Exhibit 10.10
$22,000,000
CREDIT AGREEMENT
Dated as of November 5, 1996
Among
DONNELLEY ENTERPRISE SOLUTIONS INCORPORATED
and
THE BORROWING SUBSIDIARIES
FROM TIME TO TIME PARTY HERETO
as Borrowers
-- ---------
THE FINANCIAL INSTITUTIONS
FROM TIME TO TIME PARTY HERETO
as Banks
-- -----
and
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
as Administrative Agent
-----------------------
TABLE OF CONTENTS
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Section Page
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS.......................................... -1-
1.01. Certain Defined Terms.............................................. -1-
1.02. Computation of Time Periods........................................-15-
1.03. Accounting Terms...................................................-15-
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES.........................................-15-
2.01. The Advances.......................................................-15-
2.02. Making the Advances................................................-16-
2.03. Letters of Credit..................................................-19-
2.04. Fees...............................................................-23-
2.05. Reduction and Termination of the Commitments; Right to
Replace Banks......................................................-24-
2.06. Payment; Conversion and Continuation...............................-24-
2.07. Interest on Advances...............................................-25-
2.08. Additional Interest on Eurocurrency Rate Advances..................-26-
2.09. Interest Rate Determination........................................-26-
2.10. Prepayments........................................................-26-
2.11. Funding Indemnification............................................-27-
2.12. Increased Costs and Reduced Return.................................-28-
2.13. Illegality.........................................................-28-
2.14. Payments and Computations..........................................-29-
2.15. Sharing of Payments, Etc...........................................-30-
2.16. Currency Equivalents...............................................-30-
2.17. Borrowing Subsidiaries.............................................-31-
2.18. Taxes..............................................................-32-
2.19. Mitigation.........................................................-34-
2.20. Extension of Termination Date......................................-34-
ARTICLE III
CONDITIONS PRECEDENT........................................................-34-
3.01. Conditions Precedent to the Effectiveness of this Agreement........-34-
3.02. Conditions Precedent to all Advances and Letters of Credit.........-36-
3.03. Conditions Precedent to Initial Advance to Each Borrowing
Subsidiary.........................................................-37-
ARTICLE IV
REPRESENTATIONS AND WARRANTIES............................................-37-
4.01. Representations and Warranties of the Company......................-37-
ARTICLE V
COVENANTS OF THE COMPANY..................................................-40-
5.01. Compliance with Laws, Etc..........................................-40-
5.02. Reporting Requirements.............................................-41-
5.03. Use of Proceeds....................................................-42-
5.04. Limitation on Liens, Etc...........................................-42-
5.05. Mergers, Consolidations, Sales of Assets...........................-44-
5.06. Books and Records; Inspection......................................-45-
5.07. Corporate Existence; Maintenance of Rights and Permits.............-45-
5.08. Conduct of Business................................................-45-
5.09. Payment of Taxes...................................................-45-
5.10. Funded Debt to Cash Flow Ratio.....................................-46-
5.11. Net Worth..........................................................-46-
5.12. Fixed Charge Coverage..............................................-46-
5.13. Indebtedness of Subsidiaries.......................................-46-
5.14. Maintenance of Properties..........................................-46-
5.15. Insurance..........................................................-47-
5.16. Transactions with Affiliates.......................................-47-
5.17. Investments........................................................-47-
5.18. Environmental Liabilities..........................................-47-
5.19. Dividends..........................................................-48-
5.20. Certain Agreements.................................................-48-
5.21. Non-Material Subsidiaries..........................................-48-
ARTICLE VI
EVENTS OF DEFAULT.........................................................-48-
6.01. Events of Default..................................................-48-
6.02. Collateral for Undrawn Letters of Credit...........................-50-
ARTICLE VII
GUARANTEE.................................................................-51-
7.01. Unconditional Guarantee............................................-51-
7.02. Validity...........................................................-52-
7.03. Waivers............................................................-52-
7.04. Subrogation........................................................-52-
7.05. Acceleration.......................................................-52-
7.06. Reinstatement......................................................-52-
7.07. Continuing Guaranty; Assignments...................................-52-
ARTICLE VIII
THE ADMINISTRATIVE AGENT..................................................-53-
8.01. Appointment; Nature of Relationship................................-53-
8.02. Actions by the Administrative Agent................................-53-
8.03. Administrative Agent's Reliance, Etc...............................-54-
8.04. The Administrative Agent and Affiliates............................-55-
8.05. Bank Credit Decision...............................................-55-
8.06. Indemnification....................................................-55-
8.07. Successor Administrative Agent.....................................-55-
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ARTICLE IX
MISCELLANEOUS.............................................................-56-
9.01. Amendments, Etc....................................................-56-
9.02. Notices, Etc.......................................................-57-
9.03. No Waiver; Remedies................................................-58-
9.04. Costs and Expenses.................................................-58-
9.05. Right of Set-off...................................................-58-
9.06. Binding Effect.....................................................-59-
9.07. Assignments and Participations.....................................-59-
9.08. Governing Law......................................................-62-
9.09. Execution in Counterparts..........................................-62-
9.10. Confidentiality....................................................-62-
9.11. Non-Reliance by the Banks..........................................-63-
9.12. Indemnification....................................................-63-
9.13. Partial Invalidity.................................................-63-
9.14. WAIVER OF JURY TRIAL...............................................-64-
9.15. Jurisdiction, Etc..................................................-64-
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EXHIBITS
EXHIBIT A -- Form of Assignment and Acceptance
EXHIBIT B -- Form of Assumption Letter
EXHIBIT C -- Form of Note
EXHIBIT D -- Form of Notice of Borrowing
EXHIBIT E -- Form of Notice of Continuation/Conversion
EXHIBIT F -- Form of Sidley & Austin Opinion
EXHIBIT G -- Form of Opinion of Counsel to Borrowing Subsidiary
SCHEDULES
SCHEDULE 2.01 -- Banks; Commitments; Lending Offices
SCHEDULE 4.01(m) -- ERISA
SCHEDULE 5.13 -- Capitalized Leases
SCHEDULE 5.17 -- Investments
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CREDIT AGREEMENT
Dated as of November 5, 1996
DONNELLEY ENTERPRISE SOLUTIONS INCORPORATED, a Delaware corporation
(the "Company"), each Borrowing Subsidiary (as defined below), the FINANCIAL
INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF and each other financial
institution which from time to time becomes a party hereto (individually a
"Bank" and collectively, the "Banks") , and ▇▇▇▇▇▇ TRUST AND SAVINGS BANK, in
its separate capacity as Administrative Agent (as defined below) for the Banks
hereunder, agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
--------------------------------
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Acquisition" has the meaning specified in Section 5.05(c).
"Administrative Agent" means ▇▇▇▇▇▇ Trust and Savings Bank, in its
capacity as the contractual representative for all of the Banks for
purposes of this Agreement, as designated and appointed in accordance with
Article VIII, and any successor thereto as provided herein.
"Advance" means an advance by a Bank to a Borrower as part of a
Borrowing and refers to a Base Rate Advance or a Eurocurrency Rate Advance,
each of which shall be a "Type" of Advance.
"Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by or under common control with such
Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct
or cause the direction of the management or policies of the controlled
Person, whether through ownership of stock, by contract or otherwise.
"Agreement" means this Credit Agreement, as the same may be amended,
modified, supplemented or restated from time to time.
"Alternative Currency" means Pounds Sterling, Hong Kong Dollars,
Singapore Dollars, Japanese Yen and any other currency (other than U.S.
Dollars) which is generally available to the Banks and which is freely
transferable and convertible into U.S. Dollars in the London interbank
market as agreed to from time to time by the Banks.
"Applicable Lending Office" means, with respect to each Bank, such
Bank's Domestic Lending Office in the case of a Base Rate Advance, and such
Bank's Eurocurrency Lending Office in the case of a Eurocurrency Rate
Advance.
"Applicable Margin" means on any day:
(a) 0.75% if Level I Status exists on such day,
(b) 1.00% if Level II Status exists on such day, and
(c) 1.25% if Level III Status exists on such day.
Level I Status shall apply to the period from the date hereof until the
first date on which financial statements are due pursuant to Section 5.02.
For any date thereafter, Level Status shall be adjusted after each delivery
of the Company's quarterly or annual financial statements pursuant to
Section 5.02, effective on the date such financial statements are due
pursuant to Section 5.02; provided, that if timely delivery of such
financial statements is not made, Level III Status shall be deemed to exist
from the day on which such financial statements were required to be
delivered until such delivery is made, after which time the Level Status
shall be determined from the delivered financial statements.
"Application" has the meaning specified in Section 2.03(b).
"Assignment and Acceptance" means an Assignment and Acceptance
executed by a Bank and an Eligible Assignee and accepted by the
Administrative Agent and the Company, substantially in the form of Exhibit
A hereto.
"Assumption Letter" means a letter of a Subsidiary of the Company
addressed to the Banks in substantially the form of Exhibit B hereto
pursuant to which such Subsidiary agrees to become a "Borrowing Subsidiary"
and agrees to be bound by the terms and conditions hereof.
"Available Commitment" has the meaning specified in Section 2.01.
"Banks" has the meaning specified in the opening paragraph hereof.
"Base Rate" means, for any day, a rate of interest per annum equal to
the higher of (a) the Prime Commercial Rate for such day and (b) the sum of
Federal Funds Effective Rate for such day plus 1/2% per annum.
"Base Rate Advance" means an Advance which bears interest at a rate
based upon the Base Rate, as provided in Section 2.07(a).
"Benefit Administration Services Agreement" means that certain Benefit
Administration Services Agreement between Donnelley and the Company, as in
effect on the date hereof or as amended or modified with the consent of the
Majority Banks.
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"Borrower" means the Company or any Borrowing Subsidiary.
"Borrowing" means a borrowing consisting of simultaneous Advances of
the same Type made by each of the Banks to a Borrower pursuant to Section
2.01.
"Borrowing Subsidiary" means any Subsidiary of the Company duly
designated by the Company pursuant to Section 2.17 hereof to make
Borrowings hereunder, which Subsidiary shall have delivered to the
Administrative Agent an Assumption Letter in accordance with Section 2.17.
"Business Day" means a day of the year on which banks are not required
or authorized by law to close in Chicago, Illinois and New York, New York
and, if the applicable Business Day relates to any Eurocurrency Rate
Advances, on which dealings in the applicable currency are carried on in
the relevant international interbank market.
"Capitalized Lease" of a Person means any lease of property by such
Person as lessee which would be capitalized on a balance sheet of such
Person prepared in accordance with GAAP.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as
a liability on a balance sheet of such Person prepared in accordance with
GAAP.
"Commission" means the Securities and Exchange Commission or any
federal body succeeding to its functions.
"Commitment" has the meaning specified in Section 2.01.
"Commitment Fee" has the meaning specified in Section 2.04.
"Company" has the meaning specified in the opening paragraph hereof.
"Consolidated Debt" means as of any date the consolidated long-term
Debt, plus short-term Debt for borrowed money, of the Company and its
Consolidated Subsidiaries as of such date.
"Consolidated EBITA" means, for any period, on a consolidated basis
for the Company and its Consolidated Subsidiaries, the sum of the amounts
for such period of (a) Consolidated Net Income (before non-recurring or
extraordinary gains, losses, expenses and charges, provided, that they are
identified as such on the Company's financial statements), plus (b) charges
against income for foreign, federal, state and local taxes, plus (c)
Consolidated Interest Expense, plus (d) amortization of intangible assets.
"Consolidated EBITDA" means, for any period, Consolidated EBITA for
such period plus depreciation expense of the Company and its Consolidated
Subsidiaries for such period.
-3-
"Consolidated Interest Expense" means, for any period, the sum for
such period of total interest expense of the Company and its Consolidated
Subsidiaries, whether paid or accrued (including, but not limited to, the
interest component of Capitalized Leases), as determined in accordance with
GAAP.
"Consolidated Net Income" means, for any period, the consolidated net
earnings (or loss) after taxes of the Company and its Consolidated
Subsidiaries for such period, determined in accordance with GAAP.
"Consolidated Net Worth" means, as of any date, an amount equal to the
sum of (a) the par or stated value of the outstanding shares of all classes
of capital stock of the Company, (b) paid-in capital and capital surplus of
the Company and (c) retained earnings of the Company, as each of which
would appear on a consolidated balance sheet of the Company and its
Consolidated Subsidiaries.
"Consolidated Subsidiary" means at any date any Subsidiary the
accounts of which would be consolidated with those of the Company in its
consolidated financial statements at such date in accordance with GAAP.
"Contaminant" means any pollutant, hazardous substance, hazardous
chemical, toxic substance, hazardous waste or special waste, as those terms
are defined in federal, state or local laws and regulations, radioactive
material, petroleum, including crude oil or any petroleum-derived
substance, or breakdown or decomposition product thereof, or any
constituent of any such substance or waste, including but not limited to
polychlorinated biphenyls and asbestos.
"Debt" means (without duplication of any item), with respect to any
Person, (a) indebtedness for borrowed money, (b) obligations evidenced by
bonds, debentures, notes or other similar instruments, (c) obligations as
lessee under Capitalized Leases, (d) obligations representing the deferred
purchase price of property or services (other than accounts payable and
accrued expenses arising in the ordinary course of such person's business
payable on customary business terms), (e) obligations, whether or not
assumed, secured by Liens or payable out of the proceeds or production from
property now or hereafter owned or acquired by such Person, (f) obligations
which are evidenced by notes, acceptances or other instruments, (g)
obligations in respect of letters of credit, (h) net ▇▇▇▇-to-market
exposure of rate hedging agreements and (i) obligations under direct or
indirect guaranties in respect of, and obligations (contingent or
otherwise) to purchase or otherwise acquire, or otherwise assure a creditor
against loss in respect of, indebtedness or obligations of other Persons
(other than, in the case of the Company or a Subsidiary, indebtedness or
obligations of the Company or any Subsidiary) of the types listed in the
foregoing clause (a) through (h).
"Domestic Lending Office" means, with respect to any Bank, the office
of such Bank specified as its "Domestic Lending Office" opposite its name
on Schedule 2.01 hereto or in the Assignment and Acceptance pursuant to
which it became a Bank, as the case may be, or such other office of such
Bank as such Bank may from time to time specify to the Company and the
Administrative Agent.
-4-
"Donnelley" means ▇.▇. ▇▇▇▇▇▇▇▇▇ & Sons Company, a Delaware
corporation.
"Donnelley Agreements" has the meaning specified in Section 5.16.
"Effective Date" means November 5, 1996.
"Eligible Assignee" means (a) a Bank; (b) an Affiliate of a Bank; (c)
a commercial bank organized under the laws of the United States or any
State thereof, and having a combined capital and surplus of at least
$500,000,000; (d) a commercial bank organized under the laws of any other
country that is a member of the Organization for Economic Cooperation and
Development, has a combined capital and surplus of at least $500,000,000
and is acting through a branch or agency located in the United States, and
(e) any other Person approved by the Company and the Administrative Agent
in their sole discretion.
"Environmental Action" means any administrative, regulatory or
judicial action, suit, demand, demand letter, claim, notice of
noncompliance or violation, notice of liability or potential liability,
investigation, proceeding, consent order or consent agreement relating in
any way to any Environmental Law, Environmental Permit or Hazardous
Materials or arising from alleged injury or threat of injury to health,
safety or the environment, including, without limitation, (a) by any
governmental or regulatory authority for enforcement, cleanup, removal,
response, remedial or other actions or damages and (b) by any governmental
or regulatory authority or any third party for damages, contribution,
indemnification, cost recovery, compensation or injunctive relief.
"Environmental Law" means any federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, judgment, decree or
judicial interpretation relating to the environment, health, safety or
Hazardous Materials.
"Environmental Lien" means a lien in favor of any governmental entity
for (a) any liability under federal or state environmental laws or
regulations, or (b) damages arising from, or costs incurred by such
governmental entity in response to, a release or threatened release of a
hazardous or toxic waste, substance or constituent or other substance into
the environment.
"Environmental Permit" means any permit, approval, indemnification
number, license or other authorization required under any Environmental
Law.
"ERISA" means the Employee Retirement Income Security Act of 1974 as
amended from time to time, and the regulations promulgated and the rulings
issued thereunder.
"ERISA Affiliate" means any Person that for purposes of Title IV or
Section 302 of ERISA is a member of the Company's controlled group, or
under
-5-
common control with the Company, as determined under Section 414 of
the Internal Revenue Code.
"ERISA Event" means (a) the occurrence of a reportable event, within
the meaning of Section 4043 of ERISA, with respect to any Plan; (b) the
application for a minimum funding waiver with respect to a Plan; (c) the
provision by the administrator of any Plan of a notice of intent to
terminate such Plan pursuant to Section 4041(a)(2) of ERISA (including any
such notice with respect to a plan amendment referred to in Section 4041(e)
of ERISA); (d) the cessation of operations at a facility of the Company or
any of its ERISA Affiliates in the circumstances described in Section
4062(e) of ERISA; (e) the withdrawal by the Company or any of its ERISA
Affiliates from a Multiple Employer Plan during a plan year for which it
was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (f)
the failure by the Company or any of its ERISA Affiliates to make a payment
to a Plan if the conditions for the imposition of a lien under Section
302(f)(1) of ERISA are satisfied; (g) the adoption of an amendment to a
Plan requiring the provision of security to such Plan, pursuant to Section
307 of ERISA; or (h) the institution by the PBGC of proceedings to
terminate a Plan, pursuant to Section 4042 of ERISA, or the occurrence of
any event or condition described in Section 4042 of ERISA that could
constitute grounds for the termination of, or the appointment of a trustee
to administer, a Plan.
"Eurocurrency Lending Office" means, with respect to any Bank, the
office of such Bank specified as its "Eurocurrency Lending Office" opposite
its name on Schedule 2.01 hereto or in the Assignment and Acceptance
pursuant to which it became a Bank (or, if no such office is specified, its
Domestic Lending Office), or such other office of such Bank or its
Affiliates which may from time to time be funding or maintaining any
Advance hereunder.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Eurocurrency Rate" means, for any Interest Period for all
Eurocurrency Rate Advances comprising part of the same Borrowing, (a) the
per annum rate for deposits in U.S. Dollars or the relevant Alternative
Currency, as applicable, for a period corresponding to the duration of such
Interest Period, which appears on Telerate Page 3750 at approximately 11:00
a.m. (London time) two Business Days before the first day of such Interest
Period and (b) if such rate does not appear on Telerate Page 3750 on such
day, the per annum rate at which deposits in U.S. Dollars or the relevant
Alternative Currency, as applicable, are offered by ▇▇▇▇▇▇ Bank to first-
class banks in the London interbank market at approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest
Period, in the approximate amount of ▇▇▇▇▇▇ Bank's relevant Eurocurrency
Rate Advance and having a maturity approximately equal to such Interest
Period. The references to Telerate Page 3750 in this definition shall be
construed to be a reference to the relevant page or any other page that may
replace such page on the Telerate service or any other service that may be
designated by the British Bankers'
-6-
Association as the information vendor for the purpose of displaying British
Bankers' Association Interest Settlement Rates for the relevant currency.
"Eurocurrency Rate Advance" means an Advance which bears interest at a
rate based upon the Eurocurrency Rate, as provided in Section 2.07(b).
"Eurocurrency Rate Reserve Percentage" of any Bank for any Interest
Period for a Eurocurrency Rate Advance means the reserve percentage
applicable two Business Days before the first day of 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 actual
reserve requirement (including, without limitation, any emergency,
supplemental or other marginal reserve requirement) for such Bank with
respect to liabilities or assets consisting of or including Eurocurrency
Liabilities (or with respect to any other category of liabilities that
includes deposits by reference to which the interest rate on Eurocurrency
Rate Advances of such currency is determined) having a term equal to such
Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Exchange Rates" has the meaning specified in Section 2.16(b).
"Federal Funds Effective Rate" means, for any period, a fluctuating
interest rate per annum 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
immediately preceding Business Day) by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day that is a Business
Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) for such day for such transactions received by the Administrative
Agent from three federal funds brokers of recognized standing selected by
it.
"Fixed Charge Coverage Ratio" means the ratio, determined on a
consolidated basis for the Company and its Consolidated Subsidiaries in
accordance with GAAP as of the end of any fiscal quarter, of (i)
Consolidated EBITA plus Minimum Operating Lease Payments to (ii)
Consolidated Interest Expense plus Minimum Operating Lease Payments, in
each case determined as of the last day of such fiscal quarter for the
four-quarter period then ended, except that the Fixed Charge Coverage Ratio
for each fiscal quarter ending before the first anniversary of the
Effective Date shall be determined for the period from the Effective Date
to the end of such fiscal quarter.
"Funded Debt to Cash Flow Ratio" means the ratio, determined on a
consolidated basis for the Company and its Consolidated Subsidiaries in
accordance with GAAP as of the end of any fiscal quarter, of (i)
Consolidated Debt to (ii) Consolidated EBITDA for the four-quarter period
then ended, except that, for each fiscal quarter ending before the first
anniversary of the Effective
-7-
Date, Consolidated EBITDA shall be determined for the period from the
Effective Date to the end of such fiscal quarter and shall be annualized by
dividing Consolidated EBITDA by the number of days since the Effective Date
and multiplying such amount by 365. For the first four fiscal quarters
following an Acquisition, Consolidated EBITDA shall include, for any period
of calculation prior to the date of such Acquisition, the Consolidated
EBITDA (determined on a pro forma basis if no actual financial information
is available) of the company or business that was the subject of such
Acquisition for such prior period.
"Funding Date" means the date on which a Borrowing occurs or a Letter
of Credit is issued.
"GAAP" has the meaning specified in Section 1.03.
"Governmental Authority" means any nation, state sovereign, or
government, any federal, regional, state, local or political subdivision
and any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"▇▇▇▇▇▇ Bank" means ▇▇▇▇▇▇ Trust and Savings Bank, an Illinois banking
corporation.
"Hazardous Materials" means petroleum and petroleum products,
byproducts or breakdown products, radioactive materials, asbestos-
containing materials, radon gas and any other chemicals, materials or
substances designated, classified or regulated as being "hazardous" or
"toxic", or words of similar import, under any federal, state, local or
foreign statute, law, ordinance, rule, regulation, code, order, judgment,
decree or judicial interpretation.
"Hong Kong Dollars" means the lawful currency of Hong Kong.
"Indemnified Parties" has the meaning specified in Section 9.12.
"Initial Borrowing Date" means the initial Funding Date.
"Interest Period" means, for each Eurocurrency Rate Advance comprising
part of the same Borrowing, the period commencing on the date of such
Eurocurrency Rate Advance or the date of any conversion or continuation
thereof, and ending on the last day of the period selected by a Borrower
pursuant to the provisions below. The duration of each such Interest
Period shall be one, two, three or six months, as a Borrower may select,
upon notice received by the Administrative Agent pursuant to Section 2.02
or 2.06; provided, however, that
(a) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such
Interest Period shall be extended to occur on the next succeeding
Business Day; provided, that if such extension would cause the last
day of such Interest Period to occur in the next
-8-
following calendar month, the last day of such Interest Period shall
occur on the next preceding Business Day;
(b) whenever the first day of any Interest Period occurs on a day
in an initial calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such initial
calendar month by the number of months equal to the number of months
in such Interest Period, such Interest Period shall end on the last
Business Day of such succeeding calendar month; and
(c) no Interest Period may terminate later than the Termination
Date.
"Initial Public Offering" means the initial public offering of the
Company's stock pursuant to the Registration Statement.
"Investment" of a Person means any loan, advance (other than
commission, travel and similar advances to officers and employees made in
the ordinary course of business), extension of credit (other than accounts
receivable arising in the ordinary course of business on terms customary in
the trade) or contribution of capital by such Person; stocks, bonds, mutual
funds, partnership interests, notes, debentures or other securities owned
by such Person; any deposit accounts and certificate of deposit owned by
such Person; and structured notes, derivative financial instruments and
other similar instruments or contracts owned by such Person.
"Japanese Yen" means the lawful currency of Japan.
"L/C Commitment" means the lesser of the aggregate amount of the
Commitments and $2,000,000.
"L/C Documents" means the Letters of Credit, any draft or other
document presented in connection with a drawing thereunder, the
Applications and this Agreement.
"L/C Obligations" means the sum of the aggregate undrawn face amount
of all outstanding Letters of Credit and all unpaid Reimbursement
Obligations.
"Letter of Credit" has the meaning specified in Section 2.03(a).
"Level Status" means Level I Status, Level II Status or Level III
Status, as appropriate.
"Level I Status" exists at any date if at such date the Fixed Charge
Coverage Ratio is greater than or equal to 3 to 1.
-9-
"Level II Status" exists at any date if at such date Level I Status
does not exist AND the Fixed Charge Coverage Ratio is greater than or equal
to 2 to 1.
"Level III Status" exists at any date if at such date neither Level I
Status nor Level II Status exists.
"Liabilities and Costs" means all liabilities, claims, obligations,
responsibilities, losses, damages, punitive damages, consequential damages,
treble damages, charges, costs and expenses (including, without limitation,
attorneys', experts' and consulting fees and costs of investigation and
feasibility studies), fines, penalties and monetary sanctions, interest,
direct or indirect, known or unknown, absolute or contingent, past, present
or future.
"Lien" means, with respect to any asset, any security interest,
mortgage, pledge, lien, claim, charge or encumbrance of any kind in respect
of such asset.
"Majority Banks" means at any time Banks holding more than 50% of the
Commitments or, if the Commitments have been terminated, Banks holding more
than 50% of the then aggregate unpaid principal amount of the Advances held
by the Banks.
"Margin Stock" has the meaning specified in Regulation U issued by the
Board of Governors of the Federal Reserve System.
"Material Adverse Effect" means a material adverse effect on (a) the
business, financial condition, operations, properties or performance of the
Company and its Subsidiaries, taken as a whole, (b) the legality, validity
or enforceability of this Agreement or any Note or (c) the ability of any
Borrower to perform its obligations under this Agreement and its Notes.
"Material Subsidiary" means a Subsidiary of the Company which, at the
time of determination, (a) shall own assets comprising in excess of 10% of
all of the assets of the Company and its Consolidated Subsidiaries on a
consolidated basis, or (b) has revenues for the four fiscal quarters most
recently ended in excess of 10% of the revenues of the Company and its
Consolidated Subsidiaries on a consolidated basis.
"Minimum Operating Lease Payments" means, for any period, the minimum
fixed rental payments under operating lease agreements, determined for the
Company and its Consolidated Subsidiaries in accordance with GAAP;
provided, that "Minimum Operating Lease Payments" shall not include
executory costs or payments based upon usage under operating lease
agreements.
"Moody's" means ▇▇▇▇▇'▇ Investors Services Inc.
"Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which the Company or any of its ERISA Affiliates is
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making or accruing an obligation to make contributions, or has within any
of the preceding five plan years made or accrued an obligation to make
contributions.
"Note" means a promissory note, in substantially the form of Exhibit C
hereto, duly executed by a Borrower and payable to the order of a Bank in
the amount of its Commitment, including any amendment, modification,
renewal or replacement of such promissory note.
"Notice of Borrowing" has the meaning specified in Section 2.02(a).
"Notice of Conversion or Continuation" has the meaning specified in
Section 2.06(b).
"Original Dollar Amount" means the amount of any obligation hereunder
denominated in U.S. Dollars and, in relation to any Advance or Letter of
Credit denominated in an Alternative Currency, the U.S. Dollar Equivalent
of such Advance or Letter of Credit. The Original Dollar Amount of an
Advance denominated in an Alternative Currency shall be calculated on the
day it is advanced and shall be recalculated on each day it is continued
and on the last Business Day of each fiscal quarter thereafter. The
Original Dollar Amount of a Letter of Credit denominated in an Alternative
Currency shall be calculated on the day such Letter of Credit is issued and
shall be recalculated on the last Business Day of each fiscal quarter
thereafter.
"Other Taxes" has the meaning specified in Section 2.18(b).
"Participating Bank" has the meaning specified in Section 2.03(e).
"Participating Interest" has the meaning specified in Section 2.03(e).
"PBGC" means the Pension Benefit Guaranty Corporation and its
successors and assigns.
"Permit" means any permit, approval, consent, authorization, license,
variance, or permission required from a Governmental Authority under an
applicable Requirement of Law.
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government
or any political subdivision or agency thereof.
"Plan" means a single employer plan, as defined in Section 4001(a)(15)
of ERISA, with respect to which the Company may have any liability.
"Pounds Sterling" means the lawful currency of the United Kingdom.
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"Prime Commercial Rate" means a rate per annum equal to the prime
commercial rate of interest announced by ▇▇▇▇▇▇ Bank from time to time,
changing when and as said prime commercial rate changes.
"Pro Rata Share" means, for each Bank, the percentage of the aggregate
Commitments represented by such Bank's Commitment or, if the Commitments
have been terminated, the percentage held by such Bank (including through
participation interests in L/C Obligations) of the aggregate principal
amount of all outstanding obligations hereunder.
"Property" means with respect to any Person, any real or personal
property, plant, building, facility, structure, equipment or unit, or other
asset (tangible or intangible) owned, leased or operated by such Person.
"Receivables" means all rights to receive payment for goods sold or
leased or for services rendered in the ordinary course of business, to the
extent not evidenced by an instrument or chattel paper, together with all
interest, finance charges or other amounts payable by an Obligor in respect
thereof, whether billed or unbilled.
"Register" has the meaning specified in Section 9.07(d).
"Registration Statement" means the Registration Statement of the
Company on Form S-1 originally filed with the Securities and Exchange
Commission (the "SEC") on August 14, 1996, as amended by Amendment No. 1
thereto filed with the SEC on September 30, 1996, and Amendment No. 2
thereto filed with the SEC on October 11, 1996.
"Regulation G," "Regulation T," "Regulation U" and "Regulation X"
means Regulation G, Regulation T, Regulation U and Regulation X,
respectively, of the Federal Reserve Board as in effect from time to time.
"Reimbursement Obligation" has the meaning specified in Section
2.03(d).
"Release" means any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration
from any Property into the indoor or outdoor environment, including the
movement of Contaminants through or in the air, soil, surface water,
groundwater or Property.
"Remedial Action" means any action required to (i) clean up, remove,
treat or in any other way address Contaminants in the indoor or outdoor
environment; (ii) prevent a Release or threat of Release or minimize the
further Release of Contaminants so they do not migrate or endanger or
threaten to endanger public health or welfare or the indoor or outdoor
environment; or (iii) perform pre-remedial studies and investigations or
post-remedial monitoring and care.
"Requirements of Law" means, as to any Person, the charter and by-laws
or other organizational or governing documents of such Person, and any law,
rule
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or regulation, Permit, or determination of any arbitrator or a court
or other Governmental Authority, in each case applicable to or binding upon
such Person or any of its Property or to which such Person or any of its
Property is subject, including, without limitation, the Securities Act, the
Securities Exchange Act, Regulation G, Regulation T, Regulation U and
Regulation X, and any certificate of occupancy, zoning ordinance, building,
environmental or land use, law, rule, regulation, ordinance or Permit or
occupational safety or health law, rule or regulation.
"Responsible Officer" means the chief financial officer or any other
officer of the Company or any other Borrower responsible for overseeing or
reviewing compliance with this Agreement or any Note.
"Required Financials" has the meaning specified in Section 1.03.
"Securities Act" means the Securities Act of 1933, as amended to the
date hereof and from time to time hereafter, and any successor statute.
"Securities Exchange Act" means the Securities Exchange Act of 1934,
as amended to the date hereof and from time to time hereafter, and any
successor statute.
"Singapore Dollars" means the lawful currency of Singapore.
"Standard & Poor's" means Standard & Poor's Rating Group.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, limited liability company, association or other business
entity of which securities or other ownership interests having (a) ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions or (b) the ability to direct the management of
such corporation, partnership, limited liability company, association or
other business entity, are at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more of its other
Subsidiaries or by one or more of such Person's other Subsidiaries.
"Tax Allocation and Indemnification Agreement" means that certain Tax
Allocation and Indemnification Agreement between Donnelley and the Company,
as in effect on the date hereof or as amended or modified with the consent
of the Majority Banks.
"Taxes" has the meaning specified in Section 2.18.
"Termination Date" means the earlier of (a) November 5, 1999, subject
to any extension of such date pursuant to Section 2.20 or (b) the date the
Commitments are terminated in whole pursuant to Section 2.05 or 6.01.
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"Transition Services Agreement" means that certain Transition Services
Agreement between Donnelley and the Company, as in effect on the date
hereof or as amended or modified with the consent of the Majority Banks.
"Type" has the meaning specified in the definition of Advance.
"Unmatured Event of Default" means any event or condition which would
constitute an Event of Default but for the requirement that notice be given
or time elapse or both.
"U.S. Dollar Equivalent" has the meaning specified in Section 2.16.
"U.S. Dollars" and the sign "$" each means the lawful currency of the
United States.
"Wholly-Owned Subsidiary" means, with respect to any Person, any
Subsidiary all or substantially all of the outstanding voting securities of
which shall at the time be owned or controlled, directly or indirectly, by
such Person or one or more Wholly-Owned Subsidiaries of such Person, or by
such Person and one or more Wholly-Owned Subsidiaries of such Person.
"Withdrawal Liability" has the meaning specified in Part 1 of Subtitle
E of Title IV of ERISA.
SECTION 1.02. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding."
SECTION 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistent with those applied in the preparation
of the financial statements then most recently delivered by the Company to the
Banks in accordance with Section 5.02 ("GAAP"); provided, however, that if any
change in GAAP would affect (or would result in a material change in the method
of calculating) any of the covenants set forth in Sections 5.10, 5.11 or 5.12
hereof, then (i) together with any financial statements required to be delivered
hereunder (the "Required Financials"), the Company will deliver additional
financial statements, as of the same date or for the same period covered by the
Required Financials, prepared on a pro forma basis as if such change in GAAP had
not occurred, and (ii) any determination of compliance with any covenant set
forth in Section 5.10, 5.11 or 5.12 shall be made in accordance with GAAP
without giving effect to such change and consistently applied.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
---------------------------------
SECTION 2.01. The Advances. Each Bank severally agrees, on the
terms and conditions hereinafter set forth, to make Advances to the Borrowers
from time to time on any
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Business Day during the period from the Effective Date until the Termination
Date in an aggregate Original Dollar Amount with respect to all Borrowers not to
exceed at any time outstanding an amount (such Bank's "Available Commitment")
equal to:
(a) the lesser of:
(i) such Bank's Pro Rata Share of an amount equal to 85% of the
aggregate Receivables of the Borrowers, and
(ii) the amount set forth opposite such Bank's name on Schedule
2.01 hereto or, if such Bank has entered into any Assignment and
Acceptance, set forth for such Bank in the Register, as such amount
may be reduced pursuant to Section 2.05 (such Bank's "Commitment")
minus
(b) such Bank's Pro Rata Share of the aggregate outstanding L/C
Obligations.
Each Borrowing shall be in an aggregate amount of not less than (x) in the case
of Base Rate Advances, $100,000 or an integral multiple thereof or (y) in the
case of Eurocurrency Rate Advances, $1,000,000 or in an integral multiple of
$100,000 in excess thereof or, if the requested currency for such Advance is not
U.S. Dollars, an approximately equivalent amount and multiple thereof determined
by the Administrative Agent in accordance with Section 2.16 and rounded to the
nearest 10,000 units of the requested Alternative Currency. Each Borrowing
shall consist of Advances of the same Type made on the same day to the same
Borrower by the Banks ratably according to their respective Commitments in the
currency so requested. Within the limits of each Bank's Available Commitment, a
Borrower may borrow under this Section 2.01, prepay pursuant to Section 2.10,
and reborrow under this Section 2.01.
SECTION 2.02. Making the Advances. (a) Each Borrowing shall be
made on notice by the Company (or, if such Borrower is a Borrowing Subsidiary,
by the Company on behalf of such Borrowing Subsidiary) to the Administrative
Agent (which shall give each Bank prompt notice thereof by telecopy), given not
later than 10:00 a.m. (Chicago time) on (i) the date of a proposed Borrowing
comprised of Base Rate Advances, (ii) the third Business Day prior to the date
of a proposed Borrowing comprised of Eurocurrency Rate Advances to be
denominated in U.S. Dollars, and (iii) the fourth Business Day prior to the date
of a proposed Borrowing comprised of Eurocurrency Rate Advances to be
denominated in an Alternative Currency. Each such notice of a Borrowing (a
"Notice of Borrowing") shall be by telecopy, confirmed immediately in writing,
in substantially the form of Exhibit D hereto, specifying therein (A) the date
of such Borrowing, (B) the Type of Advances comprising such Borrowing, which, in
the case of a Borrowing denominated in an Alternative Currency, shall be
Eurocurrency Rate Advances, (C) the currency for such Borrowing, which shall be
in U.S. Dollars or an Alternative Currency, (D) the aggregate amount of such
Borrowing (expressed in the requested currency), (E) in the case of a Borrowing
consisting of Eurocurrency Rate Advances, the initial Interest Period for the
Advances comprising such Borrowing, and (F) whether such Borrowing is to be made
by the Company or by a specified Borrowing Subsidiary. The Administrative Agent
shall, promptly after such time as the Company or such Borrower may no longer
revoke the Notice of
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Borrowing without any liability to the Banks, notify each Bank and the Company
of the applicable interest rate under Section 2.07(a) or (b). Each Bank shall,
before 12:00 p.m. (Chicago time) on the date of such Borrowing, make available
to the Administrative Agent at the Administrative Agent's Domestic Lending
Office, in federal or otherwise immediately available funds, such Bank's Pro
Rata Share of such Borrowing. After the Administrative Agent receives such funds
and upon fulfillment of the applicable conditions set forth in Article III, the
Administrative Agent will make such funds available to the applicable Borrower
at the Administrative Agent's aforesaid address.
(b) Anything in subsection (a) above to the contrary notwithstanding:
(i) If with respect to a request for a Borrowing of an Alternative
Currency other than Pounds Sterling, Hong Kong Dollars, Singapore Dollars,
or Japanese Yen any Bank shall, prior to 10:00 a.m. (Chicago time) on the
third Business Day before the requested date of such Borrowing, notify the
Administrative Agent that the requested Alternative Currency is not
practically available to such Bank in the amount required to make its
Advance in connection therewith; or
(ii) If any Bank shall, prior to the making of any requested
Borrowing consisting of Eurocurrency Rate Advances in an Alternative
Currency, notify the Administrative Agent that the introduction of or any
change in or in the interpretation of any law or regulation makes it
unlawful, or that any central bank or other governmental authority asserts
that it is unlawful, for such Bank or its Eurocurrency Lending Office or
any other Applicable Lending Office to perform its obligations hereunder to
make Eurocurrency Rate Advances in such currency or to fund or maintain
Eurocurrency Rate Advances in such currency hereunder;
then, upon receipt of such notice, the Administrative Agent shall so notify the
Company and the Company may, without incurring an obligation to indemnify for
losses, costs or expenses under Section 2.02(d), by notice to the Administrative
Agent (which shall promptly notify each Bank), either
(x) withdraw the applicable Notice of Borrowing, in which case the
Borrowing shall not occur; or
(y) request that such Borrowing be made by the Banks in U.S. Dollars
as a Borrowing comprised of either Eurocurrency Rate Advances or Base Rate
Advances, in which case the original Notice of Borrowing shall be deemed to
be a Notice of Borrowing which requests a Borrowing in U.S. Dollars in the
U.S. Dollar Equivalent, on the date the Company so notifies the
Administrative Agent, of the originally requested currency for such Type of
Advances (determined in accordance with Section 2.16); provided, that such
request may not be made by the Company if the requested Type of Advance is
a Eurocurrency Rate Advance and the request by the Company is not given to
the Administrative Agent prior to 9:00 a.m. (Chicago time) on the second
Business Day before the requested date of such Borrowing.
In the case of any notice given under clause (y) above, the Company shall
specify in such notice the amount and type of Advance to be made by each Bank in
connection therewith. Any notice
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given by the Company under this subsection (b) shall be given no later than 9:00
a.m. (Chicago time) two Business Days before the date of the requested
Borrowing, may be given by telephone and, if by telephone, shall be confirmed
promptly in writing. If neither the Company nor the applicable Borrower shall
provide a timely notice as contemplated in clause (x) or (y) above in response
to a notice by any Bank under clause (i) or (ii) above, the applicable Notice of
Borrowing shall be deemed withdrawn.
(c) Anything in subsection (a) above to the contrary notwithstanding,
if:
(i) the Eurocurrency Rate can not be determined, in accordance with
the definition of such term, for U.S. Dollars or the Alternative Currency
requested for a Borrowing, or a continuation or conversion thereof; or
(ii) The Majority Banks shall, no later than 5:00 p.m. (Chicago time)
three Business Days before the date of any requested Borrowing,
continuation or conversion consisting of Eurocurrency Rate Advances, or any
continuation thereof or conversion thereto, notify the Administrative Agent
that the Eurocurrency Rate for any Interest Period for such Eurocurrency
Rate Advances, plus additional interest, if any, payable under Section
2.08, is not likely to adequately reflect the cost to such Majority Banks
of making, funding, converting to or continuing their respective
Eurocurrency Rate Advances for such Borrowing for such Interest Period;
then, the Administrative Agent shall promptly notify the Company and the Banks
of such circumstances and upon receipt of such notice, the Company may, without
incurring an obligation to indemnify for losses, costs or expenses under Section
2.02(d), by notice to the Administrative Agent (which shall promptly notify each
Bank), either:
(x) withdraw the applicable Notice of Borrowing or Notice of
Conversion or Continuation, in which case the Borrowing, or the conversion
or continuation of such Borrowing, shall not occur; or
(y) request that such Borrowing, continuation or conversion be made
by the Banks in U.S. Dollars as a Borrowing, continuation or conversion, in
which case the original Notice of Borrowing or Notice of Conversion or
Continuation shall be deemed to be a Notice of Borrowing or Notice of
Conversion or Continuation which requests a Borrowing, continuation or
conversion in U.S. Dollars in the U.S. Dollar Equivalent, on the date the
Company so notifies the Administrative Agent, of the originally-requested
currency for such Advances; provided, that such request may not be made by
the Company if the request by the Company is not given to the
Administrative Agent prior to 9:00 a.m. (Chicago time) on the second
Business Day before the requested date of such Borrowing, continuation or
conversion.
In the case of any notice given under clause (y) above, the Company shall
specify in such notice the amount and Type of Advances to be made, continued or
converted by the Banks in connection therewith. Any notice by the Company under
this subsection (c) shall be given no later than 9:00 a.m. (Chicago time) two
Business Days before the date of the requested Borrowing, may be given
-17-
by telephone, and, if by telephone, shall be confirmed promptly in writing. From
and after the date the Administrative Agent receives the notice described in
Section 2.02(c)(ii), the Banks' obligation to make Eurocurrency Rate Advances
for any affected Interest Period shall be suspended until the Majority Banks
notify the Administrative Agent that the circumstances giving rise to such
notice no longer exist. If the Company shall not provide a timely notice as
contemplated in clauses (x) or (y) above with respect to a Notice of Borrowing,
the applicable Notice of Borrowing shall be deemed withdrawn. If the Company
shall not provide a timely notice as contemplated in clauses (x), or (y) above
with respect to a Notice of Continuation or Conversion, the Company shall be
deemed to have made the request described in clause (y).
(d) Each Notice of Borrowing and Notice of Conversion or Continuation
may be revoked by the Company by notice to the Administrative Agent without any
liability on the part of the Company at any time prior to (i) 10:00 a.m.
(Chicago time) on the date of a proposed Borrowing of or conversion into Base
Rate Advances, (ii) 9:00 a.m. (Chicago time) on the second Business Day prior to
the date of a proposed Borrowing, continuation or conversion comprised of
Eurocurrency Rate Advances to be denominated in U.S. Dollars, and (iii) 9:00
a.m. (Chicago time) on the third Business Day prior to the date of a proposed
Borrowing, continuation or conversion comprised of Eurocurrency Rate Advances to
be denominated in an Alternative Currency. In the case of any Borrowing,
continuation or conversion which the related Notice of Borrowing, or Notice of
Conversion or Continuation, specifies is to be comprised of Eurocurrency Rate
Advances, unless the Company revokes such Notice of Borrowing, or Notice of
Conversion or Continuation, in accordance with the preceding sentence and except
as otherwise provided in Sections 2.02(b) and (c), the Company shall indemnify
each Bank against any loss, cost or expense reasonably incurred by such Bank as
a result of any failure to fulfill on or before the date specified in such
Notice of Borrowing, or Notice of Conversion or Continuation for such Borrowing,
conversion or continuation, the applicable conditions set forth in Article III,
including, without limitation, any loss (excluding loss of anticipated profits),
cost or expense reasonably incurred by reason of the liquidation or reemployment
of deposits or other funds acquired by such Bank to fund the Advance to be made
by such Bank as part of such Borrowing, conversion or continuation, when such
Advance, as a result of such failure, is not made, continued or converted on
such date.
(e) Unless the Administrative Agent shall have received notice from a
Bank prior to the date of any Borrowing that such Bank will not make available
to the Administrative Agent such Bank's Pro Rata Share of such Borrowing, the
Administrative Agent may assume that such Bank has made such Pro Rata Share
available to the Administrative Agent on the date of such Borrowing in
accordance with subsection (a) of this Section 2.02 and the Administrative Agent
may, in reliance upon such assumption, make a corresponding amount available to
the applicable Borrower on such date. If and to the extent that such Bank shall
not have so made such Pro Rata Share available to the Administrative Agent, such
Bank and such Borrower severally agree to repay to the Administrative Agent
forthwith on demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to such Borrower until
the date such amount is repaid to the Administrative Agent, at (i) in the case
of such Borrower, the interest rate applicable at the time to Advances
comprising such Borrowing and (ii) in the case of such Bank, the Federal Funds
Effective Rate. If such Bank shall repay such corresponding amount to the
Administrative Agent, such amount so repaid shall constitute such Bank's Advance
as part of such Borrowing for purposes of this Agreement.
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(f) A Bank's failure to make the Advance to be made by it as part of
any Borrowing shall not relieve any other Bank of its obligation, if any,
hereunder to make its Advance on the date of such Borrowing. No Bank shall be
responsible for the failure of any other Bank to make the Advance to be made by
such other Bank on the date of any Borrowing.
SECTION 2.03. Letters of Credit. (a) General Terms. Subject to the
terms and conditions hereof, the Administrative Agent shall issue standby or
commercial letters of credit (each a "Letter of Credit") for the Company's
account in U.S. Dollars or any Alternative Currency in an aggregate undrawn
Original Dollar Amount up to the L/C Commitment, provided that the aggregate L/C
Obligations at any time outstanding shall not exceed the amount by which (i) the
lesser of (x) the aggregate Commitments in effect at such time and (y) 85% of
the aggregate Receivables of the Borrowers exceed (ii) the aggregate outstanding
Original Dollar Amount of Advances at such time. Each Letter of Credit shall be
issued by the Administrative Agent, but each Bank shall be obligated to
reimburse the Administrative Agent for its Pro Rata Share of the amount of each
drawing thereunder and, accordingly, the undrawn face amount of each Letter of
Credit shall constitute usage of the Commitment of each Bank pro rata in
accordance with such Bank's Commitment.
(b) Applications. At any time before the Termination Date, the
Administrative Agent shall, at the request of the Company, issue one or more
Letters of Credit, whether standby or commercial, in a form satisfactory to the
Administrative Agent and the Company, with expiration dates no later than the
Termination Date, in an aggregate Original Dollar Amount as set forth above,
upon the receipt of a duly executed application for the relevant Letter of
Credit in the form customarily prescribed by the Administrative Agent for the
type of Letter of Credit requested (each an "Application"). The current form of
the Administrative Agent's Applications are attached as Schedule 2.3 (Standby)
and Schedule 2.3 (Commercial) hereto. The Administrative Agent shall provide
the Company and each Bank with copies of any new form of Application that may,
from time to time, be adopted by the Administrative Agent. Notwithstanding
anything contained in any Application to the contrary: (i) the Company's
obligation to pay fees in connection with each Letter of Credit shall be
exclusively as set forth in Section 2.4 hereof, (ii) except during the
continuance of an Event of Default, the Administrative Agent will not call for
the funding by the Company of any amount under a Letter of Credit, or any other
form of collateral security for the Company's obligations in connection with
such Letter of Credit, before being presented with a drawing thereunder, and
(iii) if the Administrative Agent is not timely reimbursed for the amount of any
drawing under a Letter of Credit on the date such drawing is paid, the Company's
obligation to reimburse the Administrative Agent for the amount of such drawing
shall bear interest (which the Company hereby promises to pay) from and after
the date such drawing is paid at a rate per annum equal to the Base Rate for
three (3) Business Days and thereafter at a rate per annum equal to the sum of
1% plus the Base Rate from time to time in effect. The Administrative Agent
will promptly notify the Banks of each issuance by it of a Letter of Credit. If
the Administrative Agent issues any Letters of Credit with expiration dates that
are automatically extended unless the Administrative Agent gives notice that the
expiration date will not so extend beyond its then-scheduled expiration date,
the Administrative Agent will give such notice of non-renewal before the time
necessary to prevent such automatic extension if before such required notice
date (i) the expiration date of such Letter of Credit if so extended would be
later than the Termination Date, (ii) the Commitments have been terminated or
(iii) an Event of Default exists and the Majority Banks have given the
Administrative Agent instructions not to so permit the extension of the
expiration date of such Letter of Credit. The Administrative Agent
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agrees to issue amendments to the Letter(s) of Credit increasing the amount, or
extending the expiration date, thereof at the request of the Company subject to
the terms of this Section 2.3 (including, but not limited to, the satisfaction
of the conditions set forth in Section 2.3(c) at the time of such amendment).
Without limiting the generality of the foregoing, the Administrative Agent's
obligation to issue, amend or extend the expiration date of a Letter of Credit
is subject to the conditions of Section 2.3(c) and the other terms of this
Section 2.3 and the Administrative Agent will not issue, amend or extend the
expiration date of any Letter of Credit if any Bank notifies the Administrative
Agent of any failure to satisfy or otherwise comply with such conditions and
terms and directs the Administrative Agent not to take such action.
(c) Conditions to Issuance of Letters of Credit. In addition to
being subject to the satisfaction of the conditions precedent contained in
Sections 3.01 and 3.02, the obligation of the Administrative Agent to issue any
Letter of Credit is subject to the satisfaction in full of the following
conditions:
(i) The Company shall have delivered to the Administrative Agent, at
such times and in such manner as the Administrative Agent may prescribe, an
Application and such other documents and materials as may be required
pursuant to the terms thereof, and the terms of the proposed Letter of
Credit shall be reasonably satisfactory to the Administrative Agent and
shall be consistent with the Administrative Agent's ordinary practice with
respect to terms of its letters of credit; and
(ii) as of the date of issuance, no order, judgment or decree of any
court, arbitrator or Governmental Authority shall purport by its terms to
enjoin or restrain the Administrative Agent from issuing such Letter of
Credit and no law, rule or regulation applicable to the Administrative
Agent and no request or directive (whether or not having the force of law
and whether or not the failure to comply therewith would be unlawful) from
any Governmental Authority with jurisdiction over the Administrative Agent
shall prohibit or request the Administrative Agent to refrain from the
issuance of letters of credit generally or the issuance of that Letter of
Credit.
(d) Reimbursement Obligations. Subject to Section 2.03(b) hereof,
the obligation of the Company to reimburse the Administrative Agent for all
drawings under a Letter of Credit (a "Reimbursement Obligation") shall be
governed by the Application related to such Letter of Credit, except that, if
and as long as no Event of Default exists and the other conditions in Section
2.03(c) hereof are satisfied, any Reimbursement Obligation outstanding on
account of a drawing under a Letter of Credit shall, in the case of a
Reimbursement Obligation denominated in U.S. Dollars, automatically convert
into a Borrowing of Base Rate Advances in an amount equal to such Reimbursement
Obligation on the date such drawing occurs and, in the case of a Reimbursement
Obligation denominated in an Alternative Currency, automatically convert into a
Borrowing of Eurocurrency Rate Advances with an Interest Period of one month in
an amount equal to such Reimbursement Obligation on the date such drawing
occurs, and the Administrative Agent shall notify each Bank thereof, and each
Bank shall thereupon fund its Advance in such Borrowing in accordance with
Sections 2.01 and 2.02 (except for any requirement that a Borrowing be in a
certain amount). If the conditions in Section 3.02 cannot be satisfied with
respect to any drawing, then reimbursement of such drawing shall be made in
immediately
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available funds at the Administrative Agent's principal office in
Chicago, Illinois by no later than 2:00 p.m. (Chicago time) on the date when
such drawing is paid or, if such drawing was paid after 12:00 Noon (Chicago
time), by 12:00 Noon (Chicago time) on the next Business Day. If the Company
does not make any such reimbursement payment on the date due and the
Participating Banks fund their participations therein in the manner set forth in
Section 2.03(e) below, then all payments thereafter received by the
Administrative Agent in discharge of any of the relevant Reimbursement
Obligations shall be distributed in accordance with Section 2.03(e) below.
(e) The Participating Interests. Each Bank (other than the Bank then
acting as Administrative Agent in issuing Letters of Credit), by its acceptance
hereof, severally agrees to purchase from the Administrative Agent, and the
Administrative Agent hereby agrees to sell to each such Bank (a "Participating
Bank"), an undivided percentage participating interest (a "Participating
Interest"), to the extent of its Pro Rata Share, in each Letter of Credit issued
by, and each Reimbursement Obligation owed to, the Administrative Agent. Upon
any failure by the Company to pay any Reimbursement Obligation at the time
required on the date the related drawing is paid, as set forth in Section
2.03(d) above, or if the Administrative Agent is required at any time to return
to the Company or to a trustee, receiver, liquidator, custodian or other Person
any portion of any payment of any Reimbursement Obligation, each Participating
Bank shall, not later than the Business Day it receives notice from the
Administrative Agent to such effect, if such notice is received before 1:00 p.m.
(Chicago time), or not later than the following Business Day, if such notice is
received after such time, pay to the Administrative Agent an amount equal to its
Pro Rata Share of such unpaid or recaptured Reimbursement Obligation together
with interest on such amount accrued from the date the related payment was made
by the Administrative Agent to the date of such payment by such Participating
Bank at a rate per annum equal to the Federal Funds Effective Rate for each such
day. Each such Participating Bank shall thereafter be entitled to receive its
Pro Rata Share of each payment received in respect of the relevant Reimbursement
Obligation and of interest paid thereon, with the Administrative Agent retaining
its Pro Rata Share as a Bank hereunder.
The several obligations of the Participating Banks to the
Administrative Agent under this Section 2.03(e) shall be absolute, irrevocable
and unconditional under any and all circumstances whatsoever (except, without
limiting the Company's obligations under each Application, to the extent the
Company is relieved from its obligation to reimburse the Administrative Agent
for a drawing under a Letter of Credit because of the Administrative Agent's
gross negligence or willful misconduct in determining that documents received
under the Letter of Credit appear to comply on their face with the terms
thereof) and shall not be subject to any set-off, counterclaim or defense to
payment which any Participating Bank may have or have had against the Company,
the Administrative Agent, any other Bank or any other Person whatsoever.
Without limiting the generality of the foregoing, such obligations shall not be
affected by any Event of Default or by any reduction or termination of any
Commitment of any Bank, and each payment by a Participating Bank under this
Section 2.03(e) shall be made without any offset, abatement, withholding or
reduction whatsoever. The Administrative Agent shall be entitled to offset
amounts received for the account of a Bank under this Agreement against unpaid
amounts due from such Bank to the Administrative Agent hereunder (whether as
fundings of participations, indemnities or otherwise), but shall not be entitled
to offset against amounts owed to the Administrative Agent by any Bank arising
outside this Agreement.
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(f) Indemnification. The Participating Banks shall, to the extent of
their respective Pro Rata Shares, indemnify the Administrative Agent (to the
extent not reimbursed by the Company) against any cost, expense (including
reasonable counsel fees and disbursements), claim, demand, action, loss or
liability (except such as result from the Administrative Agent's gross
negligence or willful misconduct) that the Administrative Agent may suffer or
incur in connection with any Letter of Credit. The obligations of the
Participating Banks under this Section 2.03(f) and all other parts of this
Section 2.03 shall survive termination of this Agreement and of all other L/C
Documents.
SECTION 2.04. Fees. (a) Commitment Fee. The Borrowers jointly and
severally agree to pay to the Administrative Agent, for the account of each
Bank, a commitment fee (the "Commitment Fee") on such Bank's average daily
unused Commitment from the date hereof until the Termination Date, payable in
arrears on the last day of each December, March, June and September during the
term of such Bank's Commitment and on the Termination Date, at a rate per annum
equal to the following percentage in effect from time to time:
(i) 0.20% for each day Level I Status exists,
(ii) 0.25% for each day Level II Status exists, and
(iii) 0.30% for each day Level III Status exists.
Level I Status shall apply to the period from the date hereof until the first
date on which financial statements are due pursuant to Section 5.02. For any
date thereafter, Level Status shall be adjusted after each delivery of the
Company's quarterly or annual financial statements pursuant to Section 5.02
effective on the date such financial statements are due pursuant to Section
5.02; provided, that if timely delivery of such financial statements is not
made, Level III Status shall be deemed to exist from the day on which such
financial statements were required to be delivered until such delivery is made,
after which time Level Status shall be determined from the delivered financial
statements.
(b) Letter of Credit Fees.
(i) Banks' Letter of Credit Fees. The Company shall pay, with
respect to each Letter of Credit, a per annum Letter of Credit fee equal to
the Applicable Margin in effect from time to time minus 1/8th of 1%
(computed based upon actual days elapsed in a 365/366-day year) multiplied
by the maximum Original Dollar Amount available to be drawn under such
Letter of Credit. Such fee shall be paid to the Administrative Agent, for
the account of the Banks in accordance with their Pro Rata Shares,
quarterly in arrears, on the last calendar day of each December, March,
June and September occurring after the date hereof.
(ii) Administrative Agent's Letter of Credit Fronting Fees. The
Company shall pay, with respect to each Letter of Credit, a per annum
Letter of Credit fronting fee equal to 1/8th of 1% multiplied by the
maximum Original Dollar Amount available to be drawn under such Letter of
Credit. Such fee shall be paid to the Administrative Agent, for its own
account, quarterly in arrears, on the last
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calendar day of each December, March, June and September occurring after
the date hereof.
(iii) Administrative Agent's Other Fees. In addition to the fees
under clause (i) and (ii) above, the Company shall pay to the
Administrative Agent for its own account (x) the Administrative Agent's
standard issuance fee for each Commercial Letter of Credit and (y) the
Administrative Agent's standard drawing, negotiation, amendment, and other
administrative fees for each Letter of Credit (whether a Commercial Letter
of Credit or Standby Letter of Credit). All the foregoing standard fees
shall be retained by the Administrative Agent for its own account. Such
standard fees referred to in the preceding clauses (x) and (y) may be
established by the Administrative Agent from time to time. The
Administrative Agent shall upon the Company's request furnish the Company
with a current schedule of such standard fees.
SECTION 2.05. Reduction and Termination of the Commitments; Right to
Replace Banks. (a) The Company shall have the right, upon at least five (5)
days' notice to the Administrative Agent, to terminate in whole or reduce
ratably in part the unused portions of the respective Commitments of the Banks;
provided, that (a) the aggregate amount of the Commitments of the Banks shall
not be reduced to an amount less than the sum of the aggregate Original Dollar
Amount of the outstanding Advances and the aggregate Original Dollar Amount of
the outstanding L/C Obligations and (b) each partial reduction shall be in an
aggregate amount of $1,000,000 or any integral multiple of $100,000 in excess
thereof.
(b) Provided that no Event of Default shall have occurred and be
continuing, the Company, with the consent of the Administrative Agent, which
consent shall not be unreasonably withheld, may replace any Bank, in whole but
not in part, that fails to make an Advance that it is required to make hereunder
or that gives notice of any additional amounts payable by the Borrower to such
Bank pursuant to Section 2.12, 2.13 or 2.18(a) by (i) giving such Bank and the
Administrative Agent not less than ten (10) Business Days' prior notice thereof,
which notice shall be irrevocable, shall specify the effective date of such
replacement and shall be effective only when received by such Bank and the
Administrative Agent, and (ii) effecting an assignment of all of the Bank's
Commitment and Advances in accordance with Section 9.07.
SECTION 2.06. Payment; Conversion and Continuation. (a) On the
Termination Date, the Borrowers shall repay, to the Administrative Agent for the
ratable account of the Banks, the entire unpaid principal amount of the Advances
made by each Bank.
(b) Any Borrower may elect (x) to convert Base Rate Advances or any
portion thereof to Eurocurrency Rate Advances denominated in U.S. Dollars, (y)
to convert Eurocurrency Rate Advances denominated in U.S. Dollars or any portion
thereof into Base Rate Advances, or (z) to continue any Eurocurrency Rate
Advance or any portion thereof for an additional Interest Period; provided,
however, that (i) the aggregate amount of Base Rate Advances being converted
into Eurocurrency Rate Advances or of Eurocurrency Rate Advances being
continued shall, in the aggregate, equal $1,000,000 or an integral multiple of
$100,000 in excess thereof (or, in the case of a Eurocurrency Rate Advance
denominated in an Alternative Currency, the minimum amount and multiple thereof
specified by the Administrative Agent pursuant to Section 2.01); and (ii) in the
case of a partial conversion of a Base Rate Advance into a Eurocurrency Rate
Advance,
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the remaining Base Rate Advance shall equal $100,000 or an integral multiple
thereof. The applicable Interest Period for the continuation of any Eurocurrency
Rate Advance shall commence on the day on which the immediately-preceding
Interest Period expires. Each conversion or continuation shall be allocated
among the Advances of each Bank in accordance with its Pro Rata Share of the
amount so converted or continued. Each such election shall be in substantially
the form of Exhibit E (a "Notice of Conversion or Continuation") and shall be
made by giving the Administrative Agent notice by 10:00 a.m. (Chicago time) on
the date of such conversion or continuation, in the case of a conversion to a
Base Rate Advance, or at least three Business Days prior to the date of such
conversion or continuation in the case of a conversion to or continuation of a
Eurocurrency Rate Advance, specifying, in each case (i) whether a conversion or
continuation is to take place, (ii) what Advances are to be converted or
continued, and if converted, the Type of Advance to which it is to be converted,
(iii) the amount of the conversion or continuation, (iv) if applicable, the new
Interest Period therefor and (v) in the case of a conversion, the date of
conversion (which date shall be a Business Day). The Administrative Agent shall
promptly notify each Bank of its receipt of a Notice of Conversion or
Continuation by sending such Bank a copy thereof. If, within the time period
required under the terms of this Section 2.06(b), the Administrative Agent does
not receive a Notice of Conversion or Continuation from the applicable Borrower
containing an election to continue or convert any Advances for an additional
Interest Period, then, upon the expiration of the Interest Period therefor, such
Advances, if denominated in U.S. Dollars, will be automatically converted to
Base Rate Advances, and if denominated in an Alternative Currency, will be
automatically continued for an Interest Period of one month.
SECTION 2.07. Interest on Advances. Each Borrower shall pay
interest on the unpaid principal amount of each Advance made by each Bank to it
from the date of such Advance until such principal amount shall be paid in full,
at the following rates per annum:
(a) Base Rate Advances. During such period as such Advance is a Base
Rate Advance, a rate per annum equal at all times to the Base Rate in effect
from time to time, payable quarterly in arrears on the last day of each
December, March, June and September, commencing December 31, 1996. The
Administrative Agent shall give notice to the Company and the applicable
Borrower (if other than the Company) and each Bank of any change in the Base
Rate promptly after such change occurs, but the Administrative Agent's failure
to give such notice shall not affect the obligation of the Company or such
Borrower to pay interest at such rate when it becomes due and payable.
(b) Eurocurrency Rate Advances. During such period as such Advance
is a Eurocurrency Rate Advance, a rate per annum equal at all times during each
Interest Period for such Advance to the sum of the Eurocurrency Rate for such
Interest Period plus the Applicable Margin, payable on the last day of such
Interest Period and, if such Interest Period has a duration of more than three
months, on each day which occurs during such Interest Period every three months
from the first day of such Interest Period and on the date such Eurocurrency
Rate Advance shall be converted or paid in full.
(c) Default Interest. Notwithstanding the foregoing provisions of
this Section 2.07, any amount of principal and fees and, to the extent permitted
by law, interest, that is not paid when due (whether at stated maturity, by
acceleration or otherwise) shall bear interest, from the date on which such
amount is due until such amount is paid in full, payable in arrears on the
-24-
date such amount shall be paid in full and on demand, at a rate per annum equal
at all times to 1% per annum above (i) in the case of principal, the rate of
interest otherwise applicable thereto from time to time in accordance with the
terms hereof, and (ii) in the case of interest and fees, the Base Rate in effect
from time to time.
SECTION 2.08. Additional Interest on Eurocurrency Rate Advances.
Each Borrower shall pay to each Bank, so long as and to the extent such Bank
shall be required under regulations of the Board of Governors of the Federal
Reserve System (or any similar authority outside the United States, in the case
of Advances in Alternative Currencies) to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities (or
any other category of liabilities that includes deposits by reference to which
the interest rate on Eurocurrency Rate Advances in the applicable Alternative
Currency is determined) and such Bank's performance under this Agreement (and
other like agreements) shall have given rise to additional reserve requirements
for such Bank thereunder, additional interest on the unpaid principal amount of
each Advance constituting a Eurocurrency Rate Advance of such Bank made to such
Borrower, from the date of such Advance until such principal amount is paid in
full, at an interest rate per annum equal at all times to the remainder obtained
by subtracting (a) the Eurocurrency Rate for the applicable Interest Period for
such Advance from (b) the rate obtained by dividing such Eurocurrency Rate by a
percentage equal to 100% minus the Eurocurrency Rate Reserve Percentage of such
Bank for such Interest Period, payable on each date on which interest is payable
on such Advance. Such Bank shall, not later than the last day of the applicable
Interest Period, provide notice to the Administrative Agent and the Company of
any such additional interest arising in connection with such Advance. Such
additional interest so notified on a timely basis by any Bank shall be payable
to the Administrative Agent for the account of such Bank on the dates specified
for payment of interest for such Advance in Section 2.07.
SECTION 2.09. Interest Rate Determination. (a) The Administrative
Agent shall give prompt notice to the Company and each of the Banks of the
applicable interest rate determined by the Administrative Agent for purposes of
Section 2.07(a) or (b).
(b) On the date on which the aggregate unpaid principal amount of
Eurocurrency Rate Advances comprising any Borrowing shall be reduced, by
payment, prepayment, conversion of part thereof or otherwise, to less than
$1,000,000 (or, in the case of a Borrowing denominated in an Alternative
Currency, the minimum amount for Borrowings in such currency designated by the
Administrative Agent pursuant to Section 2.01), such Advances shall, in the case
of Advances denominated in U.S. Dollars, automatically convert into Base Rate
Advances and such conversion shall be subject to Section 2.11 and, in the case
of Advances denominated in an Alternative Currency, shall be prepaid and such
prepayment shall be subject to Section 2.11.
SECTION 2.10. Prepayments. A Borrower may prepay, on notice given
no later than 11:00 a.m. (Chicago time) on the date of prepayment (in the case
of Base Rate Advances) and on three Business Days' prior notice (in the case of
Eurocurrency Rate Advances) to the Administrative Agent, each Borrowing made to
such Borrower, in whole or in part. Such notice shall include the proposed date
and aggregate principal amount of such prepayment, and if such notice is given,
such Borrower shall prepay such principal amount, together with accrued interest
to the date of such prepayment on the principal amount prepaid, and any amounts
payable pursuant to Section 2.11 hereof in connection therewith shall be paid on
the date of such prepayment; provided, however, that each partial prepayment of
(i) Base Rate Advances shall be
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in an aggregate principal amount of not less than $100,000 or an integral
thereof, (ii) Eurocurrency Rate Advances denominated in U.S. Dollars shall be in
an aggregate principal amount of not less than $1,000,000 or an integral
multiple of $100,000 in excess thereof and (iii) Eurocurrency Rate Advances
denominated in an Alternative Currency shall be in an aggregate principal amount
of not less than the minimum amount and multiple specified by the Administrative
Agent pursuant to Section 2.01. Subject to Section 2.13, each prepayment of a
Borrowing shall be made to each Bank in accordance with such Bank's Pro Rata
Share thereof. If the aggregate Original Dollar Amount of the outstanding L/C
Obligations and the outstanding principal amount of the Advances, calculated in
accordance with Section 2.16 by the Administrative Agent, exceeds (as the result
of fluctuations in applicable foreign exchange rates) (x) 100% of the then
aggregate amount of the Commitments on the date of any Borrowing, conversion or
continuation of Advances hereunder, or on the date any Letter of Credit is
issued hereunder, or (y) 105% of the then aggregate amount of the Commitments on
the seventh Business Day prior to any December, March, June or September, the
Company shall prepay a Borrowing or Borrowings (in whole or in part, and in any
case as selected by the Company) in an aggregate amount (calculated as
aforesaid, and rounded upward, if necessary, to the nearest $100,000) equal to
the excess of:
(a) the aggregate Original Dollar Amount of the outstanding L/C
Obligations and the outstanding principal amount (calculated as
aforesaid) of Advances, over
(b) the then aggregate amount of the Banks' Commitments
(calculated as aforesaid).
The foregoing prepayment calculation shall be made (A) in the case of clause (x)
above, on the day such Notice of Borrowing, conversion or continuation of
Advances is required to be given, or Letter of Credit is requested, by the
Company and (B) in the case of clause (y) above, on the seventh Business Day
prior to the end of the applicable calendar quarter and reported to the Company
by the fifth Business Day prior to such date. Any such required prepayment
shall be due (1) in the case of clause (x) above, on the day such Borrowing,
conversion or continuation of Advances is made, or Letter of Credit is issued,
and (2) in the case of clause (y) above, on the last Business Day of the
applicable calendar quarter. Each prepayment of any Borrowing (in whole or in
part) made pursuant to this Section 2.10 shall be without premium or penalty,
but shall be subject to the provisions of Section 2.11. Any mandatory
prepayment of a Borrowing shall be made to the Administrative Agent for the
account of each Bank based on such Bank's Pro Rata Share of such Borrowing and
shall include accrued and unpaid interest on the principal amount prepaid and
all amounts owing under Section 2.11.
SECTION 2.11. Funding Indemnification. If any payment of principal
of any Advance (other than a Base Rate Advance) is made other than on the last
day of an Interest Period for such Advance, as a result of acceleration of the
maturity of the Advances pursuant to Section 6.01 or for any other reason, or if
any Eurocurrency Rate Advance is converted to a Base Rate Advance pursuant to
Section 2.13(b) on any day other than the last day of an Interest Period for
such Eurocurrency Rate Advance, the applicable Borrower shall, upon demand by
any Bank (with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Bank any amounts required to
compensate such Bank for any additional losses, costs or expenses which it may
reasonably incur as a result of such payment or conversion,
-26-
including without limitation any loss (excluding loss of anticipated profits),
cost or expense reasonably incurred as a result of the liquidation or re-
employment of deposits or other funds acquired by such Bank to fund or maintain
such Advance.
SECTION 2.12. Increased Costs and Reduced Return. (a) If, due to
either (i) the introduction of or any change (other than, in the case of
Eurocurrency Rate Advances, any change by way of imposition or increase of
reserve requirements included in the Eurocurrency Rate Reserve Percentage),
after the date hereof, in or in the interpretation of any law or regulation or
(ii) the compliance with any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) issued after the
date hereof, there shall be any increase in the cost to any Bank of agreeing to
make, making, funding or maintaining Eurocurrency Rate Advances, by an amount
reasonably deemed by such Bank to be material, then from time to time, within
ten days after demand by such Bank (with a copy of such demand to the
Administrative Agent), such Borrower shall pay to the Administrative Agent for
the account of such Bank additional amounts sufficient to compensate such Bank
for such increased cost; provided, that no Borrower shall be obligated to pay
any such amount to the extent such amount accrued more than 90 days prior to the
demand therefor, except to the extent such introduction, change, guideline or
request has retroactive effect.
(b) If any Bank shall have determined that the adoption, after the
date hereof, of any applicable law, rule or regulation regarding capital
adequacy, or any change in any applicable law, rule or regulation, or any change
in the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Applicable Lending
Office) with any request or directive issued after the date hereof regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on the capital of such Bank or any corporation controlling such
Bank, as a consequence of such Bank's obligations hereunder, to a level below
that which such Bank or such corporation could have achieved but for such
adoption, change or compliance by an amount reasonably deemed by such Bank to be
material, then from time to time, within ten days after demand by such Bank
(with a copy of such demand to the Administrative Agent), the Company shall pay
to the Administrative Agent for the account of such Bank such additional amount
or amounts as will compensate such Bank or such corporation, in light of such
circumstances, to the extent such Bank reasonably determines such reduction to
be allocable to the existence of such Bank's Commitment; provided, that no
Borrower shall be obligated to pay any such amount to the extent such amount
accrued more than 90 days prior to the initial demand therefor, except to the
extent such adoption, change or compliance has retroactive effect.
(c) Each Bank will promptly notify the Administrative Agent and the
Company of any event of which it has knowledge, occurring after the date hereof,
which would entitle such Bank to compensation pursuant to this Section 2.12. A
certificate of any Bank claiming compensation under this Section and setting
forth the additional amount or amounts to be paid to it hereunder shall create a
rebuttable presumption as to the correctness of such additional amount or
amounts. Each Bank agrees not to request any payment under this Section 2.12
unless similar requests are then generally being made by such Bank of other
borrowers similarly situated, and to use a reasonable basis for calculating
amounts allocable to its Commitment hereunder.
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SECTION 2.13. Illegality. (a) If any Bank shall determine (which
determination shall be rebuttably presumed correct as to all parties) at any
time that the making or continuance of its Eurocurrency Rate Advances in any
particular currency has become unlawful because of the introduction of or any
change in or in the interpretation of any law or regulation or because of the
assertion of unlawfulness by any central bank or other governmental authority,
then, in any such event, such Bank shall give prompt notice (by telephone
confirmed in writing) to the Administrative Agent of such determination (which
notice the Administrative Agent shall promptly transmit to each Borrower and the
other Banks).
(b) Upon the giving of the notice to the Company referred to in
subsection (a) above, if the affected Advances are then outstanding, each
Borrower shall, upon at least one Business Day's written notice to the
Administrative Agent and the affected Bank, or if permitted by applicable law no
later than the date permitted thereby, in such Borrower's sole discretion,
either (i) prepay the Original Dollar Amount of the principal of all outstanding
Advances of such Bank to which such notice relates, together with accrued
interest thereon to the date of payment, or (ii) convert each such Advance into
a Base Rate Advance denominated in U.S. Dollars and, in each case, be obligated
to reimburse the affected Bank in respect thereof pursuant to Section 2.11
hereof. If more than one Bank gives notice pursuant to Section 2.13(a) at any
time, then all outstanding Advances of the affected Type or currency of such
Banks must be treated in the same manner by the Borrowers pursuant to this
subsection 2.13(b) and the Banks' obligations to make, convert or continue
Eurocurrency Rate Advances shall be suspended until the Administrative Agent
notifies the Borrowers that the circumstances causing such suspension no longer
exist.
SECTION 2.14. Payments and Computations. (a) Each Borrower shall
make each payment hereunder and under the Notes in immediately-available funds
to the Administrative Agent not later than 1:00 p.m. (Chicago time) on the day
when due from such Borrower. The Administrative Agent will, promptly after
receipt such payment, cause to be distributed like funds relating to the payment
of principal or interest or fees ratably (other than amounts payable pursuant to
Sections 2.05(b), 2.08, 2.11, 2.12, 2.13(b), 2.15, or 2.18) to the Banks for the
account of their respective Applicable Lending Offices, and like funds relating
to the payment of any other amount payable to any Bank to such Bank for the
account of its Applicable Lending Office, in each case to be applied in
accordance with the terms of this Agreement. All such payments shall be made in
U.S. Dollars, except that payments of principal of and interest on Borrowings in
an Alternative Currency shall be made in such Alternative Currency; provided
that if the applicable Borrower fails to make any payment of principal or
interest with respect to any Borrowing in an Alternative Currency on the due
date thereof because such Alternative Currency has ceased to be freely
transferable and convertible into U.S. Dollars in the London interbank market,
such failure shall not constitute an Event of Default or an Unmatured Event of
Default if such Borrower pays the U.S. Dollar Equivalent of such payment on the
due date thereof. In addition to any such U.S. Dollar payment, such Borrower
agrees to pay to each affected Bank an indemnity payment within five Business
Days after such Borrower shall have received a certificate from such Bank
setting forth in reasonable detail the amount of any loss, cost, damage or
expense suffered by such Bank as a consequence of such inability to make any
such payment in such Alternative Currency on the due date thereof. Each Bank
agrees to use reasonable efforts to avoid or minimize all such loss, cost,
damage or expense.
(b) All computations of interest based on the Prime Commercial Rate
and all computations of the Commitment Fee shall be made by the Administrative
Agent on the basis of a
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year of 365 or 366 days, as the case may be, and all computations of interest
based on the Eurocurrency Rate or the Federal Funds Effective Rate and all
computations of interest pursuant to Section 2.08 shall be made by the
Administrative Agent on the basis of a year of 360 days, in each case for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest or fees are payable. Each
determination by the Administrative Agent (or, in the case of Section 2.08, by a
Bank) of an interest rate or fee owing hereunder shall create a rebuttable
presumption as to the correctness of such determination.
(c) Whenever any payment hereunder or under the Notes shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or fee, as the case may be;
provided, however, if such extension would cause payment of interest on
Eurocurrency Rate Advances to be made in the next following calendar month, such
payment shall be made on the next preceding Business Day.
(d) Unless the Administrative Agent shall have received notice from
the applicable Borrower prior to the date on which any payment is due to the
Banks hereunder that such Borrower will not make such payment in full, the
Administrative Agent may assume that such Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each Bank on such due
date an amount equal to the amount then due such Bank. If and to the extent
such Borrower shall not have so made such payment in full to the Administrative
Agent, each Bank shall repay to the Administrative Agent forthwith on demand
such amount distributed to such Bank together with interest thereon, for each
day from the date such amount is distributed to such Bank until the date such
Bank repays such amount to the Administrative Agent, at the Federal Funds
Effective Rate.
SECTION 2.15. Sharing of Payments, Etc. If any Bank shall obtain
any payment (whether voluntary, involuntary, through the exercise of any right
of set-off, or otherwise) on account of the Advances made by it (other than
pursuant to Sections 2.08, 2.11, 2.12, 2.13(b), or 2.18) in excess of its
ratable share of payments on account of the Advances obtained by all the Banks,
such Bank shall forthwith purchase from the other Banks such participations in
the Advances made by them as shall be necessary to cause such purchasing Bank to
share the excess payment ratably with each of them; provided, however, that if
all or any portion of such excess payment is thereafter recovered from such
purchasing Bank, such purchase from each Bank shall be rescinded and each Bank
shall repay to the purchasing Bank the purchase price to the extent of such
recovery together with an amount equal to such Bank's ratable share (according
to the proportion of (a) the amount of such Bank's required repayment to (b) the
total amount so recovered from the purchasing Bank) of any interest or other
amount paid or payable by the purchasing Bank in respect of the total amount so
recovered. Each Borrower agrees that any Bank so purchasing a participation from
another Bank with respect to Advances made to such Borrower pursuant to this
Section 2.15 may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off) with respect to such
participation as fully as if such Bank were the direct creditor of such Borrower
in the amount of such participation.
SECTION 2.16. Currency Equivalents. (a) For purposes of this
Article II, (i) the equivalent in U.S. Dollars (the "U.S. Dollar Equivalent") of
any Alternative Currency shall be determined by using the spot rate at which
▇▇▇▇▇▇ Bank offers to exchange U.S. Dollars for such
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Alternative Currency in the interbank market at 10:00 a.m. (Chicago time) two
Business Days prior to the date on which such U.S. Dollar Equivalent is to be
determined, (ii) the equivalent in any Alternative Currency of any other
Alternative Currency shall be determined by using the spot rate at which ▇▇▇▇▇▇
Bank offers to exchange such Alternative Currency for the equivalent in such
other Alternative Currency at 10:00 a.m. (Chicago time) two Business Days prior
to the date on which such equivalent is to be determined, and (iii) the
equivalent in any Alternative Currency of U.S. Dollars shall be determined by
using the spot rate at which ▇▇▇▇▇▇ Bank offers to exchange such Alternative
Currency for U.S. Dollars at 10:00 a.m. (Chicago time) two Business Days prior
to the date on which such equivalent is to be determined.
(b) If for the purpose of obtaining a judgment in any court with
respect to any obligation of a Borrower hereunder, it shall become necessary for
the Administrative Agent or any Bank entitled to receive payments hereunder to
convert any amount into a currency other than the currency denominated hereunder
for such obligation, then such conversion shall be made on the basis of rates
(the "Exchange Rates") determined in the manner described in subsection (a)
above (or, if the applicable currency to be converted is not at the time of
conversion available in the interbank market in London, then in such other
interbank market as the Administrative Agent shall determine to have adequate
availability of such currency) and the date with respect to which such an
equivalent is to be determined shall be the first Business Day preceding the
date on which final judgment is entered. If pursuant to any such judgment
conversion is to be made with respect to a date other than the date referred to
above, and there shall occur a change between the Exchange Rates in effect on
such date and the Exchange Rates in effect on the date of payment, (i) the
applicable Borrower agrees to pay such additional amounts (if any) as may be
necessary to ensure that the amount paid is the amount in such other currency
which, when converted at the Exchange Rates as in effect on the date of payment
or distribution, is the amount then due hereunder in the relevant currency and
(ii) such Borrower shall not be required to pay any amount in excess of the
amount determined to be payable in connection with such obligation, calculated
on the basis of the Exchange Rates in effect on the first Business Day preceding
the date on which final judgment is entered. Any amount due from a Borrower
under this subsection (b) shall be due as a separate debt and is not to be
affected by or merged into any judgment being obtained for any other sums due
hereunder.
SECTION 2.17. Borrowing Subsidiaries. The Company may at any time
or from time to time add as a party to this Agreement any Subsidiary of the
Company as a "Borrowing Subsidiary" hereunder by causing such Subsidiary to
execute and deliver a duly completed Assumption Letter to the Administrative
Agent, with the written consent of the Company at the foot thereof. Upon such
execution, delivery and consent such Subsidiary shall for all purposes be a
party hereto as a Borrowing Subsidiary as fully as if it had executed and
delivered this Agreement. So long as the principal of and interest on all
Advances made to any Borrowing Subsidiary under this Agreement shall have been
paid in full and all other obligations of such Borrowing Subsidiary shall have
been fully performed, such Borrowing Subsidiary may, by not less than five
Business Days' prior notice to the Administrative Agent (which shall promptly
notify the Banks thereof), terminate its status as a "Borrowing Subsidiary."
SECTION 2.18. Taxes. (a) Any and all payments by a Borrower
hereunder or under the Notes shall be made in accordance with Section 2.14, free
and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Bank and the
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Administrative Agent, taxes imposed on its income, and franchise taxes imposed
on it, by the jurisdiction under the laws of which such Bank or the
Administrative Agent is organized or any political subdivision thereof and taxes
imposed on its income, and franchise taxes imposed on it, by the jurisdiction of
such Bank's Applicable Lending Office or any political subdivision thereof (all
such non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If any Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any Note to any Bank or the Administrative Agent, (i) the sum
payable shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.18) such Bank or the Administrative Agent (as the case may be)
receives an amount equal to the sum it would have received had no deductions
been made, (ii) such Borrower shall make such deductions and (iii) such Borrower
shall pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law.
(b) In addition, each Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or under the Notes or
from the execution, delivery or registration of, or otherwise with respect to,
this Agreement (hereinafter referred to as "Other Taxes").
(c) Each Borrower will indemnify each Bank and the Administrative
Agent for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 2.18) paid by such Bank or the Administrative Agent
and any liability (including penalties, interest and expenses) arising therefrom
or with respect thereto, whether or not such Taxes or Other Taxes were correctly
or legally asserted; provided, that the Borrowers shall have no obligation under
this subsection (c) to indemnify any Bank or the Administrative Agent if a
Borrower shall have performed its obligations under subsection (a) and (b), and,
if such Borrower is required to make a payment under subsection (a) or (b), such
Borrower shall demonstrate that payment of such Taxes or Other Taxes has been
made on a timely basis to the relevant taxing authorities. This indemnification
shall be made to the Administrative Agent for the account of such Bank or the
Administrative Agent (as the case may be) within 30 days from the date such Bank
or the Administrative Agent makes written demand therefor (with a copy, in the
case of a demand by a Bank, of such demand to the Administrative Agent).
(d) Notwithstanding the foregoing, unless, prior to the Initial
Borrowing Date (in the case of a Bank listed on Schedule 2.01 hereto), or prior
to the effective date of the Assignment and Acceptance by which it became a Bank
(in the case of bank that became a Bank pursuant to such Assignment and
Acceptance), and in each case from time to time thereafter (so long as such Bank
is able to do so), if requested by any Borrower,
(i) each Bank organized under the laws of a jurisdiction outside the
United States shall have provided the Company with the forms prescribed by
the Internal Revenue Service of the United States certifying as to such
Bank's status for purposes of determining exemption from United States
withholding taxes with respect to all payments to be made to such Bank
hereunder or other documents satisfactory to the Company which shall
indicate that all payments to be made to such Bank hereunder are not
subject to United States withholding tax or are
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subject to such taxes at a rate reduced to zero by an applicable tax
treaty, neither the Company nor any other Borrower shall have any
obligation under the last sentence of Section 2.18(a) to make any payments
to or for the benefit of such Bank in excess of the amounts otherwise
payable under this Agreement, and
(ii) each Bank organized under the laws of a jurisdiction outside the
jurisdiction where any Borrowing Subsidiary is incorporated shall have
taken all steps prescribed by the applicable governmental authority in the
jurisdiction where such Borrowing Subsidiary is located so that such Bank
is exempt from applicable withholding taxes with respect to all payments to
be made to such Bank hereunder or so that all payments to be made to such
Bank hereunder are not subject to applicable withholding taxes or are
subject to such taxes at a rate reduced to zero by an applicable tax
treaty, neither the Company nor any other Borrower shall have any
obligation under the last sentence of Section 2.18(a) to make any payments
to or for the benefit of such Bank in excess of the amounts otherwise
payable under this Agreement; provided, however, that the applicable
Borrower shall make the payments required by the last sentence of Section
2.18(a) if the obligation to withhold arises from (A) a change in
applicable law after the date hereof in the case of a Bank listed on
Schedule 2.01 hereto (or, with respect to payments to a new Applicable
Lending Office designated pursuant to Section 2.19, after the date such
Bank designates such new Applicable Lending Office), or (B) in the case of
a Bank which became a party to this Agreement pursuant to an Assignment and
Acceptance, after the effective date of such Assignment and Acceptance or
(C) the designation of a Borrowing Subsidiary incorporated or domiciled in
a jurisdiction other than the United States.
Unless the applicable Borrower has received forms or other documents, including
Form 1001, Form 4224 or any other applicable tax forms from the United States or
any other applicable jurisdiction, such forms to be satisfactory to the Company,
indicating that payments hereunder are not subject to any withholding tax or are
subject to such tax at a rate reduced to zero by an applicable tax treaty, the
applicable Borrower shall withhold taxes from such payments at the applicable
statutory rate in the case of payments to or for any Bank organized under the
laws of a jurisdiction outside the United States (or in the case of a Borrowing
Subsidiary incorporated outside the United States, any Bank organized under the
laws outside of the jurisdiction where such Borrowing Subsidiary is
incorporated). Should a Bank become subject to Taxes because of its failure to
deliver a form required hereunder, the Company shall take such steps as the Bank
shall reasonably request to assist the Bank to recover such Taxes; provided,
that the Company shall be reimbursed by such Bank if an expenditure of money is
required.
SECTION 2.19. Mitigation. Any Bank claiming any additional amounts
payable pursuant to Section 2.12 or 2.18 or subject to Section 2.13 shall use
its reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions) to change the jurisdiction of its Applicable Lending
Office if the making of such a change would avoid the need for, or reduce the
amount of, any such additional amounts which may thereafter accrue under
Sections 2.12 or 2.18 or would avoid the unavailability of Eurocurrency Rate
Advances under Section 2.13 and would not, in any such case, in the judgment of
such Bank, be otherwise disadvantageous to such Bank.
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SECTION 2.20. Extension of Termination Date. No later than ninety
(90) days before any or all of the second, third and fourth anniversary dates of
this Agreement, the Company may request a one year extension of the Termination
Date by written notice to the Administrative Agent. The Administrative Agent
shall promptly inform the Banks of any such request, and each Bank shall notify
the Administrative Agent in writing not less than thirty (30) days prior to the
anniversary date following such request as to whether or not it consents to the
requested extension. If any Bank fails to so notify the Administrative Agent,
such Bank shall be deemed to have refused to grant the requested extension and
the Termination Date will remain as then scheduled. Upon receipt by the
Administrative Agent of the written consent of all Banks, the Termination Date
shall be automatically extended one additional year.
ARTICLE III
CONDITIONS PRECEDENT
SECTION 3.01. Conditions Precedent to the Effectiveness of this
Agreement. The effectiveness of this Agreement and the obligation of each Bank
to make any Advance to be made by it on the Effective Date, and the obligation
of the Administrative Agent to issue and each Bank to participate in any Letter
of Credit on the Effective Date, shall be subject to the satisfaction on or
before the Effective Date of all of the following conditions precedent:
(a) The Administrative Agent shall have received:
(i) counterparts of this Agreement, executed by the Company, the
Administrative Agent and each of the Banks;
(ii) a certificate of the Secretary of the Company certifying (A)
copies attached thereto of the resolutions of the Board of Directors
of the Company authorizing the Company's execution, delivery and
performance of this Agreement, and the completion of the Initial
Public Offering and the other transactions contemplated hereby, (B)
copies attached thereto of the Certificate of Incorporation and by-
laws of the Company, and (C) the names and true signatures of the
officers of the Company authorized to sign this Agreement and the
Notes and other documents to be executed and delivered by the Company
hereunder; and
(iii) a Note executed by the Company, payable to each Bank;
(iv) a certificate of a duly authorized officer of the Company,
dated the Effective Date, certifying that as of such date, (A) the
representations and warranties contained in Section 4.01 are correct
on and as of the Effective Date, (B) no Event of Default or Unmatured
Event of Default shall have occurred and be continuing and (C) the
conditions for the Effective Date have been satisfied;
(v) a favorable opinion of Sidley & Austin, counsel for the
Company, substantially in the form of Exhibit F hereto;
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(vi) such information as the Administrative Agent and the Banks
may reasonably request to confirm the tax, legal and business
assumptions made in financial statements attached hereto as Exhibit H;
and
(vii) such other information and documents as may reasonably be
required by the Administrative Agent and the Administrative Agent's
counsel;
(b) The Company shall have paid all accrued fees and expenses of the
Administrative Agent and the Banks which are due and payable on the
Effective Date (including, without limitation, the reasonable fees and
expenses of counsel for the Administrative Agent);
(c) There shall have occurred no material adverse change in the
business, financial condition, operations, properties or performance of the
Company or its Subsidiaries from such business, financial condition,
operations, properties or performance reflected in the Registration
Statement;
(d) No action, suit or proceeding (investigative, judicial or
otherwise) against the Company or any of its Subsidiaries pending before
any court or arbitrator or any governmental body, agency or official shall
exist, or, to the knowledge of any Responsible Officer of the Company, be
threatened, that could reasonably be expected to have a Material Adverse
Effect, and there shall exist no injunction or temporary restraining order
that, in the judgment of the Administrative Agent or the Majority Banks,
would prohibit the Advances hereunder;
(e) The representations and warranties contained in Section 4.01
shall be correct on and as of the Effective Date;
(f) No event shall have occurred and be continuing which constitutes
an Event of Default or Unmatured Event of Default;
(g) The Initial Public Offering shall have been consummated in
accordance with Delaware law and on terms and conditions set forth in the
Registration Statement and the Company shall have received net proceeds of
at least $30,000,000 from the Initial Public Offering;
(h) The Company shall have repaid, or simultaneously with the
consummation of the Initial Public Offering shall pay, all amounts owed to
Donnelley; and
(i) The Company shall have repaid, or simultaneously with the
consummation of the Initial Public Offering shall pay, all amounts owed to
earn-out participants as a result of its previous acquisition of
LANSystems, a Delaware corporation.
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For purposes of determining compliance with the conditions specified
above, each Bank shall be deemed to have consented to, approved and accepted,
and to be satisfied with, each document or other matter required thereunder to
be consented to or approved by or acceptable or satisfactory to the Banks unless
the officer of the Administrative Agent responsible for the transactions
contemplated by this Agreement shall have received notice from such Bank prior
to the proposed Effective Date, as notified by the Administrative Agent to the
Banks, specifying its objection thereto. The Administrative Agent shall
promptly notify the Banks of the occurrence of the Effective Date.
SECTION 3.02. Conditions Precedent to all Advances and Letters of
Credit. The obligation of each Bank to make an Advance requested to be made by
it and of the Administrative Agent to issue any Letter of Credit, on any date,
shall be subject to the following conditions precedent as of such date:
(i) The representations and warranties contained in subsections (a)
through (p) of Section 4.01 are correct on and as of the date of such
Borrowing, before and after giving effect to such Borrowing and to the
application of the proceeds therefrom, as though made on and as of such
date;
(ii) If such Borrower is not the Company, the representations and
warranties set forth in Sections 4.01(a) (except with respect to good
standing, to the extent that such Borrower is not incorporated in the
United States and the jurisdiction in which such Borrower is incorporated
does not recognize the concept of good standing), (b), (c) and (d) of this
Agreement would be true and correct on and as of the date of such Borrowing
if such Borrower were the "Company" and each Note issued by such Borrower
were one of the "Notes" referenced therein; and
(iii) No event has occurred and is continuing, or would result from
such Borrowing or from the application of the proceeds therefrom, which
constitutes an Event of Default or Unmatured Event of Default.
The request by a Borrower for any Advance made, or to be made, or any
Letter of Credit issued, or to be issued, on any Funding Date shall constitute a
representation and warranty by such Borrower as of such Funding Date that all
conditions contained in this Section 3.02 have be satisfied or waived in writing
pursuant to Section 9.01.
SECTION 3.03. Conditions Precedent to Initial Advance to Each
Borrowing Subsidiary. The obligation of each Bank to make its initial Advance
hereunder to any Borrowing Subsidiary is subject to the conditions precedent
that the Administrative Agent shall have received the following:
(a) The Assumption Letter executed and delivered by such Borrowing
Subsidiary and containing the written consent of the Company at the foot
thereof, as contemplated by Section 2.17 hereof;
(b) A Note executed by such Borrowing Subsidiary, payable to each
Bank;
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(c) Certified copies of the resolutions of the Board of Directors of
such Borrowing Subsidiary approving the Assumption Letter and all other
documents evidencing corporate action and governmental approvals, if any,
required with respect thereto;
(d) A certificate of the Secretary or an Assistant Secretary of such
Borrowing Subsidiary, certifying the names and true signatures of the
officers of such Borrowing Subsidiary authorized to sign the Assumption
Letter and the other documents to be executed and delivered by such
Borrowing Subsidiary hereunder;
(e) An opinion of counsel to such Borrowing Subsidiary, substantially
in the form of Exhibit G hereto and as to such other matters as the
Administrative Agent shall reasonably request; and
(f) Such other information and documents as may reasonably be
required by the Administrative Agent and the Administrative Agent's
counsel.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
------------------------------
SECTION 4.01. Representations and Warranties of the Company. The
Company represents and warrants to the Banks as follows:
(a) The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of its state of incorporation.
(b) The execution, delivery and performance by the Company of this
Agreement and the Notes are within the Company's corporate powers, have
been duly authorized by all necessary corporate action, and do not
contravene (i) the Company's certificate of incorporation, as amended, or
by-laws or (ii) any law or contractual restriction binding on or affecting
the Company.
(c) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body is required
for the Company's due execution, delivery and performance of this
Agreement.
(d) This Agreement has been, and each of the Notes when delivered
hereunder will have been, duly executed and delivered by the applicable
Borrower. This Agreement is, and each of the Notes when delivered hereunder
will be, a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with their respective terms, subject to
any applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally and to general
principles of equity.
(e) The pro forma financial statements of the Company and its
Consolidated Subsidiaries set forth in the Registration Statement present,
on a pro
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forma basis, the financial condition of the Company and such Subsidiaries
as of the date thereof, and reflect on a pro forma basis those liabilities
reflected in the notes thereto and resulting from consummation of the
Initial Public Offering and the other transactions contemplated by this
Agreement, and the payment or accrual of all transaction costs payable on
the Effective Date with respect to any of the foregoing. The assumptions
expressed in the pro forma financial statements referenced in this Section
4.01(e) were prepared in good faith and are reasonable based on the
information available to the Company at the time so furnished.
(f) There are no actions, suits or proceedings pending before any
court or arbitrator or any governmental body, agency or official, or, to
the knowledge of any Responsible Officer of the Company, threatened, that
could reasonably be expected to have a Material Adverse Effect.
(g) Neither the Company nor any of its Subsidiaries is principally
engaged in the business of extending credit for the purpose of purchasing
or carrying Margin Stock and no proceeds of any Advance or Letter of Credit
shall be used to purchase or carry Margin Stock.
(h) Following application of the proceeds of each Advance to the
Company, not more than 25% of the value of the assets (either of the
Company only or of the Company and its Consolidated Subsidiaries) will be
Margin Stock subject to any restriction contained in this Agreement or in
any other agreement or instrument between the Company and any Bank or any
affiliate of any Bank relating to Debt within the scope of Section 6.01(e).
(i) The Advances to each Borrower, and all related obligations of
such Borrower under this Agreement, rank pari passu with all other
unsecured indebtedness for money borrowed or raised by such Borrower that
is not, by its terms, expressly subordinated to other such indebtedness of
such Borrower or that is not preferred by law of a jurisdiction other than
the United States.
(j) No Borrower is an "investment company" or a company "controlled"
by an "investment company", within the meaning of the Investment Company
Act of 1940, as amended.
(k) (i) All necessary Environmental Permits have been obtained and
are in effect for the operations and properties of the Company and its
Subsidiaries, and the Company and its Subsidiaries are in compliance with
all such Environmental Permits, except to the extent that the failure to so
obtain or comply could not reasonably be expected to have a Material
Adverse Effect; and (ii) no circumstances exist that could reasonably be
expected to (A) form the basis of an Environmental Action against the
Company or any of its Subsidiaries or any of their properties that could
reasonably be expected to have a Material Adverse Effect or (B) cause any
such property to be subject to any restrictions on ownership, occupancy,
use or transferability under any Environmental Law that could reasonably be
expected to have a Material Adverse Effect.
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(l) None of the properties owned or leased (i) by the Company or any
of its Consolidated Subsidiaries is listed or proposed for listing on the
National Priorities List under CERCLA or (ii) by the Company or any of its
Subsidiaries is the subject of any investigation or cleanup, whether
voluntary or required pursuant to any Environmental Law or ordered by any
governmental authority, that could reasonably be expected to have a
Material Adverse Effect.
(m) Except as set forth on Schedule 4.01(m), no ERISA Event has
occurred or is reasonably expected to occur with respect to any Plan.
(n) Neither the Company nor any of its ERISA Affiliates (i) has
incurred or is reasonably expected to incur any Withdrawal Liability with
respect to any Multiemployer Plan or (ii) has been notified by the sponsor
of a Multiemployer Plan that such Multiemployer Plan is in reorganization
or has been terminated, within the meaning of Title IV of ERISA, and no
such Multiemployer Plan is reasonably expected to be in reorganization or
to be terminated, within the meaning of Title IV of ERISA.
(o) No Plan has incurred any accumulated funding deficiency (as
defined in Sections 302(a)(2) of ERISA and 412(a) of the Internal Revenue
Code) whether or not waived.
(p) The written information, exhibits and reports prepared and
furnished by the Company or any Borrowing Subsidiary to the Administrative
Agent or to any Bank in connection with the negotiation of, or compliance
with, this Agreement, taken as a whole, contained no material misstatement
of fact nor omitted to state a material fact necessary in order to make the
statements contained therein, in light of the circumstances under which
they were made, not misleading (it being understood that the Company does
not warrant the accuracy of any projections provided to the Banks pursuant
hereto or in connection herewith, but the Company warrants that all such
projections have been or will be prepared in good faith and have
represented or will represent a reasonable estimate of the anticipated
financial condition and results of operations for the period(s) in question
based on assumptions which the Company believes (at the time of
preparation) to be reasonable).
(q) As of the Initial Borrowing Date and immediately prior to the
making of the initial Advances:
(i) a true and correct copy of the Registration Statement has
been delivered to the Banks and the Registration Statement is in full
force and effect without amendment or modification and no action has
been taken by any competent authority which restrains, prevents or
imposes any material adverse condition upon the Registration Statement
or the Initial Public Offering;
(ii) the information contained in the Registration Statement does
not contain any untrue statement of a material fact
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or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and
(iii) all conditions precedent to, and all consents necessary to
permit, the Initial Public Offering pursuant to the Registration
Statement have been satisfied (or waived with the prior written
consent of the Administrative Agent and the Banks), and the Initial
Public Offering has been consummated in accordance with the
Registration Statement and any applicable laws.
ARTICLE V
COVENANTS OF THE COMPANY
------------------------
So long as any Advance shall remain unpaid or any Bank shall have any
Commitment hereunder, unless the Majority Banks shall otherwise consent in
writing:
SECTION 5.01. Compliance with Laws, Etc. The Company will comply,
and cause each of its Subsidiaries to comply, in all material respects with all
applicable laws, rules, regulations and orders, except for laws, rules,
regulations and orders the violation of which, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
SECTION 5.02. Reporting Requirements. The Company will furnish to
the Banks:
(a) within 55 days after the end of each of the first three quarters
of each fiscal year of the Company, consolidated unaudited balance sheets
of the Company and its Consolidated Subsidiaries, as at the close of each
such quarter, and consolidated profit and loss and reconciliation of
surplus statements and a statement of cash flows of the Company and its
Consolidated Subsidiaries for the period from the beginning of such fiscal
year to the end of such quarter, certified by the chief financial officer
of the Company on behalf of the Company as fairly presenting the
consolidated financial position of the Company and its Consolidated
Subsidiaries as at the dates indicated and the profit and loss and cash
flows for the periods indicated in accordance with GAAP, subject to normal
year-end adjustments;
(b) within 100 days after the end of each fiscal year of the Company,
an unqualified (except for qualifications relating to changes in accounting
principles or practices reflecting changes in GAAP and required or approved
by the Company's independent public accountants) audit report certified by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co., L.L.P. or other independent public accountants
acceptable to the Majority Banks, prepared in accordance with GAAP on a
consolidated basis for itself and its Consolidated Subsidiaries, including
balance sheets as of the end of such period, related profit and loss and
reconciliation of surplus statements, and a statement of cash flows,
accompanied by a report of said accountants stating that, in connection
with the foregoing, they have obtained no knowledge of any failure of the
Company to comply with the requirements specified in each of Sections 5.10
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through 5.12, or if, in the opinion of such accountants, the Company has
failed to comply with the requirements specified in any such Section,
stating the nature and status of such failure; and (ii) within 180 days
after the close of each of the Company's fiscal years, the management
letter prepared by such accountants in connection with the financial
statements for such fiscal year delivered pursuant to the foregoing clause
(i);
(c) simultaneously with the delivery of the reports referred to in
clauses (a) and (b) above, a certificate of a Responsible Officer of the
Company (A) setting forth in reasonable detail the calculations required to
establish whether the Company was in compliance with the requirements of
Sections 5.10, 5.11 and 5.12 on the date of such financial statements, (B)
stating whether there exists on the date of such certificate any Event of
Default or Unmatured Event of Default and, if any Event of Default or
Unmatured Event of Default then exists, setting forth the details thereof
and the action which the Company is taking with respect thereto and (C)
stating whether the Company has lost any of its top three customers, in
terms of consolidated revenue, during the preceding quarter and setting
forth the details thereof;
(d) promptly after the sending or filing thereof, copies of all
reports which the Company sends to its security holders generally, and at
any time that the Company is obligated to file any report or registration
statement with the Commission or any national securities exchange, copies
of all such reports and registration statements (other than Form S-8 or any
similar form);
(e) promptly following any Responsible Officer's knowledge thereof,
notice in writing of (i) the occurrence of any Event of Default or
Unmatured Event of Default, setting forth the details thereof and the
action which the Company is taking with respect thereto, or (ii) the
institution of, or any adverse judgment in, any litigation, arbitration
proceeding or governmental proceeding which, in the Company's judgment, if
adversely determined, could reasonably be expected to have a Material
Adverse Effect;
(f) promptly following any Responsible Officer's knowledge thereof,
notice in writing of the institution of any steps by the Company or any
other Person to terminate a Plan or of the failure to make a required
contribution to a Plan if such failure is sufficient to give rise to a Lien
under Section 302(f)(1) of ERISA; and
(g) such other pertinent information as any Bank may reasonably
request.
SECTION 5.03. Use of Proceeds. The Borrowers will use the proceeds
of the Advances and Letters of Credit under this Agreement only for general
corporate purposes otherwise permitted under this Agreement, including, without
limitation, working capital needs and acquisitions. The Borrowers further agree
that no proceeds of any Advance shall be used to purchase or carry Margin Stock.
SECTION 5.04. Limitation on Liens, Etc. The Company will not create
or suffer to exist, or permit any of its Consolidated Subsidiaries to create or
suffer to exist, any Lien upon
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or with respect to any of its properties, whether now owned or hereafter
acquired, or assign, or permit any of its Consolidated Subsidiaries to assign,
any right to receive income other than:
(a) Liens on assets of a Subsidiary of a Borrower to secure Debt of
such Subsidiary to such Borrower;
(b) Purchase money Liens claimed by sellers of goods on ordinary
trade terms; provided, that such Liens (i) shall not extend to assets of
any character other than the goods being acquired and (ii) shall not secure
Debt exceeding, in the aggregate, the greater of $3,000,000 or 5% of
Consolidated Net Worth;
(c) Liens securing Debt on property of a corporation or firm (or
division thereof) that becomes a Subsidiary of the Company or of any of its
Subsidiaries after the date hereof in accordance with Section 5.05 and
existing at the time such corporation is merged or consolidated with the
Company or any Subsidiary, at the time such corporation or firm (or
division thereof) becomes a Subsidiary of the Company or any of its
Subsidiaries, or at the time of a sale, lease or other disposition of the
properties of a corporation or a firm (or division thereof) as an entirety
or substantially as an entirety to the Company or a Subsidiary, provided
that such Liens were not created in contemplation of such merger,
consolidation, acquisition, sale, lease or disposition and do not extend to
assets other than those of the Person merged into or consolidated with the
Company or such Subsidiary or acquired by the Company or such Subsidiary;
(d) Purchase money Liens constituting the interest of a lessor under
a lease that would be capitalized on the lessee's balance sheet in
accordance with GAAP, or under a sale-leaseback transaction, in each case
relating to equipment, provided that after giving effect thereto, no Event
of Default under Section 5.10 shall exist;
(e) Liens (other than Environmental Liens, federal tax Liens and
Liens imposed under ERISA) for taxes, assessments or governmental charges
or levies on its property if the same shall not at the time be delinquent
or thereafter can be paid without penalty, or are being contested in good
faith and by appropriate proceedings and for which adequate reserves in
accordance with generally accepted principles of accounting shall have been
set aside on its books;
(f) Liens imposed by law, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the ordinary course of
business (other than Environmental Liens, federal tax Liens, Liens imposed
under ERISA and judgment Liens) which secure payment of obligations not
more than 60 days past due or which are being contested in good faith by
appropriate proceedings and for which adequate reserves shall have been set
aside on its books;
(g) Liens (other than Liens imposed under ERISA) arising out of
pledges or deposits under worker's compensation laws, unemployment
insurance, old age pensions, or other social security or retirement
benefits, or similar legislation;
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(h) Utility easements, building restrictions and such other
encumbrances or charges against real property as are of a nature generally
existing with respect to properties of a similar character and which do not
in any material way affect the marketability of the same or interfere with
the use thereof in the business of the Company or its Consolidated
Subsidiaries;
(i) 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;
(j) Any extension, renewal or replacement (or successive extensions,
renewals or replacements) in whole or in part of any Liens referred to in
the foregoing subsections (a) through (i); provided, that, in the case of
Liens referred to in the foregoing subsections (b), (c) and (d), the
principal amount of Debt secured thereby shall not exceed the principal
amount of Debt so secured at the time of such extension, renewal or
replacement, and that such extension, renewal or replacement Lien shall be
limited to all or a part of the property which is subject to the Lien so
extended, renewed or replaced (plus improvements on such property); and
(k) Additional Liens securing Debt other than as may be included in
the foregoing subsections (a) through (d) and (j); provided, that the
aggregate outstanding principal amount of such Debt shall not at any time
exceed 5% of Consolidated Net Worth at such time.
SECTION 5.05. Mergers, Consolidations, Sales of Assets and
Acquisitions. The Company will not, and will not permit its Material
Subsidiaries to, merge into or consolidate with any other Person, or permit any
other Person to merge into or consolidate with it, or sell, transfer, assign,
lease, sublease, or otherwise dispose of (in one transaction or in a series of
transactions) all or any substantial part of any asset (whether now owned or
hereafter acquired) or any capital stock of any Subsidiary, and the Company will
not, and will not permit any Subsidiary to, purchase, lease or otherwise acquire
(in one transaction or a series of transactions) all or any substantial part (to
the extent such assets constitute one or more distinct business units or
operations) of the assets of any other Person, except that:
(a) the Company or a Material Subsidiary may acquire another
corporation by merger, provided that, if the Company is a party to such
merger, the Company is the surviving corporation, and provided further that
after giving effect to such merger, no Event of Default or Unmatured Event
of Default shall exist;
(b) any Material Subsidiary may merge or consolidate with or into, or
sell or otherwise dispose of any or all of its assets to, the Company or
another Subsidiary, and any Material Subsidiary that is not a Borrowing
Subsidiary may sell all or substantially all of its assets; provided that
(i) after giving effect to such merger, consolidation, sale or other
disposition, no Event of Default or Unmatured Event of Default shall exist,
and (ii) in the case of an asset sale by such a Material Subsidiary, the
assets to be sold do not constitute a material amount of the assets of the
Company and its Subsidiaries, taken as a whole; and
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(c) the Company or any Subsidiary may acquire the assets or equity
securities of any Person (an "Acquisition"), so long as:
(i) such Acquisition has been approved by the board of
directors (or equivalent) or shareholders (or equivalent) of such
Person;
(ii) such assets are used in, or the Person acquired is in, the
same business as the Company or such Subsidiary or a related line of
business; and
(ii) if the purchase price (including all cash paid, notes
issued and indebtedness assumed in connection therewith) of such
Acquisition is over $5,000,000, the Company has delivered to the
Administrative Agent, at least ten (10) Business Days before the
closing of such acquisition, (A) historical or pro forma financial
statements for such Person for its last two fiscal years, if
available, and (B) financial projections for the Company and its
Consolidated Subsidiaries, giving effect to such Acquisition, covering
the period from the date of such Acquisition through the Termination
Date then in effect.
For purposes of this Section 5.05, "a material amount" of assets shall
mean assets (A) constituting 10% or more of the consolidated assets of the
Company and its Consolidated Subsidiaries, or (B) generating 10% or more of the
consolidated revenue of the Company and its Consolidated Subsidiaries in any
fiscal year.
SECTION 5.06. Books and Records; Inspection. The Company will, and
will cause each of its Subsidiaries to, (a) maintain complete and accurate books
and records, in which full and correct entries shall be made of all financial
transactions of the Company and each such Subsidiary in accordance with
generally accepted accounting principles, and (b) permit any Bank, the
Administrative Agent and their respective employees and agents, at such
reasonable times during normal business hours and as often as may be reasonably
requested, to inspect any of the properties of the Company or any of its
Subsidiaries and to inspect and make copies of the material books and records of
the Company and its Subsidiaries and to discuss the affairs and finances of the
Company and its Subsidiaries with their officers; provided, that such Bank or
the Administrative Agent shall have delivered a written request for such
inspection to the Company prior to the date of any such inspection.
SECTION 5.07. Corporate Existence; Maintenance of Rights and
Permits. Subject to the Company's rights under Section 5.05, the Company will,
and will cause each of its Material Subsidiaries to, at all times maintain its
corporate existence and preserve and keep, or cause to be preserved and kept, in
full force and effect its rights and franchises material to its businesses and
all licenses, permits, governmental approvals and authorizations, except to the
extent that the failure to do so would not have a Material Adverse Effect,
either individually or in the aggregate.
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SECTION 5.08. Conduct of Business. The Company shall not, and shall
not permit any Material Subsidiary to, engage in any line of business other than
(a) the businesses engaged in by the Company and its Subsidiaries on the date
hereof and (b) any business or activities substantially similar or related
thereto (which shall include, without limitation, other businesses related to
the provision of integrated information management services).
SECTION 5.09. Payment of Taxes. The Company will pay and discharge,
and cause each of its Material Subsidiaries to pay and discharge, before the
same shall become delinquent, all material taxes, assessments and governmental
charges or levies imposed upon it or its property; provided, however, that
neither the Company nor any of its Material Subsidiaries shall be required to
pay or discharge any such tax, assessment, charge or levy that is being
contested in good faith and by proper proceedings and as to which appropriate
reserves are being maintained in accordance with GAAP, as long as no action has
been commenced to enforce any Lien securing any such tax, assessment, charge or
levy.
SECTION 5.10. Funded Debt to Cash Flow Ratio. The Company will, as
of the end of each fiscal quarter beginning December 31, 1996, maintain a Funded
Debt to Cash Flow Ratio of not more than 2.5 to 1.
SECTION 5.11. Net Worth. The Company will, as of the end of each
fiscal quarter beginning December 31, 1996, maintain Consolidated Net Worth of
not less than the sum of:
(a) 80% of Consolidated Net Worth on the Effective Date (after the
consummation of the Initial Public Offering); plus
(b) 50% of Consolidated Net Income for each fiscal quarter commencing
from and after January 1, 1997 in which Consolidated Net Income is greater
than $0.
SECTION 5.12. Fixed Charge Coverage. The Company will, as of the
end of each fiscal quarter, maintain a Fixed Charge Coverage Ratio of not less
than 1.5 to 1.
SECTION 5.13. Indebtedness of Subsidiaries. The Company will not
permit any Material Subsidiary to create, incur or suffer to exist any Debt,
except:
(a) Debt incurred under this Agreement;
(b) Capitalized Leases existing as of the Effective Date, which
Capitalized Leases are described on Schedule 5.13 hereof, and any
extension, renewal or replacement (or successive extensions, renewals or
replacements) thereof in whole or in part; provided that the principal
amount of Capitalized Lease Obligations for any such extension, renewal or
replacement shall not exceed the principal amount of Capitalized Lease
Obligations at the time of such extension, renewal or replacement, and that
the property subject to such extended, renewed or replaced Capitalized
Lease shall be limited to all or a part of the property which is subject to
the Capitalized Lease so extended, renewed or replaced (plus improvements
on such property); and
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(c) additional Debt having an aggregate outstanding principal balance
of not more than $15,000,000 at any one time.
SECTION 5.14. Maintenance of Properties. The Company will, and will
cause each Material Subsidiary to, do all things necessary to maintain,
preserve, protect and keep its property in good repair, working order and
condition, ordinary wear and tear excepted, and make all necessary and proper
repairs, renewals and replacements so that its business carried on in connection
therewith may be properly conducted at all times.
SECTION 5.15. Insurance. The Company will, and will cause each
Material Subsidiary to, maintain with financially sound and reputable insurance
companies insurance in such amounts and covering such risks as is consistent
with sound business practice, and the Company will furnish to any Bank upon
request full information as to the insurance carried.
SECTION 5.16. Transactions with Affiliates. Other than the Tax
Allocation and Indemnification Agreement, the Benefit Administration Services
Agreement, and the Transition Services Agreement (collectively, the "Donnelley
Agreements") and except for transactions between the Company and its Wholly-
Owned Subsidiaries, the Company will not, and will not permit any Material
Subsidiary to, enter into any transaction (including, without limitation, the
purchase or sale of any property or service) with, or make any payment or
transfer to, any Affiliate the financial statements of which would not be
consolidated with those of the Company in accordance with GAAP, except in the
ordinary course of business and pursuant to the reasonable requirements of the
Company's or such Material Subsidiary's business and upon fair and reasonable
terms no less favorable to the Company or such Material Subsidiary than the
Company or such Material Subsidiary would obtain in a comparable arms-length
transaction.
SECTION 5.17. Investments. The Company will not, nor will it permit
any Material Subsidiary to, make or suffer to exist any Investments (including,
without limitation, loans and advances to, and other Investments in,
Subsidiaries), or commitments therefor, or to create any Subsidiary or to become
or remain a partner in any partnership or joint venture, except:
(a) Short-term obligations of, or fully guaranteed by, the United
States of America.
(b) Commercial paper rated A-1 or better by Standard & Poor's. or P-1
or better by ▇▇▇▇▇'▇.
(c) Demand deposit accounts maintained in the ordinary course of
business.
(d) Certificates of deposit issued by and time deposits with
commercial banks (whether domestic or foreign) having capital and surplus
in excess of $100,000,000.
(e) Investments in Subsidiaries.
(f) Investments in connection with any acquisition permitted by
Section 5.05.
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(g) Other Investments (i) in existence on the date hereof and
described in Schedule 5.17 hereto or (ii) which in the aggregate are less
than 10% of Consolidated Net Worth at any time.
SECTION 5.18. Environmental Liabilities. No Borrower shall, and the
Company shall not permit any of its Subsidiaries to, become subject to any
Liabilities and Costs which could reasonably be expected to have a Material
Adverse Effect and which arise out of or are related to (a) the Release or
threatened Release at any location of any Contaminant into the environment, or
any Remedial Action in response thereto, or (b) any violation of any
environmental, health and safety Requirements of Law.
SECTION 5.19. Dividends. The Company shall not declare or pay any
dividends on or make any other distributions in respect of any class or series
of capital stock (other than dividends payable solely in its capital stock),
except dividends to the extent that, had such dividends, together with all other
dividends declared during the applicable "Dividend Period" (as defined below),
been added, on a pro forma basis, to the denominator of the Fixed Charge
Coverage Ratio as of the end of the immediately-preceding fiscal quarter, such
Fixed Charge Coverage Ratio would not have been less than the required Fixed
Charge Coverage Ratio for such fiscal quarter set forth in Section 5.12.
"Dividend Period" shall mean, at any time, the period of four fiscal quarters
then most recently ended or, prior to December 31, 1997, the period from the
Effective Date to the end of the most recently ended fiscal quarter.
SECTION 5.20. Certain Agreements. The Company will not terminate
prior to the scheduled termination thereof, amend or modify or permit any such
early termination, amendment or modification of any of the Donnelley Agreements
that could reasonably be expected to be adverse to the Banks without the consent
of the Majority Banks.
SECTION 5.21. Non-Material Subsidiaries. The Company shall not
permit all Subsidiaries which are not Material Subsidiaries, collectively, to
(i) own assets comprising in excess of 25% of all of the consolidated assets of
the Company and its Subsidiaries or (ii) generate revenues for the four fiscal
quarters most recently ended in excess of 25% of the consolidated revenues of
the Company and its Subsidiaries for such period; provided that, prior to
December 31, 1997, clause (ii) of this Section 5.21 shall be determined for the
period from the Effective Date to the fiscal quarter most recently ended before
the date of determination.
ARTICLE VI
EVENTS OF DEFAULT
-----------------
SECTION 6.01. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
(a) A Borrower shall fail to pay when due any installment of
principal of any Advance; or
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(b) A Borrower shall fail to pay any fee under this Agreement, or any
installment of interest on any Advance, within ten (10) days after the due
date thereof; or
(c) Any written representation or warranty made by a Borrower herein
or in connection with this Agreement shall prove to have been incorrect in
any material respect when made; or
(d) The Company shall fail to perform or observe (i) any term,
covenant or agreement contained in Section 5.02(a), (b) or (e), 5.03, 5.04,
5.05, 5.08, 5.09, 5.10, 5.11, 5.12, 5.13, 5.16, 5.17, 5.18, or 5.19 or
(ii) any other term, covenant or agreement contained in this Agreement,
other than in (a) or (b) above, on its part to be performed or observed if
such failure shall remain unremedied for 30 days after written notice
thereof shall have been given to the Company by the Majority Banks through
the Administrative Agent; or
(e) The Company or any Material Subsidiary shall fail to pay any
principal of or premium or interest on any Debt, or any obligations in
respect of acceptances, letters of credit or other similar instruments, of
the Company or such Material Subsidiary which is outstanding in a principal
amount of at least $2,000,000 in the aggregate (but excluding Debt arising
under this Agreement), when the same becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or
otherwise), and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to such
Debt or other obligation; or any other event shall occur or condition shall
exist under any agreement or instrument relating to any such Debt or other
obligation and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such event or
condition is to accelerate, or permit the acceleration of, the maturity of
such Debt or other obligation; or any Debt or other such obligation in
which the outstanding principal exceeds $2,000,000 shall be otherwise
declared to be due and payable (by acceleration or otherwise) or required
to be prepaid, redeemed, defeased or otherwise repurchased by the Company
or any Material Subsidiary (other than by a regularly-scheduled required
prepayment), or any offer to prepay, redeem, defease or purchase such Debt
shall be required to be made, prior to the stated maturity thereof; or
(f) The Company or any Material Subsidiary shall generally not pay
its debts as such debts become due, or shall admit in writing its inability
to pay its debts generally, or shall make a general assignment for the
benefit of creditors; or any proceeding shall be instituted by or against
the Company or any Material Subsidiary seeking to adjudicate it a bankrupt
or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its
debts under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, or other similar official for it or for
any substantial part of its property, and in the event of any such
proceeding instituted against the Company or any Material Subsidiary (but
not instituted by it), such
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proceeding shall remain undismissed or unstayed for a period of 60 days or
shall result in the entry of an order for relief, the appointment of a
trustee or receiver, or other action in such proceeding or result adverse
to the Company or such Material Subsidiary, as applicable, or the Company
or any Material Subsidiary shall take any corporate action to authorize any
of the actions set forth above in this subsection (f); or
(g) (i) The filing of a notice of intent to terminate a Plan or the
institution by the PBGC of proceedings to terminate, or appoint a trustee
to administer, a Plan if as a result thereof the Company is reasonably
likely to incur liability in excess of $2,000,000; (ii) a contribution
failure occurs with respect to a Plan sufficient to give rise to a Lien
under Section 302(f)(1) of ERISA; or (iii) the partial or complete
withdrawal of the Company or any of its ERISA Affiliates from a
Multiemployer Plan or the reorganization or termination of a Multiemployer
Plan if as a result thereof the Company is reasonably likely to incur
liability in excess of $2,000,000; or
(h) One or more final judgments or orders for the payment of money,
in an aggregate amount exceeding $2,000,000 at any one time outstanding
(exclusive of judgment amounts fully covered by insurance, to the extent
the insurer has admitted liability in respect thereof), shall be rendered
against the Company or any Material Subsidiary and either (i) enforcement
proceedings shall have been commenced by any creditor upon such judgment or
order, or (ii) such judgments or orders shall not be discharged (or
provision shall not have been made for such discharge), a stay of execution
thereof shall not be obtained, or such judgments or orders shall not be
paid or bonded, within 30 days from the date of entry thereof, and the
Company or such Material Subsidiary, as the case may be, shall not, within
such 30-day period, appeal therefrom and cause the execution thereof to be
stayed pending such appeal; or
(i) The Company's guaranty obligations under Article VII hereof for
any reason, other than acts or omissions of the Banks, cease to be in full
force and effect or are declared to be null and void; or the Company denies
that it has any further liability with respect thereto or gives notice to
such effect;
then, and in any such event, the Administrative Agent shall at the request, or
may with the consent, of the Majority Banks, by notice to the Company, (i)
declare the obligation of each Bank to make Advances to any Borrower to be
terminated, whereupon the same shall forthwith terminate, and/or (ii) declare
the Notes, all interest thereon and all other amounts payable under this
Agreement (including, without limitation, all Reimbursement Obligations) to be
forthwith due and payable, whereupon the Notes, all such interest and all such
amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by the Company; provided, however, that in the event of an actual or
deemed entry of an order for relief with respect to the Company under the
Federal Bankruptcy Code, (A) the obligation of each Bank to make Advances to any
Borrower, and the Administrative Agent's obligations to issue Letters of Credit,
shall automatically be terminated and (B) the Notes, all such interest and all
such amounts shall automatically become and be due and
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payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Company.
SECTION 6.02. Collateral for Undrawn Letters of Credit. (a) If the
payment or prepayment of the amount available for drawing under any or all
outstanding Letters of Credit is required under Section 6.01 above, the Company
shall forthwith pay the amount required to be so prepaid, to be held by the
Administrative Agent as provided in subsection (b) below.
(b) All amounts prepaid pursuant to subsection (a) above shall be
held by the Administrative Agent in a separate collateral account (such account,
and the credit balances, properties and any investments from time to time held
therein, and any substitutions for such account, any certificate of deposit or
other instrument evidencing any of the foregoing and all proceeds of and
earnings on any of the foregoing being collectively called the "Account") as
security for, and for application by the Administrative Agent (to the extent
available) to, the reimbursement of any payment under any Letter of Credit then
or thereafter made by the Administrative Agent, and to the payment of the unpaid
balance of any Advances and all other amounts owing hereunder. The Account
shall be held in the name of and subject to the exclusive dominion and control
of the Administrative Agent for the benefit of the Administrative Agent and the
Banks. If and when requested by the Company, the Administrative Agent shall
invest funds held in the Account from time to time in direct obligations of, or
obligations the principal of and interest on which are unconditionally
guaranteed by, the United States of America with a remaining maturity of one
year or less, provided that the Administrative Agent is irrevocably authorized
to sell investments held in the Account when and as required to make payments
out of the Account for application to amounts due and owing from the Company to
the Administrative Agent or Banks; provided, however, that if (i) the Company
shall have made payment of all such obligations referred to in subsection (a)
above and (ii) no Letters of Credit, Commitments, Advances, or other amounts
owing hereunder remain outstanding, then the Administrative Agent shall repay to
the Company any remaining amounts held in the Account.
ARTICLE VII
GUARANTEE
---------
SECTION 7.01. Unconditional Guarantee. For valuable consideration,
receipt whereof is hereby acknowledged, and to induce the Banks to make Advances
to each of the Borrowing Subsidiaries, the Company hereby unconditionally
guarantees to the Banks and the Administrative Agent that the principal of and
interest on each Advance and all other amounts payable by each Borrowing
Subsidiary hereunder shall be promptly paid in full when due (whether at stated
maturity, by acceleration or otherwise) in accordance with the terms hereof and
thereof, and, in the case of any extension of time of payment, in whole or in
part, that all such amounts shall be promptly paid when due (whether at stated
maturity, by acceleration or otherwise) in accordance with the terms of such
extension. In addition, the Company hereby unconditionally agrees that upon
default in the payment when due (whether at stated maturity, by acceleration or
otherwise) of any of such principal, interest or other amounts, the Company
shall forthwith pay the same. Without limiting the generality of the foregoing,
the Company's liability shall extend to all amounts that constitute part of the
obligations of any Borrowing Subsidiary hereunder or under any Note and that
would be owed by such Borrowing Subsidiary to any Bank or the
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Administrative Agent under this Agreement or the Notes but for the fact that
they are unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving such Borrower.
SECTION 7.02. Validity. The obligations of the Company under this
Article VII are independent of the obligations of the Borrowing Subsidiaries
guaranteed hereunder, and a separate action or actions may be brought and
prosecuted against the Company to enforce its obligations under this Article
VII, irrespective of whether any action is brought against any Borrowing
Subsidiary or whether any Borrowing Subsidiary is joined in any such action or
actions. The obligations of the Company under this Article VII shall be
unconditional irrespective of (a) the genuineness, validity, regularity or
enforceability of the obligations of the Borrowing Subsidiaries under this
Agreement, any Note or any Assumption Letter, (b) any law, regulation or order
of any jurisdiction affecting any term of any obligation of any Borrowing
Subsidiary under this Agreement or the rights of any Bank or the Administrative
Agent with respect thereto, (c) any change in the time, manner or place of
payment of, or in any other term of, all or any of the obligations of any
Borrowing Subsidiary, or any other amendment or waiver of or any consent to
departure from this Agreement or the Notes, (d) any change, restructuring or
termination of the corporate structure or existence of any Borrowing Subsidiary,
or (e) to the fullest extent permitted by applicable law, any other circumstance
which might otherwise constitute a legal or equitable discharge of a surety or
guarantor.
SECTION 7.03. Waivers. The Company hereby expressly waives
promptness, diligence, presentment, protest and any other notice with respect to
the obligations of the Company under this Article VII and any requirement that
any right or power be exhausted or any action be taken against any Borrowing
Subsidiary and all notices and demands whatsoever.
SECTION 7.04. Subrogation. The Company shall be subrogated to the
rights of the Banks or the Administrative Agent against any Borrowing Subsidiary
hereunder only after the Banks and the Administrative Agent shall have been paid
in full all amounts, with interest thereon, for which such Borrowing Subsidiary
shall have become indebted hereunder.
SECTION 7.05. Acceleration. The Company agrees that, as between it,
on the one hand, and the Banks and the Administrative Agent, on the other hand,
the obligations of each Borrowing Subsidiary guaranteed by it under this Article
VII may be declared to be forthwith due and payable, or may be deemed
automatically to have been accelerated, as provided in Section 6.01 hereof for
purposes of this Article VII, notwithstanding any stay, injunction or other
prohibition (whether in a bankruptcy proceeding affecting such Borrowing
Subsidiary or otherwise) preventing such declaration as against such Borrowing
Subsidiary and that, in the event of such declaration or automatic acceleration,
such obligations (whether or not due and payable by such Borrowing Subsidiary)
shall forthwith become due and payable by the Company for purposes of this
Article VII.
SECTION 7.06. Reinstatement. The Company's obligations under this
Article VII shall be reinstated if at any time any payment received by any Bank
or the Administrative Agent from any Borrowing Subsidiary hereunder is required
to be repaid or returned by such Bank or the Administrative Agent, all as though
such payment had not been made.
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SECTION 7.07. Continuing Guaranty; Assignments. This guarantee of
the Company shall (a) remain in full force and effect until the later of (i) the
cash payment in full of the obligations of all Borrowing Subsidiaries guaranteed
under this Article VII and (ii) the Termination Date, (b) be binding upon the
Company, its successors and assigns and (c) inure to the benefit of, and be
enforceable by, the Banks and the Administrative Agent and their successors,
transferees and assigns (provided that the applicable transfers and assignments
are made in accordance with the terms of this Agreement).
ARTICLE VIII
THE ADMINISTRATIVE AGENT
------------------------
SECTION 8.01. Appointment; Nature of Relationship. ▇▇▇▇▇▇ Bank is
hereby appointed by the Banks as the Administrative Agent hereunder, and each of
the Banks irrevocably authorizes the Administrative Agent to act as the
contractual representative of such Bank with the rights and duties expressly set
forth herein. The Administrative Agent agrees to act as such contractual
representative upon the express conditions contained in this Article VIII.
Notwithstanding the use of the defined term "Administrative Agent," it is
expressly understood and agreed that the Administrative Agent shall not have any
fiduciary responsibilities to any Bank by reason of this Agreement and that the
Administrative Agent is merely acting as the representative of the Banks with
only those duties as are expressly set forth in this Agreement. In its capacity
as the Banks' contractual representative, the Administrative Agent (a) does not
hereby assume any fiduciary duties to any of the Banks, (b) is a
"representative" of the Banks within the meaning of Section 9-105 of the Uniform
Commercial Code and (c) is acting as an independent contractor, the rights and
duties of which are limited to those expressly set forth in this Agreement.
Each of the Banks hereby agrees to assert no claim against the Administrative
Agent on any agency theory or any other theory of liability for breach of
fiduciary duty, all of which claims each Bank hereby waives.
SECTION 8.02. Actions by the Administrative Agent. As to any
matters not expressly provided for by this Agreement (including, without
limitation, enforcement or collection of the Notes), the Administrative Agent
shall not be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Majority Banks,
and such instructions shall be binding upon all Banks and all holders of the
Notes; provided, however, that the Administrative Agent shall not be required to
take any action which exposes the Administrative Agent to personal liability or
which is contrary to this Agreement or applicable law. The Administrative Agent
agrees to give to each Bank prompt notice of each notice given to it by any
Borrower pursuant to the terms of this Agreement. The Administrative Agent may
execute any of its duties as Administrative Agent hereunder and under any other
instrument, document or agreement executed in connection herewith by or through
employees, agents, and attorney-in-fact and shall not be answerable to the
Banks, except as to money or securities received by it or its authorized agents,
for the default or misconduct of any such agents or attorneys-in-fact selected
by it with reasonable care. Each such agent shall be entitled to all of the
rights and benefits granted to the Administrative Agent hereunder, and each Bank
shall treat any notice given by any such agent as if it had been given directly
by the Administrative Agent. The Administrative Agent shall be entitled to
advice of counsel concerning the contractual
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arrangement between the Administrative Agent and the Banks and all matters
pertaining to the Administrative Agent's duties hereunder.
SECTION 8.03. Administrative Agent's Reliance, Etc. Neither the
Administrative Agent nor any of its directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken by it or them under
or in connection with this Agreement, except for its or their own gross
negligence or willful misconduct. Without limiting the generality of the
foregoing, the Administrative Agent:
(a) may treat the payee of any Note as the holder thereof until the
Administrative Agent receives and accepts an Assignment and Acceptance
entered into by the Bank that is the payee of such Note, as assignor, and
an Eligible Assignee, as assignee, as provided in Section 9.07;
(b) may consult with legal counsel (including counsel for any
Borrower), independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants or
experts;
(c) makes no warranty or representation to any Bank and shall not be
responsible to any Bank for any statements, warranties or representations
(whether written or oral) made in or in connection with this Agreement;
(d) shall have no duty to ascertain, inquire into or verify the
performance or observance of any of the terms, covenants or conditions of
this Agreement on the part of any Borrower, the satisfaction of any
condition specified in Article III, except receipt of items required to be
delivered solely to the Administrative Agent, or the existence or possible
existence of any Event of Default;
(e) shall have no duty to inspect the property (including the books
and records) of any Borrower;
(f) shall not be responsible to any Bank for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of
this Agreement or any other instrument or document furnished pursuant
hereto;
(g) shall incur no liability under or in respect of this Agreement by
acting upon any notice, consent, certificate or other instrument or writing
(which may be by telegram) believed by it to be genuine and signed or sent
by the proper party or parties.
The Administrative Agent shall not be responsible to any Bank for any recitals,
statements, representations or warranties herein or for the perfection or
priority of any Lien on any collateral, if any such Lien is ever granted.
SECTION 8.04. The Administrative Agent and Affiliates. With respect
to any financial institution which shall become the Administrative Agent
hereunder, and with respect to such financial institution's Commitment and the
Advances made by it and Letters of Credit issued
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by it, such financial institution shall have the same rights and powers under
this Agreement as any other Bank and may exercise the same as though it were not
the Administrative Agent; and the term "Bank" or "Banks" shall, unless otherwise
expressly indicated, include such financial institution in its individual
capacity, if applicable. Each such financial institution and its affiliates may
accept deposits from, lend money to, act as trustee under indentures of, and
generally engage in any kind of business with, any Borrower, any of their
respective Subsidiaries and any Person who may do business with or own
securities of any Borrower or any such Subsidiary, all as if such financial
institution were not the Administrative Agent and without any duty to account
therefor to the Banks.
SECTION 8.05. Bank Credit Decision. Each Bank acknowledges that it
has, independently and without reliance upon the Administrative Agent or any
other Bank and based on the financial statements referred to in Section 4.01 and
such other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement.
SECTION 8.06. Indemnification. The Banks agree to indemnify the
Administrative Agent (to the extent not reimbursed by the Borrowers), ratably
according to the respective principal amounts of the Notes held by each of them
(or, if no Notes are outstanding at the time or if any Notes are held by Persons
that are not Banks, ratably according to the respective amounts of their
Commitments) from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by, or
asserted against the Administrative Agent in any way relating to or arising out
of this Agreement or any action taken or omitted by the Administrative Agent
under this Agreement; provided, that no Bank shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Administrative
Agent's gross negligence or willful misconduct. Without limiting the foregoing,
each Bank agrees to reimburse the Administrative Agent promptly upon demand for
its ratable share of any out-of-pocket expenses (including counsel fees)
incurred by the Administrative Agent in connection with the administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, to the extent that the Administrative
Agent is not reimbursed for such expenses by the Borrowers.
SECTION 8.07. Successor Administrative Agent. The Administrative
Agent may resign at any time by giving written notice thereof to the Banks and
the Company. Upon any such resignation, the Majority Banks shall have the right
to appoint a successor Administrative Agent, which shall be another Bank or, if
acceptable to the Company, any other commercial bank organized under the laws of
the United States of America or of any State thereof and having a combined
capital and surplus of at least $500,000,000. If no successor Administrative
Agent shall have been so appointed by the Majority Banks, and shall have
accepted such appointment, within 30 days after the retiring Administrative
Agent gives notice of resignation, then the retiring Administrative Agent may,
on behalf of the Banks, appoint a successor Administrative Agent, which shall be
a commercial bank organized under the laws of the United States of America or of
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any State thereof and having a combined capital and surplus of at least
$500,000,000 and be otherwise acceptable to the Company. Upon the acceptance of
any appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations under this Agreement. After any retiring
Administrative Agent's resignation hereunder as Administrative Agent, the
provisions of this Article VIII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent.
ARTICLE IX
MISCELLANEOUS
-------------
SECTION 9.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Notes, nor any consent to any departure by
any Borrower therefrom, shall in any event be effective unless the same shall be
in writing and signed by the Majority Banks, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that no amendment, waiver or consent shall,
unless in writing and signed by each Bank affected thereby, directly do any of
the following:
(a) waive any of the conditions specified in Section 3.01 or 3.03;
(b) increase the Commitment of such Bank or subject such Bank to any
additional obligations;
(c) reduce the principal of, or the stated rate at which interest
accrues on, the Notes or reduce the stated rate at which the Commitment Fee
is calculated;
(d) postpone any date fixed for any payment of principal of, or
interest on, the Advances or any fees or other amounts payable hereunder;
(e) change the percentage of the Commitments, or of the aggregate
unpaid principal amount of the Notes, which shall be required for the Banks
or any of them to take any action hereunder; or
(f) amend this Section 9.01 or Article VII;
provided, further, that no amendment, waiver or consent shall, unless in writing
and signed by the Administrative Agent in addition to the Banks required above
to take such action, affect the rights or duties of the Administrative Agent
under this Agreement or any Note.
SECTION 9.02. Notices, Etc. (a) All notices and other
communications provided for hereunder shall be in writing (including telecopy
communication) and mailed, telecopied or delivered,
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(i) if to the Company, at its address at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Chief Financial Officer,
telecopy number (▇▇▇) ▇▇▇-▇▇▇▇, with a copy to the Chief Executive Officer,
telecopy number (▇▇▇) ▇▇▇-▇▇▇▇;
(ii) if to any Borrowing Subsidiary, at the address specified in the
Assumption Letter pursuant to which it became a Borrowing Subsidiary, as
applicable, with a copy to the Company at the address specified herein;
provided, that any such notice may be given solely to the Company, at the
option of the party giving such notice;
(iii) if to any Bank listed on the signature pages hereof, at its
Domestic Lending Office specified opposite its name on Schedule 2.01
hereto;
(iv) if to any other Bank, at its Domestic Lending Office specified in
the Assignment and Acceptance pursuant to which it became a Bank;
(v) if to the Administrative Agent, at the Domestic Lending Office
specified opposite its name on Schedule 2.01 hereto;
or as to the Borrowers and the Administrative Agent, at such other address as
shall be designated by such party in a written notice to the other parties, and
as to each such other party, at such other address as shall be designated by
such party in a written notice to the Company and the Administrative Agent. All
such notices and communications shall, when sent by overnight courier, mailed or
telecopied, be effective when delivered to such courier, deposited in the mails
or telecopied and confirmed by return telecopy, respectively, except that
notices and communications to the Administrative Agent pursuant to Articles II,
III and VIII and notices of the occurrence of an Event of Default or Unmatured
Event of Default shall not be effective until received by the Administrative
Agent.
(b) If any notice required under this Agreement is permitted to be
made, and is made, by telephone, actions taken or omitted to be taken in
reliance thereon by the Administrative Agent or by any Bank shall be binding
upon the Company and each other Borrower notwithstanding any inconsistency
between the notice provided by telephone and any subsequent writing in
confirmation thereof provided to the Administrative Agent or such Bank;
provided, that any such action taken or omitted to be taken by the
Administrative Agent or such Bank shall have been in good faith and in
accordance with the terms of this Agreement.
SECTION 9.03. No Waiver; Remedies. No failure on the part of any
Bank or the Administrative Agent to exercise, and no delay in exercising, any
right hereunder or under any Note shall operate as a waiver thereof; nor shall
any single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 9.04. Costs and Expenses. (a) The Company agrees to pay
(i) all reasonable out-of-pocket expenses of the Administrative Agent, whether
or not incurred prior to or subsequent to closing, in investigation,
preparation, negotiation, documentation, syndication and administration,
including reasonable expenses of and fees for attorneys for the Administrative
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Agent (who may or may not be employees of the Administrative Agent) and, during
the continuance of an Event of Default, other advisors and professionals engaged
by the Administrative Agent and (ii) on demand all reasonable out-of-pocket
costs and expenses of the Administrative Agent (including, without limitation,
reasonable fees and expenses of counsel), in connection with any amendments,
modifications or waivers of the provisions hereof, or in determining the rights
and obligations of the parties hereto under this Agreement and the Notes, or the
enforcement (whether through negotiations, legal proceedings or otherwise) of
this Agreement and the other documents to be delivered hereunder; provided, that
if, in the event of any enforcement undertaken by the Banks hereunder, it shall
be determined that sufficient conflicts exist such that a single law firm
engaged by the Administrative Agent or the Majority Banks is precluded by law or
by standards of conduct from representing the Banks as a group, and such
conflicts would exist with respect to any other law firm representing the Banks
as a group, the Company agrees to pay on demand all reasonable out-of-pocket
costs and expenses of the minimum number of counsel necessary in the reasonable
judgment of the Banks to provide the Administrative Agent and each Bank with
appropriate legal representation in connection with the enforcement of their
respective rights hereunder, in connection with such enforcement undertaking.
Notwithstanding anything herein to the contrary, the Administrative Agent shall
provide the Company with a written estimate of the legal fees it expects to
incur through the Effective Date, and the Company shall not be liable for any
amount in excess of such estimate unless the Company so consents in writing.
(b) The Company agrees to pay to the Administrative Agent such fees
as shall have been agreed to by the Administrative Agent and the Company in a
separate agreement regarding the provision by the Administrative Agent of
services as Administrative Agent under this Agreement.
SECTION 9.05. Right of Set-off. Upon (a) the occurrence and during
the continuance of any Event of Default and (b) the declaration that the
Advances are due and payable pursuant to the provisions of Section 6.01, each
Bank is hereby authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Bank to or for the credit or the account
of any Borrower against any and all of the obligations of such Borrower now or
hereafter existing under this Agreement and the Notes held by such Bank,
irrespective of whether or not such Bank shall have made any demand under this
Agreement or such Notes and although such obligations may be unmatured. Each
Bank shall promptly notify the Company after any such set-off and application
made by such Bank; provided, that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of each Bank
under this Section are in addition to other rights and remedies (including,
without limitation, other rights of set-off) which such Bank may have.
SECTION 9.06. Binding Effect. This Agreement shall become effective
upon the satisfaction of the conditions set forth in Section 3.01 and when it
shall have been executed by the Company and the Administrative Agent and when
the Administrative Agent shall have been notified by each Bank listed on the
signature pages hereof that it has executed this Agreement and thereafter shall
be binding upon and inure to the benefit of the Company, the Administrative
Agent and each Bank and their respective successors and assigns, except that
neither the
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Company nor any Borrowing Subsidiary shall have the right to assign its rights
hereunder or any interest herein without the prior written consent of the Banks.
SECTION 9.07. Assignments and Participations. (a) Each Bank may,
upon obtaining the prior written consent of the Company and the Administrative
Agent, and each Bank shall, if demanded by the Company in accordance with
Section 2.05(b), assign to one or more Eligible Assignees all or a portion of
its rights and obligations under this Agreement (including, without limitation,
all or a portion of its Commitment, Advances, participations in the Letters of
Credit and its obligations to acquire such participations); provided, however,
that:
(i) each such assignment shall be of a constant, and not a varying,
percentage of all rights and obligations under this Agreement;
(ii) each such assignment made as a result of a demand by the Company
pursuant to Section 2.05(b) shall be arranged by the Company with the
approval of the Administrative Agent, which approval shall not be
unreasonably withheld or delayed, and shall be either an assignment of all
of the rights and obligations of the assigning Bank under this Agreement or
an assignment of a portion of such rights and obligations made concurrently
with another such assignment or other such assignments that, in the
aggregate, cover all of the rights and obligations of the assigning Bank
under this Agreement;
(iii) no Bank shall be obligated to make any such assignment as a
result of a demand by the Company pursuant to Section 2.05(b) unless and
until such Bank shall have received one or more payments from one or more
Eligible Assignees in an aggregate amount equal to the aggregate
outstanding principal amount of the Advances owing to such Bank and such
Bank's Pro Rata Share of all Reimbursement Obligations then outstanding,
together with accrued interest thereon to the date of payment of such
amount from the Company or one or more Eligible Assignees and an aggregate
amount equal to the sum of (A) the amount such Bank would have received
under Section 2.11 had its Advances and Reimbursement Obligations been
prepaid on the date of such assignment and (B) all other amounts payable to
such Bank under this Agreement and the Notes (including, without
limitation, any amounts owing under Section 2.12, 2.13 or 2.18); and
(iv) the parties to each such assignment shall execute and deliver to
the Administrative Agent, for its acceptance and recording in the Register,
an Assignment and Acceptance, together with any Note subject to such
assignment and a processing and recordation fee of $3,000.
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, (x) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Bank hereunder and (y) the Bank
assigning thereunder shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights and be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance
-57-
covering all or the remaining portion of an assigning Bank's rights and
obligations under this Agreement, such Bank shall cease to be a party hereto).
Notwithstanding the foregoing, each Bank may, without the Company's or the
Administrative Agent's consent, assign all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitment and the Advances owing to it) to an Affiliate of such
Bank or to another Bank.
(b) By executing and delivering an Assignment and Acceptance, the
assigning Bank thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows:
(i) other than as provided in such Assignment and Acceptance, such
assigning Bank makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement, or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished
pursuant hereto;
(ii) such assigning Bank makes no representation or warranty and
assumes no responsibility with respect to the financial condition of any
Borrower or the performance or observance by any Borrower of any of its
obligations under this Agreement or any other instrument or document
furnished pursuant hereto;
(iii) such assignee confirms that it has received a copy of this
Agreement, together with such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance;
(iv) such assignee will, independently and without reliance upon the
Administrative Agent, such assigning Bank or any other Bank and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under this Agreement;
(v) such assignee confirms that it is an Eligible Assignee;
(vi) such assignee appoints and authorizes the Administrative Agent
to act as the contractual representative of such Bank with the rights and
duties expressly set forth herein; and
(vii) such assignee agrees that it will perform in accordance with
their terms all of the obligations that by the terms of this Agreement are
required to be performed by it as a Bank.
(c) Upon its receipt of an Assignment and Acceptance executed by an
assigning Bank and an assignee representing that it is an Eligible Assignee, and
consented to by the Administrative Agent and the Company, if necessary, together
with any Note or Notes subject to such assignment, the Administrative Agent
shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit A hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt
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notice thereof to the Company. Within ten (10) Business Days after its receipt
of such notice, the Company shall execute and deliver to the Administrative
Agent in exchange for the surrendered Note a new Note to the order of such
Eligible Assignee in an amount equal to the Commitment assumed by it pursuant to
such Assignment and Acceptance and, if the assigning Bank has retained a
Commitment hereunder, a new Note to the order of the assigning Bank in an amount
equal to the Commitment retained by it hereunder. Such new Note or Notes shall
be in an aggregate principal amount equal to the aggregate principal amount of
such surrendered Note or Notes, shall be dated the effective date of such
Assignment and Acceptance and shall otherwise be in substantially the form of
Exhibit C.
(d) The Administrative Agent shall maintain at its address referred
to in Section 9.02 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Banks and the Commitment of, and principal amount of the Advances owing to,
each Bank from time to time (the "Register"). The entries in the Register shall
be conclusive and binding for all purposes, absent manifest error, and the
Company, the Administrative Agent and the Banks may treat each Person whose name
is recorded in the Register as a Bank hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Company or any
Bank at any reasonable time and from time to time upon reasonable prior notice.
(e) Each Bank may sell participations to one or more banks or other
entities in or to all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitment,
the Advances owing to it, the participations in Letters of Credit held by it,
and the Note or Notes held by it); provided, however, that (i) such Bank's
obligations under this Agreement (including, without limitation, its Commitment
hereunder) shall remain unchanged, (ii) such Bank shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Bank shall remain the holder of any such Note for all purposes of
this Agreement, (iv) the Company, the Administrative Agent and the other Banks
shall continue to deal solely and directly with such Bank in connection with
such Bank's rights and obligations under this Agreement and (v) no participant
under any such participation shall have any right to approve any amendment or
waiver of any provision of this Agreement or any Note, or any consent to any
departure by any Borrower therefrom, except to the extent that such amendment,
waiver or consent would forgive any principal of or interest on the Notes or
forgive any part of the Commitment Fee, or reduce the stated rate at which
interest or the Commitment Fee is calculated, in each case to the extent subject
to such participation, or postpone any date fixed for any payment of principal
of, or interest on, the Notes or of the Commitment Fee, in each case to the
extent subject to such participation.
(f) Any Bank may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section 9.07, disclose
to the assignee or participant or proposed assignee or participant, any
information relating to the Company or any other Borrower furnished to such Bank
by or on behalf of the Company or such other Borrower; provided, that, prior to
any such disclosure of non-public information, such Bank shall have obtained the
Company's consent and the assignee or participant or proposed assignee or
participant shall agree in a manner satisfactory to the Company to preserve the
confidentiality of any confidential information relating to the Company received
by it from such Bank.
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(g) Notwithstanding any other provision set forth in this Agreement,
any Bank may at any time create a security interest in all or any portion of its
rights under this Agreement (including, without limitation, the Advances owing
to it and the Note or Notes held by it) in favor of any Federal Reserve Bank in
accordance with Regulation A of the Board of Governors of the Federal Reserve
System.
SECTION 9.08. Governing Law. This Agreement and the Notes shall be
governed by, and construed in accordance with, the internal laws (as opposed to
conflict of laws principles) of the State of Illinois.
SECTION 9.09. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
SECTION 9.10. Confidentiality. Each Bank hereby agrees that it will
use reasonable efforts to keep confidential any information from time to time
supplied to it by the Company which the Company designates in writing at the
time of its delivery to the Bank is to be treated confidentially; provided,
however, that nothing herein shall affect the disclosure of any such
information:
(a) to the extent required by statute, rule, regulation or judicial
process;
(b) to counsel for any Bank or to their respective accountants;
(c) to bank examiners and auditors;
(d) to any other Bank, or, subject to Section 9.07(c), any transferee
or prospective transferee of any Advance, any Note or any Commitment; or
(e) to any other Person in connection with any litigation to which
any one or more of the Banks is a party;
provided further, however, that each Bank hereby agrees that it will use
reasonable efforts to promptly notify the Company of any request for information
under clause (e) above or with respect to any request for information not
enumerated in this Section 9.10, if not otherwise prohibited from doing so.
SECTION 9.11. Non-Reliance by the Banks. Each Bank by its signature
to this Agreement represents and warrants that (a) it has not relied in the
extension of the credit contemplated by this Agreement, nor will it rely in the
maintenance thereof, upon any assets of the Company or its Subsidiaries
consisting of Margin Stock as collateral and (b) after reviewing the financial
statements of the Company and its Consolidated Subsidiaries referred to in
Section 4.01(e), such Bank has concluded therefrom that the consolidated cash
flow of the Company and its Consolidated Subsidiaries is sufficient to support
the credit extended to the Company pursuant to this Agreement.
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SECTION 9.12. Indemnification. The Company agrees to indemnify and
hold harmless the Administrative Agent, each Bank, and their respective
officers, directors, employees, and agents (any one of the foregoing being an
"Indemnified Party" and any two or more of the foregoing being "Indemnified
Parties") from and against, and pay the Indemnified Parties the amount of, any
and all claims, damages, liabilities, costs, and expenses (including, without
limitation, reasonable fees and expenses of counsel) that may be incurred by or
asserted or awarded against an Indemnified Party relating in whole or in part to
this Agreement, the Notes, any documents delivered in connection herewith and
the transactions contemplated hereby, and in connection with or arising out of
or by reason of, or in connection with the preparation of a defense of, any
investigation, litigation or proceeding arising out of, related to or in
connection with (a) this Agreement, the Notes, any of the transactions
contemplated herein or the use or proposed use of the proceeds of any Advances,
(b) any acquisition or proposed acquisition by the Company or any of its
Subsidiaries of all or any portion of the stock or all or substantially all of
the assets of any Person, or (c) the actual or alleged presence of Hazardous
Materials on any property of the Company or any of its Subsidiaries or any
Environmental Action relating to any of them, in each case whether or not such
investigation, litigation or proceeding is brought by the Company, any other
Borrower, their respective shareholders or creditors, an Indemnified Party or
any other Person, and whether or not an Indemnified Party is otherwise a party
thereto, provided, however, that this indemnification shall not apply to any
claim, damage, liability, cost or expense (i) arising from a dispute among Banks
or a dispute between any Bank and the Administrative Agent, or (ii) that is
found in a final, nonappealable judgment by a court of competent jurisdiction to
have resulted from an Indemnified Party's gross negligence or willful
misconduct. The covenants of the Company contained in this Section 9.12 and in
Sections 9.04, 2.12 and 2.18 shall survive the repayment of all amounts due and
payable under this Agreement and the termination of this Agreement.
SECTION 9.13. Partial Invalidity. Wherever possible, each provision
hereof shall be interpreted in such manner as to be effective and valid under
applicable law, but in case any one or more of the provisions contained herein
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such provision shall be ineffective to the extent, but only to the
extent, of such invalidity, illegality or unenforceability without invalidating
the remainder of such invalid, illegal or unenforceable provision or provisions
or any other provisions hereof, unless such a construction would be
unreasonable.
SECTION 9.14. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY
DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, ARISING OUT OF,
CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG
THEM IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY
OR THE ACTIONS OF THE COMPANY, ANY BORROWING SUBSIDIARY, THE ADMINISTRATIVE
AGENT OR ANY BANK IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT
THEREOF. EACH OF THE PARTIES HERETO AGREES THAT ANY SUCH CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION SHALL BE DECIDED BY BENCH TRIAL WITHOUT A JURY AND THAT ANY
PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER
OF THEIR RIGHT TO TRIAL BY JURY.
SECTION 9.15. Jurisdiction, Etc. (a) Each of the parties hereto
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any Illinois
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▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ of America sitting in Chicago,
Illinois, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement or the Notes, or for recognition or
enforcement of any judgment, and each of the parties hereto irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in any such Illinois state court or, to
the extent permitted by law, in such federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that any party may otherwise have to bring any action or proceeding
relating to this Agreement or the Notes in the courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection that
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the Notes in any
Illinois state or federal court. Each of the parties hereto irrevocably waives,
to the fullest extent permitted by law, the defense of an inconvenient forum to
the maintenance of such action or proceeding in any such court.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
DONNELLEY ENTERPRISE SOLUTIONS
INCORPORATED
By:
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Name:
Title:
▇▇▇▇▇▇ TRUST AND SAVINGS BANK,
as Administrative Agent and as a Bank
By:
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Name:
Title: