EXHIBIT 4.1
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CREDIT AGREEMENT
among
THE ▇▇▇▇▇▇▇▇ COMPANIES, INC.,
▇▇▇▇▇▇▇▇ PUBLISHING COMPANY, L.L.C.,
THE LENDERS NAMED HEREIN,
FIRST UNION NATIONAL BANK,
as Administrative Agent,
CANADIAN IMPERIAL BANK OF COMMERCE,
as Syndication Agent,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING, INC.,
as Documentation Agent,
and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
BANKBOSTON, N.A. and THE BANK OF NEW YORK,
as Managing Agents
$325,000,000 Senior Credit Facilities
Arranged by
FIRST UNION CAPITAL MARKETS
A division of Wheat First Securities, Inc.
Dated as of March 31, 1998
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TABLE OF CONTENTS
Page
RECITALS
ARTICLE I
DEFINITIONS
1.1 Defined Terms........................................................ 1
1.2 Accounting Terms..................................................... 20
1.3 Designated Non-Guarantor Subsidiaries................................ 20
1.4 Other Terms; Construction............................................ 20
1.5 Officers, Directors of Limited Liability Companies................... 20
ARTICLE II
AMOUNT AND TERMS OF THE LOANS
2.1 Commitments; Loans................................................... 21
2.2 Borrowings........................................................... 21
2.3 Disbursements; Funding Reliance; Domicile of Loans................... 24
2.4 Notes................................................................ 25
2.5 Termination and Reduction of Commitments and Swingline Commitment.... 26
2.6 Mandatory Repayments and Prepayments................................. 27
2.7 Voluntary Prepayments................................................ 30
2.8 Interest............................................................. 31
2.9 Fees................................................................. 32
2.10 Interest Periods..................................................... 33
2.11 Conversions and Continuations........................................ 34
2.12 Method of Payments; Computations..................................... 35
2.13 Recovery of Payments................................................. 36
2.14 Use of Proceeds...................................................... 36
2.15 Pro Rata Treatment; Sharing of Payments.............................. 36
2.16 Increased Costs; Change in Circumstances; Illegality; etc............ 37
2.17 Taxes................................................................ 39
2.18 Compensation......................................................... 41
2.19 Duty to Mitigate..................................................... 41
2.20 Replacement of Lenders............................................... 41
ARTICLE III
LETTERS OF CREDIT
3.1 Issuance............................................................. 42
3.2 Outstanding Letter of Credit......................................... 43
3.3 Notices.............................................................. 43
3.4 Participations....................................................... 44
3.5 Reimbursement........................................................ 44
3.6 Payment by Revolving Loans........................................... 44
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3.7 Payment to Lenders................................................... 45
3.8 Obligations Absolute................................................. 45
3.9 Cash Collateral Account.............................................. 46
3.10 Effectiveness........................................................ 47
ARTICLE IV
CONDITIONS OF BORROWING
4.1 Conditions of Initial Borrowing...................................... 48
4.2 Conditions of All Borrowings......................................... 51
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1 Organization and Power............................................... 52
5.2 Authorization; Enforceability........................................ 52
5.3 No Violation......................................................... 52
5.4 Governmental Authorization; Permits.................................. 53
5.5 Litigation........................................................... 53
5.6 Taxes................................................................ 53
5.7 Subsidiaries......................................................... 54
5.8 Full Disclosure...................................................... 54
5.9 Margin Regulations................................................... 54
5.10 Financial Matters.................................................... 54
5.11 Ownership of Properties.............................................. 56
5.12 ERISA................................................................ 56
5.13 Environmental Matters................................................ 56
5.14 Compliance With Governing Documents, Decrees and Laws................ 58
5.15 Labor Relations...................................................... 58
5.16 Regulated Industries................................................. 58
5.17 Insurance............................................................ 58
5.18 Certain Contracts.................................................... 58
5.19 Capitalization....................................................... 59
5.20 Security Documents................................................... 59
ARTICLE VI
AFFIRMATIVE COVENANTS
6.1 Financial Statements................................................. 59
6.2 Other Business and Financial Information............................. 60
6.3 Existence; Franchises; Maintenance of Properties..................... 63
6.4 Compliance with Laws................................................. 63
6.5 Payment of Obligations............................................... 63
6.6 Insurance............................................................ 63
6.7 Maintenance of Books and Records; Inspection......................... 63
6.8 Permitted Acquisitions............................................... 64
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6.9 Creation or Acquisition of Subsidiaries.............................. 65
6.10 Additional Security; Further Assurances.............................. 66
6.11 Consents............................................................. 67
6.12 Year 2000............................................................ 67
6.13 Interest Rate Protection............................................. 67
ARTICLE VII
FINANCIAL COVENANTS
7.1 Leverage Ratio....................................................... 67
7.2 Interest Coverage Ratio.............................................. 68
7.3 Fixed Charge Coverage Ratio.......................................... 68
ARTICLE VIII
NEGATIVE COVENANTS
8.1 Merger; Consolidation................................................ 68
8.2 Indebtedness......................................................... 69
8.3 Liens................................................................ 70
8.4 Disposition of Assets................................................ 72
8.5 Investments.......................................................... 73
8.6 Restricted Payments.................................................. 74
8.7 Transactions with Affiliates......................................... 75
8.8 Lines of Business.................................................... 76
8.9 Certain Amendments................................................... 76
8.10 Limitation on Certain Restrictions................................... 77
8.11 No Other Negative Pledges............................................ 77
8.12 Fiscal Year.......................................................... 77
8.13 Accounting Changes................................................... 77
8.14 Designated Senior Indebtedness....................................... 77
ARTICLE IX
EVENTS OF DEFAULT
9.1 Events of Default.................................................... 78
9.2 Remedies: Termination of Commitments, Acceleration, etc.............. 80
9.3 Remedies: Set-Off.................................................... 80
ARTICLE X
THE ADMINISTRATIVE AGENT
10.1 Appointment......................................................... 81
10.2 Nature of Duties.................................................... 81
10.3 Exculpatory Provisions.............................................. 81
10.4 Reliance by Administrative Agent.................................... 82
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10.5 Non-Reliance on Administrative Agent and Other Lenders.............. 82
10.6 Notice of Default................................................... 83
10.7 Indemnification..................................................... 83
10.8 The Administrative Agent in its Individual Capacity................. 83
10.9 Successor Administrative Agent...................................... 84
10.10 Collateral Matters.................................................. 84
10.11 Documentation Agent, etc............................................ 84
10.12 Issuing Lender and Swingline Lender................................. 85
ARTICLE XI
MISCELLANEOUS
11.1 Fees and Expenses................................................... 85
11.2 Indemnification..................................................... 85
11.3 Governing Law; Consent to Jurisdiction.............................. 86
11.4 Waiver of Jury Trial; Arbitration; Preservation and
Limitation of Remedies.............................................. 86
11.5 Notices............................................................. 87
11.6 Amendments, Waivers, etc............................................ 88
11.7 Assignments, Participations......................................... 89
11.8 No Waiver........................................................... 91
11.9 Successors and Assigns.............................................. 92
11.10 Survival............................................................ 92
11.11 Severability........................................................ 92
11.12 Construction........................................................ 92
11.13 Confidentiality..................................................... 92
11.14 Counterparts........................................................ 93
11.15 Disclosure of Information........................................... 93
11.16 Entire Agreement.................................................... 93
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ANNEXES
Annex I Applicable Margin Percentages
EXHIBITS
Exhibit A-1 Form of Notice of Borrowing
Exhibit A-2 Form of Notice of Swingline Borrowing
Exhibit B-1 Form of Term Note
Exhibit B-2 Form of Revolving Credit Note
Exhibit B-3 Form of Swingline Note
Exhibit C Form of Notice of Prepayment
Exhibit D Form of Notice of Conversion/Continuation
Exhibit E Form of Letter of Credit Notice
Exhibit F Form of Parent Guaranty
Exhibit G Form of Borrower Pledge and Security Agreement
Exhibit H Form of Parent Pledge and Security Agreement
Exhibit I-1 Form of Opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
Exhibit I-2 Form of Opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ White & ▇▇▇▇▇▇▇▇▇
Exhibit J Form of Compliance Certificate
Exhibit K Form of Assignment and Acceptance
SCHEDULES
Schedule 1.1 Commitments
Schedule 5.7 Subsidiaries
Schedule 5.11 Leases
Schedule 5.17 Insurance
Schedule 5.18 Certain Contracts
Schedule 5.19 Capitalization
Schedule 8.3 Liens
Schedule 8.4 Scheduled Titles
Schedule 8.5 Investments
Schedule 8.7 Transactions with Affiliates
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of the 31st day of March, 1998 (this
"Agreement"), is made among THE ▇▇▇▇▇▇▇▇ COMPANIES, INC., a Delaware corporation
with its principal offices in Los Angeles, California ("Parent"), ▇▇▇▇▇▇▇▇
PUBLISHING COMPANY, L.L.C., a Delaware limited liability company with its
principal offices in Los Angeles, California and a wholly owned subsidiary of
Parent (the "Borrower"), the banks and financial institutions listed on the
signature pages hereof or that become parties hereto after the date hereof
(collectively, the "Lenders"), FIRST UNION NATIONAL BANK ("First Union"), as
administrative agent for the Lenders (in such capacity, the "Administrative
Agent"), CANADIAN IMPERIAL BANK OF COMMERCE, as syndication agent (in such
capacity, the "Syndication Agent"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING, INC., as
documentation agent (in such capacity, the "Documentation Agent"), and BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, BANKBOSTON, N.A., and THE BANK
OF NEW YORK, as managing agents (each, in such capacity, a "Managing Agent").
RECITALS
A. The Borrower has requested that the Lenders make available to the
Borrower credit facilities in the aggregate principal amount of $325,000,000.
The Borrower will use the proceeds of the facilities to repay certain existing
indebtedness, to pay or reimburse certain fees and expenses in connection
herewith and therewith, and for working capital and general corporate purposes,
including certain acquisitions, all as more fully described herein.
B. The Lenders are willing to make available to the Borrower the credit
facilities described herein subject to and on the terms and conditions set forth
in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual provisions, covenants and
agreements herein contained, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Defined Terms. For purposes of this Agreement, in addition to the terms
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defined elsewhere herein, the following terms shall have the meanings set forth
below (such meanings to be equally applicable to the singular and plural forms
thereof):
"ABR Loan" shall mean, at any time, any Loan that bears interest at such time
at the Adjusted Alternate Base Rate.
"Account Designation Letter" shall mean a letter from the Borrower to the
Administrative Agent, duly completed and signed by an Authorized Officer and in
form and substance satisfactory to
the Administrative Agent, listing any one or more accounts to which the Borrower
may from time to time request the Administrative Agent to forward the proceeds
of any Loans made hereunder.
"Acquisition" shall mean any transaction or series of related transactions,
consummated on or after the date hereof, by which a Person directly, or
indirectly through one or more of its Subsidiaries, (i) acquires any going
business, any publication or brand name and the related rights and assets, or
all or substantially all of the assets, of any Person, whether through purchase
of assets, merger or otherwise, or (ii) acquires securities or other ownership
interests of any Person having at least a majority of combined voting power of
the then outstanding securities or other ownership interests of such Person.
"Acquisition Amount" shall mean, with respect to any Acquisition, the sum
(without duplication) of (i) the amount of cash paid by the Borrower and its
Subsidiaries in connection with such Acquisition, (ii) the Fair Market Value of
all Capital Stock of Parent issued or given in connection with such Acquisition,
(iii) the amount (determined by using the face amount or the amount payable at
maturity, whichever is greater) of all Indebtedness incurred, assumed or
acquired by the Borrower and its Subsidiaries in connection with such
Acquisition, (iv) all additional purchase price amounts in connection with such
Acquisition in the form of earnouts and other contingent obligations that should
be recorded as a liability on the balance sheet of the Borrower and its
Subsidiaries or expensed, in either event in accordance with Generally Accepted
Accounting Principles, Regulation S-X under the Securities Act, or any other
rule or regulation of the Securities and Exchange Commission, (v) all amounts
paid in respect of covenants not to compete, consulting agreements and other
affiliated contracts in connection with such Acquisition, (vi) the amount of all
transaction fees and expenses (including, without limitation, legal, accounting
and finders' fees and expenses) incurred by the Borrower and its Subsidiaries in
connection with such Acquisition and (vii) the aggregate fair market value of
all other consideration given by the Borrower and its Subsidiaries in connection
with such Acquisition.
"Adjusted Alternate Base Rate" shall mean, at any time with respect to any ABR
Loan, a rate per annum equal to the Alternate Base Rate as in effect at such
time plus the Applicable Margin Percentage for the Class of such ABR Loan as in
effect at such time.
"Adjusted LIBOR Rate" shall mean, at any time with respect to any LIBOR Loan,
a rate per annum equal to the LIBOR Rate as in effect at such time plus the
Applicable Margin Percentage for the Class of such LIBOR Loan as in effect at
such time.
"Administrative Agent" shall mean First Union, in its capacity as
Administrative Agent appointed under ARTICLE X, and its successors and permitted
assigns in such capacity.
"Affiliate" shall mean, as to any Person, each other Person that directly, or
indirectly through one or more intermediaries, owns or controls, is controlled
by or under common control with, such Person or is a director or officer of such
Person. For purposes of this definition, with respect to any Person "control"
shall mean (i) the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise, or (ii)
the beneficial ownership of securities or other ownership interests of such
Person having 10% or more of the combined voting power of the then outstanding
securities or other ownership interests of such Person ordinarily (and apart
from rights accruing under special circumstances) having the right to vote in
the election of directors or other governing body of such Person.
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"Agents" shall mean, collectively, the Administrative Agent, the Syndication
Agent and the Documentation Agent.
"Agreement" shall mean this Credit Agreement, as amended, modified or
supplemented from time to time.
"Alternate Base Rate" shall mean the higher of (i) the per annum interest rate
publicly announced from time to time by First Union in Charlotte, North
Carolina, to be its prime rate (which may not necessarily be its best lending
rate), as adjusted to conform to changes as of the opening of business on the
date of any such change in such prime rate, or (ii) 0.5% per annum plus the
Federal Funds Rate, as adjusted to conform to changes as of the opening of
business on the date of any such change in the Federal Funds Rate.
"Applicable Margin Percentage" shall mean, at any time from and after the
Closing Date, the applicable percentage (a) to be added to the Alternate Base
Rate pursuant to SECTION 2.8 for purposes of determining the Adjusted Alternate
Base Rate,(b) to be added to the LIBOR Rate pursuant to SECTION 2.8 for purposes
of determining the Adjusted LIBOR Rate, and (c) to be used in calculating the
Revolving Credit Commitment Fee payable pursuant to SECTION 2.9(b), in each case
as determined in accordance with the matrices set forth in Annex I hereto. On
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each Adjustment Date, the Applicable Margin Percentages for ABR Loans and LIBOR
Loans and the Revolving Credit Commitment Fee shall be adjusted effective as of
such date (based upon the calculation of the Leverage Ratio as of the last day
of the fiscal period to which such Adjustment Date relates) in accordance with
the matrices set forth in Annex I hereto; provided, however, that,
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notwithstanding the foregoing or anything in Annex I to the contrary, if at any
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time Parent shall have failed to deliver the financial statements and a
Compliance Certificate as required by SECTION 6.1(a) or SECTION 6.1(b) (as the
case may be) and SECTION 6.2(a), or if at any time a Default or Event of Default
shall have occurred and be continuing, then at all times from and including the
date on which such statements and Compliance Certificate are required to have
been delivered (or the date of occurrence of such Default or Event of Default,
as the case may be) to the date on which the same shall have been delivered (or
such Default or Event of Default cured or waived, as the case may be), each
Applicable Margin Percentage shall be determined in accordance with Annex I
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hereto as if the Leverage Ratio were greater than or equal to 5.0 : 1.0
(notwithstanding the actual Leverage Ratio). For purposes of this definition,
"Adjustment Date" shall mean (y) the closing date of any Permitted Acquisition,
as more completely set forth in SECTION 6.8(d), and (z) with respect to any
fiscal quarter of Parent beginning with the fiscal quarter ending March 31,
1998, the tenth (10th) day (or, if such day is not a Business Day, on the next
succeeding Business Day) after delivery by Parent in accordance with SECTION
6.1(a) or SECTION 6.1(b), as the case may be, of (i) financial statements for
the most recently completed applicable fiscal period and (ii) a duly completed
Compliance Certificate with respect to such fiscal period. Until the first
Adjustment Date after the Closing Date, the Applicable Margin Percentages for
ABR Loans and LIBOR Loans and the Revolving Credit Commitment Fee shall be as
set forth in Annex I hereto as if the applicable Leverage Ratio were less than
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3.0 : 1.0.
"Arranger" shall mean First Union Capital Markets, a division of Wheat First
Securities, Inc.
"Asset Disposition" shall mean any sale, assignment, transfer or other
disposition by Parent or any of its Subsidiaries to any other Person (other than
to the Borrower or to a Wholly Owned Subsidiary of the Borrower), whether in one
transaction or in a series of related transactions, of any of its assets,
business units or other properties (including any interests in property, whether
tangible or
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intangible, and including Capital Stock of Subsidiaries), excluding (i) sales of
inventory and other assets and licenses or leases of intellectual property, in
each case in the ordinary course of business, (ii) the sale or exchange of used
or obsolete equipment to the extent the proceeds of such sale are applied
towards, or such equipment is exchanged for, similar replacement equipment, and
(iii) the sale or other disposition of the Scheduled Titles or Investments
relating thereto as permitted by clause (iii) of SECTION 8.4.
"Assignee" shall have the meaning given to such term in SECTION 11.7(a).
"Assignment and Acceptance" shall mean an Assignment and Acceptance entered
into between a Lender and an Assignee and accepted by the Administrative Agent
and the Borrower, in substantially the form of EXHIBIT K.
"Authorized Officer" shall mean (i) any individual properly authorized in
accordance with the terms of the operating agreement of the Borrower to take the
action specified herein on behalf of the Borrower or (ii) in the case of a
corporation or other Person (other than an individual) taking any action on
behalf of the Borrower in its capacity as a manager of the Borrower, any
individual properly authorized by resolution of the board of directors of such
corporation or other Person or in accordance with the terms of its operating
agreement to take the action specified herein on its behalf, and in each case
whose signature and incumbency shall have been certified to the Administrative
Agent by the secretary or an assistant secretary (or such other individual who
is properly authorized to perform the duties normally associated with the title
of secretary or assistant secretary) of the Borrower or such corporation or
other Person, as the case may be.
"Bankruptcy Code" shall mean 11 U.S.C. (S)(S) 101 et seq., as amended from
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time to time, and any successor statute.
"Borrower Pledge and Security Agreement" shall mean a pledge and security
agreement made by the Borrower in favor of the Administrative Agent, in
substantially the form of EXHIBIT G, as amended, modified or supplemented from
time to time.
"Borrowing" shall mean the incurrence by the Borrower (including as a result
of conversions and continuations of outstanding Loans pursuant to SECTION 2.11)
on a single date of a group of Loans of a single Class and Type (or a Swingline
Loan made by the Swingline Lender) and, in the case of LIBOR Loans, as to which
a single Interest Period is in effect.
"Borrowing Date" shall mean, with respect to any Borrowing, the date upon
which such Borrowing is made.
"Business Day" shall mean (i) any day other than a Saturday or Sunday, a legal
holiday or a day on which commercial banks in Charlotte, North Carolina are
required by law to be closed and (ii) in respect of any determination relevant
to a LIBOR Loan, any such day that is also a day on which tradings are conducted
in the London interbank Eurodollar market.
"Capital Expenditures" shall mean, for any period, the aggregate amount
(whether paid in cash or accrued as a liability) that would, in accordance with
Generally Accepted Accounting Principles, be included on the consolidated
statement of cash flows of Parent and its Subsidiaries for such period as
additions to equipment, fixed assets, real property or improvements or other
capital assets (including, without limitation, capital lease obligations);
provided, however, that Capital Expenditures shall not
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include any such expenditures (i) for replacements and substitutions for capital
assets, to the extent made with the proceeds of insurance, or (ii) made in
connection with Permitted Acquisitions.
"Capital Stock" shall mean (i) with respect to any Person that is a
corporation, any and all shares, interests or equivalents in corporate stock
(whether voting or nonvoting, and whether common or preferred) of such
corporation, and (ii) with respect to any Person that is not a corporation, any
and all partnership, membership, limited liability company or other equity
interests of such Person; and in each case, any and all warrants or options to
purchase any of the foregoing.
"Cash Collateral Account" shall have the meaning given to such term in SECTION
3.9.
"Cash Equivalents" shall mean (i) securities issued or unconditionally
guaranteed by the United States of America or any agency or instrumentality
thereof, backed by the full faith and credit of the United States of America and
maturing within one year from the date of acquisition, (ii) commercial paper
issued by any Person organized under the laws of the United States of America,
maturing within 270 days from the date of acquisition and, at the time of
acquisition, having a rating of at least A-1 or the equivalent thereof by
Standard & Poor's Ratings Services or at least P-1 or the equivalent thereof by
▇▇▇▇▇'▇ Investors Service, Inc., (iii) time deposits and certificates of deposit
maturing within one year from the date of issuance and issued by a bank or trust
company organized under the laws of the United States of America or any state
thereof that has combined capital and surplus of at least $500,000,000 and that
has (or is a subsidiary of a bank holding company that has) a long-term
unsecured debt rating of at least A or the equivalent thereof by Standard &
Poor's Ratings Services or at least A2 or the equivalent thereof by ▇▇▇▇▇'▇
Investors Service, Inc., (iv) repurchase obligations with a term not exceeding
seven (7) days with respect to underlying securities of the types described in
clause (i) above entered into with any bank or trust company meeting the
qualifications specified in clause (iii) above, and (v) money market funds at
least 95% of the assets of which are continuously invested in securities of the
type described in clause (i) above.
"Casualty Event" shall mean, with respect to any property (including any
interest in property) of the Borrower or any of its Subsidiaries, any loss of,
damage to, or condemnation or other taking of, such property for which the
Borrower or such Subsidiary receives insurance proceeds, proceeds of a
condemnation award or other compensation (other than business interruption
insurance proceeds).
"Class" shall have the meaning given to such term in SECTION 2.2(a).
"Closing Date" shall mean the date upon which the initial extensions of credit
are made pursuant to this Agreement.
"Collateral" shall mean all the assets, property and interests in property
that shall from time to time be pledged or be purported to be pledged as direct
or indirect security for the Obligations pursuant to any one or more of the
Security Documents.
"Commission" shall mean the Securities and Exchange Commission and any
successor thereto.
"Commitment" shall mean, with respect to any Lender, such Lender's Term Loan
Commitment and Revolving Credit Commitment.
"Commodity Hedge Agreement" shall mean any option, hedge or other similar
agreement or arrangement designed to protect against fluctuations in commodity
or materials prices.
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"Compliance Certificate" shall mean a fully completed and duly executed
certificate in the form of EXHIBIT J, together with a Covenant Compliance
Worksheet.
"Consolidated Fixed Charges" shall mean, for any period, the aggregate
(without duplication) of the following, all determined on a consolidated basis
for Parent and its Subsidiaries in accordance with Generally Accepted Accounting
Principles for such period: (a) Consolidated Interest Expense for such period,
(b) federal, state, local and other income taxes (but only to the extent
actually paid in cash during such period), (c) Capital Expenditures for such
period, (d) the aggregate (without duplication) of all scheduled payments of
principal on Funded Debt required to have been made by Parent and its
Subsidiaries during such period (whether or not actually made), including,
without limitation, (i) the aggregate principal amount of the Term Loans due
during such period under SECTION 2.6(a) (as such amounts may have been
previously adjusted in accordance with the terms of this Agreement as a result
of prior prepayments on the Term Loans), but excluding any prepayments,
redemptions or acquisitions of Funded Debt made, but not scheduled to be made,
during such period (including the prepayment of the Existing Senior Indebtedness
and the acquisition of the Existing Subordinated Notes pursuant to the
Subordinated Note Offer), and (ii) the aggregate amount of any payments of the
Revolving Loans required as a result of any scheduled reduction in the aggregate
Revolving Credit Commitments during such period under SECTION 2.5(b), and (e)
the aggregate of all amounts actually paid in cash by Parent during such period
as dividends or distributions in respect of its Capital Stock or to purchase,
redeem, retire or otherwise acquire its Capital Stock.
"Consolidated Funded Debt" shall mean, as of any date of determination, the
difference between (i) the aggregate (without duplication) of all Funded Debt of
Parent and its Subsidiaries as of such date, determined on a consolidated basis
in accordance with Generally Accepted Accounting Principles, minus (ii) the
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amount by which the aggregate cash balances and Cash Equivalents of Parent and
its Subsidiaries as of such date, determined on a consolidated basis in
accordance with Generally Accepted Accounting Principles, exceed $5,000,000.
For purposes of determining Consolidated Funded Debt as of any date, each
Contingent Obligation of Parent and its Subsidiaries required to be included in
such determination shall be valued at the maximum aggregate principal amount
(whether or not drawn or outstanding) of the Indebtedness that is the
corresponding "primary obligation" (as such term is defined in the definition of
Contingent Obligation) as of such date.
"Consolidated Interest Expense" shall mean, for any period, the sum (without
duplication) of (i) total interest expense of Parent and its Subsidiaries for
such period in respect of Funded Debt of Parent and its Subsidiaries (including,
without limitation, all such interest expense accrued or capitalized during such
period, whether or not actually paid during such period), determined on a
consolidated basis in accordance with Generally Accepted Accounting Principles
(but excluding pay-in-kind interest, if any, on any Permitted Subordinated
Indebtedness), (ii) all net amounts payable under or in respect of Interest Rate
Protection Agreements, to the extent paid or accrued by Parent and its
Subsidiaries during such period, and (iii) all ongoing commitment fees and other
ongoing fees in respect of Funded Debt (including the Revolving Credit
Commitment Fee and the annual administrative fee payable to the Administrative
Agent under paragraph (2) of the Fee Letter) paid, accrued or capitalized by
Parent and its Subsidiaries during such period.
"Consolidated Net Income" shall mean, for any period, net income (or loss) for
Parent and its Subsidiaries for such period, determined on a consolidated basis
in accordance with Generally Accepted Accounting Principles.
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"Consolidated Operating Cash Flow" shall mean, for any period, the aggregate
of (i) Consolidated Net Income for such period, plus (ii) the sum of
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Consolidated Interest Expense, federal, state, local and other income taxes,
depreciation, amortization of intangible assets, and extraordinary losses and
other noncash expenses or charges reducing income for such period, all to the
extent taken into account in the calculation of Consolidated Net Income for such
period, minus (iii) the sum of extraordinary gains and other noncash credits
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increasing income for such period, all to the extent taken into account in the
calculation of Consolidated Net Income for such period.
"Contingent Obligation" shall mean, with respect to any Person, any direct or
indirect liability of such Person with respect to any Indebtedness, liability or
other obligation (the "primary obligation") of another Person (the "primary
obligor"), whether or not contingent, (a) to purchase, repurchase or otherwise
acquire such primary obligation or any property constituting direct or indirect
security therefor, (b) to advance or provide funds (i) for the payment or
discharge of any such primary obligation or (ii) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency or any balance sheet item, level of income or financial condition of
the primary obligor, (c) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor in respect thereof to make payment of such
primary obligation or (d) otherwise to assure or hold harmless the owner of any
such primary obligation against loss or failure or inability to perform in
respect thereof; provided, however, that, with respect to Parent and its
-------- -------
Subsidiaries, the term Contingent Obligation shall not include endorsements for
collection or deposit in the ordinary course of business.
"Covenant Compliance Worksheet" shall mean a fully completed worksheet in the
form of Attachment A to EXHIBIT J.
"Credit Documents" shall mean this Agreement, the Notes, the Letters of
Credit, the Fee Letter, the Parent Guaranty, the Parent Pledge and Security
Agreement, the Borrower Pledge and Security Agreement, any other Security
Documents, any Subsidiaries Guaranty, any Interest Rate Protection Agreement to
which the Borrower and any Lender are parties and that is permitted hereunder to
be entered into by the Borrower, and all other agreements, instruments,
documents and certificates (other than legal opinions) now or hereafter executed
and delivered to the Administrative Agent or any Lender by or on behalf of any
Credit Party with respect to this Agreement and the transactions contemplated
hereby, in each case as amended, modified, supplemented or restated from time to
time.
"Credit Party" shall mean any of the Borrower, any of its Subsidiaries and
Parent.
"Default" shall mean any event or condition that, with the passage of time or
giving of notice, or both, would constitute an Event of Default.
"Designated Non-Guarantor Subsidiary" shall mean (i) any Foreign Subsidiary,
(ii) ▇▇▇▇▇▇▇▇ Capital Corp., so long as such corporation exists solely as a co-
issuer of the Existing Subordinated Notes or any Permitted Subordinated
Indebtedness and has no assets (other than nominal capitalization) and conducts
no business other than the performance of its obligations with regard thereto,
or any other Person formed for such purpose and satisfying such conditions, or
(iii) any other Subsidiary of the Borrower that is not a Wholly Owned Subsidiary
and that has elected, by written notice to the Administrative Agent given not
less than ten (10) Business Days after the creation or acquisition thereof by
the Borrower or any other Subsidiary, not to become a guarantor under a
Subsidiaries
7
Guaranty and not to grant to the Administrative Agent a Lien upon and security
interest in its personal property assets pursuant to a Subsidiaries Pledge and
Security Agreement.
"Disqualified Capital Stock" means, with respect to any Person, any Capital
Stock of such Person that, by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable), or upon the happening
of any event or otherwise, (i) matures or is mandatorily redeemable or subject
to any mandatory repurchase requirement, pursuant to a sinking fund obligation
or otherwise, (ii) is redeemable or subject to any mandatory repurchase
requirement at the sole option of the holder thereof, or (iii) is convertible
into or exchangeable for (whether at the option of the issuer or the holder
thereof) (a) debt securities or (b) any Capital Stock referred to in (i) or (ii)
above, in each case under (i), (ii) or (iii) above at any time on or prior to
the Term Loan Maturity Date; provided, however, that only the portion of Capital
-------- -------
Stock that so matures or is mandatorily redeemable, is so redeemable at the
option of the holder thereof, or is so convertible or exchangeable on or prior
to such date shall be deemed to be Disqualified Capital Stock.
"Dollars" or "$" shall mean dollars of the United States of America.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute, and all rules and
regulations from time to time promulgated thereunder.
"ERISA Affiliate" shall mean any Person (including any trade or business,
whether or not incorporated) that would be deemed to be under "common control"
with, or a member of the same "controlled group" as, the Borrower or any of its
Subsidiaries, within the meaning of Sections 414(b), (c), (m) or (o) of the
Internal Revenue Code or Section 4001 of ERISA.
"ERISA Event" shall mean any of the following with respect to a Plan or
Multiemployer Plan, as applicable: (i) a Reportable Event with respect to a Plan
or a Multiemployer Plan, (ii) a complete or partial withdrawal by the Borrower
or any ERISA Affiliate from a Multiemployer Plan that results in liability under
Section 4201 or 4204 of ERISA, or the receipt by the Borrower or any ERISA
Affiliate of notice from a Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA or that it intends to
terminate or has terminated under Section 4041A of ERISA, (iii) the distribution
by the Borrower or any ERISA Affiliate under Section 4041 or 4041A of ERISA of a
notice of intent to terminate any Plan or the taking of any action to terminate
any Plan, (iv) the commencement of proceedings by the PBGC under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
Plan, or the receipt by the Borrower or any ERISA Affiliate of a notice from any
Multiemployer Plan that such action has been taken by the PBGC with respect to
such Multiemployer Plan, (v) the institution of a proceeding by any fiduciary of
any Multiemployer Plan against the Borrower or any ERISA Affiliate to enforce
Section 515 of ERISA, which is not dismissed within thirty (30) days, (vi) the
imposition upon the Borrower or any ERISA Affiliate of any liability under Title
IV of ERISA, other than for PBGC premiums due but not delinquent under Section
4007 of ERISA, or the imposition or threatened imposition of any Lien upon any
assets of the Borrower or any ERISA Affiliate as a result of any alleged failure
to comply with the Internal Revenue Code or ERISA in respect of any Plan, (vii)
the engaging in or otherwise becoming liable for a nonexempt Prohibited
Transaction by the Borrower or any ERISA Affiliate, (viii) a violation of the
applicable requirements of Section 404 or 405 of ERISA or the exclusive benefit
rule under Section 401(a) of the Internal Revenue Code by any fiduciary of any
Plan for which the Borrower or any of its ERISA Affiliates may be directly or
indirectly liable or (ix) the adoption of an amendment to any Plan that,
pursuant to Section 401(a)(29) of the Internal Revenue Code or Section
8
307 of ERISA, would result in the loss of tax-exempt status of the trust of
which such Plan is a part if the Borrower or an ERISA Affiliate fails to timely
provide security to such Plan in accordance with the provisions of such
sections.
"Eligible Assignee" shall mean (i) a commercial bank organized under the laws
of the United States or any state thereof and having total assets in excess of
$1,000,000,000, (ii) a commercial bank organized under the laws of any other
country that is a member of the Organization for Economic Cooperation and
Development or any successor thereto (the "OECD") or a political subdivision of
any such country and having total assets in excess of $1,000,000,000, provided
--------
that such bank or other financial institution is acting through a branch or
agency located in the United States, in the country under the laws of which it
is organized or in another country that is also a member of the OECD, (iii) the
central bank of any country that is a member of the OECD, (iv) a finance
company, insurance company or other financial institution or fund that is
engaged in making, purchasing or otherwise investing in loans in the ordinary
course of its business and having total assets in excess of $500,000,000, (v)
any Affiliate of an existing Lender or (vi) any other Person approved by the
Administrative Agent, which approval shall not be unreasonably withheld.
"Environmental Claims" shall mean any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, accusations,
allegations, notices of noncompliance or violation, investigations (other than
internal reports prepared by any Person in the ordinary course of its business
and not in response to any third party action or request of any kind) or
proceedings relating in any way to any actual or alleged violation of or
liability under any Environmental Law or relating to any permit issued, or any
approval given, under any such Environmental Law (collectively, "Claims"),
including, without limitation, (i) any and all Claims by Governmental
Authorities for enforcement, cleanup, removal, response, remedial or other
actions or damages pursuant to any applicable Environmental Law and (ii) any and
all Claims by any third party seeking damages, contribution, indemnification,
cost recovery, compensation or injunctive relief resulting from Hazardous
Substances or arising from alleged injury or threat of injury to human health or
the environment.
"Environmental Laws" shall mean any and all federal, state and local laws,
statutes, ordinances, rules, regulations, permits, licenses, approvals, rules of
common law and orders of courts or Governmental Authorities, relating to the
protection of human health or occupational safety or the environment, now or
hereafter in effect and in each case as amended from time to time, including,
without limitation, requirements pertaining to the manufacture, processing,
distribution, use, treatment, storage, disposal, transportation, handling,
reporting, licensing, permitting, investigation or remediation of Hazardous
Substances.
"Event of Default" shall have the meaning given to such term in SECTION 9.1.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from
time to time, and any successor statute, and all rules and regulations from time
to time promulgated thereunder.
"Existing Lines of Business" shall have the meaning given to such term in
SECTION 8.8(a).
"Existing Senior Credit Agreement" shall mean the Credit Agreement, dated as
of October 6, 1997, among Parent, the Borrower, the banks and other financial
institutions party thereto, CIBC Inc., as Documentation Agent, and First Union,
as Administrative Agent, as amended.
9
"Existing Senior Indebtedness" shall mean all indebtedness, accrued and unpaid
interest, fees and other monetary obligations under the Existing Senior Credit
Agreement and the other Credit Documents (as such term is defined in the
Existing Senior Credit Agreement).
"Existing Subordinated Note Indenture" shall mean the Indenture, dated as of
November 15, 1996, among the Borrower and ▇▇▇▇▇▇▇▇ Capital Corp., as issuers,
the guarantors named therein, and United States Trust Company of New York, as
trustee, providing for the issuance of the Existing Subordinated Notes, as
amended, modified or supplemented through the Closing Date.
"Existing Subordinated Notes" shall mean the 11-1/8% Senior Subordinated Notes
of the Borrower issued pursuant to the Existing Subordinated Note Indenture, as
amended, modified or supplemented through the Closing Date.
"Fair Market Value" shall mean, with respect to any Capital Stock of Parent
given in connection with an Acquisition, the value given to such Capital Stock
for purposes of such Acquisition by the parties thereto, as determined in good
faith pursuant to the relevant acquisition agreement or otherwise in connection
with such Acquisition.
"Federal Funds Rate" shall mean, for any period, a fluctuating per annum
interest rate (rounded upwards, if necessary, to the nearest 1/100 of one
percentage point) equal for each day during such period to the weighted average
of the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by the Administrative Agent.
"Federal Reserve Board" shall mean the Board of Governors of the Federal
Reserve System or any successor thereto.
"Fee Letter" shall mean the letter from the Agents to the Borrower, dated
March 12, 1998, relating to certain fees payable by the Borrower in respect of
the transactions contemplated by this Agreement, as amended, modified or
supplemented from time to time.
"Financial Officer" shall mean, with respect to Parent or the Borrower, as the
context may require, the chief financial officer, vice president - finance,
principal accounting officer or treasurer of Parent or the Borrower, as the case
may be.
"First Union" shall have the meaning given to such term in the preamble
hereto.
"Fixed Charge Coverage Ratio" shall mean, as of the last day of any fiscal
quarter, the ratio of (i) Consolidated Operating Cash Flow for the period of
four consecutive fiscal quarters then ending to (ii) Consolidated Fixed Charges
for such period.
"Foreign Subsidiary" shall mean any Subsidiary of the Borrower that is
organized under the laws of any nation, state or jurisdiction other than the
United States of America or any state thereof.
10
"Funded Debt" shall mean any Indebtedness other than (i) Indebtedness arising
under Interest Rate Protection Agreements or Commodity Hedge Agreements and (ii)
accrued expenses, current trade or other accounts payable (it being understood
that such expenses and accounts payable that are 90 days or more past due
(except to the extent such items are being disputed by the obligor on reasonable
grounds and in good faith) shall be considered to be "Funded Debt") and other
current liabilities arising in the ordinary course of business and not incurred
through the borrowing of money.
"Generally Accepted Accounting Principles" shall mean generally accepted
accounting principles, as set forth in the statements, opinions and
pronouncements of the Accounting Principles Board, the American Institute of
Certified Public Accountants and the Financial Accounting Standards Board (or,
to the extent not so set forth in such statements, opinions and pronouncements,
as generally followed by entities similar in size to Parent and engaged in
generally similar lines of business), consistently applied and maintained and in
conformity with those used in the preparation of the most recent financial
statements of Holdings referred to in SECTION 5.10(a).
"Governmental Authority" shall mean any nation or government, any state or
other political subdivision thereof and any central bank thereof, any municipal,
local, city or county government, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Hazardous Substances" shall mean any substances or materials (i) that are or
become defined as hazardous wastes, hazardous substances, pollutants,
contaminants or toxic substances under any Environmental Law, (ii) that are
defined by any Environmental Law as toxic, explosive, corrosive, ignitable,
infectious, radioactive, mutagenic or otherwise hazardous, (iii) that constitute
a nuisance, trespass or health or safety hazard to Persons or neighboring
properties, or (iv) that contain, without limitation, asbestos, polychlorinated
biphenyls, urea formaldehyde foam insulation, petroleum hydrocarbons, petroleum
derived substances or wastes, crude oil, nuclear fuel, natural gas or synthetic
gas.
"Holdings" shall mean ▇▇▇▇▇▇▇▇ Holdings, L.L.C., a Delaware limited liability
company that was merged with and into the Borrower effective January 28, 1998.
"Indebtedness" shall mean, with respect to any Person (without duplication),
(i) all indebtedness, obligations and liabilities of such Person for borrowed
money or in respect of loans or advances (including, in the case of the
Borrower, pay-in-kind interest, if any, on any Permitted Subordinated
Indebtedness), (ii) all obligations of such Person evidenced by notes, bonds,
debentures or similar instruments, (iii) all reimbursement obligations of such
Person with respect to surety bonds, letters of credit and bankers' acceptances
(in each case, whether or not drawn or matured and in the stated amount
thereof), (iv) all obligations of such Person to pay the deferred purchase price
of property or services, (v) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person, (vi) all obligations of such Person as lessee under
leases that are or are required to be, in accordance with Generally Accepted
Accounting Principles, recorded as capital leases, to the extent such
obligations are required to be so recorded, (vii) all Disqualified Capital Stock
issued by such Person with the amount of Indebtedness represented by such
Disqualified Capital Stock being equal to the greater of its voluntary or
involuntary liquidation preference and its maximum fixed repurchase price, but
excluding accrued dividends, if any (for purposes hereof, the "maximum fixed
repurchase price" of any Disqualified Capital Stock which does not have a fixed
repurchase price shall be calculated in accordance with the
11
terms of such Disqualified Capital Stock as if such Disqualified Capital Stock
were purchased on any date on which Indebtedness shall be required to be
determined pursuant to this Agreement, and if such price is based upon, or
measured by, the fair market value of such Disqualified Capital Stock, such fair
market value to be determined reasonably and in good faith by the board of
directors or other governing body of the issuer of such Disqualified Capital
Stock), (viii) the net termination obligations of such Person under any Interest
Rate Protection Agreements or Commodity Hedge Agreements, calculated as of any
date as if such agreement or arrangement were terminated as of such date, (ix)
all Contingent Obligations of such Person and (x) all indebtedness referred to
in clauses (i) through (ix) above secured by any Lien on any property or asset
owned or held by such Person regardless of whether the indebtedness secured
thereby shall have been assumed by such Person or is nonrecourse to the credit
of such Person. For all purposes of this Agreement, Indebtedness of Parent or
any of its Subsidiaries shall not include any unearned subscription revenues.
"Interest Coverage Ratio" shall mean, as of the last day of any fiscal
quarter, the ratio of (i) Consolidated Operating Cash Flow for the period of
four consecutive fiscal quarters then ending to (ii) Consolidated Interest
Expense for such period.
"Interest Period" shall have the meaning given to such term in SECTION 2.10.
"Interest Rate Protection Agreement" shall mean any interest or foreign
currency rate swap, cap, collar, option, hedge, forward rate or other similar
agreement or arrangement designed to protect against fluctuations in interest
rates or currency exchange rates.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and any successor statute, and all rules and
regulations from time to time promulgated thereunder.
"Issuing Lender" shall mean First Union in its capacity as issuer of the
Letters of Credit, and its successors in such capacity.
"LIBOR Loan" shall mean, at any time, any Loan that bears interest at such
time at the Adjusted LIBOR Rate.
"LIBOR Rate" shall mean, with respect to each LIBOR Loan comprising part of
the same Borrowing for any Interest Period, an interest rate per annum obtained
by dividing (i) (y) the rate of interest appearing on Telerate Page 3750 (or any
successor page) or (z) if no such rate is available, or at the option of the
Administrative Agent in any event, the rate of interest determined by the
Administrative Agent to be the rate or the arithmetic mean of rates (rounded
upward, if necessary, to the nearest 1/16 of one percentage point) at which
Dollar deposits in immediately available funds are offered by First Union to
first-tier banks in the London interbank Eurodollar market, in each case under
(y) and (z) above at approximately 11:00 a.m., London time, two (2) Business
Days prior to the first day of such Interest Period for a period substantially
equal to such Interest Period and in an amount substantially equal to the amount
of First Union's LIBOR Loan comprising part of such Borrowing, by (ii) the
amount equal to 1.00 minus the Reserve Requirement (expressed as a decimal) for
such Interest Period.
"Lender" shall mean each financial institution signatory hereto and each other
financial institution that becomes a "Lender" hereunder pursuant to SECTION
11.7, and their respective successors and assigns.
12
"Lending Office" shall mean, with respect to any Lender, the office of such
Lender designated as its "Lending Office" on its signature page hereto or in an
Assignment and Acceptance, or such other office as may be otherwise designated
in writing from time to time by such Lender to the Borrower and the
Administrative Agent. A Lender may designate separate Lending Offices as
provided in the foregoing sentence for the purposes of making or maintaining
different Types of Loans, and, with respect to LIBOR Loans, such office may be a
domestic or foreign branch or Affiliate of such Lender.
"Letter of Credit Exposure" shall mean, with respect to any Lender at any
time, such Lender's ratable share (based on the proportion that its Revolving
Credit Commitment bears to the aggregate Revolving Credit Commitments at such
time) of the sum of (i) the aggregate Stated Amount of all Letters of Credit
outstanding at such time and (ii) the aggregate amount of all Reimbursement
Obligations outstanding at such time.
"Letter of Credit Notice" shall have the meaning given to such term in SECTION
3.3.
"Letters of Credit" shall have the meaning given to such term in SECTION 3.1.
"Leverage Ratio" shall mean, as of the last day of any fiscal quarter, the
ratio of (i) Consolidated Funded Debt as of such date to (ii) Consolidated
Operating Cash Flow for the period of four consecutive fiscal quarters then
ending.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment, security
interest, lien (statutory or otherwise), preference, priority, charge or other
encumbrance of any nature, whether voluntary or involuntary, including, without
limitation, the interest of any vendor or lessor under any conditional sale
agreement, title retention agreement, capital lease or any other lease or
arrangement having substantially the same effect as any of the foregoing.
"Loans" shall mean any or all of the Term Loans, the Revolving Loans and the
Swingline Loans.
"Margin Stock" shall have the meaning given to such term in Regulation U.
"Material Adverse Change" shall mean a material adverse change in the
condition (financial or otherwise), operations, business, properties or assets
of Parent and its Subsidiaries taken as a whole.
"Material Adverse Effect" shall mean a material adverse effect upon (A) the
condition (financial or otherwise), operations, business, properties or assets
of Parent and its Subsidiaries taken as a whole, (B) to the extent not covered
under clause (A) above, the ability of any Credit Party to consummate the
transactions contemplated hereby or perform its obligations under this Agreement
or any of the other Credit Documents to which it is a party or (C) the legality,
validity or enforceability of this Agreement or any of the other Credit
Documents or the rights and remedies of the Administrative Agent and the Lenders
hereunder and thereunder.
"Multiemployer Plan" shall mean any "multiemployer plan" within the meaning of
Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate makes,
is making or is obligated to make contributions or has made or been obligated to
make contributions.
13
"Net Cash Proceeds" shall mean (i) in the case of any Casualty Event, the
aggregate cash proceeds of insurance, condemnation awards and other compensation
received by the Borrower and its Subsidiaries in respect of such Casualty Event
less (y) reasonable fees and expenses incurred by the Borrower and its
Subsidiaries in connection therewith and (z) contractually required repayments
of Indebtedness to the extent secured by Liens on the property subject to such
Casualty Event and any income or transfer taxes paid or reasonably estimated by
the Borrower to be payable by Parent and its Subsidiaries as a result of such
Casualty Event, and (ii) in the case of any Asset Disposition, the aggregate
amount of all cash payments received by Parent and its Subsidiaries in
connection with such Asset Disposition less (x) reasonable fees and expenses
incurred by Parent, the Borrower and their Subsidiaries in connection therewith,
(y) Indebtedness to the extent the amount thereof is secured by a Lien on the
property that is the subject of such Asset Disposition and the transferee of (or
holder of the Lien on) such Property requires that such Indebtedness be repaid
as a condition to such Asset Disposition, and (z) any income or transfer taxes
paid or reasonably estimated by the Borrower to be payable by Parent, the
Borrower and their Subsidiaries as a result of such Asset Disposition.
"Notes" shall mean any or all of the Term Notes, the Revolving Credit Notes
and the Swingline Note.
"Notice of Borrowing" shall have the meaning given to such term in SECTION
2.2(b).
"Notice of Conversion/Continuation" shall have the meaning given to such
term in SECTION 2.11(b).
"Notice of Prepayment" shall have the meaning given to such term in SECTION
2.7(a).
"Notice of Swingline Borrowing" shall have the meaning given to such term
in SECTION 2.2(d).
"Obligations" shall mean all principal of and interest (including, to the
greatest extent permitted by law, post-petition interest) on the Loans, all
Reimbursement Obligations and all fees, expenses, indemnities and other
obligations owing, due or payable at any time by the Borrower to the
Administrative Agent, any Lender, the Issuing Lender or any other Person
entitled thereto, under this Agreement or any of the other Credit Documents.
"Outstanding Letter of Credit" shall mean that certain irrevocable letter
of credit no. S111300, dated January 21, 1997, as renewed, previously issued by
First Union for the account of the Borrower in favor of Goldmick, LLC and ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇. and treated pursuant to SECTION 3.2 as having originally been
issued under this Agreement.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
successor thereto.
"PIC" shall mean ▇▇▇▇▇▇▇▇ Investment Corp., a Delaware corporation that was
merged with and into Parent effective January 28, 1998.
"Parent" shall have the meaning given to such term in the preamble hereof.
"Parent Guaranty" shall mean a guaranty agreement made by Parent in
substantially the form of EXHIBIT F, as amended, modified or supplemented from
time to time.
14
"Parent Pledge and Security Agreement" shall mean a pledge agreement made
by Parent in favor of the Administrative Agent, in substantially the form of
EXHIBIT H, as amended, modified or supplemented from time to time.
"Participant" shall have the meaning given to such term in SECTION 11.7(d).
"Permitted Acquisition" shall mean (a) any Acquisition made by the Borrower or
any of its Subsidiaries with respect to which all of the following conditions
are satisfied: (i) each business acquired shall be within the Existing Lines of
Business or (subject to the limitation set forth in SECTION 6.8(a) shall be a
Permitted New Media Business , (ii) any Capital Stock given as consideration in
connection therewith shall be Capital Stock of Parent, (iii) in the case of an
Acquisition involving the acquisition of control of Capital Stock of any Person,
immediately after giving effect to such Acquisition such Person (or the
surviving Person, if the Acquisition is effected through a merger or
consolidation) shall be the Borrower or a Subsidiary Guarantor (provided that
--------
such Person (or the surviving Person) may be a Designated Non-Guarantor
Subsidiary, but only so long as after giving effect to such Acquisition the
Borrower is in compliance with the applicable provisions of SECTION 8.5), and
(iv) all of the conditions and requirements of SECTIONS 6.8 and 6.9 applicable
to such Acquisition are satisfied; or (b) any other Acquisition to which the
Required Lenders (or the Administrative Agent on their behalf) have given their
prior written consent (which consent may be in their sole discretion and may be
given subject to such additional terms and conditions as the Required Lenders
shall establish) and with respect to which all of the conditions and
requirements set forth in this definition and in SECTION 6.8, and in or pursuant
to any such consent, have been satisfied or waived in writing by the Required
Lenders (or the Administrative Agent on their behalf).
"Permitted Holders" shall mean, collectively, ▇▇▇▇ ▇▇▇▇▇▇ and each Person who
purchased Capital Stock of Holdings, Parent or PIC pursuant to the Securities
Purchase Agreement as of the date thereof.
"Permitted Liens" shall have the meaning given to such term in SECTION 8.3.
"Permitted New Media Business" shall have the meaning given to such term in
SECTION 8.8(a).
"Permitted Subordinated Indebtedness" shall have the meaning given to such
term in SECTION 8.2.
"Person" shall mean any corporation, association, joint venture, partnership,
limited liability company, organization, business, individual, trust, government
or agency or political subdivision thereof or any other legal entity.
"▇▇▇▇▇▇▇▇ License Agreement" shall mean the License Agreement, dated as of
August 15, 1996, between ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Publishing Company, as
licensor, and Parent, as licensee, as amended, modified or supplemented from
time to time in accordance with the terms of this Agreement.
"Plan" shall mean any "employee pension benefit plan" within the meaning of
Section 3(2) of ERISA that is subject to the provisions of Title IV of ERISA
(other than a Multiemployer Plan) and to which the Borrower or any ERISA
Affiliate may have any liability.
15
"Predecessor" shall mean the historical operations of the publishing division
of ▇▇▇▇▇▇▇▇ Publishing Company prior to the acquisition thereof by the Borrower.
"Prohibited Transaction" shall mean any transaction described in (i) Section
406 of ERISA that is not exempt by reason of Section 408 of ERISA or by reason
of a Department of Labor prohibited transaction individual or class exemption or
(ii) Section 4975(c) of the Internal Revenue Code that is not exempt by reason
of Section 4975(c)(2) or 4975(d) of the Internal Revenue Code.
"Projections" shall have the meaning given to such term in SECTION 5.10(b).
"Qualified Capital Stock" means any Capital Stock that is not Disqualified
Capital Stock.
"Refunded Swingline Loans" shall have the meaning given to such term in
SECTION 2.2(e).
"Register" shall have the meaning given to such term in SECTION 11.7(b).
"Regulations D, G, T, U and X" shall mean Regulations D, G, T, U and X,
respectively, of the Federal Reserve Board, and any successor regulations.
"Reimbursement Obligation" shall have the meaning given to such term in
SECTION 3.5.
"Reportable Event" shall mean (i) any "reportable event" within the meaning of
Section 4043(c) of ERISA for which the 30-day notice under Section 4043(a) of
ERISA has not been waived by the PBGC (including any failure to meet the minimum
funding standard of, or timely make any required installment under, Section 412
of the Internal Revenue Code or Section 302 of ERISA, regardless of the issuance
of any waivers in accordance with Section 412(d) of the Internal Revenue Code),
(ii) any such "reportable event" subject to advance notice to the PBGC under
Section 4043(b)(3) of ERISA, (iii) any application for a funding waiver or an
extension of any amortization period pursuant to Section 412 of the Internal
Revenue Code, and (iv) a cessation of operations described in Section 4062(e) of
ERISA.
"Required Lenders" shall mean (i) at any time prior to the termination of the
Commitments, the Lenders holding outstanding Term Loans and Revolving Credit
Commitments representing at least a majority of the aggregate at such time of
all outstanding Term Loans and Revolving Credit Commitments, and (ii) at any
time after the termination of the Commitments, the Lenders holding outstanding
Term Loans, Revolving Loans, Letter of Credit Exposure and participations in
Swingline Loans representing at least a majority of the aggregate at such time
of all outstanding Term Loans, Revolving Loans, Letter of Credit Exposure and
participations in Swingline Loans.
"Requirement of Law" shall mean, with respect to any Person, the charter,
articles or certificate of organization or incorporation and bylaws or other
organizational or governing documents of such Person, and any statute, law,
treaty, rule, regulation, order, decree, writ, injunction or determination of
any arbitrator or court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject or otherwise pertaining to any or all of the
transactions contemplated by this Agreement and the other Credit Documents.
"Reserve Requirement" shall mean, with respect to any Interest Period, the
reserve percentage (expressed as a decimal) in effect from time to time during
such Interest Period, as provided by the
16
Federal Reserve Board, applied for determining the maximum reserve requirements
(including, without limitation, basic, supplemental, marginal and emergency
reserves) applicable to First Union under Regulation D with respect to
"Eurocurrency liabilities" within the meaning of Regulation D, or under any
similar or successor regulation with respect to Eurocurrency liabilities or
Eurocurrency funding.
"Responsible Officer" shall mean, with respect to Parent or the Borrower, as
the context may require, the president, the chief executive officer, the chief
financial officer, any executive officer, or any other Financial Officer of
Parent or the Borrower, as the case may be, and any other officer or similar
official thereof responsible for the administration of the obligations of Parent
or the Borrower, as applicable, in respect of this Agreement.
"Revolving Credit Commitment" shall mean, with respect to any Lender at any
time, the amount set forth opposite such Lender's name on SCHEDULE 1.1 hereto
under the caption "Revolving Credit Commitment" or, if such Lender has entered
into one or more Assignment and Acceptances, the amount set forth for such
Lender at such time in the Register maintained by the Administrative Agent
pursuant to SECTION 11.7(b) as such Lender's "Revolving Credit Commitment," as
such amount may be reduced at or prior to such time pursuant to the terms
hereof.
"Revolving Credit Commitment Fee" shall have the meaning given to such term in
SECTION 2.9(b).
"Revolving Credit Lender" shall mean any Lender having a Revolving Credit
Commitment and/or holding outstanding Revolving Loans.
"Revolving Credit Maturity Date" shall mean March 31, 2005.
"Revolving Credit Notes" shall mean the promissory notes of the Borrower in
substantially the form of EXHIBIT B-2, together with any amendments,
modifications and supplements thereto, substitutions therefor and restatements
thereof.
"Revolving Credit Termination Date" shall mean the Revolving Credit Maturity
Date or such earlier date of termination of the Revolving Credit Commitments
pursuant to SECTION 2.5 or SECTION 9.2.
"Revolving Loans" shall have the meaning given to such term in SECTION 2.1(b).
"Scheduled Titles" shall have the meaning given to such term in SECTION 8.4.
"Securities Act" shall mean the Securities Act of 1933, as amended from time
to time, and any successor statute, and all rules and regulations from time to
time promulgated thereunder.
"Securities Purchase Agreement" shall mean the Securities Purchase Agreement,
dated as of September 30, 1996, among Holdings, PIC, Parent and the Persons
listed on Schedule A thereto, providing for the purchase and sale of Capital
Stock of Holdings, Parent and PIC, as amended, modified or supplemented from
time to time.
"Security Documents" shall mean the Borrower Pledge and Security Agreement,
the Parent Pledge and Security Agreement, any Subsidiaries Pledge and Security
Agreement and all other pledge or security agreements, mortgages, assignments or
other similar agreements or instruments executed
17
and delivered by any Credit Party pursuant to SECTION 6.9 or SECTION 6.10 or
otherwise in connection with the transactions contemplated hereby, in each case
as amended, modified or supplemented from time to time.
"Securityholders Agreement" shall mean the Securityholders Agreement, dated as
of September 30, 1996, among PIC, Holdings, Parent and the securityholders named
therein, as amended, modified or supplemented from time to time.
"Stated Amount" shall mean, with respect to any Letter of Credit at any time,
the aggregate amount available to be drawn thereunder at such time (regardless
of whether any conditions for drawing could then be met).
"Subordinated Note Offer" shall mean the offer by the Borrower and ▇▇▇▇▇▇▇▇
Capital Corp. to purchase for cash all of the outstanding Existing Subordinated
Notes and solicitation from the holders of the Existing Subordinated Notes of
consents to certain amendments to the Existing Subordinated Note Indenture, made
pursuant to the Offer to Purchase and Consent Solicitation Statement dated
February 26, 1998, as such offer may be amended, modified or extended from time
to time on terms and conditions reasonably satisfactory to the Agents.
"Subsidiaries Guaranty" shall mean any agreement or instrument, in form and
substance satisfactory to the Administrative Agent and the Required Lenders (and
in any event in substantially the form of the Parent Guaranty, with appropriate
modifications), entered into pursuant to SECTION 6.9 and pursuant to which any
one or more of the Subsidiaries of the Borrower shall guarantee to the
Administrative Agent and the Lenders the payment in full of the Obligations, as
the same may be amended, modified or supplemented from time to time.
"Subsidiaries Pledge and Security Agreement" shall mean any agreement or
instrument, in form and substance satisfactory to the Administrative Agent and
the Required Lenders (and in any event in substantially the form of the Borrower
Pledge and Security Agreement, with appropriate modifications), entered into
pursuant to SECTION 6.9 and pursuant to which any one or more of the
Subsidiaries of the Borrower shall grant to the Administrative Agent a Lien upon
and security interest in its personal property assets as security for its
obligations under a Subsidiaries Guaranty, as the same may be amended, modified
or supplemented from time to time.
"Subsidiary" shall mean, with respect to any Person, any corporation or other
Person of which more than fifty percent (50%) of the outstanding Capital Stock
having ordinary voting power to elect a majority of the board of directors,
board of managers or other governing body of such Person, is at the time,
directly or indirectly, owned or controlled by such Person and one or more of
its other Subsidiaries or a combination thereof (irrespective of whether, at the
time, securities of any other class or classes of any such corporation or other
Person shall or might have voting power by reason of the happening of any
contingency). When used without reference to a parent entity, the term
"Subsidiary" shall be deemed to refer to a Subsidiary of Parent.
"Subsidiary Guarantor" shall mean any Subsidiary of the Borrower that is a
guarantor under a Subsidiaries Guaranty and has granted to the Administrative
Agent a Lien upon and security interest in its personal property assets pursuant
to a Subsidiaries Pledge and Security Agreement.
18
"Swingline Commitment" shall mean $10,000,000 or, if less, the aggregate
Revolving Credit Commitments at the time of determination, as such amount may be
reduced at or prior to such time pursuant to the terms hereof.
"Swingline Lender" shall mean First Union in its capacity as maker of
Swingline Loans, and its successors in such capacity.
"Swingline Loans" shall have the meaning given to such term in SECTION 2.1(c).
"Swingline Maturity Date" shall mean the date that is five (5) Business Days
prior to the Revolving Credit Maturity Date.
"Swingline Note" shall mean the promissory note of the Borrower in
substantially the form of EXHIBIT B-3, together with any amendments,
modifications and supplements thereto, substitutions therefor and restatements
thereof.
"Syndication Completion Date" shall have the meaning given to such term in
SECTION 2.2(a).
"Term Loan Commitment" shall mean, with respect to any Lender at any time, the
amount set forth opposite such Lender's name on SCHEDULE 1.1 hereto under the
caption "Term Loan Commitment" or, if such Lender has entered into one or more
Assignment and Acceptances, the amount set forth for such Lender at such time in
the Register maintained by the Administrative Agent pursuant to SECTION 11.7(b)
as such Lender's "Term Loan Commitment," as such amount may be reduced at or
prior to such time pursuant to the terms hereof.
"Term Loan Lender" shall mean any Lender having a Term Loan Commitment and/or
holding outstanding Term Loans.
"Term Loan Maturity Date" shall mean March 31, 2007.
"Term Loans" shall have the meaning given to such term in SECTION 2.1(a).
"Term Notes" shall mean the promissory notes of the Borrower in substantially
the form of EXHIBIT B-1, together with any amendments, modifications and
supplements thereto, substitutions therefor and restatements thereof.
"Transactions" shall mean, collectively, (i) the consummation of the
Subordinated Note Offer, and (ii) the transactions contemplated by this
Agreement and the other Credit Documents, including the initial extensions of
credit hereunder on the Closing Date and the repayment in full of the Existing
Senior Indebtedness.
"Type" shall have the meaning given to such term in SECTION 2.2(a).
"Unfunded Pension Liability" shall mean, with respect to any Plan or
Multiemployer Plan, the excess of its benefit liabilities under Section
4001(a)(16) of ERISA over the current value of its assets, determined in
accordance with the applicable assumptions used for funding under Section 412 of
the Code for the applicable plan year.
19
"Unutilized Revolving Credit Commitment" shall mean, with respect to any
Revolving Credit Lender at any time, such Lender's Revolving Credit Commitment
at such time less the sum of (i) the aggregate principal amount of all Revolving
----
Loans made by such Lender that are outstanding at such time and (ii) such
Lender's Letter of Credit Exposure at such time.
"Unutilized Swingline Commitment" shall mean, with respect to the Swingline
Lender at any time, the Swingline Commitment at such time less the aggregate
----
principal amount of all Swingline Loans that are outstanding at such time.
"Wholly Owned" shall mean, with respect to any Subsidiary of any Person, that
100% of the outstanding Capital Stock of such Subsidiary (excluding directors'
qualifying shares and shares required to be held by foreign nationals, in the
case of a Foreign Subsidiary) is owned, directly or indirectly, by such Person.
"▇▇▇▇▇▇ ▇▇▇▇▇" shall mean ▇▇▇▇▇▇ ▇▇▇▇▇ & Partners, L.P., a Delaware limited
partnership.
1.2 Accounting Terms. Except as specifically provided otherwise in this
----------------
Agreement, all accounting terms used herein that are not specifically defined
shall have the meanings customarily given them, and all financial computations
hereunder shall be made, in accordance with Generally Accepted Accounting
Principles. Notwithstanding the foregoing, in the event that any changes in
Generally Accepted Accounting Principles after the date hereof are required to
be applied to Parent and would affect the computation of the financial covenants
contained in SECTIONS 7.1 through 7.3, as applicable, such changes shall be
followed only from and after the date this Agreement shall have been amended to
take into account any such changes. Notwithstanding anything to the contrary
contained herein, all computations of the financial covenants contained in
SECTIONS 7.1 through 7.3 with respect to any period ending on or before December
31, 1997 shall be made with reference to, and all associated financial terms
defined herein shall, with respect to any such period, be deemed to refer to,
the consolidated financial statements of Holdings and its Subsidiaries for such
period.
1.3 Designated Non-Guarantor Subsidiaries. Notwithstanding anything to the
-------------------------------------
contrary contained in this Agreement, the assets, liabilities, revenues, income,
losses and other financial statement items of Designated Non-Guarantor
Subsidiaries shall not be taken into account in the calculation of the financial
covenants set forth in SECTIONS 7.1 through 7.3.
1.4 Other Terms; Construction. Unless otherwise specified or unless the
-------------------------
context otherwise requires, all references herein to sections, annexes,
schedules and exhibits are references to sections, annexes, schedules and
exhibits in and to this Agreement, and all terms defined in this Agreement shall
have the defined meanings when used in any other Credit Document or any
certificate or other document made or delivered pursuant hereto. All references
herein to the Lenders or any of them shall be deemed to include the Issuing
Lender unless specifically provided otherwise or unless the context otherwise
requires. As used in this Agreement or in any other Credit Document, the term
"including" means "including, without limitation."
1.5 Officers, Directors of Limited Liability Companies. References herein to
--------------------------------------------------
officers or directors of any limited liability company shall refer to persons
who are authorized under the articles of organization and operating agreement of
such company to perform the duties and exercise the powers normally associated
with officers and directors, as the case may be, of corporations.
20
ARTICLE II
AMOUNT AND TERMS OF THE LOANS
2.1 Commitments; Loan. (a) Each Term Loan Lender severally agrees, subject
-----------------
to and on the terms and conditions of this Agreement, to make a loan (each, a
"Term Loan," and collectively, the "Term Loans") to the Borrower on the Closing
Date in a principal amount equal to its Term Loan Commitment. No Term Loans
shall be made at any time after the Closing Date. To the extent repaid, Term
Loans may not be reborrowed.
(b) Each Revolving Credit Lender severally agrees, subject to and on the
terms and conditions of this Agreement, to make revolving credit loans (each, a
"Revolving Loan," and collectively, the "Revolving Loans") to the Borrower, from
time to time on any Business Day during the period from and including the
Closing Date to but not including the Revolving Credit Termination Date, in an
aggregate principal amount at any time outstanding not greater than the excess,
if any, of its Revolving Credit Commitment at such time over its Letter of
Credit Exposure at such time, provided that no Borrowing of Revolving Loans
--------
shall be made if, immediately after giving effect thereto, the sum of (x) the
aggregate principal amount of Revolving Loans outstanding at such time, (y) the
aggregate Letter of Credit Exposure of all Revolving Credit Lenders at such time
and (z) the aggregate principal amount of Swingline Loans outstanding at such
time (excluding the aggregate amount of any Swingline Loans to be repaid with
proceeds of Revolving Loans made pursuant to such Borrowing) would exceed the
aggregate Revolving Credit Commitments at such time. Subject to and on the terms
and conditions of this Agreement, the Borrower may borrow, repay and reborrow
Revolving Loans.
(c) The Swingline Lender agrees, subject to and on the terms and
conditions of this Agreement, to make loans (each, a "Swingline Loan," and
collectively, the "Swingline Loans") to the Borrower, from time to time on any
Business Day during the period from the Closing Date to but not including the
Swingline Maturity Date (or, if earlier, the Revolving Credit Termination Date),
in an aggregate principal amount not exceeding the Swingline Commitment,
notwithstanding that the aggregate principal amount of Swingline Loans
outstanding at any time, when added to the aggregate principal amount of the
Revolving Loans made by the Swingline Lender in its capacity as a Lender
outstanding at such time and its Letter of Credit Exposure at such time, may
exceed its Revolving Credit Commitment at such time, but provided that no
--------
Borrowing of Swingline Loans shall be made if,after giving effect thereto, the
sum of (x) the aggregate principal amount of Revolving Loans outstanding at such
time, (y) the aggregate Letter of Credit Exposure of all Revolving Credit
Lenders at such time and (z) the aggregate principal amount of Swingline Loans
outstanding at such time would exceed the aggregate Revolving Credit Commitments
at such time. Subject to and on the terms and conditions of this Agreement, the
Borrower may borrow, repay (including by means of a Borrowing of Revolving Loans
pursuant to SECTION 2.2(e) and reborrow Swingline Loans.
2.2 Borrowings. (a) The Term Loans and the Revolving Loans (each, together
----------
with the Swingline Loans, a "Class" of Loans) shall, at the option of the
Borrower and subject to the terms and conditions of this Agreement, be either
ABR Loans or LIBOR Loans (each, a "Type" of Loan), provided that (i) all Loans
--------
comprising the Borrowing shall, unless otherwise specifically provided herein,
be of the same Type, (ii) notwithstanding any other provision of this Agreement,
the Term Loans and any Revolving Loans made on the Closing Date shall be made
initially as ABR Loans, and (iii) notwithstanding any other provision of this
Agreement, no LIBOR Loans having an interest period of longer than one month may
be borrowed at any time prior to the earlier of the 60th day after the
21
Closing Date and the date upon which the Administrative Agent determines in its
sole discretion, and notifies the Borrower, that the primary syndication of the
credit facilities provided for hereunder has been completed (the earlier of such
dates, the "Syndication Completion Date"). The Swingline Loans shall be made and
maintained as ABR Loans at all times.
(b) In order to make a Borrowing (other than (w) the Borrowing of the Term
Loans on the Closing Date, which the Borrower hereby requests), (x) Borrowings
of Swingline Loans, which shall be made pursuant to SECTION 2.2(d), (y)
Borrowings for the purpose of repaying Refunded Swingline Loans, which shall be
made pursuant to SECTION 2.2(e), and (z) Borrowings involving continuations or
conversions of outstanding Revolving Loans, which shall be made pursuant to
SECTION 2.11), the Borrower will give the Administrative Agent written notice
(or oral notice promptly confirmed in writing) not later than 1:00 p.m.,
Charlotte time, three (3) Business Days prior to each such Borrowing to be
comprised of LIBOR Loans and one (1) Business Day prior to each such Borrowing
to be comprised of ABR Loans; provided, however, that at the discretion of the
-------- -------
Administrative Agent, a request for a Borrowing of any Revolving Loans to be
made on the Closing Date may be given later than the times specified
hereinabove. Each such notice (each, a "Notice of Borrowing") shall be
irrevocable, shall be given in the form of EXHIBIT A-1 (or, if oral notice is
given, shall be promptly followed with a writing in the form of EXHIBIT A-1) and
shall specify (x) the aggregate principal amount and initial Type of the
Revolving Loans to be made pursuant to such Borrowing, (y) in the case of a
Borrowing of LIBOR Loans, the initial Interest Period to be applicable thereto,
and (z) the requested Borrowing Date, which shall be a Business Day. Upon its
receipt of a Notice of Borrowing, the Administrative Agent will promptly notify
each Revolving Credit Lender of the proposed Borrowing. Notwithstanding anything
to the contrary contained herein:
(i) the aggregate principal amount of the Borrowing of Term Loans
shall be in the amount of the aggregate Term Loan Commitments;
(ii) the aggregate principal amount of each Borrowing of Revolving
Loans that is comprised of ABR Loans shall not be less than $3,000,000 or,
if greater, an integral multiple of $1,000,000 in excess thereof (or, if
less, in the amount of the aggregate Unutilized Revolving Credit
Commitments), and the aggregate principal amount of each Borrowing of
Revolving Loans that is comprised of LIBOR Loans shall not be less than
$5,000,000 or, if greater, an integral multiple of $1,000,000 in excess
thereof;
(iii) if the Borrower shall have failed to designate the Type of
Loans comprising a Borrowing, the Borrower shall be deemed to have
requested a Borrowing comprised of ABR Loans; and
(iv) if the Borrower shall have failed to select the duration of
the Interest Period to be applicable to any Borrowing of LIBOR Loans, then
the Borrower shall be deemed to have selected an Interest Period with a
duration of one month.
(c) Not later than 1:00 p.m., Charlotte time, on the requested Borrowing
Date (which shall be the Closing Date, in the case of the Term Loans), each
Lender will make available to the Administrative Agent at its office referred to
in SECTION 11.5 (or at such other location as the Administrative Agent may
designate) an amount, in Dollars and in immediately available funds, equal to
the amount of the Loan or Loans to be made by such Lender. To the extent the
relevant Lenders have made such amounts available to the Administrative Agent as
provided hereinabove, the
22
Administrative Agent will make the aggregate of such amounts available to the
Borrower in accordance with SECTION 2.3(a) and in like funds as received by the
Administrative Agent.
(d) In order to make a Borrowing of a Swingline Loan, the Borrower will
give the Administrative Agent and the Swingline Lender written notice (or oral
notice promptly confirmed in writing) not later than 1:00 p.m., Charlotte time,
on the Business Day of such Borrowing. Each such notice (each, a "Notice of
Swingline Borrowing") shall be irrevocable, shall be given in the form of
EXHIBIT A-2 (or, if oral notice is given, shall be promptly followed with a
writing in the form of EXHIBIT A-2) and shall specify (i) the principal amount
of the Swingline Loan to be made pursuant to such Borrowing (which shall not be
less than $500,000 and, if greater, shall be in an integral multiple of $250,000
in excess thereof (or, if less, in the amount of the Unutilized Swingline
Commitment)) and (ii) the requested Borrowing Date, which shall be a Business
Day. Not later than 3:00 p.m., Charlotte time, on the requested Borrowing Date,
the Swingline Lender will make available to the Administrative Agent at its
office referred to in SECTION 11.5 (or at such other location as the
Administrative Agent may designate) an amount, in Dollars and in immediately
available funds, equal to the amount of the requested Swingline Loan. To the
extent the Swingline Lender has made such amount available to the Administrative
Agent as provided hereinabove, the Administrative Agent will make such amount
available to the Borrower in accordance with SECTION 2.3(a) and in like funds as
received by the Administrative Agent.
(e) With respect to any outstanding Swingline Loans, the Swingline Lender
may at any time (whether or not an Event of Default has occurred and is
continuing) in its sole and absolute discretion, and is hereby authorized and
empowered by the Borrower to, cause a Borrowing of Revolving Loans to be made
for the purpose of repaying such Swingline Loans by delivering to the
Administrative Agent (if the Administrative Agent is different from the
Swingline Lender) and each other Revolving Credit Lender (on behalf of, and with
a copy to, the Borrower), not later than 1:00 p.m., Charlotte time, one (1)
Business Day prior to the proposed Borrowing Date therefor, a notice (which
shall be deemed to be a Notice of Borrowing given by the Borrower) requesting
the Revolving Credit Lenders to make Revolving Loans (which shall be made
initially as ABR Loans) on such Borrowing Date in an aggregate amount equal to
the amount of such Swingline Loans (the "Refunded Swingline Loans") outstanding
on the date such notice is given that the Swingline Lender requests to be
repaid. Not later than 1:00 p.m., Charlotte time, on the requested Borrowing
Date, each Revolving Credit Lender (other than the Swingline Lender) will make
available to the Administrative Agent at its office referred to in SECTION 11.5
(or at such other location as the Administrative Agent may designate) an amount,
in Dollars and in immediately available funds, equal to the amount of the
Revolving Loan to be made by such Lender. To the extent the Revolving Credit
Lenders have made such amounts available to the Administrative Agent as provided
hereinabove, the Administrative Agent will make the aggregate of such amounts
available to the Swingline Lender in like funds as received by the
Administrative Agent, which shall apply such amounts in repayment of the
Refunded Swingline Loans. Notwithstanding any provision of this Agreement to the
contrary, on the relevant Borrowing Date, the Refunded Swingline Loans
(including the Swingline Lender's ratable share thereof, in its capacity as a
Revolving Credit Lender) shall be deemed to be repaid with the proceeds of the
Revolving Loans made as provided above (including a Revolving Loan deemed to
have been made by the Swingline Lender), and such Refunded Swingline Loans
deemed to be so repaid shall no longer be outstanding as Swingline Loans but
shall be outstanding as Revolving Loans. If any portion of any such amount
repaid (or deemed to be repaid) to the Swingline Lender shall be recovered by or
on behalf of the Borrower from the Swingline Lender in any bankruptcy,
insolvency or similar proceeding or otherwise, the loss of the amount so
recovered shall be shared ratably among all the Revolving Credit Lenders in the
manner contemplated by SECTION 2.15(b).
23
(f) If, as a result of any bankruptcy, insolvency or similar
proceeding with respect to the Borrower, Revolving Loans are not made
pursuant to subsection (e) above in an amount sufficient to repay any
amounts owed to the Swingline Lender in respect of any outstanding
Swingline Loans, or if the Swingline Lender is otherwise precluded for any
reason from giving a notice on behalf of the Borrower as provided for
hereinabove, the Swingline Lender shall be deemed to have sold without
recourse, representation or warranty, and each Revolving Credit Lender
shall be deemed to have purchased and hereby agrees to purchase, a
participation in such outstanding Swingline Loans in an amount equal to its
ratable share (based on the proportion that its Revolving Credit Commitment
bears to the aggregate Revolving Credit Commitments at such time) of the
unpaid amount thereof together with accrued interest thereon. Upon one (1)
Business Day's prior notice from the Swingline Lender, each Revolving
Credit Lender (other than the Swingline Lender) will make available to the
Administrative Agent at its office referred to in SECTION 11.5 (or at such
other location as the Administrative Agent may designate) an amount, in
Dollars and in immediately available funds, equal to its respective
participation. To the extent the Revolving Credit Lenders have made such
amounts available to the Administrative Agent as provided hereinabove, the
Administrative Agent will make the aggregate of such amounts available to
the Swingline Lender in like funds as received by the Administrative Agent.
In the event any such Revolving Credit Lender fails to make available to
the Administrative Agent the amount of such Lender's participation as
provided in this subsection (f), the Swingline Lender shall be entitled to
recover such amount on demand from such Lender, together with interest
thereon for each day from the date such amount is required to be made
available for the account of the Swingline Lender until the date such
amount is made available to the Swingline Lender at the Federal Funds Rate
for the first three (3) Business Days and thereafter at the Adjusted
Alternate Base Rate applicable to Revolving Loans. Promptly following its
receipt of any payment by or on behalf of the Borrower in respect of a
Swingline Loan, the Swingline Lender will pay to each Revolving Credit
Lender that has acquired a participation therein such Lender's ratable
share of such payment.
(g) Notwithstanding any provision of this Agreement to the
contrary, the obligation of each Revolving Credit Lender (other than the
Swingline Lender) to make Revolving Loans for the purpose of repaying any
Refunded Swingline Loans pursuant to subsection (e) above and each such
Lender's obligation to purchase a participation in any unpaid Swingline
Loans pursuant to subsection (f) above shall be absolute and unconditional
and shall not be affected by any circumstance or event whatsoever,
including, without limitation, (i) any set-off, counterclaim, recoupment,
defense or other right that such Lender may have against the Swingline
Lender, the Administrative Agent, the Borrower or any other Person for any
reason whatsoever, (ii) the occurrence or continuance of any Default or
Event of Default, (iii) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of the
Borrower or any of its Subsidiaries, or (iv) any breach of this Agreement
by any party hereto.
2.3 Disbursements; Funding Reliance; Domicile of Loans. (a) The
--------------------------------------------------
Borrower hereby authorizes the Administrative Agent to disburse the
proceeds of each Borrowing in accordance with the terms of any written
instructions from any of the Authorized Officers, provided that the
--------
Administrative Agent shall not be obligated under any circumstances to
forward amounts to any account not listed in an Account Designation Letter.
The Borrower may at any time deliver to the Administrative Agent an Account
Designation Letter listing any additional accounts or deleting any accounts
listed in a previous Account Designation Letter.
24
(b) Unless the Administrative Agent has received, prior to 1:00
p.m., Charlotte time, on the relevant Borrowing Date, written notice from a
Lender that such Lender will not make available to the Administrative Agent
such Lender's ratable portion, if any, of the relevant Borrowing, the
Administrative Agent may assume that such Lender has made such portion
available to the Administrative Agent in immediately available funds on
such Borrowing Date in accordance with the applicable provisions of SECTION
2.2, and the Administrative Agent may, in reliance upon such assumption,
but shall not be obligated to, make a corresponding amount available to the
Borrower on such Borrowing Date. If and to the extent that such Lender
shall not have made such portion available to the Administrative Agent, and
the Administrative Agent shall have made such corresponding amount
available to the Borrower, such Lender, on the one hand, and the Borrower,
on the other, severally agree to pay to the Administrative Agent forthwith
on demand such corresponding amount, together with interest thereon for
each day from the date such amount is made available to the Borrower until
the date such amount is repaid to the Administrative Agent, (i) in the case
of such Lender, at the Federal Funds Rate, and (ii) in the case of the
Borrower, at the rate of interest applicable at such time to the Class and
Type of Loans comprising such Borrowing, as determined under the provisions
of SECTION 2.8. If such Lender shall repay to the Administrative Agent such
corresponding amount, such amount shall constitute such Lender's Loan as
part of such Borrowing for purposes of this Agreement. The failure of any
Lender to make any Loan required to be made by it as part of any Borrowing
shall not relieve any other Lender of its obligation, if any, hereunder to
make its Loan as part of such Borrowing, but no Lender shall be responsible
for the failure of any other Lender to make the Loan to be made by such
other Lender as part of any Borrowing.
(c) Each Lender may, at its option, make and maintain any Loan at,
to or for the account of any of its Lending Offices, provided that any
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exercise of option shall not affect the obligation of the Borrower to repay
such Loan to or for the account of such Lender in accordance with the terms
of this Agreement.
2.4 Notes. (a) The Loans made by each Lender shall be evidenced (i)
-----
in the case of Term Loans, by a Term Note appropriately completed in
substantially the form of EXHIBIT B-1, (ii) in the case of Revolving Loans,
by a Revolving Credit Note appropriately completed in substantially the
form of EXHIBIT B-2, and (iii) in the case of the Swingline Loans, by a
Swingline Note appropriately completed in substantially the form of EXHIBIT
B-3.
(b) Each Term Note issued to a Term Loan Lender shall (i) be
executed by the Borrower, (ii) be payable to the order of such Lender,
(iii) be dated as of the Closing Date, (iv) be in a stated principal amount
equal to such Lender's Term Loan Commitment (or, in the case of a Term Note
issued after the Closing Date, in an amount equal to the unpaid principal
amount of such Lender's Term Loan), (v) bear interest in accordance with
the provisions of SECTION 2.8, as the same may be applicable from time to
time to the Term Loan made by such Lender, and (vi) be entitled to all of
the benefits of this Agreement and the other Credit Documents and subject
to the provisions hereof and thereof.
(c) Each Revolving Credit Note issued to a Revolving Credit Lender
shall (i) be executed by the Borrower, (ii) be payable to the order of such
Lender, (iii) be dated as of the Closing Date, (iv) be in a stated
principal amount equal to such Lender's Revolving Credit Commitment, (v)
bear interest in accordance with the provisions of SECTION 2.8, as the same
may be applicable to the Revolving Loans made by such Lender from time to
time, and (vi) be entitled to all of the benefits of this Agreement and the
other Credit Documents and subject to the provisions hereof and thereof.
25
(d) The Swingline Note shall (i) be executed by the Borrower, (ii)
be payable to the order of the Swingline Lender, (iii) be dated as of the
Closing Date, (iv) be in a stated principal amount equal to the Swingline
Commitment, (v) bear interest in accordance with the provisions of SECTION
2.8, as the same may be applicable to the Swingline Loans made from time to
time, and (vi) be entitled to all of the benefits of this Agreement and the
other Credit Documents and subject to the provisions hereof and thereof.
(e) Each Lender will record on its internal records the amount and
Type of each Loan made by it and each payment received by it in respect
thereof and will, in the event of any transfer of any of its Notes, either
endorse on the reverse side thereof or on a schedule attached thereto (or
any continuation thereof) the outstanding principal amount and Type of the
Loans evidenced thereby as of the date of transfer or provide such
information on a schedule to the Assignment and Acceptance relating to such
transfer; provided, however, that the failure of any Lender to make any
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such recordation or provide any such information, or any error therein,
shall not affect the Borrower's obligations under this Agreement or the
Notes.
2.5 Termination and Reduction of Commitments and Swingline
------------------------------------------------------
Commitment. (a) The Term Loan Commitments shall be automatically and
----------
permanently terminated on the Closing Date (or, if earlier, on April 1,
1998), unless the Term Loans have been made in full on or prior to such
date. The Revolving Credit Commitments shall be automatically and
permanently terminated on the earlier of (i) April 1, 1998 (if the Closing
Date shall not have occurred on or prior to such date) and (ii) the
Revolving Credit Maturity Date (unless sooner terminated pursuant to
subsections (c) or (d) below or SECTION 9.2). The Swingline Commitment
shall be automatically and permanently terminated on the Swingline Maturity
Date (unless sooner terminated pursuant to subsections (d) or (e) below or
SECTION 9.2).
(b) On each date set forth below, the aggregate Revolving Credit
Commitments shall be automatically and permanently reduced to the amount
set forth below opposite such date (unless, pursuant to the provisions of
this SECTION 2.5, the aggregate Revolving Credit Commitments have been
previously reduced to such amount or to a lower amount, in which event no
reduction shall be made pursuant to the provisions of this subsection (b)
on such date):
Aggregate Revolving
Date Credit Commitments
---- ------------------
June 30, 2002 $ 161,875,000
September 30, 2002 $ 148,750,000
December 31, 2002 $ 135,625,000
March 31, 2003 $ 122,500,000
June 30, 2003 $ 109,375,000
September 30, 2003 $ 96,250,000
December 31, 2003 $ 83,125,000
March 31, 2004 $ 70,000,000
June 30, 2004 $ 52,500,000
September 30, 2004 $ 35,000,000
December 31, 2004 $ 17,500,000
March 31, 2005 $ 0
26
(c) The Revolving Credit Commitments shall, on each date upon
which a prepayment of the Loans is required under SECTION 2.6(d) or SECTION
2.6(e) (and exceeds in amount the aggregate principal amount of Term Loans
then outstanding) or would be required if Term Loans were then outstanding,
be automatically and permanently reduced by the amount, if any, by which
the amount of such required prepayment (determined as if an unlimited
amount of Term Loans were then outstanding) exceeds the aggregate principal
amount of Term Loans then actually outstanding, as more particularly set
forth in SECTION 2.6(f).
(d) At any time and from time to time after the date hereof, upon
not less than five (5) Business Days' prior written notice to the
Administrative Agent (and, in the case of a termination or reduction of the
Unutilized Swingline Commitment, the Swingline Lender), the Borrower may
terminate in whole or reduce in part the aggregate Unutilized Revolving
Credit Commitments or the Unutilized Swingline Commitment, provided that
--------
any such partial reduction shall be in an aggregate amount of not less than
$5,000,000 ($500,000 in the case of the Unutilized Swingline Commitment)
or, if greater, an integral multiple thereof, and provided further that any
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such termination or partial reduction shall be taken into account for
purposes of calculating the Revolving Credit Commitment Fee pursuant to
SECTION 2.9(b). The amount of any termination or reduction made under this
subsection (d) may not thereafter be reinstated.
(e) Each reduction of the Revolving Credit Commitments pursuant to
this SECTION 2.5 shall be applied ratably among the Revolving Credit
Lenders according to their respective Revolving Credit Commitments.
Notwithstanding any provision of this Agreement to the contrary, any
reduction of the Revolving Credit Commitments pursuant to this SECTION 2.5
that has the effect of reducing the aggregate Revolving Credit Commitments
to an amount less than the amount of the Swingline Commitment at such time
shall result in an automatic corresponding reduction of the Swingline
Commitment to the amount of the aggregate Revolving Credit Commitments (as
so reduced), without any further action on the part of the Borrower or the
Swingline Lender.
2.6 Mandatory Repayments and Prepayments. (a) Except to the extent
------------------------------------
due or paid sooner pursuant to the provisions of this Agreement, the
Borrower will repay the aggregate outstanding principal of the Term Loans
in the amounts and on the dates set forth below:
Date Payment Amount
---- --------------
June 30, 1998 $375,000
September 30, 1998 $375,000
December 31, 1998 $375,000
March 31, 1999 $375,000
June 30, 1999 $375,000
September 30, 1999 $375,000
December 31, 1999 $375,000
March 31, 2000 $375,000
June 30, 2000 $375,000
September 30, 2000 $375,000
December 31, 2000 $375,000
March 31, 2001 $375,000
June 30, 2001 $375,000
September 30, 2001 $375,000
December 31, 2001 $375,000
27
Date Payment Amount
---- --------------
March 31, 2002 $375,000
June 30, 2002 $375,000
September 30, 2002 $375,000
December 31, 2002 $375,000
March 31, 2003 $375,000
June 30, 2003 $375,000
September 30, 2003 $375,000
December 31, 2003 $375,000
March 31, 2004 $375,000
June 30, 2004 $375,000
September 30, 2004 $375,000
December 31, 2004 $375,000
March 31, 2005 $375,000
June 30, 2005 $7,500,000
September 30, 2005 $7,500,000
December 31, 2005 $7,500,000
March 31, 2006 $7,500,000
June 30, 2006 $27,375,000
September 30, 2006 $27,375,000
December 31, 2006 $27,375,000
March 31, 2007 $27,375,000
(b) To the extent not previously paid, and except to the extent due or
made sooner pursuant to the provisions of this Agreement, (i) the aggregate
outstanding principal of the Term Loans shall be due and payable on the Term
Loan Maturity Date, (ii) the aggregate outstanding principal of the Revolving
Loans shall be due and payable on the Revolving Credit Maturity Date, and (iii)
the aggregate outstanding principal of the Swingline Loans shall be due and
payable on the Swingline Maturity Date.
(c) In the event that at any time (including on any date set forth in the
table in SECTION 2.5(b)) the sum of (x) the aggregate principal amount of
Revolving Loans outstanding at such time, (y) the aggregate Letter of Credit
Exposure of all Revolving Credit Lenders at such time and (z) the aggregate
principal amount of Swingline Loans outstanding at such time (excluding the
aggregate amount of any Swingline Loans to be repaid with proceeds of Revolving
Loans made on the date of determination) shall exceed the aggregate Revolving
Credit Commitments at such time (after giving effect to any concurrent
termination or reduction thereof), the Borrower will immediately prepay the
outstanding principal amount of the Swingline Loans and, to the extent of any
excess remaining after prepayment in full of outstanding Swingline Loans, the
Borrower will immediately prepay the outstanding principal amount of the
Revolving Loans in the amount of such excess; provided that, to the extent such
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excess amount is greater than the principal aggregate amount of Swingline Loans
and Revolving Loans outstanding immediately prior to the application of such
prepayment, the amount so prepaid shall be retained by the Administrative Agent
and held in the Cash Collateral Account as cover for the Letter of Credit
Exposure of the Revolving Credit Lenders, as more particularly described in
SECTION 3.9, and thereupon such cash shall be deemed to reduce the aggregate
Letter of Credit Exposure by an equivalent amount.
28
(d) Not later than 180 days after its receipt of any proceeds of
insurance, condemnation award or other compensation in respect of any Casualty
Event (and in any event upon its determination not to repair or replace any
property subject to such Casualty Event), the Borrower will prepay the
outstanding principal amount of the Loans in an amount equal to 100% of the Net
Cash Proceeds from such Casualty Event (less any amounts theretofore applied or
committed to be applied within a reasonable period to the repair or replacement
of property subject to such Casualty Event) and will deliver to the
Administrative Agent, concurrently with such prepayment, a certificate signed by
a Financial Officer of the Borrower in form and substance satisfactory to the
Administrative Agent and setting forth the calculation of such Net Cash
Proceeds; provided, however, that, notwithstanding the foregoing, (i) nothing in
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this subsection shall be deemed to limit or otherwise affect any right of the
Administrative Agent herein or in any of the other Credit Documents to receive
and hold such proceeds as loss payee and to disburse the same to the Borrower
upon the terms hereof or thereof, or any obligation of the Borrower and each of
its Subsidiaries herein or in any of the other Credit Documents to remit any
such proceeds to the Administrative Agent upon its receipt thereof, and (ii) any
and all such proceeds received or held by the Administrative Agent or the
Borrower or any of its Subsidiaries during the continuance of an Event of
Default (regardless of any proposed or actual use thereof for repair or
replacement) shall be applied to prepay the outstanding principal amount of the
Loans.
(e) Not later than 180 days after its receipt thereof (and in any event
upon its determination not to acquire additional assets or properties or
otherwise to reinvest in its businesses), the Borrower will prepay the
outstanding principal amount of the Loans in an amount equal to 100% of the Net
Cash Proceeds from any Asset Disposition (less any amounts theretofore expended
or committed to be expended within a reasonable period to acquire assets or
properties or otherwise reinvested in its businesses) and will deliver to the
Administrative Agent, concurrently with such prepayment, a certificate signed by
a Financial Officer of the Borrower in form and substance satisfactory to the
Administrative Agent and setting forth the calculation of such Net Cash
Proceeds. Notwithstanding the foregoing, nothing in this subsection shall be
deemed to permit any Asset Disposition not expressly permitted under SECTION
8.4.
(f) Subject to the provisions of subsection (g) below, each prepayment of
the Loans made pursuant to subsection (d) or (e) above (each, a "Mandatory
Prepayment Event") shall be applied (i) first, to reduce the outstanding
principal amount of the Term Loans, with each such reduction to be applied to
the scheduled principal payments on the Term Loans (as set forth in subsection
(a) above) pro rata over the remaining term of the Term Loans, (ii) second, to
the extent of any excess remaining after application as provided in clause (i)
above, to reduce the outstanding principal amount of the Swingline Loans, with a
corresponding reduction to the Revolving Credit Commitments as provided in
SECTION 2.5(c), (iii) third, to the extent of any excess remaining after
application as provided in clauses (i) and (ii) above, to reduce the outstanding
principal amount of the Revolving Loans, with a corresponding reduction to the
Revolving Credit Commitments as provided in SECTION 2.5(c), and (iv) fourth, to
the extent of any excess remaining after application as provided in clauses (i),
(ii) and (iii) above, to pay any outstanding Reimbursement Obligations, and
thereafter to cash collateralize Letter of Credit Exposure pursuant to SECTION
3.9. Each prepayment pursuant to the provisions of this SECTION 2.6 shall be
applied ratably among the Lenders holding the Loans being prepaid, in proportion
to the principal amount held by each, and within each Class of Loans shall be
applied first to prepay all ABR Loans before any LIBOR Loans are prepaid.
(g) In the event and on each occasion that a Mandatory Prepayment Event
occurs, the Borrower shall give to the Administrative Agent and the Lenders at
least three (3) Business Days' prior
29
written notice of such event (to the extent practicable), the amount of Loans
anticipated to be prepaid and the application of such prepayment as set forth in
subsection (f) above. Any Lender holding a Term Loan may elect, by notice to the
Administrative Agent in writing at least two (2) Business Days prior to any such
prepayment of Term Loans required to be made by the Borrower in respect of any
Mandatory Prepayment Event, to cause all or a portion of such prepayment to be
applied instead to repay Revolving Loans in accordance with subsection (f) above
(with a corresponding permanent reduction to the Revolving Credit Commitments as
provided in SECTION 2.5(c), but only to the extent that the aggregate amount of
such prepayments applied to the Revolving Loans exceeds $10,000,000 for any
period of four consecutive fiscal quarters). If and to the extent, however, that
the aggregate amount of the prepayment which any holders of Term Loans so elect
to refuse exceeds the principal amount of Revolving Loans remaining outstanding
after any concurrent prepayment of Revolving Loans, the portion of such
prepayment that exceeds such outstanding principal amount of the Revolving Loans
shall be allocated among such electing holders of Term Loans pro rata according
to the outstanding principal amount of the Term Loan of each such holder and
applied to the payment of such holders' Term Loans.
(h) Each payment or prepayment of a LIBOR Loan made pursuant to the
provisions of this SECTION 2.6 on a day other than the last day of the Interest
Period applicable thereto shall be made together with all amounts required under
SECTION 2.18 to be paid as a consequence thereof.
2.7 Voluntary Prepayments. (a) At any time and from time to time, the
---------------------
Borrower shall have the right to prepay the Loans, in whole or in part, upon
written notice (or oral notice promptly confirmed in writing) given to the
Administrative Agent not later than 1:00 p.m., Charlotte time, three (3)
Business Days prior to each intended prepayment, provided that (i) each partial
--------
prepayment shall be in an aggregate principal amount of not less than $3,000,000
or, if greater, an integral multiple of $1,000,000 in excess thereof, (ii) no
partial prepayment of LIBOR Loans made pursuant to any single Borrowing shall
reduce the aggregate outstanding principal amount of the remaining LIBOR Loans
under such Borrowing to less than $5,000,000 or to any greater amount not an
integral multiple of $1,000,000 in excess thereof, and (iii) unless made
together with all amounts required under SECTION 2.18 to be paid as a
consequence of such prepayment, a prepayment of a LIBOR Loan may be made only on
the last day of the Interest Period applicable thereto. Each such notice (each,
a "Notice of Prepayment") shall be given in the form of EXHIBIT C (or, if oral
notice is given, shall be promptly followed with a writing in the form of
EXHIBIT C), shall specify the proposed date of such prepayment and the aggregate
principal amount, Class and Type of Revolving Loans to be prepaid (and, in the
case of LIBOR Loans, the Interest Period of the Borrowing pursuant to which
made), and shall be irrevocable and shall bind the Borrower to make such
prepayment on the terms specified therein. Any prepayments of the Term Loans
made pursuant to this subsection (a) at any time prior to March 31, 1999 shall
be accompanied by a prepayment premium equal to one percent (1.0%) of the
aggregate principal amount being prepaid. Any prepayments of the Term Loans made
pursuant to this subsection (a) at any time on or after March 31, 1999, and any
prepayments of the Revolving Loans made pursuant to this subsection (a) at any
time, may be made without premium or penalty (except as provided in clause (iii)
above). Notwithstanding the foregoing provisions of this subsection (a), the
Borrower may prepay the Swingline Loans at any time and from time to time after
the date hereof, in whole or in part, without premium or penalty, upon written
notice (or oral notice promptly confirmed in writing) delivered to the
Administrative Agent no later than 1:00 p.m., Charlotte time, on the date of
such prepayment, provided that each partial prepayment of Swingline Loans shall
--------
be in an aggregate principal amount of not less than $500,000 or, if greater, an
integral multiple of $250,000 in excess thereof. Revolving Loans and Swingline
Loans prepaid pursuant to this subsection (a) may be reborrowed, subject to the
terms and conditions of this Agreement.
30
(b) Each prepayment of the Term Loans pursuant to subsection (a) above
shall be applied to reduce the outstanding principal amount of the Term Loans,
with each such reduction to be applied to the scheduled principal payments on
the Term Loans (as set forth in SECTION 2.6(a)) on a pro rata basis according to
the amount of each such scheduled payment. Each prepayment of the Loans pursuant
to the provisions of this SECTION 2.7 shall be applied ratably among the Lenders
holding the Loans being prepaid, in proportion to the principal amount held by
each.
2.8 Interest. (a) The Borrower will pay interest in respect of the
--------
unpaid principal amount of each Loan, from the date of Borrowing thereof until
such principal amount shall be paid in full, (i) at the Adjusted Alternate Base
Rate applicable to the Class of such Loan, as in effect from time to time during
such periods as such Loan is an ABR Loan, and (ii) at the Adjusted LIBOR Rate
applicable to the Class of such Loan, as in effect from time to time during such
periods as such Loan is a LIBOR Loan.
(b) Upon the occurrence and during the continuance of an Event of Default
as the result of failure by the Borrower to pay any principal of or interest on
any Loan, any fees or other amount hereunder when due (whether at maturity,
pursuant to acceleration or otherwise), and (at the election of the Required
Lenders) upon the occurrence and during the continuance of any other Event of
Default, all outstanding principal amounts of the Loans and, to the greatest
extent permitted by law, all interest accrued on the Loans and all other accrued
and outstanding fees and other amounts hereunder, shall bear interest at a rate
per annum equal to the interest rate applicable from time to time thereafter to
such Loans (whether the Adjusted Alternate Base Rate or the Adjusted LIBOR Rate)
plus 2% (or, in the case of fees and other amounts, at the Adjusted Alternate
Base Rate applicable to Revolving Loans plus 2%), and, in each case, such
default interest shall be payable on demand. To the greatest extent permitted by
law, interest shall continue to accrue after the filing by or against the
Borrower of any petition seeking any relief in bankruptcy or under any law
pertaining to insolvency or debtor relief.
(c) Accrued (and theretofore unpaid) interest shall be payable as follows:
(i) in respect of each ABR Loan (including any ABR Loan or portion
thereof paid or prepaid pursuant to the provisions of SECTION 2.6, except
as provided hereinbelow), in arrears on the last Business Day of each
calendar quarter, beginning with the first such day to occur after the
Closing Date; provided, that in the event the Loans are repaid or prepaid
--------
in full and the Commitments have been terminated, then accrued interest in
respect of all ABR Loans shall be payable together with such repayment or
prepayment on the date thereof;
(ii) in respect of each LIBOR Loan (including any LIBOR Loan or
portion thereof paid or prepaid pursuant to the provisions of SECTION 2.6,
except as provided hereinbelow), in arrears (y) on the last Business Day of
the Interest Period applicable thereto (subject to the provisions of clause
(iv) in SECTION 2.10) and (z) in addition, in the case of a LIBOR Loan with
an Interest Period having a duration of six months, on the date three
months after the first day of such Interest Period; provided, that in the
--------
event all LIBOR Loans made pursuant to a single Borrowing are repaid or
prepaid in full, then accrued interest in respect of such LIBOR Loans shall
be payable together with such repayment or prepayment on the date thereof;
and
(iii) in respect of any Loan, at maturity (whether pursuant to
acceleration or otherwise) and, after maturity, on demand.
31
(d) Nothing contained in this Agreement or in any other Credit Document
shall be deemed to establish or require the payment of interest to any Lender at
a rate in excess of the maximum rate permitted by applicable law. If the amount
of interest payable for the account of any Lender on any interest payment date
would exceed the maximum amount permitted by applicable law to be charged by
such Lender, the amount of interest payable for its account on such interest
payment date shall be automatically reduced to such maximum permissible amount.
In the event of any such reduction affecting any Lender, if from time to time
thereafter the amount of interest payable for the account of such Lender on any
interest payment date would be less than the maximum amount permitted by
applicable law to be charged by such Lender, then the amount of interest payable
for its account on such subsequent interest payment date shall be automatically
increased to such maximum permissible amount, provided that at no time shall the
--------
aggregate amount by which interest paid for the account of any Lender has been
increased pursuant to this sentence exceed the aggregate amount by which
interest paid for its account has theretofore been reduced pursuant to the
previous sentence.
(e) The Administrative Agent shall promptly notify the Borrower and the
Lenders upon determining the interest rate for each Borrowing of LIBOR Loans
after its receipt of the relevant Notice of Borrowing or Notice of
Conversion/Continuation, and upon each change in the Alternate Base Rate;
provided, however, that the failure of the Administrative Agent to provide the
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Borrower or the Lenders with any such notice shall neither affect any
obligations of the Borrower or the Lenders hereunder nor result in any liability
on the part of the Administrative Agent to the Borrower or any Lender. Each such
determination (including each determination of the Reserve Requirement) shall,
absent manifest error, be conclusive and binding on all parties hereto.
2.9 Fees. The Borrower agrees to pay:
----
(a) To the Arranger, for the account of the Agents, on the Closing Date,
the fee described in paragraph (1) of the Fee Letter, in the amount set forth
therein as due and payable on such date;
(b) To the Administrative Agent, for the account of each Lender, a
commitment fee (the "Revolving Credit Commitment Fee") for the period from the
date of this Agreement to the Revolving Credit Termination Date, at a per annum
rate equal to the Applicable Margin Percentage for the Revolving Credit
Commitment Fee, on such Lender's ratable share (based on the proportion that its
Revolving Credit Commitment bears to the aggregate Revolving Credit Commitments)
of the average daily aggregate Unutilized Revolving Credit Commitments, payable
in arrears (i) on the last Business Day of each calendar quarter, beginning with
the first such day to occur after the Closing Date, and (ii) on the Revolving
Credit Termination Date;
(c) To the Administrative Agent, for the account of each Lender, a letter
of credit fee for each calendar quarter in respect of all Letters of Credit
outstanding during such quarter, at a per annum rate equal to the Applicable
Margin Percentage from time to time during such quarter for Revolving Loans that
are maintained as LIBOR Loans, on such Lender's ratable share (based on the
proportion that its Revolving Credit Commitment bears to the aggregate Revolving
Credit Commitments) of the daily average aggregate Stated Amount of such Letters
of Credit, payable in arrears (i) on the last Business Day of each calendar
quarter, beginning with the first such day to occur after the Closing Date, and
(ii) on the later of the Revolving Credit Termination Date and the date of
termination of the last outstanding Letter of Credit;
(d) To the Issuing Lender, for its own account, a facing fee for each
calendar quarter in respect of all Letters of Credit outstanding during such
quarter, at a per annum rate of 0.25% on the
32
daily average aggregate Stated Amount of such Letters of Credit (provided,
--------
however, that, notwithstanding the foregoing, the amount of such fee with regard
-------
to any single Letter of Credit shall not be less than $500), payable in arrears
(i) on the last Business Day of each calendar quarter, beginning with the first
such day to occur after the Closing Date, and (ii) on the later of the Revolving
Credit Termination Date and the date of termination of the last outstanding
Letter of Credit; and
(e) To the Administrative Agent, for its own account, the annual
administrative fee described in paragraph (2) of the Fee Letter, on the terms,
in the amount and at the times set forth therein.
2.10 Interest Periods. Concurrently with the giving of (y) a Notice of
----------------
Borrowing or (z) a Notice of Conversion/Continuation in respect of any Borrowing
(whether in respect of Term Loans or Revolving Loans) comprised of ABR Loans to
be converted into, or LIBOR Loans to be continued as, LIBOR Loans, the Borrower
shall have the right to elect, pursuant to such notice, the interest period
(each, an "Interest Period") to be applicable to such LIBOR Loans, which
Interest Period shall, at the option of the Borrower, be a one, three or six-
month period; provided, however, that:
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(i) all LIBOR Loans comprising a single Borrowing shall at all
times have the same Interest Period;
(ii) the initial Interest Period for any LIBOR Loan shall commence
on the date of the Borrowing of such LIBOR Loan (including the date of any
continuation of, or conversion into, such LIBOR Loan), and each successive
Interest Period applicable to such LIBOR Loan shall commence on the day on
which the next preceding Interest Period applicable thereto expires;
(iii) LIBOR Loans may not be outstanding under more than seven (7)
separate Interest Periods at any one time (for which purpose Interest
Periods shall be deemed to be separate even if they are coterminous);
(iv) if any Interest Period otherwise would expire on a day that is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day unless such next succeeding Business Day falls in
another calendar month, in which case such Interest Period shall expire on
the next preceding Business Day;
(v) the Borrower may not select any Interest Period that begins
prior to the Closing Date or that expires (y) after the Term Loan Maturity
Date, with respect to Term Loans that are to be maintained as LIBOR Loans,
or (z) after the Revolving Credit Maturity Date, with respect to Revolving
Loans that are to be maintained as LIBOR Loans;
(vi) no Interest Period may be selected with respect to the Term
Loans that would end after a scheduled date for repayment of principal of
the Term Loans occurring on or after the first day of such Interest Period
unless, immediately after giving effect to such selection, the aggregate
principal amount of Term Loans that are Base Rate Loans or that have
Interest Periods expiring on or before such principal repayment date equals
or exceeds the principal amount required to be paid on such principal
repayment date;
(vii) no Interest Period may be selected with respect to the
Revolving Loans that would end after a scheduled date for repayment of
principal of the Revolving Loans (including
33
any date of a scheduled mandatory reduction of the aggregate Revolving
Credit Commitments) occurring on or after the first day of such Interest
Period unless, immediately after giving effect to such selection, the
aggregate principal amount of Revolving Loans that are Base Rate Loans or
that have Interest Periods expiring on or before such principal repayment
date equals or exceeds the principal amount required to be paid on such
principal repayment date;
(viii) the Borrower may not select any Interest Period having a
duration longer than one month at any time prior to the Syndication
Completion Date;
(ix) if any Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month during which such
Interest Period would otherwise expire, such Interest Period shall expire
on the last Business Day of such calendar month; and
(x) if, upon the expiration of any Interest Period applicable to a
Borrowing of LIBOR Loans, the Borrower shall have failed to elect a new
Interest Period to be applicable to such LIBOR Loans, then the Borrower
shall be deemed to have elected to convert such LIBOR Loans into ABR Loans
as of the expiration of the then current Interest Period applicable
thereto.
2.11 Conversions and Continuations. (a) The Borrower shall have the
-----------------------------
right, on any Business Day occurring on or after the Closing Date, to elect (i)
to convert all or a portion of the outstanding principal amount of any ABR Loans
of any Class into LIBOR Loans of the same Class, or to convert any LIBOR Loans
of any Class the Interest Periods for which end on the same day into ABR Loans
of the same Class, or (ii) to continue all or a portion of the outstanding
principal amount of any LIBOR Loans of any Class the Interest Periods for which
end on the same day for an additional Interest Period, provided that (w) any
--------
such conversion of LIBOR Loans into ABR Loans shall involve an aggregate
principal amount of not less than $3,000,000 or, if greater, an integral
multiple of $1,000,000 in excess thereof; any such conversion of ABR Loans into,
or continuation of, LIBOR Loans shall involve an aggregate principal amount of
not less than $5,000,000 or, if greater, an integral multiple of $1,000,000 in
excess thereof; and no partial conversion of LIBOR Loans made pursuant to a
single Borrowing shall reduce the outstanding principal amount of such LIBOR
Loans to less than $5,000,000 or to any greater amount not an integral multiple
of $1,000,000 in excess thereof, (x) except as otherwise provided in SECTION
2.16(d), LIBOR Loans may be converted into ABR Loans only on the last day of the
Interest Period applicable thereto (and, in any event, if a LIBOR Loan is
converted into an ABR Loan on any day other than the last day of the Interest
Period applicable thereto, the Borrower will pay, upon such conversion, all
amounts required under SECTION 2.18 to be paid as a consequence thereof), (y) no
such conversion or continuation shall be permitted with regard to any ABR Loans
that are Swingline Loans, and (z) no conversion of ABR Loans into LIBOR Loans or
continuation of LIBOR Loans shall be permitted during the continuance of a
Default or Event of Default.
(b) The Borrower shall make each such election by giving the
Administrative Agent written notice (or oral notice promptly confirmed in
writing) not later than 1:00 p.m., Charlotte time, three (3) Business Days prior
to the intended effective date of any conversion of ABR Loans into, or
continuation of, LIBOR Loans and one (1) Business Day prior to the intended
effective date of any conversion of LIBOR Loans into ABR Loans. Each such notice
(each, a "Notice of Conversion/Continuation") shall be irrevocable, shall be
given in the form of EXHIBIT D (or, if oral notice is given, shall be promptly
followed with a writing in the form of EXHIBIT D) and shall specify (x) the date
of such conversion or continuation (which shall be a Business Day), (y) in the
case of a
34
conversion into, or a continuation of, LIBOR Loans, the Interest Period to be
applicable thereto, and (z) the aggregate amount, Class and Type of the Loans
being converted or continued. Upon the receipt of a Notice of
Conversion/Continuation, the Administrative Agent will promptly notify each
Lender having a Commitment for Loans of the relevant Class (or having
outstanding Loans of the relevant Class) of the proposed conversion or
continuation. In the event that the Borrower shall fail to deliver a Notice of
Conversion/Continuation as provided herein with respect to any outstanding LIBOR
Loans, such LIBOR Loans shall automatically be converted to ABR Loans upon the
expiration of the then current Interest Period applicable thereto (unless repaid
pursuant to the terms hereof). In the event the Borrower shall have failed to
select in a Notice of Conversion/Continuation the duration of the interest
period to be applicable to any conversion into, or continuation of, LIBOR Loans,
then the Borrower shall be deemed to have selected an Interest Period with a
duration of one month.
2.12 Method of Payments; Computations. (a) All payments by the Borrower
--------------------------------
hereunder shall be made without setoff, counterclaim or other defense, in
Dollars and in immediately available funds to the Administrative Agent, for the
account of the Lenders or the Swingline Lender, as the case may be (except as
otherwise expressly provided herein as to payments required to be made directly
to the Issuing Lender and the Lenders), at the Administrative Agent's office
referred to in SECTION 11.5, prior to 1:00 p.m., Charlotte time, on the date
payment is due. Any payment made as required hereinabove, but after 1:00 p.m.,
Charlotte time, shall be deemed to have been made on the next succeeding
Business Day. If any payment falls due on a day that is not a Business Day, then
such due date shall be extended to the next succeeding Business Day (except that
in the case of LIBOR Loans to which the proviso of clause (iv) in SECTION 2.10
is applicable, such due date shall be the next preceding Business Day), and such
extension of time shall then be included in the computation of payment of
interest, fees or other applicable amounts.
(b) The Administrative Agent will distribute to the Lenders like amounts
relating to payments made to the Administrative Agent for the account of the
Lenders as follows: (i) if the payment is received by 1:00 p.m., Charlotte time,
in immediately available funds, the Administrative Agent will make available to
each relevant Lender on the same date, by wire transfer of immediately available
funds, such Lender's ratable share of such payment (based on the percentage that
the amount of the relevant payment owing to such Lender bears to the total
amount of such payment owing to all of the relevant Lenders), and (ii) if such
payment is received after 1:00 p.m., Charlotte time, or in other than
immediately available funds, the Administrative Agent will make available to
each such Lender its ratable share of such payment by wire transfer of
immediately available funds on the next succeeding Business Day (or in the case
of uncollected funds, as soon as practicable after collected). If the
Administrative Agent shall not have made a required distribution to the
appropriate Lenders as required hereinabove after receiving a payment for the
account of such Lenders, the Administrative Agent will pay to each such Lender,
on demand, its ratable share of such payment with interest thereon at the
Federal Funds Rate for each day from the date such amount was required to be
disbursed by the Administrative Agent until the date repaid to such Lender. The
Administrative Agent will distribute to the Issuing Lender like amounts relating
to payments made to the Administrative Agent for the account of the Issuing
Lender in the same manner, and subject to the same terms and conditions, as set
forth hereinabove with respect to distributions of amounts to the Lenders.
(c) Unless the Administrative Agent shall have received written notice
from the Borrower prior to the date on which any payment is due to any Lender
hereunder that such payment will not be made in full, the Administrative Agent
may assume that the Borrower has made such payment in full to the Administrative
Agent on such date, and the Administrative Agent may, in reliance on such
assumption, but shall not be obligated to, cause to be distributed to such
Lender on such due date an
35
amount equal to the amount then due to such Lender. If and to the extent the
Borrower shall not have so made such payment in full to the Administrative
Agent, and without limiting the obligation of the Borrower to make such payment
in accordance with the terms hereof, such Lender shall repay to the
Administrative Agent forthwith on demand such amount so distributed to such
Lender, together with interest thereon for each day from the date such amount is
so distributed to such Lender until the date repaid to the Administrative Agent,
at the Federal Funds Rate.
(d) All computations of interest and fees hereunder (including
computations of the Reserve Requirement) shall be made on the basis of a year
consisting of (i) in the case of interest on ABR Loans, 365 or 366 days, as the
case may be, or (ii) in all other instances, 360 days; and in each instance
under (i) and (ii) above, with regard to the actual number of days (including
the first day, but excluding the last day) elapsed.
2.13 Recovery of Payments. (a) The Borrower agrees that to the extent the
--------------------
Borrower makes a payment or payments to or for the account of the Administrative
Agent, the Issuing Lender or any Lender, which payment or payments or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside or required to be repaid to a trustee, receiver or any other party
under any bankruptcy, insolvency or similar state or federal law, common law or
equitable cause, then, to the extent of such payment or repayment, the
Obligation intended to be satisfied shall be revived and continued in full force
and effect as if such payment had not been received.
(b) If any amounts distributed by the Administrative Agent to any Lender
are subsequently returned or repaid by the Administrative Agent to the Borrower
or its representative or successor in interest, whether by court order or by
settlement approved by the Lender in question, such Lender will, promptly upon
receipt of notice thereof from the Administrative Agent, pay the Administrative
Agent such amount. If any such amounts are recovered by the Administrative
Agent from the Borrower or its representative or successor in interest, the
Administrative Agent will redistribute such amounts to the Lenders on the same
basis as such amounts were originally distributed.
2.14 Use of Proceeds. The proceeds of the Term Loans shall be used solely
---------------
(i) to purchase the Existing Subordinated Notes tendered pursuant to the
Subordinated Note Offer, (ii) to repay the Existing Senior Indebtedness in full,
(iii) to pay or reimburse reasonable transaction fees and expenses in connection
with the foregoing and in connection with the consummation of the transactions
contemplated hereby, and (iv) for general corporate purposes. The proceeds of
the Revolving Loans shall be used solely for working capital and general
corporate purposes (including, at the Borrower's option, to repay or prepay the
Term Loans) and to finance Permitted Acquisitions in accordance with the terms
and provisions of this Agreement, including, without limitation, the provisions
set forth in SECTION 6.8.
2.15 Pro Rata Treatment; Sharing of Payments. (a) Except in the case of
---------------------------------------
Swingline Loans, all fundings, continuations and conversions of Loans of any
Class shall be made by the Lenders pro rata on the basis of their respective
Commitments to provide Loans of such Class (in the case of the initial funding
of Loans of such Class pursuant to SECTION 2.2) or on the basis of their
respective outstanding Loans of such Class (in the case of continuations and
conversions of Loans of such Class pursuant to SECTION 2.11, and additionally in
all cases in the event the Commitments have expired or have been terminated), as
the case may be from time to time. All payments on account of principal of,
interest on or premium, if any, with respect to any Loans, fees or any other
Obligations owing to or for the account of any one or more Lenders shall be
apportioned ratably among such Lenders in
36
proportion to the amounts of such principal, interest, premium, fees or other
Obligations owed to them respectively.
(b) Each Lender agrees that if it shall receive any amount hereunder
(whether by voluntary payment, realization upon security, exercise of the right
of setoff or banker's lien, counterclaim or cross action, or otherwise, other
than pursuant to SECTION 11.7 or SECTION 2.20) applicable to the payment of any
of the Obligations that exceeds its ratable share (according to the proportion
of (i) the amount of such Obligations due and payable to such Lender at such
time to (ii) the aggregate amount of such Obligations due and payable to all
Lenders at such time) of payments on account of such Obligations then or
therewith obtained by all the Lenders to which such payments are required to
have been made, such Lender shall forthwith purchase from the other Lenders such
participations in such Obligations as shall be necessary to cause such
purchasing Lender to share the excess payment or other recovery ratably with
each of them; provided, however, that if all or any portion of such excess
-------- -------
payment is thereafter recovered from such purchasing Lender, such purchase from
each such other Lender shall be rescinded and each such other Lender shall repay
to the purchasing Lender the purchase price to the extent of such recovery,
together with an amount equal to such other Lender's ratable share (according to
the proportion of (i) the amount of such other Lender's required repayment to
(ii) the total amount so recovered from the purchasing Lender) of any interest
or other amount paid or payable by the purchasing Lender in respect of the total
amount so recovered. The Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to the provisions of this subsection
may, to the fullest extent permitted by law, exercise any and all rights of
payment (including, without limitation, setoff, banker's lien or counterclaim)
with respect to such participation as fully as if such participant were a direct
creditor of the Borrower in the amount of such participation. If under any
applicable bankruptcy, insolvency or similar law, any Lender receives a secured
claim in lieu of a setoff to which this subsection applies, such Lender shall,
to the extent practicable, exercise its rights in respect of such secured claim
in a manner consistent with the rights of the Lenders entitled under this
subsection to share in the benefits of any recovery on such secured claim.
2.16 Increased Costs; Change in Circumstances; Illegality; etc. (a) If,
----------------------------------------------------------
at any time after the date hereof and from time to time, the introduction of or
any change after the date hereof in any applicable law, rule or regulation or in
the interpretation or administration thereof by any Governmental Authority
charged with the interpretation or administration thereof, or compliance by any
Lender with any guideline or request from any such Governmental Authority
(whether or not having the force of law), shall (i) subject such Lender to any
tax or other charge, or change the basis of taxation of payments to such Lender,
in respect of any of its LIBOR Loans or any other amounts payable hereunder or
its obligation to make, fund or maintain any LIBOR Loans (other than taxes on
the overall net income of such Lender or its applicable Lending Office or any
change in the rate or basis thereof), (ii) impose, modify or deem applicable any
reserve, special deposit or similar requirement (other than as a result of any
change in the Reserve Requirement) against assets of, deposits with or for the
account of, or credit extended by, such Lender or its applicable Lending Office,
or (iii) impose on such Lender or its applicable Lending Office any other
condition, and the result of any of the foregoing shall be to increase the cost
to such Lender of making or maintaining any LIBOR Loans or issuing or
participating in Letters of Credit or to reduce the amount of any sum received
or receivable by such Lender hereunder (including in respect of Letters of
Credit), the Borrower will, promptly upon demand therefor by such Lender, pay to
such Lender such additional amounts as shall compensate such Lender for such
increase in costs or reduction in return.
37
(b) If, at any time after the date hereof and from time to time, any
Lender shall have reasonably determined that the introduction of or any change
after the date hereof in any applicable law, rule or regulation regarding
capital adequacy or in the interpretation or administration thereof by any
Governmental Authority charged with the interpretation or administration
thereof, or compliance by such Lender with any guideline or request from any
such Governmental Authority (whether or not having the force of law), has or
would have the effect, as a consequence of such Lender's Commitments, Loans or
issuance of or participations in Letters of Credit hereunder, of reducing the
rate of return on the capital of such Lender or any Person controlling such
Lender to a level below that which such Lender or controlling Person could have
achieved but for such introduction, change or compliance (taking into account
such Lender's or controlling Person's policies with respect to capital
adequacy), the Borrower will, promptly upon demand therefor by such Lender
therefor, pay to such Lender such additional amounts as will compensate such
Lender or controlling Person for such reduction in return.
(c) If, on or prior to the first day of any Interest Period, (y) the
Administrative Agent shall have determined that adequate and reasonable means do
not exist for ascertaining the applicable LIBOR Rate for such Interest Period or
(z) the Administrative Agent shall have received written notice from the
Required Lenders of their determination that the rate of interest referred to in
the definition of "LIBOR Rate" upon the basis of which the Adjusted LIBOR Rate
for LIBOR Loans for such Interest Period is to be determined will not adequately
and fairly reflect the cost to such Lenders of making or maintaining LIBOR Loans
during such Interest Period, the Administrative Agent will forthwith so notify
the Borrower and the Lenders. Upon such notice, (i) all then outstanding LIBOR
Loans shall automatically, on the expiration date of the respective Interest
Periods applicable thereto (unless then repaid in full), be converted into ABR
Loans, (ii) the obligation of the Lenders to make, to convert ABR Loans into, or
to continue, LIBOR Loans shall be suspended (including pursuant to the Borrowing
to which such Interest Period applies), and (iii) any Notice of Borrowing or
Notice of Conversion/Continuation given at any time thereafter with respect to
LIBOR Loans shall be deemed to be a request for ABR Loans, in each case until
the Administrative Agent or the Required Lenders, as the case may be, shall have
determined that the circumstances giving rise to such suspension no longer exist
(and the Required Lenders, if making such determination, shall have so notified
the Administrative Agent), and the Administrative Agent shall have so notified
the Borrower and the Lenders.
(d) Notwithstanding any other provision in this Agreement, if, at any time
after the date hereof and from time to time, any Lender shall have determined in
good faith that the introduction of or any change in any applicable law, rule or
regulation or in the interpretation or administration thereof by any
Governmental Authority charged with the interpretation or administration
thereof, or compliance with any guideline or request from any such Governmental
Authority (whether or not having the force of law), has or would have the effect
of making it unlawful for such Lender to make or to continue to make or maintain
LIBOR Loans, such Lender will forthwith so notify the Administrative Agent and
the Borrower. Upon such notice, (i) each of such Lender's then outstanding
LIBOR Loans shall automatically, on the expiration date of the respective
Interest Period applicable thereto (or, to the extent any such LIBOR Loan may
not lawfully be maintained as a LIBOR Loan until such expiration date, upon such
notice), be converted into an ABR Loan, (ii) the obligation of such Lender to
make, to convert ABR Loans into, or to continue, LIBOR Loans shall be suspended
(including pursuant to any Borrowing for which the Administrative Agent has
received a Notice of Borrowing but for which the Borrowing Date has not
arrived), and (iii) any Notice of Borrowing or Notice of Conversion/Continuation
given at any time thereafter with respect to LIBOR Loans shall, as to such
Lender, be deemed to be a request for an ABR Loan, in each case until such
Lender shall have
38
determined that the circumstances giving rise to such suspension no longer exist
and shall have so notified the Administrative Agent, and the Administrative
Agent shall have so notified the Borrower.
(e) Determinations by the Administrative Agent or any Lender for purposes
of this SECTION 2.16 of any increased costs, reduction in return, market
contingencies, illegality or any other matter shall, absent manifest error, be
conclusive, provided that such determinations are made in good faith. No
--------
failure by the Administrative Agent or any Lender at any time to demand payment
of any amounts payable under this SECTION 2.16 shall constitute a waiver of its
right to demand payment of any additional amounts arising at any subsequent
time. Nothing in this SECTION 2.16 shall require or be construed to require the
Borrower to pay any interest, fees, costs or other amounts in excess of that
permitted by applicable law.
2.17 Taxes. (a) Any and all payments by the Borrower hereunder or under
-----
any Note shall be made, in accordance with the terms hereof and thereof, free
and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, other than net income and franchise taxes imposed on the
Administrative Agent or any Lender by the United States or by the jurisdiction
under the laws of which the Administrative Agent or such Lender, as the case may
be, is organized or in which its principal office or (in the case of a Lender)
its applicable Lending Office is located, or any political subdivision or taxing
authority thereof (all such nonexcluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as "Taxes").
If the Borrower shall be required by law to deduct any Taxes from or in respect
of any sum payable hereunder or under any Note to the Administrative Agent or
any Lender, (i) the sum payable shall be increased as may be necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this SECTION 2.17), the Administrative Agent or
such Lender, as the case may be, receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower will make such
deductions, (iii) the Borrower will pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law and (iv)
the Borrower will deliver to the Administrative Agent or such Lender, as the
case may be, evidence of such payment.
(b) The Borrower will indemnify the Administrative Agent and each Lender
for the full amount of Taxes (including, without limitation, any Taxes imposed
by any jurisdiction on amounts payable under this SECTION 2.17) paid by the
Administrative Agent or such Lender, as the case may be, and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto, whether or not such Taxes were correctly or legally asserted; provided
--------
that if the Borrower reasonably believes that such Taxes were not correctly or
legally asserted, the Administrative Agent or such Lender, as the case may be,
will use reasonable efforts to cooperate with the Borrower to obtain a refund of
such Taxes so long as such efforts would not, in the sole determination of the
Administrative Agent or such Lender, as the case may be, result in any
additional costs, expenses or risks or be otherwise disadvantageous to it. This
indemnification shall be made within 30 days from the date the Administrative
Agent or such Lender, as the case may be, makes written demand therefor.
(c) Each of the Administrative Agent and the Lenders agrees that if it
subsequently recovers, or receives a permanent net tax benefit with respect to,
any amount of Taxes (i) previously paid by it and as to which it has been
indemnified by or on behalf of the Borrower or (ii) previously deducted by the
Borrower (including, without limitation, any Taxes deducted from any additional
sums payable under clause (i) of subsection (a) above), the Administrative Agent
or such Lender, as the case may be, shall reimburse the Borrower to the extent
of the amount of any such recovery or permanent
39
net tax benefit (but only to the extent of indemnity payments made, or
additional amounts paid, by or on behalf of the Borrower under this SECTION 2.17
with respect to the Taxes giving rise to such recovery or tax benefit);
provided, however, that the Borrower, upon the request of the Administrative
-------- -------
Agent or such Lender, agrees to repay to the Administrative Agent or such
Lender, as the case may be, the amount paid over to the Borrower (together with
any penalties, interest or other charges), in the event the Administrative Agent
or such Lender is required to repay such amount to the relevant taxing authority
or other Governmental Authority. The determination by the Administrative Agent
or any Lender of the amount of any such recovery or permanent net tax benefit
shall, in the absence of manifest error, be conclusive and binding.
(d) If any Lender is incorporated or organized under the laws of a
jurisdiction other than the United States of America or any state thereof (a
"Non-U.S. Lender") and claims exemption from United States withholding tax
pursuant to the Internal Revenue Code, such Non-U.S. Lender will deliver to each
of the Administrative Agent and the Borrower, on or prior to the Closing Date
(or, in the case of a Non-U.S. Lender that becomes a party to this Agreement as
a result of an assignment after the Closing Date, on the effective date of such
assignment), (i) in the case of a Non-U.S. Lender that is a "bank" for purposes
of Section 881(c)(3)(A) of the Internal Revenue Code, a properly completed
Internal Revenue Service Form 4224 or 1001, as applicable (or successor forms),
certifying that such Non-U.S. Lender is entitled to an exemption from or a
reduction of withholding or deduction for or on account of United States federal
income taxes in connection with payments under this Agreement or any of the
Notes, together with a properly completed Internal Revenue Service Form W-8 or
W-9, as applicable (or successor forms), and (ii) in the case of a Non-U.S.
Lender that is not a "bank" for purposes of Section 881(c)(3)(A) of the Internal
Revenue Code, a certificate in form and substance reasonably satisfactory to the
Administrative Agent and the Borrower and to the effect that (x) such Non-U.S.
Lender is not a "bank" for purposes of Section 881(c)(3)(A) of the Internal
Revenue Code, is not subject to regulatory or other legal requirements as a bank
in any jurisdiction, and has not been treated as a bank for purposes of any tax,
securities law or other filing or submission made to any governmental authority,
any application made to a rating agency or qualification for any exemption from
any tax, securities law or other legal requirements, (y) is not a 10-percent
shareholder for purposes of Section 881(c)(3)(B) of the Internal Revenue Code
and (z) is not a controlled foreign corporation receiving interest from a
related person for purposes of Section 881(c)(3)(C) of the Internal Revenue
Code, together with a properly completed Internal Revenue Service Form W-8 or W-
9, as applicable (or successor forms). Each such Non-U.S. Lender further agrees
to deliver to each of the Administrative Agent and the Borrower an additional
copy of each such relevant form on or before the date that such form expires or
becomes obsolete or after the occurrence of any event (including a change in its
applicable Lending Office) requiring a change in the most recent forms so
delivered by it, in each case certifying that such Non-U.S. Lender is entitled
to an exemption from or a reduction of withholding or deduction for or on
account of United States federal income taxes in connection with payments under
this Agreement or any of the Notes, unless an event (including, without
limitation, any change in treaty, law or regulation) has occurred prior to the
date on which any such delivery would otherwise be required, which event renders
all such forms inapplicable or the exemption to which such forms relate
unavailable and such Non-U.S. Lender notifies the Administrative Agent and the
Borrower that it is not entitled to receive payments without deduction or
withholding of United States federal income taxes. Each such Non-U.S. Lender
will promptly notify the Administrative Agent and the Borrower of any changes in
circumstances that would modify or render invalid any claimed exemption or
reduction.
(e) If any Lender is entitled to a reduction in (and not a complete
exemption from) the applicable withholding tax, the Borrower and the
Administrative Agent may withhold from any interest
40
payment to such Lender an amount equivalent to the applicable withholding tax
after taking into account such reduction. If any of the forms or other
documentation required under subsection (d) above are not delivered to the
Administrative Agent as therein required, then the Borrower and the
Administrative Agent may withhold from any interest payment to such Lender not
providing such forms or other documentation an amount equivalent to the
applicable withholding tax.
2.18 Compensation. The Borrower will compensate each Lender upon demand
------------
for all losses, expenses and liabilities (including, without limitation, any
loss, expense or liability incurred by reason of the liquidation or reemployment
of deposits or other funds required by such Lender to fund or maintain LIBOR
Loans) that such Lender may incur or sustain (i) if for any reason (other than a
default by such Lender) a borrowing or continuation of, or conversion into, a
LIBOR Loan does not occur on a date specified therefor in a Notice of Borrowing
or Notice of Conversion/Continuation, (ii) if any repayment, prepayment or
conversion of any LIBOR Loan occurs on a date other than the last day of an
Interest Period applicable thereto (including as a consequence of acceleration
of the maturity of the Loans pursuant to SECTION 9.2), (iii) if any prepayment
of any LIBOR Loan is not made on any date specified in a notice of prepayment
given by the Borrower or (iv) as a consequence of any other failure by the
Borrower to make any payments with respect to any LIBOR Loan when due hereunder.
Calculation of all amounts payable to a Lender under this SECTION 2.18 shall be
made as though such Lender had actually funded its relevant LIBOR Loan through
the purchase of a Eurodollar deposit bearing interest at the LIBOR Rate in an
amount equal to the amount of such LIBOR Loan, having a maturity comparable to
the relevant Interest Period; provided, however, that each Lender may fund its
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LIBOR Loans in any manner it sees fit and the foregoing assumption shall be
utilized only for the calculation of amounts payable under this SECTION 2.18.
Determinations by any Lender for purposes of this SECTION 2.18 of any such
losses, expenses or liabilities shall, absent manifest error, be conclusive,
provided that such determinations are made in good faith.
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2.19 Duty to Mitigate. Any of the Administrative Agent or any Lender
----------------
claiming any additional amounts payable pursuant to SECTION 2.16(a), SECTION
2.16(b) or SECTION 2.17 or exercising its rights under SECTION 2.16(d) shall use
reasonable efforts (consistent with legal and regulatory restrictions) to file
any certificate or document reasonably requested by the Borrower or to change
the jurisdiction of its applicable Lending Office if the making of such filing
or change would avoid the need for or reduce the amount of any such additional
amounts that may thereafter accrue or avoid the circumstances giving rise to
such exercise and would not, in the sole determination of the Administrative
Agent or such Lender, as the case may be, result in any additional costs,
expenses or risks or be otherwise disadvantageous to it. Each of the
Administrative Agent and each Lender agrees to use reasonable efforts to notify
the Borrower as promptly as practicable upon its becoming aware that
circumstances exist that would cause the Borrower to become obligated to pay
additional amounts to the Administrative Agent or such Lender pursuant to
SECTION 2.16(a), SECTION 2.16(b) or SECTION 2.17 or that would entitle such
Lender to exercise its rights under SECTION 2.16(d).
2.20 Replacement of Lenders. The Borrower may, at any time and so long as
----------------------
no Default or Event of Default has then occurred and is continuing, replace any
Lender that has requested additional amounts from the Borrower under SECTION
2.16(a), SECTION 2.16(b) or SECTION 2.17 or the obligation of which to make or
maintain LIBOR Loans has been suspended under SECTION 2.16(d), in either case by
written notice to such Lender and the Administrative Agent given not more than
thirty (30) days after any such event and identifying one or more Persons each
of which shall be reasonably acceptable to the Administrative Agent (each, a
"Replacement Lender," and collectively, the "Replacement Lenders") to replace
such Lender (the "Replaced Lender"), provided that (i) the notice from the
--------
Borrower to the Replaced Lender and the Administrative Agent provided for
hereinabove shall specify
41
an effective date for such replacement (the "Replacement Effective Date"), which
shall be at least five (5) Business Days after such notice is given, (ii) as of
the relevant Replacement Effective Date, each Replacement Lender shall enter
into an Assignment and Acceptance with the Replaced Lender pursuant to SECTION
11.7(a) (but shall not be required to pay the processing fee otherwise payable
to the Administrative Agent pursuant to SECTION 11.7(a)), pursuant to which such
Replacement Lenders collectively shall acquire, in such proportion among them as
they may agree with the Borrower and the Administrative Agent, all (but not less
than all) of the Commitments and outstanding Loans of the Replaced Lender, and,
in connection therewith, shall pay to the Replaced Lender, as the purchase price
in respect thereof, an amount equal to the sum as of the Replacement Effective
Date (without duplication) of (y) the unpaid principal amount of, and all
accrued but unpaid interest on, all outstanding Loans of the Replaced Lender and
(z) the Replaced Lender's ratable share of all accrued but unpaid fees owing to
the Replaced Lender hereunder, and (iii) all other obligations of the Borrower
owing to the Replaced Lender under this Agreement (other than those specifically
described in clause (ii) above in respect of which the assignment purchase price
has been, or is concurrently being, paid), including, without limitation,
amounts payable under SECTION 2.18 as a result of the actions required to be
taken under this SECTION 2.20, shall be paid in full by the Borrower to the
Replaced Lender on or prior to the Replacement Effective Date.
ARTICLE III
LETTERS OF CREDIT
3.1 Issuance. Subject to and upon the terms and conditions herein set
--------
forth, so long as no Default or Event of Default has occurred and is continuing,
the Issuing Lender will, at any time and from time to time on and after the
Closing Date and prior to the earlier of (i) the seventh day prior to the
Revolving Credit Maturity Date and (ii) the Revolving Credit Termination Date,
and upon request by the Borrower in accordance with the provisions of SECTION
3.3, issue for the account of the Borrower one or more irrevocable standby
letters of credit denominated in Dollars and in a form customarily used or
otherwise approved by the Issuing Lender, and on the Closing Date the Issuing
Lender shall be deemed to have issued the Outstanding Letter of Credit (together
with all amendments, modifications and supplements thereto, substitutions
therefor and renewals and restatements thereof, collectively, the "Letters of
Credit"). The Stated Amount of each Letter of Credit shall not be less than such
amount as may be acceptable to the Issuing Lender. Notwithstanding the
foregoing:
(a) No Letter of Credit shall be issued the Stated Amount upon issuance of
which (i) when added to the aggregate Letter of Credit Exposure of the Revolving
Credit Lenders at such time, would exceed $10,000,000 or (ii) when added to the
sum of (x) the aggregate Letter of Credit Exposure of all Revolving Credit
Lenders at such time, (y) the aggregate principal amount of all Revolving Loans
then outstanding and (z) the aggregate principal amount of all Swingline Loans
then outstanding, would exceed the aggregate Revolving Credit Commitments at
such time;
(b) Unless the Issuing Lender otherwise agrees, there shall not be more
than five (5) Letters of Credit issued and outstanding at any time;
(c) No Letter of Credit shall be issued that by its terms expires later
than the seventh day prior to the Revolving Credit Maturity Date or, in any
event, more than one (1) year after its date of issuance; provided, however,
-------- -------
that a Letter of Credit may, if requested by the Borrower, provide by its terms,
and on terms acceptable to the Issuing Lender, for renewal for successive
periods of one year or
42
less (but not beyond the seventh day prior to the Revolving Credit Maturity
Date), unless and until the Issuing Lender shall have delivered a notice of
nonrenewal to the beneficiary of such Letter of Credit; and
(d) The Issuing Lender shall be under no obligation to issue any Letter of
Credit if, at the time of such proposed issuance, (i) any order, judgment or
decree of any Governmental Authority or arbitrator shall purport by its terms to
enjoin or restrain the Issuing Lender from issuing such Letter of Credit, or any
Requirement of Law applicable to the Issuing Lender or any request or directive
(whether or not having the force of law) from any Governmental Authority with
jurisdiction over the Issuing Lender shall prohibit, or request that the Issuing
Lender refrain from, the issuance of letters of credit generally or such Letter
of Credit in particular or shall impose upon the Issuing Lender with respect to
such Letter of Credit any restriction or reserve or capital requirement (for
which the Issuing Lender is not otherwise compensated) not in effect on the
Closing Date, or any unreimbursed loss, cost or expense that was not applicable,
in effect or known to the Issuing Lender as of the Closing Date and that the
Issuing Lender in good ▇▇▇▇▇ ▇▇▇▇▇ material to it, or (ii) the Issuing Lender
shall have actual knowledge, or shall have received notice from any Lender,
prior to the issuance of such Letter of Credit that one or more of the
conditions specified in SECTIONS 4.1 (if applicable) or 4.2 are not then
satisfied (or have not been waived in writing as required herein) or that the
issuance of such Letter of Credit would violate the provisions of subsection (a)
above.
3.2 Outstanding Letter of Credit. The parties hereto agree that the
----------------------------
Outstanding Letter of Credit will be treated as if it had been originally issued
under this Agreement, and as of the Closing Date the Outstanding Letter of
Credit shall be deemed to be a Letter of Credit for all purposes hereunder and
under the other Credit Documents. Specifically, and without limitation of the
foregoing or the other provisions of this Article, (i) the Stated Amount of the
Outstanding Letter of Credit, for so long as the same shall be outstanding,
shall be included in calculating (y) the limit set forth in clause (i) of
SECTION 3.1(a) and (z) the aggregate Letter of Credit Exposure, (ii) each Lender
hereby absolutely and unconditionally agrees to pay to the Issuing Lender, in
accordance with SECTION 3.6, such Lender's pro rata share of each payment made
by the Issuing Lender under the Outstanding Letter of Credit, together with
interest in accordance with SECTION 3.6, and (iii) with respect to the
Outstanding Letter of Credit, the Issuing Lender shall have the benefit of all
agreements, covenants and indemnities of the Issuing Lender set forth in this
Agreement and shall comply with all agreements and obligations set forth herein
that bind the Issuing Lender, insofar as the same apply to Letters of Credit
generally.
3.3 Notices. Whenever the Borrower desires the issuance of a Letter of
-------
Credit (other than the Outstanding Letter of Credit), the Borrower will give the
Issuing Lender written notice (or oral notice promptly confirmed in writing)
with a copy to the Administrative Agent not later than 1:00 p.m., Charlotte
time, three (3) Business Days (or such shorter period as is acceptable to the
Issuing Lender in any given case) prior to the requested date of issuance
thereof. Each such notice (each, a "Letter of Credit Notice") shall be
irrevocable, shall be given in the form of EXHIBIT E (or, if oral notice is
given, shall be promptly followed with a writing in the form of EXHIBIT E) and
shall specify (i) the requested date of issuance, which shall be a Business Day,
(ii) the requested Stated Amount and expiry date of the Letter of Credit, and
(iii) the name and address of the requested beneficiary or beneficiaries of the
Letter of Credit. The Borrower will also complete any application procedures and
documents required by the Issuing Lender in connection with the issuance of any
Letter of Credit. Upon its issuance of any Letter of Credit, the Issuing Lender
will promptly notify the Administrative Agent of such issuance, and the
Administrative Agent will give prompt notice thereof to each Revolving Credit
Lender.
43
3.4 Participations. Immediately upon the issuance of any Letter of
--------------
Credit, the Issuing Lender shall be deemed to have sold and transferred to each
Revolving Credit Lender, and each Revolving Credit Lender shall be deemed
irrevocably and unconditionally to have purchased and received from the Issuing
Lender, without recourse or warranty, an undivided interest and participation,
pro rata (based on the percentage of the aggregate Revolving Credit Commitments
represented by such Lender's Revolving Credit Commitment), in such Letter of
Credit, each drawing made thereunder and the obligations of the Borrower under
this Agreement with respect thereto and any Collateral or other security
therefor or guaranty pertaining thereto; provided, however, that the fee
-------- -------
relating to Letters of Credit described in SECTION 2.9(d) shall be payable
directly to the Issuing Lender as provided therein, and the Lenders shall have
no right to receive any portion thereof. Upon any change in the Revolving Credit
Commitments of any of the Lenders pursuant to SECTION 11.7(a), with respect to
all outstanding Letters of Credit and Reimbursement Obligations there shall be
an automatic adjustment to the participations pursuant to this Section to
reflect the new pro rata shares of the assigning Lender and the Assignee.
3.5 Reimbursement. The Borrower hereby agrees to reimburse the Issuing
-------------
Lender by making payment to the Administrative Agent, for the account of the
Issuing Lender, in immediately available funds, for any payment made by the
Issuing Lender under any Letter of Credit (each such amount so paid until
reimbursed, together with interest thereon payable as provided hereinbelow, a
"Reimbursement Obligation") immediately after, and in any event within one (1)
Business Day after its receipt of notice of, such payment (provided that any
--------
such Reimbursement Obligation shall be deemed timely satisfied (but nevertheless
subject to the payment of interest thereon as provided hereinbelow) if satisfied
pursuant to a Borrowing of Revolving Loans made on or prior to the next Business
Day following the date of the Borrower's receipt of notice of such payment),
together with interest on the amount so paid by the Issuing Lender, to the
extent not reimbursed prior to 1:00 p.m., Charlotte time, on the date of such
payment or disbursement, for the period from the date of the respective payment
to the date the Reimbursement Obligation created thereby is satisfied, at the
Adjusted Alternate Base Rate applicable to Revolving Loans as in effect from
time to time during such period, such interest also to be payable on demand. The
Issuing Lender will provide the Administrative Agent and the Borrower with
prompt notice of any payment or disbursement made under any Letter of Credit,
although the failure to give, or any delay in giving, any such notice shall not
release, diminish or otherwise affect the Borrower's obligations under this
Section or any other provision of this Agreement. The Administrative Agent will
promptly pay to the Issuing Lender any such amounts received by it under this
Section.
3.6 Payment by Revolving Loans. In the event that the Issuing Lender
--------------------------
makes any payment under any Letter of Credit and the Borrower shall not have
timely satisfied in full its Reimbursement Obligation to the Issuing Lender
pursuant to SECTION 3.5, and to the extent that any amounts then held in the
Cash Collateral Account established pursuant to SECTION 3.9 shall be
insufficient to satisfy such Reimbursement Obligation in full, the Issuing
Lender will promptly notify the Administrative Agent, and the Administrative
Agent will promptly notify each Revolving Credit Lender, of such failure. If the
Administrative Agent gives such notice prior to 11:00 a.m., Charlotte time, on
any Business Day, each Lender will make available to the Administrative Agent,
for the account of the Issuing Lender, its pro rata share (based on the
percentage of the aggregate Revolving Credit Commitments represented by such
Lender's Revolving Credit Commitment) of the amount of such payment on such
Business Day in immediately available funds. If the Administrative Agent gives
such notice after 11:00 a.m., Charlotte time, on any Business Day, each such
Lender shall make its pro rata share of such amount available to the
Administrative Agent on the next succeeding Business Day. If and to the extent
any Revolving
44
Credit Lender shall not have so made its pro rata share of the amount of such
payment available to the Administrative Agent, such Lender agrees to pay to the
Administrative Agent, for the account of the Issuing Lender, forthwith on demand
such amount, together with interest thereon at the Federal Funds Rate for each
day from such date until the date such amount is paid to the Administrative
Agent. The failure of any Revolving Credit Lender to make available to the
Administrative Agent its pro rata share of any payment under any Letter of
Credit shall not relieve any other Revolving Credit Lender of its obligation
hereunder to make available to the Administrative Agent its pro rata share of
any payment under any Letter of Credit on the date required, as specified above,
but no Revolving Credit Lender shall be responsible for the failure of any other
Revolving Credit Lender to make available to the Administrative Agent such other
Lender's pro rata share of any such payment. Each such payment by a Revolving
Credit Lender under this SECTION 3.6 of its pro rata share of an amount paid by
the Issuing Lender shall constitute a Revolving Loan by such Revolving Credit
Lender (the Borrower being deemed to have given a timely Notice of Borrowing
therefor) and shall be treated as such for all purposes of this Agreement;
provided that for purposes of determining the aggregate Unutilized Revolving
--------
Credit Commitments immediately prior to giving effect to the application of the
proceeds of such Revolving Loans, the Reimbursement Obligation being satisfied
thereby shall be deemed not to be outstanding at such time.
3.7 Payment to Lenders. Whenever the Issuing Lender receives a payment in
------------------
respect of a Reimbursement Obligation as to which the Administrative Agent has
received, for the account of the Issuing Lender, any payments from the Revolving
Credit Lenders pursuant to SECTION 3.6, the Issuing Lender will promptly pay to
the Administrative Agent, and the Administrative Agent will promptly pay to each
Revolving Credit Lender that has paid its pro rata share thereof, in immediately
available funds, an amount equal to such Revolving Credit Lender's ratable share
(based on the proportionate amount funded by such Lender to the aggregate amount
funded by all Revolving Credit Lenders) of such Reimbursement Obligation.
3.8 Obligations Absolute. The Reimbursement Obligations of the Borrower,
--------------------
and the obligations of the Revolving Credit Lenders under SECTION 3.6 to make
payments to the Administrative Agent, for the account of the Issuing Lender,
with respect to Letters of Credit, shall be irrevocable, shall remain in effect
until the Issuing Lender shall have no further obligations to make any payments
or disbursements under any circumstances with respect to any Letter of Credit,
and, except to the extent resulting from any gross negligence or willful
misconduct on the part of the Issuing Lender, shall be absolute and
unconditional, shall not be subject to counterclaim, setoff or other defense or
any other qualification or exception whatsoever and shall be made in accordance
with the terms and conditions of this Agreement under all circumstances,
including, without limitation, any of the following circumstances:
(a) Any lack of validity or enforceability of this Agreement, any of the
other Credit Documents or any documents or instruments relating to any Letter of
Credit;
(b) Any change in the time, manner or place of payment of, or in any other
term of, all or any of the Obligations in respect of any Letter of Credit or any
other amendment, modification or waiver of or any consent to departure from any
Letter of Credit or any documents or instruments relating thereto, in each case
whether or not the Borrower has notice or knowledge thereof;
(c) The existence of any claim, setoff, defense or other right that the
Borrower may have at any time against a beneficiary named in a Letter of Credit,
any transferee of any Letter of Credit (or any Person for whom any such
transferee may be acting), the Administrative Agent, the Issuing
45
Lender, any Lender or other Person, whether in connection with this Agreement,
any Letter of Credit, the transactions contemplated hereby or any unrelated
transactions (including any underlying transaction between the Borrower and the
beneficiary named in any such Letter of Credit);
(d) Any draft, certificate or any other document presented under the
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect
(provided that such draft, certificate or other document appears on its face to
--------
comply with the terms of such Letter of Credit), any errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
telecopier or otherwise, or any errors in translation or in interpretation of
technical terms;
(e) Any defense based upon the failure of any drawing under a Letter of
Credit to conform to the terms of the Letter of Credit (provided that any draft,
--------
certificate or other document presented pursuant to such Letter of Credit
appears on its face to comply with the terms thereof), any nonapplication or
misapplication by the beneficiary or any transferee of the proceeds of such
drawing or any other act or omission of such beneficiary or transferee in
connection with such Letter of Credit;
(f) The exchange, release, surrender or impairment of any Collateral or
other security for the Obligations;
(g) The occurrence of any Default or Event of Default; or
(h) Any other circumstance or event whatsoever, including, without
limitation, any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Borrower or a guarantor.
Any action taken or omitted to be taken by the Issuing Lender under or in
connection with any Letter of Credit, if taken or omitted in the absence of
gross negligence or willful misconduct, shall be binding upon the Borrower and
each Lender and shall not create or result in any liability of the Issuing
Lender to the Borrower or any Lender. It is expressly understood and agreed
that, for purposes of determining whether a wrongful payment under a Letter of
Credit resulted from the Issuing Lender's gross negligence or willful
misconduct, (i) the Issuing Lender's acceptance of documents that appear on
their face to comply with the terms of such Letter of Credit, without
responsibility for further investigation, regardless of any notice or
information to the contrary (so long as such documents appear on their face to
comply with the terms of such Letter of Credit), (ii) the Issuing Lender's
exclusive reliance on the documents presented to it under such Letter of Credit
as to any and all matters set forth therein, including the amount of any draft
presented under such Letter of Credit, whether or not the amount due to the
beneficiary thereunder equals the amount of such draft and whether or not any
document presented pursuant to such Letter of Credit proves to be insufficient
in any respect (so long as such document appears on its face to comply with the
terms of such Letter of Credit), and whether or not any other statement or any
other document presented pursuant to such Letter of Credit proves to be forged
or invalid or any statement therein proves to be inaccurate or untrue in any
respect whatsoever, and (iii) any noncompliance in any immaterial respect of the
documents presented under such Letter of Credit with the terms thereof shall, in
each case, be deemed not to constitute gross negligence or willful misconduct of
the Issuing Lender.
3.9 Cash Collateral Account. At any time and from time to time (i) after
-----------------------
the occurrence and during the continuance of an Event of Default, the
Administrative Agent, at the direction or with the consent of the Required
Lenders, may require the Borrower to deliver to the Administrative Agent
46
such additional amount of cash as is equal to the aggregate Stated Amount of all
Letters of Credit at any time outstanding (whether or not any beneficiary under
any Letter of Credit shall have drawn or be entitled at such time to draw
thereunder) and (ii) in the event of a prepayment under SECTION 2.6(c), or to
the extent any amount of a required prepayment under any of SECTIONS 2.6(d) or
2.6(e) remains after prepayment of all outstanding Loans and Reimbursement
Obligations and termination of the Commitments, as contemplated by SECTION
2.6(f), the Administrative Agent will retain such amount as may then be required
to be retained, such amounts in each case under clauses (i) and (ii) above to be
held by the Administrative Agent in a cash collateral account (the "Cash
Collateral Account"). The Borrower hereby grants to the Administrative Agent,
for the benefit of the Issuing Lender and the Revolving Credit Lenders, a Lien
upon and security interest in the Cash Collateral Account and all amounts held
therein from time to time as security for Letter of Credit Exposure, and for
application to the Borrower's Reimbursement Obligations as and when the same
shall arise. The Administrative Agent shall have exclusive dominion and control,
including the exclusive right of withdrawal, over such account. Other than any
interest on the investment of such amounts in Cash Equivalents, which
investments shall be made at the direction of the Borrower (unless a Default or
Event of Default shall have occurred and be continuing, in which case the
determination as to investments shall be made at the option and in the
discretion of the Administrative Agent), amounts in the Cash Collateral Account
shall not bear interest. Interest and profits, if any, on such investments shall
accumulate in such account. In the event of a drawing, and subsequent payment by
the Issuing Lender, under any Letter of Credit at any time during which any
amounts are held in the Cash Collateral Account, the Administrative Agent will
deliver to the Issuing Lender an amount equal to the Reimbursement Obligation
created as a result of such payment (or, if the amounts so held are less than
such Reimbursement Obligation, all of such amounts) to reimburse the Issuing
Lender therefor. Any amounts remaining in the Cash Collateral Account after the
expiration of all Letters of Credit and reimbursement in full of the Issuing
Lender for all of its obligations thereunder shall be held by the Administrative
Agent, for the benefit of the Borrower, to be applied against the Obligations in
such order and manner as the Administrative Agent may direct. If the Borrower is
required to provide cash collateral pursuant to SECTION 2.6(c), such amount (to
the extent not applied as aforesaid) shall be returned to the Borrower on
demand, provided that after giving effect to such return (i) the sum of (x) the
--------
aggregate principal amount of all Revolving Loans outstanding at such time, (y)
the aggregate principal amount of all Swingline Loans outstanding at such time
and (z) the aggregate Letter of Credit Exposure of all Revolving Credit Lenders
at such time would not exceed the aggregate Revolving Credit Commitments at such
time and (ii) no Default or Event of Default shall have occurred and be
continuing at such time. If the Borrower is required to provide cash collateral
as a result of an Event of Default, such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower within three (3) Business Days
after all Events of Default have been cured or waived.
3.10 Effectiveness. Notwithstanding any termination of the Revolving
-------------
Credit Commitments or repayment of the Loans, or both, the obligations of the
Borrower under this ARTICLE III shall remain in full force and effect until the
Issuing Lender and the Lenders shall have no further obligations to make any
payments or disbursements under any circumstances with respect to any Letter of
Credit.
47
ARTICLE IV
CONDITIONS OF BORROWING
4.1 Conditions of Initial Borrowing. The obligation of each Lender to make
-------------------------------
Loans in connection with the initial Borrowing hereunder, and the obligation of
the Issuing Lender to issue Letters of Credit hereunder on the Closing Date, is
subject to the satisfaction of the following conditions precedent:
(a) The Administrative Agent shall have received the following, each dated
as of the Closing Date (unless otherwise specified) and, except for the Notes
and any certificates or instruments required to be delivered under the Borrower
Pledge and Security Agreement and the Parent Pledge and Security Agreement, in
sufficient copies for each Lender:
(i) (A) a Term Note for each Term Loan Lender that is a party
hereto as of the Closing Date, in the amount of such Lender's Term Loan
Commitment, (B) a Revolving Credit Note for each Revolving Credit Lender
that is a party hereto as of the Closing Date, in the amount of such
Lender's Revolving Credit Commitment, and (C) a Swingline Note for the
Swingline Lender, in the amount of the Swingline Commitment, in each case
duly completed in accordance with the relevant provisions of SECTION 2.4
and executed by the Borrower;
(ii) the Parent Guaranty, duly completed and executed by Parent;
(iii) the Borrower Pledge and Security Agreement, duly completed
and executed by the Borrower, and the Parent Pledge and Security Agreement,
duly completed and executed by Parent, in each case together with any
certificates evidencing the interests being pledged thereunder as of the
Closing Date and undated assignments separate from certificate for any such
certificate, duly executed in blank, and any promissory notes being pledged
thereunder, duly endorsed in blank (or, in the case of uncertificated
interests, appropriately completed and duly executed control agreements
with instructions for registration thereof); and
(iv) the favorable opinions of (A) ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, special
counsel to the Credit Parties, in substantially the form of EXHIBIT I-1,
and (B) ▇▇▇▇▇▇ ▇▇▇▇▇▇ White & ▇▇▇▇▇▇▇▇▇, special California counsel to the
Credit Parties, in substantially the form of EXHIBIT I-2, in each case
addressed to the Administrative Agent and the Lenders and addressing such
other matters as the Administrative Agent or any Lender may reasonably
request.
(b) The Administrative Agent shall have received a certificate, signed by
the president, the chief executive officer or the chief financial officer of
Parent, in form and substance satisfactory to the Administrative Agent,
certifying that (i) all representations and warranties of Parent and the
Borrower contained in this Agreement and the other Credit Documents are true and
correct as of the Closing Date, both immediately before and after giving effect
to the consummation of the Transactions, the initial Loans hereunder and the
application of the proceeds thereof, (ii) no Default or Event of Default has
occurred and is continuing, both immediately before and after giving effect to
the consummation of the Transactions, the initial Loans hereunder and the
application of the proceeds thereof, and (iii) both immediately before and after
giving effect to the consummation of the Transactions, the initial Loans
hereunder and the application of the proceeds thereof, no Material Adverse
Change has occurred since June 30, 1997, and there exists no event, condition or
state of facts that could reasonably be expected to result in a Material Adverse
Change.
48
(c) The Administrative Agent shall have received a certificate of the
secretary or an assistant secretary of the Borrower, in form and substance
satisfactory to the Administrative Agent, certifying (i) that attached thereto
is a true and complete copy of the articles of organization and all amendments
thereto of the Borrower, certified as of a recent date by the Secretary of State
of the State of Delaware, and that the same has not been amended since the date
of such certification, and (ii) that attached thereto is a true and complete
copy of the limited liability company operating agreement of the Borrower and
all amendments thereto, as then in effect, and as to the incumbency and
genuineness of the signature of each officer of the Borrower executing this
Agreement or any of the other Credit Documents on behalf of the Borrower, and
attaching all such copies of the documents described above.
(d) The Administrative Agent shall have received a certificate of the
secretary or an assistant secretary of Parent, in form and substance
satisfactory to the Administrative Agent, certifying (i) that attached thereto
is a true and complete copy of the certificate of incorporation and all
amendments thereto of Parent, certified as of a recent date by the Secretary of
State of the State of Delaware, and that the same has not been amended since the
date of such certification, (ii) that attached thereto is a true and complete
copy of the bylaws of Parent, as then in effect and as in effect at all times
from the date on which the resolutions referred to in clause (iii) below were
adopted to and including the date of such certificate and (iii) that attached
thereto is a true and complete copy of the resolutions adopted by the board of
directors of Parent (y) authorizing the execution, delivery and performance by
Parent of this Agreement and the other Credit Documents to which it is a party,
and (z) authorizing, in its capacity as the managing member of the Borrower, the
execution, delivery and performance by the Borrower of the Credit Documents to
which the Borrower is a party, and as to the incumbency and genuineness of the
signature of each officer of Parent executing any of such Credit Documents, and
attaching all such copies of the documents described above.
(e) The Administrative Agent shall have received (i) a certificate as
of a recent date of the good standing of each of the Borrower and Parent under
the laws of the State of Delaware, from the Secretary of State of Delaware, (ii)
a certificate as of a recent date of the qualification of Parent to conduct
business as a foreign corporation in the State of California, from the Secretary
of State of California, and (iii) certificates as of a recent date of the
qualification of the Borrower to conduct business as a foreign corporation in
the States of Illinois and California, from the Secretaries of State of Illinois
and California.
(f) All legal matters, documentation, and corporate or other
proceedings incident to the Transactions shall be satisfactory in form and
substance to the Administrative Agent and the Documentation Agent; all
approvals, permits and consents of any Governmental Authorities or other Persons
required in connection with the execution and delivery of this Agreement and the
other Credit Documents and the consummation of the Transactions shall have been
obtained (without the imposition of conditions that are not acceptable to the
Administrative Agent), and all related filings, if any, shall have been made,
and all such approvals, permits, consents and filings shall be in full force and
effect and the Administrative Agent shall have received such copies thereof as
it shall have requested; all applicable waiting periods shall have expired
without any adverse action being taken by any Governmental Authority having
jurisdiction; and no action, proceeding, investigation, regulation or
legislation shall have been instituted, threatened or proposed before, and no
order, injunction or decree shall have been entered by, any court or other
Governmental Authority, in each case to enjoin, restrain or prohibit, to obtain
substantial damages in respect of, or that is otherwise related to or arises out
of, this Agreement, any of the other Credit Documents or the consummation of the
Transactions, or that,
49
in the opinion of the Administrative Agent, could reasonably be expected to have
a Material Adverse Effect.
(g) The Administrative Agent shall have received evidence in form and
substance satisfactory to it that (i) the holders of not less than 100% of the
Existing Subordinated Notes shall have tendered the Existing Subordinated Notes
held by them in accordance with the terms of the Subordinated Note Offer, (ii)
the Subordinated Note Offer shall have been consummated in all material respects
in compliance with all applicable Requirements of Law, and (iii) the Existing
Subordinated Note Indenture and all of the Existing Subordinated Notes shall
have been canceled or terminated.
(h) All transaction fees and expenses payable by or on behalf of the
Borrower in connection with the Transactions shall be in an aggregate amount
reasonably acceptable to the Administrative Agent, and the Administrative Agent
shall have received such evidence thereof in form and substance satisfactory to
it (including itemizations thereof) as it shall have reasonably requested.
(i) The Administrative Agent shall have received certified reports from
an independent search service satisfactory to it listing (i) any judgment or tax
lien filing that names the Borrower as debtor in any of the jurisdictions listed
on Annex A to the Borrower Pledge and Security Agreement or that names Parent as
debtor in any of the jurisdictions listed on Annex A to the Parent Pledge and
Security Agreement and (ii) any Uniform Commercial Code financing statement that
names the Borrower or Parent as debtor in any of such jurisdictions, as
applicable, and the results thereof shall be satisfactory to the Administrative
Agent.
(j) The Administrative Agent shall have received evidence in form and
substance satisfactory to it that all filings, recordings, registrations and
other actions (including, without limitation, the filing of duly completed UCC-1
financing statements in each jurisdiction listed on Annex A to the Borrower
Pledge and Security Agreement or Annex A to the Parent Pledge and Security
Agreement) necessary or, in the reasonable opinion of the Administrative Agent,
desirable to perfect the Liens created by the Security Documents shall have been
completed, or arrangements satisfactory to the Administrative Agent for the
completion thereof shall have been made.
(k) Since December 31, 1997, both immediately before and after giving
effect to the consummation of the Transactions, there shall not have occurred
any Material Adverse Change or any event, condition or state of facts that could
reasonably be expected to result in a Material Adverse Change.
(l) The Borrower shall have paid (i) to the Arranger, for the account
of the Agents, the unpaid balance of the fee described in paragraph (1) of the
Fee Letter, and (ii) all other fees and expenses of the Agents and the Lenders
required hereunder or under any other Credit Document to be paid on or prior to
the Closing Date (including fees and expenses of counsel) in connection with
this Agreement and the transactions contemplated hereby.
(m) The Administrative Agent shall have received a Covenant Compliance
Worksheet, duly completed and certified by the chief financial officer of Parent
and in form and substance satisfactory to the Administrative Agent,
demonstrating Parent's compliance with the financial covenants set forth in
SECTIONS 7.1 through 7.3 (at the levels applicable thereto as of March 31,
1998), determined on a pro forma basis as of December 31, 1997 after giving
effect to the making of the initial Loans hereunder and the consummation of the
other Transactions.
50
(n) The Administrative Agent shall have received evidence satisfactory
to it that concurrently with the making of the initial Loans hereunder, (x) all
principal, interest and other amounts outstanding with respect to the Existing
Senior Indebtedness shall be repaid and satisfied in full, (y) all commitments
to extend credit under the Existing Senior Credit Agreement shall be terminated,
and (z) any Liens securing any Existing Senior Indebtedness shall be released.
(o) The Administrative Agent shall have received evidence in form and
substance reasonably satisfactory to it that all of the requirements of SECTION
6.6 and those provisions of the Borrower Pledge and Security Agreement relating
to the maintenance of insurance have been satisfied, including receipt of
certificates of insurance evidencing the insurance coverages described on
SCHEDULE 5.17 and all other or additional coverages required under the Borrower
Pledge and Security Agreement and naming the Administrative Agent as loss payee
or additional insured, as its interests may appear.
(p) The Administrative Agent shall have received an Account Designation
Letter, together with written instructions from an Authorized Officer, including
wire transfer information, directing the payment of the proceeds of the initial
Loans to be made hereunder.
(q) The Administrative Agent and each Lender shall have received such
other documents, certificates, opinions and instruments in connection with the
transactions contemplated hereby as it shall have reasonably requested.
4.2 Conditions of All Borrowings. The obligation of each Lender to make
----------------------------
any Loans hereunder, including the initial Loans (but excluding Revolving Loans
made for the purpose of repaying Refunded Swingline Loans pursuant to SECTION
2.2(e)), and the obligation of the Issuing Lender to issue any Letters of Credit
hereunder, is subject to the satisfaction of the following conditions precedent
on the relevant Borrowing Date or date of issuance:
(a) The Administrative Agent shall have received a Notice of Borrowing
in accordance with SECTION 2.2(b), or (together with the Swingline Lender) a
Notice of Swingline Borrowing in accordance with SECTION 2.2(d), or (together
with the Issuing Lender) a Letter of Credit Notice in accordance with SECTION
3.3, as applicable;
(b) Each of the representations and warranties contained in ARTICLE V
and in the other Credit Documents shall be true and correct in all material
respects on and as of such Borrowing Date (including the Closing Date, in the
case of the initial Loans made hereunder) or date of issuance with the same
effect as if made on and as of such date, both immediately before and after
giving effect to the Loans to be made or Letter of Credit to be issued on such
date (except to the extent any such representation or warranty is expressly
stated to have been made as of a specific date, in which case such
representation or warranty shall be true and correct in all material respects as
of such date); and
(c) No Default or Event of Default shall have occurred and be
continuing on such date, both immediately before and after giving effect to the
Loans to be made or Letter of Credit to be issued on such date.
Each giving of a Notice of Borrowing, a Notice of Swingline Borrowing or
a Letter of Credit Notice, and the consummation of each Borrowing or issuance of
a Letter of Credit, shall be deemed to constitute a representation by the
Borrower that the statements contained in subsections (b) and (c)
51
above are true, both as of the date of such notice or request and as of the
relevant Borrowing Date or date of issuance.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into this
Agreement and to induce the Lenders to extend the credit contemplated hereby,
each of Parent and the Borrower represents and warrants to the Administrative
Agent and the Lenders as follows:
5.1 Organization and Power. Each Credit Party (i) is a limited
----------------------
liability company, corporation, partnership or other business organization duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (ii) has the full limited liability company,
corporate, partnership or other applicable power and authority to execute,
deliver and perform the Credit Documents to which it is or will be a party, to
own and hold its property and to engage in its business as presently conducted,
and (iii) is duly qualified to do business as a foreign limited liability
company, corporation, partnership or other business organization and is in good
standing in each jurisdiction where the nature of its business or the ownership
of its properties requires it to be so qualified, except where the failure to be
so qualified could not, individually or in the aggregate, be reasonably expected
to have a Material Adverse Effect.
5.2 Authorization; Enforceability. Each Credit Party has taken, or on
-----------------------------
the Closing Date will have taken, all necessary limited liability company or
corporate action to execute, deliver and perform each of the Credit Documents to
which it is or will be a party, and has, or on the Closing Date (or any later
date of execution and delivery) will have, validly executed and delivered each
of the Credit Documents to which it is or will be a party. This Agreement
constitutes, and each of the other Credit Documents upon execution and delivery
will constitute, the legal, valid and binding obligation of each of the Credit
Parties that is a party hereto or thereto, enforceable against it in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally or by general equitable principles or principles of
good faith and fair dealing.
5.3 No Violation. The execution, delivery and performance by each
------------
Credit Party of this Agreement and each of the other Credit Documents to which
it is or will be a party, compliance by it with the terms hereof and thereof,
and the consummation of the transactions contemplated hereby and thereby, do not
and will not (i) violate any provision of its articles of organization,
certificate of incorporation, certificate of partnership, operating agreement,
bylaws, partnership agreement or other constituent documents, as applicable, or
contravene any other Requirement of Law applicable to it, (ii) conflict with,
result in a breach of or constitute (with notice, lapse of time or both) a
default under any indenture, agreement or other instrument to which it is a
party, by which it or any of its properties is bound or to which it is subject,
(iii) require any approval of stockholders, members or partners of any Credit
Party or any approval or consent of any Person under any agreement to which any
Credit Party is a party, except for such approvals or consents which will be
obtained on or before the Closing Date and disclosed in writing to the Lenders
or such approvals or consents the failure of which to obtain could not
reasonably be expected, singly or in the aggregate, to have a Material Adverse
Effect, or (iv) except for the Liens granted pursuant to the Security Documents,
result in or require the creation or imposition of any Lien upon any of its
properties or assets. No Subsidiary of the Borrower
52
is subject to any restriction or encumbrance on its ability to make dividend
payments or other distributions in respect of its Capital Stock, to repay
Indebtedness owed to the Borrower or any other Subsidiary of the Borrower, to
make loans or advances to the Borrower or any other Subsidiary of the Borrower,
or to transfer any of its assets or properties to the Borrower or any other
Subsidiary of the Borrower, in each case other than such restrictions or
encumbrances existing under or by reason of (i) the Credit Documents, (ii)
applicable Requirements of Law, (iii) customary non-assignment provisions in any
lease governing a leasehold interest, (iv) the terms of licenses of trademarks
and copyrights entered into in the ordinary course of business, and (v) other
contractual restrictions in respect of assets not material to the business of
the Credit Parties, taken as a whole.
5.4 Governmental Authorization; Permits. (a) No consent, approval,
-----------------------------------
authorization or other action by, notice to, or registration or filing with, any
Governmental Authority or other Person is or will be required as a condition to
or otherwise in connection with the due execution, delivery and performance by
any Credit Party of this Agreement or any of the other Credit Documents to which
it is or will be a party or the legality, validity or enforceability hereof or
thereof, other than (i) filings of Uniform Commercial Code financing statements
and other instruments and actions necessary to perfect the Liens created by the
Security Documents, (ii) consents that would be required in respect of the
leases referred to in clause (iii) of SECTION 5.3, and (iii) consents the
failure to obtain which would not, individually or in the aggregate, have a
Material Adverse Effect.
(b) Each Credit Party has, and is in good standing with respect to, all
governmental approvals, licenses, permits and authorizations necessary to
conduct its business as presently conducted and to own or lease and operate its
properties, except for those the failure to obtain which could not be reasonably
expected, individually or in the aggregate, to have a Material Adverse Effect.
5.5 Litigation. There are no actions, investigations, suits or
----------
proceedings pending or, to the knowledge of Parent or the Borrower (after due
investigation) threatened, at law, in equity or in arbitration, before any
court, other Governmental Authority or other Person ("Litigation"), (i) against
or affecting any Credit Party or any of such Person's properties that could, if
adversely determined, be reasonably expected to have a Material Adverse Effect,
or (ii) with respect to this Agreement, any of the other Credit Documents or any
of the Transactions. Neither Parent nor the Borrower has been advised that there
is a reasonable likelihood of an adverse determination of any Litigation, which
adverse determination, should it occur, would have a Material Adverse Effect.
5.6 Taxes. Each Credit Party has timely filed all federal and all
-----
material state and local tax returns and reports required to be filed by it and
has paid all taxes, assessments, fees and other charges levied upon it or upon
its properties that are shown thereon as due and payable, other than those that
are being contested in good faith and by proper proceedings and for which
adequate reserves have been established in accordance with Generally Accepted
Accounting Principles. Such returns accurately reflect in all material respects
all liability for taxes of the Borrower and its Subsidiaries for the periods
covered thereby. There is no ongoing audit or examination or, to the knowledge
of Parent or the Borrower, other investigation by any Governmental Authority of
the tax liability of any Credit Party and there is no unresolved claim by any
Governmental Authority concerning the tax liability of any Credit Party for any
period for which tax returns have been or were required to have been filed,
other than claims for which adequate reserves have been established in
accordance with Generally Accepted Accounting Principles. No Credit Party has
waived or extended or has been requested to waive or extend the statute of
limitations relating to the payment of any taxes.
53
5.7 Subsidiaries. As of the Closing Date, no Credit Party has any
------------
Subsidiaries or otherwise has any equity or other ownership interest in any
corporation, partnership, joint venture or other Person, except as set forth on
SCHEDULE 5.7. SCHEDULE 5.7 indicates, as to each such Subsidiary of any Credit
Party as of the Closing Date, each direct owner of its Capital Stock and such
owner's percentage ownership thereof.
5.8 Full Disclosure. All factual information furnished to the
---------------
Administrative Agent or any Lender on or prior to the Closing Date in writing by
or on behalf of any Credit Party for purposes of or in connection with this
Agreement, the transactions contemplated hereby and the other Transactions is,
and all other such factual information hereafter furnished to the Administrative
Agent or any Lender in writing by or on behalf of any Credit Party will be, true
and accurate in all material respects on the date as of which such information
is dated or certified (or, if such information has been amended or supplemented,
on the date as of which any such amendment or supplement is dated or certified)
and not made incomplete by omitting to state a material fact necessary to make
the statements contained therein, in light of the circumstances under which such
information was provided, not misleading. No fact is known, no condition exists
nor has any event occurred which has not been disclosed herein or in any other
document, certificate or statement furnished to the Administrative Agent or the
Lenders for use in the transactions contemplated hereby which, singly or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
5.9 Margin Regulations. Neither the Borrower nor any of its
------------------
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying
Margin Stock. No proceeds of the Loans will be used, directly or indirectly, to
purchase or carry any Margin Stock, to extend credit for such purpose or for any
other purpose that would violate or be inconsistent with Regulations G, T, U or
X or any provision of the Exchange Act.
5.10 Financial Matters. (a) The Borrower has heretofore furnished to the
-----------------
Administrative Agent copies of (i) the audited balance sheets of Parent as of
December 31, 1996, June 30, 1997, and December 31, 1997, and the related
statements of operations and shareholders' equity and cash flows for the period
from August 15, 1996 to December 31, 1996, the six months ended June 30, 1997,
and the year ended December 31, 1997, together with the opinion of Ernst & Young
LLP thereon, (ii) the audited consolidated balance sheets of Holdings and its
Subsidiaries as of December 31, 1996 and June 30, 1997, and the related
consolidated statements of operations, members' equity and cash flows for the
three months ended December 31, 1996 and the six months ended June 30, 1997,
together with the opinion of Ernst & Young LLP thereon, (iii) the unaudited
balance sheets of the Borrower as of September 30, 1997 and December 31, 1997,
and the related statements of operations and shareholders' equity and cash flows
for the nine months ended September 30, 1997 and the year ended December 31,
1997, and (iv) the audited balance sheets of the Predecessor as of November 30,
1995 and September 30, 1996, and the related statements of operations and
divisional equity and cash flows for each of the two years in the period ended
November 30, 1995 and the ten months ended September 30, 1996, together with the
opinion of Ernst & Young LLP thereon. Such financial statements have been
prepared in accordance with Generally Accepted Accounting Principles and present
fairly the financial condition of Parent, Holdings or the Predecessor, as the
case may be (and with respect to Holdings, on a consolidated basis), as of the
respective dates thereof and the results of operations and cash flows of Parent,
Holdings or the Predecessor, as the case may be (and with respect to Holdings,
on a consolidated basis), for the respective periods then ended. Except as fully
reflected in the most recent financial statements referred to above and the
notes thereto, there are no material liabilities or obligations with respect to
any Credit Party of any nature whatsoever (whether absolute, contingent or
otherwise and whether or not due). There has been no Material Adverse Change
since December 31,
54
1997, and there exists no event, condition or state of facts that could
reasonably be expected to result in a Material Adverse Change.
(b) The Borrower has prepared, and has heretofore furnished to the
Administrative Agent a copy of, annual projected balance sheets and statements
of income and cash flows of the Borrower for the nine-year period ending
December 31, 2007, giving effect to the consummation of the Transactions (the
"Projections"). In the opinion of management of the Borrower, the assumptions
used in the preparation of the Projections were fair, complete and reasonable
when made and continue to be fair, complete and reasonable as of the date
hereof. The Projections have been prepared in good faith by the executive and
financial personnel of the Borrower, are complete and represent a reasonable
estimate of the future performance and financial condition of the Borrower,
subject to the uncertainties and approximations inherent in any projections and
without any representation or warranty that the projected results will be
achieved.
(c) Upon consummation of the Transactions and as of the Closing Date:
(i) The fair saleable value of the assets of the Borrower and
each of its Subsidiaries, on a stand-alone basis, exceeds the amount that
will reasonably be required to be paid on or in respect of the existing
debts and other liabilities (including Contingent Obligations) of such
Person as they mature.
(ii) The assets of each of the Borrower and each of its
Subsidiaries, on a stand-alone basis, do not constitute unreasonably small
capital for any such Person to carry out its business as conducted as of
the Closing Date and as proposed to be conducted, including the capital
needs of any such Person, taking into account the particular capital
requirements of the business conducted and to be conducted by such Person,
and the availability of capital in respect thereof (with reference, without
limitation, to the Projections).
(iii) The Borrower does not intend to, and does not intend to
permit any of its Subsidiaries to, incur debts beyond its ability to pay
such debts as they mature (taking into account the timing and amounts of
cash to be payable on or in respect of debt of each of such Person). As of
the Closing Date, the anticipated cash flow of the Borrower and each of its
Subsidiaries, after taking into account all presently anticipated uses of
the cash of each such Person, will at all times be sufficient to pay all
amounts on or in respect of Indebtedness of each such Person when such
amounts are, as anticipated as of the Closing Date, required to be paid.
(iv) The Borrower does not intend, and does not believe, that
final judgments against any of the Borrower or its Subsidiaries in actions
for money damages will be rendered at a time when, or in an amount such
that, any such Person will be unable to satisfy any such judgments promptly
in accordance with their terms (taking into account the maximum reasonable
amount of such judgments in any such actions and the earliest reasonable
time at which such judgments might be rendered). The anticipated cash flow
of the Borrower and each of its Subsidiaries, on a stand-alone basis, after
taking into account all other anticipated uses of the cash of each such
Person (including the payments on or in respect of debt referred to in
clause (iii) of this SECTION 5.10(c)), will at all times be sufficient to
pay all such judgments promptly in accordance with their terms.
55
(d) As of the Closing Date and after giving effect to the consummation of
the Subordinated Note Offer, the Borrower has acquired and canceled all of the
Existing Subordinated Notes and has terminated its obligations under the
Existing Subordinated Note Indenture.
5.11 Ownership of Properties. Each Credit Party (i) has good and marketable
-----------------------
title to all real property owned by it, (ii) holds interests as lessee under
valid leases in full force and effect with respect to all material leased real
and personal property used in connection with its business, (iii) possesses or
has rights to use licenses, patents, copyrights, trademarks, service marks,
trade names and other assets sufficient to enable it to continue to conduct its
business substantially as heretofore conducted and without any material conflict
with the rights of others, and (iv) has good title to all of its other
properties and assets reflected in the most recent financial statements referred
to in SECTION 5.10(a) (except as sold or otherwise disposed of since the date
thereof in the ordinary course of business), in each case under (i), (ii), (iii)
and (iv) above free and clear of all Liens other than Permitted Liens, and other
than encumbrances or restrictions that could not reasonably be expected to have
a Material Adverse Effect. SCHEDULE 5.11 lists, as of the Closing Date, all real
property leasehold interests of each Credit Party, indicating in each case the
identity of the owner, the nature of the leased premises and the address of the
property. As of the Closing Date, no Credit Party owns any fee interest in any
real property.
5.12 ERISA. Each Plan is and has been administered in compliance in all
-----
material respects with all applicable Requirements of Law, including, without
limitation, the applicable provisions of ERISA and the Internal Revenue Code. No
ERISA Event has occurred and is continuing or, to the knowledge of Parent or the
Borrower, is reasonably expected to occur with respect to any Plan, in either
case that could be reasonably expected, individually or in the aggregate, to
have a Material Adverse Effect. No Plan has any Unfunded Pension Liability, and
neither the Borrower nor any ERISA Affiliate has engaged in a transaction that
could be subject to Section 4069 or 4212(c) of ERISA, in either instance where
the same could be reasonably expected, individually or in the aggregate, to have
a Material Adverse Effect. Neither the Borrower nor any ERISA Affiliate is
required to contribute to or has, or has at any time had, any liability to a
Multiemployer Plan.
5.13 Environmental Matters. (a) No Hazardous Substances are or have been
---------------------
generated, used, located, released, treated, disposed of or stored by any Credit
Party or, to the knowledge of Parent or the Borrower, by any other Person
(including any predecessor in interest) or otherwise, in, on or under any
portion of any real property, leased or owned, of any Credit Party, except as
could not reasonably be expected to have a Material Adverse Effect, and no
portion of any such real property or, to the knowledge of Parent or the
Borrower, any other real property at any time leased, owned or operated by any
Credit Party, has been contaminated by any Hazardous Substance; and no portion
of any real property, leased or owned, of any Credit Party has been or is
presently the subject of an environmental audit, assessment or remedial action,
except for any such contamination, audit, assessment or remedial action that
could not reasonably be expected to have a Material Adverse Effect.
(b) No portion of any real property leased or owned by any Credit Party as
of the Closing Date has been used by a Credit Party or, to the knowledge of
Parent or the Borrower, by any other Person, as or for a mine, a landfill, a
dump or other disposal facility, a gasoline service station, or (other than for
petroleum substances stored in the ordinary course of business) a petroleum
products storage facility; no portion of such real property or any other real
property at any time leased, owned or operated by any Credit Party has, pursuant
to any Environmental Law, been placed on the "National Priorities List" or
"CERCLIS List" (or any similar federal or state list) of sites subject to
possible environmental problems; and there are not, and to Parent or the
Borrower's knowledge have
56
never been, any underground or above-ground storage tanks situated on any real
property currently leased or owned by any Credit Party.
(c) Each Credit Party has obtained all licenses and permits under
Environmental Laws necessary to their respective operations, and all such
licenses and permits are being maintained in good standing, and each Credit
Party is in compliance with all material terms and conditions of such licenses
and permits, except for any such failure to obtain, maintain or comply which
could not reasonably be expected to have a Material Adverse Effect.
(d) No Credit Party has received (i) any notice or claim to the effect
that it is or may be liable to any Person under any Environmental Law, including
without limitation, any claim relating to any Hazardous Materials except as
could not reasonably be expected to have a Material Adverse Effect or (ii) any
letter or request for information under Section 104 of the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C. (S) 9604) or
comparable foreign or state laws regarding any matter which could reasonably be
expected to result in a Material Adverse Effect, and, to the best of Parent or
the Borrower's knowledge, no Credit Party is involved in any investigation,
response or corrective action relating to or in connection with any Hazardous
Materials at any real property occupied by such Person or at any other location
except for such of the foregoing which could not reasonably be expected to have
a Material Adverse Effect.
(e) No Credit Party is subject to any judicial or administrative proceeding
alleging the violation of or liability under any Environmental Laws which, if
adversely determined, could reasonably be expected to have a Material Adverse
Effect.
(f) No Credit Party nor any of its respective properties or operations is
subject to any outstanding written order or agreement with any governmental
authority or private party relating to (i) any actual or potential violation of
or liability under any Environmental Laws or (ii) any Environmental Claims,
except for such of the foregoing which could not reasonably be expected to have
a Material Adverse Effect.
(g) No Credit Party or, to the best of Parent or the Borrower's knowledge,
any predecessor of any Credit Party, has filed any notice under any
Environmental Law indicating past or present ownership or operation of a
hazardous waste treatment, storage or disposal facility, as defined under 40
C.F.R. Parts 260-270 or any state equivalent.
(h) No Lien in favor of any Person relating to or in connection with any
Environmental Claim has attached to any property currently owned by any Credit
Party, except for any such Lien which could not reasonably be expected to have a
Material Adverse Effect.
(i) All activities and operations of each Credit Party are in compliance
with the requirements of all applicable Environmental Laws, except to the extent
the failure so to comply, individually or in the aggregate, could not be
reasonably expected to have a Material Adverse Effect. No Credit Party is
involved in any suit, action or proceeding, or has received any notice,
complaint or other request for information from any Governmental Authority or
other Person, in either case with respect to any actual, alleged or threatened
Environmental Claims that, if adversely determined, could be reasonably
expected, individually or in the aggregate, to have a Material Adverse Effect.
(j) To Parent or the Borrower's knowledge, no event or condition has
occurred which may interfere with present compliance by any Credit Party with
any Environmental Law, or which may
57
give rise to any liability of any Credit Party under any Environmental Law,
which individually or in the aggregate has had or could reasonably be expected
to have a Material Adverse Effect.
5.14 Compliance With Governing Documents, Decrees and Laws. (a) No Credit
-----------------------------------------------------
Party is in violation of (i) its articles of incorporation, articles of
organization, bylaws, operating agreement or any other organizational documents
or (ii) any order, decree or judgment of any Governmental Authority having
jurisdiction over any such Person.
(b) Each Credit Party has timely filed all material reports, documents and
other materials required to be filed by it under all applicable Requirements of
Law with any Governmental Authority, has retained all material records and
documents required to be retained by it under all applicable Requirements of
Law, and is otherwise in compliance with all applicable Requirements of Law in
respect of the conduct of its business and the ownership and operation of its
properties, except for such Requirements of Law the failure to comply with
which, individually or in the aggregate, could not be reasonably expected to
have a Material Adverse Effect.
5.15 Labor Relations. Except as could not reasonably be expected to have a
---------------
Material Adverse Effect: (a) no Credit Party is engaged in any unfair labor
practice within the meaning of the National Labor Relations Act of 1947, as
amended; (b) there is (i) no unfair labor practice complaint before the National
Labor Relations Board, or grievance or arbitration proceeding arising out of or
under any collective bargaining agreement, pending or, to the knowledge of
Parent or the Borrower, threatened against any Credit Party, (ii) no strike,
lock-out, slowdown, stoppage, walkout or other labor dispute pending or, to the
knowledge of Parent or the Borrower, threatened against any Credit Party and
(iii) to the knowledge of Parent or the Borrower, no petition for certification
or union election or union organizing activities with respect to any Credit
Party; and (c) neither Parent nor the Borrower is aware of any existing or
imminent labor disturbance by the employees of any Credit Party's principal
suppliers, manufacturers or customers.
5.16 Regulated Industries. No Credit Party is (i) an "investment company,"
--------------------
a company "controlled" by an "investment company," or an "investment advisor,"
within the meaning of the Investment Company Act of 1940, as amended, (ii) a
"holding company," 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, or (iii) subject to regulation under the Federal Power Act.
5.17 Insurance. SCHEDULE 5.17 sets forth a summary (that is true and
---------
correct in all material respects) of all insurance policies or arrangements
carried or maintained by any Credit Party as of the Closing Date. The assets,
properties and business of the Credit Parties are insured against such hazards
and liabilities, under such coverages and in such amounts, as are customarily
maintained by prudent companies of established repute engaged in the same or
similar businesses and under policies issued by insurers of recognized
responsibility.
5.18 Certain Contracts. SCHEDULE 5.18 lists, as of the Closing Date and
-----------------
after giving effect to the Transactions, each contract, agreement or commitment,
written or oral, to which any Credit Party is a party, by which any of them or
their respective properties is bound or to which any of them is subject and that
(i) relates to employment of senior executives of a Credit Party or labor
matters, (ii) evidences Funded Debt of a Credit Party, or (iii) the termination
of which by any party or the breach of which by a Credit Party could reasonably
be expected to have a Material Adverse Effect, in each case other than purchase
orders in the ordinary course of business and the Credit Documents, and
58
also indicates the parties, subject matter and term thereof. As of the Closing
Date, each such contract is in full force and effect, and no Credit Party or, to
the knowledge of Parent or the Borrower, any other party thereto, is in default
under any such contract.
5.19 Capitalization. As of the Closing Date, the capitalization of each
--------------
Credit Party (other than Parent) is set forth on SCHEDULE 5.19. All issued and
outstanding Capital Stock of the Borrower and each Subsidiary has been duly
authorized and validly issued and, to the extent applicable, is fully paid and
nonassessable. As of the Closing Date and other than with respect to the Capital
Stock of Parent, there will be no outstanding securities convertible into or
exchangeable for Capital Stock of any Credit Party or options, warrants or other
rights to purchase or subscribe for Capital Stock of any Credit Party or
contracts, commitments, agreements, understandings or arrangements of any kind
to which any Credit Party is a party relating to the issuance of any Capital
Stock of such Credit Party, any such convertible or exchangeable securities or
any such options, warrants or rights. As of the Closing Date, no stockholder or
member of the Borrower or any of its Subsidiaries has any preemptive rights to
subscribe for any additional equity securities of such Credit Party. Any
issuance and sale of Capital Stock of the Borrower or any Subsidiary, upon such
issuance and sale, will either (a) have been registered or qualified under
applicable federal and state securities laws or (b) be exempt therefrom.
5.20 Security Documents. The provisions of each of the Security Documents
------------------
(whether executed and delivered prior to or on the Closing Date or thereafter)
are and will be effective to create in favor of the Administrative Agent, for
its benefit and the benefit of the Lenders, a valid and enforceable security
interest in and Lien upon all right, title and interest of each Credit Party
that is a party thereto in and to the Collateral purported to be pledged by such
Credit Party thereunder and described therein, and upon (i) the initial
extension of credit hereunder, (ii) the filing of appropriately completed
Uniform Commercial Code financing statements and continuations thereof in the
jurisdictions specified therein, (iii) the filing of appropriately completed
short-form assignments in the U.S. Patent and Trademark Office and the U.S.
Copyright Office, (iv) in the case of uncertificated securities, the acquisition
by the Administrative Agent of "control" thereof within the meaning of such term
under Section 8-106(c) (or its successor provision) of the applicable Uniform
Commercial Code, and (v) the possession by the Administrative Agent of any
certificates evidencing the securities pledged thereby, such security interest
and Lien shall constitute a fully perfected and first priority security interest
in and Lien upon such right, title and interest of each such Credit Party in and
to such Collateral, to the extent that such security interest and Lien can be
perfected by such filings, actions and possession, subject only to Permitted
Liens.
ARTICLE VI
AFFIRMATIVE COVENANTS
Each of Parent and the Borrower covenants and agrees that, until the
termination of the Commitments, the termination or expiration of all Letters of
Credit and the payment in full of all principal and interest with respect to the
Loans and all Reimbursement Obligations together with all other amounts then due
and owing hereunder:
6.1 Financial Statements. Parent will deliver to each Lender:
--------------------
(a) As soon as available and in any event within forty-five (45) days
after the end of each of the first three fiscal quarters of each fiscal year,
beginning with the fiscal quarter ending March 31,
59
1998, (i) unaudited consolidated balance sheets of Parent and its Subsidiaries
as of the end of such fiscal quarter and unaudited consolidated statements of
income and cash flows for Parent and its Subsidiaries for the fiscal quarter
then ended and for that portion of the fiscal year then ended, in each case
setting forth comparative consolidated figures as of the end of and for the
corresponding period in the preceding fiscal year, all in reasonable detail and
prepared in accordance with Generally Accepted Accounting Principles (subject to
the absence of notes required by Generally Accepted Accounting Principles and
subject to normal year-end adjustments) applied on a basis consistent with that
of the preceding quarter or containing disclosure of the effect on the financial
condition or results of operations of any change in the application of
accounting principles and practices during such quarter and (ii) if applicable,
Parent's quarterly report on Form 10-Q for such quarterly period;
(b) As soon as available and in any event within 100 days after the
end of each fiscal year, beginning with the fiscal year ending December 31,
1998, (i) an audited consolidated balance sheet of Parent and its Subsidiaries
as of the end of such fiscal year and audited consolidated statements of income
and cash flows for Parent and its Subsidiaries for the fiscal year then ended,
in each case setting forth comparative figures as of the end of and for the
preceding fiscal year, all in reasonable detail, together with (y) a report
thereon by Ernst & Young, LLP or another certified public accounting firm of
recognized national standing reasonably acceptable to the Required Lenders that
is not qualified as to going concern or scope of audit and to the effect that
(a) such financial statements present fairly the consolidated financial
condition and results of operations of Parent and its Subsidiaries as of the
dates and for the periods indicated in accordance with Generally Accepted
Accounting Principles applied on a basis consistent with that of the preceding
year or containing disclosure of the effect on the financial position or results
of operations of any change in the application of accounting principles and
practices during such year and (B) the examination by such accountants in
connection with such financial statements has been made in accordance with
generally accepted auditing standards, and (z) a report by such accountants to
the effect that, based on and in connection with their examination of the
financial statements of Parent and its Subsidiaries, such accountants obtained
no knowledge of the occurrence or existence of any Default or Event of Default
relating to accounting or financial reporting matters, or a statement specifying
the nature and period of existence of any such Default or Event of Default
disclosed by their audit; provided, however, that such accountants shall not be
-------- -------
liable by reason of the failure to obtain knowledge of any Default or Event of
Default that would not be disclosed or revealed in the course of their audit
examination, and (ii) if applicable, Parent's annual report on Form 10-K for
such year; and
(c) As soon as available and in any event within sixty (60) days after
the end of each fiscal quarter of each fiscal year, beginning with the fiscal
quarter ending March 31, 1998, unaudited statements of profit and loss (listing
revenues, contribution profit and circulation figures) for each of the top
twenty publications (ranked by revenues) of the Borrower and its Subsidiaries
(and to the extent not already included in such group, the Scheduled Titles) for
such fiscal quarter.
6.2 Other Business and Financial Information. Parent will deliver to
----------------------------------------
each Lender:
(a) Concurrently with each delivery of the financial statements
described in SECTION 6.1(a) or SECTION 6.1(b), a Compliance Certificate in the
form of EXHIBIT J with respect to the period covered by the financial statements
then being delivered, executed by a Financial Officer of Parent, together with a
Covenant Compliance Worksheet reflecting the computation of the financial
covenants set forth in SECTIONS 7.1 through 7.3 as of the last day of the period
covered by such financial statements;
60
(b) As soon as available and in any event within thirty (30) days
after the end of each fiscal year, beginning with the fiscal year ending
December 31, 1998, a consolidated operating budget for Parent and its
Subsidiaries for the succeeding fiscal year (prepared on a quarterly basis),
together with a certificate of a Financial Officer of Parent to the effect that
such budget has been prepared in good faith and is a reasonable estimate of the
financial position and results of operations of Parent and its Subsidiaries for
the period covered thereby and that such Financial Officer has no reason to
believe such budget is misleading in any material respect in light of the
circumstances existing at the time of preparation or delivery thereof (but
without representation or warranty that the results reflected therein will
actually be achieved); and as soon as available from time to time thereafter,
any modifications or revisions to or restatements of such budget;
(c) Promptly upon receipt thereof, copies of all reports in final
form (other than reports of a routine or ministerial nature which are not
material) submitted to Parent by its independent certified public accountants in
connection with each annual, interim or special audit, including, without
limitation, any comment letter submitted by such accountants to management in
connection with their annual audit, and promptly upon completion thereof, any
response reports from Parent in respect thereof;
(d) Promptly upon the sending, filing or receipt thereof, copies of
(i) all financial statements, reports, notices and proxy statements that Parent
shall send or make available generally to its stockholders, (ii) all regular,
periodic and special reports, registration statements and prospectuses (other
than on Form S-8) that Parent or the Borrower shall render to or file with the
Securities and Exchange Commission, the National Association of Securities
Dealers, Inc. or any national securities exchange and (iii) all press releases
and other statements made available generally by Parent or any of its
Subsidiaries to the public concerning material developments in the business of
Parent or any of its Subsidiaries;
(e) Promptly upon (and in any event within five (5) Business Days
after) a Responsible Officer obtains knowledge thereof, written notice of any of
the following:
(i) the occurrence of any Default or Event of Default or of any
condition or event that would be required to be disclosed in a current
report filed with the Commission on Form 8-K (whether or not Parent is
required to file such reports under the Exchange Act), together with a
written statement of a Responsible Officer of Parent specifying the nature
and period of existence of such event or condition and the action that
Parent has taken, is taking and proposes to take with respect thereto;
(ii) the institution or threatened institution of any action,
suit, investigation or proceeding against or affecting Parent or any of its
Subsidiaries, including any such investigation or proceeding by any
Governmental Authority (other than routine periodic inquiries,
investigations or reviews), that seeks to enjoin or otherwise prevent the
consummation of, or to recover damages or obtain relief as a result of, any
of the Transactions, or that could, if adversely determined, be reasonably
expected, individually or in the aggregate, to have a Material Adverse
Effect, and any material development in any litigation or other proceeding
previously reported pursuant to SECTION 5.5 or this SECTION 6.3(e)(ii);
(iii) the receipt by Parent or any of its Subsidiaries from any
Governmental Authority of any notice asserting any failure by Parent or any
of its Subsidiaries to be in
61
compliance with applicable Requirements of Law or that threatens the taking
of any action against Parent or such Subsidiary or sets forth circumstances
that, if taken or adversely determined, could be reasonably expected to
have a Material Adverse Effect;
(iv) the occurrence of any ERISA Event that could be reasonably
expected to have a Material Adverse Effect, together with (x) a written
statement of a Responsible Officer of the Borrower specifying the details
of such ERISA Event and the action that the Borrower has taken, is taking
and proposes to take with respect thereto, (y) a copy of any notice with
respect to such ERISA Event that may be required to be filed with the PBGC
and (z) a copy of any notice delivered by the PBGC to the Borrower or such
ERISA Affiliate with respect to such ERISA Event;
(v) the occurrence of any material default under, or any
proposed or threatened termination or cancellation of, any material
contract or agreement to which Parent or any of its Subsidiaries is a
party, the termination or cancellation of which could be reasonably
expected to have a Material Adverse Effect;
(vi) the occurrence of any of the following: (x) the assertion of
any Environmental Claim against or affecting Parent, any of its
Subsidiaries or any of their respective real property, leased or owned; (y)
the receipt by Parent or any of its Subsidiaries of notice of any alleged
violation of or noncompliance with any Environmental Laws; or (z) the
taking of any remedial action by Parent, any of its Subsidiaries or any
other Person in response to the actual or alleged generation, storage,
release, disposal or discharge of any Hazardous Substances on, to, upon or
from any real property leased or owned by Parent or any of its
Subsidiaries; but in each case under clauses (x), (y) and (z) above, only
to the extent the same could be reasonably expected to have a Material
Adverse Effect; and
(vii) any other matter or event that has, or could be reasonably
expected to have, a Material Adverse Effect, together with a written
statement of a Responsible Officer of Parent setting forth the nature and
period of existence thereof and the action that Parent has taken, is taking
and proposes to take with respect thereto;
(f) Not later than the last day of each fiscal year of Parent, a report in
form and substance satisfactory to the Administrative Agent outlining all
material insurance coverage maintained as of the date of such report by Parent
and its Subsidiaries and all material insurance coverage planned to be
maintained by such Persons in the subsequent fiscal year;
(g) Promptly after the availability thereof, copies of all material
amendments to the articles of incorporation or organization, bylaws, operating
agreement or other organizational documents of Parent or any of its
Subsidiaries; and
(h) As promptly as reasonably possible, such other information about the
business, condition (financial or otherwise), operations or properties of Parent
or any of its Subsidiaries (including any Plan and any information required to
be filed under ERISA, and including any statements, audits or other reports
submitted by or on behalf of Parent or any of its Subsidiaries to any state
Governmental Authority) as the Administrative Agent or any Lender may from time
to time reasonably request.
62
6.3 Existence; Franchises; Maintenance of Properties. Parent will, and
---------------------
will cause each of its Subsidiaries to, (i) maintain and preserve in full force
and effect its limited liability company or corporate existence, as applicable,
except as expressly permitted otherwise by SECTION 8.1, (ii) obtain, maintain
and preserve in full force and effect all other rights, franchises, licenses,
permits, certifications, approvals and authorizations required by Governmental
Authorities and necessary to the ownership, occupation or use of its properties
or the conduct of its business, except to the extent the failure to do so could
not be reasonably expected to have a Material Adverse Effect, and (iii) keep all
material properties in good working order and condition (normal wear and tear
excepted) and from time to time make all necessary repairs to and renewals and
replacements of such properties, except to the extent that any of such
properties are obsolete or are being replaced.
6.4 Compliance with Laws. Parent will, and will cause each of its
--------------------
Subsidiaries to, comply in all respects with all Requirements of Law applicable
in respect of the conduct of its business and the ownership and operation of its
properties, except to the extent the failure so to comply could not be
reasonably expected to have a Material Adverse Effect.
6.5 Payment of Obligations. Parent will, and will cause each of its
----------------------
Subsidiaries to, (i) pay all liabilities and obligations as and when due
(subject to any applicable subordination provisions), except to the extent
failure to do so could not be reasonably expected to have a Material Adverse
Effect, and (ii) pay and discharge all taxes, assessments and governmental
charges or levies imposed upon it, upon its income or profits or upon any of its
properties, prior to the date on which penalties would attach thereto, and all
lawful claims that, if unpaid, might become a Lien upon any of the properties of
Parent or any of its Subsidiaries; provided, however, that neither Parent nor
-------- -------
any of its Subsidiaries shall be required to pay any such tax, assessment,
charge, levy or claim that is being contested in good faith and by proper
proceedings and as to which Parent or such Subsidiary is maintaining adequate
reserves with respect thereto in accordance with Generally Accepted Accounting
Principles, unless and until any tax lien notice has become effective with
respect thereto or until any lien resulting therefrom attaches to its properties
and becomes enforceable against its other creditors.
6.6 Insurance. Parent will, and will cause each of its Subsidiaries to,
---------
maintain with financially sound and reputable insurance companies insurance with
respect to its assets, properties and business, against such hazards and
liabilities, of such types and in such amounts, as is customarily maintained by
companies of established reputation engaged in the same or similar businesses
similarly situated, and maintain such other or additional insurance on such
terms and subject to such conditions as may be required under any Security
Document.
6.7 Maintenance of Books and Records; Inspection. Parent will, and will
--------------------------------------------
cause each of its Subsidiaries to, (i) maintain adequate books, accounts and
records, in which full, true and correct entries in all material respects shall
be made of all financial transactions in relation to its business and
properties, and prepare all financial statements required under this Agreement,
in each case in accordance with Generally Accepted Accounting Principles and in
compliance with the requirements of any Governmental Authority having
jurisdiction over it, and (ii) permit employees or agents of the Administrative
Agent or any Lender to inspect its properties and examine or audit its books,
records, working papers and accounts and make copies and memoranda of them, and
to discuss its affairs, finances and accounts with its officers and employees
and, upon notice to Parent or the Borrower, the independent public accountants
of Parent and its Subsidiaries (and by this provision Parent authorizes such
accountants, in the presence of a Responsible Officer, to discuss the finances
and affairs of Parent and its Subsidiaries), all at such times and from time to
time, upon reasonable notice and during business hours, as may be reasonably
requested.
63
6.8 Permitted Acquisitions. (a) Subject to the provisions of subsection
----------------------
(b) below and the requirements contained in the definition of Permitted
Acquisition, and subject to the other terms and conditions of this Agreement,
the Borrower may from time to time on or after the Closing Date effect Permitted
Acquisitions, provided that, with respect to each Permitted Acquisition,
--------
no Default or Event of Default shall have occurred and be continuing at the time
of the consummation of such Permitted Acquisition or immediately after giving
effect thereto, and provided further that, with respect to each Permitted
-------- -------
Acquisition of a Permitted New Media Business, the Acquisition Amount with
respect thereto, together with the aggregate of the Acquisition Amounts for all
other Permitted Acquisitions of Permitted New Media Businesses consummated
during the same fiscal quarter or the period of three consecutive fiscal
quarters immediately prior thereto, shall not exceed $35,000,000.
(b) The Borrower shall have delivered to the Administrative Agent and each
Lender (y) in the case of any Permitted Acquisition with respect to which the
Acquisition Amount exceeds $25,000,000, the items listed in clauses (i) and (ii)
below not less than ten (10) Business Days prior to the consummation thereof and
the items listed in clauses (iii) and (iv) below not less than three (3)
Business Days prior thereto, and (z) in the case of any Permitted Acquisition
(regardless of the Acquisition Amount), the certificate of financial covenant
compliance and supporting attachments described in clause (iv) below not less
than three (3) Business Days prior to the consummation thereof:
(i) a reasonably detailed description of the material terms of
such Permitted Acquisition (including, without limitation, the purchase
price and method and structure of payment) and of each Person or business
that is the subject of such Permitted Acquisition (each, a "Target");
(ii) historical financial statements of the Target (or, if there
are two or more Targets that are the subject of such Permitted Acquisition
and that are part of the same consolidated group, consolidated historical
financial statements for all such Targets) for the two (2) most recent
fiscal years available and, if available, for any interim periods since the
most recent fiscal year-end;
(iii) consolidated projected income statements of Parent and its
Subsidiaries (giving effect to such Permitted Acquisition and the
consolidation with the Borrower of each relevant Target) for the three-year
period following the consummation of such Permitted Acquisition, in
reasonable detail, together with any appropriate statement of assumptions
and pro forma adjustments; and
(iv) a certificate, in form and substance reasonably satisfactory
to the Administrative Agent, executed by a Financial Officer of Parent,
setting forth the Acquisition Amount and further to the effect that, to the
best of such individual's knowledge, (x) the consummation of such Permitted
Acquisition will not result in a violation of any provision of this SECTION
6.8, and after giving effect to such Permitted Acquisition and any
Borrowings made in connection therewith, Parent will be in compliance with
the financial covenants contained in SECTIONS 7.1 through 7.3, such
compliance to be determined as of the last day of the fiscal quarter then
most recently ended with regard to calculations made on a pro forma basis
--- -----
in accordance with Generally Accepted Accounting Principles as if each
Target had been consolidated with Parent for those periods applicable to
SECTION 6.8 and such covenants (such calculations to be attached to the
certificate), (y) Parent believes in good faith that it will continue to
comply with such financial covenants for a period of one year following the
date of
64
the consummation of such Permitted Acquisition, and (z) after giving effect
to such Permitted Acquisition and any Borrowings in connection therewith,
Parent believes in good faith that it will have sufficient availability
under the Revolving Credit Commitments to meet its ongoing working capital
requirements.
(c) As soon as reasonably practicable after the consummation of any
Permitted Acquisition, the Borrower will deliver to the Administrative Agent and
each Lender a copy of the fully executed acquisition agreement (including
schedules and exhibits thereto) and other material documents and closing papers
delivered in connection therewith.
(d) Effective upon the closing date of each Permitted Acquisition, the
Applicable Margin Percentages for ABR Loans and LIBOR Loans and the Revolving
Credit Commitment Fee shall be adjusted in accordance with the matrices set
forth in Annex I hereto, based upon the Leverage Ratio as set forth in the
-------
certificate of financial covenant compliance referred to in clause (iv) of
subsection (b) above delivered with respect to such Permitted Acqisition.
The consummation of each Permitted Acquisition shall be deemed to be a
representation and warranty by the Borrower that (except as shall have been
approved by the Required Lenders) all conditions thereto set forth in this
SECTION 6.8 and in the description furnished under clause (i) of subsection (b)
above have been satisfied in all material respects, that the same is permitted
in accordance with the terms of this Agreement and that the matters certified to
by the Financial Officer of Parent in the certificate referred to in clause (iv)
of subsection (b) above are, to the best of such individual's knowledge, true
and correct in all material respects as of the date such certificate is given,
which representation and warranty shall be deemed to be a representation and
warranty as of the date thereof for all purposes hereunder, including, without
limitation, for purposes of SECTIONS 4.2 and 9.1.
6.9 Creation or Acquisition of Subsidiaries. Subject to the provisions of
---------------------------------------
SECTION 8.5, the Borrower may from time to time create or acquire new
Subsidiaries in connection with Permitted Acquisitions or otherwise as permitted
under SECTION 8.5, and the Subsidiaries of the Borrower may create or acquire
new Subsidiaries, provided that:
--------
(a) Concurrently with (and in any event within ten (10) Business Days
thereafter) the creation or direct or indirect acquisition by the Borrower
thereof, each such new Subsidiary (unless such Subsidiary is a Designated Non-
Guarantor Subsidiary) will execute and deliver to the Administrative Agent (i) a
Subsidiaries Guaranty (or an appropriate joinder to an existing Subsidiaries
Guaranty), pursuant to which such new Subsidiary shall guarantee the payment in
full of the Obligations of the Borrower under this Agreement and the other
Credit Documents, and (ii) a Subsidiaries Pledge and Security Agreement (or an
appropriate joinder to an existing Subsidiaries Pledge and Security Agreement),
pursuant to which such new Subsidiary shall grant to the Administrative Agent a
first priority Lien upon and security interest in its accounts receivable,
inventory, equipment, general intangibles and other personal property as
Collateral for its obligations under the Subsidiaries Guaranty, subject only to
Permitted Liens;
(b) Concurrently with (and in any event within ten (10) Business Days
thereafter) the creation or acquisition of any new Subsidiary all or a portion
of the Capital Stock of which is directly owned by the Borrower, the Borrower
will execute and deliver to the Administrative Agent an appropriate amendment or
supplement to the Borrower Pledge and Security Agreement pursuant to which all
of the Capital Stock of such new Subsidiary owned by the Borrower shall be
pledged to the Administrative Agent, together with the certificates evidencing
such Capital Stock and undated stock
65
powers duly executed in blank; and concurrently with (and in any event within
ten (10) Business Days thereafter) the creation or acquisition of any new
Subsidiary all or a portion of the Capital Stock of which is directly owned by
another Subsidiary (the "Parent Subsidiary"), the Parent Subsidiary will execute
and deliver to the Administrative Agent an appropriate joinder, amendment or
supplement to the Subsidiaries Pledge and Security Agreement, pursuant to which
all of the Capital Stock of such new Subsidiary owned by such Parent Subsidiary
shall be pledged to the Administrative Agent, together with the certificates
evidencing such Capital Stock and undated stock powers duly executed in blank
(provided that no more than 65% of the Capital Stock of any Foreign
--------
Subsidiary shall be required to be pledged pursuant to this subsection (b)); and
(c) As promptly as reasonably possible, the Borrower and its Subsidiaries
will deliver any such other documents, certificates and opinions (including
opinions of local counsel in the jurisdiction of organization of each such new
Subsidiary), in form and substance reasonably satisfactory to the Administrative
Agent, as the Administrative Agent may reasonably request in connection
therewith and will take such other action as the Administrative Agent may
reasonably request to create in favor of the Administrative Agent a perfected
security interest in the Collateral being pledged pursuant to the documents
described above. In the event of a sale or other disposition of the Capital
Stock of any Subsidiary Guarantor in a transaction expressly permitted by or
pursuant to this Agreement or any other applicable Credit Document, such
Subsidiary Guarantor shall be released from its obligations under the applicable
Subsidiaries Guaranty, Subsidiaries Pledge and Security Agreement and any other
Security Documents to which it is a party, the security interest of the
Administrative Agent in the Collateral of such Subsidiary Guarantor pledged
thereunder shall be released, and in connection therewith the Administrative
Agent, at the request and expense of the Borrower, will execute and deliver to
such Subsidiary Guarantor such documents and instruments evidencing such release
or termination as the Borrower may reasonably request.
6.10 Additional Security; Further Assurances. (a) The Borrower will, and
---------------------------------------
will cause each of its Subsidiaries (other than any Designated Non-Guarantor
Subsidiaries) to, grant to the Administrative Agent from time to time security
interests, Liens and mortgages in and upon such assets and properties of the
Borrower or such Subsidiary as are not covered by the Security Documents
executed and delivered on the Closing Date or pursuant to SECTION 6.9 and as may
be reasonably requested from time to time by the Required Lenders (including,
without limitation, Liens on assets acquired by the Borrower or a Subsidiary in
connection with any Permitted Acquisition). Such security interests, Liens and
mortgages shall be granted pursuant to documentation in form and substance
reasonably satisfactory to the Required Lenders and shall constitute valid and
perfected security interests and Liens, subject to no Liens other than Permitted
Liens. Without limitation of the foregoing, in connection with the grant of any
mortgage or deed of trust with respect to any interest in real property, the
Borrower will, and will cause each applicable Subsidiary to, at the Borrower's
expense, prepare, obtain and deliver to the Administrative Agent any
environmental assessments, appraisals, surveys, title insurance and other
matters or documents as the Administrative Agent may reasonably request or as
may be required under applicable banking laws and regulations.
(b) Parent will, and will cause each of its Subsidiaries to, make, execute,
endorse, acknowledge and deliver any amendments, modifications or supplements
hereto and restatements hereof and any other agreements, instruments or
documents, and take any and all such other actions, as may from time to time be
reasonably requested by the Administrative Agent or the Required Lenders to
perfect and maintain the validity and priority of the Liens granted pursuant to
the Security Documents and to effect, confirm or further assure or protect and
preserve the interests, rights and
66
remedies of the Administrative Agent and the Lenders under this Agreement
and the other Credit Documents.
6.11 Consents. The Borrower shall use its best efforts to obtain duly
--------
executed consents, in form and substance satisfactory to the Administrative
Agent, to the grant of a security interest by the Borrower pursuant to the
Borrower Pledge and Security Agreement in each contract listed on Annex D
thereto for which a consent has not previously been furnished as required by the
terms of such contract.
6.12 Year 2000. Parent will, and will cause each of its Subsidiaries to,
---------
take all necessary action to ensure that its computer-based systems are able to
operate and effectively process data including dates on and after January 1,
2000. At the request of the Administrative Agent, Parent will provide to the
Administrative Agent evidence acceptable to the Administrative Agent of Parent's
Year 2000 compatibility.
6.13 Interest Rate Protection. Within ninety (90) days after the Closing
------------------------
Date, the Borrower shall have entered into or obtained, and the Borrower will
thereafter maintain in full force and effect, Interest Rate Protection
Agreements in form and substance reasonably satisfactory to the Administrative
Agent the effect of which shall be to fix or limit interest rates payable by the
Borrower as to at least fifty percent (50%) of all principal amounts outstanding
at such date under all Funded Debt of the Borrower and its Subsidiaries for a
period of not less than three (3) years after such date. The Borrower will
deliver to the Administrative Agent, promptly upon receipt thereof, copies of
such Interest Rate Protection Agreements (and any supplements or amendments
thereto), and as soon as practicable after request therefor, any other
information reasonably requested by the Administrative Agent to evidence its
compliance with the provisions of this Section.
ARTICLE VII
FINANCIAL COVENANTS
Each of Parent and the Borrower covenants and agrees that, until the
termination of the Commitments, the termination or expiration of all Letters of
Credit and the payment in full of all principal and interest with respect to the
Loans and all Reimbursement Obligations together with all other amounts then due
and owing hereunder:
7.1 Leverage Ratio. Parent 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 below opposite such period:
67
Date Leverage Ratio
---- --------------
March 31, 1998 through
March 31, 1999 5.25 : 1.0
April 1, 1999 through
December 31, 1999 5.00 : 1.0
January 1, 2000 through
June 30, 2000 4.50 : 1.0
Thereafter 4.00 : 1.0
7.2 Interest Coverage Ratio. Parent will not permit the Interest Coverage
-----------------------
Ratio as of the last day of any fiscal quarter, beginning with the fiscal
quarter ending March 31, 1998, to be less than 2.5 : 1.0.
7.3 Fixed Charge Coverage Ratio. Parent will not permit the Fixed Charge
---------------------------
Coverage Ratio as of the last day of any fiscal quarter, beginning with the
fiscal quarter ending March 31, 1998, to be less than 1.10 : 1.0.
ARTICLE VIII
NEGATIVE COVENANTS
Each of Parent and the Borrower covenants and agrees that, until the
termination of the Commitments, the termination or expiration of all Letters of
Credit and the payment in full of all principal and interest with respect to the
Loans and all Reimbursement Obligations together with all other amounts then due
and owing hereunder:
8.1 Merger; Consolidation. Parent will not, and will not permit or cause
---------------------
any of its Subsidiaries to, liquidate, wind up or dissolve, or enter into any
consolidation, merger or other combination, or agree to do any of the foregoing;
provided, however, that:
-------- -------
(i) the Borrower may merge or consolidate with another Person so
long as (w) the Borrower is the surviving entity, (x) if such other Person
is a Subsidiary of the Borrower immediately prior to giving effect thereto,
the aggregate of any cash or other assets of the Borrower or any of its
Subsidiaries received as consideration pursuant to such transaction by
Persons other than the Borrower or a Wholly Owned Subsidiary of the
Borrower shall be deemed to constitute an Investment made by the Borrower
pursuant to clause (xiii) of SECTION 8.5, (y) if such other Person is not a
Subsidiary of the Borrower immediately prior to giving effect thereto, such
merger or consolidation shall constitute a Permitted Acquisition and the
applicable conditions and requirements of SECTIONS 6.8 and 6.9 shall be
satisfied, and (z) immediately after giving effect thereto, no Default or
Event of Default would exist; and
(ii) any Subsidiary of the Borrower may merge or consolidate with
another Person so long as (w) the surviving entity is the Borrower or a
Subsidiary Guarantor (which may be the acquired entity), (x) if such other
Person is a Subsidiary of the Borrower immediately prior
68
to giving effect thereto, the aggregate of any cash or other assets of the
Borrower or any of its Subsidiaries received as consideration pursuant to
such transaction by Persons other than the Borrower or a Wholly Owned
Subsidiary of the Borrower shall be deemed to constitute an Investment made
by the Borrower pursuant to clause (xiii) of SECTION 8.5, (y) if such other
Person is not a Subsidiary of the Borrower immediately prior to giving
effect thereto, such merger or consolidation shall constitute a Permitted
Acquisition and the applicable conditions and requirements of SECTIONS 6.8
and 6.9 shall be satisfied, and (z) immediately after giving effect
thereto, no Default or Event of Default would exist.
8.2 Indebtedness. Parent will not, and will not permit or cause any of
------------
its Subsidiaries to, create, incur, assume or suffer to exist any Indebtedness
other than:
(i) Indebtedness incurred under this Agreement, the Notes, the
Parent Guaranty and any Subsidiaries Guaranty;
(ii) Indebtedness of the Borrower (and, at the election of the
Borrower, any Designated Non-Guarantor Subsidiary described in clause (ii)
of the definition thereof) that is expressly subordinated and made junior
in right and time of payment to the Obligations and that is evidenced by
one or more written indentures, agreements or instruments having terms,
conditions and provisions (including, without limitation, terms and
provisions relating to principal amount, maturity, covenants, defaults,
interest, and subordination) satisfactory in form and substance to the
Required Lenders in their sole discretion and which shall provide, at a
minimum and without limitation, that such Indebtedness (a) shall mature by
its terms no earlier than the second anniversary of the Term Loan Maturity
Date, (b) shall not require any scheduled payment of principal prior to the
first anniversary of the Term Loan Maturity Date, (c) shall be unsecured,
(d) shall have covenants and undertakings that, taken as a whole, are
materially less restrictive than those contained herein, and (e) shall be
subordinated in right and time of payment to the Obligations on terms and
conditions no less favorable to the Lenders than those set forth in
Articles 10 and 11 of the Subordinated Note Indenture as in effect on the
date hereof prior to giving effect to the consummation of the Subordinated
Note Offer and the amendments to such indenture described therein (the
Indebtedness described hereinabove, "Permitted Subordinated Indebtedness");
provided that, as further conditions to the issuance of any Permitted
--------
Subordinated Indebtedness, (1) immediately after giving effect to the
issuance of such Permitted Subordinated Indebtedness, no Default or Event
of Default shall exist, (2) all indentures, agreements and instruments
evidencing or governing such Permitted Subordinated Indebtedness shall have
been approved in writing by the Required Lenders (or the Administrative
Agent on their behalf), and (3) prior to or concurrently with the issuance
of such Permitted Subordinated Indebtedness, the Borrower shall have
delivered to each Lender a certificate, signed by a Financial Officer of
the Borrower, satisfactory in form and substance to the Required Lenders
and to the effect that, after giving effect to the incurrence of such
Permitted Subordinated Indebtedness, the Borrower is in compliance with the
financial covenants set forth in SECTIONS 7.1 through 7.3, such compliance
being determined with regard to calculations made on a pro forma basis in
accordance with Generally Accepted Accounting Principles as of the last day
of the fiscal quarter then most recently ended and as if such Permitted
Subordinated Indebtedness had been incurred on the first day of the period
applicable to such covenants (such calculations to be attached to such
certificate);
(iii) accrued expenses (including salaries, accrued vacation and
other compensation), current trade or other accounts payable and other
current liabilities arising in
69
the ordinary course of business and not incurred through the borrowing of
money, provided that the same shall be paid within thirty (30) days of when
due except to the extent being contested in good faith and by appropriate
proceedings;
(iv) loans and advances by Parent, the Borrower or any Subsidiary
Guarantors to the Borrower or any other Subsidiary Guarantor, or by any
Subsidiary Guarantor to Parent or the Borrower, provided that any such loan
--------
or advance is subordinated in right and time of payment to the Obligations
and is evidenced by a promissory note, in form and substance satisfactory
to the Administrative Agent, pledged to the Administrative Agent pursuant
to the Security Documents;
(v) Indebtedness of the Borrower under Interest Rate Protection
Agreements entered into for the purpose of hedging interest rate risk and
not for speculation;
(vi) Indebtedness under Commodity Hedge Agreements entered into in
the ordinary course of business consistent with reasonable business
requirements and not for speculation;
(vii) Indebtedness of the type described in, and secured by Liens of
the type described in, clauses (iv) and (v) of SECTION 8.3;
(viii) Indebtedness consisting of guarantees made in the ordinary
course of business by the Borrower or any of its Subsidiaries of
obligations of the Borrower or any of its Subsidiaries, which obligations
are otherwise permitted under this Agreement (including guarantees of
indemnities and similar obligations in connection with Permitted
Acquisitions and Asset Dispositions permitted under SECTION 8.4);
(ix) Indebtedness of Parent in an aggregate principal amount not
exceeding $5,000,000 outstanding at any time issued to repurchase its
Capital Stock from former management employees in connection with their
termination or departure, which repurchases are permitted under SECTION 8.6
(provided that such Indebtedness is subordinated in right and time of
--------
payment to the Obligations on terms and conditions satisfactory to the
Administrative Agent in its sole discretion); and
(x) Indebtedness of the Borrower and its Subsidiaries incurred
solely to finance the payment of all or part of the purchase price of any
equipment, real property or other fixed assets acquired in the ordinary
course of business, including Indebtedness in respect of capital lease
obligations ("Purchase Money Indebtedness") and any refinancings, renewals
or replacements of any such Purchase Money Indebtedness (subject to the
limitations on the principal amount thereof set forth in this clause (x)),
and other Indebtedness of Parent and its Subsidiaries that is unsecured
(other than Indebtedness specified in clauses (i) through (ix) above),
which Purchase Money Indebtedness and other unsecured Indebtedness shall
not exceed $10,000,000 in the aggregate at any time.
8.3 Liens. Parent will not, and will not permit or cause any of its
-----
Subsidiaries to, directly or indirectly, make, create, incur, assume or suffer
to exist, any Lien upon or with respect to any part of its property or assets,
whether now owned or hereafter acquired, or file or permit the filing of, or
permit to remain in effect, any financing statement or other similar notice of
any Lien with respect to any such property, asset, income or profits under the
Uniform Commercial Code of any state or under
70
any similar recording or notice statute, or agree to do any of the foregoing,
other than the following (collectively, "Permitted Liens"):
(i) Liens created under the Security Documents;
(ii) Liens in existence on the Closing Date and set forth on
SCHEDULE 8.3;
(iii) Liens imposed by law with respect to property or assets of
the Borrower and its Subsidiaries, such as Liens of carriers, warehousemen,
mechanics, materialmen and landlords, and other similar Liens incurred in
the ordinary course of business for sums not constituting borrowed money
that are not overdue for a period of more than thirty (30) days or that are
being contested in good faith by appropriate proceedings and for which
adequate reserves have been established in accordance with Generally
Accepted Accounting Principles (if so required);
(iv) Liens (other than any Lien imposed by ERISA, the creation or
incurrence of which would result in an Event of Default under SECTION
9.1(j)) with respect to property or assets of the Borrower and its
Subsidiaries incurred 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 the performance of letters
of credit, bids, tenders, statutory obligations, surety and appeal bonds,
leases, government contracts and other similar obligations (other than
obligations for borrowed money) entered into in the ordinary course of
business;
(v) Liens for taxes, assessments or other governmental charges or
statutory obligations that are not delinquent or remain payable without any
penalty or that are being contested in good faith by appropriate
proceedings and for which adequate reserves have been established in
accordance with Generally Accepted Accounting Principles (if so required);
(vi) Liens securing the Purchase Money Indebtedness permitted under
clause (x) of SECTION 8.2, provided that the aggregate principal amount at
--------
any time outstanding of all Indebtedness secured by such Liens, when
combined with the aggregate amount of all other unsecured Indebtedness
outstanding at such time incurred pursuant to clause (x) of SECTION 8.2,
does not exceed $10,000,000, and provided further that any such Lien (i)
-------- -------
shall attach to such property concurrently with or within twenty (20) days
after the acquisition thereof by the Borrower or such Subsidiary, (ii)
shall not exceed the lesser of (y) the fair market value of such property
or (z) the cost thereof to the Borrower or such Subsidiary and (iii) shall
not encumber any other property of the Borrower or any of its Subsidiaries;
and the replacement, extension or renewal of any such Lien, provided that
--------
such replacement, extension or renewal Lien shall not extend to or cover
any property other than the property subject to such Lien immediately prior
to such replacement, extension or renewal, and provided further that the
-------- -------
Indebtedness secured by such replacement, extension or renewal Lien is
permitted under this Agreement;
(vii) any attachment or judgment Lien not constituting an Event of
Default under SECTION 9.1(I) that is being contested in good faith by
appropriate proceedings and for which adequate reserves have been
established in accordance with Generally Accepted Accounting Principles (if
so required);
71
(viii) Liens arising from the filing, for notice purposes only, of
financing statements in respect of operating leases;
(ix) Liens arising by operation of law in favor of depositary banks
and collecting banks, incurred in the ordinary course of business;
(x) Liens consisting of restrictions on the transfer of securities
pursuant to applicable federal and state securities laws;
(xi) interests of lessors and licensors under leases and licenses to
which the Borrower or any of its Subsidiaries is a party;
(xii) with respect to any real property occupied by the Borrower or
any of its Subsidiaries, all easements, rights of way, licenses and similar
encumbrances on title that do not materially impair the use of such
property for its intended purposes; and
(xiii) Liens in favor of the trustee or agent under any agreement or
indenture relating to Permitted Subordinated Indebtedness, covering sums
required to be deposited with such trustee or agent thereunder.
8.4 Disposition of Assets. Parent will not, and will not permit or cause
---------------------
any of its Subsidiaries to, sell, assign, lease, convey, transfer or otherwise
dispose of (whether in one or a series of transactions) all or any portion of
its assets, business or properties (including, without limitation, any Capital
Stock of any Subsidiary), or enter into any arrangement with any Person
providing for the lease by Parent or any Subsidiary as lessee of any asset that
has been sold or transferred by Parent or such Subsidiary to such Person, or
agree to do any of the foregoing, except for:
(i) sales of inventory and licenses or leases of intellectual
property and other assets by the Borrower and its Subsidiaries, in each
case in the ordinary course of business;
(ii) the sale or exchange by the Borrower or any of its Subsidiaries
of used or obsolete equipment to the extent (y) the proceeds of such sale
are applied towards, or such equipment is exchanged for, replacement
equipment or (z) such equipment is no longer necessary for the operations
of the Borrower or its applicable Subsidiary in the ordinary course of
business;
(iii) the sale or other disposition of any or all right, title and
interest of the Borrower and its Subsidiaries in and to the assets and
properties (other than cash) directly associated with the publications
listed in SCHEDULE 8.4 (such assets and properties, collectively, the
"Scheduled Titles"), and the sale or other disposition of any Investments
made by the contribution of any of the Scheduled Titles to a joint venture,
partnership or other Person (which may be a Subsidiary) as permitted by
clause (xiii) of SECTION 8.5, in each case provided that, in the good faith
--------
judgment of the Borrower, fair value is received in exchange for such sale
or other disposition;
(iv) the sale, lease or other disposition of assets by a Subsidiary
of the Borrower to the Borrower or to another Wholly Owned Subsidiary of
the Borrower if, immediately after giving effect thereto, no Default or
Event of Default would exist; and
72
(v) the sale or disposition of assets by Parent or any of its
Subsidiaries outside the ordinary course of business for cash, provided
--------
that (w) the Net Cash Proceeds from such sales or dispositions, when
aggregated with the Net Cash Proceeds from all other sales and dispositions
not otherwise specifically permitted under this SECTION 8.4 that are
consummated during the same fiscal quarter or the period of three
consecutive fiscal quarters immediately prior thereto, do not exceed
$10,000,000 in the aggregate for Parent and its Subsidiaries, (x) to the
extent not theretofore expended or committed to be expended within a
reasonable period to acquire assets or properties or otherwise reinvested
in the businesses of the Borrower, such Net Cash Proceeds are delivered to
the Administrative Agent within 180 days after receipt thereof for
application in prepayment of the Loans in accordance with the provisions of
SECTION 2.6(e), (y) in no event shall Parent or any of its Subsidiaries
sell or otherwise dispose of any of the Capital Stock of any Subsidiary
(other than a Subsidiary to which the Borrower has contributed no assets or
properties other than assets consisting of Scheduled Titles), and (z)
immediately after giving effect thereto, no Default or Event of Default
would exist.
8.5 Investments. Parent will not, and will not permit or cause any of its
-----------
Subsidiaries to, directly or indirectly, purchase, own, invest in or otherwise
acquire any Capital Stock, evidence of indebtedness or other obligation or
security or any interest whatsoever in any other Person, or make or permit to
exist any loans, advances or extensions of credit to, or any investment in cash
or by delivery of property in, any other Person, or purchase or otherwise
acquire (whether in one or a series of related transactions) any portion of the
assets, business or properties of another Person (including pursuant to an
Acquisition), or create or acquire any Subsidiary, or become a partner or joint
venturer in any partnership or joint venture (collectively, "Investments"), or
make a commitment or otherwise agree to do any of the foregoing, other than:
(i) Investments in Cash Equivalents;
(ii) Investments consisting of (a) purchases and acquisitions of
inventory, supplies, materials and equipment, or (b) licenses or leases of
intellectual property and other assets, in each case in the ordinary course
of business,
(iii) Investments consisting of loans and advances to employees
for reasonable travel, relocation and business expenses in the ordinary
course of business, extensions of trade credit in the ordinary course of
business, and prepaid expenses incurred in the ordinary course of business;
(iv) without duplication, Investments consisting of Indebtedness
permitted under clause (v) of SECTION 8.2;
(v) Investments existing on the Closing Date and described in
SCHEDULE 8.5;
(vi) Investments of the Borrower under Interest Rate Protection
Agreements entered into for the purpose of hedging interest rate risk and
not for speculation;
(vii) Investments under Commodity Hedge Agreements entered into in
the ordinary course of business consistent with reasonable business
requirements and not for speculation;
(viii) Investments consisting of endorsements for collection or
deposit in the ordinary course of business;
73
(ix) Investments consisting of the making of capital contributions
or the purchase of Capital Stock (a) by Parent in the Borrower, (b) by the
Borrower or any Subsidiary in any other Subsidiary that is (or after giving
effect to such Investment will be) a Subsidiary Guarantor, and (c) by any
Subsidiary in the Borrower;
(x) Permitted Acquisitions;
(xi) Investments of Parent contemplated by the activities described
in SECTION 8.8(b);
(xii) Investments of the Borrower and its Subsidiaries consisting
of the licensing of publication titles and other assets pursuant to joint
marketing arrangements with other Persons;
(xiii) Investments (other than Investments specified in clauses (i)
through (xii) above) of the Borrower and its Subsidiaries in an aggregate
amount, as valued at the time each such Investment is made, not exceeding
$25,000,000 for all such Investments from and after the Closing Date (which
Investments may include, without limitation, (a) Investments in Foreign
Subsidiaries and other Designated Non-Guarantor Subsidiaries, (b)
Investments consisting of the contribution by the Borrower to partnerships,
joint ventures or other Persons (including Subsidiaries) of the Scheduled
Titles and any additional Investments in such Persons, including equity and
debt Investments in Persons formed to develop, promote and operate affinity
group marketing programs, and (c) cash or other assets of the Borrower or
any of its Subsidiaries received as consideration by any Person other than
the Borrower or a Wholly Owned Subsidiary of the Borrower in a transaction
permitted by SECTION 8.1);
(xiv) Investments in Capital Stock of Parent permitted under
clause (v) of SECTION 8.6; and
(xv) Investments existing as of the Closing Date by the Borrower in
▇▇▇▇▇▇▇▇ Capital Corp.
8.6 Restricted Payments. (a) Parent will not, and will not permit or
-------------------
cause any of its Subsidiaries to, directly or indirectly, declare or make any
dividend payment, or make any other distribution of cash, property or assets, in
respect of any of its Capital Stock or any warrants, rights or options to
acquire its Capital Stock, or purchase, redeem, retire or otherwise acquire for
value any shares of its Capital Stock or any warrants, rights or options to
acquire its Capital Stock, or set aside funds for any of the foregoing, except
that:
(i) any Credit Party may declare and make dividend payments or
other distributions payable solely in its Qualified Capital Stock (provided
--------
that, in the case of any such dividends or distributions by the Borrower or
any of its Subsidiaries, such Capital Stock is pledged to the
Administrative Agent pursuant to the Borrower Pledge and Security
Agreement, the Parent Pledge and Security Agreement or a Subsidiaries
Pledge and Security Agreement, as applicable);
(ii) each Wholly Owned Subsidiary of the Borrower may declare and
make dividend payments or other distributions to the Borrower or another
Wholly Owned Subsidiary of the Borrower, to the extent not prohibited under
applicable Requirements of Law;
74
(iii) the Borrower may declare and make cash dividend payments to
Parent from time to time in amounts necessary to enable Parent to pay
required federal, state and local income taxes in respect of that portion
of its consolidated earnings attributable to the operations of the Borrower
and its Subsidiaries;
(iv) so long as no Default or Event of Default shall have occurred
and is continuing or would result therefrom, the Borrower may make dividend
payments or other distributions of cash to Parent in an amount not in
excess of (y) $2,500,000 per fiscal year solely for the purpose of paying
fees and expenses of the Credit Parties, including directors' fees, less
(z) the amount of any management, advisory, consulting and similar fees
paid by the Borrower to ▇▇▇▇▇▇ ▇▇▇▇▇ and its Affiliates during such fiscal
year; and
(v) so long as no Default or Event of Default shall have occurred
and is continuing or would result therefrom, (y) Parent may repurchase its
Capital Stock from former management employees in connection with their
termination or departure, in an aggregate amount not to exceed $12,500,000
for all such repurchases from and after the Closing Date, and (z) the
Borrower may make dividend payments or other distributions of cash to
Parent for the purpose of effecting such repurchases.
(b) Parent will not, and will not permit or cause any of its Subsidiaries
to, make (or give any notice in respect of) any voluntary or optional payment or
prepayment of principal on, or directly or indirectly make any redemption
(including pursuant to any change of control provision), retirement, defeasance
or other acquisition for value of, any Permitted Subordinated Indebtedness, or
make any deposit or otherwise set aside funds for any of the foregoing purposes.
8.7 Transactions with Affiliates. Parent will not, and will not permit or
----------------------------
cause any of its Subsidiaries to, enter into any material transaction
(including, without limitation, any purchase, sale, lease or exchange of
property or the rendering of any service) with any officer, director,
stockholder or other Affiliate of Parent or any Subsidiary, except in the
ordinary course of its business and upon fair and reasonable terms that are no
less favorable to it than would obtain in a comparable arm's length transaction
with a Person other than an Affiliate of Parent or such Subsidiary; provided,
--------
however, that nothing contained in this Section shall prohibit:
-------
(i) transactions described on SCHEDULE 8.7 or otherwise expressly
permitted under this Agreement;
(ii) transactions among any of Parent and its Wholly Owned
Subsidiaries;
(iii) transactions for the purpose of developing, promoting and
operating focused marketing programs that identify and solicit memberships
from targeted demographic groups for the purpose of selling specialized
products and services, provided that Parent and its Subsidiaries remain in
--------
compliance with the applicable provisions of this Agreement (including,
without limitation, the restrictions on Investments set forth in clause
(xiii) of SECTION 8.5);
(iv) the consummation on the Closing Date of the Transactions; and
(v) transactions after the Closing Date that are expressly
contemplated by the Securities Purchase Agreement and the Securityholders
Agreement (including any registration
75
rights described therein) and that are not prohibited by any other
provision of this Agreement or any other Credit Document, provided that the
--------
aggregate management, advisory, consulting and similar fees paid by the
Borrower to ▇▇▇▇▇▇ ▇▇▇▇▇ and its Affiliates pursuant to the Securities
Purchase Agreement or otherwise shall not exceed (y) $1,000,000 during any
fiscal year less (z) the amount of any distributions made by the Borrower
during such fiscal year pursuant to SECTION 8.6(a)(iv), and provided
--------
further that any such fees may accrue but shall not be paid by the Borrower
-------
at any time after the occurrence and during the continuance of a Default or
Event of Default.
8.8 Lines of Business. (a) The Borrower will not, and will not permit or
-----------------
cause any of its Subsidiaries to, engage in any businesses other than (i) the
publishing, programming and media business engaged in by it on the date hereof
and ancillary businesses and activities reasonably related thereto, including,
without limitation, licensing of brand names, event management, and affinity
group marketing (the "Existing Lines of Business"), and (ii) subject to the
provisions of SECTION 6.8, other media businesses that are not within the
Existing Lines of Business and that are acquired pursuant to a Permitted
Acquisition, and ancillary businesses and activities reasonably related thereto
(any such business described in this clause (ii), a "Permitted New Media
Business").
(b) Parent will not engage in any business or activity other than (i) the
ownership of equity interests in the Borrower and the exercise of rights and
performance of obligations in connection therewith, (ii) the entry into, and
exercise of rights and performance of obligations in respect of, (A) this
Agreement, the Parent Guaranty and any other Credit Documents to which it is or
may become a party, (B) contracts and agreements with or for the benefit of
officers, directors and employees of it or any Subsidiary thereof relating to
their employment or directorships, (C) insurance policies and related contracts
and agreements and (D) equity subscription agreements, registration rights
agreements, warrant agreements, voting and other stockholder agreements,
engagement letters, underwriting agreements and other agreements in respect of
its equity securities or any offering, issuance or sale thereof, (iii) the
offering, issuance and sale of its equity securities to the extent such
offering, issuance or sale does not constitute a Default or Event of Default,
(iv) the filing of registration statements, and compliance with applicable
reporting and other obligations, under federal, state or other securities laws,
(v) the performance of obligations under and compliance with its certificate of
incorporation and by-laws, or any applicable law, ordinance, regulation, rule,
order, judgment, decree or permit, including, without limitation, as a result of
or in connection with the activities of its Subsidiaries, (vi) the performance
of contractual obligations not otherwise prohibited hereunder, (vii) the
incurrence and payment of its business and operating expenses and any taxes for
which it may be liable, and (viii) other activities reasonably incidental or
related to the foregoing. Parent will not, directly or indirectly, create or
own any Subsidiary other than the Borrower and its Subsidiaries permitted
hereunder.
8.9 Certain Amendments. Parent will not, and will not permit or cause any
------------------
of its Subsidiaries to, (i) amend, modify or waive, or permit the amendment,
modification or waiver of, any provision of any indenture, agreement or
instrument evidencing or governing any Permitted Subordinated Indebtedness, the
effect of which would be to (a) increase the principal amount due thereunder,
(b) shorten or accelerate the time of payment of any amount due thereunder, (c)
increase the applicable interest rate or amount of any fees or costs due
thereunder, (d) amend any of the subordination provisions thereunder (including
any of the definitions relating thereto), (e) make any covenant therein more
restrictive or add any new covenant, or (f) otherwise materially and adversely
affect the Lenders, or breach or otherwise violate any of the subordination
provisions applicable thereto, including, without limitation, restrictions
against payment of principal and interest thereon, or
76
(ii) amend, modify or change any provision of its articles of organization,
certificate of incorporation, limited liability company operating agreement or
bylaws, as applicable, or the terms of any class or series of its Capital Stock,
other than in a manner that could not reasonably be expected to materially and
adversely affect the Lenders.
8.10 Limitation on Certain Restrictions. Parent will not, and will not
----------------------------------
permit or cause any of its Subsidiaries to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any restriction or
encumbrance on (i) the right of any Credit Party to perform and comply with its
obligations under the Credit Documents or (ii) the right of any Subsidiary of
the Borrower to make any dividend payments or other distributions in respect of
its Capital Stock, to repay Indebtedness owed to the Borrower or any other
Subsidiary of the Borrower, to make loans or advances to the Borrower or any
other Subsidiary of the Borrower, or to transfer any of its assets or properties
to the Borrower or any other Subsidiary of the Borrower, in each case other than
such restrictions or encumbrances existing under or by reason of (i) the Credit
Documents, (ii) applicable Requirements of Law, (iii) customary non-assignment
provisions in any lease governing a leasehold interest, (iv) the terms of
licenses or trademarks and copyrights entered into in the ordinary course of
business, and (v) other contractual restrictions in respect of assets not
material to the business of the Credit Parties, taken as a whole.
8.11 No Other Negative Pledges. Parent will not, and will not permit or
-------------------------
cause any of its Subsidiaries to, directly or indirectly, enter into or suffer
to exist any agreement or restriction that prohibits or conditions the creation,
incurrence or assumption of any Lien upon or with respect to any part of its
property or assets, whether now owned or hereafter acquired, or agree to do any
of the foregoing, other than as set forth in (i) this Agreement and the Security
Documents, (ii) any indenture, agreement or instrument evidencing or governing
any Permitted Subordinated Indebtedness, (iii) any agreement or instrument
creating a Permitted Lien (but only to the extent such agreement or restriction
applies to the assets subject to such Permitted Lien), (iv) operating leases of
real or personal property entered into by the Borrower or any of its
Subsidiaries as lessee in the ordinary course of business, (v) interests of
licensors in licenses entered into by the Borrower or any of its Subsidiaries as
licensee in the ordinary course of business, and (vi) restrictions on
assignability in other contracts not material to the business of the Credit
Parties, taken as a whole.
8.12 Fiscal Year. Parent will not, and will not permit or cause any of its
-----------
Subsidiaries to, change the ending date of its fiscal year to a date other than
December 31.
8.13 Accounting Changes. Parent will not, and will not permit or cause any
------------------
of its Subsidiaries to, make or permit any material change in its accounting
policies or reporting practices, except as may be required by Generally Accepted
Accounting Principles.
8.14 Designated Senior Indebtedness. The Borrower will not designate any
------------------------------
Indebtedness other than the Indebtedness under this Agreement as "Designated
Senior Indebtedness" for purposes of any Permitted Subordinated Indebtedness.
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ARTICLE IX
EVENTS OF DEFAULT
9.1 Events of Default. The occurrence of any one or more of the following
-----------------
events shall constitute an "Event of Default":
(a) The Borrower shall fail to pay any principal of any Loan or any
Reimbursement Obligation when due;
(b) The Borrower shall fail to pay any interest on any Loan, any fee or
any other Obligation (other than as set forth in subsection (a) above) when due,
and such failure shall continue unremedied for three (3) days;
(c) Parent or the Borrower shall fail to observe, perform or comply with
any condition, covenant or agreement contained in any of SECTIONS 2.14,
6.2(e)(i), 6.3(i), 6.8, 6.9, ARTICLE VII or ARTICLE VIII;
(d) The Borrower or any other Credit Party shall fail to observe, perform
or comply with any condition, covenant or agreement contained in this Agreement
or any of the other Credit Documents other than those enumerated in subsections
(a), (b) and (c) above, and such failure shall continue unremedied for any grace
period specifically applicable thereto or, if no such grace period is
applicable, for a period of thirty (30) days after the earlier of (i) the date
on which a Responsible Officer of the Borrower acquires knowledge thereof and
(ii) the date on which written notice thereof is delivered by the Administrative
Agent or any Lender to the Borrower;
(e) Any representation or warranty made or deemed made by or on behalf of
the Borrower or any other Credit Party in this Agreement, any of the other
Credit Documents or in any certificate, instrument, report or other document
furnished in connection herewith or therewith or in connection with the
transactions contemplated hereby or thereby shall prove to have been false or
misleading in any material respect as of the time made, deemed made or
furnished;
(f) The Borrower or any other Credit Party shall (i) fail to pay when due
(whether by scheduled maturity, acceleration or otherwise and after giving
effect to any applicable grace period) any principal of or interest on any
Indebtedness (other than the Indebtedness incurred pursuant to this Agreement)
having an aggregate principal amount of at least $1,000,000; or (ii) fail to
observe, perform or comply with any condition, covenant or agreement contained
in any agreement or instrument evidencing or relating to any such Indebtedness,
or any other event shall occur or condition exist in respect thereof, and the
effect of such failure, event or condition is to cause, or permit the holder or
holders of such Indebtedness (or a trustee or agent on its or their behalf) to
cause (with the giving of notice, lapse of time, or both), such Indebtedness to
become due, or to be prepaid, redeemed, purchased or defeased, prior to its
stated maturity;
(g) The Borrower or any other Credit Party (other than a Designated Non-
Guarantor Subsidiary) shall (i) file a voluntary petition or commence a
voluntary case seeking liquidation, winding-up, reorganization, dissolution,
arrangement, readjustment of debts or any other relief under the Bankruptcy Code
or under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, (ii) consent to the institution of, or fail to controvert
in a timely and appropriate manner, any petition or case of the type described
in subsection (h) below, (iii) apply for or consent to
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the appointment of or taking possession by a custodian, trustee, receiver or
similar official for or of itself or all or a substantial part of its properties
or assets, (iv) fail generally, or admit in writing its inability, to pay its
debts generally as they become due, (v) make a general assignment for the
benefit of creditors or (vi) take any corporate action to authorize or approve
any of the foregoing;
(h) Any involuntary petition or case shall be filed or commenced against
the Borrower or any other Credit Party (other than a Designated Non-Guarantor
Subsidiary) seeking liquidation, winding-up, reorganization, dissolution,
arrangement, readjustment of debts, the appointment of a custodian, trustee,
receiver or similar official for it or all or a substantial part of its
properties or any other relief under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect, and
such petition or case shall continue undismissed and unstayed for a period of
sixty (60) days; or an order, judgment or decree approving or ordering any of
the foregoing shall be entered in any such proceeding;
(i) Any one or more money judgments, writs or warrants of attachment,
executions or similar processes involving an aggregate amount (exclusive of
amounts fully bonded or covered by insurance as to which the surety or insurer,
as the case may be, has acknowledged its liability in writing) in excess of
$1,000,000 shall be entered or filed against the Borrower or any other Credit
Party or any of their respective properties and the same shall not be dismissed,
stayed or discharged for a period of thirty (30) days or in any event later than
five days prior to the date of any proposed sale thereunder;
(j) Any ERISA Event shall occur or exist with respect to any Plan or
Multiemployer Plan, and such ERISA Event, together with all other ERISA Events
then existing, if any, could be reasonably expected to have a Material Adverse
Effect;
(k) The ▇▇▇▇▇▇▇▇ License Agreement shall be terminated or shall, for any
other reason, fail to be in full force and effect and enforceable in accordance
with its terms in all material respects;
(l) Any Security Document to which any Credit Party is now or hereafter a
party shall for any reason cease to be in full force and effect or cease to be
effective to give the Administrative Agent a valid and perfected security
interest in and Lien upon any material portion of the Collateral purported to be
covered thereby, subject to no Liens other than Permitted Liens, in each case
unless any such cessation occurs in accordance with the terms thereof or
pursuant to a transaction permitted under clause (iii) or (iv) of SECTION 8.1 or
is due to any act or failure to act on the part of the Administrative Agent, or
any Lender, or any Credit Party shall assert any of the foregoing;
(m) The Parent Guaranty or any Subsidiaries Guaranty shall cease to be in
full force and effect (unless any such cessation occurs in accordance with the
terms thereof or pursuant to a transaction permitted under clause (iii) or (iv)
of SECTION 8.1), or Parent or any Person acting on its behalf shall deny or
disaffirm such Credit Party's obligations under the Parent Guaranty, or any
Subsidiary or any Person acting on its behalf shall deny or disaffirm such
Subsidiary's obligations under any Subsidiaries Guaranty; or
(n) Any of the following shall occur: (i) Parent shall cease to own,
directly or indirectly, 100% of the outstanding Capital Stock of the Borrower;
(ii) Parent shall cease to have, directly or indirectly, the sole right and
authority to exercise control over the management of the Borrower; (iii) any
Person or group of Persons acting in concert as a partnership or other group
(other than the Permitted Holders) shall, as a result of a tender or exchange
offer, open market purchases, privately
79
negotiated purchases or otherwise, have become, after the date hereof, the
beneficial owner of securities of Parent representing 30% or more of the
combined voting power of the then outstanding securities of Parent ordinarily
(and apart from rights accruing under special circumstances) having the right to
vote in the election of directors; or (iv) the Board of Directors of Parent
shall cease to consist of a majority of the individuals who constituted the
Board of Directors as of the date hereof or who shall have become a member
thereof subsequent to the date hereof after having been nominated, or otherwise
approved in writing, by at least a majority of individuals who constituted the
Board of Directors of Parent as of the date hereof (or their replacements
approved as herein required).
9.2 Remedies: Termination of Commitments, Acceleration, etc. Upon and at
-------------------------------------------------------
any time after the occurrence and during the continuance of any Event of
Default, the Administrative Agent shall at the direction, or may with the
consent, of the Required Lenders, take any or all of the following actions at
the same or different times:
(a) Declare the Commitments, the Swingline Commitment, and the Issuing
Lender's obligation to issue Letters of Credit, to be terminated, whereupon the
same shall terminate (provided that, upon the occurrence of an Event of Default
--------
pursuant to SECTION 9.1(g) or SECTION 9.1(h), the Commitments, the Swingline
Commitment, and the Issuing Lender's obligation to issue Letters of Credit shall
automatically be terminated);
(b) Declare all or any part of the outstanding principal amount of the
Loans to be immediately due and payable, whereupon the principal amount so
declared to be immediately due and payable, together with all interest accrued
thereon and all other amounts payable under this Agreement, the Notes and the
other Credit Documents, shall become immediately due and payable without
presentment, demand, protest, notice of intent to accelerate or other notice or
legal process of any kind, all of which are hereby knowingly and expressly
waived by the Borrower (provided that, upon the occurrence of an Event of
--------
Default pursuant to SECTION 9.1(g) or SECTION 9.1(h), all of the outstanding
principal amount of the Loans and all other amounts described in this subsection
(b) shall automatically become immediately due and payable without presentment,
demand, protest, notice of intent to accelerate or other notice or legal process
of any kind, all of which are hereby knowingly and expressly waived by the
Borrower);
(c) Direct the Borrower to deposit (and the Borrower hereby agrees,
forthwith upon receipt of notice of such direction from the Administrative
Agent, to deposit) with the Administrative Agent from time to time such
additional amount of cash as is equal to the aggregate Stated Amount of all
Letters of Credit then outstanding (whether or not any beneficiary under any
Letter of Credit shall have drawn or be entitled at such time to draw
thereunder), such amount to be held by the Administrative Agent in the Cash
Collateral Account as security for the Letter of Credit Exposure as described in
SECTION 3.9; and
(d) Exercise all rights and remedies available to it under this Agreement,
the other Credit Documents and applicable law.
9.3 Remedies: Set-Off. In addition to all other rights and remedies
-----------------
available under the Credit Documents or applicable law or otherwise, upon and at
any time after the occurrence and during the continuance of any Event of
Default, each Lender may, and each is hereby authorized by the Borrower, at any
such time and from time to time, to the fullest extent permitted by applicable
law, without presentment, demand, protest or other notice of any kind, all of
which are hereby knowingly and expressly waived by the Borrower, to set off and
to apply any and all deposits (general or special,
80
time or demand, provisional or final) and any other property at any time held
(including at any branches or agencies, wherever located), and any other
indebtedness at any time owing, by such Lender to or for the credit or the
account of the Borrower against any or all of the Obligations to such Lender now
or hereafter existing, whether or not such Obligations may be contingent or
unmatured, the Borrower hereby granting to each Lender a continuing security
interest in and Lien upon all such deposits and other property as security for
such Obligations. Each Lender agrees to notify the Borrower promptly after any
such set-off and application; provided, however, that the failure to give such
-------- -------
notice shall not affect the validity of such set-off and application.
ARTICLE X
THE ADMINISTRATIVE AGENT
10.1 Appointment. Each Lender hereby irrevocably appoints and authorizes
-----------
First Union to act as Administrative Agent hereunder and under the other Credit
Documents and to take such actions as agent on its behalf hereunder and under
the other Credit Documents, and to exercise such powers and to perform such
duties, as are specifically delegated to the Administrative Agent by the terms
hereof or thereof, together with such other powers and duties as are reasonably
incidental thereto.
10.2 Nature of Duties. The Administrative Agent shall have no duties or
----------------
responsibilities other than those expressly set forth in this Agreement and the
other Credit Documents. The Administrative Agent shall not have, by reason of
this Agreement or any other Credit Document, a fiduciary relationship in respect
of any Lender; and nothing in this Agreement or any other Credit Document,
express or implied, is intended to or shall be so construed as to impose upon
the Administrative Agent any obligations or liabilities in respect of this
Agreement or any other Credit Document except as expressly set forth herein or
therein. The Administrative Agent may execute any of its duties under this
Agreement or any other Credit Document by or through agents or attorneys-in-fact
and shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact that it selects with reasonable care. The Administrative Agent
shall be entitled to consult with legal counsel, independent public accountants
and other experts selected by it with respect to all matters pertaining to this
Agreement and the other Credit Documents and its duties hereunder and thereunder
and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants or
experts. The Lenders hereby acknowledge that the Administrative Agent shall not
be under any duty to take any discretionary action permitted to be taken by it
pursuant to the provisions of this Agreement or any other Credit Document unless
it shall be requested in writing to do so by the Required Lenders (or, where a
higher percentage of the Lenders is expressly required hereunder, such Lenders).
10.3 Exculpatory Provisions. Neither the Administrative Agent nor any of
----------------------
its officers, directors, employees, agents, attorneys-in-fact or Affiliates
shall be (i) liable for any action taken or omitted to be taken by it or such
Person under or in connection with the Credit Documents, except for its or such
Person's own gross negligence or willful misconduct, (ii) responsible in any
manner to any Lender for any recitals, statements, information, representations
or warranties herein or in any other Credit Document or in any document,
instrument, certificate, report or other writing delivered in connection
herewith or therewith, for the execution, effectiveness, genuineness, validity,
enforceability or sufficiency of this Agreement or any other Credit Document, or
for the financial condition of the Borrower, its Subsidiaries or any other
Person, or (iii) required to ascertain or make any inquiry concerning the
performance or observance of any of the terms, provisions or conditions of this
81
Agreement or any other Credit Document or the existence or possible existence of
any Default or Event of Default, or to inspect the properties, books or records
of the Borrower or any of its Subsidiaries.
10.4 Reliance by Administrative Agent. The Administrative Agent shall be
--------------------------------
entitled to rely, and shall be fully protected in relying, upon any notice,
statement, consent or other communication (including, without limitation, any
thereof by telephone, telecopy, telex, telegram or cable) believed by it in good
faith to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons. The Administrative Agent may deem and treat each
Lender as the owner of its interest hereunder for all purposes hereof unless and
until a written notice of the assignment, negotiation or transfer thereof shall
have been given to the Administrative Agent in accordance with the provisions of
this Agreement. The Administrative Agent shall be entitled to refrain from
taking or omitting to take any action in connection with this Agreement or any
other Credit Document (i) if such action or omission would, in the reasonable
opinion of the Administrative Agent, violate any applicable law or any provision
of this Agreement or any other Credit Document or (ii) unless and until it shall
have received such advice or concurrence of the Required Lenders (or, where a
higher percentage of the Lenders is expressly required hereunder, such Lenders)
as it deems appropriate or it shall first have been indemnified to its
satisfaction by the Lenders against any and all liability and expense (other
than liability and expense arising from its own gross negligence or willful
misconduct) that may be incurred by it by reason of taking, continuing to take
or omitting to take any such action. Without limiting the foregoing, no Lender
shall have any right of action whatsoever against the Administrative Agent as a
result of the Administrative Agent's acting or refraining from acting hereunder
or under any other Credit Document in accordance with the instructions of the
Required Lenders (or, where a higher percentage of the Lenders is expressly
required hereunder, such Lenders), and such instructions and any action taken or
failure to act pursuant thereto shall be binding upon all of the Lenders
(including all subsequent Lenders).
10.5 Non-Reliance on Administrative Agent and Other Lenders. Each Lender
------------------------------------------------------
expressly acknowledges that neither the Administrative Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates has made
any representation or warranty to it and that no act by the Administrative Agent
or any such Person hereafter taken, including any review of the affairs of the
Borrower and its Subsidiaries, shall be deemed to constitute any representation
or warranty by the Administrative Agent to any Lender. Each Lender represents to
the Administrative Agent that (i) it has, independently and without reliance
upon the Administrative Agent or any other Lender and based on such documents
and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, properties, financial
and other condition and creditworthiness of the Borrower and its Subsidiaries
and made its own decision to enter into this Agreement and extend credit to the
Borrower hereunder, and (ii) it will, independently and without reliance upon
the Administrative Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action
hereunder and under the other Credit Documents and to make such investigation as
it deems necessary to inform itself as to the business, prospects, operations,
properties, financial and other condition and creditworthiness of the Borrower
and its Subsidiaries. Except as expressly provided in this Agreement and the
other Credit Documents, the Administrative Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide any Lender
with any credit or other information concerning the business, prospects,
operations, properties, financial or other condition or creditworthiness of the
Borrower, its Subsidiaries or any other Person that may at any time come into
the possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates.
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10.6 Notice of Default. The Administrative Agent shall not be deemed to
-----------------
have knowledge or notice of the occurrence of any Default or Event of Default
unless the Administrative Agent shall have received written notice from the
Borrower or a Lender referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default." In the
event that the Administrative Agent receives such a notice, the Administrative
Agent will give notice thereof to the Lenders as soon as reasonably practicable;
provided, however, that if any such notice has also been furnished to the
-------- -------
Lenders, the Administrative Agent shall have no obligation to notify the Lenders
with respect thereto. The Administrative Agent shall (subject to SECTIONS 10.4
and 11.6) take such action with respect to such Default or Event of Default as
shall reasonably be directed by the Required Lenders; provided that, unless and
--------
until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests 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 of the Lenders.
10.7 Indemnification. To the extent the Administrative Agent is not
---------------
reimbursed by or on behalf of the Borrower, and without limiting the obligation
of the Borrower to do so, the Lenders agree (i) to indemnify the Administrative
Agent and its officers, directors, employees, agents, attorneys-in-fact and
Affiliates, ratably in proportion to their respective percentages as used in
determining the Required Lenders as of the date of determination, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including, without limitation,
attorneys' fees and expenses) or disbursements of any kind or nature whatsoever
that may at any time (including, without limitation, at any time following the
repayment in full of the Loans and the termination of the Commitments) be
imposed on, incurred by or asserted against the Administrative Agent in any way
relating to or arising out of this Agreement or any other Credit Document or any
documents contemplated by or referred to herein or the transactions contemplated
hereby or thereby or any action taken or omitted by the Administrative Agent
under or in connection with any of the foregoing, and (ii) to reimburse the
Administrative Agent upon demand, ratably in proportion to their respective
percentages as used in determining the Required Lenders as of the date of
determination, for any expenses incurred by the Administrative Agent in
connection with the preparation, negotiation, execution, delivery,
administration, amendment, modification, waiver or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement or any of the other Credit
Documents (including, without limitation, reasonable attorneys' fees and
expenses and compensation of agents and employees paid for services rendered on
behalf of the Lenders); provided, however, that no Lender shall be liable for
-------- -------
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements to the extent
resulting from the gross negligence or willful misconduct of the party to be
indemnified.
10.8 The Administrative Agent in its Individual Capacity. With respect to
---------------------------------------------------
its Commitments, the Loans made by it, the Letters of Credit issued or
participated in by it and the Note or Notes issued to it, the Administrative
Agent in its individual capacity and not as Administrative Agent shall have the
same rights and powers under the Credit Documents as any other Lender and may
exercise the same as though it were not performing the agency duties specified
herein; and the terms "Lenders," "Required Lenders," "holders of Notes" and any
similar terms shall, unless the context clearly otherwise indicates, include the
Administrative Agent in its individual capacity. The Administrative Agent and
its Affiliates may accept deposits from, lend money to, make investments in,
83
and generally engage in any kind of banking, trust, financial advisory or other
business with the Borrower, any of its Subsidiaries or any of their respective
Affiliates as if the Administrative Agent were not performing the agency duties
specified herein, and may accept fees and other consideration from any of them
for services in connection with this Agreement and otherwise without having to
account for the same to the Lenders.
10.9 Successor Administrative Agent. The Administrative Agent may resign
------------------------------
at any time by giving ten (10) days' prior written notice to the Borrower and
the Lenders. Upon any such notice of resignation, the Required Lenders will,
with the prior written consent of the Borrower (which consent shall not be
unreasonably withheld), appoint from among the Lenders a successor to the
Administrative Agent (provided that the Borrower's consent shall not be required
--------
in the event a Default or Event of Default shall have occurred and be
continuing). If no successor to the Administrative Agent shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within such ten-day period, then the retiring Administrative Agent may, on
behalf of the Lenders and after consulting with the Lenders and the Borrower,
appoint a successor Administrative Agent from among the Lenders. Upon the
acceptance of any appointment as Administrative Agent by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Administrative Agent, and the retiring Administrative Agent
shall be discharged from its duties and obligations hereunder and under the
other Credit Documents. After any retiring Administrative Agent's resignation as
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 Administrative
Agent. If no successor to the Administrative Agent has accepted appointment as
Administrative Agent by the thirtieth (30th) day following a retiring
Administrative Agent's notice of resignation, the retiring Administrative
Agent's resignation shall nevertheless thereupon become effective, and the
Lenders shall thereafter perform all of the duties of the Administrative Agent
hereunder and under the other Credit Documents until such time, if any, as the
Required Lenders appoint a successor Administrative Agent as provided for
hereinabove.
10.10 Collateral Matters. (a) The Administrative Agent is hereby
------------------
authorized on behalf of the Lenders, without the necessity of any notice to or
further consent from the Lenders, from time to time (but without any obligation)
to take any action with respect to the Collateral and the Security Documents
that may be necessary to perfect and maintain perfected the Liens upon the
Collateral granted pursuant to the Security Documents.
(b) The Lenders hereby irrevocably authorize the Administrative Agent, at
its option and in its discretion, to release any Lien granted to or held by the
Administrative Agent upon any Collateral (i) upon termination of the
Commitments, termination or expiration of all outstanding Letters of Credit and
payment in full of all of the Obligations, (ii) constituting property sold or to
be sold or disposed of as part of or in connection with any disposition
expressly permitted hereunder or under any other Credit Document or to which the
Required Lenders have consented or (iii) otherwise pursuant to and in accordance
with the provisions of any applicable Credit Document. Upon request by the
Administrative Agent at any time, the Lenders will confirm in writing the
Administrative Agent's authority to release Collateral pursuant to this
subsection (b).
10.11 Syndication Agent, Documentation Agent, etc. Notwithstanding any
--------------------------------------------
other provision of this Agreement or any of the other Credit Documents, the
Syndication Agent, the Documentation Agent, the Managing Agents and any Co-Agent
or similarly designated Lender are named as such for recognition purposes only,
and in their capacities as such shall have no powers, rights, duties,
84
responsibilities or liabilities with respect to this Agreement and the other
Credit Documents and the transactions contemplated hereby and thereby.
10.12 Issuing Lender and Swingline Lender. The provisions of this ARTICLE
-----------------------------------
X (other than SECTION 10.9) shall apply to the Issuing Lender and the Swingline
Lender mutatis mutandis to the same extent as such provisions apply to the
------- --------
Administrative Agent.
ARTICLE XI
MISCELLANEOUS
11.1 Fees and Expenses. The Borrower agrees (i) whether or not the
-----------------
transactions contemplated by this Agreement shall be consummated, to pay upon
demand all reasonable out-of-pocket costs and expenses of each Agent (including,
without limitation, the reasonable fees and expenses of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇, P.A., counsel to the Agents, and the allocated costs of internal
counsel) in connection with the preparation, negotiation, execution, delivery
and syndication of this Agreement and the other Credit Documents, and all
reasonable out-of-pocket costs and expenses of the Administrative Agent
(including, without limitation, the reasonable fees and expenses of counsel to
the Administrative Agent, and the allocated costs of internal counsel) in
connection with any amendment, modification or waiver hereof or thereof or
consent with respect hereto or thereto, (ii) to pay upon demand all reasonable
out-of-pocket costs and expenses of the Administrative Agent and each Lender
(including, without limitation, the reasonable fees and expenses of counsel to
the Administrative Agent or any Lender, including the allocated costs of
internal counsel) in connection with (y) after the occurrence and during the
continuance of an Event of Default, any refinancing or restructuring of the
credit arrangement provided under this Agreement, whether in the nature of a
"work-out," in any insolvency or bankruptcy proceeding or otherwise and whether
or not consummated, and (z) the enforcement, attempted enforcement or
preservation of any rights or remedies under this Agreement or any of the other
Credit Documents, whether in any action, suit or proceeding (including any
bankruptcy or insolvency proceeding) or otherwise, and (iii) to pay and hold
harmless the Administrative Agent and each Lender from and against all liability
for any intangibles, documentary, stamp or other similar taxes, fees and
excises, if any, including any interest and penalties, and any finder's or
brokerage fees, commissions and expenses (other than any fees, commissions or
expenses of finders or brokers engaged by the Administrative Agent or any
Lender), that may be payable in connection with the transactions contemplated by
this Agreement and the other Credit Documents.
11.2 Indemnification. The Borrower agrees, whether or not the
---------------
transactions contemplated by this Agreement shall be consummated, to indemnify
and hold harmless the Administrative Agent and each Lender and each of their
respective directors, officers, employees, agents and Affiliates (each, an
"Indemnified Person") from and against any and all claims, losses, damages,
obligations, liabilities, penalties, costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses) of any kind or nature
whatsoever, whether direct, indirect or consequential (collectively,
"Indemnified Costs"), that may at any time be imposed on, incurred by or
asserted against any such Indemnified Person as a result of, arising from or in
any way relating to the preparation, execution, performance or enforcement of
this Agreement or any of the other Credit Documents, any of the transactions
contemplated herein or therein or any transaction financed or to be financed in
whole or in part, directly or indirectly, with the proceeds of any Loans or
Letters of Credit, or any action, suit or proceeding (including any inquiry or
investigation) by any Person, whether threatened or initiated,
85
related to any of the foregoing, and in any case whether or not such Indemnified
Person is a party to any such action, proceeding or suit or a subject of any
such inquiry or investigation; provided, however, that no Indemnified Person
-------- -------
shall have the right to be indemnified hereunder for any Indemnified Costs to
the extent resulting from the gross negligence or willful misconduct of such
Indemnified Person. All of the foregoing Indemnified Costs of any Indemnified
Person shall be paid or reimbursed by the Borrower, as and when incurred and
upon demand.
11.3 Governing Law; Consent to Jurisdiction. THIS AGREEMENT AND THE OTHER
--------------------------------------
CREDIT DOCUMENTS HAVE BEEN EXECUTED, DELIVERED AND ACCEPTED IN, AND SHALL BE
DEEMED TO HAVE BEEN MADE IN, NORTH CAROLINA AND SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH
CAROLINA (WITHOUT REGARD TO THE CONFLICTS OF LAW PROVISIONS THEREOF); PROVIDED
--------
THAT EACH LETTER OF CREDIT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF CREDIT OR, IF NO
SUCH LAWS OR RULES ARE DESIGNATED, THE UNIFORM CUSTOMS AND PRACTICES FOR
DOCUMENTARY CREDITS, INTERNATIONAL CHAMBER OF COMMERCE, AS IN EFFECT FROM TIME
TO TIME (THE "UNIFORM CUSTOMS"), AND, AS TO MATTERS NOT GOVERNED BY THE UNIFORM
CUSTOMS, THE LAWS OF THE STATE OF NORTH CAROLINA (WITHOUT REGARD TO THE
CONFLICTS OF LAW PROVISIONS THEREOF). EACH OF PARENT AND THE BORROWER HEREBY
CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF ANY STATE COURT WITHIN MECKLENBURG
COUNTY, NORTH CAROLINA OR ANY FEDERAL COURT LOCATED WITHIN THE WESTERN DISTRICT
OF THE STATE OF NORTH CAROLINA FOR ANY PROCEEDING INSTITUTED HEREUNDER OR UNDER
ANY OF THE OTHER CREDIT DOCUMENTS, OR ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS, OR ANY PROCEEDING TO WHICH THE
ADMINISTRATIVE AGENT, ANY LENDER, PARENT OR THE BORROWER IS A PARTY, INCLUDING
ANY ACTIONS BASED UPON, ARISING OUT OF, OR IN CONNECTION WITH, ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER ORAL OR WRITTEN) OR ACTIONS OF
THE ADMINISTRATIVE AGENT, ANY LENDER, PARENT OR THE BORROWER. EACH OF PARENT AND
THE BORROWER IRREVOCABLY AGREES TO BE BOUND (SUBJECT TO ANY AVAILABLE RIGHT OF
APPEAL) BY ANY JUDGMENT RENDERED OR RELIEF GRANTED THEREBY AND FURTHER WAIVES
ANY OBJECTION THAT IT MAY HAVE BASED ON LACK OF JURISDICTION OR IMPROPER VENUE
OR FORUM NON CONVENIENS TO THE CONDUCT OF ANY SUCH PROCEEDING. EACH OF PARENT
--------------------
AND THE BORROWER CONSENTS THAT ALL SERVICE OF PROCESS BE MADE BY REGISTERED OR
CERTIFIED MAIL DIRECTED TO IT AT ITS ADDRESS SET FORTH HEREINBELOW, AND SERVICE
SO MADE SHALL BE DEEMED TO BE COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT
THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE UNITED STATES MAILS, PROPER
POSTAGE PREPAID AND PROPERLY ADDRESSED. NOTHING IN THIS SECTION SHALL AFFECT THE
RIGHT TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE
RIGHT OF ANY PARTY TO BRING ANY ACTION OR PROCEEDING AGAINST ANY OTHER PARTY IN
THE COURTS OF ANY OTHER JURISDICTION.
86
11.4 Waiver of Jury Trial; Arbitration; Preservation and Limitation of
-----------------------------------------------------------------
Remedies.
--------
(a) TO THE FULLEST EXTENT PERMITTED UNDER APPLICABLE LAW, EACH OF PARENT, THE
BORROWER, THE LENDERS AND THE ADMINISTRATIVE AGENT HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATED TO THIS AGREEMENT AND THE OTHER CREDIT
DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
(b) Upon demand of the Borrower, on the one hand, or the Administrative
Agent (with the approval of the Required Lenders) on the other, whether made
before or after institution of any judicial proceeding, any dispute, claim or
controversy arising out of, connected with or relating to this Agreement or any
other Credit Document ("Disputes") between or among the Borrower, the
Administrative Agent and the Lenders, or any of them, shall be resolved by
binding arbitration as provided herein. Institution of a judicial proceeding by
a party does not waive the right of that party to demand arbitration hereunder.
Disputes may include, without limitation, tort claims, counterclaims, claims
brought as class actions, claims arising from documents executed in the future,
or claims arising out of or connected with the transactions contemplated by this
Agreement and the other Credit Documents. Arbitration shall be conducted under
and governed by the Commercial Financial Disputes Arbitration Rules (the
"Arbitration Rules") of the American Arbitration Association (the "AAA"), as in
effect from time to time, and Title 9 of the U.S. Code, as amended. All
arbitration hearings shall be conducted in the city in which the principal
office of the Administrative Agent is located. The expedited procedures set
forth in Rule 51 et seq. of the Arbitration Rules shall be applicable to claims
-- ---
of less than $1,000,000. All applicable statutes of limitation shall apply to
any Dispute. A judgment upon the award may be entered in any court having
jurisdiction. The panel from which all arbitrators are selected shall be
comprised of licensed attorneys. The single arbitrator selected for expedited
procedure shall be a retired judge from the highest court of general
jurisdiction, state or federal, of the state where the hearing will be
conducted. Notwithstanding the foregoing, this arbitration provision does not
apply to Disputes under or related to Interest Rate Protection Agreements.
(c) Notwithstanding the preceding binding arbitration provisions, the
parties hereto agree to preserve, without diminution, certain remedies that any
party hereto may employ or exercise freely, either alone, in conjunction with or
during a Dispute. Any party hereto shall have the right to proceed in any court
of proper jurisdiction or by self-help to exercise or prosecute the following
remedies, as applicable: (i) all rights to foreclose against any Collateral by
exercising a power of sale granted pursuant to any of the Credit Documents or
under applicable law or by judicial foreclosure and sale, including a proceeding
to confirm the sale; (ii) all rights of self-help, including peaceful occupation
of real property and collection of rents, set-off, and peaceful possession of
personal property; (iii) obtaining provisional or ancillary remedies, including
injunctive relief, sequestration, garnishment, attachment, appointment of a
receiver and filing an involuntary bankruptcy proceeding; and (iv) when
applicable, a judgment by confession of judgment. Preservation of these remedies
does not limit the power of an arbitrator to grant similar remedies that may be
requested by a party in a Dispute. The parties hereto agree that no party shall
have a remedy of punitive or exemplary damages against any other party in any
Dispute, and each party hereby waives any right or claim to punitive or
exemplary damages that it has now or that may arise in the future in connection
with any Dispute, whether such Dispute is resolved by arbitration or judicially.
11.5 Notices. All notices and other communications provided for hereunder
-------
shall be in writing (including telegraphic, telex, facsimile transmission or
cable communication) and mailed,
87
telegraphed, telexed, telecopied, cabled or delivered to the party to be
notified at the following addresses:
(a) if to Parent or the Borrower, to it at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇;
(b) if to the Administrative Agent, to First Union National Bank, ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Syndication Agency Services, Telecopy No.
(▇▇▇) ▇▇▇-▇▇▇▇; and
(c) if to any Lender, to it at the address for notices set forth on
its signature page hereto (or if to any Lender not a party hereto as of the
date hereof, at the address for notices set forth in its Assignment and
Acceptance);
or in each case, to such other address as any party may designate for itself by
like notice to all other parties hereto. All such notices and communications
shall be deemed to have been given (i) if mailed as provided above by any method
other than overnight delivery service, on the third Business Day after deposit
in the mails, (ii) if mailed by overnight delivery service, telegraphed,
telexed, telecopied or cabled, when delivered for overnight delivery, delivered
to the telegraph company, confirmed by telex answerback, transmitted by
telecopier or delivered to the cable company, respectively, or (iii) if
delivered by hand, upon delivery; provided that notices and communications to
--------
the Administrative Agent shall not be effective until received by the
Administrative Agent.
11.6 Amendments, Waivers, etc. No amendment, modification, waiver or
------------------------
discharge or termination of, or consent to any departure by the Borrower from,
any provision of this Agreement or any other Credit Document, shall be effective
unless in a writing signed by the Required Lenders (or by the Administrative
Agent at the direction or with the consent of the Required Lenders), and then
the same shall be effective onlyin the specific instance and for the specific
purpose for which given; provided, however, that no such amendment,
-------- -------
modification, waiver, discharge, termination or consent shall:
(a) unless agreed to by each Lender directly affected thereby, (i) reduce
or forgive the principal amount of any Loan, reduce the rate of or forgive any
interest thereon, or reduce or forgive any fees or other Obligations (other than
fees payable to the Administrative Agent for its own account), or (ii) extend
the Term Loan Maturity Date, the Revolving Credit Maturity Date or any other
date fixed for the payment of any principal of or interest on any Loan (other
than additional interest payable under SECTION 2.8(b) at the election of the
Required Lenders, as provided therein), any fees (other than fees payable to the
Administrative Agent for its own account) or any other Obligations;
(b) unless agreed to by all of the Lenders, (i) increase or extend any
Commitment of any Lender (it being understood that a waiver of any Event of
Default, if agreed to by the requisite Lenders hereunder, shall not constitute
such an increase or extension), (ii) change the percentage of the aggregate
Commitments or of the aggregate unpaid principal amount of the Loans, or the
number or percentage of Lenders, that shall be required for the Lenders or any
of them to take or approve, or direct the Administrative Agent to take or
approve, any action hereunder (including as set forth in the definition of
"Required Lenders"), (iii) except as may be otherwise specifically provided in
this Agreement or in any other Credit Document, release all or substantially all
of the Collateral, release Parent from the Parent Guaranty, or release any
material Guarantor from a Subsidiaries Guaranty, or (iv) change any provision of
SECTION 2.15 or this SECTION 11.6;
88
(c) unless agreed to by (i) all of the Revolving Credit Lenders, extend
the expiry date of any Letter of Credit beyond the seventh day prior to the
Revolving Credit Maturity Date (unless such Letter of Credit has been fully cash
collateralized or is backed by one or more letters of credit issued in favor of
the Issuing Lender for the account of the Borrower on terms and by an issuer
satisfactory to the Issuing Lender and the Administrative Agent), or (ii)
Revolving Credit Lenders holding a least a majority of the Revolving Credit
Commitments (or, if the Revolving Credit Commitments have been terminated,
Revolving Credit Lenders holding at least a majority of the aggregate
outstanding principal amount of the Revolving Loans and Letter of Credit
Exposure), change any other provision of ARTICLE III; and
(d) unless agreed to by the Issuing Lender, the Swingline Lender or the
Administrative Agent in addition to the Lenders required as provided hereinabove
to take such action, affect the respective rights or obligations of the Issuing
Lender, the Swingline Lender or the Administrative Agent, as applicable,
hereunder or under any of the other Credit Documents;
and provided further that (i) if any amendment, modification, waiver or consent
-------- -------
would adversely affect the holders of Loans of a particular Class (the "affected
Class") relative to holders of Loans of any other Class (including, without
limitation, by way of reducing the relative proportion of any payments,
prepayments or Commitment reductions to be applied for the benefit of holders of
Loans of the affected Class under SECTION 2.6), then such amendment,
modification, waiver or consent shall require the consent of Lenders holding at
least a majority of the aggregate outstanding principal amount of all Loans of
the affected Class, and (ii) the Fee Letter and any Interest Rate Protection
Agreement to which any Lender is a party may be amended or modified, and any
rights thereunder waived, in a writing signed by the parties thereto.
11.7 Assignments, Participations. (a) Each Lender may assign to one or more
---------------------------
other Eligible Assignees(each, an "Assignee") all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitments, the outstanding Loans made by it, the Note or Notes
held by it and its participations in Letters of Credit); provided, however, that
-------- -------
(i) any such assignment (other than an assignment to a Lender or an Affiliate of
a Lender) shall not be made without the prior written consent of the
Administrative Agent and the Borrower (to be evidenced by their counterexecution
of the relevant Assignment and Acceptance), which consents shall not be
unreasonably withheld, provided that the Borrower's consent shall not be
--------
required in the event a Default or Event of Default shall have occurred and be
continuing, and provided further that in the case of an assignment of a
-------- -------
Revolving Credit Commitment, the Issuing Lender must also give its prior written
consent thereto (which consent shall not be unreasonably withheld), (ii) each
such assignment by a Lender of any of its interests relating to Loans of a
particular Class shall be made in such manner so that the same portion of its
Commitment, Loans, Note or Notes and other interests under and with respect to
such Class is assigned to the relevant Assignee, (iii) except in the case of an
assignment to a Lender or an Affiliate of a Lender, no such assignment shall be
in an aggregate principal amount (determined as of the date of the Assignment
and Acceptance with respect to such assignment) less than (x) in the case of
Term Loans, $5,000,000 (or, if less, the full amount of the assigning Lender's
outstanding Term Loans), (y) in the case of Revolving Loans, $5,000,000,
determined by combining the amount of the assigning Lender's outstanding
Revolving Loans, Letter of Credit Exposure and Unutilized Revolving Credit
Commitment being assigned pursuant to such assignment (or, if less, the entire
Revolving Credit Commitment of the assigning Lender), or (z) in the case of
Swingline Loans, the entire Swingline Commitment and the full amount of the
outstanding Swingline Loans, (iv) unless the assigning Lender ceases to be a
Lender, the aggregate amount of the Loans owing to and unused
89
Commitments of such Lender after giving effect to such assignment shall not be
less than $5,000,000, and (v) the parties to each such assignment will execute
and deliver to the Administrative Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with any Note or Notes subject
to such assignment, and will pay a nonrefundable processing fee of $3,000 to the
Administrative Agent for its own account. Upon such execution, delivery,
acceptance and recording of the Assignment and Acceptance, from and after the
effective date specified therein, which effective date shall be at least five
Business Days after the execution thereof (unless the Administrative Agent shall
otherwise agree), (A) the Assignee thereunder shall be a party hereto and, to
the extent that rights and obligations hereunder have been assigned to it
pursuant to such Assignment and Acceptance, shall have the rights and
obligations of the assigning Lender hereunder with respect thereto and (B) the
assigning Lender shall, to the extent that rights and obligations hereunder have
been assigned by it pursuant to such Assignment and Acceptance, relinquish its
rights (other than rights under the provisions of this Agreement and the other
Credit Documents relating to indemnification or payment of fees, costs and
expenses, to the extent such rights relate to the time prior to the effective
date of such Assignment and Acceptance) and be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of such assigning Lender's rights and obligations
under this Agreement, such Lender shall cease to be a party hereto). The terms
and provisions of each Assignment and Acceptance shall, upon the effectiveness
thereof, be incorporated into and made a part of this Agreement, and the
covenants, agreements and obligations of each Lender set forth therein shall be
deemed made to and for the benefit of the Administrative Agent and the other
parties hereto as if set forth at length herein.
(b) The Administrative Agent will maintain at its address for notices
referred to herein a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lenders and the Commitments of, and principal amount of the Loans owing to,
each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Administrative Agent and the Lenders may treat each Person whose
name is recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower and
each Lender at any reasonable time and from time to time upon reasonable prior
notice.
(c) Upon its receipt of a duly completed Assignment and Acceptance executed
by an assigning Lender and an Assignee and counterexecuted by the Borrower and
the Issuing Lender (if required), together with the Note or Notes subject to
such assignment and the processing fee referred to in subsection (a) above, the
Administrative Agent will (i) accept such Assignment and Acceptance, (ii) on the
effective date thereof, record the information contained therein in the Register
and (iii) give notice thereof to the Borrower and the Lenders. Within five (5)
Business Days after its receipt of such notice, the Borrower, at its own
expense, will execute and deliver to the Administrative Agent, in exchange for
the surrendered Note or Notes, a new Note or Notes to the order of the Assignee
(and, if the assigning Lender has retained any portion of its rights and
obligations hereunder, to the order of the assigning Lender), prepared in
accordance with the applicable provisions of SECTION 2.4 as necessary to
reflect, after giving effect to the assignment, the Commitments (or outstanding
Term Loans, as the case may be) of the Assignee and (to the extent of any
retained interests) the assigning Lender, dated the date of the replaced Note or
Notes and otherwise in substantially the form of EXHIBITS ▇-▇, ▇-▇ and B-3, as
applicable. The Administrative Agent will return canceled Notes to the
Borrower.
90
(d) Each Lender may, without the consent of the Borrower, the
Administrative Agent or any other Lender, sell to one or more other Persons
(each, a "Participant") participations in any portion comprising less than all
of its rights and obligations under this Agreement (including, without
limitation, a portion of its Commitments, the outstanding Loans made by it, the
Note or Notes held by it and its participations in Letters of Credit); provided,
--------
however, that (i) such Lender's obligations under this Agreement shall remain
-------
unchanged and such Lender shall remain solely responsible for the performance of
such obligations, (ii) no Lender shall sell any participation that, when taken
together with all other participations, if any, sold by such Lender, covers all
of such Lender's rights and obligations under this Agreement, (iii) the
Borrower, the Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement, and no Lender shall permit any Participant to
have any voting rights or any right to control the vote of such Lender with
respect to any amendment, modification, waiver, consent or other action
hereunder or under any other Credit Document (except as to actions that would
(x) reduce or forgive the principal amount of any Loan, reduce the rate of or
forgive any interest thereon, or reduce or forgive any fees or other
Obligations, (y) extend the Term Loan Maturity Date, the Revolving Credit
Maturity Date or any other date fixed for the payment of any principal of or
interest on any Loan, any fees or any other Obligations, or (z) increase or
extend any Commitment of any Lender), and (iv) no Participant shall have any
rights under this Agreement or any of the other Credit Documents, each
Participant's rights against the granting Lender in respect of any participation
to be those set forth in the participation agreement, and all amounts payable by
the Borrower hereunder shall be determined as if such Lender had not granted
such participation. Notwithstanding the foregoing, each Participant shall have
the rights of a Lender for purposes of SECTIONS 2.16(a), 2.16(b), 2.17, 2.18 and
9.3, and shall be entitled to the benefits thereto, to the extent that the
Lender granting such participation would be entitled to such benefits if the
participation had not been made, provided that no Participant shall be entitled
--------
to receive any greater amount pursuant to any of such Sections than the Lender
granting such participation would have been entitled to receive in respect of
the amount of the participation made by such Lender to such Participant had such
participation not been made.
(e) Nothing in this Agreement shall be construed to prohibit any Lender
from pledging or assigning all or any portion of its rights and interest
hereunder or under any Note to any Federal Reserve Bank as security for
borrowings therefrom; provided, however, that no such pledge or assignment shall
-------- -------
release a Lender from any of its obligations hereunder.
(f) Assignments and participations pursuant to this SECTION 11.7 need not
be pro rata as between the Term Loans and the Revolving Loans.
(g) Any Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section, disclose to the
Assignee or Participant or proposed Assignee or Participant any information
relating to Parent and its Subsidiaries furnished to it by or on behalf of any
other party hereto, provided that such Assignee or Participant or proposed
--------
Assignee or Participant agrees in writing to keep such information confidential
to the same extent required of the Lenders under SECTION 11.13.
11.8 No Waiver. The rights and remedies of the Administrative Agent and the
---------
Lenders expressly set forth in this Agreement and the other Credit Documents are
cumulative and in addition to, and not exclusive of, all other rights and
remedies available at law, in equity or otherwise. No failure or delay on the
part of the Administrative Agent or any Lender in exercising any right, power or
privilege shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or privilege preclude any other or further
exercise thereof or the exercise of any other right,
91
power or privilege or be construed to be a waiver of any Default or Event of
Default. No course of dealing between any of Parent, the Borrower and the
Administrative Agent or the Lenders or their agents or employees shall be
effective to amend, modify or discharge any provision of this Agreement or any
other Credit Document or to constitute a waiver of any Default or Event of
Default. No notice to or demand upon Parent or the Borrower in any case shall
entitle Parent or the Borrower to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the right of the
Administrative Agent or any Lender to exercise any right or remedy or take any
other or further action in any circumstances without notice or demand.
11.9 Successors and Assigns. This Agreement shall be binding upon, inure to
----------------------
the benefit of and be enforceable by the respective successors and assigns of
the parties hereto, and all references herein to any party shall be deemed to
include its successors and assigns; provided, however, that (i) neither Parent
-------- -------
nor the Borrower shall sell, assign or transfer any of its rights, interests,
duties or obligations under this Agreement or any other Credit Document without
the prior written consent of all of the Lenders and (ii) any Assignees shall
have such rights and obligations with respect to this Agreement and the other
Credit Documents as are provided for under and pursuant to the provisions of
SECTION 11.7.
11.10 Survival. All representations, warranties and agreements made by or
--------
on behalf of Parent, the Borrower or any of their Subsidiaries in this Agreement
and in the other Credit Documents shall survive the execution and delivery
hereof or thereof, the making and repayment of the Loans and the issuance and
repayment of the Letters of Credit. In addition, notwithstanding anything herein
or under applicable law to the contrary, the provisions of this Agreement and
the other Credit Documents relating to indemnification or payment of fees, costs
and expenses, including, without limitation, the provisions of SECTIONS 2.16(a),
2.16(b), 2.17, 2.18, 10.7, 11.1 and 11.2, shall survive the payment in full of
all Loans and Letters of Credit, the termination of the Commitments and all
Letters of Credit, and any termination of this Agreement or any of the other
Credit Documents.
11.11 Severability. To the extent any provision of this Agreement is
------------
prohibited by or invalid under the applicable law of any jurisdiction, such
provision shall be ineffective only to the extent of such prohibition or
invalidity and only in such jurisdiction, without prohibiting or invalidating
such provision in any other jurisdiction or the remaining provisions of this
Agreement in any jurisdiction.
11.12 Construction. The headings of the various articles, sections and
------------
subsections of this Agreement have been inserted for convenience only and shall
not in any way affect the meaning or construction of any of the provisions
hereof. Except as otherwise expressly provided herein and in the other Credit
Documents, in the event of any inconsistency or conflict between any provision
of this Agreement and any provision of any of the other Credit Documents, the
provision of this Agreement shall control.
11.13 Confidentiality. Each Lender agrees to keep confidential, pursuant
---------------
to its customary procedures for handling confidential information of a similar
nature and in accordance with safe and sound banking practices, all nonpublic
information provided to it by or on behalf of Parent or any of its Subsidiaries
in connection with this Agreement or any other Credit Document; provided,
--------
however, that any Lender may disclose such information (i) to its directors,
-------
employees and agents and to its auditors, counsel and other professional
advisors, (ii) at the demand or request of any bank regulatory authority, court
or other Governmental Authority having or asserting jurisdiction over such
Lender, as may be required pursuant to subpoena or other legal process, or
otherwise in order to comply with any applicable Requirement of Law, (iii) in
connection with any proceeding to enforce its rights hereunder
92
or under any other Credit Document or any other litigation or proceeding related
hereto or to which it is a party, (iv) to the Administrative Agent or any other
Lender, (v) to the extent the same has become publicly available other than as a
result of a breach of this Agreement and (vi) pursuant to and in accordance with
the provisions of SECTION 11.7(f).
11.14 Counterparts. This Agreement may be executed in any number of
------------
counterparts and by different parties hereto on separate counterparts, each of
which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. This Agreement shall
become effective upon the execution of a counterpart hereof by each of the
parties hereto and receipt by the Administrative Agent and the Borrower of
written or telephonic notification of such execution and authorization of
delivery thereof.
11.15 Disclosure of Information. Each of Parent and the Borrower agrees
-------------------------
and consents to the Administrative Agent's disclosure of information relating to
this transaction to Gold Sheets and other similar bank trade publications. Such
-----------
information will consist of deal terms and other information customarily found
in such publications, but will not include any information subject to the
provisions of SECTION 11.13.
11.16 Entire Agreement. THIS AGREEMENT AND THE OTHER DOCUMENTS AND
----------------
INSTRUMENTS EXECUTED AND DELIVERED IN CONNECTION HEREWITH (A) EMBODY THE ENTIRE
AGREEMENT AND UNDERSTANDING BETWEEN THE PARTIES HERETO AND THERETO RELATING TO
THE SUBJECT MATTER HEREOF AND THEREOF, (B) SUPERSEDE ANY AND ALL PRIOR
AGREEMENTS AND UNDERSTANDINGS OF SUCH PERSONS, ORAL OR WRITTEN, RELATING TO THE
SUBJECT MATTER HEREOF AND THEREOF, INCLUDING THE COMMITMENT LETTER FROM THE
AGENTS TO THE BORROWER DATED MARCH 12, 1998, BUT SPECIFICALLY EXCLUDING THE FEE
LETTER, AND (C) MAY NOT BE AMENDED, SUPPLEMENTED, CONTRADICTED OR OTHERWISE
MODIFIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF
THE PARTIES.
93
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
THE ▇▇▇▇▇▇▇▇ COMPANIES, INC.
By: /s/ [Illegible]
---------------------------
Title: Executive Vice President
Chief Financial Officer
▇▇▇▇▇▇▇▇ PUBLISHING COMPANY, L.L.C.
By: /s/ [Illegible]
---------------------------
Title: Executive Vice President
Chief Financial Officer
(signatures continued)
S-1
FIRST UNION NATIONAL BANK, as
Administrative Agent and as a Lender
By: /s/ [ILLEGIBLE]
-----------------------------
Title: [ILLEGIBLE]
--------------------------
Instructions for wire transfers to the
Administrative Agent:
First Union National Bank
ABA Routing ▇▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
General Ledger No. 465906, RC No. 5007
Attention: Syndication Agency Services
Re: ▇▇▇▇▇▇▇▇ Publishing Company, L.L.C.
Address for notices (as a Lender):
First Union National Bank
One First Union Center, 5th Floor
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Lending Office:
First Union National Bank
One First Union Center, 5th Floor
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(signatures continued)
S-2
CANADIAN IMPERIAL BANK OF COMMERCE,
as Syndication Agent and as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Title:
----------------------------
Address for Notices of Borrowing, Notices of
Conversion/Continuation and Letter of Credit Notices:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Address for all other notices:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Lending Office:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(signatures continued)
S-3
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING, INC.,
as Documentation Agent and as a Lender
By: /s/ [Illegible]
----------------------------
Title: Principal
-------------------------
Address for notices:
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ Biggicca
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Lending Office:
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ Biggicca
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(signatures continued)
S-4
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as a Managing Agent
and as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
Title: Vice President
--------------------------
Address for notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Lending Office:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(signatures continued)
S-5
BANKBOSTON, N.A., as a Managing Agent and
as a Lender
By: /s/ [Illegible]
-------------------------------
Title: Director
----------------------------
Address for notices:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇-▇▇-▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Lending Office:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇-▇▇-▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(signatures continued)
S-6
THE BANK OF NEW YORK, as a Managing Agent
and as a Lender
By: /s/ [Illegible]
-------------------------------
Title: Assistant Vice President
----------------------------
Address for notices:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Lending Office:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-7
ANNEX I
-------
APPLICABLE MARGIN PERCENTAGES
Applicable Margin Percentages for Term Loans
--------------------------------------------
Applicable Margin Applicable Margin
Percentage for Percentage for
Leverage Ratio ABR Loans LIBOR Loans
-------------- --------- -----------
Greater than or equal to 5.0 to 1.0 1.000% 2.250%
Greater than or equal to 4.5 to 1.0
but less than 5.0 to 1.0 0.750% 2.000%
Less than 4.5 to 1.0 0.500% 1.750%
Applicable Margin Percentages for Revolving Loans
-------------------------------------------------
Applicable Margin Applicable Margin
Percentage for Percentage for
Leverage Ratio ABR Loans LIBOR Loans
-------------- --------- -----------
Greater than or equal to 5.0 to 1.0 0.250% 1.500%
Greater than or equal to 4.5 to 1.0
but less than 5.0 to 1.0 0.125% 1.375%
Greater than or equal to 4.0 to 1.0
but less than 4.5 to 1.0 0.000% 1.125%
Greater than or equal to 3.5 to 1.0
but less than 4.0 to 1.0 0.000% 0.875%
Greater than or equal to 3.0 to 1.0
but less than 3.5 to 1.0 0.000% 0.750%
Less than 3.0 to 1.0 0.000% 0.625%
Applicable Margin Percentage for Revolving Credit Commitment Fee
----------------------------------------------------------------
Applicable Margin
Leverage Ratio Percentage
-------------- ----------
Greater than or equal to 5.0 to 1.0 0.375%
Greater than or equal to 4.5 to 1.0
but less than 5.0 to 1.0 0.325%
Greater than or equal to 4.0 to 1.0
but less than 4.5 to 1.0 0.250%
Greater than or equal to 3.5 to 1.0
but less than 4.0 to 1.0 0.250%
Greater than or equal to 3.0 to 1.0
but less than 3.5 to 1.0 0.250%
Less than 3.0 to 1.0 0.225%
EXHIBIT A-1
-----------
FORM OF
NOTICE OF BORROWING
[Date]
First Union National Bank,
as Administrative Agent
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Syndication Agency Services
Ladies and Gentlemen:
The undersigned, ▇▇▇▇▇▇▇▇ Publishing Company, L.L.C. (the "Borrower"),
refers to the Credit Agreement, dated as of March 31, 1998, among The ▇▇▇▇▇▇▇▇
Companies, Inc., the Borrower, certain banks and other financial institutions
from time to time parties thereto (the "Lenders"), you, as Administrative Agent
for the Lenders, Canadian Imperial Bank of Commerce, as Syndication Agent,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc., as Documentation Agent, and the Managing
Agents named therein (as amended, modified or supplemented from time to time,
the "Credit Agreement," the terms defined therein being used herein as therein
defined), and, pursuant to SECTION 2.2(b) of the Credit Agreement, hereby gives
you, as Administrative Agent, irrevocable notice that the Borrower requests a
Borrowing of [Revolving]/1/ Loans under the Credit Agreement, and to that end
sets forth below the information relating to such Borrowing (the "Proposed
Borrowing") as required by SECTION 2.2(b) of the Credit Agreement:
(i) The aggregate principal amount of the Proposed Borrowing is
$_______________./2/
(ii) The Revolving Loans comprising the Proposed Borrowing shall be
initially made as [ABR Loans] [LIBOR Loans]./3/
-----------------------
/1/Substitute "Term" for "Revolving" throughout the notice in the case of
the Borrowing of the Term Loans on the Closing Date.
/2/Shall be an amount not less than $3,000,000 or, if greater, an integral
multiple of $1,000,000 in excess thereof (in the case of ABR Loans), or
$5,000,000 or, if greater, an integral multiple of $1,000,000 in excess thereof
(in the case of LIBOR Loans).
/3/Select the applicable Type of Revolving Loans.
[(iii) The initial Interest Period for the LIBOR Loans comprising
the Proposed Borrowing shall be [one/three/six months].]/4/
(iv) The Proposed Borrowing is requested to be made on
__________________ (the "Borrowing Date")./5/
The Borrower hereby certifies that the following statements are true on and
as of the date hereof and will be true on and as of the Borrowing Date:
(A) Each of the representations and warranties contained in
ARTICLE V of the Credit Agreement and in the other Credit Documents is and
will be true and correct in all material respects on and as of each such
date, with the same effect as if made on and as of each such date, both
immediately before and after giving effect to the Proposed Borrowing and to
the application of the proceeds therefrom (except to the extent any such
representation or warranty is expressly stated to have been made as of a
specific date, in which case such representation or warranty shall be true
and correct in all material respects as of such date);
(B) No Default or Event of Default has occurred and is
continuing or would result from the Proposed Borrowing or from the
application of the proceeds therefrom; and
(C) After giving effect to the Proposed Borrowing, the sum of
(i) the aggregate principal amount of Revolving Loans outstanding, (ii) the
aggregate Letter of Credit Exposure of all Lenders, and (iii) the aggregate
principal amount of Swingline Loans outstanding, will not exceed the
aggregate Revolving Credit Commitments./6/
Very truly yours,
▇▇▇▇▇▇▇▇ PUBLISHING COMPANY, L.L.C.
By: ______________________________
Title: _____________________________
--------------------------
/4/Include this clause in the case of a Proposed Borrowing comprised of LIBOR
Loans, and select the applicable Interest Period.
/5/Shall be a Business Day at least one Business Day after the date hereof (in
the case of ABR Loans) or at least three Business Days after the date hereof (in
the case of LIBOR Loans).
/6/This paragraph may be omitted in the case of the Borrowing of the Term
Loans.
-2-
EXHIBIT A-2
-----------
FORM OF
NOTICE OF SWINGLINE BORROWING
[Date]
First Union National Bank,
as Administrative Agent
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Syndication Agency Services
Ladies and Gentlemen:
The undersigned, ▇▇▇▇▇▇▇▇ Publishing Company, L.L.C. (the "Borrower"),
refers to the Credit Agreement, dated as of March 31, 1998, among The ▇▇▇▇▇▇▇▇
Companies, Inc., the Borrower, certain banks and other financial institutions
from time to time parties thereto (the "Lenders"), you, as Administrative Agent
for the Lenders, Canadian Imperial Bank of Commerce, as Syndication Agent,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc., as Documentation Agent, and the Managing
Agents named therein (as amended, modified or supplemented from time to time,
the "Credit Agreement," the terms defined therein being used herein as therein
defined), and, pursuant to SECTION 2.2(d) of the Credit Agreement, hereby gives
you, as Swingline Lender, irrevocable notice that the Borrower requests a
Borrowing of a Swingline Loan under the Credit Agreement, and to that end sets
forth below the information relating to such Borrowing (the "Proposed
Borrowing") as required by SECTION 2.2(d) of the Credit Agreement:
(i) The principal amount of the Proposed Borrowing is
$_______________./1/
(ii) The Proposed Borrowing is requested to be made on
__________________ (the "Borrowing Date")./2/
The Borrower hereby certifies that the following statements are true on and
as of the date hereof and will be true on and as of the Borrowing Date:
(A) Each of the representations and warranties contained in
ARTICLE V of the Credit Agreement and in the other Credit Documents is and
will be true and correct in all material respects on and as of each such
date, with the same effect as if made on and as of
-------------------------
/1/Shall be an amount not less than $500,000 or, if greater, an integral
multiple of $250,000 in excess thereof.
/2/Shall be a Business Day.
each such date, both immediately before and after giving effect to the
Proposed Borrowing and to the application of the proceeds therefrom (except
to the extent any such representation or warranty is expressly stated to
have been made as of a specific date, in which case such representation or
warranty shall be true and correct in all material respects as of such
date);
(B) No Default or Event of Default has occurred and is continuing or
would result from the Proposed Borrowing or from the application of the
proceeds therefrom; and
(C) After giving effect to the Proposed Borrowing, the sum of (i) the
aggregate principal amount of Revolving Loans outstanding, (ii) the
aggregate Letter of Credit Exposure of all Lenders, and (iii) the aggregate
principal amount of Swingline Loans outstanding, will not exceed the
aggregate Revolving Credit Commitments.
Very truly yours,
▇▇▇▇▇▇▇▇ PUBLISHING COMPANY, L.L.C.
By: ______________________________
Title: _____________________________
-2-
EXHIBIT B-1
-----------
Borrower's Taxpayer Identification No. ▇▇-▇▇▇▇▇▇▇
FORM OF
TERM NOTE
$_________ _____________, 1998
Charlotte, North Carolina
FOR VALUE RECEIVED, ▇▇▇▇▇▇▇▇ PUBLISHING COMPANY, L.L.C., a Delaware limited
liability company (the "Borrower"), hereby promises to pay to the order of
_______________________________________________ (the "Lender"), at the
offices of First Union National Bank (the "Administrative Agent") located at One
First Union Center, 301 South College Street, Charlotte, North Carolina (or at
such other place or places as the Administrative Agent may designate), at the
times and in the manner provided in the Credit Agreement, dated as of March 31,
1998 (as amended, modified or supplemented from time to time, the "Credit
Agreement"), among The ▇▇▇▇▇▇▇▇ Companies, Inc., the Borrower, the Lenders from
time to time parties thereto, First Union National Bank, as Administrative
Agent, Canadian Imperial Bank of Commerce, as Syndication Agent, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Senior Funding, Inc., as Documentation Agent, and the Managing Agents named
therein, the principal sum of
__________________________ DOLLARS ($___________), or such lesser amount as
may constitute the unpaid principal amount of the Term Loan made by the Lender,
under the terms and conditions of this promissory note (this "Term Note") and
the Credit Agreement. The defined terms in the Credit Agreement are used herein
with the same meaning. The Borrower also unconditionally promises to pay
interest on the aggregate unpaid principal amount of this Term Note at the rates
applicable thereto from time to time as provided in the Credit Agreement.
This Term Note is one of a series of Term Notes referred to in the Credit
Agreement and is issued to evidence the Term Loan made by the Lender pursuant to
the Credit Agreement. All of the terms, conditions and covenants of the Credit
Agreement are expressly made a part of this Term Note by reference in the same
manner and with the same effect as if set forth herein at length, and any holder
of this Term Note is entitled to the benefits of and remedies provided in the
Credit Agreement and the other Credit Documents. Reference is made to the
Credit Agreement for provisions relating to the interest rate, maturity,
payment, prepayment and acceleration of this Term Note.
In the event of an acceleration of the maturity of this Term Note, this
Term Note shall become immediately due and payable, without presentation,
demand, protest or notice of any kind, all of which are hereby waived by the
Borrower.
In the event this Term Note is not paid when due at any stated or
accelerated maturity, the Borrower agrees to pay, in addition to the principal
and interest, all costs of collection, including reasonable attorneys' fees.
This Term Note shall be governed by and construed in accordance with the
internal laws and judicial decisions of the State of North Carolina. The
Borrower hereby submits to the nonexclusive jurisdiction and venue of the
federal and state courts located in Mecklenburg County, North Carolina, although
the Lender shall not be limited to bringing an action in such courts.
IN WITNESS WHEREOF, the Borrower has caused this Term Note to be executed
under seal by its duly authorized corporate officer as of the day and year first
above written.
▇▇▇▇▇▇▇▇ PUBLISHING COMPANY, L.L.C.
By: _________________________________
Title: ________________________________
-2-
EXHIBIT B-2
-----------
Borrower's Taxpayer Identification No. ▇▇-▇▇▇▇▇▇▇
FORM OF
REVOLVING CREDIT NOTE
$__________ ___________, 1998
Charlotte, North Carolina
FOR VALUE RECEIVED, ▇▇▇▇▇▇▇▇ PUBLISHING COMPANY, L.L.C., a Delaware limited
liability company (the "Borrower"), hereby promises to pay to the order of
_______________________________________________ (the "Lender"), at the
offices of First Union National Bank (the "Administrative Agent") located at One
First Union Center, 301 South College Street, Charlotte, North Carolina (or at
such other place or places as the Administrative Agent may designate), at the
times and in the manner provided in the Credit Agreement, dated as of March 31,
1998 (as amended, modified or supplemented from time to time, the "Credit
Agreement"), among The ▇▇▇▇▇▇▇▇ Companies, Inc., the Borrower, the Lenders from
time to time parties thereto, First Union National Bank, as Administrative
Agent, Canadian Imperial Bank of Commerce, as Syndication Agent, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Senior Funding, Inc., as Documentation Agent, and the Managing Agents named
therein, the principal sum of
__________________________ DOLLARS ($___________), or such lesser amount as
may constitute the unpaid principal amount of the Revolving Loans made by the
Lender, under the terms and conditions of this promissory note (this "Revolving
Credit Note") and the Credit Agreement. The defined terms in the Credit
Agreement are used herein with the same meaning. The Borrower also
unconditionally promises to pay interest on the aggregate unpaid principal
amount of this Revolving Credit Note at the rates applicable thereto from time
to time as provided in the Credit Agreement.
This Revolving Credit Note is one of a series of Revolving Credit Notes
referred to in the Credit Agreement and is issued to evidence the Revolving
Loans made by the Lender from time to time pursuant to the Credit Agreement.
All of the terms, conditions and covenants of the Credit Agreement are expressly
made a part of this Revolving Credit Note by reference in the same manner and
with the same effect as if set forth herein at length, and any holder of this
Revolving Credit Note is entitled to the benefits of and remedies provided in
the Credit Agreement and the other Credit Documents. Reference is made to the
Credit Agreement for provisions relating to the interest rate, maturity,
payment, prepayment and acceleration of this Revolving Credit Note.
In the event of an acceleration of the maturity of this Revolving Credit
Note, this Revolving Credit Note shall become immediately due and payable,
without presentation, demand, protest or notice of any kind, all of which are
hereby waived by the Borrower.
In the event this Revolving Credit Note is not paid when due at any stated
or accelerated maturity, the Borrower agrees to pay, in addition to the
principal and interest, all costs of collection, including reasonable attorneys'
fees.
This Revolving Credit Note shall be governed by and construed in accordance
with the internal laws and judicial decisions of the State of North Carolina.
The Borrower hereby submits to the nonexclusive jurisdiction and venue of the
federal and state courts located in Mecklenburg County, North Carolina, although
the Lender shall not be limited to bringing an action in such courts.
IN WITNESS WHEREOF, the Borrower has caused this Revolving Credit Note to
be executed under seal by its duly authorized corporate officer as of the day
and year first above written.
▇▇▇▇▇▇▇▇ PUBLISHING COMPANY, L.L.C.
By: _________________________________
Title: ________________________________
-2-
EXHIBIT B-3
-----------
Borrower's Taxpayer Identification No. ▇▇-▇▇▇▇▇▇▇
FORM OF
SWINGLINE NOTE
$__________ ____________, 1998
Charlotte, North Carolina
FOR VALUE RECEIVED, ▇▇▇▇▇▇▇▇ PUBLISHING COMPANY, L.L.C., a Delaware limited
liability company (the "Borrower"), hereby promises to pay to the order of
_______________________________________________ (the "Swingline Lender"),
at the offices of First Union National Bank (the "Administrative Agent") located
at One First Union Center, 301 South College Street, Charlotte, North Carolina
(or at such other place or places as the Administrative Agent may designate), at
the times and in the manner provided in the Credit Agreement, dated as of March
31, 1998 (as amended, modified or supplemented from time to time, the "Credit
Agreement"), among The ▇▇▇▇▇▇▇▇ Companies, Inc., the Borrower, the Lenders from
time to time parties thereto, First Union National Bank, as Administrative
Agent, Canadian Imperial Bank of Commerce, as Syndication Agent, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Senior Funding, Inc., as Documentation Agent, and the Managing Agents named
therein, the principal sum of
__________________________ DOLLARS ($___________), or such lesser amount as
may constitute the unpaid principal amount of the Swingline Loans made by the
Swingline Lender, under the terms and conditions of this promissory note (this
"Swingline Note") and the Credit Agreement. The defined terms in the Credit
Agreement are used herein with the same meaning. The Borrower also
unconditionally promises to pay interest on the aggregate unpaid principal
amount of this Swingline Note at the rates applicable thereto from time to time
as provided in the Credit Agreement.
This Swingline Note is issued to evidence the Swingline Loans made by the
Swingline Lender from time to time pursuant to the Credit Agreement. All of the
terms, conditions and covenants of the Credit Agreement are expressly made a
part of this Swingline Note by reference in the same manner and with the same
effect as if set forth herein at length, and any holder of this Swingline Note
is entitled to the benefits of and remedies provided in the Credit Agreement and
the other Credit Documents. Reference is made to the Credit Agreement for
provisions relating to the interest rate, maturity, payment, prepayment and
acceleration of this Swingline Note.
In the event of an acceleration of the maturity of this Swingline Note,
this Swingline Note shall become immediately due and payable, without
presentation, demand, protest or notice of any kind, all of which are hereby
waived by the Borrower.
In the event this Swingline Note is not paid when due at any stated or
accelerated maturity, the Borrower agrees to pay, in addition to the principal
and interest, all costs of collection, including reasonable attorneys' fees.
This Swingline Note shall be governed by and construed in accordance with
the internal laws and judicial decisions of the State of North Carolina. The
Borrower hereby submits to the nonexclusive jurisdiction and venue of the
federal and state courts located in Mecklenburg County, North Carolina, although
the Swingline Lender shall not be limited to bringing an action in such courts.
IN WITNESS WHEREOF, the Borrower has caused this Swingline Note to be
executed under seal by its duly authorized corporate officer as of the day and
year first above written.
▇▇▇▇▇▇▇▇ PUBLISHING COMPANY, L.L.C.
By: _________________________________
Title: ________________________________
-2-
EXHIBIT C
---------
FORM OF
NOTICE OF PREPAYMENT
[Date]
First Union National Bank,
as Administrative Agent
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Syndication Agency Services
Ladies and Gentlemen:
The undersigned, ▇▇▇▇▇▇▇▇ Publishing Company, L.L.C. (the "Borrower"),
refers to the Credit Agreement, dated as of March 31, 1998, among The ▇▇▇▇▇▇▇▇
Companies, Inc., the Borrower, certain banks and other financial institutions
from time to time parties thereto (the "Lenders"), you, as Administrative Agent
for the Lenders, Canadian Imperial Bank of Commerce, as Syndication Agent,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc., as Documentation Agent, and the Managing
Agents named therein (as amended, modified or supplemented from time to time,
the "Credit Agreement," the terms defined therein being used herein as therein
defined), and, pursuant to SECTION 2.7(a) of the Credit Agreement, hereby gives
you, as Administrative Agent, irrevocable notice that the Borrower intends to
prepay certain Loans under the Credit Agreement, and to that end sets forth the
following information with respect to such prepayment as required by SECTION
2.7(a) of the Credit Agreement:
1. The Borrower shall prepay [Term/Revolving] Loans in an aggregate
amount of $___________, consisting of [ABR Loans in an aggregate amount of
$____________] [LIBOR Loans in an aggregate amount of $______________]. [The
Borrowing pursuant to which such LIBOR Loans were made has an Interest Period of
___________ month(s), ending on _______________.]/1/
2. The Borrower shall prepay the above referenced Loans on the
following Business Day: ____________________.
Very truly yours,
▇▇▇▇▇▇▇▇ PUBLISHING COMPANY, L.L.C.
By: ____________________________
Title: _________________________
-------------------------
/1/ Insert in the case of a prepayment of LIBOR Loans.
EXHIBIT D
---------
FORM OF
NOTICE OF CONVERSION/CONTINUATION
[Date]
First Union National Bank,
as Administrative Agent
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Syndication Agency Services
Ladies and Gentlemen:
The undersigned, ▇▇▇▇▇▇▇▇ Publishing Company, L.L.C. (the "Borrower"),
refers to the Credit Agreement, dated as of March 31, 1998, among The ▇▇▇▇▇▇▇▇
Companies, Inc., the Borrower, certain banks and other financial institutions
from time to time parties thereto (the "Lenders"), you, as Administrative Agent
for the Lenders, Canadian Imperial Bank of Commerce, as Syndication Agent,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc., as Documentation Agent, and the Managing
Agents named therein (as amended, modified or supplemented from time to time,
the "Credit Agreement," the terms defined therein being used herein as therein
defined), and, pursuant to SECTION 2.11(b) of the Credit Agreement, hereby gives
you, as Administrative Agent, irrevocable notice that the Borrower requests a
[conversion] [continuation]/1/ of Loans under the Credit Agreement, and to that
end sets forth below the information relating to such [conversion]
[continuation] (the "Proposed [Conversion] [Continuation]") as required by
SECTION 2.11(b) of the Credit Agreement:
(i) The Proposed [Conversion] [Continuation] is requested to be
made on _______________./2/
------------------------
/1/ Insert "conversion" or "continuation" throughout the notice, as
applicable.
/2/ Shall be a Business Day at least one Business Day after the date hereof
(in the case of any conversion of LIBOR Loans into ABR Loans) or at least three
Business Days after the date hereof (in the case of any conversion of ABR Loans
into, or continuation of, LIBOR Loans), and additionally, in the case of any
conversion of LIBOR Loans into ABR Loans, or continuation of LIBOR Loans, shall
be the last day of the Interest Period applicable to such LIBOR Loans.
(ii) The Proposed [Conversion] [Continuation] involves
$____________/3/ in aggregate principal amount of [Term/Revolving]/4/
Loans made pursuant to a Borrowing on ________________,/5/ which Loans
are presently maintained as [ABR] [LIBOR] Loans and are proposed hereby
to be [converted into ABR Loans] [converted into LIBOR Loans] [continued
as LIBOR Loans]./6/
[(iii) The initial Interest Period for the Loans being [converted
into] [continued as] LIBOR Loans pursuant to the Proposed [Conversion]
[Continuation] shall be [one/three/six months].]/7/
The Borrower hereby certifies that the following statement is true both
on and as of the date hereof and on and as of the effective date of the Proposed
[Conversion] [Continuation]: no Default or Event of Default has or will have
occurred and is continuing or would result from the Proposed [Conversion]
[Continuation].
Very truly yours,
▇▇▇▇▇▇▇▇ PUBLISHING COMPANY, L.L.C.
By: ______________________________
Title: _____________________________
-----------------------
/3/ Shall be an amount not less than $3,000,000 or, if greater, an integral
multiple of $1,000,000 in excess thereof (in the case of any conversion of LIBOR
Loans into ABR Loans) or $5,000,000 or, if greater, an integral multiple of
$1,000,000 in excess thereof (in the case of any conversion of ABR Loans into,
or continuation of, LIBOR Loans).
/4/ Select the applicable Class of Loans.
/5/ Insert the applicable Borrowing Date for the Loans being converted or
continued.
/6/ Complete with the applicable bracketed language.
/7/ Include this clause in the case of a Proposed Conversion or Continuation
involving a conversion of ABR Loans into, or continuation of, LIBOR Loans, and
select the applicable Interest Period.
-2-
EXHIBIT E
---------
FORM OF
LETTER OF CREDIT NOTICE
[Date]
First Union National Bank,
as Administrative Agent
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Syndication Agency Services
First Union National Bank,
as Issuing Lender
One First Union Center, 5th Floor
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇,
Communications/Media Finance Group
Ladies and Gentlemen:
The undersigned, ▇▇▇▇▇▇▇▇ Publishing Company, L.L.C. (the "Borrower"),
refers to the Credit Agreement, dated as of March 31, 1998, among The ▇▇▇▇▇▇▇▇
Companies, Inc., the Borrower, certain banks and other financial institutions
from time to time parties thereto (the "Lenders"), you, as Administrative Agent
for the Lenders, Canadian Imperial Bank of Commerce, as Syndication Agent,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc., as Documentation Agent, and the Managing
Agents named therein (as amended, modified or supplemented from time to time,
the "Credit Agreement," the terms defined therein being used herein as therein
defined), and, pursuant to SECTION 3.3 of the Credit Agreement, hereby gives
you, as Issuing Lender, irrevocable notice that the Borrower requests the
issuance of a Letter of Credit for its account under the Credit Agreement, and
to that end sets forth below the information relating to such Letter of Credit
(the "Requested Letter of Credit") as required by SECTION 3.3 of the Credit
Agreement:
(i) The Business Day on which the Requested Letter of Credit is
requested to be issued is _______________./1/
(ii) The Stated Amount of the Requested Letter of Credit is
$____________.
-----------------------
/1/Shall be at least three Business Days (or such shorter period as is
acceptable to the Issuing Lender in any given case) after the date hereof.
(iii) The expiry date of the Requested Letter of Credit is
______________.
(iv) The name and address of the beneficiary of the Requested
Letter of Credit is ______________________________________________.
The undersigned agrees to complete all application procedures and documents
required by you in connection with the Requested Letter of Credit.
The undersigned hereby certifies that the following statements are true on
the date hereof and will be true on the date of issuance of the Requested Letter
of Credit:
(A) Each of the representations and warranties contained in
ARTICLE V of the Credit Agreement and in the other Credit Documents is and
will be true and correct in all material respects on and as of each such
date, with the same effect as if made on and as of each such date, both
immediately before and after giving effect to the issuance of the Requested
Letter of Credit (except to the extent any such representation or warranty
is expressly stated to have been made as of a specific date, in which case
such representation or warranty shall be true and correct in all material
respects as of such date);
(B) No Default or Event of Default has occurred and is
continuing or would result from the issuance of the Requested Letter of
Credit; and
(C) After giving effect to the issuance of the Requested Letter
of Credit, the sum of (i) the aggregate principal amount of Revolving Loans
outstanding, (ii) the aggregate Letter of Credit Exposure of all Lenders,
and (iii) the aggregate principal amount of Swingline Loans outstanding,
will not exceed the aggregate Revolving Credit Commitments.
Very truly yours,
▇▇▇▇▇▇▇▇ PUBLISHING COMPANY, L.L.C.
By: ______________________________
Title: _____________________________
-2-
EXHIBIT F
---------
FORM OF
PARENT GUARANTY
THIS GUARANTY AGREEMENT (this "Guaranty"), dated as of the ____ day of
_________, 1998 (this "Guaranty"), is made between THE ▇▇▇▇▇▇▇▇ COMPANIES, INC.,
a Delaware corporation (the "Guarantor"), and FIRST UNION NATIONAL BANK, as
administrative agent for the banks and other financial institutions
(collectively, the "Lenders") party to the Credit Agreement referred to below
(in such capacity, the "Administrative Agent"), for the benefit of the
Guaranteed Parties (as hereinafter defined). Capitalized terms used herein
without definition shall have the meanings given to them in the Credit Agreement
referred to below.
RECITALS
A. The Guarantor, ▇▇▇▇▇▇▇▇ Publishing Company, L.L.C., a Delaware
limited liability company (the "Borrower"), the Lenders, First Union National
Bank, as Administrative Agent, Canadian Imperial Bank of Commerce, as
Syndication Agent, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc., as Documentation Agent,
and the Managing Agents named therein, are parties to a Credit Agreement, dated
as of March 31, 1998 (as amended, modified or supplemented from time to time,
the "Credit Agreement"), providing for the availability of certain credit
facilities to the Borrower upon the terms and subject to the conditions set
forth therein. The Guarantor owns all of the membership interests in the
Borrower.
B. It is a condition to the extension of credit to the Borrower under
the Credit Agreement that the Guarantor shall have agreed, by executing and
delivering this Guaranty, to guarantee to the Guaranteed Parties the payment in
full of the Guaranteed Obligations (as hereinafter defined). The Guaranteed
Parties are relying on this Guaranty in their decision to extend credit to the
Borrower under the Credit Agreement, and would not enter into the Credit
Agreement without this Guaranty.
C. The Guarantor will obtain benefits as a result of the extension of
credit to the Borrower under the Credit Agreement, which benefits are hereby
acknowledged, and, accordingly, desires to execute and deliver this Guaranty.
STATEMENT OF AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, to induce the Guaranteed Parties to enter into the Credit
Agreement and to induce the Lenders to extend credit to the Borrower thereunder,
the Guarantor hereby agrees as follows:
1. Guaranty. (a) The Guarantor hereby irrevocably, absolutely and
--------
unconditionally:
(i) guarantees to the Lenders (including the Issuing Lender and the
Swingline Lender in their capacities as such, and including any Lender in
its capacity as a counterparty to any Interest Rate Protection Agreement
with the Borrower), the Documentation Agent, the Syndication Agent and the
Administrative Agent (collectively, the "Guaranteed Parties") the full and
prompt payment, at any time and from time to time as and when due (whether
at the stated maturity, by acceleration or otherwise), of all Obligations
of the Borrower under the Credit Agreement and the other Credit Documents,
including, without limitation, all principal of and interest on the Loans,
all Reimbursement Obligations in respect of Letters of Credit, all fees,
expenses, indemnities and other amounts payable by the Borrower under the
Credit Agreement or any other Credit Document (including interest accruing
after the filing of a petition or commencement of a case by or with respect
to the Borrower seeking relief under any applicable federal and state laws
pertaining to bankruptcy, reorganization, arrangement, moratorium,
readjustment of debts, dissolution, liquidation or other debtor relief,
specifically including, without limitation, the Bankruptcy Code and any
fraudulent transfer and fraudulent conveyance laws (collectively,
"Insolvency Laws"), whether or not the claim for such interest is allowed
in such proceeding), all obligations of the Borrower to any Lender under
any Interest Rate Protection Agreement, and all Obligations that, but for
the operation of the automatic stay under Section 362(a) of the Bankruptcy
Code, would become due, in each case whether now existing or hereafter
created or arising and whether direct or indirect, absolute or contingent,
due or to become due (all liabilities and obligations described in this
clause (i), collectively, the "Guaranteed Obligations"); and
(ii) agrees to pay or reimburse upon demand all reasonable costs
and expenses (including, without limitation, reasonable attorneys' fees and
expenses) incurred or paid by (y) any Guaranteed Party in connection with
any suit, action or proceeding to enforce or protect any rights of the
Guaranteed Parties hereunder and (z) the Administrative Agent in connection
with any amendment, modification or waiver hereof or consent pursuant
hereto (all liabilities and obligations described in this clause (ii),
collectively, the "Other Obligations"; and the Other Obligations, together
with the Guaranteed Obligations, the "Total Obligations").
(b) The guaranty of the Guarantor set forth in this SECTION 1 is a guaranty
of payment as a primary obligor, and not a guaranty of collection.
2. Guaranty Absolute. The Guarantor agrees that its obligations
-----------------
hereunder are irrevocable, absolute and unconditional, are independent of the
Guaranteed Obligations and any Collateral or other security therefor or other
guaranty or liability in respect thereof, whether given by the Guarantor or any
other Person, and (to the full extent permitted by applicable law) shall not be
discharged, limited or otherwise affected by reason of any of the following,
whether or not the Guarantor has notice or knowledge thereof:
(i) any change in the time, manner or place of payment of, or in
any other term of, any Guaranteed Obligations or any guaranty or other
liability in respect thereof, or any amendment, modification or supplement
to, restatement of, or consent to any rescission or waiver of or departure
from, any provisions of the Credit Agreement, any other Credit Document or
any agreement or instrument delivered pursuant to any of the foregoing;
-2-
(ii) the invalidity or unenforceability of any Guaranteed
Obligations, any guaranty or other liability in respect thereof or any
provisions of the Credit Agreement, any other Credit Document or any
agreement or instrument delivered pursuant to any of the foregoing;
(iii) the release of the Guarantor hereunder or the taking,
acceptance or release of other guarantees of any Guaranteed Obligations or
additional Collateral or other security for any Guaranteed Obligations or
for any guaranty or other liability in respect thereof;
(iv) any renewal, extension, increase, decrease, release,
discharge, modification, settlement, compromise or other action or inaction
in respect of any Guaranteed Obligations or any guaranty or other liability
in respect thereof (other than satisfaction of the Termination Requirements
(as hereinafter defined)), including any acceptance or refusal of any offer
or performance with respect to the same or the subordination of the same to
the payment of any other obligations;
(v) any agreement not to pursue or enforce or any failure to
pursue or enforce (whether voluntarily or involuntarily as a result of
operation of law, court order or otherwise) any right or remedy in respect
of any Guaranteed Obligations, any guaranty or other liability in respect
thereof or any Collateral or other security for any of the foregoing; any
sale, exchange, release, substitution, compromise or other action in
respect of any such Collateral or other security; or any failure to create,
protect, perfect, secure, insure, continue or maintain any Liens in any
such Collateral or other security;
(vi) the exercise of any right or remedy available under the
Credit Documents, at law, in equity or otherwise in respect of any
Collateral or other security for any Guaranteed Obligations or for any
guaranty or other liability in respect thereof, in any order and by any
manner thereby permitted, including, without limitation, foreclosure on any
such Collateral or other security by any manner of sale thereby permitted,
whether or not every aspect of such sale is commercially reasonable;
(vii) any bankruptcy, reorganization, arrangement, liquidation,
insolvency, dissolution, termination, reorganization or like change in the
corporate structure or existence of the Borrower or any other Person
directly or indirectly liable for any Guaranteed Obligations (it being
understood and agreed that, as between the Guarantor, on the one hand, and
the Guaranteed Parties, on the other hand, (a) the maturity of the
Guaranteed Obligations may be accelerated as provided in the Credit
Agreement for the purposes of the Guarantor's guaranty herein,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Obligations guaranteed hereby, and (b) in
the event of any declaration of acceleration of such Obligations as
provided in the Credit Agreement, such Obligations (whether or not due and
payable) shall forthwith become due and payable in full by the Guarantor
for purposes of this Guaranty);
(viii) any manner of application of any payments by or amounts
received or collected from any Person, by whomsoever paid and howsoever
realized, whether in reduction of any Guaranteed Obligations or any other
obligations of the Borrower or any other Person directly or indirectly
liable for any Guaranteed Obligations, regardless of what Guaranteed
Obligations may remain unpaid after any such application; or
-3-
(ix) any other circumstance that might otherwise constitute a
legal or equitable discharge of, or a defense, set-off or counterclaim
available to, the Borrower, the Guarantor or a surety or guarantor
generally, other than the occurrence of all of the following: (x) the
payment in full of the Total Obligations (other than indemnity obligations
not then due and payable and that survive termination of the Credit
Documents), (y) the termination or expiration of all Letters of Credit
under the Credit Agreement and (z) the termination of the Commitments under
the Credit Agreement (the events in clauses (x), (y) and (z) above,
collectively, the "Termination Requirements").
3. Waivers. The Guarantor hereby knowingly, voluntarily and expressly
-------
waives to the full extent permitted by applicable law:
(i) presentment, demand for payment, demand for performance,
protest and notice of any other kind, including, without limitation, notice
of nonpayment or other nonperformance (including notice of default under
any Credit Document with respect to any Guaranteed Obligations), protest,
dishonor, acceptance hereof, extension of additional credit to the Borrower
and of any of the matters referred to in SECTION 2 and of any rights to
consent thereto;
(ii) any right to require the Guaranteed Parties or any of them,
as a condition of payment or performance by the Guarantor hereunder, to
proceed against, or to exhaust or have resort to any Collateral or other
security from or any deposit balance or other credit in favor of, the
Borrower or any other Person directly or indirectly liable for any
Guaranteed Obligations, or to pursue any other remedy or enforce any other
right; and any other defense based on an election of remedies with respect
to any Collateral or other security for any Guaranteed Obligations or for
any guaranty or other liability in respect thereof, notwithstanding that
any such election (including any failure to pursue or enforce any rights or
remedies) may impair or extinguish any right of indemnification,
contribution, reimbursement or subrogation or other right or remedy of the
Guarantor against the Borrower or any other Person directly or indirectly
liable for any Guaranteed Obligations or any such Collateral or other
security; and, without limiting the generality of the foregoing, the
Guarantor hereby specifically waives the benefits of Sections 26-7 through
26-9, inclusive, of the General Statutes of North Carolina, as amended from
time to time, and any similar statute or law of any other jurisdiction, as
the same may be amended from time to time;
(iii) any right or defense based on or arising by reason of any
right or defense of the Borrower or any other Person, including, without
limitation, any defense based on or arising from a lack of authority or
other disability of the Borrower or any other Person, the invalidity or
unenforceability of any Guaranteed Obligations, any Collateral or other
security therefor or any Credit Document or other agreement or instrument
delivered pursuant thereto, or the cessation of the liability of the
Borrower for any reason other than the satisfaction of the Termination
Requirements;
(iv) any defense based on the acts or omissions of any Guaranteed
Party in the administration of the Guaranteed Obligations, any guaranty or
other liability in respect thereof or any Collateral or other security for
any of the foregoing, and promptness, diligence or any requirement that any
Guaranteed Party create, protect, perfect, secure, insure, continue or
maintain any Liens in any such Collateral or other security;
-4-
(v) any right to assert against any Guaranteed Party, as a
defense, counterclaim, crossclaim or set-off, any defense, counterclaim,
claim, right of recoupment or set-off that it may at any time have against
any Guaranteed Party (including, without limitation, failure of
consideration, statute of limitations, payment, accord and satisfaction and
usury), other than compulsory counterclaims; and
(vi) any defense based on or afforded by any applicable law that
limits the liability of or exonerates guarantors or sureties or that may in
any other way conflict with the terms of this Guaranty.
4. Waiver of Subrogation; Subordination. The Guarantor hereby knowingly,
------------------------------------
voluntarily and expressly waives, until satisfaction of the Termination
Requirements, all claims and rights that it may have against the Borrower at any
time as a result of any payment made under or in connection with this Guaranty
or the performance or enforcement hereof, including all rights of subrogation to
the rights of any Guaranteed Party against the Borrower, all rights of
indemnity, contribution or reimbursement against the Borrower, all rights to
enforce any remedies of any Guaranteed Party against the Borrower, and any
benefit of, and any right to participate in, any Collateral or other security
held by any Guaranteed Party to secure payment of the Guaranteed Obligations, in
each case whether such claims or rights arise by contract, statute (including,
without limitation, the Bankruptcy Code), common law or otherwise. The
Guarantor agrees that all indebtedness and other obligations, whether now or
hereafter existing, of the Borrower to the Guarantor, including, without
limitation, any such indebtedness in any proceeding under the Bankruptcy Code
and any intercompany receivables, together with any interest thereon, shall be,
and hereby are, subordinated and made junior in right of payment to the Total
Obligations. The Guarantor agrees further that if any amount shall be paid to
or any distribution received by the Guarantor (i) on account of any such
indebtedness at any time after the occurrence and during the continuance of an
Event of Default, or (ii) on account of any such rights of subrogation,
indemnity, contribution or reimbursement at any time prior to the satisfaction
of the Termination Requirements, such amount or distribution shall be deemed to
have been received and to be held in trust for the benefit of the Guaranteed
Parties, and shall forthwith be delivered to the Administrative Agent in the
form received (with any necessary endorsements in the case of written
instruments), to be applied against the Guaranteed Obligations, whether or not
matured, in accordance with the terms of the applicable Credit Documents and
without in any way discharging, limiting or otherwise affecting the liability of
the Guarantor under any other provision of this Guaranty.
5. Representations and Warranties. The Guarantor represents and warrants
------------------------------
to the Guaranteed Parties as follows:
(a) The Guarantor (i) is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, (ii) has the full
corporate power and authority to execute, deliver and perform this Guaranty and
the other Credit Documents to which it is or will be a party, to own and hold
its property and to engage in its business as presently conducted, and (iii) is
duly qualified to do business as a foreign corporation and is in good standing
in each jurisdiction where the nature of its business or the ownership of its
properties requires it to be so qualified, except where the failure to be so
qualified could not, individually or in the aggregate, be reasonably expected to
have a Material Adverse Effect.
-5-
(b) The Guarantor has taken, or on the Closing Date will have taken, all
necessary corporate action to execute, deliver and perform this Guaranty and
each of the other Credit Documents to which it is or will be a party, and has,
or on the Closing Date (or any later date of execution and delivery) will have,
validly executed and delivered this Guaranty and each of the other Credit
Documents to which it is or will be a party. This Guaranty constitutes, and
upon execution and delivery thereof each of such other Credit Documents will
constitute, the legal, valid and binding obligation of the Guarantor,
enforceable against it in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally or by general equitable
principles or principles of good faith and fair dealing.
(c) The execution, delivery and performance by the Guarantor of this
Guaranty and each of the other Credit Documents to which it is or will be a
party, compliance by it with the terms hereof and thereof, and the consummation
of the Transactions, do not and will not (i) violate any provision of its
certificate of incorporation or bylaws, or contravene any other Requirement of
Law applicable to it, (ii) conflict with, result in a breach of or constitute
(with notice, lapse of time or both) a default under any indenture, agreement or
other instrument to which it is a party, by which it or any of its properties is
bound or to which it is subject, (iii) require any approval of its stockholders
or any approval or consent of any Person under any agreement to which it is a
party, except for such approvals or consents which will be obtained on or before
the Closing Date and disclosed in writing to the Lenders or such approvals or
consents the failure of which to obtain could not reasonably be expected, singly
or in the aggregate, to have a Material Adverse Effect, or (iv) except for the
Liens granted pursuant to the Security Documents, result in or require the
creation or imposition of any Lien upon any of its properties or assets.
(d) No consent, approval, authorization or other action by, notice to, or
registration or filing with, any Governmental Authority or other Person is or
will be required as a condition to or otherwise in connection with the due
execution, delivery and performance by the Guarantor of this Guaranty or any of
the other Credit Documents to which it is or will be a party or the legality,
validity or enforceability hereof or thereof, other than filings of Uniform
Commercial Code financing statements and other instruments and actions necessary
to perfect the Liens created by the Security Documents.
(e) There are no actions, investigations, suits or proceedings pending or,
to the knowledge of the Guarantor (after due investigation) threatened, at law,
in equity or in arbitration, before any court, other Governmental Authority or
other Person, (i) against or affecting the Guarantor or any of its properties
that could, if adversely determined, be reasonably expected to have a Material
Adverse Effect, or (ii) with respect to this Guaranty, any of the other Credit
Documents or any of the Transactions.
(f) All representations and warranties contained in the Credit Agreement or
any of the other Credit Documents that relate to the Guarantor are true and
correct in all material respects.
(g) The Guarantor has been provided with a true and complete copy of the
executed Credit Agreement, as in effect as of the date hereof, and its principal
officers are familiar with the contents thereof, particularly insofar as the
contents thereof relate or apply to the Guarantor.
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6. Financial Condition of the Borrower. The Guarantor represents that it
-----------------------------------
has knowledge of the Borrower's financial condition and affairs and that it has
adequate means to obtain from the Borrower on an ongoing basis information
relating thereto and to the Borrower's ability to pay and perform the Guaranteed
Obligations, and agrees to assume the responsibility for keeping, and to keep,
so informed for so long as this Guaranty is in effect. The Guarantor agrees
that the Guaranteed Parties shall have no obligation to investigate the
financial condition or affairs of the Borrower for the benefit of the Guarantor
nor to advise the Guarantor of any fact respecting, or any change in, the
financial condition or affairs of the Borrower that might become known to any
Guaranteed Party at any time, whether or not such Guaranteed Party knows or
believes or has reason to know or believe that any such fact or change is
unknown to the Guarantor, or might (or does) materially increase the risk of the
Guarantor as guarantor, or might (or would) affect the willingness of the
Guarantor to continue as a guarantor of the Guaranteed Obligations.
7. Payments; Application; Set-Off. (a) The Guarantor agrees that, upon
------------------------------
the failure of the Borrower to pay any Guaranteed Obligations when and as the
same shall become due (whether at the stated maturity, by acceleration or
otherwise), and without limitation of any other right or remedy that any
Guaranteed Party may have at law, in equity or otherwise against the Guarantor,
the Guarantor will forthwith pay or cause to be paid to the Administrative
Agent, for the benefit of the Guaranteed Parties, an amount equal to the amount
of the Guaranteed Obligations then due and owing as aforesaid.
(b) All payments made by the Guarantor hereunder will be made in Dollars to
the Administrative Agent, without set-off, counterclaim or other defense and, in
accordance with SECTION 2.17 of the Credit Agreement, free and clear of and
without deduction for any Taxes, the Guarantor hereby agreeing to comply with
and be bound by the provisions of SECTION 2.17 of the Credit Agreement in
respect of all payments made by it hereunder and the provisions of which Section
are hereby incorporated into and made a part of this Guaranty by this reference
as if set forth herein at length.
(c) All payments made hereunder shall be applied upon receipt as follows:
(i) first, to the payment of all Other Obligations owing to the
Administrative Agent;
(ii) second, after payment in full of the amounts specified in
clause (i) above, to the ratable payment of all other Total Obligations
owing to the Guaranteed Parties; and
(iii) third, after payment in full of the amounts specified in
clauses (i) and (ii) above, and following the termination of this Guaranty,
to the Guarantor or any other Person lawfully entitled to receive such
surplus.
(d) For purposes of applying amounts in accordance with this Section, the
Administrative Agent shall be entitled to rely upon any Guaranteed Party that
has entered into an Interest Rate Protection Agreement with the Borrower for a
determination (which such Guaranteed Party agrees to provide or cause to be
provided upon request of the Administrative Agent) of the outstanding Guaranteed
Obligations owed to such Guaranteed Party under any such Interest Rate
Protection Agreement. Unless it has actual knowledge (including by way of
written notice from any such Guaranteed Party) to the contrary, the
Administrative Agent, in acting hereunder, shall be entitled to
-7-
assume that no Interest Rate Protection Agreements or Obligations in respect
thereof are in existence between any Guaranteed Party and the Borrower.
(e) The Guarantor shall remain liable to the extent of any deficiency
between the amount of all payments made hereunder and the aggregate amount of
the sums referred to in clauses (i) and (ii) of subsection (c) above.
(f) In addition to all other rights and remedies available under the Credit
Documents or applicable law or otherwise, upon and at any time after the
occurrence and during the continuance of any Event of Default, each Guaranteed
Party may, and is hereby authorized by the Guarantor, at any such time and from
time to time, to the fullest extent permitted by applicable law, without
presentment, demand, protest or other notice of any kind, all of which are
hereby knowingly and expressly waived by the Guarantor, to set off and to apply
any and all deposits (general or special, time or demand, provisional or final)
and any other property at any time held (including at any branches or agencies,
wherever located), and any other indebtedness at any time owing, by such
Guaranteed Party to or for the credit or the account of the Guarantor against
any or all of the obligations of the Guarantor to such Guaranteed Party
hereunder now or hereafter existing, whether or not such obligations may be
contingent or unmatured, the Guarantor hereby granting to each Guaranteed Party
a continuing security interest in and Lien upon all such deposits and other
property as security for such obligations. Each Guaranteed Party agrees to
notify the Guarantor promptly after any such set-off and application; provided,
--------
however, that the failure to give such notice shall not affect the validity of
-------
such set-off and application.
8. Enforcement. The Guaranteed Parties agree that, except as provided in
-----------
SECTION 7(f), this Guaranty may be enforced only by the Administrative Agent,
acting upon the instructions or with the consent of the Required Lenders as
provided for in the Credit Agreement, and that no Guaranteed Party shall have
any right individually to enforce or seek to enforce this Guaranty or to realize
upon any Collateral or other security given to secure the payment and
performance of the Guarantor's obligations hereunder. The obligations of the
Guarantor hereunder are independent of the Guaranteed Obligations, and a
separate action or actions may be brought against the Guarantor whether or not
action is brought against the Borrower and whether or not the Borrower is joined
in any such action. The Guarantor agrees that to the extent all or part of any
payment of the Guaranteed Obligations made by any Person is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid by or on behalf of any Guaranteed Party to a trustee, receiver or any
other party under any Insolvency Laws (the amount of any such payment, a
"Reclaimed Amount"), then, to the extent of such Reclaimed Amount, this Guaranty
shall continue in full force and effect or be revived and reinstated, as the
case may be, as to the Guaranteed Obligations intended to be satisfied as if
such payment had not been received; and the Guarantor acknowledges that the term
"Guaranteed Obligations" includes all Reclaimed Amounts that may arise from time
to time. Notwithstanding any other provisions contained herein or in any other
Credit Document, no provision of this Guaranty shall require or permit the
collection from the Guarantor of interest in excess of the maximum rate or
amount that the Guarantor may be required or permitted to pay pursuant to
applicable law.
9. Amendments, Waivers, etc. No amendment, modification, waiver,
------------------------
discharge or termination of, or consent to any departure by the Guarantor from,
any provision of this Guaranty, shall be effective unless in a writing executed
and delivered in accordance with SECTION 11.6 of the Credit Agreement, and then
the same shall be effective only in the specific instance and for the specific
purpose for which given.
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10. Continuing Guaranty; Term; Successors and Assigns; Assignment;
--------------------------------------------------------------
Survival. This Guaranty is a continuing guaranty and covers all of the
--------
Guaranteed Obligations as the same may arise and be outstanding at any time and
from time to time from and after the date hereof, and shall (i) remain in full
force and effect until satisfaction of all of the Termination Requirements, (ii)
be binding upon and enforceable against the Guarantor and its successors and
assigns (provided, however, that the Guarantor may not sell, assign or transfer
-------- -------
any of its rights, interests, duties or obligations hereunder without the prior
written consent of all of the Lenders) and (iii) inure to the benefit of and be
enforceable by each Guaranteed Party and its successors and assigns. All
representations, warranties, covenants and agreements herein shall survive the
execution and delivery of this Guaranty.
11. Governing Law; Consent to Jurisdiction. THIS GUARANTY SHALL BE
--------------------------------------
INTERPRETED, AND THE RIGHTS AND LIABILITIES OF THE GUARANTEED PARTIES AND THE
GUARANTOR DETERMINED, IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO
CONFLICTS OF LAW PROVISIONS) OF THE STATE OF NORTH CAROLINA. AS PART OF THE
CONSIDERATION FOR NEW VALUE THIS DAY RECEIVED, THE GUARANTOR HEREBY CONSENTS TO
THE JURISDICTION OF ANY STATE COURT WITHIN MECKLENBURG COUNTY, NORTH CAROLINA OR
ANY FEDERAL COURT LOCATED WITHIN THE WESTERN DISTRICT OF THE STATE OF NORTH
CAROLINA FOR ANY PROCEEDING INSTITUTED HEREUNDER OR UNDER ANY OF THE OTHER
CREDIT DOCUMENTS, OR ARISING OUT OF OR IN CONNECTION WITH THIS GUARANTY OR ANY
OF THE OTHER CREDIT DOCUMENTS, OR ANY PROCEEDING TO WHICH ANY GUARANTEED PARTY
OR THE GUARANTOR IS A PARTY, INCLUDING ANY ACTIONS BASED UPON, ARISING OUT OF,
OR IN CONNECTION WITH ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY GUARANTEED PARTY OR THE GUARANTOR.
THE GUARANTOR IRREVOCABLY AGREES TO BE BOUND (SUBJECT TO ANY AVAILABLE RIGHT OF
APPEAL) BY ANY JUDGMENT RENDERED OR RELIEF GRANTED THEREBY AND FURTHER WAIVES
ANY OBJECTION THAT IT MAY HAVE BASED ON LACK OF JURISDICTION OR IMPROPER VENUE
OR FORUM NON CONVENIENS TO THE CONDUCT OF ANY SUCH PROCEEDING. THE GUARANTOR
--------------------
CONSENTS THAT ALL SERVICE OF PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
DIRECTED TO IT AT ITS ADDRESS SET FORTH HEREINBELOW, AND SERVICE SO MADE SHALL
BE DEEMED TO BE COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT THEREOF OR THREE
(3) BUSINESS DAYS AFTER DEPOSIT IN THE UNITED STATES MAILS, PROPER POSTAGE
PREPAID AND PROPERLY ADDRESSED. NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT
TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT
OF ANY GUARANTEED PARTY TO BRING ANY ACTION OR PROCEEDING AGAINST THE GUARANTOR
IN THE COURTS OF ANY OTHER JURISDICTION.
12. Arbitration; Preservation and Limitation of Remedies. (a) Upon
----------------------------------------------------
demand of any party hereto, whether made before or after institution of any
judicial proceeding, any dispute, claim or controversy arising out of, connected
with or relating to this Guaranty or any other Credit Document ("Disputes")
between or among the Guarantor and the Guaranteed Parties, or any of them, shall
be resolved by binding arbitration as provided herein. Institution of a
judicial proceeding by a party does not waive the right of that party to demand
arbitration hereunder. Disputes may include,
-9-
without limitation, tort claims, counterclaims, claims brought as class actions,
claims arising from documents executed in the future, or claims arising out of
or connected with the transactions contemplated by this Guaranty, the Credit
Agreement and the other Credit Documents. Arbitration shall be conducted under
and governed by the Commercial Financial Disputes Arbitration Rules (the
"Arbitration Rules") of the American Arbitration Association (the "AAA"), as in
effect from time to time, and Title 9 of the U.S. Code, as amended. All
arbitration hearings shall be conducted in the city in which the principal
office of the Administrative Agent is located. The expedited procedures set
forth in Rule 51 et seq. of the Arbitration Rules shall be applicable to claims
-- ---
of less than $1,000,000. All applicable statutes of limitation shall apply to
any Dispute. A judgment upon the award may be entered in any court having
jurisdiction. The panel from which all arbitrators are selected shall be
comprised of licensed attorneys. The single arbitrator selected for expedited
procedure shall be a retired judge from the highest court of general
jurisdiction, state or federal, of the state where the hearing will be conducted
or, if such person is not available to serve, the single arbitrator may be a
licensed attorney. Notwithstanding the foregoing, this arbitration provision
does not apply to Disputes under or related to Interest Rate Protection
Agreements.
(b) Notwithstanding the preceding binding arbitration provisions, the
parties hereto agree to preserve, without diminution, certain remedies that any
party hereto may employ or exercise freely, independently or in connection with
an arbitration proceeding or after an arbitration action is brought. Any party
hereto shall have the right to proceed in any court of proper jurisdiction or by
self-help to exercise or prosecute the following remedies, as applicable: (i)
all rights to foreclose against any Collateral by exercising a power of sale
granted pursuant to any of the Credit Documents or under applicable law or by
judicial foreclosure and sale, including a proceeding to confirm the sale; (ii)
all rights of self-help, including peaceful occupation of real property and
collection of rents, set-off, and peaceful possession of personal property;
(iii) obtaining provisional or ancillary remedies, including injunctive relief,
sequestration, garnishment, attachment, appointment of a receiver and filing an
involuntary bankruptcy proceeding; and (iv) when applicable, a judgment by
confession of judgment. Preservation of these remedies does not limit the power
of an arbitrator to grant similar remedies that may be requested by a party in a
Dispute. The parties hereto agree that no party shall have a remedy of punitive
or exemplary damages against any other party in any Dispute, and each party
hereby waives any right or claim to punitive or exemplary damages that it has
now or that may arise in the future in connection with any Dispute, whether such
Dispute is resolved by arbitration or judicially.
13. Notices. All notices and other communications provided for hereunder
-------
shall be given in the manner set forth in and subject to the provisions of
SECTION 11.5 of the Credit Agreement and shall be addressed (a) if to the
Guarantor, in care of the Borrower and at the Borrower's address for notices set
forth in SECTION 11.5 of the Credit Agreement, and (b) if to any Guaranteed
Party, at its address for notices set forth in SECTION 11.5 of the Credit
Agreement; or to such other address as any of the Persons listed above may
designate for itself by like notice to the other Persons listed above; and in
each case, with copies to such other Persons as may be specified under the
provisions of the Credit Agreement.
14. No Waiver. The rights and remedies of the Guaranteed Parties
---------
expressly set forth in this Guaranty and the other Credit Documents are
cumulative and in addition to, and not exclusive of, all other rights and
remedies available at law, in equity or otherwise. No failure or delay on the
part of any Guaranteed Party in exercising any right, power or privilege shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right, power or privilege preclude any other or
-10-
further exercise thereof or the exercise of any other right, power or privilege
or be construed to be a waiver of any Default or Event of Default. No course of
dealing between the Guarantor and any Guaranteed Party or their agents or
employees shall be effective to amend, modify or discharge any provision of this
Guaranty or any other Credit Document or to constitute a waiver of any Default
or Event of Default. No notice to or demand upon the Guarantor in any case shall
entitle the Guarantor to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the right of any Guaranteed Party
to exercise any right or remedy or take any other or further action in any
circumstances without notice or demand.
15. Severability. To the extent any provision of this Guaranty is
------------
prohibited by or invalid under the applicable law of any jurisdiction, such
provision shall be ineffective only to the extent of such prohibition or
invalidity and only in such jurisdiction, without prohibiting or invalidating
such provision in any other jurisdiction or the remaining provisions of this
Guaranty in any jurisdiction.
16. Construction. The headings of the various sections and subsections of
------------
this Guaranty have been inserted for convenience only and shall not in any way
affect the meaning or construction of any of the provisions hereof. Unless the
context otherwise requires, words in the singular include the plural and words
in the plural include the singular.
17. Counterparts. This Guaranty may be executed in any number of
------------
counterparts and by different parties hereto on separate counterparts, each of
which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.
-11-
IN WITNESS WHEREOF, the parties hereto have caused this Guaranty to be
executed by their duly authorized officers as of the date first above written.
THE ▇▇▇▇▇▇▇▇ COMPANIES, INC.
By: __________________________________
Title: _______________________________
Accepted and agreed to:
FIRST UNION NATIONAL BANK, as
Administrative Agent
By: _________________________________
Title: ______________________________
-12-
EXHIBIT G
---------
FORM OF
BORROWER PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AND SECURITY AGREEMENT, dated as of the _____ day of
_____________, 1998 (this "Agreement"), is made by ▇▇▇▇▇▇▇▇ PUBLISHING COMPANY,
L.L.C., a Delaware limited liability company (the "Pledgor"), in favor of FIRST
UNION NATIONAL BANK, as administrative agent for the banks and other financial
institutions (collectively, the "Lenders") party to the Credit Agreement
referred to below (in such capacity, the "Administrative Agent"), for the
benefit of the Secured Parties (as hereinafter defined). Capitalized terms used
herein without definition shall have the meanings given to them in the Credit
Agreement referred to below.
RECITALS
A. The ▇▇▇▇▇▇▇▇ Companies, Inc., the Pledgor, the Lenders, First Union
National Bank, as Administrative Agent, Canadian Imperial Bank of Commerce, as
Syndication Agent, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc., as Documentation Agent,
and the Managing Agents named therein, are parties to a Credit Agreement, dated
as of March 31, 1998 (as amended, modified or supplemented from time to time,
the "Credit Agreement"), providing for the availability of certain credit
facilities to the Pledgor upon the terms and subject to the conditions set forth
therein.
B. It is a condition to the extension of credit to the Pledgor under the
Credit Agreement that the Pledgor shall have agreed, by executing and delivering
this Agreement, to secure the payment in full of its Obligations under the
Credit Agreement and the other Credit Documents. The Secured Parties are
relying on this Agreement in their decision to extend credit to the Pledgor
under the Credit Agreement, and would not enter into the Credit Agreement
without this Agreement.
STATEMENT OF AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, to induce the Secured Parties to enter into the Credit Agreement
and to induce the Lenders to extend credit to the Pledgor thereunder, the
Pledgor hereby agrees as follows:
ARTICLE I
DEFINITIONS
1.1 Defined Terms. For purposes of this Agreement, in addition to the
-------------
terms defined elsewhere herein, the following terms shall have the meanings set
forth below:
"Accounts" shall mean, collectively, all of the Pledgor's accounts, as
defined in the Uniform Commercial Code, whether now owned or existing or
hereafter acquired or arising, including, without limitation, all of the
Pledgor's accounts receivable, all rights to payment for goods sold or leased or
to be sold or to be leased (including all rights to returned or repossessed
goods) or for services rendered at any time or for services to be rendered
(including any rights to stoppage in transit, repossession and reclamation and
other rights of an unpaid vendor or secured party), all rights under or
evidenced by book debts, notes, bills, drafts or acceptances, all Instruments
evidencing or relating to any of the foregoing, and all rights under security
agreements, guarantees, indemnities and other instruments and contracts securing
or otherwise relating to any of the foregoing, in each case whether now owned or
existing or hereafter acquired or arising.
"Collateral" shall have the meaning given to such term in SECTION 2.1.
"Collateral Accounts" shall have the meaning given to such term in SECTION
6.3.
"Contracts" shall mean, collectively, all rights of the Pledgor under all
leases, contracts and agreements to which the Pledgor is now or hereafter a
party, including, without limitation, all rights, privileges and powers, whether
for payment or performance, under distribution agreements, printing service
agreements and promotional and marketing agreements, and all rights, privileges
and powers under Investment Agreements and Licenses as more particularly
described in the definitions of such terms herein, together with any and all
extensions, modifications, amendments and renewals of such contracts and
agreements and all rights of the Pledgor to receive moneys due or to become due
thereunder or pursuant thereto and to amend, modify, terminate or exercise
rights under such contracts and agreements, but excluding rights under (but not
excluding proceeds of) any lease, agreement, license (including without
limitation any License) or contract that by the terms thereof, or under
applicable law, cannot be assigned or a security interest granted therein in the
manner contemplated by this Agreement unless consent from the relevant party or
parties has been obtained and under the terms of which lease, agreement or
contract any such assignment or grant of a security interest therein in the
absence of such consent would, or could, result in the termination thereof, but
only to the extent that (y) such rights are subject to such contractual or legal
restriction and (z) such restriction has not been rendered ineffective pursuant
to the Uniform Commercial Code of any relevant jurisdiction or any other
applicable law (including the Bankruptcy Code) or principles of equity.
"Copyrights" shall mean, collectively, all of the Pledgor's copyrights,
copyright registrations and applications for copyright registration, whether
under the laws of the United States or any other country or jurisdiction,
including all recordings, supplemental registrations and derivative or
collective work registrations, and all renewals and extensions thereof, in each
case whether now owned or existing or hereafter acquired or arising.
"Copyright Collateral" shall mean, collectively, (i) all Copyrights and
(ii) all Copyright Licenses to which the Pledgor is or hereafter becomes a party
and all other General Intangibles embodying, incorporating, evidencing or
otherwise relating or pertaining to any Copyrights, in each case whether now
owned or existing or hereafter acquired or arising.
"Copyright License" shall mean any agreement now or hereafter in effect
granting any right to any third party under any Copyright now or hereafter owned
by the Pledgor or which the Pledgor otherwise has the right to license, or
granting any right to the Pledgor under any property of the type
-2-
described in the definition of Copyright herein now or hereafter owned by any
third party, and all rights of the Pledgor under any such agreement.
"Deposit Accounts" shall mean, collectively, all of the Pledgor's deposit
accounts, whether maintained with the Administrative Agent or any other bank or
depository institution, in each case whether now owned or existing or hereafter
acquired or arising and including, without limitation, any Collateral Account,
together with all funds held from time to time therein and all certificates and
instruments from time to time representing, evidencing or deposited into such
accounts.
"Equipment" shall mean, collectively, all of the Pledgor's equipment, as
defined in the Uniform Commercial Code, whether now owned or existing or
hereafter acquired or arising, including, without limitation, all machinery,
equipment, computer equipment and software, parts, supplies, appliances,
fittings, furniture and fixtures of every kind and nature, wherever located and
whether or not affixed to any real property, all Mobile Goods, and all
accessions, accessories, additions, attachments, improvements, modifications and
upgrades to, replacements of and substitutions for the foregoing, in each case
whether now owned or existing or hereafter acquired or arising.
"General Intangibles" shall mean, collectively, all of the Pledgor's
general intangibles, as defined in the Uniform Commercial Code, whether now
owned or existing or hereafter acquired or arising, including, without
limitation, all Contracts, all Copyright Collateral, Patent Collateral and
Trademark Collateral, all inventions, designs, trade secrets, trade processes,
confidential or proprietary technical or business information, know-how,
registrations, licenses, permits and franchises, all rights under or evidenced
by book debts, notes, bills, drafts, acceptances, chooses in action, causes of
action or Instruments, all indebtedness, obligations and other amounts at any
time owing to the Pledgor from any Person and all interest, cash, instruments
and other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such indebtedness,
obligations or other amounts (including, without limitation, all Intercompany
Obligations), all judgments, tax refund claims, claims against carriers and
shippers, claims under liens and insurance policies, all rights under security
agreements, guarantees, indemnities and other instruments and contracts securing
or otherwise relating to any of the foregoing, all invoices, customer lists,
books and records, ledger and account cards, computer tapes, disks, software,
printouts and other corporate or business records relating to the foregoing, and
all other intangible personal property of every kind and nature, and all
accessions, additions, improvements, modifications and upgrades to, replacements
of and substitutions for the foregoing, in each case whether now owned or
existing or hereafter acquired or arising, but excluding Accounts and excluding
leases, agreements, licenses (including without limitation Licenses) and
contracts to the extent excluded from Contracts under the definition of such
term herein.
"Instruments" shall mean, collectively, all instruments, chattel paper or
documents, each as defined in the Uniform Commercial Code, of the Pledgor,
whether now owned or existing or hereafter acquired or arising, evidencing,
representing, securing, arising from or otherwise relating to any Accounts,
General Intangibles, Intercompany Obligations or other Collateral, including,
without limitation, any promissory notes, drafts, bills of exchange, documents
of title and receipts.
"Intercompany Obligations" shall mean, collectively, all indebtedness,
obligations and other amounts at any time owing to the Pledgor from its
Subsidiaries and Affiliates and all interest, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such indebtedness, obligations or
other amounts.
-3-
"Interests" shall mean, collectively, all partnership, joint venture,
limited liability company or other equity interests in any Person not a
corporation (including, without limitation, any such Person that is or hereafter
becomes a Subsidiary of the Pledgor) at any time owned by the Pledgor, and all
rights, powers and privileges relating thereto or arising therefrom, including,
without limitation, the Pledgor's right to vote and to manage and administer the
business of any such Person pursuant to the applicable Investment Agreement,
together with all other rights, interests, claims and other property of the
Pledgor in any manner arising out of or relating to any such interests, whether
now existing or hereafter arising or acquired, of whatever kind or character
(including any tangible or intangible property or interests therein), and
further including, without limitation (but subject to the provisions of SECTION
5.3), all rights of the Pledgor to receive amounts due and to become due
(including, without limitation, dividends, distributions, interest, income and
returns of capital) under or in respect of any Investment Agreement, to receive
payments or other amounts upon termination of any Investment Agreement, and to
receive any other payments or distributions, whether in cash, securities,
property, or a combination thereof, in respect of any such interests, all of the
Pledgor's rights of access to the books and records of any such Person, and all
rights granted or available under applicable law in connection therewith, all
options, warrants and other rights exercisable for any of the foregoing, and all
securities convertible into any of the foregoing, in each case whether now or
hereafter existing and any time owned by the Pledgor, together with all
certificates, instruments and entries upon the books of financial intermediaries
at any time evidencing any of the foregoing.
"Inventory" shall mean, collectively, all of the Pledgor's inventory, as
defined in the Uniform Commercial Code, whether now owned or existing or
hereafter acquired or arising, including, without limitation, all goods
manufactured, acquired or held for sale or lease, all raw materials, component
materials, work-in-process and finished goods, all supplies, goods and other
items and materials used or consumed in the manufacture, production, packaging,
shipping, selling, leasing or furnishing of such inventory or otherwise in the
operation of the business of the Pledgor, all goods in which the Pledgor now or
at any time hereafter has any interest or right of any kind, and all goods that
have been returned to or repossessed by or on behalf of the Pledgor, in each
case whether or not the same is in transit or in the constructive, actual or
exclusive occupancy or possession of the Pledgor or is held by the Pledgor or by
others for the account of the Pledgor, and in each case whether now owned or
existing or hereafter acquired or arising.
"Investment Agreement" shall mean any partnership agreement, joint venture
agreement, limited liability company operating agreement or other agreement
creating, governing or evidencing any Interests and to which the Pledgor is now
or hereafter becomes a party, as any such agreement may be amended, modified,
supplemented, restated or replaced from time to time.
"Investments" shall mean, collectively, the Stock and the Interests.
"License" shall mean any Copyright License, Patent License or Trademark
License.
"Material Contracts" shall have the meaning given to such term in SECTION
3.8.
"Mobile Goods" shall mean, collectively, all of the Pledgor's motor
vehicles, tractors, trailers, aircraft, rolling stock and other like property,
whether or not the title thereto is governed by a certificate of title or
ownership), in each case whether now owned or existing or hereafter acquired or
arising.
-4-
"Patents" shall mean, collectively, all of the Pledgor's letters patent,
whether under the laws of the United States or any other country or
jurisdiction, all recordings and registrations thereof and applications
therefor, including, without limitation, the inventions described therein, all
reissues, continuations, divisions, renewals, extensions, continuations-in-part
thereof, in each case whether now owned or existing or hereafter acquired or
arising.
"Patent Collateral" shall mean, collectively, (i) all Patents and (ii) all
Patent Licenses to which the Pledgor is or hereafter becomes a party and all
other General Intangibles embodying, incorporating, evidencing or otherwise
relating or pertaining to any Patents, in each case whether now owned or
existing or hereafter acquired or arising.
"Patent License" shall mean any agreement now or hereafter in effect
granting to any third party any right to make, use or sell any invention on
which a Patent, now or hereafter owned by the Pledgor or which the Pledgor
otherwise has the right to license, is in existence, or granting to the Pledgor
any right to make, use or sell any invention on which property of the type
described in the definition of Patent herein, now or hereafter owned by any
third party, is in existence, and all rights of the Pledgor under any such
agreement.
"Proceeds" shall have the meaning given to such term in SECTION 2.1.
"Secured Parties" shall mean, collectively, the Lenders (including the
Issuing Lender and the Swingline Lender in their capacities as such, and
including any Lender in its capacity as a counterparty to any Interest Rate
Protection Agreement with the Pledgor), the Documentation Agent, the Syndication
Agent and the Administrative Agent.
"Securities Act" shall have the meaning given to such term in SECTION 6.5.
"Stock" shall mean, collectively, all of the issued and outstanding shares,
interests or other equivalents of capital stock of any corporation (including,
without limitation, any corporation that is or hereafter becomes a Subsidiary of
the Pledgor) at any time owned by the Pledgor, whether voting or non-voting and
whether common or preferred, all options, warrants and other rights to acquire,
and all securities convertible into, any of the foregoing, all interest,
dividends, distributions and other amounts, and all additional stock, warrants,
options, securities and other property, from time to time paid or payable or
distributed or distributable in respect of any of the foregoing, in each case
whether now or hereafter existing and any time owned by the Pledgor, together
with all certificates, instruments and entries upon the books of financial
intermediaries at any time evidencing any of the foregoing.
"Trademarks" shall mean, collectively, all of the Pledgor's trademarks,
service marks, trade names, corporate and company names, business names, logos,
trade dress, trade styles, other source or business identifiers, designs and
general intangibles of a similar nature, whether under the laws of the United
States or any other country or jurisdiction, all recordings and registrations
thereof and applications therefor, all renewals and extensions thereof, all
rights corresponding thereto, and all goodwill associated therewith or
symbolized thereby, in each case whether now owned or existing or hereafter
acquired or arising.
"Trademark Collateral" shall mean, collectively, (i) all Trademarks and
(ii) all Trademark Licenses to which the Pledgor is or hereafter becomes a party
and all other General Intangibles
-5-
embodying, incorporating, evidencing or otherwise relating or pertaining to any
Trademarks, in each case whether now owned or existing or hereafter acquired or
arising.
"Trademark License" shall mean any agreement now or hereafter in effect
granting any right to any third party under any Trademark now or hereafter owned
by the Pledgor or which the Pledgor otherwise has the right to license, or
granting any right to the Pledgor under any property of the type described in
the definition of Trademark herein now or hereafter owned by any third party,
and all rights of the Pledgor under any such agreement.
1.2 Other Terms. All terms in this Agreement that are not capitalized
-----------
shall have the meanings provided by the applicable Uniform Commercial Code to
the extent the same are used or defined therein.
ARTICLE II
CREATION OF SECURITY INTEREST
2.1 Pledge and Grant of Security Interest. The Pledgor hereby pledges,
-------------------------------------
assigns and delivers to the Administrative Agent, for the ratable benefit of the
Secured Parties, and grants to the Administrative Agent, for the ratable benefit
of the Secured Parties, a Lien upon and security interest in, all of the
Pledgor's right, title and interest in and to the following, in each case
whether now owned or existing or hereafter acquired or arising (collectively,
the "Collateral"):
(i) all Accounts;
(ii) all Contracts;
(iii) all Deposit Accounts;
(iv) all Equipment;
(v) all General Intangibles;
(vi) all Inventory;
(vii) all Instruments;
(viii) subject to the provisions of SECTION 5.1(a), all
Investments;
(ix) to the extent not covered or not specifically excluded by
clauses (i) through (viii) above, all of the Pledgor's other personal
property, whether now owned or existing or hereafter arising or acquired;
and
(x) any and all proceeds, as defined in the Uniform Commercial
Code, products, rents and profits of or from any and all of the foregoing
and, to the extent not otherwise included, (w) all payments under any
insurance (whether or not the Administrative Agent is the loss payee
thereunder), indemnity, warranty or guaranty with respect to any of the
foregoing
-6-
Collateral, (x) all payments in connection with any requisition,
condemnation, seizure or forfeiture with respect to any of the foregoing
Collateral, (y) all claims and rights to recover for any past, present or
future infringement or dilution of or injury to any Copyright Collateral,
Patent Collateral or Trademark Collateral, and (z) all other amounts from
time to time paid or payable under or with respect to any of the foregoing
Collateral (collectively, "Proceeds"). For purposes of this Agreement, the
term "Proceeds" includes whatever is receivable or received when Collateral
or Proceeds are sold, exchanged, collected or otherwise disposed of,
whether voluntarily or involuntarily.
2.2 Security for Obligations. This Agreement and the Collateral secure
------------------------
the full and prompt payment, at any time and from time to time as and when due
(whether at the stated maturity, by acceleration or otherwise), of all
Obligations of the Pledgor under the Credit Agreement and the other Credit
Documents, including, without limitation, all principal of and interest on the
Loans, all Reimbursement Obligations in respect of Letters of Credit, all fees,
expenses, indemnities and other amounts payable by the Pledgor under the Credit
Agreement or any other Credit Document (including interest accruing after the
filing of a petition or commencement of a case by or with respect to the Pledgor
seeking relief under any applicable federal and state laws pertaining to
bankruptcy, reorganization, arrangement, moratorium, readjustment of debts,
dissolution, liquidation or other debtor relief, specifically including, without
limitation, the Bankruptcy Code and any fraudulent transfer and fraudulent
conveyance laws, whether or not the claim for such interest is allowed in such
proceeding), all obligations of the Pledgor to any Lender under any Interest
Rate Protection Agreement, all Obligations that, but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code, would become due,
and all fees, costs and expenses payable by the Pledgor under SECTION 8.1, in
each case whether now existing or hereafter created or arising and whether
direct or indirect, absolute or contingent, due or to become due.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Pledgor represents and warrants as follows:
3.1 Ownership of Collateral. The Pledgor owns, or has valid rights as a
-----------------------
lessee or licensee with respect to, all Collateral purported to be pledged by it
hereunder, free and clear of any Liens except for the Liens granted to the
Administrative Agent, for the benefit of the Secured Parties, pursuant to this
Agreement, and except for other Permitted Liens. No security agreement,
financing statement or other public notice with respect to all or any part of
the Collateral is on file or of record in any government or public office, and
the Pledgor has not filed or consented to the filing of any such statement or
notice, except (i) Uniform Commercial Code financing statements naming the
Administrative Agent as secured party, (ii) security instruments filed in the
U.S. Copyright Office or the U.S. Patent and Trademark Office naming the
Administrative Agent as secured party and (iii) as may be otherwise permitted by
the Credit Agreement.
3.2 Security Interests; Filings. This Agreement, together with (i) the
---------------------------
filing of duly completed and executed Uniform Commercial Code financing
statements naming the Pledgor as debtor, the Administrative Agent as secured
party, and describing the Collateral, in the jurisdictions set forth on Annex B
-------
hereto, which have been duly executed and delivered by the Pledgor and delivered
to the
-7-
Administrative Agent for filing, (ii) to the extent required by applicable law,
the filing of duly completed and executed collateral assignments in the forms
set forth as Exhibits B and C with the U.S. Copyright Office or the U.S. Patent
---------- -
and Trademark Office, as appropriate, with regard to registered Copyright
Collateral, Patent Collateral and Trademark Collateral, as the case may be,
(iii) in the case of uncertificated Investments, compliance with Section 8-313
(or its successor provision) of the applicable Uniform Commercial Code, (iv) as
to Mobile Goods covered by a certificate of title or ownership, the notation of
the Administrative Agent's security interest therein on the applicable
certificates of title or ownership, and (v) the delivery to the Administrative
Agent of all chattel paper, promissory notes and other Instruments included in
the Collateral, creates, and at all times shall constitute, a valid and
perfected security interest in and Lien upon the Collateral in favor of the
Administrative Agent, for the benefit of the Secured Parties, to the extent a
security interest therein can be perfected by such filings or possession of such
chattel paper, promissory notes or Instruments, as applicable, superior and
prior to the rights of all other Persons therein (except for Permitted Liens),
and no other or additional filings, registrations, recordings or actions are or
shall be necessary or appropriate in order to maintain the perfection and
priority of such Lien and security interest, other than actions required with
respect to Collateral of the types excluded from Article 9 of the applicable
Uniform Commercial Code or from the filing requirements under such Article 9 by
reason of Section 9-104 or 9-302 of the applicable Uniform Commercial Code and
other than continuation statements required under the applicable Uniform
Commercial Code (it being specifically noted that the Administrative Agent may
at its option, but shall not be required to, require that any bank or other
depository institution at which a Deposit Account is maintained enter into a
written agreement or take such other action as may be necessary to perfect the
security interest of the Administrative Agent in such Deposit Account and the
funds therein, and it being specifically understood that the security interest
of the Administrative Agent in such Deposit Account, absent such action, might
not be perfected).
3.3 Locations. Annex C lists, as to the Pledgor, (i) the address of its
--------- -------
chief executive office and principal place of business and each other place of
business, (ii) the address of each location of all original invoices, ledgers,
chattel paper, Instruments and other records or information evidencing or
relating to the Accounts, General Intangibles or other Collateral, and (iii) the
address of each location at which any Equipment or Inventory (other than Mobile
Goods and goods in transit) is kept or maintained, in each instance except for
any new locations established in accordance with the provisions of SECTION 4.2.
Except as may be otherwise noted therein, all locations identified in Annex C
-------
are leased by the Pledgor. The Pledgor does not presently conduct business
under any prior or other limited liability company name or under any trade or
fictitious name, except as indicated on Annex C, and the Pledgor has not entered
-------
into any contract or granted any Lien within the past five years under any name
other than its legal limited liability company name or a trade or fictitious
name indicated on Annex C.
-------
3.4 Authorization; Consent. No authorization, consent or approval of,
----------------------
or declaration or filing with, any Governmental Authority is required for the
valid execution, delivery and performance by the Pledgor of this Agreement, the
grant by it of the Lien and security interest in favor of the Administrative
Agent provided for herein, or the exercise by the Administrative Agent of its
rights and remedies hereunder, except for the filings described in SECTION 3.2,
any notices required under the Federal Assignment of Claims Act and similar
state statutes and any notice filing with state tax or revenue authorities
required to be made by account creditors in order to enforce any Accounts in
such state, and, in the case of Investments, except as may be required in
connection with a disposition of any such Collateral by laws affecting the
offering and sale of securities generally.
-8-
3.5 No Restrictions. There are no statutory or regulatory restrictions,
---------------
prohibitions or limitations on the Pledgor's ability to grant to the
Administrative Agent a Lien upon and security interest in the Collateral
pursuant to this Agreement or on the exercise by the Administrative Agent of its
rights and remedies hereunder (including any foreclosure upon or collection of
the Collateral, assuming compliance with any notice and other procedural
requirements applicable to such action under law), and there are no contractual
restrictions on the Pledgor's ability so to grant such Lien and security
interest.
3.6 Accounts. Each Account is, or at the time it arises will be, a bona
--------
fide, valid and legally enforceable indebtedness of the account debtor according
to its terms, arising out of or in connection with the sale, lease or
performance of goods or services by the Pledgor.
3.7 Investments. As of the date hereof, the Investments required to be
-----------
pledged by the Pledgor hereunder consist of the number and type of shares of
capital stock (in the case of issuers that are corporations) or the percentage
and type of equity interests (in the case of issuers other than corporations) as
described in Annex A. All of the Investments have been duly and validly issued
-------
and are fully paid and nonassessable (or, in the case of Interests, not subject
to any capital call or other additional capital requirement) and not subject to
any preemptive rights, warrants, options or similar rights or restrictions in
favor of third parties or any contractual or other restrictions upon transfer.
3.8 Material Contracts. As to each Investment Agreement, each Contract
------------------
listed on Annex D, each Contract specified in writing by the Administrative
-------
Agent to the Pledgor at any time after the date hereof, and each other Contract
to which the Pledgor is or hereafter becomes a party and that is material to its
business (the foregoing, collectively, "Material Contracts"), (i) the Pledgor is
not in default in any material respect under such Material Contract, and to the
knowledge of the Pledgor, none of the other parties to such Material Contract is
in default in any material respect thereunder (except as shall have been
disclosed in writing to the Administrative Agent), (ii) such Material Contract
is, or at the time of execution will be, the legal, valid and binding obligation
of all parties thereto, enforceable against such parties in accordance with the
respective terms thereof, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally, and no defense, offset, deduction or counterclaim will exist in any
material respect thereunder in favor of any such party, (iii) the performance by
the Pledgor of its obligations under such Material Contract in accordance with
its terms will not contravene any Requirement of Law or any contractual
restriction binding on or affecting the Pledgor or any of its properties, and
will not result in or require the creation of any Lien upon or with respect to
any of its properties, and (iv) the Pledgor has (or at the time of execution
will have) furnished the Administrative Agent with a correct and complete copy
of each Material Contract to which it is a party as then in effect.
3.9 Intellectual Property. Annexes E, F and G correctly set forth all
--------------------- ------------ -
registered Copyrights, Patents and Trademarks owned by the Pledgor and as of the
date hereof used or proposed to be used in its business. The Pledgor owns or
possesses the valid right to use all such Copyrights, Patents and Trademarks
listed under its name; all registrations therefor have been validly issued under
applicable law and are in full force and effect; no claim has been made in
writing or, to the knowledge of the Pledgor, orally, that any of such
Copyrights, Patents or Trademarks is invalid or unenforceable or violates or
infringes the rights of any other Person, and there is no such violation or
infringement in existence; and to the knowledge of the Pledgor, no other Person
is presently infringing upon the rights of the Pledgor with regard to any of
such Copyrights, Patents or Trademarks.
-9-
3.10 Documents of Title. No ▇▇▇▇ of lading, warehouse receipt or other
------------------
document or instrument of title is outstanding with respect to any Collateral
other than Mobile Goods and other than Inventory in transit in the ordinary
course of business to a location set forth on Annex C or to a customer of the
-------
Pledgor.
ARTICLE IV
COVENANTS
4.1 Use and Disposition of Collateral. So long as no Event of Default
---------------------------------
shall have occurred and be continuing, the Pledgor may, in any lawful manner not
inconsistent with the provisions of this Agreement and the other Credit
Documents, use, control and manage the Collateral in the operation of its
business, and receive and use the income, revenue and profits arising therefrom
and the Proceeds thereof, in the same manner and with the same effect as if this
Agreement had not been made; provided, however, that the Pledgor will not sell
-------- -------
or otherwise dispose of, grant any option with respect to, or mortgage, pledge,
grant any Lien with respect to or otherwise encumber any of the Collateral or
any interest therein, except for the security interest created in favor of the
Administrative Agent hereunder and except as may be otherwise expressly
permitted in accordance with the terms of this Agreement and the Credit
Agreement (including any applicable provisions therein regarding delivery of
proceeds of sale or disposition to the Administrative Agent).
4.2 Change of Name, Locations, etc. The Pledgor will not (i) change its
-------------------------------
name, identity or corporate structure, (ii) change its chief executive office or
principal place of business from the location thereof listed on Annex C, or
-------
(iii) remove any Collateral (other than Mobile Goods and goods in transit), or
any books, records or other information relating to Collateral, from the
applicable location thereof listed on Annex C, or keep or maintain any
-------
Collateral at a location not listed on Annex C, unless in each case the Pledgor
-------
has (1) given twenty (20) days' prior written notice to the Administrative Agent
of its intention to do so, together with information regarding any such new
location and such other information in connection with such proposed action as
the Administrative Agent may reasonably request, and (2) delivered to the
Administrative Agent ten (10) days prior to any such change or removal such
documents, instruments and financing statements as may be required by the
Administrative Agent, all in form and substance satisfactory to the
Administrative Agent, paid all necessary filing and recording fees and taxes,
and taken all other actions reasonably requested by the Administrative Agent
(including, at the reasonable request of the Administrative Agent, delivery of
opinions of counsel reasonably satisfactory to the Administrative Agent to the
effect that all such actions have been taken), in order to perfect and maintain
the Lien upon and security interest in the Collateral provided for herein in
accordance with the provisions of SECTION 3.2.
4.3 Records; Inspection. (a) The Pledgor will keep and maintain at its
-------------------
own cost and expense satisfactory and complete records of the Accounts and all
other Collateral, including, without limitation, records of all payments
received, all credits granted thereon, all merchandise returned and all other
documentation relating thereto, and will furnish to the Administrative Agent
from time to time such statements, schedules and reports (including, without
limitation, accounts receivable aging schedules) with regard to the Collateral
as the Administrative Agent may reasonably request.
(b) The Pledgor shall, from time to time at such times as may be
reasonably requested and upon reasonable notice, (i) make available to the
Administrative Agent for inspection and review at the
-10-
Pledgor's offices copies of all invoices and other documents and information
relating to the Collateral (including, without limitation, itemized schedules of
all collections of Accounts, showing the name of each account debtor, the amount
of each payment and such other information as the Administrative Agent shall
reasonably request), and (ii) permit the Administrative Agent or its
representatives to visit its offices or the premises upon which any Collateral
may be located, inspect its books and records and make copies and memoranda
thereof, inspect the Collateral, discuss its finances and affairs with its
officers, employees and independent accountants and take any other actions
necessary for the protection of the interests of the Secured Parties in the
Collateral. At the request of the Administrative Agent, the Pledgor will legend,
in form and manner satisfactory to the Administrative Agent, the books, records
and materials evidencing or relating to the Collateral with an appropriate
reference to the fact that the Collateral has been assigned to the
Administrative Agent and that the Administrative Agent has a security interest
therein. The Administrative Agent shall have the right to make test
verifications of Accounts in any reasonable manner and through any reasonable
medium, and the Pledgor agrees to furnish all such reasonable assistance and
information as the Administrative Agent may require in connection therewith.
4.4 Accounts. Unless notified otherwise by the Administrative Agent in
--------
accordance with the terms hereof, the Pledgor shall endeavor to collect its
Accounts and all amounts owing to it thereunder in the ordinary course of its
business consistent with reasonable business practices and shall apply forthwith
upon receipt thereof all such amounts as are so collected to the outstanding
balances thereof, and in connection therewith shall, at the request of the
Administrative Agent, take such action as the Administrative Agent may deem
necessary or advisable (within applicable laws) to enforce such collection. The
Pledgor shall not, except to the extent done in the ordinary course of its
business consistent with reasonable business practices and in accordance with
sound business judgment and provided that no Event of Default shall have
occurred and be continuing, (i) grant any extension of the time for payment of
any Account, (ii) compromise or settle any Account for less than the full amount
thereof, (iii) release, in whole or in part, any Person or property liable for
the payment of any Account, or (iv) allow any credit or discount on any Account.
The Pledgor shall promptly inform the Administrative Agent of any disputes with
any account debtor or obligor and of any claimed offset and counterclaim that
may be asserted with respect thereto involving, in each case, $100,000 or more,
where the Pledgor reasonably believes that the likelihood of payment by such
account debtor is materially impaired, indicating in detail the reason for the
dispute, all claims relating thereto and the amount in controversy.
4.5 Equipment. The Pledgor will, in accordance with sound business
---------
practices, maintain all Equipment used by it in its business (other than
obsolete Equipment) in good repair, working order and condition (normal wear and
tear excepted) and make all necessary repairs and replacements thereof so that
the value and operating efficiency thereof shall at all times be maintained and
preserved. The Pledgor shall not knowingly permit any Equipment to become a
fixture to any real property.
4.6 Inventory. The Pledgor will, in accordance with sound business
---------
practices, maintain all Inventory held by it or on its behalf in good saleable
or useable condition. Unless notified otherwise by the Administrative Agent in
accordance with the terms hereof, the Pledgor may, in any lawful manner not
inconsistent with the provisions of this Agreement and the other Credit
Documents, process, use and, in the ordinary course of business but not
otherwise, sell its Inventory. Without limiting the generality of the
foregoing, the Pledgor agrees that it shall not permit any material amount of
Inventory to be in the possession of any bailee, warehouseman, agent or
processor at any time unless such bailee, warehouseman, agent or processor shall
have been notified of the security interest created by this
-11-
Agreement and the Pledgor shall have exercised its reasonable best efforts to
obtain, at the Pledgor's sole cost and expense, a written agreement to hold such
Inventory subject to the security interest created by this Agreement and the
instructions of the Administrative Agent and to waive and release any Lien
(whether arising by operation of law or otherwise) it may have with respect to
such Inventory, such agreement to be in form and substance reasonably
satisfactory to the Administrative Agent.
4.7 Contracts. The Pledgor will, at its expense, at all times perform and
---------
comply with, in all material respects, all terms and provisions of each Material
Contract to which it is or hereafter becomes a party required to be performed or
complied with by it and enforce in all material respects the terms and
provisions thereof in accordance with its terms, and will not waive, amend or
modify any provision thereof in any manner other than in the ordinary course of
business of the Pledgor in accordance with reasonable business practices and for
a valid economic reason benefitting the Pledgor (provided that in no event may
--------
any waiver, amendment or modification be made that would materially adversely
affect the interests of the Administrative Agent and the Secured Parties). The
Pledgor will deliver copies of each Material Contract and each material
amendment or modification thereof to the Administrative Agent promptly upon the
execution and delivery thereof. With regard to all leases, contracts, licenses
and agreements that are excluded from the definition of the term "Contracts,"
the Pledgor covenants and agrees to exercise all of its material rights and
remedies under such leases, agreements, licenses and contracts in a commercially
reasonable manner consistent with the interests of the Administrative Agent and
the Secured Parties. The Pledgor will not enter into any Material Contract that
by its terms prohibits the assignment of the Pledgor's rights and interest
thereunder in the manner contemplated by this Agreement, other than as may be
entered into in the ordinary course of business of the Pledgor in accordance
with reasonable business practices and for a valid economic reason benefitting
the Pledgor. The Pledgor further covenants and agrees to use its reasonable
best efforts to obtain any required consent to the collateral assignment of any
Material Contract, in form and substance reasonably satisfactory to the
Administrative Agent, upon the request of the Administrative Agent, and will
deliver copies thereof to the Administrative Agent promptly upon execution and
delivery thereof. The Pledgor will notify the Administrative Agent promptly in
writing upon any termination of any Material Contract, in whole or in part, or
any material breach, default or event of default by any party thereunder.
4.8 Taxes. The Pledgor will pay and discharge (i) all taxes, assessments
-----
and governmental charges or levies imposed upon it, upon its income or profits
or upon any of its properties, prior to the date on which penalties would attach
thereto, and (ii) all lawful claims that, if unpaid, might become a Lien upon
any of its properties; provided, however, that the Pledgor shall not be required
-------- -------
to pay any such tax, assessment, charge, levy or claim that is being contested
in good faith and by proper proceedings and as to which the Pledgor has
maintained adequate reserves with respect thereto in accordance with Generally
Accepted Accounting Principles, unless and until any tax lien notice has become
effective with respect thereto or until any Lien resulting therefrom attaches to
its properties and becomes enforceable against its other creditors.
4.9 Insurance. (a) The Pledgor will, and will cause each of its
---------
Subsidiaries to, maintain and pay for, or cause to be maintained and paid for,
insurance covering commercial general liability, property and casualty, business
interruption and such other risks, and in such amounts and with such financially
sound and reputable insurance companies, as are usually and customarily carried
by companies of similar size engaged in similar businesses (and in any event,
insuring all Inventory and Equipment against such losses and risks), and will,
and will cause each of its Subsidiaries to, deliver certificates of such
insurance to the Administrative Agent with standard loss payable endorsements
naming the Administrative Agent as loss payee (on property and casualty
policies) and additional insured
-12-
(on liability policies) as its interests may appear. Each such policy of
insurance shall contain a clause requiring the insurer to give not less than
thirty (30) days' prior written notice to the Administrative Agent before any
cancellation of the policies for any reason whatsoever and shall provide that
any loss shall be payable in accordance with the terms thereof notwithstanding
any act of the Pledgor or any Subsidiary that might result in the forfeiture of
such insurance.
(b) The Pledgor will, and will cause each of its Subsidiaries to, direct
all insurers under policies of property and casualty insurance on the Collateral
to pay all proceeds payable thereunder in excess of $1,000,000 for each loss
directly to the Administrative Agent. The Administrative Agent shall hold all
such proceeds for the account of the Pledgor. So long as no Event of Default
has occurred and is continuing, and subject to SECTION 2.6(d) of the Credit
Agreement, the Administrative Agent shall, at the Pledgor's request, disburse
such proceeds as payment for the purpose of replacing or repairing destroyed or
damaged assets, as and when required to be paid and upon presentation of
evidence satisfactory to the Administrative Agent of such required payments and
such other documents as the Administrative Agent may reasonably request. As and
to the extent required by SECTION 2.6(d) of the Credit Agreement, and in any
event upon and during the continuance of an Event of Default, the Administrative
Agent shall be entitled to receive all proceeds of property and casualty
insurance directly from the insurers and shall apply such proceeds as a
prepayment of the Loans in the order and manner provided in the Credit
Agreement. The Pledgor hereby irrevocably makes, constitutes and appoints the
Administrative Agent at all times during the continuance of an Event of Default,
its true and lawful attorney (and agent-in-fact) for the purpose of making,
settling and adjusting claims under such policies of insurance, endorsing its
name on any check, draft, instrument or other item or payment for the proceeds
of such policies of insurance and for making all determinations and decisions
with respect to such policies of insurance.
(c) If the Pledgor fails to, or to cause any of its Subsidiaries to,
obtain and maintain any of the policies of insurance required to be maintained
hereunder or to pay any premium in whole or in part, the Administrative Agent
may, without waiving or releasing any obligation or Default, at the Pledgor'
expense, but without any obligation to do so, procure such policies or pay such
premiums. All sums so disbursed by the Administrative Agent, including
reasonable attorneys' fees, court costs, expenses and other charges related
thereto, shall be payable by the Pledgor to the Administrative Agent on demand
and shall be additional Obligations hereunder, secured by the Collateral.
(d) The Pledgor will, and will cause each of its Subsidiaries to, deliver
to the Administrative Agent, promptly as rendered, true copies of all material
claims and reports made in any reporting forms to insurance companies. Not less
than 30 days prior to the expiration date of the insurance policies required to
be maintained by the Pledgor and its Subsidiaries hereunder, the Pledgor will,
and will cause each of its Subsidiaries to, deliver to the Administrative Agent
one or more certificates of insurance evidencing renewal of the insurance
coverage required hereunder plus such other evidence of payment of premiums
therefor as the Administrative Agent may request. Upon the reasonable request
of the Administrative Agent from time to time, the Pledgor will, and will cause
each of its Subsidiaries to, deliver to the Administrative Agent evidence that
the insurance required to be maintained pursuant to this Section is in effect.
4.10 Intellectual Property. (a) The Pledgor will, at its own expense,
---------------------
execute, deliver and record, as promptly as possible (but in any event within 10
days) after the date hereof fully completed collateral assignments in the forms
of Exhibits B and C, as applicable, in the U.S. Copyright Office or the U.S.
---------- -
Patent and Trademark Office pursuant to 35 U.S.C. (S)261, 15 U.S.C. (S)1060 or
17 U.S.C.
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(S)205, as applicable, with regard to any Copyright Collateral, Patent
Collateral or Trademark Collateral, as the case may be, described in Annex E, F
------- -
or G hereto. In the event that after the date hereof the Pledgor shall acquire
-
any registered Copyright, Patent or Trademark, or effect any registration of any
Copyright, Patent or Trademark or file any application for registration thereof,
whether within the United States or any other country or jurisdiction, the
Pledgor shall promptly furnish written notice thereof to the Administrative
Agent together with information sufficient to permit the Administrative Agent,
upon its receipt of such notice, to (and the Pledgor hereby authorizes the
Administrative Agent to) modify this Agreement, as appropriate, by amending
Annexes E, F and G hereto or to add additional exhibits hereto to include any
--------- - -
Copyright, Patent or Trademark that becomes part of the Collateral under this
Agreement, and the Pledgor shall additionally, at its own expense, execute,
deliver and record, as promptly as possible (but in any event within 10 days)
after the date of such acquisition, registration or application, as applicable,
with regard to United States Patents, Trademarks and Copyrights, fully completed
collateral assignments in the forms of Exhibits B and C, as applicable, in the
---------- -
U.S. Copyright Office or the U.S. Patent and Trademark Office as more fully
described hereinabove (provided that, notwithstanding the foregoing, the Pledgor
--------
may at its election furnish such notices and execute, deliver and record such
documents and instruments on a quarterly basis with respect to all Copyrights,
Patents and Trademarks that become part of the Collateral during such quarter),
together in all instances with any other agreements, instruments and documents
that the Administrative Agent may reasonably request from time to time to
further effect and confirm the collateral assignment and security interest
created by this Agreement in such Copyrights, Patents and Trademarks, and the
Pledgor hereby appoints the Administrative Agent its attorney-in-fact to
execute, deliver and record any and all such agreements, instruments and
documents for the foregoing purposes, all acts of such attorney being hereby
ratified and confirmed and such power, being coupled with an interest, shall be
irrevocable for so long as this Agreement shall be in effect with respect to the
Pledgor (except that compliance with this subsection shall not be required with
respect to any Copyright, Patent or Trademark that the Pledgor has elected to
abandon).
(b) The Pledgor (either itself or through its licensees or its
sublicensees) will, for each material Trademark used in the conduct of its
business, use its best efforts to (i) maintain such Trademark in full force and
effect, free from any claim of abandonment or invalidity for non-use, (ii)
maintain the quality of products and services offered under such Trademark,
(iii) display such Trademark with notice of federal registration to the extent
required by applicable law and (iv) not knowingly use or knowingly permit the
use of such Trademark in violation of any third-party rights.
(c) The Pledgor (either itself or through its licensees or sublicensees)
will refrain from committing any act, or omitting any act, whereby any material
Patent used in the conduct of the Pledgor's business may become invalidated or
dedicated to the public, and shall continue to ▇▇▇▇ any products covered by a
material Patent with the relevant patent number as required by applicable patent
laws.
(d) The Pledgor (either itself or through its licensees or sublicensees)
will, for each work covered by a material Copyright, continue to publish,
reproduce, display, adopt and distribute the work with appropriate copyright
notice as required under applicable copyright laws.
(e) The Pledgor shall notify the Administrative Agent immediately if it
knows or has reason to know that any material Patent, Trademark or Copyright
used in the conduct of its business may become abandoned or dedicated to the
public, or of any adverse determination or development (including the
institution of, or any such determination or development in, any proceeding in
the U.S.
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Patent and Trademark Office, U.S. Copyright Office or any court) regarding the
Pledgor's ownership of any material Patent, Trademark or Copyright, its right to
register the same, or to keep and maintain the same.
(f) The Pledgor will take all necessary steps that are consistent with the
practice in any proceeding before the U.S. Patent and Trademark Office, U.S.
Copyright Office or any office or agency in any political subdivision of the
United States or in any other country or any political subdivision thereof, to
maintain and pursue each application relating to any material Patents,
Trademarks or Copyrights (and to obtain the relevant grant or registration) and
to maintain each registration of any material Patents, Trademarks and Copyrights
used in the conduct of the Pledgor's business, including the filing of
applications for renewal, affidavits of use, affidavits of incontestability and
maintenance fees, and, if consistent with sound business judgment, to initiate
opposition, interference and cancellation proceedings against third parties.
(g) In the event that any Collateral consisting of a material Patent,
Trademark or Copyright used in the conduct of the Pledgor's business is believed
infringed, misappropriated or diluted by a third party, the Pledgor shall notify
the Administrative Agent promptly after it learns thereof and shall, if
consistent with sound business judgment, promptly ▇▇▇ for infringement,
misappropriation or dilution and to recover any and all damages for such
infringement, misappropriation or dilution, and take such other actions as are
appropriate under the circumstances to protect such Collateral.
(h) Upon the occurrence and during the continuance of any Event of
Default, the Pledgor shall use its reasonable best efforts to obtain all
requisite consents or approvals from the licensor of each material License
included within the Copyright Collateral, Patent Collateral or Trademark
Collateral to effect the assignment of all of the Pledgor's right, title and
interest thereunder to the Administrative Agent or its designee.
4.11 Mobile Goods. Upon the request of the Administrative Agent at any
------------
time (and promptly upon the occurrence of any Event of Default), the Pledgor
will deliver to the Administrative Agent originals of the certificates of title
or ownership for all Mobile Goods owned by it, together (in the case of motor
vehicles) with the manufacturer's statement of origin with the Administrative
Agent listed as lienholder and odometer statements and together in all other
cases with appropriate instruments or certificates of transfer and delivery,
duly completed and executed, and will take such other action as the
Administrative Agent may deem necessary to perfect the security interest created
by this Agreement in all such Mobile Goods.
4.12 Delivery of Collateral. All certificates or instruments representing
----------------------
or evidencing any Accounts, Intercompany Obligations or other Collateral (other
than checks or drafts, except during the continuance of an Event of Default)
shall be delivered to and held by or on behalf of the Administrative Agent
pursuant hereto, shall be in form suitable for transfer by delivery and shall be
delivered together with undated stock powers duly executed in blank, appropriate
endorsements or other necessary instruments of registration, transfer or
assignment, duly executed and in form and substance satisfactory to the
Administrative Agent, and in each case such other instruments or documents as
the Administrative Agent may reasonably request.
4.13 Protection of Security Interest. The Pledgor agrees that it will, at
-------------------------------
its own cost and expense, take any and all actions necessary to warrant and
defend the right, title and interest of the Secured Parties in and to the
Collateral against the claims and demands of all other Persons.
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ARTICLE V
CERTAIN PROVISIONS RELATING TO INVESTMENTS
5.1 Ownership; After-Acquired Investments. (a) If the Pledgor shall, at
-------------------------------------
any time and from time to time after the date hereof, acquire any additional
capital stock or other equity interests in any Person of the types described in
the definition of the terms "Stock" or "Interests," the same shall be
automatically deemed to be Stock or Interests, as the case may be, and to be
pledged to the Administrative Agent pursuant to SECTION 2.1 (but subject, in the
case of Foreign Subsidiaries, to the provisions of SECTION 6.9 of the Credit
Agreement), and the Pledgor will forthwith pledge and deposit the same with the
Administrative Agent and deliver to the Administrative Agent any certificates or
instruments therefor, together with the endorsement of the Pledgor (in the case
of any promissory notes or other instruments), undated stock powers (in the case
of Stock evidenced by certificates) or other necessary instruments of transfer
or assignment, duly executed in blank and in form and substance satisfactory to
the Administrative Agent, together with such other certificates and instruments
as the Administrative Agent may reasonably request (including Uniform Commercial
Code financing statements or appropriate amendments thereto), and will promptly
thereafter deliver to the Administrative Agent a fully completed and duly
executed amendment to this Agreement in the form of Exhibit A (each, a "Pledge
---------
Amendment") in respect thereof. The Pledgor hereby authorizes the
Administrative Agent to attach each Pledge Amendment to this Agreement, and
agrees that all such Collateral listed on any Pledge Amendment shall for all
purposes be deemed Collateral hereunder and shall be subject to the provisions
hereof; provided that the failure of the Pledgor to execute and deliver any
--------
Pledge Amendment with respect to any such additional Collateral as required
hereinabove shall not impair the security interest of the Administrative Agent
in such Collateral or otherwise adversely affect the rights and remedies of the
Administrative Agent hereunder with respect thereto.
(b) If any Investments (whether now owned or hereafter acquired) included
in the Collateral are "uncertificated securities" within the meaning of the
applicable Uniform Commercial Code or are otherwise not evidenced by any
certificate or instrument, the Pledgor will promptly notify the Administrative
Agent thereof and will promptly take and cause to be taken all actions required
under applicable law, including, as applicable, under Article 8 or 9 of the
applicable Uniform Commercial Code, to perfect the security interest of the
Administrative Agent therein.
5.2 Voting Rights. So long as no Event of Default shall have occurred and
-------------
be continuing, the Pledgor shall be entitled to exercise all voting and other
consensual rights pertaining to the Investments (subject to its obligations
under SECTION 5.1), and for that purpose the Administrative Agent will execute
and deliver or cause to be executed and delivered to the Pledgor all such
proxies and other instruments as the Pledgor may reasonably request in writing
to enable the Pledgor to exercise such voting and other consensual rights;
provided, however, that the Pledgor will not cast any vote, give any consent,
-------- -------
waiver or ratification, or take or fail to take any action, in any manner that
would, or could reasonably be expected to, violate or be inconsistent with any
of the terms of this Agreement, the Credit Agreement or any other Credit
Document, or have the effect of impairing in any material respect the position
or interests of the Administrative Agent or any other Secured Party.
5.3 Dividends and Other Distributions. So long as no Event of Default
---------------------------------
shall have occurred and be continuing (or would occur as a result thereof), and
except as provided otherwise herein, all interest, income, dividends,
distributions and other amounts payable in cash in respect of the Investments
-16-
may be paid to and retained by the Pledgor; provided, however, that all such
-------- -------
interest, dividends, distributions and other amounts shall, at all times after
the occurrence and during the continuance of an Event of Default, be paid to the
Administrative Agent and retained by it as part of the Collateral (except to the
extent applied upon receipt to the repayment of the Obligations). The
Administrative Agent shall also be entitled at all times (whether or not during
the continuance of an Event of Default) to receive directly, and to retain as
part of the Collateral, (i) all interest, income, dividends, distributions or
other amounts paid or payable in cash or other property in respect of any
Investments included in the Collateral in connection with the dissolution,
liquidation, recapitalization or reclassification of the capital of the
applicable issuer to the extent representing (in the reasonable judgment of the
Administrative Agent) an extraordinary, liquidating or other distribution in
return of capital, (ii) all additional membership interests, warrants, options
or other securities or property (other than cash) paid or payable or distributed
or distributable in respect of any Investments included in the Collateral in
connection with any noncash dividend, distribution, return of capital, spin-off,
stock split, split-up, reclassification, combination of shares or interests or
similar rearrangement, and (iii) without affecting any restrictions against such
actions contained in the Credit Agreement, all additional membership interests,
warrants, options or other securities or property (including cash) paid or
payable or distributed or distributable in respect of any Investments included
in the Collateral in connection with any consolidation, merger, exchange of
securities, liquidation or other reorganization. All interest, income,
dividends, distributions or other amounts that are received by the Pledgor in
violation of the provisions of this Section shall be received in trust for the
benefit of the Administrative Agent, shall be segregated from other property or
funds of the Pledgor and shall be forthwith delivered to the Administrative
Agent as Collateral in the same form as so received (with any necessary
endorsements).
ARTICLE VI
REMEDIES
6.1 Remedies. If an Event of Default shall have occurred and be
--------
continuing, the Administrative Agent shall be entitled to exercise in respect of
the Collateral all of its rights, powers and remedies provided for herein or
otherwise available to it under any other Credit Document, by law, in equity or
otherwise, including all rights and remedies of a secured party under the
Uniform Commercial Code as in effect in each relevant jurisdiction, and shall be
entitled in particular, but without limitation of the foregoing, to exercise the
following rights, which the Pledgor agrees to be commercially reasonable:
(a) To notify any or all account debtors or obligors under any Accounts,
Contracts or other Collateral of the security interest in favor of the
Administrative Agent created hereby and to direct all such Persons to make
payments of all amounts due thereon or thereunder directly to the Administrative
Agent or to an account designated by the Administrative Agent; and in such
instance and from and after such notice, all amounts and Proceeds (including
wire transfers, checks and other instruments) received by the Pledgor in respect
of any Accounts or other Collateral shall be received in trust for the benefit
of the Administrative Agent hereunder, shall be segregated from the other funds
of the Pledgor and shall be forthwith deposited into such account or paid over
or delivered to the Administrative Agent in the same form as so received (with
any necessary endorsements or assignments), to be held as Collateral and applied
to the Obligations as provided herein; and by this provision, the Pledgor
irrevocably authorizes and directs each Person who is or shall be a party to or
liable for the performance of any Contract, upon receipt of notice from the
Administrative Agent to the effect that an Event of Default has occurred and is
-17-
continuing, to attorn to or otherwise recognize the Administrative Agent as
owner under such Contract and to pay, observe and otherwise perform the
obligations under such Contract to or for the Administrative Agent or the
Administrative Agent's designee as though the Administrative Agent or such
designee were the Pledgor named therein, and to do so until otherwise notified
by the Administrative Agent;
(b) To take possession of, receive, endorse, assign and deliver, in its
own name or in the name of the Pledgor, all checks, notes, drafts and other
instruments relating to any Collateral, including receiving, opening and
properly disposing of all mail addressed to the Pledgor concerning Accounts and
other Collateral; to verify with account debtors or other contract parties the
validity, amount or any other matter relating to any Accounts or other
Collateral, in its own name or in the name of the Pledgor; to accelerate any
indebtedness or other obligation constituting Collateral that may be accelerated
in accordance with its terms; to take or bring all actions and suits deemed
necessary or appropriate to effect collections and to enforce payment of any
Accounts or other Collateral; to settle, compromise or release in whole or in
part any amounts owing on Accounts or other Collateral; and to extend the time
of payment of any and all Accounts or other amounts owing under any Collateral
and to make allowances and adjustments with respect thereto, all in the same
manner and to the same extent as the Pledgor might have done;
(c) To notify any or all depository institutions with which any Deposit
Accounts are maintained to remit and transfer all monies, securities and other
property on deposit in such Deposit Accounts or deposited or received for
deposit thereafter to the Administrative Agent, for deposit in a Collateral
Account or such other accounts as may be designated by the Administrative Agent,
for application to the Obligations as provided herein;
(d) To transfer to or register in its name or the name of any of its
agents or nominees all or any part of the Collateral, without notice to the
Pledgor and with or without disclosing that such Collateral is subject to the
security interest created hereunder;
(e) To assign any Copyright Collateral, Patent Collateral or Trademark
Collateral, for such term or terms, on such conditions and in such manner as the
Administrative Agent shall determine; and to license and (to the extent
permitted by applicable law) sublicense, whether general, special or otherwise,
and whether on an exclusive or nonexclusive basis, any Copyright Collateral,
Patent Collateral or Trademark Collateral, throughout the world, for such term
or terms, on such conditions and in such manner as the Administrative Agent
shall determine;
(f) To require the Pledgor to, and the Pledgor hereby agrees that it will
at its expense and upon request of the Administrative Agent forthwith, assemble
all or any part of the Collateral as directed by the Administrative Agent and
make it available to the Administrative Agent at a place designated by the
Administrative Agent;
(g) To enter and remain upon the premises of any of the Pledgor and take
possession of all or any part of the Collateral, with or without judicial
process; to use the materials, services, books and records of the Pledgor for
the purpose of liquidating or collecting the Collateral, whether by foreclosure,
auction or otherwise; and to remove the same to the premises of the
Administrative Agent or any designated agent for such time as the Administrative
Agent may desire, in order to effectively collect or liquidate the Collateral;
-18-
(h) To exercise (i) all voting, consensual and other rights and powers
pertaining to the Investments (whether or not transferred into the name of the
Administrative Agent), at any meeting of shareholders, partners, members or
otherwise, and (ii) any and all rights of conversion, exchange, subscription and
any other rights, privileges or options pertaining to the Investments as if it
were the absolute owner thereof (including, without limitation, the right to
exchange at its discretion any and all of the Investments upon the merger,
consolidation, reorganization, reclassification, combination of shares or
interests, similar rearrangement or other similar fundamental change in the
structure of the applicable issuer, or upon the exercise by the Pledgor or the
Administrative Agent of any right, privilege or option pertaining to such
Investments, and in connection therewith, the right to deposit and deliver any
and all of the Investments with any committee, depositary, transfer agent,
registrar or other designated agency upon such terms and conditions as the
Administrative Agent may determine, and give all consents, waivers and
ratifications in respect of the Investments, all without liability except to
account for any property actually received by it, but the Administrative Agent
shall have no duty to exercise any such right, privilege or option or give any
such consent, waiver or ratification and shall not be responsible for any
failure to do so or delay in so doing; and for the foregoing purposes the
Pledgor will promptly execute and deliver or cause to be executed and delivered
to the Administrative Agent, upon request, all such proxies and other
instruments as the Administrative Agent may reasonably request to enable the
Administrative Agent to exercise such rights and powers; AND IN FURTHERANCE OF
THE FOREGOING AND WITHOUT LIMITATION THEREOF, THE PLEDGOR HEREBY IRREVOCABLY
CONSTITUTES AND APPOINTS THE ADMINISTRATIVE AGENT AS THE TRUE AND LAWFUL PROXY
AND ATTORNEY-IN-FACT OF THE PLEDGOR, WITH FULL POWER OF SUBSTITUTION IN THE
PREMISES, TO EXERCISE ALL SUCH VOTING, CONSENSUAL AND OTHER RIGHTS AND POWERS TO
WHICH ANY HOLDER OF ANY INVESTMENTS WOULD BE ENTITLED BY VIRTUE OF HOLDING THE
SAME, WHICH PROXY AND POWER OF ATTORNEY, BEING COUPLED WITH AN INTEREST, IS
IRREVOCABLE AND SHALL BE EFFECTIVE FOR SO LONG AS THIS AGREEMENT SHALL BE IN
EFFECT; and
(i) To sell, resell, assign and deliver, in its sole discretion, all or
any of the Collateral, in one or more parcels, on any securities exchange on
which any Investments may be listed, at public or private sale, at any of the
Administrative Agent's offices or elsewhere, for cash, upon credit or for future
delivery, at such time or times and at such price or prices and upon such other
terms as the Administrative Agent may deem satisfactory. If any of the
Collateral is sold by the Administrative Agent upon credit or for future
delivery, the Administrative Agent shall not be liable for the failure of the
purchaser to purchase or pay for the same and, in the event of any such failure,
the Administrative Agent may resell such Collateral. In no event shall the
Pledgor be credited with any part of the Proceeds of sale of any Collateral
until and to the extent cash payment in respect thereof has actually been
received by the Administrative Agent. Each purchaser at any such sale shall
hold the property sold absolutely, free from any claim or right of whatsoever
kind, including any equity or right of redemption of the Pledgor, and the
Pledgor hereby expressly waives all rights of redemption, stay or appraisal, and
all rights to require the Administrative Agent to marshal any assets in favor of
the Pledgor or any other party or against or in payment of any or all of the
Obligations, that it has or may have under any rule of law or statute now
existing or hereafter adopted. No demand, presentment, protest, advertisement
or notice of any kind (except any notice required by law, as referred to below),
all of which are hereby expressly waived by the Pledgor, shall be required in
connection with any sale or other disposition of any part of the Collateral. If
any notice of a proposed sale or other disposition of any part of the Collateral
shall be required under applicable law, the Administrative Agent shall give the
Pledgor at least ten (10) days' prior notice of the time and place of any public
sale and of the time after which any private sale or other disposition is to be
made, which notice the Pledgor agrees is commercially
-19-
reasonable. The Administrative Agent shall not be obligated to make any sale of
Collateral if it shall determine not to do so, regardless of the fact that
notice of sale may have been given. The Administrative Agent may, without notice
or publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for
sale, and such sale may, without further notice, be made at the time and place
to which the same was so adjourned. Upon each public sale and, to the extent
permitted by applicable law, upon each private sale, the Administrative Agent
may purchase all or any of the Collateral being sold, free from any equity,
right of redemption or other claim or demand, and may make payment therefor by
endorsement and application (without recourse) of the Obligations in lieu of
cash as a credit on account of the purchase price for such Collateral.
6.2 Application of Proceeds. (a) All Proceeds collected by the
-----------------------
Administrative Agent upon any sale, other disposition of or realization upon any
of the Collateral, together with all other moneys received by the Administrative
Agent hereunder, shall be applied as follows:
(i) first, to the payment of all costs and expenses of such
sale, disposition or other realization, including the reasonable costs and
expenses of the Administrative Agent and the reasonable fees and expenses
of its agents and counsel, all amounts advanced by the Administrative Agent
for the account of the Pledgor, and all other amounts payable to the
Administrative Agent under SECTION 8.1;
(ii) second, after payment in full of the amounts specified in
clause (i) above, to the ratable payment of all other Obligations owing to
the Secured Parties; and
(iii) third, after payment in full of the amounts specified in
clauses (i) and (ii) above, and following the termination of this
Agreement, to the Pledgor or any other Person lawfully entitled to receive
such surplus.
(b) For purposes of applying amounts in accordance with this Section, the
Administrative Agent shall be entitled to rely upon any Secured Party that has
entered into an Interest Rate Protection Agreement with the Pledgor for a
determination (which such Secured Party agrees to provide or cause to be
provided upon request of the Administrative Agent) of the outstanding
Obligations owed to such Secured Party under any such Interest Rate Protection
Agreement. Unless it has actual knowledge (including by way of written notice
from any such Secured Party) to the contrary, the Administrative Agent, in
acting hereunder, shall be entitled to assume that no Interest Rate Protection
Agreements or Obligations in respect thereof are in existence between any
Secured Party and the Pledgor.
(c) The Pledgor shall remain liable to the extent of any deficiency
between the amount of all Proceeds realized upon sale or other disposition of
the Collateral pursuant to this Agreement and the aggregate amount of the sums
referred to in clauses (i) and (ii) of subsection (a) above. Upon any sale of
any Collateral hereunder by the Administrative Agent (whether by virtue of the
power of sale herein granted, pursuant to judicial proceeding, or otherwise),
the receipt of the Administrative Agent or the officer making the sale shall be
a sufficient discharge to the purchaser or purchasers of the Collateral so sold,
and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Administrative
Agent or such officer or be answerable in any way for the misapplication
thereof.
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6.3 Collateral Accounts. Upon the occurrence and during the continuance
-------------------
of an Event of Default, the Administrative Agent shall have the right to cause
to be established and maintained, at its principal office or such other location
or locations as it may establish from time to time in its discretion, one or
more cash collateral bank accounts (collectively, "Collateral Accounts") for the
collection of Proceeds of the Collateral. Such Proceeds, when deposited, shall
continue to constitute Collateral for the Obligations and shall not constitute
payment thereof until applied as herein provided. The Administrative Agent
shall have sole dominion and control over all funds deposited in any Collateral
Account, and such funds may be withdrawn therefrom only by the Administrative
Agent. Upon the occurrence and during the continuance of an Event of Default,
the Administrative Agent shall have the right to (and, if directed by the
Required Lenders pursuant to the Credit Agreement, shall) apply amounts held in
the Collateral Accounts in payment of the Obligations in the manner provided for
in SECTION 6.2.
6.4 Grant of License. For the purpose of enabling the Administrative
----------------
Agent to exercise rights and remedies under SECTION 6.1 at such time as the
Administrative Agent shall be lawfully entitled to exercise such rights and
remedies, the Pledgor hereby grants to the Administrative Agent an irrevocable,
non-exclusive license (exercisable without payment of royalty or other
compensation to the Pledgor) to use, license or sublicense any Patent
Collateral, Trademark Collateral or Copyright Collateral now owned or licensed
or hereafter acquired or licensed by the Pledgor, and wherever the same may be
located, and including in such license reasonable access to all media in which
any of the licensed items may be recorded or stored and to all computer software
and programs used for the compilation or printout thereof. The use of such
license or sublicense by the Administrative Agent shall be exercised, at the
option of the Administrative Agent, only upon the occurrence and during the
continuation of an Event of Default; provided that any license, sublicense or
--------
other transaction entered into by the Administrative Agent in accordance
herewith shall be binding upon the Pledgor notwithstanding any subsequent cure
of an Event of Default.
6.5 Registration; Private Sales. (a) If, at any time after the
---------------------------
occurrence and during the continuance of an Event of Default, the Pledgor shall
have received from the Administrative Agent a written request or requests that
the Pledgor cause any registration, qualification or compliance under any
federal or state securities law or laws to be effected with respect to all or
any part of the Investments, the Pledgor will, as soon as practicable and at its
expense, use its best efforts to cause such registration to be effected and be
kept effective and will use its best efforts to cause such qualification and
compliance to be effected and be kept effective as may be so requested and as
would permit or facilitate the sale and distribution of such Investments,
including, without limitation, registration under the Securities Act of 1933, as
amended (the "Securities Act"), appropriate qualifications under applicable blue
sky or other state securities laws and appropriate compliance with any other
applicable requirements of Governmental Authorities; provided, that the
--------
Administrative Agent shall furnish to the Pledgor such information regarding the
Administrative Agent as the Pledgor may reasonably request in writing and as
shall be required in connection with any such registration, qualification or
compliance. The Pledgor will cause the Administrative Agent to be kept
reasonably advised in writing as to the progress of each such registration,
qualification or compliance and as to the completion thereof, will furnish to
the Administrative Agent such number of prospectuses, offering circulars or
other documents incident thereto as the Administrative Agent from time to time
may reasonably request, and will indemnify the Administrative Agent and all
others participating in the distribution of such Pledged Securities against all
claims, losses, damages and liabilities caused by any untrue statement (or
alleged untrue statement) of a material fact contained therein (or in any
related registration statement, notification or the like) or by any omission (or
alleged omission) to state therein (or in any related registration statement,
notification or
-21-
the like) a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as the same may have been
caused by an untrue statement or omission based upon information furnished in
writing to the Pledgor by the Administrative Agent or any other Secured Party
expressly for use therein.
(b) The Pledgor recognizes that, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws as in
effect from time to time, the Administrative Agent may be compelled, with
respect to any sale of all or any part of the Investments conducted without
registration or qualification under the Securities Act and such state securities
laws, to limit purchasers to any one or more Persons who will represent and
agree, among other things, to acquire such Investments for their own account,
for investment and not with a view to the distribution or resale thereof. The
Pledgor acknowledges that any such private sales may be made in such manner and
under such circumstances as the Administrative Agent may deem necessary or
advisable in its sole and absolute discretion, including at prices and on terms
less favorable than those obtainable through a public sale without such
restrictions (including, without limitation, a public offering made pursuant to
a registration statement under the Securities Act), and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner and agrees that the Administrative
Agent shall have no obligation to conduct any public sales and no obligation to
delay the sale of any Investments for the period of time necessary to permit its
registration for public sale under the Securities Act and applicable state
securities laws, and shall not have any responsibility or liability as a result
of its election so not to conduct any such public sales or delay the sale of any
Investments, notwithstanding the possibility that a substantially higher price
might be realized if the sale were deferred until after such registration. The
Pledgor hereby waives any claims against the Administrative Agent or any Secured
Party arising by reason of the fact that the price at which any Investments may
have been sold at any private sale was less than the price that might have been
obtained at a public sale or was less than the aggregate amount of the
Obligations, even if the Administrative Agent accepts the first offer received
and does not offer such Investments to more than one offeree.
(c) The Pledgor agrees that a breach of any of the covenants contained in
this Section will cause irreparable injury to the Administrative Agent and the
other Secured Parties, that the Administrative Agent and the other Secured
Parties have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this Section shall be
specifically enforceable against the Pledgor.
6.6 The Pledgor Remains Liable. Notwithstanding anything herein to the
--------------------------
contrary, (i) the Pledgor shall remain liable under all Contracts included
within the Collateral (including, without limitation, all Investment Agreements)
to perform all of its obligations thereunder to the same extent as if this
Agreement had not been executed, (ii) the exercise by the Administrative Agent
of any of its rights or remedies hereunder shall not release the Pledgor from
any of its obligations under any of such Contracts, and (iii) except as
specifically provided for hereinbelow, the Administrative Agent shall not have
any obligation or liability by reason of this Agreement under any of such
Contracts, nor shall the Administrative Agent be obligated to perform any of the
obligations or duties of the Pledgor thereunder or to take any action to collect
or enforce any claim for payment assigned hereunder. This Agreement shall not
in any way be deemed to obligate the Administrative Agent, any other Secured
Party or any purchaser at a foreclosure sale under this Agreement to assume any
of the Pledgor's obligations, duties or liabilities under any Investment
Agreement, including, without limitation, the Pledgor's obligations, if any, to
manage the business and affairs of the applicable partnership, joint venture,
limited liability company or other issuer (collectively, the "Partner
Obligations"), unless the Administrative Agent or
-22-
such other Secured Party or purchaser otherwise agrees in writing to assume any
or all of such Partner Obligations. In the event of foreclosure by the
Administrative Agent hereunder, then except as provided in the preceding
sentence, the Pledgor shall remain bound and obligated to perform its Partner
Obligations and neither the Administrative Agent nor any other Secured Party
shall be deemed to have assumed any Partner Obligations. In the event the
Administrative Agent, any other Secured Party or any purchaser at a foreclosure
sale elects to become a substitute member in place of the Pledgor, the party
making such election shall adopt in writing such Investment Agreement and agree
to be bound by the terms and provisions thereof; and subject to the execution of
such written agreement, the Pledgor hereby irrevocably consents in advance to
the admission of the Administrative Agent, any other Secured Party or any such
purchaser as a substitute member to the extent of the Investments acquired
pursuant to such sale, and agrees to execute any documents or instruments and
take any other action as may be necessary or as may be reasonably requested in
connection therewith. The powers, rights and remedies conferred on the
Administrative Agent hereunder are solely to protect its interest and privilege
in such Contracts, as Collateral, and shall not impose any duty upon it to
exercise any such powers, rights or remedies.
ARTICLE VII
THE ADMINISTRATIVE AGENT
7.1 The Administrative Agent; Standard of Care. The Administrative
------------------------------------------
Agent will hold all items of the Collateral at any time received under this
Agreement in accordance with the provisions hereof. The obligations of the
Administrative Agent as holder of the Collateral and interests therein and with
respect to the disposition thereof, and otherwise under this Agreement and the
other Credit Documents, are only those expressly set forth in this Agreement and
the other Credit Documents. The Administrative Agent shall act hereunder at the
direction, or with the consent, of the Required Lenders on the terms and
conditions set forth in the Credit Agreement. The powers conferred on the
Administrative Agent hereunder are solely to protect its interest, on behalf of
the Secured Parties, in the Collateral, and shall not impose any duty upon it to
exercise any such powers. Except for treatment of the Collateral in its
possession in a manner substantially equivalent to that which the Administrative
Agent, in its individual capacity, accords its own property of a similar nature,
and the accounting for moneys actually received by it hereunder, the
Administrative Agent shall have no duty as to any Collateral or as to the taking
of any necessary steps to preserve rights against prior parties or any other
rights pertaining to the Collateral. Neither the Administrative Agent nor any
other Secured Party shall be liable to the Pledgor (i) for any loss or damage
sustained by the Pledgor, or (ii) for any loss, damage, depreciation or other
diminution in the value of any of the Collateral that may occur as a result of
or in connection with or that is in any way related to any exercise by the
Administrative Agent or any other Secured Party of any right or remedy under
this Agreement, any failure to demand, collect or realize upon any of the
Collateral or any delay in doing so, or any other act or failure to act on the
part of the Administrative Agent or any other Secured Party, except to the
extent that the same is caused by its own gross negligence or willful
misconduct.
7.2 Further Assurances; Attorney-in-Fact. (a) The Pledgor agrees that
------------------------------------
it will join with the Administrative Agent to execute and, at its own expense,
file and refile under any applicable Uniform Commercial Code such financing
statements, continuation statements and other documents and instruments in such
offices as the Administrative Agent may reasonably deem necessary or
appropriate, and wherever required or permitted by law, in order to perfect and
preserve the Administrative Agent's security interest in the Collateral, and
hereby authorizes the Administrative Agent to file financing
-23-
statements and amendments thereto relating to all or any part of the Collateral
without the signature of the Pledgor where permitted by law, and agrees to do
such further acts and things (including, without limitation, making any notice
filings with state tax or revenue authorities required to be made by account
creditors in order to enforce any Accounts in such state) and to execute and
deliver to the Administrative Agent such additional conveyances, assignments,
agreements and instruments as the Administrative Agent may reasonably require or
deem advisable to perfect, establish, confirm and maintain the security interest
and Lien provided for herein, to carry out the purposes of this Agreement or to
further assure and confirm unto the Administrative Agent its rights, powers and
remedies hereunder.
(b) The Pledgor hereby irrevocably appoints the Administrative Agent its
lawful attorney-in-fact, with full authority in the place and stead of the
Pledgor and in the name of the Pledgor, the Administrative Agent or otherwise,
and with full power of substitution in the premises (which power of attorney,
being coupled with an interest, is irrevocable for so long as this Agreement
shall be in effect), from time to time in the Administrative Agent's discretion
after the occurrence and during the continuance of an Event of Default to take
any action and to execute any instruments that the Administrative Agent may deem
necessary or advisable to accomplish the purpose of this Agreement, including,
without limitation:
(i) to sign the name of the Pledgor on any financing statement,
continuation statement, notice or other similar document that, in the
Administrative Agent's opinion, should be made or filed in order to perfect
or continue perfected the security interest granted under this Agreement
(including, without limitation, any title or ownership applications for
filing with applicable state agencies to enable any motor vehicles now or
hereafter owned by the Company to be retitled and the Administrative Agent
listed as lienholder thereon);
(ii) to ask, demand, collect, ▇▇▇ for, recover, compound, receive
and give acquittance and receipts for moneys due and to become due under or
in respect of any of the Collateral;
(iii) to receive, endorse and collect any checks, drafts,
instruments, chattel paper and other orders for the payment of money made
payable to the Pledgor representing any interest, income, dividend,
distribution or other amount payable in respect of any of the Collateral
and to give full discharge for the same;
(iv) to obtain, maintain and adjust any property or casualty
insurance required to be maintained by the Pledgor under SECTION 4.9 and
direct the payment of proceeds thereof to the Administrative Agent;
(v) to pay or discharge taxes, Liens or other encumbrances
levied or placed on or threatened against the Collateral, the legality or
validity thereof and the amounts necessary to discharge the same to be
determined by the Administrative Agent in its sole discretion, any such
payments made by the Administrative Agent to become Obligations of the
Pledgor to the Administrative Agent, due and payable immediately and
without demand;
(vi) to file any claims or take any action or institute any
proceedings that the Administrative Agent may deem necessary or advisable
for the collection of any of the Collateral or otherwise to enforce the
rights of the Administrative Agent with respect to any of the Collateral;
and
-24-
(vii) to use, sell, assign, transfer, pledge, make any agreement
with respect to or otherwise deal with any and all of the Collateral as
fully and completely as though the Administrative Agent were the absolute
owner of the Collateral for all purposes, and to do from time to time, at
the Administrative Agent's option and the Pledgors' expense, all other acts
and things deemed necessary by the Administrative Agent to protect,
preserve or realize upon the Collateral and to more completely carry out
the purposes of this Agreement.
(c) If the Pledgor fails to perform any covenant or agreement contained in
this Agreement after written request to do so by the Administrative Agent
(provided that no such request shall be necessary at any time after the
--------
occurrence and during the continuance of an Event of Default), the
Administrative Agent may itself perform, or cause the performance of, such
covenant or agreement and may take any other action that it deems necessary and
appropriate for the maintenance and preservation of the Collateral or its
security interest therein, and the reasonable expenses so incurred in connection
therewith shall be payable by the Pledgor under SECTION 8.1.
ARTICLE VIII
MISCELLANEOUS
8.1 Indemnity and Expenses. The Pledgor agrees:
----------------------
(a) To indemnify and hold harmless the Administrative Agent, each other
Secured Party and each of their respective directors, officers, employees,
agents and affiliates from and against any and all claims, damages, demands,
losses, obligations, judgments and liabilities (including, without limitation,
reasonable attorneys' fees and expenses) in any way arising out of or in
connection with this Agreement and the transactions contemplated hereby, except
to the extent the same shall arise as a result of the gross negligence or
willful misconduct of the party seeking to be indemnified; and
(b) To pay and reimburse the Administrative Agent upon demand for all
reasonable costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses) that the Administrative Agent may incur in
connection with (i) the custody, use or preservation of, or the sale of,
collection from or other realization upon, any of the Collateral, including the
reasonable expenses of re-taking, holding, preparing for sale or lease, selling
or otherwise disposing of or realizing on the Collateral, (ii) the exercise or
enforcement of any rights or remedies granted hereunder (including, without
limitation, under ARTICLE VI), under any of the other Credit Documents or
otherwise available to it (whether at law, in equity or otherwise), or (iii) the
failure by the Pledgor to perform or observe any of the provisions hereof. The
provisions of this SECTION 8.1 shall survive the execution and delivery of this
Agreement, the repayment of any of the Obligations, the termination of the
Commitments under the Credit Agreement and the termination of this Agreement or
any other Credit Document.
8.2 No Waiver. The rights and remedies of the Secured Parties expressly
---------
set forth in this Agreement and the other Credit Documents are cumulative and in
addition to, and not exclusive of, all other rights and remedies available at
law, in equity or otherwise. No failure or delay on the part of any Secured
Party in exercising any right, power or privilege shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
privilege preclude any other or further exercise thereof or the exercise of any
other right, power or privilege or be construed to be a waiver of any Default or
Event of Default. No course of dealing between the Pledgor and the Secured
Parties or their
-25-
agents or employees shall be effective to amend, modify or discharge any
provision of this Agreement or any other Credit Document or to constitute a
waiver of any Default or Event of Default. No notice to or demand upon the
Pledgor in any case shall entitle the Pledgor to any other or further notice or
demand in similar or other circumstances or constitute a waiver of the right of
any Secured Party to exercise any right or remedy or take any other or further
action in any circumstances without notice or demand.
8.3 Enforcement. By its acceptance of the benefits of this Agreement,
-----------
each Lender agrees that this Agreement may be enforced only by the
Administrative Agent, acting upon the instructions or with the consent of the
Required Lenders as provided for in the Credit Agreement, and that no Lender
shall have any right individually to enforce or seek to enforce this Agreement
or to realize upon any Collateral or other security given to secure the payment
and performance of the Obligations.
8.4 Amendments, Waivers, etc. No amendment, modification, waiver,
------------------------
discharge or termination of, or consent to any departure by the Pledgor from,
any provision of this Agreement, shall be effective unless in a writing executed
and delivered in accordance with SECTION 11.6 of the Credit Agreement, and then
the same shall be effective only in the specific instance and for the specific
purpose for which given.
8.5 Continuing Security Interest; Term; Successors and Assigns;
-----------------------------------------------------------
Assignment; Termination and Release; Survival. This Agreement shall create a
---------------------------------------------
continuing security interest in the Collateral and shall secure the payment and
performance of all of the Obligations as the same may arise and be outstanding
at any time and from time to time from and after the date hereof, and shall (i)
remain in full force and effect until the occurrence of (x) the payment in full
of the Obligations (other than indemnity obligations not then due and payable
and that survive termination of the Credit Documents), (y) the termination or
expiration of all Letters of Credit under the Credit Agreement and (z) the
termination of the Commitments under the Credit Agreement (the events in clauses
(x), (y) and (z) above, collectively, the "Termination Requirements"), (ii) be
binding upon and enforceable against the Pledgor and its successors and assigns
(provided, however, that the Pledgor may not sell, assign or transfer any of its
-------- -------
rights, interests, duties or obligations hereunder without the prior written
consent of the Lenders) and (iii) inure to the benefit of and be enforceable by
each Secured Party and its successors and assigns. Upon any sale or other
disposition by the Pledgor of any Collateral in a transaction expressly
permitted hereunder or under or pursuant to the Credit Agreement or any other
applicable Credit Document, the Lien and security interest created by this
Agreement in and upon such Collateral shall be automatically released, and upon
the satisfaction of all of the Termination Requirements, this Agreement and the
Lien and security interest created hereby shall terminate; and in connection
with any such release or termination, the Administrative Agent, at the request
and expense of the Pledgor, will execute and deliver to the Pledgor such
documents and instruments evidencing such release or termination as the Pledgor
may reasonably request and will assign, transfer and deliver to the Pledgor,
without recourse and without representation or warranty, such of the Collateral
as may then be in the possession of the Administrative Agent (or, in the case of
any partial release of Collateral, such of the Collateral so being released as
may be in its possession). All representations, warranties, covenants and
agreements herein shall survive the execution and delivery of this Agreement and
any Pledge Amendment.
8.6 Notices. All notices and other communications provided for hereunder
-------
shall be given to the parties in the manner and subject to the other notice
provisions set forth in the Credit Agreement.
-26-
8.7 Governing Law. This Agreement shall be governed by and construed and
-------------
enforced in accordance with the laws of the State of North Carolina (without
regard to the conflicts of law provisions thereof).
8.8 Severability. To the extent any provision of this Agreement is
------------
prohibited by or invalid under the applicable law of any jurisdiction, such
provision shall be ineffective only to the extent of such prohibition or
invalidity and only in such jurisdiction, without prohibiting or invalidating
such provision in any other jurisdiction or the remaining provisions of this
Agreement in any jurisdiction.
8.9 Construction. The headings of the various sections and subsections
------------
of this Agreement have been inserted for convenience only and shall not in any
way affect the meaning or construction of any of the provisions hereof. Unless
the context otherwise requires, words in the singular include the plural and
words in the plural include the singular.
8.10 Counterparts. This Agreement may be executed in any number of
------------
counterparts and by different parties hereto on separate counterparts, each of
which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.
-27-
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
under seal by their duly authorized officers as of the date first above written.
▇▇▇▇▇▇▇▇ PUBLISHING COMPANY, L.L.C.
By: _______________________________
Title: ____________________________
Accepted and agreed to:
FIRST UNION NATIONAL BANK, as
Administrative Agent
By: _______________________________
Title: ____________________________
-28-
Annex A to Pledge and
Security Agreement
First Union National Bank, as
Administrative Agent
▇▇▇▇▇▇▇▇ Publishing Company, L.L.C.
____________, 1998
___________________________________
Pledged Investments
-------------------
Percentage of
Outstanding
Type of Certificate No. of shares Interests
Name of Issuer Interests Number (if applicable) in Issuer
-------------- --------- ------ --------------- ---------
Annex B to Pledge and
Security Agreement
First Union National Bank, as
Administrative Agent
▇▇▇▇▇▇▇▇ Publishing Company, L.L.C.
____________, 1998
___________________________________
FILING LOCATIONS
Annex C to Pledge and
Security Agreement
First Union National Bank, as
Administrative Agent
▇▇▇▇▇▇▇▇ Publishing Company, L.L.C.
____________, 1998
___________________________________
LOCATIONS OF CHIEF EXECUTIVE OFFICE, PLACES OF BUSINESS,
RECORDS RELATING TO COLLATERAL, AND EQUIPMENT AND INVENTORY
Annex D to Pledge and
Security Agreement
First Union National Bank, as
Administrative Agent
▇▇▇▇▇▇▇▇ Publishing Company, L.L.C.
____________, 1998
___________________________________
CERTAIN CONTRACTS
Annex E to Pledge and
Security Agreement
First Union National Bank, as
Administrative Agent
▇▇▇▇▇▇▇▇ Publishing Company, L.L.C.
____________, 1998
___________________________________
COPYRIGHTS AND COPYRIGHT APPLICATIONS
(see attachment hereto)
Annex F to Pledge and
Security Agreement
First Union National Bank, as
Administrative Agent
▇▇▇▇▇▇▇▇ Publishing Company, L.L.C.
____________, 1998
___________________________________
PATENTS AND PATENT APPLICATIONS
Application or Issue or
Registration No. Country Inventor Filing Date
---------------- ------- -------- -----------
Annex G to Pledge and
Security Agreement
First Union National Bank, as
Administrative Agent
▇▇▇▇▇▇▇▇ Publishing Company, L.L.C.
____________, 1998
___________________________________
TRADEMARKS AND TRADEMARK APPLICATIONS
(see attachment hereto)
Exhibit A to Pledge and
Security Agreement
First Union National Bank, as
Administrative Agent
▇▇▇▇▇▇▇▇ Publishing Company, L.L.C.
____________, 1998
___________________________________
PLEDGE AMENDMENT
THIS PLEDGE AMENDMENT, dated as of _______________, 19___, is delivered by
▇▇▇▇▇▇▇▇ PUBLISHING COMPANY, L.L.C. (the "Pledgor") pursuant to SECTION 5.1 of
the Pledge Agreement referred to hereinbelow. The Pledgor hereby agrees that
this Pledge Amendment may be attached to the Pledge and Security Agreement,
dated as of __________, 1998, made by the Pledgor in favor of First Union
National Bank, as Administrative Agent (as amended, modified, supplemented or
restated from time to time, the "Pledge Agreement," capitalized terms defined
therein being used herein as therein defined), and that the Investments listed
on Annex A to this Pledge Amendment shall be deemed to be part of the
-------
Investments within the meaning of the Pledge Agreement and shall become part of
the Collateral and shall secure all of the Obligations as provided in the Pledge
Agreement. This Pledge Amendment and its attachments are hereby incorporated
into the Pledge Agreement and made a part thereof.
▇▇▇▇▇▇▇▇ PUBLISHING COMPANY, L.L.C.
By: ______________________________
Title: ___________________________
Annex A to Exhibit A (Pledge
Amendment)
First Union National Bank, as
Administrative Agent
▇▇▇▇▇▇▇▇ Publishing Company, L.L.C.
____________, 1998
___________________________________
Pledged Investments
-------------------
Percentage of
Outstanding
Type of Certificate No. of shares Interests
Name of Issuer Interests Number (if applicable) in Issuer
-------------- --------- ------ --------------- ---------
Exhibit B to Pledge and
Security Agreement
First Union National Bank, as
Administrative Agent
▇▇▇▇▇▇▇▇ Publishing Company, L.L.C.
____________, 1998
___________________________________
COLLATERAL ASSIGNMENT AND GRANT OF SECURITY INTEREST
IN COPYRIGHTS
WHEREAS, ▇▇▇▇▇▇▇▇ PUBLISHING COMPANY, L.L.C. (the "Grantor") is the owner
of the copyrights listed on Schedule A attached hereto, which copyrights are
----------
registered or have pending registrations in the United States Copyright Office
as set forth on Schedule A attached hereto (all such copyrights, registrations
----------
and applications, collectively, the "Copyrights"); and
WHEREAS, the Grantor has entered into a Pledge and Security Agreement (as
amended, modified, restated or supplemented from time to time, the "Security
Agreement"), dated as of _____________, 1998, in which the Grantor has agreed
with First Union National Bank, as Administrative Agent (the "Administrative
Agent"), with offices at One First Union Center, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, to execute this Assignment;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, as security for the payment and
performance of the Obligations (as defined in the Security Agreement), the
Grantor does hereby collaterally assign and grant to the Administrative Agent a
security interest in all of its right, title and interest in and to the
Copyrights, and the use thereof, together with all proceeds and products thereof
and the goodwill of the businesses symbolized by the Copyrights. This
Assignment has been given in conjunction with the collateral assignment and
security interest granted to the Administrative Agent under the Security
Agreement, and the provisions of this Assignment are without prejudice to and in
addition to the provisions of the Security Agreement, which are incorporated
herein by this reference.
▇▇▇▇▇▇▇▇ PUBLISHING COMPANY, L.L.C.
By: ______________________________
Title: ___________________________
Schedule A
----------
COPYRIGHTS AND COPYRIGHT APPLICATIONS
Application or Issue or
Grantor Registration No. Country Filing Date
------- ---------------- ------- -----------
Exhibit C to Pledge and
Security Agreement
First Union National Bank, as
Administrative Agent
▇▇▇▇▇▇▇▇ Publishing Company, L.L.C.
____________, 1998
___________________________________
COLLATERAL ASSIGNMENT AND GRANT OF SECURITY INTEREST
IN PATENTS AND TRADEMARKS
WHEREAS, ▇▇▇▇▇▇▇▇ PUBLISHING COMPANY, L.L.C. (the "Grantor") is the owner
of the trademarks and service marks listed on Schedule A attached hereto, which
----------
marks are registered or have pending registrations in the United States Patent
and Trademark Office as set forth on Schedule A attached hereto (all such
----------
trademarks, service marks, registrations and applications, collectively, the
"Trademarks") and is the owner of the patents listed on Schedule A attached
----------
hereto, which patents are registered or have pending applications in the United
States Patent and Trademark Office as set forth on Schedule A attached hereto
----------
(all such patents, registrations and applications, collectively, the "Patents");
and
WHEREAS, the Grantor has entered into a Pledge and Security Agreement (as
amended, modified, restated or supplemented from time to time, the "Security
Agreement"), dated as of _____________, 1998, in which the Grantor has agreed
with First Union National Bank, as Administrative Agent (the "Administrative
Agent"), with offices at One First Union Center, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, to execute this Assignment;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, as security for the payment and
performance of the Obligations (as defined in the Security Agreement), the
Grantor does hereby collaterally assign and grant to the Administrative Agent a
security interest in all of its right, title and interest in and to the
Trademarks and the Patents, and the use thereof, together with all proceeds and
products thereof and the goodwill of the businesses symbolized by the Trademarks
and the Patents. This Assignment has been given in conjunction with the
collateral assignment and security interest granted to the Administrative Agent
under the Security Agreement, and the provisions of this Assignment are without
prejudice to and in addition to the provisions of the Security Agreement, which
are incorporated herein by this reference.
▇▇▇▇▇▇▇▇ PUBLISHING COMPANY, L.L.C.
By: ______________________________
Title: ___________________________
Schedule A
----------
TRADEMARKS AND TRADEMARK APPLICATIONS
Application or Issue or
Grantor ▇▇▇▇ Registration No. Country Filing Date
------- ---- ---------------- ------- -----------
PATENTS AND PATENT APPLICATIONS
Patent No. Date Issued Country Description
---------- ----------- ------- -----------
EXHIBIT H
---------
FORM OF
PARENT PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AND SECURITY AGREEMENT, dated as of the ____ day of _________,
1998 (this "Agreement"), is made by THE ▇▇▇▇▇▇▇▇ COMPANIES, INC., a Delaware
corporation (the "Pledgor"), in favor of FIRST UNION NATIONAL BANK, as
administrative agent for the banks and other financial institutions
(collectively, the "Lenders") party to the Credit Agreement referred to below
(in such capacity, the "Administrative Agent"), for the benefit of the Secured
Parties (as hereinafter defined). Capitalized terms used herein without
definition shall have the meanings given to them in the Credit Agreement
referred to below.
RECITALS
A. The Pledgor, ▇▇▇▇▇▇▇▇ Publishing Company, L.L.C., a Delaware limited
liability company (the "Borrower"), the Lenders, First Union National Bank, as
Administrative Agent, Canadian Imperial Bank of Commerce, as Syndication Agent,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc., as Documentation Agent, and the Managing
Agents named therein, are parties to a Credit Agreement, dated as of March 31,
1998 (as amended, modified or supplemented from time to time, the "Credit
Agreement"), providing for the availability of certain credit facilities to the
Borrower upon the terms and subject to the conditions set forth therein. The
Pledgor owns all of the membership interests in the Borrower.
B. As a condition to the extension of credit to the Borrower under the
Credit Agreement, the Pledgor has executed and delivered a Guaranty Agreement,
dated as of the date hereof (as amended, modified or supplemented from time to
time, the "Parent Guaranty"), pursuant to which the Pledgor has guaranteed to
the Secured Parties the payment in full of the Obligations of the Borrower under
the Credit Agreement and the other Credit Documents.
C. It is a further condition to the extension of credit to the Borrower
under the Credit Agreement that the Pledgor shall have agreed, by executing and
delivering this Agreement, to secure the payment in full of its obligations
under the Parent Guaranty. The Secured Parties are relying on this Agreement in
their decision to extend credit to the Borrower under the Credit Agreement, and
would not enter into the Credit Agreement without this Agreement.
D. The Pledgor will obtain benefits as a result of the extension of
credit to the Borrower under the Credit Agreement, which benefits are hereby
acknowledged, and, accordingly, desire to execute and deliver this Agreement.
STATEMENT OF AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, to induce the Secured
Parties to enter into the Credit Agreement and to induce the Lenders to extend
credit to the Borrower thereunder, the Pledgor hereby agrees as follows:
1. Pledge and Grant of Security Interest. The Pledgor hereby pledges,
-------------------------------------
assigns and delivers to the Administrative Agent, for the ratable benefit of the
Lenders (including the Issuing Lender and the Swingline Lender in their
capacities as such, and including any Lender in its capacity as a counterparty
to any Interest Rate Protection Agreement with the Borrower), the Documentation
Agent, the Syndication Agent and the Administrative Agent (collectively, the
"Secured Parties"), and grants to the Administrative Agent, for the ratable
benefit of the Secured Parties, a Lien upon and security interest in, all of the
Pledgor's right, title and interest in and to the following, in each case
whether now owned or existing or hereafter acquired or arising (collectively,
the "Collateral"):
(i) all of the issued and outstanding membership interests in the
Borrower owned by the Pledgor, and all rights, powers and privileges
relating thereto or arising therefrom, including, without limitation, the
Pledgor's right to vote and to manage and administer the business of the
Borrower pursuant to the Limited Liability Company Agreement, dated as of
September 30, 1996, among the Pledgor and the Borrower (as amended,
modified, supplemented, restated or replaced from time to time, the
"Operating Agreement"), together with all other rights, interests, claims
and other property of the Pledgor in any manner arising out of or relating
to its interest as a member of the Borrower, whether now existing or
hereafter arising or acquired, of whatever kind or character (including any
tangible or intangible property or interests therein), and further
including, without limitation (but subject to the provisions of SECTION 8),
all rights of the Pledgor to receive amounts due and to become due
(including, without limitation, dividends, distributions, interest, income
and returns of capital) under or in respect of the Operating Agreement, to
receive payments or other amounts upon termination of the Operating
Agreement, and to receive any other payments or distributions, whether in
cash, securities, property, or a combination thereof, in respect of the
Pledgor's interest as a member of the Borrower, all of the Pledgor's rights
of access to the Borrower's books and records, and all rights granted or
available under applicable law in connection therewith, and all additional
equity interests in the Borrower (including all warrants, options and other
rights to acquire, and all securities convertible into, equity interests in
the Borrower), whether now or hereafter existing and any time owned by the
Pledgor, together with all certificates, instruments and entries upon the
books of financial intermediaries at any time evidencing any of the
foregoing (collectively, the "Pledged Interests");
(ii) all indebtedness, obligations and other amounts at any time
owing to the Pledgor from the Borrower or from any holder of equity
interests in the Pledgor and all interest, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such indebtedness, obligations
or other amounts (collectively, "the Pledged Indebtedness"); and
(iii) all Proceeds of any of the foregoing. For purposes of this
Agreement, the term "Proceeds" shall mean and include all cash, securities
and other property of any nature received or receivable upon the sale,
exchange or other disposition of or realization upon any Collateral,
whether voluntary or involuntary, together with all other payments and
distributions in respect of any Collateral, including pursuant to any
insurance, indemnity or guaranty with respect to any Collateral and
pursuant to any liquidation, reorganization or similar proceeding with
respect to the Pledgor or any issuer of or obligor on any Collateral.
-2-
2. Security for Secured Obligations. This Agreement and the Collateral
--------------------------------
secure the full and prompt payment, at any time and from time to time as and
when due (whether at the stated maturity, by acceleration or otherwise), of all
liabilities and obligations of the Pledgor, whether now existing or hereinafter
incurred, under, arising out of or in connection with the Parent Guaranty, this
Agreement or any of the other Credit Documents to which it is a party,
including, without limitation, the Pledgor's liabilities and obligations as
guarantor in respect of all principal of and interest on the Loans, all
Reimbursement Obligations in respect of Letters of Credit, all fees, expenses,
indemnities and other amounts payable by the Borrower under the Credit Agreement
or any other Credit Document (including interest accruing after the filing of a
petition or commencement of a case by or with respect to the Borrower seeking
relief under any applicable federal and state laws pertaining to bankruptcy,
reorganization, arrangement, moratorium, readjustment of debts, dissolution,
liquidation or other debtor relief, specifically including, without limitation,
the Bankruptcy Code and any fraudulent transfer and fraudulent conveyance laws,
whether or not the claim for such interest is allowed in such proceeding), all
obligations of the Borrower to any Lender under any Interest Rate Protection
Agreement, all Obligations that, but for the operation of the automatic stay
under Section 362(a) of the Bankruptcy Code, would become due, and all fees,
costs and expenses payable by the Pledgor under SECTION 13, in each case whether
now existing or hereafter created or arising and whether direct or indirect,
absolute or contingent, due or to become due (the liabilities and obligations of
the Pledgor described in this SECTION 2, collectively, the "Secured
Obligations").
3. Delivery of Collateral. All certificates or instruments representing
----------------------
or evidencing any Collateral (other than checks or drafts, except during the
continuance of an Event of Default) shall be delivered to and held by or on
behalf of the Administrative Agent pursuant hereto, shall be in form suitable
for transfer by delivery and shall be delivered together with undated stock
powers duly executed in blank, appropriate endorsements or other necessary
instruments of registration, transfer or assignment, duly executed and in form
and substance satisfactory to the Administrative Agent, and in each case such
other instruments or documents as the Administrative Agent may reasonably
request.
4. Representations and Warranties. The Pledgor represents and warrants
------------------------------
as follows:
(a) As of the date hereof, the Pledged Interests being pledged by the
Pledgor hereunder consist of the percentage and type of equity membership
interests in the Borrower as described beneath the Pledgor's name in Annex A.
-------
The Pledged Interests described in Annex A collectively represent 100% of the
-------
issued and outstanding equity membership interests in the Borrower.
(b) The Pledgor is, or at the time when pledged hereunder will be, the
sole legal, record and beneficial owner of all Pledged Interests purported to be
pledged by it hereunder, free and clear of any Lien whatsoever other than the
security interest created by this Agreement. No security agreement, financing
statement or other public notice with respect to all or any part of the
Collateral is on file or of record in any government or public office, and the
Pledgor has not filed or consented to the filing of any such statement or
notice, except for Uniform Commercial Code financing statements naming the
Administrative Agent as secured party.
(c) This Agreement, together with (i) the filing, with regard to the
Pledgor, of duly completed and executed Uniform Commercial Code financing
statements naming the Pledgor as debtor, the Administrative Agent as secured
party, and describing the Collateral, in the jurisdictions set forth on Annex B
-------
hereto, (ii) in the case of uncertificated Pledged Interests, the acquisition by
the Administrative Agent, for the benefit of the Secured parties, of "control"
thereof within the meaning of such term under
-3-
Section 8-106(c) (or its successor provision) of the applicable Uniform
Commercial Code, and (iii) the delivery to the Administrative Agent of all
certificates, chattel paper, promissory notes and other instruments included in
the Collateral, creates, and at all times will constitute, a valid and perfected
security interest in and Lien upon the Collateral owned by the Pledgor in favor
of the Administrative Agent, for the benefit of the Secured Parties, to the
extent a security interest therein can be perfected by such filings or
possession of such chattel paper, promissory notes or instruments, as
applicable, superior and prior to the rights of all other Persons therein
(except for Permitted Liens), and no other or additional filings, registrations,
recordings or actions are or shall be necessary or appropriate in order to
maintain the perfection and priority of such Lien and security interest, other
than continuation statements required under the applicable Uniform Commercial
Code.
(d) All of the Pledged Interests have been duly and validly issued and are
fully paid and not subject to any preemptive rights, warrants, options or
similar rights or restrictions in favor of third parties, any capital call or
other additional capital requirement or any contractual or other restrictions
upon transfer, except as expressly set forth in the Operating Agreement.
(e) No consent, approval, authorization, exemption or other action by,
notice to, or filing with, any Governmental Authority is required in connection
with the due execution, delivery and performance by the Pledgor of this
Agreement, the pledge of the Collateral hereunder or the exercise by the
Administrative Agent of the voting or other rights and remedies in respect of
the Collateral provided for herein, except as expressly set forth in the
Operating Agreement and except as may be required in connection with a
disposition of any Collateral by laws affecting the offering and sale of
securities generally.
(f) The Pledgor has furnished the Administrative Agent with a correct and
complete copy of the Operating Agreement as in effect as of the date hereof.
The Operating Agreement is in full force and effect and there exists no default,
breach or event of default thereunder by any party. The Operating Agreement
sets forth the entire agreement and understanding of the parties thereto in
respect of the subject matter thereof, and there are no other agreements or
understandings, written or oral, relating to the matters covered thereby.
(g) Annex C lists, as to the Pledgor, (i) the address of its chief
-------
executive office and principal place of business and (ii) the address of each
location of all chattel paper, instruments and other records or information
evidencing or relating to the Collateral of the Pledgor. The Pledgor does not
presently conduct business under any prior or other corporate or limited
liability company name or under any trade or fictitious name, except as
indicated beneath its name on Annex C, and the Pledgor has not entered into any
-------
contract or granted any Lien within the past five years under any name other
than its legal corporate or limited liability company name or a trade or
fictitious name indicated beneath its name on Annex C.
-------
5. Additional Collateral. If the Pledgor shall, at any time and from
---------------------
time to time after the date hereof, acquire any additional membership interests
in the Borrower or Indebtedness of the types described in clauses (i) and (ii)
of SECTION 1, the same shall be automatically deemed to be Pledged Interests or
Pledged Indebtedness, as the case may be, and to be pledged to the
Administrative Agent pursuant to SECTION 1, and the Pledgor will forthwith
pledge and deposit the same with the Administrative Agent and deliver to the
Administrative Agent any certificates or instruments therefor, together with the
endorsement of the Pledgor (in the case of any promissory notes or other
instruments), undated stock powers (in the case of Pledged Interests evidenced
by certificates) or other necessary
-4-
instruments of transfer or assignment, duly executed in blank and in form and
substance satisfactory to the Administrative Agent, together with such other
certificates and instruments as the Administrative Agent may reasonably request
(including Uniform Commercial Code financing statements or appropriate
amendments thereto), and will promptly thereafter deliver to the Administrative
Agent a fully completed and duly executed amendment to this Agreement in the
form of Exhibit A (each, a "Pledge Amendment") in respect thereof. The Pledgor
---------
hereby authorizes the Administrative Agent to attach each Pledge Amendment to
this Agreement, and agrees that all such Collateral listed on any Pledge
Amendment shall for all purposes be deemed Collateral hereunder and shall be
subject to the provisions hereof; provided that the failure of the Pledgor to
--------
execute and deliver any Pledge Amendment with respect to any such
additional Collateral as required hereinabove shall not impair the security
interest of the Administrative Agent in such Collateral or otherwise adversely
affect the rights and remedies of the Administrative Agent hereunder with
respect thereto. If any Pledged Interests (whether now owned or hereafter
acquired) are "uncertificated securities" within the meaning of the applicable
Uniform Commercial Code or are otherwise not evidenced by any certificate or
instrument, each applicable Pledgor will promptly notify the Administrative
Agent thereof and will promptly take and cause to be taken all actions required
under applicable law, including, as applicable, under Article 8 or 9 of the
applicable Uniform Commercial Code, to perfect the security interest of the
Administrative Agent therein.
6. Certain Covenants of the Pledgors. (a) The Pledgor will cause the
---------------------------------
Pledged Interests to constitute at all times 100% of the equity membership
interests in the Borrower, and unless the Administrative Agent shall have given
its prior written consent, the Pledgor will not cause or permit the Borrower to
issue or sell any new equity membership interests, any warrants, options or
rights to acquire its equity membership interests, or other equity securities of
any nature to any Person other than the Pledgor, or cause, permit or consent to
the admission of any other Person as a member of the Borrower.
(b) The Pledgor will not sell or otherwise dispose of, grant any options,
warrants or other rights with respect to, or mortgage, pledge, grant any Lien
with respect to or otherwise encumber, any of its Pledged Interests or any other
Collateral or any interest therein, except for the security interest created by
this Agreement.
(c) The Pledgor will not (i) amend, modify, waive or forgive any provision
of or right arising under the Operating Agreement in a manner that would, or
could reasonably be expected to, have the effect of impairing the position or
interests of the Administrative Agent or any other Secured Party, or (ii) cancel
or terminate the Operating Agreement or petition, request or take any other
action that seeks, or that could reasonably be expected, to rescind, terminate,
cancel or suspend the Operating Agreement, to obtain any partition with respect
to the Borrower or to dissolve or liquidate the Borrower. The Pledgor will
deliver to the Administrative Agent from time to time copies of all amendments
or modifications to the Operating Agreement promptly upon completion thereof;
provided that nothing herein shall be deemed to permit any amendment or
--------
modification not otherwise permitted hereunder.
(d) The Pledgor will perform and comply in all material respects with all
terms of the Operating Agreement required to be performed or complied with by
it, will maintain the Operating Agreement in full force and effect, will enforce
the Operating Agreement in accordance with its terms and will take all such
action to that end as may from time to time be reasonably requested by the
Administrative Agent.
-5-
(e) The Pledgor will pay and discharge (i) all taxes, assessments and
governmental charges or levies imposed upon it, upon its income or profits or
upon any of its properties, prior to the date on which penalties would attach
thereto, and (ii) all lawful claims that, if unpaid, might become a Lien upon
any of its properties; provided, however, that the Pledgor shall not be required
-------- -------
to pay any such tax, assessment, charge, levy or claim that is being contested
in good faith and by proper proceedings and as to which the Pledgor has
maintained adequate reserves with respect thereto in accordance with Generally
Accepted Accounting Principles, unless and until any tax lien notice has become
effective with respect thereto or until any Lien resulting therefrom attaches to
its properties and becomes enforceable against its other creditors.
(f) The Pledgor will not (i) change its name, identity or corporate
structure, (ii) change its chief executive office or principal place of business
from the applicable location thereof listed on Annex C, or (iii) remove any
-------
books, records or other information relating to Collateral from the applicable
location thereof listed on Annex C, unless in each case the Pledgor has (1)
-------
given twenty (20) days' prior written notice to the Administrative Agent of its
intention to do so, together with information regarding any such new location
and such other information in connection with such proposed action as the
Administrative Agent may reasonably request, and (2) delivered to the
Administrative Agent ten (10) days prior to any such change or removal such
documents, instruments and financing statements as may be required by the
Administrative Agent, all in form and substance satisfactory to the
Administrative Agent, paid all necessary filing and recording fees and taxes,
and taken all other actions reasonably requested by the Administrative Agent
(including, at the reasonable request of the Administrative Agent, delivery of
opinions of counsel reasonably satisfactory to the Administrative Agent to the
effect that all such actions have been taken), in order to perfect and maintain
the Lien upon and security interest in the Collateral provided for herein in
accordance with the provisions of SECTION 4(c).
(g) The Pledgor shall, from time to time at such times as may be
reasonably requested and upon reasonable notice, (i) make available to the
Administrative Agent for inspection and review at the Pledgor's offices copies
of all documents and information relating to the Collateral, and (ii) permit the
Administrative Agent or its representatives to visit its offices or the premises
upon which any Collateral may be located, inspect its books and records and make
copies and memoranda thereof, inspect the Collateral, discuss its finances and
affairs with its officers, employees and independent accountants and take any
other actions necessary for the protection of the interests of the Secured
Parties in the Collateral.
(h) The Pledgor agrees that it will, at its own cost and expense, take any
and all actions necessary to warrant and defend the right, title and interest of
the Secured Parties in and to the Collateral against the claims and demands of
all other Persons.
7. Voting Rights. So long as no Event of Default shall have occurred and
-------------
be continuing, the Pledgor shall be entitled to exercise all voting and other
consensual rights pertaining to the Pledged Interests (subject to its
obligations under SECTION 5), and for that purpose the Administrative Agent will
execute and deliver or cause to be executed and delivered to the Pledgor all
such proxies and other instruments as the Pledgor may reasonably request in
writing to enable the Pledgor to exercise such voting and other consensual
rights; provided, however, that the Pledgor will not cast any vote, give any
-------- -------
consent, waiver or ratification, or take or fail to take any action, in any
manner that would, or could reasonably be expected to, violate or be
inconsistent with any of the terms of this Agreement, the Credit Agreement or
any other Credit Document, or have the effect of impairing in any material
respect the position or interests of the Administrative Agent or any other
Secured Party.
-6-
8. Dividends and Other Distributions. So long as no Event of Default
---------------------------------
shall have occurred and be continuing (or would occur as a result thereof), and
except as provided otherwise herein, all interest, income, dividends,
distributions and other amounts payable in cash in respect of the Pledged
Interests may be paid to and retained by the Pledgor; provided, however, that
-------- -------
all such interest, dividends, distributions and other amounts shall, at all
times after the occurrence and during the continuance of an Event of Default, be
paid to the Administrative Agent and retained by it as part of the Collateral
(except to the extent applied upon receipt to the repayment of the Secured
Obligations). The Administrative Agent shall also be entitled at all times
(whether or not during the continuance of an Event of Default) to receive
directly, and to retain as part of the Collateral, (i) all interest, income,
dividends, distributions or other amounts paid or payable in cash or other
property in respect of any Pledged Interests in connection with the dissolution,
liquidation, recapitalization or reclassification of the capital of the Borrower
to the extent representing (in the reasonable judgment of the Administrative
Agent) an extraordinary, liquidating or other distribution in return of capital,
(ii) all additional membership interests, warrants, options or other securities
or property (other than cash) paid or payable or distributed or distributable in
respect of any Pledged Interests in connection with any noncash dividend,
distribution, return of capital, spin-off, split-up, reclassification,
combination of interests or similar rearrangement, and (iii) without affecting
any restrictions against such actions contained in the Credit Agreement, all
additional membership interests, warrants, options or other securities or
property (including cash) paid or payable or distributed or distributable in
respect of any Pledged Interests in connection with any consolidation, merger,
exchange of securities, liquidation or other reorganization. All interest,
income, dividends, distributions or other amounts that are received by the
Pledgor in violation of the provisions of this Section shall be received in
trust for the benefit of the Administrative Agent, shall be segregated from
other property or funds of the Pledgor and shall be forthwith delivered to the
Administrative Agent as Collateral in the same form as so received (with any
necessary endorsements).
9. Remedies. If an Event of Default shall have occurred and be
--------
continuing, the Administrative Agent shall be entitled to exercise in respect of
the Collateral all of its rights, powers and remedies provided for herein or
otherwise available to it under any other Credit Document, by law, in equity or
otherwise, including all rights and remedies of a secured party under the
Uniform Commercial Code as in effect in each relevant jurisdiction, and shall be
entitled in particular, but without limitation of the foregoing, to exercise the
following rights, which the Pledgor agrees to be commercially reasonable:
(a) To notify the parties obligated on any of the Collateral to make
payment to the Administrative Agent of any amount due or to become due
thereunder and receive all such amounts;
(b) To transfer to or register in its name or the name of any of its
agents or nominees all or any part of the Collateral, without notice to the
Pledgor and with or without disclosing that such Collateral is subject to the
security interest created hereunder;
(c) To accelerate any Pledged Indebtedness that may be accelerated in
accordance with its terms, and take any other lawful action to collect upon any
Pledged Indebtedness;
(d) To exercise (i) all voting, consensual and other rights and powers
pertaining to the Pledged Interests (whether or not transferred into the name of
the Administrative Agent), at any meeting of the members of the Borrower or
otherwise, and (ii) any and all rights of conversion, exchange, subscription and
any other rights, privileges or options pertaining to the Pledged Interests as
if it were
-7-
the absolute owner thereof (including, without limitation, the right to exchange
at its discretion any and all of the Pledged Interests upon the merger,
consolidation, reorganization, reclassification, combination of interests,
similar rearrangement or other similar fundamental change in the structure of
the Borrower, or upon the exercise by the Pledgor or the Administrative Agent of
any right, privilege or option pertaining to such Pledged Interests, and in
connection therewith, the right to deposit and deliver any and all of the
Pledged Interests with any committee, depositary, transfer agent, registrar or
other designated agency upon such terms and conditions as the Administrative
Agent may determine, and give all consents, waivers and ratifications in respect
of the Pledged Interests, all without liability except to account for any
property actually received by it, but the Administrative Agent shall have no
duty to exercise any such right, privilege or option or give any such consent,
waiver or ratification and shall not be responsible for any failure to do so or
delay in so doing; and for the foregoing purposes the Pledgor will promptly
execute and deliver or cause to be executed and delivered to the Administrative
Agent, upon request, all such proxies and other instruments as the
Administrative Agent may reasonably request to enable the Administrative Agent
to exercise such rights and powers; AND IN FURTHERANCE OF THE FOREGOING AND
WITHOUT LIMITATION THEREOF, THE PLEDGOR HEREBY IRREVOCABLY CONSTITUTES AND
APPOINTS THE ADMINISTRATIVE AGENT AS THE TRUE AND LAWFUL PROXY AND ATTORNEY-IN-
FACT OF THE PLEDGOR, WITH FULL POWER OF SUBSTITUTION IN THE PREMISES, TO
EXERCISE ALL SUCH VOTING, CONSENSUAL AND OTHER RIGHTS AND POWERS TO WHICH ANY
MEMBER OF THE BORROWER HOLDING THE PLEDGED INTERESTS WOULD BE ENTITLED BY VIRTUE
OF HOLDING THE SAME, WHICH PROXY AND POWER OF ATTORNEY, BEING COUPLED WITH AN
INTEREST, IS IRREVOCABLE AND SHALL BE EFFECTIVE FOR SO LONG AS THIS AGREEMENT
SHALL BE IN EFFECT; and
(e) To sell, resell, assign and deliver, in its sole discretion, all or
any of the Collateral, in one or more parcels, on any securities exchange on
which the Pledged Interests may be listed, at public or private sale, at any of
the Administrative Agent's offices or elsewhere, for cash, upon credit or for
future delivery, at such time or times and at such price or prices and upon such
other terms as the Administrative Agent may deem satisfactory. If any of the
Collateral is sold by the Administrative Agent upon credit or for future
delivery, the Administrative Agent shall not be liable for the failure of the
purchaser to purchase or pay for the same and, in the event of any such failure,
the Administrative Agent may resell such Collateral. In no event shall the
Pledgor be credited with any part of the Proceeds of sale of any Collateral
until and to the extent cash payment in respect thereof has actually been
received by the Administrative Agent. Each purchaser at any such sale shall hold
the property sold absolutely, free from any claim or right of whatsoever kind,
including any equity or right of redemption of the Pledgor, and the Pledgor
hereby expressly waives all rights of redemption, stay or appraisal, and all
rights to require the Administrative Agent to marshal any assets in favor of the
Pledgor or any other party or against or in payment of any or all of the Secured
Obligations, that it has or may have under any rule of law or statute now
existing or hereafter adopted. No demand, presentment, protest, advertisement or
notice of any kind (except any notice required by law, as referred to below),
all of which are hereby expressly waived by the Pledgor, shall be required in
connection with any sale or other disposition of any part of the Collateral. If
any notice of a proposed sale or other disposition of any part of the Collateral
shall be required under applicable law, the Administrative Agent shall give the
applicable Pledgor at least ten (10) days' prior notice of the time and place of
any public sale and of the time after which any private sale or other
disposition is to be made, which notice the Pledgor agrees is commercially
reasonable. The Administrative Agent shall not be obligated to make any sale of
Collateral if it shall determine not to do so, regardless of the fact that
notice of sale may have been given. The Administrative Agent may, without notice
or publication, adjourn any public or private sale
-8-
or cause the same to be adjourned from time to time by announcement at the time
and place fixed for sale, and such sale may, without further notice, be made at
the time and place to which the same was so adjourned. Upon each public sale
and, to the extent permitted by applicable law, upon each private sale, the
Administrative Agent may purchase all or any of the Collateral being sold, free
from any equity, right of redemption or other claim or demand, and may make
payment therefor by endorsement and application (without recourse) of the
Secured Obligations in lieu of cash as a credit on account of the purchase price
for such Collateral.
10. Application of Proceeds. (a) All Proceeds collected by the
-----------------------
Administrative Agent upon any sale, other disposition of or realization upon any
of the Collateral, together with all other moneys received by the Administrative
Agent hereunder, shall be applied as follows:
(i) first, to the payment of all costs and expenses of such sale,
disposition or other realization, including the reasonable costs and
expenses of the Administrative Agent and the reasonable fees and expenses
of its agents and counsel, all amounts advanced by the Administrative Agent
for the account of the Pledgor, and all other amounts payable to the
Administrative Agent under SECTION 13;
(ii) second, after payment in full of the amounts specified in
clause (i) above, to the ratable payment of all other Secured Obligations
owing to the Secured Parties; and
(iii) third, after payment in full of the amounts specified in
clauses (i) and (ii) above, and following the termination of this
Agreement, to the Pledgor or any other Person lawfully entitled to receive
such surplus.
(b) For purposes of applying amounts in accordance with this Section,
the Administrative Agent shall be entitled to rely upon any Secured Party that
has entered into an Interest Rate Protection Agreement with the Borrower for a
determination (which such Secured Party agrees to provide or cause to be
provided upon request of the Administrative Agent) of the outstanding Secured
Obligations owed to such Secured Party under any such Interest Rate Protection
Agreement. Unless it has actual knowledge (including by way of written notice
from any such Secured Party) to the contrary, the Administrative Agent, in
acting hereunder, shall be entitled to assume that no Interest Rate Protection
Agreements or Obligations in respect thereof are in existence between any
Secured Party and the Borrower.
(c) The Pledgor shall remain liable to the extent of any deficiency
between the amount of all Proceeds realized upon sale or other disposition of
the Collateral pursuant to this Agreement and the aggregate amount of the sums
referred to in clauses (i) and (ii) of subsection (a) above. Upon any sale of
any Collateral hereunder by the Administrative Agent (whether by virtue of the
power of sale herein granted, pursuant to judicial proceeding, or otherwise),
the receipt of the Administrative Agent or the officer making the sale shall be
a sufficient discharge to the purchaser or purchasers of the Collateral so sold,
and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Administrative
Agent or such officer or be answerable in any way for the misapplication
thereof.
11. The Pledgor Remains Liable. Notwithstanding anything herein to the
--------------------------
contrary, (i) the Pledgor shall remain liable under the Operating Agreement to
perform all of its obligations thereunder to the same extent as if this
Agreement had not been executed, (ii) the exercise by the Administrative Agent
of any of its rights or remedies hereunder shall not release the Pledgor from
any of its obligations under
-9-
the Operating Agreement, and (iii) except as specifically provided for
hereinbelow, the Administrative Agent shall not have any obligation or liability
by reason of this Agreement under the Operating Agreement, nor shall the
Administrative Agent be obligated to perform any of the obligations or duties of
the Pledgor thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder. This Agreement shall not in any way be deemed to
obligate the Administrative Agent, any other Secured Party or any purchaser at a
foreclosure sale under this Agreement to assume any of the Pledgor's
obligations, duties or liabilities under the Operating Agreement, including,
without limitation, the Pledgor's obligations to manage the business and affairs
of the Borrower (collectively, the "Member Obligations"), unless the
Administrative Agent or such other Secured Party or purchaser otherwise agrees
in writing to assume any or all of such Member Obligations. In the event of
foreclosure by the Administrative Agent hereunder, then except as provided in
the preceding sentence, the Pledgor shall remain bound and obligated to perform
its Member Obligations and neither the Administrative Agent nor any other
Secured Party shall be deemed to have assumed any Member Obligations. In the
event the Administrative Agent, any other Secured Party or any purchaser at a
foreclosure sale elects to become a substitute member in place of the Pledgor,
the party making such election shall adopt in writing the Operating Agreement
and agree to be bound by the terms and provisions thereof; and subject to the
execution of such written agreement, the Pledgor hereby irrevocably consents in
advance, pursuant to the Operating Agreement, to the admission of the
Administrative Agent, any other Secured Party or any such purchaser as a
substitute member to the extent of the Pledged Interests acquired pursuant to
such sale, and agrees to execute any documents or instruments and take any other
action as may be necessary or as may be reasonably requested in connection
therewith. The powers, rights and remedies conferred on the Administrative Agent
hereunder are solely to protect its interest and privilege in the Operating
Agreement, as Collateral, and shall not impose any duty upon it to exercise any
such powers, rights or remedies.
12. Registration; Private Sales. (a) If, at any time after the
---------------------------
occurrence and during the continuance of an Event of Default, the Pledgor shall
have received from the Administrative Agent a written request or requests that
the Pledgor cause any registration, qualification or compliance under any
federal or state securities law or laws to be effected with respect to all or
any part of the Pledged Interests, the Pledgor will, as soon as practicable and
at its expense, use its best efforts to cause such registration to be effected
and be kept effective and will use its best efforts to cause such qualification
and compliance to be effected and be kept effective as may be so requested and
as would permit or facilitate the sale and distribution of such Pledged
Interests, including, without limitation, registration under the Securities Act
of 1933, as amended (the "Securities Act"), appropriate qualifications under
applicable blue sky or other state securities laws and appropriate compliance
with any other applicable requirements of Governmental Authorities; provided,
--------
that the Administrative Agent shall furnish to the Pledgor such information
regarding the Administrative Agent as the Pledgor may reasonably request in
writing and as shall be required in connection with any such registration,
qualification or compliance. The Pledgor will cause the Administrative Agent to
be kept reasonably advised in writing as to the progress of each such
registration, qualification or compliance and as to the completion thereof, will
furnish to the Administrative Agent such number of prospectuses, offering
circulars or other documents incident thereto as the Administrative Agent from
time to time may reasonably request, and will indemnify the Administrative Agent
and all others participating in the distribution of such Pledged Securities
against all claims, losses, damages and liabilities caused by any untrue
statement (or alleged untrue statement) of a material fact contained therein (or
in any related registration statement, notification or the like) or by any
omission (or alleged omission) to state therein (or in any related registration
statement, notification or the like) a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as the same may have been caused by an
-10-
untrue statement or omission based upon information furnished in writing to the
Pledgor by the Administrative Agent or any other Secured Party expressly for use
therein.
(b) The Pledgor recognizes that, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws as in
effect from time to time, the Administrative Agent may be compelled, with
respect to any sale of all or any part of the Pledged Interests conducted
without registration or qualification under the Securities Act and such state
securities laws, to limit purchasers to any one or more Persons who will
represent and agree, among other things, to acquire such Pledged Interests for
their own account, for investment and not with a view to the distribution or
resale thereof. The Pledgor acknowledges that any such private sales may be
made in such manner and under such circumstances as the Administrative Agent may
deem necessary or advisable in its sole and absolute discretion, including at
prices and on terms less favorable than those obtainable through a public sale
without such restrictions (including, without limitation, a public offering made
pursuant to a registration statement under the Securities Act), and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner and agrees that the
Administrative Agent shall have no obligation to conduct any public sales and no
obligation to delay the sale of any Pledged Interests for the period of time
necessary to permit its registration for public sale under the Securities Act
and applicable state securities laws, and shall not have any responsibility or
liability as a result of its election so not to conduct any such public sales or
delay the sale of any Pledged Interests, notwithstanding the possibility that a
substantially higher price might be realized if the sale were deferred until
after such registration. The Pledgor hereby waives any claims against the
Administrative Agent or any Secured Party arising by reason of the fact that the
price at which any Pledged Interests may have been sold at any private sale was
less than the price that might have been obtained at a public sale or was less
than the aggregate amount of the Secured Obligations, even if the Administrative
Agent accepts the first offer received and does not offer such Pledged Interests
to more than one offeree.
(c) The Pledgor agrees that a breach of any of the covenants contained in
this Section will cause irreparable injury to the Administrative Agent and the
other Secured Parties, that the Administrative Agent and the other Secured
Parties have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this Section shall be
specifically enforceable against the Pledgor.
13. Indemnity and Expenses. The Pledgor agrees:
----------------------
(a) To indemnify and hold harmless the Administrative Agent, each other
Secured Party and each of their respective directors, officers, employees,
agents and affiliates from and against any and all claims, damages, demands,
losses, obligations, judgments and liabilities (including, without limitation,
reasonable attorneys' fees and expenses) in any way arising out of or in
connection with this Agreement and the transactions contemplated hereby, except
to the extent the same shall arise as a result of the gross negligence or
willful misconduct of the party seeking to be indemnified; and
(b) To pay and reimburse the Administrative Agent upon demand for all
reasonable costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses) that the Administrative Agent may incur in
connection with (i) the custody, use or preservation of, or the sale of,
collection from or other realization upon, any of the Collateral, including the
reasonable expenses of re-taking, holding, preparing for sale or lease, selling
or otherwise disposing of or realizing on the Collateral, (ii) the exercise or
enforcement of any rights or remedies granted hereunder (including,
-11-
without limitation, under SECTION 12), under any of the other Credit Documents
or otherwise available to it (whether at law, in equity or otherwise), or (iii)
the failure by the Pledgor to perform or observe any of the provisions hereof.
The provisions of this SECTION 13 shall survive the execution and delivery of
this Agreement, the repayment of any of the Obligations, the termination of the
Commitments under the Credit Agreement and the termination of this Agreement or
any other Credit Document.
14. Further Assurances; Attorney-in-Fact. (a) The Pledgor agrees that it
------------------------------------
will join with the Administrative Agent to execute and, at its own expense, file
and refile under any applicable Uniform Commercial Code such financing
statements, continuation statements and other documents and instruments in such
offices as the Administrative Agent may reasonably deem necessary or
appropriate, and wherever required or permitted by law, in order to perfect and
preserve the Administrative Agent's security interest in the Collateral, and
hereby authorizes the Administrative Agent to file financing statements and
amendments thereto relating to all or any part of the Collateral without the
signature of the Pledgor where permitted by law, and agrees to do such further
acts and things and to execute and deliver to the Administrative Agent such
additional conveyances, assignments, agreements and instruments as the
Administrative Agent may reasonably require or deem advisable to perfect,
establish, confirm and maintain the security interest and Lien provided for
herein, to carry out the purposes of this Agreement or to further assure and
confirm unto the Administrative Agent its rights, powers and remedies hereunder.
(b) The Pledgor hereby irrevocably appoints the Administrative Agent its
lawful attorney-in-fact, with full authority in the place and stead of the
Pledgor and in the name of the Pledgor, the Administrative Agent or otherwise,
and with full power of substitution in the premises (which power of attorney,
being coupled with an interest, is irrevocable for so long as this Agreement
shall be in effect), from time to time in the Administrative Agent's discretion
after the occurrence and during the continuance of an Event of Default to take
any action and to execute any instruments that the Administrative Agent may deem
necessary or advisable to accomplish the purpose of this Agreement, including,
without limitation:
(i) to sign the name of the Pledgor on any financing statement,
continuation statement, notice or other similar document that, in the
Administrative Agent's opinion, should be made or filed in order to perfect
or continue perfected the security interest granted under this Agreement;
(ii) to ask, demand, collect, ▇▇▇ for, recover, compound, receive
and give acquittance and receipts for moneys due and to become due under or
in respect of any of the Collateral;
(iii) to receive, endorse and collect any checks, drafts,
instruments, chattel paper and other orders for the payment of money made
payable to the Pledgor representing any interest, income, dividend,
distribution or other amount payable in respect of any of the Collateral
and to give full discharge for the same;
(iv) to pay or discharge taxes, Liens or other encumbrances levied
or placed on or threatened against the Collateral, the legality or validity
thereof and the amounts necessary to discharge the same to be determined by
the Administrative Agent in its sole discretion, any such payments made by
the Administrative Agent to become Secured Obligations of the Pledgor to
the Administrative Agent, due and payable immediately and without demand;
-12-
(v) to file any claims or take any action or institute any
proceedings that the Administrative Agent may deem necessary or advisable
for the collection of any of the Collateral or otherwise to enforce the
rights of the Administrative Agent with respect to any of the Collateral;
and
(vi) to use, sell, assign, transfer, pledge, make any agreement
with respect to or otherwise deal with any and all of the Collateral as
fully and completely as though the Administrative Agent were the absolute
owner of the Collateral for all purposes, and to do from time to time, at
the Administrative Agent's option and the Pledgor's expense, all other acts
and things deemed necessary by the Administrative Agent to protect,
preserve or realize upon the Collateral and to more completely carry out
the purposes of this Agreement.
(c) If the Pledgor fails to perform any covenant or agreement contained in
this Agreement after written request to do so by the Administrative Agent
(provided that no such request shall be necessary at any time after the
---------
occurrence and during the continuance of an Event of Default), the
Administrative Agent may itself perform, or cause the performance of, such
covenant or agreement and may take any other action that it deems necessary and
appropriate for the maintenance and preservation of the Collateral or its
security interest therein, and the reasonable expenses so incurred in connection
therewith shall be payable by the Pledgor under SECTION 13.
15. The Administrative Agent; Standard of Care. The Administrative Agent
------------------------------------------
will hold all items of the Collateral at any time received under this Agreement
in accordance with the provisions hereof. The obligations of the Administrative
Agent as holder of the Collateral and interests therein and with respect to the
disposition thereof, and otherwise under this Agreement and the other Credit
Documents, are only those expressly set forth in this Agreement and the other
Credit Documents. The Administrative Agent shall act hereunder at the
direction, or with the consent, of the Required Lenders on the terms and
conditions set forth in the Credit Agreement. The powers conferred on the
Administrative Agent hereunder are solely to protect its interest, on behalf of
the Secured Parties, in the Collateral, and shall not impose any duty upon it to
exercise any such powers. Except for treatment of the Collateral in its
possession in a manner substantially equivalent to that which the Administrative
Agent, in its individual capacity, accords its own property of a similar nature,
and the accounting for moneys actually received by it hereunder, the
Administrative Agent shall have no duty as to any Collateral or as to the taking
of any necessary steps to preserve rights against prior parties or any other
rights pertaining to the Collateral. Neither the Administrative Agent nor any
other Secured Party shall be liable to the Pledgor (i) for any loss or damage
sustained by the Pledgor, or (ii) for any loss, damage, depreciation or other
diminution in the value of any of the Collateral that may occur as a result of
or in connection with or that is in any way related to any exercise by the
Administrative Agent or any other Secured Party of any right or remedy under
this Agreement, any failure to demand, collect or realize upon any of the
Collateral or any delay in doing so, or any other act or failure to act on the
part of the Administrative Agent or any other Secured Party, except to the
extent that the same is caused by its own gross negligence or willful
misconduct.
16. Security Interest Absolute. The Pledgor agrees that its obligations,
--------------------------
and the security interest granted to and all rights of the Administrative Agent,
hereunder are irrevocable, absolute and unconditional and shall not be
discharged, limited or otherwise affected by reason of any of the following,
whether or not the Pledgor has notice or knowledge thereof:
-13-
(i) any change in the time, manner or place of payment of, or in
any other term of, any Secured Obligations, or any amendment, modification
or supplement to, restatement of, or consent to any rescission or waiver of
or departure from, any provisions of the Credit Agreement, any other
Credit Document or any agreement or instrument delivered pursuant to any of
the foregoing;
(ii) the invalidity or unenforceability of any Secured Obligations
or any provisions of the Credit Agreement, any other Credit Document or any
agreement or instrument delivered pursuant to any of the foregoing;
(iii) any sale, exchange, release, substitution, compromise,
nonperfection or other action or inaction in respect of any other
collateral pledged as direct or indirect security for any Secured
Obligations, or any discharge, modification, settlement, compromise or
other action or inaction in respect of any guaranty or other direct or
indirect liability for any Secured Obligations; or
(iv) any other circumstance that might otherwise constitute a
legal or equitable discharge of, or a defense, set-off or counterclaim
available to, the Pledgor, other than the occurrence of (x) the payment in
full of the Secured Obligations (other than indemnity obligations not then
due and payable and that survive termination of the Credit Documents), (y)
the termination or expiration of all Letters of Credit under the Credit
Agreement and (z) the termination of the Commitments under the Credit
Agreement (the events in clauses (x), (y) and (z) above, collectively, the
"Termination Requirements").
17. No Waiver. The rights and remedies of the Secured Parties expressly
---------
set forth in this Agreement and the other Credit Documents are cumulative and in
addition to, and not exclusive of, all other rights and remedies available at
law, in equity or otherwise. No failure or delay on the part of any Secured
Party in exercising any right, power or privilege shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
privilege preclude any other or further exercise thereof or the exercise of any
other right, power or privilege or be construed to be a waiver of any Default or
Event of Default. No course of dealing between the Pledgor and the Secured
Parties or their agents or employees shall be effective to amend, modify or
discharge any provision of this Agreement or any other Credit Document or to
constitute a waiver of any Default or Event of Default. No notice to or demand
upon the Pledgor in any case shall entitle the Pledgor to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the
right of any Secured Party to exercise any right or remedy or take any other or
further action in any circumstances without notice or demand.
18. Enforcement. By its acceptance of the benefits of this Agreement,
-----------
each Lender agrees that this Agreement may be enforced only by the
Administrative Agent, acting upon the instructions or with the consent of the
Required Lenders as provided for in the Credit Agreement, and that no Lender
shall have any right individually to enforce or seek to enforce this Agreement
or to realize upon any Collateral or other security given to secure the payment
and performance of the Secured Obligations.
19. Amendments, Waivers, etc. No amendment, modification, waiver,
------------------------
discharge or termination of, or consent to any departure by the Pledgor from,
any provision of this Agreement, shall be effective unless in a writing executed
and delivered in accordance with Section 11.6 of the Credit Agreement, and then
the same shall be effective only in the specific instance and for the specific
purpose for which given.
-14-
20. Continuing Security Interest; Term; Successors and Assigns;
-----------------------------------------------------------
Assignment; Termination and Release; Survival. This Agreement shall create a
---------------------------------------------
continuing security interest in the Collateral and shall secure the payment and
performance of all of the Secured Obligations as the same may arise and be
outstanding at any time and from time to time from and after the date hereof,
and shall (i) remain in full force and effect until the satisfaction of all of
the Termination Requirements, (ii) be binding upon and enforceable against the
Pledgor and its successors and assigns (provided, however, that the Pledgor may
-------- -------
not sell, assign or transfer any of its rights, interests, duties or obligations
hereunder without the prior written consent of the Lenders) and (iii) inure to
the benefit of and be enforceable by each Secured Party and its successors and
assigns. Upon any sale or other disposition by the Pledgor of any Collateral in
a transaction expressly permitted hereunder or under or pursuant to the Credit
Agreement or any other applicable Credit Document, the Lien and security
interest created by this Agreement in and upon such Collateral shall be
automatically released, and upon the satisfaction of all of the Termination
Requirements, this Agreement and the Lien and security interest created hereby
shall terminate; and in connection with any such release or termination, the
Administrative Agent, at the request and expense of the Pledgor, will execute
and deliver to the Pledgor such documents and instruments evidencing such
release or termination as the Pledgor may reasonably request and will assign,
transfer and deliver to the Pledgor, without recourse and without representation
or warranty, such of the Collateral as may then be in the possession of the
Administrative Agent (or, in the case of any partial release of Collateral, such
of the Collateral so being released as may be in its possession). All
representations, warranties, covenants and agreements herein shall survive the
execution and delivery of this Agreement and any Pledge Amendment.
21. Notices. All notices and other communications provided for
-------
hereunder shall be given to the parties in the manner and subject to the other
notice provisions set forth in the Parent Guaranty.
22. Governing Law. This Agreement shall be governed by and construed
-------------
and enforced in accordance with the laws of the State of North Carolina (without
regard to the conflicts of law provisions thereof).
23. Severability. To the extent any provision of this Agreement is
------------
prohibited by or invalid under the applicable law of any jurisdiction, such
provision shall be ineffective only to the extent of such prohibition or
invalidity and only in such jurisdiction, without prohibiting or invalidating
such provision in any other jurisdiction or the remaining provisions of this
Agreement in any jurisdiction.
24. Construction. The headings of the various sections and subsections
------------
of this Agreement have been inserted for convenience only and shall not in any
way affect the meaning or construction of any of the provisions hereof. Unless
the context otherwise requires, words in the singular include the plural and
words in the plural include the singular. All terms in this Agreement that are
not capitalized shall have the meanings provided by the applicable Uniform
Commercial Code to the extent the same are used or defined therein.
25. Counterparts. This Agreement may be executed in any number of
------------
counterparts and by different parties hereto on separate counterparts, each of
which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.
-15-
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
under seal by their duly authorized officers as of the date first above written.
THE ▇▇▇▇▇▇▇▇ COMPANIES, INC.
By: ________________________________
Title: _____________________________
Accepted and agreed to:
FIRST UNION NATIONAL BANK, as
Administrative Agent
By: _______________________________
Title: ____________________________
-16-
Annex A to Parent Pledge and
Security Agreement
First Union National Bank, as
Administrative Agent
▇▇▇▇▇▇▇▇ Publishing Company, L.L.C.
___________, 1998
___________________________________
Pledged Interests
-----------------
Percentage of
Outstanding
Type of Interests
Name of Issuer Interests in Issuer
-------------- --------- ---------
Annex B to Parent Pledge and
Security Agreement
First Union National Bank, as
Administrative Agent
▇▇▇▇▇▇▇▇ Publishing Company, L.L.C.
_________, 1998
___________________________________
FILING LOCATIONS
Annex C to Parent Pledge and
Security Agreement
First Union National Bank, as
Administrative Agent
▇▇▇▇▇▇▇▇ Publishing Company, L.L.C.
___________, 1998
___________________________________
LOCATIONS OF CHIEF EXECUTIVE OFFICE
AND RECORDS RELATING TO COLLATERAL
Exhibit A to Parent Pledge and
Security Agreement
First Union National Bank, as
Administrative Agent
▇▇▇▇▇▇▇▇ Publishing Company, L.L.C.
___________, 1998
___________________________________
PLEDGE AMENDMENT
THIS PLEDGE AMENDMENT, dated as of _______________, 19___, is
delivered by THE ▇▇▇▇▇▇▇▇ COMPANIES, INC. (the "Pledgor") pursuant to SECTION 5
of the Pledge Agreement referred to hereinbelow. The Pledgor hereby agrees that
this Pledge Amendment may be attached to the Pledge and Security Agreement,
dated as of __________, 1998, made by the Pledgor in favor of First Union
National Bank, as Administrative Agent (as amended, modified, supplemented or
restated from time to time, the "Pledge Agreement," capitalized terms defined
therein being used herein as therein defined), and that the Pledged Interests
listed on Annex A to this Pledge Amendment shall be deemed to be part of the
-------
Pledged Interests within the meaning of the Pledge Agreement and shall become
part of the Collateral and shall secure all of the Secured Obligations as
provided in the Pledge Agreement. This Pledge Amendment and its attachments are
hereby incorporated into the Pledge Agreement and made a part thereof.
THE ▇▇▇▇▇▇▇▇ COMPANIES, INC.
By: _______________________________
Title: ____________________________
Annex A to Exhibit A (Pledge
Amendment)
First Union National Bank, as
Administrative Agent
▇▇▇▇▇▇▇▇ Publishing Company, L.L.C.
___________, 1998
___________________________________
Pledged Interests
-----------------
Percentage of
Outstanding
Type of Certificate Interests
Name of Issuer Interests Number in Issuer
-------------- ---------- --------- ---------
EXHIBIT I-1
[LETTERHEAD OF ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇]
March 31, 1998
To each Lender party to the Credit Agreement
referred to below, and First Union National Bank,
as Administrative Agent
Re: ▇▇▇▇▇▇▇▇ Publishing Company, L.L.C.--Senior Credit Agreement
------------------------------------------------------------
Ladies and Gentlemen:
We are issuing this letter in our capacity as counsel for ▇▇▇▇▇▇▇▇
Publishing Company, L.L.C., a Delaware limited liability company (the
"Borrower"), and The ▇▇▇▇▇▇▇▇ Companies, Inc., a Delaware corporation (the
--------
"Manager", and together with the Borrower, "our Clients" or the "Credit
-------
Parties"), in connection with that certain Credit Agreement dated as of March
31, 1998, among the Borrower, the banks and other financial institutions from
time to time parties thereto (the "Lenders"), First Union National Bank, as
-------
Administrative Agent, and the Documentation Agent, Syndication Agent and
Managing Agents referred to therein (the "Credit Agreement"). We are issuing
----------------
this letter at the request of our Clients and pursuant to Section 4.1(a)(iv) of
the Credit Agreement.
In addition to the Credit Agreement, we have reviewed executed counterparts
of the documents listed on the Transaction Document Schedule attached hereto.
The Credit Agreement and the other documents listed on such Transaction Document
Schedule are herein called the "Transaction Documents", and the Credit
---------------------
Agreement and the other documents listed as items 2 through 9 on the Transaction
Document Schedule are herein called the "Credit Documents". Each term used
----------------
herein which is defined or given special meaning in the Credit Agreement but
which is not otherwise defined herein shall have the same meaning herein as
ascribed to it in the Credit Agreement. Each term which is defined or given
special meaning in this letter has the same meaning whenever it is used in the
attached schedules.
Subject to the assumptions, qualifications, exclusions and other
limitations that are identified in this letter and in the schedules attached to
this letter, it is our opinion that:
1. The Borrower is a limited liability company duly formed, existing and in
good standing under the laws of the State of Delaware.
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
To each Lender party to the Credit Agreement
referred to below and First Union National Bank, as
Administrative Agent
March 31, 1998
Page 2
2. Manager is a corporation duly incorporated, existed and in good standing
under the laws of the State of Delaware.
3. Each Credit Party has the corporate or limited liability company power to
execute and deliver the Transaction Documents to which it is party, to
borrow money under the Credit Agreement (in the case of Borrower), to
pledge and grant or convey security interests in and liens upon its assets
as collateral as required under the Credit Agreement and under the other
Credit Documents, and to perform its obligations under the Transaction
Documents to which it is party.
4. All corporate or limited liability company action by each Credit Party and
all internal consents and approvals have been duly taken or obtained to
authorize such Credit Party's execution, delivery and performance of each
of the Transaction Documents to which it is a party.
5. Each Transaction Document to which any Credit Party is a party has been
duly executed and delivered by authorized officers of such Credit Party (or
in the case of a limited liability company, authorized officers of a Person
authorized to execute documents on behalf of such Credit Party, as
appropriate).
6. To our knowledge, but without our having made any independent
investigation, there are no actions, suits or proceedings pending or
threatened against or affecting any Credit Party or any properties of any
Credit Party at law or in equity, before any court or administrative
officer or agency, which are required to have been described in the
Registration Statement pursuant to item 103 of Regulation S-K, as
promulgated under the Securities Act of 1933, as amended, and which are not
so described.
7. The execution and delivery by each Credit Party of the Credit Documents to
which it is a party and its performance of its obligations thereunder will
not (a) violate any provision of its respective Certificate of
Incorporation and bylaws or limited liability company organization
agreement or (b) constitute a violation of any agreement listed on the
Schedule of Specified Agreements attached hereto (the "Specified
Agreements") (except that we express no opinion with respect to violations
under cross-default provisions referring to or based upon agreements that
are not included
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
To each Lender party to the Credit Agreement
referred to below and First Union National Bank, as
Administrative Agent
March 31, 1998
Page 3
in the Specified Agreements or with respect to compliance with financial
covenants or tests) or (c) constitute a violation by such Credit Party of
any statutory law or governmental regulation covered by this letter or (d)
to our knowledge result in or require the creation or imposition of any
Lien (other than those created by the Credit Documents) upon any assets or
property of any Credit Party. No Credit Party was required to obtain any
consent, approval, authorization or order of, or make any filings or
registrations with, any United States federal court or governmental agency
in order to obtain the right to enter into or perform under any of the
Transaction Documents or to take any of the actions taken by it on or prior
to this date to consummate the Loans made this date under the Credit
Agreement, except for (i) such consents, authorizations, approvals, orders,
registrations or filings as have been made or obtained prior to the date
hereof, or as permitted to be made or obtained on or after the date hereof
pursuant to the Credit Agreement or the Subordinated Note Indenture and the
Exhibits and schedules thereto, respectively; (ii) such consents,
authorizations, approvals, orders, registrations or filings as could not
individually or in the aggregate reasonably be expected to have a Material
Adverse Effect; and (iii) the recording or filing of Security Documents to
perfect Liens and security interests in the Collateral.
8. (a) Upon the due filing and recordation of each Short Form Trademark
Collateral Assignment (as contemplated by the Pledge and Security Agreement
and the Parent Pledge and Security Agreement) in the PTO and the payment of
all filing and recordation fees associated therewith, and assuming the
existence of the security interests purported to be created by such
Trademark Collateral Assignments, such security interests are or will be
perfected security interests in the Collateral described therein to the
extent the same may be perfected by such filing. We note for your
information that filing with the PTO alone may not be sufficient to perfect
fully the security interests in such Collateral, and that under the
applicable Uniform Commercial Code and federal law, appropriate UCC
financing statements may also be required to be filed in order to perfect
fully such security interests. We also note that the perfection of your
security interest in such Collateral is subject to the effect of section 9-
306 of the applicable Uniform Commercial Code and to sections 547 and 552
of the Bankruptcy Code.
(b) To the extent that the perfection and effect of perfection of any
security interest in the membership interests in the Borrower pledged to
you pursuant to the
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
To each Lender party to the Credit Agreement
referred to below and First Union National Bank, as
Administrative Agent
March 31, 1998
Page 4
Parent Pledge and Security Agreement are governed by the law of the State
of Delaware (as to which matter we express no opinion) and assuming the
existence of the security interests in such membership interests purported
to be created by the Parent Pledge and Security Agreement, such membership
interests do not constitute "uncertificated securities" (as defined in the
Uniform Commercial Code) and therefore the perfection and effect of
perfection of such membership interests will be governed by Section 9-103
of the Uniform Commercial Code. Our opinion in this Section 8(b) is based
solely on our review of the Delaware Uniform Commercial Code as set forth
in the Commerce Clearing House, Inc. Secured Transaction Guide (the
"Guide") as supplemented through March 3, 1998.
-----
9. No federal taxes or other federal impositions are required to be paid in
connection with the execution, delivery and performance or recordation of
the Credit Agreement or the other Credit Documents, except for the filing
and recording fees in respect of the Short Form Trademark Collateral
Assignments in the PTO, and except that we express no opinion regarding any
taxes or impositions that may be required to be paid with respect to or as
a result of payments made by any Credit Party under the Credit Documents.
10. No Credit Party is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
11. The consummation on the date hereof of the making and borrowing of the
Loans this date under the Credit Documents will not violate or result in a
violation of Regulation G, T, U or X of the Board of Governors of the
Federal Reserve System.
Each opinion in this letter is subject to the General Qualifications that
are recited in Schedule A to this letter to the extent relevant to such opinion.
In preparing this letter we have relied, as to factual matters, without any
independent verification upon the assumptions recited in Schedule B to this
letter and upon: (i) information contained in certificates obtained from
governmental authorities; (ii) factual information represented to be true in the
Transaction Documents; (iii) factual information provided to us by our Clients,
including without limitation the information set forth in a Support Certificate
provided to us by our Clients in connection with this letter; and (iv) factual
information we have obtained
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
To each Lender party to the Credit Agreement
referred to below and First Union National Bank, as
Administrative Agent
March 31, 1998
Page 5
from such other sources as we have deemed reasonable. We have assumed without
investigation that there has been no relevant change or development between the
dates as of which the information cited in the preceding sentence was given and
the date of this letter and that the information upon which we have relied is
accurate and does not omit disclosures necessary to prevent such information
from being misleading.
While we have not conducted any independent investigation to determine
facts upon which our opinions are based, we confirm that we do not have any
actual knowledge which has caused us to conclude that our reliance and
assumptions cited in the preceding paragraph are unwarranted. The term "actual
knowledge" whenever it is used in this letter with respect to our firm means
conscious awareness at the time this letter is delivered on the date it bears by
the following ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ lawyers who have had significant involvement with
negotiation or preparation of the Transaction Documents (herein called "our
Designated Transaction Lawyers"): ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
Our advice on every legal issue addressed in this letter is based
exclusively on such federal law of the United States which is in our experience
normally applicable to general business corporations and limited liability
companies not engaged in regulated business activities and to transactions of
the type contemplated in the Credit Documents between the Credit Parties, on the
one hand, and you on the other hand (but without our having made any special
investigation as to any other laws), except that we express no opinion or advice
as to any law (i) the violation of which would not have any material adverse
effect on the Credit Parties, (ii) which might be violated by any
misrepresentation or omission or a fraudulent act, (iii) to which any Credit
Party may be subject as a result of your legal or regulatory status, your sale
or transfer of the Loans or interests therein or your (as opposed to any other
lender's) involvement in the transactions contemplated by the Transaction
Documents, or (iv) identified on Schedule C, and except that the opinions in
paragraphs 1 - 5 and 7(a) are based exclusively on the General Corporation Law,
and the Limited Liability Company Act, as applicable, of the State of Delaware
and except that the opinion in paragraph 8(b) is based exclusively on our review
of the Delaware Uniform Commercial Code as set forth in the Guide. We advise you
that some issues addressed by this letter may be governed in whole or in part by
other laws, but we express no opinion as to whether any relevant difference
exists between the laws upon which our opinions are based and any other laws
which may actually govern. Our opinions do not cover or otherwise address any
law or legal issue which is identified in the attached Schedule C. Provisions in
the
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
To each Lender party to the Credit Agreement
referred to below and First Union National Bank, as
Administrative Agent
March 31, 1998
Page 6
Transaction Documents which are not excluded by any other part of this letter or
its attachments are called the "Relevant Agreement Terms."
Our advise on each legal issue addressed in this letter represents our
opinion as to how that issue would be resolved were it to be considered by the
highest court of the jurisdiction upon whose law our opinion on that issue is
based. The manner in which any particular issue would be treated in any actual
court case would depend in part on facts and circumstances particular to the
case, and this letter is not intended to guarantee the outcome of any legal
dispute which may arise in the future.
This letter speaks as of the time of its delivery on the date it bears. We
do not assume any obligation to provide you with any subsequent opinion or
advice by reason of any fact about which our Designated Transaction Lawyers did
not have actual knowledge at that time, by reason of any change subsequent to
that time in any law covered by any of our opinions, or for any other reason.
The attached schedules are an integral part of this letter, and any term defined
in this letter or any schedule has that defined meaning wherever it is used in
this letter or in any schedule to this letter.
This letter is delivered to you in satisfaction of your requirement that
you receive it as a condition of making the advances contemplated by the Credit
Agreement and may be used by you only for that purpose. Without our written
consent: (i) no person other than you may rely on this letter for any purpose;
(ii) this letter may not be cited or quoted in any financial statement,
prospectus, private placement memorandum or other similar document; (iii) this
letter may not be cited or quoted in any other document or communication which
might encourage reliance upon this letter by any person or for any purpose
excluded by the restrictions in this paragraph; and (iv) copies of this letter
may not be furnished to anyone for purposes of encouraging such reliance.
Persons who subsequently become Lenders may rely on this letter as of the time
of its delivery on the date hereof as if this letter were addressed to them.
Very truly yours,
/s/ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
SCHEDULE A
GENERAL QUALIFICATIONS
The term "General Qualifications" as used in the letter to which this
----------------------
Schedule is attached ("our letter") means the Bankruptcy Exception.
----------
Bankruptcy and Insolvency Exception. Each of the opinions ("our opinions")
-----------------------------------
in our letter is subject to the effect of bankruptcy, insolvency,
reorganization, receivership, moratorium and other similar laws. This
exception includes:
(a) the Federal Bankruptcy Code and thus comprehends, among others,
matters of turn-over, automatic stay, avoiding powers, fraudulent
transfer, preference, discharge, conversion of a non-recourse
obligation into a recourse claim, limitations on ipso facto and anti-
assignment clauses and the coverage of pre-petition security
agreements applicable to property acquired after a petition is filed;
(b) all other Federal and state bankruptcy, insolvency, reorganization,
receivership, moratorium, arrangement and assignment for the benefit
of creditors laws that affect the rights of creditors generally or
that have reference to or affect only creditors of specific types of
debtors;
(c) state fraudulent transfer and conveyance laws; and
(d) judicially developed doctrines in this area, such as substantive
consolidation of entities and equitable subordination.
A-1
SCHEDULE B
ASSUMPTIONS
For purposes of the letter to which this Schedule is attached ("our
---
letter"), we have relied, without investigation, upon each of the following
------
assumptions:
1. Each natural person who is executing any Transaction Document on behalf of
our Client has sufficient legal capacity to enter into such Transaction
Document.
2. Each document submitted to us for review is accurate and complete, each such
document that is an original is authentic, each such document that is a copy
conforms to an authentic original, and all signatures (other than those of
or on behalf of our Clients) on each such document are genuine.
3. Each certificate obtained from a governmental authority relied on by us is
accurate, complete and authentic and all relevant official public records to
which each such certificate relates are accurate and complete.
4. There has not been any mutual mistake of fact or misunderstanding, fraud,
duress or undue influence.
5. All statutes, judicial and administrative decisions, and rules and
regulations of governmental agencies, in each of the jurisdictions upon
whose law our opinions are based are generally available (i.e., in terms of
access and distribution following publication or other release) to lawyers
practicing in that jurisdiction, and are in a format that makes legal
research reasonably feasible.
6. The constitutionality or validity of a relevant statute, rule, regulation or
agency action is not in issue.
7. Each of the Specified Agreements would be enforced as written, and our
Clients will not in the future take any discretionary action (including a
decision not to act) permitted under the Transaction Documents that would
result in a violation of law or constitute a violation of any Specified
Agreement.
8. Our Clients will obtain all permits and governmental approvals required in
the future, and will take all actions similarly required, relevant to the
subsequent consummation of the Transactions or performance of the
Transaction Agreements.
9. All parties to the Transactions will act in accordance with, and will
refrain from taking any action that is forbidden by, the terms and
conditions of the Transaction Documents.
B-1
10. Any information required to be disclosed to our Clients or their governing
bodies in connection with any matter relevant to any legal issue covered by
our opinions has been disclosed and no such disclosure contains any
relevant error or omission.
11. Insofar as any security interest is the subject of any of our opinions, the
grantor of such security interest has rights in the Collateral subject to
such security interest sufficient to support such security interest,
"value" (as defined in applicable Uniform Commercial Code) has been given
by you to the grantor of such security interest for such security interest
and the description of the Collateral subject to such security interest in
any Transaction Document (including without limitation any UCC financing
statement) reasonably describes such Collateral.
B-2
SCHEDULE C
EXCLUDED LAW AND LEGAL ISSUES
None of the opinions or advice contained in the letter to which this
Schedule is attached (herein called "our letter") covers or otherwise addresses
----------
any of the following legal issues:
1. except as set forth in paragraph 10 of our letter, Federal securities laws
and regulations administered by the Securities and Exchange Commission,
state "Blue Sky" laws and regulations, and laws and regulations relating to
commodity (and other) futures and indices and other similar instruments;
2. pension and employee benefit laws and regulations (e.g., ERISA);
3. Federal and state antitrust and unfair competition laws and regulations
(other than ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ compliance);
4. Federal laws, regulations, directives and executive orders that prohibit or
limit the enforceability of obligations based on attributes of the party
seeking enforcement (e.g., the Trading with the Enemy Act and the
International Emergency Economic Powers Act);
5. Federal and state laws and regulations concerning filing and notice
requirements (other than requirements applicable to charter-related
documents such as a certificate of merger and other than compliance with
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ requirements and other requirements prerequisite to
entering into the Credit Documents and borrowing and repaying the Loans
contemplated thereunder);
6. compliance with fiduciary duty requirements;
7. the statutes and ordinances, the administrative decisions and the rules and
regulations of counties, towns, municipalities and special political
subdivisions and judicial decisions to the extent that they deal with any
of the foregoing;
8. fraudulent transfer and fraudulent conveyance laws;
9. Federal and state environmental laws and regulations;
10. except as set forth in paragraph 9 of our letter, Federal and state tax
laws and regulations;
11. except as expressly set forth in paragraph 8 of our letter pertaining to
the perfection of security interests in certain trademarks, Federal
patent, copyright and trademark,
C-1
state trademark, and other Federal and state intellectual property laws and
regulations;
12. Federal and state health and safety laws and regulations (e.g., OSHA);
13. Federal and state labor laws and regulations;
14. Federal and state laws, regulations and policies concerning (i) national
and local emergency and (ii) possible judicial deference to acts of
sovereign states;
15. other Federal and state statutes of general application to the extent they
provide for criminal prosecution (e.g., mail fraud and wire fraud
statutes);
16. the effect of any law, regulation or order which hereafter becomes
effective;
17. title to any property or the priority of any security interest; and
18. except as expressly set forth in paragraph 8(a) or 8(b) of our letter,
the perfection of any security interest.
C-2
TRANSACTION DOCUMENT SCHEDULE
1. Credit Agreement
2. Revolving Credit Notes, dated as of the date hereof, issued by the Borrower
in favor of each Revolving Credit Lender.
3. Term Notes, dated as of the date hereof, issued by the Borrower in favor of
each Term Loan Lender.
4. Swingline Note, dated as of the date hereof, issued by the Borrower in
favor of the Swingline Lender.
5. Parent Guaranty, dated as of the date hereof, between The ▇▇▇▇▇▇▇▇
Companies, Inc. and First Union National Bank.
6. Pledge and Security Agreement, dated as of the date hereof by ▇▇▇▇▇▇▇▇
Publishing Company, L.L.C. in favor of First Union National Bank, as
Administrative Agent.
7. Parent Pledge and Security Agreement, dated as of the date hereof, by The
▇▇▇▇▇▇▇▇ Companies, Inc. in favor of First Union National Bank, as
Administrative Agent.
8. Collateral Assignment and Grant of Security Interest in Copyrights, dated
as of the date hereof, by ▇▇▇▇▇▇▇▇ Publishing Company, L.L.C. in favor of
First Union National Bank, as Administrative Agent.
9. Collateral Assignment and Grant of Security Interest in Patents and
Trademarks, dated as of the date hereof, by ▇▇▇▇▇▇▇▇ Publishing Company,
L.L.C. in favor of First Union National Bank, as Administrative Agent.
SCHEDULE OF SPECIFIED AGREEMENTS
1. Asset Purchase Agreement, dated as of August 15, 1996, by and between
Bright View Communications Group, Inc. and ▇▇▇▇▇▇▇▇ Publishing Company.
2. License Agreement, dated as of August 15, 1996, by and among ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ Publishing Company and Bright View Communications Group,
Inc.
3. Security Holders Agreement, dated as of September 30, 1996, among Borrower
(as successor to ▇▇▇▇▇▇▇▇ Holdings, L.L.C. ("Holdings")), Manager, ▇▇▇▇▇▇▇▇
--------
Investment Corp. ("PIC"), and certain holders of the securities of
---
Holdings, Manager and PIC.
4. Indenture, dated as of November 15, 1996, among the Borrower and ▇▇▇▇▇▇▇▇
Capital Corp., as Issuers, the guarantors named therein, and United States
Trust Company of New York, as trustee.
EXHIBIT I-2
[LETTERHEAD OF ▇▇▇▇▇▇ ▇▇▇▇▇▇ WHITE & ▇▇▇▇▇▇▇▇▇]
March 31, 1998
First Union National Bank, as Administrative Agent
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
and
the Lenders party to the Credit
Agreement referred to below
Re: Credit Agreement dated as of March 31, 1998
-------------------------------------------
Ladies and Gentlemen:
We have acted as counsel to ▇▇▇▇▇▇▇▇ Publishing Company, L.L.C., a Delaware
limited liability company (the "Borrower"), and The ▇▇▇▇▇▇▇▇ Companies, Inc., a
Delaware corporation ("Parent"), in connection with the Credit Agreement (the
"Credit Agreement"), dated as of March 31, 1998, among the Borrower, the banks
and financial institutions party thereto (collectively, the "Lenders"), First
Union National Bank, as a Lender ("First Union") and as administrative agent
(the "Administrative Agent") and the Documentation Agent, Syndication Agent and
Managing Agents referred to therein. The Borrower and Parent are collectively
referred to as the "Credit Parties." This opinion is rendered to you pursuant to
Section 4.1(a)(iv) of the Credit Agreement. Capitalized terms used without
definition in this opinion have the meanings given to them in the Credit
Agreement.
We do not generally represent the Borrower or Parent in connection with
their legal affairs. We have been retained by the Borrower and Parent solely for
the purpose of rendering this opinion and have not participated in the
negotiation or preparation of any of the documents relating to the transaction
which is the subject of this opinion.
First Union National Bank,
as Administrative Agent
March 31, 1998
Page 2
I.
We have assumed the authenticity of all records, documents and instruments
submitted to us as originals, the genuineness of all signatures, the legal
capacity of natural persons and the conformity to the originals of all records,
documents and instruments submitted to us as copies. We have based our opinion
upon our review of the following records, documents, instruments and
certificates and such additional certificates relating to factual matters as we
have deemed necessary or appropriate for our opinion:
(a) The Credit Agreement;
(b) The Fee Letter;
(c) The Parent Guaranty;
(d) The Parent Pledge and Security Agreement;
(e) The Borrower Pledge and Security Agreement;
(f) The Promissory Note, dated March 31, 1998, in the principal amount of
$10,000,000 (the "Swingline Note"), payable by the Borrower to First
Union;
(g) The Revolving Credit Notes, dated March 31, 1998, payable by the
Borrower to the Revolving Credit Lenders;
(h) The Term Notes, dated March 31, 1998, payable by the Borrower to the
Term Loan Lenders;
(i) A Financing Statement describing certain personal property of the
Borrower and naming the Borrower as debtor and the Lenders as secured
parties (the "Borrower Financing Statement");
(j) A Financing Statement describing certain personal property of Parent
and naming Parent as debtor and the Lenders as secured parties (the
"Parent Financing Statement");
(k) A Certificate of Good Standing relating to the Borrower issued by the
California Secretary of State, dated March 24, 1998; and
(l) A Certificate of Good Standing relating to Parent issued by the
California Secretary of State, dated March 25, 1998.
First Union National Bank,
as Administrative Agent
March 31, 1998
Page 3
Documents (a) through (h) are collectively referred to in this opinion as the
"Transaction Documents."
Our opinion expressed in Paragraph 1 of Part IV as to the good standing of
the Borrower and Parent under the laws of the State of California is based
solely upon the Certificates of Good Standing enumerated above. We have made no
additional investigation after the respective dates of those Certificates in
rendering our opinion expressed in Paragraph 1 of Part IV.
II.
We have also assumed the following:
A. Each of the Borrower and Parent has been duly organized and is validly
existing and in good standing under the laws of the State of Delaware.
B. Each of the Borrower and Parent has all requisite limited liability
company or corporate power and limited liability company or corporate
authority to enter into and perform each Transaction Document to which
it is a party, to own its properties and to carry on its business as,
to our knowledge, such business is now conducted.
C. Each of the Transaction Documents (i) has been duly authorized by all
necessary limited liability company or corporate action on the part of
each of the Borrower and Parent to the extent each is a party to that
Transaction Document and (ii) has been duly executed and delivered on
behalf of each of the Borrower and Parent to the extent each is a party
to that Transaction Document. Without limiting the foregoing, with
respect to the Transaction Documents to which the Borrower is a party,
the officer who signed the Transaction Documents on behalf of the
Borrower was authorized to sign for the Borrower. With respect to
Transaction Documents to which Parent is a party, the officer who
signed the Transaction Documents on behalf of Parent was authorized to
sign for Parent.
D. None of the Lenders is transacting intrastate business within the
meaning of Section 191 of the California Corporations Code, or any of
the Lenders which is transacting intrastate business within the meaning
of Section 191 of the California Corporations Code has obtained a
certificate of qualification as required by Section 2105 of the
California Corporations Code to transact intrastate business in
California and is not transacting any core banking business within the
meaning of Section 3800(b) of the California Financial Code except
First Union National Bank,
as Administrative Agent
March 31, 1998
Page 4
at a branch office established in accordance with federal law and the
law of the domicile of the bank.
E. First Union and each other Lender qualify for the exemption from the
otherwise applicable interest rate limitations of California law for
loans or forbearances by their status as either (a) a bank created and
operating under and pursuant to the laws of California or the United
States; (b) a foreign (other nation) bank (as defined in California
Financial Code Section 139.4) that at the time of the execution of the
Transaction Documents or the making of any loan thereunder (i) has
assets equal to at least one hundred million dollars, (ii) is licensed
to maintain an office in California, (iii) is licensed or otherwise
authorized by another state of the United States to maintain an agency
or branch office in that state or (iv) maintains a federal agency or
federal branch in any state of the United States or (c) a "foreign
(other state)" bank (as defined in California Financial Code Section
139.5) as provided by California Constitution, article XV, Section 1
and California Financial Code Sections 1716 and 3805; all loans under
the Transaction Documents will be made by the Lenders for their own
account or for the account of another person or entity that qualifies
for an exemption from the interest rate limitations of California law;
and there is no present agreement or plan, express or implied, on the
part of any of the Lenders to sell participations or any other
interest in the loans to be made under the Transaction Documents to
any person or entity other than a person or entity that also qualifies
for an exemption from the interest rate limitations of California law.
F. The Lenders have given value pursuant to the Transaction Documents and
the Borrower and Parent have rights in the personal property
collateral described in the Transaction Documents.
G. The descriptions of collateral contained in, or attached as schedules
to, the Transaction Documents sufficiently describe the collateral
intended to be covered by the Transaction Documents, except to the
extent the collateral described in the Transaction Documents refers to
"Accounts," "Equipment," "General Intangibles," "Instruments," or
"Inventory" and the parties to the Transaction Documents intend those
terms to have the meanings given to them in the California Uniform
Commercial Code (the "Code").
H. The Borrower Financing Statement and the Parent Financing Statement
will be duly filed in the office of the California Secretary of State
(the "Filing Office") in accordance with the provisions of the Code.
First Union National Bank,
as Administrative Agent
March 31, 1998
Page 5
I. The Borrower's chief executive office, within the meaning of Section
9103(3)(d) of the Code, is located in the State of California.
J. Parent's chief executive office, within the meaning of Section
9103(3)(d) of the Code, is located in the State of California.
K. First Union's chief executive office, within the meaning of Section
9103(3)(d) of the Code, is located in the State of North Carolina.
L. The membership interests of the Borrower (i) are not dealt in or
traded on any security exchange or in securities market, (ii) do not
by their terms expressly provide that they are securities governed by
Division 8 of the Code, (iii) are not investment company securities
and (iv) are not held in a securities account.
III.
We express no opinion as to:
A. The priority of any lien or security interest created, or purported to
be created, by any of the Transaction Documents.
B. Except as expressly stated in the opinion set forth in Paragraph 10 of
Part IV of this opinion, the applicable choice of law rules that may
affect (i) the interpretation or enforcement of any of the Transaction
Documents or (ii) the attachment, perfection or enforcement of any
lien or security interest created, or purported to be created, by any
of the Transaction Documents.
C. Any securities, anti-trust, tax, federal intellectual property,
trademark, land use, safety, environmental, hazardous materials,
insurance company or banking laws, rules or regulations or laws, rules
or regulations applicable to the Lenders by virtue of their status as
a financial institution engaged in business of a type exemplified by
the Credit Agreement.
D. The effect on the Borrower's obligations, and the Lenders' rights,
under the Transaction Documents of laws relating to fraudulent
transfers and fraudulent obligations set forth in Sections 544 and 548
of the federal Bankruptcy Code and Sections 3439 et seq. of the
California Civil Code.
This opinion is limited to the laws of the State of California, and we
disclaim any opinion as to the laws of any other jurisdiction. We further
disclaim any opinion as to any
First Union National Bank,
as Administrative Agent
March 31, 1998
Page 6
statute, rule, regulation, ordinance, order or other promulgation of any
regional or local governmental body or as to any related judicial or
administrative decision.
IV.
Based upon the foregoing and our examination of such questions of law as we
have deemed necessary or appropriate for our opinion, and subject to the
limitations and qualifications expressed below, it is our opinion that:
1. Each of the Borrower and Parent is duly qualified to do business and
is in good standing in the state of California.
2. If a court were to apply California law (notwithstanding the choice of
law provision in the Transaction Documents) to the Transaction
Documents, each Transaction Document to which any Credit Party is a
party is a valid and binding obligation of such Credit Party,
enforceable against such Credit Party in accordance with its terms,
subject, as to enforcement, (i) to bankruptcy, insolvency,
reorganization, arrangement, moratorium and other laws of general
applicability relating to or affecting creditors' rights and (ii) to
general principles of equity, whether such enforceability is
considered in a proceeding in equity or at law.
3. If a court were to apply California law (notwithstanding the choice of
law provision in the Borrower Pledge and Security Agreement) to the
Borrower Pledge and Security Agreement, a valid and enforceable
security interest in favor of the Lenders has attached under the Code
to the collateral described in the Borrower Pledge and Security
Agreement (other than letters of credit) consisting of personal
property to which a security interest may attach under Division 9 of
the Code.
4. The Borrower Financing Statement is in proper form for filing in the
Filing Office, and, upon due filing in such office, the security
interest created by the Borrower Pledge and Security Agreement in the
collateral described in the Borrower Financing Statement will be
perfected to the extent a security interest can be perfected in such
collateral under the Code by the filing of a financing statement in
the Filing Office.
5. If a court were to apply California law (notwithstanding the choice of
law provision in the Parent Pledge and Security Agreement) to the
Parent Pledge and Security Agreement, a valid and enforceable security
interest in favor of the
First Union National Bank,
as Administrative Agent
March 31, 1998
Page 7
Lenders has attached under the Code to the collateral described in the
Parent Pledge and Security Agreement (other than (i) letters of credit
and (ii) the Pledged Interests (as defined in paragraph IV. 7 below))
consisting of personal property and fixtures to which a security
interest may attach under Division 9 of the Code.
6. The Parent Financing Statement is in proper form for filing in the
Filing Office, and, upon due filing in such office, the security
interest created by the Parent Pledge and Security Agreement in the
collateral described in the Parent Financing Statement will be
perfected to the extent a security interest can be perfected in such
collateral under the Code by the filing of a financing statement in
the Filing Office.
7. The Parent Pledge and Security Agreement purports to grant to the
Lenders a valid and enforceable security interest in Parent's
membership interests in the Borrower (the "Pledged Interests"). We
have assumed that the Borrower is organized under the Delaware limited
liability company statute, that the membership interests of the
Borrower are (i) are not dealt in or traded on any security exchange
or in securities markets, (ii) do not by their terms expressly provide
that they are securities governed by Division 8 of the Code, (iii) are
not investment company securities and (iv) are not held in a
securities account. (See Paragraphs A and L of Part II of this
opinion.) If a court were to apply California law (notwithstanding the
choice of law provision in the Transaction Documents) to the
Transaction Documents then (i) Article 9 of the Code would govern
perfection of the Lenders' security interest and (ii) the Pledged
Interests are general intangibles.
If a court were to apply California law (notwithstanding the choice of
law provision in the Parent Pledge and Security Agreement) to the
Parent Pledge and Security Agreement, (i) a valid and enforceable
security interest in favor of the Lenders has attached under the Code
to the Pledged Interests described in the Parent Pledge and Security
Agreement, and (ii) the Parent Financing Statement is in proper form
for filing in the Filing Office and, upon due filing in such office,
the security interest created by the Parent Pledge and Security
Agreement in the Pledged Interests will be perfected.
8. If a court were to apply California law (notwithstanding the choice of
law provision in the Transaction Documents) to the Transaction
Documents, the payment of the interests, fees or other charges
provided for in the Transaction Documents does not violate any usury
law applicable to the Borrower.
First Union National Bank,
as Administrative Agent
March 31, 1998
Page 8
9. No California taxes (other than taxes based on income) or other
impositions are required to be paid in connection with the execution,
delivery and performance or filing of the Credit Agreement or the
other Transaction Documents, except for the filing fees in respect of
the UCC financing statements being executed in connection with the
Borrower Pledge and Security Agreement and the Parent Pledge and
Security Agreement. Other than the foregoing, no taxes (other than
taxes based on income) or other impositions of the state of California
will be imposed on or payable by, the Administrative Agent or the
Lenders, except as described in the foregoing sentence, as a
precondition to the enforcement of their rights and remedies
thereunder.
10. A provision in the Transaction Documents (the "Choice of Law Clause")
provides that the Transaction Documents will be governed by North
Carolina law without regard to North Carolina's conflict of law laws.
Section 1105 of the Code permits parties to a transaction subject to
the Code to agree to choose the application of the law of a state
which bears a "reasonable relation" to the transaction. Under Nedlloyd
Lines B.V. v. Superior Court, 3 Cal.4th 459 (1992) and ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇ Venture Partners v. American Medical International, Inc., 38
Cal.App.4th 1532 (1995), a California court applying the common law of
contracts in a contractual dispute will enforce a choice of law clause
in an agreement if (i) the chosen state bears a "substantial
relationship" to one or more of the parties to the transaction or the
transaction itself or there is any other "reasonable basis" for the
parties' choice of law, and (ii) the application of the chosen state's
law to a particular provision of the agreement does not violate a
fundamental public policy of the State of California. California
follows the Restatement (Second) of Conflict of Laws. Nedlloyd at 464-
65. Restatement (Second) Conflict of Laws, section 187 provides that a
"substantial relationship" to a chosen state exists if at least one
party has a principal place of business in that state. As mentioned,
we have assumed that First Union has its principal place of business
in the state of North Carolina. We note that the test under Section
1105 of the Code referring to "reasonable relation" differs somewhat
from the test in Nedlloyd referring to "substantial relationship."
Nedlloyd at 465, fn.2. Nevertheless, we believe, as the court
expressed in Nedlloyd, that these tests are similar, and we further
believe that a California court interpreting Section 1105 of the Code
would apply the "reasonable relation" test in a manner similar to the
analysis in Nedlloyd and ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇. Based on the fact that
First Union has its principal place of business in the state of North
Carolina, it is our opinion that a California court of competent
jurisdiction considering all of the relevant authority under
California law should hold that the Choice of Law Clause is
enforceable, except to the extent the enforcement of the Choice of Law
Clause would violate a
First Union National Bank,
as Administrative Agent
March 31, 1998
Page 9
fundamental policy of the State of California. See Paracor Finance,
Inc. v. General Electric Capital Corporation, 96 F.3d 1151 (9th Cir.
1996) and Govett American Endeavor Fund Ltd. ▇. ▇▇▇▇▇▇▇, 112 F.3d 1017
(9th Cir. 1997).
V.
If a court were to apply California law (notwithstanding the choice of law
provision in the Transaction Documents), we further advise you that:
A. As noted, the enforceability of the Transaction Documents is subject
to the effect of general principles of equity. These principles
include, without limitation, concepts of commercial reasonableness,
materiality and good faith and fair dealing. As applied to the
Transaction Documents, these principles will require the Lenders to
act reasonably, in good faith and in a manner that is not arbitrary
or capricious in the administration and enforcement of the
Transaction Documents and will preclude the Lenders from invoking
penalties for defaults that bear no reasonable relation to the damage
suffered or that would otherwise work a forfeiture.
B. The enforceability of the Transaction Documents is subject to the
effects of (i) Section 1102 of the Code, which provides that
obligations of good faith, diligence, reasonableness and care
prescribed by the Code may not be disclaimed by agreement, although
the parties may by agreement determine the standards by which the
performance of such obligations is to be measured if those standards
are not manifestly unreasonable, (ii) Section 1203 of the Code, which
imposes an obligation of good faith in the performance or enforcement
of a contract and (iii) Section 1670.5 of the California Civil Code,
which provides that a court may refuse to enforce, or may limit the
enforcement of, a contract or any clause of a contract that a court
finds as a matter of law to have been unconscionable at the time it
was made.
C. The effectiveness of indemnities, rights of contribution, exculpatory
provisions and waivers of the benefits of statutory provisions may be
limited on public policy grounds.
D. Section 1717 of the California Civil Code provides that, in any
action on a contract where the contract specifically provides that
attorneys' fees and costs incurred to enforce that contract shall be
awarded either to one of the parties or to the prevailing party, then
the party who is determined to be the party prevailing in the action,
whether that party is the party specified in the contract or not,
shall be entitled to reasonable attorneys' fees in addition to other
costs.
First Union National Bank,
as Administrative Agent
March 31, 1998
Page 10
E. Provisions of the Transaction Documents requiring that waivers must be
in writing may not be binding or enforceable if a non-executory oral
agreement has been created modifying any such provision or an implied
agreement by trade practice or course of conduct has given rise to a
waiver.
F. The enforceability of the Transaction Documents will be subject to
statutory and other legal requirements generally applicable to a
lender exercising remedies relating to its collateral; however, we do
not believe that these legal requirements render the remedies
contained in the Transaction Documents inadequate to afford
substantial realization by the Lenders on their collateral under the
Transaction Documents.
G. Perfection of a security interest in proceeds of any collateral may be
limited as provided in Section 9306 of the Code.
H. A security interest in collateral acquired after the respective dates
of the applicable Transaction Documents will not be perfected unless
the security interest attaches to such collateral.
I. The continued perfection of the security interests created by the
Transaction Documents and perfected by the filing of the Borrower
Financing Statement and the Parent Financing Statement depend upon the
filing of periodic continuation statements relating to the Borrower
Financing Statement and the Parent Financing Statement in accordance
with the Code and may depend upon (i) the continued location of the
collateral in the State of California; (ii) the continuation of the
Borrower's and Parent's present corporate names, identity and
corporate structure; and (iii) the continued location of the Borrower
and Parent in the state of California within the meaning of Section
9103(3)(d) of the Code.
J. The enforceability of the Parent Guaranty may be subject to California
statutory provisions and case law to the effect that a guarantor may
be exonerated if the beneficiary of the guaranty alters the original
obligation of the principal, fails to inform the guarantor of material
information pertinent to the principal or any collateral, elects
remedies that may impair the subrogation rights of the guarantor
against the principal or that may impair the value of any collateral,
fails to accord the guarantor the protections afforded a debtor under
Division 9 of the Code or otherwise takes any action that materially
prejudices the guarantor unless, in any such case, the guarantor
validly waives such rights or the consequences of any such action.
See, e.g., California Civil Code Section 2799 through Section 2856 and
related authority. While express and specific
First Union National Bank,
as Administrative Agent
March 31, 1998
Page 11
waivers of a guarantor's right to be exonerated, such as those
contained in the Parent Guaranty, are generally enforceable under
California law, we express no opinion as to whether the Parent
Guaranty contains an express and specific waiver of each exoneration
defense a guarantor might assert or as to whether each of the waivers
contained in the Parent Guaranty is fully enforceable.
K. The enforceability of the subordination provisions of a subordination
agreement may be limited by exoneration defenses similar to those that
may be asserted by a guarantor, unless the subordinated creditor
validly waives the defenses or the consequences of the kinds of
actions that would exonerate a guarantor.
VI.
This opinion is rendered to you in connection with the Credit Agreement and
is solely for your benefit. This opinion may not be relied upon by any other
person, firm, corporation or other entity without our prior written consent.
Persons that become parties to the Credit Agreement after the date of the Credit
Agreement may rely on this opinion only if they are financial institutions that
in the ordinary course of their business make loans the size of the loans
represented by the notes identified in documents (f), (g) and (h) of Part I of
this opinion. We disclaim any obligation to advise you of any change of law that
occurs, or any facts of which we become aware, after the date of this opinion.
Very truly yours,
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ White & McAnliffe
EXHIBIT J
---------
FORM OF
COMPLIANCE CERTIFICATE
THIS CERTIFICATE is given pursuant to SECTION 6.2(a) of the Credit
Agreement, dated as of March 31, 1998 (as amended, modified or supplemented from
time to time, the "Credit Agreement," the terms defined therein being used
herein as therein defined), among THE ▇▇▇▇▇▇▇▇ COMPANIES, INC. ("Parent"),
▇▇▇▇▇▇▇▇ PUBLISHING COMPANY, L.L.C. (the "Borrower"), certain banks and other
financial institutions from time to time parties thereto (the "Lenders"), First
Union National Bank, as Administrative Agent, Canadian Imperial Bank of
Commerce, as Syndication Agent, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc., as
Documentation Agent, and the Managing Agents named therein.
The undersigned hereby certifies that:
1. He is a duly elected Financial Officer of Parent.
2. Enclosed with this Certificate are copies of the financial statements
of Parent and its Subsidiaries as of _____________, and for the [________-month
period] [year] then ended, required to be delivered under SECTION
[6.1(a)][6.1(b)] of the Credit Agreement. Such financial statements have been
prepared in accordance with Generally Accepted Accounting Principles [(subject
to the absence of notes required by Generally Accepted Accounting Principles and
subject to normal year-end adjustments)]/1/ and fairly present the financial
condition of Parent and its Subsidiaries on a consolidated basis as of the date
indicated and the results of operation of Parent and its Subsidiaries on a
consolidated basis for the period covered thereby.
3. The undersigned has reviewed the terms of the Credit Agreement and has
made, or caused to be made under the supervision of the undersigned, a review in
reasonable detail of the transactions and condition of Parent and its
Subsidiaries during the accounting period covered by such financial statements.
4. The examination described in paragraph 3 above did not disclose, and
the undersigned has no knowledge of the existence of, any Default or Event of
Default during or at the end of the accounting period covered by such financial
statements or as of the date of this Certificate. [, except as set forth below.
Describe here or in a separate attachment any exceptions to paragraph 4
above by listing, in reasonable detail, the nature of the Default or Event of
Default, the period during which it existed and the action that Parent has taken
or proposes to take with respect thereto.]
5. Attached to this Certificate as Attachment A is a covenant compliance
worksheet reflecting the computation of the financial covenants set forth in
ARTICLE VII of the Credit Agreement as of the last day of the period covered by
the financial statements enclosed herewith.
---------------------------
/1/Insert in the case of quarterly financial statements.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Certificate as of the _______ day of _____________, ____.
THE ▇▇▇▇▇▇▇▇ COMPANIES, INC.
By: [signature of Financial Officer]
----------------------------------
Name: ________________________________
Title: _______________________________
--------------------------------------------------------------------------------
A. LEVERAGE RATIO
(SECTION 7.1 OF THE CREDIT AGREEMENT): NOT GREATER THAN ______: 1.0/2/
--------------------------------------------------------------------------------
(1) Consolidated Funded Debt as of the date
of determination:
(a) Aggregate amount of Funded Debt
of Parent and its Subsidiaries
as of the date of determination $
-------------
(b) Less: cash and cash equivalents
of Parent and its Subsidiaries
in excess of $5,000,000 as of the
date of determination ($ )
-------------
(c) Consolidated Funded Debt:
Subtract Line 1(b) from Line 1(a) $
=============
(2) Consolidated Operating Cash Flow
for the period of four consecutive
fiscal quarters ending on the date of
determination (from Box D, Line 5 below) $
=============
(3) Ratio of Consolidated Funded Debt to
Consolidated Operating Cash Flow:
Divide Line 1(c) by Line 2
=============
--------------------------------------------------------------------------------
--------------------------
/2/Refer to Section 7.1 of the Credit Agreement for the applicable maximum
Leverage Ratio as of the relevant date of determination.
--------------------------------------------------------------------------------
B. INTEREST COVERAGE RATIO
(SECTION 7.2 OF THE CREDIT AGREEMENT): NOT LESS THAN 2.5 : 1.0
--------------------------------------------------------------------------------
(1) Consolidated Operating Cash Flow
for the period of four consecutive
fiscal quarters ending on the date
of determination (from Box D, Line 5 below) $
=============
(2) Consolidated Interest Expense for such
period $
=============
(3) Interest Coverage Ratio:
Divide Line 1 by Line 2
=============
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
C. FIXED CHARGE COVERAGE RATIO
(SECTION 7.3 OF THE CREDIT AGREEMENT): NOT LESS THAN 1.10 : 1.0
--------------------------------------------------------------------------------
(1) Consolidated Operating Cash Flow
for the period of four consecutive
fiscal quarters ending on the date
of determination (from Box D, Line 5 below) $
============
(2) Fixed Charges:
(a) Consolidated Interest Expense for
such period $
-----------
(b) Amount of taxes actually paid by
Parent and its Subsidiaries during
such period $
-----------
(c) Capital Expenditures for such period $
-----------
(d) Aggregate amount of principal payments
on Funded Debt scheduled or required to
have been made by Parent and its
Subsidiaries during such period $
-----------
(e) Aggregate amount of cash dividends and
distributions made by Parent in respect
of its Capital Stock during such period $
-----------
(f) Fixed Charges:
Add Lines 2(a) through 2(e) $
============
(3) Fixed Charge Coverage Ratio:
Divide Line 1 by Line 2(e)
============
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
D. CONSOLIDATED OPERATING CASH FLOW
--------------------------------------------------------------------------------
(1) Consolidated Net Income for the period of
four consecutive fiscal quarters ending on
the date of determination $
========
(2) Additions to Consolidated Net Income (to the
extent taken into account in the calculation of
Consolidated Net Income for such period):
(a) Consolidated Interest Expense for such period $
--------
(b) Taxes accrued or paid by Parent and its
Subsidiaries during such period $
--------
(c) Depreciation and amortization for such period $
--------
(d) Extraordinary losses recognized by Parent
and its Subsidiaries during such period $
--------
(e) Other non-cash expenses or charges reducing
income for such period $
--------
(f) Add Lines 2(a) through 2(e) $
========
(3) Net Income plus Additions:
Add Lines (1) and 2(f) $
========
(4) Reductions from Consolidated Net Income (to the
extent taken into account in the calculation of
Consolidated Net Income for such period):
(a) Extraordinary gains recognized by Parent
and its Subsidiaries during such period $
--------
(b) Non-cash items increasing Consolidated Net
Income during such period $
--------
(c) Add Lines 4(a) and 4(b) ($ )
========
(5) Consolidated Operating Cash Flow:
Subtract Line 4(c) from Line 3 $
========
--------------------------------------------------------------------------------
EXHIBIT K
---------
FORM OF
ASSIGNMENT AND ACCEPTANCE
THIS ASSIGNMENT AND ACCEPTANCE (this "Assignment and Acceptance") is
made this _____ day of ____________, ____, by and between
_______________________________ (the "Assignor") and ________________________
(the "Assignee"). Reference is made to the Credit Agreement, dated as of March
31, 1998 (as amended, modified or supplemented from time to time, the "Credit
Agreement"), among The ▇▇▇▇▇▇▇▇ Companies, Inc., ▇▇▇▇▇▇▇▇ Publishing Company,
L.L.C. (the "Borrower"), certain banks and other financial institutions from
time to time parties thereto (the "Lenders"), First Union National Bank, as
Administrative Agent for the Lenders (the "Administrative Agent"), Canadian
Imperial Bank of Commerce, as Syndication Agent, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding,
Inc., as Documentation Agent, and the Managing Agents named therein. Unless
otherwise defined herein, capitalized terms used herein without definition shall
have the meanings given to them in the Credit Agreement.
The Assignor and the Assignee hereby agree as follows:
1. Assignment and Assumption. Subject to the terms and conditions hereof,
-------------------------
the Assignor hereby sells and assigns to the Assignee, and the Assignee hereby
purchases and assumes from the Assignor, without recourse to the Assignor and,
except as expressly provided herein, without representation or warranty by the
Assignor, the interest or interests as of the Effective Date (as hereinafter
defined) in and to all of the Assignor's rights and obligations under the Credit
Agreement and the other Credit Documents (in its capacity as a Lender
thereunder) with respect to each Class of Loans represented by the percentage
interest or interests specified with regard to such Class in Item 4 of Annex I
------ -------
(each such assigned interest, an "Assigned Share"), including, without
limitation, (i) in the case of Term Loans, the relevant Assigned Share of all
rights and obligations of the Assignor with respect to its Term Loan Commitment
(unless terminated), Term Note and Term Loans, and (ii) in the case of Revolving
Loans, the relevant Assigned Share of all rights and obligations of the Assignor
with respect to its Revolving Credit Commitment, Letter of Credit Exposure,
Revolving Credit Note and Revolving Loans.
2. The Assignor. The Assignor (i) represents and warrants that it is the
------------
legal and beneficial owner of each interest being assigned by it hereunder, that
each such interest is free and clear of any adverse claim, that as of the date
hereof the amount of its Commitments and outstanding Loans of each Class (and
Letter of Credit Exposure, if applicable) is as set forth in Item 4 of Annex I,
------ -------
and that after giving effect to the assignment provided for herein the
respective Commitments of the Assignor and the Assignee of each relevant Class
will be as set forth in Item 4 of Annex I, (ii) except as set forth in clause
------ -------
(i) above, makes no representation or warranty and assumes no responsibility
with respect to any statements, warranties or representations made in or in
connection with the Credit Agreement, any other Credit Document or any other
instrument or document furnished pursuant thereto or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement, any other Credit Document or any other instrument or document
furnished pursuant thereto, and (iii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or any of its Subsidiaries or the
performance or observance by the Borrower or any of its Subsidiaries of any of
their respective obligations under the Credit Agreement, any other Credit
Document or any other instrument or document furnished pursuant thereto.
3. The Assignee. The Assignee (i) represents and warrants that it is
------------
legally authorized to enter into this Assignment and Acceptance, (ii) confirms
that it has received a copy of the Credit Agreement, together with copies of the
financial statements most recently required to have been delivered under SECTION
6.1 of the Credit Agreement and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance, (iii) agrees that it will, independently and
without reliance upon the Administrative Agent, the Assignor or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Credit Agreement, (iv) confirms that it is an Eligible
Assignee, (v) appoints and authorizes the Administrative Agent to take such
actions as agent on its behalf under the Credit Agreement and the other Credit
Documents, and to exercise such powers and to perform such duties, as are
specifically delegated to the Administrative Agent by the terms thereof,
together with such other powers and duties as are reasonably incidental thereto,
and (vi) agrees that it will perform in accordance with their respective terms
all of the obligations that by the terms of the Credit Agreement are required to
be performed by it as a Lender. [To the extent legally entitled to do so, the
Assignee will deliver to the Administrative Agent, as and when required to be
delivered under the Credit Agreement, duly completed and executed originals of
the applicable tax withholding forms described in SECTION 2.17(d) of the Credit
Agreement]./1/
4. Effective Date. Following the execution of this Assignment and
--------------
Acceptance by the Assignor and the Assignee, an executed original hereof,
together with all attachments hereto, shall be delivered to each of the
Administrative Agent, the Issuing Lender and the Borrower (and also to the
Administrative Agent, the processing fee referred to in SECTION 11.7(a) of the
Credit Agreement). The effective date of this Assignment and Acceptance (the
"Effective Date") shall be the earlier of (i) the date of acceptance hereof by
the Administrative Agent, the Issuing Lender and the Borrower or (ii) the date,
if any, designated as the Effective Date in Item 5 of Annex I (which date shall
------ -------
be not less than five (5) Business Days after the date of execution hereof by
the Assignor and the Assignee). As of the Effective Date, (y) the Assignee
shall be a party to the Credit Agreement and, to the extent provided in this
Assignment and Acceptance, shall have the rights and obligations of a Lender
thereunder and under the other Credit Documents, and (z) the Assignor shall, to
the extent provided in this Assignment and Acceptance, relinquish its rights
(other than rights under the provisions of the Credit Agreement and the other
Credit Documents relating to indemnification or payment of fees, costs and
expenses, to the extent such rights relate to the time prior to the Effective
Date) and be released from its obligations under the Credit Agreement and the
other Credit Documents.
5. Payments; Settlement. On or prior to the Effective Date, in
--------------------
consideration of the sale and assignment provided for herein and as a condition
to the effectiveness of this Assignment and Acceptance, the Assignee will pay to
the Assignor an amount (to be confirmed between the Assignor and the Assignee)
that represents the Assigned Share of the principal amount of the Loans of each
relevant Class made by the Assignor and outstanding on the Effective Date
(together, if and to the extent the Assignor and the Assignee so elect, with the
Assigned Share of any related accrued but
-----------------------------
/1/ Insert if the Assignee is organized under the laws of a jurisdiction
outside the United States.
-2-
unpaid interest, fees and other amounts). From and after the Effective Date, the
Administrative Agent will make all payments required to be made by it under the
Credit Agreement in respect of each interest assigned hereunder (including,
without limitation, all payments of principal, interest and fees in respect of
the Assigned Share of the Assignor's Commitments and Loans assigned hereunder)
directly to the Assignee. The Assignor and the Assignee shall be responsible for
making between themselves all appropriate adjustments in payments due under the
Credit Agreement in respect of the period prior to the Effective Date. All
payments required to be made hereunder or in connection herewith shall be made
in Dollars by wire transfer of immediately available funds to the appropriate
party at its address for payments designated in Annex I.
-------
6. Governing Law. This Assignment and Acceptance shall be governed by,
-------------
and construed in accordance with, the internal laws of the State of North
Carolina (without regard to the conflicts of laws principles thereof).
7. Entire Agreement. This Assignment and Acceptance, together with the
----------------
Credit Agreement and the other Credit Documents, embody the entire agreement and
understanding between the parties hereto and supersede all prior agreements and
understandings of the parties, verbal or written, relating to the subject matter
hereof.
8. Successors and Assigns. This Assignment and Acceptance shall be
----------------------
binding upon, inure to the benefit of and be enforceable by the parties hereto
and their respective successors and assigns.
9. Counterparts. This Assignment and Acceptance may be executed in any
------------
number of counterparts and by different parties hereto on separate counterparts,
each of which, when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument.
-3-
IN WITNESS WHEREOF, the parties have caused this Assignment and Acceptance
to be executed by their duly authorized officers as of the date first above
written.
ASSIGNOR:
________________________________
By: ________________________________
Title: _____________________________
ASSIGNEE:
________________________________
By: ________________________________
Title: _____________________________
Accepted this _______ day of
______________, 19___:
FIRST UNION NATIONAL BANK, as
Administrative Agent and as
Issuing Lender
By: ________________________________
Title: _____________________________
Consented and agreed to:
▇▇▇▇▇▇▇▇ PUBLISHING COMPANY, L.L.C.
By: ________________________________
Title: _____________________________
-4-
ANNEX I
-------
1. Borrower: ▇▇▇▇▇▇▇▇ Publishing Company, L.L.C.
2. Name and Date of Credit Agreement:
Credit Agreement, dated as of March 31, 1998, among The ▇▇▇▇▇▇▇▇ Companies,
Inc., ▇▇▇▇▇▇▇▇ Publishing Company, L.L.C., certain Lenders from time to
time parties thereto, First Union National Bank, as Administrative Agent,
Canadian Imperial Bank of Commerce, as Syndication Agent, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Senior Funding, Inc., as Documentation Agent, and the Managing Agents named
therein.
3. Date of Assignment and Acceptance: ________________, 19___.
4. Amounts:
Amount of
Aggregate for Assigned Assigned
Assignor Share /2/ Share
------------- --------- ------------
(a) Term Loan Commitment $ ___________ _____% $ ___________
(b) Term Loans/3/ $ ___________ _____% $ ___________
(c) Revolving Credit Commitment $ ___________ _____% $ ___________
(d) Revolving Loans/3/ $ ___________ _____% $ ___________
(e) Letter of Credit Exposure $ ___________ _____% $ ___________
5. Effective Date: ________________________/4/
6. Addresses for Payments:
Assignor: _________________________________
_________________________________
_________________________________
Attention: __________________
Telephone: __________________
Telecopy: ___________________
Reference: __________________
-------------------------
/2/ Percentage taken to up to ten decimal places, if necessary.
/3/ Insert amounts outstanding as of the date of the Assignment and Acceptance.
/4/ Shall be a date not less than five Business Days after the date of the
Assignment and Acceptance.
-5-
Assignee: _________________________________
_________________________________
_________________________________
Attention: __________________
Telephone: __________________
Telecopy: ___________________
Reference: __________________
7. Addresses for Notices:
Assignor: _________________________________
_________________________________
_________________________________
Attention: ___________________
Telephone: ___________________
Telecopy: ____________________
Assignee: _________________________________
_________________________________
_________________________________
Attention: __________________
Telephone: __________________
Telecopy: ___________________
8. Lending Office of Assignee:
_________________________________
_________________________________
_________________________________
Attention: ___________________
Telephone: ___________________
Telecopy: ____________________
-6-
SCHEDULE 1.1
------------
COMMITMENTS
Term Loan Revolving Credit
Lender Commitment Commitment
------ ---------- ----------
First Union National Bank $75,000,000 $42,500,000
Canadian Imperial Bank of Commerce $37,500,000 $21,250,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc. $37,500,000 $21,250,000
Bank of America NT &SA $30,000,000
BankBoston, N.A. $30,000,000
The Bank of New York $30,000,000
----------- -----------
Total $150,000,000 $175,000,000
SCHEDULE 5.7
SUBSIDIARIES
------------
▇▇▇▇▇▇▇▇ Publishing Company, L.L.C.
-----------------------------------
Ownership: Parent owns 100% of the outstanding equity securities of
Publishing
▇▇▇▇▇▇▇▇ Capital Corp.
----------------------
Ownership: Borrower owns 100% of the outstanding capital stock
SCHEDULE 5.11
LEASES
------
1 Lease, dated Sept. 17, 1991, with Sage Realty Corporation, as Agent for
owner of premises
- 4th Floor of ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
2 Lease with Michigan International Speedway, dated January 16, 1996
- Terrace Suite for 2 NASCAR events during June & August of 1996
3. Agreement, dated Aug. 29, 1995, with National Hot Rod Association, Inc.
- VIP Hospitality Building, Suite 1.05 of Pomona Raceway, LA County
Fairplex, Pomona, California
4. Agreement with National Hot Rod Association, Inc.
- VIP Hospitality Building (suites 301 and 302), Atlanta Dragway, Commerce,
Georgia
5. Letter Agreement with National Hot Rod Association, Inc., dated Jan. 2, 1991
- West Finish Line Tower, Indianapolis Raceway Park, Indianapolis, Indiana.
6. Lease, dated December 1, 1994, with ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, Trustees of the R.E. and ▇.▇. ▇▇▇▇▇▇▇▇ Living Trust Dated Jan.
17, 1983
- ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
7. Lease, dated June 17, 1997, with ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Associates, LTD.
- Suite 1350, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
8. Lease, dated Feb. 1, 1993, with Concourse V Associates
- Suite 2950 and 24th Floor, Corporate Center Five, Five Concourse Pkwy,
▇▇▇▇▇▇ County, Georgia
9. Sublease, dated December 21, 1995, with Newport Mortgage Company, L.P., as
Sublessee
- Space on 24th Floor of Corporate Center Five, Five Concourse Pkwy, ▇▇▇▇▇▇
County, Georgia
10. License Agreement, dated as of August 17, 1990, with Madison Square Garden
Center, Inc. (as amended by letter agreements dated March 7, 1991 and
January 18, 1994)
- License to use Club Suite No. 1047
11. Hospitality Facilities License Agreement, dated July 23, 1993, with
International
Speedway Corporation
- ▇▇▇▇▇▇▇▇ Suite Q at Daytona International Speedway, Daytona, Florida
12. Lease, dated July 23, 1993, with Charlotte Motor Speedway, Inc.
- Suite 326 of ▇▇▇▇▇ Tower, Concord, North Carolina
13. Penthouse Suite Agreement, dated February 11, 1993, with Olympic Arenas,
Inc.
- ▇▇▇ ▇▇▇▇▇ Arena
14. Lease, dated as of September 30, 1996, with ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
- ▇▇▇ ▇. ▇▇ ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
15. Sublease, dated June 11, 1997, with The ▇▇▇▇▇ Company, as Sublessee
- Suite 105 and 115, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
16. Sublease, dated August 29, 1997, with Divesek Casting & Associates, as
Sublessee
- Suite LL100, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
17. Sublease, dated August 19, 1997, with Airway Capital Inc., ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, as Sublessee
-Suite 200, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
18. Sublease dated July 1, 1997, with Metro Traffic Control, Inc., as Sublessee
- 4th and 5th Floors, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
19. Lease, dated February 21, 1997, with KMS Partnership
- Suite 100, 5350 Manhattan Circle, Boulder, Colorado
20. Lease, dated March 11, 1997, Goldmick LLC and ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇.
- 2nd through 4th Floors, ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
21. Lease, dated February 12, 1998, with HBP, II, LLC and Medical Village, LTO
- ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, #▇▇ & #▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
22. Sublease, dated December 23, 1997, with Sage Realty Corp., as Sublessee
- ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
23. Sublease, dated November 10, 1997, with Liberty Mutual Insurance Company as
Sublessee
- 6th Floor, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
24. Sublease, dated October 10, 1997, with TransWestern Publishing Company,
L.P.
- ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
SCHEDULE 5.17
INSURANCE
---------
See attached certificate of insurance.
▇▇▇▇▇(TM) EVIDENCE OF PROPERTY INSURANCE /CSR/ /XD/ DATE (MM/DD/YY)
----- 03/25/98
--------
THIS IS EVIDENCE THAT INSURANCE AS IDENTIFIED BELOW HAS BEEN ISSUED, IS IN
FORCE, AND CONVEYS ALL THE RIGHTS AND PRIVILEGES AFFORDED UNDER THIS POLICY.
----------------------------------------------------------------------------------------------------------------------
PRODUCER PHONE/FAX COMPANY
(A/C, No, Ext):847-685-6000 /▇▇▇-▇▇▇-▇▇▇▇
------------------------------------------
American & Foreign
Lockton Companies/Chicago Insurance Company
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
----------------------------------------------------
CODE: SUB CODE:
--------------------------- ------------------------
AGENCY
CUSTOMER ID #: PETPU01
---------------------------------------------------- -----------------------------------------------------------------
INSURED LOAN NUMBER POLICY NUMBER
▇▇▇▇▇▇▇▇ Publishing Company, ASV0150489
-----------------------------------------------------------------
L.L.C. EFFECTIVE DATE EXPIRATION DATE CONTINUED UNTIL
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 03/01/98 04/01/99 [_] TERMINATED IF CHECKED
▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇-▇▇▇▇ -----------------------------------------------------------------
THIS REPLACES PRIOR EVIDENCE DATED:
----------------------------------------------------------------------------------------------------------------------
PROPERTY INFORMATION
LOCATION/DESCRIPTION
001
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇-▇▇▇▇
----------------------------------------------------------------------------------------------------------------------
COVERAGE INFORMATION
COVERAGE/PERILS/FORMS AMOUNT OF INSURANCE DEDUCTIBLE
----------------------------------------------------------------------------------------------------------------------
Blanket Contents Incl. Stock 15,035,000 10,000
EDP Loss Limit 1,500,000 1,000
Business Income/Extra Expense 16,250,000
Automatic Coverage for Newly Acquired Property 5,000,000
Personal Property of Others 1,000,000
Off Premises Services 500,000
Property in Transit 100,000
Any Other Location 500,000
Contingent Business Income 1,000,000
Accounts Receivable 1,000,000
Valuable Papers 500,000
Special Form/Agreed Amount
Replacement Cost Valuation
----------------------------------------------------------------------------------------------------------------------
REMARKS (Including Special Conditions)
First Union National Bank, as Administrative Agent, ATIMA,
Comm Ins 5892525005, is named as Loss Payee for the coverages afforded
on this certificate.
Additional Named insureds: The ▇▇▇▇▇▇▇▇ Companies, Inc.; ▇▇▇▇▇▇▇▇
Holdings, L.L.C.
----------------------------------------------------------------------------------------------------------------------
CANCELLATION
THE POLICY IS SUBJECT TO THE PREMIUMS, FORMS, AND RULES IN EFFECT FOR EACH POLICY PERIOD. SHOULD THE
POLICY BE TERMINATED, THE COMPANY WILL GIVE THE ADDITIONAL INTEREST IDENTIFIED BELOW 30 DAYS
-------
WRITTEN NOTICE, AND WILL SEND NOTIFICATION OF ANY CHANGES TO THE POLICY THAT WOULD AFFECT THAT
INTEREST, IN ACCORDANCE WITH THE POLICY PROVISIONS OR AS REQUIRED BY LAW.
----------------------------------------------------------------------------------------------------------------------
ADDITIONAL INTEREST
NAME AND ADDRESS [_] MORTGAGEE [_] ADDITIONAL INSURED
[X] LOSS PAYEE [_]
First Union Nat'l Bank ------------------------------------------------------------------
Administrative Agnt, ATIMA LOAN #
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇./▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇-▇▇▇▇ ------------------------------------------------------------------
AUTHORIZED REPRESENTATIVE
/s/ ILLEGIBLE
▇▇▇▇▇ 27 (3/93) ▇▇▇▇▇ CORPORATION 1993
----------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇(TM) CERTIFICATE OF LIABILITY INSURANCE DATE (MM/DD/YY)
----- 03/25/98
--------------------------------------------
PRODUCER THIS CERTIFICATE IS ISSUED AS A MATTER OF
INFORMATION ONLY AND CONFERS NO RIGHTS UPON
Lockton Companies/Chicago THE CERTIFICATE HOLDER. THIS CERTIFICATE
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ DOES NOT AMEND, EXTEND OR ALTER THE
▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ COVERAGE AFFORDED BY THE POLICIES BELOW.
--------------------------------------------
COMPANIES AFFORDING COVERAGE
--------------------------------------------
COMPANY
Phone No. ▇▇▇-▇▇▇-▇▇▇▇ Fax No. ▇▇▇-▇▇▇-▇▇▇▇ A American & Foreign Insurance
------------------------------------------------------------------------------------------------------------------------------------
INSURED COMPANY
B Royal Insurance Company
▇▇▇▇▇▇▇▇ Publishing Company, --------------------------------------------
L.L.C. COMPANY
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ C National Surety Corp.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ --------------------------------------------
▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇-▇▇▇▇ COMPANY
D Federal Insurance Co.
------------------------------------------------------------------------------------------------------------------------------------
COVERAGES
THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE
INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED, NOTWITHSTANDING ANY REQUIREMENT, TERM
OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY
BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS
SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY
HAVE BEEN REDUCED BY PAID CLAIMS.
------------------------------------------------------------------------------------------------------------------------------------
CO TYPE OF INSURANCE POLICY NUMBER POLICY EFFECTIVE POLICY EXPIRATION LIMITS
LTR DATE (MM/DD/YY) DATE (MM/DD/YY)
------------------------------------------------------------------------------------------------------------------------------------
GENERAL LIABILITY GENERAL AGGREGATE $ 2,000,000
----------------------------------
A [X] COMMERCIAL GENERAL LIABILITY ASV015048 03/01/98 04/01/99 PRODUCTS-COMP/OP AGG $ 1,000,000
----------------------------------
[_][_] CLAIMS MADE [X] OCCUR PERSONAL & ADV INJURY $ 1,000,000
----------------------------------
[_] OWNER'S & CONTRACTOR'S PROT EACH OCCURRENCE $ 1,000,000
----------------------------------
[_] ___________________________ FIRE DAMAGE (Any one
fire) $ 100,000
----------------------------------
[_] MED EXP (Any one
person) $ 0
------------------------------------------------------------------------------------------------------------------------------------
AUTOMOBILE LIABILITY COMBINED SINGLE LIMIT $ 1,000,000
A [X] ANY AUTO ASV015048 03/01/98 04/01/99 ----------------------------------
[_] ALL OWNED AUTOS BODILY INJURY
(Per person) $
[_] SCHEDULED AUTOS ----------------------------------
BODILY INJURY
(Per accident) $
[_] HIRED AUTOS ----------------------------------
[_] NON-OWNED AUTOS PROPERTY DAMAGE $
[_] ___________________________
[_]
------------------------------------------------------------------------------------------------------------------------------------
GARAGE LIABILITY AUTO ONLY - EA
ACCIDENT $
[_] ANY AUTO ----------------------------------
[_] ___________________________ OTHER THAN AUTO ONLY:
----------------------------------
[_] EACH ACCIDENT $
----------------------------------
AGGREGATE $
------------------------------------------------------------------------------------------------------------------------------------
EXCESS LIABILITY EACH OCCURRENCE $25,000,000
D [X] UMBRELLA FORM 79753098 03/01/98 04/01/99 ----------------------------------
[_] OTHER THAN UMBRELLA FORM AGGREGATE $25,000,000
----------------------------------
$
------------------------------------------------------------------------------------------------------------------------------------
WORKERS COMPENSATION AND WC STATU- OTH-
EMPLOYERS' LIABILITY TORY LIMITS ER
B ----------------------------------
THE PROPRIETOR/ [_] INCL PCS345892 03/01/98 04/01/99 EL EACH ACCIDENT $ 1,000,000
----------------------------------
PARTNERS/EXECUTIVE EL DISEASE - POLICY
OFFICERS ARE: [_] EXCL LIMIT $ 1,000,000
----------------------------------
EL DISEASE - EA
EMPLOYEE $ 1,000,000
------------------------------------------------------------------------------------------------------------------------------------
OTHER
C Excess Liability XXK83308809 03/01/98 04/01/99 Ea Occ 25,000,000
Aggreg 25,000,000
------------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/SPECIAL ITEMS
First Union National Bank as Administrative Agent is named as Additional
Insured and Loss Payee with respects to the General
Liability and Umbrella coverages afforded on this certificate.
Additional Named Insured: The ▇▇▇▇▇▇▇▇ Companies, Inc.;
▇▇▇▇▇▇▇▇ Holdings, L.L.C.
------------------------------------------------------------------------------------------------------------------------------------
CERTIFICATE HOLDER CANCELLATION
FIRUN01 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE
First Union National Bank EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL
as Administrative Agnt, ATIMA 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT,
One First Union Center 5th Flr ----
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ BUT FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR
▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇-▇▇▇▇ LIABILITY OF ANY KIND UPON THE COMPANY, ITS AGENTS OR
REPRESENTATIVES.
--------------------------------------------------------------------
AUTHORIZED REPRESENTATIVE
/s/ ILLEGIBLE
▇▇▇▇▇ 25-S (1/95) ▇▇▇▇▇ CORPORATION 1988
------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE 5.18
CERTAIN CONTRACTS
-----------------
1. Lease, dated Sept. 17, 1991, with Sage Realty Corporation, as Agent for
owner of premises
- 4th Floor of ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
2. Letter Agreement with National Hot Rod Association, Inc., dated Jan. 2,
1991
- West Finish Line Tower, Indianapolis Raceway Park, Indianapolis, Indiana.
3. Lease, dated December 1, 1994, with ▇▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, Trustees of the R.E. and ▇.▇. ▇▇▇▇▇▇▇▇ Living Trust Dated Jan.
17, 1983
- ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
4. Lease, dated June, 17, 1997, with ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Associates, LTD.
- Suite 1350, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
5. Agreement, dated April 8, 1991, with PDC Business Systems, Inc.
- Development of Open Options Ad Management System
6. Distribution Agreement, dated January 10, 1994, with Warner Publisher
Services, Inc.
- wholesale distribution of Company titles
7. Distribution Agreement, dated October 18, 1995, with Worldwide Distribution
Services
- Distribution of Company titles to ▇▇▇▇▇▇ and ▇▇▇▇▇
8. Publisher Distribution Agreement, dated May 21, 1996, with Retail Vision,
dated May 21, 1996,
- Distribution of Company titles to Blockbuster Music Stores
9. Publisher Distribution Agreement, dated April 22, 1996, with Retail Vision,
dated April 22, 1996,
- Distribution of Company titles to Wet Seal/Contempo Casuals.
10. Circulation Fulfillment Service Agreement, dated September 1, 1995, with
NeoData Services, Inc.
11. Agreement, dated December, 1981, with Compuname, Inc.
- Management of Company's lists of active and expired subscribers
12. Agreements, dated May 3, 1996, with World Color Press, Inc.
- Paper purchasing program
13. Agreement, dated December 19, 1995, with World Color Press, Inc., as
modified by the Agreement re Paper Supply for Periodicals Produced by World
Color Press, Inc., dated May 3, 1996
- Printing Services for certain of Company's titles
14. Prepress Services Agreement, dated February 26, 1996 with World Color
Press, Inc.
15. Agreement with Quark, Inc., dated May 6, 1996
16. Motor Trend Letter of Agreement with RTM III Television Productions, Inc.,
dated May 1, 1995
- Use of title "Motor ▇▇▇▇▇ ▇▇"
▇▇. Agreement with RTM Productions, Inc., dated May 28, 1996
- Cablecast and TV rights to use the magazine title "Hot Rod" and similar
rights with respect to certain APG Special Events
18. Hospitality Facilities License Agreement, dated July 23, 1993, with
International Speedway Corporation
- ▇▇▇▇▇▇▇▇ Suite Q at Daytona International Speedway, Daytona, Florida
19. Asset Sale Agreement with World Color Press, Inc.
- Sale to World Color Press, Inc. of assets relating to pre-press services
provided by the Company's Viking Color Department
20. Lease, dated as of September 30, 1996, with ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
- ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
21. Employment Agreement, dated as of August 15, 1996, between Parent
Communication Group, Inc. and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇.
22. License Agreement, dated as of August 15, 1996, between ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Parent Communication Group, Inc. and ▇▇▇▇▇▇▇▇ Publishing Company
- Right to use names "▇▇▇▇▇▇▇▇" and "▇▇▇▇▇▇▇▇ Publishing Company" and
derivatives thereof
23. Executive Securities Purchase and Employment Agreement, dated as of
September 30, 1996, by and among Parent, Holdings, the Borrower and ▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇. Executive Securities Purchase and Employment Agreement, dated as of
September 30, 1996, by and among Parent, Holdings, the Borrower and ▇▇▇▇
▇▇▇▇▇▇
25. Indenture, dated as of November 15, 1996, by and among Holdings, Borrower,
▇▇▇▇▇▇▇▇
Capital Corp. and United States Trust Company of New York, as
trustee
26. Lease, dated March 11, 1997, Goldmick LLC and ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇.
- 2nd through 4th Floors, ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
27. Lease, dated February 21, ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
- ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Circle, Boulder, Colorado
28. Agreement, dated September 1, 1997, with NASCAR
- Sublicense to use trademarks
29. Agreement, dated June 25, 1997, with Kudzu LLC
- Right to use names, trademarks and logotypes of certain "APG" magazines
30. Agreement, dated July 7, 1997, with Bethesda Softworks
- Right to use name, logo, symbol and trademark to Hot Rod magazine
31. Agreement, dated February 1, 1997, with Racing Champions
- Right to use Motor Trend logo and name
32. Agreement, dated October 1, 1996, with Racing Champions
- Right to use Hot Rod name, logo, covers and images
33. Agreement, dated April 25, 1997, with National Shooting Sports Foundation
(NSSF)
- Right to publish trade publications
34. Agreement, dated September 9, 1997, with Fun Karts, Inc.
- Right to use name, logo, symbol and trademark to Hot Rod Magazine
35. Agreement, dated February 15, 1998, with Fotozines, Inc.
- Right to use trademarks
36. Agreement, dated August 20, 1997, with Troll Communications, LLC
- Rights to use All About You and limited use of Teen
37. Agreement, dated October 7, 1997, with MBI Publishing
- Rights to use Hot Rod Magazine
38. Sponsorship agreement, dated November 10, 1997, with Interstate Battery
Systems of America, Inc.
- Sponsor the ▇▇▇ ▇▇▇▇▇ Racing Team
39. Agreement, dated December 8, 1997, with JH Design
- Right to use names, trademarks and logo types of Hot Rod Magazine
40. Agreement, dated December 8, 1997, with Universal Technical Institute, Inc.
- Right to use name, trademarks and logo types of Hot Rod Magazine
41. Agreement, dated October 15, 1997, with Cartech, Inc.
- Right to use magazine titles, technical articles and accompanying
photographs and charts of certain "APG" magazines
42. Agreement, dated July 31, 1997, with Team Line
- Right to use names, trademarks and logo types of various "POA" magazines
SCHEDULE 5.19
CAPITALIZATION
--------------
BORROWER:
--------
------------------------------------------------------------------
HOLDER MEMBERSHIP PERCENTAGE
------------------------------- -------------------------------
------------------------------------------------------------------
Parent 100%
------------------------------------------------------------------
▇▇▇▇▇▇▇▇ CAPITAL CORP.:
----------------------
------------------------------------------------------------------
HOLDER SHARES OF COMMON STOCK
------------------------------- -------------------------------
------------------------------------------------------------------
Borrower 1,000
------------------------------------------------------------------
Total Authorized 1,000
------------------------------------------------------------------
SCHEDULE 8.3
LIENS
-----
None.
SCHEDULE 8.4
SCHEDULED TITLES
----------------
None.
SCHEDULE 8.5
INVESTMENTS
-----------
1. Promissory Note, dated as of September 30, 1996, from ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
in favor of Parent in the amount of $8,000
2. Promissory Note, dated as of September 30, 1996, from ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
in favor of Holdings in the amount of $792,000
3. Promissory Note, dated as of September 30, 1996, from ▇▇▇▇ ▇▇▇▇▇▇ in favor
of Parent in the amount of $7,500
4. Promissory Note, dated as of September 30, 1996, from ▇▇▇▇ ▇▇▇▇▇▇ in favor
of Holdings in the amount of $742,500
5. Promissory Note dated as of January 27, 1997, from ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ in favor
of Parent in the amount of $2,000
6. Promissory Note dated as of January 27, 1997, from ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ in favor
of Holdings in the amount of $198,000
SCHEDULE 8.7
TRANSACTIONS WITH AFFILIATES
----------------------------
1. Lease, dated December 1, 1994, with ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, Trustees of the R.E. and ▇.▇. ▇▇▇▇▇▇▇▇ Living Trust Dated Jan.
17, 1983
- ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
2. Lease with ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
- ▇▇▇ ▇. ▇▇ ▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
3. Employment Agreement, dated as of August 15, 1996, between Parent
Communication Group, Inc. and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
4. License Agreement, dated as of August 15, 1996, between ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Parent Communication Group, Inc. and ▇▇▇▇▇▇▇▇ Publishing Company
- Right to use names "▇▇▇▇▇▇▇▇" and "▇▇▇▇▇▇▇▇ Publishing Company" and
derivatives thereof
5. Executive Securities Purchase and Employment Agreement, dated as of
September 30, 1996, by and among Parent, Holdings, the Borrower and ▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇. Executive Securities Purchase and Employment Agreement, dated as of
September 30, 1996, by and among Parent, Holdings, the Borrower and ▇▇▇▇
▇▇▇▇▇▇
7. Executive Securities Purchase and Employment Agreement, dated as of January
27, 1997, by and among Parent, Holdings, the Borrower and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇