EXHIBIT 10.1
CONFORMED COPY
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CREDIT AGREEMENT
dated as of July 8, 1998
among
CENTURY MAINTENANCE SUPPLY, INC.,
The Lenders Party Hereto,
SALOMON BROTHERS INC,
as Arranger, Advisor and Syndication Agent,
and
CITICORP USA, INC.,
as Administrative Agent and Collateral Agent
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TABLE OF CONTENTS
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ARTICLE I
Definitions
SECTION 1.01. Defined Terms............................................. 1
SECTION 1.02. Terms Generally........................................... 24
ARTICLE II
The Credits
SECTION 2.01. Commitments............................................... 25
SECTION 2.02. Loans..................................................... 25
SECTION 2.03. Borrowing Procedure....................................... 26
SECTION 2.04. Notes and Records......................................... 27
SECTION 2.05. Fees...................................................... 27
SECTION 2.06. Interest on Loans......................................... 28
SECTION 2.07. Default Interest.......................................... 29
SECTION 2.08. Alternate Rate of Interest................................ 29
SECTION 2.09. Termination and Reduction of Commitments.................. 29
SECTION 2.10. Conversion and Continuation of Borrowings................. 30
SECTION 2.11. Repayment of Term Borrowings.............................. 31
SECTION 2.12. Prepayment................................................ 32
SECTION 2.13. Mandatory Prepayments..................................... 32
SECTION 2.14. Reserve Requirements...................................... 35
SECTION 2.15. Change in Legality........................................ 36
SECTION 2.16. Indemnity................................................. 37
SECTION 2.17. Pro Rata Treatment........................................ 37
SECTION 2.18. Sharing of Setoffs........................................ 37
SECTION 2.19. Payments.................................................. 38
SECTION 2.20. Taxes..................................................... 38
SECTION 2.21. Assignment of Commitments Under Certain
Circumstances; Duty to Mitigate........................... 40
SECTION 2.22. Swingline Loans........................................... 41
SECTION 2.23. Letters of Credit......................................... 43
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ARTICLE III
Representations and Warranties
SECTION 3.01. Organization; Powers................................... 46
SECTION 3.02. Authorization.......................................... 46
SECTION 3.03. Enforceability......................................... 47
SECTION 3.04. Governmental Approvals and Licenses.................... 47
SECTION 3.05. Financial Statements................................... 47
SECTION 3.06. No Material Adverse Change............................. 48
SECTION 3.07. Title to Properties; Possession Under Leases........... 48
SECTION 3.08. Subsidiaries........................................... 48
SECTION 3.09. Litigation; Compliance with Laws....................... 48
SECTION 3.10. Default in Material Agreements......................... 49
SECTION 3.11. Federal Reserve Regulations............................ 49
SECTION 3.12. Investment Company Act; Public Utility Holding
Company Act............................................ 49
SECTION 3.13. Tax Returns............................................ 49
SECTION 3.14. No Material Misstatements.............................. 49
SECTION 3.15. Employee Benefit Plans................................. 49
SECTION 3.16. Environmental Matters.................................. 50
SECTION 3.17. Insurance.............................................. 50
SECTION 3.18. Security Documents..................................... 50
SECTION 3.19. Location of Real Property and Leased Premises.......... 51
SECTION 3.20. Labor Matters.......................................... 51
SECTION 3.21. Solvency............................................... 51
SECTION 3.22. Year 2000.............................................. 52
ARTICLE IV
Conditions of Lending
SECTION 4.01. All Credit Events...................................... 52
SECTION 4.02. First Credit Event..................................... 52
ARTICLE V
Affirmative Covenants
SECTION 5.01. Existence; Businesses and Properties................... 56
SECTION 5.02. Insurance.............................................. 57
SECTION 5.03. Payment of Taxes....................................... 58
SECTION 5.04. Financial Statements, Reports, etc..................... 59
SECTION 5.05. Litigation and Other Notices........................... 60
SECTION 5.06. Employee Benefits...................................... 60
SECTION 5.07. Maintaining Records; Access to Properties and
Inspections............................................ 60
SECTION 5.08. Use of Proceeds........................................ 61
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SECTION 5.09. Compliance with Environmental Laws..................... 61
SECTION 5.10. Preparation of Environmental Reports................... 61
SECTION 5.11. Further Assurances..................................... 61
SECTION 5.12. Mortgaged Property Casualty and Condemnation........... 62
SECTION 5.13. Compliance with Laws................................... 65
SECTION 5.14. Interest Rate Protection............................... 65
ARTICLE VI
Negative Covenants
SECTION 6.01. Indebtedness........................................... 66
SECTION 6.02. Liens.................................................. 66
SECTION 6.03. Investments, Loans and Advances........................ 67
SECTION 6.04. Mergers, Consolidations, Sales of Assets and
Acquisitions........................................... 68
SECTION 6.05. Dividends and Distributions; Restrictions on Ability
of Subsidiaries to Pay Dividends....................... 69
SECTION 6.06. Transactions with Affiliates........................... 70
SECTION 6.07. Business of Borrower and Subsidiaries.................. 70
SECTION 6.08. Use of Proceeds........................................ 71
SECTION 6.09. Capital Expenditures................................... 71
SECTION 6.10. Debt/Adjusted EBITDA Ratio............................. 71
SECTION 6.11. Minimum EBITDA......................................... 72
SECTION 6.12. Interest Coverage Ratio................................ 72
SECTION 6.13. Fixed Charge Coverage Ratio............................ 73
SECTION 6.14. Modification of Certain Agreements..................... 73
ARTICLE VII
Defaults and Remedies
SECTION 7.01. Events of Default...................................... 73
ARTICLE VIII
The Agents
SECTION 8.01. Appointment of Administrative and Collateral Agent..... 76
SECTION 8.02. Limitations on Liabilities............................. 76
SECTION 8.03. Acting at the Direction of the Required Lenders........ 77
SECTION 8.04. Resignation of the Administrative Agent or the
Collateral Agent....................................... 77
SECTION 8.05. Other Transactions..................................... 77
SECTION 8.06. Reimbursement and Indemnity............................ 77
SECTION 8.07. No Reliance............................................ 78
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ARTICLE IX
Miscellaneous
SECTION 9.01. Notices................................................ 78
SECTION 9.02. Survival of Agreement.................................. 78
SECTION 9.03. Effectiveness; Termination............................. 79
SECTION 9.04. Successors and Assigns................................. 79
SECTION 9.05. Expenses; Indemnity.................................... 82
SECTION 9.06. Right of Setoff........................................ 82
SECTION 9.07. Applicable Law......................................... 83
SECTION 9.08. Waivers; Amendment; Replacement Lenders................ 83
SECTION 9.09. Interest Rate Limitation............................... 85
SECTION 9.10. Entire Agreement....................................... 85
SECTION 9.11. WAIVER OF JURY TRIAL................................... 85
SECTION 9.13. Counterparts........................................... 86
SECTION 9.14. Headings............................................... 86
SECTION 9.15. Jurisdiction; Consent to Service of Process............ 86
SECTION 9.16. Confidentiality........................................ 86
Annexes
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Annex 1 - Initial Loan Commitments and Term Loan Commitments
Annex 2 - Administrative Information
Annex 3 - Description of the Recapitalization
Schedules
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Schedule 1.01(a) - Existing Letters of Credit
Schedule 1.01(b) - Mortgaged Properties
Schedule 1.01(c) - Subsidiary Guarantors
Schedule 3.07(b) - Exceptions to Compliance with Leases
Schedule 3.07(c) - Condemnation Proceedings
Schedule 3.08 - Subsidiaries
Schedule 3.09 - Litigation
Schedule 3.16 - Environmental Matters
Schedule 3.17 - Insurance
Schedule 3.18(d) - Mortgage Filing Offices
Schedule 3.19(a) - Owned Real Properties
Schedule 3.19(b) - Leased Real Properties
Schedule 4.02(b) - Local Counsel
Schedule 4.02(t) - Existing Indebtedness
Schedule 6.01(a) - Indebtedness to be Paid
Schedule 6.02(a) - Existing Liens
Schedule 6.06 - Transactions with Affiliates
Exhibits
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Exhibit A - Administrative Questionnaire
Exhibit B - Form of Term Note
Exhibit C - Form of Revolving Credit Note
Exhibit D - Form of Swingline Note
Exhibit E - Form of Borrowing Request
Exhibit F - Form of Continuation/Conversion Request
Exhibit G - Form of Letter of Credit Request
Exhibit H - Form of Assignment and Acceptance
Exhibit I - Form of Security Agreement
Exhibit J - Form of Pledge Agreement
Exhibit K - Form of Mortgage
Exhibit L - Form of Subsidiary Guarantee Agreement
Exhibit M - Form of Indemnity, Subrogation and Contribution
Agreement
Exhibit N - Form of Pricing Adjustment Certificate
Exhibit O - Form of Opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, special
California counsel for the Borrower
Exhibit P - Form of Opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇, special Texas
counsel for the Borrower
Exhibit Q - Form of Opinion of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, P.C., Texas
counsel for the Borrower
Exhibit R - Form of Opinion of ▇▇▇▇▇▇▇▇ & ▇'▇▇▇▇, special New
York counsel for the Borrower
Exhibit S - Form of Opinion of Borrower's Local Counsel
Exhibit T - Form of Opinion of Cravath, Swaine & ▇▇▇▇▇, special
New York counsel for the Agents
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CREDIT AGREEMENT dated as of July 8, 1998, among
CENTURY MAINTENANCE SUPPLY, INC., a Delaware
corporation (the "Borrower"), the Lenders (as defined
in Article I), SALOMON BROTHERS INC, as Arranger,
Advisor and Syndication Agent (in such capacity, the
"Syndication Agent"), and CITICORP USA, INC., as
swingline lender (in such capacity, the "Swingline
Lender"), and as issuing bank (in such capacity, the
"Issuing Bank"), and as administrative agent (in such
capacity, the "Administrative Agent") and as collateral
agent (in such capacity, the "Collateral Agent") for
the Lenders.
The Borrower has requested the Lenders to extend credit in the form of (a)
Tranche A Term Loans (such term and each other capitalized term used but not
defined herein having the meaning given it in Article I) on the Closing Date, in
an aggregate principal amount not in excess of $40,000,000, Tranche B Term Loans
on the Closing Date, in an aggregate principal amount not to exceed $60,000,000
and (c) Revolving Loans at any time and from time to time prior to the Revolving
Credit Maturity Date, in an aggregate principal amount at any time outstanding
not in excess of $25,000,000. The Borrower has requested the Swingline Lender
to extend credit, at any time and from time to time prior to the Revolving
Credit Maturity Date, in the form of Swingline Loans. The Borrower has
requested the Issuing Bank to issue letters of credit, in an aggregate face
amount at any time outstanding not in excess of $7,500,000, to support payment
obligations incurred in the ordinary course of business by the Borrower and its
Subsidiaries. The proceeds of the Loans are to be used solely as set forth in
Section 6.08.
The Lenders and the Swingline Lender are willing to extend such credit to
the Borrower and the Issuing Bank is willing to issue letters of credit for the
account of the Borrower on the terms and subject to the conditions set forth
herein. Accordingly, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the following
terms shall have the meanings specified below:
"ABR Borrowing" means a Borrowing comprised of ABR Loans.
"ABR Loan" means any ABR Term Loan or ABR Revolving Loan.
"ABR Revolving Loan" means any Revolving Loan bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"ABR Term Borrowing" means a Borrowing comprised of ABR Term Loans.
"ABR Term Loan" means any Term Loan bearing interest at a rate determined
by
reference to the Alternate Base Rate in accordance with the provisions of
Article II.
"Acquisition Co." is defined in Annex 3.
"Adjusted EBITDA" means, with respect to the Borrower and its Subsidiaries
for the four most recently completed fiscal quarters for which financial
statements are available, EBITDA on a consolidated basis after giving effect to
all Permitted Acquisitions consummated during such period on a pro forma basis
in accordance with SEC Regulation S-X (as if such acquisitions were made on the
first day of such period).
"Adjusted Eurodollar Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the product of (a) the Eurodollar
Rate in effect for such Interest Period and (b) Statutory Reserves.
"Adjusted Working Capital" means, for any date, current assets (other than
cash and cash equivalent investments) less current liabilities (other than
current maturities of long-term debt).
"Administrative Agent" is defined in the Preamble.
"Administrative Agent Fees" is defined in Section 2.05(b).
"Administrative Questionnaire" means an Administrative Questionnaire in the
form of Exhibit A.
"Affiliate" means, when used with respect to a specified person, another
person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the person specified.
"Affiliate Transactions" is defined in Section 6.06.
"Aggregate Revolving Credit Exposure" means the aggregate amount of the
Lenders' Revolving Credit Exposures.
"Alternate Base Rate" means, at all times, a fluctuating rate per annum
equal to the highest of:
(a) the rate of interest announced publicly by Citibank, N.A., in New
York, New York, from time to time, as its base rate;
(b) the sum (adjusted to the nearest 1/16 of 1% per annum) of (i) 1/2
of one percent per annum, plus (ii) the rate obtained by dividing (A) the
latest three-week moving average of secondary market morning offering rates
in the United States for three-month certificates of deposit of major
United States money market banks, such three-week moving average (adjusted
to the basis of a year of 360 days) being determined weekly on each Monday
(or, if such day is not a Business Day, on the next succeeding Business
Day) for the three-week period ended on the previous Friday by Citibank,
N.A., on the basis of such rates reported by certificate of deposit dealers
to bank published by the Federal Reserve Bank of New York or, is such
publication shall be suspended or terminated, on the basis of quotations
for such rates received by Citibank, N.A., from three New York certificate
of deposit dealers of recognized standing selected by it, by (B) a
percentage equal to 100% minus the average of the daily percentages
specified during such three-
2
week period by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including, but
not limited to, any emergency, supplemental, or other marginal reserve
requirement) for Citibank, N.A., with respect to liabilities consisting of
or including (among other liabilities) three-month non-personal time
deposits in the United States, plus (iii) the average during such three-
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week period of the annual assessment rates estimated by Citibank, N.A., for
determining the then current annual assessment payable by it to the Federal
Deposit Insurance Corporation (or any successor) for insuring U.S. dollar
deposits of Citibank, N.A., in the Unites States; and
(c) 1/2 of 1% per annum above the weighted average of the rates on
overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published for such day (or, if
such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for
any day which is a Business Day, the average of the quotations for such day
on such transactions received by Citibank, N.A., from three Federal funds
brokers of recognized standing selected by it.
"Applicable Percentage" of any Revolving Credit Lender at any time means
the percentage of the Total Revolving Credit Commitment represented by such
Lender's Revolving Credit Commitment. In the event the Revolving Credit
Commitments shall have expired or been terminated, the Applicable Percentages
shall be determined on the basis of the Revolving Credit Commitments most
recently in effect.
"Asset Disposition" means any sale, lease, transfer, issuance or other
disposition (or series of related sales, leases, transfers, issuances or
dispositions) by the Borrower or any Restricted Subsidiary, including any
disposition by means of a merger, consolidation or similar transaction (each
referred to for the purposes of this definition as a "disposition"), of (a) any
shares of Capital Stock of a Restricted Subsidiary (other than directors'
qualifying shares) or (b) any other Assets of the Borrower or any Restricted
Subsidiary outside of the ordinary course of business of the Borrower or such
Restricted Subsidiary (other than, in the case of clauses (a) and (b) above, (i)
any disposition by a Restricted Subsidiary to the Borrower or by the Borrower or
a Restricted Subsidiary to a wholly owned Restricted Subsidiary, (ii) any
disposition effected in compliance with Section 6.04). "Asset Disposition"
shall not include any Sale/Leaseback Transaction.
"Assets" means property of any person other than capital stock, or
warrants, instruments or rights convertible into capital stock, of such person.
"Assignment and Acceptance" means an assignment and acceptance entered into
by a Lender and an assignee, and accepted by the Administrative Agent, in the
form of Exhibit or such other form as shall be approved by the Administrative
Agent.
"Average Life" means, as of any date of determination, with respect to any
Debt or Preferred Stock, the quotient obtained by dividing (a) the sum of the
product of the numbers of years (rounded to the nearest one-twelfth of one year)
from the date of determination to the dates of each successive scheduled
principal payment of such Debt or redemption or similar payment with respect to
such Preferred Stock multiplied by the amount of such payment by (b) the sum of
all such payments.
"Board" means the Board of Governors of the Federal Reserve System of the
United States of America.
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"Borrower" is defined assigned thereto in the Preamble.
"Borrowing" means a group of Loans of a single Type made by the Lenders on
a single date and as to which a single Interest Period is in effect.
"Borrowing Request" means a request by the Borrower in accordance with the
terms of Section 2.03 or Section 2.22(b), as the case may be, and substantially
in the form of Exhibit E.
"Business Day" means any day other than a Saturday, Sunday or day on which
banks in New York City are authorized or required by law to close.
"Capital Expenditures" means capital expenditures of the Borrower and its
Subsidiaries determined in accordance with GAAP.
"Capital Lease Obligations" of any person means the obligations of such
person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"Capital Stock" means, with respect to any person, any shares or other
equivalents (however designated) of corporate stock, partnership interests or
any other participants, rights, warrants, options or other interests in the
nature of any equity interest in such person, including Preferred Stock, but
excluding any debt security convertible or exchangeable into such equity
interest.
"Casualty" is defined in Section 5.12(a).
"Casualty Proceeds" is defined in Section 5.12(a).
"Change of Control" means the occurrence of any of the following events:
(a) prior to the first Public Equity Offering that results in a Public
Market, the Permitted Holders cease to be the "beneficial owners" (as defined in
Rule 13d-3 under the Exchange Act, except that a person will be deemed to have
"beneficial ownership" of all shares that any such person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of a majority of the voting power of the
Voting Stock of the Borrower, whether as a result of the issuance of securities
of the Borrower, any merger, consolidation, liquidation or dissolution of the
Borrower, any direct or indirect transfer of securities by the Permitted Holders
or otherwise (for purposes of this clause, the Permitted Holders will be deemed
to beneficially own any Voting Stock of a corporation (the "specified
corporation") held by any other corporation (the "parent corporation") so long
as the Permitted Holders beneficially own, directly or indirectly, in the
aggregate a majority of the voting power of the Voting Stock of such parent
corporation); or
(b) after the first Public Equity Offering that results in a Public Market,
any "person" or "group" (as such terms are used in Sections 13(d)(3) and
14(d)(2) of the Exchange Act or any successor provisions to either of the
foregoing), including any group acting for the purpose of acquiring, holding,
voting or disposing of securities within the meaning of Rule 13d-5(b)(1) under
the Exchange Act, other than any one or more of the Permitted Holders or any
member of the senior management of the Borrower or any Subsidiary (or trusts for
the benefit of his or her heirs), becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act, except
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that a person will be deemed to have "beneficial ownership" of all shares that
any such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of 25%
or more of the voting power of the Voting Stock of the Borrower; provided,
however, that the Permitted Holders or any member of the senior management of
the Borrower or any Subsidiary (or trusts for the benefit of his or her heirs)
are the "beneficial owners" (as defined in Rule 13d-3 under the Exchange Act,
except that a person will be deemed to have "beneficial ownership" of all shares
that any such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, in the
aggregate of a lesser percentage of the total voting power of all classes of the
Voting Stock of the Borrower than such other person or group (for purposes of
this clause, such person or group shall be deemed to beneficially own any Voting
Stock of a specified corporation held by a parent corporation so long as such
person or group beneficially owns, directly or indirectly, in the aggregate a
majority of the voting power of the Voting Stock of such parent corporation); or
(c) the sale, transfer, assignment, lease, conveyance or other disposition,
directly or indirectly, of all or substantially all the assets of the Borrower
and the Restricted Subsidiaries, considered as a whole (other than a disposition
of such assets as an entirety or virtually as an entirety to a wholly owned
Restricted Subsidiary or one or more Permitted Holders) shall have occurred, or
the Borrower merges, consolidates or amalgamates with or into any other person
(other than one or more Permitted Holders) or any other person (other than one
or more Permitted Holders) merges, consolidates or amalgamates with or into the
Borrower, in any such event pursuant to a transaction in which the outstanding
Voting Stock of the Borrower is reclassified into or exchanged for cash,
securities or other Property, other than any such transaction where (i) the
outstanding Voting Stock of the Borrower is reclassified into or exchanged for
Voting Stock of the surviving corporation and (ii) the holders of the Voting
Stock of the Borrower immediately prior to such transaction own, directly or
indirectly, not less than a majority of the Voting Stock of the surviving
corporation immediately after such transaction and in substantially the same
proportion as before the transaction; or
(d) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors (together with any
new directors whose election or appointment by such Board or whose nomination
for election by the shareholders of the Borrower was approved by a vote of 66-
2/3% of the directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors then in office;
(e) the shareholders of the Borrower shall have approved any plan of
liquidation or dissolution of the Borrower; or
(f) any transaction or series of related transactions constituting a
"change of control" or other similar occurrence under documentation evidencing
or governing any Indebtedness of the Borrower or its Restricted Subsidiaries of
$2,500,000 or more which results in an obligation of the Borrower or any
Restricted Subsidiary to prepay, purchase, offer to purchase, redeem or defease
such Indebtedness.
"Closing Date" means the date (which shall be on or prior to July 14, 1998)
of the first Credit Event.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral" means all the "Collateral" as defined in any Security Document
and shall also
5
include the Mortgaged Properties.
"Collateral Agent" is defined assigned thereto in the Preamble.
"Commitment" means, with respect to any Lender, such Lender's Revolving
Credit Commitment, Term Loan Commitment and Swingline Commitment.
"Commitment Fee" is defined in Section 2.05(a).
"Condemnation" is defined in Section 5.12(b).
"Condemnation Proceeds" is defined in Section 5.12(b).
"Confidential Information Memorandum" means the Confidential Information
Memorandum of the Borrower dated [ ], 1998.
"Consolidated Interest Expense" means, for any period, the total interest
expense of the Borrower and its consolidated Restricted Subsidiaries, plus, to
the extent not included in such total interest expense, and to the extent
Incurred by the Borrower or its Restricted Subsidiaries, (a) interest expense
attributable to capital leases, (b) amortization of Indebtedness discount and
debt issuance cost, including commitment fees, (c) capitalized interest, (d)
non-cash interest expenses, (e) commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance
financing, (f) net costs associated with Hedging Obligations (including
amortization of fees), (g) dividends and other distributions on Disqualified
Stock, (h) Preferred Stock dividends in respect of all Preferred Stock of
Restricted Subsidiaries held by persons other than the Borrower or a wholly
owned Restricted Subsidiary (to the extent paid in cash), (i) interest Incurred
in connection with Investments in discontinued operations, (j) interest accruing
on any Indebtedness of any other person to the extent such Indebtedness is
Guaranteed by the Borrower or any Restricted Subsidiary and (k) the cash
contributions to any employee stock ownership plan or similar trust to the
extent such contributions are used by such plan or trust to pay interest or fees
to any person (other than the Borrower) in connection with Indebtedness Incurred
by such plan or trust.
"Consolidated Net Income" means, for any period, the net income (loss) of
the Borrower and its consolidated Subsidiaries; provided, however, that there
shall not be included in such Consolidated Net Income
(a) any net income (loss) of any person (other than the Borrower) if
such person is not a Restricted Subsidiary, except that (i) subject to the
exclusion contained in clause (c), the Borrower's equity in the net income
of any such person for such period shall be included in such Consolidated
Net Income up to the aggregate amount of cash distributed by such person
during such period to the Borrower or a Restricted Subsidiary as a dividend
or other distribution (subject, in the case of a dividend or other
distribution to a Restricted Subsidiary, to the limitations contained in
clause (b)) and (ii) the Borrower's equity in a net loss of any such person
other than an Unrestricted Subsidiary for such period shall be included in
determining such Consolidated Net Income;
(b) any net income (but not loss) of any Restricted Subsidiary if such
Restricted Subsidiary is subject to consensual restrictions, directly or
indirectly, on the payment of dividends or the making of distributions,
directly or indirectly, to the Borrower, except that subject to the
exclusion contained in clause (c), the Borrower's equity in the net income
of any such Restricted Subsidiary for such period shall be included in such
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Consolidated Net Income up to the aggregate amount of cash distributed by
such Restricted Subsidiary during such period to the Borrower or another
Restricted Subsidiary as a dividend or other distribution (subject, in the
case of a dividend or other distribution to another Restricted Subsidiary,
to the limitation contained in this clause);
(c) any gain (but not loss) realized upon the sale or other
disposition of any Property of the Borrower or any of its consolidated
Subsidiaries (including pursuant to any Sale and Leaseback Transaction)
which is not sold or otherwise disposed of in the ordinary course of
business; provided, that any tax benefit or tax liability resulting
therefrom shall be excluded in calculated such Consolidated Net Income;
(d) any extraordinary gain or loss and any nonrecurring Transaction
Costs; provided, that any tax benefit or tax liability resulting therefrom
shall be excluded in calculated such Consolidated Net Income;
(e) the cumulative effect of a change in accounting principles;
(f) any non-cash compensation expense realized in connection with the
grant, vesting or exercise of performance shares, stock options or other
stock awards to officers, directors and employees of the Borrower or any
Restricted Subsidiary;
(g) compensation expense attributable to bonus payments to management
of the Borrower which are payable in connection with the Recapitalization
within 90 days of the Closing Date and which are in the aggregate not
greater than $1,000,000; and
(h) compensation expense attributable to the repurchase in connection
with the Recapitalization of outstanding options from employees of the
Borrower and its Subsidiaries in an amount not to exceed $4,020,000 in the
aggregate.
"Continuation/Conversion Request" means a continuation/conversion request
delivered by the Borrower to the Administrative Agent, in the form of Exhibit F
or such other form as shall be approved by the Administrative Agent.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a person, whether
through the ownership of voting securities, by contract or otherwise, and the
terms "Controlling" and "Controlled" shall have meanings correlative thereto.
"Credit Documents" means this Agreement, the Letters of Credit, the Notes,
the Subsidiary Guarantee Agreement, the Security Documents and the Indemnity,
Subrogation and Contribution Agreement.
"Credit Event" is defined in Section 4.01.
"Credit Parties" means the Borrower and the Guarantors.
"Current Owner" is defined in Annex 3.
"Debt" means, with respect to any person, all Indebtedness of such person
of the types referred to in clauses (a), (b), (c), (d), (e), (f) and (h) of the
definition of "Indebtedness".
"Debt/Adjusted EBITDA Ratio" means, as of any date with respect to the
Borrower and
7
its consolidated Restricted Subsidiaries, the ratio of (a) the total amount of
Debt of the Borrower and its consolidated Restricted Subsidiaries as of such
date, to (b) Adjusted EBITDA of the Borrower and its consolidated subsidiaries
for the period of four fiscal quarters most recently ended for which financial
statements are available.
"Default" means any event or condition which upon notice, lapse of time or
both would constitute an Event of Default.
"Disqualified Stock" means, with respect to any person, Redeemable Stock of
such person as to which (i) the maturity, (ii) mandatory redemption or (iii)
redemption, repurchase, conversion or exchange at the option of the holder
thereof occurs, or may occur, on or prior to the first anniversary of the Term
Loan Maturity Date; provided, however, that Redeemable Stock of such person that
-------- -------
would not otherwise be characterized as Disqualified Stock under this definition
shall not constitute Disqualified Stock (a) if such Redeemable Stock is
convertible or exchangeable into Debt or Disqualified Stock solely at the option
of the issuer thereof or (b) solely as a result of provisions thereof giving
holders thereof the right to require such person to repurchase or redeem such
Redeemable Stock upon the occurrence of a "change of control" occurring prior to
the first anniversary of the Term Loan Maturity Date, if (x) such repurchase
obligation may not be triggered in respect of such Redeemable Stock unless a
mandatory prepayment obligation also arises with respect to the Loans and (y) no
such repurchase or redemption is permitted to be consummated unless and until
such person shall have satisfied all mandatory prepayment obligations with
respect to the Loans.
"dollars" or "$" means lawful money of the United States of America.
"Domestic Subsidiaries" means all Restricted Subsidiaries incorporated or
organized under the laws of the United States of America, any State thereof or
the District of Columbia.
"EBITDA" means, for any period, an amount equal to, for the Borrower and
its consolidated Restricted Subsidiaries, (a) the sum of Consolidated Net Income
for such period, plus the following to the extent reducing Consolidated Net
Income for such period: (i) the provision for taxes based on income or profits
or utilized in computing net loss, (ii) Consolidated Interest Expense, (iii)
depreciation, (iv) amortization and (v) any other non-cash items (other than any
such non-cash item to the extent that it represents an accrual of or reserve for
cash expenditures in any future period), minus (b) all non-cash items increasing
Consolidated Net Income for such period (other than any such non-cash item to
the extent that it will result in the receipt of cash payments in any future
period). Notwithstanding the foregoing, the provision for taxes based on the
income or profits of, and the depreciation and amortization of, a Restricted
Subsidiary shall be added to Consolidated Net Income to compute EBITDA only to
the extent (and in the same proportion) that the net income of such Restricted
Subsidiary was included in calculating Consolidated Net Income and only if a
corresponding amount would not be prohibited at the date of determination from
being dividended to the Borrower by such Restricted Subsidiary without prior
approval (that has not been obtained), pursuant to the terms of any consensual
restriction.
"Employee Notes" means promissory notes of employees of the Borrower or the
Subsidiaries payable to the Borrower or and received in connection with the
substantially concurrent purchase of Capital Stock of the Borrower or by such
employees.
"environment" means ambient air, surface water and groundwater (including
potable water, navigable water and wetlands), the land surface or subsurface
strata, the workplace or as otherwise defined in any Environmental Law.
8
"Environmental Claim" means any written accusation, allegation, notice of
violation, claim, demand, order, directive, cost recovery action or other cause
of action by, or on behalf of, any Governmental Authority or any person for
damages, injunctive or equitable relief, personal injury (including sickness,
disease or death), Remedial Action costs, tangible or intangible property
damage, natural resource damages, nuisance, pollution, any adverse effect on the
environment caused by any Hazardous Material, or for fines, penalties or
restrictions, resulting from or based upon (a) the existence, or the
continuation of the existence, of a Release (including sudden or non-sudden,
accidental or non-accidental Releases), (b) exposure to any Hazardous Material,
(c) the presence, use, handling, transportation, storage, treatment or disposal
of any Hazardous Material or (d) the violation or alleged violation of any
Environmental Law or Environmental Permit.
"Environmental Law" means any and all applicable present and future
treaties, laws, rules, regulations, codes, ordinances, orders, decrees,
judgments, injunctions, notices or binding agreements issued, promulgated or
entered into by any Governmental Authority, relating in any way to the
environment, preservation or reclamation of natural resources, the management,
Release or threatened Release of any Hazardous Material or to health and safety
matters, including the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 U.S.C. (S)(S) 9601 et seq. (collectively
"CERCLA"), the Solid Waste Disposal Act, as amended by the Resource Conservation
and Recovery Act of 1976 and Hazardous and Solid Waste Amendments of 1984, 42
U.S.C. (S)(S) 6901 et seq., the Federal Water Pollution Control Act, as amended
by the Clean Water Act of 1977, 33 U.S.C. (S)(S) 1251 et seq., the Clean Air Act
of 1970, as amended 42 U.S.C. (S)(S) 7401 et seq., the Toxic Substances Control
Act of 1976, 15 U.S.C. (S)(S) 2601 et seq., the Occupational Safety and Health
Act of 1970, as amended, 29 U.S.C. (S)(S) 651 et seq., the Emergency Planning
and Community Right-to-Know Act of 1986, 42 U.S.C. (S)(S) 11001 et seq., the
Safe Drinking Water Act of 1974, as amended, 42 U.S.C. (S)(S) 300(f) et seq.,
the Hazardous Materials Transportation Act, 49 U.S.C. (S)(S) 5101 et seq., and
any similar or implementing state or local law, and all amendments or
regulations promulgated under any of the foregoing.
"Environmental Permit" means any permit, approval, authorization,
certificate, license, variance, filing or permission required by or from any
Governmental Authority pursuant to any Environmental Law.
"Environmental Property" is defined in Section 3.16(a).
"Equity Issuance" means the issuance by the Borrower of any equity
interests therein, or the issuance or sale by the Borrower of any instrument or
obligation convertible into or exchangeable for, or giving any person any right,
option or warrant to acquire from the Borrower any equity interests therein or
any such convertible or exchangeable instrument or obligation, but excluding the
Excluded Shares.
"Equity Investment" is defined in Annex 3.
"ERISA" means the Employee Retirement Income Security Act of 1974, as the
same may be amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not incorporated)
that, together with the Borrower, is treated as a single employer under Section
414(b) or (c) of the Code, or solely for purposes of Section 302 of ERISA and
Section 412 of the Code, is treated as a single employer under Section 414 of
the Code.
9
"ERISA Event" means (a) any "reportable event", as defined in Section 4043
of ERISA or the regulations issued thereunder, with respect to a Plan; (b) the
adoption of any amendment to a Plan that would require the provision of security
pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA; (c) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (d) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (e) the incurrence of any liability under Title IV of ERISA
with respect to the termination of any Plan or the withdrawal or partial
withdrawal of the Borrower or any of its ERISA Affiliates from any Plan or
Multiemployer Plan; (f) the receipt by the Borrower or any ERISA Affiliate from
the PBGC or a plan administrator of any notice relating to the intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (g)
the receipt by the Borrower or any ERISA Affiliate of any notice concerning the
imposition of Withdrawal Liability or a determination that a Multiemployer Plan
is, or is expected to be, insolvent or in reorganization, within the meaning of
Title IV of ERISA; (h) the occurrence of a "prohibited transaction" with respect
to which the Borrower or any of its Subsidiaries is a "disqualified person"
(within the meaning of Section 4975 of the Code) or with respect to which the
Borrower or any such Subsidiary could otherwise be liable; and (i) any other
event or condition with respect to a Plan or Multiemployer Plan that could
reasonably be expected to result in liability of the Borrower.
"Eurodollar Borrowing" means a Borrowing comprised of Eurodollar Loans.
"Eurodollar Loan" means any Eurodollar Revolving Loan or Eurodollar Term
Loan.
"Eurodollar Rate" means, with respect to any Eurodollar Borrowing, the rate
(rounded upwards, if necessary, to the next 1/16 of 1%) at which dollar deposits
approximately equal in principal amount to the Administrative Agent's portion
(or if the Administrative Agent is not a Lender, the largest portion of any
single Lender) of such Eurodollar Borrowing and for a maturity comparable to
such Interest Period are offered to the principal New York office of the
Administrative Agent in immediately available funds in the London interbank
market at approximately 10:00 a.m., New York time, two Business Days prior to
the commencement of such Interest Period.
"Eurodollar Revolving Loan" means any Revolving Loan bearing interest at a
rate determined by reference to the Adjusted Eurodollar Rate in accordance with
the provisions of Article II.
"Eurodollar Term Borrowing" means a Borrowing comprised of Eurodollar Term
Loans.
"Eurodollar Term Loan" means any Term Loan bearing interest at a rate
determined by reference to the Adjusted Eurodollar Rate in accordance with the
provisions of Article II.
"Event of Default" is defined in Section 7.01.
"Excess Cash Flow" for any period, means EBITDA for such period, less the
sum of
(a) (i) permitted Capital Expenditures, (ii) Taxes, (iii) Consolidated
Interest Expense, (iv) increases in Adjusted Working Capital for such
period, (v) scheduled and mandatory payments of Debt, (vi) voluntary
prepayments of Term Loans, (vii) payments pursuant to Section 6.05(a)(i) in
connection with purchases of the Borrower's Capital Stock, in each case to
the extent made in cash during such period; (viii) cash consideration paid
for Permitted Acquisitions (but excluding cash consideration funded by a
Borrowing
10
under the Revolving Credit Commitments), and (ix) cash dividends paid on
the Exchangeable Preferred Stock to the extent permitted by this Agreement,
plus the sum of
(b) (i) decreases in Adjusted Working Capital for such period, (ii)
refunds of taxes paid in prior periods, and (iii) proceeds to the Borrower
or any Restricted Subsidiary of any Indebtedness referred to in Section
6.01(e), in each case to the extent received in cash or cash equivalents
during such period.
"Exchangeable Preferred Stock" means the Borrower's 13 1/4% Senior
Exchangeable PIK Preferred Stock due 2010 (Liquidation Preference $100 Per
Share).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Excluded Shares" means Capital Stock of the Borrower issued to a
Subsidiary of the Borrower or to an employee stock ownership plan or trust
established by the Borrower or any of its Subsidiaries for the benefit of their
employees.
"Existing Letters of Credit" means each Letter of Credit previously issued
for the account of any Credit Party that (a) is outstanding on the Closing Date
and (b) is listed on Schedule 1.01(a).
"Fair Market Value" means, with respect to any Property, the price which
could be negotiated in an arm's-length free market transaction, for cash,
between a willing seller and a willing buyer, neither of whom is under undue
pressure or compulsion to complete the transaction.
"Fee Letter" means the Fee Letter dated July 8, 1998, between the Borrower
and the Syndication Agent.
"Fees" means the Commitment Fees, the fees described in Section 2.05(c),
the Administrative Agent's Fees, the L/C Participation Fees and the Issuing Bank
Fees.
"Financial Officer" means the Chief Executive Officer or the Chief
Financial Officer of the Borrower.
"Fixed Charge Coverage Ratio" means, with respect to the Borrower and its
Restricted Subsidiaries for any period of four consecutive fiscal quarters, the
ratio of (a) EBITDA for such period, to (b) the sum of Capital Expenditures paid
in cash, Consolidated Interest Expense, scheduled amortizations of Debt, taxes
paid or due and payable, and dividends or other distributions on the Capital
Stock of such person paid in cash (other than to the Borrower or another
Restricted Subsidiary), in each case for such period.
"Foreign Subsidiary" means any Subsidiary that is not a Domestic
Subsidiary.
"FSC" means ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co. LLC, a Delaware limited liability company.
"GAAP" means generally accepted accounting principles applied on a
consistent basis.
"Governmental Authority" means any Federal, state, local or foreign court
or governmental agency, authority, instrumentality or regulatory body.
11
"Guarantee" of or by any person means any obligation, contingent or
otherwise, of such person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other person (the "primary obligor") in any
manner, whether directly or indirectly, and including any obligation of such
person, direct or indirect, (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or to purchase (or to advance
or supply funds for the purchase of) any security for the payment of such
Indebtedness, (b) to purchase or lease property, securities or services for the
purpose of assuring the owner of such Indebtedness of the payment of such
Indebtedness or (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness; provided, however, that the
term "Guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business.
"Guarantors" means the Subsidiary Guarantors.
"Hazardous Materials" means all explosive or radioactive substances or
wastes, hazardous or toxic substances or wastes, pollutants, solid, liquid or
gaseous wastes, including petroleum or petroleum distillates, asbestos or
asbestos containing materials, polychlorinated biphenyls ("PCBs") or PCB-
containing materials or equipment, radon gas, infectious or medical wastes and
all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hedging Obligations" means, with respect to any person, all obligations of
such person in respect of Interest Rate Agreements, foreign currency exchange
agreements or other interest or exchange rate hedging arrangements.
"Incur" means issue, assume, Guarantee, incur or otherwise become liable
for; provided, however, that any Indebtedness or Capital Stock of a person
existing at the time such person becomes a Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be Incurred by such
Subsidiary at the time it becomes a Subsidiary. Any Indebtedness issued at a
discount (including Indebtedness on which interest is payable through the
issuance of additional Indebtedness) shall be deemed incurred at the time of
original issuance of the Indebtedness at the initial accreted amount thereof.
"Incurred" and "Incurring" have corresponding meanings.
"Indebtedness" of any person means, without duplication, (a) all
obligations of such person for borrowed money or with respect to deposits or
advances of any kind held by it, (b) all obligations of such person evidenced by
bonds, debentures, notes or similar instruments, (c) financings of accounts
receivable, (d) all obligations of such person under other title retention
agreements relating to property or assets purchased by such person, (e) all
obligations of such person issued or assumed as the deferred purchase price of
property or services (excluding trade accounts payable and accrued obligations
incurred in the ordinary course of business), (f) all Indebtedness of others
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such person, whether or not the obligations secured thereby have
been assumed (measured as the fair market value of such property, (g) all
Guarantees by such person of Indebtedness of others (measured by the amount for
which such person would be liable), (h) all Capital Lease Obligations of such
person , (i) all net Hedging Obligations of such person and (j) all obligations
of such person as an account party in respect of letters of credit and bankers'
acceptances (other than trade letters of credit and trade bankers' acceptances).
The Indebtedness of any person shall include the Indebtedness of any partnership
in which such person is a general partner.
"Indebtedness to be Paid" is defined in Section 6.01(a).
12
"Indemnitee" is defined in Section 9.05(b).
"Indemnity, Subrogation and Contribution Agreement" means the Indemnity,
Subrogation and Contribution Agreement, substantially in the form of Exhibit M,
---------
among the Borrower, the Subsidiary Guarantors and the Collateral Agent.
"Interest Payment Date" means, with respect to any Loan, the last day of
the Interest Period applicable to the Borrowing of which such Loan is a part
and, in the case of a Eurodollar Borrowing with an Interest Period of more than
three months' duration, each day that would have been an Interest Payment Date
had successive Interest Periods of three months' duration been applicable to
such Borrowing, and, in addition, the date of any prepayment of such Borrowing
or conversion of such Borrowing to a Borrowing of a different Type.
"Interest Period" means
(a) as to any Eurodollar Borrowing, the period commencing on the date
of such Borrowing and ending on the numerically corresponding day (or, if
there is no numerically corresponding day, on the last day) in the calendar
month that is 1, 2, 3 or 6 months (or, if Interest Periods of such duration
shall be available from each Lender, 9 or 12 months) thereafter, as the
Borrower may elect and
(b) as to any ABR Borrowing, the period commencing on the date of such
Borrowing and ending on the earlier of (i) the next succeeding March 31,
June 30, September 30 or December 31, and (ii) the Revolving Credit
Maturity Date, the Tranche A Maturity Date or the Tranche B Maturity Date,
as applicable,
provided, however, that if any Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless, in the case of a Eurodollar Borrowing only, such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day.
"Interest Rate Agreement" means, for any person, any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement designed to protect against fluctuations in interest rates.
"Investment" by any person means any direct or indirect loan (other than
advances to customers in the ordinary course of business that are recorded as
accounts receivable on the balance sheet of such person), advance or other
extension of credit or capital contribution (by means of transfers of cash or
other Property to others or payments for Property or services for the account or
use of others, or otherwise) to, or Incurrence of a Guarantee of any obligation
of, or purchase or acquisition of Capital Stock, bonds, notes, debentures or
other securities or evidence of Indebtedness issued by, any other person. In
determining the amount of any Investment made by transfer of any Property other
than cash, such Property shall be valued at its Fair Market Value at the time of
such Investment.
"Issuing Bank" is defined in the Preamble and Section 2.23(i).
"Issuing Bank Fees" is defined in Section 2.05(d).
"L/C Commitment" means the commitment of the Issuing Bank to issue Letters
of Credit pursuant to Section 2.23.
13
"L/C Disbursement" means a payment or disbursement made by the Issuing Bank
pursuant to a Letter of Credit.
"L/C Exposure" means at any time the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time plus (b) the aggregate
principal amount of all L/C Disbursements that have not yet been reimbursed at
such time. The L/C Exposure of any Revolving Credit Lender at any time means
its Applicable Percentage of the aggregate L/C Exposure at such time.
"L/C Participation Fee" is defined in Section 2.05(d).
"Lenders" means (a) the financial institutions listed on Annex 1 (other
than any such financial institution that has ceased to be a party hereto
pursuant to an Assignment and Acceptance) and (b) any financial institution that
has become a party hereto pursuant to an Assignment and Acceptance. Unless the
context clearly indicates otherwise, the term "Lenders" shall include the
Swingline Lender.
"Letter of Credit" means any letter of credit issued pursuant to Section
2.23 and any Existing Letter of Credit.
"Letter of Credit Request" means a letter of credit issuance, extension or
amendment request delivered by the Borrower to the Administrative Agent, in the
form of Exhibit G or such other form as shall be approved by the Administrative
Agent and the applicable Issuing Bank.
"Lien" means, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, encumbrance, charge or security interest in or on such asset, (b)
the interest of a vendor or a lessor under any conditional sale agreement,
capital lease or title retention agreement (or any financing lease having
substantially the same economic effect as any of the foregoing) relating to such
asset and (c) in the case of securities, any purchase option, call or similar
right of a third party with respect to such securities.
"Loans" means the Revolving Loans, the Term Loans and the Swingline Loans.
"Margin Stock" is defined in Regulation U.
"Material Adverse Effect" means (a) a materially adverse effect on the
business, assets, operations, prospects or condition, financial or otherwise, of
the Borrower and the Subsidiaries, taken as a whole, (b) impairment of the
ability of the Borrower or any other Credit Party to perform any of its
obligations under any Credit Document to which it is or will be a party, which
impairment is material with respect to the Borrower and the other Credit Parties
taken as a whole, or (c) impairment of the rights of or benefits available to
the Lenders under any Credit Document, which impairment is material with respect
to the Borrower and the other Credit Parties taken as a whole, to the Borrower,
or to a Material Subsidiary.
"Material Subsidiary" means a Restricted Subsidiary that, as of the end of
the most recent fiscal quarter for which financial statements are available
accounted for 5% or more of the Borrower's consolidated (i) total assets, (ii)
shareholders' equity, (iii) operating income (calculated for the four most
recently completed fiscal quarters for which financial statements are
available), or (iv) revenues (calculated for the four most recently completed
fiscal quarters for which financial statements are available), determined in
each case in accordance with GAAP.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
14
"Mortgaged Properties" means the owned real properties and leasehold and
subleasehold interests of the Credit Parties specified on Schedule 1.01(b).
"Mortgages" means the mortgages, deeds of trust, leasehold mortgages,
assignments of leases and rents, modifications and other security documents
delivered pursuant to Section 5.11, each substantially in the form of Exhibit K.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Net Cash Proceeds" means, with respect to any Prepayment Event,
(a) all cash or readily marketable cash equivalents received (including by
way of sale, discounting or payment of a note, installment receivable or other
instrument or obligation, but excluding any other consideration received in the
form of assumption by the acquiree of Indebtedness or other obligations relating
to such properties or assets or received in any other noncash form) therefrom by
such person, as part of the consideration for such Prepayment Event, if
applicable) received by or on behalf of the Borrower or any Restricted
Subsidiary in respect of such Prepayment Event, less
(b) the sum of
(i) the amount, if any, of all taxes (other than taxes based on
income) payable by the Borrower or any Restricted Subsidiary in
connection with such Prepayment Event and the Borrower's good-faith
best estimate of the amount of all taxes based on income payable in
connection with such Prepayment Event,
(ii) in the case of a Prepayment Event that is a Restricted
Asset Disposition, (A) the amount of any expense or reasonable reserve
established in accordance with GAAP against any liabilities associated
with the assets sold or disposed of and retained by the Borrower or
any Restricted Subsidiary (including (1) liabilities under any
indemnification obligations to the acquiror, (2) liabilities with
respect to representations and warranties, (3) liabilities retained by
the Borrower or such Restricted Subsidiary, and (4) employee
termination and similar costs relating to such disposition), provided
that the amount of any subsequent reduction of such reserve (other
than in connection with a payment in respect of any such liability)
shall be deemed to be Net Cash Proceeds of a Prepayment Event
occurring on the date of such reduction, and (B) the amount applied to
repay any Indebtedness (other than the Loans) to the extent such
Indebtedness is required by its terms to be repaid as a result of such
Prepayment Event,
(iii) fees, commissions and expenses (including, in the case of
Casualty Proceeds and Condemnation Proceeds, the costs of adjustment
and condemnation proceedings) and other costs paid by the Borrower or
any Restricted Subsidiary in connection with such Prepayment Event
(other than those payable to the Borrower or any Affiliate of the
Borrower), in each case only to the extent not already deducted in
arriving at the amount referred to in clause (a); and
(iv) all distributions and other payments made to minority
interest holders in Subsidiaries of such person or joint ventures as a
result of such Prepayment Event.
15
Notwithstanding the foregoing, no proceeds of any Restricted Asset Disposition
of fixed or capital assets, no Casualty Proceeds and no Condemnation Proceeds
shall constitute Net Cash Proceeds, to the extent that such proceeds held by the
Borrower or any Restricted Subsidiary to be reinvested, or are reinvested, in
other fixed or capital assets within one year of such Restricted Asset
Disposition; provided, that (i) at any time when the aggregate amount of such
proceeds from Restricted Asset Disposition held for reinvestment exceeds
$5,000,000 at any one time, such excess shall immediately constitute Net Cash
Proceeds, and (ii) at any time when an Event of Default of type described in
Section 7.01(b) or (c) shall have occurred and be continuing, such proceeds
shall immediately constitute Net Cash Proceeds to the extent that the Borrower
has not entered into binding agreements to acquire assets with such proceeds.
"New Lending Office" is defined in Section 2.20(e).
"Non-U.S. Lender" is defined in Section 2.20(e).
"Notes" means the Term Notes, the Revolving Credit Notes and the Swingline
Notes.
"Obligations" means all obligations defined as "Obligations" in the
Subsidiary Guarantee Agreement and the Security Documents.
"Other Taxes" is defined in Section 2.20(b).
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA.
"Perfection Certificate" means the Perfection Certificate substantially in
the form of Annex 2 to the Security Agreement.
"Permitted Acquisition" means any acquisition of the Assets or Capital
Stock of any person (other than the Borrower or a Restricted Subsidiary) in one
transaction or a series of transactions which satisfies each of the following
conditions:
(a) the aggregate amount of cash consideration as consideration for
such acquisition (less the amount of any cash equity contributions received
by the Borrower and applied as consideration for such acquisition) shall be
not greater than $10,000,000 in the aggregate after the Closing Date;
(b) the assets acquired in such acquisition shall comprise a business,
or assets of a business, of a type which is the same line of business as
the Borrower, or which is a related or complementary business to that of
the Borrower; and
(c) at the time of such Permitted Acquisition and after giving effect
thereto, no Default or Event of Default shall have occurred and be
continuing, and the Borrower shall be in pro forma compliance (after giving
effect to such acquisition) with the covenants contained in Section 6.10,
Section 6.11, Section 6.12 and Section 6.13 as of the most recent
applicable fiscal quarter or fiscal year end.
"Permitted Holder" means (a) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (or trusts for the benefit
of his heirs), (b) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, or (c) FSC or any successor entity
thereof controlled by the principals of FSC and any entity controlled by, or
under common control with, FSC.
16
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America), in
each case maturing within one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from the
date of acquisition thereof and having, at such date of acquisition, a
rating of A1/P1 from S&P and from ▇▇▇▇▇'▇;
(c) investments in certificates of deposit, banker's acceptances and
time deposits maturing within one year from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit accounts
issued or offered by, any domestic office of any commercial bank organized
under the laws of the United States of America or any State thereof that
has a combined capital and surplus and undivided profits of not less than
$250,000,000;
(d) other investment instruments approved in writing by the Required
Lenders and offered by financial institutions which have a combined capital
and surplus and undivided profits of not less than $250,000,000; and
(e) interests in mutual funds which invest primarily in instruments
described in clauses (a), (b) and (c).
"Permitted Purchase Money Lien" means (a) purchase money and similar Liens
existing on the Closing Date or (b) Liens applicable to real property,
improvements thereto or equipment or other Property acquired or constructed
after the Closing Date by the Borrower or any Restricted Subsidiary; provided
that (i) such security interests are incurred, and the Indebtedness secured
thereby is created, no later than 12 months after such acquisition (or
completion of construction), and (ii) such security interests do not apply to
any other property or assets of the Borrower or any Subsidiary.
"person" means any natural person, corporation, business trust, joint
venture, association, company, partnership or government, or any agency or
political subdivision thereof.
"Plan" means any employee pension benefit plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 307 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Pledge Agreement" means the Pledge Agreement, substantially in the form of
Exhibit J, between the Borrower, the Subsidiaries party thereto and the
Collateral Agent for the benefit of the Secured Parties.
"Preferred Stock" means any Capital Stock of a person, however designated,
which entitles the holder thereof to a preference with respect to the payment of
dividends, or as to the distribution of assets upon any voluntary or involuntary
liquidation or dissolution of such person, over shares of any other class of
Capital Stock issued by such person.
"Prepayment Event" means any Incurrence of Debt of the Borrower or any
Subsidiary,
17
any Equity Issuance, any Restricted Asset Disposition, any Restricted
Sale/Leaseback Transaction, any Casualty or any Condemnation.
"Pricing Adjustment" means, for any day, with respect to any Revolving Loan
or Tranche A Term Loan or with respect to the Commitment Fees, as the case may
be, the Pricing Adjustment set forth below, based upon the Debt/Adjusted EBITDA
Ratio as of the date of determination:
CATEGORY 2
CATEGORY 1 DEBT/ADJUSTED EBITDA CATEGORY 3
DEBT/ADJUSTED EBITDA RATIO LESS THAN 3.25:1.00 DEBT/ADJUSTED
RATIO GREATER THAN OR EQUAL AND GREATER THAN OR EBITDA RATIO LESS
TO 3.25:1.00 EQUAL TO 2.50:1.00 THAN 2.50:1.00
---------------------------- ------------------------- -----------------
Commitment Fees 0% 0.0625% 0.125%
ABR Tranche A Term 0% 0.25% 0.50%
Loans and Revolving
Loans
Eurodollar Tranche A 0% 0.25% 0.50%
Term Loans and
Revolving Loans
Each change in the Pricing Adjustment resulting from a change in the
Debt/Adjusted EBITDA Ratio shall become effective with respect to all
outstanding Loans and Commitments on the Business Day after the date of receipt
by the Administrative Agent of the financial statements and certificates
required by Section 5.04(a) or (b) 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) the Pricing Adjustment shall be 0% for 12 months after the Closing
Date,
(ii) at any time during which the Borrower has failed to deliver the
financial statements and certificates required by Section 5.04(a) or (b),
the Debt/Adjusted EBITDA Ratio shall be deemed to be in Category 1 for
purposes of determining the Pricing Adjustment; and
(iii) at any time after the occurrence and during the continuance of
an Event of Default relating to Section 7.01(b), (c), or (d) (but only with
respect to breaches of the covenants contained in Section 6.09 through
Section 6.13), the Debt/Adjusted EBITDA Ratio shall be deemed to be in
Category 1 for purposes of determining the Pricing Adjustment.
"Pricing Adjustment Certificate" means an pricing adjustment certificate
delivered by the Borrower to the Administrative Agent, in the form of Exhibit N
or such other form as shall be approved by the Administrative Agent.
"Property" means, with respect to any person, any interest of such person
in any kind of property or asset, whether real, personal or mixed, or tangible
or intangible, including Capital Stock in, and other securities of, any other
person.
"Public Equity Offering" means an underwritten public offering of common
stock of the Borrower pursuant to an effective registration statement under the
Securities Act.
18
"Recapitalization" means the transactions described in Annex 3, and
includes any other transactions incidental thereto.
"Recapitalization Agreement" means the Recapitalization Agreement, dated as
of [ ], 1998, among Acquisition Co. and the Borrower, as amended
and otherwise modified from time to time with the consent of the Administrative
Agent and the Syndication Agent, together with any other agreement, instrument
or other document to be entered into or delivered by, between or among the
Borrower, the Acquisition Co., FSC and any of their respective Affiliates in
connection with the Recapitalization, as each such agreement, instrument or
document may be amended, modified or supplemented from time to time in
accordance with the terms thereof and hereof.
"Redeemable Dividend" means, for any dividend with respect to Redeemable
Stock, the quotient of the dividend divided by the difference between one and
the maximum statutory federal income tax rate (expressed as a decimal number
between 1 and 0) then applicable to the issuer of such Redeemable Stock.
"Redeemable Stock" means, with respect to any person, any Capital Stock
that by its terms (or by the terms of any security into which it is convertible
or for which it is exchangeable, in either case at the option of the holder
thereof,) or otherwise (a) matures or is mandatorily redeemable pursuant to a
sinking fund obligation or otherwise, (b) is or may become redeemable or
repurchaseable at the option of the holder thereof, in whole or in part, or (c)
is convertible or exchangeable, in either case at the option of the holder
thereof, for Debt or Disqualified Stock.
"Refinancing Indebtedness" means Indebtedness that is Incurred to refund,
refinance, replace, renew, repay or extend (including pursuant to any defeasance
or discharge mechanism) (collectively, "refinances," and "refinanced" shall have
a correlative meaning) any Indebtedness existing on the Closing Date or Incurred
in compliance with this Agreement ((including (a) Indebtedness of the Borrower
that refinances Indebtedness of any Restricted Subsidiary (to the extent
permitted in this Agreement), (b) Indebtedness of any Restricted Subsidiary that
refinances Indebtedness of another Restricted Subsidiary, and (c) Indebtedness
that refinances Refinancing Indebtedness); provided, however, that (i) the
Refinancing Indebtedness has a Stated Maturity no earlier than the Stated
Maturity of the Indebtedness being refinanced, (ii) the Refinancing Indebtedness
has an Average Life at the time such Refinancing Indebtedness is Incurred that
is equal to or greater than the Average Life of the Indebtedness being
refinanced and (iii) such Refinancing Indebtedness is Incurred in an aggregate
principal amount (or if issued with original issue discount, an aggregate issue
price) that is equal to or less than the aggregate principal amount (or if
issued with original issue discount, the aggregate accreted value) then
outstanding of the Indebtedness being refinanced, plus fees, underwriting
discounts and other costs and expenses incurred in connection with such
Refinancing Indebtedness; provided further, however, that Refinancing
Indebtedness shall not include (x) Indebtedness of a Restricted Subsidiary that
is not a Subsidiary Guarantor that refinances Indebtedness of the Borrower or
(y) Indebtedness of the Borrower or a Restricted Subsidiary that refinances
Indebtedness of an Unrestricted Subsidiary.
"Register" is defined in Section 9.04(d).
"Regulation T" means Regulation T of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"Regulation U" means Regulation U of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
19
"Regulation X" means Regulation X of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"Regulatory Shares" means, with respect to any person, shares of such
person required to be issued as qualifying shares to directors or persons
similarly situated or shares issued to persons other than the Borrower or a
wholly owned Restricted Subsidiary of the Borrower in response to regulatory
requirements of foreign jurisdictions pursuant to a resolution of the Board of
Directors of such person, so long as such shares do not exceed 1% of the total
outstanding shares of Capital Stock of such person and any owners of such shares
irrevocably waive or agree to remit to the Borrower any dividends or
distributions payable in respect of such shares.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing,
depositing, dispersing, emanating or migrating of any Hazardous Material in,
into, onto or through the environment.
"Remedial Action" means (a) "remedial action" as such term is defined in
CERCLA, 42 U.S.C. Section 9601(24), and (b) all other actions required by any
Governmental Authority or voluntarily undertaken to: (i) cleanup, remove, treat,
▇▇▇▇▇ or in any other way address any Hazardous Material in the environment;
(ii) prevent the Release or threat of Release, or minimize the further Release
of any Hazardous Material so it does not migrate or endanger or threaten to
endanger public health, welfare or the environment; or (iii) perform studies and
investigations in connection with, or as a precondition to, clause (i) or (ii).
"Required Lenders" means, at any time, Lenders having Loans (excluding
Swingline Loans), L/C Exposure, Swingline Exposure and unused Revolving Credit
Commitments and Term Loan Commitments representing greater than 50% of the sum
of all Loans outstanding (excluding Swingline Loans), L/C Exposure, Swingline
Exposure and unused Revolving Credit Commitments and Term Loan Commitments at
such time.
"Responsible Officer" of any corporation means any executive officer or
Financial Officer of such corporation and any other officer or similar official
thereof responsible for the administration of the obligations of such
corporation in respect of this Agreement.
"Restricted Asset Disposition" means any sale, transfer, lease or other
disposition of any asset of the Borrower or any Subsidiary other than an
Unrestricted Asset Disposition.
"Restricted Payment" is defined in Section 6.05(a).
"Restricted Sale/Leaseback Transaction" means any Sale/Leaseback
Transaction other than an Unrestricted Sale/Leaseback Transaction.
"Restricted Subsidiary" means any Subsidiary of the Borrower other than an
Unrestricted Subsidiary.
"Revolving Credit Borrowing" means a Borrowing comprised of Revolving
Loans.
"Revolving Credit Commitment" means, with respect to each Lender, the
commitment of such Lender to make Revolving Loans hereunder as set forth on
Annex I, or in the Assignment and Acceptance pursuant to which such Lender
assumed its Revolving Credit Commitment, as applicable, as the same may be (a)
reduced from time to time pursuant to Section 2.09 and (b) reduced or increased
from time to time pursuant to assignments by or to such Lender pursuant to
Section 9.04.
20
"Revolving Credit Exposure" means, with respect to any Lender at any time,
the aggregate principal amount at such time of all outstanding Revolving Loans
of such Lender, plus the aggregate amount at such time of such Lender's L/C
Exposure, plus the aggregate amount at such time of such Lender's Swingline
Exposure.
"Revolving Credit Lender" means a Lender with a Revolving Credit
Commitment.
"Revolving Credit Maturity Date" means the last day of the fiscal quarter
of the Borrower in which the fifth anniversary of the Closing Date occurs.
"Revolving Credit Note" means a promissory note of the Borrower,
substantially in the form of Exhibit C, evidencing Revolving Loans.
"Revolving Loans" means the revolving loans made by the Lenders to the
Borrower pursuant to clause (c) of Section 2.01. Each Revolving Loan shall be a
Eurodollar Revolving Loan or an ABR Revolving Loan.
"S&P" means Standard & Poor's Ratings Service.
"Sale/Leaseback Transactions" means any arrangement, directly or
indirectly, with any person whereby it shall sell or transfer any property, real
or personal, used or useful in its business, and thereafter rent or lease such
property or other property which it intends to use for substantially the same
purpose or purposes as the property being sold or transferred.
"Secured Parties" is defined in the Security Agreement.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Agreement" means the Security Agreement, substantially in the
form of Exhibit I, between the Borrower, the Subsidiaries party thereto and the
Collateral Agent for the benefit of the Secured Parties.
"Security Documents" means the Mortgages, the Security Agreement, the
Pledge Agreement and each of the security agreements, mortgages and other
instruments and documents executed and delivered pursuant to any of the
foregoing or pursuant to Section 5.11.
"Stated Maturity" means, with respect to any security, the date specified
in such security as the fixed date on which the final payment of principal of
such security is due and payable, including pursuant to any mandatory redemption
provision (but excluding any provision providing for the repurchase of such
security at the option of the holder thereof upon the happening of any
contingency beyond the control of the issuer unless such contingency has
occurred).
"Statutory Reserves" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board and any other banking authority, domestic or foreign,
to which the Administrative Agent or any Lender (including any branch,
Affiliate, or other fronting office making or holding a Loan) is subject (a)
with respect to the Base CD Rate, for new negotiable nonpersonal time deposits
in dollars of over $100,000 with maturities approximately equal to three months,
and (b) with respect to the Adjusted Eurodollar Rate, for Eurocurrency
Liabilities (as defined in Regulation D of the Board). Such reserve percentages
shall include those imposed pursuant to such Regulation D. Eurodollar Loans
shall
21
be deemed to constitute Eurocurrency Liabilities and to be subject to such
reserve requirements without benefit of or credit for proration, exemptions or
offsets that may be available from time to time to any Lender under such
Regulation D. Statutory Reserves shall be adjusted automatically on and as of
the effective date of any change in any reserve percentage.
"Subordinated Obligation" means any Indebtedness of the Borrower or any
Subsidiary (whether outstanding on the Closing Date or thereafter Incurred)
which is subordinate or junior in right of payment to the Notes or the
applicable Guarantee pursuant to a written agreement to that effect.
"subsidiary" means, with respect to any person (herein referred to as the
"parent"), any corporation, partnership, association or other business entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or more than 50% of
the general partnership interests are, at the time any determination is being
made, owned, controlled or held, or (b) that is, at the time any determination
is made, otherwise Controlled, by the parent or one or more subsidiaries of the
parent or by the parent and one or more subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Borrower.
"Subsidiary Guarantee Agreement" means the Subsidiary Guarantee Agreement,
substantially in the form of Exhibit L, made by the Subsidiary Guarantors in
favor of the Collateral Agent for the benefit of the Secured Parties.
"Subsidiary Guarantor" means each Subsidiary listed on Schedule 1.01(c),
and each other Subsidiary that is or becomes a party to a Subsidiary Guarantee
Agreement.
"Swingline Commitment" means the commitment of the Swingline Lender to make
loans pursuant to Section 2.22, as the same may be reduced from time to time
pursuant to Section 2.09.
"Swingline Exposure" means at any time the aggregate principal amount at
such time of all outstanding Swingline Loans. The Swingline Exposure of any
Revolving Credit Lender at any time shall equal its Applicable Percentage of the
aggregate Swingline Exposure at such time.
"Swingline Lender" is defined in the Preamble.
"Swingline Loan" means any loan made by the Swingline Lender pursuant to
Section 2.22.
"Swingline Note" means a promissory note evidencing Swingline Loans,
executed and delivered as provided in Section 2.22 in substantially the form of
Exhibit D.
"Syndication Agent" is defined in the Preamble.
"Taxes" is defined in Section 2.20(a).
"Term Borrowing" means a Borrowing comprised of Tranche A Term Loans or
Tranche B Term Loans.
"Term Loan Commitments" means the Tranche A Commitments and the Tranche B
Commitments.
22
"Term Loan Repayment Date" means any Tranche A Repayment Date or Tranche B
Repayment Date.
"Term Loans" means Tranche A Term Loans and Tranche B Term Loans.
"Term Note" means a promissory note of the Borrower, substantially in the
form of Exhibit B, evidencing Term Loans.
"Total Revolving Credit Commitment" means, at any time, the aggregate
amount of the Revolving Credit Commitments, as in effect at such time.
"Tranche A Commitment" means, with respect to each Lender, the commitment
of such Lender to make Tranche A Term Loans hereunder as set forth on Schedule
2.01, or in the Assignment and Acceptance pursuant to which such Lender assumed
its Tranche A Commitment, as applicable, as the same may be (a) reduced from
time to time pursuant to Section 2.09 and (b) reduced or increased from time to
time pursuant to assignments by or to such Lender pursuant to Section 9.04.
"Tranche A Lenders" means Lenders having outstanding Tranche A Term Loans.
"Tranche A Maturity Date" means the date that is the fifth anniversary of
the Closing Date.
"Tranche A Term Borrowing" means a Borrowing comprised of Tranche A Term
Loans.
"Tranche A Repayment Date" shall have the meaning set forth in Section
2.11(a)(i).
"Tranche A Term Loans" means the terms loans made by the Lenders to the
Borrower pursuant to clause (a) of Section 2.01. Each Tranche A Term Loan shall
be either a Eurodollar Term Loan or an ABR Term Loan.
"Tranche B Commitment" means, with respect to each Lender, the commitment
of such Lender to make Tranche B Term Loans hereunder as set forth in Annex 1,
or in the Assignment and Acceptance pursuant to which such Lender assumed its
Tranche B Commitment, as applicable, as the same may be (a) reduced from time to
time pursuant to Section 2.09 and (b) reduced or increased from time to time
pursuant to assignments by or to such Lender pursuant to Section 9.04.
"Tranche B Lenders" means Lenders having outstanding Tranche B Term Loans.
"Tranche B Maturity Date" means the date that is the seventh anniversary of
the Closing Date.
"Tranche B Term Borrowing" means a Borrowing comprised of Tranche B Term
Loans.
"Tranche B Repayment Date" shall have the meaning set forth in Section
2.11(a)(ii).
"Tranche B Term Loans" means the term loans made by the Lenders to the
Borrower pursuant to clause (b) of Section 2.01. Each Tranche B Term Loan shall
be either a Eurodollar Term Loan or an ABR Term Loan.
"Transaction Costs" means commitment fees, financing fees, advisory fees,
underwriting
23
fees and discounts, and other out-of-pocket fees and expenses relating to the
Recapitalization, excluding any expenses of the Current Owners which are
deducted from the Redemption Amount.
"Transactions" is defined in Section 3.02.
"Transferee" is defined in Section 2.20(a).
"Type", when used in respect of any Loan or Borrowing, shall refer to the
Rate by reference to which interest on such Loan or on the Loans comprising such
Borrowing is determined. For purposes hereof, the term "Rate" shall include the
Adjusted Eurodollar Rate and the Alternate Base Rate.
"Unrestricted Asset Disposition" means, on a consolidated basis with
respect to the Borrower or any wholly owned Restricted Subsidiary, any sale,
transfer, lease or other disposition of any inventory, cash, Permitted
Investment, or obsolete or unusable Property of the Borrower or any such wholly
owned Restricted Subsidiary in the ordinary course of business and not otherwise
in violation of this Agreement.
"Unrestricted Sale/Leaseback Transaction" mean any Sale/Leaseback
Transaction which does not involve a sale or transfer of property which is owned
by the Borrower or its Restricted Subsidiaries on the Closing Date (or any
replacements thereof).
"Unrestricted Subsidiary" means (i) any Subsidiary of the Borrower that at
the time of determination shall be designated an Unrestricted Subsidiary by the
Board of Directors of the Borrower in the manner provided below and (ii) any
Subsidiary of an Unrestricted Subsidiary. The Board of Directors of the
Borrower may designate any Subsidiary of the Borrower (including any newly
acquired or newly formed Subsidiary of the Borrower) to be an Unrestricted
Subsidiary; provided, however, that (A) such Subsidiary and none of its
Subsidiaries owns any Capital Stock or Indebtedness of, or owns or holds any
Lien on any property of, the Borrower or any other Subsidiary of the Borrower
that is not a Subsidiary of the Subsidiary to be so designated, and (B) the
Subsidiary to be so designated has total consolidated assets of $1,000 or less.
"Voting Stock" of a corporation means all classes of Capital Stock of such
corporation then outstanding and normally entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof.
"wholly owned Restricted Subsidiary" of any person means a Restricted
Subsidiary of which securities (except for Regulatory Shares) or other ownership
interests representing 100% of the equity or 100% of the ordinary voting power
or 100% of the general partnership interests are, at the time any determination
is being made, owned, controlled or held by the Borrower or one or more wholly
owned Restricted Subsidiaries of the Borrower or by the Borrower and one or more
wholly owned Restricted Subsidiaries of the Borrower.
"Withdrawal Liability" means liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.
"Work" is defined in Section 5.12(e).
SECTION 1.02. Terms Generally. The definitions in Section 1.01 shall apply
equally to both the singular and plural forms of the terms defined. Whenever
the context may require, any
24
pronoun shall include the corresponding masculine, feminine and neuter forms.
The words "include", "includes" and "including" shall be deemed to be followed
by the phrase "without limitation". All references herein to Articles, Sections,
Annexes, Exhibits and Schedules shall be deemed references to Articles and
Sections of, and Annexes, Exhibits and Schedules to, this Agreement unless the
context shall otherwise require. Except as otherwise expressly provided herein,
(a) any reference in this Agreement to any Credit Document means such document
as amended, restated, supplemented or otherwise modified from time to time and
(b) all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided, however, that
for purposes of determining compliance with the covenants contained in Article
VI, all accounting terms herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with GAAP as in effect on
the date of this Agreement and applied on a basis consistent with the
application used in the financial statements referred to in Section 3.05(a).
ARTICLE II
The Credits
SECTION 2.01. Commitments. Subject to the terms and conditions and relying
upon the representations and warranties herein set forth, each Lender agrees,
severally and not jointly, (a) to make a single Tranche A Term Loan to the
Borrower on the Closing Date in a principal amount not to exceed its Tranche A
Commitment, (b) to make a single Tranche B Term Loan to the Borrower on the
Closing Date in a principal amount not to exceed its Tranche B Commitment, and
(c) to make Revolving Loans to the Borrower, at any time and from time to time
on or after the date hereof, and until the earlier of the Revolving Credit
Maturity Date and the termination of the Revolving Credit Commitment of such
Lender in accordance with the terms hereof, in an aggregate principal amount at
any time outstanding that will not result in (i) such Lender's Revolving Credit
Exposure exceeding (ii) such Lender's Revolving Credit Commitment. Within the
limits set forth in clause (c) of the preceding sentence and subject to the
terms, conditions and limitations set forth herein, the Borrower may borrow, pay
or prepay and reborrow Revolving Loans. Amounts paid or prepaid in respect of
Term Loans may not be reborrowed.
SECTION 2.02. Loans. (a) Each Loan (other than Swingline Loans) shall be
made as part of a Borrowing consisting of Loans made by the Lenders ratably in
accordance with their applicable Revolving Credit Commitments; provided,
however, that the failure of any Lender to make any Loan shall not in itself
relieve any other Lender of its obligation to lend hereunder (it being
understood, however, that no Lender shall be responsible for the failure of any
other Lender to make any Loan required to be made by such other Lender). Except
for Loans deemed made pursuant to Section 2.02(e) or pursuant to Section
2.22(e), the Loans comprising any Borrowing shall be in an aggregate principal
amount that is (i) in the case of Eurodollar Loans, an integral multiple of
$1,000,000 and not less than $3,500,000, (ii) in the case of ABR Loans, an
integral multiple of $100,000 and not less than $1,000,000 or (iii) equal to the
remaining available balance of the applicable Commitments.
(b) Subject to Sections 2.08 and 2.15, each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Borrower may request pursuant
to Section 2.03. Each Lender may at its option make any Eurodollar Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such
Loan; provided that any exercise of such option shall not affect the obligation
of the Borrower to repay such Loan in accordance with the terms of this
Agreement and the applicable Note. Borrowings of more than one Type may be
outstanding at the same time; provided, however, that the Borrower shall not be
entitled to request any
25
Borrowing that, if made, would result in more than five Eurodollar Borrowings
outstanding hereunder at any time. For purposes of the foregoing, Borrowings
having different Interest Periods, regardless of whether they commence on the
same date, shall be considered separate Borrowings.
(c) Except with respect to Loans made pursuant to Section 2.02(e), each
Lender shall make each Loan to be made by it hereunder on the proposed date
thereof by wire transfer of immediately available funds to such account in New
York City as the Administrative Agent may designate not later than 11:00 a.m.,
New York City time, and the Administrative Agent shall by 12:00 (noon), New York
City time, credit the amounts so received to an account in the name of the
Borrower and designated by the Borrower in the applicable Borrowing Request or,
if a Borrowing shall not occur on such date because any condition precedent
herein specified shall not have been met, return the amounts so received to the
respective Lenders.
(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 portion of such Borrowing,
the Administrative Agent may assume that such Lender has made such portion
available to the Administrative Agent on the date of such Borrowing in
accordance with clause (c) and the Administrative Agent may, in reliance upon
such assumption, make available to the Borrower on such date a corresponding
amount. If the Administrative Agent shall have so made funds available then, to
the extent that such Lender shall not have made such portion 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, the interest rate applicable at the time to
the Loans comprising such Borrowing and (ii) in the case of such Lender, for the
first three such days, the Federal Funds Effective Rate, and for each day
thereafter, the Alternate Base Rate. If such Lender shall repay to the
Administrative Agent such corresponding amount, such amount shall constitute
such Lender's Loan as part of such Borrowing for purposes of this Agreement.
(e) If the Issuing Bank shall not have received from the Borrower the
payment required to be made by Section 2.23(e) within the time specified in such
Section, the Issuing Bank will promptly notify the Administrative Agent of the
L/C Disbursement and the Administrative Agent will promptly notify each
Revolving Credit Lender of such L/C Disbursement and its Applicable Percentage
thereof. Each Revolving Credit Lender shall pay by wire transfer of immediately
available funds to the Administrative Agent not later than 2:00 p.m., New York
City time, on such date of notification (or, if such Revolving Credit Lender
shall have received such notice later than 12:00 (noon), New York City time, on
any day, not later than 10:00 a.m., New York City time, on the immediately
following Business Day), an amount equal to such Lender's Applicable Percentage
of such L/C Disbursement (it being understood that such amount shall be deemed
to constitute an ABR Revolving Loan of such Lender and such payment shall be
deemed to have reduced the L/C Exposure), and the Administrative Agent will
promptly pay to the Issuing Bank amounts so received by it from the Revolving
Credit Lenders. The Administrative Agent will promptly pay to the Issuing Bank
any amounts received by it from the Borrower pursuant to Section 2.23(e) prior
to the time that any Revolving Credit Lender makes any payment pursuant to this
clause; any such amounts received by the Administrative Agent thereafter will be
promptly remitted by the Administrative Agent to the Revolving Credit Lenders
that shall have made such payments and to the Issuing Bank, as their interests
may appear. If any Revolving Credit Lender shall not have made its Applicable
Percentage of such L/C Disbursement available to the Administrative Agent as
provided above, such Lender and the Borrower severally agree to pay interest on
such amount, for each day from and including the date such amount is required to
be
26
paid in accordance with this clause to but excluding the date such amount is
paid, to the Administrative Agent for the account of the Issuing Bank at (i) in
the case of the Borrower, a rate per annum equal to the interest rate applicable
to Revolving Loans pursuant to Section 2.06(a), and (ii) in the case of such
Lender, for the first such day, the Federal Funds Effective Rate, and for each
day thereafter, the Alternate Base Rate.
SECTION 2.03. Borrowing Procedure. In order to request a Borrowing (other
than a Swingline Loan or a deemed Borrowing pursuant to Section 2.02(e), as to
which this Section shall not apply), the Borrower shall hand deliver or telecopy
to the Administrative Agent a duly completed Borrowing Request (a) in the case
of a Eurodollar Borrowing, not later than 11:00 a.m., New York City time, three
Business Days before a proposed Borrowing, and (b) in the case of an ABR
Borrowing, not later than 11:00 a.m., New York City time, one Business Day
before a proposed Borrowing. Each Borrowing Request shall be irrevocable, shall
be signed by or on behalf of the Borrower and shall specify the following
information: (i) whether the Borrowing then being requested is to be a Term
Borrowing or a Revolving Credit Borrowing, and whether such Borrowing is to be a
Eurodollar Borrowing or an ABR Borrowing; (ii) the date of such Borrowing (which
shall be a Business Day), (iii) the number and location of the account to which
funds are to be disbursed (which shall be an account that complies with the
requirements of Section 2.02(c)); (iv) the amount of such Borrowing; and (v) if
such Borrowing is to be a Eurodollar Borrowing, the Interest Period with respect
thereto; provided, however, that, notwithstanding any contrary specification in
any Borrowing Request, each requested Borrowing shall comply with the
requirements set forth in Section 2.02. Any Borrowing made on the Closing Date
shall be an ABR Borrowing. If no election as to the Type of Borrowing is
specified in any such notice, then the requested Borrowing shall be an ABR
Borrowing. If no Interest Period with respect to any Eurodollar Borrowing is
specified in any such notice, then the Borrower shall be deemed to have selected
an Interest Period of one month's duration. The Administrative Agent shall
promptly advise the applicable Lenders of any notice given pursuant to this
Section, and of each Lender's portion of the requested Borrowing.
SECTION 2.04. Notes and Records. (a) The Revolving Loans, Term Loans and
Swingline Loans made by each Lender shall be evidenced by a Revolving Credit
Note, Term Note and Swingline Note, respectively, duly executed on behalf of the
Borrower, dated the Closing Date, payable to the order of such Lender in a
principal amount equal to such Lender's Revolving Credit Commitment, in the case
of its Revolving Credit Note, such Lender's Term Commitment, in the case of its
Term Note or such Lender's Swingline Commitment, in the case of its Swingline
Note. The outstanding principal balance of each Loan, as evidenced by such a
Note, shall be payable (i) in the case of a Swingline Loan, on the last day of
the Interest Period applicable to such Loan and on the Revolving Credit Maturity
Date, (ii) in the case of a Revolving Loan, on the Revolving Credit Maturity
Date and (iii) in the case of a Term Loan, as provided in Section 2.11.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the 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. Each Lender shall, and is hereby authorized by the
Borrower to, endorse on the schedule attached to each Note delivered to such
Lender (or on a continuation of such schedule attached to such Note and made a
part thereof), or otherwise to record in such Lender's internal records, an
appropriate notation evidencing the date and amount of each Loan from such
Lender, each payment and prepayment of principal of any such Loan, each payment
of interest on any such Loan and the other information provided for on such
schedule; provided, however, that the failure of any Lender to make such a
notation or any error therein shall not in any manner affect the obligation of
the Borrower to repay the Loans made by such Lender in accordance with the terms
of this Agreement and the
27
applicable Note.
(c) The Administrative Agent shall maintain accounts in which it will
record (i) the amount of each Loan made hereunder, the Type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder from the Borrower or any Guarantor and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to clauses (b)
and (c) 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.
SECTION 2.05. Fees. (a) The Borrower agrees to pay to each Lender, through
the Administrative Agent, on March 31, June 30, September 30 and December 31
(beginning on September 30, 1998) and on each date on which any Commitment of
such Lender shall expire or be terminated as provided herein, a commitment fee
(a "Commitment Fee") of 0.50% per annum less the applicable Pricing Adjustment
on the average daily excess of the aggregate amount of the Revolving Credit
Commitments over the aggregate amount of the Revolving Credit Exposures during
the preceding quarter (or other period commencing with the Closing Date or
ending with the Revolving Credit Maturity Date or the date on which the
Commitments 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 begin to accrue on the
date of execution of this Agreement and shall cease to accrue on the date on
which the Commitment of such Lender shall expire or be terminated as provided
herein. For purposes of calculating Commitment Fees only, no portion of the
Revolving Credit Commitments shall be deemed utilized under Section 2.17 as a
result of outstanding Swingline Loans.
(b) The Borrower agrees to pay to the Administrative Agent, for its own
account, the administrative fees set forth in the Fee Letter at the times and in
the amounts specified therein (the "Administrative Agent Fees").
(c) The Borrower agrees to pay to the Administrative Agent, for payment to
the other Lenders (to the extent applicable), on the Closing Date, the other
fees specified in the Fee Letter, and the Administrative Agent shall pay to each
Lender on the Closing Date that portion of such fees that shall be owing to such
Lender.
(d) The Borrower agrees to pay (i) to each Revolving Credit Lender,
through the Administrative Agent, on March 31, June 30, September 30 and
December 31 of each year and on the date on which the Revolving Credit
Commitment of such Lender shall be terminated as provided herein, a fee (an "L/C
Participation Fee") calculated on such Lender's Applicable Percentage of the
average daily aggregate L/C Exposure (excluding the portion thereof attributable
to unreimbursed L/C Disbursements) during the preceding quarter (or shorter
period commencing with the date hereof or ending with the Revolving Credit
Maturity Date or the date on which all Letters of Credit have been canceled or
have expired and the Revolving Credit Commitments of all Lenders shall have been
terminated) at a rate equal to the applicable margin from time to time used to
determine the interest rate on Revolving Credit Borrowings comprised of
Eurodollar Loans pursuant to Section 2.06, and (ii) to the Issuing Bank with
respect to each Letter of Credit an administrative fee payable to the Issuing
Bank equal to the greater of (a) for the period from and after the date of
issuance thereof (or, with respect to Existing Letters of
28
Credit, for the period from and after the Closing Date), 1/4 of 1% per annum of
the maximum amount available from time to time to be drawn under such Letter of
Credit, in each case calculated in arrears on and through the last day of each
Fiscal Quarter and on the basis of a 360-day year and the actual number of days
elapsed and (b) $500, and payable on the Business Day immediately succeeding
such date of calculation in immediately available funds, and (iii) the standard
issuance, drawing and amendment fees specified from time to time by the Issuing
Bank (the "Issuing Bank Fees"). All L/C Participation Fees and Issuing Bank Fees
shall be computed on the basis of the actual number of days elapsed in a year of
360 days.
All Fees shall be paid on the dates due, in immediately available funds,
to the Administrative Agent for distribution, if and as appropriate, among the
Lenders, except that the Issuing Bank Fees shall be paid directly to the Issuing
Bank. Once paid, none of the Fees shall be refundable under any circumstances.
SECTION 2.06. Interest on Loans. (a) Subject to the provisions of Section
2.07, the Loans comprising each ABR Borrowing, including each Swingline Loan,
shall bear interest (computed on the basis of the actual number of days elapsed
over a year of 365 or 366 days, as the case may be, when the Alternate Base Rate
is determined by reference to the Prime Rate and over a year of 360 days at all
other times) at a rate per annum equal to the Alternate Base Rate plus (i) with
respect to Tranche B Term Loans, 1.75% or (ii) with respect to Tranche A Term
Loans and Revolving Loans, 1.50% less the applicable Pricing Adjustment.
(b) Subject to the provisions of Section 2.07, the Loans comprising each
Eurodollar Borrowing shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 360 days) at a rate per annum equal to the
Adjusted Eurodollar Rate for the Interest Period in effect for such Borrowing
plus (i) with respect to Tranche B Term Loans, 2.75% or (ii) with respect to
Tranche A Term Loans and Revolving Loans, 2.50% less the applicable Pricing
Adjustment.
(c) Interest shall accrue from and including the first day of an Interest
Period to but excluding the last day of such Interest Period. Interest on each
Loan shall be payable on the Interest Payment Dates applicable to such Loan
except as otherwise provided in this Agreement. The applicable Alternate Base
Rate or Adjusted Eurodollar Rate for each Interest Period or day within an
Interest Period, as the case may be, shall be determined by the Administrative
Agent, and such determination shall be conclusive absent manifest error.
SECTION 2.07. Default Interest. If the Borrower shall default in the
payment of the principal of or interest on any Loan or any other amount becoming
due hereunder, by acceleration or otherwise, or under any other Credit Document,
the Borrower shall on demand from time to time pay interest, to the extent
permitted by law, on such defaulted amount to but excluding the date of actual
payment (after as well as before judgment) (a) in the case of overdue principal,
at the rate otherwise applicable to such Loan pursuant to Section 2.06(a) plus
2.00% per annum and (b) in all other cases, at a rate per annum (computed on the
basis of the actual number of days elapsed over a year of 365 or 366 days, as
the case may be, when determined by reference to the Prime Rate and over a year
of 360 days at all other times) equal to the sum of the Alternate Base Rate plus
2.00%.
SECTION 2.08. Alternate Rate of Interest. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Borrowing any Lender shall have determined that
dollar deposits in the principal amounts of the Loans comprising such Borrowing
are not generally available to it in the Eurodollar interbank market, or that
the rates at which such dollar deposits are being offered will not adequately
and
29
fairly reflect the cost to such Lender of making or maintaining its Eurodollar
Loan during such Interest Period, or that the Administrative Agent shall have
determined that reasonable means do not exist for ascertaining the Adjusted
Eurodollar Rate as soon as practicable thereafter, the affected Lender shall
give written or telecopy notice thereof to the Administrative Agent, and/or the
Administrative Agent shall, give written or telecopy notice thereof to the
Borrower and the Lenders. In the event of any such determination, until the
affected Lender or the Administrative Agent, as the case may be, shall have
given notice that the circumstances giving rise to such notice no longer exist,
any request by the Borrower for a Eurodollar Borrowing pursuant to Section 2.03
or 2.10, from the affected Lender or the Lenders, as the case may be, shall be
deemed to be a request for an ABR Borrowing. Each determination by such Lender
or the Administrative Agent hereunder shall be conclusive absent manifest error.
SECTION 2.09. Termination and Reduction of Commitments. (a) The Term Loan
Commitments hereunder shall terminate on the earliest of (i) the date on which
the Borrower informs the Lenders that it has decided not to proceed with the
Recapitalization, (ii) the date on which the Recapitalization Agreement is
terminated in accordance with its terms or (iii) 5:00 p.m., New York City time,
on June 30, 1998, if the initial Credit Event is not made on or before such
date. The Revolving Credit Commitments, the Swingline Commitment and the L/C
Commitment shall automatically terminate on the earliest of (i) the Revolving
Credit Termination Date, (ii) the date on which the Borrower informs the Lenders
that it has decided not to proceed with the Recapitalization, (iii) the date on
which the Recapitalization Agreement is terminated in accordance with its terms
or (iv) 5:00 p.m., New York City time, on June 30, 1998, if the initial Credit
Event shall not have occurred by such time.
(b) Upon at least three Business Days' prior irrevocable written or
telecopy notice to the Administrative Agent, the Borrower may at any time in
whole permanently terminate, or from time to time in part permanently reduce,
the Term Loan Commitments or the Revolving Credit Commitments; provided,
however, that (i) each partial reduction of the Term Loan Commitments or the
Revolving Credit Commitments shall be in (1) an integral multiple of $1,000,000
and in a minimum amount of $1,000,000 or (2) in the full remaining amount of the
Term Loan Commitments or the Revolving Credit Commitments, as the case may be,
and (ii) the Total Revolving Credit Commitment shall not be reduced to an amount
that is less than the sum of the Aggregate Revolving Credit Exposure at the
time. In addition, if no Term Loans are outstanding, the Revolving Credit
Commitments shall automatically be reduced by the amount of any mandatory
prepayment that would otherwise have been applied to the prepayment of Term
Loans pursuant to Section 2.13(g).
(c) Each reduction in the Term Loan Commitments or the Revolving Credit
Commitments hereunder shall be made ratably among the Lenders in accordance with
their respective applicable Commitments. The Borrower shall pay to the
Administrative Agent for the account of the applicable Lenders, on the date of
each termination or reduction, the Commitment Fees on the amount of the
Commitments so terminated or reduced accrued to but excluding the date of such
termination or reduction.
SECTION 2.10. Conversion and Continuation of Borrowings. The Borrower shall
have the right at any time by delivery of a Continuation/Conversion Request (or
by telephonic notice promptly confirmed by delivery of a Continuation/Conversion
Request) to the Administrative Agent (a) not later than 11:00 a.m., New York
City time, one Business Day prior to conversion, to convert any Eurodollar
Borrowing into an ABR Borrowing, (b) not later than 11:00 a.m., New York City
time, three Business Days prior to conversion or continuation, to convert any
ABR Borrowing into a Eurodollar Borrowing or to continue any Eurodollar
Borrowing as a Eurodollar Borrowing for an additional Interest Period, and (c)
not later than 11:00 a.m., New
30
York City time, three Business Days prior to conversion, to convert the Interest
Period with respect to any Eurodollar Borrowing to another permissible Interest
Period, subject in each case to the following:
(i) each conversion or continuation shall be made pro rata among the
Lenders in accordance with the respective principal amounts of the Loans
comprising the converted or continued Borrowing;
(ii) if less than all the outstanding principal amount of any
Borrowing shall be converted or continued, then each resulting Borrowing
shall satisfy the limitations specified in Sections 2.02(a) and 2.02(b)
regarding the principal amount and maximum number of Borrowings of the
relevant Type;
(iii) each conversion shall be effected by each Lender and the
Administrative Agent by recording for the account of such Lender the new
Loan of such Lender resulting from such conversion and reducing the Loan
(or portion thereof) of such Lender being converted by an equivalent
principal amount; accrued interest on any Eurodollar Loan (or portion
thereof) being converted shall be paid by the Borrower at the time of
conversion;
(iv) if any Eurodollar Borrowing is converted at a time other than
the end of the Interest Period applicable thereto, the Borrower shall pay,
upon demand, any amounts due to the Lenders pursuant to Section 2.16;
(v) any portion of a Borrowing maturing or required to be repaid in
less than one month may not be converted into or continued as a Eurodollar
Borrowing;
(vi) any portion of a Eurodollar Borrowing that cannot be converted
into or continued as a Eurodollar Borrowing by reason of the immediately
preceding clause shall be automatically converted at the end of the
Interest Period in effect for such Borrowing into an ABR Borrowing;
(vii) no Interest Period may be selected for any Eurodollar Term
Borrowing that would end later than a Tranche A Repayment Date or Tranche B
Repayment Date, as applicable, occurring on or after the first day of such
Interest Period if, after giving effect to such selection, the aggregate
outstanding amount of (A) the Eurodollar Term Borrowings with Interest
Periods ending on or prior to such Term Loan Repayment Date and (B) the ABR
Term Borrowings would not be at least equal to the principal amount of Term
Borrowings to be paid on such Term Loan Repayment Date;
(viii) no Interest Period applicable to a Revolving Loan may end
later than the Revolving Credit Maturity Date, and no Interest Period
applicable to a Term Loan may end later than the Term Loan Maturity Date;
and
(ix) upon notice to the Borrower from the Administrative Agent given
at the request of the Required Lenders, after the occurrence and during the
continuance of a Default or Event of Default, no outstanding Loan may be
converted into, or continued as, a Eurodollar Loan.
Each notice pursuant to this Section shall be irrevocable and shall refer
to this Agreement and specify (A) the identity and amount of the Borrowing that
the Borrower requests be converted or continued, (B) whether such Borrowing is
to be converted to or continued as a Eurodollar Borrowing or an ABR Borrowing,
(C) if such notice requests a conversion, the date of
31
such conversion (which shall be a Business Day) and (D) if such Borrowing is to
be converted to or continued as a Eurodollar Borrowing, the Interest Period with
respect thereto. If no Interest Period is specified in any such notice with
respect to any conversion to or continuation as a Eurodollar Borrowing, the
Borrower shall be deemed to have selected an Interest Period of one month's
duration. The Administrative Agent shall advise the Lenders of any notice given
pursuant to this Section and of each Lender's portion of any converted or
continued Borrowing. If the Borrower shall not have given notice in accordance
with this Section to continue any Borrowing into a subsequent Interest Period
(and shall not otherwise have given notice in accordance with this Section to
convert such Borrowing), such Borrowing shall, at the end of the Interest Period
applicable thereto (unless repaid pursuant to the terms hereof), automatically
be continued into a new Interest Period as an ABR Borrowing.
SECTION 2.11. Repayment of Term Borrowings. (a) (i) The principal of the
Tranche A Term Loans shall be payable in quarterly installments on the following
dates (each such date being called a "Tranche A Repayment Date") in the
following amounts:
-----------------------------------------------------------------------
AMOUNT OF REPAYMENT
DATE -----------------------------------------------------------------------
1998 1999 2000 2001 2002 2003
---------------------------------------------------------------------------------------
March 31 1,000,000 1,000,000 1,750,000 3,000,000 3,500,000
---------------------------------------------------------------------------------------
June 30 1,000,000 1,000,000 1,750,000 3,000,000 3,500,000
---------------------------------------------------------------------------------------
September 30 1,000,000 1,750,000 3,000,000 3,500,000
---------------------------------------------------------------------------------------
December 31 1,000,000 1,000,000 1,750,000 3,000,000 3,500,000
---------------------------------------------------------------------------------------
(ii) The principal of the Tranche B Term Loans shall be payable in
quarterly installments on the following dates (each such date being called a
"Tranche B Repayment Date") in the following amounts:
-----------------------------------------------------------------------------
AMOUNT OF REPAYMENT
DATE -----------------------------------------------------------------------------
1998 1999 2000 2001 2002 2003 2004 2005
------------------------------------------------------------------------------------------
March 31 $150,0 $150,0 $150,00 $150, $150,0 $5,750, $8,500,0
00 00 0 000 00 000 00
------------------------------------------------------------------------------------------
June 30 $150,0 $150,0 $150,00 $150, $150,0 $5,750, $8,500,0
00 00 0 000 00 000 00
------------------------------------------------------------------------------------------
September $150,0 $150,0 $150,0 $150,00 $150, $5,750, $8,500,
30 00 00 00 0 000 000 000
------------------------------------------------------------------------------------------
December $150,0 $150,0 $150,0 $150,00 $150, $5,750, $8,500,
31 00 00 00 0 000 000 000
------------------------------------------------------------------------------------------
(b) Each payment of Term Borrowings pursuant to this Section shall be
accompanied by accrued interest on the principal amount paid to but excluding
the date of payment.
SECTION 2.12. Prepayment. (a) The Borrower shall have the right at any
time and
32
from time to time to prepay any Borrowing, in whole or in part, upon at least
three Business Days' prior written or telecopy notice (or telephone notice
promptly confirmed by written or telecopy notice) to the Administrative Agent
before 11:00 a.m., New York City time; provided, however, that each partial
prepayment shall be in an amount that is an integral multiple of $1,000,000 and
not less than $1,000,000.
(b) Optional prepayments of Term Loans shall be allocated pro rata between
the then-outstanding Tranche A Term Loans and Tranche B Term Loans and applied
(i) first, to scheduled amortization payments due within 12 calendar months
thereafter, and (ii) second, pro rata against the remaining scheduled
installments of principal due in respect of the Tranche A Term Loans and Tranche
B Term Loans.
(c) Each notice of prepayment shall specify the prepayment date and the
principal amount of each Borrowing (or portion thereof) to be prepaid, shall be
irrevocable and shall commit the Borrower to prepay such Borrowing by the amount
stated therein on the date stated therein. All prepayments under this Section
shall be subject to Section 2.16 but otherwise without premium or penalty. All
prepayments under this Section shall be accompanied by accrued interest on the
principal amount being prepaid to the date of payment.
SECTION 2.13. Mandatory Prepayments. (a) In the event of any termination
of all the Revolving Credit Commitments, the Borrower shall repay or prepay all
its outstanding Revolving Credit Borrowings and all outstanding Swingline Loans
on the date of such termination. In the event of any partial reduction of the
Revolving Credit Commitments, then (i) at or prior to the effective date of such
reduction, the Administrative Agent shall notify the Borrower and the Revolving
Credit Lenders of the Aggregate Revolving Credit Exposure after giving effect
thereto and (ii) if the Aggregate Revolving Credit Exposure would exceed the
Total Revolving Credit Commitment after giving effect to such reduction or
termination, then the Borrower shall, on the date of such reduction or
termination, repay or prepay Revolving Credit Borrowings or Swingline Loans (or
a combination thereof) in an amount sufficient to eliminate such excess.
(b) (i) With respect to any Restricted Sale/Leaseback Transaction, not
later than the third Business Day following the completion of such Restricted
Sale/Leaseback Transaction, and (ii) with respect to any Restricted Asset
Disposition upon the first to occur of the following: (A) not later than the
third Business Day following the completion of any Restricted Asset Disposition
if the Borrower does not intend to reinvest the Net Cash Proceeds thereof, as
set forth in the definition of Net Cash Proceeds, (B) promptly after the date on
which the Borrower determines not to reinvest the Net Cash Proceeds thereof as
set forth in the definition of Net Cash Proceeds, and (C) the first anniversary
of the date thereof, the Borrower shall apply 100% of the Net Cash Proceeds, if
any, received with respect thereto to prepay outstanding Term Loans and/or
reduce the Revolving Credit Commitment in accordance with Section 2.13(g).
(c) In the event and on each occasion that
(i) an Equity Issuance occurs as part of an initial public
offering of the Capital Stock of the Borrower, the Borrower shall,
substantially simultaneously with (and in any event not later than the
third Business Day next following) the occurrence of such Equity
Issuance, apply Net Cash Proceeds therefrom in an amount equal to 50%
of the net cash proceeds of the Capital Stock sold in such initial
public offering (whether or not all such Capital Stock is offered by
the Borrower) to prepay outstanding Term Loans and/or reduce the
Revolving Credit Commitment in accordance with Section 2.13(g);
provided, however, that the remaining portion of such Net Cash
Proceeds shall be applied either (A) pursuant
33
to Section 6.05(a)(iii) for the redemption of Exchangeable Preferred
Stock (including accreted PIK liquidation preference) or (B) to prepay
outstanding Term Loans and/or reduce the Revolving Credit Commitment
in accordance with Section 2.13(g); and
(ii) an Equity Issuance occurs other than as part of an initial
public offering of the Capital Stock of the Borrower, the Borrower
shall, substantially simultaneously with (and in any event not later
than the third Business Day next following) the occurrence of such
Equity Issuance, apply 100% of the Net Cash Proceeds therefrom to
prepay outstanding Term Loans and/or reduce the Revolving Credit
Commitment in accordance with Section 2.13(g), except to the extent
such proceeds are applied toward the consideration of a Permitted
Acquisition.
(d) Beginning with the fiscal year ending nearest to December 31, 1999, no
later than the earlier of (i) 90 days after the end of each fiscal year of the
Borrower, and (ii) the date on which the financial statements with respect to
such period are delivered pursuant to Section 5.04(a), the Borrower shall prepay
outstanding Term Loans in accordance with Section 2.13(g) in an aggregate
principal amount equal to 75% (or 50%, for fiscal years for which the
Debt/Adjusted EBITDA Ratio for such fiscal year is less than 3.50:1.00) of
Excess Cash Flow for the fiscal year then ended.
(e) In the event that any Credit Party or any subsidiary of a Credit Party
shall receive Net Cash Proceeds from the Incurrence of Debt of the Borrower or
any of its Subsidiaries (other than any proceeds of Debt permitted pursuant to
Section 6.01), the Borrower shall, substantially simultaneously with (and in any
event not later than the third Business Day next following) the receipt of such
Net Cash Proceeds by the Borrower or such Subsidiary, apply an amount equal to
100% of such Net Cash Proceeds to prepay outstanding Term Loans and/or reduce
the Revolving Credit Commitment in accordance with Section 2.13(g).
(f) In the event that there shall occur any Casualty or Condemnation and,
pursuant to Section 5.12, the Casualty Proceeds or Condemnation Proceeds, as the
case may be, are required to be used to prepay the Term Loans, then the Borrower
shall apply an amount equal to 100% of such Casualty Proceeds or Condemnation
Proceeds, as the case may be, to prepay outstanding Term Loans and/or reduce the
Revolving Credit Commitment in accordance with Section 2.13(g).
(g) Mandatory prepayments of outstanding obligations under this Agreement
pursuant to paragraphs (b) through (f) above shall, be allocated pro rata
between the then-outstanding Tranche A Term Loans and Tranche B Term Loans, and,
subject to paragraph (j) below, applied pro rata against the remaining scheduled
installments of principal due in respect of Tranche A Term Loans and Tranche B
Term Loans.
(h) The Borrower shall deliver to the Administrative Agent, at the time of
each prepayment required under this Section, (i) a certificate signed by a
Responsible Officer of the Borrower setting forth in reasonable detail the
calculation of the amount of such prepayment and (ii) to the extent practicable,
at least three days prior written notice of such prepayment. Each notice of
prepayment shall specify the prepayment date, the Type of each Loan being
prepaid and the principal amount of each Loan (or portion thereof) to be
prepaid. All prepayments of Borrowings under this Section shall be subject to
Section 2.16, but shall otherwise be without premium or penalty.
(i) Subject to paragraph (g), amounts to be applied pursuant to this
Section to the
34
prepayment of Term Loans and Revolving Loans shall be applied, as applicable,
first to reduce outstanding ABR Term Loans and ABR Revolving Loans. Any amounts
remaining after each such application shall, at the option of the Borrower, be
applied to prepay Eurodollar Term Loans or Eurodollar Revolving Loans, as the
case may be, immediately and/or shall be deposited in the Prepayment Account (as
defined below). The Administrative Agent shall apply any cash deposited in the
Prepayment Account (i) allocable to Term Loans to prepay Eurodollar Term Loans
and (ii) allocable to Revolving Loans to prepay Eurodollar Revolving Loans, in
each case on the last day of their respective Interest Periods (or, at the
direction of the Borrower, on any earlier date) until all outstanding Term Loans
or Revolving Loans, as the case may be, have been prepaid or until all the
allocable cash on deposit with respect to such Loans has been exhausted. For
purposes of this Agreement, the term "Prepayment Account" means an account
established by the Borrower with the Administrative Agent and over which the
Administrative Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal for application in accordance with this clause.
The Administrative Agent will, at the request of the Borrower, invest amounts on
deposit in the Prepayment Account in Permitted Investments that mature prior to
the last day of the applicable Interest Periods of the Eurodollar Term
Borrowings or Eurodollar Revolving Borrowings to be prepaid, as the case may be;
provided, however, that (i) the Administrative Agent shall not be required to
make any investment that, in its sole judgment, would require or cause the
Administrative Agent to be in, or would result in any, violation of any law,
statute, rule or regulation and (ii) the Administrative Agent shall have no
obligation to invest amounts on deposit in the Prepayment Account if a Default
or Event of Default shall have occurred and be continuing. The Borrower shall
indemnify the Administrative Agent for any losses relating to the investments so
that the amount available to prepay Eurodollar Borrowings on the last day of the
applicable Interest Period is not less than the amount that would have been
available had no investments been made pursuant thereto. Other than any interest
earned on such investments, the Prepayment Account shall not bear interest.
Interest or profits, if any, on such investments shall be deposited in the
Prepayment Account and reinvested and disbursed as specified above. If the
maturity of the Loans has been accelerated pursuant to Article VII, the
Administrative Agent may, in its sole discretion, apply all amounts on deposit
in the Prepayment Account to satisfy any of the Obligations. The Borrower hereby
grants to the Administrative Agent, for its benefit and the benefit of the
Issuing Bank, the Swingline Lender and the Lenders, a security interest in the
Prepayment Account to secure the Obligations.
(j) Notwithstanding any other provisions of this Agreement, any Tranche B
Lender may elect, by giving written or telecopy notice to the Administrative
Agent (or telephonic notice promptly confirmed by written or telecopy notice) at
least one Business Day prior to any prepayment of Tranche B Term Loans required
to be made by the Borrower for the account of such Lender pursuant to paragraphs
(b) through (f) above, to refuse to accept all or the portion of such prepayment
specified in such notice, in which case the Administrative Agent shall apply
such amount instead to prepay Tranche A Term Loans pursuant to paragraph (g)
above, provided that no Tranche B Lender shall be entitled to make such election
if at the time thereof no Tranche A Loans are outstanding.
SECTION 2.14. Reserve Requirements; Change in Circumstances. (a)
Notwithstanding any other provision of this Agreement, if after the date of this
Agreement any change in applicable law or regulation or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof (whether or not having the force of
law) shall change the basis of taxation of payments to any Lender or the Issuing
Bank of the principal of or interest on any Eurodollar Loan made by such Lender
or any Fees or other amounts payable hereunder (other than changes in respect of
taxes based on the overall net income of such Lender or the Issuing Bank by the
jurisdiction in which such Lender or the Issuing Bank has its principal office
or by any political subdivision or taxing authority therein), or shall impose,
modify or deem
35
applicable any reserve, special deposit or similar requirement against assets
of, deposits with or for the account of or credit extended by any Lender or the
Issuing Bank (except any such reserve requirement which is reflected in the
Adjusted Eurodollar Rate) or shall impose on such Lender or the Issuing Bank or
the London interbank market any other condition affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit or participation
therein, and the result of any of the foregoing shall be to increase the cost to
such Lender or the Issuing Bank of making or maintaining any Eurodollar Loan or
increase the cost to any Lender of issuing or maintaining any Letter of Credit
or purchasing or maintaining a participation therein or to reduce the amount of
any sum received or receivable by such Lender or the Issuing Bank hereunder or
under the Notes (whether of principal, interest or otherwise) by an amount
deemed by such Lender or the Issuing Bank to be material, then the Borrower will
pay to such Lender or the Issuing Bank, as the case may be, upon demand such
additional amount or amounts as will compensate such Lender or the Issuing Bank,
as the case may be, for such additional costs incurred or reduction suffered.
(b) If any Lender or the Issuing Bank shall have determined that the
adoption after the date hereof of any law, rule, regulation, agreement or
guideline regarding capital adequacy, or any change after the date hereof in any
such law, rule, regulation, agreement or guideline (whether such law, rule,
regulation, agreement or guideline has been adopted) or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof, or compliance by any Lender (or any
lending office of such Lender) or the Issuing Bank or any Lender's or the
Issuing Bank's holding company with any request or directive regarding capital
adequacy (whether or not having the force of law) of any Governmental Authority
has or would have the effect of reducing the rate of return on such Lender's or
the Issuing Bank's capital or on the capital of such Lender's or the Issuing
Bank's holding company, if any, as a consequence of this Agreement or the Loans
made or participations in Letters of Credit purchased by such Lender pursuant
hereto or the Letters of Credit issued by the Issuing Bank pursuant hereto to a
level below that which such Lender or the Issuing Bank or such Lender's or the
Issuing Bank's holding company could have achieved but for such applicability,
adoption, change or compliance (taking into consideration such Lender's or the
Issuing Bank's policies and the policies of such Lender's or the Issuing Bank's
holding company with respect to capital adequacy) by an amount deemed by such
Lender or the Issuing Bank to be material, then from time to time the Borrower
shall pay to such Lender or the Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing Bank
or such Lender's or the Issuing Bank's holding company for any such reduction
suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth the amount
or amounts necessary to compensate such Lender or the Issuing Bank or its
holding company, as applicable, as specified in clause (a) or (b), and showing
the method of calculation in reasonable detail, shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender or the Issuing Bank the amount shown as due on any such certificate
delivered by it within 10 days after its receipt of the same.
(d) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation for any increased costs or reduction in amounts received or
receivable or reduction in return on capital shall not constitute a waiver of
such Lender's or the Issuing Bank's right to demand such compensation. The
protection of this Section shall be available to each Lender and the Issuing
Bank regardless of any possible contention of the invalidity or inapplicability
of the law, rule, regulation, agreement, guideline or other change or condition
that shall have occurred or been imposed. If such Lender receives a refund of
any such amount, such Lender will promptly pay such amount over to the Borrower.
36
SECTION 2.15. Change in Legality. (a) Notwithstanding any other provision
of this Agreement, if, after the date hereof, any change in any law or
regulation or in the interpretation thereof by any Governmental Authority
charged with the administration or interpretation thereof shall make it unlawful
for any Lender to make or maintain any Eurodollar Loan or to give effect to its
obligations as contemplated hereby with respect to any Eurodollar Loan, then, by
written notice to the Borrower and to the Administrative Agent:
(i) such Lender may declare that Eurodollar Loans will not thereafter
(for the duration of such unlawfulness) be made by such Lender hereunder
(or be continued for additional Interest Periods and ABR Loans will not
thereafter (for such duration) be converted into Eurodollar Loans),
whereupon any request for a Eurodollar Borrowing (or to convert an ABR
Borrowing to a Eurodollar Borrowing or to continue a Eurodollar Borrowing
for an additional Interest Period) shall, as to such Lender only, be deemed
a request for an ABR Loan (or a request to continue an ABR Loan as such for
an additional Interest Period or to convert a Eurodollar Loan into an ABR
Loan, as the case may be), unless such declaration shall be subsequently
withdrawn; and
(ii) such Lender may require that all outstanding Eurodollar Loans
made by it be converted to ABR Loans, in which event all such Eurodollar
Loans shall be automatically converted to ABR Loans as of the effective
date of such notice as provided in clause (b).
In the event any Lender shall exercise its rights under clause (i) or (ii), all
payments and prepayments of principal that would otherwise have been applied to
repay the Eurodollar Loans that would have been made by such Lender or the
converted Eurodollar Loans of such Lender shall instead be applied to repay the
ABR Loans made by such Lender in lieu of, or resulting from the conversion of,
such Eurodollar Loans.
(b) For purposes of this Section, a notice to the Borrower by any Lender
shall be effective as to each Eurodollar Loan made by such Lender, if lawful, on
the last day of the Interest Period currently applicable to such Eurodollar
Loan; in all other cases such notice shall be effective on the date of receipt
by the Borrower.
SECTION 2.16. Indemnity. The Borrower shall indemnify each Lender against
any loss or expense that such Lender may sustain or incur as a consequence of
(a) any event, other than a default by such Lender in the performance of its
obligations hereunder, which results in (i) such Lender receiving or being
deemed to receive any amount on account of the principal of any Eurodollar Loan
prior to the end of the Interest Period in effect therefor, (ii) the conversion
of any Eurodollar Loan to an ABR Loan, or the conversion of the Interest Period
with respect to any Eurodollar Loan, in each case other than on the last day of
the Interest Period in effect therefor, or (iii) any Eurodollar Loan to be made
by such Lender (including any Eurodollar Loan to be made pursuant to a
conversion or continuation under Section 2.10) not being made after notice of
such Loan shall have been given by the Borrower hereunder (any of the events
referred to in this clause being called a "Breakage Event") or (b) any default
in the making of any payment or prepayment required to be made hereunder. In
the case of any Breakage Event, such loss shall include an amount equal to the
excess, as reasonably determined by such Lender, of (i) its cost of obtaining
funds for the Eurodollar Loan that is the subject of such Breakage Event for the
period from the date of such Breakage Event to the last day of the Interest
Period in effect (or that would have been in effect) for such Loan over (ii) the
amount of interest likely to be realized by such Lender in redeploying the funds
released or not utilized by reason of such Breakage Event for such period. A
certificate of any Lender setting forth any amount or amounts which such Lender
is entitled to receive pursuant to this Section with calculations in reasonable
detail shall be delivered to the Borrower and shall be conclusive absent
manifest error.
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SECTION 2.17. Pro Rata Treatment. Except as provided below in this Section
with respect to Swingline Loans and as required under Sections 2.13(j) and
2.15, each Borrowing, each payment or prepayment of principal of any Borrowing,
each payment of interest on the Loans, each payment of the Commitment Fees, each
reduction of the Term Loan Commitments or the Revolving Credit Commitments and
each conversion of any Borrowing to or continuation of any Borrowing as a
Borrowing of any Type shall be allocated pro rata among the Lenders in
accordance with their respective applicable Commitments (or, if such Commitments
shall have expired or been terminated, in accordance with the respective
principal amounts of their outstanding Loans and participations in unreimbursed
drawings under Letters of Credit). For purposes of determining the available
Revolving Credit Commitments of the Lenders at any time, each outstanding
Swingline Loan shall be deemed to have utilized the Revolving Credit Commitments
of the Lenders (including those Lenders which shall not have made Swingline
Loans) pro rata in accordance with such respective Revolving Credit Commitments.
Each Lender agrees that in computing such Lender's portion of any Borrowing to
be made hereunder, the Administrative Agent may, in its discretion, round each
Lender's percentage of such Borrowing to the next higher or lower whole dollar
amount.
SECTION 2.18. Sharing of Setoffs. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, setoff or counterclaim against
the Borrower or any other Credit Party, or pursuant to a secured claim under
Section 506 of Title 11 of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Lender under
any applicable bankruptcy, insolvency or other similar law or otherwise, or by
any other means, obtain payment (voluntary or involuntary) in respect of any
Loan or Loans or L/C Disbursement as a result of which the unpaid principal
portion of its Tranche A Term Loans, Tranche B Term Loans, Revolving Loans and
participations in L/C Disbursements shall be proportionately less than the
unpaid principal portion of the Tranche A Term Loans, Tranche B Term Loans,
Revolving Loans and participations in L/C Disbursements of any other Lender, it
shall be deemed simultaneously to have purchased from such other Lender at face
value, and shall promptly pay to such other Lender the purchase price for, a
participation in the Tranche A Term Loans, Tranche B Term Loans, Revolving Loans
and L/C Exposure, as the case may be of such other Lender, so that the aggregate
unpaid principal amount of the Tranche A Term Loans, Tranche B Term Loans,
Revolving Loans and L/C Exposure and participations in Tranche A Term Loans,
Tranche B Term Loans, Revolving Loans and L/C Exposure held by each Lender shall
be in the same proportion to the aggregate unpaid principal amount of all
Tranche A Term Loans, Tranche B Term Loans, Revolving Loans and L/C Exposure
then outstanding as the principal amount of its Tranche A Term Loans, Tranche B
Term Loans, Revolving Loans and L/C Exposure prior to such exercise of banker's
lien, setoff or counterclaim or other event was to the principal amount of all
Tranche A Term Loans, Tranche B Term Loans, Revolving Loans and L/C Exposure
outstanding prior to such exercise of banker's lien, setoff or counterclaim or
other event; provided, however, that if any such purchase or purchases or
adjustments shall be made pursuant to this Section and the payment giving rise
thereto shall thereafter be recovered, such purchase or purchases or adjustments
shall be rescinded to the extent of such recovery and the purchase price or
prices or adjustment restored without interest. The Borrower consents to the
foregoing arrangements and agrees that any Lender holding a participation in a
Tranche A Term Loan, Tranche B Term Loan, Revolving Loan or L/C Disbursement
deemed to have been so purchased may exercise any and all rights of banker's
lien, setoff or counterclaim with respect to any and all moneys owing by the
Borrower to such Lender by reason thereof as fully as if such Lender had made a
Loan directly to the Borrower in the amount of such participation.
SECTION 2.19. Payments. (a) The Borrower shall make each payment
(including principal of or interest on any Borrowing or any L/C Disbursement or
any Fees or other amounts) hereunder and under any other Credit Document not
later than 12:00 (noon), New York City
38
time, on the date when due in immediately available dollars, without setoff,
defense or counterclaim. Each such payment (other than (i) Issuing Bank Fees,
which shall be paid directly to the Issuing Bank, and (ii) principal of and
interest on Swingline Loans, which shall be paid directly to the Swingline
Lender except as otherwise provided in Section 2.21(e)) shall be made to the
Administrative Agent at its offices at identified in Annex 2.
(b) Whenever any payment (including principal of or interest on any
Borrowing or any Fees or other amounts) hereunder or under any other Credit
Document shall become due, or otherwise would occur, on a day that is not a
Business Day, such payment may be made on the next succeeding Business Day, and
such extension of time shall in such case be included in the computation of
interest or Fees, if applicable.
SECTION 2.20. Taxes. (a) Any and all payments by or on behalf of the
Borrower or any Credit Party hereunder and under any other Credit Document shall
be made, in accordance with Section 2.19, free and clear of and without
deduction for any and all current or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding (i)
taxes imposed on the net income of the Administrative Agent, any Lender or the
Issuing Bank (or any transferee or assignee thereof, including a participation
holder (any such entity a "Transferee")) and (ii) franchise taxes imposed on the
net income of the Administrative Agent, any Lender or the Issuing Bank (or
Transferee), in each case by the jurisdiction under the laws of which the
Administrative Agent, such Lender or the Issuing Bank (or Transferee) is
organized (or where its lending office is located) or any political subdivision
thereof (all such nonexcluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities, collectively or individually, being called
"Taxes"). If the Borrower or any Credit Party shall be required to deduct any
Taxes from or in respect of any sum payable hereunder or under any other Credit
Document to the Administrative Agent, any Lender or the Issuing Bank (or any
Transferee), (i) the sum payable shall be increased by the amount (an
"additional amount") necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
the Administrative Agent, such Lender or the Issuing Bank (or Transferee), as
the case may be, shall receive an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrower or such Credit Party shall
make such deductions and (iii) the Borrower or such Credit Party shall pay the
full amount deducted to the relevant Governmental Authority in accordance with
applicable law.
(b) In addition, the Borrower agrees to pay to the relevant Governmental
Authority in accordance with applicable law any current or future stamp,
documentary, excise, transfer, sales, property taxes, charges or similar levies
(including mortgage recording taxes and similar fees) that arise from any
payment made hereunder or under any other Credit Document or from the execution,
delivery, enforcement or registration of, or otherwise with respect to, this
Agreement or any other Credit Document ("Other Taxes").
(c) The Borrower will indemnify the Administrative Agent, each Lender and
the Issuing Bank (or Transferee) for the full amount of Taxes and Other Taxes
paid by the Administrative Agent, such Lender or the Issuing Bank (or
Transferee), as the case may be, and any liability (including penalties,
interest, expenses, and reasonable attorney's fees and disbursements (including
the allocated costs of in-house legal counsel)) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted by the relevant Governmental Authority. A certificate as to
the amount of such payment or liability prepared by the Administrative Agent, a
Lender or the Issuing Bank (or Transferee), or the Administrative Agent on its
behalf showing calculations in reasonable detail, absent manifest error, shall
be final, conclusive and binding for all purposes. Such indemnification shall
be made within 30 days after the date the Administrative Agent, any Lender or
the Issuing Bank (or Transferee), as the case
39
may be, makes written demand therefor.
(d) As soon as practicable after the date of any payment of Taxes or Other
Taxes by the Borrower or any other Credit Party to the relevant Governmental
Authority, the Borrower or such other Credit Party will deliver to the
Administrative Agent, at its address referred to in Section 9.01, the original
or a certified copy of a receipt issued by such Governmental Authority
evidencing payment thereof.
(e) Each Lender (or Transferee) that is organized under the laws of a
jurisdiction other than the United States, any State thereof or the District of
Columbia (a "Non-U.S. Lender") shall deliver to the Borrower and the
Administrative Agent two copies of either United States Internal Revenue Service
Form 1001 or Form 4224, or, in the case of a Non-U.S. Lender claiming exemption
from U.S. Federal withholding tax under Section 871(h) or 881(c) of the Code
with respect to payments of "portfolio interest", a Form W-8, or any subsequent
versions thereof or successors thereto (and, if such Non-U.S. Lender delivers a
Form W-8, a certificate representing that such Non-U.S. Lender is not a bank for
purposes of Section 881(c) of the Code, is not a 10-percent shareholder (within
the meaning of Section 871(h)(3)(B) of the Code) of the Borrower and is not a
controlled foreign corporation related to the Borrower (within the meaning of
Section 864(d)(4) of the Code)), properly completed and duly executed by such
Non-U.S. Lender claiming complete exemption from, or reduced rate of, U.S.
Federal withholding tax on payments by the Borrower under this Agreement and the
other Credit Documents. Such forms shall be delivered by each Non-U.S. Lender
on or before the date it becomes a party to this Agreement (or, in the case of a
Transferee that is a participation holder, on or before the date such
participation holder becomes a Transferee hereunder) and on or before the date,
if any, such Non-U.S. Lender changes its applicable lending office by
designating a different lending office (a "New Lending Office"). In addition,
each Non-U.S. Lender shall deliver such forms promptly upon the obsolescence or
invalidity of any form previously delivered by such Non-U.S. Lender.
Notwithstanding any other provision of this Section 2.20(e), a Non-U.S. Lender
shall not be required to deliver any form pursuant to this Section 2.20(e) that
such Non-U.S. Lender is not legally able to deliver.
(f) The Borrower shall not be required to indemnify any Non-U.S. Lender or
to pay any additional amounts to any Non-U.S. Lender, in respect of United
States Federal withholding tax pursuant to clause (a) or (c) to the extent that
(i) the obligation to withhold amounts with respect to United States Federal
withholding tax existed and would apply to payments made to such Non-U.S. Lender
on the date such Non-U.S. Lender became a party to this Agreement (or, in the
case of a Transferee that is a participation holder, on the date such
participation holder became a Transferee hereunder) or, with respect to payments
to a New Lending Office, the date such Non-U.S. Lender designated such New
Lending Office with respect to a Loan; provided, however, that this clause shall
not apply (x) to any Transferee or New Lending Office that becomes a Transferee
or New Lending Office as a result of an assignment, participation, transfer or
designation made at the request of the Borrower and (y) to the extent the
indemnity payment or additional amounts any Transferee, or any Lender (or
Transferee), acting through a New Lending Office, would be entitled to receive
(without regard to this clause) do not exceed the indemnity payment or
additional amounts that the person making the assignment, participation or
transfer to such Transferee, or Lender (or Transferee) making the designation of
such New Lending Office, would have been entitled to receive in the absence of
such assignment, participation, transfer or designation or (ii) the obligation
to pay such additional amounts would not have arisen but for a failure by such
Non-U.S. Lender to comply with the provisions of clause (e).
(g) Nothing contained in this Section shall require any Lender or the
Issuing Bank (or any Transferee) or the Administrative Agent to make available
any of its tax returns (or any other
40
information that it deems to be confidential or proprietary). If any Lender
receives a refund of any additional amount or any taxes paid by or on behalf of
such Lender, such Lender will promptly pay such amount over to the Borrower.
SECTION 2.21. Assignment of Commitments Under Certain Circumstances; Duty
to Mitigate. (a) In the event (i) any Lender or the Issuing Bank delivers a
certificate requesting compensation pursuant to Section 2.14, (ii) any Lender or
the Issuing Bank delivers a notice described in Section 2.15 or (iii) the
Borrower is required to pay any additional amount to any Lender or the Issuing
Bank or any Governmental Authority on account of any Lender or the Issuing Bank
pursuant to Section 2.20, the Borrower may, at its sole expense and effort
(including with respect to the processing and recordation fee referred to in
Section 9.04(b)), upon notice to such Lender or the Issuing Bank and the
Administrative Agent, require such Lender or the Issuing Bank to transfer and
assign, without recourse (in accordance with and subject to the restrictions
contained in Section 9.04), all of its interests, rights and obligations under
this Agreement to an assignee identified by the Borrower that shall assume such
assigned obligations (which assignee may be another Lender, if a Lender accepts
such assignment); provided that (x) such assignment shall not conflict with any
law, rule or regulation or order of any court or other Governmental Authority
having jurisdiction, (y) the Borrower shall have received the prior written
consent of the Administrative Agent (and, if a Revolving Credit Commitment is
being assigned, of the Issuing Bank and the Swingline Lender), which consent
shall not unreasonably be withheld, and (z) the Borrower or such assignee shall
have paid to the affected Lender or the Issuing Bank in immediately available
funds an amount equal to the sum of the principal of and interest accrued to the
date of such payment on the outstanding Loans or L/C Disbursements of such
Lender or the Issuing Bank, respectively, plus all Fees and other amounts
accrued for the account of such Lender or the Issuing Bank hereunder (including
any amounts under Section 2.14 and Section 2.16); provided further that, if
prior to any such transfer and assignment the circumstances or event that
resulted in such Lender's or the Issuing Bank's claim for compensation under
Section 2.14 or notice under Section 2.15 or the amounts paid pursuant to
Section 2.20, as the case may be, cease to cause such Lender or the Issuing Bank
to suffer increased costs or reductions in amounts received or receivable or
reduction in return on capital, or cease to have the consequences specified in
Section 2.15, or cease to result in amounts being payable under Section 2.20, as
the case may be (including as a result of any action taken by such Lender or the
Issuing Bank pursuant to clause (b)), or if such Lender or the Issuing Bank
shall waive its right to claim further compensation under Section 2.14 in
respect of such circumstances or event or shall withdraw its notice under
Section 2.15 or shall waive its right to further payments under Section 2.20 in
respect of such circumstances or event, as the case may be, then such Lender or
the Issuing Bank shall not thereafter be required to make any such transfer and
assignment hereunder.
(b) If (i) any Lender or the Issuing Bank shall request compensation under
Section 2.14, (ii) any Lender or the Issuing Bank delivers a notice described in
Section 2.15 or (iii) the Borrower is required to pay any additional amount to
any Lender or the Issuing Bank or any Governmental Authority on account of any
Lender or the Issuing Bank, pursuant to Section 2.20, then such Lender or the
Issuing Bank shall use reasonable efforts (which shall not require such Lender
or the Issuing Bank to incur an unreimbursed loss or unreimbursed cost or
expense or otherwise take any action inconsistent with its internal policies or
legal or regulatory restrictions or suffer any disadvantage or burden deemed by
it to be significant) (x) to file any certificate or document reasonably
requested in writing by the Borrower or (y) to assign its rights and delegate
and transfer its obligations hereunder to another of its offices, branches or
affiliates, if such filing or assignment would materially reduce its claims for
compensation under Section 2.14 or enable it to withdraw its notice pursuant to
Section 2.15 or would materially reduce amounts payable pursuant to Section
2.20, as the case may be, in the future. The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender or the Issuing Bank in
connection with
41
any such filing or assignment, delegation and transfer.
SECTION 2.22. Swingline Loans. (a) Swingline Commitment. Subject to the
terms and conditions and relying upon the representations and warranties herein
set forth, the Swingline Lender agrees to make loans to the Borrower at any time
and from time to time on and after the Closing Date and until the earlier of the
Revolving Credit Maturity Date and the termination of the Revolving Credit
Commitments in accordance with the terms hereof, in an aggregate principal
amount at any time outstanding that will not result in (i) the aggregate
principal amount of all Swingline Loans exceeding $5,000,000 in the aggregate or
(ii) the Aggregate Revolving Credit Exposure, after giving effect to any
Swingline Loan, exceeding the Total Revolving Credit Commitment. Each Swingline
Loan shall be in a principal amount that is an integral multiple of $100,000.
The Swingline Commitment may be terminated or reduced from time to time as
provided herein. Within the foregoing limits, the Borrower may borrow, pay or
prepay and reborrow Swingline Loans hereunder, subject to the terms, conditions
and limitations set forth herein.
(b) Swingline Loans. The Borrower shall notify the Administrative Agent
by telecopy or by telephone, not later than 1:00 p.m., New York City time, on
the day of a proposed Swingline Loan. Such notice shall be delivered on a
Business Day, shall be irrevocable and shall refer to this Agreement. Promptly
after such notification, the Borrower shall hand deliver or telecopy to the
Administrative Agent a duly completed Borrowing Request confirming such
notification. Each such Borrowing Request shall be signed by or on behalf of
the Borrower and shall specify: (i) that the Borrower is requesting a Swingline
Loan, (ii) the requested date of such Swingline Loan (which shall be a Business
Day), (iii) the number and location of the account to which funds are to be
disbursed (which shall be an account that complies with the requirements of
Section 2.02(c)), and (iv) the amount of such Swingline Loan. The
Administrative Agent will promptly advise the Swingline Lender of any notice
received from the Borrower pursuant to this clause. The Swingline Lender shall
make each Swingline Loan available to the Borrower by means of a credit to the
account specified in the Borrowing Request by 4:00 p.m., New York City time, on
the date such Swingline Loan is so requested.
(c) Prepayment. The Borrower shall have the right at any time and from
time to time to prepay any Swingline Loan, in whole or in part, upon giving
written or telecopy notice (or telephone notice promptly confirmed by written,
or telecopy notice) to the Swingline Lender and to the Administrative Agent
before 12:00 (noon), New York City time on the date of prepayment at the
Swingline Lender's address for notices specified on Annex 2.
(d) Interest. Each Swingline Loan shall be an ABR Loan and, subject to
the provisions of Section 2.07, shall bear interest as provided in Section
2.06(a).
(e) Conversion to Revolving Loans. With respect to any Swingline Loans,
the Swingline Lender shall no later than 10 Business Days after such Swingline
Loan is made available to the Borrower, deliver to the Administrative Agent
(with a copy to the Borrower) no later than 11:00 a.m. (New York City time) on
the first Business Day in advance of the proposed Funding Date, a notice (which
shall be deemed to be a Borrowing Request given by the Borrower) requesting the
Lenders to make Revolving Loans that are ABR Loans on such Funding Date in an
amount equal to the amount of such Swingline Loans outstanding on the date such
notice is given which Swingline Lender requests the Lenders to prepay; provided,
however, that the obligations of the Lenders to fund such Borrowing shall not be
subject to Section 4.01.
(f) Participations. Upon the Borrowing of a Swingline Loan, each
Revolving Credit Lender shall be deemed to have automatically acquired a
unfunded participation in such Swingline
42
Loan proportional to its Applicable Percentage. Upon demand by the Swingline
Lender, or automatically upon the occurrence of an Event of Default under
Section 7.01(g) or (h), each Revolving Credit Lender shall fund such
participation by paying to the Administrative Agent, for the account of the
Swingline Lender, such Revolving Credit Lender's Applicable Percentage of such
Swingline Loan, together with interest accruing on such participation amount
from the date of such Event of Default or such demand, as the case may be, at
the Federal Funds Effective Rate for the first day, and for each day thereafter,
the rate of interest then applicable to ABR Revolving Loans. Each Lender
acknowledges and agrees that its obligation to acquire participations in
Swingline Loans pursuant to this clause is absolute and unconditional and shall
not be affected by any circumstance whatsoever, including the occurrence and
continuance of a Default or an Event of Default, and that each such payment
shall be made without any offset, abatement, withholding or reduction
whatsoever. Each Lender shall comply with its obligation under this clause by
wire transfer of immediately available funds, in the same manner as provided in
Section 2.02(c) with respect to Loans made by such Lender and the Administrative
Agent shall promptly pay to the Swingline Lender the amounts so received by it
from the Lenders. The Administrative Agent shall notify the Borrower of any
participations in any Swingline Loan acquired pursuant to this clause and
thereafter payments in respect of such Swingline Loan shall be made to the
Administrative Agent and not to the Swingline Lender. Any amounts received by
the Swingline Lender from the Borrower (or other party on behalf of the
Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender
of the proceeds of a sale of participations therein shall be promptly remitted
to the Administrative Agent; any such amounts received by the Administrative
Agent shall be promptly remitted by the Administrative Agent to the Lenders that
shall have made their payments pursuant to this clause and to the Swingline
Lender, as their interests may appear. The purchase of participations in a
Swingline Loan pursuant to this clause shall not relieve the Borrower (or other
party liable for obligations of the Borrower) of any default in the payment
thereof.
If for any reason the Revolving Credit Commitments are terminated at a time
when any Swingline Loans are outstanding, each Lender shall be deemed to have
purchased, and hereby agrees to purchase, a participation in such outstanding
Swingline Loans in an amount equal to its Applicable Percentage calculated
immediately prior to such termination of the Revolving Credit Commitments ) of
the unpaid amount of such Swingline Loans together with accrued interest
thereon. Upon one Business Day's notice from the Swingline Lender, each Lender
shall deliver to the Swingline Lender an amount equal to its respective
participation in same day funds to the Administrative Agent at its offices
identified in Annex 2. In order to further evidence such participation (and
without prejudice to the effectiveness of the participation provisions set
forth above), each Lender shall enter into a separate participation agreement at
the request of the Swingline Lender in form and substance reasonably
satisfactory to such Lender and the Swingline Lender. If any Lender fails to
make available to the Swingline Lender the amount of such Lender's participation
as provided in this paragraph, the Swingline Lender shall be entitled to recover
such amount upon demand from such Lender together with interest thereon at the
Federal Funds Effective Rate for one Business Day and thereafter at the rate
applicable to ABR Revolving Loans. If the Swingline Lender receives a payment
of any amount in which other Lenders have purchased participations as provided
in this Paragraph, the Swingline Lender shall promptly distribute to each such
other Lender its Applicable Percentage of such payment.
SECTION 2.23. Letters of Credit. (a) General. The Borrower may request the
issuance of a Letter of Credit for its own account, by delivering a Letter of
Credit Request at any time and from time to time while the Revolving Credit
Commitments remain in effect. This Section shall not be construed to impose an
obligation upon the Issuing Bank to issue any Letter of Credit that is
inconsistent with the terms and conditions of this Agreement.
43
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions.
In order to request the issuance of a Letter of Credit (or to amend, renew or
extend an existing Letter of Credit), the Borrower shall hand deliver or
telecopy to the Issuing Bank and the Administrative Agent (reasonably in advance
of the requested date of issuance, amendment, renewal or extension) a Letter of
Credit Request requesting the issuance of a Letter of Credit, or identifying the
Letter of Credit to be amended, renewed or extended, the date of issuance,
amendment, renewal or extension, the date on which such Letter of Credit is to
expire (which shall comply with clause (c)), the amount of such Letter of
Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare such Letter of Credit. A Letter of
Credit shall be issued, amended, renewed or extended only if, and upon issuance,
amendment, renewal or extension of each Letter of Credit the Borrower shall be
deemed to represent and warrant that, after giving effect to such issuance,
amendment, renewal or extension (A) the L/C Exposure shall not exceed $7,500,000
and (B) the Aggregate Revolving Credit Exposure shall not exceed the Total
Revolving Credit Commitment.
(c) Expiration Date. Each Letter of Credit shall expire at the close of
business no later than the first anniversary of the date of the issuance of such
Letter of Credit, unless such Letter of Credit expires by its terms on an
earlier date; provided, however, that this clause shall not prevent any Issuing
Bank from agreeing that a Letter of Credit will automatically be extended for
one or more successive periods not to exceed one year each unless such Issuing
Bank elects not to extend for any such additional period. Notwithstanding the
foregoing, no Letter of Credit shall expire later than the fifth Business Days
prior to the Revolving Credit Maturity Date.
(d) Participations. By the issuance of a Letter of Credit and without any
further action on the part of the Issuing Bank or the Lenders, the Issuing Bank
hereby grants to each Revolving Credit Lender, and each such Lender hereby
acquires from the applicable Issuing Bank, a participation in such Letter of
Credit equal to such Lender's Applicable Percentage of the aggregate amount
available to be drawn under such Letter of Credit, effective upon the issuance
of such Letter of Credit. In consideration and in furtherance of the foregoing,
each Revolving Credit Lender hereby absolutely and unconditionally agrees to pay
to the Administrative Agent, for the account of the Issuing Bank, such Lender's
Applicable Percentage of each L/C Disbursement made by the Issuing Bank and not
reimbursed by the Borrower (or, if applicable, another party pursuant to its
obligations under any other Credit Document) forthwith on the date due as
provided in Section 2.02(e). Each Revolving Credit Lender acknowledges and
agrees that its obligation to acquire participations pursuant and to make
payments pursuant to this clause in respect of Letters of Credit is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or an Event of Default,
and that each such payment shall be made without any offset, abatement,
withholding or reduction whatsoever.
(e) Reimbursement. If the Issuing Bank shall make any L/C Disbursement in
respect of a Letter of Credit, the Borrower shall pay to the Issuing Bank an
amount equal to such L/C Disbursement on the same Business Day on which the
Borrower shall have received notice from the Issuing Bank that payment of such
draft will be made, or, if the Borrower shall have received such notice later
than 12:00 noon, New York City time, on any Business Day, not later than 11:00
a.m., New York City time, on the immediately following Business Day.
(f) Obligations Absolute. The Borrower's obligations to reimburse L/C
Disbursements as provided in clause (e) shall be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement, under any and all circumstances whatsoever, and irrespective of:
44
(i) any lack of validity or enforceability of any Letter of Credit or
any Credit Document, or any term or provision therein;
(ii) any amendment or waiver of or any consent to departure from all
or any of the provisions of any Letter of Credit or any Credit Document;
(iii) the existence of any claim, setoff, defense or other right
that the Borrower, any other party guaranteeing, or otherwise obligated
with, the Borrower, any Subsidiary or other Affiliate thereof or any other
person may at any time have against the beneficiary under any Letter of
Credit, the Issuing Bank, the Administrative Agent or any Lender or any
other person, whether in connection with this Agreement, any other Credit
Document or any other related or unrelated agreement or transaction;
(iv) any draft or other document presented under a Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect or
any statement therein being untrue or inaccurate in any respect;
(v) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or other document that does not comply with the
terms of such Letter of Credit; and
(vi) any other act or omission to act or delay of any kind of the
Issuing Bank, the Lenders, the Administrative Agent or any other person or
any other event or circumstance whatsoever, whether or not similar to any
of the foregoing, that might, but for the provisions of this Section,
constitute a legal or equitable discharge of the Borrower's obligations
hereunder.
Without limiting the generality of the foregoing, it is expressly
understood and agreed that the absolute and unconditional obligation of the
Borrower hereunder to reimburse L/C Disbursements will not be excused by the
gross negligence or wilful misconduct of the Issuing Bank. However, the
foregoing shall not be construed to excuse the Issuing Bank from liability to
the Borrower to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are hereby waived by the Borrower to the
extent permitted by applicable law) suffered by the Borrower that are caused by
the Issuing Bank's gross negligence or wilful misconduct in determining whether
drafts and other documents presented under a Letter of Credit comply with the
terms thereof; it is understood that the Issuing Bank may accept documents that
appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary and, in
making any payment under any Letter of Credit (i) the Issuing Bank's exclusive
reliance on the documents presented to it under such Letter of Credit as to any
and all matters set forth therein, including reliance on the amount of any draft
presented under such Letter of Credit, whether or not the amount due to the
beneficiary thereunder equals the amount of such draft and whether or not any
document presented pursuant to such Letter of Credit proves to be insufficient
in any respect, if such document on its face appears to be in order, and whether
or not any other statement or any other document presented pursuant to such
Letter of Credit proves to be forged or invalid or any statement therein proves
to be inaccurate or untrue in any respect whatsoever and (ii) any noncompliance
in any immaterial respect of the documents presented under such Letter of Credit
with the terms thereof shall, in each case, be deemed not to constitute wilful
misconduct or gross negligence of the Issuing Bank.
(g) Disbursement Procedures. The Issuing Bank shall, promptly following
its receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall as promptly as
possible give telephonic notification, confirmed by telecopy, to the
Administrative Agent and the Borrower of such demand for payment and whether
45
the Issuing Bank has made or will make an L/C Disbursement thereunder; provided
that any failure to give or delay in giving such notice shall not relieve the
Borrower of its obligation to reimburse the Issuing Bank and the Revolving
Credit Lenders with respect to any such L/C Disbursement. The Administrative
Agent shall promptly give each Revolving Credit Lender notice thereof.
(h) Interim Interest. If the Issuing Bank shall make any L/C Disbursement
in respect of a Letter of Credit, then, unless the Borrower shall reimburse such
L/C Disbursement in full on such date, the unpaid amount thereof shall bear
interest for the account of the Issuing Bank, for each day from and including
the date of such L/C Disbursement, to but excluding the earlier of the date of
payment by the Borrower or the date on which interest shall commence to accrue
thereon as provided in Section 2.02(e), at the rate per annum that would apply
to such amount if such amount were an ABR Loan.
(i) Resignation or Removal of the Issuing Bank. The Issuing Bank may
resign at any time by giving 180 days' prior written notice to the
Administrative Agent, the Lenders and the Borrower, and may be removed at any
time by the Borrower by notice to the Issuing Bank, the Administrative Agent and
the Lenders, to be effective only upon the appointment of a successor Issuing
Bank pursuant to the following sentence. Subject to the next succeeding clause,
upon the acceptance of any appointment as the Issuing Bank hereunder by a Lender
that shall agree to serve as successor Issuing Bank, such successor shall
succeed to and become vested with all the interests, rights and obligations of
the retiring Issuing Bank and the retiring Issuing Bank shall be discharged from
its obligations to issue additional Letters of Credit hereunder. At the time
such removal or resignation shall become effective, the Borrower shall pay all
accrued and unpaid fees pursuant to Section 2.05(d)(ii). The acceptance of any
appointment as the Issuing Bank hereunder by a successor Lender shall be
evidenced by an agreement entered into by such successor, in a form satisfactory
to the Borrower and the Administrative Agent, and, from and after the effective
date of such agreement, (i) such successor Lender shall have all the rights and
obligations of the previous Issuing Bank under this Agreement and the other
Credit Documents and (ii) references herein and in the other Credit Documents to
the term "Issuing Bank" shall be deemed to refer to such successor or to any
previous Issuing Bank, or to such successor and all previous Issuing Banks, as
the context shall require. After the resignation or removal of the Issuing Bank
hereunder, the retiring Issuing Bank shall remain a party hereto and shall
continue to have all the rights and obligations of an Issuing Bank under this
Agreement and the other Credit Documents with respect to Letters of Credit
issued by it prior to such resignation or removal, but shall not be required to
issue additional Letters of Credit.
(j) Cash Collateralization. If any Event of Default shall occur and be
continuing, the Borrower shall, on the Business Day it receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Revolving Credit Lenders holding participations in
outstanding Letters of Credit representing greater than 50% of the aggregate
undrawn amount of all outstanding Letters of Credit) thereof and of the amount
to be deposited, deposit in an account with the Collateral Agent, for the
benefit of the Revolving Credit Lenders, an amount in cash equal to the L/C
Exposure as of such date. Such deposits shall be held by the Collateral Agent
as collateral for the payment and performance of the Obligations. The Collateral
Agent shall have exclusive dominion and control, including the exclusive right
of withdrawal, over such account. Such deposits shall be invested in Permitted
Investments, to be selected by the Issuing Bank in its sole discretion, and
interest earned on such deposits shall be deposited in such account as
additional collateral for the payment and performance of the Obligations.
Interest or profits, if any, on such investments shall accumulate in such
account. Moneys in such account shall (i) automatically be applied by the
Administrative Agent to reimburse the Issuing Bank for L/C Disbursements for
which it has not been reimbursed, (ii) be
46
held for the satisfaction of the reimbursement obligations of the Borrower for
the L/C Exposure at such time and (iii) if the maturity of the Loans has been
accelerated (but subject to the consent of Revolving Credit Lenders holding
participations in outstanding Letters of Credit representing greater than 50% of
the aggregate undrawn amount of all outstanding Letters of Credit), be applied
to satisfy the Obligations. If the Borrower is required to provide an amount of
cash collateral hereunder as a result of the occurrence of an Event of Default,
such amount (to the extent not applied as aforesaid) shall be returned to the
Borrower within three Business Days after all Events of Default have been cured
or waived.
(k) Additional Issuing Banks. The Borrower may, at any time and from time
to time with the consent of the Administrative Agent (which consent shall not be
unreasonably withheld) and such Lender, designate one or more additional Lenders
to act as an issuing bank under the terms of the Agreement. Any Lender
designated as an issuing bank pursuant to this clause shall be deemed to be an
"Issuing Bank" (in addition to being a Lender) in respect of Letters of Credit
issued or to be issued by such Lender, and, with respect to such Letters of
Credit, such term shall thereafter apply to the other Issuing Bank and such
Lender.
ARTICLE III
Representations and Warranties
The Borrower represents and warrants to the Administrative Agent, the
Collateral Agent, the Issuing Bank and each of the Lenders that:
SECTION 3.01. Organization; Powers. The Borrower and each of the
Subsidiaries (a) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (b) has all
requisite power and authority to own its property and assets and to carry on its
business as now conducted and as proposed to be conducted, (c) is qualified to
do business in, and is in good standing in, every jurisdiction where such
qualification is required, except where the failure so to qualify could not
reasonably be expected to result in a Material Adverse Effect, and (d) has the
corporate power and authority to execute, deliver and perform its obligations
under each of the Credit Documents and each other agreement or instrument
contemplated hereby to which it is or will be a party and, in the case of the
Borrower, to borrow hereunder.
SECTION 3.02. Authorization. The execution, delivery and performance by
each Credit Party of each of the Credit Documents and the borrowings hereunder
(collectively, the "Transactions") and the Recapitalization (a) have been duly
authorized by all requisite corporate and, if required, stockholder action and
(b) will not (i) violate (A) any provision of law, statute, rule or regulation,
or of the certificate or articles of incorporation or other constitutive
documents or by-laws of the Borrower or any Subsidiary other than any violation
which will not have a Material Adverse Effect, (B) any order of any Governmental
Authority or (C) any provision of any indenture, agreement or other instrument
to which the Borrower or any Subsidiary is a party or by which any of them or
any of their property is or may be bound, (ii) be in conflict with, result in a
breach of or constitute (alone or with notice or lapse of time or both) a
default under, or give rise to any right to accelerate or to require the
prepayment, repurchase or redemption of any obligation under any such indenture,
agreement or other instrument or (iii) result in the creation or imposition of
any Lien upon or with respect to any property or assets now owned or hereafter
acquired by the Borrower or any Subsidiary (other than any Lien created
hereunder or under the Security Documents).
47
SECTION 3.03. Enforceability. This Agreement has been duly executed and
delivered by the Borrower and constitutes, and each other Credit Document when
executed and delivered by the each Credit Party party thereto will constitute, a
legal, valid and binding obligation of such Credit Party enforceable against
such Credit Party in accordance with its terms.
SECTION 3.04. Governmental Approvals and Licenses. No action, consent or
approval of, registration or filing with or any other action by any Governmental
Authority is or will be required in connection with the Transactions and the
Recapitalization, except for (a) the filing of Uniform Commercial Code financing
statements and filings with the United States Patent and Trademark Office and
the United States Copyright Office, (b) recordation of the Mortgages and (c)
such as have been made or obtained and are in full force and effect. The
Borrower and its Subsidiaries have all licenses, permits, approvals,
qualifications, consents, certificates of needs and accreditations (where such
are required) and other authorizations necessary for the lawful conduct of their
respective businesses or operations wherever now conducted and as planned to be
conducted, pursuant to all applicable statutes, laws, ordinances, rules and
regulations of all Governmental Authorities having, asserting or claiming
jurisdiction over the Borrower and its Subsidiaries on a consolidated basis,
except where such failure would not have a Material Adverse Effect. Copies of
all such licenses, permits, approvals, qualifications, consents and other
authorizations shall be provided to the Administrative Agent upon request. The
Borrower and its Subsidiaries are not in default under any of such licenses,
permits, approvals, consents, qualifications or authorizations and no event has
occurred, and no condition exists, which, with the giving of notice, the passage
of time, or both, would constitute a default thereunder or would result in the
suspension, revocation, impairment, forfeiture or non-renewal of any such
permit, license, authorization or accreditation, except where such failure would
not have a Material Adverse Effect. The continuation, validity and
effectiveness of all such licenses, permits, approvals, consents, qualifications
and authorizations will in no way be adversely affected by the transactions
contemplated by this Agreement, except where such a failure of continuation,
validly or effectiveness would not have a Material Adverse Effect. The Borrower
and its Subsidiaries know of no reason why they will not be able to maintain
after the Closing Date all licenses, permits, approvals, consents,
qualifications, accreditations and other authorizations necessary or appropriate
to own and operate their respective current businesses and to obtain such
licenses, permits, approvals, consents, qualifications and other authorizations
necessary to own and operate their respective current businesses, and otherwise
conduct the business of the Borrower and its Subsidiaries as now conducted and
presently proposed to be conducted.
SECTION 3.05. Financial Statements. (a) The Borrower has heretofore
furnished to the Lenders its consolidated and consolidating balance sheets and
statements of income and changes in financial condition as of and for the fiscal
year ended December 31, 1997, audited by and accompanied by the opinion of Ernst
& Young, independent public accountants. Such financial statements present
fairly the financial condition and results of operations and cash flows of the
Borrower and its consolidated Subsidiaries as of such dates and for such
periods. Such balance sheets and the notes thereto disclose all material
liabilities, direct or contingent, of the Borrower and its consolidated
Subsidiaries as of the dates thereof. Such financial statements were prepared
in accordance with GAAP applied on a consistent basis.
(b) The Borrower has heretofore delivered to the Lenders its unaudited pro
forma consolidated balance sheet as of the Closing Date, prepared giving effect
to the Recapitalization as if it had occurred on such date, an unaudited
quarterly operating statement for the fiscal quarter ending nearest to March
31, 1998, and unaudited monthly operating statements for April and (if
available) May of 1998. Such pro forma balance sheet and monthly operating
statements has been prepared in good faith by the Borrower, based on the
assumptions used to prepare the pro forma financial information contained in the
Confidential Information Memorandum (which
48
assumptions are believed by the Borrower on the date hereof and on the Closing
Date to be reasonable), is based on the best information available to the
Borrower as of the date of delivery thereof, accurately reflects all adjustments
required to be made to give effect to the Recapitalization and presents fairly
on a pro forma basis the estimated consolidated financial position of the
Borrower and its consolidated Subsidiaries as of such date, assuming that the
Recapitalization had actually occurred at such date.
SECTION 3.06. No Material Adverse Change. There has been no material
adverse change in the business, assets, operations, prospects, condition,
financial or otherwise, or material agreements of the Borrower and the
Subsidiaries, taken as a whole, since December 31, 1997.
SECTION 3.07. Title to Properties; Possession Under Leases. (a) The
Borrower and each of the Subsidiaries has good and marketable title to, or valid
leasehold interests in, all its material properties and assets (including all
Mortgaged Property), except for minor defects in title that do not interfere
with its ability to conduct its business as currently conducted or to utilize
such properties and assets for their intended purposes. All such material
properties and assets are free and clear of Liens, other than Liens expressly
permitted by Section 6.02.
(b) Except as set forth on Schedule 3.07(b), the Borrower and each of the
Subsidiaries has complied in all material respects with all obligations under
all material leases to which it is a party and all such leases are in full force
and effect. the Borrower and each of the Subsidiaries enjoys peaceful and
undisturbed possession under all such material leases, except where failure to
have such possession will not have a Material Adverse Effect.
(c) Except as set forth on Schedule 3.07(c), the Borrower has not
received any written notice of, nor has any knowledge of, any pending or
contemplated condemnation proceeding affecting the Mortgaged Properties or any
sale or disposition thereof in lieu of condemnation.
(d) Neither the Borrower nor any of the Subsidiaries is obligated under
any right of first refusal, option or other contractual right to sell, assign or
otherwise dispose of any Mortgaged Property or any interest therein.
SECTION 3.08. Subsidiaries. Schedule 3.08 sets forth as of the Closing Date
a list of all Subsidiaries and the percentage ownership interest of the Borrower
therein. The shares of capital stock or other ownership interests so indicated
on Schedule 3.08 are fully paid and non-assessable and are owned by the
Borrower, directly or indirectly, free and clear of all Liens.
SECTION 3.09. Litigation; Compliance with Laws. (a) Except as set forth on
Schedule 3.09, there are not any actions, suits or proceedings at law or in
equity or by or before any Governmental Authority now pending or, to the
knowledge of the Borrower, threatened against or affecting the Borrower or any
Subsidiary or any business, property or rights of any such person (i) that
involve any Credit Document, the Transactions or the Recapitalization, or that
purport to affect the ability of the parties to consummate the Transactions or
the Recapitalization, or (ii) as to which there is a reasonable possibility of
an adverse determination and that, if adversely determined, could reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect.
(b) Neither the Borrower nor any of the Subsidiaries or any of their
respective material properties or assets is in violation of, nor will the
continued operation of their material properties and assets as currently
conducted violate, any law, rule or regulation (including any zoning, building,
Environmental Law, ordinance, code or approval or any building permits) or any
restrictions of record or agreements affecting the Mortgaged Property, or is in
default with
49
respect to any judgment, writ, injunction, decree or order of any Governmental
Authority, where such violation or default could reasonably be expected to
result in a Material Adverse Effect.
SECTION 3.10. Default in Material Agreements. Neither the Borrower nor any
of the Subsidiaries is in default in any manner under any provision of any
indenture or other agreement or instrument evidencing Indebtedness, or any other
material agreement or instrument to which it is a party or by which it or any of
its properties or assets are or may be bound, where such default could
reasonably be expected to result in a Material Adverse Effect.
SECTION 3.11. Federal Reserve Regulations. Neither the Borrower nor any of
the Subsidiaries is engaged principally, or as one of its important activities,
in the business of extending credit for the purpose of buying or carrying Margin
Stock.
SECTION 3.12. Investment Company Act; Public Utility Holding Company Act.
Neither the Borrower nor any Subsidiary is (a) an "investment company" as
defined in, or subject to regulation under, the Investment Company Act of 1940
or (b) a "holding company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935.
SECTION 3.13. Tax Returns. The Borrower and each of the Subsidiaries has
filed or caused to be filed all Federal, state, local and foreign tax returns or
materials required to have been filed by it and has paid or caused to be paid
all taxes due and payable by it and all assessments received by it, except taxes
that are being contested in good faith by appropriate proceedings and for which
the Borrower or such Subsidiary, as applicable, shall have set aside on its
books adequate reserves in accordance with GAAP.
SECTION 3.14. No Material Misstatements. None of (a) the Confidential
Information Memorandum or (b) any other information, report, financial
statement, exhibit or schedule furnished by or on behalf of the Borrower to the
Administrative Agent or any Lender in connection with the negotiation of any
Credit Document or included therein or delivered pursuant thereto contained,
contains or will contain any material misstatement of fact or omitted, omits or
will omit to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were, are or will be made,
not misleading; provided that to the extent any such information, report,
financial statement, exhibit or schedule was based upon or constitutes a
forecast or projection, each of the Borrower represents only that it acted in
good faith and utilized reasonable assumptions and due care in the preparation
of such information, report, financial statement, exhibit or schedule.
SECTION 3.15. Employee Benefit Plans. Each of the Borrower and its ERISA
Affiliates is in compliance in all material respects with the applicable
provisions of ERISA and the Code and the regulations and published
interpretations thereunder. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events,
could reasonably be expected to result in material liability of the Borrower or
any of its ERISA Affiliates. The present value of all benefit liabilities under
each Plan (based on those assumptions used to fund such Plan) did not, as of the
last annual valuation date applicable thereto, exceed by more than $1,000,000
the fair market value of the assets of such Plan, and the present value of all
benefit liabilities of all underfunded Plans (based on those assumptions used to
fund each such Plan) did not, as of the last annual valuation dates applicable
thereto, exceed by more than $1,000,000 the fair market value of the assets of
all such underfunded Plans.
50
SECTION 3.16. Environmental Matters. Except as set forth in Schedule 3.16:
(a) The real properties owned or operated by the Borrower and the
Subsidiaries (the "Environmental Properties") do not contain any Hazardous
Materials in amounts or concentrations which (i) constitute, or constituted a
violation of, (ii) require Remedial Action under, or (iii) could give rise to
liability under, Environmental Laws, which violations, Remedial Actions and
liabilities, in the aggregate, could reasonably be expected to result in a
Material Adverse Effect;
(b) The Environmental Properties and all operations of the Borrower and the
Subsidiaries are in compliance, and in the last five years have been in
compliance, with all Environmental Laws and all necessary Environmental Permits
have been obtained and are in effect, except to the extent that such non-
compliance or failure to obtain any necessary permits, in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect;
(c) There have been no Releases or threatened Releases at, from, under or
proximate to the Environmental Properties or otherwise in connection with the
operations of the Borrower or the Subsidiaries, which Releases or threatened
Releases, in the aggregate, could reasonably be expected to result in a Material
Adverse Effect;
(d) Neither the Borrower nor any of the Subsidiaries has received any
Environmental Claim in connection with the Environmental Properties or the
operations of the Borrower or the Subsidiaries or with regard to any person
whose liabilities for environmental matters the Borrower or the Subsidiaries has
retained or assumed, in whole or in part, contractually, by operation of law or
otherwise, which, in the aggregate, could reasonably be expected to result in a
Material Adverse Effect, nor do the Borrower or the Subsidiaries have reason to
believe that any such notice will be received or is being threatened; and
(e) Hazardous Materials have not been transported from the Environmental
Properties, nor have Hazardous Materials been generated, treated, stored or
disposed of at, on or under any of the Environmental Properties in a manner that
could give rise to liability under any Environmental Law, nor have the Borrower
or the Subsidiaries retained or assumed any liability, contractually, by
operation of law or otherwise, with respect to the generation, treatment,
storage or disposal of Hazardous Materials, which transportation, generation,
treatment, storage or disposal, or retained or assumed liabilities, in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.
SECTION 3.17. Insurance. Schedule 3.17 sets forth a true, complete and
correct description of all insurance maintained by the Borrower or by the
Borrower for its Subsidiaries as of the date hereof and the Closing Date. As of
each such date, such insurance is in full force and effect and all premiums have
been duly paid. The Borrower and its Subsidiaries have insurance in such
amounts and covering such risks and liabilities as are in accordance with normal
industry practice.
SECTION 3.18. Security Documents. (a) The Pledge Agreement is effective to
create in favor of the Collateral Agent, for the ratable benefit of the Secured
Parties, a legal, valid and enforceable security interest in the Collateral (as
defined in the Pledge Agreement) and, when the Collateral is delivered to the
Collateral Agent, the Pledge Agreement shall constitute a fully perfected first
priority Lien on, and security interest in, all right, title and interest of the
pledgors thereunder in such Collateral, in each case prior and superior in right
to any other person.
(b) The Security Agreement is effective to create in favor of the
Collateral Agent, for the
51
ratable benefit of the Secured Parties, a legal, valid and enforceable security
interest in the Collateral (as defined in the Security Agreement) and, when
financing statements in appropriate form are filed in the offices specified on
Schedule 6 to the Perfection Certificate, the Security Agreement shall
constitute a fully perfected Lien on, and security interest in, all right, title
and interest of the grantors thereunder in such Collateral (other than the
Intellectual Property, as defined in the Security Agreement), in each case to
the extent such security interests can be so perfected by such filings, and
prior and superior in right to any other person, other than with respect to
Liens expressly permitted by Section 6.02.
(c) When the Security Agreement is filed in the United States Patent and
Trademark Office and the United States Copyright Office, the Security Agreement
shall constitute a fully perfected Lien on, and security interest in, all right,
title and interest of the grantors thereunder in the Intellectual Property (as
defined in the Security Agreement), in each case to the extent such security
interests can be so perfected by such filings, and prior and superior in right
to any other person (it being understood that subsequent recordings in the
United States Patent and Trademark Office and the United States Copyright Office
may be necessary to perfect a lien on registered trademarks, trademark
applications and copyrights acquired by the grantors after the date hereof).
(d) The Mortgages are effective to create in favor of the Collateral
Agent, for the ratable benefit of the Secured Parties, a legal, valid and
enforceable Lien on all of the Credit Parties' right, title and interest in and
to the Mortgaged Property thereunder and the proceeds thereof, and when the
Mortgages are filed in the offices specified on Schedule 3.18(d), the Mortgages
shall constitute a fully perfected Lien on, and security interest in, all right,
title and interest of the Credit Parties in such Mortgaged Property and the
proceeds thereof, in each case prior and superior in right to any other person,
other than with respect to the rights of persons pursuant to Liens expressly
permitted by Section 6.02.
SECTION 3.19. Location of Real Property and Leased Premises. (a) Schedule
3.19(a) lists completely and correctly as of the Closing Date all real property
owned by the Borrower and the Subsidiaries and the addresses thereof. The
Borrower and the Subsidiaries own in fee all the real property set forth on
Schedule 3.19(a).
(b) Schedule 3.19(b) lists completely and correctly as of the Closing Date
all real property leased by the Borrower and the Subsidiaries and the addresses
thereof. The Borrower and the Subsidiaries have valid leases in all the real
property set forth on Schedule 3.19(b).
SECTION 3.20. Labor Matters As of the date hereof and the Closing Date,
there are no strikes, lockouts or slowdowns against the Borrower or any
Subsidiary pending or, to the knowledge of the Borrower, threatened. The hours
worked by and payments made to employees of the Borrower and the Subsidiaries
have not been in violation of the Fair Labor Standards Act or any other
applicable Federal, state, local or foreign law dealing with such matters except
where such a violation would not have a Material Adverse Effect. All payments
due from the Borrower or any Subsidiary, or for which any claim may be made
against the Borrower or any Subsidiary, on account of wages and employee health
and welfare insurance and other benefits, have been paid or accrued as a
liability on the books of the Borrower or such Subsidiary. The consummation of
the Transactions and the Recapitalization will not give rise to any right of
termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which the Borrower or any Subsidiary is
bound.
SECTION 3.21. Solvency. Immediately after the consummation of the
Transactions to occur on the Closing Date and immediately following the making
of each Loan made on the Closing Date and after giving effect to the application
of the proceeds of such Loans, (i) the fair
52
value of the assets of the Credit Parties, taken as a whole, at a fair
valuation, will exceed their debts and liabilities, subordinated, contingent or
otherwise; (ii) the present fair saleable value of the property of the Credit
Parties, taken as a whole, will be greater than the amount that will be required
to pay the probable liability of their debts and other liabilities,
subordinated, contingent or otherwise, taken as a whole, as such debts and other
liabilities become absolute and matured; (iii) the Credit Parties, taken as a
whole, will be able to pay their debts and liabilities, subordinated, contingent
or otherwise, taken as a whole, as such debts and liabilities become absolute
and matured; and (iv) the Credit Parties, taken as a whole, will not have
unreasonably small capital with which to conduct the business in which they are
engaged as such business is now conducted and is proposed to be conducted
following the Closing Date.
SECTION 3.22. Year 2000. The Borrower does not expect that its information
system capabilities will encounter any material "Year 2000" problems.
ARTICLE IV
Conditions of Lending
The obligations of the Lenders to make Loans (other than a Borrowing
pursuant to Section 2.2(e)) and of the Issuing Bank to issue Letters of Credit
hereunder are subject to the satisfaction of the following conditions (it being
understood for purposes of this Section that making a Loan or Borrowing does not
include a change or continuation of the Type of, or a duration of the Interest
Period applicable to, a previously outstanding Borrowing pursuant to Section
2.10):
SECTION 4.01. All Credit Events. On the date of each Borrowing (other than
a Borrowing pursuant to Section 2.02(e)), including each Borrowing of a
Swingline Loan and on the date of each issuance of a Letter of Credit (each such
event being called a "Credit Event"):
(a) Borrowing Request. The Administrative Agent shall have received a
notice of such Borrowing as required by Section 2.03 or, in the case of the
issuance of a Letter of Credit, the Issuing Bank and the Administrative Agent
shall have received a notice requesting the issuance of such Letter of Credit as
required by Section 2.23(b) or, in the case of the Borrowing of a Swingline
Loan, the Swingline Lender and the Administrative Agent shall have received a
notice requesting such Swingline Loan as required by Section 2.22(b).
(b) Representations and Warranties. Except in the case of a Borrowing
that does not increase the aggregate principal amount of Loans outstanding of
any Lender, the representations and warranties set forth in Article III hereof
shall be true and correct in all material respects on and as of the date of such
Credit Event with the same effect as though made on and as of such date, except
to the extent such representations and warranties expressly relate to an earlier
date.
(c) No Default. The Borrower and each other Credit Party shall be in
compliance with all the terms and provisions set forth herein and in each other
Credit Document on its part to be observed or performed, and at the time of and
immediately after such Credit Event, no Event of Default or Default shall have
occurred and be continuing.
Each Credit Event shall be deemed to constitute a representation and warranty by
the Borrower on the date of such Credit Event as to the matters specified in
clauses (b) (except as aforesaid) and (c) of this Section.
53
SECTION 4.02. First Credit Event. On the Closing Date:
(a) Notes. Each Lender shall have received its duly executed Notes
complying with the provisions of Section 2.04.
(b) Opinions. The Administrative Agent shall have received, on behalf
of itself, the Lenders and the Issuing Bank, a favorable written opinion of
(i) ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, special California counsel for the Borrower,
substantially to the effect set forth in Exhibit O, (ii) ▇▇▇▇▇▇ & ▇▇▇▇▇▇,
special Texas counsel for the Borrower, substantially to the effect set
forth in Exhibit P, (iii) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, P.C., Texas counsel for the
Borrower, substantially to the effect set forth in Exhibit Q, (iv) ▇▇▇▇▇▇▇▇
& O'Neil, special New York counsel for the Borrower, substantially to the
effect set forth in Exhibit R, and (v) each local counsel listed on
Schedule 4.02(b), substantially to the effect set forth in Exhibit S,
substantially to the effect set forth in Exhibit S, in each case (A) dated
the Closing Date, (B) addressed to the Syndication Agent, the Issuing Bank,
the Administrative Agent and the Lenders, and (C) covering such other
matters relating to the Credit Documents and the Transactions as the
Syndication Agent shall reasonably request, and the Borrower hereby
requests such counsel to deliver such opinions. The Syndication Agent shall
have received, on behalf of itself, the Administrative Agent and the
Lenders, a customary enforceability opinion of Cravath, ▇▇▇▇▇ & ▇▇▇▇▇,
special New York counsel to the Syndication Agent and the Administrative
Agent.
(c) Legal Matters. All legal matters incident to this Agreement, the
Borrowings and extensions of credit hereunder and the other Credit
Documents shall be satisfactory to the Lenders, to the Issuing Bank and to
Cravath, Swaine & ▇▇▇▇▇, counsel for the Administrative Agent.
(d) Organizational Documents. The Administrative Agent shall have
received (i) a copy of the certificate or articles of incorporation,
including all amendments thereto, of each Credit Party, certified as of a
recent date by the Secretary of State of the state of its organization, and
a certificate as to the good standing of each Credit Party as of a recent
date, from such Secretary of State; (ii) a certificate of the Secretary or
Assistant Secretary of each Credit Party dated the Closing Date and
certifying (A) that attached thereto is a true and complete copy of the by-
laws of such Credit Party as in effect on the Closing Date and at all times
since a date prior to the date of the resolutions described in clause (B),
(B) that attached thereto is a true and complete copy of resolutions duly
adopted by the Board of Directors of such Credit Party authorizing the
execution, delivery and performance of the Credit Documents to which such
person is a party and, in the case of the Borrower, the borrowings
hereunder, and that such resolutions have not been modified, rescinded or
amended and are in full force and effect, (C) that the certificate or
articles of incorporation of such Credit Party have not been amended since
the date of the last amendment thereto shown on the certificate of good
standing furnished pursuant to clause (i), and (D) as to the incumbency and
specimen signature of each officer executing any Credit Document or any
other document delivered in connection herewith on behalf of such Credit
Party; (iii) a certificate of another officer as to the incumbency and
specimen signature of the Secretary or Assistant Secretary executing the
certificate pursuant to clause (ii); and (iv) such other documents as the
Lenders, the Issuing Bank or Cravath, Swaine & ▇▇▇▇▇, counsel for the
Administrative Agent, may reasonably request.
(e) Officer's Certificate. The Administrative Agent shall have
received a certificate, dated the Closing Date and signed by a Responsible
Officer of the Borrower, confirming compliance with the conditions
precedent set forth in clauses (b) and (c) of
54
Section 4.01.
(f) Payment of Fees, Etc. The Administrative Agent shall have
received all Fees and other amounts due and payable on or prior to the
Closing Date, including, to the extent invoiced, reimbursement or payment
of all out-of-pocket expenses required to be reimbursed or paid by the
Borrower hereunder or under any other Credit Document and fees under
Section 9.05(a).
(g) Pledge Agreement. The Pledge Agreement shall have been duly
executed by the parties thereto and delivered to the Collateral Agent and
shall be in full force and effect, and all the outstanding capital stock of
the Borrower and the Subsidiaries shall have been duly and validly pledged
thereunder to the Collateral Agent for the ratable benefit of the Secured
Parties and certificates representing such shares, accompanied by
instruments of transfer and stock powers endorsed in blank, shall be in the
actual possession of the Collateral Agent; provided that to the extent to
do so would cause adverse tax consequences to the Borrower, (i) neither the
Borrower nor any Domestic Subsidiary shall be required to pledge more than
65% of the capital stock of any Foreign Subsidiary and (ii) no Foreign
Subsidiary shall be required to pledge the capital stock of any of its
Foreign Subsidiaries .
(h) Security Agreement. The Security Agreement shall have been duly
executed by the Credit Parties party thereto and shall have been delivered
to the Collateral Agent and shall be in full force and effect on such date
and each document (including each Uniform Commercial Code financing
statement) required by law or reasonably requested by the Administrative
Agent to be filed, registered or recorded in order to create in favor of
the Collateral Agent for the benefit of the Secured Parties a valid, legal
and perfected first-priority security interest in and lien on the
Collateral (subject to any Lien expressly permitted by Section 6.02)
described in such agreement shall have been delivered to the Collateral
Agent.
(i) Lien Search. The Collateral Agent shall have received the
results of a search of the Uniform Commercial Code (or equivalent filings)
filings made with respect to the Credit Parties in the states (or other
jurisdictions) in which the chief executive office of each such person is
located, any offices of such persons in which records have been kept
relating to Accounts and the other jurisdictions in which Uniform
Commercial Code filings (or equivalent filings) are to be made pursuant to
the preceding clause, together with copies of the financing statements (or
similar documents) disclosed by such search, and accompanied by evidence
satisfactory to the Collateral Agent that the Liens indicated in any such
financing statement (or similar document) would be permitted under Section
6.02 or have been released.
(j) Perfection Certificate. The Collateral Agent shall have received
a Perfection Certificate with respect to the Credit Parties dated the
Closing Date and duly executed by a Responsible Officer of the Borrower.
(k) Subsidiary Guarantee Agreement. The Subsidiary Guarantee
Agreement shall have been duly executed by the parties thereto, shall have
been delivered to the Collateral Agent and shall be in full force and
effect.
(l) Indemnity, Subrogation and Contribution Agreement. The
Indemnity, Subrogation and Contribution Agreement shall have been duly
executed by the parties thereto, shall have been delivered to the
Collateral Agent and shall be in full force and
55
effect.
(m) Insurance Policies. The Administrative Agent shall have received
a copy of, or a certificate as to coverage under, the insurance policies
required by Section 5.02 and the applicable provisions of the Security
Documents, each of which shall be endorsed or otherwise amended to include
a "standard" or "New York" lender's loss payable endorsement and to name
the Collateral Agent as additional insured, in form and substance
satisfactory to the Administrative Agent and the Syndication Agent.
(n) Environmental and Employment Matters. The Lenders shall be
satisfied as to the amount and nature of any environmental and employee
health and safety exposures to which the Borrower and the Subsidiaries may
be subject and the plans of the Borrower with respect thereto.
(o) Recapitalization Documents. The Administrative Agent shall have
received, with a copy for each Lender, a copy of the Recapitalization
Agreement and any of the other related documentation reasonably requested
by the Administrative Agent, certified by a Responsible Officer of the
Borrower.
(p) Recapitalization. The Recapitalization shall be concurrently
consummated as set forth in Annex 3, and the capital structure of the
Borrower shall be as set forth in Annex 3. The terms and conditions, and
documentation, of any material Indebtedness and all equity securities of
the Borrower or any of its Subsidiaries to be outstanding at or after the
Closing Date, the certificate of incorporation, by-laws, other governing
documents and the corporate and capital structure of the Borrower and its
Subsidiaries, in each case after giving effect to the consummation of the
Recapitalization, shall be in form and substance satisfactory to the
Administrative Agent. The Recapitalization shall have been consummated for
an aggregate Conversion Amount in cash equal to $179,300,000 (the
"Conversion Amount"), pursuant to the Recapitalization Agreement. All of
the conditions precedent set forth in the Recapitalization Agreement shall
have been satisfied or waived, and no material provision of the
Recapitalization Agreement shall have been amended, supplemented, waived or
otherwise modified without the prior written consent of the Required
Lenders, which consent shall not be unreasonably withheld. The
Administrative Agent shall be satisfied with the Recapitalization Agreement
in all respects.
(q) Transaction Costs. The Transaction Costs shall have been paid
(or made provision reasonably satisfactory to the Administrative Agent and
the Syndication Agent for the payment thereof) in an amount not in excess
of $15,000,000.
(r) Equity Investment. The Equity Investment shall have been made in
an aggregate amount not less than $68,300,000 in cash.
(s) Exchangeable Preferred Stock. The Exchangeable Preferred Stock
shall have been duly authorized and issued in form and substance
satisfactory to the Lenders; and the Borrower shall have received proceeds
(before deductions for underwriting and placement fees) pursuant thereto of
approximately $40,000,000.
(t) Existing Indebtedness (i) After giving effect to the
Recapitalization and the other transactions contemplated hereby, the
Borrower and its subsidiaries shall have outstanding no indebtedness or
preferred stock other than (A) the Loans and other extensions of credit
under this Agreement, (B) the Exchangeable Preferred Stock, and (C) as set
forth in Schedule 4.02(t), and (ii) Syndication Agent shall have received
satisfactory
56
evidence that all loans outstanding under, and all other amounts due in
respect of, the Indebtedness to be Paid shall have been repaid in full and
the commitments thereunder shall have been permanently terminated.
(u) Audited Balance Sheet. The Administrative Agent shall have
received (i) audited consolidated and consolidating balance sheets and
related statements of income, stockholders' equity and cash flows of the
Borrower for the three fiscal years ended before the Closing Date and (ii)
to the extent available, unaudited consolidated and consolidating balance
sheets and related statements of income, stockholders' equity and cash
flows of the Borrower for each completed fiscal quarter since the date of
such audited financial statements (and, to the extent available, for each
completed month since the last such quarter), which audited and unaudited
financial statements (A) shall not be materially inconsistent with the
financial statements previously provided to the Administrative Agent and
(B) shall otherwise be in form and scope satisfactory to the Administrative
Agent and the Syndication Agent.
(v) Pro Forma Balance Sheet. The Administrative Agent shall have
received a pro forma consolidated balance sheet of the Borrower as of the
Closing Date, after giving effect to the Transactions and the other
transactions contemplated hereby, together with a certificate of the chief
financial officer of the Borrower to the effect that such statements
accurately present the pro forma financial position of the Borrower and its
subsidiaries in accordance with generally accepted accounting principles,
and the Administrative Agent and the Syndication Agent shall be satisfied
that such balance sheets are not materially inconsistent with the forecasts
previously provided to the Administrative Agent.
(w) No Litigation. There shall be no litigation or administrative
proceeding that could reasonably be expected to have a material adverse
effect on the business, assets, results of operations, financial condition,
liabilities or prospects of the Borrower and its subsidiaries, taken as a
whole, or on the ability of the parties to consummate the Recapitalization
or the other transactions contemplated hereby.
(x) Taxes. The Administrative Agent and the Syndication Agent shall
be reasonably satisfied in all respects (i) with the tax position and the
contingent tax and other liabilities of the Borrower for prior operating
periods, and with the plans of the Borrower with respect thereto, and (ii)
with any tax sharing agreements among the Borrower and its subsidiaries
after giving effect to the Transactions and the other transactions
contemplated hereby.
(y) Solvency Certificate. The Administrative Agent shall have
received a certificate of the Borrower's chief financial officer, in form
and substance satisfactory to the Administrative Agent, to the effect of
the representations set forth in Section 3.21.
ARTICLE V
Affirmative Covenants
SECTION 5.01. Existence; Businesses and Properties. (a) The Borrower
shall, and the Borrower shall cause each Restricted Subsidiary to, do or cause
to be done all things necessary to preserve, renew and keep in full force and
effect its legal existence, except as otherwise expressly permitted under
Section 6.04.
57
(b) The Borrower shall, and the Borrower shall cause each Restricted
Subsidiary to, do or cause to be done all things necessary to obtain, preserve,
renew, extend and keep in full force and effect the rights, licenses, permits,
franchises, authorizations, patents, copyrights, trademarks and trade names
material to the conduct of its business; comply in all material respects with
all applicable laws, rules, regulations (including any zoning, building,
Environmental Law, ordinance, code or approval or any building permits or any
restrictions of record or agreements affecting the Mortgaged Properties) and
decrees and orders of any Governmental Authority, whether now in effect or
hereafter enacted, except where the failure to do so will not have a Material
Adverse Effect; and at all times maintain and preserve all property material to
the conduct of such business and keep such property in good repair, working
order and condition and from time to time make renewals, additions, improvements
and replacements thereto necessary in order that the business carried on in
connection therewith may be properly conducted at all times.
SECTION 5.02. Insurance. The Borrower shall, and shall cause each
Restricted Subsidiary to,
(a) keep its insurable properties adequately insured at all times by
financially sound and reputable insurers; maintain such other insurance, to
such extent and against such risks, including fire and other risks insured
against by extended coverage, as is customary with companies in the same or
similar businesses operating in the same or similar locations, including
public liability insurance against claims for personal injury or death or
property damage occurring upon, in, about or in connection with the use of
any properties owned, occupied or controlled by it; and maintain such other
insurance as may be required by law.
(b) cause all such policies to be endorsed or otherwise amended to
include a "standard" or "New York" lender's loss payable endorsement, in
form and substance satisfactory to the Administrative Agent and the
Collateral Agent, which endorsement shall provide that, from and after the
Closing Date, if the insurance carrier shall have received written notice
from the Administrative Agent or the Collateral Agent of the occurrence of
an Event of Default, the insurance carrier shall pay all proceeds otherwise
payable to the Borrower or the Credit Parties under such policies directly
to the Collateral Agent; cause all such policies to provide that neither
the Borrower, the Administrative Agent, the Collateral Agent nor any other
party shall be a coinsurer thereunder and to contain a "Replacement Cost
Endorsement", without any deduction for depreciation, and such other
provisions as the Administrative Agent or the Collateral Agent may
reasonably require from time to time to protect their interests; deliver
original or certified copies of all such policies to the Collateral Agent;
cause each such policy to provide that it shall not be canceled, modified
or not renewed (i) by reason of nonpayment of premium upon not less than 10
days' prior written notice thereof by the insurer to the Administrative
Agent and the Collateral Agent (giving the Administrative Agent and the
Collateral Agent the right to cure defaults in the payment of premiums) or
(ii) for any other reason upon not less than 30 days' prior written notice
thereof by the insurer to the Administrative Agent and the Collateral
Agent; deliver to the Administrative Agent and the Collateral Agent, prior
to the cancelation, modification or nonrenewal of any such policy of
insurance, a copy of a renewal or replacement policy (or other evidence of
renewal of a policy previously delivered to the Administrative Agent and
the Collateral Agent) together with evidence satisfactory to the
Administrative Agent and the Collateral Agent of payment of the premium
therefor.
(c) if at any time the area in which the Premises (as defined in the
Mortgages) are located is designated (i) a "flood hazard area" in any Flood
Insurance Rate Map published
58
by the Federal Emergency Management Agency (or any successor agency),
obtain flood insurance in such total amount as the Syndication Agent, the
Collateral Agent or the Required Lenders may from time to time require, and
otherwise comply with the National Flood Insurance Program as set forth in
the Flood Disaster Protection Act of 1973, as it may be amended from time
to time, or (ii) a "Zone 1" area, obtain earthquake insurance in such total
amount as the Administrative Agent, the Collateral Agent or the Required
Lenders may from time to time require.
(d) with respect to any Mortgaged Property, carry and maintain
comprehensive general liability insurance including the "broad form CGL
endorsement" and coverage on an occurrence basis against claims made for
personal injury (including bodily injury, death and property damage) and
umbrella liability insurance against any and all claims, in no event for a
combined single limit of less than $10,000,000, naming the Collateral Agent
as an additional insured, on forms satisfactory to the Collateral Agent.
(e) notify the Administrative Agent and the Collateral Agent
immediately whenever any separate insurance concurrent in form or
contributing in the event of loss with that required to be maintained under
this Section is taken out by the Borrower; and promptly deliver to the
Administrative Agent and the Collateral Agent a duplicate original copy of
such policy or policies.
(f) in connection with the covenants set forth in this Section, it is
understood and agreed that:
(i) none of the Administrative Agent, the Lenders, the Issuing Bank,
or their respective agents or employees shall be liable for any loss or
damage insured by the insurance policies required to be maintained under
this Section, it being understood that (A) the Borrower and the other
Credit Parties shall look solely to their insurance companies or any other
parties other than the aforesaid parties for the recovery of such loss or
damage and (B) such insurance companies shall have no rights of subrogation
against the Administrative Agent, the Collateral Agent, the Lenders, the
Issuing Bank or their agents or employees. If, however, the insurance
policies do not provide waiver of subrogation rights against such parties,
as required above, then the Borrower hereby agrees, to the extent permitted
by law, to waive its right of recovery, if any, against the Administrative
Agent, the Collateral Agent, the Lenders, the Issuing Bank and their agents
and employees; and
(ii) the designation of any form, type or amount of insurance coverage
by the Administrative Agent, the Collateral Agent or the Required Lenders
under this Section shall in no event be deemed a representation, warranty
or advice by the Administrative Agent, the Collateral Agent or the Lenders
that such insurance is adequate for the purposes of the business of the
Borrower and the Subsidiaries or the protection of their properties and the
Administrative Agent, the Collateral Agent and the Required Lenders shall
have the right from time to time to require the Borrower and the other
Credit Parties to keep other insurance in such form and amount as the
Administrative Agent, the Collateral Agent or the Required Lenders may
reasonably request, provided that such insurance shall be obtainable on
commercially reasonable terms.
SECTION 5.03. Payment of Taxes. The Borrower shall, and the Borrower shall
cause each Restricted Subsidiary to, pay and discharge promptly when due all
taxes, assessments and governmental charges or levies imposed upon it or upon
its income or profits or in respect of its property, before the same shall
become delinquent or in default, that, if unpaid, might give rise to
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a Lien upon such properties or any part thereof; provided, however, that such
payment and discharge shall not be required with respect to any such tax,
assessment, charge, levy or claim so long as the validity or amount thereof
shall be contested in good faith by appropriate proceedings and the Borrower
shall have set aside on its books adequate reserves with respect thereto in
accordance with GAAP and such contest operates to suspend collection of the
contested obligation, tax, assessment or charge and enforcement of a Lien and,
in the case of a Mortgaged Property, there is no risk of forfeiture of such
property.
SECTION 5.04. Financial Statements, Reports, etc. The Borrower shall
furnish to the Administrative Agent with copies for each Lender:
(a) within 90 days after the end of each fiscal year, its consolidated
and consolidating balance sheets and related statements of operations,
stockholders' equity and cash flows showing the financial condition of the
Borrower and its consolidated Subsidiaries as of the close of such fiscal
year and the results of its operations and the operations of such
Subsidiaries during such year, all audited by Ernst & Young or other
independent public accountants of recognized national standing and
accompanied by (i) an opinion of such accountants (which shall not be
qualified in any material respect) to the effect that such consolidated
financial statements fairly present the financial condition and results of
operations of the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, and (ii)
any management letter issued by such accountants to the board of directors
or finance committee of the Borrower;
(b) within 45 days after the end of each of the first three fiscal
quarters of each fiscal year, its consolidated balance sheets and related
statements of operations, stockholders' equity and cash flows showing the
financial condition of the Borrower and its consolidated Subsidiaries as of
the close of such fiscal quarter and the results of its operations and the
operations of such Subsidiaries during such fiscal quarter and the then
elapsed portion of the fiscal year, all certified by one of its Financial
Officers as fairly presenting the financial condition and results of
operations of the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
the absence of footnotes and normal year-end audit adjustments, together
with certified quarterly statements of data by distribution center and
quarterly corporate expense data, in form and scope consistent with past
practice, and accompanied by a management discussion and analysis,
(c) within 30 days after the end of each of month, its consolidated
balance sheets and related statements of operations, stockholders' equity
and cash flows showing the financial condition of the Borrower and its
consolidated Subsidiaries as of the close of such month and the results of
its operations and the operations of such Subsidiaries during such month
and the then elapsed portion of the fiscal year, all certified by one of
its Financial Officers as fairly presenting the financial condition and
results of operations of the Borrower and its consolidated Subsidiaries on
a consolidated basis in accordance with GAAP consistently applied, subject
to the absence of footnotes and normal year-end audit adjustments, together
with certified monthly statements of data by distribution center and
monthly corporate expense data, in form and scope consistent with past
practice;
(d) concurrently with any delivery of financial statements under
clause (a), (b) or (c), a certificate of the accounting firm or a Financial
Officer opining on or certifying such statements (which certificate, when
furnished by an accounting firm, may be limited to accounting matters and
disclaim responsibility for legal interpretations) (i) certifying that
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no Event of Default or Default has occurred or, if such an Event of Default
or Default has occurred, specifying the nature and extent thereof and any
corrective action taken or proposed to be taken with respect thereto and
(ii) setting forth computations in reasonable detail satisfactory to the
Administrative Agent demonstrating compliance with the covenants contained
in Section 6.09 through Section 6.13;
(e) concurrently with any delivery of financial statements under
clause (a) or (b), a Pricing Adjustment Certificate;
(f) not later than December 31 of each year, (i) copies of the
Borrower's annual consolidated budget for the following fiscal year, in the
form presented by management to the Borrower's Board of Directors; and (ii)
copies of the Borrower's consolidated financial projections for the
following fiscal year and the next 4 fiscal years prepared in a manner
consistent with the financial projections delivered to the Syndication
Agent in connection with the closing of this Agreement;
(g) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by
the Borrower or any Subsidiary with the Securities and Exchange Commission,
or any Governmental Authority succeeding to any or all of the functions of
said Commission, or with any national securities exchange, or distributed
to its shareholders, as the case may be; and
(h) promptly, from time to time, such other information regarding the
operations, business affairs and financial condition of the Borrower or any
Subsidiary, or compliance with the terms of any Credit Document, as the
Administrative Agent or any Lender may reasonably request.
SECTION 5.05. Litigation and Other Notices. The Borrower shall, promptly
after a Responsible Officer becomes aware thereof, furnish to the Administrative
Agent, the Issuing Bank and each Lender prompt written notice of the following:
(a) any Event of Default or Default, specifying the nature and extent
thereof and the corrective action (if any) taken or proposed to be taken
with respect thereto;
(b) the filing or commencement of, or any threat or notice of
intention of any person to file or commence, any action, suit or
proceeding, whether at law or in equity or by or before any Governmental
Authority, against the Borrower or any Affiliate thereof that could
reasonably be expected to result in a Material Adverse Effect; and (c) any
development that has resulted in, or could reasonably be expected to result
in, a Material Adverse Effect.
SECTION 5.06. Employee Benefits. The Borrower shall, and the Borrower shall
cause each Restricted Subsidiary to, (a) comply in all material respects with
the applicable provisions of ERISA and the Code and (b) furnish to the
Administrative Agent (i) as soon as possible after, and in any event within 10
days after any Responsible Officer of the Borrower or any ERISA Affiliate knows
or has reason to know that, any ERISA Event has occurred that, alone or together
with any other ERISA Event could reasonably be expected to result in liability
of the Borrower in an aggregate amount exceeding $1,000,000 or requiring
payments exceeding $500,000 in any year, a statement of a Financial Officer of
the Borrower setting forth details as to such ERISA Event and the action, if
any, that the Borrower proposes to take with respect thereto.
SECTION 5.07. Maintaining Records; Access to Properties and Inspections.
(a) The
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Borrower shall, and shall cause each Restricted Subsidiary to, keep proper books
of record and account, in a manner consistent with requirements of law and with
sound business practice so as to permit the preparation of financial statements
in conformity with GAAP, and in which full, true and correct entries are made of
all dealings and transactions in relation to its business and activities.
(b) Each Credit Party will, and will cause each of its Subsidiaries to,
permit any representatives designated by the Syndication Agent or any Lender to
visit and inspect the financial records and the properties of the Borrower or
any Subsidiary at reasonable times and as often as reasonably requested and to
make extracts from and copies of such financial records, and permit any
representatives designated by the Syndication Agent or any Lender to discuss the
affairs, finances and condition of the Borrower or any Subsidiary with the
officers thereof and independent accountants therefor; provided, however, that
(i) so long as no Event of Default has occurred and is continuing, the
Syndication Agent and the Lenders shall be limited to visits on four occasions
per year, and the Syndication Agent shall use it best efforts to coordinate such
visits, and (ii) the Syndication Agent shall give the Borrower reasonable notice
of a proposed discussions with such independent accountants, and representatives
of the Borrower may at the Borrower's option participate in such discussions.
SECTION 5.08. Use of Proceeds. The Borrower shall, and shall cause each
Restricted Subsidiary to, use the proceeds of the Loans and request the issuance
of Letters of Credit only for the purposes set forth in Section 6.08.
SECTION 5.09. Compliance with Environmental Laws. The Borrower shall, and
shall cause each Restricted Subsidiary to, comply, and cause all lessees and
other persons occupying its Environmental Properties to comply, in all material
respects with all Environmental Laws and Environmental Permits applicable to its
operations and Environmental Properties; obtain and renew all material
Environmental Permits necessary for its operations and Environmental Properties;
and conduct any Remedial Action in accordance with Environmental Laws, except to
the extent to do the same could not be reasonably be expected to have a Material
Adverse Effect; provided, however, that none of the Borrower or any of the
Subsidiaries shall be required to undertake any Remedial Action to the extent
that its obligation to do so is being contested in good faith and by proper
proceedings and appropriate reserves are being maintained with respect to such
circumstances.
SECTION 5.10. Preparation of Environmental Reports. The Borrower shall, and
shall cause each Restricted Subsidiary to, if a Default caused by reason of a
breach of Section 3.16 or 5.09 shall have occurred and be continuing, at the
request of the Required Lenders through the Administrative Agent, provide to the
Lenders within 45 days after such request, at the expense of the Borrower, an
environmental site assessment report for the Environmental Properties which are
the subject of such default prepared by an environmental consulting firm
acceptable to the Administrative Agent and indicating the presence or absence of
Hazardous Materials and the estimated cost of any compliance or Remedial Action
in connection with such Environmental Properties.
SECTION 5.11. Further Assurances. The Borrower shall, and the Borrower
shall cause each Restricted Subsidiary to, execute any and all further
documents, financing statements, agreements and instruments, and take all
further action (including filing Uniform Commercial Code and other financing
statements, mortgages and deeds of trust) that may be required under applicable
law, or that the Required Lenders, the Administrative Agent or the Collateral
Agent may reasonably request, in order to effectuate the transactions
contemplated by the Credit Documents and in order to grant, preserve, protect
and perfect the validity and first priority of the
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security interests created or intended to be created by the Security Documents.
The Borrower will cause any subsequently acquired or organized Domestic
Subsidiary to execute a Subsidiary Guarantee Agreement, Indemnity Subrogation
and Contribution Agreement and each applicable Security Document in favor of the
Collateral Agent. In addition, from time to time, the Borrower will, at its cost
and expense, promptly secure the Obligations by pledging or creating, or causing
to be pledged or created, perfected security interests with respect to such of
its assets and properties as the Administrative Agent or the Required Lenders
shall designate (it being understood that it is the intent of the parties that
the Obligations shall be secured by, among other things, substantially all the
assets of the Borrower (including real and other properties acquired subsequent
to the Closing Date)). Such security interests and Liens will be created under
the Security Documents and other security agreements, mortgages, deeds of trust
and other instruments and documents in form and substance satisfactory to the
Collateral Agent, and the Borrower shall deliver or cause to be delivered to the
Lenders all such instruments and documents (including legal opinions, title
insurance policies and lien searches) as the Collateral Agent shall reasonably
request to evidence compliance with this Section. The Borrower agrees to provide
such evidence as the Collateral Agent shall reasonably request as to the
perfection and priority status of each such security interest and Lien. Without
in any way limiting the foregoing, within 30 days following the completion of
the construction of the Borrower's headquarters building and distribution
facility located in Stafford, Texas (the "Headquarters Property"), (i) each
Security Document (including a Mortgage) in form and substance satisfactory to
the Lenders relating to the Borrower's leasehold interests in the Headquarters
Property shall have been duly executed by the Borrower and the other parties
thereto and delivered to the Collateral Agent and shall be in full force and
effect and (ii) the Borrower's interest in the Headquarters Property shall not
be subject to any Lien other than Liens permitted under Section 6.02.
SECTION 5.12. Mortgaged Property Casualty and Condemnation. (a)
Notwithstanding any other provision of this Agreement or the Security Documents
(but subject to the reinvestment provisions of clause (d)), the Collateral Agent
is authorized, at its option (for the benefit of the Secured Parties), to
collect and receive, to the extent payable to the Borrower or any other Credit
Party, all insurance proceeds, damages, claims and rights of action under any
insurance policies with respect to any casualty or other insured damage
("Casualty") to any portion of any Mortgaged Property (collectively, "Casualty
Proceeds"), unless the amount of the related Casualty Proceeds is less than
$1,000,000 and an Event of Default shall not have occurred and be continuing.
The Borrower agrees to notify the Collateral Agent and the Administrative Agent,
in writing, promptly after the Borrower obtains notice or knowledge of any
Casualty to a Mortgaged Property, which notice shall set forth a description of
such Casualty and the Borrower's good faith estimate of the amount of related
damages. The Borrower agrees, subject to the foregoing limitations, to endorse
and transfer or cause to be endorsed or transferred any Casualty Proceeds
received by it or any other Credit Party to the Collateral Agent.
(b) The Borrower will notify the Collateral Agent and the Administrative
Agent immediately upon obtaining knowledge of the institution of any action or
proceeding for the taking of any Mortgaged Property, or any part thereof or
interest therein, for public or quasi-public use under the power of eminent
domain, by reason of any public improvement or condemnation proceeding, or in
any other manner (a "Condemnation"). No settlement or compromise of any claim
in connection with any such action or proceeding shall be made without the
consent of the Collateral Agent, which consent shall not be unreasonably
withheld. The Collateral Agent is authorized (but subject to the reinvestment
provisions of clause (d)), at its option (for the benefit of the Secured
Parties), to collect and receive all proceeds of any such Condemnation (in each
case, the "Condemnation Proceeds"). The Borrower agrees to execute or cause to
be executed such further assignments of any Condemnation Proceeds as the
Collateral Agent may reasonably require.
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(c) In the event of any Condemnation of the Mortgaged Property, or any
part thereof and subject to the provisions of clause (e), the Collateral Agent
shall apply the Condemnation Proceeds first, in the case of a partial
Condemnation, to the repair or restoration of any integrated structure subject
to such Condemnation or, in the case of a total or "substantially all"
Condemnation, to the location of a replacement property, acquisition of such
replacement property and construction of the replacement structures, and second,
shall apply the remainder of such Condemnation Proceeds (less the reasonable
costs, if any, incurred by the Collateral Agent in the recovery of such
Condemnation Proceeds) to prepay obligations outstanding under this Agreement,
with any remaining Condemnation Proceeds being returned to the Borrower.
(d) In the event of any Casualty of less than 50% of the useable square
footage of the improvements of any Mortgaged Property, the Borrower shall,
subject to the conditions contained in clause (e), restore the Mortgaged
Property to substantially its same condition immediately prior to such Casualty.
In the event of any Casualty of greater than 50% of the useable square footage
of the improvements of any Mortgaged Property and so long as no Default or Event
of Default has occurred and is continuing, the Borrower shall have the option to
either:
(i) restore the Mortgaged Property to a condition substantially
similar to its condition immediately prior to such Casualty and to invest
the balance, if any, of any Casualty Proceeds in equipment or other assets
used in the Borrower's principal lines of business within 6 months after
the receipt thereof, provided that the Borrower, pending such reinvestment,
promptly deposits such excess Casualty Proceeds in a cash collateral
account established with the Collateral Agent for the benefit of the
Secured Parties, or
(ii) direct the Collateral Agent to apply the related Casualty
Proceeds to prepay obligations outstanding under this Agreement, with any
remaining Casualty Proceeds being returned to the Borrower.
Any excess Casualty Proceeds that are not reinvested in the Borrower's principal
lines of business as contemplated above will be applied to prepay the
Obligations.
If required to do so, the Borrower shall make the election contemplated by
the immediately preceding clause by notifying the Collateral Agent and the
Administrative Agent promptly after the later to occur of (A) five days after
the Borrower and its insurance carrier reach a final determination of the amount
of any Casualty Proceeds and (B) 30 days after the occurrence of the Casualty.
If the Borrower shall be required or shall elect to restore the Mortgaged
Property, the insufficiency of any Casualty Proceeds or Condemnation Proceeds to
defray the entire expense of such restoration shall in no way relieve the
Borrower of such obligation so to restore. In the event the Borrower shall be
required to restore or shall notify the Collateral Agent and the Administrative
Agent of its election to restore, the Borrower shall diligently and continuously
prosecute the restoration of the Mortgaged Property to completion. In the event
of a Casualty where the Borrower is required to make the election set forth
above and the Borrower shall fail to notify the Collateral Agent and the
Administrative Agent of its election within the period set forth above or shall
elect not to restore the Mortgaged Property, the Collateral Agent shall (after
being reimbursed for all reasonable costs of recovery of such Casualty Proceeds)
apply such Casualty Proceeds to prepay obligations outstanding under this
Agreement. In addition, upon such prepayment, the Borrower shall be obligated
to place the remaining portion, if any, of the Mortgaged Property in a safe
condition that is otherwise in compliance with the requirements of applicable
Governmental Authorities and the provisions of this Agreement and the applicable
Mortgage.
(e) Except as otherwise specifically provided in this Section, all
Casualty Proceeds and all
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Condemnation Proceeds recovered by the Collateral Agent (A) are to be applied to
the restoration of the applicable Mortgaged Property (less the reasonable cost,
if any, to the Collateral Agent of such recovery and of paying out such
proceeds, including reasonable attorneys' fees (including the allocated costs of
in-house legal counsel), other charges and disbursements and costs allocable to
inspecting the Work (as defined below)) and (B) shall be applied by the
Collateral Agent to the payment of the cost of restoring or replacing the
Mortgaged Property so damaged, destroyed or taken or of the portion or portions
of the Mortgaged Property not so taken (the "Work") and (C) shall be paid out
from time to time to the Borrower as and to the extent the Work (or the location
and acquisition of any replacement of any Mortgaged Property) progresses for the
payment thereof, but subject to each of the following conditions:
(i) the Borrower must promptly commence the restoration process or the
location, acquisition and replacement process (in the case of a total or
"substantially all" Condemnation) in connection with the Mortgaged
Property;
(ii) the Work shall be in the charge of an architect or engineer and
before the Borrower commences any Work, other than temporary work to
protect property or prevent interference with business, the Collateral
Agent shall have received the plans and specifications and the general
contract for the Work from the Borrower. The plans and specifications
shall provide for such Work that, upon completion thereof, the improvements
shall (A) be in compliance with all requirements of applicable Governmental
Authorities such that all representations and warranties of the Borrower
relating to the compliance of such Mortgaged Property with applicable laws,
rules or regulations in this Agreement or the Security Documents will be
correct in all respects and (B) be at least equal in value and general
utility to the improvements that were on such Mortgaged Property (or that
were on the Mortgaged Property that has been replaced, if applicable) prior
to the Casualty or Taking, and in the case of a Taking, subject to the
effect of such Taking;
(iii) except as provided in clause (iv), each request for payment
shall be made on seven days' prior notice to the Collateral Agent and shall
be accompanied by a certificate to be made by such architect or engineer,
stating (A) that all the Work completed has been done in substantial
compliance with the plans and specifications, (B) that the sum requested is
justly required to reimburse the Borrower for payments by the Borrower to,
or is justly due to, the contractor, subcontractors, materialmen, laborers,
engineers, architects or other persons rendering services or materials for
the Work (giving a brief description of such services and materials) and
that, when added to all sums previously paid out by the Collateral Agent,
does not exceed the value of the Work done to the date of such certificate;
(iv) each request for payment in connection with the acquisition of a
replacement Mortgaged Property (in the case of a total or "substantially
all" Condemnation) shall be made on 30 days' prior notice to the Collateral
Agent and, in connection therewith, (A) each such request shall be
accompanied by a copy of the sales contract or other document governing the
acquisition of the replacement property by the Borrower and a certificate
of the Borrower stating that the sum requested represents the sales price
under such contract or document and the related reasonable transaction fees
and expenses (including brokerage fees) and setting forth in sufficient
detail the various components of such requested sum and (B) the Borrower
shall (I) in addition to any other items required to be delivered under
this Section), provide the Administrative Agent and the Collateral Agent
with such opinions, documents, certificates, title insurance policies,
surveys and other insurance policies as they may reasonably request and
(II) take such other actions as the
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Administrative Agent and the Collateral Agent may reasonably deem necessary
or appropriate (including actions with respect to the delivery to the
Collateral Agent of a first priority Mortgage with respect to such real
property for the ratable benefit of the Secured Parties);
(v) each request shall be accompanied by waivers of lien satisfactory
to the Collateral Agent covering that part of the Work for which payment or
reimbursement is being requested and, if required by the Collateral Agent,
by a search prepared by a title company or licensed abstractor or by other
evidence satisfactory to the Collateral Agent, that there has not been
filed with respect to such Mortgaged Property any mechanics' or other lien
or instrument for the retention of title in respect of any part of the Work
not discharged of record or bonded to the reasonable satisfaction of the
Collateral Agent;
(vi) there shall be no Default or Event of Default that has occurred
and is continuing;
(vii) the request for any payment after the Work has been completed
shall be accompanied by a copy of any certificate or certificates required
by law to render occupancy of the improvements being rebuilt, repaired or
restored legal; and
(viii) after commencing the Work, the Borrower shall continue to
perform the Work diligently and in good faith to completion in accordance
with the approved plans and specifications.
Upon completion of the Work and payment in full therefor, the Collateral Agent
will disburse to the Borrower the amount of any Casualty Proceeds or
Condemnation Proceeds then or thereafter in the hands of the Collateral Agent on
account of the Casualty or Taking that necessitated such Work to be applied (x)
to prepay obligations outstanding under this Agreement, with any excess being
returned to the Borrower, or (y) to be reinvested in the Borrower's principal
lines of business within 180 days after the receipt thereof, provided that the
Borrower, pending such reinvestment, promptly deposits such amounts in a cash
collateral account established with the Collateral Agent for the benefit of the
Secured Parties.
(f) Notwithstanding any other provisions of this Section, if the Borrower
shall have elected to replace a Mortgaged Property in connection with a total or
"substantially all" Condemnation as contemplated in clause (c), all Condemnation
Proceeds held by the Collateral Agent in connection therewith shall be applied
to prepay obligations outstanding under this Agreement if (i) the Borrower
notifies the Collateral Agent and the Administrative Agent that it does not
intend to replace the related Mortgaged Property, (ii) a Responsible Officer of
the Borrower shall not have notified the Administrative Agent and the Collateral
Agent in writing that the Borrower has acquired or has entered into a binding
contract to acquire land upon which it will construct the replacement property
within six months after the related Condemnation or (iii) the Borrower shall
have not notified the Administrative Agent and the Collateral Agent in writing
that it has begun construction of the replacement structures within one year
after the related Condemnation.
(g) Nothing in this Section shall prevent the Collateral Agent from
applying at any time all or any part of the Casualty Proceeds or Condemnation
Proceeds to (i) the curing of any Event of Default under this Agreement or (ii)
the payment of any of the Obligations after the occurrence and during the
continuance of an Event of Default.
SECTION 5.13. Compliance with Laws. The Borrower shall, and cause each
Restricted
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Subsidiary to, comply with the requirements of all laws, rules and regulations,
and all judgments, writs, injunctions, decrees and orders of any Governmental
Authority, that are applicable to it or to any of its properties, except where
noncompliance could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 5.14. Interest Rate Protection. Within 90 days after the Closing
Date, the Borrower shall enter into, and for a period of three years thereafter
maintain at all times, in full force and effect, Interest Rate Agreements at
rates, in form and with parties reasonably satisfactory to the Administrative
Agent, the effect of which shall be to set at fixed rates the interest cost to
the Borrower and its Subsidiaries with respect to at least 50% of the sum (at
any time of determination) of the outstanding principal amount of the Loans.
ARTICLE VI
Negative Covenants
SECTION 6.01. Indebtedness. The Borrower will not, and will not permit any
Restricted Subsidiary to, incur, create, assume or permit to exist any
Indebtedness, except:
(a) Indebtedness for borrowed money existing on the date hereof and
set forth in Schedule 6.01(a); provided, however, that such Indebtedness
shall be repaid concurrently with the incurrence of the Borrowing of the
Initial Credit Event hereunder ("Indebtedness to be Paid");
(b) Indebtedness represented by the Notes and by the other Credit
Documents;
(c) Indebtedness (i) of the Borrower to any wholly owned Restricted
Subsidiary or to any Guarantor and (ii) of any Restricted Subsidiary to the
Borrower or any wholly owned Restricted Subsidiary;
(d) Indebtedness represented by the Guarantees of Indebtedness
Incurred pursuant to clause (c);
(e) Indebtedness relating to (i) Capital Lease Obligations,
Sale/Leaseback Transactions and Permitted Purchase Money Liens; provided,
that with respect to Capital Lease Obligations, Indebtedness relating to
Purchase Money Liens and Sale/Leaseback Transactions, either (A) the
Incurrence of such Indebtedness relating to Capital Expenditures,
Sale/Leaseback Transactions and Permitted Purchase Money Liens would be
permitted pursuant to Section 6.09 in the fiscal year in which it is
Incurred, or (B) the aggregate principal amount of such Indebtedness does
not exceed $5,000,000 at any one time and (ii) Restricted Sale/Leaseback
Transactions, if the Net Cash Proceeds thereof are applied in accordance
with Section 2.13(b)
(f) Indebtedness under Hedging Obligations; provided, however, that
such Hedging Obligations are entered into for bona fide hedging purposes of
the Borrower or its Restricted Subsidiaries (as determined in good faith by
the Board of Directors or senior management of the Borrower) and correspond
in terms of notional amount, duration, currencies and interest rates, as
applicable, to Indebtedness of the Borrower or its Restricted Subsidiaries
Incurred without violation of this Agreement or to business transactions of
the Borrower or its Restricted Subsidiaries on customary terms entered into
in the ordinary course of business; and
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(g) Indebtedness in an aggregate principal amount which, together
with all other Indebtedness of the Borrower and the Restricted Subsidiaries
outstanding on the date of such Incurrence (other than Indebtedness
permitted by clauses (a) through (f)) does not exceed $5,000,000 at any one
time outstanding.
SECTION 6.02. Liens. The Borrower will not, and will not permit any
Restricted Subsidiary to, create, incur, assume or permit to exist any Lien on
any property or assets (including stock or other securities of any person,
including any Subsidiary) now owned or hereafter acquired by it or on any income
or revenues or rights in respect of any thereof, except:
(a) Liens on property or assets of the Borrower and its Subsidiaries
existing on the date hereof and set forth in Schedule 6.02(a); provided
that such Liens shall secure only those obligations which they secure on
the date hereof;
(b) any Lien created under the Credit Documents;
(c) any Lien existing on any property or asset prior to the
acquisition thereof by the Borrower or any Subsidiary; provided that (i)
such Lien is not created in contemplation of or in connection with such
acquisition, and (ii) such Lien does not apply to any other property or
assets of the Borrower or any Subsidiary;
(d) Liens for taxes not yet due or which are being contested in
compliance with Section 5.03;
(e) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business and securing
obligations that are not due and payable or which are being contested in
compliance with Section 5.03;
(f) pledges and deposits made in the ordinary course of business in
compliance with workmen's compensation, unemployment insurance and other
social security laws or regulations;
(g) Liens and deposits to secure the performance of bids, contracts
(other than for Indebtedness), leases (other than Capital Lease
Obligations), statutory obligations, surety, indemnity and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
(h) zoning restrictions, easements, rights-of-way, restrictions on use
of real property and other similar encumbrances incurred in the ordinary
course of business which, in the aggregate, are not substantial in amount
and do not materially detract from the value of the property subject
thereto or interfere with the ordinary conduct of the business of the
Borrower or any of its Subsidiaries;
(i) Liens relating to Indebtedness described in Section 6.01(e);
(j) any interest or title of a lessor or any Lien encumbering such
lessor's interest with respect to any lease to the Borrower or any
Subsidiary;
(k) judgment Liens that do not otherwise constitute an Event of
Default; and
(l) unperfected Liens of any vendor on inventory sold by such vendor
securing the unpaid purchase price of such inventory, to the extent such
Liens are stated to be reserved
68
in such vendor's sale documents (and not granted by separate agreement of
the Borrower or any Subsidiary).
SECTION 6.03. Investments, Loans and Advances. The Borrower will not, and
will not permit any Restricted Subsidiary to, make or permit to exist any
Investment in any other person, except:
(a) Investments by the Borrower existing on the date hereof in the
capital stock of the Subsidiaries;
(b) Permitted Investments;
(c) Investments in Unrestricted Subsidiaries not to exceed $20,000 in
the aggregate; and
(d) Investments in Restricted Subsidiaries;
(e) Investments made in connection with Permitted Investments;
(f) Investments which would be permitted as Indebtedness pursuant to
Section 6.01;
(g) loans and advances to employees of the Borrowers and any
Restricted Subsidiary made in the ordinary course of business consistent
with past practices of the Borrower or such Restricted Subsidiary; provided
that the aggregate principal amount of such loans, advances and Employee
Notes payable shall not exceed $1,000,000 at any one time outstanding;
(h) loans and advances to, or Employee Notes received from, employees
of the Borrower or any of its Subsidiaries made or received in connection
with the substantially concurrent purchase of common stock of the Borrower
by such employees; provided that the aggregate principal amount of such
loans, advances and Employee Notes payable shall not exceed $1,000,000 at
any one time outstanding;
(i) Investments by Subsidiaries in the Borrower;
(j) Investments in purchasing cooperatives required of members arising
in the ordinary course of the Borrower's business consistent with past
practice, not to exceed $2,000,000 in the aggregate at any time; and
(k) other Investments in an aggregate amount not in excess of
$500,000 at any one time outstanding.
SECTION 6.04. Mergers, Consolidations, Sales of Assets and Acquisitions.
(a)The Borrower will not merge, consolidate or amalgamate with or into any other
person (other than a merger of a wholly owned Restricted Subsidiary into the
Borrower) unless: (i) the Borrower shall be the surviving person (the
"Surviving Person") or the Surviving Person (if other than the Borrower) formed
by such merger, consolidation or amalgamation shall be a corporation organized
and existing under the laws of the State of Delaware, (ii) the Surviving Person
(if other than the Borrower) shall expressly assume, by an agreement
satisfactory in form and substance to the Agents, executed and delivered to the
Agents by the Surviving Person, the due and punctual performance of all of the
obligations and agreements of the Borrower under this Agreement, (iii)
69
immediately after giving effect to such merger, consolidation or amalgamation,
no Default or Event of Default shall have occurred, and (iv) the Borrower shall
have carried out any acts necessary to ensure that any security interest
purported to be created by any Security Document shall continue to be a valid,
perfected, first priority (except as otherwise expressly provided in this
Agreement or such Security Document) security interest in the applicable
Collateral.
(b) The Borrower will not permit any Restricted Subsidiary to merge into,
consolidate with, or liquidate or dissolve into, any other person, or permit any
other person to merge into, consolidate with, or be liquidated or dissolved
into, such Restricted Subsidiary, except that if at the time thereof and
immediately after giving effect thereto no Event of Default or Default shall
have occurred and be continuing (i) any wholly owned Restricted Subsidiary may
merge into, consolidate with, or be liquidated or dissolved into, the Borrower
in a transaction in which the Borrower is the surviving corporation, (ii) any
wholly owned Restricted Subsidiary may merge into, consolidate with, or
liquidate or dissolve into, any other wholly owned Restricted Subsidiary in a
transaction in which the surviving entity is a wholly owned Restricted
Subsidiary and no person other than the Borrower or a wholly owned Restricted
Subsidiary receives any consideration; provided, however, that the surviving
wholly owned Restricted Subsidiary assumes all of the obligations of the non-
surviving wholly owned Restricted Subsidiary under the Credit Documents.
(c) The Borrower will not, and will not permit any Restricted Subsidiary
to, purchase, lease, or otherwise acquire (in one transaction or a series of
transactions) any Assets or Capital Stock of any person other than in the
ordinary course of the Borrower's business.
(d) The Borrower will not, and will not permit any Restricted Subsidiary
to, enter into any Asset Disposition or Sale/Leaseback Transaction, except for
(i) Unrestricted Asset Dispositions, (ii) Unrestricted Sale/Leaseback
Transactions permitted by Section 6.01(e), (iii) Restricted Asset Dispositions,
the Net Cash Proceeds of which are applied in accordance with Section 2.13(b),
and (iv) Restricted Sale/Leaseback Transactions which are permitted by Section
6.01(e) and the Net Cash Proceeds of which are applied in accordance with
Section 2.13(b).
SECTION 6.05. Dividends and Distributions; Restrictions on Ability of
Subsidiaries to Pay Dividends. The Borrower shall not, and the Borrower shall
not permit any Restricted Subsidiary to,
(a) (1) directly or indirectly, declare or pay any dividend or make any
distribution (whether in cash, securities or other Property) on or with respect
to the Capital Stock of the Borrower or any Restricted Subsidiary (including any
payment in connection with any merger or consolidation with or into the Borrower
or any Restricted Subsidiary) except for
(x) any dividends or distributions payable solely in its Capital Stock
(other than Disqualified Stock), or
(y) any dividend or distribution which is made to the Borrower or a
wholly owned Restricted Subsidiary, or
(2) purchase, repurchase, redeem, retire or otherwise acquire for value any
Capital Stock of the Borrower or any Affiliate of the Borrower held by persons
other than the Borrower or a Restricted Subsidiary or any Securities
exchangeable for or convertible into any such Capital Stock (other than for or
into Capital Stock of the Borrower that is not Disqualified Stock), or
(3) purchase, repurchase, redeem, defease or otherwise acquire or retire
for value, prior
70
to scheduled maturity, scheduled repayment or scheduled sinking fund payment any
Subordinated Obligations (other than the purchase, repurchase or other
acquisition of Subordinated Obligations purchased in anticipation of satisfying
a sinking fund obligation, principal installment or final maturity, in each case
due within one year of the date of acquisition, or the refinancing of any
Subordinated Obligations with Refinancing Indebtedness), or
(4) make any Investment (other than pursuant to Section 6.03) in any person
(any such dividend, distribution, purchase, redemption, repurchase, defeasance,
other acquisition, retirement or Investment being herein referred to as a
"Restricted Payment"); provided, however, that
(i) the Borrower may purchase, repurchase, redeem, legally defease,
acquire or retire for value, shares of, or options to purchase shares of,
its Capital Stock from employees or former employees of the Borrower or any
of its Subsidiaries (or their estates or beneficiaries thereof) (A) in
connection with the Recapitalization in an amount not to exceed $4,020,000
in the aggregate representing the repurchase of outstanding stock options
from employees of the Borrower and its Subsidiaries, and (B) upon death,
disability, retirement or termination pursuant to the terms of the
agreements (including employment agreements) or plans (or amendments
thereto) approved by the board of directors of the Borrower under which
such individuals purchase or sell, or are granted the option to purchase or
sell, shares of such Capital Stock; provided, that (i) the aggregate amount
of such purchases, repurchases, redemptions, defeasances, acquisitions or
retirements under clause (i)(B) shall not exceed $2,500,000 in any fiscal
year and $5,000,000 in the aggregate after the Closing Date, except that
(x) such amounts shall be increased by the aggregate net amount of cash
received by the Borrower after the Closing Date from the sale of such
Capital Stock to, or the exercise of options to purchase such shares by,
employees of the Borrower or any of its Subsidiaries, and (y) the Borrower
may forgive or return Employee Notes without regard to the limitations set
forth in clause (i)(B) and such forgiveness or return shall not be treated
as a Restricted Payment for purpose of determining compliance with clause
(i)(B);
(ii) the Borrower may redeem the Exchangeable Preferred Stock
(including accreted PIK liquidation preference) with Net Cash Proceeds of
an Equity Issuance pursuant to Section 2.13(c)(i) in accordance with its
terms; or
(iii) beginning on the fifth anniversary of the Closing Date, the
Borrower may pay cash dividends on Exchangeable Preferred Stock to the
extent provided by the terms of the Exchangeable Preferred Stock; provided,
however, that after giving effect to such payment, the Debt/Adjusted EBITDA
Ratio on a pro forma basis (taking account of such payment) shall not
exceed 1.5:1.0; or
(b) Permit its subsidiaries to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction on the ability of any such subsidiary to (i) pay any
dividends or make any other distributions on its capital stock or any other
interest or (ii) make or repay any loans or advances to the Borrower of such
subsidiary.
SECTION 6.06. Transactions with Affiliates. Except as set forth in Schedule
6.06, the Borrower shall not, and the Borrower shall not permit any Restricted
Subsidiary to, directly or indirectly, conduct any business or enter into or
suffer to exist any transaction or series of transactions (including the
purchase, sale, transfer, assignment, lease, conveyance or exchange of any
Property or the rendering of any service) with, or for the benefit of, any
Affiliate of the Borrower, other than the payment of Transaction Costs approved
by the Syndication Agent prior to the Closing Date (an "Affiliate Transaction"),
unless the terms of such Affiliate Transaction are
71
(i) set forth in writing, (ii) in the interests of the Borrower or such
Restricted Subsidiary as the case may be, and (iii) no less favorable to the
Borrower or such Restricted Subsidiary, as the case may be, than those that
could be obtained in a comparable arm's length transaction with a person that is
not an Affiliate of the Borrower. Notwithstanding the foregoing limitations, the
Borrower or any Restricted Subsidiary may enter into or permit to exist the
following:
(a) any transaction permitted pursuant to Section 6.03 or Section
6.05;
(b) the issuance of Capital Stock for cash; or
(c) the payment of compensation (including amounts paid pursuant to
employee benefit plans) for the personal services of officers, directors
and employees of the Borrower or any of the Restricted Subsidiaries, so
long as the board of directors of the Borrower in good faith shall have
approved the terms thereof and deemed the services theretofore or
thereafter to be performed for such compensation to be fair consideration
therefor.
SECTION 6.07. Business of Borrower and Subsidiaries. The Borrower will not,
and will not permit any Restricted Subsidiary to, engage at any time in any
business or business activity other than the business currently conducted by it
and business activities reasonably related or complementary thereto.
SECTION 6.08. Use of Proceeds. (a) The proceeds of the Term Loans shall be
used solely to pay a portion of the Conversion Amount in connection with the
Recapitalization, to repay the Indebtedness to be Paid, and pay a portion of the
Transaction Costs.
(b) The proceeds of the Revolving Loans may be used for working capital
and general corporate purposes of the Borrower (including Permitted
Acquisitions, subject to clause (b) of the definition of Permitted Acquisition);
provided, however, that (i) no more than $0 of Revolving Loans may be borrowed
on the Closing Date, and (ii)] the proceeds of any Revolving Loan made pursuant
to Section 2.22(e) shall be applied only to repay Swingline Loans.
(c) The proceeds of the Swingline Loans may be used for working capital
and general corporate purposes of the Borrower; provided, however, that no
Swingline Loans may be borrowed on the Closing Date.
(d) The Letters of Credit may be used for general corporate purposes.
(e) No part of the proceeds of any Loan or any Letter of Credit will be
used, whether directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose that entails a violation of, or that is inconsistent
with, the provisions of the Regulations of the Board, including Regulation T, U
or X.
SECTION 6.09. Capital Expenditures. The Borrower will not, and will not
permit any Restricted Subsidiary to, or make Capital Expenditures if the
aggregate amount thereof would exceed the following limits in the following
fiscal years; provided, that the unused portion of the scheduled limit for any
fiscal year may be carried forward to be used in the following fiscal year.
72
FISCAL YEAR LIMIT
----------- -------------
1998 $2,000,000
1999 $2,000,000
2000 $2,000,000
2001 $2,000,000
2002 $2,500,000
2003 $2,500,000
2004 $2,500,000
2005 $2,500,000
SECTION 6.10. Debt/Adjusted EBITDA Ratio. The Debt/Adjusted EBITDA Ratio
shall not exceed the following amounts as of the ends of fiscal quarters of the
Borrower ending nearest to the following dates:
-------------------------------------------------------------------------
FISCAL QUARTER DEBT/ADJUSTED EBITDA RATIO
ENDING ---------------------------------------------------------
NEAREST TO 1998 1999 2000 2001 2002 2003 2004 2005
-------------------------------------------------------------------------
March 31 4.25 3.50 2.75 2.00 2.00 2.00 2.00
-------------------------------------------------------------------------
June 30 4.25 3.50 2.75 2.00 2.00 2.00 2.00
-------------------------------------------------------------------------
September 30 4.25 4.25 3.50 2.75 2.00 2.00 2.00 2.00
-------------------------------------------------------------------------
December 31 4.25 3.50 2.75 2.00 2.00 2.00 2.00 2.00
-------------------------------------------------------------------------
and thereafter, 2.00.
SECTION 6.11. Minimum EBITDA. The EBITDA for the fiscal year of the
Borrower shall not be less than the following amounts as of the end of the
following fiscal years:
73
FISCAL YEAR ENDING
NEAREST TO
DECEMBER 31, MINIMUM EBITDA
-------------------- ------------------
1998 $23,000,000
1999 $28,500,000
2000 $34,000,000
2001 $40,000,000
2002 $45,000,000
2003 $50,000,000
2004 and thereafter $55,000,000
SECTION 6.12. Interest Coverage Ratio. (a) The ratio of
(i) the Adjusted EBITDA for the period of four fiscal quarters ending
nearest to September 30, 1998 to
(ii) the product of 4 times the Consolidated Interest Expense for the
period of the fiscal quarter ending nearest to September 30, 1998,
shall not be less than 2.25:1.00.
(a) The ratio of
(i) the Adjusted EBITDA for the period of four fiscal quarters ending
nearest to December 31, 1998 to
(ii) the product of 2 times the Consolidated Interest Expense for the
period of two fiscal quarters ending nearest to December 31, 1998,
shall not be less than 2.25:1.00.
(c) The ratio of
(i) the Adjusted EBITDA for the period of four fiscal quarters ending
nearest to March 31, 1999 to
(ii) the product of 1.33 times the Consolidated Interest Expense for
the period of three fiscal quarters ending nearest to March 31, 1999,
shall not be less than 2.25:1.00.
74
(d) The ratio of Adjusted EBITDA to Consolidated Interest Expense for the
period of four fiscal quarters ending nearest to each of the following dates,
shall not be less than the following ratios:
----------------------------------------------------------------------
CONSOLIDATED INTEREST COVERAGE RATIO
FISCAL QUARTER -------------------------------------------------
ENDING NEAREST TO 1999 2000 2001 2002 2003 2004 2005
----------------------------------------------------------------------
March 31 2.75 3.75 4.50 4.50 4.50 4.50
----------------------------------------------------------------------
June 30 2.25 2.75 3.75 4.50 4.50 4.50 4.50
----------------------------------------------------------------------
September 30 2.25 2.75 3.75 4.50 4.50 4.50 4.50
----------------------------------------------------------------------
December 31 2.75 3.75 4.50 4.50 4.50 4.50 4.50
----------------------------------------------------------------------
and thereafter, 4.50.
SECTION 6.13. Fixed Charge Coverage Ratio. The Fixed Charge Coverage
Ratio as of the end of any period of four fiscal quarters shall not be less than
1.2:1.0, beginning with the fiscal quarter ending nearest to March 31, 1999.
SECTION 6.14. Modification of Certain Agreements. Neither the Borrower nor
any Restricted Subsidiary shall consent to any amendment, supplement or other
modification of any of the terms or provisions contained in the Exchangeable
Preferred Stock, or any document or instrument evidencing or applicable to any
Subordinated Obligation, other than any amendment, supplement or other
modification which extends the date or reduces the amount of any required
repayment or redemption.
ARTICLE VII
Defaults and Remedies
SECTION 7.01. Events of Default. In case of the happening of any of the
following events ("Events of Default"):
(a) any representation or warranty made or deemed made in or in
connection with any Credit Document or the borrowings or issuances of
Letters of Credit hereunder, or any representation, warranty, statement or
information contained in any report, certificate, financial statement or
other instrument furnished in connection with or pursuant to any Credit
Document, shall prove to have been false or misleading in any material
respect when so made, deemed made or furnished;
(b) default shall be made in the payment of any principal of any Loan
or the reimbursement with respect to any L/C Disbursement when and as the
same shall become due and payable, whether at the due date thereof or at a
date fixed for prepayment thereof or by acceleration thereof or otherwise;
(c) default shall be made in the payment of any interest on any Loan
or any Fee or L/C Disbursement (after demand for such reimbursement) or any
other amount (other than an amount referred to in clause (b)) due under any
Credit Document, when and as the same shall become due and payable, and
such default shall continue unremedied for a
75
period of three Business Days;
(d) default shall be made in the due observance or performance by the
Borrower or any Restricted Subsidiary of any covenant, condition or
agreement contained in Section 5.01(a), 5.05 or 5.07(b) or in Article VI;
(e) default shall be made in the due observance or performance by the
Borrower or any Restricted Subsidiary of any covenant, condition or
agreement contained in any Credit Document (other than those specified in
clause (b), (c) or (d) ) and such default shall continue unremedied for a
period of 15 days after notice thereof from the Administrative Agent or any
Lender to the Borrower;
(f) the Borrower or any Restricted Subsidiary shall (i) fail to pay
any principal or interest, regardless of amount, due in respect of any
Indebtedness in a principal amount in excess of $2,500,000, when and as the
same shall become due and payable, or (ii) fail to observe or perform any
other term, covenant, condition or agreement contained in any agreement or
instrument evidencing or governing any such Indebtedness if the effect of
any failure referred to in this clause (ii) is to cause, or to permit the
holder or holders of such Indebtedness or a trustee on its or their behalf
(with or without the giving of notice, the lapse of time or both) to cause,
such Indebtedness to become due prior to its stated maturity;
(g) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i)
relief in respect of the Borrower or any Material Subsidiary, or of a
substantial part of the property or assets of the Borrower or a Material
Subsidiary, under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other Federal, state or foreign bankruptcy,
insolvency, receivership or similar law, (ii) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official
for the Borrower or any Material Subsidiary or for a substantial part of
the property or assets of the Borrower or a Material Subsidiary, (iii) the
winding-up or liquidation of the Borrower or any Material Subsidiary; and
such proceeding or petition shall continue undismissed for 60 days or an
order or decree approving or ordering any of the foregoing shall be
entered, or (iv) any similar relief is granted under any foreign laws;
(h) the Borrower or any Material Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking relief under Title 11
of the United States Code, as now constituted or hereafter amended, or any
other Federal, state or foreign bankruptcy, insolvency, receivership or
similar law, (ii) consent to the institution of, or fail to contest in a
timely and appropriate manner, any proceeding or the filing of any petition
described in clause (g), (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official
for the Borrower or any Material Subsidiary or for a substantial part of
the property or assets of the Borrower or any Material Subsidiary, (iv)
file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for the
benefit of creditors, (vi) become unable, admit in writing its inability or
fail generally to pay its debts as they become due or (vii) take any action
for the purpose of effecting any of the foregoing;
(i) one or more judgments for the payment of money in an aggregate
amount in excess of $2,500,000 shall be rendered against the Borrower, any
Restricted Subsidiary or any combination thereof and the same shall remain
undischarged for a period of 30 consecutive days during which execution
shall not be effectively stayed, or any action shall
76
be legally taken (and not stayed) by a judgment creditor to levy upon
assets or properties of the Borrower or any Subsidiary to enforce any such
judgment;
(j) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other such ERISA Events,
could reasonably be expected to result in liability of the Borrower and its
ERISA Affiliates in an aggregate amount exceeding $1,000,000 or requires
payments exceeding $500,000 in any year;
(k) any security interest purported to be created by any Security
Document shall cease to be, or shall be asserted by the Borrower or any
other Credit Party not to be, a valid, perfected, first priority (except as
otherwise expressly provided in this Agreement or such Security Document)
security interest in securities, assets or properties with an aggregate
Fair Market Value of $500,000 or more and purported to be covered thereby,
except to the extent that any such loss of perfection or priority results
from the failure of the Collateral Agent to maintain possession of
certificates representing securities pledged under the Pledge Agreement and
except to the extent that such loss is covered by a lender's title
insurance policy and the related insurer promptly after such loss shall
have acknowledged in writing that such loss is covered by such title
insurance policy;
(l) any Credit Document shall cease, for any reason, to be in full
force and effect or any Credit Party or any of its Subsidiaries shall so
assert in writing; or
(m) there shall have occurred a Change in Control;
then, and in every such event (other than an event with respect to the Borrower
described in clause (g) or (h)), and at any time thereafter during the
continuance of such event, the Administrative Agent may, and at the request of
the Required Lenders shall, by notice to the Borrower, take either or both of
the following actions, at the same or different times: (i) terminate forthwith
the Commitments and (ii) declare the Loans then outstanding to be forthwith due
and payable in whole or in part, whereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and any
unpaid accrued Fees and all other liabilities of the Borrower accrued hereunder
and under any other Credit Document, shall become forthwith due and payable,
without presentment, demand, protest or any other notice of any kind, all of
which are hereby expressly waived by the Borrower, anything contained herein or
in any other Credit Document to the contrary notwithstanding; and in any event
with respect to the Borrower described in clause (g) or (h), the Commitments
shall automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and any unpaid accrued Fees and all other
liabilities of the Borrower accrued hereunder and under any other Credit
Document, shall automatically become due and payable, without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived by the Borrower, anything contained herein or in any other
Credit Document to the contrary notwithstanding.
ARTICLE VII
The Agents
SECTION 8.01. Appointment of Administrative and Collateral Agent. In order
to expedite the transactions contemplated by this Agreement, Citicorp USA, Inc.
is hereby appointed to act as Administrative Agent and Collateral Agent on
behalf of the Lenders and the Issuing Bank, and Salomon Brothers Inc is hereby
appointed to act as Syndication Agent on behalf of the Lenders and the Issuing
Bank (for purposes of this Article VIII, the Administrative Agent, the
77
Collateral Agent and the Syndication Agent are referred to collectively as the
"Agents"). Each of the Lenders and each subsequent holder of any Note by its
acceptance thereof, hereby irrevocably authorizes the Agents to take such
actions on behalf of such Lender or holder or the Issuing Bank and to exercise
such powers as are specifically delegated to the Agents by the terms and
provisions hereof and of the other Credit Documents, together with such actions
and powers as are reasonably incidental thereto. The Administrative Agent is
hereby expressly authorized by the Lenders and the Issuing Bank, without hereby
limiting any implied authority, (a) to receive on behalf of the Lenders and the
Issuing Bank all payments of principal of and interest on the Loans, all
payments in respect of L/C Disbursements and all other amounts due to the
Lenders hereunder, and promptly to distribute to each Lender or the Issuing Bank
its proper share of each payment so received; (b) to give notice on behalf of
each of the Lenders to the Borrower of any Event of Default specified in this
Agreement of which the Administrative Agent has actual knowledge acquired in
connection with its agency hereunder; and (c) to distribute to each Lender
copies of all notices, financial statements and other materials delivered by the
Borrower or any other Credit Party pursuant to this Agreement or the other
Credit Documents as received by the Administrative Agent. Without limiting the
generality of the foregoing, the Agents are hereby expressly authorized to
execute any and all documents (including releases) with respect to the
Collateral and the rights of the Secured Parties with respect thereto, as
contemplated by and in accordance with the provisions of this Agreement and the
Security Documents.
SECTION 8.02. Limitations on Liabilities. Neither the Agents nor any of
their respective directors, officers, employees or agents shall be liable as
such for any action taken or omitted by any of them except for its or his own
gross negligence or wilful misconduct, or be responsible for any statement,
warranty or representation herein or the contents of any document delivered in
connection herewith, or be required to ascertain or to make any inquiry
concerning the performance or observance by the Borrower or any other Credit
Party of any of the terms, conditions, covenants or agreements contained in any
Credit Document. The Agents shall not be responsible to the Lenders or the
holders of the Notes for the due execution, genuineness, validity,
enforceability or effectiveness of this Agreement, the Notes or any other Credit
Documents, instruments or agreements. The Administrative Agent may deem and
treat the payee of any Note as the owner thereof for all purposes hereof until
it shall have received from the payee of such Note notice, given as provided
herein, of the transfer thereof in compliance with Section 9.04. The Agents
shall in all cases be fully protected in acting, or refraining from acting, in
accordance with written instructions signed by the Required Lenders and, except
as otherwise specifically provided herein, such instructions and any action or
inaction pursuant thereto shall be binding on all the Lenders and each
subsequent holder of any Note. Each Agent shall, in the absence of knowledge to
the contrary, be entitled to rely on any instrument or document believed by it
in good faith to be genuine and correct and to have been signed or sent by the
proper person or persons. Neither the Agents nor any of their respective
directors, officers, employees or agents shall have any responsibility to the
Borrower or any other Credit Party on account of the failure of or delay in
performance or breach by any Lender or the Issuing Bank of any of its
obligations hereunder or to any Lender or the Issuing Bank on account of the
failure of or delay in performance or breach by any other Lender or the Issuing
Bank or the Borrower or any other Credit Party of any of their respective
obligations hereunder or under any other Credit Document or in connection
herewith or therewith. Each of the Agents may execute any and all duties
hereunder by or through agents or employees and shall be entitled to rely upon
the advice of legal counsel selected by it with respect to all matters arising
hereunder and shall not be liable for any action taken or suffered in good faith
by it in accordance with the advice of such counsel. Neither Agent shall have
any responsibility for determining the existence of a Default or Event of
Default.
SECTION 8.03. Acting at the Direction of the Required Lenders. The Lenders
hereby acknowledge that neither Agent shall be under any duty to take any
discretionary action permitted
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to be taken by it pursuant to the provisions of this Agreement unless it shall
be requested in writing to do so by the Required Lenders.
SECTION 8.04. Resignation of the Administrative Agent or the Collateral
Agent. Subject to, and effective upon, the appointment and acceptance of a
successor Agent as provided below, either Agent may resign at any time by
notifying the Lenders and the Borrower. Upon any such resignation, the Required
Lenders shall have the right to appoint a successor. If no successor shall have
been so appointed by the Required Lenders (subject, so long as no Event of
Default has occurred and is continuing, to the consent of the Borrower, which
consent shall not be unreasonably withheld or delayed) and shall have accepted
such appointment within 30 days after the retiring Agent gives notice of its
resignation, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent which shall be a bank with an office in New York, New York,
having a combined capital and surplus of at least $500,000,000 or an Affiliate
of any such bank. Upon the acceptance of any appointment as Agent hereunder by
a successor bank, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent and the retiring
Agent shall be discharged from its duties and obligations hereunder. After the
Agent's resignation hereunder, the provisions of this Article and Section 9.05
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as Agent.
SECTION 8.05. Other Transactions. With respect to the Loans made by it
hereunder and the Notes issued to it, each Agent in its individual capacity and
not as Agent shall have the same rights and powers as any other Lender and may
exercise the same as though it were not an Agent, and the Agents and their
Affiliates may accept deposits from, lend money to and generally engage in any
kind of business with the Borrower or any Subsidiary or other Affiliate thereof
as if it were not an Agent.
SECTION 8.06. Reimbursement and Indemnity. Each Lender agrees (a) to
reimburse the Agents, on demand, in the amount of its pro rata share (based on
its Commitments hereunder) of any expenses incurred for the benefit of the
Lenders by the Agents, including counsel fees (including the allocated costs of
in-house legal counsel) and compensation of agents and employees paid for
services rendered on behalf of the Lenders, that shall not have been reimbursed
by the Borrower and (b) to indemnify and hold harmless each Agent and any of its
directors, officers, employees or agents, on demand, in the amount of such pro
rata share, from and against any and all liabilities, taxes, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that may be imposed on, incurred
by or asserted against it in its capacity as Agent or any of them in any way
relating to or arising out of this Agreement or any other Credit Document or any
action taken or omitted by it or any of them under this Agreement or any other
Credit Document, to the extent the same shall not have been reimbursed by the
Borrower or any other Credit Party, provided that no Lender shall be liable to
an Agent or any such other indemnified person for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or wilful misconduct of such Agent or any of its directors, officers,
employees or agents. Each Revolving Credit Lender agrees to reimburse each the
Issuing Bank and its directors, employees and agents, in each case, to the same
extent and subject to the same limitations as provided above for the Agents.
SECTION 8.07. No Reliance. Each Lender acknowledges that it has,
independently and without reliance upon the Agents 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
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upon the Agents or any other Lender and based on such documents and information
as it shall from time to time deem appropriate, continue to make its own
decisions in taking or not taking action under or based upon this Agreement or
any other Credit Document, any related agreement or any document furnished
hereunder or thereunder.
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices. Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by telecopy, as follows:
(a) if to the Borrower to it at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇ (or after notice by the Borrower to the Administrative Agent, at
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ 77477), Attention of Chief Financial
Officer (telecopy: 713-943-8443) with a copy to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co.
Incorporated, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention of ▇▇▇ ▇. ▇▇▇▇▇ (telecopy: 310-444-1870);
(b) if to the Administrative Agent with respect to notices under
Article II, to Citicorp USA, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇▇ ▇▇▇▇▇ (telephone: ▇▇▇-▇▇▇-▇▇▇▇),
(telecopy: 302-894-6120);
(c) if to the Administrative Agent with respect to other notices, to
Citicorp USA, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (telephone: ▇▇▇-▇▇▇-▇▇▇▇), (telecopy:
213-239-1899);
(d) if to the Syndication Agent, to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney, ▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇ Wirdnam, (telecopy:
212-783-2823); and
(d) if to a Lender, to it at its address (or telecopy number) set
forth on Annex 2 or in the Assignment and Acceptance pursuant to which such
Lender shall have become a party hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telecopy or on the date five Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section or in accordance with the
latest unrevoked direction from such party given in accordance with this
Section.
SECTION 9.02. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Borrower herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Credit Document shall be considered to
have been relied upon by the Lenders and the Issuing Bank and shall survive the
making by the Lenders of the Loans, the issuance of Letters of Credit by the
Issuing Bank and the execution and delivery to the Lenders of the Notes
evidencing such Loans, regardless of any investigation made by the Lenders or
the Issuing Bank or on their behalf, and shall continue in full force and effect
as long as the principal of or any accrued interest on any Loan or any Fee or
any other amount payable under this Agreement or any other Credit Document is
outstanding and unpaid or any Letter of Credit is outstanding and so long as the
Commitments have not been terminated. The provisions of Sections 2.14, 2.16,
2.20 and 9.05 shall remain operative and in full
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force and effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the repayment of any of
the Loans, the expiration of the Commitments, the expiration of any Letter of
Credit, the invalidity or unenforceability of any term or provision of this
Agreement or any other Credit Document, or any investigation made by or on
behalf of the Administrative Agent, the Collateral Agent, any Lender or the
Issuing Bank.
SECTION 9.03. Effectiveness; Termination. This Agreement shall become
effective when it shall have been executed by the Borrower and the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective permitted successors and
assigns. This Agreement shall remain in effect and until the Commitments have
been terminated and the principal of and interest on each Loan, all Fees and all
other expenses or amounts payable under any Credit Document shall have been paid
in full and all Letters of Credit have been canceled or have expired and all
amounts drawn thereunder have been reimbursed in full.
SECTION 9.04. Successors and Assigns. (a) Whenever in this Agreement any
of the parties hereto is referred to, such reference shall be deemed to include
the permitted successors and assigns of such party; and all covenants, promises
and agreements by or on behalf of the Borrower, the Administrative Agent, the
Issuing Bank or the Lenders that are contained in this Agreement shall bind and
inure to the benefit of their respective successors and assigns.
(b) Each Lender may assign to one or more assignees all or a portion of
its interests, rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it and the Notes
held by it); provided, however, that
(x) the Borrower and the Administrative Agent and (only with respect
to Revolving Credit Commitments and Revolving Credit Loans) the Swingling
Lender and the Issuing Bank must give their prior written consent to such
assignment (which consent shall not be unreasonably withheld), except in
the case of an assignment to a Lender or an Affiliate of such Lender of any
Loan or Note (when no consent of any party is required), or at any time
when an Event of Default has occurred and is continuing (when no consent of
the Borrower is required), and
(y) the amount of the Commitment of the assigning Lender subject to
each such assignment (determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 (or, if less, the
entire remaining amount of such Lender's Commitment), (ii) each such
assignment shall be of a constant, and not a varying, percentage of all the
assigning Lender's rights and obligations with respect to the Revolving
Credit Commitments and/or the Term Loans, (iii) the parties to each such
assignment shall execute and deliver to the Administrative Agent an
Assignment and Acceptance, together with the Note or Notes subject to such
assignment and a processing and recordation fee of $3,500 and (iv) the
assignee, if it shall not be a Lender, shall deliver to the Administrative
Agent an Administrative Questionnaire. Upon acceptance and recording
pursuant to clause (e) of this Section, from and after the effective date
specified in each Assignment and Acceptance, (A) the assignee thereunder
shall be a party hereto and, to the extent of the interest assigned by such
Assignment and Acceptance, have the rights and obligations of a Lender
under this Agreement and (B) the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Acceptance, be
released from its obligations under
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this Agreement (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to be a party
hereto but shall continue to be entitled to the benefits of Sections 2.14,
2.16, 2.20 and 9.05, as well as to any Fees accrued for its account and not
yet paid).
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim and that
its Tranche A Commitment, Tranche B Commitment and Revolving Credit Commitment,
and the outstanding balances of its Tranche A Term Loans, Tranche B Term Loans
and Revolving Loans, in each case without giving effect to assignments thereof
which have not become effective, are as set forth in such Assignment and
Acceptance, (ii) except as set forth in clause (i), such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement, or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement, any other Credit Document or any other
instrument or document furnished pursuant hereto, or the financial condition of
the Borrower or any Subsidiary or the performance or observance by the Borrower
or any Subsidiary of any of its obligations under this Agreement, any other
Credit Document or any other instrument or document furnished pursuant hereto;
(iii) such assignee represents and warrants that it is legally authorized to
enter into such Assignment and Acceptance; (iv) such assignee confirms that it
has received a copy of this Agreement, together with copies of the most recent
financial statements referred to in Section 3.05(a) or delivered pursuant to
Section 5.04 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (v) such assignee will independently and without
reliance upon the Administrative Agent, the Collateral Agent, such assigning
Lender or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (vi) such assignee appoints
and authorizes the Administrative Agent and the Collateral Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
as are delegated to the Administrative Agent and the Collateral Agent,
respectively, by the terms hereof, together with such powers as are reasonably
incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all the obligations which by the terms of this
Agreement are required to be performed by it as a Lender.
(d) The Administrative Agent, acting for this purpose as an agent of the
Borrower, shall maintain at one of its offices in The City of New York a copy of
each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the "Register"). The entries in the Register shall be
conclusive and the Borrower, the Administrative Agent, the Issuing Bank, the
Collateral Agent and the Lenders may treat each person whose name is recorded in
the Register pursuant to the terms hereof as a Lender hereunder for all purposes
of this Agreement, notwithstanding notice to the contrary. The Register shall
be available for inspection by the Borrower, the Issuing Bank, the Collateral
Agent and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee together with the Note or Notes
subject to such assignment, an Administrative Questionnaire completed in respect
of the assignee (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in clause (b) and, if required, the
written consent of the Borrower, the Administrative Agent and (only with respect
to
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Revolving Credit Commitments and Revolving Credit Loans) the Swingline Lender
and the Issuing Bank to such assignment, the Administrative Agent shall (i)
accept such Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to the Lenders, the
Issuing Bank and the Swingline Lender. No assignment shall be effective unless
it has been recorded in the Register as provided in this clause. Within five
Business Days after receipt of notice, (i) the Borrower, at its own expense,
shall execute and deliver to the Administrative Agent new Notes payable to the
order of such assignee (or, if such assignee shall so request, to such assignee
or registered assigns) representing Loans made pursuant to the Commitments
assumed by it or Term Loans acquired by it, as the case may be, pursuant to such
Assignment and Acceptance and (ii) the assigning Lender, if it shall cease to be
a party hereto as provided in clause (a), shall deliver the Notes held by it to
the Borrower for cancelation. The new Notes delivered to such assignee shall be
dated the date of the original Notes issued hereunder and shall otherwise be in
substantially the form of the appropriate Exhibit or Exhibits thereto.
(f) Each Lender may without the consent of the Borrower, the Swingline
Lender, the Issuing Bank or the Administrative Agent sell participations to one
or more banks or other entities in all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans owing to it and the Notes held by it); provided, however, that (i)
such Lender's obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) the participating banks or other entities
shall be entitled to the benefit of the cost protection provisions contained in
Sections 2.14, 2.16 and 2.20 to the same extent as if they were Lenders and (iv)
the Borrower, the Administrative Agent, the Issuing Bank and the Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement, and such Lender shall
retain the sole right to enforce the obligations of the Borrower relating to the
Loans or L/C Disbursements and to approve any amendment, modification or waiver
of any provision of this Agreement (other than amendments, modifications or
waivers which extend the final scheduled maturity of any Loan, Note or Letter of
Credit (unless such Letter of Credit is not extended beyond the Maturity Date)
in which such participant is participating, or reduce the rate or extend the
time of payment of interest or Fees thereon (except in connection with a waiver
of applicability of any post-default increase in interest amounts) or reduce the
principal amount thereof, or increase the amount of the participant's
participation over the amount thereof then in effect (provided that a waiver of
any Default or of a mandatory reduction in the Commitment shall not constitute a
change in the terms of such participation, and that an increase in any
Commitment or Loan shall be permitted without the consent of any participant if
the participant's participation is not increased thereby), or consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement).
(g) Any Lender or participant may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section,
disclose to the assignee or participant or proposed assignee or participant any
information relating to the Borrower furnished to such Lender by or on behalf of
the Borrower; provided that, prior to any such disclosure of information
designated by the Borrower as confidential, each such assignee or participant or
proposed assignee or participant shall agree (subject to customary exceptions)
to preserve the confidentiality of such confidential information on terms no
less restrictive than those applicable to the Lenders pursuant to Section 9.16.
(h) Any Lender may at any time assign all or any portion of its rights
under this Agreement and the Notes issued to it to a Federal Reserve Bank to
secure extensions of credit by such Federal Reserve Bank to such Lender;
provided that no such assignment shall release a
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Lender from any of its obligations hereunder or substitute any such Bank for
such Lender as a party hereto.
(i) The Borrower shall not assign or delegate any of its rights or duties
hereunder without the prior written consent of the Administrative Agent, the
Issuing Bank and each Lender, and any attempted assignment without such consent
shall be null and void.
SECTION 9.05. Expenses; Indemnity. (a) The Borrower agrees to pay all
out-of-pocket expenses incurred by the Administrative Agent, the Collateral
Agent, the Issuing Bank and the Swingline Lender in connection with the
syndication of the credit facilities provided for herein and the preparation and
administration of this Agreement and the other Credit Documents or in connection
with any amendments, modifications or waivers of the provisions hereof or
thereof (whether or not the transactions hereby or thereby contemplated shall be
consummated) or incurred by the Administrative Agent, the Collateral Agent or
any Lender in connection with the enforcement or protection of its rights in
connection with this Agreement and the other Credit Documents or in connection
with the Loans made or the Notes or Letters of Credit issued hereunder,
including the fees, charges and disbursements of Cravath, Swaine & ▇▇▇▇▇,
counsel for the Administrative Agent and the Collateral Agent, and, in
connection with any such enforcement or protection, the fees, charges and
disbursements of any other counsel for the Administrative Agent, the Collateral
Agent or any Lender (including the allocated costs of in-house legal counsel).
(b) The Borrower agrees to indemnify the Administrative Agent, the
Collateral Agent, each Lender and the Issuing Bank, each Affiliate of any of the
foregoing persons and each of their respective directors, officers, employees
and agents (each such person being called an "Indemnitee") against, and to hold
each Indemnitee harmless from, any and all losses, claims, damages, liabilities
and related expenses, including reasonable counsel fees (including the allocated
costs of in-house legal counsel), charges and disbursements, incurred by or
asserted against any Indemnitee arising out of, in any way connected with, or as
a result of (i) the execution or delivery of this Agreement or any other Credit
Document or any agreement or instrument contemplated thereby, the performance by
the parties thereto of their respective obligations thereunder or the
consummation of the Transactions and the other transactions contemplated
thereby, (ii) the use of the proceeds of the Loans or issuance of Letters of
Credit, (iii) any claim, litigation, investigation or proceeding relating to any
of the foregoing, whether or not any Indemnitee is a party thereto, or (iv) any
actual or alleged presence or Release of Hazardous Materials on any property
owned or operated by the Borrower or any of the Subsidiaries, or any
Environmental Claim related in any way to the Borrower or the Subsidiaries;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or wilful misconduct of such
Indemnitee.
(c) The provisions of this Section shall remain operative and in full
force and effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the repayment of any of
the Loans, the expiration of the Commitments, the expiration of any Letter of
Credit, the invalidity or unenforceability of any term or provision of this
Agreement or any other Credit Document, or any investigation made by or on
behalf of the Administrative Agent, the Collateral Agent, any Lender or the
Issuing Bank. All amounts due under this Section shall be payable on written
demand therefor.
SECTION 9.06. Right of Setoff. If an Event of Default shall have occurred
and be continuing, each Lender is hereby authorized at any time and from time to
time, except to the
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extent prohibited by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender to or for the credit or the
account of the Borrower against any of and all the obligations of the Borrower
now or hereafter existing under this Agreement and other Credit Documents held
by such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement or such other Credit Document and although such
obligations may be unmatured. The rights of each Lender under this Section are
in addition to other rights and remedies (including other rights of setoff)
which such Lender may have.
SECTION 9.07. Applicable Law. THIS AGREEMENT AND THE OTHER CREDIT
DOCUMENTS (OTHER THAN LETTERS OF CREDIT AND AS EXPRESSLY SET FORTH IN OTHER
CREDIT DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK. EACH LETTER OF CREDIT SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF
CREDIT, OR IF NO SUCH LAWS OR RULES ARE DESIGNATED, THE UNIFORM CUSTOMS AND
PRACTICE FOR DOCUMENTARY CREDITS (1993 REVISION), INTERNATIONAL CHAMBER OF
COMMERCE, PUBLICATION NO. 500 (THE "UNIFORM CUSTOMS") AND, AS TO MATTERS NOT
GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF THE STATE OF NEW YORK.
SECTION 9.08. Waivers; Amendment; Replacement Lenders. (a) No failure or
delay of the Administrative Agent, the Collateral Agent, any Lender or the
Issuing Bank in exercising any power or right hereunder or under any other
Credit Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The
rights and remedies of the Administrative Agent, the Collateral Agent, the
Issuing Bank and the Lenders hereunder and under the other Credit Documents are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of this Agreement or any other
Credit Document or consent to any departure by the Borrower or any other Credit
Party therefrom shall in any event be effective unless the same shall be
permitted by clause (b), and then such waiver or consent shall be effective only
in the specific instance and for the purpose for which given. No notice or
demand on the Borrower in any case shall entitle the Borrower to any other or
further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to an agreement or agreements in writing entered
into by the Borrower and the Required Lenders; provided, however, that no such
agreement shall (i) decrease the principal amount of, or extend the date of any
scheduled payment or mandatory prepayment of principal of, or the date of any
payment of any interest on, any Loan or any date for reimbursement of an L/C
Disbursement, or waive or excuse any such payment or any part thereof, or
decrease the rate of interest on any Loan or L/C Disbursement, without the prior
written consent of each Lender affected thereby, (ii) change or extend the
Commitment or decrease or extend the date for payment of the Commitment Fees of
any Lender without the prior written consent of each Lender affected thereby,
(iii) amend or modify the provisions of Section 2.17 or 9.04(i), the provisions
of this Section, the definition of the term "Required Lenders" or release any
Guarantor or all or any substantial part of the Collateral, without the prior
written consent of each Lender, (iv) change the allocation between Tranche A
Term Loans and Tranche B Term Loans of any prepayment pursuant to Section 2.12
or 2.13 without the prior written consent of (A) Lenders holding Tranche A Term
Loans representing more than 50% of the aggregate outstanding principal amount
of the Tranche A Term Loans and (B) Lenders holding Tranche B Term Loans
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representing more than 50% of the aggregate outstanding principal amount of the
Tranche B Term Loans, (v) amend Section 2.13(j) without the prior written
consent of Lenders holding Tranche B Term Loans representing more than 50% of
the aggregate outstanding principal amount of the Tranche B Term Loans; (vi)
waive or amend any condition precedent to any Credit Event without the prior
written consent of each Lender with a Commitment relating to such Credit Event;
(vii) amend, modify or otherwise affect the rights or duties of the
Administrative Agent, the Collateral Agent, the Issuing Bank or the Swingline
Lender hereunder or under any other Loan Document without the prior written
consent of the Administrative Agent, the Collateral Agent, the Issuing Bank or
the Swingline Lender, as the case may be. Each Lender and each holder of a Note
shall be bound by any waiver, amendment or modification authorized by this
Section regardless of whether its Note shall have been marked to make reference
thereto, and any consent by any Lender or holder of a Note pursuant to this
Section shall bind any person subsequently acquiring a Note from it, whether or
not such Note shall have been so marked.
(c) If a Lender refuses to consent to a proposed change, waiver, discharge
or termination with respect to this Agreement which requires the consent of all
of the Lenders and has been approved by the Required Lenders, the Borrower shall
have the right for a 60 day period following such refusal, to replace such
Lender (a "Replaced Lender") with one or more assignees permitted pursuant to
Section 9.04 (collectively, the "Replacement Lender") acceptable to
Administrative Agent and identified by the Borrower, provided that
(i) at the time of any replacement pursuant to this clause, the
Replacement Lender and Replaced Lender shall enter into one or more
Assignment and Acceptances pursuant to Section 9.04(b) (and with all fees
payable pursuant to Section 9.04(b) to be paid by the Replacement Lender)
pursuant to which the Replacement Lender shall acquire all of the
outstanding Loans and Commitments (including principal, interest and
Commitment Fees) of, and in each case participations in Letters of Credit
and Swingline Loans by, the Replaced Lender,
(ii) the Replacement Lender shall pay to the Replaced Lender in
respect thereof an amount equal to the sum of (A) an amount equal to the
principal of, and all unpaid interest on, all outstanding Loans of the
Replaced Lender, and all unpaid Commitment Fees payable to the Replaced
Lender, (B) an amount equal to all unpaid drawings with respect to Letters
of Credit that have been funded by (and not reimbursed to) such Replaced
Lender, together with all unpaid interest thereon, (C) an amount equal to
such Replaced Lender's funded participations in any Swingline Loans, and
(D) an amount equal to all unpaid fees owing to the Replaced Lender with
respect thereto,
(iii) the Replacement Lender shall pay to the appropriate Issuing Bank
an amount equal to such Replaced Lender's Applicable Percentage of any
unpaid drawings with respect to Letters of Credit issued by it to the
extent such amount was not theretofore funded by such Replaced Lender, and
(iv) the Replacement Lender shall pay to the Swingline Lender an
amount equal to the unfunded amount of any participation of the Replaced
Lender in a Swingline Loan which is required to be funded; and
(v) all obligations of the Borrower owing to the Replaced Lender other
than principal, interest and Commitment Fees, shall be paid in full to such
Replaced Lender concurrently with such replacement.
Upon the execution of the respective Assignment and Acceptance, recordation of
such assignment
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in the Register by Administrative Agent, and the payment of foregoing amounts,
the Replacement Lender shall become a Lender hereunder and the Replaced Lender
shall cease to constitute a Lender hereunder except with respect to
indemnification provisions under this Agreement which by the terms of this
Agreement survive the termination of this Agreement, which indemnification
provisions shall survive as to such Replaced Lender. Notwithstanding anything to
the contrary contained above, no Issuing Bank may be replaced hereunder at any
time while it has Letters of Credit outstanding hereunder unless arrangements
satisfactory to such Issuing Bank (including the furnishing of a standby letter
of credit in form and substance, and issued by an issuer satisfactory to such
Issuing Bank or the furnishing of cash collateral in amounts and pursuant to
arrangements satisfactory to such Issuing Bank) have been made with respect to
such outstanding Letters of Credit.
SECTION 9.09. Interest Rate Limitation. Notwithstanding anything herein or
in the Notes to the contrary, if at any time the interest rate applicable to any
Loan or participation in any L/C Disbursement, together with all fees, charges
and other amounts which are treated as interest on such Loan or participation in
such L/C Disbursement under applicable law (collectively the "Charges"), shall
exceed the maximum lawful rate (the "Maximum Rate") which may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan or
participation in accordance with applicable law, the rate of interest payable in
respect of such Loan or participation hereunder or under the Note held by such
Lender, together with all Charges payable in respect thereof, shall be limited
to the Maximum Rate and, to the extent lawful, the interest and Charges that
would have been payable in respect of such Loan or participation but were not
payable as a result of the operation of this Section shall be cumulated and the
interest and Charges payable to such Lender in respect of other Loans or
participations or periods shall be increased (but not above the Maximum Rate
therefor) until such cumulated amount, together with interest thereon at the
Federal Funds Effective Rate to the date of repayment, shall have been received
by such Lender.
SECTION 9.10. Entire Agreement. This Agreement, the Fee Letter and the
other Credit Documents constitute the entire contract between the parties
relative to the subject matter hereof. Any other previous agreement among the
parties with respect to the subject matter hereof is superseded by this
Agreement and the other Credit Documents. Nothing in this Agreement or in the
other Credit Documents, expressed or implied, is intended to confer upon any
party other than the parties hereto and thereto any rights, remedies,
obligations or liabilities under or by reason of this Agreement or the other
Credit Documents.
SECTION 9.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS.
EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS, AS APPLICABLE, BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.12. Severability. In the event any one or more of the provisions
contained in this Agreement or in any other Credit Document should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein
87
and therein shall not in any way be affected or impaired thereby (it being
understood that the invalidity of a particular provision in a particular
jurisdiction shall not in and of itself affect the validity of such provision in
any other jurisdiction). The parties shall endeavor in good-faith negotiations
to replace the invalid, illegal or unenforceable provisions with valid
provisions the economic effect of which comes as close as possible to that of
the invalid, illegal or unenforceable provisions.
SECTION 9.13. Counterparts. This Agreement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall
constitute an original but all of which when taken together shall constitute a
single contract, and shall become effective as provided in Section 9.03.
Delivery of an executed signature page to this Agreement by telecopy
transmission shall be as effective as delivery of a manually signed counterpart
of this Agreement.
SECTION 9.14. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
SECTION 9.15. Jurisdiction; Consent to Service of Process. (a) The
Borrower hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Credit Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that the
Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender may
otherwise have to bring any action or proceeding relating to this Agreement or
the other Credit Documents against the Borrower or its respective properties in
the courts of any jurisdiction.
(b) The Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or the other Credit Documents in
any New York State or Federal court. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 9.16. Confidentiality. The Administrative Agent, the Collateral
Agent, the Issuing Bank and each of the Lenders agrees to keep confidential (and
to use its best efforts to cause its respective agents and representatives to
keep confidential) in accordance with its customary practices the Information
(as defined below) and all copies thereof, extracts therefrom and analyses or
other materials based thereon, except that the Administrative Agent, the
Collateral Agent, the Issuing Bank or any Lender shall be permitted to disclose
Information (a) to such of its respective officers, directors, employees,
agents, affiliates and representatives as need to know such Information, (b) to
the extent requested by any regulatory authority, (c) to the extent otherwise
required by applicable laws and regulations or by any subpoena or similar legal
process,
88
(d) in connection with any suit, action or proceeding relating to the
enforcement of its rights hereunder or under the other Credit Documents, (e) to
assignees or participants and prospective assignees or participants who agree to
be bound by the terms of this Section, or (f) to the extent such Information (i)
becomes publicly available other than as a result of a breach of this Section or
(ii) becomes available to the Administrative Agent, the Issuing Bank, any Lender
or the Collateral Agent on a nonconfidential basis from a source other than the
Borrower. For the purposes of this Section, "Information" means all financial
statements, certificates, reports, agreements and information (including all
analyses, compilations and studies prepared by the Administrative Agent, the
Collateral Agent, the Issuing Bank or any Lender based on any of the foregoing)
that are received from the Borrower and related to the Borrower, any shareholder
of the Borrower or any employee, customer or supplier of the Borrower, other
than any of the foregoing that were available to the Administrative Agent, the
Collateral Agent, the Issuing Bank or any Lender on a nonconfidential basis
prior to its disclosure thereto by the Borrower, and which are in the case of
Information provided after the date hereof, clearly identified at the time of
delivery as confidential. The provisions of this Section shall remain operative
and in full force and effect until the second anniversary of the termination of
this Agreement.
89
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.
CENTURY MAINTENANCE SUPPLY, INC.
by
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
CITICORP USA, INC., as Administrative Agent,
Collateral Agent, Swingline Lender and Issuing
Bank,
by
/s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Attorney-in-Fact
SALOMON BROTHERS INC, as Arranger, Advisor and
Syndication Agent,
by
/s/ ▇. ▇. ▇▇▇▇▇
---------------------------------------
Name: ▇. ▇. ▇▇▇▇▇
Title: MA
90
LENDERS:
SALOMON BROTHERS HOLDING COMPANY INC,
by
/s/ ▇. ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇. ▇. ▇▇▇▇▇
Title: MA
CITICORP USA, INC.,
by
/s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Name: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Attorney-in-Fact
FLOATING RATE PORTFOLIO,
by INVESCO SENIOR SECURED MANAGEMENT INC.,
as Attorney-in-Fact
by
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Authorized Signatory
FIRST UNION NATIONAL BANK,
by
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
ING HIGH INCOME PRINCIPAL PRESERVATION FUND
HOLDINGS, LDC
by ING Capital Advisors, Inc.,
as Investment Advisor
by
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President & Portfolio
Manager
ROYAL BANK OF CANADA,
by
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Manager
KZH - SOLEIL - 2 CORPORATION,
by
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Agent
TRANSAMERICA LIFE INSURANCE AND ANNUITY COMPANY,
by
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Investment Officer
▇▇▇▇▇ FARGO BANK,
by
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President