Exhibit 4.6
EXECUTION
AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF JULY 28, 1999
AMONG
WEC COMPANY,
as Company,
▇▇▇▇▇ EQUIPMENT COMPANY,
as Guarantor,
THE LENDERS LISTED HEREIN,
as Lenders,
and
CREDIT SUISSE FIRST BOSTON,
as Lead Arranger,
Syndication Agent and Administrative Agent
WEC COMPANY
CREDIT AGREEMENT
TABLE OF CONTENTS
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Page
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Section 1. DEFINITIONS............................................................................................... 2
1.1 Certain Defined Terms..................................................................................... 2
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement........................ 36
1.3 Other Definitional Provisions and Rules of Construction................................................... 37
Section 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS................................................................ 37
2.1 Commitments; Making of Loans; the Register; Notes......................................................... 37
2.2 Interest on the Loans..................................................................................... 44
2.3 Fees...................................................................................................... 48
2.4 Prepayments and Reductions in Revolving Loan Commitments; General Provisions Regarding
Payments; Application of Proceeds of Collateral and Payments Under Guaranties............................. 49
2.5 Use of Proceeds........................................................................................... 54
2.6 Special Provisions Governing Eurodollar Rate Loans........................................................ 55
2.7 Increased Costs; Taxes; Capital Adequacy.................................................................. 57
2.8 Obligation of Lenders and Issuing Lenders to Mitigate..................................................... 61
2.9 Removal or Replacement of a Lender........................................................................ 62
Section 3. LETTERS OF CREDIT......................................................................................... 63
3.1 Issuance of Letters of Credit and Lenders' Purchase of Participations Therein............................. 63
3.2 Letter of Credit Fees..................................................................................... 67
3.3 Drawings and Reimbursement of Amounts Paid Under Letters of Credit........................................ 67
3.4 Obligations Absolute...................................................................................... 70
3.5 Indemnification; Nature of Issuing Lenders' Duties........................................................ 71
3.6 Increased Costs and Taxes Relating to Letters of Credit................................................... 72
Section 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT................................................................. 73
4.1 Conditions to Existing Term Loans, Existing Revolving Loans and Letters of Credit......................... 73
4.2 Conditions to Revolving Loans to be made on the Effective Date............................................ 73
4.3 Conditions to All Loans................................................................................... 80
4.4 Conditions to Letters of Credit........................................................................... 82
Section 5. REPRESENTATIONS AND WARRANTIES OF HOLDINGS AND COMPANY.................................................... 82
5.1 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries............................. 82
5.2 Authorization of Borrowing, etc........................................................................... 83
5.3 Financial Condition....................................................................................... 85
5.4 No Material Adverse Change; No Restricted Payments........................................................ 85
5.5 Title to Properties; Liens; Real Property................................................................. 85
5.6 Litigation; Adverse Facts................................................................................. 86
5.7 Payment of Taxes.......................................................................................... 86
5.8 Performance of Agreements; Materially Adverse Agreements; Material Contracts.............................. 87
5.9 Governmental Regulation................................................................................... 87
5.10 Securities Activities..................................................................................... 87
5.11 Employee Benefit Plans.................................................................................... 88
5.12 Certain Fees.............................................................................................. 88
5.13 Environmental Protection.................................................................................. 89
5.14 Employee Matters.......................................................................................... 89
5.15 Solvency.................................................................................................. 90
5.16 Matters Relating to Collateral............................................................................ 90
5.17 Related Agreements........................................................................................ 91
5.18 Disclosure................................................................................................ 91
Section 6. AFFIRMATIVE COVENANTS OF HOLDINGS AND COMPANY............................................................. 91
6.1 Financial Statements and Other Reports.................................................................... 91
6.2 Corporate Existence, etc.................................................................................. 97
6.3 Payment of Taxes and Claims; Tax Consolidation............................................................ 97
6.4 Maintenance of Properties; Insurance...................................................................... 98
6.5 Inspection Rights; Lender Meeting......................................................................... 99
6.6 Compliance with Laws, etc................................................................................. 99
6.7 Environmental Review and Investigation, Disclosure, Etc.; Company's Actions Regarding
Hazardous Materials Activities, Environmental Claims and Violations of Environmental Laws................. 99
6.8 Execution of Subsidiary Guaranty and Personal Property Collateral Documents by Certain
Subsidiaries and Future Subsidiaries...................................................................... 102
6.9 Conforming Leasehold Interests; Matters Relating to Additional Real Property Collateral................... 103
6.10 Year 2000 Compliance...................................................................................... 106
6.11 Alitec Acquisition........................................................................................ 106
Section 7. NEGATIVE COVENANTS OF HOLDINGS AND COMPANY................................................................ 106
7.1 Indebtedness.............................................................................................. 106
7.2 Liens and Related Matters................................................................................. 107
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7.3 Investments; Joint Ventures............................................................................... 109
7.4 Contingent Obligations.................................................................................... 109
7.5 Restricted Payments....................................................................................... 110
7.6 Financial Covenants....................................................................................... 111
7.7 Restriction on Fundamental Changes; Asset Sales and Acquisitions.......................................... 113
7.8 Consolidated Capital Expenditures......................................................................... 115
7.9 Sales and Lease-Backs..................................................................................... 116
7.10 Sale or Discount of Receivables........................................................................... 116
7.11 Transactions with Shareholders and Affiliates............................................................. 116
7.12 Disposal of Subsidiary Stock.............................................................................. 117
7.13 Conduct of Business....................................................................................... 117
7.14 Amendments or Waivers of Certain Existing Agreements and Related Agreements;
Amendments of Documents Relating to Holdings Discount Debentures, Senior Notes and
Subordinated Indebtedness................................................................................. 117
7.15 Fiscal Year............................................................................................... 118
Section 8. HOLDINGS GUARANTY......................................................................................... 118
8.1 Guaranty of the Obligations............................................................................... 118
8.2 Limitation on Amount Guarantied........................................................................... 118
8.3 Payment by Holdings....................................................................................... 119
8.4 Liability of Holdings Absolute............................................................................ 119
8.5 Waivers by Holdings....................................................................................... 121
8.6 Holdings' Rights of Subrogation, Contribution, Etc........................................................ 122
8.7 Subordination of Other Obligations........................................................................ 123
8.8 Continuing Guaranty....................................................................................... 123
8.9 Authority of Holdings or Company.......................................................................... 123
8.10 Financial Condition of Company............................................................................ 123
8.11 Bankruptcy, Etc........................................................................................... 123
Section 9. EVENTS OF DEFAULT......................................................................................... 124
9.1 Failure to Make Payments When Due......................................................................... 124
9.2 Default in Other Agreements............................................................................... 125
9.3 Breach of Certain Covenants............................................................................... 125
9.4 Breach of Warranty........................................................................................ 125
9.5 Other Defaults Under Loan Documents....................................................................... 125
9.6 Involuntary Bankruptcy; Appointment of Receiver, etc...................................................... 125
9.7 Voluntary Bankruptcy; Appointment of Receiver, etc........................................................ 126
9.8 Judgments and Attachments................................................................................. 126
9.9 Dissolution............................................................................................... 127
9.10 Employee Benefit Plans.................................................................................... 127
9.11 Change in Control......................................................................................... 127
9.12 Invalidity of Guaranties; Failure of Security; Repudiation of Obligations................................. 127
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Section 10. Administrative Agent...................................................................................... 129
10.1 Appointment............................................................................................... 129
10.2 Powers and Duties; General Immunity....................................................................... 129
10.3 Representations and Warranties; No Responsibility For Appraisal of Creditworthiness....................... 131
10.4 Right to Indemnity........................................................................................ 131
10.5 Successor Administrative Agent and Swing Line Lender...................................................... 132
10.6 Collateral Documents and Guaranties....................................................................... 132
Section 11. MISCELLANEOUS............................................................................................. 133
11.1 Assignments and Participations in Loans and Letters of Credit............................................. 133
11.2 Expenses.................................................................................................. 137
11.3 Indemnity................................................................................................. 138
11.4 Set-Off; Security Interest in Deposit Accounts............................................................ 139
11.5 Ratable Sharing........................................................................................... 139
11.6 Amendments and Waivers.................................................................................... 140
11.7 Independence of Covenants................................................................................. 141
11.8 Notices................................................................................................... 141
11.9 Survival of Representations, Warranties and Agreements.................................................... 141
11.10 Failure or Indulgence Not Waiver; Remedies Cumulative..................................................... 142
11.11 Marshalling; Payments Set Aside........................................................................... 142
11.12 Severability.............................................................................................. 142
11.13 Obligations Several; Independent Nature of Lenders' Rights................................................ 142
11.14 Headings.................................................................................................. 143
11.15 Applicable Law............................................................................................ 143
11.16 Successors and Assigns.................................................................................... 143
11.17 Consent to Jurisdiction and Service of Process............................................................ 143
11.18 Waiver of Jury Trial...................................................................................... 144
11.19 Confidentiality........................................................................................... 145
11.20 Counterparts; Effectiveness............................................................................... 145
Signature pages ........................................................................................................... S-1
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EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
IV INTENTIONALLY OMITTED
V INTENTIONALLY OMITTED
VI INTENTIONALLY OMITTED
VII FORM OF REVOLVING NOTE
VIII FORM OF SWING LINE NOTE
IX FORM OF COMPLIANCE CERTIFICATE
X FORM OF OPINION OF COUNSEL TO LOAN PARTIES
XI FORM OF OPINION OF ADMINISTRATIVE AGENT'S COUNSEL
XII FORM OF ASSIGNMENT AGREEMENT XIII FORM OF CERTIFICATE OF NON-BANK STATUS
XIV FORM OF FINANCIAL CONDITION CERTIFICATE XV FORM OF COLLATERAL ACCOUNT AGREEMENT
XVI FORM OF HOLDINGS PLEDGE AGREEMENT
XVII FORM OF COMPANY PLEDGE AGREEMENT XVIII FORM OF COMPANY SECURITY AGREEMENT
XIX FORM OF COMPANY PATENT AND TRADEMARK SECURITY AGREEMENT
XX FORM OF SUBSIDIARY GUARANTY
XXI FORM OF SUBSIDIARY PLEDGE AGREEMENT
XXII FORM OF SUBSIDIARY SECURITY AGREEMENT
XXIII FORM OF SUBSIDIARY PATENT AND TRADEMARK SECURITY AGREEMENT
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SCHEDULES
1.1(i) CERTAIN ADJUSTMENTS TO EBITDA
2.1 EXISTING REVOLVING LOANS; LENDERS' COMMITMENTS AND PRO RATA SHARES
3.1 EXISTING LETTERS OF CREDIT
4.2C CORPORATE AND CAPITAL STRUCTURE; OWNERSHIP; MANAGEMENT
5.1 SUBSIDIARIES OF COMPANY
5.5 REAL PROPERTY
5.8 MATERIAL CONTRACTS
5.11 CERTAIN EMPLOYEE BENEFIT PLANS
6.9C SCHEDULED POST-EFFECTIVE DATE MORTGAGED PROPERTIES
7.1 CERTAIN EXISTING INDEBTEDNESS
7.2 CERTAIN EXISTING LIENS
7.3 CERTAIN EXISTING INVESTMENTS
7.4 CERTAIN EXISTING CONTINGENT OBLIGATIONS
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EXECUTION
WEC COMPANY
AMENDED AND RESTATED CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT, dated as of July 28, 1999,
is entered into by and among WEC COMPANY, a Delaware corporation ("Company"), as
borrower, ▇▇▇▇▇ EQUIPMENT COMPANY, a Delaware corporation ("Holdings"), as
guarantor, THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (each
individually referred to herein as a "Lender" and collectively as "Lenders"), as
lenders, and CREDIT SUISSE FIRST BOSTON ("CSFB"), as lead arranger, syndication
agent and administrative agent for Lenders (in such respective capacities, "Lead
Arranger", "Syndication Agent" or "Administrative Agent").
R E C I T A L S
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WHEREAS, capitalized terms used herein having the meanings assigned to
those terms in subsection 1.1;
WHEREAS, Company and certain financial institutions (the "Existing
Lenders"), and Lead Arranger, Syndication Agent and Administrative Agent are
parties to that certain Credit Agreement dated as of August 7, 1998 (as
heretofore amended, supplemented or otherwise modified, the "Existing Credit
Agreement"), pursuant to which the Existing Lenders agreed to extend certain
credit facilities to Company, the proceeds of which were used to consummate the
recapitalization transactions contemplated by the Recapitalization Agreement, to
pay certain related transaction fees and expenses, to refinance certain
indebtedness of Company and to provide financing for working capital and for
other general corporate purposes;
WHEREAS, on the Effective Date, the Company (i) intends (a) to acquire (the
"Central Fabricators Acquisition") all of the capital stock of Central
Fabricators, Inc., a Wisconsin corporation ("Central Fabricators"), and
immediately upon the consummation of the Central Fabricators Acquisition,
Central Fabricators will be merged with and into Company pursuant to the Central
Fabricators Acquisition Agreement, with Company being the surviving corporation
in such merger; and (b) to acquire (the "Tisco Acquisition") substantially all
of the assets of Tru-Part Manufacturing Corporation, a Minnesota corporation,
and its principal subsidiary, Tractor Implement Supply Company (collectively,
"Tisco");
WHEREAS, Company desires that Lenders agree to amend and restate the
Existing Credit Agreement in its entirety (i) to extend credit facilities to
Company in an aggregate principal amount of $40,000,000 through a $15,000,000
increase in the Revolving Loan
Commitments, the proceeds of which will be used, together with (a) approximately
$25,000,000 million of proceeds from the purchase by MDCP and the Management
Investors of newly-issued Holdings Common Stock and newly-issued New Holdings
Preferred (the "Effective Date Investment"), (b) approximately $130,000,000 of
gross proceeds from the sale by the Company of the Senior Notes and (c)
approximately $25,000,000 of gross proceeds from the sale by Holdings of the
Holdings Units, (1) to repay in full the outstanding principal amount of the
Existing Term Loans and the PIK Sub Debt, together, in each case, with all
interest and fees due and owing in respect thereof, (2) to fund the Acquisition
Financing Requirements, (3) to pay Transaction Costs, and (4) to provide
financing for working capital and other general corporate purposes of Company
and its Subsidiaries, and (ii) to make certain other changes as more fully set
forth herein, which amendment and restatement shall become effective upon
satisfaction of the conditions precedent set forth herein;
WHEREAS, it is the intent of the parties hereto that this Agreement not
constitute a novation of the obligations and liabilities of the parties under
the Existing Credit Agreement and that this Agreement amend and restate in its
entirety the Existing Credit Agreement and re-evidence the Obligations of
Company outstanding thereunder; and
WHEREAS, it is the intent of Loan Parties to confirm that all Obligations
of Loan Parties under the other Loan Documents, as amended hereby, shall
continue in full force and effect and that, from and after the Effective Date,
all references to the "Credit Agreement" contained therein shall be deemed to
refer to this Agreement.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Holdings, Company, Lenders and Agents
agree that, on the Effective Date, the Existing Credit Agreement shall be
amended and restated in its entirety as follows:
Section. DEFINITIONS
1.1 Certain Defined Terms.
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The following terms used in this Agreement shall have the following
meanings:
"Acknowledgment and Consent" means that certain Acknowledgment and
Consent executed by Holdings, the Company, and the Subsidiary Guarantors dated
as of the Effective Date and substantially in the form of Exhibit XXV annexed
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hereto, as such Acknowledgment and Consent may be amended, restated,
supplemented or otherwise modified from time to time.
"Acquisition" means the acquisition, by purchase, direct merger or
otherwise, of all or substantially all of the business, property or fixed assets
of, or stock or other evidence of
2
beneficial ownership of, any Person or any division, business unit or line of
business of any Person.
"Acquisition Financing Requirements" means, with respect to each of
the Effective Date Acquisitions, the aggregate of all amounts necessary to
finance the purchase price payable in connection with such Acquisition.
"Additional Mortgage" has the meaning assigned to that term in
subsection 6.9.
"Additional Mortgage Policy" has the meaning assigned to that term in
subsection 6.9.
"Additional Mortgaged Property" has the meaning assigned to that term
in subsection 6.9.
"Administrative Agent" has the meaning assigned to that term in the
introduction to this Agreement and also means and includes any successor
Administrative Agent appointed pursuant to subsection 10.5A.
"Affected Lender" has the meaning assigned to that term in subsection
2.6C.
"Affiliate", as applied to any Person, means any other Person directly
or indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise.
"Agents" means Lead Arranger, Syndication Agent and Administrative
Agent.
"Agreement" means prior to the Effective Date, the Existing Credit
Agreement and on and after the Effective Date this Amended and Restated Credit
Agreement dated as of July 28, 1999, as it may be amended, supplemented or
otherwise modified from time to time.
"Alamo Acquisition" means the proposed acquisition by Company of all
the outstanding shares of capital stock of Alamo Group, Inc.
"Alitec" means Alitec Corporation, an Indiana corporation.
"Alitec Acquisition" means the acquisition by Company of all of the
capital stock of Alitec.
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"Alitec Acquisition Agreement" means that certain Stock Purchase
Agreement by and among Company and the shareholders of Alitec providing for the
purchase of all the capital stock of Alitec by Company for aggregate
consideration not in excess of $11,000,000, and otherwise in substantially the
form as delivered to the Agents and Lenders on or before the Effective Date.
"Applicable Base Rate Margin" means, on and after the Effective Date,
a percentage per annum determined by reference to the Leverage Ratio as set
forth below:
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Applicable
Leverage Ratio Base Rate Margin
==========================================================
greater than or equal to 5.00:1.00 1.50%
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less than 5.00:1.00
greater than or equal to 4.00:1.00 1.25%
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less than 4.00:1.00
greater than or equal to 3.00:1.00 1.00%
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less than 3.00:1.00
greater than or equal to 2.50:1.00 0.75%
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less than 2.50:1.00 0.50%
==========================================================
From and after the Effective Date, the Applicable Base Rate Margin shall be
determined by reference to the Leverage Ratio as of the last day of the most-
recently ended Fiscal Quarter; provided that (x) no change in any Applicable
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Base Rate Margin shall be effective until three Business Days after the date on
which Administrative Agent receives the financial statements for such Fiscal
Quarter as and when required under subsection 6.1(ii), together with an
Officer's Certificate calculating the applicable Leverage Ratio, and (y) the
Applicable Base Rate Margin shall be 1.50%, per annum, for so long (but only for
so long) as Company has not submitted to Administrative Agent the information
described in clause (x) of this proviso as and when required under subsection
6.1(ii).
"Applicable Eurodollar Rate Margin" means, on and after the Effective
Date, a percentage per annum determined by reference to the Leverage Ratio as
set forth below:
==========================================================
Applicable
Eurodollar
Leverage Ratio Base Rate Margin
==========================================================
greater than or equal to 5.00:1.00 2.50%
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less than 5.00:1.00
greater than or equal to 4.00:1.00 2.25%
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less than 4.00:1.00
greater than or equal to 3.00:1.00 2.00%
==========================================================
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==========================================================
Applicable
Eurodollar
Leverage Ratio Base Rate Margin
==========================================================
less than 3.00:1.00
greater than or equal to 2.50:1.00 1.75%
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less than 2.50:1.00 1.50%
==========================================================
From and after the Effective Date, the Applicable Eurodollar Rate Margin shall
be determined by reference to the Leverage Ratio as of the last day of the most-
recently ended Fiscal Quarter; provided that (x) no change in any Applicable
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Eurodollar Rate Margin shall be effective until three Business Days after the
date on which Administrative Agent receives the financial statements for such
Fiscal Quarter as and when required under subsection 6.1(ii), together with an
Officer's Certificate calculating the applicable Leverage Ratio, and (y) the
Applicable Eurodollar Rate Margin shall be 2.50%, per annum for so long (but
only for so long) as Company has not submitted to Administrative Agent the
information described in clause (x) of this proviso as and when required under
subsection 6.1(ii).
"Approved Fund" means, with respect to any Lender that is a fund that
invests in commercial loans, any other fund that invests in commercial loans and
is managed or advised by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"Asset Sale" means the sale by Holdings or any of its Subsidiaries to
any Person (other than Company or any of its wholly-owned Subsidiaries) of (i)
any of the stock of any of Holdings' Subsidiaries, (ii) all or substantially all
of the assets of any division, business unit or line of business of Holdings or
any of its Subsidiaries, or (iii) any other assets (whether tangible or
intangible) of Holdings or any of its Subsidiaries outside of the ordinary
course of business (other than any such other assets to the extent that the
aggregate Net Asset Sale Proceeds in respect of such assets sold in any single
transaction or related series of transactions is equal to $750,000 or less).
"Assigned Rights and Obligations" has the meaning assigned to that
term in subsection 4.2V.
"Assignment Agreement" means an Assignment Agreement in substantially
the form of Exhibit XII annexed hereto.
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"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"Base Rate" means, at any time, the higher of (x) the Prime Rate or
(y) the rate which is 1/2 of 1% in excess of the Federal Funds Effective Rate.
5
"Base Rate Loans" means Loans bearing interest at rates determined by
reference to the Base Rate as provided in subsection 2.2A.
"Business Day" means a day other than a Saturday, Sunday or other day
on which commercial banks in New York City are authorized or required by law to
close; provided that, with respect to matters relating to Eurodollar Loans, the
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term "Business Day" shall mean a day other than a Saturday, Sunday or other day
on which commercial banks in New York City or London, England, are authorized or
required by law to close.
"Capital Lease", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"Cash" means money, currency or a credit balance in a Deposit Account.
"Cash Equivalents" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (b) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within one year
after such date; (ii) 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, in each case maturing within one year after such
date and having, at the time of the acquisition thereof, the highest rating
obtainable from either Standard & Poor's Ratings Group ("S&P") or ▇▇▇▇▇'▇
Investors Service, Inc. ("Moody's"); (iii) commercial paper maturing no more
than one year from the date of creation thereof and having, at the time of the
acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Moody's; (iv) certificates of deposit or bankers' acceptances maturing within
one year after such date and issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia that (a) is at least "adequately
capitalized" (as defined in the regulations of its primary Federal banking
regulator) and (b) has Tier 1 capital (as defined in such regulations) of not
less than $250,000,000; and (v) shares of any money market mutual fund that (a)
has at least 95% of its assets invested continuously in the types of investments
referred to in clauses (i) and (ii) above, (b) has net assets of not less than
$500,000,000, and (c) has the highest rating obtainable from either S&P or
Moody's.
"Central Fabricators" has the meaning assigned to that term in the
recitals hereto.
"Central Fabricators Acquisition" has the meaning assigned to that
term in the recitals hereto.
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"Central Fabricators Acquisition Agreement" means that certain
agreement with respect to the Central Fabricators Acquisition by and among
Company and the shareholders of Central Fabricators, dated as of July 6, 1999 as
in effect on the Effective Date.
"Certificate of Non-Bank Status" means a certificate substantially in
the form of Exhibit XIII annexed hereto delivered by a Lender to Administrative
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Agent pursuant to subsection 2.7B(iii).
"CHSLLC" means Code, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.C., as trustee on behalf
of the "Stockholders" (as defined in the Recapitalization Agreement).
"Closing Date" means August 7, 1998.
"Collateral" means, collectively, all of the real, personal and mixed
property (including capital stock) in which Liens are purported to be granted
pursuant to the Collateral Documents as security for the Obligations.
"Collateral Access Agreement" means any landlord waiver, mortgagee
waiver, bailee letter or any similar acknowledgment or agreement of any landlord
or mortgagee in respect of any Real Property Asset where any Collateral is
located or any warehouseman or processor in possession of any Inventory of any
Loan Party, substantially in the form of Exhibit XXIV annexed hereto with such
------------
changes thereto as may be agreed to by Administrative Agent in the reasonable
exercise of its discretion.
"Collateral Account" has the meaning assigned to that term in the
Collateral Account Agreement.
"Collateral Account Agreement" means the Collateral Account Agreement
executed and delivered by Company and Administrative Agent on the Closing Date,
substantially in the form of Exhibit XV annexed hereto, pursuant to which
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Company may pledge cash to Administrative Agent to secure the obligations of
Company to reimburse Issuing Lenders for payments made under one or more Letters
of Credit as provided in Section 9, as such Collateral Account Agreement may
hereafter be amended, restated, supplemented or otherwise modified from time to
time.
"Collateral Documents" means the Holdings Pledge Agreement, the
Company Pledge Agreement, the Company Security Agreement, the Company Patent and
Trademark Security Agreement, the Collateral Account Agreement, the Subsidiary
Pledge Agreements, the Subsidiary Security Agreements, the Subsidiary Patent and
Trademark Security Agreements, the Mortgages and all other instruments or
documents delivered by any Loan Party pursuant to this Agreement or any of the
other Loan Documents in order to grant to Administrative Agent, on behalf of
Lenders, a Lien on any real, personal or mixed property of that Loan Party as
security for the Obligations.
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"Commercial Letter of Credit" means any letter of credit or similar
instrument issued for the purpose of providing the primary payment mechanism in
connection with the purchase of any materials, goods or services by Company or
any of its Subsidiaries in the ordinary course of business of Company or such
Subsidiary.
"Commitments" means (i) with respect to the period prior to the
Effective Date, the commitments of Lenders to make Loans as set forth in
subsection 2.1A of the Existing Credit Agreement, and (ii) on and after the
Effective Date, the commitments of Lenders to make Loans as set forth in
subsection 2.1A of this Agreement.
"Company" has the meaning assigned to that term in the introduction to
this Agreement.
"Company Pledge Agreement" means the Company Pledge Agreement executed
and delivered by Company on the Closing Date, substantially in the form of
Exhibit XVII annexed hereto, as such Company Pledge Agreement may thereafter be
------------
amended, supplemented or otherwise modified from time to time.
"Company Security Agreement" means the Company Security Agreement
executed and delivered by Company on the Closing Date, substantially in the form
of Exhibit XVIII annexed hereto, as such Company Security Agreement may
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thereafter be amended, supplemented or otherwise modified from time to time.
"Company Patent and Trademark Security Agreement" means the Company
Patent and Trademark Security Agreement executed and delivered by Company on the
Closing Date, substantially in the form of Exhibit XIX annexed hereto, as such
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Company Patent and Trademark Security Agreement may thereafter be amended,
supplemented or otherwise modified from time to time.
"Compliance Certificate" means a certificate substantially in the form
of Exhibit IX annexed hereto delivered to Administrative Agent and Lenders by
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Company pursuant to subsection 6.1(iv).
"Confidential Information Memorandum" means that certain Confidential
Information Memorandum relating to Company dated July 1999.
"Conforming Leasehold Interest" means any Recorded Leasehold Interest
as to which the lessor has agreed in writing for the benefit of Administrative
Agent (which writing has been delivered to Administrative Agent), whether under
the terms of the applicable lease, under the terms of a Landlord Consent and
Estoppel, or otherwise, to the matters described in the definition of "Landlord
Consent and Estoppel," which interest, if a subleasehold or sub-subleasehold
interest, is not subject to any contrary restrictions contained in a superior
lease or sublease.
8
"Consolidated Adjusted EBITDA" means, for any period, the sum of the
amounts of such period of (i) Consolidated Adjusted Net Income, (ii)
Consolidated Interest Expense, (iii) provisions for taxes based on income, (iv)
total depreciation expense, (v) total amortization expense, (vi) Management Fees
paid in accordance with subsection 7.5, (vii) other non-cash items reducing
Consolidated Adjusted Net Income, (viii) to the extent deducted in determining
Consolidated Adjusted Net Income, legal fees and other expenses incurred with
respect to the Alamo Acquisition; provided that such legal fees and expenses do
--------
not exceed $1,700,000 in the aggregate, and (ix) those items set forth on
Schedule 1.1(i) annexed hereto, less other non-cash items increasing
--------------- ----
Consolidated Adjusted Net Income, all of the foregoing as determined on a
consolidated basis for Holdings and its Subsidiaries in conformity with GAAP.
"Consolidated Adjusted Net Income" means, for any period, the net
income (or loss) of Holdings and its Subsidiaries on a consolidated basis for
such period taken as a single accounting period determined in conformity with
GAAP; provided that there shall be excluded (i) the income (or loss) of any
--------
Person (other than a Subsidiary of Holdings) in which any other Person (other
than Holdings or any of its Subsidiaries) has a joint interest, except to the
extent of the amount of dividends or other distributions actually paid to
Holdings or any of its Subsidiaries by such Person during such period, (ii) the
income (or loss) of any Person accrued prior to the date it becomes a Subsidiary
of Holdings or is merged into or consolidated with Holdings or any of its
Subsidiaries or that Person's assets are acquired by Holdings or any of its
Subsidiaries, (iii) the income of any Subsidiary of Holdings to the extent that
the declaration or payment of dividends or similar distributions by that
Subsidiary of that income is not at the time permitted by operation of the terms
of its charter or any agreement, instrument, judgment, decree, order, statute,
rule or governmental regulation applicable to that Subsidiary, (iv) any after-
tax gains or losses attributable to Asset Sales or returned surplus assets of
any Pension Plan, and (v) (to the extent not included in clauses (i) through
(iv) above) any net extraordinary gains or net non-cash extraordinary losses.
"Consolidated Capital Expenditures" means, for any period, the sum of
(i) the aggregate of all expenditures (whether paid in cash or other
consideration or accrued as a liability and including that portion of Capital
Leases which is capitalized on the consolidated balance sheet of Holdings and
its Subsidiaries) by Holdings and its Subsidiaries during that period that, in
conformity with GAAP, are included in "additions to property, plant or
equipment" or comparable items reflected in the consolidated statement of cash
flows of Holdings and its Subsidiaries plus (ii) to the extent not covered by
----
clause (i) of this definition, the aggregate of all expenditures by Holdings and
its Subsidiaries during that period to acquire (by purchase or otherwise) the
stock or other evidence of beneficial ownership of any Person that, as a result
of such acquisition, becomes a Subsidiary of Holdings; provided that, in
--------
connection with the repair or replacement of any asset by Company or any of its
Subsidiaries with insurance proceeds received by Company or any of its
Subsidiaries in respect of any damage to such asset or the actual or
constructive loss of or any damage to any similar asset, there shall be included
in Consolidated Capital Expenditures only the excess of the gross amount of the
purchase price or repair costs over the amount of such insurance proceeds; and
provided, further that in no event
-------- -------
9
shall Consolidated Capital Expenditures include any expenditures in connection
with any Permitted Acquisition.
"Consolidated Cash Interest Expense" means, for any period,
Consolidated Interest Expense for such period excluding, however, any interest
--------- -------
expense not payable in Cash (including amortization of discount and amortization
of debt issuance costs).
"Consolidated Current Assets" means, as at any date of determination,
the total assets of Holdings and its Subsidiaries on a consolidated basis which
may properly be classified as current assets in conformity with GAAP, excluding
---------
Cash and Cash Equivalents.
"Consolidated Current Liabilities" means, as at any date of
determination, the total liabilities of Holdings and its Subsidiaries on a
consolidated basis which may properly be classified as current liabilities in
conformity with GAAP, excluding the current portions of Funded Debt and Capital
---------
Leases.
"Consolidated Fixed Charges" means for any period, the sum (without
duplication) of the amounts for such period of (i) Consolidated Cash Interest
Expense, (ii) the portion of taxes based on income actually paid in cash or
provision for cash income taxes (excluding any such cash taxes payable with
respect to the operations of any of the businesses acquired pursuant to the 1999
Acquisitions for any date prior to the consummation of the acquisition of such
businesses by Company), (iii) scheduled repayments of Consolidated Total Debt,
(iv) Management Fees paid in accordance with subsection 7.5, and (v) payments
made to redeem all or any portion of the PIK Sub Debt in accordance with
subsection 7.5, all of the foregoing as determined on a consolidated basis for
Holdings and its Subsidiaries in conformity with GAAP.
"Consolidated Interest Expense" means, for any period, total interest
expense (including that portion attributable to Capital Leases in accordance
with GAAP and capitalized interest) of Holdings and its Subsidiaries on a
consolidated basis with respect to all outstanding Indebtedness of Holdings and
its Subsidiaries, including all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance financing
and net costs under Interest Rate Agreements, but excluding, however, any
amounts referred to in subsection 2.3 payable to Administrative Agent and
Lenders on or before the Effective Date.
"Consolidated Total Debt" means, as at any date of determination, the
aggregate stated balance sheet amount of all Indebtedness of Holdings and its
Subsidiaries, determined on a consolidated basis in accordance with GAAP, less
----
all cash and Cash Equivalents on hand at Holdings and its Subsidiaries; provided
--------
that, if at any such date of determination there are outstanding Revolving
Loans, then the amount of cash and Cash Equivalents on hand shall be deemed not
to exceed the lesser of (a) the actual amount of cash and Cash Equivalents on
hand and (b) $5,000,000; and, provided further, that for purposes of calculating
-------- -------
the Leverage Ratio as of the last day of any four-Fiscal Quarter period, the
amount of Revolving Loans included in
10
determining Consolidated Total Debt as of such date shall be the average amount
of Revolving Loans outstanding on each day during the four-Fiscal Quarter period
ending on such date.
"Consolidated Working Capital" means, as at any date of determination,
the excess (or deficit) of Consolidated Current Assets over Consolidated Current
Liabilities.
"Consolidated Working Capital Adjustment" means, for any period on a
consolidated basis, the amount (which may be a negative number) by which
Consolidated Working Capital as of the beginning of such period exceeds (or is
less than) Consolidated Working Capital as of the end of such period.
"Contingent Obligation", as applied to any Person, means any direct or
indirect liability, contingent or otherwise, of that Person (i) with respect to
any Indebtedness, lease, dividend or other obligation of another if the primary
purpose or intent thereof by the Person incurring the Contingent Obligation is
to provide assurance to the obligee of such obligation of another that such
obligation of another will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such obligation
will be protected (in whole or in part) against loss in respect thereof, (ii)
with respect to any letter of credit issued for the account of that Person or as
to which that Person is otherwise liable for reimbursement of drawings, or (iii)
under Hedge Agreements. Contingent Obligations shall include (a) the direct or
indirect guaranty, endorsement (otherwise than for collection or deposit in the
ordinary course of business), co-making, discounting with recourse or sale with
recourse by such Person of the obligation of another, (b) the obligation to make
take-or-pay or similar payments if required regardless of non-performance by any
other party or parties to an agreement, and (c) any liability of such Person for
the obligation of another through any agreement (contingent or otherwise) (X) to
purchase, repurchase or otherwise acquire such obligation or any security
therefor, or to provide funds for the payment or discharge of such obligation
(whether in the form of loans, advances, stock purchases, capital contributions
or otherwise) or (Y) to maintain the solvency or any balance sheet item, level
of income or financial condition of another if, in the case of any agreement
described under subclauses (X) or (Y) of this sentence, the primary purpose or
intent thereof is as described in the preceding sentence. The amount of any
Contingent Obligation shall be equal to the amount of the obligation so
guaranteed or otherwise supported or, if less, the amount to which such
Contingent Obligation is specifically limited.
"Contractual Obligation", as applied to any Person, means any
provision of any Security issued by that Person or of any material indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument to
which that Person is a party or by which it or any of its properties is bound or
to which it or any of its properties is subject.
"CSFB" has the meaning assigned to that term in the introduction to
this Agreement.
11
"Currency Agreement" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement or arrangement to which Holdings or any of its Subsidiaries is
a party.
"Defaulting Lender" means any Lender with respect to which a Lender
Default is in effect.
"Deposit Account" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"Dollars" and the sign "$" mean the lawful money of the United States
of America.
"Domestic Subsidiary" means a Subsidiary of Company organized under
the laws of the United States of America or any state or territory thereof.
"Effective Date" means the date on or before July 28, 1999 on which
the conditions precedent set forth in subsections 4.2 and 4.3 shall be satisfied
or waived in accordance with the terms hereof.
"Effective Date Acquisitions" means, collectively, the Central
Fabricators Acquisition and the Tisco Acquisition.
"Effective Date Acquisition Agreements" means, collectively, the
Central Fabricators Acquisition Agreement and the Tisco Acquisition Agreement.
"Effective Date Investment" has the meaning assigned to that term in
the recitals of this Agreement.
"Eligible Assignee" means (A) (i) a commercial bank organized under
the laws of the United States or any state thereof; (ii) a savings and loan
association or savings bank organized under the laws of the United States or any
state thereof; (iii) a commercial bank organized under the laws of any other
country or a political subdivision thereof; provided that (x) such bank is
--------
acting through a branch or agency located in the United States or (y) such bank
is organized under the laws of a country that is a member of the Organization
for Economic Cooperation and Development or a political subdivision of such
country; and (iv) any other entity which is an "accredited investor" (as defined
in Regulation D under the Securities Act) which extends credit or buys loans as
one of its businesses including insurance companies, mutual funds and lease
financing companies; and (B) any Lender and any Affiliate or Approved Fund of
any Lender; provided that no Affiliate of Holdings shall be an Eligible
--------
Assignee.
12
"Employee Benefit Plan" means any "employee benefit plan" as defined
in Section 3(3) of ERISA which is or was maintained or contributed to by
Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates.
"Environmental Claim" means any investigation, notice, notice of
violation, claim, action, suit, proceeding, demand, abatement order or other
order or directive (conditional or otherwise), by any governmental authority or
any other Person, arising (i) pursuant to or in connection with any actual or
alleged violation of any Environmental Law, (ii) in connection with any
Hazardous Materials or any actual or alleged Hazardous Materials Activity, or
(iii) in connection with any actual or alleged damage, injury, threat or harm to
health, safety, natural resources or the environment.
"Environmental Laws" means any and all current or future statutes,
ordinances, orders, rules, regulations, judgments, Governmental Authorizations,
or any other legally binding requirements of governmental authorities relating
to (i) environmental matters, including those relating to any Hazardous
Materials Activity, (ii) the generation, use, storage, transportation or
disposal of Hazardous Materials, or (iii) occupational safety and health,
industrial hygiene, or the protection of human, plant or animal health or
welfare, in any manner applicable to Holdings or any of its Subsidiaries or any
Facility, including the Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. (S) 9601 et seq.), the Hazardous Materials
-- ---
Transportation Act (49 U.S.C. (S) 1801 et seq.), the Resource Conservation and
-- ---
Recovery Act (42 U.S.C. (S) 6901 et seq.), the Federal Water Pollution Control
-- ---
Act (33 U.S.C. (S) 1251 et seq.), the Clean Air Act (42 U.S.C. (S) 7401 et
-- --- --
seq.), the Toxic Substances Control Act (15 U.S.C. (S) 2601 et seq.), the
--- -- ---
Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. (S) 136 et seq.),
-- ---
the Occupational Safety and Health Act (29 U.S.C. (S) 651 et seq.), the Oil
-- ---
Pollution Act (33 U.S.C. (S) 2701 et seq) and the Emergency Planning and
------
Community Right-to-Know Act (42 U.S.C. (S) 11001 et seq.), each as amended or
-- ---
supplemented, any analogous present or future state or local statutes or laws,
and any regulations promulgated pursuant to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor thereto.
"ERISA Affiliate" means, as applied to any Person, (i) any corporation
which is a member of a controlled group of corporations within the meaning of
Section 414(b) of the Internal Revenue Code of which that Person is a member;
(ii) any trade or business (whether or not incorporated) which is a member of a
group of trades or businesses under common control within the meaning of Section
414(c) of the Internal Revenue Code of which that Person is a member; and (iii)
any member of an affiliated service group within the meaning of Section 414(m)
or (o) of the Internal Revenue Code of which that Person, any corporation
described in clause (i) above or any trade or business described in clause (ii)
above is a member. Any former ERISA Affiliate of Holdings or any of its
Subsidiaries shall continue to be considered an ERISA Affiliate of Holdings or
such Subsidiary within the meaning of this definition with respect to the period
such entity was an ERISA Affiliate of Holdings or such Subsidiary, but only with
respect
13
to liabilities arising for which Holdings or such Subsidiary could be
liable under the Internal Revenue Code or ERISA.
"ERISA Event" means (i) a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to any
Pension Plan (excluding those for which the provision for 30-day notice to the
PBGC has been waived by regulation); (ii) the failure to meet the minimum
funding standard of Section 412 of the Internal Revenue Code with respect to any
Pension Plan (whether or not waived in accordance with Section 412(d) of the
Internal Revenue Code) or the failure to make by its due date a required
installment under Section 412(m) of the Internal Revenue Code with respect to
any Pension Plan or the failure to make any required contribution to a
Multiemployer Plan; (iii) the provision by the administrator of any Pension Plan
pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such
plan in a distress termination described in Section 4041(c) of ERISA; (iv) the
withdrawal by Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates from any Pension Plan with two or more contributing sponsors or the
termination of any such Pension Plan resulting in liability pursuant to Section
4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedings to
terminate any Pension Plan, or the occurrence of any event or condition which
might constitute grounds under ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan; (vi) the imposition of liability
on Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates
pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of
Section 4212(c) of ERISA; (vii) the withdrawal of Holdings, any of its
Subsidiaries or any of their respective ERISA Affiliates in a complete or
partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from
any Multiemployer Plan if there is any potential liability therefor, or the
receipt by Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates of notice from any Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to
terminate or has terminated under Section 4041A or 4042 of ERISA; (viii) the
occurrence of an act or omission which could give rise to the imposition on
Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates of
material fines, penalties, taxes or related charges under Chapter 43 of the
Internal Revenue Code or under Section 409, Section 502(c), (i) or (l), or
Section 4071 of ERISA in respect of any Employee Benefit Plan; (ix) the
assertion of a material claim (other than routine claims for benefits) against
any Employee Benefit Plan other than a Multiemployer Plan or the assets thereof,
or against Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates in connection with any Employee Benefit Plan; (x) receipt from the
Internal Revenue Service of notice of the failure of any Pension Plan (or any
other Employee Benefit Plan intended to be qualified under Section 401(a) of the
Internal Revenue Code) to qualify under Section 401(a) of the Internal Revenue
Code, or the failure of any trust forming part of any Pension Plan to qualify
for exemption from taxation under Section 501(a) of the Internal Revenue Code;
or (xi) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or pursuant to ERISA with respect to any Pension Plan.
14
"Eurocurrency Reserve Requirements" means, for each Interest Period
for each Eurodollar Rate Loan, the highest reserve percentage applicable to any
Lender during such Interest Period under regulations issued from time to time by
the Board of Governors of the Federal Reserve System or any successor for
determining the maximum reserve requirement (including, without limitation, any
emergency, supplemental or other marginal reserve requirement), with respect to
liabilities or assets consisting of or including Eurocurrency liabilities having
a term equal to such Interest Period.
"Eurodollar Base Rate" means the rate per annum determined by the
Administrative Agent at approximately 11:00 A.M. (London time) on the date which
is two Business Days prior to the beginning of the relevant Interest Period (as
specified in the applicable Notice of Borrowing) by reference to the British
Bankers' Association Interest Settlement Rates for deposits in Dollars (as set
forth by any service selected by the Administrative Agent which has been
nominated by the British Bankers' Association as an authorized information
vendor for the purpose of displaying such rates) for a period equal to such
Interest Period; provided that, to the extent that an interest rate is not
--------
ascertainable pursuant to the foregoing provisions of this definition, the
"Eurodollar Base Rate" shall be the interest rate per annum determined by the
Administrative Agent to be the average of the rates per annum at which deposits
in Dollars are offered for such relevant Interest Period to major banks in the
London interbank market in London, England by the Reference Lenders at
approximately 11:00 A.M. (London time) on the date which is two Business Days
prior to the beginning of such Interest Period. If any of the Reference Lenders
shall be unable or shall otherwise fail to supply such rates to the
Administrative Agent upon its request, the rate of interest shall, subject to
the provisions of subsection 5.10, be determined on the basis of the quotations
of the remaining Reference Lender.
"Eurodollar Rate Loans" means Loans bearing interest at rates
determined by reference to the Reserve Adjusted Eurodollar Rate as provided in
subsection 2.2A.
"Event of Default" means each of the events set forth in Section 9.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"Existing Agreements" means, collectively, the Recapitalization
Agreement, the Holdings Certificate of Designations, the Selling Shareholder
Warrant, the Existing Seller Notes, the Management Services Agreement and the
Stockholders Agreement.
"Existing Credit Agreement" has the meaning assigned to that term in
the Recitals to this Agreement.
"Existing Holdings Preferred" means the 8% Cumulative Redeemable
Preferred Stock of Holdings, par value $0.01 per share, with a liquidation
preference of $1,000
15
per share and with the other terms set forth in the Holdings Certificate of
Designations, and which was issued on the Closing Date.
"Existing Lenders" has the meaning assigned to that term in the
Recitals to this Agreement.
"Existing Letters of Credit" has the meaning assigned to that term in
subsection 3.1.
"Existing Mortgages" means any mortgage, deed of trust or deed
delivered pursuant to the Existing Credit Agreement including any amendments,
modifications, restatements or assignments thereof.
"Existing Revolving Loans" has the meaning assigned to that term in
subsection 2.1A(i).
"Existing Seller Notes" means (i) that certain Promissory Note Secured
by Deed of Trust dated June 30, 1994, issued by Company to ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
and certain other Persons in the original principal amount of $5,000,000, and
(ii) that certain Subordinated Term Note April 18, 1997, issued by Company to
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ in the original principal amount of $700,000, in each case in
the form delivered to Administrative Agent and Lenders prior to their execution
of this Agreement and as such promissory notes may be amended from time to time
thereafter to the extent permitted under subsection 7.15B.
"Existing Term Loans" means the "Term Loans" as such term is defined
in the Existing Credit Agreement.
"Facilities" means any and all real property (including all
buildings, fixtures or other improvements located thereon) now, hereafter or
heretofore owned, leased, operated or used by Holdings or any of its
Subsidiaries or any of their respective predecessors or Affiliates.
"Federal Funds Effective Rate" means, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by Administrative Agent from three Federal funds brokers
of recognized standing selected by Administrative Agent.
"Fee Property" means a Real Property Asset consisting of a fee simple
interest in real property.
16
"Financial Plan" has the meaning assigned to that term in subsection
6.1(xiii).
"First Priority" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document, that such Lien is
the most senior Lien (other than Permitted Liens to the extent not perfected by
the filing of any UCC financing statements) to which such Collateral is subject.
"Fiscal Quarter" means a fiscal quarter of any Fiscal Year.
"Fiscal Year" means the fiscal year of Holdings and its Subsidiaries
ending on the Saturday closest to December 31 of each calendar year. For
purposes of this Agreement, any particular Fiscal Year shall be designated by
reference to the calendar year in which the December 31 closest to the end of
such Fiscal Year occurs.
"Flood Hazard Property" means a Mortgaged Property located in an area
designated by the Federal Emergency Management Agency as having special flood or
mud slide hazards.
"Foreign Subsidiary" means any Subsidiary of Company that is not a
Domestic Subsidiary.
"Funded Debt", as applied to any Person, means all Indebtedness of
that Person (including any current portions thereof) which by its terms or by
the terms of any instrument or agreement relating thereto matures more than one
year from, or is directly renewable or extendable at the option of that Person
to a date more than one year from (including an option of that Person under a
revolving credit or similar agreement obligating the lender or lenders to extend
credit over a period of one year or more from), the date of the creation
thereof.
"Funding and Payment Office" means (i) the office of Administrative
Agent and Swing Line Lender located at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ or (ii) such other office of Administrative Agent and Swing Line Lender as
may from time to time hereafter be designated as such in a written notice
delivered by Administrative Agent and Swing Line Lender to Company and each
Lender.
"Funding Date" means the date of the funding of a Loan.
"GAAP" means, subject to the limitations on the application thereof
set forth in subsection 1.2, generally accepted accounting principles set forth
in opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, in each case as the same are applicable to the
circumstances as of the date of determination.
17
"Governmental Authorization" means any permit, license, authorization,
plan, directive, consent order or consent decree of or from any federal, state
or local governmental authority, agency or court.
"Guaranties" means the Holdings Guaranty and the Subsidiary Guaranty.
"Hazardous Materials" means (i) any chemical, material or substance at
any time defined as or included in the definition of "hazardous substances",
"hazardous wastes", "hazardous materials", "extremely hazardous waste", acutely
hazardous waste", "radioactive waste", "biohazardous waste", "pollutant", "toxic
pollutant", "contaminant", "restricted hazardous waste", "infectious waste",
"toxic substances", or any other term or expression intended to define, list or
classify substances by reason of properties harmful to health, safety or the
indoor or outdoor environment (including harmful properties such as
ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive
toxicity, "TCLP toxicity" or "EP toxicity" or words of similar meaning and
regulatory effect under any applicable Environmental Laws); (ii) any oil,
petroleum, petroleum fraction or petroleum derived substance; (iii) any drilling
fluids, produced waters and other wastes associated with the exploration,
development or production of crude oil, natural gas or geothermal resources;
(iv) any flammable substances or explosives; (v) any radioactive materials; (vi)
any asbestos-containing materials; (vii) urea formaldehyde foam insulation;
(viii) electrical equipment which contains any oil or dielectric fluid
containing polychlorinated biphenyls; (ix) pesticides; and (x) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any governmental authority under any Environmental Law.
"Hazardous Materials Activity" means any past, current, proposed or
threatened activity, event or occurrence involving any Hazardous Materials,
including the use, manufacture, possession, storage, holding, presence,
existence, location, Release, threatened Release, discharge, placement,
generation, transportation, processing, construction, treatment, abatement,
removal, remediation, disposal, disposition or handling of any Hazardous
Materials, and any corrective action or response action with respect to any of
the foregoing.
"Hedge Agreement" means an Interest Rate Agreement or a Currency
Agreement designed to hedge against fluctuations in interest rates or currency
values, respectively.
"Holdings" has the meaning assigned to that term in the introduction
to this Agreement.
"Holdings Certificate of Designations" means the provisions of
Holdings' Amended Certificate of Incorporation relating to the Holdings
Preferred, in the form delivered to Administrative Agent and Lenders on or prior
to the Effective Date and as such provisions may be amended from time to time
thereafter to the extent permitted under subsection 7.15A.
18
"Holdings Common Stock" means the common stock of Holdings, par value
$0.01 per share.
"Holdings Discount Debenture Indenture" means the indenture pursuant
to which the Holdings Discount Debentures are issued, as such indenture may be
amended from time to time to the extent permitted under subsection 7.15A
"Holdings Discount Debentures" means the $52,204,000 aggregate
principal amount at maturity of 15% of Senior Discount Debentures due 2011 of
Holdings issued pursuant to the Holdings Discount Debenture Indenture.
"Holdings Guaranty" means the provisions of Section 8.
"Holdings Pledge Agreement" means the Holdings Pledge Agreement
executed and delivered by Holdings on the Closing Date, substantially in the
form of Exhibit XVI annexed hereto, as such Holdings Pledge Agreement may
-----------
thereafter be amended, supplemented or otherwise modified from time to time.
"Holdings Preferred" means, collectively, the Existing Holdings
Preferred and the New Holdings Preferred.
"Holdings Units" means units, each of which consists of one Holdings
Discount Debenture with a principal amount at maturity of $1,000 and 0.8699
shares of Holdings Common Stock.
"Hubbardston Property" means that certain Fee Property owned by
Company as of the Closing Date and located in Hubbardston, Massachusetts.
"Indebtedness", as applied to any Person, means (i) all indebtedness
for borrowed money, (ii) that portion of obligations with respect to Capital
Leases that is properly classified as a liability on a balance sheet in
conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money,
(iv) any obligation owed for all or any part of the deferred purchase price of
property or services (excluding any such obligations incurred under ERISA),
which purchase price is (a) due more than six months from the date of incurrence
of the obligation in respect thereof or (b) evidenced by a note or similar
written instrument, and (v) all indebtedness secured by any Lien on any property
or asset owned or held by that Person regardless of whether the indebtedness
secured thereby shall have been assumed by that Person or is nonrecourse to the
credit of that Person. Obligations under Interest Rate Agreements and Currency
Agreements constitute (X) in the case of Hedge Agreements, Contingent
Obligations, and (Y) in all other cases, Investments, and in neither case
constitute Indebtedness.
"Indemnitee" has the meaning assigned to that term in subsection 11.3.
19
"Initial Syndication Period" means the period commencing on and
including the Effective Date and ending on (but excluding) the date on which
Administrative Agent notifies Company that it has concluded its primary
syndication of the Loans and the Commitments.
"Intellectual Property" means all patents, trademarks, tradenames,
copyrights, technology, know-how and processes used in or necessary for the
conduct of the business of Holdings and its Subsidiaries as currently conducted
that are material to the condition (financial or otherwise), business or
operations of Holdings and its Subsidiaries, taken as a whole.
"Interest Payment Date" means (i) with respect to any Base Rate Loan,
the last Business Day in each of March, June, September and December of each
year, commencing on the first such date to occur after the Effective Date, and
(ii) with respect to any Eurodollar Rate Loan, the last day of each Interest
Period applicable to such Loan; provided that, in the case of each Interest
--------
Period of six months, "Interest Payment Date" shall also include the date that
is three months after the commencement of such Interest Period.
"Interest Period" has the meaning assigned to that term in subsection
2.2B.
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement to which Holdings or any of its Subsidiaries is a
party.
"Interest Rate Determination Date" means, with respect to any Interest
Period, the second Business Day prior to the first day of such Interest Period.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter, and any successor
statute.
"Inventory" means, with respect to any Person as of any date of
determination, all goods, merchandise and other personal property which are then
held by such Person for sale or lease, including raw materials and work in
process.
"Investment" means (i) any direct or indirect purchase or other
acquisition by Holdings or any of its Subsidiaries of, or of a beneficial
interest in, any Securities of any other Person (other than a Person that prior
to such purchase or acquisition was a wholly-owned Subsidiary of Holdings), (ii)
any direct or indirect redemption, retirement, purchase or other acquisition for
value, by any Subsidiary of Holdings from any Person other than Holdings or any
of its Subsidiaries, of any equity Securities of such Subsidiary, (iii) any
direct or indirect loan, advance (other than advances to employees for moving,
entertainment and travel expenses, drawing accounts and similar expenditures in
the ordinary course of business) or capital contribution by Holdings or any of
its Subsidiaries to any other Person (other than a wholly-owned Subsidiary of
Holdings), including all indebtedness and accounts receivable from that
20
other Person that are not current assets or did not arise from sales to that
other Person in the ordinary course of business, or (iv) Interest Rate
Agreements or Currency Agreements not constituting Hedge Agreements. The amount
of any Investment shall be the original cost of such Investment plus the cost of
----
all additions thereto, without any adjustments for increases or decreases in
value, or write-ups, write-downs or write-offs with respect to such Investment.
"IP Collateral" means, collectively, the Collateral under the Company
Patent and Trademark Security Agreement and the Subsidiary Patent and Trademark
Security Agreements.
"Issuing Lender" means, with respect to any Letter of Credit, the
Lender which agrees or is otherwise obligated to issue such Letter of Credit,
determined as provided in subsection 3.1B(ii).
"Joint Venture" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form; provided
--------
that in no event shall any corporate Subsidiary of any Person be considered to
be a Joint Venture to which such Person is a party.
"Landlord Consent and Estoppel" means, with respect to any Leasehold
Property, a letter, certificate or other instrument in writing from the lessor
under the related lease, satisfactory in form and substance to Administrative
Agent, relating to (i) the ability of the applicable Loan Party to encumber such
Leasehold Property pursuant to a Mortgage, (ii) the matters contained in a
Collateral Access Agreement, and (iii) such other matters relating to such
Leasehold Property as Administrative Agent may reasonably request.
"Leasehold Property" means any Real Property Asset consisting of a
leasehold interest in real property.
"Lender" and "Lenders" means the persons identified as "Lenders" and
listed on the signature pages of this Agreement, together with their successors
and permitted assigns pursuant to subsection 11.1, and the term "Lenders" shall
include Swing Line Lender unless the context otherwise requires; provided that
--------
the term "Lenders", when used in the context of a particular Commitment, shall
mean Lenders having that Commitment.
"Lender Default" shall mean (i) the refusal (which has not been
retracted) of a Lender to make available its portion of any Loans (including any
Revolving Loans made to pay Refunded Swing Line Loans or to reimburse drawings
under Letters of Credit) in accordance with subsection 2.1A or its portion of
any unreimbursed drawing or payment under a Letter of Credit in accordance with
subsection 3.3C or (ii) a Lender having notified Company and/or Administrative
Agent in writing that it does not intend to comply with its obligations under
subsection 2.1 or subsections 3.1C, 3.3B or 3.3C, as a result of any takeover of
such Lender by any regulatory authority or agency.
21
"Letter of Credit" or "Letters of Credit" means Commercial Letters of
Credit and Standby Letters of Credit issued or to be issued by Issuing Lenders
for the account of Company pursuant to subsection 3.1.
"Letter of Credit Usage" means, as at any date of determination, the
sum of (i) the maximum aggregate amount which is or at any time thereafter may
become available for drawing under all Letters of Credit then outstanding plus
----
(ii) the aggregate amount of all drawings under Letters of Credit honored by
Issuing Lenders and not theretofore reimbursed by Company (including any such
reimbursement out of the proceeds of Revolving Loans pursuant to subsection
3.3B).
"Leverage Ratio" means, as of the last day of any Fiscal Quarter, the
ratio of (i) Consolidated Total Debt as of such date to (ii) Consolidated
Adjusted EBITDA for the four-Fiscal Quarter period ending on such date.
"Lien" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.
"Loan" or "Loans" means one or more of the Revolving Loans or Swing
Line Loans or any combination thereof.
"Loan Documents" means this Agreement, the Notes, the Letters of
Credit (and any applications for, or reimbursement agreements or other documents
or certificates executed by Company in favor of an Issuing Lender relating to,
the Letters of Credit), the Guaranties, the Collateral Documents and the
Acknowledgment and Consent.
"Loan Party" means each of Holdings, Company and any of Holdings'
other Subsidiaries from time to time executing a Loan Document, and "Loan
Parties" means all such Persons, collectively.
"Management Fees" means fees payable by Company to MDP at the times,
in the amounts, and otherwise in accordance with the terms set forth in the
Management Services Agreement.
"Management Investors" means the management officers and employees of
Holdings and its Subsidiaries identified as Management Investors on Schedule
--------
4.2C annexed hereto.
----
"Management Services Agreement" means that certain Management Services
Agreement dated as of the Closing Date by and between MDP and Company, in the
form delivered to Administrative Agent and Lenders prior to their execution of
this Agreement and as
22
such agreement may be amended from time to time thereafter to the extent
permitted under subsection 7.15A.
"Margin Stock" has the meaning assigned to that term in Regulation U
of the Board of Governors of the Federal Reserve System as in effect from time
to time.
"Material Adverse Effect" means (i) a material adverse effect upon the
business, operations, properties, assets, condition (financial or otherwise) or
prospects of Holdings or any of its Subsidiaries or (ii) the impairment of the
ability of any Loan Party to perform, or of Administrative Agent or Lenders to
enforce, the Obligations.
"Material Contract" means any contract or other arrangement to which
Holdings or any of its Subsidiaries is a party (other than the Loan Documents)
for which breach, nonperformance, cancellation or failure to renew could have a
Material Adverse Effect.
"Material Leasehold Property" means a Leasehold Property reasonably
determined by Administrative Agent to be of material value as Collateral or of
material importance to the operations of Holdings or any of its Subsidiaries ;
provided, however that, no Leasehold Property (i) in respect of which the
-----------------
remaining term of the related lease (taking into account any renewal options as
if such options had been exercised) is one year or less or (ii) with respect to
which the aggregate amount of all rents payable during any one Fiscal Year never
exceeds $500,000 shall be a "Material Leasehold Property".
"MDCP" means Madison Dearborn Capital Partners II, L.P. a Delaware
limited partnership.
"MDP" means Madison Dearborn Partners, Inc., a Delaware corporation.
"Mortgage" means (i) a security instrument (whether designated as a
deed of trust or a mortgage or by any similar title) executed and delivered by
any Loan Party, in form and substance satisfactory to Administrative Agent and
as approved by its counsel with respect to each applicable jurisdiction based on
local laws or customary local mortgage or deed of trust practices, encumbering
such Loan Party's interest in a Mortgaged Property, or (ii) at Administrative
Agent's option, in the case of an Additional Mortgaged Property (as defined in
subsection 6.9), an amendment to an existing Mortgage, in form satisfactory to
Administrative Agent, adding such Additional Mortgaged Property to the Real
Property Assets encumbered by such existing Mortgage, in either case as such
security instrument or amendment may be amended, supplemented or otherwise
modified from time to time. "Mortgages" means all such instruments,
collectively.
"Mortgaged Property" means any property subject to an Existing
Mortgage, a Scheduled Post-Effective Date Mortgaged Property and/or an
Additional Mortgaged Property.
23
"Multiemployer Plan" means any Employee Benefit Plan which is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
"NAIC" has the meaning assigned to that term in subsection 11.19.
"Net Asset Sale Proceeds" means, with respect to any Asset Sale, Cash
payments (including any Cash received by way of deferred payment pursuant to, or
by monetization of, a note receivable or otherwise, but only as and when so
received) received from such Asset Sale, net of any bona fide direct costs
incurred in connection with such Asset Sale, including (i) income taxes
reasonably estimated to be actually payable within two years of the date of such
Asset Sale as a result of any gain recognized in connection with such Asset Sale
and (ii) payment of the outstanding principal amount of, premium or penalty, if
any, and interest on any Indebtedness (other than the Loans) that is secured by
a Lien on the stock or assets in question and that is required to be repaid
under the terms thereof as a result of such Asset Sale.
"Net Debt Proceeds" has the meaning assigned to that term in
subsection 2.4A(iii)(c).
"Net Insurance/Condemnation Proceeds" means any Cash payments or
proceeds received by Holdings or any of its Subsidiaries (i) under any business
interruption or casualty insurance policy in respect of a covered loss
thereunder or (ii) as a result of the taking of any assets of Holdings or any of
its Subsidiaries by any Person pursuant to the power of eminent domain,
condemnation or otherwise, or pursuant to a sale of any such assets to a
purchaser with such power under threat of such a taking, in each case net of any
actual and reasonable documented costs incurred by Holdings or any of its
Subsidiaries in connection with the adjustment or settlement of any claims of
Holdings or such Subsidiary in respect thereof.
"New Holdings Preferred" means the 8% Cumulative Redeemable Preferred
Stock of Holdings, par value $0.01 per share, with a liquidation preference of
$1,000 per share and with the other terms set forth in the Holdings Certificate
of Designations, and which is to be issued on the Effective Date.
"New Lender" means any Person that becomes a Lender on the Effective
Date.
"1999 Acquisitions" means, collectively, the Alitec Acquisition and
the Effective Date Acquisitions.
"1999 Acquisition Agreements" means, collectively, the Alitec
Acquisition Agreement and the Effective Date Acquisition Agreements.
"Notes" means one or more of the Revolving Notes or Swing Line Note or
any combination thereof.
24
"Notice of Borrowing" means a notice substantially in the form of
Exhibit I annexed hereto delivered by Company to Administrative Agent pursuant
---------
to subsection 2.1B with respect to a proposed borrowing.
"Notice of Conversion/Continuation" means a notice substantially in
the form of Exhibit II annexed hereto delivered by Company to Administrative
----------
Agent pursuant to subsection 2.2D with respect to a proposed conversion or
continuation of the applicable basis for determining the interest rate with
respect to the Loans specified therein.
"Notice of Issuance of Letter of Credit" means a notice substantially
in the form of Exhibit III annexed hereto delivered by Company to Administrative
-----------
Agent pursuant to subsection 3.1B(i) with respect to the proposed issuance of a
Letter of Credit.
"Obligations" means all obligations of every nature of each Loan Party
from time to time owed to Administrative Agent, Lenders or any of them under the
Loan Documents, whether for principal, interest, reimbursement of amounts drawn
under Letters of Credit, fees, expenses, indemnification or otherwise.
"Officer's Certificate" means, as applied to any corporation, a
certificate executed on behalf of such corporation by its president or its chief
financial officer; provided, that any Officer's Certificate to be delivered on
--------
the Effective Date may be executed by the chairman of such corporation; and
provided further, that every Officer's Certificate with respect to the
-------- -------
compliance with a condition precedent to the making of any Loans hereunder shall
include (i) a statement that the officer making or giving such Officer's
Certificate has read such condition and any definitions or other provisions
contained in this Agreement relating thereto, (ii) a statement that, in the
opinion of the signer, he or she has made or has caused to be made such
examination or investigation as is necessary to enable him or her to express an
informed opinion as to whether or not such condition has been complied with, and
(iii) a statement as to whether, in the opinion of the signer, such condition
has been complied with.
"Operating Lease" means, as applied to any Person, any lease
(including leases that may be terminated by the lessee at any time) of any
property (whether real, personal or mixed) that is not a Capital Lease other
than any such lease under which that Person is the lessor.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA.
"Permitted Acquisition" means an Acquisition to the extent effected in
accordance with the provisions of subsection 7.7(vii).
25
"Permitted Encumbrances" means the following types of Liens (excluding
any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Internal
Revenue Code or by ERISA, any such Lien relating to or imposed in connection
with any Environmental Claim, and any such Lien expressly prohibited by any
applicable terms of any of the Collateral Documents):
(i) Liens for taxes, assessments or governmental charges or
claims the payment of which is not, at the time, required by subsection
6.3;
(ii) statutory Liens of landlords, statutory Liens of banks and
rights of set-off, statutory Liens of carriers, warehousemen, mechanics,
repairmen, workmen and materialmen, and other Liens imposed by law, in each
case incurred in the ordinary course of business (a) for amounts not yet
overdue or (b) for amounts that are overdue and that (in the case of any
such amounts overdue for a period in excess of 5 days) are being contested
in good faith by appropriate proceedings, so long as (1) such reserves or
other appropriate provisions, if any, as shall be required by GAAP shall
have been made for any such contested amounts, and (2) in the case of a
Lien with respect to any portion of the Collateral, such contest
proceedings conclusively operate to stay the sale of any portion of the
Collateral on account of such Lien;
(iii) Liens incurred or deposits made 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, leases,
government contracts, trade contracts, performance and return-of-money
bonds and other similar obligations (exclusive of obligations for the
payment of borrowed money), so long as no foreclosure, sale or similar
proceedings have been commenced with respect to any portion of the
Collateral on account thereof;
(iv) any attachment or judgment Lien not constituting an Event
of Default under subsection 9.8;
(v) leases or subleases granted to third parties in accordance
with any applicable terms of the Collateral Documents and not interfering
in any material respect with the ordinary conduct of the business of
Holdings or any of its Subsidiaries or resulting in a material diminution
in the value of any Collateral as security for the Obligations;
(vi) easements, rights-of-way, restrictions, encroachments, and
other minor defects or irregularities in title, in each case which do not
and will not interfere in any material respect with the ordinary conduct of
the business of Holdings or any of its Subsidiaries or result in a material
diminution in the value of any Collateral as security for the Obligations;
26
(vii) any (a) interest or title of a lessor or sublessor under
any lease permitted by subsection 7.9, (b) restriction or encumbrance that
the interest or title of such lessor or sublessor may be subject to, or (c)
subordination of the interest of the lessee or sublessee under such lease
to any restriction or encumbrance referred to in the preceding clause (b),
so long as the holder of such restriction or encumbrance agrees to
recognize the rights of such lessee or sublessee under such lease;
(viii) Liens arising from filing UCC financing statements
relating solely to leases permitted by this Agreement;
(ix) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection with
the importation of goods;
(x) any zoning or similar law or right reserved to or vested
in any governmental office or agency to control or regulate the use of any
real property;
(xi) Liens securing obligations (other than obligations
representing Indebtedness for borrowed money) under operating, reciprocal
easement or similar agreements entered into in the ordinary course of
business of Company and its Subsidiaries; and
(xii) licenses of patents, trademarks and other intellectual
property rights granted by Company or any of its Subsidiaries in the
ordinary course of business and not interfering in any material respect
with the ordinary conduct of the business of Company or such Subsidiary.
"Person" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments (whether federal,
state or local, domestic or foreign, and including political subdivisions
thereof) and agencies or other administrative or regulatory bodies thereof.
"PIK Sub Debt Agreement" means that certain Subordinated Promissory
Note dated August 7, 1998 made by Company to the order of MDCP in the original
principal amount of $25,000,000, as in effect as of the Effective Date.
"PIK Sub Debt" means the Indebtedness of Company evidenced by the PIK
Sub Debt Agreement.
27
"Pledged Collateral" means, collectively, the "Pledged Collateral" as
defined in the Holdings Pledge Agreement, the Company Pledge Agreement and the
Subsidiary Pledge Agreements.
"Potential Event of Default" means a condition or event that, after
notice or lapse of time or both, would constitute an Event of Default.
"Prime Rate" means the rate of interest per annum publicly announced
from time to time by CSFB as its prime commercial lending rate in effect at its
principal office in New York City. The Prime Rate is a reference rate and does
not necessarily represent the lowest or best rate actually charged to any
customer. CSFB or any other Lender may make commercial loans or other loans at
rates of interest at, above or below the Prime Rate.
"Pro Forma Basis" means, with respect to any calculations made to
determine compliance with any of the covenants contained in subsection 7.6 on a
"Pro Forma Basis" for any four-Fiscal Quarter period, whether in connection with
any proposed Permitted Acquisition under subsection 7.7(vi) or as otherwise
provided in subsection 7.6D, that such calculations shall in each case be made:
(i) using the historical financial statements with respect to
such period for (a) the business or property to be acquired in connection
with any such proposed Permitted Acquisition and/or (b) any business or
property acquired in connection with any Permitted Acquisition actually
consummated during such period;
(ii) using the consolidated financial statements of Holdings and
its Subsidiaries with respect to such period, which financial statements
shall be reformulated (a) as if all Permitted Acquisitions referred to in
clause (i) above had been consummated at the beginning of such period, (b)
as if any such proposed Subordinated Indebtedness and/or any other
Indebtedness or other liabilities incurred in connection with any Permitted
Acquisitions referred to in clause (i) above had been incurred (and the
proceeds thereof had been applied as actually applied or proposed to be
applied) at the beginning of such period, and (c) assuming that any
Indebtedness referred to in clause (ii)(b) above that bears interest on a
floating-rate basis had borne interest during any portion of such period
occurring prior to the actual incurrence thereof at the weighted average of
the interest rates applicable to outstanding Loans during such period;
(iii) after giving effect to any other pro forma adjustments
arising out of events which (a) are directly attributable to any Permitted
Acquisitions referred to in clause (i) above or the incurrence of any
Indebtedness referred to in (ii)(b) above, (b) are factually supportable,
and (c) are expected to have a continuing impact, in each case determined
on a basis consistent with Article 11 of Regulation S-X of the Securities
Act (including cost savings resulting from head count reductions, closures
of facilities and similar restructuring charges), which pro forma
adjustments shall be certified by the chief
28
financial officer of Company in the Officer's Certificate required to be
delivered in connection with such proposed Permitted Acquisition or the
incurrence of such proposed Subordinated Indebtedness or otherwise pursuant
to subsection 7.6D, as the case may be; and
(iv) otherwise in conformity with certain procedures to be agreed
upon between Administrative Agent and Company.
"Pro Rata Share" means with respect to all payments, computations and
all other matters hereunder, including any matters relating to the Revolving
Loan Commitment or the Revolving Loans of any Lender or any Letters of Credit
issued or participations therein purchased by any Lender or any participations
in any Swing Line Loans purchased by any Lender, the percentage obtained by
dividing (x) the Revolving Loan Exposure of that Lender by (y) the aggregate
-------- --
Revolving Loan Exposure of all Lenders, in any case as the applicable percentage
may be adjusted by assignments permitted pursuant to subsection 11.1. The Pro
Rata Share of each Lender as of the Effective Date is set forth opposite the
name of that Lender in Schedule 2.1 annexed hereto.
------------
"PTO" means the United States Patent and Trademark Office or any
successor or substitute office in which filings are necessary or, in the opinion
of Administrative Agent, desirable in order to create or perfect Liens on any IP
Collateral.
"Purchasing Lender" has the meaning assigned to that term in
subsection 4.2V.
"Recapitalization Agreement" means that certain Recapitalization
Agreement by and among Holdings, MDCP and the other parties thereto, dated as of
July 28, 1998, in the form delivered to Administrative Agent and Lenders on the
Closing Date and as such agreement may be amended from time to time thereafter
to the extent permitted under subsection 7.15A.
"Recorded Leasehold Interest" means a Leasehold Property with respect
to which a Record Document (as hereinafter defined) has been recorded in all
places necessary or desirable, in Administrative Agent's reasonable judgment, to
give constructive notice of such Leasehold Property to third-party purchasers
and encumbrancers of the affected real property. For purposes of this
definition, the term "Record Document" means, with respect to any Leasehold
Property, (a) the lease evidencing such Leasehold Property or a memorandum
thereof, executed and acknowledged by the owner of the affected real property,
as lessor, or (b) if such Leasehold Property was acquired or subleased from the
holder of a Recorded Leasehold Interest, the applicable assignment or sublease
document, executed and acknowledged by such holder, in each case in form
sufficient to give such constructive notice upon recordation and otherwise in
form reasonably satisfactory to Administrative Agent.
29
"Real Property Asset" means, at any time of determination, any
interest in land, buildings, improvements, and fixtures attached thereto or used
in the operation thereof, in each case that is then owned or leased (as lessee)
by any Loan Party.
"Reference Lenders" means CSFB and LaSalle Bank National Association.
"Refunded Swing Line Loans" has the meaning assigned to that term in
subsection 2.1A(iii).
"Register" has the meaning assigned to that term in subsection 2.1D.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Reimbursement Date" has the meaning assigned to that term in
subsection 3.3B.
"Related Agreements" means, collectively, the Effective Date
Acquisition Agreements, the Holdings Discount Debenture Indenture and the Senior
Note Indenture.
"Release" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including the abandonment or disposal of any barrels, containers or
other closed receptacles containing any Hazardous Materials), including the
movement of any Hazardous Materials through the air, soil, surface water or
groundwater.
"Requisite Lenders" means Lenders having or holding more than 50% of
the aggregate Revolving Loan Exposure of all Lenders.
"Reserve Adjusted Eurodollar Rate" means, with respect to each day
during each Interest Period pertaining to a Eurodollar Rate Loan, a rate per
annum determined for such day in accordance with the following formula:
Eurodollar Base Rate
---------------------------------
1.00 - Eurocurrency Reserve Requirements
"Restricted Payment" means (i) any dividend or other distribution,
direct or indirect, on account of any shares of any class of stock of Company or
Holdings now or hereafter outstanding, except a dividend payable solely in
shares of that class of stock to the holders of that class, (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of stock of Company or
Holdings now or hereafter outstanding, (iii) any payment made to retire, or to
obtain the
30
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock of Company or Holdings now or hereafter
outstanding, (iv) any payment or prepayment of principal of, premium, if any, or
interest on, or redemption, purchase, retirement, defeasance (including in-
substance or legal defeasance), sinking fund or similar payment with respect to,
any Subordinated Indebtedness or any Indebtedness evidenced by the Existing
Seller Notes, the Holdings Discount Debentures or the Senior Notes, and (v) any
payment, direct or indirect, in respect of any Management Fees.
"Revolving Loan Commitment" means the commitment of a Lender to make
Revolving Loans to Company pursuant to subsection 2.1A(ii), and "Revolving Loan
Commitments" means such commitments of all Lenders in the aggregate.
"Revolving Loan Commitment Termination Date" means the 5th anniversary
of the Effective Date.
"Revolving Loan Exposure" means, with respect to any Lender as of any
date of determination (i) prior to the termination of the Revolving Loan
Commitments, that Lender's Revolving Loan Commitment and (ii) after the
termination of the Revolving Loan Commitments, the sum of (a) the aggregate
outstanding principal amount of the Revolving Loans of that Lender plus (b) in
----
the event that Lender is an Issuing Lender, the aggregate Letter of Credit Usage
in respect of all Letters of Credit issued by that Lender (in each case net of
any participations purchased by other Lenders in such Letters of Credit or any
unreimbursed drawings thereunder) plus (c) the aggregate amount of all
----
participations purchased by that Lender in any outstanding Letters of Credit or
any unreimbursed drawings under any Letters of Credit plus (d) in the case of
----
Swing Line Lender, the aggregate outstanding principal amount of all Swing Line
Loans (net of any participations therein purchased by other Lenders) plus (e)
----
the aggregate amount of all participations purchased by that Lender in any
outstanding Swing Line Loans.
"Revolving Loans" means (i) the Loans made by Lenders to Company
pursuant to subsection 2.1A(iv) of the Existing Credit Agreement which remain
outstanding as of the Effective Date and (ii) any Loans made by Lenders to
Company pursuant to subsection 2.1A(ii) of this Agreement.
"Revolving Notes" means (i) the promissory notes of Company issued
pursuant to subsection 2.1E(i)(d) of the Existing Credit Agreement on the
Closing Date or subsection 2.1E(i)(d) of this Agreement on the Effective Date,
as the case may be, and (ii) any promissory notes issued by Company pursuant to
the last sentence of subsection 11.1B(i) in connection with assignments of the
Revolving Loan Commitments and Revolving Loans of any Lenders, in each case
substantially in the form of Exhibit VII annexed hereto, as they may be amended,
-----------
supplemented or otherwise modified from time to time.
31
"Scheduled Post-Effective Date Mortgaged Property" has the meaning
assigned to that term in subsection 6.9.
"Securities" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any profit-
sharing agreement or arrangement, options, warrants, bonds, debentures, notes,
or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, and any successor statute.
"Selling Shareholder Warrant" means the Contingent Stock Purchase
Warrant issued to CHSLLC pursuant to Section 9.03(a) of the Recapitalization
Agreement, in the form of Exhibit D annexed to the Recapitalization Agreement
and as such Contingent Stock Purchase Warrant may be amended from time to time
after the Closing Date to the extent permitted under subsection 7.14A.
"Selling Lender" has the meaning assigned to that term in subsection
4.2V.
"Senior Note Indenture" means the indenture pursuant to which the
Senior Notes are issued, as such indenture may be amended from time to time to
the extent permitted under subsection 7.15B.
"Senior Notes" means the $130,000,000 aggregate principal amount of
12% Senior Notes due 2009 of Company issued pursuant to the Senior Note
Indenture.
"Solvent" means, with respect to any Person, that as of the date of
determination both (A) (i) the then fair saleable value of the property of such
Person is (y) greater than the total amount of liabilities (including contingent
liabilities) of such Person and (z) not less than the amount that will be
required to pay the probable liabilities on such Person's then existing debts as
they become absolute and matured considering all financing alternatives and
potential asset sales reasonably available to such Person; (ii) such Person's
capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (iii) such Person does not intend to
incur, or believe (nor should it reasonably believe) that it will incur, debts
beyond its ability to pay such debts as they become due; and (B) such Person is
"solvent" within the meaning given that term and similar terms under applicable
laws relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.
32
"Standby Letter of Credit" means any standby letter of credit or
similar instrument issued for the purpose of supporting (i) Indebtedness of
Company or any of its Subsidiaries in respect of industrial revenue or
development bonds or financings, (ii) workers' compensation liabilities of
Company or any of its Subsidiaries, (iii) the obligations of third party
insurers of Company or any of its Subsidiaries arising by virtue of the laws of
any jurisdiction requiring third party insurers, (iv) obligations with respect
to Capital Leases or Operating Leases of Company or any of its Subsidiaries, and
(v) performance, payment, deposit or surety obligations of Company or any of its
Subsidiaries, in any case if required by law or governmental rule or regulation
or in accordance with custom and practice in the industry; provided that Standby
--------
Letters of Credit may not be issued for the purpose of supporting (a) trade
payables or (b) any Indebtedness constituting "antecedent debt" (as that term is
used in Section 547 of the Bankruptcy Code).
"Stockholders Agreement" means that certain Stockholders Agreement
dated as of the Closing Date by and among Holdings, MDCP, CHSLLC and the Persons
listed on Schedule 1 annexed thereto, in the form delivered to Administrative
Agent and Lenders prior to their execution of this Agreement and as such
agreement may be amended from time to time thereafter to the extent permitted
under subsection 7.15A.
"Subordinated Indebtedness" means (i) the Existing Seller Note
described in clause (ii) of the definition thereof and (ii) any other
Indebtedness of Holdings or Company that is subordinated in right of payment to
the Obligations pursuant to documentation containing interest rates, maturities,
sinking fund or amortization schedules, covenants, defaults, remedies,
subordination provisions and other material terms in form and substance
satisfactory to Administrative Agent.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, limited liability company, association, joint venture or other
business entity of which more than 50% of the total voting power of shares of
stock or other ownership interests entitled (without regard to the occurrence of
any contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof.
"Subsidiary Guarantor" means any Domestic Subsidiary that executes and
delivers a counterpart of the Subsidiary Guaranty on the Closing Date or from
time to time thereafter pursuant to subsection 6.8.
"Subsidiary Guaranty" means the Subsidiary Guaranty executed and
delivered by existing Domestic Subsidiaries on the Closing Date and to be
executed and delivered by
33
additional Domestic Subsidiaries from time to time thereafter in accordance with
subsection 6.8, substantially in the form of Exhibit XX annexed hereto, as such
----------
Subsidiary Guaranty may hereafter be amended, supplemented or otherwise modified
from time to time.
"Subsidiary Pledge Agreement" means each Subsidiary Pledge Agreement
executed and delivered by an existing Subsidiary Guarantor on the Closing Date
or executed and delivered by any additional Subsidiary Guarantor from time to
time thereafter in accordance with subsection 6.8, in each case substantially in
the form of Exhibit XXI annexed hereto, as such Subsidiary Pledge Agreement may
-----------
be amended, supplemented or otherwise modified from time to time, and
"Subsidiary Pledge Agreements" means all such Subsidiary Pledge Agreements,
collectively.
"Subsidiary Security Agreement" means each Subsidiary Security
Agreement executed and delivered by an existing Subsidiary Guarantor on the
Closing Date or executed and delivered by any additional Subsidiary Guarantor
from time to time thereafter in accordance with subsection 6.8, in each case
substantially in the form of Exhibit XXII annexed hereto, as such Subsidiary
------------
Security Agreement may be amended, supplemented or otherwise modified from time
to time, and "Subsidiary Security Agreements" means all such Subsidiary Security
Agreements, collectively.
"Subsidiary Patent and Trademark Security Agreement" means each
Subsidiary Patent and Trademark Security Agreement executed and delivered by an
existing Subsidiary Guarantor on the Closing Date or executed and delivered by
any additional Subsidiary Guarantor from time to time thereafter in accordance
with subsection 6.8, in each case substantially in the form of Exhibit XXIII
-------------
annexed hereto, as such Subsidiary Patent and Trademark Security Agreement may
be amended, supplemented or otherwise modified from time to time, and
"Subsidiary Patent and Trademark Security Agreements" means all such Subsidiary
Patent and Trademark Security Agreements, collectively.
"Swing Line Lender" means CSFB, or any Person serving as a successor
Administrative Agent hereunder, in its capacity as Swing Line Lender hereunder.
"Swing Line Loan Commitment" means the commitment of Swing Line Lender
to make Swing Line Loans to Company pursuant to subsection 2.1A(iii).
"Swing Line Loans" means the Loans made by Swing Line Lender to
Company pursuant to subsection 2.1A(iii).
"Swing Line Note" means (i) the promissory note of Company issued
pursuant to subsection 2.1E(ii) of the Existing Credit Agreement on the Closing
Date or subsection 2.1E(ii) of this Agreement on the Effective Date, as the case
may be, and (ii) any promissory note issued by Company to any successor
Administrative Agent and Swing Line Lender pursuant
34
to the last sentence of subsection 10.5B, in each case substantially in the form
of Exhibit VIII annexed hereto, as it may be amended, supplemented or otherwise
------------
modified from time to time.
"Tax" or "Taxes" means any present or future tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature and whatever called, by
whomsoever, on whomsoever and wherever imposed, levied, collected, withheld or
assessed; provided that "Tax on the overall net income" of a Person shall be
--------
construed as a reference to a tax imposed by the jurisdiction in which that
Person is organized or in which that Person's principal office (and/or, in the
case of a Lender, its lending office) is located or in which that Person
(and/or, in the case of a Lender, its lending office) is deemed to be doing
business on all or part of the net income, profits or gains (whether worldwide,
or only insofar as such income, profits or gains are considered to arise in or
to relate to a particular jurisdiction, or otherwise) of that Person (and/or, in
the case of a Lender, its lending office).
"Tisco" has the meaning assigned to that term in the recitals hereto.
"Tisco Acquisition" has the meaning assigned to that term in the
recitals hereto.
"Tisco Acquisition Agreement" mean that certain Asset Purchase
Agreement, dated as of July 1, 1999, with respect to the Tisco Acquisition by
and among Company, Tisco, CAL Properties and the shareholders of Tisco, as in
effect on the Effective Date.
"Title Company" means, collectively, one or more title insurance
companies reasonably satisfactory to Administrative Agent.
"Total Utilization of Revolving Loan Commitments" means, as at any
date of determination, the sum of (i) the aggregate principal amount of all
outstanding Revolving Loans (other than Revolving Loans made for the purpose of
repaying any Refunded Swing Line Loans or reimbursing the applicable Issuing
Lender for any amount drawn under any Letter of Credit but not yet so applied)
plus (ii) the aggregate principal amount of all outstanding Swing Line Loans
----
plus (iii) the Letter of Credit Usage.
----
"Transaction Costs" means the fees, costs and expenses payable by
Company on or before the Effective Date in connection with the transactions
contemplated by the Loan Documents and the Related Agreements.
"UCC" means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.
"Unreinvested Asset Sale Proceeds" means that portion, if any, of any
Net Asset Sale Proceeds that have not, within 30 days prior to or 180 days after
the date of receipt by Holdings or any of its Subsidiaries of such Net Asset
Sale Proceeds, been invested in advance (in the case of investments during such
30-day period prior to their receipt) or reinvested by
35
Company and its Subsidiaries, in each case through acquisitions of fixed assets
or other income-producing assets to be used in the business of Company and its
Subsidiaries (which assets, if acquired prior to the date of such receipt, shall
be of like kind with the assets disposed of in the applicable Asset Sale), such
reinvestment to be evidenced by an Officer's Certificate, reasonably
satisfactory in form and substance to Administrative Agent, delivered by Company
to Administrative Agent within 180 days after the date of such receipt and
demonstrating in reasonable detail the reinvestment of such Net Asset Sale
Proceeds as aforesaid; provided that, in the event a Potential Event of Default
--------
or an Event of Default shall have occurred and be continuing at the time of
receipt by Holdings or any of its Subsidiaries of any Net Asset Sale Proceeds,
such Net Asset Sale Proceeds shall be deemed to be Unreinvested Asset Sale
Proceeds at the time of receipt thereof.
"Unreinvested Insurance/Condemnation Proceeds" means that portion, if
any, of any Net Insurance/Condemnation Proceeds that have not, within 180 days
after the date of receipt by Holdings or any of its Subsidiaries of such Net
Insurance/Condemnation Proceeds, been either (i) used (or committed to be used
pursuant to a written construction contract or similar agreement) by Company and
its Subsidiaries to repair or replace the assets in respect of which such Net
Insurance/Condemnation Proceeds were received or (ii) otherwise reinvested by
Company and its Subsidiaries in fixed assets or other income-producing assets to
be used in the business of Company and its Subsidiaries, such repair or
replacement or such reinvestment to be evidenced by an Officer's Certificate,
satisfactory in form and substance to Administrative Agent, delivered by Company
to Administrative Agent prior to the expiration of such 180-day period and
demonstrating in reasonable detail such repair or replacement or the
reinvestment of such Net Insurance/Condemnation Proceeds as aforesaid; provided
--------
that, in the event a Potential Event of Default or an Event of Default shall
have occurred and be continuing at the time of receipt by Holdings or any of its
Subsidiaries of any Net Insurance/Condemnation Proceeds, such Net
Insurance/Condemnation Proceeds shall be deemed to be Unreinvested
Insurance/Condemnation Proceeds at the time of receipt thereof.
"Year 2000 Compliant" means that by October 31, 1999 all computer
systems and applications owned or controlled by Holdings or any of its
Subsidiaries that are material to the business and operations of Holdings and
its Subsidiaries will be able to properly perform date-sensitive functions for
all dates before and after January 1, 2000, except to the extent that a failure
to do so could not reasonably be expected to have a Material Adverse Effect.
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under
------------------------------------------------------------------------
Agreement.
---------
Except as otherwise expressly provided in this Agreement, all accounting
terms not otherwise defined herein shall have the meanings assigned to them in
conformity with GAAP. Financial statements and other information required to be
delivered by Company to Lenders pursuant to clauses (i), (ii), (iii) and (xiii)
of subsection 6.1 shall be prepared in accordance with GAAP as in effect at the
time of such preparation (and delivered together with the reconciliation
36
statements provided for in subsection 6.1(v)). Calculations in connection with
the definitions, covenants and other provisions of this Agreement shall utilize
accounting principles and policies in conformity with those used to prepare the
financial statements referred to in subsection 5.3.
1.3 Other Definitional Provisions and Rules of Construction.
-------------------------------------------------------
A. Any of the terms defined herein may, unless the context
otherwise requires, be used in the singular or the plural, depending on the
reference.
B. References to "Sections" and "subsections" shall be to Sections
and subsections, respectively, of this Agreement unless otherwise specifically
provided.
C. The use in any of the Loan Documents of the word "include" or
"including", when following any general statement, term or matter, shall not be
construed to limit such statement, term or matter to the specific items or
matters set forth immediately following such word or to similar items or
matters, whether or not nonlimiting language (such as "without limitation" or
"but not limited to" or words of similar import) is used with reference thereto,
but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter.
Section 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 Commitments; Making of Loans; the Register; Notes.
-------------------------------------------------
A. Commitments. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of Company and
Holdings herein set forth, each Lender hereby severally agrees to make the
Revolving Loans described in subsection 2.1A(ii) and Swing Line Lender hereby
agrees to make the Loans described in subsection 2.1A(iii).
(i) Existing Revolving Loans. Company acknowledges and
------------------------
confirms that each Existing Lender holds Revolving Loans under the Existing
Credit Agreement in the respective principal amounts outstanding as of the
Effective Date set forth opposite its name on Schedule 2.1 annexed hereto
------------
(such Revolving Loans, the "Existing Revolving Loans"). Company hereby
represents, warrants, agrees, covenants and (1) reaffirms that it is not
aware of any defense, set off, claim or counterclaim against any Agent or
Lender in regard to its Obligations in respect of such Existing Revolving
Loans and (2) reaffirms its obligation to pay such Existing Revolving Loans
in accordance with the terms and conditions of this Agreement and the other
Loan Documents. Based on the foregoing, (A) Company and each Lender agree
that any amounts owed (whether or not presently due and payable, and
including all interest and fees accrued to the Effective Date (which shall
be payable on the next Interest Payment Date with respect to the Existing
Revolving Loans to which such interest relates)) by Company to Existing
Lenders or in respect of
37
the Existing Revolving Loans, shall, as of the Effective Date, be
maintained as Revolving Loans hereunder. Amounts repaid or prepaid in
respect of Existing Revolving Loans may be repaid and reborrowed pursuant
to Section 2.1A(ii) below to but excluding the Revolving Loan Commitment
Termination Date.
(ii) Revolving Loans. Each Lender severally agrees, subject to
---------------
the limitations set forth below with respect to the maximum amount of
Revolving Loans permitted to be outstanding from time to time, to lend to
Company from time to time during the period from the Effective Date to but
excluding the Revolving Loan Commitment Termination Date an aggregate
amount not exceeding its Pro Rata Share of the aggregate amount of the
Revolving Loan Commitments to be used for the purposes identified in
subsection 2.5B. As of the Effective Date, the amount of each Lender's
Revolving Loan Commitment is set forth opposite its name on Schedule 2.1
------------
annexed hereto and the aggregate amount of the Revolving Loan Commitments
is $40,000,000; provided that the Revolving Loan Commitments of Lenders
--------
shall be adjusted to give effect to any assignments of the Revolving Loan
Commitments pursuant to subsection 11.1B. Each Lender's Revolving Loan
Commitment shall expire on the Revolving Loan Commitment Termination Date
and all Revolving Loans and all other amounts owed hereunder with respect
to the Revolving Loans and the Revolving Loan Commitments shall be paid in
full no later than that date; provided that each Lender's Revolving Loan
--------
Commitment shall expire immediately and without further action on July 28,
1999 if the Effective Date has not occurred on or before that date. Amounts
borrowed under this subsection 2.1A(ii) may be repaid and reborrowed to but
excluding the Revolving Loan Commitment Termination Date.
Anything contained in this Agreement to the contrary notwithstanding, in no
event shall the Total Utilization of Revolving Loan Commitments at any time
exceed the Revolving Loan Commitments then in effect.
(iii) Swing Line Loans. Swing Line Lender hereby agrees,
----------------
subject to the limitations set forth below with respect to the maximum
amount of Swing Line Loans permitted to be outstanding from time to time,
to make a portion of the Revolving Loan Commitments available to Company
from time to time during the period from the Effective Date to but
excluding the Revolving Loan Commitment Termination Date by making Swing
Line Loans to Company in an aggregate amount not exceeding the amount of
the Swing Line Loan Commitment to be used for the purposes identified in
subsection 2.5B, notwithstanding the fact that such Swing Line Loans, when
aggregated with Swing Line Lender's outstanding Revolving Loans and Swing
Line Lender's Pro Rata Share of the Letter of Credit Usage then in effect,
may exceed Swing Line Lender's Revolving Loan Commitment. The original
amount of the Swing Line Loan Commitment is $5,000,000; provided that the
--------
amount of the Swing Line Loan Commitment is subject to reduction as
provided in clause (b) of the next paragraph. The Swing Line Loan
Commitment shall expire on the Revolving Loan Commitment Termination Date
and all
38
Swing Line Loans and all other amounts owed hereunder with respect
to the Swing Line Loans shall be paid in full no later than that date;
provided that the Swing Line Loan Commitment shall expire immediately and
--------
without further action on July 28, 1999 if the Effective Date has not
occurred on or before that date. Amounts borrowed under this subsection
2.1A(iii) may be repaid and reborrowed to but excluding the Revolving Loan
Commitment Termination Date. Anything contained herein to the contrary
notwithstanding, the Swing Line Loans and the Swing Line Loan Commitment
shall be subject to the following limitations:
(a) in no event shall the Total Utilization of Revolving Loan
Commitments at any time exceed the Revolving Loan Commitments then in
effect;
(b) any reduction of the Revolving Loan Commitments which
reduces the aggregate Revolving Loan Commitments to an amount less
than the then current amount of the Swing Line Loan Commitment shall
result in an automatic corresponding reduction of the Swing Line Loan
Commitment such that the amount thereof equals the amount of the
Revolving Loan Commitments, as so reduced, without any further action
on the part of Company, Administrative Agent or Swing Line Lender; and
(c) Swing Line Lender shall have no obligation to make any
Swing Line Loans during any period when a Lender Default exists,
unless Swing Line Lender has entered into arrangements satisfactory to
it and Company to eliminate Swing Line Lender's risk with respect to
the Defaulting Lender, including by cash collateralizing such
Defaulting Lender's Pro Rata Share of the Revolving Loans that may be
required to be made to refund the applicable Swing Line Loan as
contemplated by the immediately following paragraph.
With respect to any Swing Line Loans which have not been voluntarily
prepaid by Company pursuant to subsection 2.4A(i), Swing Line Lender
may, at any time in its sole and absolute discretion, deliver to
Administrative Agent (with a copy to Company), no later than 10:00
A.M. (New York City time) on the first Business Day in advance of the
proposed Funding Date, a notice (which shall be deemed to be a Notice
of Borrowing given by Company) requesting Lenders to make Revolving
Loans that are Base Rate Loans on such Funding Date in an amount equal
to the amount of such Swing Line Loans (the "Refunded Swing Line
Loans") outstanding on the date such notice is given which Swing Line
Lender requests Lenders to prepay. Anything contained in this
Agreement to the contrary notwithstanding, (i) the proceeds of such
Revolving Loans made by Lenders other than Swing Line Lender shall be
immediately delivered by Administrative Agent to Swing Line Lender
(and not to Company) and applied to repay a corresponding
39
portion of the Refunded Swing Line Loans and (ii) on the day such
Revolving Loans are made, Swing Line Lender's Pro Rata Share of the
Refunded Swing Line Loans shall be deemed to be paid with the proceeds
of a Revolving Loan made by Swing Line Lender, and such portion of the
Swing Line Loans deemed to be so paid shall no longer be outstanding
as Swing Line Loans and shall no longer be due under the Swing Line
Note of Swing Line Lender but shall instead constitute part of Swing
Line Lender's outstanding Revolving Loans and shall be due under the
Revolving Note of Swing Line Lender. Company hereby authorizes
Administrative Agent and Swing Line Lender to charge Company's
accounts with Administrative Agent and Swing Line Lender (up to the
amount available in each such account) in order to immediately pay
Swing Line Lender the amount of the Refunded Swing Line Loans to the
extent the proceeds of such Revolving Loans made by Lenders, including
the Revolving Loan deemed to be made by Swing Line Lender, are not
sufficient to repay in full the Refunded Swing Line Loans. If any
portion of any such amount paid (or deemed to be paid) to Swing Line
Lender should be recovered by or on behalf of Company from Swing Line
Lender in bankruptcy, by assignment for the benefit of creditors or
otherwise, the loss of the amount so recovered shall be ratably shared
among all Lenders in the manner contemplated by subsection 11.5.
If for any reason the Revolving Loan Commitments are terminated at a
time when any Swing Line Loans are outstanding, each Lender shall be
deemed to, and hereby agrees to, have purchased a participation in
such outstanding Swing Line Loans in an amount equal to its Pro Rata
Share (calculated immediately prior to such termination of the
Revolving Loan Commitments) of the unpaid amount of such Swing Line
Loans together with accrued interest thereon. Upon one Business Day's
notice from Swing Line Lender, each Lender shall deliver to Swing Line
Lender an amount equal to its respective participation in same day
funds at the Funding and Payment Office. In order to further evidence
such participation (and without prejudice to the effectiveness of the
participation provisions set forth above), each Lender agrees to enter
into a separate participation agreement at the request of Swing Line
Lender in form and substance reasonably satisfactory to Swing Line
Lender. In the event any Lender fails to make available to Swing Line
Lender the amount of such Lender's participation as provided in this
paragraph, Swing Line Lender shall be entitled to recover such amount
on demand from such Lender together with interest thereon at the rate
customarily used by Swing Line Lender for the correction of errors
among banks for three Business Days and thereafter at the Base Rate.
In the event Swing Line Lender receives a payment of any amount in
which other Lenders have purchased participations as provided in this
paragraph, Swing Line Lender shall promptly distribute to each such
other Lender its Pro Rata Share of such payment.
40
Anything contained herein to the contrary notwithstanding, each
Lender's obligation to make Revolving Loans for the purpose of
repaying any Refunded Swing Line Loans pursuant to the second
preceding paragraph and each Lender's obligation to purchase a
participation in any unpaid Swing Line Loans pursuant to the
immediately preceding paragraph shall be absolute and unconditional
and shall not be affected by any circumstance, including (a) any set-
off, counterclaim, recoupment, defense or other right which such
Lender may have against Swing Line Lender, Company or any other Person
for any reason whatsoever; (b) the occurrence or continuation of an
Event of Default or a Potential Event of Default; (c) any adverse
change in the business, operations, properties, assets, condition
(financial or otherwise) or prospects of Company or any of its
Subsidiaries; (d) any breach of this Agreement or any other Loan
Document by any party thereto; or (e) any other circumstance,
happening or event whatsoever, whether or not similar to any of the
foregoing; provided that such obligations of each Lender are subject
--------
to the condition that (X) Swing Line Lender believed in good faith
that all conditions under Section 4 to the making of the applicable
Refunded Swing Line Loans or other unpaid Swing Line Loans, as the
case may be, were satisfied at the time such Refunded Swing Line Loans
or unpaid Swing Line Loans were made or (Y) the satisfaction of any
such condition not satisfied had been waived in accordance with
subsection 11.6 prior to or at the time such Refunded Swing Line Loans
or other unpaid Swing Line Loans were made.
B. Borrowing Mechanics. Revolving Loans made on any Funding Date
(other than Revolving Loans made pursuant to a request by Swing Line Lender
pursuant to subsection 2.1A(iii) for the purpose of repaying any Refunded Swing
Line Loans or Revolving Loans made pursuant to subsection 3.3B for the purpose
of reimbursing any Issuing Lender for the amount of a drawing under a Letter of
Credit issued by it) shall be in an aggregate minimum amount of $1,000,000 and
integral multiples of $100,000 in excess of that amount; provided that Revolving
--------
Loans made on any Funding Date as Eurodollar Rate Loans with a particular
Interest Period shall be in an aggregate minimum amount of $1,000,000 and
integral multiples of $100,000 in excess of that amount. Swing Line Loans made
on any Funding Date shall be in an aggregate minimum amount of $100,000 and
integral multiples of $50,000 in excess of that amount. Whenever Company
desires that Lenders make Revolving Loans it shall deliver to Administrative
Agent a Notice of Borrowing no later than 10:00 A.M. (New York City time) at
least three Business Days in advance of the proposed Funding Date (in the case
of a Eurodollar Rate Loan) or at least one Business Day in advance of the
proposed Funding Date (in the case of a Base Rate Loan). Whenever Company
desires that Swing Line Lender make a Swing Line Loan, it shall deliver to
Administrative Agent a Notice of Borrowing no later than 12:00 Noon (New York
City time) on the proposed Funding Date. The Notice of Borrowing shall specify
(i) the proposed Funding Date (which shall be a Business Day), (ii) the
amount(s) and type(s) of Loans requested, (iii) in the case of Revolving Loans,
whether such Loans shall be Base Rate Loans or (in the case of Revolving Loans
made after the Effective Date) Eurodollar Rate Loans, and (iv) in the case of
any Revolving Loans requested to be made after the Effective Date as
41
Eurodollar Rate Loans, the initial Interest Period requested therefor. Revolving
Loans may be continued as or converted into Base Rate Loans and Eurodollar Rate
Loans in the manner provided in subsection 2.2D. In lieu of delivering the
above-described Notice of Borrowing, Company may give Administrative Agent
telephonic notice by the required time of any proposed borrowing under this
subsection 2.1B; provided that such notice shall be promptly confirmed in
--------
writing by delivery of a Notice of Borrowing to Administrative Agent on or
before the applicable Funding Date.
Neither Administrative Agent nor any Lender shall incur any liability
to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to borrow on behalf of Company or
for otherwise acting in good faith under this subsection 2.1B, and upon funding
of Loans by Lenders in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected Loans hereunder.
Company shall notify Administrative Agent prior to the funding of any
Loans in the event that any of the matters to which Company is required to
certify in the applicable Notice of Borrowing is no longer true and correct as
of the applicable Funding Date, and the acceptance by Company of the proceeds of
any Loans shall constitute a re-certification by Company, as of the applicable
Funding Date, as to the matters to which Company is required to certify in the
applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Borrowing for a Eurodollar Rate Loan (or telephonic notice in lieu
thereof) shall be irrevocable on and after the related Interest Rate
Determination Date, and Company shall be bound to make a borrowing in accordance
therewith.
C. Disbursement of Funds. All Revolving Loans under this Agreement
shall be made by Lenders simultaneously and proportionately to their respective
Pro Rata Shares, it being understood that no Lender shall be responsible for any
default by any other Lender in that other Lender's obligation to make a Loan
requested hereunder nor shall the Commitment of any Lender to make the
particular type of Loan requested be increased or decreased as a result of a
default by any other Lender in that other Lender's obligation to make a Loan
requested hereunder. Promptly after receipt by Administrative Agent of a Notice
of Borrowing pursuant to subsection 2.1B (or telephonic notice in lieu thereof),
Administrative Agent shall notify each Lender or Swing Line Lender, as the case
may be, of the proposed borrowing.
Each Lender shall make the amount of its Loan available to
Administrative Agent not later than 12:00 Noon (New York City time) on the
applicable Funding Date, and Swing Line Lender shall make the amount of its
Swing Line Loan available to Administrative Agent not later than 2:00 P.M.(New
York City time) on the applicable Funding Date, in each case in same day funds
in Dollars, at the Funding and Payment Office. Except as provided in subsection
2.1A(iii) or subsection 3.3B with respect to Revolving Loans used to repay
Refunded Swing Line Loans
42
or to reimburse any Issuing Lender for the amount of a drawing under a Letter of
Credit issued by it, upon satisfaction or waiver of the conditions precedent
specified in subsections 4.2 (in the case of Loans made on the Effective Date)
and 4.3 (in the case of all Loans), Administrative Agent shall make the proceeds
of such Loans available to Company on the applicable Funding Date by causing an
amount of same day funds in Dollars equal to the proceeds of all such Loans
received by Administrative Agent from Lenders or Swing Line Lender, as the case
may be, to be credited to the account of Company at the Funding and Payment
Office.
Unless Administrative Agent shall have been notified by any Lender
prior to the Funding Date for any Loans that such Lender does not intend to make
available to Administrative Agent the amount of such Lender's Loan requested on
such Funding Date, Administrative Agent may assume that such Lender has made
such amount available to Administrative Agent on such Funding Date and
Administrative Agent may, in its sole discretion, but shall not be obligated to,
make available to Company a corresponding amount on such Funding Date. If such
corresponding amount is not in fact made available to Administrative Agent by
such Lender, Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon,
for each day from such Funding Date until the date such amount is paid to
Administrative Agent, at the customary rate set by Administrative Agent for the
correction of errors among banks for three Business Days and thereafter at the
Base Rate. If such Lender does not pay such corresponding amount forthwith upon
Administrative Agent's demand therefor, Administrative Agent shall promptly
notify Company and Company shall immediately pay such corresponding amount to
Administrative Agent together with interest thereon, for each day from such
Funding Date until the date such amount is paid to Administrative Agent, at the
rate payable under this Agreement for Base Rate Loans. Nothing in this
subsection 2.1C shall be deemed to relieve any Lender from its obligation to
fulfill its Commitments hereunder or to prejudice any rights that Company may
have against any Lender as a result of any default by such Lender hereunder.
D. The Register.
(i) Administrative Agent shall maintain, at its address
referred to in subsection 11.8, a register for the recordation of the names
and addresses of Lenders and the Commitments and Loans of each Lender from
time to time (the "Register"). The Register shall be available for
inspection by Company or any Lender at any reasonable time and from time to
time upon reasonable prior notice.
(ii) Administrative Agent shall record in the Register the
Commitments and the Loans from time to time of each Lender and each
repayment or prepayment in respect of the principal amount of the Loans of
each Lender. Any such recordation shall be conclusive and binding on
Company and each Lender, absent manifest error; provided that failure to
--------
make any such recordation, or any error in such recordation, shall not
affect any Lender's Commitments or Company's Obligations in respect of any
applicable Loans.
43
(iii) Each Lender shall record on its internal records (including
the Notes held by such Lender) the amount of each Loan made by it and each
payment in respect thereof. Any such recordation shall be conclusive and
binding on Company, absent manifest error; provided that failure to make
--------
any such recordation, or any error in such recordation, shall not affect
any Lender's Commitments or Company's Obligations in respect of any
applicable Loans; and provided, further that in the event of any
-------- -------
inconsistency between the Register and any Lender's records, the
recordations in the Register shall govern.
(iv) Company, Administrative Agent and Lenders shall deem and
treat the Persons listed as Lenders in the Register as the holders and
owners of the corresponding Commitments and Loans listed therein for all
purposes hereof, and no assignment or transfer of any such Commitment or
Loan shall be effective, in each case unless and until an Assignment
Agreement effecting the assignment or transfer thereof shall have been
accepted by Administrative Agent and recorded in the Register as provided
in subsection 11.1B(ii). Prior to such recordation, all amounts owed with
respect to the applicable Commitment or Loan shall be owed to the Lender
listed in the Register as the owner thereof, and any request, authority or
consent of any Person who, at the time of making such request or giving
such authority or consent, is listed in the Register as a Lender shall be
conclusive and binding on any subsequent holder, assignee or transferee of
the corresponding Commitments or Loans.
(v) Company hereby designates CSFB to serve as Company's agent
solely for purposes of maintaining the Register as provided in this
subsection 2.1D, and Company hereby agrees that, to the extent CSFB serves
in such capacity, CSFB and its officers, directors, employees, agents and
affiliates shall constitute Indemnitees for all purposes under subsection
11.3.
E. Optional Notes. If so requested by any Lender by written notice
to Company (with a copy to Administrative Agent) at least two Business Days
prior to the Effective Date or at any time thereafter, Company shall execute and
deliver to such Lender (and/or, if applicable and if so specified in such
notice, to any Person who is an assignee of such Lender pursuant to subsection
11.1) on the Effective Date (or, if such notice is delivered after the Effective
Date, promptly after Company's receipt of such notice) a promissory note or
promissory notes to evidence such Lender's Revolving Loans or Swing Line Loans,
substantially in the form of Exhibit VII or Exhibit VIII annexed hereto,
----------- ------------
respectively, with appropriate insertions.
2.2 Interest on the Loans.
---------------------
A. Rate of Interest. Subject to the provisions of subsections 2.6
and 2.7, each Revolving Loan shall bear interest on the unpaid principal amount
thereof from the date made through maturity (whether by acceleration or
otherwise) at a rate determined by reference
44
to the Base Rate or the Reserve Adjusted Eurodollar Rate; provided that any
--------
Revolving Loans made on the Effective Date shall initially be made as Base Rate
Loans. Subject to the provisions of subsection 2.7, each Swing Line Loan shall
bear interest on the unpaid principal amount thereof from the date made through
maturity (whether by acceleration or otherwise) at a rate determined by
reference to the Base Rate. The applicable basis for determining the rate of
interest with respect to any Revolving Loan may be changed from time to time
pursuant to subsection 2.2D. If on any day a Revolving Loan is outstanding with
respect to which notice has not been delivered to Administrative Agent in
accordance with the terms of this Agreement specifying the applicable basis for
determining the rate of interest, then for that day that Loan shall bear
interest determined by reference to the Base Rate.
(i) Subject to the provisions of subsections 2.2E and 2.7, the
Revolving Loans shall bear interest through maturity as follows:
(a) if a Base Rate Loan, then at the sum of the Base Rate plus
the Applicable Base Rate Margin; or
(b) if a Eurodollar Rate Loan, then at the sum of the Reserve
Adjusted Eurodollar Rate plus the Applicable Eurodollar Rate Margin.
----
(ii) Subject to the provisions of subsections 2.2E and 2.7, the
Swing Line Loans shall bear interest through maturity at the sum of the
Base Rate plus the Applicable Base Rate Margin for Revolving Loans.
----
B. Interest Periods. In connection with each Eurodollar Rate Loan,
Company may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each an
"Interest Period") to be applicable to such Loan, which Interest Period shall
be, at Company's option, either a one, two, three or six month period; provided
--------
that:
(i) the initial Interest Period for any Eurodollar Rate Loan
shall commence on the Funding Date in respect of such Loan, in the case of
a Loan initially made as a Eurodollar Rate Loan, or on the date specified
in the applicable Notice of Conversion/Continuation, in the case of a Loan
converted to a Eurodollar Rate Loan;
(ii) in the case of immediately successive Interest Periods
applicable to a Eurodollar Rate Loan continued as such pursuant to a Notice
of Conversion/Continuation, each successive Interest Period shall commence
on the day on which the next preceding Interest Period expires;
(iii) if an Interest Period would otherwise expire on a day that
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 that is not a
45
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;
(iv) no Interest Period with respect to any portion of the
Revolving Loans shall extend beyond the Revolving Loan Commitment
Termination Date;
(v) any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall, subject to clause (v) of this subsection 2.2B, end on the last
Business Day of a calendar month;
(vi) Company may not select an Interest Period of longer than
one month prior to the end of the Initial Syndication Period;
(vii) during the Initial Syndication Period, there shall be no
more than one Interest Period outstanding at any time with respect to the
Revolving Loans, individually, and thereafter there shall be no more than a
total of ten Interest Periods outstanding at any time with respect to the
Revolving Loans, collectively; and
(viii)in the event Company fails to specify an Interest Period
for any Eurodollar Rate Loan in the applicable Notice of Borrowing or
Notice of Conversion/Continuation, Company shall be deemed to have selected
an Interest Period of one month.
C. Interest Payments. Subject to the provisions of subsection 2.2E,
interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity); provided that in the event any Swing Line Loans or any Revolving
--------
Loans that are Base Rate Loans are prepaid pursuant to subsection 2.4A(i),
interest accrued on such Swing Line Loans or Revolving Loans through the date of
such prepayment shall be payable on the next succeeding Interest Payment Date
applicable to Base Rate Loans (or, if earlier, at final maturity).
D. Conversion or Continuation. Subject to the provisions of
subsection 2.6, Company shall have the option (i) to convert at any time all or
any part of its outstanding Revolving Loans equal to $1,000,000 and integral
multiples of $100,000 in excess of that amount from Loans bearing interest at a
rate determined by reference to one basis to Loans bearing interest at a rate
determined by reference to an alternative basis or (ii) upon the expiration of
any Interest Period applicable to a Eurodollar Rate Loan, to continue all or any
portion of such Loan equal to $1,000,000 and integral multiples of $100,000 in
excess of that amount as a Eurodollar Rate Loan; provided, however, that a
--------- -------
Eurodollar Rate Loan may only be converted into a Base Rate Loan on the
expiration date of an Interest Period applicable thereto.
46
Company shall deliver a Notice of Conversion/Continuation to
Administrative Agent no later than 10:00 A.M. (New York City time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan) and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan). A Notice of Conversion/Continuation
shall specify (i) the proposed conversion/continuation date (which shall be a
Business Day), (ii) the amount and type of the Loan to be converted/continued,
(iii) the nature of the proposed conversion/continuation, (iv) in the case of a
conversion to, or a continuation of, a Eurodollar Rate Loan, the requested
Interest Period, and (v) in the case of a conversion to, or a continuation of, a
Eurodollar Rate Loan, that no Potential Event of Default or Event of Default has
occurred and is continuing. In lieu of delivering the above-described Notice of
Conversion/Continuation, Company may give Administrative Agent telephonic notice
by the required time of any proposed conversion/continuation under this
subsection 2.2D; provided that such notice shall be promptly confirmed in
--------
writing by delivery of a Notice of Conversion/Continuation to Administrative
Agent on or before the proposed conversion/continuation date. Upon receipt of
written or telephonic notice of any proposed conversion/continuation under this
subsection 2.2D, Administrative Agent shall promptly transmit such notice by
telefacsimile or telephone to each Lender.
Neither Administrative Agent nor any Lender shall incur any liability
to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to act on behalf of Company or for
otherwise acting in good faith under this subsection 2.2D, and upon conversion
or continuation of the applicable basis for determining the interest rate with
respect to any Loans in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected a conversion or continuation, as
the case may be, hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Conversion/Continuation for conversion to, or continuation of, a
Eurodollar Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable
on and after the related Interest Rate Determination Date, and Company shall be
bound to effect a conversion or continuation in accordance therewith.
E. Post-Default Interest. Upon the occurrence and during the
continuation of any Event of Default, the outstanding principal amount of all
Loans and, to the extent permitted by applicable law, any interest payments
thereon not paid when due and any fees and other amounts then due and payable
hereunder, shall thereafter bear interest (including post-petition interest in
any proceeding under the Bankruptcy Code or other applicable bankruptcy laws)
payable upon demand at a rate that is 2% per annum in excess of the interest
rate otherwise payable under this Agreement with respect to the applicable Loans
(or, in the case of any such fees and other amounts, at a rate which is 2% per
annum in excess of the interest rate otherwise payable under this Agreement for
Base Rate Loans); provided that, in the case of Eurodollar Rate Loans, upon the
--------
expiration of the Interest Period in effect at the time any such increase in
interest
47
rate is effective such Eurodollar Rate Loans shall thereupon become Base Rate
Loans and shall thereafter bear interest payable upon demand at a rate which is
2% per annum in excess of the interest rate otherwise payable under this
Agreement for Base Rate Loans that are Revolving Loans, as applicable. Payment
or acceptance of the increased rates of interest provided for in this subsection
2.2E is not a permitted alternative to timely payment and shall not constitute a
waiver of any Event of Default or otherwise prejudice or limit any rights or
remedies of Administrative Agent or any Lender.
F. Computation of Interest. Interest on the Loans shall be computed
(i) in the case of Base Rate Loans with respect to which the Base Rate is based
on the Prime Rate, on the basis of a 365-day or 366-day year, as the case may
be, and (ii) in all other cases, on the basis of a 360-day year, in each case
for the actual number of days elapsed in the period during which it accrues. In
computing interest on any Loan, the date of the making of such Loan or the first
day of an Interest Period applicable to such Loan or, with respect to a Base
Rate Loan being converted from a Eurodollar Rate Loan, the date of conversion of
such Eurodollar Rate Loan to such Base Rate Loan, as the case may be, shall be
included, and the date of payment of such Loan or the expiration date of an
Interest Period applicable to such Loan or, with respect to a Base Rate Loan
being converted to a Eurodollar Rate Loan, the date of conversion of such Base
Rate Loan to such Eurodollar Rate Loan, as the case may be, shall be excluded;
provided that if a Loan is repaid on the same day on which it is made, one day's
--------
interest shall be paid on that Loan.
2.3 Fees.
----
A. Commitment Fees. Company agrees to pay to Administrative Agent,
for distribution to each Lender in proportion to that Lender's Pro Rata Share,
commitment fees for the period from and including the Effective Date to and
excluding the Revolving Loan Commitment Termination Date equal to the average of
the daily excess of the Revolving Loan Commitments over the sum of (i) the
aggregate principal amount of outstanding Revolving Loans and Swing Line Loans
plus (ii) the Letter of Credit Usage multiplied by 0.50% per annum, such
---- -------------
commitment fees to be calculated on the basis of a 360-day year and the actual
number of days elapsed and to be payable quarterly in arrears on the last
Business Day in each of March, June, September and December of each year,
commencing on the first such date to occur after the Effective Date, and on the
Revolving Loan Commitment Termination Date.
B. Annual Administrative Fee. Company agrees to pay to
Administrative Agent an annual administrative fee in such amounts and at such
times as may be agreed upon by Company and Administrative Agent from time to
time.
C. Other Fees. Company agrees to pay such other fees as may be
agreed upon from time to time.
48
2.4 Prepayments and Reductions in Revolving Loan Commitments; General
-----------------------------------------------------------------
Provisions Regarding Payments; Application of Proceeds of Collateral and
------------------------------------------------------------------------
Payments Under Guaranties.
-------------------------
A. Prepayments and Reductions in Revolving Loan Commitments.
(i) Voluntary Prepayments. Company may, upon written or
---------------------
telephonic notice to Administrative Agent on or prior to 12:00 Noon (New
York City time) on the date of prepayment, which notice, if telephonic,
shall be promptly confirmed in writing, at any time and from time to time
prepay any Swing Line Loan on any Business Day in whole or in part in an
aggregate minimum amount of $100,000 and integral multiples of $50,000 in
excess of that amount. In addition, Company may, upon not less than one
Business Day's prior written or telephonic notice, in the case of Base Rate
Loans, and three Business Days' prior written or telephonic notice, in the
case of Eurodollar Rate Loans, in each case given to Administrative Agent
by 12:00 Noon (New York City time) on the date required and, if given by
telephone, promptly confirmed in writing to Administrative Agent (which
original written or telephonic notice Administrative Agent will promptly
transmit by telefacsimile or telephone to each Lender), at any time and
from time to time prepay any Revolving Loans on any Business Day in whole
or in part in an aggregate minimum amount of $1,000,000 and integral
multiples of $100,000 in excess of that amount; provided that, in the event
--------
Company shall prepay a Eurodollar Rate Loan other than on the expiration of
the Interest Period applicable thereto, Company shall, at the time of such
prepayment, also pay any amount payable under subsection 2.6D. Notice of
prepayment having been given as aforesaid, the principal amount of the
Loans specified in such notice shall become due and payable on the
prepayment date specified therein. Any such voluntary prepayment shall be
applied as specified in subsection 2.4A(iv).
(ii) Voluntary Reductions of Revolving Loan Commitments. Company
--------------------------------------------------
may, upon not less than three Business Days' prior written or telephonic
notice confirmed in writing to Administrative Agent (which original written
or telephonic notice Administrative Agent will promptly transmit by
telefacsimile or telephone to each Lender), at any time and from time to
time terminate in whole or permanently reduce in part, without premium or
penalty, the Revolving Loan Commitments in an amount up to the amount by
which the Revolving Loan Commitments exceed the Total Utilization of
Revolving Loan Commitments at the time of such proposed termination or
reduction; provided that any such partial reduction of the Revolving
--------
Loan Commitments shall be in an aggregate minimum amount of $1,000,000 and
integral multiples of $100,000 in excess of that amount. Company's notice
to Administrative Agent shall designate the date (which shall be a Business
Day) of such termination or reduction and the amount of any partial
reduction, and such termination or reduction of the Revolving Loan
49
Commitments shall be effective on the date specified in Company's notice
and shall reduce the Revolving Loan Commitment of each Lender
proportionately to its Pro Rata Share.
(iii) Mandatory Prepayments. The Loans shall be prepaid in the
---------------------
amounts and under the circumstances set forth below (without a
corresponding reduction in the Revolving Loan Commitments), all such
prepayments to be applied as set forth below or as more specifically
provided in subsection 2.4A(iv):
(a) Prepayments From Unreinvested Asset Sale Proceeds. No later
-------------------------------------------------
than the first Business Day following the date on which any Net Asset Sale
Proceeds become Unreinvested Asset Sale Proceeds, Company shall prepay the
Loans in an aggregate amount equal to such Unreinvested Asset Sale
Proceeds.
(b) Prepayments from Unreinvested Insurance/Condemnation
----------------------------------------------------
Proceeds. No later than the first Business Day following the date on which
--------
any Net Insurance/Condemnation Proceeds become Unreinvested
Insurance/Condemnation Proceeds, Company shall prepay the Loans in an
aggregate amount equal to such Unreinvested Insurance/Condemnation
Proceeds.
(c) Prepayments Due to Issuance of Debt. On or prior to the
-----------------------------------
first Business Day after receipt by Holdings or any of its Subsidiaries of
the Cash proceeds (any such proceeds, net of underwriting discounts and
commissions and other reasonable costs and expenses associated therewith,
including reasonable legal fees and expenses, being "Net Debt Proceeds")
from the issuance of any debt Securities of Holdings or any of its
Subsidiaries after the Effective Date, Company shall prepay the Loans in an
aggregate amount equal to such Net Debt Proceeds; provided that the
--------
provisions of this subsection 2.4A(iii)(c) shall not apply to the issuance
of any debt Securities permitted under subsection 7.1 as in effect on the
Effective Date; and provided, further, however, that payment or acceptance
-------- ------- -------
of any mandatory prepayment provided for in this subsection 2.4A(iii)(c) is
not a permitted alternative to compliance with the provisions of subsection
7.1 and shall not constitute a waiver of any Event of Default resulting
from noncompliance by Holdings or Company with the terms thereof or
otherwise prejudice or limit any rights or remedies of Administrative Agent
or any Lender.
(d) Prepayments Due to Issuance of Equity Securities. On or
------------------------------------------------
prior to the first Business Day after receipt by Company or Holdings of the
Cash proceeds (any such proceeds, net of underwriting discounts and
commissions and other reasonable costs and expenses associated therewith,
including reasonable legal fees and expenses, being "Net Equity Proceeds")
from the issuance of any equity Securities of Company or Holdings or any
capital contributions made to
50
Company or Holdings, Company shall prepay the Loans in an aggregate amount
equal to 50% of such Net Equity Proceeds; provided that the provisions of
--------
this subsection 2.4A(iii)(d) shall not apply with respect to any Net Equity
Proceeds received by Company or Holdings during any period when the
Leverage Ratio as of the last day of the most recently-ended Fiscal Quarter
is less than 3.5:1.
(e) Calculations of Net Proceeds Amounts; Additional
------------------------------------------------
Prepayments Based on Subsequent Calculations. Concurrently with any
--------------------------------------------
prepayment of the Loans pursuant to subsections 2.4A(iii)(a)-(d), Company
shall deliver to Administrative Agent an Officer's Certificate
demonstrating the calculation of the amount (the "Net Proceeds Amount") of
the applicable Unreinvested Asset Sale Proceeds, Unreinvested
Insurance/Condemnation Proceeds, Net Debt Proceeds or Net Equity Proceeds
that gave rise to such prepayment. In the event that Company shall
subsequently determine that the actual Net Proceeds Amount was greater than
the amount set forth in such Officer's Certificate, Company shall promptly
make an additional prepayment of the Loans in an amount equal to the amount
of such excess, and Company shall concurrently therewith deliver to
Administrative Agent an Officer's Certificate demonstrating the derivation
of the additional Net Proceeds Amount resulting in such excess.
(f) Prepayments Due to Reductions or Restrictions of Revolving
----------------------------------------------------------
Loan Commitments. Company shall from time to time prepay first the Swing
---------------- -----
Line Loans and second the Revolving Loans to the extent necessary so
------
that the Total Utilization of Revolving Loan Commitments shall not at
any time exceed the Revolving Loan Commitments then in effect.
(iv) Application of Prepayments.
--------------------------
(a) Application of Voluntary Prepayments by Type of Loans and
---------------------------------------------------------
Order of Maturity. Any voluntary prepayments pursuant to subsection 2.4A(i)
-----------------
shall be applied as specified by Company in the applicable notice of
prepayment; provided that in the event Company fails to specify the Loans
--------
to which any such prepayment shall be applied, such prepayment shall be
applied first to repay outstanding Swing Line Loans to the full extent
-----
thereof, and second to repay outstanding Revolving Loans to the full extent
------
thereof.
(b) Application of Mandatory Prepayments by Type of Loans. Any
-----------------------------------------------------
amount (the "Applied Amount") required to be applied as a mandatory
prepayment of the Loans pursuant to subsections 2.4A(iii)(a)-(d) shall be
applied first to prepay the Swing Line Loans to the full extent thereof,
-----
and second, to the extent of any remaining portion of the Applied Amount,
------
to prepay the Revolving Loans to the full extent thereof.
51
(c) Application of Prepayments to Base Rate Loans and Eurodollar
------------------------------------------------------------
Rate Loans. Any prepayment of Revolving Loans shall be applied first
----------
to Base Rate Loans to the full extent thereof before application to
Eurodollar Rate Loans, in each case in a manner which minimizes the
amount of any payments required to be made by Company pursuant to
subsection 2.6D.
B. General Provisions Regarding Payments.
(i) Manner and Time of Payment. All payments by Company of
--------------------------
principal, interest, fees and other Obligations hereunder and under the
Notes shall be made in Dollars in same day funds, without defense, setoff
or counterclaim, free of any restriction or condition, and delivered to
Administrative Agent not later than 12:00 Noon (New York City time) on the
date due at the Funding and Payment Office for the account of Lenders;
funds received by Administrative Agent after that time on such due date
shall be deemed to have been paid by Company on the next succeeding
Business Day. Company hereby authorizes Administrative Agent to charge its
accounts with Administrative Agent in order to cause timely payment to be
made to Administrative Agent of all principal, interest, fees and expenses
due hereunder (subject to sufficient funds being available in its accounts
for that purpose).
(ii) Application of Payments to Principal and Interest. Except
-------------------------------------------------
as provided in subsection 2.2C, all payments in respect of the principal
amount of any Loan shall include payment of accrued interest on the
principal amount being repaid or prepaid, and all such payments (and, in
any event, any payments in respect of any Loan on a date when interest is
due and payable with respect to such Loan) shall be applied to the payment
of interest before application to principal.
(iii) Apportionment of Payments. Aggregate principal and
-------------------------
interest payments in respect of Revolving Loans shall be apportioned among
all outstanding Loans to which such payments relate, in each case
proportionately to Lenders' respective Pro Rata Shares. Administrative
Agent shall promptly distribute to each Lender, at its primary address set
forth below its name on the appropriate signature page hereof or at such
other address as such Lender may request, its Pro Rata Share of all such
payments received by Administrative Agent and the commitment fees of such
Lender when received by Administrative Agent pursuant to subsection 2.3.
Notwithstanding the foregoing provisions of this subsection 2.4B(iii), if,
pursuant to the provisions of subsection 2.6C, any Notice of
Conversion/Continuation is withdrawn as to any Affected Lender or if any
Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share of any
Eurodollar Rate Loans, Administrative Agent shall give effect thereto in
apportioning payments received thereafter.
(iv) Payments on Business Days. Whenever any payment to be made
-------------------------
hereunder shall be stated to be due on a day that is not a Business Day,
such payment
52
shall be made on the next succeeding Business Day and such extension of
time shall be included in the computation of the payment of interest
hereunder or of the commitment fees hereunder, as the case may be.
(v) Notation of Payment. Each Lender agrees that before
-------------------
disposing of any Note held by it, or any part thereof (other than by
granting participations therein), that Lender will make a notation thereon
of all Loans evidenced by that Note and all principal payments previously
made thereon and of the date to which interest thereon has been paid;
provided that the failure to make (or any error in the making of) a
--------
notation of any Loan made under such Note shall not limit or otherwise
affect the obligations of Company hereunder or under such Note with respect
to any Loan or any payments of principal or interest on such Note.
C. Application of Proceeds of Collateral and Payments Under
Guaranties.
(i) Application of Proceeds of Collateral. All proceeds received
-------------------------------------
by Administrative Agent in respect of any sale of, collection from, or
other realization upon all or any part of the Collateral pursuant to the
terms of any Collateral Document may, in the discretion of Administrative
Agent, be held by Administrative Agent as Collateral for, and/or (then or
at any time thereafter) applied in full or in part by Administrative Agent
against, the applicable Secured Obligations (as defined in such Collateral
Document) in the following order of priority:
(a) To the payment of all costs and expenses of such sale,
collection or other realization, including reasonable compensation to
Administrative Agent and its agents and counsel, and all other
expenses, liabilities and advances made or incurred by Administrative
Agent in connection therewith, and all amounts for which
Administrative Agent is entitled to indemnification under such
Collateral Document and all advances made by Administrative Agent
thereunder for the account of the applicable Loan Party, and to the
payment of all costs and expenses paid or incurred by Administrative
Agent in connection with the exercise of any right or remedy under
such Collateral Document, all in accordance with the terms of this
Agreement and such Collateral Document;
(b) thereafter, to the extent of any excess such proceeds, to
the payment of all other such Secured Obligations for the ratable
benefit of the holders thereof; and
(c) thereafter, to the extent of any excess such proceeds, to
the payment to or upon the order of such Loan Party or to whosoever
may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct.
53
(ii) Application of Payments Under Guaranties. All payments
----------------------------------------
received by Administrative Agent under either Guaranty shall be applied
promptly from time to time by Administrative Agent in the following order
of priority:
(a) To the payment of the costs and expenses of any collection
or other realization under such Guaranty, including reasonable
compensation to Administrative Agent and its agents and counsel, and
all expenses, liabilities and advances made or incurred by
Administrative Agent in connection therewith, all in accordance with
the terms of this Agreement and such Guaranty;
(b) thereafter, to the extent of any excess such payments, to
the payment of all other Guarantied Obligations (as defined in such
Guaranty for the ratable benefit of the holders thereof; and
(c) thereafter, to the extent of any excess such payments, to
the payment to Holdings or the applicable Subsidiary Guarantor or to
whosoever may be lawfully entitled to receive the same or as a court
of competent jurisdiction may direct.
2.5 Use of Proceeds.
---------------
A. Existing Term Loans and Existing Revolving Loans. The proceeds of
the Existing Term Loans and the Existing Revolving Loans were used for the
purposes specified in the Existing Credit Agreement.
B. Revolving Loans. The proceeds of the Revolving Loans made on the
Effective Date, together with the proceeds of the Effective Date Investment and
the issuance of the Senior Notes and the Holdings Units, shall be applied by
Company to repay in full the outstanding principal amount of the Existing Term
Loans and the PIK Sub Debt, together, in each case, with all interest and fees
due and owing in respect thereof, to fund the Acquisition Financing Requirements
and to pay Transaction Costs. The proceeds of any Revolving Loans made after the
Effective Date and the proceeds of any Swing Line Loans shall be applied by
Company for working capital and other general corporate purposes, which may
include the making of inter company loans to any of Company's wholly-owned
Subsidiaries, in accordance with subsection 7.1(iv), for their own working
capital and general corporate purposes, including Permitted Acquisitions.
C. Margin Regulations. No portion of the proceeds of any borrowing
under this Agreement shall be used by Company or any of its Subsidiaries in any
manner that might cause the borrowing or the application of such proceeds to
violate Regulation U, Regulation T or Regulation X of the Board of Governors of
the Federal Reserve System or any other regulation of such Board or to violate
the Exchange Act, in each case as in effect on the date or dates of such
borrowing and such use of proceeds.
54
2.6 Special Provisions Governing Eurodollar Rate Loans.
--------------------------------------------------
Notwithstanding any other provision of this Agreement to the contrary,
the following provisions shall govern with respect to Eurodollar Rate Loans as
to the matters covered:
A. Determination of Applicable Interest Rate. As soon as practicable
after 10:00 A.M. (New York City time) on each Interest Rate Determination Date,
Administrative Agent shall determine (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties) the interest rate that
shall apply to the Eurodollar Rate Loans for which an interest rate is then
being determined for the applicable Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to Company and
each Lender.
B. Inability to Determine Applicable Interest Rate. In the event
that Administrative Agent shall have determined (which determination shall be
final and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate Loans, that by reason of
circumstances affecting the London interbank market adequate and fair means do
not exist for ascertaining the interest rate applicable to such Loans on the
basis provided for in the definition of Reserve Adjusted Eurodollar Rate,
Administrative Agent shall on such date give notice (by telefacsimile or by
telephone confirmed in writing) to Company and each Lender of such
determination, whereupon (i) no Loans may be made as, or converted to,
Eurodollar Rate Loans until such time as Administrative Agent notifies Company
and Lenders that the circumstances giving rise to such notice no longer exist
and (ii) any Notice of Borrowing or Notice of Conversion/Continuation given by
Company with respect to the Loans in respect of which such determination was
made shall be deemed to be rescinded by Company.
C. Illegality or Impracticability of Eurodollar Rate Loans. In the
event that on any date any Lender shall have determined (which determination
shall be final and conclusive and binding upon all parties hereto but shall be
made only after consultation with Company and Administrative Agent) that the
making, maintaining or continuation of its Eurodollar Rate Loans (i) has become
unlawful as a result of compliance by such Lender in good faith with any law,
treaty, governmental rule, regulation, guideline or order (or would conflict
with any such treaty, governmental rule, regulation, guideline or order not
having the force of law even though the failure to comply therewith would not be
unlawful) or (ii) has become impracticable, or would cause such Lender material
hardship, as a result of contingencies occurring after the date of this
Agreement which materially and adversely affect the London interbank market or
the position of such Lender in that market, then, and in any such event, such
Lender shall be an "Affected Lender" and it shall on that day give notice (by
telefacsimile or by telephone confirmed in writing) to Company and
Administrative Agent of such determination (which notice Administrative Agent
shall promptly transmit to each other Lender). Thereafter (a) the obligation of
the Affected Lender to make Loans as, or to convert Loans to, Eurodollar Rate
Loans shall be suspended until such notice shall be withdrawn by the Affected
Lender,
55
(b) to the extent such determination by the Affected Lender relates to a
Eurodollar Rate Loan then being requested by Company pursuant to a Notice of
Borrowing or a Notice of Conversion/Continuation, the Affected Lender shall make
such Loan as (or convert such Loan to, as the case may be) a Base Rate Loan, (c)
the Affected Lender's obligation to maintain its outstanding Eurodollar Rate
Loans (the "Affected Loans") shall be terminated at the earlier to occur of the
expiration of the Interest Period then in effect with respect to the Affected
Loans or when required by law, and (d) the Affected Loans shall automatically
convert into Base Rate Loans on the date of such termination. Notwithstanding
the foregoing, to the extent a determination by an Affected Lender as described
above relates to a Eurodollar Rate Loan then being requested by Company pursuant
to a Notice of Borrowing or a Notice of Conversion/Continuation, Company shall
have the option, subject to the provisions of subsection 2.6D, to rescind such
Notice of Borrowing or Notice of Conversion/Continuation as to all Lenders by
giving notice (by telefacsimile or by telephone confirmed in writing) to
Administrative Agent of such rescission on the date on which the Affected Lender
gives notice of its determination as described above (which notice of rescission
Administrative Agent shall promptly transmit to each other Lender). Except as
provided in the immediately preceding sentence, nothing in this subsection 2.6C
shall affect the obligation of any Lender other than an Affected Lender to make
or maintain Loans as, or to convert Loans to, Eurodollar Rate Loans in
accordance with the terms of this Agreement.
D. Compensation For Breakage or Non-Commencement of Interest
Periods. Company shall compensate each Lender, upon written request by that
Lender (which request shall set forth the basis for requesting such amounts),
for all reasonable losses, expenses and liabilities (including any interest paid
by that Lender to lenders of funds borrowed by it to make or carry its
Eurodollar Rate Loans and any loss, expense or liability sustained by that
Lender in connection with the liquidation or re-employment of such funds) which
that Lender may sustain: (i) if for any reason (other than a default by that
Lender) a borrowing of any Eurodollar Rate Loan does not occur on a date
specified therefor in a Notice of Borrowing or a telephonic request for
borrowing, or a conversion to or continuation of any Eurodollar Rate Loan does
not occur on a date specified therefor in a Notice of Conversion/Continuation or
a telephonic request for conversion or continuation, (ii) if any prepayment
(including any prepayment pursuant to subsection 2.4B(i)) or other principal
payment or any conversion of any of its Eurodollar Rate Loans occurs on a date
prior to the last day of an Interest Period applicable to that Loan, (iii) if
any prepayment of any of its Eurodollar Rate Loans is not made on any date
specified in a notice of prepayment given by Company, or (iv) as a consequence
of any other default by Company in the repayment of its Eurodollar Rate Loans
when required by the terms of this Agreement.
E. Booking of Eurodollar Rate Loans. Any Lender may make, carry or
transfer Eurodollar Rate Loans at, to, or for the account of any of its branch
offices or the office of an Affiliate of that Lender.
56
F. Assumptions Concerning Funding of Eurodollar Rate Loans.
Calculation of all amounts payable to a Lender under this subsection 2.6 and
under subsection 2.7A shall be made as though that Lender had actually funded
each of its relevant Eurodollar Rate Loans through the purchase of a Eurodollar
deposit bearing interest at the Base Eurodollar Rate in an amount equal to the
amount of such Eurodollar Rate Loan and having a maturity comparable to the
relevant Interest Period and through the transfer of such Eurodollar deposit
from an offshore office of that Lender to a domestic office of that Lender in
the United States of America; provided, however, that each Lender may fund each
-------- -------
of its Eurodollar Rate Loans in any manner it sees fit and the foregoing
assumptions shall be utilized only for the purposes of calculating amounts
payable under this subsection 2.6 and under subsection 2.7A.
G. Eurodollar Rate Loans After Default. After the occurrence of and
during the continuation of a Potential Event of Default or an Event of Default,
(i) Company may not elect to have a Loan be made or maintained as, or converted
to, a Eurodollar Rate Loan after the expiration of any Interest Period then in
effect for that Loan and (ii) subject to the provisions of subsection 2.6D, any
Notice of Borrowing or Notice of Conversion/Continuation given by Company with
respect to a requested borrowing or conversion/continuation that has not yet
occurred shall be deemed to be rescinded by Company.
2.7 Increased Costs; Taxes; Capital Adequacy.
----------------------------------------
A. Compensation for Increased Costs and Taxes. Subject to the
provisions of subsection 2.7B (which shall be controlling with respect to the
matters covered thereby), in the event that any Lender shall reasonably
determine (which determination shall, absent manifest error, be final and
conclusive and binding upon all parties hereto) that any law, treaty or
governmental rule, regulation or order, or any change therein or in the
interpretation, administration or application thereof (including the
introduction of any new law, treaty or governmental rule, regulation or order),
or any determination of a court or governmental authority, in each case that
becomes effective after the date hereof, or compliance by such Lender with any
guideline, request or directive issued or made after the date hereof by any
central bank or other governmental or quasi-governmental authority (whether or
not having the force of law):
(i) subjects such Lender (or its applicable lending office) to
any additional Tax (other than any Tax on the overall net income of such
Lender) with respect to this Agreement or any of its obligations hereunder
or any payments to such Lender (or its applicable lending office) of
principal, interest, fees or any other amount payable hereunder;
(ii) imposes, modifies or holds applicable any reserve (including
any marginal, emergency, supplemental, special or other reserve), special
deposit, compulsory loan, FDIC insurance or similar requirement against
assets held by, or deposits or other liabilities in or for the account of,
or advances or loans by, or other credit extended by, or any other
acquisition of funds by, any office of such Lender (other than any such
reserve
57
or other requirements with respect to Eurodollar Rate Loans that are
reflected in the definition of Reserve Adjusted Eurodollar Rate); or
(iii) imposes any other condition (other than with respect to a
Tax matter) on or affecting such Lender (or its applicable lending office)
or its obligations hereunder or the London interbank market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Loans hereunder or to reduce any amount
received or receivable by such Lender (or its applicable lending office) with
respect thereto; then, in any such case, Company shall promptly pay to such
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
reasonable discretion shall determine) as may be necessary to compensate such
Lender for any such increased cost or reduction in amounts received or
receivable hereunder. Such Lender shall deliver to Company (with a copy to
Administrative Agent) a written statement, setting forth in reasonable detail
the basis for calculating the additional amounts owed to such Lender under this
subsection 2.7A, which statement shall be conclusive and binding upon all
parties hereto absent manifest error.
B. Withholding of Taxes.
(i) Payments to Be Free and Clear. All sums payable by Company
-----------------------------
under this Agreement and the other Loan Documents shall (except to the
extent required by law) be paid free and clear of, and without any
deduction or withholding on account of, any Tax (other than a Tax on the
overall net income of any Lender) imposed, levied, collected, withheld or
assessed by or within the United States of America or any political
subdivision in or of the United States of America or any other jurisdiction
from or to which a payment is made by or on behalf of Company or by any
federation or organization of which the United States of America or any
such jurisdiction is a member at the time of payment.
(ii) Grossing-up of Payments. If Company or any other Person is
-----------------------
required by law to make any deduction or withholding on account of any such
Tax from any sum paid or payable by Company to Administrative Agent or any
Lender under any of the Loan Documents:
(a) Company shall notify Administrative Agent of any such
requirement or any change in any such requirement as soon as Company
becomes aware of it;
(b) Company shall pay any such Tax before the date on which
penalties attach thereto, such payment to be made (if the liability to
pay is imposed on Company) for its own account or (if that liability
is imposed on
58
Administrative Agent or such Lender, as the case may be) on behalf of
and in the name of Administrative Agent or such Lender;
(c) the sum payable by Company in respect of which the
relevant deduction, withholding or payment is required shall be
increased to the extent necessary to ensure that, after the making of
that deduction, withholding or payment, Administrative Agent or such
Lender, as the case may be, receives on the due date a net sum equal
to what it would have received had no such deduction, withholding or
payment been required or made; and
(d) within 30 days after paying any sum from which it is
required by law to make any deduction or withholding, and within 30
days after the due date of payment of any Tax which it is required by
clause (b) above to pay, Company shall deliver to Administrative Agent
evidence satisfactory to the other affected parties of such deduction,
withholding or payment and of the remittance thereof to the relevant
taxing or other authority;
provided that no such additional amount shall be required to be paid to any
--------
Lender under clause (c) above except to the extent that any change after
the Closing Date (in the case of each Existing Lender), after the Effective
Date (in the case of each New Lender) or after the date of the Assignment
Agreement pursuant to which such Lender became a Lender (in the case of
each other Lender) in any such requirement for a deduction, withholding or
payment as is mentioned therein shall result in an increase in the rate of
such deduction, withholding or payment from that in effect at the date of
this Agreement or at the date of such Assignment Agreement, as the case may
be, in respect of payments to such Lender.
(iii) Evidence of Exemption from U.S. Withholding Tax.
-----------------------------------------------
(a) Each Lender that is organized under the laws of any
jurisdiction other than the United States or any state or other
political subdivision thereof (for purposes of this subsection
2.7B(iii), a "Non-US Lender") shall deliver to Administrative Agent
for transmission to Company, on or prior to the Closing Date (in the
case of each Existing Lender), on or prior to the Effective Date (in
the case of each New Lender) or on or prior to the date of the
Assignment Agreement pursuant to which it becomes a Lender (in the
case of each other Lender), and at such other times as may be
necessary in the determination of Company or Administrative Agent
(each in the reasonable exercise of its discretion), (1) two original
copies of Internal Revenue Service Form 1001 or 4224 (or any successor
forms), properly completed and duly executed by such Lender, together
with any other certificate or statement of exemption required under
the Internal Revenue Code or the regulations issued thereunder to
establish that such Lender is not subject to deduction or withholding
of United States federal income tax with respect to any payments to
such Lender of principal, interest, fees or other
59
amounts payable under any of the Loan Documents or (2) if such Lender
is not a "bank" or other Person described in Section 881(c)(3) of the
Internal Revenue Code and cannot deliver either Internal Revenue
Service Form 1001 or 4224 pursuant to clause (1) above, a Certificate
of Non-Bank Status together with two original copies of Internal
Revenue Service Form W-8 (or any successor form), properly completed
and duly executed by such Lender, together with any other certificate
or statement of exemption required under the Internal Revenue Code or
the regulations issued thereunder to establish that such Lender is not
subject to deduction or withholding of United States federal income
tax with respect to any payments to such Lender of interest payable
under any of the Loan Documents.
(b) Each Lender required to deliver any forms, certificates or
other evidence with respect to United States federal income tax
withholding matters pursuant to subsection 2.7B(iii)(a) hereby agrees,
from time to time after the initial delivery by such Lender of such
forms, certificates or other evidence, whenever a lapse in time or
change in circumstances renders such forms, certificates or other
evidence obsolete or inaccurate in any material respect, that such
Lender shall promptly (1) deliver to Administrative Agent for
transmission to Company two new original copies of Internal Revenue
Service Form 1001 or 4224, or a Certificate of Non-Bank Status and two
original copies of Internal Revenue Service Form W-8, as the case may
be, properly completed and duly executed by such Lender, together with
any other certificate or statement of exemption required in order to
confirm or establish that such Lender is not subject to deduction or
withholding of United States federal income tax with respect to
payments to such Lender under the Loan Documents or (2) notify
Administrative Agent and Company of its inability to deliver any such
forms, certificates or other evidence.
(c) Company shall not be required to pay any additional amount
to any Non-US Lender under clause (c) of subsection 2.7B(ii) if such
Lender shall have failed to satisfy the requirements of clause (a) or
(b)(1) of this subsection 2.7B(iii); provided that if such Lender
--------
shall have satisfied the requirements of subsection 2.7B(iii)(a) on
the Closing Date (in the case of each Existing Lender), on the
Effective Date (in the case of each New Lender) or on the date of the
Assignment Agreement pursuant to which it became a Lender (in the case
of each other Lender), nothing in this subsection 2.7B(iii)(c) shall
relieve Company of its obligation to pay any additional amounts
pursuant to clause (c) of subsection 2.7B(ii) in the event that, as a
result of any change in any applicable law, treaty or governmental
rule, regulation or order, or any change in the interpretation,
administration or application thereof, such Lender is no longer
properly entitled to deliver forms, certificates or other evidence at
a subsequent date establishing the fact that such Lender is not
subject to withholding as described in subsection 2.7B(iii)(a).
60
C. Capital Adequacy Adjustment. If any Lender shall have determined
that the adoption, effectiveness, phase-in or applicability after the date
hereof of (i) any law, rule or regulation (or any provision thereof) regarding
capital adequacy or (ii) any change therein or in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or that
compliance by any Lender (or its applicable lending office) with any guideline,
request or directive regarding capital adequacy (whether or not having the force
of law) of any such governmental authority, central bank or comparable agency
that is adopted or becomes effective or applicable after the date hereof, in any
such case has or would have the effect of reducing the rate of return on the
capital of such Lender or any corporation controlling such Lender as a
consequence of, or with reference to, such Lender's Loans or Commitments or
Letters of Credit or participations therein or other obligations hereunder with
respect to the Loans or the Letters of Credit to a level below that which such
Lender or such controlling corporation could have achieved but for such
adoption, effectiveness, phase-in, applicability, change or compliance (taking
into consideration the policies of such Lender or such controlling corporation
with regard to capital adequacy), then from time to time, within five Business
Days after receipt by Company from such Lender of the statement referred to in
the next sentence, Company shall pay to such Lender such additional amount or
amounts as will compensate such Lender or such controlling corporation on an
after-tax basis for such reduction. Such Lender shall deliver to Company (with a
copy to Administrative Agent) a written statement, setting forth in reasonable
detail the basis of the calculation of such additional amounts, which statement
shall be conclusive and binding upon all parties hereto absent manifest error.
2.8 Obligation of Lenders and Issuing Lenders to Mitigate.
-----------------------------------------------------
Each Lender and Issuing Lender agrees that, as promptly as practicable
after the officer of such Lender or Issuing Lender responsible for administering
the Loans or Letters of Credit of such Lender or Issuing Lender, as the case may
be, becomes aware of the occurrence of an event or the existence of a condition
that would cause such Lender to become an Affected Lender or that would entitle
such Lender or Issuing Lender to receive payments under subsection 2.7 or
subsection 3.6, it will, to the extent it is not inconsistent with the internal
policies of such Lender or Issuing Lender and any applicable legal or regulatory
restrictions and will not otherwise result in any legal, regulatory or material
economic disadvantage to such Lender, as determined by such Lender in the
exercise of its reasonable discretion, use reasonable efforts (i) to make,
issue, fund or maintain the Commitments of such Lender or the affected Loans or
Letters of Credit of such Lender or Issuing Lender through another lending or
letter of credit office of such Lender or Issuing Lender, or (ii) take such
other measures as such Lender or Issuing Lender may deem reasonable, if as a
result thereof the circumstances which would cause such Lender to be an Affected
Lender would cease to exist or the additional amounts which would otherwise be
required to be paid to such Lender or Issuing Lender pursuant to subsection 2.7
or subsection 3.6 would be materially reduced and if, as determined by such
Lender or Issuing Lender in its sole discretion, the making, issuing, funding or
maintaining of such
61
Commitments or Loans or Letters of Credit through such other lending or letter
of credit office or in accordance with such other measures, as the case may be,
would not otherwise materially adversely affect such Commitments or Loans or
Letters of Credit or the interests of such Lender or Issuing Lender; provided
--------
that such Lender or Issuing Lender will not be obligated to utilize such other
lending or letter of credit office pursuant to this subsection 2.8 unless
Company agrees to pay all incremental expenses incurred by such Lender or
Issuing Lender as a result of utilizing such other lending or letter of credit
office as described in clause (i) above. A certificate as to the amount of any
such expenses payable by Company pursuant to this subsection 2.8 (setting forth
in reasonable detail the basis for requesting such amount) submitted by such
Lender or Issuing Lender to Company (with a copy to Administrative Agent) shall
be conclusive absent manifest error.
2.9 Removal or Replacement of a Lender.
----------------------------------
A. Anything contained in this Agreement to the contrary
notwithstanding, in the event that:
(i) (a) any Lender (an "Increased-Cost Lender") shall give
notice to Company that such Lender is an Affected Lender or that such
Lender is entitled to receive payments under subsection 2.7 or subsection
3.6, (b) the circumstances which have caused such Lender to be an Affected
Lender or which entitle such Lender to receive such payments shall remain
in effect, and (c) such Lender shall fail to withdraw such notice within
five Business Days after Company's request for such withdrawal; or
(ii) any Lender shall be a Defaulting Lender;
then, and in each such case, Company shall have the right, at its option, to
remove or replace the applicable Increased-Cost Lender or Defaulting Lender (the
"Terminated Lender") to the extent permitted by subsection 2.9B.
B. Company may, by giving written notice to Administrative Agent and
any Terminated Lender of its election to do so:
(i) elect to (a) terminate the Revolving Loan Commitment, if
any, of such Terminated Lender upon receipt by such Terminated Lender of
such notice and (b) prepay on the date of such termination any outstanding
Loans made by such Terminated Lender, at par, together with accrued and
unpaid interest thereon and any other amounts payable to such Terminated
Lender hereunder pursuant to subsection 2.6, subsection 2.7 or subsection
3.6 or otherwise; provided that, in the event such Terminated Lender has
--------
any Loans outstanding at the time of such termination, the written consent
of Administrative Agent and Requisite Lenders (which consent shall not be
unreasonably withheld or delayed) shall be required in order for Company to
make the election set forth in this clause (i); or
62
(ii) elect to cause such Terminated Lender (and such Terminated
Lender hereby irrevocably agrees) to assign its outstanding Loans, at par,
and its Revolving Loan Commitment, if any, in full to one or more Eligible
Assignees (each a "Replacement Lender") in accordance with the provisions
of subsection 11.1B (it being understood that neither Administrative Agent
nor such Terminated Lender shall have any obligation to solicit or
otherwise identify any potential Replacement Lender); provided that, on the
--------
date of such assignment, Company shall pay any amounts payable to such
Terminated Lender pursuant to subsection 2.6, subsection 2.7 or subsection
3.6 or otherwise as if it were a prepayment; and provided, further that, if
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such Terminated Lender fails to enter into an Assignment Agreement with any
applicable Replacement Lender in accordance with the provisions of
subsection 11.1B as contemplated by the foregoing provisions of this
subsection 2.9B(ii), it shall be deemed to have so entered into such
Assignment Agreement;
provided that Company may not make either of the elections set forth in clauses
--------
(i) or (ii) above with respect to any Terminated Lender that is an Issuing
Lender unless, prior to the effectiveness of such election, Company shall have
caused each outstanding Letter of Credit issued by such Issuing Lender to be
cancelled or replaced.
C. Upon the prepayment of all amounts owing to any Terminated Lender
and the termination of such Terminated Lender's Revolving Loan Commitment, if
any, pursuant to clause (i) of subsection 2.9B, (i) Schedule 2.1 shall be deemed
------------
modified to reflect any corresponding changes in the Revolving Loan Commitments
and (ii) such Terminated Lender shall no longer constitute a "Lender" for
purposes of this Agreement; provided that any rights of such Terminated Lender
--------
to indemnification under this Agreement (including under subsections 2.6D, 2.7,
3.6, 10.2 and 10.3) shall survive as to such Terminated Lender.
Section 3. LETTERS OF CREDIT
3.1 Issuance of Letters of Credit and Lenders' Purchase of Participations
---------------------------------------------------------------------
Therein.
-------
A. Letters of Credit. Company acknowledges and confirms that
Schedule 3.1 annexed hereto sets forth each letter of credit issued under the
------------
Existing Credit Agreement and outstanding as of the Effective Date
(collectively, the "Existing Letters of Credit"). Company hereby represents,
warrants, agrees, covenants and (a) reaffirms that it is not aware of any
defense, set off, claim or counterclaim against any Agent or Lender in regard to
its Obligations in respect of such Existing Letters of Credit and (b) reaffirms
its obligation to reimburse the applicable Issuing Lenders for honored drawings
under such Existing Letters of Credit in accordance with the terms and
conditions of this Agreement and the other Loan Documents applicable to Letters
of Credit issued hereunder. Based on the foregoing, Company and each Lender
agrees that (1) each Existing Letter of Credit which is a Standby Letter of
Credit shall, as of the Effective Date, be deemed for all purposes of this
Agreement to be a Standby Letter of
63
Credit issued hereunder, and (2) each Existing Letter of Credit which is a
Commercial Letter of Credit shall, as of the Effective Date, be deemed for all
purposes of this Agreement to be a Commercial Letter of Credit issued hereunder.
In addition to Company requesting that Lenders make Revolving Loans pursuant to
subsection 2.1A(ii) and that Swing Line Lender make Swing Line Loans pursuant to
subsection 2.1A(iii), Company may request, in accordance with the provisions of
this subsection 3.1, from time to time during the period from the Effective Date
to but excluding the Revolving Loan Commitment Termination Date, that one or
more Lenders issue Letters of Credit for the account of Company for the purposes
specified in the definitions of Commercial Letters of Credit and Standby Letters
of Credit. Subject to the terms and conditions of this Agreement and in reliance
upon the representations and warranties of Company herein set forth, any one or
more Lenders may, but (except as provided in subsection 3.1B(ii)) shall not be
obligated to, issue such Letters of Credit in accordance with the provisions of
this subsection 3.1; provided that Company shall not request that any Lender
--------
issue (and no Lender shall issue):
(i) any Letter of Credit if, after giving effect to such
issuance, the Total Utilization of Revolving Loan Commitments would exceed
the Revolving Loan Commitments then in effect;
(ii) any Letter of Credit if, after giving effect to such
issuance, the Letter of Credit Usage would exceed $7,500,000;
(iii) any Standby Letter of Credit having an expiration date
later than the earlier of (a) the Revolving Loan Commitment Termination
Date and (b) the date which is one year from the date of issuance of such
Standby Letter of Credit; provided that the immediately preceding clause
--------
(b) shall not prevent any Issuing Lender from agreeing that a Standby
Letter of Credit will automatically be extended for one or more successive
periods not to exceed one year each unless such Issuing Lender elects not
to extend for any such additional period; provided, further that such
-------- -------
Issuing Lender shall elect not to extend such Standby Letter of Credit if
it has knowledge that an Event of Default has occurred and is continuing
(and has not been waived in accordance with subsection 11.6) at the time
such Issuing Lender must elect whether or not to allow such extension; and
provided, further that such Issuing Lender shall give (1) prompt written
-------- -------
notice to Company of any election not to extend such Standby Letter of
Credit in accordance with the immediately preceding proviso and (2) 30
days' prior written notice of any other election not to extend such Standby
Letter of Credit;
(iv) any Commercial Letter of Credit having an expiration date
(a) later than the earlier of (X) the date which is 30 days prior to the
Revolving Loan Commitment Termination Date and (Y) the date which is 180
days from the date of issuance of such Commercial Letter of Credit or (b)
that is otherwise unacceptable to the applicable Issuing Lender in its
reasonable discretion;
(v) any Letter of Credit denominated in a currency other than
Dollars;
64
or
(vi) any Letter of Credit during any period when a Lender
Default exists, unless each Issuing Lender has entered into arrangements
satisfactory to it and Company to eliminate such Issuing Lender's risk with
respect to the Defaulting Lender, including by cash collateralizing such
Defaulting Lender's Pro Rata Share of the Letter of Credit Usage (after
giving effect to the issuance of the proposed Letter of Credit).
B. Mechanics of Issuance.
(i) Notice of Issuance. Whenever Company desires the issuance
------------------
of a Letter of Credit, it shall deliver to Administrative Agent a Notice of
Issuance of Letter of Credit substantially in the form of Exhibit III
-----------
annexed hereto no later than 12:00 Noon (New York City time) at least five
Business Days (or such shorter period as may be agreed to by the Issuing
Lender in any particular instance) in advance of the proposed date of
issuance. The Notice of Issuance of Letter of Credit shall specify (a) the
proposed date of issuance (which shall be a Business Day), (b) whether the
Letter of Credit is to be a Standby Letter of Credit or a Commercial Letter
of Credit, (c) the face amount of the Letter of Credit, (d) the expiration
date of the Letter of Credit, (e) the name and address of the beneficiary,
and (f) either the verbatim text of the proposed Letter of Credit or the
proposed terms and conditions thereof, including a precise description of
any documents to be presented by the beneficiary which, if presented by the
beneficiary prior to the expiration date of the Letter of Credit, would
require the Issuing Lender to make payment under the Letter of Credit;
provided that the Issuing Lender, in its reasonable discretion, may require
--------
changes in the text of the proposed Letter of Credit or any such documents;
and provided, further that no Letter of Credit shall require payment
-------- -------
against a conforming draft to be made thereunder on the same business day
(under the laws of the jurisdiction in which the office of the Issuing
Lender to which such draft is required to be presented is located) that
such draft is presented if such presentation is made after 10:00 A.M. (in
the time zone of such office of the Issuing Lender) on such business day.
Company shall notify the applicable Issuing Lender (and
Administrative Agent, if Administrative Agent is not such Issuing
Lender) prior to the issuance of any Letter of Credit in the event
that any of the matters to which Company is required to certify in the
applicable Notice of Issuance of Letter of Credit is no longer true
and correct as of the proposed date of issuance of such Letter of
Credit, and upon the issuance of any Letter of Credit Company shall be
deemed to have re-certified, as of the date of such issuance, as to
the matters to which Company is required to certify in the applicable
Notice of Issuance of Letter of Credit.
(ii) Determination of Issuing Lender. Upon receipt by
-------------------------------
Administrative Agent of a Notice of Issuance of Letter of Credit pursuant
to subsection 3.1B(i)
65
requesting the issuance of a Letter of Credit, in the event Administrative
Agent elects to issue such Letter of Credit, Administrative Agent shall
promptly so notify Company, and Administrative Agent shall be the Issuing
Lender with respect thereto. In the event that Administrative Agent, in
its sole discretion, elects not to issue such Letter of Credit,
Administrative Agent shall promptly so notify Company, whereupon Company
may request any other Lender to issue such Letter of Credit by delivering
to such Lender a copy of the applicable Notice of Issuance of Letter of
Credit. Any Lender so requested to issue such Letter of Credit shall
promptly notify Company and Administrative Agent whether or not, in its
sole discretion, it has elected to issue such Letter of Credit, and any
such Lender which so elects to issue such Letter of Credit shall be the
Issuing Lender with respect thereto. In the event that all other Lenders
shall have declined to issue such Letter of Credit, notwithstanding the
prior election of Administrative Agent not to issue such Letter of Credit,
Administrative Agent shall be obligated to issue such Letter of Credit and
shall be the Issuing Lender with respect thereto, notwithstanding the fact
that the Letter of Credit Usage with respect to such Letter of Credit and
with respect to all other Letters of Credit issued by Administrative Agent,
when aggregated with Administrative Agent's outstanding Revolving Loans and
Swing Line Loans, may exceed Administrative Agent's Revolving Loan
Commitment then in effect.
(iii) Issuance of Letter of Credit. Upon satisfaction or waiver
----------------------------
(in accordance with subsection 11.6) of the conditions set forth in
subsection 4.4, the Issuing Lender shall issue the requested Letter of
Credit in accordance with the Issuing Lender's standard operating
procedures (any such issuance by Administrative Agent being effected
through the Funding and Payment Office), and upon its issuance of such
Letter of Credit the Issuing Lender shall promptly notify Administrative
Agent and each Lender of such issuance, which notice shall be accompanied
by a copy of such Letter of Credit.
(iv) Reports to Lenders. Within 30 days after the end of each
------------------
calendar quarter ending after the Effective Date, so long as any Letter of
Credit shall have been outstanding during such calendar quarter, each
Issuing Lender shall deliver to Administrative Agent and Administrative
Agent shall deliver to each Lender a report setting forth for such calendar
quarter the daily maximum amount available to be drawn under the Letters of
Credit that were outstanding during such calendar quarter.
C. Lenders' Purchase of Participations in Letters of Credit.
Immediately upon the issuance of each Letter of Credit, each Lender shall be
deemed to, and hereby agrees to, have irrevocably purchased from the Issuing
Lender a participation in such Letter of Credit and any drawings honored
thereunder in an amount equal to such Lender's Pro Rata Share of the maximum
amount which is or at any time may become available to be drawn thereunder.
66
3.2 Letter of Credit Fees.
---------------------
Company agrees to pay the following amounts to each Issuing Lender
with respect to Letters of Credit issued by it for the account of Company:
(i) with respect to each Letter of Credit, (a) a fronting fee
equal to 0.25% per annum of the daily maximum amount available to be drawn
under such Letter of Credit and (b) a Letter of Credit fee equal to the
product of (1) the then Applicable Eurodollar Rate Margin with respect to
Revolving Loans and (2) the daily maximum amount available to be drawn
under such Letter of Credit, in each case payable in arrears on and to the
last Business Day in each of March, June, September and December of each
year, commencing the Effective Date, and computed on the basis of a 360-day
year for the actual number of days elapsed; and
(ii) with respect to the issuance, amendment or transfer of each
Letter of Credit and each payment of a drawing made thereunder (without
duplication of the fees payable under clause (i) above), documentary and
processing charges payable directly to the applicable Issuing Lender for
its own account in accordance with such Issuing Lender's standard schedule
for such charges in effect at the time of such issuance, amendment,
transfer or payment, as the case may be.
For purposes of calculating any fees payable under clause (i) of this subsection
3.2, the daily amount available to be drawn under any Letter of Credit shall be
determined as of the close of business on any date of determination. Promptly
upon receipt by such Issuing Lender of any amount described in clause (i)(b) of
this subsection 3.2, such Issuing Lender shall distribute to each other Lender
its Pro Rata Share of such amount.
3.3 Drawings and Reimbursement of Amounts Paid Under Letters of Credit.
------------------------------------------------------------------
A. Responsibility of Issuing Lender With Respect to Drawings. In
determining whether to honor any drawing under any Letter of Credit by the
beneficiary thereof, the Issuing Lender shall be responsible only to examine the
documents delivered under such Letter of Credit with reasonable care so as to
ascertain whether they appear on their face to be in accordance with the terms
and conditions of such Letter of Credit.
B. Reimbursement by Company of Amounts Paid Under Letters of Credit.
In the event an Issuing Lender has determined to honor a drawing under a Letter
of Credit issued by it, such Issuing Lender shall immediately notify Company and
Administrative Agent, and Company shall reimburse such Issuing Lender on or
before the Business Day immediately following the date on which such drawing is
honored (the "Reimbursement Date") in an amount in Dollars and in same day funds
equal to the amount of such honored drawing; provided that, anything contained
--------
in this Agreement to the contrary notwithstanding, (i) unless Company shall have
notified Administrative Agent and such Issuing Lender prior to 10:00 A.M.
67
(New York City time) on the date such drawing is honored that Company intends to
reimburse such Issuing Lender for the amount of such honored drawing with funds
other than the proceeds of Revolving Loans, Company shall be deemed to have
given a timely Notice of Borrowing to Administrative Agent requesting Lenders to
make Revolving Loans that are Base Rate Loans on the Reimbursement Date in an
amount in Dollars equal to the amount of such honored drawing and (ii) subject
to satisfaction or waiver of the conditions specified in subsection 4.3B,
Lenders shall, on the Reimbursement Date, make Revolving Loans that are Base
Rate Loans in the amount of such honored drawing, the proceeds of which shall be
applied directly by Administrative Agent to reimburse such Issuing Lender for
the amount of such honored drawing; and provided, further that if for any reason
-------- -------
proceeds of Revolving Loans are not received by such Issuing Lender on the
Reimbursement Date in an amount equal to the amount of such honored drawing,
Company shall reimburse such Issuing Lender, on demand, in an amount in same day
funds equal to the excess of the amount of such honored drawing over the
aggregate amount of such Revolving Loans, if any, which are so received.
Nothing in this subsection 3.3B shall be deemed to relieve any Lender from its
obligation to make Revolving Loans on the terms and conditions set forth in this
Agreement, and Company shall retain any and all rights it may have against any
Lender resulting from the failure of such Lender to make such Revolving Loans
under this subsection 3.3B.
C. Payment by Lenders of Unreimbursed Amounts Paid Under Letters of
Credit.
(i) Payment by Lenders. In the event that Company shall fail
------------------
for any reason to reimburse any Issuing Lender as provided in subsection
3.3B in an amount equal to the amount of any drawing honored by such
Issuing Lender under a Letter of Credit issued by it, such Issuing Lender
shall promptly notify each other Lender of the unreimbursed amount of such
honored drawing and of such other Lender's respective participation therein
based on such Lender's Pro Rata Share. Each Lender shall make available to
such Issuing Lender an amount equal to its respective participation, in
Dollars and in same day funds, at the office of such Issuing Lender
specified in such notice, not later than 12:00 Noon (New York City time) on
the first business day (under the laws of the jurisdiction in which such
office of such Issuing Lender is located) after the date notified by such
Issuing Lender. In the event that any Lender fails to make available to
such Issuing Lender on such business day the amount of such Lender's
participation in such Letter of Credit as provided in this subsection 3.3C,
such Issuing Lender shall be entitled to recover such amount on demand from
such Lender together with interest thereon at the rate customarily used by
such Issuing Lender for the correction of errors among banks for three
Business Days and thereafter at the Base Rate. Nothing in this subsection
3.3C shall be deemed to prejudice the right of any Lender to recover from
any Issuing Lender any amounts made available by such Lender to such
Issuing Lender pursuant to this subsection 3.3C in the event that it is
determined by the final judgment of a court of competent jurisdiction that
the payment with respect to a Letter of Credit by such Issuing Lender in
respect of which payment was made by such
68
Lender constituted gross negligence or willful misconduct on the part of
such Issuing Lender.
(ii) Distribution to Lenders of Reimbursements Received From
-------------------------------------------------------
Company. In the event any Issuing Lender shall have been reimbursed by
-------
other Lenders pursuant to subsection 3.3C(i) for all or any portion of any
drawing honored by such Issuing Lender under a Letter of Credit issued by
it, such Issuing Lender shall distribute to each other Lender which has
paid all amounts payable by it under subsection 3.3C(i) with respect to
such honored drawing such other Lender's Pro Rata Share of all payments
subsequently received by such Issuing Lender from Company in reimbursement
of such honored drawing when such payments are received. Any such
distribution shall be made to a Lender at its primary address set forth
below its name on the appropriate signature page hereof or at such other
address as such Lender may request.
D. Interest on Amounts Paid Under Letters of Credit.
(i) Payment of Interest by Company. Company agrees to pay to
------------------------------
each Issuing Lender, with respect to drawings honored under any Letters of
Credit issued by it, interest on the amount paid by such Issuing Lender in
respect of each such honored drawing from the date such drawing is honored
to but excluding the date such amount is reimbursed by Company (including
any such reimbursement out of the proceeds of Revolving Loans pursuant to
subsection 3.3B) at a rate equal to (a) for the period from the date such
drawing is honored to but excluding the Reimbursement Date, the rate then
in effect under this Agreement with respect to Revolving Loans that are
Base Rate Loans and (b) thereafter, a rate which is 2% per annum in excess
of the rate of interest otherwise payable under this Agreement with respect
to Revolving Loans that are Base Rate Loans. Interest payable pursuant to
this subsection 3.3D(i) shall be computed on the basis of a 360-day year
for the actual number of days elapsed in the period during which it accrues
and shall be payable on demand or, if no demand is made, on the date on
which the related drawing under a Letter of Credit is reimbursed in full.
(ii) Distribution of Interest Payments by Issuing Lender.
---------------------------------------------------
Promptly upon receipt by any Issuing Lender of any payment of interest
pursuant to subsection 3.3D(i) with respect to a drawing honored under a
Letter of Credit issued by it, (a) such Issuing Lender shall distribute to
each other Lender, out of the interest received by such Issuing Lender in
respect of the period from the date such drawing is honored to but
excluding the date on which such Issuing Lender is reimbursed for the
amount of such drawing (including any such reimbursement out of the
proceeds of Revolving Loans pursuant to subsection 3.3B), the amount that
such other Lender would have been entitled to receive in respect of the
letter of credit fee that would have been payable in respect of such Letter
of Credit for such period pursuant to subsection 3.2 if no drawing had been
honored under such Letter of Credit, and (b) in the event such Issuing
Lender shall have been reimbursed by other Lenders pursuant to subsection
3.3C(i) for all or any portion of
69
such honored drawing, such Issuing Lender shall distribute to each other
Lender which has paid all amounts payable by it under subsection 3.3C(i)
with respect to such honored drawing such other Lender's Pro Rata Share of
any interest received by such Issuing Lender in respect of that portion of
such honored drawing so reimbursed by other Lenders for the period from the
date on which such Issuing Lender was so reimbursed by other Lenders to but
excluding the date on which such portion of such honored drawing is
reimbursed by Company. Any such distribution shall be made to a Lender at
its primary address set forth below its name on the appropriate signature
page hereof or at such other address as such Lender may request.
3.4 Obligations Absolute.
--------------------
The obligation of Company to reimburse each Issuing Lender for
drawings honored under the Letters of Credit issued by it and to repay any
Revolving Loans made by Lenders pursuant to subsection 3.3B and the obligations
of Lenders under subsection 3.3C(i) shall be unconditional and irrevocable and
shall be paid strictly in accordance with the terms of this Agreement under all
circumstances including any of the following circumstances:
(i) any lack of validity or enforceability of any Letter of
Credit;
(ii) the existence of any claim, set-off, defense or other
right which Company or any Lender may have at any time against a
beneficiary or any transferee of any Letter of Credit (or any Persons for
whom any such transferee may be acting), any Issuing Lender or other Lender
or any other Person or, in the case of a Lender, against Company, whether
in connection with this Agreement, the transactions contemplated herein or
any unrelated transaction (including any underlying transaction between
Company or one of its Subsidiaries and the beneficiary for which any Letter
of Credit was procured);
(iii) any draft or other document presented under any 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) payment by the applicable Issuing Lender under any Letter
of Credit against presentation of a draft or other document which does not
substantially comply with the terms of such Letter of Credit;
(v) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of
Company or any of its Subsidiaries;
(vi) any breach of this Agreement or any other Loan Document by
any party thereto;
70
(vii) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing; or
(viii) the fact that an Event of Default or a Potential Event of
Default shall have occurred and be continuing;
provided, in each case, that payment by the applicable Issuing Lender under the
--------
applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of such Issuing Lender under the circumstances in question
(as determined by a final judgment of a court of competent jurisdiction).
3.5 Indemnification; Nature of Issuing Lenders' Duties.
--------------------------------------------------
A. Indemnification. In addition to amounts payable as provided in
subsection 3.6, Company hereby agrees to protect, indemnify, pay and save
harmless each Issuing Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of counsel and allocated costs of internal
counsel) which such Issuing Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Letter of Credit by such Issuing
Lender, other than as a result of (a) the gross negligence or willful misconduct
of such Issuing Lender as determined by a final judgment of a court of competent
jurisdiction or (b) subject to the following clause (ii), the wrongful dishonor
by such Issuing Lender of a proper demand for payment made under any Letter of
Credit issued by it or (ii) the failure of such Issuing Lender to honor a
drawing under any such Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure or de facto
government or governmental authority (all such acts or omissions herein called
"Governmental Acts").
B. Nature of Issuing Lenders' Duties. As between Company and any
Issuing Lender, Company assumes all risks of the acts and omissions of, or
misuse of the Letters of Credit issued by such Issuing Lender by, the respective
beneficiaries of such Letters of Credit. In furtherance and not in limitation of
the foregoing, such Issuing Lender shall not be responsible for: (i) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
any such Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) failure of the beneficiary of
any such Letter of Credit to comply fully with any conditions required in order
to draw upon such Letter of Credit; (iv) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any such
Letter of Credit or of the proceeds thereof; (vii) the misapplication by the
71
beneficiary of any such Letter of Credit of the proceeds of any drawing under
such Letter of Credit; or (viii) any consequences arising from causes beyond the
control of such Issuing Lender, including any Governmental Acts, and none of the
above shall affect or impair, or prevent the vesting of, any of such Issuing
Lender's rights or powers hereunder.
In furtherance and extension and not in limitation of the specific
provisions set forth in the first paragraph of this subsection 3.5B, any action
taken or omitted by any Issuing Lender under or in connection with the Letters
of Credit issued by it or any documents and certificates delivered thereunder,
if taken or omitted in good faith, shall not put such Issuing Lender under any
resulting liability to Company.
Notwithstanding anything to the contrary contained in this subsection
3.5, Company shall retain any and all rights it may have against any Issuing
Lender for any liability arising solely out of the gross negligence or willful
misconduct of such Issuing Lender, as determined by a final judgment of a court
of competent jurisdiction.
3.6 Increased Costs and Taxes Relating to Letters of Credit.
-------------------------------------------------------
Subject to the provisions of subsection 2.7B (which shall be
controlling with respect to the matters covered thereby), in the event that any
Issuing Lender or Lender shall reasonably determine (which determination shall,
absent manifest error, be final and conclusive and binding upon all parties
hereto) that any law, treaty or governmental rule, regulation or order, or any
change therein or in the interpretation, administration or application thereof
(including the introduction of any new law, treaty or governmental rule,
regulation or order), or any determination of a court or governmental authority,
in each case that becomes effective after the date hereof, or compliance by any
Issuing Lender or Lender with any guideline, request or directive issued or made
after the date hereof by any central bank or other governmental or quasi-
governmental authority (whether or not having the force of law):
(i) subjects such Issuing Lender or Lender (or its applicable
lending or letter of credit office) to any additional Tax (other than any
Tax on the overall net income of such Issuing Lender or Lender) with
respect to the issuing or maintaining of any Letters of Credit or the
purchasing or maintaining of any participations therein or any other
obligations under this Section 3, whether directly or by such being imposed
on or suffered by any particular Issuing Lender;
(ii) imposes, modifies or holds applicable any reserve
(including any marginal, emergency, supplemental, special or other
reserve), special deposit, compulsory loan, FDIC insurance or similar
requirement in respect of any Letters of Credit issued by any Issuing
Lender or participations therein purchased by any Lender; or
(iii) imposes any other condition (other than with respect to a
Tax matter) on or affecting such Issuing Lender or Lender (or its
applicable lending or letter
72
of credit office) regarding this Section 3 or any Letter of Credit or any
participation therein;
and the result of any of the foregoing is to increase the cost to such Issuing
Lender or Lender of agreeing to issue, issuing or maintaining any Letter of
Credit or agreeing to purchase, purchasing or maintaining any participation
therein or to reduce any amount received or receivable by such Issuing Lender or
Lender (or its applicable lending or letter of credit office) with respect
thereto; then, in any case, Company shall promptly pay to such Issuing Lender or
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts as may be necessary to compensate such Issuing
Lender or Lender for any such increased cost or reduction in amounts received or
receivable hereunder. Such Issuing Lender or Lender shall deliver to Company a
written statement, setting forth in reasonable detail the basis for calculating
the additional amounts owed to such Issuing Lender or Lender under this
subsection 3.6, which statement shall be conclusive and binding upon all parties
hereto absent manifest error.
Section 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT
The obligations of Lenders to make Loans and the issuance of Letters
of Credit hereunder are subject to the satisfaction of the following conditions.
4.1 Conditions to Existing Term Loans, Existing Revolving Loans and Letters of
--------------------------------------------------------------------------
Credit.
------
The conditions to the making of the Existing Term Loans, the Existing
Revolving Loans and the issuance of the Existing Letters of Credit have been
satisfied.
4.2 Conditions to Revolving Loans to be made on the Effective Date.
--------------------------------------------------------------
The obligations of Lenders to make the Revolving Loans to be made on
the Effective Date are, in addition to the conditions precedent specified in
subsection 4.3, subject to prior or concurrent satisfaction of the following
conditions:
A. Loan Party Documents. On or before the Effective Date, Holdings
and Company shall, and shall cause each other Loan Party to, deliver to Lenders
(or to Administrative Agent for Lenders with sufficient originally executed
copies, where appropriate, for each Lender and its counsel) the following with
respect to Company or such Loan Party, as the case may be, each, unless
otherwise noted, dated the Effective Date:
(i) Certified copies of the Certificate or Articles of
Incorporation of such Person, together with a good standing certificate
from the Secretary of State of its jurisdiction of incorporation and, as
requested by the Administrative Agent, each other state in which such
Person is qualified as a foreign corporation to do business and, to the
extent generally available, a certificate or other evidence of good
standing as to payment
73
of any applicable franchise or similar taxes from the appropriate taxing
authority of each of such jurisdictions, each dated a recent date prior to
the Effective Date;
(ii) Copies of the Bylaws of such Person, certified as of the
Effective Date by such Person's corporate secretary or an assistant
secretary;
(iii) Resolutions of the Board of Directors of such Person
approving and authorizing the execution, delivery and performance of the
Loan Documents and Related Agreements to which it is a party, certified as
of the Effective Date by the corporate secretary or an assistant secretary
of such Person as being in full force and effect without modification or
amendment;
(iv) Signature and incumbency certificates of the officers of
such Person executing the Loan Documents to which it is a party;
(v) Executed originals of the Loan Documents to which such
Person is a party; and
(vi) Such other documents as Administrative Agent may
reasonably request.
B. No Material Adverse Effect. Since December 31, 1998, no Material
Adverse Effect (in the good faith opinion of Administrative Agent) shall have
occurred.
C. Corporate and Capital Structure, Ownership, Management, Etc.
(i) Corporate Structure. The corporate organizational
-------------------
structure of Holdings and its Subsidiaries as of the Effective Date, both
before and after giving effect to the 1999 Acquisitions and the other
transactions contemplated hereby to occur on the Effective Date, shall be
as set forth on Schedule 4.2C annexed hereto.
-------------
(ii) Capital Structure and Ownership. The capital structure and
-------------------------------
ownership of Holdings and Company as of the Effective Date, both before and
after giving effect to the 1999 Acquisitions and the other transactions
contemplated hereby to occur on the Effective Date, shall be as set forth
on Schedule 4.2C annexed hereto.
-------------
(iii) Management. The management of Holdings and Company as of
----------
the Effective Date, both before and after giving effect to the 1999
Acquisitions and the other transactions contemplated hereby to occur on the
Effective Date, shall be as set forth on Schedule 4.2C annexed hereto.
-------------
74
D. Effective Date Investment; Issuance of Holdings Units and Senior
Notes.
(i) Effective Date Investment. Holdings shall have received
-------------------------
aggregate cash proceeds of not less than $25,000,000 from the issuance of
$6,600,000 of Holdings Common Stock and $18,400,000 of New Holdings
Preferred to MDCP.
(ii) Holdings Units. On or before the Effective Date, Holdings
--------------
shall have received gross cash proceeds of not less than $25,000,000 from
the issuance of the Holdings Units.
(iii) Senior Notes. On or before the Effective Date, Company
------------
shall have received gross cash proceeds of not less than $130,000,000 from
the issuance of the Senior Notes.
(iv) Use of Proceeds. Company shall have provided evidence
---------------
satisfactory to Administrative Agent that the proceeds of the debt and
equity capitalization of Holdings and Company described in the immediately
preceding clauses (i) and (ii) have been irrevocably committed, prior to
the application of the proceeds of the Revolving Loans to be made on the
Effective Date, to the repayment of a portion of the Existing Term Loans
and the PIK Sub Debt and the payment of a portion of the Acquisition
Financing Requirements and the Transaction Costs.
E. Related Agreements. Administrative Agent shall have received a
fully executed or conformed copy of each Related Agreement and any documents
executed in connection therewith, and each Related Agreement shall be in full
force and effect and no provision thereof shall have been modified or waived in
any respect determined by Administrative Agent to be material, in each case
without the consent of Administrative Agent and Requisite Lenders.
F. Existing Term Loans. On the Effective Date, Company shall have
repaid in full the Existing Term Loans.
G. Necessary Governmental Authorizations and Consents; Expiration of
Waiting Periods, Etc. Holdings and Company shall have obtained all Governmental
Authorizations and all consents of other Persons, in each case that are
necessary or advisable in connection with the 1999 Acquisitions, the other
transactions contemplated by the Loan Documents and the Related Agreements, and
the continued operation of the business conducted by Holdings and its
Subsidiaries in substantially the same manner as conducted prior to the
consummation of the 1999 Acquisitions, and each of the foregoing shall be in
full force and effect, in each case other than those the failure to obtain or
maintain which, either individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect. All applicable waiting periods shall
have expired without any action being taken or threatened by
75
any competent authority which would restrain, prevent or otherwise impose
adverse conditions on any of the 1999 Acquisitions or the financing thereof. No
action, request for stay, petition for review or rehearing, reconsideration, or
appeal with respect to any of the foregoing shall be pending, and the time for
any applicable agency to take action to set aside its consent on its own motion
shall have expired.
H. Consummation of the Effective Date Acquisitions.
(i) All conditions to (a) the Central Fabricators Acquisition,
as set forth in Articles VII and VIII of the Central Fabricators
Acquisition Agreement, and (b) the Tisco Acquisition, as set forth in
Articles 10 and 11 of the Tisco Acquisition Agreement, shall have been
satisfied or the fulfillment of any such conditions shall have been waived
with the consent of Administrative Agent and Requisite Lenders;
(ii) each of the Effective Date Acquisitions shall have become
effective in accordance with the terms of the applicable Effective Date
Acquisition Agreement;
(iii) the aggregate cash consideration paid to the holders of
equity interests in Central Fabricators in connection with the Central
Fabricators Acquisition shall not exceed $29,000,000;
(iv) the aggregate cash consideration paid to Tisco in
connection with the Tisco Acquisition shall not exceed $39,500,000;
(v) Transaction Costs shall not exceed $8,000,000, and
Administrative Agent shall have received evidence to its satisfaction to
such effect; and
(vi) Administrative Agent shall have received an Officer's
Certificate of Company to the effect set forth in clauses (i)-(v) above and
stating that Company will proceed to consummate the Effective Date
Acquisitions immediately upon the making of the initial Loans.
I. Security Interests in Personal and Mixed Property. To the extent
not otherwise satisfied pursuant to Loan Documents and filings made prior to the
Effective Date pursuant to the Existing Credit Agreement, Administrative Agent
shall have received evidence satisfactory to it that Holdings, Company and
Subsidiary Guarantors shall have taken or caused to be taken all such actions,
executed and delivered or caused to be executed and delivered all such
agreements, documents and instruments, and made or caused to be made all such
filings and recordings (other than the filing or recording of items described in
clauses (iii), (iv) and (v) below) that may be necessary or, in the opinion of
Administrative Agent, desirable in order to create in favor of Administrative
Agent, for the benefit of Lenders, a valid and (upon such filing
76
and recording) perfected First Priority security interest in the entire personal
and mixed property Collateral. Such actions shall include the following:
(i) Schedules to Collateral Documents. Delivery to
---------------------------------
Administrative Agent of accurate and complete schedules to all of the
applicable Collateral Documents.
(ii) Stock Certificates and Instruments. Delivery to
----------------------------------
Administrative Agent of (a) certificates (which certificates shall be
accompanied by irrevocable undated stock powers, duly endorsed in blank and
otherwise satisfactory in form and substance to Administrative Agent)
representing all capital stock pledged pursuant to the Holdings Pledge
Agreement, the Company Pledge Agreement and the Subsidiary Pledge
Agreements and (b) all promissory notes or other instruments (duly
endorsed, where appropriate, in a manner satisfactory to Administrative
Agent) evidencing any Collateral;
(iii) Lien Searches and UCC Termination Statements. Delivery
--------------------------------------------
to Administrative Agent of (a) the results of a recent search, by a Person
satisfactory to Administrative Agent, of all effective UCC financing
statements and fixture filings and all judgment and tax lien filings which
may have been made with respect to any personal or mixed property of any
Loan Party, together with copies of all such filings disclosed by such
search, and (b) UCC termination statements duly executed by all applicable
Persons for filing in all applicable jurisdictions as may be necessary to
terminate any effective UCC financing statements or fixture filings
disclosed in such search (other than any such financing statements or
fixture filings in respect of Liens permitted to remain outstanding
pursuant to the terms of this Agreement).
(iv) UCC Financing Statements and Fixture Filings. Delivery
--------------------------------------------
to Administrative Agent of UCC financing statements and, where appropriate,
fixture filings, duly executed by each applicable Loan Party with respect
to all personal and mixed property Collateral of such Loan Party, for
filing in all jurisdictions as may be necessary or, in the opinion of
Administrative Agent, desirable to perfect the security interests created
in such Collateral pursuant to the Collateral Documents;
(v) PTO Cover Sheets, Etc. Delivery to Administrative Agent
---------------------
of all cover sheets or other documents or instruments required to be filed
with the PTO in order to create or perfect Liens in respect of any IP
Collateral; and
(vi) Opinions of Local Counsel. Delivery to Administrative
-------------------------
Agent of an opinion of counsel (which counsel shall be reasonably
satisfactory to Administrative Agent) under the laws of each jurisdiction
in which any Loan Party or any personal or mixed property Collateral is
located with respect to the creation and perfection of the security
interests in favor of Administrative Agent in such Collateral and such
other matters governed by the laws of such jurisdiction regarding such
security interests as
77
Administrative Agent may reasonably request, in each case in form and
substance reasonably satisfactory to Administrative Agent.
J. Environmental Reports. Administrative Agent shall have received
reports or other information, in form, scope and substance satisfactory to
Administrative Agent, regarding environmental matters relating to Holdings and
its Subsidiaries and the Facilities.
K. Financial Statements; Pro Forma Balance Sheet. On or before the
Effective Date, Lenders shall have received from Company (i) audited financial
statements of Holdings and its Subsidiaries for Fiscal Years 1997 and 1998,
consisting of balance sheets and the related consolidated statements of income,
stockholders' equity and cash flows for such Fiscal Years, (ii) unaudited
financial statements of Holdings and its Subsidiaries as at June 30 1999,
consisting of a balance sheet and the related consolidated statements of income,
stockholders' equity and cash flows for the six-month period ending on such
date, all in reasonable detail and certified by the chief financial officer of
Holdings and Company that they fairly present the financial condition of
Holdings and its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, subject to changes
resulting from audit and normal year-end adjustments, and (iii) pro forma
consolidated balance sheets of Holdings and its Subsidiaries as at the Effective
Date, prepared in accordance with GAAP and reflecting the consummation of the
1999 Acquisitions, the related financings and the other transactions
contemplated by the Loan Documents and the Related Agreements, which pro forma
financial statements shall be in form and substance satisfactory to
Administrative Agent and Lenders.
L. Solvency Assurances. On the Effective Date, Administrative Agent
and Lenders shall have received a Financial Condition Certificate dated the
Effective Date, substantially in the form of Exhibit XIV annexed hereto and with
-----------
appropriate attachments, demonstrating that, after giving effect to the
consummation of the 1999 Acquisitions, the related financings and the other
transactions contemplated by the Loan Documents and the Related Agreements,
Company will be Solvent.
M. Evidence of Insurance. Administrative Agent shall have received
a certificate from Company's insurance broker or other evidence satisfactory to
it that all insurance required to be maintained pursuant to subsection 6.4 is in
full force and effect and that Administrative Agent on behalf of Lenders has
been named as additional insured and/or loss payee thereunder to the extent
required under subsection 6.4.
N. Opinions of Counsel to Loan Parties. Lenders and their
respective counsel shall have received (i) originally executed copies of one or
more favorable written opinions of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for Loan Parties,
in form and substance reasonably satisfactory to Administrative Agent and its
counsel, dated as of the Effective Date and setting forth substantially the
matters in the opinions designated in Exhibit X annexed hereto and as to such
---------
other matters as Administrative Agent acting on behalf of Lenders may reasonably
request
78
and (ii) evidence satisfactory to Administrative Agent that Company has
requested such counsel to deliver such opinions to Lenders.
O. Opinions of Administrative Agent's Counsel. Lenders shall have
received originally executed copies of one or more favorable written opinions of
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel to Administrative Agent, dated
as of the Effective Date, substantially in the form of Exhibit XI annexed hereto
----------
and as to such other matters as Administrative Agent acting on behalf of Lenders
may reasonably request.
P. Opinions of Counsel Delivered Under Related Agreements.
Administrative Agent and its counsel shall have received copies of each of the
opinions of counsel delivered to the parties under the Related Agreements,
together with a letter from each such counsel (to the extent not inconsistent
with such counsel's established internal policies) authorizing Lenders to rely
upon such opinion to the same extent as though it were addressed to Lenders.
Q. Fees. Company shall have paid to Administrative Agent, for
distribution (as appropriate) to Administrative Agent and Lenders, the fees
payable on the Effective Date referred to in subsection 2.3.
R. Representations and Warranties; Performance of Agreements.
Company shall have delivered to Administrative Agent an Officer's Certificate,
in form and substance satisfactory to Administrative Agent, to the effect that
the representations and warranties in Section 5 hereof are true, correct and
complete in all material respects on and as of the Effective Date to the same
extent as though made on and as of that date (or, to the extent such
representations and warranties specifically relate to an earlier date, that such
representations and warranties were true, correct and complete in all material
respects on and as of such earlier date) and that each Loan Party shall have
performed in all material respects all agreements and satisfied all conditions
which this Agreement provides shall be performed or satisfied by it on or before
the Effective Date except as otherwise disclosed to and agreed to in writing by
Administrative Agent and Requisite Lenders.
S. Completion of Proceedings. All corporate and other proceedings
taken or to be taken in connection with the transactions contemplated hereby and
all documents incidental thereto not previously found acceptable by
Administrative Agent, acting on behalf of Lenders, and its counsel shall be
satisfactory in form and substance to Administrative Agent and such counsel, and
Administrative Agent and such counsel shall have received all such counterpart
originals or certified copies of such documents as Administrative Agent may
reasonably request.
T. Repayment of Swing Line Loans. On the Effective Date,
immediately before and after giving effect to any borrowings hereunder on such
date, no Swing Line Loans shall be outstanding.
79
U. No Event of Default. Company shall have delivered to
Administrative Agent an Officer's Certificate, in form and substance
satisfactory to Administrative Agent, to the effect that immediately prior to
the Effective Date, no event has occurred and is continuing that would
constitute an Event of Default or Potential Event of Default under the Existing
Credit Agreement.
V. Reallocation of Pro Rata Shares. On the Effective Date, each
Lender that will have a greater Pro Rata Share of the Revolving Loan Commitments
on the Effective Date than its Pro Rata Share of the Revolving Loan Commitments
on (under and as defined in the Existing Credit Agreement) immediately prior to
the Effective Date (including any Lender not party to the Existing Credit
Agreement immediately prior to the Effective Date) (each a "Purchasing Lender"),
without executing an Assignment Agreement, shall be deemed to have automatically
purchased assignments pro rata from each Lender that will have a smaller Pro
Rata Share upon the Effective Date (a "Selling Lender") in all such Selling
Lenders' rights and obligations under this Agreement and the other Loan
Documents, with respect to Revolving Loan Commitments and Existing Revolving
Loans (collectively, except as set forth below, the "Assigned Rights and
Obligations") so that, after giving effect to such assignments, each Lender
shall have its respective Pro Rata Share as set forth in Schedule 2.1 of the
------------
Assigned Rights and Obligations. Each such purchase hereunder shall be at par
for a purchase price equal to the principal amount of Loans and without
recourse, representation or warranty, except that, each Selling Lender shall be
deemed to represent and warrant to each Purchasing Lender that the Assigned
Rights and Obligations of such Selling Lender are not subject to any Liens
created by that Selling Lender.
Administrative Agent shall calculate the net amount to be paid or received
by each Lender in connection with the assignments effected hereunder on the
Effective Date. Each Purchasing Lender required to make a payment shall make
the net amount of its required payment available to Administrative Agent, in
same day funds, at the Funding and Payment Office not later than 12:00 p.m. (New
York time) on the Effective Date. Administrative Agent shall distribute on the
Effective Date the proceeds of such amounts to the Selling Lenders entitled to
receive payments, pro rata in proportion to the amount each Selling Lender is
entitled to receive at the primary address set forth below such Selling Lender's
name on the signature pages hereof or at such other address as such Selling
Lender may request in writing to Administrative Agent.
4.3 Conditions to All Loans.
-----------------------
The obligations of Lenders to make Loans on each Funding Date are
subject to the following further conditions precedent:
A. Administrative Agent shall have received before that Funding
Date, in accordance with the provisions of subsection 2.1B, an originally
executed Notice of Borrowing, in each case signed by the chief executive
officer, the chief financial officer or the treasurer of
80
Company or by any officer of Company designated by any of the above-described
officers on behalf of Company in a writing delivered to Administrative Agent.
B. As of that Funding Date:
(i) The representations and warranties contained herein and in
the other Loan Documents shall be true, correct and complete in all
material respects on and as of that Funding Date to the same extent as
though made on and as of that date, except to the extent such
representations and warranties specifically relate to an earlier date, in
which case such representations and warranties shall have been true,
correct and complete in all material respects on and as of such earlier
date;
(ii) No event shall have occurred and be continuing or would
result from the consummation of the borrowing contemplated by such Notice
of Borrowing that would constitute an Event of Default or a Potential Event
of Default;
(iii) Each Loan Party shall have performed in all material
respects all agreements and satisfied all conditions which this Agreement
provides shall be performed or satisfied by it on or before that Funding
Date;
(iv) No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain any Lender from
making the Loans to be made by it on that Funding Date;
(v) The making of the Loans requested on such Funding Date
shall not violate any law including Regulation T, Regulation U or
Regulation X of the Board of Governors of the Federal Reserve System; and
(vi) There shall not be pending or, to the knowledge of
Company, threatened, any action, suit, proceeding, governmental
investigation or arbitration against or affecting Holdings or any of its
Subsidiaries or any property of Holdings or any of its Subsidiaries that
has not been disclosed by Company in writing pursuant to subsection 5.6 or
6.1(x) prior to the making of the last preceding Loans (or, in the case of
the initial Loans, prior to the execution of this Agreement), and there
shall have occurred no development not so disclosed in any such action,
suit, proceeding, governmental investigation or arbitration so disclosed,
that, in either event, in the opinion of Administrative Agent or of
Requisite Lenders, would be expected to have a Material Adverse Effect.
81
4.4. Conditions to Letters of Credit.
-------------------------------
The issuance of any Letter of Credit hereunder (whether or not the
applicable Issuing Lender is obligated to issue such Letter of Credit) is
subject to the following conditions precedent:
A. On or before the date of issuance of the initial Letter of
Credit pursuant to this Agreement, the initial Loans shall have been made.
B. On or before the date of issuance of such Letter of Credit,
Administrative Agent shall have received, in accordance with the provisions of
subsection 3.1B(i), an originally executed Notice of Issuance of Letter of
Credit, in each case signed by the chief executive officer, the chief financial
officer or the treasurer of Company or by any officer of Company designated by
any of the above-described officers on behalf of Company in a writing delivered
to Administrative Agent, together with all other information specified in
subsection 3.1B(i) and such other documents or information as the applicable
Issuing Lender may reasonably require in connection with the issuance of such
Letter of Credit.
C. On the date of issuance of such Letter of Credit, all
conditions precedent described in subsection 4.3B shall be satisfied to the same
extent as if the issuance of such Letter of Credit were the making of a Loan and
the date of issuance of such Letter of Credit were a Funding Date.
Section 5. REPRESENTATIONS AND WARRANTIES OF HOLDINGS AND COMPANY
In order to induce Lenders to enter into this Agreement and to make
the Loans, to induce Issuing Lenders to issue Letters of Credit and to induce
other Lenders to purchase participations therein, each of Holdings and Company
represents and warrants to each Lender, on the date of this Agreement, on each
Funding Date and on the date of issuance of each Letter of Credit, that the
following statements are true, correct and complete:
5.1 Organization, Powers, Qualification, Good Standing, Business and
----------------------------------------------------------------
Subsidiaries.
------------
A. Organization and Powers. Each Loan Party is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation as specified in Schedule 5.1 annexed hereto. Each
------------
Loan Party has all requisite corporate power and authority to own and operate
its properties, to carry on its business as now conducted and as proposed to be
conducted, to enter into the Loan Documents and Related Agreements to which it
is a party and to carry out the transactions contemplated thereby.
82
B. Qualification and Good Standing. Each Loan Party is qualified to
do business and in good standing in every jurisdiction where its assets are
located and wherever necessary to carry out its business and operations, except
in jurisdictions where the failure to be so qualified or in good standing has
not had and will not have a Material Adverse Effect.
C. Conduct of Business. Holdings and its Subsidiaries are engaged
only in the businesses permitted to be engaged by them in pursuant to subsection
7.13.
D. Subsidiaries. All of the Subsidiaries of Holdings are identified
in Schedule 5.1 annexed hereto, as said Schedule 5.1 may be supplemented from
------------ ------------
time to time pursuant to the provisions of subsection 6.1(xvii). The capital
stock of each of the Subsidiaries of Holdings identified in Schedule 5.1 annexed
------------
hereto (as so supplemented) is duly authorized, validly issued, fully paid and
nonassessable and none of such capital stock constitutes Margin Stock. Each of
the Subsidiaries of Holdings identified in Schedule 5.1 annexed hereto (as so
------------
supplemented) is a corporation duly organized, validly existing and in good
standing under the laws of its respective jurisdiction of incorporation set
forth therein, has all requisite corporate power and authority to own and
operate its properties and to carry on its business as now conducted and as
proposed to be conducted, and is qualified to do business and in good standing
in every jurisdiction where its assets are located and wherever necessary to
carry out its business and operations, in each case except where failure to be
so qualified or in good standing or a lack of such corporate power and authority
has not had and will not have a Material Adverse Effect. Schedule 5.1 annexed
------------
hereto (as so supplemented) correctly sets forth the ownership interest of
Holdings and each of its Subsidiaries in each of the Subsidiaries of Holdings
identified therein.
5.2 Authorization of Borrowing, etc.
-------------------------------
A. Authorization of Borrowing. The execution, delivery and
performance of the Loan Documents and the Related Agreements have been duly
authorized by all necessary corporate action on the part of each Loan Party that
is a party thereto.
B. No Conflict. The execution, delivery and performance by Loan
Parties of the Loan Documents and the Related Agreements to which they are
parties and the consummation of the transactions contemplated by the Loan
Documents and such Related Agreements do not and will not (i) violate any
provision of any law or any governmental rule or regulation applicable to
Holdings or any of its Subsidiaries, the Certificate or Articles of
Incorporation or Bylaws of Holdings or any of its Subsidiaries or any order,
judgment or decree of any court or other agency of government binding on
Holdings or any of its Subsidiaries, (ii) conflict with, result in a breach of
or constitute (with due notice or lapse of time or both) a default under any
Contractual Obligation of Holdings or any of its Subsidiaries, (iii) result in
or require the creation or imposition of any Lien upon any of the properties or
assets of Holdings or any of its Subsidiaries (other than any Liens created
under any of the Loan Documents in favor of Administrative Agent on behalf of
Lenders), or (iv) require any approval of stockholders or any approval or
consent of any Person under any Contractual Obligation of Holdings or any of its
83
Subsidiaries, except for such approvals or consents which will be obtained on or
before the Effective Date and disclosed in writing to Lenders.
C. Governmental Consents. The execution, delivery and performance
by Loan Parties of the Loan Documents and the Related Agreements to which they
are parties and the consummation of the transactions contemplated by the Loan
Documents and such Related Agreements do not and will not require any
registration with, consent or approval of, or notice to, or other action to,
with or by, any federal, state or other governmental authority or regulatory
body.
D. Binding Obligation. Each of the Loan Documents and Related
Agreements has been duly executed and delivered by each Loan Party that is a
party thereto and is the legally valid and binding obligation of such Loan
Party, enforceable against such Loan Party in accordance with its respective
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights generally
or by equitable principles relating to enforceability.
E. Valid Issuance of Holdings Common Stock, New Holdings Preferred,
Holdings Discount Debentures and Senior Notes.
(i) Holdings Common Stock and New Holdings Preferred. The
------------------------------------------------
Holdings Common Stock (including the Holdings Common Stock that comprises a
portion of the Holdings Units) and New Holdings Preferred sold or to be
sold on or before the Effective Date, when issued and delivered, will be
duly and validly issued, fully paid and nonassessable. No stockholder of
Holdings has or will have any preemptive rights to subscribe for any
additional equity Securities of Holdings. The issuance and sale of such
Holdings Common Stock and New Holdings Preferred, upon such issuance and
sale, will either (a) have been registered or qualified under applicable
federal and state securities laws or (b) be exempt therefrom.
(ii) Holdings Discount Debentures. Holdings has the
----------------------------
corporate power and authority to issue the Holdings Discount Debentures.
The Holdings Discount Debentures, when issued and paid for, will be the
legally valid and binding obligation of Holdings, enforceable against
Holdings in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating
to or limiting creditors' rights generally or by equitable principles
relating to enforceability. The Holdings Discount Debentures, when issued
and sold, will either (a) have been registered or qualified under
applicable federal and state securities laws or (b) be exempt therefrom.
(iii) Senior Notes. Company has the corporate power and
------------
authority to issue the Senior Notes. The Senior Notes, when issued and
paid for, will be the legally valid and binding obligation of Company,
enforceable against Company in accordance
84
with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting
creditors' rights generally or by equitable principles relating to
enforceability. The Senior Notes, when issued and sold, will either (a)
have been registered or qualified under applicable federal and state
securities laws or (b) be exempt therefrom.
5.3 Financial Condition.
-------------------
Company has heretofore delivered to Lenders, at Lenders' request, the
following financial statements and information: (i) the audited consolidated
balance sheets of Holdings and its Subsidiaries as at December 31, 1997 and
1998, and the related consolidated statements of income, stockholders' equity
and cash flows of Holdings and its Subsidiaries for the Fiscal Years then ended
and (ii) the unaudited consolidated balance sheet of Holdings and its
Subsidiaries as at June 30, 1999 and the related unaudited consolidated
statements of income, stockholders' equity and cash flows of Holdings and its
Subsidiaries for the six months then ended. All such statements were prepared
in conformity with GAAP and fairly present, in all material respects, the
financial position (on a consolidated basis) of the entities described in such
financial statements as at the respective dates thereof and the results of
operations and cash flows (on a consolidated basis) of the entities described
therein for each of the periods then ended, subject, in the case of any such
unaudited financial statements, to changes resulting from audit and normal year-
end adjustments. Neither Holdings nor any of its Subsidiaries has (and will not
have following the funding of the initial Loans) any Contingent Obligation,
contingent liability or liability for taxes, long-term lease or unusual forward
or long-term commitment that is not reflected in the foregoing financial
statements or the notes thereto and which in any such case is material in
relation to the business, operations, properties, assets, condition (financial
or otherwise) or prospects of Holdings or any of its Subsidiaries.
5.4 No Material Adverse Change; No Restricted Payments.
--------------------------------------------------
Since December 31, 1998, no event or change has occurred that has
caused or evidences, either in any case or in the aggregate, a Material Adverse
Effect. Neither Holdings nor any of its Subsidiaries has directly or indirectly
declared, ordered, paid or made, or set apart any sum or property for, any
Restricted Payment or agreed to do so except as permitted by subsection 7.5.
5.5 Title to Properties; Liens; Real Property .
-----------------------------------------
A. Title to Properties; Liens. Holdings and its Subsidiaries have
(i) good, sufficient and legal title to (in the case of fee interests in real
property), (ii) valid leasehold interests in (in the case of leasehold interests
in real or personal property), or (iii) good title to (in the case of all other
personal property), all of their respective properties and assets reflected in
the financial statements referred to in subsection 5.3 or in the most recent
financial statements delivered pursuant to subsection 6.1, in each case except
for assets disposed of since the date of
85
such financial statements in the ordinary course of business or as otherwise
permitted under subsection 7.7. Except as permitted by this Agreement, all such
properties and assets are free and clear of Liens.
B. Real Property. As of the Effective Date, Schedule 5.5 annexed
------------
hereto contains a true, accurate and complete list of (i) all Fee Properties and
Leasehold Properties and (ii) all leases, subleases or assignments of leases
(together with all amendments, modifications, supplements, renewals or
extensions of any thereof) affecting each Real Property Asset of any Loan Party,
regardless of whether such Loan Party is the landlord or tenant (whether
directly or as an assignee or successor in interest) under such lease, sublease
or assignment. Except as specified in Schedule 5.5 annexed hereto, each
------------
agreement listed in clause (ii) of the immediately preceding sentence is in full
force and effect and Company does not have knowledge of any default that has
occurred and is continuing thereunder, and each such agreement constitutes the
legally valid and binding obligation of each applicable Loan Party, enforceable
against such Loan Party in accordance with its terms, except as enforcement may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles.
5.6 Litigation; Adverse Facts.
-------------------------
There are no actions, suits, proceedings, arbitrations or governmental
investigations (whether or not purportedly on behalf of Holdings or any of its
Subsidiaries) at law or in equity, or before or by any federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign (including any Environmental Claims) that
are pending or, to the knowledge of Company, threatened against or affecting
Holdings or any of its Subsidiaries or any property of Holdings or any of its
Subsidiaries and that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect. Neither Holdings nor any of its
Subsidiaries (i) is in violation of any applicable laws (including Environmental
Laws), which violation, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect, or (ii) is subject to or in
default with respect to any final judgments, writs, injunctions, decrees, rules
or regulations of any court or any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect.
5.7 Payment of Taxes.
----------------
Except to the extent permitted by subsection 6.3, all tax returns and
reports of Holdings and its Subsidiaries required to be filed by any of them
have been timely filed, and all taxes shown on such tax returns to be due and
payable and all assessments, fees and other governmental charges upon Holdings
and its Subsidiaries and upon their respective properties, assets, income,
businesses and franchises which are due and payable have been paid when due and
payable. Company knows of no proposed tax assessment against Holdings or any of
its
86
Subsidiaries which is not being actively contested by Holdings or such
Subsidiary in good faith and by appropriate proceedings; provided that such
--------
reserves or other appropriate provisions, if any, as shall be required in
conformity with GAAP shall have been made or provided therefor.
5.8 Performance of Agreements; Materially Adverse Agreements; Material
------------------------------------------------------------------
Contracts.
---------
A. Neither Holdings nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse of time or both, would
constitute such a default, except where the consequences, direct or indirect, of
such default or defaults, if any, would not have a Material Adverse Effect.
B. Neither Holdings nor any of its Subsidiaries is a party to or is
otherwise subject to any agreements or instruments or any charter or other
internal restrictions which, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect.
C. Schedule 5.8 contains a true, correct and complete list of all
------------
the Material Contracts in effect on the Effective Date. Except as described on
Schedule 5.8, all such Material Contracts are in full force and effect and no
------------
material defaults currently exist thereunder.
5.9 Governmental Regulation.
-----------------------
Neither Holdings nor any of its Subsidiaries is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of the Obligations
unenforceable.
5.10 Securities Activities.
---------------------
A. Neither Holdings nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock.
B. Following application of the proceeds of each Loan, not more than
25% of the value of the assets (either of Holdings or Company only or of
Holdings and its Subsidiaries or Company and its Subsidiaries on a consolidated
basis) subject to the provisions of subsection 7.2 or 7.7 or subject to any
restriction contained in any agreement or instrument, between Holdings or
Company and any Lender or any Affiliate of any Lender, relating to Indebtedness
and within the scope of subsection 9.2, will be Margin Stock.
87
5.11 Employee Benefit Plans.
----------------------
A. Holdings, each of its Subsidiaries and each of their respective
ERISA Affiliates are in compliance with all applicable provisions and
requirements of ERISA and the regulations and published interpretations
thereunder with respect to each Employee Benefit Plan, and have performed all
their obligations under each Employee Benefit Plan (in each case except where
the failure to so comply or perform, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect). Each Employee Benefit
Plan which is intended to qualify under Section 401(a) of the Internal Revenue
Code has received a current determination letter from the Internal Revenue
Service stating that it is so qualified and, to the knowledge of Company, no
event has occurred since the date of such determination that would adversely
affect such determination (in each case except where the failure to be so
qualified, or the occurrence of any such event, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect).
B. No ERISA Event has occurred or is reasonably expected to occur
that, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
C. Except to the extent required under Section 4980B of the Internal
Revenue Code or except as set forth in Schedule 5.11 annexed hereto, no Employee
-------------
Benefit Plan provides health or welfare benefits (through the purchase of
insurance or otherwise) for any retired or former employee of Holdings, any of
its Subsidiaries or any of their respective ERISA Affiliates.
D. As of the most recent valuation date for any Pension Plan, the
amount of unfunded benefit liabilities (as defined in Section 4001(a)(18) of
ERISA), individually or in the aggregate for all Pension Plans (excluding for
purposes of such computation any Pension Plans with respect to which assets
exceed benefit liabilities), is not material.
E. As of the most recent valuation date for each Multiemployer Plan
for which the actuarial report is available, the potential liability of
Holdings, its Subsidiaries and their respective ERISA Affiliates for a complete
withdrawal from such Multiemployer Plan (within the meaning of Section 4203 of
ERISA), when aggregated with such potential liability for a complete withdrawal
from all Multiemployer Plans, based on information available pursuant to Section
4221(e) of ERISA, is not material.
5.12 Certain Fees.
------------
No broker's or finder's fee or commission will be payable with respect
to this Agreement or any of the transactions contemplated hereby, and Company
hereby indemnifies Lenders against, and agrees that it will hold Lenders
harmless from, any claim, demand or liability for any such broker's or finder's
fees alleged to have been incurred in connection herewith or therewith and any
expenses (including reasonable fees, expenses and disbursements of counsel)
arising in connection with any such claim, demand or liability.
88
5.13 Environmental Protection.
------------------------
A. Neither Holdings nor any of its Subsidiaries nor any of their
respective Facilities or operations are subject to any outstanding written
order, consent decree or settlement agreement with any Person relating to (a)
any Environmental Law, (b) any Environmental Claim, or (c) any Hazardous
Materials Activity that, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
B. Neither Holdings nor any of its Subsidiaries has received any
letter or other written request for information under Section 104 of the
Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C.
(S) 9604) or any comparable state law, in each case except with respect to
matters that, individually or in the aggregate, would not reasonably be expected
to have a Material Adverse Effect.
C. There are and, to Company's knowledge, have been no conditions,
occurrences, or Hazardous Materials Activities which could reasonably be
expected to form the basis of an Environmental Claim against Holdings or any of
its Subsidiaries that, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
D. Neither Holdings nor any of its Subsidiaries nor, to Company's
knowledge, any predecessor of Holdings or any of its Subsidiaries has filed any
notice under any Environmental Law indicating past or present treatment of
Hazardous Materials at any Facility, and none of Holdings' or any of its
Subsidiaries' operations involves the generation, transportation, treatment,
storage or disposal of hazardous waste, as defined under 40 C.F.R. Parts 260-270
or any state equivalent;, except where such past or present treatment, or such
generation, transportation, treatment, storage or disposal, individually or in
the aggregate, would not reasonably be expected to have a Material Adverse
Effect.
E. Compliance with all current or reasonably foreseeable future
requirements pursuant to or under Environmental Laws will not, individually or
in the aggregate, have a reasonable possibility of giving rise to a Material
Adverse Effect.
F. No event or condition has occurred or is occurring with respect
to Holdings or any of its Subsidiaries relating to any Environmental Law, any
Release of Hazardous Materials, or any Hazardous Materials Activity which,
individually or in the aggregate, has had or could reasonably be expected to
have a Material Adverse Effect.
5.14 Employee Matters.
----------------
There is no strike or work stoppage in existence or threatened
involving Holdings or any of its Subsidiaries that could reasonably be expected
to have a Material Adverse Effect.
89
5.15 Solvency.
--------
Each Loan Party is and, upon the incurrence of any Obligations by such
Loan Party on any date on which this representation is made, will be, Solvent.
5.16 Matters Relating to Collateral.
------------------------------
A. Creation, Perfection and Priority of Liens. The execution and
delivery of the Collateral Documents by Loan Parties, together with (i) the
actions taken on or prior to the date hereof pursuant to subsections 6.8 and 6.9
and (ii) the delivery to Administrative Agent of any Pledged Collateral not
delivered to Administrative Agent at the time of execution and delivery of the
applicable Collateral Document (all of which Pledged Collateral has been so
delivered) are effective to create in favor of Administrative Agent for the
benefit of Lenders, as security for the respective Secured Obligations (as
defined in the applicable Collateral Document in respect of any Collateral), a
valid and perfected First Priority Lien on all of the Collateral, and all
filings and other actions necessary or desirable to perfect and maintain the
perfection and First Priority status of such Liens have been duly made or taken
and remain in full force and effect, other than the filing of any UCC financing
statements delivered to Administrative Agent for filing (but not yet filed) and
the periodic filing of UCC continuation statements in respect of UCC financing
statements filed by or on behalf of Administrative Agent.
B. Governmental Authorizations. No authorization, approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for either (i) the pledge or grant by any Loan Party
of the Liens purported to be created in favor of Administrative Agent pursuant
to any of the Collateral Documents or (ii) the exercise by Administrative Agent
of any rights or remedies in respect of any Collateral (whether specifically
granted or created pursuant to any of the Collateral Documents or created or
provided for by applicable law), except for filings or recordings contemplated
by subsection 5.16A and except as may be required, in connection with the
disposition of any Pledged Collateral, by laws generally affecting the offering
and sale of securities.
C. Absence of Third-Party Filings. Except such as may have been
filed in favor of Administrative Agent as contemplated by subsection 5.16A, (i)
no effective UCC financing statement, fixture filing or other instrument similar
in effect covering all or any part of the Collateral is on file in any filing or
recording office and (ii) no effective filing covering all or any part of the IP
Collateral is on file in the PTO.
D. Margin Regulations. The pledge of the Pledged Collateral
pursuant to the Collateral Documents does not violate Regulation T, U or X of
the Board of Governors of the Federal Reserve System.
E. Information Regarding Collateral. All information supplied to
Administrative Agent by or on behalf of any Loan Party with respect to any of
the Collateral (in
90
each case taken as a whole with respect to any particular Collateral) is
accurate and complete in all material respects.
5.17 Related Agreements.
------------------
Company has delivered to Lenders complete and correct copies of each
Related Agreement and of all exhibits and schedules thereto.
5.18 Disclosure.
----------
No representation or warranty of Holdings or any of its Subsidiaries
contained in the Confidential Information Memorandum or in any Loan Document or
Related Agreement or in any other document, certificate or written statement
furnished to Lenders by or on behalf of Holdings or any of its Subsidiaries for
use in connection with the transactions contemplated by this Agreement contains
any untrue statement of a material fact or omits to state a material fact (known
to Company, in the case of any document not furnished by it) necessary in order
to make the statements contained herein or therein not misleading in light of
the circumstances in which the same were made. Any projections and pro forma
financial information contained in such materials are based upon good faith
estimates and assumptions believed by Company to be reasonable at the time made,
it being recognized by Lenders that such projections as to future events are not
to be viewed as facts and that actual results during the period or periods
covered by any such projections may differ from the projected results. There
are no facts known (or which should upon the reasonable exercise of diligence be
known) to Company (other than matters of a general economic nature) that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect and that have not been disclosed herein or in such other
documents, certificates and statements furnished to Lenders for use in
connection with the transactions contemplated hereby.
Section 6. AFFIRMATIVE COVENANTS OF HOLDINGS AND COMPANY
Each of Holdings and Company covenants and agrees that, so long as any
of the Commitments hereunder shall remain in effect and until payment in full of
all of the Loans and other Obligations and the cancellation or expiration of all
Letters of Credit, unless Requisite Lenders shall otherwise give prior written
consent, each of Holdings and Company shall perform, and shall cause each of its
respective Subsidiaries to perform, all covenants in this Section 6.
6.1 Financial Statements and Other Reports.
--------------------------------------
Holdings and Company will maintain, and will cause each of their
respective Subsidiaries to maintain, a system of accounting established and
administered in accordance with sound business practices to permit preparation
of financial statements in conformity with GAAP. Company will deliver to
Administrative Agent and Lenders:
91
(i) Monthly Financials: as soon as available and in any event
------------------
within 30 days after the end of each month ending after the Effective Date,
(a) the consolidated balance sheet of Holdings and its Subsidiaries as at
the end of such month and the related consolidated statements of income,
stockholders' equity and cash flows of Holdings and its Subsidiaries for
such month and for the period from the beginning of the then current Fiscal
Year to the end of such month, setting forth in each case in comparative
form the corresponding figures for the corresponding periods of the
previous Fiscal Year and the corresponding figures from the Financial Plan
for the current Fiscal Year, to the extent prepared on a monthly basis, all
in reasonable detail and certified by the chief financial officer of
Holdings and Company that they fairly present, in all material respects,
the financial condition of Holdings and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for the
periods indicated, subject to changes resulting from audit and normal year-
end adjustments, and (b) a narrative report describing the operations of
Holdings and its Subsidiaries in the form prepared for presentation to
senior management for such month and for the period from the beginning of
the then current Fiscal Year to the end of such month;
(ii) Quarterly Financials: as soon as available and in any
--------------------
event within 45 days after the end of each Fiscal Quarter, (a) the
consolidated balance sheet of Holdings and its Subsidiaries as at the end
of such Fiscal Quarter and the related consolidated statements of income,
stockholders' equity and cash flows of Holdings and its Subsidiaries for
such Fiscal Quarter and for the period from the beginning of the then
current Fiscal Year to the end of such Fiscal Quarter, setting forth in
each case in comparative form the corresponding figures for the
corresponding periods of the previous Fiscal Year and the corresponding
figures from the Financial Plan for the current Fiscal Year, all in
reasonable detail and certified by the chief financial officer of Holdings
and Company that they fairly present, in all material respects, the
financial condition of Holdings and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for the
periods indicated, subject to changes resulting from audit and normal year-
end adjustments, and (b) a narrative report describing the operations of
Holdings and its Subsidiaries in the form prepared for presentation to
senior management for such Fiscal Quarter and for the period from the
beginning of the then current Fiscal Year to the end of such Fiscal
Quarter;
(iii) Year-End Financials: as soon as available and in any
-------------------
event within 90 days after the end of each Fiscal Year, (a) the
consolidated balance sheet of Holdings and its Subsidiaries as at the end
of such Fiscal Year and the related consolidated statements of income,
stockholders' equity and cash flows of Holdings and its Subsidiaries for
such Fiscal Year, setting forth in each case in comparative form the
corresponding figures for the previous Fiscal Year and the corresponding
figures from the Financial Plan for the Fiscal Year covered by such
financial statements, all in reasonable detail and certified by the chief
financial officer of Holdings and Company that they fairly present, in all
material respects, the financial condition of Holdings and its Subsidiaries
as at the dates indicated and the results of their operations and their
cash flows for the periods indicated, (b) a narrative report describing the
operations of Holdings and its
92
Subsidiaries in the form prepared for presentation to senior management for
such Fiscal Year, and (c) in the case of such consolidated financial
statements, a report thereon of Ernst & Young or other independent
certified public accountants of recognized national standing selected by
Company and satisfactory to Administrative Agent, which report shall be
unqualified, shall express no doubts about the ability of Holdings and its
Subsidiaries to continue as a going concern, and shall state that such
consolidated financial statements fairly present, in all material respects,
the consolidated financial position of Holdings and its Subsidiaries as at
the dates indicated and the results of their operations and their cash
flows for the periods indicated in conformity with GAAP applied on a basis
consistent with prior years (except as otherwise disclosed in such
financial statements) and that the examination by such accountants in
connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards;
(iv) Officer's and Compliance Certificates: together with
-------------------------------------
each delivery of financial statements of Holdings and its Subsidiaries
pursuant to subdivisions (i), (ii) and (iii) above, (a) an Officer's
Certificate of Company stating that the signers have reviewed the terms of
this Agreement and have made, or caused to be made under their supervision,
a review in reasonable detail of the transactions and condition of Holdings
and its Subsidiaries during the accounting period covered by such financial
statements and that such review has not disclosed the existence during or
at the end of such accounting period, and that the signers do not have
knowledge of the existence as at the date of such Officer's Certificate, of
any condition or event that constitutes an Event of Default or Potential
Event of Default, or, if any such condition or event existed or exists,
specifying the nature and period of existence thereof and what action
Company has taken, is taking and proposes to take with respect thereto; (b)
a Compliance Certificate demonstrating in reasonable detail compliance
during and at the end of the applicable accounting periods with the
restrictions contained in Section 7, in each case to the extent compliance
with such restrictions is required to be tested at the end of the
applicable accounting period, and (c) with respect to any Net Asset Sale
Proceeds or Net Insurance/Condemnation Proceeds received by Company or any
of its Subsidiaries during the second Fiscal Quarter immediately preceding
the Fiscal Quarter in which the applicable accounting period ends, whether
or not all or any portion of such Net Asset Sale Proceeds or Net
Insurance/Condemnation Proceeds shall have become Unreinvested Asset Sale
Proceeds or Unreinvested Insurance/Condemnation Proceeds, as the case may
be;
(v) Reconciliation Statements: if, as a result of any change
-------------------------
in accounting principles and policies from those used in the preparation of
the audited financial statements referred to in subsection 5.3, the
consolidated financial statements of Holdings and its Subsidiaries
delivered pursuant to subdivisions (i), (ii), (iii) or (xiii) of
93
this subsection 6.1 will differ in any material respect from the
consolidated financial statements that would have been delivered pursuant
to such subdivisions had no such change in accounting principles and
policies been made, then (a) together with the first delivery of financial
statements pursuant to subdivision (i), (ii), (iii) or (xiii) of this
subsection 6.1 following such change, consolidated financial statements of
Holdings and its Subsidiaries for (y) the current Fiscal Year to the
effective date of such change and (z) the two full Fiscal Years immediately
preceding the Fiscal Year in which such change is made, in each case
prepared on a pro forma basis as if such change had been in effect during
such periods, and (b) together with each delivery of financial statements
pursuant to subdivision (i), (ii), (iii) or (xiii) of this subsection 6.1
following such change, a written statement of the chief accounting officer
or chief financial officer of Holdings and Company setting forth the
differences (including any differences that would affect any calculations
relating to the financial covenants set forth in subsection 7.6) which
would have resulted if such financial statements had been prepared without
giving effect to such change;
(vi) Accountants' Certification: together with each delivery
--------------------------
of consolidated financial statements of Holdings and its Subsidiaries
pursuant to subdivision (iii) above, a written statement by the independent
certified public accountants giving the report thereon (a) stating that
their audit examination has included a review of the terms of this
Agreement and the other Loan Documents as they relate to accounting
matters, (b) stating whether, in connection with their audit examination,
any condition or event that constitutes an Event of Default or Potential
Event of Default has come to their attention and, if such a condition or
event has come to their attention, specifying the nature and period of
existence thereof; provided that such accountants shall not be liable by
--------
reason of any failure to obtain knowledge of any such Event of Default or
Potential Event of Default that would not be disclosed in the course of
their audit examination, and (c) stating that based on their audit
examination nothing has come to their attention that causes them to believe
either or both that the information contained in the certificates delivered
therewith pursuant to subdivision (iv) above is not correct or that the
matters set forth in the Compliance Certificates delivered therewith
pursuant to clause (b) of subdivision (iv) above for the applicable Fiscal
Year are not stated in accordance with the terms of this Agreement;
(vii) Accountants' Reports: promptly upon receipt thereof
--------------------
(unless restricted by applicable professional standards), copies of all
reports submitted to Holdings or Company by independent certified public
accountants in connection with each annual, interim or special audit of the
financial statements of Holdings and its Subsidiaries made by such
accountants, including any comment letter submitted by such accountants to
management in connection with their annual audit;
(viii) SEC Filings and Press Releases: promptly upon their
------------------------------
becoming available, copies of (a) all financial statements, reports,
notices and proxy statements sent
94
or made available generally by Holdings or Company to their respective
security holders or by any Subsidiary of Holdings to its security holders
other than Holdings or another Subsidiary of Holdings, (b) all regular and
periodic reports and all registration statements (other than on Form S-8 or
a similar form) and prospectuses, if any, filed by Holdings or any of its
Subsidiaries with any securities exchange or with the Securities and
Exchange Commission or any governmental or private regulatory authority,
and (c) all press releases and other statements made available generally by
Holdings or any of its Subsidiaries to the public concerning material
developments in the business of Holdings or any of its Subsidiaries;
(ix) Events of Default, etc.: promptly upon any officer of
-----------------------
Company obtaining knowledge (a) of any condition or event that constitutes
an Event of Default or Potential Event of Default, or becoming aware that
any Lender has given any notice (other than to Administrative Agent) or
taken any other action with respect to a claimed Event of Default or
Potential Event of Default, (b) that any Person has given any notice to
Holdings or any of its Subsidiaries or taken any other action with respect
to a claimed default or event or condition of the type referred to in
subsection 9.2, (c) of any condition or event that would be required to be
disclosed in a current report filed by Holdings or Company with the
Securities and Exchange Commission on Form 8-K (Items 1, 2, 4, 5 and 6 of
such Form as in effect on the date hereof) if Holdings or Company were
required to file such reports under the Exchange Act, or (d) of the
occurrence of any event or change that has caused or evidences, either in
any case or in the aggregate, a Material Adverse Effect, an Officer's
Certificate specifying the nature and period of existence of such
condition, event or change, or specifying the notice given or action taken
by any such Person and the nature of such claimed Event of Default,
Potential Event of Default, default, event or condition, and what action
Holdings or Company has taken, is taking and proposes to take with respect
thereto;
(x) Litigation or Other Proceedings: promptly upon any
-------------------------------
officer of Company obtaining knowledge of (a) the institution of, or non-
frivolous threat of, any action, suit, proceeding (whether administrative,
judicial or otherwise), governmental investigation or arbitration against
or affecting Holdings or any of its Subsidiaries or any property of
Holdings or any of its Subsidiaries (collectively, "Proceedings") not
previously disclosed in writing by Company to Lenders or (b) any material
development in any Proceeding that, in any case:
(1) if adversely determined, has a reasonable possibility of
giving rise to a Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the consummation of,
or to recover any damages or obtain relief as a result of, the
transactions contemplated hereby;
95
written notice thereof together with such other information as may be
reasonably available to Company to enable Lenders and their counsel to
evaluate such matters;
(xi) ERISA Events: promptly upon becoming aware of the
------------
occurrence of or forthcoming occurrence of any ERISA Event, a written
notice specifying the nature thereof, what action Holdings, any of its
Subsidiaries or any of their respective ERISA Affiliates has taken, is
taking or proposes to take with respect thereto and, when known, any action
taken or threatened by the Internal Revenue Service, the Department of
Labor or the PBGC with respect thereto;
(xii) ERISA Notices: with reasonable promptness, copies of (a)
-------------
each Schedule B (Actuarial Information) to the annual report (Form 5500
Series) filed by Holdings, any of its Subsidiaries or any of their
respective ERISA Affiliates with the Internal Revenue Service with respect
to each Pension Plan; (b) all notices received by Holdings, any of its
Subsidiaries or any of their respective ERISA Affiliates from a
Multiemployer Plan sponsor concerning an ERISA Event; and (c) copies of
such other documents or governmental reports or filings relating to any
Employee Benefit Plan as Administrative Agent shall reasonably request;
(xiii) Financial Plans: as soon as practicable and in any event
---------------
no later than the end of each Fiscal Year, a consolidated plan and
financial forecast for the immediately succeeding Fiscal Year (the
"Financial Plan" for such Fiscal Year), including (a) a forecasted
consolidated balance sheet and forecasted consolidated statements of income
and cash flows of Holdings and its Subsidiaries for such Fiscal Year,
together with a pro forma Compliance Certificate for such Fiscal Year and
--- -----
an explanation of the assumptions on which such forecasts are based, (b)
forecasted consolidated statements of income and cash flows of Holdings and
its Subsidiaries for each month of such Fiscal Year, together with an
explanation of the assumptions on which such forecasts are based, (c) the
amount of forecasted unallocated overhead for such Fiscal Year, and (d)
such other information and projections as any Lender may reasonably
request;
(xiv) Insurance: as soon as practicable after any decision by
---------
Holdings or any of its Subsidiaries to implement a material change in the
insurance coverage maintained or to be maintained by Holdings or any of its
Subsidiaries (including any material change in the extent of self-insurance
maintained or to be maintained by Holdings or any of its Subsidiaries), a
report in form and substance reasonably satisfactory to Administrative
Agent outlining such change;
(xv) Board of Directors: with reasonable promptness, written
------------------
notice of any change in the Board of Directors of Holdings or Company;
96
(xvi) New Subsidiaries: promptly upon any Person becoming a
----------------
Subsidiary of Holdings, a written notice setting forth with respect to such
Person (a) the date on which such Person became a Subsidiary of Holdings
and (b) all of the data required to be set forth in Schedule 5.1 annexed
------------
hereto with respect to all Subsidiaries of Holdings (it being understood
that such written notice shall be deemed to supplement Schedule 5.1 annexed
------------
hereto for all purposes of this Agreement;
(xvii) Material Contracts: promptly, and in any event within
------------------
ten Business Days after any Material Contract of Holdings or any of its
Subsidiaries is terminated or amended in a manner that is materially
adverse to Holdings or such Subsidiary, as the case may be, or any new
Material Contract is entered into, a written statement describing such
event with copies of such material amendments or new contracts, and an
explanation of any actions being taken with respect thereto;
(xviii) UCC Search Report: As promptly as practicable after
-----------------
the date of delivery to Administrative Agent of any UCC financing statement
executed by any Loan Party pursuant to subsection 4.2I or 6.8A, copies of
completed UCC searches evidencing the proper filing, recording and indexing
of all such UCC financing statement and listing all other effective
financing statements that name such Loan Party as debtor, together with
copies of all such other financing statements not previously delivered to
Administrative Agent by or on behalf of Company or such Loan Party; and
(xix) Other Information: with reasonable promptness, such
-----------------
other information and data with respect to Holdings or any of its
Subsidiaries as from time to time may be reasonably requested by any
Lender.
6.2 Corporate Existence, etc.
------------------------
Except as permitted under subsection 7.7, Holdings and Company will,
and will cause each of their respective Subsidiaries to, at all times preserve
and keep in full force and effect its corporate existence and all rights and
franchises material to its business; provided, however that neither Company nor
-------- -------
any of its Subsidiaries shall be required to preserve any such right or
franchise if the Board of Directors of Company or such Subsidiary shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of Company or such Subsidiary, as the case may be, and that the
loss thereof is not disadvantageous in any material respect to Company, such
Subsidiary or Lenders.
6.3 Payment of Taxes and Claims; Tax Consolidation.
----------------------------------------------
A. Each of Holdings and Company will, and will cause each of its
Subsidiaries to, pay all taxes, assessments and other governmental charges
imposed upon it or any of its properties or assets or in respect of any of its
income, businesses or franchises before any material penalty accrues thereon,
and all claims (including claims for labor, services,
97
materials and supplies) for sums that have become due and payable and that by
law have or may become a Lien upon any of its properties or assets, prior to the
time when any material penalty or fine shall be incurred with respect thereto;
provided that no such charge or claim need be paid if it is being contested in
--------
good faith by appropriate proceedings promptly instituted and diligently
conducted, so long as (1) such reserve or other appropriate provision, if any,
as shall be required in conformity with GAAP shall have been made therefor and
(2) in the case of a charge or claim which has or may become a Lien against any
of the Collateral, such contest proceedings conclusively operate to stay the
sale of any portion of the Collateral to satisfy such charge or claim.
B. Neither Holdings nor Company will, nor will it permit any of its
Subsidiaries to, file or consent to the filing of any consolidated income tax
return with any Person (other than Holdings or any of its Subsidiaries).
6.4 Maintenance of Properties; Insurance.
------------------------------------
A. Maintenance of Properties. Each of Holdings and Company will,
and will cause each of its Subsidiaries to, maintain or cause to be maintained
in good repair, working order and condition, ordinary wear and tear excepted,
all material properties used or useful in the business of Holdings or any of its
Subsidiaries (including all Intellectual Property) and from time to time will
make or cause to be made all appropriate repairs, renewals and replacements
thereof.
B. Insurance. Company will maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability insurance, third
party property damage insurance, business interruption insurance and casualty
insurance with respect to liabilities, losses or damage in respect of the
assets, properties and businesses of Holdings and its Subsidiaries as may
customarily be carried or maintained under similar circumstances by corporations
of established reputation engaged in similar businesses, in each case in such
amounts (giving effect to self-insurance), with such deductibles, covering such
risks and otherwise on such terms and conditions as shall be customary for
corporations similarly situated in the industry. Without limiting the
generality of the foregoing, Company will maintain or cause to be maintained (i)
flood insurance with respect to each Flood Hazard Property that is located in a
community that participates in the National Flood Insurance Program, in each
case in compliance with any applicable regulations of the Board of Governors of
the Federal Reserve System, and (ii) replacement value casualty insurance on the
Collateral under such policies of insurance, with such insurance companies, in
such amounts, with such deductibles, and covering such risks as are at all times
satisfactory to Administrative Agent in its commercially reasonable judgment.
Each such policy of insurance shall (a) name Administrative Agent for the
benefit of Lenders as an additional insured thereunder as its interests may
appear and (b) contain a loss payable clause or endorsement, satisfactory in
form and substance to Administrative Agent, that names Administrative Agent for
the benefit of Lenders as the loss payee thereunder for any covered loss in
excess of $100,000 and provides for at least 30 days prior written notice to
Administrative Agent of any modification or cancellation of such policy.
98
6.5 Inspection Rights; Lender Meeting.
---------------------------------
A. Inspection Rights. Holdings and Company shall, and shall cause
each of their respective Subsidiaries to, permit any authorized representatives
designated by any Lender to visit and inspect any of the properties of Holdings
or of any of its Subsidiaries, to inspect, copy and take extracts from its and
their financial and accounting records, and to discuss its and their affairs,
finances and accounts with its and their officers and independent public
accountants (provided that Company may, if it so chooses, be present at or
participate in any such discussion), all upon reasonable notice and at such
reasonable times during normal business hours and as often as may reasonably be
requested.
B. Lender Meeting. Company will, upon the request of Administrative
Agent or Requisite Lenders, participate in a meeting of Administrative Agent and
Lenders once during each Fiscal Year to be held at Company's corporate offices
(or at such other location as may be agreed to by Company and Administrative
Agent) at such time as may be agreed to by Company and Administrative Agent.
6.6 Compliance with Laws, etc.
-------------------------
Each of Holdings and Company shall comply, and shall cause each of its
Subsidiaries and all other Persons on or occupying any Facilities to comply,
with the requirements of all applicable laws, rules, regulations and orders of
any governmental authority (including all Environmental Laws), noncompliance
with which could reasonably be expected to cause, individually or in the
aggregate, a Material Adverse Effect.
6.7 Environmental Review and Investigation, Disclosure, Etc.; Company's Actions
---------------------------------------------------------------------------
Regarding Hazardous Materials Activities, Environmental Claims and
------------------------------------------------------------------
Violations of Environmental Laws.
--------------------------------
A. Environmental Review and Investigation. Company agrees that
Administrative Agent may, from time to time and in its reasonable discretion,
(i) retain, at Company's expense, an independent professional consultant to
review any environmental audits, investigations, analyses and reports relating
to Hazardous Materials prepared by or for Company and delivered to
Administrative Agent and Lenders pursuant to subsection 6.7B(i), and (ii) in the
event (a) Administrative Agent reasonably believes that Company has breached any
representation, warranty or covenant contained in subsection 5.6, 5.13, 6.6 or
6.7 or that there has been a material violation of Environmental Laws at any
Facility or by Holdings or any of its Subsidiaries at any other location, which
breach or violation, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect, or (b) an Event of Default has
occurred and is continuing, conduct its own investigation, which shall be
reasonable in scope under all relevant circumstances, of any Facility currently
owned, leased, operated or used by Holdings or any of its Subsidiaries. Any
such investigation of any Facility shall be conducted, unless otherwise agreed
to by Company and Administrative Agent, during normal business hours
99
and, to the extent reasonably practicable, shall be conducted so as not to
interfere with the ongoing operations at such Facility or to cause any damage or
loss to any property at such Facility. Company, Administrative Agent and Lenders
hereby acknowledge and agree that (1) any report of any investigation conducted
at the request of Administrative Agent pursuant to this subsection 6.7A will be
obtained and shall be used by Administrative Agent and Lenders for the purposes
of Lenders' internal credit decisions, to monitor and police the Loans and to
protect Lenders' security interests, if any, created by the Loan Documents, and
(2) any such report, and the contents thereof, shall be held on a confidential
basis in accordance with the provisions of subsection 11.19 applicable to non-
public information identified by Company as confidential. Administrative Agent
agrees to deliver a copy of any such report to Company with the understanding
that Company acknowledges and agrees that (x) it will indemnify and hold
harmless Administrative Agent and each Lender from any costs, losses or
liabilities relating to Company's use of or reliance on such report, (y) neither
Administrative Agent nor any Lender makes any representation or warranty with
respect to such report, and (z) by delivering such report to Company, neither
Administrative Agent nor any Lender is requiring or recommending the
implementation of any suggestions or recommendations contained in such report.
B. Environmental Disclosure. Company will deliver to Administrative
Agent and Lenders:
(i) Environmental Audits and Reports. As soon as practicable
--------------------------------
following receipt thereof, copies of all environmental audits,
investigations, analyses and reports of any kind or character, whether
prepared by personnel of Holdings or any of its Subsidiaries or by
independent consultants, governmental authorities or any other Persons,
with respect to significant environmental matters at any Facility which,
individually or in the aggregate, could reasonably be expected to result in
a Material Adverse Effect or with respect to any Environmental Claims
which, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect;
(ii) Notice of Certain Releases, Remedial Actions, Etc. Promptly
-------------------------------------------------
upon the occurrence thereof, written notice describing in reasonable detail
(a) any Release required to be reported to any federal, state or local
governmental or regulatory agency under any applicable Environmental Laws,
which Release has a reasonable possibility of giving rise to a Material
Adverse Effect, or (b) any remedial action taken by Company or any other
Person in response to (1) any Hazardous Materials Activities the existence
of which has a reasonable possibility of resulting in one or more
Environmental Claims having, individually or in the aggregate, a Material
Adverse Effect, or (2) any Environmental Claims that, individually or in
the aggregate, have a reasonable possibility of resulting in a Material
Adverse Effect.
(iii) Written Communications Regarding Environmental Claims,
-----------------------------------------------------
Releases, Etc. As soon as practicable following the sending or receipt
-------------
thereof by Holdings or any of its Subsidiaries, a copy of any and all
written communications with
100
respect to (a) any Environmental Claims that, individually or in the
aggregate, have a reasonable possibility of giving rise to a Material
Adverse Effect, (b) any Release required to be reported to any federal,
state or local governmental or regulatory agency, which Release has a
reasonable possibility of giving rise to a Material Adverse Effect, and (c)
any request for information from any governmental agency that suggests such
agency is investigating whether Holdings or any of its Subsidiaries may be
potentially responsible for any Hazardous Materials Activity, which
responsibility has a reasonable possibility of giving rise to a Material
Adverse Effect.
(iv) Notice of Certain Proposed Actions Having Environmental
-------------------------------------------------------
Impact. Prompt written notice describing in reasonable detail (a) any
------
proposed acquisition of stock, assets, or property by Holdings or any of
its Subsidiaries that could reasonably be expected to (1) expose Holdings
or any of its Subsidiaries to, or result in, Environmental Claims that
could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect or (2) affect, in any manner which could reasonably
be expected to give rise to a Material Adverse Effect, the ability of
Holdings or any of its Subsidiaries to maintain in full force and effect
all material Governmental Authorizations required under any Environmental
Laws for their respective operations and (b) any proposed action to be
taken by Holdings or any of its Subsidiaries to modify current operations
in a manner that could reasonably be expected to subject Holdings or any of
its Subsidiaries to any additional obligations or requirements under any
Environmental Laws that could reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect.
(v) Other Information. With reasonable promptness, such other
-----------------
documents and information as from time to time may be reasonably requested
by Administrative Agent in relation to any matters disclosed pursuant to
this subsection 6.7.
C. Company's Actions Regarding Hazardous Materials Activities,
Environmental Claims and Violations of Environmental Laws.
(i) Remedial Actions Relating to Hazardous Materials
------------------------------------------------
Activities. Each of Company and Holdings shall promptly undertake, and
----------
shall cause each of its Subsidiaries promptly to undertake, any and all
investigations, studies, sampling, testing, abatement, cleanup, removal,
remediation or other response actions necessary to remove, remediate, clean
up or ▇▇▇▇▇ any Hazardous Materials Activity on or under any Facility in
order to comply with all applicable Environmental Laws and Governmental
Authorizations unless the failure to so comply could not reasonably be
expected to have a Material Adverse Effect. In the event Holdings or any of
its Subsidiaries undertakes any such action with respect to any Hazardous
Materials, Holdings or such Subsidiary shall conduct and complete such
action in compliance in all material respects with all applicable
Environmental Laws and in accordance in all material respects with the
policies, orders and directives of all federal, state and local
governmental authorities
101
except when, and only to the extent that, Holdings' or such Subsidiary's
liability with respect to such Hazardous Materials Activity is being
contested in good faith by Holdings or such Subsidiary.
(ii) Actions with Respect to Environmental Claims and Violations
-----------------------------------------------------------
of Environmental Laws. Each of Holdings and Company shall promptly take,
---------------------
and shall cause each of its Subsidiaries promptly to take, any and all
actions necessary to (i) cure any violation of applicable Environmental
Laws by Holdings or its Subsidiaries that could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect and (ii)
make an appropriate response to any Environmental Claim against Holdings or
any of its Subsidiaries and discharge any obligations it may have to any
Person thereunder where failure to do so could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
6.8 Execution of Subsidiary Guaranty and Personal Property Collateral Documents
---------------------------------------------------------------------------
by Certain Subsidiaries and Future Subsidiaries.
-----------------------------------------------
A. Execution of Subsidiary Guaranty and Personal Property Collateral
Documents. In the event that any Person becomes a Domestic Subsidiary after the
date hereof, Company will promptly notify Administrative Agent of that fact and
cause such Subsidiary to execute and deliver to Administrative Agent a
counterpart of the Subsidiary Guaranty and a Subsidiary Pledge Agreement, a
Subsidiary Security Agreement and a Subsidiary Patent and Trademark Security
Agreement and to take all such further actions and execute all such further
documents and instruments (including actions, documents and instruments
comparable to those described in subsection 4.2I) as may be necessary or, in the
reasonable opinion of Administrative Agent, desirable to create in favor of
Administrative Agent, for the benefit of Lenders, a valid and perfected First
Priority Lien on all of the personal and mixed property assets of such
Subsidiary described in the applicable forms of Collateral Documents.
B. Subsidiary Charter Documents, Legal Opinions, Etc. Company shall
deliver to Administrative Agent, together with such Loan Documents, (i)
certified copies of such Subsidiary's Certificate or Articles of Incorporation,
together with a good standing certificate from the Secretary of State of the
jurisdiction of its incorporation and each other state in which such Person is
qualified as a foreign corporation to do business and, to the extent generally
available, a certificate or other evidence of good standing as to payment of any
applicable franchise or similar taxes from the appropriate taxing authority of
each of such jurisdictions, each to be dated a recent date prior to their
delivery to Administrative Agent, (ii) a copy of such Subsidiary's Bylaws,
certified by its corporate secretary or an assistant secretary as of a recent
date prior to their delivery to Administrative Agent, (iii) a certificate
executed by the secretary or an assistant secretary of such Subsidiary as to (a)
the fact that the attached resolutions of the Board of Directors of such
Subsidiary approving and authorizing the execution, delivery and performance of
such Loan Documents are in full force and effect and have not been modified or
amended and (b) the incumbency and signatures of the officers of such Subsidiary
executing
102
such Loan Documents, and (iv) a favorable opinion of counsel to such Subsidiary,
in form and substance satisfactory to Administrative Agent and its counsel, as
to (a) the due organization and good standing of such Subsidiary, (b) the due
authorization, execution and delivery by such Subsidiary of such Loan Documents,
(c) the enforceability of such Loan Documents against such Subsidiary, (d) such
other matters (including matters relating to the creation and perfection of
Liens in any Collateral pursuant to such Loan Documents) as Administrative Agent
may reasonably request, all of the foregoing to be satisfactory in form and
substance to Administrative Agent and its counsel.
6.9 Conforming Leasehold Interests; Matters Relating to Additional Real
-------------------------------------------------------------------
Property Collateral.
-------------------
A. Notice of Acquisition of Real Property Assets. As promptly as
practicable, and in any event no later than the date of acquisition by Company
or any of its Subsidiaries of any Fee Property or Leasehold Property, Company
shall deliver written notice to Administrative Agent of such acquisition.
B. Conforming Leasehold Interests. If Company or any of its
Subsidiaries acquires any Leasehold Property, Company shall, or shall cause such
Subsidiary to, use its best efforts (without requiring Company or such
Subsidiary to relinquish any material rights or incur any material obligations
or to expend more than a nominal amount of money over and above the
reimbursement, if required, of the landlord's out-of-pocket costs, including
attorneys fees) to cause such Leasehold Property to be a Conforming Leasehold
Interest.
C. Mortgages, Etc. Each Real Property Asset listed on Schedule 6.9C
-------------
annexed hereto (excluding any such Real Property Asset consisting of a Leasehold
Property the encumbrancing of which requires the consent of the applicable
lessor, where Company is unable, after using its best efforts (without requiring
Company to relinquish any material rights or incur any material obligations or
to expend more than a nominal amount of money over and above the reimbursement,
if required, of the landlord's out-of-pocket costs, including attorneys fees) to
obtain such lessor's consent) shall be a "Scheduled Post-Effective Date
Mortgaged Property". In addition, from and after the Effective Date, in the
event that (i) Company has not sold the Hubbardston Property on or before the
twelve-month anniversary of the Effective Date, (ii) Company or any Subsidiary
Guarantor acquires any Fee Property or any Material Leasehold Property, or (iii)
at the time any Person becomes a Subsidiary Guarantor, such Person owns or holds
any Fee Property or any Material Leasehold Property, in any case excluding any
such Real Property Asset the encumbrancing of which requires the consent of any
applicable lessor or (in the case of clause (iii) above) then-existing senior
lienholder, where Company and its Subsidiaries are unable to obtain such
lessor's or senior lienholder's consent, any such non-excluded Real Property
Asset described in the foregoing clause (i), (ii) or (iii) of this sentence
shall be an "Additional Mortgaged Property". Company or such Subsidiary
Guarantor shall deliver to Administrative Agent, within 45 days after the
Effective Date (in the case of each Scheduled Post-Effective Date Mortgaged
Property) or as soon as practicable after such twelve-
103
month anniversary (in the case of the Hubbardston Property) or as soon as
practicable after such Person acquires such Additional Mortgaged Property or
becomes a Subsidiary Guarantor (in the case of any other Additional Mortgaged
Property) the following:
(i) Mortgage. A fully executed and notarized Mortgage (each, an
--------
"Additional Mortgage"), in proper form for recording in all appropriate
places in all applicable jurisdictions, encumbering the interest of such
Loan Party in the applicable Additional Mortgaged Property;
(ii) Opinions of Counsel. (a) A favorable opinion of counsel to such
-------------------
Loan Party, in form and substance satisfactory to Administrative Agent and
its counsel, as to the due authorization, execution and delivery by such
Loan Party of such Additional Mortgage and such other matters as
Administrative Agent may reasonably request, and (b) if required by
Administrative Agent, an opinion of counsel (which counsel shall be
reasonably satisfactory to Administrative Agent) in the state in which such
Additional Mortgaged Property is located with respect to the enforceability
of such Additional Mortgage and such other matters (including any matters
governed by the laws of such state regarding personal property security
interests in respect of any Collateral) as Administrative Agent may
reasonably request, in each case in form and substance reasonably
satisfactory to Administrative Agent;
(iii) Landlord Consent and Estoppel; Recorded Leasehold Interest. In
----------------------------------------------------------
the case of an Additional Mortgaged Property consisting of a Leasehold
Property, (a) a Landlord Consent and Estoppel and (b) evidence that such
Leasehold Property is a Recorded Leasehold Interest;
(iv) Title Insurance. (a) If required by Administrative Agent, an
---------------
ALTA mortgagee title insurance policy or an unconditional commitment
therefor (an "Additional Mortgage Policy") issued by the Title Company with
respect to such Additional Mortgaged Property, in an amount satisfactory to
Administrative Agent, insuring fee simple title to, or a valid leasehold
interest in, such Additional Mortgaged Property vested in such Loan Party
and assuring Administrative Agent that such Additional Mortgage creates a
valid and enforceable First Priority mortgage Lien on such Additional
Mortgaged Property, subject only to a standard survey exception in the
event a survey is not required to be delivered with respect to such
Additional Mortgaged Property pursuant to subsection 6.9C(vii), which
Additional Mortgage Policy (1) shall include an endorsement for mechanics'
liens, for future advances under this Agreement and for any other matters
reasonably requested by Administrative Agent and (2) shall provide for
affirmative insurance and such reinsurance as Administrative Agent may
reasonably request, all of the foregoing in form and substance reasonably
satisfactory to Administrative Agent; and (b) evidence satisfactory to
Administrative Agent that such Loan Party has (i) delivered to the Title
Company all certificates and affidavits required by the Title Company in
connection with the issuance of the Additional Mortgage Policy
104
and (ii) paid to the Title Company or to the appropriate governmental
authorities all expenses and premiums of the Title Company in connection
with the issuance of the Additional Mortgage Policy and all recording and
stamp taxes (including mortgage recording and intangible taxes) payable in
connection with recording the Additional Mortgage in the appropriate real
estate records;
(v) Title Report. If no Additional Mortgage Policy is required with
------------
respect to such Additional Mortgaged Property, a title report issued by the
Title Company with respect thereto, dated not more than 90 days prior to
the date such Additional Mortgage is to be recorded and satisfactory in
form and substance to Administrative Agent;
(vi) Copies of Documents Relating to Title Exceptions. Copies of all
------------------------------------------------
recorded documents listed as exceptions to title or otherwise referred to
in the Additional Mortgage Policy or title report delivered pursuant to
clause (v) or (vi) above;
(vii) Surveys. If required by Administrative Agent in the case of any
-------
Additional Mortgaged Property consisting of a Fee Property, a survey with
respect to such Additional Mortgaged Property dated not more than six
months prior to the date such Additional Mortgage is to be recorded and
reasonably satisfactory in form and substance to Administrative Agent;
(viii) Matters Relating to Flood Hazard Properties. (a) Evidence,
-------------------------------------------
which may be in the form of a letter from an insurance broker or a
municipal engineer, as to (1) whether such Additional Mortgaged Property is
a Flood Hazard Property and (2) if so, whether the community in which such
Flood Hazard Property is located is participating in the National Flood
Insurance Program, (b) if such Additional Mortgaged Property is a Flood
Hazard Property, such Loan Party's written acknowledgment of receipt of
written notification from Administrative Agent (1) that such Additional
Mortgaged Property is a Flood Hazard Property and (2) as to whether the
community in which such Flood Hazard Property is located is participating
in the National Flood Insurance Program, and (c) in the event such
Additional Mortgaged Property is a Flood Hazard Property that is located in
a community that participates in the National Flood Insurance Program,
evidence that Company has obtained flood insurance in respect of such Flood
Hazard Property to the extent required under the applicable regulations of
the Board of Governors of the Federal Reserve System; and
(ix) Environmental Audit. If required by Administrative Agent,
-------------------
reports and other information, in form, scope and substance satisfactory to
Administrative Agent and prepared by environmental consultants satisfactory
to Administrative Agent, concerning any environmental hazards or
liabilities to which Company or any of its Subsidiaries may be subject with
respect to such Additional Mortgaged Property.
105
D. Real Estate Appraisals. Company shall, and shall cause each of
its Subsidiaries to, permit an independent real estate appraiser satisfactory to
Administrative Agent, upon reasonable notice, to visit and inspect any
Additional Mortgaged Property for the purpose of preparing an appraisal of such
Additional Mortgaged Property satisfying the requirements of any applicable laws
and regulations (in each case to the extent required under such laws and
regulations as determined by Administrative Agent in its discretion).
6.10 Year 2000 Compliance.
--------------------
No later than October 31, 1999, Company shall perform all acts
reasonably necessary to ensure that Holdings and its Subsidiaries become Year
2000 Compliant. Such acts shall include, to the extent reasonably necessary in
order for Holdings and its Subsidiaries to become Year 2000 Compliant,
performing a comprehensive review and assessment of all of Company's computer
systems and applications and adopting a plan, including a budget, for the
remediation, monitoring and testing of such systems and applications. Company
shall, promptly upon request therefor, provide to Administrative Agent such
certifications or other evidence of Company's compliance with the terms of this
subsection 6.11 as Administrative Agent may from time to time reasonably
request.
6.11 Alitec Acquisition.
------------------
Company shall use its commercially reasonable best efforts to
consummate the Alitec Acquisition in accordance with subsection 7.7(viii) on or
before August 31, 1999.
Section 7. NEGATIVE COVENANTS OF HOLDINGS AND COMPANY
Each of Holdings and Company covenants and agrees that, so long as any
of the Commitments hereunder shall remain in effect and until payment in full of
all of the Loans and other Obligations and the cancellation or expiration of all
Letters of Credit, unless Requisite Lenders shall otherwise give prior written
consent, each of Holdings and Company shall perform, and shall cause each of its
Subsidiaries to perform, all covenants in this Section 7.
7.1 Indebtedness.
------------
Neither Holdings nor Company shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or guaranty, or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(i) Company may become and remain liable with respect to the
Obligations;
106
(ii) Holdings and its Subsidiaries may become and remain liable with
respect to Contingent Obligations permitted by subsection 7.4 and, upon any
matured obligations actually arising pursuant thereto, the Indebtedness
corresponding to the Contingent Obligations so extinguished;
(iii) Company and its Subsidiaries may become and remain liable with
respect to (a) Indebtedness in respect of Capital Leases and (b)
Indebtedness secured by Liens permitted under subsection 7.2(iv); provided
--------
that the aggregate outstanding principal amount of all Indebtedness
permitted under this subsection 7.1(iii) shall not exceed $25,000,000 at
any time;
(iv) Company may become and remain liable with respect to
Indebtedness to any wholly-owned Subsidiary Guarantor, and any wholly-owned
Subsidiary Guarantor may become and remain liable with respect to
Indebtedness to Company or any other wholly-owned Subsidiary Guarantor;
provided that (a) all such inter company Indebtedness shall be evidenced by
--------
promissory notes that are included in the Pledged Collateral, (b) all such
inter company Indebtedness owed by Company to any of its Subsidiaries shall
be subordinated in right of payment to the payment in full of the
Obligations pursuant to the terms of the applicable promissory notes or an
inter company subordination agreement, and (c) any payment by any
Subsidiary of Company under any guaranty of the Obligations shall result in
a pro tanto reduction of the amount of any inter company Indebtedness owed
--- -----
by such Subsidiary to Company or to any of its Subsidiaries for whose
benefit such payment is made;
(v) Company and its Subsidiaries, as applicable, may remain liable
with respect to (a) Indebtedness in respect of the Existing Seller Notes in
an aggregate principal amount not to exceed the amount thereof outstanding
as of the Effective Date less any payments after the Effective Date in
respect thereof, (b) the Holdings Discount Debentures, (c) the Senior Notes
and (d) Indebtedness described in Schedule 7.1 annexed hereto; and
------------
(vi) Company and its Subsidiaries may become and remain liable with
respect to other Indebtedness in an aggregate principal amount not to
exceed $5,000,000 at any time outstanding.
7.2 Liens and Related Matters.
-------------------------
A. Prohibition on Liens. Neither Holdings nor Company shall, nor
shall it permit any of its Subsidiaries to, directly or indirectly, create,
incur, assume or permit to exist any Lien on or with respect to any property or
asset of any kind (including any document or instrument in respect of goods or
accounts receivable) of Holdings or any of its Subsidiaries, whether now owned
or hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any
107
Lien with respect to any such property, asset, income or profits under the
Uniform Commercial Code of any State or under any similar recording or notice
statute, except:
(i) Permitted Encumbrances;
(ii) Liens granted pursuant to the Collateral Documents;
(iii) Liens described in Schedule 7.2 annexed hereto;
------------
(iv) Liens on real property or tangible personal property not
heretofore owned by Company or any of its Subsidiaries (any such property,
including any present or future fixed improvements thereon, being "New
Property"), in each case arising from (a) the giving, simultaneously with
or within 30 days after the acquisition or construction by Company or any
of its Subsidiaries thereof, of purchase money Liens (including vendors'
rights under purchase contracts under an agreement whereby title is
retained for the purpose of securing the purchase price thereof) on any New
Property hereafter acquired or constructed by Company or any of its
Subsidiaries, or (b) from the extension, renewal or replacement of any
Indebtedness secured by any of the foregoing Liens so long as the aggregate
principal amount thereof and the security therefor is not thereby
increased; provided, however, that in each case (X) such Lien is limited to
-------- -------
such New Property and (Y) the principal amount of the Indebtedness secured
by such Lien shall not exceed the cost of such New Property to Company or
any of its Subsidiaries; and provided, further that the Indebtedness
-------- -------
secured by such Liens is permitted under subsection 7.1(iii)(b); and
(v) Other Liens securing Indebtedness of Company and its
Subsidiaries in an aggregate amount not to exceed $2,500,000 at any time
outstanding.
B. No Further Negative Pledges. Except with respect to specific
property encumbered to secure payment of particular Indebtedness or to be sold
pursuant to an executed agreement with respect to an Asset Sale, neither
Holdings nor any of its Subsidiaries shall enter into any agreement (other than
(i) any documents of a type described in subdivisions (c) and (d) of subsection
7.2C or (ii) any agreement prohibiting only the creation of Liens securing
Subordinated Indebtedness, the Holdings Discount Debentures or the Senior Notes)
prohibiting the creation or assumption of any Lien upon any of its properties or
assets, whether now owned or hereafter acquired.
C. No Restrictions on Subsidiary Distributions to Company or Other
Subsidiaries. Except as provided herein, neither Holdings nor Company shall, nor
shall it permit any of its Subsidiaries to, create or otherwise cause or suffer
to exist or become effective any consensual encumbrance or restriction of any
kind on the ability of any such Subsidiary to (i) pay dividends or make any
other distributions on any of such Subsidiary's capital stock owned by Company
or any other Subsidiary of Company, (ii) repay or prepay any Indebtedness owed
by
108
such Subsidiary to Company or any other Subsidiary of Company, (iii) make loans
or advances to Company or any other Subsidiary of Company, or (iv) transfer any
of its property or assets to Company or any other Subsidiary of Company, except
for such encumbrances or restrictions existing under or by reason of (a)
applicable law, (b) this Agreement and the other Loan Documents, (c) customary
provisions restricting subletting or assignment of any lease governing a
leasehold interest of Company or any of its Subsidiaries, (d) customary
provisions restricting assignment of any licensing agreement entered into by
Company or any of its Subsidiaries in the ordinary course of business, or (e) as
set forth in the Senior Notes Indenture.
7.3 Investments; Joint Ventures.
---------------------------
Neither Holdings nor Company shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, make or own any Investment in any
Person, including any Joint Venture, except:
(i) Company and its Subsidiaries may make and own Investments
in Cash Equivalents;
(ii) Company and its Subsidiaries may make inter company loans
to the extent permitted under subsection 7.1(iv);
(iii) Company and its Subsidiaries may make Consolidated Capital
Expenditures permitted by subsection 7.8;
(iv) Company and its Subsidiaries may make acquisitions
otherwise permitted by subsection 7.7;
(v) Company and its Subsidiaries may continue to own the
Investments owned by them and described in Schedule 7.3 annexed hereto; and
------------
(vi) Company and its Subsidiaries may make and own other
Investments in an aggregate amount not to exceed at any time $2,500,000.
7.4 Contingent Obligations.
----------------------
Neither Holdings nor Company shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, create or become or remain liable with
respect to any Contingent Obligation, except:
(i) Holdings may become and remain liable with respect to
Contingent Obligations in respect of the Holdings Guaranty, and
Subsidiaries of Company may become and remain liable with respect to
Contingent Obligations in respect of the Subsidiary Guaranty;
109
(ii) Company may become and remain liable with respect to
Contingent Obligations in respect of Letters of Credit;
(iii) Company may become and remain liable with respect to
Contingent Obligations under Hedge Agreements required under subsection
6.10;
(iv) Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations in respect of customary
indemnification and purchase price adjustment obligations incurred in
connection with Asset Sales or other sales of assets;
(v) Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations in respect of any Indebtedness of
Company or any of its Subsidiaries permitted by subsection 7.1;
(vi) Company and its Subsidiaries, as applicable, may remain
liable with respect to Contingent Obligations described in Schedule 7.4
------------
annexed hereto; and
(vii) Company and its Subsidiaries may become and remain liable
with respect to other Contingent Obligations; provided that the maximum
--------
aggregate liability, contingent or otherwise, of Company and its
Subsidiaries in respect of all such Contingent Obligations shall at no time
exceed $2,500,000.
7.5 Restricted Payments.
-------------------
Neither Holdings nor Company shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, declare, order, pay, make or set apart
any sum for any Restricted Payment; provided that, (i) so long as no Event of
--------
Default or Potential Event of Default shall have occurred and be continuing or
shall be caused thereby (a) Company may make regularly scheduled payments of
principal and interest in respect of the Existing Seller Notes in accordance
with the terms thereof, and only to the extent required thereby (and subject to
any subordination provisions contained therein), (b) Holdings or Company, as
applicable, may make regularly scheduled payments of interest in respect of the
Senior Notes or any Subordinated Indebtedness incurred by Holdings or Company
permitted hereunder, in each case in accordance with the terms of, and only to
the extent required by (and subject to the subordination provisions contained
in), the indenture or other agreement pursuant to which the Senior Notes or such
Subordinated Indebtedness was issued, as such indenture or other agreement may
be amended from time to time to the extent permitted under subsection 7.14B, (c)
Company may make Restricted Payments to Holdings (1) to the extent necessary to
enable Holdings to make any Restricted Payments permitted to be made by Holdings
as provided in the immediately preceding clause (b), and (2) to the extent
necessary to enable Holdings to pay administrative costs and expenses not in
excess of $250,000 in any Fiscal Year, in each case so long as Holdings applies
110
the amount of any such Restricted Payment for such purpose, and (d) Company may
pay Management Fees, and (ii) Company may make Restricted Payments to Holdings
to the extent necessary to enable Holdings to discharge the consolidated tax
liabilities of Holdings and its Subsidiaries, so long as Holdings applies the
amount of any such Restricted Payment for such purpose.
7.6 Financial Covenants.
-------------------
A. Minimum Interest Coverage Ratio. Company shall not permit the
ratio of (i) Consolidated Adjusted EBITDA to (ii) Consolidated Interest Expense
for any four-Fiscal Quarter period ending with any Fiscal Quarter set forth
below to be less than the correlative ratio indicated:
====================================================================
Last Fiscal Quarter in Minimum Interest
Calculation Period Coverage Ratio
====================================================================
Effective Date--
Second Fiscal Quarter 2000 1.55:1.00
--------------------------------------------------------------------
Third Fiscal Quarter 2000 1.60:1.00
Fourth Fiscal Quarter 2000 --
Third Fiscal Quarter 2001 1.70:1.00
--------------------------------------------------------------------
Fourth Fiscal Quarter 2001--
Third Fiscal Quarter 2002 1.90:1.00
--------------------------------------------------------------------
Fourth Fiscal Quarter 2002--
Third Fiscal Quarter 2003 2.00:1.00
Fourth Fiscal Quarter 2003
and thereafter 2.25:1.00
====================================================================
B. Minimum Fixed Charge Coverage Ratio. Company shall not permit the
ratio of (i) Consolidated Adjusted EBITDA minus Consolidated Capital
-----
Expenditures for any four-Fiscal Quarter period ending with any Fiscal Quarter
set forth below (excluding (a) all Consolidated Capital Expenditures of (1)
Central Fabricators incurred prior to the Effective Date, and (2) Alitec
incurred prior to on the closing date of the Alitec Acquisition, and (b) up to
$2,000,000 of Consolidated Capital Expenditures incurred in connection with
information systems upgrades by Holdings and its Subsidiaries on or before July
31, 2001) to (ii) Consolidated Fixed Charges for any four-Fiscal Quarter period
ending with any Fiscal Quarter set forth below to be less than the correlative
ratio indicated:
111
=======================================================
Last Fiscal Quarter in Minimum Fixed Charge
Calculation Period Coverage Ratio
=======================================================
Effective Date --
Third Fiscal Quarter 2000 1.00:1.00
-------------------------------------------------------
Fourth Fiscal Quarter 2000 --
Third Fiscal Quarter 2001 1.10:1.00
-------------------------------------------------------
Fourth Fiscal Quarter 2001
and thereafter 1.15:1.00
=======================================================
C. Maximum Leverage Ratio. Company shall not permit the Leverage
Ratio as of the last day of any Fiscal Quarter set forth below to exceed the
correlative ratio indicated:
==============================================================
Maximum
Fiscal Quarter Leverage Ratio
--------------------------------------------------------------
Effective Date --
Second Fiscal Quarter 2000 5.60:1.00
--------------------------------------------------------------
Third Fiscal Quarter 2000 5.50:1.00
--------------------------------------------------------------
Fourth Fiscal Quarter 2000 --
Third Fiscal Quarter 2001 5.00:1.00
--------------------------------------------------------------
Fourth Fiscal Quarter 2001 --
Third Fiscal Quarter 2002 4.50:1.00
--------------------------------------------------------------
Fourth Fiscal Quarter 2002 --
Third Fiscal Quarter 2003 4.25:1.00
--------------------------------------------------------------
Fourth Fiscal Quarter 2003 --
Third Fiscal Quarter 2004 4.00:1.00
--------------------------------------------------------------
Fourth Fiscal Quarter 2004
and thereafter 3.75:1.00
==============================================================
C. Certain Calculations. Anything contained herein to the contrary
notwithstanding, with respect to any four-Fiscal Quarter period during which any
Permitted Acquisition is consummated, for purposes of determining compliance
with the financial covenants set forth in this subsection 7.6, Consolidated
Adjusted EBITDA and Consolidated Interest Expense shall be calculated on a Pro
Forma Basis for such period; provided that Company shall deliver to
Administrative Agent and Lenders, together with the Compliance Certificate in
respect of such period, an Officer's Certificate, in form and substance
satisfactory to Administrative Agent and demonstrating in reasonable detail such
calculations on a Pro Forma Basis.
112
7.7 Restriction on Fundamental Changes; Asset Sales and Acquisitions.
----------------------------------------------------------------
Neither Holdings nor Company shall, nor shall it permit any of its
Subsidiaries to, alter the corporate, capital or legal structure of Holdings or
any of its Subsidiaries, or enter into any transaction of merger or
consolidation, or liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease or sub-lease (as lessor or
sublessor), transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any part of its business, property or assets, whether now
owned or hereafter acquired, or make any Acquisition, except:
(i) any Subsidiary of Company may be merged with or into
Company or any wholly-owned Subsidiary Guarantor, or be liquidated, wound
up or dissolved, or all or any part of its business, property or assets may
be conveyed, sold, leased, transferred or otherwise disposed of, in one
transaction or a series of transactions, to Company or any wholly-owned
Subsidiary Guarantor; provided that, in the case of such a merger of any
--------
Subsidiary of Company with or into Company or any wholly-owned Subsidiary
Guarantor, Company or such wholly-owned Subsidiary Guarantor, as the case
may be, shall be the continuing or surviving corporation;
(ii) Company and its Subsidiaries may make Consolidated Capital
Expenditures permitted under subsection 7.8;
(iii) Company and its Subsidiaries may dispose of obsolete, worn
out or surplus property in the ordinary course of business;
(iv) Company and its Subsidiaries may sell or otherwise dispose
of assets in transactions that do not constitute Asset Sales; provided that
--------
the consideration received for such assets shall be in an amount at least
equal to the fair market value thereof; and
(v) subject to subsection 7.13, Company and its Subsidiaries
may make Asset Sales of assets having a fair market value not in excess of
$15,000,000 during the term of this Agreement; provided that (x) the
--------
consideration received for such assets shall be in an amount at least equal
to the fair market value thereof; (y) in the case of any such Asset Sale or
related series of Asset Sales in respect of which the aggregate Net Asset
Sale Proceeds equals or exceeds $1,000,000, not less than 85% of the
consideration received in respect thereof shall be cash; and (z) no later
than the first Business Day following the date of receipt by Holdings or
any of its Subsidiaries of any Net Asset Sale Proceeds of such Asset Sale,
Company shall deliver to Administrative Agent an Officer's Certificate,
reasonably satisfactory in form and substance to Administrative Agent,
demonstrating the derivation of the Net Asset Sale Proceeds of such Asset
Sale from the gross sales price received in connection therewith;
113
(i) So long as no Event of Default or Potential Event of Default
shall have occurred and be continuing or shall be caused thereby, Company
and Subsidiary Guarantors may make Acquisitions of the assets or the stock
or other equity Securities of, or by direct merger of Company or any
Subsidiary Guarantor with, other Persons engaged in the same or related
lines of business as Company and its Subsidiaries; provided that, with
---------
respect to any Acquisition permitted under this subsection 7.7(vi):
(a) Company shall give Administrative Agent at least 10 days' prior
written notice of such Acquisition, together with copies of the definitive
documentation relating thereto;
(b) such Acquisition shall be made in compliance with all applicable
laws;
(c) in the event such Acquisition is effected pursuant to a merger of
(1) Company or (2) any Subsidiary Guarantor with any other Person, Company
(in the case of clause (1)) or a Subsidiary Guarantor (in the case of
clause (2)) shall be the surviving or continuing corporation;
(d) in the event such Acquisition is effected by the purchase of the
stock or other equity interests of any Person by Company or any Subsidiary
Guarantor, (1) Company or such Subsidiary Guarantor, as the case may be,
shall own all of the outstanding equity Securities of such Person, and (2)
upon the consummation of such Acquisition, such Person shall comply with
the provisions of subsections 6.8 and 6.9;
(e) prior to the consummation of such Acquisition, Company shall
deliver to Administrative Agent and Lenders an Officer's Certificate,
together with supporting financial statements and any other relevant
information, in form and substance reasonably satisfactory to
Administrative Agent and demonstrating in reasonable detail that, on a Pro
Forma Basis, for the four-Fiscal Quarter period most recently ended (1) the
Leverage Ratio shall not exceed 0.25 less than the Leverage Ratio required
to be met for such period pursuant to subsection 7.6C, (2) Company and its
Subsidiaries are otherwise in compliance with the covenants set forth in
subsection 7.6 with respect to such period, (3) the portion of Consolidated
Adjusted EBITDA for such period that is attributable to the business or
property being acquired shall not exceed 25% of the total Consolidated
Adjusted EBITDA for such period, and (4) the business or property being
acquired in such Acquisition shall have positive Consolidated Adjusted
EBITDA; provided that, for purposes of this clause (d)(4), the calculation
--------
of Consolidated Adjusted EBITDA shall be made solely with respect to such
acquired business or property and not with respect to Holdings and its
Subsidiaries on a consolidated basis; and
114
(f) after giving effect to such Acquisition, the Total
Utilization of Revolving Loan Commitments shall not exceed the Revolving
Loan Commitments then in effect minus $5,000,000;
-----
(vii) Company and Subsidiary Guarantors may consummate the
Effective Date Acquisitions; and
(viii) Company and Subsidiary Guarantors may consummate the
Alitec Acquisition so long as:
(a) all conditions to the Alitec Acquisition as set forth the
Alitec Acquisition Agreement shall have been satisfied or the fulfillment
of any such conditions shall have been waived with the consent of
Administrative Agent and Requisite Lenders;
(b) the Alitec Acquisition shall have become effective in
accordance with the terms of the Alitec Acquisition Agreement;
(c) the aggregate cash consideration paid to the holders of
equity interests in Alitec in connection with the Alitec Acquisition does
not exceed $11,000,000; and
(d) Administrative Agent shall have received an Officer's
Certificate of Company to the effect set forth in clauses (a)-(c) above.
7.8 Consolidated Capital Expenditures.
---------------------------------
Neither Holdings nor Company shall, nor shall it permit any of its
Subsidiaries to, make or incur Consolidated Capital Expenditures (which shall
include, without limitation, all amounts expended in connection with information
systems upgrades by Holdings and its Subsidiaries), in any Fiscal Year indicated
below, in an aggregate amount in excess of the corresponding amount (the
"Maximum Consolidated Capital Expenditures Amount") set forth below opposite
such Fiscal Year (or portion thereof); provided that the Maximum Consolidated
--------
Capital Expenditures Amount for any Fiscal Year shall be increased by the sum of
an amount equal to the 50% of the excess, if any, of the Maximum Consolidated
Capital Expenditures Amount for the previous Fiscal Year (prior to any
adjustment in accordance with this proviso) over the actual amount of
Consolidated Capital Expenditures for such previous Fiscal Year:
115
=======================================================================
Maximum Consolidated
Fiscal Year Capital Expenditures
-----------------------------------------------------------------------
Fiscal Year 1999 $11,000,000
-----------------------------------------------------------------------
Fiscal Year 2000 $12,000,000
-----------------------------------------------------------------------
Fiscal Year 2001
and each Fiscal Year thereafter $ 8,000,000
=======================================================================
Notwithstanding anything herein to the contrary, Consolidated Capital
Expenditures for Fiscal Year 1999 shall exclude all Consolidated Capital
Expenditures (i) of Central Fabricators incurred prior to the Effective Date,
and (ii) of Alitec incurred prior to on the closing date of the Alitec
Acquisition.
7.9 Sales and Lease-Backs.
---------------------
Neither Holdings nor Company shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, become or remain liable as lessee or as
a guarantor or other surety with respect to any lease, whether an Operating
Lease or a Capital Lease, of any property (whether real, personal or mixed),
whether now owned or hereafter acquired, (i) which Holdings or any of its
Subsidiaries has sold or transferred or is to sell or transfer to any other
Person (other than Company or any of its Subsidiaries) or (ii) which Holdings or
any of its Subsidiaries intends to use for substantially the same purpose as any
other property which has been or is to be sold or transferred by Holdings or any
of its Subsidiaries to any Person (other than Company or any of its
Subsidiaries) in connection with such lease.
7.10 Sale or Discount of Receivables.
-------------------------------
Neither Holdings nor Company shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, sell with recourse, or discount or
otherwise sell for less than the face value thereof, any of its notes or
accounts receivable.
7.11 Transactions with Shareholders and Affiliates .
---------------------------------------------
Neither Holdings nor Company shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction (including the purchase, sale, lease or exchange of any property or
the rendering of any service) with any holder of 5% or more of any class of
equity Securities of Holdings or with any Affiliate of Holdings or of any such
holder, on terms that are less favorable to Holdings or Company or that
Subsidiary, as the case may be, than those that might be obtained at the time
from Persons who are not such a holder or Affiliate; provided that the foregoing
--------
restriction shall not apply to (i) any transaction between Company and any of
its wholly-owned Subsidiaries or between any of its wholly-owned
116
Subsidiaries, (ii) reasonable and customary fees paid to members of the Boards
of Directors of Holdings and Company and their respective Subsidiaries, and
(iii) the payment of Management Fees to the extent permitted under subsection
7.5.
7.12 Disposal of Subsidiary Stock.
----------------------------
Except for any sale of 100% of the capital stock or other equity
Securities of any Subsidiary of Company in compliance with the provisions of
subsection 7.7(v), neither Holdings nor Company shall:
(i) directly or indirectly sell, assign, pledge or otherwise
encumber or dispose of any shares of capital stock or other equity
Securities of any of its Subsidiaries, except to qualify directors if
required by applicable law; or
(ii) permit any of its Subsidiaries directly or indirectly to
sell, assign, pledge or otherwise encumber or dispose of any shares of
capital stock or other equity Securities of any of its Subsidiaries
(including such Subsidiary), except to Company, another Subsidiary of
Company, or to qualify directors if required by applicable law.
7.13 Conduct of Business.
-------------------
From and after the Effective Date, (i) Holdings shall not engage in
any business other than holding the capital stock of Company and (ii) Company
shall not, and shall not permit any of its Subsidiaries to, engage in any
business other than the businesses engaged in by Company and its Subsidiaries on
the Effective Date and similar or related businesses.
7.14 Amendments or Waivers of Certain Existing Agreements and Related
----------------------------------------------------------------
Agreements; Amendments of Documents Relating to Holdings Discount
-----------------------------------------------------------------
Debentures,Senior Notes and Subordinated Indebtedness.
-----------------------------------------------------
A. Amendments or Waivers of Certain Existing Agreements and Related
Agreements. Neither Holdings nor any of its Subsidiaries will agree to any
material amendment to, or waive any of its material rights under, any Existing
Agreement or any Related Agreement (other than any Related Agreement evidencing
or governing the Holdings Discount Debentures, the Senior Notes or any
Subordinated Indebtedness) after the Effective Date without in each case
obtaining the prior written consent of Requisite Lenders to such amendment or
waiver.
B. Amendments of Documents Relating to Holdings Discount Debentures,
Senior Notes and Subordinated Indebtedness. Except as permitted by clause (i) of
subsection 7.5, neither Holdings nor Company shall, nor shall it permit any of
its Subsidiaries to, amend or otherwise change the terms of the Holdings
Discount Debentures, the Senior Notes or any Subordinated Indebtedness, or make
any payment consistent with an amendment thereof or change thereto, if the
effect of such amendment or change is to increase the interest rate on the
117
Holdings Discount Debentures, the Senior Notes or such Subordinated
Indebtedness, change (to earlier dates) any dates upon which payments of
principal or interest are due thereon, change any event of default or condition
to an event of default with respect thereto (other than to eliminate any such
event of default or increase any grace period related thereto), change the
redemption, prepayment or defeasance provisions thereof, change any
subordination provisions thereof (or of any guaranty thereof), or change any
collateral therefor (other than to release such collateral), or if the effect of
such amendment or change, together with all other amendments or changes made, is
to increase materially the obligations of the obligor thereunder or to confer
any additional rights on the holders of the Holdings Discount Debentures, the
Senior Notes or such Subordinated Indebtedness (or a trustee or other
representative on their behalf) which would be adverse to Holdings, Company or
Lenders.
7.15 Fiscal Year.
----------
Neither Holdings nor Company shall change its Fiscal Year-end.
Section 8. HOLDINGS GUARANTY
8.1 Guaranty of the Obligations.
---------------------------
Holdings hereby irrevocably and unconditionally guaranties the due and
punctual payment in full of all Obligations when the same shall become due,
whether at stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise (including amounts that would become due but for the
operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11
U.S.C. (S) 362(a)).
8.2 Limitation on Amount Guarantied.
-------------------------------
Anything contained herein to the contrary notwithstanding, if any
Fraudulent Transfer Law (as hereinafter defined) is determined by a court of
competent jurisdiction to be applicable to the obligations of Holdings
hereunder, such obligations of Holdings hereunder shall be limited to a maximum
aggregate amount equal to the largest amount that would not render its
obligations hereunder subject to avoidance as a fraudulent transfer or
conveyance under Section 548 of Title 11 of the United States Code or any
applicable provisions of comparable state law (collectively, the "Fraudulent
Transfer Laws"), in each case after giving effect to all other liabilities of
Holdings, contingent or otherwise, that are relevant under the Fraudulent
Transfer Laws (specifically excluding, however, any liabilities of Holdings in
respect of inter company indebtedness to Company or other Affiliates of Company
to the extent that such indebtedness would be discharged in an amount equal to
the amount paid by Holdings hereunder and after giving effect as assets to the
value (as determined under the applicable provisions of the Fraudulent Transfer
Laws) of any rights to subrogation, reimbursement, indemnification or
contribution of Holdings pursuant to applicable law or pursuant to the terms of
any agreement).
118
8.3 Payment by Holdings.
-------------------
Holdings hereby agrees, in furtherance of the foregoing and not in
limitation of any other right which Administrative Agent or any Lender may have
at law or in equity against Holdings by virtue hereof, that upon the failure of
Company to pay any of the Obligations when and as the same shall become due,
whether at stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise (including amounts that would become due but for the
operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11
U.S.C. (S) 362(a)), Holdings will upon demand pay, or cause to be paid, in cash,
to Administrative Agent for the ratable benefit of Agents and Lenders as
beneficiaries of the Holdings Guaranty (collectively, for purposes of the
Holdings Guaranty, "Beneficiaries"), an amount equal to the sum of the unpaid
principal amount of all Obligations then due as aforesaid, accrued and unpaid
interest on such Obligations (including interest which, but for the filing of a
petition in bankruptcy with respect to Company, would have accrued on such
Obligations, whether or not a claim is allowed against Company for such interest
in the related bankruptcy proceeding) and all other Obligations then owed to
Beneficiaries as aforesaid.
8.4 Liability of Holdings Absolute.
------------------------------
Holdings agrees that its obligations hereunder are irrevocable,
absolute, independent and unconditional and shall not be affected by any
circumstance which constitutes a legal or equitable discharge of a guarantor or
surety other than payment in full of the Obligations. In furtherance of the
foregoing and without limiting the generality thereof, Holdings agrees as
follows:
A. The Holdings Guaranty is a guaranty of payment when due and not
of collectibility.
B. Administrative Agent may enforce the Holdings Guaranty upon the
occurrence of an Event of Default notwithstanding the existence of any dispute
between Company and any Beneficiary with respect to the existence of such Event
of Default.
C. The obligations of Holdings hereunder are independent of the
obligations of Company and the obligations of any other guarantor (including any
Subsidiary Guarantor) of the obligations of Company, and a separate action or
actions may be brought and prosecuted against Holdings whether or not any action
is brought against Company or any of such other guarantors and whether or not
Company is joined in any such action or actions.
D. Payment by Holdings of a portion, but not all, of the Obligations
shall in no way limit, affect, modify or abridge Holdings' liability for any
portion of the Obligations which has not been paid. Without limiting the
generality of the foregoing, if Administrative Agent is awarded a judgment in
any suit brought to enforce Holdings' covenant to pay a portion
119
of the Obligations, such judgment shall not be deemed to release Holdings from
its covenant to pay the portion of the Obligations that is not the subject of
such suit.
E. Any Beneficiary, upon such terms as it deems appropriate, without
notice or demand and without affecting the validity or enforceability hereof or
giving rise to any reduction, limitation, impairment, discharge or termination
of Holdings' liability hereunder, from time to time may (i) renew, extend,
accelerate, increase the rate of interest on, or otherwise change the time,
place, manner or terms of payment of the Obligations; (ii) settle, compromise,
release or discharge, or accept or refuse any offer of performance with respect
to, or substitutions for, the Obligations or any agreement relating thereto
and/or subordinate the payment of the same to the payment of any other
obligations; (iii) request and accept other guaranties of the Obligations and
take and hold security for the payment hereof or the Obligations; (iv) release,
surrender, exchange, substitute, compromise, settle, rescind, waive, alter,
subordinate or modify, with or without consideration, any security for payment
of the Obligations, any other guaranties of the Obligations, or any other
obligation of any Person (including any Subsidiary Guarantor) with respect to
the Obligations; (v) enforce and apply any security now or hereafter held by or
for the benefit of such Beneficiary in respect hereof or of the Obligations and
direct the order or manner of sale thereof, or exercise any other right or
remedy that such Beneficiary may have against any such security, in each case as
such Beneficiary in its discretion may determine consistent herewith and any
applicable security agreement, including foreclosure on any such security
pursuant to one or more judicial or nonjudicial sales, whether or not every
aspect of any such sale is commercially reasonable, and even though such action
operates to impair or extinguish any right of reimbursement or subrogation or
other right or remedy of Holdings against Company or any security for the
Obligations; and (vi) exercise any other rights available to it under the Loan
Documents.
F. The Holdings Guaranty and the obligations of Holdings hereunder
shall be valid and enforceable and shall not be subject to any reduction,
limitation, impairment, discharge or termination for any reason (other than
payment in full of the Obligations), including the occurrence of any of the
following, whether or not Holdings shall have had notice or knowledge of any of
them: (i) any failure or omission to assert or enforce, or agreement or election
not to assert or enforce, or the stay or enjoining, by order of court, by
operation of law or otherwise, of the exercise or enforcement of, any claim or
demand or any right, power or remedy (whether arising under the Loan Documents,
at law, in equity or otherwise) with respect to the Obligations or any agreement
relating thereto, or with respect to any other guaranty of or security for the
payment of the Obligations; (ii) any rescission, waiver, amendment or
modification of, or any consent to departure from, any of the terms or
provisions (including provisions relating to events of default) of this
Agreement, any of the other Loan Documents or any agreement or instrument
executed pursuant thereto, or of any other guaranty or security for the
Obligations, in each case whether or not in accordance with the terms hereof or
such Loan Document or any agreement relating to such other guaranty or security;
(iii) the Obligations, or any agreement relating thereto, at any time being
found to be illegal, invalid or unenforceable in any respect; (iv) the
application of payments received from any source (other than payments received
pursuant to the
120
other Loan Documents or from the proceeds of any security for the Obligations,
except to the extent such security also serves as collateral for indebtedness
other than the Obligations) to the payment of indebtedness other than the
Obligations, even though any Beneficiary might have elected to apply such
payment to any part or all of the Obligations; (v) any Beneficiary's consent to
the change, reorganization or termination of the corporate structure or
existence of Company or any of its Subsidiaries and to any corresponding
restructuring of the Obligations; (vi) any failure to perfect or continue
perfection of a security interest in any collateral which secures any of the
Obligations; (vii) any defenses, set-offs or counterclaims which Company may
allege or assert against any Beneficiary in respect of the Obligations,
including failure of consideration, breach of warranty, payment, statute of
frauds, statute of limitations, accord and satisfaction and usury; and (viii)
any other act or thing or omission, or delay to do any other act or thing, which
may or might in any manner or to any extent vary the risk of Holdings as an
obligor in respect of the Obligations.
8.5 Waivers by Holdings.
-------------------
Holdings hereby waives, for the benefit of Beneficiaries:
(i) any right to require any Beneficiary, as a condition of
payment or performance by Holdings, to (a) proceed against Company, any
other guarantor (including any Subsidiary Guarantor) of the Obligations or
any other Person, (b) proceed against or exhaust any security held from
Company, any such other guarantor or any other Person, (c) proceed against
or have resort to any balance of any deposit account or credit on the books
of any Beneficiary in favor of Company or any other Person, or (d) pursue
any other remedy in the power of any Beneficiary whatsoever;
(ii) any defense arising by reason of the incapacity, lack of
authority or any disability or other defense of Company including any
defense based on or arising out of the lack of validity or the
unenforceability of the Obligations or any agreement or instrument relating
thereto or by reason of the cessation of the liability of Company from any
cause other than payment in full of the Obligations;
(iii) any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in amount
nor in other respects more burdensome than that of the principal;
(iv) any defense based upon any Beneficiary's errors or
omissions in the administration of the Obligations, except behavior which
amounts to bad faith;
(v) (a) any principles or provisions of law, statutory or
otherwise, which are or might be in conflict with the terms hereof and any
legal or equitable discharge of Holdings' obligations hereunder, (b) the
benefit of any statute of limitations affecting Holdings' liability
hereunder or the enforcement hereof, (c) any rights to set-
121
offs, recoupments and counterclaims, and (d) promptness, diligence and any
requirement that any Beneficiary protect, secure, perfect or insure any
security interest or lien or any property subject thereto;
(vi) notices, demands, presentments, protests, notices of
protest, notices of dishonor and notices of any action or inaction,
including acceptance hereof, notices of default hereunder, notices of any
renewal, extension or modification of the Obligations or any agreement
related thereto, notices of any extension of credit to Company and notices
of any of the matters referred to in subsection 8.4 and any right to
consent to any thereof; and
(vii) any defenses or benefits that may be derived from or
afforded by law which limit the liability of or exonerate guarantors or
sureties, or which may conflict with the terms hereof.
8.6 Holdings' Rights of Subrogation, Contribution, Etc.
--------------------------------------------------
Holdings hereby waives any claim, right or remedy, direct or indirect,
that Holdings now has or may hereafter have against any Loan Party or any of its
assets in connection herewith or with the performance by Holdings of its
obligations hereunder, in each case whether such claim, right or remedy arises
in equity, under contract, by statute, under common law or otherwise and
including (i) any right of subrogation, reimbursement or indemnification that
Holdings now has or may hereafter have against any Loan Party, (ii) any right to
enforce, or to participate in, any claim, right or remedy that any Beneficiary
now has or may hereafter have against any Loan Party, and (iii) any benefit of,
and any right to participate in, any collateral or security now or hereafter
held by any Beneficiary. In addition, until the Obligations shall have been paid
in full and the Commitments shall have terminated and all Letters of Credit
shall have expired or been cancelled, Holdings shall withhold exercise of any
right of contribution Holdings may have against any other guarantor (including
any Subsidiary Guarantor) of the Obligations. Holdings further agrees that, to
the extent the waiver or agreement to withhold the exercise of its rights of
subrogation, reimbursement, indemnification and contribution as set forth herein
is found by a court of competent jurisdiction to be void or voidable for any
reason, any rights of subrogation, reimbursement or indemnification Holdings may
have against any Loan Party or against any collateral or security, and any
rights of contribution Holdings may have against any such other guarantor, shall
be junior and subordinate to any rights any Beneficiary may have against such
Loan Party, to all right, title and interest any Beneficiary may have in any
such collateral or security, and to any right any Beneficiary may have against
such other guarantor. If any amount shall be paid to Holdings on account of any
such subrogation, reimbursement, indemnification or contribution rights at any
time when all Obligations shall not have been paid in full, such amount shall be
held in trust for Administrative Agent on behalf of Beneficiaries and shall
forthwith be paid over to Administrative Agent for the benefit of Beneficiaries
to be credited and applied against the Obligations, whether matured or
unmatured, in accordance with the terms hereof.
122
8.7 Subordination of Other Obligations.
----------------------------------
Any Indebtedness of Company or any Subsidiary Guarantor now or
hereafter held by Holdings is hereby subordinated in right of payment to the
Obligations, and any such indebtedness collected or received by Holdings after
an Event of Default has occurred and is continuing shall be held in trust for
Administrative Agent on behalf of Beneficiaries and shall forthwith be paid over
to Administrative Agent for the benefit of Beneficiaries to be credited and
applied against the Obligations but without affecting, impairing or limiting in
any manner the liability of Holdings under any other provision hereof.
8.8 Continuing Guaranty.
-------------------
The Holdings Guaranty is a continuing guaranty and shall remain in
effect until all of the Obligations shall have been paid in full and the
Commitments shall have terminated and all Letters of Credit shall have expired
or been cancelled. Holdings hereby irrevocably waives any right to revoke the
Holdings Guaranty as to future transactions giving rise to any Obligations.
8.9 Authority of Holdings or Company.
--------------------------------
It is not necessary for any Beneficiary to inquire into the capacity
or powers of Holdings or Company or the officers, directors or any agents acting
or purporting to act on behalf of either of them.
8.10 Financial Condition of Company.
------------------------------
Any extension of credit may be granted to Company or continued from
time to time without notice to or authorization from Holdings, regardless of the
financial or other condition of Company at the time of any such grant or
continuation. No Beneficiary shall have any obligation to disclose or discuss
with Holdings its assessment, or Holdings' assessment, of the financial
condition of Company. Holdings has adequate means to obtain information from
Company on a continuing basis concerning the financial condition of Company and
its ability to perform its obligations under the Loan Documents, and Holdings
assumes the responsibility for being and keeping informed of the financial
condition of Company and of all circumstances bearing upon the risk of
nonpayment of the Obligations. Holdings hereby waives and relinquishes any duty
on the part of any Beneficiary to disclose any matter, fact or thing relating to
the business, operations or conditions of Company now known or hereafter known
by any Beneficiary.
8.11 Bankruptcy, Etc.
---------------
A. So long as any Obligations remain outstanding, Holdings shall not,
without the prior written consent of Administrative Agent acting pursuant to the
instructions of
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Requisite Lenders, commence or join with any other Person in commencing any
bankruptcy, reorganization or insolvency proceedings of or against Company. The
obligations of Holdings hereunder shall not be reduced, limited, impaired,
discharged, deferred, suspended or terminated by any proceeding, voluntary or
involuntary, involving the bankruptcy, insolvency, receivership, reorganization,
liquidation or arrangement of Company or by any defense which Company may have
by reason of the order, decree or decision of any court or administrative body
resulting from any such proceeding.
B. Holdings acknowledges and agrees that any interest on any
portion of the Obligations which accrues after the commencement of any
proceeding referred to in subsection 8.11A (or, if interest on any portion of
the Obligations ceases to accrue by operation of law by reason of the
commencement of said proceeding, such interest as would have accrued on such
portion of the Obligations if said proceedings had not been commenced) shall be
included in the Obligations because it is the intention of Holdings and
Beneficiaries that the Obligations which are guarantied by Holdings pursuant
hereto should be determined without regard to any rule of law or order which may
relieve Company of any portion of such Obligations. Holdings will permit any
trustee in bankruptcy, receiver, debtor in possession, assignee for the benefit
of creditors or similar person to pay Administrative Agent, or allow the claim
of Administrative Agent in respect of, any such interest accruing after the date
on which such proceeding is commenced.
C. In the event that all or any portion of the Obligations are paid
by Company, the obligations of Holdings hereunder shall continue and remain in
full force and effect or be reinstated, as the case may be, in the event that
all or any part of such payment(s) are rescinded or recovered directly or
indirectly from any Beneficiary as a preference, fraudulent transfer or
otherwise, and any such payments which are so rescinded or recovered shall
constitute Obligations for all purposes hereunder.
Section 9. EVENTS OF DEFAULT
If any of the following conditions or events ("Events of Default")
shall occur:
9.1 Failure to Make Payments When Due.
---------------------------------
Failure by Company to pay any installment of principal of any Loan
when due, whether at stated maturity, by acceleration, by notice of voluntary
prepayment, by mandatory prepayment or otherwise; failure by Company to pay when
due any amount payable to an Issuing Lender in reimbursement of any drawing
under a Letter of Credit; or failure by Company to pay any interest on any Loan
or any fee or any other amount due under this Agreement within five days after
the date due; or
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9.2 Default in Other Agreements.
---------------------------
(i) Failure of Holdings or any of its Subsidiaries to pay when
due any principal of or interest on or any other amount payable in
respect of one or more items of Indebtedness (other than Indebtedness
referred to in subsection 9.1) or Contingent Obligations in an
individual principal amount of $2,500,000 or more or with an aggregate
principal amount of $4,000,000 or more, in each case beyond the end of
any grace period provided therefor; or (ii) breach or default by
Holdings or any of its Subsidiaries with respect to any other material
term of (a) one or more items of Indebtedness or Contingent
Obligations in the individual or aggregate principal amounts referred
to in clause (i) above or (b) any loan agreement, mortgage, indenture
or other agreement relating to such item(s) of Indebtedness or
Contingent Obligation(s), if the effect of such breach or default is
to cause, or to permit the holder or holders of that Indebtedness or
Contingent Obligation(s) (or a trustee on behalf of such holder or
holders) to cause, that Indebtedness or Contingent Obligation(s) to
become or be declared due and payable prior to its stated maturity or
the stated maturity of any underlying obligation, as the case may be
(upon the giving or receiving of notice, lapse of time, both, or
otherwise); or
9.3 Breach of Certain Covenants.
---------------------------
Failure of Company to perform or comply with any term or condition
contained in subsection 2.5 or 6.2 or Section 7 of this Agreement; or
9.4 Breach of Warranty.
------------------
Any representation, warranty, certification or other statement made by
any Loan Party in any Loan Document or in any statement or certificate at any
time given by any Loan Party in writing pursuant hereto or thereto or in
connection herewith or therewith shall be false in any material respect on the
date as of which made; or
9.5 Other Defaults Under Loan Documents.
-----------------------------------
Any Loan Party shall default in the performance of or compliance with
any term contained in this Agreement or any of the other Loan Documents, other
than any such term referred to in any other subsection of this Section 9, and
such default shall not have been remedied or waived within 10 days after the
earlier of (i) an officer of Company or such Loan Party becoming aware of such
default or (ii) receipt by Company and such Loan Party of notice from
Administrative Agent or any Lender of such default; or
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9.6 Involuntary Bankruptcy; Appointment of Receiver, etc.
----------------------------------------------------
(i) A court having jurisdiction in the premises shall enter a
decree or order for relief in respect of Holdings or any of its
Subsidiaries in an involuntary case under the Bankruptcy Code or under any
other applicable bankruptcy, insolvency or similar law now or hereafter in
effect, which decree or order is not stayed; or any other similar relief
shall be granted under any applicable federal or state law; or (ii) an
involuntary case shall be commenced against Holdings or any of its
Subsidiaries under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect; or a
decree or order of a court having jurisdiction in the premises for the
appointment of a receiver, liquidator, sequestrator, trustee, custodian or
other officer having similar powers over Holdings or any of its
Subsidiaries, or over all or a substantial part of any of their respective
property, shall have been entered; or there shall have occurred the
involuntary appointment of an interim receiver, trustee or other custodian
of Holdings or any of its Subsidiaries for all or a substantial part of its
property; or a warrant of attachment, execution or similar process shall
have been issued against any substantial part of the property of Holdings
or any of its Subsidiaries, and any such event described in this clause
(ii) shall continue for 60 days unless dismissed, bonded or discharged; or
9.7 Voluntary Bankruptcy; Appointment of Receiver, etc.
--------------------------------------------------
(i) Holdings or any of its Subsidiaries shall have an order for
relief entered with respect to it or commence a voluntary case under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or
similar law now or hereafter in effect, or shall consent to the entry of an
order for relief in an involuntary case, or to the conversion of an
involuntary case to a voluntary case, under any such law, or shall consent
to the appointment of or taking possession by a receiver, trustee or other
custodian for all or a substantial part of its property; or Holdings or any
of its Subsidiaries shall make any assignment for the benefit of creditors;
or (ii) Holdings or any of its Subsidiaries shall be unable, or shall fail
generally, or shall admit in writing its inability, to pay its debts as
such debts become due; or the Board of Directors of Holdings or any of its
Subsidiaries (or any committee thereof) shall adopt any resolution or
otherwise authorize any action to approve any of the actions referred to in
clause (i) above or this clause (ii); or
9.8 Judgments and Attachments.
-------------------------
Any money judgment, writ or warrant of attachment or similar process
involving (i) in any individual case an amount in excess of $2,500,000 or (ii)
in the aggregate at any time an amount in excess of $4,000,000 (in either case
not adequately covered by insurance as to which a solvent and unaffiliated
insurance company has acknowledged coverage) shall be entered or filed against
Holdings or any of its Subsidiaries or any of their respective assets and
126
shall remain undischarged, unvacated, unbonded or unstayed for a period of 60
days (or in any event later than five days prior to the date of any proposed
sale thereunder); or
9.9 Dissolution.
-----------
Any order, judgment or decree shall be entered against Holdings or any
of its Subsidiaries decreeing the dissolution or split up of Holdings or that
Subsidiary and such order shall remain undischarged or unstayed for a period in
excess of 30 days; or
9.10 Employee Benefit Plans.
----------------------
There shall occur one or more ERISA Events which individually or in
the aggregate results in or might reasonably be expected to result in liability
of Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates
in excess of $500,000 during the term of this Agreement; or there shall exist an
amount of unfunded benefit liabilities (as defined in Section 4001(a)(18) of
ERISA), individually or in the aggregate for all Pension Plans (excluding for
purposes of such computation any Pension Plans with respect to which assets
exceed benefit liabilities), which exceeds $500,000; or
9.11 Change in Control.
-----------------
(i) prior to the consummation of an initial public offering of
the common stock of Holdings, MDCP shall cease to beneficially own and
control at least a majority of the issued and outstanding shares of capital
stock of Holdings entitled (without regard to the occurrence of any
contingency) to vote for the election of members of the Board of Directors
of Holdings; (ii) other than MDCP and its Affiliates, any Person or any two
or more Persons acting in concert shall have acquired beneficial ownership
(within the meaning of Rule 13d-3 of the Securities and Exchange Commission
under the Exchange Act), directly or indirectly, of Securities of Holdings
(or other Securities convertible into such Securities) representing 35% or
more of the combined voting power of all Securities of Holdings entitled to
vote in the election of directors, other than Securities having such power
only by reason of the happening of a contingency; or (iii) Holdings shall
cease to own and control 100% of the outstanding capital stock of Company;
or
9.12 Invalidity of Guaranties; Failure of Security; Repudiation of Obligations.
-------------------------------------------------------------------------
At any time after the execution and delivery thereof, (i) any Guaranty
for any reason, other than the satisfaction in full of all Obligations, shall
cease to be in full force and effect (other than in accordance with its terms)
or shall be declared to be null and void, (ii) any Collateral Document shall
cease to be in full force and effect (other than by reason of a release of
Collateral thereunder in accordance with the terms hereof or thereof, the
satisfaction in full of the Obligations or any other termination of such
Collateral Document in accordance with the terms
127
hereof or thereof) or shall be declared null and void, or Administrative Agent
shall not have or shall cease to have a valid and perfected First Priority Lien
in any Collateral purported to be covered thereby and having a fair market
value, individually or in the aggregate, of $100,000 or more, in each case for
any reason other than the failure of Administrative Agent or any Lender to take
any action within its control, or (iii) any Loan Party shall contest the
validity or enforceability of any Loan Document in writing or deny in writing
that it has any further liability, including with respect to future advances by
Lenders, under any Loan Document to which it is a party;
THEN (i) upon the occurrence of any Event of Default described in subsection 9.6
or 9.7, each of (a) the unpaid principal amount of and accrued interest on the
Loans, (b) an amount equal to the maximum amount that may at any time be drawn
under all Letters of Credit then outstanding (whether or not any beneficiary
under any such Letter of Credit shall have presented, or shall be entitled at
such time to present, the drafts or other documents or certificates required to
draw under such Letter of Credit), and (c) all other Obligations shall
automatically become immediately due and payable, without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by Company, and the obligation of each Lender to make any Loan, the
obligation of Administrative Agent to issue any Letter of Credit and the right
of any Lender to issue any Letter of Credit hereunder shall thereupon terminate,
and (ii) upon the occurrence and during the continuation of any other Event of
Default, Administrative Agent shall, upon the written request or with the
written consent of Requisite Lenders, by written notice to Company, declare all
or any portion of the amounts described in clauses (a) through (c) above to be,
and the same shall forthwith become, immediately due and payable, and the
obligation of each Lender to make any Loan, the obligation of Administrative
Agent to issue any Letter of Credit and the right of any Lender to issue any
Letter of Credit hereunder shall thereupon terminate; provided that the
--------
foregoing shall not affect in any way the obligations of Lenders under
subsection 3.3C(i) or the obligations of Lenders to purchase participations in
any unpaid Swing Line Loans as provided in subsection 2.1A(iii).
Any amounts described in clause (b) above, when received by
Administrative Agent, shall be held by Administrative Agent pursuant to the
terms of the Collateral Account Agreement and shall be applied as therein
provided.
Notwithstanding anything contained in the second preceding paragraph,
if at any time within 60 days after an acceleration of the Loans pursuant to
clause (ii) of such paragraph Company shall pay all arrears of interest and all
payments on account of principal which shall have become due otherwise than as a
result of such acceleration (with interest on principal and, to the extent
permitted by law, on overdue interest, at the rates specified in this Agreement)
and all Events of Default and Potential Events of Default (other than non-
payment of the principal of and accrued interest on the Loans, in each case
which is due and payable solely by virtue of acceleration) shall be remedied or
waived pursuant to subsection 11.6, then Requisite Lenders, by written notice to
Company, may at their option rescind and annul such acceleration and its
consequences; but such action shall not affect any subsequent Event of Default
or Potential Event
128
of Default or impair any right consequent thereon. The provisions of this
paragraph are intended merely to bind Lenders to a decision which may be made at
the election of Requisite Lenders and are not intended, directly or indirectly,
to benefit Company, and such provisions shall not at any time be construed so as
to grant Company the right to require Lenders to rescind or annul any
acceleration hereunder or to preclude Administrative Agent or Lenders from
exercising any of the rights or remedies available to them under any of the Loan
Documents, even if the conditions set forth in this paragraph are met.
Section 10. Administrative Agent
10.1 Appointment.
-----------
CSFB is hereby appointed Administrative Agent hereunder and under the
other Loan Documents and each Lender hereby authorizes Administrative Agent to
act as its agent in accordance with the terms of this Agreement and the other
Loan Documents. Administrative Agent agrees to act upon the express conditions
contained in this Agreement and the other Loan Documents, as applicable. The
provisions of this Section 10 are solely for the benefit of Administrative Agent
and Lenders, and no Loan Party shall have any rights as a third party
beneficiary of any of the provisions thereof. In performing its functions and
duties under this Agreement, Administrative Agent shall act solely as an agent
of Lenders and does not assume and shall not be deemed to have assumed any
obligation towards or relationship of agency or trust with or for Holdings or
any of its Subsidiaries.
10.2 Powers and Duties; General Immunity.
-----------------------------------
▇. ▇▇▇▇▇▇; Duties Specified. Each Lender irrevocably authorizes
Administrative Agent to take such action on such Lender's behalf and to exercise
such powers, rights and remedies hereunder and under the other Loan Documents as
are specifically delegated or granted to Administrative Agent by the terms
hereof and thereof, together with such powers, rights and remedies as are
reasonably incidental thereto. Administrative Agent shall have only those
duties and responsibilities that are expressly specified in this Agreement and
the other Loan Documents. Administrative Agent may exercise such powers, rights
and remedies and perform such duties by or through its agents or employees.
Administrative Agent shall not have, by reason of this Agreement or any of the
other Loan Documents, a fiduciary relationship in respect of any Lender; and
nothing in this Agreement or any of the other Loan Documents, expressed or
implied, is intended to or shall be so construed as to impose upon
Administrative Agent any obligations in respect of this Agreement or any of the
other Loan Documents except as expressly set forth herein or therein.
B. No Responsibility for Certain Matters. Administrative Agent shall
not be responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency of this Agreement or any
other Loan Document or for
129
any representations, warranties, recitals or statements made herein or therein
or made in any written or oral statements or in any financial or other
statements, instruments, reports or certificates or any other documents
furnished or made by Administrative Agent to Lenders or by or on behalf of any
Loan Party to Administrative Agent or any Lender in connection with the Loan
Documents and the transactions contemplated thereby or for the financial
condition or business affairs of Company or any other Person liable for the
payment of any Obligations, nor shall Administrative Agent be required to
ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained in any of the Loan
Documents or as to the use of the proceeds of the Loans or the use of the
Letters of Credit or as to the existence or possible existence of any Event of
Default or Potential Event of Default. Anything contained in this Agreement to
the contrary notwithstanding, Administrative Agent shall not have any liability
arising from confirmations of the amount of outstanding Loans or the Letter of
Credit Usage or the component amounts thereof.
C. Exculpatory Provisions. Neither Administrative Agent nor any of
its officers, directors, employees or agents shall be liable to Lenders for any
action taken or omitted by Administrative Agent under or in connection with any
of the Loan Documents except to the extent caused by Administrative Agent's
gross negligence or willful misconduct. Administrative Agent shall be entitled
to refrain from any act or the taking of any action (including the failure to
take an action) in connection with this Agreement or any of the other Loan
Documents or from the exercise of any power, discretion or authority vested in
it hereunder or thereunder unless and until Administrative Agent shall have
received instructions in respect thereof from Requisite Lenders (or such other
Lenders as may be required to give such instructions under subsection 11.6) and,
upon receipt of such instructions from Requisite Lenders (or such other Lenders,
as the case may be), Administrative Agent shall be entitled to act or (where so
instructed) refrain from acting, or to exercise such power, discretion or
authority, in accordance with such instructions. Without prejudice to the
generality of the foregoing, (i) Administrative Agent shall be entitled to rely,
and shall be fully protected in relying, upon any communication, instrument or
document believed by it to be genuine and correct and to have been signed or
sent by the proper person or persons, and shall be entitled to rely and shall be
protected in relying on opinions and judgments of attorneys (who may be
attorneys for Company and its Subsidiaries), accountants, experts and other
professional advisors selected by it; and (ii) no Lender shall have any right of
action whatsoever against Administrative Agent as a result of Administrative
Agent acting or (where so instructed) refraining from acting under this
Agreement or any of the other Loan Documents in accordance with the instructions
of Requisite Lenders (or such other Lenders as may be required to give such
instructions under subsection 11.6).
D. Administrative Agent Entitled to Act as Lender. The agency hereby
created shall in no way impair or affect any of the rights and powers of, or
impose any duties or obligations upon, Administrative Agent in its individual
capacity as a Lender hereunder. With respect to its participation in the Loans
and the Letters of Credit, Administrative Agent shall have the same rights and
powers hereunder as any other Lender and may exercise the same as though it were
not performing the duties and functions delegated to it hereunder, and the term
130
"Lender" or "Lenders" or any similar term shall, unless the context clearly
otherwise indicates, include Administrative Agent in its individual capacity.
Administrative Agent and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of banking, trust, financial advisory or other
business with Holdings or any of its Affiliates as if it were not performing the
duties specified herein, and may accept fees and other consideration from
Holdings or Company for services in connection with this Agreement and otherwise
without having to account for the same to Lenders.
10.3 Representations and Warranties; No Responsibility For Appraisal of
------------------------------------------------------------------
Creditworthiness.
----------------
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Holdings and
its Subsidiaries in connection with the making of the Loans and the issuance of
Letters of Credit hereunder and that it has made and shall continue to make its
own appraisal of the creditworthiness of Holdings and its Subsidiaries.
Administrative Agent shall not have any duty or responsibility, either initially
or on a continuing basis, to make any such investigation or any such appraisal
on behalf of Lenders or to provide any Lender with any credit or other
information with respect thereto, whether coming into its possession before the
making of the Loans or at any time or times thereafter, and Administrative Agent
shall not have any responsibility with respect to the accuracy of or the
completeness of any information provided to Lenders.
10.4 Right to Indemnity.
------------------
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify Administrative Agent, to the extent that Administrative Agent shall
not have been reimbursed by Company, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including counsel fees and disbursements) or disbursements of any kind
or nature whatsoever which may be imposed on, incurred by or asserted against
Administrative Agent in exercising its powers, rights and remedies or performing
its duties hereunder or under the other Loan Documents or otherwise in its
capacity as Administrative Agent in any way relating to or arising out of this
Agreement or the other Loan Documents; provided that no Lender shall be liable
--------
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from
Administrative Agent's gross negligence or willful misconduct. If any indemnity
furnished to Administrative Agent for any purpose shall, in the opinion of
Administrative Agent, be insufficient or become impaired, Administrative Agent
may call for additional indemnity and cease, or not commence, to do the acts
indemnified against until such additional indemnity is furnished.
131
10.5 Successor Administrative Agent and Swing Line Lender.
----------------------------------------------------
A. Successor Administrative Agent. Administrative Agent may resign at
any time by giving 30 days' prior written notice thereof to Lenders and Company,
and Administrative Agent may be removed at any time with or without cause by an
instrument or concurrent instruments in writing delivered to Company and
Administrative Agent and signed by Requisite Lenders. Upon any such notice of
resignation or any such removal, Requisite Lenders shall have the right, upon
five Business Days' written notice to Company and with the consent of Company
(which consent (i) shall not be unreasonably withheld and (ii) shall be deemed
to have been given if Company shall not have responded to such written notice
within five Business Days after receipt thereof), to appoint a successor
Administrative Agent. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent, that successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring or removed Administrative
Agent and the retiring or removed Administrative Agent shall be discharged from
its duties and obligations under this Agreement. After any retiring or removed
Administrative Agent's resignation or removal hereunder as Administrative Agent,
the provisions of this Section 10 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent under this
Agreement.
B. Successor Swing Line Lender. Any resignation or removal of
Administrative Agent pursuant to subsection 10.5A shall also constitute the
resignation or removal of CSFB or its successor as Swing Line Lender, and any
successor Administrative Agent appointed pursuant to subsection 10.5A shall,
upon its acceptance of such appointment, become the successor Swing Line Lender
for all purposes hereunder. In such event (i) Company shall prepay any
outstanding Swing Line Loans made by the retiring or removed Administrative
Agent in its capacity as Swing Line Lender, (ii) upon such prepayment, the
retiring or removed Administrative Agent and Swing Line Lender shall surrender
the Swing Line Note held by it to Company for cancellation, and (iii) Company
shall issue a new Swing Line Note to the successor Administrative Agent and
Swing Line Lender substantially in the form of Exhibit VIII annexed hereto, in
------------
the principal amount of the Swing Line Loan Commitment then in effect and with
other appropriate insertions.
10.6 Collateral Documents and Guaranties.
-----------------------------------
Each Lender hereby further authorizes Administrative Agent, on behalf
of and for the benefit of Lenders, to enter into each Collateral Document as
secured party and to be the agent for and representative of Lenders under each
Guaranty, and each Lender agrees to be bound by the terms of each Collateral
Document and Guaranty; provided that Administrative Agent shall not (i) enter
--------
into or consent to any material amendment, modification, termination or waiver
of any provision contained in any Collateral Document or Guaranty or (ii)
release any Collateral (except as otherwise expressly permitted or required
pursuant to the terms of this Agreement or the applicable Collateral Document),
in each case without the prior consent of
132
Requisite Lenders (or, if required pursuant to subsection 11.6, all Lenders);
provided further, however, that, without further written consent or
-------- ------- -------
authorization from Lenders, Administrative Agent may execute any documents or
instruments necessary to (a) release any Lien encumbering any item of Collateral
that is the subject of a sale or other disposition of assets permitted by this
Agreement or to which Requisite Lenders have otherwise consented or (b) release
any Subsidiary Guarantor from the Subsidiary Guaranty if all of the capital
stock of such Subsidiary Guarantor is sold to any Person (other than an
Affiliate of Company) pursuant to a sale or other disposition permitted
hereunder or to which Requisite Lenders have otherwise consented. Anything
contained in any of the Loan Documents to the contrary notwithstanding, Company,
Administrative Agent and each Lender hereby agree that (X) no Lender shall have
any right individually to realize upon any of the Collateral under any
Collateral Document or to enforce any Guaranty, it being understood and agreed
that all powers, rights and remedies under the Collateral Documents and the
Guaranties may be exercised solely by Administrative Agent for the benefit of
Lenders in accordance with the terms thereof, and (Y) in the event of a
foreclosure by Administrative Agent on any of the Collateral pursuant to a
public or private sale, Administrative Agent or any Lender may be the purchaser
of any or all of such Collateral at any such sale and Administrative Agent, as
agent for and representative of Lenders (but not any Lender or Lenders in its or
their respective individual capacities unless Requisite Lenders shall otherwise
agree in writing) shall be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such public sale, to use and apply any of the Obligations
as a credit on account of the purchase price for any collateral payable by
Administrative Agent at such sale.
Section 11. MISCELLANEOUS
11.1 Assignments and Participations in Loans and Letters of Credit.
-------------------------------------------------------------
A. General. Subject to subsection 11.1B, each Lender shall have the
right at any time to (i) sell, assign or transfer to any Eligible Assignee, or
(ii) sell participations to any Person in, all or any part of its Commitments or
any Loan or Loans made by it or its Letters of Credit or participations therein
or any other interest herein or in any other Obligations owed to it; provided
--------
that no such sale, assignment, transfer or participation shall, without the
consent of Company, require Company to file a registration statement with the
Securities and Exchange Commission or apply to qualify such sale, assignment,
transfer or participation under the securities laws of any state; provided,
--------
further that no such sale, assignment or transfer described in clause (i) above
-------
shall be effective unless and until an Assignment Agreement effecting such sale,
assignment or transfer shall have been accepted by Administrative Agent and
recorded in the Register as provided in subsection 11.1B(ii); provided, further
-------- -------
that no such sale, assignment, transfer or participation of any Letter of Credit
or any participation therein may be made separately from a sale, assignment,
transfer or participation of a corresponding interest in the Revolving Loan
Commitment and the Revolving Loans of the Lender effecting such sale,
assignment, transfer or participation; and provided, further that, anything
-------- -------
contained herein to the contrary notwithstanding, the Swing Line Loan Commitment
and the Swing Line Loans of
133
Swing Line Lender may not be sold, assigned or transferred as described in
clause (i) above to any Person other than a successor Administrative Agent and
Swing Line Lender to the extent contemplated by subsection 11.5. Except as
otherwise provided in this subsection 11.1, no Lender shall, as between Company
and such Lender, be relieved of any of its obligations hereunder as a result of
any sale, assignment or transfer of, or any granting of participations in, all
or any part of its Commitments or the Loans, the Letters of Credit or
participations therein, or the other Obligations owed to such Lender.
B. Assignments.
(i) Amounts and Terms of Assignments. Each Commitment, Loan,
--------------------------------
Letter of Credit or participation therein, or other Obligation may (a) be
assigned in any amount to another Lender, or to an Affiliate or Approved
Fund of the assigning Lender or another Lender, with the giving of notice
to Company and Administrative Agent or (b) be assigned in an aggregate
amount of not less than $2,500,000 (or such lesser amount as shall
constitute the aggregate amount of the Commitments, Loans, Letters of
Credit and participations therein, and other Obligations of the assigning
Lender) to any other Eligible Assignee with the consent of Company and
Administrative Agent (which consent of Company and Administrative Agent
shall not be unreasonably withheld or delayed). To the extent of any such
assignment in accordance with either clause (a) or (b) above, the assigning
Lender shall be relieved of its obligations with respect to its
Commitments, Loans, Letters of Credit or participations therein, or other
Obligations or the portion thereof so assigned. The parties to each such
assignment shall execute and deliver to Administrative Agent, for its
acceptance and recording in the Register, an Assignment Agreement, together
with a processing and recordation fee of $3,500 and such forms,
certificates or other evidence, if any, with respect to United States
federal income tax withholding matters as the assignee under such
Assignment Agreement may be required to deliver to Administrative Agent
pursuant to subsection 2.7B(iii)(a). Upon such execution, delivery,
acceptance and recordation, from and after the effective date specified in
such Assignment Agreement, (y) the assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment Agreement, shall have the rights
and obligations of a Lender hereunder and (z) the assigning Lender
thereunder shall, to the extent that rights and obligations hereunder have
been assigned by it pursuant to such Assignment Agreement, relinquish its
rights (other than any rights which survive the termination of this
Agreement under subsection 11.9B) and be released from its obligations
under this Agreement (and, in the case of an Assignment Agreement covering
all or the remaining portion of an assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to be a party
hereto; provided that, anything contained in any of the Loan Documents to
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the contrary notwithstanding, if such Lender is the Issuing Lender with
respect to any outstanding Letters of Credit such Lender shall continue to
have all rights and obligations of an Issuing Lender with respect to such
Letters of Credit until the cancellation or expiration of such Letters of
Credit and the reimbursement of any
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amounts drawn thereunder). The Commitments hereunder shall be modified to
reflect the Commitment of such assignee and any remaining Commitment of
such assigning Lender and, if any such assignment occurs after the issuance
of the Notes hereunder, the assigning Lender shall, upon the effectiveness
of such assignment or as promptly thereafter as practicable, surrender its
Note to Administrative Agent for cancellation, and thereupon new Notes
shall be issued to the assignee and/or to the assigning Lender,
substantially in the form of Exhibit VII annexed hereto with appropriate
-----------
insertions, to reflect the new Commitments of the assignee and/or the
assigning Lender.
(ii) Acceptance by Administrative Agent; Recordation in
--------------------------------------------------
Register. Upon its receipt of an Assignment Agreement executed by an
assigning Lender and an assignee representing that it is an Eligible
Assignee, together with the processing and recordation fee referred to in
subsection 11.1B(i) and any forms, certificates or other evidence with
respect to United States federal income tax withholding matters that such
assignee may be required to deliver to Administrative Agent pursuant to
subsection 2.7B(iii)(a), Administrative Agent shall, if Administrative
Agent and Company have consented to the assignment evidenced thereby (in
each case to the extent such consent is required pursuant to subsection
11.1B(i)), (a) accept such Assignment Agreement by executing a counterpart
thereof as provided therein (which acceptance shall evidence any required
consent of Administrative Agent to such assignment), (b) record the
information contained therein in the Register, and (c) give prompt notice
thereof to Company. Administrative Agent shall maintain a copy of each
Assignment Agreement delivered to and accepted by it as provided in this
subsection 11.1B(ii).
C. Participations. The holder of any participation, other than an
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except action
directly affecting (i) the extension of the scheduled final maturity date of, or
the regularly scheduled maturity of any portion of the principal amount of or
interest on, any Loan allocated to such participation or (ii) a reduction of the
principal amount of or the rate of interest payable on any Loan allocated to
such participation, and all amounts payable by Company hereunder (including
amounts payable to such Lender pursuant to subsections 2.6D, 2.7 and 3.6) shall
be determined as if such Lender had not sold such participation. Company and
each Lender hereby acknowledge and agree that, solely for purposes of
subsections 11.4 and 11.5, (a) any participation will give rise to a direct
obligation of Company to the participant and (b) the participant shall be
considered to be a "Lender".
D. Assignments to Federal Reserve Banks. In addition to the
assignments and participations permitted under the foregoing provisions of this
subsection 11.1, any Lender may assign and pledge all or any portion of its
Loans, the other Obligations owed to such Lender, and its Notes to any Federal
Reserve Bank as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any operating circular issued by
such Federal Reserve Bank; provided that (i) no Lender shall, as between Company
--------
and such Lender, be relieved of any of its obligations hereunder as a result of
any such assignment and pledge and
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(ii) in no event shall such Federal Reserve Bank be considered to be a "Lender"
or be entitled to require the assigning Lender to take or omit to take any
action hereunder.
E. Information. Each Lender may furnish any information concerning
Holdings and its Subsidiaries in the possession of that Lender from time to time
to assignees and participants (including prospective assignees and
participants), subject to subsection 11.19.
F. Special Purpose Funding Vehicle. Notwithstanding anything to the
contrary contained herein, any Lender (a "Granting Bank") may grant to a special
-------------
purpose funding vehicle (a "SPC"), identified as such in writing from time to
---
time by the Granting Bank to the Administrative Agent and Company, the option to
provide to Company all or any part of any Loan that such Granting Bank would
otherwise be obligated to make to Company pursuant to this Agreement; provided
--------
that (i) nothing herein shall constitute a commitment by any SPC to make any
----
Loan, (ii) if an SPC elects not to exercise such option or otherwise fails to
provide all or any part of such Loan, the Granting Bank shall be obligated to
make such Loan pursuant to the terms hereof. The making of a Loan by an SPC
hereunder shall utilize the Commitment of the Granting Bank to the same extent,
and as if, such Loan were made by such Granting Bank. Each party hereto hereby
agrees that no SPC shall be liable for any indemnity or similar payment
obligation under this Agreement (all liability for which shall remain with the
Granting Bank). In furtherance of the foregoing, each party hereto hereby
agrees (which agreement shall survive the termination of this Agreement) that,
prior to the date that is one year and one day after the payment in full of all
outstanding commercial paper or other senior indebtedness of any SPC, it will
not institute against, or join any other person in instituting against, such SPC
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under the laws of the United States or any State thereof. In
addition, notwithstanding anything to the contrary contained in this subsection
11.1F, any SPC may (i) with notice to, but without the prior written consent of,
Company and the Administrative Agent and without paying any processing fee
therefor, assign all or a portion of its interests in any Loans to the Granting
Bank or to any financial institutions (consented to by Company and
Administrative Agent) providing liquidity and/or credit support to or for the
account of such SPC to support the funding or maintenance of Loans and (ii)
disclose on a confidential basis any non-public information relating to its
Loans to any rating agency, commercial paper dealer or provider of any surety,
guarantee or credit or liquidity enhancement to such SPC. This section may not
be amended without the written consent of the SPC.
G. Representations of Lenders. Each Lender listed on the signature
pages hereof hereby represents and warrants (i) that it is an Eligible Assignee
described in clause (A) of the definition thereof; (ii) that it has experience
and expertise in the making of or investing in loans such as the Loans; and
(iii) that it will make or invest in its Loans for its own account in the
ordinary course of its business and without a view to distribution of such Loans
within the meaning of the Securities Act or the Exchange Act or other federal
securities laws (it being understood that, subject to the provisions of this
subsection 11.1, the disposition of such Loans or any interests therein shall at
all times remain within its exclusive control). Each Lender that
136
becomes a party hereto pursuant to an Assignment Agreement shall be deemed to
agree that the representations and warranties of such Lender contained in
Section 2(c) of such Assignment Agreement are incorporated herein by this
reference.
11.2 Expenses.
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Whether or not the transactions contemplated hereby shall be
consummated, Company agrees to pay promptly (i) all the actual and reasonable
costs and expenses of preparation of the Loan Documents and any consents,
amendments, waivers or other modifications thereto; (ii) all the costs of
furnishing all opinions by counsel for Company (including any opinions requested
by Lenders as to any legal matters arising hereunder) and of each Loan Party's
performance of and compliance with all agreements and conditions on its part to
be performed or complied with under this Agreement and the other Loan Documents
including with respect to confirming compliance with environmental, insurance
and solvency requirements; (iii) the reasonable fees, expenses and disbursements
of counsel to Administrative Agent (including allocated costs of internal
counsel) in connection with the negotiation, preparation, execution and
administration of the Loan Documents and any consents, amendments, waivers or
other modifications thereto and any other documents or matters requested by
Company; (iv) all the actual costs and reasonable expenses of creating and
perfecting Liens in favor of Administrative Agent on behalf of Lenders pursuant
to any Collateral Document, including filing and recording fees, expenses and
taxes, stamp or documentary taxes, search fees, title insurance premiums, and
reasonable fees, expenses and disbursements of counsel to Administrative Agent
and of counsel providing any opinions that Administrative Agent or Requisite
Lenders may request in respect of the Collateral Documents or the Liens created
pursuant thereto; (v) all the actual costs and reasonable expenses (including
the reasonable fees, expenses and disbursements of any auditors, accountants or
appraisers and any environmental or other consultants, advisors and agents
employed or retained by Administrative Agent or its counsel) of obtaining and
reviewing any appraisals provided for under subsection 6.9D and any
environmental audits or reports provided for under subsection 4.2J or 6.9C; (vi)
the custody or preservation of any of the Collateral; (vii) all other actual and
reasonable costs and expenses incurred by Administrative Agent in connection
with the syndication of the Commitments and the negotiation, preparation and
execution of the Loan Documents and any consents, amendments, waivers or other
modifications thereto and the transactions contemplated thereby; and (viii)
after the occurrence of an Event of Default, all costs and expenses, including
reasonable attorneys' fees (including allocated costs of internal counsel) and
costs of settlement, incurred by Administrative Agent and Lenders in enforcing
any Obligations of or in collecting any payments due from any Loan Party
hereunder or under the other Loan Documents by reason of such Event of Default
(including in connection with the sale of, collection from, or other realization
upon any of the Collateral or the enforcement of the Guaranties or in connection
with any refinancing or restructuring of the credit arrangements provided under
this Agreement in the nature of a "work-out" or pursuant to any insolvency or
bankruptcy proceedings.
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11.3 Indemnity.
---------
In addition to the payment of expenses pursuant to subsection 11.2,
whether or not the transactions contemplated hereby shall be consummated,
Company agrees to defend (subject to Indemnitees' selection of counsel),
indemnify, pay and hold harmless Administrative Agent and Lenders, and the
officers, directors, employees, agents and affiliates of Administrative Agent
and Lenders (collectively called the "Indemnitees"), from and against any and
all Indemnified Liabilities (as hereinafter defined); provided that Company
--------
shall not have any obligation to any Indemnitee hereunder with respect to any
Indemnified Liabilities to the extent such Indemnified Liabilities arise from
the gross negligence or willful misconduct of that Indemnitee.
As used herein, "Indemnified Liabilities" means, collectively, any and
all liabilities, obligations, losses, damages (including natural resource
damages), penalties, actions, judgments, suits, claims (including Environmental
Claims), costs (including the costs of any investigation, study, sampling,
testing, abatement, cleanup, removal, remediation or other response action
necessary to remove, remediate, clean up or ▇▇▇▇▇ any Hazardous Materials
Activity), expenses and disbursements of any kind or nature whatsoever
(including the reasonable fees and disbursements of counsel for Indemnitees in
connection with any investigative, administrative or judicial proceeding
commenced or threatened by any Person, whether or not any such Indemnitee shall
be designated as a party or a potential party thereto, and any fees or expenses
incurred by Indemnitees in enforcing this indemnity), whether direct, indirect
or consequential and whether based on any federal, state or foreign laws,
statutes, rules or regulations (including securities and commercial laws,
statutes, rules or regulations and Environmental Laws), on common law or
equitable cause or on contract or otherwise, that may be imposed on, incurred
by, or asserted against any such Indemnitee, in any manner relating to or
arising out of (i) this Agreement or the other Loan Documents or the Existing
Agreements or the Related Agreements or the transactions contemplated hereby or
thereby (including Lenders' agreement to make the Loans hereunder or the use or
intended use of the proceeds thereof or the issuance of Letters of Credit
hereunder or the use or intended use of any thereof, or any enforcement of any
of the Loan Documents (including any sale of, collection from, or other
realization upon any of the Collateral or the enforcement of the Guaranties),
(ii) the statements contained in the commitment letter delivered by any Lender
to Company with respect thereto, or (iii) any Environmental Claim or any
Hazardous Materials Activity relating to or arising from, directly or
indirectly, any past or present activity, operation, land ownership, or practice
of Holdings or any of its Subsidiaries.
To the extent that the undertakings to defend, indemnify, pay and hold
harmless set forth in this subsection 11.3 may be unenforceable in whole or in
part because they are violative of any law or public policy, Company shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.
138
11.4 Set-Off; Security Interest in Deposit Accounts.
----------------------------------------------
In addition to any rights now or hereafter granted under applicable
law and not by way of limitation of any such rights, upon the occurrence of any
Event of Default each Lender is hereby authorized by Company at any time or from
time to time, without notice to Company or to any other Person, any such notice
being hereby expressly waived, to set off and to appropriate and to apply any
and all deposits (general or special, including Indebtedness evidenced by
certificates of deposit, whether matured or unmatured, but not including trust
accounts) and any other Indebtedness at any time held or owing by that Lender to
or for the credit or the account of Company against and on account of the
obligations and liabilities of Company to that Lender under this Agreement, the
Letters of Credit and participations therein and the other Loan Documents,
including all claims of any nature or description arising out of or connected
with this Agreement, the Letters of Credit and participations therein or any
other Loan Document, irrespective of whether or not (i) that Lender shall have
made any demand hereunder or (ii) the principal of or the interest on the Loans
or any amounts in respect of the Letters of Credit or any other amounts due
hereunder shall have become due and payable pursuant to Section 11 and although
said obligations and liabilities, or any of them, may be contingent or
unmatured. Company hereby further grants to Administrative Agent and each Lender
a security interest in all deposits and accounts maintained with Administrative
Agent or such Lender as security for the Obligations.
11.5 Ratable Sharing.
---------------
Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment (other than a voluntary prepayment of Loans made
and applied in accordance with the terms of this Agreement), by realization upon
security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Loan
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, amounts payable in
respect of Letters of Credit, fees and other amounts then due and owing to that
Lender hereunder or under the other Loan Documents (collectively, the "Aggregate
Amounts Due" to such Lender) which is greater than the proportion received by
any other Lender in respect of the Aggregate Amounts Due to such other Lender,
then the Lender receiving such proportionately greater payment shall (i) notify
Administrative Agent and each other Lender of the receipt of such payment and
(ii) apply a portion of such payment to purchase participations (which it shall
be deemed to have purchased from each seller of a participation simultaneously
upon the receipt by such seller of its portion of such payment) in the Aggregate
Amounts Due to the other Lenders so that all such recoveries of Aggregate
Amounts Due shall be shared by all Lenders in proportion to the Aggregate
Amounts Due to them; provided that if all or part of such proportionately
--------
greater payment received by such purchasing Lender is thereafter recovered from
such Lender upon the bankruptcy or reorganization of Company or otherwise, those
purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to such purchasing Lender ratably to the
139
extent of such recovery, but without interest. Company expressly consents to the
foregoing arrangement and agrees that any holder of a participation so purchased
may exercise any and all rights of banker's lien, set-off or counterclaim with
respect to any and all monies owing by Company to that holder with respect
thereto as fully as if that holder were owed the amount of the participation
held by that holder.
11.6 Amendments and Waivers.
----------------------
No amendment, modification, termination or waiver of any provision of
this Agreement or of the Notes, or consent to any departure by Company or any
other Loan Party therefrom, shall in any event be effective without the written
concurrence of Requisite Lenders; provided that any such amendment,
--------
modification, termination, waiver or consent which: reduces the principal amount
of any of the Loans; changes in any manner the definition of "Requisite
Lenders"; changes in any manner any provision of this Agreement which, by its
terms, expressly requires the approval or concurrence of all Lenders; postpones
the date or reduces the amount of any scheduled payment (but not prepayment) of
principal of any of the Loans; postpones the date on which any interest or any
fees are payable; decreases the interest rate borne by any of the Loans or the
amount of any fees payable hereunder; increases the maximum duration of Interest
Periods permitted hereunder; releases all or substantially all of the
Collateral; releases Holdings or any Subsidiary Guarantor from its obligations
under the Guaranties; reduces the amount or postpones the due date of any amount
payable in respect of, or extends the required expiration date of, any Letter of
Credit; changes the obligations of Lenders relating to the purchase of
participations in Letters of Credit in any manner that could be adverse to any
Issuing Lender; or changes in any manner the provisions contained in subsection
9.1 or this subsection 11.6 shall be effective only if evidenced by a writing
signed by or on behalf of all Lenders to whom are owed Obligations being
directly affected by such amendment, modification, termination, waiver or
consent. In addition, (i) any amendment, modification, termination or waiver of
any of the provisions contained in Section 4 shall be effective only if
evidenced by a writing signed by or on behalf of Administrative Agent and
Requisite Lenders, (ii) no amendment, modification, termination or waiver of any
provision of any Note shall be effective without the written concurrence of the
Lender which is the holder of that Note, (iii) no increase in the Commitments of
any Lender over the amount thereof then in effect shall be effective without the
written concurrence of that Lender, it being understood and agreed that in no
event shall waivers or modifications of conditions precedent, covenants, Events
of Default, Potential Events of Default or of a mandatory prepayment be deemed
to constitute an increase of the Commitment of any Lender and that an increase
in the available portion of any Commitment of any Lender shall not be deemed to
constitute an increase in the Commitment of such Lender, (iv) no amendment,
modification, termination or waiver of any provision of subsection 2.1A(iii) or
any other provision of this Agreement relating to the Swing Line Loan Commitment
or the Swing Line Loans shall be effective without the written concurrence of
Swing Line Lender, (v) no amendment, modification, termination or waiver of any
provision of Section 3 relating to the rights or obligations of any or all
Issuing Lenders shall be effective without the written concurrence of
Administrative Agent and each Lender who is an Issuing Lender with respect to
140
any Letter of Credit then outstanding, and (vi) no amendment, modification,
termination or waiver of any provision of Section 10 or of any other provision
of this Agreement which, by its terms, expressly requires the approval or
concurrence of Administrative Agent shall be effective without the written
concurrence of Administrative Agent. Administrative Agent may, but shall have no
obligation to, with the concurrence of any Lender, execute amendments,
modifications, waivers or consents on behalf of that Lender. Any waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which it was given. No notice to or demand on Company in any case
shall entitle Company to any other or further notice or demand in similar or
other circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this subsection 11.6 shall be binding upon each
Lender at the time outstanding, each future Lender and, if signed by Holdings or
Company, on Holdings or Company, as the case may be.
11.7 Independence of Covenants.
-------------------------
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.
11.8 Notices.
-------
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States mail
or courier service and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage prepaid
and properly addressed; provided that notices to Administrative Agent shall not
--------
be effective until received. For the purposes hereof, the address of each party
hereto shall be as set forth under such party's name on the signature pages
hereof or (i) as to Holdings, Company and Administrative Agent, such other
address as shall be designated by such Person in a written notice delivered to
the other parties hereto and (ii) as to each other party, such other address as
shall be designated by such party in a written notice delivered to
Administrative Agent.
11.9 Survival of Representations, Warranties and Agreements.
------------------------------------------------------
A. All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the Loans
and the issuance of the Letters of Credit hereunder. B.
B. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of Company set forth in subsections 2.6D, 2.7, 3.5A,
3.6, 11.2, 11.3 and
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11.4 and the agreements of Lenders set forth in subsections 11.2C, 11.4 and 11.5
shall survive the payment of the Loans, the cancellation or expiration of the
Letters of Credit and the reimbursement of any amounts drawn thereunder, and the
termination of this Agreement.
11.10 Failure or Indulgence Not Waiver; Remedies Cumulative.
-----------------------------------------------------
No failure or delay on the part of Administrative Agent or any Lender
in the exercise of any power, right or privilege hereunder or under any other
Loan Document shall impair such power, right or privilege or be construed to be
a waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
11.11 Marshalling; Payments Set Aside.
-------------------------------
Neither Administrative Agent nor any Lender shall be under any
obligation to marshal any assets in favor of Company or any other party or
against or in payment of any or all of the Obligations. To the extent that
Company makes a payment or payments to Administrative Agent or Lenders (or to
Administrative Agent for the benefit of Lenders), or Administrative Agent or
Lenders enforce any security interests or exercise their rights of setoff, and
such payment or payments or the proceeds of such enforcement or setoff or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, any other state or federal law, common
law or any equitable cause, then, to the extent of such recovery, the obligation
or part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefor or related thereto, shall be revived and continued in full
force and effect as if such payment or payments had not been made or such
enforcement or setoff had not occurred.
11.12 Severability.
------------
In case any provision in or obligation under this Agreement or the
Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
11.13 Obligations Several; Independent Nature of Lenders' Rights.
----------------------------------------------------------
The obligations of Lenders hereunder are several and no Lender shall
be responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in any other Loan Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a
142
separate and independent debt, and each Lender shall be entitled to protect and
enforce its rights arising out of this Agreement and it shall not be necessary
for any other Lender to be joined as an additional party in any proceeding for
such purpose.
11.14 Headings.
--------
Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
11.15 Applicable Law.
--------------
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES.
11.16 Successors and Assigns.
----------------------
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of Lenders (it being understood that
Lenders' rights of assignment are subject to subsection 11.1). Neither Holdings'
nor Company's rights or obligations hereunder nor any interest therein may be
assigned or delegated by Holdings or Company without the prior written consent
of all Lenders.
11.17 Consent to Jurisdiction and Service of Process.
----------------------------------------------
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST HOLDINGS OR COMPANY ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY
OBLIGATIONS THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇. BY EXECUTING
AND DELIVERING THIS AGREEMENT, EACH OF HOLDINGS AND COMPANY, FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
143
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN
ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO COMPANY AT ITS ADDRESS PROVIDED IN ACCORDANCE
WITH SUBSECTION 11.8;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER HOLDINGS OR COMPANY IN
ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST HOLDINGS
OR COMPANY IN THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 11.17 RELATING TO
JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST
EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-
1402 OR OTHERWISE.
11.18 Waiver of Jury Trial.
--------------------
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this waiver
is intended to be all-encompassing of any and all disputes that may be filed in
any court and that relate to the subject matter of this transaction, including
contract claims, tort claims, breach of duty claims and all other common law and
statutory claims. Each party hereto acknowledges that this waiver is a material
inducement to enter into a business relationship, that each has already relied
on this waiver in entering into this Agreement, and that each will continue to
rely on this waiver in their related future dealings. Each party hereto further
warrants and represents that it has reviewed this waiver with its legal counsel
and that it knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION 11.18 AND EXECUTED BY EACH OF
THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
144
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF
THE OTHER LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE
LOANS MADE HEREUNDER. In the event of litigation, this Agreement may be filed as
a written consent to a trial by the court.
11.19 Confidentiality.
---------------
Each Lender shall hold all non-public information obtained pursuant to
the requirements of this Agreement which has been identified as confidential by
Company in accordance with such Lender's customary procedures for handling
confidential information of this nature and in accordance with safe and sound
banking or investing practices, it being understood and agreed by Company that
in any event a Lender may make disclosures to Affiliates of such Lender or
disclosures reasonably required by any bona fide assignee, transferee or
participant in connection with the contemplated assignment or transfer by such
Lender of any Loans or any participations therein or disclosures required or
requested by any governmental agency or representative thereof or the National
Association of Insurance Commissioners (the "NAIC") or pursuant to legal
process; provided that, unless specifically prohibited by applicable law or
--------
court order, each Lender shall notify Company of any request by any governmental
agency or representative thereof or the NAIC (other than any such request in
connection with any examination of the financial condition of such Lender by
such governmental agency or the NAIC) for disclosure of any such non-public
information prior to disclosure of such information; and provided, further that
-------- -------
in no event shall any Lender be obligated or required to return any materials
furnished by Holdings or any of its Subsidiaries.
11.20 Counterparts; Effectiveness.
---------------------------
This Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Company and
Administrative Agent of written or telephonic notification of such execution and
authorization of delivery thereof.
[Remainder of page intentionally left blank]
145
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
COMPANY:
WEC COMPANY
By:_______________________________
Title:
Notice Address:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: D. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
HOLDINGS:
▇▇▇▇▇ EQUIPMENT COMPANY
By:_______________________________
Title:
Notice Address:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: D. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
S-1
LENDERS:
CREDIT SUISSE FIRST BOSTON,
individually and as Administrative Agent
By:______________________________________
Title:___________________________________
By:______________________________________
Title:___________________________________
Notice Address:
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
S-2
BANK ONE, ILLINOIS, NATIONAL ASSOCIATION
By:______________________________________
Title:___________________________________
Notice Address:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
S-3
FLEET BUSINESS CREDIT CORPORATION
By:________________________________
Title:_____________________________
Notice Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
S-4
▇▇▇▇▇▇ TRUST & SAVINGS BANK
By:____________________________
Title:_________________________
Notice Address:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
S-5
LASALLE BANK NATIONAL ASSOCIATION
By:__________________________________
Title:_______________________________
Notice Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
S-6
SCHEDULE 1.1(i)
CERTAIN ADJUSTMENTS TO EBITDA
Consolidated Adjusted EBITDA shall be adjusted by adding:
(i) all pro forma annualized cost savings, not in excess of
$1,5000,000, with respect to owner's compensation in connection
with the 1999Acquisitions;
(ii) all costs incurred, not in excess of $500,000 in connection
with the closing of the Seguin plant;
(iii) amounts expended, not in excess of $300,000, on a one time
basis only, in connection with layoffs related to the 1999
Acquisitions; and
(iv) pro forma cost savings, not in excess of $300,000, on a one
time basis only, in connection with layoffs related to the 1999
Acquisitions.
SCHEDULE-1.1(i)-1
SCHEDULE 2.1
EXISTING REVOLVING LOANS
LENDERS' COMMITMENTS AND PRO RATA SHARES
===================================================================================================
Existing Pro
Revolving Revolving Rata
Lender Loans Loan Commitments Share
==================================================================================================
Credit Suisse First Boston $0 $ 8,000,000 20%
-------------------------------------------------------------------------------------------------
Bank One, Illinois, National Association $0 $ 8,000,000 20%
-------------------------------------------------------------------------------------------------
Fleet Capital Corporation $0 $ 8,000,000 20%
-------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ Trust & Savings Bank $0 $ 8,000,000 20%
-------------------------------------------------------------------------------------------------
LaSalle Bank National Association $0 $ 8,000,000 20%
=================================================================================================
Total $0 $40,000,000 100%
=================================================================================================
SCHEDULE-2.1-1
SCHEDULE 3.1
EXISTING LETTER SOF CREDIT
=====================================================================================================
Face Standby/ Expiry
Issuer Amount Commercial Beneficiary Date
=====================================================================================================
Credit Suisse $400,000 Standby Liberty Mutual
First Boston Insurance Company 4/30/00
----------------------------------------------------------------------------------------------------
Gentex-Kirco 2/25/00
Credit Suisse Industrial (automatically
First Boston $634,506 Standby Summit I, L.L.C. renewable until
10/1/08)
===================================================================================================
SCHEDULE-3.1-1