EXHIBIT 10.22
AMENDED AND RESTATED CREDIT AGREEMENT,
dated as of May 9, 2001
among
WEEKLY READER CORPORATION
and
COMPASSLEARNING, INC.
(formerly known as JLC Learning Corporation),
as the Borrowers,
WRC MEDIA INC.,
as a Guarantor,
VARIOUS FINANCIAL INSTITUTIONS FROM TIME TO TIME
PARTIES HERETO,
as the Lenders,
CREDIT SUISSE FIRST BOSTON
(as successor in interest to DLJ Capital Funding, Inc.),
as the Syndication Agent, the Lead Arranger and
the Sole Book Running Manager,
BANK OF AMERICA, N.A.,
as the Administrative Agent for the Lenders,
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as the Documentation Agent for the Lenders.
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of May 9, 2001
(amending and restating the Credit Agreement, dated as of November 17, 1999), is
made by and among WEEKLY READER CORPORATION, a Delaware corporation ("WRC"), and
COMPASSLEARNING, INC., a Delaware corporation (formerly known as JLC Learning
Corporation) ("CLI" and, together with WRC, the "Borrowers"), WRC MEDIA INC., a
Delaware corporation and the parent of CLI ("Holdings"), as a guarantor, the
various financial institutions and other Persons from time to time parties
hereto (the "Lenders"), CREDIT SUISSE FIRST BOSTON (as successor in interest to
DLJ Capital Funding, Inc.), as the Syndication Agent ("CSFB" and in such
capacity, the "Syndication Agent") for the Lenders, and as the Lead Arranger and
Sole Book Running Manager, BANK OF AMERICA, N.A. ("BofA"), as administrative
agent (in such capacity, the "Administrative Agent") for the Lenders, and
GENERAL ELECTRIC CAPITAL CORPORATION ("GECC"), as the documentation agent (in
such capacity, the "Documentation Agent") for the Lenders.
W I T N E S S E T H:
--------------------
WHEREAS, Holdings acquired (the "Financed Acquisition") 94.9% of the
outstanding common stock of WRC pursuant to a Redemption, Stock Purchase and
Recapitalization Agreement, dated as of August 13, 1999, as amended by Amendment
No. 1 thereto, dated as of October 26, 1999 and Amendment No. 2 thereto, dated
as of November 10, 1999 (the "Purchase Agreement"), between Holdings and
Primedia Inc., a Delaware corporation (the "Seller"), for an aggregate purchase
price of $396,054,500;
WHEREAS, in connection with the Financed Acquisition,
(a) Holdings obtained the ownership (either directly or
indirectly) of WRC, Primedia Reference Inc., a Delaware corporation
("PRI"), American Guidance Service, Inc., a Minnesota corporation
("AGS"), and Lifetime Learning Systems, Inc., a Delaware corporation
("Lifetime") and their respective direct and indirect Subsidiaries;
(b) shares of common stock of WRC equal to 5.1% of the
outstanding shares of such common stock (the "Rollover Equity") were
retained by the Seller; and
(c) the Borrowers (i) refinanced approximately $27,000,000 of
existing Indebtedness of CLI (the "Refinancing"), (ii) paid estimated
fees and expenses in connection with the Financed Acquisition, the
Refinancing and related transactions (the Financed Acquisition, the
Refinancing and such transactions related thereto, including those
described in the recitals hereto, being herein collectively referred to
as the "Transaction") of approximately $22,800,000, and (iii) obtained
$7,000,000 in excess cash for general corporate purposes;
WHEREAS, in order to finance the consummation of the Financed
Acquisition and the Refinancing, the following capital-raising transactions
occurred prior to or contemporaneously with the consummation of the Financed
Acquisition and the making of the initial credit extensions:
(a) Ripplewood Partners, L.P., a Delaware limited partnership
("Ripplewood"), its Affiliates and co-investors (including SG Capital
Partners and Lexington Partners) (collectively, the "Common Equity
Securities Investors") purchased membership interests of EAC III L.L.C.
("EAC III"), the parent of Holdings, for not less than $65,000,000 in
cash (the "EAC III Purchase");
(b) Holdings, CLI and WRC issued jointly (the "Subordinated
Note Issuance") $152,000,000 face amount of their 12-3/4% Senior
Subordinated Notes due 2009 (its "Subordinated Notes") and in
connection therewith Holdings issued 205,656 shares of its common stock
(the "Holdings (Unit) Common Stock") representing 3% of its common
stock on a fully-diluted basis (but without giving effect to management
options) for aggregate gross cash proceeds of at least $149,900,000;
(c) Holdings issued (the "PIK Preferred Equity Issuance")
3,000,000 shares of its 15% Senior Preferred Stock redeemable in 2011,
par value $0.01 per share (the "PIK Preferred Equity") for not less
than $75,000,000 in net cash proceeds to DLJ Merchant Banking Partners
II, L.P. ("DLJMB"), certain of the DLJMB Related Parties and certain
other third parties (the "PIK Preferred Equity Holders"), which PIK
Preferred Equity is exchangeable (i) at the option of the holders
thereof, for an equal amount of pay-in-kind preferred stock of WRC (the
"WRC PIK I Preferred Equity") and/or pay-in-kind preferred stock of CLI
(the "CLI PIK Preferred Equity") and (ii) at the election of Holdings
under certain circumstances, into pay-in-kind preferred stock of WRC
(the "WRC ▇▇▇ ▇▇ Preferred Equity") as permitted under Section 11.12(d)
herein, in each case having terms substantially the same as the PIK
Preferred Equity, and in connection therewith the PIK Preferred Equity
Holders also received warrants (the "WRC Warrants") to acquire not more
than 13.1% of the common stock of WRC on a fully-diluted basis, and
warrants (the "CLI Warrants") to acquire not more than 13.1% of the
common stock of CLI on a fully-diluted basis pursuant to a preferred
stockholders agreement, dated as of November 17, 1999 (the "Preferred
Stockholders Agreement"), among Holdings, WRC, CLI and the PIK
Preferred Equity Holders, which includes, among other things, the
irrevocable agreement by the PIK Preferred Equity Holders for the
benefit of the holders of the common stock of CLI and WRC (and for the
benefit of the Administrative Agent, as pledgee (for the benefit of the
Secured Parties), upon any exercise of its rights under the Security
and Pledge Agreement to sell such common stock) that such holders will
have drag-along rights with respect to the Capital Securities of each
Borrower (other than the WRC PIK Preferred Equity and the CLI PIK
Preferred Equity, if any) that are held by the PIK Preferred Equity
Holders (and their transferees);
-2-
(d) Holdings issued (the "Common Equity Issuance", and
together with the PIK Preferred Equity Issuance, the "Equity
Issuances") 6,855,853 shares of its common stock ("Common Equity
Securities", and together with PIK Preferred Equity Securities, the
"Equity Securities") and EAC III purchased the Common Equity Securities
using all of the cash proceeds received by EAC III from the EAC III
Purchase (and additional amounts provided by various co-investors) for
an aggregate amount of not less than $95,000,000;
(e) WRC issued to Holdings pay-in-kind preferred stock (the
"WRC Mirror PIK Preferred Equity") for not less than $75,000,000, which
WRC Mirror PIK Preferred Equity has terms substantially the same as the
PIK Preferred Equity, except that the issuer of such stock is WRC and
such stock has no exchange rights; and
(f) the Seller maintained the Rollover Equity in WRC;
WHEREAS, in connection with the Transaction and the post-closing
ongoing working capital and general corporate needs of the Borrowers and their
respective Subsidiaries, the Borrowers obtained the following financing
facilities from the Lenders:
(a) a Term A Loan Commitment and a Term B Loan Commitment (in
each case as defined under the Existing Credit Agreement) pursuant to
which Borrowings of Existing Term Loans were made to the Borrowers on
the Closing Date in an original principal amount of $31,000,000 (in the
case of the Existing Term A Loans) and $100,000,000 (in the case of the
Term B Loans);
(b) a Revolving Loan Commitment (which includes availability
for Revolving Loans, Swing Line Loans and Letters of Credit) pursuant
to which Borrowings of Revolving Loans, in a maximum aggregate
principal amount (together with all Swing Line Loans and Letter of
Credit Outstandings) not to exceed $30,000,000 has been and is being
made to the Borrowers from time to time on and subsequent to the
Closing Date but prior to the Revolving Loan Commitment Termination
Date;
(c) a Letter of Credit Commitment pursuant to which each
Issuer has and may issue Letters of Credit for the account of the
Borrowers and the Subsidiary Guarantors from time to time on and
subsequent to the Closing Date but prior to the Revolving Loan
Commitment Termination Date in a maximum aggregate Stated Amount at any
one time outstanding not to exceed $5,000,000 (provided, that the
aggregate outstanding principal amount of Revolving Loans, Swing Line
Loans and Letter of Credit Outstandings at any time shall not exceed
the then existing Revolving Loan Commitment Amount); and
-3-
(d) a Swing Line Loan Commitment pursuant to which Borrowings
of Swing Line Loans in an aggregate outstanding principal amount not to
exceed $5,000,000 may be made on and subsequent to the Closing Date but
prior to the Revolving Loan Commitment Termination Date (provided, that
the aggregate outstanding principal amount of such Swing Line Loans,
together with Revolving Loans and Letter of Credit Outstandings, at any
time shall not exceed the then existing Revolving Loan Commitment
Amount);
WHEREAS, Holdings intends to acquire ▇▇▇▇▇ Enterprises, Inc., a Texas
corporation ("▇▇▇▇▇"), through AGS, a Subsidiary of WRC, and pursuant to an
asset purchase agreement dated as of May 9, 2001, among AGS, ▇▇▇▇▇ Acquisition
Co., LLC, a Delaware limited liability company, ▇▇▇▇▇ and certain shareholders
of ▇▇▇▇▇ (the "▇▇▇▇▇ Agreement"), pursuant to which AGS shall purchase
substantially all of the assets of ▇▇▇▇▇ for approximately $6,000,000 in cash,
plus fees and expenses in connection with the transaction not in excess of
$1,500,000 (the "▇▇▇▇▇ Acquisition");
WHEREAS, Holdings intends to acquire and invest in ChildU, Inc., a
Florida corporation ("ChildU"), pursuant to an agreement and plan of merger
dated as of May 9, 2001, among Holdings, CU Acquisition, Inc., a Florida
corporation, and ChildU (the "ChildU Agreement"), pursuant to which Holdings
shall, in addition to paying customary expenses in connection with the
transaction,
(a) commit to make up to $8,250,000 in investments in ChildU
to fund ChildU's obligations, which investments could take the form of
either loans or capital contributions from Holdings;
(b) exchange 162,500 shares of Holdings common stock for notes
of ChildU currently held by a group of affiliated investors of ChildU
with an aggregate principal amount of $5,500,000 and with approximately
$1,600,000 in accrued interest; and
(c) commit to make contingent payments, in the form of
Holdings common stock having an aggregate value of up to $15,000,000,
to ChildU's shareholders upon ChildU's achievement of certain revenue
goals in fiscal year 2001 (collectively, the "ChildU Acquisition"), all
as more fully set forth as the ChildU Agreement;
WHEREAS, Holdings intends to invest in ThinkBox Inc., a Delaware
corporation ("ThinkBox"), pursuant to a preferred stock purchase agreement, the
latest draft of which is dated April 27, 2001, between Holdings and ThinkBox
(the "ThinkBox Agreement"), pursuant to which Holdings would purchase, for up to
$2,850,000 in cash, plus customary expenses in connection with the transaction,
(a) up to 38% of the shares of the issued and outstanding capital stock of
ThinkBox and (b) an option to purchase the remaining portion of ThinkBox's
outstanding capital stock for between $5,000,000 and $15,000,000, depending upon
the achievement by ThinkBox of certain revenue goals in fiscal years 2001 and
2002, in exchange for Holdings common stock (the maintenance of which option
will require Holdings to make monthly cash payments of approximately $357,000 to
ThinkBox, in the form of Continued Funding and Post-Exercise Funding, as defined
in the ThinkBox Agreement, in exchange for ThinkBox stock) (such purchase,
option maintenance and option exercise collectively, the "ThinkBox Investment"),
all as more fully set forth in the ThinkBox Agreement;
-4-
WHEREAS, in order to finance the ▇▇▇▇▇ Acquisition, (i) the Borrowers
have requested the Lenders to consent to an additional Term A Loan Commitment
in an aggregate principal amount of $10,000,000 and (ii) certain provisions of
the Existing Credit Agreement are herein amended to provide for such
Commitment;
WHEREAS, in order to fully finance the cash portion of the ChildU
Acquisition and the ThinkBox Investment, Holdings will issue shares of its
Junior Preferred Stock to EAC III and SGC Partners II LLC, a Delaware limited
liability company, at a price per share of $40; and
WHEREAS, the Required Lenders are willing, on the terms and subject to
the conditions set forth in the Amendment Agreement (including Article III
thereof) and hereinafter set forth, to amend and restate the Existing Credit
Agreement (other than the signature pages thereto) and to extend and/or
maintain the Commitments and maintain and make the Loans described herein to
the Borrowers and issue (or participate in) Letters of Credit for the account
of the Borrowers and the Subsidiary Guarantors;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Defined Terms. The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):
"Acquisition" means any transaction or series of related transactions
for the purpose of or resulting, directly or indirectly, in (a) the acquisition
of all or substantially all of the assets of a Person, or of any business or
division of a Person, (b) the acquisition of in excess of 50% of the Capital
Securities of any Person, or otherwise causing any Person to become a
Subsidiary, or (c) a merger or consolidation or any other combination with
another Person (provided that a Borrower or one of its Subsidiaries is the
surviving entity).
"Additional Term A Loan" is defined in clause (b) of Section 2.1.1.
"Additional Term A Loan Commitment" is defined in clause (b) of Section
2.1.1.
-5-
"Additional Term A Loan Commitment Amount" means $10,000,000.
"Additional Term A Loan Commitment Termination Date" means the earliest
of:
(a) May 31, 2001, if the Additional Term A Loans have not been
made on or prior to such date;
(b) the date of making of the Additional Term A Loans
(immediately after the making of such Additional Term A Loans on such
date); and
(c) the date on which any Commitment Termination Event occurs.
Upon the occurrence of any event described in clauses (b) or (c), the
Additional Term A Loan Commitment shall terminate automatically and without any
further action.
"Additional Term A Loan Lender" means any Lender which has a Percentage
of the Additional Term A Loan Commitment Amount.
"Administrative Agent" is defined in the preamble and includes each
other Person appointed as the successor Administrative Agent pursuant to Section
9.4.
"Affected Lender" is defined in Section 4.10.
"Affiliate" of any Person means any other Person which, directly or
indirectly, controls, is controlled by or is under common control with such
Person. "Control" of a Person means the power, directly or indirectly,
(a) to vote 10% or more of the Capital Securities (on a fully
diluted basis) of such Person, having ordinary voting power for the
election of directors, managing members or general partners (as
applicable); or
(b) to direct or cause the direction of the management and
policies of such Person (whether by contract or otherwise).
"Agreement" means, on any date, the Existing Credit Agreement as
amended and restated on the Amendment Effective Date and as the same may
thereafter from time to time be further amended, supplemented, amended and
restated or otherwise modified from time to time and in effect on such date.
"AGS" is defined in clause (a) of the second recital.
-6-
"Alternate Base Rate" means, on any date and with respect to all Base
Rate Loans, a fluctuating rate of interest per annum (rounded upward, if
necessary, to the next highest 1/16 of 1%) equal to the higher of
(a) the Base Rate in effect on such day; and
(b) the Federal Funds Rate in effect on such day plus
1/2 of 1%.
Changes in the rate of interest on that portion of any Loans maintained as Base
Rate Loans will take effect simultaneously with each change in the Alternate
Base Rate. The Administrative Agent will give notice promptly to the Borrowers
and the Lenders of changes in the Alternate Base Rate; provided, that the
failure to give such notice shall not affect the Alternate Base Rate in effect
after such change.
"Amendment Agreement" means the Amendment Agreement dated as of May 9,
2001, among the Borrowers, Holdings, the Lenders with an Additional Term A Loan
Commitment party thereto, and the Agents.
"Amendment Effective Date" means the date all closing conditions set
forth in Article III of the Amendment Agreement are satisfied.
"Amendment Effective Date Certificate" means a certificate of an
Authorized Officer of Holdings and of each Borrower substantially in the form
of Exhibit D-2 hereto, delivered pursuant to Section 3.3 of the Amendment
Agreement.
"Applicable Commitment Fee" means a fee which shall accrue at the
applicable rate per annum set forth below under the column entitled "Applicable
Commitment Fee", determined by reference to the applicable Leverage Ratio
referred to below:
Leverage
Ratio Applicable Commitment Fee
-------- -------------------------
greater than .500%
5.00:1.0
greater than .375%
4.00:1.0 and less
than or equal to
5.00:1.0
less than or .250%
equal to 4.00:1.0
-7-
The Leverage Ratio used to compute the Applicable Commitment Fee shall be that
set forth in the Compliance Certificate most recently delivered by Holdings to
the Agents; changes in the Applicable Commitment Fee resulting from a change in
the Leverage Ratio shall become effective upon delivery by Holdings to the
Agents of a new Compliance Certificate pursuant to clause (d) of Section 7.1.1.
If Holdings shall fail to deliver a Compliance Certificate by the delivery due
date specified in such clause, the Applicable Commitment Fee from and including
the day immediately following such delivery due date to (but excluding) the date
five (5) Business Days after the date Holdings delivers to the Agents a
Compliance Certificate shall conclusively be equal to the highest Applicable
Commitment Fee set forth above.
"Applicable Margin" means, at all times during the applicable periods
set forth below,
(a) on any date, with respect to the unpaid principal amount
of each Term B Loan and each Additional Term A Loan the rate determined
by reference to the applicable Leverage Ratio and at the applicable
percentage per annum set forth below under the column entitled
"Applicable Margin for Base Rate Loans", in the case of such Loans made
or maintained as Base Rate Loans, or by reference to the applicable
Leverage Ratio and at the applicable percentage per annum set forth
below under the column entitled "Applicable Margin for LIBO Rate
Loans", in the case of such Loans made or maintained as LIBO Rate
Loans:
Applicable Applicable
Leverage Margin For Margin For
Ratio Base Rate Loans LIBO Rate Loans
-------- --------------- ---------------
greater than 5.50:1.0 3.25% 4.25%
less than or equal to 3.00% 4.00%
5.50:1.0
and
(b) on any date, with respect to the unpaid principal amount
of each Swing Line Loan (which shall be borrowed and maintained only as
a Base Rate Loan), Revolving Loan and Existing Term A Loan, the rate
determined by reference to the applicable Leverage Ratio and at the
applicable percentage per annum set forth below under the column
entitled "Applicable Margin for Base Rate Loans", in the case of such
Loans made or maintained as Base Rate Loans, or by reference to the
applicable Leverage Ratio and at the applicable percentage per annum
set forth below under the column entitled "Applicable Margin for LIBO
Rate Loans", in the case of such Loans made or maintained as LIBO Rate
Loans:
-8-
Applicable Applicable
Leverage Margin For Margin For
Ratio Base Rate Loans LIBO Rate Loans
-------- --------------- ---------------
greater than 5.50:1.0 2.50% 3.50%
greater than 5.00:1.0 and 2.375% 3.375%
less than or equal to
5.50:1.0
greater than 4.50:1.0 and 1.75% 2.75%
less than or equal to
5.00:1.0
greater than 4.00:1.0 and 1.50% 2.50%
less than or equal to
4.50:1.0
greater than 3.50:1.0 and 1.25% 2.25%
less than or equal to
4.00:1.0
less than or equal to 1.00% 2.00%
3.50:1.0
The Leverage Ratio used to compute the Applicable Margin shall be the Leverage
Ratio set forth in the Compliance Certificate most recently delivered by
Holdings to the Agents; changes in the Applicable Margin resulting from a change
in the Leverage Ratio shall become effective upon the date five (5) Business
Days after the date by which delivery by the Borrowers to the Agents of a new
Compliance Certificate is required pursuant to clause (d) of Section 7.1.1. If
Holdings shall fail to deliver a Compliance Certificate by the delivery due date
specified in such clause, the Applicable Margin from and including the day
immediately following such delivery due date to (but excluding) the date five
(5) Business Days after the date Holdings delivers to the Agents a Compliance
Certificate shall conclusively be equal to the highest Applicable Margin set
forth above.
"Assignee Lender" is defined in Section 11.11.1.
"Assignor Lender" is defined in Section 11.11.1.
"Authorized Officer" means, relative to any Obligor or the Seller,
those of its officers, general parties or managing members (as applicable) whose
signatures and incumbency shall have been certified to the Agents, the Lenders
and the Issuers pursuant to Section 5.1.1 of the Existing Credit Agreement or
Section 3.3 of the Amendment Agreement.
-9-
"Base Rate" means, at any time, the rate of interest then most recently
established by the Administrative Agent in Charlotte, North Carolina as its base
rate for U.S. dollars loaned in the United States. The Base Rate is not
necessarily intended to be the lowest rate of interest determined by the
Administrative Agent in connection with extensions of credit.
"Base Rate Loan" means a Loan bearing interest at a fluctuating rate
determined by reference to the Alternate Base Rate.
"BofA" is defined in the preamble.
"Borrowers" is defined in the preamble.
"Borrowing" means the Loans of the same type and, in the case of LIBO
Rate Loans, having the same Interest Period made by all Lenders required to
make such Loans on the same Business Day and pursuant to the same Borrowing
Request in accordance with Section 2.1.
"Borrowing Request" means a Loan request and certificate duly executed
by an Authorized Officer of the applicable Borrower, substantially in the form
of Exhibit B-1 hereto.
"Business Day" means
(a) any day which is neither a Saturday or Sunday nor a legal
holiday on which banks are authorized or required to be closed in
Charlotte, North Carolina or New York, New York; and
(b) relative to the making, continuing, prepaying or repaying
of any LIBO Rate Loans, any day which is a Business Day described in
clause (a) above and which is also a day on which dealings in Dollars
are carried on in the London interbank eurodollar market.
"Capital Expenditures" means, for any period, the aggregate amount of
all expenditures of Holdings, the Borrowers and their respective Subsidiaries
for fixed or capital assets made during such period which, in accordance with
GAAP, would be classified as capital expenditures. It is further agreed and
understood by the parties hereto that capital expenditures made by acquisition
of all the Capital Securities of an entity that owns fixed or capital assets
will also be considered to constitute "Capital Expenditures".
"Capital Securities" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such Person's capital, whether now outstanding
or issued after the Closing Date.
-10-
"Capitalized Lease Liabilities" means all monetary obligations of
Holdings, either Borrower or any of their respective Subsidiaries under any
leasing or similar arrangement which have been (or, in accordance with GAAP,
should be) classified as capitalized leases, and for purposes of each Loan
Document the amount of such obligations shall be the capitalized amount thereof,
determined in accordance with GAAP, and the stated maturity thereof shall be the
date of the last payment of rent or any other amount due under such lease prior
to the first date upon which such lease may be terminated by the lessee without
payment of a premium or a penalty.
"Cash Collateralize" means, with respect to a Letter of Credit, the
deposit of immediately available funds into a cash collateral account
maintained with (or on behalf of) the Administrative Agent on terms
satisfactory to the Administrative Agent in an amount equal to the Stated
Amount of such Letter of Credit.
"Cash Equivalent Investment" means, at any time:
(a) any direct obligation of (or unconditionally guaranteed
by) the United States of America or a State thereof (or any agency or
political subdivision thereof, to the extent such obligations are
supported by the full faith and credit of the United States of America
or a State thereof) maturing not more than six months after such time;
(b) commercial paper maturing not more than 180 days from the
date of issue, which is issued by
(i) a corporation (other than an Affiliate of any
Obligor) organized under the laws of any State of the United
States or of the District of Columbia and rated A-1 or higher
by S&P or P-1 or higher by ▇▇▇▇▇'▇, or
(ii) any Lender (or its holding company);
(c) any certificate of deposit, time deposit or bankers
acceptance, maturing not more than six months after its date of
issuance, which is issued by either
(i) any domestic office of any bank organized under
the laws of (A) the United States (or any State thereof) or
(B) any other member of the OECD, and, in each case, which has
(x) a credit rating of A2 or higher from ▇▇▇▇▇'▇ or A or
higher from S&P and (y) a combined capital and surplus greater
than $500,000,000, or
(ii) any Lender;
(d) any repurchase agreement having a term of 7 days or less
entered into with any Lender or any commercial banking institution
satisfying the criteria set forth in clause (c)(i) which
-11-
(i) is secured by a fully perfected security interest
in any obligation of the type described in clause (a), and
(ii) has a market value at the time such repurchase
agreement is entered into of not less than 100% of the
repurchase obligation of such commercial banking institution
thereunder; or
(e) shares of investment companies that are registered under
the Investment Company Act of 1940, as amended, and that invest solely
in one or more of the types of securities described in clauses (a)
through (c) above.
"Casualty Event" means the damage, destruction or condemnation, as the
case may be, of any property of Holdings, either Borrower or any of their
respective Subsidiaries.
"Casualty Proceeds" means, with respect to any Casualty Event, the
amount of any insurance proceeds or condemnation awards received by Holdings,
either Borrower or any of their respective Subsidiaries in connection therewith,
but excluding any proceeds or awards required to be paid to a creditor (other
than any Secured Party) which holds a first-priority Lien permitted by Section
7.2.3 on the property which is the subject of such Casualty Event.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List.
"Certificates of Designation" means, collectively, the Holdings
Certificate of Designation, the WRC Certificate of Designation, the CLI
Certificate of Designation and the Holdings Junior Certificate of Designation.
"Change in Control" means
(a) the failure of Ripplewood to directly or indirectly own
beneficially and of record on a fully diluted basis 51% of the
outstanding Capital Securities of EAC III, such Capital Securities to
be held free and clear of all Liens; or
(b) at any time prior to the creation of a Public Market, the
failure of EAC III to directly or indirectly own beneficially and of
record on a fully diluted basis prior to a Permitted Common Stock
Exchange, at least 51% of the outstanding Capital Securities of
Holdings (other than the PIK Preferred Equity, if any (and any
preferred stock having identical terms thereto that is issued by
Holdings to the holders thereof)) such Capital Securities to be held
free and clear of all Liens; or
-12-
(c) at any time after the creation of a Public Market relating
to Holdings or WRC, any person or group (within the meaning of Sections
13(d) and 14(d) under the Exchange Act), other than Ripplewood or any
other Common Equity Investor, shall become the ultimate "beneficial
owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act),
directly or indirectly, of Capital Securities representing more than
20% of the Capital Securities of Holdings (other than the PIK Preferred
Equity, if any (and any preferred stock having identical terms thereto
that is issued by Holdings to the holders thereof)) or WRC (other than
the WRC Mirror PIK Preferred Equity, if any, and the WRC PIK Preferred
Equity, if any (and any preferred stock having identical terms thereto
that is issued by WRC to the holders thereof)), as the case may be; or
(d) the first day on which a majority of the members of the
Board of Directors of Holdings or either Borrower are not Continuing
Directors; or
(e) at any time prior to the creation of a Public Market, (i)
prior to the Permitted Common Stock Exchange, the failure of Holdings
at any time to directly own beneficially and of record on a fully
diluted basis at least 78.80% and (ii) following the Permitted Common
Stock Exchange, the failure of Holdings at any time to directly own
beneficially and of record on a fully diluted basis at least 74.78%, in
each case, of the outstanding Capital Securities of WRC (other than the
WRC Mirror PIK Preferred Equity, if any, and the WRC PIK Preferred
Equity, if any (and any preferred stock having identical terms thereto
that is issued by WRC to the holders thereof in exchange therefor)),
such Capital Securities to be held free and clear of all Liens (other
than Liens granted under a Loan Document); or
(f) the failure of Holdings and WRC, individually or
collectively, at any time to directly own beneficially and of record on
a fully diluted basis 83.90% of the outstanding Capital Securities of
CLI (other than the CLI PIK Preferred Equity, if any (and any preferred
stock having identical terms thereto that is issued by CLI to the
holders thereof in exchange therefor)), such Capital Securities to be
held free and clear of all Liens (other than Liens granted under a Loan
Document); or
(g) (i) prior to the Permitted Common Stock Exchange, the
failure of (A) prior to the third anniversary of the Closing Date, at
least 83.90% and (B) on and subsequent to the third anniversary of the
Closing Date, at least 78.80%, and (ii) following the Permitted Common
Stock Exchange, the failure of (A) prior to the third anniversary of
the Closing Date, at least 79.62% and (B) on and subsequent to the
third anniversary of the Closing Date, at least 74.78%, in each case,
of the outstanding Capital Securities of WRC (other than the WRC Mirror
PIK Preferred Equity, if any, and the WRC PIK Preferred Equity, if any
(and any preferred stock having identical terms thereto that is issued
by WRC to the holders thereof in exchange therefor)) to be pledged by
the holder(s) thereof to the Administrative Agent under the Security
and Pledge Agreement, provided, however, that after the creation of a
Public Market of WRC, each such percentage of WRC's Capital Securities
shall be equitably adjusted based upon the amount of Capital Securities
issued in connection with a Public Offering of WRC; or
-13-
(h) the failure of the holders thereof to pledge at least
83.90% of the outstanding Capital Securities of CLI (other than the CLI
PIK Preferred Equity, if any (and any preferred stock having identical
terms thereto that is issued by CLI to the holders thereof in exchange
therefor)) to the Administrative Agent under the Security and Pledge
Agreement; or
(i) the occurrence of any "Change of Control" (or similar
term) under (and as defined in) any Sub Debt Document.
"ChildU" is defined in the sixth recital.
"ChildU Acquisition" is defined in the sixth recital. "ChildU
Agreement" is defined in the sixth recital.
"CLI" is defined in the preamble.
"CLI Certificate of Designation" means a certificate of designation
substantially in the form of the certificate of designation described in clause
(i) of the definition of the term "WRC Certificate of Designation" and relating
to the CLI PIK Preferred Equity.
"CLI PIK Preferred Equity" is defined in clause (c) of the third
recital.
"CLI Warrants" is defined in clause (c) of the third recital.
"Closing Date" means November 17, 1999, the date the initial Credit
Extensions were made under the Existing Credit Agreement, which was a Business
Day.
"Closing Date Certificate" means, collectively, the officer's
certificate executed and delivered by an authorized officer of each of Holdings,
each Borrower and each Subsidiary Guarantor pursuant to the terms of the
Existing Credit Agreement, a copy of which is attached hereto as Exhibit D-1.
"Code" means the Internal Revenue Code of 1986, and the regulations
thereunder, in each case as amended, reformed or otherwise modified from time to
time.
"Commitment" means, as the context may require, (i) a Lender's
Additional Term A Loan Commitment, Revolving Loan Commitment or Letter of
Credit Commitment, or (ii) the Swing Line Lender's Swing Line Loan Commitment.
-14-
"Commitment Amount" means, as the context may require, the Additional
Term A Loan Commitment Amount, the Revolving Loan Commitment Amount, the Letter
of Credit Commitment Amount or the Swing Line Loan Commitment Amount.
"Commitment Termination Date" means, as the context may require, the
Revolving Loan Commitment Termination Date or the Additional Term A Loan
Commitment Termination Date.
"Commitment Termination Event" means
(a) the occurrence of any Event of Default described in
clauses (a) through (d) of Section 8.1.9; or
(b) the occurrence and continuance of any other Event of
Default and either
(i) the declaration of all or any portion of the
Loans to be due and payable pursuant to Section 8.3, or
(ii) the giving of notice by the Administrative
Agent, acting at the direction of the Required Lenders, to the
Borrowers that the Commitments have been terminated.
"Common Equity Issuance" is defined in clause (d) of the third recital.
"Common Equity Securities" is defined in clause (d) of the third
recital.
"Common Equity Securities Investors" is defined in clause (a) of the
third recital.
"Compliance Certificate" means a certificate duly completed and
executed by the chief financial or accounting Authorized Officer of Holdings,
substantially in the form of Exhibit E hereto, together with such changes
thereto as the Agents may from time to time request for the purpose of
monitoring Holdings' and the Borrowers' compliance with the financial covenants
contained herein.
"Contingent Liability" means any agreement, undertaking or arrangement
by which any Person guarantees, endorses or otherwise becomes or is
contingently liable upon (by direct or indirect agreement, contingent or
otherwise, to provide funds for payment, to supply funds to, or otherwise to
invest in, a debtor, or otherwise to assure a creditor against loss) the
Indebtedness of any other Person (other than by endorsements of instruments in
the course of collection), or guarantees the payment of dividends or other
distributions upon the Capital Securities of any other Person. The amount of
any Person's obligation under any Contingent Liability shall (subject to any
limitation set forth therein) be deemed to be the outstanding principal amount
of the debt, obligation or other liability guaranteed thereby.
-15-
"Continuation/Conversion Notice" means a notice of continuation or
conversion and certificate duly executed by an Authorized Officer of the
applicable Borrower, substantially in the form of Exhibit C hereto.
"Continuing Director" means, as of any date of determination, any
member of the Board of Directors of Holdings or either Borrower who (i) was a
member of the Board of Directors of such Obligor on the Closing Date or (ii) was
nominated for election or elected to the Board of Directors of such Obligor with
the approval of a majority of the Continuing Directors who were members of the
Board of Directors of such Obligor at the time of such nomination or election.
"Controlled Group" means all members of a controlled group of
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with Holdings
or either Borrower, are treated as a single employer under Section 414(b) or
414(c) of the Code or Section 4001 of ERISA.
"Copyright Security Agreement" means any Copyright Security Agreement
executed and delivered by any Obligor in substantially the form of Exhibit D to
the Security and Pledge Agreement, as amended, supplemented, amended and
restated or otherwise modified from time to time.
"Credit Extension" means, as the context may require,
(a) the making of a Loan by a Lender; or
(b) the issuance of any Letter of Credit, or the extension of
any Stated Expiry Date of any existing Letter of Credit, by an Issuer.
"Credit Extension Request" means, as the context may require, any
Borrowing Request or Issuance Request.
"CSFB" is defined in the preamble.
"Current Assets" means, on any date, without duplication, all assets
which, in accordance with GAAP, would be included as current assets on a
consolidated balance sheet of Holdings and its Subsidiaries at such date as
current assets (excluding, however, amounts due and to become due from
Affiliates of the Borrowers which have arisen from transactions which are other
than arm's-length and in the ordinary course of its business).
"Current Liabilities" means, on any date, without duplication, all
amounts which, in accordance with GAAP, would be included as current liabilities
on a consolidated balance sheet of Holdings and its Subsidiaries at such date,
excluding current maturities of Indebtedness.
-16-
"Default" means any Event of Default or any condition, occurrence or
event which, after notice or lapse of time or both, would constitute an Event
of Default.
"Defaulting Lender" means any Lender which defaults in its obligation
to make any Credit Extension hereunder in accordance with Section 2.1.1 or 2.1.2
as a result of the appointment of a receiver or conservator with respect to such
Lender at the direction or request of any regulatory agency or authority.
"Disbursement" is defined in Section 2.6.2.
"Disbursement Date" is defined in Section 2.6.2.
"Disbursement Due Date" is defined in Section 2.6.2.
"Disclosure Schedule" means the Disclosure Schedule attached hereto as
Schedule I, as it may be amended, supplemented, amended and restated or
otherwise modified from time to time by the Borrowers with the written consent
of the Required Lenders.
"Disposition" (or similar words such as "Dispose") means any sale,
transfer, lease, contribution or other conveyance (including by way of merger)
of, or the granting of options, warrants or other rights to, either of the
Borrower's or their respective Subsidiaries' assets (including accounts
receivables and Capital Securities of Subsidiaries) to any other Person in a
single transaction or series of transactions; provided that the term
"Disposition" shall not include any Permitted Equity Exchange.
"DLJMB" is defined in clause (c) of the third recital.
"DLJMB Related Party" means (i) any controlling stockholder, majority
(or more) owned Subsidiary, or immediate family member (in the case of an
individual) of DLJMB; or (ii) any trust, corporation, partnership or other
entity, the beneficiaries, stockholders, partners, owners or Persons
beneficially holding a majority or more controlling interest of which consist
of DLJMB and/or such other Persons referred to in the immediately preceding
clause (i).
"Documentation Agent" is defined in the preamble.
"Dollar" and the sign "$" mean lawful money of the United States.
"Domestic Office" means the office of a Lender designated as its
"Domestic Office" on its signature page hereto or in a Lender Assignment
Agreement, or such other office within the United States as may be designated
from time to time by notice from such Lender to the Agents and the Borrowers.
"Domestic Subsidiary" means any Subsidiary that is not a Foreign
Subsidiary.
-17-
"EAC III" is defined in clause (a) of the third recital.
"EBITDA" means, for any applicable period, the sum of
(a) the excess of (i) Net Income (excluding any non-cash
revenues included in the computation of Net Income) over (ii)
Restricted Payments permitted under clauses (c) and (d) of Section
7.2.6,
plus
(b) to the extent deducted in determining Net Income, the sum
of (i) amounts attributable to amortization, (ii) income tax expense,
(iii) Interest Expense, (iv) depreciation of assets and (v) other
non-cash, non-recurring charges.
plus
"Environmental Laws" means all applicable federal, state or local
statutes, laws, ordinances, codes, rules and regulations (including consent
decrees and administrative orders) relating to the protection of the
environment.
"Equity Issuances" is defined in clause (d) of the third recital.
"Equity Securities" is defined in clause (d) of the third recital.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to Sections of ERISA also refer to any successor Sections thereto.
"Event of Default" is defined in Section 8.1.
"Excess Cash Flow" means, for any Fiscal Year, the excess (if any) of
(a) EBITDA for such Fiscal Year
over
(b) the sum (for such Fiscal Year), without duplication, of
(i) Interest Expense actually paid in cash by Holdings, the Borrowers
and their respective Subsidiaries, (ii) scheduled principal repayments,
to the extent actually made, of Term Loans pursuant to clauses (c) and
(d) of Section 3.1.1, and other voluntary or mandatory prepayments of
Term Loans or repayments of Revolving Loans (accompanied by a permanent
commitment reduction), (iii) all income taxes actually paid in cash by
Holdings, the Borrowers and their respective Subsidiaries, (iv) Capital
Expenditures actually made by the Borrowers and their respective
Subsidiaries in such Fiscal Year, (v) Investments permitted to be made
and actually made in cash pursuant to clause (d), (g) or (i) of Section
7.2.5, by the Borrowers and their respective Subsidiaries in such
Fiscal Year, (vi) Restricted Payments of the types described in clauses
(b), (c), (d), and (f) (other than Restricted Payments made by WRC in
respect of the WRC Mirror PIK Preferred Equity that are used by
Holdings to make scheduled payments of dividends on the PIK Preferred
Equity to WRC) of Section 7.2.6 that are permitted to be made and
actually made in cash during such Fiscal Year and (vii) payments of
interest described in Section 7.2.8(a)(i) that are permitted to be made
and actually made in cash during such Fiscal Year;
-18-
minus (plus)
(c) the amount of the net increase (decrease) of Current
Assets, other than cash and Cash Equivalent Investments, over Current
Liabilities of Holdings, the Borrowers and their respective
Subsidiaries for such applicable period.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exemption Certificate" is defined in clause (e) of Section 4.6.
"Existing Credit Agreement" is defined in the Amendment Agreement.
"Existing Revolving Loans" means the Revolving Loans held by the
Lenders under the Existing Credit Agreement.
"Existing Term A Loans" means the Term A Loans held by the Lenders
under the Existing Credit Agreement.
"Existing Term Loans" means collectively, the Existing Term A Loans and
the Term B Loans.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to
(a) the weighted average of the rates on overnight federal
funds transactions with members of the Federal Reserve System arranged
by federal funds brokers, as published for such day (or, if such day is
not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York; or
(b) if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three federal
funds brokers of recognized standing selected by it.
-19-
"Fee Letters" means the confidential letters (i) dated October 26,
1999, among CSFB, BofA and Ripplewood, (ii) dated May 9, 2001, among CSFB,
BofA, GECC, Holdings and the Borrowers and (iii) dated May 9, 2001, among CSFB,
Holdings and the Borrowers.
"Financed Acquisition" is defined in the first recital.
"Fiscal Quarter" means a quarter ending on the last day of March, June,
September or December.
"Fiscal Year" means any period of twelve consecutive calendar months
ending on December 31; references to a Fiscal Year with a number corresponding
to any calendar year (e.g., the "2001 Fiscal Year") refer to the Fiscal Year
ending on December 31 of such calendar year.
"Fixed Charge Coverage Ratio" means, as of the close of any Fiscal
Quarter, the ratio computed for the period consisting of such Fiscal Quarter and
each of the three immediately preceding Fiscal Quarters of:
(a) EBITDA (for all such Fiscal Quarters);
to
(b) the sum (for all such Fiscal Quarters), without
duplication, of (i) Interest Expense for such period, (ii) Capital
Expenditures of the Borrowers and their respective Subsidiaries made
during such period, (iii) scheduled principal repayments of
Indebtedness made during such period (including repayments of the Term
Loans pursuant to clauses (c) and (d) of Section 3.1.1, after giving
effect to any reductions in such scheduled principal repayments
attributable to any optional or mandatory prepayments of the Term
Loans), (iv) all income taxes actually paid in cash by Holdings, the
Borrowers and their respective Subsidiaries, (v) Restricted Payments of
the types described in clauses (b) and (f) (other than Restricted
Payments made by WRC in respect of the WRC Mirror PIK Preferred Equity
that are used by Holdings to make scheduled payments of dividends on
the PIK Preferred Equity to WRC) of Section 7.2.6 actually made during
such applicable period and (vi) payments of interest described in
Section 7.2.8(a)(i) that are actually made during such applicable
period.
"Foreign Pledge Agreement" means any supplemental pledge agreement
governed by the laws of a jurisdiction other than the United States or a State
thereof executed and delivered by either Borrower or any of its Subsidiaries
pursuant to the terms of this Agreement, in form and substance satisfactory to
the Agents, as may be necessary or desirable under the laws of organization or
incorporation of a Subsidiary to further protect or perfect the Lien on and
security interest in any Collateral (as defined in the Security and Pledge
Agreement).
-20-
"Foreign Subsidiary" means any Subsidiary of Holdings (a) which is
organized under the laws of any jurisdiction outside of the United States of
America, (b) which conducts the major portion of its business outside of the
United States of America and (c) all or substantially all of the property and
assets of which are located outside of the United States of America.
"F.R.S. Board" means the Board of Governors of the Federal Reserve
System or any successor thereto.
"GAAP" is defined in Section 1.4.
"GECC" is defined in the preamble.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantor" means, as the context may require, Holdings and/or each
Subsidiary Guarantor.
"Hazardous Material" means
(a) any "hazardous substance", as defined by CERCLA;
(b) any "hazardous waste", as defined by the Resource
Conservation and Recovery Act, as amended; or
(c) any pollutant or contaminant or hazardous, dangerous or
toxic chemical, material or substance (including any petroleum product)
within the meaning of any other applicable Environmental Law.
"Hedging Obligations" means, with respect to any Person, all
liabilities of such Person under currency exchange agreements, interest rate
swap agreements, interest rate cap agreements and interest rate collar
agreements, and all other agreements or arrangements designed to protect such
Person against fluctuations in interest rates or currency exchange rates.
"herein", "hereof", "hereto", "hereunder" and similar terms contained
in any Loan Document refer to such Loan Document as a whole and not to any
particular Section, paragraph or provision of such Loan Document.
"Holdings" is defined in the preamble.
-21-
"Holdings Certificate of Designation" means that certain Certificate of
Designation, Performance and Rights of 15% Senior Preferred Stock due 2011 of
Holdings, dated November 16, 1999 and made pursuant to Section 151 of the
General Corporation Law of the State of Delaware.
"Holdings Junior Certificate of Designation" means that certain
Certificate of Designations, Performance and Rights of Junior Participating
Cumulative Convertible Preferred Stock of Holdings, dated May 8, 2001 and made
pursuant to Section 151 of the General Corporation Law of the State of Delaware.
"Holdings (Unit) Common Stock" is defined in clause (b) of the third
recital.
"Impermissible Qualification" means any qualification or exception to
the opinion or certification of any independent public accountant as to any
financial statement of Holdings or either Borrower
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of examination of
matters relevant to such financial statement; or
(c) which relates to the treatment or classification of any
item in such financial statement and which, as a condition to its
removal, would require an adjustment to such item the effect of which
would be to cause Holdings or such Borrower to be in Default.
"including" and "include" means including without limiting the
generality of any description preceding such term, and, for purposes of each
Loan Document, the parties hereto agree that the rule of ejusdem generis shall
not be applicable to limit a general statement, which is followed by or
referable to an enumeration of specific matters, to matters similar to the
matters specifically mentioned.
"Indebtedness" of any Person means, without duplication:
(a) all obligations of such Person for borrowed money or
advances and all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments;
(b) all obligations, contingent or otherwise, relative to the
face amount of all letters of credit, whether or not drawn, and
banker's acceptances issued for the account of such Person;
(c) all Capitalized Lease Liabilities of such Person;
-22-
(d) net termination value of such Person under all of its
Hedging Obligations as if such Hedging Obligations were terminated on
the date of the determination of the amount of Indebtedness;
(e) whether or not so included as liabilities in accordance
with GAAP, all obligations of such Person to pay the deferred purchase
price of property or services excluding trade accounts payable in the
ordinary course of business which are not overdue for a period of more
than 90 days or, if overdue for more than 90 days, as to which a
dispute exists and adequate reserves in conformity with GAAP have been
established on the books of such Person, and indebtedness secured by
(or for which the holder of such indebtedness has an existing right,
contingent or otherwise, to be secured by) a Lien on property owned or
being acquired by such Person (including indebtedness arising under
conditional sales or other title retention agreements), whether or not
such indebtedness shall have been assumed by such Person or is limited
in recourse;
(f) obligations of such Person arising under Synthetic Leases;
(g) Redeemable Capital Stock of such Person; and
(h) all Contingent Liabilities of such Person in respect of
any of the foregoing.
The Indebtedness of any Person shall include the Indebtedness of any other
entity (including any partnership in which such Person is a general partner) to
the extent such Person is liable therefor as a result of such Person's
ownership interest in or other relationship with such entity, except to the
extent the terms of such Indebtedness provide that such Person is not liable
therefor.
"Indemnified Liabilities" is defined in Section 11.4.
"Indemnified Parties" is defined in Section 11.4.
"Interco Subordination Agreement" means the Intercompany Subordination
Agreement, substantially in the form of Exhibit K hereto, executed and delivered
by two or more Obligors pursuant to the terms of this Agreement, as amended,
supplemented, amended and restated or otherwise modified from time to time.
"Intercompany Note" means, with respect to Holdings, either Borrower or
any of their respective Subsidiaries, as the maker thereof, a promissory note
substantially in the form of Exhibit A to the Security and Pledge Agreement
(with such modifications as the Administrative Agent may consent to, such
consent not to be unreasonably withheld), which promissory note shall evidence
all intercompany loans which may be made from time to time by the payee
thereunder to such maker and shall be duly endorsed and pledged by the payee in
favor of the Administrative Agent.
-23-
"Interest Expense" means, for any period, the aggregate interest
expense (both accrued and paid) of Holdings, the Borrowers and their respective
Subsidiaries for such period, including the portion of any payments made in
respect of Capitalized Lease Liabilities allocable to interest expense (net of
interest income and net payments under Hedging Obligations relating to interest
rate swaps, caps or collars paid during such period to the Borrowers and their
respective Subsidiaries) or made in respect of Hedging Obligations relating to
interest rate swaps, caps or collars; provided that, with respect to
calculations of the Leverage Ratio and the Fixed Charge Coverage Ratio, there
shall be excluded from interest expense of Holdings for any period the interest
expense of all Unrestricted Subsidiaries for such period.
"Interest Period" means, relative to any LIBO Rate Loan, the period
beginning on (and including) the date on which such LIBO Rate Loan is made or
continued as, or converted into, a LIBO Rate Loan pursuant to Sections 2.3 or
2.4 and shall end on (but exclude) the day which numerically corresponds to such
date one, two, three, six months or, if then generally available to each
applicable Lender, nine or twelve months thereafter (or, if such month has no
numerically corresponding day, on the last Business Day of such month), as the
applicable Borrower may select in its relevant notice pursuant to Sections 2.3
or 2.4; provided, however, that
(a) such Borrower shall not be permitted to select Interest
Periods to be in effect at any one time which have expiration dates
occurring on more than ten different dates;
(b) if such Interest Period would otherwise end on a day which
is not a Business Day, such Interest Period shall end on the next
following Business Day (unless such next following Business Day is the
first Business Day of a calendar month, in which case such Interest
Period shall end on the Business Day next preceding such numerically
corresponding day); and
(c) no Interest Period for any Loan may end later than the
Stated Maturity Date for such Loan.
"Investment" means, relative to any Person,
(a) any loan, advance or extension of credit made by such
Person to any other Person, including the purchase by such Person of
any bonds, notes, debentures or other debt securities of any other
Person; and
(b) any Capital Securities held by such Person in any other
Person.
The amount of any Investment shall be the original principal or capital amount
thereof less all returns of principal or equity thereon and shall, if made by
the transfer or exchange of property other than cash, be deemed to have been
made in an original principal or capital amount equal to the fair market value
of such property at the time of such Investment.
-24-
"ISP Rules" is defined in Section 11.9.
"Issuance Request" means a Letter of Credit request and certificate
duly executed by an Authorized Officer of the applicable Borrower,
substantially in the form of Exhibit B-2 hereto.
"Issuer" means the Administrative Agent in its capacity as Issuer of
the Letters of Credit. At the request of the Administrative Agent and with the
Borrowers' consent (not to be unreasonably withheld), another Lender or an
Affiliate of the Administrative Agent may issue one or more Letters of Credit
hereunder.
"Junior Preferred Stock" means the shares of junior participating
cumulative convertible preferred stock of Holdings issued pursuant to the
Holdings Junior Certificate of Designations.
"Landlord Waiver" means an agreement in favor of the Administrative
Agent, for the benefit of the Secured Parties, in form and substance reasonably
satisfactory to the Agents.
"Lender Assignment Agreement" means an assignment agreement
substantially in the form of Exhibit L hereto.
"Lenders" is defined in the preamble and includes each Person that
becomes a Lender pursuant to Section 11.11.1.
"Lender's Environmental Liability" means any and all losses,
liabilities, obligations, penalties, claims, litigation, demands, defenses,
costs, judgments, suits, proceedings, damages (including consequential damages),
disbursements or expenses of any kind or nature whatsoever (including reasonable
attorneys' fees at trial and appellate levels and experts' fees and
disbursements and expenses incurred in investigating, defending against or
prosecuting any litigation, claim or proceeding) which may at any time be
imposed upon, incurred by or asserted or awarded against either Agent, any
Lender or any Issuer or any of such Person's Affiliates, shareholders,
directors, officers, employees, and agents in connection with or arising from:
(a) any Hazardous Material on, in, under or affecting all or
any portion of any property of Holdings, either Borrower or any of
their respective Subsidiaries, the groundwater thereunder, or any
surrounding areas thereof to the extent caused by Releases from
Holdings', either Borrower's or any of their respective Subsidiaries'
or any of their respective predecessors' properties;
(b) any misrepresentation, inaccuracy or breach of any
warranty, contained or referred to in Section 6.12;
(c) any violation or claim of violation by Holdings, either
Borrower or any of their respective Subsidiaries of any Environmental
Laws; or
-25-
(d) the imposition of any lien for damages caused by or the
recovery of any costs for the cleanup, release or threatened release of
Hazardous Material by Holdings, either Borrower or any of their
respective Subsidiaries, or in connection with any property owned or
formerly owned by Holdings, either Borrower or any of their respective
Subsidiaries.
"Letter of Credit" is defined in Section 2.1.2.
"Letter of Credit Commitment" means, with respect to an Issuer, such
Issuer's obligation to issue Letters of Credit pursuant to Section 2.1.2 and,
with respect to each Revolving Loan Lender, the obligations of each such Lender
to participate in such Letters of Credit pursuant to Section 2.6.1.
"Letter of Credit Commitment Amount" means, on any date, a maximum
amount of $5,000,000, as such amount may be permanently reduced from time to
time pursuant to Section 2.2.
"Letter of Credit Outstandings" means, on any date, an amount equal to
the sum of (i) the then aggregate amount which is undrawn and available under
all issued and outstanding Letters of Credit, and (ii) the then aggregate amount
of all unpaid and outstanding Reimbursement Obligations.
"Leverage Ratio" means, as of the last day of any Fiscal Quarter, the
ratio of
(a) Total Debt outstanding on the last day of such Fiscal
Quarter to
(b) EBITDA computed for the period consisting of such Fiscal
Quarter and each of the three immediately preceding Fiscal Quarters.
"LIBO Rate" means, relative to any Interest Period for LIBO Rate Loans,
the interest rate per annum for deposits in Dollars, if any, for a period equal
to the relevant Interest Period which appears on Telerate Page 3750 at
approximately 11:00 a.m., London time, prior to the commencement of such
Interest Period. If such a rate does not appear on Telerate Page 3750, the LIBO
Rate shall be the rate of interest equal to the average (rounded, if necessary,
to the nearest 1/100 of 1%) of the rates per annum at which Dollar deposits in
immediately available funds are offered to the Administrative Agent's LIBOR
Office in the London interbank market as at or about 11:00 a.m. London, England
time two Business Days prior to the beginning of such Interest Period for
delivery on the first day of such Interest Period, and in an amount
approximately equal to the amount of the Administrative Agent's LIBO Rate Loan
and for a period approximately equal to such Interest Period.
-26-
"LIBO Rate Loan" means a Loan bearing interest, at all times during an
Interest Period applicable to such Loan, at a rate of interest determined by
reference to the LIBO Rate (Reserve Adjusted).
"LIBO Rate (Reserve Adjusted)" means, relative to any Loan to be made,
continued or maintained as, or converted into, a LIBO Rate Loan for any Interest
Period, a rate per annum (rounded, if necessary, to the nearest 1/100 of 1%)
determined pursuant to the following formula:
LIBO Rate = LIBO Rate
---------------- -------------------------------
(Reserve Adjusted) 1.00 - LIBOR Reserve Percentage
The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO Rate Loans
will be determined by the Administrative Agent on the basis of the LIBOR Reserve
Percentage in effect two Business Days before the first day of such Interest
Period.
"LIBOR Office" means the office of a Lender designated as its "LIBOR
Office" on Schedule II to the Existing Credit Agreement, in the Amendment
Agreement or in a Lender Assignment Agreement, or such other office designated
from time to time by notice from such Lender to the Borrowers and the Agents,
whether or not outside the United States, which shall be making or maintaining
the LIBO Rate Loans of such Lender.
"LIBOR Reserve Percentage" means, relative to any Interest Period for
LIBO Rate Loans, the reserve percentage (expressed as a decimal) equal to the
maximum aggregate reserve requirements (including all basic, emergency,
supplemental, marginal and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve requirements)
specified under regulations issued from time to time by the F.R.S. Board and
then applicable to assets or liabilities consisting of or including
"Eurocurrency Liabilities", as currently defined in Regulation D of the F.R.S.
Board, having a term approximately equal or comparable to such Interest Period.
"Lien" means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property, or other priority or preferential
arrangement of any kind or nature whatsoever, to secure payment of a debt or
performance of an obligation.
"Lifetime" is defined in clause (a) of the second recital.
"▇▇▇▇▇" is defined in the fifth recital.
"▇▇▇▇▇ Acquisition" is defined in the fifth recital.
"▇▇▇▇▇ Agreement" is defined in the fifth recital.
-27-
"Loan" means, as the context may require, a Revolving Loan, a Term Loan
(including Additional Term A Loans) or a Swing Line Loan of any type.
"Loan Documents" collectively means this Agreement, the Amendment
Agreement, the Letters of Credit, each Secured Hedging Agreement, the Interco
Subordination Agreement, the Fee Letters, each agreement pursuant to which the
Administrative Agent is granted a Lien to secure the Obligations, each Credit
Extension Request and each other agreement which specifies that it is a Loan
Document and to which Holdings, either Borrower or any Subsidiary Guarantor is
a signatory.
"Management Fees" means all management and similar fees payable to any
Person (including Ripplewood) by Holdings, either Borrower or any Subsidiary.
"Material Adverse Effect" means a material adverse effect on (i) the
business, assets, condition (financial or otherwise), operations, performance,
properties or Projections of Holdings, the Borrowers and their respective
Subsidiaries, taken as a whole, (ii) the rights and remedies of any Secured
Party under any Loan Document or (iii) the ability of any Obligor to perform its
material Obligations under any Loan Document.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Mortgage" means each mortgage, deed of trust or agreement executed and
delivered by any Obligor in favor of the Administrative Agent for the benefit of
the Secured Parties pursuant to the requirements of this Agreement in
substantially the form of Exhibit I-1 or Exhibit I-2 hereto, as applicable,
under which a Lien is granted on the real property and fixtures described
therein, in each case as amended, supplemented, amended and restated or
otherwise modified from time to time.
"Net Debt Proceeds" means, with respect to the incurrence, sale or
issuance by Holdings, either Borrower or any of their respective Subsidiaries of
any Indebtedness (other than Indebtedness permitted by Section 7.2.2), the
excess of:
(a) the gross cash proceeds received by Holdings, such
Borrower or such Subsidiaries from such incurrence, sale or issuance,
over
(b) all reasonable and customary underwriting commissions and
legal, investment banking, brokerage and accounting and other
professional fees, sales commissions and disbursements actually
incurred in connection with such incurrence, sale or issuance which
have not been paid to Affiliates of Holdings or either Borrower in
connection therewith.
-28-
"Net Disposition Proceeds" means, with respect to any Disposition of
any assets of Holdings, either Borrower or any of their respective Subsidiaries
(other than pursuant to a Permitted Asset Disposition of the type not described
in clause (f) of the definition thereof), the excess of
(a) the gross cash proceeds received by Holdings, such
Borrower or such Subsidiaries from any such Disposition and any cash
payments received in respect of promissory notes or other non-cash
consideration delivered to such Person in respect thereof,
over
(b) the sum (without duplication) of (i) all reasonable and
customary legal, investment banking, brokerage and accounting and other
professional fees and disbursements actually incurred in connection
with such Disposition which have not been paid to Affiliates of
Holdings or either Borrower in connection therewith, (ii) all taxes and
other governmental costs and expenses actually paid or estimated by
such Person (in good faith) to be payable in cash in connection with
such Disposition, (iii) payments made by such Person to retire
Indebtedness (other than the Credit Extensions) of such Person where
payment of such Indebtedness is required in connection with such
Disposition and (iv) reserves for purchase price adjustments and
retained fixed liabilities that are payable by such Borrower or such
Subsidiary in cash to the extent required under GAAP in connection with
such Disposition;
provided, however, that if, after the payment of all taxes, purchase price
adjustments and retained fixed liabilities with respect to such Disposition, the
amount of estimated taxes, if any, pursuant to clause (b)(ii) above exceeded the
amount of taxes, purchase price adjustments and retained fixed liabilities
actually paid in cash in respect of such Disposition, the aggregate amount of
such excess shall, at such time, constitute Net Disposition Proceeds.
"Net Equity Proceeds" means with respect to the sale or issuance by
Holdings, either Borrower or any of their respective Subsidiaries to any Person
(other than Holdings, either Borrower or any of their respective Subsidiaries)
of any Capital Securities, warrants or options (other than the sale or issuance
by Holdings to EAC III or SGC Partners II LLC of Junior Preferred Stock or
Holdings common stock, to the extent the proceeds of such sale or issuance are
used to make Investments pursuant to and in compliance with Sections 7.2.5
(h)(ii) and 7.2.5(j)) or the exercise of any such warrants or options (other
than pursuant to a Permitted Equity Exchange), the excess of:
(a) the gross cash proceeds received by Holdings, such
Borrower or such Subsidiaries from such sale, exercise or issuance,
over
-29-
(b) all reasonable and customary underwriting commissions and
legal, investment banking, brokerage and accounting and other
professional fees, sales commissions and disbursements actually
incurred in connection with such sale or issuance which have not been
paid to Affiliates of Holdings or either Borrower in connection
therewith.
"Net Income" means, for any period, the aggregate of all amounts
(exclusive of all amounts in respect of any extraordinary gains but including
extraordinary losses) which would be included as net income of Holdings on the
consolidated financial statements of Holdings for such period, provided that,
with respect to calculations of the Leverage Ratio and the Fixed Charge Coverage
Ratio, there shall be excluded from consolidated net income of Holdings for any
period the net income of all Unrestricted Subsidiaries for such period, except
to the extent such net income is actually received in cash by Holdings or any of
its Subsidiaries that are not Unrestricted Subsidiaries during such period
through advances, dividends or other distributions.
"Non-Defaulting Lender" means a Lender that is not a Defaulting Lender.
"Non-Domestic Lender" means any Lender that is not a "United States
person", as defined under Section 7701(a)(30) of the Code.
"Non-Excluded Taxes" means any Taxes other than income, franchise or
similar Taxes imposed on, or measured by, the net income of a Secured Party by a
Governmental Authority in the country or political subdivision therein in which
such Secured Party is organized or in which it maintains its applicable lending
office or in any other jurisdiction to which a Secured Party has any contact
constituting a basis for the imposition of such Taxes, other than a contact
arising solely from the Secured Party having executed, delivered, or performed
its obligations under, or received a payment under, or enforced this Agreement
or any other Loan Document.
"Non-Recourse Debt" means Indebtedness (i) no default with respect to
which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness of Holdings,
either Borrower or any of the Restricted Subsidiaries to declare a default on
such other Indebtedness or cause the payment thereof to be accelerated or
payable prior to its stated maturity, and (ii) as to which the lenders of such
Indebtedness have been notified in writing that they will not have any recourse
to the Capital Securities or assets of Holdings, either Borrower or any of the
Restricted Subsidiaries (other than Capital Securities of Unrestricted
Subsidiaries pledged by either Borrower or a Restricted Subsidiary to secure
Debt of such Unrestricted Subsidiary).
"Note" means, as the context may require, a Revolving Note, a Term A
Note, a Term B Note or a Swing Line Note.
"Obligations" means all obligations (monetary or otherwise, whether
absolute or contingent, matured or unmatured) of Holdings, each Borrower and
each other Obligor arising under or in connection with a Loan Document,
including the principal of and premium, if any, and interest (including interest
accruing during the pendency of any proceeding of the type described in Section
8.1.9, whether or not allowed in such proceeding) on the Loans and all
Reimbursement Obligations.
-30-
"Obligor" means, as the context may require, Holdings, each Borrower
and each other Person (other than a Secured Party and the Seller) obligated
under any Loan Document and their permitted successors and assigns.
"OECD" means the Organization for Economic Cooperation and Development.
"Offering Memorandum" means the Offering Memorandum, dated November 10,
1999, captioned "$152,000,000, WRC Media Inc., 152,000 Units Consisting of 12
3/4% Senior Subordinated Notes due 2009 of WRC Media Inc., Weekly Reader
Corporation and JLC Learning Corporation, and 205,656 Shares of common Stock of
WRC Media Inc."
"Organic Document" means, relative to any Obligor or the Seller, as
applicable, its certificate of incorporation, by-laws, certificate of
partnership, partnership agreement, certificate of formation, limited liability
agreement and all certificates of designation, shareholder agreements, voting
trusts and similar arrangements applicable to any of such Obligor's or the
Seller's partnership interests, limited liability company interests or
authorized shares of Capital Securities.
"Other Taxes" means any and all stamp, documentary or similar taxes, or
any other excise or property taxes or similar levies that arise on account of
the execution, delivery, registration, recording or enforcement of any Loan
Document.
"Participant" is defined in Section 11.11.2.
"Patent Security Agreement" means any Patent Security Agreement
executed and delivered by any Obligor in substantially the form of Exhibit B to
the Security and Pledge Agreement, as amended, supplemented, amended and
restated or otherwise modified from time to time.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Pension Plan" means a "pension plan", as such term is defined in
Section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a
multiemployer plan as defined in Section 4001(a)(3) of ERISA), and to which
Holdings, either Borrower or any corporation, trade or business that is, along
with Holdings or such Borrower, a member of a Controlled Group, may have
liability, including any liability by reason of having been a substantial
employer within the meaning of Section 4063 of ERISA at any time during the
preceding five years, or by reason of being deemed to be a contributing sponsor
under Section 4069 of ERISA.
-31-
"Percentage" means, as the context may require, any Lender's RL
Percentage, Term A Percentage or Term B Percentage.
"Perfection Certificate" means the Perfection Certificate executed and
delivered by an Authorized Officer of each Obligor that is a party to the
Security and Pledge Agreement pursuant to Section 5.1.15 of the Existing Credit
Agreement or 7.1.8, substantially in the form of Exhibit H hereto, as amended,
supplemented, amended and restated or otherwise modified from time to time.
"Permitted Acquisition" means an Acquisition by any of Holdings,
Borrower or any of their respective Restricted Subsidiaries in which the
following conditions are satisfied:
(a) immediately before and after giving effect to such
Acquisition no Specified Default shall have occurred and be continuing
or would result therefrom (including under Section 7.2.1); and
(b) Holdings shall have delivered to the Agents a Compliance
Certificate for the period of four full Fiscal Quarters immediately
preceding such Acquisition (prepared in good faith and in a manner and
using such methodology which is consistent with the most recent
financial statements delivered pursuant to Section 7.1.1) giving pro
forma effect to the consummation of such Acquisition and evidencing
compliance with the covenants set forth in Section 7.2.4.
"Permitted Asset Disposition" means any Disposition consisting of (a)
Dispositions of inventory in the ordinary course of business, (b) Dispositions
of equipment which, in the aggregate during any Fiscal Year, have a fair market
value or book value, whichever is greater, of not more than $1,500,000, (c)
Dispositions of property that is substantially worn, damaged, obsolete or, in
the judgment of either Borrower, no longer best used or useful in its respective
business or that of any of its respective Subsidiaries, (d) leases or subleases
of real property and the licensing of intellectual property in the ordinary
course of business, (e) Dispositions of property to either of the Borrowers or
any of their respective Restricted Subsidiaries or (f) Restricted Asset
Dispositions in a single transaction or series of transactions.
"Permitted Common Stock Exchange" means a Permitted Equity Exchange of
the type set forth in (i) clause (iv) of the definition thereof or (ii) clause
(v) of the definition thereof.
-32-
"Permitted Equity Exchange" means (i) the issuance by CLI or WRC of
common stock upon the exercise of the CLI Warrants or the WRC Warrants,
respectively, (ii) the issuance by CLI and/or WRC of CLI PIK Preferred Equity
and/or WRC PIK I Preferred Equity in exchange for all of the PIK Preferred
Equity, (iii) the issuance by CLI and/or WRC of preferred stock to the holders
of the CLI PIK Preferred Equity and/or the WRC PIK Preferred Equity that is
identical to such CLI PIK Preferred Equity and/or such WRC PIK Preferred Equity,
except that such preferred stock is not subject to restrictions upon transfer
under the federal securities laws, (iv) the issuance of common stock of WRC and
WRC ▇▇▇ ▇▇ Preferred Equity to Holdings pursuant to a transaction permitted
under Section 11.12, (v) the issuance of common stock of WRC in exchange for the
Holdings (Unit) Common Stock (A) in connection with (1) a Public Offering
relating to WRC or (2) to the extent permitted hereunder, the sale of all or
substantially all of the assets of WRC or (B) in connection with a transaction
permitted under Section 11.12 or (vi) in connection with a Public Offering
relating to Holdings, the issuance of common stock of Holdings in exchange for
CLI Warrants (or warrant shares issued by CLI in connection with the exchange of
such CLI Warrants) and/or WRC Warrants (or warrant shares issued by WRC in
connection with the exchange of such WRC Warrants), in each case to the holders
of such Capital Securities so being exchanged.
"Person" means any natural person, corporation, limited liability
company, partnership, joint venture, association, trust or unincorporated
organization, Governmental Authority or any other legal entity, whether acting
in an individual, fiduciary or other capacity.
"PIK Preferred Equity" is defined in clause (c) of the third recital.
"PIK Preferred Equity Holders" is defined in clause (c) of the third
recital.
"PIK Preferred Equity Issuance" is defined in clause (c) of the third
recital.
"Pledged Subsidiary" means each Subsidiary in respect of which the
Administrative Agent has been granted a security interest in or a pledge of (i)
any of the Capital Securities of such Subsidiary or (ii) any intercompany notes
of such Subsidiary owing to either Borrower or another Subsidiary.
"Preferred Stockholders Agreement" is defined in clause (c) of the
third recital.
"PRI" is defined in clause (a) of the second recital.
"Projections" means the projected consolidated financial statements
(including balance sheets and statements of operations, stockholders' equity and
cash flows) of each of Holdings and each Borrower for the four-year period
following the Closing Date, delivered pursuant to clause (a)(iii) of Section
5.1.8 of the Existing Credit Agreement.
"Public Market" shall exist if (i) a Public Offering has been
consummated and (ii) any Capital Securities of Holdings has been distributed by
means of an effective registration statement under the Securities Act of 1933,
as amended.
-33-
"Public Offering" means a public offering of the outstanding Capital
Securities of Holdings or WRC pursuant to an effective registration statement
under the Securities Act of 1933, as amended, resulting in Net Equity Proceeds
of at least $60,000,000.
"Purchase Agreement" is defined in the first recital.
"Quarterly Payment Date" means the last Business Day of March, June,
September and December.
"Redeemable Capital Stock" means, with respect to any Person, any class
of Capital Securities of such Person or any of its Subsidiaries which, either
by its terms, by the terms of any security into which it is convertible or
exchangeable or otherwise, (a) is or upon the happening of an event or passage
of time would be required to be redeemed on or prior to the first anniversary
of the Stated Maturity Date for the Term Loans, (b) is redeemable at the option
of the holder thereof at any time prior to such anniversary or (c) is
convertible into or exchangeable for debt securities of such Person or any of
its Subsidiaries at any time prior to such anniversary.
"Refinancing" is defined in clause (c) of the second recital.
"Refunded Swing Line Loans" is defined in clause (b) of Section 2.3.2.
"Register" is defined in Section 2.7(b).
"Reimbursement Obligation" is defined in Section 2.6.3.
"Related Fund" means, with respect to any Lender that is a fund that
invests in commercial loans, any other fund that invests in commercial loans and
is managed or advised by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"Release" means a "release", as such term is defined in CERCLA.
"Replacement Lender" is defined in Section 4.9.
"Replacement Notice" is defined in Section 4.9.
"Required Lenders" means, at any time, Non-Defaulting Lenders holding
at least 51% of (i) the Total Exposure Amount of Non-Defaulting Lenders or (ii)
if the Revolving Loan Commitment shall have been terminated or expired or for
purposes of acceleration pursuant to Section 8.3, the aggregate principal amount
of the then outstanding Loans and Letter of Credit Outstandings of
Non-Defaulting Lenders.
"Resource Conservation and Recovery Act" means the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., as amended.
-34-
"Responsible Officer" means, with respect to any Person, its chief
executive officer, president or any vice president, managing director, chief
operating officer, chief financial or accounting officer, treasurer, controller
or other officer thereof having substantially the same authority and
responsibility; or, with respect to compliance with financial covenants, the
chief financial or accounting officer, treasurer or controller of such Person,
or any other officer having substantially the same authority and responsibility.
"Restricted Asset Disposition" means any Disposition other than a
Disposition referred to in clauses (a) through (e) of the definition of
Permitted Asset Disposition having an aggregate fair market value or book value,
whichever is greater, of not more than $2,500,000; provided that the proceeds
therefrom shall be applied as provided in Section 3.1.1(e).
"Restricted Payment" means (a) the declaration or payment of any
dividend (other than dividends payable solely in Capital Securities of either
Borrower) on, or the making of any payment or distribution on account of, or
setting apart assets for a sinking or other analogous fund for, the purchase,
redemption, defeasance, retirement or other acquisition of any class of Capital
Securities of either Borrower or any Subsidiary or any warrants or options to
purchase any such Capital Securities, whether now or hereafter outstanding, or
the making of any other distribution in respect thereof, either directly or
indirectly, whether in cash or property, obligations of either Borrower or any
Subsidiary or otherwise, (b) the exchange of the Capital Securities of either
Borrower for the Capital Securities of Holdings other than in connection with a
Permitted Equity Exchange, (c) the making of any Investment in Holdings by any
of its Subsidiaries, or (d) the payment of any Management Fee.
"Restricted Subsidiary" means any Subsidiary of Holdings or either
Borrower that is not an Unrestricted Subsidiary.
"Revolving Loan" is defined in Section 2.1.1.
"Revolving Loan Commitment" means, relative to any Lender, such
Lender's obligation (if any) to make Revolving Loans pursuant to clause (a) of
Section 2.1.1. A Lender shall not have a Revolving Loan Commitment if its RL
Percentage is zero.
"Revolving Loan Commitment Amount" means, on any date, $30,000,000, as
such amount may be reduced from time to time pursuant to Section 2.2.
"Revolving Loan Commitment Termination Date" means the earliest of
(a) December 31, 1999 (if the initial Credit Extension has not
occurred on or prior to such date);
(b) November 17, 2005;
-35-
(c) the date on which the Revolving Loan Commitment Amount is
terminated in full or reduced to zero pursuant to the terms of this
Agreement; and
(d) the date on which any Commitment Termination Event occurs.
Upon the occurrence of any event described in the preceding clause (c) or (d),
the Revolving Loan Commitments shall terminate automatically and without any
further action.
"Revolving Loan Lender" is defined in clause (a) of Section 2.1.1.
"Revolving Note" means a joint and several promissory note of the
Borrowers payable to any Revolving Loan Lender, in the form of Exhibit A-1 to
the Existing Credit Agreement with respect to any such note issued prior to the
Amendment Effective Date or Exhibit A-1 hereto with respect to any such note
issued on or subsequent to the Amendment Effective Date (as such promissory
note may be amended, endorsed or otherwise modified from time to time),
evidencing the aggregate Indebtedness of the Borrowers to such Revolving Loan
Lender resulting from outstanding Revolving Loans, and also means all other
promissory notes accepted from time to time in substitution therefor or renewal
thereof.
"Ripplewood" is defined in clause (a) of the third recital.
"RL Percentage" means, relative to any Lender, the applicable
percentage relating to Revolving Loans hereto, as set forth on Schedule II to
the Existing Credit Agreement, in the Amendment Agreement or in a Lender
Assignment Agreement on file with the Agents, under the Revolving Loan
Commitment column, as such percentage may be adjusted from time to time
pursuant to Lender Assignment Agreements executed by such Lender and its
Assignee Lender and delivered pursuant to Section 11.11.1.
"Rollover Equity" is defined in clause (b) of the second recital.
"S&P" means Standard & Poor's Rating Services, a division of
▇▇▇▇▇▇-▇▇▇▇, Inc.
"SEC" means the Securities and Exchange Commission.
"Secured Hedging Agreements" means, collectively, all currency exchange
agreements, interest rate swap agreements, interest rate cap agreements and
interest rate collar agreements, and all other agreements or arrangements
designed to protect either Borrower or any of its Subsidiaries against
fluctuations in interest rates or currency exchange rates that are entered into
in the ordinary course of business to limit risks of currency or interest rate
fluctuations and not for speculative purposes by such Borrower or any such
Subsidiary and under which the counterparty of such agreement is (or at the time
such agreement was entered into, was) a Lender or an Affiliate of a Lender.
-36-
"Secured Parties" means, collectively, the Lenders, the Issuers, the
Agents, each counterparty to a Secured Hedging Agreement that is (or at the time
such Secured Hedging Agreement was entered into, was) a Lender or an Affiliate
thereof and (in each case), each of their respective successors, transferees and
assigns.
"Security and Pledge Agreement" means the Security and Pledge Agreement
executed and delivered by an Authorized Officer of Holdings, each Borrower and
each Subsidiary Guarantor pursuant to Section 5.1.13 of the Existing Credit
Agreement or 7.1.8, substantially in the form of Exhibit G-1 hereto, as amended,
supplemented, amended and restated or otherwise modified from time to time.
"Seller Pledge Agreement" means the Pledge Agreement executed and
delivered by an Authorized Officer of Seller pursuant to Section 5.1.13 of the
Existing Credit Agreement, substantially in the form of Exhibit G-2 hereto, as
amended, supplemented, amended and restated or otherwise modified from time to
time.
"Seller" is defined in the first recital.
"Solvent" means, with respect to any Person and its Subsidiaries on a
particular date, that on such date (a) the fair value of the property of such
Person and its Subsidiaries on a consolidated basis is greater than the total
amount of liabilities, including contingent liabilities, of such Person and its
Subsidiaries on a consolidated basis, (b) the present fair salable value of the
assets of such Person and its Subsidiaries on a consolidated basis is not less
than the amount that will be required to pay the probable liability of such
Person and its Subsidiaries on a consolidated basis on its debts as they become
absolute and matured, (c) such Person does not intend to, and does not believe
that it or its Subsidiaries will, incur debts or liabilities beyond the ability
of such Person and its Subsidiaries to pay as such debts and liabilities
mature, and (d) such Person and its Subsidiaries on a consolidated basis is not
engaged in business or a transaction, and such Person and its Subsidiaries on a
consolidated basis is not about to engage in business or a transaction, for
which the property of such Person and its Subsidiaries on a consolidated basis
would constitute an unreasonably small capital. The amount of Contingent
Liabilities at any time shall be computed as the amount that, in light of all
the facts and circumstances existing at such time, can reasonably be expected
to become an actual or matured liability.
"Specified Default" means the occurrence and continuance of (a) a
Default under Section 8.1.1 or Section 8.1.9 or (b) any Event of Default.
"Stated Amount" means, on any date and with respect to a particular
Letter of Credit, the total amount then available to be drawn under such Letter
of Credit.
"Stated Expiry Date" is defined in Section 2.6.
-37-
"Stated Maturity Date" means
(a) with respect to all Existing Term A Loans, November 17,
2005;
(b) with respect to all Additional Term A Loans and all Term B
Loans, November 17, 2006; and
(c) with respect to all Revolving Loans and Swing Line Loans,
November 17, 2005.
"Sub Debt Documents" means, collectively, the loan agreements,
indentures, note purchase agreements, promissory notes, guarantees, and other
instruments (including the Subordinated Notes) and agreements evidencing the
terms of Subordinated Debt, as amended, supplemented, amended and restated or
otherwise modified in accordance with Section 7.2.12.
"Subordinated Debt" means unsecured Indebtedness of each Obligor
(including the Indebtedness evidenced by the Subordinated Notes) subordinated in
right of payment to the monetary Obligations pursuant to documentation
containing redemption and other prepayment events, maturities, amortization
schedules, covenants, events of default, remedies, acceleration rights,
subordination provisions and other material terms satisfactory to the Required
Lenders.
"Subordinated Note Issuance" is defined in clause (b) of the third
recital.
"Subordinated Notes" is defined in clause (b) of the third recital.
"Subscription Agreement" means that certain Preferred Stock and
Warrants Subscription Agreement, dated as of November 17, 1999, among Holdings,
WRC, CLI and the buyers named therein.
"Subsidiary" means, with respect to any Person, any corporation,
limited liability company, partnership or other entity of which more than 50% of
the outstanding Voting Securities (irrespective of whether at the time Capital
Securities of any other class or classes of such corporation, limited liability
company, partnership or other entity shall or might have voting power upon the
occurrence of any contingency) is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more other Subsidiaries of
such Person, or by one or more other Subsidiaries of such Person. Unless the
context otherwise specifically requires, the term "Subsidiary" shall be a
reference to a Subsidiary of the applicable Borrower.
"Subsidiary Guarantor" means each Domestic Subsidiary of Holdings or
the Borrowers that has executed and delivered to the Administrative Agent the
Subsidiary Guaranty (or a supplement thereto).
-38-
"Subsidiary Guaranty" means the subsidiary guaranty executed and
delivered by each Subsidiary Guarantor pursuant to the terms of the Existing
Credit Agreement, a copy of which is attached hereto as Exhibit J or Section
7.1.8, substantially in the form of Exhibit J hereto, in each case, as amended,
supplemented, amended and restated or otherwise modified from time to time.
"Swing Line Lender" means, subject to the terms of this Agreement, the
Administrative Agent.
"Swing Line Loan" is defined in clause (b) of Section 2.1.1.
"Swing Line Loan Commitment" is defined in clause (b) of Section 2.1.1.
"Swing Line Loan Commitment Amount" means, on any date, $5,000,000, as
such amount may be reduced from time to time pursuant to Section 2.2.
"Swing Line Note" means a joint and several promissory note of the
Borrowers payable to the Swing Line Lender, in the form of Exhibit A-4 to the
Existing Credit Agreement with respect to any such note issued prior to the
Amendment Effective Date or Exhibit A-4 hereto with respect to any such note
issued on or subsequent to the Amendment Effective Date (as such promissory note
may be amended, endorsed or otherwise modified from time to time), evidencing
the aggregate Indebtedness of the Borrowers to the Swing Line Lender resulting
from outstanding Swing Line Loans, and also means all other promissory notes
accepted from time to time in substitution therefor or renewal thereof.
"Syndication Agent" is defined in the preamble.
"Synthetic Lease" means, as applied to any Person, any lease (including
leases that may be terminated by the lessee at any time) of any property
(whether real, personal or mixed) (i) that is not a capital lease in accordance
with GAAP and (ii) in respect of which the lessee retains or obtains ownership
of the property so leased for federal income tax purposes, other than any such
lease under which that Person is the lessor.
"Tax Sharing Agreement" means the Tax Sharing Agreement, dated November
17, 1999, among Holdings and each of its Subsidiaries, as the same may be
amended, supplemented, amended and restated or otherwise modified from time to
time in accordance with the terms thereof.
"Taxes" means any and all income, stamp or other taxes, duties, levies,
imposts, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority, and all
interest, penalties or similar liabilities with respect thereto.
-39-
"Telerate Page 3750" means the display designated as "Page 3750" on the
Telerate Service (or such other page as may replace Page 3750 on the service or
such other service as may be nominated by the British Bankers' Association as
the information vendor for the purpose of displaying British Bankers'
Association interest settlement rates for Dollar deposits).
"Term A Loans" is defined in clause (a) of Section 2.1.1.
"Term A Note" means a joint and several promissory note of the
Borrowers payable to any Lender, in the form of Exhibit A-2 to the Existing
Credit Agreement with respect to any such note issued prior to the Amendment
Effective Date or Exhibit A-2 hereto with respect to any such note issued on or
subsequent to the Amendment Effective Date (as such promissory note may be
amended, endorsed or otherwise modified from time to time), evidencing the
aggregate Indebtedness of the Borrowers to such Lender resulting from
outstanding Term A Loans, and also means all other promissory notes accepted
from time to time in substitution therefor or renewal thereof.
"Term A Percentage" means, relative to any Lender, the applicable
percentage relating to Term A Loans hereto as set forth on Schedule II to the
Existing Credit Agreement, in the Amendment Agreement or in a Lender Assignment
Agreement on file with the Agents hereto under the Term A Loan column or set
forth in a Lender Assignment Agreement, under the Term A Loan column, as such
percentage may be adjusted from time to time pursuant to Lender Assignment
Agreements executed by such Lender and its Assignee Lender and delivered
pursuant to Section 11.11.1.
"Term B Loans" mean the Term B Loans held by the Lenders under the
Existing Credit Agreement continued hereunder.
"Term B Note" means a joint and several promissory note of the
Borrowers payable to any Lender, in the form of Exhibit A-3 to the Existing
Credit Agreement (as such promissory note may be amended, endorsed or otherwise
modified from time to time), evidencing the aggregate Indebtedness of the
Borrowers to such Lender resulting from outstanding Term B Loans, and also means
all other promissory notes accepted from time to time in substitution therefor
or renewal thereof.
"Term B Percentage" means, relative to any Lender, the applicable
percentage relating to Term B Loans as set forth on Schedule II to the Existing
Credit Agreement, in the Amendment Agreement or in a Lender Assignment Agreement
on file with the Agents, under the Term B Loan column, as such percentage may be
adjusted from time to time pursuant to Lender Assignment Agreements executed by
such Lender and its Assignee Lender and delivered pursuant to Section 11.11.1.
"Term Loans" means, collectively, the Term A Loans and the Term B
Loans.
-40-
"Termination Date" means the date on which all monetary Obligations
have been paid in full in cash, all Letters of Credit have been terminated or
expired (or the Administrative Agent shall have received immediately available
funds in an amount equal to all Letter of Credit Outstandings, deposited in a
cash collateral account with the Administrative Agent or its designee on terms
satisfactory to the Administrative Agent), all Secured Hedging Agreements have
been terminated and all Commitments shall have terminated.
"ThinkBox" is defined in the seventh recital.
"ThinkBox Agreement" is defined in the seventh recital.
"ThinkBox Investment" is defined in the seventh recital.
"Total Debt" means, on any date, the outstanding principal amount of
all Indebtedness of Holdings, the Borrowers and their respective Restricted
Subsidiaries of the type referred to in clause (a), clause (b), clause (c),
clause (f) and clause (g), in each case of the definition of "Indebtedness" and
any Contingent Liability in respect of any of the foregoing.
"Total Exposure Amount" means, on any date of determination (and
without duplication), the outstanding principal amount of all Loans, the
aggregate amount of all Letter of Credit Outstandings and the unfunded amount
of the Commitments.
"Trademark Security Agreement" means any Trademark Security Agreement
executed and delivered by any Obligor substantially in the form of Exhibit C to
the Security and Pledge Agreement, as amended, supplemented, amended and
restated or otherwise modified from time to time.
"Tranche" means, as the context may require, the Loans constituting
Term A Loans, Term B Loans, Revolving Loans or Swing Line Loans.
"Transaction" is defined in clause (c) of the second recital.
"Transaction Documents" means the Purchase Agreement, the ▇▇▇▇▇
Agreement, the ChildU Agreement, the ThinkBox Agreement, the Organic Documents
of each Borrower and Holdings, the Sub Debt Documents, the Preferred
Stockholders Agreement, the Subscription Agreement, the Certificates of
Designation, the Units Shareholders Agreement and the Tax Sharing Agreement, in
each case as amended, supplemented, amended and restated or otherwise modified
from time to time in accordance with Section 7.2.12.
"type" means, relative to any Loan, the portion thereof, if any, being
maintained as a Base Rate Loan or a LIBO Rate Loan.
-41-
"U.C.C." means the Uniform Commercial Code as in effect from time to
time in the State of New York; provided, that if, with respect to any Filing
Statement or by reason of any provisions of law, the perfection or the effect of
perfection or non-perfection of the security interests granted to the
Administrative Agent pursuant to the applicable Loan Document is governed by the
Uniform Commercial Code as in effect in a jurisdiction of the United States
other than New York, U.C.C. means the Uniform Commercial Code as in effect from
time to time in such other jurisdiction for purposes of the provisions of this
Agreement, each Loan Document and any Filing Statement relating to such
perfection or effect of perfection or non-perfection.
"Uniform Customs" is defined in Section 11.9.
"United States" or "U.S." means the United States of America, its fifty
states and the District of Columbia.
"Units Shareholders Agreement" means the Stockholders Agreement, dated
as of November 17, 1999, among Holdings, the Borrowers, EAC III, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation and Bank of America Securities LLC, as
the same may be amended, supplemented, amended and restated or otherwise in
accordance with the terms hereof.
"Unrestricted Subsidiary" means ChildU, ThinkBox (upon becoming a
Subsidiary of Holdings) and any Subsidiary of Holdings that is acquired in
compliance with clause (j) of Section 7.2.5 and is designated as an Unrestricted
Subsidiary by a resolution of the Board of Directors of Holdings delivered to
the Administrative Agent, but, in each case, only to the extent that such
Subsidiary (and each of its respective Subsidiaries) (i) has no Indebtedness
other than Non-Recourse Debt and (ii) is a Person with respect to which neither
Holdings, any Borrower nor any of the Restricted Subsidiaries has any direct or
indirect obligation (a) to subscribe for additional Capital Securities or
warrants, options or other rights to acquire Capital Securities or (b) to
maintain or preserve such Person's financial condition or to cause such Person
to achieve any specified levels of operating results. For the purposes hereof,
each Subsidiary of an Unrestricted Subsidiary shall be considered an
Unrestricted Subsidiary. If, at any time, any Unrestricted Subsidiary fails to
meet any of the foregoing requirements as an Unrestricted Subsidiary, it (and
each of its respective Subsidiaries) shall thereafter cease to be an
Unrestricted Subsidiary for purposes hereof. The Board of Directors of Holdings
may, with the consent of the Required Lenders, at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of any outstanding Indebtedness of such Unrestricted Subsidiary and
such designation shall only be permitted if (i) Holdings shall have delivered to
the Agents a Compliance Certificate for the period of four full Fiscal Quarters
immediately preceding such designation (prepared in good faith and in a manner
and using such methodology which is consistent with the most recent financial
statements delivered pursuant to Section 7.1.1) giving pro forma effect to such
designation and evidencing compliance with the covenants set forth in Section
7.2.4 and (ii) no Default or Event of Default would be in existence following
such designation; and provided further that the consent of the Required Lenders
shall not be required in the event that (i) for each of the twelve month periods
ending as of the two Fiscal Quarters immediately preceding the date of such
designation, the sum of (A) net income for such Unrestricted Subsidiary plus (B)
to the extent deducted in determining such net income for such Unrestricted
Subsidiary, the sum of (1) amounts attributable to amortization, (2) income tax
expense, (3) aggregate interest expense (both accrued and paid), (4)
depreciation of assets and (5) other non-cash, non-recurring charges is greater
than zero and (ii) such Unrestricted Subsidiary has no Indebtedness immediately
prior to such designation.
-42-
"Voting Securities" means, with respect to any Person, Capital
Securities of any class or kind ordinarily having the power to vote for the
election of directors, managers or other voting members of the governing body of
such Person.
"Welfare Plan" means a "welfare plan", as such term is defined in
Section 3(1) of ERISA.
"wholly owned" means any Subsidiary all of the outstanding common stock
(or similar equity interest) of which (other than any director's qualifying
shares or investments by foreign nationals mandated by applicable laws) is
owned directly or indirectly by either Borrower.
"WRC" is defined in the preamble.
"WRC Certificate Designation" means (i) that certain Certificate of
Designation of 15% Senior Preferred Stock due 2011 of WRC, dated November 16,
1999 and made pursuant to Section 151 of the General Corporation Law of the
State of Delaware and (ii) each other certificate of designation in
substantially the same form as the certificate of designation described in
clause (i) above and relating to the WRC PIK Preferred Equity.
"WRC Mirror PIK Preferred Equity" is defined in clause (e) of the third
recital.
"WRC PIK Preferred Equity" means, as the context may require, the WRC
PIK I Preferred Equity and/or the WRC ▇▇▇ ▇▇ Preferred Equity, which shall not
have an aggregate liquidation preference exceeding an amount equal to the sum
of (x) $75,000,000, (y) any accrued but unpaid dividends on the PIK Preferred
Equity and (z) the aggregate liquidation preference of additional PIK Preferred
Equity issued in lieu of cash dividends on the PIK Preferred Equity.
"WRC PIK I Preferred Equity" is defined in clause (c) of the third
recital.
"WRC ▇▇▇ ▇▇ Preferred Equity" is defined in clause (c) of the third
recital.
"WRC Warrants" is defined in clause (c) of the third recital.
-43-
SECTION 1.2. Use of Defined Terms. Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings when used in each other Loan Document and
the Disclosure Schedule.
SECTION 1.3. Cross-References. Unless otherwise specified, references
in a Loan Document to any Article or Section are references to such Article or
Section of such Loan Document, and references in any Article, Section or
definition to any clause are references to such clause of such Article, Section
or definition.
SECTION 1.4. Accounting and Financial Determinations. Unless otherwise
specified, all accounting terms used in each Loan Document shall be interpreted,
and all accounting determinations and computations thereunder (including under
Section 7.2.4 and the definitions used in such calculations) shall be made, in
accordance with those generally accepted accounting principles ("GAAP") applied
in the preparation of the financial statements referred to in the Amendment
Agreement and in clause (a) of Section 5.1.8 of the Existing Credit Agreement.
Unless otherwise expressly provided, all financial covenants and defined
financial terms shall be computed on a consolidated basis for Holdings, the
Borrowers and their respective Subsidiaries, in each case without duplication.
ARTICLE II
COMMITMENTS, BORROWING AND ISSUANCE
PROCEDURES, NOTES AND LETTERS OF CREDIT
SECTION 2.1. Commitments. On the terms and subject to the conditions of
this Agreement and the Amendment Agreement (including Article III thereof), the
Lenders and the Issuers severally agree to make Credit Extensions as set forth
below.
SECTION 2.1.1. Continuation of Existing Term Loans; Term Loan
Commitments.
(a) each of the parties hereto acknowledges and agrees that
the Term B Loans shall continue as Term B Loans and the Existing Term A
Loans shall continue as Term A Loans (including Additional Term A
Loans, being the "Term A Loans") for all purposes under this Agreement
and the Loan Documents, with each Lender's share of Term A Loans and
Term B Loans being set forth opposite its name on Schedule II to the
Existing Credit Agreement under the Term A Loan column or the Term B
Loan column, as applicable, or set forth in a Lender Assignment
Agreement under the Term A Loan column or the Term B Loan column, as
applicable, as such amount may be adjusted from time to time pursuant
to the terms hereof;
(b) in a single Borrowing occurring on or prior to the
Additional Term A Loan Commitment Termination Date, each Lender that
has an Additional Term A Loan Commitment will make loans (relative to
such Lender, its "Additional Term A Loan") to the Borrowers in an
amount equal to such Lender's Percentage of the aggregate amount of the
Borrowing of Additional Term A Loans requested by the Borrowers to be
made on such day (with the commitment of each such Lender described in
this clause (b) herein referred to as its "Additional Term A Loan
Commitment").
-44-
No amounts paid or prepaid with respect to Term Loans may be reborrowed.
SECTION 2.1.2. Revolving Loan Commitment and Swing Line Loan
Commitment. Subject to compliance by the Borrowers with the terms of Article III
of the Amendment Agreement and Section 5.2, from time to time on any Business
Day occurring on or after the Amendment Effective Date but prior to the
Revolving Loan Commitment Termination Date,
(a) each Lender that has a Revolving Loan Commitment (referred
to as a "Revolving Loan Lender") agrees that it will make loans
(relative to such Lender, its "Revolving Loans") to the applicable
Borrower equal to such Lender's RL Percentage of the aggregate amount
of each Borrowing of the Revolving Loans requested by such Borrower to
be made on such day; and
(b) the Swing Line Lender agrees that it will make loans (its
"Swing Line Loans") to the applicable Borrower equal to the principal
amount of the Swing Line Loan requested by such Borrower to be made on
such day. The Commitment of the Swing Line Lender described in this
clause is herein referred to as its "Swing Line Loan Commitment".
On the terms and subject to the conditions hereof, each Borrower may from time
to time borrow, prepay and reborrow Revolving Loans and Swing Line Loans. No
Revolving Loan Lender shall be permitted or required to make any Revolving Loan
if, after giving effect thereto, the aggregate outstanding principal amount of
all Revolving Loans of such Revolving Loan Lender, together with such Lender's
RL Percentage of the aggregate amount of all Swing Line Loans and Letter of
Credit Outstandings, would exceed such Lender's RL Percentage of the then
existing Revolving Loan Commitment Amount. Furthermore, the Swing Line Lender
shall not be permitted or required to make Swing Line Loans if, after giving
effect thereto, (i) the aggregate outstanding principal amount of all Swing Line
Loans would exceed the then existing Swing Line Loan Commitment Amount (ii) the
sum of the aggregate amount of all outstanding Swing Line Loans plus the
aggregate amount of all Revolving Loans and Letter of Credit Outstandings would
exceed the Revolving Loan Commitment Amount or (iii) unless otherwise agreed to
by the Swing Line Lender, in its sole discretion, the sum of all Swing Line
Loans and Revolving Loans made by the Swing Line Lender plus the Swing Line
Lender's RL Percentage of the aggregate amount of Letter of Credit Outstandings
would exceed the Swing Line Lender's RL Percentage of the then existing
Revolving Loan Commitment Amount.
SECTION 2.1.3. Letter of Credit Commitment. Subject to compliance by
the Borrowers with the terms of Article III of the Amendment Agreement and
Section 5.2, from time to time on any Business Day occurring on or after the
Amendment Effective Date but prior to the Revolving Loan Commitment Termination
Date, the relevant Issuer agrees that it will
-45-
(a) issue one or more letters of credit (relative to such
Issuer, its "Letter of Credit") for the account of the applicable
Borrower or any of its Subsidiaries in the Stated Amount requested by
such Borrower on such day; or
(b) extend the Stated Expiry Date of an existing standby
Letter of Credit previously issued hereunder.
No Stated Expiry Date shall be scheduled to occur beyond the earlier of (i) the
Revolving Loan Commitment Termination Date and (ii) unless otherwise agreed to
by the Issuer in its sole discretion, one year from the date of such issuance
or extension. No Issuer shall be permitted or required to issue any Letter of
Credit if, after giving effect thereto, (i) the aggregate amount of all Letter
of Credit Outstandings would exceed the Letter of Credit Commitment Amount or
(ii) the sum of the aggregate amount of all Letter of Credit Outstandings plus
the aggregate principal amount of all Revolving Loans and Swing Line Loans then
outstanding would exceed the Revolving Loan Commitment Amount.
SECTION 2.2. Reduction of the Commitment Amounts. The Commitment
Amounts are subject to reduction from time to time pursuant to this Section 2.2.
SECTION 2.2.1. Optional. The Borrowers may, from time to time on any
Business Day, voluntarily reduce the amount of the Revolving Loan Commitment
Amount, the Swing Line Loan Commitment Amount or the Letter of Credit Commitment
Amount on the Business Day so specified by the Borrowers; provided, however,
that all such reductions shall require at least one Business Day's prior notice
to the Administrative Agent and be permanent, and any partial reduction of any
Commitment Amount shall be in a minimum amount of $1,000,000 and in an integral
multiple of $500,000. Any optional or mandatory reduction of the Revolving Loan
Commitment Amount pursuant to the terms of this Agreement which reduces the
Revolving Loan Commitment Amount below the sum of (i) the Swing Line Loan
Commitment Amount and (ii) the Letter of Credit Commitment Amount shall result
in an automatic and corresponding reduction of the Swing Line Loan Commitment
Amount and/or Letter of Credit Commitment Amount (as directed by the Borrowers
in a notice to the Administrative Agent delivered together with the notice of
such voluntary reduction in the Revolving Loan Commitment Amount) to an
aggregate amount not in excess of the Revolving Loan Commitment Amount, as so
reduced, without any further action on the part of the Swing Line Lender or any
Issuer.
SECTION 2.2.2. Mandatory. Following the prepayment in full of the Term
Loans, the Revolving Loan Commitment Amount shall, without any further action,
automatically and permanently be reduced on the date the Term Loans would
otherwise have been required to be prepaid on account of clause (e), (f), (g) or
(h) of Section 3.1.1, in an amount equal to the amount by which the Term Loans
would otherwise be required to be prepaid if Term Loans had been outstanding.
-46-
SECTION 2.3. Borrowing Procedures. Loans (other than Swing Line Loans)
shall be made by the Lenders in accordance with Section 2.3.1, and Swing Line
Loans shall be made by the Swing Line Lender in accordance with Section 2.3.2.
SECTION 2.3.1. Borrowing Procedure. In the case of Loans other than
Swing Line Loans, by delivering a Borrowing Request to the Administrative Agent
on or before 12:00 noon on a Business Day, each Borrower may from time to time
irrevocably request, on not less than one Business Day's notice in the case of
Base Rate Loans, or three Business Days' notice in the case of LIBO Rate Loans,
and in either case not more than five Business Days' notice, that a Borrowing be
made, in the case of LIBO Rate Loans, in a minimum amount of $2,000,000 and an
integral multiple of $1,000,000, in the case of Base Rate Loans, in a minimum
amount of $1,000,000 and an integral multiple of $500,000 or, in either case, in
the unused amount of the applicable Commitment; provided, however, that all of
the initial Loans shall be made as Base Rate Loans. On the terms and subject to
the conditions of this Agreement, each Borrowing shall be comprised of the type
of Loans, and shall be made on the Business Day, specified in such Borrowing
Request. In the case of Loans other than Swing Line Loans, on or before 1:00
p.m. on such Business Day each Lender that has a Commitment to make the Loans
being requested shall deposit with the Administrative Agent same day funds in an
amount equal to such Lender's Percentage of the requested Borrowing. Such
deposit will be made to an account which the Administrative Agent shall specify
from time to time by notice to the Lenders. To the extent funds are received
from the Lenders, the Administrative Agent shall make such funds available to
the applicable Borrower by wire transfer to the accounts such Borrower shall
have specified in its Borrowing Request. No Lender's obligation to make any Loan
shall be affected by any other Lender's failure to make any Loan.
SECTION 2.3.2. Swing Line Loans. (a) By telephonic notice to the Swing
Line Lender on or before 2:00 p.m. on a Business Day (followed (within one
Business Day) by the delivery of a confirming Borrowing Request), each Borrower
may from time to time prior to the Revolving Loan Commitment Termination Date
irrevocably request that Swing Line Loans be made by the Swing Line Lender in
an aggregate minimum principal amount of $100,000 and an integral multiple of
$50,000. All Swing Line Loans shall be made as Base Rate Loans and shall not be
entitled to be converted into LIBO Rate Loans. The proceeds of each Swing Line
Loan shall be made available by the Swing Line Lender to the applicable
Borrower by wire transfer to the account such Borrower shall have specified in
its notice therefor by the close of business on the Business Day telephonic
notice is received by the Swing Line Lender.
-47-
(b) If (i) any Swing Line Loan shall be outstanding for more than four
Business Days, (ii) any Swing Line Loan is or will be outstanding on a date when
either Borrower requests that a Revolving Loan be made, or (iii) any Default
shall occur and be continuing, then each Revolving Loan Lender (other than the
Swing Line Lender) irrevocably agrees that it will, at the request of the Swing
Line Lender, make a Revolving Loan (which shall initially be funded as a Base
Rate Loan) in an amount equal to such Lender's RL Percentage of the aggregate
principal amount of all such Swing Line Loans then outstanding (such outstanding
Swing Line Loans hereinafter referred to as the "Refunded Swing Line Loans"). On
or before 11:00 a.m. on the first Business Day following receipt by each
Revolving Loan Lender of a request to make Revolving Loans as provided in the
preceding sentence, each Revolving Loan Lender shall deposit in an account
specified by the Swing Line Lender the amount so requested in same day funds and
such funds shall be applied by the Swing Line Lender to repay the Refunded Swing
Line Loans. At the time the Revolving Loan Lenders make the above referenced
Revolving Loans the Swing Line Lender shall be deemed to have made, in
consideration of the making of the Refunded Swing Line Loans, Revolving Loans in
an amount equal to the Swing Line Lender's RL Percentage of the aggregate
principal amount of the Refunded Swing Line Loans. Upon the making (or deemed
making, in the case of the Swing Line Lender) of any Revolving Loans pursuant to
this clause, the amount so funded shall become outstanding under such Revolving
Loan Lender's Revolving Note, if any, and shall be recorded as an outstanding
Revolving Loan of such Lender in the Register and shall no longer be owed under
the Swing Line Note, if any, and the Register shall be revised to reflect that
such Swing Line Loan was repaid. All interest payable with respect to any
Revolving Loans made (or deemed made, in the case of the Swing Line Lender)
pursuant to this clause shall be appropriately adjusted to reflect the period of
time during which the Swing Line Lender had outstanding Swing Line Loans in
respect of which such Revolving Loans were made. Each Revolving Loan Lender's
obligation to make the Revolving Loans referred to in this clause shall be
absolute and unconditional and shall not be affected by any circumstance,
including (i) any set-off, counterclaim, recoupment, defense or other right
which such Lender may have against the Swing Line Lender, any Obligor or any
Person for any reason whatsoever; (ii) the occurrence or continuance of any
Default; (iii) any adverse change in the condition (financial or otherwise) of
any Obligor; (iv) the acceleration or maturity of any monetary Obligations or
the termination of any Commitment after the making of any Swing Line Loan; (v)
any breach of any Loan Document by any Person; or (vi) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.
SECTION 2.4. Continuation and Conversion Elections. By delivering a
Continuation/ Conversion Notice to the Administrative Agent on or before 10:00
a.m. on a Business Day, each Borrower may from time to time irrevocably elect,
on not less than one Business Day's notice in the case of Base Rate Loans, or
three Business Days' notice in the case of LIBO Rate Loans, and in either case
not more than five Business Days' notice, that all, or any portion in an
aggregate minimum amount of $2,000,000 and an integral multiple of $1,000,000
be, in the case of Base Rate Loans, converted into LIBO Rate Loans or be, in the
case of LIBO Rate Loans, converted into Base Rate Loans or continued as LIBO
Rate Loans (in the absence of delivery of a Continuation/Conversion Notice with
respect to any LIBO Rate Loan at least three Business Days (but not more than
five Business Days) before the last day of the then current Interest Period with
respect thereto, such LIBO Rate Loan shall, on such last day, automatically
convert to a Base Rate Loan); provided, however, that (x) each such conversion
or continuation shall be pro rated among the applicable outstanding Loans of all
Lenders that have made such Loans, and (y) no portion of the outstanding
principal amount of any Loans may be continued as, or be converted into, LIBO
Rate Loans when any Default has occurred and is continuing.
-48-
SECTION 2.5. Funding. Each Lender may, if it so elects, fulfill its
obligation to make, continue or convert LIBO Rate Loans hereunder by causing one
of its foreign branches or Affiliates (or an international banking facility
created by such Lender) to make or maintain such LIBO Rate Loan; provided,
however, that such LIBO Rate Loan shall nonetheless be deemed to have been made
and to be held by such Lender, and the obligation of the applicable Borrower to
repay such LIBO Rate Loan shall nevertheless be to such Lender for the account
of such foreign branch, Affiliate or international banking facility. In
addition, each Borrower hereby consents and agrees that, for purposes of any
determination to be made for purposes of Sections 4.1, 4.2, 4.3 or 4.4, it shall
be conclusively assumed that each Lender elected to fund all LIBO Rate Loans by
purchasing Dollar deposits in its LIBOR Office's interbank eurodollar market.
SECTION 2.6. Issuance Procedures. By delivering to the Administrative
Agent an Issuance Request on or before 10:00 a.m. on a Business Day, each
Borrower may from time to time irrevocably request on not less than three nor
more than ten Business Days' notice, in the case of an initial issuance of a
Letter of Credit and not less than three Business Days' prior notice, in the
case of a request for the extension of the Stated Expiry Date of a standby
Letter of Credit (in each case, unless a shorter notice period is agreed to by
the applicable Issuer, in its sole discretion), that such Issuer issue, or
extend (in the case of a standby Letter of Credit) the Stated Expiry Date of, a
Letter of Credit on behalf of such Borrower (whether issued for the account of
or on behalf of such Borrower or any Subsidiary Guarantor) in such form as may
be requested by such Borrower and approved by such Issuer, solely for the
purposes described in Section 7.1.7. Notwithstanding anything to the contrary
contained herein or in any separate application for any Letter of Credit, such
Borrower hereby acknowledges and agrees that it shall be jointly and severally
obligated to reimburse the applicable Issuer upon each Disbursement paid under a
Letter of Credit, and it shall be deemed to be the obligor for purposes of each
such Letter of Credit issued hereunder (whether the account party on such Letter
of Credit is such Borrower, the other Borrower or a Subsidiary Guarantor). Each
Letter of Credit shall by its terms be stated to expire on a date (its "Stated
Expiry Date") no later than the earlier to occur of (i) the Revolving Loan
Commitment Termination Date or (ii) (unless otherwise agreed to by an Issuer, in
its sole discretion) one year from the date of its issuance or extension. Each
Issuer will make available to the beneficiary thereof the original of the Letter
of Credit which it issues. It is understood and agreed that Letters of Credit
issued hereunder need not be issued in any minimum amount.
SECTION 2.6.1. Other Lenders' Participation. Upon the issuance of each
Letter of Credit, and without further action, each Revolving Loan Lender (other
than such Issuer) shall be deemed to have irrevocably purchased, to the extent
of its Percentage to make Revolving Loans, a participation interest in such
Letter of Credit (including the Contingent Liability and any Reimbursement
Obligation with respect thereto), and such Revolving Loan Lender shall, to the
extent of its Percentage to make Revolving Loans, be responsible for reimbursing
within one Business Day the Issuer for Reimbursement Obligations which have not
been reimbursed by the applicable Borrower in accordance with Section 2.6.3. In
addition, such Revolving Loan Lender shall, to the extent of its Percentage to
make Revolving Loans, be entitled to receive a ratable portion of the Letter of
Credit fees payable pursuant to Section 3.3.3 with respect to each Letter of
Credit (other than the issuance fees payable to an Issuer of such Letter of
Credit pursuant to the last sentence of Section 3.3.3) and of interest payable
pursuant to Section 3.2 with respect to any Reimbursement Obligation. To the
extent that any Revolving Loan Lender has reimbursed any Issuer for a
Disbursement, such Lender shall be entitled to receive its ratable portion of
any amounts subsequently received (from such Borrower or otherwise) in respect
of such Disbursement.
-49-
SECTION 2.6.2. Disbursements; Conversion to Revolving Loans. An Issuer
will notify the applicable Borrower and the Administrative Agent promptly of the
presentment for payment of any Letter of Credit issued by such Issuer, together
with notice of the date (the "Disbursement Date") such payment shall be made
(each such payment, a "Disbursement"). Subject to the terms and provisions of
such Letter of Credit, the applicable Issuer shall make such payment to the
beneficiary (or its designee) of such Letter of Credit. Prior to 11:00 a.m. on
the first Business Day following the later of the receipt of such notice by such
Borrower and the Administrative Agent and the Disbursement Date (the
"Disbursement Due Date"), the applicable Borrower will reimburse the
Administrative Agent, for the account of the applicable Issuer, for all amounts
which such Issuer has disbursed under such Letter of Credit, together with
interest thereon at a rate per annum equal to the rate per annum then in effect
for Base Rate Loans (with the then Applicable Margin for Revolving Loans
accruing on such amount) pursuant to Section 3.2 for the period from the
Disbursement Date through the date of such reimbursement; provided, however,
that, if no Specified Default shall have then occurred and be continuing, unless
the applicable Borrower has notified the Administrative Agent no later than one
Business Day prior to the Disbursement Due Date that it will reimburse such
Issuer for the applicable Disbursement, then the making of such Disbursement
shall be deemed to be a Borrowing of Revolving Loans constituting Base Rate
Loans and following the giving of notice thereof by the Administrative Agent to
the Lenders, each Lender with a Revolving Loan Commitment (other than the
Issuer) will deliver to the Issuer on the Disbursement Due Date immediately
available funds in an amount equal to such Lender's Percentage of such
Borrowing. Without limiting in any way the foregoing and notwithstanding
anything to the contrary contained herein or in any separate application for any
Letter of Credit, each Borrower hereby acknowledges and agrees that it shall be
obligated to reimburse the applicable Issuer upon each Disbursement of a Letter
of Credit, and it shall be deemed to be the obligor for purposes of each such
Letter of Credit issued hereunder (whether the account party on such Letter of
Credit is such Borrower, the other Borrower or a Subsidiary of either such
Borrower).
SECTION 2.6.3. Reimbursement. The obligation (a "Reimbursement
Obligation") of each Borrower under Section 2.6.2 to reimburse an Issuer with
respect to each Disbursement (including interest thereon), and, upon the failure
of such Borrower to reimburse an Issuer, each Revolving Loan Lender's obligation
under Section 2.6.1 to reimburse an Issuer, shall be absolute and unconditional
under any and all circumstances and irrespective of any setoff, counterclaim or
defense to payment which such Borrower or such Revolving Loan Lender, as the
case may be, may have or have had against such Issuer or any Lender, including
any defense based upon the failure of any Disbursement to conform to the terms
of the applicable Letter of Credit (if, in such Issuer's good faith opinion,
such Disbursement is determined to be appropriate) or any non-application or
misapplication by the beneficiary of the proceeds of such Letter of Credit;
provided, however, that after paying in full its Reimbursement Obligation
hereunder, nothing herein shall adversely affect the right of such Borrower or
such Lender, as the case may be, to commence any proceeding against an Issuer
for any wrongful Disbursement made by such Issuer under a Letter of Credit as a
result of acts or omissions constituting gross negligence or wilful misconduct
on the part of such Issuer.
-50-
SECTION 2.6.4. Deemed Disbursements. Upon the occurrence and during the
continuation of any Default under Section 8.1.9 or upon notification by the
Administrative Agent (acting at the direction of the Required Lenders) to each
Borrower of its obligations under this Section, following the occurrence and
during the continuation of any other Event of Default,
(a) the aggregate Stated Amount of all Letters of Credit
shall, without demand upon or notice to such Borrower or any other
Person, be deemed to have been paid or disbursed by the Issuers of such
Letters of Credit (notwithstanding that such amount may not in fact
have been paid or disbursed); and
(b) such Borrower shall be immediately obligated to reimburse
the Issuers for the amount deemed to have been so paid or disbursed by
such Issuers.
Amounts payable by each Borrower pursuant to this Section shall be deposited in
immediately available funds with the Administrative Agent and held as
collateral security for the Reimbursement Obligations. When all Defaults giving
rise to the deemed disbursements under this Section have been cured or waived
the Administrative Agent shall return to such Borrower all amounts then on
deposit with the Administrative Agent pursuant to this Section which have not
been applied to the satisfaction of the Reimbursement Obligations.
SECTION 2.6.5. Nature of Reimbursement Obligations. Each Borrower, each
other Obligor, the Seller and, to the extent set forth in Section 2.6.1, each
Revolving Loan Lender shall assume all risks of the acts, omissions or misuse of
any Letter of Credit by the beneficiary thereof. No Issuer (except to the extent
of its own gross negligence or wilful misconduct) shall be responsible for:
(a) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any Letter of Credit or any document submitted by any
party in connection with the application for and issuance of a Letter
of Credit, even if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged;
-51-
(b) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any instrument transferring or assigning or purporting
to transfer or assign a Letter of Credit or the rights or benefits
thereunder or the proceeds thereof in whole or in part, which may prove
to be invalid or ineffective for any reason;
(c) failure of the beneficiary to comply fully with conditions
required in order to demand payment under a Letter of Credit;
(d) errors, omissions, interruptions or delays in transmission
or delivery of any messages, by mail, telecopier, cable, telegraph,
telex or otherwise; or
(e) any loss or delay in the transmission or otherwise of any
document or draft required in order to make a Disbursement under a
Letter of Credit.
None of the foregoing shall affect, impair or prevent the vesting of any of the
rights or powers granted to any Issuer or any Revolving Loan Lender hereunder.
In furtherance and not in limitation or derogation of any of the foregoing, any
action taken or omitted to be taken by an Issuer in good faith (and not
constituting gross negligence or willful misconduct) shall be binding upon each
Obligor, the Seller and each such Secured Party, and shall not put such Issuer
under any resulting liability to any Obligor, the Seller or any Secured Party,
as the case may be. Notwithstanding the foregoing, the Lenders (other than the
applicable Issuer in its capacity as such) shall not be liable for any
obligation resulting from the gross negligence or willful misconduct (as
determined by a court of competent jurisdiction) of the applicable Issuer with
respect to any Letter of Credit.
SECTION 2.6.6. Existing Letters of Credit. Notwithstanding anything to
the contrary herein, the Letters of Credit outstanding under (and as defined in)
the Existing Credit Agreement shall be deemed to be Letters of Credit
outstanding hereunder.
SECTION 2.7. Register; Notes. (a) Each Lender may maintain in
accordance with its usual practice an account or accounts evidencing the
Indebtedness of each Borrower to such Lender resulting from each Loan made by
such Lender, including the amounts of principal and interest payable and paid to
such Lender from time to time hereunder. In the case of a Lender that does not
request, pursuant to clause (c) below, execution and delivery of a Note
evidencing the Loans made by such Lender to the Borrowers, such account or
accounts shall, to the extent not inconsistent with the notations made by the
Administrative Agent in the Register, be conclusive and binding on each Borrower
absent manifest error; provided, however, that the failure of any Lender to
maintain such account or accounts shall not limit or otherwise affect any
Obligations of either Borrower, any other Obligor or the Seller.
-52-
(b) Each Borrower hereby designates the Administrative Agent to serve
as such Borrower's agent, solely for the purpose of this clause (b), to maintain
a register (the "Register") in which the Administrative Agent will record each
Lender's Commitments, the Loans made by each Lender and each repayment in
respect of the principal amount of the Loans of each Lender and annexed to which
the Administrative Agent shall retain a copy of each Lender Assignment Agreement
delivered to the Administrative Agent pursuant to Section 11.11.1. Failure to
make any recordation, or any error in such recordation, shall not affect either
Borrower's obligation in respect of such Loans. The entries in the Register
shall be conclusive, in the absence of manifest error, and each Borrower, each
Agent and each Lender shall treat each Person in whose name a Loan (and as
provided in clause (c) below the Note evidencing such Loan, if any) is
registered as the owner thereof for all purposes of this Agreement,
notwithstanding notice or any provision herein to the contrary. A Lender's
Commitment and the Loans made pursuant thereto may be assigned or otherwise
transferred in whole or in part only by registration of such assignment or
transfer in the Register. Any assignment or transfer of a Lender's Commitment
and/or the Loans made pursuant thereto shall be registered in the Register only
upon delivery to the Administrative Agent of a Lender Assignment Agreement duly
executed by the assignor and assignee thereof. No assignment or transfer of a
Lender's Commitment or the Loans made pursuant thereto shall be effective unless
such assignment or transfer shall have been recorded in the Register by the
Administrative Agent as provided in this Section. The Administrative Agent
agrees to record in the Register any such assignment or transfer of a Lender's
Commitment or the Loans made pursuant thereto promptly upon its receipt of a
Lender Assignment Agreement duly executed by the assignor and assignee thereof
in accordance with Section 11.11.1.
(c) Each Borrower agrees that, upon the request to the Administrative
Agent by any Lender, such Borrower will execute and deliver to such Lender, as
applicable, a Revolving Note, a Term A Note, a Term B Note and/or a Swing Line
Note evidencing the Loans made by such Lender. Each Borrower hereby irrevocably
authorizes each Lender to make (or cause to be made) appropriate notations on
the grid attached to such Lender's Notes (or on any continuation of such grid),
which notations, if made, shall evidence, inter alia, the date of, the
outstanding principal amount of, and the interest rate and Interest Period
applicable to the Loans evidenced thereby. Such notations shall, to the extent
not inconsistent with the notations made by the Administrative Agent in the
Register, be conclusive and binding on each Borrower absent manifest error;
provided, however, that the failure of any Lender to make any such notations or
any error in any such notations shall not limit or otherwise affect any
Obligations of either Borrower, any other Obligor or the Seller. The Loans
evidenced by any such Note and interest thereon shall at all times (including
after assignment pursuant to Section 11.11.1) be represented by one or more
Notes payable to the order of the payee named therein and its registered
assigns. A Note and the obligation evidenced thereby may be assigned or
otherwise transferred in whole or in part only by registration of such
assignment or transfer of such Note and the obligation evidenced thereby in the
Register (and each Note shall expressly so provide). Any assignment or transfer
of all or part of an obligation evidenced by a Note shall be registered in the
Register only upon surrender for registration of assignment or transfer of the
Note evidencing such obligation, accompanied by a Lender Assignment Agreement
duly executed by the assignor thereof, and thereupon, if requested by the
assignee, one or more new Notes shall be issued to the designated assignee and
the old Note shall be returned by the Administrative Agent to the Borrowers
marked "exchanged". No assignment of a Note and the obligation evidenced thereby
shall be effective unless it shall have been recorded in the Register by the
Administrative Agent as provided in this Section.
-53-
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1. Repayments and Prepayments; Application. Each Borrower
jointly and severally agrees that the Loans shall be repaid and prepaid pursuant
to the following terms.
SECTION 3.1.1. Repayments and Prepayments. The Borrowers shall jointly
and severally repay in full the unpaid principal amount of each Loan upon the
applicable Stated Maturity Date therefor. Prior thereto, payments and
prepayments of Loans shall or may be made jointly and severally by the Borrowers
as set forth below.
(a) From time to time on any Business Day, each Borrower may
make a voluntary prepayment, in whole or in part, of the outstanding
principal amount of any
(i) Loans (other than Swing Line Loans); provided,
however, that (A) any such prepayment of the Term Loans shall
be made pro rata among Term A Loans and Term B Loans, and pro
rata among Term A Loans and Term B Loans of the same type and,
if applicable, having the same Interest Period of all Lenders
that have made such Term A Loans or Term B Loans (to be
applied as set forth in Section 3.1.2) and any such prepayment
of Revolving Loans shall be made pro rata among the Revolving
Loans of the same type and, if applicable, having the same
Interest Period of all Lenders that have made such Revolving
Loans; (B) all such voluntary prepayments shall require at
least one but no more than five Business Days' prior written
notice to the Administrative Agent; and (C) all such voluntary
partial prepayments shall be, in the case of LIBO Rate Loans,
in an aggregate minimum amount of $1,000,000 and an integral
multiple of $1,000,000 and, in the case of Base Rate Loans, in
an aggregate minimum amount of $500,000 and an integral
multiple of $100,000; and
(ii) Swing Line Loans; provided, that (A) all such
voluntary prepayments shall require prior telephonic notice to
the Swing Line Lender on or before 1:00 p.m. on the day of
such prepayment (such notice to be confirmed in writing within
24 hours thereafter); and (B) all such voluntary partial
prepayments shall be in an aggregate minimum amount of
$100,000 and an integral multiple of $50,000.
(b) On each date when the sum of (i) the aggregate outstanding
principal amount of all Revolving Loans and Swing Line Loans and (ii)
the aggregate amount of all Letter of Credit Outstandings exceeds the
Revolving Loan Commitment Amount (as it may be reduced from time to
time pursuant to this Agreement), the Borrowers shall jointly and
severally make a mandatory prepayment of Revolving Loans or Swing Line
Loans (or both) and, if necessary, deposit cash collateral with the
Administrative Agent or its designee pursuant to an agreement
satisfactory to the Administrative Agent to collateralize Letter of
Credit Outstandings, in an aggregate amount equal to such excess.
-54-
(c) (i) On the Stated Maturity Date for Existing Term A Loans and on
each Quarterly Payment Date occurring during any period set forth below, the
Borrowers shall jointly and severally make a scheduled repayment of the
aggregate outstanding principal amount, if any, of all Existing Term A Loans in
an amount equal to the amount set forth below opposite such Stated Maturity Date
or such Quarterly Payment Date, as applicable:
Amount of Required
Period Principal Repayment
------ -------------------
Closing Date through (and
including) 09/30/00 $387,500.00
10/01/00 through (and
including) 09/30/01 $775,000.00
10/01/01 through (and
including) 09/30/02 $1,162,500.00
10/01/02 through (and
including) 09/30/03 $1,550,000.00
10/01/03 through (and
including) 09/30/04 $1,937,500.00
10/01/04 through (and
including) 09/30/05 $1,550,000.00
Stated Maturity Date for $1,550,000.00 or the then outstanding
Existing Term A Loans principal amount of all Existing Term A
Loans, if different.
(ii) On the Stated Maturity Date for Additional Term A Loans and on
each Quarterly Payment Date occurring during any period set forth below, the
Borrowers shall jointly and severally make a scheduled repayment of the
aggregate outstanding principal amount, if any, of all Additional Term A Loans
in an amount equal to the amount set forth below opposite such Stated Maturity
Date or such Quarterly Payment Date, as applicable:
-55-
Amount of Required
Period Principal Repayment
------ --------------------
Date of making Additional Term A Loans
through (and including) 06/30/05 $33,333.33
07/01/05 through (and
including) 09/30/05 $33,333.39
10/01/05 through (and
including) 09/30/06 $1,880,000.00
Stated Maturity Date for $1,880,000.00 or the then
Additional Term A Loans outstanding principal amount of
all Additional Term A Loans, if
different.
(d) On the Stated Maturity Date for Term B Loans and on each Quarterly
Payment Date occurring during any period set forth below, the Borrowers shall
jointly and severally make a scheduled repayment of the aggregate outstanding
principal amount, if any, of all Term B Loans in an amount equal to the amount
set forth below opposite such Stated Maturity Date or such Quarterly Payment
Date, as applicable:
Amount of Required
Period Principal Repayment
------ -------------------
Closing Date through (and
including) 09/30/05 $250,000.00
10/01/05 through (and
including) 09/30/06 $18,800,000.00
Stated Maturity Date for $18,800,000.00 or the then outstanding
Term B Loans principal amount of all Term B Loans, if
different.
-56-
(e) The Borrowers shall, following the receipt by Holdings,
either Borrower or any of their respective Subsidiaries of any Casualty
Proceeds in excess of $250,000 (individually or in the aggregate (when
taken together with all other Casualty Proceeds and all Net Disposition
Proceeds)) over the course of a Fiscal Year, deliver to the Agents a
calculation of the amount of such Casualty Proceeds and jointly and
severally make a mandatory prepayment of the Term Loans in an amount
equal to 100% of such Casualty Proceeds within 30 days of the receipt
thereof to be applied as set forth in Section 3.1.2; provided, however,
that no mandatory prepayment on account of Casualty Proceeds shall be
required under this clause if the Borrowers inform the Agents in
writing no later than 30 days following the occurrence of the Casualty
Event resulting in such Casualty Proceeds of their or such Subsidiary's
good faith intention to apply such Casualty Proceeds to (x) the
rebuilding or replacement of the damaged, destroyed or condemned assets
or property or (y) the acquisition of long-term assets that are
necessary or useful in the operation of the Borrowers' and their
respective Subsidiaries' business activities in accordance with Section
7.2.1, and the Borrowers or such Subsidiary in fact uses such Casualty
Proceeds to rebuild or replace such assets or property or acquire such
long-term assets within 360 days following the receipt of such Casualty
Proceeds, with the amount of such Casualty Proceeds unused after such
360-day period being applied to the Term Loans pursuant to Section
3.1.2; provided, further, however, that (i) at any time when any
Specified Default shall have occurred and be continuing, all Casualty
Proceeds (together with Net Disposition Proceeds not applied as
provided in clause (f) below) shall be deposited in an account
maintained with the Administrative Agent to pay for such rebuilding,
replacement or acquisition whenever no Specified Default is then
continuing or except as otherwise agreed to by the Agents for
disbursement at the request of the Borrowers or such Subsidiary, as the
case may be, or (ii) if all such Casualty Proceeds (together with Net
Disposition Proceeds not applied as provided in clause (f) below)
aggregating in excess of $250,000 have not yet been applied as
described in the notice required above (or in accordance with clause
(f) below), all such Casualty Proceeds and Net Disposition Proceeds
shall be deposited in an account maintained with the Administrative
Agent for disbursement at the request of the Borrowers or such
Subsidiary, as the case may be, to be used for the purpose(s) set forth
in such written notice(s).
(f) The Borrowers shall, following the receipt by Holdings,
either Borrower or any of their respective Subsidiaries of any Net
Disposition Proceeds in excess of $250,000 (individually or in the
aggregate (when taken together with all other Net Disposition Proceeds
and all Casualty Proceeds)) over the course of a Fiscal Year, deliver
to the Agents a calculation of the amount of such Net Disposition
Proceeds and jointly and severally make a mandatory prepayment of the
Term Loans in an amount equal to 100% of such Net Disposition Proceeds
within one Business Day of the receipt thereof to be applied as set
forth in Section 3.1.2; provided, however, that no mandatory prepayment
on account of Net Disposition Proceeds shall be required under this
clause if the Borrowers inform the Agents in writing no later than one
Business Day following the receipt of such Net Disposition Proceeds of
their or such Subsidiary's good faith intention to apply such Net
Disposition Proceeds to (x) the replacement of the assets or property
that was the subject of the Disposition that resulted in such Net
Disposition Proceeds or (y) the acquisition of long-term assets that
are necessary or useful in the operation of the Borrowers' and their
respective Subsidiaries' business activities in accordance with Section
7.2.1, and the Borrowers or such Subsidiary in fact uses such Net
Disposition Proceeds to replace such assets or property or acquire such
long-term assets within 360 days following the receipt of such Net
Disposition Proceeds, with the amount of such Net Disposition Proceeds
unused after such 360-day period being applied to the Term Loans
pursuant to Section 3.1.2; provided, further, however, that (i) at any
time when any Specified Default shall have occurred and be continuing,
all Net Disposition Proceeds (together with Casualty Proceeds not
applied as provided in clause (e) above) shall be deposited in an
account maintained with the Administrative Agent to pay for such
replacement or acquisition whenever no Specified Default is then
continuing or except as otherwise agreed to by the Agents for
disbursement at the request of the Borrowers or such Subsidiary, as the
case may be, or (ii) if all such Net Disposition Proceeds (together
with Casualty Proceeds not applied as provided in clause (e) above)
aggregating in excess of $250,000 have not been applied as described in
the notice required above (or in accordance with clause (e) above), all
such Net Disposition Proceeds and Casualty Proceeds shall be deposited
in an account maintained with the Administrative Agent for disbursement
at the request of the Borrowers or such Subsidiary, as the case may be,
to be used for the purpose(s) set forth in such written notice(s).
-57-
(g) The Borrowers shall, no later than five Business Days
following the delivery by Holdings of its annual audited financial
reports required pursuant to clause (c) of Section 7.1.1 (beginning
with the financial reports delivered in respect of the 2000 Fiscal
Year), deliver to the Agents a calculation of the Excess Cash Flow for
the Fiscal Year last ended and jointly and severally make a mandatory
prepayment of the Term Loans in an amount equal to 50% of the Excess
Cash Flow (if any) for such Fiscal Year, to be applied as set forth in
Section 3.1.2.
(h) Concurrently with the receipt by Holdings, either Borrower
or any of their respective Subsidiaries of any Net Debt Proceeds or Net
Equity Proceeds, the Borrowers shall deliver to the Agents a
calculation of the amount of such Net Debt Proceeds or Net Equity
Proceeds, as the case may be, and jointly and severally make a
mandatory prepayment of the Term Loans in an amount equal to 100% of
such Net Debt Proceeds or 50% of such Net Equity Proceeds, as the case
may be, to be applied as set forth in Section 3.1.2.
(i) Immediately upon any acceleration of the Stated Maturity
Date of any Loans pursuant to Section 8.2 or Section 8.3, the Borrowers
shall jointly and severally repay all the Loans, unless, pursuant to
Section 8.3, only a portion of all the Loans is so accelerated (in
which case the portion so accelerated shall be so repaid).
Each prepayment of any Loans made pursuant to this Section shall be without
premium or penalty, except as may be required by Section 3.1.3 and Section 4.4.
SECTION 3.1.2. Application. Amounts prepaid pursuant to Section 3.1.1
shall be applied as set forth in this Section.
(a) Subject to clause (b), each prepayment or repayment of the
principal of the Loans shall be applied, to the extent of such
prepayment or repayment, first, to the principal amount thereof being
maintained as Base Rate Loans, and second, subject to the terms of
Section 4.4, to the principal amount thereof being maintained as LIBO
Rate Loans.
-58-
(b) Each prepayment of Term Loans made pursuant to clauses
(a), (e), (f), (g) and (h) of Section 3.1.1 shall be applied pro rata
to a mandatory prepayment of the outstanding principal amount of all
Term A Loans and Term B Loans (with the amount of such prepayment of
the Term A Loans and the Term B Loans being applied to the remaining
Term A Loan or Term B Loan, as the case may be, amortization payments,
pro rata in accordance with the amount of each such remaining Term Loan
amortization payment); provided, however, that in the case of any such
prepayment of Term B Loans made pursuant to clause (e), (f), (g) and
(h) of Section 3.1.1, any Lender that has Term B Loans may elect not to
have such Loans prepaid by delivering a notice to the Agents at least
one Business Day prior to the date that such prepayment is to be made
in which notice such Lender shall decline to have such Loans prepaid
with the amounts set forth above, in which case the amounts that would
have been applied to a prepayment of such Lender's Term B Loans shall
instead be applied to a prepayment of the principal amount (if any) of
all outstanding Term A Loans until all outstanding Term A Loans have
been prepaid in full, then applied to a prepayment of such Lender's
Term B Loans.
SECTION 3.1.3. Prepayment of Term B Loans. In the event that either
Borrower makes a voluntary prepayment pursuant to clause (a) of Section 3.1.1 or
is required to make a mandatory prepayment of the Term B Loans pursuant to
clauses (f) or (h) of Section 3.1.1 during any period set forth below, such
Borrower shall pay the amount of such prepayment plus an amount (the "Prepayment
Premium") equal to the percentage of the principal amount so voluntarily prepaid
or required to be prepaid during such period as follows:
Closing Date through 2.00%
and including 11/17/2000
11/18/2000 through 1.00%
and including 11/17/2001
11/18/2001 0%
and thereafter
provided, that if any Lender declines to have its Term B Loans prepaid pursuant
to the proviso to clause (b) of Section 3.1.2, the amount of the prepayment to
be applied to the Term A Loans and/or Revolving Loans shall not include the
Prepayment Premium.
SECTION 3.2. Interest Provisions. Interest on the outstanding principal
amount of Loans shall accrue and be payable by the Borrowers jointly and
severally in accordance with the terms set forth below.
-59-
SECTION 3.2.1. Rates. Subject to Section 2.3.2, pursuant to an
appropriately delivered Borrowing Request or Continuation/Conversion Notice,
each Borrower may elect that Loans comprising a Borrowing accrue interest at a
rate per annum:
(a) on that portion maintained from time to time as a Base
Rate Loan, equal to the sum of the Alternate Base Rate from time to
time in effect plus the Applicable Margin; provided that all Swing Line
Loans shall always accrue interest at the then effective Applicable
Margin for Revolving Loans maintained as Base Rate Loans; and
(b) on that portion maintained as a LIBO Rate Loan, during
each Interest Period applicable thereto, equal to the sum of the LIBO
Rate (Reserve Adjusted) for such Interest Period plus the Applicable
Margin.
All LIBO Rate Loans shall bear interest from and including the first day of the
applicable Interest Period to (but not including) the last day of such Interest
Period at the interest rate determined as applicable to such LIBO Rate Loan.
SECTION 3.2.2. Post-Default Rates. Upon the occurrence and during the
continuance of an Event of Default, the Borrowers shall jointly and severally
pay, but only to the extent permitted by law, interest (after as well as before
judgment) in an amount equal to (a) in the case of any principal of LIBO Rate
Loans or accrued interest thereon, the rate that would otherwise be applicable
to such LIBO Rate Loans pursuant to Section 3.2.1 plus 2%, (b) in the case of
any principal of Base Rate Loans or accrued interest thereon, the rate that
would otherwise be applicable to such Base Rate Loans pursuant to Section 3.2.1
plus 2% and (c) in the case of any accrued commitment fees, letter of credit
fees or other monetary Obligations, the rate that would otherwise be applicable
to Revolving Loans that are maintained as Base Rate Loans pursuant to Section
3.2.1 plus 2%.
SECTION 3.2.3. Payment Dates. Interest accrued on each Loan shall be
payable, without duplication:
(a) on the Stated Maturity Date therefor;
(b) on the date of any payment or prepayment, in whole or in
part, of principal outstanding on such Loan on the principal amount so
paid or prepaid;
(c) with respect to Base Rate Loans, on each Quarterly Payment
Date occurring after the Closing Date;
(d) with respect to LIBO Rate Loans, on the last day of each
applicable Interest Period (and, if such Interest Period shall exceed
three months, on the date occurring on each three-month interval
occurring after the first day of such Interest Period);
-60-
(e) with respect to any Base Rate Loans converted into LIBO
Rate Loans on a day when interest would not otherwise have been payable
pursuant to clause (c), on the date of such conversion; and
(f) on that portion of any Loans the Stated Maturity Date of
which is accelerated pursuant to Section 8.2 or Section 8.3,
immediately upon such acceleration.
Interest accrued on Loans or other monetary Obligations after the date such
amount is due and payable (whether on the Stated Maturity Date, upon
acceleration or otherwise) shall be payable upon demand.
SECTION 3.3. Fees. The Borrowers agree to jointly and severally pay the
fees set forth below. All such fees shall be non-refundable.
SECTION 3.3.1. Commitment Fee. The Borrowers agree to jointly and
severally pay to the Administrative Agent for the account of each Lender, for
the period including any portion thereof when any of its Commitments are
suspended by reason of either Borrower's inability to satisfy any condition of
Article V) commencing on the Closing Date and continuing through the applicable
Commitment Termination Date, a commitment fee in an amount equal to the
Applicable Commitment Fee, in each case on such Lender's Percentage of the sum
of the average daily unused portion of the applicable Commitment Amount (net of
Letter of Credit Outstandings, in the case of the Revolving Loan Commitment
Amount). All commitment fees payable pursuant to this Section shall be
calculated on a year comprised of 360 days and payable by the Borrowers jointly
and severally in arrears on the Closing Date and thereafter on each Quarterly
Payment Date, commencing with the first Quarterly Payment Date following the
Closing Date, and on the Revolving Loan Commitment Termination Date. The making
of Swing Line Loans shall not constitute usage of the Revolving Loan Commitment
with respect to the calculation of commitment fees to be paid by the Borrowers
to the Lenders. Any term or provision hereof to the contrary notwithstanding,
commitment fees payable for any period prior to the Closing Date shall be
payable in accordance with the applicable Fee Letter.
SECTION 3.3.2. Agents' Fees. (a) The Borrowers agree to jointly and
severally pay to the Administrative Agent, for its own account, the fees in the
amounts and on the dates set forth in the Fee Letters.
(b) The Borrowers agree to jointly and severally pay to the Syndication
Agent, for its own account, the fees in the amounts and on the dates set forth
in the Fee Letters.
SECTION 3.3.3. Letter of Credit Fee. The Borrowers agree to jointly and
severally pay to the Administrative Agent, for the pro rata account of the
applicable Issuer and each Revolving Loan Lender, a Letter of Credit fee in an
amount equal to the then effective Applicable Margin for Revolving Loans
maintained as LIBO Rate Loans, multiplied by the Stated Amount of each such
Letter of Credit, such fees being payable quarterly in arrears on each Quarterly
Payment Date following the date of issuance of each Letter of Credit and on the
Revolving Loan Commitment Termination Date. The Borrowers further agree to
jointly and severally pay in advance to the applicable Issuer on the date of
each issuance and extension of each Letter of Credit issued or extended by such
Issuer and quarterly thereafter on each Quarterly Payment Date following the
date of such issuance or extension and on the Revolving Loan Commitment
Termination Date an issuance fee in an amount equal to 1/4 of 1% per annum on
the Stated Amount of such Letter of Credit. The Borrowers further agree to
jointly and severally pay to the applicable Issuer such administrative fee and
other fees, if any, in connection with Letters of Credit in such amounts and at
such times as the applicable Issuer and the Borrowers shall agree from time to
time.
-61-
ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
SECTION 4.1. LIBO Rate Lending Unlawful. If any Lender shall determine
(which determination shall, upon notice thereof to the Borrowers and the
Administrative Agent, be conclusive and binding on the Borrowers) that the
introduction of or any change in or in the interpretation of any law, in each
case after the date upon which such Lender shall have become a Lender under the
Existing Credit Agreement or hereunder, makes it unlawful, or any Governmental
Authority asserts that it is unlawful, for such Lender to make or continue any
Loan as, or to convert any Loan into, a LIBO Rate Loan, the obligations of such
Lender to make, continue or convert any such LIBO Rate Loan shall, upon such
determination, forthwith be suspended until such Lender shall notify the
Administrative Agent that the circumstances causing such suspension no longer
exist, and all outstanding LIBO Rate Loans payable to such Lender shall
automatically convert into Base Rate Loans at the end of the then current
Interest Periods with respect thereto or sooner, if required by such law or
assertion.
SECTION 4.2. Deposits Unavailable. If the Administrative Agent shall
have determined that
(a) Dollar deposits in the relevant amount and for the
relevant Interest Period are not available to it in its relevant
market; or
(b) by reason of circumstances affecting its relevant market,
adequate means do not exist for ascertaining the interest rate
applicable hereunder to LIBO Rate Loans;
then, upon notice from the Administrative Agent to the Borrowers and the
Lenders, the obligations of all Lenders under Section 2.3 and Section 2.4 to
make or continue any Loans as, or to convert any Loans into, LIBO Rate Loans
shall forthwith be suspended until the Administrative Agent shall notify the
Borrowers and the Lenders that the circumstances causing such suspension no
longer exist.
-62-
SECTION 4.3. Increased LIBO Rate Loan Costs, etc. The Borrowers agree
to jointly and severally reimburse each Lender and Issuer for any increase in
the cost to such Lender or Issuer of, or any reduction in the amount of any sum
receivable by such Secured Party in respect of, such Secured Party's Commitments
and the making of Credit Extensions hereunder (including the making, continuing
or maintaining (or of its obligation to make or continue) any Loans as, or of
converting (or of its obligation to convert) any Loans into, LIBO Rate Loans)
that arise in connection with any change in, or the introduction, adoption,
effectiveness, interpretation, reinterpretation or phase-in after the date
hereof of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any Governmental Authority that
occurs after the date upon which such Lender became a Lender under the Existing
Credit Agreement or hereunder, except for any such changes with respect to
increased capital costs and Taxes (which are governed by Sections 4.5 and 4.6,
respectively). Each affected Secured Party shall promptly notify the
Administrative Agent and the Borrowers in writing of the occurrence of any such
event, stating the reasons therefor and the additional amount required fully to
compensate such Secured Party for such increased cost or reduced amount. Such
additional amounts shall be payable by the Borrowers jointly and severally
directly to such Secured Party within five days of its receipt of such notice,
and such notice shall, in the absence of manifest error, be conclusive and
binding on the Borrowers.
SECTION 4.4. Funding Losses. In the event any Lender shall incur any
loss or expense (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender
to make or continue any portion of the principal amount of any Loan as, or to
convert any portion of the principal amount of any Loan into, a LIBO Rate Loan)
as a result of
(a) any conversion or repayment or prepayment of the principal
amount of any LIBO Rate Loan on a date other than the scheduled last
day of the Interest Period applicable thereto, whether pursuant to
Article III or otherwise;
(b) any Loans not being made as LIBO Rate Loans in accordance
with the Borrowing Request therefor; or
(c) any Loans not being continued as, or converted into, LIBO
Rate Loans in accordance with the Continuation/Conversion Notice
therefor;
then, upon the written notice of such Lender to the Borrowers (with a copy to
the Administrative Agent), the Borrowers shall, within five days of its receipt
thereof, jointly and severally pay directly to such Lender such amount as will
(in the reasonable determination of such Lender) reimburse such Lender for such
loss or expense. Such written notice shall, in the absence of manifest error,
be conclusive and binding on the Borrowers.
-63-
SECTION 4.5. Increased Capital Costs. If any change in, or the
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any Governmental Authority affects
or would affect the amount of capital required or expected to be maintained by
any Secured Party or any Person controlling such Secured Party, and such Secured
Party determines (in good faith but in its sole and absolute discretion) that
the rate of return on its or such controlling Person's capital as a consequence
of the Commitments or the Credit Extensions made, or the Letters of Credit
participated in, by such Secured Party is reduced to a level below that which
such Secured Party or such controlling Person could have achieved but for the
occurrence of any such circumstance, then upon notice from time to time by such
Secured Party to the Borrowers, the Borrowers shall within five days following
receipt of such notice jointly and severally pay directly to such Secured Party
additional amounts sufficient to compensate such Secured Party or such
controlling Person for such reduction in rate of return; provided that such
Secured Party shall if requested by the Borrowers use reasonable efforts
(subject to overall policy considerations of such Lender) to designate another
lending office for any Loans affected by such event or take other action so long
as such Lender and its lending office suffer no economic, legal or regulatory
disadvantage, with the object of avoiding the consequence of the event giving
rise to the operation of this Section; provided, however, that no Borrower shall
have any obligation to pay any such additional amount under this Section 4.5
with respect to any such change unless such Lender shall have notified the
applicable Borrower of its demand within 120 days after the date upon which such
Lender or such controlling Person has obtained audited financial statements with
respect to the fiscal year of such Lender or such controlling Person in which
such change occurred. Nothing in the first proviso to the immediately preceding
sentence shall affect or postpone any of the Obligations of such Borrower or the
right of any Lender provided in this Section. A statement of such Secured Party
as to any such additional amount or amounts shall, in the absence of manifest
error, be conclusive and binding on the Borrowers. In determining such amount,
such Secured Party may use any method of averaging and attribution that it (in
its sole and absolute discretion) shall deem applicable.
SECTION 4.6. Taxes. Each of Holdings and each Borrower covenants and
agrees as follows with respect to Taxes.
(a) Any and all payments by Holdings and such Borrower under
each Loan Document shall be made without setoff, counterclaim or other
defense, and (subject to clause (f) below and Section 11.11) free and
clear of, and without deduction or withholding for or on account of,
any Taxes. In the event that any Taxes are required by law to be
deducted or withheld from any payment required to be made by Holdings
or such Borrower, as the case may be, to or on behalf of any Secured
Party under any Loan Document, then:
(i) subject to clause (f) below and Section 11.11, if
such Taxes are Non-Excluded Taxes, the amount of such payment
shall be increased as may be necessary such that such payment
is made, after withholding or deduction for or on account of
such Taxes, in an amount that is not less than the amount
provided for in such Loan Document; and
-64-
(ii) Holdings or such Borrower, as the case may be,
shall withhold the full amount of such Taxes from such payment
(as increased pursuant to clause (a) (i)) and shall pay such
amount to the Governmental Authority imposing such Taxes in
accordance with applicable law.
(b) In addition, Holdings shall, and the Borrowers shall
jointly and severally, pay any and all Other Taxes imposed to the
relevant Governmental Authority imposing such Other Taxes in accordance
with applicable law.
(c) As promptly as practicable after the payment of any Taxes
or Other Taxes, and in any event within 45 days of any such payment
being due, Holdings or the Borrowers, as the case may be, shall furnish
to the Administrative Agent a copy of an official receipt (or a
certified copy thereof) evidencing the payment of such Taxes or Other
Taxes. The Administrative Agent shall make copies thereof available to
any Lender upon request therefor.
(d) Subject to clause (f) below and Section 11.11, Holdings
shall, and the Borrowers shall jointly and severally, indemnify each
Secured Party for any Non-Excluded Taxes and Other Taxes levied,
imposed or assessed on (and whether or not paid directly by) such
Secured Party (whether or not such Non-Excluded Taxes or Other Taxes
are correctly asserted by the relevant Governmental Authority).
Promptly upon having knowledge that any such Non-Excluded Taxes or
Other Taxes have been levied, imposed or assessed, and promptly upon
notice thereof by any Secured Party, Holdings shall, and the Borrowers
shall jointly and severally, pay such Non-Excluded Taxes or Other Taxes
directly to the relevant Governmental Authority (provided, however,
that no Secured Party shall be under any obligation to provide any such
notice to Holdings or the Borrowers, as the case may be). In addition,
Holdings shall, and the Borrowers shall jointly and severally,
indemnify each Secured Party for any incremental Taxes that may become
payable by such Secured Party as a result of any failure of Holdings or
the Borrowers, as the case may be, to pay any Taxes when due to the
appropriate Governmental Authority or to deliver to the Administrative
Agent, pursuant to clause (c), documentation evidencing the payment of
Taxes or Other Taxes. With respect to indemnification for Non-Excluded
Taxes and Other Taxes actually paid by any Secured Party or the
indemnification provided in the immediately preceding sentence, such
indemnification shall be made within 30 days after the date such
Secured Party makes written demand therefor. Holdings and each Borrower
acknowledges that any payment made to any Secured Party or to any
Governmental Authority in respect of the indemnification obligations of
Holdings or such Borrower, as the case may be, provided in this clause
shall constitute a payment in respect of which the provisions of clause
(a) and this clause shall apply.
-65-
(e) Each Non-Domestic Lender, on or prior to the date on which
such Non-Domestic Lender becomes a Lender hereunder (and from time to
time thereafter upon the request of Holdings, the Borrowers or the
Administrative Agent, but only for so long as such Non-Domestic Lender
is legally entitled to do so), shall deliver to Holdings, the Borrowers
and the Administrative Agent either
(i) two duly completed copies of either (A) Internal
Revenue Service Form W-8BEN or (B) Internal Revenue Service
Form W-8ECI, or in either case an applicable successor form,
certifying that such Lender is entitled to an exemption from
U.S. federal withholding tax on payments of interest pursuant
to an income tax treaty to which the United States is a party
or certifying that the income receivable pursuant to this
Agreement is effectively connected with the conduct of a trade
or business in the United States; or
(ii) in the case of a Non-Domestic Lender that is not
legally entitled to deliver either form listed in clause
(e)(i) (with respect to a complete exemption under an income
tax treaty or that the income is effectively connected with
the conduct of a trade or business in the United States), (x)
a certificate of a duly authorized officer of such
Non-Domestic Lender to the effect that such Non-Domestic
Lender is not (A) a "bank" within the meaning of Section
881(c)(3)(A) of the Code, (B) a "10 percent shareholder" of
Holdings or either Borrower within the meaning of Section
881(c)(3)(B) of the Code, or (C) a controlled foreign
corporation receiving interest from a related person within
the meaning of Section 881(c)(3)(C) of the Code (such
certificate, an "Exemption Certificate") and (y) two duly
completed copies of Internal Revenue Service Form W-8BEN (with
respect to the portfolio interest exemption) or applicable
successor form, certifying that such Lender is entitled to an
exemption from U.S. federal withholding tax on payments of
interest.
(f) Notwithstanding any provision herein to the contrary,
neither Holdings nor either Borrower shall be obligated to gross up any
payments to any Lender pursuant to clause (a)(i), or to indemnify any
Lender pursuant to clause (d), in respect of United States federal
withholding taxes to the extent imposed as a result of (i) the failure
of such Lender to deliver to Holdings or the Borrowers, as the case may
be, the form or forms and/or an Exemption Certificate, as applicable to
such Lender, pursuant to clause (e), (ii) such form or forms and/or
Exemption Certificate not establishing a complete exemption from U.S.
federal withholding tax or the information or certifications made
therein by the Lender being untrue or inaccurate on the date delivered
in any material respect, or (iii) the Lender designating a successor
lending office at which it maintains its Loans which has the effect of
causing such Lender to become obligated for tax payments in excess of
those in effect immediately prior to such designation; provided,
however, that Holdings shall, and the Borrowers shall jointly and
severally, be obligated to gross up any payments to any such Lender
pursuant to clause (a)(i), and to indemnify any such Lender pursuant to
clause (d), in respect of United States federal withholding taxes if
(i) any such failure to deliver a form or forms or an Exemption
Certificate or the failure of such form or forms or Exemption
Certificate to establish a complete exemption from U.S. federal
withholding tax or inaccuracy or untruth contained therein resulted
from a change in any applicable statute, treaty, regulation or other
applicable law or any official interpretation of any of the foregoing
occurring after the date hereof such Lender acquired its interest in
the Loan Documents, which change rendered such Lender no longer legally
entitled to deliver such form or forms or Exemption Certificate or
otherwise ineligible for a complete exemption from U.S. federal
withholding tax, or rendered the information or certifications made in
such form or forms or Exemption Certificate untrue or inaccurate in a
material respect or (ii) the obligation to gross up payments to any
such Lender pursuant to clause (a)(i) or to indemnify any such Lender
pursuant to clause (d) is with respect to an Assignee Lender that
becomes an Assignee Lender as a result of an assignment made at the
request of the Borrowers.
-66-
(g) If Holdings or either Borrower, as the case may be, is
required to pay additional amounts to or for the account of a Lender
pursuant to this Section 4.6, then such Lender will agree to use
reasonable efforts to change the jurisdiction of its applicable lending
office or take any other action reasonably requested by Holdings or
either Borrower, as the case may be, so as to eliminate or reduce any
such additional payment which may thereafter accrue if such change
would not, in the sole good faith determination of such Lender, be
otherwise disadvantageous to such Lender (taking into account any
reimbursement of costs that Holdings or either Borrower, as the case
may be, may elect to offer).
(h) If a Secured Party receives a refund of any Taxes or Other
Taxes as to which it has been indemnified by Holdings and the Borrowers
or with respect to which Holdings or either Borrower, as the case may
be, has paid additional amounts pursuant to this Section 4.6, which
refund in the good faith judgment of such Secured Party is attributable
to such payment made by Holdings or either Borrower, as the case may
be, shall reimburse Holdings or either Borrower, as the case may be,
for such amount as the Secured Party determines to be the proportion of
the refund as will leave it, after such reimbursement, in no better or
worse position than it would have been in if the payment had not been
required. A Secured Party shall not be obliged to disclose information
regarding its tax affairs or computations to Holdings and the Borrowers
in connection with this clause (h) or any other provision of this
Section 4.6.
SECTION 4.7. Payments, Computations, etc. Unless otherwise expressly
provided in a Loan Document, all payments by each Borrower pursuant to each Loan
Document shall be made by such Borrower to the Administrative Agent for the pro
rata account of the Secured Parties entitled to receive such payment. All
payments shall be made without setoff, deduction (except as permitted under
Section 4.6(f)) or counterclaim not later than 11:00 a.m. on the date due in
same day or immediately available funds to such account as the Administrative
Agent shall specify from time to time by notice to the Borrowers. Funds received
after that time shall be deemed to have been received by the Administrative
Agent on the next succeeding Business Day.
-67-
The Administrative Agent shall promptly remit in same day funds to each Secured
Party its share, if any, of such payments received by the Administrative Agent
for the account of such Secured Party. All interest (including interest on LIBO
Rate Loans) and fees shall be computed on the basis of the actual number of days
(including the first day but excluding the last day) occurring during the period
for which such interest or fee is payable over a year comprised of 360 days (or,
in the case of interest on a Base Rate Loan (calculated at other than the
Federal Funds Rate), 365 days or, if appropriate, 366 days). Payments due on
other than a Business Day shall (except as otherwise required by clause (c) of
the definition of the term "Interest Period") be made on the next succeeding
Business Day and such extension of time shall be included in computing interest
and fees in connection with that payment.
SECTION 4.8. Sharing of Payments. If any Secured Party shall obtain any
payment or other recovery (whether voluntary, involuntary, by application of
setoff or otherwise) on account of any Credit Extension or Reimbursement
Obligation (other than pursuant to the terms of Sections 4.3, 4.4, 4.5 or 4.6)
in excess of its pro rata share of payments obtained by all Secured Parties,
such Secured Party shall purchase from the other Secured Parties such
participations in Credit Extensions made by them as shall be necessary to cause
such purchasing Secured Party to share the excess payment or other recovery
ratably (to the extent such other Secured Parties were entitled to receive a
portion of such payment or recovery) with each of them; provided, however, that
if all or any portion of the excess payment or other recovery is thereafter
recovered from such purchasing Secured Party, the purchase shall be rescinded
and each Secured Party which has sold a participation to the purchasing Secured
Party shall repay to the purchasing Secured Party the purchase price to the
ratable extent of such recovery together with an amount equal to such selling
Secured Party's ratable share (according to the proportion of (a) the amount of
such selling Secured Party's required repayment to the purchasing Secured Party
to (b) total amount so recovered from the purchasing Secured Party) of any
interest or other amount paid or payable by the purchasing Secured Party in
respect of the total amount so recovered. Each Borrower agrees that any Secured
Party purchasing a participation from another Secured Party pursuant to this
Section may, to the fullest extent permitted by law, exercise all its rights of
payment (including pursuant to Section 4.9) with respect to such participation
as fully as if such Secured Party were the direct creditor of such Borrower in
the amount of such participation. If under any applicable bankruptcy, insolvency
or other similar law any Secured Party receives a secured claim in lieu of a
setoff to which this Section applies, such Secured Party shall, to the extent
practicable, exercise its rights in respect of such secured claim in a manner
consistent with the rights of the Secured Parties entitled under this Section to
share in the benefits of any recovery on such secured claim.
SECTION 4.9. Setoff. Each Secured Party shall, upon the occurrence and
during the continuance of any Default described in clauses (a) through (d) of
Section 8.1.9 or, with the consent of the Required Lenders, upon the occurrence
and during the continuance of any other Event of Default, have the right to
appropriate and apply to the payment of the monetary Obligations owing to it
(whether or not then due), and (as security for such Obligations) each Borrower
hereby grants to each Secured Party a continuing security interest in, any and
all balances, credits, deposits, accounts or moneys of such Borrower then or
thereafter maintained with such Secured Party; provided, however, that any such
appropriation and application shall be subject to the provisions of Section 4.8.
Each Secured Party agrees promptly to notify the applicable Borrower and the
Administrative Agent after any such setoff and application made by such Secured
Party; provided, however, that the failure to give such notice shall not affect
the validity of such setoff and application. The rights of each Secured Party
under this Section are in addition to other rights and remedies (including other
rights of setoff under applicable law or otherwise) which such Secured Party may
have.
-68-
SECTION 4.10. Replacement of Lenders. If any Lender (an "Affected
Lender") (a) is a Defaulting Lender or (b) makes demand upon the Borrowers for
(or if the Borrowers are otherwise required to pay) amounts pursuant to Section
4.3, 4.5 or 4.6 and the payment of such additional amounts is, and is likely to
continue to be, more onerous in the reasonable judgment of the Borrowers than
with respect to the other Lenders, the Borrowers may, within 30 days of receipt
by the Borrowers of such demand, give notice (a "Replacement Notice") in writing
to the Agents and such Affected Lender of their intention to replace such
Affected Lender with a financial institution (a "Replacement Lender") designated
in such Replacement Notice; provided, however, that no Replacement Notice may be
given by the Borrowers if (i) such replacement conflicts with any applicable law
or regulation, (ii) any Event of Default shall have occurred and be continuing
at the time of such replacement or (iii) prior to any such replacement, such
Lender shall have taken any necessary action under Section 4.5 or 4.6 (if
applicable) so as to eliminate the continued need for payment of amounts owing
pursuant to Section 4.5 or 4.6. If the Agents shall, in the exercise of their
reasonable discretion and within 10 days of their receipt of such Replacement
Notice, notify the Borrowers and such Affected Lender in writing that the
designated financial institution is satisfactory to the Agents (such consent not
being required where the Replacement Lender is already a Lender), then such
Affected Lender shall, subject to the payment of any amounts due pursuant to
Section 4.4, assign, in accordance with Section 11.11.1, all of its Commitments,
Loans, Notes (if any) and other rights and obligations under this Agreement and
all other Loan Documents (including Reimbursement Obligations, if applicable) to
such designated financial institution; provided, however, that (i) such
assignment shall be without recourse, representation or warranty and shall be on
terms and conditions reasonably satisfactory to such Affected Lender and such
designated financial institution, (ii) the purchase price paid by such
designated financial institution shall be in the amount of such Affected
Lender's Loans and its Percentage of outstanding Reimbursement Obligations,
together with all accrued and unpaid interest and fees in respect thereof, plus
all other amounts (including the amounts demanded and unreimbursed under
Sections 4.3, 4.5 and 4.6), owing to such Affected Lender hereunder and (iii)
the Borrowers shall pay to the Affected Lender and the Agents all reasonable
out-of-pocket expenses incurred by the Affected Lender and the Agents in
connection with such assignment and assumption (including the processing fees
described in Section 11.11.1). Upon the effective date of an assignment
described above, the Replacement Lender shall become a "Lender" for all purposes
under this Agreement and the other Loan Documents.
-69-
ARTICLE V
CONDITIONS TO CREDIT EXTENSIONS
SECTION 5.1. [INTENTIONALLY OMITTED]
SECTION 5.2. All Credit Extensions. The obligation of each Lender and
each Issuer to make any Credit Extension (including the initial Credit
Extension) shall be subject to and the satisfaction of each of the conditions
precedent set forth below.
SECTION 5.2.1. Compliance with Warranties, No Default, etc.
Concurrently with and immediately after giving effect to any Credit Extension,
the following statements shall be true and correct:
(a) the representations and warranties set forth in each Loan
Document shall, in each case, be true and correct with the same effect
as if then made (unless stated to relate solely to an earlier date, in
which case such representations and warranties shall be true and
correct in all material respects as of such earlier date); and
(b) no Default shall have then occurred and be continuing.
SECTION 5.2.2. Credit Extension Request, etc. Subject to Section 2.3.2,
the Administrative Agent shall have received a Borrowing Request if Loans are
being requested, or an Issuance Request if a Letter of Credit is being requested
or extended. Each of the delivery of a Borrowing Request or Issuance Request and
the acceptance by the applicable Borrower of the proceeds of such Credit
Extension shall constitute a representation and warranty by such Borrower that
on the date of such Credit Extension (concurrently with and immediately after
giving effect to such Credit Extension and the application of the proceeds
thereof) the statements made in Section 5.2.1 are true and correct in all
material respects.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Secured Parties to enter into this Agreement and
to make Credit Extensions hereunder, Holdings and each Borrower represents and
warrants to each Secured Party as set forth in this Article.
SECTION 6.1. Organization, etc. Holdings, each Borrower and each of
their respective Subsidiaries is validly organized and existing and in good
standing under the laws of the state or jurisdiction of its incorporation or
organization, is duly qualified to do business and is in good standing as a
foreign entity in each jurisdiction where the nature of its business requires
such qualification (except where the failure to be so qualified or in good
standing as a foreign entity could not reasonably be expected to have a Material
Adverse Effect), and has full power and authority and holds all requisite
governmental licenses, permits and other approvals to enter into and perform its
Obligations under each Loan Document to which it is a party and to own and hold
under lease its property and to conduct its business substantially as currently
conducted by it (except where the failure to hold any such license, permit or
other approval could not reasonably be expected to have a Material Adverse
Effect).
-70-
SECTION 6.2. Due Authorization, Non-Contravention, etc. The execution,
delivery and performance by each Borrower of each Loan Document executed or to
be executed by it, the execution, delivery and performance by each other Obligor
of each Loan Document executed or to be executed by it, such Borrower's and each
such other Obligor's participation in the consummation of all aspects of the
Transaction, and the execution, delivery and performance by such Borrower or (if
applicable) any Obligor of the agreements executed and delivered in connection
with the Transaction are in each case within each such Person's powers, have
been duly authorized by all necessary action, and do not
(a) contravene any (i) Obligor's Organic Documents, (ii)
material contractual restriction binding on any Obligor, (iii) court
decree or order binding on any Obligor or (iv) law or governmental
regulation applicable to any Obligor; or
(b) result in, or require the creation or imposition of, any
Lien on any Obligor's properties (except as permitted by this
Agreement).
SECTION 6.3. Government Approval, Regulation, etc. No authorization or
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body or other Person (other than those that have been
duly obtained or made and which are in full force and effect) is required for
the consummation of the Transaction or the due execution, delivery or
performance by Holdings, either Borrower or any other Obligor of any Loan
Document to which it is a party, or for the due execution, delivery and/or
performance of Transaction Documents, in each case by the parties thereto or the
consummation of the Transaction (except where the failure to obtain or make any
such authorization, approval, action, notice or filing could not reasonably be
expected to have a Material Adverse Effect). None of Holdings, either Borrower
or any of their respective Subsidiaries is an "investment company" within the
meaning of the Investment Company Act of 1940, as amended, or 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.
SECTION 6.4. Validity, etc. (a) This Agreement and the Transaction
Documents to which it is a party constitute, and each other Loan Document
executed by each of Holdings and each Borrower will, on the due execution and
delivery thereof, constitute, the legal, valid and binding obligations of
Holdings and such Borrower, enforceable against Holdings and such Borrower in
accordance with their respective terms and (b) each Loan Document executed by
each other Obligor will, on the due execution and delivery thereof by such
Obligor, constitute the legal, valid and binding obligation of such Obligor
enforceable against such Obligor in accordance with its terms (except, in any
case under clause (a) or (b) above, as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally and by principles of equity).
-71-
SECTION 6.5. Financial Information.
(a) The consolidated financial statements of Holdings and each
Borrower furnished to the Agents and each Lender pursuant to Section
5.1.8(a)(i) of the Existing Credit Agreement have been prepared in
accordance with GAAP consistently applied, and present fairly the
consolidated financial condition of the Persons covered thereby as at
the dates thereof and the results of their operations for the periods
then ended.
(b) The consolidated pro forma balance sheets furnished to the
Agents and each Lender pursuant to the Amendment Agreement and Section
5.1.8(a)(ii) of the Existing Credit Agreement fairly present in all
material respects the pro forma estimated financial condition of each
of Holdings and each Borrower as of such date.
(c) The Projections were prepared by Holdings in good faith on
the basis of information and assumptions that Holdings and its senior
management believed to be reasonable as of the date of the Projections
and such assumptions are reasonable as of the Closing Date.
(d) All balance sheets, all statements of operations,
shareholders' equity and cash flow and all other financial information
of each of Holdings and each Borrower and their respective Subsidiaries
furnished pursuant to Section 7.1.1 have been and will for periods
following the Closing Date be prepared in accordance with GAAP
consistently applied, and do or will present fairly the consolidated
financial condition of the Persons covered thereby as at the dates
thereof and the results of their operations for the periods then ended.
SECTION 6.6. No Material Adverse Change. There has been no material
adverse change in the business, assets, condition (financial or otherwise),
operations, performance, properties, or Projections of Holdings, the Borrowers
and their respective Subsidiaries, taken as a whole, since December 31, 1999.
SECTION 6.7. Litigation, Labor Controversies, etc. There is no pending
or, to the knowledge of any Responsible Officer of Holdings, either Borrower or
any of their respective Subsidiaries, threatened litigation, action, proceeding
or labor controversy
(a) except as disclosed in Item 6.7 of the Disclosure
Schedule, affecting Holdings, such Borrower, any such Subsidiaries or
any other Obligor, or any of their respective properties, businesses,
assets or revenues, which could reasonably be expected
to have a Material Adverse Effect, and no adverse development has
occurred in any labor controversy, litigation, arbitration or
governmental investigation or proceeding disclosed in Item 6.7 which
could reasonably be expected to have a Material Adverse Effect; or
-72-
(b) which purports to affect the legality, validity or
enforceability of any Loan Document, the Transaction Documents or the
Transaction.
SECTION 6.8. Subsidiaries. Holdings has no direct Subsidiaries other
than its Unrestricted Subsidiaries and the Borrowers. Each Borrower has no
Subsidiaries, except those Subsidiaries
(a) which are identified in Item 6.8 of the Disclosure
Schedule; or
(b) which are permitted to have been organized or acquired in
accordance with Section 7.2.5 or 7.2.10.
SECTION 6.9. Ownership of Properties. Holdings, each Borrower and each
of their respective Subsidiaries owns (i) in the case of owned real property,
good and marketable fee title to, and (ii) in the case of owned personal
property, good and valid title to, or, in the case of leased real or personal
property, valid and enforceable leasehold interests (as the case may be) in, all
of its properties and assets, real and personal, tangible and intangible, of any
nature whatsoever, free and clear in each case of all Liens or claims, except
for Liens permitted pursuant to Section 7.2.3.
SECTION 6.10. Taxes. Holdings, each Borrower and each of their
respective Subsidiaries has filed all material tax returns and reports required
by law to have been filed by it and has paid or caused to be paid all taxes and
governmental charges thereby shown to be due and owing, except (i) any such
taxes or charges which are being contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books or (ii) to the extent that a failure to do so could
not reasonably be expected to have a Material Adverse Effect.
SECTION 6.11. Pension and Welfare Plans. During the
twelve-consecutive-month period prior to the Closing Date and prior to the date
of any Credit Extension hereunder, no steps have been taken to terminate any
Pension Plan, and no contribution failure has occurred with respect to any
Pension Plan sufficient to give rise to a Lien under Section 302(f) of ERISA. No
condition exists or event or transaction has occurred with respect to any
Pension Plan which might result in the incurrence by Holdings, either Borrower
or any member of the Controlled Group of any material liability, fine or
penalty. Except as disclosed in Item 6.11 of the Disclosure Schedule, none of
Holdings, either Borrower or any member of the Controlled Group has any
contingent liability with respect to any post-retirement benefit under a Welfare
Plan, other than liability for continuation coverage described in Part 6 of
Title I of ERISA.
-73-
SECTION 6.12. Environmental Warranties. Except as set forth in Item
6.12 of the Disclosure Schedule, and except as could not be reasonably expected
to have a Material Adverse Effect:
(a) the operations of Holdings, the Borrowers and their
respective Subsidiaries are in material compliance with all
Environmental Laws;
(b) there is no pending or threatened litigation, action or
proceeding against Holdings, either Borrower or any of their respective
Subsidiaries arising out of an alleged violation of any Environmental
Law;
(c) there have been no Releases of Hazardous Materials at, on
or under any property now owned or leased by Holdings, either Borrower
or any of their respective Subsidiaries;
(d) Holdings, each Borrower and each of their respective
Subsidiaries have been issued and are in material compliance with all
permits, certificates, approvals, licenses and other authorizations
required under Environmental Laws for the conduct of their operations;
(e) no property now owned or leased by Holdings, either
Borrower or any of their respective Subsidiaries is listed or, to the
knowledge of any Responsible Officer of Holdings or either Borrower,
proposed for listing (with respect to owned property only), on the
National Priorities List pursuant to CERCLA, on the CERCLIS or on any
similar state list of sites, requiring investigation or clean-up;
(f) to the knowledge of any Responsible Officer of Holdings or
either Borrower, there are no underground storage tanks, active or
abandoned, including petroleum storage tanks, on or under any property
now owned or leased by Holdings, either Borrower or any of their
respective Subsidiaries that, singly or in the aggregate, have, or
could reasonably be expected to have, a Material Adverse Effect;
(g) none of Holdings, either Borrower nor any of their
respective Subsidiaries has directly transported or directly arranged
for the transportation of any Hazardous Material to any location which
is listed or proposed for listing on the National Priorities List
pursuant to CERCLA, on the CERCLIS or on any similar state list or
which is the subject of federal, state or local enforcement actions or
other investigations which may lead to material claims against
Holdings, either Borrower or any of their respective Subsidiaries for
any remedial work, damage to natural resources or personal injury,
including claims under CERCLA; and
(h) there are no polychlorinated biphenyls, and there is no
friable asbestos present at any property now or previously owned or
leased by Holdings, either Borrower or any of their respective
Subsidiaries that, singly or in the aggregate, have, or could
reasonably be expected to have, a Material Adverse Effect.
-74-
SECTION 6.13. Accuracy of Information. None of the factual information
heretofore or contemporaneously furnished in writing to any Secured Party by or
on behalf of any Obligor in connection with any Loan Document or any transaction
contemplated hereby (including the Transaction) contains any untrue statement of
a material fact, or omits to state any material fact necessary to make any
information not misleading, and no other factual information hereafter furnished
in connection with any Loan Document by or on behalf of any Obligor to any
Secured Party will contain any untrue statement of a material fact or will omit
to state any material fact necessary to make any information not misleading on
the date as of which such information is dated or certified.
SECTION 6.14. Regulations U and X. No Obligor is engaged in the
business of extending credit for the purpose of purchasing or carrying margin
stock, and no proceeds of any Credit Extensions will be used to purchase or
carry margin stock or otherwise for a purpose which violates, or would be
inconsistent with, F.R.S. Board Regulation U or Regulation X. Terms for which
meanings are provided in F.R.S. Board Regulation U or Regulation X or any
regulations substituted therefor, as from time to time in effect, are used in
this Section with such meanings.
SECTION 6.15. Issuance of Subordinated Debt; Status of Obligations as
Senior Debt, etc. Each of the Borrowers and Holdings has the power and authority
to incur the Subordinated Debt evidenced by the Subordinated Notes as provided
for under the Sub Debt Documents applicable thereto and has duly authorized,
executed and delivered the Sub Debt Documents applicable to such Subordinated
Debt. Each of the Borrowers and Holdings has issued, pursuant to due
authorization, the Subordinated Debt evidenced by the Subordinated Notes under
the applicable Sub Debt Documents, and such Sub Debt Documents constitute the
legal, valid and binding obligations of each of the Borrowers and Holdings
enforceable against it in accordance with its terms (except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally and by
principles of equity). The subordination provisions of the Subordinated Debt
contained in the Sub Debt Documents are enforceable against the holders of the
Subordinated Debt by the holder of any "Senior Debt" or similar term referring
to the Obligations (as defined in the Sub Debt Documents). All monetary
Obligations, including those to pay principal of and interest (including
post-petition interest, whether or not allowed as a claim under bankruptcy or
similar laws) on the Loans and Reimbursement Obligations, and fees and expenses
in connection therewith, constitute "Senior Debt" or similar term relating to
the monetary Obligations (as defined in the Sub Debt Documents) and all such
monetary Obligations are entitled to the benefits of the subordination created
by the Sub Debt Documents. Each of the Borrowers and Holdings acknowledges that
each Agent, each Lender and each Issuer is entering into this Agreement and is
extending its Commitments in reliance upon the subordination provisions of the
Sub Debt Documents.
-75-
SECTION 6.16. Solvency. (a) The Transaction (including, among other
things, the undertaking by Holdings of its Obligations consisting of the Credit
Extensions made on the Closing Date and the Indebtedness represented by the
Notes and the execution and delivery by the Subsidiary Guarantors of the
Subsidiary Guaranty) did not involve or result in any fraudulent transfer or
fraudulent conveyance under the provisions of Section 548 of the Bankruptcy Code
(11 U.S.C. ss.101 et seq.) or any applicable state law respecting fraudulent
transfers or fraudulent conveyances. On the Closing Date, after giving effect to
the Transaction (including, among other things, the undertaking by Holdings of
its Obligations consisting of the Credit Extensions made on the Closing Date and
the Indebtedness represented by the Notes and the execution and delivery by the
Subsidiary Guarantors of the Subsidiary Guaranty), Holdings, each Borrower and
each Subsidiary Guarantor was Solvent (taking into account rights of indemnity,
subrogation and contribution); and
(b) the incurrence by the Borrowers of the Additional Term A
Loans and the application of the proceeds thereof, will not involve or result
in any fraudulent transfer or fraudulent conveyance under the provisions of
Section 548 of the Bankruptcy Code (11 U.S.C. ss.101 et seq., as from time to
time hereafter amended, and any successor or similar statute) or any applicable
state law respecting fraudulent transfers or fraudulent conveyances. On the
Amendment Effective Date, after giving effect to such incurrence and
application, Holdings, each Borrower and each Subsidiary Guarantor is Solvent.
SECTION 6.17. Capitalization. On the Amendment Effective Date:
(a) The authorized Capital Securities of Holdings consists of
(i) 20,000,000 shares of common stock, $0.01 par value per share, of
which 7,014,321 shares are issued outstanding, and (ii) 20,000,000
shares of preferred stock, $0.01 par value per share, of which
3,343,750 shares are issued and outstanding.
(b) The authorized Capital Securities of WRC consists of (i)
22,000,000 shares of common stock, $0.01 par value per share, of which
20,000,000 shares are classified as Common Stock of which 2,830,000
shares are issued and outstanding, and of which 1,000,000 shares are
classified as Class A Non-Voting Common Stock and of which 1,000,000
shares are classified as Class B Non-Voting Common Stock, none of which
are issued and outstanding, (ii) 422,874 warrants to purchase shares of
such WRC Common Stock, and (iii) 20,000,000 shares of preferred stock,
$0.01 par value per share, of which 3,000,000 shares are issued and
outstanding.
(c) The authorized Capital Securities of CLI consists of (i)
20,000 shares of common stock, $0.01 par value per share, of which
10,000 shares were issued and outstanding, (ii) 1,495 warrants to
purchase shares of such CLI Common Stock and (iii) 10,000,000 shares of
preferred stock, $0.01 par value per share, of which no such shares are
issued and outstanding.
-76-
(d) The authorized Capital Securities of ChildU consists of
1,000 shares of common stock, $0.01 par value per share, of which 1,000
shares are issued and outstanding.
(e) All outstanding shares of Capital Securities of Holdings,
WRC, CLI and ChildU (to the extent owned by Holdings or its
Subsidiaries) are owned by the persons and in the amounts set forth on
Items 6.17(a), 6.17(b), 6.17(c) and 6.17(d) of the Disclosure Schedule,
respectively.
(f) All of such outstanding Capital Securities of Holdings,
WRC, CLI and ChildU are duly and validly issued, are fully paid and
nonassessable and are free of preemptive rights, and all of the Capital
Securities of WRC and CLI (other than the WRC PIK Preferred Equity and
the CLI PIK Preferred Equity, if any) are and will be subject to
drag-along rights available to certain other holders of the common
stock of WRC or CLI, as the case may be.
ARTICLE VII
COVENANTS
SECTION 7.1. Affirmative Covenants. Holdings and each Borrower agrees
with each Lender, each Issuer and each Agent that until the Termination Date
has occurred, Holdings and such Borrower will, and will cause their respective
Subsidiaries to, perform or cause to be performed the obligations set forth in
this Section 7.1.
SECTION 7.1.1. Financial Information, Reports, Notices, etc. Holdings
and each Borrower will furnish or cause to be furnished to the Agents (with
sufficient copies for each Lender) copies of the following financial statements,
reports, notices and information:
(a) as soon as available and in any event within 30 days after
the end of each calendar month (other than a calendar month which is
also the third month of a Fiscal Quarter), (i) unaudited consolidated
balance sheets of Holdings and its Restricted Subsidiaries as of the
end of such calendar month, (ii) consolidated statements of income and
cash flow of Holdings and its Restricted Subsidiaries for such calendar
month and for the period commencing at the end of the previous Fiscal
Year and ending with the end of such calendar month, and including (in
the case of consolidated statements of income) in comparative form the
figures for the corresponding calendar month in, and year to date
portion of, the immediately preceding Fiscal Year and as compared to
the budget for the current Fiscal Year, in each case certified by the
chief financial or accounting Authorized Officer of Holdings as fairly
presenting the consolidated financial condition of Holdings and its
Restricted Subsidiaries and as having been prepared in accordance with
GAAP consistently applied, and (iii) a schedule showing the computation
of the estimated Fixed Charge Coverage Ratio for such calendar month;
-77-
(b) as soon as available and in any event within 50 days after
the end of each of the first three Fiscal Quarters of each Fiscal Year,
unaudited consolidated balance sheets of (i) Holdings and its
Restricted Subsidiaries, (ii) Holdings and its Subsidiaries, (iii) each
Borrower and its respective Restricted Subsidiaries and (iv) each
Borrower and its respective Subsidiaries, in each case as of the end of
such Fiscal Quarter, and consolidated statements of income and cash
flow of (i) Holdings and its Restricted Subsidiaries, (ii) Holdings and
its Subsidiaries, (iii) each Borrower and its respective Restricted
Subsidiaries and (iv) each Borrower and its respective Subsidiaries for
such Fiscal Quarter and for the period commencing at the end of the
previous Fiscal Year and ending with the end of such Fiscal Quarter,
and including (in each case), in comparative form the figures for the
corresponding Fiscal Quarter in, and year to date portion of, the
immediately preceding Fiscal Year and as compared to the budget for the
current Fiscal Year, certified by the chief financial or accounting
Authorized Officer of Holdings as fairly presenting the consolidated
financial condition of (i) Holdings and its Restricted Subsidiaries,
(ii) Holdings and its Subsidiaries, (iii) each Borrower and its
respective Restricted Subsidiaries and (iv) each Borrower and its
respective Subsidiaries and as having been prepared in accordance with
GAAP consistently applied;
(c) as soon as available and in any event within 95 days after
the end of each Fiscal Year, a copy of (i) the audited consolidated
balance sheets of Holdings and its Subsidiaries and the unaudited
consolidated balance sheets of Holdings and its Restricted
Subsidiaries, (ii) the unaudited consolidated balance sheets of (A)
each Borrower and its respective Restricted Subsidiaries and (B) each
Borrower and its respective Subsidiaries, (iii) the related audited
consolidated statements of income and cash flow of Holdings and its
Subsidiaries and the related unaudited consolidated statements of
income and cash flow of Holdings and its Restricted Subsidiaries, and
(iv) the related unaudited statements of income and cash flow of (A)
each Borrower and its respective Restricted Subsidiaries and (B) each
Borrower and its respective Subsidiaries for such Fiscal Year, setting
forth, in each case, in comparative form the figures for the
immediately preceding Fiscal Year and, in the case of such audited
consolidated balance sheets and statements of income and cash flow of
Holdings and its Subsidiaries, audited (without any Impermissible
Qualification) by Deloitte & Touche LLP or such other independent
public accountants acceptable to the Agents, which shall state that, in
performing the examination necessary to deliver such audited financial
statements, no knowledge was obtained of any Event of Default relating
to Section 7.2.4 and, in the case of such unaudited consolidated
balance sheets and statements of income and cash flow of Holdings and
each Borrower described above, certified as complete and correct by the
chief financial or accounting Authorized Officer of Holdings;
(d) concurrently with the delivery of the financial
information pursuant to clauses (b) and (c), a Compliance Certificate,
executed by the chief financial or accounting Authorized Officer of
Holdings, showing compliance with the financial covenants tested for
such period set forth in Section 7.2.4 and stating that no Default has
occurred and is continuing (or, if a Default has occurred, specifying
the details of such Default and the action that Holdings, the Borrowers
or an Obligor has taken or proposes to take with respect thereto);
-78-
(e) as soon as available and in any event no later than the
earlier to occur of (i) 30 days after the approval thereof by the Board
of Directors of Holdings and (ii) 90 days after the first day of the
Fiscal Year of Holdings, an annual budget, prepared on a monthly basis
for such Fiscal Year containing consolidated projected financial
statements (including balance sheets and statements of operations,
stockholders' equity and cash flows) of (i) Holdings and its Restricted
Subsidiaries and (ii) Holdings and its Subsidiaries, and (iii) each
Borrower and its respective Restricted Subsidiaries and (iv) each
Borrower and its respective Subsidiaries for such succeeding Fiscal
Year and each subsequent Fiscal Year, prepared in a manner consistent
with the Projections;
(f) as soon as possible and in any event within five Business
Days after any Responsible Officer of Holdings, either Borrower or any
Subsidiary Guarantor obtains knowledge of the occurrence of a Default,
a statement of an Authorized Officer of the Borrowers setting forth
details of such Default and the action which Holdings, the Borrowers or
such Obligor has taken and proposes to take with respect thereto;
(g) as soon as possible and in any event within five Business
Days after any Responsible Officer of Holdings, either Borrower or any
Subsidiary Guarantor obtains knowledge of (i) the occurrence of any
material adverse development with respect to any litigation, action,
proceeding or labor controversy described in Item 6.7 of the Disclosure
Schedule or (ii) the commencement of any litigation, action, proceeding
or labor controversy of the type and materiality described in Section
6.7, notice thereof and, to the extent either Agent reasonably
requests, copies of all documentation relating thereto;
(h) promptly after the sending or filing thereof, copies of
all reports, notices, prospectuses and registration statements which
any Obligor files with the SEC or any national securities exchange;
(i) immediately upon becoming aware of (i) the institution of
any steps by any Person to terminate any Pension Plan, (ii) the failure
to make a required contribution to any Pension Plan if such failure is
sufficient to give rise to a Lien under Section 302(f) of ERISA, (iii)
the taking of any action with respect to a Pension Plan which could
result in the requirement that any Obligor furnish a bond or other
security to the PBGC or such Pension Plan, or (iv) the occurrence of
any event with respect to any Pension Plan which could result in the
incurrence by any Obligor of any material liability, fine or penalty,
notice thereof and copies of all documentation relating thereto;
-79-
(j) promptly upon receipt thereof, copies of all "management
letters" submitted to Holdings, either Borrower or any other Obligor by
the independent public accountants referred to in clause (b) in
connection with each audit made by such accountants;
(k) promptly following the mailing or receipt of any notice or
report delivered under the terms of any Subordinated Debt, copies of
such notice or report; and
(l) such other financial and other information as any Lender
or Issuer through the Administrative Agent or either Agent may from
time to time reasonably request (including information and reports in
such detail as either Agent may request with respect to the terms of
and information provided pursuant to the Compliance Certificate).
SECTION 7.1.2. Maintenance of Existence; Compliance with Laws, etc.
Holdings and each Borrower will, and will cause each of their respective
Subsidiaries to,
(a) except as otherwise permitted by Section 7.2.10, preserve
and maintain its legal existence; and
(b) comply in all material respects with all applicable laws,
rules, regulations and orders (except those the failure of which to
comply with individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect), including the payment
(before the same become delinquent), of all taxes, assessments and
governmental charges imposed upon Holdings, either Borrower or any of
their respective Subsidiaries or upon their property except to the
extent being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP
have been set aside on the books of Holdings, such Borrower or any such
Subsidiary, as applicable.
SECTION 7.1.3. Maintenance of Properties. Holdings and each Borrower
will, and will cause each of their respective Subsidiaries to, maintain,
preserve, protect and keep its and their respective properties in good repair,
working order and condition (ordinary wear and tear excepted), and make
necessary repairs, renewals and replacements so that the business carried on by
each Borrower and its Subsidiaries may be properly conducted at all times,
unless such Borrower or such Subsidiary determines in good faith that the
continued maintenance of such property is no longer economically desirable.
SECTION 7.1.4. Insurance. Holdings and each Borrower will, and will
cause each of their respective Subsidiaries to:
(a) maintain insurance on its property with financially sound
and reputable insurance companies against loss and damage in at least
the amounts (and with only those deductibles) customarily maintained,
and against such risks as are typically insured against in the same
general area, by Persons of comparable size engaged in the same or
similar business as the Borrowers and their Subsidiaries; and
-80-
(b) all worker's compensation, employer's liability insurance
or similar insurance as may be required under the laws of any state or
jurisdiction in which it may be engaged in business.
Without limiting the foregoing, all insurance policies required pursuant to
this Section shall name the Administrative Agent on behalf of Secured Parties
as mortgagee (in the case of property insurance) or additional insured (in the
case of liability insurance), as applicable, and provide that no cancellation
or modification of the policies will be made without thirty days' prior written
notice to the Administrative Agent.
SECTION 7.1.5. Books and Records. Holdings and each Borrower will, and
will cause each of their respective Subsidiaries to, keep books and records in
accordance with GAAP which accurately reflect all of its business affairs and
transactions and permit each Agent (or any other Secured Party if a Specified
Default has occurred and is then continuing) or any of their respective
representatives, at reasonable times and intervals upon reasonable notice to the
Borrowers, to visit Holdings, either Borrowers or any other Obligor's offices,
to discuss Holdings', such Borrower's or such other Obligor's financial matters
with its officers and employees, and its independent public accountants (and
Holdings and the Borrowers hereby authorizes such independent public accountant
to discuss Holdings', the Borrowers' and each Obligor's financial matters with
each Secured Party or their representatives whether or not any representative of
Holdings, either Borrower or such Obligor is present so long as Holdings, such
Borrower or such Obligor has been afforded a reasonable opportunity to be
present) and to examine (and photocopy extracts from) any of its books and
records; provided that, in the case of a visit by a Secured Party (other than an
Agent), such visit shall be coordinated by the Administrative Agent). Unless a
Specified Event shall have occurred and be continuing at the time of any such
visit or discussion with such independent public accountants, (a) costs of
visits by each Secured Party (other than each Agent) shall be for the account of
such Secured Party and (b) costs associated with any such discussions with such
independent public accountants shall be for the account of the applicable Agent
or such other applicable Secured Party.
SECTION 7.1.6. Environmental Law Covenant. Holdings and each Borrower
will, and will cause each of their respective Subsidiaries to,
(a) use and operate all of its and their facilities and
properties in material compliance with all Environmental Laws, keep all
necessary permits, approvals, certificates, licenses and other
authorizations required by applicable Environmental Laws in effect and
remain in material compliance therewith; and
(b) (i) notify the Agents within ten Business Days after any
Responsible Officer of such Obligor receives any material written
claim, complaint or notice relating to the condition of its facilities
and properties relating to compliance with Environmental Laws, and (ii)
take reasonable steps to resolve any material non-compliance with
Environmental Laws and keep its property free of any Lien imposed by
any Environmental Law.
-81-
SECTION 7.1.7. Use of Proceeds. The Borrowers shall
(a) apply the proceeds of the Loans
(i) in the case of the Term Loans, (A) to finance the
consummation of the Transaction, and (B) to pay the
transaction fees and expenses associated with the Transaction;
provided, that the aggregate amount of such transaction fees
and expenses shall not exceed $22,000,000; and
(ii) in the case of Revolving Loans and Swing Line
Loans, for post-closing working capital and general corporate
purposes of the Borrowers and their respective Subsidiaries;
and
(b) use Letters of Credit (whether standby or direct pay) only
for purposes of supporting working capital and general corporate
purposes of the Borrowers and their Subsidiary Guarantors;
provided however, that the Additional Term A Loans shall be used to finance the
▇▇▇▇▇ Acquisition and to pay related transaction fees and expenses.
SECTION 7.1.8. Future Subsidiary Guarantors, Security, etc. Holdings
and each Borrower will, and will cause each of their respective Domestic
Subsidiaries and, subject to the qualifications provided herein, Foreign
Subsidiaries to, execute any documents, Perfection Certificates, Filing
Statements, agreements and instruments, and take all further action (including
filing Mortgages not relating to leaseholds of either Borrower or any
Subsidiary) that may be required under applicable law, or that either Agent may
reasonably request, in order to effectuate the transactions contemplated by the
Loan Documents and in order to grant, preserve, protect and perfect the
perfection and priority of the security interests created or intended to be
created by the Loan Documents. Holdings and each Borrower will cause any
subsequently acquired or organized Domestic Subsidiary of such Borrower to
promptly, but in no event later than 45 days following such acquisition or
organization, execute a Subsidiary Guaranty (or a supplement thereto) and each
applicable Loan Document (including a supplement to the Security and Pledge
Agreement) in favor of the Secured Parties. In addition, from time to time,
Holdings and each Borrower will, at its cost and expense, promptly secure the
Obligations by pledging or creating, or causing to be pledged or created,
perfected security interests with respect to such of its assets and properties
as either Agent or the Required Lenders shall designate (it being understood
that it is the intent of the parties that the Obligations shall be secured by,
among other things, substantially all the assets of Holdings, the Borrowers and
their respective Domestic Subsidiaries) (including real and other properties
acquired subsequent to the Closing Date (provided that it is the intent of the
parties that neither of the Borrowers nor any of their Subsidiaries shall be
required to deliver any leasehold mortgages); provided, however, that neither
Borrower nor any Subsidiary shall be required to pledge more than 65% of the
total voting power of all classes of Securities of a first tier Foreign
Subsidiary or any shares of any other Foreign Subsidiary required to be pledged
hereunder. Such security interests and Liens will be created under the Loan
Documents in form and substance satisfactory to the Agents, and Holdings and the
Borrowers shall deliver or cause to be delivered to the Lenders all such
instruments and documents (including legal opinions, title insurance policies
and lien searches) as the Agents shall reasonably request to evidence compliance
with this Section.
-82-
SECTION 7.1.9. Rate Protection Agreements. Holdings and the Borrowers
will enter into or maintain interest rate swaps, caps, collars or similar
agreements in a notional amount equal to at least 50% of the aggregate principal
amount of the Term Loans and on such other terms as the Agents, Holdings and the
Borrowers shall mutually agree.
SECTION 7.1.10. Leased Property. (a) Holdings shall, and shall cause
each of ▇▇▇▇▇, ChildU and each of their respective Subsidiaries, as applicable,
to use its commercially reasonable best efforts (which shall not require the
payment of any fee to obtain any Landlord Waiver) to deliver to the
Administrative Agent no later than 30 days after the Amendment Effective Date a
Landlord Waiver executed by the lessor of any real property that is currently
leased by ▇▇▇▇▇, ChildU or any of their respective Subsidiaries for a term
ending subsequent to the first anniversary of the Amendment Effective Date in
any state which by statute grants such lessor a "landlord's" (or similar) Lien
which is superior to that of the Administrative Agent and to the extent any such
Landlord Waiver is not so executed and delivered, a written explanation of
Holdings as to why Holdings, ▇▇▇▇▇, ChildU or such Subsidiary, as the case may
be, was unable to obtain such Landlord Waiver.
(b) Prior to entering into any new lease of real property or renewing
any existing lease of real property following the Closing Date, each of Holdings
and each Borrower shall, and shall cause each of its Subsidiaries to, use its
commercially reasonable best efforts to deliver to the Administrative Agent a
Landlord Waiver executed by the lessor of any real property that is to be leased
by Holdings, such Borrower or such Subsidiary for a term in excess of one year
in any state which by statute grants such lessor a "landlord's" (or similar)
Lien which is superior to that of the Administrative Agent and to the extent any
such Landlord Waiver is not so executed and delivered, a written explanation of
Holdings as to why Holdings, such Borrower or such Subsidiary, as the case may
be, was unable to obtain such Landlord Waiver.
SECTION 7.1.11. Additional Opinions. Within 45 days following the
Amendment Effective Date, the Borrowers shall have caused to be delivered to the
Agents, in form and substance satisfactory to the Agents, letters of opinion
relating to the protection of Collateral (as defined in the Security and Pledge
Agreement) obtained pursuant to the ChildU Acquisition and the ThinkBox
Investment, substantially all of which is located in the states set forth in
Item 7.1.11 of the Disclosure Schedule, from local counsel reasonably
satisfactory to the Agents.
-83-
SECTION 7.1.12. Preservation of Corporate Existence. Holdings will do
or cause to be done all things necessary to preserve, renew and keep in full
force and effect the legal existence of each Unrestricted Subsidiary and
maintain such legal existence separate from that of Holdings or the Borrowers or
any of their Restricted Subsidiaries, including maintenance of separate
financial statements.
SECTION 7.2. Negative Covenants. Holdings and each Borrower covenants
and agrees with each Lender, each Issuer and each Agent that until the
Termination Date has occurred, Holdings and such Borrower will, and will cause
each of its respective Subsidiaries to, perform or cause to be performed the
obligations set forth in this Section 7.2.
SECTION 7.2.1. Business Activities. Holdings and each Borrower will
not, and will not permit any of their respective Subsidiaries to, engage in any
business activity except those business activities engaged in on the date of
this Agreement and activities reasonably incidental or related thereto. Holdings
will not engage in any business activity other than (a) its direct ownership of
the Capital Securities of each of WRC, CLI, ChildU and ThinkBox and its indirect
ownership of the Capital Securities of each Subsidiary of each Borrower and
ChildU and ThinkBox and (b) its compliance with the obligations applicable to it
under the Loan Documents and the Transaction Documents. Without limiting the
generality of the immediately preceding sentence, Holdings will not (i) create,
incur, assume or suffer to exist any Indebtedness (other than Indebtedness under
this Agreement or any other Loan Document, Indebtedness permitted to be incurred
by it pursuant to Section 7.2.2(d) or any Subordinated Debt pursuant to clause
(h) (or (m) (but only to the extent that it refinances any Subordinated Debt
incurred under clause (h))) of Section 7.2.2), (ii) create, assume, or suffer to
exist any Lien upon, or grant any options or other rights with respect to, any
of its revenues, property or other assets, whether now owned or hereafter
acquired (other than pursuant to the Loan Documents), (other than any Liens
permitted by Section 7.2.3) (iii) wind-up, liquidate or dissolve itself (or
suffer to exist any of the foregoing), or consolidate or amalgamate with or
merge into or with any other Person, or convey, sell, transfer, lease or
otherwise dispose of all or any part of its assets, in one transaction or a
series of transactions, to any Person or Persons, (iv) create, incur, assume or
suffer to exist any Investment in any Person (other than Investments permitted
pursuant to Section 7.2.5) or (v) permit to be taken any action that would
result in a Change in Control.
SECTION 7.2.2. Indebtedness. Holdings and each Borrower will not, and
will not permit any of their respective Subsidiaries to, create, incur, assume
or permit to exist any Indebtedness, other than:
(a) Indebtedness in respect of the monetary Obligations;
(b) until the Closing Date, Indebtedness that is to be repaid
in full as further identified in Item 7.2.2(b) of the Disclosure
Schedule;
-84-
(c) Indebtedness existing as of the Closing Date which is
identified in Item 7.2.2(c) of the Disclosure Schedule;
(d) unsecured Indebtedness of Holdings, the Borrowers and
their respective Subsidiaries (i) incurred in the ordinary course of
business of Holdings, such Borrower and its Subsidiaries (including
open accounts extended by suppliers on normal trade terms in connection
with purchases of goods and services which are not overdue for a period
of more than 120 days or, if overdue for more than 120 days, as to
which a dispute exists and adequate reserves in conformity with GAAP
have been established on the books of Holdings, such Borrower or such
Subsidiary) and (ii) in respect of performance, surety or appeal bonds
provided in the ordinary course of business, but excluding (in each
case), Indebtedness incurred through the borrowing of money or
Contingent Liabilities in respect thereof (provided, however, that the
amount of outstanding unsecured Indebtedness incurred by Holdings under
this clause (d) shall not at any time exceed $50,000);
(e) Indebtedness of the Borrowers and their respective
Subsidiaries (i) in respect of industrial revenue bonds or other
similar governmental or municipal bonds, (ii) evidencing the deferred
purchase price of newly acquired property or incurred to finance the
acquisition, construction or improvement of any fixed or capital assets
of such Borrower and its Subsidiaries (pursuant to purchase money
mortgages or otherwise, whether owed to the seller or a third party)
used in the ordinary course of business of such Borrower and its
Subsidiaries (provided, that such Indebtedness is incurred within 60
days of the acquisition or the completion of such construction or
improvement of such property) and (iii) Capitalized Lease Liabilities;
provided, that the aggregate amount of all Indebtedness outstanding
pursuant to this clause shall not at any time exceed $2,000,000;
(f) Indebtedness of any Restricted Subsidiary owing to either
Borrower or any other Restricted Subsidiary, which Indebtedness
(i) shall, if payable to either Borrower or a
Domestic Subsidiary and evidenced by one or more Intercompany
Notes, be delivered in pledge to the Administrative Agent
pursuant to the Security and Pledge Agreement, and whether or
not evidenced by a note, shall not be forgiven or otherwise
discharged for any consideration other than payment in full or
in part in cash (provided, that only the amount repaid in part
shall be discharged); and
(ii) if incurred by a Subsidiary owing to either
Borrower or a Subsidiary Guarantor, shall not (when aggregated
with the amount of Investments made by the Borrowers and the
Subsidiary Guarantors in Foreign Subsidiaries under clause
(e)(i) of Section 7.2.5), exceed $1,000,000;
-85-
(g) unsecured Indebtedness (not evidenced by a note or other
instrument) of either Borrower owing to a Restricted Subsidiary that
has previously executed and delivered to the Agents the Interco
Subordination Agreement (or a supplement thereto);
(h) unsecured Subordinated Debt of Holdings and the Borrowers
evidenced by the Subordinated Notes incurred pursuant to the terms of
the Sub Debt Documents in a principal amount not to exceed
$150,000,000, and unsecured Contingent Liabilities of the Subsidiary
Guarantors in respect of such Subordinated Debt, but only if such
Contingent Liabilities are subordinated to the Obligations on
substantially the same terms as such Subordinated Debt of Holdings and
the Borrowers is subordinated to the Obligations;
(i) Indebtedness of a Person existing at the time such Person
became a Subsidiary of either Borrower in an aggregate amount of all
such Persons not to exceed $5,000,000, but only to the extent that such
Indebtedness was not created or incurred in contemplation of such
Person becoming a Subsidiary;
(j) Indebtedness under Hedging Obligations entered into in the
ordinary course of business to limit risks of currency or interest rate
fluctuations and not for speculative purposes;
(k) the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business;
(l) Indebtedness consisting of guaranties of loans made to
officers, directors or employees of Holdings or any of its Subsidiaries
in an aggregate outstanding amount, when taken together with the loans
referred to in clause (f)(iv)(B) of Section 7.2.5, not to exceed
$7,500,000;
(m) Indebtedness which refinances Indebtedness permitted by
clauses (c), (h) and (i) above; provided, however, that after giving
effect to such refinancing, (i) the principal amount of outstanding
Indebtedness is not increased, (ii) neither the tenor nor the average
life thereof is reduced, (iii) the respective obligor or obligors shall
be the same on the refinancing Indebtedness as on the Indebtedness
being refinanced, (iv) the security, if any, for the refinancing
Indebtedness shall be the same as that for the Indebtedness being
refinanced (except to the extent that less security is granted to
holders of refinancing Indebtedness), (v) the holders of refinancing
Indebtedness are not afforded covenants, defaults, rights or remedies
more burdensome to the obligor or obligors than those contained in the
Indebtedness being refinanced and (vi) the refinancing Indebtedness is
subordinated to the same degree, if any, as the Indebtedness being
refinanced;
(n) Contingent Liabilities of Holdings and the Borrowers in
respect of Indebtedness consisting of guaranties made by Holdings and
the Borrowers in respect of Indebtedness of the Subsidiary Guarantors
of the type permitted and described in clause (d)(i) above, in an
aggregate amount not to exceed at any time outstanding $1,500,000; and
-86-
(o) other Indebtedness of the Borrowers and their respective
Subsidiaries (other than Indebtedness of Foreign Subsidiaries owing to
either Borrower or any of its Domestic Subsidiaries) in an aggregate
amount at any time outstanding not to exceed $1,000,000.
provided, however, that no Indebtedness otherwise permitted by clauses (f)(ii),
(h), (i) or (m) shall be assumed or otherwise incurred if a Specified Default
has occurred and is then continuing or would result therefrom.
SECTION 7.2.3. Liens. Holdings and each Borrower will not, and will not
permit any of their respective Subsidiaries to, create, incur, assume or permit
to exist any Lien upon any of its property (including Capital Securities of any
Person), revenues or assets, whether now owned or hereafter acquired, except:
(a) Liens securing payment of the monetary Obligations;
(b) until the Closing Date, Liens securing payment of
Indebtedness of the type described in clause (b) of Section 7.2.2;
(c) Liens existing as of the Closing Date and disclosed in
Item 7.2.3(c) of the Disclosure Schedule securing Indebtedness
described in clause (c) of Section 7.2.2, and any refinancing,
refunding, renewal or extension of such Indebtedness; provided, that no
such Lien shall encumber any additional property and the amount of
Indebtedness secured by such Lien is not increased from that existing
on the Closing Date (as such Indebtedness may have been permanently
reduced subsequent to the Closing Date);
(d) Liens securing Indebtedness of the type permitted under
clause (e) of Section 7.2.2; provided, that (i) such Lien is granted
within 90 days after such Indebtedness is incurred, (ii) the
Indebtedness secured thereby does not exceed 80% of the cost of the
applicable property, improvements or equipment at the time of such
acquisition (or construction) and (iii) such Lien secures only the
assets that are the subject of the Indebtedness referred to in such
clause;
(e) Liens securing Indebtedness permitted by clause (i) of
Section 7.2.2; provided, that such Liens existed prior to such Person
becoming a Subsidiary, were not created in anticipation thereof and
attach only to specific tangible assets of such Person (and not assets
of such Person generally);
(f) Liens in favor of carriers, warehousemen, mechanics,
materialmen and landlords granted in the ordinary course of business
for amounts not overdue or being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance
with GAAP shall have been set aside on its books;
-87-
(g) Liens incurred or deposits made in the ordinary course of
business in connection with worker's compensation, unemployment
insurance or other forms of governmental insurance or benefits, or to
secure performance of tenders, statutory obligations, bids, leases or
other similar obligations (other than for borrowed money) entered into
in the ordinary course of business or to secure obligations on surety
and appeal bonds or performance bonds;
(h) judgment Liens in existence for less than 45 days after
the entry thereof or with respect to which execution has been stayed or
the payment of which is covered in full (subject to a customary
deductible) by insurance maintained with responsible insurance
companies and which do not otherwise result in an Event of Default
under Section 8.1.6;
(i) easements, rights-of-way, zoning restrictions, minor
defects or irregularities in title and other similar encumbrances not
interfering in any material respect with the value or use of the
property to which such Lien is attached;
(j) Liens for taxes, assessments or other governmental charges
or levies not at the time delinquent or thereafter payable without
penalty or being contested in good faith by appropriate proceedings and
for which adequate reserves in accordance with GAAP shall have been set
aside on its books;
(k) Liens (including financing statements that are filed as a
precautionary measure and undertakings to file such financing
statements) provided for in equipment leases under which either
Borrower or any of their respective Subsidiaries is the lessee;
provided that any such Lien in respect of any equipment lease is
limited to the equipment being leased under such lease and the proceeds
thereof;
(l) leases, subleases, licenses and sublicenses granted to
third parties in the ordinary course of business, in each case not
interfering in any respect with the operations or business of any
Borrower or any of its Subsidiaries or the Liens of the Administrative
Agent or the Lenders granted by the Loan Documents;
(m) banker's liens and rights of offset of the holders of
Indebtedness of the Borrowers or their respective Subsidiaries on
monies deposited by either Borrower or any such Subsidiary with such
holders of Indebtedness in the ordinary course of business of either
Borrower or any such Subsidiary; and
(n) other Liens that do not, individually or in the aggregate,
attach to a material portion of the assets of the Borrowers or any
Subsidiary or the Capital Securities of either Borrower or any of their
respective Subsidiaries and do not secure obligations in an aggregate
amount in excess of $2,000,000.
-88-
SECTION 7.2.4. Financial Condition and Operations. Holdings and each
Borrower will not permit to occur any of the events set forth below.
(a) Holdings and each Borrower will not permit the Leverage
Ratio as of the last day of any Fiscal Quarter occurring during any
period set forth below to be greater than the ratio set forth opposite
such period:
Period Leverage Ratio
------ --------------
Closing Date to 09/30/00 6.35:1.0
10/01/00 to 06/30/01 5.95:1.0
07/01/01 to 09/30/01 5.75:1.0
10/01/01 to 06/30/02 5.65:1.0
07/01/02 to 09/30/02 5.10:1.0
10/01/02 to 12/31/02 5.00:1.0
01/01/03 to 09/30/03 4.75:1.0
10/01/03 and thereafter 4.00:1.0
(b) Holdings and each Borrower will not permit the Fixed
Charge Coverage Ratio as of the last day of any Fiscal Quarter
occurring during any period set forth below to be less than the ratio
set forth opposite such period:
Fixed Charge
Period Coverage Ratio
------ --------------
Closing Date to 09/30/00 1.05:1.0
10/01/00 to 12/31/01 1.00:1.0
01/01/02 to 06/30/02 1.05:1.0
07/01/02 to 12/31/02 1.10:1.0
01/01/03 to 12/31/03 1.25:1.0
01/01/04 and thereafter 1.50:1.0
-89-
SECTION 7.2.5. Investments. Holdings and each Borrower will not, and
will not permit any of their respective Subsidiaries to, purchase, make, incur,
assume or permit to exist any Investment in any other Person, except:
(a) Investments existing on the Closing Date and identified in
Item 7.2.5(a) of the Disclosure Schedule;
(b) Cash Equivalent Investments;
(c) Investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes
with, customers and suppliers, in each case in the ordinary course of
business;
(d) Investments made by the Borrowers and their respective
Subsidiaries that are permitted as Capital Expenditures pursuant to
Section 7.2.7;
(e) Investments by way of contributions to capital or
purchases of Capital Securities (i) by either Borrower in any
Restricted Subsidiaries or by any Restricted Subsidiary in other
Restricted Subsidiaries; provided, that the aggregate amount of
intercompany loans made pursuant to clause (f)(ii) of Section 7.2.2 and
Investments under this clause made by the Borrowers and Subsidiary
Guarantors in Restricted Subsidiaries that are not Subsidiary
Guarantors shall not exceed $1,000,000 at any time, or (ii) by any
Restricted Subsidiary in either Borrower;
(f) Investments made by the Borrowers and their respective
Restricted Subsidiaries that constitute (i) accounts receivable
arising, (ii) trade debt granted, (iii) deposits made in connection
with the purchase price of goods or services, in each case in the
ordinary course of business or (iv) loans to officers, directors or
employees of Holdings or any of its Restricted Subsidiaries (A) to
finance the acquisition of Capital Securities (or securities linked to
such securities) of Holdings so long as Holdings makes a capital
contribution of such proceeds to the Borrowers, or (B) in the ordinary
course of business for items such as travel, entertainment and
relocation expenses in an aggregate outstanding principal amount, when
taken together with the amount of guaranties referred to in clause (l)
of Section 7.2.2, not exceeding $7,500,000;
(g) Investments (in addition to Investments made pursuant to
clause (h) hereof) made by Holdings, the Borrowers and their respective
Restricted Subsidiaries constituting Permitted Acquisitions in an
aggregate amount not to exceed $5,000,000 over the term of this
Agreement; provided, that (i) any such Investment shall result in the
acquisition of a wholly owned Restricted Subsidiary, and (ii) upon
making such Investment, the provisions of Section 7.1.8 are complied
with;
-90-
(h) Investments made (i) by Holdings, WRC and AGS pursuant to
the ▇▇▇▇▇ Acquisition; and (ii) by Holdings in connection with the
ChildU Acquisition and the ThinkBox Investment.
(i) Investments consisting of any deferred portion of the
sales price received by either Borrower or any Subsidiary in connection
with any Disposition permitted under Section 7.2.11;
(j) Investments (in addition to Investments made pursuant to
clause (h) hereof) made by Holdings by way of capital contributions
made to Unrestricted Subsidiaries or resulting in the Acquisition of an
Unrestricted Subsidiary which are funded from the proceeds of issuances
of Capital Securities of Holdings in an aggregate amount not to exceed,
over the term of this Agreement, $10,000,000, provided that both before
and after giving effect to said Investment (i) Holdings and each
Borrower shall be in pro forma compliance with Section 7.2.4 and (ii)
no Default or Event of Default shall have occurred and be continuing;
(k) other Investments made by Holdings, the Borrowers and
their respective Subsidiaries in an aggregate amount not to exceed
$1,000,000 over the term of this Agreement;
provided, however, that
(l) any Investment which when made complies with the
requirements of clauses (a), (b) or (c) of the definition of the term
"Cash Equivalent Investment" may continue to be held notwithstanding
that such Investment if made thereafter would not comply with such
requirements; and
(m) no Investment otherwise permitted by clause (g) shall be
permitted to be made if any Specified Default has occurred and is
continuing or would result therefrom.
SECTION 7.2.6. Restricted Payments, etc. Holdings and each Borrower
will not, and will not permit any of their respective Subsidiaries to, declare
or make a Restricted Payment, or make any deposit for any Restricted Payment,
other than
(a) Restricted Payments made by Subsidiaries to the Borrowers
or wholly owned Restricted Subsidiaries of either Borrower;
(b) Restricted Payments made by the Borrowers and the
Subsidiaries, as applicable, to Holdings in accordance with the Tax
Sharing Agreement, but in aggregate amounts no greater than, and
limited to the amount necessary to enable Holdings to make payments in
cash in respect of the aggregate federal income tax liability then due
of the "affiliated group" (within the meaning of Section 1504(a)(1) of
the Code) of which Holdings is the common parent corporation; provided,
however, that any payment required to be made by any Borrower or
Subsidiary to Holdings in accordance with the Tax Sharing Agreement
that otherwise would be prohibited pursuant to the preceding limitation
may be paid directly to another Borrower or Subsidiary, as applicable,
to the extent that Holdings would have been required to make a payment
to such other Borrower or Subsidiary in accordance with the Tax Sharing
Agreement;
91
(c) Restricted Payments made by the Borrowers to Holdings
solely to the extent necessary to enable Holdings to pay Management
Fees in an aggregate amount of up to $1,000,000 in any Fiscal Year
thereafter;
(d) Restricted Payments made by the Borrowers to Holdings
solely to the extent necessary to enable Holdings to pay for general
administrative and operating expenses of Holdings;
(e) Restricted Payments made by the Borrowers to Holdings
solely to the extent necessary to enable Holdings to repurchase, redeem
or otherwise acquire or retire for value any Capital Securities of
Holdings, or any warrant, option or other right to acquire Capital
Securities of Holdings, held by any member of management or employee of
Holdings or any of its Subsidiaries pursuant to any management equity
subscription agreement or stock option agreement as a result of the
cessation of the employment such Person (by death, disability or
otherwise) in an aggregate amount of up to $1,000,000 in the 1999
Fiscal Year and $5,000,000 in each Fiscal Year thereafter;
(f) (i) Restricted Payments made by the Borrowers to Holdings
(including Restricted Payments made by WRC on the WRC Mirror PIK
Preferred Equity) on or subsequent to the fifth anniversary of the
Closing Date solely to the extent necessary to enable Holdings to make
scheduled payments of dividends on the PIK Preferred Equity and
Holdings does in fact make such scheduled payments thereon and (ii)
Restricted Payments made by CLI and WRC on or subsequent to the fifth
anniversary of the Closing Date to make scheduled payments of dividends
on the CLI PIK Preferred Equity and the WRC PIK Preferred Equity (other
than any such Capital Securities held by Holdings), respectively;
provided, that such Restricted Payments may only occur so long as, in
each case, the conditions set forth in the proviso to this Section are
satisfied and at the time of such payments and after giving effect to
the making of each such Restricted Payment, the Leverage Ratio for the
most recently ended Fiscal Quarter for which a Compliance Certificate
was delivered by Holdings to the Agents pursuant to clause (d) of
Section 7.1.1 as calculated on a pro forma basis shall be less than
3.00:1.0; and
-92-
(g) following the making of any mandatory prepayment required
under clause (h) of Section 3.1.1 in respect of Net Equity Proceeds,
(i) Restricted Payments made by the Borrowers to Holdings solely to the
extent necessary to enable Holdings to redeem shares of the PIK
Preferred Equity (other than any such Capital Securities held by
Holdings or WRC) or (ii) Restricted Payments made by CLI and WRC to
redeem shares of the CLI PIK Preferred Equity and the WRC PIK Preferred
Equity (other than any such Capital Securities held by Holdings),
respectively, in each case, using such Net Equity Proceeds remaining
following such mandatory prepayment in an amount not to exceed the
excess of (x) the amount of Net Equity Proceeds remaining from such
mandatory prepayment over (y) the amount of any such Net Equity
Proceeds used to redeem any Subordinated Notes pursuant to Section
7.2.8; provided, that such Restricted Payments may only occur so long
as the conditions set forth in the proviso to this Section are
satisfied and at the time of such payments and after giving effect to
the making of each such Restricted Payment, the Leverage Ratio for the
most recently ended Fiscal Quarter for which a Compliance Certificate
was delivered by Holdings to the Agents pursuant to clause (d) of
Section 7.1.1 as calculated on a pro forma basis shall be less than
4.25:1.0;
(h) Restricted Payments by Holdings on the Holdings Junior
Preferred Stock or PIK Preferred Equity which dividends are paid solely
by, at the option of Holdings, (i) the issuance of additional shares of
Holdings Junior Preferred Stock or PIK Preferred Equity, respectively,
or (ii) adding an amount equal to the dividends otherwise payable
therein for the liquidation preference of such Holdings Junior
Preferred Stock or PIK Preferred Equity, respectively.
provided, however, that no Restricted Payments under clause (c), (e), (f), (g)
or (h) may be made if (A) any Specified Default shall have occurred and be
continuing on the date such Restricted Payment is declared or made, or a
Specified Default would result from the making of any such Restricted Payment
and (B) after giving effect to the making of each such Restricted Payment, the
Borrower would not be in pro forma compliance with the covenants set forth in
Section 7.2.4 for the most recently ended Fiscal Quarter for which a Compliance
Certificate was delivered by Holdings to the Agents pursuant to clause (c) of
Section 7.2.2;
SECTION 7.2.7. Capital Expenditures, etc. Subject (in the case of
Capitalized Lease Liabilities), to clause (e) of Section 7.2.2, Holdings and
each Borrower will not, and will not permit any of their respective Restricted
Subsidiaries to, make or commit to make Capital Expenditures other than Capital
Expenditures made or committed to be made by the Borrowers and their respective
Subsidiaries in any Fiscal Year (or, in the case of the 1999 Fiscal Year, during
the period from and including the Closing Date through the end of such Fiscal
Year) which in the aggregate do not exceed the amount set forth below opposite
such Fiscal Year:
-93-
Capital
Fiscal Year Expenditure Amount
----------- ------------------
1999 $ 2,000,000
2000 $ 13,000,000
2001 $ 15,000,000
2002 $ 17,000,000
2003 $ 18,000,000
2004 and each $ 20,000,000
Fiscal Year
thereafter
provided, however, that (i) to the extent the amount of Capital Expenditures
permitted to be made in any Fiscal Year pursuant to this Section without giving
effect to this proviso (the "Base Amount") exceeds the aggregate amount of
Capital Expenditures actually made during such Fiscal Year, such excess amount
may be carried forward to (but only to) the next succeeding Fiscal Year (any
such amount to be certified by Holdings to the Administrative Agent in the
Compliance Certificate delivered for the last Fiscal Quarter of such Fiscal
Year, and any such amount carried forward to a succeeding Fiscal Year shall be
deemed to be used prior to Holdings and its Subsidiaries using the Base Amount
for such succeeding Fiscal Year, without giving effect to such carry-forward).
SECTION 7.2.8. No Prepayment of Subordinated Debt. Holdings and each
Borrower will not, and will not permit any of their respective Subsidiaries to,
(a) make any payment or prepayment of principal of, or premium
or interest on, any Subordinated Debt (i) other than payments of
interest on the stated, scheduled date for payment of interest set
forth in the applicable Sub Debt Documents or (ii) which would violate
the terms of this Agreement or the applicable Sub Debt Documents;
(b) redeem, retire, purchase, defease or otherwise acquire any
Subordinated Debt (including, in the case of each Borrower and each of
their respective Subsidiaries, by way of issuing notes evidencing
Subordinated Debt in exchange for Subordinated Notes of Holdings);
provided, however, that following the making of any mandatory
prepayment required under clause (h) of Section 3.1.1 in respect of Net
Equity Proceeds and so long as no Specified Default shall have occurred
and be continuing on the date such redemption, retirement, purchase,
defeasance or other acquisition is declared or made, or a Specified
Default would result from the consummation thereof, Holdings and the
Borrowers may redeem, retire, purchase, defease or otherwise acquire up
to 35% of the Subordinated Notes using such Net Equity Proceeds
remaining following such mandatory prepayment in an amount not to
exceed the excess of (x) the amount Net Equity Proceeds remaining from
such mandatory prepayment over (y) the amount of any such Net Equity
Proceeds used to redeem any PIK Preferred Equity and cancel the
warrants issued in connection therewith pursuant to clause (g) of
Section 7.2.6; or
(c) make any deposit (including the payment of amounts into a
sinking fund or other similar fund) for any of the foregoing purposes;
-94-
SECTION 7.2.9. Capital Securities. Holdings will not permit either
Borrower, and each Borrower will not, and will not permit any of their
respective Subsidiaries to,
(i) issue any Capital Securities (whether for value or
otherwise) to any Person other than (in the case of Subsidiaries)
either Borrower or another wholly owned Restricted Subsidiary thereof
or
(ii) become liable in respect of any obligation (contingent or
otherwise) to purchase, redeem, retire, acquire or make any other
payment in respect of any Capital Securities of Holdings, either
Borrower or any Subsidiary or any option, warrant or other right to
acquire any such Capital Securities,
in each case, other than (A) in connection with any Permitted Equity Exchange
of the types described in clauses (i), (ii), (iii), (v)(A) or (vi) of the
definition thereof (provided, however, (1) in the case of such clauses (ii) and
(v)(A), Holdings makes capital contributions of all of the Capital Securities
received by it in connection with each such exchange to WRC and WRC
contemporaneously with the receipt thereof pledges and delivers such Capital
Securities to the Administrative Agent, together with stocks powers duly
executed in blank, all in accordance with the terms of the Security and Pledge
Agreement and (2) in the case of such clause (vi), Holdings contemporaneously
with the receipt of Capital Securities of WRC and/or CLI in connection with such
Permitted Equity Exchange pledges and delivers such Capital Securities to the
Administrative Agent, together with stocks powers duly executed in blank, all in
accordance with the terms of the Security and Pledge Agreement) and (B) the
issuance by Holdings or WRC of common stock in connection with a Public
Offering. Notwithstanding anything to the contrary herein, the aggregate
liquidation preference of all shares of Capital Securities (excluding any common
equity and the WRC Mirror PIK Preferred but including the PIK Preferred Equity,
the WRC PIK Preferred Equity, if any, and the CLI PIK Preferred Equity, if any)
held by persons other than Holdings or any of its Subsidiaries shall not exceed
the sum of (x) $75,000,000, (y) any accrued but unpaid dividends on the PIK
Preferred Equity and (z) the aggregate liquidation preference of additional PIK
Preferred Equity issued in lieu of cash dividends on the PIK Preferred Equity.
SECTION 7.2.10. Consolidation, Merger, etc. Holdings and each Borrower
will not, and will not permit any of their respective Subsidiaries to, liquidate
or dissolve, consolidate with, or merge into or with, any other Person, or
purchase or otherwise acquire all or substantially all of the assets of any
Person (or any division thereof), except
-95-
(a) any Restricted Subsidiary may liquidate or dissolve
voluntarily into, and may merge with and into, either Borrower or any
other Restricted Subsidiary (provided, however, that a Subsidiary
Guarantor may only liquidate or dissolve into, or merge with and into,
either Borrower or another Subsidiary Guarantor), and the assets or
Capital Securities of any Subsidiary may be purchased or otherwise
acquired by either Borrower or any other Restricted Subsidiary
(provided, however, that the assets or Capital Securities of any
Subsidiary Guarantor may only be purchased or otherwise acquired by
either Borrower or another Subsidiary Guarantor); provided, further,
that in no event shall any Pledged Subsidiary consolidate with or merge
with and into (x) any Unrestricted Subsidiary or (y) any other
Subsidiary which is not another Pledged Subsidiary unless after giving
effect thereto, the Administrative Agent shall have a perfected pledge
of, and security interest in and to, at least the same percentage of
the issued and outstanding interests of Capital Securities (on a fully
diluted basis) of the surviving Person as the Administrative Agent had
immediately prior to such merger or consolidation in form and substance
satisfactory to the Administrative Agent and its counsel, pursuant to
such documentation and opinions as shall be necessary in the opinion of
the Administrative Agent to create, perfect or maintain the collateral
position of the Secured Parties therein;
(b) a Borrower may merge with or into the other Borrower;
(c) so long as no Specified Default has occurred and is
continuing or would occur after giving effect thereto, either Borrower
or any of its Subsidiaries may (to the extent permitted by clause (g)
of Section 7.2.5) purchase all or substantially all of the assets or
Capital Securities of any Person (or any division thereof) (other than
either Borrower or any of its Subsidiaries), or acquire such Person by
merger (it being understood that the foregoing shall not prohibit
consummation of any transaction committed to in a definitive agreement
that was entered into prior to the occurrence of any such Specified
Default); and
(d) any transaction permitted under Section 11.12.
SECTION 7.2.11. Permitted Dispositions. Holdings and each Borrower will
not, and will not permit any of their respective Subsidiaries to, Dispose of
Holdings', any of such Borrower's or such Subsidiaries' (other than
Unrestricted Subsidiaries') assets (including accounts receivable and Capital
Securities of Subsidiaries (other than Unrestricted Subsidiaries)) to any
Person in one transaction or series of transactions unless such Disposition is
a Permitted Asset Disposition or is permitted under Section 11.12.
SECTION 7.2.12. Modification of Certain Agreements. Holdings and each
Borrower will not, and will not permit any of their respective Subsidiaries to,
consent to any amendment, supplement, waiver or other modification of, or enter
into any forbearance from exercising any rights with respect to the terms or
provisions contained in,
(a) the Sub Debt Documents, other than any amendment,
supplement, waiver or modification for which no (or only a nominal) fee
is payable to the holders of the Subordinated Debt and which (i)
extends the date or reduces the amount of any required repayment,
prepayment or redemption of the principal of such Subordinated Debt,
(ii) reduces the rate or extends the date for payment of the interest,
premium (if any) or fees payable on such Subordinated Debt or (iii)
makes the covenants, events of default or remedies in such Sub Debt
Documents less restrictive on such Borrower; or
(b) any of the Transaction Documents.
-96-
SECTION 7.2.13. Transactions with Affiliates. Except (a) as permitted
under clause (d), (e) or (f)(iv) of Section 7.2.5, Section 7.2.6, or clause (a)
or (b) of Section 7.2.10, (b) payments made by Holdings, the Borrowers and their
respective Subsidiaries in accordance with the Tax Sharing Agreement and (c) for
Permitted Asset Dispositions of the type described in clause (g) of the
definition thereof, Holdings and each Borrower will not, and will not permit any
of their respective Subsidiaries to, enter into or cause or permit to exist any
arrangement, transaction or contract (including for the purchase, lease or
exchange of property or the rendering of services) with any of its other
Affiliates, unless such arrangement, transaction or contract (i) is on fair and
reasonable terms no less favorable to Holdings or such Borrower or such
Subsidiary than it could obtain in an arm's-length transaction with a Person
that is not an Affiliate and (ii) is of the kind which would be entered into by
a prudent Person in the position of Holdings or such Borrower or such Subsidiary
with a Person that is not one of its Affiliates.
SECTION 7.2.14. Restrictive Agreements, etc. Holdings and each Borrower
will not, and will not permit any of their respective Subsidiaries to, enter
into any agreement prohibiting
(a) the creation or assumption of any Lien upon its
properties, revenues or assets, whether now owned or hereafter
acquired;
(b) the ability of any Obligor to amend or otherwise modify
any Loan Document; or
(c) the ability of any Subsidiary to make any payments,
directly or indirectly, to either Borrower, including by way of
dividends, advances, repayments of loans, reimbursements of management
and other intercompany charges, expenses and accruals or other returns
on investments.
The foregoing prohibitions shall not apply to restrictions contained (i) in any
Loan Document, (ii) in the case of clause (a), any agreement governing any
Indebtedness permitted by clause (e) of Section 7.2.2 as to the assets financed
with the proceeds of such Indebtedness, or (iii) in the case of clauses (a) and
(c), any agreement of a Foreign Subsidiary governing the Indebtedness permitted
by clause (f)(ii) of Section 7.2.2.
SECTION 7.2.15. Sale and Leaseback. Holdings and each Borrower will
not, and will not permit any of their respective Subsidiaries to, directly or
indirectly enter into any agreement or arrangement providing for the sale or
transfer by it of any property (now owned or hereafter acquired) to a Person
and the subsequent lease or rental of such property or other similar property
from such Person.
SECTION 7.2.16. Designation of Senior Debt. None of Holdings or either
Borrower will permit any Indebtedness (other than the Indebtedness incurred
hereunder or under any other Loan Document) to constitute "Designated Senior
Debt" (or any other similar term) under the Subordinated Debt Documents,
without the consent of the Required Lenders.
-97-
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. Listing of Events of Default. Each of the following events
or occurrences described in this Article shall constitute an "Event of Default".
SECTION 8.1.1. Non-Payment of Obligations. Either Borrower shall
default in the payment or prepayment when due of
(a) any principal of any Loan, or any Reimbursement Obligation
or any deposit of cash for collateral purposes pursuant to Section
2.6.4; or
(b) interest on any Loan or Reimbursement Obligation, any fee
described in Article III or any other monetary Obligation, and such
default shall continue unremedied for a period of five Business Days
after such amount was due.
SECTION 8.1.2. Breach of Warranty. Any representation or warranty of
any Obligor made or deemed to be made in any Loan Document (including any
certificates delivered pursuant to Article V) is or shall be incorrect when made
or deemed to have been made in any material respect.
SECTION 8.1.3. Non-Performance of Certain Covenants and Obligations.
Holdings or either Borrower shall default in the due performance or observance
of any of its obligations under Section 7.1.1, 7.1.7, 7.1.10 or 7.2.
SECTION 8.1.4. Non-Performance of Other Covenants and Obligations. Any
Obligor shall default in the due performance and observance of any other
agreement contained in any Loan Document executed by it, and such default shall
continue unremedied for a period of 30 days after notice thereof shall have been
given to the Borrowers by either Agent.
SECTION 8.1.5. Default on Other Indebtedness. A default shall occur in
the payment of any amount when due (subject to any applicable grace period),
whether by acceleration or otherwise, of any principal or stated amount of, or
interest or fees on, any Indebtedness (other than Indebtedness described in
Section 8.1.1) of Holdings, either Borrower or any of their respective
Subsidiaries or any other Obligor having a principal or stated amount,
individually or in the aggregate, in excess of $5,000,000, or a default shall
occur in the performance or observance of any obligation or condition with
respect to such Indebtedness if the effect of such default is to accelerate the
maturity of any such Indebtedness or such default shall continue unremedied for
any applicable period of time sufficient to permit the holder or holders of such
Indebtedness, or any trustee or agent for such holders, to cause or declare such
Indebtedness to become due and payable or to require such Indebtedness to be
prepaid, redeemed, purchased or defeased, or require an offer to purchase or
defease such Indebtedness to be made, prior to its expressed maturity.
-98-
SECTION 8.1.6. Judgments. Any judgment or order for the payment of
money individually or in the aggregate in excess of $5,000,000 (exclusive of any
amounts fully covered by insurance (less any applicable deductible) and as to
which the insurer has acknowledged its responsibility to cover such judgment or
order) shall be rendered against Holdings, either Borrower or any of their
respective Subsidiaries or any other Obligor and such judgment shall not have
been vacated or discharged or stayed or bonded pending appeal within 30 days
after the entry thereof or enforcement proceedings shall have been commenced by
any creditor upon such judgment or order.
SECTION 8.1.7. Pension Plans. Any of the following events shall occur
with respect to any Pension Plan
(a) the institution of any steps by either Borrower, any
member of its Controlled Group or any other Person to terminate a
Pension Plan if, as a result of such termination, such Borrower or any
such member could be required to make a contribution to such Pension
Plan, or could reasonably expect to incur a liability or obligation to
such Pension Plan, in excess of $1,000,000; or
(b) a contribution failure occurs with respect to any Pension
Plan sufficient to give rise to a Lien under section 302(f) of ERISA.
SECTION 8.1.8. Change in Control. Any Change in Control shall occur.
SECTION 8.1.9. Bankruptcy, Insolvency, etc. Holdings, either Borrower,
any of their respective Subsidiaries or any other Obligor shall
(a) become insolvent or generally fail to pay, or admit in
writing its inability or unwillingness generally to pay, debts as they
become due;
(b) apply for, consent to, or acquiesce in the appointment of
a trustee, receiver, sequestrator or other custodian for any
substantial part of the property of any thereof, or make a general
assignment for the benefit of creditors;
(c) in the absence of such application, consent or
acquiescence, permit or suffer to exist the appointment of a trustee,
receiver, sequestrator or other custodian for a substantial part of the
property of any thereof, and such trustee, receiver, sequestrator or
other custodian shall not be discharged within 60 days; provided, that
Holdings, each Borrower, each Subsidiary and each other Obligor hereby
expressly authorizes each Secured Party to appear in any court
conducting any relevant proceeding during such 60-day period to
preserve, protect and defend their rights under the Loan Documents;
-99-
(d) permit or suffer to exist the commencement of any
bankruptcy, reorganization, debt arrangement or other case or
proceeding under any bankruptcy or insolvency law or any dissolution,
winding up or liquidation proceeding, in respect thereof, and, if any
such case or proceeding is not commenced by Holdings, either Borrower,
any Subsidiary or any Obligor, such case or proceeding shall be
consented to or acquiesced in by Holdings, such Borrower, such
Subsidiary or such Obligor, as the case may be, or shall result in the
entry of an order for relief or shall remain for 60 days undismissed;
provided, that Holdings, each Borrower, each Subsidiary and each
Obligor hereby expressly authorizes each Secured Party to appear in any
court conducting any such case or proceeding during such 60-day period
to preserve, protect and defend their rights under the Loan Documents;
or
(e) take any action authorizing, or in furtherance of, any of
the foregoing.
SECTION 8.1.10. Impairment of Security, etc. Any Loan Document or any
Lien granted thereunder shall (except in accordance with its terms), in whole or
in part, terminate, cease to be effective or cease to be the legally valid,
binding and enforceable obligation of any Obligor party thereto; any Obligor
shall, directly or indirectly, contest in any manner such effectiveness,
validity, binding nature or enforceability; or, except as permitted under any
Loan Document, any Lien securing any Obligation shall, in whole or in part,
cease to be a perfected first priority Lien (subject only to Liens permitted by
Section 7.2.3).
SECTION 8.1.11. Failure of Subordination. Unless otherwise waived or
consented to by the Agents, each Lender and the Issuers in writing, the
subordination provisions relating to any Subordinated Debt (the "Subordination
Provisions") shall fail to be enforceable by the Agents, the Lenders and the
Issuers in accordance with the terms thereof, or the monetary Obligations shall
fail to constitute "Senior Debt" (or similar term) referring to the Obligations;
or Holdings, either Borrower or any of their respective Subsidiaries shall,
directly or indirectly, disavow or contest in any manner (i) the effectiveness,
validity or enforceability of any of the Subordination Provisions, (ii) that the
Subordination Provisions exist for the benefit of the Agents, the Lenders and
the Issuers or (iii) that all payments of principal of or premium and interest
on the Subordinated Debt, or realized from the liquidation of any property of
any Obligor, shall be subject to any of such Subordination Provisions.
SECTION 8.2. Action if Bankruptcy. If any Event of Default described in
clauses (a) through (d) of Section 8.1.9 shall occur, the Commitments (if not
theretofore terminated) shall automatically terminate and the outstanding
principal amount of all outstanding Loans and all other monetary Obligations
(including Reimbursement Obligations) shall automatically be and become
immediately due and payable jointly and severally by the Borrowers, without
notice or demand to any Person and each Borrower shall automatically and
immediately be obligated jointly and severally to Cash Collateralize all Letter
of Credit Outstandings.
-100-
SECTION 8.3. Action if Other Event of Default. If any Event of Default
(other than any Event of Default described in clauses (a) through (d) of Section
8.1.9) shall occur for any reason, whether voluntary or involuntary, and be
continuing, the Administrative Agent, upon the direction of the Required
Lenders, shall by notice to the Borrowers declare all or any portion of the
outstanding principal amount of the Loans and other monetary Obligations
(including Reimbursement Obligations) to be due and payable jointly and
severally by the Borrowers and/or the Commitments (if not theretofore
terminated) to be terminated, whereupon the full unpaid amount of such Loans and
other monetary Obligations which shall be so declared due and payable shall be
and become immediately due and payable, without further notice, demand or
presentment, and/or, as the case may be, the Commitments shall terminate and the
Borrowers shall automatically and immediately be obligated jointly and severally
to Cash Collateralize all Letter of Credit Outstandings.
ARTICLE IX
THE ADMINISTRATIVE AGENT
SECTION 9.1. Actions. Each Lender hereby appoints CSFB as its
Syndication Agent and BofA as its Administrative Agent under and for purposes of
each Loan Document. Each Lender authorizes each Agent to act on behalf of such
Lender under each Loan Document and, in the absence of other written
instructions from the Required Lenders received from time to time by the Agents
(with respect to which each Agent agrees that it will comply, except as
otherwise provided in this Section or as otherwise advised by counsel in order
to avoid contravention of applicable law), to exercise such powers hereunder and
thereunder as are specifically delegated to or required of such Agent by the
terms hereof and thereof, together with such powers as may be reasonably
incidental thereto. Each Lender hereby indemnifies (which indemnity shall
survive any termination of this Agreement) each Agent, pro rata according to
such Lender's proportionate Total Exposure Amount, from and against any and all
liabilities, obligations, losses, damages, claims, costs or expenses of any kind
or nature whatsoever which may at any time be imposed on, incurred by, or
asserted against, such Agent in any way relating to or arising out of any Loan
Document, including reasonable attorneys' fees, to the extent the same shall not
have been reimbursed by the Borrowers; provided, however, that no Lender shall
be liable for the payment of any portion of such liabilities, obligations,
losses, damages, claims, costs or expenses which are determined by a court of
competent jurisdiction in a final proceeding to have resulted from such Agent's
gross negligence or wilful misconduct. Neither Agent shall be required to take
any action under any Loan Document, or to prosecute or defend any suit in
respect of any Loan Document, unless it is indemnified hereunder to its
satisfaction. If any indemnity in favor of either Agent shall be or become, in
such Agent's determination, inadequate, such Agent may call for additional
indemnification from the Lenders and cease to do the acts indemnified against
hereunder until such additional indemnity is given.
SECTION 9.2. Funding Reliance, etc. Unless the Administrative Agent
shall have been notified in writing by any Lender by 3:00 p.m. on the Business
Day prior to a Borrowing that such Lender will not make available the amount
which would constitute its Percentage of such Borrowing on the date specified
therefor, the Administrative Agent may assume that such Lender has made such
amount available to the Administrative Agent and, in reliance upon such
assumption, make available to the applicable Borrower a corresponding amount. If
and to the extent that such Lender shall not have made such amount available to
the Administrative Agent, such Lender and the Borrowers severally agree (and the
Borrowers as among themselves jointly and severally agree) to repay the
Administrative Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date the Administrative Agent made such
amount available to the applicable Borrower to the date such amount is repaid to
the Administrative Agent, at the interest rate applicable at the time to Loans
comprising such Borrowing (in the case of either Borrower) and (in the case of a
Lender), at the Federal Funds Rate (for the first two Business Days after which
such amount has not been repaid, and thereafter at the interest rate applicable
to Loans comprising such Borrowing).
-101-
SECTION 9.3. Exculpation. Neither Agent nor any of its respective
directors, officers, employees or agents shall be liable to any Lender for any
action taken or omitted to be taken by it under any Loan Document, or in
connection herewith or therewith, except for its own wilful misconduct or gross
negligence, nor responsible for any recitals or warranties herein or therein,
nor for the effectiveness, enforceability, validity or due execution of any Loan
Document, nor for the creation, perfection or priority of any Liens purported to
be created by any of the Loan Documents, or the validity, genuineness,
enforceability, existence, value or sufficiency of any collateral security, nor
to make any inquiry respecting the performance by any Obligor or the Seller of
its Obligations. Any such inquiry which may be made by either Agent shall not
obligate it to make any further inquiry or to take any action. The
Administrative Agent shall be entitled to rely upon advice of counsel concerning
legal matters and upon any notice, consent, certificate, statement or writing
which the Administrative Agent believes to be genuine and to have been presented
by a proper Person.
SECTION 9.4. Successor. The Syndication Agent may resign as such upon
one Business Day's notice to the Borrowers and the Administrative Agent. The
Administrative Agent may resign as such at any time upon at least 30 days' prior
notice to the Borrowers and all Lenders. If the Administrative Agent at any time
shall resign, the Required Lenders, with the prior consent of Holdings (which
consent of Holdings shall not be required upon the occurrence and during the
continuation of a Specified Default) may appoint another Lender as a successor
Administrative Agent which shall thereupon become the Administrative Agent
hereunder. If no successor Administrative Agent shall have been so appointed by
the Required Lenders, and shall have accepted such appointment, within 30 days
after the retiring Administrative Agent's giving notice of resignation, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which shall be one of the Lenders or a commercial banking
institution organized under the laws of the U.S. (or any State thereof) or a
U.S. branch or agency of a commercial banking institution, and having a combined
capital and surplus of at least $250,000,000; provided, however, that if, such
retiring Administrative Agent is unable to find a commercial banking institution
which is willing to accept such appointment and which meets the qualifications
set forth in above, the retiring Administrative Agent's resignation shall
nevertheless thereupon become effective and the Lenders shall assume and perform
all of the duties of the Administrative Agent hereunder until such time, if any,
as the Required Lenders appoint a successor as provided for above. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall be entitled to
receive from the retiring Administrative Agent such documents of transfer and
assignment as such successor Administrative Agent may reasonably request, and
shall thereupon succeed to and become vested with all rights, powers, privileges
and duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations under the Loan
Documents. After any retiring Administrative Agent's resignation hereunder as
the Administrative Agent, the provisions of this Article shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was the
Administrative Agent under the Loan Documents, and Sections 11.3 and 11.4 shall
continue to inure to its benefit.
-102-
SECTION 9.5. Credit Extensions by each Agent. Each Agent and each
Issuer shall have the same rights and powers with respect to (x)(i) in the case
of an Agent, the Credit Extensions made by it or any of its Affiliates and (ii)
in the case of an Issuer, the Loans made by it or any of its Affiliates, and (y)
the Notes held by it or any of its Affiliates as any other Lender and may
exercise the same as if it were not an Agent or Issuer. Each Agent, each Issuer
and each Lender and each of their respective Affiliates may accept deposits
from, lend money to, and generally engage in any kind of business with Holdings,
either Borrower or any Subsidiary or Affiliate of Holdings or either Borrower as
if such Agent, Issuer or Lender were not an Agent, Issuer or Lender hereunder.
SECTION 9.6. Credit Decisions. Each Lender acknowledges that it has,
independently of each Agent and each other Lender, and based on such Lender's
review of the financial information of Holdings, the Borrowers and their
respective Subsidiaries, the Loan Documents (the terms and provisions of which
being satisfactory to such Lender) and such other documents, information and
investigations as such Lender has deemed appropriate, made its own credit
decision to extend its Commitments. Each Lender also acknowledges that it will,
independently of each Agent and each other Lender, and based on such other
documents, information and investigations as it shall deem appropriate at any
time, continue to make its own credit decisions as to exercising or not
exercising from time to time any rights and privileges available to it under the
Loan Documents.
SECTION 9.7. Copies, etc. The Administrative Agent shall give prompt
notice to each Lender of each notice or request required or permitted to be
given to the Administrative Agent by Holdings or either Borrower pursuant to the
terms of the Loan Documents (unless concurrently delivered to the Lenders by the
Borrowers). The Administrative Agent will distribute to each Lender each
document or instrument received for its account and copies of all other
communications received by the Administrative Agent from Holdings or either
Borrower for distribution to the Lenders by the Administrative Agent in
accordance with the terms of the Loan Documents.
-103-
SECTION 9.8. Reliance by Agents. Each Agent shall be entitled to rely
upon any certification, notice or other communication (including any thereof by
telephone, telecopy, telegram or cable) believed by it to be genuine and
correct and to have been signed or sent by or on behalf of the proper Person,
and upon advice and statements of legal counsel, independent accountants and
other experts selected by such Agent. As to any matters not expressly provided
for by the Loan Documents, each Agent shall in all cases be fully protected in
acting, or in refraining from acting, hereunder or thereunder in accordance
with instructions given by the Required Lenders or all of the Lenders as is
required in such circumstance, and such instructions of such Lenders and any
action taken or failure to act pursuant thereto shall be binding on all Secured
Parties. For purposes of applying amounts in accordance with this Section, each
Agent shall be entitled to rely upon any Secured Party that has entered into a
Secured Hedging Agreement with any Obligor or the Seller for a determination
(which such Secured Party agrees to provide or cause to be provided upon
request of the Administrative Agent) of the outstanding monetary Obligations
owed to such Secured Party under any Secured Hedging Agreement. Unless it has
actual knowledge evidenced by way of written notice from any such Secured Party
and either Borrower to the contrary, each Agent, in acting in such capacity
under the Loan Documents, shall be entitled to assume that no Secured Hedging
Agreements or Obligations in respect thereof are in existence or outstanding
between any Secured Party and any Obligor or the Seller.
SECTION 9.9. Defaults. Neither Agent shall be deemed to have knowledge
or notice of the occurrence of a Default unless such Agent has received a
written notice from a Lender or either Borrower specifying such Default and
stating that such notice is a "Notice of Default". In the event that either
Agent receives such a notice of the occurrence of a Default, such Agent shall
give prompt notice thereof to the Lenders. Each Agent shall (subject to Section
11.1) take such action with respect to such Default as shall be directed by the
Required Lenders; provided, that unless and until such Agent shall have received
such directions, such Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Default as it
shall deem advisable in the best interest of the Lenders except to the extent
that this Agreement expressly requires that such action be taken, or not be
taken, only with the consent or upon the authorization of the Required Lenders
or all Lenders, as applicable.
SECTION 9.10. Documentation Agent. The Person identified on the
signature pages of this Agreement as the "Documentation Agent" shall not have
any right, power, obligation, liability, responsibility or duty under this
Agreement (or any other Loan Document) other than those applicable to it in its
capacity as a Lender to the extent it is a Lender hereunder. Without limiting
the foregoing, the Lender so identified as the "Documentation Agent" shall not
have or be deemed to have any fiduciary relationship with any Lender. Each
Person acknowledges that it has not relied, and will not rely, on the Person so
identified as the "Documentation Agent" in deciding to enter into this Agreement
and each other Loan Document to which it is a party or in taking or not taking
action hereunder or thereunder.
-104-
ARTICLE X
HOLDINGS GUARANTY
SECTION 10.1. Guaranty. Holdings hereby absolutely, unconditionally and
irrevocably
(a) guarantees the full and punctual payment when due, whether
at stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise, of all monetary Obligations of each Borrower and
each other Obligor now or hereafter existing, whether for principal,
interest, fees, expenses or otherwise (including all such amounts which
would become due but for the operation of the automatic stay under
Section 362(a) of the United States Bankruptcy Code, 11 U.S.C.
ss.362(a), and the operation of Sections 502(b) and 506(b) of the
United States Bankruptcy Code, 11 U.S.C. ss.502(b) and ss.506(b)), and
(b) indemnifies and holds harmless each Secured Party and each
holder of a Note for any and all costs and expenses (including
reasonable attorney's fees and expenses) incurred by such Secured Party
or such holder, as the case may be, in enforcing any rights under the
guaranty set forth in this Article X.
The guaranty set forth in this Article X constitutes a guaranty of payment when
due and not of collection, and Holdings specifically agrees that it shall not be
necessary or required that any Secured Party or any holder of any Note exercise
any right, assert any claim or demand or enforce any remedy whatsoever against
either Borrower or any other Obligor (or any other Person) before or as a
condition to the obligations of Holdings under the guaranty set forth in this
Article X.
SECTION 10.2. Acceleration of Holdings Guaranty. Holdings agrees that,
in the event of the dissolution or insolvency of either Borrower, any other
Obligor or Holdings, or the inability or failure of either Borrower, any other
Obligor or Holdings to pay debts as they become due, or an assignment by either
Borrower, any other Obligor or Holdings for the benefit of creditors, or the
commencement of any case or proceeding in respect of either Borrower, any other
Obligor or Holdings under any bankruptcy, insolvency or similar laws, and if
such event shall occur at a time when any of the monetary Obligations of each
Borrower and each other Obligor may not then be due and payable, Holdings agrees
that it will pay to the Administrative Agent for the account of the Secured
Parties forthwith the full amount which would be payable under the guaranty set
forth in this Article X by Holdings if all such monetary Obligations were then
due and payable.
-105-
SECTION 10.3. Guaranty Absolute, etc. The guaranty set forth in this
Article X shall in all respects be a continuing, absolute, unconditional and
irrevocable guaranty of payment, and shall remain in full force and effect until
all monetary Obligations of each Borrower and each other Obligor have been paid
in full in cash, all obligations of Holdings under the guaranty set forth in
this Article X shall have been paid in full in cash, all Letters of Credit have
been terminated or expired and all Commitments shall have terminated. Holdings
guarantees that the monetary Obligations of each Borrower and each other Obligor
will be paid strictly in accordance with the terms of this Agreement and each
other Loan Document under which they arise, regardless of any law, regulation or
order now or hereafter in effect in any jurisdiction affecting any of such terms
or the rights of any Secured Party or any holder of any Note with respect
thereto. The liability of Holdings under the guaranty set forth in this Article
X shall be absolute, unconditional and irrevocable irrespective of:
(a) any lack of validity, legality or enforceability of this
Agreement, any Note or any other Loan Document;
(b) the failure of any Secured Party or any holder of any Note
(i) to assert any claim or demand or to enforce any
right or remedy against either Borrower, any other Obligor,
the Seller or any other Person (including any other guarantor
(including Holdings)) under the provisions of this Agreement,
any Note, any other Loan Document or otherwise, or
(ii) to exercise any right or remedy against any
other guarantor (including Holdings) of, or collateral
securing, any Obligations of either Borrower, any other
Obligor or the Seller;
(c) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations of either Borrower
or any other Obligor (other than Holdings), or any other extension,
compromise or renewal of any Obligation of either Borrower or any other
Obligor (other than Holdings);
(d) any reduction, limitation, impairment or termination of
any Obligations of either Borrower for any reason, including any claim
of waiver, release, surrender, alteration or compromise, and shall not
be subject to (and Holdings hereby waives any right to or claim of) any
defense or setoff, counterclaim, recoupment or termination whatsoever
by reason of the invalidity, illegality, nongenuineness, irregularity,
compromise, unenforceability of, or any other event or occurrence
affecting, any Obligations of either Borrower or otherwise;
(e) any amendment to, rescission, waiver, or other
modification of, or any consent to departure from, any of the terms of
this Agreement, any Note or any other Loan Document;
-106-
(f) any addition, exchange, release, surrender or
non-perfection of any collateral, or any amendment to or waiver or
release or addition of, or consent to departure from, any other
guaranty, held by any Secured Party or any holder of any Note securing
any of the Obligations of either Borrower; or
(g) any other circumstance which might otherwise constitute a
defense available to, or a legal or equitable discharge of, either
Borrower, any surety or any guarantor.
SECTION 10.4. Reinstatement, etc. Holdings agrees that the guaranty set
forth in this Article X shall continue to be effective or be reinstated, as the
case may be, if at any time any payment (in whole or in part) of any of the
Obligations is rescinded or must otherwise be restored by any Secured Party or
any holder of any Note, upon the insolvency, bankruptcy or reorganization of
either Borrower or otherwise, all as though such payment had not been made.
SECTION 10.5. Waiver, etc. Holdings hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Obligations of either Borrower and the guaranty set forth in this Article X and
any requirement that the Administrative Agent, any other Secured Party or any
holder of any Note protect, secure, perfect or insure any security interest or
Lien, or any property subject thereto, or exhaust any right or take any action
against either Borrower, any other Obligor or any other Person (including the
Seller or any other guarantor (including Holdings)) or entity or any collateral
securing the Obligations of either Borrower.
SECTION 10.6. Postponement of Subrogation, etc. Holdings agrees that it
will not exercise any rights which it may acquire by way of rights of
subrogation under the guaranty set forth in this Article X, by any payment made
under the guaranty set forth in this Article X or otherwise, until the prior
payment in full in cash of all monetary Obligations of each Borrower and each
other Obligor, the termination or expiration of all Letters of Credit and the
termination of all Commitments. Any amount paid to Holdings on account of any
such subrogation rights prior to the payment in full in cash of all monetary
Obligations of each Borrower and each other Obligor shall be held in trust for
the benefit of the Secured Parties and each holder of a Note and shall
immediately be paid to the Administrative Agent for the benefit of the Secured
Parties and each holder of a Note and credited and applied against the monetary
Obligations of each Borrower and each other Obligor, whether matured or
unmatured, in accordance with the terms of this Agreement; provided, however,
that if
(a) Holdings has made payment to the Secured Parties and each
holder of a Note of all or any part of the monetary Obligations of
either Borrower, and
-107-
(b) all monetary Obligations of each Borrower and each other
Obligor have been paid in full in cash, all Letters of Credit have been
terminated or expired and all Commitments have been permanently
terminated, each Secured Party and each holder of a Note agrees that,
at Holdings' request, the Administrative Agent, on behalf of the
Secured Parties and the holders of the Notes, will execute and deliver
to Holdings appropriate documents (without recourse and without
representation or warranty) necessary to evidence the transfer by
subrogation to Holdings of an interest in the monetary Obligations of
the applicable Borrower resulting from such payment by Holdings. In
furtherance of the foregoing, for so long as any Obligations or
Commitments remain outstanding, Holdings shall refrain from taking any
action or commencing any proceeding against either Borrower (or its
successors or assigns, whether in connection with a bankruptcy
proceeding or otherwise) to recover any amounts in the respect of
payments made under the guaranty set forth in this Article X to any
Secured Party or any holder of a Note.
SECTION 10.7. Successors, Transferees and Assigns; Transfers of Notes,
etc. The guaranty set forth in this Article X shall:
(a) be binding upon Holdings, and its successors, transferees
and assigns;
(b) inure to the benefit of and be enforceable by each Agent
and each other Secured Party; and
(c) shall not constitute a novation.
Without limiting the generality of the foregoing clause (b), any Lender may
assign or otherwise transfer (in whole or in part) any Note or Credit Extension
held by it to any other Person or entity, and such other Person or entity shall
thereupon become vested with all rights and benefits in respect thereof granted
to such Lender under any Loan Document (including the guaranty set forth in this
Article X) or otherwise, subject, however, to any contrary provisions in such
assignment or transfer, and to the provisions of Section 11.11 and Article IX.
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.1. Waivers, Amendments, etc. The provisions of each Loan
Document may from time to time be amended, modified or waived, if such
amendment, modification or waiver is in writing and consented to by Holdings,
the Borrowers and the Required Lenders; provided, however, that no such
amendment, modification or waiver shall:
(a) modify this Section without the consent of all Lenders;
(b) increase the aggregate amount of any Credit Extensions
required to be made by a Lender pursuant to its Commitments, extend the
final Commitment Termination Date of Credit Extensions made (or
participated in) by a Lender or reduce any fees described in Article
III payable to any Lender without the consent of such Lender;
-108-
(c) extend any date of payment of principal for any Lender's
Loan, or reduce the principal amount of, rate of interest or fees on
any Loan or Reimbursement Obligations (which shall in each case include
the conversion of all or any part of the Obligations into equity of any
Obligor), or extend the date on which interest or fees are payable in
respect of such Loan or Reimbursement Obligation, in each case, without
the consent of the Lender which has made such Loan or, in the case of a
Reimbursement Obligation, the Issuer owed, and those Lenders
participating in, such Reimbursement Obligation (it being understood
and agreed, however, that any vote to rescind any acceleration made
pursuant to Section 8.2 and Section 8.3 of amounts owing with respect
to the Loans and other Obligations shall only require the vote of the
Required Lenders);
(d) reduce the percentage set forth in the definition of
"Required Lenders" or modify any requirement hereunder that any
particular action be taken by all Lenders without the consent of all
Lenders;
(e) except as otherwise expressly provided in a Loan Document,
release (i) either Borrower from its Obligations under the Loan
Documents, Holdings from its Obligations under Article X or any
Subsidiary Guarantor from its Obligations under the Subsidiary Guaranty
or (ii) all or substantially all of the collateral under the Loan
Documents, in each case without the consent of all Lenders;
(f) (i) amend, modify or waive clause (b) of Section 3.1.1 or
(ii) have the effect (either immediately or at some later time) of
enabling the Borrowers to satisfy a condition precedent to the making
of a Revolving Loan or the issuance of a Letter of Credit unless such
amendment, modification or waiver shall have been consented to by the
holders of at least 51% of the Revolving Loan Commitments.
(g) amend, modify or waive the provisions of clause (a)(i) of
Section 3.1.1 or clause (b) of Section 3.1.2 or effect any amendment,
modification or waiver that by its terms adversely affects the rights
of Lenders participating in any Tranche differently from those of
Lenders participating in other Tranches, unless such amendment,
modification or waiver shall have been consented to by the holders of
at least 51% of the aggregate amount of Loans outstanding under the
Tranche or Tranches affected by such modification, or, in the case of a
modification affecting the Revolving Loan Commitments, the Lenders
holding at least 51% of the Revolving Loan Commitments;
(h) change any of the terms of clause (b) of Section 2.3.2 or
Section 2.3.2 without the consent of the Swing Line Lender; or
(i) affect adversely the interests, rights or obligations of
either Agent (in its capacity as an Agent) or any Issuer (in its
capacity as an Issuer), unless consented to by such Agent or such
Issuer, as the case may be.
-109-
No failure or delay on the part of either Agent, any Issuer or any Lender in
exercising any power or right under any Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power or right
preclude any other or further exercise thereof or the exercise of any other
power or right. No notice to or demand on any Obligor or the Seller in any case
shall entitle it to any notice or demand in similar or other circumstances. No
waiver or approval by either Agent, any Issuer or any Lender under any Loan
Document shall, except as may be otherwise stated in such waiver or approval, be
applicable to subsequent transactions. No waiver or approval hereunder shall
require any similar or dissimilar waiver or approval thereafter to be granted
hereunder.
For purposes of this Section 11.1, the Syndication Agent, if any, in
coordination with the Administrative Agent, shall have primary responsibility,
together with the Borrowers, in the negotiation, preparation and documentation
relating to any amendment, modification or waiver under this Agreement, any
other Loan Document or any other agreement or document related hereto or thereto
contemplated pursuant to this Section.
SECTION 11.2. Notices; Time. All notices and other communications
provided under each Loan Document shall be in writing or by facsimile and
addressed, delivered or transmitted, if to either Agent or either Borrower, at
its address or facsimile number set forth below its signature in this Agreement,
and if to a Lender or Issuer to the applicable Person at its address or
facsimile number set forth below its signature in this Agreement or set forth in
the Lender Assignment Agreement pursuant to which it became a Lender hereunder,
or at such other address or facsimile number as may be designated by any such
party in a notice to the other parties. Any notice, if mailed and properly
addressed with postage prepaid or if properly addressed and sent by pre-paid
courier service, shall be deemed given when received; any notice, if transmitted
by facsimile, shall be deemed given when the confirmation of transmission
thereof is received by the transmitter. Unless otherwise indicated, all
references to the time of a day in a Loan Document shall refer to New York City
time.
SECTION 11.3. Payment of Costs and Expenses. The Borrowers jointly and
severally agree to pay on demand all expenses of each Agent (including the fees
and out-of-pocket expenses of ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, counsel to the Agents and
of local counsel, if any, who may be retained by or on behalf of the Agents) in
connection with
(a) the negotiation, preparation, execution and delivery of
each Loan Document, including schedules and exhibits, and any
amendments, waivers, consents, supplements or other modifications to
any Loan Document as may from time to time hereafter be required,
whether or not the transactions contemplated hereby are consummated;
and
(b) the filing or recording of any Loan Document (including
the Filing Statements) and all amendments, supplements, amendment and
restatements and other modifications to any thereof, searches made
following the Closing Date in jurisdictions where Filing Statements (or
other documents evidencing Liens in favor of the Secured Parties) have
been recorded and any and all other documents or instruments of further
assurance required to be filed or recorded by the terms of any Loan
Document; and
-110-
(c) the preparation and review of the form of any document or
instrument relevant to any Loan Document.
The Borrowers further agree to jointly and severally pay, and to save each
Secured Party harmless from all liability for, any stamp or other taxes which
may be payable in connection with the execution or delivery of each Loan
Document, the Credit Extensions or the issuance of the Notes. The Borrowers also
agree to jointly and severally reimburse each Secured Party upon demand for all
reasonable out-of-pocket expenses (including reasonable attorneys' fees and
legal expenses of counsel to each Secured Party) incurred by such Secured Party
in connection with (x) the negotiation of any restructuring or "work-out" with
either Borrower, whether or not consummated, of any Obligations and (y) the
enforcement of any Obligations.
SECTION 11.4. Indemnification. In consideration of the execution and
delivery of this Agreement by each Secured Party, the Borrowers hereby jointly
and severally indemnify, exonerate and hold each Secured Party and each of their
respective officers, directors, employees and agents (collectively, the
"Indemnified Parties") free and harmless from and against any and all actions,
causes of action, suits, losses, costs, liabilities and damages, and expenses
incurred in connection therewith (irrespective of whether any such Indemnified
Party is a party to the action for which indemnification hereunder is sought),
including reasonable attorneys' fees and disbursements, whether incurred in
connection with actions between or among the parties hereto or the parties
hereto and third parties (collectively, the "Indemnified Liabilities"), incurred
by the Indemnified Parties or any of them as a result of, or arising out of, or
relating to
(a) any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of any Credit
Extension, including all Indemnified Liabilities arising in connection
with the Transaction;
(b) the entering into and performance of any Loan Document by
any of the Indemnified Parties (including any action brought by or on
behalf of either Borrower as the result of any determination by the
Required Lenders pursuant to Article V not to fund any Credit
Extension, provided that any such action is resolved in favor of such
Indemnified Party);
(c) any investigation, litigation or proceeding related to any
acquisition or proposed acquisition by any Obligor or any Subsidiary
thereof of all or any portion of the Capital Securities or assets of
any Person, whether or not an Indemnified Party is party thereto;
-111-
(d) any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter relating to
the protection of the environment or the Release by any Obligor or any
Subsidiary thereof of any Hazardous Material;
(e) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any real
property owned or operated by any Obligor or any Subsidiary thereof of
any Hazardous Material (including any losses, liabilities, damages,
injuries, costs, expenses or claims asserted or arising under any
Environmental Law), regardless of whether caused by, or within the
control of, such Obligor or Subsidiary; or
(f) each Lender's Environmental Liability (the indemnification
herein shall survive repayment of the monetary Obligations and any
transfer of the property of any Obligor or its Subsidiaries by
foreclosure or by a deed in lieu of foreclosure for any Lender's
Environmental Liability, regardless of whether caused by, or within the
control of, such Obligor or such Subsidiary);
except for Indemnified Liabilities arising for the account of a particular
Indemnified Party by reason of the relevant Indemnified Party's gross negligence
or wilful misconduct (as determined by a court having jurisdiction in a final
proceeding) or disputes between Indemnified Parties. Each Obligor and its
successors and assigns hereby waive, release and agree not to make any claim or
bring any cost recovery action against, any Indemnified Party under CERCLA or
any state equivalent, or any similar law now existing or hereafter enacted. It
is expressly understood and agreed that to the extent that any Indemnified Party
is strictly liable under any Environmental Laws, each Obligor's obligation to
such Indemnified Party under this indemnity shall likewise be without regard to
fault on the part of any Obligor with respect to the violation or condition
which results in liability of an Indemnified Party. If and to the extent that
the foregoing undertaking may be unenforceable for any reason, each Obligor
agrees to make the maximum contribution to the payment and satisfaction of each
of the Indemnified Liabilities which is permissible under applicable law.
It is understood and agreed that, to the extent not precluded by a
conflict of interest, each Indemnified Party shall endeavor to make reasonable
efforts to minimize the legal and other expenses associated with any defense and
any potential settlement or judgment (including the use of single counsel
selected by such Indemnified Parties). Settlement of any such claim or
litigation involving any material indemnified amount will require the approval
of the relevant Obligor (such approval not to be unreasonably withheld or
delayed).
SECTION 11.5. Survival. The obligations of each Borrower under Sections
4.3, 4.4, 4.5, 4.6, 11.3 and 11.4, the obligations of Holdings under Article X
in respect of such obligations of each such Borrower and the obligations of the
Lenders under Section 9.1, shall in each case survive any assignment from one
Lender to another (in the case of Sections 11.3 and 11.4) and the occurrence of
the Termination Date. The representations and warranties made by each Obligor
and the Seller in each Loan Document shall survive the execution and delivery of
such Loan Document.
-112-
SECTION 11.6. Severability. Any provision of any Loan Document which is
prohibited or unenforceable in any jurisdiction shall, as to such provision and
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of such Loan
Document or affecting the validity or enforceability of such provision in any
other jurisdiction.
SECTION 11.7. Headings. The various headings of each Loan Document are
inserted for convenience only and shall not affect the meaning or interpretation
of such Loan Document or any provisions thereof.
SECTION 11.8. Execution in Counterparts, Effectiveness, etc. This
Agreement may be executed by the parties hereto in several counterparts, each of
which shall be an original and all of which shall constitute together but one
and the same agreement. This Agreement shall become effective when counterparts
hereof executed on behalf of each Borrower, each Agent and each Lender (or
notice thereof satisfactory to the Agents), shall have been received by the
Agents.
SECTION 11.9. Governing Law; Entire Agreement. EACH LOAN DOCUMENT
(OTHER THAN THE LETTERS OF CREDIT, TO THE EXTENT SPECIFIED BELOW AND EXCEPT AS
OTHERWISE EXPRESSLY SET FORTH IN A LOAN DOCUMENT) WILL EACH BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK). EACH STANDBY LETTER OF CREDIT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED
IN SUCH LETTER OF CREDIT, OR IF NO LAWS OR RULES ARE DESIGNATED, THE
INTERNATIONAL STANDBY PRACTICES (ISP98--INTERNATIONAL CHAMBER OF COMMERCE
PUBLICATION NUMBER 590 (THE "ISP RULES")) AND, AS TO MATTERS NOT GOVERNED BY THE
ISP RULES, THE INTERNAL LAWS OF THE STATE OF NEW YORK. EACH OTHER LETTER OF
CREDIT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES
DESIGNATED IN SUCH LETTER OF CREDIT, OR IF NO LAWS OR RULES ARE DESIGNATED, THE
UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS, 1993 REVISION, ICC
PUBLICATION NO. 500 (THE "UNIFORM CUSTOMS") AND, AS TO MATTERS NOT GOVERNED BY
THE UNIFORM CUSTOMS, THE INTERNAL LAWS OF THE STATE OF NEW YORK. The Loan
Documents constitute the entire understanding among the parties hereto with
respect to the subject matter thereof and supersede any prior agreements,
written or oral, with respect thereto.
-113-
SECTION 11.10. Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that neither Borrower may assign or
transfer its rights or obligations hereunder without the consent of all of the
Lenders.
SECTION 11.11. Sale and Transfer of Credit Extensions; Participations
in Credit Extensions Notes. Each Lender may assign, or sell participations in,
its Loans, Letters of Credit and Commitments to one or more other Persons in
accordance with this the terms set forth below.
SECTION 11.11.1. Assignments. Any Lender (an "Assignor Lender"),
(a) with the written consent of Holdings, the Agents and (in
the case of any assignment of Revolving Loan Commitments and related
participations in Letters of Credit, Letter of Credit Outstandings and
Swing Line Loans) the Issuers (which consents (i) shall not be
unreasonably delayed or withheld, (ii) of Holdings shall not be
required upon the occurrence and during the continuance of any Event of
Default and (iii) of the Agents and the Issuers shall not be required
in the case of any assignment made by CSFB, BofA or any of their
respective Affiliates), may at any time assign and delegate to one or
more commercial banks, funds that are regularly engaged in making,
purchasing or investing in loans or securities, or other financial
institutions, and
(b) with notice to Holdings, the Agents, and (in the case of
any assignment of Revolving Loan Commitments and related participations
in Letters of Credit, Letter of Credit Outstandings and Swing Line
Loans) the Issuers, but without the consent of Holdings, the Agents or
the Issuers, may assign and delegate to any of its Affiliates or
Related Funds or to any other Lender or any Affiliate or Related Fund
of any other Lender
(each Person described in either of the foregoing clauses as being the Person to
whom such assignment and delegation is to be made, being hereinafter referred to
as an "Assignee Lender"), all or any fraction of such Assignor Lender's Loans
and Commitments (and in the case of any assignment of Revolving Loan
Commitments, related participations in Letters of Credit, Letter of Credit
Outstandings and Swing Line Loans) (which assignment and delegation shall be, as
among Revolving Loan Commitments, Revolving Loans and participations in Letters
of Credit, Letter of Credit Outstandings and Swing Line Loans of a constant, and
not a varying, percentage) is in a minimum aggregate amount of (i) $1,000,000
(provided that (1) assignments that are made on the same day to funds that (x)
invest in commercial loans and (y) are managed or advised by the same investment
advisor or any Affiliate of such investment advisor may be treated as a single
assignment for purposes of the minimum amount and (2) no minimum amount shall be
required in the case of any assignment between two Lenders so long as the
Assignor Lender has an aggregate amount of Loans and Commitments of at least
$1,000,000 following such assignment) unless Holdings and the Agents otherwise
consent or (ii) the then remaining amount of such Assignor Lender's Loans and
Commitments; provided, however, that any such Assignee Lender will comply, if
applicable, with the provisions contained in Section 4.6 and the Borrowers, each
other Obligor, the Seller and the Agents shall be entitled to continue to deal
solely and directly with such Assignor Lender in connection with the interests
so assigned and delegated to an Assignee Lender until
-114-
(A) written notice of such assignment and delegation, together
with payment instructions, addresses and related information with
respect to such Assignee Lender, shall have been given to Holdings and
the Agents by such Assignor Lender and such Assignee Lender;
(B) such Assignee Lender shall have executed and delivered to
Holdings and the Agents a Lender Assignment Agreement, accepted by the
Agents;
(C) the processing fees described below shall have been paid;
and
(D) the Administrative Agent shall have registered such
assignment and delegation in the Register pursuant to clause (b) of
Section 2.7.
From and after the date that the Agents accept such Lender Assignment Agreement
and such assignment and delegation is registered pursuant to clause (b) of
Section 2.7, (x) the Assignee Lender thereunder shall be deemed automatically to
have become a party hereto and to the extent that rights and obligations
hereunder have been assigned and delegated to such Assignee Lender in connection
with such Lender Assignment Agreement, shall have the rights and obligations of
a Lender hereunder and under the other Loan Documents, and (y) the Assignor
Lender, to the extent that rights and obligations hereunder have been assigned
and delegated by it in connection with such Lender Assignment Agreement, shall
be released from its obligations hereunder and under the other Loan Documents.
Any Assignor Lender that shall have previously requested and received any Note
or Notes in respect of any Tranche to which any such assignment applies shall,
upon the acceptance by the Administrative Agent of the applicable Lender
Assignment Agreement, ▇▇▇▇ such Note or Notes "exchanged" and deliver them to
the Borrowers (against, if the Assignor Lender has retained Loans or Commitments
with respect to the applicable Tranche and has requested replacement Notes
pursuant to clause (b)(ii) of Section 2.7, its receipt from the Borrowers of
replacement Notes in the principal amount of the Loans and Commitments of the
applicable Tranche retained by it). Such Assignor Lender or such Assignee Lender
(unless the Assignor Lender or the Assignee Lender is CSFB or one of its
Affiliates) must also pay a processing fee to the Administrative Agent upon
delivery of any Lender Assignment Agreement in the amount of $3,500, unless such
assignment and delegation is by a Lender to its Affiliate or Related Fund or if
such assignment and delegation is by a Lender to a Federal Reserve Bank, as
provided below or is otherwise consented to by the Administrative Agent. Any
attempted assignment and delegation not made in accordance with this Section
11.11.1 shall be null and void. Nothing contained in this Section 11.11.1 shall
prevent or prohibit any Lender from pledging its rights (but not its obligations
to make Loans or participate in Letters of Credit, Letter of Credit Outstandings
or Swing Line Loans) under this Agreement and/or its Loans hereunder to
-115-
a Federal Reserve Bank in support of borrowings made by such Lender from such
Federal Reserve Bank and any Lender that is a fund that invests in bank loans
may pledge all or any portion of its rights (but not its obligations to make
Loans or participate in Letters of Credit or Letter of Credit Outstandings)
hereunder to any trustee or holders of obligations owed, or securities issued
by, such fund as security for such obligations or securities or to any other
representative of such holders. In the event that S&P, ▇▇▇▇▇'▇ or ▇▇▇▇▇▇▇▇'▇
BankWatch (or InsuranceWatch Ratings Service, in the case of Lenders that are
insurance companies (or Best's Insurance Reports, if such insurance company is
not rated by Insurance Watch Ratings Service)) shall, after the date that any
Lender with a Commitment to make Revolving Loans or participate in Letters of
Credit, Letter of Credit Outstandings or Swing Line Loans becomes a Lender,
downgrade the long-term certificate of deposit rating or long-term senior
unsecured debt rating of such Lender, and the resulting rating shall be below
BBB-, Baa3 or C (or BB, in the case of Lender that is an insurance company (or
B, in the case of an insurance company not rated by InsuranceWatch Ratings
Service)) respectively, then the applicable Issuer or Holdings shall have the
right, but not the obligation, upon notice to such Lender and the Agents, to
replace such Lender with an Assignee Lender in accordance with and subject to
the restrictions contained in this Section, and such Lender hereby agrees to
transfer and assign without recourse (in accordance with and subject to the
restrictions contained in this Section) all its interests, rights and
obligations in respect of its Revolving Loan Commitment under this Agreement to
such Assignee Lender; provided, however, that (i) no such assignment shall
conflict with any law, regulation or order of any governmental authority and
(ii) such Assignee Lender shall pay to such Lender in immediately available
funds on the date of such assignment the principal of and interest and fees (if
any) accrued to the date of payment on the Loans made, and Letters of Credit
participated in, by such Lender hereunder and all other amounts accrued for such
Lender's account or owed to it hereunder.
SECTION 11.11.2. Participations. Any Lender may sell to one or more
commercial banks or other Persons (each of such commercial banks and other
Persons being herein called a "Participant") participating interests in any of
the Loans, Commitments, or other interests of such Lender hereunder; provided,
however, that
(a) no participation contemplated in this Section shall
relieve such Lender from its Commitments or its other obligations under
any Loan Document;
(b) such Lender shall remain solely responsible for the
performance of its Commitments and such other obligations;
(c) each Obligor, the Seller and the Agents shall continue to
deal solely and directly with such Lender in connection with such
Lender's rights and obligations under each Loan Document;
(d) no Participant, unless such Participant is an Affiliate of
such Lender or is itself a Lender, shall be entitled to require such
Lender to take or refrain from taking any action under any Loan
Document, except that such Lender may agree with any Participant that
such Lender will not, without such Participant's consent, take any
actions of the type described in clauses (a), (b), (c) or (f) of
Section 11.1 with respect to Obligations participated in by such
Participant; and
-116-
(e) neither Holdings nor either Borrower shall be required to
pay any amount under this Agreement that is greater than the amount
which it would have been required to pay had no participating interest
been sold.
Each Borrower and Holdings acknowledges and agrees that each Participant, for
purposes of Sections 4.3, 4.4, 4.5, 4.6, 4.8, 4.9, 7.1.1, 11.3 and 11.4, shall
be considered a Lender. Each Participant shall only be indemnified for increased
costs pursuant to Section 4.3, 4.5 or 4.6 if and to the extent that the Lender
which sold such participating interest to such Participant concurrently is
entitled to make, and does make, a claim on such Borrower or (with respect to
any claim under Section 4.6) Holdings for such increased costs and, in the case
of Section 4.6, such Participant complies therewith as if it were a Lender. Any
Lender that sells a participating interest in any Loan, Commitment or other
interest to a Participant under this Section shall indemnify and hold harmless
Holdings, each Borrower and the Administrative Agent from and against any taxes,
penalties, interest or other costs or losses (including reasonable attorneys'
fees and expenses) incurred or payable by Holdings, such Borrower or the
Administrative Agent as a result of the failure of such Borrower or the
Administrative Agent to comply with its obligations to deduct or withhold any
Taxes from any payments made pursuant to this Agreement to such Lender or the
Administrative Agent, as the case may be, which Taxes would not have been
incurred or payable if such Participant had been a Non-Domestic Lender that was
entitled to deliver to the Borrowers, the Administrative Agent or such Lender,
and did in fact so deliver, a duly completed and valid Form W-8BEN or W-8ECI (or
applicable successor form) entitling such Participant to receive payments under
this Agreement without deduction or withholding of any United States federal
Taxes.
Each Lender shall, as agent of Holdings and the Borrowers solely for
the purpose of this Section, record in book entries maintained by such Lender
the name and the amount of the participating interest of each Participant
entitled to receive payments in respect of any participating interests sold
pursuant to this Section.
SECTION 11.12. Reorganization Transaction. Notwithstanding any
provision in this Agreement or any other Loan Document to the contrary, so long
as there shall not exist any pending or threatened action, suit, investigation,
litigation or proceeding pending or threatened in any court or before any
arbitrator or governmental instrumentality which contests the consummation of
any of the following transactions, upon an election by Holdings,
(a) Holdings, at any time, in its sole discretion may,
contemporaneously with the assumption and issuances referred to in
clauses (b) and (c) below, contribute all of its assets (including the
Capital Securities of WRC) to WRC; provided that the Administrative
Agent shall have a perfected pledge of, and security interest in and to
all such assets so contributed as it had immediately prior to such
contribution pursuant to such documentation and opinions in form and
substance reasonably satisfactory to the Administrative Agent and its
counsel as shall be necessary in the opinion of the Administrative
Agent to create, perfect or maintain the collateral position of the
Secured Parties therein;
-117-
(b) WRC may, contemporaneously with the contribution referred to in
clause (a) above and the issuances referred to in clause (c) below, assume
substantially all of the liabilities of Holdings so long as (i) no Specified
Default shall have occurred and be continuing on the date any such liabilities
are to be assumed, nor would a Specified Default result from any such assumption
and (ii) after giving effect to any such assumption, Holdings and the Borrowers
shall be in pro forma compliance with the covenants set forth in Section 7.2.4
for the most recent fully ended Fiscal Quarter preceding the date of such
assumption;
(c) WRC may, contemporaneously with the contribution and assumption
referred to in clauses (a) and (b) above, issue its common stock and its WRC
▇▇▇ ▇▇ Preferred Equity to Holdings so long as
(A) no Specified Default shall have occurred and be continuing
on the date of such issuance, nor would a Specified Default result from
any such issuance;
(B) after giving effect to such issuance, the Borrowers shall
be in pro forma compliance with the covenants set forth in Section
7.2.4 for the most recent fully ended Fiscal Quarter preceding the date
of such issuance; and
(C) after giving effect to such issuance, the Administrative
Agent shall have a perfected pledge of, and security interest in and to
all of the issued and outstanding interests of Capital Securities of
each Borrower (including the WRC ▇▇▇ ▇▇ Preferred Equity) as the
Administrative Agent had immediately prior to such issuance in form and
substance reasonably satisfactory to the Administrative Agent and its
counsel, pursuant to such documentation and opinions as shall be
necessary in the opinion of the Administrative Agent to create, perfect
or maintain the collateral position of the Secured Parties therein; and
(d) Holdings may distribute all of the WRC ▇▇▇ ▇▇ Preferred Equity to
the PIK Preferred Equity Holders in exchange for all of the PIK Preferred
Equity and distribute up to 3% of the outstanding WRC common stock held by
Holdings in exchange for all or the remainder of the Holdings (Unit) Common
Stock.
-118-
The parties hereto agree to cooperate with each other in connection
with any such contribution or assumption or related transaction described in
this Section 11.12 to amend the Loan Documents to the extent reasonably
necessary to adjust for the effect of any such contribution, assumption or
related transaction described in this Section 11.12; provided that such
amendments could not reasonably be expected to have a material adverse effect on
the rights or remedies of any Secured Party under any Loan Document as in effect
immediately prior to any such amendment.
SECTION 11.13. Confidentiality. Each of the Agents and the Lenders
agrees to maintain the confidentiality of the Confidential Information (as
defined below), except that Confidential Information may be disclosed (a) to its
and its Affiliates' directors, officers, employees and agents, including
accountants, legal counsel and other advisors on a need-to-know basis (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Confidential Information and instructed to keep
such Confidential Information confidential), (b) to the extent requested by any
regulatory authority, (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other party
to this Agreement, (e) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding relating to this Agreement or the enforcement
of rights hereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to any assignee or participant
of, or any successor to, any of its rights or obligations under this Agreement,
or to any direct or indirect contractual counterparties in agreements relating
to Hedging Obligations or such contractual counterparties' professional
advisors, (g) with the consent of Holdings or (h) to the extent such
Confidential Information (i) becomes publicly available other than as a result
of a breach of this Section or (ii) becomes available to any Agent or any Lender
on a nonconfidential basis from a source other than Holdings or any of its
Subsidiaries. For the purposes of this Section, "Confidential Information" means
all information received from Holdings or any of its Subsidiaries relating to
its business, other than any such information that is available to the
Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by Holdings or any of its Subsidiaries; provided that, in the case of
information received from Holdings or any of its Subsidiaries after the date
hereof, such information is clearly identified at the time of delivery as
confidential. Any Person required to maintain the confidentiality of
Confidential Information as provided in this Section shall be considered to have
complied with its obligation to do so if such Person has exercised the same
degree of care to maintain the confidentiality of such Confidential Information
as such Person would accord to its own confidential information.
SECTION 11.14. Other Transactions. Nothing contained herein shall
preclude the Administrative Agent, any Issuer or any other Lender from engaging
in any transaction, in addition to those contemplated by the Loan Documents,
with Holdings, either Borrower or any of their respective Affiliates in which
Holdings, such Borrower or such Affiliate is not restricted hereby from
engaging with any other Person.
-119-
SECTION 11.15. Independence of Covenants. All covenants contained in
this Agreement and each other Loan Document shall be given independent effect
such that, in the event a particular action or condition is not permitted by any
of such covenants, the fact that it would be permitted by an exception to, or be
otherwise within the limitations of, another covenant shall not, unless
expressly so provided in such first covenant, avoid the occurrence of a Default
or an Event of Default if such action is taken or such condition exists.
SECTION 11.16. Forum Selection and Consent to Jurisdiction. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, ANY
LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
ORAL OR WRITTEN) OR ACTIONS OF THE AGENTS, THE LENDERS, ANY ISSUER, HOLDINGS OR
EITHER BORROWER IN CONNECTION HEREWITH OR THEREWITH MAY BE BROUGHT AND
MAINTAINED IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT
ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT, AT THE AGENTS' OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH
COLLATERAL OR OTHER PROPERTY MAY BE FOUND. HOLDINGS AND EACH BORROWER
IRREVOCABLY CONSENT TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK AT THE
ADDRESS FOR NOTICES SPECIFIED IN SECTION 11.2. HOLDINGS AND EACH BORROWER HEREBY
EXPRESSLY AND IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY
SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT
ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT
THAT HOLDINGS OR EITHER BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR
NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, HOLDINGS AND SUCH BORROWER
HEREBY IRREVOCABLY WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW SUCH IMMUNITY IN
RESPECT OF ITS OBLIGATIONS UNDER THE LOAN DOCUMENTS.
-120-
SECTION 11.17. Waiver of Jury Trial. EACH AGENT, EACH LENDER, EACH
ISSUER, HOLDINGS AND EACH BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHTS THEY MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING
OUT OF, UNDER, OR IN CONNECTION WITH, EACH LOAN DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF
SUCH AGENT, SUCH LENDER, SUCH ISSUER, HOLDINGS OR SUCH BORROWER IN CONNECTION
THEREWITH. HOLDINGS AND EACH BORROWER ACKNOWLEDGE AND AGREE THAT THEY HAVE
RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER
PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS
PROVISION IS A MATERIAL INDUCEMENT FOR EACH AGENT, EACH LENDER AND EACH ISSUER
ENTERING INTO THE LOAN DOCUMENTS.
[End of Agreement]
-121-
SCHEDULE I
DISCLOSURE SCHEDULE TO CREDIT AGREEMENT
ITEM 6.7. Litigation.
ITEM 6.8. Existing Subsidiaries.
ITEM 6.11. Employee Benefit Plans.
ITEM 6.12. Environmental Matters.
ITEM 6.17(a) Holdings Share Ownership.
ITEM 6.17(b) WRC Share Ownership.
ITEM 6.17(c) CLI Share Ownership.
ITEM 6.17(d) ChildU Share Ownership.
ITEM 7.1.11. States with more than $1,000,000 Collateral.
ITEM 7.2.2(b) Indebtedness to be Paid.
ITEM 7.2.2(c) Existing Indebtedness.
ITEM 7.2.3(c) Ongoing Liens.
ITEM 7.2.5(a) Ongoing Investments.
-122-
TABLE OF CONTENTS
Section Page
-------------------------------------------------------------------------------------
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.1. Defined Terms .......................................................... 5
1.2. Use of Defined Terms ................................................... 43
1.3. Cross-References ....................................................... 44
1.4. Accounting and Financial Determinations ................................ 44
ARTICLE II
COMMITMENTS, BORROWING AND ISSUANCE
PROCEDURES, NOTES AND LETTERS OF CREDIT
2.1. Commitments ............................................................ 44
2.1.1. Continuation of Existing Term Loans; Term Loan Commitments ............. 44
2.1.2. Revolving Loan Commitment and Swing Line Loan Commitment ............... 45
2.1.3. Letter of Credit Commitment ............................................ 45
2.2. Reduction of the Commitment Amounts .................................... 46
2.2.1. Optional ............................................................... 46
2.2.2. Mandatory .............................................................. 46
2.3. Borrowing Procedures ................................................... 47
2.3.1. Borrowing Procedure .................................................... 47
2.3.2. Swing Line Loans ....................................................... 47
2.4. Continuation and Conversion Elections .................................. 48
2.5. Funding ................................................................ 49
2.6. Issuance Procedures .................................................... 49
2.6.1. Other Lenders' Participation ........................................... 49
2.6.2. Disbursements; Conversion to Revolving Loans ........................... 50
2.6.3. Reimbursement .......................................................... 50
2.6.4. Deemed Disbursements ................................................... 51
2.6.5. Nature of Reimbursement Obligations .................................... 51
2.6.6. Existing Letters of Credit ............................................. 52
2.7. Register; Notes ........................................................ 52
-i-
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
3.1. Repayments and Prepayments; Application ................................ 54
3.1.1. Repayments and Prepayments ............................................. 54
3.1.2. Application ............................................................ 58
3.1.3. Prepayment of Term B Loans ............................................. 59
3.2. Interest Provisions .................................................... 59
3.2.1. Rates .................................................................. 59
3.2.2. Post-Default Rates ..................................................... 60
3.2.3. Payment Dates .......................................................... 60
3.3. Fees ................................................................... 61
3.3.1. Commitment Fee ......................................................... 61
3.3.2. Agents' Fees ........................................................... 61
3.3.3. Letter of Credit Fee ................................................... 61
ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
4.1. LIBO Rate Lending Unlawful .............................................. 62
4.2. Deposits Unavailable .................................................... 62
4.3. Increased LIBO Rate Loan Costs, etc ..................................... 62
4.4. Funding Losses .......................................................... 63
4.5. Increased Capital Costs ................................................. 63
4.6. Taxes ................................................................... 64
4.7. Payments, Computations, etc ............................................. 67
4.8. Sharing of Payments ..................................................... 68
4.9. Setoff .................................................................. 68
4.10. Replacement of Lenders .................................................. 69
ARTICLE V
CONDITIONS TO CREDIT EXTENSIONS
5.1. [INTENTIONALLY OMITTED] ................................................ 70
5.2. All Credit Extensions .................................................. 70
5.2.1. Compliance with Warranties, No Default, etc ............................ 70
5.2.2. Credit Extension Request, etc .......................................... 70
-ii-
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1. Organization, etc ...................................................... 70
6.2. Due Authorization, Non-Contravention, etc .............................. 71
6.3. Government Approval, Regulation, etc ................................... 71
6.4. Validity, etc .......................................................... 71
6.5. Financial Information .................................................. 72
6.6. No Material Adverse Change ............................................. 72
6.7. Litigation, Labor Controversies, etc ................................... 72
6.8. Subsidiaries ........................................................... 73
6.9. Ownership of Properties ................................................ 73
6.10. Taxes .................................................................. 73
6.11. Pension and Welfare Plans .............................................. 73
6.12. Environmental Warranties ............................................... 74
6.13. Accuracy of Information ................................................ 75
6.14. Regulations U and X .................................................... 75
6.15. Issuance of Subordinated Debt; Status of Obligations
as Senior Debt, etc ................................................... 75
6.16. Solvency ............................................................... 76
6.17. Capitalization ......................................................... 76
ARTICLE VII
COVENANTS
7.1. Affirmative Covenants ................................................. 77
7.1.1. Financial Information, Reports, Notices, etc .......................... 78
7.1.2. Maintenance of Existence; Compliance with Laws, etc ................... 80
7.1.3. Maintenance of Properties ............................................. 81
7.1.4. Insurance ............................................................. 81
7.1.5. Books and Records ..................................................... 81
7.1.6. Environmental Law Covenant ............................................ 82
7.1.7. Use of Proceeds ....................................................... 82
7.1.8. Future Subsidiary Guarantors, Security, etc ........................... 83
7.1.9. Rate Protection Agreements ............................................ 83
7.1.10. Leased Property ....................................................... 83
7.1.11. Additional Opinions ................................................... 84
7.1.12. Preservation of Corporate Existence ................................... 84
7.2. Negative Covenants .................................................... 84
-iii-
7.2.1. Business Activities ................................................... 84
7.2.2. Indebtedness .......................................................... 85
7.2.3. Liens ................................................................. 87
7.2.4. Financial Condition and Operations .................................... 89
7.2.5. Investments ........................................................... 90
7.2.6. Restricted Payments, etc .............................................. 92
7.2.7. Capital Expenditures, etc ............................................. 94
7.2.8. No Prepayment of Subordinated Debt .................................... 94
7.2.9. Capital Securities .................................................... 95
7.2.10. Consolidation, Merger, etc ............................................ 96
7.2.11. Permitted Dispositions ................................................ 96
7.2.12. Modification of Certain Agreements .................................... 97
7.2.13. Transactions with Affiliates .......................................... 97
7.2.14. Restrictive Agreements, etc ........................................... 97
7.2.15. Sale and Leaseback .................................................... 98
7.2.16. Designation of Senior Debt ............................................ 98
ARTICLE VIII
EVENTS OF DEFAULT
8.1. Listing of Events of Default .......................................... 98
8.1.1. Non-Payment of Obligations ............................................ 98
8.1.2. Breach of Warranty .................................................... 98
8.1.3. Non-Performance of Certain Covenants and Obligations .................. 99
8.1.4. Non-Performance of Other Covenants and Obligations .................... 99
8.1.5. Default on Other Indebtedness ......................................... 99
8.1.6. Judgments ............................................................. 99
8.1.7. Pension Plans ......................................................... 99
8.1.8. Change in Control ..................................................... 100
8.1.9. Bankruptcy, Insolvency, etc ........................................... 100
8.1.10. Impairment of Security, etc ........................................... 100
8.1.11. Failure of Subordination .............................................. 101
8.2. Action if Bankruptcy .................................................. 101
8.3. Action if Other Event of Default ...................................... 101
-iv-
ARTICLE IX
THE ADMINISTRATIVE AGENT
9.1. Actions ................................................................ 101
9.2. Funding Reliance, etc .................................................. 102
9.3. Exculpation ............................................................ 102
9.4. Successor .............................................................. 103
9.5. Credit Extensions by each Agent ........................................ 103
9.6. Credit Decisions ....................................................... 104
9.7. Copies, etc ............................................................ 104
9.8. Reliance by Agents ..................................................... 104
9.9. Defaults ............................................................... 105
9.10. Documentation Agent .................................................... 105
ARTICLE X
HOLDINGS GUARANTY
10.1. Guaranty ............................................................... 105
10.2. Acceleration of Holdings Guaranty ...................................... 106
10.3. Guaranty Absolute, etc ................................................. 106
10.4. Reinstatement, etc ..................................................... 107
10.5. Waiver, etc ............................................................ 107
10.6. Postponement of Subrogation, etc ....................................... 108
10.7. Successors, Transferees and Assigns; Transfers of Notes, etc ........... 108
ARTICLE XI
MISCELLANEOUS PROVISIONS
11.1. Waivers, Amendments, etc ............................................. 109
11.2. Notices; Time ........................................................ 110
11.3. Payment of Costs and Expenses ........................................ 111
11.4. Indemnification ...................................................... 111
11.5. Survival ............................................................. 113
11.6. Severability ......................................................... 113
11.7. Headings ............................................................. 113
11.8. Execution in Counterparts, Effectiveness, etc ........................ 113
11.9. Governing Law; Entire Agreement ...................................... 113
11.10. Successors and Assigns ............................................... 114
11.11. Sale and Transfer of Credit Extensions; Participations
in Credit Extensions Notes .......................................... 114
11.11.1. Assignments .......................................................... 114
11.11.2. Participations ....................................................... 117
-v-
11.12. Reorganization Transaction ............................................. 118
11.13. Confidentiality ........................................................ 119
11.14. Other Transactions ..................................................... 120
11.15. Independence of Covenants .............................................. 120
11.16. Forum Selection and Consent to Jurisdiction ............................ 120
11.17. Waiver of Jury Trial ................................................... 121
-vi-
SCHEDULE I - Disclosure Schedule
EXHIBIT A-1 - Form of Revolving Note
EXHIBIT A-2 - Form of Term A Note
EXHIBIT A-3 - Form of Term B Note
EXHIBIT A-4 - Form of Swing Line Note
EXHIBIT B-1 - Form of Borrowing Request
EXHIBIT B-2 - Form of Issuance Request
EXHIBIT C - Form of Continuation/Conversion Notice
EXHIBIT D-1 - Form of Closing Date Certificate
EXHIBIT D-2 - Form of Amendment Effective Date Certificate
EXHIBIT E - Form of Compliance Certificate
EXHIBIT F - Form of Officer's Solvency Certificate
EXHIBIT G-1 - Form of Security and Pledge Agreement
EXHIBIT G-2 - Form of Seller Pledge Agreement
EXHIBIT H - Form of Perfection Certificate
EXHIBIT I-1 - Form of Mortgage
EXHIBIT I-2 - Form of Deed of Trust
EXHIBIT J - Form of Subsidiary Guaranty
EXHIBIT K - Form of Interco Subordination Agreement
EXHIBIT L - Form of Lender Assignment Agreement
EXHIBIT M - Form of Opinion of New York Counsel
to the Obligors
-vii-