EXHIBIT 10.3
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CREDIT AGREEMENT
Dated as of March 12, 1996,
Among
SHARED TECHNOLOGIES FAIRCHILD COMMUNICATIONS CORP.,
SHARED TECHNOLOGIES INC.,
THE LENDERS REFERRED TO HEREIN,
THE FRONTING BANKS REFERRED TO HEREIN,
CREDIT SUISSE,
as Arranger, Administrative Agent
and Collateral Agent
CITICORP USA, INC.
as Documentation Agent
and
NATIONSBANK, N.A.
as Documentation Agent
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[CS&M Ref. No. 5874-122]
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
SECTION 1.01. Defined Terms...............................................................1
SECTION 1.02. Terms Generally.............................................................22
ARTICLE II
The Credits
SECTION 2.01. Commitments.................................................................22
SECTION 2.02. Loans.......................................................................22
SECTION 2.03. Borrowing Procedure.........................................................24
SECTION 2.04. Evidence of Debt; Repayment of Loans........................................25
SECTION 2.05. Fees........................................................................25
SECTION 2.06. Interest on Loans...........................................................26
SECTION 2.07. Default Interest............................................................27
SECTION 2.08. Alternate Rate of Interest..................................................27
SECTION 2.09. Termination and Reduction of Commitments....................................27
SECTION 2.10. Conversion and Continuation of Term Borrowings..............................28
SECTION 2.11. Repayment of Term Borrowings................................................29
SECTION 2.12. Optional Prepayments........................................................30
SECTION 2.13. Mandatory Prepayments.......................................................30
SECTION 2.14. Reserve Requirements; Change in Circumstances...............................32
SECTION 2.15 Change in Legality..........................................................33
SECTION 2.16. Indemnity...................................................................34
SECTION 2.17. Pro Rata Treatment..........................................................34
SECTION 2.18. Sharing of Setoffs..........................................................34
SECTION 2.19. Payments....................................................................35
SECTION 2.20. Taxes.......................................................................35
SECTION 2.21. Assignment of Commitments Under Certain Circumstances; Duty to
Mitigate....................................................................37
SECTION 2.22. Letters of Credit...........................................................38
ARTICLE III
Representations and Warranties
SECTION 3.01. Organization; Powers........................................................42
SECTION 3.02. Authorization...............................................................42
SECTION 3.03. Enforceability..............................................................43
SECTION 3.04. Governmental Approvals......................................................43
SECTION 3.05. Financial Statements........................................................43
SECTION 3.06. No Material Adverse Change..................................................44
SECTION 3.07. Title to Properties; Possession Under Leases................................44
SECTION 3.08. Subsidiaries................................................................44
SECTION 3.09. Litigation; Compliance with Laws............................................44
SECTION 3.10. Agreements..................................................................44
SECTION 3.11. Federal Reserve Regulations.................................................45
SECTION 3.12. Investment Company Act; Public Utility Holding Company Act..................45
SECTION 3.13. Use of Proceeds.............................................................45
SECTION 3.14. Tax Returns.................................................................45
SECTION 3.15. No Material Misstatements...................................................45
SECTION 3.16. Employee Benefit Plans......................................................46
SECTION 3.17. Environmental Matters.......................................................46
SECTION 3.18. Insurance...................................................................46
SECTION 3.19. Security Documents..........................................................47
SECTION 3.20. Location of Real Property and Leased Premises...............................47
SECTION 3.21. Labor Matters...............................................................47
SECTION 3.22. Solvency....................................................................48
ARTICLE IV
Conditions of Lending
SECTION 4.01. All Credit Events...........................................................48
SECTION 4.02. First Credit Event..........................................................49
ARTICLE V
Affirmative Covenants
SECTION 5.01. Existence; Businesses and Properties........................................52
SECTION 5.02. Insurance...................................................................52
SECTION 5.03. Obligations and Taxes.......................................................53
SECTION 5.04. Financial Statements, Reports, etc..........................................53
SECTION 5.05. Litigation and Other Notices................................................55
SECTION 5.06. Employee Benefits...........................................................55
SECTION 5.07. Maintaining Records; Access to Properties and Inspections...................55
SECTION 5.08. Use of Proceeds.............................................................55
SECTION 5.09. Compliance with Environmental Laws..........................................55
SECTION 5.10. Preparation of Environmental Reports........................................56
SECTION 5.11. Further Assurances..........................................................56
SECTION 5.12. Fiscal Year.................................................................57
SECTION 5.13. Interest Rate Protection Agreements.........................................57
SECTION 5.14. Corporate Identity..........................................................57
ARTICLE VI
Negative Covenants
SECTION 6.01. Indebtedness................................................................57
SECTION 6.02. Liens.......................................................................58
SECTION 6.03. Sale and Lease-Back Transactions............................................59
SECTION 6.04. Investments, Loans and Advances.............................................59
SECTION 6.05. Mergers, Consolidations, Sales of Assets and Acquisitions...................60
SECTION 6.06. Dividends and Distributions; Restrictions on Ability of Subsidiaries
to Pay Dividends............................................................61
SECTION 6.07. Transactions with Affiliates................................................62
SECTION 6.08. Business of STFI, the Borrower and the Subsidiaries.........................62
SECTION 6.09. Other Indebtedness and Agreements...........................................62
SECTION 6.10. Capital Expenditures........................................................63
SECTION 6.11. Minimum EBITDA..............................................................64
SECTION 6.12. Fixed Charge Coverage Ratio.................................................64
SECTION 6.13. Leverage Ratio..............................................................64
SECTION 6.14 Interest Expense Coverage Ratio.............................................64
SECTION 6.15 Minimum Net Worth...........................................................64
ARTICLE VII
Events of Default
Events of Default...........................................................64
ARTICLE VIII
The Agents
The Agents..................................................................66
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices.....................................................................68
SECTION 9.02. Survival of Agreement.......................................................69
SECTION 9.03. Binding Effect..............................................................69
SECTION 9.04. Successors and Assigns......................................................69
SECTION 9.05. Expenses; Indemnity.........................................................72
SECTION 9.06. Right of Setoff.............................................................73
SECTION 9.07. Applicable Law..............................................................73
SECTION 9.08. Waivers; Amendment..........................................................73
SECTION 9.09. Interest Rate Limitation....................................................74
SECTION 9.10. Entire Agreement............................................................74
SECTION 9.11. Waiver of Jury Trial........................................................74
SECTION 9.12. Severability................................................................75
SECTION 9.13. Counterparts................................................................75
SECTION 9.14. Headings....................................................................75
SECTION 9.15. Jurisdiction; Consent to Service of Process.................................75
SECTION 9.16. Confidentiality ............................................................76
Exhibits and Schedules
Exhibit A Form of Administrative Questionnaire
Exhibit B Form of Assignment and Acceptance
Exhibit C Form of Borrowing Request
Exhibit D Form of Indemnity, Subrogation and Contribution Agreement
Exhibit E Form of Parent Guarantee Agreement
Exhibit F Form of Pledge Agreement
Exhibit G Form of Security Agreement
Exhibit H Form of Subsidiary Guarantee Agreement
Exhibit I-1 Form of Opinion of Gadsby & Hannah, counsel for STFI and the Borrower
Exhibit I-2 Form of Opinions of other counsel
Schedule 2.01 Lenders
Schedule 2.20 Fronting Banks
Schedule 3.08 Subsidiaries
Schedule 3.09 Litigation
Schedule 3.17 Environmental Matters
Schedule 3.18 Insurance
Schedule 3.20(b) Leased Premises
Schedule 4.02(a) Counsel
Schedule 4.02(q) Existing Indebtedness
Schedule 6.01(a) Indebtedness
Schedule 6.02 Liens
Schedule 6.04 Investments
Schedule 6.11 Minimum EBITDA
Schedule 6.13 Leverage Ratio
Schedule 6.14 Interest Expense Coverage Ratio
CONFORMED COPY
CREDIT AGREEMENT dated as of March 12, 1996,
among SHARED TECHNOLOGIES FAIRCHILD COMMUNICATIONS
CORP., a Delaware corporation (the "Borrower"),
SHARED TECHNOLOGIES INC., a Delaware corporation
("STFI", which term shall, after the Merger referred
to herein, include the surviving corporation in such
Merger), the financial institutions from time to time
party hereto, initially consisting of those financial
institutions listed on Schedule 2.01 (the "Lenders"),
CREDIT SUISSE, a bank organized under the laws of
Switzerland, acting through its New York branch, as
administrative agent (in such capacity, the
"Administrative Agent") and as collateral agent (in
such capacity, the "Collateral Agent") for the
Lenders, the fronting banks listed on Schedule 2.20
(the "Fronting Banks"), and each of CITICORP USA,
INC. and NATIONSBANK, N.A., as documentation agent
(individually and collectively in such capacity, the
"Documentation Agent").
The Borrower has requested the Lenders to extend credit in the
form of (a) Tranche A Term Loans (such term and each other capitalized term used
but not defined herein having the meaning assigned thereto in Article I) on the
Closing Date, in an aggregate principal amount not in excess of $50,000,000, (b)
Tranche B Term Loans on the Closing Date, in an aggregate principal amount not
in excess of $70,000,000, (c) Revolving Loans at any time and from time to time
prior to the Revolving Credit Maturity Date, in an aggregate principal amount at
any time outstanding not in excess of the difference between $25,000,000 and the
L/C Exposure at such time and (d) Letters of Credit at any time and from time to
time prior to the Revolving Credit Maturity Date, in an aggregate stated amount
at any time outstanding not in excess of $5,000,000. The proceeds of Term Loans
will be used, on the Closing Date, together with a portion of the proceeds of
the Discount Notes, to discharge in full the Specified Liabilities. Letters of
Credit and the proceeds of Revolving Loans will be used for general corporate
purposes.
The Lenders are willing to extend such credit to the Borrower
and the Fronting Banks are willing to issue Letters of Credit for the account of
the Borrower on the terms and subject to the conditions set forth herein.
Accordingly, the parties hereto agree as follows:
ARTICLE I. DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms shall have the meanings specified below:
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
"ABR Loan" shall mean any ABR Term Loan or ABR Revolving Loan.
"ABR Revolving Loan" shall mean any Revolving Loan bearing
interest at a rate determined by reference to the Alternate Base Rate in
accordance with the provisions of Article II.
"ABR Term Borrowing" shall mean a Borrowing comprised of ABR
Term Loans.
"ABR Term Loan" shall mean any Term Loan bearing interest at a
rate determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"Accreted Value" shall have the meaning assigned to such term
in Section 1.01 of the Discount Note Indenture.
"Acquired Business" shall mean the telecommunications business
of FII.
"Acquisition Documents" shall mean all documentation effecting
or entered into in connection with (a) the FII Reorganization, including the
transfer of assets and the assumption of liabilities not included in the
Acquired Business from FII to RHI or other persons, or (b) the Merger, the
Section 351 Exchange and the other Acquisition Transactions.
"Acquisition Transactions" shall mean the acquisition by STFI
of the Acquired Business in the series of transactions described in the Offering
Circular, pursuant to which (a) FII and its Affiliates will consummate the FII
Reorganization; (b) the Borrower will issue the Discount Notes and will receive
gross proceeds of not less than $100,000,000 therefrom; (c) STFI will adopt the
Amendments to Charter and Bylaws; (d) the Merger will be consummated; (e) STFI
will issue to RHI, the holder of all the issued and outstanding common stock of
FII, as consideration in respect of the cancellation of all such common stock in
the Merger (i) the Cumulative Convertible Preferred Stock, (ii) the Special
Preferred Stock and (iii) 6,000,000 shares of common stock of STFI and,
immediately upon the effectiveness of the Merger, the transactions set forth in
the Exchange Agreement shall be consummated; (f) RHI will cancel all preferred
stock of FII held by it and the holders of all the preferred stock of FII not
held by RHI will receive the Preferred Consideration in respect thereof in an
aggregate amount equal to approximately $39,600,000; (g) STFI and the Borrower
will consummate the Section 351 Exchange; (h) STFI will assume the Existing
Indebtedness and the FII Senior Notes in an aggregate principal amount of
$125,000,000, all of which will be prepaid upon the consummation of the Merger;
and (i) the Borrower will in consideration of the Section 351 Exchange pay an
amount to STFI sufficient to enable it to consummate the Acquisition
Transactions to be consummated by it.
"Adjusted LIBO Rate" shall mean, with respect to any
Eurodollar Borrowing for any Interest Period, an interest rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the product of
(a) the LIBO Rate in effect for such Interest Period and (b) Statutory Reserves.
"Administrative Agent Fees" shall have the meaning assigned to
such term in Section 2.05(b).
"Administrative Questionnaire" shall mean an Administrative
Questionnaire in the form of Exhibit A.
"Affiliate" shall mean, when used with respect to a specified
person, another person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by or is under common Control with the
person specified.
"Aggregate Revolving Credit Exposure" shall mean the aggregate
amount of the Lenders' Revolving Credit Exposures.
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"Alternate Base Rate" shall mean, for any day, a rate per
annum (rounded upwards, if necessary, to the next 1/100 of 1%) equal to the
greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. If for any reason the
Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Federal
Funds Effective Rate for any reason, including the inability of the
Administrative Agent to obtain sufficient quotations in accordance with the
terms of the definition thereof, the Alternate Base Rate shall be determined
without regard to clause (b) of the preceding sentence until the circumstances
giving rise to such inability no longer exist. Any change in the Alternate Base
Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall
be effective on the effective date of such change in the Prime Rate or the
Federal Funds Effective Rate, respectively.
"Amendments to Charter and Bylaws" shall mean the amendments
to charter and bylaws of STFI described in the Proxy Statement.
"ANSI" shall mean Access Network Services Inc., a wholly owned
Subsidiary of ATG.
"Applicable Percentage" of any Revolving Credit Lender at any
time shall mean the percentage of the Total Revolving Credit Commitment
represented by such Lender's Revolving Credit Commitment. In the event the
Revolving Credit Commitments shall have expired or been terminated, the
Applicable Percentages shall be determined on the basis of the Revolving Credit
Commitments most recently in effect, but giving effect to any subsequent
assignments pursuant to Section 9.04.
"Assignment and Acceptance" shall mean an assignment and
acceptance entered into by a Lender and an assignee, and accepted by the
Administrative Agent, in the form of Exhibit B or such other form as shall be
approved by the Administrative Agent.
"ATG" shall mean Access Telecommunication Group, L.P., a
wholly owned Subsidiary of the Borrower.
"Board" shall mean the Board of Governors of the Federal
Reserve System of the United States of America.
"Borrowing" shall mean a group of Loans of a single Type made
by the Lenders on a single date and as to which a single Interest Period is in
effect.
"Borrowing Request" shall mean a request by the Borrower in
accordance with the terms of Section 2.03 and substantially in the form of
Exhibit C.
"Business Day" shall mean any day other than a Saturday,
Sunday or day on which banks in New York City are authorized or required by law
to close; provided, however, that when used in connection with a Eurodollar
Loan, the term "Business Day" shall also exclude any day on which banks are not
open for dealings in dollar deposits in the London interbank market.
"Capital Expenditures" shall mean, for any person in respect
of any period, the sum of (a) the aggregate of all expenditures incurred by such
person during such period that, in accordance with GAAP, are or should be
included in "additions to property, plant or equipment" or similar items
3
reflected in the statement of cash flows of such person and (b) to the extent
not covered by clause (a) above, the aggregate of all expenditures by such
person to acquire by purchase or otherwise the business, property or fixed
assets of, or stock or other evidence of beneficial ownership of, any other
person; provided, however, that Capital Expenditures shall not include
expenditures of proceeds of insurance settlements in respect of lost, destroyed
or damaged assets, equipment or other property to the extent such expenditures
are made to replace or repair such lost, destroyed or damaged assets, equipment
or other property within 12 months of such destruction or damage.
"Capital Lease Obligations" of any person shall mean the
obligations of such person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Capital Stock" of any person shall mean any and all shares,
interests, rights to purchase, warrants, options, participation or other
equivalents of or interests in (however designated) equity of such person,
including any preferred stock, any limited or general partnership interest and
any limited liability company membership interest, but excluding any debt
securities convertible into such equity.
"Certificates of Designation" shall mean the respective
certificates of designation establishing the Cumulative Convertible Preferred
Stock and the Special Preferred Stock, in each case in substantially the form
delivered to the Lenders under cover of a letter dated March 9, 1996, with no
changes therefrom adverse to the Borrower or the Lenders, as amended from time
to time in accordance with Section 6.09.
A "Change in Control" shall be deemed to have occurred if
(a) STFI shall fail to own directly, beneficially and of
record, free and clear of any and all Liens (other than Liens in favor
of the Collateral Agent pursuant to the Pledge Agreement), 100% of the
issued and outstanding Capital Stock of the Borrower;
(b) RHI and the Management Investors (collectively, the
"Designated Persons") or any combination of Designated Persons shall
cease to own beneficially, directly or indirectly, in the aggregate
shares representing at least 30% of the aggregate ordinary voting power
represented by the issued and outstanding Capital Stock of STFI;
(c) any person or group (within the meaning of Rule 13d-5 of
the Securities Exchange Act of 1934 as in effect on the date hereof)
other than the Designated Persons shall own beneficially, directly or
indirectly, shares representing more than 25% of the aggregate ordinary
voting power represented by the issued and outstanding Capital Stock of
STFI;
(d) a majority of the seats (excluding vacant seats) on the
board of directors of STFI shall at any time after the Closing Date
have been occupied by persons who were neither (i) nominated by any one
or more Designated Persons or by a majority of the board of directors
of STFI nor (ii) appointed by directors so nominated;
4
(e) RHI shall fail to own at any time directly, beneficially
and of record, free and clear of any and all Liens, all the Special
Preferred Stock outstanding at such time;
(f) The Fairchild Corporation shall fail to own, directly or
indirectly, beneficially and of record, free and clear of any and all
Liens, at least 51% of the issued and outstanding Capital Stock of RHI
or shall otherwise fail to Control RHI;
(g) Jeffrey J. Steiner, The Fairchild Corporation, RHI and
their Affiliates collectively shall own beneficially, directly or
indirectly, shares representing more than 49% of the aggregate ordinary
voting power represented by the issued and outstanding Capital Stock of
STFI; or
(h) a change in control with respect to STFI or the Borrower
(or similar event, however denominated) shall occur under and as
defined in any Certificate of Designation or in any indenture or
agreement in respect of Indebtedness in an aggregate outstanding
principal amount in excess of $1,000,000 to which STFI, the Borrower or
any Subsidiary is party.
"Closing Date" shall mean a single date (which shall in no
event be later than April 15, 1996) on which the initial Credit Event occurs
hereunder.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to ---- time.
"Collateral" shall mean all the "Collateral" as defined in any
Security Document.
"Commitment Fee" shall have the meaning assigned to such term
in Section 2.05(a).
"Commitments" shall mean, with respect to any Lender, such
Lender's Revolving
Credit Commitment and Term Loan Commitment.
"Confidential Information Memorandum" shall mean the
Confidential Information Memorandum of the Borrower dated February, 1996.
"Consolidated Cash Interest Expense" shall mean, with respect
to STFI, the Borrower and the Subsidiaries on a consolidated basis for any
period, Consolidated Interest Expense for such period less the sum of (a)
pay-in-kind or accreted Consolidated Interest Expense not involving any payment
of cash, (b) to the extent included in Consolidated Interest Expense, the
amortization of fees paid by STFI, the Borrower or any Subsidiary on or prior to
the Closing Date in connection with the Acquisition Transactions or in
connection with the incurrence of any Indebtedness incurred after the Closing
Date and (c) the amortization of debt discounts, if any, or fees in respect of
Interest Rate Protection Agreements.
"Consolidated Current Assets" shall mean, with respect to
STFI, the Borrower and the Subsidiaries on a consolidated basis at any date of
determination, all assets (other than cash and Permitted Investments or other
cash equivalents) that would, in accordance with GAAP, be classified on a
consolidated balance sheet of STFI, the Borrower and the Subsidiaries as current
assets at such date of determination.
5
"Consolidated Current Liabilities" shall mean, with respect to
STFI, the Borrower and the Subsidiaries on a consolidated basis at any date of
determination, all liabilities that would, in accordance with GAAP, be
classified on a consolidated balance sheet of STFI, the Borrower and the
Subsidiaries as current liabilities at such date of determination, other than
(a) the current portion of long-term Indebtedness, (b) accruals of Consolidated
Interest Expense (excluding Consolidated Interest Expense that is due and
unpaid), (c) Revolving Loans classified as current and (d) accruals of
transaction costs resulting from the Acquisition Transactions.
"Consolidated Interest Expense" shall mean, with respect to
STFI, the Borrower and the Subsidiaries on a consolidated basis for any period,
interest and fees accrued, accreted or paid by STFI, the Borrower and the
Subsidiaries during such period in respect of the Indebtedness of STFI, the
Borrower and the Subsidiaries, determined on a consolidated basis in accordance
with GAAP.
"Consolidated Working Capital" shall mean, with respect to
STFI, the Borrower and the Subsidiaries on a consolidated basis at any date of
determination, Consolidated Current Assets at such date of determination minus
Consolidated Current Liabilities at such date of determination.
"Control" shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of a
person, whether through the ownership of voting securities, by contract or
otherwise, and "Controlling" and "Controlled" shall have meanings correlative
thereto.
"Credit Event" shall have the meaning assigned to such term in
Section 4.01.
"Cumulative Convertible Preferred Stock" shall mean the
cumulative convertible preferred stock of STFI with an initial liquidation
preference of $25,000,000 to be issued to RHI on the Closing Date pursuant to
the Exchange Agreement.
"Debt Service" shall mean, with respect to STFI, the Borrower
and the Subsidiaries on a consolidated basis for any period, the sum of (a)
Consolidated Cash Interest Expense of STFI, the Borrower and the Subsidiaries
for such period plus (b) scheduled principal amortization of Total Debt for such
period (whether or not such payments are made).
"Default" shall mean any event or condition which upon notice,
lapse of time or both would constitute an Event of Default.
"Discount Exchange Notes" shall mean senior subordinated
discount notes of the Borrower issued in exchange for Discount Notes on terms
substantially identical to the terms of the Discount Notes.
"Discount Note Guarantees" shall mean the senior subordinated
Guarantees of the Discount Notes by the Guarantors given on the Closing Date on
terms satisfactory to the Lenders and any subsequent senior subordinated
Guarantees by the Guarantors on terms no less favorable to the Guarantors and
the Lenders of the Indebtedness of the Borrower under the Discount Notes or the
Discount Exchange Notes.
"Discount Note Indenture" shall mean the indenture pursuant to
which the Discount Notes are issued, in substantially the form of the draft of
March 8, 1996, thereof, delivered to the
6
Lenders under cover of a letter dated March 9, 1996, with no changes therefrom
adverse to the Borrower or the Lenders, as amended from time to time in
accordance with Section 6.09.
"Discount Note Value" shall mean at any time the Accreted
Value at such time of the Discount Notes issued on the Closing Date (assuming
such Discount Notes remained outstanding at such time) minus the aggregate
amount at such time of the Accreted Value of Discount Notes and Discount
Exchange Notes repaid or prepaid on or prior to such time (calculated assuming
the applicable original Discount Notes remained outstanding until such time.)
"Discount Notes" shall mean the Senior Subordinated Discount
Notes of the Borrower issued pursuant to the Discount Note Indenture.
"dollars" or "$" shall mean lawful money of the United States
of America.
"EBITDA" shall mean, with respect to STFI, the Borrower and
the Subsidiaries on a consolidated basis for any period, the net income of STFI,
the Borrower and the Subsidiaries on a consolidated basis for such period plus,
to the extent deducted in computing such consolidated net income, without
duplication, the sum of (a) income tax expense, (b) interest expense, (c)
depreciation and amortization expense, (d) any extraordinary or non-recurring
losses and (e) other noncash items reducing consolidated net income, minus, to
the extent added in computing such consolidated net income, without duplication,
the sum of (i) interest income, (ii) any extraordinary or non-recurring gains
and (iii) other noncash items increasing consolidated net income, determined on
a consolidated basis in accordance with GAAP.
"ECF Percentage" shall mean 75%, except that if the Leverage
Ratio as of the December 31 immediately preceding any date on which a prepayment
is to be made pursuant to Section 2.13(c) shall be less than 4.00, the "ECF
Percentage" applicable to such prepayment shall be 50%.
"environment" shall mean ambient air, surface water and
groundwater (including potable water, navigable water and wetlands), the land
surface or subsurface strata, the workplace or as otherwise defined in any
Environmental Law.
"Environmental Claim" shall mean any written accusation,
allegation, notice of violation, claim, demand, order, directive, cost recovery
action or other cause of action by, or on behalf of, any Governmental Authority
or any person for damages, injunctive or equitable relief, personal injury
(including sickness, disease or death), Remedial Action costs, tangible or
intangible property damage, natural resource damages, nuisance, pollution, any
adverse effect on the environment caused by any Hazardous Material, or for
fines, penalties or restrictions, resulting from or based upon: (a) the
existence, or the continuation of the existence, of a Release (including sudden
or non-sudden, accidental or non-accidental Releases); (b) exposure to any
Hazardous Material; (c) the presence, use, handling, transportation, storage,
treatment or disposal of any Hazardous Material; or (d) the violation or alleged
violation of any Environmental Law or Environmental Permit.
"Environmental Law" shall mean any and all applicable present
and future treaties, laws, rules, regulations, codes, ordinances, orders,
decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to
7
the environment, preservation or reclamation of natural resources, the
management, Release or threatened Release of any Hazardous Material or to health
and safety matters.
"Environmental Permit" shall mean any permit, approval,
authorization, certificate, license, variance, filing or permission required by
or from any Governmental Authority pursuant to any Environmental Law.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or
not incorporated) that, together with the Borrower, is treated as a single
employer under Section 414(b) or (c) of the Code, or solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
"ERISA Event" shall mean (a) any "reportable event", as
defined in Section 4043 of ERISA or the regulations issued thereunder, with
respect to a Plan; (b) the adoption of any amendment to a Plan that would
require the provision of security pursuant to Section 401(a)(29) of the Code or
Section 307 of ERISA; (c) the existence with respect to any Plan of an
"accumulated funding deficiency" (as defined in Section 412 of the Code or
Section 302 of ERISA), whether or not waived; (d) the filing pursuant to Section
412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of
the minimum funding standard with respect to any Plan; (e) the incurrence of any
liability under Title IV of ERISA with respect to the termination of any Plan or
the withdrawal or partial withdrawal of the Borrower or any of its ERISA
Affiliates from any Plan or Multiemployer Plan; (f) the receipt by the Borrower
or any ERISA Affiliate from the PBGC or a plan administrator of any notice
relating to the intention to terminate any Plan or Plans or to appoint a trustee
to administer any Plan; (g) the receipt by the Borrower or any ERISA Affiliate
of any notice concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, insolvent or
in reorganization, within the meaning of Title IV of ERISA; (h) the occurrence
of a "prohibited transaction" with respect to which the Borrower or any of its
Subsidiaries is a "disqualified person" (within the meaning of Section 4975 of
the Code) or with respect to which the Borrower or any such Subsidiary could
otherwise be liable; and (i) any other event or condition with respect to a Plan
or Multiemployer Plan that could reasonably be expected to result in liability
of the Borrower.
"Eurodollar Borrowing" shall mean a Borrowing comprised of
Eurodollar Loans.
"Eurodollar Loan" shall mean any Eurodollar Revolving Loan or
Eurodollar Term Loan.
"Eurodollar Revolving Loan" shall mean any Revolving Loan
bearing interest at a rate determined by reference to the Adjusted LIBO Rate in
accordance with the provisions of Article II.
"Eurodollar Term Borrowing" shall mean a Borrowing comprised
of Eurodollar Term Loans.
"Eurodollar Term Loan" shall mean any Term Loan bearing
interest at a rate determined by reference to the Adjusted LIBO Rate in
accordance with the provisions of Article II.
8
"Event of Default" shall have the meaning assigned to such
term in Article VII.
"Excess Cash Flow" shall mean, with respect to STFI, the
Borrower and the Subsidiaries on a consolidated basis for any fiscal year,
EBITDA of STFI, the Borrower and the Subsidiaries on a consolidated basis for
such fiscal year, minus, without duplication, (a) Debt Service of STFI, the
Borrower and the Subsidiaries for such fiscal year, (b) Capital Expenditures by
STFI, the Borrower and the Subsidiaries on a consolidated basis during such
fiscal year that are paid in cash, (c) all taxes paid in cash by STFI, the
Borrower and the Subsidiaries on a consolidated basis during such fiscal year,
(d) an amount equal to any increase in Consolidated Working Capital of STFI, the
Borrower and the Subsidiaries during such fiscal year, (e) dividends paid by
STFI (i) on the Cumulative Convertible Preferred Stock during such fiscal year
in an aggregate amount not in excess of $1,500,000 and (ii) on the Series C
Preferred Stock of STFI and the Series D Preferred Stock of STFI during such
fiscal year in an aggregate amount not in excess of $400,000, (f) cash
expenditures made in respect of Interest Rate Protection Agreements during such
fiscal year, to the extent not reflected in the computation of EBITDA, (g)
amounts paid in cash during such fiscal year on account of items that were
accounted for as noncash reductions of consolidated net income of STFI, the
Borrower and the Subsidiaries in the current or a prior period, (h) any
extraordinary or non-recurring loss paid in cash during such fiscal year and (i)
to the extent added in determining EBITDA, all items that did not result from a
cash payment to STFI, the Borrower and the Subsidiaries on a consolidated basis
during such fiscal year plus, without duplication, (i) an amount equal to any
decrease in Consolidated Working Capital during such fiscal year, (ii) all
proceeds received during such fiscal year of Capital Lease Obligations, purchase
money Indebtedness and any other Indebtedness to the extent used to finance any
Capital Expenditure (other than Indebtedness under this Agreement to the extent
there is no corresponding deduction to Excess Cash Flow above in respect of the
use of such Borrowings for such fiscal year or any prior period), (iii) all
amounts referred to in clause (b) above to the extent funded with the proceeds
of the issuance of Capital Stock of STFI after the Closing Date or any amount
that would have constituted Net Proceeds under clause (a) of the definition of
"Net Proceeds" if not so spent, in each case to the extent there is a
corresponding deduction to Excess Cash Flow above for such fiscal year or any
prior period, (iv) cash payments received in respect of Interest Rate Protection
Agreements during such fiscal year to the extent not included in EBITDA, (v) any
extraordinary or non-recurring gain realized in cash during such fiscal year
(except to the extent such gain is subject to Section 2.13(b)), (vi) to the
extent subtracted in the computation of EBITDA, interest income, (vii) to the
extent subtracted in determining EBITDA, all items that did not result from a
cash payment by STFI, the Borrower and the Subsidiaries on a consolidated basis
during such fiscal year and (viii) any cash dividends or any other cash
distributions paid or made by, and received from, any Unrestricted Subsidiary or
any STFI Unrestricted Subsidiary.
"Exchange Agreement" shall mean the Agreement to Exchange 6%
Cumulative Convertible Preferred Stock and Special Preferred Stock dated as of
March 1, 1996, among FII, RHI, The Fairchild Corporation and STFI.
"Existing Indebtedness" shall mean the existing bank and other
Indebtedness of FII set forth on Schedule 4.02(q) in an aggregate principal
amount not in excess of $58,000,000.
"Federal Funds Effective 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 on the next succeeding Business Day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day that is a Business Day,
the average of the
9
quotations for the day for such transactions received by the Administrative
Agent from three Federal funds brokers of recognized standing selected by it.
"Fee Letter" shall mean the Fee Letter dated February 15,
1996, between STFI and the Administrative Agent.
"Fees" shall mean the Commitment Fees, the Administrative
Agent Fees, the L/C Participation Fees and the Fronting Bank Fees.
"Financial Officer" of any person shall mean the chief
financial officer, principal accounting officer, Treasurer or Controller of such
person.
"FII" shall mean Fairchild Industries, Inc., a Delaware
Corporation.
"FII Reorganization" shall mean the restructuring of FII
pursuant to which FII will divest all its non-telecommunications assets, as
contemplated by the Offering Circular.
"FII Senior Notes" shall mean the 12 1/4% Senior Secured Notes
due 1999 of FII.
"Fixed Charge Coverage Ratio" shall mean, as of the last day
of any fiscal quarter, the ratio of (a) EBITDA of STFI, the Borrower and the
Subsidiaries for the four-quarter period ended on such date, minus the sum for
such four-quarter period of (i) Capital Expenditures, (ii) taxes paid in cash
and (iii) dividends paid in cash in respect of the Cumulative Convertible
Preferred Stock, to (b) Debt Service for such four-quarter period, all
determined on a consolidated basis in accordance with GAAP; provided, however,
that the Fixed Charge Coverage Ratio as of June 30, 1996, September 30, 1996,
and December 30, 1996, shall be determined by multiplying the items referred to
in clauses (a) and (b) above for the period commencing April 1, 1996, and ending
as of such date by (A) 4, in the case of the quarter ending June 30, 1996, (B)
2, in the case of the two-quarter period ending September 30, 1996, and (C) 4/3,
in the case of the three-quarter period ending December 31, 1996.
"Fronting Bank Fees" shall have the meaning assigned to such
term in Section 2.05(c).
"GAAP" shall mean generally accepted accounting principles
applied on a consistent basis.
"Governmental Authority" shall mean any Federal, state, local
or foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Guarantee" of or by any person shall mean any obligation,
contingent or otherwise, of such person guaranteeing or having the economic
effect of guaranteeing any Indebtedness of any other person (the "primary
obligor") in any manner, whether directly or indirectly, and including any
obligation of such person, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or to
purchase (or to advance or supply funds for the purchase of) any security for
the payment of such Indebtedness, (b) to purchase or lease property, securities
or services for the purpose of assuring the owner of such Indebtedness of the
payment of such Indebtedness or (c) to maintain working capital, equity capital
or any other financial statement condition or liquidity of the primary obligor
so as to enable the primary obligor to pay such
10
Indebtedness; provided, however, that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business.
"Guarantee Agreements" shall mean the Parent Guarantee
Agreement and the Subsidiary Guarantee Agreement.
"Guarantors" shall mean STFI and the Subsidiary Guarantors.
"Hazardous Materials" shall mean all explosive or radioactive
substances or wastes, hazardous or toxic substances or wastes, pollutants,
solid, liquid or gaseous wastes, including petroleum or petroleum distillates,
asbestos or asbestos containing materials, polychlorinated biphenyls ("PCBs") or
PCB-containing materials or equipment, radon gas, urea formaldelyde, infectious
or medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.
"Indebtedness" of any person shall mean, without duplication,
(a) all obligations of such person for borrowed money or with respect to
deposits or advances of any kind, (b) all obligations of such person evidenced
by bonds, debentures, notes or similar instruments, (c) all obligations of such
person upon which interest charges are customarily paid, (d) all obligations of
such person under conditional sale or other title retention agreements relating
to property or assets purchased by such person, (e) all obligations of such
person issued or assumed as the deferred purchase price of property or services
(excluding trade accounts payable and accrued obligations incurred in the
ordinary course of business), (f) all Indebtedness of others secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
person, whether or not the obligations secured thereby have been assumed, (g)
all Guarantees by such person of Indebtedness of others, (h) all Capital Lease
Obligations of such person, (i) all obligations of such person in respect of
interest rate protection agreements, foreign currency exchange agreements or
other interest or exchange rate hedging arrangements and (j) all obligations of
such person as an account party in respect of letters of credit and bankers'
acceptances. The Indebtedness of any person shall include the Indebtedness of
any partnership in which such person is a general partner.
"Indemnity, Subrogation and Contribution Agreement" shall mean
the Indemnity, Subrogation and Contribution Agreement, substantially in the form
of Exhibit D, among STFI, the Borrower, the Subsidiary Guarantors and the
Collateral Agent.
"Installment Date" shall have the meaning assigned to such
term in Section 2.11.
"Interest Expense Coverage Ratio" shall mean, as of the last
day of any fiscal quarter, the ratio of (a) EBITDA of STFI, the Borrower and the
Subsidiaries for the four-quarter period ended on such date to (b) Consolidated
Cash Interest Expense for the four-quarter period ended on such date, all
determined on a consolidated basis in accordance with GAAP; provided, however,
that the Interest Expense Coverage Ratio as of June 30, 1996, September 30,
1996, and December 31, 1996, shall be determined by multiplying the items
referred to in clauses (a) and (b) above for the period commencing April 1,
1996, and ending as of such date by (i) 4, in the case of the period ending June
30, 1996, (ii) 2, in the case of the two-quarter period ending September 30,
1996, and (iii) 4/3, in the case of the three-quarter period ending December 31,
1996.
"Interest Payment Date" shall mean, with respect to any Loan,
the last day of the Interest Period applicable to the Borrowing of which such
Loan is a part and, in the case of a
11
Eurodollar Borrowing with an Interest Period of more than three months'
duration, each day that would have been an Interest Payment Date had successive
Interest Periods of three months' duration been applicable to such Borrowing,
and, in addition, the date of any prepayment of such Borrowing or refinancing or
conversion of such Borrowing with or to a Borrowing of a different Type.
"Interest Period" shall mean (a) as to any Eurodollar
Borrowing, the period commencing on the date of such Borrowing (or, in the case
of a Term Borrowing, the last day of the preceding Interest Period applicable
thereto) and ending on the numerically corresponding day (or, if there is no
numerically corresponding day, on the last day) in the calendar month that is 1,
2, 3 or 6 months thereafter, as the Borrower may elect and (b) as to any ABR
Borrowing, the period commencing on the date of such Borrowing (or, in the case
of a Term Borrowing, the last day of the preceding Interest Period applicable
thereto) and ending on the earliest of (i) the last Business Day of the next
succeeding March, June, September or December, (ii) the Revolving Credit
Maturity Date, the Tranche A Maturity Date or the Tranche B Maturity Date, as
applicable, and (iii) the date such Borrowing is converted to a Borrowing of a
different Type in accordance with Section 2.10 or repaid or prepaid in
accordance with Section 2.11, 2.12 or 2.13; provided, however, that if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless, in the case
of a Eurodollar Borrowing only, such next succeeding Business Day would fall in
the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day. Interest shall accrue from and including the first
day of an Interest Period to but excluding the last day of such Interest Period.
"Interest Rate Protection Agreement" shall mean any interest
rate cap agreement or other agreement or arrangement satisfactory to the
Administrative Agent entered into by the Borrower designed to protect the
Borrower against fluctuations in interest rates.
"L/C Commitment" shall mean, with respect to any Fronting
Bank, the commitment of such Fronting Bank to issue Letters of Credit pursuant
to Section 2.22.
"L/C Disbursement" shall mean a payment or disbursement made
by a Fronting Bank pursuant to a Letter of Credit.
"L/C Exposure" shall mean at any time the sum of (a) the
aggregate undrawn amount of all outstanding Letters of Credit at such time plus
(b) the aggregate principal amount of all L/C Disbursements that have not yet
been reimbursed at such time. The L/C Exposure of any Revolving Credit Lender at
any time shall mean its Applicable Percentage of the aggregate L/C Exposure at
such time.
"L/C Participation Fee" shall have the meaning assigned to
such term in Section 2.05(c).
"Letter of Credit" shall mean any letter of credit issued
pursuant to Section 2.22.
"Leverage Ratio" shall mean, as of the last day of any fiscal
quarter, the ratio of (a) Total Debt as of such date to (b) EBITDA of STFI, the
Borrower and the Subsidiaries for the four-quarter period ended on such date,
all determined on a consolidated basis in accordance with GAAP; provided
however, that the Leverage Ratio as of September 30, 1996, and December 31,
1996, shall be determined by multiplying EBITDA for the period commencing April
1, 1996, and ending as of such
12
date by (i) 2, in the case of the two-quarter period ending September 30, 1996,
and (ii) 4/3, in the case of the three-quarter period ending December 31, 1996.
"LIBO Rate" shall mean, with respect to any Eurodollar
Borrowing for any Interest Period, the rate (rounded upwards, if necessary, to
the next 1/16 of 1%) at which deposits in dollars for a maturity comparable to
such Interest Period are offered by the principal London office of the
Administrative Agent to first class banks in the London interbank market in
immediately available funds at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period.
"Lien" shall mean, with respect to any asset, (a) any
mortgage, deed of trust, lien, pledge, encumbrance, charge or security interest
in or on such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Loan Documents" shall mean this Agreement, the Letters of
Credit, the Guarantee Agreements, the Security Documents and the Indemnity,
Subrogation and Contribution Agreement.
"Loan Parties" shall mean the Borrower and the Guarantors.
"Loans" shall mean the Revolving Loans and the Term Loans.
"Management Investors" shall mean members of management of
STFI, the Borrower and the Subsidiaries holding directly voting stock of STFI,
or options to acquire such stock, on the Closing Date.
"Margin Stock" shall have the meaning assigned to such term in
Regulation U.
"Material Adverse Effect" shall mean (a) a materially adverse
effect on the business, assets, operations, prospects or condition, financial or
otherwise, of the Borrower and the Subsidiaries, taken as a whole, or of STFI
or, on or prior to the Closing Date, of the Acquired Business, (b) any material
impairment of the ability of the Borrower or any other Loan Party to perform any
of its obligations under any Loan Document to which it is or will be a party or
(c) any material impairment of the rights of or benefits available to the
Lenders under any Loan Document.
"Merger" shall mean the merger of FII with and into STFI,
following which STFI shall be the surviving corporation and shall change its
name to Shared Technologies Fairchild Inc.
"Merger Agreement" shall mean the Agreement and Plan of Merger
among FII, RHI, The Fairchild Corporation and STFI dated as of November 9, 1995,
as amended by the First Amendment thereto dated as of February 2, 1996, the
Second Amendment thereto dated as of February 23, 1996, and the Third Amendment
thereto dated as of March 1, 1996.
"Minimum Net Worth" shall mean, as of the last day of any
fiscal quarter, $75,000,000 plus (a) 75% of consolidated net income of STFI, the
Borrower and the Subsidiaries (to the extent such net income is positive) for
such fiscal quarter and 75% of such consolidated net income
13
for each other prior completed fiscal quarter included in the period commencing
April 1, 1996 (to the extent net income for such quarter is positive) plus (b)
the aggregate amount of proceeds received by STFI in respect of the issuance of
Capital Stock of STFI after the Closing Date minus (c) the aggregate amount of
payments in respect of the Cumulative Convertible Preferred Stock, the Series C
Preferred Stock of STFI and the Series D Preferred Stock of STFI and redemptions
of Special Preferred Stock made after the Closing Date in accordance with
Section 6.06(a)(ii)(A), (C) and (D), provided that in making the foregoing
calculation for any quarter in respect of which the Leverage Ratio as of the
last day of such quarter shall be less than 4.00, the percentage used in clause
(a) shall be 50% rather than 75%.
"Multiemployer Plan" shall mean a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Proceeds" shall mean (a) 100% of the cash proceeds
actually received by STFI, the Borrower or any Subsidiary (including cash
proceeds subsequently received in respect of noncash consideration initially
received and including all insurance settlements and condemnation awards in any
fiscal year of the Borrower but only as and when received), net of selling
expenses (including reasonable broker's fees or commissions, transfer and
similar taxes and the Borrower's good faith estimate of income taxes incurred in
connection with the receipt of such cash proceeds) from any loss, damage,
destruction or condemnation of, or any sale, transfer or other disposition
(other than the sale of inventory in the ordinary course) to any person in any
transaction or related series of transactions of any asset or assets of STFI,
the Borrower or any Subsidiary, provided that, with respect to proceeds that
would otherwise constitute Net Proceeds in an aggregate amount for any fiscal
year not in excess of $250,000, such proceeds shall not constitute Net Proceeds,
and provided further that proceeds from any sale, transfer or other disposition
of any equity interest in STC that would otherwise constitute Net Proceeds shall
not constitute Net Proceeds (i) to the extent such proceeds are in excess of
$2,000,000 or (ii) in the case of the first $2,000,000 of such proceeds, to the
extent such proceeds are applied to reduce outstanding Revolving Loans, (b) 100%
of the cash proceeds from the incurrence, issuance or sale by STFI, the Borrower
or any Subsidiary of any Indebtedness of STFI, the Borrower or any Subsidiary
(other than Indebtedness permitted under Section 6.01), net of all taxes and
customary fees, commissions, costs and other expenses incurred in connection
with such issuance or sale or (c) 100% (or, if the Leverage Ratio as of the last
day of the fiscal quarter most recently preceding the applicable date of
determination shall be less than 4.00, 50%) of the cash proceeds from the
issuance or sale by STFI, the Borrower or any Subsidiary (other than the
issuance or sale to STFI, the Borrower or any Subsidiary) of any equity security
of STFI, the Borrower or any Subsidiary (other than sales of Capital Stock of
STFI to directors, officers or employees of the Subsidiaries, the Unrestricted
Subsidiaries or the STFI Unrestricted Subsidiaries in connection with permitted
employee compensation and incentive arrangements), net of all taxes and
customary fees, commissions, costs and other expenses incurred in connection
with such issuance or sale.
"Net Worth" shall mean, as of any date, with respect to STFI,
the Borrower and the Subsidiaries, stockholders' equity of STFI, the Borrower
and the Subsidiaries as of such date plus the aggregate amount of the
liquidation preference of the Cumulative Convertible Preferred Stock and the
Special Preferred Stock issued on the Closing Date minus the aggregate amount as
of such date of the liquidation preference of all Cumulative Convertible
Preferred Stock and Special Preferred Stock redeemed, cancelled or otherwise
discharged after the Closing Date, all determined on a consolidated basis in
accordance with GAAP.
14
"Obligations" shall mean all obligations defined as
"Obligations" in the Guarantee Agreements and the Security Documents.
"Offering Circular" shall mean the Confidential Offering
Circular dated February 17, 1996, in respect of the Discount Notes, as amended
through March [ ], 1996, with no changes therefrom adverse to the Borrower or
the Lenders.
"Parent Guarantee Agreement" shall mean the Parent Guarantee
Agreement, substantially in the form of Exhibit E, made by STFI in favor of the
Collateral Agent for the benefit of the Secured Parties.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
referred to and defined in ERISA.
"Perfection Certificate" shall mean the Perfection Certificate
substantially in the form of Annex 2 to the Security Agreement.
"Permitted Business Acquisition" shall mean any acquisition of
all or substantially all the assets of, or all the shares or other equity
interests in, a person or division or line of business of a person (or any
subsequent investment made in a previously acquired Permitted Business
Acquisition) if immediately after giving effect thereto: (a) no Default or Event
of Default shall have occurred and be continuing or would result therefrom, (b)
all transactions related thereto shall be consummated in accordance with
applicable laws, (c) all the Capital Stock of any acquired or newly formed
person shall be owned directly by the Borrower or a wholly owned Subsidiary (or,
in the case of a Permitted Business Acquisition funded as contemplated by
Section 6.04(j), STFI) and all actions required to be taken, if any, with
respect to such acquired or newly formed person under Section 5.11 shall have
been taken, (d) any acquired assets shall be located in the United States and
any acquired or newly formed person shall be incorporated or organized under the
laws of the United States, any State thereof or the District of Columbia and
substantially all the activities of such person shall be conducted in the United
States, (e) any acquired assets shall be used in, and any acquired or newly
formed person shall be engaged in the business currently conducted by STFI and
its subsidiaries or by the Acquired Business and business activities reasonably
incidental thereto and (f)(i) the Borrower shall be in compliance, on a pro
forma basis after giving effect to such acquisition or formation, with the
covenants contained in Sections 6.11, 6.12, 6.13, 6.14 and 6.15 (A) recomputed
as at the last day of the most recently ended fiscal quarter of the Borrower as
if such acquisition had occurred on the first day of each relevant period for
testing such compliance and (B) computed for each relevant period during the
remaining term of this Agreement (based, in the case of such projected periods,
upon reasonable assumptions as to costs to be incurred and revenues to be
realized from such acquisition or formation), and the Borrower shall have
delivered to the Administrative Agent a certificate of a Responsible Officer to
such effect, together with all relevant financial information for such
subsidiary or assets and calculations demonstrating such compliance, and (ii)
any acquired or newly formed subsidiary shall not be liable for any Indebtedness
(except for Indebtedness permitted by Section 6.01).
15
"Permitted Investments" shall mean:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America),
in each case maturing within 90 days from the date of acquisition
thereof;
(b) investments in commercial paper maturing within 90 days
from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from Standard &
Poor's Ratings Group or from Moody's Investors Service, Inc.;
(c) investments in certificates of deposit, banker's
acceptances and time deposits maturing within 90 days from the date of
acquisition thereof issued or guaranteed by or placed with, and money
market deposit accounts issued or offered by, any Lender or by any
domestic office of any commercial bank organized under the laws of the
United States of America or any State thereof, in each case which has a
combined capital and surplus and undivided profits of not less than
$500,000,000 and whose short-term debt has, at such date of
acquisition, a rating of A or better from Standard & Poor's Ratings
Group or a rating of A or better from Moody's Investors Service, Inc.
(or, if either shall change the basis on which it establishes ratings,
the equivalent rating after such change); and
(d) other investment instruments approved in writing by the
Required Lenders and offered by financial institutions which have a
combined capital and surplus and undivided profits of not less than
$250,000,000.
"person" shall mean any natural person, corporation, business
trust, joint venture, association, company, partnership or government, or any
agency or political subdivision thereof.
"Plan" shall mean any employee pension benefit plan (other
than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or
Section 412 of the Code or Section 307 of ERISA, and in respect of which the
Borrower or any ERISA Affiliate is (or, if such plan were terminated, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in Section
3(5) of ERISA.
"Pledge Agreement" shall mean the Pledge Agreement,
substantially in the form of Exhibit F, among STFI, the Borrower, each
Subsidiary having any subsidiary and the Collateral Agent for the benefit of the
Secured Parties.
"Preferred Consideration" shall mean cash consideration in an
aggregate amount of approximately $39,600,000 to be paid by STFI to the holders
of preferred stock of FII other than RHI, which represents the liquidation value
of the respective series of such preferred stock plus dividends accrued to the
effective time of the Merger.
"Prime Rate" shall mean the rate of interest per annum
publicly announced from time to time by the Administrative Agent as its prime
rate in effect at its branch office in New York City; each change in the Prime
Rate shall be effective on the date such change is publicly announced as being
effective.
16
"Proxy Statement" shall mean the proxy statement of STFI dated
February 12, 1996, as amended through March 2, 1996, with no changes therefrom
adverse to the Borrower or the Lenders.
"Register" shall have the meaning given such term in Section
9.04(d).
"Regulation G" shall mean Regulation G of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
"Regulation U" shall mean Regulation U of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
"Regulation X" shall mean Regulation X of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
"Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping,
disposing, depositing, dispersing, emanating or migrating of any Hazardous
Material in, into, onto or through the environment.
"Remedial Action" means any and all actions required by any
Governmental Authority or voluntarily undertaken to: (i) investigate, study,
cleanup, remove, treat, abate or in any other way address any Hazardous Material
in the environment; or (ii) prevent the Release or threat of Release, or
minimize the further Release of any Hazardous Material in the environment.
"Required Lenders" shall mean, at any time, Lenders having
Loans, L/C Exposures and, without duplication, unused Commitments representing
at least 50.01% of the sum of all Loans outstanding, L/C Exposures and, without
duplication, unused Commitments at such time.
"Responsible Officer" of any person shall mean any executive
officer or Financial Officer of such person and any other officer or similar
official thereof responsible for the administration of the obligations of such
person in respect of this Agreement.
"Revolving Credit Borrowing" shall mean a Borrowing comprised
of Revolving Loans.
"Revolving Credit Commitment" shall mean, with respect to each
Lender, the commitment of such Lender to make Revolving Loans hereunder as set
forth on Schedule 2.01 or in the Assignment and Acceptance pursuant to which
such Lender assumed its Revolving Credit Commitment, as applicable, as the same
may be (a) reduced from time to time pursuant to Section 2.09 and (b) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 9.04.
"Revolving Credit Exposure" shall mean, with respect to any
Lender at any time, the aggregate principal amount at such time of all
outstanding Revolving Loans of such Lender, plus the amount at such time of such
Lender's L/C Exposure.
"Revolving Credit Lender" shall mean a Lender with a Revolving
Credit Commitment.
17
"Revolving Credit Maturity Date" shall mean March 30, 2001.
"Revolving Loans" shall mean the revolving loans made by the
Lenders to the Borrower pursuant to clause (c) of Section 2.01. Each Revolving
Loan shall be a Eurodollar Revolving Loan or an ABR Revolving Loan.
"RHI" shall mean RHI Holdings, Inc., a Delaware Corporation.
"Section 351 Exchange" shall mean the transfer of
substantially all the assets of STFI, including the Acquired Business, to the
Borrower in exchange for all the Capital Stock of the Borrower.
"Secured Parties" shall have the meaning assigned to such term
in the Security Agreement.
"Security Agreement" shall mean the Security Agreement,
substantially in the form of Exhibit G, among STFI, the Borrower, the
Subsidiaries and the Collateral Agent for the benefit of the Secured Parties,
provided that ATG, ANSI and their subsidiaries shall not be party thereto except
as set forth in Section 5.11.
"Security Documents" shall mean the Security Agreement, the
Pledge Agreement and each of the security agreements, mortgages and other
instruments and documents executed and delivered pursuant to any of the
foregoing or pursuant to Section 5.11.
"Special Preferred Stock" shall mean the special preferred
stock of STFI with an initial liquidation preference of $20,000,000 to be issued
to RHI on the Closing Date pursuant to the Exchange Agreement.
"Specified Liabilities" shall mean the Existing Indebtedness
and the FII Senior Notes.
"Statutory Reserves" shall mean a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the highest maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board and any other banking authority, domestic
or foreign, to which the Administrative Agent or any Lender (including any
branch, Affiliate, or other fronting office making or holding a Loan) is subject
with respect to Eurocurrency Liabilities (as defined in Regulation D of the
Board). Such reserve percentages shall include those imposed pursuant to such
Regulation D. Eurodollar Loans shall be deemed to constitute Eurocurrency
Liabilities and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to any Lender under such Regulation D. Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"STC" shall mean Shared Technologies Cellular, Inc., a
Delaware corporation.
"STFI" shall mean Shared Technologies Inc., a Delaware
corporation, the name of which will be changed to Shared Technologies Fairchild
Inc. after the consummation of the Merger.
18
"STFI Unrestricted Subsidiary" shall mean any subsidiary of
STFI (other than STC) or any other direct or indirect investment by STFI in the
Capital Stock of any other person (other than STFI) so long as at the time such
subsidiary is acquired or created or such investment is made (a) no Default or
Event of Default shall have occurred and be continuing or would result
therefrom, (b) the Borrower shall have notified the Administrative Agent of the
acquisition or creation of such subsidiary or such other investment and STFI's
ownership interest therein and its designation thereof as an STFI unrestricted
subsidiary concurrently with such acquisition, creation or investment and the
intended purposes of such subsidiary or investment, (c) all transactions related
thereto shall be consummated in accordance with applicable laws, (d) the
Borrower shall be in compliance, on a pro forma basis after giving effect to
such acquisition, creation or investment, with covenants contained in Sections
6.11, 6.12, 6.13, 6.14 and 6.15 (i) recomputed as at the last day of the most
recently ended fiscal quarter of the Borrower as if such acquisition had
occurred on the first day of each relevant period for testing such compliance
and (ii) computed for each relevant period during the remaining term of this
Agreement (based, in the case of such projected periods, upon reasonable
assumptions as to costs to be incurred and revenues to be realized from such
investment or subsidiary), and the Borrower shall have delivered to the
Administrative Agent a certificate of a Responsible Officer to such effect,
together with all relevant financial information for such subsidiary or
investment and calculations demonstrating such compliance, (e) none of STFI, the
Borrower or any of their subsidiaries shall have any contingent liability in
respect thereof (other than any contingent tax liabilities in respect of which
there shall exist a tax sharing agreement with the other owners of such STFI
Unrestricted Subsidiary providing for an allocation of tax liabilities and
benefits customary in similar circumstances), (f) any management or service
provided by STFI, the Borrower or any Subsidiary to such investment or
subsidiary shall be provided in consideration of cash remuneration in an amount
not less than could have been obtained from a third party on an arm's length
basis and (g) such investment or subsidiary shall be capitalized solely from the
following sources: (i) investments by persons other than STFI, the Borrower or
any Subsidiary, (ii) the proceeds of Indebtedness of persons other than STFI,
the Borrower, the Subsidiaries, any Unrestricted Subsidiary or any STFI
Unrestricted Subsidiary or (iii) in the case of any acquisition, creation or
investment in any fiscal year, (A) the portion of the proceeds received in such
fiscal year from any issuance or sale of any equity securities of STFI (other
than sales of Capital Stock of STFI to directors, officers or employees of the
Subsidiaries, the Unrestricted Subsidiaries or the STFI Subsidiaries in
connection with permitted employee compensation and incentive arrangements) that
does not constitute Net Proceeds, (B) the portion of Excess Cash Flow for the
immediately preceding fiscal year not subject to prepayment under Section
2.13(c) and (C) any proceeds received in such year in respect of any sale,
transfer or other disposition of any equity interest in STC that would
constitute Net Proceeds but for clause (i) of the further proviso contained in
clause (c) of the definition of "Net Proceeds" (in each case to the extent not
previously used to prepay Indebtedness (other than Revolving Loans), pay any
amount in respect of any Capital Stock of STFI, make any investment or Capital
Expenditure or otherwise for any purpose resulting in a deduction to Excess Cash
Flow in any fiscal year).
"subsidiary" shall mean, with respect to any person (herein
referred to as the "parent"), any corporation, company, partnership, association
or other business entity (a) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting
power or more than 50% of the general partnership interests are, at the time any
determination is being made, owned, Controlled or held, or (b) that is, at the
time any determination is made, otherwise Controlled, by the parent or one or
more subsidiaries of the parent or by the parent and one or more subsidiaries of
the parent.
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"Subsidiary" shall mean each subsidiary of STFI, the Borrower
or any of their subsidiaries other than the Unrestricted Subsidiaries and the
STFI Unrestricted Subsidiaries, provided that each reference to Subsidiary
contained in Article III shall include the STFI Unrestricted Subsidiaries.
"Subsidiary Guarantee Agreement" shall mean the Subsidiary
Guarantee Agreement, substantially in the form of Exhibit H, made by the
Subsidiary Guarantors in favor of the Collateral Agent for the benefit of the
Secured Parties, provided that ATG, ANSI and their subsidiaries shall not be
party thereto except as set forth in Section 5.11.
"Subsidiary Guarantor" shall mean each Subsidiary that is or
becomes a party to a Subsidiary Guarantee Agreement.
"Tender Offer" shall mean the tender offer and consent
solicitation conducted by FII for the FII Senior Notes, as contemplated by the
Offering Circular.
"Term Borrowing" shall mean a Borrowing comprised of Tranche A
Term Loans or Tranche B Term Loans.
"Term Loan Commitments" shall mean the Tranche A Commitments
and the Tranche B Commitments.
"Term Loans" shall mean the Tranche A Term Loans and the
Tranche B Term Loans.
"Total Debt" shall mean, with respect to STFI, the Borrower
and the Subsidiaries on a consolidated basis at any time, all Indebtedness
(other than Indebtedness described in clause (i) of the definition of
"Indebtedness") of STFI, the Borrower and the Subsidiaries at such time,
determined on a consolidated basis in accordance with GAAP.
"Total Revolving Credit Commitment" shall mean, at any time,
the aggregate amount of the Revolving Credit Commitments, as in effect at such
time.
"Tranche A Commitment" shall mean, with respect to each
Lender, the commitment of such Lender to make Tranche A Term Loans hereunder as
set forth on Schedule 2.01 or in the Assignment and Acceptance pursuant to which
such Lender assumed its Tranche A Commitment, as applicable, as the same may be
(a) reduced from time to time pursuant to Section 2.09 and (b) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 9.04.
"Tranche A Maturity Date" shall mean March 30, 2001.
"Tranche A Term Loans" shall mean the term loans made by the
Lenders to the Borrower pursuant to clause (a) of Section 2.01. Each Tranche A
Term Loan shall be either a Eurodollar Term Loan or an ABR Term Loan.
"Tranche B Commitment" shall mean, with respect to each
Lender, the commitment of such Lender to make Tranche B Term Loans hereunder as
set forth on Schedule 2.01 or in the Assignment and Acceptance pursuant to which
such Lender assumed its Tranche B Commitment, as
20
applicable, as the same may be (a) reduced from time to time pursuant to Section
2.09 and (b) reduced or increased from time to time pursuant to assignments by
or to such Lender pursuant to Section 9.04.
"Tranche B Maturity Date" shall mean March 31, 2003.
"Tranche B Term Loans" shall mean the term loans made by the
Lenders to the Borrower pursuant to clause (b) of Section 2.01. Each Tranche B
Term Loan shall be either a Eurodollar Term Loan or an ABR Term Loan.
"Transactions" shall have the meaning assigned to such term in
Section 3.02.
"Type", when used in respect of any Loan or Borrowing, shall
refer to the Rate by reference to which interest on such Loan or on the Loans
comprising such Borrowing is determined. For purposes hereof, the term "Rate"
shall include the Adjusted LIBO Rate and the Alternate Base Rate.
"Unrestricted Subsidiary" shall mean (a) STC and (b) any
subsidiary of the Borrower or any Subsidiary or any other direct or indirect
investment by the Borrower or any Subsidiary in the Capital Stock of any other
person (other than STFI) so long as at the time such subsidiary is acquired or
created or such investment is made (i) no Default or Event of Default shall have
occurred and be continuing or would result therefrom, (ii) the Borrower shall
have notified the Administrative Agent of its acquisition or creation of such
subsidiary or such other investment and its ownership interest therein and its
designation thereof as an unrestricted subsidiary concurrently with such
acquisition, creation or investment and the intended purposes of such subsidiary
or investment, (iii) all transactions related thereto shall be consummated in
accordance with applicable laws, (iv) the Borrower shall be in compliance, on a
pro forma basis after giving effect to such acquisition, creation or investment,
with covenants contained in Sections 6.11, 6.12, 6.13, 6.14 and 6.15 (A)
recomputed as at the last day of the most recently ended fiscal quarter of the
Borrower as if such acquisition had occurred on the first day of each relevant
period for testing such compliance and (B) computed for each relevant period
during the remaining term of this Agreement (based, in the case of such
projected periods, upon reasonable assumptions as to costs to be incurred and
revenues to be realized from such investment or subsidiary), and the Borrower
shall have delivered to the Administrative Agent a certificate of a Responsible
Officer to such effect, together with all relevant financial information for
such subsidiary or investment and calculations demonstrating such compliance,
(v) none of STFI, the Borrower or any of their subsidiaries shall have any
contingent liability in respect thereof (other than any contingent tax
liabilities in respect of which there shall exist a tax sharing agreement with
the other owners of such Unrestricted Subsidiary providing for an allocation of
tax liabilities and benefits customary in similar circumstances), (vi) any
management or service provided by STFI, the Borrower or any Subsidiary to such
investment or subsidiary shall be provided in consideration of cash remuneration
in an amount not less than could have been obtained from a third party on an
arm's length basis and (vii) such investment or subsidiary shall be capitalized
solely from the following sources: (A) investments by persons other than STFI,
the Borrower or any Subsidiary or (B) the proceeds of Indebtedness of persons
other than STFI, the Borrower, the Subsidiaries, any Unrestricted Subsidiary or
any STFI Unrestricted Subsidiary.
"wholly owned Subsidiary" shall mean a Subsidiary 100% of the
Capital Stock of which (except for directors' qualifying shares) is, at the time
any determination is being made, owned,
21
controlled or held by the Borrower or one or more wholly owned Subsidiaries of
or by the Borrower and one or more wholly owned Subsidiaries.
"Withdrawal Liability" shall mean liability to a Multiemployer
Plan as a result of a complete or partial withdrawal from such Multiemployer
Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Terms Generally. The definitions in Section 1.01
shall apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
All references herein to Articles, Sections, Exhibits and Schedules shall be
deemed references to Articles and Sections of, and Exhibits and Schedules to,
this Agreement unless the context shall otherwise require. Except as otherwise
expressly provided herein, (a) any reference in this Agreement to any Loan
Document shall mean such document as amended, restated, supplemented or
otherwise modified from time to time and (b) all terms of an accounting or
financial nature shall be construed in accordance with GAAP, as in effect from
time to time; provided, however, that if within 30 days after delivery of the
first financial statements delivered pursuant to Section 5.04 after the
effectiveness of any change in GAAP occurring after the date of this Agreement
the Borrower notifies the Administrative Agent that the Borrower wishes to amend
any covenant in Article VI or any related definition to eliminate the effect of
such change on the operation of such covenant (or if the Administrative Agent
notifies the Borrower that the Required Lenders wish to amend Article VI or any
related definition for such purpose), then (i) the Borrower and the
Administrative Agent shall negotiate in good faith to agree upon an appropriate
amendment to such covenant and (ii) until such covenant is amended in a manner
satisfactory to the Borrower and the Required Lenders, the Borrower's compliance
with such covenant shall be determined on the basis of GAAP in effect
immediately before the relevant change in GAAP became effective.
ARTICLE II. THE CREDITS
SECTION 2.01. Commitments. On the terms and subject to the
conditions and relying upon the representations and warranties herein set forth,
each Lender agrees, severally and not jointly, (a) to make a Tranche A Term Loan
to the Borrower on the Closing Date in a principal amount not to exceed its
Tranche A Commitment, (b) to make a Tranche B Term Loan to the Borrower on the
Closing Date in a principal amount not to exceed its Tranche B Commitment, and
(c) to make Revolving Loans to the Borrower, at any time and from time to time
on or after the date hereof, and until the earlier of the Revolving Credit
Maturity Date and the termination of the Revolving Credit Commitment of such
Lender in accordance with the terms hereof, in an aggregate principal amount at
any time outstanding that will not result in such Lender's Revolving Credit
Exposure exceeding such Lender's Revolving Credit Commitment. Within the limits
set forth in clause (c) of the preceding sentence and subject to the terms,
conditions and limitations set forth herein, the Borrower may borrow, pay or
prepay and reborrow Revolving Loans. Amounts paid or prepaid in respect of Term
Loans may not be reborrowed.
SECTION 2.02. Loans. (a) Each Loan shall be made as part of a
Borrowing consisting of Loans made by the Lenders ratably in accordance with
their applicable Commitments; provided, however, that the failure of any Lender
to make any Loan shall not in itself relieve any other
22
Lender of its obligation to lend hereunder (it being understood, however, that
no Lender shall be responsible for the failure of any other Lender to make any
Loan required to be made by such other Lender). The Term Loans must be drawn in
a single drawing in their entire amount on the Closing Date. Except for Loans
deemed made pursuant to Section 2.02(g), the Revolving Loans comprising any
Borrowing shall be in an aggregate principal amount that is (i) an integral
multiple of $1,000,000 and not less than $5,000,000 or (ii) equal to the
remaining available balance of the Total Revolving Credit Commitment.
(b) Subject to Sections 2.08 and 2.15, each Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request
pursuant to Section 2.03. Each Lender may at its option make any Eurodollar Loan
by causing any domestic or foreign branch or Affiliate of such Lender to make
such Loan; provided that any exercise of such option shall not affect the
obligation of the Borrower to repay such Loan in accordance with the terms of
this Agreement. Borrowings of more than one Type may be outstanding at the same
time; provided, however, that the Borrower shall not be entitled to request any
Borrowing that, if made, would result in more than six Eurodollar Borrowings
outstanding hereunder at any time. For purposes of the foregoing, Borrowings
having different Interest Periods, regardless of whether they commence on the
same date, shall be considered separate Borrowings.
(c) Each Lender shall make each Loan to be made by it
hereunder on the proposed date thereof by wire transfer of immediately available
funds to such account in New York City as the Administrative Agent may designate
not later than 11:00 a.m., New York City time, and the Administrative Agent
shall promptly upon receipt credit the amounts so received as designated by the
Borrower in the applicable Borrowing Request or, if a Borrowing shall not occur
on such date because any condition precedent herein specified shall not have
been met, return the amounts so received to the respective Lenders.
(d) Unless the Administrative Agent shall have received notice
from a Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's portion of such Borrowing,
the Administrative Agent may assume that such Lender has made such portion
available to the Administrative Agent on the date of such Borrowing in
accordance with paragraph (c) above and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If the Administrative Agent shall have so made funds
available then, to the extent that such Lender shall not have made such portion
available to the Administrative Agent, such Lender and the Borrower severally
agree to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Administrative Agent at (i) in the case of the Borrower, the
interest rate applicable at the time to the Loans comprising such Borrowing and
(ii) in the case of such Lender, for the first day, the Federal Funds Effective
Rate and, for each day thereafter, the Alternate Base Rate. If such Lender shall
repay to the Administrative Agent such corresponding amount, such amount shall
constitute such Lender's Loan as part of such Borrowing for purposes of this
Agreement.
(e) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request any Revolving Credit Borrowing if the
Interest Period requested with respect thereto would end after the Revolving
Credit Maturity Date.
23
(f) The Borrower may refinance all or any part of a Revolving
Credit Borrowing with another Revolving Credit Borrowing, subject to the
conditions and limitations set forth in this Agreement. Any Revolving Credit
Borrowing or part thereof so refinanced shall be deemed to be repaid or prepaid
in accordance with the applicable provisions of this Agreement with the proceeds
of the new Revolving Credit Borrowing, and the proceeds of such new Revolving
Credit Borrowing, to the extent they do not exceed the principal amount of the
Revolving Credit Borrowing being refinanced, shall not be paid by the Lenders to
the Administrative Agent or by the Administrative Agent to the Borrower pursuant
to paragraph (c) above.
(g) If a Fronting Bank shall not have received from the
Borrower a payment required to be made by Section 2.22(e) within the time
specified in such Section, such Fronting Bank will promptly notify the
Administrative Agent of the L/C Disbursement and the Administrative Agent will
promptly notify each Revolving Credit Lender of such L/C Disbursement and its
Applicable Percentage thereof. Each Revolving Credit Lender shall pay by wire
transfer of immediately available funds to the Administrative Agent not later
than 2:00 p.m., New York City time, on such date (or, if such Revolving Credit
Lender shall have received such notice later than 12:00 noon, New York City
time, on any day, not later than 10:00 a.m., New York City time, on the
immediately following Business Day), an amount equal to such Lender's Applicable
Percentage of such L/C Disbursement (it being understood that such amount shall
be deemed to constitute an ABR Revolving Loan of such Lender and such payment
shall be deemed to have reduced the L/C Exposure), and the Administrative Agent
will promptly pay to the applicable Fronting Bank amounts so received by it from
the Revolving Credit Lenders. The Administrative Agent will promptly pay to the
applicable Fronting Bank any amounts received by it from the Borrower pursuant
to Section 2.22(e) prior to the time that any Revolving Credit Lender makes any
payment pursuant to this paragraph (g); any such amounts received by the
Administrative Agent thereafter will be promptly remitted by the Administrative
Agent to the Revolving Credit Lenders that shall have made such payments and to
the applicable Fronting Bank, as their interests may appear. If any Revolving
Credit Lender shall not have made its Applicable Percentage of such L/C
Disbursement available to the Administrative Agent as provided above, such
Lender and the Borrower severally agree to pay interest on such amount, for each
day from and including the date such amount is required to be paid in accordance
with this paragraph to but excluding the date such amount is paid, to the
Administrative Agent at (i) in the case of the Borrower, a rate per annum equal
to the interest rate applicable to ABR Revolving Loans pursuant to Section 2.06,
and (ii) in the case of such Lender, for the first such day, the Federal Funds
Effective Rate, and for each day thereafter, the Alternate Base Rate.
SECTION 2.03. Borrowing Procedure. In order to request a
Borrowing (other than a deemed Borrowing pursuant to Section 2.02(g), as to
which this Section 2.03 shall not apply), the Borrower shall hand deliver or
telecopy to the Administrative Agent a duly completed Borrowing Request (a) in
the case of a Eurodollar Borrowing, not later than 12:00 noon, New York City
time, three Business Days before a proposed Borrowing, and (b) in the case of an
ABR Borrowing, not later than 12:00 noon, New York City time, one Business Day
before a proposed Borrowing. Each Borrowing Request shall be irrevocable, shall
be signed by or on behalf of the Borrower and shall specify the following
information: (i) whether the Borrowing then being requested is to be a Borrowing
of Tranche A Term Loans, a Borrowing of Tranche B Term Loans or a Revolving
Credit Borrowing, and whether such Borrowing is to be a Eurodollar Borrowing or
an ABR Borrowing; (ii) the date of such Borrowing (which shall be a Business
Day), (iii) the number and location of the account to which funds are to be
disbursed (which shall be an account that complies with the requirements of
Section 2.02(c)); (iv) the amount of such Borrowing; and (v) if such Borrowing
is to
24
be a Eurodollar Borrowing, the Interest Period with respect thereto; provided,
however, that, notwithstanding any contrary specification in any Borrowing
Request, each requested Borrowing shall comply with the requirements set forth
in Section 2.02. If no election as to the Type of Borrowing is specified in any
such notice, then the requested Borrowing shall be an ABR Borrowing. If no
Interest Period with respect to any Eurodollar Borrowing is specified in any
such notice, then the Borrower shall be deemed to have selected an Interest
Period of one month's duration. The Administrative Agent shall promptly advise
the applicable Lenders of any notice given pursuant to this Section 2.03 (and
the contents thereof), and of each Lender's portion of the requested Borrowing.
If the Borrower shall not have delivered a Borrowing Request
in accordance with this Section 2.03 prior to the end of the Interest Period
then in effect for any Revolving Credit Borrowing and requesting that such
Borrowing be refinanced, then the Borrower shall (unless the Borrower has
notified the Administrative Agent, not less than three Business Days prior to
the end of such Interest Period, that such Borrowing is to be repaid at the end
of such Interest Period) be deemed to have delivered a Borrowing Request
requesting that such Borrowing be refinanced with a new Borrowing of equivalent
amount, and such new Borrowing shall be an ABR Borrowing.
SECTION 2.04. Evidence of Debt; Repayment of Loans. (a) The
Borrower hereby unconditionally promises to pay to the Administrative Agent for
the account of each Lender (i) the principal amount of each Term Loan of such
Lender as provided in Section 2.11 and (ii) the principal amount of each
Revolving Loan outstanding on the last day of the Interest Period applicable
thereto.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower to
such Lender resulting from each Loan made by such Lender from time to time,
including the amounts of principal and interest payable and paid such Lender
from time to time under this Agreement.
(c) The Administrative Agent shall maintain accounts in which
it will record (i) the amount of each Loan made hereunder, the Type thereof and
the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder from the Borrower or any Guarantor and each Lender's share
thereof.
(d) The entries made in the accounts maintained pursuant to
paragraphs (b) and (c) above shall be prima facie evidence of the existence and
amounts of the obligations therein recorded absent manifest error; provided,
however, that the failure of any Lender or the Administrative Agent to maintain
such accounts or any error therein shall not in any manner affect the
obligations of the Borrower to repay the Loans in accordance with their terms.
(e) Notwithstanding any other provision of this Agreement, in
the event any Lender shall request a promissory note payable to such Lender and
its registered assigns, the Borrower shall deliver such a note and the interests
represented by such note shall at all times after receipt of such note
(including after any assignment of all or part of such interests pursuant to
Section 9.04) be represented by one or more promissory notes payable to the
payee named therein or its registered assigns.
SECTION 2.05. Fees. (a) The Borrower agrees to pay to each
Lender, through the Administrative Agent, on the Closing Date and on the last
Business Day of March, June, September and December in each year and on each
date on which any Commitment of such Lender shall expire or
25
be terminated as provided herein, a commitment fee (a "Commitment Fee") of 0.50%
per annum on the average daily unused amount of the Commitments of such Lender
during the preceding quarter (or other period commencing with the date hereof or
ending with the Revolving Credit Maturity Date or the date on which the
Commitments of all the Lenders shall expire or be terminated). All Commitment
Fees shall be computed on the basis of the actual number of days elapsed in a
year of 360 days. The Commitment Fee due to each Lender shall commence to accrue
on the date hereof and shall cease to accrue on the date on which all the
Commitments of such Lender shall have been terminated as provided herein.
(b) The Borrower agrees to pay to the Administrative Agent,
for its own account, the fees set forth in the Fee Letter at the times and in
the amounts specified therein (the "Administrative Agent Fees").
(c) The Borrower agrees to pay (i) to each Revolving Credit
Lender, through the Administrative Agent, on the last Business Day of March,
June, September and December of each year and on the date on which the Revolving
Credit Commitments of all the Lenders shall be terminated as provided herein, a
fee (an "L/C Participation Fee") calculated on such Lender's Applicable
Percentage of the average daily aggregate L/C Exposure (excluding the portion
thereof attributable to unreimbursed L/C Disbursements) during the preceding
quarter (or shorter period commencing with the date hereof or ending with the
Revolving Credit Maturity Date or the date on which all Letters of Credit shall
have been canceled or have expired and the Revolving Credit Commitments of all
the Lenders shall have been terminated) at a rate equal to 2.75% per annum and
(ii) to each Fronting Bank, the fees separately agreed upon by STFI or the
Borrower and such Fronting Bank, plus, with respect to each Letter of Credit,
the customary fronting, issuance, amending and drawing fees specified from time
to time by such Fronting Bank (the "Fronting Bank Fees"). All L/C Participation
Fees and Fronting Bank Fees shall be computed on the basis of the actual number
of days elapsed in a year of 360 days.
(d) All Fees shall be paid on the dates due, in immediately
available funds, to the Administrative Agent for distribution, if and as
appropriate, among the Lenders, except that the Fronting Bank Fees shall be paid
directly to the applicable Fronting Bank. Once paid, none of the Fees shall be
refundable under any circumstances.
SECTION 2.06. Interest on Loans. (a) Subject to the provisions
of Section 2.07, the Loans comprising each ABR Borrowing shall bear interest
(computed on the basis of the actual number of days elapsed over a year of 365
or 366 days, as the case may be, when the Alternate Base Rate is determined by
reference to the Prime Rate and over a year of 360 days at all other times) at a
rate per annum equal to the Alternate Base Rate plus, in the case of (i)
Revolving Loans, 1.75%, (ii) Tranche A Term Loans, 1.75%, and (iii) Tranche B
Term Loans 2.50%.
(b) Subject to the provisions of Section 2.07, the Loans
comprising each Eurodollar Borrowing shall bear interest (computed on the basis
of the actual number of days elapsed over a year of 360 days) at a rate per
annum equal to the Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing plus, in the case of (i) Revolving Loans, 2.75%, (ii) Tranche A Term
Loans, 2.75%, and (iii) Tranche B Term Loans, 3.50%.
(c) Interest on each Loan shall be payable on the Interest
Payment Dates applicable to such Loan except as otherwise provided in this
Agreement. The applicable Alternate Base Rate or Adjusted LIBO Rate for each
Interest Period or day within an Interest Period, as the case may be, shall
26
be determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error.
SECTION 2.07. Default Interest. If the Borrower shall default
in the payment of the principal of or interest on any Loan or any other amount
becoming due hereunder, by acceleration or otherwise, or under any other Loan
Document, the Borrower shall on demand from time to time pay interest, to the
extent (and only to such extent) permitted by law, on such defaulted amount to
but excluding the date of actual payment (after as well as before judgment) (a)
in the case of overdue principal, at the rate otherwise applicable to such Loan
pursuant to Section 2.06 plus 2.00% per annum and (b) in all other cases, at a
rate per annum (computed on the basis of the actual number of days elapsed over
a year of 365 or 366 days, as the case may be, when determined by reference to
the Prime Rate and over a year of 360 days at all other times) equal to the sum
of the Alternate Base Rate plus 3.75%.
SECTION 2.08. Alternate Rate of Interest. In the event, and on
each occasion, that on the day two Business Days prior to the commencement of
any Interest Period for a Eurodollar Borrowing the Administrative Agent shall
have determined that dollar deposits in the principal amounts of the Loans
comprising such Borrowing are not generally available in the London interbank
market, or that the rates at which such dollar deposits are being offered will
not adequately and fairly reflect the cost to any Lender of making or
maintaining its Eurodollar Loan during such Interest Period, or that reasonable
means do not exist for ascertaining the Adjusted LIBO Rate, the Administrative
Agent shall, as soon as practicable thereafter, give written or telecopy notice
of such determination to the Borrower and the Lenders. In the event of any such
determination, until the Administrative Agent shall have advised the Borrower
and the Lenders that the circumstances giving rise to such notice no longer
exist, any request by the Borrower for a Eurodollar Borrowing pursuant to
Section 2.03 or 2.10 shall be deemed to be a request for an ABR Borrowing. Each
determination by the Administrative Agent hereunder shall be conclusive absent
manifest error.
SECTION 2.09. Termination and Reduction of Commitments. (a)
The Term Loan Commitments shall automatically terminate at 5:00 p.m., New York
City time, on the Closing Date. The Revolving Credit Commitments and the L/C
Commitments shall automatically terminate on the Revolving Credit Maturity Date.
Notwithstanding the foregoing, all the Commitments and L/C Commitments shall
automatically terminate at 5:00 p.m., New York City time, on April 15, 1996, if
the initial Credit Event shall not have occurred by such time.
(b) Upon at least three Business Days' prior irrevocable
written or telecopy notice to the Administrative Agent, the Borrower may at any
time in whole permanently terminate, or from time to time in part permanently
reduce, the Term Loan Commitments or the Revolving Credit Commitments; provided,
however, that (i) each partial reduction of the Term Loan Commitments or the
Revolving Credit Commitments shall be in an integral multiple of $1,000,000 and
in a minimum amount of $5,000,000 (or, if less, the remaining amount of the
Revolving Credit Commitments) and (ii) the Total Revolving Credit Commitment
shall not be reduced at any time to an amount that is less than the Aggregate
Revolving Credit Exposure at such time.
(c) The Revolving Credit Commitments shall be automatically
and permanently reduced by an amount equal to any amount applied under paragraph
(b) or (c) of Section 2.13 to prepay Revolving Credit Borrowings (or that would
have been required to be so applied if Revolving Credit Borrowings equal to such
amount had been outstanding).
27
(d) Each reduction in the Term Loan Commitments or the
Revolving Credit Commitments hereunder shall be made ratably among the Lenders
in accordance with their respective applicable Commitments. The Borrower shall
pay to the Administrative Agent for the account of the applicable Lenders, on
the date of each termination or reduction, the Commitment Fees on the amount of
the Commitments so terminated or reduced accrued to but excluding the date of
such termination or reduction.
SECTION 2.10. Conversion and Continuation of Term Borrowings.
The Borrower shall have the right at any time upon prior irrevocable notice to
the Administrative Agent (a) not later than 12:00 noon, New York City time, one
Business Day prior to conversion, to convert any Eurodollar Term Borrowing into
an ABR Term Borrowing, (b) not later than 12:00 noon, New York City time, three
Business Days prior to conversion or continuation, to convert any ABR Term
Borrowing into a Eurodollar Term Borrowing or to continue any Eurodollar Term
Borrowing as a Eurodollar Term Borrowing for an additional Interest Period, and
(c) not later than 12:00 noon, New York City time, three Business Days prior to
conversion, to convert the Interest Period with respect to any Eurodollar Term
Borrowing to another permissible Interest Period, subject in each case to the
following:
(i) each conversion or continuation shall be made pro rata
among the Lenders in accordance with the respective principal amounts
of the Loans comprising the converted or continued Term Borrowing;
(ii) if less than all the outstanding principal amount of any
Term Borrowing shall be converted or continued, then each resulting
Term Borrowing shall satisfy the limitations specified in Sections
2.02(a) and 2.02(b) regarding the principal amount and maximum number
of Borrowings of the relevant Type;
(iii) each conversion shall be effected by each Lender and the
Administrative Agent by recording for the account of such Lender the
new Term Loan of such Lender resulting from such conversion and
reducing the Term Loan (or portion thereof) of such Lender being
converted by an equivalent principal amount; accrued interest on any
Eurodollar Term Loan (or portion thereof) being converted shall be paid
by the Borrower at the time of conversion;
(iv) if any Eurodollar Term Borrowing is converted at a time
other than the end of the Interest Period applicable thereto, the
Borrower shall pay, upon demand, any amounts due to the Lenders
pursuant to Section 2.16;
(v) any portion of a Term Borrowing maturing or required to
be repaid in less than one month may not be converted into or continued
as a Eurodollar Term Borrowing;
(vi) any portion of a Term Borrowing that cannot be converted
into or continued as a Eurodollar Term Borrowing by reason of the
immediately preceding clause shall be automatically converted at the
end of the Interest Period in effect for such Borrowing into an ABR
Term Borrowing;
(vii) no Interest Period may be selected for any Eurodollar
Term Borrowing that would end later than an Installment Date occurring
on or after the first day of such Interest Period and applicable to
such Borrowing if, after giving effect to such selection, the aggregate
28
outstanding amount of (A) the Eurodollar Term Borrowings to which such
Installment Date applies with Interest Periods ending on or prior to
such Installment Date and (B) the ABR Term Borrowings to which such
Installment Date applies would not be at least equal to the principal
amount of Term Borrowings to be paid on such Installment Date; and
(viii) after the occurrence and during the continuance of a
Default or Event of Default, no outstanding Loan may be converted into,
or continued as, a Eurodollar Loan.
Each notice pursuant to this Section 2.10 shall be irrevocable
and shall refer to this Agreement and specify (i) the identity and amount of the
Term Borrowing that the Borrower requests be converted or continued, (ii)
whether such Term Borrowing is to be converted to or continued as a Eurodollar
Term Borrowing or an ABR Term Borrowing, (iii) if such notice requests a
conversion or continuation, the date of such conversion (which shall be a
Business Day) and (iv) if such Term Borrowing is to be converted to or continued
as a Eurodollar Term Borrowing, the Interest Period with respect thereto. If no
Interest Period is specified in any such notice with respect to any conversion
to or continuation as a Eurodollar Term Borrowing, the Borrower shall be deemed
to have selected an Interest Period of one month's duration. The Administrative
Agent shall advise the Lenders of any notice given pursuant to this Section 2.10
and of each Lender's portion of any converted or continued Term Borrowing. If
the Borrower shall not have given notice in accordance with this Section 2.10 to
continue any Term Borrowing into a subsequent Interest Period (and shall not
otherwise have given notice in accordance with this Section 2.10 to convert such
Term Borrowing), such Term Borrowing shall, at the end of the Interest Period
applicable thereto (unless repaid pursuant to the terms hereof), automatically
be continued into a new Interest Period as an ABR Term Borrowing.
SECTION 2.11. Repayment of Term Borrowings. (a) The Term
Borrowings shall be payable as to principal in the aggregate amounts set forth
below in consecutive quarterly installments on the last Business Day of each
March, June, September and December (each an "Installment Date"), commencing on
June 28, 1996, with 25% of the amount set forth below for each applicable
four-quarter period being paid on each Installment Date occurring during such
four-quarter period:
Four-Quarter Tranche A Tranche B
Period Ending Term Loan Amount Term Loan Amount
March 31, 1997 $ 7,000,000 $ 2,000,000
March 31, 1998 12,000,000 2,000,000
March 31, 1999 15,000,000 2,000,000
March 31, 2000 8,000,000 2,000,000
March 30, 2001 8,000,000 2,000,000
March 29, 2002 25,000,000
March 31, 2003 35,000,000
(b) Except as set forth in paragraph (c) below, (i) each
prepayment of principal of Term Borrowings pursuant to Section 2.12 shall be
applied to the Tranche A Term Loans and the Tranche B Term Loans ratably in
accordance with the respective outstanding principal amounts thereof and shall
reduce scheduled payments required under paragraph (a) above after the date of
such prepayments in the scheduled order of maturity, unless and until deemed
made under Section 2.13(c) as contemplated thereby (at which time the
application of such prepayments (and any subsequent payments under Section
2.11(a) and prepayments under Section 2.13(a) or (b)) shall be retroactively
adjusted as if
29
such prepayments had originally been made under Section 2.13(c)), and (ii) each
prepayment of principal of the Term Borrowings made or deemed made pursuant to
Section 2.13 shall be applied to the Tranche A Term Loans and the Tranche B Term
Loans ratably in accordance with the respective outstanding principal amounts
thereof and shall reduce the scheduled payments required under paragraph (a)
above after the date of such prepayment on a pro rata basis. To the extent not
previously paid or reduced, all Tranche A Term Loans shall be due and payable on
the Tranche A Maturity Date and all Tranche B Term Loans shall be due and
payable on the Tranche B Maturity Date. All repayments pursuant to this Section
2.11 shall be subject to Section 2.16, but shall otherwise be without premium or
penalty. Each payment of Borrowings pursuant to this Section 2.11 shall be
accompanied by accrued interest on the principal amount paid to but excluding
the date of such payment.
(c) Any Lender holding Tranche B Term Loans may, to the extent
Tranche A Term Loans are outstanding, elect on not less than two Business Days'
prior written or telecopy notice (or telephone notice promptly confirmed by
written or telecopy notice) to the Administrative Agent with respect to any
optional prepayment made pursuant to Section 2.12(a) or any mandatory prepayment
made pursuant to Section 2.13 not to have such prepayment applied to such
Lender's Tranche B Term Loans until all Tranche A Term Loans shall have been
paid in full, in which case the amount not so applied shall be applied to prepay
(i) Tranche A Term Loans and (ii) Tranche B Term Loans of Lenders holding
Tranche B Term Loans which did not elect to reject the initial applicable
prepayment on a pro rata basis based upon the aggregate outstanding principal
amount of the Tranche A Term Loans and the Tranche B Term Loans of the Lenders
referred to in clause (ii).
SECTION 2.12. Optional Prepayments. (a) The Borrower shall
have the right at any time and from time to time to prepay any Borrowing, in
whole or in part, upon at least three Business Days' prior written or telecopy
notice (or telephone notice promptly confirmed by written or telecopy notice) to
the Administrative Agent before 11:00 a.m., New York City time; provided,
however, that each partial prepayment shall be in an amount that is an integral
multiple of $1,000,000 and not less than $5,000,000 (or, if less, the remaining
amount outstanding under the applicable Tranche).
(b) Each notice of prepayment shall specify the prepayment
date and the principal amount of each Borrowing (or portion thereof) to be
prepaid, shall be irrevocable and shall commit the Borrower to prepay such
Borrowing by the amount stated therein on the date stated therein. All
prepayments under this Section 2.12 shall be subject to Section 2.16 but
otherwise without premium or penalty and shall be accompanied by accrued
interest on the principal amount being prepaid to but excluding the date of
payment.
SECTION 2.13. Mandatory Prepayments. (a) In the event of the
termination of all the Revolving Credit Commitments, the Borrower shall repay or
prepay all its outstanding Revolving Credit Borrowings on the date of such
termination. In the event of any partial reduction of the Revolving Credit
Commitments, then (i) at or prior to the effective date of such reduction, the
Administrative Agent shall notify the Borrower and the Revolving Credit Lenders
of the Aggregate Revolving Credit Exposure after giving effect thereto and (ii)
if the Aggregate Revolving Credit Exposure would exceed the Total Revolving
Credit Commitment after giving effect to such reduction or termination, then the
Borrower shall, on the date of such reduction or termination, repay or prepay
Revolving Credit Borrowings in an amount sufficient to eliminate such excess.
30
(b) Not later than the fifth Business Day following the
receipt by STFI, the Borrower or any Subsidiary of any Net Proceeds, all such
Net Proceeds shall be applied to prepay Term Loans (and after the Term Loans
have been paid in full, to prepay Revolving Loans).
(c) Not later than the earlier of (i) 100 days after the end
of each fiscal year of the Borrower, commencing with the fiscal year ending on
December 31, 1996, and (ii) ten days after the date on which the financial
statements with respect to such fiscal year are delivered pursuant to Section
5.04(a), the Borrower shall calculate Excess Cash Flow for such fiscal year and
prepay outstanding Term Loans (and after the Term Loans have been paid in full,
prepay Revolving Loans) in an aggregate principal amount equal to the ECF
Percentage of such Excess Cash Flow; provided, however, that, with respect to
the period ended on December 31, 1996, Excess Cash Flow shall, notwithstanding
anything to the contrary herein, be determined with respect to the period
beginning on the Closing Date and ending on December 31, 1996. In the event the
Borrower shall have prepaid Term Borrowings under Section 2.12(a) during any
fiscal year in an aggregate amount in excess of Debt Service for such fiscal
year, the Borrower may in the certificate delivered pursuant to paragraph (e)
below in respect of the prepayment to be made pursuant to this paragraph (c) in
respect of such fiscal year designate all or any portion of such excess over
Debt Service as a payment in respect of the payment required under this
paragraph (c) in respect of such fiscal year and such amount shall thereafter be
deemed to have been paid under this paragraph (c).
(d) The Borrower shall repay or prepay outstanding Revolving
Loans and shall refrain from making additional Revolving Credit Borrowings to
the extent necessary in order that there shall be a period of at least 30
consecutive days in each fiscal year during which the aggregate principal amount
of outstanding Revolving Loans shall not exceed $5,000,000.
(e) The Borrower shall deliver to the Administrative Agent not
later than three Business Days prior to each prepayment required under this
Section 2.13 a certificate signed by a Financial Officer of the Borrower setting
forth in reasonable detail the calculation of the amount of such prepayment.
Each notice of prepayment shall specify the prepayment date, the Type of each
Loan being prepaid and the principal amount of each Loan (or portion thereof) to
be prepaid. All pre- payments under this Section 2.13 shall be subject to
Section 2.16, but shall otherwise be without premium or penalty and shall be
accompanied by accrued interest on the principal amount being prepaid to but
excluding the date of payment.
(f) Amounts to be applied pursuant to this Section 2.13 to the
prepayment of Term Loans and Revolving Loans shall be applied, as applicable,
first to reduce outstanding ABR Borrowings. Any amounts remaining after each
such application shall, at the option of the Borrower, be applied to prepay
Eurodollar Borrowings immediately or shall be deposited in the Prepayment
Account (as defined below) for a period of up to 30 days. The Administrative
Agent shall apply any cash deposited in the Prepayment Account allocable to Term
Loans to prepay Eurodollar Term Loans and allocable to Revolving Loans to prepay
Eurodollar Revolving Loans (i) prior to the 30th day following the deposit of
such amounts in such account, in each case on the last day of their respective
Interest Periods (or, at the direction of the Borrower, on any earlier date) and
(ii) on the 30th day following the deposit of such amounts in such account, in
each case to prepay Loans in the order of the maturity of the Interest Periods
of such Loans, in each case until all outstanding Term Loans or Revolving Loans,
as the case may be, have been prepaid or until all the allocable cash on deposit
with respect to such Loans has been exhausted. For purposes of this Agreement,
the term "Prepayment Account" shall mean an account established by the Borrower
with the Administrative Agent and over
31
which the Administrative Agent shall have exclusive dominion and control,
including the exclusive right of withdrawal for application in accordance with
this paragraph (f). The Administrative Agent will, at the request of the
Borrower, invest amounts on deposit in the Prepayment Account in overnight
investments that are Permitted Investments; provided, however, that (i) the
Administrative Agent shall not be required to make any investment that, in its
sole judgment, would require or cause the Administrative Agent to be in, or
would result in any, violation of any law, statute, rule or regulation and (ii)
the Administrative Agent shall have no obligation to invest amounts on deposit
in the Prepayment Account if a Default or Event of Default shall have occurred
and be continuing. The Borrower shall indemnify the Administrative Agent for any
losses relating to the investments so that the amount available to prepay
Eurodollar Borrowings on the last day of the applicable Interest Period is not
less than the amount that would have been available had no investments been made
pursuant thereto. Other than any interest earned on such investments, the
Prepayment Account shall not bear interest. Interest or profits, if any, on such
investments shall be deposited in the Prepayment Account and reinvested and
disbursed as specified above. If the maturity of the Loans has been accelerated
pursuant to Article VII, the Administrative Agent may, in its sole discretion,
apply all amounts on deposit in the Prepayment Account to satisfy any of the
Obligations in a manner consistent with the terms thereof. The Borrower hereby
grants to the Administrative Agent, for its benefit and the benefit of the
Fronting Banks and the Lenders, a security interest in the Prepayment Account to
secure the Obligations.
SECTION 2.14. Reserve Requirements; Change in Circumstances.
(a) Notwithstanding any other provision of this Agreement, if after the date of
this Agreement any change in applicable law or regulation or in the
interpretation or administration thereof by any Governmental Authority charged
with the interpretation or administration thereof (whether or not having the
force of law) shall change the basis of taxation of payments to any Lender or
any Fronting Bank of the principal of or interest on any Eurodollar Loan made by
such Lender or any Fees or other amounts payable hereunder (other than changes
in respect of taxes imposed on the overall net income of such Lender or Fronting
Bank by the jurisdiction in which such Lender or Fronting Bank has its principal
office or by any political subdivision or taxing authority therein), or shall
impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of or credit
extended by any Lender or such Fronting Bank (except any such reserve
requirement which is reflected in the Adjusted LIBO Rate) or shall impose on
such Lender or such Fronting Bank or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such Lender or
any Letter of Credit or participation therein, and the result of any of the
foregoing shall be to increase the cost to such Lender or such Fronting Bank of
making or maintaining any Eurodollar Loan or increase the cost to any Lender of
issuing or maintaining any Letter of Credit or purchasing or maintaining a
participation therein or to reduce the amount of any sum received or receivable
by such Lender or such Fronting Bank hereunder (whether of principal, interest
or otherwise) by an amount deemed by such Lender or such Fronting Bank to be
material, then the Borrower will pay to such Lender or such Fronting Bank, as
the case may be, upon demand such additional amount or amounts as will
compensate such Lender or Fronting Bank, as the case may be, for such additional
costs incurred or reduction suffered.
(b) If any Lender or Fronting Bank shall have determined that
the adoption after the date hereof of any law, rule, regulation, agreement or
guideline regarding capital adequacy, or any change after the date hereof in any
such law, rule, regulation, agreement or guideline (whether such law, rule,
regulation, agreement or guideline has been adopted) or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration
32
thereof, or compliance by any Lender (or any lending office of such Lender) or
any Fronting Bank or any Lender's or Fronting Bank's holding company (or other
person Controlling such Lender or Fronting Bank (a "holding company")) with any
request or directive regarding capital adequacy (whether or not having the force
of law) of any Governmental Authority has or would have the effect of reducing
the rate of return on such Lender's or Fronting Bank's capital or on the capital
of such Lender's or Fronting Bank's holding company, if any, as a consequence of
this Agreement or the Loans made or participations in Letters of Credit
purchased by such Lender pursuant hereto or the Letters of Credit issued by such
Fronting Bank pursuant hereto to a level below that which such Lender or
Fronting Bank or such Lender's or Fronting Bank's holding company could have
achieved but for such applicability, adoption, change or compliance (taking into
consideration such Lender's or Fronting Bank's policies and the policies of such
Lender's or Fronting Bank's holding company with respect to capital adequacy) by
an amount deemed by such Lender or Fronting Bank to be material, then from time
to time the Borrower shall pay to such Lender or Fronting Bank, as the case may
be, such additional amount or amounts as will compensate such Lender or Fronting
Bank or such Lender's or Fronting Bank's holding company for any such reduction
suffered.
(c) A certificate of a Lender or Fronting Bank setting forth
the amount or amounts necessary to compensate such Lender or Fronting Bank or
its holding company, as applicable, as specified in paragraph (a) or (b) above
shall be delivered to the Borrower and shall be conclusive absent manifest
error. The Borrower shall pay such Lender or Fronting Bank the amount shown as
due on any such certificate delivered by it within 10 days after its receipt of
the same.
(d) Failure or delay on the part of any Lender or any Fronting
Bank to demand compensation for any increased costs or reduction in amounts
received or receivable or reduction in return on capital shall not constitute a
waiver of such Lender's or Fronting Bank's right to demand such compensation.
The protection of this Section 2.14 shall be available to each Lender and
Fronting Bank regardless of any possible contention of the invalidity or
inapplicability of the law, rule, regulation, agreement, guideline or other
change or condition that shall have occurred or been imposed.
SECTION 2.15. Change in Legality. (a) Notwithstanding any
other provision of this Agreement, if, after the date hereof, any change in any
law or regulation or in the interpretation thereof by any Governmental Authority
charged with the administration or interpretation thereof shall make it unlawful
for any Lender to make or maintain any Eurodollar Loan or to give effect to its
obligations as contemplated hereby with respect to any Eurodollar Loan, then, by
written notice to the Borrower and to the Administrative Agent:
(i) such Lender may declare that Eurodollar Loans will not
thereafter (for the duration of such unlawfulness) be made by such
Lender hereunder (or be continued for additional Interest Periods and
ABR Loans will not thereafter (for such duration) be converted into
Eurodollar Loans), whereupon any request for a Eurodollar Borrowing (or
to convert an ABR Borrowing to a Eurodollar Borrowing or to continue a
Eurodollar Borrowing for an additional Interest Period) shall, as to
such Lender only, be deemed a request for an ABR Loan (or a request to
continue an ABR Loan as such for an additional Interest Period or to
convert a Eurodollar Loan into an ABR Loan, as the case may be), unless
such declaration shall be subsequently withdrawn; and
(ii) such Lender may require that all outstanding Eurodollar
Loans made by it be converted to ABR Loans, in which event all such
Eurodollar Loans shall be automatically con-
33
verted to ABR Loans as of the effective date of such notice as provided
in paragraph (b) below.
In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal that would otherwise have been applied to
repay the Eurodollar Loans that would have been made by such Lender or the
converted Eurodollar Loans of such Lender shall instead be applied to repay the
ABR Loans made by such Lender in lieu of, or resulting from the conversion of,
such Eurodollar Loans.
(b) For purposes of this Section 2.15, a notice to the
Borrower by any Lender shall be effective as to each Eurodollar Loan made by
such Lender, if lawful, on the last day of the Interest Period currently
applicable to such Eurodollar Loan; in all other cases such notice shall be
effective on the date of receipt by the Borrower.
SECTION 2.16. Indemnity. The Borrower shall indemnify each
Lender against any loss or expense that such Lender may sustain or incur as a
consequence of (a) any event, other than a default by such Lender in the
performance of its obligations hereunder, which results in (i) such Lender
receiving or being deemed to receive any amount on account of the principal of
any Eurodollar Loan prior to the end of the Interest Period in effect therefor,
(ii) the conversion of any Eurodollar Loan to an ABR Loan, or the conversion of
the Interest Period with respect to any Eurodollar Loan, in each case other than
on the last day of the Interest Period in effect therefor, or (iii) any
Eurodollar Loan to be made by such Lender (including any Eurodollar Loan to be
made pursuant to a conversion or continuation under Section 2.10) not being made
after notice of such Loan shall have been given by the Borrower hereunder (any
of the events referred to in this clause (a) being called a "Breakage Event") or
(b) any default in the making of any payment or prepayment required to be made
hereunder. In the case of any Breakage Event, such loss shall include an amount
equal to the excess, as reasonably determined by such Lender, of (i) its cost of
obtaining funds for the Eurodollar Loan that is the subject of such Breakage
Event for the period from the date of such Breakage Event to the last day of the
Interest Period in effect (or that would have been in effect) for such Loan over
(ii) the amount of interest likely to be realized by such Lender in redeploying
the funds released or not utilized by reason of such Breakage Event for such
period. A certificate of any Lender setting forth any amount or amounts which
such Lender is entitled to receive pursuant to this Section 2.16 shall be
delivered to the Borrower and to the Administrative Agent and shall be
conclusive absent manifest error.
SECTION 2.17. Pro Rata Treatment. Except as required under
Section 2.15, each Borrowing, each payment or prepayment of principal of any
Borrowing, each payment of interest on the Loans, each payment of the Commitment
Fees and the L/C Participation Fees, each reduction of the Term Loan Commitments
or the Revolving Credit Commitments and each refinancing of any Borrowing with,
conversion of any Borrowing to or continuation of any Borrowing as a Borrowing
of any Type shall be allocated pro rata among the Lenders in accordance with
their respective applicable Commitments (or, if such Commitments shall have
expired or been terminated, in accordance with the respective principal amounts
of their applicable outstanding Loans).
SECTION 2.18. Sharing of Setoffs. Each Lender agrees that if
it shall, through the exercise of a right of banker's lien, setoff or
counterclaim against the Borrower or any other Loan Party, or pursuant to a
secured claim under Section 506 of Title 11 of the United States Code or other
security or interest arising from, or in lieu of, such secured claim, received
by such Lender under any applicable bankruptcy, insolvency or other similar law
or otherwise, or by any other means, obtain
34
payment (voluntary or involuntary) in respect of any Loan or Loans or L/C
Disbursement as a result of which the unpaid principal portion of its Tranche A
Term Loans, Tranche B Term Loans, Revolving Loans or participations in L/C
Disbursements shall be proportionately less than the unpaid principal portion of
the Tranche A Term Loans, Tranche B Term Loans, Revolving Loans or
participations in L/C Disbursements, respectively, of any other Lender, it shall
be deemed simultaneously to have purchased from such other Lender at face value,
and shall promptly pay to such other Lender the purchase price for, a
participation in the Tranche A Term Loans, Tranche B Term Loans, Revolving Loans
or L/C Exposure, as the case may be of such other Lender, so that the aggregate
unpaid principal amount of the Tranche A Term Loans, Tranche B Term Loans,
Revolving Loans or L/C Exposure and participations in Tranche A Term Loans,
Tranche B Term Loans, Revolving Loans or L/C Exposure held by each Lender shall
be in the same proportion to the aggregate unpaid principal amount of all
Tranche A Term Loans, Tranche B Term Loans, Revolving Loans or L/C Exposure then
outstanding as the principal amount of its Tranche A Term Loans, Tranche B Term
Loans, Revolving Loans or L/C Exposure prior to such exercise of banker's lien,
setoff or counterclaim or other event was to the principal amount of all Tranche
A Term Loans, Tranche B Term Loans, Revolving Loans or L/C Exposure outstanding
prior to such exercise of banker's lien, setoff or counterclaim or other event;
provided, however, that if any such purchase or purchases or adjustments shall
be made pursuant to this Section 2.18 and the payment giving rise thereto shall
thereafter be recovered, such purchase or purchases or adjustments shall be
rescinded to the extent of such recovery and the purchase price or prices or
adjustment restored without interest. The Borrower and STFI expressly consent to
the foregoing arrangements and agree that any Lender holding a participation in
a Term Loan or Revolving Loan or L/C Disbursement deemed to have been so
purchased may exercise any and all rights of banker's lien, setoff or
counterclaim with respect to any and all moneys owing by the Borrower and STFI
to such Lender by reason thereof as fully as if such Lender had made a Loan
directly to the Borrower in the amount of such participation.
SECTION 2.19. Payments. (a) The Borrower shall make each
payment (including principal of or interest on any Borrowing or any L/C
Disbursement or any Fees or other amounts) hereunder and under any other Loan
Document not later than 12:00 noon, New York City time, on the date when due in
immediately available dollars, without setoff, defense or counterclaim. Each
such payment (other than Fronting Bank Fees, which shall be paid directly to the
applicable Fronting Bank) shall be made to the Administrative Agent at its
offices at 12 East 49th Street, New York, New York. The Administrative Agent
shall distribute such funds promptly after receipt to the Lenders and the
Fronting Banks, as applicable.
(b) Whenever any payment (including principal of or interest
on any Borrowing or any Fees or other amounts) hereunder or under any other Loan
Document shall become due, or otherwise would occur, on a day that is not a
Business Day, such payment may be made on the next succeeding Business Day, and
such extension of time shall in such case be included in the computation of
interest or Fees, if applicable.
SECTION 2.20. Taxes. (a) Any and all payments by or on behalf
of the Borrower or any Loan Party hereunder and under any other Loan Document
shall be made, in accordance with Section 2.19, free and clear of and without
deduction for any and all current or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding (i)
income taxes imposed on the net income of the Administrative Agent, any Lender
or any Fronting Bank (or any transferee or assignee thereof, including a
participation holder (any such entity a "Transferee")) and (ii) franchise taxes
imposed on the net income of the Administrative Agent, any
35
Lender or any Fronting Bank (or Transferee), in each case by the jurisdiction
under the laws of which the Administrative Agent, such Lender or such Fronting
Bank (or Transferee) is organized or any political subdivision thereof (all such
nonexcluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities, collectively or individually, being called "Taxes"). If the
Borrower or any Loan Party shall be required to deduct any Taxes from or in
respect of any sum payable hereunder or under any other Loan Document to the
Administrative Agent, any Lender or any Fronting Bank (or any Transferee), (i)
the sum payable shall be increased by the amount (an "additional amount")
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.20) the
Administrative Agent, such Lender or such Fronting Bank (or Transferee), as the
case may be, shall receive an amount equal to the sum it would have received had
no such deductions been made, (ii) the Borrower or such Loan Party shall make
such deductions and (iii) the Borrower or such Loan Party shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law.
(b) In addition, the Borrower agrees to pay to the relevant
Governmental Authority in accordance with applicable law any current or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies (including, without limitation, mortgage recording taxes and
similar fees) that arise from any payment made hereunder or under any other Loan
Document or from the execution, delivery or registration of, or otherwise with
respect to, this Agreement or any other Loan Document ("Other Taxes").
(c) The Borrower will indemnify the Administrative Agent, each
Lender and each Fronting Bank (or Transferee) for the full amount of Taxes and
Other Taxes paid by the Administrative Agent, such Lender or such Fronting Bank
(or Transferee), as the case may be, and any liability (including penalties,
interest and expenses (including reasonable attorney's fees and expenses))
arising therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability prepared by the
Administrative Agent, a Lender or a Fronting Bank (or Transferee), or the
Administrative Agent on its behalf, absent manifest error, shall be final,
conclusive and binding for all purposes. Such indemnification shall be made
within 30 days after the date the Administrative Agent, any Lender or any
Fronting Bank (or Transferee), as the case may be, makes written demand
therefor.
(d) As soon as practicable after the date of any payment of
Taxes or Other Taxes by the Borrower or any other Loan Party to the relevant
Governmental Authority, the Borrower or such other Loan Party will deliver to
the Administrative Agent, at its address referred to in Section 9.01, the
original or a certified copy of a receipt issued by such Governmental Authority
evidencing payment thereof.
(e) Each Lender and Fronting Bank (or Transferee) that is
organized under the laws of a jurisdiction other than the United States, any
State thereof or the District of Columbia (a "Non- U.S. Lender") shall deliver
to the Borrower and the Administrative Agent two copies of either United States
Internal Revenue Service Form 1001 or Form 4224, or, in the case of a Non-U.S.
Lender or Fronting Bank claiming exemption from U.S. Federal withholding tax
under Section 871(h) or 881(c) of the Code with respect to payments of
"portfolio interest", a Form W-8, or any subsequent versions thereof or
successors thereto (and, if such Non-U.S. Lender or Fronting Bank delivers a
Form W-8, a certificate representing that such Non-U.S. Lender or Fronting Bank
is not a bank for purposes of Section 881(c) of the Code, is not a 10-percent
shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of the
Borrower and is not a controlled foreign corporation related to the Borrower
36
(within the meaning of Section 864(d)(4) of the Code)), properly completed and
duly executed by such Non-U.S. Lender or Fronting Bank claiming complete
exemption from, or reduced rate of, U.S. Federal withholding tax on payments by
the Borrower under this Agreement and the other Loan Documents. Such forms shall
be delivered by each Non-U.S. Lender or Fronting Bank on or before the date it
becomes a party to this Agreement (or, in the case of a Transferee that is a
participation holder, on or before the date such participation holder becomes a
Transferee hereunder) and on or before the date, if any, such Non-U.S. Lender or
Fronting Bank changes its applicable lending office by designating a different
lending office (a "New Lending Office"). In addition, each Non-U.S. Lender or
Fronting Bank shall deliver such forms promptly upon the obsolescence or
invalidity of any form previously delivered by such Non-U.S. Lender or Fronting
Bank. Notwithstanding any other provision of this Section 2.20(e), a Non-U.S.
Lender or Fronting Bank shall not be required to deliver any form pursuant to
this Section 2.20(e) that such Non-U.S. Lender or Fronting Bank is not legally
able to deliver.
(f) The Borrower shall not be required to indemnify any
Non-U.S. Lender or Fronting Bank or to pay any additional amounts to any
Non-U.S. Lender or Fronting Bank, in respect of United States Federal
withholding tax pursuant to paragraph (a) or (c) above to the extent that (i)
the obligation to withhold amounts with respect to United States Federal
withholding tax existed on the date such Non-U.S. Lender or Fronting Bank became
a party to this Agreement (or, in the case of a Transferee that is a
participation holder, on the date such participation holder became a Transferee
hereunder) or, with respect to payments to a New Lending Office, the date such
Non-U.S. Lender or Fronting Bank designated such New Lending Office with respect
to a Loan or a Letter of Credit; provided, however, that this paragraph (f)
shall not apply (x) to any Transferee or New Lending Office that becomes a
Transferee or New Lending Office as a result of an assignment, participation,
transfer or designation made at the request of the Borrower and (y) to the
extent the indemnity payment or additional amounts any Transferee, or any Lender
or Fronting Bank (or Transferee), acting through a New Lending Office, would be
entitled to receive (without regard to this paragraph (f)) do not exceed the
indemnity payment or additional amounts that the person making the assignment,
participation or transfer to such Transferee, or Lender or Fronting Bank (or
Transferee) making the designation of such New Lending Office, would have been
entitled to receive in the absence of such assignment, participation, transfer
or designation or (ii) the obligation to pay such additional amounts would not
have arisen but for a failure by such Non-U.S. Lender or Fronting Bank to comply
with the provisions of paragraph (e) above.
(g) Nothing contained in this Section 2.20 shall require any
Lender or Fronting Bank (or any Transferee) or the Administrative Agent to make
available any of its tax returns (or any other information that it deems to be
confidential or proprietary).
SECTION 2.21. Assignment of Commitments Under Certain
Circumstances; Duty to Mitigate. (a) In the event (i) any Lender or Fronting
Bank delivers a certificate requesting compensation pursuant to Section 2.14,
(ii) any Lender or Fronting Bank delivers a notice described in Section 2.15 or
(iii) the Borrower is required to pay any additional amount to any Lender or
Fronting Bank or any Governmental Authority on account of any Lender or Fronting
Bank pursuant to Section 2.20, the Borrower may, at its sole expense and effort
(including with respect to the processing and recordation fee referred to in
Section 9.04(b)), upon notice to such Lender or Fronting Bank and the
Administrative Agent, require such Lender or Fronting Bank to transfer and
assign, without recourse (in accordance with and subject to the restrictions
contained in Section 9.04), all of its interests, rights and obligations under
this Agreement to an assignee that shall assume such assigned
37
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (x) such assignment shall not conflict with any law,
rule or regulation or order of any court or other Governmental Authority having
jurisdiction, (y) the Borrower shall have received the prior written consent of
the Administrative Agent (and, if a Revolving Credit Commitment is being
assigned, of the Fronting Banks), which consents shall not unreasonably be
withheld, and (z) the Borrower or such assignee shall have paid to the affected
Lender or Fronting Bank in immediately available funds an amount equal to the
sum of the principal of and interest accrued to the date of such payment on the
outstanding Loans or L/C Disbursements of such Lender or Fronting Bank,
respectively, plus all Fees and other amounts accrued for the account of such
Lender or Fronting Bank hereunder (including any amounts under Section 2.14 and
Section 2.16).
(b) If (i) any Lender or Fronting Bank shall request
compensation under Section 2.14, (ii) any Lender or Fronting Bank delivers a
notice described in Section 2.15 or (iii) the Borrower is required to pay any
additional amount to any Lender or Fronting Bank or any Governmental Authority
on account of any Lender or Fronting Bank, pursuant to Section 2.20, then such
Lender or Fronting Bank shall use reasonable efforts (which shall not require
such Lender or Fronting Bank to incur an unreimbursed loss or unreimbursed cost
or expense or otherwise take any action inconsistent with its internal policies
or legal or regulatory restrictions or suffer any disadvantage or burden deemed
by it to be significant) (x) to file any certificate or document reasonably
requested in writing by the Borrower or (y) to assign its rights and delegate
and transfer its obligations hereunder to another of its offices, branches or
affiliates, if such filing or assignment would reduce its claims for
compensation under Section 2.14 or enable it to withdraw its notice pursuant to
Section 2.15 or would reduce amounts payable pursuant to Section 2.20, as the
case may be, in the future. The Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender or Fronting Bank in connection with
any such filing or assignment, delegation and transfer.
SECTION 2.22. Letters of Credit. (a) General. The Borrower may
request the issuance of a Letter of Credit, in a form reasonably acceptable to
the Administrative Agent and the applicable Fronting Bank, appropriately
completed, for the account of the Borrower, at any time and from time to time
while the Revolving Credit Commitments remain in effect. This Section shall not
be construed to impose an obligation upon any Fronting Bank to issue any Letter
of Credit that is inconsistent with the terms and conditions of this Agreement.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. In order to request the issuance of a Letter of Credit (or to amend,
renew or extend an existing Letter of Credit), the Borrower shall give written
or telecopy notice (or telephone notice promptly confirmed by written or
telecopy notice) to the applicable Fronting Bank and the Administrative Agent
(not less than 5 Business Days in advance of the requested date of issuance,
amendment, renewal or extension) requesting the issuance of a Letter of Credit,
or identifying the Letter of Credit to be amended, renewed or extended, the date
of issuance, amendment, renewal or extension, the date on which such Letter of
Credit is to expire (which shall comply with paragraph (c) below), the amount of
such Letter of Credit, the name and address of the beneficiary thereof and such
other information as shall be necessary to prepare such Letter of Credit.
Following receipt of such notice and prior to the issuance of the requested
Letter of Credit or the applicable amendment, renewal or extension, the
Administrative Agent shall, if the conditions set forth in the penultimate
sentence of this paragraph would not be satisfied, notify the Borrower and the
applicable Fronting Bank of the amount of the Aggregate Revolving Credit
Exposure after giving effect to (i) the issuance, amendment, renewal or
extension of such Letter of Credit, (ii) the issuance or expiration of any other
Letter of Credit that is to be issued or
38
will expire prior to the requested date of issuance of such Letter of Credit and
(iii) the borrowing or repayment of any Revolving Credit Loans that (based upon
notices delivered to the Administrative Agent by the Borrower) are to be
borrowed or repaid prior to the requested date of issuance of such Letter of
Credit. A Letter of Credit shall be issued, amended, renewed or extended only
if, and upon issuance, amendment, renewal or extension of each Letter of Credit
the Borrower shall be deemed to represent and warrant that, after giving effect
to such issuance, amendment, renewal or extension (A) the L/C Exposure shall not
exceed $5,000,000 and (B) the Aggregate Revolving Credit Exposure shall not
exceed the Total Revolving Credit Commitment. Promptly upon the issuance,
amendment, renewal or extension of any Letter of Credit, the applicable Fronting
Bank shall notify the Administrative Agent thereof.
(c) Expiration Date. Each Letter of Credit shall expire at the
close of business on the earlier of the date one year after the date of the
issuance of such Letter of Credit and the date that is five Business Days prior
to the Revolving Credit Maturity Date, unless such Letter of Credit expires by
its terms on an earlier date.
(d) Participations. By the issuance of a Letter of Credit and
without any further action on the part of the applicable Fronting Bank or the
Revolving Credit Lenders, the applicable Fronting Bank hereby grants to each
Revolving Credit Lender, and each such Lender hereby acquires from the
applicable Fronting Bank, a participation in such Letter of Credit equal to such
Lender's Applicable Percentage of the aggregate amount available to be drawn
under such Letter of Credit, effective upon the issuance of such Letter of
Credit. In consideration and in furtherance of the foregoing, each Revolving
Credit Lender hereby absolutely and unconditionally agrees to pay to the
Administrative Agent, for the account of the applicable Fronting Bank, such
Lender's Applicable Percentage of each L/C Disbursement made by such Fronting
Bank and not reimbursed by the Borrower (or, if applicable, another party
pursuant to its obligations under any other Loan Document) forthwith on the date
due as provided in Section 2.02(g). Each Revolving Credit Lender acknowledges
and agrees that its obligation to acquire participations pursuant to this
paragraph in respect of Letters of Credit is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including the occurrence
and continuance of a Default or an Event of Default, and that each such payment
shall be made without any offset, abatement, withholding or reduction
whatsoever.
(e) Reimbursement. If a Fronting Bank shall make any L/C
Disbursement in respect of a Letter of Credit, the Borrower shall pay to the
applicable Fronting Bank an amount equal to such L/C Disbursement not later than
two hours after the Borrower shall have received notice from such Fronting Bank
that payment of such draft will be made, or, if the Borrower shall have received
such notice later than 10:00 a.m., New York City time, on any Business Day, not
later than 10:00 a.m., New York City time, on the immediately following Business
Day.
(f) Obligations Absolute. The Borrower's obligations to
reimburse L/C Disbursements as provided in paragraph (e) above shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement, under any and all circumstances
whatsoever, and irrespective of:
(i) any lack of validity or enforceability of any Letter of
Credit or any Loan Document, or any term or provision therein;
39
(ii) any amendment or waiver of or any consent to departure
from all or any of the provisions of any Letter of Credit or any Loan
Document;
(iii) the existence of any claim, setoff, defense or other
right that the Borrower, any other party guaranteeing, or otherwise
obligated with, the Borrower, any Subsidiary or other Affiliate thereof
or any other person may at any time have against the beneficiary under
any Letter of Credit, any Fronting Bank, the Administrative Agent or
any Lender or any other person, whether in connection with this
Agreement, any other Loan Document or any other related or unrelated
agreement or transaction;
(iv) any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any
respect;
(v) payment by the applicable Fronting Bank under a Letter of
Credit against presentation of a draft or other document that does not
comply with the terms of such Letter of Credit; and
(vi) any other act or omission to act or delay of any kind of
any Fronting Bank, any Lender, the Administrative Agent or any other
person or any other event or circumstance whatsoever, whether or not
similar to any of the foregoing, that might, but for the provisions of
this Section, constitute a legal or equitable discharge of the
Borrower's obligations hereunder.
Without limiting the generality of the foregoing, it is
expressly understood and agreed that the absolute and unconditional obligation
of the Borrower hereunder to reimburse L/C Disbursements will not be excused by
the gross negligence or wilful misconduct of any Fronting Bank. However, the
foregoing shall not be construed to excuse such Fronting Bank from liability to
the Borrower to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are hereby waived by the Borrower to the
extent permitted by applicable law) suffered by the Borrower that are caused by
such Fronting Bank's gross negligence or wilful misconduct in determining
whether drafts and other documents presented under a Letter of Credit comply
with the terms thereof; it is understood that the Fronting Banks may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary
and, in making any payment under any Letter of Credit (i) any Fronting Bank's
exclusive reliance on the documents presented to it under such Letter of Credit
as to any and all matters set forth therein, including reliance on the amount of
any draft presented under such Letter of Credit, whether or not the amount due
to the beneficiary thereunder equals the amount of such draft and whether or not
any document presented pursuant to such Letter of Credit proves to be
insufficient in any respect, if such document on its face appears to be in
order, and whether or not any other statement or any other document presented
pursuant to such Letter of Credit proves to be forged or invalid or any
statement therein proves to be inaccurate or untrue in any respect whatsoever
and (ii) any noncompliance in any immaterial respect of the documents presented
under such Letter of Credit with the terms thereof shall, in each case, be
deemed not to constitute wilful misconduct or gross negligence of such Fronting
Bank.
(g) Disbursement Procedures. The applicable Fronting Bank
shall, promptly following its receipt thereof, examine all documents purporting
to represent a demand for payment under a Letter of Credit. Such Fronting Bank
shall as promptly as possible give telephonic notification,
40
confirmed by telecopy, to the Administrative Agent and the Borrower of such
demand for payment and whether such Fronting Bank has made or will make an L/C
Disbursement thereunder; provided that any failure to give or delay in giving
such notice shall not relieve the Borrower of its obligation to reimburse such
Fronting Bank and the Revolving Credit Lenders with respect to any such L/C
Disbursement.
(h) Interim Interest. If a Fronting Bank shall make any L/C
Disbursement in respect of a Letter of Credit, then, unless the Borrower shall
reimburse such L/C Disbursement in full on such date, the unpaid amount thereof
shall bear interest for the account of such Fronting Bank, for each day from and
including the date of such L/C Disbursement, to but excluding the earlier of the
date of payment by the Borrower or the date on which interest shall commence to
accrue thereon as provided in Section 2.02(g), at the rate per annum that would
apply to such amount if such amount were an ABR Loan.
(i) Resignation or Removal of a Fronting Bank. A Fronting Bank
may resign at any time by giving 180 days' prior written notice to the
Administrative Agent, the Lenders and the Borrower, and may be removed at any
time by the Borrower by notice to (a) Fronting Bank, the Administrative Agent
and the Lenders. Subject to the next succeeding paragraph, upon the acceptance
of any appointment as (a) Fronting Bank hereunder by a Lender that shall agree
to serve as successor Fronting Bank, such successor shall succeed to and become
vested with all the interests, rights and obligations of the retiring Fronting
Bank and the retiring Fronting Bank shall be discharged from its obligations to
issue additional Letters of Credit hereunder. At the time such removal or
resignation shall become effective, the Borrower shall pay all accrued and
unpaid fees pursuant to Section 2.05(c)(ii). The acceptance of any appointment
as a Fronting Bank hereunder by a successor Lender shall be evidenced by an
agreement entered into by such successor, in a form satisfactory to the Borrower
and the Administrative Agent, and, from and after the effective date of such
agreement, (i) such successor Lender shall have all the rights and obligations
of the previous Fronting Bank under this Agreement and the other Loan Documents
and (ii) references herein and in the other Loan Documents to the term "Fronting
Bank" shall be deemed to refer to such successor or to any previous Fronting
Bank, or to such successor and all previous Fronting Banks, as the context shall
require. After the resignation or removal of a Fronting Bank hereunder, the
retiring Fronting Bank shall remain a party hereto and shall continue to have
all the rights and obligations of a Fronting Bank under this Agreement and the
other Loan Documents with respect to Letters of Credit issued by it prior to
such resignation or removal, but shall not be required to issue additional
Letters of Credit.
(j) Cash Collateralization. If any Event of Default shall
occur and be continuing, the Borrower shall, on the Business Day it receives
notice from the Administrative Agent or the Required Lenders (or, if the
maturity of the Loans has been accelerated, Revolving Credit Lenders holding
participations in outstanding Letters of Credit representing greater than 50% of
the aggregate undrawn amount of all outstanding Letters of Credit) thereof and
of the amount to be deposited, deposit in an account with the Collateral Agent,
for the benefit of the Revolving Credit Lenders, an amount in cash equal to the
L/C Exposure as of such date. Such deposit shall be held by the Collateral Agent
as collateral for the payment and performance of the Obligations. The Collateral
Agent shall have exclusive dominion and control, including the exclusive right
of withdrawal, over such account. Other than any interest earned on the
investment of such deposits in Permitted Investments, which investments shall be
made at the option and sole discretion of the Collateral Agent, such deposits
shall not bear interest. Interest or profits, if any, on such investments shall
accumulate in such account. Moneys in such account shall (i) automatically be
applied by the Administrative Agent to reimburse the Fronting
41
Banks for L/C Disbursements for which they have not been reimbursed, (ii) be
held for the satisfaction of the reimbursement obligations of the Borrower for
the L/C Exposure at such time and (iii) if the maturity of the Loans has been
accelerated (but subject to the consent of Revolving Credit Lenders holding
participations in outstanding Letters of Credit representing greater than 50% of
the aggregate undrawn amount of all outstanding Letters of Credit), be applied
to satisfy the Obligations. If the Borrower is required to provide an amount of
cash collateral hereunder as a result of the occurrence of an Event of Default,
such amount (to the extent not applied as aforesaid) shall be returned to the
Borrower within three Business Days after all Events of Default have been cured
or waived.
ARTICLE III. REPRESENTATIONS AND WARRANTIES
Each of STFI and the Borrower represents and warrants to the
Administrative Agent, the Collateral Agent, the Fronting Banks and each of the
Lenders that:
SECTION 3.01. Organization; Powers. Each of STFI, the Borrower
and each of the Subsidiaries (a) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (b) has all
requisite power and authority to own its property and assets and to carry on its
business as now conducted and as proposed to be conducted, (c) is qualified to
do business in, and is in good standing in, every jurisdiction where such
qualification is required, except where the failure so to qualify could not
reasonably be expected to result in a Material Adverse Effect, and (d) has the
corporate or partnership power, as the case may be, and authority to execute,
deliver and perform its obligations under each of the Loan Documents, the
Acquisition Documents and each other agreement or instrument contemplated hereby
to which it is or will be a party and, in the case of the Borrower, to borrow
hereunder.
SECTION 3.02. Authorization. The execution, delivery and
performance by each Loan Party of each of the Loan Documents and the Acquisition
Documents, the borrowings hereunder, the Acquisition Transactions and the other
transactions contemplated hereby (collectively, the "Transactions") (a) have
been duly authorized by all requisite corporate and, if required, stockholder
action and (b) will not (i) violate (A) any provision of law, statute, rule or
regulation, or of the certificate or articles of incorporation or other
constitutive documents or by-laws of RHI, FII, STFI, the Borrower or any
Subsidiary, (B) any order of any Governmental Authority or (C) any provision of
any indenture, agreement or other instrument to which RHI, FII, STFI, the
Borrower or any Subsidiary is a party or by which any of them or any of their
property is or may be bound, except for any such violations of agreements not
involving borrowed money or other extensions of credit that could not reasonably
be expected individually or in the aggregate to have any material effect on the
business, assets, operations, prospects or condition, financial or otherwise, of
the Borrower and the Subsidiaries, taken as a whole, or of STFI, or on or prior
to the Closing Date, of the Acquired Business, or on the rights or interests of
the Lenders, (ii) be in conflict with, result in a breach of or constitute
(alone or with notice or lapse of time or both) a default under, or give rise to
any right to accelerate or to require the prepayment, repurchase or redemption
of any obligation under any such indenture, agreement or other instrument,
except, in the case of any agreement not involving borrowed money or any other
extension of credit, such conflicts as could not reasonably be expected
individually or in the aggregate to have any material effect on the business,
assets, operations, prospects or condition, financial or otherwise, of the
Borrower and the Subsidiaries, taken as a whole, or of STFI, or on or prior to
the Closing Date, of the Acquired Business, or on the rights or interests of the
Lenders, or (iii) result in or require the creation or imposition of any Lien
upon or with respect to any property or assets now
42
owned by RHI or FII or now owned or hereafter acquired by STFI, the Borrower or
any Subsidiary (other than any Lien created under the Security Documents).
SECTION 3.03. Enforceability. This Agreement has been duly
executed and delivered by STFI and the Borrower and constitutes, and each other
Loan Document when executed and delivered by each Loan Party party thereto will
constitute, a legal, valid and binding obligation of such Loan Party enforceable
against such Loan Party in accordance with its terms.
SECTION 3.04. Governmental Approvals. No action, consent or
approval of, registration or filing with or any other action by any Governmental
Authority is or will be required in connection with the Transactions, except for
(a) the filing of Uniform Commercial Code financing statements and filings with
the United States Patent and Trademark Office and the United States Copyright
Office and (b) such as have been made or obtained and are in full force and
effect and a state regulatory approval in Indiana the failure to obtain which
could not result in a Material Adverse Effect.
SECTION 3.05. Financial Statements. (a) STFI has heretofore
furnished to the Lenders its consolidated balance sheets and statements of
operations, stockholders' equity and cash flows (a) as of and for the fiscal
years ended December 31, 1994 and December 31, 1993, audited by and accompanied
by the opinions of Rothstein, Kass & Company, P.C., and Arthur Andersen LLP,
independent public accountants, and (b) as of and for the fiscal quarters and
the portion of the fiscal years ended September 30, 1995 and September 30, 1994.
The Borrower has heretofore furnished to the Lenders the consolidated balance
sheets and statements of earnings, stockholders' equity and cash flows of FII
(a) as of and for the fiscal years ended June 30, 1995, and June 30, 1994,
audited and accompanied by the opinion of Arthur Andersen LLP, and (b) as of and
for the fiscal quarters and the portion of the fiscal years ended October 1,
1995, and October 2, 1994. Such financial statements present fairly the
financial condition and results of operations and cash flows of the STFI and FII
and their respective consolidated Subsidiaries as of such dates and for such
periods. Such balance sheets and the notes thereto disclose all material
liabilities, direct or contingent, of the STFI and FII and their respective
consolidated subsidiaries as of the dates thereof. Such financial statements
were prepared in accordance with GAAP applied on a consistent basis.
(b) The Borrower has heretofore delivered to the Lenders the
unaudited pro forma combined balance sheet of STFI dated as of September 30,
1995, giving effect to the Acquisition Transactions as if they had occurred on
such date. Such pro forma balance sheet has been prepared in good faith by the
Borrower, based on the assumptions used to prepare the pro forma financial
information contained in the Confidential Information Memorandum (which
assumptions are believed by STFI and the Borrower on the date hereof and on the
Closing Date to be reasonable), is based on the best information available to
the Borrower as of the date of delivery thereof, accurately reflects all
adjustments required to be made to give effect to the Acquisition Transactions
and presents fairly on a pro forma basis the estimated consolidated financial
position of STFI, the Borrower and their subsidiaries as of September 30, 1995,
assuming that the Acquisition Transactions had actually occurred at September
30, 1995.
(c) The Borrower has delivered to the Lenders complete and
correct copies of the Offering Circular and all amendments, modifications and
supplements thereto.
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SECTION 3.06. No Material Adverse Change. There has been no
material adverse change in the business, assets, operations, prospects,
condition, financial or otherwise, or material agreements of STFI, the Borrower
and the Subsidiaries, taken as a whole, since June 30, 1995 with respect to the
Acquired Business and since December 31, 1994 with respect to STFI,
respectively.
SECTION 3.07. Title to Properties; Possession Under Leases.
(a) Each of STFI, the Borrower and the Subsidiaries has good and marketable
title to, or valid leasehold interests in, all its material properties and
assets, except for minor defects in title that do not interfere with its ability
to conduct its business as currently conducted or to utilize such properties and
assets for their intended purposes. All such material properties and assets are
free and clear of Liens, other than Liens expressly permitted by Section 6.02.
(b) Each of STFI, the Borrower and the Subsidiaries has
complied with all obligations under all material leases to which it is a party
and all such leases are in full force and effect, except for noncompliance which
could not reasonably be expected individually or in the aggregate to have any
material effect on the business, assets, operations, prospects or condition,
financial or otherwise, of the Borrower and the Subsidiaries, taken as a whole,
or of STFI, or on or prior to the Closing Date, of the Acquired Business, or on
the rights or interests of the Lenders. Each of STFI, the Borrower and the
Subsidiaries enjoys peaceful and undisturbed possession under all such material
leases.
SECTION 3.08. Subsidiaries. Schedule 3.08 sets forth as of the
Closing Date a list of all Subsidiaries and the percentage ownership interest of
the Borrower therein after giving effect to the Acquisition Transactions that
shall occur prior to or simultaneously with the initial Credit Event hereunder.
The shares of capital stock or other ownership interests so indicated on
Schedule 3.08 are fully paid and non-assessable and are owned by the Borrower,
directly or indirectly, free and clear of all Liens.
SECTION 3.09. Litigation; Compliance with Laws. (a) Except as
set forth on Schedule 3.09, there are not any actions, suits or proceedings at
law or in equity or by or before any Governmental Authority now pending or, to
the knowledge of STFI or the Borrower, threatened against or affecting STFI or
the Borrower or any Subsidiary or any business, property or rights of any such
person (i) that involve any Loan Document or the Transactions or (ii) as to
which there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect.
(b) None of STFI, the Borrower or any of the Subsidiaries or
any of their respective material properties or assets is in violation of, nor
will the continued operation of their material properties and assets as
currently conducted violate, any law, rule or regulation (including any zoning,
building, Environmental Law, ordinance, code or approval or any building
permits) or any restrictions of record or agreements affecting any of its real
property, or is in default with respect to any judgment, writ, injunction,
decree or order of any Governmental Authority, where such violation or default
could reasonably be expected to result in a Material Adverse Effect.
SECTION 3.10. Agreements. (a) None of STFI, the Borrower or
any of the Subsidiaries is a party to any agreement or instrument or subject to
any corporate restriction that has resulted or could reasonably be expected to
result in a Material Adverse Effect. No tenant service
44
contract to which STFI, the Borrower or any Subsidiary is party contains any
restriction on assignment, and each such contract is under applicable law freely
assignable by STFI, the Borrower and the Subsidiaries, as applicable.
(b) None of STFI, the Borrower or any of the Subsidiaries is
in default in any manner under any provision of any indenture or other agreement
or instrument evidencing Indebtedness, or any other material agreement or
instrument to which it is a party or by which it or any of its properties or
assets are or may be bound, where such default could reasonably be expected to
result in a Material Adverse Effect.
SECTION 3.11. Federal Reserve Regulations. (a) None of STFI,
the Borrower or any of the Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
buying or carrying Margin Stock.
(b) No part of the proceeds of any Loan or any Letter of
Credit will be used, whether directly or indirectly, and whether immediately,
incidentally or ultimately, for any purpose that entails a violation of, or that
is inconsistent with, the provisions of the Regulations of the Board, including
Regulation G, U or X.
SECTION 3.12. Investment Company Act; Public Utility Holding
Company Act. None of STFI, the Borrower or any Subsidiary is (a) an "investment
company" as defined in, or subject to regulation under, the Investment Company
Act of 1940 or (b) a "holding company" as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935.
SECTION 3.13. Use of Proceeds. The Borrower will use the
proceeds of the Loans and will request the issuance of Letters of Credit only
for the purposes specified in the preamble to this Agreement.
SECTION 3.14. Tax Returns. Each of STFI, the Borrower and the
Subsidiaries has filed or caused to be filed all Federal, state, local and
foreign tax returns or materials required to have been filed by it and has paid
or caused to be paid all taxes due and payable by it and all assessments
received by it, except taxes that are being contested in good faith by
appropriate proceedings and for which STFI, the Borrower or such Subsidiary, as
applicable, shall have set aside on its books adequate reserves with respect
thereto in accordance with GAAP and such contest operates to suspend collection
of the contested obligation, tax, assessment or charge and enforcement of a
Lien.
SECTION 3.15. No Material Misstatements. None of the
Confidential Information Memorandum, the Offering Circular or any other
information, report, financial statement, exhibit or schedule furnished by or on
behalf of STFI or the Borrower to the Administrative Agent or any Lender in
connection with the negotiation of any Loan Document or included therein or
delivered pursuant thereto contained, contains or will contain any material
misstatement of fact or omitted, omits or will omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were, are or will be made, not misleading; provided that to the
extent any such information, report, financial statement, exhibit or schedule
was based upon or constitutes a forecast or projection, each of STFI and the
Borrower represents only that it acted in good faith and utilized reasonable
assumptions and due care in the preparation of such information, report,
financial statement, exhibit or schedule.
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SECTION 3.16. Employee Benefit Plans. Each of the Borrower and
its ERISA Affiliates is in compliance in all material respects with the
applicable provisions of ERISA and the Code and the regulations and published
interpretations thereunder. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events,
could reasonably be expected to result in material liability of the Borrower or
any of its ERISA Affiliates. The present value of all benefit liabilities under
each Plan (based on those assumptions used to fund such Plan) did not, as of the
last annual valuation date applicable thereto, exceed by more than $500,000 the
fair market value of the assets of such Plan, and the present value of all
benefit liabilities of all underfunded Plans (based on those assumptions used to
fund each such Plan) did not, as of the last annual valuation dates applicable
thereto, exceed by more than $1,000,000 the fair market value of the assets of
all such underfunded Plans.
SECTION 3.17. Environmental Matters. Except as set forth in
Schedule 3.17:
(a) The properties owned or operated by STFI, the Borrower and
the Subsidiaries (the "Properties") do not contain any Hazardous Materials in
amounts or concentrations which (i) constitute, or constituted a violation of,
or (ii) could give rise to liability under, Environmental Laws, which violations
and liabilities, in the aggregate, could result in a Material Adverse Effect.
(b) The Properties and all operations of the Borrower and the
Subsidiaries are in compliance, and in the last ten years have been in
compliance, with all Environmental Laws and all necessary Environmental Permits
have been obtained and are in effect, except to the extent that such
noncompliance or failure to obtain any necessary permits, in the aggregate,
could not result in a Material Adverse Effect.
(c) There have been no Releases or threatened Releases at,
from, under or proximate to the Properties or otherwise in connection with the
operations of the Borrower or the Subsidiaries, which Releases or threatened
Releases, in the aggregate, could result in a Material Adverse Effect.
(d) None of STFI, the Borrower or any of the Subsidiaries has
received any notice of an Environmental Claim in connection with the Properties
or the operations of the Borrower or the Subsidiaries or with regard to any
person whose liabilities for environmental matters STFI, the Borrower or the
Subsidiaries has retained or assumed, in whole or in part, contractually, by
operation of law or otherwise, which, in the aggregate, could result in a
Material Adverse Effect, nor do STFI, the Borrower or the Subsidiaries have
reason to believe that any such notice will be received or is being threatened.
(e) None of STFI, the Borrower or the Subsidiaries retained or
assumed any liability, contractually, by operation of law or otherwise, with
respect to the generation, treatment, storage or disposal (including off-site
disposal) of Hazardous Materials, which transportation, generation, treatment,
storage or disposal, or retained or assumed liabilities, in the aggregate, could
reasonably be expected to result in a Material Adverse Effect.
SECTION 3.18. Insurance. Schedule 3.18 sets forth a true,
complete and correct description of all insurance maintained by the Borrower, by
the Borrower for its Subsidiaries or by the Subsidiaries as of the date hereof
and the Closing Date. As of each such date, such insurance is in full force and
effect and all premiums have been duly paid. The Borrower and its Subsidiaries
have
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insurance in such amounts and covering such risks and liabilities as are in
accordance with normal industry practice.
SECTION 3.19. Security Documents. (a) The Pledge Agreement is
effective to create in favor of the Collateral Agent, for the ratable benefit of
the Secured Parties, a legal, valid and enforceable security interest in the
Collateral (as defined in the Pledge Agreement) and, when the Collateral is
delivered to the Collateral Agent, the Pledge Agreement shall constitute a fully
perfected first priority Lien on, and security interest in, all right, title and
interest of the pledgors thereunder in such Collateral, in each case prior and
superior in right to any other person.
(b) The Security Agreement is effective to create in favor of
the Collateral Agent, for the ratable benefit of the Secured Parties, a legal,
valid and enforceable security interest in the Collateral (as defined in the
Security Agreement) and, when financing statements in appropriate form are filed
in the offices specified on Schedule 6 to the Perfection Certificate, the
Security Agreement shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the grantors thereunder in such
Collateral to the extent that a Lien may be perfected by filing such financing
statements (other than the Intellectual Property, as defined in the Security
Agreement), in each case prior and superior in right to any other person, other
than with respect to Liens expressly permitted by Section 6.02.
(c) When the Security Agreement is filed in the United States
Patent and Trademark Office and the United States Copyright Office, the Security
Agreement shall constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the grantors thereunder in the Intellectual
Property (as defined in the Security Agreement), in each case prior and superior
in right to any other person (it being understood that subsequent recordings in
the United States Patent and Trademark Office and the United States Copyright
Office may be necessary to perfect a Lien on registered trademarks, trademark
applications and copyrights acquired by the grantors after the date hereof),
other than with respect to Liens expressly permitted by Section 6.02.
SECTION 3.20. Location of Real Property and Leased Premises.
(a) As of the Closing Date, after giving effect to the Acquisition Transactions,
the Borrower and the Subsidiaries do not own any real property.
(b) Schedule 3.20(b) lists completely and correctly as of the
Closing Date all real property leased by the Borrower and the Subsidiaries under
leases having annual rental payments in excess of $35,000 and the locations
thereof. The Borrower and the Subsidiaries have valid leases in all the real
property set forth on Schedule 3.20(b).
SECTION 3.21. Labor Matters. There are no strikes, lockouts or
slowdowns against the Acquired Business, STFI, the Borrower or any Subsidiary
pending or, to the knowledge of STFI or the Borrower, threatened, other than any
strikes which, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. The hours worked by and
payments made to employees of STFI, the Borrower and the Subsidiaries have not
been in violation of the Fair Labor Standards Act or any other applicable
Federal, state, local or foreign law dealing with such matters. All payments due
from STFI, the Borrower or any Subsidiary, or for which any claim may be made
against STFI, the Borrower or any Subsidiary, on account of wages and employee
health and welfare insurance and other benefits, have been paid or accrued as a
liability on the books of STFI, the Borrower or such Subsidiary. The
consummation of the Acquisition Transactions will not give rise to
47
any right of termination or right of renegotiation on the part of any union
under any collective bargaining agreement to which RHI, FII, STFI, the Borrower
or any Subsidiary is bound.
SECTION 3.22. Solvency. Immediately after the consummation of
the Transactions to occur on the Closing Date and immediately following the
making of each Loan made on the Closing Date and after giving effect to the
application of the proceeds of such Loans, (i) the fair value of the assets of
each Loan Party, at a fair valuation, will exceed its debts and liabilities,
subordinated, contingent or otherwise; (ii) the present fair saleable value of
the property of each Loan Party will be greater than the amount that will be
required to pay the probable liability of its debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (iii) each Loan Party will be able to pay its debts
and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (iv) each Loan Party will not have
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted
following the Closing Date.
ARTICLE IV. CONDITIONS OF LENDING
The obligations of the Lenders to make Loans and of the
Fronting Banks to issue Letters of Credit hereunder are subject to the
satisfaction of the following conditions:
SECTION 4.01. All Credit Events. On the date of each
Borrowing, including each Borrowing in which Loans are refinanced with new Loans
as contemplated by Section 2.02(f) and on the date of each issuance of a Letter
of Credit (each such event being called a "Credit Event"):
(a) The Administrative Agent shall have received a notice of
such Borrowing as required by Section 2.03 (or such notice shall have
been deemed given in accordance with Section 2.03) or, in the case of
the issuance of a Letter of Credit, the applicable Fronting Bank and
the Administrative Agent shall have received a notice requesting the
issuance of such Letter of Credit as required by Section 2.22(b).
(b) The representations and warranties set forth in each Loan
Document shall be true and correct in all material respects on and as
of the date of such Credit Event with the same effect as though made on
and as of such date, except to the extent such representations and
warranties expressly relate to an earlier date.
(c) The Borrower and each other Loan Party shall be in
compliance with all the terms and provisions set forth herein and in
each other Loan Document on its part to be observed or performed, and
at the time of and immediately after such Credit Event, no Event of
Default or Default shall have occurred and be continuing.
Each Credit Event shall be deemed to constitute a representation and warranty by
the Borrower on the date of such Credit Event as to the matters specified in
paragraphs (b) and (c) of this Section 4.01.
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SECTION 4.02. First Credit Event. On the Closing Date:
(a) The Administrative Agent shall have received, on behalf of
itself, the Lenders and the Fronting Banks, a favorable written opinion
of (i) Gadsby & Hannah, counsel for STFI and the Borrower,
substantially to the effect set forth in Exhibit I-1 and (ii) each
other opinion listed on Schedule 4.02(a), substantially to the effect
set forth in Exhibit I-2, in each case (A) dated the Closing Date, (B)
addressed to the Administrative Agent, the Lenders and the Fronting
Banks, and (C) covering such other matters relating to the Loan
Documents and the Transactions as the Administrative Agent shall
reasonably request, and STFI and the Borrower hereby request such
counsel to deliver such opinions.
(b) All legal matters incident to this Agreement, the
Borrowings and extensions of credit hereunder and the other Loan
Documents shall be satisfactory to the Lenders, the Fronting Banks and
Cravath, Swaine & Moore, counsel for the Administrative Agent.
(c) The Administrative Agent shall have received (i) a copy of
the certificate or articles of incorporation, including all amendments
thereto, of each Loan Party, certified as of a recent date by the
Secretary of State of the state of its organization, and a certificate
as to the good standing of each Loan Party as of a recent date, from
such Secretary of State; (ii) a certificate of the Secretary or
Assistant Secretary of each Loan Party dated the Closing Date and
certifying (A) that attached thereto is a true and complete copy of the
by-laws of such Loan Party as in effect on the Closing Date and at all
times since a date prior to the date of the resolutions described in
clause (B) below, (B) that attached thereto is a true and complete copy
of resolutions duly adopted by the Board of Directors of such Loan
Party authorizing the execution, delivery and performance of the Loan
Documents to which such person is a party and, in the case of the
Borrower, the borrowings hereunder, and that such resolutions have not
been modified, rescinded or amended and are in full force and effect,
(C) that the certificate or articles of incorporation of such Loan
Party have not been amended since the date of the last amendment
thereto shown on the certificate of good standing furnished pursuant to
clause (i) above, and (D) as to the incumbency and specimen signature
of each officer executing any Loan Document or any other document
delivered in connection herewith on behalf of such Loan Party; (iii) a
certificate of another officer as to the incumbency and specimen
signature of the Secretary or Assistant Secretary executing the
certificate pursuant to (ii) above; and (iv) such other documents as
the Lenders, the Fronting Banks or Cravath, Swaine & Moore, counsel for
the Administrative Agent, may reasonably request.
(d) The Administrative Agent shall have received a
certificate, dated the Closing Date and signed by a Financial Officer
of the Borrower, confirming compliance with the conditions precedent
set forth in paragraphs (b) and (c) of Section 4.01.
(e) The Administrative Agent shall have received all Fees and
other amounts due and payable on or prior to the Closing Date,
including, to the extent invoiced, reimbursement or payment of all
out-of-pocket expenses required to be reimbursed or paid by the
Borrower hereunder or under any other Loan Document.
(f) The Pledge Agreement shall have been duly executed by the
parties thereto and delivered to the Collateral Agent and shall be in
full force and effect, and all the outstanding Capital Stock of the
Borrower and the Subsidiaries other than ATG, ANSI and their
49
subsidiaries shall have been duly and validly pledged thereunder to the
Collateral Agent for the ratable benefit of the Secured Parties and
certificates representing such shares, accompanied by instruments of
transfer and stock powers endorsed in blank, shall be in the actual
possession of the Collateral Agent.
(g) The Security Agreement shall have been duly executed by
the Loan Parties party thereto and shall have been delivered to the
Collateral Agent and shall be in full force and effect on such date and
each document (including each Uniform Commercial Code financing
statement) required by law or reasonably requested by the
Administrative Agent to be filed, registered or recorded in order to
create in favor of the Collateral Agent for the benefit of the Secured
Parties a valid, legal and perfected first-priority security interest
in and lien on the Collateral described in such agreement (subject to
any Lien expressly permitted by Section 6.02) shall have been delivered
to the Collateral Agent.
(h) The Collateral Agent shall have received the results of a
search of the Uniform Commercial Code filings (or equivalent filings)
made with respect to the Loan Parties in the states (or other
jurisdictions) in which the chief executive office of each such person
is located and the other jurisdictions in which Uniform Commercial Code
filings (or equivalent filings) are to be made pursuant to the
preceding paragraph, together with copies of the financing statements
(or similar documents) disclosed by such search, and accompanied by
evidence satisfactory to the Collateral Agent that the Liens indicated
in any such financing statement (or similar document) would be
permitted under Section 6.02 or have been released, except as
contemplated by Section 6.09(k). The Administrative Agent shall have
received duly executed documentation evidencing the termination of (i)
all the security interests granted in the Pledged Stock (as defined in
the Pledge Agreement) and in any other Collateral in connection with
any of the Specified Liabilities or any existing Indebtedness of STFI
and (ii) the credit facility of STFI with State Street Bank and Trust
Company.
(i) The Collateral Agent shall have received a Perfection
Certificate with respect to the Loan Parties dated the Closing Date and
duly executed by a Responsible Officer of the Borrower.
(j) Each of the Parent Guarantee Agreement and the Subsidiary
Guarantee Agreement shall have been duly executed by the parties
thereto, respectively, shall have been delivered to the Collateral
Agent and shall be in full force and effect.
(k) The Indemnity, Subrogation and Contribution Agreement
shall have been duly executed by the parties thereto, shall have been
delivered to the Collateral Agent and shall be in full force and
effect.
(l) The Administrative Agent shall have received a copy of, or
a certificate as to coverage under, the insurance policies required by
Section 5.02 and the applicable provisions of the Security Documents,
each of which policies shall be endorsed or otherwise amended to
include a "standard" or "New York" lender's loss payable endorsement
and to name the Collateral Agent as additional insured, in form and
substance satisfactory to the Administrative Agent.
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(m) All requisite Governmental Authorities and material third
parties shall have approved or consented to the Acquisition
Transactions and the other Transactions to the extent required other
than a state regulatory approval required in Indiana the failure to
obtain which could not result in a Material Adverse Effect, all
applicable appeal periods shall have expired and there shall be no
governmental or judicial action, actual or threatened, that has or
could have a reasonable likelihood of restraining, preventing or
imposing burdensome conditions on the Acquisition Transactions or the
consummation of the other Transactions.
(n) The FII Reorganization, the Merger, the Section 351
Exchange and the other Acquisition Transactions shall have been
consummated prior to or simultaneously with the initial Credit Event
hereunder in accordance with applicable law, the Merger Agreement and
the Exchange Agreement (including the cancellation of preferred stock
contemplated thereby immediately upon the issuance of the Cumulative
Convertible Preferred Stock and the Special Preferred Stock) and as
contemplated by the Offering Circular without any changes not approved
by the Lenders, and otherwise on terms satisfactory to the Lenders.
Each Acquisition Document shall be in form and substance satisfactory
to the Lenders and the Lenders shall be satisfied with all arrangements
for the transfer of employees and services from, or the provision of
services by, STFI to the Subsidiaries.
(o) The Amendments to Charter and Bylaws shall have become
effective prior to or simultaneously with the initial Credit Event
hereunder, and prior to or simultaneously with the initial Credit Event
hereunder STFI shall have issued to RHI (i) the Cumulative Convertible
Preferred Stock with a liquidation preference not in excess of
$25,000,000, (ii) the Special Preferred Stock with an initial
liquidation preference not in excess of $20,000,000 and (iii) not more
than 6,000,000 shares of common stock of STFI, in each case on terms
satisfactory in all respects to the Lenders.
(p) The Discount Notes shall have been issued prior to or
simultaneously with the initial Credit Event hereunder and shall have
an interest rate not in excess of 14% and a maturity not sooner than
the tenth anniversary of the Closing Date and otherwise be on the terms
set forth in the Discount Note Indenture, and the Borrower shall have
received gross proceeds of not less than $115,000,000 therefrom.
(q) The proceeds of the Term Loans and, to the extent
thereafter required, the net proceeds of Discount Notes shall be
applied simultaneously with the initial Credit Event hereunder to
discharge in full all the Specified Liabilities and, immediately after
giving effect to the Acquisition Transactions (i) STFI, the Borrower
and the Subsidiaries shall have outstanding no Indebtedness other than
the Loans, the Discount Notes and the Indebtedness of STFI for borrowed
money as set forth on Schedule 6.01(a) in an aggregate principal amount
not in excess of $4,000,000, (ii) STFI shall not have outstanding any
equity interests other than common stock of STFI existing on the date
hereof and the Capital Stock of STFI issued to RHI in the Acquisition
Transactions, as contemplated by paragraph (o) above, and (iii) the
Borrower shall not have outstanding any equity interests other than
common stock owned by STFI and pledged to secure the Obligations.
(r) The Tender Offer shall have been consummated prior to or
simultaneously with the initial Credit Event hereunder and all the FII
Senior Notes shall have been tendered and repaid in accordance with the
terms thereof.
51
(s) The Lenders shall have received a satisfactory pro forma
consolidated balance sheet of STFI as of September 30, 1995, together
with a certificate of a Financial Officer of the Borrower to the effect
that such pro forma balance sheet fairly presents the pro forma
financial position of STFI, the Borrower, the Subsidiaries and the
Acquired Business in accordance with GAAP, and the Lenders shall be
satisfied that such balance sheet and the Acquisition Transactions and
the financing arrangements contemplated hereby are consistent with the
sources and uses shown in the Confidential Information Memorandum and
are not materially inconsistent with the information or projections and
the financial model contained in the Confidential Information
Memorandum.
(t) The Lenders shall have received a solvency letter from
Corporate Valuation Advisors Inc. in form and substance satisfactory to
the Lenders, as to the solvency of STFI, the Borrower, the Subsidiaries
and the Acquired Business on a consolidated basis after giving effect
to the Acquisition Transactions and the consummation of the other
Transactions contemplated hereby.
ARTICLE V. AFFIRMATIVE COVENANTS
Each of STFI and the Borrower covenants and agrees with each
Lender that so long as this Agreement shall remain in effect and until the
Commitments have been terminated and the principal of and interest on each Loan,
all Fees and all other expenses or amounts payable under any Loan Document shall
have been paid in full and all Letters of Credit have been canceled or have
expired and all amounts drawn thereunder have been reimbursed in full, unless
the Required Lenders shall otherwise consent in writing, each of STFI and the
Borrower will, and will cause each of the Subsidiaries to:
SECTION 5.01. Existence; Businesses and Properties. (a) Do or
cause to be done all things necessary to preserve, renew and keep in full force
and effect its legal existence, except as otherwise expressly permitted under
Section 6.05.
(b) Do or cause to be done all things necessary to obtain,
preserve, renew, extend and keep in full force and effect the rights, licenses,
permits, franchises, authorizations, patents, copyrights, trademarks and trade
names material to the conduct of its business; maintain and operate such
business in substantially the manner in which it is presently conducted and
operated; comply in all material respects with all applicable laws, rules,
regulations (including any zoning, building, Environmental and Safety Law,
ordinance, code or approval or any building permits or any restrictions of
record or agreements affecting any of its real property) and decrees and orders
of any Governmental Authority, whether now in effect or hereafter enacted; and
at all times maintain and preserve all property material to the conduct of such
business and keep such property in good repair, working order and condition and
from time to time make, or cause to be made, all needful and proper repairs,
renewals, additions, improvements and replacements thereto necessary in order
that the business carried on in connection therewith may be properly conducted
at all times.
SECTION 5.02. Insurance. Keep its insurable properties
adequately insured at all times by financially sound and reputable insurers;
maintain such other insurance, to such extent and against such risks, including
fire and other risks insured against by extended coverage, as is customary with
companies in the same or similar businesses operating in the same or similar
locations, including
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public liability insurance against claims for personal injury or death or
property damage occurring upon, in, about or in connection with the use of any
properties owned, occupied or controlled by it; and maintain such other
insurance as may be required by law.
SECTION 5.03. Obligations and Taxes. Pay its Indebtedness and
other obligations promptly and in accordance with their terms and pay and
discharge promptly when due all taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits or in respect of its
property, before the same shall become delinquent or in default, as well as all
lawful claims for labor, materials and supplies or otherwise that, if unpaid,
might give rise to a Lien upon such properties or any part thereof; provided,
however, that such payment and discharge shall not be required with respect to
any such tax, assessment, charge, levy or claim so long as the validity or
amount thereof shall be contested in good faith by appropriate proceedings and
the Borrower shall have set aside on its books adequate reserves with respect
thereto in accordance with GAAP and such contest operates to suspend collection
of the contested obligation, tax, assessment or charge and enforcement of a
Lien.
SECTION 5.04. Financial Statements, Reports, etc. Furnish to
the Administrative Agent and each Lender:
(a) within 90 days after the end of each fiscal year,
consolidated and consolidating balance sheets and related statements of
operations, stockholders' equity and cash flows showing the financial
condition of STFI, the Borrower and the Subsidiaries as of the close of
such fiscal year and the results of operations of STFI, the Borrower
and the Subsidiaries during such year, all audited by a big six
accounting firm or other independent public accountants of recognized
national standing acceptable to the Required Lenders and accompanied by
an opinion of such accountants (which shall not be qualified in any
material respect) to the effect that such consolidated financial
statements fairly present the financial condition and results of
operations of STFI, the Borrower and the Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied;
(b) within 45 days after the end of each of the first three
fiscal quarters of each fiscal year, consolidated and consolidating
balance sheets and related statements of operations, stockholders'
equity and cash flows showing the financial condition STFI, the
Borrower and the Subsidiaries as of the close of such fiscal quarter
and the results of operations of STFI, the Borrower and the
Subsidiaries during such fiscal quarter and the then elapsed portion of
the fiscal year, all certified by a Financial Officer of STFI or the
Borrower as fairly presenting the financial condition and results of
operations of STFI, the Borrower and the Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied, subject to normal
year-end audit adjustments;
(c) (i) concurrently with any delivery of financial statements
under paragraph (a) or (b) above (but no later than the date on which
such statements are due), a certificate of the accounting firm or
Financial Officer opining on or certifying such statements (which
certificate, when furnished by an accounting firm, may be limited to
accounting matters and disclaim responsibility for legal
interpretations) (A) certifying that no Event of Default or Default has
occurred or, if such an Event of Default or Default has occurred,
specifying the nature and extent thereof and any corrective action
taken or proposed to be taken with respect thereto and (B) setting
forth computations in reasonable detail satisfactory to the
Administrative
53
Agent demonstrating compliance with the covenants contained in Sections
6.11, 6.12, 6.13, 6.14 and 6.15 and (ii) within 45 days after the end
of each fiscal year, a certificate of a Financial Officer certifying as
to the matters set forth in clauses (A) and (B) above;
(d) promptly after the same become publicly available, copies
of all periodic and other reports, proxy statements and other materials
filed by STFI, the Borrower or any Subsidiary with the Securities and
Exchange Commission, or any Governmental Authority succeeding to any or
all of the functions of such Commission, or with any national
securities exchange, or distributed to its shareholders, as the case
may be;
(e) concurrently with the delivery of financial statements
under paragraph (a) or (b) above, a balance sheet and related
statements of operations, stockholders' equity and cash flows for each
Unrestricted Subsidiary and each STFI Unrestricted Subsidiary for the
applicable period;
(f) within 45 days after the end of each month, a certificate
of a Financial Officer of the Borrower reporting revenues and EBITDA
for such month and containing statements of operations and cash flows
for such month and a comparison of actual results with planned results
for such month;
(g) upon the earlier of (i) 90 days after the end of each
fiscal year of the Borrower and (ii) the date on which the financial
statements in respect of such period are delivered pursuant to
paragraph (a) above, a certificate of a Financial Officer of the
Borrower (A) setting forth, in reasonable detail, an operating and
capital expenditure budget for the succeeding fiscal year and (B)
setting forth the insurance policies of STFI, the Borrower and the
Subsidiaries and evidencing compliance with Section 5.02 and the
applicable provisions of the Security Documents;
(h) promptly following the creation or acquisition of any
Subsidiary, a certificate from a Responsible Officer of STFI or the
Borrower, identifying such new Subsidiary and the ownership interest of
the Borrower or any Subsidiary therein;
(i) promptly, a copy of all reports submitted in connection
with any material interim or special audit made by independent
accountants of the books of STFI, the Borrower or any Subsidiary; and
(j) promptly, from time to time, such other information
regarding the operations, business affairs and financial condition of
STFI, the Borrower and the Subsidiaries, or compliance with the terms
of any Loan Document, or such consolidating financial statements, or
such financial statements showing the results of operations of any
Unrestricted Subsidiary or any STFI Unrestricted Subsidiary, as in each
case the Administrative Agent or any Lender may reasonably request.
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SECTION 5.05. Litigation and Other Notices. Furnish to the
Administrative Agent, the Fronting Banks and each Lender prompt written notice
of the following:
(a) any Event of Default or Default, specifying the nature and
extent thereof and the corrective action (if any) taken or proposed to
be taken with respect thereto;
(b) the filing or commencement of, or any threat or notice of
intention of any person to file or commence, any action, suit or
proceeding, whether at law or in equity or by or before any
Governmental Authority, against the Borrower or any Affiliate thereof
that could reasonably be expected to result in a Material Adverse
Effect;
(c) the loss, suspension or other material impairment of any
material FCC license or any other material approval, certification or
authorization of any Governmental Authority; and
(d) any development that has resulted in, or could reasonably
be expected to result in, a Material Adverse Effect.
SECTION 5.06. Employee Benefits. (a) Comply in all material
respects with the applicable provisions of ERISA and the Code and (b) furnish to
the Administrative Agent (i) as soon as possible after, and in any event within
10 days after any Responsible Officer of the Borrower or any ERISA Affiliate
knows or has reason to know that, any ERISA Event has occurred that, alone or
together with any other ERISA Event could reasonably be expected to result in
liability of the Borrower in an aggregate amount exceeding $1,000,000 or
requiring payments exceeding $500,000 in any year, a statement of a Financial
Officer of the Borrower setting forth details as to such ERISA Event and the
action, if any, that the Borrower proposes to take with respect thereto.
SECTION 5.07. Maintaining Records; Access to Properties and
Inspections. Keep proper books of record and account in which full, true and
correct entries in conformity with GAAP and all requirements of law are made of
all dealings and transactions in relation to its business and activities. Each
Loan Party will, and will cause each of its subsidiaries (except, other than
during the continuance of an Event of Default, in the case of the Borrower, the
Unrestricted Subsidiaries and, in the case of STFI, the STFI Unrestricted
Subsidiaries) to, permit any representatives designated by the Administrative
Agent or any Lender to visit and inspect the financial records and the
properties of STFI, the Borrower or any Subsidiary at reasonable times and as
often as reasonably requested and to make extracts from and copies of such
financial records, and permit any representatives designated by the
Administrative Agent or any Lender to discuss the affairs, finances and
condition of STFI, the Borrower or any Subsidiary with the officers thereof and
independent accountants therefor.
SECTION 5.08. Use of Proceeds. Use the proceeds of the Loans
and request the issuance of Letters of Credit only for the purposes set forth in
the preamble to this Agreement.
SECTION 5.09. Compliance with Environmental Laws. Comply, and
cause all lessees and other persons occupying its Properties to comply, in all
material respects with all Environmental Laws and Environmental Permits
applicable to their respective operations and Properties; obtain and renew all
material Environmental Permits necessary for their respective operations and
Properties; conduct any Remedial Action in accordance with Environmental Laws;
and provide the Administrative Agent with prompt written notice of any
Environmental Claim that could reasonably be expected to result in material
liability.
55
SECTION 5.10. Preparation of Environmental Reports. If a
Default caused by reason of a breach of Section 3.17 or 5.09 shall have occurred
and be continuing, at the request of the Required Lenders through the
Administrative Agent, provide to the Lenders within 45 days after such request,
at the expense of the Borrower, an environmental site assessment report for the
Properties which are the subject of such default prepared by an environmental
consulting firm acceptable to the Administrative Agent and indicating the
presence or absence of Hazardous Materials and the estimated cost of any
compliance or Remedial Action in connection with such Properties.
SECTION 5.11. Further Assurances. Execute any and all further
documents, financing statements, agreements and instruments, and take all
further action (including filing Uniform Commercial Code and other financing
statements, mortgages and deeds of trust) that may be required under applicable
law, or that the Required Lenders, the Administrative Agent or the Collateral
Agent may reasonably request, in order to effectuate the transactions
contemplated by the Loan Documents and in order to grant, preserve, protect and
perfect the validity and first priority of the security interests created or
intended to be created by the Security Documents. In addition, from time to
time, STFI, the Borrower and the Subsidiaries will, at their cost and expense,
on or promptly (but in any event within 10 Business Days) following the date of
acquisition or formation by STFI, the Borrower or any Subsidiary of any new
subsidiary (subject to the receipt of required consents from Governmental
Authorities and, in the case of Unrestricted Subsidiaries and STFI Unrestricted
Subsidiaries, consents of other third parties), promptly secure the Obligations
by causing the following to occur: (i) promptly upon creating or acquiring any
additional subsidiary, the Capital Stock of such subsidiary will (unless such
subsidiary is a subsidiary of an Unrestricted Subsidiary or a subsidiary of an
STFI Unrestricted Subsidiary) be pledged pursuant to the Pledge Agreement and
(ii) such subsidiary will (unless such subsidiary is an Unrestricted Subsidiary
or an STFI Unrestricted Subsidiary) become a party to the Security Agreement,
the Pledge Agreement (if such subsidiary owns Capital Stock of any subsidiary),
the Subsidiary Guarantee Agreement and the Indemnity, Subrogation and
Contribution Agreement as contemplated under each such agreement and will, if
such subsidiary owns any material real property, enter into and deliver to the
Collateral Agent a first mortgage in respect of such property in form reasonably
satisfactory to the Collateral Agent and pay all recording taxes, title
insurance costs, survey costs and other costs in connection with such mortgage.
STFI and the Borrower further agree that, upon receipt of notice from the
Administrative Agent requesting a first mortgage in respect of any real property
or leasehold interest of STFI, the Borrower or any Subsidiary, STFI and the
Borrower will, and will cause the Subsidiaries to, at their sole cost, promptly
deliver to the Collateral Agent each such mortgage in a form reasonably
satisfactory to the Collateral Agent and pay all recording taxes, title
insurance costs, survey costs and other costs in connection with each such
mortgage. All such security interests and Liens will be created under the
Security Documents and other instruments and documents in form and substance
reasonably satisfactory to the Collateral Agent, and STFI, the Borrower and the
Subsidiaries shall deliver or cause to be delivered to the Administrative Agent
all such instruments and documents (including legal opinions and lien searches)
as the Required Lenders shall reasonably request to evidence compliance with
this Section 5.11. STFI and the Borrower agree to provide, and to cause each
Subsidiary to provide, such evidence as the Collateral Agent shall reasonably
request as to the perfection and priority status of each such security interest
and Lien. STFI and Borrower will, and will cause their Subsidiaries to, use
their best efforts to take all actions and obtain all approvals required to
permit the pledge under the Pledge Agreement of all the equity interests in ATG,
ANSI and their subsidiaries and to permit ATG, ANSI and their subsidiaries to
become Guarantors, Grantors under the Security Agreement and Pledgors under the
Pledge Agreement, and immediately upon the taking of all required action and
receipt of all required approvals in respect of any of them, cause the equity
56
interests in such person to be pledged under the Pledge Agreement and cause such
person to become a Guarantor, a Grantor under the Security Agreement and a
Pledgor under the Pledge Agreement.
SECTION 5.12. Fiscal Year. Cause its fiscal year to end on
December 31.
SECTION 5.13. Interest Rate Protection Agreements. In the case
of the Borrower, as promptly as practicable and in any event within 90 days
after the Closing Date, enter into, and thereafter maintain in effect, one or
more Interest Rate Protection Agreements with any of the Lenders or other
financial institutions reasonably satisfactory to the Administrative Agent, the
effect of which shall be to limit for the 3-year period commencing on the date
such Interest Rate Protection Agreements are entered into the interest payable
in connection with Indebtedness having an aggregate outstanding principal amount
equal to not less than 50% of the aggregate principal amount of the Term
Borrowings outstanding at the time such Interest Rate Protection Agreements are
entered into to a maximum rate and on terms and conditions otherwise reasonably
acceptable, taking into account then current market conditions, to the
Administrative Agent, and deliver evidence of the execution and delivery thereof
to the Administrative Agent.
SECTION 5.14. Corporate Identity. Do or cause to be done (or
refrain from doing or causing to be done, as the case may be) all things
necessary to ensure that the separate legal identity of the Borrower will at all
times be respected and that neither the Borrower nor any of the Subsidiaries
will be liable for any obligations, contractual or otherwise, of STFI or any
other entity in which STFI owns any equity interest, except as permitted under
Section 6.06 or Section 6.07 or pursuant to any Loan Document. Without limiting
the foregoing, the Borrower and STFI will (a) observe, and cause the
Subsidiaries to observe, all requirements, procedures and formalities necessary
or advisable in order that the Borrower will for all purposes be considered a
validly existing corporation separate and distinct from STFI and its other
subsidiaries, (b) not permit any commingling of the assets of STFI or any of its
other subsidiaries with assets of the Borrower or any Subsidiary which would
prevent the assets of STFI or any of its subsidiaries from being readily
distinguished from the assets of the Borrower and the Subsidiaries and (c) take
reasonable and customary actions to ensure that creditors of STFI and its other
subsidiaries are aware that each such person is an entity separate and distinct
from the Borrower and the Subsidiaries.
ARTICLE VI. NEGATIVE COVENANTS
Each of STFI and the Borrower covenants and agrees with each
Lender that, so long as this Agreement shall remain in effect and until the
Commitments have been terminated and the principal of and interest on each Loan,
all Fees and all other expenses or amounts payable under any Loan Document have
been paid in full and all Letters of Credit have been cancelled or have expired
and all amounts drawn thereunder have been reimbursed in full, unless the
Required Lenders shall otherwise consent in writing, neither STFI nor the
Borrower will, nor will they cause or permit any of the Subsidiaries to:
SECTION 6.01. Indebtedness. Incur, create, assume or permit to
exist any Indebtedness, except:
(a) Indebtedness for borrowed money existing on the date
hereof and set forth in Schedule 6.01(a);
57
(b) Indebtedness created hereunder;
(c) in the case of the Borrower, Discount Notes and Discount
Exchange Notes having an aggregate Accreted Value at any time not in
excess of the Discount Note Value at such time;
(d) in the case of the Guarantors, the guarantees under the
Guarantee Agreements and the Discount Note Guarantees;
(e) in the case of the Borrower, Indebtedness under the
Interest Rate Protection Agreements entered into in accordance with
Section 5.13;
(f) Capital Lease Obligations, mortgage financings and
purchase money Indebtedness in an aggregate principal amount
outstanding at any time not in excess of $2,000,000 incurred by the
Borrower or any Subsidiary prior to or within 270 days after a Capital
Expenditure in order to finance such Capital Expenditure and secured
only by the assets that are the subject of such Capital Expenditure,
and extensions, renewals and refinancings thereof if the interest rate
with respect thereto and other terms thereof are no less favorable to
the Borrower or such Subsidiary than the Indebtedness being refinanced
and the average life to maturity thereof is greater than or equal to
that of the Indebtedness being refinanced; provided, however, that such
refinancing Indebtedness shall not be (i) Indebtedness of an obligor
that was not an obligor with respect to the Indebtedness being
extended, renewed or refinanced, (ii) in a principal amount that
exceeds the Indebtedness being renewed, extended or refinanced or (iii)
incurred, created or assumed if any Default or Event of Default has
occurred and is continuing or would result therefrom;
(g)Indebtedness of the Borrower or any wholly owned Subsidiary
to any Subsidiary or the Borrower; and
(h) all premium (if any), interest, fees, expenses,
indemnities, charges and additional or contingent interest on
obligations described in clauses (a) through (g) above.
SECTION 6.02. Liens. Create, incur, assume or permit to exist
any Lien on any property or assets (including stock or other securities of any
person, including any Subsidiary) now owned or hereafter acquired by it or on
any income or revenues or rights in respect of any thereof, or assign or
transfer any income or revenues or rights in respect thereof, except:
(a) Liens on property or assets of the Borrower and its
Subsidiaries existing on the date hereof and set forth in Schedule
6.02; provided that such Liens shall secure only those obligations
which they secure on the date hereof;
(b) any Lien created under the Loan Documents;
(c) Liens consisting of interests of lessors under capital
leases permitted by Section 6.01(f);
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(d) Liens for taxes not yet due or which are being contested
in compliance with Section 5.03;
(e) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business and securing obligations that are not due and payable or that
are being contested in compliance with Section 5.03;
(f) pledges and deposits made in the ordinary course of
business in compliance with workmen's compensation, unemployment
insurance and other social security laws or regulations;
(g) deposits to secure the performance of bids, trade
contracts (other than for Indebtedness), leases (other than Capital
Lease Obligations), statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in
the ordinary course of business;
(h) zoning restrictions, easements, rights-of-way,
restrictions on use of real property and other similar encumbrances
incurred in the ordinary course of business which, in the aggregate,
are not substantial in amount and do not materially detract from the
value of the property subject thereto or interfere with the ordinary
conduct of the business of the Borrower or any of its Subsidiaries; and
(i) other Liens with respect to property or assets not
constituting collateral for the Obligations with an aggregate fair
market value of not more than $2,000,000 at any time.
SECTION 6.03. Sale and Lease-Back Transactions. Enter into any
arrangement, directly or indirectly, with any person whereby it shall sell or
transfer any property, real or personal, used or useful in its business, whether
now owned or hereafter acquired, and thereafter rent or lease such property or
other property which it intends to use for substantially the same purpose or
purposes as the property being sold or transferred.
SECTION 6.04. Investments, Loans and Advances. Purchase, hold
or acquire any capital stock, evidences of indebtedness or other securities of,
make or permit to exist any loans or advances to, or make or permit to exist any
investment or any other interest in, any other person, except:
(a) investments (i) by the Borrower existing on the date
hereof in the Capital Stock of the Subsidiaries and STC, or (ii) by
STFI in the Capital Stock of the Borrower;
(b) Permitted Investments and investments that were Permitted
Investments when made;
(c) in the case of the Borrower, Interest Rate Protection
Agreements entered into in accordance with Section 5.13;
(d)intercompany loans permitted to be incurred as Indebtedness
under Section 6.01(g);
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(e) (i) loans and advances to employees of STFI, the Borrower
or the Subsidiaries not to exceed $1,000,000 in the aggregate at any
time outstanding and (ii) advances of payroll payments and expenses to
employees in the ordinary course of business;
(f) (i) accounts receivable arising and trade credit granted
in the ordinary course of business and any securities received in
satisfaction or partial satisfaction thereof from financially troubled
account debtors to the extent reasonably necessary in order to prevent
or limit loss and (ii) prepayments and other credits to suppliers made
in the ordinary course of business consistent with the past practices
of the Acquired Business, STFI, the Borrower and the Subsidiaries;
(g) investments, other than investments listed in paragraphs
(a) through (f) of this Section, existing on the Closing Date and set
forth on Schedule 6.04;
(h) ownership interests in Unrestricted Subsidiaries, provided
that the capitalization requirement set forth in clause (vii) of the
definition of "Unrestricted Subsidiary" shall at all times be
satisfied;
(i) in the case of STFI, ownership interests in STFI
Unrestricted Subsidiaries, provided that the capitalization requirement
set forth in clause (g) of the definition of "STFI Unrestricted
Subsidiary" shall at all times be satisfied;
(j) investments in any fiscal year in Permitted Business
Acquisitions funded solely with funds described in clause (g)(iii) of
the definition of "STFI Unrestricted Subsidiary" and available in such
fiscal year as set forth in such clause (iii), subject to the
limitation set forth in the parenthetical set forth at the end of such
clause (iii); and
(k) other investments in Permitted Business Acquisitions,
provided that the aggregate amount of consideration (whether cash or
property, as valued at the time each such investment is made) for all
investments made in Permitted Business Acquisitions under this
paragraph (k) shall not exceed $3,500,000 for any fiscal year (of which
not more than $2,500,000 may be in the form of cash) and shall not
exceed $12,500,000 for the period following the Closing Date.
SECTION 6.05. Mergers, Consolidations, Sales of Assets and
Acquisitions. Merge into or consolidate with any other person, or permit any
other person to merge into or consolidate with it, or sell, transfer, lease or
otherwise dispose of (in one transaction or in a series of transactions) all or
any substantial part of its assets (whether now owned or hereafter acquired),
other than assets of the Borrower constituting an Unrestricted Subsidiary, or
any Capital Stock of any Subsidiary or purchase, lease or otherwise acquire (in
one transaction or a series of transactions) all or any substantial part of the
assets of any other person, except that (a) the Borrower and any Subsidiary may
purchase and sell inventory in the ordinary course of business, (b) if at the
time thereof and immediately after giving effect thereto no Event of Default or
Default shall have occurred and be continuing any wholly owned Subsidiary may
merge into or consolidate with any other wholly owned Subsidiary in a
transaction in which the surviving entity is a wholly owned Subsidiary and no
person other than the Borrower or a wholly owned Subsidiary receives any
consideration, (c) the Borrower and the Subsidiaries may acquire Permitted
Business Acquisitions and other investments permitted by Section 6.04 and (d)
the Subsidiaries may sell, lease or otherwise dispose of property for cash
consideration equal to the fair market value of the asset sold, leased or
otherwise disposed of, provided that (i) the Net Proceeds
60
thereof are applied in accordance with Section 2.13(b), (ii) the aggregate
consideration received in respect of all transactions under this clause (d)
shall not exceed $1,000,000 in any fiscal year and (iii) no sale may be made of
the Capital Stock (or any warrant, right, or option to purchase any and Capital
Stock or any security convertible into or exchangeable for any such Capital
Stock) of any Subsidiary.
SECTION 6.06. Dividends and Distributions; Restrictions on
Ability of Subsidiaries to Pay Dividends. (a) Declare or pay, directly or
indirectly, any dividend or make any other distribution (by reduction of capital
or otherwise), whether in cash, property, securities or a combination thereof,
with respect to any shares of its Capital Stock or directly or indirectly
redeem, purchase, retire or otherwise acquire for value (or permit any
Subsidiary to purchase or acquire) any shares of any class of its Capital Stock
or set aside any amount for any such purpose; provided, however, that (i) any
Subsidiary may declare and pay dividends or make other distributions to the
Borrower or to any wholly owned Subsidiary, and (ii) so long as immediately
after giving effect to such payment or distribution, no Event of Default or
Default shall have occurred and be continuing and the Borrower shall be in
compliance, on a pro forma basis, with the covenants contained in Sections 6.11,
6.12, 6.13, 6.14 and 6.15 recomputed as of the last day of the most recently
ended fiscal quarter of the Borrower as if such payment or distribution were
made on the first day of each relevant period for testing compliance, the
Borrower may declare and pay dividends or make other distributions to STFI (A)
in an aggregate amount not in excess of $1,500,000 in any fiscal year, to be
used by STFI to pay dividends on the Cumulative Convertible Preferred Stock, (B)
to fund the payment by STFI of tax liabilities, legal, accounting and other
professional fees and expenses, compensation, fees and expenses of the board of
directors of STFI and fees and expenses associated with registration statements
filed with the Securities and Exchange Commission and subsequent ongoing public
reporting requirements, in each case to the extent actually incurred by STFI in
connection with the business of its ownership of the Capital Stock of the
Borrower, (C) in an aggregate amount not in excess of $400,000 in any fiscal
year, to be used by STFI to pay dividends on its Series C Preferred Stock and on
its Series D Preferred Stock, (D) solely to the extent a portion of Excess Cash
Flow for the most recently ended fiscal year not subject to the mandatory
prepayments in accordance with Section 2.13(c) is available for such purpose, to
make mandatory redemptions required under Section 5(c) of the Certificate of
Designation in respect of the Special Preferred Stock and (E) solely to the
extent funds described in clauses (A) or (B) of clause (g)(iii) of the
definition of "STFI Unrestricted Subsidiary" are available in such fiscal year
as set forth in such clause (iii), subject to the limitation set forth in the
parenthetical set forth at the end of such clause (iii), to be used by STFI to
pay dividends on any of its Capital Stock; provided further, that no payment may
be made under clause (A) or clause (D) above at any time that there shall have
been outstanding for 30 days or more any amount due and payable by STFI in
excess of $100,000 in respect of any liability purported to have been assumed by
any person other than STFI in the Acquisition Transactions. This paragraph (a)
shall not constitute a restriction on the payment of dividends on any of the
preferred stock cancelled upon the exchange set forth in the Exchange Agreement,
all of which preferred stock shall have been cancelled on or prior to the
initial Credit Event hereunder as required under Section 4.02(n).
(b) Permit any subsidiary to, directly or indirectly, create
or otherwise cause or suffer to exist or become effective any encumbrance or
restriction on the ability of any such Subsidiary to (i) pay any dividends or
make any other distributions on its Capital Stock or any other equity interest
or (ii) make or repay any loans or advances to the Borrower or the parent of
such Subsidiary.
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SECTION 6.07. Transactions with Affiliates. Sell or transfer
any property or assets to, or purchase or acquire any property or assets from,
or otherwise engage in any other transactions with, any of its Affiliates,
except that the Borrower or any Subsidiary may engage in any of the foregoing
transactions in the ordinary course of business at prices and on terms and
conditions not less favorable to the Borrower or such Subsidiary than could be
obtained on an arm's-length basis from unrelated third parties, provided that
the foregoing shall not prohibit any issuance of securities of STFI or other
awards, payments or grants in cash, securities or otherwise pursuant to, or the
funding of, employment agreements, stock options and stock ownership plans
approved by the Board of Directors of STFI.
SECTION 6.08. Business of STFI, the Borrower and the
Subsidiaries. Engage at any time in any business or business activity other than
(a) in the case of STFI, the ownership of all the Capital Stock of the Borrower,
the ownership of STFI Unrestricted Subsidiaries, the ownership of Permitted
Business Acquisitions permitted under Section 6.04(j), the ownership of the
general partnership interest in Financial Place Communications Company owned by
STFI on the date hereof, the ownership of Capital Stock of STC and the ownership
of certain contracts of STFI owned on the Closing Date after giving effect to
the Acquisition Transactions, (b) in the case of the Borrower, being party to
tenant service contracts and the ownership of Capital Stock of the Subsidiaries
and the Unrestricted Subsidiaries and business activities reasonably incidental
thereto and (c) in the case of the Subsidiaries, the business currently
conducted by STFI and its subsidiaries or by the Acquired Business and business
activities reasonably incidental thereto.
SECTION 6.09. Other Indebtedness and Agreements. (a) Permit
any waiver, supplement, modification, amendment, termination or release of (i)
the Discount Notes, the Discount Note Indenture, the Discount Exchange Notes or
the Discount Note Guarantees, (ii) the Merger Agreement, (iii) the Charter and
Bylaws of STFI, as amended by the Amendments to Charter and Bylaws, (iv) the
Certificates of Designation, (v) any other instrument or agreement (other than
the Loan Documents) pursuant to which any other Indebtedness of STFI, the
Borrower or any Subsidiary is outstanding in an aggregate principal amount in
excess of $1,000,000 or (vi) any other material agreement of STFI, the Borrower
or any Subsidiary, including the other Acquisition Documents.
(b) Directly or indirectly, make any distribution or payment,
whether in cash, property, securities or a combination thereof, other than
scheduled payments of principal and interest as and when due (to the extent not
prohibited by applicable subordination provisions), in respect of, or pay, or
offer to commit to pay, or directly or indirectly redeem, repurchase, retire or
otherwise acquire for consideration (or set apart any sum for the aforesaid
purposes), or prepay or defease, any Indebtedness of STFI, the Borrower or any
of the Subsidiaries (other than Indebtedness under the Loan Documents) prior to
the stated maturity date of such Indebtedness, except in any fiscal year to the
extent funds described in clause (A) of clause (g)(iii) of the definition of
"STFI Unrestricted Subsidiary" are available in such fiscal year as set forth in
such clause (iii), subject to the limitation set forth in the parenthetical set
forth at the end of such clause (iii), such funds may be used to prepay Discount
Notes or Discount Exchange Notes.
(c) Permit any agreement of STFI, the Borrower or any of the
Subsidiaries to include any provision that would allow the counterparty to
offset against its obligations under such agreement the obligations owing by
such counterparty to STFI, the Borrower or any of the Subsidiaries under any
other agreement.
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(d) Permit any agreement of the Borrower or any Subsidiary to
include a restriction on the assignment of such agreement based on any change in
control or similar provisions.
(e) Make any cash payment on or in respect of the Discount
Notes or the Discount Exchange Notes at any time that a cash payment is not
required to be made.
(f) Permit the Borrower to issue any Capital Stock, or permit
any Subsidiary to issue any Capital Stock other than to the Borrower or a wholly
owned Subsidiary.
(g) Provide any management or service to any Unrestricted
Subsidiary or any STFI Unrestricted Subsidiary except in consideration of cash
remuneration in an amount not less than could have been obtained from a third
party on an arm's length basis.
(h) Designate any Indebtedness as "Designated Senior
Indebtedness" for purposes of the Discount Note Indenture or any Discount
Exchange Note Indenture.
(i) Permit ANSI to terminate any agency relationship with any
Guarantor or to modify the terms of any such agency in any manner that is less
favorable to such Guarantor than the terms in effect immediately prior to such
modification or permit ATG, ANSI or any of their subsidiaries at any time prior
to the date on which it shall become a Guarantor to enter into any transaction
with STFI, the Borrower or any Subsidiary that it would otherwise have been
permitted to enter into as a Subsidiary under this Article VI.
(j) Enter into any tenant service contract that would result
in a breach of Section 3.10.
(k) (i) fail to furnish to the Collateral Agent within two
weeks after the Closing Date the results of all the searches of Uniform
Commercial Code filings (or equivalent filings) contemplated by Section 4.02(h)
that were not delivered on the Closing Date or (ii) fail to deliver to the
Collateral Agent within four weeks after the Closing Date evidence satisfactory
to the Collateral Agent that the Liens indicated in any financing statement (or
similar document) disclosed in the results of any search furnished under clause
(i) would be permitted under Section 6.02 or have been released.
SECTION 6.10. Capital Expenditures. Permit the aggregate
amount of Capital Expenditures made by STFI, the Borrower and the Subsidiaries
taken as a whole in any fiscal year to exceed the amount set forth below
opposite such period:
Fiscal Period
Capital Expenditures
April 1, 1996 - March 31, 1997 $13,500,000
April 1, 1997 - March 31, 1998 14,000,000
April 1, 1998 - March 31, 1999 15,500,000
April 1, 1999 - March 31, 2000 16,000,000
April 1, 2000 - March 31, 2001 16,500,000
April 1, 2001 - March 31, 2002 17,500,000
April 1, 2002 - March 31, 2003 18,000,000;
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provided, however, that to the extent Capital Expenditures in any fiscal year
are less than the amount set forth above opposite such year, up to $2,000,000 of
such unused amount in any fiscal year may be carried forward to the next
succeeding fiscal year.
SECTION 6.11. Minimum EBITDA. Permit EBITDA of STFI, the
Borrower and the Subsidiaries at the end of any fiscal quarter to be less than
the amount set forth for such quarter on Schedule 6.11.
SECTION 6.12. Fixed Charge Coverage Ratio. Permit the Fixed
Charge Coverage Ratio as of the end of any fiscal quarter to be less than 1.00.
SECTION 6.13. Leverage Ratio. Permit the Leverage Ratio as of
the end of any fiscal quarter to be in excess of the ratio set forth for such
quarter on Schedule 6.13.
SECTION 6.14. Interest Expense Coverage Ratio. Permit the
Interest Expense Coverage Ratio as of the end of any fiscal quarter to be less
than that set forth for such quarter on Schedule 6.14.
SECTION 6.15. Minimum Net Worth. Permit Net Worth as of the
end of any fiscal quarter to be less than the Minimum Net Worth as of such date.
ARTICLE VII. EVENTS OF DEFAULT
In case of the happening of any of the following events
("Events of Default"):
(a) any representation or warranty made or deemed made in or
in connection with any Loan Document or the borrowings or issuances of
Letters of Credit hereunder, or any representation, warranty, statement
or information contained in any report, certificate, financial
statement or other instrument furnished in connection with or pursuant
to any Loan Document, shall prove to have been false or misleading in
any material respect when so made, deemed made or furnished;
(b) default shall be made in the payment of any principal of
any Loan or the reimbursement with respect to any L/C Disbursement or
in the payment of any interest on any Loan or any Fee or L/C
Disbursement or any other amount (other than an amount referred to in
(a) above) due under any Loan Document, when and as the same shall
become due and payable, whether at the due date thereof or at a date
fixed for prepayment thereof or by acceleration thereof or otherwise;
(c) default shall be made in the due observance or performance
by STFI, the Borrower or any Subsidiary of any covenant, condition or
agreement contained in Section 5.01(a), 5.05 or 5.08 or in Article VI;
(d) default shall be made in the due observance or performance
by STFI, the Borrower or any Subsidiary of any covenant, condition or
agreement contained in any Loan Document (other than those specified in
(b), or (c) above) and such default shall continue unremedied for a
period of 15 days after notice thereof from the Administrative Agent or
any Lender to the Borrower;
(e) there shall have occurred a Change in Control;
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(f) STFI, the Borrower or any Subsidiary shall (i) fail to pay
any principal or interest, regardless of amount, due in respect of any
Indebtedness in a principal amount in excess of $1,000,000, when and as
the same shall become due and payable, or (ii) fail to observe or
perform any other term, covenant, condition or agreement contained in
any agreement or instrument evidencing or governing any such
Indebtedness if the effect of any failure referred to in this clause
(ii) is to cause, or to permit the holder or holders of such
Indebtedness or a trustee on its or their behalf (with or without the
giving of notice, the lapse of time or both) to cause, such
Indebtedness to become due prior to its stated maturity;
(g) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent
jurisdiction seeking (i) relief in respect of STFI, the Borrower or any
Subsidiary, or of a substantial part of the property or assets of STFI,
the Borrower or any Subsidiary, under Title 11 of the United States
Code, as now constituted or hereafter amended, or any other Federal,
state or foreign bankruptcy, insolvency, receivership or similar law,
(ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for STFI, the Borrower or any
Subsidiary or for a substantial part of the property or assets of STFI,
the Borrower or a Subsidiary or (iii) the winding-up or liquidation of
STFI, the Borrower or any Subsidiary; and such proceeding or petition
shall continue undismissed for 60 days or an order or decree approving
or ordering any of the foregoing shall be entered;
(h) STFI, the Borrower or any Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking relief under Title
11 of the United States Code, as now constituted or hereafter amended,
or any other Federal, state or foreign bankruptcy, insolvency,
receivership or similar law, (ii) consent to the institution of, or
fail to contest in a timely and appropriate manner, any proceeding or
the filing of any petition described in (g) above, (iii) apply for or
consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for STFI, the Borrower or
any Subsidiary or for a substantial part of the property or assets of
STFI, the Borrower or any Subsidiary, (iv) file an answer admitting the
material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of creditors,
(vi) become unable, admit in writing its inability or fail generally to
pay its debts as they become due or (vii) take any action for the
purpose of effecting any of the foregoing;
(i) one or more judgments for the payment of money in an
aggregate amount in excess of $1,000,000 shall be rendered against
STFI, the Borrower, any Subsidiary or any combination thereof and the
same shall remain undischarged for a period of 30 consecutive days
during which execution shall not be effectively stayed, or any action
shall be legally taken by a judgment creditor to levy upon assets or
properties of STFI, the Borrower or any Subsidiary to enforce any such
judgment;
(j) an ERISA Event shall have occurred that, in the opinion of
the Required Lenders, when taken together with all other such ERISA
Events, could reasonably be expected to result in liability of the
Borrower and its ERISA Affiliates in an aggregate amount exceeding
$1,000,000 or requires payments exceeding $500,000 in any year;
(k) any security interest purported to be created by any
Security Document shall cease to be, or shall be asserted by the
Borrower or any other Loan Party not to be, a valid, perfected, first
priority (except as otherwise expressly provided in this Agreement or
such Security Document) security interest in the securities, assets or
properties covered thereby, except to the extent that any such loss of
perfection or priority results from the failure of the Collateral Agent
to maintain
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possession of certificates representing securities pledged under the
Pledge Agreement and except to the extent that such loss is covered by
a lender's title insurance policy and the related insurer promptly
after such loss shall have acknowledged in writing that such loss is
covered by such title insurance policy; or
(l) any Loan Document shall not be for any reason, or shall be
asserted by STFI, the Borrower or any Subsidiary not to be, in full
force and effect and enforceable in all material respects in accordance
with its terms;
then, and in every such event (other than an event with respect to the Borrower
described in paragraph (g) or (h) above), and at any time thereafter during the
continuance of such event, the Administrative Agent may, and at the request of
the Required Lenders shall, by notice to the Borrower, take either or both of
the following actions, at the same or different times: (i) terminate forthwith
the Commitments and (ii) declare the Loans then outstanding to be forthwith due
and payable in whole or in part, whereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and any
unpaid accrued Fees and all other liabilities of the Borrower accrued hereunder
and under any other Loan Document, shall become forthwith due and payable,
without presentment, demand, protest or any other notice of any kind, all of
which are hereby expressly waived by the Borrower, anything contained herein or
in any other Loan Document to the contrary notwithstanding; and in any event
with respect to the Borrower described in paragraph (g) or (h) above, the
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and any unpaid accrued Fees
and all other liabilities of the Borrower accrued hereunder and under any other
Loan Document, shall automatically become due and payable, without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived by the Borrower, anything contained herein or in any other Loan
Document to the contrary notwithstanding.
ARTICLE VIII. THE AGENTS
In order to expedite the transactions contemplated by this
Agreement, Credit Suisse is hereby appointed to act as Administrative Agent and
Collateral Agent on behalf of the Lenders and the Fronting Banks (for purposes
of this Article VIII, the Administrative Agent and the Collateral Agent are
referred to collectively as the "Agents"). Each of the Lenders and each assignee
of any such Lender, hereby irrevocably authorizes the Agents to take such
actions on behalf of such Lender or assignee or Fronting Bank and to exercise
such powers as are specifically delegated to the Agents by the terms and
provisions hereof and of the other Loan Documents, together with such actions
and powers as are reasonably incidental thereto. The Administrative Agent is
hereby expressly authorized by the Lenders and the Fronting Banks, without
hereby limiting any implied authority, (a) to receive on behalf of the Lenders
and the Fronting Banks all payments of principal of and interest on the Loans,
all payments in respect of L/C Disbursements and all other amounts due to the
Lenders hereunder, and promptly to distribute to each Lender or Fronting Bank
its proper share of each payment so received; (b) to give notice on behalf of
each of the Lenders to the Borrower of any Event of Default specified in this
Agreement of which the Administrative Agent has actual knowledge acquired in
connection with its agency hereunder; and (c) to distribute to each Lender and
Fronting Bank copies of all notices, financial statements and other materials
delivered by the Borrower or any other Loan Party pursuant to this Agreement or
the other Loan Documents as received by the Administrative Agent (other than
such materials delivered pursuant to Section 5.04) and the Administrative Agent
shall promptly after receipt thereof deliver such notices and distribute such
copies to the Lenders and the Fronting Banks, as applicable. Without limiting
the generality of the foregoing, the Agents are hereby expressly authorized to
execute any and all documents (including releases) with respect to the
Collateral and the rights of the Secured Parties with respect
66
thereto, as contemplated by and in accordance with the provisions of this
Agreement and the Security Documents. In the event that any party other than the
Lenders and the Agents shall participate in all or any portion of the Collateral
pursuant to the Security Documents, all rights and remedies in respect of such
Collateral shall be controlled by the Collateral Agent. Notwithstanding anything
herein to the contrary, no Lender identified herein as Documentation Agent shall
have any separate duties, responsibilities, obligations or authority as
Documentation Agent hereunder.
Neither the Agents nor any of their respective directors,
officers, employees or agents shall be liable as such for any action taken or
omitted by any of them except for its or his own gross negligence or wilful
misconduct, or be responsible for any statement, warranty or representation
herein or the contents of any document delivered in connection herewith, or be
required to ascertain or to make any inquiry concerning the performance or
observance by the Borrower or any other Loan Party of any of the terms,
conditions, covenants or agreements contained in any Loan Document. The Agents
shall not be responsible to the Lenders for the due execution, genuineness,
validity, enforceability or effectiveness of this Agreement or any other Loan
Documents, instruments or agreements. The Agents shall in all cases be fully
protected in acting, or refraining from acting, in accordance with written
instructions signed by the Required Lenders and, except as otherwise
specifically provided herein, such instructions and any action or inaction
pursuant thereto shall be binding on all the Lenders. Each Agent shall, in the
absence of knowledge to the contrary, be entitled to rely on any instrument or
document believed by it in good faith to be genuine and correct and to have been
signed or sent by the proper person or persons. Neither the Agents nor any of
their respective directors, officers, employees or agents shall have any
responsibility to the Borrower or any other Loan Party on account of the failure
of or delay in performance or breach by any Lender or Fronting Bank of any of
its obligations hereunder or to any Lender or Fronting Bank on account of the
failure of or delay in performance or breach by any other Lender or Fronting
Bank or the Borrower or any other Loan Party of any of their respective
obligations hereunder or under any other Loan Document or in connection herewith
or therewith. Each of the Agents may execute any and all duties hereunder by or
through agents or employees and each of the Agents shall be entitled to rely
upon the advice of legal counsel selected by it with respect to all matters
arising hereunder and shall not be liable for any action taken or suffered in
good faith by it in accordance with the advice of such counsel.
The Lenders hereby acknowledge that neither Agent shall be
under any duty to take any discretionary action permitted to be taken by it
pursuant to the provisions of this Agreement unless it shall be requested in
writing to do so by the Required Lenders.
Subject to the appointment and acceptance of a successor Agent
as provided below, either Agent (which term includes, for the purposes of this
paragraph, the Documentation Agent) may resign at any time by notifying the
Lenders and the Borrower. Upon any such resignation, the Required Lenders shall
have the right to appoint a successor. If no successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Agent gives notice of its resignation, then
the retiring Agent may, on behalf of the Lenders, appoint a successor Agent
which shall be a bank with an office in New York, New York, having a combined
capital and surplus of at least $500,000,000 or an Affiliate of any such bank.
Upon the acceptance of any appointment as Agent hereunder by a successor bank,
such successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent and the retiring Agent shall be
discharged from its duties and obligations hereunder. After the Agent's
resignation hereunder, the provisions of this Article and Section 9.05 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as Agent.
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With respect to the Loans made by it hereunder, any Agent
(which term includes, for the purposes of this paragraph, the Documentation
Agent) in its individual capacity and not as Agent shall have the same rights
and powers as any other Lender and may exercise the same as though it were not
an Agent, and the Agents and their Affiliates may accept deposits from, lend
money to and generally engage in any kind of business with STFI, the Borrower or
any Subsidiary or other Affiliate thereof as if it were not an Agent.
Each Lender agrees (a) to reimburse the Agents, on demand, in
the amount of its pro rata share (based on its Commitments hereunder or, if such
Commitments have expired or been terminated, in accordance with the respective
principal amounts of their applicable outstanding Loans) of any expenses
incurred for the benefit of the Lenders by the Agents, including reasonable
counsel fees and compensation of agents and employees paid for services rendered
on behalf of the Lenders, that shall not have been reimbursed (but without
limiting any obligation of the Borrower or any Loan Party hereunder or under any
other Loan Document to reimburse the same) by the Borrower and (b) to indemnify
and hold harmless each Agent and any of its directors, officers, employees or
agents, on demand, in the amount of such pro rata share, from and against any
and all liabilities, taxes, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on, incurred by or asserted against it in its
capacity as Agent or any of them in any way relating to or arising out of this
Agreement or any other Loan Document or any action taken or omitted by it or any
of them under this Agreement or any other Loan Document, to the extent the same
shall not have been reimbursed (but without limiting any obligation of the
Borrower or any Loan Party hereunder or under any other Loan Document to
reimburse the same) by the Borrower or any other Loan Party, provided that no
Lender shall be liable to an Agent or any such other indemnified person for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements that are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or wilful misconduct of such Agent or any of
its directors, officers, employees or agents.
Each Lender acknowledges that it has, independently and
without reliance upon the Agents or any other Lender and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Agents or any other Lender and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement or any other Loan Document, any related
agreement or any document furnished hereunder or thereunder.
In its capacity as Administrative Agent hereunder, the
Administrative Agent will serve as Representative of the Bank Indebtedness under
the Discount Note Indenture and agrees to notify each Lender of any notice
received by it as such Representative.
ARTICLE IX. MISCELLANEOUS
SECTION 9.01. Notices. Notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by
telecopy, as follows:
(a) if to the Borrower or STFI, to it at 100 Great Meadow
Road, Wethersfield, CT 06109, Attention of Chief Executive Officer
(Telecopy No. (203) 258-2455);
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(b) if to the Administrative Agent, to Credit Suisse, Tower
49, 12 East 49th Street, New York, New York 10017, Attention of Lisa
Perrotto, Agency Group (Telecopy No. (212) 238-5073), with a copy to
Credit Suisse, Attention of Jack Deutsch (Telecopy No. (212) 238-5838);
and
(c) if to a Lender, to it at its address (or telecopy number)
set forth on Schedule 2.01 or in the Assignment and Acceptance pursuant
to which such Lender shall have become a party hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telecopy or on the date five Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section 9.01 or in accordance with
the latest unrevoked direction from such party given in accordance with this
Section 9.01.
SECTION 9.02. Survival of Agreement. All covenants,
agreements, representations and warranties made by the Borrower or STFI herein
and in the certificates or other instruments prepared or delivered in connection
with or pursuant to this Agreement or any other Loan Document shall be
considered to have been relied upon by the Lenders and the Fronting Banks and
shall survive the making by the Lenders of the Loans and the issuance of Letters
of Credit by the Fronting Banks, regardless of any investigation made by the
Lenders or the Fronting Banks or on their behalf, and shall continue in full
force and effect as long as the principal of or any accrued interest on any Loan
or any Fee or any other amount payable under this Agreement or any other Loan
Document is outstanding and unpaid or any Letter of Credit is outstanding and so
long as the Commitments have not been terminated. The provisions of Sections
2.14, 2.16, 2.20 and 9.05 shall remain operative and in full force and effect
regardless of the expiration of the term of this Agreement, the consummation of
the transactions contemplated hereby, the repayment of any of the Loans, the
expiration of the Commitments, the expiration of any Letter of Credit, the
invalidity or unenforceability of any term or provision of this Agreement or any
other Loan Document, or any investigation made by or on behalf of the
Administrative Agent, the Collateral Agent, the Documentation Agent, any Lender
or the Fronting Banks.
SECTION 9.03. Binding Effect. This Agreement shall become
effective when it shall have been executed by the Borrower, STFI and the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective permitted successors and
assigns.
SECTION 9.04. Successors and Assigns. (a) Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the permitted successors and assigns of such party; and all
covenants, promises and agreements by or on behalf of the Borrower, STFI, the
Administrative Agent, the Documentation Agent, the Fronting Banks or the Lenders
that are contained in this Agreement shall bind and inure to the benefit of
their respective successors and assigns.
(b) Each Lender may assign to one or more financial
institutions all or a portion of its interests, rights and obligations under
this Agreement (including all or a portion of its Commitments and the Loans at
the time owing to it); provided, however, that (i) except in the case of an
assignment to a Lender or an Affiliate of such Lender, (x) the Administrative
Agent (and, in the case of any assignment of a Revolving Credit Commitment, the
Fronting Banks) must give their prior written consent to such assignment (which
consent shall not be unreasonably withheld or delayed) and (y) the amount of the
Commitments and, without duplication, Loans of the assigning Lender subject to
each such assignment (determined as of the date the
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Assignment and Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall be in integral multiples of $1,000,000 and in a
minimum principal amount of $5,000,000 (or, if less, the entire remaining amount
of the Commitments and Loans of such Lender) (ii) the parties to each such
assignment shall execute and deliver to the Administrative Agent an Assignment
and Acceptance, together with (other than in the case of an assignment by a
Lender to an Affiliate of such Lender) a processing and recordation fee of
$3,500 and (iii) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire and the documents required
pursuant to Section 2.20(e). Upon acceptance and recording pursuant to paragraph
(e) of this Section 9.04, from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be (unless waived by the
Administrative Agent) at least five Business Days after the execution thereof,
(A) the assignee thereunder shall be a party hereto and, to the extent of the
interest assigned by such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement and (B) the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all or the remaining portion of an
assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.14, 2.16, 2.20 and 9.05, as well as to any Fees accrued
for its account and not yet paid).
(c) By executing and delivering an Assignment and Acceptance,
the assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim and that
its Term Loan Commitment and Revolving Credit Commitment, and the outstanding
balances of its Term Loans and Revolving Loans, in each case without giving
effect to assignments thereof which have not become effective, are as set forth
in such Assignment and Acceptance, (ii) except as set forth in (i) above, such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement,
any other Loan Document or any other instrument or document furnished pursuant
hereto, or the financial condition of the Borrower or any Subsidiary or the
performance or observance by the Borrower or any Subsidiary of any of its
obligations under this Agreement, any other Loan Document or any other
instrument or document furnished pursuant hereto; (iii) such assignee represents
and warrants that it is legally authorized to enter into such Assignment and
Acceptance; (iv) such assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial statements referred
to in Section 3.05(a) or delivered pursuant to Section 5.04 and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (v) such
assignee will independently and without reliance upon the Administrative Agent,
the Collateral Agent, such assigning Lender or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement; (vi) such assignee appoints and authorizes the Administrative
Agent and the Collateral Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement as are delegated to the Administrative
Agent and the Collateral Agent, respectively, by the terms hereof, together with
such powers as are reasonably incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all the obligations which by
the terms of this Agreement are required to be performed by it as a Lender.
(d) The Administrative Agent, acting for this purpose as an
agent of the Borrower, shall maintain at one of its offices in The City of New
York a copy of each Assignment and Acceptance delivered to it and a register for
the recordation of the names and addresses of the Lenders, and the Commitment
of,
70
and principal amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the "Register"). The entries in the Register shall be
conclusive and the Borrower, the Administrative Agent, the Fronting Banks, the
Collateral Agent and the Lenders may treat each person whose name is recorded in
the Register pursuant to the terms hereof as a Lender hereunder for all purposes
of this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower, the Fronting Banks, the Collateral
Agent, the Documentation Agent and any Lender, at any reasonable time and from
time to time upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, an Administrative
Questionnaire completed in respect of the assignee (unless the assignee shall
already be a Lender hereunder), the processing and recordation fee referred to
in paragraph (b) above and, if required, the written consent of the Fronting
Bank and the Administrative Agent to such assignment, the Administrative Agent
shall (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
Lenders and the Fronting Bank. No assignment shall be effective unless it has
been recorded in the Register as provided in this paragraph (e).
(f) Each Lender may without the consent of the Borrower, the
Fronting Banks or the Administrative Agent sell participations to one or more
banks or other entities in all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans owing
to it); provided, however, that (i) such Lender's obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) the participating banks or other entities shall be entitled to the benefit
of the cost protection provisions contained in Sections 2.14, 2.16 and 2.20 to
the same extent as if they were Lenders and (iv) the Borrower, the
Administrative Agent, the Fronting Banks and the Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement, and such Lender shall retain the sole right to
enforce the obligations of the Borrower relating to the Loans or L/C
Disbursements and to approve any amendment, modification or waiver of any
provision of this Agreement (other than amendments, modifications or waivers
decreasing any fees payable hereunder or the amount of principal of or the rate
at which interest is payable on the Loans, extending any scheduled principal
payment date or date fixed for the payment of interest on the Loans or
increasing or extending the Commitments).
(g) Any Lender or participant may, in connection with any
assignment or participation or proposed assignment or participation pursuant to
this Section 9.04, disclose to the assignee or participant or proposed assignee
or participant any information relating to the Borrower furnished to such Lender
by or on behalf of the Borrower; provided that, prior to any such disclosure of
information designated by the Borrower as confidential, each such assignee or
participant or proposed assignee or participant shall execute an agreement
whereby such assignee or participant shall agree (subject to customary
exceptions) to preserve the confidentiality of such confidential information on
terms no less restrictive than those applicable to the Lenders pursuant to
Section 9.16.
(h) Any Lender may at any time assign all or any portion of
its rights under this Agreement to a Federal Reserve Bank to secure extensions
of credit by such Federal Reserve Bank to such Lender; provided that no such
assignment shall release a Lender from any of its obligations hereunder or
substitute any such Bank for such Lender as a party hereto. In order to
facilitate such an assignment to a Federal Reserve Bank, the Borrower shall, at
the request of the assigning Lender, duly execute and deliver to the assigning
Lender a promissory note or notes evidencing the Loans made to the Borrower by
the assigning Lender hereunder.
71
(i) Neither STFI nor the Borrower shall assign or delegate any
of its rights or duties hereunder without the prior written consent of the
Administrative Agent, the Fronting Banks and each Lender, and any attempted
assignment without such consent shall be null and void.
(j) In the event that Standard & Poor's Ratings Group or
Moody's Investors Service, Inc. shall, after the date that any Lender becomes a
Revolving Credit Lender, downgrade the long-term credit ratings of such Lender,
and the resulting ratings shall be below BBB+ or Baa1, then any Fronting Bank
shall have the right, but not the obligation, at its own expense, upon notice to
such Lender and the Administrative Agent, to replace (or to request the Borrower
to use its reasonable efforts to replace) such Lender with an assignee (in
accordance with and subject to the restrictions contained in paragraph (b)
above), and such Lender hereby agrees to transfer and assign without recourse
(in accordance with and subject to the restrictions contained in paragraph (b)
above) all its interests, rights and obligations in respect of its Revolving
Credit Commitment to such assignee; provided, however, that (i) no such
assignment shall conflict with any law, rule and regulation or order of any
Governmental Authority and (ii) such Fronting Bank or such assignee, as the case
may be, shall pay to such Lender in immediately available funds on the date of
such assignment the principal of and interest accrued to the date of payment on
the Loans made by such Lender hereunder and all other amounts accrued for such
Lender's account or owed to it hereunder.
SECTION 9.05. Expenses; Indemnity. (a) The Borrower and STFI
agree, jointly and severally, to pay all out-of-pocket expenses incurred by the
Administrative Agent, the Collateral Agent, the Documentation Agent and the
Fronting Banks in connection with the syndication of the credit facilities
provided for herein and the preparation and administration of this Agreement and
the other Loan Documents or in connection with any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
hereby or thereby contemplated shall be consummated) or incurred by the
Administrative Agent, the Collateral Agent, the Documentation Agent or any
Lender in connection with the enforcement or protection of its rights in
connection with this Agreement and the other Loan Documents or in connection
with the Loans made or Letters of Credit issued hereunder, including the fees,
charges and disbursements of Cravath, Swaine & Moore, counsel for the
Administrative Agent and the Collateral Agent, and, in connection with any such
enforcement or protection, the fees, charges and disbursements of any other
counsel for the Administrative Agent, the Collateral Agent, the Documentation
Agent or any Lender.
(b) The Borrower and STFI agree, jointly and severally, to
indemnify the Administrative Agent, the Collateral Agent, the Documentation
Agent, each Lender and each Fronting Bank, each Affiliate of any of the
foregoing persons and each of their respective directors, officers, employees
and agents (each such person being called an "Indemnitee") against, and to hold
each Indemnitee harmless from, any and all losses, claims, damages, liabilities
and related expenses, including reasonable counsel fees, charges and
disbursements, incurred by or asserted against any Indemnitee arising out of, in
any way connected with, or as a result of (i) the execution or delivery of this
Agreement or any other Loan Document or any agreement or instrument contemplated
thereby, the performance by the parties thereto of their respective obligations
thereunder or the consummation of the Transactions and the other transactions
contemplated thereby, (ii) the use of the proceeds of the Loans or issuance of
Letters of Credit, (iii) any claim, litigation, investigation or proceeding
relating to any of the foregoing, whether or not any Indemnitee is a party
thereto, or (iv) any actual or alleged presence or Release of Hazardous
Materials on any property owned or operated by the Borrower or any of the
Subsidiaries, or any Environmental Claim related in any way to the Borrower or
the Subsidiaries; provided that such indemnity shall not, as to any Indemnitee,
be available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or wilful
misconduct of such Indemnitee.
72
(c) The provisions of this Section 9.05 shall remain operative
and in full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the expiration of the Commitments, the expiration
of any Letter of Credit, the invalidity or unenforceability of any term or
provision of this Agreement or any other Loan Document, or any investigation
made by or on behalf of the Administrative Agent, the Collateral Agent, the
Documentation Agent, any Lender or any Fronting Bank. All amounts due under this
Section 9.05 shall be payable on written demand therefor.
SECTION 9.06. Right of Setoff. If an Event of Default shall
have occurred and be continuing, each Lender is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held by such Lender and other indebtedness at any time owing
by such Lender to or for the credit or the account of the Borrower or STFI
against any of and all the obligations of the Borrower or STFI now or hereafter
existing under this Agreement and the other Loan Documents, irrespective of
whether or not such Lender shall have made any demand under this Agreement or
such other Loan Document and although such obligations may be unmatured. The
rights of each Lender under this Section 9.06 are in addition to other rights
and remedies (including other rights of setoff) which such Lender may have.
SECTION 9.07. Applicable Law. THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS (OTHER THAN LETTERS OF CREDIT AND AS OTHERWISE EXPRESSLY SET
FORTH IN OTHER LOAN DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. EACH LETTER OF CREDIT SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES
DESIGNATED IN SUCH LETTER OF CREDIT, OR IF NO SUCH LAWS OR RULES ARE DESIGNATED,
THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS (1993 REVISION),
INTERNATIONAL CHAMBER OF COMMERCE, PUBLICATION NO. 500 (THE "UNIFORM CUSTOMS")
AND, AS TO MATTERS NOT GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF THE STATE OF
NEW YORK.
SECTION 9.08. Waivers; Amendment. (a) No failure or delay of
the Administrative Agent, the Collateral Agent, the Documentation Agent, any
Lender or any Fronting Bank in exercising any power or right hereunder or under
any other Loan Document shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Administrative Agent, the Collateral Agent, the Fronting
Banks, the Documentation Agent and the Lenders hereunder and under the other
Loan Documents are cumulative and are not exclusive of any rights or remedies
that they would otherwise have. No waiver of any provision of this Agreement or
any other Loan Document or consent to any departure by the Borrower or any other
Loan Party therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) below, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice or demand on the Borrower or STFI in any case shall entitle the Borrower
or STFI to any other or further notice or demand in similar or other
circumstances.
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except pursuant
to an agreement or agreements in writing entered into by the Borrower, STFI and
the Required Lenders; provided, however, that no such agreement shall (i)
decrease the principal amount of, or extend the maturity of or any scheduled
principal payment date or date for the payment of any interest on any Loan or
any date for reimbursement of an L/C Disbursement,
73
or waive or excuse any such payment or any part thereof, or decrease the rate of
interest on any Loan or L/C Disbursement, without the prior written consent of
each Lender affected thereby, (ii) increase or extend the Commitment or decrease
or extend the payment date of the Commitment Fees of any Lender without the
prior written consent of such Lender, (iii) advance any Installment Date or any
other date on which principal of the Term Loans is due without the prior written
consent of Lenders holding Term Loans and Revolving Credit Commitments
representing (A) at least 80% of the aggregate principal amount of the then
outstanding Tranche A Term Loans, (B) at least 80% of the aggregate principal
amount of the then outstanding Tranche B Term Loans and (C) at least 80% of the
aggregate principal amount of the then outstanding Revolving Credit Commitments,
(iv) effect any waiver, amendment or modification that by its terms adversely
affects the rights in respect of payments or collateral of the Revolving Credit
Lenders or Lenders participating in any Tranche differently from those of the
Revolving Credit Lenders or Lenders participating in other Tranches, as the case
may be, without the consent of a majority in interest of the Revolving Credit
Lenders, if adversely affected, or Lenders participating in the adversely
affected Tranche, as the case may be, or change the relative rights in respect
of payments or collateral of the Revolving Credit Lenders or Lenders
participating in different Tranches without the consent of a majority in
interest of the Revolving Credit Lenders, if adversely affected, or Lenders
participating in each adversely affected Tranche, as the case may be, or (v)
amend or modify the provisions of Section 2.17 or 9.04(i), the provisions of
this Section 9.08 or the definition of the term "Required Lenders" or release
any Guarantor or all or substantially all the Collateral, without the prior
written consent of each Lender; provided further that no such agreement shall
amend, modify or otherwise affect the rights or duties of the Administrative
Agent, the Collateral Agent, any Fronting Bank or the Documentation Agent
hereunder or under any other Loan Document without the prior written consent of
the Administrative Agent, the Collateral Agent, such Fronting Bank or the
Documentation Agent.
SECTION 9.09. Interest Rate Limitation. Notwithstanding
anything herein to the contrary, if at any time the interest rate applicable to
any Loan or participation in any L/C Disbursement, together with all fees,
charges and other amounts which are treated as interest on such Loan or
participation in such L/C Disbursement under applicable law (collectively the
"Charges"), shall exceed the maximum lawful rate (the "Maximum Rate") which may
be contracted for, charged, taken, received or reserved by the Lender holding
such Loan or participation in accordance with applicable law, the rate of
interest payable in respect of such Loan or participation hereunder, together
with all Charges payable in respect thereof, shall be limited to the Maximum
Rate and, to the extent lawful, the interest and Charges that would have been
payable in respect of such Loan or participation but were not payable as a
result of the operation of this Section 9.09 shall be cumulated and the interest
and Charges payable to such Lender in respect of other Loans or participations
or periods shall be increased (but not above the Maximum Rate therefor) until
such cumulated amount, together with interest thereon at the Federal Funds
Effective Rate to the date of repayment, shall have been received by such
Lender.
SECTION 9.10. Entire Agreement. This Agreement, the Fee Letter
and the other Loan Documents constitute the entire contract between the parties
relative to the subject matter hereof. Any other previous agreement among the
parties with respect to the subject matter hereof is superseded by this
Agreement and the other Loan Documents. Nothing in this Agreement or in the
other Loan Documents, expressed or implied, is intended to confer upon any party
other than the parties hereto and thereto any rights, remedies, obligations or
liabilities under or by reason of this Agreement or the other Loan Documents.
SECTION 9.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE
74
OTHER LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS
APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 9.11.
SECTION 9.12. Severability. In the event any one or more of
the provisions contained in this Agreement or in any other Loan Document should
be held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby (it being understood that
the invalidity of a particular provision in a particular jurisdiction shall not
in and of itself affect the validity of such provision in any other
jurisdiction). The parties shall endeavor in good-faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 9.13. Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original but all of which when taken together shall
constitute a single contract, and shall become effective as provided in Section
9.03. Delivery of an executed signature page to this Agreement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Agreement.
SECTION 9.14. Headings. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and are not to affect the construction of, or to be taken
into consideration in interpreting, this Agreement.
SECTION 9.15. Jurisdiction; Consent to Service of Process. (a)
Each of STFI and the Borrower hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of any New York
State court or Federal court of the United States of America sitting in New York
City, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement or the other Loan Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State
court or, to the extent permitted by law, in such Federal court. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that the Administrative Agent, the Collateral Agent, the
Documentation Agent, any Fronting Bank or any Lender may otherwise have to bring
any action or proceeding relating to this Agreement or the other Loan Documents
against the Borrower, STFI or their respective properties in the courts of any
jurisdiction.
(b) Each of STFI and the Borrower hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
the other Loan Documents in any New York State or Federal court. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
75
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 9.01. Nothing
in this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
SECTION 9.16. Confidentiality. The Administrative Agent, the
Collateral Agent, the Documentation Agent, each Fronting Bank and each Lender
agrees to keep confidential (and to use its best efforts to cause its respective
agents and representatives to keep confidential) the Information (as defined
below) and all copies thereof, extracts therefrom and analyses or other
materials based thereon, except that the Administrative Agent, the Collateral
Agent, the Documentation Agent, any Fronting Bank or any Lender shall be
permitted to disclose Information (a) to such of its respective officers,
directors, employees, agents, affiliates and representatives as need to know
such Information in connection with a business relationship with STFI, the
Borrower or any Subsidiary, (b) to the extent requested by any regulatory
authority, (c) to the extent otherwise required by applicable laws and
regulations or by any subpoena or similar legal process, (d) in connection with
any suit, action or proceeding relating to the enforcement of its rights
hereunder or under the other Loan Documents or (e) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section 9.16 or (ii) becomes available to the Administrative Agent, the
Documentation Agent, any Fronting Bank, any Lender or the Collateral Agent on a
nonconfidential basis from a source other than the Borrower or STFI. For the
purposes of this Section, "Information" shall mean all financial statements,
certificates, reports, agreements and written information (including all
analyses, compilations and studies prepared by the Administrative Agent, the
Collateral Agent, the Documentation Agent, the Fronting Bank or any Lender based
on any of the foregoing) that are received from the Borrower or STFI and related
to the Borrower or STFI, any shareholder of the Borrower or STFI or any
employee, customer or supplier of the Borrower or STFI, other than any of the
foregoing that were available to the Administrative Agent, the Collateral Agent,
the Documentation Agent, any Fronting Bank or any Lender on a nonconfidential
basis prior to its disclosure thereto by the Borrower or STFI, and which are in
the case of Information provided after the date hereof, clearly identified at
the time of delivery as confidential. The provisions of this Section 9.16 shall
remain operative and in full force and effect regardless of the expiration and
term of this Agreement for a period of one year.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
SHARED TECHNOLOGIES FAIRCHILD
COMMUNICATIONS CORP.,
by
/s/ Vincent DiVincenzo
Name: Vincent DiVincenzo
Title: Treasurer
76
SHARED TECHNOLOGIES INC.,
by
/s/ Vincent DiVincenzo
Name: Vincent DiVincenzo
Title: Treasurer
CREDIT SUISSE, individually and as
Administrative Agent, Collateral Agent and
Fronting Bank,
by
/s/ Kathleen D. O'Brien
Name: Kathleen D. O'Brien
Title: Member of Senior Management
by
/s/ Jack Deutsch
Name: Jack Deutsch
Title: Associate
CITICORP USA INC., individually and as
Documentation Agent,
by
/s/ Marjorie Futornick
Name: Marjorie Futornick
Title: Vice President
NATIONSBANK, N.A., individually and as
Documentation Agent,
by
/s/ John D. Mindnich
Name: John D. Mindnich
Title: Senior Vice President
77
CAISSE NATIONALE DE CREDIT AGRICOLE,
by
/s/ David Bouhl, F.V.P.
Name: David Bouhl, F.V.P.
Title: Head of Corporate Banking
Chicago
CHL HIGH YIELD LOAN PORTFOLIO,
(a unit of Chemical Bank)
by
/s/ Andrew D. Gordon
Name: Andrew D. Gordon
Title: Managing Director
FIRST SOURCE FINANCIAL LLP,
by FIRST SOURCE FINANCIAL, INC.,
its Agent/Manager
by
/s/ Gary L. Francis
Name: Gary L. Francis
Title: Senior Vice President
PILGRIM PRIME RATE TRUST,
by
/s/ Michael J. Bacevich
Name: Michael J. Bacevich
Title: Vice President
VAN KAMPEN AMERICAN CAPITAL,
PRIME RATE INCOME TRUST,
by
/s/ Jeffrey W. Maillet
Name: Jeffrey W. Maillet
Title: Sr. Vice Pres. - Portfolio Mgr.
78
SENIOR HIGH INCOME PORTFOLIO, INC.,
by
/s/ John W. Fraser
Name: John W. Fraser
Title: Authorized Signatory
MERRILL LYNCH SENIOR FLOATING RATE
FUND, INC.,
by
/s/ John W. Fraser
Name: John W. Fraser
Title: Authorized Signatory
79
EXHIBIT A
[Form of]
SHARED TECHNOLOGIES FAIRCHILD COMMUNICATIONS CORP.
ADMINISTRATIVE QUESTIONNAIRE
Please accurately complete the following information and return via Telecopy to
the attention of Lisa Perrotto at Credit Suisse, Agency Group as soon as
possible, at Telecopy No. (212) 238-5073.
- --------------------------------------------------------------------------------
LENDER LEGAL NAME TO APPEAR IN DOCUMENTATION:
GENERAL INFORMATION - DOMESTIC LENDING OFFICE:
Institution Name:
Street Address:
City, State, Zip Code:
GENERAL INFORMATION - EURODOLLAR LENDING OFFICE:
Institution Name:
Street Address:
City, State, Zip Code:
POST-CLOSING, ONGOING CREDIT CONTACTS/NOTIFICATION METHODS:
CREDIT CONTACTS:
Primary Contact:
Street Address:
City, State, Zip Code:
Phone Number:
Telecopy Number:
Backup Contact:
Street Address:
City, State, Zip Code:
Phone Number:
Telecopy Number:
TAX WITHHOLDING:
Nonresident Alien Y* N
* Form 4224 Enclosed
Tax ID Number _________________________
POST-CLOSING, ONGOING ADMINISTRATIVE CONTACTS/NOTIFICATION METHODS:
ADMINISTRATIVE CONTACTS - BORROWINGS, PAYDOWNS, FEES, ETC.
Contact:
Street Address:
City, State, Zip Code:
Phone Number:
Telecopy Number:
PAYMENT INSTRUCTIONS:
Name of Bank to which funds are to be transferred:
Routing Transit/ABA number of Bank to which funds are to be transferred:
Name of Account, if applicable:
Account Number:
2
Additional information:
MAILINGS:
Please specify the person to whom the Borrower should send financial and
compliance information received subsequent to the closing (if different from
primary credit contact):
Name:
Street Address:
City, State, Zip Code:
It is very important that all the above information be accurately completed and
that this questionnaire be returned to the person specified in the introductory
paragraph of this questionnaire as soon as possible. If there is someone other
than yourself who should receive this questionnaire, please notify us of that
person's name and telecopy number and we will telecopy a copy of the
questionnaire. If you have any questions about this form, please call Lisa
Perrotto at (212) 238-5056.
3
EXHIBIT B
[Form of]
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of March
12, 1996 (the "Credit Agreement"), among Shared Technologies Fairchild
Communications Corp., a Delaware corporation (the "Borrower"), Shared
Technologies Inc., a Delaware corporation ("STFI", which term shall, after the
Merger referred to herein, include the surviving corporation in such Merger),
the financial institutions from time to time party hereto, initially consisting
of those financial institutions listed on Schedule 2.01 (the "Lenders"), CREDIT
SUISSE, a bank organized under the laws of Switzerland, acting through its New
York branch, as administrative agent (in such capacity, the "Administrative
Agent") and as collateral agent (in such capacity, the "Collateral Agent") for
the Lenders, the fronting banks listed on Schedule 2.20 (the "Fronting Banks"),
and each of Citicorp USA, Inc. and NationsBank, N.A., as documentation agent
(individually and collectively in such capacity, the "Documentation Agent").
Terms defined in the Credit Agreement are used herein with the same meanings.
1. The Assignor hereby sells and assigns, without recourse, to
the Assignee, and the Assignee hereby purchases and assumes, without recourse,
from the Assignor, effective as of the Effective Date set forth below (but not
prior to the registration of the information contained herein in the Register
pursuant to Section 9.04(e) of the Credit Agreement), the interests set forth
below (the "Assigned Interest") in the Assignor's rights and obligations under
the Credit Agreement and the other Loan Documents, including, without
limitation, the amounts and percentages set forth below of (i) the Commitments
of the Assignor on the Effective Date, (ii) the Loans owing to the Assignor
which are outstanding on the Effective Date and (iii) participations in Letters
of Credit and L/C Disbursements which are outstanding on the Effective Date.
Each of the Assignor and the Assignee hereby makes and agrees to be bound by all
the representations, warranties and agreements set forth in Section 9.04(c) of
the Credit Agreement, a copy of which has been received by each such party. From
and after the Effective Date (i) the Assignee shall be a party to and be bound
by the provisions of the Credit Agreement and, to the extent of the interests
assigned by this Assignment and Acceptance, have the rights and obligations of a
Lender thereunder and under the Loan Documents and (ii) the Assignor shall, to
the extent of the interests assigned by this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Credit
Agreement.
2. This Assignment and Acceptance is being delivered to the
Administrative Agent together with (i) if the Assignee is organized under the
laws of a jurisdiction outside the United States, the forms specified in Section
2.20(e) of the Credit Agreement, duly completed and executed by such Assignee,
(ii) if the Assignee is not already a Lender under the Credit Agreement, an
Administrative Questionnaire in the form of Exhibit A to the Credit Agreement
and (iii) a processing and recordation fee of $3,500.
3. This Assignment and Acceptance shall be governed by and
construed in accordance with the laws of the State of New York.
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notices:
Effective Date of Assignment
(may not be fewer than 5 Business
Days after the Date of Assignment):
Percentage Assigned of
Applicable
Facility/Commitment (set
forth, to at least 8
decimals, as a percentage
of the Facility and the
Principal Amount aggregate Commitments of
Facility/Commitment Assigned all Lenders thereunder)
Revolving Credit
Commitment $ %
Tranche A Commitment $ %
Tranche A Term Loans $ %
Tranche B Commitment $ %
Tranche B Term Loans $ %
The terms set forth above are
hereby agreed to: Accepted */
_________________, as Assignor CREDIT SUISSE,
as Administrative Agent
by:___________________________ by:________________________
Name: Name:
Title: Title:
by:________________________
Name:
Title:
_________________, as Assignee [Fronting Bank]
by:________________________
Name:
Title:
2
*/ To be completed to the extent consents are required under
Section 9.04(b) of the Credit Agreement.
3
EXHIBIT C
FORM OF BORROWING REQUEST
Credit Suisse, as Administrative Agent for
the Lenders referred to below,
Tower 49
12 East 49th Street
New York, NY 10017
Attention of [ ]
[Date]
Ladies and Gentlemen:
The undersigned, Shared Technologies Fairchild Communications
Corp. (the "Company"), refers to the Credit Agreement dated as of March 12, 1996
(the "Credit Agreement"), among the Company, Shared Technologies Inc., ("STFI",
which term shall, after the Merger referred to herein, include the surviving
corporation in such Merger), the financial institutions from time to time party
thereto (the "Lenders"), Credit Suisse, as administrative agent (in such
capacity, the "Administrative Agent") and as collateral agent (in such capacity,
the "Collateral Agent") for the Lenders, the fronting banks listed on Schedule
2.20 (the "Fronting Banks"), and each of Citicorp USA, Inc. and NationsBank,
N.A., as documentation agent (individually and collectively in such capacity,
the "Documentation Agent"). Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to such terms in the Credit
Agreement. The Company hereby gives you notice pursuant to Section 2.03 of the
Credit Agreement that it requests a Borrowing under the Credit Agreement, and in
that connection sets forth below the terms on which such Borrowing is requested
to be made:
(A) Date of Borrowing
(which is a Business Day ______________________
(B) Principal Amount of
Borrowing 1/ ______________________
- ---------------------
1/ Not less than $5,000,000 and in an integral multiple of $1,000,000,
but in any event not exceeding, as applicable, the available Total Revolving
Credit Commitment or the aggregate amount of the Term Loan Commitments available
at such time.
(C) Interest rate basis ____________________
(D) Type of Borrowing Request 2/ ____________________
-
(E) Interest Period 3/ ____________________
(F) Funds are requested to be disbursed as follows:
Dollar Amount ____________________
Bank Name ____________________
Bank ABA # ____________________
Beneficiary Name ____________________
Beneficiary A/C # ____________________
REF ____________________
Upon acceptance of any or all of the Loans offered by the
Lenders in response to this request, the Company shall be deemed to have
represented and warranted that the conditions to lending specified in Sections
4.01(b) and (c) of the Credit Agreement have been satisfied.
SHARED TECHNOLOGIES FAIRCHILD
COMMUNICATIONS CORP.,
by
______________________
Name:
Title: [Responsible Officer]
- ---------------------
2/ Specify (a) Borrowing of Tranche A Term Loans, Borrowing of Tranche
B Term Loans or Revolving Credit Borrowing and (b) Eurodollar Borrowing or ABR
Borrowing.
3/ Which shall be subject to the definition of "Interest Period" and
end not later than the Tranche A Maturity Date, the Tranche B Maturity Date or
the Revolving Credit Maturity Date (applicable only for Eurodollar Borrowings
only).
2
EXHIBIT D
INDEMNITY, SUBROGATION and CONTRIBUTION
AGREEMENT dated as of March 12, 1996, among SHARED
TECHNOLOGIES FAIRCHILD COMMUNICATIONS CORP., a
Delaware corporation (the "Borrower"), each
Subsidiary of the Borrower listed on Schedule I
hereto (the "Guarantors") and CREDIT SUISSE, a bank
organized under the laws of Switzerland, acting
through its New York branch ("Credit Suisse"), as
collateral agent (in such capacity, the "Collateral
Agent") for the Secured Parties (as defined in the
Credit Agreement referred to below).
Reference is made to (a) the Credit Agreement dated as of
March 12, 1996 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among the Borrower, STFI, the lenders from time
to time party thereto (the "Lenders"), Credit Suisse, as administrative agent
(in such capacity, the "Administrative Agent") and as collateral agent (in such
capacity, the "Collateral Agent") for the Lenders, the fronting banks listed on
Schedule 2.20 (the "Fronting Banks"), and each of Citicorp USA, Inc. and
NationsBank, N.A., as documentation agent (individually and collectively in such
capacity, the "Documentation Agent") and (b) the Subsidiary Guarantee Agreement
dated as of March 12, 1996, among the Guarantors and the Collateral Agent (the
"Guarantee Agreement"). Capitalized terms used herein and not defined herein
shall have the meanings assigned to such terms in the Credit Agreement.
The Lenders have agreed to make Loans to the Borrower, and the
Fronting Banks have agreed to issue Letters of Credit for the account of the
Borrower, pursuant to, and upon the terms and subject to the conditions
specified in, the Credit Agreement. The Guarantors have guaranteed such Loans
and the other Obligations (as defined in the Guarantee Agreement) of the
Borrower under the Credit Agreement pursuant to the Guarantee Agreement; certain
Guarantors have granted Liens on and security interests in certain of their
assets to secure such guarantees. The obligations of the Lenders to make Loans
and of the Fronting Banks to issue Letters of Credit are conditioned on, among
other things, the execution and delivery by the Borrower and the Guarantors of
an agreement in the form hereof.
Accordingly, the Borrower, each Guarantor and the Collateral
Agent agree as follows:
SECTION 1. Indemnity and Subrogation. In addition to all such
rights of indemnity and subrogation as the Guarantors may have under applicable
law (but subject to Section 3), the Borrower agrees that (a) in the event a
payment shall be made by any Guarantor under the Guarantee Agreement, the
Borrower shall indemnify such Guarantor for the full amount of such payment and
such Guarantor shall be subrogated to the rights of the person to whom such
payment shall have been made to the extent of such payment and (b) in the event
any assets of any Guarantor shall be sold pursuant to any Security Document to
satisfy a claim of any Secured Party, the Borrower shall indemnify such
Guarantor in an amount equal to the greater of the book value or the fair market
value of the assets so sold.
SECTION 2. Contribution and Subrogation. Each Guarantor (a
"Contributing Guarantor") agrees (subject to Section 3) that, in the event a
payment shall be made by any other Guarantor under the Guarantee Agreement or
assets of any other Guarantor shall be sold pursuant to any Security Document to
satisfy a claim of any Secured Party and such other Guarantor (the "Claiming
Guarantor") shall not have been fully indemnified by the Borrower as provided in
Section 1, the Contributing Guarantor shall indemnify the Claiming Guarantor in
an amount equal to the amount of such payment or the greater of the book value
or the fair market value of such assets, as the case may be, in each case
multiplied by a fraction of which the numerator shall be the net worth of the
Contributing Guarantor on the date hereof and
the denominator shall be the aggregate net worth of all the Guarantors on the
date hereof (or, in the case of any Guarantor becoming a party hereto pursuant
to Section 12, the date of the Supplement hereto executed and delivered by such
Guarantor). Any Contributing Guarantor making any payment to a Claiming
Guarantor pursuant to this Section 2 shall be subrogated to the rights of such
Claiming Guarantor under Section 1 to the extent of such payment.
SECTION 3. Subordination. Notwithstanding any provision of
this Agreement to the contrary, all rights of the Guarantors under Sections 1
and 2 and all other rights of indemnity, contribution or subrogation under
applicable law or otherwise shall be fully subordinated to the indefeasible
payment in full in cash of the Obligations. No failure on the part of the
Borrower or any Guarantor to make the payments required by Sections 1 and 2 (or
any other payments required under applicable law or otherwise) shall in any
respect limit the obligations and liabilities of any Guarantor with respect to
its obligations hereunder, and each Guarantor shall remain liable for the full
amount of the obligations of such Guarantor hereunder.
SECTION 4. Termination. This Agreement shall survive and be in
full force and effect so long as any Obligation is outstanding and has not been
indefeasibly paid in full in cash, and so long as the L/C Exposure has not been
reduced to zero or any of the Commitments under the Credit Agreement have not
been terminated, and shall continue to be effective or be reinstated, as the
case may be, if at any time payment, or any part thereof, of any Obligation is
rescinded or must otherwise be restored by any Secured Party or any Guarantor
upon the bankruptcy or reorganization of the Borrower, any Guarantor or
otherwise.
SECTION 5. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. No Waiver; Amendment. (a) No failure on the part of
the Collateral Agent or any Guarantor to exercise, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right, power or remedy by the
Collateral Agent or any Guarantor preclude any other or further exercise thereof
or the exercise of any other right, power or remedy. All remedies hereunder are
cumulative and are not exclusive of any other remedies provided by law. None of
the Collateral Agent and the Guarantors shall be deemed to have waived any
rights hereunder unless such waiver shall be in writing and signed by such
parties.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to a written agreement entered into
between the Borrower, the Guarantors and the Collateral Agent, with the prior
written consent of the Required Lenders (except as otherwise provided in the
Credit Agreement).
SECTION 7. Notices. All communications and notices hereunder
shall be in writing and given as provided in the Guarantee Agreement and
addressed as specified therein.
SECTION 8. Binding Agreement; Assignments. Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of the parties that are contained in
this Agreement shall bind and inure to the benefit of their respective
successors and assigns. Neither the Borrower nor any Guarantor may assign or
transfer any of its rights or obligations hereunder (and any such attempted
assignment or transfer shall be void) without the prior written consent of the
Required Lenders.
2
Notwithstanding the foregoing, at the time any Guarantor is released from its
obligations under the Guarantee Agreement in accordance with such Guarantee
Agreement and the Credit Agreement, such Guarantor will cease to have any rights
or obligations under this Agreement.
SECTION 9. Survival of Agreement; Severability. (a) All
covenants and agreements made by the Borrower and each Guarantor herein and in
the certificates or other instruments prepared or delivered in connection with
this Agreement or the other Loan Documents shall be considered to have been
relied upon by the Collateral Agent, the other Secured Parties and each
Guarantor and shall survive the making by the Lenders of the Loans and the
issuance of the Letters of Credit by the Fronting Banks, and shall continue in
full force and effect as long as the principal of or any accrued interest on any
Loans or any other fee or amount payable under the Credit Agreement or this
Agreement or under any of the other Loan Documents is outstanding and unpaid or
the L/C Exposure does not equal zero and as long as the Commitments have not
been terminated.
(b) In case any one or more of the provisions contained in
this Agreement should be held invalid, illegal or unenforceable in any respect,
no party hereto shall be required to comply with such provision for so long as
such provision is held to be invalid, illegal or unenforceable, but the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby. The parties shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 10. Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement shall be effective with
respect to any Guarantor when a counterpart bearing the signature of such
Guarantor shall have been delivered to the Collateral Agent. Delivery of an
executed signature page to this Agreement by facsimile transmission shall be as
effective as delivery of a manually signed counterpart of this Agreement.
SECTION 11. Rules of Interpretation. The rules of
interpretation specified in Section 1.02 of the Credit Agreement shall be
applicable to this Agreement.
SECTION 12. Additional Guarantors. Pursuant to Section 5.11 of
the Credit Agreement, each Subsidiary of STFI, the Borrower or any Subsidiary
that was not in existence or not such a Subsidiary on the date of the Credit
Agreement is required to enter into the Guarantee Agreement as a Guarantor upon
becoming such a Subsidiary. Upon execution and delivery, after the date hereof,
by the Collateral Agent and such a Subsidiary of an instrument in the form of
Annex 1 hereto, such Subsidiary shall become a Guarantor hereunder with the same
force and effect as if originally named as a Guarantor hereunder. The execution
and delivery of any instrument adding an additional Guarantor as a party to this
Agreement shall not require the consent of any Guarantor hereunder. The rights
and obligations of each Guarantor
3
hereunder shall remain in full force and effect notwithstanding the addition of
any new Guarantor as a party to this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers as of the date first
appearing above.
SHARED TECHNOLOGIES FAIRCHILD
COMMUNICATIONS CORP.,
by
_____________________________
Name:
Title:
EACH OF THE SUBSIDIARIES LISTED ON
SCHEDULE I HERETO, as a Guarantor,
by
_____________________________
Name:
Title: Authorized Officer
CREDIT SUISSE, as Collateral Agent,
by
_____________________________
Name:
Title:
by
_____________________________
Name:
Title:
4
SCHEDULE I
GUARANTORS to the Indemnity Subrogation
and Contribution Agreement
Name Address
5
Annex 1 to
the Indemnity, Subrogation and
Contribution Agreement
SUPPLEMENT NO. dated as of [ ], to the
Indemnity, Subrogation and Contribution Agreement
dated as of March 12, 1996 (as the same may be
amended, supplemented or otherwise modified from time
to time, the "Indemnity, Subrogation and Contribution
Agreement"), among SHARED TECHNOLOGIES FAIRCHILD
COMMUNICATIONS CORP., a Delaware corporation (the
"Borrower") each Subsidiary of the Borrower listed on
Shedule I thereto (the "Guarantors"), and CREDIT
SUISSE, a bank organized under the laws of
Switzerland, acting through its New York branch
("Credit Suisse"), as collateral agent (the
"Collateral Agent") for the Secured Parties (as
defined in the Credit Agreement referred to below).
A. Reference is made to (a) the Credit Agreement dated as of
March 12, 1996 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among the Borrower, STFI, the lenders from time
to time party thereto (the "Lenders"), Credit Suisse, as administrative agent
(in such capacity, the "Administrative Agent") and as collateral agent (in such
capacity, the "Collateral Agent") for the Lenders, the fronting banks listed on
Schedule 2.20 (the "Fronting Banks"), and each of Citicorp USA, Inc. and
NationsBank, N.A., as documentation agent (individually and collectively in such
capacity, the "Documentation Agent") and (b) the Subsidiary Guarantee Agreement
dated as of March 12, 1996, among the Guarantors and the Collateral Agent (the
"Guarantee Agreement").
B. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Indemnity,
Subrogation and Contribution Agreement and the Credit Agreement.
C. The Borrower and the Guarantors have entered into the
Indemnity, Subrogation and Contribution Agreement in order to induce the Lenders
to make Loans and the Fronting Banks to issue Letters of Credit. Pursuant to
Section 5.11 of the Credit Agreement, each Subsidiary of STFI, the Borrower or
any Subsidiary that was not in existence or not such a Subsidiary on the date of
the Credit Agreement is required to enter into the Guarantee Agreement as a
Guarantor upon becoming a Subsidiary. Section 12 of the Indemnity, Subrogation
and Contribution Agreement provides that additional Subsidiaries of the Borrower
may become Guarantors under the Indemnity, Subrogation and Contribution
Agreement by execution and delivery of an instrument in the form of this
Supplement. The undersigned Subsidiary of the Borrower (the "New Guarantor") is
executing this Supplement in accordance with the requirements of the Credit
Agreement to become a Guarantor under the Indemnity, Subrogation and
Contribution Agreement in order to induce the Lenders to make additional Loans
and the Fronting Banks to issue additional Letters of Credit and as
consideration for Loans previously made and Letters of Credit previously issued.
Accordingly, the Collateral Agent and the New Guarantor agree
as follows:
SECTION 1. In accordance with Section 12 of the Indemnity,
Subrogation and Contribution Agreement, the New Guarantor by its signature below
becomes a Guarantor under the Indemnity, Subrogation and Contribution Agreement
with the same force and effect as if originally named therein as a Guarantor and
the New Guarantor hereby agrees to all the terms and provisions of the
Indemnity, Subrogation and Contribution Agreement applicable to it as a
Guarantor thereunder. Each reference to a "Guarantor" in the Indemnity,
Subrogation and Contribution Agreement shall be deemed to include the New
Guarantor. The Indemnity, Subrogation and Contribution Agreement is hereby
incorporated herein by reference.
SECTION 2. The New Guarantor represents and warrants to the
Collateral Agent and the other Secured Parties that this Supplement has been
duly authorized, executed and delivered by it and constitutes its legal, valid
and binding obligation, enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Supplement shall become effective when the Collateral
Agent shall have received counterparts of this Supplement that, when taken
together, bear the signatures of the New Guarantor and the Collateral Agent.
Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Supplement.
SECTION 4. Except as expressly supplemented hereby, the
Indemnity, Subrogation and Contribution Agreement shall remain in full force and
effect.
SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. In case any one or more of the provisions contained
in this Supplement should be held invalid, illegal or unenforceable in any
respect, neither party hereto shall be required to comply with such provision
for so long as such provision is held to be invalid, illegal or unenforceable,
but the validity, legality and enforceability of the remaining provisions
contained herein and in the Indemnity, Subrogation and Contribution Agreement
shall not in any way be affected or impaired. The parties hereto shall endeavor
in good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
SECTION 7. All communications and notices hereunder shall be
in writing and given as provided in Section 7 of the Indemnity, Subrogation and
Contribution Agreement. All communications and notices hereunder to the New
Guarantor shall be given to it at the address set forth under its signature.
2
SECTION 8. The New Guarantor agrees to reimburse the
Collateral Agent for its reasonable out-of-pocket expenses in connection with
this Supplement, including the reasonable fees, other charges and disbursements
of counsel for the Collateral Agent.
IN WITNESS WHEREOF, the New Guarantor and the Collateral Agent
have duly executed this Supplement to the Indemnity, Subrogation and
Contribution Agreement as of the day and year first above written.
[Name Of New Guarantor],
by
____________________________
Name:
Title:
Address:
CREDIT SUISSE, as Collateral
Agent,
by
____________________________
Name:
Title:
by
____________________________
Name:
Title:
3
SCHEDULE I
to Supplement No.___ to the Indemnity
Subrogation and Contribution Agreement
GUARANTORS
Name Address
EXHIBIT E
PARENT GUARANTEE AGREEMENT dated as of March
12, 1996, between SHARED TECHNOLOGIES INC., a
Delaware corporation (the "Guarantor", which term
shall, after the Merger referred to in the Credit
Agreement referred to below, include the surviving
corporation in such Merger) and CREDIT SUISSE, a bank
organized under the laws of Switzerland, acting
through its New York branch, as collateral agent (the
"Collateral Agent") for the Secured Parties (as
defined in the Credit Agreement referred to below).
Reference is made to the Credit Agreement dated as of March
12, 1996 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among Shared Technologies Fairchild Communications Corp., a
Delaware corporation (the "Borrower"), the Guarantor, the lenders from time to
time party thereto (the "Lenders"), Credit Suisse, as administrative agent (in
such capacity, the "Administrative Agent") and as collateral agent (in such
capacity, the "Collateral Agent") for the Lenders, the fronting banks listed on
Schedule 2.20 (the "Fronting Banks"), and each of Citicorp USA, Inc. and
NationsBank, N.A., as documentation agent (individually and collectively in such
capacity, the "Documentation Agent"). Capitalized terms used herein and not
defined herein shall have the meanings assigned to such terms in the Credit
Agreement.
The Lenders have agreed to make Loans to the Borrower, and the
Fronting Banks have agreed to issue Letters of Credit for the account of the
Borrower, pursuant to, and upon the terms and subject to the conditions
specified in, the Credit Agreement. As the owner of all of the issued and
outstanding capital stock of the Borrower, the Guarantor acknowledges that it
will derive substantial benefit from the making of the Loans by the Lenders and
the issuance of the Letters of Credit by the Fronting Banks. The obligations of
the Lenders to make Loans and of the Fronting Banks to issue Letters of Credit
are conditioned on, among other things, the execution and delivery by the
Guarantor of a Guarantee Agreement in the form hereof. As consideration therefor
and in order to induce the Lenders to make Loans and the Fronting Banks to issue
Letters of Credit, the Guarantor is willing to execute this Agreement.
Accordingly, the parties hereto agree as follows:
SECTION 1. Guarantee. The Guarantor unconditionally
guarantees, as a primary obligor and not merely as a surety, (a) the due and
punctual payment of (i) the principal of and premium, if any, and interest
(including interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding) on the Loans, when and as due, whether at
maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, (ii) each payment required to be made by the Borrower under the
Credit Agreement in respect of any Letter of Credit, when and as due, including
payments in respect of reimbursement of disbursements, interest thereon and
obligations to provide cash collateral and (iii) all other monetary obligations,
including fees, costs, expenses and indemnities, whether primary, secondary,
direct, contingent, fixed or otherwise (including monetary obligations incurred
during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding), of
the Loan Parties to the Secured Parties under the Credit Agreement and the other
Loan Documents, (b) the due and punctual performance of all covenants,
agreements, obligations and liabilities of the Loan Parties under or pursuant to
the Credit Agreement and the other Loan Documents and (c) unless otherwise
agreed upon in writing by the applicable Lender party thereto, all obligations
of the Borrower, monetary or otherwise, under each Interest Rate Protection
Agreement entered into with a counterparty that was a Lender at the time such
Interest Rate Protection Agreement was entered into (all the monetary and other
obligations
referred to in the preceding clauses (a) through (c) being collectively called
the "Obligations"). The Guarantor further agrees that the Obligations may be
extended or renewed, in whole or in part, without notice to or further assent
from it, and that it will remain bound upon its guarantee notwithstanding any
extension or renewal of any Obligation. The Guarantor further agrees that (a)
the maturity of the Obligations guaranteed hereby may be accelerated as provided
in Article VII of the Credit Agreement for the purposes of the Guarantor's
guarantee herein, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the Obligations guaranteed hereby,
and (b) in the event of any declaration of acceleration of such obligations as
provided in such Article VII, such Obligations (whether or not due and payable)
shall forthwith become due and payable by the Guarantor for the purposes of this
Section.
SECTION 2. Obligations Not Waived. To the fullest extent
permitted by applicable law, the Guarantor waives presentment to, demand of
payment from and protest to the Borrower of any of the Obligations, and also
waives notice of acceptance of its guarantee and notice of protest for
nonpayment. To the fullest extent permitted by applicable law, the obligations
of the Guarantor hereunder shall not be affected by (a) the failure of the
Collateral Agent or any other Secured Party to assert any claim or demand or to
enforce or exercise any right or remedy against the Borrower or any other
guarantor of the Obligations under the provisions of the Credit Agreement, any
other Loan Document or otherwise, (b) any rescission, waiver, amendment or
modification of, or any release from any of the terms or provisions of this
Agreement, any other Loan Document, any Guarantee or any other agreement,
including with respect to any other guarantor of the Obligations or (c) the
failure to perfect any security interest in, or the release of, any of the
security held by or on behalf of the Collateral Agent or any other Secured
Party.
SECTION 3. Security. The Guarantor authorizes the Collateral
Agent and each of the other Secured Parties to (a) take and hold security for
the payment of this Guarantee and the Obligations and exchange, enforce, waive
and release any such security, (b) apply such security and direct the order or
manner of sale thereof as they in their sole discretion may determine and (c)
release or substitute any one or more endorsees, other guarantors or other
obligors.
SECTION 4. Guarantee of Payment. The Guarantor further agrees
that its guarantee constitutes a guarantee of payment when due and not of
collection, and waives any right to require that any resort be had by the
Collateral Agent or any other Secured Party to any of the security held for
payment of the Obligations or to any balance of any deposit account or credit on
the books of the Collateral Agent or any other Secured Party in favor of the
Borrower or any other person.
SECTION 5. No Discharge or Diminishment of Guarantee. The
obligations of the Guarantor hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason (other than the
indefeasible payment in full in cash of the Obligations), including any claim of
waiver, release, surrender, alteration or compromise of any of the Obligations,
and shall not be subject to any defense or setoff, counterclaim, recoupment or
termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of the Guarantor hereunder shall
not be discharged or impaired or otherwise affected by the failure of the
Collateral Agent or any other Secured Party to assert any claim or demand or to
enforce any remedy under the Credit Agreement, any other Loan Document or any
other agreement, by any waiver or modification of any provision of any thereof,
by any default, failure or delay, wilful or otherwise, in the performance of the
Obligations, or by any other act or omission that may or might in any manner or
to any extent vary the risk of the Guarantor or that would otherwise operate as
a discharge of the Guarantor as a matter of law or equity (other than the
indefeasible payment in full in cash of all the
2
Obligations).
SECTION 6. Defenses of Borrower Waived. To the fullest extent
permitted by applicable law, the Guarantor waives any defense based on or
arising out of any defense of the Borrower or the unenforceability of the
Obligations or any part thereof from any cause, or the cessation from any cause
of the liability of the Borrower, other than the final and indefeasible payment
in full in cash of the Obligations. The Collateral Agent and the other Secured
Parties may, at their election, foreclose on any security held by one or more of
them by one or more judicial or nonjudicial sales, accept an assignment of any
such security in lieu of foreclosure, compromise or adjust any part of the
Obligations, make any other accommodation with the Borrower or any other
guarantor or exercise any other right or remedy available to them against the
Borrower or any other guarantor, without affecting or impairing in any way the
liability of the Guarantor hereunder except to the extent the Obligations have
been fully, finally and indefeasibly paid in cash. To the fullest extent
permitted by applicable law, the Guarantor waives any defense arising out of any
such election even though such election operates, pursuant to applicable law, to
impair or to extinguish any right of reimbursement or subrogation or other right
or remedy of the Guarantor against the Borrower or any other guarantor, as the
case may be, or any security.
SECTION 7. Agreement to Pay; Subordination. In furtherance of
the foregoing and not in limitation of any other right that the Collateral Agent
or any other Secured Party has at law or in equity against the Guarantor by
virtue hereof, upon the failure of the Borrower or any other Loan Party to pay
any Obligation when and as the same shall become due, whether at maturity, by
acceleration, after notice of prepayment or otherwise, the Guarantor hereby
promises to and will forthwith pay, or cause to be paid, to the Collateral Agent
or such other Secured Party as designated thereby in cash the amount of such
unpaid Obligations. Upon payment by the Guarantor of any sums to the Collateral
Agent or any Secured Party as provided above, all rights of the Guarantor
against the Borrower arising as a result thereof by way of right of subrogation,
contribution, reimbursement, indemnity or otherwise shall in all respects be
subordinate and junior in right of payment to the prior indefeasible payment in
full in cash of all the Obligations. In addition, any indebtedness of the
Borrower now or hereafter held by the Guarantor is hereby subordinated in right
of payment to the prior payment in full of the Obligations. If any amount shall
erroneously be paid to the Guarantor on account of (i) such subrogation,
contribution, reimbursement, indemnity or similar right or (ii) any such
indebtedness of the Borrower, such amount shall be held in trust for the benefit
of the Secured Parties and shall forthwith be paid to the Collateral Agent to be
credited against the payment of the Obligations, whether matured or unmatured,
in accordance with the terms of the Loan Documents.
SECTION 8. Information. The Guarantor assumes all
responsibility for being and keeping itself informed of the Borrower's financial
condition and assets, and of all other circumstances bearing upon the risk of
nonpayment of the Obligations and the nature, scope and extent of the risks that
the Guarantor assumes and incurs hereunder, and agrees that none of the
Collateral Agent or the other Secured Parties will have any duty to advise the
Guarantor of information known to it or any of them regarding such circumstances
or risks.
SECTION 9. Termination. The Guarantee made hereunder (a) shall
terminate when all the Obligations have been indefeasibly paid in full and the
Lenders have no further commitment to lend under the Credit Agreement, the L/C
Exposure has been reduced to zero and the Fronting Banks have no further
obligation to issue Letters of Credit under the Credit Agreement and (b) shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any Obligation is rescinded or must otherwise
be restored by any Secured Party or the Guarantor upon the bankruptcy or
reorganization of the Borrower, the Guarantor or otherwise.
3
SECTION 10. Binding Agreement; Assignments. Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of the Guarantor that are contained in
this Agreement shall bind and inure to the benefit of each party hereto and
their respective successors and assigns. This Agreement shall become effective
when a counterpart hereof executed on behalf of the Guarantor shall have been
delivered to the Collateral Agent and a counterpart hereof shall have been
executed on behalf of the Collateral Agent, and thereafter shall be binding upon
the Guarantor and the Collateral Agent and their respective successors and
assigns, and shall inure to the benefit of the Guarantor, the Collateral Agent
and the other Secured Parties, and their respective successors and assigns,
except that the Guarantor shall not have the right to assign its rights or
obligations hereunder or any interest herein (and any such attempted assignment
shall be void).
SECTION 11. Waivers; Amendment. (a) No failure or delay of the
Collateral Agent in exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Collateral Agent hereunder
and of the other Secured Parties under the other Loan Documents are cumulative
and are not exclusive of any rights or remedies that they would otherwise have.
No waiver of any provision of this Agreement or consent to any departure by the
Guarantor therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) below, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice or demand on the Guarantor in any case shall entitle the Guarantor to any
other or further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to a written agreement entered into between
the Guarantor and the Collateral Agent, with the prior written consent of the
Required Lenders (except as otherwise provided in the Credit Agreement).
SECTION 12. Governing Law. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 13. Notices. All communications and notices hereunder
shall be in writing and given as provided in Section 9.01 of the Credit
Agreement. All communications and notices hereunder to the Guarantor shall be
given to it at 100 Great Meadow Road Wethersfield, CT 06109, Attention of Chief
Executive Officer.
SECTION 14. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Guarantors herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Collateral Agent and the other Secured Parties and
shall survive the making by the Lenders of the Loans and the issuance of the
Letters of Credit by the Fronting Banks regardless of any investigation made by
the Secured Parties or on their behalf, and shall continue in full force and
effect as long as the principal of or any accrued interest on any Loan or any
other fee or amount payable under this Agreement or any other Loan Document is
outstanding and unpaid or the L/C Exposure does not equal zero and as long as
the Commitments and the L/C Commitment have not been terminated.
SECTION 15. Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute a single contract,
4
and shall become effective as provided in Section 10. Delivery of an executed
signature page to this Agreement by facsimile transmission shall be as effective
as delivery of a manually executed counterpart of this Agreement.
SECTION 16. Rules of Interpretation. The rules of
interpretation specified in Section 1.02 of the Credit Agreement shall be
applicable to this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
SHARED TECHNOLOGIES INC., as
Guarantor,
by
____________________________
Name:
Title:
CREDIT SUISSE, as Collateral Agent,
by
____________________________
Name:
Title:
by
____________________________
Name:
Title:
EXHIBIT F
PLEDGE AGREEMENT dated as of March 13, 1996,
among SHARED TECHNOLOGIES FAIRCHILD COMMUNICATIONS
CORP., a Delaware corporation (the "Borrower"),
SHARED TECHNOLOGIES FAIRCHILD INC., a Delaware
corporation ("STFI", which term shall, after the
Merger referred to in the Credit Agreement referred
to below, include the surviving corporation in such
Merger), each Subsidiary of the Borrower listed on
Schedule I hereto (each such Subsidiary individually
a "Subsidiary Pledgor" and collectively, the
"Subsidiary Pledgors"; the Borrower, STFI and the
Subsidiary Pledgors are referred to collectively
herein as the "Pledgors") and CREDIT SUISSE, a bank
organized under the laws of Switzerland, acting
through its New York branch ("Credit Suisse"), as
collateral agent (in such capacity, the "Collateral
Agent") for the Secured Parties (as defined in the
Credit Agreement referred to below).
Reference is made to (a) the Credit Agreement dated as of
March 12, 1996 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among the Borrower, STFI, the lenders from time
to time party thereto (the "Lenders"), Credit Suisse, as administrative agent
(in such capacity, the "Administrative Agent") and as collateral agent (in such
capacity, the "Collateral Agent") for the Lenders, the fronting banks listed on
Schedule 2.20 (the "Fronting Banks"), and each of Citicorp USA, Inc. and
NationsBank, N.A., as documentation agent (individually and collectively in such
capacity, the "Documentation Agent"), (b) the Parent Guarantee Agreement dated
as of March 12, 1996 (as amended, supplemented or otherwise modified from time
to time, the "Parent Guarantee Agreement"), between STFI and the Collateral
Agent and (c) the Subsidiary Guarantee Agreement dated as of March 12, 1996 (as
amended, supplemented or otherwise modified from time to time, the "Subsidiary
Guarantee Agreement"; and, collectively with the Parent Guarantee Agreement, the
"Guarantee Agreements") among the Subsidiary Pledgors and the Collateral Agent.
The Lenders have agreed to make Loans to the Borrower and the
Fronting Banks have agreed to issue Letters of Credit for the account of the
Borrower, pursuant to, and upon the terms and subject to the conditions
specified in, the Credit Agreement. STFI and the Subsidiary Guarantors have
agreed to guarantee, among other things, all the obligations of the Borrower
under the Credit Agreement. The obligations of the Lenders to make Loans and of
the Fronting Banks to issue Letters of Credit are conditioned upon, among other
things, the execution and delivery by the Pledgors of a Pledge Agreement in the
form hereof to secure (a) the due and punctual payment by the Borrower of (i)
the principal of and premium, if any, and interest (including interest accruing
during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) on
the Loans, when and as due, whether at maturity, by acceleration, upon one or
more dates set for prepayment or otherwise, (ii) each payment required to be
made by the Borrower under the Credit Agreement in respect of any Letter of
Credit, when and as due, including payments in respect of reimbursement of
disbursements, interest thereon and obligations to provide cash collateral and
(iii) all other monetary obligations, including fees, costs, expenses and
indemnities, whether primary, secondary, direct, contingent, fixed or otherwise
(including monetary obligations incurred during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding), of the Borrower to the Secured Parties
under the Credit Agreement and the other Loan Documents, (b) the due and
punctual performance of all covenants, agreements, obligations and liabilities
of the Borrower under or pursuant to the Credit Agreement and the other Loan
Documents, (c) the due and punctual payment and performance of all the
covenants, agreements, obligations and liabilities of STFI under or pursuant to
the Parent Guarantee Agreement or the other Loan Documents, (d) the due and
punctual payment and performance of all the covenants, agreements, obligations
and liabilities of each
Subsidiary Pledgor under or pursuant to the Subsidiary Guarantee Agreement or
the other Loan Documents and (e) the due and punctual payment and performance of
all obligations of the Borrower under each Interest Rate Protection Agreement
entered into with any counterparty that was a Lender at the time such Interest
Rate Protection Agreement was entered into (all the monetary and other
obligations referred to in the preceding clauses (a) through (e) being referred
to collectively as the "Obligations"). Capitalized terms used herein and not
defined herein shall have meanings assigned to such terms in the Credit
Agreement.
Accordingly, the Pledgors and the Collateral Agent, on behalf
of itself and each Secured Party (and each of their respective successors or
assigns), hereby agree as follows:
SECTION 1. Pledge. As security for the payment and
performance, as the case may be, in full of the Obligations, each Pledgor hereby
transfers, grants, bargains, sells, conveys, hypothecates, pledges, sets over
and delivers unto the Collateral Agent, its successors and assigns, and hereby
grants to the Collateral Agent, its successors and assigns, for the ratable
benefit of the Secured Parties, a security interest in all of the Pledgor's
right, title and interest in, to and under (a) the shares of capital stock owned
by it and listed on Schedule II hereto and any shares of capital stock obtained
in the future by the Pledgor and the certificates representing all such shares
(the "Pledged Stock"); provided that the Pledged Stock shall not include, to the
extent that applicable law requires that a subsidiary of the Pledgor issue
directors' qualifying shares, such qualifying shares; (b)(i) the debt securities
listed opposite the name of the Pledgor on Schedule II hereto, (ii) any debt
securities in the future issued to the Pledgor and (iii) the promissory notes
and any other instruments evidencing such debt securities (the "Pledged Debt
Securities"); (c) all other property that may be delivered to and held by the
Collateral Agent pursuant to the terms hereof; (d) subject to Section 5, all
payments of principal or interest, dividends, cash, instruments and other
property from time to time received, receivable or otherwise distributed, in
respect of, in exchange for or upon the conversion of the securities referred to
in clauses (a) and (b) above; (e) subject to Section 5, all rights and
privileges of the Pledgor with respect to the securities and other property
referred to in clauses (a), (b), (c) and (d) above; and (f) all proceeds of any
of the foregoing (the items referred to in clauses (a) through (f) above being
collectively referred to as the "Collateral"). Upon delivery to the Collateral
Agent, (a) any stock certificates, notes or other securities now or hereafter
included in the Collateral (the "Pledged Securities") shall be accompanied by
undated stock powers duly executed in blank or other instruments of transfer
satisfactory to the Collateral Agent and by such other instruments and documents
as the Collateral Agent may reasonably request and (b) all other property
comprising part of the Collateral shall be accompanied by proper instruments of
assignment duly executed by the applicable Pledgor and such other instruments or
documents as the Collateral Agent may reasonably request. Each delivery of
Pledged Securities shall be accompanied by a schedule describing the securities
theretofore and then being pledged hereunder, which schedule shall be attached
hereto as Schedule II and made a part hereof. Each schedule so delivered shall
supersede any prior schedules so delivered.
TO HAVE AND TO HOLD the Collateral, together with all right,
title, interest, powers, privileges and preferences pertaining or incidental
thereto, unto the Collateral Agent, its successors and assigns, for the ratable
benefit of the Secured Parties, forever; subject, however, to the terms,
covenants and conditions hereinafter set forth.
SECTION 2. Delivery of the Collateral. (a) Each Pledgor agrees
promptly to deliver or cause to be delivered to the Collateral Agent any and all
Pledged Securities, and any and all certificates or other instruments or
documents representing the Collateral.
(b) Each Pledgor will cause any Indebtedness for borrowed
money owed to the Pledgor by
2
any person to be evidenced by a duly executed promissory note that is pledged
and delivered to the Collateral Agent pursuant to the terms thereof.
SECTION 3. Representations, Warranties and Covenants. Each
Pledgor hereby represents, warrants and covenants, as to itself and the
Collateral pledged by it hereunder, to and with the Collateral Agent that:
(a) the Pledged Stock represents that percentage as set forth
on Schedule II of the issued and outstanding shares of each class of
the capital stock of the issuer with respect thereto;
(b) except for the security interest granted hereunder, the
Pledgor (i) is and will at all times continue to be the direct owner,
beneficially and of record, of the Pledged Securities indicated on
Schedule II, (ii) holds the same free and clear of all Liens, (iii)
will make no assignment, pledge, hypothecation or transfer of, or
create or permit to exist any security interest in or other Lien on,
the Collateral, other than pursuant hereto, and (iv) subject to Section
5, will cause any and all Collateral, whether for value paid by the
Pledgor or otherwise, to be forthwith deposited with the Collateral
Agent and pledged or assigned hereunder;
(c) the Pledgor (i) has the power and authority to pledge the
Collateral in the manner hereby done or contemplated and (ii) will
defend its title or interest thereto or therein against any and all
Liens (other than the Lien created by this Agreement), however arising,
of all persons whomsoever;
(d) no consent of any other person (including stockholders or
creditors of any Pledgor) and no consent or approval of any
Governmental Authority or any securities exchange was or is necessary
to the validity of the pledge effected hereby;
(e) by virtue of the execution and delivery by the Pledgors of
this Agreement, when the Pledged Securities, certificates or other
documents representing or evidencing the Collateral are delivered to
the Collateral Agent in accordance with this Agreement, the Collateral
Agent will obtain a valid and perfected first lien upon and security
interest in such Pledged Securities as security for the payment and
performance of the Obligations;
(f) the pledge effected hereby is effective to vest in the
Collateral Agent, on behalf of the Secured Parties, the rights of the
Collateral Agent in the Collateral as set forth herein;
(g) all of the Pledged Stock has been duly authorized and
validly issued and is fully paid and nonassessable;
(h) all information set forth herein relating to the Pledged
Stock is accurate and complete in all material respects as of the date
hereof; and
(i) the pledge of the Pledged Stock pursuant to this Agreement
does not violate Regulation G, T, U or X of the Federal Reserve Board
or any successor thereto as of the date hereof.
3
SECTION 4. Registration in Nominee Name; Denominations. The
Collateral Agent, on behalf of the Secured Parties, shall have the right (in its
sole and absolute discretion) to hold the Pledged Securities in its own name as
pledgee, the name of its nominee (as pledgee or as sub-agent) or the name of the
Pledgors, endorsed or assigned in blank or in favor of the Collateral Agent.
Each Pledgor will promptly give to the Collateral Agent copies of any notices or
other communications received by it with respect to Pledged Securities
registered in the name of such Pledgor. The Collateral Agent shall at all times
have the right to exchange the certificates representing Pledged Securities for
certificates of smaller or larger denominations for any purpose consistent with
this Agreement.
SECTION 5. Voting Rights; Dividends and Interest, etc. (a)
Unless and until an Event of Default shall have occurred and be continuing:
(i) Each Pledgor shall be entitled to exercise any and all
voting and/or other consensual rights and powers inuring to an owner of
Pledged Securities or any part thereof for any purpose consistent with
the terms of this Agreement, the Credit Agreement and the other Loan
Documents; provided, however, that such Pledgor will not be entitled to
exercise any such right if the result thereof could materially and
adversely affect the rights inuring to a holder of the Pledged
Securities or the rights and remedies of any of the Secured Parties
under this Agreement or the Credit Agreement or any other Loan Document
or the ability of the Secured Parties to exercise the same.
(ii) The Collateral Agent shall execute and deliver to each
Pledgor, or cause to be executed and delivered to each Pledgor, all
such proxies, powers of attorney and other instruments as such Pledgor
may reasonably request for the purpose of enabling such Pledgor to
exercise the voting and/or consensual rights and powers it is entitled
to exercise pursuant to subparagraph (i) above and to receive the cash
dividends it is entitled to receive pursuant to subparagraph (iii)
below.
(iii) Each Pledgor shall be entitled to receive and retain any and
all cash dividends, interest and principal paid on the Pledged
Securities to the extent and only to the extent that such cash
dividends, interest and principal are permitted by, and otherwise paid
in accordance with, the terms and conditions of the Credit Agreement,
the other Loan Documents and applicable laws. All noncash dividends,
interest and principal, and all dividends, interest and principal paid
or payable in cash or otherwise in connection with a partial or total
liquidation or dissolution, return of capital, capital surplus or
paid-in surplus, and all other distributions (other than distributions
referred to in the preceding sentence) made on or in respect of the
Pledged Securities, whether paid or payable in cash or otherwise,
whether resulting from a subdivision, combination or reclassification
of the outstanding capital stock of the issuer of any Pledged
Securities or received in exchange for Pledged Securities or any part
thereof, or in redemption thereof, or as a result of any merger,
consolidation, acquisition or other exchange of assets to which such
issuer may be a party or otherwise, shall be and become part of the
Collateral, and, if received by any Pledgor, shall not be commingled by
such Pledgor with any of its other funds or property but shall be held
separate and apart therefrom, shall be held in trust for the benefit of
the Collateral Agent and shall be forthwith delivered to the Collateral
Agent in the same form as so received (with any necessary endorsement).
(b) Upon the occurrence and during the continuance of an Event
of Default, all rights of any Pledgor to dividends, interest or principal that
such Pledgor is authorized to receive pursuant to paragraph (a)(iii) above shall
cease, and all such rights shall thereupon become vested in the Collateral
Agent, which shall have the sole and exclusive right and authority to receive
and retain such dividends,
4
interest or principal. All dividends, interest or principal received by the
Pledgor contrary to the provisions of this Section 5 shall be held in trust for
the benefit of the Collateral Agent, shall be segregated from other property or
funds of such Pledgor and shall be forthwith delivered to the Collateral Agent
upon demand in the same form as so received (with any necessary endorsement).
Any and all money and other property paid over to or received by the Collateral
Agent pursuant to the provisions of this paragraph (b) shall be retained by the
Collateral Agent in an account to be established by the Collateral Agent upon
receipt of such money or other property and shall be applied in accordance with
the provisions of Section 7. After all Events of Default have been cured or
waived, the Collateral Agent shall, within five Business Days after all such
Events of Default have been cured or waived, repay to each Pledgor all cash
dividends, interest or principal (without interest), that such Pledgor would
otherwise be permitted to retain pursuant to the terms of paragraph (a)(iii)
above and which remain in such account.
(c) Upon the occurrence and during the continuance of an Event
of Default, all rights of any Pledgor to exercise the voting and consensual
rights and powers it is entitled to exercise pursuant to paragraph (a)(i) of
this Section 5, and the obligations of the Collateral Agent under paragraph
(a)(ii) of this Section 5, shall cease, and all such rights shall thereupon
become vested in the Collateral Agent, which shall have the sole and exclusive
right and authority to exercise such voting and consensual rights and powers;
provided that, unless otherwise directed by the Required Lenders, the Collateral
Agent shall have the right from time to time following and during the
continuance of an Event of Default to permit the Pledgors to exercise such
rights; provided further that, notwithstanding the foregoing, all voting and
consensual rights and powers shall remain with the Pledgor pending receipt of
any necessary approval of the Federal Communications Commission ("FCC") of any
assignment of transfer of control of the FCC licenses held by the Borrower or
any Subsidiary. After all Events of Default have been cured or waived, such
Pledgor will have the right to exercise the voting and consensual rights and
powers that it would otherwise be entitled to exercise pursuant to the terms of
paragraph (a)(i) above.
SECTION 6. Remedies upon Default. Upon the occurrence and
during the continuance of an Event of Default, subject to applicable regulatory
and legal requirements, the Collateral Agent may sell the Collateral, or any
part thereof, at public or private sale or at any broker's board or on any
securities exchange, for cash, upon credit or for future delivery as the
Collateral Agent shall deem appropriate. The Collateral Agent shall be
authorized at any such sale (if it deems it advisable to do so) to restrict the
prospective bidders or purchasers to persons who will represent and agree that
they are purchasing the Collateral for their own account for investment and not
with a view to the distribution or sale thereof, and upon consummation of any
such sale the Collateral Agent shall have the right to assign, transfer and
deliver to the purchaser or purchasers thereof the Collateral so sold. Each such
purchaser at any such sale shall hold the property sold absolutely free from any
claim or right on the part of any Pledgor, and, to the extent permitted by
applicable law, the Pledgors hereby waive all rights of redemption, stay,
valuation and appraisal any Pledgor now has or may at any time in the future
have under any rule of law or statute now existing or hereafter enacted.
The Collateral Agent shall give a Pledgor 10 days' prior
written notice (which each Pledgor agrees is reasonable notice within the
meaning of Section 9-504(3) of the Uniform Commercial Code as in effect in the
State of New York or its equivalent in other jurisdictions) of the Collateral
Agent's intention to make any sale of such Pledgor's Collateral. Such notice, in
the case of a public sale, shall state the time and place for such sale and, in
the case of a sale at a broker's board or on a securities exchange, shall state
the board or exchange at which such sale is to be made and the day on which the
Collateral, or portion thereof, will first be offered for sale at such board or
exchange. Any such public sale shall be held at such time or times within
ordinary business hours and at such place or places as the Collateral Agent
5
may fix and state in the notice of such sale. At any such sale, the Collateral,
or portion thereof, to be sold may be sold in one lot as an entirety or in
separate parcels, as the Collateral Agent may (in its sole and absolute
discretion) determine. The Collateral Agent shall not be obligated to make any
sale of any Collateral if it shall determine not to do so, regardless of the
fact that notice of sale of such Collateral shall have been given. The
Collateral Agent may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by announcement
at the time and place fixed for sale, and such sale may, without further notice,
be made at the time and place to which the same was so adjourned. In case any
sale of all or any part of the Collateral is made on credit or for future
delivery, the Collateral so sold may be retained by the Collateral Agent until
the sale price is paid in full by the purchaser or purchasers thereof, but the
Collateral Agent shall not incur any liability in case any such purchaser or
purchasers shall fail to take up and pay for the Collateral so sold and, in case
of any such failure, such Collateral may be sold again upon like notice. At any
public (or, to the extent permitted by applicable law, private) sale made
pursuant to this Section 6, any Secured Party may bid for or purchase, free from
any right of redemption, stay or appraisal on the part of any Pledgor (all said
rights being also hereby waived and released), the Collateral or any part
thereof offered for sale and may make payment on account thereof by using any
claim then due and payable to it from such Pledgor as a credit against the
purchase price, and it may, upon compliance with the terms of sale, hold, retain
and dispose of such property without further accountability to such Pledgor
therefor. For purposes hereof, (a) a written agreement to purchase the
Collateral or any portion thereof shall be treated as a sale thereof, (b) the
Collateral Agent shall be free to carry out such sale pursuant to such agreement
and (c) such Pledgor shall not be entitled to the return of the Collateral or
any portion thereof subject thereto, notwithstanding the fact that after the
Collateral Agent shall have entered into such an agreement all Events of Default
shall have been remedied and the Obligations paid in full. As an alternative to
exercising the power of sale herein conferred upon it, the Collateral Agent may
proceed by a suit or suits at law or in equity to foreclose upon the Collateral
and to sell the Collateral or any portion thereof pursuant to a judgment or
decree of a court or courts having competent jurisdiction or pursuant to a
proceeding by a court-appointed receiver. Any sale pursuant to the provisions of
this Section 6 shall be deemed to conform to the commercially reasonable
standards as provided in Section 9-504(3) of the Uniform Commercial Code as in
effect in the State of New York or its equivalent in other jurisdictions.
SECTION 7. Application of Proceeds of Sale. The proceeds of
any sale of Collateral pursuant to Section 6, as well as any Collateral
consisting of cash, shall be applied by the Collateral Agent as follows:
FIRST, to the payment of all costs and expenses incurred by
the Collateral Agent in connection with such sale or otherwise in
connection with this Agreement, any other Loan Document or any of the
Obligations, including all court costs and the reasonable fees and
expenses of its agents and legal counsel, the repayment of all advances
made by the Collateral Agent hereunder or under any other Loan Document
on behalf of any Pledgor and any other costs or expenses incurred in
connection with the exercise of any right or remedy hereunder or under
any other Loan Document;
SECOND, to the payment in full of the Obligations (the amounts
so applied to be distributed among the Secured Parties pro rata in
accordance with the amounts of the Obligations owed to them on the date
of any such distribution); and
THIRD, to the Pledgors, their successors or assigns, or as a
court of competent jurisdiction may otherwise direct.
6
The Collateral Agent shall have absolute discretion as to the
time of application of any such proceeds, moneys or balances in accordance with
this Agreement. Upon any sale of the Collateral by the Collateral Agent
(including pursuant to a power of sale granted by statute or under a judicial
proceeding), the receipt of the purchase money by the Collateral Agent or of the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money paid
over to the Collateral Agent or such officer or be answerable in any way for the
misapplication thereof.
SECTION 8. Reimbursement of Collateral Agent. (a) Each Pledgor
agrees to pay upon demand to the Collateral Agent the amount of any and all
reasonable expenses, including the reasonable fees, other charges and
disbursements of its counsel and of any experts or agents, that the Collateral
Agent may incur in connection with (i) the administration of this Agreement,
(ii) the custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Collateral, (iii) the exercise or enforcement of
any of the rights of the Collateral Agent hereunder or (iv) the failure by such
Pledgor to perform or observe any of the provisions hereof.
(b) Without limitation of its indemnification obligations
under the other Loan Documents, each Pledgor agrees to indemnify the Collateral
Agent and the Indemnitees (as defined in Section 9.05 of the Credit Agreement)
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including reasonable counsel fees,
other charges and disbursements, incurred by or asserted against any Indemnitee
arising out of, in any way connected with, or as a result of (i) the execution
or delivery of this Agreement or any other Loan Document or any agreement or
instrument contemplated hereby or thereby, the performance by the parties hereto
of their respective obligations thereunder or the consummation of the
Transactions and the other transactions contemplated thereby or (ii) any claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto, provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or wilful misconduct of such Indemnitee.
(c) Any amounts payable as provided hereunder shall be
additional Obligations secured hereby and by the other Security Documents. The
provisions of this Section 8 shall remain operative and in full force and effect
regardless of the termination of this Agreement, the consummation of the
transactions contemplated hereby, the repayment of any of the Obligations, the
invalidity or unenforceability of any term or provision of this Agreement or any
other Loan Document or any investigation made by or on behalf of the Collateral
Agent or any other Secured Party. All amounts due under this Section 8 shall be
payable on written demand therefor and shall bear interest at the rate specified
in Section 2.06 of the Credit Agreement.
SECTION 9. Collateral Agent Appointed Attorney-in-Fact. Each
Pledgor hereby appoints the Collateral Agent the attorney-in-fact of such
Pledgor for the purpose of carrying out the provisions of this Agreement and
taking any action and executing any instrument that the Collateral Agent may
deem necessary or advisable to accomplish the purposes hereof, which appointment
is irrevocable and coupled with an interest. Without limiting the generality of
the foregoing, the Collateral Agent shall have the right, upon the occurrence
and during the continuance of an Event of Default, with full power of
substitution either in the Collateral Agent's name or in the name of such
Pledgor, to ask for, demand, sue for, collect, receive and give acquittance for
any and all moneys due or to become due under and by virtue of any Collateral,
to endorse checks, drafts, orders and other instruments for the payment of money
payable
7
to the Pledgor representing any interest or dividend or other distribution
payable in respect of the Collateral or any part thereof or on account thereof
and to give full discharge for the same, to settle, compromise, prosecute or
defend any action, claim or proceeding with respect thereto, and to sell,
assign, endorse, pledge, transfer and to make any agreement respecting, or
otherwise deal with, the same; provided, however, that nothing herein contained
shall be construed as requiring or obligating the Collateral Agent to make any
commitment or to make any inquiry as to the nature or sufficiency of any payment
received by the Collateral Agent, or to present or file any claim or notice, or
to take any action with respect to the Collateral or any part thereof or the
moneys due or to become due in respect thereof or any property covered thereby.
The Collateral Agent and the other Secured Parties shall be accountable only for
amounts actually received as a result of the exercise of the powers granted to
them herein, and neither they nor their officers, directors, employees or agents
shall be responsible to any Pledgor for any act or failure to act hereunder,
except for their own gross negligence or wilful misconduct.
SECTION 10. Waivers; Amendment. (a) No failure or delay of the
Collateral Agent in exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Collateral Agent hereunder
and of the other Secured Parties under the other Loan Documents are cumulative
and are not exclusive of any rights or remedies that they would otherwise have.
No waiver of any provisions of this Agreement or consent to any departure by any
Pledgor therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) below, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice or demand on any Pledgor in any case shall entitle such Pledgor to any
other or further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to a written agreement entered into
between the Collateral Agent and the Pledgor or Pledgors with respect to which
such waiver, amendment or modification is to apply, subject to any consent
required in accordance with Section 9.08 of the Credit Agreement.
SECTION 11. Securities Act, etc. In view of the position of
the Pledgors in relation to the Pledged Securities, or because of other current
or future circumstances, a question may arise under the Securities Act of 1933,
as now or hereafter in effect, or any similar statute hereafter enacted
analogous in purpose or effect (such Act and any such similar statute as from
time to time in effect being called the "Federal Securities Laws") with respect
to any disposition of the Pledged Securities permitted hereunder. Each Pledgor
understands that compliance with the Federal Securities Laws might very strictly
limit the course of conduct of the Collateral Agent if the Collateral Agent were
to attempt to dispose of all or any part of the Pledged Securities, and might
also limit the extent to which or the manner in which any subsequent transferee
of any Pledged Securities could dispose of the same. Similarly, there may be
other legal restrictions or limitations affecting the Collateral Agent in any
attempt to dispose of all or part of the Pledged Securities under applicable
Blue Sky or other state securities laws or similar laws analogous in purpose or
effect. Each Pledgor recognizes that in light of such restrictions and
limitations the Collateral Agent may, with respect to any sale of the Pledged
Securities, limit the purchasers to those who will agree, among other things, to
acquire such Pledged Securities for their own account, for investment, and not
with a view to the distribution or resale thereof. Each Pledgor acknowledges and
agrees that in light of such restrictions and limitations, the Collateral Agent,
in its sole and absolute discretion, (a) may proceed to make such a sale whether
or not a registration statement for the purpose of registering such Pledged
Securities or part thereof shall have been filed under the Federal Securities
Laws and (b) may approach and
8
negotiate with a single potential purchaser to effect such sale. Each Pledgor
acknowledges and agrees that any such sale might result in prices and other
terms less favorable to the seller than if such sale were a public sale without
such restrictions. In the event of any such sale, the Collateral Agent shall
incur no responsibility or liability for selling all or any part of the Pledged
Securities at a price that the Collateral Agent, in its sole and absolute
discretion, may in good faith deem reasonable under the circumstances,
notwithstanding the possibility that a substantially higher price might have
been realized if the sale were deferred until after registration as aforesaid or
if more than a single purchaser were approached. The provisions of this Section
11 will apply notwithstanding the existence of a public or private market upon
which the quotations or sales prices may exceed substantially the price at which
the Collateral Agent sells.
SECTION 12. Registration, etc. Each Pledgor agrees that, upon
the occurrence and during the continuance of an Event of Default hereunder, if
for any reason the Collateral Agent desires to sell any of the Pledged
Securities of the Borrower at a public sale, it will, at any time and from time
to time, upon the written request of the Collateral Agent, use its best efforts
to take or to cause the issuer of such Pledged Securities to take such action
and prepare, distribute and/or file such documents, as are required or advisable
in the reasonable opinion of counsel for the Collateral Agent to permit the
public sale of such Pledged Securities. Each Pledgor further agrees to
indemnify, defend and hold harmless the Collateral Agent, each other Secured
Party, any underwriter and their respective officers, directors, affiliates and
controlling persons from and against all loss, liability, expenses, costs of
counsel (including, without limitation, reasonable fees and expenses to the
Collateral Agent of legal counsel), and claims (including the costs of
investigation) that they may incur insofar as such loss, liability, expense or
claim arises out of or is based upon any alleged untrue statement of a material
fact contained in any prospectus (or any amendment or supplement thereto) or in
any notification or offering circular, or arises out of or is based upon any
alleged omission to state a material fact required to be stated therein or
necessary to make the statements in any thereof not misleading, except insofar
as the same may have been caused by any untrue statement or omission based upon
information furnished in writing to such Pledgor or the issuer of such Pledged
Securities by the Collateral Agent or any other Secured Party expressly for use
therein. Each Pledgor further agrees, upon such written request referred to
above, to use its best efforts to qualify, file or register, or cause the issuer
of such Pledged Securities to qualify, file or register, any of the Pledged
Securities under the Blue Sky or other securities laws of such states as may be
requested by the Collateral Agent and keep effective, or cause to be kept
effective, all such qualifications, filings or registrations. Each Pledgor will
bear all costs and expenses of carrying out its obligations under this Section
12. Each Pledgor acknowledges that there is no adequate remedy at law for
failure by it to comply with the provisions of this Section 12 and that such
failure would not be adequately compensable in damages, and therefore agrees
that its agreements contained in this Section 12 may be specifically enforced.
SECTION 13. Regulatory Approval. Notwithstanding anything to
the contrary contained herein, the Collateral Agent will not take any action
pursuant to this Pledge Agreement that would constitute or result in any
assignment of an FCC license or any change of control of the Borrower, any
Subsidiary, any Unrestricted Subsidiary or any STFI Unrestricted Subsidiary
subject to regulation by the FCC if such assignment of FCC license or change of
control would require under then existing law (including the written rules and
regulations promulgated by the FCC), the prior approval of the FCC, without
first obtaining such approval of the FCC. Each Pledgor agrees after the
occurrence of any Event of Default to take any action that the Collateral Agent
may reasonably request in order to obtain and enjoy the full rights and benefits
granted to the Collateral Agent by this Pledge Agreement and each other
agreement, instrument and document delivered to the Collateral Agent in
connection herewith or in any document evidencing or securing the collateral for
any of the Obligations, including specifically, at the Pledgor's own cost and
expense, the use of Pledgor's best efforts to assist in obtaining approval of
the FCC or any
9
applicable state regulatory authority for any action or transaction contemplated
by this Pledge Agreement that is then required by law, and specifically, without
limitation, upon request, to prepare, sign and file with the FCC or such state
regulatory authority the assignor's or transferor's portion of any application
or applications for consent to the assignment of license or transfer of control
necessary or appropriate under the FCC's or such state regulatory authority's
rules and regulations for approval of any Obligations secured hereby.
SECTION 14. Security Interest Absolute. All rights of the
Collateral Agent hereunder, the grant of a security interest in the Collateral
and all obligations of each Pledgor hereunder, shall be absolute and
unconditional irrespective of (a) any lack of validity or enforceability of the
Credit Agreement, any other Loan Document, any agreement with respect to any of
the Obligations or any other agreement or instrument relating to any of the
foregoing, (b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations, or any other amendment or waiver
of or any consent to any departure from the Credit Agreement, any other Loan
Document or any other agreement or instrument relating to any of the foregoing,
(c) any exchange, release or nonperfection of any other collateral, or any
release or amendment or waiver of or consent to or departure from any guaranty,
for all or any of the Obligations or (d) any other circumstance that might
otherwise constitute a defense available to, or a discharge of, any Pledgor in
respect of the Obligations or in respect of this Agreement (other than the
indefeasible payment in full of all the Obligations).
SECTION 15. Termination or Release. (a) This Agreement and the
security interests granted hereby shall terminate when all the Obligations have
been indefeasibly paid in full and the Lenders have no further commitment to
lend under the Credit Agreement, the L/C Exposure has been reduced to zero and
the Fronting Banks have no further obligation to issue Letters of Credit under
the Credit Agreement.
(b) Upon any sale or other transfer by any Pledgor of any
Collateral that is permitted under the Credit Agreement to any person that is
not a Pledgor, or, upon the effectiveness of any written consent to the release
of the security interest granted hereby in any Collateral pursuant to Section
9.08(b) of the Credit Agreement, the security interest in such Collateral shall
be automatically released.
(c) In connection with any termination or release pursuant to
paragraph (a) or (b), the Collateral Agent shall execute and deliver to any
Pledgor, at such Pledgor's expense, all documents that such Pledgor shall
reasonably request to evidence such termination or release. Any execution and
delivery of documents pursuant to this Section 14 shall be without recourse to
or warranty by the Collateral Agent.
SECTION 16. Notices. All communications and notices hereunder
shall be in writing and given as provided in Section 9.01 of the Credit
Agreement. All communications and notices hereunder to any Subsidiary Pledgor
shall be given to it at the address for notices set forth on Schedule I, with a
copy to the Borrower.
SECTION 17. Further Assurances. Each Pledgor agrees to do such
further acts and things, and to execute and deliver such additional conveyances,
assignments, agreements and instruments, as the Collateral Agent may at any time
reasonably request in connection with the administration and enforcement of this
Agreement or with respect to the Collateral or any part thereof or in order
better to assure and confirm unto the Collateral Agent its rights and remedies
hereunder.
SECTION 18. Binding Effect; Several Agreement; Assignments.
Whenever in this
10
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of any Pledgor that are contained in
this Agreement shall bind and inure to the benefit of its successors and
assigns. This Agreement shall become effective as to any Pledgor when a
counterpart hereof executed on behalf of such Pledgor shall have been delivered
to the Collateral Agent and a counterpart hereof shall have been executed on
behalf of the Collateral Agent, and thereafter shall be binding upon such
Pledgor and the Collateral Agent and their respective successors and assigns,
and shall inure to the benefit of such Pledgor, the Collateral Agent and the
other Secured Parties, and their respective successors and assigns, except that
no Pledgor shall have the right to assign its rights hereunder or any interest
herein or in the Collateral (and any such attempted assignment shall be void),
except as expressly contemplated by this Agreement or the other Loan Documents.
If all of the capital stock of a Pledgor is sold, transferred or otherwise
disposed of to a person that is not an Affiliate of the Borrower pursuant to a
transaction permitted by Section 6.05 of the Credit Agreement, such Pledgor
shall be released from its obligations under this Agreement without further
action. This Agreement shall be construed as a separate agreement with respect
to each Pledgor and may be amended, modified, supplemented, waived or released
with respect to any Pledgor without the approval of any other Pledgor and
without affecting the obligations of any other Pledgor hereunder
SECTION 19. Survival of Agreement; Severability. (a) All
covenants, agreements, representations and warranties made by each Pledgor
herein and in the certificates or other instruments prepared or delivered in
connection with or pursuant to this Agreement or any other Loan Document shall
be considered to have been relied upon by the Collateral Agent and the other
Secured Parties and shall survive the making by the Lenders of the Loans and the
issuance of the Letters of Credit by the Fronting Banks, regardless of any
investigation made by the Secured Parties or on their behalf, and shall continue
in full force and effect as long as the principal of or any accrued interest on
any Loan or any other fee or amount payable under this Agreement or any other
Loan Document is outstanding and unpaid or the L/C Exposure does not equal zero
and as long as the Commitments and the L/C Commitments have not been terminated.
(b) In the event any one or more of the provisions contained
in this Agreement should be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby (it being
understood that the invalidity of a particular provision in a particular
jurisdiction shall not in and of itself affect the validity of such provision in
any other jurisdiction). The parties shall endeavor in good-faith negotiations
to replace the invalid, illegal or unenforceable provisions with valid
provisions the economic effect of which comes as close as possible to that of
the invalid, illegal or unenforceable provisions.
SECTION 20. Governing Law. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 21. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall constitute an original, but all of
which, when taken together, shall constitute a single contract, and shall become
effective as provided in Section 18. Delivery of an executed counterpart of a
signature page to this Agreement by facsimile transmission shall be as effective
as delivery of a manually executed counterpart of this Agreement.
SECTION 22. Rules of Interpretation. The rules of
interpretation specified in Section 1.02 of the Credit Agreement shall be
applicable to this Agreement. Section headings used herein are for convenience
of reference only, are not part of this Agreement and are not to affect the
construction
11
of, or to be taken into consideration in interpreting this Agreement.
SECTION 23. Jurisdiction; Consent to Service of Process. (a)
Each Pledgor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that, to the extent permitted by applicable law, all
claims in respect of any such action or proceeding may be heard and determined
in such New York State or, to the extent permitted by law, in such Federal
court. Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Collateral Agent or
any other Secured Party may otherwise have to bring any action or proceeding
relating to this Agreement or the other Loan Documents against any Pledgor or
its properties in the courts of any jurisdiction.
(b) Each Pledgor hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or the other
Loan Documents in any New York State or Federal court. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 15. Nothing in
this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
SECTION 24. Waiver Of Jury Trial. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.
SECTION 25. Additional Pledgors. Pursuant to Section 5.11 of
the Credit Agreement, each Subsidiary of STFI, the Borrower or any Subsidiary
that was not in existence or not a Subsidiary on the date of the Credit
Agreement is required to enter in this Agreement as a Subsidiary Pledgor upon
becoming a Subsidiary if such Subsidiary owns or possesses property of a type
that would be considered Collateral hereunder. Upon execution and delivery by
the Collateral Agent and a Subsidiary of an instrument in the form of Annex 1,
such Subsidiary shall become a Subsidiary Pledgor hereunder with the same force
and effect as if originally named as a Subsidiary Pledgor herein. The execution
and delivery of such instrument shall not require the consent of any Pledgor
hereunder. The rights and obligations of each Pledgor hereunder shall remain in
full force and effect notwithstanding the addition of any new Subsidiary
12
Pledgor as a party to this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
SHARED TECHNOLOGIES FAIRCHILD INC.,
by
-----------------------------
Name:
Title:
SHARED TECHNOLOGIES FAIRCHILD
COMMUNICATIONS CORP.,
by
-----------------------------
Name:
Title: Authorized Officer
THE SUBSIDIARY PLEDGORS LISTED ON
SCHEDULE I HERETO,
by
-----------------------------
Name:
Title: Authorized Officer
CREDIT SUISSE, as Collateral Agent,
by
------------------------------
Name:
Title:
by
------------------------------
Name:
Title:
13
Schedule I to the
Pledge Agreement
SUBSIDIARY PLEDGORS
Name Address
Schedule II to the
Pledge Agreement
CAPITAL STOCK
Number of Registered Number and Class Percentage
Issuer Certificate Owner of Shares of Shares
DEBT SECURITIES
Principal Date of Maturity
Issuer Amount Note Date
Annex 1 to the
Pledge Agreement
SUPPLEMENT NO. dated as of , to the PLEDGE
AGREEMENT dated as of March 13, 1996, among SHARED
TECHNOLOGIES FAIRCHILD COMMUNICATIONS CORP., a
Delaware corporation (the "Borrower"), SHARED
TECHNOLOGIES FAIRCHILD INC., a Delaware corporation
("STFI", which term shall, after the Merger referred
to in the Credit Agreement referred to below, include
the surviving corporation in such Merger), each
Subsidiary of the Borrower listed on Schedule I
hereto (each such Subsidiary individually a
"Subsidiary Pledgor" and collectively, the
"Subsidiary Pledgors"; the Borrower, STFI and the
Subsidiary Pledgors are referred to collectively
herein as the "Pledgors") and CREDIT SUISSE, a bank
organized under the laws of Switzerland, acting
through its New York branch ("Credit Suisse"), as
collateral agent (in such capacity, the "Collateral
Agent") for the Secured Parties (as defined in the
Credit Agreement referred to below).
A. Reference is made to (a) the Credit Agreement dated as of
March 12, 1996 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among the Borrower, STFI, the lenders from time
to time party thereto (the "Lenders"), Credit Suisse, as administrative agent
(in such capacity, the "Administrative Agent") and as collateral agent (in such
capacity, the "Collateral Agent") for the Lenders, the fronting banks listed on
Schedule 2.20 (the "Fronting Banks"), and each of Citicorp USA, Inc. and
NationsBank, N.A., as documentation agent (individually and collectively in such
capacity, the "Documentation Agent"), (b) the Parent Guarantee Agreement dated
as of March 12, 1996 (as amended, supplemented or otherwise modified from time
to time, the "Parent Guarantee Agreement"), between STFI and the Collateral
Agent and (c) the Subsidiary Guarantee Agreement dated as of March 12, 1996 (as
amended, supplemented or otherwise modified from time to time, the "Subsidiary
Guarantee Agreement"; and, collectively with the Parent Guarantee Agreement, the
"Guarantee Agreements") among the Subsidiary Pledgors and the Collateral Agent.
B. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Credit Agreement.
C. The Pledgors have entered into the Pledge Agreement in
order to induce the Lenders to make Loans and the Fronting Banks to issue
Letters of Credit. Pursuant to Section 5.11 of the Credit Agreement, each
Subsidiary of STFI, the Borrower or any Subsidiary that was not in existence or
not a Subsidiary on the date of the Credit Agreement is required to enter into
the Pledge Agreement as a Subsidiary Pledgor upon becoming a Subsidiary if such
Subsidiary owns or possesses property of a type that would be considered
Collateral under the Pledge Agreement. Section 25 of the Pledge Agreement
provides that such Subsidiaries may become Subsidiary Pledgors under the Pledge
Agreement by execution and delivery of an instrument in the form of this
Supplement. The undersigned Subsidiary (the "New Pledgor") is executing this
Supplement in accordance with the requirements of the Credit Agreement to become
a Subsidiary Pledgor under the Pledge Agreement in order to induce the Lenders
to make additional Loans and the Fronting Banks to issue additional Letters of
Credit and as consideration for Loans previously made and Letters of Credit
previously issued.
Accordingly, the Collateral Agent and the New Pledgor agree as
follows:
SECTION 1. In accordance with Section 25 of the Pledge
Agreement, the New Pledgor by its signature below becomes a Pledgor under the
Pledge Agreement with the same force and
effect as if originally named therein as a Pledgor and the New Pledgor hereby
agrees (a) to all the terms and provisions of the Pledge Agreement applicable to
it as a Pledgor thereunder and (b) represents and warrants that the
representations and warranties made by it as a Pledgor thereunder are true and
correct on and as of the date hereof. In furtherance of the foregoing, the New
Pledgor, as security for the payment and performance in full of the Obligations
(as defined in the Pledge Agreement), does hereby create and grant to the
Collateral Agent, its successors and assigns, for the benefit of the Secured
Parties, their successors and assigns, a security interest in and lien on all of
the New Pledgor's right, title and interest in and to the Collateral (as defined
in the Pledge Agreement) of the New Pledgor. Each reference to a "Subsidiary
Pledgor" or a "Pledgor" in the Pledge Agreement shall be deemed to include the
New Pledgor. The Pledge Agreement is hereby incorporated herein by reference.
SECTION 2. The New Pledgor represents and warrants to the
Collateral Agent and the other Secured Parties that this Supplement has been
duly authorized, executed and delivered by it and constitutes its legal, valid
and binding obligation, enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts,
each of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Supplement shall become effective when
the Collateral Agent shall have received counterparts of this Supplement that,
when taken together, bear the signatures of the New Pledgor and the Collateral
Agent. Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Supplement.
SECTION 4. The New Pledgor hereby represents and warrants that
set forth on Schedule I attached hereto is a true and correct schedule of all
its Pledged Securities.
SECTION 5. Except as expressly supplemented hereby, the Pledge
Agreement shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. In case any one or more of the provisions contained
in this Supplement should be held invalid, illegal or unenforceable in any
respect, neither party hereto shall be required to comply with such provision
for so long as such provision is held to be invalid, illegal or unenforceable,
but the validity, legality and enforceability of the remaining provisions
contained herein and in the Pledge Agreement shall not in any way be affected or
impaired. The parties hereto shall endeavor in good-faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 8. All communications and notices hereunder shall be
in writing and given as provided in Section 15 of the Pledge Agreement. All
communications and notices hereunder to the New Pledgor shall be given to it at
the address set forth under its signature hereto, with a copy to the Borrower.
2
SECTION 9. The New Pledgor agrees to reimburse the Collateral
Agent for its reasonable out-of-pocket expenses in connection with this
Supplement, including the reasonable fees, other charges and disbursements of
counsel for the Collateral Agent.
IN WITNESS WHEREOF, the New Pledgor and the Collateral Agent
have duly executed this Supplement to the Pledge Agreement as of the day and
year first above written.
[Name of New Pledgor],
by
____________________________
Name:
Title:
Address:
CREDIT SUISSE, as Collateral Agent,
by
____________________________
Name:
Title:
by
____________________________
Name:
Title:
3
Schedule I to
Supplement No.
to the Pledge Agreement
Pledged Securities of the New Pledgor
CAPITAL STOCK
Number of Registered Number and Class Percentage
Issuer Certificate Owner of Shares of Shares
DEBT SECURITIES
Principal Date of Maturity
Issuer Amount Note Date
EXHIBIT G
SECURITY AGREEMENT dated as of March 13,
1996, among SHARED TECHNOLOGIES FAIRCHILD
COMMUNICATIONS CORP., a Delaware corporation (the
"Borrower"), SHARED TECHNOLOGIES FAIRCHILD INC., a
Delaware corporation ("STFI", which term shall, after
the Merger referred to in the Credit Agreement
referred to below, include the surviving corporation
in such Merger), each subsidiary of the Borrower
listed on Schedule I hereto (each such subsidiary
individually a "Subsidiary Guarantor" and
collectively, the "Subsidiary Guarantors"; the
Subsidiary Guarantors, STFI and the Borrower are
referred to collectively herein as the "Grantors")
and CREDIT SUISSE, a bank organized under the laws of
Switzerland, acting through its New York branch
("Credit Suisse"), as collateral agent (in such
capacity, the "Collateral Agent") for the Secured
Parties (as defined herein).
Reference is made to (a) the Credit Agreement dated as of
March 12, 1996 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among the Borrower, STFI, the lenders from time
to time party thereto (the "Lenders"), Credit Suisse, as administrative agent
(in such capacity, the "Administrative Agent") and as collateral agent (in such
capacity, the "Collateral Agent") for the Lenders, the fronting banks listed on
Schedule 2.20 (the "Fronting Banks"), and each of Citicorp USA, Inc. and
NationsBank, N.A., as documentation agent (individually and collectively in such
capacity, the "Documentation Agent") and (b) the Parent Guarantee Agreement
dated as of March 12, 1996 (as amended, supplemented or otherwise modified from
time to time, the "Parent Guarantee Agreement"), between STFI and the Collateral
Agent and (c) the Subsidiary Guarantee Agreement dated as of March 12, 1996 (as
amended, supplemented or otherwise modified from time to time, the "Subsidiary
Guarantee Agreement"), among the Subsidiary Guarantors and the Collateral Agent.
The Lenders have agreed to make Loans to the Borrower, and the
Fronting Banks have agreed to issue Letters of Credit for the account of the
Borrower, pursuant to, and upon the terms and subject to the conditions
specified in, the Credit Agreement. Each of STFI and the Subsidiary Guarantors
has agreed to guarantee, among other things, all the obligations of the Borrower
under the Credit Agreement. The obligations of the Lenders to make Loans and of
the Fronting Banks to issue Letters of Credit are conditioned upon, among other
things, the execution and delivery by the Grantors of an agreement in the form
hereof to secure (a) the due and punctual payment by the Borrower of (i) the
principal of and premium, if any, and interest (including interest accruing
during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) on
the Loans, when and as due, whether at maturity, by acceleration, upon one or
more dates set for prepayment or otherwise, (ii) each payment required to be
made by the Borrower under the Credit Agreement in respect of any Letter of
Credit, when and as due, including payments in respect of reimbursement of
disbursements, interest thereon and obligations to provide cash collateral and
(iii) all other monetary obligations, including fees, costs, expenses and
indemnities, whether primary, secondary, direct, contingent, fixed or otherwise
(including monetary obligations incurred during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding), of the Borrower to the Secured Parties
under the Credit Agreement and the other Loan Documents, (b) the due and
punctual performance of all covenants, agreements, obligations and liabilities
of the Borrower under or pursuant to the Credit Agreement and the other Loan
Documents, (c) the due and punctual payment and performance of all the
covenants, agreements, obligations and liabilities of each Loan Party under or
pursuant to this
Agreement and the other Loan Documents and (d) the due and punctual payment and
performance of all obligations of the Borrower under each Interest Rate
Protection Agreement entered into with any counterparty that was a Lender at the
time such Interest Rate Protection Agreement was entered into (all the monetary
and other obligations described in the preceding clauses (a) through (d) being
collectively called the "Obligations").
Accordingly, the Grantors and the Collateral Agent, on behalf
of itself and each Secured Party (and each of their respective successors or
assigns), hereby agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Definition of Terms Used Herein. Unless the
context otherwise requires, all capitalized terms used but not defined herein
shall have the meanings set forth in the Credit Agreement.
SECTION 1.02. Definition of Certain Terms Used Herein. As used
herein, the following terms shall have the following meanings:
"Account Debtor" shall mean any person who is or who may
become obligated to any Grantor under, with respect to or on account of an
Account.
"Accounts" shall mean any and all right, title and interest of
any Grantor to payment for goods and services sold or leased, including any such
right evidenced by chattel paper, whether due or to become due, whether or not
it has been earned by performance, and whether now or hereafter acquired or
arising in the future, including accounts receivable from Affiliates of the
Grantors.
"Accounts Receivable" shall mean all Accounts and all right,
title and interest in any returned goods, together with all rights, titles,
securities and guarantees with respect thereto, including any rights to stoppage
in transit, replevin, reclamation and resales, and all related security
interests, liens and pledges, whether voluntary or involuntary, in each case
whether now existing or owned or hereafter arising or acquired.
"Collateral" shall mean all (a) Accounts Receivable, (b)
Documents, (c) Equipment, (d) General Intangibles, (e) Inventory, (f) cash and
cash accounts and (g) Proceeds.
"Copyright License" shall mean any written agreement, now or
hereafter in effect, granting any right to any third party under any Copyright
now or hereafter owned by any Grantor or which such Grantor otherwise has the
right to license, or granting any right to such Grantor under any Copyright now
or hereafter owned by any third party, and all rights of such Grantor under any
such agreement.
"Copyrights" shall mean all of the following now owned or
hereafter acquired by any Grantor: (a) all copyright rights in any work subject
to the copyright laws of the United States or any other country, whether as
author, assignee, transferee or otherwise, and (b) all registrations and
applications for registration of any such copyright in the United States or any
other country, including
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registrations, recordings, supplemental registrations and pending applications
for registration in the United States Copyright Office, including those listed
on Schedule II.
"Credit Agreement" shall have the meaning assigned to such
term in the preliminary statement of this Agreement.
"Documents" shall mean all instruments, files, records, ledger
sheets and documents covering or relating to any of the Collateral.
"Equipment" shall mean all equipment, furniture and
furnishings, and all tangible personal property similar to any of the foregoing,
including tools, parts and supplies of every kind and description, and all
improvements, accessions or appurtenances thereto, that are now or hereafter
owned by any Grantor. The term Equipment shall include Fixtures.
"Fixtures" shall mean all items of Equipment, whether now
owned or hereafter acquired, of any Grantor that become so related to particular
real estate that an interest in them arises under any real estate law applicable
thereto.
"General Intangibles" shall mean all choses in action and
causes of action and all other assignable intangible personal property of any
Grantor of every kind and nature (other than Accounts Receivable) now owned or
hereafter acquired by any Grantor, including corporate or other business
records, indemnification claims, contract rights (including rights under leases,
whether entered into as lessor or lessee, Interest Rate Protection Agreements
and other agreements), Intellectual Property, goodwill, registrations,
franchises, tax refund claims and any letter of credit, guarantee, claim,
security interest or other security held by or granted to any Grantor to secure
payment by an Account Debtor of any of the Accounts Receivable.
"Intellectual Property" shall mean all intellectual and
similar property of any Grantor of every kind and nature now owned or hereafter
acquired by any Grantor, including inventions, designs, Patents, Copyrights,
Licenses, Trademarks, trade secrets, confidential or proprietary technical and
business information, know-how, show-how or other data or information, software
and databases and all embodiments or fixations thereof and related
documentation, registrations and franchises, and all additions, improvements and
accessions to, and books and records describing or used in connection with, any
of the foregoing.
"Inventory" shall mean all goods of any Grantor, whether now
owned or hereafter acquired, held for sale or lease, or furnished or to be
furnished by any Grantor under contracts of service, or consumed in any
Grantor's business, including raw materials, intermediates, work in process,
packaging materials, finished goods, semi-finished inventory, scrap inventory,
manufacturing supplies and spare parts, and all such goods that have been
returned to or repossessed by or on behalf of any Grantor.
"License" shall mean any Patent License, Trademark License,
Copyright License or other license or sublicense to which any Grantor is a
party, including those listed on Schedule III (other than those license
agreements in existence on the date hereof and listed on Schedule III and those
license agreements entered into after the date hereof, which by their terms
prohibit assignment or a grant of a security interest by such Grantor as
licensee thereunder). The Secured Parties shall have a security interest in all
authorizations issued by the Federal Communications Commission ("FCC") or any
state or
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local regulatory agency to the maximum extent permitted by law, including,
without limitation, the right to receive all proceeds derived from or in
connection with the sale, assignment or transfer of such authorizations.
"Obligations" shall have the meaning assigned to such term in
the preliminary statement of this Agreement.
"Patent License" shall mean any written agreement, now or
hereafter in effect, granting to any third party any right to make, use or sell
any invention on which a Patent, now or hereafter owned by any Grantor or which
any Grantor otherwise has the right to license, is in existence, or granting to
any Grantor any right to make, use or sell any invention on which a Patent, now
or hereafter owned by any third party, is in existence, and all rights of any
Grantor under any such agreement.
"Patents" shall mean all of the following now owned or
hereafter acquired by any Grantor: (a) all letters patent of the United States
or any other country, all registrations and recordings thereof, and all
applications for letters patent of the United States or any other country,
including registrations, recordings and pending applications in the United
States Patent and Trademark Office or any similar offices in any other country,
including those listed on Schedule IV, and (b) all reissues, continuations,
divisions, continuations-in-part, renewals or extensions thereof, and the
inventions disclosed or claimed therein, including the right to make, use and/or
sell the inventions disclosed or claimed therein.
"Perfection Certificate" shall mean a certificate
substantially in the form of Annex 1 hereto, completed and supplemented with the
schedules and attachments contemplated thereby, and duly executed by a Financial
Officer and the chief legal officer of the Borrower.
"Proceeds" shall mean any consideration received from the
sale, exchange, license, lease or other disposition of any asset or property
that constitutes Collateral, any value received as a consequence of the
possession of any Collateral and any payment received from any insurer or other
person or entity as a result of the destruction, loss, theft, damage or other
involuntary conversion of whatever nature of any asset or property which
constitutes Collateral, and shall include, (a) any claim of any Grantor against
any third party for (and the right to sue and recover for and the rights to
damages or profits due or accrued arising out of or in connection with) (i)
past, present or future infringement of any Patent now or hereafter owned by any
Grantor, or licensed under a Patent License, (ii) past, present or future
infringement or dilution of any Trademark now or hereafter owned by any Grantor
or licensed under a Trademark License or injury to the goodwill associated with
or symbolized by any Trademark now or hereafter owned by any Grantor, (iii)
past, present or future breach of any License and (iv) past, present or future
infringement of any Copyright now or hereafter owned by any Grantor or licensed
under a Copyright License and (b) any and all other amounts from time to time
paid or payable under or in connection with any of the Collateral.
"Secured Parties" shall mean (a) the Lenders, (b) the
Administrative Agent, (c) the Collateral Agent, (d) the Fronting Banks, (e) each
counterparty to an Interest Rate Protection Agreement entered into with the
Borrower if such counterparty was a Lender at the time the Interest Rate
Protection Agreement was entered into, (f) the beneficiaries of each
indemnification obligation undertaken by any Grantor under any Loan Document and
(g) the successors and assigns of each of the foregoing.
"Security Interest" shall have the meaning assigned to such
term in Section 2.01.
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"Trademark License" shall mean any written agreement, now or
hereafter in effect, granting to any third party any right to use any Trademark
now or hereafter owned by any Grantor or which any Grantor otherwise has the
right to license, or granting to any Grantor any right to use any Trademark now
or hereafter owned by any third party, and all rights of any Grantor under any
such agreement.
"Trademarks" shall mean all of the following now owned or
hereafter acquired by any Grantor: (a) all trademarks, service marks, trade
names, corporate names, company names, business names, fictitious business
names, trade styles, trade dress, logos, other source or business identifiers,
designs and general intangibles of like nature, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all
registration and recording applications filed in connection therewith, including
registrations and registration applications in the United States Patent and
Trademark Office, any State of the United States or any similar offices in any
other country or any political subdivision thereof, and all extensions or
renewals thereof, including those listed on Schedule V, (b) all goodwill
associated therewith or symbolized thereby and (c) all other assets, rights and
interests that uniquely reflect or embody such goodwill.
SECTION 1.03. Rules of Interpretation. The rules of
interpretation specified in Section 1.02 of the Credit Agreement shall be
applicable to this Agreement.
ARTICLE II
Security Interest
SECTION 2.01. Security Interest. As security for the payment
or performance, as the case may be, in full of the Obligations, each Grantor
hereby bargains, sells, conveys, assigns, sets over, mortgages, pledges,
hypothecates and transfers to the Collateral Agent, its successors and assigns,
for the ratable benefit of the Secured Parties, and hereby grants to the
Collateral Agent, its successors and assigns, for the ratable benefit of the
Secured Parties, a security interest in, all of such Grantor's right, title and
interest in, to and under the Collateral, whether now owned or any time
hereafter acquired by such Grantor or in which such Grantor now has or at any
time in the future may acquire any right, title or interest (the "Security
Interest"). Without limiting the foregoing, the Collateral Agent is hereby
authorized to file one or more financing statements (including fixture filings),
continuation statements, filings with the United States Patent and Trademark
Office or United States Copyright Office (or any successor office or any similar
office in any other country) or other documents for the purpose of perfecting,
confirming, continuing, enforcing or protecting the Security Interest granted by
each Grantor, without the signature of any Grantor, and naming any Grantor or
the Grantors as debtors and the Collateral Agent as secured party.
SECTION 2.02. No Assumption of Liability. The Security
Interest is granted as security only and shall not subject the Collateral Agent
or any other Secured Party to, or in any way alter or modify, any obligation or
liability of any Grantor with respect to or arising out of the Collateral.
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ARTICLE III
Representations and Warranties
The Grantors jointly and severally represent and warrant to
the Collateral Agent and the Secured Parties that:
SECTION 3.01. Title and Authority. Each Grantor has good and
valid rights in and title to the Collateral with respect to which it has
purported to grant a Security Interest hereunder and has full power and
authority to grant to the Collateral Agent the Security Interest in such
Collateral pursuant hereto and to execute, deliver and perform its obligations
in accordance with the terms of this Agreement, without the consent or approval
of any other person other than any consent or approval which has been obtained.
SECTION 3.02. Filings. (a) The Perfection Certificate has been
duly prepared, completed and executed and the information set forth therein is
correct and complete. Fully executed Uniform Commercial Code financing
statements (including fixture filings, as applicable) or other appropriate
filings, recordings or registrations containing a description of the Collateral
have been delivered to the Collateral Agent for filing in each governmental,
municipal or other office specified in Schedule 6 to the Perfection Certificate,
which are all the filings, recordings and registrations (other than filings
required to be made in the United States Patent and Trademark Office and the
United States Copyright Office in order to perfect the Security Interest in
Collateral consisting of United States Patents, Trademarks and Copyrights) that
are necessary to publish notice of and protect the validity of and to establish
a legal, valid and perfected security interest in favor of the Collateral Agent
(for the ratable benefit of the Secured Parties) in respect of all Collateral in
which the Security Interest may be perfected by filing, recording or
registration in the United States (or any political subdivision thereof) and its
territories and possessions, and no further or subsequent filing, refiling,
recording, rerecording, registration or reregistration is necessary in any such
jurisdiction, except as provided under applicable law with respect to the filing
of continuation statements.
(b) Each Grantor shall ensure and represents and warrants that
fully executed security agreements in the form hereof and containing a
description of all Collateral consisting of Intellectual Property shall have
been received and recorded within three months after the execution of this
Agreement with respect to United States Patents and United States registered
Trademarks (and Trademarks for which United States registration applications are
pending) and within one month after the execution of this Agreement with respect
to United States registered Copyrights for recording by the United States Patent
and Trademark Office and the United States Copyright Office pursuant to 35
U.S.C. ss. 261, 15 U.S.C. ss. 1060 or 17 U.S.C. ss. 205 and the regulations
thereunder, as applicable, and otherwise as may be required pursuant to the laws
of any other necessary jurisdiction, to protect the validity of and to establish
a legal, valid and perfected security interest in favor of the Collateral Agent
(for the ratable benefit of the Secured Parties) in respect of all Collateral
consisting of Patents, Trademarks and Copyrights in which a security interest
may be perfected by filing, recording or registration in the United States (or
any political subdivision thereof) and its territories and possessions, or in
any other necessary jurisdiction, and no further or subsequent filing, refiling,
recording, rerecording, registration or reregistration is necessary (other than
such actions as are necessary to perfect the Security Interest with respect to
any Collateral consisting of Patents, Trademarks and Copyrights (or registration
or application for registration thereof) acquired or developed after the date
hereof).
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SECTION 3.03. Validity of Security Interest. The Security
Interest constitutes (a) a legal and valid security interest in all the
Collateral securing the payment and performance of the Obligations, (b) subject
to the filings described in Section 3.02 above, a perfected security interest in
all Collateral in which a security interest may be perfected by filing,
recording or registering a financing statement or analogous document in the
United States (or any political subdivision thereof) and its territories and
possessions pursuant to the Uniform Commercial Code or other applicable law in
such jurisdictions and (c) a security interest that shall be perfected in all
Collateral in which a security interest may be perfected upon the receipt and
recording of this Agreement with the United States Patent and Trademark Office
and the United States Copyright Office, as applicable, within the three month
period (commencing as of the date hereof) pursuant to 35 U.S.C. ss. 261 or 15
U.S.C. ss. 1060 or the one month period (commencing as of the date hereof)
pursuant to 17 U.S.C. ss. 205 and otherwise as may be required pursuant to the
laws of any other necessary jurisdiction. The Security Interest is and shall be
prior to any other Lien on any of the Collateral, other than Liens expressly
permitted to be prior to the Security Interest pursuant to Section 6.02 of the
Credit Agreement.
SECTION 3.04. Absence of Other Liens. The Collateral is owned
by the Grantors free and clear of any Lien, except for Liens expressly permitted
pursuant to Section 6.02 of the Credit Agreement. The Grantor has not filed or
consented to the filing of (a) any financing statement or analogous document
under the Uniform Commercial Code or any other applicable laws covering any
Collateral, (b) any assignment in which any Grantor assigns any Collateral or
any security agreement or similar instrument covering any Collateral with the
United States Patent and Trademark Office or the United States Copyright Office
or (c) any assignment in which any Grantor assigns any Collateral or any
security agreement or similar instrument covering any Collateral with any
foreign governmental, municipal or other office, which financing statement or
analogous document, assignment, security agreement or similar instrument is
still in effect, except, in each case, for Liens expressly permitted pursuant to
Section 6.02 of the Credit Agreement.
ARTICLE IV
Covenants
SECTION 4.01. Change of Name; Location of Collateral; Records;
Place of Business. (a) Each Grantor agrees promptly to notify the Collateral
Agent in writing of any change (i) in its corporate name or in any trade name
used to identify it in the conduct of its business or in the ownership of its
properties, (ii) in the location of its chief executive office, its principal
place of business, any office in which it maintains books or records relating to
Collateral owned by it or any office or facility at which Collateral owned by it
is located (including the establishment of any such new office or facility),
(iii) in its identity or corporate structure or (iv) in its Federal Taxpayer
Identification Number. Each Grantor agrees not to effect or permit any change
referred to in the preceding sentence unless all filings have been made under
the Uniform Commercial Code or otherwise that are required in order for the
Collateral Agent to continue at all times following such change to have a valid,
legal and perfected first priority security interest in all the Collateral for
which perfection or priority, as the case may be, may be established by any such
filings. Each Grantor agrees promptly to notify the Collateral Agent if any
material portion of the Collateral owned or held by such Grantor is damaged or
destroyed.
(b) Each Grantor agrees to maintain, at its own cost and
expense, such complete and accurate records with respect to the Collateral owned
by it as is consistent with its current practices and
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in accordance with such prudent and standard practices used in industries that
are the same as or similar to those in which such Grantor is engaged, but in any
event to include complete accounting records indicating all payments and
proceeds received with respect to any part of the Collateral, and, at such time
or times as the Collateral Agent may reasonably request, promptly to prepare and
deliver to the Collateral Agent a duly certified schedule or schedules in form
and detail satisfactory to the Collateral Agent showing the identity, amount and
location of any and all Collateral.
SECTION 4.02. Periodic Certification. Each year, at the time
of delivery of annual financial statements with respect to the preceding fiscal
year pursuant to Section 5.04 of the Credit Agreement, the Borrower shall
deliver to the Collateral Agent a certificate executed by a Financial Officer
and the chief legal officer of the Borrower (a) setting forth the information
required pursuant to Section 2 of the Perfection Certificate or confirming that
there has been no change in such information since the date of such certificate
or the date of the most recent certificate delivered pursuant to Section 4.02
and (b) certifying that all Uniform Commercial Code financing statements
(including fixture filings, as applicable) or other appropriate filings,
recordings or registrations, including all refilings, rerecordings and
reregistrations, containing a description of the Collateral have been filed of
record in each governmental, municipal or other appropriate office in each
jurisdiction identified pursuant to clause (a) above to the extent necessary to
protect and perfect the Security Interest for a period of not less than 18
months after the date of such certificate (except as noted therein with respect
to any continuation statements to be filed within such period). Each certificate
delivered pursuant to this Section 4.02 shall identify in the format of Schedule
II, III, IV or V, as applicable, all Intellectual Property of any Grantor in
existence on the date thereof and not then listed on such Schedules or
previously so identified to the Collateral Agent.
SECTION 4.03. Protection of Security. Each Grantor shall, at
its own cost and expense, take any and all actions necessary to defend title to
the Collateral against all persons and to defend the Security Interest of the
Collateral Agent in the Collateral and the priority thereof against any Lien not
expressly permitted pursuant to Section 6.02 of the Credit Agreement.
SECTION 4.04. Further Assurances. Each Grantor agrees, at its
own expense, to execute, acknowledge, deliver and cause to be duly filed all
such further instruments and documents and take all such actions as the
Collateral Agent may from time to time request to better assure, preserve,
protect and perfect the Security Interest and the rights and remedies created
hereby, including the payment of any fees and taxes required in connection with
the execution and delivery of this Agreement, the granting of the Security
Interest and the filing of any financing statements (including fixture filings)
or other documents in connection herewith or therewith. If any amount payable
under or in connection with any of the Collateral shall be or become evidenced
by any promissory note or other instrument, such note or instrument shall be
immediately pledged and delivered to the Collateral Agent, duly endorsed in a
manner satisfactory to the Collateral Agent.
Without limiting the generality of the foregoing, each Grantor
hereby authorizes the Collateral Agent, with prompt notice thereof to the
Grantors, to supplement this Agreement by supplementing Schedule II, III, IV or
V hereto or adding additional schedules hereto to specifically identify any
asset or item that may constitute Copyrights, Licenses, Patents or Trademarks;
provided, however, that any Grantor shall have the right, exercisable within 10
days after it has been notified by the Collateral Agent of the specific
identification of such Collateral, to advise the Collateral Agent in writing of
any inaccuracy of the representations and warranties made by such Grantor
hereunder with respect to such Collateral. Each Grantor agrees that it will use
its best efforts to take such action as
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shall be necessary in order that all representations and warranties hereunder
shall be true and correct with respect to such Collateral within 30 days after
the date it has been notified by the Collateral Agent of the specific
identification of such Collateral.
Each Grantor further agrees that if any authorization of such
Grantor excluded from the Collateral pursuant to the final sentence of the
definition of "License" could be included therein with the receipt of any
approval of, or the taking of any action by, any Governmental Authority, such
Grantor shall use its best efforts to obtain such approval or action as
expeditiously as possible.
SECTION 4.05. Inspection and Verification. The Collateral
Agent and such persons as the Collateral Agent may reasonably designate shall
have the right, at the Grantors' own cost and expense, to inspect the
Collateral, all records related thereto (and to make extracts and copies from
such records) and the premises upon which any of the Collateral is located, to
discuss the Grantors' affairs with the officers of the Grantors and their
independent accountants and to verify under reasonable procedures the validity,
amount, quality, quantity, value, condition and status of, or any other matter
relating to, the Collateral, including, in the case of Accounts or Collateral in
the possession of any third person, by contacting Account Debtors or the third
person possessing such Collateral for the purpose of making such a verification.
The Collateral Agent shall have the absolute right to share any information it
gains from such inspection or verification with any Secured Party (it being
understood that any such information shall be deemed to be "Information" subject
to the provisions of Section 9.16 of the Credit Agreement).
SECTION 4.06. Taxes; Encumbrances. At its option, the
Collateral Agent may discharge past due taxes, assessments, charges, fees,
Liens, security interests or other encumbrances at any time levied or placed on
the Collateral and not permitted pursuant to Section 6.02 of the Credit
Agreement, and may pay for the maintenance and preservation of the Collateral to
the extent any Grantor fails to do so as required by the Credit Agreement or
this Agreement, and each Grantor jointly and severally agrees to reimburse the
Collateral Agent on demand for any payment made or any expense incurred by the
Collateral Agent pursuant to the foregoing authorization; provided, however,
that nothing in this Section 4.06 shall be interpreted as excusing any Grantor
from the performance of, or imposing any obligation on the Collateral Agent or
any Secured Party to cure or perform, any covenants or other promises of any
Grantor with respect to taxes, assessments, charges, fees, liens, security
interests or other encumbrances and maintenance as set forth herein or in the
other Loan Documents.
SECTION 4.07. Assignment of Security Interest. If at any time
any Grantor shall take a security interest in any property of an Account Debtor
or any other person to secure payment and performance of an Account, such
Grantor shall promptly assign such security interest to the Collateral Agent.
Such assignment need not be filed of public record unless necessary to continue
the perfected status of the security interest against creditors of and
transferees from the Account Debtor or other person granting the security
interest.
SECTION 4.08. Continuing Obligations of the Grantors. Each
Grantor shall remain liable to observe and perform all the conditions and
obligations to be observed and performed by it under each contract, agreement or
instrument relating to the Collateral, all in accordance with the terms and
conditions thereof, and each Grantor jointly and severally agrees to indemnify
and hold harmless the Collateral Agent and the Secured Parties from and against
any and all liability for such performance.
SECTION 4.09. Use and Disposition of Collateral. None of the
Grantors shall make
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or permit to be made an assignment, pledge or hypothecation of the Collateral or
shall grant any other Lien in respect of the Collateral, except as expressly
permitted by Section 6.02 of the Credit Agreement. None of the Grantors shall
make or permit to be made any transfer of the Collateral and each Grantor shall
remain at all times in possession of the Collateral owned by it, except that (a)
Inventory may be sold in the ordinary course of business and (b) unless and
until the Collateral Agent shall notify the Grantors that an Event of Default
shall have occurred and be continuing and that during the continuance thereof
the Grantors shall not sell, convey, lease, assign, transfer or otherwise
dispose of any Collateral (which notice may be given by telephone if promptly
confirmed in writing), the Grantors may use and dispose of the Collateral in any
lawful manner not inconsistent with the provisions of this Agreement, the Credit
Agreement or any other Loan Document. Without limiting the generality of the
foregoing, each Grantor agrees that it shall not permit any Inventory to be in
the possession or control of any warehouseman, bailee, agent or processor at any
time unless such warehouseman, bailee, agent or processor shall have been
notified of the Security Interest and shall have agreed in writing to hold the
Inventory subject to the Security Interest and the instructions of the
Collateral Agent and to waive and release any Lien held by it with respect to
such Inventory, whether arising by operation of law or otherwise.
SECTION 4.10. Limitation on Modification of Accounts. None of
the Grantors will, without the Collateral Agent's prior written consent, grant
any extension of the time of payment of any of the Accounts Receivable,
compromise, compound or settle the same for less than the full amount thereof,
release, wholly or partly, any person liable for the payment thereof or allow
any credit or discount whatsoever thereon, other than extensions, credits,
discounts, compromises or settlements granted or made in the ordinary course of
business and consistent with its current practices and in accordance with such
prudent and standard practices used in industries that are the same as or
similar to those in which such Grantor is engaged.
SECTION 4.11. Insurance. The Grantors, at their own expense,
shall maintain or cause to be maintained insurance covering physical loss or
damage to the Inventory and Equipment in accordance with Section 5.02 of the
Credit Agreement. Each Grantor irrevocably makes, constitutes and appoints the
Collateral Agent (and all officers, employees or agents designated by the
Collateral Agent) as such Grantor's true and lawful agent (and attorney-in-fact)
for the purpose, during the continuance of an Event of Default, of making,
settling and adjusting claims in respect of Collateral under policies of
insurance, endorsing the name of such Grantor on any check, draft, instrument or
other item of payment for the proceeds of such policies of insurance and for
making all determinations and decisions with respect thereto. In the event that
any Grantor at any time or times shall fail to obtain or maintain any of the
policies of insurance required hereby or to pay any premium in whole or part
relating thereto, the Collateral Agent may, without waiving or releasing any
obligation or liability of the Grantors hereunder or any Event of Default, in
its sole discretion, obtain and maintain such policies of insurance and pay such
premium and take any other actions with respect thereto as the Collateral Agent
deems advisable. All sums disbursed by the Collateral Agent in connection with
this Section 4.11, including reasonable attorneys' fees, court costs, expenses
and other charges relating thereto, shall be payable, upon demand, by the
Grantors to the Collateral Agent and shall be additional Obligations secured
hereby.
SECTION 4.12. Legend. Each Grantor shall legend, in form and
manner satisfactory to the Collateral Agent, its Accounts Receivable and its
books, records and documents evidencing or pertaining thereto with an
appropriate reference to the fact that such Accounts Receivable have been
assigned to the Collateral Agent for the benefit of the Secured Parties and that
the Collateral Agent has a security interest therein.
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SECTION 4.13. Covenants Regarding Patent, Trademark and
Copyright Collateral. (a) Each Grantor agrees that it will not, nor will it
permit any of its licensees to, do any act, or omit to do any act, whereby any
Patent which is material to the conduct of such Grantor's business may become
invalidated or dedicated to the public, and agrees that it shall continue to
mark any products covered by a Patent with the relevant patent number as
necessary and sufficient to establish and preserve its maximum rights under
applicable patent laws.
(b) Each Grantor (either itself or through its licensees or
its sublicensees) will, for each Trademark material to the conduct of such
Grantor's business, (i) maintain such Trademark in full force free from any
claim of abandonment or invalidity for non-use, (ii) maintain the quality of
products and services offered under such Trademark, (iii) display such Trademark
with notice of Federal or foreign registration to the extent necessary and
sufficient to establish and preserve its maximum rights under applicable law and
(iv) not knowingly use or knowingly permit the use of such Trademark in
violation of any third party rights.
(c) Each Grantor (either itself or through licensees) will,
for each work covered by a material Copyright, continue to publish, reproduce,
display, adopt and distribute the work with appropriate copyright notice as
necessary and sufficient to establish and preserve its maximum rights under
applicable copyright laws.
(d) Each Grantor shall notify the Collateral Agent immediately
if it knows or has reason to know that any Patent, Trademark or Copyright
material to the conduct of its business may become abandoned, lost or dedicated
to the public, or of any adverse determination or development (including the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office, United States Copyright Office or
any court or similar office of any country) regarding such Grantor's ownership
of any Patent, Trademark or Copyright, its right to register the same, or to
keep and maintain the same.
(e) In no event shall any Grantor, either itself or through
any agent, employee, licensee or designee, file an application for any Patent,
Trademark or Copyright (or for the registration of any Trademark or Copyright)
with the United States Patent and Trademark Office, United States Copyright
Office or any office or agency in any political subdivision of the United States
or in any other country or any political subdivision thereof, unless it promptly
informs the Collateral Agent, and, upon request of the Collateral Agent,
executes and delivers any and all agreements, instruments, documents and papers
as the Collateral Agent may request to evidence the Collateral Agent's security
interest in such Patent, Trademark or Copyright, and each Grantor hereby
appoints the Collateral Agent as its attorney-in-fact to execute and file such
writings for the foregoing purposes, all acts of such attorney being hereby
ratified and confirmed; such power, being coupled with an interest, is
irrevocable.
(f) Each Grantor will take all necessary steps that are
consistent with the practice in any proceeding before the United States Patent
and Trademark Office, United States Copyright Office or any office or agency in
any political subdivision of the United States or in any other country or any
political subdivision thereof, to maintain and pursue each material application
relating to the Patents, Trademarks and/or Copyrights (and to obtain the
relevant grant or registration) and to maintain each issued Patent and each
registration of the Trademarks and Copyrights that is material to the conduct of
any Grantor's business, including timely filings of applications for renewal,
affidavits of use, affidavits of incontestability and payment of maintenance
fees, and, if consistent with good business judgment, to initiate opposition,
interference and cancellation proceedings against third parties.
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(g) In the event that any Grantor has reason to believe that
any Collateral consisting of a Patent, Trademark or Copyright material to the
conduct of any Grantor's business has been or is about to be infringed,
misappropriated or diluted by a third party, such Grantor promptly shall notify
the Collateral Agent and shall, if consistent with good business judgment,
promptly sue for infringement, misappropriation or dilution and to recover any
and all damages for such infringement, misappropriation or dilution, and take
such other actions as are appropriate under the circumstances to protect such
Collateral.
(h) Upon and during the continuance of an Event of Default,
each Grantor shall use its best efforts to obtain all requisite consents or
approvals by the licensor of each Copyright License, Patent License or Trademark
License to effect the assignment of all of such Grantor's right, title and
interest thereunder to the Collateral Agent or its designee.
ARTICLE V
Power of Attorney
Each Grantor irrevocably makes, constitutes and appoints the
Collateral Agent (and all officers, employees or agents designated by the
Collateral Agent) as such Grantor's true and lawful agent and attorney-in-fact,
and in such capacity the Collateral Agent shall have the right, with power of
substitution for each Grantor and in each Grantor's name or otherwise, for the
use and benefit of the Collateral Agent and the Secured Parties, upon the
occurrence and during the continuance of an Event of Default (a) to receive,
endorse, assign and/or deliver any and all notes, acceptances, checks, drafts,
money orders or other evidences of payment relating to the Collateral or any
part thereof; (b) to demand, collect, receive payment of, give receipt for and
give discharges and releases of all or any of the Collateral; (c) to sign the
name of any Grantor on any invoice or bill of lading relating to any of the
Collateral; (d) to send verifications of Accounts Receivable to any Account
Debtor; (e) to commence and prosecute any and all suits, actions or proceedings
at law or in equity in any court of competent jurisdiction to collect or
otherwise realize on all or any of the Collateral or to enforce any rights in
respect of any Collateral; (f) to settle, compromise, compound, adjust or defend
any actions, suits or proceedings relating to all or any of the Collateral; (g)
to notify, or to require any Grantor to notify, Account Debtors to make payment
directly to the Collateral Agent; and (h) subject to the mandatory requirements
of applicable law, to use, sell, assign, transfer, pledge, make any agreement
with respect to or otherwise deal with all or any of the Collateral, and to do
all other acts and things necessary to carry out the purposes of this Agreement,
as fully and completely as though the Collateral Agent were the absolute owner
of the Collateral for all purposes, including assigning any contract to any
Subsidiary or any other person at any time during the continuance of any Event
of Default; provided, however, that nothing herein contained shall be construed
as requiring or obligating the Collateral Agent or any Secured Party to make any
commitment or to make any inquiry as to the nature or sufficiency of any payment
received by the Collateral Agent or any Secured Party, or to present or file any
claim or notice, or to take any action with respect to the Collateral or any
part thereof or the moneys due or to become due in respect thereof or any
property covered thereby, and no action taken or omitted to be taken by the
Collateral Agent or any Secured Party with respect to the Collateral or any part
thereof shall give rise to any defense, counterclaim or offset in favor of any
Grantor or to any claim or action against the Collateral Agent or any Secured
Party. It is understood and agreed that the appointment of
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the Collateral Agent as the agent and attorney-in-fact of the Grantors for the
purposes set forth above is coupled with an interest and is irrevocable. The
provisions of this Article V shall in no event relieve any Grantor of any of its
obligations hereunder or under any other Loan Document with respect to the
Collateral or any part thereof or impose any obligation on the Collateral Agent
or any Secured Party to proceed in any particular manner with respect to the
Collateral or any part thereof, or in any way limit the exercise by the
Collateral Agent or any Secured Party of any other or further right which it may
have on the date of this Agreement or hereafter, whether hereunder, under any
other Loan Document, by law or otherwise.
ARTICLE VI
Remedies
SECTION 6.01. Remedies upon Default. Upon the occurrence and
during the continuance of an Event of Default, each Grantor agrees to deliver
each item of Collateral to the Collateral Agent on demand, and it is agreed that
the Collateral Agent shall have the right to take any of or all the following
actions at the same or different times: (a) with respect to any Collateral
consisting of Intellectual Property, on demand, to cause the Security Interest
to become an assignment, transfer and conveyance of any of or all such
Collateral by the applicable Grantors to the Collateral Agent, or to license or
sublicense, whether general, special or otherwise, and whether on an exclusive
or non-exclusive basis, any such Collateral throughout the universe on such
terms and conditions and in such manner as the Collateral Agent shall determine
(other than in violation of any then-existing licensing arrangements to the
extent that waivers cannot be obtained), and (b) with or without legal process
and with or without prior notice or demand for performance, to take possession
of the Collateral and without liability for trespass to enter any premises where
the Collateral may be located for the purpose of taking possession of or
removing the Collateral and, generally, to exercise any and all rights afforded
to a secured party under the Uniform Commercial Code or other applicable law.
Without limiting the generality of the foregoing, each Grantor agrees that the
Collateral Agent shall have the right, subject to the mandatory requirements of
applicable law, to sell or otherwise dispose of all or any part of the
Collateral, at public or private sale or at any broker's board or on any
securities exchange, for cash, upon credit or for future delivery as the
Collateral Agent shall deem appropriate. The Collateral Agent shall be
authorized at any such sale (if it deems it advisable to do so) to restrict the
prospective bidders or purchasers to persons who will represent and agree that
they are purchasing the Collateral for their own account for investment and not
with a view to the distribution or sale thereof, and upon consummation of any
such sale the Collateral Agent shall have the right to assign, transfer and
deliver to the purchaser or purchasers thereof the Collateral so sold. Each such
purchaser at any such sale shall hold the property sold absolutely, free from
any claim or right on the part of any Grantor, and each Grantor hereby waives
(to the extent permitted by law) all rights of redemption, stay and appraisal
which such Grantor now has or may at any time in the future have under any rule
of law or statute now existing or hereafter enacted.
The Collateral Agent shall give the Grantors 10 days' written
notice (which each Grantor agrees is reasonable notice within the meaning of
Section 9-504(3) of the Uniform Commercial Code as in effect in the State of New
York or its equivalent in other jurisdictions) of the Collateral Agent's
intention to make any sale of Collateral. Such notice, in the case of a public
sale, shall state the time and place for such sale and, in the case of a sale at
a broker's board or on a securities exchange, shall state the board or exchange
at which such sale is to be made and the day on which the Collateral,
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or portion thereof, will first be offered for sale at such board or exchange.
Any such public sale shall be held at such time or times within ordinary
business hours and at such place or places as the Collateral Agent may fix and
state in the notice (if any) of such sale. At any such sale, the Collateral, or
portion thereof, to be sold may be sold in one lot as an entirety or in separate
parcels, as the Collateral Agent may (in its sole and absolute discretion)
determine. The Collateral Agent shall not be obligated to make any sale of any
Collateral if it shall determine not to do so, regardless of the fact that
notice of sale of such Collateral shall have been given. The Collateral Agent
may, without notice or publication, adjourn any public or private sale or cause
the same to be adjourned from time to time by announcement at the time and place
fixed for sale, and such sale may, without further notice, be made at the time
and place to which the same was so adjourned. In case any sale of all or any
part of the Collateral is made on credit or for future delivery, the Collateral
so sold may be retained by the Collateral Agent until the sale price is paid by
the purchaser or purchasers thereof, but the Collateral Agent shall not incur
any liability in case any such purchaser or purchasers shall fail to take up and
pay for the Collateral so sold and, in case of any such failure, such Collateral
may be sold again upon like notice. At any public (or, to the extent permitted
by law, private) sale made pursuant to this Section, any Secured Party may bid
for or purchase, free (to the extent permitted by law) from any right of
redemption, stay, valuation or appraisal on the part of any Grantor (all said
rights being also hereby waived and released to the extent permitted by law),
the Collateral or any part thereof offered for sale and may make payment on
account thereof by using any claim then due and payable to such Secured Party
from any Grantor as a credit against the purchase price, and such Secured Party
may, upon compliance with the terms of sale, hold, retain and dispose of such
property without further accountability to any Grantor therefor. For purposes
hereof, a written agreement to purchase the Collateral or any portion thereof
shall be treated as a sale thereof; the Collateral Agent shall be free to carry
out such sale pursuant to such agreement and no Grantor shall be entitled to the
return of the Collateral or any portion thereof subject thereto, notwithstanding
the fact that after the Collateral Agent shall have entered into such an
agreement all Events of Default shall have been remedied and the Obligations
paid in full. As an alternative to exercising the power of sale herein conferred
upon it, the Collateral Agent may proceed by a suit or suits at law or in equity
to foreclose this Agreement and to sell the Collateral or any portion thereof
pursuant to a judgment or decree of a court or courts having competent
jurisdiction or pursuant to a proceeding by a court-appointed receiver.
SECTION 6.02. Application of Proceeds. The Collateral Agent
shall apply the proceeds of any collection or sale of the Collateral, as well as
any Collateral consisting of cash, as follows:
FIRST, to the payment of all costs and expenses incurred by
the Administrative Agent or the Collateral Agent (in its capacity as
such hereunder or under any other Loan Document) in connection with
such collection or sale or otherwise in connection with this Agreement
or any of the Obligations, including all court costs and the fees and
expenses of its agents and legal counsel, the repayment of all advances
made by the Collateral Agent hereunder or under any other Loan Document
on behalf of any Grantor and any other costs or expenses incurred in
connection with the exercise of any right or remedy hereunder or under
any other Loan Document;
SECOND, to the payment in full of the Obligations (the amounts
so applied to be distributed among the Secured Parties pro rata in
accordance with the amounts of the Obligations owed to them on the date
of any such distribution); and
THIRD, to the Grantors, their successors or assigns, or as a
court of competent
14
jurisdiction may otherwise direct.
The Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of the Collateral by the Collateral Agent (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the Collateral Agent or of the officer making the sale shall be a
sufficient discharge to the purchaser or purchasers of the Collateral so sold
and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Collateral Agent
or such officer or be answerable in any way for the misapplication thereof.
SECTION 6.03. Grant of License to Use Intellectual Property.
For the purpose of enabling the Collateral Agent to exercise rights and remedies
under this Article at such time as the Collateral Agent shall be lawfully
entitled to exercise such rights and remedies, each Grantor hereby grants to the
Collateral Agent an irrevocable, non-exclusive license (exercisable without
payment of royalty or other compensation to the Grantors) to use, license or
sub-license any of the Collateral consisting of Intellectual Property now owned
or hereafter acquired by such Grantor, and wherever the same may be located, and
including in such license reasonable access to all media in which any of the
licensed items may be recorded or stored and to all computer software and
programs used for the compilation or printout thereof. The use of such license
by the Collateral Agent shall be exercised, at the option of the Collateral
Agent, upon the occurrence and during the continuation of an Event of Default;
provided that any license, sub-license or other transaction entered into by the
Collateral Agent in accordance herewith shall be binding upon the Grantors
notwithstanding any subsequent cure of an Event of Default.
ARTICLE VII
Miscellaneous
SECTION 7.01. Notices. All communications and notices
hereunder shall (except as otherwise expressly permitted herein) be in writing
and given as provided in Section 9.01 of the Credit Agreement. All
communications and notices hereunder to any Subsidiary Guarantor shall be given
to it at its address or telecopy number set forth on Schedule I, with a copy to
the Borrower.
SECTION 7.02. Security Interest Absolute. All rights of the
Collateral Agent hereunder, the Security Interest and all obligations of the
Grantors hereunder shall be absolute and unconditional irrespective of (a) any
lack of validity or enforceability of the Credit Agreement, any other Loan
Document, any agreement with respect to any of the Obligations or any other
agreement or instrument relating to any of the foregoing, (b) any change in the
time, manner or place of payment of, or in any other term of, all or any of the
Obligations, or any other amendment or waiver of or any consent to any departure
from the Credit Agreement, any other Loan Document or any other agreement or
instrument, (c) any exchange, release or non-perfection of any Lien on other
collateral, or any release or amendment or waiver of or consent under or
departure from any guarantee, securing or guaranteeing all or any of the
Obligations, or (d) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, any Grantor in respect of the
Obligations or this Agreement.
SECTION 7.03. Survival of Agreement. All covenants,
agreements, representations and warranties made by any Grantor herein and in the
certificates or other instruments prepared or
15
delivered in connection with or pursuant to this Agreement shall be considered
to have been relied upon by the Secured Parties and shall survive the making by
the Lenders of the Loans, and the execution and delivery to the Lenders of any
notes evidencing such Loans, regardless of any investigation made by the Lenders
or on their behalf, and shall continue in full force and effect until this
Agreement shall terminate.
SECTION 7.04. Binding Effect; Several Agreement. This
Agreement shall become effective as to any Grantor when a counterpart hereof
executed on behalf of such Grantor shall have been delivered to the Collateral
Agent and a counterpart hereof shall have been executed on behalf of the
Collateral Agent, and thereafter shall be binding upon such Grantor and the
Collateral Agent and their respective successors and assigns, and shall inure to
the benefit of such Grantor, the Collateral Agent and the other Secured Parties
and their respective successors and assigns, except that no Grantor shall have
the right to assign or transfer its rights or obligations hereunder or any
interest herein or in the Collateral (and any such assignment or transfer shall
be void) except as expressly contemplated by this Agreement or the Credit
Agreement. This Agreement shall be construed as a separate agreement with
respect to each Grantor and may be amended, modified, supplemented, waived or
released with respect to any Grantor without the approval of any other Grantor
and without affecting the obligations of any other Grantor hereunder.
SECTION 7.05. Successors and Assigns. Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of any Grantor or the Collateral Agent
that are contained in this Agreement shall bind and inure to the benefit of
their respective successors and assigns.
SECTION 7.06. Collateral Agent's Fees and Expenses;
Indemnification. (a) Each Grantor jointly and severally agrees to pay upon
demand to the Collateral Agent the amount of any and all reasonable expenses,
including the reasonable fees, disbursements and other charges of its counsel
and of any experts or agents, which the Collateral Agent may incur in connection
with (i) the administration of this Agreement, (ii) the custody or preservation
of, or the sale of, collection from or other realization upon any of the
Collateral, (iii) the exercise, enforcement or protection of any of the rights
of the Collateral Agent hereunder or (iv) the failure of any Grantor to perform
or observe any of the provisions hereof.
(b) Without limitation of its indemnification obligations
under the other Loan Documents, each Grantor jointly and severally agrees to
indemnify the Collateral Agent and the other Indemnitees against, and hold each
of them harmless from, any and all losses, claims, damages, liabilities and
related expenses, including reasonable fees, disbursements and other charges of
counsel, incurred by or asserted against any of them arising out of, in any way
connected with, or as a result of, the execution, delivery or performance of
this Agreement or any claim, litigation, investigation or proceeding relating
hereto or to the Collateral, whether or not any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee.
(c) Any such amounts payable as provided hereunder shall be
additional Obligations secured hereby and by the other Security Documents. The
provisions of this Section 7.06 shall remain
16
operative and in full force and effect regardless of the termination of this
Agreement or any other Loan Document, the consummation of the transactions
contemplated hereby, the repayment of any of the Loans, the invalidity or
unenforceability of any term or provision of this Agreement or any other Loan
Document, or any investigation made by or on behalf of the Collateral Agent or
any Lender. All amounts due under this Section 7.06 shall be payable on written
demand therefor.
SECTION 7.07. GOVERNING LAW. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE
OF NEW YORK.
SECTION 7.08. Waivers; Amendment. (a) No failure or delay of
the Collateral Agent in exercising any power or right hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Collateral Agent hereunder
and of the Collateral Agent, the Fronting Banks, the Administrative Agent and
the Lenders under the other Loan Documents are cumulative and are not exclusive
of any rights or remedies that they would otherwise have. No waiver of any
provisions of this Agreement or any other Loan Document or consent to any
departure by any Grantor therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) below, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice to or demand on any Grantor in any case shall entitle such
Grantor or any other Grantor to any other or further notice or demand in similar
or other circumstances.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Collateral Agent and the Grantor or Grantors with
respect to which such waiver, amendment or modification is to apply, subject to
any consent required in accordance with Section 9.08 of the Credit Agreement.
SECTION 7.09. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS
APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 7.09.
SECTION 7.10. Severability. In the event any one or more of
the provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
17
SECTION 7.11 Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall constitute an original but all of
which when taken together shall constitute but one contract (subject to Section
7.04), and shall become effective as provided in Section 7.04. Delivery of an
executed signature page to this Agreement by facsimile transmission shall be
effective as delivery of a manually executed counterpart hereof.
SECTION 7.12. Headings. Article and Section headings used
herein are for the purpose of reference only, are not part of this Agreement and
are not to affect the construction of, or to be taken into consideration in
interpreting, this Agreement.
SECTION 7.13. Jurisdiction; Consent to Service of Process. (a)
Each Grantor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that the
Collateral Agent, the Administrative Agent, the Fronting Banks or any Lender may
otherwise have to bring any action or proceeding relating to this Agreement or
the other Loan Documents against any Grantor or its properties in the courts of
any jurisdiction.
(b) Each Grantor hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or the other
Loan Documents in any New York State or Federal court. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 7.01. Nothing
in this Agreement will affected the right of any party to this Agreement to
serve process in any other manner permitted by law.
SECTION 7.14. Termination. This Agreement and the Security
Interest shall terminate when all the Obligations have been indefeasibly paid in
full, the Lenders have no further commitment to lend, the L/C Exposure has been
reduced to zero and the Fronting Banks have no further commitment to issue
Letters of Credit under the Credit Agreement, at which time the Collateral Agent
shall execute and deliver to the Grantors, at the Grantors' expense, all Uniform
Commercial Code termination statements and similar documents which the Grantors
shall reasonably request to evidence such termination. Any execution and
delivery of termination statements or documents pursuant to this Section 7.14
shall be without recourse to or warranty by the Collateral Agent. A Subsidiary
Guarantor shall automatically be released from its obligations hereunder and the
Security Interest in the Collateral of such Subsidiary Guarantor shall be
automatically released in the event that all the capital stock of such
Subsidiary Guarantor shall be sold, transferred or otherwise disposed of to a
person that is not an Affiliate of the Borrower in accordance with the terms of
the Credit Agreement; provided that the Required Lenders shall have consented to
such sale, transfer or other disposition (to the extent required
18
by the Credit Agreement) and the terms of such consent did not provide
otherwise.
SECTION 7.15. Additional Grantors. Upon execution and delivery
by the Collateral Agent and a Subsidiary of an instrument in the form of Annex 2
hereto, such Subsidiary shall become a Grantor hereunder with the same force and
effect as if originally named as a Grantor herein. The execution and delivery of
any such instrument shall not require the consent of any Grantor hereunder. The
rights and obligations of each Grantor hereunder shall remain in full force and
effect notwithstanding the addition of any new Grantor as a party to this
Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
SHARED TECHNOLOGIES FAIRCHILD INC.,
by
--------------------------
Name:
Title:
SHARED TECHNOLOGIES FAIRCHILD
COMMUNICATIONS CORP.,
by
--------------------------
Name:
Title: Authorized Officer
EACH OF THE SUBSIDIARY GUARANTORS
LISTED ON SCHEDULE I HERETO,
by
--------------------------
Name:
Title: Authorized Officer
19
CREDIT SUISSE, as Collateral Agent,
by
--------------------------
Name:
Title:
by
--------------------------
Name:
Title:
20
SCHEDULE I
SUBSIDIARY GUARANTORS
SCHEDULE II
COPYRIGHTS
22
SCHEDULE III
LICENSES
23
SCHEDULE IV
PATENTS
24
SCHEDULE V
TRADEMARKS
25
Annex 1 to the
Security Agreement
[Form Of]
PERFECTION CERTIFICATE
Reference is made to (a) the Credit Agreement dated as of
March 12, 1996 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among the Borrower, STFI, the lenders from time
to time party thereto (the "Lenders"), Credit Suisse, as administrative agent
(in such capacity, the "Administrative Agent") and as collateral agent (in such
capacity, the "Collateral Agent") for the Lenders, the fronting banks listed on
Schedule 2.20 (the "Fronting Banks"), and each of Citicorp USA, Inc. and
NationsBank, as documentation agent (individually and collectively in such
capacity, the "Documentation Agent"), (b) the Parent Guarantee Agreement dated
as of March 12, 1996 (as amended, supplemented or otherwise modified from time
to time, the "Parent Guarantee Agreement"), between STFI and the Collateral
Agent and (c) the Subsidiary Guarantee Agreement dated as of March 12, 1996 (as
amended, supplemented or otherwise modified from time to time, the "Subsidiary
Guarantee Agreement"), among the Subsidiary Guarantors and the Collateral Agent.
The undersigned, a Financial Officer and a Legal Officer,
respectively, of STFI, hereby certify to the Collateral Agent and each other
Secured Party as follows:
1. Names. (a) The exact corporate name of each Grantor, as
such name appears in its respective certificate of incorporation, is as follows:
(b) Set forth below is each other corporate name each Grantor
has had in the past five years, together with the date of the relevant change:
(c) Except as set forth in Schedule 1 hereto, no Grantor has
changed its identity or corporate structure in any way within the past five
years. Changes in identity or corporate structure would include mergers,
consolidations and acquisitions, as well as any change in the form, nature or
jurisdiction of corporate organization. If any such change has occurred, include
in Schedule 1 the information required by Sections 1 and 2 of this certificate
as to each acquiree or constituent party to a merger or consolidation.
(d) The following is a list of all other names (including
trade names or similar appellations) used by each Grantor or any of its
divisions or other business units in connection with the conduct of its business
or the ownership of its properties at any time during the past five years:
(e) Set forth below is the Federal Taxpayer Identification
Number of each Grantor:
2. Current Locations. (a) The chief executive office of each Grantor
is located at the address set forth opposite its name below:
Grantor Mailing Address County State
(b) Set forth below opposite the name of each Grantor are all locations
where such Grantor maintains any books or records relating to any Accounts
Receivable (with each location at which chattel paper, if any, is kept being
indicated by an "*"):
Grantor Mailing Address County State
(c) Set forth below opposite the name of each Grantor are all the
places of business of such Grantor not identified in paragraph (a) or (b) above:
Grantor Mailing Address County State
(d) Set forth below opposite the name of each Grantor are all the
locations where such Grantor maintains any Collateral not identified above:
Grantor Mailing Address County State
(e) Set forth below opposite the name of each Grantor are the names and
addresses of all persons other than such Grantor that have possession of any of
the Collateral of such Grantor:
Grantor Mailing Address County State
3. Unusual Transactions. All Accounts Receivable have been originated
by the Grantors and all Inventory has been acquired by the Grantors in the
ordinary course of business.
4. File Search Reports. Attached hereto as Schedule 4(A) are true
copies of file search reports from the Uniform Commercial Code filing offices
where filings described in Section 3.19 of the Credit Agreement are to be made.
Attached hereto as Schedule 4(B) is a true copy of each financing statement or
other filing identified in such file search reports.
5. UCC Filings. Duly signed financing statements on Form UCC-1 in
substantially the form of Schedule 5 hereto have been prepared for filing in the
Uniform Commercial Code filing office in each jurisdiction where a Grantor has
Collateral as identified in Section 2 hereof.
6. Schedule of Filings. Attached hereto as Schedule 6 is a schedule
setting forth, with respect to the filings described in Section 5 above, each
filing and the filing office in which such filing is to be made.
7. Filing Fees. All filing fees and taxes payable in connection with
the filings described in Section 5 above have been paid.
3
8. Stock Ownership. Attached hereto as Schedule 8 is a true and correct
list of all the duly authorized, issued and outstanding stock of each Subsidiary
and the record and beneficial owners of such stock. Also set forth on Schedule 8
is each equity Investment of STFI and each Subsidiary that represents 50% or
less of the equity of the entity in which such investment was made.
9. Notes. Attached hereto as Schedule 9 is a true and correct list of
all notes held by STFI and each Subsidiary and all intercompany notes between
STFI and each Subsidiary of STFI and between each Subsidiary of STFI and each
other such Subsidiary.
10. Advances. Attached hereto as Schedule 10 is (a) a true and correct
list of all advances made by STFI to any Subsidiary of STFI or made by any
Subsidiary of STFI to STFI or any other Subsidiary of STFI, which advances will
be on and after the date hereof evidenced by one or more intercompany notes
pledged to the Collateral Agent under the Pledge Agreement, and (b) a true and
correct list of all unpaid intercompany transfers of goods sold and delivered by
or to STFI or any Subsidiary of STFI.
11. Mortgage Filings. Attached hereto as Schedule 11 is a schedule
setting forth, with respect to each Mortgaged Property, (i) the exact corporate
name of the corporation that owns such property as such name appears in its
certificate of incorporation, (ii) if different from the name identified
pursuant to clause (i), the exact name of the current record owner of such
property reflected in the records of the filing office for such property
identified pursuant to the following clause and (iii) the filing office in which
a Mortgage with respect to such property must be filed or recorded in order for
the Collateral Agent to obtain a perfected security interest therein.
IN WITNESS WHEREOF, the undersigned have duly executed this
certificate on this [ ] day of [ ].
SHARED TECHNOLOGIES INC.,
by
--------------------------
Name:
Title:[Financial Officer]
by
--------------------------
Name:
Title: [Legal Officer]
4
Annex 2 to the
Security Agreement
SUPPLEMENT NO. __ dated as of , to the Security
Agreement dated as of March 12, 1996, among SHARED
TECHNOLOGIES FAIRCHILD COMMUNICATIONS CORP., a Delaware
corporation (the "Borrower"), SHARED TECHNOLOGIES INC., a
Delaware corporation ("STFI"), each subsidiary of the Borrower
listed on Schedule I thereto (each such subsidiary
individually a "Subsidiary Guarantor" and collectively, the
"Subsidiary Guarantors"; the Subsidiary Guarantors, STFI and
the Borrower are referred to collectively herein as the
"Grantors") and CREDIT SUISSE, a bank organized under the laws
of Switzerland, acting through its New York branch ("Credit
Suisse"), as collateral agent (in such capacity, the
"Collateral Agent") for the Secured Parties (as defined
herein).
A. Reference is made to (a) the Credit Agreement dated as of
March 12, 1996 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among the Borrower, STFI, the lenders from time
to time party thereto (the "Lenders"), Credit Suisse, as administrative agent
(in such capacity, the "Administrative Agent") and as collateral agent (in such
capacity, the "Collateral Agent") for the Lenders, the fronting banks listed on
Schedule 2.20 (the "Fronting Banks"), and each of Citicorp USA, Inc. and
NationsBank, N.A., as documentation agent (individually and collectively in such
capacity, the "Documentation Agent") and (b) the Parent Guarantee Agreement
dated as of March 12, 1996 (as amended, supplemented or otherwise modified from
time to time, the "Parent Guarantee Agreement"), between STFI and the Collateral
Agent and (c) the Subsidiary Guarantee Agreement dated as of March 12, 1996 (as
amended, supplemented or otherwise modified from time to time, the "Subsidiary
Guarantee Agreement"), among the Subsidiary Guarantors and the Collateral Agent.
B. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Security Agreement
and the Credit Agreement.
C. The Grantors have entered into the Security Agreement in
order to induce the Lenders to make Loans and the Fronting Banks to issue
Letters of Credit. Section 7.15 of Security Agreement provides that additional
Subsidiaries of STFI, the Borrower and the Subsidiaries may become Grantors
under the Security Agreement by execution and delivery of an instrument in the
form of this Supplement. The undersigned Subsidiary (the "New Grantor") is
executing this Supplement in accordance with the requirements of the Credit
Agreement to become a Grantor under the Security Agreement in order to induce
the Lenders to make additional Loans and the Fronting Banks to issue additional
Letters of Credit and as consideration for Loans previously made and Letters of
Credit previously issued.
Accordingly, the Collateral Agent and the New Grantor agree as
follows:
SECTION 1. In accordance with Section 7.15 of the Security
Agreement, the New Grantor by its signature below becomes a Grantor under the
Security Agreement with the same force and effect as if originally named therein
as a Grantor and the New Grantor hereby (a) agrees to all the terms and
provisions of the Security Agreement applicable to it as a Grantor thereunder
and (b) represents and warrants that the representations and warranties made by
it as a Grantor thereunder are true and correct on and as of the date hereof. In
furtherance of the foregoing, the New Grantor, as security for the payment and
performance in full of the Obligations (as defined in the Security Agreement),
does hereby create and grant to the Collateral Agent, its successors and
assigns, for the benefit of the Secured Parties, their successors and assigns, a
security interest in and lien on all of the
New Grantor's right, title and interest in and to the Collateral (as defined in
the Security Agreement) of the New Grantor. Each reference to a "Grantor" in the
Security Agreement shall be deemed to include the New Grantor. The Security
Agreement is hereby incorporated herein by reference.
SECTION 2. The New Grantor represents and warrants to the
Collateral Agent and the other Secured Parties that this Supplement has been
duly authorized, executed and delivered by it and constitutes its legal, valid
and binding obligation, enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Supplement shall become effective when the Collateral
Agent shall have received counterparts of this Supplement that, when taken
together, bear the signatures of the New Grantor and the Collateral Agent.
Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Supplement.
SECTION 4. The New Grantor hereby represents and warrants that
(a) set forth on Schedule I attached hereto is a true and correct schedule of
the location of any and all Collateral of the New Grantor and (b) set forth
under its signature hereto, is the true and correct location of the chief
executive office of the New Grantor.
SECTION 5. Except as expressly supplemented hereby, the
Security Agreement shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. In case any one or more of the provisions contained
in this Supplement should be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein and in the Security Agreement shall not in any way be affected
or impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties hereto shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 8. All communications and notices hereunder shall be
in writing and given as provided in Section 7.01 of the Security Agreement. All
communications and notices hereunder to the New Grantor shall be given to it at
the address set forth under its signature below.
2
SECTION 9. The New Grantor agrees to reimburse the Collateral
Agent for its reasonable out-of-pocket expenses in connection with this
Supplement, including the reasonable fees, other charges and disbursements of
counsel for the Collateral Agent.
IN WITNESS WHEREOF, the New Grantor and the Collateral Agent
have duly executed this Supplement to the Security Agreement as of the day and
year first above written.
[Name Of New Grantor],
by
--------------------------
Name:
Title:
Address:
CREDIT SUISSE, as Collateral Agent,
by
--------------------------
Name:
Title:
by
--------------------------
Name:
Title:
3
SCHEDULE I
to Supplement No.___ to the
Security Agreement
LOCATION OF COLLATERAL
Description Location
EXHIBIT H
SUBSIDIARY GUARANTEE AGREEMENT dated
as of March 13, 1996, among each of the subsidiaries
listed on Schedule I hereto (each such subsidiary
individually, a "Guarantor" and collectively, the
"Guarantors") of SHARED TECHNOLOGIES FAIRCHILD
COMMUNICATIONS CORP., a Delaware corporation (the
"Borrower"), or SHARED TECHNOLOGIES FAIRCHILD INC., a
Delaware corporation ("STFI"), and CREDIT SUISSE, a
bank organized under the laws of Switzerland, acting
through its New York branch, as collateral agent (the
"Collateral Agent") for the Secured Parties (as
defined in the Credit Agreement referred to below).
Reference is made to the Credit Agreement dated as of March
12, 1996 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among the Borrower, STFI, the lenders from time to time
party thereto (the "Lenders"), Credit Suisse, as administrative agent (in such
capacity, the "Administrative Agent") and as collateral agent (in such capacity,
the "Collateral Agent") for the Lenders, the fronting banks listed on Schedule
2.20 (the "Fronting Banks"), and each of Citicorp USA, Inc. and NationsBank,
N.A., as documentation agent (individually and collectively in such capacity,
the "Documentation Agent"). Capitalized terms used herein and not defined herein
shall have the meanings assigned to such terms in the Credit Agreement.
The Lenders have agreed to make Loans to the Borrower, and the
Fronting Banks have agreed to issue Letters of Credit for the account of the
Borrower, pursuant to, and upon the terms and subject to the conditions
specified in, the Credit Agreement. Each of the Guarantors is a wholly owned
Subsidiary of the Borrower and acknowledges that it will derive substantial
benefit from the making of the Loans by the Lenders, and the issuance of the
Letters of Credit by the Fronting Banks. The obligations of the Lenders to make
Loans and of the Fronting Banks to issue Letters of Credit are conditioned on,
among other things, the execution and delivery by the Guarantors of a Guarantee
Agreement in the form hereof. As consideration therefor and in order to induce
the Lenders to make Loans and the Fronting Banks to issue Letters of Credit, the
Guarantors are willing to execute this Agreement.
Accordingly, the parties hereto agree as follows:
SECTION 1. Guarantee. Each Guarantor unconditionally
guarantees, jointly with the other Guarantors and severally, as a primary
obligor and not merely as a surety, (a) the due and punctual payment of (i) the
principal of and premium, if any, and interest (including interest accruing
during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) on
the Loans, when and as due, whether at maturity, by acceleration, upon one or
more dates set for prepayment or otherwise, (ii) each payment required to be
made by the Borrower under the Credit Agreement in respect of any Letter of
Credit, when and as due, including payments in respect of reimbursement of
disbursements, interest thereon and obligations to provide cash collateral and
(iii) all other monetary obligations, including fees, costs, expenses and
indemnities, whether primary, secondary, direct, contingent, fixed or otherwise
(including monetary obligations incurred during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding), of the Loan Parties to the Secured
Parties under the Credit Agreement and the other Loan Documents, (b) the due and
punctual performance of all covenants, agreements, obligations and liabilities
of the Loan Parties under or pursuant to the Credit Agreement and the other Loan
Documents and (c) unless otherwise agreed
upon in writing by the applicable Lender party thereto, all obligations of the
Borrower, monetary or otherwise, under each Interest Rate Protection Agreement
entered into with a counterparty that was a Lender at the time such Interest
Rate Protection Agreement was entered into (all the monetary and other
obligations referred to in the preceding clauses (a) through (c) being
collectively called the "Obligations"). Each Guarantor further agrees that the
Obligations may be extended or renewed, in whole or in part, without notice to
or further assent from it, and that it will remain bound upon its guarantee
notwithstanding any extension or renewal of any Obligation. Each Guarantor
further agrees that (a) the maturity of the Obligations guaranteed hereby may be
accelerated as provided in Article VII of the Credit Agreement for the purposes
of such Guarantor's guarantee herein, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the Obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such obligations as provided in such Article VII, such Obligations (whether or
not due and payable) shall forthwith become due and payable by such Guarantor
for the purposes of this Section.
Anything contained in this Agreement to the contrary
notwithstanding, the obligations of each Guarantor hereunder shall be limited to
a maximum aggregate amount equal to the greatest amount that would not render
such Guarantor's obligations hereunder subject to avoidance as a fraudulent
transfer or conveyance under Section 548 of Title 11 of the United States Code
or any provisions of applicable state law (collectively, the "Fraudulent
Transfer Laws"), in each case after giving effect to all other liabilities of
such Guarantor, contingent or otherwise, that are relevant under the Fraudulent
Transfer Laws (specifically excluding, however, any liabilities of such
Guarantor (a) in respect of intercompany indebtedness to the Borrower or
Affiliates of the Borrower to the extent that such indebtedness would be
discharged in an amount equal to or offset by the amount paid by such Guarantor
hereunder and (b) under any Guarantee of senior unsecured indebtedness or
Indebtedness subordinated in right of payment to the Obligations which Guarantee
contains a limitation as to maximum amount similar to that set forth in this
paragraph, pursuant to which the liability of such Guarantor hereunder is
included in the liabilities taken into account in determining such maximum
amount) and after giving effect as assets to the value (as determined under the
applicable provisions of the Fraudulent Transfer Laws) of any rights to
subrogation, contribution, reimbursement, indemnity or similar rights of such
Guarantor pursuant to (i) applicable law or (ii) any agreement providing for an
equitable allocation among such Guarantor and other Affiliates of the Borrower
of obligations arising under Guarantees by such parties (including the
Indemnity, Subrogation and Contribution Agreement).
SECTION 2. Obligations Not Waived. To the fullest extent
permitted by applicable law, each Guarantor waives presentment to, demand of
payment from and protest to the Borrower of any of the Obligations, and also
waives notice of acceptance of its guarantee and notice of protest for
nonpayment. To the fullest extent permitted by applicable law, the obligations
of each Guarantor hereunder shall not be affected by (a) the failure of the
Collateral Agent or any other Secured Party to assert any claim or demand or to
enforce or exercise any right or remedy against the Borrower or any other
Guarantor under the provisions of the Credit Agreement, any other Loan Document
or otherwise, (b) any rescission, waiver, amendment or modification of, or any
release from any of the terms or provisions of this Agreement, any other Loan
Document, any Guarantee or any other agreement, including with respect to any
other Guarantor under this Agreement or (c) the failure to perfect any security
interest in, or the release of, any of the security held by or on behalf of the
Collateral Agent or any other Secured Party.
SECTION 3. Security. Each of the Guarantors authorizes the
Collateral Agent and each of the other Secured Parties, to (a) take and hold
security for the payment of this Guarantee and the
2
Obligations and exchange, enforce, waive and release any such security, (b)
apply such security and direct the order or manner of sale thereof as they in
their sole discretion may determine and (c) release or substitute any one or
more endorsees, other guarantors of other obligors.
SECTION 4. Guarantee of Payment. Each Guarantor further agrees
that its guarantee constitutes a guarantee of payment when due and not of
collection, and waives any right to require that any resort be had by the
Collateral Agent or any other Secured Party to any of the security held for
payment of the Obligations or to any balance of any deposit account or credit on
the books of the Collateral Agent or any other Secured Party in favor of the
Borrower or any other person.
SECTION 5. No Discharge or Diminishment of Guarantee. The
obligations of each Guarantor hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason (other than the
indefeasible payment in full in cash of the Obligations), including any claim of
waiver, release, surrender, alteration or compromise of any of the Obligations,
and shall not be subject to any defense or setoff, counterclaim, recoupment or
termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of each Guarantor hereunder shall
not be discharged or impaired or otherwise affected by the failure of the
Collateral Agent or any other Secured Party to assert any claim or demand or to
enforce any remedy under the Credit Agreement, any other Loan Document or any
other agreement, by any waiver or modification of any provision of any thereof,
by any default, failure or delay, wilful or otherwise, in the performance of the
Obligations, or by any other act or omission that may or might in any manner or
to any extent vary the risk of any Guarantor or that would otherwise operate as
a discharge of each Guarantor as a matter of law or equity (other than the
indefeasible payment in full in cash of all the Obligations).
SECTION 6. Defenses of Borrower Waived. To the fullest extent
permitted by applicable law, each of the Guarantors waives any defense based on
or arising out of any defense of the Borrower or the unenforceability of the
Obligations or any part thereof from any cause, or the cessation from any cause
of the liability of the Borrower, other than the final and indefeasible payment
in full in cash of the Obligations. The Collateral Agent and the other Secured
Parties may, at their election, foreclose on any security held by one or more of
them by one or more judicial or nonjudicial sales, accept an assignment of any
such security in lieu of foreclosure, compromise or adjust any part of the
Obligations, make any other accommodation with the Borrower or any other
guarantor or exercise any other right or remedy available to them against the
Borrower or any other guarantor, without affecting or impairing in any way the
liability of any Guarantor hereunder except to the extent the Obligations have
been fully, finally and indefeasibly paid in cash. Pursuant to applicable law,
each of the Guarantors waives any defense arising out of any such election even
though such election operates, pursuant to applicable law, to impair or to
extinguish any right of reimbursement or subrogation or other right or remedy of
such Guarantor against the Borrower or any other Guarantor or guarantor, as the
case may be, or any security.
SECTION 7. Agreement to Pay; Subordination. In furtherance of
the foregoing and not in limitation of any other right that the Collateral Agent
or any other Secured Party has at law or in equity against any Guarantor by
virtue hereof, upon the failure of the Borrower or any other Loan Party to pay
any Obligation when and as the same shall become due, whether at maturity, by
acceleration, after notice of prepayment or otherwise, each Guarantor hereby
promises to and will forthwith pay, or cause to be paid, to the Collateral Agent
or such other Secured Party as designated thereby in cash the amount of such
unpaid Obligations. Upon payment by any Guarantor of any sums to the Collateral
3
Agent or any Secured Party as provided above, all rights of such Guarantor
against the Borrower arising as a result thereof by way of right of subrogation,
contribution, reimbursement, indemnity or otherwise shall in all respects be
subordinate and junior in right of payment to the prior indefeasible payment in
full in cash of all the Obligations. In addition, any indebtedness of the
Borrower now or hereafter held by any Guarantor is hereby subordinated in right
of payment to the prior payment in full of the Obligations. If any amount shall
erroneously be paid to any Guarantor on account of (i) such subrogation,
contribution, reimbursement, indemnity or similar right or (ii) any such
indebtedness of the Borrower, such amount shall be held in trust for the benefit
of the Secured Parties and shall forthwith be paid to the Collateral Agent to be
credited against the payment of the Obligations, whether matured or unmatured,
in accordance with the terms of the Loan Documents.
SECTION 8. Information. Each of the Guarantors assumes all
responsibility for being and keeping itself informed of the Borrower's financial
condition and assets, and of all other circumstances bearing upon the risk of
nonpayment of the Obligations and the nature, scope and extent of the risks that
such Guarantor assumes and incurs hereunder, and agrees that none of the
Collateral Agent or the other Secured Parties will have any duty to advise any
of the Guarantors of information known to it or any of them regarding such
circumstances or risks.
SECTION 9. Representations and Warranties. Each of the
Guarantors represents and warrants as to itself that all representations and
warranties relating to it contained in the Credit Agreement are true and
correct.
SECTION 10. Termination. The Guarantees made hereunder (a)
shall terminate when all the Obligations have been indefeasibly paid in full and
the Lenders have no further commitment to lend under the Credit Agreement, the
L/C Exposure has been reduced to zero and the Fronting Banks have no further
obligation to issue Letters of Credit under the Credit Agreement and (b) shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any Obligation is rescinded or must otherwise
be restored by any Secured Party or any Guarantor upon the bankruptcy or
reorganization of the Borrower, any Guarantor or otherwise.
SECTION 11. Binding Effect; Several Agreement; Assignments.
Whenever in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the successors and assigns of such party;
and all covenants, promises and agreements by or on behalf of the Guarantors
that are contained in this Agreement shall bind and inure to the benefit of each
party hereto and their respective successors and assigns. This Agreement shall
become effective as to any Guarantor when a counterpart hereof executed on
behalf of such Guarantor shall have been delivered to the Collateral Agent, and
a counterpart hereof shall have been executed on behalf of the Collateral Agent,
and thereafter shall be binding upon such Guarantor and the Collateral Agent and
their respective successors and assigns, and shall inure to the benefit of such
Guarantor, the Collateral Agent and the other Secured Parties, and their
respective successors and assigns, except that no Guarantor shall have the right
to assign its rights or obligations hereunder or any interest herein (and any
such attempted assignment shall be void). If all of the capital stock of a
Guarantor is sold, transferred or otherwise disposed of pursuant to a
transaction permitted by Section 6.05 of the Credit Agreement, such Guarantor
shall be released from its obligations under this Agreement without further
action. This Agreement shall be construed as a separate agreement with respect
to each Guarantor and may be amended, modified, supplemented, waived or released
with respect to any Guarantor without the approval of any other Guarantor and
without affecting the obligations of any other Guarantor hereunder.
4
SECTION 12. Waivers; Amendment. (a) No failure or delay of the
Collateral Agent in exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Collateral Agent hereunder
and of the other Secured Parties under the other Loan Documents are cumulative
and are not exclusive of any rights or remedies that they would otherwise have.
No waiver of any provision of this Agreement or consent to any departure by any
Guarantor therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) below, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice or demand on any Guarantor in any case shall entitle such Guarantor to
any other or further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to a written agreement entered into
between the Guarantors with respect to which such waiver, amendment or
modification relates and the Collateral Agent, with the prior written consent of
the Required Lenders (except as otherwise provided in the Credit Agreement).
SECTION 13. Governing Law. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
SECTION 14. Notices. All communications and notices hereunder
shall be in writing and given as provided in Section 9.01 of the Credit
Agreement. All communications and notices hereunder to each Guarantor shall be
given to it at its address set forth in Schedule I with a copy to the Borrower.
SECTION 15. Survival of Agreement; Severability. (a) All
covenants, agreements, representations and warranties made by the Guarantors
herein and in the certificates or other instruments prepared or delivered in
connection with or pursuant to this Agreement or any other Loan Document shall
be considered to have been relied upon by the Collateral Agent and the other
Secured Parties and shall survive the making by the Lenders of the Loans and the
issuance of the Letters of Credit by the Fronting Banks regardless of any
investigation made by the Secured Parties or on their behalf, and shall continue
in full force and effect as long as the principal of or any accrued interest on
any Loan or any other fee or amount payable under this Agreement or any other
Loan Document is outstanding and unpaid or the L/C Exposure does not equal zero
and as long as the Commitments and the L/C Commitment have not been terminated.
(b) In the event any one or more of the provisions contained
in this Agreement or in any other Loan Document should be held invalid, illegal
or unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby (it being understood that the invalidity of a
particular provision in a particular jurisdiction shall not in and of itself
affect the validity of such provision in any other jurisdiction). The parties
shall endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 16. Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute a single
5
contract, and shall become effective as provided in Section 11. Delivery of an
executed signature page to this Agreement by facsimile transmission shall be as
effective as delivery of a manually executed counterpart of this Agreement.
SECTION 17. Rules of Interpretation. The rules of
interpretation specified in Section 1.02 of the Credit Agreement shall be
applicable to this Agreement.
SECTION 18. Jurisdiction; Consent to Service of Process. (a)
Each Guarantor hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that the
Collateral Agent or any other Secured Party may otherwise have to bring any
action or proceeding relating to this Agreement or the other Loan Documents
against any Guarantor or its properties in the courts of any jurisdiction.
(b) Each Guarantor hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or the other
Loan Documents in any New York State or Federal court. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 14. Nothing in
this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
SECTION 19. Waiver of Jury Trial. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS.
EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 19.
SECTION 20. Additional Guarantors. Pursuant to Section 5.11 of
the Credit Agreement, each Subsidiary of STFI, the Borrower or any Subsidiary
that was not in existence on the date of the Credit Agreement is required to
enter into this Agreement as a Guarantor upon becoming a
6
Subsidiary. Upon execution and delivery after the date hereof by the Collateral
Agent and such a Subsidiary of an instrument in the form of Annex 1, such
Subsidiary shall become a Guarantor hereunder with the same force and effect as
if originally named as a Guarantor herein. The execution and delivery of any
instrument adding an additional Guarantor as a party to this Agreement shall not
require the consent of any other Guarantor hereunder. The rights and obligations
of each Guarantor hereunder shall remain in full force and effect
notwithstanding the addition of any new Guarantor as a party to this Agreement.
SECTION 21. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Secured Party is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other Indebtedness at any time owing by such Secured
Party to or for the credit or the account of any Guarantor against any or all
the obligations of such Guarantor now or hereafter existing under this Agreement
and the other Loan Documents held by such Secured Party, irrespective of whether
or not such Secured Party shall have made any demand under this Agreement or any
other Loan Document and although such obligations may be unmatured. The rights
of each Secured Party under this Section 21 are in addition to other rights and
remedies (including other rights of setoff) which such Secured Party may have.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
EACH OF THE SUBSIDIARIES
LISTED ON SCHEDULE I HERETO,
by
-----------------------
Name:
Title:
CREDIT SUISSE, as Collateral Agent,
by
-----------------------
Name:
Title:
by
-----------------------
Name:
Title:
7
SCHEDULE I TO THE
GUARANTEE AGREEMENT
Guarantor Address
Annex 1 to the
Subsidiary Guarantee Agreement
SUPPLEMENT NO. dated as of , to the
Subsidiary Guarantee Agreement dated as of March 12,
1996, among each of the subsidiaries listed on
Schedule I thereto (each such subsidiary
individually, a "Guarantor" and collectively, the
"Guarantors") of SHARED TECHNOLOGIES FAIRCHILD
COMMUNICATIONS CORP., a Delaware corporation (the
"Borrower"), or SHARED TECHNOLOGIES FAIRCHILD INC.,
a Delaware corporation ("STFI"), and CREDIT SUISSE, a
bank organized under the laws of Switzerland, acting
through its New York branch, as collateral agent
(the "Collateral Agent") for the Secured Parties (as
defined in the Credit Agreement referred to below).
A. Referance is made to the Credit Agreement dated as of March
12, 1996 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among the Borrower, STFI, the lenders from time to time
party thereto (the "Lenders"), Credit Suisse, as administrative agent (in such
capacity, the "Administrative Agent") and as collateral agent (in such capacity,
the "Collateral Agent") for the Lenders, the fronting banks listed on Schedule
2.20 (the "Fronting Banks"), and each of Citicorp USA, Inc. and NationsBank,
N.A., as documentation agent (individually and collectively in such capacity,
the "Documentation Agent"). Capitalized terms used herein and not defined herein
shall have the meanings assigned to such terms in the Credit Agreement.
B. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Guarantee Agreement
and the Credit Agreement.
C. The Guarantors have entered into the Guarantee Agreement in
order to induce the Lenders to make Loans and the Fronting Banks to issue
Letters of Credit. Pursuant to Section 5.11 of the Credit Agreement, each
Subsidiary of STFI, the Borrower or any Subsidiary that was not in existence or
not a Subsidiary on the date of the Credit Agreement is required to enter into
the Guarantee Agreement as a Guarantor upon becoming a Subsidiary. Section 20 of
the Guarantee Agreement provides that additional Subsidiaries of the Borrower
may become Guarantors under the Guarantee Agreement by execution and delivery of
an instrument in the form of this Supplement. The undersigned Subsidiary of the
Borrower (the "New Guarantor") is executing this Supplement in accordance with
the requirements of the Credit Agreement to become a Guarantor under the
Guarantee Agreement in order to induce the Lenders to make additional Loans and
the Fronting Banks to issue additional Letters of Credit and as consideration
for Loans previously made and Letters of Credit previously issued.
Accordingly, the Collateral Agent and the New Guarantor agree
as follows:
SECTION 1. In accordance with Section 20 of the Guarantee
Agreement, the New Guarantor by its signature below becomes a Guarantor under
the Guarantee Agreement with the same force and effect as if originally named
therein as a Guarantor and the New Guarantor hereby (a) agrees to all the terms
and provisions of the Guarantee Agreement applicable to it as a Guarantor
thereunder and (b) represents and warrants that the representations and
warranties made by it as a Guarantor thereunder are true and correct on and as
of the date hereof. Each reference to a "Guarantor" in the Guarantee Agreement
shall be deemed to include the New Guarantor. The Guarantee Agreement is hereby
incorporated herein by reference.
SECTION 2. The New Guarantor represents and warrants to the
Collateral Agent
and the other Secured Parties that this Supplement has been duly authorized,
executed and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts,
each of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Supplement shall become effective when
the Collateral Agent shall have received counterparts of this Supplement that,
when taken together, bear the signatures of the New Guarantor and the Collateral
Agent. Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually executed
counterpart of this Supplement.
SECTION 4. Except as expressly supplemented hereby, the
Guarantee Agreement shall remain in full force and effect.
SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. In case any one or more of the provisions contained
in this Supplement should be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein and in the Guarantee Agreement shall not in any way be affected
or impaired thereby (it being understood that the invalidity of a particular
provision hereof in a particular jurisdiction shall not in and of itself affect
the validity of such provision in any other jurisdiction). The parties hereto
shall endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 7. All communications and notices hereunder shall be
in writing and given as provided in Section 14 of the Guarantee Agreement. All
communications and notices hereunder to the New Guarantor shall be given to it
at the address set forth under its signature below, with a copy to the Borrower.
2
SECTION 8. The New Guarantor agrees to reimburse the
Collateral Agent for its out-of-pocket expenses in connection with this
Supplement, including the reasonable fees, disbursements and other charges of
counsel for the Collateral Agent.
IN WITNESS WHEREOF, the New Guarantor and the Collateral Agent
have duly executed this Supplement to the Guarantee Agreement as of the day and
year first above written.
[Name Of New Guarantor],
by
--------------------------
Name:
Title:
Address:
CREDIT SUISSE, as Collateral Agent,
by
--------------------------
Name:
Title:
by
--------------------------
Name:
Title:
3
SCHEDULE 2.01
Revolving Lenders'
Credit Tranche A Term Tranche B Term Aggregate
Lenders Commitments Loan Commitments Loan Commitments Commitments
Credit Suisse $5,555,555.56 $11,111,111.11 $30,000,000.00 $46,666,666.67
Citicorp USA, Inc. 5,555,555.56 11,111,111.11 0.00 16,666,666.67
NationsBank, N.A. 5,555,555.55 11,111,111.11 0.00 16,666,666.66
First Source
Financial, LLP 5,000,000.00 10,000,000.00 0.00 15,000,000.00
Caisse Nationale
de Credit
Agricole 3,333,333.33 6,666,666.67 0.00 10,000,000.00
CHL High Yield
Loan Portfolio 0.00 0.00 10,000,000.00 10,000,000.00
Pilgrim Prime Rate
Trust 0.00 0.00 10,000,000.00 10,000,000.00
VanKampen American
Capital, Prime
Rate Income
Trust 0.00 0.00 10,000,000.00 10,000,000.00
Merrill Lynch
Senior High
Income
Portfolio 0.00 0.00 5,000.000.00 5,000,000.00
Senior Floating
Rate Fund, Inc. 0.00 0.00 5,000,000.00 5,000,000.00
---------------------- ------------------------ ----------------------- -----------------------
........$25,000,000.00 $50,000,000.00 $70,000,000.00 $145,000,000.00
====================== ======================== ======================= =======================
Schedule 2.20
Fronting Banks
Credit Suisse
Schedule 4.02(a)
1. Opinion of Cahill, Gordon & Reindel, counsel for The
Fairchild Corporation and RHI
2. Opinion of Swidler & Berlin, special regulatory counsel
for STFI and the Borrower
3. Opinion of Finn Dixon & Herling, Connecticut counsel
4. Opinion of Richards, Layton & Finger, counsel for STFI
5. Opinion of Stuart Meister, Vice President Law and
Administration of Fairchild Communications Services
Company
SCHEDULE 6.11
Minimum EBITDA
Period From April 1, 1996 Ending EBITDA
- -------------------------------- ------
June 30, 1996 8,000,000
September 30, 1996 20,000,000
December 31, 1996 30,000,000
4 Quarter Period Ending
March 31, 1997 40,000,000
June 30, 1997 42,000,000
September 30, 1997 43,000,000
December 31, 1997 43,000,000
March 31, 1998 46,000,000
June 30, 1998 46,000,000
September 30, 1998 49,000,000
December 31, 1998 49,000,000
March 31, 1999 53,000,000
June 30, 1999 53,000,000
September 30, 1999 55,000,000
December 31, 1999 55,000,000
March 31, 2000 58,000,000
June 30, 2000 58,000,000
September 30, 2000 60,000,000
December 31, 2000 60,000,000
March 31, 2001 63,000,000
June 30, 2001 63,000,000
September 30, 2001 66,000,000
December 31, 2001 66,000,000
March 31, 2002 69,000,000
June 30, 2002 69,000,000
September 30, 2002 72,000,000
December 31, 2002 72,000,000
March 31, 2003 76,000,000
SCHEDULE 6.13
Leverage Ratio
Period From April 1, 1996 Ending Ratio
- -------------------------------- -----
September 30, 1996 6.10
December 31, 1996 6.00
4 Quarter Period Ending
March 31, 1997 6.00
June 30, 1997 5.70
September 30, 1997 5.50
December 31, 1997 5.50
March 31, 1998 5.00
June 30, 1998 5.00
September 30, 1998 4.65
December 31, 1998 4.65
March 31, 1999 4.25
June 30, 1999 4.25
September 30, 1999 4.25
December 31, 1999 4.25
March 31, 2000 3.75
June 30, 2000 3.75
September 30, 2000 3.75
December 31, 2000 3.75
March 31, 2001 3.25
June 30, 2001 3.25
September 30, 2001 3.25
December 31, 2001 3.25
March 31, 2002 3.00
June 30, 2002 3.00
September 30, 2002 3.00
December 31, 2002 3.00
March 31, 2003 3.00
SCHEDULE 6.14
Interest Expense Coverage Ratio
Period From April 1, 1996 Ending Ratio
- -------------------------------- -----
June 30, 1996 2.50
September 30, 1996 3.00
December 31, 1996 3.00
4 Quarter Period Ending
March 31, 1997 3.00
June 30, 1997 3.25
September 30, 1997 3.50
December 31, 1997 3.50
March 31, 1998 4.00
June 30, 1998 4.00
September 30, 1998 4.00
December 31, 1998 4.00
March 31, 1999 4.00
June 30, 1999 2.00
September 30, 1999 2.00
December 31, 1999 2.00
March 31, 2000 2.00
June 30, 2000 2.25
September 30, 2000 2.25
December 31, 2000 2.25
March 31, 2001 2.50
June 30, 2001 2.50
September 30, 2001 2.50
December 31, 2001 2.50
March 31, 2002 2.80
June 30, 2002 2.80
September 30, 2002 2.80
December 31, 2002 2.80
March 31, 2003 3.00