Exhibit (b)(2)
$300,000,000
CREDIT AGREEMENT
dated as of
September 21, 2001
among
▇▇▇▇ ▇▇▇▇▇ & Sons, Inc.,
The Lenders From Time to Time Parties Hereto
and
UBS AG, Stamford Branch,
as Administrative Agent
------------------------------------
UBS Warburg LLC,
as Arranger
TABLE OF CONTENTS
Page
----
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions..................................................................1
SECTION 1.02. Accounting Terms and Determinations.........................................16
SECTION 1.03. Classes and Types of Loans and Borrowings...................................16
ARTICLE 2
CREDITS
SECTION 2.01. Commitments to Lend.........................................................17
SECTION 2.02. Method of Borrowing.........................................................17
SECTION 2.03. Evidence of Loans...........................................................18
SECTION 2.04. Maturity of Loans...........................................................19
SECTION 2.05. Interest Rates..............................................................19
SECTION 2.06. Fees........................................................................21
SECTION 2.07. Optional Termination or Reduction of Commitments............................21
SECTION 2.08. Method of Electing Interest Rates...........................................21
SECTION 2.09. Scheduled Termination of Commitments........................................23
SECTION 2.10. [Reserved]..................................................................23
SECTION 2.11. Optional Prepayments........................................................23
SECTION 2.12. General Provisions as to Payments...........................................23
SECTION 2.13. Funding Losses..............................................................24
SECTION 2.14. Computation of Interest and Fees............................................24
ARTICLE 3
CONDITIONS
SECTION 3.01. Effectiveness...............................................................24
SECTION 3.02. Borrowings..................................................................26
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Corporate Existence and Power...............................................26
SECTION 4.03. Binding Effect..............................................................27
SECTION 4.04. Financial Information.......................................................27
i
SECTION 4.05. Litigation..................................................................27
SECTION 4.06. Compliance with ERISA.......................................................28
SECTION 4.07. Taxes.......................................................................28
SECTION 4.08. Subsidiaries................................................................28
SECTION 4.09. Not an Investment Company...................................................28
SECTION 4.10. Status of Loans.............................................................28
SECTION 4.11. Environmental Matters.......................................................28
SECTION 4.12. Liens.......................................................................29
SECTION 4.13. No Burdensome Restrictions; No Defaults.....................................29
SECTION 4.14. Federal Regulations.........................................................29
SECTION 4.15. No Default..................................................................29
SECTION 4.16. Ownership of Property.......................................................29
SECTION 4.17. Intellectual Property.......................................................29
SECTION 4.18. Accuracy of Information, etc................................................29
SECTION 4.19. Solvency....................................................................30
SECTION 4.20. Absence of Undisclosed Liabilities..........................................30
SECTION 4.21. Use of Proceeds.............................................................30
ARTICLE 5
COVENANTS
SECTION 5.01. Information.................................................................31
SECTION 5.02. Payment of Taxes; Insurance; Maintenance of Corporate Existence.............33
SECTION 5.03. Maintenance of Property; Conduct of Business................................34
SECTION 5.04. Compliance with Laws........................................................34
SECTION 5.05. Inspection of Property, Books and Records...................................34
SECTION 5.06. Limitation on Liens.........................................................34
SECTION 5.07. Consolidations, Mergers and Sales of Assets.................................36
SECTION 5.08. Use of Proceeds.............................................................36
SECTION 5.09. Subsidiary Debt.............................................................36
SECTION 5.10. Consolidated Shareholders' Equity...........................................36
SECTION 5.11. Debt to Subsidiaries........................................................36
SECTION 5.12. EBIT/Interest Ratio.........................................................36
SECTION 5.13. Leverage Ratio..............................................................36
SECTION 5.14. Restricted Payments and Guarantees..........................................36
SECTION 5.15. Limitation on Accounting Changes............................................37
SECTION 5.16. Fiscal Year.................................................................37
ARTICLE 6
DEFAULTS
SECTION 6.01. Events of Default...........................................................37
SECTION 6.02. Notice of Default...........................................................39
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ARTICLE 7
THE ADMINISTRATIVE AGENT
SECTION 7.01. Appointment and Authorization...............................................39
SECTION 7.02. Administrative Agent and Affiliates.........................................39
SECTION 7.03. Action by Administrative Agent and Arranger.................................39
SECTION 7.04. Consultation with Experts...................................................40
SECTION 7.05. Liability of Administrative Agent...........................................40
SECTION 7.06. Indemnification.............................................................40
SECTION 7.07. Credit Decision.............................................................41
SECTION 7.08. Successor Administrative Agent..............................................41
ARTICLE 8
CHANGE IN CIRCUMSTANCE
SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair....................41
SECTION 8.02. Illegality..................................................................42
SECTION 8.03. Increased Cost and Reduced Return...........................................42
SECTION 8.04. Taxes.......................................................................43
SECTION 8.05. Base Rate Loans Substituted for Affected Fixed Rate.........................45
SECTION 8.06. Substitution of Lender......................................................46
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. Notices.....................................................................46
SECTION 9.02. No Waivers..................................................................46
SECTION 9.03. Expenses; Documentary Taxes; Indemnification................................46
SECTION 9.04. Sharing of Set-Offs.........................................................47
SECTION 9.05. Amendments and Waivers......................................................47
SECTION 9.06. Successors and Assigns......................................................48
SECTION 9.07. Collateral..................................................................49
SECTION 9.08. New York Law................................................................49
SECTION 9.09. Counterparts; Integration...................................................49
EXHIBIT A - Note
EXHIBIT B-1 - Opinion of Internal Counsel for the Borrower
EXHIBIT B-2 - Opinion of Weil, Gotshal & ▇▇▇▇▇▇ LLP
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CREDIT AGREEMENT
AGREEMENT dated as of September 21, 2001 among ▇▇▇▇ WILEY &
SONS, INC. and its successors (the "BORROWER"), the LENDERS (as defined herein)
from time to time parties hereto, UBS AG, Stamford Branch, as administrative
agent for the Lenders hereunder, and its successors in such capacity (in such
capacity, "ADMINISTRATIVE AGENT") and UBS Warburg LLC, as arranger (in such
capacity, "ARRANGER").
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01 Definitions. Meanings:
"ACQUIRED BUSINESS" means Hungry Minds, Inc., a Delaware
corporation, and its Subsidiaries.
"ACQUIRING PERSON" means any Person (excluding any trustee
of any stock participation plan or pension plan of the Borrower or any
Subsidiary so long as all such plans in the aggregate hold less than 20% of the
Voting Stock of the Borrower), who along with any Affiliates or Associates of
such Person, becomes the beneficial owner (within the meaning of Rule 13d-3 of
the Securities Exchange Act of 1934, as amended), directly or indirectly, of
more than 10% of the Voting Stock of the Borrower.
"ACQUISITION" means the acquisition by the Borrower of not
less than 75% of the issued and outstanding Class A common stock of Hungry
Minds, Inc.
"ACQUISITION DOCUMENTS" means the Agreement and Plan of
Merger, dated as of August 12, 2001, by and among the Borrower, Hungry Minds,
Inc. and HMI Acquisition Corp., and the Voting and Tender Agreement, dated as of
August 12, 2001, by and among the Borrower, HMI Acquisition Corp., International
Data Group, Inc. and IDG Enterprises Inc.
"ADJUSTED LONDON INTERBANK OFFERED RATE" has the meaning
set forth in Section 2.05(b).
"ADMINISTRATIVE AGENT" has the meaning set forth in the
preamble hereto.
"ADMINISTRATIVE AGENT FEES" has the meaning set forth in
Section 2.06(b).
"ADMINISTRATIVE QUESTIONNAIRE" means, with respect to each
Lender, an administrative questionnaire in the form prepared by the
Administrative Agent and submitted to the Administrative Agent (with a copy to
the Borrower) duly completed by such Lender.
"AFFILIATE" of any designated Person means any Person that
has a relationship with the designated Person whereby either of such Persons
directly or indirectly controls or is controlled by or is under common control
with the other, or holds or beneficially owns 5% or more of the equity interest
in the other or 5% or more of any class of voting securities of the other. For
this purpose "CONTROL" means the power, direct or indirect, of one Person to
direct or cause direction of the management and policies of another, whether by
contract, through voting securities or otherwise.
"APPLICABLE LENDING OFFICE" means, with respect to any
Lender, (i) in the case of its Base Rate Loans, its Domestic Lending Office and
(ii) in the case of its Euro-Dollar Loans, its Euro-Dollar Lending Office.
"APPLICABLE MARGIN" means, for any day, the applicable
percentage set forth below under the caption "Base Rate Loans," or "Euro-Dollar
Loans," as the case may be, based upon the Leverage Ratio as of the relevant
date of determination:
---------------------------------------------------------------------------------------------
Leverage Ratio Base Rate Loans Euro-Dollar Loans
---------------------------------------------------------------------------------------------
Level I
Greater than 3.0 to 1.0 0.375% 1.375%
---------------------------------------------------------------------------------------------
Level II
Equal to or less than 3.0 to 1.0, but
greater than 2.5 to 1.0 0.125% 1.125%
---------------------------------------------------------------------------------------------
Level III
Equal to or less than 2.5 to 1.0, but
greater than 2.0 to 1.0 0.000% 0.875%
---------------------------------------------------------------------------------------------
Level IV
Equal to or less than 2.0 to 1.0, but
greater than 1.0 to 1.0 0.000% 0.750%
---------------------------------------------------------------------------------------------
Level V
Equal to or less than 1.0 to 1.0 0.000% 00.625%
---------------------------------------------------------------------------------------------
2
Each change in the Applicable Margin resulting from a
change in the Leverage Ratio shall be effective with respect to all Loans
outstanding on and after the date of delivery to the Administrative Agent of the
financial statements and certificates required by Section 5.01(a) or (b) and
Section 5.01(e), respectively, indicating such change until the date immediately
preceding the next date of delivery of such financial statements and
certificates indicating another such change. Notwithstanding the foregoing, (i)
from the Closing Date to the date of delivery to the Administrative Agent of the
financial statements and certificates required by Section 5.01(a) or (b) and
Section 5.01(e) for the fiscal quarter ending at least six months after the
Closing Date, the Leverage Ratio shall be deemed to be in Level III for purposes
of determining the Applicable Margin and (ii) (a) at any time during which the
Borrower has failed to deliver the financial statements and certificates
required by Section 5.01(a) or (b) and Section 5.01(e), respectively, or (b) at
any time after the occurrence and during the continuance of an Event of Default,
the Leverage Ratio shall be deemed to be in Level I for purposes of determining
the Applicable Margin.
"APPLICABLE REVOLVING COMMITMENT FEE PERCENTAGE" shall be
the applicable percentage set forth below based upon the Leverage Ratio as of
the relevant date of determination:
------------------------------------------------- ---------------------------
Leverage Ratio Commitment Fee
------------------------------------------------- ---------------------------
Level I 0.225%
Greater than 3.0 to 1.0
------------------------------------------------- ---------------------------
Level II
Equal to or less than 3.0 to 1.0, but greater 0.200%
than 2.5 to 1.0
------------------------------------------------- ---------------------------
Level III
Equal to or less than 2.5 to 1.0, but greater 0.175%
than 2.0 to 1.0
------------------------------------------------- ---------------------------
Level IV
Equal to or less than 2.0 to 1.0, but greater 0.150%
than 1.0 to 1.0
------------------------------------------------- ---------------------------
Level V 0.125%
Equal to or less than 1.0 to 1.0
------------------------------------------------- ---------------------------
Notwithstanding the foregoing, (i) from the Closing Date to
the date of delivery to the Administrative Agent of the financial statements and
certificates required by Section 5.01(a) or (b) and Section 5.01(e) for the
fiscal quarter ending at least six months after the Closing Date, the Leverage
Ratio shall be deemed to be in Level III for purposes of determining the
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Commitment Fee and (ii) (a) at any time during which the Borrower has failed to
deliver the financial statements and certificates required by Section 5.01(a) or
(b) and Section 5.01(e), respectively, or (b) at any time after the occurrence
and during the continuance of an Event of Default, the Leverage Ratio shall be
deemed to be in Level I for purposes of determining the Applicable Revolving
Commitment Fee Percentage.
"ARRANGER" has the meaning set forth in the preamble
hereto.
"ASSIGNEE" has the meaning set forth in Section 9.06(c).
"ASSOCIATE" means, with respect to any Person, (1) any
corporation or organization (other than the Borrower or a Subsidiary of the
Borrower) of which such Person is an officer, employee or partner or is,
directly or indirectly, the beneficial owner of 10% or more of the shares of any
class, (2) any trust or other estate in which such Person has a substantial
beneficial interest or as to which such Person serves as trustee or in a similar
fiduciary capacity, and (3) any relative or spouse of such Person, or any
relative of such spouse, who has the same place of residence as such Person or
who is a director or officer of the Borrower or any of its Subsidiaries.
"BASE RATE" means, for any day, a rate per annum (rounded
upward, if necessary, to the next 1/16 of 1%) equal to the greater of (a) the
Prime Rate in effect on such day and (b) the Federal Funds Rate in effect on
such day plus 0.50%. If the Administrative Agent shall have determined (which
determination shall be conclusive absent manifest error) that it is unable to
ascertain the Federal Funds Rate for any reason, including the inability or
failure of the Administrative Agent to obtain sufficient quotations in
accordance with the terms of the definition thereof, the Base Rate shall be
determined without regard to clause (b) of the preceding sentence until the
circumstances giving rise to such inability no longer exist. Any change in the
Base Rate due to a change in the Prime Rate or the Federal Funds Rate shall be
effective on the effective date of such change in the Prime Rate or the Federal
Funds Rate, respectively.
"BASE RATE LOAN" means a Loan which bears interest at the
Base Rate pursuant to the applicable Notice of Borrowing or Notice of Interest
Rate Election or the provisions of Article 8.
"BENEFIT ARRANGEMENT" means at any time an employee benefit
plan within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.
"BOARD" means the Board of Directors of the Borrower or a
committee of directors lawfully exercising the relevant powers of the Board.
"BORROWER" has the meaning set forth in the preamble
hereto.
"BORROWER'S 2001 FORM 10-K" means the Borrower's annual
report on Form 10-K for the fiscal year ended April 30, 2001, as filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended.
4
"BORROWING" has the meaning set forth in Section 1.03.
"CAPITAL LEASE" means any lease of property which, in
accordance with GAAP, should be capitalized on the lessee's balance sheet; and
"CAPITAL LEASE OBLIGATION" means the amount of the liability which should be so
capitalized.
"CAPITAL STOCK" of any Person means any and all shares,
interest, partnership interests, participations or other equivalents (however
designated) of such Person's capital stock whether now outstanding or issued
after the Closing Date, including, without limitation, all common stock and
preferred stock (including, without limitation, all classes and series of
preferred or preference stock of such Person).
"CHANGE OF CONTROL" of the Borrower shall be deemed to have
occurred at such time or times as (1) any Person (other than ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇, and their respective Affiliates
or Associates) alone or with any Affiliates or Associates of such Person, is or
becomes the beneficial owner, directly or indirectly, of 50% or more of the
Voting Stock of the Borrower or (2) individuals who constitute the Continuing
Directors cease for any reason to constitute at least a majority of the Board.
"CLASS" has the meaning set forth in Section 1.03.
"CLOSING DATE" means the date this Agreement becomes
effective in accordance with Section 3.01 and 3.02.
"COMMITMENT" means any Term Loan Commitment or Revolving
Credit Commitment, and "COMMITMENTS" means any or all of the foregoing, as the
context may require.
"COMMITMENT FEE" has the meaning set forth in Section 2.06.
"CONFIDENTIAL INFORMATION MEMORANDUM" means the
Confidential Information Memorandum dated September 2001 and furnished to
certain Lenders.
"CONSOLIDATED EBIT" means, for any fiscal period,
Consolidated Net Income for such period plus, to the extent deducted in
determining Consolidated Net Income for such period, the aggregate amount of (i)
Consolidated Interest Charges and (ii) provision for income taxes.
"CONSOLIDATED EBITDA" means, for any fiscal period,
Consolidated EBIT for such period plus, to the extent deducted in determining
Consolidated EBIT for such period, depreciation and amortization expense.
"CONSOLIDATED INTEREST CHARGES" means, for any fiscal
period, the aggregate amount of interest charges, whether expensed or
capitalized, incurred or accrued by the Borrower and its Consolidated
Subsidiaries during such period.
5
"CONSOLIDATED NET INCOME" means the consolidated net income
of the Borrower and its Consolidated Subsidiaries, determined in accordance with
GAAP, excluding
(A) the proceeds of any life insurance policy to the
extent, if any, that such proceeds have been included in consolidated net
income,
(B) after-tax gains arising from (1) the sale or other
disposition of any assets (other than sales in the Ordinary Course of Business)
to the extent that the aggregate amount of the gain exceeds the aggregate amount
of losses from the sale, abandonment or other disposition of assets (other than
sales in the Ordinary Course of Business), (2) any write-up of assets to the
extent, if any, such write-up has been included in consolidated net income, or
(3) the acquisition of outstanding Debt securities of the Borrower or any
Subsidiary,
(C) any amount representing any interest in the
undistributed earnings of any other Person (other than a Subsidiary),
(D) any earnings, prior to the date of acquisition, of any
Person acquired in any manner, and any earnings of any Subsidiary accrued prior
to becoming a Subsidiary, to the extent, if any, that any such earnings have
been included in consolidated net income,
(E) any earnings of a successor to or transferee of the
assets of the Borrower prior to becoming such successor or transferee, to the
extent, if any, that any such earnings have been included in consolidated net
income,
(F) any deferred credit (or amortization of a deferred
credit) arising from the creation of the negative goodwill pursuant to the
acquisition of any Person, and
(G) any portion of the net income of any Subsidiary which
for any reason is unavailable for payment of dividends.
"CONSOLIDATED NET WORTH" means Consolidated Shareholders'
Equity minus the aggregate net book value of the following to the extent, if
any, that such items were included in consolidated assets or deducted from
consolidated liabilities in computing Consolidated Shareholders' Equity:
(A) the amount (if any) by which the sum of
(1) the aggregate amount of Investments
described in subsection
(C) of the definition of Restricted Investments plus
(2) other Restricted Investments made after May
1, 1996 exceeds $10,000,000, and
6
(B) any write-up of assets (other than current assets and
other than any write-up arising from the acquisition of any Person in the
Ordinary Course of Business) made after November 1, 1996.
"CONSOLIDATED SHAREHOLDERS' EQUITY" means the consolidated
total shareholders' equity (including capital stock, additional paid-in capital,
retained earnings and any accumulated translation adjustment as reduced by
treasury stock) in the Borrower and its Consolidated Subsidiaries, determined in
accordance with GAAP.
"CONSOLIDATED SUBSIDIARY" means at any date any Subsidiary
or other Person the accounts of which would be consolidated with those of the
Borrower in its consolidated financial statements if such statements were
prepared as of such date.
"CONTINUING DIRECTOR" means any member of the Board who is
not an Affiliate or Associate of an Acquiring Person and who was a member of the
Board immediately prior to the time that any Acquiring Person became an
Acquiring Person and any other director who is not an Affiliate or Associate of
an Acquiring Person and who is recommended to succeed a Continuing Director by a
majority of Continuing Directors who are then members of the Board.
"DEBT" means all obligations for borrowed money, including
(A) any obligation owed for all or any part of the purchase price of property or
other assets or for services or for the cost of property or other assets
constructed or of improvements thereto, other than trade accounts payable
included in current liabilities and incurred in respect of property or services
purchased in the ordinary course of business that are not more than 180 days
overdue, (B) any Capital Lease Obligation, (C) any obligation (whether fixed or
contingent) to reimburse any bank or other Person in respect of amounts paid or
payable under a standby letter of credit and (D) any Guarantee with respect to
Debt (of the kind otherwise described in this definition) of another Person.
"DEFAULT" means any condition or event which constitutes an
Event of Default or which with the giving of notice or lapse of time or both
would, unless cured or waived, become an Event of Default.
"DERIVATIVES OBLIGATIONS" of any Person means all
obligations of such Person in respect of any rate swap transaction, basis swap,
forward rate transaction, commodity swap, commodity option, equity or equity
index swap, equity or equity index option, bond option, interest rate option,
foreign exchange transaction, cap transaction, floor transaction, collar
transaction, currency swap transaction, cross-currency rate swap transaction,
currency option or any other similar transaction (including any option with
respect to any of the foregoing transactions) or any combination of the
foregoing transactions.
"DOMESTIC BUSINESS DAY" means any day except a Saturday,
Sunday or other day on which commercial banks in New York City are authorized or
required by law to close.
7
"DOMESTIC LENDING OFFICE" means, as to each Lender, its
office located at its address set forth in its Administrative Questionnaire (or
identified in its Administrative Questionnaire as its Domestic Lending Office)
or such other office as such Lender may hereafter designate as its Domestic
Lending Office by notice to the Borrower and the Administrative Agent.
"EBIT/INTEREST RATIO" means at any date the ratio of (i)
Consolidated EBIT for the four consecutive fiscal quarters of the Borrower and
its Consolidated Subsidiaries ending on such date to (ii) Consolidated Interest
Charges for such period.
"ENVIRONMENTAL LAWS" means any and all federal, state,
local and foreign statutes, laws, regulations, ordinances, rules, judgments,
orders, decrees, permits, concessions, grants, franchises, licenses, agreements
or other governmental restrictions relating to the environment or to emissions,
discharges or releases of pollutants, contaminants, petroleum or petroleum
products, chemicals or industrial, toxic or hazardous substances or wastes into
the environment including, without limitation, ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, petroleum or petroleum products, chemicals or
industrial, toxic or hazardous substances or wastes or the clean-up or other
remediation thereof.
"ERISA" means the Employee Retirement Income Security Act
of 1974, as amended.
"ERISA GROUP" means the Borrower, any Subsidiary and all
members of a controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control which, together with the
Borrower or any Subsidiary, are treated as a single employer under Section 414
of the Internal Revenue Code.
"EURO-DOLLAR BUSINESS DAY" means any Domestic Business Day
on which commercial banks are open for international business (including
dealings in dollar deposits) in London.
"EURO-DOLLAR LENDING OFFICE" means, as to each Lender, its
office, branch or affiliate located at its address set forth in its
Administrative Questionnaire (or identified in its Administrative Questionnaire
as its Euro-Dollar Lending Office) or such other office, branch or affiliate of
such Lender as it may hereafter designate as its Euro-Dollar Lending Office by
notice to the Borrower and the Administrative Agent.
"EURO-DOLLAR LOAN" means a Loan which bears interest at a
Euro-Dollar Rate pursuant to the applicable Notice of Borrowing or Notice of
Interest Rate Election.
"EURO-DOLLAR RATE" means a rate of interest determined
pursuant to Section 2.05(b) on the basis of an Adjusted London Interbank Offered
Rate.
"EURO-DOLLAR RESERVE PERCENTAGE" has the meaning set forth
in Section 2.05(b).
8
"EVENT OF DEFAULT" has the meaning set forth in Section
6.01.
"EXISTING CREDIT FACILITY" means that certain Credit
Agreement, dated as of November 15, 1996, as amended, modified or supplemented
from time to time, among ▇▇▇▇ ▇▇▇▇▇ & Sons, Inc., the banks from time to time
parties thereto and ▇▇▇▇▇▇ Guaranty Trust Company of New York, as Agent.
"EXISTING CREDIT FACILITY EXPIRATION DATE" means the date
upon which the Borrower's obligations under the Existing Credit Facility are no
longer outstanding. "EXPOSURE" means, at any time as to any Lender, the sum of
(i) such Lender's Term Loan Commitment, if still in existence, or the
outstanding principal amount of such Lender's Term Loans, if its Term Loan
Commitment is no longer in existence, plus (ii) such Lender's Revolving Credit
Commitment, if still in existence, or the outstanding principal amount of such
Lender's Revolving Credit Loans, if its Revolving Credit Commitment is no longer
in existence.
"FEDERAL FUNDS RATE" means, for any day, the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published on the next succeeding Domestic Business Day by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day, the average
of the quotations for the day for such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by it.
"FEE LETTER" means that certain commitment letter and fee
letter, in each case dated September 4, 2001, among the Borrower, the
Administrative Agent and the Arranger.
"FEES" means the Commitment Fees and the Administrative
Agent Fees.
"GAAP" means generally accepted accounting principles as in
effect at the time of application to the provisions hereof.
"GROUP OF LOANS" means at any time a group of Loans of any
Class consisting of (i) all Loans of such Class which are Base Rate Loans at
such time or (ii) all Loans of such Class which are Euro-Dollar Loans having the
same Interest Period at such time; provided that, if a Loan of any particular
Lender is converted to or made as a Base Rate Loan pursuant to Article 8, such
Loan shall be included in the same Group or Groups of Loans from time to time as
it would have been in if it had not been so converted or made.
"GUARANTEE" means any guarantee or other contingent
liability (other than any endorsement for collection or deposit in the ordinary
course of business), direct or indirect, with respect to any obligation of
another Person, through an agreement or otherwise, including, without
limitation, (A) any other endorsement or discount with recourse or undertaking
substantially equivalent to or having economic effect similar to a guarantee in
respect of any such obligation and (B) any agreement (1) to purchase, or to
advance or supply funds for the payment or purchase of, any such obligation, (2)
9
to purchase, sell or lease property, products, materials or supplies, or
transportation or services, in respect of enabling such other Person to pay any
such obligation or to assure the owner thereof against loss regardless of the
delivery or nondelivery of the property, products, materials or supplies or
transportation or services or (3) to make any loan, advance or capital
contribution to or other investment in, or to otherwise provide funds to or for,
such other Person in respect of enabling such Person to satisfy any obligation
(including any liability for a dividend, stock liquidation payment or expense)
or to assure a minimum equity, working capital or other balance sheet condition
in respect of any such obligation.
The amount of any Guarantee shall be equal to the
outstanding amount of the obligation directly or indirectly guaranteed.
"INTELLECTUAL PROPERTY" means the collective reference to
all rights, priorities and privileges relating to intellectual property, whether
arising under United States, multinational or foreign laws or otherwise,
including copyrights, copyright licenses, patents, patent licenses, trademarks,
trademark licenses, technology, know-how and processes, and all rights to ▇▇▇ at
law or in equity for any infringement or other impairment thereof, including the
right to receive all proceeds and damages therefrom.
"INTEREST PERIOD" means, with respect to each Euro-Dollar
Loan, the period commencing on the date of borrowing specified in the applicable
Notice of Borrowing or on the date specified in the applicable Notice of
Interest Rate Election and ending one, two, three or six months thereafter, as
the Borrower may elect in the applicable notice; provided that:
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another
calendar month, in which case such Interest Period shall end on the next
preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last
Euro-Dollar Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clauses (c) and (d) below, end on the last Euro-Dollar
Business Day of a calendar month;
(c) no Interest Period for any Loan shall extend beyond the
scheduled Termination Date; and
(d) the initial Interest Period for any Euro-Dollar Loan
shall commence on the date of Borrowing of such Euro-Dollar Loan (including the
date of any conversion thereto from a Loan of a different Type) and each
Interest Period occurring thereafter in respect of such Euro-Dollar Loan shall
commence on the day on which the next preceding Interest Period applicable
thereto expires;;
provided, further that until the earlier of (x) the Arranger's completion of
syndication of the Commitments (as determined by the Arranger and notified in
writing to the Borrower) and (y) the date that is six months after the Closing
10
Date, the Interest Periods with respect to Euro-Dollar Loans shall be seven
days.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended, or any successor statute.
"INVESTMENT" means any investment so classified under GAAP,
made by stock purchase, capital contribution, loan or advance or by purchase of
property or otherwise, but in any event shall include as an investment in any
Person the amount of all Debt owed by such Person and all accounts receivable
from such Person which are not current assets or did not arise from sales to
such Person in the ordinary course of business.
"LENDER" means each financial institution listed on the
signature pages hereof, each Assignee which becomes a Lender pursuant to Section
9.06(c), and their respective successors.
"LEVERAGE RATIO" means, at any date, the ratio of Total
Debt at such date to Consolidated EBITDA for the period of four consecutive
fiscal quarters most recently ended on or prior to such date.
"LIEN" means, with respect to any asset, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind in respect of
such asset. For the purposes of this Agreement, the Borrower or any Subsidiary
shall be deemed to own subject to a Lien any asset which it has acquired or
holds subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement relating to such
asset.
"LOAN" means a Base Rate Loan or a Euro-Dollar Loan and
"Loans" means Base Rate Loans, Euro-Dollar Loans or any combination of the two;
provided that, if any such Loan or Loans (or portions thereof) are combined or
subdivided pursuant to a Notice of Interest Rate Election, the term "Loan" shall
refer to the combined principal amount resulting from such combination or to
each of the separate principal amounts resulting from such subdivision, as the
case may be.
"LOAN DOCUMENTS" means this Agreement and any Note, if any,
and each agreement or document executed in connection therewith.
"LONDON INTERBANK OFFERED RATE" has the meaning set forth
in Section 2.05(b).
"MATERIAL DEBT" means Debt (other than the Loans) of the
Borrower and/or one or more of its Subsidiaries, arising in one or more related
or unrelated transactions, in an aggregate principal amount exceeding $1,000,000
until the Existing Credit Facility Expiration Date, and thereafter $2,000,000.
"MATERIAL FINANCIAL OBLIGATIONS" means a principal or face
amount of Debt and/or payment or collateralization obligations in respect of
11
Derivatives Obligations of the Borrower and/or one or more of its Subsidiaries,
arising in one or more related or unrelated transactions, exceeding in the
aggregate $1,000,000 until the Existing Credit Facility Expiration Date, and
thereafter $2,000,000.
"MATERIAL PLAN" means at any time a Plan or Plans having
aggregate Unfunded Liabilities in excess of $10,000,000.
"NOTES" means promissory notes of the Borrower,
substantially in the form of Exhibit A hereto, evidencing the obligation of the
Borrower to repay the Loans, and "NOTE" means any one of such promissory notes
issued hereunder.
"NOTICE OF BORROWING" has the meaning set forth in Section
2.02.
"NOTICE OF INTEREST RATE ELECTION" has the meaning set
forth in Section 2.08.
"OPERATING LEASE" means any lease, other than a Capital
Lease, of real or personal property; and "OPERATING LEASE RENTALS" means the sum
of the rental and other obligations required to be paid by the lessee under an
Operating Lease excluding any amount required to be paid by the lessee (whether
or not therein designated as rental or additional rental) on account of
maintenance, repairs, insurance, taxes, assessments, water rates and similar
charges.
"ORDINARY COURSE OF BUSINESS" means the activities, events
and transactions of the Borrower that would reasonably be expected to recur in
the foreseeable future, do not possess a high degree of abnormality and are not
unrelated to, or only incidentally related to, the publishing and marketing of
books, journals and information services in all formats and computer software
related thereto; the importing, adapting and marketing of works from other
publishers and the designing and marketing of teaching and training materials
for business and professional users. For purposes of this Agreement, sales,
directly or indirectly, of book lists, publishing or training product lines, or
other similar forms of publication rights shall be deemed to be sales in the
Ordinary Course of Business.
"PARENT" means, with respect to any Lender, any Person
controlling such Lender.
"PARTICIPANT" has the meaning set forth in Section 9.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation or
any entity succeeding to any or all of its functions under ERISA.
"PERSON" means an individual, a corporation, a partnership,
an association, a limited liability company, a trust or any other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.
"PLAN" means at any time an employee pension benefit plan
(other than a Multiemployer Plan) which is covered by Title IV of ERISA or
subject to the minimum funding standards under Section 412 of the Internal
Revenue Code and either (i) is maintained, or contributed to, by any member of
12
the ERISA Group for employees of any member of the ERISA Group or (ii) has at
any time within the preceding five years been maintained, or contributed to, by
any Person which was at such time a member of the ERISA Group for employees of
any Person which was at such time a member of the ERISA Group.
"PRIME RATE" means, for any day, a rate per annum that is
equal to the corporate base rate of interest established by the Administrative
Agent from time to time as its Prime Rate; each change shall be effective on the
date determined by the Administrative Agent. The Prime Rate is not necessarily
the lowest rate charged by the Administrative Agent to its customers.
"QUARTERLY DATES" means each July 31, October 31, January
31, and April 30.
"REFINANCING" means the repayment of up to $92,500,000
million of the outstanding Debt of the Acquired Business.
"REGULATION U" means Regulation U of the Board of Governors
of the Federal Reserve System, as in effect from time to time.
"REQUIRED LENDERS" means at any time Lenders holding at
least a majority of the aggregate amount of the Exposures at such time.
"RESTRICTED GUARANTEE" means any Guarantee of the Borrower
or a Subsidiary in respect of any obligation of another Person other than
(A) any Guarantee of the Borrower in respect of any
Subsidiary, and
(B) any Guarantee in respect of Debt to the extent such
Debt is secured by a Capital Lease of the Borrower or a Subsidiary.
"RESTRICTED INVESTMENT" means any Investment, other than
(A) any Investment in (1) a marketable obligation, maturing
within one year after acquisition thereof, issued or guaranteed by the United
States of America or an instrumentality or agency thereof, (2) a certificate of
deposit or other obligation, maturing within one year after acquisition thereof,
issued by a United States national or state bank or trust company having
capital, surplus and undivided profits of at least $100,000,000, (3) open market
commercial paper, maturing within 270 days after acquisition thereof, which has,
on the date of acquisition, one of the three highest credit ratings of either
Standard & Poor's Ratings Services ("S&P") or ▇▇▇▇▇'▇ Investors Service, Inc.
("▇▇▇▇▇'▇"), (4) adjustable rate preferred stocks or money market preferred
stocks issued by a corporation organized under the laws of the United States or
a state thereof which have, on the date of acquisition, one of the three highest
ratings of either S&P or Moody's and which mature (or are redeemable at the
option of the holder) within twelve months after the acquisition thereof and (5)
commercial paper or notes issued by a governmental authority located in the
United States, which are, on the date of acquisition, of credit quality not
13
lower than that of the investments referred to in clause (4) above and which
mature (or are redeemable at the option of the holder) within twelve months
after the acquisition thereof,
(B) any Investment in a Subsidiary, and
(C) any Investment hereafter acquired in any Person other
than a Subsidiary in exchange for, or out of the net cash proceeds from the
substantially concurrent sale of, common shares of the Borrower.
In computing the amount of any Restricted Investment in any
Person, unrealized increases or decreases in value, or write-ups, write-downs or
write-offs of Restricted Investments in the Person shall be disregarded (except
to the extent included in the determination of net income of the Borrower or a
Subsidiary).
"RESTRICTED PAYMENT" means:
(A) the declaration of any dividend on, or the incurrence
of any liability to make any other payment or distribution in respect of, any
shares of the Borrower (other than one payable solely in its common shares), and
(B) any payment or distribution on account of the purchase,
redemption or other retirement of any shares of the Borrower, or of any warrant,
option or other right to acquire such shares, or any other payment or
distribution (other than pursuant to a dividend theretofore declared or
liability theretofore incurred as specified in subsection (A)), made in respect
thereof, either directly or indirectly, except any payment or distribution on
account of (1) the principal of and prepayment charge, if any, on convertible
Debt, or (2) the purchase, redemption or other retirement of shares of the
Borrower in exchange for, or out of the net cash proceeds received by the
Borrower from a substantially concurrent sale of, other shares of the Borrower.
The amount of any Restricted Payment in property shall be
deemed to be the greater of its fair value (as determined by the Board) or its
net book value.
"REVOLVING CREDIT COMMITMENT" means,
(i) with respect to each Revolving Credit Lender listed on
the signature pages hereof, the amount set forth opposite the name of such
Lender under the heading "Revolving Credit Commitment" on the signature pages
hereof, or
(ii) with respect to each Assignee which becomes a
Revolving Credit Lender pursuant to Section 9.06(c), the amount of the Revolving
Credit Commitment thereby assumed by it, in each case as such amount
14
may be reduced from time to time pursuant to Section 2.07 or increased or
reduced by reason of an assignment to or by such Lender in accordance with
Section 9.06(c).
"REVOLVING CREDIT LENDER" means each Lender identified on
the signature pages hereof as having a Revolving Credit Commitment and each
Assignee which acquires a Revolving Credit Commitment and/or Revolving Credit
Loans pursuant to Section 9.06(c), and their respective successors.
"REVOLVING CREDIT LOAN" means a loan made by a Revolving
Credit Lender pursuant to Section 2.01(b).
"REVOLVING CREDIT PERIOD" means the period from and
including the Closing Date to but not including the Termination Date.
"SENIOR OFFICER" means the President, the Chief Executive
Officer, the Chief Financial Officer, the Chief Operations Officer, any
Executive Vice President, any Senior Vice President, the General Counsel and the
Treasurer of the Borrower.
"SUBSIDIARY" of any designated Person means any Person or
other entity at least a majority of the Voting Stock (or comparable ownership
interests) of which is at the time owned by the designated Person and/or one or
more of its Subsidiaries. Except as otherwise expressly indicated herein,
references to Subsidiaries shall mean Subsidiaries of the Borrower.
"SUBSIDIARY DEBT" means the Debt of all Subsidiaries of the
Borrower, consolidated in accordance with GAAP; provided, that such amount shall
exclude all intercompany Debt of the Borrower and its Consolidated Subsidiaries.
"TERM LOAN" means a loan made by a Term Loan Lender
pursuant to Section 2.01(a).
"TERM LOAN COMMITMENT" means
(i) with respect to each Term Loan Lender listed on the
signature pages hereof, the amount set forth opposite the name of such Lender
under the heading "Term Loan Commitment" on the signature pages hereof, or
(ii) with respect to each Assignee which becomes a Term
Loan Lender pursuant to Section 9.06(c), the amount of the Term Loan Commitment
thereby assumed by it,
in each case as such amount may be reduced from time to time pursuant to Section
2.07 or increased or reduced by reason of an assignment to or by such Lender in
accordance with Section 9.06(c).
15
"TERM LOAN LENDER" means each Lender identified on the
signature pages hereof as having a Term Loan Commitment and each Assignee which
acquires a Term Loan pursuant to Section 9.06(c), and their respective
successors.
"TERMINATION DATE" means September 21, 2006, or, if such
day is not a Euro-Dollar Business Day, the next succeeding Euro-Dollar Business
Day unless such Euro-Dollar Business Day falls in another calendar month, in
which case the Termination Date shall be the next preceding Euro-Dollar Business
Day.
"TOTAL DEBT" means at any date the aggregate amount of Debt
of the Borrower and its Consolidated Subsidiaries, determined on a consolidated
basis as of such date.
"TRANSACTIONS" means the Acquisition, the Refinancing, the
initial borrowings under this Agreement and the payments of fees, commissions
and expenses in connection with each of the foregoing.
"TYPE" has the meaning set forth in Section 1.03.
"UNFUNDED LIABILITIES" means, with respect to any Plan at
any time, the amount (if any) by which (i) the present value of all benefits
under such Plan exceeds (ii) the fair market value of all Plan assets allocable
to such benefits (excluding any accrued but unpaid contributions), all
determined as of the then most recent valuation date for such Plan, but only to
the extent that such excess represents a potential liability of a member of the
ERISA Group to the PBGC or any other Person under Title IV of ERISA.
"UNITED STATES" means the United States of America,
including the States and the District of Columbia, but excluding its territories
and possessions.
"VOTING STOCK" means shares of a Person of the class or
classes having general voting power (not depending on the happening of a
contingency) under ordinary circumstances to elect a majority of the Board. As
of the date of this Agreement, the Class B Stock of the Borrower is the only
Voting Stock of the Borrower.
SECTION 1.02. Accounting Terms and Determinations. All
financial statements provided for in this Agreement shall be prepared, all
financial computations hereunder shall be made, and all accounting terms shall
have the meanings given to them, in accordance with GAAP, except as otherwise
provided in this Agreement. Any consolidated or consolidating financial
statement or financial computation with respect to the Borrower and its
Subsidiaries required by this Agreement shall be done in accordance with GAAP,
and if at the time that any such statement or computation is required to be made
the Borrower shall not have any Subsidiary such terms shall mean a financial
statement or a financial computation, as the case may be, with respect to the
Borrower only.
SECTION 1.03. Classes and Types of Loans and Borrowings.
The term "BORROWING" denotes the aggregation of Loans of one or more Lenders to
16
be made to the Borrower pursuant to Article 2 on the same date, all of which
Loans are of the same Class and Type (subject to Article 8) and, in the case of
Euro-Dollar Loans, have the same initial Interest Period. Loans hereunder are
distinguished by "Class" and by "Type". The "CLASS" of a Loan (or of a
Commitment to make such a Loan or of a Borrowing comprised of such Loans) refers
to the determination whether such Loan is a Term Loan or Revolving Credit Loan,
each of which constitutes a Class. The "TYPE" of a Loan refers to the
determination whether such Loan is a Euro-Dollar Loan or a Base Rate Loan.
Identification of a Loan (or a Borrowing) by both Class and Type (e.g., a "TERM
EURO-DOLLAR LOAN") indicates that such Loan is both a Term Loan and a
Euro-Dollar Loan (or that such Borrowing is comprised of such Loans).
ARTICLE 2
CREDITS
SECTION 2.01. Commitments to Lend.
(a) TERM LOANS. Each Term Loan Lender severally agrees, on the terms
and conditions set forth in this Agreement, to make a Term Loan to the Borrower
on the Closing Date in an amount not to exceed in the aggregate the amount of
its Term Loan Commitment; provided, that the aggregate amount of the Term Loan
Commitments shall not exceed $200,000,000. The Term Loan Commitments are not
revolving in nature, and amounts of Term Loans repaid or prepaid pursuant to
Section 2.11 shall not be reborrowed.
(b) REVOLVING CREDIT LOANS. During the Revolving Credit Period, each
Revolving Credit Lender severally agrees, on the terms and conditions set forth
in this Agreement, to make Revolving Credit Loans to the Borrower from time to
time in an aggregate amount at any time outstanding not to exceed the amount of
its Revolving Credit Commitment; provided, that the aggregate amount of the
Revolving Credit Commitments shall not exceed $100,000,000. Within the limits
specified in this Agreement, the Borrower may borrow under this Section 2.01(b),
prepay Loans to the extent permitted by Section 2.11 and reborrow Revolving
Credit Loans at any time during the Revolving Credit Period pursuant to this
Section 2.01(b). Each Borrowing under this Section 2.01(b) shall be in the
aggregate principal amount of $2,000,000 or any larger multiple of $1,000,000
(except that any such Borrowing may be in the aggregate amount of the unused
Revolving Credit Commitments) and shall be made by the several Revolving Credit
Lenders ratably in proportion to their respective Revolving Credit Commitments.
SECTION 2.02. Method of Borrowing. (a) The Borrower shall give
the Administrative Agent notice (a "NOTICE OF BORROWING") not later than 10:30
A.M. (New York City time) on (i) the date of each Base Rate Borrowing, and (ii)
the third Euro-Dollar Business Day before each Euro-Dollar Borrowing,
specifying:
(i) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Domestic Borrowing or a Euro-Dollar
Business Day in the case of a Euro-Dollar Borrowing;
17
(ii) the aggregate amount of such Borrowing;
(iii) the Class and initial Type of Loans comprising such
Borrowing provided, however, that Borrower shall not be entitled to
request any Borrowing that, if made, would result in more than ten
Euro-Dollar Borrowings outstanding hereunder at any time; and
(iv) in the case of a Euro-Dollar Borrowing, the duration
of the Interest Period applicable thereto, subject to the provisions
of the definition of Interest Period.
(b) Upon receipt of a Notice of Borrowing, the Administrative Agent
shall promptly notify each Lender participating therein of the contents thereof
and of such Lender's ratable share of such Borrowing and such Notice of
Borrowing shall not thereafter be revocable by the Borrower.
(c) Not later than 12:00 noon (New York City time) on the date of
each Borrowing, each Lender shall make available its ratable share of such
Borrowing (determined in accordance with Section 2.01), in Federal or other
funds immediately available in New York City, to the Administrative Agent at its
address specified in or pursuant to Section 9.01. Unless the Administrative
Agent determines in its reasonable judgment that any applicable condition
specified in Article 3 has not been satisfied, the Administrative Agent will
make the funds so received from the Lenders available to the Borrower at the
Administrative Agent's aforesaid address.
(d) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's share of such Borrowing, the
Administrative Agent may assume that such Lender has made such share available
to the Administrative Agent on the date of such Borrowing in accordance with
subsection (c) of this Section 2.02 and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not have so
made such share available to the Administrative Agent, such Lender and the
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 the Borrower until the date such
amount is repaid to the Administrative Agent, at (i) in the case of the
Borrower, a rate per annum equal to the higher of the Federal Funds Rate and the
interest rate applicable thereto pursuant to Section 2.05 and (ii) in the case
of such Lender, the Federal Funds Rate. If such Lender shall repay to the
Administrative Agent such corresponding amount, such amount so repaid shall
constitute such Lender's Loan included in such Borrowing for purposes of this
Agreement.
SECTION 2.03. Evidence of Loans. (a) Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the Debt of
18
Borrower to such Lender resulting from each Loan made by such Lender from time
to time, including the amounts of principal and interest payable and paid to
such Lender from time to time under this Agreement.
(b) The Administrative Agent shall maintain accounts in which it will
record (i) the amount of each Loan made hereunder, the Type and Class thereof
and the Interest Period applicable thereto, if any; (ii) the amount of any
principal or interest due and payable or to become due and payable from Borrower
to each Lender hereunder; and (iii) the amount of any sum received by the
Administrative Agent hereunder from Borrower, including any Fees, and each
Lender's share thereof.
(c) The entries made in the accounts maintained pursuant to
paragraphs (a) and (b) above shall be prima facie evidence of the existence and
amounts of the obligations therein recorded; provided, however, that the failure
of any Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligations of the Borrower to repay
the Loans in accordance with their terms.
(d) Any Lender may request that the Loans made by it hereunder be
evidenced by a Note. In such event, the Borrower shall execute and deliver to
such Lender a Note payable to the order of such Lender and its registered
assigns and in substantially the form of Exhibit A hereto. Notwithstanding any
other provision of this Agreement, in the event any Lender shall request and
receive such a Note, the interests represented by such Note shall at all times
(including after any assignment of all or part of such interests pursuant to
Section 9.06) be represented by one or more Notes payable to the payee named
therein or its registered assigns, until such Note is returned to the Borrower
and duly canceled.
SECTION 2.04. Maturity of Loans. The Term Loans and the
Revolving Credit Loans shall mature, and the principal amount thereof shall be
due and payable, on the Termination Date.
SECTION 2.05. Interest Rates. (a) Each Base Rate Loan shall
bear interest on the outstanding principal amount thereof, for each day from the
date such Loan is made until it becomes due, at a rate per annum equal to the
sum of the Applicable Margin for such day plus the Base Rate for such day. Such
interest shall be payable at maturity, quarterly in arrears on each Quarterly
Date prior to maturity and, with respect to the principal amount of any Base
Rate Loan converted to a Euro-Dollar Loan, on the date such Base Rate Loan is so
converted.
(b) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for each day during each Interest Period applicable
thereto, at a rate per annum equal to the sum of the Applicable Margin for such
day plus the Adjusted London Interbank Offered Rate applicable to such Interest
Period. Such interest shall be payable for each Interest Period on the last day
thereof and, if such Interest Period is longer than three months, at intervals
of three months after the first day thereof.
19
The "ADJUSTED LONDON INTERBANK OFFERED RATE" applicable to
any Interest Period means a rate per annum equal to the quotient obtained
(rounded upwards, if necessary, to the next higher 1/16 of 1%) by dividing (i)
the applicable London Interbank Offered Rate by (ii) 1.00 minus the Euro-Dollar
Reserve Percentage.
The "LONDON INTERBANK OFFERED RATE" applicable to any
Interest Period means the rate per annum determined by the Administrative Agent
to be the arithmetic mean (rounded to the nearest 1/16th of 1%) of the offered
rates for deposits in dollars with a term comparable to such Interest Period
that appears on the Telerate British Bankers Assoc. Interest Settlement Rates
Page (as defined below) at approximately 11:00 a.m., London, England time, on
the second full Euro-Dollar Business Day preceding the first day of such
Interest Period; provided, however, that (i) if no comparable term for an
Interest Period is available, the London Interbank Offered Rate shall be
determined using the weighted average of the offered rates for the two terms
most nearly corresponding to such Interest Period and (ii) if there shall at any
time no longer exist a Telerate British Bankers Assoc. Interest Settlement Rates
Page, "London Interbank Offered Rate" shall mean, with respect to each day
during each Interest Period pertaining to Euro-Dollar Borrowings comprising part
of the same Borrowing, the rate per annum equal to the rate at which the
Administrative Agent is offered deposits in dollars at approximately 11:00 a.m.,
London, England time, two Euro-Dollar Business Days prior to the first day of
such Interest Period in the London interbank market for delivery on the first
day of such Interest Period for the number of days comprised therein and in an
amount comparable to its portion of the amount of such Euro-Dollar Borrowing to
be outstanding during such Interest Period or such other amount deemed
appropriate by the Administrative Agent. "TELERATE BRITISH BANKERS ASSOC.
INTEREST SETTLEMENT RATES PAGE" shall mean the display designated as Page 3750
on the Telerate System Incorporated Service (or such other page as may replace
such page on such service for the purpose of displaying the rates at which
dollar deposits are offered by leading banks in the London interbank deposit
market).
"EURO-DOLLAR RESERVE PERCENTAGE" means for any day that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement for a member bank of
the Federal Reserve System in New York City with deposits exceeding five billion
dollars in respect of "Eurocurrency liabilities" (or in respect of any other
category of liabilities which includes deposits by reference to which the
interest rate on Euro-Dollar Loans is determined or any category of extensions
of credit or other assets which includes loans by a non-United States office of
any Lender to United States residents). The Adjusted London Interbank Offered
Rate shall be adjusted automatically on and as of the effective date of any
change in the Euro-Dollar Reserve Percentage.
(c) Upon the occurrence and during the continuance of an Event of
Default, interest will accrue on any amount of a Loan or other amount payable
under this Agreement at a rate of 2.0% per annum in excess of the higher of (i)
rate that would be applicable to a Base Rate Loan plus the appropriate
20
Applicable Margin and (ii) the rate (including the appropriate Applicable
Margin), if any, otherwise applicable to such Loan or other amount, and will be
payable on demand.
(d) The Administrative Agent shall determine each interest rate
applicable to the Loans hereunder. The Administrative Agent shall give prompt
notice to the Borrower and the Lenders of each rate of interest so determined,
and its determination thereof shall be conclusive in the absence of manifest
error.
SECTION 2.06. Fees. (a) The Borrower agrees to pay to each
Lender, through the Administrative Agent, on each Quarterly Date and on each
date on which any Revolving Credit Commitment of such Lender shall expire or be
terminated as provided herein, a commitment fee (a "Commitment Fee") equal to
the Applicable Revolving Commitment Fee Percentage per annum on the average
daily unused amount of the Revolving Credit Commitment of such Lender during the
preceding quarter (or other period commencing the date hereof or ending on the
Termination Date or the date on which the Revolving Credit Commitment of such
Lender shall expire or be terminated). All Commitment Fees shall be computed on
the basis of the actual number of days elapsed in a year of 360 days. The
Commitment Fee due to each Lender shall commence to accrue on the Closing Date
and shall cease to accrue on the date on which the Revolving Credit Commitment
of such Lender shall expire or be terminated as provided herein.
(b) The Borrower agrees to pay to the Administrative Agent,
for its own account, the agency fees set forth in the Fee Letter (the
"ADMINISTRATIVE AGENT FEES").
SECTION 2.07. Optional Termination or Reduction of Commitments.
The Borrower may, upon at least three Domestic Business Days' notice to the
Administrative Agent, (i) terminate the Commitments of either Class at any time,
if no Loans of such Class are outstanding at such time or (ii) ratably reduce
from time to time by an aggregate amount of $5,000,000 or a larger multiple of
$1,000,000 the aggregate amount of the Commitments of either Class in excess of
the aggregate outstanding amount of the Loans of such Class. Upon receipt of any
notice pursuant to this Section 2.07, the Administrative Agent shall promptly
notify each affected Lender of the contents of such notice.
SECTION 2.08. Method of Electing Interest Rates. (a) The Loans
included in each Borrowing shall bear interest initially at the type of rate
specified by the Borrower in the applicable Notice of Borrowing. Thereafter, the
Borrower may from time to time elect to change or continue the type of interest
rate borne by each Group of Term Loans and Revolving Credit Loans (subject in
each case to the provisions of Article 8 and the last sentence of this
subsection (a)), as follows:
(i) if such Loans are Base Rate Loans, the Borrower may
elect to convert such Loans to Euro-Dollar Loans as of any Euro-Dollar Business
Day; and
21
(ii) if such Loans are Euro-Dollar Loans, the Borrower may
elect to convert such Loans to Base Rate Loans or elect to continue such Loans
as Euro-Dollar Loans for an additional Interest Period, in either case as of the
last day of the then current Interest Period applicable to such Loans;
provided, however, that Borrower shall not be entitled to make any such election
that, if made, would result in more than ten Euro-Dollar Borrowings outstanding
hereunder at any time.
Each such election shall be made by delivering a notice (a "NOTICE OF INTEREST
RATE ELECTION") to the Administrative Agent not later than 11:00 A.M. (New York
City time) on the third Euro-Dollar Business Day before the conversion or
continuation selected in such notice is to be effective. A Notice of Interest
Rate Election may, if it so specifies, apply to only a portion of the aggregate
principal amount of the relevant Group of Loans; provided that (i) such portion
is allocated ratably among the Loans comprising such Group and (ii) the portion
to which such Notice of Interest Rate Election applies, and the remaining
portion to which it does not apply, are each $5,000,000 or any larger multiple
of $1,000,000. If no such Notice of Interest Rate Election is timely received
prior to the end of an Interest Period, the Borrower shall be deemed to have
elected that all Loans having such Interest Period be converted to Base Rate
Loans. Notwithstanding the foregoing, the Borrower may not elect to convert any
Loan to, or continue any Loan as, a Euro-Dollar Loan pursuant to any Notice of
Interest Rate Election if at the time such Notice of Interest Rate Election is
delivered a Default shall have occurred and be continuing.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to which
such notice applies;
(ii) the date on which the conversion or continuation
selected in such notice is to be effective, which shall comply with
the applicable clause of subsection (a) above;
(iii) if the Loans comprising such Group are to be
converted, the new Type of Loans and, if such Loans are being
converted to Euro-Dollar Loans, the duration of the next succeeding
Interest Period applicable thereto; and
(iv) if such Loans are to be continued as Euro-Dollar
Loans for an additional Interest Period, the duration of such
additional Interest Period.
Each Interest Period specified in a Notice of Interest Rate Election shall
comply with the provisions of the definition of Interest Period.
(c) Upon receipt of a Notice of Interest Rate Election from the
Borrower pursuant to subsection (a) above, the Administrative Agent shall
promptly notify each Lender of the contents thereof and such notice shall not
thereafter be revocable by the Borrower.
22
(d) An election by the Borrower to change or continue the rate of
interest applicable to any Group of Loans pursuant to this Section 2.08 shall
not constitute a "Borrowing" subject to the provisions of Section 3.02.
SECTION 2.09. Scheduled Termination of Commitments. (a) The
Term Loan Commitments shall terminate upon the earlier of (i) the making of the
Term Loans and (ii) at the close of business on the Closing Date.
(b) The Revolving Credit Commitments shall terminate on the
Termination Date unless otherwise terminated according to the terms of this
Agreement.
SECTION 2.10. [Reserved]
SECTION 2.11. Optional Prepayments. (a) Subject in the case of
any Euro-Dollar Loan to Section 2.13, the Borrower may, upon at least one
Domestic Business Day's notice to the Administrative Agent, prepay the Group of
Base Rate Loans of any Class or, in the case of Euro-Dollar Loans, three
Euro-Dollar Business Days' notice to the Administrative Agent, prepay any Group
of Euro-Dollar Loans of any Class, in each case in whole at any time, or from
time to time in part in amounts aggregating $2,000,000 or any larger multiple of
$1,000,000, by paying the principal amount to be prepaid together with accrued
interest thereon to the date of prepayment. Each such optional prepayment of a
Group of Loans shall be applied to prepay ratably the Loans of the Lenders
included in such Group.
(b) Upon receipt of a notice of prepayment pursuant to paragraph (a)
of this Section 2.11, the Administrative Agent shall promptly notify each Lender
of the contents thereof and of such Lender's ratable share of such prepayment
and such notice shall not thereafter be revocable by the Borrower.
SECTION 2.12. General Provisions as to Payments. (a) The
Borrower shall make each payment of principal of, and interest on, the Loans and
of Fees hereunder, not later than 12:00 noon (New York City time) on the date
when due, in Federal or other funds immediately available in New York City, to
the Administrative Agent at its address referred to in Section 9.01. The
Administrative Agent will promptly distribute to each Lender its ratable share
of each such payment received by the Administrative Agent for the account of the
Lenders. Whenever any payment of principal of, or interest on, the Base Rate
Loans or of Fees shall be due on a day which is not a Domestic Business Day, the
date for payment thereof shall be extended to the next succeeding Domestic
Business Day. Whenever any payment of principal of, or interest on, the
Euro-Dollar Loans shall be due on a day which is not a Euro-Dollar Business Day,
the date for payment thereof shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another
calendar month, in which case the date for payment thereof shall be the next
preceding Euro-Dollar Business Day. If the date for any payment of principal is
extended by operation of law or otherwise, interest thereon shall be payable for
such extended time.
23
(b) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Lenders
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each Lender on such
due date an amount equal to the amount then due such Lender. If and to the
extent that the Borrower shall not have so made such payment, each Lender shall
repay to the Administrative Agent forthwith on demand such amount distributed to
such Lender together with interest thereon, for each day from the date such
amount is distributed to such Lender until the date such Lender repays such
amount to the Administrative Agent, at the Federal Funds Rate.
SECTION 2.13. Funding Losses. If the Borrower makes any payment
of principal with respect to any Euro-Dollar Loan or any Euro-Dollar Loan is
converted (pursuant to Article 6 or 8 or otherwise) on any day other than the
last day of the Interest Period applicable thereto, or the end of an applicable
period fixed pursuant to Section 2.05(c), or if the Borrower fails to borrow,
prepay, convert into or continue any Euro-Dollar Loans after notice has been
given to any Lender in accordance with Section 2.02(b), 2.08(c) or 2.11(b), the
Borrower shall reimburse each Lender within 15 days after demand for any
resulting loss or expense incurred by it (or by an existing or prospective
Participant in the related Loan), including (without limitation) any loss
incurred in obtaining, liquidating or employing deposits from third parties, but
excluding loss of margin for the period after any such payment or failure to
borrow, prepay, convert or continue, provided that such Lender shall have
delivered to the Borrower a certificate as to the amount of such loss or
expense, which certificate shall be conclusive in the absence of manifest error.
SECTION 2.14. Computation of Interest and Fees. Interest based
on the Prime Rate hereunder shall be computed on the basis of a year of 365 days
(or 366 days in a leap year) and paid for the actual number of days elapsed
(including the first day but excluding the last day). All other interest and all
Fees shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the last
day).
ARTICLE 3
CONDITIONS
SECTION 3.01. Effectiveness. This Agreement shall become
effective on the date that each of the following conditions shall have been
satisfied (or waived in accordance with Section 9.05):
(a) the Loan Documents, including schedules, exhibits and
other support documentation, shall be satisfactory to the Lenders and
to the Administrative Agent and there shall have been delivered to
the Administrative Agent a counterpart of each of the Loan Documents
executed by each party thereto;
24
(b) the Lenders shall have reviewed, and be satisfied with,
the final terms and conditions and the documentation relating to the
Acquisition, including, without limitation, the Acquisition Documents
and the Refinancing and any amendments or other modifications
thereto, and the ownership, corporate, legal, tax, management and
capital structure of the Borrower and its Subsidiaries (after giving
effect to the Transactions). The Transactions shall be consummated
concurrently with the initial funding of the Loans in accordance with
the Acquisition Documents without waiver or amendment thereof unless
consented to by the Arranger and the Required Lenders;
(c) after giving effect to the Transactions contemplated
hereby, none of the Borrower or any of its Subsidiaries shall have
outstanding any Debt or preferred stock other than (i) Debt hereunder
and (ii) existing bank Debt of the Borrower of up to $150 million;
(d) the Lenders shall be satisfied that the aggregate
amount of the funds available to the Borrower under this Agreement
shall be sufficient to (i) consummate the Acquisition, (ii)
consummate the Refinancing, (iii) pay all fees, commissions and
expenses payable in connection with the Transactions and (iv) provide
adequate working capital and capital expenditure funds and
availability;
(e) the Lenders shall have received, reviewed and be
satisfied with (i) the financial statements described in Section
4.04, (ii) the 5-year forecasts of the financial performance of the
Borrower, the Acquired Business and their respective Subsidiaries and
(iii) the pro forma financial statements of the Borrower in the form
requested by the Administrative Agent and the Arranger;
(f) the Lenders shall be satisfied that the Acquisition,
the initial Borrowings hereunder and the other transactions
contemplated hereby shall be in full compliance with all legal
requirements, including, without limitation, Regulations T, U and X
of the Board of Governors of the Federal Reserve System, and that all
necessary governmental and third party approvals in connection with
such Borrowings, the Acquisition and such other transactions, to the
extent applicable, shall have been obtained and remain in effect;
(g) the Lenders shall have received satisfactory evidence
of compliance (to the extent applicable) with all applicable U.S.
federal, state and local laws and regulations, including all
applicable environmental laws and regulations;
(h) there shall be no litigation by any entity (private or
governmental) pending or threatened (i) with respect to this
Agreement, the other financing arrangements for the Transactions or
any other transactions contemplated hereby (including, without
limitation, the Acquisition or the Refinancing) or (ii) which the
Lenders shall reasonably determine could have a material adverse
effect on the condition (financial and other), business, operations,
25
assets, liabilities or prospects of the Borrower and its
Subsidiaries, taken as a whole, after giving effect to the
Transactions;
(i) the Lenders shall have received satisfactory legal
opinions from counsel for the Borrower substantially in the form of
Exhibit B-1 and Exhibit B-2; and
(j) all costs, fees, expenses (including, without
limitation, reasonable legal fees and expenses, the reasonable fees
and expenses of appraisers, consultants and other advisors and all
Fees payable pursuant to the Fee Letter) and other compensation
payable to the Administrative Agent or the Arranger shall have been
paid to the extent due; provided that this Agreement shall not become
effective or be binding on any party hereto unless all of the
foregoing conditions are satisfied not later than October 18, 2001.
The Administrative Agent shall promptly notify the Borrower and the
Lenders of the Closing Date, and such notice shall be conclusive and
binding on all parties hereto.
SECTION 3.02. Borrowings. The obligation of any Lender to make
a Loan on the occasion of any Borrowing is subject to the satisfaction of the
following conditions:
(a) receipt by the Administrative Agent of notice of such
Borrowing as required by Section 2.02;
(b) the fact that, immediately after such Borrowing, , the
aggregate outstanding principal amount of the Revolving Credit Loans
will not exceed the aggregate amount of the Revolving Credit
Commitments;
(c) the fact that, immediately before and after such
Borrowing, no Default or Event of Default shall have occurred and be
continuing; and
(d) the fact that the representations and warranties of the
Borrower contained in this Agreement shall be true and accurate on
and as of the date of such Borrowing.
Each submission of a Notice of Borrowing and each Borrowing
hereunder shall be deemed to be a representation and warranty by the Borrower on
the date of such submission and such Borrowing, as the case may be, as to the
facts specified in clauses (b), (c) and (d) of this Section.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The Borrower is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of New York, and has all corporate powers and all material
26
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted.
SECTION 4.02. Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by the Borrower of this
Agreement and the Notes, if any, are within the Borrower's corporate power, have
been duly authorized by all necessary corporate action, require no action by or
in respect of, or filing with, any governmental body, agency or official and do
not contravene, or constitute a default under, any provision of applicable law
or regulation or of the Restated Certificate of Incorporation or by-laws of the
Borrower or of any agreement, judgment, injunction, order, decree or other
instrument binding upon the Borrower or any Subsidiary or result in the creation
or imposition of any Lien on any asset of the Borrower or any of its
Subsidiaries.
SECTION 4.03. Binding Effect. This Agreement constitutes a
valid and binding agreement of the Borrower and each Note, if any, when executed
and delivered in accordance with this Agreement, will constitute a valid and
binding obligation of the Borrower, in each case enforceable against the
Borrower in accordance with its terms.
SECTION 4.04. Financial Information. (a) The consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries as of April 30,
2001 and the related consolidated statements of income, retained earnings and
cash flows for the fiscal year then ended, reported on by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co.,
and set forth in the Borrower's 2001 Form 10-K, a copy of which has been
delivered to each of the Lenders, fairly present, in conformity with GAAP, the
consolidated financial position of the Borrower and its Consolidated
Subsidiaries as of such date and their consolidated results of operations and
changes in financial position for such fiscal year.
(b) The unaudited consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of July 31, 2001 and the related unaudited
consolidated condensed statements of income and cash flows for the three months
then ended, set forth in the Borrower's quarterly report for the fiscal quarter
ended July 31, 2001 as filed with the Securities and Exchange Commission on
Form10-Q, a copy of which has been delivered to each of the Lenders, fairly
present, in conformity with GAAP applied on a basis consistent with the
financial statements referred to in subsection (a) of this Section 4.04, the
consolidated financial position of the Borrower and its Consolidated
Subsidiaries as of such date and their consolidated results of operations and
cash flows for such three-month period (subject to normal year-end adjustments).
(c) Since April 30, 2001 there has been no material adverse change in
the condition (financial or otherwise), business, operations, assets,
liabilities or prospects of the Borrower and its Subsidiaries, taken as a whole
(it being understood that consummation of the Acquisition does not constitute
such a change).
SECTION 4.05. Litigation. There is no action, suit or
proceeding pending against, or to the knowledge of the Borrower threatened
against or affecting, the Borrower or any of its Subsidiaries before any court
or arbitrator or any governmental body, agency or official in which there is a
27
reasonable possibility of an adverse decision which could reasonably be expected
to result in a material adverse effect on the condition (financial or
otherwise), business, operations, assets, liabilities or prospects of the
Borrower and its Subsidiaries, taken as a whole, or which in any manner draws
into question the validity or enforceability of this Agreement or the Notes.
SECTION 4.06. Compliance with ERISA. Each member of the ERISA
Group has fulfilled its obligations under the minimum funding standards of ERISA
and the Internal Revenue Code with respect to each Plan and is in compliance in
all material respects with the presently applicable provisions of ERISA and the
Internal Revenue Code with respect to each Plan. No member of the ERISA Group
has (i) sought a waiver of the minimum funding standard under Section 412 of the
Internal Revenue Code in respect of any Plan, (ii) failed to make any
contribution or payment to any Plan or Multiemployer Plan or in respect of any
Benefit Arrangement, or made any amendment to any Plan or Benefit Arrangement,
which has resulted or could result in the imposition of a Lien or the posting of
a bond or other security under ERISA or the Internal Revenue Code or (iii)
incurred any liability under Title IV of ERISA other than a liability to the
PBGC for premiums under Section 4007 of ERISA.
SECTION 4.07. Taxes. The Borrower and its Subsidiaries have
filed all United States Federal income tax returns and all other material tax
returns which are required to be filed by them and have paid all taxes due
pursuant to such returns or pursuant to any assessment received by the Borrower
or any Subsidiary. The charges, accruals and reserves on the books of the
Borrower and its Subsidiaries in respect of taxes or other governmental charges
are, in the opinion of the Borrower, adequate.
SECTION 4.08. Subsidiaries. Each of the Borrower's corporate
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted.
SECTION 4.09. Not an Investment Company. The Borrower is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
SECTION 4.10. Status of Loans. The obligations of the Borrower
under this Agreement to pay the principal of and interest on the Loans and any
and all other amounts due hereunder constitute direct, unconditional and general
obligations of the Borrower and do rank and will rank at least pari passu in
priority of payment and in all other respects with all other unsecured Debt of
the Borrower now existing.
SECTION 4.11. Environmental Matters. The Borrower has
reasonably concluded that Environmental Laws are unlikely to result in a
material adverse effect on the condition (financial or otherwise), business,
operations, assets, liabilities or prospects of the Borrower and its
Subsidiaries, taken as a whole.
28
SECTION 4.12. Liens. There are no Liens of any nature
whatsoever on any properties of the Borrower or any of its Subsidiaries other
than Liens permitted by the provisions of Section 5.06 of this Agreement.
SECTION 4.13. No Burdensome Restrictions; No Defaults. Neither
the Borrower nor any of its Subsidiaries is a party to or bound by any contract,
or subject to any charter or corporate restriction or any law, which could
reasonably be expected to result in a material adverse effect on the condition
(financial or otherwise), business, operations, assets, liabilities or prospects
of the Borrower and its Subsidiaries, taken as a whole.
SECTION 4.14. Federal Regulations. No part of the proceeds of
any Loans will be used for any purpose which violates the provisions of the
Regulations of the Board of Governors of the Federal Reserve System including,
without limitation, Regulations T, U and X of the Board of Governors of the
Federal Reserve System of the United States of America as in effect from time to
time.
SECTION 4.15. No Default. Neither the Borrower nor any of its
Subsidiaries is in default under or with respect to any of its agreements in any
respect that could reasonably be expected to result in a material adverse effect
on the condition (financial or otherwise), business, operations, assets,
liabilities or prospects of the Borrower and its Subsidiaries, taken as a whole.
SECTION 4.16. Ownership of Property. Except as could not
reasonably be expected to result in a material adverse effect on the condition
(financial or otherwise), business, operations, assets, liabilities or prospects
of the Borrower and its Subsidiaries, taken as a whole, the Borrower and each of
its Subsidiaries has title in fee simple to, or a valid leasehold interest in,
all its real property, and good title to, or a valid leasehold interest in, all
its other property.
SECTION 4.17. Intellectual Property. The Borrower and each of
its Subsidiaries own, or license or otherwise have sufficient legal rights to
use, all Intellectual Property necessary for the conduct of their business as
currently conducted. No material claim has been asserted and is pending by any
Person challenging or questioning the use of any material Intellectual Property
or the validity or effectiveness of any material Intellectual Property, nor does
the Borrower know of any valid basis for any such claim. The use of Intellectual
Property by the Borrower and its Subsidiaries does not infringe on the rights of
any Person in any material respect.
SECTION 4.18. Accuracy of Information, etc. No statement or
information contained in this Agreement, any Acquisition Document, the
Confidential Information Memorandum or any other document, certificate or
written statement furnished by or on behalf of the Borrower to the
Administrative Agent or the Lenders, or any of them, for use in connection with
the Transactions, contained as of the date such written statement, information,
document or certificate was so furnished (or, in the case of the Confidential
Information Memorandum, as of the date of this Agreement), any untrue statement
of a material fact or omitted to state a material fact necessary to make the
statements contained herein or therein not misleading. The projections,
29
including the projections and pro forma financial information contained in the
materials referenced above are based upon good faith estimates and assumptions
believed by management of the Borrower to be reasonable at the time made, it
being recognized by the Lenders that such financial information as it relates to
future events is not to be viewed as fact and that actual results during the
period or periods covered by such financial information may differ from the
projected results set forth therein. As of the date hereof, the representations
and warranties of the Borrower and, to the Borrower's knowledge, the
representations and warranties of the other parties, contained in each
Acquisition Document are true and correct in all material respects. The Lenders
acknowledge that the Borrower is only making representations on the Closing Date
in this Section 4.18 with respect to the Acquired Business to the extent of the
Borrower's actual knowledge based on the information available to the Borrower.
There is no fact known to the Borrower that could reasonably be expected to
result in a material adverse effect on the condition (financial or otherwise),
business, operations, assets, liabilities or prospects of the Borrower and its
Subsidiaries, taken as a whole, that has not been expressly disclosed herein, in
the Acquisition Documents, in the Confidential Information Memorandum or in any
other documents, certificates and statements furnished to the Administrative
Agent and the Lenders for use in connection with the Transactions.
SECTION 4.19. Solvency. Immediately after the consummation of
the Transactions to occur on the Closing Date, (a) the fair value of the assets
of the Borrower will exceed its debts and liabilities, subordinated, contingent
or otherwise; (b) the present fair saleable value of the property of the
Borrower will be greater than the amount that will be required to pay the
probable liability of its debts and other liabilities, subordinated, contingent
or otherwise, as such debts and other liabilities become absolute and matured;
(c) the Borrower will be able to pay its debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and
matured; and (d) the Borrower will not have unreasonably small capital with
which to conduct its business in which it is engaged as such business is now
conducted and is proposed to be conducted following the Closing Date.
SECTION 4.20. Absence of Undisclosed Liabilities. On the
Closing Date, neither the Borrower nor any Subsidiary of the Borrower has any
liability or obligation of any nature whatsoever (whether absolute, accrued,
contingent or otherwise, whether or not due), forward or long-term commitments
or unrealized or anticipated losses from unfavorable commitments, except (a) as
disclosed in the financial statements referred to in Section 4.04, (b)
liabilities, obligations, commitments and losses after April 31, 2001, in the
ordinary course of business and consistent with past practices and (c) as
otherwise permitted by this Agreement.
SECTION 4.21. Use of Proceeds. The proceeds of the Term Loans
will be used to finance a portion of the Acquisition, the Refinancing and to pay
fees and expenses in connection therewith. Proceeds of the Revolving Credit
Loans will also be used to finance the Acquisition and the Refinancing (not to
exceed $25 million of Borrowings on the Closing Date) and provide ongoing
working capital requirements of the Borrower and its Subsidiaries following the
Closing Date.
30
ARTICLE 5
COVENANTS
The Borrower agrees that, so long as any Lender has any
Commitment hereunder or any Loan remains unpaid:
SECTION 5.01. Information. The Borrower will deliver to each of
the Lenders:
(a) as soon as available and in any event within 90 days
after the end of each fiscal year, a consolidated balance sheet of
the Borrower and its Consolidated Subsidiaries as of the end of such
fiscal year and the related consolidated statements of income,
retained earnings and cash flows for such year, setting forth in each
case in comparative form the figures as of the end of and for the
previous fiscal year, prepared in accordance with generally accepted
accounting principles consistently applied and reported on by ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ L.L.P. or other independent public accountants of nationally
recognized standing, which report shall contain no material
exceptions or qualifications except such as are not unacceptable to
the Administrative Agent and the Lenders;
(b) as soon as available and in any event within 45 days
after the end of each of the first three quarters of each fiscal
year, a consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such fiscal quarter and
the related consolidated statements of income for such quarter and
for the portion of the fiscal year ended on the last day of such
quarter, and of cash flows for the portion of the fiscal year ended
on the last day of such quarter, setting forth in each case in
comparative form the figures as of the end of and for the
corresponding quarter of the previous fiscal year and the
corresponding portion of the previous fiscal year, prepared in
accordance with generally accepted accounting principles consistently
applied;
(c) promptly upon the filing thereof, copies of all
registration statements (excluding registration statements on Form
S-8 or any successor form) and regular and periodic reports filed by
the Borrower with the Securities and Exchange Commission (or any
governmental agency succeeding to the functions of said Commission)
or with any stock exchange on which the Borrower's securities are
traded;
(d) promptly upon the mailing thereof to the shareholders
of the Borrower, copies of all financial statements, reports and
proxy statements which the Borrower shall have sent to its
shareholders;
(e) simultaneously with each delivery of the financial
statements referred to in subsections (a) and (b) above, a
certificate dated the date of such delivery and signed by the
Treasurer or Chief Financial Officer of the Borrower (i) stating that
such financial statements have been prepared in conformity with
generally accepted accounting principles applied on a basis which,
except as disclosed therein, is consistent with the preceding year,
or the corresponding portion of the preceding year (subject in the
31
case of financial statements delivered pursuant to subsection (b)
above, to normal year-end adjustments of which none shall be
material), (ii) stating whether there existed on the date of such
financial statements or exists on the date of such certificate any
Default, and, in the case of any such Default, specifying the nature
and period of existence thereof and what action the Borrower is
taking and proposes to take with respect thereto, and (iii) stating
that the Borrower is and at all times during such period has been in
compliance with the covenants set forth in Article 5 hereof and
setting forth calculations demonstrating compliance with the
covenants set forth in Sections 5.06 and 5.09 through 5.14;
(f) simultaneously with each delivery of the consolidated
financial statements referred to in subsection (a) above, a written
statement of the independent public accountants reporting on such
consolidated financial statements to the effect that in the course of
the examination upon which their report was based they became aware
of no condition or event involving financial or accounting matters
which constitutes a Default or, if such accountants did become aware
of any such Default, specifying the nature and period of existence
thereof (it being agreed that such accountants will not be required
to conduct any special or additional audit procedures for the purpose
of enabling them to furnish such written statement);
(g) forthwith upon any Senior Officer of the Borrower
becoming aware of any Default, a certificate signed by the Treasurer
or Chief Financial Officer of the Borrower specifying the nature and
period of existence thereof and the action which the Borrower is
taking or proposes to take with respect thereto;
(h) if and when any member of the ERISA Group (i) gives or
is required to give notice to the PBGC of any "reportable event" (as
defined in Section 4043 of ERISA) with respect to any Plan which
might constitute grounds for a termination of such Plan under Title
IV of ERISA, or knows that the plan administrator of any Plan has
given or is required to give notice of any such reportable event, a
copy of the notice of such reportable event given or required to be
given to the PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA or notice that any
Multiemployer Plan is in reorganization, is insolvent or has been
terminated, a copy of such notice; (iii) receives notice from the
PBGC under Title IV of ERISA of an intent to terminate, impose
liability (other than for premiums under Section 4007 of ERISA) in
respect of, or appoint a trustee to administer, any Plan, a copy of
such notice; (iv) applies for a waiver of the minimum funding
standard under Section 412 of the Internal Revenue Code, a copy of
such application; (v) gives notice of intent to terminate any Plan
under Section 4041(c) of ERISA, a copy of such notice and other
information filed with the PBGC; (vi) gives notice of withdrawal from
any Plan pursuant to Section 4063 of ERISA, a copy of such notice; or
(vii) fails to make any payment or contribution to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement or makes
any amendment to any Plan or Benefit Arrangement which has resulted
or could result in the imposition of a Lien or the posting of a bond
or other security, a certificate of the chief financial officer or
the treasurer of the Borrower setting forth details as to such
32
occurrence and action, if any, which the Borrower or applicable
member of the ERISA Group is required or proposes to take;
(i) promptly upon the signing thereof, notice of any lease
of real or personal property under which the Borrower or any of its
Subsidiaries is obligated to make aggregate payments of $10,000,000
or more over any period of five years until the Existing Credit
Facility Expiration Date, and thereafter $20,000,000 or more over any
period of five years, which notice shall provide for inspection of
such leased property at such times as the Administrative Agent or the
Lenders may reasonably request; and
(j) such additional information regarding the business,
assets, financial condition, results of operations or prospects of
the Borrower and its Subsidiaries as the Administrative Agent, at the
request of any Lender, may reasonably request from time to time.
SECTION 5.02. Payment of Taxes; Insurance; Maintenance of
Corporate Existence. The Borrower will and will cause each Subsidiary to:
(a) pay or discharge promptly when due and payable all
taxes, assessments and other governmental charges imposed upon it or
any of its property, provided that neither the Borrower nor any
Subsidiary shall be required to pay any such tax, assessment or
governmental charge if the amount, applicability or validity thereof
is being contested in good faith by appropriate proceedings (or
payment may be made without penalty) and a reserve, if appropriate,
has been established with respect thereto;
(b) maintain adequate insurance with financially sound and
reputable insurers covering all such properties and risks as are
customarily insured by, and in such amounts as are customarily
carried by, firms engaged in similar businesses and similarly
situated; and
(c) do all things necessary to preserve and keep in full
force and effect the corporate or other organization existence,
rights and franchises of the Borrower and its Subsidiaries; provided
that this Section 5.02(c) shall not prevent the Borrower or any
Subsidiary from abandoning or disposing of any of its property or
abandoning or terminating any right or franchise if (i) such
abandonment, disposition or termination does not violate any other
provision of this Agreement and (ii) all such abandonments,
dispositions and terminations could not reasonably be expected to
result in a material adverse effect on the condition (financial or
otherwise), business, operations, assets, liabilities or prospects of
the Borrower and its Subsidiaries, taken as a whole.
33
SECTION 5.03. Maintenance of Property; Conduct of Business. (a)
The Borrower will keep, and will cause each Subsidiary to keep, all property
useful and necessary in its business in good working order and condition,
ordinary wear and tear excepted.
(b) The Borrower will continue, and will cause each Subsidiary to
continue, to engage in business of the same general type as now conducted by the
Borrower and its Subsidiaries, including the Acquired Business.
SECTION 5.04. Compliance with Laws. The Borrower will comply,
and cause each Subsidiary to comply, in all material respects with all
applicable laws, ordinances, rules, regulations, and requirements of
governmental authorities (including, without limitation, Environmental Laws and
ERISA and the rules and regulations thereunder) except where the necessity of
compliance therewith is contested in good faith by appropriate proceedings.
SECTION 5.05. Inspection of Property, Books and Records. The
Borrower will keep, and will cause each Subsidiary to keep, proper books of
record and account in which full, true and correct entries shall be made of all
dealings and transactions in relation to its business and activities; and will
permit, and will cause each Subsidiary to permit, representatives of any Lender
at such Lender's expense to visit and inspect any of their respective
properties, to examine and make abstracts from any of their respective books and
records and to discuss their respective affairs, finances and accounts with
their respective officers, employees and independent public accountants, all at
such reasonable times and as often as may reasonably be desired.
SECTION 5.06. Limitation on Liens. The Borrower will not, and
will not permit any Subsidiary to, create, assume or suffer to be created,
assumed or incurred or to exist any Lien upon any property or assets of the
Borrower or any Subsidiary (whether now owned or hereafter acquired) other than:
(a) Liens securing taxes, assessments or other governmental
charges to the extent non-payment thereof is permitted by Section
5.02(a);
(b) Liens incurred in the ordinary course of business in
connection with the workmen's compensation, unemployment insurance
and other social security obligations;
(c) Liens incurred in the ordinary course of business but
not incurred in connection with the borrowing of money, the
incurrence of Derivatives Obligations, the obtaining of advances or
the payment of the deferred purchase price of any property or assets,
including, without limitation, Liens securing:
(i) claims of mechanics, workmen, materialmen or
other similar persons in respect of obligations not
yet due or being contested in good faith by
appropriate proceedings, or
34
(ii) the performance of bids, tenders or contracts
which in the aggregate do not detract in any material
respect from the value of the property or assets of
the Borrower or any Subsidiary or impair in any
material respect the use thereof in the operation of
the business of the Borrower or any Subsidiary, or
(iii) leases (including equipment leases), public or
statutory obligations (other than the obligations
referred to in paragraph (a) above), surety and
appeal bonds or other similar obligations;
provided that the aggregate obligations secured by such Liens shall
not exceed $15,000,000 until the Existing Credit Facility Expiration
Date, and thereafter $25,000,000;
(d) Liens existing as of the date of this Agreement;
provided that no such Lien shall extend to any property other than
the property as to which such Lien was in effect as of such date and
the Debt secured by such Lien shall not be increased, renewed or
extended;
(e) Liens on property to secure the payment of all or any
part of the purchase price thereof or to secure any Debt, incurred
prior to, at the time of, or within 90 days after the acquisition of
such property, for the purpose of financing all or any part of the
purchase price of such property; provided (i) that in no event shall
the amount of Debt secured by any such Lien exceed 75% of the
purchase price or fair market value at the time of acquisition of the
property subject to such Lien, whichever is less, (ii) that any such
Lien does not extend to property other than the property purchased or
financed in connection with which such Lien was created and (iii)
that the aggregate outstanding principal amount of all such Debt
shall not exceed $15,000,000 until the Existing Credit Facility
Expiration Date, and thereafter $25,000,000;
(f) Liens on property or assets of any Subsidiary operating
outside the United States securing Debt of such Subsidiary;
(g) Liens on fixed assets securing Debt not otherwise
permitted; provided that the aggregate outstanding principal amount
of all Debt secured by Liens permitted by this paragraph and by
paragraphs (d) and (e) above shall not exceed the greater of (i)
$4,000,000 or (ii) 25% of the excess of consolidated net fixed assets
over net fixed assets subject to Liens permitted by paragraph (f)
above;
(h) Liens on cash and cash equivalents securing Derivatives
Obligations, provided that the aggregate amount of cash and cash
equivalents subject to such Liens may at no time exceed $10,000,000;
and
(i) Liens not otherwise permitted by the foregoing clauses
of this Section 5.06 securing Debt in an aggregate principal amount
at any time outstanding not to exceed 5% of Consolidated Net Worth.
35
SECTION 5.07. Consolidations, Mergers and Sales of Assets. The
Borrower will not (i) consolidate or merge with or into any other Person or (ii)
sell, lease or otherwise transfer, directly or indirectly, all or any
substantial part of the assets of the Borrower and its Subsidiaries, taken as a
whole, to any other Person (other than property held for sale in the ordinary
course of business); provided that the Borrower may merge with another Person if
(A) the Borrower is the corporation surviving such merger and (B) immediately
after giving effect to such merger, no Default shall have occurred and be
continuing.
SECTION 5.08. Use of Proceeds. The proceeds of the Term Loans
will be used to finance a portion of the Acquisition, the Refinancing and to pay
fees and expenses in connection therewith. Proceeds of the Revolving Credit
Loans will also be used to finance the Acquisition and the Refinancing (not to
exceed $25 million of Borrowings on the Closing Date) and provide ongoing
working capital requirements of the Borrower and its Subsidiaries following the
Closing Date.. None of such proceeds will be used in violation of any applicable
law or regulation.
SECTION 5.09. Subsidiary Debt. Subsidiary Debt will at no time
exceed an amount equal to (i) 25% of Consolidated Net Worth at such time minus
(ii) the aggregate principal amount of Debt of the Borrower outstanding at such
time secured by a Lien permitted solely under paragraph (i) of Section 5.06.
SECTION 5.10. Consolidated Shareholders' Equity. Consolidated
Shareholders' Equity will at no time be less than the sum of (i) $70,000,000
plus (ii) an amount equal to 25% of Consolidated Net Income for each fiscal year
of the Borrower ending after May 1, 1996 and on or prior to the date of
determination, in each case, for which Consolidated Net Income is positive (but
with no deduction on account of negative Consolidated Net Income for any fiscal
year of the Borrower).
SECTION 5.11. Debt to Subsidiaries. The Borrower will not incur
any Debt owing to any Subsidiary unless the same shall be for cash advances from
such Subsidiary and shall be subordinated and subject in right to the prior
payment in full of the Loans.
SECTION 5.12. EBIT/Interest Ratio. The EBIT/Interest Ratio will
not, at the last day of any fiscal quarter, be less than 2.0 to 1.0.
SECTION 5.13. Leverage Ratio. The Leverage Ratio will at no
time exceed 3.5 to 1.0.
SECTION 5.14. Restricted Payments and Guarantees. The Borrower
will not, directly or indirectly, make any Restricted Payment and will not
permit any Subsidiary to make any Restricted Guarantee unless, after giving
effect to any such action,
(i) the aggregate of all (A) Restricted Payments made
during the period commencing on May 1, 1996 and ending on and including the date
of such action ("COMPUTATION PERIOD") and (B) Restricted Guarantees of the
Borrower and its Subsidiaries existing on the date of such action, shall not
36
exceed (x) $50,000,000 plus (y) 85% (or in the case of a net loss, minus 100%)
of Consolidated Net Income accumulated for the Computation Period plus (z) after
the Existing Credit Facility Expiration Date, 100% of capital received by the
Borrower from the issue or sale after the Closing Date of Capital Stock of the
Borrower or of debt securities of the Borrower that have been converted into
such Capital Stock, and
(ii) no Default shall have occurred and be continuing.
The Borrower will not declare any dividend on any of its shares payable more
than 90 days after the declaration date. The Borrower will not permit any
Subsidiary to make any Restricted Payment.
SECTION 5.15. Limitation on Accounting Changes. The
Borrower will not make or permit, any change in accounting policies (other than
de minimus changes), without the consent of the Administrative Agent, which
consent shall not be unreasonably withheld, except changes that are required by
GAAP; provided, the Borrower shall notify Administrative Agent of any such
required changes and hereby agrees to amend the provisions of this Agreement in
a manner necessary to reflect the effects of such changes.
SECTION 5.16. Fiscal Year. The Borrower will not change its
fiscal year-end to a date other than April 30 without the consent of the
Administrative Agent, which consent shall not be unreasonably withheld.
ARTICLE 6
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the
following events ("Events of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal
of any Loan or shall fail to pay within five Domestic Business Days
of the due date thereof any interest, fees or other amount payable
hereunder;
(b) the Borrower shall fail to observe or perform any
covenant contained in Sections 5.06 to 5.14, inclusive;
(c) the Borrower shall fail to observe or perform any
covenant or agreement contained in this Agreement (other than those
covered by clause (a) or (b) above) or in the Fee Letter for 30 days
after notice thereof has been given to the Borrower by the
Administrative Agent at the request of any Lender;
(d) any representation, warranty, certification or
statement made by the Borrower in this Agreement or in any
certificate, financial statement or other document delivered pursuant
37
to this Agreement shall prove to have been incorrect in any material
respect when made (or deemed made);
(e) the Borrower or any Subsidiary shall fail to pay when
due, or within any applicable period of grace, any obligation with
respect to Material Debt or Material Financial Obligations; or any
event or condition referred to in any instrument or agreement
evidencing or securing or relating to any obligation with respect to
Material Debt or Material Financial Obligations of the Borrower or
any Subsidiary shall have occurred and be continuing which would
cause, or would permit (assuming the giving of appropriate notice if
required) any Person to cause, such obligation to become due and
payable prior to its stated maturity or the obligations of the
Borrower or any Subsidiary under any obligation with respect to
Material Debt or Material Financial Obligations to become due and
payable;
(f) the Borrower or any Subsidiary shall commence a
voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or
any substantial part of its property, or shall consent to any such
relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against
it, or shall make a general assignment for the benefit of creditors,
or shall fail generally to pay its debts as they become due, or shall
take any corporate action to authorize any of the foregoing;
(g) an involuntary case or other proceeding shall be
commenced against the Borrower or any Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under
any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of
its property, and such involuntary case or other proceeding shall
remain undismissed and unstayed for a period of 60 days; or an order
for relief shall be entered against the Borrower or any Subsidiary
under the federal bankruptcy laws or other similar laws as now or
hereafter in effect;
(h) any member of the ERISA Group shall fail to pay within
30 days of the date when due an amount or amounts aggregating in
excess of $1,000,000 which it shall have become liable to pay under
Title IV of ERISA; or notice of intent to terminate a Material Plan
shall be filed under Title IV of ERISA by any member of the ERISA
Group, any plan administrator or any combination of the foregoing; or
the PBGC shall institute proceedings under Title IV of ERISA to
terminate, to impose liability (other than for premiums under Section
4007 of ERISA) in respect of, or to cause a trustee to be appointed
to administer, any Material Plan; or a condition shall exist by
reason of which the PBGC would be entitled to obtain a decree
adjudicating that any Material Plan must be terminated, or there
shall occur a complete or partial withdrawal from, or a default,
within the meaning of Section 4219(c)(5) of ERISA, with respect to,
38
one or more Multiemployer Plans which could cause one or more members
of the ERISA Group to incur a current payment obligation in excess of
$10,000,000;
(i) a judgment or order for the payment of money in excess
of $1,000,000 until the Existing Credit Facility Expiration Date, and
thereafter $2,000,000shall be rendered against the Borrower or any
Subsidiary and such judgment or order shall continue unsatisfied and
unstayed for a period of 30 days; or
(j) a Change of Control shall occur;
then, and in every such event, the Administrative Agent shall (i) if requested
by Lenders having more than 50% in aggregate amount of the Commitments, by
notice to the Borrower terminate the Commitments and they shall thereupon
terminate, and (ii) if requested by Lenders holding Loans evidencing more than
50% in aggregate principal amount of the Loans, by notice to the Borrower
declare the Loans (together with accrued interest thereon) to be, and the Loans
(together with accrual interest thereon) shall thereupon become, immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower; provided that in the case of any
of the Events of Default specified in clause (f) or (g) above with respect to
the Borrower, without any notice to the Borrower or any other act by the
Administrative Agent or the Lenders, the Commitments shall thereupon terminate
and the Loans (together with accrued interest thereon) shall become immediately
due and payable without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrower.
SECTION 6.02. Notice of Default. The Administrative Agent shall
give notice to the Borrower under Section 6.01(c) promptly upon being requested
to do so by any Lender and shall thereupon notify all the Lenders thereof.
ARTICLE 7
THE ADMINISTRATIVE AGENT
SECTION 7.01. Appointment and Authorization. Each Lender
irrevocably appoints and authorizes the Administrative Agent to take such action
as agent on its behalf and to exercise such powers under this Agreement and the
Notes as are delegated to the Administrative Agent by the terms hereof or
thereof, together with all such powers as are reasonably incidental thereto.
SECTION 7.02. Administrative Agent and Affiliates. UBS AG,
Stamford Branch and its Affiliates may accept deposits from, lend money to, and
generally engage in any kind of business with the Borrower or any Subsidiary or
Affiliates of the Borrower as if it were not the Administrative Agent hereunder.
SECTION 7.03. Action by Administrative Agent and Arranger .
Notwithstanding any provision to the contrary elsewhere in this Agreement, (i)
the Arranger shall not have any duties or obligations or any fiduciary
39
relationship with any Lender or the Borrower and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any of the Loan Documents or otherwise exist against the
Arranger and (ii) the Administrative Agent shall not have any duties or
obligations, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any of the Loan Documents or otherwise exist against Administrative
Agent. Without limiting the generality of the foregoing, the Administrative
Agent shall not be required to take any action with respect to any Default,
except as expressly provided in Article 6.
SECTION 7.04. Consultation with Experts. The Administrative
Agent may consult with legal counsel (who may be counsel for the Borrower),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or experts.
SECTION 7.05. Liability of Administrative Agent. Neither the
Administrative Agent nor any of its Affiliates nor any of their respective
directors, officers, agents or employees shall be liable for any action taken or
not taken by it in connection herewith (i) with the consent or at the request of
the Required Lenders or (ii) in the absence of its own gross negligence or
willful misconduct. Neither the Administrative Agent nor any of its Affiliates
nor any of their respective directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into or verify (i) any
statement, warranty or representation made in connection with this Agreement or
any borrowing hereunder; (ii) the performance or observance of any of the
covenants or agreements of the Borrower; (iii) the satisfaction of any condition
specified in Article 3 or (iv) the validity, effectiveness or genuineness of
this Agreement, the Notes, if any, or any other instrument or writing furnished
in connection herewith. The Administrative Agent shall not incur any liability
by acting in reliance upon any notice, consent, certificate, statement, or other
writing (which may be a bank wire, facsimile or similar writing) believed by it
to be genuine or to be signed by the proper party or parties. Without limiting
the generality of the foregoing, the use of the term "agent" in this Agreement
with reference to the Administrative Agent is not intended to connote any
fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable law. Instead, such term is used merely as a matter of
market custom and is intended to create or reflect only an administrative
relationship between independent contracting parties.
SECTION 7.06. Indemnification. Each Lender shall, ratably in
accordance with its Commitment, indemnify the Administrative Agent, its
Affiliates and their respective directors, officers, agents and employees (to
the extent not reimbursed by the Borrower) against any cost, expense (including
counsel fees and disbursements), claim, demand, action, loss or liability
(except such as result from such indemnitees' gross negligence or willful
misconduct) that such indemnitees may suffer or incur in connection with this
Agreement or any action taken or omitted by such indemnitees hereunder.
40
SECTION 7.07. Credit Decision. Each Lender acknowledges that it
has, independently and without reliance upon the Administrative Agent or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking any action under this
Agreement.
SECTION 7.08. Successor Administrative Agent. The
Administrative Agent may resign at any time by giving notice thereof to the
Lenders and the Borrower. Upon any such resignation, the Required Lenders shall
have the right, subject to approval by the Borrower, to appoint a successor
Administrative Agent, provided that approval of such successor Administrative
Agent by the Borrower shall not be unreasonably withheld. If no successor
Administrative Agent shall have been so appointed by the Required Lenders, and
shall have accepted such appointment, within 30 days after the retiring
Administrative Agent gives notice of resignation, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which shall be a commercial bank organized or licensed
under the laws of the United States of America or of any State thereof and
having a combined capital and surplus of at least $50,000,000. Upon the
acceptance of its 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 and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder. After any retiring Administrative
Agent's resignation hereunder as Administrative Agent, the provisions of this
Article 7 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent.
ARTICLE 8
CHANGE IN CIRCUMSTANCE
SECTION 8.01. Basis for Determining Interest Rate Inadequate or
Unfair. If on or prior to the first day of any Interest Period for any
Euro-Dollar Loan:
(a) there is no quote obtainable and the Administrative
Agent determines that deposits in dollars (in the applicable amounts)
are not being offered to the Administrative Agent in the relevant
market for such Interest Period, or
(b) Lenders having 50% or more of the aggregate amount of
the Loans advise the Administrative Agent that the Adjusted London
Interbank Offered Rate as determined by the Administrative Agent will
not adequately and fairly reflect the cost to such Lenders of funding
their Euro-Dollar Loans for such Interest Period;
41
the Administrative Agent shall forthwith give notice thereof to the
Borrower and the Lenders, whereupon until the Administrative Agent notifies the
Borrower that the circumstances giving rise to such suspension no longer exist,
(i) the obligations of the Lenders to make Euro-Dollar Loans, or to continue or
convert outstanding Loans as or into Euro-Dollar Loans shall be suspended and
(ii) each outstanding Euro-Dollar Loan shall be converted into a Base Rate Loan
on the last day of the then current Interest Period applicable thereto. Unless
the Borrower notifies the Administrative Agent at least two Domestic Business
Days before the date of any Euro-Dollar Borrowing for which a Notice of
Borrowing has previously been given that it elects not to borrow on such date,
such Borrowing shall instead be made as a Base Rate Borrowing.
SECTION 8.02. Illegality. If, on or after the date of this
Agreement, the adoption of any applicable law, rule or regulation, 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 Lender (or its Euro-Dollar Lending Office) with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency shall make it unlawful or impossible for any
Lender (or its Euro-Dollar Lending Office) to make, maintain or fund its
Euro-Dollar Loans and such Lender shall so notify the Administrative Agent, the
Administrative Agent shall forthwith give notice thereof to the other Lenders
and the Borrower, whereupon until such Lender notifies the Borrower and the
Administrative Agent that the circumstances giving rise to such suspension no
longer exist, the obligation of such Lender to make Euro-Dollar Loans, or to
convert outstanding Loans into Euro-Dollar Loans, shall be suspended. Before
giving any notice to the Administrative Agent pursuant to this Section, such
Lender shall designate a different Euro-Dollar Lending Office if such
designation will avoid the need for giving such notice and will not, in the
judgment of such Lender, be otherwise disadvantageous to such Lender. If such
notice is given, each Euro-Dollar Loan of such Lender then outstanding shall be
converted to a Base Rate Loan either (a) on the last day of the then current
Interest Period applicable to such Euro-Dollar Loan if such Lender may lawfully
continue to maintain and fund such Loan to such day or (b) immediately if such
Lender shall determine that it may not lawfully continue to maintain and fund
such Loan to such day.
SECTION 8.03. Increased Cost and Reduced Return. (a) If on or
after the date hereof, the adoption of any applicable law, rule or regulation,
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 Lender (or its Applicable Lending Office) with any
request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency shall impose, modify or deem
applicable any reserve, special deposit, requirement (including, without
limitation, any insurance assessment or similar requirement (including, without
limitation, any such requirement imposed by the Board of Governors of the
Federal Reserve System, but excluding with respect to any Euro-Dollar Loan any
such requirement included in an applicable Euro-Dollar Reserve Percentage)
against assets of, deposits with or for the account of, or credit extended by,
any Lender (or its Applicable Lending Office) or shall impose on any Lender (or
its Applicable Lending Office) or on the London interbank market any other
42
condition affecting its Euro-Dollar Loans, its Notes, if any, or its obligation
to make Euro-Dollar Loans; and the result of any of the foregoing is to increase
the cost to such Lender (or its Applicable Lending Office) of making or
maintaining any Euro-Dollar Loan, or to reduce the amount of any sum received or
receivable by such Lender (or its Applicable Lending Office) under this
Agreement or under its Notes, if any, with respect thereto, by an amount deemed
by such Lender to be material, then, within 15 days after demand by such Lender
(with a copy to the Administrative Agent), the Borrower shall pay to such Lender
such additional amount or amounts as will compensate such Lender for such
increased cost or reduction.
(b) If any Lender shall have determined that, after the date hereof,
the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change in any such 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 any request or directive 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 capital of such Lender (or its Parent) as a consequence of such Lender's
obligations hereunder to a level below that which such Lender (or its Parent)
could have achieved but for such adoption, change or compliance (taking into
consideration its policies with respect to capital adequacy) by an amount deemed
by such Lender to be material, then from time to time, within 15 days after
demand by such Lender (with a copy to the Administrative Agent), the Borrower
shall pay to such Lender such additional amount or amounts as will compensate
such Lender (or its Parent) for such reduction.
(c) Each Lender will promptly notify the Borrower and the
Administrative Agent of any event of which it has knowledge, occurring after the
date hereof, which will entitle such Lender to compensation pursuant to this
Section 8.03 and will designate a different Applicable Lending Office if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the judgment of such Lender, be otherwise disadvantageous to
such Lender. A certificate of any Lender claiming compensation under this
Section 8.03 and setting forth the additional amount or amounts to be paid to it
hereunder shall be conclusive in the absence of manifest error. In determining
such amount, such Lender may use any reasonable averaging and attribution
methods.
SECTION 8.04. Taxes. (a) For the purposes of this Section 8.04
the following terms have the following meanings:
"TAXES" means any and all present or future taxes, duties,
levies, imposts, deductions, charges or withholdings with respect to any payment
by the Borrower pursuant to this Agreement or under any Note, and all
liabilities with respect thereto, excluding (i) in the case of each Lender and
the Administrative Agent, taxes imposed on its income, and franchise taxes
imposed on it, by a jurisdiction under the laws of which such Lender or the
Administrative Agent (as the case may be) is organized or in which its principal
executive office is located or, in the case of each Lender, in which its
Applicable Lending Office is located and (ii) in the case of each Lender, any
43
United States withholding tax imposed on such payments but only to the extent
that such Lender is subject to United States withholding tax at the time such
Lender first becomes a party to this Agreement.
"OTHER TAXES" means any present or future stamp, mortgage
recording or documentary taxes and any other excise or
property taxes, or similar charges or levies, which arise from any payment made
pursuant to this Agreement or under any Note or from the execution or delivery
or enforcement of, or otherwise with respect to, this Agreement or any Note.
(b) Any and all payments by the Borrower to or for the account of any
Lender or the Administrative Agent hereunder or under any Note shall be made
without deduction for any Taxes or Other Taxes; provided that, if the Borrower
shall be required by law to deduct any Taxes or Other Taxes from any such
payments, (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section) such Lender or the Administrative Agent (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower shall make such deductions, (iii)
the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law and (iv) the
Borrower shall furnish to the Administrative Agent, at its address referred to
in Section 9.01, the original or a certified copy of a receipt evidencing
payment thereof.
(c) The Borrower agrees to indemnify each Lender and the
Administrative Agent for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section) paid by such Lender or the
Administrative Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto.
This indemnification shall be paid within 15 days after such Lender or the
Administrative Agent (as the case may be) makes demand therefor.
(d) Each Lender organized under the laws of a jurisdiction outside
the United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Lender listed on the signature pages hereof and on
or prior to the date on which it becomes a Lender in the case of each other
Lender, and from time to time thereafter if requested in writing by the Borrower
(but only so long as such Lender remains lawfully able to do so), shall provide
the Borrower and the Administrative Agent with Internal Revenue Service Form
W-8BEN or W-8ECI, as appropriate, or any successor form prescribed by the
Internal Revenue Service, certifying that such Lender is entitled to benefits
under an income tax treaty to which the United States is a party which exempts
the Lender from United States withholding tax or reduces the rate of withholding
tax on payments of interest for the account of such Lender or certifying that
the income receivable pursuant to this Agreement is effectively connected with
the conduct of a trade or business in the United States.
(e) For any period with respect to which a Lender has failed to
provide the Borrower or the Administrative Agent with the appropriate form
pursuant to Section 8.04(d) (unless such failure is due to a change in treaty,
44
law or regulation occurring subsequent to the date on which such form originally
was required to be provided), such Lender shall not be entitled to
indemnification under Section 8.04(b) or 8.04(c) with respect to Taxes imposed
by the United States; provided that if a Lender, which is otherwise exempt from
or subject to a reduced rate of withholding tax, becomes subject to Taxes
because of its failure to deliver a form required hereunder, the Borrower shall
take such steps as such Lender shall reasonably request to assist such Lender to
recover such Taxes.
(f) If the Borrower is required to pay additional amounts to or for
the account of any Lender pursuant to this Section 8.04, then such Lender will
change the jurisdiction of its Applicable Lending Office if, in the judgment of
such Lender, such change (i) will eliminate or reduce any such additional
payment which may thereafter accrue and (ii) is not otherwise disadvantageous to
such Lender.
(g) In the event any Lender or the Administrative Agent receives a
refund or credit in respect of Taxes or Other Taxes paid or indemnified by the
Borrower pursuant to this Section 8.04, such Lender or the Administrative Agent,
as the case may be, shall, to the extent it can do so without jeopardizing its
right to such refund or credit, pay over to the Borrower an amount that would
leave such Lender or the Administrative Agent, as the case may be, in the same
position as if no such Tax or Other Tax had been imposed.
SECTION 8.05. Base Rate Loans Substituted for Euro-Dollar
Loans. If (i) the obligation of any Lender to make or convert outstanding Loans
to, Euro-Dollar Loans has been suspended pursuant to Section 8.02 or (ii) any
Lender has demanded compensation under Section 8.03(a) or 8.04 with respect to
its Euro-Dollar Loans and the Borrower shall, by at least five Euro-Dollar
Business Days' prior notice to such Lender through the Administrative Agent,
have elected that the provisions of this Section 8.05 shall apply to such
Lender, then, unless and until such Lender notifies the Borrower that the
circumstances giving rise to such suspension or demand for compensation no
longer apply:
(a) all Loans which would otherwise be made by such Lender
as (or continued as or converted into) Euro-Dollar Loans shall
instead be Base Rate Loans on which interest and principal shall be
payable contemporaneously with the related Euro-Dollar Loans of the
other Lenders), and
(b) after each of its Euro-Dollar Loans has been repaid (or
converted to a Base Rate Loan), all payments of principal which would
otherwise be applied to repay such Euro-Dollar Loans shall be applied
to repay its Base Rate Loans instead.
If such Lender notifies the Borrower that the circumstances giving rise to such
notice no longer apply, the principal amount of each such Base Rate Loan shall
be converted into a Euro-Dollar Loan on the first day of the next succeeding
Interest Period applicable to the related Euro-Dollar Loans of the other
Lenders.
45
SECTION 8.06. Substitution of Lender. If (i) the obligation of
any Lender to make or maintain Euro-Dollar Loans has been suspended pursuant to
Section 8.02 or (ii) any Lender has demanded compensation under Section 8.03 or
8.04, the Borrower shall have the right, with the assistance of the
Administrative Agent, to designate an Assignee which is a bank or other
financial institution to purchase for cash, pursuant to an instrument executed
by such Assignee and such Lender, the outstanding Loans and Commitment(s) of
such Lender and to assume all of such Lender's other rights and obligations
hereunder without recourse to or warranty by such Lender, for a purchase price
equal to the principal amount of all of such Lender's outstanding Loans plus any
accrued but unpaid interest thereon and the accrued but unpaid Fees in respect
of such Lender's Commitment(s) hereunder plus such amount, if any, as would be
payable pursuant to Section 2.13 if the outstanding Loans of such Lender were
prepaid in their entirety on the date of consummation of such assignment, plus
the compensation then due and payable pursuant to Sections 8.03 and 8.04.
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including bank wire, facsimile
transmission or similar writing) and shall be given to such party: (x) in the
case of the Borrower or the Administrative Agent, at its address or facsimile
number set forth on the signature pages hereof, (y) in the case of any Lender,
at its address or facsimile number set forth in its Administrative Questionnaire
or (z) in the case of any party, such other address or facsimile number as such
party may hereafter specify for the purpose by notice to the Administrative
Agent and the Borrower. Each such notice, request or other communication shall
be effective (i) if given by mail, 72 hours after such communication is
deposited in the mails with first class postage prepaid, addressed as aforesaid
or (ii) if given by any other means (including facsimile), when received at the
address specified in this Section; provided that notices to the Administrative
Agent under Article 2 or Article 8 shall not be effective until received.
SECTION 9.02. No Waivers. No failure or delay by the
Administrative Agent or any Lender in exercising any right, power or privilege
hereunder or under any Note shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
SECTION 9.03. Expenses; Documentary Taxes; Indemnification. (a)
The Borrower shall pay (i) all reasonable out-of-pocket expenses (including but
not limited to reasonable legal fees and expenses of counsel to the
Administrative Agent and expenses incurred in connection with due diligence and
travel, courier, reproduction, printing and delivery expenses) of Arranger and
Administrative Agent and with the preparation, execution, delivery,
administration, amendment, waiver or modification (including proposed
amendments, waivers or modifications) of the Loan Documents, (ii) all
46
documentary tax charges relating to any Loan Documents and (iii) out-of-pocket
expenses incurred by the Administrative Agent or any Lender, including
reasonable fees and disbursements of counsel, in connection with any workout
proceeding, collection and other enforcement proceedings resulting therefrom.
(b) The Borrower agrees to indemnify the Administrative Agent and
each Lender, their respective Affiliates and the respective directors, officers,
agents and employees of the foregoing (each an "INDEMNITEE") and hold each
Indemnitee harmless from and against any and all liabilities, damages, costs and
expenses of any kind (including, without limitation, the reasonable fees and
disbursements of counsel for any Indemnitee in connection with any
investigative, administrative or judicial proceeding, whether or not such
Indemnitee shall be designated a party thereto) which may be incurred by any
Indemnitee, relating to or arising out of this Agreement or any actual or
proposed use of proceeds of Loans hereunder; provided that no Indemnitee shall
have the right to be indemnified hereunder to the extent determined by a final
judgment of a court of competent jurisdiction to have been incurred solely by
reason of the gross negligence or willful misconduct of such Person. The
Borrower shall not be liable for any settlement effected without the Borrower's
consent, which consent shall not be unreasonably withheld.
SECTION 9.04. Sharing of Set-Offs. Each Lender agrees that if
it shall, by exercising any right of set-off or counterclaim or otherwise,
receive payment of a proportion of the aggregate amount of principal and
interest due with respect to any Loan held by it which is greater than the
proportion received by any other Lender in respect of the aggregate amount of
principal and interest due with respect to any Loan held by such other Lender,
the Lender receiving such proportionately greater payment shall purchase such
participation in the Loans held by the other Lenders, and such other adjustments
shall be made, as may be required so that all such payments of principal and
interest with respect to the Loans held by the Lenders shall be shared by the
Lenders pro rata; provided that nothing in this Section 9.04 shall impair the
right of any Lender to exercise any right of set-off or counterclaim it may have
and to apply the amount subject to such exercise to the payment of indebtedness
of the Borrower other than its indebtedness under the Loans. The Borrower
agrees, to the fullest extent it may effectively do so under applicable law,
that any holder of a participation in a Loans, whether or not acquired pursuant
to the foregoing arrangements, may exercise rights of set-off or counterclaim
and other rights with respect to such participation as fully as if such holder
of a participation were a direct creditor of the Borrower in the amount of such
participation.
SECTION 9.05. Amendments and Waivers. Any provision of this
Agreement or the Notes may be amended or waived if, but only if, such amendment
or waiver is in writing and is signed by the Borrower and the Required Lenders
(and, if the rights or duties of the Administrative Agent are affected thereby,
by the Administrative Agent); provided that no such amendment or waiver shall,
unless signed by all the Lenders, (i) increase or decrease any Commitment of any
Lender (except for a ratable decrease in the Commitments of all Lenders) or
subject any Lender to any additional obligation, (ii) reduce the principal of,
accrued interest on, or rate of interest on, any Loan or any fees hereunder,
(iii) postpone the date fixed for any payment of principal of or interest on any
47
Loan or any fees hereunder or for termination of any Commitment or (iv) change
the percentage of the Commitments or of the aggregate unpaid principal amount of
the Loans, or the number of Lenders, which shall be required for the Lenders or
any of them to take any action under this Section 9.05 or any other provision of
this Agreement.
SECTION 9.06. Successors and Assigns. (a) The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns, except that the Borrower may
not assign or otherwise transfer any of its rights under this Agreement without
the prior written consent of all Lenders.
(b) Any Lender may at any time grant to one or more banks or other
institutions (each a "PARTICIPANT") participating interests in any or all of its
Commitments or any or all of its Loans. In the event of any such grant by a
Lender of a participating interest to a Participant, whether or not upon notice
to the Borrower and the Administrative Agent, such Lender shall remain
responsible for the performance of its obligations hereunder, and the Borrower
and the Administrative Agent shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under this
Agreement. Any agreement pursuant to which any Lender may grant such a
participating interest shall provide that such Lender shall retain the sole
right and responsibility to enforce the obligations of the Borrower hereunder,
including, without limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement pursuant to Section 9.05; provided
that such participation agreement may provide that such Lender will not agree to
any modification, amendment or waiver of this Agreement described in clause (i),
(ii) or (iii) of Section 9.05 without the consent of the Participant. The
Borrower agrees that each Participant shall, to the extent provided in its
participation agreement, be entitled to the benefits of Article 8 with respect
to its participating interest.
(c) Any Lender may at any time assign to one or more banks or other
institutions (each an "ASSIGNEE") all, or a proportionate part of all, of its
rights and obligations under this Agreement with the consent of the Borrower
(which consent shall not be (x) unreasonably withheld or delayed or (y) required
upon the occurrence and during the continuance of a Default or Event of
Default), and such Assignee shall assume such rights and obligations, pursuant
to an instrument executed by such Assignee and such transferor Lender, with
notice to the Borrower and subject to the consent of the Administrative Agent;
provided that if an Assignee is a Lender or an Affiliate of such transferor
Lender, no such consent of either the Borrower or Administrative Agent shall be
required; and provided further that any assignment shall not be less than
$5,000,000, or if less, shall constitute an assignment of all of such Lender's
rights and obligations under this Agreement. Upon execution and delivery of (x)
such an instrument and payment by such Assignee to such transferor Lender of an
amount equal to the purchase price agreed between such transferor Lender and
such Assignee and (y) such an instrument to the Administrative Agent and (except
if an Assignee is a Lender or an Affiliate of such transferor Lender) with a
processing and recordation fee of $3,500 for the account of the Administrative
Agent, such Assignee shall be a Lender party to this Agreement and shall have
48
all the rights and obligations of a Lender with a Commitment as set forth in
such instrument of assumption, and the transferor Lender shall be released from
its obligations hereunder to a corresponding extent, and no further consent or
action by any party shall be required. Upon the consummation of any assignment
pursuant to this subsection (c), the transferor Lender, the Administrative Agent
and the Borrower shall make appropriate arrangements so that, if requested, a
new Note is issued to the Assignee and if the transferor Lender holds Notes,
such Notes shall be returned by the transferor Lender to the Borrower marked
"cancelled". If the Assignee is not incorporated under the laws of the United
States of America or a State thereof, it shall, prior to the first date on which
interest or fees are payable hereunder for its account, deliver to the Borrower
and the Administrative Agent certification as to exemption from deduction or
withholding of any United States federal income taxes in accordance with Section
8.04.
(d) Any Lender may at any time assign all or any portion of its
rights under this Agreement and its Loans to a Federal Reserve Bank. No such
assignment shall release the transferor Lender from its obligations hereunder.
(e) No Assignee, Participant or other transferee of any Lender's
rights shall be entitled to receive any greater payment under Section 8.03 or
8.04 than such Lender would have been entitled to receive with respect to the
rights transferred, unless such transfer is made with the Borrower's prior
written consent to the extent required or by reason of the provisions of Section
8.02, 8.03 or 8.04 requiring such Lender to designate a different Applicable
Lending Office under certain circumstances or at a time when the circumstances
giving rise to such greater payment did not exist.
SECTION 9.07. Collateral. Each of the Lenders represents to the
Administrative Agent and each of the other Lenders that it in good faith is not
relying upon any "margin stock" (as defined in Regulation U) as collateral in
the extension or maintenance of the credit provided for in this Agreement.
SECTION 9.08. New York Law. This Agreement and each Note shall
be construed in accordance with and governed by the law of the State of New
York. Each party to the Loan Documents waives the right to trial by jury and
consents to jurisdiction of the state and federal courts located in The City of
New York.
SECTION 9.09. Counterparts; Integration. This Agreement may be
signed in any number of counterparts, each of which shall be an original or
facsimile copy, with the same effect as if the signatures thereto and hereto
were upon the same instrument. This Agreement and the Fee Letter constitute the
entire agreement and understanding among the parties hereto and supersedes any
and all prior agreements and understandings, oral or written, relating to the
subject matter hereof.
49
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
▇▇▇▇ ▇▇▇▇▇ & SONS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President, Chief
Financial and Operations Officer
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇
50
UBS AG, STAMFORD BRANCH,
as Administrative Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. Saint
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. Saint
Title: Associate Director
Banking Products Services, US
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇ III
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇ III
Title: Executive Director
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone number: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇
51
Commitments
Term Loan Commitment UBS AG, STAMFORD BRANCH,
as a Lender
$200,000,000
Revolving Credit Commitment By: /s/ ▇▇▇▇▇▇▇ ▇. Saint
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. Saint
$100,000,000 Title: Associate Director
Banking Products Services, US
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇ III
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇ III
Title: Executive Director
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone number: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇
Total Term Loan Commitments
$200,000,000
Total Revolving Credit Commitments
$100,000,000
Total Commitments
$300,000,000
52
EXHIBIT A
NOTE
New York, New York
September 21, 2001
For value received, ▇▇▇▇ WILEY & SONS, INC., a New York
corporation (the "Borrower"), promises to pay to the order of [ ] (the
"Lender"), for the account of its Applicable Lending Office, the unpaid
principal amount of each Loan made by the Lender to the Borrower pursuant to the
Credit Agreement referred to below on the dates and in the amounts specified in
the Credit Agreement. The Borrower promises to pay interest on the unpaid
principal amount of each such Loan on the dates and at the rate or rates
provided for in the Credit Agreement. All such payments of principal and
interest shall be made in lawful money of the United States in Federal or other
immediately available funds at the office of UBS AG, Stamford Branch, ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
All Loans made by the Lender, the respective Types and
Classes thereof and all repayments of the principal thereof shall be recorded by
the Lender and, prior to any transfer hereof, appropriate notations to evidence
the foregoing information with respect to each such Loan then outstanding shall
be endorsed by the Lender on the schedule attached hereto, or on a continuation
of such schedule attached to and made a part hereof, provided that the failure
of the Lender to make any such recordation or endorsement shall not affect the
obligations of the Borrower hereunder or under the Credit Agreement.
This note is one of the Notes referred to in the Credit
Agreement dated as of September 21, 2001 among the Borrower, the Lenders from
time to time parties thereto and UBS AG, Stamford Branch, as Administrative
Agent (as the same may be amended, supplemented or otherwise modified from time
to time, the "Credit Agreement"). Terms defined in the Credit Agreement are used
herein with the same meanings. Reference is made to the Credit Agreement for
provisions for the prepayment hereof and the acceleration of the maturity
hereof.
▇▇▇▇ ▇▇▇▇▇ & SONS, INC.
By:
-----------------------------------
Name:
Title:
A-1
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
Amount
Amount Class Type of Principal
Date of Loan of Loan of Loan Repaid Notation Made By
------------- --------------------- -------------------- --------------------- --------------------- ---------------- -------------
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▇-▇
▇▇▇▇▇▇▇ ▇-▇
OPINION OF
INTERNAL COUNSEL FOR THE BORROWER
---------------------------------
September 21, 2001
To the Lenders and the Administrative Agent
Referred to Below
c/o UBS AG, Stamford Branch,
as Administrative Agent
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Sirs:
I am counsel for ▇▇▇▇ Wiley & Sons, Inc., a New York
corporation (the "Borrower"), and have acted as counsel to the Borrower in
connection with the Credit Agreement (the "Agreement") dated as of September 21,
2001 among the Borrower, the Lenders from time to time parties thereto and UBS
AG, Stamford Branch, as Administrative Agent. Terms defined in the Agreement are
used herein as therein defined.
I have examined originals or copies, certified or otherwise
identified to my satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as I have deemed necessary or advisable for
purposes of this opinion.
Upon the basis of the foregoing, I am of the opinion that:
1. The Borrower is a corporation validly existing and in
good standing under the laws of the State of New York, and has all
corporate powers and all material governmental licenses,
authorizations, consents and approvals required to carry on its
business as now conducted.
2. The execution, delivery and performance by the Borrower
of the Agreement and each Note, to the extent executed and delivered
in accordance with the Agreement, are within the Borrower's corporate
power, have been duly authorized by all necessary corporate action,
require no action by or in respect of, or filing with, any
governmental body, agency or official and do not contravene, or
constitute a default under, any provision of applicable law or
regulation or of the Restated Certificate of Incorporation or by-laws
of the Borrower or of any agreement, judgment, injunction, order,
decree or other instrument binding upon the Borrower or any
Subsidiary or result in the creation or imposition of any Lien on any
asset of the Borrower or any of its Subsidiaries.
3. The Agreement constitutes a valid and binding agreement
of the Borrower and each Note, to the extent executed and delivered
in accordance with the Agreement, constitutes a valid and binding
obligation of the Borrower, in each case enforceable in accordance
with its terms, except as the same may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and
by general principles of equity.
4. There is no action, suit or proceeding pending against,
or to the best of my knowledge threatened against or affecting the
Borrower or any of its Subsidiaries before any court or arbitrator or
any governmental body, agency or official, in which there is a
reasonable possibility of an adverse decision which could have a
material adverse effect on the condition (financial and other),
business, operations, assets, liabilities or prospects of the
Borrower and its Subsidiaries, taken as a whole, or which in any
manner draws into question the validity or enforceability of the
Agreement.
5. To the best of my knowledge each of the Borrower's
Subsidiaries is a corporation, validly existing and in good standing
under the laws of its jurisdiction of incorporation, or that each
such Subsidiary does not have all corporate power and authority and
all material governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted.
Very truly yours,
2
EXHIBIT B-2
OPINION OF
WEIL, GOTSHAL & ▇▇▇▇▇▇ LLP
SEPTEMBER 21, 2001
To UBS AG, Stamford Branch,
as Administrative Agent
for each of the Lenders referred
to below party to the Credit
Agreement referred to below
Re: ▇▇▇▇ Wiley & Sons, Inc.
Ladies and Gentlemen:
We have acted as counsel to ▇▇▇▇ ▇▇▇▇▇ & Sons, Inc. (the
"Borrower") in connection with the preparation, execution and delivery of, and
the consummation of the transactions contemplated by, the $300,000,000 Credit
Agreement, dated as of September 21, 2001 (the "Credit Agreement"), by and among
the Borrower, the financial institutions party thereto (the "Lenders") and UBS
AG, Stamford Branch, as administrative agent for the Lenders (the
"Administrative Agent").
This opinion is rendered to you pursuant to Section 3.01(i)
of the Credit Agreement. Capitalized terms defined in the Credit Agreement, used
herein, and not otherwise defined herein, shall have the meanings given them in
the Credit Agreement.
In so acting, we have examined originals or copies
(certified or otherwise identified to our satisfaction) of the Credit Agreement.
In addition, we have examined such corporate records, agreements, documents and
other instruments, and such certificates or comparable documents of public
officials and of officers and representative of the Borrower, and have made such
inquiries of such officers and representatives, as we have deemed relevant and
necessary as a basis for the opinions hereinafter set forth.
In such examination, we have assumed the genuineness of all
signatures, the legal capacity of all natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified, conformed or photostatic copies and
the authenticity of the originals of such latter documents. As to all questions
of fact material to these opinions that have not been independently established,
we have relied upon certificates or comparable documents of officers and
representatives of the Borrower and upon the representations and warranties of
the Borrower contained in the Credit Agreement. As used herein, "to our
knowledge" and "of which we are aware" mean the conscious awareness of facts or
other information by any lawyer in our firm actively involved in the
transactions contemplated by the Credit Agreement.
We have also assumed (i) the valid existence of all parties
to the Credit Agreement, (ii) that each of such parties has the requisite
corporate or other power and authority to enter into and perform the Credit
Agreement and (iii) the due authorization, execution and delivery of the Credit
Agreement by each such party.
Based on the foregoing, and subject to the qualifications
stated herein, we are of the opinion that:
1. The Credit Agreement constitutes the legal, valid and
binding obligation of the Borrower, enforceable against the Borrower in
accordance with its terms, subject to (a) applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and (b) general principles of equity,
including principles of commercial reasonableness, good faith and fair dealing
regardless of whether enforcement is sought in a proceeding at law or in equity,
and except (A) rights to indemnification and contribution thereunder may be
limited by federal or state securities laws or public policy relating thereto
and (b) no opinion is expressed with respect to Section 9.04 of the Credit
Agreement.
2. The execution, delivery and performance by the Borrower
of the Credit Agreement will not conflict with, constitute a default under or
violate (i) any of the terms, conditions or provisions of the certificate of
incorporation or by-laws of the Borrower, (ii) any New York or federal law or
regulation (other than federal and state securities or blue sky laws, as to
which we express no opinion in this paragraph) or (iii) to our knowledge, any
judgment, writ, injunction, decree, order or ruling of any governmental
authority of which we are aware binding on the Borrower.
3. No consent, approval, waiver, license or authorization
or other action by or filing with any New York or federal governmental authority
is required in connection with the execution, delivery or performance by the
Borrower of the Credit Agreement.
4. To our knowledge, there is no action, suit, proceeding,
governmental investigation or arbitration, at law or in equity or before any
governmental authority, pending or overtly threatened against the Borrower (i)
with respect to the Credit Agreement or challenging any of the Lenders' or the
Administrative Agent's rights or remedies thereunder or (ii) which, if adversely
determined, could materially adversely affect the ability of the Borrower to
perform its obligations under the Credit Agreement.
The opinions expressed herein are limited to the laws of
the State of New York and the federal laws of the United States, and we express
no opinion as to the effect on the matters covered by this letter of the laws of
any other jurisdiction
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The opinions expressed herein are rendered solely for your
benefit in connection with the transactions described herein. This opinion may
not be used or relied upon by any other person, nor may this letter or any
copies thereof be furnished to a third party, filed with a governmental agency,
quoted, cited or otherwise referred to without our prior written consent, other
than to bank regulatory authorities or permitted assigns of any Lender, and
except as required by any Governmental Authority or pursuant to legal process.
Very truly yours,
WEIL, GOTSHAL & ▇▇▇▇▇▇ LLP
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