1
EXHIBIT 10.36
REDUCING REVOLVING LOAN AGREEMENT
Dated as of June 10, 1998
among
AMERICAN COIN MERCHANDISING, INC.
THE LENDERS HEREIN NAMED
and
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent
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TABLE OF CONTENTS
Page
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Article 1 DEFINITIONS AND ACCOUNTING TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Use of Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
1.3 Accounting Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
1.4 Rounding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
1.5 Exhibits and Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
1.6 References to "Borrower and its Subsidiaries" . . . . . . . . . . . . . . . . . . . . . . 29
1.7 Miscellaneous Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Article 2 LOANS AND LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.1 Loans-General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.2 Alternate Base Rate Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
2.3 Eurodollar Rate Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
2.4 Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.5 Voluntary Reduction of Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
2.6 Automatic Reduction of Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
2.7 Specified Reductions of Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
2.8 Optional Termination of Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
2.9 Administrative Agent's Right to Assume Funds Available for Advances . . . . . . . . . . 37
2.10 Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Article 3 PAYMENTS AND FEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
3.1 Principal and Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
3.2 Arrangement Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
3.3 Commitment Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
3.4 Agency Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
3.5 Letter of Credit Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
3.6 Increased Commitment Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
3.7 Eurodollar Costs and Related Matters . . . . . . . . . . . . . . . . . . . . . . . . . . 42
3.8 Late Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
3.9 Computation of Interest and Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
3.10 Non-Banking Days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
3.11 Manner and Treatment of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
3.12 Funding Sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
3.13 Failure to Charge Not Subsequent Waiver . . . . . . . . . . . . . . . . . . . . . . . . 49
3.14 Administrative Agent's Right to Assume Payments Will be Made . . . . . . . . . . . . . . 49
3.15 Fee Determination Detail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
3.16 Survivability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Article 4 REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
4.1 Existence and Qualification; Power; Compliance With Laws . . . . . . . . . . . . . . . . 51
4.2 Authority; Compliance With Other Agreements and Instruments and
Government Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
4.3 No Governmental Approvals Required . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
4.4 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
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4.5 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
4.6 No Other Liabilities; No Material Adverse Changes . . . . . . . . . . . . . . . . . . . . 52
4.7 Title to and Location of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
4.8 Intangible Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
4.9 Public Utility Holding Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
4.10 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
4.11 Binding Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
4.12 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
4.13 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
4.14 Regulation U; Investment Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . 54
4.15 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
4.16 Tax Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
4.17 Projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
4.18 Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
4.19 Security Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Article 5 AFFIRMATIVE COVENANTS (OTHER THAN INFORMATION
AND REPORTING REQUIREMENTS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
5.1 Payment of Taxes and Other Potential Liens . . . . . . . . . . . . . . . . . . . . . . . 57
5.2 Preservation of Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
5.3 Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
5.4 Maintenance of Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
5.5 Compliance With Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
5.6 Inspection Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
5.7 Keeping of Records and Books of Account . . . . . . . . . . . . . . . . . . . . . . . . . 58
5.8 Compliance With Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
5.9 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
5.10 Hazardous Materials Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
5.11 Future Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
5.12 Future Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
5.13 Future Approved Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
5.14 Year 2000 Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
5.15 Subordinated Debt Issuance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
5.16 Syndication Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Article 6 NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
6.1 Payment of Subordinated Obligations . . . . . . . . . . . . . . . . . . . . . . . . . 61
6.2 Disposition of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
6.3 Mergers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
6.4 Hostile Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
6.5 Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
6.6 Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
6.7 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
6.8 Change in Nature of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
6.9 Liens and Negative Pledges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
6.10 Indebtedness and Guaranty Obligations . . . . . . . . . . . . . . . . . . . . . . . . 63
6.11 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
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6.12 Current Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
6.13 Senior Funded Debt Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
6.14 Total Funded Debt Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
6.15 Fixed Charge Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
6.16 Stockholders' Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
6.17 Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
6.18 Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
6.19 Operating Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
6.20 Subsidiary Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
6.21 Amendments to Subordinated Obligations . . . . . . . . . . . . . . . . . . . . . . . . 67
Article 7 INFORMATION AND REPORTING REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
7.1 Financial and Business Information . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
7.2 Compliance Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Article 8 CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
8.1 Initial Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
8.2 Any Advance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Article 9 EVENTS OF DEFAULT AND REMEDIES UPON EVENT
OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
9.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
9.2 Remedies Upon Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Article 10 THE ADMINISTRATIVE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
10.1 Appointment and Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
10.2 Administrative Agent and Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . 82
10.3 Proportionate Interest in any Collateral . . . . . . . . . . . . . . . . . . . . . . . . 82
10.4 Lenders' Credit Decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
10.5 Action by Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
10.6 Liability of Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
10.7 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
10.8 Successor Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
10.9 No Obligations of Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Article 11 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
11.1 Cumulative Remedies; No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
11.2 Amendments; Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
11.3 Costs, Expenses and Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
11.4 Nature of Lenders' Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
11.5 Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . 90
11.6 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
11.7 Execution of Loan Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
11.8 Binding Effect; Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
11.9 Right of Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
11.10 Sharing of Setoffs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
11.11 Indemnity by Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
11.12 Nonliability of the Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
11.13 No Third Parties Benefited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
11.14 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
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11.15 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
11.16 Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
11.17 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
11.18 Severability of Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
11.19 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
11.20 Time of the Essence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
11.21 Foreign Lenders and Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
11.22 Hazardous Material Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
11.23 Waiver of Right to Trial by Jury . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
11.24 Purported Oral Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
Exhibits
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A - Commitment Assignment and Acceptance
B - Compliance Certificate
C - Note
D - Opinion of Counsel
E - Pricing Certificate
F - Request for Letter of Credit
G - Request for Loan
H - Security Agreement
Schedules
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1.1 Lender Commitments
2.4 Existing Letters of Credit
4.7A Existing Liens, Negative Pledges and Rights of Others
4.7B Location of Property
4.8 Intangible Assets
4.10 Material Litigation
4.18 Hazardous Materials Matters
6.10 Existing Indebtedness and Guaranty Obligations
6.16 Existing Investments
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REDUCING REVOLVING LOAN AGREEMENT
Dated as of June 10, 1998
This REDUCING REVOLVING LOAN AGREEMENT ("Agreement") is
entered into by and among American Coin Merchandising, Inc., a Delaware
corporation ("Borrower"), each lender whose name is set forth on the signature
pages of this Agreement and each lender which may hereafter become a party to
this Agreement pursuant to Section 11.8 (collectively, the "Lenders" and
individually, a "Lender"), and ▇▇▇▇▇ Fargo Bank, National Association, as
Administrative Agent.
In consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:
Article 1
DEFINITIONS AND ACCOUNTING TERMS
1.1 Defined Terms. As used in this Agreement,
the following terms shall have the meanings set forth below:
"Acquisition" means any transaction, or any series of related
transactions, consummated after the Closing Date, by which Borrower
and/or any of its Subsidiaries directly or indirectly (a) acquires any
ongoing business or all or substantially all of the assets of any
Person engaged in any ongoing business, whether through purchase of
assets, merger or otherwise, (b) acquires control of securities of a
Person engaged in an ongoing business representing more than 50% of
the ordinary voting power for the election of directors or other
governing position if the business affairs of such Person are managed
by a board of directors or other governing body or (c) acquires
control of more than 50% of the ownership interest in any partnership,
joint venture, limited liability company, business trust or other
Person engaged in an ongoing business that is not managed by a board
of directors or other governing body.
"Administrative Agent" means ▇▇▇▇▇ Fargo Bank, National
Association, when acting in its capacity as the Administrative Agent
under any of the Loan Documents, or any successor Administrative
Agent.
"Administrative Agent's Office" means the Administrative
Agent's address as set forth on the signature pages of this Agreement,
or such other address as the Administrative Agent hereafter may
designate by written notice to Borrower and the Lenders.
"Advance" means any advance made or to be made by any Lender
to Borrower as provided in Article 2, and includes each Alternate Base
Rate Advance and Eurodollar Rate Advance.
"Affiliate" means, as to any Person, any other Person which
directly or indirectly controls, or is under common control with, or
is controlled by, such Person. As used in this
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definition, "control" (and the correlative terms, "controlled by" and
"under common control with") shall mean possession, directly or
indirectly, of power to direct or cause the direction of management or
policies (whether through ownership of securities or partnership or
other ownership interests, by contract or otherwise); provided that,
in any event, any Person that owns, directly or indirectly, 10% or
more of the securities having ordinary voting power for the election
of directors or other governing body of a corporation that has more
than 100 record holders of such securities, or 10% or more of the
partnership or other ownership interests of any other Person that has
more than 100 record holders of such interests, will be deemed to be
an Affiliate of such corporation, partnership or other Person.
"Agreement" means this Reducing Revolving Loan Agreement,
either as originally executed or as it may from time to time be
supplemented, modified, amended, restated or extended.
"Aggregate Effective Amount" means as of any date of
determination and with respect to all Letters of Credit then
outstanding, the sum of (a) the aggregate effective face amounts of
all such Letters of Credit not then paid by the Issuing Lender plus
(b) the aggregate amounts paid by the Issuing Lender under such
Letters of Credit not then reimbursed to the Issuing Lender by
Borrower pursuant to Section 2.4(d) and not the subject of Advances
made pursuant to Section 2.4(e).
"Alternate Base Rate" means, as of any date of determination,
the rate per annum (rounded upwards, if necessary, to the next 1/100
of 1%) equal to the higher of (a) the Prime Rate in effect on such
date and (b) the Federal Funds Rate in effect on such date plus ? of
1% (50 basis points).
"Alternate Base Rate Advance" means an Advance made hereunder
and specified to be an Alternate Base Rate Advance in accordance with
Article 2.
"Alternate Base Rate Loan" means a Loan made hereunder and
specified to be an Alternate Base Rate Loan in accordance with Article
2.
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"Applicable Alternate Base Rate Margin" means, for each
Pricing Period, the interest rate margin set forth below (expressed in
basis points per annum) opposite the Applicable Pricing Level for that
Pricing Period:
Applicable
Pricing Level Margin
------------- ------
I 0
II 0
III 0
IV ▇▇
▇ ▇▇
▇▇ ▇▇
▇▇▇ ▇▇▇.▇
"Applicable Commitment Fee Rate" means, for each Pricing
Period, the rate set forth below (expressed in basis points per annum)
opposite the Applicable Pricing Level for that Pricing Period:
Applicable
Pricing Level Commitment Fee
------------- --------------
I 25
II 25
III 25
IV 25
V 37.5
VI 37.5
VII 37.5
"Applicable Eurodollar Rate Margin" means, for each Pricing
Period, the interest rate margin set forth below (expressed in basis
points per annum) opposite the Applicable Pricing Level for that
Pricing Period:
Applicable
Pricing Level Margin
------------- ------
I 75
II 100
III 130
IV 165
V 200
VI 235
VII 262.5
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"Applicable Pricing Level" means (a) for the Pricing Period
commencing on the Closing Date and ending on August 15, 1998, (i)
Pricing Level I for purposes of the Applicable Commitment Fee Rate and
(ii) Pricing Level VII for purposes of the Applicable Alternate Base
Rate Margin, Applicable Eurodollar Rate Margin and Applicable Standby
Letter of Credit Fee and (b) for each subsequent Pricing Period, the
pricing level set forth below opposite the Senior Funded Debt Ratio as
of the last day of the Fiscal Quarter most recently ended prior to the
commencement of that Pricing Period:
Pricing Level Senior Funded Debt Ratio
------------- ------------------------
I Less than .75 to 1.00
II Equal to or greater than .75 to 1.00,
but less than 1.00 to 1.00
III Equal to or greater than 1.00 to 1.00,
but less than 1.25 to 1.00
IV Equal to or greater than 1.25 to 1.00,
but less than 1.50 to 1.00
V Equal to or greater than 1.50 to 1.00,
but less than 1.75 to 1.00
VI Equal to or greater than 1.75 to 1.00,
but less than 2.00 to 1.00
VII Equal to or greater than 2.00 to 1.00.
provided that (i) in the event that Borrower does not deliver a
Pricing Certificate with respect to any Pricing Period prior to the
commencement of such Pricing Period, then until (but only until) such
Pricing Certificate is delivered the Applicable Pricing Level for that
Pricing Period shall be Pricing Level VII and (ii) if any Pricing
Certificate is subsequently determined to be in error, then any
resulting change in the Applicable Pricing Level shall be made
retroactively to the beginning of the relevant Pricing Period.
"Applicable Standby Letter of Credit Fee Rate" means, as of
any date of determination, the then effective Applicable Eurodollar
Rate Margin.
"Approved Acquisitions" means the Acquisitions of the capital
stock or assets of the Approved Acquisition Targets pursuant to the
Approved Acquisition Agreements.
"Approved Acquisition Agreements" means the stock purchase
agreements and/or asset purchase agreements provided to the
Administrative Agent pursuant to Section 8.1(a)(7) or provided to the
Administrative Agent and approved by the Requisite Lenders pursuant to
Section 5.13, as in either case the same may be amended or any
provision thereof waived with the written approval of the Requisite
Lenders.
"Approved Acquisition Targets" means (a) Suncoast Toys, Inc.,
NW Toys, Inc. and Oregon Coin Company, (b) Plush 4 Play, Inc., (c)
▇▇▇▇▇▇▇ Vending, Inc., (d) Rourke Amusement Corp. and (e) R&T
Marketing, Inc.
"Arranger" means ▇▇▇▇▇ Fargo Bank, National Association.
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10
"Banking Day" means any Monday, Tuesday, Wednesday, Thursday
or Friday, other than a day on which banks are authorized or required
to be closed in California, New York or Colorado.
"Capital Expenditure" means any expenditure by Borrower or any
of its Subsidiaries for or related to fixed assets or purchased
intangibles that is treated as a capital expenditure under GAAP,
including any amount which is required to be treated as an asset
subject to a Capital Lease Obligation. The amount of Capital
Expenditures in respect of fixed assets purchased or constructed by
Borrower or any of its Subsidiaries in any fiscal period shall be net
of (a) any net sales proceeds received during such fiscal period by
Borrower or such Subsidiary for fixed assets sold by Borrower or such
Subsidiary and (b) any casualty insurance proceeds received during
such fiscal period by Borrower or such Subsidiary for casualties to
fixed assets and applied to the repair or replacement thereof.
"Capital Lease Obligations" means all monetary obligations of
a Person under any leasing or similar arrangement which, in accordance
with GAAP, is classified as a capital lease.
"Cash" means, when used in connection with any Person, all
monetary and non-monetary items owned by that Person that are treated
as cash in accordance with GAAP, consistently applied.
"Cash Equivalents" means, when used in connection with any
Person, that Person's Investments in:
(a) Government Securities due within one year
after the date of the making of the Investment;
(b) readily marketable direct obligations of any
State of the United States of America or any political subdivision of
any such State or any public agency or instrumentality thereof given
on the date of such Investment a credit rating of at least Aa by
▇▇▇▇▇'▇ Investors Service, Inc. or AA by Standard & Poor's Rating
Group (a division of ▇▇▇▇▇▇-▇▇▇▇, Inc.), in each case due within one
year from the making of the Investment;
(c) certificates of deposit issued by, bank
deposits in, Eurodollar deposits through, bankers' acceptances of, and
repurchase agreements covering Government Securities executed by any
Lender or any bank incorporated under the Laws of the United States of
America, any State thereof or the District of Columbia and having on
the date of such Investment combined capital, surplus and undivided
profits of at least $250,000,000, or total assets of at least
$5,000,000,000, in each case due within one year after the date of the
making of the Investment;
(d) certificates of deposit issued by, bank
deposits in, Eurodollar deposits through, bankers' acceptances of, and
repurchase agreements covering Government Securities executed by any
Lender or any branch or office located in the United States of America
of a bank incorporated under the Laws of any jurisdiction outside the
United States
5
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of America having on the date of such Investment combined capital,
surplus and undivided profits of at least $500,000,000, or total
assets of at least $15,000,000,000, in each case due within one year
after the date of the making of the Investment;
(e) repurchase agreements covering Government
Securities executed by a broker or dealer registered under Section
15(b) of the Securities Exchange Act of 1934, as amended, having on
the date of the Investment capital of at least $50,000,000, due within
90 days after the date of the making of the Investment; provided that
the maker of the Investment receives written confirmation of the
transfer to it of record ownership of the Government Securities on the
books of a "primary dealer" in such Government Securities or on the
books of such registered broker or dealer, as soon as practicable
after the making of the Investment;
(f) readily marketable commercial paper or other
debt securities issued by corporations doing business in and
incorporated under the Laws of the United States of America or any
State thereof or of any corporation that is the holding company for a
bank described in clause (c) or (d) above given on the date of such
Investment a credit rating of at least P-1 by ▇▇▇▇▇'▇ Investors
Service, Inc. or A-1 by Standard & Poor's Rating Group (a division of
▇▇▇▇▇▇-▇▇▇▇, Inc.), in each case due within one year after the date of
the making of the Investment;
(g) "money market preferred stock" issued by a
corporation incorporated under the Laws of the United States of
America or any State thereof (i) given on the date of such Investment
a credit rating of at least Aa by ▇▇▇▇▇'▇ Investors Service, Inc. and
AA by Standard & Poor's Rating Group (a division of ▇▇▇▇▇▇-▇▇▇▇,
Inc.), in each case having an investment period not exceeding 50 days
or (ii) to the extent that investors therein have the benefit of a
standby letter of credit issued by a Lender or a bank described in
clauses (c) or (d) above; provided that (y) the amount of all such
Investments issued by the same issuer does not exceed $5,000,000 and
(z) the aggregate amount of all such Investments does not exceed
$15,000,000;
(h) a readily redeemable "money market mutual
fund" sponsored by a bank described in clause (c) or (d) hereof, or a
registered broker or dealer described in clause (e) hereof, that has
and maintains an investment policy limiting its investments primarily
to instruments of the types described in clauses (a) through (g)
hereof and given on the date of such Investment a credit rating of at
least Aa by ▇▇▇▇▇'▇ Investors Service, Inc. and AA by Standard &
Poor's Rating Group (a division of ▇▇▇▇▇▇-▇▇▇▇, Inc.); and
(i) corporate notes or bonds having an original
term to maturity of not more than one year issued by a corporation
incorporated under the Laws of the United States of America, or a
participation interest therein; provided that (i) commercial paper
issued by such corporation is given on the date of such Investment a
credit rating of at least Aa by ▇▇▇▇▇'▇ Investors Service, Inc. and AA
by Standard & Poor's Rating Group (a division of ▇▇▇▇▇▇-▇▇▇▇, Inc.),
(ii) the amount of all such Investments issued by the same issuer does
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12
not exceed $5,000,000 and (iii) the aggregate amount of all such
Investments does not exceed $15,000,000.
"Cash Income Taxes" means, with respect to any fiscal period,
taxes on or measured by the income of Borrower that are paid or
currently payable in Cash by Borrower during that fiscal period.
"Cash Interest Expense" means Interest Expense that is paid or
currently payable in Cash.
"Certificate" means a certificate signed by a Senior Officer
or Responsible Official (as applicable) of the Person providing the
certificate.
"Change in Control" means (a) any transaction or series of
related transactions in which any Unrelated Person or two or more
Unrelated Persons acting in concert acquire beneficial ownership
(within the meaning of Rule 13d-3(a)(1) under the Securities Exchange
Act of 1934, as amended), directly or indirectly, of 25% or more of
the outstanding Common Stock, (b) Borrower consolidates with or merges
into another Person or conveys, transfers or leases its properties and
assets substantially as an entirety to any Person or any Person
consolidates with or merges into Borrower, in either event pursuant to
a transaction in which the outstanding Common Stock is changed into or
exchanged for cash, securities or other property, with the effect that
any Unrelated Person becomes the beneficial owner, directly or
indirectly, of 25% or more of Common Stock or that the Persons who
were the holders of Common Stock immediately prior to the transaction
hold less than 75% of the common stock of the surviving corporation
after the transaction, (c) during any period of 24 consecutive months,
individuals who at the beginning of such period constituted the board
of directors of Borrower (together with any new or replacement
directors whose election by the board of directors, or whose
nomination for election, was approved by a vote of at least a majority
of the directors then still in office who were either directors at the
beginning of such period or whose election or nomination for
reelection was previously so approved) cease for any reason to
constitute a majority of the directors then in office or (d) a "change
in control" as defined in any document governing Indebtedness of
Borrower in excess of $5,000,000 which gives the holders of such
Indebtedness the right to accelerate or otherwise require payment of
such Indebtedness prior to the maturity date thereof. For purposes of
the foregoing, the term "Unrelated Person" means any Person other
than(i) a Subsidiary of Borrower or (ii) an employee stock ownership
plan or other employee benefit plan covering the employees of Borrower
and its Subsidiaries.
"Change in Management" means (a) the cessation for any reason
of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ to hold the office of President and Chief Executive
Officer of Borrower and the failure of Borrower to appoint a successor
acceptable to the Requisite Lenders within the sixty (60) day period
following such cessation (b) the cessation for any reason of W. ▇▇▇▇
▇▇▇▇ to hold the office of Vice President and Chief Financial Officer
of Borrower and the failure of Borrower to appoint a successor
acceptable to the Requisite Lenders within the sixty (60) day period
following such cessation.
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13
"Closing Date" means the time and Banking Day on which the
conditions set forth in Section 8.1 are satisfied or waived. The
Administrative Agent shall notify Borrower and the Lenders of the date
that is the Closing Date.
"Code" means the Internal Revenue Code of 1986, as amended or
replaced and as in effect from time to time.
"Collateral" means all of the collateral covered by the
Collateral Documents.
"Collateral Documents" means, collectively, the Security
Agreement and any other security agreement, pledge agreement, deed of
trust, mortgage, notice to or acknowledgment of a registrar or
depositary institution, control agreement or other collateral security
agreement executed and delivered by Borrower or any of its
Subsidiaries (and executed by any third party whose signature is
necessary) to secure the Obligations.
"Commercial Letter of Credit" means each Letter of Credit
issued to support the purchase of goods by Borrower which is
determined to be a commercial letter of credit by the Issuing Lender.
"Commitment" means, subject to Sections 2.5, 2.6 and 2.7,
$50,000,000. The respective Pro Rata Shares of the Lenders with
respect to the Commitment are set forth in Schedule 1.1.
"Commitment Assignment and Acceptance" means a commitment
assignment and acceptance substantially in the form of Exhibit A.
"Common Stock" means the common stock of Borrower or its
successor.
"Compliance Certificate" means a certificate in the form of
Exhibit B, properly completed and signed by a Senior Officer of
Borrower.
"Contractual Obligation" means, as to any Person, any
provision of any outstanding security issued by that Person or of any
material agreement, instrument or undertaking to which that Person is
a party or by which it or any of its Property is bound.
"Current Ratio" means, as of any date of determination, the
ratio of (a) the consolidated current assets of Borrower and its
Subsidiaries on that date to (b) the consolidated current liabilities
of Borrower and its Subsidiaries on that date, in each case as
determined in accordance with GAAP, consistently applied.
"Debtor Relief Laws" means the Bankruptcy Code of the United
States of America, as amended from time to time, and all other
applicable liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, receivership, insolvency, reorganization, or similar
debtor relief Laws from time to time in effect affecting the rights of
creditors generally.
"Default" means any event that, with the giving of any
applicable notice or passage of time specified in Section 9.1, or
both, would be an Event of Default.
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"Default Rate" means the interest rate prescribed in Section
3.8.
"Designated Deposit Account" means a deposit account to be
maintained by Borrower with ▇▇▇▇▇ Fargo Bank, National Association or
one of its Affiliates, as from time to time designated by Borrower by
written notification to the Administrative Agent.
"Designated Eurodollar Market" means, with respect to any
Eurodollar Rate Loan, the London Eurodollar Market.
"Disqualified Stock" means any capital stock, warrants,
options or other rights to acquire capital stock (but excluding any
debt security which is convertible, or exchangeable, for capital
stock), which, by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, or is redeemable at the
option of the holder thereof, in whole or in part, on or prior to the
Maturity Date.
"Disposition" means the sale, transfer or other disposition in
any single transaction or series of related transactions of any asset,
or group of related assets, of Borrower or any of its Subsidiaries (a)
which asset or assets constitute a line of business or substantially
all the assets of Borrower or the Subsidiary or (b) the aggregate
amount of the Net Cash Sales Proceeds of such assets is more than
$100,000, other than (i) inventory or other assets sold or otherwise
disposed of in the ordinary course of business of Borrower or its
Subsidiary and (ii) equipment sold or otherwise disposed of where
substantially similar equipment in replacement thereof has theretofore
been acquired, or thereafter within 90 days is acquired, by Borrower
or its Subsidiary.
"Distribution" means, with respect to any shares of capital
stock or any warrant or option to purchase an equity security or other
equity security issued by a Person, (a) the retirement, redemption,
purchase or other acquisition for Cash or for Property by such Person
of any such security, (b) the declaration or (without duplication)
payment by such Person of any dividend in Cash or in Property on or
with respect to any such security, (c) any Investment by such Person
in the holder of 5% or more of any such security if a purpose of such
Investment is to avoid characterization of the transaction as a
Distribution and (d) any other payment in Cash or Property by such
Person constituting a distribution under applicable Laws with respect
to such security.
"Dollars" or "$" means United States of America dollars.
"EBITDA" means, with respect to any fiscal period, the sum of
(a) Net Income for that period, plus (b) any non-operating
non-recurring loss reflected in such Net Income, minus (c) any
non-operating non-recurring gain reflected in such Net Income, plus
(d) Interest Expense of Borrower and its Subsidiaries for that period,
plus (e) the aggregate amount of federal and state taxes on or
measured by income of Borrower and its Subsidiaries for that period
(whether or not payable during that period), plus (f) depreciation,
amortization and all other non-cash expenses of Borrower and its
Subsidiaries for that period, in each case
9
15
as determined in accordance with GAAP, consistently applied; provided
that, following an Acquisition permitted by Section 6.5, each
component of EBITDA shall also include the results of operations of
the Person that is the subject of the Acquisition as of the beginning
of such fiscal period.
"Eligible Assignee" means (a) another Lender, (b) with respect
to any Lender, any Affiliate of that Lender, (c) any commercial bank
having total assets of $10,000,000,000 or more, (d) any (i) savings
bank, savings and loan association or similar financial institution or
(ii) insurance company engaged in the business of writing insurance
which, in either case (A) has total assets of $10,000,000,000 or more,
(B) is engaged in the business of lending money and extending credit
under credit facilities substantially similar to those extended under
this Agreement and (C) is operationally and procedurally able to meet
the obligations of a Lender hereunder to the same degree as a
commercial bank and (e) any other financial institution (including a
mutual fund or other fund) having total assets of $10,000,000,000 or
more which meets the requirements set forth in subclauses (B) and (C)
of clause (d) above; provided that each Eligible Assignee must either
(aa) be organized under the Laws of the United States of America, any
State thereof or the District of Columbia or (bb) be organized under
the Laws of the Cayman Islands or any country which is a member of the
Organization for Economic Cooperation and Development, or a political
subdivision of such a country, and (i) act hereunder through a branch,
agency or funding office located in the United States of America and
(ii) be exempt from withholding of tax on interest and deliver the
documents related thereto pursuant to Section 11.21.
"ERISA" means the Employee Retirement Income Security Act of
1974, and any regulations issued pursuant thereto, as amended or
replaced and as in effect from time to time.
"ERISA Affiliate" means each Person (whether or not
incorporated) which is required to be aggregated with Borrower
pursuant to Section 414 of the Code.
"Eurodollar Banking Day" means any Banking Day on which
dealings in Dollar deposits are conducted by and among banks in the
Designated Eurodollar Market.
"Eurodollar Lending Office" means, as to each Lender, its
office or branch so designated by written notice to Borrower and the
Administrative Agent as its Eurodollar Lending Office. If no
Eurodollar Lending Office is designated by a Lender, its Eurodollar
Lending Office shall be its office at its address for purposes of
notices hereunder.
"Eurodollar Market" means a regular established market located
outside the United States of America by and among banks for the
solicitation, offer and acceptance of Dollar deposits in such banks.
"Eurodollar Obligations" means eurocurrency liabilities, as
defined in Regulation D or any comparable regulation of any
Governmental Agency having jurisdiction over any Lender.
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"Eurodollar Period" means, as to each Eurodollar Rate Loan,
the period commencing on the date specified by Borrower pursuant to
Section 2.1(b) and ending 1, 2, 3 or 6 months (or, with the written
consent of all of the Lenders, any other period) thereafter, as
specified by Borrower in the applicable Request for Loan; provided
that:
(a) The first day of any Eurodollar Period shall
be a Eurodollar Banking Day;
(b) Any Eurodollar Period that would otherwise
end on a day that is not a Eurodollar Banking Day shall be
extended to the immediately succeeding Eurodollar Banking Day
unless such Eurodollar Banking Day falls in another calendar
month, in which case such Eurodollar Period shall end on the
immediately preceding Eurodollar Banking Day;
(c) Borrower may not specify a Eurodollar Period
that extends beyond the next Reduction Date unless the
aggregate principal amount of the Eurodollar Loans having a
Eurodollar Period ending after such Reduction Date does not
exceed the Commitment (after giving effect to any reduction
thereto scheduled to be made on such Reduction Date pursuant
to Section 2.6); and
(d) No Eurodollar Period shall extend beyond the
Maturity Date.
"Eurodollar Rate" means, with respect to any Eurodollar Rate
Loan, the average of the interest rates per annum (rounded upward, if
necessary, to the next 1/16 of 1%) at which deposits in Dollars are
offered to the Administrative Agent in the Designated Eurodollar
Market at or about 11:00 a.m. local time in the Designated Eurodollar
Market, two (2) Eurodollar Banking Days before the first day of the
applicable Eurodollar Period in an aggregate amount approximately
equal to the amount of the Advance to be made by the Administrative
Agent with respect to such Eurodollar Rate Loan and for a period of
time comparable to the number of days in the applicable Eurodollar
Period.
"Eurodollar Rate Advance" means an Advance made hereunder and
specified to be a Eurodollar Rate Advance in accordance with Article
2.
"Eurodollar Rate Loan" means a Loan made hereunder and
specified to be a Eurodollar Rate Loan in accordance with Article 2.
"Event of Default" shall have the meaning provided in Section
9.1.
"Excess Cash Flow" means, with respect to any Fiscal Year, the
excess of (a) EBITDA for that Fiscal Year over (b) the sum of (i)
Non-Financed Capital Expenditures made during that Fiscal Year (ii)
Cash Income Taxes paid in that Fiscal Year, (iii) Cash Interest
Expense for that Fiscal Year and (iv) the aggregate scheduled
principal payments (excluding prepayments) of Indebtedness made by
Borrower during that Fiscal Year.
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17
"Existing Letters of Credit" means the letters of credit
outstanding on the Closing Date listed on Schedule 2.4.
"Federal Funds Rate" means, as of any date of determination,
the rate set forth in the weekly statistical release designated as
H.15(519), or any successor publication, published by the Federal
Reserve Board (including any such successor, "H.15(519)") for such
date opposite the caption "Federal Funds (Effective)". If for any
relevant date such rate is not yet published in H.15(519), the rate
for such date will be the rate set forth in the daily statistical
release designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published by the
Federal Reserve Lender of New York (including any such successor, the
"Composite 3:30 p.m. Quotation") for such date under the caption
"Federal Funds Effective Rate". If on any relevant date the
appropriate rate for such date is not yet published in either
H.15(519) or the Composite 3:30 p.m. Quotations, the rate for such
date will be the arithmetic mean of the rates for the last transaction
in overnight Federal funds arranged prior to 9:00 a.m. (New York City
time) on that date by each of three leading brokers of Federal funds
transactions in New York City selected by the Administrative Agent.
For purposes of this Agreement, any change in the Alternate Base Rate
due to a change in the Federal Funds Rate shall be effective as of the
opening of business on the effective date of such change.
"Fiscal Quarter" means the fiscal quarter of Borrower ending
on each March 31, June 30, September 30 and December 31.
"Fiscal Year" means the fiscal year of Borrower ending on each
December 31.
"Fixed Charge Coverage Ratio" means, as of the last day of any
Fiscal Quarter, the ratio of (a) EBITDA for the fiscal period
consisting of the four (4) Fiscal Quarters ended on that date minus
Non-Financed Capital Expenditures made by Borrower and its
Subsidiaries during such fiscal period to (b) the sum of (i) Interest
Expense of Borrower and its Subsidiaries for such fiscal period plus
(ii) Cash Income Taxes of Borrower with respect to such fiscal period
plus (iii) the current portion of long-term debt of Borrower and its
Subsidiaries on such date plus (iv) the current portion of long-term
lease obligations of Borrower and its Subsidiaries on such date.
"GAAP" means, as of any date of determination, accounting
principles (a) set forth as generally accepted in then currently
effective Opinions of the Accounting Principles Board of the American
Institute of Certified Public Accountants, (b) set forth as generally
accepted in then currently effective Statements of the Financial
Accounting Standards Board or (c) that are then approved by such other
entity as may be approved by a significant segment of the accounting
profession in the United States of America. The term "consistently
applied," as used in connection therewith, means that the accounting
principles applied are consistent in all material respects with those
applied at prior dates or for prior periods.
"Government Securities" means readily marketable (a) direct
full faith and credit obligations of the United States of America or
obligations guaranteed by the full faith and
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18
credit of the United States of America and (b) obligations of an
agency or instrumentality of, or corporation owned, controlled or
sponsored by, the United States of America that are generally
considered in the securities industry to be implicit obligations of
the United States of America.
"Governmental Agency" means (a) any international, foreign,
federal, state, county or municipal government, or political
subdivision thereof, (b) any governmental or quasi-governmental
agency, authority, board, bureau, commission, department,
instrumentality or public body or (c) any court or administrative
tribunal of competent jurisdiction.
"Guaranty Obligation" means, as to any Person, any (a)
guarantee by that Person of Indebtedness of, or other obligation
performable by, any other Person or (b) assurance given by that Person
to an obligee of any other Person with respect to the performance of
an obligation by, or the financial condition of, such other Person,
whether direct, indirect or contingent, including any purchase or
repurchase agreement covering such obligation or any collateral
security therefor, any agreement to provide funds (by means of loans,
capital contributions or otherwise) to such other Person, any
agreement to support the solvency or level of any balance sheet item
of such other Person or any "keep-well" or other arrangement of
whatever nature given for the purpose of assuring or holding harmless
such obligee against loss with respect to any obligation of such other
Person; provided, however, that the term Guaranty Obligation shall not
include endorsements of instruments for deposit or collection in the
ordinary course of business. The amount of any Guaranty Obligation in
respect of Indebtedness shall be deemed to be an amount equal to the
stated or determinable amount of the related Indebtedness (unless the
Guaranty Obligation is limited by its terms to a lesser amount, in
which case to the extent of such amount) or, if not stated or
determinable, the maximum reasonably anticipated liability in respect
thereof as determined by the Person in good faith. The amount of any
other Guaranty Obligation shall be deemed to be zero unless and until
the amount thereof has been (or in accordance with Financial
Accounting Standards Board Statement No. 5 should be) quantified and
reflected or disclosed in the consolidated financial statements (or
notes thereto) of Borrower.
"Hazardous Materials" means substances defined as "hazardous
substances" pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. Section 9601 et
seq., or as "hazardous", "toxic" or "pollutant" substances or as
"solid waste" pursuant to the Hazardous Materials Transportation Act,
49 U.S.C. Section 1801, et seq., the Resource Conservation and
Recovery Act, 42 U.S.C. Section 6901, et seq., or as "friable
asbestos" pursuant to the Toxic Substances Control Act, 15 U.S.C.
Section 2601 et seq. or any other applicable Hazardous Materials Law,
in each case as such Laws are amended from time to time.
"Hazardous Materials Laws" means all Laws governing the
treatment, transportation or disposal of Hazardous Materials
applicable to any of the Real Property.
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"Inactive Subsidiary" means a Subsidiary of Borrower that (a)
is not engaged in any active or passive business and (b) holds total
assets of $10,000 or less.
"Indebtedness" means, as to any Person (without duplication),
(a) indebtedness of such Person for borrowed money or for the deferred
purchase price of Property (excluding trade and other accounts payable
in the ordinary course of business in accordance with ordinary trade
terms), including any Guaranty Obligation for any such indebtedness,
(b) indebtedness of such Person of the nature described in clause (a)
that is non-recourse to the credit of such Person but is secured by
assets of such Person, to the extent of the fair market value of such
assets as determined in good faith by such Person, (c) Capital Lease
Obligations of such Person, (d) indebtedness of such Person arising
under bankers' acceptance facilities or under facilities for the
discount of accounts receivable of such Person, (e) any direct or
contingent obligations of such Person under letters of credit issued
for the account of such Person and (f) any net obligations of such
Person under Interest Rate Protection Agreements.
"Intangible Assets" means assets that are considered
intangible assets under GAAP, including customer lists, goodwill,
covenants not to compete, copyrights, trade names, trademarks and
patents.
"Interest Expense" means, with respect to any Person and as of
the last day of any fiscal period, the sum of (a) all interest, fees,
charges and related expenses paid or payable (without duplication) for
that fiscal period by that Person to a lender in connection with
borrowed money (including any obligations for fees, charges and
related expenses payable to the issuer of any letter of credit) or the
deferred purchase price of assets that are considered "interest
expense" under GAAP plus (b) the portion of rent paid or payable
(without duplication) for that fiscal period by that Person under
Capital Lease Obligations that should be treated as interest in
accordance with Financial Accounting Standards Board Statement No. 13.
"Interest Rate Protection Agreement" means a written agreement
between Borrower and one or more financial institutions providing for
"swap", "cap", "collar" or other interest rate protection with respect
to any Indebtedness.
"Investment" means, when used in connection with any Person,
any investment by or of that Person, whether by means of purchase or
other acquisition of stock or other securities of any other Person or
by means of a loan, advance creating a debt, capital contribution,
guaranty or other debt or equity participation or interest in any
other Person, including any partnership and joint venture interests of
such Person. The amount of any Investment shall be the amount
actually invested (minus any return of capital with respect to such
Investment which has actually been received in Cash or has been
converted into Cash), without adjustment for subsequent increases or
decreases in the value of such Investment.
"Issuing Lender" means ▇▇▇▇▇ Fargo Bank, National Association.
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"Laws" means, collectively, all international, foreign,
federal, state and local statutes, treaties, rules, regulations,
ordinances, codes and administrative or judicial precedents.
"Lender" means each lender whose name is set forth in the
signature pages of this Agreement and each lender which may hereafter
become a party to this Agreement pursuant to Section 11.8.
"Letters of Credit" means (a) the Existing Letters of Credit
and (b) any of the Commercial Letters of Credit or Standby Letters of
Credit issued by the Issuing Lender under the Commitment pursuant to
Section 2.4, either as originally issued or as the same may be
supplemented, modified, amended, renewed, extended or supplanted.
"Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment for security, security interest,
encumbrance, lien or charge of any kind, whether voluntarily incurred
or arising by operation of Law or otherwise, affecting any Property,
including any conditional sale or other title retention agreement, any
lease in the nature of a security interest, and/or the filing of any
financing statement (other than a precautionary financing statement
with respect to a lease that is not in the nature of a security
interest) under the Uniform Commercial Code or comparable Law of any
jurisdiction with respect to any Property.
"Loan" means the aggregate of the Advances made at any one
time by the Lenders pursuant to Section 2.1.
"Loan Documents" means, collectively, this Agreement, the
Notes, the Collateral Documents and any other agreements of any type
or nature hereafter executed and delivered by Borrower to the
Administrative Agent or to any Lender in any way relating to or in
furtherance of this Agreement, in each case either as originally
executed or as the same may from time to time be supplemented,
modified, amended, restated, extended or supplanted.
"Margin Stock" means "margin stock" as such term is defined in
Regulation U.
"Material Adverse Effect" means any set of circumstances or
events which (a) has had or could reasonably be expected to have any
material adverse effect whatsoever upon the validity or enforceability
of any Loan Document, (b) has been or could reasonably be expected to
be material and adverse to the business or condition (financial or
otherwise) of Borrower and its Subsidiaries, taken as a whole or (c)
has materially impaired or could reasonably be expected to materially
impair the ability of Borrower to perform the Obligations.
"Material Customer Contract" means a contract between Borrower
and a customer providing for the installation of Borrower's equipment
on the premises of the customer, which customer accounted for 10% or
more of the gross revenues of Borrower during the Fiscal Year then
most-recently ended.
"Maturity Date" means June 30, 2001.
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"Monthly Payment Date" means the last day of each calendar
month.
"Multiemployer Plan" means any employee benefit plan of the
type described in Section 4001(a)(3) of ERISA to which Borrower or any
of its ERISA Affiliates contributes or is obligated to contribute.
"Negative Pledge" means a Contractual Obligation which
contains a covenant binding on Borrower or any of its Subsidiaries
that prohibits Liens on any of its Property, other than (a) any such
covenant contained in a Contractual Obligation granting or relating to
a particular Lien which affects only the Property that is the subject
of such Lien and (b) any such covenant that does not apply to Liens
securing the Obligations.
"Net Cash Issuance Proceeds" means, with respect to the
issuance of any debt security or equity security by Borrower or any of
its Subsidiaries, the Cash proceeds received by or for the account of
Borrower or such Subsidiary in consideration of such issuance net of
(a) underwriting discounts and commissions actually paid to any Person
not an Affiliate of Borrower and (b) professional fees and
disbursements actually paid in connection therewith.
"Net Cash Sales Proceeds" means, with respect to any
Disposition, the sum of (a) the Cash proceeds received by or for the
account of Borrower and its Subsidiaries from such Disposition plus
(b) the amount of Cash received by or for the account of Borrower and
its Subsidiaries upon the sale, collection or other liquidation of any
proceeds that are not Cash from such Disposition, in each case net of
(i) any amount required to be paid to any Person owning an interest in
the assets disposed of, (ii) any amount applied to the repayment of
Indebtedness secured by a Lien permitted under Section 6.9 on the
asset disposed of, (iii) any transfer, income or other taxes payable
as a result of such Disposition, (iv) professional fees and expenses,
fees due to any Governmental Agency, broker's commissions and other
out-of-pocket costs of sale actually paid to any Person that is not an
Affiliate of Borrower attributable to such Disposition and (v) any
reserves established in accordance with GAAP in connection with such
Disposition.
"Net Income" means, with respect to any fiscal period, the
consolidated net income of Borrower and its Subsidiaries for that
period, determined in accordance with GAAP, consistently applied.
"Non-Financed Capital Expenditure" means, with respect to any
Capital Expenditure, an amount equal to 40% thereof.
"Note" means any of the promissory notes made by Borrower to a
Lender evidencing Advances under that Lender's Pro Rata Share of the
Commitment, substantially in the form of Exhibit C, either as
originally executed or as the same may from time to time be
supplemented, modified, amended, renewed, extended or supplanted.
"Obligations" means all present and future obligations of
every kind or nature of Borrower at any time and from time to time
owed to the Administrative Agent or the Lenders
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or any one or more of them, under any one or more of the Loan
Documents, whether due or to become due, matured or unmatured,
liquidated or unliquidated, or contingent or noncontingent, including
obligations of performance as well as obligations of payment, and
including interest that accrues after the commencement of any
proceeding under any Debtor Relief Law by or against Borrower.
"Opinion of Counsel" means the favorable written legal opinion
of ▇▇▇▇▇▇▇▇▇▇ Black and ▇▇▇▇, LLC, special counsel to Borrower,
substantially in the form of Exhibit D, together with copies of all
factual certificates and legal opinions delivered to such counsel in
connection with such opinion upon which such counsel has relied.
"Party" means any Person other than the Administrative Agent
and the Lenders, which now or hereafter is a party to any of the Loan
Documents.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereof established under ERISA.
"Pension Plan" means any "employee pension benefit plan" (as
such term is defined in Section 3(2) of ERISA), other than a
Multiemployer Plan, which is subject to Title IV of ERISA and is
maintained by Borrower or to which Borrower contributes or has an
obligation to contribute.
"Permitted Encumbrances" means:
(a) Inchoate Liens incident to construction on or
maintenance of Property; or Liens incident to construction on
or maintenance of Property now or hereafter filed of record
for which adequate reserves have been set aside (or deposits
made pursuant to applicable Law) and which are being contested
in good faith by appropriate proceedings and have not
proceeded to judgment, provided that, by reason of nonpayment
of the obligations secured by such Liens, no such Property is
subject to a material impending risk of loss or forfeiture;
(b) Liens for taxes and assessments on Property
which are not yet past due; or Liens for taxes and assessments
on Property for which adequate reserves have been set aside
and are being contested in good faith by appropriate
proceedings and have not proceeded to judgment, provided that,
by reason of nonpayment of the obligations secured by such
Liens, no such Property is subject to a material impending
risk of loss or forfeiture;
(c) defects and irregularities in title to any
Property which in the aggregate do not materially impair the
fair market value or use of the Property for the purposes for
which it is or may reasonably be expected to be held;
(d) easements, exceptions, reservations, or other
agreements for the purpose of pipelines, conduits, cables,
wire communication lines, power lines and substations,
streets, trails, walkways, drainage, irrigation, water, and
sewerage
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purposes, dikes, canals, ditches, the removal of oil, gas,
coal, or other minerals, and other like purposes affecting
Property which in the aggregate do not materially burden or
impair the fair market value or use of such Property for the
purposes for which it is or may reasonably be expected to be
held;
(e) easements, exceptions, reservations, or other
agreements for the purpose of facilitating the joint or common
use of Property in or adjacent to a shopping center or similar
project affecting Property which in the aggregate do not
materially burden or impair the fair market value or use of
such Property for the purposes for which it is or may
reasonably be expected to be held;
(f) rights reserved to or vested in any
Governmental Agency to control or regulate, or obligations or
duties to any Governmental Agency with respect to, the use of
any Property;
(g) rights reserved to or vested in any
Governmental Agency to control or regulate, or obligations or
duties to any Governmental Agency with respect to, any right,
power, franchise, grant, license, or permit;
(h) present or future zoning laws and ordinances
or other laws and ordinances restricting the occupancy, use,
or enjoyment of Property;
(i) statutory Liens, other than those described
in clauses (a) or (b) above, arising in the ordinary course of
business with respect to obligations which are not delinquent
or are being contested in good faith, provided that, if
delinquent, adequate reserves have been set aside with respect
thereto and, by reason of nonpayment, no Property is subject
to a material impending risk of loss or forfeiture;
(j) covenants, conditions, and restrictions
affecting the use of Property which in the aggregate do not
materially impair the fair market value or use of the Property
for the purposes for which it is or may reasonably be expected
to be held;
(k) rights of tenants under leases and rental
agreements covering Property entered into in the ordinary
course of business of the Person owning such Property;
(l) Liens consisting of pledges or deposits to
secure obligations under workers' compensation laws or similar
legislation, including Liens of judgments thereunder which are
not currently dischargeable;
(m) Liens consisting of pledges or deposits of
Property to secure performance in connection with operating
leases made in the ordinary course of business, provided the
aggregate value of all such pledges and deposits in connection
with any such lease does not at any time exceed 20% of the
annual fixed rentals payable under such lease;
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(n) Liens consisting of deposits of Property to
secure bids made with respect to, or performance of, contracts
(other than contracts creating or evidencing an extension of
credit to the depositor);
(o) Liens consisting of any right of offset, or
statutory bankers' lien, on bank deposit accounts maintained
in the ordinary course of business so long as such bank
deposit accounts are not established or maintained for the
purpose of providing such right of offset or bankers' lien;
(p) Liens consisting of deposits of Property to
secure statutory obligations of Borrower;
(q) Liens consisting of deposits of Property to
secure (or in lieu of) surety, appeal or customs bonds;
(r) Liens created by or resulting from any
litigation or legal proceeding in the ordinary course of
business which is currently being contested in good faith by
appropriate proceedings, provided that, adequate reserves have
been set aside and no material Property is subject to a
material impending risk of loss or forfeiture; and
(s) other non-consensual Liens incurred in the
ordinary course of business but not in connection with the
incurrence of any Indebtedness, which do not in the aggregate,
when taken together with all other Liens, materially impair
the fair market value or use of the Property for the purposes
for which it is or may reasonably be expected to be held.
"Permitted Right of Others" means a Right of Others consisting
of (a) an interest (other than a legal or equitable co-ownership
interest, an option or right to acquire a legal or equitable
co-ownership interest and any interest of a ground lessor under a
ground lease), that does not materially impair the fair market value
or use of Property for the purposes for which it is or may reasonably
be expected to be held, (b) an option or right to acquire a Lien that
would be a Permitted Encumbrance, (c) the subordination of a lease or
sublease in favor of a financing entity and (d) a license, or similar
right, of or to Intangible Assets granted in the ordinary course of
business.
"Person" means any individual or entity, including a trustee,
corporation, limited liability company, general partnership, limited
partnership, joint stock company, trust, estate, unincorporated
organization, business association, firm, joint venture, Governmental
Agency, or other entity.
"Pricing Certificate" means a certificate in the form of
Exhibit E, properly completed and signed by a Senior Officer of
Borrower.
"Pricing Period" means (a) the period commencing on the
Closing Date and ending on August 15, 1998, (b) the period commencing
on August 16, 1998, and each subsequent August 16, and ending on the
next following November 15, (c) the period commencing on
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each November 16 and ending on the next following February 15, (d) the
period commencing on each February 16 and ending on the next following
May 15 and (e) the period commencing on each May 16 and ending on the
next following August 15.
"Prime Rate" means the rate of interest publicly announced
from time to time by the Administrative Agent in San Francisco,
California (or other headquarters city of the Administrative Agent),
as its "prime rate." The "prime rate" is one of several base rates
used by the Administrative Agent and serves as the basis upon which
effective rates of interest are calculated for loans and other credits
making reference thereto. The "prime rate" is evidenced by the
recording thereof after its announcement in such internal publication
or publications as the Administrative Agent may designate. Any change
in the Prime Rate announced by the Administrative Agent shall take
effect at the opening of business on the day specified in the public
announcement of such change.
"Prior Credit Agreement" means that certain Credit Agreement
dated as of September 23, 1996, as amended, between Borrower and ▇▇▇▇▇
Fargo Bank, National Association.
"Projections" means the projected financial information dated
June 4, 1998 prepared by Borrower to be contained in the Confidential
Offering Memorandum furnished to the Lenders as part of the
syndication process referred to in Section 5.15.
"Property" means any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"Pro Rata Share" means, with respect to each Lender, the
percentage of the Commitment set forth opposite the name of that
Lender on Schedule 1.1, as such percentage may be increased or
decreased pursuant to a Commitment Assignment and Acceptance executed
in accordance with Section 11.8.
"Quarterly Payment Date" means each June 30, September 30,
December 31 and March 31.
"Real Property" means, as of any date of determination, all
real property then or theretofore owned, leased or occupied by any of
Borrower.
"Reduction Amount" means $1,000,000.
"Reduction Date" means September 30, 1999 and each Quarterly
Payment Date thereafter.
"Regulation D" means Regulation D, as at any time amended, of
the Board of Governors of the Federal Reserve System, or any other
regulation in substance substituted therefor.
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"Regulation U" means Regulation U, as at any time amended, of
the Board of Governors of the Federal Reserve System, or any other
regulation in substance substituted therefor.
"Request for Letter of Credit" means a written request for a
Letter of Credit substantially in the form of Exhibit F, signed by a
Responsible Official of Borrower and properly completed to provide all
information required to be included therein.
"Request for Loan" means a written request for a Loan
substantially in the form of Exhibit G, signed by a Responsible
Official of Borrower, on behalf of Borrower, and properly completed to
provide all information required to be included therein.
"Requirement of Law" means, as to any Person, the articles or
certificate of incorporation and by-laws or other organizational or
governing documents of such Person, and any Law, or judgment, award,
decree, writ or determination of a Governmental Agency, in each case
applicable to or binding upon such Person or any of its Property or to
which such Person or any of its Property is subject.
"Requisite Lenders" means (a) as of any date of determination
if the Commitment is then in effect, Lenders having in the aggregate
66-2/3% or more of the Commitment then in effect and (b) as of any
date of determination if the Commitment has then been suspended or
terminated and there is then any Indebtedness evidenced by the Notes,
Lenders holding Notes evidencing in the aggregate 66-2/3% or more of
the aggregate Indebtedness then evidenced by the Notes.
"Responsible Official" means (a) any Senior Officer of
Borrower and (b) any other responsible official of Borrower so
designated in a written notice thereof from a Senior Officer to the
Administrative Agent. The Lenders shall be entitled to conclusively
rely upon any document or certificate that is signed or executed by a
Responsible Official of Borrower or any of its Subsidiaries as having
been authorized by all necessary corporate, partnership and/or other
action on the part of Borrower or such Subsidiary.
"Right of Others" means, as to any Property in which a Person
has an interest, any legal or equitable right, title or other interest
(other than a Lien) held by any other Person in that Property, and any
option or right held by any other Person to acquire any such right,
title or other interest in that Property, including any option or
right to acquire a Lien; provided, however, that (a) no covenant
restricting the use or disposition of Property of such Person
contained in any Contractual Obligation of such Person and (b) no
provision contained in a contract creating a right of payment or
performance in favor of a Person that conditions, limits, restricts,
diminishes, transfers or terminates such right shall be deemed to
constitute a Right of Others.
"Security Agreement" means the security agreement to be
executed and delivered pursuant to Article 8 by Borrower, in the form
of Exhibit H, either as originally executed or as it may from time to
time be supplemented, modified, amended, extended or supplanted.
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"Seller Subordinated Notes" means promissory notes of Borrower
payable to the sellers of a business issued in connection with an
Acquisition permitted by Section 6.5 that meet the requirements of
subclauses (ii) through (vi) of clause (b) of the definition of
Subordinated Obligations.
"Senior Funded Debt Ratio" means, as of the last day of any
Fiscal Quarter, the ratio of (a) the sum of (i) all Senior
Indebtedness of Borrower and its Subsidiaries on that date other than
Indebtedness evidenced by the Notes plus (ii) the average daily
balance of Indebtedness evidenced by the Notes for such Fiscal Quarter
(or, if such Fiscal Quarter commenced prior to the Closing Date, for
the period commencing on the Closing Date and ended on the last day of
such Fiscal Quarter) to (b) EBITDA for the fiscal period consisting of
the four (4) Fiscal Quarters ended on that date.
"Senior Indebtedness" means all Indebtedness of Borrower other
than Subordinated Obligations.
"Senior Officer" means (a) the chief executive officer, (b)
the president, (c) any executive vice president, (d) the chief
financial officer or (e) the treasurer, in each case of Borrower.
"Special Eurodollar Circumstance" means the application or
adoption after the Closing Date of any Law or interpretation, or any
change therein or thereof, or any change in the interpretation or
administration thereof by any Governmental Agency, central bank or
comparable authority charged with the interpretation or administration
thereof, or compliance by any Lender or its Eurodollar Lending Office
with any request or directive (whether or not having the force of Law)
of any such Governmental Agency, central bank or comparable authority.
"Standby Letter of Credit" means each Letter of Credit that is
not a Commercial Letter of Credit.
"Stockholders' Equity" means, as of any date of determination
and with respect to any Person, the consolidated stockholders' equity
of the Person as of that date determined in accordance with GAAP;
provided that there shall be excluded from Stockholders' Equity any
amount attributable to Disqualified Stock.
"Subordinated Obligations" means (a) any Seller Subordinated
Notes and (b) any other Indebtedness of Borrower that (i) does not
have any scheduled principal payment, mandatory principal prepayment
or sinking fund payment due prior to June 30, 2002, (ii) is not
secured by any Lien on any Property of Borrower or any of its
Subsidiaries, (iii) is not guarantied by any Subsidiary of Borrower,
(iv) is subordinated by its terms in right of payment to the
Obligations pursuant to provisions acceptable to the Requisite
Lenders, (v) is subject to such financial and other covenants and
events of defaults as may be acceptable to the Requisite Lenders and
(vi) is subject to customary interest blockage and delayed
acceleration provisions as may be acceptable to the Requisite Lenders.
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"Subsidiary" means, as of any date of determination and with
respect to any Person, any corporation, limited liability company or
partnership (whether or not, in any case, characterized as such or as
a "joint venture"), whether now existing or hereafter organized or
acquired: (a) in the case of a corporation or limited liability
company, of which a majority of the securities having ordinary voting
power for the election of directors or other governing body (other
than securities having such power only by reason of the happening of a
contingency) are at the time beneficially owned by such Person and/or
one or more Subsidiaries of such Person, or (b) in the case of a
partnership, of which a majority of the partnership or other ownership
interests are at the time beneficially owned by such Person and/or one
or more of its Subsidiaries.
"Total Funded Debt Ratio" means, as of the last day of each
Fiscal Quarter, the ratio of (a) the sum of (i) all Indebtedness of
Borrower and its Subsidiaries on that date other than Indebtedness
evidenced by the Notes plus (ii) the average daily balance of
Indebtedness evidenced by the Notes for the period consisting of the
four (4) Fiscal Quarters ended on that date (or, if such period
extends prior to the Closing Date, for the period commencing on the
Closing Date and ended on that date) to (b) EBITDA for the fiscal
period consisting of the four (4) Fiscal Quarters ended on that date.
"to the best knowledge of" means, when modifying a
representation, warranty or other statement of any Person, that the
fact or situation described therein is known by the Person (or, in the
case of a Person other than a natural Person, known by a Responsible
Official of that Person) making the representation, warranty or other
statement, or with the exercise of reasonable due diligence under the
circumstances (in accordance with the standard of what a reasonable
Person in similar circumstances would have done) would have been known
by the Person (or, in the case of a Person other than a natural
Person, would have been known by a Responsible Official of that
Person).
"type", when used with respect to any Loan or Advance, means
the designation of whether such Loan or Advance is an Alternate Base
Rate Loan or Advance, or a Eurodollar Rate Loan or Advance.
"Wholly-Owned Subsidiary" means a Subsidiary of Borrower, 100%
of the capital stock or other equity interest of which is owned,
directly or indirectly, by Borrower, except for director's qualifying
shares required by applicable Laws.
1.2 Use of Defined Terms. Any defined term used in the
plural shall refer to all members of the relevant class, and any defined term
used in the singular shall refer to any one or more of the members of the
relevant class.
1.3 Accounting Terms. All accounting terms not
specifically defined in this Agreement shall be construed in conformity with,
and all financial data required to be submitted by this Agreement shall be
prepared in conformity with, GAAP applied on a consistent basis, except as
otherwise specifically prescribed herein. In the event that GAAP changes
during the term of this Agreement such that the covenants contained in Sections
6.12 through 6.16, inclusive, would then be calculated in a different manner or
with different components, (a) Borrower and the Lenders agree
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to amend this Agreement in such respects as are necessary to conform those
covenants as criteria for evaluating Borrower's financial condition to
substantially the same criteria as were effective prior to such change in GAAP
and (b) Borrower shall be deemed to be in compliance with the covenants
contained in the aforesaid Sections if and to the extent that Borrower would
have been in compliance therewith under GAAP as in effect immediately prior to
such change, but shall have the obligation to deliver each of the materials
described in Article 7 to the Administrative Agent and the Lenders, on the
dates therein specified, with financial data presented in a manner which
conforms with GAAP as in effect immediately prior to such change.
1.4 Rounding. Any financial ratios required to be
maintained by Borrower pursuant to this Agreement shall be calculated by
dividing the appropriate component by the other component, carrying the result
to one place more than the number of places by which such ratio is expressed in
this Agreement and rounding the result up or down to the nearest number (with a
round-up if there is no nearest number) to the number of places by which such
ratio is expressed in this Agreement.
1.5 Exhibits and Schedules. All Exhibits and Schedules
to this Agreement, either as originally existing or as the same may from time
to time be supplemented, modified or amended, are incorporated herein by this
reference. A matter disclosed on any Schedule shall be deemed disclosed on all
Schedules.
1.6 References to "Borrower and its Subsidiaries". Any
reference herein to "Borrower and its Subsidiaries" or the like shall refer
solely to Borrower during such times, if any, as Borrower shall have no
Subsidiaries.
1.7 Miscellaneous Terms. The term "or" is disjunctive;
the term "and" is conjunctive. The term "shall" is mandatory; the term "may"
is permissive. Masculine terms also apply to females; feminine terms also
apply to males. The term "including" is by way of example and not limitation.
Article 2
LOANS AND LETTERS OF CREDIT
2.1 Loans-General.
(a) Subject to the terms and conditions set forth
in this Agreement, at any time and from time to time from the Closing
Date through the Maturity Date, each Lender shall, pro rata according
to that Lender's Pro Rata Share of the then applicable Commitment,
make Advances to Borrower under the Commitment in such amounts as
Borrower may request that do not result in the sum of (i) the
aggregate principal amount outstanding under the Notes and (ii) the
Aggregate Effective Amount of all outstanding Letters of Credit to
exceed the Commitment. Subject to the limitations set forth herein,
Borrower may borrow, repay and reborrow under the Commitment without
premium or penalty.
(b) Subject to the next sentence, each Loan shall
be made pursuant to a Request for Loan which shall specify the
requested (i) date of such Loan, (ii) type of Loan,
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(iii) amount of such Loan, and (iv) in the case of a Eurodollar Rate
Loan, the Eurodollar Period for such Loan. Unless the Administrative
Agent has notified, in its sole and absolute discretion, Borrower to
the contrary, a Loan may be requested by telephone by a Responsible
Official of Borrower, in which case Borrower shall confirm such
request by promptly delivering a Request for Loan (conforming to the
preceding sentence) in person or by telecopier to the Administrative
Agent. Administrative Agent shall incur no liability whatsoever
hereunder in acting upon any telephonic request for Loan purportedly
made by a Responsible Official of Borrower, and Borrower hereby agrees
to indemnify the Administrative Agent from any loss, cost, expense or
liability as a result of so acting.
(c) Promptly following receipt of a Request for
Loan, the Administrative Agent shall notify each Lender by telephone
or telecopier (and if by telephone, promptly confirmed by telecopier)
of the date and type of the Loan, the applicable Eurodollar Period,
and that Lender's Pro Rata Share of the Loan. Not later than 10:00
a.m., California time, on the date specified for any Loan (which must
be a Banking Day), each Lender shall make its Pro Rata Share of the
Loan in immediately available funds available to the Administrative
Agent at the Administrative Agent's Office. Upon satisfaction or
waiver of the applicable conditions set forth in Article 8, all
Advances shall be credited on that date in immediately available funds
to the Designated Deposit Account.
(d) Unless the Requisite Lenders otherwise
consent, each Alternate Base Rate Loan shall be not less than $500,000
and in an integral multiple of $100,000 and each Eurodollar Rate Loan
shall be not less than $5,000,000 and in an integral multiple of
$1,000,000.
(e) Notwithstanding Section 2.1(b), during the
period commencing on the Closing Date and ending on the earlier of (i)
six (6) months after the Closing Date or (ii) the completion of the
syndication process referred to in Section 5.16, Borrower may not
request a Eurodollar Rate Loan with a Eurodollar Period longer than
one (1) month.
(f) The Advances made by each Lender under the
Commitment shall be evidenced by that Lender's Note.
(g) A Request for Loan shall be irrevocable upon
the Administrative Agent's first notification thereof.
(h) If no Request for Loan (or telephonic request
for Loan referred to in the second sentence of Section 2.1(b), if
applicable) has been made within the requisite notice periods set
forth in Section 2.2 or 2.3 prior to the end of the Eurodollar Period
for any outstanding Eurodollar Rate Loan, then on the last day of such
Eurodollar Period, such Eurodollar Rate Loan shall be automatically
converted into an Alternate Base Rate Loan in the same amount.
2.2 Alternate Base Rate Loans. Each request by Borrower
for an Alternate Base Rate Loan shall be made pursuant to a Request for Loan
(or telephonic or other request for loan referred to in the second sentence of
Section 2.1(b), if applicable) received by the Administrative
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Agent, at the Administrative Agent's Office, not later than 11:00 a.m.
California time, on the date (which must be a Banking Day) immediately prior to
the date of the requested Alternate Base Rate Loan. All Loans shall constitute
Alternate Base Rate Loans unless properly designated as a Eurodollar Rate Loan
pursuant to Section 2.3.
2.3 Eurodollar Rate Loans.
(a) Each request by Borrower for a Eurodollar
Rate Loan shall be made pursuant to a Request for Loan (or telephonic
or other request for Loan referred to in the second sentence of
Section 2.1(b), if applicable) received by the Administrative Agent,
at the Administrative Agent's Office, not later than 9:00 a.m.,
California time, at least three (3) Eurodollar Banking Days before the
first day of the applicable Eurodollar Period.
(b) On the date which is two (2) Eurodollar
Banking Days before the first day of the applicable Eurodollar Period,
the Administrative Agent shall confirm its determination of the
applicable Eurodollar Rate (which determination shall be conclusive in
the absence of manifest error) and promptly shall give notice of the
same to Borrower and the Lenders by telephone or telecopier (and if by
telephone, promptly confirmed by telecopier).
(c) Unless the Administrative Agent and the
Requisite Lenders otherwise consent, no more than five (5) Eurodollar
Rate Loans shall be outstanding at any one time.
(d) No Eurodollar Rate Loan may be requested
during the continuation of a Default or Event of Default.
(e) Nothing contained herein shall require any
Lender to fund any Eurodollar Rate Advance in the Designated
Eurodollar Market.
2.4 Letters of Credit.
(a) The Existing Letters of Credit described in
Schedule 2.4 shall be Letters of Credit for all purposes under this
Agreement. Subject to the terms and conditions hereof, at any time
and from time to time from the Closing Date through the Maturity Date,
the Issuing Lender shall issue such Letters of Credit under the
Commitment as Borrower may request by a Request for Letter of Credit;
provided that (i) giving effect to all such Letters of Credit, the sum
of (A) the aggregate principal amount outstanding under the Notes plus
(B) the Aggregate Effective Amount of all outstanding Letters of
Credit, does not exceed the then applicable Commitment and (ii) the
Aggregate Effective Amount under all outstanding Letters of Credit
does not exceed $2,000,000. Each Letter of Credit shall be in a form
acceptable to the Issuing Lender. Unless all the Lenders otherwise
consent in a writing delivered to the Administrative Agent, the term
of any Letter of Credit shall not exceed one (1) year or extend beyond
the Maturity Date.
(b) Each Request for Letter of Credit shall be
submitted to the Issuing Lender, with a copy to the Administrative
Agent, at least two (2) Banking Days prior to the
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date upon which the related Letter of Credit is proposed to be issued.
The Administrative Agent shall promptly notify the Issuing Lender
whether such Request for Letter of Credit, and the issuance of a
Letter of Credit pursuant thereto, conforms to the requirements of
this Agreement. Upon issuance of a Letter of Credit, the Issuing
Lender shall promptly notify the Administrative Agent, and the
Administrative Agent shall promptly notify the Lenders, of the amount
and terms thereof.
(c) Upon the issuance of a Letter of Credit, each
Lender shall be deemed to have purchased a pro rata participation in
such Letter of Credit from the Issuing Lender in an amount equal to
that Lender's Pro Rata Share. Without limiting the scope and nature
of each Lender's participation in any Letter of Credit, to the extent
that the Issuing Lender has not been reimbursed by Borrower for any
payment required to be made by the Issuing Lender under any Letter of
Credit, each Lender shall, pro rata according to its Pro Rata Share,
reimburse the Issuing Lender through the Administrative Agent promptly
upon demand for the amount of such payment. The obligation of each
Lender to so reimburse the Issuing Lender shall be absolute and
unconditional and shall not be affected by the occurrence of an Event
of Default or any other occurrence or event. Any such reimbursement
shall not relieve or otherwise impair the obligation of Borrower to
reimburse the Issuing Lender for the amount of any payment made by the
Issuing Lender under any Letter of Credit together with interest as
hereinafter provided.
(d) Borrower agrees to pay to the Issuing Lender
through the Administrative Agent an amount equal to any payment made
by the Issuing Lender with respect to each Letter of Credit within one
(1) Banking Day after demand made by the Issuing Lender therefor,
together with interest on such amount from the date of any payment
made by the Issuing Lender at the rate applicable to Alternate Base
Rate Loans for two (2) Banking Days and thereafter at the Default
Rate. The principal amount of any such payment shall be used to
reimburse the Issuing Lender for the payment made by it under the
Letter of Credit and, to the extent that the Lenders have not
reimbursed the Issuing Lender pursuant to Section 2.4(c), the interest
amount of any such payment shall be for the account of the Issuing
Lender. Each Lender that has reimbursed the Issuing Lender pursuant
to Section 2.4(c) for its Pro Rata Share of any payment made by the
Issuing Lender under a Letter of Credit shall thereupon acquire a pro
rata participation, to the extent of such reimbursement, in the claim
of the Issuing Lender against Borrower for reimbursement of principal
and interest under this Section 2.4(d) and shall share, in accordance
with that pro rata participation, in any principal payment made by
Borrower with respect to such claim and in any interest payment made
by Borrower (but only with respect to periods subsequent to the date
such Lender reimbursed the Issuing Lender) with respect to such claim.
(e) Borrower may, pursuant to a Request for Loan,
request that Advances be made pursuant to Section 2.1(a) to provide
funds for the payment required by Section 2.4(d) and, for this
purpose, the conditions precedent set forth in Article 8 shall not
apply. The proceeds of such Advances shall be paid directly to the
Issuing Lender to reimburse it for the payment made by it under the
Letter of Credit.
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(f) If Borrower fails to make the payment
required by Section 2.4(d) within the time period therein set forth,
in lieu of the reimbursement to the Issuing Lender under Section
2.4(c) the Issuing Lender may (but is not required to), without notice
to or the consent of Borrower, instruct the Administrative Agent to
cause Advances to be made by the Lenders under the Line A Commitment
in an aggregate amount equal to the amount paid by the Issuing Lender
with respect to that Letter of Credit and, for this purpose, the
conditions precedent set forth in Article 8 shall not apply. The
proceeds of such Advances shall be paid directly to the Issuing Lender
to reimburse it for the payment made by it under the Letter of Credit.
(g) The issuance of any supplement, modification,
amendment, renewal, or extension to or of any Letter of Credit shall
be treated in all respects the same as the issuance of a new Letter of
Credit.
(h) The obligation of Borrower to pay to the
Issuing Lender the amount of any payment made by the Issuing Lender
under any Letter of Credit shall be absolute, unconditional, and
irrevocable, subject only to performance by the Issuing Lender of its
obligations to Borrower under Uniform Commercial Code Section 5109.
Without limiting the foregoing, Borrower's obligations shall not be
affected by any of the following circumstances:
(i) any lack of validity or
enforceability prior to its stated expiration date of the
Letter of Credit, this Agreement, or any other agreement or
instrument relating thereto;
(ii) any amendment or waiver of or any
consent to departure from the Letter of Credit, this
Agreement, or any other agreement or instrument relating
thereto, with the consent of Borrower;
(iii) the existence of any claim, setoff,
defense, or other rights which Borrower may have at any time
against the Issuing Lender, the Administrative Agent or any
Lender, any beneficiary of the Letter of Credit (or any
persons or entities for whom any such beneficiary may be
acting) or any other Person, whether in connection with the
Letter of Credit, this Agreement, or any other agreement or
instrument relating thereto, or any unrelated transactions;
(iv) any demand, statement, or any other
document presented under the 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 whatsoever so long as any such document appeared
substantially to comply with the terms of the Letter of
Credit;
(v) payment by the Issuing Lender in
good faith under the Letter of Credit against presentation of
a draft or any accompanying document which does not strictly
comply with the terms of the Letter of Credit;
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(vi) the existence, character, quality,
quantity, condition, packing, value or delivery of any
Property purported to be represented by documents presented in
connection with any Letter of Credit or any difference between
any such Property and the character, quality, quantity,
condition, or value of such Property as described in such
documents;
(vii) the time, place, manner, order or
contents of shipments or deliveries of Property as described
in documents presented in connection with any Letter of Credit
or the existence, nature and extent of any insurance relative
thereto;
(viii) the solvency or financial
responsibility of any party issuing any documents in
connection with a Letter of Credit;
(ix) any failure or delay in notice of
shipments or arrival of any Property;
(x) any error in the transmission of any
message relating to a Letter of Credit not caused by the
Issuing Lender, or any delay or interruption in any such
message;
(xi) any error, neglect or default of any
correspondent of the Issuing Lender in connection with a
Letter of Credit;
(xii) any consequence arising from acts of
God, war, insurrection, civil unrest, disturbances, labor
disputes, emergency conditions or other causes beyond the
control of the Issuing Lender;
(xiii) so long as the Issuing Lender in
good faith determines that the contract or document appears
substantially to comply with the terms of the Letter of
Credit, the form, accuracy, genuineness or legal effect of any
contract or document referred to in any document submitted to
the Issuing Lender in connection with a Letter of Credit; and
(xiv) where the Issuing Lender has acted
in good faith and observed general banking usage, any other
circumstances whatsoever.
(i) The Issuing Lender shall be entitled to the
protection accorded to the Administrative Agent pursuant to Section
10.6, mutatis mutandis.
(j) The Uniform Customs and Practice for
Documentary Credits, as published in its most current version by the
International Chamber of Commerce, shall be deemed a part of this
Section and shall apply to all Letters of Credit to the extent not
inconsistent with applicable Law.
2.5 Voluntary Reduction of Commitment. Borrower shall
have the right, at any time and from time to time, without penalty or charge,
upon at least five (5) Banking Days' prior
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written notice by a Responsible Official of Borrower to the Administrative
Agent, voluntarily to reduce, permanently and irrevocably, in aggregate
principal amounts in an integral multiple of $500,000 but not less than
$2,500,000, or to terminate, all or a portion of the then undisbursed portion
of the Commitment. The Administrative Agent shall promptly notify the Lenders
of any reduction or termination of the Commitment under this Section.
2.6 Automatic Reduction of Commitment. On each Reduction
Date, the Commitment shall automatically be reduced by the applicable Reduction
Amount.
2.7 Specified Reductions of Commitment. The Commitment
shall be reduced (a) on the date of any Disposition for which a prepayment of
the Notes is required under Section 3.1(e)(i), by the amount of such required
prepayment, (b) on the date of issuance of debt securities of Borrower or any
of its Subsidiaries (other than the debt securities consisting of Subordinated
Obligations required pursuant to Section 5.15) for which a prepayment of the
Notes is required under Section 3.1(e)(ii), by the amount of such required
prepayment and (c) on the date of issuance of any equity securities of Borrower
or any of its Subsidiaries for which a prepayment is required under Section
3.1(e)(iii), by the amount of such required prepayment.
2.8 Optional Termination of Commitment. Following the
occurrence of a Change in Control or a Change in Management, the Requisite
Lenders may in their sole and absolute discretion elect, during the thirty (30)
day period immediately subsequent to the later of (a) such occurrence or (b)
the earlier of (i) receipt of Borrower's written notice to the Administrative
Agent of such occurrence or (ii) if no such notice has been received by the
Administrative Agent, the date upon which the Administrative Agent has actual
knowledge thereof, to terminate the Commitment, in which case the Commitment
shall be terminated effective on the date which is thirty (30) days subsequent
to written notice from the Administrative Agent to Borrower thereof.
2.9 Administrative Agent's Right to Assume Funds
Available for Advances. Unless the Administrative Agent shall have been
notified by any Lender no later than 10:00 a.m. on the Banking Day of the
proposed funding by the Administrative Agent of any Loan that such Lender does
not intend to make available to the Administrative Agent such Lender's portion
of the total amount of such Loan, the Administrative Agent may assume that such
Lender has made such amount available to the Administrative Agent on the date
of the Loan and the Administrative Agent may, in reliance upon such assumption,
make available to Borrower a corresponding amount. If the Administrative Agent
has made funds available to Borrower based on such assumption and such
corresponding amount is not in fact made available to the Administrative Agent
by such Lender, the Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender. If such Lender does not pay
such corresponding amount forthwith upon the Administrative Agent's demand
therefor, the Administrative Agent promptly shall notify Borrower and Borrower
shall pay such corresponding amount to the Administrative Agent. The
Administrative Agent also shall be entitled to recover from such Lender
interest on such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Administrative Agent to Borrower
to the date such corresponding amount is recovered by the Administrative Agent,
at a rate per annum equal to the daily Federal Funds Rate. Nothing herein
shall be deemed to relieve any Lender from its obligation to fulfill its share
of the Commitment or to prejudice any rights which the
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Administrative Agent or Borrower may have against any Lender as a result of any
default by such Lender hereunder.
2.10 Collateral. The Obligations shall be secured by a
first priority (subject to Liens permitted by Section 6.9) perfected (except
with respect to motor vehicles) Lien on the Collateral pursuant to the
Collateral Documents.
Article 3
PAYMENTS AND FEES
3.1 Principal and Interest.
(a) Interest shall be payable on the outstanding
daily unpaid principal amount of each Advance from the date thereof
until payment in full is made and shall accrue and be payable at the
rates set forth or provided for herein before and after Default,
before and after maturity, before and after judgment, and before and
after the commencement of any proceeding under any Debtor Relief Law,
with interest on overdue interest at the Default Rate to the fullest
extent permitted by applicable Laws.
(b) Interest accrued on each Alternate Base Rate
Loan shall be due and payable on each Monthly Payment Date. Except as
otherwise provided in Section 3.8, the unpaid principal amount of any
Alternate Base Rate Loan shall bear interest at a fluctuating rate per
annum equal to the Alternate Base Rate plus the Applicable Alternate
Base Rate Margin. Each change in the interest rate under this Section
3.1(b) due to a change in the Alternate Base Rate shall take effect
simultaneously with the corresponding change in the Alternate Base
Rate.
(c) Interest accrued on each Eurodollar Rate Loan
which is for a term of three months or less shall be due and payable
on the last day of the related Eurodollar Period. Interest accrued on
each other Eurodollar Rate Loan shall be due and payable on the date
which is three months after the date such Eurodollar Rate Loan was
made (and, in the event that all of the Lenders have approved a
Eurodollar Period of longer than six months, every three months
thereafter through the last day of the Eurodollar Period) and on the
last day of the related Eurodollar Period. Except as otherwise
provided in Section 3.8, the unpaid principal amount of any Eurodollar
Rate Loan shall bear interest at a rate per annum equal to the
Eurodollar Rate for that Eurodollar Rate Loan plus the Applicable
Eurodollar Rate Margin.
(d) If not sooner paid, the principal
Indebtedness evidenced by the Notes shall be payable as follows:
(i) the amount, if any, by which the sum
of (A) the principal Indebtedness evidenced by the Notes plus
(B) the Aggregate Effective Amount of all outstanding Letters
of Credit at any time exceeds the then applicable Commitment
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(including the Commitment as reduced pursuant to Section 2.5,
2.6 or 2.7) shall be payable immediately; and
(ii) the principal Indebtedness evidenced
by the Notes shall in any event be payable on the Maturity
Date.
(e) The principal Indebtedness evidenced by the
Notes shall be prepaid on or before the third Banking Day following
the receipt by Borrower or any of its Subsidiaries of (i) Net Cash
Sales Proceeds from Dispositions in excess of $1,000,000 in any Fiscal
Year, by an amount equal to the amount of such Net Cash Sales Proceeds
in excess of $1,000,000, (ii) Net Cash Issuance Proceeds from the
issuance of debt securities (other than the debt securities consisting
of Subordinated Obligations required pursuant to Section 5.15) of
Borrower or any of its Subsidiaries (except an issuance of debt
securities to Borrower or to a Wholly-Owned Subsidiary), by an amount
equal to 50% of such Net Cash Issuance Proceeds, (iii) Net Cash
Issuance Proceeds from the issuance of the debt securities consisting
of Subordinated Obligations required pursuant to Section 5.15, by an
amount equal to 100% of such Net Cash Issuance Proceeds and (iv) Net
Cash Issuance Proceeds from the issuance of equity securities of
Borrower or any of its Subsidiaries (except an issuance of equity
securities to Borrower or to a Wholly-Owned Subsidiary or to employees
or former employees of Borrower pursuant to an employee stock option
plan maintained by Borrower), by an amount equal to 50% of such Net
Cash Issuance Proceeds.
(f) The principal Indebtedness evidenced by the
Notes shall be prepaid on or before each March 15 by an amount equal
to 50% of Excess Cash Flow for the Fiscal Year then most recently
ended.
(g) The principal Indebtedness evidenced by the
Notes may, at any time and from time to time, voluntarily be paid or
prepaid in whole or in part without premium or penalty, except that
with respect to any voluntary prepayment under this Subsection, (i)
any partial prepayment shall be not less than $1,000,000 and shall be
an integral multiple of $500,000, (ii) the Administrative Agent shall
have received written notice of any prepayment by 9:00 a.m. California
time on the date that is one (1) Banking Day before the date of
prepayment (which must be a Banking Day) in the case of an Alternate
Base Rate Loan, and, in the case of a Eurodollar Rate Loan, three (3)
Banking Days before the date of prepayment, which notice shall
identify the date and amount of the prepayment and the Loan(s) being
prepaid, (iii) each prepayment of principal on any Eurodollar Rate
Loan shall be accompanied by payment of interest accrued to the date
of payment on the amount of principal paid and (iv) any payment or
prepayment of all or any part of any Eurodollar Rate Loan on a day
other than the last day of the applicable Eurodollar Period shall be
subject to Section 3.7(e).
3.2 Arrangement Fee. On the Closing Date, Borrower shall
pay to the Arranger the arrangement fee as heretofore agreed upon by letter
agreement dated May 21, 1998 between Borrower and the Arranger. The
arrangement fee paid to the Arranger is solely for its own account and is
nonrefundable.
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3.3 Commitment Fee. From the Closing Date through the
Maturity Date, Borrower shall pay to the Administrative Agent, for the ratable
accounts of the Lenders pro rata according to their Pro Rata Share of the
Commitment, a commitment fee equal to the Applicable Commitment Fee Rate per
annum times the average daily amount by which the Commitment exceeds the sum of
(a) the aggregate daily principal Indebtedness evidenced by the Notes plus (b)
the Aggregate Effective Amount of all outstanding Letters of Credit. The
commitment fee shall be payable quarterly in arrears as of each Quarterly
Payment Date within ten (10) days after receipt by Borrower of an invoice
therefor from the Administrative Agent.
3.4 Agency Fee. Borrower shall pay to the Administrative
Agent an agency fee in such amounts and at such times as heretofore agreed upon
by letter agreement dated May 21, 1998 between Borrower and the Administrative
Agent. The agency fee paid to the Administrative Agent is solely for its own
account and is nonrefundable.
3.5 Letter of Credit Fees. With respect to each Letter
of Credit, Borrower shall pay the following fees:
(a) concurrently with the issuance of each
Standby Letter of Credit, a letter of credit issuance fee to the
Issuing Lender for the sole account of the Issuing Lender, in an
amount set forth in the letter agreement dated May 21, 1998 between
Borrower and the Issuing Lender;
(b) concurrently with the issuance of each
Standby Letter of Credit, to the Administrative Agent for the ratable
account of the Lenders in accordance with their Pro Rata Share of the
Commitment, a standby letter of credit fee in an amount equal to the
Applicable Standby Letter of Credit Fee Rate as of the date of such
issuance times the face amount of such Standby Letter of Credit
through the termination or expiration of such Standby Letter of
Credit, which the Administrative Agent shall promptly pay to the
Lenders; and
(c) concurrently with each issuance, negotiation,
drawing or amendment of each Commercial Letter of Credit, to the
Issuing Lender for the sole account of the Issuing Lender, issuance,
negotiation, drawing and amendment fees in the amounts set forth from
time to time as the Issuing Lender's published scheduled fees for such
services.
Each of the fees payable with respect to Letters of Credit under this
Section is earned when due and is nonrefundable.
3.6 Increased Commitment Costs. If any Lender shall
determine in good faith that the introduction after the Closing Date of any
applicable law, rule, regulation or guideline regarding capital adequacy, or
any change therein or any change in the interpretation or administration
thereof by any central bank or other Governmental Agency charged with the
interpretation or administration thereof, or compliance by such Lender (or its
Eurodollar Lending Office) or any corporation controlling such Lender, with any
request, guideline or directive regarding capital adequacy (whether or not
having the force of Law) of any such central bank or other authority not
imposed as a result of such Lender's or such corporation's failure to comply
with any other Laws,
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affects or would affect the amount of capital required or expected to be
maintained by such Lender or any corporation controlling such Lender and
(taking into consideration such Lender's or such corporation's policies with
respect to capital adequacy and such Lender's desired return on capital)
determines in good faith that the amount of such capital is increased, or the
rate of return on capital is reduced, as a consequence of its obligations under
this Agreement, then, within five (5) Banking Days after demand of such Lender,
Borrower shall pay to such Lender, from time to time as specified in good faith
by such Lender, additional amounts sufficient to compensate such Lender in
light of such circumstances, to the extent reasonably allocable to such
obligations under this Agreement, provided that Borrower shall not be obligated
to pay any such amount which arose prior to the date which is ninety (90) days
preceding the date of such demand or is attributable to periods prior to the
date which is ninety (90) days preceding the date of such demand. Each
Lender's determination of such amounts shall be conclusive in the absence of
manifest error.
3.7 Eurodollar Costs and Related Matters.
(a) In the event that any Governmental Agency
imposes on any Lender any reserve or comparable requirement (including
any emergency, supplemental or other reserve) with respect to the
Eurodollar Obligations of that Lender, Borrower shall pay that Lender
within five (5) Banking Days after demand all amounts necessary to
compensate such Lender (determined as though such Lender's Eurodollar
Lending Office had funded 100% of its Eurodollar Rate Advance in the
Designated Eurodollar Market) in respect of the imposition of such
reserve requirements (provided, that Borrower shall not be obligated
to pay any such amount which arose prior to the date which is ninety
(90) days preceding the date of such demand or is attributable to
periods prior to the date which is ninety (90) days preceding the date
of such demand). The Lender's determination of such amount shall be
conclusive in the absence of manifest error.
(b) If, after the date hereof, the existence or
occurrence of any Special Eurodollar Circumstance:
(1) shall subject any Lender or its
Eurodollar Lending Office to any tax, duty or other charge or
cost with respect to any Eurodollar Rate Advance, any of its
Notes evidencing Eurodollar Rate Loans or its obligation to
make Eurodollar Rate Advances, or shall change the basis of
taxation of payments to any Lender attributable to the
principal of or interest on any Eurodollar Rate Advance or any
other amounts due under this Agreement in respect of any
Eurodollar Rate Advance, any of its Notes evidencing
Eurodollar Rate Loans or its obligation to make Eurodollar
Rate Advances, excluding (i) taxes imposed on or measured in
whole or in part by its overall net income by (A) any
jurisdiction (or political subdivision thereof) in which it is
organized or maintains its principal office or Eurodollar
Lending Office or (B) any jurisdiction (or political
subdivision thereof) in which it is "doing business" and (ii)
any withholding taxes or other taxes based on gross income
imposed by the United States of America for any period with
respect to which it has failed to provide Borrower with the
appropriate form or forms required by Section 11.21, to the
extent such forms are then required by applicable Laws;
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(2) shall impose, modify or deem
applicable any reserve not applicable or deemed applicable on
the date hereof (including any reserve imposed by the Board of
Governors of the Federal Reserve System, special deposit,
capital or similar requirements against assets of, deposits
with or for the account of, or credit extended by, any Lender
or its Eurodollar Lending Office); or
(3) shall impose on any Lender or its
Eurodollar Lending Office or the Designated Eurodollar Market
any other condition affecting any Eurodollar Rate Advance, any
of its Notes evidencing Eurodollar Rate Loans, its obligation
to make Eurodollar Rate Advances or this Agreement, or shall
otherwise affect any of the same;
and the result of any of the foregoing, as determined in good faith by
such Lender, increases the cost to such Lender or its Eurodollar
Lending Office of making or maintaining any Eurodollar Rate Advance or
in respect of any Eurodollar Rate Advance, any of its Notes evidencing
Eurodollar Rate Loans or its obligation to make Eurodollar Rate
Advances or reduces the amount of any sum received or receivable by
such Lender or its Eurodollar Lending Office with respect to any
Eurodollar Rate Advance, any of its Notes evidencing Eurodollar Rate
Loans or its obligation to make Eurodollar Rate Advances (assuming
such Lender's Eurodollar Lending Office had funded 100% of its
Eurodollar Rate Advance in the Designated Eurodollar Market), then,
within five (5) Banking Days after demand by such Lender (with a copy
to the Administrative Agent), Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender for such
increased cost or reduction (determined as though such Lender's
Eurodollar Lending Office had funded 100% of its Eurodollar Rate
Advance in the Designated Eurodollar Market); provided, that Borrower
shall not be obligated to pay any such amount which arose prior to the
date which is ninety (90) days preceding the date of such demand or is
attributable to periods prior to the date which is ninety (90) days
preceding the date of such demand. A statement of any Lender claiming
compensation under this subsection shall be conclusive in the absence
of manifest error.
(c) If, after the date hereof, the existence or
occurrence of any Special Eurodollar Circumstance shall, in the good
faith opinion of any Lender, make it unlawful or impossible for such
Lender or its Eurodollar Lending Office to make, maintain or fund its
portion of any Eurodollar Rate Loan, or materially restrict the
authority of such Lender to purchase or sell, or to take deposits of,
Dollars in the Designated Eurodollar Market, or to determine or charge
interest rates based upon the Eurodollar Rate, and such Lender shall
so notify the Administrative Agent, then such Lender's obligation to
make Eurodollar Rate Advances shall be suspended for the duration of
such illegality or impossibility and the Administrative Agent
forthwith shall give notice thereof to the other Lenders and Borrower.
Upon receipt of such notice, the outstanding principal amount of such
Lender's Eurodollar Rate Advances, together with accrued interest
thereon, automatically shall be converted to Alternate Base Rate
Advances on either (1) the last day of the Eurodollar Period(s)
applicable to such Eurodollar Rate Advances if such Lender may
lawfully continue to maintain and fund such Eurodollar Rate Advances
to such day(s) or (2) immediately if such
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Lender may not lawfully continue to fund and maintain such Eurodollar
Rate Advances to such day(s), provided that in such event the
conversion shall not be subject to payment of a prepayment fee under
Section 3.7(e). Each Lender agrees to endeavor promptly to notify
Borrower of any event of which it has actual knowledge, occurring after
the Closing Date, which will cause that Lender to notify the
Administrative Agent under this Section, and agrees to designate a
different Eurodollar Lending Office if such designation will avoid the
need for such notice and will not, in the good faith judgment of such
Lender, otherwise be materially disadvantageous to such Lender. In the
event that any Lender is unable, for the reasons set forth above, to
make, maintain or fund its portion of any Eurodollar Rate Loan, such
Lender shall fund such amount as an Alternate Base Rate Advance for the
same period of time, and such amount shall be treated in all respects
as an Alternate Base Rate Advance. Any Lender whose obligation to make
Eurodollar Rate Advances has been suspended under this Section shall
promptly notify the Administrative Agent and Borrower of the cessation
of the Special Eurodollar Circumstance which gave rise to such
suspension.
(d) If, with respect to any proposed Eurodollar
Rate Loan:
(1) the Administrative Agent reasonably
determines that, by reason of circumstances affecting the
Designated Eurodollar Market generally that are beyond the
reasonable control of the Lenders, deposits in Dollars (in the
applicable amounts) are not being offered to any Lender in the
Designated Eurodollar Market for the applicable Eurodollar
Period; or
(2) the Requisite Lenders advise the
Administrative Agent that the Eurodollar Rate as determined by
the Administrative Agent (i) does not represent the effective
pricing to such Lenders for deposits in Dollars in the
Designated Eurodollar Market in the relevant amount for the
applicable Eurodollar Period, or (ii) will not adequately and
fairly reflect the cost to such Lenders of making the
applicable Eurodollar Rate Advances;
then the Administrative Agent forthwith shall give notice thereof to
Borrower and the Lenders, whereupon until the Administrative Agent
notifies Borrower that the circumstances giving rise to such
suspension no longer exist, the obligation of the Lenders to make any
future Eurodollar Rate Advances shall be suspended.
(e) Upon payment or prepayment of any Eurodollar
Rate Advance (other than as the result of a conversion required under
Section 3.7(c) on a day other than the last day in the applicable
Eurodollar Period (whether voluntarily, involuntarily, by reason of
acceleration, or otherwise), or upon the failure of Borrower (for a
reason other than the breach by a Lender of its obligation pursuant to
Section 2.1(a) to make an Advance) to borrow on the date or in the
amount specified for a Eurodollar Rate Loan in any Request for Loan,
Borrower shall pay to the appropriate Lender within five (5) Banking
Days after demand a prepayment fee or failure to borrow fee, as the
case may be (determined as though 100% of the Eurodollar Rate Advance
had been funded in the Designated Eurodollar Market) equal to the sum
of:
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(1) $250; plus
(2) the amount, if any, by which (i) the
additional interest would have accrued on the amount prepaid
or not borrowed at the Eurodollar Rate plus the Applicable
Eurodollar Rate Margin if that amount had remained or been
outstanding through the last day of the applicable Eurodollar
Period exceeds (ii) the interest that the Lender could recover
by placing such amount on deposit in the Designated Eurodollar
Market for a period beginning on the date of the prepayment or
failure to borrow and ending on the last day of the applicable
Eurodollar Period (or, if no deposit rate quotation is
available for such period, for the most comparable period for
which a deposit rate quotation may be obtained); plus
(3) all out-of-pocket expenses incurred
by the Lender reasonably attributable to such payment,
prepayment or failure to borrow.
Each Lender's determination of the amount of any prepayment fee
payable under this Section shall be conclusive in the absence of
manifest error.
(f) Each Lender agrees to endeavor promptly to
notify Borrower of any event of which it has actual knowledge,
occurring after the Closing Date, which will entitle such Lender to
compensation pursuant to clause (a) or clause (b) of this Section, and
agrees to designate a different Eurodollar Lending Office if such
designation will avoid the need for or reduce the amount of such
compensation and will not, in the good faith judgment of such Lender,
otherwise be materially disadvantageous to such Lender. Any request
for compensation by a Lender under this Section shall set forth the
basis upon which it has been determined that such an amount is due
from Borrower, a calculation of the amount due, and a certification
that the corresponding costs have been incurred by the Lender.
3.8 Late Payments. If any installment of principal or
interest or any fee or cost or other amount payable under any Loan Document to
the Administrative Agent or any Lender is not paid when due, it shall
thereafter bear interest at a fluctuating interest rate per annum at all times
equal to the sum of the Alternate Base Rate plus the Applicable Alternate Base
Rate Margin plus 2%, to the fullest extent permitted by applicable Laws.
Accrued and unpaid interest on past due amounts (including, without limitation,
interest on past due interest) shall be compounded monthly, on the last day of
each calendar month, to the fullest extent permitted by applicable Laws.
3.9 Computation of Interest and Fees. Computation of
interest and fees under this Agreement shall be calculated on the basis of a
year of 360 days and the actual number of days elapsed. Interest shall accrue
on each Loan for the day on which the Loan is made; interest shall not accrue
on a Loan, or any portion thereof, for the day on which the Loan or such
portion is paid. Any Loan that is repaid on the same day on which it is made
shall bear interest for one day. Notwithstanding anything in this Agreement to
the contrary, interest in excess of the maximum amount permitted by applicable
Laws shall not accrue or be payable hereunder or under the Notes, and any
amount paid as interest hereunder or under the Notes which would otherwise be
in excess of such maximum permitted amount shall instead be treated as a
payment of principal.
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3.10 Non-Banking Days. If any payment to be made by
Borrower or any other Party under any Loan Document shall come due on a day
other than a Banking Day, payment shall instead be considered due on the next
succeeding Banking Day and the extension of time shall be reflected in
computing interest and fees.
3.11 Manner and Treatment of Payments.
(a) Each payment hereunder (except payments
pursuant to Sections 3.6, 3.7, 11.3, 11.11 and 11.22) or on the Notes
or under any other Loan Document shall be made to the Administrative
Agent at the Administrative Agent's Office for the account of each of
the Lenders or the Administrative Agent, as the case may be, in
immediately available funds not later than 11:00 a.m. California time,
on the day of payment (which must be a Banking Day). All payments
received after such time, on any Banking Day, shall be deemed received
on the next succeeding Banking Day. The amount of all payments
received by the Administrative Agent for the account of each Lender
shall be immediately paid by the Administrative Agent to the
applicable Lender in immediately available funds and, if such payment
was received by the Administrative Agent by 11:00 a.m., California
time, on a Banking Day and not so made available to the account of a
Lender on that Banking Day, the Administrative Agent shall reimburse
that Lender for the cost to such Lender of funding the amount of such
payment at the Federal Funds Rate. All payments shall be made in
lawful money of the United States of America.
(b) Borrower hereby authorizes the Administrative
Agent to debit the general operating bank account of Borrower to
effect any payment due to the Lenders or the Administrative Agent
pursuant to this Agreement. Any resulting overdraft in such account
shall be payable by Borrower to the Administrative Agent on the next
following Banking Day.
(c) Each payment or prepayment on account of any
Loan shall be applied pro rata according to the outstanding Advances
made by each Lender comprising such Loan.
(d) Each Lender shall use its best efforts to
keep a record (in writing or by an electronic data entry system) of
Advances made by it and payments received by it with respect to each
of its Notes and, subject to Section 10.6(g), such record shall, as
against Borrower, be presumptive evidence of the amounts owing.
Notwithstanding the foregoing sentence, the failure by any Lender to
keep such a record shall not affect Borrower's obligation to pay the
Obligations.
(e) Each payment of any amount payable by
Borrower or any other Party under this Agreement or any other Loan
Document shall be made free and clear of, and without reduction by
reason of, any taxes, assessments or other charges imposed by any
Governmental Agency, central bank or comparable authority,
excluding(i) taxes imposed on or measured in whole or in part by its
overall net income by (A) any jurisdiction (or political subdivision
thereof) in which it is organized or maintains its principal office or
Eurodollar Lending Office or (B) any jurisdiction (or political
subdivision thereof) in which it is "doing business" and (ii) any
withholding taxes or other taxes based on gross income
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imposed by the United States of America for any period with respect to
which it has failed to provide Borrower with the appropriate form or
forms required by Section 11.21, to the extent such forms are then
required by applicable Laws (all such non-excluded taxes, assessments
or other charges being hereinafter referred to as "Taxes"). To the
extent that Borrower is obligated by applicable Laws to make any
deduction or withholding on account of Taxes from any amount payable
to any Lender under this Agreement, Borrower shall (i) make such
deduction or withholding and pay the same to the relevant Governmental
Agency and (ii) pay such additional amount to that Lender as is
necessary to result in that Lender's receiving a net after-Tax amount
equal to the amount to which that Lender would have been entitled
under this Agreement absent such deduction or withholding. If and
when receipt of such payment results in an excess payment or credit to
that Lender on account of such Taxes, that Lender shall promptly
refund such excess to Borrower.
3.12 Funding Sources. Nothing in this Agreement shall be
deemed to obligate any Lender to obtain the funds for any Loan or Advance in
any particular place or manner or to constitute a representation by any Lender
that it has obtained or will obtain the funds for any Loan or Advance in any
particular place or manner.
3.13 Failure to Charge Not Subsequent Waiver. Any
decision by the Administrative Agent or any Lender not to require payment of
any interest (including interest arising under Section 3.8), fee, cost or other
amount payable under any Loan Document, or to calculate any amount payable by a
particular method, on any occasion shall in no way limit or be deemed a waiver
of the Administrative Agent's or such Lender's right to require full payment of
any interest (including interest arising under Section 3.8), fee, cost or other
amount payable under any Loan Document, or to calculate an amount payable by
another method that is not inconsistent with this Agreement, on any other or
subsequent occasion.
3.14 Administrative Agent's Right to Assume Payments Will
be Made. Unless the Administrative Agent shall have been notified by Borrower
prior to the date on which any payment to be made by Borrower hereunder is due
that Borrower does not intend to remit such payment, the Administrative Agent
may, in its discretion, assume that Borrower has remitted such payment when so
due and the Administrative Agent may, in its discretion and in reliance upon
such assumption, make available to each Lender on such payment date an amount
equal to such Lender's share of such assumed payment. If Borrower has not in
fact remitted such payment to the Administrative Agent, each Lender shall
forthwith on demand repay to the Administrative Agent the amount of such
assumed payment made available to such Lender, together with interest thereon
in respect of each day from and including the date such amount was made
available by the Administrative Agent to such Lender to the date such amount is
repaid to the Administrative Agent at the Federal Funds Rate.
3.15 Fee Determination Detail. The Administrative Agent,
and any Lender, shall provide reasonable detail to Borrower regarding the
manner in which the amount of any payment to the Administrative Agent and the
Lenders, or that Lender, under Article 3 has been determined, concurrently with
demand for such payment.
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3.16 Survivability. All of Borrower's obligations under
Sections 3.6 and 3.7 shall survive for the ninety (90) day period following the
date on which the Commitment is terminated and all Loans hereunder are fully
paid, and Borrower shall remain obligated thereunder for all claims under such
Sections made by any Lender to Borrower prior to the expiration of such period.
Article 4
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to the Lenders that:
4.1 Existence and Qualification; Power; Compliance With
Laws. Borrower is a corporation duly formed, validly existing and in good
standing under the Laws of Delaware. Borrower is duly qualified or registered
to transact business and is in good standing in Colorado and each other
jurisdiction in which the conduct of its business or the ownership or leasing
of its Properties makes such qualification or registration necessary, except
where the failure so to qualify or register and to be in good standing would
not constitute a Material Adverse Effect. Borrower has all requisite power and
authority to conduct its business, to own and lease its Properties and to
execute and deliver each Loan Document to which it is a Party and to perform
its Obligations. The chief executive offices of Borrower are located in
Colorado. All outstanding shares of capital stock of Borrower are duly
authorized, validly issued, fully paid and non-assessable, and no holder
thereof has any enforceable right of rescission under any applicable state or
federal securities Laws. Borrower is in compliance with all Laws and other
legal requirements applicable to its business, has obtained all authorizations,
consents, approvals, orders, licenses and permits from, and has accomplished
all filings, registrations and qualifications with, or obtained exemptions from
any of the foregoing from, any Governmental Agency that are necessary for the
transaction of its business, except where the failure so to comply, obtain
authorizations, etc., file, register, qualify or obtain exemptions does not
constitute a Material Adverse Effect.
4.2 Authority; Compliance With Other Agreements and
Instruments and Government Regulations. The execution, delivery and
performance by Borrower of the Loan Documents to which it is a Party have been
duly authorized by all necessary corporate action, and do not and will not:
(a) Require any consent or approval not
heretofore obtained of any partner, director, stockholder, security
holder or creditor of such Party;
(b) Violate or conflict with any provision of
such Party's charter, articles of incorporation or bylaws, as
applicable;
(c) Result in or require the creation or
imposition of any Lien (other than pursuant to the Loan Documents) or
Right of Others upon or with respect to any Property now owned or
leased or hereafter acquired by such Party;
(d) Violate any Requirement of Law applicable to
such Party;
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(e) Result in a breach of or constitute a default
under, or cause or permit the acceleration of any obligation owed
under, any indenture or loan or credit agreement or any other
Contractual Obligation to which such Party is a party or by which such
Party or any of its Property is bound or affected;
and such Party is not in violation of, or default under, any Requirement of Law
or Contractual Obligation, or any indenture, loan or credit agreement described
in Section 4.2(e), in any respect that constitutes a Material Adverse Effect.
4.3 No Governmental Approvals Required. Except as
previously obtained or made, no authorization, consent, approval, order,
license or permit from, or filing, registration or qualification with, any
Governmental Agency is or will be required to authorize or permit under
applicable Laws the execution, delivery and performance by Borrower of the Loan
Documents to which it is a Party.
4.4 Subsidiaries. Borrower has no Subsidiaries other
than Inactive Subsidiaries.
4.5 Financial Statements. Borrower has furnished to the
Lenders (a) the audited financial statements of Borrower for the Fiscal Year
ended December 31, 1997 and (b) the unaudited balance sheet and statement of
operations of Borrower for the Fiscal Quarter ended March 31, 1998. The
financial statements described in clause (a) fairly present in all material
respects the financial condition, results of operations and changes in
financial position, and the balance sheet and statement of operations described
in clause (b) fairly present the financial condition and results of operations
of Borrower as of such dates and for such periods in conformity with GAAP
consistently applied, subject only to normal year-end accruals and audit
adjustments.
4.6 No Other Liabilities; No Material Adverse Changes.
Borrower and its Subsidiaries do not have any material liability or material
contingent liability required under GAAP to be reflected or disclosed, and not
reflected or disclosed, in the balance sheet described in Section 4.5(b), other
than liabilities and contingent liabilities arising in the ordinary course of
business since the date of such financial statements. As of the Closing Date,
no circumstance or event has occurred that constitutes a Material Adverse
Effect since March 31, 1998.
4.7 Title to and Location of Property. Borrower and its
Subsidiaries have valid title to the Property (other than assets which are the
subject of a Capital Lease Obligation) reflected in the balance sheet described
in Section 4.5(b), other than items of Property or exceptions to title which
are in each case immaterial and Property subsequently sold or disposed of in
the ordinary course of business. Such Property is free and clear of all Liens
and Rights of Others, other than Liens or Rights of Others described in
Schedule 4.7A and Permitted Encumbrances and Permitted Rights of Others. All
Property of Borrower and its Subsidiaries is located in one of the States of
the United States of America described in Schedule 4.7B.
4.8 Intangible Assets. Borrower and its Subsidiaries
own, or possess the right to use to the extent necessary in their respective
businesses, all material trademarks, trade names,
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copyrights, patents, patent rights, computer software, licenses and other
Intangible Assets that are used in the conduct of their businesses as now
operated, and no such Intangible Asset, to the best knowledge of Borrower,
conflicts with the valid trademark, trade name, copyright, patent, patent right
or Intangible Asset of any other Person to the extent that such conflict
constitutes a Material Adverse Effect. Schedule 4.8 sets forth all material
trademarks, trade names, copyrights, patents, and licenses for any of the
foregoing owned by Borrower and its Subsidiaries. Except as set forth in
Schedule 4.8, Borrower has not used any trade name, trade style or "dba" during
the five year period ending on the Closing Date.
4.9 Public Utility Holding Company Act. Neither Borrower
nor any of its Subsidiaries is a "holding company", or a "subsidiary company"
of a "holding company", or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company", within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
4.10 Litigation. Except for (a) any matter fully covered
as to subject matter and amount (subject to applicable deductibles and
retentions) by insurance for which the insurance carrier has not asserted lack
of subject matter coverage or reserved its right to do so, (b) any matter, or
series of related matters, involving a claim against Borrower or any of its
Subsidiaries of less than $100,000, (c) matters of an administrative nature not
involving a claim or charge against Borrower or any of its Subsidiaries and (d)
matters set forth in Schedule 4.10, there are no actions, suits, proceedings or
investigations pending as to which Borrower or any of its Subsidiaries have
been served or have received notice or, to the best knowledge of Borrower,
threatened against or affecting Borrower or any of its Subsidiaries or any
Property of any of them before any Governmental Agency.
4.11 Binding Obligations. Each of the Loan Documents to
which Borrower is a Party will, when executed and delivered by Borrower,
constitute the legal, valid and binding obligation of Borrower, enforceable
against Borrower in accordance with its terms, except as enforcement may be
limited by Debtor Relief Laws or equitable principles relating to the granting
of specific performance and other equitable remedies as a matter of judicial
discretion.
4.12 No Default. No event has occurred and is continuing
that is a Default or Event of Default.
4.13 ERISA.
(a) With respect to each Pension Plan:
(i) such Pension Plan complies in all
material respects with ERISA and any other applicable Laws to
the extent that noncompliance could reasonably be expected to
have a Material Adverse Effect;
(ii) such Pension Plan has not incurred
any "accumulated funding deficiency" (as defined in Section
302 of ERISA) that could reasonably be expected to have a
Material Adverse Effect;
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(iii) no "reportable event" (as defined in
Section 4043 of ERISA, but excluding such events as to which
the PBGC has by regulation waived the requirement therein
contained that it be notified within thirty days of the
occurrence of such event) has occurred that could reasonably
be expected to have a Material Adverse Effect; and
(iv) neither Borrower nor any of its
Subsidiaries has engaged in any non-exempt "prohibited
transaction" (as defined in Section 4975 of the Code) that
could reasonably be expected to have a Material Adverse
Effect.
(b) Neither Borrower nor any of its Subsidiaries
has incurred or expects to incur any withdrawal liability to any
Multiemployer Plan that could reasonably be expected to have a
Material Adverse Effect.
4.14 Regulation U; Investment Company Act. No part of the
proceeds of any Loan hereunder will be used to purchase or carry, or to extend
credit to others for the purpose of purchasing or carrying, any Margin Stock in
violation of Regulation U. Neither Borrower nor any of its Subsidiaries is or
is required to be registered as an "investment company" under the Investment
Company Act of 1940.
4.15 Disclosure. No written statement made by a Senior
Officer to the Administrative Agent or any Lender in connection with this
Agreement, or in connection with any Loan, as of the date thereof contained any
untrue statement of a material fact or omitted a material fact necessary to
make the statement made not misleading in light of all the circumstances
existing at the date the statement was made.
4.16 Tax Liability. Borrower and its Subsidiaries have
filed all tax returns which are required to be filed, and have paid, or made
provision for the payment of, all taxes with respect to the periods, Property
or transactions covered by said returns, or pursuant to any assessment received
by Borrower or any of its Subsidiaries, except (a) such taxes, if any, as are
being contested in good faith by appropriate proceedings and as to which
adequate reserves have been established and maintained and (b) immaterial taxes
so long as no material Property of Borrower or any of its Subsidiaries is at
impending risk of being seized, levied upon or forfeited.
4.17 Projections. As of the Closing Date, to the best
knowledge of Borrower, the assumptions set forth in the Projections are
reasonable and consistent with each other and with all facts known to Borrower,
and the Projections are reasonably based on such assumptions. Nothing in this
Section 4.17 shall be construed as a representation or covenant that the
Projections in fact will be achieved.
4.18 Hazardous Materials. Except as described in Schedule
4.18, as of the Closing Date (a) neither Borrower nor any of its Subsidiaries
(from and after the Acquisition of any Subsidiary by Borrower) at any time has
disposed of, discharged, released or threatened the release of any Hazardous
Materials on, from or under the Real Property in violation of any Hazardous
Materials Law that would individually or in the aggregate constitute a Material
Adverse Effect, (b) to the best knowledge of Borrower, no condition exists that
violates any Hazardous Material Law
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affecting any Real Property except for such violations that would not
individually or in the aggregate constitute a Material Adverse Effect, (c) no
Real Property or any portion thereof is or has been utilized by Borrower or any
of its Subsidiaries (from and after the Acquisition of any Subsidiary by
Borrower) as a site for the manufacture of any Hazardous Materials and (d) to
the extent that any Hazardous Materials are used, generated or stored by
Borrower or any of its Subsidiaries on any Real Property, or transported to or
from such Real Property by Borrower or any of its Subsidiaries, such use,
generation, storage and transportation are in compliance with all Hazardous
Materials Laws except for such non-compliance that would not constitute a
Material Adverse Effect or be materially adverse to the interests of the
Lenders.
4.19 Security Interests. Upon the execution and delivery
of the Security Agreement, the Security Agreement will create a valid first
priority security interest in the Collateral described therein securing the
Obligations (subject only to Permitted Encumbrances, Permitted Rights of Others
and other matters permitted by Section 6.9 and to such qualifications and
exceptions as are contained in the Uniform Commercial Code with respect to the
priority of security interests perfected by means other than the filing of a
financing statement or with respect to the creation of security interests in
Property to which Division 9 of the Uniform Commercial Code does not apply) and
all actions necessary to perfect (except with respect to motor vehicles) the
security interests so created, other than filing of the UCC-1 financing
statements delivered to the Administrative Agent pursuant to Section 8.1 with
the appropriate Governmental Agency, have been taken and completed.
Article 5
AFFIRMATIVE COVENANTS
(OTHER THAN INFORMATION AND
REPORTING REQUIREMENTS)
So long as any Advance remains unpaid, or any other Obligation
remains unpaid, or any portion of the Commitment remains in force, Borrower
shall, and shall cause its Subsidiaries to, unless the Administrative Agent
(with the written approval of the Requisite Lenders) otherwise consents:
5.1 Payment of Taxes and Other Potential Liens. Pay and
discharge promptly all taxes, assessments and governmental charges or levies
imposed upon any of them, upon their respective Property or any part thereof
and upon their respective income or profits or any part thereof, except that
Borrower and its Subsidiaries shall not be required to pay or cause to be paid
(a) any tax, assessment, charge or levy that is not yet past due, or is being
contested in good faith by appropriate proceedings so long as the relevant
entity has established and maintains adequate reserves for the payment of the
same or (b) any immaterial tax so long as no material Property of Borrower or
its Subsidiaries is at impending risk of being seized, levied upon or
forfeited.
5.2 Preservation of Existence. Preserve and maintain
their respective existences in the jurisdiction of their formation and all
material authorizations, rights, franchises, privileges, consents, approvals,
orders, licenses, permits, or registrations from any Governmental Agency that
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are necessary for the transaction of their respective business and qualify and
remain qualified to transact business in each jurisdiction in which such
qualification is necessary in view of their respective business or the
ownership or leasing of their respective Properties except (a) a merger
permitted by Section 6.3 or as otherwise permitted by this Agreement and (b)
where the failure to so qualify or remain qualified would not constitute a
Material Adverse Effect.
5.3 Maintenance of Properties. Maintain, preserve and
protect all of their respective Properties in good order and condition, subject
to wear and tear in the ordinary course of business, and not permit any waste
of their respective Properties, except that the failure to maintain, preserve
and protect a particular item of Property that is at the end of its useful life
or that is not of significant value, either intrinsically or to the operations
of Borrower, shall not constitute a violation of this covenant.
5.4 Maintenance of Insurance. Maintain liability,
casualty and other insurance (subject to customary deductibles and retentions)
with responsible insurance companies in such amounts and against such risks as
is carried by responsible companies engaged in similar businesses and owning
similar assets in the general areas in which Borrower and its Subsidiaries
operate.
5.5 Compliance With Laws. Comply with all Requirements
of Law noncompliance with which constitutes a Material Adverse Effect, except
that Borrower and its Subsidiaries need not comply with a Requirement of Law
then being contested by any of them in good faith by appropriate proceedings.
5.6 Inspection Rights. Upon reasonable notice, at any
time during regular business hours and as often as reasonably requested (but
not so as to materially interfere with the business of Borrower or any of its
Subsidiaries) permit the Administrative Agent or any Lender, or any authorized
employee, agent or representative thereof, to examine, audit and make copies
and abstracts from the records and books of account of, and to visit and
inspect the Properties of, Borrower and its Subsidiaries and to discuss the
affairs, finances and accounts of Borrower and its Subsidiaries with any of
their officers, key employees or accountants.
5.7 Keeping of Records and Books of Account. Keep
adequate records and books of account reflecting all financial transactions in
conformity with GAAP, consistently applied, and in material conformity with all
applicable requirements of any Governmental Agency having regulatory
jurisdiction over Borrower and its Subsidiaries.
5.8 Compliance With Agreements. Promptly and fully
comply with all Contractual Obligations to which any one or more of them is a
party, except for any such Contractual Obligations (a) the performance of which
would cause a Default or (b) then being contested by any of them in good faith
by appropriate proceedings or (c) if the failure to comply does not constitute
a Material Adverse Effect.
5.9 Use of Proceeds. Use the proceeds of all Loans for
working capital and general corporate purposes of Borrower, including repayment
of the Prior Credit Agreement and funding of Acquisitions permitted by Section
6.5.
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5.10 Hazardous Materials Laws. Keep and maintain all Real
Property and each portion thereof in compliance in all material respects with
all applicable Hazardous Materials Laws and promptly notify the Administrative
Agent in writing (attaching a copy of any pertinent written material) of (a)
any and all material enforcement, cleanup, removal or other governmental or
regulatory actions instituted, completed or threatened in writing by a
Governmental Agency pursuant to any applicable Hazardous Materials Laws, (b)
any and all material claims made or threatened in writing by any Person against
Borrower relating to damage, contribution, cost recovery, compensation, loss or
injury resulting from any Hazardous Materials and (c) discovery by any Senior
Officer of any of Borrower of any material occurrence or condition on any real
Property adjoining or in the vicinity of such Real Property that could
reasonably be expected to cause such Real Property or any part thereof to be
subject to any restrictions on the ownership, occupancy, transferability or use
of such Real Property under any applicable Hazardous Materials Laws.
5.11 Future Subsidiaries. Pledge all of the capital stock
of any Subsidiary (other than an Inactive Subsidiary) formed or acquired after
the Closing Date pursuant to a pledge agreement in form and substance
acceptable to the Administrative Agent, and cause each such Subsidiary (other
than an Inactive Subsidiary) to execute and deliver (a) an appropriate joinder
to the Security Agreement and (b) a guaranty of the Obligations in form and
substance acceptable to the Administrative Agent.
5.12 Future Real Property. Promptly following its
acquisition of any fee simple real property, execute and deliver to the
Administrative Agent a deed of trust or mortgage in form and substance
acceptable to the Administrative Agent creating a first priority Lien on such
real property securing the Obligations, and provide to the Administrative Agent
such customary lender's title insurance policies, appraisals, environmental
reports and other related documents as the Administrative Agent may reasonably
request.
5.13 Future Approved Acquisitions. Provide to the
Administrative Agent, with respect to an Acquisition which Borrower wishes to
qualify as an Approved Acquisition (a) a copy of the stock purchase agreement
and/or asset purchase agreement between Borrower and the Approved Acquisition
Target, which agreement shall in form and substance be subject to the approval,
not to be unreasonably withheld, of the Requisite Lenders, (b) with respect to
each such Acquisition where the aggregate consideration paid and payable by
Borrower in respect of such Acquisition and in respect of all transactions
related to such Acquisition is $6,000,000 or greater, a copy of the audited
financial statements of the related Acquisition Target covering a fiscal period
of at least (1) year, which financial statement shall be subject to the
approval, not to be unreasonably withheld, of the Requisite Lenders and (c)
with respect to each such acquisition where the aggregate consideration is less
than the amount set forth in clause (b), a copy of the unaudited financial
statements of the related Acquisition Target covering a fiscal period of at
least one (1) year together with a written statement of KPMG Peat Marwick LLP
(or other independent public accountants of recognized standing selected by
Borrower and reasonably satisfactory to the Requisite Lenders) to the effect
that such firm has performed specified agreed procedures with respect thereto
(but not constituting an audit thereof) reasonably acceptable to Borrower and
the Requisite Lenders, which financial statements shall be subject to the
approval, not to be unreasonably withheld, of the Requisite Lenders.
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5.14 Year 2000 Compliance. Take such steps as are
reasonably necessary to assure that, prior to November 1, 1999, (a) Borrower
and its Subsidiaries are Year 2000 Compliant and (b) all customers and vendors
of Borrower and its Subsidiaries that are material to the business of Borrower
and whose ability to perform their business obligations to Borrower may be
materially affected by their not being Year 2000 Compliant are Year 2000
Compliant. Such steps shall include the performance of a comprehensive review
and assessment of all data storage and operating systems and the adoption of a
detailed plan and budget for the remediation, monitoring and testing of such
systems. The term "Year 2000 Compliant" means, for purposes of the foregoing,
that all hardware, software, firmware, equipment, goods and systems used by a
Person, or which are material to the business operations or financial condition
of a Person, will properly perform date-sensitive functions on and after
January 1, 2000.
5.15 Subordinated Debt Issuance. Issue and sell, not
later than August 15, 1998, for not less than $15,000,000 a debt security of
Borrower that constitutes a Subordinated Obligation.
5.16 Syndication Process. Cooperate in such respects as
may be requested by the Arranger in connection with the syndication of the
credit facilities under this Agreement, including the provision of information
(in form and substance acceptable to the Arranger) for inclusion in written
materials furnished to prospective syndicate members and the participation by
Senior Officers in meetings with prospective syndicate members. Nothing in
Section 5.16 shall obligate Borrower to amend any Loan Document.
Article 6
NEGATIVE COVENANTS
So long as any Advance remains unpaid, or any other Obligation
remains unpaid, or any portion of the Commitment remains in force, Borrower
shall not, and shall not permit any of its Subsidiaries to, unless the
Administrative Agent (with the written approval of the Requisite Lenders or, if
required by Section 11.2, of all of the Lenders) otherwise consents:
6.1 Payment of Subordinated Obligations. Pay any (a)
principal (including sinking fund payments) or any other amount (other than
scheduled interest payments) with respect to any Subordinated Obligation, or
purchase or redeem (or offer to purchase or redeem) any Subordinated
Obligation, or deposit any monies, securities or other Property with any
trustee or other Person to provide assurance that the principal or any portion
thereof of any Subordinated Obligation will be paid when due or otherwise to
provide for the defeasance of any Subordinated Obligation or (b) scheduled
interest on any Subordinated Obligation unless the payment thereof is then
permitted pursuant to the terms of the indenture or other agreement governing
such Subordinated Obligation; provided that payments of principal and interest
may be made under any Seller Subordinated Notes so long as no Event of Default
then exists or would result therefrom.
6.2 Disposition of Property. Make any Disposition of its
Property, whether now owned or hereafter acquired, (a) except a Disposition by
Borrower to a Wholly-Owned Subsidiary, or by a Subsidiary to Borrower or a
Wholly- Owned Subsidiary and (b) a Disposition for which the
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Net Cash Sales Proceeds, when added to the aggregate Net Cash Sales Proceeds of
all Dispositions made after the Closing Date, does not exceed $500,000.
6.3 Mergers. Merge or consolidate with or into any
Person, except (a) mergers and consolidations of a Subsidiary of Borrower into
Borrower or a Wholly-Owned Subsidiary or of Subsidiaries with each other and
(b) a merger or consolidation of a Person into Borrower or with or into a
Wholly-Owned Subsidiary of Borrower which constitutes an Acquisition permitted
by Section 6.5; provided that (i) Borrower or a Wholly-Owned Subsidiary is the
surviving entity, (ii) no Change in Control results therefrom, (iii) no Default
or Event of Default then exists or would result therefrom and (iv) Borrower and
each of its Subsidiaries execute such amendments to the Loan Documents as the
Administrative Agent may reasonably determine are appropriate as a result of
such merger.
6.4 Hostile Acquisitions. Directly or indirectly use the
proceeds of any Loan in connection with the acquisition of part or all of a
voting interest of five percent (5%) or more in any corporation or other
business entity if such acquisition is opposed by the board of directors of
such corporation or business entity.
6.5 Acquisitions. Make any Acquisition, except (a) the
Approved Acquisitions and (b) any Acquisition of a Person engaged in the same
line of business as Borrower if the aggregate consideration paid and payable by
Borrower in respect of such Acquisition and in respect of all transactions
related to such Acquisition does not (i) exceed $2,500,000 or (ii) when
aggregated with all other Acquisitions permitted by this clause (b) during that
Fiscal Year, exceed $5,000,000.
6.6 Distributions. Make any Distribution, whether from
capital, income or otherwise, and whether in Cash or other Property, except:
(a) Distributions by any Subsidiary of Borrower
to Borrower or any Wholly-Owned Subsidiary;
(b) dividends payable solely in Common Stock or
rights to purchase Common Stock; and
(c) repurchases or redemptions of Common Stock
owned by sellers of a business which was previously the subject of an
Acquisition in accordance with terms binding on Borrower and such
sellers at the time of such Acquisition.
6.7 ERISA. At any time, permit any Pension Plan
to: (i) engage in any non-exempt "prohibited transaction" (as defined in
Section 4975 of the Code); (ii) fail to comply with ERISA or any other
applicable Laws; (iii) incur any material "accumulated funding deficiency" (as
defined in Section 302 of ERISA); or (iv) terminate in any manner, which, with
respect to each event listed above, could reasonably be expected to result in a
Material Adverse Effect or (b) withdraw, completely or partially, from any
Multiemployer Plan if to do so could reasonably be expected to result in a
Material Adverse Effect.
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6.8 Change in Nature of Business. Make any material
change in the nature of the business of Borrower and its Subsidiaries, taken as
a whole.
6.9 Liens and Negative Pledges. Create, incur, assume or
suffer to exist any Lien or Negative Pledge of any nature upon or with respect
to any of their respective Properties, or engage in any sale and leaseback
transaction with respect to any of their respective Properties, whether now
owned or hereafter acquired, except:
(a) Liens and Negative Pledges existing on the
Closing Date and disclosed in Schedule 4.7 and any renewals/extensions
or amendments thereof, provided that the obligations secured or
benefited thereby are not increased;
(b) Liens and Negative Pledges under the Loan
Documents;
(c) Permitted Encumbrances;
(d) Liens on Property acquired by Borrower or any
of its Subsidiaries that were in existence at the time of the
acquisition of such Property and were not created in contemplation of
such acquisition;
(e) Liens securing Indebtedness permitted by
Section 6.10(d) on and limited to the capital assets acquired,
constructed or financed with the proceeds of such Indebtedness or with
the proceeds of any Indebtedness directly or indirectly refinanced by
such Indebtedness;
(f) Liens securing Indebtedness permitted by
Section 6.10(e) on or limited to the assets that are the subject of an
Acquisition therein described; and
(g) Liens granted in favor of a landlord to
secure obligations of Borrower under a lease, provided that (i) the
Lien attaches only to Property of Borrower located in the premises
covered by the lease and (ii) with respect to any such Lien on
Property having a fair market value of $4,000 or more, the landlord
has executed and delivered a landlord waiver (in form and substance
reasonably acceptable to the Administrative Agent) in favor of the
Administrative Agent subordinating such Lien to the Lien of the
Collateral Documents and permitting the Administrative Agent to have
reasonable access thereto during an Event of Default.
6.10 Indebtedness and Guaranty Obligations. Create, incur
or assume any Indebtedness or Guaranty Obligation except:
(a) Indebtedness and Guaranty Obligations
existing on the Closing Date and disclosed in Schedule 6.10, and
refinancings, renewals, extensions or amendments that do not increase
the amount thereof;
(b) Indebtedness and Guaranty Obligations under
the Loan Documents;
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(c) Indebtedness and Guaranty Obligations owed to
Borrower or any of its Subsidiaries;
(d) Indebtedness consisting of Capital Lease
Obligations, or otherwise incurred to finance the purchase or
construction of capital assets (which shall be deemed to exist if the
Indebtedness is incurred at or within 90 days before or after the
purchase or construction of the capital asset), or to refinance any
such Indebtedness, provided that the aggregate principal amount of
such Indebtedness incurred in any Fiscal Year does not exceed
$1,000,000;
(e) Indebtedness (other than Seller Subordinated
Notes) incurred in favor of the seller in an Acquisition permitted by
Section 6.5, provided that the aggregate principal amount of such
Indebtedness incurred in any Fiscal Year does not exceed $1,000,000;
(f) Seller Subordinated Notes issued in
connection with an Acquisition permitted by Section 6.5;
(g) Subordinated Obligations issued pursuant to
Section 5.15;
(h) Subordinated Obligations (other than Seller
Subordinated Notes and the Subordinated Obligations required by
Section 5.15) in such amount as may be approved in writing by the
Requisite Lenders;
(i) Indebtedness consisting of debt securities
for which the Net Cash Issuance Proceeds will be applied as a
mandatory prepayment pursuant to Section 3.1(e);
(j) Indebtedness consisting of Interest Rate
Protection Agreements; and
(k) Guaranty Obligations in support of the
obligations of a Wholly-Owned Subsidiary, provided that such
obligations are not prohibited by this Agreement.
6.11 Transactions with Affiliates. Enter into any
transaction of any kind with any Affiliate of Borrower other than (a) salary,
bonus, employee stock option and other compensation arrangements with directors
or officers in the ordinary course of business or with individuals in connection
with an Acquisition permitted by Section 6.5, (b) transactions that are fully
disclosed to the board of directors (or executive committee thereof) of Borrower
and expressly authorized by a resolution of the board of directors (or executive
committee) of Borrower which is approved by a majority of the directors (or
executive committee) not having an interest in the transaction, (c) transactions
between or among Borrower and its Subsidiaries and (d) transactions on overall
terms at least as favorable to Borrower or its Subsidiaries as would be the case
in an arm's-length transaction between unrelated parties of equal bargaining
power.
6.12 Current Ratio. Permit the Current Ratio, as of the
last day of any Fiscal Quarter, to be less than 1.15 to 1.00.
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6.13 Senior Funded Debt Ratio. Permit the Senior Funded
Debt Ratio, as of the last day of any Fiscal Quarter, to be greater than 2.50
to 1.00.
6.14 Total Funded Debt Ratio. Permit the Total Funded
Debt Ratio, as of the last day of any Fiscal Quarter, to be greater than the
ratio set forth below opposite the period during which such Fiscal Quarter
ends:
Period Ratio
------ -----
Closing Date through 3.50 to 1.00
December 31, 1999
January 1, 2000 3.00 to 1.00
and thereafter
6.15 Fixed Charge Coverage Ratio. Permit the Fixed Charge
Coverage Ratio, as of the last day of any Fiscal Quarter, to be less than 1.15
to 1.00.
6.16 Stockholders' Equity. Permit Stockholders' Equity,
as of the last day of any Fiscal Quarter, to be less than the sum of (a)
$27,500,000, plus (b) 90% of Net Income in the Fiscal Quarter ending June 30,
1998 and each Fiscal Quarter thereafter (with no deduction for a net loss in
any such Fiscal Quarter) plus (c) 75% of the proceeds of any issuance by
Borrower of equity securities (except to employees or former employees of
Borrower pursuant to an employee stock option plan maintained by Borrower)
subsequent to the Closing Date.
6.17 Investments. Make or suffer to exist any Investment,
other than:
(a) Investments in existence on the Closing Date
and disclosed on Schedule 6.17;
(b) Investments consisting of Cash Equivalents;
(c) Investments in a Person that is the subject
of an Acquisition permitted by Section 6.5;
(d) Investments consisting of advances to
officers, directors and employees of Borrower and its Subsidiaries for
travel, entertainment, relocation, anticipated bonus and analogous
ordinary business purposes;
(e) Investments of Borrower in any Wholly-Owned
Subsidiary and Investments of any such Subsidiary in another
Wholly-Owned Subsidiary;
(f) Investments consisting of the extension of
credit to customers or suppliers of Borrower and its Subsidiaries in
the ordinary course of business and any Investments received in
satisfaction or partial satisfaction thereof;
(g) Investments received in connection with the
settlement of a bona fide dispute with another Person;
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(h) Investments representing all or a portion of
the sales price of Property sold or services provided to another
Person; and
(i) Investments not described above not in excess
of $50,000 in any Fiscal Year.
6.18 Capital Expenditures. Make any Capital Expenditure
(a) during the Fiscal Year ending December 31, 1998, if to do so would result
in the aggregate of all Capital Expenditures made in such Fiscal Year to exceed
$15,000,000 and (b) during any Fiscal Year thereafter, if to do so would result
in the aggregate of all Capital Expenditures made in such Fiscal Year to exceed
$12,000,000.
6.19 Operating Leases. Incur any obligation to pay rent
under an operating lease in any Fiscal Year if to do so would result in the
aggregate obligation of Borrower and its Subsidiaries to pay rent under all
operating leases in that Fiscal Year to exceed $1,000,000.
6.20 Subsidiary Indebtedness. Permit (whether or not
otherwise permitted under Section 6.10) any Subsidiary to create, incur, assume
or suffer to exist any Indebtedness or Guaranty Obligation, except (a)
Indebtedness and Guaranty Obligations in existence on the Closing Date, (b) a
Guaranty Obligation required by Section 5.11, (c) Indebtedness owed to Borrower
or another Subsidiary of Borrower and (d) Capital Lease Obligations and
purchase money obligations of a Subsidiary in respect of Property used by that
Subsidiary.
6.21 Amendments to Subordinated Obligations. Amend or
modify any term or provision of any indenture, agreement or instrument
evidencing or governing any Subordinated Obligation in any respect that will or
may adversely affect the interests of the Lenders.
Article 7
INFORMATION AND REPORTING REQUIREMENTS
7.1 Financial and Business Information. So long as any
Advance remains unpaid, or any other Obligation remains unpaid, or any portion
of the Commitment remains in force, Borrower shall, unless the Administrative
Agent (with the written approval of the Requisite Lenders) otherwise consents,
at Borrower's sole expense, deliver to the Administrative Agent for
distribution by it to the Lenders, a sufficient number of copies for all of the
Lenders of the following:
(a) As soon as practicable, and in any event
within 45 days after the end of each Fiscal Quarter (other than the
fourth Fiscal Quarter in any Fiscal Year), the consolidated balance
sheet of Borrower and its Subsidiaries as at the end of such Fiscal
Quarter and the consolidated statements of operations and cash flows
for such Fiscal Quarter, and the portion of the Fiscal Year ended with
such Fiscal Quarter, all in reasonable detail. Such financial
statements shall be certified by the chief financial officer of
Borrower as fairly presenting the financial condition, results of
operations and cash flows of Borrower and its Subsidiaries in
accordance with GAAP (other than footnote disclosures), consistently
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applied, as at such date and for such periods, subject only to normal
year-end accruals and audit adjustments;
(b) As soon as practicable, and in any event
within 45 days after the end of each Fiscal Quarter, a Pricing
Certificate setting forth a calculation of the Senior Funded Debt
Ratio as of the last day of such Fiscal Quarter, and providing
reasonable detail as to the calculation thereof, which calculations in
the case of the fourth Fiscal Quarter in any Fiscal Year shall be
based on the preliminary unaudited financial statements of Borrower
and its Subsidiaries for such Fiscal Quarter, and as soon as
practicable thereafter, in the event of any material variance in the
actual calculation of the Senior Funded Debt Ratio from such
preliminary calculation, a revised Pricing Certificate setting forth
the actual calculation thereof;
(c) As soon as practicable, and in any event
within 90 days after the end of each Fiscal Year, the consolidated
balance sheet of Borrower and its Subsidiaries as at the end of such
Fiscal Year and the consolidated statements of operations,
stockholders' equity and cash flows, in each case of Borrower and its
Subsidiaries for such Fiscal Year, all in reasonable detail. Such
financial statements shall be prepared in accordance with GAAP,
consistently applied, and shall be accompanied by a report of KPMG
Peat Marwick LLP or other independent public accountants of recognized
standing selected by Borrower and reasonably satisfactory to the
Requisite Lenders, which report shall be prepared in accordance with
generally accepted auditing standards as at such date, and shall not
be subject to any qualifications or exceptions as to the scope of the
audit nor to any other qualification or exception determined by the
Requisite Lenders in their good faith business judgment to be adverse
to the interests of the Lenders. Such accountants' report shall be
accompanied by a certificate stating that, in making the examination
pursuant to generally accepted auditing standards necessary for the
certification of such financial statements and such report, such
accountants have obtained no knowledge of any Default then existing
or, if, in the opinion of such accountants, any such Default shall
exist, stating the nature and status of such Default, and stating that
such accountants have reviewed Borrower's financial calculations as at
the end of such Fiscal Year (which shall accompany such certificate)
under Sections 6.12 through 6.16, have read such Sections (including
the definitions of all defined terms used therein) and that nothing
has come to the attention of such accountants in the course of such
examination that would cause them to believe that the same were not
calculated by Borrower in the manner prescribed by this Agreement;
(d) As soon as practicable, and in any event not
later than sixty (60) days after the commencement of each Fiscal Year,
a budget and projection by Fiscal Quarter for that Fiscal Year and by
Fiscal Year for the next two succeeding Fiscal Years, including for
the first such Fiscal Year, projected consolidated balance sheets,
statements of operations and statements of cash flow and, for the
second and third such Fiscal Years, projected consolidated condensed
balance sheets and statements of operations and cash flows of Borrower
and its Subsidiaries, all in reasonable detail;
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(e) Promptly after request by the Administrative
Agent or any Lender, copies of any detailed audit reports, management
letters or recommendations submitted to the board of directors (or the
audit committee of the board of directors) of Borrower by independent
accountants in connection with the accounts or books of Borrower or
any of its Subsidiaries, or any audit of any of them;
(f) Promptly after the same are available, and in
any event within five (5) Banking Days after filing with the
Securities and Exchange Commission, copies of each annual report,
proxy or financial statement or other report or communication sent to
the stockholders of Borrower, and copies of all annual, regular,
periodic and special reports and registration statements which
Borrower may file or be required to file with the Securities and
Exchange Commission under Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, and not otherwise required to be
delivered to the Lenders pursuant to other provisions of this Section
7.1;
(g) Promptly after request by the Administrative
Agent or any Lender, copies of any other report or other document that
was filed by Borrower with any Governmental Agency;
(h) Promptly upon a Senior Officer becoming
aware, and in any event within five (5) Banking Days after becoming
aware, of the occurrence of any (i) "reportable event" (as such term
is defined in Section 4043 of ERISA, but excluding such events as to
which the PBGC has by regulation waived the requirement therein
contained that it be notified within thirty days of the occurrence of
such event) or (ii) non-exempt "prohibited transaction" (as such term
is defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Pension Plan or any trust created thereunder, telephonic
notice specifying the nature thereof, and, no more than two (2)
Banking Days after such telephonic notice, written notice again
specifying the nature thereof and specifying what action Borrower is
taking or proposes to take with respect thereto, and, when known, any
action taken by the Internal Revenue Service with respect thereto;
(i) As soon as practicable, and in any event
within two (2) Banking Days after a Senior Officer becomes aware of
the existence of any condition or event which constitutes a Default or
Event of Default, telephonic notice specifying the nature and period
of existence thereof, and, no more than two (2) Banking Days after
such telephonic notice, written notice again specifying the nature and
period of existence thereof and specifying what action Borrower is
taking or proposes to take with respect thereto;
(j) Promptly upon a Senior Officer becoming aware
that (i) any Person has commenced a legal proceeding with respect to a
claim against Borrower that is $100,000 or more in excess of the
amount thereof that is fully covered by insurance, (ii) any creditor
under a credit agreement involving Indebtedness of $1,000,000 or more
or any lessor under a lease involving aggregate rent of $1,000,000 or
more has asserted a default thereunder on the part of Borrower or,
(iii) any Person has commenced a legal proceeding with respect to a
claim against Borrower under a contract that is not a credit agreement
or material lease
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with respect to a claim of in excess of $100,000 or which otherwise
may reasonably be expected to result in a Material Adverse Effect, a
written notice describing the pertinent facts relating thereto and
what action Borrower is taking or proposes to take with respect
thereto; and
(k) Such other data and information as from time
to time may be reasonably requested by the Administrative Agent, any
Lender (through the Administrative Agent) or the Requisite Lenders.
7.2 Compliance Certificates. So long as any Advance
remains unpaid, or any other Obligation remains unpaid or unperformed, or any
portion of the Commitment remains outstanding, Borrower shall, at Borrower's
sole expense, deliver to the Administrative Agent for distribution by it to the
Lenders concurrently with the financial statements required pursuant to
Sections 7.1(a) and 7.1(c), a Compliance Certificate signed by a Senior
Officer.
Article 8
CONDITIONS
8.1 Initial Advances. The obligation of each Lender to
make the initial Advance to be made by it, and the obligation of the Issuing
Lender to issue the initial Letter of Credit, is subject to the following
conditions precedent, each of which shall be satisfied prior to the making of
the initial Advances (unless all of the Lenders, in their sole and absolute
discretion, shall agree otherwise):
(a) The Administrative Agent shall have received
all of the following, each of which shall be originals unless
otherwise specified, each properly executed by a Responsible Official
of each party thereto, each dated as of the Closing Date and each in
form and substance satisfactory to the Administrative Agent and its
legal counsel (unless otherwise specified or, in the case of the date
of any of the following, unless the Administrative Agent otherwise
agrees or directs):
(1) at least one (1) executed
counterpart of this Agreement, together with arrangements
satisfactory to the Administrative Agent for additional
executed counterparts, sufficient in number for distribution
to the Lenders and Borrower;
(2) Notes executed by Borrower in favor
of each Lender, each in a principal amount equal to that
Lender's Pro Rata Share of the Commitment;
(3) the Security Agreement executed by
Borrower;
(4) such financing statements on Form
UCC-1 executed by Borrower with respect to the Security
Agreement as the Administrative Agent may request;
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(5) with respect to Borrower, such
documentation as the Administrative Agent may reasonably
require to establish the due organization, valid existence and
good standing of Borrower, its qualification to engage in
business in each material jurisdiction in which it is engaged
in business or required to be so qualified, their authority to
execute, deliver and perform the Loan Documents to which it is
a Party, the identity, authority and capacity of each
Responsible Official thereof authorized to act on its behalf,
including certified copies of articles of incorporation and
amendments thereto, bylaws and amendments thereto,
certificates of good standing and/or qualification to engage
in business, tax clearance certificates, certificates of
corporate resolutions, incumbency certificates, Certificates
of Responsible Officials, and the like;
(6) the Opinion of Counsel;
(7) a true copy of each of the stock
purchase agreements and/or asset purchase agreements for the
Acquisition of the Approved Acquisition Targets that have been
executed and delivered as of the Closing Date, which
agreements shall be in form and substance acceptable to the
Administrative Agent;
(8) a true copy of the most recent
audited financial statements (if any) and unaudited financial
statements of each of the Approved Acquisition Targets for
which a stock purchase agreement and/or asset purchase
agreement has been provided pursuant to clause (7) above,
which financial statements shall be in form and substance
acceptable to the Administrative Agent;
(9) a true copy of each Material
Customer Contract;
(10) a certificate issued by the
insurance carrier (or representative) of Borrower reflecting
all insurance in effect for Borrower and its Property (which
shall be in form and substance acceptable to the
Administrative Agent) and showing the Administrative Agent, as
agent for the Lenders, as loss payee and additional named
insured to the extent requested by the Administrative Agent;
(11) a Compliance Certificate as of March
31, 1998;
(12) a Certificate of the chief financial
officer of Borrower certifying that the representation
contained in Section 4.17 is, to the best of his or her
knowledge, true and correct;
(13) a Certificate of the chief financial
officer of Borrower certifying that the conditions specified
in Sections 8.1(g) and 8.1(h) have been satisfied; and
(14) such other assurances, certificates,
documents, consents or opinions as the Administrative Agent or
the Requisite Lenders reasonably may require.
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(b) The arrangement fee payable pursuant to
Section 3.2 shall have been paid.
(c) Any agency fees payable on the Closing Date
pursuant to Section 3.4 shall have been paid.
(d) All Indebtedness outstanding under the Prior
Credit Agreement shall have been (or shall concurrently be) paid and
the same shall, together with all Liens securing such Indebtedness,
have been (or shall concurrently be) terminated.
(e) The Administrative Agent shall be reasonably
satisfied that, upon the filing of the financing statements described
in Section 8.1(a)(4) with the appropriate Governmental Agencies, the
Lenders will hold a first priority perfected Lien in the Collateral
subject only to Permitted Encumbrances.
(f) The reasonable costs and expenses of the
Administrative Agent in connection with the preparation of the Loan
Documents payable pursuant to Section 11.3, and invoiced to Borrower
prior to the Closing Date, shall have been paid.
(g) The representations and warranties of
Borrower contained in Article 4 shall be true and correct in all
material respects.
(h) Borrower and any other Parties shall be in
compliance with all the terms and provisions of the Loan Documents,
and giving effect to the initial Advance, no Default or Event of
Default shall have occurred and be continuing.
(i) All legal matters relating to the Loan
Documents shall be satisfactory to Sheppard, Mullin, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
LLP, special counsel to the Administrative Agent.
(j) The Closing Date shall have occurred on or
before June 12, 1998.
8.2 Any Advance. The obligation of each Lender to make
any Advance, and the obligation of the Issuing Lender to issue any Letter of
Credit, is subject to the following conditions precedent (unless the Requisite
Lenders or, in any case where the approval of all of the Lenders is required
pursuant to Section 11.2, all of the Lenders, in their sole and absolute
discretion, shall agree otherwise):
(a) except (i) for representations and warranties
which expressly speak as of a particular date or are no longer true
and correct as a result of a change which is permitted by this
Agreement or (ii) as disclosed by Borrower and approved in writing by
the Requisite Lenders, the representations and warranties contained in
Article 4 (other than Sections 4.4, 4.6 (first sentence), 4.10 and
4.17) shall be true and correct in all material respects on and as of
the date of the Advance as though made on that date;
(b) no circumstance or event shall have occurred
that constitutes a Material Adverse Effect since the Closing Date;
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(c) other than matters described in Schedule 4.10
or not required as of the Closing Date to be therein described, there
shall not be then pending or threatened any action, suit, proceeding
or investigation against or affecting Borrower or any of its
Subsidiaries or any Property of any of them before any Governmental
Agency that constitutes a Material Adverse Effect;
(d) the Administrative Agent shall have timely
received a Request for Loan (or telephonic or other request for Loan
referred to in the second sentence of Section 2.1(b), if applicable),
or a Request for Letter of Credit (as applicable), in compliance with
Article 2; and
(e) the Administrative Agent shall have received,
in form and substance satisfactory to the Administrative Agent, such
other assurances, certificates, documents or consents related to the
foregoing as the Administrative Agent or Requisite Lenders reasonably
may require.
Article 9
EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT
9.1 Events of Default. The existence or occurrence of
any one or more of the following events, whatever the reason therefor and under
any circumstances whatsoever, shall constitute an Event of Default:
(a) Borrower fails to pay any principal on any of
the Notes, or any portion thereof, on the date when due; or
(b) Borrower fails to pay any interest on any of
the Notes, or any fees under Sections 3.3, 3.4 or 3.5, or any portion
thereof, within two (2) Banking Days after the date when due; or fails
to pay any other fee or amount payable to the Lenders under any Loan
Document, or any portion thereof, within two (2) Banking Days after
demand therefor; or
(c) Borrower fails to comply with the covenant
contained in Section 5.15 or any of the covenants contained in Article
6; or
(d) Borrower fails to comply with Section 7.1(i)
in any respect that is materially adverse to the interests of the
Lenders; or
(e) Borrower or any other Party fails to perform
or observe any other covenant or agreement (not specified in clause
(a), (b), (c) or (d) above) contained in any Loan Document on its part
to be performed or observed within twenty (20) Banking Days after the
giving of notice by the Administrative Agent on behalf of the
Requisite Lenders of such Default or, if such Default is not
reasonably susceptible of cure within such period, within such longer
period as is reasonably necessary to effect a cure so long as such
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Borrower or such Party continues to diligently pursue cure of such
Default but not in any event in excess of forty (40) Banking Days; or
(f) Any representation or warranty of Borrower or
any other Party made in any Loan Document, or in any certificate or
other writing delivered by Borrower or such Party pursuant to any Loan
Document, proves to have been incorrect when made or reaffirmed in any
respect that is materially adverse to the interests of the Lenders; or
(g) Borrower (i) fails to pay the principal, or
any principal installment, of any present or future Indebtedness of
$5,000,000 or more, or any guaranty of present or future Indebtedness
of $5,000,000 or more, on its part to be paid, when due (or within any
stated grace period), whether at the stated maturity, upon
acceleration, by reason of required prepayment or otherwise or (ii)
fails to perform or observe any other term, covenant or agreement on
its part to be performed or observed, or suffers any event of default
to occur, in connection with any present or future Indebtedness of
$5,000,000 or more, or of any guaranty of present or future
Indebtedness of $5,000,000 or more, if as a result of such failure or
sufferance any holder or holders thereof (or an agent or trustee on
its or their behalf) has the right to declare such Indebtedness due
before the date on which it otherwise would become due or the right to
require Borrower to redeem or purchase, or offer to redeem or
purchase, all or any portion of such Indebtedness; or
(h) Any Loan Document, at any time after its
execution and delivery and for any reason other than the agreement or
action (or omission to act) of the Administrative Agent or the Lenders
or satisfaction in full of all the Obligations, ceases to be in full
force and effect or is declared by a court of competent jurisdiction
to be null and void, invalid or unenforceable in any respect which is
materially adverse to the interests of the Lenders; or any Collateral
Document ceases (other than by action or inaction of the
Administrative Agent or any Lender) to create a valid and effective
Lien in any material portion of the Collateral; or any Party thereto
denies in writing that it has any or further liability or obligation
under any Loan Document, or purports to revoke, terminate or rescind
same; or
(i) A final judgment against Borrower is entered
for the payment of money in excess of $1,000,000 (not covered by
insurance or for which an insurer has reserved its rights) and, absent
procurement of a stay of execution, such judgment remains unsatisfied
for thirty (30) calendar days after the date of entry of judgment, or
in any event later than five (5) days prior to the date of any
proposed sale thereunder; or any writ or warrant of attachment or
execution or similar process is issued or levied against all or any
material part of the Property of Borrower and is not released, vacated
or fully bonded within thirty (30) calendar days after its issue or
levy; or
(j) Borrower institutes or consents to the
institution of any proceeding under a Debtor Relief Law relating to it
or to all or any material part of its Property, or is unable or admits
in writing its inability to pay its debts as they mature, or makes an
assignment for the benefit of creditors; or applies for or consents to
the appointment of any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer for it or
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for all or any material part of its Property; or any receiver,
trustee, custodian, conservator, liquidator, rehabilitator or similar
officer is appointed without the application or consent of that Person
and the appointment continues undischarged or unstayed for sixty (60)
calendar days; or any proceeding under a Debtor Relief Law relating to
any such Person or to all or any part of its Property is instituted
without the consent of that Person and continues undismissed or
unstayed for sixty (60) calendar days; or
(k) The occurrence of an Event of Default (as
such term is or may hereafter be specifically defined in any other
Loan Document) under any other Loan Document; or
(l) Any holder of a Subordinated Obligation
asserts in writing that such Subordinated Obligation is not
subordinated to the Obligations in accordance with its terms and
Borrower does not promptly deny in writing such assertion and contest
any attempt by such holder to take action based on such assertion; or
(m) Any Pension Plan maintained by Borrower is
finally determined by the PBGC to have a material "accumulated funding
deficiency" as that term is defined in Section 302 of ERISA in excess
of an amount equal to 5% of the consolidated total assets of Borrower
as of the most-recently ended Fiscal Quarter; or
(n) Notice of early termination of a Material
Customer Contract given by a customer of Borrower or the failure of
the customer to renew or extend a Material Customer Contract upon
expiration thereof; or
(o) The Requisite Lenders determine in good faith
that a circumstance or event has occurred that constitutes a Material
Adverse Effect.
9.2 Remedies Upon Event of Default. Without limiting any
other rights or remedies of the Administrative Agent or the Lenders provided
for elsewhere in this Agreement, or the other Loan Documents, or by applicable
Law, or in equity, or otherwise:
(a) Upon the occurrence, and during the
continuance, of any Event of Default other than an Event of Default
described in Section 9.1(j):
(1) the Commitment to make Advances and
all other obligations of the Administrative Agent or the
Lenders and all rights of Borrower and any other Parties under
the Loan Documents shall be suspended without notice to or
demand upon Borrower, which are expressly waived by Borrower,
except that all of the Lenders or the Requisite Lenders (as
the case may be, in accordance with Section 11.2) may waive an
Event of Default or, without waiving, determine, upon terms
and conditions satisfactory to the Lenders or Requisite
Lenders, as the case may be, to reinstate the Commitment and
such other obligations and rights and make further Advances,
which waiver or determination shall apply equally to, and
shall be binding upon, all the Lenders;
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(2) the Issuing Lender may, with the
approval of the Administrative Agent on behalf of the
Requisite Lenders, demand immediate payment by Borrower of an
amount equal to the aggregate amount of all outstanding
Letters of Credit to be held by the Issuing Lender in an
interest- bearing cash collateral account as collateral
hereunder; and
(3) the Requisite Lenders may request
the Administrative Agent to, and the Administrative Agent
thereupon shall, terminate the Commitment and/or declare all
or any part of the unpaid principal of all Notes, all interest
accrued and unpaid thereon and all other amounts payable under
the Loan Documents to be forthwith due and payable, whereupon
the same shall become and be forthwith due and payable,
without protest, presentment, notice of dishonor, demand or
further notice of any kind, all of which are expressly waived
by Borrower.
(b) Upon the occurrence of any Event of Default
described in Section 9.1(j):
(1) the Commitment to make Advances and
all other obligations of the Administrative Agent or the
Lenders and all rights of Borrower and any other Parties under
the Loan Documents shall terminate without notice to or demand
upon Borrower, which are expressly waived by Borrower, except
that all of the Lenders may waive the Event of Default or,
without waiving, determine, upon terms and conditions
satisfactory to all the Lenders, to reinstate the Commitment
and such other obligations and rights and make further
Advances, which determination shall apply equally to, and
shall be binding upon, all the Lenders;
(2) an amount equal to the aggregate
amount of all outstanding Letters of Credit shall be
immediately due and payable to the Issuing Lender without
notice to or demand upon Borrower, which are expressly waived
by Borrower, to be held by the Issuing Lender in an
interest-bearing cash collateral account as collateral
hereunder; and
(3) the unpaid principal of all Notes,
all interest accrued and unpaid thereon and all other amounts
payable under the Loan Documents shall be forthwith due and
payable, without protest, presentment, notice of dishonor,
demand or further notice of any kind, all of which are
expressly waived by Borrower.
(c) Upon the occurrence of any Event of Default,
the Lenders and the Administrative Agent, or any of them, without
notice to (except as expressly provided for in any Loan Document) or
demand upon Borrower, which are expressly waived by Borrower (except
as to notices expressly provided for in any Loan Document), may
proceed (but only with the consent of the Requisite Lenders) to
protect, exercise and enforce their rights and remedies under the Loan
Documents against Borrower and any other Party and such other rights
and remedies as are provided by Law or equity.
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(d) The order and manner in which the Lenders'
rights and remedies are to be exercised shall be determined by the
Requisite Lenders in their sole discretion, and all payments received
by the Administrative Agent and the Lenders, or any of them, shall be
applied first to the costs and expenses (including reasonable
attorneys' fees and disbursements and the reasonably allocated costs
of attorneys employed by the Administrative Agent or by any Lender) of
the Administrative Agent and of the Lenders, and thereafter paid pro
rata to the Lenders in the same proportions that the aggregate
Obligations owed to each Lender under the Loan Documents bear to the
aggregate Obligations owed under the Loan Documents to all the
Lenders, without priority or preference among the Lenders. Regardless
of how each Lender may treat payments for the purpose of its own
accounting, for the purpose of computing Borrower' Obligations
hereunder and under the Notes, payments shall be applied first, to the
costs and expenses of the Administrative Agent and the Lenders, as set
forth above, second, to the payment of accrued and unpaid interest due
under any Loan Documents to and including the date of such application
(ratably, and without duplication, according to the accrued and unpaid
interest due under each of the Loan Documents), and third, to the
payment of all other amounts (including principal and fees) then owing
to the Administrative Agent or the Lenders under the Loan Documents.
No application of payments will cure any Event of Default, or prevent
acceleration, or continued acceleration, of amounts payable under the
Loan Documents, or prevent the exercise, or continued exercise, of
rights or remedies of the Lenders hereunder or thereunder or at Law or
in equity.
Article 10
THE ADMINISTRATIVE AGENT
10.1 Appointment and Authorization. Subject to Section
10.8, each Lender hereby irrevocably appoints and authorizes the Administrative
Agent to take such action as agent on its behalf and to exercise such powers
under the Loan Documents as are delegated to the Administrative Agent by the
terms thereof or are reasonably incidental, as determined by the Administrative
Agent, thereto. This appointment and authorization is intended solely for the
purpose of facilitating the servicing of the Loans and does not constitute
appointment of the Administrative Agent as trustee for any Lender or as
representative of any Lender for any other purpose and, except as specifically
set forth in the Loan Documents to the contrary, the Administrative Agent shall
take such action and exercise such powers only in an administrative and
ministerial capacity.
10.2 Administrative Agent and Affiliates. ▇▇▇▇▇ Fargo
Bank, National Association (and each successor Administrative Agent) has the
same rights and powers under the Loan Documents as any other Lender and may
exercise the same as though it were not the Administrative Agent, and the term
"Lender" or "Lenders" includes ▇▇▇▇▇ Fargo Bank, National Association in its
individual capacity. ▇▇▇▇▇ Fargo Bank, National Association (and each
successor Administrative Agent) and its Affiliates may accept deposits from,
lend money to and generally engage in any kind of banking, trust or other
business with Borrower, any Subsidiary thereof, or any Affiliate of Borrower or
any Subsidiary thereof, as if it were not the Administrative Agent and without
any duty to account therefor to the Lenders. ▇▇▇▇▇ Fargo Bank, National
Association (and
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each successor Administrative Agent) need not account to any other Lender for
any monies received by it for reimbursement of its costs and expenses as
Administrative Agent hereunder, or (subject to Section 11.10) for any monies
received by it in its capacity as a Lender hereunder. The Administrative Agent
shall not be deemed to hold a fiduciary relationship with any Lender and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or otherwise exist against the
Administrative Agent.
10.3 Proportionate Interest in any Collateral. The
Administrative Agent, on behalf of all the Lenders, shall hold in accordance
with the Loan Documents all items of any collateral or interests therein
received or held by the Administrative Agent. Subject to the Administrative
Agent's and the Lenders' rights to reimbursement for their costs and expenses
hereunder (including reasonable attorneys' fees and disbursements and other
professional services and the reasonably allocated costs of attorneys employed
by the Administrative Agent or a Lender) and subject to the application of
payments in accordance with Section 9.2(d), each Lender shall have an interest
in the Lenders' interest in such collateral or interests therein in the same
proportions that the aggregate Obligations owed such Lender under the Loan
Documents bear to the aggregate Obligations owed under the Loan Documents to
all the Lenders, without priority or preference among the Lenders.
10.4 Lenders' Credit Decisions. Each Lender agrees that
it has, independently and without reliance upon the Administrative Agent, any
other Lender or the directors, officers, agents, employees or attorneys of the
Administrative Agent or of any other Lender, and instead in reliance upon
information supplied to it by or on behalf of Borrower and upon such other
information as it has deemed appropriate, made its own independent credit
analysis and decision to enter into this Agreement. Each Lender also agrees
that it shall, independently and without reliance upon the Administrative
Agent, any other Lender or the directors, officers, agents, employees or
attorneys of the Administrative Agent or of any other Lender, continue to make
its own independent credit analyses and decisions in acting or not acting under
the Loan Documents.
10.5 Action by Administrative Agent.
(a) Absent actual knowledge of the Administrative
Agent of the existence of a Default, the Administrative Agent may
assume that no Default has occurred and is continuing, unless the
Administrative Agent (or the Lender that is then the Administrative
Agent) has received notice from Borrower stating the nature of the
Default or has received notice from a Lender stating the nature of the
Default and that such Lender considers the Default to have occurred
and to be continuing.
(b) The Administrative Agent has only those
obligations under the Loan Documents as are expressly set forth
therein.
(c) Except for any obligation expressly set forth
in the Loan Documents and as long as the Administrative Agent may
assume that no Event of Default has occurred and is continuing, the
Administrative Agent may, but shall not be required to, exercise its
discretion to act or not act, except that the Administrative Agent
shall be required to act or
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not act upon the instructions of the Requisite Lenders (or of all the
Lenders, to the extent required by Section 11.2) and those
instructions shall be binding upon the Administrative Agent and all
the Lenders, provided that the Administrative Agent shall not be
required to act or not act if to do so would be contrary to any Loan
Document or to applicable Law or would result, in the reasonable
judgment of the Administrative Agent, in substantial risk of liability
to the Administrative Agent.
(d) If the Administrative Agent has received a
notice specified in clause (a), the Administrative Agent shall
immediately give notice thereof to the Lenders and shall act or not
act upon the instructions of the Requisite Lenders (or of all the
Lenders, to the extent required by Section 11.2), provided that the
Administrative Agent shall not be required to act or not act if to do
so would be contrary to any Loan Document or to applicable Law or
would result, in the reasonable judgment of the Administrative Agent,
in substantial risk of liability to the Administrative Agent, and
except that if the Requisite Lenders (or all the Lenders, if required
under Section 11.2) fail, for five (5) Banking Days after the receipt
of notice from the Administrative Agent, to instruct the
Administrative Agent, then the Administrative Agent, in its sole
discretion, may act or not act as it deems advisable for the
protection of the interests of the Lenders.
(e) The Administrative Agent shall have no
liability to any Lender for acting, or not acting, as instructed by
the Requisite Lenders (or all the Lenders, if required under Section
11.2), notwithstanding any other provision hereof.
10.6 Liability of Administrative Agent. Neither the
Administrative Agent nor any of its directors, officers, agents, employees or
attorneys shall be liable for any action taken or not taken by them under or in
connection with the Loan Documents, except for their own gross negligence or
willful misconduct. Without limitation on the foregoing, the Administrative
Agent and its directors, officers, agents, employees and attorneys:
(a) May treat the payee of any Note as the holder
thereof until the Administrative Agent receives notice of the
assignment or transfer thereof, in form satisfactory to the
Administrative Agent, signed by the payee, and may treat each Lender
as the owner of that Lender's interest in the Obligations for all
purposes of this Agreement until the Administrative Agent receives
notice of the assignment or transfer thereof, in form satisfactory to
the Administrative Agent, signed by that Lender;
(b) May consult with legal counsel (including
in-house legal counsel), accountants (including in-house accountants)
and other professionals or experts selected by it, or with legal
counsel, accountants or other professionals or experts for Borrower
and/or their Subsidiaries or the Lenders, and shall not be liable for
any action taken or not taken by it in good faith in accordance with
any advice of such legal counsel, accountants or other professionals
or experts;
(c) Shall not be responsible to any Lender for
any statement, warranty or representation made in any of the Loan
Documents or in any notice, certificate, report,
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request or other statement (written or oral) given or made in connection with
any of the Loan Documents;
(d) Except to the extent expressly set forth in
the Loan Documents, shall have no duty to ask or inquire as to the
performance or observance by Borrower or its Subsidiaries of any of
the terms, conditions or covenants of any of the Loan Documents or to
inspect any collateral or any Property, books or records of Borrower
or their Subsidiaries;
(e) Will not be responsible to any Lender for the
due execution, legality, validity, enforceability, genuineness,
effectiveness, sufficiency or value of any Loan Document, any other
instrument or writing furnished pursuant thereto or in connection
therewith, or any collateral;
(f) Will not incur any liability by acting or not
acting in reliance upon any Loan Document, notice, consent,
certificate, statement, request or other instrument or writing
believed in good faith by it to be genuine and signed or sent by the
proper party or parties; and
(g) Will not incur any liability for any
arithmetical error in computing any amount paid or payable by Borrower
or any Subsidiary or Affiliate thereof or paid or payable to or
received or receivable from any Lender under any Loan Document,
including, without limitation, principal, interest, commitment fees,
Advances and other amounts; provided that, promptly upon discovery of
such an error in computation, the Administrative Agent, the Lenders
and (to the extent applicable) Borrower and/or its Subsidiaries or
Affiliates shall make such adjustments as are necessary to correct
such error and to restore the parties to the position that they would
have occupied had the error not occurred.
10.7 Indemnification. Each Lender shall, ratably in
accordance with its Pro Rata Share of the Commitment (if the Commitment is then
in effect) or in accordance with its proportion of the aggregate Indebtedness
then evidenced by the Notes (if the Commitment has then been terminated),
indemnify and hold the Administrative Agent and its directors, officers,
agents, employees and attorneys harmless against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever (including
reasonable attorneys' fees and disbursements and allocated costs of attorneys
employed by the Administrative Agent) that may be imposed on, incurred by or
asserted against it or them in any way relating to or arising out of the Loan
Documents (other than losses incurred by reason of the failure of Borrower to
pay the Indebtedness represented by the Notes) or any action taken or not taken
by it as Administrative Agent thereunder, except such as result from its own
gross negligence or willful misconduct. Without limitation on the foregoing,
each Lender shall reimburse the Administrative Agent upon demand for that
Lender's Pro Rata Share of any out-of-pocket cost or expense incurred by the
Administrative Agent in connection with the negotiation, preparation,
execution, delivery, amendment, waiver, restructuring, reorganization
(including a bankruptcy reorganization), enforcement or attempted enforcement
of the Loan Documents, to the extent that Borrower or any other Party is
required by Section 11.3 to pay that cost or expense but fails to do so upon
demand. Nothing in this Section 10.7 shall entitle the Administrative Agent or
any
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indemnitee referred to above to recover any amount from the Lenders if and to
the extent that such amount has theretofore been recovered from Borrower or any
of its Subsidiaries. To the extent that the Administrative Agent or any
indemnitee referred to above is later reimbursed such amount by Borrower or any
of its Subsidiaries, it shall return the amounts paid to it by the Lenders in
respect of such amount.
10.8 Successor Administrative Agent. The Administrative
Agent may, and at the request of the Requisite Lenders shall, resign as
Administrative Agent upon reasonable notice to the Lenders and Borrower
effective upon acceptance of appointment by a successor Administrative Agent.
If the Administrative Agent shall resign as Administrative Agent under this
Agreement, the Requisite Lenders shall appoint from among the Lenders a
successor Administrative Agent for the Lenders, which successor Administrative
Agent shall be approved by Borrower (and such approval shall not be
unreasonably withheld or delayed). If no successor Administrative Agent is
appointed prior to the effective date of the resignation of the Administrative
Agent, the Administrative Agent may appoint, after consulting with the Lenders
and Borrower, a successor Administrative Agent from among the Lenders. Upon
the acceptance of its appointment as successor Administrative Agent hereunder,
such successor Administrative Agent shall succeed to all the rights, powers and
duties of the retiring Administrative Agent and the term "Administrative Agent"
shall mean such successor Administrative Agent and the retiring Administrative
Agent's appointment, powers and duties as Administrative Agent shall be
terminated. After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Article 10, and Sections 11.3,
11.11 and 11.22, shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Administrative Agent under this Agreement.
Notwithstanding the foregoing, if (a) the Administrative Agent has not been
paid its agency fees under Section 3.4 or has not been reimbursed for any
expense reimbursable to it under Section 11.3, in either case for a period of
at least one (1) year and (b) no successor Administrative Agent has accepted
appointment as Administrative Agent by the date which is thirty (30) days
following a retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become
effective and the Lenders shall perform all of the duties of the Administrative
Agent hereunder until such time, if any, as the Requisite Lenders appoint a
successor Administrative Agent as provided for above.
10.9 No Obligations of Borrower. Nothing contained in
this Article 10 shall be deemed to impose upon Borrower any obligation in
respect of the due and punctual performance by the Administrative Agent of its
obligations to the Lenders under any provision of this Agreement, and Borrower
shall have no liability to the Administrative Agent or any of the Lenders in
respect of any failure by the Administrative Agent or any Lender to perform any
of its obligations to the Administrative Agent or the Lenders under this
Agreement. Without limiting the generality of the foregoing, where any
provision of this Agreement relating to the payment of any amounts due and
owing under the Loan Documents provides that such payments shall be made by
Borrower to the Administrative Agent for the account of the Lenders, Borrower's
obligations to the Lenders in respect of such payments shall be deemed to be
satisfied upon the making of such payments to the Administrative Agent in the
manner provided by this Agreement. In addition, Borrower may rely on a written
statement by the Administrative Agent to the effect that it has obtained the
written consent of the Requisite Lenders or all of the Lenders, as applicable
under Section 11.2, in
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connection with a waiver, amendment, consent, approval or other action by the
Lenders hereunder, and shall have no obligation to verify or confirm the same.
Article 11
MISCELLANEOUS
11.1 Cumulative Remedies; No Waiver. The rights, powers,
privileges and remedies of the Administrative Agent and the Lenders provided
herein or in any Note or other Loan Document are cumulative and not exclusive
of any right, power, privilege or remedy provided by Law or equity. No failure
or delay on the part of the Administrative Agent or any Lender in exercising
any right, power, privilege or remedy may be, or may be deemed to be, a waiver
thereof; nor may any single or partial exercise of any right, power, privilege
or remedy preclude any other or further exercise of the same or any other
right, power, privilege or remedy. The terms and conditions of Article 8
hereof are inserted for the sole benefit of the Administrative Agent and the
Lenders; the same may be waived in whole or in part, with or without terms or
conditions, in respect of any Loan without prejudicing the Administrative
Agent's or the Lenders' rights to assert them in whole or in part in respect of
any other Loan.
11.2 Amendments; Consents. No amendment, modification,
supplement, extension, termination or waiver of any provision of this Agreement
or any other Loan Document, no approval or consent thereunder, and no consent
to any departure by Borrower or any other Party therefrom, may in any event be
effective unless in writing signed by the Administrative Agent with the written
approval of the Requisite Lenders (and, in the case of any amendment,
modification or supplement of or to any Loan Document to which Borrower is a
Party, signed by Borrower, and, in the case of any amendment, modification or
supplement to Article 10, signed by the Administrative Agent), and then only in
the specific instance and for the specific purpose given; and, without the
approval in writing of all the Lenders, no amendment, modification, supplement,
termination, waiver or consent may be effective:
(a) To amend or modify the principal of, or the
amount of principal, principal prepayments or the rate of interest
payable on, any Note, or the amount of the Commitment or the Pro Rata
Share of any Lender or the amount of any commitment fee payable to any
Lender, or any other fee or amount payable to any Lender under the
Loan Documents or to waive an Event of Default consisting of the
failure of Borrower to pay when due principal, interest or any fee;
(b) To postpone any date fixed for any payment of
principal of, prepayment of principal of or any installment of
interest on, any Note or any installment of any fee, or to extend the
term of the Commitment;
(c) To amend the provisions of the definition of
"Requisite Lenders", "Reduction Date", "Reduction Amount" or "Maturity
Date"; or
(d) To release any material Collateral from the
Lien of the Collateral Documents; or
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(e) To amend or waive Article 8 or this Section
11.2; or
(f) To amend any provision of this Agreement that
expressly requires the consent or approval of all the Lenders.
Any amendment, modification, supplement, termination, waiver or consent
pursuant to this Section 11.2 shall apply equally to, and shall be binding
upon, all the Lenders and the Administrative Agent.
11.3 Costs, Expenses and Taxes. Borrower shall pay within
five (5) Banking Days after demand, accompanied by an invoice therefor, the
reasonable costs and expenses of the Administrative Agent in connection with
the negotiation, preparation, syndication, execution and delivery of the Loan
Documents and any amendment thereto or waiver thereof. Borrower shall also pay
on demand, accompanied by an invoice therefor, the reasonable costs and
expenses of the Administrative Agent and the Lenders in connection with the
refinancing, restructuring, reorganization (including a bankruptcy
reorganization) and enforcement or attempted enforcement of the Loan Documents,
and any matter related thereto. The foregoing costs and expenses shall include
filing fees, recording fees, title insurance fees, appraisal fees, search fees,
and other out-of-pocket expenses and the reasonable fees and out-of-pocket
expenses of any legal counsel (including reasonably allocated costs of legal
counsel employed by the Administrative Agent or any Lender), independent public
accountants and other outside experts retained by the Administrative Agent or
any Lender, whether or not such costs and expenses are incurred or suffered by
the Administrative Agent or any Lender in connection with or during the course
of any bankruptcy or insolvency proceedings of any of Borrower or any
Subsidiary thereof. Borrower shall pay any and all documentary and other
taxes, excluding (i) taxes imposed on or measured in whole or in part by a
Lender's overall net income imposed on it by (A) any jurisdiction (or political
subdivision thereof) in which it is organized or maintains its principal office
or Eurodollar Lending Office or (B) any jurisdiction (or political subdivision
thereof) in which it is "doing business" or (ii) any withholding taxes or other
taxes based on gross income imposed by the United States of America for any
period with respect to which it has failed to provide Borrower with the
appropriate form or forms required by Section 11.21, to the extent such forms
are then required by applicable Laws, and all costs, expenses, fees and charges
payable or determined to be payable in connection with the filing or recording
of this Agreement, any other Loan Document or any other instrument or writing
to be delivered hereunder or thereunder, or in connection with any transaction
pursuant hereto or thereto, and shall reimburse, hold harmless and indemnify on
the terms set forth in 11.11 the Administrative Agent and the Lenders from and
against any and all loss, liability or legal or other expense with respect to
or resulting from any delay in paying or failure to pay any such tax, cost,
expense, fee or charge or that any of them may suffer or incur by reason of the
failure of any Party to perform any of its Obligations. Any amount payable to
the Administrative Agent or any Lender under this Section 11.3 shall bear
interest from the fifth Banking Day following the date of demand for payment at
the Default Rate.
11.4 Nature of Lenders' Obligations. The obligations of
the Lenders hereunder are several and not joint or joint and several. Nothing
contained in this Agreement or any other Loan Document and no action taken by
the Administrative Agent or the Lenders or any of them pursuant
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hereto or thereto may, or may be deemed to, make the Lenders a partnership, an
association, a joint venture or other entity, either among themselves or with
the Borrower or any Affiliate of any of Borrower. A default by any Lender will
not increase the Pro Rata Share of the Commitment attributable to any other
Lender. Any Lender not in default may, if it desires, assume in such
proportion as the nondefaulting Lenders agree the obligations of any Lender in
default, but is not obligated to do so. The Administrative Agent agrees that
it will use its best efforts either to induce promptly the other Lenders to
assume the obligations of a Lender in default or to obtain promptly another
Lender, reasonably satisfactory to Borrower, to replace such a Lender in
default.
11.5 Survival of Representations and Warranties. All
representations and warranties contained herein or in any other Loan Document,
or in any certificate or other writing delivered by or on behalf of any one or
more of the Parties to any Loan Document, will survive the making of the Loans
hereunder and the execution and delivery of the Notes, and have been or will be
relied upon by the Administrative Agent and each Lender, notwithstanding any
investigation made by the Administrative Agent or any Lender or on their
behalf.
11.6 Notices. Except as otherwise expressly provided in
the Loan Documents, all notices, requests, demands, directions and other
communications provided for hereunder or under any other Loan Document must be
in writing and must be mailed, telegraphed, telecopied, dispatched by
commercial courier or delivered to the appropriate party at the address set
forth on the signature pages of this Agreement or other applicable Loan
Document or, as to any party to any Loan Document, at any other address as may
be designated by it in a written notice sent to all other parties to such Loan
Document in accordance with this Section. Except as otherwise expressly
provided in any Loan Document, if any notice, request, demand, direction or
other communication required or permitted by any Loan Document is given by mail
it will be effective on the earlier of receipt or the fourth Banking Day after
deposit in the United States mail with first class or airmail postage prepaid;
if given by telegraph or cable, when delivered to the telegraph company with
charges prepaid; if given by telecopier, when sent; if dispatched by commercial
courier, on the scheduled delivery date; or if given by personal delivery, when
delivered.
11.7 Execution of Loan Documents. Unless the
Administrative Agent otherwise specifies with respect to any Loan Document, (a)
this Agreement and any other Loan Document may be executed in any number of
counterparts and any party hereto or thereto may execute any counterpart, each
of which when executed and delivered will be deemed to be an original and all
of which counterparts of this Agreement or any other Loan Document, as the case
may be, when taken together will be deemed to be but one and the same
instrument and (b) execution of any such counterpart may be evidenced by a
telecopier transmission of the signature of such party. The execution of this
Agreement or any other Loan Document by any party hereto or thereto will not
become effective until counterparts hereof or thereof, as the case may be, have
been executed by all the parties hereto or thereto.
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11.8 Binding Effect; Assignment.
(a) This Agreement and the other Loan Documents
to which Borrower is a Party will be binding upon and inure to the
benefit of Borrower, the Administrative Agent, each of the Lenders,
and their respective successors and assigns, except that Borrower may
not assign its rights hereunder or thereunder or any interest herein
or therein without the prior written consent of all the Lenders. Each
Lender represents that it is not acquiring its Note with a view to the
distribution thereof within the meaning of the Securities Act of 1933,
as amended (subject to any requirement that disposition of such Note
must be within the control of such Lender). Any Lender may at any
time pledge its Note or any other instrument evidencing its rights as
a Lender under this Agreement to a Federal Reserve Bank, but no such
pledge shall release that Lender from its obligations hereunder or
grant to such Federal Reserve Bank the rights of a Lender hereunder
absent foreclosure of such pledge.
(b) From time to time following the Closing Date,
each Lender may assign to one or more Eligible Assignees all or any
portion of its Pro Rata Share of the Commitment; provided that (i)
such Eligible Assignee, if not then a Lender or an Affiliate of the
assigning Lender, shall be approved by the Administrative Agent and
(if no Event of Default then exists) Borrower (neither of which
approvals shall be unreasonably withheld or delayed), (ii) such
assignment shall be evidenced by a Commitment Assignment and
Acceptance, a copy of which shall be furnished to the Administrative
Agent as hereinbelow provided, (iii) except in the case of an
assignment to an Affiliate of the assigning Lender, to another Lender
or of the entire remaining Commitment of the assigning Lender, the
assignment shall not assign a Pro Rata Share of the Commitment that is
equivalent to less than $5,000,000 and (iv) the effective date of any
such assignment shall be as specified in the Commitment Assignment and
Acceptance, but not earlier than the date which is five (5) Banking
Days after the date the Administrative Agent has received the
Commitment Assignment and Acceptance. Upon the effective date of such
Commitment Assignment and Acceptance, the Eligible Assignee named
therein shall be a Lender for all purposes of this Agreement, with the
Pro Rata Share of the Commitment therein set forth and, to the extent
of such Pro Rata Share, the assigning Lender shall be released from
its further obligations under this Agreement. Borrower agrees that it
shall execute and deliver (against delivery by the assigning Lender to
Borrower of its Note) to such assignee Lender, Notes evidencing that
assignee Lender's Pro Rata Share of the Commitment, and to the
assigning Lender, Notes evidencing the remaining balance Pro Rata
Share retained by the assigning Lender.
(c) By executing and delivering a Commitment
Assignment and Acceptance, the Eligible Assignee thereunder
acknowledges and agrees that: (i) other than the representation and
warranty that it is the legal and beneficial owner of the Pro Rata
Share of the Commitment being assigned thereby free and clear of any
adverse claim, the assigning Lender has made 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 or sufficiency of this Agreement or any other Loan
Document; (ii) the assigning Lender has made no representation or
warranty and assumes no responsibility with respect to the financial
condition of Borrower or the performance by Borrower of the
Obligations; (iii) it has
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received a copy of this Agreement, together with copies of the most
recent financial statements delivered pursuant to Section 7.1 and such
other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into such Commitment
Assignment and Acceptance; (iv) it will, independently and without
reliance upon the Administrative Agent or any Lender and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking
action under this Agreement; (v) it appoints and authorizes the
Administrative Agent to take such action and to exercise such powers
under this Agreement as are delegated to the Administrative Agent by
this Agreement; and (vi) it will perform in accordance with their
terms all of the obligations which by the terms of this Agreement are
required to be performed by it as a Lender.
(d) The Administrative Agent shall maintain at
the Administrative Agent's Office a copy of each Commitment Assignment
and Acceptance delivered to it and a register (the "Register") of the
names and address of each of the Lenders and the Pro Rata Share of the
Commitment held by each Lender, giving effect to each Commitment
Assignment and Acceptance. The Register shall be available during
normal business hours for inspection by Borrower or any Lender upon
reasonable prior notice to the Administrative Agent. After receipt of
a completed Commitment Assignment and Acceptance executed by any
Lender and an Eligible Assignee, and receipt of an assignment fee of
$3,500 from such Lender or Eligible Assignee, the Administrative Agent
shall, promptly following the effective date thereof, provide to
Borrower and the Lenders a revised Schedule 1.1 giving effect thereto.
Borrower, the Administrative Agent and the Lenders shall deem and
treat the Persons listed as Lenders in the Register as the holders and
owners of the Pro Rata Share of the Commitment listed therein for all
purposes hereof, and no assignment or transfer of any such Pro Rata
Share of the Commitment shall be effective, in each case unless and
until a Commitment Assignment and Acceptance effecting the assignment
or transfer thereof shall have been accepted by the Administrative
Agent and recorded in the Register as provided above. Prior to such
recordation, all amounts owed with respect to the applicable Pro Rata
Share of the Commitment shall be owed to the Lender listed in the
Register as the owner thereof, and any request, authority or consent
of any Person who, at the time of making such request or giving such
authority or consent, is listed in the Register as a Lender shall be
conclusive and binding on any subsequent holder, assignee or
transferee of the corresponding Pro Rata Share of the Commitment.
(e) Each Lender may from time to time grant
participations to one or more banks or other financial institutions in
a portion of its Pro Rata Share of the Commitment; 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 financial institutions shall not be a
Lender hereunder for any purpose except, if the participation
agreement so provides, for the purposes of Sections 3.6, 3.7, 11.11
and 11.22 but only to the extent that the cost of such benefits to
Borrower does not exceed the cost which Borrower would have incurred
in respect of such Lender absent the participation, (iv) Borrower, the
Administrative Agent and the other Lenders shall continue to deal
solely and directly with
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such Lender in connection with such Lender's rights and obligations
under this Agreement, (v) the participation interest shall be
expressed as a percentage of the granting Lender's Pro Rata Share of
the Commitment as it then exists and shall not restrict an increase in
the Commitment, or in the granting Lender's Pro Rata Share of the
Commitment, so long as the amount of the participation interest is not
affected thereby and (vi) the consent of the holder of such
participation interest shall not be required for amendments or waivers
of provisions of the Loan Documents other than those which (A) extend
any Reduction Date, the Maturity Date or any other date upon which any
payment of money is due to the Lenders, (B) reduce the rate of
interest on the Notes, any fee or any other monetary amount payable to
the Lenders, (C) reduce the amount of any installment of principal due
under the Notes or (D) release any material Collateral from the Lien
of the Collateral Documents.
11.9 Right of Setoff. If an Event of Default has occurred
and is continuing, the Administrative Agent or any Lender (but in each case
only with the consent of the Requisite Lenders) may exercise its rights under
Article 9 of the Uniform Commercial Code and other applicable Laws and, to the
extent permitted by applicable Laws, apply any funds in any deposit account
maintained with it by Borrower and/or any Property of Borrower in its
possession against the Obligations.
11.10 Sharing of Setoffs. Each Lender severally agrees
that if it, through the exercise of any right of setoff, banker's lien or
counterclaim against Borrower, or otherwise, receives payment of the
Obligations held by it that is ratably more than any other Lender, through any
means, receives in payment of the Obligations held by that Lender, then,
subject to applicable Laws: (a) the Lender exercising the right of setoff,
banker's lien or counterclaim or otherwise receiving such payment shall
purchase, and shall be deemed to have simultaneously purchased, from each of
the other Lenders a participation in the Obligations held by the other Lenders
and shall pay to the other Lenders a purchase price in an amount so that the
share of the Obligations held by each Lender after the exercise of the right of
setoff, banker's lien or counterclaim or receipt of payment shall be in the
same proportion that existed prior to the exercise of the right of setoff,
banker's lien or counterclaim or receipt of payment; and (b) such other
adjustments and purchases of participations shall be made from time to time as
shall be equitable to ensure that all of the Lenders share any payment obtained
in respect of the Obligations ratably in accordance with each Lender's share of
the Obligations immediately prior to, and without taking into account, the
payment; provided that, if all or any portion of a disproportionate payment
obtained as a result of the exercise of the right of setoff, banker's lien,
counterclaim or otherwise is thereafter recovered from the purchasing Lender by
Borrower or any Person claiming through or succeeding to the rights of
Borrower, the purchase of a participation shall be rescinded and the purchase
price thereof shall be restored to the extent of the recovery, but without
interest. Each Lender that purchases a participation in the Obligations
pursuant to this Section 11.10 shall from and after the purchase have the right
to give all notices, requests, demands, directions and other communications
under this Agreement with respect to the portion of the Obligations purchased
to the same extent as though the purchasing Lender were the original owner of
the Obligations purchased. Borrower expressly consents to the foregoing
arrangements and agree that any Lender holding a participation in an Obligation
so purchased pursuant to this Section 11.10 may exercise any and all rights of
setoff, banker's lien or counterclaim
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with respect to the participation as fully as if the Lender were the original
owner of the Obligation purchased.
11.11 Indemnity by Borrower. Borrower agrees to indemnify,
save and hold harmless the Administrative Agent and each Lender and their
respective directors, officers, agents, attorneys and employees (collectively
the "Indemnitees") from and against: (a) any and all claims, demands, actions
or causes of action (except a claim, demand, action, or cause of action for any
amount excluded from the definition of "Taxes" in Section 3.12(d)) if the
claim, demand, action or cause of action arises out of or relates to any act or
omission (or alleged act or omission) of Borrower, its Affiliates or any of its
officers, directors or stockholders relating to the Commitment, the use or
contemplated use of proceeds of any Loan, or the relationship of Borrower and
the Lenders under this Agreement; (b) any administrative or investigative
proceeding by any Governmental Agency arising out of or related to a claim,
demand, action or cause of action described in clause (a) above; and (c) any
and all liabilities, losses, costs or expenses (including reasonable attorneys'
fees and the reasonably allocated costs of attorneys employed by any Indemnitee
and disbursements of such attorneys and other professional services) that any
Indemnitee suffers or incurs as a result of the assertion of any foregoing
claim, demand, action or cause of action; provided that no Indemnitee shall be
entitled to indemnification for any loss caused by its own gross negligence or
willful misconduct or for any loss asserted against it by another Indemnitee.
If any claim, demand, action or cause of action is asserted against any
Indemnitee, such Indemnitee shall promptly notify Borrower, but the failure to
so promptly notify Borrower shall not affect Borrower's obligations under this
Section unless such failure materially prejudices Borrower's right to
participate in the contest of such claim, demand, action or cause of action, as
hereinafter provided. Such Indemnitee may (and shall, if requested by Borrower
in writing) contest the validity, applicability and amount of such claim,
demand, action or cause of action and shall permit Borrower to participate in
such contest. Any Indemnitee that proposes to settle or compromise any claim
or proceeding for which Borrower may be liable for payment of indemnity
hereunder shall give Borrower written notice of the terms of such proposed
settlement or compromise reasonably in advance of settling or compromising such
claim or proceeding and shall obtain Borrower's prior consent (which shall not
be unreasonably withheld or delayed). In connection with any claim, demand,
action or cause of action covered by this Section 11.11 against more than one
Indemnitee, all such Indemnitees shall be represented by the same legal counsel
(which may be a law firm engaged by the Indemnitees or attorneys employed by an
Indemnitee or a combination of the foregoing) selected by the Indemnitees and
reasonably acceptable to Borrower; provided, that if such legal counsel
determines in good faith that representing all such Indemnitees would or could
result in a conflict of interest under Laws or ethical principles applicable to
such legal counsel or that a defense or counterclaim is available to an
Indemnitee that is not available to all such Indemnitees, then to the extent
reasonably necessary to avoid such a conflict of interest or to permit
unqualified assertion of such a defense or counterclaim, each affected
Indemnitee shall be entitled to separate representation by legal counsel
selected by that Indemnitee and reasonably acceptable to Borrower, with all
such legal counsel using reasonable efforts to avoid unnecessary duplication of
effort by counsel for all Indemnitees; and further provided that the
Administrative Agent (as an Indemnitee) shall at all times be entitled to
representation by separate legal counsel (which may be a law firm or attorneys
employed by the Administrative Agent or a combination of the foregoing). Any
obligation or liability of Borrower to any Indemnitee under this Section 11.11
shall survive the expiration or
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termination of this Agreement and the repayment of all Loans and the payment
and performance of all other Obligations owed to the Lenders.
11.12 Nonliability of the Lenders. Borrower acknowledges
and agrees that:
(a) Any inspections of any Property of Borrower
made by or through the Administrative Agent or the Lenders are for
purposes of administration of the Loan only and Borrower is not
entitled to rely upon the same (whether or not such inspections are at
the expense of Borrower);
(b) By accepting or approving anything required
to be observed, performed, fulfilled or given to the Administrative
Agent or the Lenders pursuant to the Loan Documents, neither the
Administrative Agent nor the Lenders shall be deemed to have warranted
or represented the sufficiency, legality, effectiveness or legal
effect of the same, or of any term, provision or condition thereof,
and such acceptance or approval thereof shall not constitute a
warranty or representation to anyone with respect thereto by the
Administrative Agent or the Lenders;
(c) The relationship between Borrower and the
Administrative Agent and the Lenders is, and shall at all times
remain, solely that of borrowers and lenders; neither the
Administrative Agent nor the Lenders shall under any circumstance be
construed to be partners or joint venturers of Borrower or its
Affiliates; neither the Administrative Agent nor the Lenders shall
under any circumstance be deemed to be in a relationship of confidence
or trust or a fiduciary relationship with Borrower or its Affiliates,
or to owe any fiduciary duty to Borrower or its Affiliates; neither
the Administrative Agent nor the Lenders undertake or assume any
responsibility or duty to Borrower or its Affiliates to select,
review, inspect, supervise, pass judgment upon or inform Borrower or
its Affiliates of any matter in connection with their Property or the
operations of Borrower or its Affiliates; Borrower and its Affiliates
shall rely entirely upon their own judgment with respect to such
matters; and any review, inspection, supervision, exercise of judgment
or supply of information undertaken or assumed by the Administrative
Agent or the Lenders in connection with such matters is solely for the
protection of the Administrative Agent and the Lenders and neither
Borrower nor any other Person is entitled to rely thereon; and
(d) The Administrative Agent and the Lenders
shall not be responsible or liable to any Person for any loss, damage,
liability or claim of any kind relating to injury or death to Persons
or damage to Property caused by the actions, inaction or negligence of
Borrower and/or its Affiliates and Borrower hereby indemnify and hold
the Administrative Agent and the Lenders harmless on the terms set
forth in Section 11.11 from any such loss, damage, liability or claim.
11.13 No Third Parties Benefited. This Agreement is made
for the purpose of defining and setting forth certain obligations, rights and
duties of Borrower, the Administrative Agent and the Lenders in connection with
the Loans, and is made for the sole benefit of Borrower,
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the Administrative Agent and the Lenders, and the Administrative Agent's and
the Lenders' successors and assigns. Except as provided in Sections 11.8 and
11.11, no other Person shall have any rights of any nature hereunder or by
reason hereof.
11.14 Confidentiality. Each Lender agrees to hold any
confidential information that it may receive from Borrower pursuant to this
Agreement in confidence, except for disclosure: (a) to other Lenders or
Affiliates of a Lender; (b) to legal counsel and accountants for Borrower or
any Lender; (c) to other professional advisors to Borrower or any Lender,
provided that the recipient has accepted such information subject to a
confidentiality agreement substantially similar to this Section 11.14; (d) to
regulatory officials having jurisdiction over that Lender; (e) as required by
Law or legal process, provided that each Lender agrees to notify Borrower of
any such disclosures unless prohibited by applicable Laws, or in connection
with any legal proceeding to which that Lender and Borrower are adverse
parties; and (f) to another financial institution in connection with a
disposition or proposed disposition to that financial institution of all or
part of that Lender's interests hereunder or a participation interest in its
Notes, provided that the recipient has accepted such information subject to a
confidentiality agreement substantially similar to this Section 11.14. For
purposes of the foregoing, "confidential information" shall mean any
information respecting Borrower or its Subsidiaries reasonably considered by
Borrower to be confidential, other than (i) information previously filed with
any Governmental Agency and available to the public, (ii) information
previously published in any public medium from a source other than, directly or
indirectly, that Lender, and (iii) information previously disclosed by Borrower
to any Person not associated with Borrower which does not owe a professional
duty of confidentiality to Borrower or which has not executed an appropriate
confidentiality agreement with Borrower. Nothing in this Section shall be
construed to create or give rise to any fiduciary duty on the part of the
Administrative Agent or the Lenders to Borrower.
11.15 Further Assurances. Borrower shall, at its expense
and without expense to the Lenders or the Administrative Agent, do, execute and
deliver such further acts and documents as the Requisite Lenders or the
Administrative Agent from time to time reasonably require for the assuring and
confirming unto the Lenders or the Administrative Agent of the rights hereby
created or intended now or hereafter so to be, or for carrying out the
intention or facilitating the performance of the terms of any Loan Document.
11.16 Integration. This Agreement, together with the other
Loan Documents and the letter agreement referred to in Sections 3.2, 3.4, and
3.5, comprises the complete and integrated agreement of the parties on the
subject matter hereof and supersedes all prior agreements, written or oral, on
the subject matter hereof. In the event of any conflict between the provisions
of this Agreement and those of any other Loan Document, the provisions of this
Agreement shall control and govern; provided that the inclusion of supplemental
rights or remedies in favor of the Administrative Agent or the Lenders in any
other Loan Document shall not be deemed a conflict with this Agreement. Each
Loan Document was drafted with the joint participation of the respective
parties thereto and shall be construed neither against nor in favor of any
party, but rather in accordance with the fair meaning thereof.
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11.17 Governing Law. Except to the extent otherwise
provided therein, each Loan Document shall be governed by, and construed and
enforced in accordance with, the Laws of California applicable to contracts
made and performed in California.
11.18 Severability of Provisions. Any provision in any
Loan Document that is held to be inoperative, unenforceable or invalid as to
any party or in any jurisdiction shall, as to that party or jurisdiction, be
inoperative, unenforceable or invalid without affecting the remaining
provisions or the operation, enforceability or validity of that provision as to
any other party or in any other jurisdiction, and to this end the provisions of
all Loan Documents are declared to be severable.
11.19 Headings. Article and Section headings in this
Agreement and the other Loan Documents are included for convenience of
reference only and are not part of this Agreement or the other Loan Documents
for any other purpose.
11.20 Time of the Essence. Time is of the essence of the
Loan Documents.
11.21 Foreign Lenders and Participants. Each Lender that
is incorporated or otherwise organized under the Laws of a jurisdiction other
than the United States of America or any State thereof or the District of
Columbia shall deliver to Borrower (with a copy to the Administrative Agent),
on or before the Closing Date (or on or before accepting an assignment or
receiving a participation interest herein pursuant to Section 11.8, if
applicable) two duly completed copies, signed by a Responsible Official, of
either Form 1001 (relating to such Lender and entitling it to a complete
exemption from withholding on all payments to be made to such Lender by
Borrower pursuant to this Agreement) or Form 4224 (relating to all payments to
be made to such Lender by the Borrower pursuant to this Agreement) of the
United States Internal Revenue Service or such other evidence (including, if
reasonably necessary, Form W-9) satisfactory to Borrower and the Administrative
Agent that no withholding under the federal income tax laws is required with
respect to such Lender. Thereafter and from time to time, each such Lender
shall (a) promptly submit to Borrower (with a copy to the Administrative
Agent), such additional duly completed and signed copies of one of such forms
(or such successor forms as shall be adopted from time to time by the relevant
United States taxing authorities) as may then be available under then current
United States laws and regulations to avoid, or such evidence as is
satisfactory to Borrower and the Administrative Agent of any available
exemption from, United States withholding taxes in respect of all payments to
be made to such Lender by Borrower pursuant to this Agreement and (b) take such
steps as shall not be materially disadvantageous to it, in the reasonable
judgment of such Lender, and as may be reasonably necessary (including the
re-designation of its Eurodollar Lending Office, if any) to avoid any
requirement of applicable Laws that Borrower make any deduction or withholding
for taxes from amounts payable to such Lender. In the event that Borrower or
the Administrative Agent become aware that a participation has been granted
pursuant to Section 11.8(e) to a financial institution that is incorporated or
otherwise organized under the Laws of a jurisdiction other than the United
States of America, any State thereof or the District of Columbia, then, upon
request made by Borrower or the Administrative Agent to the Lender which
granted such participation, such Lender shall cause such participant financial
institution to deliver the same documents and information to Borrower and the
Administrative Agent as would be required under this Section if such financial
institution were a Lender.
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11.22 Hazardous Material Indemnity. Borrower hereby agrees
to indemnify, hold harmless and defend (by counsel reasonably satisfactory to
the Administrative Agent) the Administrative Agent and each of the Lenders and
their respective directors, officers, employees, agents, successors and assigns
from and against any and all claims, losses, damages, liabilities, fines,
penalties, charges, administrative and judicial proceedings and orders,
judgments, remedial action requirements, enforcement actions of any kind, and
all costs and expenses incurred in connection therewith (including but not
limited to reasonable attorneys' fees and the reasonably allocated costs of
attorneys employed by the Administrative Agent or any Lender, and expenses to
the extent that the defense of any such action has not been assumed by
Borrower), arising directly or indirectly out of (i) the presence on, in, under
or about any Real Property of any Hazardous Materials, or any releases or
discharges of any Hazardous Materials on, under or from any Real Property and
(ii) any activity carried on or undertaken on or off any Real Property by
Borrower or any of its predecessors in title, whether prior to or during the
term of this Agreement, and whether by Borrower or any predecessor in title or
any employees, agents, contractors or subcontractors of Borrower or any
predecessor in title, or any third persons at any time occupying or present on
any Real Property, in connection with the handling, treatment, removal,
storage, decontamination, clean-up, transport or disposal of any Hazardous
Materials at any time located or present on, in, under or about any Real
Property. The foregoing indemnity shall further apply to any residual
contamination on, in, under or about any Real Property, or affecting any
natural resources, and to any contamination of any Property or natural
resources arising in connection with the generation, use, handling, storage,
transport or disposal of any such Hazardous Materials, and irrespective of
whether any of such activities were or will be undertaken in accordance with
applicable Laws, but the foregoing indemnity shall not apply to Hazardous
Materials on any Real Property, the presence of which is caused by the
Administrative Agent or the Lenders. Borrower hereby acknowledges and agrees
that, notwithstanding any other provision of this Agreement or any of the other
Loan Documents to the contrary, the obligations of Borrower under this Section
shall be unlimited corporate obligations of Borrower and shall not be secured
by any Lien on any Real Property. Any obligation or liability of Borrower to
any Indemnitee under this Section 11.22 shall survive the expiration or
termination of this Agreement and the repayment of all Loans and the payment
and performance of all other Obligations owed to the Lenders.
11.23 Waiver of Right to Trial by Jury. EACH PARTY TO THIS
AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTY HERETO OR
ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED
THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND
CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE
DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY
FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF
THEIR RIGHT TO TRIAL BY JURY.
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11.24 Purported Oral Amendments. BORROWER EXPRESSLY
ACKNOWLEDGES THAT THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY ONLY BE
AMENDED OR MODIFIED, OR THE PROVISIONS HEREOF OR THEREOF WAIVED OR
SUPPLEMENTED, BY AN INSTRUMENT IN WRITING THAT COMPLIES WITH SECTION 11.2.
BORROWER AGREES THAT IT WILL NOT RELY ON ANY COURSE OF DEALING, COURSE OF
PERFORMANCE, OR ORAL OR WRITTEN STATEMENTS BY ANY REPRESENTATIVE OF THE
MANAGING AGENT OR ANY BANK THAT DOES NOT COMPLY WITH SECTION 11.2 TO EFFECT AN
AMENDMENT, MODIFICATION, WAIVER OR SUPPLEMENT TO THIS AGREEMENT OR THE OTHER
LOAN DOCUMENTS.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
AMERICAN COIN MERCHANDISING, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President and Chief Executive Officer
By: /s/ W. ▇▇▇▇ ▇▇▇▇
---------------------------------------
W. ▇▇▇▇ ▇▇▇▇
Vice President and
Chief Financial Officer
Address for notices as a Lender:
American Coin Merchandising, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: W. ▇▇▇▇ ▇▇▇▇
Chief Financial Officer
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION, as
Administrative Agent and a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
Address for notices as a Lender:
▇▇▇▇▇ Fargo Bank, National Association
Commercial Lending
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Address for notices to Administrative Agent for borrowings
and payments:
▇▇▇▇▇ Fargo Bank, National Association
Agency Department
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇