the Loan
Documents, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the Agent: (a) may treat
the Lender that made any Term Loan as the holder of the Debt resulting therefrom
until the Agent receives and accepts an Assignment and Acceptance entered into
by such Lender, as assignor, and an Eligible Assignee, as assignee, as provided
in Section 8.07; (b) may consult with legal counsel (including counsel for any
Loan Party), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (c)
makes no warranty or representation to any Lender Party and shall not be
responsible to any Lender Party for any statements, warranties or
representations (whether written or oral) made in or in connection with the Loan
Documents; (d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of any
Loan Document on the part of any Loan Party or to inspect the property
(including the books and records) of any Loan Party; (e) shall not be
responsible to any Lender Party for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, any Loan Document or any other instrument or
document furnished pursuant thereto; and (f) shall incur no liability under or
in respect of any Loan Document by acting upon any notice, consent, certificate
or other instrument or writing (which may be by telegram, telecopy or telex)
believed by it to be genuine and signed or sent by the proper party or parties.
SECTION 7.03. BNP and Affiliates. With respect to the Term Loans
made by it and any Term Notes issued to it, BNP shall have the same rights and
powers under the Loan Documents as any other Lender Party and may exercise the
same as though it were not the Agent; and the term "Lender Party" or "Lenders
Parties" shall, unless otherwise expressly indicated, include BNP in its
individual capacity. BNP and its affiliates may accept deposits from, lend money
to, act as trustee under indentures of, accept investment banking engagements
from and generally engage in any kind of business with, any Loan Party, any of
its Subsidiaries and any Person who may do business with or own securities of
any Loan Party or any such Subsidiary, all as if BNP were not the Agent and
without any duty to account therefor to the Lender Parties.
SECTION 7.04. Lender Party Credit Decision. Each Lender Party
acknowledges that it has, independently and without reliance upon the Agent or
any other Lender Party and based on the financial statements referred to in
Section 4.01 and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender Party also acknowledges that it will, independently and
without reliance upon the Agent or any other Lender Party and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement.
58
SECTION 7.05. Indemnification. (a) Each Lender Party severally
agrees to indemnify each Agent (to the extent not promptly reimbursed by the
Borrower) from and against such Lender Party's ratable share (determined as
provided below) of any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever (including, without limitation, reasonable fees and
expenses of counsel) (collectively, the "INDEMNIFIED COSTS") that may be imposed
on, incurred by or asserted or awarded against the Agent in any way relating to
or arising out of the Loan Documents or any action taken or omitted by the Agent
under the Loan Documents; provided, however, that no Lender Party shall be
liable for any portion of such Indemnified Costs resulting from the Agent's
gross negligence or willful misconduct as found in a final, non-appealable
judgment by a court of competent jurisdiction. Without limitation of the
foregoing, each Lender Party agrees to reimburse the Agent promptly upon demand
for its ratable share of any costs and expenses (including, without limitation,
fees and expenses of counsel) payable by the Borrower under Section 8.04, to the
extent that the Agent is not promptly reimbursed for such costs and expenses by
the Borrower. For purposes of this Section 7.05, the Lender Parties' respective
ratable shares of any amount shall be determined, at any time, according to the
sum of the aggregate principal amount of the Term Loans outstanding at such time
and owing to the respective Lender Parties. In the case of any investigation,
litigation or proceeding giving rise to any Indemnified Costs, this Section 7.05
applies whether any such investigation, litigation or proceeding is brought by
the Agent, any Lender, any other Lender Party or a third party. The failure of
any Lender Party to reimburse the Agent promptly upon demand for its ratable
share of any amount required to be paid by the Lender Party to the Agent as
provided herein shall not relieve any other Lender Party of its obligation
hereunder to reimburse the Agent for its ratable share of such amount, but no
Lender Party shall be responsible for the failure of any other Lender Party to
reimburse the Agent for such other Lender Party's ratable share of such amount.
(b) Without prejudice to the survival of any other agreement of any
Lender Party hereunder, the agreement and obligations of each Lender Party
contained in this Section 7.05 shall survive the payment in full of principal,
interest and all other amounts payable hereunder and under the other Loan
Documents.
SECTION 7.06. Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Lender Parties and the Borrower, and may be
removed at any time with or without cause by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Agent or Agents, as the case may be, with the consent of the Borrower,
so long as no Default has occurred and is continuing, which consent shall not be
unreasonably withheld. If no such successor Agent shall have been so appointed
by the Required Lenders, and shall have accepted such appointment, within 30
days after such retiring Agent's giving of notice of resignation or the Required
Lenders' removal of such retiring Agent, then such retiring Agent may, on behalf
of the Lender Parties, appoint a successor Agent, which shall be a commercial
bank organized under the laws of the United States or of any State thereof and
having a combined capital and surplus of at least $250,000,000. Upon the
acceptance of any appointment as Agent, hereunder by a successor Agent, and upon
the execution and filing or recording of such financing statements, or
amendments thereto, and such amendments or supplements to the mortgages, if any,
and such other instruments or notices, as may be necessary or desirable, or as
the Required Lenders may
59
request, in order to continue the perfection of the Liens granted or purported
to be granted by the Collateral Documents, such successor Agent shall succeed to
and become vested with the rights, powers, discretion, privileges and duties of
such retiring Agent, and such retiring Agent shall be discharged from its duties
and obligations under the Loan Documents. If within 45 days after written notice
is given of such retiring Agent's resignation or removal under this Section 7.06
no successor Agent, shall have been appointed and shall have accepted such
appointment, then on such 45th day (i) such retiring Agent's resignation or
removal shall become effective, (ii) such retiring Agent shall thereupon be
discharged from its duties and obligations under the Loan Documents and (iii)
the Required Lenders shall thereafter perform all duties of such retiring Agent
under the Loan Documents until such time, if any, as the Required Lenders
appoint a successor Agent, as provided above. After any retiring Agent's
resignation or removal hereunder as Agent, shall become effective, the
provisions of this Article VII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent, under this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or any Notes or any other Loan Document, nor consent
to any departure by the Borrower or any other Loan Party therefrom, shall in any
event be effective unless the same shall be in writing and signed (or, in the
case of the Collateral Documents, consented to) by the Required Lenders, and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given; provided, however, that (i) no
amendment, waiver or consent shall, unless in writing and signed by all of the
Lenders, do any of the following at any time: (A) waive any of the conditions
specified in Section 3.01, (B) change the percentage of the aggregate unpaid
principal amount of the Term Loans that, in each case, shall be required for the
Lenders or any of them to take any action hereunder, (C) release all or
substantially all of the Collateral in any transaction or series of related
transactions or permit the creation, incurrence, assumption or existence of any
Lien on all or substantially all of the Collateral in any transaction or series
of related transactions to secure any Obligations, other than Obligations owing
to the Agent and Lenders under the Loan Documents, (D) amend this Section 8.01
or (E) release any Guarantor from its obligations under the Loan Documents
(except in connection with a transaction permitted under Section 5.02(e)); and
(ii) no amendment, waiver or consent shall, unless in writing and signed by the
Required Lenders and each Lender that has any Term Loan if affected by such
amendment, waiver or consent (A) reduce the principal of, or interest on, the
Term Loans payable to such Lender or any fees or other amounts payable hereunder
to such Lender, (B) postpone any date fixed for any payment of principal of, or
interest on, the Obligations payable to such Lender or any fees or other amounts
payable hereunder to such Lender or (C) change the order of application of any
prepayment set forth in Section 2.06 in any manner that materially affects such
Lender; provided further, however, that no amendment, waiver or consent shall,
unless in writing and signed by the Agent in addition to the Lenders required
above to take such action, affect the rights or duties of the Agent under this
Agreement or the other Loan Documents.
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SECTION 8.02. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy or
telex communication) and mailed, telegraphed, telecopied, telexed or delivered
by an overnight courier of nationally recognized standing, if to the Borrower or
any other Loan Party, at the address of the Borrower at TeleSpectrum Worldwide
Inc., 000 Xxxxx Xxxxx Xxxx, Xxxx xx Xxxxxxx, XX 00000, Attention: Chief
Financial Officer, telecopier number (000) 000-0000; if to any Lender, at its
Domestic Lending Office specified opposite its name on Schedule I hereto; if to
any other Lender Party, at its Domestic Lending Office specified in the
Assignment and Acceptance pursuant to which it became a Lender Party; and if to
the Agent, at its address at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxx Xxxxxxxxx, telecopier number (000) 000-0000; or, as to each
party, at such other address as shall be designated by such party in a written
notice to the other parties. All such notices and communications shall, when
mailed, telegraphed, telecopied, telexed or sent by courier, be effective when
deposited in the mails, delivered to the telegraph company, transmitted by
telecopier, confirmed by telex answerback or delivered to the overnight courier,
respectively, except that notices and communications to the Agent pursuant to
Articles II, III or VIII shall not be effective until received by the Agent.
Delivery by telecopier of an executed counterpart of any amendment or waiver of
any provision of this Agreement or the Notes or of any Exhibit hereto to be
executed and delivered hereunder shall be effective as delivery of a manually
executed counterpart thereof.
SECTION 8.03. No Waiver; Remedies. No failure on the part of any
Lender Party or the Agent to exercise, and no delay in exercising, any right
hereunder or under any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. Costs and Expenses. (a) The Borrower agrees to pay on
demand (i) all costs and expenses of the Agent and each Lender in connection
with the negotiation, preparation, execution, delivery, administration,
modification and amendment of this Agreement and the Loan Documents (including,
without limitation, (A) all due diligence, collateral review, syndication,
transportation, computer, duplication, appraisal, audit, insurance, consultant,
search, filing and recording fees and expenses and (B) the reasonable fees and
expenses of counsel for the Agent and each Lender and financial advisers for the
Agent, with respect to advising the Agent as to its rights and responsibilities,
or the perfection, protection or preservation of rights or interests, under the
Loan Documents, with respect to negotiations with any Loan Party or with other
creditors of any Loan Party or any of its Subsidiaries arising out of any
Default or any events or circumstances that may give rise to a Default, and with
respect to presenting claims in or otherwise participating in or monitoring any
bankruptcy, insolvency or other similar proceeding involving creditors' rights
generally and any proceeding ancillary thereto), and (ii) all costs and expenses
of the Agent and Lender in connection with the enforcement of the Loan
Documents, whether in any action, suit or litigation, any bankruptcy, insolvency
or other similar proceeding affecting creditors' rights generally (including,
without limitation, the reasonable fees and expenses of counsel for the Agent
and each Lender Party and any financial advisor for the Agent and each Lender
Party with respect thereto).
(b) The Borrower agrees to indemnify and hold harmless the Agent,
each Lender Party and each of their Affiliates and their officers, directors,
employees, agents and
61
advisors (each an "INDEMNIFIED PARTY") from and against any and all Indemnified
Costs that may be incurred by, imposed on or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of the preparation for a defense of any investigation, litigation or
proceeding arising out of, related to or in connection with (i) the Term Loan
Facility, the actual or proposed use of the proceeds of the Term Loans, the Loan
Documents or any of the transactions contemplated thereby, including, without
limitation, any acquisition or proposed acquisition by the Borrower or any of
its Subsidiaries or Affiliates of all or any portion of the stock or debt
securities or substantially all the assets of IDRC or any of its Subsidiaries,
or (ii) the actual or alleged presence of Hazardous Materials on any property of
any Loan Party or any of its Subsidiaries or any Environmental Action relating
in any way to any Loan Party or any of its Subsidiaries, except to the extent
such Indemnified Costs are found in a final, non-appealable judgment by a court
of competent jurisdiction to have resulted from such Indemnified Party's gross
negligence or willful misconduct. In the case of an investigation, litigation or
other proceeding to which the indemnity in this Section 8.04(b) applies, such
indemnity shall be effective whether or not such investigation, litigation or
proceeding is brought by any Loan Party, its directors, shareholders or
creditors or an Indemnified Party or any Indemnified Party is otherwise a party
thereto and whether or not the transactions contemplated hereby are consummated.
The Borrower also agrees not to assert any claim against the Agent, any Lender
Party or any of their Affiliates, or any of their respective officers,
directors, employees, attorneys and agents, on any theory of liability, for
special, indirect, consequential or punitive damages arising out of or otherwise
relating to the Facilities, the actual or proposed use of the proceeds of the
Term Loans, the Loan Documents or any of the transactions contemplated thereby.
(c) [Intentionally Omitted]
(d) If any Loan Party fails to pay when due any costs, expenses or
other amounts payable by it under any Loan Document, including, without
limitation, fees and expenses of counsel and indemnities, such amount may be
paid on behalf of such Loan Party by the Agent or any Lender Party, in its sole
discretion.
(e) Without prejudice to the survival of any other agreement of any
Loan Party hereunder or under any other Loan Document, the agreements and
obligations of the Borrower contained in Sections 2.10 and 2.12 and this Section
8.04 shall survive the payment in full of principal, interest and all other
amounts payable hereunder and under any of the other Loan Documents.
SECTION 8.05. Right of Set-off. Upon (a) the occurrence and during
the continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 6.01 to authorize the Agent to
declare the Term Loans due and payable pursuant to the provisions of Section
6.01, each Lender Party and each of its respective Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and otherwise apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time owing by such Lender Party or such Affiliate to or for the credit or
the account of the Borrower against any and all of the Obligations of the
Borrower now or hereafter existing under this Agreement and the Term Note or
Term Notes (if any) held by such Lender Party, irrespective of whether such
Lender
62
Party shall have made any demand under this Agreement or such Term Note or Term
Notes and although such obligations may be unmatured. Each Lender Party agrees
promptly to notify the Borrower after any such set-off and application;
provided, however, that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Lender Party and
its respective Affiliates under this Section are in addition to other rights and
remedies (including, without limitation, other rights of set-off) that such
Lender Party and its respective Affiliates may have.
SECTION 8.06. Binding Effect. This Agreement shall become effective
when it shall have been executed by the Borrower and the Agent and when the
Agent shall have been notified by each Lender that such Lender has executed it
and thereafter shall be binding upon and inure to the benefit of the Borrower,
the Agent and each Lender Party and their respective successors and assigns,
except that the Borrower shall not have the right to assign its rights hereunder
or any interest herein without the prior written consent of the Lender Parties.
SECTION 8.07. Assignments and Participations. (a) Each Lender may
assign to one or more Eligible Assignees all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of the Term Loans owing to it and any Term Note or Term Notes held by
it); provided, however, that (i) except in the case of an assignment to a Person
that, immediately prior to such assignment, was a Lender, an Affiliate of any
Lender, or an Approved Fund of any Lender, or an assignment of all of a Lender's
rights and obligations under the Term Loan Facility, the aggregate amount of the
Term Loans being assigned to such Eligible Assignee pursuant to such assignment
(determined as of the date of the Assignment and Acceptance with respect to such
assignment) shall in no event be less than $1,000,000 (or such lesser amount as
may be agreed by the Agent, such agreement not to be unreasonably withheld) and
shall be in an integral multiple of $500,000, (ii) such assignment (other than
an assignment to an Affiliate) shall be accompanied by an assignment by such
Lender and/or its Affiliates of the Percentage Interest of the Series A
Preferred Stock, Series B Convertible Preferred Stock (if any) and any other
Equity Interest in the Borrower then held by such Lender and its Affiliates,
(iii) each such assignment shall be to an Eligible Assignee, and (iv) the
parties to each such assignment shall execute and deliver to the Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance, together
with any Term Note or Term Notes subject to such assignment and a processing and
recordation fee of $3,500. As used herein, "Percentage Interest" shall mean (x)
the aggregate principal amount of the Term Loans being assigned divided by (y)
the aggregate principal amount of all Term Loans held by the assigning Lender
and its Affiliates.
(b) Upon such execution, delivery, acceptance and recording, from
and after the effective date specified in such Assignment and Acceptance, (x)
the assignee thereunder shall be a party hereto and, to the extent that rights
and obligations hereunder have been assigned to it pursuant to such Assignment
and Acceptance, have the rights and obligations of a Lender hereunder, and (y)
the Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this Agreement,
such Lender shall cease to be a party hereto).
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(c) By executing and delivering an Assignment and Acceptance, each
Lender assignor thereunder and each assignee thereunder confirm to and agree
with each other and the other parties thereto and hereto as follows: (i) other
than as provided in such Assignment and Acceptance, such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in, or in connection with, this
Agreement or any other Loan Document or the execution, legality, validity,
enforceability, efficiency or value of or genuineness of the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, this Agreement or any other Loan Document or any
other instrument or document furnished pursuant hereto or thereto; (ii) such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or any
other Loan Party or the performance or observance by any Loan Party of any of
its obligations under any Loan Document or any other instrument or document
furnished pursuant thereto; (iii) such assignee confirms that it has received a
copy of this Agreement, together with copies of the financial statements
referred to in Section 4.01 and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon any Agent, such assigning Lender 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 decisions in taking or not taking action
under this Agreement; (v) such assignee confirms that it is an Eligible
Assignee; (vi) such assignee appoints and authorizes each of the Agent to take
such action as agent on its behalf and to exercise such powers and discretion
under the Loan Documents as are delegated to such Agent by the terms hereof,
together with such powers and discretion as are reasonably incidental thereto;
and (vii) such assignee agrees that it perform in accordance with their terms
all of the obligations which by the terms of this Agreement are required to be
performed by it as a Lender.
(d) The Agent shall maintain at its address referred to in Section
8.02 a copy of each Assignment and Acceptance delivered to and accepted by it,
and a register for the recordation of the names and addresses of the Lender
Parties and principal amount of the Term Loans owing to, each Lender from time
to time (the "REGISTER"). The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and the Borrower, the Agent and
the Lender Parties may treat each Person whose name is recorded in the Register
as a Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee, together with any Term Note or Term Notes
requested by the Assignee subject to such assignment, the Agent shall, if such
Assignment and Acceptance has been completed and is in substantially the form of
Exhibit C hereto, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the Borrower.
(f) Each Lender may sell participations in or to all or a portion of
its rights and obligations under this Agreement (including, without limitation,
all or a portion of the Term Loans owing to it, and any Term Note or Term Notes
held by it), to any Person other than any
64
Loan Party or any of its Subsidiaries or Affiliates; provided, however, that (i)
such Lender's obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) such Lender shall remain the holder of
such Term Loans and any such Term Note for all purposes of this Agreement, (iv)
the Borrower, 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 (v) no participant under any such
participation shall have any right to approve any amendment or waiver of any
provision of any Loan Document, or any consent to any departure by any Loan
Party therefrom, except to the extent that such amendment, waiver or consent
would reduce the principal of, or interest on, the Term Loans or any fees or
other amounts payable hereunder, in each case to the extent subject to such
participation, postpone any date fixed for any payment of principal of, or
interest on, the Term Loans or any fees or other amounts payable hereunder, in
each case to the extent subject to such participation, or release all or
substantially all of the Collateral.
(g) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower or any Loan Party
furnished to such Lender by or on behalf of the Borrower.
(h) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time create a security, interest in all or any portion of
its rights under this Agreement (including, without limitation, the Term Loans
owing to it and any Term Note or Term Notes held by it) in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of Governors of the
Federal Reserve System or, if such Lender is an Approved Fund, to the trustee of
such Approved Fund solely to the extent required by, and in accordance with, the
indenture and other constituting documents of such Approved Fund.
SECTION 8.08. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 8.09. [Intentionally Omitted]
SECTION 8.10. Jurisdiction, Etc. (a) Each of the parties hereto
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any New York State court or federal court of
the United States of America sitting in New York City, and any appellate court
from any jurisdiction thereof, in any action or proceeding rising out of or
relating to this Agreement or any of the other Loan Documents to which it is a
party, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in any such
New York State court or, to the extent permitted by law, in such federal court.
Each of the parties hereto agrees that a final Judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions, by
65
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that any party may otherwise have to bring any
action or proceeding relating to this Agreement or any of the other Loan
Documents in the courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or any of the
other Loan Documents to which it is a party in any New York State or federal
court. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.
SECTION 8.11. Governing Law. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 8.12. Judgment. (a) Rate of Exchange. If, for the purpose of
obtaining judgment in any court, it is necessary to convert a sum due hereunder
or under any other Loan Document in another currency into Dollars, the parties
hereto agree, to the fullest extent that they may effectively do so, that the
rate of exchange used shall be that at which, in accordance with normal banking
procedures, the Agent could purchase such other currency with Dollars in New
York City, New York, at the close of business on the Business Day immediately
preceding the day on which final judgment is given, together with any premiums
and costs of exchange payable in connection with such purchase.
(b) Currency Indemnity. The obligation of the Borrower in respect of
any sum due from it to the Agent or any Lender hereunder or under any other Loan
Document shall, notwithstanding any judgment in a currency other than Dollars,
be discharged only to the extent that on the Business Day next succeeding
receipt by the Agent or such Lender of any sum adjudged to be so due in such
other currency, the Agent or such Lender, as the case may be, may, in accordance
with normal banking procedures, purchase Dollars with such other currency. If
the Dollars so purchased are less than the sum originally due to the Agent or
such Lender in Dollars, the Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Agent or such Lender against
such loss, and if the Dollars so purchased exceed the sum originally due to the
Agent or any Lender in Dollars, the Agent or such Lender agrees to remit to such
Borrower such excess.
SECTION 8.13. Waiver of Jury Trial. Each of the Loan Parties, the
Agent and the Lender Parties irrevocably waives all right to trial by Jury in
any action, proceeding or counterclaim (whether based on contract, tort or
otherwise) arising out of or relating to any of the Loan Documents, the Term
Loans or the actions of the Agent or any Lender Party in the negotiation,
administration, performance or enforcement thereof by their respective officers
thereunto duly authorized, as of the date first above written.
SECTION 8.14. Confidentiality. The Agent and each Lender shall hold
all non-public information obtained pursuant to the requirements of this
Agreement which has been identified as confidential by the Borrower in
accordance with such Lender's customary procedures for handling confidential
information of this nature and in accordance with safe and
66
sound banking practices, it being understood and agreed by the Borrower that in
any event a Lender may make disclosures to Affiliates of such Lender or
disclosures reasonably required by any bona fide assignee, transferee or
participant or prospective assignee, transferee or participant in connection
with the contemplated assignment or transfer by such Lender of any Loans or any
participations therein or disclosures required or requested by any governmental
agency or representative thereof or pursuant to legal process; provided that,
unless specifically prohibited by applicable law or court order, each Lender
shall notify the Borrower of any request by any governmental agency or
representative thereof (other than any such request in connection with any
examination of the financial condition of such Lender by such governmental
agency) for disclosure of any such non-public information prior to disclosure of
such information; and provided, further that in no event shall any Lender be
obligated or required to return any materials furnished by the Borrower or any
of its Subsidiaries.
SECTION 8.15. Release and Waiver. The Borrower and each of its
Subsidiaries (collectively, the "RELEASORS") hereby releases, remises, acquits
and forever discharges Agent, each Lender, their Affiliates, and each of their
respective employees, agents representatives, consultants, attorneys,
fiduciaries, servants, officers, directors, partners, predecessors, successors,
participants and assigns, (all of the foregoing hereinafter called the "RELEASED
PARTIES"), from any and all actions and causes of action, judgments, executions,
suits, debts, claims, demands, liabilities, obligations, setoffs, recoupments,
counterclaims, defenses, damages and expenses of any and every character, known
or unknown, suspected or unsuspected, direct and/or indirect, at law or in
equity, of whatsoever kind or nature, whether heretofore or hereafter arising,
for or because of any matter or things done, omitted or suffered to be done by
any of the Released Parties prior to and including the date of execution hereof,
and in any way directly or indirectly arising out of or in any way connected to
this Agreement, the Existing Credit Agreement and the agreements entered into in
connection therewith, the other Loan Documents or any of the Related Documents
(all of the foregoing hereinafter called the "RELEASED MATTERS"). Each Releasor
acknowledges that the agreements in this Section 8.15 are intended to be in full
satisfaction of all or any alleged injuries or damages arising in connection
with the Released Matters and constitute a complete waiver of any right of
setoff or recoupment, counterclaim or defense of any nature whatsoever which
arose prior to the date hereof to payment or performance of the Obligations.
Each Releasor represents and warrants that it has no knowledge of any claim by
it against the Released Parties or of any facts, or acts or omissions of the
Released Parties which on the date hereof would be the basis of a claim by the
Releasors against the Released Parties which is not released hereby. Each
Releasor represents and warrants that it has not purported to transfer, assign,
pledge or otherwise convey any of its right, title or interest in any Released
Matter to any other person or entity and that the foregoing constitutes a full
and complete release of all Released Matters. Releasors have granted this
release freely, and voluntarily and without duress.
The Borrower and its Subsidiaries for itself and any successor
(including any trustee or debtor in possession in a case under the Bankruptcy
Code) hereby knowingly, voluntarily, intentionally and irrevocably waive any
right which it may have upon the commencement of a case under the Bankruptcy
Code to object to or otherwise seek to disallow or subordinate any of the
Obligations of any Loan Party under the Loan Documents.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
TELESPECTRUM WORLDWIDE INC.
By: /s/ Xxxx Xxxxxxxxxxx
Name: Xxxx Xxxxxxxxxxx
Title: Chief Financial Officer
S-1
BNP PARIBAS (F/K/A BANQUE NATIONALE DE
PARIS), as Administrative Agent, Collateral Agent
and a Lender
By: /s/ Xxx Xxxxxxxxx
Name: Xxx Xxxxxxxxx
Title: Director
By: /s/ Xxxxxx X. Xxxxx, Xx.
Name: Xxxxxx X. Xxxxx, Xx.
Title: Managing Director
S-2
ENDEAVOR, LLC
by its manager, PPM America, Inc.
as a Lender
/s/ Xxxxxx Xxxxxx
By:_______________________________________
Name: Xxxxxx Xxxxxx
Title: Vice President
S-3
FLEET NATIONAL BANK (F/K/A BANKBOSTON,
N.A.), as a Lender
/s/ G. Xxxxxxxxxxx Xxxxxx
By:_______________________________________
Name: G. Xxxxxxxxxxx Xxxxxx
Title: Vice President
S-4
XXX XXXXXX PRIME RATE INCOME
TRUST, as a Lender
By: Xxx Xxxxxx Investment Advisory Corp.
/s/ Xxxxxxxxx Xxxxxxxx
By:_______________________________________
Name: Xxxxxxxxx Xxxxxxxx
Title: Vice President
S-5
XXX XXXXXX SENIOR FLOATING RATE
FUND, as a Lender
By: Xxx Xxxxxx Investment Advisory Corp.
/s/ Xxxxxx X. Xxxxxx
By:_______________________________________
Name: Xxxxxx X. Xxxxxx
Title: Executive Director
S-6
XXX XXXXXX SENIOR INCOME TRUST,
as a Lender
By: Xxx Xxxxxx Investment Advisory Corp.
By: /s/ Xxxx Xxxxx
------------------------------------
Name: Xxxx Xxxxx
Title: Vice President
S-7
TBH-I, L.P., as a Lender
By:/s/ Xxxx X. Xxxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Authorized Signatory
S-8
XXXXX FARGO BANK, N.A., as a Lender
By:/s/ Xxxxxx Xxxxx
------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President/Principal
S-9
FIRST SOURCE LOAN OBLIGATIONS TRUST,
as a Lender
By: First Source Financial, Inc., its Servicer and
Administrator
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
S-10
ENDURANCE CLO I, LTD, as a Lender
By: ING Capital Advisors, LLC
As Portfolio Manager
By: /s/ Xxxxx Xxxx
_______________________________________
Name: Xxxxx Xxxx
Title: Senior Vice President
S-11
KZH ING-2 LLC, as a Lender
By: /s/ Xxxxx Xxx
_______________________________________
Name: Xxxxx Xxx
Title: Authorized Agent
S-12
KZH ING-3 LLC, as a Lender
By: /s/ Xxxxx Xxx
_______________________________________
Name: Xxxxx Xxx
Title: Authorized Agent
S-13
ARCHIMEDES FUNDING, L.L.C. , as a Lender
By: ING Capital Advisors, LLC,
as Collateral Manager
By: /s/ Xxxxx Xxxx
_______________________________________
Name: Xxxxx Xxxx
Title: Senior Vice President
S-14
ARCHIMEDES FUNDING II, L.L.C., as a
Lender
By: ING Capital Advisors, LLC,
as Collateral Manager
By: /s/ Xxxxx Xxxx
_______________________________________
Name: Xxxxx Xxxx
Title: Senior Vice President
S-15
FIRST DOMINION FUNDING III, as a Lender
By: /s/ Xxxxxx Xxxxxxx
_______________________________________
Name: Xxxxxx Xxxxxxx
Title: Authorized Signatory
S-16
SCHEDULE I
EXPOSURES, COMMITMENTS AND DOMESTIC LENDING OFFICES
TERM
NAME OF LENDER LOAN EXPOSURE DOMESTIC LENDING OFFICE
-------------- ------------- -----------------------
BNP Paribas $3,380,554.53 Credit Matters
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxx Xxxxxxxxx
Operations
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxx Xxxxxxx
Endeavor, LLC $3,123,579.38 Credit Matters:
C/O PPMAmerica
000 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxxx Xxxxxx
Operations:
C/O PPMAmerica
000 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxx Xxxx
Fleet National Bank $2,677,354.47 Credit Matters
X/X Xxxxx Xxxxxxxx Xxxx
000 Xxxx Xxxxxx
Mail Stop: CT EH 40221A
Xxxxxxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
Attn: G. Xxxxxxxxxxx Xxxxxx
Operations
Commercial Loan Services
000 Xxxxxxxxx Xxxx
Xxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxx Xxxxx
1
TERM
NAME OF LENDER LOAN EXPOSURE DOMESTIC LENDING OFFICE
-------------- ------------- -----------------------
First Dominion Funding III $1,955,518.28 Credit Matters
C/O First Dominion Capital, L.L.C.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxxxx Xxxxxxxxxx
Copy to:
Xxxxxxx Xxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Operations
Commercial Loan Services
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxxx Xxxxxxxx
Copy to:
Xxxxxx Xxxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
First Source Loan Obligations $1,784,903.19 Credit Matters
Trust
0000 X. Xxxx Xxxx
Xxxxxxx Xxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxxxx Xxxx
TBH-I, L.P. $1,784,903.19 000 Xxxxx Xxxxxxx Xx.
Xxxxx 0000
Xxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxxx, Xx.
Xxx Xxxxxx Prime Rate Income $1,869,163.33 Credit Matters
Xxx Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000/41
Attn: Xxxxxx Xxxxxx
Operations
Xxx Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000/41
Attn: Xxxxx Xxxxxxx
and
State Street Bank & Trust Corporate
Trust Department
X.X. Xxx 000
Xxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000/5367
Attn: Xxx Chiebnik
2
TERM
NAME OF LENDER LOAN EXPOSURE DOMESTIC LENDING OFFICE
-------------- ------------- -----------------------
Xxx Xxxxxx Senior Floating $1,869,163.33 Credit Matters
Rate Fund
Xxx Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000/41
Attn: Xxxxxx Xxxxxx
Operations
Xxx Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000/41
Attn: Xxxxx Xxxxxxx
and
State Street Bank & Trust Corporate
Trust Department
X.X. Xxx 000
Xxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000/5367
Attn: Xxx Chiebnik
Xxx Xxxxxx Senior Income Trust $1,869,163.33 Credit Matters
Xxx Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000/41
Attn: Xxxxxx Xxxxxx
Operations
Xxx Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000/41
Attn: Xxxxx Xxxxxxx
and
State Street Bank & Trust Corporate
Trust Department
X.X. Xxx 000
Xxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000/5367
Attn: Xxx Chiebnik
Xxxxx Fargo Bank, N.A. $1,033,726.21 Credit Matters
Loan Adjustment Group
000 X. Xxxxx Xxx., Xxx. 000
Xxx Xxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxx Xxxxx
Operations
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxx Xxxxxxxx
3
TERM
NAME OF LENDER LOAN EXPOSURE DOMESTIC LENDING OFFICE
-------------- ------------- -----------------------
Archimedes Funding, L.L.C. $977,759.74 Credit Matters
C/O ING Capital Advisors LLC
000 X. Xxxxx Xxx., Xxx. 0000
Xxx Xxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxx Xxxxxxxx
Operations
000 X. Xxxxx Xxx., Xxx. 0000
Xxx Xxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxx Funding II, L.L.C. $718,691.53 Credit Matters
C/O ING Capital Advisors LLC
000 X. Xxxxx Xxx., Xxx. 0000
Xxx Xxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxx Xxxxxxxx
Operations
000 X. Xxxxx Xxx., Xxx. 0000
Xxx Xxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxxx Xxxxxxx Xxxxxx
Endurance CLO, Ltd $586,656.18 Credit Matters
C/O ING Capital Advisors LLC
000 X. Xxxxx Xxx., Xxx. 0000
Xxx Xxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxx Xxxxxxxx
Operations
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxxxxx Xxxxxx
KZH ING-2 L.L.C. $977,759.74 Credit Matters
C/O ING Capital Advisors LLC
000 X. Xxxxx Xxx., Xxx. 0000
Xxx Xxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxx Xxxxxxxx
Operations
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxxxxx Xxxxxx
4
TERM
NAME OF LENDER LOAN EXPOSURE DOMESTIC LENDING OFFICE
-------------- ------------- -----------------------
KZH ING-3 L.L.C. $391,103.57 Credit Matters
C/O ING Capital Advisors LLC
000 X. Xxxxx Xxx., Xxx. 0000
Xxx Xxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxx Xxxxxxxx
Operations
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxxxxx Xxxxxx
5
SCHEDULE IA
LENDERS' PRO RATA SHARES OF THE FACILITIES
Lender Pro Rata Share of the Facilities
------ --------------------------------
BNP Paribas 13.522218130%
Endeavor LLC 12.494317529%
Fleet National Bank 10.709417864%
First Dominion Funding III 7.822073130%
First Source Loan Obligations Trust 7.139612762%
TBH-I, L.P. 7.139612762%
Xxx Xxxxxx Prime Rate Income 7.476653320%
Xxx Xxxxxx Senior Floating Rate Fund 7.476653320%
Xxx Xxxxxx Senior Income Trust 7.476653320%
Xxxxx Fargo Bank, N.A. 4.134904856%
Archimedes Funding, L.L.C. 3.911038968%
Archimedes Funding II, LTD. 2.874766102%
Endurance CLO, Ltd 2.346624704%
KZH ING-2 L.L.C. 3.911038968%
KZH ING-3 L.L.C. 1.564414264%
