EXHIBIT 4.4
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CREDIT AGREEMENT
among
▇▇▇▇▇▇-▇▇▇▇▇▇ HOLDING, INC.,
▇▇▇▇▇▇-▇▇▇▇▇▇ CORPORATION,
VARIOUS LENDING INSTITUTIONS,
and
BANKERS TRUST COMPANY,
AS AGENT
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Dated as of October 2, 1996
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$140,000,000
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TABLE OF CONTENTS
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SECTION 1. Amount and Terms of Credit...................................... 1
1.01 Commitments..................................................... 1
1.02 Minimum Borrowing Amounts, etc.................................. 4
1.03 Notice of Borrowing............................................. 4
1.04 Disbursement of Funds........................................... 5
1.05 Notes........................................................... 6
1.06 Conversions..................................................... 7
1.07 Pro Rata Borrowings............................................. 8
1.08 Interest........................................................ 8
1.09 Interest Periods................................................ 9
1.10 Increased Costs, Illegality, etc................................ 10
1.11 Compensation.................................................... 12
1.12 Change of Lending Office........................................ 13
1.13 Replacement of Banks............................................ 13
SECTION 2. Letters of Credit............................................... 14
2.01 Letters of Credit............................................... 14
2.02 Letter of Credit Requests;
Notices of Issuance............................................. 16
2.03 Agreement to Repay Letter
of Credit Payments.............................................. 16
2.04 Letter of Credit
Participations.................................................. 17
2.05 Increased Costs................................................. 19
SECTION 3. Fees; Commitments............................................... 20
3.01 Fees............................................................ 20
3.02 Voluntary Termination or Reduction of Total Unutilized
Revolving Loan Commitment.................................... 21
3.03 Mandatory Adjustments of Commitments, etc....................... 21
SECTION 4. Payments........................................................ 22
4.01 Voluntary Prepayments........................................... 22
4.02 Mandatory Prepayments........................................... 23
4.03 Method and Place of Payment..................................... 29
4.04 Net Payments.................................................... 30
SECTION 5. Conditions Precedent............................................ 32
5.01 Execution of Agreement; Notes................................... 32
5.02 No Default; Representations and Warranties...................... 32
5.03 Officer's Certificate........................................... 32
5.04 Opinions of Counsel............................................. 32
(i)
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5.05 Corporate Proceedings........................................... 32
5.06 Adverse Change, etc............................................. 33
5.07 Litigation...................................................... 33
5.08 Approvals....................................................... 33
5.09 Consummation of the Transaction................................. 34
5.10 Security Documents.............................................. 35
5.11 Subsidiary Guaranty............................................. 36
5.12 Mortgages; Title Insurance; Surveys, etc........................ 36
5.13 Plans; Collective Bargaining Agreements; Existing Indebtedness
Agreements; Shareholders' Agreements; Management
Agreements; Employment Agreements; Tax Allocation
Agreements; Material Contracts.............................. 38
5.14 Solvency Certificate; Environmental Analyses; Insurance
Analyses; Financial Statements.............................. 39
5.15 Pro Forma Balance Sheets........................................ 40
5.16 Projections..................................................... 40
5.17 Existing Indebtedness........................................... 40
5.18 Payment of Fees................................................. 40
5.19 Notice of Borrowing; Letter of Credit Request................... 40
SECTION 6. Representations, Warranties and Agreements...................... 41
6.01 Corporate Status................................................ 41
6.02 Corporate Power and Authority................................... 41
6.03 No Violation.................................................... 41
6.04 Litigation...................................................... 42
6.05 Use of Proceeds; Margin Regulations............................. 42
6.06 Governmental Approvals.......................................... 42
6.07 Investment Company Act.......................................... 42
6.08 Public Utility Holding Company Act.............................. 43
6.09 True and Complete Disclosure.................................... 43
6.10 Financial Condition; Financial Statements....................... 43
6.11 Security Interests.............................................. 44
6.12 Representations and Warranties in Other Documents............... 45
6.13 Transaction..................................................... 45
6.14 Special Purpose Corporation..................................... 45
6.15 Compliance with ERISA........................................... 46
6.16 Capitalization.................................................. 47
6.17 Subsidiaries.................................................... 47
6.18 Intellectual Property........................................... 47
6.19 Compliance with Statutes, etc................................... 48
6.20 Environmental Matters........................................... 48
6.21 Properties...................................................... 49
6.22 Labor Relations................................................. 49
(ii)
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6.23 Tax Returns and Payments........................................ 49
6.24 Existing Indebtedness........................................... 50
6.25 Subordination................................................... 50
SECTION 7. Affirmative Covenants........................................... 50
7.01 Information Covenants........................................... 50
7.02 Books, Records and Inspections.................................. 53
7.03 Insurance....................................................... 54
7.04 Payment of Taxes................................................ 54
7.05 Corporate Franchises............................................ 54
7.06 Compliance with Statutes, etc................................... 54
7.07 Compliance with Environmental Laws.............................. 55
7.08 ERISA........................................................... 55
7.09 Good Repair..................................................... 56
7.10 End of Fiscal Years; Fiscal Quarters............................ 56
7.11 Additional Security; Further Assurances......................... 56
7.12 Interest Rate Protection........................................ 57
7.13 Register........................................................ 57
7.14 Maintenance of Corporate Separateness........................... 58
7.15 Foreign Subsidiaries Security................................... 58
7.16 Contributions; Payments......................................... 59
7.17 Name Changes.................................................... 60
SECTION 8. Negative Covenants.............................................. 60
8.01 Changes in Business............................................. 60
8.02 Consolidation, Merger, Sale or Purchase of Assets, etc.......... 61
8.03 Liens........................................................... 66
8.04 Indebtedness.................................................... 68
8.05 Advances, Investments and Loans................................. 70
8.06 Dividends, etc.................................................. 74
8.07 Transactions with Affiliates.................................... 76
8.08 Capital Expenditures............................................ 77
8.09 Minimum Consolidated EBITDA..................................... 78
8.10 Interest Coverage Ratio......................................... 79
8.11 Leverage Ratio.................................................. 79
8.12 Limitation on Voluntary Payments and Modifications
of Indebtedness; Modifications of Certificate of
Incorporation, By-Laws and Certain Other Agreements;
Issuance of Capital Stock; etc.............................. 80
8.13 Limitation on Certain Restrictions on Subsidiaries............... 80
8.14 Limitation on the Creation of Subsidiaries....................... 81
8.15 Seller Subordinated Note......................................... 81
(iii)
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SECTION 9. Events of Default............................................. 81
9.01 Payments...................................................... 82
9.02 Representations, etc.......................................... 82
9.03 Covenants..................................................... 82
9.04 Default Under Other Agreements................................ 82
9.05 Bankruptcy, etc............................................... 82
9.06 ERISA......................................................... 83
9.07 Security Documents............................................ 83
9.08 Guaranties.................................................... 84
9.09 Judgments..................................................... 84
9.10 Ownership..................................................... 84
SECTION 10. Definitions................................................... 84
SECTION 11. The Agent..................................................... 113
11.01 Appointment................................................... 113
11.02 Delegation of Duties.......................................... 113
11.03 Exculpatory Provisions........................................ 113
11.04 Reliance by Agent............................................. 114
11.05 Notice of Default............................................. 114
11.06 Non-Reliance on Agent and Other Banks......................... 115
11.07 Indemnification............................................... 115
11.08 Agent in its Individual Capacity.............................. 116
11.09 Holders....................................................... 116
11.10 Resignation of the Agent; Successor Agent..................... 116
SECTION 12. Miscellaneous................................................. 117
12.01 Payment of Expenses, etc...................................... 117
12.02 Right of Setoff, Collateral Matters........................... 117
12.03 Notices....................................................... 118
12.04 Benefit of Agreement.......................................... 119
12.05 No Waiver; Remedies Cumulative................................ 120
12.06 Payments Pro Rata............................................. 121
12.07 Calculations; Computations.................................... 121
12.08 Governing Law; Submission to Jurisdiction; Venue.............. 122
12.09 Counterparts.................................................. 122
12.10 Effectiveness................................................. 122
12.11 Headings Descriptive.......................................... 123
12.12 Amendment or Waiver; etc...................................... 123
12.13 Survival...................................................... 124
12.14 Domicile of Loans............................................. 124
12.15 Confidentiality............................................... 124
12.16 Waiver of Jury Trial.......................................... 125
(iv)
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SECTION 13. Holdings Guaranty.............................................. 125
13.01 The Guaranty................................................... 125
13.02 Bankruptcy..................................................... 126
13.03 Nature of Liability............................................ 126
13.04 Independent Obligation......................................... 126
13.05 Authorization.................................................. 127
13.06 Reliance....................................................... 128
13.07 Subordination.................................................. 128
13.08 Waiver......................................................... 128
13.09 Nature of Liability............................................ 129
ANNEX I List of Banks
ANNEX II Bank Addresses
ANNEX III Real Properties
ANNEX IV Projections
ANNEX V Subsidiaries
ANNEX VI Insurance
ANNEX VII Existing Indebtedness
ANNEX VIII Existing Liens
ANNEX IX Acquired Subsidiaries
ANNEX X Capitalization
ANNEX XI Investments
ANNEX XII Projected Consolidated EBITDA
ANNEX XIII Excluded Intellectual Property
ANNEX XIV Asset Sales
ANNEX XV Acquisition Documents
ANNEX XVI Financial Statements
ANNEX XVII Conflicts
EXHIBIT A-1 -- Form of Notice of Borrowing
EXHIBIT A-2 -- Form of Letter of Credit Request
EXHIBIT B-1 -- Form of A Term Note
EXHIBIT B-2 -- Form of B Term Note
EXHIBIT B-3 -- Form of Revolving Note
EXHIBIT B-4 -- Form of Swingline Note
EXHIBIT C -- Form of Section 4.04(b)(ii) Certificate
EXHIBIT D -- Form of Opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
EXHIBIT E -- Form of Officers' Certificate
EXHIBIT F -- Form of Pledge Agreement
EXHIBIT G -- Form of Security Agreement
EXHIBIT H -- Form of Subsidiary Guaranty
EXHIBIT I -- Form of Assignment and Assumption Agreement
EXHIBIT J -- Form of Intercompany Note
(v)
EXHIBIT K -- Form of Solvency Certificate
EXHIBIT L -- Form of Shareholder Subordinated Note
EXHIBIT M -- Form of Borrower Subordinated Note
(vi)
CREDIT AGREEMENT, dated as of October 2, 1996, among ▇▇▇▇▇▇-▇▇▇▇▇▇
HOLDING, INC., a Delaware corporation ("Holdings"), ▇▇▇▇▇▇-▇▇▇▇▇▇ CORPORATION, a
Delaware corporation (the "Borrower"), the lenders from time to time party
hereto (each, a "Bank" and, collectively, the "Banks"), and BANKERS TRUST
COMPANY, as Agent (in such capacity, the "Agent"). Unless otherwise defined
herein, all capitalized terms used herein and defined in Section 10 are used
herein as so defined.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, subject to and upon the terms and conditions herein set
forth, the Banks are willing to make available the credit facilities provided
for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
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1.01 Commitments. (A) Subject to and upon the terms and conditions
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herein set forth, each Bank severally agrees to make a loan or loans to the
Borrower, which loans shall be drawn, to the extent such Bank has a commitment
under such Facility, under the A Term Loan Facility, the B Term Loan Facility
and the Revolving Loan Facility, as set forth below:
(a) Loans under the A Term Loan Facility (each, an "A Term Loan" and,
collectively, the "A Term Loans") (i) shall be incurred by the Borrower
pursuant to a single drawing, which shall be on the Initial Borrowing Date,
(ii) shall be denominated in U.S. Dollars, (iii) except as hereinafter
provided, may, at the option of the Borrower, be incurred and maintained as
and/or converted into Base Rate Loans or Eurodollar Loans, provided, that
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(x) all A Term Loans made by all Banks pursuant to the same Borrowing
shall, unless otherwise specifically provided herein, consist entirely of A
Term Loans of the same Type and (y) unless the Agent has determined that
the Syndication Date has occurred (at which time this clause (y) shall no
longer be applicable), no more than three Borrowings of A Term Loans to be
maintained as Eurodollar Loans may be incurred prior to the 90th day after
the Initial Borrowing Date (each of which Borrowings of Eurodollar Loans
may only have an Interest Period of one month, and the first of which
Borrowings may only be made on a single date on or after the Initial
Borrowing Date and on or before the sixth Business Day following the
Initial Borrowing Date, the second of which Borrowings may only be made on
the last day of the Interest Period of the first such Borrowing and the
third of which Borrowing may only be made on the last day of the Interest
Period of the second such Borrowing) and (iv) shall not exceed for any Bank
at the time of incurrence thereof on
the Initial Borrowing Date that aggregate principal amount which equals the
A Term Loan Commitment, if any, of such Bank at such time. Once repaid, A
Term Loans may not be reborrowed.
(b) Each loan under the B Term Loan Facility (each, a "B Term Loan"
and, collectively, the "B Term Loans") (i) shall be incurred by the
Borrower pursuant to a single drawing, which shall be on the Initial
Borrowing Date, (ii) shall be denominated in U.S. Dollars, (iii) except as
hereinafter provided, may, at the option of the Borrower, be incurred and
maintained as and/or converted into Base Rate Loans or Eurodollar Loans,
provided, that (x) all B Term Loans made by all Banks pursuant to the same
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Borrowing shall, unless otherwise specifically provided herein, consist
entirely of B Term Loans of the same Type, (y) unless the Agent has
determined that the Syndication Date has occurred (at which time this
clause (y) shall no longer be applicable), no more than three Borrowings of
B Term Loans to be maintained as Eurodollar Loans may be incurred prior to
the 90th day after the Initial Borrowing Date (each of which Borrowings of
Eurodollar Loans may only have an Interest Period of one month, and the
first of which Borrowings may only be made on a single date on or after the
Initial Borrowing Date and on or before the sixth Business Day following
the Initial Borrowing Date, the second of which Borrowings may only be made
on the last day of the Interest Period of the first such Borrowing and the
third of which Borrowing may only be made on the last day of the Interest
Period of the second such Borrowing) and (z) all B Term Loans incurred by
the Borrower on the Initial Borrowing Date and made as Eurodollar Loans on
such date may only have an Interest Period of one month and (iv) shall not
exceed for any Bank at the time of incurrence thereof on the Initial
Borrowing Date that aggregate principal amount which equals the B Term Loan
Commitment, if any, of such Bank at such time. Once repaid, B Term Loans
may not be reborrowed.
(c) Each loan under the Revolving Loan Facility (each, a "Revolving
Loan" and, collectively, the "Revolving Loans") (i) may be incurred by the
Borrower at any time and from time to time on and after the Initial
Borrowing Date and prior to the Revolving Loan Maturity Date, (ii) shall be
denominated in U.S. Dollars, (iii) except as hereinafter provided, may, at
the option of the Borrower, be incurred and maintained as and/or converted
into Base Rate Loans or Eurodollar Loans, provided, that (x) all Revolving
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Loans made as part of the same Borrowing shall, unless otherwise
specifically provided herein, consist of Revolving Loans of the same Type
and (y) unless the Agent has determined that the Syndication Date has
occurred (at which time this clause (y) shall no longer be applicable), no
more than three Borrowings of Revolving Loans to be maintained as
Eurodollar Loans may be incurred prior to the 90th day after the Initial
Borrowing Date (each of which Borrowings of Eurodollar Loans may only have
an Interest Period of one month, and the first of which Borrowings may only
be made on a single date on or after the Initial Borrowing Date and on or
before the sixth Business Day following the Initial Borrowing Date, the
second of which Borrowings may only be made on the last day of the Interest
Period of the first such Borrowing and the third of which Borrowing may
only be made on the last day of the Interest Period
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of the second such Borrowing), (iv) may be repaid and reborrowed in
accordance with the provisions hereof and (v) shall not exceed for any Bank
at any time outstanding that aggregate principal amount which, when
combined with (I) the aggregate principal amount of all other then
outstanding Revolving Loans made by such Bank and (II) such Bank's RL
Percentage, if any, of the Swingline Loans then outstanding and the Letter
of Credit Outstandings (exclusive of Unpaid Drawings which are repaid with
the proceeds of, and simultaneously with the incurrence of, Revolving Loans
or Swingline Loans) at such time, equals the Revolving Loan Commitment, if
any, of such Bank at such time.
(B) Subject to and upon the terms and conditions herein set forth,
BTCo in its individual capacity agrees to make at any time and from time to time
after the Initial Borrowing Date and prior to the Swingline Expiry Date, a loan
or loans to the Borrower (each, a "Swingline Loan" and, collectively, the
"Swingline Loans"), which Swingline Loans (i) shall be made and maintained as
Base Rate Loans, (ii) shall be denominated in U.S. Dollars, (iii) may be repaid
and reborrowed in accordance with the provisions hereof, (iv) shall not exceed
in aggregate principal amount at any time outstanding, when combined with the
aggregate principal amount of all Revolving Loans then outstanding and the
Letter of Credit Outstandings (exclusive of Unpaid Drawings which are repaid
with the proceeds of, and simultaneously with the incurrence of, Revolving Loans
or Swingline Loans) at such time, an amount equal to the Total Revolving Loan
Commitment then in effect and (v) shall not exceed in aggregate principal amount
at any time outstanding the Maximum Swingline Amount. Notwithstanding the
foregoing, during each period of fourteen consecutive days occurring prior to
the Swingline Expiry Date, there shall be at least one day on which there are no
outstanding Swingline Loans. BTCo shall not be obligated to make any Swingline
Loans at a time when a Bank Default exists unless BTCo has entered into
arrangements satisfactory to it and the Borrower to eliminate BTCo's risk with
respect to the Defaulting Bank's or Banks' participation in such Swingline
Loans, including by cash collateralizing such Defaulting Bank's or Banks' RL
Percentage of the outstanding Swingline Loans. BTCo will not make a Swingline
Loan after it has received written notice from the Borrower or the Required
Banks stating that a Default or an Event of Default exists until such time as
BTCo shall have received a written notice of (i) rescission of such notice from
the party or parties originally delivering the same or (ii) a waiver of such
Default or Event of Default from the Required Banks.
(C) On any Business Day, BTCo may, in its sole discretion, give
notice to the ▇▇ ▇▇▇▇▇ that its outstanding Swingline Loans shall be funded with
a Borrowing of Revolving Loans (provided that each such notice shall be deemed
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to have been automatically given upon the occurrence of a Default or an Event of
Default under Section 9.05 or upon the exercise of any of the remedies provided
in the last paragraph of Section 9), in which case a Borrowing of Revolving
Loans constituting Base Rate Loans (each such Borrowing, a "Mandatory
Borrowing") shall be made on the immediately succeeding Business Day by all ▇▇
▇▇▇▇▇ pro rata based on each RL Bank's RL Percentage, and the proceeds thereof
shall be applied directly to repay BTCo for such outstanding Swingline Loans.
Each RL Bank hereby irrevocably agrees
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to make Base Rate Loans upon one Business Day's notice pursuant to each
Mandatory Borrowing in the amount and in the manner specified in the preceding
sentence and on the date specified in writing by BTCo, notwithstanding (i) that
the amount of the Mandatory Borrowing may not comply with the Minimum Borrowing
Amount otherwise required hereunder, (ii) whether any conditions specified in
Section 5 are then satisfied, (iii) whether a Default or an Event of Default has
occurred and is continuing, (iv) the date of such Mandatory Borrowing and (v)
any reduction in the Total Revolving Loan Commitment after any such Swingline
Loans were made. In the event that any Mandatory Borrowing cannot for any reason
be made on the date otherwise required above (including, without limitation, as
a result of the commencement of a proceeding under the Bankruptcy Code in
respect of the Borrower), each RL Bank (other than BTCo) hereby agrees that it
shall forthwith purchase from BTCo (without recourse or warranty) such
assignment of the outstanding Swingline Loans as shall be necessary to cause the
▇▇ ▇▇▇▇▇ to share in such Swingline Loans ratably based upon their respective RL
Percentages, provided that all interest payable on the Swingline Loans shall be
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for the account of BTCo until the date the respective assignment is purchased
and, to the extent attributable to the purchased assignment, shall be payable to
the RL Bank purchasing same from and after such date of purchase.
1.02 Minimum Borrowing Amounts, etc. The aggregate principal amount
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of each Borrowing under a Facility shall not be less than the Minimum Borrowing
Amount for such Facility. More than one Borrowing may be incurred on any day;
provided, that at no time shall there be outstanding more than fifteen
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Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. (a) Whenever the Borrower desires to
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incur Loans under any Facility (excluding Borrowings of Swingline Loans and
Mandatory Borrowings), it shall give the Agent at its Notice Office, prior to
11:00 A.M. (New York time), at least three Business Days' prior written notice
(or telephonic notice promptly confirmed in writing) of each Borrowing of
Eurodollar Loans and at least one Business Day's prior written notice (or
telephonic notice promptly confirmed in writing) of each Borrowing of Base Rate
Loans to be made hereunder. Each such notice (each, a "Notice of Borrowing")
shall, except as provided in Section 1.10, be irrevocable, and, in the case of
each written notice and each confirmation of telephonic notice, shall be in the
form of Exhib-it A-1, appropriately completed to specify (i) the Facility
pursuant to which such Borrowing is to be made, (ii) the aggregate principal
amount of the Loans to be made pursuant to such Borrowing, (iii) the date of
such Borrowing (which shall be a Business Day) and (iv) whether the respective
Borrowing shall consist of Base Rate Loans or, to the extent permitted
hereunder, Eurodollar Loans and, if Eurodollar Loans, the Interest Period to be
initially applicable thereto. The Agent shall promptly give each Bank written
notice (or telephonic notice promptly confirmed in writing) of each proposed
Borrowing, of such Bank's proportionate share thereof, if any, and of the other
matters covered by the Notice of Borrowing.
(b) (i) Whenever the Borrower desires to make a Borrowing of
Swingline Loans hereunder, it shall give BTCo not later than 12:00 Noon (New
York time) on the day such Swingline Loan is to be made, written notice (or
telephonic notice promptly confirmed in
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writing) of each Swingline Loan to be made hereunder. Each such notice shall be
irrevocable and shall specify in each case (x) the date of such Borrowing (which
shall be a Business Day) and (y) the aggregate principal amount of the Swingline
Loan to be made pursuant to such Borrowing.
(ii) Mandatory Borrowings shall be made upon the notice specified in
Section 1.01(C), with the Borrower irrevocably agreeing, by its incurrence of
any Swingline Loan, to the making of Mandatory Borrowings as set forth in such
Section.
(c) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice permitted to be given hereunder, the
Agent or BTCo (in the case of a Borrowing of Swingline Loans) or the respective
Letter of Credit Issuer (in the case of Letters of Credit), as the case may be,
may prior to receipt of written confirmation act without liability upon the
basis of such telephonic notice, believed by the Agent, BTCo, or such Letter of
Credit Issuer, as the case may be, in good faith to be from an Authorized
Officer of the Borrower. In each such case, the Borrower hereby waives the
right to dispute the Agent's, BTCo's or such Letter of Credit Issuer's record of
the terms of such telephonic notice.
1.04 Disbursement of Funds. (a) No later than 1:00 P.M. (New York
---------------------
time) on the date specified in each Notice of Borrowing (or (x) in the case of
Swingline Loans, not later than 2:00 P.M. (New York time) on the date specified
in Section 1.03(b)(i) or (y) in the case of Mandatory Borrowings, not later than
12:00 Noon (New York time) on the date specified in Section 1.01(C)), each Bank
with a Commitment under the respective Facility will make available its pro rata
--- ----
share, if any, of each Borrowing requested to be made on such date (or in the
case of Swingline Loans, BTCo shall make available the full amount thereof) in
the manner provided below. All amounts shall be made available to the Agent in
U.S. Dollars and immediately available funds at the Payment Office and the Agent
promptly will make available to the Borrower by depositing to its account at the
Payment Office the aggregate of the amounts so made available in the type of
funds received. Unless the Agent shall have been notified by any Bank prior to
the date of Borrowing that such Bank does not intend to make available to the
Agent its portion of the Borrowing or Borrowings to be made on such date, the
Agent may assume that such Bank has made such amount available to the Agent on
such date of Borrowing, and the Agent, in reliance upon such assumption, may (in
its sole discretion and without any obligation to do so) make available to the
Borrower a corresponding amount. If such corresponding amount is not in fact
made available to the Agent by such Bank and the Agent has made available same
to the Borrower, the Agent shall be entitled to recover such corresponding
amount from such Bank. If such Bank does not pay such corresponding amount
forthwith upon the Agent's demand therefor, the Agent shall promptly notify the
Borrower, and the Borrower shall immediately pay such corresponding amount to
the Agent. The Agent shall also be entitled to recover from the Bank or the
Borrower, as the case may be, interest on such corresponding amount in respect
of each day from the date such corresponding amount was made available by the
Agent to the Borrower to the date such corresponding amount is recovered by the
Agent, at a rate per annum equal to (x) if paid by such Bank, the overnight
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Federal Funds rate or (y) if paid by the Borrower, the then applicable rate of
interest, calculated in accordance with Section 1.08, for the respective Loans.
(b) Nothing herein shall be deemed to relieve any Bank from its
obligation to fulfill its commitments hereunder or to prejudice any rights which
the Borrower may have against any Bank as a result of any default by such Bank
hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the principal of,
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and interest on, all the Loans made to it by each Bank shall be evidenced (i) if
A Term Loans, by a promissory note substantially in the form of Exhibit B-1 with
blanks appropriately completed in conformity herewith (each, an "A Term Note"
and, collectively, the "A Term Notes"), (ii) if B Term Loans, by a promissory
note substantially in the form of Exhibit B-2 with blanks appropriately
completed in conformity herewith (each, a "B Term Note" and, collectively, the
"B Term Notes"), (iii) if Revolving Loans, by a promissory note substantially in
the form of Exhibit B-3 with blanks appropriately completed in conformity
herewith (each, a "Revolving Note" and, collectively, the "Revolving Notes") and
(iv) if Swingline Loans, by a promissory note substantially in the form of
Exhibit B-4 with blanks appropriately completed in conformity herewith (the
"Swingline Note").
(b) The A Term Note issued to each Bank shall (i) be executed by the
Borrower, (ii) be payable to the order of such Bank or its registered assigns
and be dated the Initial Borrowing Date, (iii) be in a stated principal amount
equal to the A Term Loans made by such Bank, (iv) mature on the A Term Loan
Maturity Date, (v) bear interest as provided in the appropriate clause of
Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans, as the case
may be, evidenced thereby, (vi) be subject to voluntary prepayment as provided
in Section 4.01, and mandatory repayment as provided in Section 4.02, and (vii)
be entitled to the benefits of this Agreement and the other Credit Documents.
(c) The B Term Note issued to each Bank shall (i) be executed by the
Borrower, (ii) be payable to the order of such Bank or its registered assigns
and be dated the Initial Borrowing Date, (iii) be in a stated principal amount
equal to the B Term Loans made by such Bank, (iv) mature on the B Term Loan
Maturity Date, (v) bear interest as provided in the appropriate clause of
Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans, as the case
may be, evidenced thereby, (vi) be subject to voluntary prepayment as provided
in Section 4.01, and mandatory repayment as provided in Section 4.02, and (vii)
be entitled to the benefits of this Agreement and the other Credit Documents.
(d) The Revolving Note issued to each Bank shall (i) be executed by
the Borrower, (ii) be payable to the order of such Bank or its registered
assigns and be dated the Initial Borrowing Date, (iii) be in a stated principal
amount equal to the Revolving Loan Commitment of such Bank and be payable in the
principal amount of the Revolving Loans evidenced thereby, (iv) mature on the
Revolving Loan Maturity Date, (v) bear interest as provided in the appropriate
clause of Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans,
as the case may be, evidenced thereby, (vi) be subject to voluntary prepayment
as pro-
-6-
vided in Section 4.01, and mandatory repayment as provided in Section 4.02, and
(vii) be entitled to the benefits of this Agreement and the other Credit
Documents.
(e) The Swingline Note issued to BTCo shall (i) be executed by the
Borrower, (ii) be payable to the order of BTCo or its registered assigns and be
dated the Initial Borrowing Date, (iii) be in a stated principal amount equal to
the Maximum Swingline Amount and be payable in the principal amount of the
Swingline Loans evidenced thereby, (iv) mature on the Swingline Expiry Date, (v)
bear interest as provided in Section 1.08 in respect of the Base Rate Loans
evidenced thereby, (vi) be subject to voluntary prepayment as provided in
Section 4.01, and mandatory repayment as provided in Section 4.02, and (vii) be
entitled to the benefits of this Agreement and the other Credit Documents.
(f) Each Bank will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will prior to any
transfer of any of its Notes endorse on the reverse side thereof the outstanding
principal amount of Loans evidenced thereby. Failure to make any such notation
shall not affect the Borrower's obligations in respect of such Loans.
1.06 Conversions. The Borrower shall have the option to convert on
-----------
any Business Day occurring on or after the Initial Borrowing Date, all or a
portion at least equal to the applicable Minimum Borrowing Amount of the
outstanding principal amount of the Loans (other than Swingline Loans which at
all times shall be maintained as Base Rate Loans) owing by the Borrower pursuant
to a single Facility into a Borrowing or Borrowings of another Type of Loan
under such Facility; provided, that (i) except as otherwise provided in Section
--------
1.10(b), no partial conversion of a Borrowing of Eurodollar Loans shall reduce
the outstanding principal amount of the Eurodollar Loans made pursuant to such
Borrowing to less than the Minimum Borrowing Amount applicable thereto, (ii)
Base Rate Loans may only be converted into Eurodollar Loans if no payment
Default, or Event of Default, is in existence on the date of the conversion,
(iii) Borrowings of Eurodollar Loans resulting from this Section 1.06 shall be
limited in number as provided in Section 1.02 and (iv) unless the Agent has
determined that the Syndication Date has occurred (at which time this clause
(iv) shall no longer be applicable), prior to the 90th day after the Initial
Borrowing Date, conversions of Base Rate Loans into Eurodollar Loans may only be
made if any such conversion is effective on the first day of the first, second
or third Interest Period referred to in clause (y) of the proviso to each of
Section 1.01(A)(a)(iii), 1.01(A)(b)(iii), and 1.01(A)(c)(iii) and then only so
long as such conversion does not result in a greater number of Borrowings of
Eurodollar Loans prior to the 90th day after the Initial Borrowing Date as are
permitted under such Sections. Each such conversion shall be effected by the
Borrower by giving the Agent at its Notice Office, prior to 11:00 A.M. (New York
time), at least three Business Days' (or one Business Day's in the case of a
conversion into Base Rate Loans) prior written notice (or telephonic notice
promptly confirmed in writing) (each, a "Notice of Conversion") specifying the
Loans to be so converted, the Type of Loans to be converted into and, if to be
converted into a Borrowing of Eurodollar Loans, the Interest Period to be
initially applicable thereto. The Agent shall give each Bank prompt notice of
any such proposed conversion affecting any of its Loans.
-7-
1.07 Pro Rata Borrowings. All Borrowings of Loans (other than
-------------------
Swingline Loans) under this Agreement shall be made by the Banks pro rata on the
--- ----
basis of their A Term Loan Commitments, B Term Loan Commitments or Revolving
Loan Commitments, as the case may be. It is understood that no Bank shall be
responsible for any default by any other Bank of its obligation to make Loans
hereunder and that each Bank shall be obligated to make the Loans to be made by
it hereunder, regardless of the failure of any other Bank to fulfill its
commitments hereunder.
1.08 Interest. (a) The unpaid principal amount of each Base Rate
--------
Loan shall bear interest from the date of the Borrowing thereof until the
earlier of (i) the maturity (whether by acceleration or otherwise) of such Base
Rate Loan and (ii) the conversion of such Base Rate Loan to a Eurodollar Loan
pursuant to Section 1.06, at a rate per annum which shall at all times be the
Applicable Base Rate Margin plus the Base Rate in effect from time to time.
(b) The unpaid principal amount of each Eurodollar Loan shall bear
interest from the date of the Borrowing thereof until the earlier of (i) the
maturity (whether by acceleration or otherwise) of such Eurodollar Loan and (ii)
the conversion of such Eurodollar Loan to a Base Rate Loan pursuant to Section
1.06, 1.09 or 1.10(b), as applicable, at a rate per annum which shall at all
times be the Applicable Eurodollar Margin plus the relevant Eurodollar Rate.
(c) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan shall bear interest at a rate per annum equal
to the greater of (x) the rate which is 2% in excess of the rate then borne by
such Loans and (y) the rate which is 2% in excess of the rate otherwise
applicable to Base Rate Loans of such Facility from time to time. Interest which
accrues under this Section 1.08(c) shall be payable on demand.
(d) Interest shall accrue from and including the date of any
Borrowing to but excluding the date of any repayment thereof and shall be
payable (i) in respect of each Base Rate Loan, quarterly in arrears on each
Quarterly Payment Date, (ii) in respect of each Eurodollar Loan, on (x) the date
of any prepayment or repayment thereof (on the amount prepaid or repaid), (y)
the date of any conversion into a Base Rate Loan pursuant to Section 1.06, 1.09
or 1.10(b), as applicable (on the amount converted) and (z) the last day of each
Interest Period applicable thereto and, in the case of an Interest Period in
excess of three months, on each date occurring at three month intervals after
the first day of such Interest Period and (iii) in respect of each Loan, at
maturity (whether by acceleration or otherwise) and, after such maturity, on
demand.
(e) All computations of interest hereunder shall be made in
accordance with Section 12.07(b).
(f) The Agent, upon determining the interest rate for any Borrowing
of Eurodollar Loans for any Interest Period, shall promptly notify the Borrower
and the Banks thereof.
-8-
1.09 Interest Periods. At the time the Borrower gives a Notice of
----------------
Borrowing or Notice of Conversion in respect of the making of, or conversion
into, a Borrowing of Eurodollar Loans (in the case of the initial Interest
Period applicable thereto) or prior to 12:00 Noon (New York time) on the third
Business Day prior to the expiration of an Interest Period applicable to a
Borrowing of Eurodollar Loans, it shall have the right to elect by giving the
Agent written notice (or telephonic notice promptly confirmed in writing) of the
Interest Period applicable to such Borrowing, which Interest Period shall, at
the option of the Borrower, be a one, two, three or six-month period or, to the
extent approved by all Banks with a Commitment and/or outstanding Loans, as the
case may be, of the respective Facility, a twelve-month period. Notwithstanding
anything to the contrary contained above:
(i) all Eurodollar Loans comprising a Borrowing shall have the same
Interest Period;
(ii) the initial Interest Period for any Borrowing of Eurodollar
Loans shall commence on the date of such Borrowing (including the date of
any conversion from a Borrowing of Base Rate Loans) and each Interest
Period occurring thereafter in respect of such Borrowing shall commence on
the day on which the next preceding Interest Period expires;
(iii) if any Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period, such Interest Period shall end on the last Business Day of
such calendar month;
(iv) if any Interest Period would otherwise expire on a day which is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day, provided, that if any Interest Period would
--------
otherwise expire on a day which is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(v) no Interest Period for a Borrowing under a Facility may be
elected if it would extend beyond the respective Maturity Date for such
Facility;
(vi) no Interest Period may be elected at any time when a payment
Default, or an Event of Default, is then in existence; and
(vii) no Interest Period with respect to any Borrowing of Term
Loans shall extend beyond any date upon which a mandatory prepayment of
such Term Loans is required to be made under Section 4.02(A)(b)(i) or (ii),
as the case may be, if, after giving effect to the selection of such
Interest Period, the aggregate principal amount of such Term Loans
maintained as Eurodollar Loans with Interest Periods ending after such date
of mandatory repayment would exceed the aggregate principal amount of such
Term Loans permitted to be outstanding after such mandatory prepayment.
-9-
If upon the expiration of any Interest Period, the Borrower has failed to elect,
or is not permitted to elect by virtue of the application of clause (vi) above,
a new Interest Period to be applicable to the respective Borrowing of Eurodollar
Loans as provided above, the Borrower shall be deemed to have elected to convert
such Borrowing into a Borrowing of Base Rate Loans effective as of the
expiration date of such current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event that (x) in
---------------------------------
the case of clause (i) below, the Agent or (y) in the case of clauses (ii) and
(iii) below, any Bank, shall have determined (which determination shall, absent
manifest error, be final and conclusive and binding upon all parties hereto):
(i) on any date for determining the Eurodollar Rate for any Interest
Period, that, by reason of any changes arising after the date of this
Agreement affecting the interbank Eurodollar market, adequate and fair
means do not exist for ascertaining the applicable interest rate on the
basis provided for in the definition of Eurodollar Rate; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar Loans (other than any increased cost or reduction in the
amount received or receivable resulting from the imposition of or a change
in the rate of net income taxes or similar charges) because of (x) any
change since the date of this Agreement in any applicable law, governmental
rule, regulation, guideline, order or request (whether or not having the
force of law), or in the interpretation or administration thereof and
including the introduction of any new law or governmental rule, regulation,
guideline, order or request (such as, for example, but not limited to a
change in official reserve requirements, but, in all events, excluding
reserves required under Regulation D to the extent included in the
computation of the Eurodollar Rate) and/or (y) other circumstances
affecting such Bank, the interbank Eurodollar market or the position of
such Bank in such market; or
(iii) at any time since the date of this Agreement, that the making
or continuance of any Eurodollar Loan has become unlawful by compliance by
such Bank in good faith with any law, governmental rule, regulation,
guideline or order (or would conflict with any such governmental rule,
regulation, guideline or order not having the force of law but with which
such Bank customarily complies even though the failure to comply therewith
would not be unlawful), or has become impracticable as a result of a
contingency occurring after the date of this Agreement which materially and
adversely affects the interbank Eurodollar market;
then, and in any such event, such Bank (or the Agent in the case of clause (i)
above) shall (x) on such date and (y) as promptly as practicable (and in any
event within five Business Days) after the date on which such event no longer
exists give notice (by telephone confirmed in writing) to the Borrower and
(except in the case of clause (i)) to the Agent of such determination
-10-
(which notice the Agent shall promptly transmit to each of the other Banks).
Thereafter, (x) in the case of clause (i) above, Eurodollar Loans shall no
longer be available until such time as the Agent notifies the Borrower and the
Banks that the circumstances giving rise to such notice by the Agent no longer
exist, and any Notice of Borrowing or Notice of Conversion given by the Borrower
with respect to Eurodollar Loans which have not yet been incurred shall be
deemed rescinded by the Borrower, (y) in the case of clause (ii) above, the
Borrower agrees to pay to such Bank, upon written demand therefor (accompanied
by the written notice referred to below), such additional amounts (in the form
of an increased rate of, or a different method of calculating, interest or
otherwise as such Bank in its sole discretion shall determine) as shall be
required to compensate such Bank for such increased costs or reductions in
amounts received or receivable hereunder (a written notice as to the additional
amounts owed to such Bank, showing the basis for the calculation thereof,
submitted to the Borrower by such Bank shall, absent manifest error, be final
and conclusive and binding upon all parties hereto) and (z) in the case of
clause (iii) above, the Borrower shall take one of the actions specified in
Section 1.10(b) as promptly as possible and, in any event, within the time
period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected pursuant to Section 1.10(a)(iii) the
Borrower shall) either (i) if the affected Eurodollar Loan is then being made
pursuant to a Borrowing, cancel said Borrowing by giving the Agent telephonic
notice (confirmed promptly in writing) thereof on the same date that the
Borrower was notified by a Bank pursuant to Section 1.10(a)(ii) or (iii)), or
(ii) if the affected Eurodollar Loan is then outstanding, upon at least three
Business Days' notice to the Agent, require the affected Bank to convert each
such Eurodollar Loan into a Base Rate Loan (which conversion, in the case of the
circumstances described in Section 1.10(a)(iii), shall occur no later than the
last day of the Interest Period then applicable to such Eurodollar Loan (or such
earlier date as shall be required by applicable law)); provided, that if more
--------
than one Bank is affected at any time, then all affected Banks must be treated
the same pursuant to this Section 1.10(b).
(c) If any Bank shall have determined that after the date hereof, the
adoption or effectiveness of any applicable law, rule or regulation regarding
capital adequacy, or any change therein, or any change in the interpretation or
administration thereof by the National Association of Insurance Commissioners
("NAIC") or any governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by such
Bank or any corporation controlling such Bank with any request or directive
regarding capital adequacy (whether or not having the force of law) of the NAIC
or any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Bank's or such other corporation's
capital or assets as a consequence of such Bank's Commitments or obligations
hereunder to a level below that which such Bank or such other corporation could
have achieved but for such adoption, effectiveness, change or compliance (taking
into consideration such Bank's or such other corporation's policies with respect
to capital adequacy), then from time to time, upon written demand by such Bank
(with a copy to the Agent), accompanied by the notice referred to in the last
sentence of this clause (c), the Borrower agrees to pay to such Bank such
additional amount or amounts as will compensate
-11-
such Bank or such other corporation for such reduction. Each Bank, upon
determining in good faith that any additional amounts will be payable pursuant
to this Section 1.10(c), will give prompt written notice thereof to the
Borrower, which notice shall set forth the basis of the calculation of such
additional amounts, although the failure to give any such notice shall not
release or diminish the Borrower's obligations to pay additional amounts
pursuant to this Section 1.10(c) upon the subsequent receipt of such notice.
1.11 Compensation. The Borrower agrees to compensate each Bank,
------------
promptly upon its written request (which request shall set forth the basis for
requesting such compensation and shall be made through the Agent), for all
reasonable 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 Bank to fund its Eurodollar Loans
but excluding loss of anticipated profit with respect to any Loans) which such
Bank may sustain: (i) if for any reason (other than a default by such Bank or
the Agent) a Borrowing of Eurodollar Loans does not occur on a date specified
therefor in a Notice of Borrowing or Notice of Conversion (whether or not
withdrawn by the Borrower or deemed withdrawn pursuant to Section 1.10(a)); (ii)
if any repayment (including any repayment made pursuant to Section 4.02 or as a
result of an acceleration of the Loans pursuant to Section 9) or conversion of
any Eurodollar Loans occurs on a date which is not the last day of an Interest
Period applicable thereto; (iii) if any prepayment of any Eurodollar Loans is
not made on any date specified in a notice of prepayment given by the Borrower;
or (iv) as a consequence of (x) any other default by the Borrower to repay its
Eurodollar Loans when required by the terms of this Agreement or (y) an election
made pursuant to Section 1.10(b). Calculation of all amounts payable to a Bank
under this Section 1.11 shall be made as though that Bank had actually funded
its relevant Eurodollar Loan through the purchase of a Eurodollar deposit
bearing interest at the Eurodollar Rate in an amount equal to the amount of that
Loan, having a maturity comparable to the relevant Interest Period and through
the transfer of such Eurodollar deposit from an offshore office of that Bank to
a domestic office of that Bank in the United States of America; provided,
--------
however, that each Bank may fund each of its Eurodollar Loans in any manner it
-------
sees fit and the foregoing assumption shall be utilized only for the calculation
of amounts payable under this Section 1.11. It is further understood and agreed
that if any repayment of Eurodollar Loans pursuant to Section 4.01 or any
conversion of Eurodollar Loans pursuant to Section 1.06 in either case occurs on
a date which is not the last day of an Interest Period applicable thereto, such
repayment or conversion shall be accompanied by any amounts owing to any Bank
pursuant to this Section 1.11.
1.12 Change of Lending Office. Each Bank agrees that, upon the
------------------------
occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or
(iii), 1.10(c), 2.05 or 4.04 with respect to such Bank, it will, if requested by
the Borrower, use reasonable efforts (subject to overall policy considerations
of such Bank) to designate another lending office for any Loans or Letters of
Credit affected by such event; provided, that such designation is made on such
--------
terms that, in the sole judgment of such Bank, such Bank and its lending office
suffer no economic, legal or regulatory disadvantage, with the object of
avoiding the consequences of the event giving rise to the operation of any such
Section. Nothing in this Section 1.12 shall affect
-12-
or postpone any of the
obligations of the Borrower or the right of any Bank provided in Section 1.10,
2.05 or 4.04.
1.13 Replacement of Banks. (x) If any Bank becomes a Defaulting
--------------------
Bank, (y) upon the occurrence of any event giving rise to the operation of
Section 1.10(a)(ii) or (iii), Section 1.10(c), Section 2.05 or Section 4.04 with
respect to any Bank which results in such Bank charging to the Borrower
increased costs in excess of those being generally charged by the other Banks or
(z) in the case of a refusal by a Bank to consent to a proposed change, waiver,
discharge or termination with respect to this Agreement which has been approved
by the Required Banks as provided in Section 12.12(b), the Borrower shall have
the right, if no payment Default, or Event of Default, then exists, to replace
such Bank (the "Replaced Bank") with one or more other Eligible Transferee or
Transferees, none of whom shall constitute a Defaulting Bank at the time of such
replacement (collectively, the "Replacement Bank") reasonably acceptable to the
Agent, provided that (i) at the time of any replacement pursuant to this Section
--------
1.13, the Replacement Bank shall enter into one or more Assignment and
Assumption Agreements pursuant to Section 12.04(b) (and with all fees payable
pursuant to said Section 12.04(b) to be paid by the Replacement Bank) pursuant
to which the Replacement Bank shall acquire all of the Commitments and
outstanding Loans of, and in each case participations in Letters of Credit by,
the Replaced Bank and, in connection therewith, shall pay to (x) the Replaced
Bank in respect thereof an amount equal to the sum of (A) an amount equal to the
principal of, and all accrued interest on, all outstanding Loans of the Replaced
Bank, (B) an amount equal to all Unpaid Drawings that have been funded by (and
not reimbursed to) such Replaced Bank, together with all then unpaid interest
with respect thereto at such time and (C) an amount equal to all accrued, but
theretofore unpaid, Fees owing to the Replaced Bank pursuant to Section 3.01,
(y) the respective Letter of Credit Issuer an amount equal to such Replaced
Bank's RL Percentage of any Unpaid Drawing (which at such time remains an Unpaid
Drawing) with respect to a Letter of Credit issued by it to the extent such
amount was not theretofore funded by such Replaced Bank and (z) BTCo an amount
equal to such Replaced Bank's RL Percentage of any Mandatory Borrowing to the
extent such amount was not theretofore funded by such Replaced Bank, and (ii)
all obligations (including, without limitation, all such amounts, if any, due
and owing under Section 1.11) of the Borrower due and owing to the Replaced Bank
(other than those specifically described in clause (i) above in respect of which
the assignment purchase price has been, or is concurrently being, paid) shall be
paid in full to such Replaced Bank concurrently with such replacement. Upon the
execution of the respective Assignment and Assumption Agreements, the payment of
amounts referred to in clauses (i) and (ii) above, recordation of the assignment
on the Register by the Agent pursuant to Section 7.13 and, if so requested by
the Replacement Bank, delivery to the Replacement Bank of the appropriate Note
or Notes executed by the Borrower, (x) the Replacement Bank shall become a Bank
hereunder and the Replaced Bank shall cease to constitute a Bank hereunder,
except with respect to indemnification provisions under this Agreement, which
shall survive as to such Replaced Bank and (y) Annex I hereto shall be deemed
modified to reflect the changed Commitments (and/or outstanding Term Loans, as
the case may be) resulting from the assignment from the Replaced Bank to the
Replacement Bank.
-13-
SECTION 2. Letters of Credit.
-----------------
2.01 Letters of Credit. (a) Subject to and upon the terms and
-----------------
conditions herein set forth, the Borrower may request a Letter of Credit Issuer
at any time and from time to time on or after the Initial Borrowing Date and
prior to the Revolving Loan Maturity Date to issue, for the account of the
Borrower and in support of, (x) trade obligations of the Borrower or any of its
Subsidiaries that arise in the ordinary course of business and are in respect of
general corporate purposes of the Borrower or its Subsidiaries, as the case may
be, and/or (y) on a standby basis, L/C Supportable Indebtedness, and subject to
and upon the terms and conditions herein set forth each Letter of Credit Issuer
agrees to issue from time to time, irrevocable letters of credit in such form as
may be approved by such Letter of Credit Issuer (each such letter of credit, a
"Letter of Credit" and, collectively, the "Letters of Credit"). Notwithstanding
the foregoing, no Letter of Credit Issuer shall be under any obligation to issue
any Letter of Credit if at the time of such issuance:
(i) any order, judgment or decree of any governmental authority or
arbitrator shall purport by its terms to enjoin or restrain such Letter of
Credit Issuer from issuing such Letter of Credit or any requirement of law
applicable to such Letter of Credit Issuer or any request or directive
(whether or not having the force of law) from any governmental authority
with jurisdiction over such Letter of Credit Issuer shall prohibit, or
request that such Letter of Credit Issuer refrain from, the issuance of
letters of credit generally or such Letter of Credit in particular or shall
impose upon such Letter of Credit Issuer with respect to such Letter of
Credit any restriction or reserve or capital requirement (for which such
Letter of Credit Issuer is not otherwise compensated) not in effect on the
date hereof, or any unreimbursed loss, cost or expense which was not
applicable, in effect or known to such Letter of Credit Issuer as of the
date hereof and which such Letter of Credit Issuer in good ▇▇▇▇▇ ▇▇▇▇▇
material to it; or
(ii) such Letter of Credit Issuer shall have received notice from the
Required Banks prior to the issuance of such Letter of Credit of the type
described in clause (vi) of Section 2.01(b).
(b) Notwithstanding the foregoing, (i) no Letter of Credit shall
be issued the Stated Amount of which, when added to the Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid on the date of, and
prior to the issuance of, the respective Letter of Credit) at such time, would
exceed either (x) $17,000,000 or (y) when added to the aggregate principal
amount of all Revolving Loans and Swingline Loans then outstanding, the Total
Revolving Loan Commitment at such time; (ii) (x) each standby Letter of Credit
shall have an expiry date occurring not later than one year after such standby
Letter of Credit's date of issuance, provided, that any standby Letter of Credit
--------
may be automatically extendable for periods of up to one year so long as such
standby Letter of Credit provides that the respective Letter of Credit Issuer
retains an option, satisfactory to such Letter of Credit Issuer, to terminate
such standby Letter of Credit within a specified period of time prior to each
scheduled extension date and (y) each trade Letter of Credit shall have an
expiry date occurring
-14-
not later than 180 days after such trade Letter of Credit's date of issuance;
(iii) (x) no standby Letter of Credit shall have an expiry date occurring later
than the Business Day next preceding the Revolving Loan Maturity Date and (y) no
trade Letter of Credit shall have an expiry date occurring later than 30 days
prior to the Revolving Loan Maturity Date; (iv) each Letter of Credit shall be
denominated in U.S. Dollars and payable on a sight basis; (v) the Stated Amount
of each Letter of Credit shall not be less than $100,000 or such lesser amount
as is acceptable to the Letter of Credit Issuer; and (vi) no Letter of Credit
Issuer will issue any Letter of Credit after it has received written notice from
the Borrower or the Required Banks stating that a Default or an Event of Default
exists until such time as such Letter of Credit Issuer shall have received a
written notice of (i) rescission of such notice from the party or parties
originally delivering the same or (ii) a waiver of such Default or Event of
Default by the Required Banks.
(c) Notwithstanding the foregoing, in the event a Bank Default
exists, no Letter of Credit Issuer shall be required to issue any Letter of
Credit unless the respective Letter of Credit Issuer has entered into
arrangements satisfactory to it and the Borrower to eliminate such Letter of
Credit Issuer's risk with respect to the participation in Letters of Credit of
the Defaulting Bank or Banks, including by cash collateralizing such Defaulting
Bank's or Banks' RL Percentage of the Letter of Credit Outstandings.
2.02 Letter of Credit Requests; Notices of Issuance. (a) Whenever
----------------------------------------------
it desires that a Letter of Credit be issued, the Borrower shall give the Agent
and the respective Letter of Credit Issuer written notice (or telephonic notice
confirmed in writing) thereof prior to 12:00 Noon (New York time) at least five
Business Days (or such shorter period as may be acceptable to such Letter of
Credit Issuer) prior to the proposed date of issuance (which shall be a Business
Day) which written notice shall be in the form of Exhibit A-2 (each such notice,
a "Letter of Credit Request"). Each Letter of Credit Request shall include any
other documents as the respective Letter of Credit Issuer customarily requires
in connection therewith.
(b) Each Letter of Credit Issuer shall, promptly after the date of
each issuance of or amendment or modification to a Letter of Credit by it, give
the Agent, each RL Bank and the Borrower written notice of the issuance of or
amendment or modification to such Letter of Credit, accompanied by a copy to the
Agent of such Letter of Credit or Letters of Credit or such amendment or
modification.
2.03 Agreement to Repay Letter of Credit Payments. (a) The Borrower
--------------------------------------------
hereby agrees to reimburse the respective Letter of Credit Issuer, by making
payment to the Agent in immediately available funds at the Payment Office, for
any payment or disbursement made by such Letter of Credit Issuer under any
Letter of Credit issued by it (each such amount so paid or disbursed until
reimbursed, an "Unpaid Drawing") no later than one Business Day following the
date of such payment or disbursement, with interest on the amount so paid or
disbursed by such Letter of Credit Issuer, to the extent not reimbursed prior to
1:00 P.M. (New York time) on the date of such payment or disbursement, from and
including the date paid or disbursed to but not including the date such Letter
of Credit Issuer is reimbursed therefor at a
-15-
rate per annum which shall be the Applicable Base Rate Margin plus the Base Rate
as in effect from time to time for Revolving Loans (plus an additional 2% per
annum if not reimbursed by the third Business Day after the date of such payment
or disbursement), such interest also to be payable on demand. Each Letter of
Credit Issuer shall provide the Borrower prompt notice of any payment or
disbursement made by it under any Letter of Credit issued by it, although the
failure of, or delay in, giving any such notice shall not release or diminish
the obligations of the Borrower under this Section 2.03(a) or under any other
Section of this Agreement.
(b) The Borrower's obligation under this Section 2.03 to reimburse
the respective Letter of Credit Issuer with respect to Unpaid Drawings
(including, in each case, interest thereon) shall be absolute and unconditional
under any and all circumstances and irrespective of any setoff, counterclaim or
defense to payment which the Borrower may have or have had against such Letter
of Credit Issuer, the Agent or any Bank, including, without limitation, any
defense based upon the failure of any drawing under a Letter of Credit issued by
it to substantially conform to the terms of the Letter of Credit or any non-
application or misapplication by the beneficiary of the proceeds of such
drawing; provided, however, that the Borrower shall not be obligated to
-------- -------
reimburse such Letter of Credit Issuer for any wrongful payment made by such
Letter of Credit Issuer under a Letter of Credit issued by it as a result of
acts or omissions constituting willful misconduct or gross negligence on the
part of such Letter of Credit Issuer.
2.04 Letter of Credit Participations. (a) Immediately upon the
-------------------------------
issuance by a Letter of Credit Issuer of any Letter of Credit, such Letter of
Credit Issuer shall be deemed to have sold and transferred to each other RL
Bank, and each such RL Bank (each, a "Participant") shall be deemed irrevocably
and unconditionally to have purchased and received from such Letter of Credit
Issuer, without recourse or warranty, an undivided interest and participation,
to the extent of such Participant's RL Percentage, in such Letter of Credit,
each substitute Letter of Credit, each drawing made thereunder and the
obligations of the Borrower under this Agreement with respect thereto (although
Letter of Credit Fees shall be payable directly to the Agent for the account of
the ▇▇ ▇▇▇▇▇ as provided in Section 3.01(b) and the Participants shall have no
right to receive any portion of any Facing Fees) and any security therefor or
guaranty pertaining thereto. Upon any change in the Revolving Loan Commitments
of the ▇▇ ▇▇▇▇▇ pursuant to Section 1.13 or 12.04(b) or otherwise, it is hereby
agreed that, with respect to all outstanding Letters of Credit and Unpaid
Drawings, there shall be an automatic adjustment to the participations pursuant
to this Section 2.04 to reflect the new RL Percentages of the assigning and
assignee Banks.
(b) In determining whether to pay under any Letter of Credit, no
Letter of Credit Issuer shall have any obligation relative to the Participants
other than to determine that any documents required to be delivered under such
Letter of Credit have been delivered and that they appear to comply on their
face with the requirements of such Letter of Credit. Any action taken or
omitted to be taken by any Letter of Credit Issuer under or in connection with
any Letter of Credit issued by it if taken or omitted in the absence of gross
negligence or willful misconduct, shall not create for such Letter of Credit
Issuer any resulting liability.
-16-
(c) In the event that any Letter of Credit Issuer makes any payment
under any Letter of Credit issued by it and the Borrower shall not have
reimbursed such amount in full to such Letter of Credit Issuer pursuant to
Section 2.03(a), such Letter of Credit Issuer shall promptly notify the Agent,
and the Agent shall promptly notify each Participant of such failure, and each
Participant shall promptly and unconditionally pay to the Agent for the account
of such Letter of Credit Issuer, the amount of such Participant's RL Percentage
of such payment in U.S. Dollars and in same day funds; provided, however, that
-------- -------
no Participant shall be obligated to pay to the Agent its RL Percentage of such
unreimbursed amount for any wrongful payment made by such Letter of Credit
Issuer under a Letter of Credit issued by it as a result of acts or omissions
constituting willful misconduct or gross negligence on the part of such Letter
of Credit Issuer. If the Agent so notifies any Participant required to fund a
payment under a Letter of Credit prior to 11:00 A.M. (New York time) on any
Business Day, such Participant shall make available to the Agent for the account
of the respective Letter of Credit Issuer such Participant's RL Percentage of
the amount of such payment on such Business Day in same day funds. If and to
the extent such Participant shall not have so made its RL Percentage of the
amount of such payment available to the Agent for the account of the respective
Letter of Credit Issuer, such Participant agrees to pay to the Agent for the
account of such Letter of Credit Issuer, forthwith on demand such amount,
together with interest thereon, for each day from such date until the date such
amount is paid to the Agent for the account of such Letter of Credit Issuer at
the overnight Federal Funds rate. The failure of any Participant to make
available to the Agent for the account of the respective Letter of Credit Issuer
its RL Percentage of any payment under any Letter of Credit issued by it shall
not relieve any other Participant of its obligation hereunder to make available
to the Agent for the account of such Letter of Credit Issuer its RL Percentage
of any payment under any such Letter of Credit on the date required, as
specified above, but no Participant shall be responsible for the failure of any
other Participant to make available to the Agent for the account of such Letter
of Credit Issuer such other Participant's RL Percentage of any such payment.
(d) Whenever any Letter of Credit Issuer receives a payment of a
reimbursement obligation as to which the Agent has received for the account of
such Letter of Credit Issuer any payments from the Participants pursuant to
clause (c) above, such Letter of Credit Issuer shall promptly pay to the Agent
and the Agent shall promptly pay to each Participant which has paid its RL
Percentage thereof, in U.S. Dollars and in same day funds, an amount equal to
such Participant's RL Percentage of the principal amount thereof and interest
thereon accruing after the purchase of the respective participations.
(e) The obligations of the Participants to make payments to the Agent
for the account of the respective Letter of Credit Issuer with respect to
Letters of Credit issued by it shall be irrevocable and not subject to
counterclaim, set-off 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:
-17-
(i) any lack of validity or enforceability of this Agreement or
any of the other Credit Documents;
(ii) the existence of any claim, set-off, defense or other right
which 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 Agent, any Letter of Credit
Issuer, any Bank, or other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated herein or
any unrelated transactions (including any underlying transaction between
the Borrower or any of its Subsidiaries and the beneficiary named in any
such Letter of Credit);
(iii) any draft, certificate or 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;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
(v) the occurrence of any Default or Event of Default.
2.05 Increased Costs. If after the date hereof, the adoption or
---------------
effectiveness of any applicable law, rule or regulation, or any change therein,
or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Letter of Credit
Issuer or any Participant with any request or directive (whether or not having
the force of law) by any such authority, central bank or comparable agency shall
either (i) impose, modify or make applicable any reserve, deposit, capital
adequacy or similar requirement against Letters of Credit issued by such Letter
of Credit Issuer or such Participant's participation therein, or (ii) impose on
any Letter of Credit Issuer or any Participant any other conditions affecting
this Agreement, any Letter of Credit or such Participant's participation
therein; and the result of any of the foregoing is to increase the cost to such
Letter of Credit Issuer or such Participant of issuing, maintaining or
participating in any Letter of Credit, or to reduce the amount of any sum
received or receivable by such Letter of Credit Issuer or such Participant
hereunder, then, upon written demand to the Borrower by such Letter of Credit
Issuer or such Participant (a copy of which notice shall be sent by such Letter
of Credit Issuer or such Participant to the Agent), accompanied by the
certificate described in the last sentence of this Section 2.05, the Borrower
shall pay to such Letter of Credit Issuer or such Participant such additional
amount or amounts as will compensate such Letter of Credit Issuer or such
Participant for such increased cost or reduction. A certificate submitted to
the Borrower by such Letter of Credit Issuer or such Participant, as the case
may be (a copy of which certificate shall be sent by such Letter of Credit
Issuer or such Participant to the Agent), setting forth the basis for the
determination of such additional amount or amounts necessary to compensate such
Letter of Credit Issuer or such Participant as aforesaid shall be final and
conclusive and binding
-18-
on the Borrower absent manifest error, although the failure to deliver
any such certificate shall not release or diminish the Borrower's obligations to
pay additional amounts pursuant to this Section 2.05 upon subsequent receipt of
such certificate.
SECTION 3. Fees; Commitments.
-----------------
3.01 Fees. (a) The Borrower shall pay to the Agent for distribution
----
to each Bank a commitment fee (the "Commitment Fee") for the period from the
Effective Date to but not including the date the Total Commitment has been
terminated, computed at a rate for each day equal to the Applicable Commitment
Fee Percentage on the daily Aggregate Unutilized Commitment of such Bank.
Accrued Commitment Fees shall be due and payable in arrears on each Quarterly
Payment Date and the date upon which the Total Revolving Loan Commitment is
terminated.
(b) The Borrower shall pay to the Agent for the account of the ▇▇
▇▇▇▇▇ pro rata on the basis of their RL Percentages, a fee in respect of each
--- ----
Letter of Credit (the "Letter of Credit Fee") computed at a rate per annum equal
to the Applicable Eurodollar Margin then in effect with respect to Revolving
Loans on the daily Stated Amount of such Letter of Credit. Accrued Letter of
Credit Fees shall be due and payable quarterly in arrears on each Quarterly
Payment Date and upon the first day after the termination of the Total Revolving
Loan Commitment upon which no Letters of Credit remain outstanding.
(c) The Borrower shall pay to the Agent for the account of the
respective Letter of Credit Issuer a fee in respect of each Letter of Credit
issued by such Letter of Credit Issuer (the "Facing Fee") computed at the rate
of 1/4 of 1% per annum on the daily Stated Amount of such Letter of Credit;
provided, that in no event shall the annual Facing Fee with respect to each
--------
Letter of Credit be less than $500; it being agreed that, on the date of
issuance of any Letter of Credit and on each anniversary thereof prior to the
termination of such Letter of Credit, if $500 will exceed the amount of Facing
Fees that will accrue with respect to such Letter of Credit for the immediately
succeeding 12-month period, the full $500 shall be payable on the date of
issuance of such Letter of Credit and on each such anniversary thereof prior to
the termination of such Letter of Credit. Except as provided in the immediately
preceding sentence, accrued Facing Fees shall be due and payable quarterly in
arrears on each Quarterly Payment Date and upon the first day after the
termination of the Total Revolving Loan Commitment upon which no Letters of
Credit remain outstanding.
(d) The Borrower hereby agrees to pay directly to the respective
Letter of Credit Issuer upon each issuance of, payment under, and/or amendment
of, a Letter of Credit issued by it such amount as shall at the time of such
issuance, payment or amendment be the administrative charge which such Letter of
Credit Issuer is customarily charging for issuances of, payments under or
amendments of, letters of credit issued by it.
(e) The Borrower shall pay to the Agent, for its own account, such
fees as may be agreed to from time to time between the Borrower and the Agent,
when and as due.
-19-
(f) All computations of Fees shall be made in accordance with
Section 12.07(b).
3.02 Voluntary Termination or Reduction of Total Unutilized Revolving
----------------------------------------------------------------
Loan Commitment. (a) Upon at least two Business Days' prior written notice (or
---------------
telephonic notice promptly confirmed in writing) to the Agent at its Notice
Office (which notice the Agent shall promptly transmit to each of the Banks),
the Borrower shall have the right, without premium or penalty, to terminate or
partially reduce the Total Unutilized Revolving Loan Commitment; provided that
--------
(x) any such termination or partial reduction shall apply to proportionately and
permanently reduce the Revolving Loan Commitment of each of the ▇▇ ▇▇▇▇▇ and (y)
any partial reduction pursuant to this Section 3.02(a) shall be in the amount of
at least $1,000,000.
(b) In the event of certain refusals by a Bank to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Banks as provided in Section
12.12(b), the Borrower shall have the right, upon five Business Days' prior
written notice to the Agent at its Notice Office (which notice the Agent shall
promptly transmit to each of the Banks), to terminate the entire Revolving Loan
Commitment of such Bank, so long as all Loans, together with accrued and unpaid
interest, Fees and all other amounts, due and owing to such Bank are repaid
concurrently with the effectiveness of such termination pursuant to Section
4.01(b) and the Borrower shall pay to the Agent at such time an amount in cash
and/or Cash Equivalents equal to such Bank's RL Percentage of the outstanding
Letters of Credit (which cash and/or Cash Equivalents shall be held by the Agent
as security for the obligations of the Borrower hereunder in respect of the
outstanding Letters of Credit pursuant to a cash collateral agreement to be
entered into in form and substance reasonably satisfactory to the Agent, which
shall permit certain investments in Cash Equivalents reasonably satisfactory to
the Agent until the proceeds are applied to the secured obligations) (at which
time Annex I shall be deemed modified to reflect such changed amounts), and at
such time, such Bank shall no longer constitute a "Bank" for purposes of this
Agreement, except with respect to indemnifications under this Agreement
(including, without limitation, Sections 1.10, 1.11, 2.05, 4.04, 12.01 and
12.06), which shall survive as to such repaid Bank.
3.03 Mandatory Adjustments of Commitments, etc. (a) The Total
------------------------------------------
Commitment shall terminate in its entirety on September 30, 1996 unless the
Initial Borrowing Date has occurred on or before such date.
(b) Each of the Total A Term Loan Commitment and Total B Term Loan
Commitment shall terminate on the Initial Borrowing Date, after giving effect to
the making of Term Loans on such date.
(c) The Total Revolving Loan Commitment (and the Revolving Loan
Commitment of each Bank) shall terminate on the earlier of (x) the date on which
a Change of Control Event occurs and (y) the Revolving Loan Maturity Date.
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(d) On each date upon which a mandatory repayment of Term Loans
pursuant to Section 4.02(A)(c), (d), (e), (f), (g) or (h) is required (and
exceeds in amount the aggregate principal amount of Term Loans then outstanding)
or would be required if an unlimited amount of Term Loans were then outstanding,
the Total Revolving Loan Commitment shall be permanently reduced by the amount,
if any, by which the amount required to be applied pursuant to said Sections
(determined as if an unlimited amount of Term Loans were actually outstanding)
exceeds the aggregate principal amount of Term Loans then outstanding.
Notwithstanding anything to the contrary contained in the immediately preceding
sentence, in no event shall the Total Revolving Loan Commitment be reduced to an
amount less than $15,000,000 pursuant to or as a result of this Section 3.03(d).
(e) Each reduction or adjustment of the Total A Term Loan Commitment,
the Total B Term Loan Commitment or the Total Revolving Loan Commitment pursuant
to this Section 3.03 (or pursuant to Section 4.02) shall apply proportionately
to the A Term Loan Commitment, the B Term Loan Commitment or the Revolving Loan
Commitment, as the case may be, of each Bank with such a Commitment.
SECTION 4. Payments.
--------
4.01 Voluntary Prepayments. (a) The Borrower shall have the right
---------------------
to prepay the Loans made to it, in whole or in part, without premium or penalty,
except as otherwise provided in this Agreement, from time to time on the
following terms and conditions: (i) the Borrower shall give the Agent at its
Notice Office written notice (or telephonic notice promptly confirmed in
writing) of its intent to prepay such Loans, whether such Loans are A Term
Loans, B Term Loans, Revolving Loans or Swingline Loans, the amount of such
prepayment and (in the case of Eurodollar Loans) the specific Borrowing(s)
pursuant to which made, which notice shall be given by the Borrower prior to
11:00 A.M. (New York time) (x) at least one Business Day prior to the date of
such prepayment in the case of Term Loans or Revolving Loans maintained as Base
Rate Loans, (y) on the date of such prepayment in the case of Swingline Loans
and (z) at least three Business Days prior to the date of such prepayment in the
case of Eurodollar Loans, which notice shall, except in the case of Swingline
Loans, promptly be transmitted by the Agent to each of the Banks; (ii) each
prepayment shall be in an aggregate principal amount of (A) at least $1,000,000
in the case of Eurodollar Loans and (B) at least $500,000 in the case of Base
Rate Loans (or $100,000 in the case of Swingline Loans); provided, that no
--------
partial prepayment of Eurodollar Loans made pursuant to a Borrowing shall reduce
the aggregate principal amount of the Eurodollar Loans outstanding pursuant to
such Borrowing to an amount less than the Minimum Borrowing Amount applicable
thereto; (iii) each prepayment in respect of any Loans made pursuant to a
Borrowing shall be applied pro rata among such Loans; provided, that at the
--- ---- --------
Borrower's election in connection with any prepayment of Revolving Loans
pursuant to this Section 4.01, such prepayment shall not be applied to any
Revolving Loans of a Defaulting Bank at any time when the aggregate amount of
Revolving Loans of any Non-Defaulting Bank exceeds such Non-Defaulting Bank's RL
Percentage of all Revolving Loans then outstanding; (iv) each prepayment of Term
Loans pursuant to this Section 4.01 must consist of a prepayment of A Term Loans
(in an amount
-21-
equal to the A TL Percentage of such prepayment) and B Term Loans (in an amount
equal to the B TL Percentage of such prepayment); (v) each prepayment of A Term
Loans pursuant to this Section 4.01 shall reduce the then remaining Scheduled A
Repayments on a pro rata basis (based upon the then remaining principal amount
--- ----
of each suchScheduled A Repayment); and (vi) each prepayment of B Term Loans
pursuant to this Section 4.01 shall reduce the then remaining Scheduled B
Repayments on a pro rata basis (based upon the then remaining principal amount
--- ----
of each such Scheduled B Repayment).
(b) In the event of certain refusals by a Bank to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Banks as provided in Section
12.12(b), the Borrower shall have the right, upon five Business Days' prior
written notice to the Agent at its Notice Office (which notice the Agent shall
promptly transmit to each of the Banks) to repay all Loans, together with
accrued and unpaid interest, Fees and all other amounts due and owing to such
Bank in accordance with said Section 12.12(b), so long as (A) in the case of the
repayment of Revolving Loans of any RL Bank pursuant to this clause (b), the
Revolving Loan Commitment of such RL Bank is terminated concurrently with such
repayment pursuant to Section 3.02(b) (at which time Annex I shall be deemed
modified to reflect the changed Revolving Loan Commitments) and (B) in the case
of the repayment of Loans of any Bank, the consents required by Section 12.12(b)
in connection with the repayment pursuant to this clause (b) shall have been
obtained.
4.02 Mandatory Prepayments.
---------------------
(A) Requirements:
------------
(a) If on any date the sum of (i) the aggregate outstanding principal
amount of Revolving Loans and Swingline Loans (after giving effect to all other
repayments thereof on such date) plus (ii) the Letter of Credit Outstandings on
such date exceeds the Total Revolving Loan Commitment as then in effect, the
Borrower shall repay on such date the principal of Swingline Loans, and if no
Swingline Loans are or remain outstanding, Revolving Loans, in an aggregate
amount equal to such excess. If, after giving effect to the prepayment of all
outstanding Swingline Loans and Revolving Loans, the aggregate amount of Letter
of Credit Outstandings exceeds the Total Revolving Loan Commitment as then in
effect, the Borrower agrees to pay to the Agent an amount in cash and/or Cash
Equivalents equal to such excess (up to the aggregate amount of Letter of Credit
Outstandings at such time) and the Agent shall hold such payment as security for
the obligations of the Borrower hereunder pursuant to a cash collateral
agreement to be entered into in form and substance reasonably satisfactory to
the Agent (which shall permit certain investments in Cash Equivalents reasonably
satisfactory to the Agent until the proceeds are applied to the secured
obligations).
(b) (i) The Borrower shall be required to repay the principal amount
of A Term Loans on each date set forth below in the amount set forth opposite
such date below (each such
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repayment, as the same may be reduced as provided in Sections 4.01 and 4.02(B),
a "Scheduled A Repayment"):
Scheduled A Repayment Date Amount
-------------------------- ------
the last Business Day in November, 1997 $1,000,000
the last Business Day in February, 1998 $1,000,000
the last Business Day in May, 1998 $1,000,000
the last Business Day in August, 1998 $1,000,000
the last Business Day in November, 1998 $2,500,000
the last Business Day in February, 1999 $2,500,000
the last Business Day in May, 1999 $2,500,000
the last Business Day in August, 1999 $2,500,000
the last Business Day in November, 1999 $2,500,000
the last Business Day in February, 2000 $2,500,000
the last Business Day in May, 2000 $2,500,000
the last Business Day in August, 2000 $2,500,000
the last Business Day in November, 2000 $2,500,000
the last Business Day in February, 2001 $2,500,000
the last Business Day in May, 2001 $2,500,000
the last Business Day in August, 2001 $2,500,000
the last Business Day in November, 2001 $5,500,000
A Term Loan Maturity Date $5,500,000
(ii) The Borrower shall be required to repay the principal amount
of B Term Loans on each date set forth below in the amount set forth opposite
such date below (each such repayment, as the same may be reduced as provided in
Sections 4.01 and 4.02(B), a "Scheduled B Repayment"):
Scheduled B Repayment Date Amount
-------------------------- ------
the last Business Day in November, 1996 $ 125,000
the last Business Day in February, 1997 $ 125,000
the last Business Day in May, 1997 $ 125,000
the last Business Day in August, 1997 $ 125,000
the last Business Day in November, 1997 $ 125,000
the last Business Day in February, 1998 $ 125,000
-23-
the last Business Day in May, 1998 $ 125,000
the last Business Day in August, 1998 $ 125,000
the last Business Day in November, 1998 $ 125,000
the last Business Day in February, 1999 $ 125,000
the last Business Day in May, 1999 $ 125,000
the last Business Day in August, 1999 $ 125,000
the last Business Day in November, 1999 $ 125,000
the last Business Day in February, 2000 $ 125,000
the last Business Day in May, 2000 $ 125,000
the last Business Day in August, 2000 $ 125,000
the last Business Day in November, 2000 $ 125,000
the last Business Day in February, 2001 $ 125,000
the last Business Day in May, 2001 $ 125,000
the last Business Day in August, 2001 $ 125,000
the last Business Day in November, 2001 $ 125,000
the last Business Day in February, 2002 $ 125,000
the last Business Day in May, 2002 $4,000,000
the last Business Day in August, 2002 $4,000,000
the last Business Day in November, 2002 $4,000,000
the last Business Day in February, 2003 $4,000,000
the last Business Day in May, 2003 $6,000,000
the last Business Day in August, 2003 $6,000,000
the last Business Day in November, 2003 $9,625,000
B Term Loan Maturity Date $9,625,000
(c) On the Business Day after the date of receipt thereof by Holdings
and/or any of its Subsidiaries of Proceeds from any Asset Sale, an amount equal
to 100% of the Net Proceeds from such Asset Sale shall be applied as a mandatory
repayment of principal of the Term Loans (with the A TL Percentage of such
amount to be applied as a repayment of the A Term Loans and the B TL Percentage
of such amount to be applied as a repayment of the B Term Loans, in each case
subject to modification of such application as set forth in Section 4.02(C)),
provided that with respect to no more than (x) $5,000,000 in the aggregate of
--------
the Net Proceeds received in connection with any West Coast Asset Sale and
(y) $1,000,000 in the aggregate of the Net Proceeds received in connection with
all other Asset Sales in any fiscal year of the Borrower, the Net Proceeds
therefrom shall not be required to be so applied on such date to the extent that
no payment Default, or Event of Default, then exists and the Borrower delivers a
certificate to the Agent on or prior to such date stating that such Net Proceeds
shall be used to purchase assets used or to be used in the businesses referred
to in Section 8.01(a)
-24-
(including, without limitation, capital stock of a corporation engaged in any
such business) within 180 days following the date of such Asset Sale (which
certificate shall set forth the estimates of the proceeds to be so expended),
provided, that (1) if all or any portion of such Net Proceeds not so applied to
--------
the repayment of Term Loans are not so used (or contractually committed to be
used) within such 180 day period, such remaining portion shall be applied on the
last day of such period as a mandatory repayment of principal of outstanding
Term Loans as provided above in this Section 4.02(A)(c) and (2) if all or any
portion of such Net Proceeds are not required to be applied on the 180th day
referred to in clause (1) above because such amount is contractually committed
to be used and subsequent to such date such contract is terminated or expires
without such portion being so used, then such remaining portion shall be applied
on the date of such termination or expiration as a mandatory repayment of
principal of outstanding Term Loans as provided in this Section 4.02(A)(c).
(d) On the Business Day after the date of the receipt thereof by
Holdings and/or any of its Subsidiaries, an amount equal to 100% of the cash
proceeds (net of underwriting discounts, fees and commissions and other costs
and expenses associated therewith) of the sale or issuance of preferred or
common equity of (or cash capital contributions to) Holdings or any of its
Subsidiaries (other than (w) issuances of Holdings Common Stock and Permitted
Holdings PIK Securities by Holdings as consideration in connection with any
Permitted Acquisition, (x) issuances of Holdings Common Stock or Holdings Class
L Common Stock (including as a result of the exercise of any options with regard
thereto) to employees, directors and management of Holdings and its Subsidiaries
and (y) equity contributions to any Subsidiary of the Borrower made by the
Borrower or any other Subsidiary of the Borrower) shall be applied as a
mandatory repayment of principal of the Term Loans (with the A TL Percentage of
such amount to be applied as a repayment of the A Term Loans and the B TL
Percentage of such amount to be applied as a repayment of the B Term Loans, in
each case subject to modification of such application as set forth in Section
4.02(C)); provided that (i) $10,000,000 of cash equity contributions in the
--------
aggregate from ▇▇▇▇ Capital or any Related Party shall not be required to be
applied as provided above in this Section 4.02(A)(d) so long as such equity
contributions are substantially contemporaneously contributed to the capital of
the Borrower as an equity contribution or loaned to the Borrower (such loan to
be evidenced by the Borrower Subordinated Note) (the cash contributions made
pursuant to this clause (i), "Permitted Equity Proceeds"), and (ii) only the
Applicable Equity/ECF Percentage of such proceeds resulting from a registered
public offering of Holdings Common Stock, or the issuance of Holdings common
stock pursuant to a Permitted Strategic Equity Issuance, shall be applied as
provided above in this Section 4.02(A)(d).
(e) On the date of the receipt thereof by Holdings and/or any of its
Subsidiaries, an amount equal to 100% of the proceeds (net of underwriting
discounts, fees and commissions and other costs and expenses associated
therewith) of the incurrence of Indebtedness by Holdings and/or any of its
Subsidiaries (other than Indebtedness permitted to be incurred by Section 8.04
as in effect on the Effective Date) shall be applied as a mandatory repayment of
principal of the Term Loans (with the A TL Percentage of such amount to be
applied as a repayment of the A Term Loans and the B TL Percentage of such
amount to be
-25-
applied as a repayment of the B Term Loans, in each case subject to modification
of such application as set forth in Section 4.02(C)).
(f) On each Excess Cash Payment Date, an amount equal to the
Applicable Equity/ECF Percentage of Excess Cash Flow of the Borrower and its
Subsidiaries for the most recent Excess Cash Flow Period ending prior to such
Excess Cash Payment Date shall be applied as a mandatory repayment of principal
of the Term Loans (with the A TL Percentage of such amount to be applied as a
repayment of the A Term Loans and the B TL Percentage of such amount to be
applied as a repayment of the B Term Loans, in each case subject to modification
of such application as set forth in Section 4.02(C)).
(g) Within 10 days following each date on which Holdings or any of
its Subsidiaries receives any proceeds from any Recovery Event, an amount equal
to 100% of the proceeds of such Recovery Event (net of costs, expenses and taxes
incurred in connection with such Recovery Event) shall be applied as a mandatory
repayment of principal of the Term Loans (with the A TL Percentage of such
amount to be applied as a repayment of the A Term Loans and the B TL Percentage
of such amount to be applied as a repayment of the B Term Loans, in each case
subject to modification of such application as set forth in Section 4.02(C)),
provided that so long as no Default or Event of Default then exists and such
--------
proceeds do not exceed $25,000,000, such proceeds shall not be required to be so
applied on such date to the extent that the Borrower has delivered a certificate
to the Agent on or prior to such date stating that such proceeds shall be used
to replace or restore any properties or assets in respect of which such proceeds
were paid within 360 days following the date of the receipt of such proceeds
(which certificate shall set forth the estimates of the proceeds to be so
expended), and provided further, that (i) if the amount of such proceeds exceeds
----------------
$25,000,000, then the entire amount and not just the portion in excess of
$25,000,000 shall be applied as a mandatory repayment of Term Loans as provided
above in this Section 4.02(A)(g), (ii) if all or any portion of such proceeds
not required to be applied to the repayment of Term Loans pursuant to the
preceding proviso are not so used (or contractually committed to be used) within
360 days after the date of the receipt of such proceeds, such remaining portion
shall be applied on the last day of such period as a mandatory repayment of
principal of the Term Loans as provided in this Section 4.02(A)(g) and (iii) if
all or any portion of such proceeds are not required to be applied on the 360th
day referred to in clause (ii) above because such amount is contractually
committed to be used and subsequent to such date such contract is terminated or
expires without such portion being so used, then such remaining portion shall be
applied on the date of such termination or expiration as a mandatory repayment
of principal of outstanding Term Loans as provided in this Section 4.02(A)(g).
(h) On the date of the receipt thereof by Holdings and/or any of its
Subsidiaries of a Pension Plan Refund, an amount equal to 100% of such Pension
Plan Refund shall be applied as a mandatory repayment of principal of Term Loans
(with the A TL Percentage of such amount to be applied as a repayment of the A
Term Loans, and the B TL Percentage of such amount to be applied as a repayment
of the B Term Loans, in each case subject to modification of such application as
set forth in Section 4.02(C)).
-26-
(B) Application:
-----------
(a) Any amount required to be applied to A Term Loans or B Term
Loans, as the case may be, shall apply to the repayment of the outstanding
principal amount of A Term Loans or B Term Loans, respectively.
(b) All repayments of A Term Loans or B Term Loans, shall be applied
to reduce the then remaining Scheduled Repayments of the respective Facility pro
---
rata based on the then remaining Scheduled Repayments of the respective
----
Facility.
(c) With respect to each repayment of Loans required by this Section
4.02, the Borrower may designate the Types of Loans which are to be repaid and
the specific Borrowing(s) under the affected Facility pursuant to which made;
provided, that (i) Eurodollar Loans made pursuant to a specific Facility may be
--------
designated for repayment pursuant to this Section 4.02 only on the last day of
an Interest Period applicable thereto unless all Eurodollar Loans made pursuant
to such Facility with Interest Periods ending on such date of required
prepayment and all Base Rate Loans made pursuant to such Facility have been
paid in full; (ii) if any repayment of Eurodollar Loans made pursuant to a
single Borrowing shall reduce the outstanding Loans made pursuant to such
Borrowing to an amount less than the Minimum Borrowing Amount, such Borrowing
shall be immediately converted into Base Rate Loans; and (iii) each repayment of
any Loans made pursuant to a Borrowing shall be applied pro rata among such
--- ----
Loans; provided, that no repayment pursuant to Section 4.02(A)(a) shall be
--------
applied to any Revolving Loans of a Defaulting Bank at any time when the
aggregate amount of the Revolving Loans of any Non-Defaulting Bank exceeds such
Non-Defaulting Bank's RL Percentage of Revolving Loans then outstanding. In the
absence of a designation by the Borrower as described in the preceding sentence,
the Agent shall, subject to the above, make such designation in its sole
discretion with a view, but no obligation, to minimize breakage costs owing
under Section 1.11.
(C) Waiver of Certain Mandatory Repayments by B Banks:
-------------------------------------------------
Notwithstanding anything to the contrary contained in this Section
4.02 or elsewhere in this Agreement (including, without limitation, in Section
12.12), the Borrower shall have the option, in its sole discretion, to give the
Banks with outstanding B Terms Loans (the "B Banks") the option to waive a
mandatory repayment of such Loans pursuant to Section 4.02(A)(c), (d), (e), (f),
(g) and/or (h) (each such repayment, a "Waivable Mandatory Repayment") upon the
terms and provisions set forth in this Section 4.02(C). If the Borrower elects
to exercise the option referred to in the preceding sentence, the Borrower shall
give to the Agent written notice of its intention to give the B Banks the right
to waive a Waivable Mandatory Repayment at least five Business Days prior to
such repayment, which notice the Agent shall promptly forward to all B Banks
(indicating in such notice the amount of such repayment to be applied to each
such Bank's outstanding Term Loans under such Facility). The Borrower's offer
to permit such Banks to waive any such Waivable Mandatory Repayment may apply to
all or part of such repayment, provided that any offer to waive part of such
--------
repayment
-27-
must be made ratably to such Banks on the basis of their outstanding B
Term Loans. In the event any such B Bank desires to waive such Bank's right to
receive any such Waivable Mandatory Repayment in whole or in part, such Bank
shall so advise the Agent no later than the close of business two Business Days
after the date of such notice from the Agent, which notice shall also include
the amount such Bank desires to receive in respect of such repayment. If any
Bank does not reply to the Agent within the two Business Days, it will be deemed
not to have waived any part of such repayment. If any Bank does not specify an
amount it wishes to receive, it will be deemed to have accepted 100% of the
total payment. In the event that any such Bank waives all or part of such right
to receive any such Waivable Mandatory Repayment, the Agent shall apply 100% of
the amount so waived by such Bank to the A Term Loans in accordance with Section
4.02(B).
4.03 Method and Place of Payment. Except as otherwise specifically
---------------------------
provided herein, all payments under this Agreement shall be made to the Agent
for the ratable account of the Banks entitled thereto, not later than 12:00 Noon
(New York time) on the date when due and shall be made in immediately available
funds and in U.S. Dollars at the Payment Office, it being understood that
written, telex or facsimile transmission notice by the Borrower to the Agent to
make a payment from the funds in the Borrower's account at the Payment Office
shall constitute the making of such payment to the extent of such funds held in
such account. Any payments under this Agreement which are made later than 12:00
Noon (New York time) shall be deemed to have been made on the next succeeding
Business Day. Whenever any payment to be made hereunder shall be stated to be
due on a day which is not a Business Day, the due date thereof shall be extended
to the next succeeding Business Day and, with respect to payments of principal,
interest shall be payable during such extension at the applicable rate in effect
immediately prior to such extension.
4.04 Net Payments. (a) All payments made by the Borrower hereunder
------------
or under any Note will be made without setoff, counterclaim or other defense.
Except as provided in Section 4.04(b), all such payments will be made free and
clear of, and without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments or other charges of whatever nature
now or hereafter imposed by any jurisdiction or by any political subdivision or
taxing authority thereof or therein with respect to such payments (but
excluding, except as provided in the second succeeding sentence, any tax imposed
on or measured by the net income or net profits of a Bank pursuant to the laws
of the jurisdiction in which it is organized or the jurisdiction in which the
principal office or applicable lending office of such Bank is located or any
subdivision thereof or therein) and all interest, penalties or similar
liabilities with respect thereto (all such non-excluded taxes, levies, imposts,
duties, fees, assessments or other charges being referred to collectively as
"Taxes"). If any Taxes are so levied or imposed, the Borrower agrees to pay the
full amount of such Taxes, and such additional amounts as may be necessary so
that every payment of all amounts due under this Agreement or under any Note,
after withholding or deduction for or on account of any Taxes, will not be less
than the amount provided for herein or in such Note. If any amounts are payable
in respect of Taxes pursuant to the preceding sentence, the Borrower agrees to
reimburse each Bank, upon the written request of such Bank, for taxes imposed on
or measured
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by the net income or net profits of such Bank pursuant to the laws
of the jurisdiction in which the principal office or applicable lending office
of such Bank is located or under the laws of any political subdivision or taxing
authority of any such jurisdiction in which the principal office or applicable
lending office of such Bank is located and for any withholding of taxes as such
Bank shall determine are payable by, or withheld from, such Bank in respect of
such amounts so paid to or on behalf of such Bank pursuant to the preceding
sentence and in respect of any amounts paid to or on behalf of such Bank
pursuant to this sentence. The Borrower will furnish to the Agent within 45
days after the date the payment of any Taxes is due pursuant to applicable law
certified copies of tax receipts evidencing such payment by the Borrower. The
Borrower agrees to indemnify and hold harmless each Bank, and reimburse such
Bank upon its written request, for the amount of any Taxes so levied or imposed
and paid by such Bank.
(b) Each Bank that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) agrees to deliver to the Borrower
and the Agent on or prior to the Effective Date, or in the case of a Bank that
is an assignee or transferee of an interest under this Agreement pursuant to
Section 1.13 or 12.04 (unless the respective Bank was already a Bank hereunder
immediately prior to such assignment or transfer), on the date of such
assignment or transfer to such Bank, (i) two accurate and complete original
signed copies of Internal Revenue Service Form 4224 or 1001 (or successor forms)
certifying to such Bank's entitlement to a complete exemption from United States
withholding tax with respect to payments to be made under this Agreement and
under any Note, or (ii) if the Bank is not a "bank" within the meaning of
Section 881(c)(3)(A) of the Code and cannot deliver either Internal Revenue
Service Form 1001 or 4224 pursuant to clause (i) above, (x) a certificate
substantially in the form of Exhibit C (any such certificate, a "Section
4.04(b)(ii) Certificate") and (y) two accurate and complete original signed
copies of Internal Revenue Service Form W-8 (or successor form) certifying to
such Bank's entitlement to a complete exemption from United States withholding
tax with respect to payments of interest to be made under this Agreement and
under any Note. In addition, each Bank agrees that from time to time after the
Effective Date, when a lapse in time or change in circumstances renders the
previous certification obsolete or inaccurate in any material respect, it will
deliver to the Borrower and the Agent two new accurate and complete original
signed copies of Internal Revenue Service Form 4224 or 1001, or Form W-8 and a
Section 4.04(b)(ii) Certificate, as the case may be, and such other forms as may
be required in order to confirm or establish the entitlement of such Bank to a
continued exemption from or reduction in United States withholding tax with
respect to payments under this Agreement and any Note, or it shall immediately
notify the Borrower and the Agent of its inability to deliver any such Form or
Certificate. Notwithstanding anything to the contrary contained in Section
4.04(a), but subject to Section 12.04(b) and the immediately succeeding
sentence, (x) the Borrower shall be entitled, to the extent it is required to do
so by law, to deduct or withhold income or similar taxes imposed by the United
States (or any political subdivision or taxing authority thereof or therein)
from interest, fees or other amounts payable hereunder for the account of any
Bank which is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for U.S. Federal income tax purposes to the extent that
such Bank has not provided to the Borrower U.S. Internal Revenue Service Forms
that establish a complete exemption from such deduction or withholding and (y)
the
-29-
Borrower shall not be obligated pursuant to Section 4.04(a) hereof to gross-
up payments to be made to a Bank in respect of income or similar taxes imposed
by the United States if (I) such Bank has not provided to the Borrower the
Internal Revenue Service Forms required to be provided to the Borrower pursuant
to this Section 4.04(b) or (II) in the case of a payment, other than interest,
to a Bank described in clause (ii) above, to the extent that such Forms do not
establish a complete exemption from withholding of such taxes. Notwithstanding
anything to the contrary contained in the preceding sentence or elsewhere in
this Section 4.04 and except as set forth in Section 12.04(b), the Borrower
agrees to pay additional amounts and to indemnify each Bank in the manner set
forth in Section 4.04(a) (without regard to the identity of the jurisdiction
requiring the deduction or withholding) in respect of any amounts deducted or
withheld by it as described in the immediately preceding sentence as a result of
any changes after the Effective Date in any applicable law, treaty, governmental
rule, regulation, guideline or order, or in the interpretation thereof, relating
to the deducting or withholding of income or similar Taxes.
SECTION 5. Conditions Precedent. The obligation of each Bank to make
--------------------
each Loan to the Borrower hereunder, and the obligation of any Letter of Credit
Issuer to issue each Letter of Credit hereunder, is subject, at the time of each
such Credit Event (except as otherwise hereinafter indicated), to the
satisfaction of the following conditions:
5.01 Execution of Agreement; Notes. On or prior to the Initial
-----------------------------
Borrowing Date, (i) the Effective Date shall have occurred and (ii) there shall
have been delivered to the Agent for the account of each Bank the appropriate A
Term Note, B Term Note and Revolving Note, if any, and to BTCo the Swingline
Note, in each case executed by the Borrower and in the amount, maturity and as
otherwise provided herein.
5.02 No Default; Representations and Warranties. At the time of each
------------------------------------------
Credit Event and also after giving effect thereto (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein or in the other Credit Documents in effect at such time shall
be true and correct in all material respects with the same effect as though such
representations and warranties had been made on and as of the date of such
Credit Event, unless stated to relate to a specific earlier date, in which case
such representations and warranties shall be true and correct in all material
respects as of such earlier date.
5.03 Officer's Certificate. On the Initial Borrowing Date, the Agent
---------------------
shall have received a certificate dated such date signed by an appropriate
officer of the Borrower stating that all of the applicable conditions set forth
in Sections 5.02, 5.07, 5.08 and 5.09 have been satisfied as of such date.
5.04 Opinions of Counsel. On the Initial Borrowing Date, the Agent
-------------------
shall have received opinions, addressed to the Agent and each of the Banks and
dated the Initial Borrowing Date, from (i) ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, counsel to the
Credit Parties, which opinion shall cover the matters contained in Exhibit D and
such other matters incident to the transactions contemplated herein as the Agent
may reasonably request and (ii) local counsel and other
-30-
counsel to the Credit Parties and/or the Agent reasonably satisfactory to the
Agent (including, without limitation, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, as special Puerto Rico
counsel to the Credit Parties), which opinions shall cover such matters incident
to the transactions contemplated herein and in the other Credit Documents as the
Agent may reasonably request and shall be in form and substance reasonably
satisfactory to the Agent.
5.05 Corporate Proceedings. (a) On the Initial Borrowing Date, the
---------------------
Agent shall have received from each Credit Party a certificate, dated the
Initial Borrowing Date, signed by the chairman, a vice chairman, the president
or any vice-president of such Credit Party, and attested to by the secretary or
any assistant secretary of such Credit Party, in the form of Exhibit E with
appropriate insertions, together with copies of the Certificate of Incorporation
and By-Laws of such Credit Party and the resolutions of such Credit Party
referred to in such certificate and all of the foregoing (including each such
Certificate of Incorporation and By-Laws) shall be reasonably satisfactory to
the Agent.
(b) On the Initial Borrowing Date, all corporate and legal
proceedings and all instruments and agreements in connection with the
transactions contemplated by this Agreement and the other Documents shall be
reasonably satisfactory in form and substance to the Agent, and the Agent shall
have received all information and copies of all certificates, documents and
papers, including good standing certificates, bring-down certificates and any
other records of corporate proceedings and governmental approvals, if any, which
the Agent reasonably may have requested in connection therewith, such documents
and papers, where appropriate, to be certified by proper corporate or
governmental authorities.
(c) On the Initial Borrowing Date, the ownership and capital
structure (including, without limitation, the terms of any capital stock,
options, warrants or other securities issued by Holdings or any of its
Subsidiaries) and management of Holdings and its Subsidiaries shall be in form
and substance satisfactory to the Agent and the Required Banks.
5.06 Adverse Change, etc. On or prior to the Initial Borrowing Date,
--------------------
nothing shall have occurred since March 31, 1996 (and neither the Banks nor the
Agent shall have become aware of any facts or conditions not previously known)
which the Required Banks or the Agent shall determine (a) has, or could
reasonably be expected to have, a material adverse effect on the rights or
remedies of the Banks or the Agent, or on the ability of any Credit Party to
perform its obligations to them hereunder or under any other Credit Document or
(b) has, or could reasonably be expected to have, a Material Adverse Effect.
5.07 Litigation. On the Initial Borrowing Date, there shall be no
----------
actions, suits or proceedings pending or threatened (a) with respect to this
Agreement or any other Document or the Transaction (b) which the Agent or the
Required Banks shall determine could reasonably be expected to (i) have a
Material Adverse Effect or (ii) have a material adverse effect on the
Transaction, the rights or remedies of the Banks or the Agent hereunder or under
any other Credit Document or on the ability of any Credit Party to perform its
respective obligations to the Banks or the Agent hereunder or under any other
Credit Document.
-31-
5.08 Approvals. On or prior to the Initial Borrowing Date, all
---------
necessary governmental (domestic and foreign) and third party approvals in
connection with the Transaction, the transactions contemplated by the Documents
and otherwise referred to herein or therein shall have been obtained and remain
in effect (other than any such approvals with respect to the Acquisition which
the Borrower reasonably believes are not material to the operations of the
Borrower and its Subsidiaries taken as a whole), and all applicable waiting
periods shall have expired without any action being taken by any competent
authority which restrains, prevents or imposes materially adverse conditions
upon the consummation of the Transaction, the transactions contemplated by the
Documents and otherwise referred to herein or therein. Additionally, there shall
not exist any judgment, order, injunction or other restraint issued or filed or
a hearing seeking injunctive relief or other restraint pending or notified
prohibiting or imposing materially adverse conditions upon the consummation of
the Transaction or the making of Loans.
5.09 Consummation of the Transaction. (a) On the Initial Borrowing
-------------------------------
Date, those elements of the Acquisition contemplated to be consummated on such
date pursuant to the Acquisition Documents shall have been consummated
substantially in accordance with such Acquisition Documents and all applicable
laws, and each of the conditions precedent to the consummation of the
Acquisition set forth in the Acquisition Documents shall have been satisfied and
not waived except with the consent of the Agent and the Required Banks to the
reasonable satisfaction of the Agent and the Required Banks.
(b) (i) On the Initial Borrowing Date, the total commitments in
respect of the Indebtedness to be Refinanced shall have been terminated, and all
loans with respect thereto shall have been repaid in full, together with
interest thereon, all letters of credit issued thereunder shall have been
terminated and all other amounts due and owing pursuant to the Indebtedness to
be Refinanced shall have been repaid in full and all documents in respect of the
Indebtedness to be Refinanced and all guarantees with respect thereto shall have
been terminated (except as to indemnification provisions, which may survive) and
be of no further force and effect.
(ii) On the Initial Borrowing Date, the creditors in respect of the
Indebtedness to be Refinanced shall have terminated and released all security
interests and Liens on the assets owned by Holdings and its Subsidiaries (other
than those security interests and Liens on assets owned by Holdings and its
Subsidiaries located in Puerto Rico which have been assigned to the Collateral
Agent in form and substance satisfactory to the Collateral Agent). The Agent
shall have received such releases of security interests in and Liens on the
assets owned by Holdings and its Subsidiaries as may have been requested by the
Agent, which releases shall be in form and substance reasonably satisfactory to
the Agent. Without limiting the foregoing, there shall have been delivered (i)
proper termination statements (Form UCC-3 or the appropriate equivalent) for
filing under the UCC of each jurisdiction where a financing statement (Form UCC-
1 or the appropriate equivalent) was filed with respect to Holdings or any of
its Subsidiaries in connection with the security interests created with respect
to the Indebtedness to be Refinanced and the documentation related thereto, (ii)
termination or reassignment of any security interest
-32-
in, or Lien on, any patents, trademarks, copyrights, or similar interests of
Holdings or any of its Subsidiaries on which filings have been made, (iii)
terminations of all mortgages, leasehold mortgages, deeds of trust and leasehold
deeds of trust created with respect to property of Holdings or any of its
Subsidiaries, in each case, to secure the obligations in respect of the
Indebtedness to be Refinanced, all of which shall be in form and substance
reasonably satisfactory to the Agent, and (iv) all collateral owned by Holdings
or any of its Subsidiaries in the possession of any of the creditors in respect
of the Indebtedness to be Refinanced or any collateral agent or trustee under
any related security document shall have been returned to Holdings or such
Subsidiary.
(c) On or prior to the Initial Borrowing Date, there shall have been
delivered to the Banks true and correct copies of all Documents entered into in
connection with the Transaction (including, without limitation, all of the
Acquisition Documents and the Refinancing Documents), and all of the terms and
conditions of such Documents, as well as the structure of the Transaction and
the ownership interests in Holdings after giving effect to the Transaction,
shall be in form and substance reasonably satisfactory to the Agent and the
Required Banks.
(d) On or prior to the Initial Borrowing Date, Holdings shall have
issued to the Seller the Seller Subordinated Note and there shall have been
delivered to the Banks a true and correct copy of the Seller Subordinated Note,
and all terms of the Seller Subordinated Note shall be satisfactory in form and
substance to the Agent and the Required Banks, including, without limitation,
maturity, interest rate, amortization, covenants, defaults, remedies and
subordination to any Guaranteed Obligation.
(e) On the Initial Borrowing Date, the Agent shall have received
evidence in form, scope and substance reasonably satisfactory to it that the
matters set forth in this Section 5.09 have been satisfied on such date.
5.10 Security Documents. (a) On the Initial Borrowing Date,
------------------
Holdings, the Borrower and each Subsidiary Guarantor shall have duly authorized,
executed and delivered a Pledge Agreement in the form of Exhibit F, together
with such changes (or with such other documents) as may be requested by the
Collateral Agent in connection with local law (as modified, amended or
supplemented from time to time in accordance with the terms thereof and hereof,
the "Pledge Agreement") and shall have delivered to the Collateral Agent, as
pledgee thereunder, all of the Pledged Securities referred to therein, endorsed
in blank in the case of promissory notes or accompanied by executed and undated
stock powers in the case of capital stock, and the Pledge Agreement under such
other documents shall be in full force and effect.
(b) On the Initial Borrowing Date, Holdings, the Borrower and each
Subsidiary Guarantor shall have duly authorized, executed and delivered a
Security Agreement in the form of Exhibit G, together with such changes (or with
such other documents) as may be requested by the Collateral Agent in connection
with local law (as modified, amended or supplemented
-33-
from time to time in accordance with the terms thereof and hereof, the "Security
Agreement") covering all of the Security Agreement Collateral, together with:
(A) executed copies of Financing Statements (Form UCC-1 and/or UCC-3)
or appropriate local equivalent in appropriate form for filing under the
UCC or appropriate local equivalent of each jurisdiction as may be
necessary to perfect the security interests purported to be created by the
Security Agreement;
(B) certified copies of Requests for Information or Copies (Form UCC-
11), or equivalent reports, each of a recent date listing all effective
financing statements that name the Acquired Business, Holdings, the
Borrower or any of their respective Domestic Subsidiaries or a division or
operating unit of any such Person, as debtor and that are filed in the
jurisdictions referred to in clause (A) above, together with copies of such
financing statements (none of which shall cover the Collateral except (x)
those with respect to which appropriate termination statements executed by
the secured lender thereunder have been delivered to the Agent and (y) to
the extent evidencing Permitted Liens);
(C) evidence of the completion of all other recordings and filings
of, or with respect to, the Security Agreement as may be necessary or, in
the opinion of the Collateral Agent, desirable to perfect the security
interests intended to be created by the Security Agreement; and
(D) evidence that all other actions necessary or, in the reasonable
opinion of the Collateral Agent, desirable to perfect the security
interests purported to be created by the Security Agreement have been
taken;
and the Security Agreement and such other documents shall be in full force and
effect.
5.11 Subsidiary Guaranty. On the Initial Borrowing Date, each
-------------------
Subsidiary Guarantor shall have duly authorized, executed and delivered a
Subsidiary Guaranty in the form of Exhibit H (as modified, amended or
supplemented from time to time in accordance with the terms hereof and thereof,
the "Subsidiary Guaranty"), and the Subsidiary Guaranty shall be in full force
and effect.
5.12 Mortgages; Title Insurance; Surveys, etc. (a) On the Initial
-----------------------------------------
Borrowing Date, the Collateral Agent shall have received fully executed
counterparts of deeds of trust, mortgages and similar documents in each case in
form and substance satisfactory to the Collateral Agent (as amended, modified or
supplemented from time to time in accordance with the terms hereof and thereof,
each a "Mortgage" and, collectively, the "Mortgages") covering all the Mortgaged
Properties located in the United States, and arrangements reasonably
satisfactory to the Collateral Agent shall be in place to provide that
counterparts of such Mortgages shall be recorded within two Business Days after
the Initial Borrowing Date in all places to the extent necessary or desirable,
in the judgment of the Collateral Agent, effectively to
-34-
create a valid and enforceable first priority Lien, subject only to Permitted
Encumbrances, on each such Mortgaged Property in favor of the Collateral Agent
(or such other trustee as may be required or desired under local law) for the
benefit of the Secured Creditors.
(b) On the Initial Borrowing Date, (i) the Collateral Agent shall
have received certified copies of fully executed counterparts of one or more
chattel mortgages covering the personal property of the Borrower and its
Subsidiaries located in Puerto Rico, and arrangements reasonably satisfactory to
the Collateral Agent shall be in place to provide that certified copies of
counterparts of such chattel mortgages shall be presented for recording on the
Initial Borrowing Date or within ten days thereof in all places to the extent
necessary or desirable, in the judgment of the Collateral Agent, effectively to
create a valid and enforceable first priority Lien, subject only to Permitted
Encumbrances, on each such personal property and (ii) the Borrower and/or its
relevant Subsidiary, as the case may be, shall have executed a pledge agreement
(the "Puerto Rico Pledge Agreement") and each of the Borrower and such
Subsidiary shall have delivered to the Collateral Agent the Mortgage Notes (as
defined in the Puerto Rico Pledge Agreement) in respect of such chattel
mortgages.
(c) On the Initial Borrowing Date, the Collateral Agent shall have
received mortgagee title insurance policies (or binding commitments to issue
such title insurance policies) issued by title insurers reasonably satisfactory
to the Collateral Agent (the "Mortgage Policies") in amounts reasonably
satisfactory to the Collateral Agent and assuring the Collateral Agent that the
Mortgages are valid and enforceable first priority mortgage Liens on the
respective Mortgaged Properties, free and clear of all defects and encumbrances
except Permitted Encumbrances. Such Mortgage Policies shall be in form and
substance reasonably satisfactory to the Collateral Agent and (i) shall include
an endorsement for future advances under this Agreement, the Notes and the
Mortgages and for any other matter that the Collateral Agent in its discretion
may reasonably request (to the extent available in the respective jurisdiction
of each Mortgaged Property), (ii) shall not include an exception for mechanics'
liens and (iii) shall provide for affirmative insurance and such reinsurance
(including direct access agreements) as the Collateral Agent in its discretion
may reasonably request.
(d) On the Initial Borrowing Date, the Collateral Agent shall have
also received surveys in form and substance reasonably satisfactory to the
Collateral Agent of each Mortgaged Property designated as "owned" on Annex III
hereto, dated a recent date acceptable to the Collateral Agent, certified in a
manner reasonably satisfactory to the Collateral Agent by a licensed
professional surveyor reasonably satisfactory to the Collateral Agent. The
Collateral Agent shall also have received such estoppel letters, landlord waiver
letters, non-disturbance letters and similar assurances as may have been
requested by the Collateral Agent, which letters shall be in form and substance
reasonably satisfactory to the Collateral Agent.
-35-
5.13 Plans; Collective Bargaining Agreements; Existing Indebtedness
--------------------------------------------------------------
Agreements; Shareholders' Agreements; Management Agreements; Employment
-----------------------------------------------------------------------
Agreements; Tax Allocation Agreements; Material Contracts. On or prior to the
---------------------------------------------------------
Initial Borrowing Date, there shall have been delivered to the Banks copies,
certified as true and correct by an appropriate officer of the Borrower, of:
(a) any Plans that are to be assumed by Holdings or any of its
Subsidiaries after giving effect to the consummation of the Transaction and
for each such Plan (i) that is a "single-employer plan" (as defined in
Section 4001(a)(15) of ERISA) the most recently completed actuarial
valuation prepared therefor by such Plan's regular enrolled actuary and the
Schedule B, "Actuarial Information" to the IRS Form 5500 (Annual Report)
most recently filed with the Internal Revenue Service and (ii) that is a
"multiemployer plan" (as defined in Section 4001(a)(3) of ERISA), each of
the documents referred to in clause (i) either in the possession of
Holdings, any Subsidiary of Holdings or any ERISA Affiliate or reasonably
available thereto from the sponsor or trustees of such Plan;
(b) any collective bargaining agreements or any other similar
agreement or arrangement covering the employees of Holdings or any of its
Subsidiaries that are to remain in effect after giving effect to the
consummation of the Transaction (collectively, the "Collective Bargaining
Agreements");
(c) all agreements evidencing or relating to the Existing
Indebtedness that are to remain in effect after giving effect to the
consummation of the Transaction (collectively, the "Existing Indebtedness
Agreements");
(d) all agreements entered into by Holdings or any of its
Subsidiaries governing the terms and relative rights of its capital stock,
and any agreements entered into by shareholders relating to any such entity
with respect to their capital stock, in each case that are to remain in
effect after giving effect to the consummation of the Transaction
(collectively, the "Shareholders' Agreements");
(e) any material agreements (or the forms thereof) with members of,
or with respect to, the management of Holdings or any of its Subsidiaries
that are to remain in effect after giving effect to the consummation of the
Transaction (collectively, the "Management Agreements");
(f) any employment agreements entered into by Holdings or any of its
Subsidiaries (collectively, the "Employment Agreements");
(g) any tax sharing or tax allocation agreements entered into by
Holdings or any of its Subsidiaries (collectively, the "Tax Allocation
Agreements"); and
-36-
(h) all material contracts and licenses of Holdings or any of its
Subsidiaries that are to remain in effect after giving effect to the
consummation of the Transaction (collectively, the "Material Contracts");
all of which Plans, Collective Bargaining Agreements, Existing Indebtedness
Agreements, Shareholders' Agreements, Management Agreements, Employment
Agreements, Tax Allocation Agreements and Material Contracts shall be in form
and substance reasonably satisfactory to the Agent and shall be in full force
and effect on the Initial Borrowing Date.
5.14 Solvency Certificate; Environmental Analyses; Insurance
-------------------------------------------------------
Analyses; Financial Statements. On the Initial Borrowing Date, the Agent shall
------------------------------
have received:
(a) a Certificate from the Chief Financial Officer of Holdings, in
the form of Exhibit K, addressed to the Agent and each of the Banks and
dated the Initial Borrowing Date and supporting the conclusions, that,
after giving effect to the Transaction and the incurrence of all financings
contemplated herein, the Borrower (on a stand-alone basis), Holdings and
its Subsidiaries (on a consolidated basis) and the Borrower and its
Subsidiaries (on a consolidated basis) are not insolvent and will not be
rendered insolvent by the indebtedness incurred in connection herewith,
will not be left with unreasonably small capital with which to engage in
their respective businesses and will not have incurred debts beyond their
ability to pay such debts as they mature and become due;
(b) environmental assessments from Environ International Corporation
and Environmental Assessment Group, Limited, the results of which shall be
in form and substance satisfactory to the Agent and the Required Banks;
(c) analyses and evidence of insurance complying with the
requirements of Section 7.03 for the business and properties of Holdings
and its Subsidiaries (including, without limitation, the Acquired
Business), in scope, form and substance satisfactory to the Agent and the
Required Banks and naming the Collateral Agent as an additional insured
and/or loss payee, and stating that such insurance shall not be cancelled
or revised without 30 days prior written notice by the insurer to the
Collateral Agent; and
(d) the audited income statement (and related supplemental cash flow
information including depreciation and capital expenditures) for the
Acquired Business for the most recently completed fiscal year, and all of
the foregoing shall be in form and substance reasonably satisfactory to the
Agent and the Required Banks.
5.15 Pro Forma Balance Sheets. On or prior the Initial Borrowing
------------------------
Date, there shall have been delivered to the Agent, an unaudited pro forma
--- -----
consolidated balance sheet of each of Holdings and its Subsidiaries and the
Borrower and its Subsidiaries after giving effect to the Transaction and
prepared in accordance with GAAP, together with a related funds flow
-37-
statement, which pro forma balance sheets and funds flow statement shall be
--- -----
reasonably satisfactory in form and substance to the Agent and the Required
Banks.
5.16 Projections. On or prior to the Initial Borrowing Date, the
-----------
Banks shall have received the financial projections (the "Projections") set
forth on Annex IV hereto, which include the projected results of Holdings and
its Subsidiaries for the eight fiscal years ended after the Initial Borrowing
Date.
5.17 Existing Indebtedness. On the Initial Borrowing Date and after
---------------------
giving effect to the Transaction and the Loans incurred on the Initial Borrowing
Date, neither Holdings nor any of its Subsidiaries shall have any preferred
stock or Indebtedness outstanding except for Indebtedness permitted under
Section 8.04. On and as of the Initial Borrowing Date, all of the Existing
Indebtedness shall remain outstanding after giving effect to the Transaction and
the other transactions contemplated hereby without any default or events of
default existing thereunder or arising as a result of the Transaction and the
other transactions contemplated hereby (except to the extent amended or waived
by the parties thereto on terms and conditions reasonably satisfactory to the
Agent and the Required Banks). On and as of the Initial Borrowing Date, the
Agent and the Required Banks shall be satisfied with the amount of and the terms
and conditions of all Existing Indebtedness.
5.18 Payment of Fees. On the Initial Borrowing Date, all costs, fees
---------------
and expenses, and all other compensation contemplated by this Agreement, due to
the Agent or the Banks (including, without limitation, legal fees and expenses)
shall have been paid to the extent due.
5.19 Notice of Borrowing; Letter of Credit Request. The Agent shall
---------------------------------------------
have received a Notice of Borrowing satisfying the requirements of Section 1.03
with respect to each incurrence of Loans, and the Agent and the respective
Letter of Credit Issuer shall have received a Letter of Credit Request
satisfying the requirements of Section 2.02 with respect to each issuance of a
Letter of Credit.
The acceptance of the benefits of each Credit Event shall constitute a
representation and warranty by each Credit Party to each of the Banks that all
of the applicable conditions specified above exist as of the date of such Credit
Event. All of the certificates, legal opinions and other documents and papers
referred to in this Section 5, unless otherwise specified, shall be delivered to
the Agent at its Notice Office for the account of each of the Banks and, except
for the Notes, in sufficient counterparts for each of the Banks and shall be
satisfactory in form and substance to the Agent and the Required Banks.
SECTION 6. Representations, Warranties and Agreements. In order to
------------------------------------------
induce the Banks to enter into this Agreement and to make the Loans and issue
and/or participate in the Letters of Credit provided for herein, each of
Holdings and the Borrower makes the following representations, warranties and
agreements with the Banks in each case after giving effect to the Transaction,
all of which shall survive the execution and delivery of this
-38-
Agreement, the making of the Loans and the issuance of the Letters of Credit
(with the occurrence of each Credit Event being deemed to constitute a
representation and warranty that the matters specified in this Section 6 are
true and correct in all material respects on and as of the date of each such
Credit Event, unless stated to relate to a specific earlier date in which all
representations and warranties shall be true and correct in all material
respects as of such earlier date):
6.01 Corporate Status. Holdings and each of its Subsidiaries (i) is
----------------
a duly organized and validly existing corporation in good standing (to the
extent such concept is relevant in such jurisdiction) under the laws of the
jurisdiction of its organization, (ii) has the corporate power and authority to
own its property and assets and to transact the business in which it is engaged
and presently proposes to engage and (iii) is duly qualified and is authorized
to do business and is in good standing in all jurisdictions where it is required
to be so qualified and where the failure to be so qualified would have a
Material Adverse Effect.
6.02 Corporate Power and Authority. Each Credit Party has the
-----------------------------
corporate power and authority to execute, deliver and carry out the terms and
provisions of the Documents to which it is a party and has taken all necessary
corporate action to authorize the execution, delivery and performance of the
Documents to which it is a party. Each Credit Party has duly executed and
delivered each Document to which it is a party and each such Document
constitutes the legal, valid and binding obligation of such Credit Party
enforceable in accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws generally affecting creditors' rights
and by equitable principles (regardless of whether enforcement is sought in
equity or at law).
6.03 No Violation. Neither the execution, delivery or performance by
------------
any Credit Party of the Documents to which it is a party nor compliance by any
Credit Party with the terms and provisions thereof, nor the consummation of the
transactions contemplated herein or therein, (i) will contravene any applicable
provision of any law, statute, rule or regulation, or any order, writ,
injunction or decree of any court or governmental instrumentality, (ii) except
as set forth on Annex XVII, will conflict or be inconsistent with or result in
any breach of, any of the terms, covenants, conditions or provisions of, or
constitute a default under, or (other than pursuant to the Security Documents)
result in the creation or imposition of (or the obligation to create or impose)
any Lien upon any of the property or assets of Holdings or any of its
Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust,
loan agreement, credit agreement or any other material agreement or instrument
to which Holdings or any of its Subsidiaries is a party or by which it or any of
its property or assets are bound or to which it may be subject or (iii) will
violate any provision of the Certificate of Incorporation or By-Laws of Holdings
or any of its Subsidiaries.
6.04 Litigation. There are no actions, suits or proceedings pending
----------
or, to the knowledge of Holdings or any of its Subsidiaries, threatened, with
respect to Holdings or any of its Subsidiaries (i) that could reasonably be
expected to have a Material Adverse Effect or
-39-
(ii) that could reasonably be expected to have a material adverse effect on the
rights or remedies of the Banks or on the ability of any Credit Party to perform
its respective obligations to the Banks hereunder and under the other Credit
Documents to which it is, or will be, a party. Additionally, there does not
exist any judgment, order or injunction prohibiting or imposing material adverse
conditions upon the occurrence of any Credit Event.
6.05 Use of Proceeds; Margin Regulations. (a) The proceeds of all
-----------------------------------
Term Loans shall be utilized to finance the Transaction and to pay fees and
expenses incurred in connection therewith.
(b) The proceeds of Revolving Loans and Swingline Loans shall be
utilized for the general corporate and working capital purposes of the Borrower
and its Subsidiaries; provided that proceeds of Revolving Loans and Swingline
--------
Loans in an aggregate amount not to exceed $20,000,000 may be used to finance
the Transaction.
(c) Neither the making of any Loan hereunder, nor the use of the
proceeds thereof, will violate the provisions of Regulation G, T, U or X of the
Board of Governors of the Federal Reserve System and no part of the proceeds of
any Loan will be used to purchase or carry any Margin Stock or to extend credit
for the purpose of purchasing or carrying any Margin Stock.
6.06 Governmental Approvals. No order, consent, approval, license,
----------------------
authorization, or validation of, or filing, recording or registration with, or
exemption by, any foreign or domestic governmental or public body or authority,
or any subdivision thereof (other than any such approvals with respect to the
Acquisition which the Borrower reasonably believes are not material to the
operations of the Borrower and its Subsidiaries taken as a whole), is required
to authorize or is required in connection with (i) the execution, delivery and
performance of any Document or (ii) the legality, validity, binding effect or
enforceability of any Document.
6.07 Investment Company Act. Neither Holdings nor any of its
----------------------
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
6.08 Public Utility Holding Company Act. Neither Holdings nor any of
----------------------------------
its Subsidiaries is a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company," within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
6.09 True and Complete Disclosure. All factual information (taken as
----------------------------
a whole) heretofore or contemporaneously furnished by or on behalf of Holdings
or any of its Subsidiaries in writing to the Agent or any Bank (including,
without limitation, all information contained in the Documents) for purposes of
or in connection with this Agreement or any transaction contemplated herein is,
and all other such factual information (taken as a whole) hereafter furnished by
or on behalf of any such Persons in writing to the Agent or any Bank
-40-
will be, true and accurate in all material respects on the date as of which such
information is dated or certified and not incomplete by omitting to state any
material fact necessary to make such information (taken as a whole) not
misleading at such time in light of the circumstances under which such
information was provided.
6.10 Financial Condition; Financial Statements. (a) On and as of
-----------------------------------------
the Initial Borrowing Date, on a pro forma basis after giving effect to the
--- -----
Transaction and to all Indebtedness incurred, and to be incurred (including,
without limitation, the Loans), and Liens created, and to be created, by each
Credit Party in connection therewith, with respect to each of Holdings and its
Subsidiaries (on a consolidated basis) the Borrower and its Subsidiaries (on a
consolidated basis) and of the Borrower (on a stand-alone basis) (x) the sum of
the assets, at a fair valuation, of each of Holdings and its Subsidiaries (on a
consolidated basis), the Borrower and its Subsidiaries (on a consolidated basis)
and of the Borrower (on a stand-alone basis) will exceed its debts, (y) it has
not incurred nor intended to, nor believes that it will, incur debts beyond its
ability to pay such debts as such debts mature and (z) it will have sufficient
capital with which to conduct its business. For purposes of this Section 6.10,
"debt" means any liability on a claim, and "claim" means (i) right to payment
whether or not such a right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured or (ii) right to an equitable remedy for breach of
performance if such breach gives rise to a payment, whether or not such right to
an equitable remedy is reduced to judgment, fixed, contingent, matured,
unmatured, disputed, undisputed, secured or unsecured.
(b) The statements of financial condition of the Borrower and its
Subsidiaries at December 31, 1995 and the related statements of income and cash
flows and changes in shareholders' equity of Borrower and its Subsidiaries for
the approximately six-month period ended as of said date, copies of which have
heretofore been furnished to each Bank, present fairly in all material respects
the consolidated financial position of Borrower and its Subsidiaries at the date
of said statements and the results for the periods covered thereby. All such
financial statements have been prepared in accordance with GAAP consistently
applied except to the extent provided in the notes to said financial statements.
(c) Except as set forth on Annex XVI, the statements of financial
condition of the Acquired Business at March 31, 1996 and the related statements
of income and cash flows of the Acquired Business for the fiscal years ended as
of said dates, copies of which have heretofore been furnished to each Bank,
present fairly in all material respects the consolidated financial position of
the Acquired Business at the dates of said statements and the results for the
periods covered thereby. All such financial statements have been prepared in
accordance with GAAP consistently applied except to the extent provided in the
notes to said financial statements.
(d) Since March 31, 1996, nothing has occurred that has had or could
reasonably be expected to have a Material Adverse Effect.
-41-
(e) Except as fully reflected in the financial statements described
in Section 6.10(b) and (c) and the Indebtedness incurred under this Agreement,
(i) there were as of the Initial Borrowing Date (and after giving effect to any
Loans made on such date), no liabilities or obligations (excluding current
obligations incurred in the ordinary course of business) with respect to
Holdings or any of its Subsidiaries of any nature whatsoever (whether absolute,
accrued, contingent or otherwise and whether or not due), and (ii) neither
Holdings nor the Borrower know of any basis for the assertion against Holdings
or any of its Subsidiaries of any such liability or obligation which, in the
case of clause (i) or (ii) either individually or in the aggregate, is or would
be reasonably likely to have, a Material Adverse Effect.
(f) The Projections are based on good faith estimates and assumptions
made by the management of Holdings, and on the Initial Borrowing Date such
management believed that the Projections were reasonable and attainable, it
being recognized by the Banks, however, that projections as to future events are
not to be viewed as facts and that the actual results during the period or
periods covered by the Projections probably will differ from the projected
results and that the differences may be material. There is no fact known to
Holdings or any of its Subsidiaries which would have a Material Adverse Effect,
which has not been disclosed herein or in such other documents, certificates and
statements furnished to the Banks for use in connection with the transactions
contemplated hereby.
6.11 Security Interests. On and after the Initial Borrowing Date,
------------------
each of the Security Documents creates (or after the execution and delivery
thereof will create), as security for the Obligations, a valid and enforceable
perfected security interest in and Lien on all of the Collateral subject
thereto, superior to and prior to the rights of all third Persons and subject to
no other Liens (except that the Security Agreement Collateral, the Mortgaged
Properties and the collateral covered by the Additional Security Documents may
be subject to Permitted Liens relating thereto), in favor of the Collateral
Agent. No filings or recordings are required in order to perfect the security
interests created under any Security Document except for filings or recordings
required in connection with any such Security Document which shall have been
made on or prior to the Initial Borrowing Date as contemplated by Section
5.10(b) or on or prior to the execution and delivery thereof as contemplated by
Sections 7.11, 7.15 and 8.14.
6.12 Representations and Warranties in Other Documents. All
-------------------------------------------------
representations and warranties set forth in the other Documents were true and
correct in all respects as of the time such representations and warranties were
made and shall be true and correct in all respects as of the Initial Borrowing
Date as if such representations and warranties were made on and as of such date,
unless stated to relate to a specific earlier date, in which case such
representations and warranties shall be true and correct in all respects as of
such earlier date, in each case except to the extent that the failure of any
such representation and warranty to be true and correct in all respects, either
individually or in the aggregate with other such representations and warranties,
is not reasonably likely to have a Material Adverse Effect.
6.13 Transaction. At the time of consummation thereof, the
-----------
Transaction shall have been consummated in all material respects in accordance
with the terms of the Documents
-42-
and all applicable laws. At the time of consummation thereof, all consents and
approvals of, and filings and registrations with, and all other actions in
respect of, all governmental agencies, authorities or instrumentalities required
in order to make or consummate the Transaction have been obtained, given, filed
or taken or waived and are or will be in full force and effect (or effective
judicial relief with respect thereto has been obtained) except where the failure
to obtain, give, file, or take would not reasonably be expected to have a
Material Adverse Effect. All applicable waiting periods with respect thereto
have or, prior to the time when required, will have, expired without, in all
such cases, any action being taken by any competent authority which restrains,
prevents, or imposes material adverse conditions upon the Transaction.
Additionally, there does not exist any judgment, order or injunction prohibiting
or imposing material adverse conditions upon the Transaction, or the performance
by Holdings and its Subsidiaries of their obligations under the Documents and
all applicable laws.
6.14 Special Purpose Corporation. Holdings has no significant assets
---------------------------
(other than the capital stock of the Borrower, immaterial assets used for the
performance of those activities permitted to be performed by Holdings pursuant
to Section 8.01(b) and Borrower Subordinated Notes) or liabilities (other than
under this Agreement and the other Credit Documents, those liabilities under the
other Documents, those liabilities permitted to be incurred by Holdings pursuant
to Section 8.01(b)) and, as and when issued from time to time in accordance with
the terms of this Agreement, Permitted Holdings PIK Securities and Shareholder
Subordinated Notes).
6.15 Compliance with ERISA. (a) Each Plan is in substantial
---------------------
compliance with ERISA and the Code; no Reportable Event has occurred with
respect to a Plan; no Plan is insolvent or in reorganization; no Plan has an
Unfunded Current Liability; no Plan has an accumulated or waived funding
deficiency, has permitted decreases in its funding standard account or has
applied for a waiver of the minimum funding standard or an extension of any
amortization period within the meaning of Section 412 of the Code; all
contributions required to be made with respect to a Plan and a Foreign Pension
Plan have been timely made; neither Holdings nor any Subsidiary of Holdings nor
any ERISA Affiliate has incurred any material liability to or on account of a
Plan pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201,
4204 or 4212 of ERISA or Section 401(a)(29), 4971, 4975 or 4980 of the Code or
reasonably expects to incur any material liability (including any indirect,
contingent or secondary liability) under any of the foregoing Sections with
respect to any Plan (other than liabilities of any ERISA Affiliate which could
not, by operation of law or otherwise, become a liability of Holdings or any of
its Subsidiaries); no proceedings have been instituted to terminate, or to
appoint a trustee to administer, any Plan; no condition exists which presents a
material risk to Holdings or any Subsidiary of Holdings or any ERISA Affiliate
of incurring a liability to or on account of a Plan pursuant to the foregoing
provisions of ERISA and the Code; using actuarial assumptions and computation
methods consistent with subpart 1 of subtitle E of Title IV of ERISA, the
aggregate liabilities of Holdings and its Subsidiaries and its ERISA Affiliates
to all Plans which are multiemployer plans (as defined in Section 4001(a)(3) of
ERISA) in the event of a complete withdrawal therefrom, as of the close of the
most recent fiscal year of each such Plan ended prior to the date of the most
recent Credit Event, would not
-43-
result in a Material Adverse Effect; no lien imposed under the Code or ERISA on
the assets of Holdings or any Subsidiary of Holdings or any ERISA Affiliate
exists or is likely to arise on account of any Plan; and Holdings and its
Subsidiaries do not maintain or contribute to any employee welfare benefit plan
(as defined in Section 3(1) of ERISA) which provides benefits to retired
employees or other former employees (other than as required by Section 601 of
ERISA) or any employee pension benefit plan (as defined in Section 3(2) of
ERISA) the obligations with respect to which could reasonably be expected to
have a Material Adverse Effect.
(b) Each Foreign Pension Plan has been maintained in substantial
compliance with its terms and with the requirements of any and all applicable
laws, statutes, rules, regulations and orders and has been maintained, where
required, in good standing with applicable regulatory authorities. Neither
Holdings nor any of its Subsidiaries has incurred any material obligation in
connection with the termination of or withdrawal from any Foreign Pension Plan.
The present value of the accrued benefit liabilities (whether or not vested)
under each Foreign Pension Plan which is funded, determined as of the end of the
most recently ended fiscal year of the Borrower on the basis of actuarial
assumptions, each of which is reasonable, did not exceed the current value of
the assets of such Foreign Pension Plan, and for each Foreign Pension Plan which
is not funded, the obligations of such Foreign Pension Plan are properly
accrued.
6.16 Capitalization. (a) On the Initial Borrowing Date, the
--------------
authorized capital stock of (i) Holdings shall consist of 5,400,000 shares of
common stock, $.01 par value per share (such authorized shares of common stock,
together with any subsequently authorized shares of common stock of Holdings,
the "Holdings Common Stock"), of which [3,870,000] shares shall be issued and
outstanding and (ii) 600,000 shares of Class L common stock, 0.01 par value per
share (such authorized shares of Class L common stock, together with any
subsequently authorized shares of Class L common stock of Holdings, the
"Holdings Class L Common Stock"), of which [430,000] shares will be issued and
outstanding. All such outstanding shares have been duly and validly issued, are
fully paid and nonassessable. Except as set forth on Annex X hereto, Holdings
does not have outstanding any securities convertible into or exchangeable for
its capital stock or outstanding any rights to subscribe for or to purchase, or
any options for the purchase of, or any agreement providing for the issuance
(contingent or otherwise) of, or any calls, commitments or claims of any
character relating to, its capital stock.
(b) On the Initial Borrowing Date and after giving effect to the
Transaction and the other transactions contemplated hereby, the authorized
capital stock of the Borrower shall consist of 1,000 shares of common stock,
$.01 par value per share, all of which shares shall be issued and outstanding
and owned by Holdings. All such outstanding shares have been duly and validly
issued and are fully paid and nonassessable. The Borrower does not have
outstanding any securities convertible into or exchangeable for its capital
stock or outstanding any rights to subscribe for or to purchase, or any options
for the purchase of, or any agreements
-44-
providing for the issuance (contingent or otherwise) of, or any calls,
commitments or claims of any character relating to, its capital stock.
6.17 Subsidiaries. On and as of the Initial Borrowing Date and after
------------
giving effect to the consummation of the Transaction, Holdings has no
Subsidiaries other than the Borrower and its Subsidiaries, and the Borrower has
no Subsidiaries other than those Subsidiaries listed on Annex V. Annex V
correctly sets forth, as of the Initial Borrowing Date and after giving effect
to the Transaction, the percentage ownership (direct and indirect) of Holdings
in each class of capital stock of each of its Subsidiaries and also identifies
the direct owner thereof. All outstanding shares of capital stock of each
Subsidiary of the Borrower have been duly and validly issued, are fully paid and
nonassessable and have been issued free of preemptive rights. No Subsidiary of
the Borrower has outstanding any securities convertible into or exchangeable for
its capital stock or outstanding any right to subscribe for or to purchase, or
any options or warrants for the purchase of, or any agreement providing for the
issuance (contingent or otherwise) of or any calls, commitments or claims of any
character relating to, its capital stock or any stock appreciation or similar
rights.
6.18 Intellectual Property. Except as set forth on Annex XIII,
---------------------
Holdings and each of its Subsidiaries owns or holds a valid license to use all
the material patents, trademarks, permits, service marks, trade names,
technology, know-how and formulas or other rights with respect to the foregoing,
free from restrictions that are materially adverse to the use thereof, that are
used in the operation of the business of Holdings and each of its Subsidiaries
as presently conducted.
6.19 Compliance with Statutes, etc. Holdings and each of its
------------------------------
Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property (including compliance with all applicable Environmental Laws
with respect to any Real Property or governing its business and the requirements
of any permits issued under such Environmental Laws with respect to any such
Real Property or the operations of Holdings or any of its Subsidiaries), except
such non-compliance as is not likely to, individually or in the aggregate, have
a Material Adverse Effect.
6.20 Environmental Matters. (a) Holdings and each of its
---------------------
Subsidiaries have complied with, and on the date of each Credit Event are in
compliance with, all applicable Environmental Laws and the requirements of any
permits issued under such Environmental Laws. There are no pending or, to the
best knowledge of Holdings and the Borrower, past or threatened Environmental
Claims against Holdings or any of its Subsidiaries or any Real Property owned or
operated by Holdings or any of its Subsidiaries that individually or in the
aggregate would reasonably be expected to have a Material Adverse Effect. There
are no facts, circumstances, conditions or occurrences on any Real Property
owned or operated by Holdings or any of its Subsidiaries or, to the best
knowledge of Holdings and the Borrower, on any property adjoining or in the
vicinity of any such Real Property that would reasonably be expected (i) to form
the basis of an Environmental Claim against Holdings or any of its
-45-
Subsidiaries or any such Real Property that individually or in the aggregate
would reasonably be expected to have a Material Adverse Effect or (ii) to cause
any such Real Property to be subject to any restrictions on the ownership,
occupancy, use or transferability of such Real Property by Holdings or any of
its Subsidiaries under any applicable Environmental Law.
(b) Hazardous Materials have not at any time been generated, used,
treated or stored on, or transported to or from, any Real Property owned or
operated by Holdings or any of its Subsidiaries where such generation, use,
treatment or storage has violated or would reasonably be expected to violate any
Environmental Law. Hazardous Materials have not at any time been Released on or
from any Real Property owned or operated by Holdings or any of its Subsidiaries.
There are not now any underground storage tanks located on any Real Property
owned or operated by Holdings or any of its Subsidiaries.
(c) Notwithstanding anything to the contrary in this Section 6.20,
the representations made in this Section 6.20 shall only be untrue if the
aggregate effect of all restrictions, failures, noncompliance, Environmental
Claims, Releases and presence of underground storage tanks, in each case of the
types described above, would reasonably be expected to have a Material Adverse
Effect.
6.21 Properties. All Real Property owned or leased by Holdings or
----------
any of its Domestic Subsidiaries as of the Initial Borrowing Date and after
giving effect to the Transaction, and the nature of the interest therein, is
correctly set forth in Annex III. Holdings and each of its Subsidiaries has
good and marketable title to, or a validly subsisting leasehold interest in, all
material properties owned or leased by it, including all Real Property reflected
in Annex III or in the financial statements referred to in Section 6.10(b) or
(c), free and clear of all Liens, other than Permitted Liens.
6.22 Labor Relations. Neither Holdings nor any of its Subsidiaries
---------------
is engaged in any unfair labor practice that could reasonably be expected to
have a Material Adverse Effect. There is (i) no unfair labor practice complaint
pending against Holdings or any of its Subsidiaries or, to the best knowledge of
Holdings and the Borrower, threatened against any of them, before the National
Labor Relations Board, and no grievance or arbitration proceeding arising out of
or under any collective bargaining agreement is so pending against Holdings or
any of its Subsidiaries or, to the best knowledge of Holdings and the Borrower,
threatened against any of them, (ii) no strike, labor dispute, slowdown or
stoppage pending against Holdings or any of its Subsidiaries or, to the best
knowledge of Holdings and the Borrower, threatened against Holdings or any of
its Subsidiaries and (iii) to the best knowledge of Holdings and the Borrower,
no union representation question existing with respect to the employees of
Holdings or any of its Subsidiaries and, to the best knowledge of Holdings and
the Borrower, no union organizing activities are taking place, except (with
respect to any matter specified in clause (i), (ii) or (iii) above, either
individually or in the aggregate) such as is not reasonably likely to have a
Material Adverse Effect.
-46-
6.23 Tax Returns and Payments. All Federal, material state and other
------------------------
material returns, statements, forms and reports for taxes (the "Returns")
required to be filed by or with respect to the income, properties or operations
of the Acquired Business and of Holdings and/or any of its Subsidiaries have
been timely filed with the appropriate taxing authority. The Returns accurately
reflect all liability for taxes of the Acquired Business and of Holdings and its
Subsidiaries, as the case may be, for the periods covered thereby. The Acquired
Business and Holdings and each of its Subsidiaries have paid all taxes payable
by them other than taxes which are not yet due and payable, and other than those
contested in good faith by appropriate proceedings and for which adequate
reserves have been established in accordance with GAAP. Except as disclosed in
the financial statements referred to in Section 6.10(b) and (c), there is no
material action, suit, proceeding, investigation, audit, or claim now pending
or, to the knowledge of Holdings and the Borrower, threatened by any authority
regarding any taxes relating to the Acquired Business or to Holdings or any of
its Subsidiaries. As of the Initial Borrowing Date, neither the Acquired
Business nor Holdings or any of its Subsidiaries has entered into an agreement
or waiver or been requested to enter into an agreement or waiver extending any
statute of limitations relating to the payment or collection of taxes of the
Acquired Business, Holdings or any of its Subsidiaries, or is aware of any
circumstances that would cause the taxable years or other taxable periods of the
Acquired Business or Holdings or any of its Subsidiaries not to be subject to
the normally applicable statute of limitations. Neither the Acquired Business
nor Holdings or any of its Subsidiaries have provided, with respect to
themselves or property held by them, any consent under Section 341 of the Code.
Neither the Acquired Business nor Holdings or any of its Subsidiaries has
incurred, or will incur, any material tax liability in connection with the
Transaction and the other transactions contemplated hereby.
6.24 Existing Indebtedness. Annex VII sets forth a true and complete
---------------------
list of all Indebtedness of Holdings and its Subsidiaries as of the Initial
Borrowing Date and which is to remain outstanding after giving effect to the
Transaction and the incurrence of Loans on such date (excluding the Loans and
the Letters of Credit, the "Existing Indebtedness"), in each case showing the
aggregate principal amount thereof and the name of the respective borrower and
any other entity which directly or indirectly guaranteed such debt.
6.25 Subordination. On and after the issuance of the Seller
-------------
Subordinated Note, the subordination provisions contained in the Seller
Subordinated Note shall be enforceable against Holdings and the holder thereof,
and all Obligations shall be within the definition of "Superior Debt" included
in such subordination provisions.
SECTION 7. Affirmative Covenants. Holdings and the Borrower hereby
---------------------
covenant and agree that on the Effective Date and thereafter for so long as this
Agreement is in effect and until the Commitments have terminated, no Letters of
Credit or Notes are outstanding and the Loans and Unpaid Drawings, together with
interest, Fees and all other Obligations (other than any indemnities described
in Section 12.13 hereof which are not then due and payable) incurred hereunder,
are paid in full:
-47-
7.01 Information Covenants. Holdings will furnish to each Bank:
---------------------
(a) Monthly Reports. Within 30 days after the end of each fiscal
---------------
month of Holdings (or 45 days in the case of each fiscal month ending on or
prior to December 31, 1996), the consolidated balance sheet of the Borrower and
its Subsidiaries as at the end of such fiscal month and the related consolidated
statements of income and retained earnings and of cash flows for such fiscal
month and for the elapsed portion of the fiscal year ended with the last day of
such fiscal month, setting forth comparable budgeted figures for such fiscal
month and, commencing with the first fiscal month to end after the first
anniversary of the Initial Borrowing Date, setting forth comparative figures for
the corresponding month in the prior fiscal year, all of which shall be
certified by the chief financial officer or other Authorized Officer of the
Borrower, subject to normal year-end audit adjustments and the absence of
footnote disclosure.
(b) Quarterly Financial Statements. Within 45 days after the close
------------------------------
of each quarterly accounting period in each fiscal year of Holdings (or 60 days
in the case of quarterly accounting periods ending on or prior to December 31,
1996), the consolidated balance sheet of Holdings and its Subsidiaries as at the
end of such quarterly accounting period and the related consolidated statements
of income and retained earnings and of cash flows for such quarterly accounting
period and for the elapsed portion of the fiscal year ended with the last day of
such quarterly accounting period, all of which shall be in reasonable detail and
certified by the chief financial officer or other Authorized Officer of Holdings
that they fairly present the financial condition of Holdings and its
Subsidiaries as of the dates indicated and the results of their operations and
changes in their cash flows for the periods indicated, subject to normal year-
end audit adjustments and the absence of footnote disclosure.
(c) Annual Financial Statements. Within 90 days after the close of
---------------------------
each fiscal year of Holdings (or 120 days in the case of the fiscal year ended
December 31, 1996), the consolidated balance sheet of Holdings and its
Subsidiaries as at the end of such fiscal year and the related consolidated
statements of income and retained earnings and of cash flows for such fiscal
year, setting forth comparative budgeted figures for such fiscal year and,
commencing with the fiscal year ending December 31, 1998, setting forth
comparative consolidated figures for the preceding fiscal year, and, in the case
of all such financial statements (but excluding such comparative budgeted
figures), certified by Price Waterhouse LLP or such other independent certified
public accountants of recognized national standing as shall be reasonably
acceptable to the Agent, in each case to the effect that such statements fairly
present in all material respects the financial condition of Holdings and its
Subsidiaries as of the dates indicated and the results of their operations and
cash flows, together with a certificate of such accounting firm stating that in
the course of its regular audit of the business of Holdings and its
Subsidiaries, which audit was conducted in accordance with generally accepted
auditing standards, no Default or Event of Default which has occurred and is
continuing has come to their attention insofar as such Default or Event of
Default relates to financial and accounting matters or, if such a Default or
Event of Default has come to their attention a statement as to the nature
thereof.
-48-
(d) Budgets, etc. Not more than 60 days after the commencement of
-------------
each fiscal year of the Borrower, budgets of the Borrower and its Subsidiaries
in reasonable detail for each of the four fiscal quarters of such fiscal year as
customarily prepared by management for its internal use setting forth, with
appropriate discussion, the principal assumptions upon which such budgets are
based. Together with each delivery of financial statements pursuant to Section
7.01(b) and (c), a comparison of the current year to date financial results
(other than in respect of the balance sheets included therein) against the
budgets required to be submitted pursuant to this clause (d) shall be presented.
(e) Officer's Certificates. At the time of the delivery of the
----------------------
financial statements provided for in Section 7.01(b) and (c), a certificate of
the chief financial officer or other Authorized Officer of Holdings to the
effect that no Default or Event of Default exists or, if any Default or Event of
Default does exist, specifying the nature and extent thereof, which certificate
shall set forth the calculations required to establish whether Holdings and
its Subsidiaries were in compliance with the provisions of Sections 8.04(d),
8.04(h), 8.05 and 8.08 through and including 8.11, as at the end of such fiscal
quarter or year, as the case may be. In addition, at the time of the delivery
of the financial statements provided for in Section 7.01(c), a certificate of
the chief financial officer or other Authorized Officer of Holdings setting
forth the amount of, and calculations required to establish the amount of,
Excess Cash Flow for the Excess Cash Flow Period ending on the last day of the
respective fiscal year. Further, at the time that Holdings either contributes
or loans any cash to the Borrower the proceeds of which are not required to be
used to repay Term Loans as provided in clause (i) of the final proviso to
Section 4.02(A)(d), a certificate of the chief financial officer or other
Authorized Officer of Holdings setting forth the intended use by the Borrower or
its Subsidiaries of such proceeds.
(f) Notice of Default or Litigation. Promptly, and in any event
-------------------------------
within five Business Days (or 10 Business Days in the case of clause (y) below)
after any Senior Officer of Holdings or any of its Subsidiaries obtains
knowledge thereof, notice of (x) the occurrence of any event which constitutes a
Default or an Event of Default, which notice shall specify the nature thereof,
the period of existence thereof and what action Holdings or the Borrower
proposes to take with respect thereto and shall state that such notice is a
"notice of default" and (y) the commencement of, or threat of, or any
significant development in, any litigation or governmental proceeding pending
against Holdings or any of its Subsidiaries which is likely to have a Material
Adverse Effect, or a material adverse effect on the ability of any Credit Party
to perform its respective obligations hereunder or under any other Credit
Document.
(g) Auditors' Reports. Promptly upon receipt thereof, a copy of each
-----------------
report or "management letter" submitted to Holdings or any of its Subsidiaries
by its independent accountants in connection with any annual, interim or special
audit made by them of the books of Holdings or any of its Subsidiaries.
(h) Environmental Matters. Promptly after obtaining knowledge of any
---------------------
of the following, written notice of:
-49-
(i) any pending or threatened material Environmental Claim against
Holdings or any of its Subsidiaries or any Real Property owned or operated
by Holdings or any of its Subsidiaries;
(ii) any condition or occurrence on any Real Property owned or
operated by Holdings or any of its Subsidiaries that (x) results in
material noncompliance by Holdings or any of its Subsidiaries with any
applicable Environmental Law or (y) could reasonably be anticipated to form
the basis of a material Environmental Claim against Holdings or any of its
Subsidiaries or any such Real Property;
(iii) any condition or occurrence on any Real Property owned or
operated by Holdings or any of its Subsidiaries that could reasonably be
anticipated to cause such Real Property to be subject to any material
restrictions on the ownership, occupancy, use or transferability by
Holdings or its Subsidiary, as the case may be, of its interest in such
Real Property under any Environmental Law; and
(iv) the taking of any material removal or remedial action in
response to the actual or alleged presence of any Hazardous Material on any
Real Property owned or operated by Holdings or any of its Subsidiaries
where Holdings or any of its Subsidiaries is or is reasonably expected to
be responsible for the cost of such action or where the taking of such
action could reasonably be expected to materially interfere with the
operations of Holdings or any of its Subsidiaries at such Real Property.
All such notices shall describe in reasonable detail the nature of the
claim, investigation, condition, occurrence or removal or remedial action and
Holdings' or the Borrower's response thereto. In addition, Holdings agrees to
provide the Banks with copies of all material written communications by Holdings
or any of its Subsidiaries with any Person, government or governmental agency
relating to any of the matters set forth in clauses (i)-(iv) above, and such
detailed reports relating to any of the matters set forth in clauses (i)-(iv)
above, as may reasonably be requested by the Agent or the Required Banks.
(i) Other Information. Promptly upon transmission thereof, copies of
-----------------
any filings and registrations with, and reports to, the SEC by Holdings or any
of its Subsidiaries and copies of all financial statements, proxy statements,
notices and reports as Holdings or any of its Subsidiaries shall generally send
to analysts or the holders of their capital stock or of the Seller Subordinated
Note in their capacity as holders (in each case to the extent not theretofore
delivered to the Banks pursuant to this Agreement) and, with reasonable
promptness, such other information or documents (financial or otherwise) as the
Agent on its own behalf or on behalf of any Bank may reasonably request from
time to time.
7.02 Books, Records and Inspections. Holdings will, and will cause
------------------------------
each of its Subsidiaries to, permit, upon notice to the chief financial officer
or other Authorized Officer of Holdings or the Borrower, (x) officers and
designated representatives of the Agent or any Bank to visit and inspect any of
the properties or assets of Holdings and any of its Subsidiaries
-50-
in whomsoever's possession, and to examine the books of account of Holdings and
any of its Subsidiaries and discuss the affairs, finances and accounts of
Holdings and of any of its Subsidiaries with, and be advised as to the same by,
their officers and independent accountants, all at such reasonable times and
intervals and to such reasonable extent as the Agent or any Bank may desire and
(y) the Agent, at the request of the Required Banks, to conduct, at Holdings'
and the Borrower's expense, an audit of the accounts receivable and/or
inventories of the Borrower and its Subsidiaries at such times (but no more
frequently than once a year unless an Event of Default has occurred and is
continuing) as the Required Banks shall reasonably require.
7.03 Insurance. Holdings will, and will cause each of its
---------
Subsidiaries to, at all times from and after the Effective Date maintain in full
force and effect insurance with reputable and solvent insurance carriers in such
amounts, covering such risks and liabilities and with such deductibles or self-
insured retentions as are in accordance with normal industry practice. At any
time that insurance at the levels described in Annex VI is not being maintained
by Holdings and its Subsidiaries, Holdings will notify the Banks in writing
thereof and, if thereafter notified by the Agent to do so, Holdings will obtain
insurance at such levels to the extent then generally available (but in any
event within the deductible or self-insured retention limitations set forth in
the preceding sentence) or otherwise as are acceptable to the Agent. Holdings
will furnish to the Agent on the Initial Borrowing Date and on each date as the
Agent or the Required Banks may reasonably request, a summary of the insurance
carried in respect of Holdings and its Subsidiaries and the assets of Holdings
and its Subsidiaries together with certificates of insurance and other evidence
of such insurance, if any, naming the Collateral Agent as an additional insured
and/or loss payee.
7.04 Payment of Taxes. Holdings will pay and discharge, and will
----------------
cause each of its Subsidiaries to pay and discharge, all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits, or
upon any properties belonging to it, prior to the date on which material
penalties attach thereto, and all lawful claims for sums that have become due
and payable which, if unpaid, might become a Lien not otherwise permitted under
Section 8.03(a) or charge upon any properties of Holdings or any of its
Subsidiaries; provided, that neither Holdings nor any of its Subsidiaries shall
--------
be required to pay any such tax, assessment, charge, levy or claim which is
being contested in good faith and by proper proceedings if it has maintained
adequate reserves with respect thereto in accordance with GAAP.
7.05 Corporate Franchises. Holdings will do, and will cause each of
--------------------
its Subsidiaries to do, or cause to be done, all things necessary to preserve
and keep in full force and effect its existence and its material rights,
franchises and authority to do business; provided, however, that any transaction
-------- -------
permitted by Section 8.02 will not constitute a breach of this Section 7.05.
7.06 Compliance with Statutes, etc. Holdings will, and will cause
------------------------------
each of its Subsidiaries to, comply with all applicable statutes, regulations
and orders of, and all applicable
-51-
restrictions imposed by, all governmental bodies, domestic or foreign, in
respect of the conduct of its business and the ownership of its property
(including applicable statutes, regulations, orders and restrictions relating to
environmental standards and controls) other than such non-compliance as would
not have a Material Adverse Effect or a material adverse effect on the ability
of any Credit Party to perform its obligations under any Credit Document to
which it is a party.
7.07 Compliance with Environmental Laws. (a) Holdings will pay, and
----------------------------------
will cause each of its Subsidiaries to pay, all costs and expenses incurred by
it in keeping in compliance with all Environmental Laws, and will keep or cause
to be kept all Real Properties free and clear of any Liens imposed pursuant to
such Environmental Laws; and (b) neither Holdings nor any of its Subsidiaries
will generate, use, treat, store, release or dispose of, or permit the
generation, use, treatment, storage, release or disposal of, Hazardous Materials
on any Real Property, or transport or permit the transportation of Hazardous
Materials to or from any such Real Property, unless the failure to comply with
the requirements specified in clause (a) or (b) above, either individually or in
the aggregate, would not reasonably be expected to have a Material Adverse
Effect. If Holdings or any of its Subsidiaries, or any tenant or occupant of
any Real Property, cause or permit any intentional or unintentional act or
omission resulting in the presence or Release of any Hazardous Material (except
in compliance with applicable Environmental Laws), each of Holdings and the
Borrower agrees to undertake, and/or to cause any of its Subsidiaries, tenants
or occupants to undertake, at their sole expense, any clean up, removal,
remedial or other action required pursuant to Environmental Laws to remove and
clean up any Hazardous Materials from any Real Property except where the failure
to do so would not be reasonably expected to have a Material Adverse Effect;
provided, that neither Holdings nor any of its Subsidiaries shall be required to
--------
comply with any such order or directive which is being contested in good faith
and by proper proceedings so long as it has maintained adequate reserves with
respect to such compliance to the extent required in accordance with GAAP.
7.08 ERISA. As soon as possible and, in any event, within 10 days
-----
after Holdings or any Subsidiary of Holdings or any ERISA Affiliate knows or has
reason to know of the occurrence of any of the following events to the extent
that one or more of such events is reasonably likely to result in a material
liability to Holdings or any Subsidiary of Holdings, Holdings will deliver to
each of the Banks a certificate of the chief financial officer or other
Authorized Officer of Holdings setting forth details as to such occurrence and
the action, if any, which Holdings, such Subsidiary or such ERISA Affiliate is
required or proposes to take, together with any notices required or proposed to
be given to or filed with or by Holdings, such Subsidiary, such ERISA Affiliate,
the PBGC, a Plan participant or the Plan administrator with respect thereto:
that a Reportable Event has occurred, that an accumulated funding deficiency has
been incurred or an application may be or has been made to the Secretary of the
Treasury for a waiver or modification of the minimum funding standard (including
any required installment payments) or an extension of any amortization period
under Section 412 of the Code with respect to a Plan; that a contribution
required to be made to a Plan or Foreign Pension Plan has not been timely made;
that a Plan has been or may be terminated, reorganized, partitioned or
-52-
declared insolvent under Title IV of ERISA; that a Plan has an Unfunded Current
Liability giving rise to a lien under ERISA or the Code; that proceedings may be
or have been instituted to terminate or appoint a trustee to administer a Plan;
that a proceeding has been instituted pursuant to Section 515 of ERISA to
collect a delinquent contribution to a Plan; that Holdings, any Subsidiary of
Holdings or any ERISA Affiliate will or may incur any liability (including any
contingent or secondary liability) to or on account of the termination of or
withdrawal from a Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212
of ERISA or with respect to a Plan under Section 401(a)(29), 4971, 4975 or 4980
of the Code or Section 409, 502(i) or 502(l) of ERISA; or that Holdings or any
Subsidiary of Holdings has or may incur any liability under any employee welfare
benefit plan (within the meaning of Section 3(1) of ERISA) that provides
benefits to retired employees or other former employees (other than as required
by Section 601 of ERISA) or any employee pension benefit plan (as defined in
Section 3(2) of ERISA). At the request of any Bank, Holdings will deliver to
such Bank a complete copy of the annual report (Form 5500) of each Plan required
to be filed with the Internal Revenue Service. In addition, at the request of
any Bank, copies of annual reports and any notices received by Holdings or any
Subsidiary of Holdings or any ERISA Affiliate with respect to any Plan or
Foreign Pension Plan shall be delivered to such Bank no later than 10 days after
the date of any such request.
7.09 Good Repair. Holdings will, and will cause each of its
-----------
Subsidiaries to, ensure that its material properties and equipment used in its
business are kept in good repair, working order and condition, normal wear and
tear and damage by casualty excepted, and, subject to Section 8.08, that from
time to time there are made in such properties and equipment all needful and
proper repairs, renewals, replacements, extensions, additions, betterments and
improvements thereto, to the extent and in the manner useful or customary for
companies in similar businesses.
7.10 End of Fiscal Years; Fiscal Quarters. Holdings will, for
------------------------------------
financial reporting purposes, cause (i) each of its, and each of its
Subsidiaries', fiscal years to end on December 31 of each year, provided that
the fiscal year of ▇▇▇▇▇▇-▇▇▇▇▇▇ (Puerto Rico) shall end on November 30 of each
year and (ii) each of its, and each of its Subsidiaries', fiscal quarters to end
on dates which are consistent with a fiscal year ending on December 31, provided
that the fiscal quarters of ▇▇▇▇▇▇-▇▇▇▇▇▇ (Puerto Rico) shall end on dates which
are consistent with a fiscal year ending on November 30.
7.11 Additional Security; Further Assurances. (a) Holdings will,
---------------------------------------
and will cause each of its Domestic Subsidiaries (and to the extent that Section
7.15 is operative, each of its Foreign Subsidiaries) to, grant to the Collateral
Agent security interests and mortgages in such assets and properties of Holdings
and its Subsidiaries as are not covered by the Security Documents, and as may be
requested from time to time by the Agent or the Required Banks (collectively,
the "Additional Security Documents"). All such security interests and mortgages
shall be granted pursuant to documentation reasonably satisfactory in form and
substance to the Agent and shall constitute valid and enforceable perfected
security interests and mortgages superior to and prior to the rights of all
third Persons and subject to no other Liens except for
-53-
Permitted Liens. The Additional Security Documents or instruments related
thereto shall have been duly recorded or filed in such manner and in such places
as are required by law to establish, perfect, preserve and protect the Liens in
favor of the Collateral Agent required to be granted pursuant to the Additional
Security Documents and all taxes, fees and other charges payable in connection
therewith shall have been paid in full.
(b) Holdings will, and will cause each of its Subsidiaries to, at the
expense of Holdings and the Borrower, make, execute, endorse, acknowledge, file
and/or deliver to the Collateral Agent from time to time such vouchers,
invoices, schedules, confirmatory assignments, conveyances, financing
statements, transfer endorsements, powers of attorney, certificates, real
property surveys, reports and other assurances or instruments and take such
further steps relating to the collateral covered by any of the Security
Documents as the Collateral Agent may reasonably require. Furthermore, Holdings
shall cause to be delivered to the Collateral Agent such opinions of counsel,
title insurance and other related documents as may be reasonably requested by
the Agent to assure themselves that this Section 7.11 has been complied with.
(c) If the Agent or the Required Banks determine that they are
required by law or regulation to have appraisals prepared in respect of the Real
Property of Holdings and its Subsidiaries constituting Collateral, the Borrower
shall provide to the Agent appraisals which satisfy the applicable requirements
of the Real Estate Appraisal Reform Amendments of the Financial Institution
Reform, Recovery and Enforcement Act of 1989 and which shall be in form and
substance satisfactory to the Agent.
(d) Holdings and the Borrower agree that each action required above
by this Section 7.11 shall be completed as soon as possible, but in no event
later than 90 days after such action is either requested to be taken by the
Agent or the Required Banks or required to be taken by Holdings and its
Subsidiaries pursuant to the terms of this Section 7.11; provided that in no
--------
event shall Holdings or the Borrower be required to take any action, other than
using its reasonable efforts, to obtain consents from third parties with respect
to its compliance with this Section 7.11.
7.12 Interest Rate Protection. The Borrower shall no later than 90
------------------------
days following the Initial Borrowing Date enter into, and thereafter maintain,
Interest Rate Protection Agreements, satisfactory to the Agent, with a term of
at least three years, establishing a fixed or maximum interest rate acceptable
to the Agent in respect of at least 50% of the outstanding Term Loans.
7.13 Register. The Borrower hereby designates the Agent to serve as
--------
the Borrower's agent, solely for purposes of this Section 7.13, to maintain a
register (the "Register") on which it will record the Commitments from time to
time of each of the Banks, the Loans made by each of the Banks and each
repayment in respect of the principal amount of the Loans of each Bank. Failure
to make any such recordation, or any error in such recordation shall not affect
the Borrower's obligations in respect of such Loans. With respect
-54-
to any Bank, the transfer of the Commitments of such Bank and the rights to the
principal of, and interest on, any Loan made pursuant to such Commitments shall
not be effective until such transfer is recorded on the Register maintained by
the Agent with respect to ownership of such Commitments and Loans and prior to
such recordation all amounts owing to the transferor with respect to such
Commitments and Loans shall remain owing to the transferor. The registration of
assignment or transfer of all or part of any Commitments and Loans shall be
recorded by the Agent on the Register only upon the acceptance by the Agent of a
properly executed and delivered Assignment and Assumption Agreement pursuant to
Section 12.04(b). Coincident with the delivery of such an Assignment and
Assumption Agreement to the Agent for acceptance and registration of assignment
or transfer of all or part of a Loan, or as soon thereafter as practicable, the
assigning or transferor Bank shall surrender the Note evidencing such Loan, and
thereupon one or more new Notes in the same aggregate principal amount shall be
issued to the assigning or transferor Bank and/or the new Bank. The Borrower
agrees to indemnify the Agent from and against any and all losses, claims,
damages and liabilities of whatsoever nature which may be imposed on, asserted
against or incurred by the Agent in performing its duties under this Section
7.13.
7.14 Maintenance of Corporate Separateness. Holdings will, and will
-------------------------------------
cause each of its Subsidiaries to, satisfy customary corporate formalities,
including the maintenance of corporate records. Neither the Borrower nor any
Subsidiary of the Borrower shall make any payment to a creditor of Holdings
(other than a Guaranteed Creditor pursuant to any Credit Document or an Interest
Rate Protection Agreement or Other Hedging Agreement entered into with any such
Guaranteed Creditor) in respect of any liability of Holdings, and no bank
account of Holdings shall be commingled with any bank account of the Borrower or
any Subsidiary of the Borrower. Any financial statements distributed to any
creditors of Holdings shall, to the extent permitted by GAAP, clearly establish
the corporate separateness of Holdings from the Borrower and each of the
Borrower's Subsidiaries. Finally, neither the Borrower nor any of its
Subsidiaries shall take any action, or conduct its affairs in a manner, which is
likely to result in the corporate existence of Holdings on the one hand and of
the Borrower or any Subsidiary of the Borrower on the other hand being ignored,
or in the assets and liabilities of the Borrower or any Subsidiary of the
Borrower being substantively consolidated with those of Holdings in a
bankruptcy, reorganization or other insolvency proceeding.
7.15 Foreign Subsidiaries Security. If following a change in the
-----------------------------
relevant sections of the Code or the regulations, rules, rulings, notices or
other official pronouncements issued or promulgated thereunder, counsel for the
Borrower acceptable to the Agent and the Required Banks does not within 30 days
after a request from the Agent or the Required Banks deliver evidence, in form
and substance mutually satisfactory to the Agent and the Borrower, with respect
to any Foreign Subsidiary which has not already had all of
its stock pledged pursuant to the Pledge Agreement that (i) a pledge (x) of 66-
2/3% or more of the total combined voting power of all classes of capital stock
of such Foreign Subsidiary entitled to vote, and (y) of any promissory note
issued by such Foreign Subsidiary to Holdings or any of its Domestic
Subsidiaries, (ii) the entering into by such Foreign Subsidiary of a security
agreement in substantially the form of the Security Agreement and (iii) the
entering into by such
-55-
Foreign Subsidiary of a guaranty in substantially the form of the Subsidiary
Guaranty, in any such case could reasonably be expected to cause (I) the
undistributed earnings of such Foreign Subsidiary as determined for Federal
income tax purposes to be treated as a deemed dividend to such Foreign
Subsidiary's United States parent for Federal income tax purposes or (II) other
material adverse federal income tax consequences to the Credit Parties, then in
the case of a failure to deliver the evidence described in clause (i) above,
that portion of such Foreign Subsidiary's outstanding capital stock or any
promissory notes so issued by such Foreign Subsidiary, in each case not
theretofore pledged pursuant to the Pledge Agreement shall be pledged to the
Collateral Agent for the benefit of the Secured Creditors pursuant to the Pledge
Agreement (or another pledge agreement in substantially similar form, if
needed), and in the case of a failure to deliver the evidence described in
clause (ii) above, such Foreign Subsidiary shall execute and deliver the
Security Agreement (or another security agreement in substantially similar form,
if needed), granting the Secured Creditors a security interest in all of such
Foreign Subsidiary's assets and securing the Obligations of the Borrower under
the Credit Documents and under any Interest Rate Protection Agreement or Other
Hedging Agreement and, in the event the Subsidiary Guaranty shall have been
executed by such Foreign Subsidiary, the obligations of such Foreign Subsidiary
thereunder, and in the case of a failure to deliver the evidence described in
clause (iii) above, such Foreign Subsidiary shall execute and deliver the
Subsidiary Guaranty (or another guaranty in substantially similar form, if
needed), guaranteeing the Obligations of the Borrower under the Credit Documents
and under any Interest Rate Protection Agreement or Other Hedging Agreement, in
each case to the extent that the entering into such Security Agreement or
Subsidiary Guaranty is permitted by the laws of the respective foreign
jurisdiction and with all documents delivered pursuant to this Section 7.15 to
be in form and substance reasonably satisfactory to the Agent and the Required
Banks.
7.16 Contributions; Payments. (a) Holdings will contribute as an
-----------------------
equity contribution to the capital of the Borrower upon its receipt thereof, any
cash proceeds (net of reasonable costs associated with such sale or issuance)
received by Holdings from any sale or issuance of its preferred or common equity
or any cash capital contributions received by Holdings, provided that (i) to the
--------
extent permitted by Section 8.05(s), Holdings may lend proceeds of Permitted
Equity Proceeds to the Borrower and (ii) to the extent permitted by Section
8.12(i), Holdings may use the proceeds of a registered public offering of
Holdings Common Stock to prepay in full the Seller Subordinated Note.
(b) The Borrower will use the proceeds of all equity contributions
received by it from Holdings as provided in clause (a) above toward the
repayment of Term Loans to the extent required by Section 4.02.
7.17 Name Changes. Holdings and the Borrower shall cause those (x)
------------
Domestic Subsidiaries set forth on Annex IX to change their corporate names to
the respective new corporate names appearing opposite such Domestic Subsidiaries
on Annex IX within fifteen Business Days following the Initial Borrowing Date
and (y) Foreign Subsidiaries set forth on Annex IX to change their corporate
names to the respective new corporate names
-56-
appearing opposite such Foreign Subsidiaries on Annex IX within 120 Business
Days following the Initial Borrowing Date.
SECTION 8. Negative Covenants. Holdings and the Borrower hereby
------------------
covenant and agree that as of the Effective Date and thereafter for so long as
this Agreement is in effect and until the Commitments have terminated, no
Letters of Credit (other than Letters of Credit, together with all Fees that
have accrued and will accrue thereon through the stated termination date of such
Letters of Credit, which have been supported in a manner satisfactory to the
respective Letter of Credit Issuer in its sole and absolute discretion) or Notes
are outstanding and the Loans and Unpaid Drawings, together with interest, Fees
and all other Obligations (other than any indemnities described in Section 12.13
hereof which are not then due and payable) incurred hereunder, are paid in full:
8.01 Changes in Business. (a) Holdings and its Subsidiaries will
-------------------
not engage in any business other than the business engaged in by Holdings and
its Subsidiaries (including, without limitation, the Acquired Business) as of
the Effective Date and activities directly related thereto, and similar or
related businesses.
(b) Notwithstanding the foregoing, Holdings will engage in no
business other than (i) its ownership of the capital stock of the Borrower,
those obligations of officers and employees of Holdings and its Subsidiaries to
the extent permitted by Section 8.05(e) and having those liabilities which it is
responsible for under this Agreement and the other Documents to which it is a
party and Borrower Subordinated Notes, (ii) the issuance of the Seller
Subordinated Notes, Permitted Holdings PIK Securities, shares of Holdings Common
Stock and options and warrants to purchase Holdings Common Stock and shares of
Holdings Class L Common Stock and options and warrants to purchase Holdings
Class L Common Stock, (iii) Permitted Strategic Equity Issuances and (iv)
activities associated with expenses paid with dividends made by the Borrower
pursuant to Section 8.06(iii). Notwithstanding the foregoing, Holdings may
engage in those activities that are incidental to (a) the maintenance of its
corporate existence in compliance with applicable law, (b) legal, tax and
accounting matters in connection with any of the foregoing activities and (c)
the entering into, and performing its obligations under, this Agreement and the
other Documents to which it is a party.
8.02 Consolidation, Merger, Sale or Purchase of Assets, etc.
-------------------------------------------------------
Holdings will not, and will not permit any of its Subsidiaries to, wind up,
liquidate or dissolve its affairs or enter into any transaction of merger or
consolidation, or convey, sell, lease or otherwise dispose of (or agree to do
any of the foregoing at any future time) all or any part of its property or
assets (other than inventory in the ordinary course of business through
distribution arrangements, vendor financial service programs or otherwise), or
enter into any partnerships, joint ventures or sale-leaseback transactions, or
purchase or otherwise acquire (in one or a series of related transactions) any
part of the property or assets (other than purchases or other acquisitions of
inventory, materials and equipment in the ordinary course of business) of any
Person, except that the following shall be permitted:
-57-
(a) the Acquisition;
(b) the Borrower and its Subsidiaries may lease as lessee or lessor
or license as licensee or licensor real or personal property in the
ordinary course of business and otherwise in compliance with this
Agreement, so long as any such lease or license by the Borrower or any of
its Subsidiaries in its capacity as lessor or licensor, as the case may be,
does not prohibit the granting of a Lien by the Borrower or any of its
Subsidiaries pursuant to the Mortgages in the real property covered by such
lease or pursuant to the Security Agreement in the personal property
covered by such lease or license, as the case may be;
(c) Capital Expenditures by the Borrower and its Subsidiaries to the
extent not in violation of Section 8.08;
(d) the advances, investments and loans permitted pursuant to Section
8.05;
(e) the Borrower and its Subsidiaries may sell or discount, in each
case without recourse, accounts receivables arising in the ordinary course
of business, but only in connection with the compromise or collection
thereof;
(f) the Borrower and its Subsidiaries may sell or exchange specific
items of equipment, so long as the purpose of each such sale or exchange is
to acquire (and results within 180 days of such sale or exchange in the
acquisition of) replacement items of equipment which are, in the reasonable
business judgment of the Borrower and its Subsidiaries, the functional
equivalent of the item of equipment so sold or exchanged;
(g) the Borrower and its Subsidiaries may, in the ordinary course of
business, license as licensee or licensor patents, trademarks, copyrights
and know-how to or from third Persons, so long as any such license by the
Borrower or any of its Subsidiaries in its capacity as licensor is
permitted to be assigned pursuant to the Security Agreement (to the extent
that a security interest in such patents, trademarks, copyrights and know-
how is granted thereunder) and does not otherwise prohibit the granting of
a Lien by the Borrower or any of its Subsidiaries pursuant to the Security
Agreement in the intellectual property covered by such license;
(h) any Foreign Subsidiary may be merged with and into, or be
dissolved or liquidated into, or transfer any of its assets to, any Wholly-
Owned Foreign Subsidiary so long as (i) such Wholly-Owned Foreign
Subsidiary is the surviving corporation of any such merger, dissolution or
liquidation and (ii) in each case at least 65% of the total combined voting
power of all classes of capital stock of all first-tier Foreign
Subsidiaries are pledged pursuant to the Pledge Agreement;
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(i) the assets of any Foreign Subsidiary may be transferred to the
Borrower or any of its Wholly-Owned Domestic Subsidiaries, and any Foreign
Subsidiary may be merged with and into, or be dissolved or liquidated into,
the Borrower or any of its Wholly-Owned Domestic Subsidiaries so long as
the Borrower or such Wholly-Owned Domestic Subsidiary is the surviving
corporation of any such merger, dissolution or liquidation;
(j) the Borrower or any of its Wholly-Owned Domestic Subsidiaries may
transfer to one or more Wholly-Owned Foreign Subsidiaries those assets
theretofore transferred to the Borrower or such Wholly-Owned Domestic
Subsidiary by a Foreign Subsidiary (whether by merger, liquidation,
dissolution or otherwise) pursuant to clause (i) of this Section 8.02;
(k) the Borrower and its Subsidiaries may sell or otherwise transfer
inventory to their respective Subsidiaries for resale by such Subsidiaries,
and Subsidiaries of the Borrower may sell or otherwise transfer inventory
to the Borrower for resale by the Borrower so long as the security interest
granted to the Collateral Agent for the benefit of the Secured Creditors
pursuant to the Security Agreement in the inventory so transferred (or the
proceeds thereof, in the case of a transfer to a Foreign Subsidiary) shall
remain in full force and effect and perfected (to at least the same extent
as in effect immediately prior to such transfer);
(l) the Borrower may contribute cash to one or more Wholly-Owned
Domestic Subsidiaries formed after the Initial Borrowing Date in accordance
with Section 8.14, so long as the aggregate amount of such cash so
contributed to all such Domestic Subsidiaries does not exceed $1,000,000;
(m) the Borrower and its Domestic Subsidiaries may transfer assets
(other than inventory) to Wholly-Owned Foreign Subsidiaries so long as the
aggregate fair market value of all such assets so transferred (determined
in good faith by the Board of Directors or senior management of the
Borrower) to all such Foreign Subsidiaries does not exceed $5,000,000;
(n) assets of the Borrower and its Domestic Subsidiaries (other than
any Domestic Subsidiary owning assets or having operations in Puerto Rico)
constituting non-U.S. operations may be transferred to Wholly-Owned Foreign
Subsidiaries of the Borrower;
(o) each of the Borrower and its Subsidiaries may sell assets,
provided that (x) the aggregate sale of proceeds from all assets subject to
--------
such sales pursuant to this clause (o) shall not exceed $1,000,000 in any
fiscal year of the Borrower, (y) any such asset sale is for at least 80% in
cash and at fair market value (as determined in good faith by the Board of
Directors or senior management of the Borrower) and (z) the Net
-59-
Proceeds therefrom are either applied to repay Term Loans as provided in
Section 4.02(A)(c) or reinvested to the extent permitted by Section
4.02(A)(c);
(p) each of the Borrower and its Subsidiaries may sell other assets,
provided that the aggregate sale proceeds from all assets subject to such
--------
sales pursuant to this clause (p) shall not exceed $250,000 in any fiscal
year of the Borrower;
(q) so long as no Default or Event of Default then exists or would
result therefrom, the Borrower may acquire assets or the capital stock of
any Person (any such acquisition permitted by this clause (q), a "Permitted
Acquisition"), provided, that (i) such Person (or the assets so acquired)
--------
was, immediately prior to such acquisition, engaged (or used) primarily in
the businesses permitted pursuant to Section 8.01(a), (ii) if such
acquisition is structured as a stock acquisition, then either (A) the
Person so acquired becomes a Wholly-Owned Subsidiary of the Borrower or (B)
such Person is merged with and into the Borrower or a Wholly-Owned
Subsidiary of the Borrower (with the Borrower or such Wholly-Owned
Subsidiary being the surviving corporation of such merger), and in any
case, all of the provisions of Section 8.14 have been complied with in
respect of such Person, (iii) any Liens or Indebtedness assumed or issued
in connection with such acquisition are otherwise permitted under Section
8.03 or 8.04, as the case may be, (iv) the only consideration paid in
connection with such Permitted Acquisition consists of cash, Holdings
Common Stock and/or Permitted Holdings PIK Securities, (v) the aggregate
amount of cash, Holdings Common Stock (valued in good faith by the Board of
Directors or senior management of Holdings or, to the extent such Holdings
Common Stock represents more than $5,000,000 of the total consideration
paid in connection with such Permitted Acquisition, by an independent
financial institution or appraisal firm reasonably satisfactory to the
Agent or, after the initial public offering of Holdings Common Stock, based
on the then current trading price for such Holdings Common Stock) and
Permitted Holdings PIK Securities (valued at the aggregate liquidation
preference thereof in the case of preferred stock and the aggregate face
amount thereof in the case of indebtedness) expended by the Borrower in
connection with any such acquisition (or series of related acquisitions)
shall not exceed $15,000,000 (or, at any time during a Reduced Leveraged
Period, $25,000,000) and (vi) the aggregate amount of cash expended by the
Borrower in connection with any such acquisition (or series of related
acquisitions) shall not exceed an amount equal to the sum of (x) $6,500,000
(or, at any time during a Reduced Leverage Period, $14,000,000) less the
aggregate amount of such $6,500,000 (or $14,000,000, as the case may be)
previously utilized to make Permitted Acquisitions or to make investments
under Section 8.05(w)(A) plus (y) the Excess Proceeds Amount at the time of
such acquisition;
(r) any Domestic Subsidiary of the Borrower may transfer assets
(other than accounts receivable and inventory) to the Borrower or to any
other Wholly-Owned Domestic Subsidiary of the Borrower so long as the
security interests granted to the Collateral Agent for the benefit of the
Secured Creditors pursuant to the Security
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Documents in the assets so transferred shall remain in full force and
effect and perfected (to at least the same extent as in effect immediately
prior to such transfer);
(s) any Wholly-Owned Domestic Subsidiary of the Borrower may merge
with and into the Borrower so long as (i) the Borrower is the surviving
corporation of such merger and (ii) the security interests granted to the
Collateral Agent for the benefit of the Secured Creditors pursuant to the
Security Documents in the assets of such Wholly-Owned Domestic Subsidiary
so merged shall remain in full force and effect and perfected (to at least
the same extent as in effect immediately prior to such merger);
(t) any Domestic Subsidiary of the Borrower may merge with and into,
or be dissolved or liquidated into, any other Wholly-Owned Domestic
Subsidiary of the Borrower so long as (i) such Wholly-Owned Domestic
Subsidiary of the Borrower is the surviving corporation of such merger,
dissolution or liquidation and (ii) the security interests granted to the
Collateral Agent for the benefit of the Secured Creditors pursuant to the
Security Documents in the assets of such Domestic Subsidiary shall remain
in full force and effect and perfected (to at least the same extent as in
effect immediately prior to such merger, dissolution or liquidation);
(u) the Borrower and its Subsidiaries may effect the Designated Real
Property Sale, provided that the Designated Real Property Sale is for at
--------
least 80% in cash and at fair market value (as determined in good faith by
the Board of Directors or senior management of the Borrower);
(v) the Borrower and its Subsidiaries may effect any West Coast Asset
Sale, provided that (x) any such West Coast Asset Sale is for at least 80%
--------
in cash and at fair market value (as determined in good faith by the Board
of Directors or senior management of the Borrower) and (y) the Net Proceeds
therefrom are either applied to repay Term Loans as provided in Section
4.02(A)(c) or reinvested to the extent permitted by Section 4.02(A)(c);
(w) the Borrower and its Subsidiaries may, in the ordinary course of
business, sell, transfer or otherwise dispose of assets (including, without
limitation, patents, trademarks, copyrights and know-how) which, in the
reasonable judgment of the Borrower or such Subsidiary, are determined to
be uneconomical, negligible or obsolete in the conduct of its business;
(x) (I) the Borrower and/or its Subsidiaries may enter into
factoring arrangements with respect to accounts receivable arising in Japan
in connection with business activities therein, (II) the Borrower and its
Domestic Subsidiaries may sell or otherwise transfer accounts receivable
between or among themselves in the ordinary course of business, and (III)
Foreign Subsidiaries may sell or otherwise transfer accounts receivable
between or among themselves in the ordinary course of business;
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(y) the Permitted Sale-Leaseback Transaction shall be permitted so
long as (I) the Net Proceeds therefrom are either applied to repay Term
Loans as provided in Section 4.02(A)(c) or reinvested to the extent
permitted by Section 4.02(A)(c) and (II) the lease obligations created
thereby are otherwise permitted under this Agreement; and
(z) the Borrower and its subsidiaries may transfer or divest of the
Natural Touch brand name and the assets related thereto; and
(aa) the Borrower and its Subsidiaries may sell those assets listed
on Annex XIV, provided that (x) any such asset sale is for at least 80% in
--------
cash and at fair market value (as determined in good faith by the Board of
Directors or senior management of the Borrower) and (y) the Net Proceeds
therefrom are either applied to repay Term Loans as provided in Section
4.02(A)(c) or reinvested to the extent permitted by Section 4.02(A)(c).
To the extent the Required Banks waive the provisions of this Section 8.02 with
respect to the sale or other disposition of any Collateral, or any Collateral is
sold as permitted by this Section 8.02 (and such Collateral is permitted to be
released from the Liens created by the respective Security Document), such
Collateral in each case shall be sold or otherwise disposed of free and clear of
the Liens created by the Security Documents and the Agent shall take such
actions (including, without limitation, directing the Collateral Agent to take
such actions) as are appropriate in connection therewith.
8.03 Liens. Holdings will not, and will not permit any of its
-----
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets of any kind (real or personal, tangible or
intangible) of Holdings or any of its Subsidiaries, whether now owned or
hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such property
or assets (including sales of accounts receivable or notes with recourse to
Holdings or any of its Subsidiaries) or assign any right to receive income,
except for the following (collectively, the "Permitted Liens"):
(a) inchoate Liens for taxes, assessments or governmental charges or
levies not yet due or Liens for taxes, assessments or governmental charges
or levies being contested in good faith by appropriate proceedings and for
which adequate reserves have been established in accordance with GAAP;
(b) Liens in respect of property or assets of the Borrower or any of
its Subsidiaries imposed by law which were incurred in the ordinary course
of business and which have not arisen to secure Indebtedness for borrowed
money, such as carriers', warehousemen's and mechanics' Liens, statutory
landlord's Liens, and other similar Liens arising in the ordinary course of
business, and which either (x) do not in the aggregate materially detract
from the value of such property or assets or materially impair the use
thereof in the operation of the business of the Borrower or any of its
-62-
Subsidiaries or (y) are being contested in good faith by appropriate
proceedings, which proceedings have the effect of preventing the forfeiture
or sale of the property or asset subject to such Lien;
(c) Liens created by or pursuant to this Agreement and the Security
Documents;
(d) Liens in existence on the Initial Borrowing Date which are
listed, and the property subject thereto described, in Annex VIII, without
giving effect to any extensions or renewals thereof;
(e) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under Section 9.09;
(f) Liens incurred or deposits made (x) in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, or to secure the performance of
tenders, statutory obligations, surety and appeal bonds, bids, government
contracts, performance and return-of-money bonds and other similar
obligations incurred in the ordinary course of business (exclusive of
obligations in respect of the payment for borrowed money); and (y) to
secure the performance of leases of Real Property, to the extent incurred
or made in the ordinary course of business consistent with past practices;
(g) licenses, leases or subleases granted to third Persons not
interfering in any material respect with the business of the Borrower or
any of its Subsidiaries;
(h) easements, rights-of-way, restrictions, minor defects or
irregularities in title and other similar charges or encumbrances not
interfering in any material respect with the ordinary conduct of the
business of the Borrower or any of its Subsidiaries;
(i) Liens arising from precautionary UCC financing statements
regarding operating leases permitted by this Agreement;
(j) any interest or title of a licensor, lessor or sublessor under
any lease permitted by this Agreement;
(k) Permitted Encumbrances;
(l) Liens arising pursuant to purchase money mortgages, Capital
Leases or security interests securing Indebtedness representing the
purchase price (or financing of the purchase price within 90 days after the
respective purchase) of assets acquired after the Initial Borrowing Date,
provided that (i) any such Liens attach only to the assets so purchased,
--------
(ii) the Indebtedness secured by any such Lien does not exceed 100%, nor is
less than 70%, of the lesser of the fair market value or the purchase price
-63-
of the property being purchased at the time of the incurrence of such
Indebtedness and (iii) the Indebtedness secured thereby is permitted to be
incurred pursuant to Section 8.04(d);
(m) Liens on property or assets acquired pursuant to a Permitted
Acquisition, or on property or assets of a Subsidiary of the Borrower in
existence at the time such Subsidiary is acquired pursuant to a Permitted
Acquisition, provided that (i) any Indebtedness that is secured by such
--------
Liens is permitted to exist under Section 8.04(j), and (ii) such Liens are
not incurred in contemplation of such Permitted Acquisition and do not
attach to any other asset of the Borrower or any of its Subsidiaries;
(n) Liens securing Indebtedness permitted pursuant to, and subject to
the limitations set forth in, clause (x) of Section 8.04(h), so long as any
such Lien attaches only to the assets of the respective Foreign Subsidiary
which is the obligor under such Indebtedness;
(o) Liens upon or with respect to inventory arising pursuant to
agreements to repurchase such inventory, provided that any such Liens
--------
attach only to the subject inventory and are created in the ordinary course
of business; and
(p) additional Liens incurred by the Borrower and its Subsidiaries so
long as the value of the property subject to such Liens, and the
Indebtedness and other obligations secured thereby, do not exceed
$1,000,000.
8.04 Indebtedness. Holdings will not, and will not permit any of its
------------
Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement and the other
Credit Documents;
(b) Existing Indebtedness outstanding on the Initial Borrowing Date
and listed on Annex VII, without giving effect to any subsequent extension,
renewal or refinancing thereof, except as permitted by Section 8.05(t);
(c) Indebtedness under Interest Rate Protection Agreements entered
into to protect the Borrower against fluctuations in interest rates in
respect of the Obligations;
(d) Capitalized Lease Obligations and Indebtedness of the Borrower
and its Subsidiaries incurred pursuant to purchase money Liens, provided,
--------
that (x) all such Capitalized Lease Obligations are permitted under Section
8.08 and (y) the sum of (i) the aggregate Capitalized Lease Obligations
plus (ii) the aggregate principal amount of such purchase money
Indebtedness outstanding at any time (A) during the period (taken as one
accounting period) from the Effective Date and ending on December 31, 1997,
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shall not exceed $5,000,000, and (B) during any fiscal year of the Borrower
thereafter shall not exceed the amount set forth opposite such fiscal year
as set forth below:
Fiscal Year Ending Amount
------------------ ------
December 31, 1998 $6,000,000
December 31, 1999 $7,000,000
December 31, 2000 $8,000,000
Thereafter $9,000,000
(e) Indebtedness constituting Intercompany Loans to the extent
permitted by Section 8.05(g);
(f) Indebtedness of Holdings under the Shareholder Subordinated
Notes;
(g) Indebtedness under Other Hedging Agreements providing protection
against fluctuations in currency values in connection with the Borrower's
or any of its Subsidiaries' operations so long as management of the
Borrower or such Subsidiary, as the case may be, has determined that the
entering into of such Other Hedging Agreements are bona fide hedging
---- ----
activities;
(h) Indebtedness (x) of Foreign Subsidiaries under lines of credit
extended by third Persons to any such Foreign Subsidiary the proceeds of
which Indebtedness are used for such Foreign Subsidiary's working capital
purposes, provided that (1) the aggregate principal amount of all such
--------
Indebtedness outstanding at any time for all Foreign Subsidiaries shall not
exceed $30,000,000 (the "Foreign Subsidiary Working Capital Indebtedness"),
(2) the aggregate principal amount of Foreign Subsidiary Working Capital
Indebtedness secured by Liens permitted under Section 8.03(n) shall not
exceed $15,000,000 and (3) the aggregate principal amount of Foreign
Subsidiary Working Capital Indebtedness supported by Letters of Credit
shall not exceed $15,000,000, and (y) consisting of unsecured guaranties in
an aggregate principal amount not to exceed $15,000,000 by the Borrower or
any Foreign Subsidiary of any such Foreign Subsidiary Working Capital
Indebtedness;
(i) Indebtedness of Foreign Subsidiaries to the Borrower and its
Domestic Subsidiaries as a result of any investment made pursuant to
Section 8.05(o);
(j) Indebtedness of a Subsidiary acquired pursuant to a Permitted
Acquisition (or Indebtedness assumed at the time of a Permitted Acquisition
of an asset securing such Indebtedness), provided that (i) such
--------
Indebtedness was not incurred in connection with or in anticipation of such
Permitted Acquisition, (ii) such Indebtedness does not constitute debt for
borrowed money (other than debt for borrowed money incurred in connection
with industrial revenue or industrial development bond financings), it
being understood and agreed that Capitalized Lease Obligations and purchase
money
-65-
Indebtedness shall not constitute debt for borrowed money for purposes of
this clause (j), and (iii) at the time of such Permitted Acquisition such
Indebtedness does not exceed 10% of the total value of the assets of the
Subsidiary so acquired, or of the asset so acquired, as the case may be;
(k) Indebtedness consisting of guaranties (x) by the Borrower of
Indebtedness, leases and other obligations permitted to be incurred by
Domestic Wholly-Owned Subsidiaries, (y) by Domestic Subsidiaries of
Indebtedness, leases and other obligations permitted to be incurred by the
Borrower or other Domestic Wholly-Owned Subsidiaries and (z) by Foreign
Subsidiaries of Indebtedness, leases and other obligations permitted to be
incurred by other Foreign Wholly-Owned Subsidiaries;
(l) Indebtedness of Holdings incurred under the Seller Subordinated
Note in an aggregate amount not to exceed $5,000,000 (as reduced by any
repayments of principal thereof) plus additional indebtedness of Holdings
incurred under the Seller Subordinated Note representing accrued but unpaid
interest thereon; provided, however, that no such indebtedness incurred by
-------- -------
Holdings under the Seller Subordinated Note shall be guaranteed or
supported by the Borrower or any of its Subsidiaries;
(m) Indebtedness of the Borrower constituting Borrower Subordinated
Loans to the extent permitted by Section 8.05(s);
(n) Indebtedness of Holdings incurred under Permitted Holdings PIK
Securities, provided that the aggregate outstanding principal amount of
--------
Permitted Holding PIK Securities constituting Indebtedness shall not exceed
$10,000,000 (or, at any time during a Reduced Leverage Period, $15,000,000)
plus the amount of interest on such Permitted Holdings PIK Securities paid
in kind or through accretion;
(o) Indebtedness consisting of take-or-pay supply agreement entered
into by the Borrower and its Subsidiaries in the ordinary course of
business; and
(p) additional Indebtedness of the Borrower and its Domestic
Subsidiaries not otherwise permitted hereunder not exceeding $2,500,000, in
aggregate principal amount at any time outstanding.
8.05 Advances, Investments and Loans. Holdings will not, and will
-------------------------------
not permit any of its Subsidiaries to, lend money or credit or make advances to
any Person, or purchase or acquire any stock, obligations or securities of, or
any other interest in, or make any capital contribution to, any Person, or
purchase or own a futures contract or otherwise become liable for the purchase
or sale of currency or other commodities at a future date in the nature of a
futures contract, or hold any cash, Cash Equivalents or Foreign Cash
Equivalents, except:
(a) the Borrower and its Subsidiaries may invest in cash and Cash
Equivalents;
-66-
(b) the Borrower and its Subsidiaries may acquire and hold
receivables owing to it, if created or acquired in the ordinary course of
business and payable or dischargeable in accordance with customary trade
terms of the Borrower or such Subsidiary;
(c) the Borrower and its Subsidiaries may acquire and own investments
(including debt obligations) received in connection with the bankruptcy or
reorganization of suppliers and customers and in good faith settlement of
delinquent obligations of, and other disputes with, customers and suppliers
arising in the ordinary course of business;
(d) Interest Rate Protection Agreements entered into in compliance
with Section 8.04(c) shall be permitted;
(e) Holdings may acquire and hold obligations of one or more officers
or other employees of Holdings or its Subsidiaries in connection with such
officers' or employees' acquisition of shares of Holdings Common Stock or
Holdings Class L Common Stock so long as no cash is paid by Holdings or any
of its Subsidiaries in connection with the acquisition of any such
obligations;
(f) deposits made in the ordinary course of business consistent with
past practices to secure the performance of leases shall be permitted;
(g) the Borrower may make intercompany loans and advances to any of
its Subsidiaries and any Subsidiary of the Borrower may make intercompany
loans and advances to the Borrower or any other Subsidiary of the Borrower
(collectively, "Intercompany Loans"), provided, that (v) at no time shall
--------
the aggregate outstanding principal amount of Intercompany Loans made
pursuant to this clause (g) by the Borrower and its Domestic Subsidiaries
to Foreign Subsidiaries the proceeds of which are used to finance Capital
Expenditures, when added to the amount of contributions, capitalizations
and forgiveness theretofore made pursuant to Section 8.05(l)(x), exceed
$8,000,000 (determined without regard to any write-downs or write-offs of
such loans and advances), provided that, in addition to such $8,000,000,
--------
Intercompany Loans the proceeds of which are used to finance Capital
Expenditures may also be made by the Borrower and its Domestic Subsidiaries
to Foreign Subsidiaries in an amount up to the Excess Proceeds Amount at
the time of any such loan, (w) at no time shall the aggregate outstanding
principal amount of all Intercompany Loans the proceeds of which are not
used to finance Capital Expenditures made pursuant to this clause (g) by
the Borrower and its Domestic Subsidiaries to Foreign Subsidiaries, when
added to the amount of contributions, capitalizations and forgiveness
theretofore made pursuant to Section 8.05(1)(y), exceed $15,000,000 minus
the aggregate outstanding principal amount of Intercompany Loans made
pursuant to clause (v) above (determined without regard to any write-downs
or write-offs of such loans and advances), provided that, in addition to
--------
such $15,000,000, such other Intercompany Loans may also be made by the
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Borrower and its Domestic Subsidiaries to Foreign Subsidiaries in an amount
up to the Excess Proceeds Amount at the time of any such loan, (x) each
Intercompany Loan made by a Foreign Subsidiary to the Borrower or a
Domestic Subsidiary shall contain the subordination provisions set forth on
Exhibit I, (y) each Intercompany Loan shall be evidenced by an Intercompany
Note and (z) each such Intercompany Note (other than (1) Intercompany Notes
issued by Foreign Subsidiaries to the Borrower or Domestic Subsidiaries and
(2) Intercompany Notes held by Foreign Subsidiaries) shall be pledged to
the Collateral Agent pursuant to the Pledge Agreement;
(h) loans and advances by the Borrower and its Subsidiaries to
employees of Holdings and its Subsidiaries for moving and travel expenses
and other similar expenses, in each case incurred in the ordinary course of
business, in an aggregate outstanding principal amount not to exceed
$3,000,000 at any time (determined without regard to any write-down or
write-offs of such loans and advances) shall be permitted;
(i) Holdings may make equity contributions to the capital of the
Borrower;
(j) Foreign Subsidiaries may invest in Foreign Cash Equivalents;
(k) Other Hedging Agreements may be entered into in compliance with
Section 8.04(g);
(l) the Borrower and its Domestic Subsidiaries may make cash capital
contributions to Foreign Subsidiaries, and may capitalize or forgive any
Indebtedness owed to them by a Foreign Subsidiary and outstanding under
clause (g) of this Section 8.05, provided that (x) the aggregate amount of
--------
such contributions, capitalizations and forgiveness the proceeds of which
are used to finance Capital Expenditures, when added to the aggregate
outstanding principal amount of Intercompany Loans made to Foreign
Subsidiaries under such clause (g)(v) (determined without regard to any
write-downs or write-offs thereof) shall not exceed an amount equal to
$8,000,000, provided that, in addition to such $8,000,000, such
--------
contributions, capitalizations and forgiveness may be made at any time in
an amount up to the Excess Proceeds Amount at such time and (y) the
aggregate amount of all such contributions, capitalizations and forgiveness
the proceeds of which are not used to finance Capital Expenditures, when
added to the aggregate outstanding principal amount of Intercompany Loans
made to Foreign Subsidiaries under such clause (g)(w) (determined without
regard to any write-downs or write-offs thereof) shall not exceed an amount
equal to $15,000,000, minus the aggregate amount of contributions,
capitalization and forgiveness pursuant to clause (x) above, provided that,
--------
in addition to such $15,000,000, such contributions, capitalizations and
forgiveness may be made at any time in an amount up to the Excess Proceeds
Amount at such time;
(m) Permitted Acquisitions shall be permitted;
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(n) the Borrower and its Subsidiaries may make investments in their
respective Subsidiaries in connection with the transfers of those assets
permitted to be transferred pursuant to Sections 8.02(h), (i) and (j), it
being understood that the Borrower and its Subsidiaries may convert any
investment initially made as an equity investment to intercompany
Indebtedness held by the Borrower or such Subsidiary;
(o) the Borrower and its Domestic Subsidiaries may make and hold
investments in their respective Foreign Subsidiaries to the extent that
such investments arise from the sale of inventory in the ordinary course of
business by the Borrower or such Domestic Subsidiary to such Foreign
Subsidiaries for resale by such Foreign Subsidiaries (including any such
investments resulting from the extension of the payment terms with respect
to such sales);
(p) the Borrower and its Subsidiaries may hold additional investments
in their respective Subsidiaries to the extent that such investments
reflect an increase in the value of such Subsidiaries;
(q) the Borrower and its Subsidiaries may capitalize one or more
foreign sales corporations created in accordance with Section 8.14 with
cash contributions in an aggregate amount not to exceed $200,000 for all
such foreign sales corporations;
(r) the Borrower and its Subsidiaries may make transfers of assets to
their respective Subsidiaries in accordance with Section 8.02(i), (j), (k),
(l), (m), (n) and (r);
(s) Holdings may make intercompany loans to the Borrower on a
subordinated basis (collectively, "Borrower Subordinated Loans") so long as
(x) all such Borrower Subordinated Loans are evidenced by a Borrower
Subordinated Note and (y) the proceeds used by Holdings to make such
Borrower Subordinated Loans come from the Permitted Equity Proceeds;
(t) advances, loans and investments in existence on the Initial
Borrowing Date and listed on Annex XI shall be permitted, without giving
effect to any additions thereto or replacements thereof (except those
additions or replacements which are existing obligations as of the Initial
Borrowing Date), provided that those loans outstanding to Subsidiaries on
--------
the Initial Borrowing Date may be repaid and reborrowed so long as the
aggregate outstanding principal amount of all such loans does not exceed
that aggregate principal amount outstanding on the Initial Borrowing Date;
(u) the Borrower and its Subsidiaries may acquire and hold debt
and/or equity securities as partial consideration for a sale of assets
pursuant to Section 8.02(o), (p), (u), (v) or (aa) to the extent permitted
by any such Section;
(v) the Borrower and/or its Subsidiaries may enter into a joint
venture in China and in connection therewith may transfer assets (other
than accounts receivable
-69-
and inventory that is not raw material inventory) to such joint venture,
provided, that (A) the aggregate fair market value of all assets of the
Borrower and its Domestic Subsidiaries so transferred (determined in good
faith by the Board of Directors or senior management of the Borrower) does
not exceed $1,000,000 and (B) the aggregate fair market value of all assets
of Foreign Subsidiaries so transferred (determined in good faith by the
Board of Directors or senior management of the Borrower) does not exceed
$1,000,000; and
(w) in addition to investments permitted by clauses (a) through (v)
above, so long as no Default or Event of Default then exists or would
result therefrom, the Borrower and its Subsidiaries may make additional
loans, advances and investments to or in a Person so long as the amount of
any such loan, advance or investment (at the time of the making thereof)
does not exceed an amount equal to the sum of (A) $1,500,000 (or, at any
time during a Reduced Leverage Period, $5,000,000) less the aggregate
amount of such $1,500,000 (or $5,000,000, as the case may be) previously
used to make loans, advances and investments pursuant to this clause (w) to
the extent same are then still outstanding (determined without regard to
any write-downs or write-offs thereof and net of cash repayments of
principal in the case of loans and cash equity returns (whether as a
dividend or redemption) in the case of equity investments), provided that
--------
the aggregate amount used to make loans, advances and investments pursuant
to this clause (w)(A), when added to the aggregate amount used to make
Permitted Acquisitions under Section 8.02(q)(vi)(x), shall not exceed
$6,500,000 (or, during a Reduced Leverage Period, $14,000,000) plus (B) an
amount equal to the Excess Earnings Amount at such time, provided that in
--------
no event shall the aggregate amount of loans, advances and investments made
in any fiscal year pursuant to this clause (w)(B) with the Excess Earnings
Amount exceed $2,000,000; provided, that (1) any loan, advance or
--------
investment made with the Excess Earnings Amount shall be in or to a Person
of which the Borrower owns (directly or indirectly) at least a majority
economic and voting interest (including the interest purchased or to be
purchased with the respective investment) and (2) neither the Borrower nor
any of its Subsidiaries may make or own any investment in Margin Stock.
8.06 Dividends, etc. Holdings will not, and will not permit any of
---------------
its Subsidiaries to, declare or pay any dividends (other than dividends payable
solely in common stock of Holdings or any such Subsidiary, as the case may be)
or return any capital to, its stockholders or authorize or make any other
distribution, payment or delivery of property or cash to its stockholders as
such, or redeem, retire, purchase or otherwise acquire, directly or indirectly,
for a consideration, any shares of any class of its capital stock, now or
hereafter outstanding (or any warrants for or options or stock appreciation
rights in respect of any of such shares), or set aside any funds for any of the
foregoing purposes, and Holdings will not permit any of its Subsidiaries to
purchase or otherwise acquire for consideration any shares of any class of the
capital stock of Holdings or any other Subsidiary, as the case may be, now or
hereafter outstanding (or any options or warrants or stock
appreciation rights issued by such Person with respect to its capital stock)
(all of the foregoing "Dividends"), except that:
-70-
(i) any Subsidiary of the Borrower may pay Dividends to the
Borrower or any Wholly-Owned Subsidiary of the Borrower;
(ii) (a) Holdings may redeem or purchase shares of Holdings Common
Stock or Holdings Class L Common Stock or options to purchase Holdings
Common Stock or Holdings Class L Common Stock, respectively, held by former
employees of Holdings or any of its Subsidiaries following the termination
of their employment, provided that (w) the only consideration paid by
--------
Holdings in respect of such redemptions and/or purchases shall be cash and
Shareholder Subordinated Notes, (x) the sum of (A) the aggregate amount
paid by Holdings in cash in respect of all such redemptions and/or
purchases plus (B) the aggregate amount of all principal and interest
payments made on Shareholder Subordinated Notes, shall not exceed
$1,000,000 in any fiscal year of Holdings, provided that such amount shall
--------
be increased by an amount equal to the proceeds received by Holdings after
the Effective Date from the sale or issuance of Holdings Common Stock or
Holdings Class L Common Stock, as the case may be, to management of
Holdings or any of its Subsidiaries and (y) at the time of any cash payment
permitted to be made pursuant to this Section 8.06(ii), no Default or Event
of Default shall then exist or result therefrom; and (b) so long as no
Default or Event of Default then exists or would result therefrom, the
Borrower may pay cash Dividends to Holdings so long as Holdings promptly
uses such proceeds for the purposes described in clause (ii)(a) of this
Section 8.06;
(iii) (a) Holdings may redeem or purchase shares of Holdings
Common Stock or Holdings Class L Common Stock or options to purchase
Holdings Common Stock or Holdings Class L Common Stock, as the case may be,
held by the two individuals holding the offices of Chairman and Chief
Financial Officer of the Borrower as of the Effective Date following the
death or disability of such individuals, provided that (x) the aggregate
amount paid by Holdings in respect of all such redemptions and/or purchases
for (I) the individual holding the office of Chairman shall not exceed
$5,000,000 and (II) the individual holding the office of Chief Financial
Officer does not exceed $1,000,000 and (y) at the time of any payment
permitted to be made pursuant to this Section 8.06(iii), no Default or
Event of Default shall then exist or result therefrom and (b) so long as no
Default or Event of Default then exists or would result therefrom, the
Borrower may pay cash Dividends to Holdings so long as the cash proceeds
thereof are promptly used by Holdings for the purposes described in clause
(iii)(a) of this Section 8.06;
(iv) the Borrower may pay cash Dividends to Holdings so long as
the proceeds thereof are promptly used by Holdings to (x) pay operating
expenses in the ordinary course of business (including, without limitation,
professional fees and expenses) and other similar corporate overhead costs
and expenses, provided that the aggregate amount of cash Dividends paid
--------
pursuant to this clause (x) shall not during any fiscal year of the
Borrower exceed $1,000,000 or (y) pay salaries or other compensation of
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employees who perform services for Holdings and the Borrower, provided that
--------
the aggregate amount of cash Dividends paid pursuant to this clause (y)
shall not during any fiscal year of the Borrower exceed $250,000;
(v) the Borrower may pay cash Dividends to Holdings in the amounts
and at the times of any payment by Holdings in respect of taxes, provided
--------
that (x) the amount of cash Dividends paid pursuant to this clause (v) to
enable Holdings to pay federal income taxes at any time shall not exceed
the lesser of (A) the amount of such federal income taxes owing by Holdings
at such time for the respective period and (B) the amount of such federal
income taxes that would be owing by the Borrower and its Subsidiaries on a
consolidated basis for such period if determined without regard to
Holdings' ownership of the Borrower and (y) any refunds shall promptly be
returned by Holdings to the Borrower; and
(vi) Holdings may pay regularly scheduled Dividends on the
Permitted Holdings PIK Securities (to the extent issued as preferred stock)
pursuant to the terms thereof solely through the issuance of additional
shares of such Permitted Holdings PIK Securities, provided that in lieu of
--------
issuing additional shares of such Permitted Holdings PIK Securities as
Dividends, Holdings may increase the liquidation preference of the shares
of Permitted Holdings PIK Securities in respect of which such Dividends
have accrued.
8.07 Transactions with Affiliates. Holdings will not, and will not
----------------------------
permit any of its Subsidiaries to, enter into any transaction or series of
transactions with any Affiliate other than in the ordinary course of business
and on terms and conditions substantially as favorable to Holdings or such
Subsidiary as would be obtainable by Holdings or such Subsidiary at the time in
a comparable arm's-length transaction with a Person other than an Affiliate;
provided, that the following shall in any event be permitted: (i) the
--------
Transaction; (ii) the payment on the Initial Borrowing Date of one time
consulting fees to ▇▇▇▇ Capital and/or any Related Party in an aggregate amount
(for ▇▇▇▇ Capital and all such Related Parties taken together) not to exceed
$3,000,000 (plus reasonable out-of-pocket expenses incurred by ▇▇▇▇ Capital and
all such Related Parties in providing services to the Borrower); (iii) the
payment, on a quarterly basis, of management fees to ▇▇▇▇ Capital and/or Related
Parties in an aggregate amount (for all such Persons taken together) not to
exceed $500,000 in any fiscal quarter of the Borrower; (iv) Holdings and the
Borrower and its Domestic Subsidiaries may make any payments required under the
Holdings Tax Allocation Agreement; and (v) the payment by the Borrower, in
connection with any acquisition, divestiture or financing transaction that is
consummated, of a transaction fee to ▇▇▇▇ Capital and/or the Bain Affiliates in
an aggregate amount (for all such Persons taken together) not to exceed 1% of
the aggregate value of any such transaction.
8.08 Capital Expenditures. (a) Holdings will not, and will not
--------------------
permit any of its Subsidiaries to, make any Capital Expenditures, except that,
(i) during the period commencing on the Initial Borrowing Date and ending
December 31, 1998, the Borrower and its Subsidiaries may make Capital
Expenditures in an aggregate amount not to exceed
-72-
$23,000,000, provided that (x) for the period commencing on the Initial
--------
Borrowing Date and ending December 31, 1996, the aggregate amount of such
Capital Expenditures shall not exceed $9,000,000 and (y) for the fiscal year
ending December 31, 1997, the aggregate amount of such Capital Expenditures
shall not exceed $17,000,000 and (ii) during any fiscal year thereafter the
Borrower and its Subsidiaries may make Capital Expenditures so long as the
aggregate amount of such Capital Expenditures does not exceed $5,000,000.
(b) Notwithstanding the foregoing, in the event that the amount of
Capital Expenditures permitted to be made by the Borrower and its Subsidiaries
pursuant to clause (a) above in any period (before giving effect to any increase
in such permitted expenditure amount pursuant to this clause (b)) is greater
than the amount of such Capital Expenditures made by the Borrower and its
Subsidiaries during such period, such excess (the "Rollover Amount") may be
carried forward and utilized to make Capital Expenditures in succeeding fiscal
years, provided that in no event shall the aggregate amount of Capital
Expenditures made by the Borrower and its Subsidiaries during any fiscal year
pursuant to Section 8.08(a) and this Section 8.08(b) exceed 125% of the amount
permitted to be made in such fiscal year pursuant to Section 8.08(a).
(c) Notwithstanding the foregoing, the Borrower and its Subsidiaries
may make Capital Expenditures (which Capital Expenditures will not be included
in any determination under the foregoing clause (a)) with the proceeds of Asset
Sales to the extent such proceeds are not required to be applied to repay Term
Loans pursuant to Section 4.02(A)(c).
(d) Notwithstanding the foregoing, the Borrower and its Subsidiaries
may make Capital Expenditures (which Capital Expenditures will not be included
in any determination under the foregoing clause (a)) with the insurance proceeds
received by the Borrower or any of its Subsidiaries from any Recovery Event so
long as such Capital Expenditures are to replace or restore any properties or
assets in respect of which such proceeds were paid within 360 days following the
date of the receipt of such insurance proceeds to the extent such insurance
proceeds are not required to be applied to repay Term Loans pursuant to Section
4.02(A)(g).
(e) Notwithstanding the foregoing, the Borrower and its Subsidiaries
may make Capital Expenditures at any time in an aggregate amount equal to the
Excess Proceeds Amount at such time (which Capital Expenditures will not be
included in any determination under the foregoing clause (a)).
(f) Notwithstanding the foregoing, the Borrower and its Subsidiaries
may make Capital Expenditures at any time in an aggregate amount equal to the
Excess Earnings Amount at such time (which Capital Expenditures will not be
included in any determination under the foregoing clause (a)).
8.09 Minimum Consolidated EBITDA. The Borrower will not permit
---------------------------
Consolidated EBITDA for any Test Period ending on a date set forth below to be
less than the amount set forth opposite such date:
-73-
Minimum Consolidated
Date EBITDA
---- --------------------
12/31/96 $3,800,000
3/31/97 $8,500,000
6/30/97 $15,300,000
9/30/97 $22,200,000
12/31/97 $26,900,000
3/31/98 $30,200,000
6/30/98 $32,000,000
9/30/98 $33,700,000
12/31/98 $34,600,000
3/31/99 $35,900,000
6/30/99 $37,500,000
9/30/99 $39,200,000
12/31/99 $41,200,000
3/31/00 $42,100,000
6/30/00 $43,000,000
9/30/00 $43,700,000
12/31/00 $44,200,000
3/31/01 $44,800,000
6/30/01 $45,300,000
9/30/01 $45,900,000
12/31/01 $46,500,000
3/31/02 $47,100,000
6/30/02 $47,700,000
9/30/02 $48,300,000
12/31/02 $48,900,000
3/31/03 $49,500,000
6/30/03 $50,200,000
9/30/03 $50,800,000
12/31/03 $51,500,000
3/31/04 $52,100,000
8.10 Interest Coverage Ratio. The Borrower will not permit the
-----------------------
Interest Coverage Ratio for any Test Period ending on a date set forth below to
be less than the ratio set forth opposite such date:
Date Ratio
---- -----
12/31/96 1.35:1.00
3/31/97 1.45:1.00
6/30/97 1.75:1.00
9/30/97 1.90:1.00
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12/31/97 2.25:1.00
3/31/98 2.60:1.00
6/30/98 2.80:1.00
9/30/98 3.05:1.00
12/31/98 3.20:1.00
3/31/99 3.50:1.00
6/30/99 3.85:1.00
9/30/99 4.30:1.00
All Test Periods thereafter 4.50:1.00
8.11 Leverage Ratio. The Borrower will not permit the Leverage Ratio
--------------
at any time during a period set forth below to be more than the ratio set forth
opposite such period:
Period Ratio
------ -----
12/31/97 - 3/30/98 5.10:1.00
3/31/98 - 6/29/98 4.50:1.00
6/30/98 - 9/29/98 4.10:1.00
9/30/98 - 12/30/98 3.75:1.00
12/31/98 - 3/30/99 3.45:1.00
3/31/99 - 6/29/99 3.25:1.00
6/30/99 - 9/29/99 2.95:1.00
9/30/99 - 12/30/99 2.60:1.00
12/31/99 - 3/30/00 2.30:1.00
3/31/00 - 6/29/00 2.15:1.00
Thereafter 2.00:1.00
8.12 Limitation on Voluntary Payments and Modifications of
-----------------------------------------------------
Indebtedness; Modifications of Certificate of Incorporation, By-Laws and Certain
--------------------------------------------------------------------------------
Other Agreements; Issuance of Capital Stock; etc. Holdings will not, and will
-----------------------------------------------------------------------------
not permit any of its Subsidiaries to:
-------------------------------------
(i) make (or give any notice in respect of) any payment or
prepayment on or redemption or acquisition for value of any Seller
Subordinated Note or make any interest payment on any Seller Subordinated
Note, provided that, notwithstanding the foregoing, in connection with any
-------- ----
registered public offering of Holdings Common Stock, if as a result of such
public offering the Seller Subordinated Note is required to be repaid in
full in accordance with its terms, then Holdings may apply a portion of the
net proceeds received by it from such public offering to effect such
prepayment to the extent that such portion is not required to be applied to
repay Term Loans pursuant to Section 4.02(A)(d);
(ii) amend, modify or change, or permit the amendment or
modification of, any provision of the Seller Subordinated Note;
-75-
(iii) amend, modify or change in any way adverse to the interests
of the Banks, any Management Agreement, the terms of any Tax Allocation
Agreement, its Certificate of Incorporation (including, without limitation,
by the filing or modification of any certificate of designation) or By-
Laws, or any agreement entered into by it, with respect to its capital
stock (including any Shareholders' Agreement), or enter into any new
agreement with respect to its capital stock which would be adverse to the
interests of the Banks; or
(iv) issue any class of capital stock other than (x) in the case
of the Borrower and its Subsidiaries, non-redeemable common stock and (y)
in the case of Holdings, (1) the issuance of Holdings Common Stock or
Permitted Holdings PIK Securities as consideration for a Permitted
Acquisition pursuant to Section 8.02(q) and (2) issuances of Holdings
Common Stock or Holdings Class L Common Stock where, after giving effect to
such issuance, no Event of Default will exist under Section 9.10 and to the
extent the proceeds thereof are applied in accordance with Sections
4.02(A)(d) and 7.16.
8.13 Limitation on Certain Restrictions on Subsidiaries. Holdings
--------------------------------------------------
will not, and will not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any such Subsidiary to (a) pay
dividends or make any other distributions on its capital stock or any other
interest or participation in its profits owned by Holdings or any Subsidiary of
Holdings, or pay any Indebtedness owed to Holdings or a Subsidiary of Holdings,
(b) make loans or advances to Holdings or any of Holdings' Subsidiaries or (c)
transfer any of its properties or assets to Holdings or any of Holdings'
Subsidiaries, except for such encumbrances or restrictions existing under or by
reason of (i) applicable law, (ii) this Agreement and the other Credit
Documents, (iii) customary provisions restricting subletting or assignment of
any lease governing a leasehold interest of the Borrower or a Subsidiary of the
Borrower, (iv) customary provisions restricting assignment of any licensing
agreement entered into by the Borrower or a Subsidiary of the Borrower in the
ordinary course of business, (v) customary provisions restricting the transfer
of assets subject to Liens permitted under Sections 8.03(l) and (m) and (vi) any
document or instrument evidencing Foreign Subsidiary Working Capital
Indebtedness so long as such encumbrance or restriction only applies to the
Foreign Subsidiary incurring such Indebtedness.
8.14 Limitation on the Creation of Subsidiaries. Notwithstanding
------------------------------------------
anything to the contrary contained in this Agreement, Holdings will not, and
will not permit any of its Subsidiaries to, establish, create or acquire after
the Initial Borrowing Date any Subsidiary; provided that the Borrower and its
--------
Wholly-Owned Subsidiaries shall be permitted to establish or create (x)
Subsidiaries as a result of investments made pursuant to Section 8.05(q) and (y)
Wholly-Owned Subsidiaries so long as (i) at least 30 days' prior written notice
thereof (or such lesser notice as is acceptable to the Agent) is given to the
Agent, (ii) the capital stock of such new Subsidiary is pledged pursuant to, and
to the extent required by, this Agreement and the Pledge Agreement and the
certificates, if any, representing such stock, together with stock
-76-
powers duly executed in blank, are delivered to the Collateral Agent, (iii) such
new Subsidiary (other than a Foreign Subsidiary except to the extent otherwise
required pursuant to Section 7.15) executes a counterpart of the Subsidiary
Guaranty, the Pledge Agreement and the Security Agreement, and (iv) to the
extent requested by the Agent or the Required Banks, takes all actions required
pursuant to Section 7.11. In addition, each new Wholly-Owned Subsidiary that is
required to execute any Credit Document shall execute and deliver, or cause to
be executed and delivered, all other relevant documentation of the type
described in Section 5 as such new Subsidiary would have had to deliver if such
new Subsidiary were a Credit Party on the Initial Borrowing Date.
8.15 Seller Subordinated Note. Holdings shall not effect any
------------------------
secondary public sale of Holdings Common Stock which would cause the triggering
of any mandatory repayment provision in any outstanding Seller Subordinated Note
pursuant to the terms thereof unless such secondary public sale is made in
conjunction with a public issuance of Holdings Common Stock which generates net
proceeds to Holdings of an amount which, when reduced by the amount of such net
proceeds required to be applied to repay the Term Loans pursuant to Section
4.02(A)(d), is sufficient to enable Holdings to repay the Seller Subordinated
Note (together with all accrued interest thereon) in full. In addition,
Holdings will not make any interest payments on the Seller Subordinated Note
except upon repayment of the Seller Subordinated Note in accordance with the
terms hereof.
SECTION 9. Events of Default. Upon the occurrence of any of the
-----------------
following specified events (each, an "Event of Default"):
9.01 Payments. The Borrower shall (i) default in the payment when
--------
due of any principal of the Loans or (ii) default, and such default shall
continue for three or more days, in the payment when due of any Unpaid Drawing,
any interest on the Loans or any Fees or any other amounts owing hereunder or
under any other Credit Document; or
9.02 Representations, etc. Any representation, warranty or statement
---------------------
made by Holdings, the Borrower or any other Credit Party herein or in any other
Credit Document or in any statement or certificate delivered pursuant hereto or
thereto shall prove to be untrue in any material respect on the date as of which
made or deemed made; or
9.03 Covenants. Any Credit Party shall (a) default in the due
---------
performance or observance by it of any term, covenant or agreement contained in
Sections 7.11, 7.14, 7.16 or 8, or (b) default in the due performance or
observance by it of any term, covenant or agreement (other than those referred
to in Section 9.01, 9.02 or clause (a) of this Section 9.03) contained in this
Agreement and such default shall continue unremedied for a period of at least 30
days after notice to the defaulting party by the Agent or the Required Banks; or
9.04 Default Under Other Agreements. (a) Holdings or any of its
------------------------------
Subsidiaries shall (i) default in any payment with respect to any Indebtedness
(other than the Obligations) beyond the period of grace, if any, provided in the
instrument or agreement under which
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Indebtedness was created or (ii) default in the observance or performance of any
agreement or condition relating to any such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or holders) to
cause any such Indebtedness to become due prior to its stated maturity; or (b)
any Indebtedness (other than the Obligations) of Holdings or any of its
Subsidiaries shall be declared to be due and payable, or shall be required to be
prepaid other than by a regularly scheduled required prepayment or as a
mandatory prepayment (unless such required prepayment or mandatory prepayment
results from a default thereunder or an event of the type that constitutes an
Event of Default), prior to the stated maturity thereof; provided, that it shall
--------
not constitute an Event of Default pursuant to clause (a) or (b) of this Section
9.04 unless the principal amount of any one issue of such Indebtedness, or the
aggregate amount of all such Indebtedness referred to in clauses (a) and (b)
above, exceeds $2,500,000 at any one time; or
9.05 Bankruptcy, etc. Holdings or any of its Subsidiaries shall
----------------
commence a voluntary case concerning itself under Title 11 of the United States
Code entitled "Bankruptcy," as now or hereafter in effect, or any successor
thereto (the "Bankruptcy Code"); or an involuntary case is commenced against
Holdings or any of its Subsidiaries and the petition is not controverted within
10 days, or is not dismissed within 60 days, after commencement of the case; or
a custodian (as defined in the Bankruptcy Code) is appointed for, or takes
charge of, all or substantially all of the property of Holdings or any of its
Subsidiaries; or Holdings or any of its Subsidiaries commences any other
proceeding under any reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to Holdings or any of
its Subsidiaries; or there is commenced against Holdings or any of its
Subsidiaries any such proceeding which remains undismissed for a period of 60
days; or Holdings or any of its Subsidiaries is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or Holdings or any of its Subsidiaries suffers any
appointment of any custodian or the like for it or any substantial part of its
property to continue undischarged or unstayed for a period of 60 days; or
Holdings or any of its Subsidiaries makes a general assignment for the benefit
of creditors; or any corporate action is taken by Holdings or any of its
Subsidiaries for the purpose of effecting any of the foregoing; or
9.06 ERISA. (a) Any Plan shall fail to satisfy the minimum funding
-----
standard required for any plan year or part thereof or a waiver of such standard
or extension of any amortization period is sought or granted under Section 412
of the Code, any Plan shall have had or is likely to have a trustee appointed to
administer such Plan, any Plan is, shall have been or is likely to be terminated
or the subject of termination proceedings under ERISA, any Plan shall have an
Unfunded Current Liability, a contribution required to be made to a Plan or a
Foreign Pension Plan has not been timely made, Holdings or any Subsidiary of
Holdings or any ERISA Affiliate has incurred or is likely to incur a liability
to or on account of a Plan under Section 409, 502(i), 502(l), 515, 4062, 4063,
4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971, 4975 or
4980 of the Code, or Holdings or any Subsidiary of Holdings has
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incurred or is likely to incur liabilities pursuant to one or more employee
welfare benefit plans (as defined in Section 3(1) of ERISA) which provide
benefits to retired employees or other former employees (other than as required
by Section 601 of ERISA) or employee pension benefit plans (as defined in
Section 3(2) of ERISA) or Foreign Pension Plans; (b) there shall result from any
such event or events the imposition of a lien, the granting of a security
interest, or a liability or a material risk of incurring a liability; and (c)
which lien, security interest or liability which arises from such event or
events, in the opinion of the Required Banks, will have a Material Adverse
Effect; or
9.07 Security Documents. (a) Except in each case to the extent
------------------
resulting from the failure of the Collateral Agent to retain possession of the
applicable Pledged Securities, any Security Document shall cease to be in full
force and effect, or shall cease to give the Collateral Agent the Liens, rights,
powers and privileges purported to be created thereby in favor of the Collateral
Agent, or (b) any Credit Party shall default in the due performance or
observance of any term, covenant or agreement on its part to be performed or
observed pursuant to any such Security Document and such default shall continue
beyond any cure or grace period specifically applicable thereto pursuant to the
terms of such Security Document; or
9.08 Guaranties. The Guaranties or any provision thereof shall cease
----------
to be in full force and effect, or any Guarantor or any Person acting by or on
behalf of such Guarantor shall deny or disaffirm such Guarantor's obligations
under any Guaranty or any Guarantor shall default in the due performance or
observance of any material term, covenant or agreement on its part to be
performed or observed pursuant to any Guaranty; or
9.09 Judgments. One or more judgments or decrees shall be entered
---------
against Holdings or any of its Subsidiaries involving a liability (not paid or
not fully covered by insurance) in excess of $2,500,000 for all such judgments
and decrees and all such judgments or decrees shall not have been vacated,
discharged or stayed or bonded pending appeal within 60 days from the entry
thereof; or
9.10 Ownership. A Change of Control Event shall have occurred;
---------
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Agent shall, upon the written request of the
Required Banks, by written notice to the Borrower, take any or all of the
following actions, without prejudice to the rights of the Agent or any Bank to
enforce its claims against any Guarantor or the Borrower, except as otherwise
specifically provided for in this Agreement (provided, that if an Event of
--------
Default specified in Section 9.05 shall occur with respect to the Borrower, the
result which would occur upon the giving of written notice by the Agent as
specified in clauses (i) and (ii) below shall occur automatically without the
giving of any such notice): (i) declare the Total Commitment (or the unutilized
portion thereof) terminated, whereupon the Commitment of each Bank (or the
unutilized portion thereof) shall forthwith terminate immediately and any
Commitment Fees shall forthwith become due and payable without any other notice
of any kind; (ii) declare the principal of and any accrued interest in respect
of all Loans and all Obligations owing
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hereunder (including Unpaid Drawings) to be, whereupon the same shall become,
forthwith due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Borrower; (iii) enforce, as
Collateral Agent (or direct the Collateral Agent to enforce), any or all of the
Liens and security interests created pursuant to the Security Documents; (iv)
terminate any Letter of Credit which may be terminated in accordance with its
terms; and (v) direct the Borrower to pay (and the Borrower hereby agrees upon
receipt of such notice, or upon the occurrence of any Event of Default specified
in Section 9.05, to pay) to the Collateral Agent at the Payment Office such
additional amounts of cash, to be held as security for the Borrower's
reimbursement obligations in respect of Letters of Credit then outstanding,
equal to the aggregate Stated Amount of all Letters of Credit then outstanding.
SECTION 10. Definitions. As used herein, the following terms shall
-----------
have the meanings herein specified unless the context otherwise requires.
Defined terms in this Agreement shall include in the singular number the plural
and in the plural the singular:
"A Term Loan" shall have the meaning provided in Section 1.01(A)(a).
"A Term Loan Commitment" shall mean, with respect to each Bank, the
amount set forth opposite such Bank's name in Annex I directly below the column
entitled "A Term Loan Commitment," as the same may be reduced or terminated
pursuant to Section 3.03 and/or 9 or otherwise modified pursuant to Section 1.13
and/or 12.04(b).
"A Term Loan Facility" shall mean the Facility evidenced by the Total
A Term Loan Commitment.
"A Term Loan Maturity Date" shall mean February 28, 2002.
"A Term Note" shall have the meaning provided in Section 1.05(a).
"A TL Percentage" shall mean, at any time, a fraction (expressed as a
percentage) the numerator of which is equal to the aggregate principal amount of
all A Term Loans outstanding at such time and the denominator of which is equal
to the aggregate principal amount of all Term Loans outstanding at such time.
"Acquired Business" shall mean the assets and Acquired Subsidiaries
acquired by the Borrower pursuant to the Acquisition Documents.
"Acquired Entity or Business" shall have the meaning set forth in the
definition of "Consolidated Net Income."
"Acquired Subsidiaries" shall mean those Subsidiaries listed on Annex
IX hereto.
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"Acquisition" shall mean the acquisition by the Borrower for cash and
the Seller Subordinated Note of substantially all of the assets of the Acquired
Subsidiaries and all of the issued and outstanding shares of capital stock of
the Acquired Subsidiaries of the Seller and substantially all the assets of
▇▇▇▇▇▇▇▇▇▇ Deutschland GmbH, a company registered under the laws of Germany
pursuant to, and in accordance with the terms of, the Acquisition Documents.
"Acquisition Agreements" shall mean (i) the Agreement for Purchase and
Sale, dated July 5, 1996, by and between the Borrower and the Seller, as in
effect on the Initial Borrowing Date, between the Borrower and the Seller, as
amended, modified or supplemented from time to time in accordance with the terms
thereof and hereof and (ii) each of the agreements listed on Annex XV hereto.
"Acquisition Documents" shall mean the Acquisition Agreements, and all
other purchase and other agreements, instruments and documents relating to the
Acquisition.
"Additional Security Documents" shall have the meaning provided in
Section 7.11.
"Adjusted Certificate of Deposit Rate" shall mean, on any day, the sum
(rounded to the nearest 1/100 of 1%) of (1) the rate obtained by dividing (x)
the most recent weekly average dealer offering rate for negotiable certificates
of deposit with a three-month maturity in the secondary market as published in
the most recent Federal Reserve System publication entitled "Select Interest
Rates," published weekly on Form H.15 as of the date hereof, or if such
publication or a substitute containing the foregoing rate information shall not
be published by the Federal Reserve System for any week, the weekly average
offering rate determined by the Agent on the basis of quotations for such
certificates received by it from three certificate of deposit dealers in New
York of recognized standing or, if such quotations are unavailable, then on the
basis of other sources reasonably selected by the Agent, by (y) a percentage
equal to 100% minus the stated maximum rate of all reserve requirements as
specified in Regulation D applicable on such day to a three-month certificate of
deposit of a member bank of the Federal Reserve System in excess of $100,000
(including, without limitation, any marginal, emergency, supplemental, special
or other reserves), plus (2) the then daily net annual assessment rate as
estimated by the Agent for determining the current annual assessment payable by
BTCo to the Federal Deposit Insurance Corporation for insuring three month
certificates of deposit.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all directors
and officers of such Person), controlled by, or under direct or indirect common
control with such Person. A Person shall be deemed to control a corporation if
such Person possesses, directly or indirectly, the power (i) to vote 5% or more
of the securities having ordinary voting power for the election of directors of
such corporation or (ii) to direct or cause the direction of the management and
policies of such corporation, whether through the ownership of voting
securities, by contract or otherwise.
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"Agent" shall have the meaning provided in the first paragraph of this
Agreement and shall include any successor to the Agent appointed pursuant to
Section 11.10.
"Aggregate Unutilized Commitment" with respect to any Bank at any time
shall mean the sum of (i) such Bank's A Term Loan Commitment at such time, if
any, (ii) such Bank's B Term Loan Commitment at such time, if any, and (iii)
such Bank's Revolving Loan Commitment at such time less the sum of (x) the
----
aggregate outstanding principal amount of all Revolving Loans made by such Bank
and (y) such Bank's RL Percentage of the Letter of Credit Outstandings at such
time.
"Agreement" shall mean this Credit Agreement, as the same may be from
time to time modified, amended and/or supplemented.
"Applicable Base Rate Margin" shall mean (i) in the case of A Term
Loans and Revolving Loans, 1.75%, less the then applicable Interest Reduction
Discount, if any, and (ii) in the case of B Term Loans, 2.25%.
"Applicable Commitment Fee Percentage" shall mean 1/2 of 1%.
"Applicable Equity/ECF Percentage" shall mean initially, 75%,
provided, that during any Applicable Period, the Applicable Equity/ECF
--------
Percentage shall be 50% if, but only if, as of the Test Date with respect to
such Applicable Period the Leverage Ratio is less than or equal to 3.00:1.0.
"Applicable Eurodollar Margin" shall mean (i) in the case of A Term
Loans and Revolving Loans, 2.75%, less the then applicable Interest Reduction
Discount, if any and (ii) in the case of B Term Loans, 3.25%.
"Applicable Period" shall mean each period which shall commence on a
date on which the financial statements are delivered pursuant to Section 7.01(b)
or (c), as the case may be, and which shall end on the earlier of (i) the date
of actual delivery of the next financial statements pursuant to Section 7.01(b)
or (c), as the case may be, and (ii) the latest date on which the next financial
statements are required to be delivered pursuant to Section 7.01(b) or (c), as
the case may be; provided that for purposes of the definition of Interest
--------
Reduction Discount, no Applicable Period shall commence on a date occurring
prior to the date of delivery of financial statements pursuant to Section
7.01(b) in respect of the fiscal quarter ending June 30, 1997.
"Asset Sale" shall mean any sale, transfer or other disposition by
Holdings or any of its Subsidiaries to any Person other than the Borrower or any
Wholly-Owned Subsidiary of the Borrower of any asset (including, without
limitation, any capital stock or other securities of another Person) of Holdings
or such Subsidiary other than (i) sales, transfers or other dispositions of
inventory made in the ordinary course of business and (ii) sales of assets
pursuant to Section 8.02(e), (f), (g), (p), (u), (w), (x) or (z), provided, that
--------
the sale of the
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Natural Touch trademark and the one-time sale of inventory related thereto
pursuant to Section 8.02 shall be considered an Asset Sale.
"Assignment and Assumption Agreement" shall mean the Assignment and
Assumption Agreement substantially in the form of Exhibit J (appropriately
completed).
"Authorized Officer" shall mean the Chief Executive Officer,
President, Chief Financial Officer, Treasurer, Controller or Secretary or any
other senior officer of Holdings or the Borrower designated as such in writing
to the Agent by Holdings or the Borrower, in each case to the extent reasonably
acceptable to the Agent.
"B Banks" shall have the meaning provided in Section 4.02(C).
"B Term Loan" shall have the meaning provided in Section 1.01(A)(b).
"B Term Loan Commitment" shall mean, with respect to each Bank, the
amount set forth opposite such Bank's name in Annex I directly below the column
entitled "B Term Loan Commitment," as the same may be terminated pursuant to
Section 3.03 and/or 9 or otherwise modified pursuant to Section 1.13 and/or
12.04(b).
"B Term Loan Facility" shall mean the Facility evidenced by the Total
B Term Loan Commitment.
"B Term Loan Maturity Date" shall mean February 29,2004.
"B Term Note" shall have the meaning provided in Section 1.05(a).
"B TL Percentage" shall mean, at any time, a fraction (expressed as a
percentage) the numerator of which is equal to the aggregate principal amount of
all B Term Loans outstanding at such time and the denominator of which is equal
to the aggregate principal amount of all Term Loans outstanding at such time.
"▇▇▇▇ Capital" shall mean ▇▇▇▇ Capital, Inc. a Delaware corporation.
"Bank" shall have the meaning provided in the first paragraph of this
Agreement.
"Bank Default" shall mean (i) the refusal (which has not been
retracted) of an RL Bank to make available its portion of any Borrowing or to
fund its portion of any unreimbursed payment under Section 2.04(c) or (ii) an RL
Bank having notified the Agent and/or the Borrower that it does not intend to
comply with the obligations under Section 1.01(A)(c), 1.01(C) or 2.04(c), in the
case of either clause (i) or (ii) above as a result of the appointment of a
receiver or conservator with respect to such Bank at the direction or request of
any regulatory agency or authority.
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"Bankruptcy Code" shall have the meaning provided in Section 9.05.
"Base Rate" at any time shall mean the higher of (x) the rate which is
1/2 of 1% in excess of the Adjusted Certificate of Deposit Rate and (y) the
Prime Lending Rate.
"Base Rate Loan" shall mean each Loan bearing interest at the rates
provided in Section 1.08(a).
"Borrower" shall have the meaning provided in the first paragraph of
this Agreement.
"Borrower Subordinated Loans" shall have the meaning provided in
Section 8.05(s).
"Borrower Subordinated Note" shall mean an unsecured junior
subordinated note issued by the Borrower (and not guaranteed or supported in any
way by any Subsidiary of the Borrower) in the form of Exhibit M, as amended,
modified or supplemented from time to time in accordance with the terms hereof
and thereof.
"Borrowing" shall mean the incurrence of one Type of Loan pursuant to
a single Facility by the Borrower from all of the Banks having Commitments with
respect to such Facility on a pro rata basis on a given date (or resulting from
--- ----
conversions on a given date), having in the case of Eurodollar Loans the same
Interest Period; provided, that Base Rate Loans incurred pursuant to Section
--------
1.10(b) shall be considered part of any related Borrowing of Eurodollar Loans.
"BTCo" shall mean Bankers Trust Company, in its individual capacity,
and any successor corporation thereto by merger, consolidation or otherwise.
"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day excluding Saturday, Sunday and any day which shall
be in the City of New York a legal holiday or a day on which banking
institutions are authorized by law or other governmental actions to close and
(ii) with respect to all notices and determinations in connection with, and
payments of principal and interest on, Eurodollar Loans, any day which is a
Business Day described in clause (i) and which is also a day for trading by and
between banks in U.S. dollar deposits in the interbank Eurodollar market.
"Capital Expenditures" shall mean, with respect to any Person, without
duplication, all expenditures by such Person which should be capitalized in
accordance with GAAP, including, without duplication, all such expenditures with
respect to fixed or capital assets (including, without limitation, expenditures
for maintenance and repairs which should be capitalized in accordance with
GAAP), and the amount of all Capitalized Lease Obligations incurred by such
Person.
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"Capital Lease," as applied to any Person, shall mean any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"Capitalized Lease Obligations" shall mean all obligations under
Capital Leases of the Borrower or any of its Subsidiaries in each case taken at
the amount thereof accounted for as liabilities in accordance with GAAP.
"Cash Equivalents" shall mean (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided, that the full faith and credit of the United
--------
States of America is pledged in support thereof) having maturities of not more
than twelve months from the date of acquisition, (ii) U.S. dollar denominated
time deposits, certificates of deposit and bankers acceptances of (x) any Bank
or (y) any bank whose short-term commercial paper rating from Standard & Poor's
Corporation ("S&P") is at least A-1 or the equivalent thereof or from ▇▇▇▇▇'▇
Investors Service, Inc. ("▇▇▇▇▇'▇") is at least P-1 or the equivalent thereof
(any such bank or Bank, an "Approved Bank"), in each case with maturities of not
more than twelve months from the date of acquisition, (iii) commercial paper
issued by any Approved Bank or by the parent company of any Approved Bank and
commercial paper issued by, or guaranteed by, any industrial or financial
company with a short-term commercial paper rating of at least A-1 or the
equivalent thereof by S&P or at least P-1 or the equivalent thereof by Moody's,
or guaranteed by any industrial company with a long term unsecured debt rating
of at least A or A2, or the equivalent of each thereof, from S&P or Moody's, as
the case may be, and in each case maturing within twelve months after the date
of acquisition, (iv) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof maturing within twelve months from the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either S&P or Moody's and (v) investments in
money market funds substantially all the assets of which are comprised of
securities of the types described in clauses (i) through (iv) above.
"Change of Control Event" shall mean (a) Holdings shall cease to own
directly 100% on a fully diluted basis of the economic and voting interest in
the Borrower's capital stock or (b) ▇▇▇▇ Capital and/or its Related Parties
shall cease to own on a fully diluted basis in the aggregate at least 51% of the
economic and voting interest in Holdings' capital stock.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of this
Agreement and any subsequent provisions of the Code amendatory thereof,
supplemental thereto or substituted therefor.
"Collateral" shall mean all of the Collateral as defined in each of
the Security Documents.
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"Collateral Agent" shall mean the Agent acting as collateral agent for
the Secured Creditors.
"Collective Bargaining Agreements" shall have the meaning provided in
Section 5.13(b).
"Commitment" shall mean, with respect to each Bank, such Bank's A Term
Loan Commitment, B Term Loan Commitment and Revolving Loan Commitment.
"Commitment Fee" shall have the meaning provided in Section 3.01(a).
"Consolidated Current Assets" shall mean, at any time, the current
assets (other than cash, Cash Equivalents and deferred income taxes to the
extent included in current assets) of the Borrower and its Subsidiaries at such
time determined on a consolidated basis.
"Consolidated Current Liabilities" shall mean, at any time, the
current liabilities of the Borrower and its Subsidiaries determined on a
consolidated basis, but excluding (i) deferred income taxes, (ii) the current
portion of and accrued but unpaid interest on any Indebtedness under this
Agreement and any other long-term Indebtedness which would otherwise be included
therein, (iii) short-term borrowings of Foreign Subsidiaries unless the proceeds
thereof are used to finance current assets of such Foreign Subsidiaries and (iv)
to the extent deducted in determining Consolidated Net Income, reserves for
incentive employee bonuses, litigation reserves and delinquent and/or disputed
accounts payable.
"Consolidated Debt" shall mean, at any time, all Indebtedness of the
Borrower and its Subsidiaries determined on a consolidated basis, provided that
--------
for purposes of this definition, the amount of Indebtedness in respect of
Interest Rate Protection Agreements shall be at any time the unrealized net loss
portion, if any, of the Borrower and/or its Subsidiaries thereunder on a marked-
to-market basis determined no more than one month prior to such time.
"Consolidated EBIT" shall mean, for any period, Consolidated Net
Income, before (i) total interest expense (inclusive of amortization of deferred
financing fees, premiums on Interest Rate Protection Agreements and any other
original issue discount) of the Borrower and its Subsidiaries determined on a
consolidated basis, (ii) the write-off of inventory step-up and in-process
research and development costs in accordance with purchase accounting, (iii) any
non-cash charges deducted in determining Consolidated Net Income for such period
and related to the issuance by Holdings of stock, warrants or options to
management (or any exercise of any such warrants or options), (iv) provisions
for taxes based on income and foreign withholding taxes, (v) giving effect to
any extraordinary gains or losses but with giving effect to gains or losses from
sales of assets sold in the ordinary course of business, (vi) any non-cash
charges related to the write-up of samples in accordance with purchase
accounting and (vii) Restructuring Expenditures to the extent deducted in
determining Consolidated Net Income for such period, provided that the aggregate
--------
amount of Restructuring Expenditures added back pursuant to this clause (vii)
for all periods shall not exceed $24,500,000.
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"Consolidated EBITDA" shall mean, for any period, Consolidated EBIT,
adjusted by adding thereto the amount of all depreciation expense and
amortization expense that were deducted in determining Consolidated EBIT for
such period.
"Consolidated Interest Expense" shall mean, for any period, total
interest expense (including that attributable to Capital Leases in accordance
with GAAP) of the Borrower and its Subsidiaries determined on a consolidated
basis with respect to all outstanding Indebtedness of the Borrower and its
Subsidiaries, including, without limitation, all commissions, discounts and
other fees and charges owed with respect to letters of credit and bankers'
acceptance financing and net costs or benefits under Interest Rate Protection
Agreements, but excluding, however, amortization of any payments made to obtain
any Interest Rate Protection Agreements and deferred financing costs and any
interest expense on deferred compensation arrangements to the extent included in
total interest expense.
"Consolidated Net Income" shall mean, for any period, the net income
(or loss), after provision for taxes, of the Borrower and its Subsidiaries on a
consolidated basis for such period taken as a single accounting period but
excluding any unrealized losses and gains for such period resulting from ▇▇▇▇-
to-market of Other Hedging Agreements; provided that (x) for purposes of Section
--------
8.11 and the definitions of Applicable Commitment Fee Percentage, Applicable
Equity/ECF Percentage, Interest Reduction Discount and Reduced Leverage Period
there shall be included (to the extent not already included) in determining
Consolidated Net Income for any period the net income (or loss) of any Person,
business, property or asset acquired during such period pursuant to Section
8.02(q) and not subsequently sold or otherwise disposed of by the Borrower or
one of its Subsidiaries during such period (each such Person, business, property
or asset acquired and not subsequently disposed of during such period, an
"Acquired Entity or Business"), in each case based on the actual net income (or
loss) of such Acquired Entity or Business for the entire period (including the
portion thereof occurring prior to such acquisition) and (y) for purposes of
calculating Consolidated Net Income for any period, Consolidated Net Income
shall be adjusted for factually supportable and identifiable cost savings for
such period determined in accordance with GAAP and concurred in by the
Borrower's independent accountants that are directly attributable to the
acquisition of an Acquired Entity or Business pursuant to a Permitted
Acquisition.
"Contingent Obligations" shall mean as to any Person any obligation of
such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(a) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (b) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency 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 to make payment of
such primary obligation or (d) otherwise to assure or hold harmless the owner of
such
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primary obligation against loss in respect thereof; provided, however, that the
-------- -------
term Contingent Obligation shall not include endorsements of instruments for
deposit or collection or standard contractual indemnities entered into, in each
case in the ordinary course of business. The amount of any Contingent Obligation
shall be deemed to be an amount equal to the stated or determinable amount of
the primary obligation in respect of which such Contingent Obligation is made
or, if not stated or determinable, the maximum reasonably anticipated liability
in respect thereof (assuming such Person is required to perform thereunder) as
determined by such Person in good faith.
"Credit Documents" shall mean this Agreement, the Notes, the
Guaranties and each Security Document.
"Credit Event" shall mean the making of a Loan (other than a Revolving
Loan made pursuant to a Mandatory Borrowing) or the issuance of a Letter of
Credit.
"Credit Party" shall mean Holdings, the Borrower and each Subsidiary
Guarantor.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a Bank
Default is in effect.
"Designated Real Property Sale" shall mean a sale by the Borrower
and/or any of its Subsidiaries of the Real Property owned by them as of the
Initial Borrowing Date and located in San Diego, California.
"Dividends" shall have the meaning provided in Section 8.06.
"Documents" shall mean the Credit Documents, the Acquisition
Documents, the Seller Subordinated Note and the Refinancing Documents.
"Domestic Subsidiary" shall mean each Subsidiary of the Borrower
which is not a Foreign Subsidiary.
"Effective Date" shall have the meaning provided in Section 12.10.
"Eligible Transferee" shall mean and include a commercial bank,
investment company, financial institution or other "accredited investor" (as
defined in Regulation D of the Securities Act).
"Employment Agreements" shall have the meaning provided in
Section 5.13(f).
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"End Date" shall mean the last day of any Applicable Period.
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of non-compliance or violation, investigations or proceedings relating
in any way to any violation (or alleged violation) by Holdings or any of its
Subsidiaries under any Environmental Law (hereafter "Claims") or any permit
issued under any such law, including, without limitation, (a) any and all Claims
by governmental or regulatory authorities for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and (b) any and all Claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials or arising from alleged
injury or threat of injury to health, safety or the environment.
"Environmental Law" shall mean any federal, state or local statute,
law, rule, regulation, ordinance, code, policy or rule of common law now or
hereafter in effect and in each case as amended, and any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent, decree or judgment (for purposes of this definition
(collectively, "Laws")), relating to the environment or Hazardous Materials or
health and safety to the extent health and safety issues arise under the
Occupational Safety and Health Act of 1970, as amended, or any such similar
Laws.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and the
rulings issued thereunder. Section references to ERISA are to ERISA as in
effect at the date of this Agreement and any subsequent provisions of ERISA
amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with Holdings or any Subsidiary of Holdings would be
deemed to be a "single employer" within the meaning of Section 414(b), (c), (m)
or (o) of the Code.
"Eurodollar Loans" shall mean each Loan bearing interest at the rates
provided in Section 1.08(b).
"Eurodollar Rate" shall mean, with respect to each Interest Period for
a Eurodollar Loan, (i) the arithmetic average (rounded to the nearest 1/100 of
1%) of the offered quotation to first-class banks in the interbank Eurodollar
market by the Agent for U.S. dollar deposits of amounts in same day funds
comparable to the outstanding principal amount of the Eurodollar Loan of the
Agent for which an interest rate is then being determined with maturities
comparable to the Interest Period to be applicable to such Eurodollar Loan,
determined as of 10:00 A.M. (New York time) on the date which is two Business
Days prior to the commencement of such Interest Period divided (and rounded
upward to the next whole multiple of 1/16 of 1%) by (ii) a percentage equal to
100% minus the then stated maximum rate of all reserve requirements (including,
without limitation, any marginal, emergency, supplemental,
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special or other reserves) applicable to any member bank of the Federal Reserve
System in respect of Eurocurrency liabilities as defined in Regulation D (or any
successor category of liabilities under Regulation D).
"Event of Default" shall have the meaning provided in Section 9.
"Excess Cash Flow" shall mean, for any period, (i) the sum of (A)
Consolidated Net Income for such period, plus (B) without duplication, the
----
amount of all non-cash charges (including, without limitation or duplication,
depreciation, amortization and non-cash interest expense but excluding any non-
cash charges deducted in determining Consolidated Current Liabilities) included
in determining Consolidated Net Income for such period, plus (C) the decrease,
----
if any, in Working Capital from the first day to the last day of such period,
plus (D) any cash reimbursement from the Seller required pursuant to the
----
Acquisition Agreements for purchase price adjustments (other than reimbursements
or payments used or to be used within twelve months following the Initial
Borrowing Date to effect the European restructuring), minus (ii) the sum of (A)
-----
any non-cash credits (including from sales of assets but excluding reserves
excluded from Consolidated Current Liabilities (as described in item (iv) of the
definition thereof) in a previous period to the extent such reserves are
reversed in the current period) included in determining Consolidated Net Income
for such period, (B) gains from sales of assets (other than sales of inventory
in the ordinary course of business) included in determining Consolidated Net
Income for such period, (C) an amount equal to (1) all Capital Expenditures
(excluding Capital Expenditures made pursuant to Section 8.08(c) and (d)) made
during such period that are not financed by Indebtedness (including Capitalized
Lease Obligations but excluding Loans hereunder) plus (or minus, if negative)
(2) the Rollover Amount for such period to be carried forward to the next period
less the Rollover Amount (if any) for the preceding period carried forward to
the current period, (D) the aggregate principal amount of permanent principal
payments of Indebtedness for borrowed money of the Borrower and its Subsidiaries
(other than repayments of Loans, provided that repayments of Loans shall be
deducted in determining Excess Cash Flow if such repayments were (x) required as
a result of a Scheduled A Repayment or a Scheduled B Repayment under Section
4.02(A)(b) or (y) made as a voluntary prepayment with internally generated funds
(but in the case of a voluntary prepayment of Revolving Loans, only to the
extent accompanied by a voluntary reduction to the Total Revolving Loan
Commitment)) during such period, (E) non-cash charges added back in a previous
period pursuant to clause (i)(B) above to the extent any such charge has become
a cash item in the current period, (F) the increase, if any, in Working Capital
from the first day to the last day of such period, (G) costs incurred by
Holdings during such period and paid for with the proceeds of dividends paid by
the Borrower pursuant to Section 8.06(iv), to the extent not deducted in
determining Consolidated Net Income for such period, (H) any cash payment to the
Seller required pursuant to the Acquisition Agreements for purchase price
adjustments, (I) any cash Restructuring Expenditures incurred during such period
to the extent not deducted in determining Consolidated Net Income for such
period, (J) any Restructuring Reserves as at the end of such period and (K) any
cash disbursements made during such period against non-current liabilities (such
as transition reserves and deferred taxes) to the extent not deducted in
determining Consolidated Net Income.
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"Excess Cash Flow Period" shall mean (i) the period from and including
the day following the Initial Borrowing Date to and including December 31, 1997
and (ii) with respect to each fiscal year thereafter, such fiscal year.
"Excess Cash Payment Date" shall mean the date occurring 90 days after
the last day of a fiscal year of the Borrower (beginning with its fiscal year
ending on December 31, 1997).
"Excess Earnings Amount" shall initially be zero, which amount shall
be (A) increased on the 90th day following each fiscal year of the Borrower
---------
(commencing with the fiscal year ending December 31, 1997), by an amount equal
to (i) the amount, if any, by which Consolidated EBITDA for the immediately
preceding fiscal year exceeds the projected Consolidated EBITDA set forth on
Annex XII for such immediately preceding fiscal year multiplied by (ii) 0.25,
and (B) reduced (i) at the time any Capital Expenditure is made pursuant to
-------
Section 8.08(f), by the amount of such Capital Expenditure and (ii) at the time
any investment is made pursuant to Section 8.05(w), by the amount (if any) of
clause (B) thereof used to make such investment (it being understood that for
this purpose the Borrower shall be deemed to have used the clause (A) amount of
Section 8.05(w) to the maximum extent available before any of the clause (B)
amount shall be deemed to have been used).
"Excess Proceeds" shall mean (i) the portion of the net proceeds
received by Holdings after the Effective Date from any registered public
offering of Holdings Common Stock and/or from the issuance of Holdings common
stock pursuant to a Permitted Strategic Equity Issuance, in each case which is
permitted to be retained by Holdings pursuant to Section 4.02(A)(d), to the
extent contributed to the Borrower in accordance with Section 7.16, (ii) the
portion of Excess Cash Flow of the Borrower and its Subsidiaries which is
permitted to be retained by the Borrower pursuant to Section 4.02(A)(f) and
(iii) 100% of the Permitted Equity Proceeds received by Holdings from time to
time, to the extent contributed or loaned to the Borrower in accordance with
Section 4.02(A)(d).
"Excess Proceeds Amount" shall initially be zero, which amount shall
be (A) increased (i) on each Excess Cash Payment Date (commencing with the
---------
Excess Cash Payment Date occurring 90 days after the fiscal year ending December
31, 1998) so long as any repayment required pursuant to Section 4.02(A)(f) has
been made, by an amount equal to that percentage of Excess Cash Flow of the
Borrower and its Subsidiaries which is permitted to be retained pursuant to
Section 4.02(A)(f) of Excess Cash Flow for the immediately preceding Excess Cash
Flow Period, (ii) on the date of the receipt by Holdings of the proceeds from
any registered public offering of Holdings Common Stock and/or from the issuance
of Holdings common stock pursuant to a Permitted Strategic Equity Issuance, in
each case so long as any repayment pursuant to Section 4.02(A)(d) has been made
and Holdings has contributed such proceeds to the Borrower in accordance with
Section 7.16, by an amount equal to 25% (or during any Reduced Leverage Period,
50%) of the net proceeds from such offering or issuance and (iii) on the date of
the receipt by Holdings of any Permitted Equity Proceeds so long as Holdings has
contributed or loaned such Permitted Equity Proceeds to the Borrower in
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accordance with Section 4.02(A)(d), by an amount equal to 100% of such Permitted
Equity Proceeds, and (B) reduced (i) on each Excess Cash Payment Date
-------
(commencing with the Excess Cash Payment Date occurring 90 days after the fiscal
year ending December 31, 1998) where Excess Cash Flow for the immediately
preceding Excess Cash Flow Period is a negative number, by such amount, (ii) at
the time any Capital Expenditure is made pursuant to Section 8.08(e), by the
amount thereof, (iii) at the time any Permitted Acquisition is made, by the
amount of Excess Proceeds expended in connection therewith, (iv) at the time
when Holdings redeems or prepays the Seller Subordinated Note pursuant to
Section 8.12(i), by the aggregate amount so expended by Holdings in connection
therewith, (v) at the time when the Borrower or any Domestic Subsidiary makes an
Intercompany Loan to a Foreign Subsidiary pursuant to Section 8.05(g), by the
amount (if any) of Excess Proceeds expended in connection therewith, and (vi) at
the time when the Borrower or any Domestic Subsidiary makes a contribution to or
a capitalization or forgiveness of Indebtedness of any Foreign Subsidiary
pursuant to Section 8.05(m), by the amount (if any) of Excess Proceeds expended
in connection therewith (it being understood that the Excess Proceeds Amount may
be reduced to an amount below zero after giving effect to the reductions
enumerated in clause (B) above).
"Existing Credit Agreement" shall mean the Credit Agreement, dated as
of June 28, 1995, among the Borrower, the financial institutions named therein
and The First National Bank of Chicago, as Agent, as in effect on the Effective
Date.
"Existing Indebtedness" shall have the meaning provided in
Section 6.24.
"Existing Indebtedness Agreements" shall have the meaning provided in
Section 5.13(c).
"Facility" shall mean any of the credit facilities established under
this Agreement, i.e., the A Term Loan Facility, the B Term Loan Facility or the
----
Revolving Loan Facility.
"Facing Fee" shall have the meaning provided in Section 3.01(c).
"Fees" shall mean all amounts payable pursuant to, or referred to
in, Section 3.01.
"Foreign Cash Equivalents" shall mean certificates of deposit or
bankers acceptances of any bank organized under the laws of Canada, Japan or any
country that is a member of the European Economic Community whose short-term
commercial paper rating from S&P is at least A-1 or the equivalent thereof or
from ▇▇▇▇▇'▇ is at least P-1 or the equivalent thereof, in each case with
maturities of not more than twelve months from the date of acquisition.
"Foreign Pension Plan" shall mean any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or
maintained outside the
-▇▇-
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ by Holdings or any one or more of its Subsidiaries
primarily for the benefit of employees of Holdings or such Subsidiaries residing
outside the United States of America, which plan, fund or other similar program
provides, or results in, retirement income, a deferral of income in
contemplation of retirement or payments to be made upon termination of
employment, and which plan is not subject to ERISA or the Code.
"Foreign Subsidiary" shall mean each Subsidiary of the Borrower that
is incorporated under the laws of any jurisdiction other than the United States
of America, any State thereof, or any territory thereof.
"Foreign Subsidiary Working Capital Indebtedness" shall have the
meaning provided in Section 8.04(h).
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time; it being understood and
agreed that determinations in accordance with GAAP for purposes of Section 8,
including defined terms as used therein, are subject (to the extent provided
therein) to Section 12.07(a).
"Guaranteed Creditors" shall mean and include each of the Agent, the
Collateral Agent, the Banks and each party (other than any Credit Party) party
to an Interest Rate Protection Agreement or Other Hedging Agreement to the
extent such party constitutes a Secured Creditor under the Security Documents.
"Guaranteed Obligations" shall mean (i) the full and prompt payment
when due (whether at the stated maturity, by acceleration or otherwise) of the
principal and interest on each Note issued by the Borrower to each Bank, and
Loans made, under this Agreement and all reimbursement obligations and Unpaid
Drawings with respect to Letters of Credit, together with all the other
obligations (including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due) and liabilities
(including, without limitation, indemnities, fees and interest thereon) of the
Borrower to such Bank now existing or hereafter incurred under, arising out of
or in connection with this Agreement or any other Credit Document and the due
performance and compliance with all the terms, conditions and agreements
contained in the Credit Documents by the Borrower and (ii) the full and prompt
payment when due (whether by acceleration or otherwise) of all obligations
(including obligations which, but for the automatic stay under Section 362(a) of
the Bankruptcy Code, would become due) of the Borrower owing under any such
Interest Rate Protection Agreement or Other Hedging Agreement entered into by
the Borrower or any of its Subsidiaries with any Bank or any affiliate thereof
(even if such Bank subsequently ceases to by a Bank under this Agreement for any
reason) so long as such Bank or affiliate participates in such Interest Rate
Protection Agreement or Other Hedging Agreement, and their subsequent assigns,
if any, whether now in existence or hereafter arising, and the due performance
and compliance with all terms, conditions and agreements contained therein.
"Guarantor" shall mean Holdings and each Subsidiary Guarantor.
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"Guaranty" shall mean and include each of the Holdings Guaranty and
the Subsidiary Guaranty.
"Hazardous Materials" shall mean (a) any petrochemical or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment that
contain dielectric fluid containing levels of polychlorinated biphenyls, and
radon gas; and (b) any chemicals, materials or substances defined as or included
in the definition of "hazardous substances," "hazardous wastes," "hazardous
materials," "restricted hazardous materials," "extremely hazardous wastes,"
"restrictive hazardous wastes," "toxic substances," "toxic pollutants,"
"contaminants" or "pollutants," or words of similar meaning and regulatory
effect.
"Holdings" shall have the meaning provided in the first paragraph of
this Agreement.
"Holdings Class L Common Stock" shall have the meaning provided in
Section 6.16.
"Holdings Common Stock" shall have the meaning provided in
Section 6.16.
"Holdings Guaranty" shall mean the guaranty of Holdings pursuant to
Section 13.
"Holdings Tax Allocation Agreement" shall mean the Tax Sharing
Agreement, dated as of the Effective Date, among Holdings and the Borrower and
its Domestic Subsidiaries.
"Indebtedness" of any Person shall mean without duplication (i) all
indebtedness of such Person for borrowed money, (ii) the deferred purchase price
of assets or services payable to the sellers thereof or any of such seller's
assignees which in accordance with GAAP would be shown on the liability side of
the balance sheet of such Person but excluding deferred rent as determined in
accordance with GAAP, (iii) the face amount of all letters of credit issued for
the account of such Person and, without duplication, all drafts drawn
thereunder, (iv) all Indebtedness of a second Person secured by any Lien on any
property owned by such first Person, whether or not such Indebtedness has been
assumed, (v) all Capitalized Lease Obligations of such Person, (vi) all
obligations of such Person to pay a specified purchase price for goods or
services whether or not delivered or accepted, i.e., take-or-pay and similar
----
obligations, (vii) all obligations under Interest Rate Protection Agreements and
Other Hedging Agreements and (viii) all Contingent Obligations of such Person,
provided, that Indebtedness shall not include trade payables and accrued
--------
expenses, in each case arising in the ordinary course of business.
"Indebtedness to be Refinanced" shall mean the indebtedness arising
pursuant to the Existing Credit Agreement.
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"Initial Borrowing Date" shall mean the date upon which the Term Loans
are initially incurred hereunder.
"Intercompany Loan" shall have the meaning provided in
Section 8.05(g).
"Intercompany Notes" shall mean promissory notes, in the form of
Exhibit K, evidencing Intercompany Loans.
"Interest Coverage Ratio" shall mean, for any period, the ratio of
Consolidated EBITDA to Consolidated Interest Expense for such period.
"Interest Period," with respect to any Eurodollar Loan, shall mean the
interest period applicable thereto, as determined pursuant to Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement, interest
rate hedging agreement or other similar agreement or arrangement.
"Interest Reduction Discount" shall mean initially zero, provided that
--------
during any Applicable Period the Interest Reduction Discount shall be the
respective percentage per annum set forth in clause (A) or (B) below if, but
only if, as of the Test Date with respect to such Applicable Period the
condition set forth in clause (A) or (B) below is met:
(A) 1/4 of 1% if the Leverage Ratio on such Test Date is less than
3.0:1.0; or
(B) 1/2 of 1% if the Leverage Ratio on such Test Date is less than
2.5:1.0.
Notwithstanding anything to the contrary contained above in this definition, the
Interest Reduction Discount shall be zero at any time when an Event of Default
shall exist.
"L/C Supportable Indebtedness" shall mean (i) Foreign Subsidiary
Working Capital Indebtedness, (ii) obligations of the Borrower or its
Subsidiaries incurred in the ordinary course of business with respect to
insurance obligations and workers' compensation, surety bonds and other similar
statutory obligations and (iii) such other obligations of the Borrower or any of
its Subsidiaries as are reasonably acceptable to the Agent and the respective
Letter of Credit Issuer and otherwise permitted to exist pursuant to the terms
of this Agreement.
"Leasehold" of any Person shall mean all of the right, title and
interest of such Person as lessee or licensee in, to and under leases or
licenses of land, improvements and/or fixtures.
"Letter of Credit" shall have the meaning provided in Section 2.01(a).
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"Letter of Credit Fee" shall have the meaning provided in Section
3.01(b).
"Letter of Credit Issuer" shall mean BTCo, and any RL Bank which at
the request of the Borrower and with the consent of the Agent agrees, in such RL
Bank's sole discretion, to become a Letter of Credit Issuer for the purpose of
issuing Letters of Credit pursuant to Section 2.
"Letter of Credit Outstandings" shall mean, at any time, the sum of,
without duplication, (i) the aggregate Stated Amount of all outstanding Letters
of Credit and (ii) the aggregate amount of all Unpaid Drawings in respect of all
Letters of Credit.
"Letter of Credit Request" shall have the meaning provided in
Section 2.02(a).
"Leverage Ratio" shall mean, at any time, the ratio of Consolidated
Debt at such time to Consolidated EBITDA for the Test Period then last ended.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to give any of
the foregoing, any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under the UCC or any similar
recording or notice statute, and any lease having substantially the same effect
as the foregoing).
"Loan" shall mean each and every Loan made by any Bank hereunder,
including A Term Loans, B Term Loans, Revolving Loans or Swingline Loans.
"Majority Banks" of any Facility shall mean those Non-Defaulting Banks
which would constitute the Required Banks under, and as defined in, this
Agreement if all outstanding Obligations of the other Facilities under this
Agreement were repaid in full and all Commitments with respect thereto were
terminated.
"Management Agreements" shall have the meaning provided in
Section 5.13(e).
"Mandatory Borrowing" shall have the meaning provided in
Section 1.01(c).
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Adverse Effect" shall mean a material adverse effect on the
business, properties, assets, liabilities, condition (financial or otherwise) or
prospects of the Borrower, Holdings and its Subsidiaries taken as a whole or the
Borrower and its Subsidiaries taken as a whole.
"Material Contracts" shall have the meaning provided in
Section 5.13(h).
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"Maturity Date" with respect to any Facility shall mean either the A
Term Loan Maturity Date, the B Term Loan Maturity Date, or the Revolving Loan
Maturity Date, as the case may be.
"Maximum Swingline Amount" shall mean $10,000,000.
"Minimum Borrowing Amount" shall mean (i) for Base Rate Loans (other
than Swingline Loans), $1,000,000; (ii) for Eurodollar Loans, $1,000,000; and
(iii) for Swingline Loans, $250,000.
"Mortgage" shall have the meaning provided in Section 5.12(a).
"Mortgage Policies" shall have the meaning provided in
Section 5.12(b).
"Mortgaged Properties" shall mean and include (i) all Real Properties
owned and leased by Holdings and its Domestic Subsidiaries to the extent
designated as such on Annex III and (ii) each Real Property subjected to a
mortgage in favor of the Collateral Agent for the benefit of the Secured
Creditors pursuant to Section 7.11.
"NAIC" shall have the meaning provided in Section 1.10(c).
"Net Proceeds" shall mean, with respect to any Asset Sale, the
Proceeds resulting therefrom net of (a) cash expenses of sale (including
brokerage fees, if any, transfer taxes and payment of principal, premium and
interest of Indebtedness other than the Loans required to be repaid as a result
of such Asset Sale) and (b) incremental income taxes paid or payable as a result
thereof.
"Non-Defaulting Bank" shall mean each Bank other than a Defaulting
Bank.
"Note" shall mean each A Term Note, each B Term Note, each Revolving
Note and the Swingline Note.
"Notice of Borrowing" shall have the meaning provided in Section 1.03.
"Notice of Conversion" shall have the meaning provided in
Section 1.06.
"Notice Office" shall mean the office of the Agent located at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or such other office as the Agent
may designate to Holdings, the Borrower and the Banks from time to time.
"Obligations" shall mean all amounts, direct or indirect, contingent
or absolute, of every type or description, and at any time existing, owing to
the Agent, the Collateral Agent or any Bank pursuant to the terms of this
Agreement or any other Credit Document.
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"Original Acquisition" shall mean the acquisition by the Borrower and
its Subsidiaries of the ▇▇▇▇▇▇-▇▇▇▇▇▇ conventional and disposable soft contact
lenses business from the Schering Corporation.
"Other Hedging Agreements" shall mean any foreign exchange contracts,
currency swap agreements or other similar agreements or arrangements designed to
protect against fluctuations in currency values.
"Participant" shall have the meaning provided in Section 2.04(a).
"Payment Office" shall mean the office of the Agent located at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or such other office as the Agent
may designate to Holdings, the Borrower and the Banks from time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Pension Plan Refund" shall mean any cash payments (net of reasonable
costs associated therewith, including income, excise and other taxes payable
thereon) received by Holdings and/or of its Subsidiaries from any return of any
surplus assets from any single Plan or Foreign Pension Plan, other than any
return of amounts representing overestimates of any amounts due under any single
Plan or Foreign Pension Plan.
"Permitted Acquisition" shall have the meaning provided in
Section 8.02(q).
"Permitted Covenant" shall mean (i) any periodic reporting covenant,
(ii) any covenant restricting payments by Holdings with respect to any
securities of Holdings which are junior to the Permitted Holdings PIK
Securities, (iii) any covenant the default of which can only result in an
increase in the amount of any redemption price, repayment amount, dividend rate
or interest rate, (iv) any covenant the default of which gives rise only to
rights or remedies which are subject to subordination terms reasonably
acceptable to the Agent, (v) any covenant providing board observance rights with
respect to Holdings' board of directors and (vi) any other covenant that does
not adversely affect the interests of the Banks (as reasonably determined by the
Agent).
"Permitted Encumbrances" shall mean (i) those liens, encumbrances and
other matters affecting title to any Mortgaged Property listed in the Mortgage
Policies in respect thereof and found, on the date of delivery of such Mortgage
Policies to the Agent in accordance with the terms hereof, reasonably acceptable
by the Agent, (ii) as to any particular Mortgaged Property at any time, such
easements, encroachments, covenants, rights of way, minor defects,
irregularities or encumbrances on title which do not, in the reasonable opinion
of the Agent, materially impair such Mortgaged Property for the purpose for
which it is held by the mortgagor thereof, or the lien held by the Collateral
Agent, (iii) municipal and zoning ordinances, which are not violated in any
material respect by the existing improvements and
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the present use made by the mortgagor thereof of the Premises (as defined in the
respective Mortgage), (iv) general real estate taxes and assessments not yet
delinquent, and (v) such other items as the Agent may consent to (such consent
not to be unreasonably withheld).
"Permitted Equity Proceeds" shall have the meaning provided in Section
4.02(A)(d).
"Permitted Holdings PIK Securities" shall mean any preferred stock or
subordinated promissory note of Holdings (or any security of Holdings that is
convertible or exchangeable into any preferred stock or subordinated promissory
note of Holdings), so long as the terms of any such preferred stock,
subordinated promissory note or security of Holdings (i) do not provide any
collateral security, (ii) do not provide any guaranty or other support by the
Borrower or any Subsidiaries of the Borrower, (iii) do not contain any mandatory
put, redemption, repayment, sinking fund or other similar provision occurring
before the ninth anniversary of the Initial Borrowing Date, (iv) do not require
the cash payment of dividends or interest before the ninth anniversary of the
Initial Borrowing Date, (v) do not contain any covenants other than any
Permitted Covenant, (vi) do not grant the holders thereof any voting rights
except for (x) voting rights required to be granted to such holders under
applicable law and (y) limited customary voting rights on fundamental matters
such as mergers, consolidations, sales of substantial assets, or liquidations
involving Holdings, and (vii) are otherwise reasonably satisfactory to the
Agent.
"Permitted Liens" shall have the meaning provided in Section 8.03.
"Permitted Sale-Leaseback Transactions" shall mean the sale and
leaseback by the Borrower and/or any of its Subsidiaries of vehicles owned by
such Persons.
"Permitted Strategic Equity Issuance" shall mean any issuance of
Holdings common stock to a Person, so long as (i) the purpose of such investment
in Holdings by such Person is to form or enhance a strategic alliance or
relationship with Holdings and/or its Subsidiaries and (ii) after giving effect
to any such issuance of Holdings common stock, such Person and its Affiliates
shall not own more than 20% of the common stock of Holdings on a fully diluted
basis.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" shall mean any multiemployer or single-employer plan as defined
in Section 4001 of ERISA, which is maintained or contributed to by (or to which
there is an obligation to contribute of) Holdings, any of its Subsidiaries or
any ERISA Affiliate and each such plan for the five calendar year period
immediately following the latest date on which Holdings, any of its Subsidiaries
or any ERISA Affiliate maintained, contributed to or had an obligation to
contribute to such plan.
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"Pledge Agreement" shall have the meaning provided in Section 5.10(a).
"Pledged Securities" shall mean all the Pledged Securities as defined
in the Pledge Agreement.
"Prime Lending Rate" shall mean the rate which BTCo announces from
time to time as its prime lending rate, the Prime Lending Rate to change when
and as such prime lending rate changes. The Prime Lending Rate is a reference
rate and does not necessarily represent the lowest or best rate actually charged
to any customer. BTCo may make commercial loans or other loans at rates of
interest at, above or below the Prime Lending Rate.
"Proceeds" shall mean, with respect to any Asset Sale, the aggregate
cash payments (including any cash received by way of deferred payment pursuant
to a note receivable issued in connection with such Asset Sale, other than the
portion of such deferred payment constituting interest, but only as and when so
received) received by Holdings and/or any of its Subsidiaries from such Asset
Sale.
"Projections" shall have the meaning provided in Section 5.16.
"Puerto Rico Pledge Agreement" shall have the meaning provided in
Section 5.12(b).
"Puerto Rico Security Documents" shall mean the Puerto Rico Pledge
Agreement, the Chattel Mortgage, dated as of October 2, 1996, between ▇▇▇▇▇▇-
▇▇▇▇▇▇ (Puerto Rico), Inc., a Delaware corporation, as mortgagor, and the
Collateral Agent, as mortgagee and the Chattel Mortgage Note, dated as of
October 2, 1996, by ▇▇▇▇▇▇-▇▇▇▇▇▇ (Puerto Rico), Inc., a Delaware corporation,
in favor of the Collateral Agent.
"Quarterly Payment Date" shall mean the last Business Day of each
March, June, September and December commencing the last Business Day of December
1996.
"Real Property" of any Person shall mean all of the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"Recovery Event" shall mean the receipt by Holdings or any of its
Subsidiaries of any insurance or condemnation proceeds payable (i) by reason of
any theft, physical destruction or damage or any other similar event with
respect to any properties or assets of Holdings or any of its Subsidiaries, (ii)
by reason any condemnation, taking, seizing or similar event with respect to any
properties or assets of Holdings or any of its Subsidiaries and (iii) under any
policy of insurance required to be maintained under Section 7.03.
"Reduced Leverage Period" shall mean any Applicable Period if, and
only if, the Leverage Ratio was less than or equal to 3.0:1.0 on the Test Date
with respect thereto.
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"Refinancing" shall mean and include the refinancing and repayment in
full of all amounts outstanding under, and the termination in full of all
commitments and letters of credit in respect of, the Indebtedness to be
Refinanced.
"Refinancing Documents" shall mean each of the agreements, documents
and instruments entered into in connection with the Refinancing.
"Register" shall have the meaning provided in Section 7.13.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing margin requirements.
"Related Party" shall mean any Affiliate of ▇▇▇▇ Capital on the
Effective Date, provided that for purposes of the definition of "Change of
--------
Control Event," the term Related Party shall not include (x) any portfolio
company of ▇▇▇▇ Capital or any Affiliate of ▇▇▇▇ Capital or (y) any officer or
director of Holdings or any of its Subsidiaries if not also a partner or
stockholder of ▇▇▇▇ Capital on the Effective Date.
"Release" means disposing, discharging, injecting, spilling, pumping,
leaking, leaching, dumping, emitting, escaping, emptying, seeping, placing,
pouring and the like, into or upon any land or water or air, or otherwise
entering into the environment.
"Replaced Bank" shall have the meaning provided in Section 1.13.
"Replacement Bank" shall have the meaning provided in Section 1.13.
"Reportable Event" shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan other than those events as to which the 30-day
notice period is waived under subsection .13, .14, .16, .18, .19 or .20 of PBGC
Regulation Section 2615.
"Required Banks" shall mean Non-Defaulting Banks the sum of whose
outstanding Term Loans and Revolving Loan Commitments (or, if after the Total
Revolving Loan Commitment has been terminated, outstanding Revolving Loans and
RL Percentages of outstanding Swingline Loans and Letter of Credit Outstandings)
constitute greater than 50% of the sum of (i) the total outstanding Term Loans
of Non-Defaulting Banks and (ii) the Total Revolving Loan Commitment less the
aggregate Revolving Loan Commitments of Defaulting Banks (or, if after the Total
Revolving Loan Commitment has been terminated, the total outstanding Revolving
Loans of Non-Defaulting Banks and the aggregate RL Percentages of
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all Non-Defaulting Banks of the total outstanding Swingline Loans and Letter of
Credit Outstandings at such time).
"Restructuring Expenditures" shall mean nonrecurring expenditures and
charges arising out of the restructuring, consolidation, severance or
discontinuance of any portion of the operations of any entities or businesses of
Holdings and its Subsidiaries in connection with the Acquisition and the
Original Acquisition.
"Restructuring Reserves" shall mean, at any time, an amount equal to
$24,500,000 less all Restructuring Expenditures theretofore made after the
Initial Borrowing Date.
"Returns" shall have the meaning provided in Section 6.23.
"Revolving Loan" shall have the meaning provided in Section
1.01(A)(c).
"Revolving Loan Commitment" shall mean, with respect to each Bank, the
amount set forth opposite such Bank's name in Annex I directly below the column
entitled "Revolving Loan Commitment," as the same may be reduced from time to
time pursuant to Section 3.02, 3.03, 4.01(b) and/or 9 or otherwise modified
pursuant to Section 1.13 and/or 12.04(b).
"Revolving Loan Facility" shall mean the Facility evidenced by the
Total Revolving Loan Commitment.
"Revolving Loan Maturity Date" shall mean February 28, 2002.
"Revolving Note" shall have the meaning provided in Section 1.05(a).
"RL Bank" shall mean at any time each Bank with a Revolving Loan
Commitment or with outstanding Revolving Loans.
"RL Percentage" shall mean at any time for each RL Bank, the
percentage obtained by dividing such RL Bank's Revolving Loan Commitment by the
Total Revolving Loan Commitment; provided, that if the Total Revolving Loan
--------
Commitment has been terminated, the RL Percentage of each RL Bank shall be
determined by dividing such RL Bank's Revolving Loan Commitment immediately
prior to such termination by the Total Revolving Loan Commitment immediately
prior to such termination.
"Rollover Amount" shall have the meaning provided in Section 8.08(b),
provided that for purposes of the definition of Excess Cash Flow, for the Excess
--------
Cash Flow Period ending December 31, 1997 only, the term Rollover Amount shall
mean $23,000,000 minus the aggregate amount of Capital Expenditures made during
the period from the Initial Borrowing Date through December 31, 1997 under
Section 8.08(a).
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"Scheduled A Repayment" shall have the meaning provided in Section
4.02(A)(b)(i).
"Scheduled B Repayment" shall have the meaning provided in Section
4.02(A)(b)(ii).
"Scheduled Repayment" shall mean any Scheduled A Repayment and
Scheduled B Repayment.
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto.
"Section 4.04(b)(ii) Certificate" shall have the meaning provided in
Section 4.04(b)(ii).
"Secured Creditors" shall have the meaning provided in the respective
Security Documents.
"Security Agreement" shall have the meaning provided in Section
5.10(b).
"Security Agreement Collateral" shall mean all "Collateral" as defined
in the Security Agreement.
"Security Documents" shall mean and include the Security Agreement,
the Pledge Agreement, each Puerto Rico Security Documents, each Mortgage, each
Additional Security Document, if any and each other document or instrument
entered into pursuant to Sections 5.10 and 7.16, if any, in each case as and
when executed and delivered in accordance with the terms of this Agreement and
as the same may be amended, modified or supplemented from time to time in
accordance with the terms thereof and hereof.
"Seller" shall mean ▇▇▇▇▇▇▇▇▇▇ plc, a company registered under the
laws of England and Wales.
"Seller Subordinated Note" shall mean an unsecured junior subordinated
note issued by Holdings (and not guaranteed or supported in any way by the
Borrower or any of the Borrower's Subsidiaries or any other Person) in favor of
the Seller, in the form delivered to the Banks pursuant to Section 5.09(d) and
as amended, modified or supplemented from time to time in accordance with
Section 8.12.
"Senior Officer" shall mean Chief Executive Officer, President, Chief
Financial Officer, Treasurer, Controller or Secretary or any other senior
officer of Holdings or any of its Subsidiaries with knowledge of, or
responsibility for, the financial affairs of such Person.
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"Shareholder Subordinated Note" shall mean an unsecured junior
subordinated note issued by Holdings (and not guaranteed or supported in any way
by the Borrower or any of its Subsidiaries) in the form of Exhibit L, as the
same may be amended, modified or supplemented from time to time pursuant to the
terms hereof and thereof.
"Shareholders' Agreements" shall have the meaning set forth in Section
5.13(d).
"Start Date" shall mean the first day of any Applicable Period.
"Stated Amount" of each Letter of Credit shall mean at any time the
maximum amount available to be drawn thereunder (regardless of whether any
conditions for drawing could then be met).
"Subsidiary" of any Person shall mean and include (i) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person directly or
indirectly through Subsidiaries and (ii) any partnership, association, joint
venture or other entity in which such Person directly or indirectly through
Subsidiaries, has more than a 50% equity interest at the time.
"Subsidiary Guarantor" shall mean each Subsidiary of the Borrower
(other than a Foreign Subsidiary except to the extent otherwise provided in
Section 7.15) that is or becomes a party to the Subsidiary Guaranty.
"Subsidiary Guaranty" shall have the meaning provided in Section 5.11.
"Supermajority Banks" of any Facility shall mean those Non-Defaulting
Banks which would constitute the Required Banks under, and as defined in, this
Agreement if (x) all outstanding Obligations of the other Facilities under this
Agreement were repaid in full and all Commitments with respect thereto were
terminated and (y) the percentage "50%" contained therein were changed to "66-
2/3%."
"Swingline Expiry Date" shall mean the date which is five Business
Days prior to the Revolving Loan Maturity Date.
"Swingline Loan" shall have the meaning provided in Section 1.01(B).
"Swingline Note" shall have the meaning provided in Section 1.05(a).
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"Syndication Date" shall mean that date upon which the Agent
determines (and notifies the Borrower and the Banks) that the primary
syndication (and resulting addition of Persons as Banks pursuant to Section
12.04(b)) has been completed.
"Tax Allocation Agreements" shall have the meaning provided in Section
5.13(g).
"Taxes" shall have the meaning provided in Section 4.04.
"Term Loan" shall mean each A Term Loan and each B Term Loan.
"Term Loan Commitment" shall mean, with respect to each Bank at any
time, the sum of the A Term Loan Commitment and the B Term Loan Commitment of
such Bank at such time.
"Term Loan Facilities" shall mean the A Term Loan Facility and the B
Term Loan Facility.
"Test Date" shall mean, with respect to any Applicable Period, the
last day of the most recent fiscal quarter or fiscal year, as the case may be,
ended immediately prior to the Start Date with respect to such Applicable
Period.
"Test Period" shall mean (i) for any determination made prior to
September 30, 1997, the period from October 1, 1996 to the last day of the
fiscal quarter of the Borrower then last ended and (ii) for any determination
made thereafter, the four consecutive fiscal quarters of the Borrower then last
ended.
"Total A Term Loan Commitment" shall mean the sum of the A Term Loan
Commitments of each of the Banks.
"Total B Term Loan Commitment" shall mean the sum of the B Term Loan
Commitments of each of the Banks.
"Total Commitment" shall mean the sum of the Total Term Loan
Commitment and the Total Revolving Loan Commitment.
"Total Revolving Loan Commitment" shall mean the sum of the Revolving
Loan Commitments of each of the ▇▇ ▇▇▇▇▇.
"Total Term Loan Commitment" shall mean the sum of the Total A Term
Loan Commitment and the Total B Term Loan Commitment.
"Total Unutilized Revolving Loan Commitment" shall mean, at any time,
(i) the Total Revolving Loan Commitment at such time less (ii) the sum of the
aggregate principal
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amount of all Revolving Loans and Swingline Loans at such time plus the Letter
of Credit Outstandings at such time.
"Transaction" shall mean, collectively, (i) the Acquisition, (ii) the
Refinancing, (iii) the occurrence of Credit Events hereunder on the Initial
Borrowing Date, (iv) such other transactions as contemplated by the Documents
and (v) the payment of fees and expenses in connection with the foregoing.
"Type" shall mean any type of Loan determined with respect to the
interest option applicable thereto, i.e., a Base Rate Loan or a Eurodollar Loan.
----
"UCC" shall mean the Uniform Commercial Code as in effect from time to
time in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the amount, if
any, by which the actuarial present value of the accumulated plan benefits under
the Plan as of the close of its most recent plan year exceeds the fair market
value of the assets allocable thereto, each determined in accordance with
Statement of Financial Accounting Standards No. 35, based upon the actuarial
assumptions used by the Plan's actuary in the most recent annual valuation of
the Plan.
"Unpaid Drawing" shall have the meaning provided in Section 2.03(a).
"U.S. Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States of America.
"Waivable Mandatory Repayment" shall have the meaning provided in
Section 4.02(c).
"▇▇▇▇▇▇-▇▇▇▇▇▇ (Puerto Rico)" shall mean ▇▇▇▇▇▇-▇▇▇▇▇▇ (Puerto Rico),
Inc., a Delaware corporation.
"West Coast Asset Sale" shall mean the sale by the Borrower and/or any
of its Subsidiaries of (x) any or all of the assets on or at the Borrower's San
Diego, California facility, but excluding the Real Property relating to such
facility, and (y) any or all of the assets on or at the Borrower's Sunnyvale,
California facility, in the case of both clause (x) and (y) above to the extent
sold in connection with the restructuring or transfer to other facilities of the
operations at such facility.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's qualifying shares
and/or other nominal amounts of shares required to be held other than by such
Person under applicable law) is at the time owned by such Person and/or one or
more Wholly-Owned Subsidiaries of such Person and
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(ii) any partnership, association, joint venture or other entity in which such
Person and/or one or more Wholly-Owned Subsidiaries of such Person has a 100%
equity interest at such time.
"Working Capital" shall mean the excess of Consolidated Current Assets
over Consolidated Current Liabilities.
"Written," "written" or "in writing" shall mean any form of written
communication or a communication by means of telex, facsimile device, telegraph
or cable.
SECTION 11. The Agent.
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11.01 Appointment. Each Bank hereby irrevocably designates and
-----------
appoints BTCo as Agent of such Bank (such term to include for purposes of this
Section 11, BTCo acting as Collateral Agent) to act as specified herein and in
the other Credit Documents, and each such Bank hereby irrevocably authorizes
BTCo as the Agent to take such action on its behalf under the provisions of this
Agreement and the other Credit Documents and to exercise such powers and perform
such duties as are expressly delegated to the Agent by the terms of this
Agreement and the other Credit Documents, together with such other powers as are
reasonably incidental thereto. The Agent agrees to act as such upon the express
conditions contained in this Section 11. Notwithstanding any provision to the
contrary elsewhere in this Agreement or in any other Credit Document, the Agent
shall not have any duties or responsibilities, except those expressly set forth
herein or in the other Credit Documents, or any fiduciary relationship with any
Bank, and no implied covenants, functions, responsibilities, duties, obligations
or liabilities shall be read into this Agreement or otherwise exist against the
Agent. The provisions of this Section 11 are solely for the benefit of the
Agent and the Banks, and neither Holdings nor any of its Subsidiaries shall have
any rights as a third party beneficiary of any of the provisions hereof. In
performing its functions and duties under this Agreement, the Agent shall act
solely as agent of the Banks and the Agent does not assume and shall not be
deemed to have assumed any obligation or relationship of agency or trust with or
for Holdings or any of its Subsidiaries.
11.02 Delegation of Duties. The 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 be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care except to the extent otherwise required by Section 11.03.
11.03 Exculpatory Provisions. Neither the Agent nor any of its
----------------------
officers, directors, employees, agents, attorneys-in-fact or affiliates shall be
(i) liable for any action lawfully taken or omitted to be taken by it or such
Person in its capacity as Agent under or in connection with this Agreement or
the other Credit Documents (except for its or such Person's own gross negligence
or willful misconduct) or (ii) responsible in any manner to any of the Banks for
any recitals, statements, representations or warranties made by Holdings, any of
its Subsidiaries or
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any of their respective officers contained in this Agreement or the other Credit
Documents, any other Document or in any certificate, report, statement or other
document referred to or provided for in, or received by the Agent under or in
connection with, this Agreement or any other Document or for any failure of
Holdings or any of its Subsidiaries or any of their respective officers to
perform its obligations hereunder or thereunder. The Agent shall not be under
any obligation to any Bank to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or the other Documents, or to inspect the properties, books or records
of Holdings or any of its Subsidiaries. The Agent shall not be responsible to
any Bank for the effectiveness, genuineness, validity, enforceability,
collectability or sufficiency of this Agreement or any other Document or for any
representations, warranties, recitals or statements made herein or therein or
made in any written or oral statement or in any financial or other statements,
instruments, reports, certificates or any other documents in connection herewith
or therewith furnished or made by the Agent to the Banks or by or on behalf of
Holdings or any of its Subsidiaries to the Agent or any Bank or be required to
ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained herein or therein or
as to the use of the proceeds of the Loans or of the existence or possible
existence of any Default or Event of Default.
11.04 Reliance by Agent. The Agent shall be entitled to rely, and
-----------------
shall be fully protected in relying, upon any note, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, facsimile, telex
or teletype message, statement, order or other document or conversation believed
by it to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to Holdings or any of its Subsidiaries),
independent accountants and other experts selected by the Agent. The Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Credit Document unless it shall first receive such advice
or concurrence of the Required Banks as it deems appropriate or it shall first
be indemnified to its satisfaction by the Banks against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement and the other Credit
Documents in accordance with a request of the Required Banks (or all of the
Banks, to the extent required by this Agreement), and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Banks.
11.05 Notice of Default. The Agent shall not be deemed to have
-----------------
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent has actually received notice from a Bank, Holdings or
the Borrower 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 Agent receives such a notice, the Agent shall give prompt notice
thereof to the Banks. The Agent shall take such action with respect to such
Default or Event of Default as shall be reasonably directed by the Required
Banks; provided, that, unless and until the Agent shall have received such
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directions, the Agent may (but shall not be obligated to) take
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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 Banks.
11.06 Non-Reliance on Agent and Other Banks. Each Bank expressly
-------------------------------------
acknowledges that neither the Agent nor any of its respective officers,
directors, employees, agents, attorneys-in-fact or affiliates have made any
representations or warranties to it and that no act by the Agent hereinafter
taken, including any review of the affairs of Holdings or any of its
Subsidiaries, shall be deemed to constitute any representation or warranty by
the Agent to any Bank. Each Bank represents to the Agent that it has,
independently and without reliance upon the Agent or any other Bank, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, assets, operations, property,
financial and other condition, prospects and creditworthiness of Holdings and
its Subsidiaries and made its own decision to make its Loans hereunder and enter
into this Agreement. Each Bank also represents that it will, independently and
without reliance upon the Agent or any other Bank, 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
under this Agreement, and to make such investigation as it deems necessary to
inform itself as to the business, assets, operations, property, financial and
other condition, prospects and creditworthiness of Holdings and its
Subsidiaries. The Agent shall not have any duty or responsibility to provide
any Bank with any credit or other information concerning the business,
operations, assets, property, financial and other condition, prospects or
creditworthiness of Holdings or any of its Subsidiaries which may come into the
possession of the Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.
11.07 Indemnification. The Banks agree to indemnify the Agent in its
---------------
capacity as such ratably according to their respective "percentages" as used in
determining the Required Banks at such time or, if the Commitments have
terminated and all Loans have been repaid in full, as determined immediately
prior to such termination and repayment (with such "percentages" to be
determined as if there are no Defaulting Banks), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, reasonable expenses or disbursements of any kind whatsoever which may at
any time (including, without limitation, at any time following the payment of
the Obligations) be imposed on, incurred by or asserted against the Agent in its
capacity as such 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 any action taken or omitted to be taken
by the Agent under or in connection with any of the foregoing, but only to the
extent that any of the foregoing is not paid by Holdings or any of its
Subsidiaries; provided, that no Bank shall be liable to the Agent for the
--------
payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
primarily from the gross negligence or willful misconduct of the Agent. If any
indemnity furnished to the Agent for any purpose shall, in the opinion of the
Agent be insufficient or become impaired (other than as a result of the gross
negligence or willful misconduct of the Agent), the Agent may call for
additional indemnity and cease, or not commence, to do the acts
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indemnified against until such additional indemnity is furnished. The agreements
in this Section 11.07 shall survive the payment of all Obligations.
11.08 Agent in its Individual Capacity. The Agent and its affiliates
--------------------------------
may make loans to, accept deposits from and generally engage in any kind of
business with Holdings and its Subsidiaries as though the Agent were not the
Agent hereunder. With respect to the Loans made by it and all Obligations owing
to it, the Agent shall have the same rights and powers under this Agreement as
any Bank and may exercise the same as though it were not the Agent and the terms
"Bank" and "Banks" shall include the Agent in its individual capacity. The
Agent and/or its affiliates may own stock of Holdings or any Subsidiary of
Holdings and may accept deposits from, lend money to, and generally engage in
any kind of banking, trust or other business with Holdings or any Affiliate of
Holdings as if it were not performing the duties specified herein, and may
accept fees and other consideration from any Credit Party for services in
connection with this Agreement and otherwise without having to account for the
same to the Banks.
11.09 Holders. The Agent may deem and treat the payee of any Note as
-------
the owner thereof for all purposes hereof unless and until a written notice of
the assignment, transfer or endorsement thereof, as the case may be, shall have
been filed with the Agent. Any request, authority or consent of any Person or
entity who, at the time of making such request or giving such authority or
consent, is the holder of any Note shall be conclusive and binding on any
subsequent holder, transferee, assignee or indorsee, as the case may be, of such
Note or of any Note or Notes issued in exchange therefor.
11.10 Resignation of the Agent; Successor Agent. The Agent may
-----------------------------------------
resign as the Agent upon 20 days' notice to the Banks and, unless a Default of
the type referred to in Section 9.05 has occurred and is continuing, to the
Borrower. Upon the resignation of the Agent, the Required Banks shall appoint
from among the Banks a successor Agent which is a bank or a trust company for
the Banks subject, to the extent that no payment Default or Event of Default has
occurred and is then continuing, to prior approval by the Borrower (such
approval not to be unreasonably withheld or delayed), whereupon such successor
agent shall succeed to the rights, powers and duties of the Agent, and the term
"Agent" shall include such successor agent effective upon its appointment, and
the resigning Agent's rights, powers and duties as the Agent shall be
terminated, without any other or further act or deed on the part of such former
Agent or any of the parties to this Agreement. If a successor Agent shall not
have been so appointed within such 20 day period after the date such notice of
resignation was given by the Agent, the Agent's resignation shall become
effective and the Banks shall thereafter perform all duties of the Agent
hereunder and/or under any other Credit Documents until such time, if any, as
the Required Banks appoint a successor Agent as provided above. After the
resignation of the Agent hereunder, the provisions of this Section 11 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement.
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SECTION 12. Miscellaneous.
-------------
12.01 Payment of Expenses, etc. The Borrower hereby agrees to: (i)
-------------------------
whether or not the transactions herein contemplated are consummated, pay all
reasonable out-of-pocket costs and expenses of the Agent (including, without
limitation, the reasonable fees and disbursements of White & Case and local
counsel) in connection with the negotiation, preparation, execution and delivery
of the Credit Documents and the documents and instruments referred to therein
and any amendment, waiver or consent relating thereto and in connection with the
Agent's syndication efforts with respect to this Agreement; (ii) pay all
reasonable out-of-pocket costs and expenses of the Agent and each of the Banks
in connection with the enforcement of the Credit Documents and the documents and
instruments referred to therein and, after an Event of Default shall have
occurred and be continuing, the protection of the rights of the Agent and each
of the Banks thereunder (including, without limitation, the reasonable fees and
disbursements of counsel (including in-house counsel) for the Agent and for each
of the Banks); (iii) pay and hold each of the Banks harmless from and against
any and all present and future stamp and other similar taxes with respect to the
foregoing matters and save each of the Banks harmless from and against any and
all liabilities with respect to or resulting from any delay or omission (other
than to the extent attributable to such Bank) to pay such taxes; and (iv)
indemnify the Agent, the Collateral Agent and each Bank, its officers,
directors, trustees, employees, representatives and agents from and hold each of
them harmless against any and all losses, liabilities, claims, damages or
expenses incurred by any of them as a result of, or arising out of, or in any
way related to, or by reason of, (a) any investigation, litigation or other
proceeding (whether or not the Agent, the Collateral Agent or any Bank is a
party thereto and whether or not any such investigation, litigation or other
proceeding is between or among the Agent, the Collateral Agent, any Bank, any
Credit Party or any third Person or otherwise) related to the entering into
and/or performance of this Agreement or any other Document or the use of the
proceeds of any Loans hereunder or the Transaction or the consummation of any
other transactions contemplated in any Document (but excluding any such losses,
liabilities, claims, damages or expenses to the extent incurred by reason of the
gross negligence or willful misconduct of the Person to be indemnified), or (b)
the actual or alleged presence of Hazardous Materials in the air, surface water
or groundwater or on the surface or subsurface of any Real Property or any
Environmental Claim, in each case, including, without limitation, the reasonable
fees and disbursements of counsel and independent consultants incurred in
connection with any such investigation, litigation or other proceeding.
12.02 Right of Setoff, Collateral Matters. (a) In addition to any
-----------------------------------
rights now or hereafter granted under applicable law or otherwise, and not by
way of limitation of any such rights, upon the occurrence and during the
continuance of an Event of Default, each Bank is hereby authorized at any time
or from time to time, without presentment, demand, protest or other notice of
any kind to Holdings or any of its Subsidiaries or to any other Person, any such
notice being hereby expressly waived, to set off and to appropriate and apply
any and all deposits (general or special) and any other Indebtedness at any time
held or owing by such Bank (including, without limitation, by branches and
agencies of such Bank wherever located) to or for the credit or the account of
Holdings or any of its Subsidiaries against and on account of
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the Obligations of Holdings or any of its Subsidiaries to such Bank under this
Agreement or under any of the other Credit Documents, including, without
limitation, all interests in Obligations of Holdings or any of its Subsidiaries
purchased by such Bank pursuant to Section 12.06(b), and all other claims of any
nature or description arising out of or connected with this Agreement or any
other Credit Document, irrespective of whether or not such Bank shall have made
any demand hereunder and although said Obligations shall be contingent or
unmatured.
(b) NOTWITHSTANDING THE FOREGOING SUBSECTION (a), AT ANY TIME THAT
THE LOANS OR ANY OTHER OBLIGATION SHALL BE SECURED BY REAL PROPERTY LOCATED IN
CALIFORNIA, NO BANK SHALL EXERCISE A RIGHT OF SETOFF, BANKER'S LIEN OR
COUNTERCLAIM OR TAKE ANY COURT OR ADMINISTRATIVE ACTION OR INSTITUTE ANY
PROCEEDING TO ENFORCE ANY PROVISION OF THIS AGREEMENT OR ANY NOTE THAT IS NOT
TAKEN BY THE REQUIRED BANKS OR APPROVED IN WRITING BY THE REQUIRED BANKS IF SUCH
SETOFF OR ACTION OR PROCEEDING WOULD OR MIGHT (PURSUANT TO SECTIONS 580a, 580b,
580d AND 726 OF THE CALIFORNIA CODE OF CIVIL PROCEDURE OR SECTION 2924 OF THE
CALIFORNIA CIVIL CODE, IF APPLICABLE, OR OTHERWISE) AFFECT OR IMPAIR THE
VALIDITY, PRIORITY OR ENFORCEABILITY OF THE LIENS GRANTED TO THE COLLATERAL
AGENT PURSUANT TO THE SECURITY DOCUMENTS OR THE ENFORCEABILITY OF THE NOTES AND
OTHER OBLIGATIONS HEREUNDER, AND ANY ATTEMPTED EXERCISE BY ANY BANK OF ANY SUCH
RIGHT WITHOUT OBTAINING SUCH CONSENT OF THE REQUIRED BANKS SHALL BE NULL AND
VOID. THIS SUBSECTION (b) SHALL BE SOLELY FOR THE BENEFIT OF EACH OF THE BANKS
HEREUNDER.
12.03 Notices. Except as otherwise expressly provided herein, all
-------
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, facsimile or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered, if to any Credit Party,
at the address specified opposite its signature below or in the other relevant
Credit Documents, as the case may be; if to any Bank, at its address specified
for such Bank on Annex II; or, at such other address as shall be designated by
any party in a written notice to the other parties hereto. All such notices and
communications shall be mailed, telegraphed, telexed, telecopied or cabled or
sent by overnight courier, and shall be effective when received.
12.04 Benefit of Agreement. (a) This Agreement shall be binding
--------------------
upon and inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto; provided, however, no Credit Party may assign
-------- -------
or transfer any of its rights, obligations or interest hereunder or under any
other Credit Document without the prior written consent of all of the Banks and,
provided further, that no Bank may assign or transfer all or any portion of its
----------------
Revolving Loan Commitment and/or its outstanding Loans except as provided in
Section 12.04(b) and, provided further, that although any Bank may grant
----------------
participations in its rights hereunder in accordance with this Section, such
Bank shall remain a "Bank" for all purposes
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hereunder and the participant shall not constitute a "Bank" hereunder and,
provided further, that no Bank shall grant any participation under which the
----------------
participant shall have rights to approve any amendment to or waiver of this
Agreement or any other Credit Document except to the extent such amendment or
waiver would (i) extend the final scheduled maturity of any Loan, Note or Letter
of Credit (unless such Letter of Credit is not extended beyond the Revolving
Loan Maturity Date) in which such participant is participating, or reduce the
rate or extend the time of payment of interest or Fees thereon (except in
connection with a waiver of applicability of any post-default increase in
interest rates) or reduce the principal amount thereof, or increase the amount
of the participant's participation over the amount thereof then in effect (it
being understood that a waiver of any Default or Event of Default or of a
mandatory reduction in the Total Commitment shall not constitute a change in the
terms of such participation, and that an increase in any Commitment or Loan
shall be permitted without the consent of any participant if the participant's
participation is not increased as a result thereof), (ii) consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement or (iii) release all or substantially all of the Collateral
under all of the Security Documents (except as expressly provided in the Credit
Documents) supporting the Loans hereunder in which such participant is
participating. In the case of any such participation, the participant shall not
have any rights under this Agreement or any of the other Credit Documents (the
participant's rights against such Bank in respect of such participation to be
those set forth in the agreement executed by such Bank in favor of the
participant relating thereto) and all amounts payable by the Borrower hereunder
shall be determined as if such Bank had not sold such participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank together
with one or more other Banks) may (x) assign all or a portion of its Revolving
Loan Commitment (and related outstanding Obligations hereunder) and/or its
outstanding Term Loans to its parent company and/or any affiliate of such Bank
which is at least 50% owned by such Bank or its parent company or to one or more
Banks or (y) assign all, or if less than all, a portion equal to at least
$5,000,000 in the aggregate for the assigning Bank or assigning Banks, of such
Revolving Loan Commitments and outstanding principal amount of Term Loans
hereunder to one or more Eligible Transferees, each of which assignees shall
become a party to this Agreement as a Bank by execution of an Assignment and
Assumption Agreement, provided that (i) at such time Annex I shall be deemed
--------
modified to reflect the Commitments (and/or outstanding Term Loans, as the case
may be) of such new Bank and of the existing Banks, (ii) upon surrender of the
old Notes, new Notes will be issued, at the Borrower's expense, to such new Bank
and to the assigning Bank, such new Notes to be in conformity with the
requirements of Section 1.05 (with appropriate modifications) to the extent
needed to reflect the revised Commitments (and/or outstanding Term Loans, as the
case may be), (iii) the consent of the Agent shall be required in connection
with any such assignment pursuant to clause (y) of this Section 12.04(b) (which
consent shall not be unreasonably withheld or delayed) and (iv) the Agent shall
receive at the time of each such assignment, from the assigning or assignee
Bank, the payment of a non-refundable assignment fee of $3,500 and, provided
--------
further, that such transfer or assignment will not be effective until recorded
-------
by the Agent on the Register pursuant to Section 7.13 hereof. To the extent of
any assignment pursuant to this Section 12.04(b), the assigning Bank shall be
relieved of its obligations hereunder with respect to its assigned
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commitments. At the time of each assignment pursuant to this Section 12.04(b) to
a Person which is not already a Bank hereunder and which is not a United States
person (as such term is defined in Section 7701(a)(30) of the Code) for Federal
income tax purposes, the respective assignee Bank shall provide to the Borrower
and the Agent the appropriate Internal Revenue Service Forms (and, if applicable
a Section 4.04(b)(ii) Certificate) described in Section 4.04(b). To the extent
that an assignment of all or any portion of a Bank's Commitments and related
outstanding Obligations pursuant to Section 1.13 or this Section 12.04(b) would,
at the time of such assignment, result in increased costs under Section 1.10 or
1.11 from those being charged by the respective assigning Bank prior to such
assignment, then the Borrower shall not be obligated to pay such increased costs
(although the Borrower shall be obligated to pay any other increased costs of
the type described above resulting from changes after the date of the respective
assignment).
(c) Nothing in this Agreement shall prevent or prohibit any Bank from
pledging its Loans and Notes hereunder to a Federal Reserve Bank in support of
borrowings made by such Bank from such Federal Reserve Bank.
12.05 No Waiver; Remedies Cumulative. No failure or delay on the
------------------------------
part of the Agent or any Bank in exercising any right, power or privilege
hereunder or under any other Credit Document and no course of dealing between
any Credit Party and the Agent or any Bank shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, power or privilege
hereunder or under any other Credit Document preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights or remedies which the Agent or any
Bank would otherwise have. No notice to or demand on any Credit Party in any
case shall entitle any Credit Party to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of the Agent
or the Banks to any other or further action in any circumstances without notice
or demand.
12.06 Payments Pro Rata. (a) The Agent agrees that promptly after
-----------------
its receipt of each payment from or on behalf of any Credit Party in respect of
any Obligations of such Credit Party, it shall, except as otherwise provided in
this Agreement, distribute such payment to the Banks (other than any Bank that
has consented in writing to waive its pro rata share of such payment) pro rata
--- ---- --- ----
based upon their respective shares, if any, of the Obligations with respect to
which such payment was received.
(b) Each of the Banks agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings or Fees, of a sum which with respect to the
related sum or sums received by other Banks is in a greater proportion than the
total of such Obligation then owed and due to such Bank bears to the total of
such Obligation then owed and due to all
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of the Banks immediately prior to such receipt, then such Bank receiving such
excess payment shall purchase for cash without recourse or warranty from the
other Banks an interest in the Obligations of the respective Credit Party to
such Banks in such amount as shall result in a proportional participation by all
of the Banks in such amount; provided, that if all or any portion of such excess
--------
amount is thereafter recovered from such Bank, such purchase shall be rescinded
and the purchase price restored to the extent of such recovery, but without
interest.
12.07 Calculations; Computations. (a) The financial statements to
--------------------------
be furnished to the Banks pursuant hereto shall be made and prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by Holdings or the Borrower to the Banks); provided, that except as otherwise
--------
specifically provided herein, all computations determining compliance with
Sections 4.02 and 8, including definitions used therein, shall utilize
accounting principles and policies in effect at the time of the preparation of,
and in conformity with those used to prepare, the December 31, 1995 financial
statements delivered to the Banks pursuant to Section 6.10(b), but shall not
give effect to (i) purchase accounting adjustments required or permitted by APB
16 and its interpretations (including non-cash write-ups and non-cash charges
relating to inventory, fixed assets and in-process research and development, in
each case arising in connection with the Acquisition, the Original Acquisition
or any Permitted Acquisitions) and APB 17 and its interpretations (including
non-cash charges relating to intangibles and goodwill arising in connection with
the Acquisition, the Original Acquisition or any Permitted Acquisitions) and
(ii) those fees paid to ▇▇▇▇ Capital and/or Related Parties pursuant to Sections
8.07(ii) and 8.07(v).
(b) All computations of interest and Fees hereunder shall be made on
the actual number of days elapsed over a year of 360 days.
12.08 Governing Law; Submission to Jurisdiction; Venue. (a) THIS
------------------------------------------------
AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK. Any legal action or proceeding
with respect to this Agreement or any other Credit Document may be brought in
the courts of the State of New York or of the United States for the Southern
District of New York, and, by execution and delivery of this Agreement, each
Credit Party hereby irrevocably accepts for itself and in respect of its
property, generally and unconditionally, the jurisdiction of the aforesaid
courts. Each Credit Party hereby further irrevocably waives any claim that any
such courts lack jurisdiction over such Credit Party, and agrees not to plead or
claim, in any legal action or proceeding with respect to this Agreement or any
other Credit Document brought in any of the aforesaid courts, that any such
court lacks jurisdiction over such Credit Party. Each Credit Party irrevocably
consents to the service of process in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
such Credit Party, at its address for notices pursuant to Section 12.03, such
service to become effective 30 days after such mailing. Each Credit Party
hereby irrevocably waives any objection to such service
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of process and further irrevocably waives and agrees not to plead or claim in
any action or proceeding commenced hereunder or under any other Credit Document
that service of process was in any way invalid or ineffective. Nothing herein
shall affect the right of the Agent, any Bank or the holder of any Note to serve
process in any other manner permitted by law or to commence legal proceedings or
otherwise proceed against any Credit Party in any other jurisdiction.
(b) Each Credit Party hereby irrevocably waives any objection which
it may now or hereafter have to the laying of venue of any of the aforesaid
actions or proceedings arising out of or in connection with this Agreement or
any other Credit Document brought in the courts referred to in clause (a) above
and hereby further irrevocably waives and agrees not to plead or claim in any
such court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.
12.09 Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the 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. A complete set of
counterparts executed by all the parties hereto shall be lodged with Holdings,
the Borrower and the Agent.
12.10 Effectiveness. This Agreement shall become effective on the
-------------
date (the "Effective Date") on which Holdings, the Borrower and each of the
Banks shall have signed a counterpart hereof (whether the same or different
counterparts) and shall have delivered the same to the Agent at the Notice
Office or, in the case of the Banks, shall have given to the Agent telephonic
(confirmed in writing), written, telex or facsimile notice (actually received)
at such office that the same has been signed and mailed to it. The Agent will
give Holdings, the Borrower and each Bank prompt written notice of the
occurrence of the Effective Date.
12.11 Headings Descriptive. The headings of the several sections and
--------------------
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
12.12 Amendment or Waiver; etc. (a) Neither this Agreement nor any
-------------------------
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the respective Credit Parties party thereto and the
Required Banks, provided that no such change, waiver, discharge or termination
--------
shall, without the consent of each Bank (other than a Defaulting Bank) (with
Obligations being directly affected in the case of following clause (i)), (i)
extend the final scheduled maturity of any Loan or Note or extend the stated
maturity of any Letter of Credit beyond the Revolving Loan Maturity Date, or
reduce the rate or extend the time of payment of interest or Fees thereon, or
reduce the principal amount thereof (it being understood that any amendment or
modification to the financial definitions in this Agreement shall not constitute
a reduction in any rate of interest or fees for the purposes of this clause
(i)), (ii) release all or substantially all of the Collateral (except as
expressly provided in the Security
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Documents) under all the Security Documents, (iii) amend, modify or waive any
provision of this Section 12.12, (iv) reduce the percentage specified in the
definition of Required Banks (it being understood that, with the consent of the
Required Banks, additional extensions of credit pursuant to this Agreement may
be included in the determination of the Required Banks on substantially the same
basis as the extensions of Term Loans and Revolving Loan Commitments are
included on the Effective Date) or (v) consent to the assignment or transfer by
the Borrower of any of its rights and obligations under this Agreement; provided
--------
further, that no such change, waiver, discharge or termination shall (1)
-------
increase the Commitments of any Bank over the amount thereof then in effect
without the consent of such Bank (it being understood that waivers or
modifications of conditions precedent, covenants, Defaults or Events of Default
or of a mandatory reduction in the Total Commitment shall not constitute an
increase of the Commitment of any Bank, and that an increase in the available
portion of any Commitment of any Bank shall not constitute an increase in the
Commitment of such Bank), (2) without the consent of BTCo and each other Letter
of Credit Issuer, amend, modify or waive any provision of Section 2 or alter its
rights or obligations with respect to Letters of Credit, (3) without the consent
of BTCo, alter its rights or obligations with respect to Swingline Loans, (4)
without the consent of the Agent, amend, modify or waive any provision of
Section 11 as same applies to the Agent or any other provision as same relates
to the rights or obligations of the Agent, (5) without the consent of the
Collateral Agent, amend, modify or waive any provision relating to the rights or
obligations of the Collateral Agent, (6) without the consent of the Majority
Banks of each Facility which is being allocated a lesser prepayment, repayment
or commitment reduction as a result of the actions described below (or without
the consent of the Majority Banks of each Facility in the case of an amendment
to the definition of Majority Banks), amend the definition of Majority Banks or
alter the required application of any prepayments or repayments (or commitment
reduction), as between the various Facilities pursuant to Section 4.01(a) or
4.02(B)(b) (although the Required Banks may waive, in whole or in part, any such
prepayment, repayment or commitment reduction so long as the application, as
amongst the various Facilities, of any such prepayment, repayment or commitment
reduction which is still required to be made is not altered) or (7) without the
consent of the Supermajority Banks of the respective Facility, amend the
definition of Supermajority Banks or amend downward, waive or reduce any
Scheduled Repayment of such affected Facility.
(b) If, in connection with any proposed change, waiver, discharge or
termination to any of the provisions of this Agreement as contemplated by clause
(a)(i) through (v), inclusive, of the first proviso to Section 12.12(a), the
consent of the Required Banks is obtained but the consent of one or more of such
other Banks whose consent is required is not obtained, then the Borrower shall
have the right, so long as all non-consenting banks whose individual consent is
required are treated as described in either clause (A) or (B) below, to either
(A) replace each such non-consenting Bank or Banks with one or more Replacement
Banks pursuant to Section 1.13 so long as at the time of such replacement, each
such Replacement Bank consents to the proposed change, waiver, discharge or
termination or (B) terminate such non-consenting Bank's Commitments and repay in
full its outstanding Loans, in accordance with Sections 3.02(b) and/or 4.01(b),
provided that, unless the Commitments terminated and Loans repaid pursuant to
--------
preceding clause (B) are immediately replaced in full at such time through
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the addition of new Banks or the increase of the Commitments and/or outstanding
Loans of existing Banks (who in each case must specifically consent thereto),
then in the case of any action pursuant to preceding clause (B) the Required
Banks (determined before giving effect to the proposed action) shall
specifically consent thereto, provided further, that the Borrower shall not have
----------------
the right to replace a Bank solely as a result of the exercise of such Bank's
rights (and the withholding of any required consent by such Bank) pursuant to
the second proviso to Section 12.12(a).
12.13 Survival. All indemnities set forth herein including, without
--------
limitation, in Section 1.10, 1.11, 2.05, 4.04, 11.07 or 12.01, shall survive the
execution and delivery of this Agreement and the making and repayment of the
Loans.
12.14 Domicile of Loans. Each Bank may transfer and carry its Loans
-----------------
at, to or for the account of any branch office, subsidiary or affiliate of such
Bank; provided, that the Borrower shall not be responsible for costs arising
--------
under Section 1.10, 1.11, 2.05 or 4.04 resulting from any such transfer (other
than a transfer pursuant to Section 1.12) to the extent such costs would not
otherwise be applicable to such Bank in the absence of such transfer.
12.15 Confidentiality. (a) Each of the Banks agrees that it will
---------------
use its best efforts not to disclose without the prior consent of the Borrower
(other than to its employees, auditors, counsel or other professional advisors,
to affiliates or to another Bank if the Bank or such Bank's holding or parent
company in its sole discretion determines that any such party should have access
to such information) any information with respect to Holdings, the Borrower or
any of its Subsidiaries which is furnished pursuant to this Agreement; provided,
--------
that any Bank may disclose any such information (a) as has become generally
available to the public or has become available to such Bank on a non-
confidential basis, (b) as may be required or appropriate in any report,
statement or testimony submitted to any municipal, state or Federal regulatory
body having or claiming to have jurisdiction over such Bank or to the Federal
Reserve Board, the Federal Deposit Insurance Corporation, the NAIC or similar
organizations (whether in the United States or elsewhere) or their successors,
(c) as may be required or appropriate in response to any summons or subpoena or
in connection with any litigation, (d) in order to comply with any law, order,
regulation or ruling applicable to such Bank, and (e) to any prospective
transferee in connection with any contemplated transfer of any of the Notes or
any interest therein by such Bank; provided, that such prospective transferee
--------
agrees to be bound by the provisions of this Section 12.15 to the same extent as
such Bank.
(b) Each of Holdings and the Borrower hereby acknowledges and agrees
that each Bank may share with any of its affiliates any information related to
Holdings or any of its Subsidiaries (including, without limitation, any
nonpublic customer information regarding the creditworthiness of Holdings and
its Subsidiaries, provided that such Persons shall be subject to the provisions
of this Section 12.15 to the same extent as such Bank).
12.16 Waiver of Jury Trial. EACH OF THE PARTIES TO THIS AGREEMENT
--------------------
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY
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JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.
SECTION 13. Holdings Guaranty.
-----------------
13.01 The Guaranty. In order to induce the Banks to enter into this
------------
Agreement and to extend credit hereunder and in recognition of the direct
benefits to be received by Holdings from the proceeds of the Loans and the
issuance of the Letters of Credit, Holdings hereby agrees with the Banks as
follows: Holdings hereby unconditionally and irrevocably guarantees as primary
obligor and not merely as surety the full and prompt payment when due, whether
upon maturity, acceleration or otherwise, of any and all of the Guaranteed
Obligations of the Borrower to the Guaranteed Creditors. If any or all of the
Guaranteed Obligations of the Borrower to the Guaranteed Creditors becomes due
and payable hereunder, Holdings unconditionally promises to pay such
indebtedness to the Agent and/or the Banks, or order, on demand, together with
any and all expenses which may be incurred by the Agent or the Banks in
collecting any of the Guaranteed Obligations. If claim is ever made upon any
Guaranteed Creditor for repayment or recovery of any amount or amounts received
in payment or on account of any of the Guaranteed Obligations and any of the
aforesaid payees repays all or part of said amount by reason of (i) any
judgment, decree or order of any court or administrative body having
jurisdiction over such payee or any of its property or (ii) any settlement or
compromise of any such claim effected by such payee with any such claimant
(including the Borrower), then and in such event Holdings agrees that any such
judgment, decree, order, settlement or compromise shall be binding upon
Holdings, notwithstanding any revocation of this Guaranty other instrument
evidencing any liability of the Borrower, and Holdings shall be and remain
liable to the aforesaid payees hereunder for the amount so repaid or recovered
to the same extent as if such amount had never originally been received by any
such payee.
13.02 Bankruptcy. Additionally, Holdings unconditionally and
----------
irrevocably guarantees the payment of any and all of the Guaranteed Obligations
of the Borrower to the Guaranteed Creditors whether or not due or payable by the
Borrower upon the occurrence of any of the events specified in Section 9.05, and
unconditionally promises to pay such indebtedness to the Guaranteed Creditors,
or order, on demand, in lawful money of the United States.
13.03 Nature of Liability. The liability of Holdings hereunder is
-------------------
exclusive and independent of any security for or other guaranty of the
Guaranteed Obligations of the Borrower whether executed by Holdings, any other
guarantor or by any other party, and the liability of Holdings hereunder is not
affected or impaired by (a) any direction as to application of payment by the
Borrower or by any other party, or (b) any other continuing or other guaranty,
undertaking or maximum liability of a guarantor or of any other party as to the
Guaranteed Obligations of the Borrower, or (c) any payment on or in reduction of
any such other guaranty or undertaking, or (d) any dissolution, termination or
increase, decrease or change in personnel by the Borrower, or (e) any payment
made to any Guaranteed Creditor on the Guaranteed Obligations which any such
Guaranteed Creditor repays to the Borrower
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pursuant to court order in any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceeding, and Holdings waives any right to
the deferral or modification of its obligations hereunder by reason of any such
proceeding.
13.04 Independent Obligation. The obligations of Holdings hereunder
----------------------
are independent of the obligations of any other guarantor, any other party or
the Borrower, and a separate action or actions may be brought and prosecuted
against Holdings whether or not action is brought against any other guarantor,
any other party or the Borrower and whether or not any other guarantor, any
other party or the Borrower be joined in any such action or actions. Holdings
waives, to the full extent permitted by law, the benefit of any statute of
limitations affecting its liability hereunder or the enforcement thereof. Any
payment by the Borrower or other circumstance which operates to toll any statute
of limitations as to the Borrower shall operate to toll the statute of
limitations as to any Guarantor.
13.05 Authorization. Holdings authorizes the Guaranteed Creditors
-------------
without notice or demand (except as shall be required by applicable statute and
cannot be waived), and without affecting or impairing its liability hereunder,
from time to time to:
(a) change the manner, place or terms of payment of, and/or change or
extend the time of payment of, renew, increase, accelerate or alter, any of
the Guaranteed Obligations (including any increase or decrease in the rate
of interest thereon), any security therefor, or any liability incurred
directly or indirectly in respect thereof, and the Guaranty herein made
shall apply to the Guaranteed Obligations as so changed, extended, renewed
or altered;
(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any of
those hereunder) incurred directly or indirectly in respect thereof or
hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against the
Borrower or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers, guarantors, the
Borrower or other obligors;
(e) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of the Borrower to its creditors other than
the Guaranteed Creditors;
-120-
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Guaranteed Creditors
regardless of what liability or liabilities of Holdings or the Borrower
remain unpaid;
(g) consent to or waive any breach of, or any act, omission or
default under, this Agreement or any of the instruments or agreements
referred to herein, or otherwise amend, modify or supplement this Agreement
or any of such other instruments or agreements; and/or
(h) take any other action which would, under otherwise applicable
principles of common law, give rise to a legal or equitable discharge of
Holdings from its liabilities under this Guaranty.
13.06 Reliance. It is not necessary for any Guaranteed Creditor to
--------
inquire into the capacity or powers of the Borrower or the officers, directors,
partners or agents acting or purporting to act on their behalf, and any
Guaranteed Obligations made or created in reliance upon the professed exercise
of such powers shall be guaranteed hereunder.
13.07 Subordination. Any of the indebtedness of the Borrower
-------------
relating to the Guaranteed Obligations now or hereafter owing to Holdings is
hereby subordinated to the Guaranteed Obligations of the Borrower owing to the
Guaranteed Creditors; and if the Agent so requests at a time when an Event of
Default exists, all such indebtedness relating to the Guaranteed Obligations of
the Borrower to Holdings shall be collected, enforced and received by Holdings
for the benefit of the Guaranteed Creditors and be paid over to the Agent on
behalf of the Guaranteed Creditors on account of the Guaranteed Obligations of
the Borrower to the Guaranteed Creditors, but without affecting or impairing in
any manner the liability of Holdings under the other provisions of this
Guaranty. Prior to the transfer by Holdings of any note or negotiable
instrument evidencing any of the indebtedness relating to the Guaranteed
Obligations of the Borrower to Holdings, Holdings shall ▇▇▇▇ such note or
negotiable instrument with a legend that the same is subject to this
subordination. Without limiting the generality of the foregoing, Holdings
hereby agrees with the Guaranteed Creditors that it will not exercise any right
of subrogation which it may at any time otherwise have as a result of this
Guaranty (whether contractual, under Section 509 of the Bankruptcy Code or
otherwise) until all Guaranteed Obligations have been irrevocably paid in full
in cash.
13.08 Waiver. (a) Holdings waives any right (except as shall be
------
required by applicable statute and cannot be waived) to require any Guaranteed
Creditor to (i) proceed against the Borrower, any other guarantor or any other
party, (ii) proceed against or exhaust any security held from the Borrower, any
other guarantor or any other party or (iii) pursue any other remedy in any
Guaranteed Creditor's power whatsoever. Holdings waives any defense based on or
arising out of any defense of the Borrower, any other guarantor or any other
party, other than payment in full of the Guaranteed Obligations, based on or
arising out of the disability of the Borrower, any other guarantor or any other
party, or the validity, legality or unenforceability of the Guaranteed
Obligations or any part thereof from any cause, or the
-121-
cessation from any cause of the liability of the Borrower other than payment in
full of the Guaranteed Obligations. The Guaranteed Creditors may, at their
election, foreclose on any security held by the Agent, the Collateral Agent or
any other Guaranteed Creditor by one or more judicial or nonjudicial sales,
whether or not every aspect of any such sale is commercially reasonable (to the
extent such sale is permitted by applicable law), or exercise any other right or
remedy the Guaranteed Creditors may have against the Borrower or any other
party, or any security, without affecting or impairing in any way the liability
of Holdings hereunder except to the extent the Guaranteed Obligations have been
paid. Holdings waives any defense arising out of any such election by the
Guaranteed Creditors, even though such election operates to impair or extinguish
any right of reimbursement or subrogation or other right or remedy of Holdings
against the Borrower or any other party or any security.
(b) Holdings waives all presentments, demands for performance,
protests and notices, including without limitation notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this Guaranty,
and notices of the existence, creation or incurring of new or additional
Guaranteed Obligations. Holdings assumes all responsibility for being and
keeping itself informed of the Borrower's financial condition and assets, and of
all other circumstances bearing upon the risk of nonpayment of the Guaranteed
Obligations and the nature, scope and extent of the risks which Holdings assumes
and incurs hereunder, and agrees that the Agent and the Banks shall have no duty
to advise Holdings of information known to them regarding such circumstances or
risks.
(c) Holdings hereby acknowledges and affirms that it understands that
to the extent the Guaranteed Obligations are secured by real property located in
the State of California, Holdings shall be liable for the full amount of its
liability hereunder notwithstanding foreclosure on such real property by trustee
sale or any other reason impairing Holdings' or any secured creditor's right to
proceed against the Borrower or any other guarantor of the Guaranteed
Obligations.
(d) Holdings hereby waives, to the fullest extent permitted by
applicable law, all rights and benefits under Sections 580a, 580b, 580d and 726
of the California Code of Civil Procedure. Holdings hereby further waives, to
the fullest extent permitted by applicable law, without limiting the generality
of the foregoing or any other provision hereof, all rights and benefits which
might otherwise be available to Holdings under Sections 2787 through 2855,
inclusive, 2899 and 3433 of the California Civil Code.
(e) Holdings further understands, is aware and hereby acknowledges
that if the Guaranteed Creditors elect to nonjudicially foreclose on any real
property security located in the State of California any right of subrogation of
Holdings against any Credit Party may be impaired or extinguished and that as a
result of such impairment or extinguishment of subrogation rights, Holdings may
have a defense to a deficiency judgment arising out of the operation of Section
580d of the California Code of Civil Procedure and related principles of
estoppel. Holdings waives all rights and defenses arising out of an election of
remedies by the Banks, even though that election of remedies, such as a
nonjudicial foreclosure with respect to security for a guaranteed obligation,
has destroyed the guarantor's rights of subrogation and
-122-
reimbursement against the principal by the operation of Section 580d of the Code
of Civil Procedure or otherwise.
13.09 Nature of Liability. It is the desire and intent of Holdings
-------------------
and the Secured Creditors that this Guaranty shall be enforced against Holdings
to the fullest extent permissible under the laws and public policies applied in
each jurisdiction in which enforcement is sought. If, however, and to the
extent that, the obligations of Holdings under this Guaranty shall be
adjudicated to be invalid or unenforceable for any reason (including, without
limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers), then the amount of the Guaranteed
Obligations of Holdings shall be deemed to be reduced and Holdings shall pay the
maximum amount of the Guaranteed Obligations which would be permissible under
applicable law.
* * *
-123-
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address:
-------
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇ HOLDING, INC.
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopier:(▇▇▇) ▇▇▇-▇▇▇▇ ----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Financial Officer
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇ CORPORATION
Des Plaines, Illinois 60018-5903
Attention: Chief Financial Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopier:(▇▇▇) ▇▇▇-▇▇▇▇ ----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Assistant Secretary
BANKERS TRUST COMPANY
By ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
-------------------------
Name: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
Title:
FLEET NATIONAL BANK
By ▇▇▇ ▇▇▇▇▇
-------------------------
Name: ▇▇▇ ▇▇▇▇▇
Title: SVP
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
By /s/ ▇▇▇▇▇▇ ▇. Dell'▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. Dell'▇▇▇▇▇▇
Title: Vice President
LASALLE NATIONAL BANK
By ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
SOCIETE GENERALE
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
ANNEX I
-------
LIST OF BANKS
-------------
Revolving
A Term B Term Loan Loan
Bank Commitment Commitment Commitment
---- ----------- ----------- -----------
Bankers Trust Company $10,000,000 $50,000,000 $10,000,000
Fleet National Bank $10,000,000 $ -0- $10,000,000
▇▇▇▇▇▇ Trust and Savings
Bank $5,000,000 $ -0- $5,000,000
LaSalle National Bank $10,000,000 $ -0- $10,000,000
Societe Generale $10,000,000 $ -0- $10,000,000
Total: $45,000,000 $50,000,000 $45,000,000
=========== =========== ===========
ANNEX II
--------
BANK ADDRESSES
--------------
Bank Address
---- -------
Bankers Trust Company ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fleet National Bank 75 State Street
MA BOFO4P
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇ (Amendments)
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇ (Administrative
Matters)
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ Trust and Savings Bank ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ Dell'▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
LaSalle National Bank ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
ANNEX II
Page 2
with a copy to counsel:
Winston & ▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Prime Income Trust ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Societe Generale ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
ANNEX III
---------
REAL PROPERTIES
---------------
ANNEX IV
--------
PROJECTIONS
-----------
ANNEX V
-------
SUBSIDIARIES
------------
ANNEX VI
--------
INSURANCE
---------
ANNEX VII
---------
EXISTING INDEBTEDNESS
---------------------
ANNEX VIII
----------
EXISTING LIENS
--------------
Filing File Original Description
Location Debtor Secured Party Number File Date of Collateral
--------- ------ ------------- ------ --------- -------------
ANNEX IX
--------
ACQUIRED SUBSIDIARIES
---------------------
ANNEX X
-------
CAPITALIZATION
--------------
ANNEX XI
--------
INVESTMENTS
-----------
ANNEX XII
---------
PROJECTED CONSOLIDATED EBITDA
-----------------------------
ANNEX XIII
----------
EXCLUDED INTELLECTUAL PROPERTY
------------------------------
ANNEX XIV
---------
ASSET SALES
-----------
ANNEX XV
--------
ACQUISITION DOCUMENTS
---------------------
ANNEX XVI
---------
FINANCIAL STATEMENTS
--------------------
[Following the Initial Borrowing Date, the Borrower may amend the
financial statements referred to in Section 6.10(c) in accordance with
Regulation S-X and GAAP to modify the treatment of returns reserves and to
___________.]
ANNEX XVII
----------
CONFLICTS
---------
The Management Agreement, dated as of April 5, 1996, by and between
Holdings and ▇▇▇▇▇ ▇▇▇▇ ("Employee") requires Holdings to repurchase shares of
Holdings common stock upon the death of Employee in an aggregate amount which
would exceed the aggregate amount permitted to be repurchased pursuant to
Section 8.06.