15
Exhibit 28.1
Page 1 of 93
SECOND AMENDED AND RESTATED REVOLVING CREDIT,
TERM LOAN AND SECURITY AGREEMENT
THE BANK OF NEW YORK
(AS LENDER AND AS AGENT)
AND
THE VARIOUS FINANCIAL INSTITUTIONS THAT BECOME LENDERS HEREUNDER
(LENDERS)
WITH
GENERAL DATACOMM INDUSTRIES, INC.
GENERAL DATACOMM, INC.
GDC NAUGATUCK, INC.
DATACOMM SERVICE CORPORATION
GDC REALTY, INC.
GENERAL DATACOMM INTERNATIONAL CORP.
GENERAL DATACOMM SYSTEMS, INC.
(BORROWERS)
As of June 1, 1994
SECOND AMENDED AND RESTATED
REVOLVING CREDIT, TERM LOAN
AND
SECURITY AGREEMENT
<PAGE 16>
Exhibit 28.1
Page 2 of 93
Second Amended and Restated Revolving Credit, Term Loan
and Security Agreement dated as of June 1, 1994 among GENERAL
DATACOMM INDUSTRIES, INC., a corporation organized under the laws
of the State of Delaware, GENERAL DATACOMM, INC., a corporation
organized under the laws of the State of Delaware, GDC NAUGATUCK,
INC., a corporation organized under the laws of the State of
Delaware, DATACOMM SERVICE CORPORATION, a corporation organized
under the laws of the State of Delaware, GDC REALTY, INC., a
corporation organized under the laws of the State of Texas, GENERAL
DATACOMM INTERNATIONAL CORP., a corporation organized under the
laws of the State of Delaware, GENERAL DATACOMM SYSTEMS, INC., a
corporation organized under the laws of the State of Delaware (each
a "Borrower" and jointly and severally, the "Borrowers"), the
undersigned financial institutions and the various financial
institutions which in accordance with Section 16.3 become Lenders
hereunder (collectively, "Lenders") and THE BANK OF NEW YORK
("BNY"), a New York banking corporation, as agent for Lenders (BNY
in such capacity, "Agent").
BACKGROUND
Borrowers, Lenders and Agent are parties to an Amended
and Restated Revolving Credit and Security Agreement dated as of
November 30, 1993, as amended, modified or supplemented from time
to time (the "Original Loan Agreement").
Borrowers have requested that Lenders make a term loan
facility available to GDC and Lenders are willing to provide such
facility on the terms and conditions set forth herein.
By execution of this Agreement, Borrowers and Lenders
wish to amend and restate the Original Loan Agreement on the terms
and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants
and undertakings herein contained, the parties hereto hereby agree
as follows:
A. AMENDMENT AND RESTATEMENT
As of the date of this Agreement, the terms,
conditions, covenants, agreements, representations and warranties
contained in the Original Loan Agreement shall be deemed amended
and restated in their entirety as follows and the Original Loan
Agreement shall be consolidated with and into and superseded by
this Agreement; provided, however, that nothing contained in this
Agreement shall impair, limit or affect the Liens heretofore
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Exhibit 28.1
Page 3 of 93
granted, pledged and/or assigned as security for Borrowers'
obligations under the Original Loan Agreement.
I. DEFINITIONS.
1.1. Accounting Terms. As used in this Agreement
or any certificate, report or other document made or delivered
pursuant to this Agreement, accounting terms not defined in Section
1.2 or elsewhere in this Agreement and accounting terms partly
defined in Section 1.2 to the extent not defined, shall have the
respective meanings given to them under GAAP as of the Closing
Date.
1.2. General Terms. For purposes of this
Agreement the following terms shall have the following meanings:
"Acceptable Bill-and-Hold Sales" shall mean those
sales made by any Borrower to a Customer on a bill-and-hold basis
pursuant to a written agreement between such Borrower and such
Customer where such Customer has instructed such Borrower to hold
the goods subject thereto and such Customer has not informed such
Borrower that it will not accept shipment of such goods.
"Advances" shall mean and include the Revolving
Advances, the issuance of Letters of Credit and the Term Loan.
"Advance Rates" shall have the meaning set forth in
Section 2.1(a).
"Affiliate" of any Person shall mean (a) any Person
(other than a Subsidiary) which, directly or indirectly, is in
control of, is controlled by, or is under common control with such
Person, or (b) any Person who is a director or officer (i) of such
Person, (ii) of any Subsidiary of such Person or (iii) of any
Person described in clause (a) above. For purposes of this
definition, control of a Person shall mean the power, direct or
indirect, (x) to vote 20% or more of the securities having ordinary
voting power for the election of directors of such Person, or (y)
to direct or cause the direction of the management and policies of
such Person whether by contract or otherwise.
"Agent" shall have the meaning set forth in the
introductory paragraph to this Agreement and any successor Agent
appointed in accordance with Section 14.3.
"Alternate Base Rate" shall mean, for any day, a
rate per annum equal to the higher of (i) the Prime Rate in effect
on such day and (ii) the Federal Funds Rate in effect on such day
plus 1/2 of 1%.
"Alternate Currency" means Canadian Dollars and
Sterling.
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Exhibit 28.1
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"Alternate Currency Advances" shall mean those
Revolving Advances made in Alternate Currencies with interest being
charged at the Alternate Currency Interest Rate.
"Alternate Currency Interest Rate" shall mean for
any Alternate Currency Advance for the then current Interest Period
relating thereto, the rate per annum (such rate to be adjusted to
the next higher 1/100 of one percent) equal to the rate which banks
will lend in the relevant interbank Eurocurrency market the
relevant Alternate Currency for delivery on the first day of such
Interest Period and in an amount comparable to the principal amount
of such Alternate Currency Advance determined as of approximately
11:00 a.m. (New York time) two (2) Business Days before the
beginning of such Interest Period.
"Assignment" shall mean the Assignment dated
December 1, 1993 from The Bank of New York Commercial Corporation
in favor of Agent.
"Authority" shall have the meaning set forth in
Section 4.19(d).
"Balance Sheet" shall have the meaning set forth in
Section 5.5(a).
"Bank" shall mean The Bank of New York and any
successor thereto.
"Blocked Accounts" shall have the meaning set forth
in Section 4.15(h).
"BNYCC" shall mean The Bank of New York Commercial
Corporation, a New York corporation.
"Borrowers" shall mean, jointly and severally, GDC,
GDC, Inc., GDC International, GDC Naugatuck, DataComm Service, GDC
Realty, GDC Systems and all permitted successors and assigns.
"Borrowing Agent" shall mean GDC.
"Borrowing Base Certificate" shall have the meaning
given to such term in Section 9.2.
"Business Day" shall mean (i) with respect to
Eurodollar Loans, any day on which commercial banks are open for
domestic and international business, including dealings in Dollar
deposits, in London, England and New York, New York, (ii) with
respect to Alternate Currency Advances, any day on which commercial
banks are open for domestic and international business and on which
dealings in such Alternate Currency are carried out in the offshore
interbank market and in the principal city in which dealings in
such Alternate Currency are settled and (iii) with respect to all
other matters, any day other than a day on which commercial banks
in New York are authorized or required by law to close.
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Exhibit 28.1
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"Canadian Dollars" shall mean lawful money of
Canada.
"CDA" shall mean Connecticut Development Authority.
"CDA Guaranty" shall mean the Guaranty Agreement
dated as of June 1, 1994 issued by the CDA in favor of Agent.
"CDA Guaranty Fee" means the annual guarantee fee
payable to the CDA pursuant to Section 14 of the CDA Guaranty.
"CERCLA" shall mean the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. section 9601 et seq.
"Change of Control" shall mean (a) the occurrence of
any event (whether in one or more transactions) which results in a
transfer of control of any Borrower (other than GDC) or any
Guarantor to a Person who is not an Original Owner or Borrower or
(b) any merger or consolidation of any Borrower or any Guarantor
with a Person who is not a Borrower or any sale of all or
substantially all of the property or assets of any Borrower or any
Guarantor other than to a Borrower. For purposes of this
definition, "control of any Borrower or any Guarantor" shall mean
the power, direct or indirect (x) to vote 50% or more of the
securities having ordinary voting power for the election of
directors of such Borrower or such Guarantor or (y) to direct or
cause the direction of the management and policies of such Borrower
or such Guarantor by contract or otherwise.
"Charges" shall mean all taxes, charges, fees,
imposts, levies and other assessments, including, without
limitation, all net income, gross income, gross receipts, sales,
use, ad valorem, value added, transfer, franchise, profits,
inventory, capital stock, license, withholding, payroll,
employment, social security, unemployment, excise, severance,
stamp, occupation and property taxes, custom duties, fees,
assessments and charges of any kind whatsoever, together with any
interest and any penalties, additions to tax or additional amounts,
imposed by any taxing or other authority, domestic or foreign
(including, without limitation, the PBGC or any environmental
agency or superfund), upon the Collateral, any Borrower or any of
its Affiliates.
"Chase" shall mean The Chase Manhattan Bank, N.A.
"Chase Agreements" shall mean the Credit Agreement
dated as of September 23, 1993 among General Lord, the banks which
are signatories thereto and Chase, as agent for such banks, the
Open-End Mortgage Deed, Assignment of Leases and Rents and Security
Agreement dated as of September 23, 1993 between GDC and Chase and
the Open-End Mortgage Deed, Assignment of Leases and Rents and
Security Agreement dated as of September 23, 1993 between Chase and
GDC Naugatuck.
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Exhibit 28.1
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"Claims" shall mean all security interests, liens,
claims or encumbrances held or asserted by any Person against any
or all of the Collateral, other than (A) Charges and (B) Permitted
Encumbrances.
"Closing Date" shall mean June 1, 1994 or such other
date as may be agreed to by the parties hereto.
"Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time together with the regulations
promulgated thereunder.
"Collateral" shall mean and include:
(a) all Receivables;
(b) all Equipment (but excluding those items
of Equipment the purchase of which were financed pursuant to the
agreements described on Schedule 1.2 to the extent (i) such
agreements prohibit the granting of a junior Lien in such Equipment
and such prohibition has not been waived by the holder of such Lien
and (ii) the applicable Borrower's obligations under such agreement
have not been paid);
(c) all General Intangibles;
(d) all Inventory;
(e) all Subsidiary Stock;
(f) all of each Borrower's right, title and
interest in and to (i) its goods and other property including, but
not limited to, all merchandise returned or rejected by Customers,
relating to or securing any of the Receivables; (ii) its rights as
a consignor, consignee, unpaid vendor, mechanic, artisan, or other
lienor, including stoppage in transit, setoff, detinue, replevin,
reclamation and repurchase; (iii) all additional amounts due to any
Borrower from any Customer relating to the Receivables; (iv) all
other property, including warranty claims, relating to any goods
securing this Agreement; (v) its contract rights, rights of payment
which have been earned under a contract right, instruments,
documents, chattel paper, warehouse receipts, deposit accounts,
money and securities; (vi) if and when obtained by any Borrower,
all real and personal property of third parties in which such
Borrower has been granted a lien or security interest as security
for the payment or enforcement of Receivables; and (vii) all other
goods, personal property or real property now owned or hereafter
acquired in which any Borrower has expressly granted a security
interest or may in the future grant a security interest to Agent
hereunder, or in any amendment or supplement hereto, or under any
other agreement between Agent and any Borrower;
(g) all of Borrowers' ledger sheets, ledger cards,
files, correspondence, records, books of account, business papers,
computers, computer software (whether owned by any Borrower or in
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Exhibit 28.1
Page 7 of 93
which it has an interest), computer programs, tapes, disks and
documents relating to clauses (a), (b), (c), (d), (e) and/or (f) of
this definition; and
(h) all proceeds and products of clauses (a), (b),
(c), (d), (e), (f) and (g) of this definition in whatever form,
including, but not limited to: cash, deposit accounts (whether or
not comprised solely of proceeds), certificates of deposit,
insurance proceeds (including hazard, flood and credit insurance),
negotiable instruments and other instruments for the payment of
money, chattel paper, security agreements or documents, eminent
domain proceeds, condemnation proceeds and tort claim proceeds.
Notwithstanding the foregoing, "Collateral" shall not
include (1) the Real Property; (2) any of the rents, royalties,
issues, profits, revenues, income and other benefits of the Real
Property; or (3) any leases of the Real Property.
"Commitment Percentage" of any Lender shall mean the
percentage set below such Lender's name on the signature page
hereof as same may be adjusted upon any assignment by a Lender
pursuant to Section 16.3(b).
"Commitment Transfer Supplement" shall mean a
document in the form of Exhibit 16.3, properly completed and
otherwise in form and substance satisfactory to Agent by which the
Purchasing Lender thereunder purchases and assumes a portion of the
obligation of Lenders to make or participate in Advances under this
Agreement.
"Consents" shall mean all filings with and all
licenses, permits, consents, approvals, authorizations,
qualifications and orders of governmental and transactional
authorities and other third parties, domestic or foreign, necessary
for the validity or enforceability of any of the Documents, to
carry on Borrowers' or Guarantors' businesses or execute, deliver
or perform their obligations under this Agreement or any of the
other Documents, including, without limitation, any consents
required under all applicable federal, state or other applicable
law or regulation.
"Contract Rate" shall mean, as applicable, the
Revolving Interest Rate and the Term Loan Interest Rate.
"Controlled Group" shall mean all members of a
controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control which, together
with any Borrower, are treated as a single employer under Section
414(b) or 414(c) of the Code.
"Current Assets" at a particular date, shall mean
all cash, cash equivalents, accounts and inventory of GDC and its
Subsidiaries on a consolidated basis and all other items which
would, in conformity with GAAP as of the Closing Date, be included
under current assets on a balance sheet of GDC and its Subsidiaries
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Exhibit 28.1
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on a consolidated basis as at such date; provided, however, that
such amounts shall not include (a) any amounts for any Indebtedness
owing by any Subsidiary or Affiliate of GDC or any of its
Subsidiaries to GDC or its Subsidiaries, unless such Indebtedness
arose in connection with the sale of goods or rendition of services
in the ordinary course of business and would otherwise constitute
current assets in conformity with GAAP, (b) any shares of stock
issued by an Affiliate or Subsidiary of GDC or any of its
Subsidiaries, or (c) the cash surrender value of any life insurance
policy.
"Current Liabilities" at a particular date, shall
mean all amounts which would, in conformity with GAAP as of the
Closing Date, be included under current liabilities on a balance
sheet of GDC and its Subsidiaries on a consolidated basis, as at
such date, but in any event including, without limitation, the
amounts of (a) all Indebtedness of GDC and its Subsidiaries payable
on demand, or, at the option of the Person to whom such
Indebtedness is owed, not more than twelve (12) months after such
date, (b) any payments in respect of any Indebtedness of GDC and
its Subsidiaries (whether installment, serial maturity, sinking
fund payment or otherwise) required to be made not more than twelve
(12) months after such date, (c) all reserves in respect of
liabilities or Indebtedness payable on demand or, at the option of
the Person to whom such Indebtedness is owed, not more than twelve
(12) months after such date, the validity of which is not contested
at such date, (d) all accruals for federal or other taxes measured
by income payable within a twelve (12) month period and (e)
Revolving Advances outstanding.
"Customer" shall mean and include the account debtor
with respect to any of the Receivables and/or the prospective
purchaser of goods, services or both with respect to any contract
or contract right, and/or any party who enters into or proposes to
enter into any contract or other arrangement with any Borrower, GDC
Canada or GDC United Kingdom, pursuant to which such Borrower, GDC
Canada or GDC United Kingdom is to deliver any personal property or
perform any services.
"DataComm Leasing" shall mean DataComm Leasing
Corporation, a Delaware corporation.
"DataComm Rental" shall mean DataComm Rental
Corporation, a Delaware corporation.
"DataComm Service" shall mean DataComm Service
Corporation, a Delaware corporation.
"Default Rate" shall have the meaning set forth in
Section 3.1.
"Depository Accounts" shall have the meaning set
forth in Section 4.15(h).
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Exhibit 28.1
Page 9 of 93
"Documents" shall have the meaning set forth in
Section 8.1(c).
"Dollar" and the sign "$" shall mean lawful money of
the United States of America.
"Dollar Equivalent" shall mean, with respect to any
amount denominated in an Alternate Currency, the amount of Dollars
obtained by converting the amount of such Alternate Currency into
Dollars at the spot rate for the purchase of Dollars with such
Alternate Currency, as quoted by Bank at approximately 11:00 a.m.
(New York time) on the date of determination thereof.
"Domestic Loan" shall mean, as the case may be, a
Domestic Revolving Loan or a Domestic Term Loan.
"Domestic Revolving Loan" shall mean any Revolving
Advance with interest being charged based upon the Alternate Base
Rate.
"Domestic Term Loan" shall mean that portion of the
Term Loan with interest being charged based upon the Alternate Base
Rate.
"EBITDA" for any period, shall mean (a) Net Income
before interest and taxes, plus (b) the sum of depreciation and
amortization, plus (c) extraordinary losses, minus (d)
extraordinary gains, minus (e) the difference, if any, between (i)
capitalized software development costs and (ii) amortization of
capitalized software development costs.
"Eligible Inventory" shall mean and include
Inventory (excluding work in process, demonstration inventory and
field spares which are included in machinery and equipment), valued
at the lower of cost or market value, determined on a
first-in-first-out basis, which is not, in Agent's reasonable
opinion, obsolete, slow moving or unmerchantable and which Agent,
in its sole discretion, which discretion shall be exercised in a
reasonable manner, shall not deem ineligible Inventory, based on
such considerations as Agent may from time to time deem appropriate
including, without limitation, whether such Inventory is subject to
a perfected, first priority security interest in favor of Agent and
whether such Inventory conforms to all standards imposed by any
governmental agency, division or department thereof which has
regulatory authority over such goods or the use or sale thereof.
"Eligible Receivables" shall mean each Receivable
arising in the ordinary course of Borrowers' businesses and which
Agent, in its sole credit judgment, which discretion shall be
exercised in a reasonable manner, shall deem to be eligible, based
on such considerations as Agent may from time to time deem
appropriate. A Receivable shall not be deemed eligible unless such
Receivable is subject to Agent's perfected security interest and no
other Lien other than Permitted Encumbrances, and is evidenced by
an invoice, bill of lading or other documentary evidence
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Exhibit 28.1
Page 10 of 93
satisfactory to Agent. In addition, no Receivable shall be an
Eligible Receivable if:
(a) it arises out of a sale made by any Borrower to
an Affiliate of such Borrower or any other Borrower or to a Person
controlled by an Affiliate of such Borrower or any other Borrower;
(b) with respect to a Receivable arising from sales
to Customers outside the continental United States, Canada or the
United Kingdom, it is due or unpaid more than sixty (60) days from
original due date and with respect to any other Receivable, it is
due or unpaid more than ninety (90) days after the original invoice
date;
(c) (i) with respect to Receivables from a Customer
rated 5A1 or better by Dun & Bradstreet or having an otherwise
equivalent credit rating from a reputable credit reporting agency,
fifty percent (50%) or more of such Receivables from such Customer
are not deemed Eligible Receivables by any other clause of this
definition and (ii) with respect to each other Customer,
twenty-five percent (25%) or more of the Receivables from such
Customer are not deemed Eligible Receivables by any other clause of
this definition. Such percentages may, in Agent's sole discretion,
which discretion shall be exercised in a reasonable manner, be
increased or decreased from time to time;
(d) any covenant, representation or warranty
contained in this Agreement with respect to such Receivable has
been breached;
(e) the applicable Customer is also any Borrower's
creditor or supplier, or such Customer has disputed liability, or
such Customer has made any claim with respect to any other
Receivable due from such Customer to any Borrower, or such
Receivable otherwise is or may become subject to any right of
setoff by such Customer;
(f) the applicable Customer shall (i) apply for,
suffer, or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee or liquidator of
itself or of all or a substantial part of its property or call a
meeting of its creditors, (ii) admit in writing its inability, or
be generally unable, to pay its debts as they become due or cease
operations of its present business, (iii) make a general assignment
for the benefit of creditors, (iv) commence a voluntary case under
any state or federal bankruptcy laws (as now or hereafter in
effect), (v) be adjudicated a bankrupt or insolvent, (vi) file a
petition seeking to take advantage of any other law providing for
the relief of debtors, (vii) acquiesce to, or fail to have
dismissed, any petition which is filed against it in any
involuntary case under such bankruptcy laws, or (viii) take any
action for the purpose of effecting any of the foregoing;
(g) the related sale is to a Customer outside the
continental United States of America, Canada or the United Kingdom
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Exhibit 28.1
Page 11 of 93
unless such sale is on letter of credit, guaranty or acceptance
terms, or is covered by credit insurance in each case acceptable to
Agent in its sole discretion or is otherwise acceptable to Agent in
its sole discretion;
(h) the sale to the applicable Customer is on a
bill-and-hold (except for Acceptable Bill-and-Hold Sales),
guaranteed sale, sale-and-return, sale on approval, consignment or
any other repurchase or return basis or is evidenced by chattel
paper;
(i) Agent believes, in its sole judgment, that
collection of such Receivable is insecure or that such Receivable
may not be paid by reason of the applicable Customer's financial
inability to pay;
(j) the applicable Customer is the United States of
America, any state or any department, agency or instrumentality of
any of them and Agent has requested that the applicable Borrower
assign its right to payment of such Receivable to Agent pursuant to
the Assignment of Claims Act of 1940, as amended (31 U.S.C.
Sub-Section 3727 et seq. and 41 U.S.C. Sub-Section 15) or otherwise
comply with other applicable statutes or ordinances and the
applicable Borrower fails to do so;
(k) except with respect to Acceptable Bill-and-Hold
Sales, the goods giving rise to such Receivable have not been
shipped and delivered to and accepted by the applicable Customer or
the services giving rise to such Receivable have not been performed
by the applicable Borrower and accepted by the applicable Customer
or such Receivable otherwise does not represent a final sale;
(l) the Receivables of the applicable Customer
exceed a credit limit determined by Agent, in its sole discretion,
which discretion shall be exercised in a reasonable manner to the
extent such Receivable exceeds such limit;
(m) such Receivable is subject to any offset,
deduction, defense, dispute, or counterclaim;
(n) any Borrower has made any agreement with the
applicable Customer for any deduction therefrom, except for
discounts or allowances made in the ordinary course of business for
prompt payment all of which discounts or allowances are reflected
in the calculation of the face value of each respective invoice
related thereto;
(o) except (i) with respect to Acceptable Bill
and Hold Sales or (ii) where such Customer has agreed to pay for such
merchandise or services within the normal course of business,
shipment of the merchandise or the rendition of services has not
been completed or accepted by the applicable Customer;
(p) any return, rejection or repossession of the
related merchandise has occurred;
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Exhibit 28.1
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(q) such Receivable is not payable to a Borrower,
GDC Canada or GDC United Kingdom; or
(r) such Receivable is not otherwise satisfactory
to Agent as determined in good faith by Agent in the exercise of
its discretion in a reasonable manner.
For purposes of this definition only, the term
"Borrowers" shall include GDC United Kingdom and GDC Canada.
"Environmental Complaint" shall have the meaning set
forth in Section 4.19(d).
"Environmental Laws" shall mean all federal, state,
foreign and local environmental, land use, zoning, health, chemical
use, safety and sanitation laws, statutes, ordinances and codes
relating to the protection of the environment and/or governing the
use, storage, treatment, generation, transportation, processing,
handling, production or disposal of Hazardous Substances and the
rules, regulations, policies, guidelines, interpretations,
decisions, orders and directives of federal, state, foreign and
local governmental agencies and authorities with respect thereto.
"Equipment" shall mean and include all of Borrowers'
goods (excluding Inventory) whether now owned or hereafter acquired
and wherever located including, without limitation, all equipment,
machinery, apparatus, motor vehicles, fittings, furniture,
furnishings, fixtures, parts, accessories and all replacements and
substitutions therefor or accessions thereto.
"ERISA" shall have the meaning set forth in Section
5.8(d).
"Eurodollar Loan" shall mean, as the case may be, a
Eurodollar Revolving Loan or a Eurodollar Term Loan.
"Eurodollar Rate" shall mean for any Eurodollar Loan
for the then current Interest Period relating thereto the rate per
annum (such Eurodollar Rate to be adjusted to the next higher 1/100
of one percent) equal to the quotient of (a) LIBOR, divided by (b)
a number equal to 1.00 minus the aggregate of the rates (expressed
as a decimal) of reserve requirements on the day that is two (2)
Business Days prior to the beginning of such Interest Period
(including, without limitation, basic, supplemental, marginal and
emergency reserves) under any regulation promulgated by the Board
of Governors of the Federal Reserve System (or any other
governmental authority having jurisdiction over Bank) as in effect
from time to time dealing with reserve requirements prescribed for
eurocurrency funding including any reserve requirements with
respect to "eurocurrency liabilities" under Regulation D of the
Board of Governors of the Federal Reserve System.
"Eurodollar Revolving Loan" shall mean any Revolving
Advance with interest being charged based upon the Eurodollar Rate.
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Exhibit 28.1
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"Eurodollar Term Loan" shall mean that portion of
the Term Loan with interest being charged based upon the Eurodollar
Rate.
"Eurotech" shall mean Eurotech France S.A.R.L., a
corporation organized under the laws of France.
"Event of Default" shall mean any of the events set
forth in Article X.
"Federal Funds Rate" shall mean, for any day, the
weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published for such day (or if such day is
not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or if such rate is not so
published for any day which is a Business Day, the average of
quotations for such day on such transactions received by the Bank
from three Federal funds brokers of recognized standing selected by
the Bank.
"Fee Letter" shall mean the letter agreement dated
the Closing Date from Borrowers to Agent.
"Fixed Charge Coverage Ratio", with respect to any
fiscal period, shall mean the ratio of (a) EBITDA for such period
to (b) the sum of all cash expended by GDC and its Subsidiaries on
a consolidated basis to make interest and scheduled principal
payments on Indebtedness, capital expenditures and capital lease
payments.
"Formula Amount" shall have the meaning set forth in
Section 2.1(a).
"GAAP" shall mean generally accepted accounting
principles in the United States of America in effect from time to
time.
"GDC" shall mean General DataComm Industries, Inc.,
a Delaware corporation.
"GDC Australia" shall mean General DataComm Pty
Limited, a corporation organized under the laws of Australia.
"GDC Belgium" shall mean General DataComm, N.V., a
corporation organized under the laws of Belgium.
"GDC Brazil" shall mean General DataComm do Brasil
Ltda, a corporation organized under the laws of Brazil.
"GDC Canada" shall mean General DataComm Ltd., a
corporation organized under the laws of Canada.
"GDC China" shall mean General DataComm Ltd., a
Delaware corporation.
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Exhibit 28.1
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"GDC France" shall mean General DataComm S.A.R.L., a
corporation organized under the laws of France.
"GDC Germany" shall mean General DataComm Industries
GmbH, a corporation organized under the laws of Germany.
"GDC, Inc." shall mean General DataComm, Inc., a
Delaware corporation.
"GDC International" shall mean General DataComm
International Corp., a Delaware corporation.
"GDC Mexico" shall mean General Telecomm, S.A. de
C.V., a corporation organized under the laws of Mexico.
"GDC Naugatuck" shall mean GDC Naugatuck, Inc., a
Delaware corporation.
"GDC Netherlands" shall mean General Data
Communications Industries B.V., a corporation organized under the
laws of the Netherlands.
"GDC Realty" shall mean GDC Realty, Inc., a Texas
corporation.
"GDC Russia" shall mean General DataComm CIS, a
corporation organized under the laws of the Russian Federation.
"GDC Singapore" shall mean General DataComm PTE
Ltd., a corporation organized under the laws of Singapore.
"GDC Systems" shall mean General DataComm Systems,
Inc., a Delaware corporation.
"GDC United Kingdom" shall mean General DataComm
Limited, a corporation organized under the laws of the United
Kingdom.
"GDC Venezuela" shall mean General DataComm de
Venezuela, C.A., a corporation organized under the laws of
Venezuela.
"General Intangibles" shall mean and include all of
Borrowers' general intangibles, whether now owned or hereafter
acquired including, without limitation, all choses in action,
causes of action, corporate or other business records, inventions,
designs, patents, patent applications, equipment formulations,
manufacturing procedures, quality control procedures, trademarks,
trade names, service marks, trade secrets, goodwill, copyrights,
design rights, registrations, licenses, franchises, customer lists,
tax refunds, tax refund claims, computer programs, claims under
guaranties, security interests and other security held by or
granted to Borrowers to secure payment of any of the Receivables by
a Customer, rights of indemnification and other intangible property
of every kind and nature (other than Receivables).
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Exhibit 28.1
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"General Lord" shall mean General-Lord Realty
Corporation, a Delaware corporation.
"Governmental Body" shall mean any nation or
government, any state or other political subdivision thereof or any
entity exercising the legislative, judicial, regulatory or
administrative functions of or pertaining to a government.
"Guarantees" shall mean, collectively, the
guarantees of the Obligations of Borrowers executed by each
Guarantor in favor of BNYCC which pursuant to the Assignment have
been assigned to Lenders, all reaffirmations thereof and any other
guarantee hereafter executed in favor of Lenders and/or Agent
guaranteeing the Obligations of Borrowers.
"Guarantors" shall mean, collectively, GDC Canada,
GDC United Kingdom, Eurotech, GDC Mexico, DataComm Rental, GDC
Belgium, GDC Australia, GDC France and each other Subsidiary of GDC
which hereafter executes a Guarantee in favor of Lenders.
"Guarantor Security Agreements" shall mean,
collectively, the General Security Agreement dated as of March 6,
1992 executed by GDC Canada in favor of BNYCC, the General
Assignment of Accounts Receivable dated as of March 6, 1992
executed by GDC Canada in favor of BNYCC, the Trust Deed dated as
of March 6, 1992 executed by GDC Canada and Montreal Trust Company,
the Debenture dated as of March 6, 1992 executed by GDC United
Kingdom, the Debenture relating to the real property owned by GDC
United Kingdom dated as of March 6, 1992 executed by GDC United
Kingdom and BNYCC, all of which have been assigned to Agent for the
benefit of Lenders pursuant to the Assignment, and such other
security agreements delivered by any Guarantor in favor of Agent
for the benefit of Lenders, and all other documents relating to the
foregoing as amended, modified and supplemented and reaffirmed from
time to time.
"Hazardous Discharge" shall have the meaning set
forth in Section 4.19(d).
"Hazardous Substance" shall mean, without
limitation, any flammable explosives, radon, radioactive materials,
asbestos, urea formaldehyde foam insulation, polychlorinated
byphenyls, petroleum and petroleum products, methane, hazardous
materials, hazardous wastes, hazardous or toxic substances or
related materials as defined in CERCLA, the Hazardous Materials
Transportation Act, as amended (49 U.S.C. Sections 1801, et seq.),
RCRA, Articles 15 and 27 of the New York State Environmental
Conservation Law or any other applicable Environmental Law and in
the regulations adopted pursuant thereto.
"Hazardous Wastes" shall mean and include all waste
materials subject to regulation under CERCLA, RCRA or applicable
state law, or any other applicable Federal and state laws now in
force or hereafter enacted relating to hazardous waste disposal.
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Exhibit 28.1
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"Incipient Event of Default" shall mean an event
which, with the giving of notice or passage of time or both, would
constitute an Event of Default.
"Indebtedness" of a Person at a particular date
shall mean all obligations of such Person which in accordance with
GAAP would be classified upon a balance sheet as liabilities
(except capital stock and surplus earned or otherwise) and in any
event, without limitation by reason of enumeration, shall include
all indebtedness, debt and other similar monetary obligations of
such Person whether direct or guaranteed, all premiums, if any, due
at the required prepayment dates of such indebtedness, all
indebtedness secured by a Lien on assets owned by such Person,
whether or not such indebtedness actually shall have been created,
assumed or incurred by such Person. Any indebtedness of such
Person resulting from the acquisition by such Person of any assets
subject to any Lien shall be deemed, for the purposes hereof, to be
the equivalent of the creation, assumption and incurring of the
indebtedness secured thereby, whether or not actually so created,
assumed or incurred.
"Interest Period" shall mean the period provided for
any Eurodollar Loan or any Alternate Currency Advance pursuant to
Section 2.2(b).
"Inventory" shall mean all of Borrowers' now owned
or hereafter acquired goods, merchandise and other personal
property, wherever located, to be furnished under any contract of
service or held for sale or lease, all raw materials, work in
process, finished goods and materials and supplies of any kind,
nature or description which are or might be used or consumed in any
Borrower's business or used in selling or furnishing such goods,
merchandise and other personal property, and all documents of title
or other documents representing them.
"Inventory Advance Rate" shall have the meaning set
forth in Section 2.1(a)(ii).
"Inventory Maximum Amount" shall mean (a) for the
period commencing on December 1, 1993 and ending on November 30,
1994, $5,000,000, (b) for the period commencing on December 1, 1994
and ending on November 30, 1995, $4,000,000, and (c) for the period
commencing on December 1, 1995 and at all times thereafter,
$3,000,000.
"Lender" and "Lenders" shall have the meaning set
forth in the Preamble to this Agreement and shall include any
Transferee, successor or assign of any Lender.
"Lending Office" shall mean, for each Lender and
Agent and for each type of Advance, the lending office of such
Lender or Agent (or for an affiliate of such Lender or Agent)
designated as such for such type of Advance on its signature page
hereof or such other office of such Lender or Agent (or of an
affiliate of such Lender or Agent) as such Lender or Agent may from
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Exhibit 28.1
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time to time specify to Agent and Borrowing Agent as the office by
which its Advances of such type are to be made and maintained.
"Letter of Credit Application" shall have the
meaning set forth in Section 2.8.
"Letter of Credit Fees" shall have the meaning set
forth in Section 3.2.
"Letters of Credit" shall have the meaning set forth
in Section 2.8.
"LIBOR" shall mean for any Eurodollar Loan for the
then current Interest Period relating thereto, the rate per annum
quoted by the Bank two (2) Business Days prior to the first day of
such Interest Period for the offering by the Bank to prime
commercial banks in the London interbank eurodollar market of
Dollar deposits, in immediately available funds on the first day of
such Interest Period for a period equal to such Interest Period and
in an amount equal to the amount of such Eurodollar Loan.
"Lien" shall mean any mortgage, deed of trust,
pledge, hypothecation, assignment, security interest, lien, Charge,
Claim or encumbrance, or preference, priority or other security
agreement or preferential arrangement in respect of any asset of
any kind or nature whatsoever including, without limitation, any
conditional sale or other title retention agreement, any lease
having substantially the same economic effect as any of the
foregoing, and the filing of, or agreement to give, any financing
statement under the Uniform Commercial Code or comparable law of
any jurisdiction.
"Material Adverse Effect" shall mean a material
adverse effect on any of the Collateral or on the business, assets,
operations or financial condition of the applicable Person or
Persons.
"Maximum Loan Amount" shall mean $33,000,000, less
repayments of the Term Loan.
"Maximum Revolving Advance Amount" shall mean
$25,000,000.
"Multiemployer Plan" shall mean a "multiemployer
plan" as defined in Section 4001(a)(3) of ERISA under which a
Borrower is an employer.
"Netcomm" shall mean Netcomm Limited, a corporation
organized under the laws of England and Wales, now known as General
DataComm Research Centre, Limited.
"Netcomm Agreement" shall mean the stock purchase
agreement dated as of the 24th of October, 1993 by and among
Richard Barnett and Sally Patricia Maynard-Smith, Andrew Timothy
Pepper, Trenlink Limited and GDC.
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Exhibit 28.1
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"Net Income", for any period, shall mean, the net
income of GDC and its Subsidiaries on a consolidated basis for such
period as determined in accordance with GAAP as of the Closing Date
(but excluding any extraordinary gains or losses attributable to
such period).
"Net Worth", at a particular date, shall mean all
amounts which would be included under shareholders' equity on a
balance sheet of GDC and its Subsidiaries on a consolidated basis
as at such date determined in accordance with GAAP as of the
Closing Date.
"Note" and "Notes" shall mean the Revolving Notes
and the Term Notes.
"Obligations" shall mean and include any and all of
Borrowers' and Guarantors' Indebtedness and/or liabilities to Agent
or Lenders or any corporation that directly or indirectly controls
or is controlled by or is under common control with Agent or any
Lender, of every kind, nature and description, direct or indirect,
secured or unsecured, joint, several, joint and several, absolute
or contingent, due or to become due, now existing or hereafter
arising, contractual or tortious, liquidated or unliquidated, under
this Agreement or any other Document, and all obligations of any
Borrower or any Guarantor to Agent or any Lender to perform acts or
refrain from taking any action under this Agreement or any other
Document.
"Original Loan Agreement" shall have the meaning
given to such term in the Background Section to this Agreement.
"Original Owners" shall mean GDC with respect to
GDC, Inc., DataComm Service, GDC Realty, GDC International, GDC
Systems, DataComm Rental, GDC Canada, GDC United Kingdom, Eurotech,
GDC Mexico, GDC Netherlands, GDC Belgium, GDC Australia, GDC France
GDC Venezuela, GDC Singapore, Netcomm, GDC Brazil, GDC Germany, and
GDC Russia; GDC International with respect to GDC China; and GDC
Realty with respect to GDC Naugatuck.
"Other Documents" shall mean the Notes, the Fee
Letter, the Pledge Agreements and any and all other agreements,
instruments and documents, including, without limitation, patent
and trademark assignments, guaranties, pledges, powers of attorney,
consents, and all other writings heretofore, now or hereafter
executed by any Borrower and/or delivered to Agent or any Lender in
respect of the transactions contemplated by this Agreement.
"Parent" of any Person shall mean a corporation or
other entity owning, directly or indirectly, at least 50% of the
shares of stock or other ownership interests having ordinary voting
power to elect a majority of the directors of such Person, or other
Persons performing similar functions for any such Person.
"Payment Office" shall mean initially 123 Main
Street, White Plains, New York; thereafter, such other office of
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Exhibit 28.1
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Agent, if any, which it may designate by notice to Borrowing Agent
to be the Payment Office.
"PBGC" shall mean the Pension Benefit Guaranty
Corporation or any successor thereto.
"Permitted Encumbrances" shall mean (a) Liens in
favor of Agent for the benefit of Lenders; (b) Liens for taxes,
assessments or other governmental charges not delinquent, or being
contested in good faith and by appropriate proceedings and with
respect to which proper reserves have been taken by Borrowers in
conformity with GAAP; provided, that no such Lien shall have any
effect on the priority of the Liens in favor of Agent or a stay of
enforcement of any such Lien shall be in effect; (c) Liens
disclosed in the financial statements referred to in Section 5.5,
the existence of which Agent has consented to in writing; (d)
deposits or pledges to secure obligations under worker's
compensation, social security or similar laws, or under
unemployment insurance; (e) deposits or pledges to secure bids,
tenders, contracts (other than contracts for the payment of money),
leases, statutory obligations, surety and appeal bonds and other
obligations of like nature arising in the ordinary course of
Borrowers' businesses; (f) judgment Liens that have been stayed or
bonded and mechanics', worker's, materialmen's, carrier's or other
like Liens arising in the ordinary course of Borrowers' businesses
with respect to obligations which are not due or which are being
contested in good faith by any Borrower; (g) Liens placed upon
fixed assets hereafter acquired to secure a portion of the purchase
price thereof, provided that (x) any such Lien shall not encumber
any other property of any Borrower and (y) the aggregate amount of
Indebtedness of GDC and its Subsidiaries on a consolidated basis
secured by such Liens incurred as a result of such purchases during
any fiscal year shall not exceed the amount provided for in Section
7.6; (h) encumbrances inherent to the granting of licenses by any
Borrower to third parties in the ordinary course of business and
(i) Liens disclosed on Schedule 1.2.
"Person" shall mean an individual, a partnership, a
corporation, a business trust, a joint stock company, a trust, an
unincorporated association, a joint venture, a governmental
authority or any other entity of whatever nature.
"Plan" shall mean any employee benefit plan within
the meaning of Section 3(3) of ERISA, established or maintained by
any Borrower or any member of the Controlled Group or any such plan
to which any Borrower or any member of the Controlled Group is
required to contribute on behalf of any of its employees.
"Pledge Agreements" shall mean collectively, the
Pledge Agreements executed and delivered by GDC and GDC Realty in
favor of BNYCC which have pursuant to the Assignment been assigned
to Agent for the benefit of Lenders, and any other pledge agreement
hereafter executed by GDC in favor of Agent for the benefit of
Lenders, as amended, modified, supplemented and reaffirmed from
time to time with respect to the Subsidiary Stock together with the
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Exhibit 28.1
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certificates evidencing the Subsidiary Stock and undated stock
powers duly executed in blank with respect thereto.
"Prime Rate" shall mean the prime commercial lending
rate of the Bank as publicly announced to be in effect from time to
time, such rate to be adjusted automatically, without notice, on
the effective date of any change in such rate. This rate of
interest is determined from time to time by the Bank as a means of
pricing some loans to its customers and is neither tied to any
external rate of interest or index nor does it necessarily reflect
the lowest rate of interest actually charged by the Bank to any
particular class or category of customers of the Bank.
"Projections" shall have the meaning set forth in
Section 5.5(b).
"Purchasing Lender" shall have the meaning set forth
in Section 16.3.
"RCRA" shall mean the Resource Conservation and
Recovery Act, 42 U.S.C. section 6901 et seq., as the same may be amended
from time to time.
"Real Property" shall mean all real property owned
or leased by any Borrower and any fixtures (other than trade
fixtures) which are attached to and necessary to the operation of
the buildings or other improvements located on such real property.
"Receivables" shall mean and include all of
Borrowers' accounts, contract rights, instruments, documents,
chattel paper, general intangibles relating to accounts, drafts and
acceptances, and all other forms of obligations owing to Borrowers
arising out of or in connection with the sale or lease of Inventory
or the rendition of services, all guarantees and other security
therefor, whether secured or unsecured, now existing or hereafter
created, and whether or not specifically sold or assigned to Agent
hereunder.
"Receivables Advance Rate" shall have the meaning
set forth in Section 2.1(a)(i).
"Register" shall have the meaning set forth in
Section 16.3(d).
"Release" shall have the meaning set forth in
Section 5.7(c)(i).
"Reportable Event" shall mean a reportable event
described in Section 4043(b) of ERISA or the regulations
promulgated thereunder.
"Required Lenders" shall mean Lenders holding at
least sixty six and two thirds percent (66 2/3%) of the Advances.
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Exhibit 28.1
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"Revolving Advances" shall mean Advances made
pursuant to Section 2.1 and may consist of Domestic Revolving
Loans, Eurodollar Revolving Loans and Alternate Currency Advances.
"Revolving Interest Rate" shall mean an interest
rate per annum equal to (a) with respect to Domestic Revolving
Loans, the sum of the Alternate Base Rate plus three quarters
percent (.75%), (b) with respect to Eurodollar Revolving Loans, the
sum of the Eurodollar Rate plus two and five-eighths percent
(2.625%), and (c) with respect to Alternate Currency Advances, the
sum of the Alternate Currency Interest Rate plus two and five-
eighths percent (2.625%).
"Revolving Note" and "Revolving Notes" shall have
the meaning given to such terms in Section 2.1(a).
"Sterling" shall mean the lawful money of the United
Kingdom.
"Subsidiary" of any Person shall mean a corporation
or other entity of whose shares of stock or other ownership
interests having ordinary voting power (other than stock or other
ownership interests having such power only by reason of the
happening of a contingency) to elect a majority of the directors of
such corporation, or other Persons performing similar functions for
such entity, are owned, directly or indirectly, by such Person.
"Subsidiary Stock" shall mean all of the issued and
outstanding shares of stock of GDC, Inc., DataComm Service, GDC
Realty, GDC International, GDC Systems, GDC Canada, GDC United
Kingdom, Eurotech, GDC Mexico, DataComm Rental, GDC Belgium, GDC
Australia, GDC France and Netcomm owned by GDC and all of the
issued and outstanding shares of stock of GDC Naugatuck owned by
GDC Realty.
"Tangible Net Worth" at a particular date shall mean
Net Worth at such date minus the goodwill of GDC and its
Subsidiaries on a consolidated basis at such date as determined in
accordance with GAAP as of the Closing Date minus all other
intangible assets of GDC and its Subsidiaries on a consolidated
basis at such date as determined in accordance with GAAP as of the
Closing Date, plus software license fees associated with CrossComm
Corporation.
"Term" shall have the meaning set forth in
Section 13.1.
"Term Loan" shall mean the Advances made pursuant to
Section 2.4 hereof.
"Term Loan Interest Rate" shall mean an interest
rate per annum equal to (a) with respect to the Domestic Term Loan,
the sum of the Alternate Base Rate plus one and one-quarter percent
(1.25%) and (b) with respect to the Eurodollar Term Loan, the sum
of the Eurodollar Rate plus three and one-quarter percent (3.25%).
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Exhibit 28.1
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"Term Note" and "Term Notes" shall have the meaning
given to such terms in Section 2.4.
"Termination Date" shall have the meaning set forth
in Section 13.1.
"Total Liabilities" at a particular date shall mean
all Indebtedness of GDC and its Subsidiaries on a consolidated
basis at such date as determined in accordance with GAAP as of the
Closing Date.
"Toxic Substance" shall mean and include any
material present on the Real Property which has been shown to have
significant adverse effect on human health and which is subject to
regulation under the Toxic Substances Control Act (TSCA), 15 U.S.C.
section 2601 et seq., applicable state law, or any other applicable
Federal or state laws now in force or hereafter enacted relating to
toxic substances. "Toxic Substance" includes but is not limited to
asbestos, polychlorinated biphenyls (PCBs) and lead-based paints.
"Transferee" shall have the meaning set forth in
Section 16.3(b).
"Working Capital", at a particular date, shall mean
the excess, if any, of Current Assets over Current Liabilities at
such date.
1.3. Uniform Commercial Code Terms. All terms
used herein and defined in the Uniform Commercial Code as adopted
in the State of New York shall have the meaning given therein
unless otherwise defined herein.
1.4. Terms Generally. Unless the context shall
otherwise require, all references in this Agreement to Articles,
Sections, subsections, Exhibits and Schedules shall be deemed to be
references to Articles, Sections and subsections of, and Exhibits
and Schedules to, this Agreement. In addition, references to,
"Liens in favor of Agent", "Agent's security interest in the
Collateral" and similar formulations shall mean such Liens or
security interests of Agent for the benefit of itself and Lenders.
II. ADVANCES, PAYMENTS.
2.1. (a) Revolving Advances. Subject to the
terms and conditions set forth in this Agreement, each Lender,
severally and not jointly, will make Revolving Advances to
Borrowing Agent in aggregate amounts outstanding at any time not
greater than such Lender's Commitment Percentage of the lesser of
x) the Maximum Revolving Advance Amount less the aggregate amount
of outstanding Letters of Credit or y) an amount equal to the sum
of:
(i) up to 85%, subject to the provisions of
Section 2.1(b) ("Receivables Advance Rate"), of the
Dollar amount of Eligible Receivables payable in
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Exhibit 28.1
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Dollars and the Dollar Equivalent of Eligible
Receivables which are not payable in Dollars, less
such reserves as Agent may reasonably deem proper
and necessary, plus
(ii) the lesser of (x) up to 20%, subject to the
provisions of Section 2.1(b) ("Inventory Advance
Rate"), of the value of the Eligible Inventory less
such reserves as Agent may reasonably deem proper
and necessary (the Receivables Advance Rate and the
Inventory Advance Rate shall be referred to,
collectively, as the "Advance Rates") and (y) the
Inventory Maximum Amount, plus
(iii) the product of (a) the aggregate amount of
outstanding Letters of Credit consisting of
documentary trade Letters of Credit times (b) the
Inventory Advance Rate, minus
(iv) the aggregate amount of outstanding Letters
of Credit, minus
(v) the amount by which the amount of cash in
DataComm Leasing exceeds $1,000,000.
The sum of the amounts derived from Sections 2.1(a)(i)
plus (ii) plus (iii) minus (v) at any time and from time to time
shall be referred to as the "Formula Amount". The Revolving
Advances of each Lender shall be evidenced by secured promissory
notes (each a "Revolving Note", and collectively, the "Revolving
Notes") in substantially the form attached hereto as Exhibit
2.1(a).
(b) Discretionary Rights. The Advance Rates
may be increased or decreased by Agent at the request of the
Lenders at any time and from time to time in the exercise of their
reasonable discretion upon either the occurrence and during the
continuance of an Event of Default or Incipient Event of Default or
an increase in dilution with respect to the Receivables. Agent
shall give Borrowing Agent and Lenders five (5) days prior written
notice of Lenders' intention to decrease or increase Advance Rates.
Borrowers and Lenders consent to any such increases or decreases
and acknowledge that decreasing the Advance Rates may limit or
restrict Revolving Advances requested by Borrowing Agent and/or
require prepayment in accordance with Section 2.7.
(c) Foreign Receivables. In the event Agent
receives collections of Receivables in a currency other than
Dollars, Agent shall credit to Borrowers' account the Dollar
Equivalent of such foreign currency. Borrowers shall indemnify and
hold harmless Agent and Lenders from any loss or damage arising as
a result of a deficiency in the amount so collected.
(d) Use of Revolving Advances. During the
Term, Borrowers may use the Revolving Advances by borrowing,
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Exhibit 28.1
Page 24 of 93
prepaying and reborrowing, all in accordance with the terms and
conditions hereof.
2.1(A) Alternate Currency Advances. The Dollar
Equivalent of all outstanding Alternate Currency Advances made in
Sterling may not exceed $2,500,000 at any time and the Dollar
Equivalent of all outstanding Alternate Currency Advances made in
Canadian Dollars may not exceed $2,500,000 at any time. In
determining the amount of Revolving Advances outstanding, the
amount of any Alternate Currency Advances outstanding shall be
converted to the Dollar Equivalent of such amount on the date of
any such determination. Promptly upon receipt of notice from
Borrowing Agent of its request for an Alternate Currency Advance or
to continue an Alternate Currency Advance, Agent shall determine
whether the requested Alternate Currency will be readily available
to Lenders in the interbank Eurocurrency market in the normal
course of business in the amount and for the Interest Period
requested. Agent shall notify Borrowing Agent and Lenders two (2)
Business Days prior to the date of the requested Alternate Currency
Advance or continuation of the determination made as to the
availability of the requested Alternate Currency and the related
Alternate Currency Interest Rate. If Agent notifies Borrowing
Agent and Lenders that the requested Alternate Currency is
available, the obligation of Lenders to make or continue any
Alternate Currency Advance shall nevertheless be subject to the
condition that there shall have occurred no change in circumstances
in the interbank Eurocurrency market after such notification and
prior to the first day of the relevant Interest Period, which
change of circumstance would, in the opinion of Agent or any
Lender, make it impractical for the requested Alternate Currency
Advance to be made or continued in such Alternate Currency. If
Agent or any Lender so determines that such a circumstance has
occurred in the interbank Eurocurrency market or if Agent or any
Lender determines that the requested Alternate Currency is not
readily available, Agent shall promptly notify Borrowing Agent and
Lenders thereof and such Alternate Currency Advance shall not be
made, or any such continuation shall not be effected, as the case
may be; and any Alternate Currency Advance outstanding in such
Alternate Currency that Borrowing Agent shall have so requested to
be continued shall be repaid at the end of the then current
Interest Period or converted to a Domestic Revolving Loan at the
end of the then current Interest Period. Borrowing Agent may not
request that any Alternate Currency Advance originally made in one
Alternate Currency be subsequently converted into another Alternate
Currency but must repay such Alternate Currency Advance and,
subject to the terms and conditions of this Agreement, may reborrow
in the other Alternate Currency.
2.2. Procedure for Borrowing.
(a) Borrowing Agent may notify Agent prior
to 11:00 a.m. on a Business Day of its request to incur, on such
Business Day, a Domestic Revolving Loan hereunder. Should any
amount required to be paid as interest hereunder, or as fees or
other charges under this Agreement or any Other Document, or with
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Exhibit 28.1
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respect to any other Obligation, become due, the same shall be
deemed a request for a Domestic Revolving Loan as of the date such
payment is due, in the amount required to pay in full such
interest, fee, charge or Obligation under this Agreement or any
Other Document, and such request shall be irrevocable.
(b) In the event Borrowing Agent on behalf
of Borrowers desires to obtain a Eurodollar Loan or an Alternate
Currency Advance, it shall give Agent at least three (3) Business
Days' prior written notice specifying (i) the date of the proposed
borrowing (which shall be a Business Day), (ii) the type of
borrowing and the amount to be borrowed, which amount with respect
to Eurodollar Revolving Loans shall be an integral multiple of
$100,000 and shall not be less than $500,000, with respect to
Eurodollar Term Loans shall be in an integral multiple of $50,000
and shall not be less than $250,000 and with respect to Alternate
Currency Advances shall not be less than the Dollar Equivalent of
$500,000, (iii) the duration of the first Interest Period therefor
and (iv) if an Alternate Currency Advance is requested, the
requested Alternate Currency. Interest Periods for Eurodollar
Loans shall be for one, two, three or six month periods. Interest
Periods for Alternate Currency Advances shall be for one, two or
three month periods. The aggregate number of outstanding
Eurodollar Loans shall not exceed four (4) at any time and the
aggregate number of outstanding Alternate Currency Advances shall
not exceed four (4) at any time. In no case may Borrowing Agent
obtain Eurodollar Loans or Alternate Currency Advances, whether
pursuant to a notice of borrowing or a request for conversion or
continuation, (i) within one month prior to the last day of the
Term, or (ii) if any Event of Default or Incipient Event of Default
shall have occurred and be continuing.
(c) Each Interest Period for a Eurodollar
Loan or Alternate Currency Advance shall commence on the date such
Eurodollar Loan or Alternate Currency Advance is made and shall end
on such date as Borrowing Agent may elect as set forth in Section
2.2(b)(iii), provided that:
(i) any Interest Period which would
otherwise end on a day which is not a Business Day shall end on the
next preceding or succeeding Business Day as is Bank's custom in
the market to which such Eurodollar Loan or Alternate Currency
Advance relates; and
(ii) no Interest Period shall end after
the last day of the Term; and
(iii) any Interest Period which begins
on a day for which there is no numerically corresponding day in the
calendar month during which such Interest Period is to end shall
(subject to clause (i) above) end on the last day of such calendar
month.
Borrowing Agent shall elect the initial Interest
Period applicable to a Eurodollar Loan or Alternate Currency
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Exhibit 28.1
Page 26 of 93
Advance by notice of borrowing given to Agent by Borrowing Agent
pursuant to Section 2.2(b) or by notice of conversion or
continuation given to Agent by Borrowing Agent pursuant to Section
2.2(d) or (e), as the case may be. Borrowing Agent shall give
irrevocable written notice to Agent of its intention to extend or
continue a Eurodollar Loan or an Alternate Currency Advance for an
additional Interest Period not less than three (3) Business Days
prior to the last day of the then current Interest Period
applicable to such Eurodollar Loan or Alternate Currency Advance.
If Agent does not receive timely notice of the requested extension,
any Eurodollar Loan shall convert to a Domestic Loan, subject to
Section 2.2(e), and any Alternate Currency Advance shall be due and
payable, subject to Section 2.2(d).
(d) If Borrowing Agent desires to continue
an Alternate Currency Advance or a Eurodollar Loan, Borrowing Agent
shall make such request to Agent (and Agent shall so notify
Lenders) in writing at least three (3) Business Days prior to the
last day of the then current Interest Period applicable to such
outstanding Alternate Currency Advance or Eurodollar Loan, which
request may only be made if no Event of Default or Incipient Event
of Default shall have occurred and be continuing.
(e) Provided that no Event of Default or
Incipient Event of Default shall have occurred and be continuing
and subject to the conditions set forth in this Section 2.2(e),
Borrowing Agent may, (i) on the last Business Day of the then
current Interest Period applicable to any Eurodollar Loan, convert
such outstanding Eurodollar Loan into a Domestic Loan and (ii) from
time to time, convert any outstanding Domestic Loan into a
Eurodollar Loan in the same aggregate principal amount. If
Borrowing Agent desires to convert a Domestic Loan or Eurodollar
Loan as aforesaid, Borrowing Agent shall give Agent (and Agent
shall so notify Lenders) not less than three (3) Business Days'
prior written notice, specifying the date of such conversion, the
Domestic Loan or Eurodollar Loan to be converted and, if the
conversion is from a Domestic Loan to a Eurodollar Loan, the
duration of the first Interest Period therefor. After giving
effect to each such conversion there shall be no more than four (4)
Eurodollar Loans outstanding.
(f) In the event that any prepayment of a
Eurodollar Loan or an Alternate Currency Advance is required or
permitted on a date other than the last Business Day of the then
current Interest Period with respect thereto, Borrowers shall
indemnify Agent and Lenders therefor in accordance with Section
2.2(g).
(g) Each Borrower shall indemnify Agent and
Lenders and hold Agent and Lenders harmless from and against any
and all losses and expenses that Agent and Lenders may sustain or
incur as a consequence of any prepayment or conversion of, or any
default by any Borrower in the payment of the principal of or
interest on, any Eurodollar Loan or any Alternate Currency Advance
or failure by any Borrower to complete a borrowing of, a prepayment
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Exhibit 28.1
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of, a continuation of or conversion to a Eurodollar Loan or an
Alternate Currency Advance after notice thereof has been given,
including (but not limited to) any interest or other amounts
payable by Agent or Lenders to lenders of funds obtained by them in
order to make or maintain their Eurodollar Loans or Alternate
Currency Advances hereunder. A certificate as to any additional
amounts payable pursuant to the foregoing sentence submitted by
Agent or any Lender to Borrowing Agent shall be conclusive absent
manifest error.
(h) Notwithstanding any other provision
hereof, if any applicable law, treaty, regulation or directive, or
any change therein or in the interpretation or application thereof,
shall make it unlawful for any Lender (for purposes of this
subsection (h), the term "Lender" shall include any Lender, its
respective Lending Office and such other office or branch where any
Lender or any corporation or bank controlling such Lender makes or
maintains any Eurodollar Loans or any Alternate Currency Advances)
to make or maintain its Eurodollar Loans or Alternate Currency
Advances, the obligation of Lenders to make or maintain Eurodollar
Loans or Alternate Currency Advances hereunder shall forthwith be
cancelled and Borrowers shall, if any affected Eurodollar Loans or
Alternate Currency Advances are then outstanding, promptly upon
request from Agent, either pay all such affected Eurodollar Loans
or Alternate Currency Advances or convert such affected Eurodollar
Loans or Alternate Currency Advances into Revolving Advances of
another type or into a Domestic Term Loan, as the case may be. If
any such payment or conversion of any Eurodollar Loan or Alternate
Currency Advance is made on a day that is not the last Business Day
of the Interest Period applicable to such Eurodollar Loan or
Alternate Currency Advance, Borrowers shall pay Lenders, upon
Agent's request, such amount or amounts as may be necessary to
compensate Lenders for any loss or expense sustained or incurred by
Lenders in respect of such Eurodollar Loan or Alternate Currency
Advance as a result of such payment or conversion, including (but
not limited to) any interest or other amounts payable by Lenders to
lenders of funds obtained by Lenders in order to make or maintain
such Eurodollar Loan or Alternate Currency Advance. A certificate
as to any additional amounts payable pursuant to the foregoing
sentence submitted by any Lender to Borrowing Agent shall be
conclusive absent manifest error.
2.3. Manner of Borrowing and Payment.
(a) In the event of either a request by
Borrowing Agent for a Revolving Advance pursuant to Section 2.2 or
the existence of a "deemed request" for a Revolving Advance
pursuant to Section 2.2, 2.6(b), 2.8 or 2.11, Agent shall give
notice prior to 12:00 p.m. (New York time) to each Lender of the
requested Revolving Advance specifying (i) the date of the proposed
borrowing, (ii) the amount to be borrowed and (iii) the type of
Revolving Advance requested or deemed requested. On the date of
the requested or deemed requested Revolving Advance, each Lender
shall provide Agent with immediately available funds in Dollars
with respect to Revolving Advances other than Alternate Currency
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Exhibit 28.1
Page 28 of 93
Advances and each Lender shall provide Agent with immediately
available funds in the relevant Alternate Currency with respect to
Alternate Currency Advances, in each case, equal to its applicable
Commitment Percentage of the requested or deemed requested
Revolving Advance. Subject to Section 2.3(e), each borrowing of
Revolving Advances shall be disbursed by Agent as provided in this
Section 2.3.
The proceeds of each Revolving Advance (other
than Alternate Currency Advances) requested by Borrowing Agent
shall, to the extent Lenders make such Revolving Advances, be made
available to Borrowing Agent on the day so requested by way of
credit to Borrowing Agent's operating account at Bank, or such
other bank as Borrowing Agent may designate following notification
to Agent, in federal or other immediately available funds. The
proceeds of each Alternate Currency Advance requested by Borrowing
Agent shall, to the extent Lenders make such Alternate Currency
Advances, be made available in accordance with the instructions of
Borrowing Agent. With respect to Revolving Advances deemed to have
been requested, the proceeds of such Revolving Advance shall be
disbursed to Agent to be applied to the outstanding Obligations
giving rise to such deemed request.
(b) Each payment (including each prepayment)
by Borrowers on account of the principal of and interest on any
Revolving Note, shall be applied to the Revolving Advances pro rata
according to the applicable Commitment Percentages of Lenders.
Each payment (including each prepayment) by Borrowers on account of
principal and interest on any Term Note shall be applied to the
Term Loan pro rata according to the applicable Commitment
Percentages of Lenders.
(c) Each Lender shall be entitled to earn
interest at the applicable Revolving Interest Rate on outstanding
Revolving Advances which it has funded.
(d) If any Lender or any Transferee (a
"benefitted Lender") shall at any time receive any payment of all
or part of its Advances, or interest thereon, or receive any
Collateral in respect thereof (whether voluntarily or involuntarily
or by set-off), in a greater proportion than any such payment to
and Collateral received by any other Lender, if any, in respect of
such other Lender's Advances, or interest thereon, and such greater
proportionate payment or receipt of Collateral is not expressly
permitted hereunder, such benefitted Lender shall purchase for cash
from the other Lenders such portion of each such other Lender's
Advances, or shall provide such other Lender with the benefits of
any such Collateral, or the proceeds thereof, as shall be necessary
to cause such benefitted Lender to share the excess payment or
benefits of such Collateral or proceeds ratably with each other
Lender; provided, however, that if all or any portion of such
excess payment or benefits is thereafter recovered from such
benefitted Lender, such purchase shall be rescinded, and the
purchase price and benefits returned, to the extent of such
recovery, but without interest thereon unless such benefitted
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Exhibit 28.1
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Lender is required to pay interest on such amounts to the Person
recovering such payment, in which case with interest thereon,
computed at the same rate, and on the same basis, as the interest
that such benefitted Lender is required to pay. Each Lender so
purchasing a portion of another Lender's Advances may exercise all
rights of payment (including, without limitation, rights of set-
off) with respect to such portion as fully as if such Lender were
the direct holder of such portion.
(e) Unless Agent shall have been notified by
telephone, confirmed in writing, by any Lender that such Lender
will not make the amount which would constitute its Commitment
Percentage of any Revolving Advances available to Agent, Agent may
(but shall not be obligated to) assume that such Lender shall make
such amount available to Agent and, in reliance upon such
assumption, make available to Borrowers a corresponding amount.
Agent will promptly notify Borrowing Agent of its receipt of any
such notice from a Lender. If such amount is made available to
Agent on a date after the date such Revolving Advance is made, such
Lender shall pay to Agent on demand an amount equal to the product
of (i) the daily average Federal Funds Rate (computed on the basis
of a year of 365 days) during such period as determined by Agent,
times (ii) such amount, times (iii) the number of days from and
including the date of such Revolving Advance is made to the date on
which such amount becomes immediately available to Agent. A
certificate of Agent submitted to any Lender with respect to any
amounts owing under this paragraph (e) shall be conclusive, in the
absence of manifest error. If such amount is not in fact made
available to Agent by such Lender within three (3) Business Days
after the date such Revolving Advance is made, Agent shall be
entitled to recover such amount, with interest thereon at the
Revolving Interest Rate applicable to such Revolving Advance
hereunder, on demand from Borrowers; provided, however, that
Agent's right to such recovery shall not prejudice or otherwise
adversely affect Borrowers' rights (if any) against such Lender.
2.4. Term Loan. Subject to the terms and
conditions of this Agreement, each Lender, severally and not
jointly, will make a Term Loan to GDC in the sum equal to such
Lender's Commitment Percentage of $8,000,000. The Term Loan shall
be advanced on the Closing Date and shall be, with respect to
principal, payable as follows, subject to acceleration upon the
occurrence and continuance of an Event of Default under this
Agreement or termination of this Agreement: $250,000 per quarter
commencing on June 30, 1994 and on the last day of each calendar
quarter thereafter up to and including March 31, 1995; $375,000 per
quarter commencing on June 30, 1995 and on the last day of each
calendar quarter thereafter up to and including March 31, 1996;
$500,000 per quarter commencing on June 30, 1996 and on the last
day of each calendar quarter thereafter up to and including
September 30, 1996, with a final payment on November 30, 1996 in an
amount equal to the unpaid principal balance of the Term Loan. The
portion of the Term Loan advanced by each Lender shall be evidenced
by and subject to the terms and conditions set forth in the secured
promissory notes (each a "Term Note" and collectively, the "Term
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Exhibit 28.1
Page 30 of 93
Notes") in substantially the form attached hereto as Exhibit 2.4.
The Term Loan may be prepaid, in whole or in part, without premium
or penalty at any time on one (1) Business Day notice to Agent with
respect to Domestic Term Loans and on three (3) Business Days
notice to Agent with respect to Eurodollar Term Loans provided that
Borrowers indemnify Agent and Lenders in accordance with Section
2.2(g). All prepayments shall be applied to the outstanding
principal installments on the Term Loan in the inverse order of the
maturities thereof.
2.5. Maximum Advances. The aggregate balance of
Advances outstanding at any time shall not exceed the Maximum Loan
Amount.
2.6. Repayment of Advances.
(a) The Revolving Advances shall be due and
payable in full on the last day of the Term subject to earlier
prepayment as herein provided. The Term Loan shall be due and
payable as provided in Section 2.4 hereof and in the Term Notes.
(b) All payments of principal, interest and
other amounts payable hereunder, or under any of the Other
Documents, other than Alternate Currency Advances, shall be made to
Agent at the Payment Office not later than 1:00 P.M. (New York
time) on the due date therefor and all payments with respect to
Alternate Currency Advances shall be made to Agent at its
applicable Lending Office not later than 1:00 p.m. (local time) on
the due date therefor. Such payments shall be made (i) with
respect to all payments other than in respect to the principal
amount of and interest on Alternate Currency Advances, in lawful
money of the United States of America in federal or other funds
immediately available to Agent and (ii) with respect to the
principal amount of and interest on Alternate Currency Advances in
immediately available funds in the relevant Alternate Currency.
Any payments received after 1:00 p.m., New York time, shall be
deemed made on the next Business Day. Agent shall, through the
Payment Office, remit to each Lender an amount equal to such
Lender's Commitment Percentage of any payments received by Agent on
the date received if received prior to 1:00 p.m., New York time, or
on the next Business Day if received after 1:00 p.m., New York
time. Agent shall have the right to effectuate payment on any and
all Obligations due and owing hereunder by charging Borrowers'
account or by making Revolving Advances as provided in Section 2.2.
(c) Borrowers shall pay principal, interest,
and all other amounts payable hereunder, or under any Other
Documents or any related agreement, without any deduction
whatsoever, including, but not limited to, any deduction for any
setoff or counterclaim.
2.7. Repayment of Excess Advances. The aggregate
balance of Advances outstanding at any time in excess of the
maximum amount of Advances permitted hereunder shall be immediately
due and payable without the necessity of any demand, at the Payment
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Exhibit 28.1
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Office, whether or not an Incipient Event of Default or Event of
Default has occurred.
2.8. Letters of Credit. Subject to the terms and
conditions hereof, Agent shall issue or cause the issuance of
documentary trade letters of credit and standby letters of credit
for the account of one or more Borrowers (collectively, "Letters of
Credit"); provided, however, that Agent will not be required to
issue or cause to be issued any Letters of Credit to the extent
that the face amount of such Letters of Credit for the account of
one or more Borrowers would cause the sum of (i) the outstanding
Revolving Advances plus (ii) outstanding Letters of Credit (with
the requested Letter of Credit being deemed to be outstanding for
purposes of this calculation) to exceed the lesser of (x) the
Maximum Revolving Advance Amount or (y) the Formula Amount (which
is calculated as if the requested Letter of Credit has been
issued). The amount of all outstanding Letters of Credit shall not
exceed $5,000,000 at any time. All disbursements or payments
related to Letters of Credit shall be deemed to be requests for
Domestic Revolving Loans; Letters of Credit that have not been
drawn upon shall not bear interest. Letters of Credit shall be
subject to the terms and conditions set forth in the applicable
Application and Agreement for Letter of Credit attached hereto as
Exhibit 2.8 (the "Letter of Credit Application").
2.9. Issuance of Letters of Credit.
(a) Borrowing Agent may request Agent to
issue or cause the issuance of a Letter of Credit by delivering to
Agent, at the Payment Office, a Letter of Credit Application
completed to the satisfaction of Agent, and such other
certificates, documents and other papers and information as Agent
may reasonably request.
(b) Each Letter of Credit shall, among other
things, (i) provide for the payment of sight drafts when presented
thereunder in accordance with the terms thereof and when
accompanied by the documents described therein and (ii) have an
expiry date not later than eighteen (18) months after such Letter
of Credit's date of issuance and in no event later than twelve (12)
months after the last day of the Term. Each Letter of Credit
Application and each Letter of Credit shall be subject to the
Uniform Customs and Practice for Documentary Credits (1983
Revision), International Chamber of Commerce Publication No. 400,
and any amendment or revision thereof and, to the extent not
inconsistent therewith, the laws of the State of New York.
2.10. Requirements For Issuance of Letters of
Credit.
(a) In connection with the issuance of any
Letter of Credit, Borrowers shall indemnify, and save and hold
harmless, Agent and each Lender from any loss, cost, expense or
liability, including, without limitation, payments made by Agent or
any Lender, and expenses and reasonable attorneys' fees incurred by
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Exhibit 28.1
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Agent or any Lender, arising out of, or in connection with, any
Letter of Credit issued or to be issued for any Borrower.
Borrowers shall be bound by Agent's or any issuing or accepting
bank's regulations and good faith interpretations of any Letter of
Credit issued for any Borrower's account, although this inter-
pretation may be different from such Borrower's own, and neither
Agent nor any Lender, nor the bank which opened such Letter of
Credit, nor any of its correspondents shall be liable for any
error, negligence, or mistakes, whether of omission or commission,
in following Borrowing Agent's instructions or those contained in
any Letter of Credit or of any modifications, amendments or
supplements thereto or in issuing or paying any Letter of Credit,
except for Agent's or such Lender's or such correspondents' gross
(not mere) negligence or willful misconduct.
(b) Borrowing Agent shall authorize and
direct any bank which issues a Letter of Credit to name any
Borrower as the "Account Party" therein and to deliver to Agent all
instruments, documents, and other writings and property received by
such bank pursuant to such Letter of Credit and to accept and rely
upon Agent's instructions and agreements with respect to all
matters arising in connection with such Letter of Credit, the
application therefor or any acceptance thereof.
(c) In connection with all Letters of Credit
issued or caused to be issued by Agent under this Agreement, each
Borrower hereby appoints Agent, or its designee, as its attorney,
with full power and authority (i) to sign and/or endorse such
Borrower's name upon any warehouse or other receipts, letter of
credit applications and acceptances; (ii) to sign such Borrower's
name on bills of lading; (iii) to clear Inventory through the
United States of America Customs Department ("Customs") in the name
of such Borrower or Agent or Agent's designee, and to sign and
deliver to Customs officials powers of attorney in the name of such
Borrower for such purpose; and (iv) to complete in such Borrower's
name or Agent's name, or in the name of Agent's designee, any
order, sale or transaction, to obtain the necessary documents in
connection therewith, and to collect the proceeds thereof. Neither
Agent nor its attorneys will be liable for any acts or omissions or
for any error of judgment or mistakes of fact or law, except for
Agent's or its attorney's gross (not mere) negligence or willful
misconduct. This power, being coupled with an interest, is
irrevocable as long as any Letters of Credit remain outstanding.
(d) Each Lender shall to the extent of such
Lender's Commitment Percentage be deemed to have irrevocably
purchased an undivided participation in and shall provide to Agent,
as provided in Section 2.3, its Commitment Percentage of each
Domestic Revolving Loan made as a consequence of each disbursement
made with respect to any Letters of Credit. In the event that at
the time a disbursement is made with respect to a Letter of Credit,
the unpaid balance of Revolving Advances exceeds or would exceed,
with the making of such disbursement, the lesser of (i) the Maximum
Revolving Advance Amount or (ii) the Formula Amount minus, in each
case, the aggregate amount of outstanding Letters of Credit, and
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Exhibit 28.1
Page 33 of 93
such disbursement is not reimbursed by Borrowers within two (2)
Business Days, Agent shall promptly notify each Lender and upon
Agent's demand each Lender shall pay to Agent such Lender's
proportionate share of such unreimbursed disbursement together with
such Lender's proportionate share of Agent's unreimbursed costs and
expenses relating to such unreimbursed disbursement. Upon receipt
by Agent of a repayment from any Borrower of any amount disbursed
by Agent for which Agent had already been reimbursed by Lenders,
Agent shall deliver to each Lender that Lender's pro rata share of
such repayment. Each Lender's participation commitment shall
continue until the last to occur of any of the following events:
(A) Agent ceases to be obligated to issue Letters of Credit
hereunder; (B) no Letter of Credit issued hereunder remains
outstanding and uncancelled or (C) all Persons (other than the
applicable Borrower) have been fully reimbursed for all payments
made under or relating to Letters of Credit.
2.11. Additional Payments.
(a) Any sums expended by Agent due to any
Borrower's failure to perform or comply with its obligations under
this Agreement or any Other Document including, without limitation,
any Borrower's obligations under Sections 4.2, 4.4, 4.12, 4.13 and
4.14 may be charged to Borrowers' account as a Domestic Revolving
Loan and added to the Obligations.
(b) Agent shall have the right to effectuate
payment of the CDA Guarantee Fee by charging such fee to Borrowers'
account as a Domestic Revolving Loan.
III. INTEREST AND FEES.
3.1. Interest. Interest on Advances shall be
payable in arrears with respect to Domestic Loans, on the last day
of each calendar quarter, and with respect to Eurodollar Loans and
Alternate Currency Advances, at the end of each Interest Period,
or, for Eurodollar Loans and Alternate Currency Advances with an
Interest Period in excess of three months, on the date which is
three months after the first day of such Interest Period and on the
last day of such Interest Period. Interest charges shall be
computed on the principal amount of Advances outstanding at the end
of each day at a rate per annum equal to (a) with respect to
Revolving Advances, the Revolving Interest Rate and (b) with
respect to the Term Loan, the Term Loan Interest Rate. Whenever,
subsequent to the date of this Agreement, the Alternate Base Rate
is increased or decreased, the Contract Rate shall be similarly
changed without notice or demand of any kind by an amount equal to
the amount of such change in the Alternate Base Rate during the
time such change or changes remain in effect. Upon and after the
occurrence of an Event of Default, and during the continuation
thereof, the Obligations shall bear interest at the Contract Rate
plus two percent (2%) per annum (the "Default Rate").
3.2. Letter of Credit Fees.
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Exhibit 28.1
Page 34 of 93
Borrowers shall pay Agent for the ratable benefit of
Lenders (A) for issuing or causing the issuance of a standby Letter
of Credit, a fee computed at a rate per annum of one and one-half
percent (1.50%) on the undrawn face amount thereof from time to
time and (B) for issuing or causing the issuance of a Letter of
Credit that is not a standby Letter of Credit, a fee computed at a
rate per annum of one-half of one percent (.50%) on the undrawn
face amount thereof from time to time (the fees set forth in (A)
and (B) referred to as "Letter of Credit Fees"). Such fees and
charges shall be payable (i) in the case of any Letter of Credit,
on its opening, (ii) in the case of a standby Letter of Credit, (A)
monthly thereafter in advance and (B) upon each increase in the
face amount thereof and (iii) in the case of any Letter of Credit
that is not a standby Letter of Credit, at the time of each
increase in the face amount thereof. Borrowers shall also pay to
Agent when such charges are incurred by Agent or any issuing bank,
Agent's or any issuing bank's other customary charges payable in
connection with Letters of Credit, as in effect from time to time
(which charges have heretofore been furnished to Borrowing Agent
and any changes in such charges shall be furnished to Borrowing
Agent by Agent upon request). Any such charge in effect at the
time of a particular transaction shall be the charge for that
transaction, notwithstanding any subsequent change in Agent's or
any issuing bank's prevailing charges for that type of transaction.
All Letter of Credit Fees payable hereunder shall be deemed earned
in full on the date when the same are due and payable hereunder and
shall not be subject to rebate or proration upon the termination of
this Agreement for any reason.
3.3. Unused Line Fee. If, for any month during
the term of this Agreement, the average daily outstanding amount of
the Revolving Advances for each day of such month does not equal
the Maximum Revolving Advance Amount, then Borrowers shall pay to
Agent for the ratable benefit of Lenders a fee at a rate equal to
one-half of one percent (.50%) per annum on the amount by which the
Maximum Revolving Advance Amount exceeds such average daily
outstanding amount. Such fee shall be payable to Agent in arrears
on the last day of each calendar quarter.
3.4. Monitoring Fee. Borrowers shall pay to Agent
and/or any Lender on the first day of each month following any
month in which Agent and/or such Lender performs any monitoring
function, monitoring fees in an amount equal to $500.00 per day for
each person employed to perform such monitoring plus all reasonable
out-of-pocket costs and disbursements incurred by Agent and/or such
Lender in the performance of such monitoring; provided, however,
monitoring fees shall only be paid to a Lender which performs such
monitoring function jointly with Agent.
3.5. Computation of Interest and Fees. Interest
and fees hereunder shall be computed on the basis of a year of (i)
365 days for interest on Domestic Loans and fees and (ii) 360 days
for Eurodollar Loans and Alternate Currency Advances, in each case
for the actual number of days involved. If any payment to be made
hereunder becomes due and payable on a day other than a Business
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Exhibit 28.1
Page 35 of93
Day, the due date thereof shall be extended to the next succeeding
Business Day and interest thereon shall be payable at the
applicable Contract Rate during such extension.
3.6. Maximum Charges. In no event whatsoever
shall interest and other charges charged hereunder exceed the
highest rate permissible under law which a court of competent
jurisdiction shall, in a final determination, deem applicable
hereto. In the event that a court determines that Agent or any
Lender has received interest and other charges hereunder in excess
of such highest rate, such excess interest shall be first applied
to any unpaid principal balance owed by Borrowers, and if the then
remaining excess interest is greater than the previously unpaid
principal balance, the applicable recipient shall promptly refund
such excess amount to Borrowers and the provisions hereof shall be
deemed amended to provide for such permissible rate.
3.7. Increased Costs. In the event that any
applicable law, treaty or governmental regulation, or any change
therein or in the interpretation or application thereof, or
compliance by Agent or any Lender (for purposes of this Section
3.7, the term "Lender" shall include any Lender, any Lending Office
and any corporation or bank controlling any Lender) with any
request or directive (whether or not having the force of law) from
any central bank or other financial, monetary or other regulatory
authority, shall:
(a) subject Agent or any Lender to any tax
of any kind whatsoever with respect to this Agreement or change the
basis of taxation of payments to Agent or any Lender of principal,
fees, interest or any other amount payable hereunder or under any
of the other Documents (except for changes in the rate of tax on
the net income of Agent or any Lender imposed by the jurisdiction
where its principal office is located);
(b) impose, modify or hold applicable any
reserve, special deposit, assessment or similar requirement against
assets held by, or deposits in or for the account of, advances or
loans by, or other credit extended by, any office of Agent or any
Lender, including (without limitation) pursuant to Regulation D of
the Board of Governors of the Federal Reserve System; or
(c) impose on Agent or any Lender any other
condition with respect to this Agreement or any of the other
Documents;
and the result of any of the foregoing is to increase the cost to
Agent or any Lender of making, renewing or maintaining its Advances
hereunder (or its interest therein) by an amount that Agent or
such Lender reasonably deems to be material or to reduce the amount
of any payment (whether of principal, interest or otherwise) in
respect of any of the Advances by an amount that Agent or such
Lender deems to be material, then, in any such case Borrowers shall
promptly pay Agent or such Lender, upon its demand, such additional
amount as will compensate Agent or such Lender for such additional
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Exhibit 28.1
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cost or such reduction, as the case may be. Agent or such Lender
shall certify the amount of such additional cost or reduced amount
to Borrowing Agent and such certification shall be conclusive
absent manifest error.
3.8. Basis For Determining Interest Rate
Inadequate or Unfair. In the event that any Lender shall have
determined that:
(a) reasonable means do not exist for
ascertaining the Eurodollar Rate or the Alternate Currency Interest
Rate for any Interest Period; or
(b) deposits in Dollars or the applicable
Alternate Currency in the relevant amount and for the relevant
maturity are not available in the London interbank eurodollar
market or Eurocurrency market, as the case may be, with respect to
an outstanding Eurodollar Loan or Alternate Currency Advance, a
proposed Eurodollar Loan or Alternate Currency Advance, or a
proposed conversion of a Domestic Loan into a Eurodollar Loan or
Alternate Currency Advance;
then such Lender shall give Agent and Borrowing Agent prompt
written, telephonic or telegraphic notice of such determination.
If such notice is given, (i) any such requested Eurodollar Loan or
Alternate Currency Advance shall be made as a Domestic Loan, unless
Borrowing Agent shall notify Agent, no later than 10:00 a.m. (New
York time) three (3) Business Days prior to the date of such
proposed borrowing, that the request for such borrowing shall be
cancelled or made as an unaffected type of Eurodollar Loan or
Alternate Currency Advance, and (ii) any Eurodollar Loan, Alternate
Currency Advance or Domestic Loan which was to have been converted
to an affected type of Eurodollar Loan or Alternate Currency
Advance, shall be continued as or converted into a Domestic Loan
or, if Borrowing Agent shall notify Agent, no later than 10:00 a.m.
(New York time) three (3) Business Days prior to the proposed
conversion, shall be maintained as or converted to an unaffected
type of Eurodollar Loan or Alternate Currency Advance. Until such
notice has been withdrawn, Lenders shall have no obligation to make
an affected type of Eurodollar Loan or Alternate Currency Advance
or maintain outstanding affected Eurodollar Loans or Alternate
Currency Advances and Borrowers shall not have the right to convert
an Advance into an affected Eurodollar Loan or Alternate Currency
Advance.
3.9. Capital Adequacy.
(a) In the event that Agent or any Lender
shall have reasonably determined that any applicable law, rule,
regulation or guideline regarding capital adequacy, or any change
therein, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof,
or compliance by Agent or any Lender (for purposes of this Section
3.9, the term "Lender" shall include any Lender and any corporation
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Exhibit 28.1
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or bank controlling any Lender) with any request or directive
regarding capital adequacy (whether or not having the force of law)
of any such authority, central bank or comparable agency, has or
would have the effect of reducing the rate of return on Agent's or
any Lender's capital as a consequence of its obligations hereunder
to a level below that which Agent or such Lender could have
achieved but for such adoption, change or compliance (taking into
consideration Agent and each Lender's policies with respect to
capital adequacy) by an amount deemed by Agent or any Lender to be
material, then, from time to time, Borrowers shall pay upon demand
to Agent or such Lender such additional amount or amounts as will
compensate Agent or such Lender for such reduction. In determining
such amount or amounts, Agent or such Lender may use any reasonable
averaging or attribution methods. The protection of this Section
3.9 shall be available to Agent and each Lender regardless of any
possible contention of invalidity or inapplicability with respect
to the applicable law, regulation or condition.
(b) A certificate of Agent or any Lender
setting forth such amount or amounts as shall be necessary to
compensate Agent or such Lender with respect to Section 3.9(a) when
delivered to Borrowing Agent shall be conclusive absent manifest
error.
3.10. Survival. The obligations of Borrowers under
Sections 2.2(g), 2.2(h), 2.10, 3.7, 3.8, 3.9 and 15.1 shall survive
termination of this Agreement and the Other Documents and payment
in full of the Obligations.
IV. COLLATERAL: GENERAL TERMS
4.1. Security Interest in the Collateral. To
secure the prompt payment and performance to Agent and each Lender
of the Obligations, each Borrower hereby acknowledges and confirms
that Agent for the ratable benefit of each Lender has and shall
continue to have a Lien on all Collateral heretofore granted by
such Borrower pursuant to the Original Loan Agreement and to the
extent not otherwise granted thereunder assigns and pledges to
Agent for the ratable benefit of each Lender, and grants to Agent
for the ratable benefit of each Lender a continuing security
interest in and to, all of the Collateral, whether now owned or
existing or hereafter acquired or arising and wheresoever located.
Each Borrower shall mark its books and records as may be necessary
or appropriate to evidence, protect and perfect Agent's aforesaid
security interest and shall cause its financial statements to
reflect such security interest.
4.2. Perfection of Security Interest. Borrowers
shall take all action that may be necessary or desirable, or that
Agent may reasonably request, so as at all times to maintain the
validity, perfection, enforceability and priority of Agent's
security interest hereunder in the Collateral or to enable Agent to
protect, exercise or enforce its rights hereunder and in the
Collateral, including, but not limited to, (i) immediately
discharging all Liens other than Permitted Encumbrances, (ii)
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obtaining landlords' or mortgagees' lien waivers, (iii) delivering
to Agent, endorsed or accompanied by such instruments of assignment
as Agent may specify, and stamping or marking, in such manner as
Agent may specify, any and all chattel paper, instruments, letters
of credit and advices thereof and documents evidencing or forming a
part of the Collateral, (iv) entering into warehousing, lockbox and
other custodial arrangements satisfactory to Agent, and (v)
executing and delivering financing statements, instruments of
pledge, mortgages, notices and assignments, in each case in form
and substance reasonably satisfactory to Agent, relating to the
creation, validity, perfection, maintenance or continuation of
Agent's security interest under the Uniform Commercial Code or
other applicable law. All charges, expenses and fees Agent may
incur in doing any of the foregoing, and any local taxes relating
thereto, shall be charged to Borrowers' account as a Domestic
Revolving Loan and added to the Obligations, or, at Agent's option,
shall be paid to Agent immediately upon demand.
4.3. Disposition of Collateral. Each Borrower
will safeguard and protect all Collateral for Agent's and Lenders'
general account and make no disposition thereof whether by sale,
lease or otherwise except (a) the sale or lease of Inventory in the
ordinary course of business and (b) the disposition or transfer of
obsolete or worn-out Equipment in the ordinary course of business.
4.4. Preservation of Collateral. Following the
occurrence and during the continuance of an Event of Default, in
addition to the rights and remedies set forth in Section 11.1,
Agent: (a) may at any time take such steps as Agent deems necessary
to protect Agent's and Lenders' interest in and to preserve the
Collateral, including the hiring of such security guards or the
placing of other security protection measures as Agent may deem
appropriate; (b) may employ and maintain at any Borrower's premises
a custodian who shall have full authority to do all acts necessary
to protect Agent's and Lenders' interests in the Collateral; (c)
may lease warehouse facilities to which Agent may move all or part
of the Collateral; (d) may use any Borrower's owned or leased
lifts, hoists, trucks and other facilities or equipment for
handling or removing the Collateral; and (e) shall have, and is
hereby granted, a right of ingress and egress to the places where
the Collateral is located, and may proceed over and through any of
such Borrower's owned or leased property. Each Borrower shall
cooperate fully with all of Agent's efforts to preserve the
Collateral and will take such actions to preserve the Collateral as
Agent may reasonably direct. All of Agent's reasonable expenses of
preserving the Collateral, including any expenses relating to the
bonding of a custodian, shall be charged to Borrowers' account as a
Domestic Revolving Loan and added to the Obligations.
4.5. Ownership of Collateral. With respect to the
Collateral, at the time the Collateral becomes subject to Agent's
security interest hereunder: (a) each Borrower shall be the sole
owner of and fully authorized and able to sell, transfer, pledge
and/or grant a first priority security interest in each and every
item of its respective Collateral to Agent for the benefit of
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Exhibit 28.1
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Lenders; and, except for Permitted Encumbrances the Collateral
shall be free and clear of all Liens whatsoever; (b) each document
and agreement executed by any Borrower or delivered to Agent or any
Lender in connection with this Agreement shall be true and correct
in all material respects; (c) all signatures and endorsements of
any Borrower that appear on such documents and agreements shall be
genuine and such Borrower shall have full capacity to execute same;
and (d) the Equipment and Inventory of each Borrower shall be
located as set forth on Schedule 4.5 and shall not be removed from
such location(s) without the prior written consent of Agent except
with respect to (i) the sale or lease of Inventory in the ordinary
course of business and (ii) the sale of Equipment to the extent
permitted in Section 4.3.
4.6. Defense of Agent's and Lenders' Interests.
Until (a) indefeasible payment and performance in full of all of
the Obligations and (b) termination of this Agreement, Agent's and
Lenders' interests in the Collateral shall continue in full force
and effect. During such period no Borrower shall, without Agent's
prior written consent, pledge, sell (except Inventory in the
ordinary course of business and Equipment to the extent permitted
in Section 4.3), lease (except Inventory in the ordinary course of
business), assign, transfer, create or suffer to exist a Lien upon
or encumber or allow or suffer to be encumbered in any way, except
for Permitted Encumbrances, any part of the Collateral. Borrowers
shall defend Agent's and Lenders' interests in the Collateral
against any and all Persons whatsoever. At any time following
demand by Agent for payment of all Obligations in accordance with
the terms of this Agreement or upon Agent learning of the
occurrence of an event described in Section 9.5(d), Agent shall
have the right to take possession of the indicia of the Collateral
and the Collateral in whatever physical form contained, including
without limitation: labels, stationery, documents, instruments and
advertising materials. If Agent exercises this right to take
possession of the Collateral, Borrowers shall, upon demand,
assemble it in the best manner possible and make it available to
Agent at a place reasonably convenient to Agent. In addition, with
respect to all Collateral, Agent and Lenders shall be entitled
following the occurrence of an Event of Default to all of the
rights and remedies set forth herein and further provided by the
Uniform Commercial Code or other applicable law. At any time
following the occurrence and during the continuance of an Event of
Default, Borrowers shall, upon demand, and Agent may, at its
option, instruct all suppliers, carriers, forwarders, warehouses or
others receiving or holding cash, checks, Inventory, documents or
instruments in which Agent for the benefit of Lenders holds a
security interest to deliver same to Agent and/or subject to
Agent's order and if they shall come into any Borrower's
possession, they, and each of them, shall be held by such Borrower
in trust as Agent's and Lenders' trustee, and such Borrower will
immediately deliver them to Agent in their original form together
with any necessary endorsement.
4.7. Books and Records. Each Borrower shall (a)
keep proper books of record and account in which full, true and
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Exhibit 28.1
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correct entries will be made of all dealings or transactions of or
in relation to its business and affairs; (b) set up on its books
accruals with respect to all taxes, assessments, charges, levies
and claims; and (c) on a reasonably current basis set up on its
books, from its earnings, allowances against doubtful Receivables,
advances and investments and all other proper accruals (including
without limitation by reason of enumeration, accruals for premiums,
if any, due on required payments and accruals for depreciation,
obsolescence, or amortization of properties), which should be set
aside from such earnings in connection with its business. All
determinations pursuant to this Section 4.7 shall be made in
accordance with, or as required by, GAAP consistently applied in
the opinion of such independent public accountant as shall then be
regularly engaged by Borrowers.
4.8. Financial Disclosure. Borrowers hereby
irrevocably authorize and direct all accountants and auditors
employed by Borrowers at any time during the term of this Agreement
to exhibit and deliver to Agent and each Lender copies of any of
Borrowers' financial statements, trial balances or other accounting
records of any sort in each such accountant's or auditor's
possession, and to disclose to Agent and each Lender any
information such accountants may have concerning Borrowers'
financial status and business operations. Each Borrower hereby
authorizes all federal, state and municipal authorities to furnish
to Agent and each Lender copies of reports or examinations relating
to any Borrower, whether made by a Borrower or otherwise; however,
Agent and each Lender will attempt to obtain such information or
materials directly from Borrowers prior to obtaining such
information or materials from such accountants or authorities.
4.9. Compliance with Laws. Each Borrower shall
comply with all acts, rules, regulations and orders of any
legislative, administrative or judicial body or official applicable
to the Collateral or any part thereof or to the operation of any
Borrower's business the non-compliance with which would have a
material adverse effect on the Collateral, or the operations,
business or condition (financial or otherwise) of any Borrower.
Any Borrower may, however, contest or dispute any acts, rules,
regulations, orders and directions of those bodies or officials in
any reasonable manner, provided that any related Lien is inchoate
or stayed and sufficient reserves are established to the reasonable
satisfaction of Agent to protect Agent's lien on or security
interest in the Collateral. The Collateral at all times shall be
maintained in accordance with the requirements of all insurance
carriers which provide insurance with respect to the Collateral so
that such insurance shall remain in full force and effect.
4.10. Inspection of Premises. At all reasonable
times Agent or any Lender shall have full access to and the right
to audit, check, inspect and make abstracts and copies from
Borrowers' books, records, audits, correspondence and all other
papers relating to the Collateral and the operation of any
Borrower's business. Agent, any Lender and their respective agents
may enter upon any Borrower's premises at any time during business
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Exhibit 28.1
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hours and at any other reasonable time, and from time to time, for
the purpose of inspecting the Collateral and any and all records
pertaining thereto and the operation of any Borrower's business.
4.11. Insurance. Borrowers shall bear the full
risk of any loss of any nature whatsoever with respect to the
Collateral. At Borrowers' own cost and expense in amounts and with
carriers acceptable to Agent, Borrowers shall (a) keep all its
insurable properties and properties in which Borrowers have an
interest insured against the hazards of fire, flood and sprinkler
leakage, those hazards covered by extended coverage insurance and
such other hazards, and for such amounts, as is customary in the
case of companies engaged in businesses similar to Borrowers'
including, without limitation, business interruption insurance; (b)
maintain a bond in such amounts as is customary in the case of
companies engaged in businesses similar to Borrowers' insuring
against larceny, embezzlement or other criminal misappropriation of
an insured's officers and employees who may either singly or
jointly with others at any time have access to the assets or funds
of any Borrower either directly or through authority to draw upon
such funds or to direct generally the disposition of such assets;
(c) maintain public and product liability insurance against claims
for personal injury, death or property damage suffered by others;
(d) maintain all such worker's compensation or similar insurance as
may be required under the laws of any state or jurisdiction in
which any Borrower is engaged in business; (e) furnish Agent with
(i) copies of all policies and evidence of the maintenance of such
policies by the renewal thereof at least thirty (30) days before
any expiration date, and (ii) appropriate loss payable endorsements
in form and substance satisfactory to Agent, naming Agent as a
co-insured and loss payee as its interests may appear with respect
to all insurance coverage referred to in clauses (a) and (b) above,
and providing (A) that all proceeds to which Borrowers are entitled
to thereunder shall be payable to Agent and Borrowers, jointly, (B)
that Agent's and Lenders' interest shall not be affected by any act
or neglect of the named insured or owner of the property described
in such policy, and (C) that such policy and loss payable clauses
may not be cancelled, amended or terminated unless at least thirty
(30) days' prior written notice is given to Agent. In the event of
any loss thereunder, the carriers named therein hereby are directed
by Agent, Lenders and Borrowers to make payment for such loss to
Borrowers and Agent jointly. If any insurance losses are paid by
check, draft or other instrument payable to any Borrower and Agent
jointly, Agent may endorse such Borrower's name thereon and do such
other things as Agent may deem advisable to reduce the same to
cash. Agent is hereby authorized to adjust and compromise claims
under insurance coverage referred to in clauses (a) and (b) above
which authority may be utilized by Agent only after the occurrence
and during the continuation of an Event of Default. Borrowers
shall obtain Agent's consent to any adjustment or settlement
relating to claims in excess of $100,000 other than claims relating
to product shipment damage or losses provided that Agent will not
unreasonably withhold its consent to such adjustments and
settlements. All loss recoveries received by Agent upon any such
insurance may be applied to the Obligations, in such order as Agent
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Exhibit 28.1
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in its sole discretion shall determine. Any surplus shall be paid
by Agent to Borrowers or applied as may be otherwise required by
law. Any deficiency thereon shall be paid by Borrowers to Agent
for the account of itself and Lenders, on demand. Anything
hereinabove to the contrary notwithstanding, and subject to the
fulfillment of the conditions set forth below, Agent shall remit to
Borrowers for the purpose of repairing, replacing or restoring the
insured property which was the subject of the loss, insurance
proceeds received by Agent during any calendar year under insurance
policies procured and maintained by Borrowers which insure
Borrowers' insurable properties to the extent such insurance
proceeds do not exceed $3,000,000 in the aggregate during such
calendar year or $2,000,000 per occurrence. In the event the
amount of insurance proceeds received by Agent for any occurrence
exceeds $2,000,000 or in the event Borrowers have previously
received (or, after giving effect to any proposed remittance by
Agent to Borrowers would receive) insurance proceeds which equal
or exceed $3,000,000 in the aggregate during any calendar year,
then Agent may, in its sole discretion, which discretion shall be
exercised in a reasonable manner, either remit the insurance
proceeds to Borrowers upon Borrowers providing Agent with evidence
reasonably satisfactory to Agent that the insurance proceeds will
be used by Borrowers to repair, replace or restore the insured
property which was the subject of the insurable loss, or apply the
proceeds to the Obligations, as aforesaid. The agreement of Agent
to remit insurance proceeds in the manner above provided shall be
subject in each instance to satisfaction of each of the following
conditions: (x) no Event of Default shall then have occurred and be
continuing, and (y) Borrowers shall use such insurance proceeds to
repair, replace or restore the insurable property which was the
subject of the insurable loss and for no other purpose.
4.12. Failure to Pay Insurance. If Borrowers fail
to obtain insurance as hereinabove provided, or to keep the same in
force, Agent, if Agent so elects, may obtain such insurance and pay
the premium therefor for Borrowers' account, and charge Borrowers'
account as a Domestic Revolving Loan therefor and such expenses so
paid shall be part of the Obligations.
4.13. Payment of Taxes. Borrowers will pay, when
due, all Charges or Claims lawfully levied or assessed upon
Borrowers or any of the Collateral including, without limitation,
real and personal property taxes, assessments and charges and all
franchise, income, employment, social security benefits,
withholding, and sales taxes. If any Charge (other than taxes on
the net income of Agent or any Lender imposed by the jurisdiction
where its principal office is located) by any governmental
authority is or may be imposed on or as a result of any transaction
between Borrowers, Agent and Lenders which Agent or any Lender may
be required to withhold or pay or if any Charges remain unpaid
after the date fixed for their payment, or if any Claim shall be
made which, in Agent's reasonable opinion, may possibly create a
valid Lien on the Collateral, Agent may upon five (5) days prior
notice to Borrowers pay the Liens, Charges or Claims and Borrowers
hereby indemnify and hold harmless Agent and each Lender in respect
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Exhibit 28.1
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thereof. Agent will not pay any Liens, Charges or Claims to the
extent that Borrowers have contested or disputed those Liens,
Charges and Claims in good faith, by expeditious protest,
administrative or judicial appeal or similar proceeding provided
that any related tax lien is stayed and sufficient reserves are
established to the reasonable satisfaction of Agent to protect
Agent's security interest in or Lien on the Collateral. The amount
of any payment by Agent under this Section 4.13 shall be charged to
Borrowers' account as a Domestic Revolving Loan and added to the
Obligations and, until Borrowers shall furnish Agent and Lenders
with an indemnity therefor (or supply Agent with evidence
satisfactory to Agent that due provision for the payment thereof
has been made), Agent and Lenders may hold without interest any
amounts standing to Borrowers' credit and Agent shall retain its
security interest in any and all Collateral held by Agent.
4.14. Payment of Leasehold Obligations. Each
Borrower shall at all times pay, when and as due, its rental
obligations under all leases under which it is a tenant, and shall
otherwise comply, in all material respects, with all other terms of
such leases and keep them in full force and effect.
4.15. Receivables.
(a) Nature of Receivables. Each of the
Receivables shall be a bona fide and valid account representing a
bona fide indebtedness incurred by the Customer therein named, for
a fixed sum as set forth in the invoice relating thereto (provided
immaterial or unintentional invoice errors shall not be deemed to
be a breach hereof) with respect to an absolute sale or lease and
delivery of goods upon stated terms of the applicable Borrower, or
work, labor or services theretofore rendered by such Borrower as of
the date each Receivable is created. Each Receivable shall be due
and owing in accordance with such Borrower's standard terms of sale
without dispute, setoff or counterclaim except as may be stated on
the accounts receivable schedules delivered by Borrowing Agent to
Agent.
(b) Solvency of Customers. Each Customer,
to the best of Borrowers' knowledge, as of the date each Receivable
is created, is and will be solvent and able to pay all Receivables
on which such Customer is obligated in full when due or with
respect to such Customers of Borrowers who are not solvent, the
applicable Borrower has set up on its books and in its financial
records bad debt reserves adequate to cover such Receivables.
(c) Locations of Borrowers. Each Borrower's
chief executive office is located at the address set forth in
Schedule 4.15(c). Until written notice is given to Agent by
Borrowing Agent of any other office at which any Borrower keeps its
records pertaining to Receivables, all such records shall be kept
at such executive office.
(d) Collection of Receivables. Upon notice
from Agent which may be given at any time following the occurrence
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and during the continuance of an Event of Default, Borrowers will,
at Borrowers' sole cost and expense, but on Agent's behalf and for
Agent's account, collect as Agent's and Lenders' property and in
trust for Lenders all amounts received on Receivables, and shall
not commingle such collections with Borrowers' funds or use the
same except to pay Obligations. Borrowers shall, upon request,
deliver to Agent in original form and on the date of receipt
thereof, all checks, drafts, notes, money orders, acceptances, cash
and other evidences of Indebtedness.
(e) Notification of Assignment of
Receivables. At any time following the occurrence and during the
continuance of an Event of Default, Agent shall have the right to
send notice of the assignment of, and Agent's security interest in,
the Receivables to any and all Customers or any third party holding
or otherwise concerned with any of the Collateral and, thereafter,
Agent shall have the sole right to collect the Receivables, take
possession of the Collateral, or both. Agent's actual collection
expenses, including, but not limited to, stationery and postage,
telephone and telegraph, secretarial and clerical expenses and the
salaries of any collection personnel used for collection, may be
charged to Borrowers' account as a Domestic Revolving Loan and
added to the Obligations.
(f) Power of Agent to Act on Borrowers'
Behalf. Agent shall have the right to receive, endorse, assign
and/or deliver in the name of Agent or any Borrower any and all
checks, drafts and other instruments for the payment of money
relating to the Receivables, and each Borrower hereby waives notice
of presentment, protest and non-payment of any instrument so
endorsed. Each Borrower hereby constitutes Agent or Agent's
designee as such Borrower's attorney with power (i) to endorse such
Borrower's name upon any notes, acceptances, checks, drafts, money
orders or other evidences of payment or Collateral; (ii) to sign
such Borrower's name on any invoice or bill of lading relating to
any of the Receivables, drafts against Customers, assignments and
verifications of Receivables; (iii) to send verifications of
Receivables to any Customer; (iv) to sign such Borrower's name on
all financing statements or any other documents or instruments
deemed necessary or appropriate by Agent to preserve, protect, or
perfect Agent's and Lenders' interest in the Collateral and to file
same; (v) to demand payment of the Receivables; (vi) to enforce
payment of the Receivables by legal proceedings or otherwise; (vii)
to exercise all of such Borrower's rights and remedies with respect
to the collection of the Receivables and any other Collateral;
(viii) to settle, adjust, compromise, extend or renew the
Receivables; (ix) to settle, adjust or compromise any legal
proceedings brought to collect Receivables; (x) to prepare, file
and sign such Borrower's name on a proof of claim in bankruptcy or
similar document against any Customer; (xi) to prepare, file and
sign such Borrower's name on any notice of Lien, assignment or
satisfaction of Lien or similar document in connection with the
Receivables; and (xii) to do all other acts and things necessary to
carry out this Agreement. Agent shall only exercise the powers
conferred by clauses (v), (vi), (vii), (viii) and (ix) following
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Exhibit 28.1
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the occurrence and during the continuation of an Event of Default.
All acts of said attorney or designee are hereby ratified and
approved, and said attorney or designee shall not be liable for any
acts of omission or commission nor for any error of judgment or
mistake of fact or of law, unless done maliciously or with gross
(not mere) negligence; this power being coupled with an interest is
irrevocable while any of the Obligations remain unpaid. Agent
shall have the right at any time following the occurrence and
during the continuation of an Event of Default, to change the
address for delivery of mail addressed to any Borrower to such
address as Agent may designate.
(g) No Liability. Neither Agent nor any
Lender shall, under any circumstances or in any event whatsoever,
have any liability for any error or omission or delay of any kind
occurring in the settlement, collection or payment of any of the
Receivables or any instrument received in payment thereof, or for
any damage resulting therefrom except for its willful misconduct.
Following the occurrence and during the continuation of an Event of
Default, Agent may, without notice or consent from Borrowers, sue
upon or otherwise collect, extend the time of payment of,
compromise or settle for cash, credit or upon any terms any of the
Receivables or any other securities, instruments or insurance
applicable thereto and/or release any obligor thereof. Agent is
authorized and empowered to accept following the occurrence and
during the continuance of an Event of Default the return of the
goods represented by any of the Receivables, without notice to or
consent by Borrowers, all without discharging or in any way
affecting Borrowers' liability hereunder. Any liability under this
Section 4.15(g) shall be subject to the limitations contained in
Section 16.10.
(h) Establishment of a Lockbox Account,
Dominion Account. All proceeds of Collateral shall, at the
direction of Agent which direction will only be given following the
occurrence and during the continuance of an Event of Default, be
deposited by Borrowers into lockbox accounts, dominion accounts or
such other "blocked accounts" ("Blocked Accounts") as Agent may
require pursuant to an arrangement with such banks as may be
selected by Borrowers and be acceptable to Agent. Borrowers shall
issue to any such bank, an irrevocable letter of instruction
directing said bank to transfer such funds so deposited to Agent,
either to any account maintained by Agent at said bank or by wire
transfer to appropriate account(s) of Agent. All funds deposited
in any Blocked Account shall immediately become the property of
Lenders and Borrowers shall obtain the agreement by such bank to
waive any offset rights against the funds so deposited. Neither
Agent nor any Lender assumes any responsibility for any Blocked
Account arrangement, including, without limitation, any claim of
accord and satisfaction or release with respect to deposits
accepted by any bank thereunder. Alternatively, Agent may
establish depository accounts ("Depository Accounts") in the name
of Agent at a bank or banks for the deposit of such funds and
Borrowers shall deposit all proceeds of Collateral or cause same to
be deposited, in kind, in such Depository Accounts in lieu of
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Exhibit 28.1
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depositing same to the Blocked Accounts. Upon Agent's direction,
which direction will only be given following the occurrence of an
Event of Default, Borrowers shall cause all collections and
proceeds of Receivables received by GDC Canada and GDC United
Kingdom in excess of such amounts which are retained by GDC Canada
and GDC United Kingdom in order to meet their respective working
capital requirements, to be deposited by GDC Canada and GDC United
Kingdom, respectively, in the Blocked Accounts and Borrowers shall
direct any bank where any Blocked Account is located to transfer
such funds so deposited to Agent. In the event Agent requests that
all collections and proceeds of collections of Receivables received
by GDC Canada and GDC United Kingdom be deposited by GDC Canada and
GDC United Kingdom in the Blocked Accounts, Borrowers will cause
such collections and proceeds to be deposited in the Blocked
Accounts and Borrowers shall direct any bank where any Blocked
Account is located to transfer such funds so deposited to Agent.
(i) Adjustments. No Borrower will, without
Agent's consent, compromise or adjust any Receivables (or extend
the time for payment thereof) or accept any returns of merchandise
or grant any additional discounts, allowances or credits thereon
except for those compromises, adjustments, returns, discounts,
credits and allowances as have been heretofore customary in the
business of Borrowers.
4.16. Inventory. All Inventory has been, and will
be, produced by Borrowers, to the extent applicable, in accordance
with the Federal Fair Labor Standards Act of 1938, as amended, and
all rules, regulations and orders thereunder.
4.17. Maintenance of Equipment. The Equipment
shall be maintained in good operating condition and repair
(reasonable wear and tear excepted) and all necessary replacements
of and repairs thereto shall be made so that the value and
operating efficiency of the Equipment shall be maintained and
preserved. No Borrower shall use or operate the Equipment in
violation of any law, statutes, ordinances, codes, rules or
regulations. Borrowers shall have the right to sell Equipment only
to the extent set forth in Section 4.3.
4.18. Exculpation of Liability. Except as
specifically provided in this Agreement, nothing herein contained
shall be construed to constitute Agent or any Lender as any
Borrower's agent for any purpose whatsoever, nor shall Agent or any
Lender be responsible or liable for any shortage, discrepancy,
damage, loss or destruction of any part of the Collateral wherever
the same may be located and regardless of the cause thereof.
Neither Agent nor any Lender, whether by anything herein or in any
assignment or otherwise, assumes any Borrower's obligations under
any contract or agreement assigned to Agent or any Lender, and
neither Agent nor any Lender shall be responsible in any way for
the performance by any Borrower of any of the terms and conditions
thereof.
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4.19. Environmental Matters. (a) Borrowers will
ensure that the Real Property remains in compliance with all
applicable Environmental Laws and they will not place or permit to
be placed any Hazardous Substances on any Real Property except as
not prohibited by applicable law or appropriate governmental
authorities.
(b) Borrowers will establish and maintain a
system to assure and monitor continued compliance with all
applicable Environmental Laws which system shall include periodic
reviews of such compliance.
(c) Borrowers will (i) employ in connection
with the use of the Real Property appropriate technology necessary
to maintain compliance with any applicable Environmental Laws and
(ii) dispose of any and all Hazardous Waste generated at the Real
Property only at facilities and with carriers that maintain valid
permits under RCRA and any other applicable Environmental Laws.
Borrowers shall use their best efforts to obtain certificates of
disposal, such as hazardous waste manifest receipts, from all
treatment, transport, storage or disposal facilities or operators
employed by Borrowers in connection with the transport or disposal
of any Hazardous Waste generated at the Real Property.
(d) In the event any Borrower obtains, gives
or receives notice of any Release or threat of Release of a
reportable quantity of any Hazardous Substances at any Real
Property (any such event being hereinafter referred to as a
"Hazardous Discharge") or receives any notice of violation, request
for information, notification that it is potentially responsible
for investigation or cleanup of environmental conditions at any
Real Property, demand letter or complaint, order, citation, or
other written notice with regard to any Hazardous Discharge or
violation of Environmental Laws affecting the Real Property or any
Borrower's interest therein (any of the foregoing is referred to
herein as an "Environmental Complaint") from any Person or entity,
including any state agency responsible in whole or in part for
environmental matters in the state in which the Real Property is
located or the United States Environmental Protection Agency (any
such person or entity hereinafter the "Authority"), then such
Borrower shall, within five (5) Business Days, give written notice
of same to Agent detailing facts and circumstances of which such
Borrower is aware giving rise to such Hazardous Discharge or
Environmental Complaint. Such information is to be provided to
allow Agent to protect its security interest in the Collateral and
is not intended to create nor shall it create any obligation upon
Agent or Lenders with respect thereto.
(e) Borrowers shall promptly forward to
Agent copies of any request for information, notification of
potential liability, or demand letter relating to potential
responsibility with respect to the investigation or cleanup of
Hazardous Substances at any other site owned, operated or used by
any Borrower to dispose of Hazardous Substances and shall continue
to forward copies of correspondence between such Borrower and the
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applicable Authority regarding such claims to Agent until the claim
is settled. Borrowers shall promptly forward to Agent copies of
all documents and reports concerning a Hazardous Discharge at any
Real Property that any Borrower is required to file under any
Environmental Laws. Such information is to be provided solely to
allow Agent to protect Agent's security interest in the Collateral.
(f) Borrowers shall respond promptly to any
Hazardous Discharge or Environmental Complaint and take all
necessary action in order to safeguard the health of any Person and
to avoid subjecting the Collateral or Real Property to any Lien.
If any Borrower shall fail to respond promptly to any Hazardous
Discharge or Environmental Complaint or any Borrower shall fail to
comply with any of the requirements of any Environmental Laws,
Agent on behalf of Lenders may, but without the obligation to do
so, for the sole purpose of protecting Agent's and Lenders'
interest in Collateral: (A) give such notices or (B) enter onto
the Real Property (or authorize third parties to enter onto the
Real Property) and take such actions as Agent (or such third
parties as directed by Agent) deem reasonably necessary or
advisable, to clean up, remove, mitigate or otherwise deal with any
such Hazardous Discharge or Environmental Complaint. All
reasonable costs and expenses incurred by Agent and Lenders (or
such third parties) in the exercise of any such rights, including
any sums paid in connection with any judicial or administrative
investigation or proceedings, fines and penalties, together with
interest thereon from the date expended at the Default Rate for
Domestic Revolving Loans shall be paid upon demand by Borrowers,
and until paid shall be added to and become a part of the
Obligations secured by the Liens created by the terms of this
Agreement or any other agreement between Agent, any Lender and any
Borrower.
(g) Promptly upon the reasonable written
request of Agent from time to time, Borrowers shall provide Agent,
at Borrowers' expense, with an environmental site assessment or
environmental audit report prepared by an environmental engineering
firm acceptable in the reasonable opinion of Agent, to assess with
a reasonable degree of certainty the existence of a Hazardous
Discharge and the potential costs in connection with abatement,
cleanup and removal of any Hazardous Substances found on, under, at
or within any Real Property. Any report or investigation of such
Hazardous Discharge proposed and acceptable to an appropriate
Authority that is charged to oversee the clean-up of such Hazardous
Discharge shall be acceptable to Agent. If such estimates,
individually or in the aggregate, exceed $100,000, Agent shall have
the right to require Borrowers to post a bond, letter of credit or
other security reasonably satisfactory to Agent to secure payment
of these costs and expenses.
(h) Borrowers shall defend and indemnify
Agent, Lenders and their respective employees, agents, directors
and officers and hold Agent, Lenders and their respective
employees, agents, directors and officers harmless from and against
all loss, liability, damage and expense, claims, costs, fines and
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penalties, including attorney's fees, suffered or incurred by
Agent, any Lender or any of their respective employees, agents,
directors and officers under or on account of any Environmental
Laws, including, without limitation, the assertion of any Lien
thereunder, with respect to any Hazardous Discharge, the presence
of any Hazardous Substances affecting any Real Property, whether or
not the same originates or emerges from any Real Property or any
contiguous real estate, including any loss of value of any Real
Property as a result of the foregoing except to the extent such
loss, liability, damage and expense is attributable to any
Hazardous Discharge resulting from actions on the part of Agent or
any Lender. Borrowers' obligations under this Section 4.19 shall
arise upon the discovery of the presence of any Hazardous
Substances at any Real Property, whether or not any federal, state,
or local environmental agency has taken or threatened any action in
connection with the presence of any Hazardous Substances.
Borrowers' obligations and the indemnifications hereunder shall
survive the termination of this Agreement.
4.20. Financing Statements. Except for the
financing statements filed by BNYCC which have been assigned to
Agent, financing statements filed by Agent and the financing
statements described on Schedule 1.2, no financing statement
covering any of the Collateral or any proceeds thereof is on file
in any public office.
V. REPRESENTATIONS AND WARRANTIES.
Each Borrower represents and warrants as follows:
5.1. Authority. Each Borrower has full power,
authority and legal right to enter into this Agreement and the
Other Documents executed or to be executed by it and to perform all
of its respective Obligations hereunder and thereunder. The
execution, delivery and performance hereof and of the Other
Documents (a) are within each Borrower's respective corporate
powers, have been duly authorized, are not in contravention of law,
any judgment or the terms of such Borrower's by-laws, certificate
of incorporation or other applicable documents relating to such
Borrower's formation or to the conduct of such Borrower's business
or of any material agreement or undertaking to which such Borrower
or any of its Subsidiaries is a party or by which such Borrower or
any of its Subsidiaries is bound, and (b) will not conflict with or
result in any breach of any of the provisions of or constitute a
default under or result in the creation of any Lien except
Permitted Encumbrances upon any asset of any Borrower or any of its
Subsidiaries under the provisions of any agreement, charter
document, instrument, by-law, or other instrument to which any
Borrower or any of its Subsidiaries is a party or by which it may
be bound.
5.2. Formation and Qualification. (a) Each
Borrower is duly incorporated and in good standing under the laws
of the state listed opposite its name on Schedule 5.2(a) and is
qualified to do business and is in good standing in the states
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Exhibit 28.1
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listed opposite its name on Schedule 5.2(a) which constitute all
states in which qualification and good standing are necessary for
each Borrower to conduct its business and own its property and
where the failure to so qualify would have a Material Adverse
Effect on Borrowers, GDC Canada and GDC United Kingdom or their
businesses taken as a whole. Each Borrower has delivered to Agent
true and complete copies of its certificate of incorporation and
by-laws and will promptly notify Agent of any amendment or changes
thereto.
(b) The only Subsidiaries of each Borrower
are listed on Schedule 5.2(b). GDC Netherlands does not conduct
any business. GDC beneficially owns one hundred percent (100%) of
the capital stock of GDC Canada and the percentage listed on
Schedule 5.2(b) next to each other Subsidiary of the capital stock
of such Subsidiary.
5.3. Survival of Representations and Warranties.
All representations and warranties of each Borrower contained in
this Agreement and the Other Documents shall be true at the time
of such Borrower's execution of this Agreement and the Other
Documents, and shall survive the execution, delivery and acceptance
thereof by the parties thereto and the closing of the transactions
described therein or related thereto.
5.4. Tax Returns. Each Borrower's federal tax
identification number is listed opposite its name on Schedule 5.4.
Each Borrower has filed all federal, state and local tax returns
and other reports it is required by law to file and has paid all
taxes, assessments, fees and other governmental charges that are
due and payable. Federal, state and local income tax returns of
Borrowers have been examined and reported upon by the appropriate
taxing authority or closed by applicable statute and satisfied for
all fiscal years prior to and including the fiscal year ending
September 30, 1983. The provision for taxes on the books of
Borrowers are adequate for all years not closed by applicable
statutes, and for their current fiscal year, and no Borrower has
knowledge of any deficiency or additional assessment in connection
therewith not provided for on its books.
5.5. Financial Statements.
(a) The balance sheet of GDC and its
Subsidiaries on a consolidated basis as of March 31, 1994 (the
"Balance Sheet") furnished to Lenders fairly presents the financial
condition of GDC and its Subsidiaries on a consolidated basis as of
such date and has been prepared in accordance with GAAP,
consistently applied. The Balance Sheet has been certified as
fairly presenting the financial condition of GDC and its
Subsidiaries as of March 31, 1994 by the Chief Financial Officer
and Controller of GDC. All financial statements referred to in
this Section 5.5(a), including the related schedules and notes
thereto, have been prepared in accordance with GAAP, except as may
be disclosed in such financial statements.
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(b) The twelve-month cash flow projections
of GDC and its Subsidiaries on a consolidated basis for the period
beginning on October 1, 1993 and ending on September 30, 1994 and
their projected balance sheets as of the Closing Date, copies of
which are annexed hereto as Exhibit 5.5(b) (the "Projections") were
certified by the Chief Financial Officer of GDC, are based on
underlying assumptions which provide a reasonable basis for the
projections contained therein and reflect Borrowers' judgment based
on present circumstances of the most likely set of conditions and
course of action for the projected period.
5.6. Corporate Name. Except as set forth on
Schedule 5.6, no Borrower has been known by any other corporate
name in the past five years or sells Inventory under any other name
nor has any Borrower been the surviving corporation of a merger or
consolidation or acquired all or substantially all of the assets of
any Person during the preceding five (5) years.
5.7. O.S.H.A. and Environmental Compliance.
(a) Each Borrower has duly complied with,
and its facilities, business, assets, property, leaseholds and
Equipment are in compliance in all material respects with, the
provisions of the Federal Occupational Safety and Health Act, the
Environmental Protection Act, RCRA, CERCLA and all other
Environmental Laws; and there have been no outstanding citations,
notices or orders of non-compliance issued to any Borrower or
relating to its business, assets, property, leaseholds or equipment
under any such laws, rules or regulations.
(b) Each Borrower has been issued all
required federal, state and local licenses, certificates and
permits relating to all applicable Environmental Laws.
(c) (i) There are no visible signs of
releases, spills, discharges, leaks or disposal (collectively
referred to as "Releases") of Hazardous Substances at, upon, under
or within any Real Property; (ii) there are no underground storage
tanks or polychlorinated biphenyls on any Real Property; (iii) none
of the Real Property has been used as a treatment, storage or
disposal facility of Hazardous Waste; and (iv) no Hazardous
Substances are present on any Real Property, excepting such
quantities as are handled in accordance with all applicable
manufacturer's instructions and governmental regulations and in
proper storage containers and as are necessary for the operation of
the commercial business of Borrowers or of their tenants.
5.8. Solvency; No Litigation, Violation, Indebted-
ness or Default. (a) Borrowers on a consolidated basis are
solvent, able to pay their debts as they mature, have capital
sufficient to carry on their businesses and all businesses in which
they are about to engage, and (i) as of the Closing Date, the fair
saleable value of their assets (calculated on a going concern
basis) are in excess of the amount of their liabilities and (ii)
immediately subsequent to the Closing Date, the fair saleable value
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Exhibit 28.1
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of their assets (calculated on a going concern basis) will be in
excess of the amount of their liabilities.
Except as disclosed in Schedule 5.8(b),
no Borrower has (i) pending or to the best of Borrowers' knowledge,
threatened litigation, actions or proceedings which (x) if
adversely determined would, in Borrowers' reasonable opinion, be
likely to have a Material Adverse Effect on Borrowers, GDC Canada
and GDC United Kingdom taken as a whole, or the Collateral taken as
a whole, or the ability of such Borrower to perform this Agreement,
or (y) questions the validity or enforceability of any of the
Documents, and (ii) any liabilities or Indebtedness for borrowed
money other than the Obligations.
(c) No Borrower is in violation of any
applicable statute, regulation or ordinance in any respect where
such violation would have a Material Adverse Effect on Borrowers,
GDC Canada and GDC United Kingdom taken as a whole, nor is any
Borrower in violation of any order of any court, governmental
authority or arbitration board or tribunal.
(d) No Borrower or any member of the
Controlled Group maintains or contributes to any Plan other than
those listed on Schedule 5.8(d). No Borrower or any member of the
Controlled Group has received notice that it is not in full
compliance with any of the requirements of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or its
regulations, and (i) no Borrower or any member of the Controlled
Group has engaged in any Prohibited Transactions as defined in
Section 406 of ERISA or Section 4975 of the Code, (ii) each
Borrower and each member of the Controlled Group has met all
applicable minimum funding requirements under Section 302 of ERISA
in respect of its Plans and no funding requirements have been
postponed or delayed, (iii) no Borrower or any member of the
Controlled Group has knowledge of any event or occurrence which
would cause the PBGC to institute proceedings under Title IV of
ERISA to terminate or appoint a trustee to administer any Plan,
(iv) there exists no event described in Section 4043 of ERISA,
excluding subsections 4043(b)(2) and 4043(b)(3) thereof, for which
the thirty (30) day notice period contained in 29 CFR section 2615.3 has
not been waived, (v) no Borrower or any member of the Controlled
Group has any fiduciary responsibility for investments with respect
to any plan existing for the benefit of persons other than its
employees or former employees, (vi) no Borrower has withdrawn,
completely or partially, from any Multiemployer Plan so as to incur
liability under the Multiemployer Pension Plan Amendments Act of
1980 and (vii) no Reportable Event (as such term is defined in
ERISA) has occurred.
5.9. Patents, Trademarks, Copyrights and Licenses.
All patents, patent applications, patent licenses, trademarks,
trademark applications, trademark licenses, service marks, service
mark applications, service mark licenses, copyrights, copyright
applications, copyright licenses, tradenames, assumed names, trade
secrets and licenses owned or utilized by each Borrower are set
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Exhibit 28.1
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forth on Schedule 5.9(a), have been, to the best of Borrowers'
knowledge, duly registered or filed with the governmental
authorities set forth on Schedule 5.9(a) and constitute all of the
intellectual property rights which are useful or necessary for the
operation of its business; there is no objection to or pending
challenge to the validity of any such material patent, trademark,
service mark, copyright, tradename, trade secret or license and no
Borrower is aware of any grounds for any challenge, except as set
forth in Schedule 5.9(b). Each patent, patent application, patent
license, trademark, trademark application, trademark license,
service mark, service mark application, service mark license,
copyright, copyright application and copyright license owned or
held by each Borrower and all trade secrets used by each Borrower
consists of original material or property developed by Borrowers or
was lawfully acquired by Borrowers from the proper and lawful owner
thereof. Each of such items which are necessary for the operation
of the businesses of Borrowers and Guarantors is being maintained
so as to preserve the value thereof from the date of creation or
acquisition thereof, subject only to Permitted Encumbrances. With
respect to software used by Borrowers, Borrowers are in possession
of the source and object codes related to each piece of software or
are the beneficiary of a source code escrow agreement, each such
source code escrow agreement being listed on Schedule 5.9(c) .
5.10. Licenses and Permits. Except as set forth in
Schedule 5.10, each Borrower (a) is in compliance with and (b) has
procured and is now in possession of, all material licenses or
permits required by any applicable federal, state, provincial or
local law or regulation for the operation of its business in each
jurisdiction wherein it is now conducting or proposes to conduct
business and where the failure to procure such licenses or permits
would have a Material Adverse Effect on the Borrowers, GDC Canada
and GDC United Kingdom taken as a whole.
5.11. Default of Indebtedness. No Borrower is in
default in the payment of the principal of or interest on any
Indebtedness for borrowed money or under any instrument or
agreement under or subject to which any Indebtedness for borrowed
money has been issued and no event has occurred under the
provisions of any such instrument or agreement which with or
without the lapse of time or the giving of notice, or both,
constitutes or would constitute an event of default thereunder.
5.12. No Default. No Borrower is in default in the
payment or performance of any of its material contractual
obligations.
5.13. No Burdensome Restrictions. Except as set
forth in Schedule 5.13, no Borrower is a party to any contract or
agreement the performance of which would have a Material Adverse
Effect on Borrowers, GDC Canada and GDC United Kingdom taken as a
whole. No Borrower has agreed or consented to cause or permit in
the future (upon the happening of a contingency or otherwise) any
of its property, whether now owned or hereafter acquired, to be
subject to a Lien which is not a Permitted Encumbrance.
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5.14. No Labor Disputes. No Borrower is involved
in any labor dispute; there are no strikes or walkouts or union
organization of any Borrower's employees threatened or in existence
and no labor contract is scheduled to expire during the Term other
than as set forth on Schedule 5.14.
5.15. Margin Regulations. No Borrower is engaged,
nor will it engage, principally or as one of its important
activities, in the business of extending credit for the purpose of
"purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U or
Regulation G of the Board of Governors of the Federal Reserve
System as now and from time to time hereafter in effect. No part
of the proceeds of any Advance will be used for "purchasing" or
"carrying" "margin stock" as defined in Regulation U of such Board
of Governors.
5.16. Investment Company Act. No Borrower is an
"investment company" registered or required to be registered under
the Investment Company Act of 1940, as amended, nor is it
controlled by such a company.
5.17. Disclosure. No representation or warranty
made by any Borrower in this Agreement or in any financial
statement, report, certificate or Other Document contains any
untrue statement of a material fact or omits to state any material
fact necessary to make the statements herein or therein not
misleading. Except as set forth in Schedule 5.17, there is no fact
known to any Borrower or which reasonably should be known to any
Borrower excluding matters of general economic or political nature
which Borrowers have not disclosed to Agent in writing with respect
to the transactions contemplated by this Agreement which would have
a Material Adverse Effect on Borrowers, GDC Canada and GDC United
Kingdom taken as a whole.
5.18. Swaps. No Borrower is a party to, nor will
it be a party to, any swap agreement whereby such Borrower has
agreed or will agree to swap interest rates or currencies unless
the same provides that damages upon termination following an event
of default thereunder are payable on an unlimited "two-way basis"
without regard to fault on the part of either party.
5.19. Conflicting Agreements. No provision of any
mortgage, indenture, contract, agreement, statute, rule,
regulation, judgment, decree or order binding on any Borrower or
affecting the Collateral conflicts with, or requires any Consent
which has not already been obtained for, or would in any way
prevent the execution, delivery, performance, validity or
enforceability of, the terms of this Agreement or any of the Other
Documents.
5.20. Application of Certain Laws and Regulations.
No Borrower is subject to any statute, rule or regulation which
regulates the incurrence of any Indebtedness, including without
limitation, statutes, rules or regulations relative to common or
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Exhibit 28.1
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interstate carriers or to the sale of electricity, gas, steam,
water, telephone, telegraph or other public utility services.
5.21. Business and Property of Borrowers. Upon and
after the Closing Date, Borrowers do not propose to engage in any
business other than designing, producing, marketing, leasing,
installing and servicing communication equipment and information
networks, systems and activities necessary to conduct the
foregoing. On the Closing Date, Borrowers will own all the
property and possess all of the rights and Consents necessary for
the conduct of the business of Borrowers.
VI. AFFIRMATIVE COVENANTS.
Each Borrower shall, until payment in full of the
Obligations and termination of this Agreement:
6.1. Payment of Fees. Pay to Agent on demand all
usual and customary fees and expenses which Agent incurs in
connection with (a) the forwarding of proceeds of Advances and (b)
the establishment and maintenance of any Blocked Accounts or
Depository Accounts as provided for in Section 4.15(h). Agent may,
without making demand, charge the account of Borrowers for all such
fees and expenses, provided that an invoice detailing the nature of
such charges is sent to Borrowing Agent in accordance with Agent's
customary procedures.
6.2. Conduct of Business and Maintenance of Exis-
tence and Assets. (a) Conduct continuously and operate actively
its business according to good business practices and maintain all
of its properties useful or necessary in its business in good
working order and condition (reasonable wear and tear excepted and
except as may be disposed of in accordance with the terms of this
Agreement), including, without limitation, all necessary licenses,
patents, copyrights, tradenames, trade secrets, service marks, and
trademarks and take all actions necessary to enforce and protect
the validity of any intellectual property right or other right
included in the Collateral; (b) keep in full force and effect its
existence and comply in all material respects with the laws and
regulations governing the conduct of its business where the failure
to do so would have a Material Adverse Effect on Borrowers, GDC
Canada and GDC United Kingdom taken as a whole; and (c) make all
such reports and pay all such franchise and other taxes and license
fees and do all such other acts and things as may be lawfully
required to maintain its rights, licenses, leases, powers and
franchises under the laws of the United States or any political
subdivision thereof where the failure to do so would have a
Material Adverse Effect on Borrowers, GDC Canada and GDC United
Kingdom taken as a whole.
6.3. Violations. Promptly notify Agent in writing
of any violation of any law, statute, regulation or ordinance of
any governmental entity, or of any agency thereof, applicable to
any Borrower which would be likely to have a Material Adverse
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Exhibit 28.1
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Effect on Borrowers, GDC Canada and GDC United Kingdom taken as a
whole.
6.4. Government Receivables. Upon Agent's
request, take all steps necessary to protect Agent's and Lenders'
interest in the Collateral under the Federal Assignment of Claims
Act or other applicable statutes and deliver to Agent appropriately
endorsed, any instrument or chattel paper connected with any
Receivable arising out of contracts between any Borrower and the
United States, or any department, agency or instrumentality
thereof.
6.5. Tangible Net Worth. Cause to be maintained
at the end of each fiscal quarter a Tangible Net Worth in an amount
not less than the amount set opposite such fiscal quarter end
below:
FISCAL MINIMUM TANGIBLE
QUARTER ENDING NET WORTH
March 31, 1994 $35,500,000
June 30, 1994 33,500,000
September 30, 1994 $36,000,000
December 31, 1994 and the sum of (i) the minimum
at the end of each Tangible Net Worth required at
fiscal quarter the end of the immediately
thereafter preceding fiscal quarter plus
(ii) the product of (x) 50%
times (y) Net Income (if
positive) during the fiscal
quarter then ended (excluding
net additions to capitalized
software) plus (iii) the
product of (x) 50% times (y)
the sum of additional cash
equity contributed to GDC
(excluding stock options and
stock purchase plan payments)
and the amount of subordinated
debt proceeds received by GDC
and its Subsidiaries on a
consolidated basis during such
fiscal quarter.
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6.6. Total Liabilities to Tangible Net Worth.
Cause to be maintained as of the end of each fiscal quarter a ratio
of Total Liabilities to Tangible Net Worth of not greater than the
ratio set opposite such fiscal quarter end below:
RATIO OF TOTAL LIABILITIES
FISCAL QUARTER END TO TANGIBLE NET WORTH
March 31, 1994 2.50 to 1.00
June 30, 1994 2.90 to 1.00
September 30, 1994 2.80 to 1.00
December 31, 1994 2.75 to 1.00
March 31, 1995 2.70 to 1.00
June 30, 1995 2.50 to 1.00
September 30, 1995 and 2.30 to 1.00
at the end of each
fiscal quarter thereafter
6.7. Fixed Charge Coverage Ratio. Cause to be maintained
as of the end of each fiscal quarter a Fixed Charge Coverage Ratio
for the immediately preceding four fiscal quarters equal to or
greater than the ratio set opposite such fiscal quarter end below:
FIXED CHARGE
FISCAL QUARTER ENDING COVERAGE RATIO
March 31, 1994 1.00 to 1.00
June 30, 1994 1.00 to 1.00
September 30, 1994 1.25 to 1.00
December 31, 1994 1.25 to 1.00
March 31, 1995 and 1.50 to 1.00
at the end of each
fiscal quarter thereafter
6.8. Current Ratio. Cause to be maintained at all
times a ratio of Current Assets to Current Liabilities of not less
than 1.25 to 1.0.
6.9. Working Capital. Cause to be maintained as
of the end of each fiscal quarter Working Capital in an amount not
less than the amount set opposite such fiscal quarter end below:
FISCAL QUARTER ENDING MINIMUM WORKING CAPITAL
March 31, 1994 $21,000,000
June 30, 1994 $20,000,000
September 30, 1994 and $21,000,000
at the end of each fiscal
quarter thereafter
6.10. Execution of Supplemental Instruments.
Execute and deliver to Agent from time to time, upon demand, such
supplemental agreements, statements, assignments and transfers, or
instructions or documents relating to the Collateral, and such
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other instruments as Agent may reasonably request, in order that
the full intent of this Agreement may be carried into effect.
6.11. Payment of Indebtedness. Pay, discharge or
otherwise satisfy at or before maturity (subject, where applicable,
to specified grace periods and, in the case of trade payables, to
normal payment practices) all its obligations and liabilities of
whatever nature, except when the amount or validity thereof is
currently being contested in good faith by appropriate proceedings
and Borrowers shall have provided for such reserves as Agent may
reasonably deem proper and necessary, subject at all times to any
applicable subordination arrangement in favor of Lenders.
6.12. Standards of Financial Statements. Cause all
financial statements referred to in Sections 9.7, 9.8, 9.9, 9.10,
9.11, 9.12 and 9.13 as to which GAAP is applicable to be complete
and correct in all material respects (subject, in the case of
interim financial statements, to normal year-end audit adjustments)
and to be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein
(except as concurred in by such reporting accountants or officer,
as the case may be, and disclosed therein).
6.13. Intellectual Property. Promptly notify Agent
if any Borrower or Guarantor shall obtain rights to or become
entitled to the benefit of any patent, patent application, patent
license, trademark, trademark application, trademark license,
copyright, copyright application, copyright license, service mark,
service mark application, service mark license, tradename, assumed
name, trade secret or license ("Intellectual Property") that is not
set forth on Schedule 5.9(a) and upon the written request of Agent,
the applicable Borrower shall, or Borrowers shall cause the
applicable Guarantor to, duly execute and deliver to Agent all such
further agreements, instruments and documents, in such form and
substance as Agent shall reasonably require, and take such further
action as Agent may reasonably request, to grant Agent a first
priority perfected security interest in such Intellectual Property.
6.14. GDC Venezuela. Cause GDC Venezuela to
deliver to Agent, no later than thirty (30) days following the
request of Agent, a valid, binding and enforceable Guarantee of the
Obligations of Borrowers in favor of Lenders, in form and substance
satisfactory to Agent, together with such resolutions, opinions of
counsel and such other related documents as Agent shall require.
No later than thirty (30) days following the request of Agent, GDC
shall deliver to Agent a pledge of all of the issued and
outstanding shares of GDC Venezuela which are owned by GDC pursuant
to agreements in form and substance satisfactory to Agent, together
with such related documents as Agent shall require.
6.15. Netcomm. (a) Cause Netcomm to deliver to
Agent, no later than ninety (90) days following the Closing Date, a
valid, binding and enforceable Guarantee of the Obligations of
Borrowers in favor of Lenders, and valid, binding and enforceable
debentures covering personal property of Netcomm, and (b) deliver
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to Agent, no later than ninety (90) days following the Closing
Date, a valid, binding and enforceable Pledge Agreement pursuant to
which GDC pledges all of the issued and outstanding shares of
Netcomm which are owned by GDC, all in form and substance
satisfactory to Agent, together with such resolutions, opinions of
counsel and such other related documents as Agent shall require.
6.16. Payment of CDA Guaranty Fee. Pay to the CDA
the CDA Guaranty Fee when due.
VII. NEGATIVE COVENANTS.
No Borrower shall, until satisfaction in full of the
Obligations and termination of this Agreement:
7.1. Merger, Consolidation, Acquisition and Sale
of Assets.
(a) Enter into any merger, consolidation or
other reorganization with or into any other Person or acquire all
or a substantial portion of the assets or stock of any Person or
permit any other Person to consolidate with or merge with it except
that (i) any Borrower may merge or consolidate with another
Borrower provided that the surviving corporation duly assumes all
Obligations hereunder and executes any documents and agreements
requested by Agent in connection therewith and (ii) GDC may
purchase the capital stock of Netcomm pursuant to the Netcomm
Agreement.
(b) Sell, lease, transfer or otherwise
dispose of any of its properties or assets, except in the ordinary
course of its business.
7.2. Creation of Liens. (a) Create or suffer to
exist any Lien upon or against or transfer any of its property or
assets now owned or hereafter acquired, except (i) Permitted
Encumbrances and (ii) Liens in favor of Chase as agent for itself
and other financial institutions under the Chase Agreements, or (b)
Permit GDC United Kingdom to create or suffer to exist any Lien
upon or against the real property of GDC United Kingdom in
Wokingham, England.
7.3. Guarantees. Become liable upon the
obligations of any person, firm or corporation by assumption,
endorsement or guaranty thereof or otherwise (other than to Lenders
pursuant to this Agreement or the Other Documents) except (a) as
disclosed on Schedule 7.3, (b) the endorsement of checks or
negotiable instruments in the ordinary course of business, (c)
guarantees by GDC of the obligations of any of its Subsidiaries
under lease arrangements for real property entered into in the
ordinary course of business, provided, that the aggregate amount of
indebtedness covered by such guarantees does not at any time exceed
the amount of rental payments permitted under Section 7.11, (d)
guarantees by Borrowers of the obligations of GDC or its
Subsidiaries under leases of personal property, excluding capital
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equipment subject to (f) below, in the ordinary course of business,
provided, that the aggregate amount of indebtedness covered by such
guarantees does not exceed $5,000,000 at any time outstanding, (e)
guarantees by Borrowers relating to the issuance of bid or
performance bonds required to be issued by any Borrower or any
Guarantor, provided, that the aggregate amount so guaranteed does
not exceed $5,000,000 at any time outstanding, (f) guarantees by
GDC of the obligations of other Borrowers under capital equipment
financing arrangements, provided, that such financing arrangements
are permitted hereunder and the aggregate amount of indebtedness
covered by such guarantees does not exceed the amount of capital
expenditures permitted pursuant to Section 7.6, (g) non-financial
support agreements by GDC relating to its Subsidiaries, provided,
that such support agreements are substantially similar to the
support agreement issued by GDC dated June 30, 1989 in favor of
Sanwa Business Credit Corporation, (h) guarantees of the
obligations of another Borrower, and (i) guarantees by Borrowers of
the obligations of any Guarantor not otherwise covered by
subsections (a) through (h) above, provided, that the aggregate
amount of indebtedness covered by such guarantees does not in the
aggregate exceed $500,000 at any time outstanding.
7.4. Investments. Purchase or acquire obligations
or stock of, or any other interest in, any Person, except (a)
obligations issued or guaranteed by the United States of America or
any agency thereof, (b) commercial paper with maturities of not
more than 180 days and a published rating of not less than A-1 or
P-1 (or the equivalent rating), (c) certificates of deposit and
bankers' acceptances having maturities of not more than 180 days
and repurchase agreements backed by United States government
securities of a commercial bank if (i) such bank has a combined
capital and surplus of at least $500,000,000, or (ii) its debt
obligations, or those of a holding company of which it is a
Subsidiary, are rated not less than A (or the equivalent rating) by
a nationally recognized investment rating agency, (d) U.S. money
market funds that invest solely in obligations issued or guaranteed
by the United States of America or an agency thereof, (e)
investments made by any Borrower in another Borrower by way of
contributions to capital or loans or advances, (f) investments made
by GDC in GDC Canada, Netcomm or GDC United Kingdom after the date
hereof by way of contributions to capital or loans or advances, so
long as, after giving effect to any such transaction, the aggregate
amount of all such investments in GDC Canada, Netcomm and GDC
United Kingdom together with all such loans and advances permitted
by Section 7.5 shall not exceed $2,500,000 at any time, (g)
investments made by Borrowers in any Guarantor other than GDC
Canada, GDC United Kingdom and Netcomm by way of contributions to
capital or loans or advances, so long as, after giving effect to
any such transaction, the aggregate amount of all such investments
in all Guarantors other than GDC Canada, Netcomm and GDC United
Kingdom together with all such loans and advances permitted by
Section 7.5 shall not exceed $1,000,000 at any time, (h)
promissory notes accepted in settlement of overdue obligations of
Customers of Borrowers, GDC Canada and GDC United Kingdom provided
that written notice is given to Agent in the event the aggregate
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amount of such notes equals or exceeds $100,000 and all such notes
are assigned to Agent for the benefit of Lenders and (i) those
investments existing on the Closing Date which are disclosed on
Schedule 7.4. For purposes of this Section 7.4, the reinvestment
by GDC or retention by any Guarantor of the earnings of any
Guarantor shall not be deemed an investment by GDC in such
Guarantor and any Receivable due GDC from any Guarantor shall not
be considered an investment in such Guarantor unless such
Receivable remains unpaid more than one hundred and eighty (180)
days from the original invoice date. Reimbursement of expenses in
the ordinary course of business is not to be considered an
investment for purposes of this Section 7.4.
7.5. Loans. Make advances, loans or extensions of
credit to any Person, including without limitation, any Parent,
Subsidiary or Affiliate of it except with respect to (a) the
extension of commercial trade credit in connection with the sale of
Inventory in the ordinary course of its business, (b) loans by any
Borrower to another Borrower, (c) loans by Borrowers to any
Guarantor provided that the aggregate amount of all advances, loans
and extensions of credit together with all investments permitted by
Section 7.4 by Borrowers to (i) GDC Canada, Netcomm and GDC United
Kingdom after the date hereof shall not exceed $2,500,000 at any
time, and (ii) Guarantors other than GDC United Kingdom, GDC Canada
and Netcomm shall not exceed $1,000,000 at any time, (d) loans by
Borrowers to employees (other than travel and other advances
permitted by subsection (e) of this Section 7.5) in the ordinary
course of business provided that such loans do not exceed the
aggregate amount of $1,250,000 at any time outstanding for
Borrowers, Guarantors and GDC Netherlands, (e) travel and other
advances (other than loans to employees permitted by subsection (d)
of this Section 7.5) to employees in the ordinary course of
business provided that such advances do not exceed the aggregate
amount of $500,000 at any time outstanding for Borrowers,
Guarantors and GDC Netherlands, (f) loans and advances to suppliers
in the ordinary course of business provided that such loans and
advances do not exceed the aggregate amount of $500,000 at any time
outstanding for Borrowers, Guarantors and GDC Netherlands, (g)
notes accepted in settlement of overdue obligations of Customers of
Borrowers, GDC Canada and GDC United Kingdom provided that written
notice is given to Agent in the event the aggregate amount of such
notes equal or exceeds $100,000 and all such notes are assigned to
Agent, and (h) to the extent not covered by (a) through (g) above,
loans and advances permitted by Section 7.4. Reimbursement of
expenses in the ordinary course of business is not to be considered
an advance, loan or extension of credit for purposes of this
Section 7.5.
7.6. Capital Expenditures. Contract for, purchase
or make any expenditure or commitments for fixed or capital assets
(including capitalized leases but excluding that portion of
research and development expenditures which are capitalized) in any
fiscal year which shall cause the aggregate expenditures of all of
Borrowers and Guarantors to exceed $15,000,000 in such fiscal year.
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7.7. Dividends. Declare, pay or make any dividend
or distribution on any shares of the common stock or preferred
stock of GDC (other than dividends or distributions payable in its
stock, or split-ups or reclassifications of its stock) or set aside
or apply any of its funds, property or assets for or to the
purchase, redemption or other retirement of any common or preferred
stock, or of any options to purchase or acquire any such shares of
common or preferred stock of GDC.
7.8. Indebtedness. Create, incur, assume or
suffer to exist any Indebtedness for borrowed money except in
respect of (i) Indebtedness to Lenders under this Agreement and the
Other Documents; (ii) Indebtedness incurred for capital
expenditures permitted under Section 7.6; (iii) intercompany
Indebtedness of Borrowers to each other; (iv) Indebtedness to
DataComm Leasing not to be reduced below $19,717,291; (v)
Indebtedness existing on the Closing Date which is disclosed on
Schedule 7.8; and (vi) Indebtedness incurred by GDC and GDC
Naugatuck in an aggregate amount not to exceed $11,925,000 under
the Chase Agreements.
7.9. Nature of Business. Substantially change the
nature of the business in which it is presently engaged, or except
as specifically permitted hereby purchase or invest (other than as
permitted by Section 7.4), directly or indirectly, in any assets or
property other than in the ordinary course of business for assets
or property which are useful in, necessary for and are to be used
in its business as presently conducted.
Transactions with Affiliates. Directly or
indirectly, purchase, acquire or lease any property from, or sell,
transfer or lease any property to, or otherwise deal with, any
Affiliate of it except (a) transactions in the ordinary course of
business, on an arm's-length basis and on terms no less favorable
than terms which would have been obtainable from a Person other
than an Affiliate of it, (b) transactions with another Borrower,
GDC Canada, GDC United Kingdom, GDC Mexico, Eurotech, Netcomm, GDC
Australia and GDC France provided that such transactions would not
have an adverse effect on the business, assets, operations,
financial condition of Borrowers and Guarantors taken as a whole
and (c) transactions described on Schedule 7.10.
7.11. Leases. Enter as lessee into any lease
arrangement for real or personal property (unless capitalized and
permitted under Section 7.6) if after giving effect thereto,
aggregate annual rental payments for all leased property of GDC and
its Subsidiaries on a consolidated basis would exceed $11,500,000
in any one fiscal year.
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7.12. Subsidiaries.
(a) Form any Subsidiary or cause GDC
Netherlands to conduct business unless such Subsidiary (i)
expressly joins this Agreement as a borrower and becomes jointly
and severally liable for the Obligations or (ii) guarantees the
Obligations and grants Agent for the benefit of Lenders a first
priority security interest (subject to Permitted Encumbrances) in
all of its assets, and in each case Agent shall have received all
agreements and documents, including, without limitation, such legal
opinions as Agent may reasonably require, except that GDC may (w)
form GDC Venezuela without the necessity of complying with clauses
(i) and (ii) above, subject, however, to the provisions of Section
6.14, (x) acquire NetComm subject, however, to the provisions of
Section 6.15, (y) form GDC Brazil, GDC Germany, GDC Russia and GDC
China without the necessity of complying with clauses (i) and (ii)
above and (z) form any Subsidiary, without the necessity of
complying with clauses (i) and (ii) above, if the aggregate amount
of investments, advances, loans or capital contributions to such
Subsidiary by Borrowers and all Subsidiaries of Borrowers does not
exceed $150,000.
(b) Enter into any partnership, joint
venture or similar arrangement except for partnerships, joint
ventures and similar arrangements entered into in the ordinary
course of business provided that the aggregate amount invested in
or loaned to such partnerships, joint ventures and similar
arrangements by Borrowers, Guarantors, GDC Venezuela and GDC
Netherlands does not exceed $500,000.
7.13. Fiscal Year and Accounting Changes. Change
its fiscal year end from September 30 or make any change (i) in
accounting treatment and reporting practices except as required by
GAAP or (ii) in tax reporting treatment except as required by law.
7.14. Pledge of Credit. Now or hereafter pledge
Agent's or any Lender's credit on any purchases or for any purpose
whatsoever or use any portion of any Advance in or for any business
other than Borrower's business as conducted on the date of this
Agreement.
7.15. Compliance with ERISA. (i) Terminate, or
permit any member of a Controlled Group to terminate, or take any
other action with respect to, any Plan (including, without
limitation, a substantial cessation of operations within the
meaning of Section 4068(f) of ERISA) which would result in any
material liability of any Borrower or any member of a Controlled
Group, to the PBGC or to any Plan, or (ii) permit the occurrence of
any "reportable event" (as defined in Title IV of ERISA) or any
other event or condition, which presents a risk of such a
termination by the PBGC or any Plan, or (iii) withdraw or effect a
partial withdrawal from a Multiemployer Plan, or permit any member
of a Controlled Group which is an employer under a Multiemployer
Plan to do so, or (iv) permit the present value of all benefit
liabilities under all Plans (other than Multiemployer Plans) to
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exceed the current value of the assets of such Plans allocable to
such benefit liabilities or (v) permit any unfunded benefit
liabilities within the meaning of Section 4001(a)(18) of ERISA
allocable to any Borrower or any member of a Controlled Group, or
(vi) engage or permit any member of a Controlled Group to engage in
any prohibited transaction which would result in a civil penalty or
excise tax described in Section 406 of ERISA or Section 4975 of the
Code.
7.16. Prepayment of Indebtedness. At any time,
directly or indirectly, prepay any Indebtedness for borrowed money
(other than to Lenders), or repurchase, redeem, retire or otherwise
acquire any Indebtedness.
7.17. DataComm Leasing. At any time, directly or
indirectly, make any cash remittance which brings the intercompany
payable due to DataComm Leasing below $19,717,291.
7.18. Amendment of Certificates of Incorporation,
By-Laws. Amend, modify or waive any term or material provision of
its Certificate of Incorporation, By-Laws, or memorandum or
articles of association unless required by law.
VIII. CONDITIONS PRECEDENT.
8.1. Conditions to Initial Advances. The
agreement of Lenders and Agent to make the Term Loan requested to
be made on the Closing Date is subject to the satisfaction, or
waiver by Lenders, immediately prior to or concurrently with the
making of such Advances, of the following conditions precedent:
(a) Note. Agent shall have received for
each Lender the Notes duly executed and delivered by an authorized
officer of each Borrower;
(b) Filings, Registrations and Recordings.
Each document (including, without limitation, any Uniform
Commercial Code financing statement) required by this Agreement,
the Guarantor Security Agreements, any related agreement or under
law or reasonably requested by Agent to be filed, registered or
recorded in order to create, in favor of Agent for the benefit of
Lenders, a perfected security interest in or lien upon the
Collateral or the collateral covered by the Guarantor Security
Agreements shall have been properly filed, registered or recorded
in each jurisdiction in which the filing, registration or
recordation thereof is so required or requested, and Agent shall
have received an acknowledgment copy, or other evidence
satisfactory to it, of each such filing, registration or
recordation and satisfactory evidence of the payment of any
necessary fee, tax or expense relating thereto;
(c) Corporate Proceedings of Borrowers and
Guarantors. Agent shall have received a copy of the resolutions,
in form and substance reasonably satisfactory to Agent, of the
Board of Directors of each Borrower and each Guarantor authorizing
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(i) the execution, delivery and performance, as the case may be, of
this Agreement, the Other Documents, the Guarantees and the
Guarantor Security Agreements (collectively the "Documents") and
(ii) the granting by Borrower and Guarantors, as the case may be,
of the security interests in and liens upon the Collateral and the
other collateral described in the Documents, in each case certified
by the Secretary or an Assistant Secretary of such Borrower or
Guarantor, as the case may be, as of the Closing Date; and, such
certificate shall state that the resolutions thereby certified have
not been amended, modified, revoked or rescinded and are in full
force and effect as of the date of such certificate;
(d) Incumbency Certificates of Borrowers and
Guarantors. Agent shall have received a certificate of the
Secretary, an Assistant Secretary or other authorized officer of
each Borrower and each Guarantor, dated the Closing Date, as to the
incumbency and signature of the officers of such Borrower or such
Guarantor executing the Documents together with evidence of the
incumbency of such Secretary or Assistant Secretary;
(e) Good Standing Certificates. Agent shall
have received good standing certificates for each Borrower and each
Guarantor dated not more than thirty (30) days prior to the Closing
Date, issued by the Secretary of State or other appropriate
official of such Borrower's or such Guarantor's jurisdiction of
incorporation and its principal office, if any;
(f) Legal Opinion. Agent shall have
received the executed legal opinion of Weisman, Celler, Spett &
Modlin, counsel to Borrowers and those Guarantors located in the
United States of America, in form and substance satisfactory to
Lenders which shall cover such matters incident to the transactions
contemplated by this Agreement, the Other Documents, and those
Guarantees and Guarantor Security Agreements executed and delivered
by those Guarantors located in the United States of America, as
Agent may reasonably require;
(g) No Litigation. (i) No litigation, in-
vestigation or proceeding before or by any arbitrator or
governmental authority shall be continuing or, to the best of
Borrowers' knowledge, threatened against any Borrower or any
Guarantor or against the officers or directors of any Borrower or
any Guarantor (A) in connection with the Documents or any of the
transactions contemplated thereby and which, in the reasonable
opinion of Agent, is deemed material or (B) which if adversely
determined, would, in the reasonable opinion of Agent, have a
Material Adverse Effect on Borrowers, GDC Canada and GDC United
Kingdom taken as a whole; and (ii) no injunction, writ, restraining
order or other order of any nature shall have been issued by any
Governmental Body which has a Material Adverse Effect on Borrowers,
GDC Canada and GDC United Kingdom taken as a whole, or which is
inconsistent with the due consummation of the transactions
contemplated by the Documents.
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(h) Financial Condition Opinions. Agent
shall have received executed Officers Certificates satisfactory in
form and substance to it, certifying the solvency of GDC and its
Subsidiaries and as to GDC and its Subsidiaries' financial
resources and their ability to meet their obligations and
liabilities as they become due; and to the effect that as of the
Closing Date and after giving effect to the transactions
contemplated by the Documents:
(i) the assets of GDC and its
Subsidiaries on a consolidated basis, at a fair valuation, exceed
the total liabilities (including contingent, subordinated,
unmatured and unliquidated liabilities) of GDC and its Subsidiaries
on a consolidated basis;
(ii) current projections which are
based on underlying assumptions providing a reasonable basis for
the projections and reflecting Borrowers' judgment based on present
circumstances of the most likely set of conditions and GDC's and
its Subsidiaries' most likely course of action for the period
projected, demonstrate that GDC and its Subsidiaries on a
consolidated basis will have sufficient cash flow to enable them to
pay their debts as they mature; and
(iii) GDC and its Subsidiaries on a
consolidated basis do not have an unreasonably small capital base
with which to engage in their anticipated business.
For purposes of this subsection (i), the "fair valuation" of the
assets of GDC and its Subsidiaries shall be determined on the basis
of the amount which may be realized within a reasonable time,
either through collection or sale of such assets at market value,
conceiving the latter as the amount which could be obtained for the
property in question within such period by a capable and diligent
businessman from an interested buyer who is willing to purchase
under ordinary selling conditions;
(i) Collateral Examination. Agent shall
have completed Collateral examinations and received appraisals, the
results of which shall be satisfactory in form and substance to
Agent, of the Receivables, Inventory, General Intangibles, and
Equipment and all books and records in connection therewith;
(j) CDA Guaranty. Agent shall have received
the CDA Guaranty in form and substance satisfactory to Lenders of
not less than $2,400,000 of the Term Loan;
(k) Payment of Indebtedness to Aetna.
Borrowers simultaneously with (or with the proceeds of) the Term
Loan shall discharge all of its Indebtedness to Aetna Life
Insurance Company;
(l) Legal Fees. Borrowers shall have paid
all outstanding legal fees owed to counsel to Agent and all
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reasonable legal fees incurred by Agent in connection with the
preparation of this Agreement;
(m) Commitments. Agent shall have obtained
written commitments satisfactory to it for $18,000,000 of the
Advances from co-lenders and such co-lenders shall fund on the
Closing Date their ratable share of the Advances;
(n) Financial Statements. Agent shall have
received a copy of the Balance Sheet and Projections which shall be
satisfactory in all respects to Lenders;
(o) Guarantees, Guarantor Security
Agreements, Pledge Agreements, Stock and Other Documents. Agent
shall have received affirmations of the Guarantees, the Guarantor
Security Agreements, the Pledge Agreements and all other Documents,
duly executed by each party thereto each in form and substance
satisfactory to Lenders;
(p) Third Party. Agent shall have reviewed
and found satisfactory in form and substance all material third
party contracts to which any Borrower or any Guarantor is a party
including, without limitation, executive compensation and deferred
payment agreements and lease, union, labor and customer supply
agreements;
(q) Payment Instructions. Agent shall have
received written instructions from Borrowing Agent directing the
application of proceeds of the Term Loan made pursuant to this
Agreement;
(r) Consents. Agent shall have received any
and all Consents necessary to permit the effectuation of the
transactions contemplated by the Documents; and Agent shall have
received such Consents and waivers of such third parties as might
assert claims with respect to the Collateral, as Agent and its
counsel shall deem necessary;
(s) No Adverse Material Change. Since March
31, 1994, there shall not have occurred (i) any material adverse
change in: the business, financial condition, prospects or results
of operations of Borrowers and Guarantors taken as a whole, or the
existence or value of any Collateral or any collateral covered by
the Guarantor Security Agreements; or (ii) any event, condition or
state of facts which would reasonably be expected to have a
Material Adverse Effect on Borrowers and Guarantors taken as a
whole; and
(t) Other. All corporate and other
proceedings, and all documents, instruments and other legal matters
in connection with the transactions contemplated by the Documents
shall be reasonably satisfactory in form and substance to Agent and
its counsel.
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8.2. Conditions to Each Advance. The agreement of
Lenders and Agent to make any Advance requested to be made on any
date (including, without limitation, the initial Advance), is
subject to the satisfaction of the following conditions precedent
as of the date such Advance is made:
(a) Representations and Warranties. Each of
the representations and warranties made by each Borrower and each
Guarantor in or pursuant to this Agreement and any of the other
Documents, and each of the representations and warranties contained
in any certificate, document or financial or other statement
furnished at any time under or in connection with this Agreement or
any of the other Document shall be true and correct in all material
respects on and as of such date as if made on and as of such date
except for (i) such matters that are disclosed to Agent and Lenders
and (ii) such matters that do not otherwise constitute an Event of
Default;
(b) No Default. No Event of Default or
Incipient Event of Default shall have occurred and be continuing on
such date, or would exist after giving effect to the Advances
requested to be made on such date; provided, however that Lenders
(based upon a vote of Required Lenders), in their sole discretion,
may continue to make Advances notwithstanding the existence of an
Event of Default or Incipient Event of Default and any Advances so
made shall not be deemed a waiver of any such Event of Default or
Incipient Event of Default; and
(c) Maximum Advances. After giving effect
to any Revolving Advance, the aggregate Revolving Advances shall
not exceed the maximum amount of Revolving Advances permitted
hereunder.
Each request for an Advance by Borrowing Agent hereunder shall
constitute a representation and warranty by each Borrower as of the
date of such Advance that the conditions contained in this Section
8.2 shall have been satisfied.
IX. INFORMATION AS TO BORROWERS.
Each Borrower shall, until satisfaction in full of the
Obligations and the termination of this Agreement:
9.1. Disclosure of Material Matters. Promptly
upon learning thereof, report to Agent all matters materially
affecting any Borrower's or any Guarantor's financial condition or
the value, enforceability or collectibility of any material portion
of the Collateral or any collateral covered by the Guarantor
Security Agreements including, without limitation, any Borrower's
or any Guarantor's reclamation or repossession of, or the return to
any Borrower or any of GDC Canada or GDC United Kingdom of, a
material amount of goods or claims or disputes asserted by any
Customer or other obligor.
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9.2. Schedules. Deliver to Lenders on a monthly
basis a certificate in the form of Exhibit 9.2 ("Borrowing Base
Certificate") signed by the Chief Financial Officer of Borrowing
Agent. In addition, Borrowing Agent will deliver to Agent at such
intervals as Agent may require: (i) accounts receivable agings,
(ii) confirmatory assignment schedules, (iii) copies of Customer
invoices, (iv) evidence of shipment or delivery, and (v) such
further schedules, documents and/or information regarding the
Collateral and the collateral covered by the Guarantor Security
Agreements as Agent may require including, without limitation,
trial balances and test verifications. Borrowing Agent shall
deliver to Agent on a monthly basis statements setting forth the
amount of cash in DataComm Leasing. Borrowing Agent shall deliver
to Agent on a monthly basis statements setting forth the amount of
collections received by each of GDC Canada and GDC United Kingdom
with respect to Receivables and the amount of cash controlled by
each of GDC Canada and GDC United Kingdom. Agent shall have the
right to confirm and verify all Receivables by any manner and
through any medium it considers advisable and do whatever it may
deem reasonably necessary to protect its and Lenders' interests
hereunder. The items to be provided under this Section are to be
in form satisfactory to Lenders and executed by Borrowing Agent and
delivered to Agent or Lenders from time to time solely for Agent's
convenience in maintaining records of the Collateral and the
collateral covered by the Guarantor Security Agreements, and
Borrowing Agent's failure to deliver any of such items to Agent
shall not affect, terminate, modify or otherwise limit Agent's Lien
with respect to the Collateral and the collateral covered by the
Guarantor Security Agreements.
9.3. Environmental Reports. Furnish Agent,
concurrently with the delivery of the financial statements referred
to in Section 9.7, with a certificate of each Borrower, signed by
the Administrative Vice-President of such Borrower, stating, to the
best of his knowledge, that such Borrower is in compliance in all
material respects with all federal, state and local laws relating
to environmental protection and control and occupational safety and
health. To the extent such Borrower is not in compliance with the
foregoing laws, the certificate shall set forth with specificity
all areas of non-compliance and the proposed action such Borrower
will implement in order to achieve full compliance.
9.4. Litigation. Promptly notify Agent and
Lenders in writing of any litigation, suit or administrative
proceeding affecting any Borrower or any Guarantor, whether or not
the claim is covered by insurance, which would be likely to
materially and adversely affect the Collateral or the collateral
covered by the Guarantor Security Agreements, or the business,
assets, operations or financial condition of Borrowers, GDC Canada
and GDC United Kingdom taken as a whole.
9.5. Material Occurrences. Promptly notify Agent
and Lenders in writing upon learning of the occurrence of (a) any
Event of Default or Incipient Event of Default; (b) any event of
default or any event which with the giving of notice, lapse of time
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or both, would constitute an event of default under any of the
Chase Agreements; (c) any event, development or circumstance
whereby any financial statements or other reports furnished to
Agent or any Lender fail in any material respect to present fairly,
in accordance with GAAP consistently applied, the financial
condition or operating results of GDC and its Subsidiaries as of
the date of such statements; (d) any accumulated retirement plan
funding deficiency which, if such deficiency continued for two plan
years and was not corrected as provided in Section 4971 of the
Code, could subject any Borrower to a tax imposed by Section 4971
of the Code; (e) each and every default by any Borrower or any
Guarantor which might result in the acceleration of the maturity of
any Indebtedness, including the names and addresses of the holders
of such Indebtedness with respect to which there is a default
existing or with respect to which the maturity has been or could be
accelerated, and the amount of such Indebtedness; and (f) any other
development in the business or affairs of any Borrower or any
Guarantor which might reasonably be expected to have a Material
Adverse Effect on Borrowers, GDC Canada and GDC United Kingdom
taken as a whole; in each case describing the nature thereof and
the action such Borrower or Guarantor proposes to take with respect
thereto.
9.6. Government Receivables. Notify Agent
immediately if Receivables which exceed $500,000 in the aggregate
arise out of contracts between any Borrower and the United States,
or any department, agency or instrumentality thereof.
9.7. Annual Financial Statements. Furnish Agent
and each Lender within ninety (90) days after the end of each
fiscal year of GDC, financial statements of GDC and its
Subsidiaries on a consolidated basis including, but not limited to,
statements of income and stockholders' equity and cash flow from
the beginning of the current fiscal year to the end of such fiscal
year and the balance sheet as at the end of such fiscal year, all
prepared in accordance with GAAP applied on a basis consistent with
prior practices, and in reasonable detail and reported upon without
qualification by an independent certified public accounting firm
selected by GDC and reasonably satisfactory to Agent (the
"Accountants"). The report of such accounting firm shall be
accompanied by a statement of such accounting firm certifying that
in making the examination upon which such report was based either
no information came to their attention which to their knowledge
constituted an Event of Default or if such information came to
their attention, specifying any such Event of Default and such
report shall contain or have appended thereto calculations which
set forth compliance with the requirements or restrictions imposed
by Sections 6.5, 6.6, 6.7, 6.8, 6.9 and 7.6.
9.8. Monthly and Quarterly Financial Statements.
Furnish Agent and each Lender within thirty (30) days after the end
of each month and within forty five (45) days after the end of each
month ending a fiscal quarter, an unaudited balance sheet of GDC
and its Subsidiaries and unaudited statements of income and
stockholders' equity and cash flow of GDC and its Subsidiaries on a
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consolidated and consolidating basis subject to normal year end
adjustments fairly reflecting results of operations from the
beginning of the fiscal year to the end of such month or quarter
and for such month or quarter, and setting forth, in comparative
form, the figures for the previous year prepared on a basis
consistent with prior practices. The reports shall be accompanied
by a certificate of Borrowers, signed by the Chief Financial
Officer or Controller of Borrowers, which shall state whether an
Event of Default has occurred and, if an Event of Default has
occurred, specifying its nature, when it occurred, whether it is
continuing and the action proposed to be taken with respect to such
Event of Default, shall certify the outstanding amount of the
intercompany payable due to DataComm Leasing as of the end of such
month or quarter and shall have appended, together with the reports
due at the end of a quarter, calculations which set forth
compliance with the requirements or restrictions imposed by
Sections 6.5, 6.6, 6.7, 6.8, 6.9 and 7.6.
9.9. Other Reports. Furnish Agent and each Lender
as soon as available, but in any event within ten (10) days after
the issuance thereof, with (i) copies of any proxy statements,
financial statements, reports and returns as Borrowers shall send
to their stockholders, (ii) copies of all notices sent pursuant to
the CDA Guaranty and the Chase Agreements, and (iii) copies of any
regular, periodic and special reports or registration statements
which any Borrower files with the Securities and Exchange
Commission or any governmental authority which may be substituted
therefor, or any national securities exchange.
9.10. Additional Information. Furnish Agent and
each Lender with such additional information as Agent or any Lender
shall reasonably request in order to enable Agent and each Lender
to determine whether the terms, covenants, provisions and
conditions of this Agreement and the Other Documents have been
complied with by Borrowers including, without limitation and
without the necessity of any request by Agent or any Lender, (a)
copies of all environmental audits and reviews, (b) at least thirty
(30) days prior thereto, notice of any Borrower's opening of any
new office or place of business where any Collateral may be located
or any books or records relating to any Collateral may be located
or any Borrower's closing of any existing office or place of
business where any Collateral may be located or any books or
records relating to any Collateral may be located, and (c) promptly
upon any Borrower's learning thereof, notice of any labor dispute
to which any Borrower may become a party, any strikes or walkouts
relating to any of its plants or other facilities, and the
expiration of any labor contract to which any Borrower is a party
or by which any Borrower is bound.
9.11. Projected Operating Budget. Furnish Agent,
no less than thirty (30) days prior to the beginning of each of
Borrowers' fiscal years commencing with fiscal year beginning on
October 1, 1994, a month by month projected operating budget and
cash flow of GDC and its Subsidiaries on a consolidated and
consolidating basis for such fiscal year (including an income
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statement for each month and a balance sheet as at the end of the
last month in each fiscal quarter), such projections to be
accompanied by a certificate signed by GDC's Chief Financial
Officer or Controller to the effect that such projections have been
prepared on the basis of sound financial planning practice
consistent with past budgets and financial statements and that such
officer believes the material assumptions on which such projections
were prepared are reasonable.
9.12. Variances From Operating Budget. Furnish
Agent and each Lender, concurrently with the delivery of the
financial statements referred to in Section 9.7 and each monthly
report, a written report summarizing all material variances from
budgets submitted by Borrowers pursuant to Section 9.11 and a
discussion and analysis by management with respect to such
variances.
9.13. Notice of Suits, Adverse Events. Furnish
Agent and each Lender with prompt notice of (i) any lapse or other
termination of any Consent issued to any Borrower or any Guarantor
by any Governmental Body or any other Person that is material to
the operation of the business of Borrowers, GDC Canada and GDC
United Kingdom taken as a whole, (ii) any refusal by any
Governmental Body or any other Person to renew or extend any such
Consent; and (iii) copies of any periodic or special reports filed
by any Borrower or any Guarantor with any Governmental Body or
Person, if such reports indicate any material change in the
business, operations, affairs or condition of Borrowers, GDC Canada
and GDC United Kingdom taken as a whole, or if copies thereof are
requested by Agent or any Lender, and (iv) copies of any material
notices and other communications from any Governmental Body or
Person which specifically relate to any Borrower or any Guarantor.
9.14. ERISA Notices and Requests. Furnish Agent
with immediate written notice in the event that (i) any Borrower or
any member of the Controlled Group shall fail to make any payments
when due and payable under any Plan or Multiemployer Plan, or (ii)
any Borrower or any member of the Controlled Group shall receive
notice from the Internal Revenue Service or the Department of Labor
that such Borrower or any member of the Controlled Group shall have
failed to meet the minimum funding requirements of any Plan or
Multiemployer Plan, and include therewith a copy of such notice, or
(iii) any Borrower or any member of the Controlled Group gives or
is required to give notice to the PBGC of any Reportable Event in
respect of any Plan or Multiemployer Plan which might constitute
grounds for a termination of such Plan or Multiemployer Plan under
Title IV of ERISA, or knows that the plan administrator of any Plan
or Multiemployer Plan has given or is required to give notice of
any such Reportable Event, or (iv) a notice of intent to terminate
any Plan is filed with the PBGC, or (v) proceedings are instituted
by the PBGC under Section 4042 of ERISA to terminate or to appoint
a trustee to administer any Plan or any Borrower or any member of
the Controlled Group receives a notice from a Multiemployer Plan
that such action has been taken by the PBGC with respect to such
Multiemployer Plan, or (vi) any Borrower or any member of the
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Controlled Group withdraws in a complete or partial withdrawal from
any Multiemployer Plan or any Plan which is a "multiple employer
plan" within the meaning of Section 4063 of ERISA, or incurs any
withdrawal liability under Section 4204 of ERISA, or (vii) any
prohibited transaction occurs involving the assets of any Plan, or
(viii) any Borrower or any member of the Controlled Group receives
a notice from a Multiemployer Plan that such Multiemployer Plan is
in reorganization or insolvent pursuant to Section 4241 or 4245 of
ERISA or that such Multiemployer Plan intends to terminate or has
terminated under Section 4041A of ERISA, or (ix) any Borrower or
any member of the Controlled Group receives a notice from a
Multiemployer Plan of the institution of a proceeding by a
fiduciary of a Multiemployer Plan against any Borrower or any
member of the Controlled Group to enforce Section 515 of ERISA, or
(x) the adoption of an amendment to any Plan that could result in
the termination of such Plan pursuant to Section 4041(e) or (f) of
ERISA or require any Borrower or any member of the Controlled Group
to provide security to such Plan pursuant to Section 401(a)(29) of
the Code or Section 307 of ERISA, or (xi) any Borrower or any
member of the Controlled Group fails to make a required installment
or other payment to any Plan if such failure would result in the
imposition of a Lien on the property of any Borrower pursuant to
Section 4.12(n) of the Code or (xii) the establishment of any new
Plan or the commencement of contributions to any Plan to which any
Borrower or any member of the Controlled Group was not previously
contributing, or (xiii) the receipt by any Borrower or any member
of the Controlled Group of any favorable or unfavorable
determination letter from the Internal Revenue Service regarding
the qualification of a Plan under Section 401(a) of the Code.
9.15. Additional Documents. Execute and deliver to
Agent and each Lender, upon request, such documents and agreements
as Agent or any Lender may, from time to time, reasonably request
to carry out the purposes, terms or conditions of this Agreement or
any other Document.
X. EVENTS OF DEFAULT.
The occurrence of any one or more of the following events
shall constitute an "Event of Default":
(a) failure by any Borrower to pay any principal
or interest on the Obligations when due, whether at maturity or by
reason of acceleration pursuant to the terms of this Agreement or
by notice of intention to prepay, or by required prepayment or
failure to pay any other liabilities or make any other payment, fee
or charge provided for herein when due and in the event the
aggregate balance of Advances outstanding at any time is in excess
of the amounts permitted hereunder such default shall continue
unremedied for more than five (5) days after notice thereof shall
have been given to Borrowing Agent by Agent;
(b) any representation or warranty made or deemed
made by any Borrower or any Guarantor in this Agreement, any other
Document or any related agreement or in any certificate, document
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or financial or other statement furnished at any time in connection
herewith or therewith shall prove to have been misleading in any
material respect on the date when made or deemed to have been made
or when furnished;
(c) failure by any Borrower to (i) furnish
financial information when due or when requested and such request
is not satisfied within twenty (20) days after Borrowing Agent
receives notice from Agent of such request, or (ii) permit the
inspection of its books or records;
(d) issuance of a notice of Lien, Charge, Claim,
levy, assessment, injunction or attachment against a material
portion of any Borrower's property which is not stayed or lifted
within forty five (45) days;
(e) failure or neglect of any Borrower to
perform, keep or observe any term, provision, condition, or
covenant herein contained, or contained in any other agreement or
arrangement, now or hereafter entered into between any Borrower,
Agent and/or any Lender other than the failure or neglect of any
Borrower to perform, keep or observe any term, provision, condition
or covenant contained in Sections 4.6, 4.7, 6.1, 6.4, 9.4 or 9.6
which is cured within fifteen (15) days from the occurrence of such
failure or neglect.
(f) any judgment is rendered or judgment liens
filed against any Borrower or any Guarantor for an amount in excess
of $250,000 which within thirty (30) days of such rendering or
filing is not either satisfied, stayed, bonded or discharged of
record;
(g) any Borrower shall (i) apply for or consent
to the appointment of, or the taking of possession by, a receiver,
custodian, trustee or liquidator of itself or of all or a
substantial part of its property, (ii) make a general assignment
for the benefit of creditors, (iii) commence a voluntary case under
any state or federal bankruptcy laws (as now or hereafter in
effect), (iv) be adjudicated a bankrupt or insolvent, (v) file a
petition seeking to take advantage of any other law providing for
the relief of debtors, (vi) acquiesce to, or fail to have
dismissed, within forty five (45) days, any petition filed against
it in any involuntary case under such bankruptcy laws, or (vii)
take any action for the purpose of effecting any of the foregoing;
(h) any Borrower shall admit in writing its
inability, or be generally unable, to pay its debts as they become
due or cease operations of its present business;
(i) any Subsidiary or any Guarantor shall (i)
apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee or liquidator of
itself or of all or a substantial part of its property, (ii) admit
in writing its inability, or be generally unable, to pay its debts
as they become due or cease operations of its present business,
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(iii) make a general assignment for the benefit of creditors, (iv)
commence a voluntary case under any state or federal bankruptcy
laws (as now or hereafter in effect), (v) be adjudicated a bankrupt
or insolvent, (vi) file a petition seeking to take advantage of any
other law providing for the relief of debtors, (vii) acquiesce to,
or fail to have dismissed, within forty five (45) days, any
petition filed against it in any involuntary case under such
bankruptcy laws, or (viii) take any action for the purpose of
effecting any of the foregoing;
(j) any Lien created hereunder or provided for
hereby or under any related agreement for any reason ceases to be
or is not a valid and perfected Lien having, subject to Permitted
Encumbrances, a first priority interest with respect to
Receivables, Inventory and General Intangibles and having the same
priority as Agent had on the Closing Date with respect to
Equipment;
(k) notice of termination, termination, breach or
default by the CDA of the CDA Guaranty and Borrowers fail to prepay
the outstanding principal balance of the Term Loan in the then
outstanding amount of the CDA Guaranty within sixty (60) days of
such notice, termination, breach or default provided that the funds
used to make such prepayment shall be obtained from additional
equity contributions to Borrowers and Borrowers shall not be
permitted to request Revolving Advances to make such payments.
(l) a default of the obligations of any Borrower
or any Guarantor under any other agreement to which it is a party
shall occur which has a Material Adverse Effect on Borrowers, GDC
Canada and GDC United Kingdom taken as a whole which default is not
cured within any applicable grace period;
(m) termination, breach or default of any
Guarantee or Guarantor Security Agreement or similar agreement
executed and delivered to Agent and/or any Lender in connection
with the Obligations of Borrowers, or if any Guarantor attempts to
terminate, challenges the validity of, or its liability under, any
such Guarantee or Guarantor Security Agreement or similar
agreement;
(n) any Change of Control;
(o) any material provision of this Agreement or
any other Document shall, for any reason, cease to be valid and
binding on any Borrower or any Guarantor, or any Borrower or any
Guarantor shall so claim in writing;
(p) any portion of the Collateral shall be seized
or taken by a Governmental Body, or any Borrower or the title and
rights of any Borrower or any Original Owner which is the owner of
any material portion of the Collateral shall have become the
subject matter of litigation which would be likely to, in the
reasonable opinion of Required Lenders, upon final determination,
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result in impairment or loss of the security provided by this
Agreement or the Other Documents; or
(q) an event or condition specified in Section
7.15 or 9.14 shall occur or exist with respect to any Plan and, as
a result of such event or condition, together with all other such
events or conditions, any Borrower or any member of the Controlled
Group shall incur, or in the opinion of Required Lenders be
reasonably likely to incur, a liability to a Plan or the PBGC (or
both) which, in the reasonable judgment of Required Lenders, would
be likely to have a material adverse effect upon the Collateral or
the ability of Borrowers to perform their Obligations under this
Agreement.
XI. LENDERS' RIGHTS AND REMEDIES AFTER DEFAULT.
11.1. Rights and Remedies. Upon the occurrence of
an Event of Default pursuant to Article X(g) all Obligations shall
be immediately due and payable and this Agreement and the
obligation of Lenders and Agent to make Advances shall be deemed
terminated; and, upon the occurrence of any of the other Events of
Default and at any time thereafter (such Event of Default not
having previously been cured), at the option of Required Lenders
all Obligations shall be immediately due and payable and Required
Lenders shall have the right to terminate this Agreement and to
terminate the obligation of Lenders and Agent to make Advances.
Upon the occurrence of any Event of Default, Agent shall have the
right to exercise any and all other rights and remedies provided
for herein, under the Uniform Commercial Code and at law or equity
generally, including, without limitation, the right to foreclose
the security interests granted herein and to realize upon any
Collateral by any available judicial procedure and/or to take
possession of and sell any or all of the Collateral with or without
judicial process and Agent may enter any Borrower's premises or
other premises without legal process and without incurring
liability to any Borrower therefor, and Agent may thereupon, or at
any time thereafter, in its discretion without notice or demand,
take the Collateral and remove the same to such place as Agent may
deem advisable and Agent may require each Borrower to make the
Collateral available to Agent at a convenient place. With or
without having the Collateral at the time or place of sale, Agent
may sell the Collateral, or any part thereof, at public or private
sale, at any time or place, in one or more sales, at such price or
prices, and upon such terms, either for cash, credit or future
delivery (without assumption of any credit risk), as Agent may
elect. Except as to that part of the Collateral which is
perishable or threatens to decline speedily in value or is of a
type customarily sold on a recognized market, Agent shall give
Borrowing Agent reasonable notification of such sale or sales, it
being agreed that in all events written notice mailed to Borrowing
Agent at least five (5) Business Days prior to such sale or sales
is reasonable notification. At any such sale Agent or any Lender
may bid for and become the purchaser, and Agent or any Lender or
any other purchaser at any such sale thereafter shall hold the
Collateral sold absolutely free from any claim or right of
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whatsoever kind, including any right or equity of redemption and
such right and equity are hereby expressly waived and released by
each Borrower. In connection with the exercise of the foregoing
remedies, Agent is granted permission to use all of Borrowers'
trademarks, service marks, trade styles, trade names, patents,
patent applications, licenses, franchises and other proprietary
rights which are used in connection with (a) Inventory for the
purpose of disposing of such Inventory and (b) Equipment for the
purpose of completing the manufacture of unfinished goods. The
proceeds realized from the sale of any Collateral shall be applied
as follows: first, to the reasonable costs, expenses and attorneys'
fees and expenses incurred by Agent for collection and for
acquisition, completion, protection, removal, storage, sale and
delivery of the Collateral; second, to interest due upon any of the
Obligations; and, third, to the principal of the Obligations. If
any deficiency shall arise, Borrowers shall remain liable to Agent
and Lenders therefor.
11.2. Agent's Discretion. Agent shall have the
right in its sole discretion to determine which rights, Liens,
security interests or remedies Agent may at any time pursue,
relinquish, subordinate, or modify or to take any other action with
respect thereto and such determination will not in any way modify
or affect any of Agent's or Lenders' rights hereunder.
11.3. Setoff. In addition to any other rights
which Agent or any Lender may have under applicable law, upon the
occurrence of an Event of Default, Agent and each Lender shall have
a right to apply any Borrower's property held by Agent and such
Lender to reduce the Obligations.
11.4. Rights and Remedies not Exclusive. The
enumeration of the foregoing rights and remedies is not intended to
be exhaustive and the exercise of any right or remedy shall not
preclude the exercise of any other right or remedies, all of which
shall be cumulative and not alternative.
XII. WAIVERS AND JUDICIAL PROCEEDINGS.
12.1. Waiver of Notice. Each Borrower hereby
waives notice of non-payment of any of the Receivables, demand,
presentment, protest and notice thereof with respect to any and all
instruments, notice of acceptance hereof, notice of loans or
advances made, credit extended, Collateral received or delivered,
or any other action taken in reliance hereon, and all other demands
and notices of any description, except such as are expressly
provided for herein.
12.2. Delay. No delay or omission on Agent's or
any Lender's part in exercising any right, remedy or option shall
operate as a waiver of such or any other right, remedy or option or
of any default. Any partial exercise of any right, remedy or
option by Agent or any Lender shall not operate as a waiver of any
subsequent full or partial exercise of any right, remedy or option
by Agent or any Lender.
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12.3. Jury Waiver. EACH PARTY TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING UNDER THIS AGREEMENT
OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH, OR (B) IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR
ANY OF THEM WITH RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH,
OR THE TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE WHETHER
NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT
OR TORT OR OTHERWISE AND EACH PARTY HEREBY CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE
AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENTS OF THE PARTIES HERETO TO THE
WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
XIII. EFFECTIVE DATE AND TERMINATION.
13.1. Term. This Agreement, which shall inure to
the benefit of and shall be binding upon the respective successors
and permitted assigns of Agent, each Borrower and each Lender,
shall become effective on the date hereof and shall continue in
full force and effect until November 30, 1996 (the "Term") unless
sooner terminated as herein provided. Borrowing Agent may
terminate this Agreement at any time upon forty five (45) days'
prior written notice to Agent ("Termination Date") upon payment in
full of the Obligations; provided, however, that Borrowers shall
pay an early termination fee in an amount equal to (x) $200,000 if
the termination date occurs from December 1, 1993 to and including
November 30, 1994 and (y) $100,000 if the termination date occurs
from December 1, 1994 to and including November 30, 1995.
13.2. Termination. The termination of this
Agreement shall not affect any of Borrowers', Agent's or any
Lender's rights, or any of the Obligations having their inception
prior to the effective date of such termination, and the provisions
hereof shall continue to be fully operative until all transactions
entered into, rights or interests created and Obligations have been
fully disposed of, concluded or liquidated. The Liens and rights
granted to Agent for the benefit of Lenders hereunder and the
financing statements filed hereunder shall continue in full force
and effect, notwithstanding the termination of this Agreement or
the fact that Borrowers' account may from time to time be
temporarily in a zero or credit position, until (i) all of the
Obligations of Borrowers have been paid or performed in full after
the termination of this Agreement or Borrowers have furnished Agent
and Lenders with an indemnification satisfactory to Agent and
Lenders with respect thereto and (ii) Borrowers have caused cash to
be deposited and maintained in an account with Agent, as cash
collateral, in an amount equal to the aggregate face amount of all
outstanding Letters of Credit, and Borrowers hereby irrevocably
authorize Agent, in its discretion, on Borrowers' behalf and in
Borrowers' name, to open such an account and to make and maintain
deposits therein, or in an account opened by Borrowers, in the
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amounts required to be made by Borrowers, unless such outstanding
Letters of Credit have been surrendered by their beneficiaries to
Agent. Accordingly, each Borrower waives any rights which it may
have under Section 9-404(1) of the Uniform Commercial Code to
demand the filing of termination statements with respect to the
Collateral, and Agent shall not be required to send such
termination statements to any Borrower, or to file them with any
filing office, unless and until this Agreement shall have been
terminated in accordance with its terms and all Obligations paid in
full in immediately available funds. All representations,
warranties, covenants, waivers and agreements contained herein
shall survive termination hereof until all Obligations are repaid
or performed in full or longer as provided herein.
XIV. REGARDING AGENT.
14.1. Appointment. Each Lender hereby irrevocably
designates BNY to act as Agent for such Lender under the Documents.
Each Lender hereby irrevocably authorizes Agent to take such action
on its behalf under the provisions of the Documents and to exercise
such powers and to perform such duties hereunder and thereunder as
are specifically delegated to or required of Agent by the terms
hereof and thereof and such other powers as are reasonably
incidental thereto and Agent shall hold all Collateral and the
collateral covered by the Guarantor Security Agreements, payments
of principal and interest, fees (except the fees set forth in the
Fee Letter and Section 3.4), charges and collections received
pursuant to the Documents, for the ratable benefit of Lenders.
Agent may perform any of its duties hereunder or under the other
Documents by or through its agents or employees. As to any matters
not expressly provided for by this Agreement or any of the other
Documents (including without limitation, collection of any Note)
Agent shall not be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and
shall be fully protected in so acting or refraining from acting)
upon the instructions of the Lenders or the Required Lenders, as
applicable and such instructions shall be binding upon Lenders;
provided, however, that Agent shall not be required to take any
action which exposes Agent to liability or which is contrary to the
Documents or applicable law unless Agent is furnished with an
indemnification reasonably satisfactory to Agent with respect
thereto.
14.2. Nature of Duties. Agent shall have no duties
or responsibilities except those expressly set forth in the
Documents. Neither Agent nor any of its officers, directors,
employees or agents shall be (i) liable for any action taken or
omitted by them as such hereunder or thereunder or in connection
herewith or therewith, unless caused by their gross negligence (but
not mere negligence) or willful misconduct, or (ii) responsible in
any manner to any Lender for any recitals, statements,
representations or warranties made by any Borrower, any Guarantor
or any officer thereof contained in any of the Documents or in any
certificate, report, statement or other document referred to or
provided for in, or received by Agent under or in connection with,
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any of the Documents or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of any of the Documents
or for any failure of any Borrower or any Guarantor to perform its
obligations hereunder or thereunder. Agent shall not be under any
obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or
conditions of, any of the Documents, or to inspect the properties,
books or records of any Borrower or any Guarantor. The duties of
Agent as respects the Advances shall be mechanical and
administrative in nature; Agent shall not have by reason of any
Document a fiduciary relationship in respect of any Lender; and
nothing in any of the Documents, expressed or implied, is intended
to or shall be so construed as to impose upon Agent any obligations
in respect of any of the Documents except as expressly set forth
herein or therein.
14.3. Lack of Reliance on Agent and Resignation.
Independently and without reliance upon Agent or any other Lender,
each Lender has made and shall continue to make (i) its own
independent investigation of the financial condition and affairs of
each Borrower and each Guarantor in connection with the making and
the continuance of the Advances hereunder and the taking or not
taking of any action in connection herewith and/or in connection
with the other Documents, and (ii) its own appraisal of the
creditworthiness of each Borrower and each Guarantor. Agent shall
have no duty or responsibility, either initially or on a continuing
basis, to provide any Lender with any credit or other information
with respect thereto, whether coming into its possession before
making of the Advances or at any time or times thereafter except as
shall be provided by any Borrower or any Guarantor pursuant to the
terms hereof or any of the other Documents.
Agent may resign on sixty (60) days' written notice
to each of Lenders and the Borrowers and upon such resignation, the
Required Lenders will promptly designate a successor Agent
reasonably satisfactory to Borrowers. Any such successor Agent
shall succeed to the rights, powers and duties of Agent, and the
term "Agent" shall mean such successor agent effective upon its
appointment, and the former Agent's rights, powers and duties as
Agent shall be terminated, without any other or further act or deed
on the part of such former Agent. After any Agent's resignation as
Agent, the provisions of this Article XIV shall inure to its
benefit as to any actions taken or omitted to be taken by it while
it was Agent.
14.4. Certain Rights of Agent. If Agent shall
request instructions from Lenders with respect to any act or action
(including failure to act) in connection with any of the Documents,
Agent shall be entitled to refrain from such act or taking such
action unless and until Agent shall have received instructions from
the Lenders or Required Lenders, as applicable; and Agent shall not
incur liability to any Person by reason of so refraining. Without
limiting the foregoing, Lenders shall not have any right of action
whatsoever against Agent as a result of its acting or refraining
from acting hereunder or under any other Document in accordance
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with the instructions of the Lenders or Required Lenders, as
applicable.
14.5. Reliance. Agent shall be entitled to rely,
and shall be fully protected in relying, upon any note, writing,
resolution, notice, statement, certificate, telex, teletype or
telecopier message, cablegram, order or other document or telephone
message believed by it to be genuine and correct and to have been
signed, sent or made by the proper person or entity, and, with
respect to all legal matters pertaining to the Documents and its
duties hereunder and thereunder, upon advice of counsel selected by
it. Agent may employ agents and attorneys-in-fact and shall not be
liable for the default or misconduct of any such agents or
attorneys-in-fact selected by Agent with reasonable care.
14.6. Notice of Default. Agent shall not be deemed
to have knowledge or notice of the occurrence of any Incipient
Event of Default or Event of Default or any default under any of
the other Documents, unless Agent has received notice from a Lender
or Borrower referring to this Agreement or the other Documents,
describing such Incipient Event of Default or Event of Default and
stating that such notice is a "notice of default". In the event
that Agent receives such a notice, Agent shall give notice thereof
to Lenders. Agent shall take such action with respect to such
Incipient Event of Default or Event of Default as shall be
reasonably directed by the Lenders or Required Lenders, as
applicable; provided, that, unless and until Agent shall have
received such directions, Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect
to such Incipient Event of Default or Event of Default as it shall
deem advisable in the best interests of Lenders.
14.7. Indemnification. To the extent Agent is not
reimbursed and indemnified by Borrowers and without limiting
Borrowers' obligation to do so, each Lender will reimburse and
indemnify Agent in proportion to its respective portion of the
Advances (or, if no Advances are outstanding, according to its
Commitment Percentage), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses and disbursements of any kind or nature whatsoever
which may be imposed on, incurred by or asserted against Agent in
performing its duties hereunder or under any other Documents, or in
any way relating to or arising out of this Agreement or any of the
other Documents; provided that, Lenders shall not be liable for any
portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from Agent's gross negligence (but not mere
negligence) or willful misconduct.
14.8. Agent in its Individual Capacity. With
respect to the obligation of BNY to lend under this Agreement and
the Revolving Advances made by it, BNY shall have the same rights
and powers hereunder and under any of the other Documents as any
other Lender and as if it were not performing the duties as Agent
specified herein or therein; and the term "Lender" or any similar
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term shall, unless the context clearly otherwise indicates, include
BNY in its individual capacity as a Lender. BNY may engage in
business with Borrowers, Guarantors and Affiliates of any Borrower
or any Guarantor as if it were not performing the duties specified
herein or in any of the other Documents, and may accept fees and
other consideration from any Borrower, any Guarantor or any
Affiliate of any Borrower or any Guarantor for services in
connection with this Agreement and the other Documents or otherwise
without having to account for the same to Lenders.
14.9. Delivery of Documents. To the extent Agent
receives documents and information from any Borrower or any
Guarantor pursuant to the terms of this Agreement or any other
Document or Guarantor Security Agreements, Agent will promptly
furnish such documents and information to any Lender upon the
written request of such Lender to the extent such Lender does not
otherwise receive such documents and information directly from such
Borrower or such Guarantor.
14.10. Borrowers' Undertaking to Agent. Without
prejudice to their respective obligations to Lenders under the
other provisions of this Agreement and the Other Documents, each of
the Borrowers hereby undertakes with Agent to pay to Agent from
time to time on demand all amounts from time to time due and
payable by it for the account of Agent or the Lenders or any of
them pursuant to this Agreement or the Other Documents to the
extent not already paid. Any payment made pursuant to any such
demand shall pro tanto satisfy the relevant Borrower's obligations
to make payments for the account of the Lenders or the relevant one
or more of them pursuant to this Agreement and the Other Documents.
XV. BORROWING AGENCY PROVISIONS.
15.1. Appointment. (a) Each Borrower hereby
irrevocably designates Borrowing Agent as its attorney and agent to
borrow, sign and endorse notes, and execute and deliver all
instruments, documents, writings and further assurances now or
hereafter required hereunder, on behalf of each Borrower, and does
hereby authorize Agent to pay over or credit all loan proceeds
hereunder in accordance with the advance request made by Borrowing
Agent.
(b) It is understood and agreed by each
Borrower that the handling of this credit facility in the manner
set forth in this Agreement is solely as an accommodation to
Borrowers and at their request. Neither Agent nor any Lender shall
incur any liability to Borrowers as a result thereof. To induce
Agent and Lenders to do so and in consideration thereof, each
Borrower hereby agrees to indemnify Agent and each Lender and to
hold Agent and each Lender harmless from and against any and all
liabilities, expenses, losses, damages and claims of damage or
injury asserted against Agent or any Lender by any Person arising
from or incurred by reason of Agent's or such Lender's handling of
the financing arrangements of the Borrowers as provided herein,
reliance by Agent and Lenders on any request or instruction from
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Borrowing Agent or any other action taken by Agent or any Lender
with respect to this Section 15.1 except due to the gross (not
mere) negligence or willful misconduct of the indemnified party.
(c) Each Borrower represents and warrants to
Agent and Lenders that (i) the Borrowers have one or more common
shareholders (other than GDC whose stock is publicly held),
directors and officers, (ii) the businesses and corporate
activities of the other Borrowers are closely related to, and
substantially benefit, the business and corporate activities of
such Borrower, (iii) the financial and other operations of the
Borrowers are performed on a combined basis as if the Borrowers
constituted a consolidated corporate group, (iv) such Borrower has
received substantial economic benefit from entering into this
Agreement and shall receive substantial economic benefit from the
application of each Advance hereunder, in each case whether or not
such Advance is used directly by such Borrower, and (v) all
extensions of credit hereunder requested by the Borrowing Agent are
for the exclusive and indivisible benefit of all Borrowers as
though, for purposes of this Agreement and the Other Documents and
the allocation of any Collateral thereunder, the Borrowers
constituted a single entity.
15.2. Joint and Several Obligations. Each Borrower
(other than GDC), jointly and severally, unconditionally guaranties
to Agent and Lenders, prompt payment when due by GDC (whether by
acceleration or otherwise) of the Term Loan. Each Borrower further
agrees that all Obligations shall be joint and several, and that
each Borrower shall make payment upon any of the Obligations upon
their maturity by acceleration or otherwise, and that such
obligation and liability on the part of each Borrower shall in no
way be affected by any extensions, renewals and forbearances
granted by Agent or any Lender to any other Borrower or any
Guarantor, failure of Agent or any Lender to give any Borrower
notice of borrowing or any other notice, any failure of Agent or
any Lender to pursue or preserve its rights against the other
Borrowers or any Guarantor, the release by Agent or any Lender of
any Collateral or any collateral covered by the Guarantor Security
Agreements now or hereafter acquired from any Borrower or any
Guarantor, failure of Agent or any Lender to realize upon such
Collateral or any collateral covered by the Guarantor Security
Agreements in a commercially reasonably manner, and that such
agreement by each Borrower to pay upon any notice issued pursuant
hereto is unconditional and unaffected by prior recourse by Agent
or any Lender to the other Borrowers, any Guarantor, any Collateral
or any collateral covered by the Guarantor Security Agreements or
the lack thereof.
15.3. Waiver of Subrogation. Each Borrower
expressly waives any and all rights of subrogation, reimbursement,
indemnity, exoneration, contribution or any other claim which such
Borrower may now or hereafter have against any Borrower or other
Person directly or contingently liable for the obligations
hereunder, or against or with respect to any Borrower's or any
other Person's property (including, without limitation, any
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property which is Collateral), arising from the existence or
performance of this Agreement or any Other Document.
XVI. MISCELLANEOUS.
16.1. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State
of New York applied to contracts to be performed wholly within the
State of New York. Any judicial proceeding brought by or against
any Borrower with respect to any of the Obligations, this Agreement
or any Other Document or any related agreement may be brought in
any court of competent jurisdiction in the State of New York,
United States of America, and, by execution and delivery of this
Agreement, each Borrower accepts for itself and in connection with
its properties, generally and unconditionally, the non-exclusive
jurisdiction of the aforesaid courts, and irrevocably agrees to be
bound by any judgment rendered thereby in connection with this
Agreement or any Other Document. Nothing herein shall affect the
right to serve process in any manner permitted by law or shall
limit the right of Agent or Lenders to bring proceedings against
any Borrower in the courts of any other jurisdiction. Each
Borrower waives any objection to jurisdiction and venue of any
action instituted hereunder and shall not assert any defense based
on lack of jurisdiction or venue or based upon forum non
conveniens. Any judicial proceeding by any Borrower against Agent
or any Lender involving, directly or indirectly, any matter or
claim in any way arising out of, related to or connected with this
Agreement or any Other Document or any related agreement, shall be
brought only in a federal or state court located in the City of New
York, State of New York.
16.2. Entire Understanding. (a) This Agreement,
the Other Documents and the other documents executed concurrently
herewith contain the entire understanding between Borrowers, Agent
and each Lender and supersede all prior agreements and
understandings, if any, relating to the subject matter hereof and
thereof. Any promises, representations, warranties or guarantees
not herein contained and hereafter made shall have no force and
effect unless in writing, signed by each Borrower's, Agent's and
each Lender's respective officers. Neither this Agreement nor any
portion or provisions hereof may be changed, modified, amended,
waived, supplemented, discharged, cancelled or terminated orally or
by any course of dealing, or in any manner other than by an
agreement in writing in accordance with Section 16.2(b). Each
Borrower acknowledges that it has been advised by counsel in
connection with the execution of this Agreement and the Other
Documents and is not relying upon oral representations or
statements inconsistent with the terms and provisions of this
Agreement or any Other Document. In the event a conflict exists
between the terms and provisions of this Agreement and the terms
and provisions of any of the Other Documents, the terms and
provisions of this Agreement shall control.
(b) Required Lenders or Agent with the
consent in writing of the Required Lenders, and Borrowers may,
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subject to the provisions of this Section 16.2(b), from time to
time enter into written supplemental agreements to this Agreement
or any of the other Documents, for the purpose of adding or
deleting any provisions or otherwise changing, varying or waiving
in any manner the rights of Lenders, Agent, Borrowers or Guarantors
hereunder or thereunder or the conditions, provisions or terms
hereof or thereof or waiving any Event of Default, but only to the
extent specified in such written agreements; provided, however,
that no such supplemental agreement shall, without the consent of
all Lenders:
(i) increase the Commitment
Percentage of any Lender;
(ii) increase the Maximum Loan Amount,
Maximum Revolving Advance Amount or any of the Advance Rates;
(iii) increase the amount of the Term
Loan;
(iv) extend the maturity of any Note or
the due date for any amount payable hereunder, or decrease the rate
of interest or reduce any fee payable by Borrowers to Lenders
pursuant to this Agreement;
(v) alter the definition of the term
Required Lenders or alter, amend or modify this Section 16.2(b) or
Section 2.2(g), 3.7, 3.8, 3.9, 3.10, 16.5 or 16.8;
(vi) release any Collateral during any
calendar year having an aggregate value in excess of $1,000,000;
(vii) change the rights and duties of
Agent; or
(viii) consent to any acquisition by any
Borrower of the assets or capital stock of any Person where the
amount paid by such Borrower after June 1, 1994 in connection with
such acquisition together with all amounts previously paid by
Borrowers in connection with such acquisitions after June 1, 1994
would exceed $5,000,000 in the aggregate.
Any such supplemental agreement shall apply equally to each of the
Lenders and shall be binding upon Borrowers, Lenders and Agent and
all future holders of the Obligations. In the case of any waiver,
Borrowers, Agent and Lenders shall be restored to their former
positions and rights, and any Event of Default waived shall be
deemed to be cured and not continuing, but no waiver of a specific
Event of Default shall extend to any subsequent Event of Default
(whether or not the subsequent Event of Default is the same as the
Event of Default which was waived), or impair any right consequent
thereon.
16.3. Successors and Assigns; Participations; New
Lenders.
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(a) This Agreement shall be binding upon and
inure to the benefit of each Borrower, Agent, each Lender, all
future holders of the Obligations and their respective successors
and assigns, except that no Borrower may assign or transfer any of
its rights or obligations under this Agreement without the prior
written consent of Agent and each Lender.
(b) Each Borrower acknowledges that in the
regular course of commercial banking business one or more Lenders
may at any time and from time to time sell participating interests
in the Advances and its commitment to make or participate in
Advances to other financial institutions (each such transferee or
purchaser of a participating interest, a "Transferee"). Each
Transferee may exercise all rights of payment (including, without
limitation, rights of set-off) with respect to the portion of such
Advances held or participated in by it or other Obligations payable
hereunder as fully as if such Transferee were the direct holder
thereof provided that Borrowers shall not be required to pay to any
Transferee more than the amount which it would have been required
to pay to the Lender which granted an interest in its Advances or
other Obligations payable hereunder to such Transferee had such
Lender retained such interest in the Advances hereunder or other
Obligations payable hereunder and in no event shall Borrowers be
required to pay any such amount arising from the same circumstances
and with respect to the same Advances or other Obligations payable
hereunder to both Lender and such Transferee. Each Borrower hereby
grants to any Transferee a continuing security interest in any
deposits, moneys or other property actually or constructively held
by such Transferee as security for such Transferee's interest in
the Advances.
(c) Any Lender may sell, assign or transfer
all or any part of its rights and obligations under this Agreement
and the other Documents to (x) one or more of its affiliates or in
connection with the sale or transfer of such Lender's loan
portfolio, or (y) with Agent's and Borrowing Agent's prior written
consent, which consent will not be unreasonably withheld, to
additional banks or financial institutions (each a "Purchasing
Lender"), in minimum amounts of not less than $2,500,000, pursuant
to a Commitment Transfer Supplement, executed by a Purchasing
Lender, the transferor Lender, and Agent and delivered to Agent for
recording. Upon such execution, delivery, acceptance and
recording, from and after the transfer effective date determined
pursuant to such Commitment Transfer Supplement, (i) the Purchasing
Lender thereunder shall be a party hereto and, to the extent
provided in such Commitment Transfer Supplement, have the rights
and obligations of a Lender with a Commitment Percentage as set
forth therein, and (ii) the transferor Lender thereunder shall, to
the extent provided in such Commitment Transfer Supplement, be
released from its obligations under this Agreement, the Commitment
Transfer Supplement creating a novation for that purpose. Such
Commitment Transfer Supplement shall be deemed to amend this
Agreement to the extent, and only to the extent, necessary to
reflect the addition of such Purchasing Lender and the resulting
adjustment of the Commitment Percentages arising from the purchase
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by such Purchasing Lender of all or a portion of the rights and
obligations of the transferor Lender under this Agreement and the
other Documents. Borrowers hereby consent to the addition of such
Purchasing Lender and the resulting adjustment of the Commitment
Percentages arising from the purchase by such Purchasing Lender of
all or a portion of the rights and obligations of such transferor
Lender under this Agreement and the Other Documents. Borrowers
shall execute and deliver such further documents and do such
further acts and things in order to effectuate the foregoing.
(d) Agent shall maintain at its address a
copy of each Commitment Transfer Supplement delivered to it and a
register (the "Register") for the recordation of the Advances owing
to or participated in by each Lender from time to time. The
entries in the Register shall be conclusive, in the absence of
manifest error, and Borrowers, Agent and Lenders may treat each
Person whose name is recorded in the Register as the owner of the
Advance recorded therein for the purposes of this Agreement. The
Register shall be available for inspection by the Borrowers or any
Lender at any reasonable time and from time to time upon reasonable
prior notice. Agent shall receive a fee in the amount of $2,500
payable by the applicable Purchasing Lender upon the effective date
of each transfer or assignment to such Purchasing Lender.
(e) Borrowers authorize each Lender to
disclose to any Transferee or Purchasing Lender and any prospective
Transferee or Purchasing Lender any and all financial information
in such Lender's possession concerning Borrowers which has been
delivered to such Lender by or on behalf of Borrowers pursuant to
this Agreement or any other Document or in connection with such
Lender's credit evaluation of Borrowers. Each such Transferee or
Purchasing Lender shall agree to preserve the confidentiality of
non-public information in accordance with the terms of this
Agreement.
16.4. Application of Payments. Agent shall have
the continuing and exclusive right to apply or reverse and re-apply
any payment and any and all proceeds of Collateral to any portion
of the Obligations. To the extent that any Borrower makes a
payment or Agent or any Lender receives any payment or proceeds of
the Collateral for any Borrower's benefit, which are subsequently
invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, debtor in possession,
receiver, custodian or any other party under any bankruptcy law,
common law or equitable cause, then, to such extent, the
Obligations or part thereof intended to be satisfied shall be
revived and continue as if such payment or proceeds had not been
received by Agent or such Lender.
16.5. Indemnity. Each Borrower shall indemnify and
hold harmless Agent, each Lender and their respective employees,
agents, directors and officers from and against any and all
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses and disbursements of any kind or
nature whatsoever (including, without limitation, fees and
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disbursements of counsel) which may be imposed on, incurred by, or
asserted against Agent or any Lender in any litigation, proceeding
or investigation instituted or conducted by any governmental agency
or instrumentality or any other Person with respect to any aspect
of, or any transaction contemplated by, or referred to in, or any
matter related to, this Agreement, whether or not Agent or any
Lender is a party thereto, except to the extent that any of the
foregoing arises out of the gross (not mere) negligence or willful
misconduct of the party being indemnified. The obligations of
Borrowers under this Section 16.5 shall survive termination of this
Agreement and the Other Documents and payment in full of the
Obligations.
16.6. Notice. Any notice or request hereunder may
be given to Borrowers or to Agent or any Lender at their respective
addresses set forth below or at such other address as may hereafter
be specified in a notice designated as a notice of change of
address under this Section. Any notice or request hereunder shall
be given by (a) hand delivery, (b) overnight courier, (c)
registered or certified mail, return receipt requested, (d) telex
or telegram, subsequently confirmed by registered or certified
mail, or (e) telecopy to the number set out below (or such other
number as may hereafter be specified in a notice designated as a
notice of change of address) with telephone communication to a duly
authorized officer of the recipient confirming its receipt and
subsequently confirmed by registered or certified mail. Notices
and requests shall, in the case of those by (x) overnight courier
or telegram, be deemed to have been given when delivered to the
overnight courier or delivered to the telegraph office addressed as
provided in this Section and (y) registered or certified mail, be
deemed to have been given when deposited in the United States mail
addressed as provided in this Section. Notwithstanding the
foregoing, any notice to be given under Article II will not be
deemed delivered until actual receipt by Agent or Lenders.
(A) If to Agent or BNY, at: The Bank of New York
123 Main Street
White Plains, New York 10602
Attention: Edward Moriarty
Telephone: (914) 684-5634
FAX: (914) 684-5636
with a copy to: BNY Business Center, Inc.
301 Tresser Boulevard
Stamford, Connecticut 06901
Attention: Ron Pagoto
Telephone: (203) 353-0505
FAX: (203) 967-8006
with a copy to: Hahn & Hessen
350 Fifth Avenue
New York, New York 10118
Attention: Steven J. Seif, Esq.
Telephone: (212) 736-1000
FAX: (212) 594-7167
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(B) If to a Lender other than BNY, as specified on the
signature pages hereof.
(C) If to Borrowers, at: General DataComm Industries, Inc.
1579 Straits Turnpike
Middlebury, Connecticut 06762-1299
Attention: William S. Lawrence/
Dennis Nesler
Telephone: (203) 574-1118
FAX: (203) 598-7133
with a copy to: Weisman, Celler, Spett & Modlin
445 Park Avenue
New York, New York 10022
Attention: Howard Modlin, Esq./
Gerald Gordon, Esq.
Telephone: (212) 371-5400
FAX: (212) 371-5407
16.7. Severability. If any part of this Agreement
is contrary to, prohibited by, or deemed invalid under applicable
laws or regulations, such provision shall be inapplicable and
deemed omitted to the extent so contrary, prohibited or invalid,
but the remainder hereof shall not be invalidated thereby and shall
be given effect so far as possible.
16.8. Expenses. All costs and expenses including,
without limitation, reasonable attorneys' fees and disbursements
incurred by Agent, Agent on behalf of Lenders and Lenders (a) in
all efforts made to enforce payment of any Obligation or effect
collection of any Collateral, or (b) in connection with the
entering into, modification, amendment, administration and
enforcement of this Agreement or any consents or waivers hereunder
and all related agreements, documents and instruments, or (c) in
instituting, maintaining, preserving, enforcing and foreclosing on
Agent's security interest in or Lien on any of the Collateral,
whether through judicial proceedings or otherwise, or (d) in
defending or prosecuting any actions or proceedings arising out of
or relating to Agent's or any Lender's transactions with any
Borrower, or (e) in connection with any advice given to Agent or
any Lender with respect to its rights and obligations under this
Agreement and all related agreements, or (f) in syndicating the
Advances to be made under this Agreement but only to the extent
Agent involves its syndications department, may be charged to
Borrowers' account as a Domestic Revolving Loan and shall be part
of the Obligations.
16.9. Injunctive Relief. Each Borrower recognizes
that, in the event any Borrower fails to perform, observe or
discharge any of its obligations or liabilities under this
Agreement or any Other Document, any remedy at law may prove to be
inadequate relief to Lenders; therefore, Agent, if Required Lenders
so request, shall be entitled to seek temporary and permanent
injunctive relief in any such case without the necessity of proving
actual damages.
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Exhibit 28.1
Page 90 of 93
16.10. Consequential Damages. Neither Agent, any
Lender nor any agent or attorney for Agent or any Lender shall be
liable to any Borrower for consequential damages arising from any
breach of contract, tort or other wrong relating to the
establishment, administration or collection of the Obligations. No
Borrower or any agent or attorney for any Borrower shall be liable
to Agent or any Lender for consequential damages arising from any
breach of this Agreement.
16.11. Captions. The captions at various places in
this Agreement are intended for convenience only and do not
constitute and shall not be interpreted as part of this Agreement.
16.12. Counterparts. This Agreement may be executed
in one or more counterparts, each of which taken together shall
constitute one and the same instrument.
16.13. Construction. The parties acknowledge that
each party and its counsel have reviewed this Agreement and that
the normal rule of construction to the effect that any ambiguities
are to be resolved against the drafting party shall not be employed
in the interpretation of this Agreement or any amendments,
schedules or exhibits hereto.
16.14. Confidentiality. Agent, each Lender and any
Transferee shall hold all non-public information obtained by Agent
or such Lender pursuant to the requirements of this Agreement in
accordance with Agent's and such Lender's customary procedures for
handling confidential information of this nature; provided,
however, Agent and each Lender may disclose such confidential
information (a) to its examiners, affiliates, outside auditors,
counsel and other professional advisors, (b) to any Transferee or
any prospective Transferee, and (c) as required or requested by any
governmental agency or representative thereof or pursuant to legal
process or in connection with any suit involving Agent, any Lender
or any Transferee; provided, however that in no event shall Agent
or any Lender be obligated to return any materials furnished by any
Borrower other than those documents and instruments in possession
of Agent or any Lender in order to perfect its Lien in
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Exhibit 28.1
Page 91 of 93
the Collateral and provided that the Obligations have been paid in full
and this Agreement has been terminated.
Each of the parties has signed this Agreement as of the
1st day of June, 1994.
GENERAL DATACOMM INDUSTRIES, INC.
GENERAL DATACOMM, INC.
GDC NAUGATUCK, INC.
DATACOMM SERVICE CORPORATION
GDC REALTY, INC.
GENERAL DATACOMM INTERNATIONAL CORP.
GENERAL DATACOMM SYSTEMS, INC.
By:_______________________________________
William S. Lawrence, the Vice President
of each of the foregoing corporations
1579 Straits Turnpike
Middlebury, Connecticut 06762-1299
THE BANK OF NEW YORK
By:___________________________________
David M. Duffy, Vice President
123 Main Street
White Plains, New York 10602
Commitment Percentage: 45.4545455%
IBJ SCHRODER BANK & TRUST COMPANY
By:____________________________________
Title__________________________________
One State Street
New York, New York 10004
Commitment Percentage: 30.3030303%
PEOPLE'S BANK
By:____________________________________
Patricia O. Phalon, Vice President
900 Main Street South
Southbury, Connecticut 06488
Commitment Percentage: 24.2424242%
THE BANK OF NEW YORK, as Agent
By:___________________________________
David M. Duffy, Vice President
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Exhibit 28.1
Page 92 of 93
STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
On this 1st day of June, 1994, before me personally came
WILLIAM S. LAWRENCE, to me known, who, being by me duly sworn, did
depose and say that he is the Vice-President of each of GENERAL
DATACOMM INDUSTRIES, INC., GENERAL DATACOMM, INC., GDC NAUGATUCK,
INC., DATACOMM SERVICE CORPORATION, GDC REALTY, INC., GENERAL
DATACOMM INTERNATIONAL CORP. and GENERAL DATACOMM SYSTEMS, INC.,
the corporations described in and which executed the foregoing
instrument and that he signed his name thereto by order of the
board of directors of said corporations.
______________________________
NOTARY PUBLIC
STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
On this 1st day of June, 1994, before me personally came
David M. Duffy, to me known, who, being by me duly sworn, did
depose and say that he is the Vice President of THE BANK OF NEW
YORK, the corporation described in and which executed the foregoing
instrument and that he signed his name thereto by order of the
board of directors of said corporation.
______________________________
NOTARY PUBLIC
STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
On this 1st day of June, 1994, before me personally came
_________________, to me known, who, being by me duly sworn, did
depose and say that he is the _____________ of IBJ SCHRODER BANK &
TRUST COMPANY, the corporation described in and which executed the
foregoing instrument and that he signed his name thereto by order
of the board of directors of said corporation.
-91-
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Exhibit 28.1
Page 93 of 93
______________________________
NOTARY PUBLIC
STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
On this 1st day of June, 1994, before me personally came
Patricia O. Phalon, to me known, who, being by me duly sworn, did
depose and say that she is the Vice President of PEOPLE'S BANK, the
corporation described in and which executed the foregoing instrument and
that she signed her name thereto by order of the board of directors
of said corporation.
_____________________
NOTARY PUBLIC