Exhibit 10.51
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CREDIT AGREEMENT
DATED AS OF OCTOBER 15, 1998
AMONG
ENVIRONMENTAL SYSTEMS PRODUCTS HOLDINGS INC.,
as Borrower,
ENVIROSYSTEMS CORP.,
as Parent,
THE LENDERS LISTED HEREIN,
as Lenders,
CREDIT SUISSE FIRST BOSTON,
as Administrative Agent and Collateral Agent,
DLJ CAPITAL FUNDING, INC.,
as Syndication Agent,
AND
CREDIT SUISSE FIRST BOSTON
AND
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ SECURITIES CORPORATION,
as Arrangers
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS.........................................................1
1.1 Certain Defined Terms..................................................1
1.2 Accounting Terms; Utilization of GAAP for Purposes of
Calculations Under Agreement..........................................42
1.3 Other Definitional Provisions.........................................42
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS.........................42
2.1 Commitments; Loans....................................................42
2.2 Interest on the Loans.................................................49
2.3 Fees..................................................................52
2.4 Repayments, Prepayments and Reductions in Commitments;
General Provisions Regarding Payments.................................53
2.5 Use of Proceeds.......................................................63
2.6 Special Provisions Governing Eurodollar Rate Loans....................63
2.7 Increased Costs; Taxes; Capital Adequacy..............................65
2.8 Obligation of Lenders and Issuing Bank to Mitigate....................69
SECTION 3. LETTERS OF CREDIT..................................................70
3.1 Issuance of Letters of Credit and Lenders' Purchase of
Participations Therein ...............................................70
3.2 Letter of Credit Fees.................................................72
3.3 Drawings and Payments and Reimbursement of Amounts Drawn or
Paid Under Letters of Credit..........................................73
3.4 Obligations Absolute..................................................75
3.5 Indemnification; Nature of Issuing Lender's Duties....................76
3.6 Increased Costs and Taxes Relating to Letters of Credit...............77
SECTION 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT..........................78
4.1 Conditions to Term Loans; Initial Revolving Loans.....................78
4.2 Conditions to All Loans...............................................85
4.3 Conditions to Letters of Credit.......................................86
SECTION 5. REPRESENTATIONS AND WARRANTIES.....................................87
5.1 Organization, Powers, Qualification, Good Standing,
Business and Subsidiaries ............................................87
5.2 Authorization of Borrowing, etc.......................................88
5.3 Financial Condition; Projections......................................89
5.4 No Material Adverse Change; No Restricted Payments....................90
5.5 Title to Properties; Liens; Real Property; Intellectual Property......90
5.6 Litigation; Adverse Facts.............................................91
5.7 Payment of Taxes......................................................92
5.8 Performance of Agreements; Materially Adverse Agreements..............92
5.9 Governmental Regulation...............................................92
5.10 Securities Activities.................................................92
5.11 Employee Benefit Plans................................................93
5.12 Certain Fees..........................................................93
5.13 Environmental Matters.................................................93
5.14 Employee Matters......................................................95
5.15 Solvency..............................................................95
5.16 Transaction Documents.................................................95
5.17 Disclosure............................................................95
5.18 Subordination of Subordinated Indebtedness............................96
5.19 Year 2000 Problems....................................................96
5.20 Tax Classification....................................................97
5.21 Parent................................................................97
SECTION 6. AFFIRMATIVE COVENANTS..............................................97
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6.1 Financial Statements and Other Reports................................97
6.2 Corporate Existence..................................................103
6.3 Payment of Taxes and Claims; Tax Consolidation.......................103
6.4 Maintenance of Properties; Insurance.................................104
6.5 Inspection; Lender Meeting...........................................104
6.6 Compliance with Laws, etc............................................104
6.7 Environmental Disclosure and Inspection..............................104
6.8 The Company's Remedial Action Regarding Hazardous Materials..........106
6.9 Execution of Guaranty and Collateral Documents by Future
Subsidiaries ........................................................106
6.10 Interest Rate Protection.............................................107
6.11 Further Assurances...................................................108
6.12 Conforming Leasehold Interests; Matters Relating to Additional
and Closing Real Property Collateral.................................108
6.13 Year 2000 Problems...................................................112
6.14 ENR Transfer.........................................................112
SECTION 7. NEGATIVE COVENANTS................................................112
7.1 Indebtedness.........................................................112
7.2 Liens and Related Matters............................................114
7.3 Investments; Joint Ventures..........................................115
7.4 Contingent Obligations...............................................117
7.5 Restricted Payments..................................................118
7.6 Financial Covenants..................................................119
7.7 Restriction on Fundamental Changes; Asset Sales......................122
7.8 Sales and Lease-Backs................................................123
7.9 Sale or Discount of Receivables......................................123
7.10 Transactions with Shareholders and Affiliates........................124
7.11 Ownership of Subsidiary Stock........................................124
7.12 Conduct of Business..................................................125
7.13 Amendments or Waivers of Certain Agreements..........................125
7.14 Fiscal Year..........................................................126
7.15 Parent Restrictions..................................................126
7.16 Corporate Separateness...............................................126
7.17 Loaner Inventory.....................................................127
SECTION 8. EVENTS OF DEFAULT.................................................127
8.1 Failure to Make Payments When Due....................................127
8.2 Default in Other Agreements..........................................127
8.3 Breach of Certain Covenants..........................................128
8.4 Breach of Warranty...................................................128
8.5 Other Defaults Under Loan Documents..................................128
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc.................128
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc...................129
8.8 Judgments and Attachments............................................129
8.9 Dissolution..........................................................129
8.10 Employee Benefit Plans...............................................129
8.11 Change in Control....................................................130
8.12 Invalidity of Guaranties.............................................130
8.13 Failure of Security..................................................130
SECTION 9. AGENTS............................................................132
9.1 Appointment..........................................................132
9.2 Powers; General Immunity.............................................133
9.3 Representations and Warranties; No Responsibility For
Appraisal of Creditworthiness .......................................134
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9.4 Right to Indemnity...................................................135
9.5 Successor Administrative Agent and Swing Line Lender.................135
9.6 Collateral Documents; Successor Collateral Agent.....................136
SECTION 10. MISCELLANEOUS....................................................136
10.1 Assignments and Participations in Loans, Letters of Credit...........136
10.2 Expenses.............................................................139
10.3 Indemnity............................................................139
10.4 Set-Off; Security Interest in Deposit Accounts.......................140
10.5 Ratable Sharing......................................................140
10.6 Amendments and Waivers...............................................141
10.7 Independence of Covenants............................................143
10.8 Notices..............................................................143
10.9 Survival of Representations, Warranties and Agreements...............143
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative................143
10.11 Marshalling; Payments Set Aside......................................144
10.12 Severability.........................................................144
10.13 Obligations Several; Independent Nature of the Lenders' Rights.......144
10.14 Maximum Amount.......................................................144
10.15 Headings.............................................................145
10.16 Applicable Law.......................................................145
10.17 Successors and Assigns...............................................145
10.18 Consent to Jurisdiction and Service of Process.......................145
10.19 Waiver of Jury Trial.................................................146
10.20 Confidentiality......................................................147
10.21 Counterparts; Effectiveness..........................................147
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EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
IV-A FORM OF TERM A NOTE
IV-B FORM OF TERM B NOTE
V-A FORM OF REVOLVING NOTE
V-B FORM OF SWING LINE NOTE
VI FORM OF SUBSIDIARY AND PARENT GUARANTY
VII FORM OF PLEDGE AGREEMENT
VIII FORM OF SECURITY AGREEMENT
IX FORM OF COMPLIANCE CERTIFICATE
X-A&B FORMS OF OPINIONS OF COUNSEL TO LOAN PARTIES
XI FORM OF OPINION OF SASMF
XII FORM OF ASSIGNMENT AGREEMENT
XIII FORM OF COLLATERAL ACCOUNT AGREEMENT
XIV FORM OF CERTIFICATE OF NON-BANK STATUS
XV FORM OF MORTGAGE
XVI FORM OF FINANCIAL CONDITION CERTIFICATE
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SCHEDULES
1.1 SCHEDULED EBITDA AND STATE CONTRACT ADJUSTMENTS
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
4.1E CERTAIN NECESSARY CONSENTS
4.1G CLOSING DATE MORTGAGED PROPERTIES
4.1R CORPORATE STRUCTURE; CAPITAL STRUCTURE; OWNERSHIP
5.1 SUBSIDIARIES OF THE COMPANY
5.5B CERTAIN REAL PROPERTY MATTERS
5.5C CERTAIN INTELLECTUAL PROPERTY MATTERS
5.8 STATE CONTRACTS
5.11 CERTAIN EMPLOYEE BENEFIT PLANS
7.1 CERTAIN EXISTING INDEBTEDNESS
7.2A CERTAIN EXISTING LIENS
7.4 CERTAIN EXISTING CONTINGENT OBLIGATIONS
7.7 CERTAIN ASSET SALES
10.8 ADDRESSES FOR NOTICES
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ENVIRONMENTAL SYSTEMS PRODUCTS HOLDINGS INC.
CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of October 15, 1998 and entered
into by and among ENVIRONMENTAL SYSTEMS PRODUCTS HOLDINGS INC., a Delaware
corporation (the "Company"), ENVIROSYSTEMS CORP., a Delaware corporation (the
"Parent"), THE BANKS, FINANCIAL INSTITUTIONS AND OTHER ENTITIES LISTED ON THE
SIGNATURE PAGES HEREOF (each individually referred to herein as a "Lender" and
collectively as "Lenders"), CREDIT SUISSE FIRST BOSTON ("CSFB"), as
administrative agent for the Lenders (in such capacity, the "Administrative
Agent") and as collateral agent for the Administrative Agent and the Lenders (in
such capacity, the "Collateral Agent"), DLJ CAPITAL FUNDING, INC. ("DLJ
Capital"), as syndication agent (in such capacity, the "Syndication Agent"), and
CSFB and ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ SECURITIES CORPORATION ("DLJ Securities"),
as arrangers (collectively, in such capacity, the "Arrangers"),
R E C I T A L S
WHEREAS, the Company desires that the Lenders extend certain credit
facilities to the Company hereunder, the proceeds of which, together with cash
on hand and the proceeds of the Equity Contribution (capitalized terms used in
these Recitals without definition shall have the respective meanings assigned in
subsection 1.1 hereof), the Senior Discount Notes and the Senior Subordinated
Notes, will be used to: (a) finance the purchase price for the Shares payable in
connection with the Shares Acquisition and the ENR Merger, (b) repay the
Existing Debt, (c) pay Transaction Costs, and (d) provide financing for working
capital and other general corporate purposes for the Company and its
Subsidiaries, all subject to the terms and conditions contained herein; and
WHEREAS, the Lenders are willing to make such credit facilities
available upon and subject to the terms and conditions contained herein;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto hereby agree as
follows:
SECTION 1.
DEFINITIONS
1.1 Certain Defined Terms.
The following terms used in this Agreement shall have the following
meanings:
"Additional Mortgage" has the meaning assigned to that term in
subsection 6.12C.
"Additional Mortgaged Property" has the meaning assigned to that
term in subsection 6.12C.
"Administrative Agent" has the meaning assigned to that term in the
Preamble to this
Agreement and shall include any successor Administrative Agent appointed
pursuant to subsection 9.5.
"Affected Class" has the meaning assigned to that term in subsection
10.6A.
"Affected Lender" has the meaning assigned to that term in
subsection 2.6C.
"Affected Loans" has the meaning assigned to that term in subsection
2.6C.
"Affiliate" means, as applied to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control
with, that Person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling",
"controlled by" and "under common control with"), as applied to any
Person, means either (a) the power, directly or indirectly, to vote 5% or
more of the securities having ordinary voting power for the election of
directors (or persons performing similar functions) of such Person, or (b)
the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of that Person, whether
through the ownership of voting securities or by contract or otherwise.
"Agents" means, collectively, the Administrative Agent, the
Syndication Agent, the Collateral Agent and the Arrangers.
"Agreement" means this Credit Agreement dated as of October 15,
1998, as it may be amended, restated, supplemented or otherwise modified
from time to time.
"AIP" means those investors in the Alchemy Investment Plan (on the
Closing Date after giving effect to the Transactions) advised by Alchemy.
"Alchemy" means Alchemy Partners, an English partnership.
"Anniversary" means a date that is an anniversary of the Closing
Date.
"Applicable Base Rate Margin" means a percentage per annum
determined by reference to the Leverage Ratio as set forth below:
Leverage Ratio Applicable Applicable
(applicable only after Base Rate Base Rate
the First Adjustment Margin for Margin for
Date) Term A Term B
Loans and Loans
Revolving
Loans
-----------------------------------------------
Closing Date to the 2.25% 3.00%
First Adjustment Date
-----------------------------------------------
>= 4.25x 2.50% 3.00%
-----------------------------------------------
>= 3.75x and < 4.25x 2.25% 3.00%
-----------------------------------------------
>= 3.25x and < 3.75x 2.00% 3.00%
>= 2.75x and < 3.25x 1.75% 3.00%
2
Leverage Ratio Applicable Applicable
(applicable only after Base Rate Base Rate
the First Adjustment Margin for Margin for
Date) Term A Term B
Loans and Loans
Revolving
Loans
-----------------------------------------------
>= 2.25x and < 2.75x 1.50% 3.00%
-----------------------------------------------
< 2.25x 1.25% 3.00%
-----------------------------------------------
-----------------------------------------------
After the First Adjustment Date, the Applicable Base Rate Margin shall be
determined by reference to the Leverage Ratio as of the end of the most
recently ended Fiscal Quarter for which the financial statements required
by subsection 6.1(ii) (or subsection 6.1(iii), if such Fiscal Quarter is
the last Fiscal Quarter of a Fiscal Year) have been delivered in
accordance therewith; provided, however, that (x) no change in the
Applicable Base Rate Margin shall be effective until the date on which the
Administrative Agent receives such financial statements and an Officer's
Certificate calculating such Leverage Ratio in reasonable detail, and (y)
the Applicable Base Rate Margin shall be 2.50% in the case of Term A Loans
and Revolving Loans for so long (but only for so long) as an Event of
Default has occurred and is continuing or the Company has not submitted to
the Administrative Agent the information described in clause (x) of this
proviso as and when required under subsection 6.1(ii) or (iii), as
applicable.
"Applicable Commitment Fee Percentage" means, (i) from the Closing
Date until the First Adjustment Date, 0.50% per annum, and (ii)
thereafter, a percentage per annum determined by reference to the Leverage
Ratio as set forth below:
Applicable Commitment Fee
Leverage Ratio Percentage
------------------------------------------------
>= 2.75x .50%
------------------------------------------------
< 2.75x .375%
-----------------------------------------------
After the First Adjustment Date, the Applicable Commitment Fee Percentage
shall be determined by reference to the Leverage Ratio as of the end of
the most recently ended Fiscal Quarter for which the financial statements
required by subsection 6.1(ii) (subsection 6.1(iii), if such Fiscal
Quarter is the last of a Fiscal Year) have been delivered in accordance
therewith; provided, however, that (x) no change in the Applicable
Commitment Fee Percentage shall be effective until the date on which the
Administrative Agent receives such financial statements and an Officer's
Certificate calculating such Leverage Ratio in reasonable detail, and (y)
the Applicable Commitment Fee Percentage shall be .50% for so long (but
only for so long) as an Event of Default has occurred and is continuing or
the Company has not submitted to the Administrative Agent the information
described in clause (x) of this proviso as and when required under
subsection 6.1(ii) or (iii), as applicable.
"Applicable Eurodollar Rate Margin" means a percentage per annum
determined by reference to the Leverage Ratio as set forth below:
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Leverage Ratio Applicable Applicable
(applicable only after Eurodollar Eurodollar
the First Adjustment Rate Margin Rate Margin
Date) for Term A for Term B
Loans and Loans
Revolving
Loans
-------------------------------------------------
Closing Date to the 3.25% 4.00%
First Adjustment Date
-------------------------------------------------
>= 4.25x 3.50% 4.00%
-------------------------------------------------
>= 3.75x and < 4.25x 3.25% 4.00%
-------------------------------------------------
>= 3.25x and < 3.75x 3.00% 4.00%
-------------------------------------------------
>= 2.75x and < 3.25x 2.75% 4.00%
-------------------------------------------------
>= 2.25x and < 2.75x 2.50% 4.00%
-------------------------------------------------
< 2.25x 2.25% 4.00%
After the First Adjustment Date, the Applicable Eurodollar Rate Margin
shall be determined by reference to the Leverage Ratio as of the end of
the most recently ended Fiscal Quarter for which the financial statements
required by subsection 6.1(ii) (subsection 6.1(iii), if such Fiscal
Quarter is the last of a Fiscal Year) have been delivered in accordance
therewith; provided, however, that (x) no change in the Applicable
Eurodollar Rate Margin shall be effective until the date on which the
Administrative Agent receives such financial statements and an Officer's
Certificate calculating such Leverage Ratio in reasonable detail, and (y)
the Applicable Eurodollar Rate Margin shall be 3.50% in the case of Term A
Loans and Revolving Loans for so long (but only for so long) as an Event
of Default has occurred and is continuing or the Company has not submitted
to the Administrative Agent the information described in clause (x) of
this proviso as and when required under subsection 6.1(ii) or (iii), as
applicable.
"Applicable Laws" means, collectively, all statutes, laws, rules,
regulations, ordinances, decisions, writs, judgments, decrees, and
injunctions of any Governmental Authority affecting the Company or any of
its Subsidiaries or any Collateral or any of their other assets, whether
now or hereafter enacted and in force, and all Governmental Authorizations
relating thereto, and all covenants, conditions, and restrictions
contained in any instruments, either of record or known to the Company or
any of its Subsidiaries, at any time in force affecting any Real Property
Asset or any part thereof, including any such covenants, conditions and
restrictions which may (i) require material improvements, repairs or
alterations in or to such Real Property Asset or any part thereof or (ii)
in any material way limit the use and enjoyment of such Real Property
Asset as used or intended to be used by the Company and its Subsidiaries.
"Approved Fund" with respect to any Lender that is a fund that
invests in bank loans, any other fund or trust or entity that invests in
bank loans and is advised or managed by the same investment advisor as
such Lender or by an Affiliate of such investment advisor.
"Arrangers" has the meaning assigned to that term in the Preamble to
this Agreement.
"Asset Sale" means the sale, lease, sale and leaseback, assignment,
conveyance, transfer
4
or other disposition by the Company or any of its Subsidiaries to any
Person (other than any member of the Related Subsidiary Group of the
seller) of any right or interest in or to property of any kind whatsoever,
whether real, personal or mixed and whether tangible or intangible,
including, without limitation, Capital Stock (including, without
limitation, of any of the Company's Subsidiaries), but excluding (a) sales
of assets in the ordinary course of business, which in the case of such
asset sales in excess of $1,000,000 in a single transaction or series of
related transactions, shall be certified in an Officer's Certificate as
being in the ordinary course of business, and (b) sales of obsolete
equipment, which in the case of such asset sales in excess of $1,000,000
in a single transaction or series of related transactions, shall be
certified in an Officer's Certificate as being a sale of obsolete
equipment. It is the intent of the parties that "Asset Sales" include, in
any event, sales of Permitted Testing Center Assets not constituting
inventory of the seller.
"Assignment Agreement" means an assignment agreement in
substantially the form of Exhibit XII annexed hereto or in such other form
as may be approved by the Administrative Agent.
"Assignment of Rents and Leases" means each Assignment of Rents and
Leases executed and delivered by any Loan Party in favor of the Collateral
Agent for the benefit of the Agents and the Lenders in such form as shall
be approved by the Collateral Agent in its reasonable discretion, in each
case with such changes thereto as may be reasonably recommended by the
Collateral Agent's local counsel based on local laws or customary
practice, as any such Assignment of Rents and Leases may heretofore have
been or hereafter may be amended, restated, supplemented, consolidated,
extended or otherwise modified from time to time in accordance with the
terms thereof and hereof.
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"Base Rate" means, at any time, the higher of (x) the Prime Rate or
(y) the rate which is 1/2 of 1% in excess of the Federal Funds Effective
Rate.
"Base Rate Loans" means Loans bearing interest at rates determined
by reference to the Base Rate as provided in subsection 2.2A.
"Business Day" means a day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required
by law to close; provided that, with respect to matters relating to
Eurodollar Rate Loans, the term "Business Day" shall mean a day other than
a Saturday, Sunday or other day on which commercial banks in New York City
or London, England, are authorized or required by law to close.
"Calculation Period" has the meaning assigned to that term in
subsection 7.6A.
"Capital Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person as lessee that,
in conformity with GAAP, is or should be accounted for as a capital lease
on the balance sheet of that Person.
"Capital Stock" means any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests
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in a Person (other than a corporation), including, without limitation,
partnership interests and membership interests, and any and all warrants,
rights or options to purchase or other arrangements or rights to acquire
any of the foregoing.
"Cash" means money, currency or a credit balance in a Deposit
Account.
"Cash Equivalents" means (i) marketable securities issued or
directly and unconditionally guaranteed by the United States Government or
issued by any agency thereof and backed by the full faith and credit of
the United States, in each case maturing within one year from the date of
acquisition thereof; (ii) marketable direct obligations issued by any
state of the United States of America or any political subdivision of any
such state or any public instrumentality thereof maturing within one year
from the date of acquisition thereof and, at the time of acquisition,
having the highest rating obtainable from either Standard & Poor's, a
division of the ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. ("S&P"), or ▇▇▇▇▇'▇ Investors
Service, Inc. ("Moody's"); (iii) commercial paper maturing no more than
one year from the date of creation thereof and, at the time of
acquisition, having a rating of at least A-1 from S&P or at least P-1 from
Moody's; (iv) certificates of deposit or bankers' acceptances maturing
within one year from the date of acquisition thereof and, at the time of
acquisition, having a rating of at least A-1 from S&P or at least P-1 from
Moody's, issued by any Lender or any commercial bank organized under the
laws of the United States of America or any state thereof or the District
of Columbia having unimpaired capital and surplus of not less than
$500,000,000 (each Lender and each such commercial bank being herein
called a "Cash Equivalent Bank"); and (v) Eurodollar time deposits having
a maturity of less than one year purchased directly from any Cash
Equivalent Bank (provided such deposit is with such Cash Equivalent Bank
or any other Cash Equivalent Bank).
"Cash Proceeds" means, with respect to any Asset Sale, Cash payments
(including any Cash received by way of deferred payment pursuant to, or
monetization of, a note receivable or otherwise, but only as and when so
received) received from such Asset Sale.
"Certificate of Non-Bank Status" means a certificate substantially
in the form of Exhibit XIV annexed hereto delivered by a Lender to the
Administrative Agent pursuant to subsection 2.7B(iii).
"Class" means each of the following classes of the Lenders: (i) the
Lenders having Term A Loan Exposure, (ii) the Lenders having Term B Loan
Exposure, and (iii) the Lenders having Revolving Loan Exposure.
"Cleanup" means all actions required to: (1) cleanup, remove, treat
or remediate Hazardous Materials in the indoor or outdoor environment; (2)
prevent the Release of Hazardous Materials so that they do not migrate,
endanger or threaten to endanger public health or welfare or the indoor or
outdoor environment; (3) perform pre-remedial studies and investigations
and post-remedial monitoring and care; or (4) respond to any government
requests for information or documents in any way relating to cleanup,
removal, treatment or remediation or potential cleanup, removal, treatment
or remediation of Hazardous Materials in the indoor or outdoor
environment.
"Closing Date" means October 16, 1998 or such earlier date requested
by the Company on which the conditions precedent set forth in section 4
shall be satisfied.
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"Closing Date Mortgage" has the meaning assigned to that term in
subsection 4.1G hereof.
"Closing Date Mortgage Policies" has the meaning assigned to that
term in subsection 4.1G hereof.
"Closing Date Mortgaged Property" has the meaning assigned to that
term in subsection 4.1G hereof.
"Collateral" means all of the properties and assets (including
Capital Stock) in which Liens are purported to be granted by the
Collateral Documents.
"Collateral Account" has the meaning assigned to that term in the
Collateral Account Agreement.
"Collateral Account Agreement" means the Collateral Account
Agreement executed and delivered by the Company and the Collateral Agent
as of the Closing Date, substantially in the form of Exhibit XIII annexed
hereto, as such Collateral Account Agreement may be amended, restated,
supplemented or otherwise modified from time to time.
"Collateral Agent" means CSFB, in its capacity as collateral agent
hereunder and under the Collateral Documents, and any successor in such
capacity.
"Collateral Documents" means the Pledge Agreement, the Security
Agreement, the Foreign Subsidiary Pledge Agreement, the Collateral Account
Agreement, the Mortgages, the Assignments of Rents and Leases, and any
other documents, instruments or agreements delivered by any Loan Party
pursuant to this Agreement or any of the other Loan Documents in order to
grant or perfect liens on any assets of such Loan Party as security for
all or any of the Obligations.
"Commercial Letter of Credit" means any letter of credit or similar
instrument, in form and substance acceptable to the Issuing Bank, issued
for the purpose of providing the primary payment mechanism in connection
with the purchase of any materials, goods or services by the Company or
any of its Subsidiaries (other than SPC's or Excluded Foreign
Subsidiaries) in the ordinary course of business of the Company or such
Subsidiary.
"Commitments" means the commitments of the Lenders to make Loans as
set forth in subsection 2.1A of this Agreement.
"Company" has the meaning assigned to that term in the Preamble to
this Agreement.
"Company Group" means the Company and its direct and indirect
Subsidiaries.
"Company Stock Contribution" means, immediately after giving effect
to the Newmall Stock Contribution, the sale or contribution by the
Existing Investors of all of the Capital Stock of the Company to the
Parent in consideration or exchange for all of the Capital Stock of the
Parent, such that, after giving effect thereto, the Parent shall be wholly
and directly owned by the Existing Investors and the Company shall be a
wholly and directly owned Subsidiary of the Parent.
7
"Company Stock Contribution Agreement" means an agreement, as in
effect on the Closing Date, entered into among the Existing Investors and
the Parent in respect of the Company Stock Contribution, that is in form
and substance reasonably satisfactory to the Administrative Agent, as the
same may thereafter be amended, restated, supplemented or otherwise
modified from time to time to the extent permitted under subsection 7.13A.
"Compliance Certificate" means a certificate substantially in the
form of Exhibit IX annexed hereto delivered to the Administrative Agent by
the Company pursuant to subsection 6.1(iv).
"Conforming Leasehold Interest" means any Recorded Leasehold
Interest as to which the lessor has agreed in writing for the benefit of
the Collateral Agent (which writing has been delivered to the Collateral
Agent), whether under the terms of the applicable lease, under the terms
of a Landlord Consent and Estoppel, or otherwise, to the grant of a
Mortgage on the lessee's interest in such Recorded Leasehold Interest and
such other matters requested by the Collateral Agent, which interest, if a
subleasehold or sub-subleasehold interest, is not subject to any contrary
restrictions contained in a superior lease or sublease.
"Condemnation Proceeds" has the meaning assigned to that term in
subsection 2.4B(iii)(d).
"Consolidated Adjusted EBITDA" means, for any period, without
duplication, (x) the sum of the amounts for such period (as determined for
the Company and its Subsidiaries other than Excluded Foreign Subsidiaries
on a consolidated basis) of (i) Consolidated Net Income, (ii) Consolidated
Interest Expense, (iii) provisions for taxes based on income, (iv) total
depreciation expense, (v) total amortization expense, (vi) other non-cash
items reducing Consolidated Net Income to the extent reflected as a charge
or otherwise deducted from the determination of Consolidated Net Income
(other than any non-cash charges to the extent such charges represent an
accrual of or reserve for cash expenditures in any future period), (vii)
in the case of any such period which includes the last Fiscal Quarter of
the 1998 Fiscal Year or the first Fiscal Quarter of the 1999 Fiscal Year,
the Interim EBITDA Adjustment Amount for each such included quarter and
(viii) the State Contract adjustments set forth on Schedule 1.1 annexed
hereto for the periods stated in such Schedule 1.1 less (y) the sum of (a)
non-cash items increasing Consolidated Net Income, (b) the amount for such
period of gains on sales of assets (excluding sales in the ordinary course
of business) and other extraordinary gains, and (c) the aggregate amount
of dividends, if any, paid during such period to the Parent pursuant to
clause (v)(a) of the proviso to subsection 7.5, all of the foregoing
(except as otherwise provided in the definition of any term used herein)
as determined on a consolidated basis in conformity with GAAP. With
respect to calculations of Consolidated Adjusted EBITDA for any period
prior to the completion of four Fiscal Quarters following the Closing
Date, such calculations shall be made assuming that Consolidated Adjusted
EBITDA for each of the applicable Fiscal Quarters ending prior to the
Closing Date is as set forth on Schedule 1.1 annexed hereto.
"Consolidated Capital Expenditures" means, for any period, the
aggregate of all expenditures (whether paid in cash or other consideration
or accrued as a liability (including that portion of Capital Leases which
is capitalized on a consolidated balance sheet in accordance with GAAP),
excluding expenditures for Permitted Acquisitions) by the Company and its
Subsidiaries other than Excluded Foreign Subsidiaries during that period
that, in conformity with GAAP, are
8
or should be included in "purchases of property, plant or equipment" or
comparable items reflected in the consolidated statement of cash flows of
the Company and its Subsidiaries.
"Consolidated Current Assets" means, as at any date of
determination, the total assets of the Company and its Subsidiaries other
than Excluded Foreign Subsidiaries on a consolidated basis which may
properly be classified as current assets in conformity with GAAP,
excluding Cash, Cash Equivalents and deferred income taxes to the extent
otherwise included in current assets.
"Consolidated Current Liabilities" means, as at any date of
determination, the total liabilities of the Company and its Subsidiaries
other than Excluded Foreign Subsidiaries on a consolidated basis which may
properly be classified as current liabilities in conformity with GAAP,
other than (i) any liabilities that are the current portion of
Indebtedness classified as long term liabilities in conformity with GAAP
and (ii) deferred income taxes to the extent otherwise included in current
liabilities.
"Consolidated Excess Cash Flow" means, for any period, an amount (if
positive) equal to (i) the sum, without duplication, of the amounts for
such period of (a) Consolidated Adjusted EBITDA (without giving effect to
clause (x)(vii) of the definition of such term) and (b) the Consolidated
Working Capital Adjustment (which may be a negative number) minus (ii) the
sum, without duplication, of the amounts for such period of (a) scheduled
cash principal repayments made in respect of Consolidated Total Debt
(excluding repayments of Revolving Loans except to the extent the
Revolving Loan Commitments are permanently reduced in connection with such
repayments and excluding Indebtedness maturing within one (1) year of the
date of its creation or incurrence), (b) Consolidated Capital Expenditures
made in cash (net of any proceeds of any related financings with respect
to such expenditures and excluding Consolidated Capital Expenditures in
Reinvestment Assets or directly or indirectly funded by any Governmental
Authority), (c) Consolidated Interest Expense paid in cash during such
period and (d) the provision for taxes based on income of the Company and
its Subsidiaries other than Excluded Foreign Subsidiaries and paid in cash
with respect to such period.
"Consolidated Fixed Charges" means, for any period, an amount equal
to the sum, without duplication, of the amounts for such period as
determined for the Company and its Subsidiaries other than Excluded
Foreign Subsidiaries on a consolidated basis of (i) scheduled repayments
of principal of all Indebtedness (as reduced by prepayments thereon
previously made), (ii) Consolidated Interest Expense, (iii) Consolidated
Capital Expenditures, and (iv) the portion of taxes based on income
actually paid in cash or provision for cash income taxes. With respect to
the determination of Consolidated Fixed Charges for any period prior to
the completion of four Fiscal Quarters following the Closing Date,
Consolidated Fixed Charges shall be calculated on a Pro Forma Basis for
such period after giving effect to the Transactions; provided that the
Consolidated Interest Expense component of Consolidated Fixed Charges for
such period shall be calculated as set forth in the definition of
"Consolidated Interest Expense."
"Consolidated Interest Expense" means, for any period (as determined
for the Company and its Subsidiaries other than Excluded Foreign
Subsidiaries on a consolidated basis), total interest expense (including
that portion attributable to capital leases in accordance with GAAP)
payable in cash (whether in that period or any other period), including,
without limitation, all commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers' acceptance financing
and net costs under Interest Rate Agreements and other Hedge
9
Agreements, but excluding, however, (i) any amounts referred to in
subsection 2.3 payable to Agents or the Lenders on or before the Closing
Date and (ii) any amortized Transaction Costs. With respect to the
determination of Consolidated Interest Expense for any period prior to the
completion of four Fiscal Quarters following the Closing Date,
Consolidated Interest Expense shall be calculated on an annualized basis
for the period from the Closing Date through the date of determination by
multiplying (a) the Consolidated Interest Expense for the period from the
Closing Date to the date of determination by (b) a fraction, the numerator
of which is 365 and the denominator of which is the number of days during
the period from the Closing Date to the date of determination.
"Consolidated Net Income" means, for any period, the net income (or
loss) of the Company and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with
GAAP; provided that there shall be excluded therefrom (i) the income (or
loss) of any Person (other than a Subsidiary of the Company that is not an
Excluded Foreign Subsidiary) in which the Company or any of its
Subsidiaries has an equity interest, except to the extent of the amount of
dividends or other distributions actually paid to the Company or any
Subsidiary of the Company other than an Excluded Foreign Subsidiary by
such Person during such period, (ii) the income (or loss) of any Person
accrued prior to the date it becomes a Subsidiary of the Company other
than an Excluded Foreign Subsidiary or is merged into or consolidated with
the Company or any Subsidiary of the Company other than an Excluded
Foreign Subsidiary or that Person's assets are acquired by the Company or
any Subsidiary of the Company other than an Excluded Foreign Subsidiary,
(iii) the income of any Subsidiary of the Company to the extent that the
declaration or payment of dividends or similar distributions by that
Subsidiary of that income is not at the time permitted by operation of the
terms of its charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to that
Subsidiary, (iv) any after-tax gains or losses attributable to Asset
Sales, (v) one time Transaction Costs, and (vi) to the extent not included
in clauses (i) through (v) above, any net extraordinary gains or net
non-cash extraordinary losses.
"Consolidated Total Debt" means, as at any date of determination,
the aggregate amount of all outstanding Indebtedness of the Company and
its Subsidiaries other than Excluded Foreign Subsidiaries on a
consolidated basis.
"Consolidated Working Capital" means, as at any date of
determination, the excess of Consolidated Current Assets over Consolidated
Current Liabilities.
"Consolidated Working Capital Adjustment" means, for any period on a
consolidated basis, the amount (which may be a negative number) by which
Consolidated Working Capital as of the beginning of such period exceeds
(or is less than) Consolidated Working Capital as of the end of such
period.
"Contingent Obligation" means, as applied to any Person, any direct
or indirect liability, contingent or otherwise, of that Person (i) with
respect to any Indebtedness, lease, dividend or other obligation of
another if the primary purpose or intent thereof by the Person incurring
the Contingent Obligation is to provide assurance to the obligee of such
obligation of another that such obligation of another will be paid or
discharged, or that any agreements relating thereto will be complied with,
or that the holders of such obligation will be protected (in whole or in
part) against loss in respect thereof, (ii) with respect to any letter of
credit issued for the account of that Person
10
or as to which that Person is otherwise liable for reimbursement of
drawings, or (iii) under Interest Rate Agreements or other Hedge
Agreements. Contingent Obligations shall include, without limitation, (a)
the direct or indirect guaranty, endorsement (otherwise than for
collection or deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of the
obligation of another, (b) the obligation to make take-or-pay or similar
payments if required regardless of non-performance by any other party or
parties to an agreement, and (c) any liability of such Person for the
obligation of another through any agreement (contingent or otherwise) (X)
to purchase, repurchase or otherwise acquire such obligation or any
security therefor, or to provide funds for the payment or discharge of
such obligation (whether in the form of loans, advances, stock purchases,
capital contributions or otherwise) or (Y) to maintain the solvency or any
balance sheet item, level of income or financial condition of another if,
in the case of any agreement described under subclauses (X) or (Y) of this
sentence, the primary purpose or intent thereof is as described in the
preceding sentence. The amount of any Contingent Obligation shall be equal
to the amount of the obligation so guaranteed or otherwise supported or,
if less, the amount to which such Contingent Obligation is specifically
limited.
"Continuing Director" shall mean, as of any date of determination,
any member of the Board of Directors of the Parent who (i) was a member of
such Board of Directors on the Closing Date or (ii) was nominated for
election or elected to such Board of Directors with the affirmative vote
(directly or indirectly) of Alchemy.
"Contractual Obligation" means, as applied to any Person, any
provision of any indenture, mortgage, deed of trust, contract, undertaking
or other agreement or instrument to which such Person is a party or to
which such Person or any of its assets is subject.
"CSFB" means Credit Suisse First Boston.
"Debt Tender Offer" means, collectively, (i) the offer by the
Company to repurchase up to and including 100% of the outstanding Existing
Senior Notes and the consent solicitation by the Company from the holders
of outstanding Existing Senior Notes of consents to certain amendments to
the Existing Senior Note Indenture, and (ii) the offer by the Company to
repurchase up to and including 100% of the outstanding Existing Senior
Subordinated Notes and the consent solicitation by the Company from the
holders of outstanding Existing Senior Subordinated Notes of consents to
certain amendments to the Existing Senior Subordinated Note Indenture, in
each case as described in the Debt Tender Offer Materials.
"Debt Tender Offer Materials" means, collectively, the respective
Offer to Purchase and Consent Solicitation Statements dated September 1,
1998 made by the Company in respect of the Existing Senior Notes and
Existing Senior Subordinated Notes, as any of the same may thereafter have
been or may be amended, restated, supplemented or otherwise modified from
time to time (i) on or prior to the Closing Date pursuant to documentation
in form and substance reasonably satisfactory to the Administrative Agent
and the Requisite Lenders or (ii) thereafter to the extent permitted under
subsection 7.13A.
"Default" means a condition or event that, after notice or after any
applicable grace period has lapsed, or both, would constitute an Event of
Default.
"Defaulting Lender" means any Lender with respect to which a Lender
Default is in
11
effect.
"Deposit Account" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate
of deposit.
"Dollars" and the sign "$" mean the lawful money of the United
States of America.
"Domestic Subsidiary" means any Subsidiary of the Company
incorporated, formed or organized under the laws of any jurisdiction
within the United States of America or any territory thereof.
"Eligible Assignee" means (A) (i) a commercial bank organized under
the laws of the United States or any state thereof; (ii) a commercial bank
organized under the laws of any other country or a political subdivision
thereof; provided that (x) such bank is acting through a branch or agency
located in the United States or (y) such bank is organized under the laws
of a country that is a member of the Organization for Economic Cooperation
and Development or a political subdivision of such country; and (iii) any
other financial institution or entity which is an "accredited investor"
(as defined in Regulation D under the Securities Act) which extends credit
or buys loans as one of its businesses including, but not limited to,
insurance companies, mutual funds and lease financing companies, in each
case (under clauses (i) through (iii) above) that is reasonably acceptable
to the Administrative Agent; (B) any Lender and any Affiliate of any
Lender; provided that neither the Company nor any Affiliate of the Company
shall be an Eligible Assignee and (C) an Approved Fund.
"Employee Benefit Plan" means any "employee benefit plan" as defined
in Section 3(3) of ERISA which is subject to ERISA and which is maintained
or contributed to by the Company or any of its ERISA Affiliates.
"ENR" means Envirotest Systems Corp., a Delaware corporation,
including, from and after the Closing Date, after giving effect to the ENR
Merger.
"ENR Group" means ENR and its direct and indirect Subsidiaries.
"ENR Merger" means the merger of Stone Rivet into ENR pursuant to
the ENR Merger Agreement.
"ENR Merger Agreement" means the Agreement and Plan of Merger dated
as of August 12, 1998 among ESP, Stone Rivet, and ENR, as such agreement
may thereafter have been or may be amended, restated, supplemented or
otherwise modified from time to time (i) on or prior to the Closing Date
pursuant to documentation in form and substance reasonably satisfactory to
the Administrative Agent and the Requisite Lenders or (ii) thereafter to
the extent permitted under subsection 7.13A.
"ENR Transfer" means the purchase, following the ENR Merger, by the
Company of all of the outstanding Capital Stock of ENR from ESP for a
purchase price (which may be paid in the form of a note) in an amount, and
pursuant to documentation, satisfactory to the Administrative Agent
(including, without limitation, provisions of any such note relating to
subordination,
12
payments of principal and interest and the exercise of remedies).
"Environmental Claim" means any claim, action, cause of action,
investigation or notice (written or oral) by any Person alleging potential
liability (including, without limitation, potential liability for
investigatory costs, Cleanup costs, governmental response costs, natural
resources damages, property damages, personal injuries, or penalties)
arising out of, based on or resulting from (a) the presence, or Release of
any Hazardous Materials at any location, whether or not owned, leased or
operated by the Company or any of its Subsidiaries, or (b) circumstances
forming the basis of any violation, or alleged violation, of any
Environmental Law.
"Environmental Laws" means all federal, state, local and foreign
laws and regulations relating to pollution or protection of human health
or the environment, including, without limitation, laws relating to
Releases or threatened Releases of Hazardous Materials or otherwise
relating to the manufacture, processing, distribution, use, treatment,
storage, Release, disposal, transport or handling of Hazardous Materials,
laws and regulations with regard to recordkeeping, notification,
disclosure and reporting requirements respecting Hazardous Materials and
laws relating to the management or use of natural resources.
"Environmental Liabilities" means all liabilities, obligations,
responsibilities, obligations to conduct Cleanup, and all Environmental
Claims pending or threatened against any Loan Party or its Subsidiaries or
against any Person whose liability for any Environmental Claim any Loan
Party or its Subsidiaries may have retained or assumed either
contractually or by operation of law, arising from (a) environmental,
health or safety conditions, (b) the presence, Release or threatened
Release of Hazardous Materials at any location, whether or not owned,
leased or operated by the Company or its Subsidiaries, or (c)
circumstances forming the basis of any violation, or alleged violation, of
any Environmental Law.
"Equity Contribution" means an additional equity contribution on or
prior to the Closing Date by all or any of the Existing Investors of
$80,000,000 in cash to Newmall.
"Equity Proceeds" means the cash proceeds (net of underwriting
discounts and commissions and other reasonable costs associated therewith)
from the issuance of any Capital Stock or other equity Securities of, or
the making of any capital contribution to, the Parent, the Company or any
of its Subsidiaries after the Closing Date.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any successor statute.
"ERISA Affiliate" means, as applied to any Person, (i) any
corporation which is a member of a controlled group of corporations within
the meaning of Section 414(b) of the Internal Revenue Code of which that
Person is a member; (ii) any trade or business (whether or not
incorporated) which is a member of a group of trades or businesses under
common control within the meaning of Section 414(c) of the Internal
Revenue Code of which that Person is a member; and (iii) solely for
purposes of obligations under Section 412 of the Internal Revenue Code or
under the applicable sections set forth in Section 414(t)(2) of the
Internal Revenue Code, any member of an affiliated service group within
the meaning of Section 414(m) or (o) of the Internal Revenue Code of which
that Person, any corporation described in clause (i) above or any trade or
business described in clause (ii) above is a member.
13
"ERISA Event" means (i) a "reportable event" within the meaning of
Section 4043(c) of ERISA and the regulations issued thereunder with
respect to any Pension Plan (excluding those for which the provision for
30-day notice to the PBGC has been waived by regulation or with respect to
which no penalty will be assessed by the PBGC for failure to satisfy such
notice requirements); (ii) the failure to meet the minimum funding
standard of Section 412 of the Internal Revenue Code with respect to any
Pension Plan (whether or not waived in accordance with Section 412(d) of
the Internal Revenue Code) or the failure to make by its due date a
required installment under Section 412(m) of the Internal Revenue Code
with respect to any Pension Plan or the failure to make any required
contribution to a Multiemployer Plan; (iii) the provision by the
administrator of any Pension Plan pursuant to Section 4041(a)(2) of ERISA
of a notice of intent to terminate such plan in a distress termination
described in Section 4041(c) of ERISA; (iv) the withdrawal by the Company
or any of its ERISA Affiliates from any Pension Plan with two or more
contributing sponsors or the termination of any such Pension Plan
resulting, in either case, in liability pursuant to Section 4063 or 4064
of ERISA, respectively; (v) the institution by the PBGC of proceedings to
terminate any Pension Plan pursuant to Section 4042 of ERISA; (vi) the
imposition of liability on the Company or any of its ERISA Affiliates
pursuant to Section 4062(e) or 4069 of ERISA or by reason of the
application of Section 4212(c) of ERISA; (vii) the withdrawal by the
Company or any of its ERISA Affiliates in a complete or partial withdrawal
(within the meaning of Sections 4203 and 4205 of ERISA) from any
Multiemployer Plan resulting in withdrawal liability pursuant to Section
4201 of ERISA, or the receipt by the Company or any of its ERISA
Affiliates of written notice from any Multiemployer Plan that it is in
reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or
that it intends to terminate or has terminated under Section 4042 of ERISA
or under Section 4041A of ERISA if such termination would result in
liability to the Company or any of its ERISA Affiliates; (viii) the
imposition on the Company or any of its ERISA Affiliates of fines,
penalties or taxes under Chapter 43 of the Internal Revenue Code or under
Section 409 or 502(c), (i) or (l) or 4071 of ERISA in respect of any
Employee Benefit Plan; (ix) the disqualification by the Internal Revenue
Service of any Pension Plan (or any other Employee Benefit Plan intended
to be qualified under Section 401(a) of the Internal Revenue Code) under
Section 401(a) of the Internal Revenue Code, or the determination by the
Internal Revenue Service that any trust forming part of any Pension Plan
fails to qualify for exemption from taxation under Section 501(a) of the
Internal Revenue Code; or (x) the imposition of a Lien pursuant to Section
401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to ERISA
with respect to any Pension Plan.
"ESP" means Environmental Systems Products, Inc., a Delaware
corporation.
"ESP Group" means ESP and its direct and indirect Subsidiaries.
"Eurocurrency Reserve Requirements" means, for each Interest Period
for each Eurodollar Rate Loan, the highest reserve percentage applicable
to any Lender during such Interest Period under regulations issued from
time to time by the Board of Governors of the Federal Reserve System or
any successor for determining the maximum reserve requirement (including,
without limitation, any emergency, supplemental or other marginal reserve
requirement), with respect to liabilities or assets consisting of or
including Eurocurrency liabilities having a term equal to such Interest
Period.
"Eurodollar Base Rate" means the rate per annum determined by the
Administrative
14
Agent at approximately 11:00 A.M. (London time) on the date which is two
(2) Business Days prior to the beginning of the relevant Interest Period
(as specified in the applicable Notice of Borrowing) by reference to the
British Bankers' Association Interest Settlement Rates for deposits in
Dollars (as set forth by any service selected by the Administrative Agent
which has been nominated by the British Bankers' Association as an
authorized information vendor for the purpose of displaying such rates)
for a period equal to such Interest Period; provided that, to the extent
that an interest rate is not ascertainable pursuant to the foregoing
provisions of this definition, the "Eurodollar Base Rate" shall be the
interest rate per annum determined by the Administrative Agent to be the
average of the rates per annum at which deposits in Dollars are offered
for such relevant Interest Period to major banks in the London interbank
market in London, England by the Reference Lenders at approximately 11:00
A.M. (London time) on the date which is two Business Days prior to the
beginning of such Interest Period. If any of the Reference Lenders shall
be unable or shall otherwise fail to supply such rates to the
Administrative Agent upon its request, the rate of interest shall be
determined on the basis of the quotations of the remaining Reference
Lender.
"Eurodollar Rate Loans" means Loans bearing interest at rates
determined by reference to the Reserve Adjusted Eurodollar Rate as
provided in subsection 2.2A.
"Event of Default" means each of the events set forth in Section 8.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"Excluded Foreign Subsidiary" means any Foreign Subsidiary created
after the Closing Date that (i) is not a Foreign Subsidiary Guarantor,
(ii) is, during all times that it is an Excluded Foreign Subsidiary, an
Unrestricted Subsidiary under and as defined in each of the Senior
Discount Note Indenture and the Senior Subordinated Note Indenture, and
(iii) intends to, and promptly thereafter incurs, Indebtedness pursuant to
subsection 7.1(ix); provided, that as soon as such Indebtedness incurred
by such Foreign Subsidiary is no longer outstanding, such Foreign
Subsidiary shall cease to be considered, and shall not thereafter become,
an Excluded Foreign Subsidiary; and, provided further, that, solely for
purposes of calculating Consolidated Excess Cash Flow for any period, no
such Foreign Subsidiary shall be considered an Excluded Foreign Subsidiary
notwithstanding anything to the contrary herein unless, as of the end of
the period for which Consolidated Excess Cash Flow is being calculated,
such Indebtedness prohibits such Foreign Subsidiary from declaring or
paying dividends or similar distributions and such prohibitions are
customary for Indebtedness of a similar nature as such Indebtedness.
"Excluded Lease Asset " has the meaning assigned to that term in
subsection 6.12C.
"Existing Debt" means all Indebtedness (other than Indebtedness
hereunder and Indebtedness identified in Schedule 7.1 annexed hereto) of
the Company and its Subsidiaries (including, for such purpose, ENR and its
Subsidiaries) outstanding at any time on the Closing Date, including,
without limitation, Indebtedness under the Existing ENR Debt Agreements
and the Existing ESP Debt Agreements.
"Existing ENR Debt Agreements" means (i) that certain Credit
Agreement dated as of December 30, 1992, by and between ENR and U.S. Bank,
as amended to, and in effect on, the Closing Date, (ii) the Existing
Senior Notes and the Existing Senior Subordinated Notes, (iii) that
15
certain Loan Agreement, Mortgage, Security Agreement and Financing
Statement dated as of June 1, 1996 between ENR and the Indiana Development
Finance Authority, and the notes issued pursuant thereto, and (iv) that
certain Trust Indenture and Security Agreement and that certain Mortgage
and Security Agreement, each dated as of December 1, 1995 between
Envirotest Wisconsin, Inc. and Firstar Bank Milwaukee, N.A.
"Existing ESP Debt Agreements" means that certain Credit Agreement
dated as of April 28, 1998 by and among ESP, various banks, Bank of
America National Trust and Savings Association, as Administrative Agent,
and BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, as Arranger, as in effect on the
Closing Date.
"Existing Indentures Amendments" means the amendments, modifications
and supplements to each of the Existing Senior Note Indenture and the
Existing Senior Subordinated Note Indenture described in the Debt Tender
Offer Materials.
"Existing Investors" means, collectively, Alchemy and the Other
Investors.
"Existing Senior Note Indenture" means that certain Indenture dated
as of March 15, 1994 between ENR, as issuer, the guarantors named therein
and First Trust National Association, as Indenture Trustee, pursuant to
which the Existing Senior Notes were issued by ENR, as such Indenture has
been amended prior to the Closing Date and as such Indenture may have been
further amended, supplemented or otherwise modified from time to time to
the extent contemplated by the Debt Tender Offer Materials or otherwise
permitted under subsection 7.13A.
"Existing Senior Notes" means ENR's $200,000,000 in original
aggregate principal amount of 9-1/8% Senior Notes due 2001, issued
pursuant to the Existing Senior Note Indenture.
"Existing Senior Subordinated Note Indenture" means that certain
Indenture dated as of April 1, 1993 between ENR, as issuer, the guarantors
named therein and First Trust National Association, as Indenture Trustee,
pursuant to which the Existing Senior Subordinated Notes were issued by
ENR, as such Indenture has been amended prior to the Closing Date and as
such Indenture may have been further amended, supplemented or otherwise
modified from time to time to the extent to the extent contemplated by the
Debt Tender Offer Materials or otherwise permitted under subsection 7.13A.
"Existing Senior Subordinated Notes" means ENR's $125,000,000 in
original aggregate principal amount of 9-5/8% Senior Subordinated Notes
due 2003, issued pursuant to the Existing Senior Subordinated Note
Indenture.
"Facilities" means any and all real property (including, without
limitation, all buildings, fixtures or other improvements located thereon)
now, hereafter or heretofore owned, leased, operated or used by the
Company or any of its Subsidiaries (but only as to portions thereof
actually owned, leased, operated or used) or any of their respective
predecessors or any of their respective Affiliates that are directly or
indirectly controlled by the Company.
"Federal Funds Effective Rate" means, for any period, a fluctuating
interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers, as
16
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
the Administrative Agent from three Federal funds brokers of recognized
standing selected by the Administrative Agent.
"Financial Services Affiliate" means ESP Financial Services LLC, a
Delaware limited liability company.
"Financial Services Program" means the financing by the Financial
Services Affiliate of the purchase or use by customers of ESP of
automotive emission test and analysis equipment and systems manufactured
by ESP.
"First Adjustment Date" means, the later of (a) the date on which
the financial statements for the Fiscal Quarter ending March 31, 1999 are
delivered as required pursuant to subsection 6.1(ii) and (b) the date
which is six months after the Closing Date.
"First Priority" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document, that such
Lien is the most senior Lien (other than Permitted Encumbrances and other
Liens permitted pursuant to subsection 7.2A to the extent not perfected by
filing of any UCC financing statements) to which such Collateral is
subject.
"Fiscal Quarter" means a fiscal quarter of a Fiscal Year.
"Fiscal Year" means the fiscal year of the Company and its
Subsidiaries ending on December 31 of each calendar year.
"Flood Hazard Property" means a Mortgaged Property located in an
area designated by the Federal Emergency Management Agency as having
special flood or mud slide hazards.
"Foreign Subsidiary" means any Subsidiary of the Company that is not
a Domestic Subsidiary.
"Foreign Subsidiary Guarantors" means any of Newmall, ▇▇▇▇▇▇▇ UK and
any other Person that becomes a Foreign Subsidiary (other than an Excluded
Foreign Subsidiary) after the Closing Date and becomes a party to a
Guaranty pursuant to subsection 6.9.
"Foreign Subsidiary Guaranty" means a guaranty of the Obligations
governed by such foreign laws as may be reasonably selected by the
Administrative Agent, and otherwise in form and substance satisfactory to
the Administrative Agent, executed and delivered by Newmall and ▇▇▇▇▇▇▇ UK
as of the Closing Date or by any additional Foreign Subsidiary Guarantor
from time to time thereafter pursuant to subsection 6.9, as such guaranty
may heretofore have been or hereafter may be amended, restated,
supplemented or otherwise modified from time to time.
"Foreign Subsidiary Pledge Agreement" means a pledge agreement
governed by such foreign laws as may be reasonably selected by the
Administrative Agent, and otherwise in form and substance satisfactory to
the Administrative Agent and the Collateral Agent, executed and delivered
by Newmall and ▇▇▇▇▇▇▇ UK as of the Closing Date or by any additional
Foreign Subsidiary Guarantor from time to time thereafter pursuant to
subsection 6.9, as such pledge
17
agreement may heretofore have been or hereafter may be amended, restated,
supplemented or otherwise modified from time to time.
"Funding and Payment Office" means the office of the Administrative
Agent located at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ (or such office of
the Administrative Agent or any successor Administrative Agent specified
by the Administrative Agent or such successor Administrative Agent in a
written notice to the Loan Parties and the Lenders).
"Funding Date" means the date of the funding of a Loan, which, in
the case of the Term Loans and the Initial Revolving Loans, shall be the
Closing Date.
"GAAP" means, subject to the limitations on the application thereof
set forth in subsection 1.2, generally accepted accounting principles set
forth in opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such
other statements by such other entity as may be approved by a significant
segment of the accounting profession, in each case as the same are
applicable to the circumstances as of the date of determination and
specifically, terms used herein applicable to the Company and its
Subsidiaries defined by reference to GAAP shall give effect to the
subtraction of minority interests.
"Governmental Acts " has the meaning assigned to that term in
subsection 3.5A.
"Governmental Authority" means any nation or government, any state
or any political subdivision of any of the foregoing and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Governmental Authorization" means any permit, license,
authorization, plan, directive, consent order or consent decree of or from
any Governmental Authority.
"Group" means any or all of the Company Group, the ESP Group or the
ENR Group, as the context may require.
"Guaranty" means, individually, the Subsidiary and Parent Guaranty,
the Foreign Subsidiary Guaranty or any other guaranty of the Obligations,
and "Guaranties" means, collectively, the Subsidiary and Parent Guaranty,
the Foreign Subsidiary Guaranty and each other guaranty of the
Obligations.
"Guarantor" means, individually, the Parent, the Subsidiary
Guarantors, or any other guarantor of the Obligations, and "Guarantors"
means, collectively, the Parent, the Subsidiary Guarantors and each other
guarantor of the Obligations.
"Hazardous Materials" means all substances defined as Hazardous
Substances, Oils, Pollutants or Contaminants in the National Oil and
Hazardous Substances Pollution Contingency Plan, 40 C.F.R. Section 300.5,
or defined as such by, or regulated as such under, any Environmental Law.
"Hedge Agreements" means all interest rate swaps, caps or collar
agreements or similar arrangements entered into by the Company or any of
its Subsidiaries providing for protection
18
against fluctuations in interest rates or currency exchange rates or the
exchange of nominal interest obligations, either generally or under
specific contingencies.
"Holding Companies" means each of Newmall, ▇▇▇▇▇▇▇ UK and ▇▇▇▇▇▇▇
U.S. and their respective successors.
"Improvements" means all buildings, structures, fixtures, tenant
improvements, and other improvements of any kind and description now or
hereafter located in or on or attached to any land that is a Real Property
Asset, including all building materials, water sanitary and storm sewers,
drainage, electricity, steam, gas, telephone and other utility,
facilities, parking areas, roads, driveways, walks and other site
improvements; and all additions and betterments thereto and all renewals,
substitutions and replacements thereof.
"Indebtedness" means, as applied to any Person, (i) all indebtedness
for borrowed money, (ii) that portion of obligations with respect to
Capital Leases that is properly classified as a liability on a balance
sheet in conformity with GAAP, (iii) notes payable and drafts accepted
representing extensions of credit whether or not representing obligations
for borrowed money (other than current accounts payable incurred in the
ordinary course of business and accrued expenses incurred in the ordinary
course of business), (iv) any obligation owed for all or any part of the
deferred purchase price of property or services (excluding any such
obligations incurred under ERISA and current trade payables incurred in
the ordinary course of business), (v) all obligations evidenced by notes,
bonds (other than performance bonds), debentures or other similar
instruments, (vi) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to any
property or assets acquired by such Person (even though the rights and
remedies of the seller or the lender under such agreement in the event of
default are limited to repossession or sale of such property or assets),
(vii) all obligations, contingent or otherwise, as an account party under
any Letter of Credit or under acceptance, letter of credit or similar
facilities to the extent not reflected as trade liabilities on the balance
sheet of such Person in accordance with GAAP, (viii) all obligations,
contingent or otherwise, to purchase, redeem, retire or otherwise acquire
for value any Capital Stock, (ix) all obligations under Interest Rate
Agreements and other Hedge Agreements, including, as of any date of
determination, the net amounts, if any, that would be required to be paid
by such Person if such Hedge Agreements were terminated on such date, (x)
all Contingent Obligations in respect of obligations of the kind referred
to in clauses (i) through (ix) above or in respect of the payment of
dividends on the Capital Stock of any other Person, and (xi) all
indebtedness secured by any Lien on any property or asset owned or held by
that Person regardless of whether the indebtedness secured thereby shall
have been assumed by that Person or is nonrecourse to the credit of that
Person.
"Indemnitee" has the meaning assigned to that term in subsection
10.3.
"Information Memorandum" means the Confidential Information
Memorandum dated September 1998, as supplemented by the memorandum dated
September 30, 1998, that was used in connection with the syndication of
the credit facilities set forth herein.
"Initial Period" means the period commencing on and including the
Closing Date and ending on the earlier of (i) the date on which the
Arrangers notify the Company that they have concluded their primary
syndication of the Loans and the Commitments, and (ii) ninety (90) days
after the Closing Date.
19
"Initial Revolving Loans" means the Revolving Loans to be made by
the Lenders to the Company on the Closing Date, in an amount not to exceed
$15,000,000, to be used for the purposes described in subsection 2.5A.
"Insurance Proceeds" has the meaning assigned to that term in
subsection 2.4B(iii)(d).
"Intellectual Property" has the meaning assigned to that term in
subsection 5.5C.
"Interest Coverage Ratio" has the meaning assigned to that term in
subsection 7.6.
"Interest Payment Date" means (i) with respect to any Base Rate
Loan, the last Business Day in each of March, June, September and December
of each year, commencing on December 31, 1998, and (ii) with respect to
any Eurodollar Rate Loan, the last day of each Interest Period applicable
to such Loan; provided that in the case of each Interest Period of longer
than three months, "Interest Payment Date" shall also include the date
that is three months after the commencement of such Interest Period.
"Interest Period" has the meaning assigned to that term in
subsection 2.2B.
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement designed to hedge the Company or any of
its Subsidiaries against fluctuations in interest rates.
"Interest Rate Determination Date" means each date for calculating
the Reserve Adjusted Eurodollar Rate, for purposes of determining the
interest rate in respect of an Interest Period. The Interest Rate
Determination Date for purposes of calculating the Reserve Adjusted
Eurodollar Rate shall be the second Business Day prior to the first day of
the related Interest Period.
"Interim EBITDA Adjustment Amount" means, as to any particular
Fiscal Quarter, but only to the extent any of the Cost Savings Measures
(as defined below) have not been taken prior to the beginning of such
Fiscal Quarter, an amount, not to exceed $2,350,000, equal to the amount
by which the costs and expenses of the Company and its Subsidiaries (other
than the Excluded Foreign Subsidiaries) for such Fiscal Quarter are
greater than they would have been had such Cost Savings Measures been
taken prior to the beginning of such Fiscal Quarter. As used herein, "Cost
Savings Measures" means the expense and cost reduction initiatives
intended to be taken by the Company following the consummation of the
Transactions and contemplated by footnote 4 of the pro forma financial
statements of the Company and its Subsidiaries for the Fiscal Year 1997
that were delivered to the Lenders pursuant to subsection 5.3A(i)(b).
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter and any
successor statute.
"Investment" means (i) any direct or indirect purchase or other
acquisition by the Company or any of its Subsidiaries of, or of a
beneficial interest in, stock or other Securities of any other Person, or
(ii) any direct or indirect loan, advance (other than advances to
employees for moving, entertainment and travel expenses, drawing accounts
and similar expenditures in the
20
ordinary course of business) or capital contribution by the Company or any
of its Subsidiaries to any other Person, including all indebtedness and
accounts receivable acquired from that other Person that are not current
assets or did not arise from sales to that other Person in the ordinary
course of business; provided, however, that the term "Investment" shall
not include (a) current trade and customer accounts receivable for goods
furnished or services rendered in the ordinary course of business and
payable in accordance with customary trade terms, (b) advances and
prepayments to suppliers for goods and services in the ordinary course of
business, (c) stock or other securities acquired in connection with the
satisfaction or enforcement of Indebtedness or claims due or owing to the
Company or any of its Subsidiaries or as security for any such
Indebtedness or claims, (d) Cash held in Deposit Accounts with banks,
trust companies and the Lenders and (e) shares in a mutual fund that
invests solely in Cash Equivalents. The amount of any Investment shall be
the original cost of such Investment plus the cost of all additions
thereto, without any adjustments for increases or decreases in value, or
write-ups, write-downs or write-offs with respect to such Investment.
Without limitation of the foregoing, "Investments" shall include the
incurring by any Person of Contingent Obligations in respect of the
obligations of any other Person.
"IP Collateral" has the meaning assigned to the term "Intellectual
Property Collateral" in the Security Agreement.
"Issuing Bank" means, with respect to any Letter of Credit, CSFB, in
its capacity as issuer of Letters of Credit, and, any other Lender that is
a New York based commercial bank, reasonably acceptable to the Company and
the Administrative Agent, having a Letter of Credit Subfacility
Commitment.
"Landlord Consent and Estoppel" means, with respect to any Leasehold
Property, a letter, certificate or other instrument in writing from the
lessor under the related lease, in form and substance acceptable to the
Collateral Agent in its reasonable discretion.
"Leasehold Property" means any leasehold interest of any Loan Party
as lessee under any lease of real property, other than any such leasehold
interest designated from time to time by the Collateral Agent in its sole
discretion as not being required to be included in the Collateral.
"Lender" and "Lenders" means the Persons identified as "Lenders" and
listed on the signature pages of this Agreement, together with their
successors and permitted assigns pursuant to subsection 10.1, and the term
"Lenders" shall include the Swing Line Lender unless the context otherwise
requires; provided that the term "Lenders", when used in the context of a
particular Commitment, shall mean the Lenders having that Commitment.
"Lender Default" means (i) the refusal (which has not been
retracted) of a Lender to make available its portion of any Loans
(including any Revolving Loans made to pay Refunded Swing Line Loans or to
reimburse drawings under Letters of Credit) in accordance with subsection
2.1A or its portion of any unreimbursed drawing or payment under a Letter
of Credit in accordance with subsection 3.3C or (ii) a Lender having
notified the Company and/or the Administrative Agent in writing that it
does not intend to comply with its obligations under subsection 2.1 or
subsections 3.1C, 3.3B or 3.3C, as a result of any takeover of such Lender
by any regulatory authority or agency.
21
"Lending Office" means, as to any Lender, the office or offices of
such Lender specified as the "Lending Office" on Schedule 2.1, or such
other office or offices as such Lender may from time to time notify the
Company and the Administrative Agent.
"Letter of Credit" or "Letters of Credit" means Commercial Letters
of Credit and Standby Letters of Credit issued or to be issued by the
Issuing Bank for the account of the Company or any Subsidiary Guarantor
that is a Domestic Subsidiary pursuant to subsection 3.1.
"Letter of Credit Issuing Office" means, as to any Issuing Bank, the
address from time to time specified by such Issuing Bank to the Company
and the Administrative Agent as its letter of credit issuing office. The
initial "Letter of Credit Issuing Office" for CSFB shall be ▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇.
"Letter of Credit Subfacility Commitment" means, with respect to any
Issuing Bank at any time, the commitment of such Issuing Bank to issue
Letters of Credit pursuant to subsection 3.1A; provided, that the
aggregate amount the Letter Credit Subfacility Commitments shall in no
event exceed $30,000,000; provided, further, that any reduction in the
Revolving Loan Commitments to a level that is below the then aggregate
amount of the Letter of Credit Subfacility Commitments shall result in the
pro rata reduction of the aggregate Letter of Credit Subfacility
Commitments pro rata to each Issuing Bank.
"Letter of Credit Usage" means, as at any date of determination, the
sum of (i) the maximum aggregate amount which is or at any time thereafter
may become available for drawing under all Letters of Credit then
outstanding plus (ii) the aggregate amount of all drawings under Letters
of Credit honored by the Issuing Bank and not theretofore reimbursed by
the Company (including any such reimbursement out of the proceeds of
Revolving Loans pursuant to subsection 3.3B).
"Leverage Ratio" has the meaning assigned to that term in subsection
7.6.
"Lien" means any lien, mortgage, pledge, assignment, security
interest, fixed or floating charge or encumbrance of any kind (including
any conditional sale or other title retention agreement, any lease in the
nature thereof, and any agreement to give any security interest) and any
option, trust or deposit or other preferential arrangement having the
practical effect of any of the foregoing.
"Loan" or "Loans" means, as the context requires, one or more of the
Term Loans, Revolving Loans, Swing Line Loans or any combination thereof.
"Loan Documents" means this Agreement, the Notes, the Letters of
Credit (and any applications for, or reimbursement agreements or other
documents or certificates executed by the Company in favor of the Issuing
Bank relating to, the Letters of Credit), the Guaranties and the
Collateral Documents.
"Loan Parties" means the Parent, the Company and each Subsidiary
Guarantor.
"Margin Stock" has the meaning assigned to that term in Regulation U
of the Board of Governors of the Federal Reserve System as in effect from
time to time.
22
"Material Adverse Effect" means (i) a material adverse effect upon
the business, operations, properties, assets, condition (financial or
otherwise) or prospects of the Company and its Subsidiaries, taken as a
whole (or ENR and its Subsidiaries, taken as a whole, prior to the
consummation of the Transactions), (ii) the material impairment of the
ability of any Loan Party to perform the Obligations, (iii) a material
adverse effect upon the legality, validity, binding effect or
enforceability against a Loan Party of a Loan Document to which it is a
party, or (iv) a material adverse effect upon the rights, remedies and
benefits, taken as a whole, available to, or conferred upon, the Agents
and the Lenders under any Loan Document.
"Material Contracts" means any or all of the following, as the
context may require: (i) any Security issued by the Company or any of its
Subsidiaries, (ii) any material indenture, mortgage, deed of trust,
contract, undertaking, agreement or other instrument to which the Company
or any of its Subsidiaries is a party or by which it or any of its
properties is bound or to which it or any of its properties is subject,
(iii) each State Contract, and (iv) any other document, agreement or
instrument that is material to the operation or business of the Company
and its Subsidiaries, taken as a whole.
"Merger" means the merger contemplated by Article II of the ENR
Merger Agreement.
"Merger Certificate" means the Certificate of Merger dated as of the
Closing Date by and between ENR and ESP.
"Minimum Shares" means 90% of all of the issued and outstanding
shares of the Class A Common Stock, par value $0.01 per share ("Class A
Common Stock"), of ENR, assuming the conversion of all issued and
outstanding shares of Class B Common Stock, par value $0.01 per share, of
ENR and Class C Common Stock, par value $0.01 per share, of ENR into Class
A Common Stock; provided, that all shares of Class A Common Stock that are
issuable upon conversion (and assuming conversion) of all of the then
issued and outstanding shares of such Class B Common Stock and Class C
Common Stock shall have been tendered and not withdrawn prior to the
expiration of the Shares Offer to Purchase.
"Mortgage" means (i) a security instrument (whether designated as a
deed of trust or a mortgage or by any similar title) executed and
delivered by any Loan Party, substantially in the form of Exhibit XV
annexed hereto (in the case of any security instrument in respect of
Leasehold Property, with such changes as shall be appropriate to reflect a
security interest in Leasehold Property) or in such other form as may be
approved by the Collateral Agent in its sole discretion, in each case with
such changes thereto as may be recommended by the Collateral Agent's local
counsel based on local laws or customary local mortgage or deed of trust
practices, or (ii) at the Collateral Agent's option, in the case of an
Additional Mortgaged Property, an amendment to an existing Mortgage, in
form satisfactory to the Collateral Agent, adding such Additional
Mortgaged Property to the assets encumbered by such existing Mortgage, in
either case as such security instrument or amendment may heretofore have
been or hereafter may be amended, supplemented or otherwise modified from
time to time. "Mortgages" means all such instruments, including the
Closing Date Mortgages and any Additional Mortgages, collectively.
"Mortgaged Property" means a Closing Date Mortgaged Property or an
Additional Mortgaged Property.
23
"Multiemployer Plan" means a "multiemployer plan", as defined in
Section 4001(a)(3) of ERISA which is subject to Title IV of ERISA, to
which the Company or any of its ERISA Affiliates is contributing or to
which the Company or any of its ERISA Affiliates has an obligation to
contribute.
"Net Cash Proceeds" means, with respect to any Asset Sale, Cash
Proceeds of such Asset Sale net of bona fide direct costs of sale
including, without limitation, (i) income taxes reasonably estimated to be
actually payable as a result of such Asset Sale within two years of the
date of receipt of such Cash Proceeds, (ii) transfer, sales, use and other
taxes payable in connection with such Asset Sale, (iii) payment of the
outstanding principal amount of, premium or penalty, if any, and interest
on any Indebtedness (other than the Loans) that is secured by a Lien on
the stock or assets in question and that is required to be repaid under
the terms thereof as a result of such Asset Sale, and (iv) financial
advisor's commissions and reasonable fees and expenses of counsel and
other advisors in connection with such Asset Sale.
"Newmall" means Newmall Ltd., (registered number 3461909) a private
limited company incorporated in England and Wales.
"Newmall ESP Intercompany Indebtedness" means the Indebtedness in an
outstanding principal amount of approximately $116,000,000 immediately
prior to the Closing Date owing by Newmall to ESP.
"Newmall Stock Contribution" means the contribution by the Existing
Investors of all of the Capital Stock of Newmall to the Company in
exchange for all of the Capital Stock of the Company, such that, after
giving effect thereto, the Company shall be directly owned by the Existing
Investors and Newmall shall be a direct Subsidiary of the Company.
"Newmall Stock Contribution Agreement" means an agreement, as in
effect on the Closing Date, entered into among the Existing Investors and
Newmall in respect of the Newmall Stock Contribution Agreement, that is in
form and substance reasonably satisfactory to the Administrative Agent, as
the same may thereafter be amended, restated, supplemented or otherwise
modified from time to time to the extent permitted under subsection 7.13A.
"Non-Defaulting Lender" means and includes each Lender other than a
Defaulting Lender.
"Non-US Lender" has the meaning assigned to that term in subsection
2.7B(iii).
"Notes" means one or more of the Term Notes, Revolving Notes, Swing
Line Notes or any combination thereof.
"Notice of Borrowing" means a notice in the form of Exhibit I
annexed hereto delivered by the Company to the Administrative Agent
pursuant to subsection 2.1B with respect to a proposed borrowing.
"Notice of Conversion/Continuation" means a notice substantially in
the form of Exhibit II annexed hereto delivered by the Company to the
Administrative Agent pursuant to subsection 2.2D with respect to a
proposed conversion or continuation of the applicable basis for
determining
24
the interest rate with respect to the Loans specified therein.
"Notice of Issuance of Letter of Credit" means a notice in the form
of Exhibit III annexed hereto delivered by the Company to the
Administrative Agent pursuant to subsection 3.1B(i) with respect to the
proposed issuance of a Letter of Credit.
"Obligations" means all obligations of every nature of each Loan
Party from time to time owed to the Agents, the Lenders or any of them or
their respective Affiliates under the Loan Documents, whether for
principal, interest, reimbursement of amounts drawn under Letters of
Credit or payments for early termination of Interest Rate Agreements,
fees, expenses, indemnification or otherwise.
"Officer's Certificate" means, with respect to any Person, a
certificate executed on behalf of such Person (x) if such Person is a
partnership or limited liability company, by its chairman of the Board (if
an officer) or chief executive officer or by the chief financial officer
of its general partner or managing member or other Person authorized to do
so by its Organizational Documents, (y) if such Person is a corporation,
on behalf of such corporation by its chairman of the board (if an officer)
or chief executive officer or its chief financial officer or vice
president, and (z) if such person is the Company or a Subsidiary of the
Company, a Responsible Officer; provided that every Officer's Certificate
with respect to the compliance with a condition precedent to the making of
any Loans hereunder shall include (i) a statement that the officer or
officers making or giving such Officer's Certificate have read such
condition and any definitions or other provisions contained in this
Agreement relating thereto, (ii) a statement that, in the opinion of the
signer or signers, they have made or have caused to be made such
examination or investigation as is necessary to enable them to express an
informed opinion as to whether or not such condition has been complied
with, and (iii) a statement as to whether, in the opinion of the signer or
signers, such condition has been complied with.
"Ohio Debt" means all Indebtedness and other obligations of the
Company under (i) the Loan Agreement dated as of April 1, 1995 between
Ohio Air Quality Development Authority and the Company and all notes
issued pursuant thereto, and (ii) the Master Lease Agreement dated as of
April 1, 1995 between ▇▇▇▇▇▇▇ Ohio Development Company, Inc. and the
Company, together with the Indenture and Bonds (as such terms are defined
in such Loan Agreement), in each case as the same may be amended,
supplemented or otherwise modified from time to time after the date hereof
in accordance with subsection 7.13.
"Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases that may be terminated by the
lessee at any time) of any property (whether real, personal or mixed) that
is not a Capital Lease other than any such lease under which that Person
is the lessor.
"Organizational Authorizations" means, with respect to any Person,
resolutions of its Board of Directors, general partners or members of such
Person, and such other Persons, groups or committees (including, without
limitation, managers and managing committees), if any, required by the
Organizational Certificate or Organization Documents of such Person to
authorize or approve the taking of any action or the entering into of any
transaction.
"Organizational Certificate" means, with respect to any Person, the
certificate or articles
25
of incorporation, partnership or limited liability company or any other
similar or equivalent organizational, charter or constitutional
certificate or document filed with the applicable Governmental Authority
in the jurisdiction of its incorporation, organization or formation,
which, if such Person is a partnership or limited liability company, shall
include such certificates, articles or other certificates or documents in
respect of each partner or member of such Person.
"Organizational Documents" means, with respect to any Person, the
by-laws, partnership agreement, limited liability company agreement,
operating agreement, management agreement or other similar or equivalent
organizational, charter or constitutional agreement or arrangement, which,
if such Person is a partnership or limited liability company, shall
include such by-laws, agreements or arrangements in respect of each
partner or member of such Person.
"Other Investors" means such Persons other than Alchemy as shall
hold Capital Stock of (i) Newmall immediately prior to giving effect to
the Newmall Stock Contribution, and (ii) the Parent immediately after
giving effect to the Newmall Stock Contribution.
"Parent" has the meaning assigned to that term in the Preamble to
this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA (or any successor thereto).
"Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Title IV of ERISA.
"Permitted Acquisitions" means (i) the acquisition by the Company of
100% of the issued and outstanding Capital Stock of Transervice, on terms
and conditions (including, without limitation, all applicable
documentation) reasonably satisfactory to the Administrative Agent,
provided, that (a) the Company shall be in Pro Forma Compliance after
giving effect to such acquisition, (b) no Default or Event of Default
shall have occurred and be continuing or result therefrom, (c) the
aggregate purchase price shall not exceed $18,000,000 (of which no more
than $13,500,000 shall be paid in cash and the remainder of which shall be
paid in the form of promissory note having no principal payments prior to
the third Anniversary), (d) no Indebtedness shall be assumed by the
Parent, the Company or any of its Subsidiaries in connection therewith and
the Indebtedness of Transervice, if not paid in full, shall not be
recourse to the Parent, the Company, any other Subsidiary of the Company
or any of their respective assets, and (e) Transervice shall have become a
Subsidiary Guarantor to the extent required by subsection 6.9 and the
provisions of subsection 6.9 shall have been complied with to the
satisfaction of the Administrative Agent and the Collateral Agent; and
(ii) any acquisition of 100% of the issued and outstanding Capital Stock
of any other Person organized under the laws of any State of the United
States of America whose direct and indirect revenues are generated
primarily from businesses operated in the United States of America, on
terms and conditions (including, without limitation, all applicable
documentation) satisfactory to the Administrative Agent, provided, that
(a) the Company shall be in Pro Forma Compliance after giving effect to
such acquisition, assuming for such purpose that the maximum Leverage
Ratios set forth in subsection 7.6C were each lower by 0.35x, (b) no
Default or Event of Default shall have occurred and be continuing or
result therefrom, (c) the aggregate purchase price of all such
acquisitions shall not exceed $30,000,000 in any calendar year and
$50,000,000 in the aggregate since the Closing Date, which purchase prices
shall be deemed to include the amount of any Indebtedness assumed by the
Company or any
26
of its Subsidiaries in connection therewith, and (d) such Person shall
have become a Subsidiary Guarantor and the provisions of subsection 6.9
shall have been complied with to the satisfaction of the Administrative
Agent and the Collateral Agent.
"Permitted Encumbrances" means the following types of Liens:
(i) Liens for taxes, assessments or governmental charges or
claims the payment of which is not, at the time, required by
subsection 6.3;
(ii) statutory Liens of landlords, statutory Liens of
carriers, warehousemen, mechanics and materialmen and other Liens
imposed by law (other than any such Lien imposed pursuant to Section
401(a)(29) or 412(n) of the Internal Revenue Code or by ERISA)
incurred in the ordinary course of business for sums not yet
delinquent or being contested in good faith pursuant to appropriate
proceedings, if such reserve or other appropriate provision, if any,
as shall be required by GAAP shall have been made therefor;
(iii) Liens incurred or deposits made in the ordinary course
of business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, trade contracts,
performance and return-of-money bonds and other similar obligations
(exclusive, in each case, of obligations for the payment of borrowed
money or other Indebtedness);
(iv) any attachment or judgment Lien not constituting an Event
of Default under subsection 8.8, so long as such Lien could not
reasonably be expected to have a Material Adverse Effect;
(v) leases or subleases granted to others (in the ordinary
course of business consistent with past practices) not interfering
in any material respect with the ordinary conduct of the business or
operations of the Company or any of its Subsidiaries;
(vi) easements, rights-of-way, restrictions, minor defects,
encroachments or irregularities in title and other similar charges
or encumbrances not interfering in any material respect with the
ordinary conduct of the business of the Company or any of its
Subsidiaries and encumbrances other than Liens which are prohibited
hereunder set forth on the title reports delivered to the
Administrative Agent on or before the Closing Date pursuant to
subsection 4.1G;
(vii) any (a) interest or title of a lessor or sublessor under
any Capital Lease permitted by subsection 7.1(iv) or any operating
lease not prohibited by this Agreement, (b) restriction or
encumbrance that the interest or title of such lessor or sublessor
may be subject to, or (c) subordination of the interest of the
lessee or sublessee under such lease to any restriction or
encumbrance referred to in the preceding clause (b);
(viii) Liens arising from filing UCC financing statements
relating solely to leases permitted by this Agreement;
(ix) Liens in favor of customs and revenue authorities arising
as a matter of
27
law to secure payment of customs duties in connection with the
importation of goods;
(x) deposits in the ordinary course of business to secure
liabilities to insurance carriers, lessors, utilities and other
service providers; and
(xi) bankers liens and rights of setoff with respect to
customary depository arrangements entered into in the ordinary
course of business.
"Permitted Testing Center Assets" means vehicles emission test site
equipment and the related test site or sites located in the United States
of America (or, solely with respect to Excluded Foreign Subsidiaries, in
any foreign jurisdiction) used or to be used by the Company or any of its
Subsidiaries in connection with a centralized emission testing program
pursuant to a State Contract.
"Permitted Testing Center Asset Sales" means sales of (i) Permitted
Testing Center Assets used under any State Contract in connection with any
change in emissions testing standards pursuant to the requirements of such
State Contract, but only so long as the Net Cash Proceeds of such sale are
used within two hundred seventy (270) days of the acquisition thereof to
acquire Permitted Testing Center Assets to be used under such State
Contract, or (ii) Permitted Testing Center Assets used in connection with
any State Contract that has been or is being terminated or cancelled
pursuant to the terms thereof or modified in a manner which makes such
equipment no longer useful or required in connection with such State
Contract, in any such case but only so long as the Net Cash Proceeds of
such sale are reinvested within two hundred seventy (270) days of the
receipt thereof (and three hundred sixty (360) days of the modification,
termination or cancellation of such State Contract) in Permitted Testing
Center Assets required by a different State Contract.
"Permitted Testing Center Proceeds" means the Net Cash Proceeds of
Permitted Testing Center Asset Sales.
"Person" means and includes natural persons, corporations, limited
partnerships, limited liability companies, general partnerships, joint
stock companies, joint ventures, associations, companies, trusts, banks,
trust companies, land trusts, business trusts or other organizations,
whether or not legal entities, and governments and agencies and political
subdivisions thereof and any other entities of whatever nature.
"Pledge Agreement" means that certain Pledge Agreement entered into
by and among the Company, the Parent, the Subsidiary Guarantors and the
Collateral Agent as of the Closing Date, or pursuant to subsection 6.9,
substantially in the form of Exhibit VII annexed hereto as such Pledge
Agreement may heretofore have been or hereafter may be amended, restated,
supplemented or otherwise modified from time to time.
"Prime Rate" means the rate of interest per annum publicly announced
from time to time by CSFB as its prime commercial lending rate in effect
at its principal office in New York City. The Prime Rate is a reference
rate and does not necessarily represent the lowest or best rate actually
charged to any customer. CSFB or any other Lender may make commercial
loans or other loans at rates of interest at, above or below the Prime
Rate.
"Pro Forma Basis" means, with respect to compliance with any test or
covenant
28
hereunder, compliance with such covenant or test after giving effect to
any proposed acquisition or other action which requires compliance on a
pro forma basis (including pro forma adjustments arising out of events
which are directly attributable to a specific transaction, are factually
supportable and are expected to have a continuing impact, in each case
determined on a basis consistent with Article 11 of Regulation S-X of the
Securities Act, which (to the extent consistent therewith) may include
cost savings resulting from head count reductions, closure of facilities
and similar restructuring charges, which pro forma adjustments shall be
certified by the chief financial officer of the Company), using, for
purposes of determining such compliance, the historical financial
statements of all entities or assets so acquired or to be acquired and the
consolidated financial statements of the Company and its Subsidiaries
(other than Excluded Foreign Subsidiaries) which shall be reformulated as
if such acquisition or other action, and any acquisitions which have been
consummated during the period, and any Indebtedness or other liabilities
incurred in connection with any such acquisition had been consummated at
the beginning of such period and assuming that such Indebtedness bears
interest during any portion of the applicable measurement period prior to
the relevant acquisition at the weighted average of the interest rates
applicable to outstanding Loans during such period, and otherwise in
conformity with such procedures as may be agreed upon between the
Administrative Agent and the Company.
"Pro Forma Compliance" means, at any date of determination, the
Company shall be in pro forma compliance with the covenants set forth in
subsections 7.6A, B and C as of the last day of the most recent Fiscal
Quarter end (computed on the basis of (i) balance sheet amounts as of the
most recently completed Fiscal Quarter, and (ii) income statement amounts
for the most recently completed period of four consecutive Fiscal
Quarters, in each case, for which financial statements shall have been
delivered to the Lenders and calculated on a Pro Forma Basis in respect of
the event giving rise to such determination and each event described in
subsection 7.F occurring during or after the end of such four consecutive
Fiscal Quarters period), and the Company shall have demonstrated such
compliance to the reasonable satisfaction of the Administrative Agent.
"Pro Rata Share" means (i) with respect to all payments,
computations and other matters relating to the Term A Loan Commitment or
the Term A Loans of any Lender, the percentage obtained by dividing (x)
the Term A Loan Exposure of that Lender by (y) the aggregate Term A Loan
Exposure of all the Lenders; (ii) with respect to all payments,
computations and other matters relating to the Term B Loan Commitment or
the Term B Loans of any Lender, the percentage obtained by dividing (x)
the Term B Loan Exposure of that Lender by (y) the aggregate Term B Loan
Exposure of all the Lenders; (iii) with respect to all payments,
computations and other matters relating to the Revolving Loan Commitment
or the Revolving Loans of any Lender or any Letters of Credit issued by
any Lender or any participations purchased by any Lender therein or in any
Swing Line Loans, the percentage obtained by dividing (x) the Revolving
Loan Exposure of that Lender by (y) the aggregate Revolving Loan Exposure
of all the Lenders; and (iv) for all other purposes with respect to each
Lender, the percentage obtained by dividing (x) the sum of the Term Loan
Exposure of that Lender and the Revolving Loan Exposure of that Lender by
(y) the sum of the aggregate Term Loan Exposure of all the Lenders and the
aggregate Revolving Loan Exposure of all the Lenders; in any such case as
the applicable percentage may be adjusted by assignments permitted
pursuant to subsection 10.1. The initial Pro Rata Share of each Lender for
purposes of each of clauses (i), (ii) and (iii) of the preceding sentence
is set forth opposite the name of that Lender in Schedule 2.1 annexed
hereto.
"Projections" has the meaning assigned to that term in subsection
5.3B.
29
"PTO" means the United States Patent and Trademark Office.
"Public Offering" means any public offering of any Capital Stock of
the Parent (whether a "primary" offering by the Parent or a "secondary"
offering by an existing shareholder of the Parent) pursuant to an
effective registration statement under the Securities Act (other than
pursuant to a registration statement on Form S-8 or otherwise relating to
equity securities issuable exclusively under any Employee Benefit Plan).
"Real Property Asset" means, at any time of determination, any
interest (fee, leasehold or otherwise) then owned by any Loan Party in any
real property.
"Recorded Leasehold Interest" means a Leasehold Property with
respect to which a Record Document (as hereinafter defined) has been
recorded in all places necessary or desirable, in the Collateral Agent's
reasonable judgment, to give constructive notice of such Leasehold
Property to third-party purchasers and encumbrancers of the affected real
property. For purposes of this definition, the term "Record Document"
means, with respect to any Leasehold Property, (a) the lease evidencing
such Leasehold Property or a memorandum thereof, executed and acknowledged
by the owner of the affected real property, as lessor, or (b) if such
Leasehold Property was acquired or subleased from the holder of a Recorded
Leasehold Interest, the applicable assignment or sublease document,
executed and acknowledged by such holder, in each case in form sufficient
to give such constructive notice upon recordation and otherwise in form
reasonably satisfactory to the Collateral Agent.
"Recovery Event" has the meaning assigned to that term in subsection
2.4B(iii)(d).
"Reference Lenders" means (i) CSFB and (ii) another Lender
determined by the Administrative Agent with the consent of the Company.
"Refunded Swing Line Loans" has the meaning assigned to that term in
subsection 2.1A(iv).
"Register" has the meaning assigned to that term in subsection 2.1D.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Reimbursement Date" has the meaning assigned to that term in
subsection 3.3B.
"Reinvestment Assets" means, in the case of any Reinvestment Event,
any assets (other than Indebtedness or Capital Stock of any Person) which
are either (i) in replacement of the assets subject to the Reinvestment
Event, or (ii) long term assets useful in the business of the Related
Subsidiary Group of the Person whose assets were subject to the
Reinvestment Event.
"Reinvestment Deferred Amount" means, with respect to any
Reinvestment Event, the aggregate Net Cash Proceeds (including, without
limitation, Permitted Testing Center Proceeds), Insurance Proceeds or
Condemnation Proceeds, as the case may be, received by the Company or any
of its Subsidiaries in connection therewith which are not applied to
prepay the Loans (and/or reduce the Revolving Loan Commitments) in
accordance with subsection 2.4B(iii)(a) or (d) as a
30
result of the delivery of a Reinvestment Notice.
"Reinvestment Event" means any Asset Sale or Recovery Event in
respect of which the Company has delivered a Reinvestment Notice.
"Reinvestment Notice" means a written notice executed by a
Responsible Officer stating that no Default or Event of Default has
occurred and is continuing and that the Company (directly or indirectly
through a member of the Related Subsidiary Group of the seller) intends
and expects to use all or a specified portion of the Net Cash Proceeds,
Insurance Proceeds or Condemnation Proceeds, as the case may be, of an
Asset Sale or Recovery Event to acquire Reinvestment Assets within two
hundred seventy (270) days of the receipt of such Net Cash Proceeds,
Insurance Proceeds or Condemnation Proceeds, as the case may be.
"Reinvestment Prepayment Amount" means, with respect to any
Reinvestment Event, the Reinvestment Deferred Amount, if any, relating
thereto less any amount expended prior to the relevant Reinvestment
Prepayment Date to acquire Reinvestment Assets.
"Reinvestment Prepayment Date" means, with respect to any
Reinvestment Event, the earlier of (a) the date occurring two hundred
seventy (270) days after such Reinvestment Event and (b) the date on which
the Company shall have determined not to, or shall have otherwise ceased
to, acquire Reinvestment Assets with all or any portion of the relevant
Reinvestment Deferred Amount.
"Related Subsidiary Group" means (i) with respect to the Company,
any wholly-owned Domestic Subsidiary which is a Subsidiary Guarantor, (ii)
with respect to any Domestic Subsidiary, the Company or any other Domestic
Subsidiary which is a Subsidiary Guarantor, (iii) with respect to any
Excluded Foreign Subsidiary, any other Excluded Foreign Subsidiary, (iv)
with respect to any Foreign Subsidiary Guarantor, the Company, any
Domestic Subsidiary which is a Subsidiary Guarantor or any other Foreign
Subsidiary Guarantor, (v) with respect to any Foreign Subsidiary which is
not an Excluded Foreign Subsidiary or a Foreign Subsidiary Guarantor, the
Company, any Domestic Subsidiary or any other Foreign Subsidiary which is
not an Excluded Foreign Subsidiary, and (vi) with respect to any SPC, no
other Person; provided, that, notwithstanding anything to the contrary,
with respect to any wholly-owned Subsidiary of the Company, any Subsidiary
which is a member of such wholly-owned Subsidiary's Related Subsidiary
Group shall also be a wholly-owned Subsidiary of the Company.
"Release" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of Hazardous Materials into the indoor or
outdoor environment (including, without limitation, the abandonment or
disposal of any barrels, containers or other closed receptacles containing
any Hazardous Materials), or into or out of any property, including the
movement of any Hazardous Material through the air, soil, surface water,
groundwater or property.
"Requisite Class Lenders" means, at any time of determination (i)
for the Class of the Lenders having Term A Loan Exposure, Non-Defaulting
Lenders having or holding more than 50% of the aggregate Term A Loan
Exposure of all Non-Defaulting Lenders, (ii) for the Class of Lenders
having Term B Loan Exposure, Non-Defaulting Lenders having or holding more
than 50% of the aggregate Term B Loan Exposure of all Non-Defaulting
Lenders, and (iii) for the
31
Class of Lenders having Revolving Loan Exposure, Non-Defaulting Lenders
having or holding more than 50% of the aggregate Revolving Loan Exposure
of all Non-Defaulting Lenders; provided, however, that until such time as
a successful syndication of the Commitments has been completed such that
no Lender, together with its Affiliates, has more than 40% of the sum of
the aggregate Term Loan Exposure of all Non-Defaulting Lenders and the
aggregate Revolving Loan Exposure of all Non-Defaulting Lenders,
"Requisite Class Lenders" shall mean (i) for the Class of Lenders having
Term A Loan Exposure, at least two (or one, if there is only one
Non-Defaulting Lender with Term A Loan Exposure) Non-Defaulting Lenders
having or holding at least two-thirds of the sum of the aggregate Term A
Loan Exposure of all Non-Defaulting Lenders; (ii) for the Class of Lenders
having Term B Loan Exposure, at least two (or one, if there is only one
Non-Defaulting Lender with Term B Loan Exposure) Non-Defaulting Lenders
having or holding at least two-thirds of the sum of the aggregate Term B
Loan Exposure of all Non-Defaulting Lenders; and (iii) for the Class of
Lenders having Revolving Loan Exposure, at least two (or one, if there is
only one Non-Defaulting Lender with Revolving Loan Exposure)
Non-Defaulting Lenders having or holding at least two-thirds of the sum of
the aggregate Revolving Loan Exposure of all Non-Defaulting Lenders.
"Requisite Lenders" means Non-Defaulting Lenders having or holding
more than 50% of the sum of the aggregate Term Loan Exposure of all
Non-Defaulting Lenders and the aggregate Revolving Loan Exposure of all
Non-Defaulting Lenders; provided, however, that until such time as a
successful syndication of the Commitments has been completed such that no
Lender, together with its Affiliates, has more than 40% of the sum of the
aggregate Term Loan Exposure of all Non-Defaulting Lenders and the
aggregate Revolving Loan Exposure of all Non-Defaulting Lenders, the
"Requisite Lenders" shall mean at least two (or one, if there is only one
Non-Defaulting Lender) Non-Defaulting Lenders having or holding at least
two-thirds of the sum of the aggregate Term Loan Exposure of all
Non-Defaulting Lenders and the aggregate Revolving Loan Exposure of all
Non-Defaulting Lenders.
"Reserve Adjusted Eurodollar Rate" means, with respect to each day
during each Interest Period pertaining to a Eurodollar Rate Loan, a rate
per annum determined for such day in accordance with the following
formula:
Eurodollar Base Rate
---------------------------
1.00 - Eurocurrency Reserve Requirements
"Responsible Officer" means the chief executive officer, president,
executive vice president, general counsel or chief financial officer of
the Company, but in any event, with respect to financial matters, the
chief financial officer or treasurer of the Company.
"Restricted Payment" means (i) any dividend or other distribution,
direct or indirect, on account of any shares of any class of stock (or of
any other Capital Stock) of the Parent, the Company or any of their
respective Subsidiaries now or hereafter outstanding, except a dividend
payable solely in shares of that class of stock to the holders of that
class, (ii) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any shares
of any class of stock (or of any other Capital Stock) of the Parent, the
Company or
32
any of their respective Subsidiaries now or hereafter outstanding, (iii)
any payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of stock
(or of any other Capital Stock) of the Parent, the Company or any of their
respective Subsidiaries now or hereafter outstanding, (iv) any payment or
prepayment of principal of, premium, if any, or interest on, or
redemption, purchase, retirement, defeasance (including in substance or
legal defeasance), sinking fund or similar payment with respect to, any
Subordinated Indebtedness or Senior Discount Notes, and (v) any voluntary
prepayment of any Ohio Debt.
"Revolving Loan Commitment" means the commitment of a Lender to make
Revolving Loans to the Company pursuant to subsection 2.1A(iii) and
"Revolving Loan Commitments" means such commitments of all Lenders in the
aggregate.
"Revolving Loan Commitment Termination Date" means, if the initial
Loans are made on or before October 16, 1998, March 31, 2004; otherwise,
the "Revolving Loan Commitment Termination Date" means October 16, 1998.
"Revolving Loan Exposure" means, with respect to any Lender as of
any date of determination (i) prior to the termination of the Revolving
Loan Commitments, that Lender's Revolving Loan Commitment and (ii) after
the termination of the Revolving Loan Commitments, the sum of (a) the
aggregate outstanding principal amount of the Revolving Loans of that
Lender plus (b) in the event that Lender is an Issuing Bank, the aggregate
Letter of Credit Usage in respect of all Letters of Credit issued by that
Lender (net of any participations purchased by other Lenders in such
Letters of Credit) plus (c) the aggregate amount of all participations
purchased by that Lender in any outstanding Letters of Credit or any
unreimbursed drawings under any Letters of Credit plus (d) the aggregate
amount of all participations purchased by that Lender in any outstanding
Swing Line Loans plus (e) in the case of Swing Line Lender, the sum of the
aggregate outstanding principal amount of all Swing Line Loans (in each
case net of any participations therein purchased by other Lenders).
"Revolving Loans" means the Loans made by the Lenders to the Company
pursuant to subsection 2.1A(iii).
"Revolving Notes" means (i) the promissory notes of Company issued
pursuant to subsection 2.1E(iii) on the Closing Date and (ii) any
promissory notes issued by Company pursuant to the last sentence of
subsection 10.1B(i) in connection with assignments of the Revolving Loan
Commitment and Revolving Loans of any Lender, in each case substantially
in the form of Exhibit V-A annexed hereto, as they may be amended,
restated, supplemented or otherwise modified from time to time.
"Securities" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds,
debentures, notes, or other evidences of indebtedness, secured or
unsecured, convertible, subordinated or otherwise, or in general any
instruments commonly known as "securities" or any certificates of
interest, shares or participations in temporary or interim certificates
for the purchase or acquisition of, or any right to subscribe to, purchase
or acquire, any of the foregoing.
"Security Agreement" means the Security Agreement entered into by
and among the Company, the Subsidiary Guarantors and the Collateral Agent
on and as of the Closing Date, or pursuant to subsection 6.9,
substantially in the form of Exhibit VIII annexed hereto, as such
33
Security Agreement may heretofore have been or hereafter may be amended,
restated, supplemented or otherwise modified from time to time.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, and any successor statute.
"Senior Discount Note Indenture" means the Indenture dated as of a
date occurring on or about the Closing Date among the Parent, as Issuer,
and United States Trust Company of Texas, N.A., as the Trustee, as such
Indenture may thereafter have been or may be amended, restated,
supplemented or otherwise modified from time to time (i) on or prior to
the Closing Date pursuant to documentation in form and substance
reasonably satisfactory to the Administrative Agent and the Requisite
Lenders or (ii) thereafter to the extent permitted under subsection 7.13.
"Senior Discount Note Related Documents" means any or all of, as the
context may require, (i) the Senior Discount Notes, (ii) the Senior
Discount Note Indenture, (iii) the Placement Agreement dated October 15,
1998 among the Parent, the Company and Credit Suisse First Boston
Corporation, and (iv) the Subscription Agreement dated as of October 15,
1998 among the Parent and the Persons party thereto as purchasers, as any
of the foregoing may thereafter have been or may be amended, restated,
supplemented or otherwise modified from time to time (a) on or prior to
the Closing Date pursuant to documentation in form and substance
reasonably satisfactory to the Administrative Agent and the Requisite
Lenders or (b) thereafter to the extent permitted under subsection 7.13.
"Senior Discount Notes" means the 15% Senior Discount Notes due 2009
issued by the Parent pursuant to the Senior Discount Note Indenture.
"Senior Subordinated Note Indenture" means the Indenture dated as of
a date occurring on or about the Closing Date among the Company, as
Issuer, the Subsidiaries of the Company named therein as Guarantors, and
United States Trust Company of Texas, N.A., as the Trustee, as such
Indenture may thereafter have been or may be amended, restated,
supplemented or otherwise modified from time to time (i) on or prior to
the Closing Date pursuant to documentation in form and substance
reasonably satisfactory to the Administrative Agent and the Requisite
Lenders or (ii) thereafter to the extent permitted under subsection 7.13.
"Senior Subordinated Note Related Documents" means any or all of, as
the context may require, (i) the Senior Subordinated Notes, (ii) the
Senior Subordinated Note Indenture, (iii) the Placement Agreement dated
October 15, 1998 among the Parent, the Company, the Subordinated Note
Guarantors (as defined below) and Credit Suisse First Boston Corporation,
(iv) the Subscription Agreement dated as of October 15, 1998 among the
Parent, the Company, the Subsidiaries of the Company named therein as
Guarantors (as used in this definition, the "Subordinated Note
Guarantors"), and the Persons party thereto as Purchasers (as used in this
definition, the "Purchasers"), and (v) the Registration Rights Agreement
dated as of a date occurring on or about the Closing Date among the
Parent, the Company and the Purchasers, as any of the foregoing may
thereafter have been or may be amended, restated, supplemented or
otherwise modified from time to time (a) on or prior to the Closing Date
pursuant to documentation in form and substance reasonably satisfactory to
the Administrative Agent and the Requisite Lenders or (b) thereafter to
the extent permitted under subsection 7.13.
34
"Senior Subordinated Notes" means the $100,000,000 aggregate
original principal amount of 13% Senior Subordinated Notes due 2008 issued
by the Company pursuant to the Senior Subordinated Note Indenture.
"Shares" means all of issued and outstanding shares of the Class A
Common Stock, par value $0.01 per share, of ENR.
"Shares Acquisition" means the acquisition by Stone Rivet of the
Shares (or portion thereof, which, in no event, shall be less than the
Minimum Shares) as contemplated by the ENR Merger Agreement and the Shares
Offer to Purchase.
"Shares Offer to Purchase" means the Offer to Purchase dated August
19, 1998 in respect of an offer by Stone Rivet to purchase the Shares for
a cash payment of $17.25 per share, as such Offer to Purchase may
thereafter have been or may be amended, restated, supplemented or
otherwise modified from time to time (i) on or prior to the Closing Date
pursuant to documentation in form and substance reasonably satisfactory to
the Administrative Agent and the Requisite Lenders or (ii) thereafter to
the extent permitted under subsection 7.13A.
"Shares Tender Offer" means the recommended cash tender offer by
Stone Rivet to acquire the Shares pursuant to the Shares Offer to
Purchase.
"Solvent" means, with respect to any Person, that as of the date of
determination both (i) (a) the then fair saleable value of the property of
such Person is (y) greater than the total amount of liabilities (including
contingent liabilities but excluding amounts payable under intercompany
promissory notes) of such Person and (z) not less than the amount that
will be required to pay the probable liabilities on such Person's then
existing debts as they become absolute and matured considering all
financing alternatives and potential asset sales reasonably available to
such Person; (b) such Person's capital is not unreasonably small in
relation to its business or any contemplated or undertaken transaction;
and (c) such Person does not intend to incur, or believe (nor should it
reasonably believe) that it will incur, debts beyond its ability to pay
such debts as they become due; and (ii) such Person is "solvent" within
the meaning given that term and similar terms under applicable laws
relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be
computed as the amount that, in light of all of the facts and
circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
"SPC" means any special purpose Domestic Subsidiary of the Company
(i) created for the purpose of incurring, directly or indirectly,
Indebtedness permitted under subsection 7.1(iv), (ii) whose Indebtedness
and other obligations are without recourse to any of the Loan Parties, any
of the Company's other Subsidiaries or any of their respective assets, and
(iii) that does not and shall not at any time, (a) engage in any business
or activity other than operating, owning and/or financing the acquisition
or build-out of Permitted Testing Center Assets and any activities
incidental thereto or (b) become liable for any other Indebtedness.
"Standby Letter of Credit" means any standby letter of credit or
similar instrument, in form and substance acceptable to the Issuing Bank,
issued for the purpose of supporting obligations of the Company and its
Subsidiaries (other than Excluded Foreign Subsidiaries and SPCs) incurred
or arising in the ordinary course of business; provided that Standby
Letters of Credit may not be
35
issued for the purpose of supporting (a) trade payables or (b) any
Indebtedness other than (i) the Ohio Debt in a stated amount under such
Standby Letters of Credit not to exceed the minimum amount required by the
terms of the Ohio Debt as of the date hereof, and (ii) other Indebtedness
permitted hereunder in a stated amount under such Standby Letters of
Credit not to exceed $10,000,000 in the aggregate incurred for the purpose
of financing for Permitted Testing Center Assets in connection with the
award of a State Contract.
"State Contract" means any contract, undertaking, agreement or other
arrangement with any Governmental Authority pursuant to which the Company
or any of its Subsidiaries provides or will provide centralized or other
vehicle emissions testing services.
"Stockholders Agreement" means that certain Investors Agreement to
be entered into on or prior to the Closing Date by and among the Parent
and certain shareholders of the Parent, which Investors Agreement shall be
in form and substance reasonably satisfactory to Agents, as such Investors
Agreement may heretofore have been or hereafter may be amended, restated,
supplemented or otherwise modified from time to time in accordance with
the provisions of subsection 7.13A.
"Stone Rivet" means Stone Rivet, Inc., a Delaware corporation.
"Subordinated Indebtedness" means the Indebtedness under the Senior
Subordinated Note Related Documents.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, association, joint venture or other business entity of which
more than 50% of the total voting power of shares of stock or other
ownership interests entitled (without regard to the occurrence of any
contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar
functions) having the power to direct or cause the direction of the
management and policies thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof.
"Subsidiary Guarantor" means any Subsidiary of the Company that is a
party to the Subsidiary and Parent Guaranty or any other Guaranty on the
Closing Date (which shall be each Domestic Subsidiary existing as of the
Closing Date, Newmall and ▇▇▇▇▇▇▇ UK) or at any time after the Closing
Date pursuant to subsection 6.9.
"Subsidiary and Parent Guaranty" means the Subsidiary and Parent
Guaranty, substantially in the form of Exhibit VI annexed hereto, executed
and delivered by the Parent and the Subsidiary Guarantors (other than the
Foreign Subsidiary Guarantors) as of the Closing Date or by any additional
Subsidiary Guarantor from time to time thereafter pursuant to subsection
6.9, as such Subsidiary and Parent Guaranty may heretofore have been or
hereafter may be amended, restated, supplemented or otherwise modified
from time to time.
"Swing Line Lender" means CSFB, or any Person serving as a successor
Administrative Agent hereunder, in its capacity as Swing Line Lender
hereunder.
"Swing Line Loan Commitment" means the commitment of Swing Line
Lender to make
36
Swing Line Loans to Company pursuant to subsection 2.1A(iv).
"Swing Line Loans" means the Loans made by Swing Line Lender
pursuant to subsection 2.1A(iv).
"Swing Line Note" means (i) the promissory note of Company issued
pursuant to subsection 2.1E(iv) on the Closing Date and (ii) any
promissory note issued by Company to any successor Swing Line Lender
pursuant to the last sentence of subsection 9.5B, in each case
substantially in the form of Exhibit V-B annexed hereto, as it may be
amended, restated, supplemented or otherwise modified from time to time.
"Syndication Agent" has the meaning assigned to that term in the
Preamble to this Agreement.
"Tax" or "Taxes" means any present or future tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature and whatever
called, by whomsoever, on whomsoever and wherever imposed, levied,
collected, withheld or assessed; provided that "Tax on the overall net
income" of a Person shall be construed as a reference to a tax imposed by
the jurisdiction in which that Person's principal office (and/or, in the
case of a Lender, its relevant Lending Office) is located or in which that
Person is deemed to be doing business on all or part of the net income,
profits or gains of that Person (whether worldwide, or only insofar as
such income, profits or gains are considered to arise in or to relate to a
particular jurisdiction, or otherwise).
"Term A Loan Commitment" means the commitment of a Lender to make a
Term A Loan to the Company pursuant to subsection 2.1A(i), and "Term A
Loan Commitments" means such commitments of all Lenders in the aggregate.
"Term A Loan Exposure" means, with respect to any Lender, as of any
date of determination (i) prior to the funding of the Term A Loans, that
Lender's Term A Loan Commitment and (ii) after the funding of the Term A
Loans, the outstanding principal amount of the Term A Loan of that Lender.
"Term A Loans" means the Loans made by the Lenders pursuant to
subsection 2.1A(i).
"Term A Notes" means (i) the promissory notes of the Company issued
pursuant to subsection 2.1E(i) on the Closing Date and (ii) any promissory
notes issued by the Company pursuant to the last sentence of subsection
10.1B(i) in connection with assignments of the Term A Loans of any Lender,
in each case substantially in the form of Exhibit IV-A annexed hereto, as
they may be amended, restated, supplemented or otherwise modified from
time to time.
"Term B Loan Commitment" means the commitment of a Lender to make a
Term B Loan to the Company pursuant to subsection 2.1A(ii), and "Term B
Loan Commitments" means such commitments of all Lenders in the aggregate.
"Term B Loan Exposure" means, with respect to any Lender, as of any
date of determination (i) prior to the funding of the Term B Loans, that
Lender's Term B Loan Commitment and (ii) after the funding of the Term B
Loans, the outstanding principal amount of the Term B Loan of that Lender.
37
"Term B Loans" means the Loans made by the Lenders pursuant to
subsection 2.1A(ii).
"Term B Notes" means (i) the promissory notes of the Company issued
pursuant to subsection 2.1E(ii) on the Closing Date and (ii) any
promissory notes issued by the Company pursuant to the last sentence of
subsection 10.1B(i) in connection with assignments of the Term B Loans of
any Lender, in each case substantially in the form of Exhibit IV-B annexed
hereto, as they may be amended, restated, supplemented or otherwise
modified from time to time.
"Term Loan Commitment" means the Term A Loan Commitment or the Term
B Loan Commitment of a Lender, and "Term Loan Commitments" means such
commitments of all Lenders in the aggregate.
"Term Loan Exposure" means, with respect to any Lender as of any
date of determination, the aggregate Term A Loan Exposure and Term B Loan
Exposure of that Lender.
"Term Loans" means the Term A Loans and the Term B Loans.
"Term Notes" means the Term A Notes and the Term B Notes.
"Title Company" means, collectively, one or more title insurance
companies reasonably satisfactory to the Administrative Agent.
"Total Utilization of Revolving Loan Commitments" means, as at any
date of determination, the sum of (i) the aggregate principal amount of
all outstanding Revolving Loans (other than Revolving Loans made for the
purpose of repaying any Refunded Swing Line Loans or reimbursing the
applicable Issuing Bank for any amount drawn under any Letter of Credit
but not yet so applied) plus (ii) the aggregate principal amount of all
outstanding Swing Line Loans plus (iii) the Letter of Credit Usage.
"Transaction Costs" means the fees, costs and expenses payable by
the Company and its Subsidiaries in connection with the Transactions and
set forth in the schedule delivered by the Company pursuant to subsection
4.1I, including, without limitation, amounts payable to the Agents and the
Lenders and change of control payments required to be made pursuant to
employment agreements between ENR and persons that will not be employed by
the Company or any of its Subsidiaries after giving effect to the
Transactions.
"Transaction Documents" means, collectively, (i) any documentation
related to the Equity Contribution, (ii) any documentation related to any
repayment of Newmall ESP Intercompany Indebtedness or any Existing Debt,
(iii) the Newmall Stock Contribution Agreement and the Company
Contribution Agreement, (iv) the Senior Discount Note Related Documents
and the Senior Subordinated Note Related Documents, (v) the Shares Offer
to Purchase, (vi) the ENR Merger Agreement, (vii) the Merger Certificate,
(viii) any documentation related to the ENR Transfer, which documentation
may be executed and delivered after the Closing Date, (ix) the Debt Tender
Offer Materials, (x) the Existing Senior Note Indenture and Existing
Senior Subordinated Note Indenture, (xi) the Existing Indentures
Amendments, (xii) the Loan Documents, (xii) the Stockholders Agreement,
and (xiii) and any and all other documents, agreements, instruments and
arrangements related to or in connection with any of the foregoing or any
other
38
Transaction.
"Transactions" means, collectively, (i) the Equity Contribution and
the repayment of the Newmall ESP Intercompany Indebtedness with the
proceeds thereof, (ii) the Newmall Stock Contribution and the Company
Stock Contribution, (iii) the issuance and sale of the Senior Discount
Notes by the Parent and the contribution of the gross proceeds thereof,
net of reasonable fees and expenses, by the Parent to the Company and the
issuance and sale of the Senior Subordinated Notes by the Company, (iv)
the Shares Tender Offer and the Shares Acquisition, (v) the Debt Tender
Offer, the purchase of all Existing Senior Notes and Existing Senior
Subordinated Notes tendered pursuant thereto and the effecting of the
Existing Indentures Amendments, (vi) the ENR Merger, (vii) the ENR
Transfer, which may be consummated after the Closing Date, (viii) loans
from the Company to ESP and Stone Rivet in amounts (and evidenced by
notes) reasonably satisfactory to the Administrative Agent for purposes of
funding, in whole or in part, (A) in the case of ESP, payment of its
Existing Debt and Transaction Costs and (B) in the case of Stone Rivet,
payments in respect of Existing Debt of ENR, the Shares Acquisition, the
ENR Merger and its and ENR's Transaction Costs, (ix) the repayment of all
Existing Debt (other than that purchased pursuant to the Debt Tender
Offer), (x) the making of the Loans, and (xi) any other transactions
contemplated by or entered into in connection with the Transaction
Documents.
"Unfunded Current Liability" means, with respect to any Pension
Plan, the amount, if any, by which the actuarial present value of the
accumulated plan benefits under such Pension Plan as of the close of its
most recent plan year exceeds the fair market value of the assets
allocable thereto, each determined in accordance with Statement of
Financial Accounting Standards No. 87, based upon the actuarial
assumptions used by such Pension Plan's actuary in the most recent annual
valuation of such Pension Plan.
"▇▇▇▇▇▇▇ UK" means ▇▇▇▇▇▇▇ Overseas Ltd., (Registered number
1581549) a private limited company incorporated in England and Wales.
"Wellman US" means ▇▇▇▇▇▇▇ North America Inc., a Delaware
corporation.
"Year 2000 Problems" means limitations in the capacity or readiness
to handle date information (including, without limitation, calculations
based on date information) for the Year 1999 or years beginning January 1,
2000 of any of the hardware, firmware or software systems ("Systems")
associated with information processing and delivery, operations or
services (e.g., security and alarms, elevators, communications, and HVAC),
including, without limitation, equipment containing embedded microchips,
operated by, provided to or otherwise reasonably necessary to the business
or operations of the Company and its Subsidiaries.
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under
Agreement.
Except as otherwise expressly provided in this Agreement, (a) all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP; and (b) financial statements and other
information required to be delivered by the Company to the Lenders pursuant to
clauses (i), (ii), (iii) and (xiii) of subsection 6.1 shall be prepared in
accordance with GAAP (except, with respect to interim financial statements,
normal year-end audit adjustments and the absence of explanatory footnotes) as
in effect at the time of such preparation (and delivered together with the
reconciliation statements provided for in subsection 6.1(v)). Calculations in
connection with the definitions, covenants
39
and other provisions of this Agreement shall utilize accounting principles and
policies in conformity with those used to prepare the financial statements of
the Subsidiaries of the Company referred to in subsection 5.3A.
1.3 Other Definitional Provisions.
References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided. Any of the terms defined in subsection 1.1 may, unless the context
otherwise requires, be used in the singular or the plural, depending on the
reference. The words "includes," "including" and similar forms used in any Loan
Document shall be construed as if followed by the words "without limitation."
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 Commitments; Loans.
A. Commitments. Subject to the terms and conditions of this Agreement and
in reliance upon the representations and warranties of Loan Parties set forth
herein and in the other Loan Documents, each Lender hereby severally agrees to
make the Loans described in subsections 2.1A(i), 2.1A(ii) and 2.1A(iii) and the
Swing Line Lender hereby agrees to make the Swing Line Loans as described in
subsection 2.1A(iv).
(i) Term A Loans. Each Lender severally agrees to make Loans to the
Company on the Closing Date in an aggregate amount not exceeding its Pro
Rata Share of the aggregate amount of the Term A Loan Commitments to be
used for the purposes identified in subsection 2.5A. The amount of each
Lender's Term A Loan Commitment is set forth opposite its name on Schedule
2.1 annexed hereto and the aggregate amount of the Term Loan Commitments
is $175,000,000; provided that the Term A Loan Commitments of the Lenders
shall be adjusted to give effect to any assignments of the Term A Loan
Commitments pursuant to subsection 10.1B. Each Lender's Term Loan
Commitment shall expire immediately and without further action on October
16, 1998 if the Term A Loans are not made on or before that date. The
Company may make only one borrowing under the Term A Loan Commitments.
Amounts borrowed under this subsection 2.1A(i) and subsequently repaid or
prepaid may not be reborrowed.
(ii) Term B Loans. Each Lender severally agrees to make Loans to the
Company on the Closing Date in an aggregate amount not exceeding its Pro
Rata Share of the aggregate amount of the Term B Loan Commitments to be
used for the purposes identified in subsection 2.5A. The amount of each
Lender's Term B Loan Commitment is set forth opposite its name on Schedule
2.1 annexed hereto and the aggregate amount of the Term B Loan Commitments
is $210,000,000; provided that the Term B Loan Commitments of the Lenders
shall be adjusted to give effect to any assignments of the Term Loan
Commitments pursuant to subsection 10.1B. Each Lender's Term Loan
Commitment shall expire immediately and without further action on October
16, 1998 if the Term B Loans are not made on or before that date. The
Company may make only one borrowing under the Term B Loan Commitments.
Amounts borrowed under this subsection 2.1A(ii) and subsequently repaid or
prepaid may not be reborrowed.
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(iii) Revolving Loans. Each Lender severally agrees, subject to the
limitations set forth below with respect to the maximum amount of
Revolving Loans permitted to be outstanding from time to time, to lend to
the Company from time to time during the period from the Closing Date to
but excluding the Revolving Loan Commitment Termination Date an aggregate
amount not exceeding its Pro Rata Share of the aggregate amount of the
Revolving Loan Commitments, to be used for the purposes identified in
subsection 2.5A or B, as applicable, including, without limitation, the
Initial Revolving Loans on the Closing Date. The original amount of each
Lender's Revolving Loan Commitment is set forth opposite its name on
Schedule 2.1 annexed hereto and the aggregate original amount of the
Revolving Loan Commitments is $50,000,000; provided that the Revolving
Loan Commitments of the Lenders shall be adjusted to give effect to any
assignments of the Revolving Loan Commitments pursuant to subsection
10.1B; provided further that the amount of the Revolving Loan Commitments
shall be reduced from time to time by the amount of any reductions thereto
made pursuant to subsections 2.4B. Each Lender's Revolving Loan Commitment
shall expire on the Revolving Loan Commitment Termination Date and all
Revolving Loans and all other amounts owed hereunder with respect to the
Revolving Loans and the Revolving Loan Commitments shall be paid in full
no later than that date. Amounts borrowed under this subsection 2.1A(iii)
may be repaid and reborrowed, subject to the limitations and conditions
set forth herein, to but excluding the Revolving Loan Commitment
Termination Date.
Notwithstanding anything contained herein to the contrary, in no
event shall the Total Utilization of Revolving Loan Commitments at any
time exceed the Revolving Loan Commitments then in effect.
(iv) Swing Line Loans. The Swing Line Lender hereby agrees, subject
to the limitations set forth below with respect to the maximum aggregate
amount of all Swing Line Loans outstanding from time to time, to make a
portion of the Revolving Loan Commitments available to the Company from
time to time during the period from the Closing Date to but excluding the
Revolving Loan Commitment Termination Date by making Base Rate Loans as
Swing Line Loans to the Company in an aggregate amount not to exceed the
amount of the Swing Line Loan Commitment, to be used for the purposes
identified in subsection 2.5B, notwithstanding the fact that such Swing
Line Loans, when aggregated with the sum of the Swing Line Lender's
outstanding Revolving Loans and the Swing Line Lender's Pro Rata Share of
the Letter of Credit Usage then in effect, may exceed the Swing Line
Lender's Revolving Loan Commitment. The original amount of the Swing Line
Loan Commitment is $5,000,000; provided that the amounts of the Swing Line
Loan Commitment are subject to reduction as provided in clause (b) of the
next paragraph. The Swing Line Loan Commitment shall expire on the
Revolving Loan Commitment Termination Date and all Swing Line Loans and
all other amounts owed hereunder with respect to the Swing Line Loans
shall be paid in full no later than that date. Amounts borrowed under this
subsection 2.1A(iv) may be repaid and reborrowed to but excluding the
Revolving Loan Commitment Termination Date.
Notwithstanding anything contained herein to the contrary, the Swing
Line Loans and the Swing Line Loan Commitment shall be subject to the
following limitations:
(a) in no event shall the Total Utilization of Revolving Loan
Commitments at any time exceed the Revolving Loan Commitments then
in effect;
(b) any reduction of the Revolving Loan Commitments made
pursuant to subsection 2.4B which reduces the aggregate Revolving
Loan Commitments to an amount less than the then current amount of
the Swing Line Loan Commitment shall result in an
41
automatic corresponding reduction of the Swing Line Loan Commitment
such that the amount thereof equals the amount of the Revolving Loan
Commitments, as so reduced, without any further action on the part
of the Company, the Administrative Agent or the Swing Line Lender;
and
(c) the Swing Line Lender shall have no obligation to make any
Swing Line Loans during any period when a Lender Default exists,
unless the Swing Line Lender has entered into arrangements
satisfactory to it and the Company to eliminate the Swing Line
Lender's risk with respect to the Defaulting Lender, including by
cash collateralizing such Defaulting Lender's Pro Rata Share of the
Revolving Loans that may be required to be made to refund the
applicable Swing Line Loan as contemplated by the immediately
following paragraph.
With respect to any Swing Line Loans which have not been voluntarily
prepaid by the Company pursuant to subsection 2.4B(i), the Swing Line
Lender may, at any time in its sole and absolute discretion, deliver to
the Administrative Agent (with a copy to the Company), no later than 11:00
a.m. (New York time) at least one (1) Business Day in advance of the
proposed Funding Date, a notice (which shall be deemed to be a Notice of
Borrowing given by the Company) requesting the Lenders to make Revolving
Loans that are Base Rate Loans to the Company on such Funding Date in an
amount equal to the amount of such Swing Line Loans (the "Refunded Swing
Line Loans") outstanding on the date such notice is given which the Swing
Line Lender requests the Lenders to prepay. Anything contained in this
Agreement to the contrary notwithstanding, (i) the proceeds of such
Revolving Loans made by the Lenders other than the Swing Line Lender shall
be immediately delivered by the Administrative Agent to the Swing Line
Lender (and not to the Company) and applied to repay a corresponding
portion of the Refunded Swing Line Loans and (ii) on the day such
Revolving Loans are made, the Swing Line Lender's Pro Rata Share of the
Refunded Swing Line Loans shall be deemed to be paid with the proceeds of
a Revolving Loan made by the Swing Line Lender to the Company, and such
portion of the Swing Line Loans deemed to be so paid shall no longer be
outstanding as Swing Line Loans and shall no longer be due under the Swing
Line Note of the Swing Line Lender but shall instead constitute part of
the Swing Line Lender's outstanding Revolving Loans to the Company and
shall be due under the Revolving Note issued by the Company to the Swing
Line Lender. The Company hereby authorizes the Administrative Agent and
the Swing Line Lender to charge the Company's accounts with the
Administrative Agent and the Swing Line Lender (up to the amount available
in each such account) in order to immediately pay the Swing Line Lender
the amount of the Refunded Swing Line Loans to the extent the proceeds of
such Revolving Loans made by the Lenders, including the Revolving Loan
deemed to be made by the Swing Line Lender, are not sufficient to repay in
full the Refunded Swing Line Loans. If any portion of any such amount paid
(or deemed to be paid) to the Swing Line Lender should be recovered by or
on behalf of the Company from the Swing Line Lender in bankruptcy, by
assignment for the benefit of creditors or otherwise, the loss of the
amount so recovered shall be ratably shared among all Lenders in the
manner contemplated by subsection 10.5.
If for any reason Revolving Loans are not made pursuant to this
subsection 2.1A(iv) in an amount sufficient to repay any amounts owed to
the Swing Line Lender in respect of any outstanding Swing Line Loans on or
before the third (3rd) Business Day after demand for payment thereof by
the Swing Line Lender, each Lender shall be deemed to, and hereby agrees
to, have purchased a participation in such outstanding Swing Line Loans,
and in an amount equal to its Pro
42
Rata Share of the applicable unpaid amount together with accrued interest
thereon. Upon one (1) Business Day's notice from the Swing Line Lender,
each Lender shall deliver to the Swing Line Lender an amount equal to its
respective participation in the applicable unpaid amount in same day funds
at the office of the Swing Line Lender located at the Funding and Payment
Office. In order to evidence such participation each Lender agrees to
enter into a participation agreement at the request of the Swing Line
Lender in form and substance satisfactory to the Swing Line Lender. In the
event any Lender fails to make available to the Swing Line Lender the
amount of such Lender's participation as provided in this paragraph, the
Swing Line Lender shall be entitled to recover such amount on demand from
such Lender together with interest thereon at the rate customarily used by
the Swing Line Lender for the correction of errors among banks for three
(3) Business Days and thereafter at the Base Rate, as applicable.
Notwithstanding anything contained herein to the contrary, (i) each
Lender's obligation to make Revolving Loans for the purpose of repaying
any Refunded Swing Line Loans pursuant to the second preceding paragraph
and each Lender's obligation to purchase a participation in any unpaid
Swing Line Loans pursuant to the immediately preceding paragraph shall be
absolute and unconditional and shall not be affected by any circumstance,
including without limitation (a) any set-off, counterclaim, recoupment,
defense or other right which such Lender may have against the Swing Line
Lender, the Company or any other Person for any reason whatsoever; (b) the
occurrence or continuation of a Default or Event of Default; (c) any
adverse change in the business, operations, properties, assets, condition
(financial or otherwise) or prospects of the Company or any of its
Subsidiaries; (d) any breach of this Agreement or any other Loan Document
by any party thereto; or (e) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing; provided that
such obligations of each Lender are subject to the condition that the
Swing Line Lender believed in good faith that all conditions under Section
4 to the making of the applicable Refunded Swing Line Loans or other
unpaid Swing Line Loans, were satisfied at the time such Refunded Swing
Line Loans or unpaid Swing Line Loans were made, or the satisfaction of
any such condition not satisfied had been waived by Requisite Lenders
prior to or at the time such Refunded Swing Line Loans or other unpaid
Swing Line Loans were made; and (ii) the Swing Line Lender shall not be
obligated to make any Swing Line Loans if it has elected not to do so
after the occurrence and during the continuation of a Default or Event of
Default.
B. Borrowing Mechanics. Term Loans or Revolving Loans (including any such
Loans made as Eurodollar Rate Loans with a particular Interest Period) made on
any Funding Date (other than Revolving Loans made pursuant to a request by the
Swing Line Lender pursuant to subsection 2.1A(iv) for the purpose of repaying
any Refunded Swing Line Loans and Revolving Loans made pursuant to subsection
3.3B for the purpose of reimbursing the Issuing Bank for the amount of a drawing
or payment under a Letter of Credit issued by it) shall be in an aggregate
minimum amount of $2,000,000 and integral multiples of $500,000 in excess of
that amount; provided that any Eurodollar Rate Loan shall be in a minimum amount
of $2,500,000 and integral multiples of $500,000 in excess of that amount. Swing
Line Loans made on any Funding Date shall be in an aggregate minimum amount of
$500,000 and integral multiples of $100,000 in excess of that amount. Whenever
the Company desires that the Lenders make Term Loans or Revolving Loans it shall
deliver to the Administrative Agent a Notice of Borrowing no later than 11:00
a.m. (New York time), at least three (3) Business Days in advance of the
proposed Funding Date in the case of a Eurodollar Rate Loan, or at least one (1)
Business Day in advance of the proposed Funding Date in the case of a Base Rate
Loan. Whenever the Company desires that the Swing Line Lender make a Swing Line
Loan, it shall deliver to Administrative Agent a Notice of Borrowing no
43
later than 11:00 a.m. (New York time) on the proposed Funding Date. The Notice
of Borrowing shall specify (i) the proposed Funding Date (which shall be a
Business Day), (ii) the amount and type of Loans requested, (iii) in the case of
Swing Line Loans and Loans made on the Closing Date, that such Loans shall be
Base Rate Loans, (iv) in the case of any Loans other than Swing Line Loans,
whether such Loans shall be Base Rate Loans or Eurodollar Rate Loans, and (v) in
the case of any Loans requested to be made as Eurodollar Rate Loans, the initial
Interest Period requested therefor. Term Loans and Revolving Loans may be
continued as or converted into Base Rate Loans and Eurodollar Rate Loans in the
manner provided in subsection 2.2D. In lieu of delivering the above-described
Notice of Borrowing, the Company may give the Administrative Agent telephonic
notice by the required time of any proposed borrowing under this subsection
2.1B; provided that such notice shall be promptly confirmed in writing by
delivery of a Notice of Borrowing to the Administrative Agent on or before the
applicable Funding Date.
Neither the Administrative Agent nor any Lender shall incur any liability
to the Company in acting upon any telephonic notice referred to above that the
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to borrow on behalf of the Company
or for otherwise acting in good faith under this subsection 2.1B, and upon
funding of Loans by the Lenders in accordance with this Agreement pursuant to
any such telephonic notice the Company shall have effected Loans hereunder.
The Company shall notify the Administrative Agent prior to the funding of
any Loans in the event that any of the matters to which the Company is required
to certify in the applicable Notice of Borrowing are no longer true and correct
as of the applicable Funding Date, and the acceptance by the Company of the
proceeds of any Loans shall constitute a re-certification by the Company, as of
the applicable Funding Date, as to the matters to which the Company is required
to certify in the applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a Notice
of Borrowing for a Eurodollar Rate Loan (or telephonic notice in lieu thereof)
shall be irrevocable on and after the Related Interest Rate Determination Date,
and the Company shall be bound to make a borrowing in accordance therewith.
C. Disbursement of Funds. All Term Loans and all Revolving Loans under
this Agreement shall be made by the Lenders simultaneously and proportionately
to their respective Pro Rata Shares, it being understood that no Lender shall be
responsible for any default by any other Lender in that other Lender's
obligation to make a Loan requested hereunder nor shall the Commitment of any
Lender to make the particular type of Loan requested be increased or decreased
as a result of a default by any other Lender in that other Lender's obligation
to make a Loan requested hereunder. Promptly after receipt by the Administrative
Agent of a Notice of Borrowing pursuant to subsection 2.1B (or telephonic notice
in lieu thereof), the Administrative Agent shall notify each Lender or the Swing
Line Lender, as the case may be, of the proposed borrowing and of the amount of
such Lender's Pro Rata Share of the applicable Loans.
Each Lender shall make the amount of its Loan available to the
Administrative Agent not later than 12:00 Noon (New York time) on the applicable
Funding Date and the Swing Line Lender shall make the amount of its Swing Line
Loan available to the Administrative Agent not later than 2:00 P.M. (New York
time) on the applicable Funding Date, in each case in same day funds, at the
Funding and Payment Office. Except as provided in subsection 2.1A(iv) or
subsection 3.3B with respect to Revolving Loans used to repay Refunded Swing
Line Loans or to reimburse the Issuing Bank for the amount of an honored drawing
or payment under a Letter of Credit issued by it, upon satisfaction or waiver of
the conditions precedent specified in subsections 4.1 (in the case of Loans made
on the Closing Date) and 4.2 (in the case of all
44
Loans), the Administrative Agent shall make the proceeds of such Loans available
to the Company on the applicable Funding Date by causing an amount of same day
funds equal to the proceeds of all such Loans received by the Administrative
Agent from the Lenders or the Swing Line Lender, as the case may be, to be
credited to the account of the Company at the Funding and Payment Office.
Unless the Administrative Agent shall have been notified by any Lender
prior to the Funding Date for any Loans that such Lender does not intend to make
available to the Administrative Agent the amount of such Lender's Loan requested
on such Funding Date, the Administrative Agent may assume that such Lender has
made such amount available to the Administrative Agent on such Funding Date and
the Administrative Agent may, in its sole discretion, but shall not be obligated
to, make available to the Company a corresponding amount on such Funding Date.
If such corresponding amount is not in fact made available to the Administrative
Agent by such Lender, the Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon,
for each day from such Funding Date until the date such amount is paid to the
Administrative Agent, at the customary rate set by the Administrative Agent for
the correction of errors among banks for three Business Days and thereafter at
the Base Rate. If such Lender does not pay such corresponding amount forthwith
upon the Administrative Agent's demand therefor, the Administrative Agent shall
promptly notify the Company and the Company shall immediately pay such
corresponding amount to the Administrative Agent, together with interest thereon
for each day from such Funding Date until the date such amount is paid to the
Administrative Agent at the rate applicable to such Loan. Nothing in this
subsection 2.1C shall be deemed to relieve any Lender from its obligation to
fulfill its Commitments hereunder or to prejudice any rights that the Company
may have against any Lender as a result of any default by such Lender hereunder.
D. The Register.
(i) The Administrative Agent shall maintain, at its address referred
to in subsection 10.8, a register for the recordation of the names and
addresses of the Lenders and the Commitments and Loans of each Lender from
time to time (the "Register"). The Register shall be available for
inspection by the Company or any Lender at any reasonable time and from
time to time upon reasonable prior notice.
(ii) The Administrative Agent shall record in the Register the
Commitments and the outstanding Loans from time to time of each Lender and
each repayment or prepayment in respect of the principal amount of the
outstanding Loans of each Lender. Any such recordation shall be conclusive
and binding on the Company and each Lender, absent manifest error;
provided that failure to make any such recordation, or any error in such
recordation, shall not affect the Company's Obligations in respect of the
applicable Loans.
(iii) Each Lender shall record on its internal records (including,
without limitation, the Notes held by such Lender) the amount of each Loan
made by it and each payment in respect thereof. Any such recordation shall
be conclusive and binding on the Company, absent manifest error; provided
that failure to make any such recordation, or any error in such
recordation, shall not affect the Company's Obligations in respect of the
applicable Loans; and provided, further that in the event of any
inconsistency between the Register and any Lender's records, the
recordations in the Register shall govern.
(iv) The Company, the Administrative Agent and the Lenders shall
deem and treat the
45
Persons listed as the Lenders in the Register as the holders and owners of
the corresponding Commitments and Loans listed therein for all purposes
hereof, and no assignment or transfer of any Commitment or Loan shall be
effective, in each case unless and until an Assignment Agreement effecting
the assignment or transfer thereof shall have been accepted by the
Administrative Agent and recorded in the Register as provided in
subsection 10.1B(ii). Prior to such recordation, all amounts owed with
respect to the applicable Commitment or Loan shall be owed to the Lender
listed in the Register as the owner thereof, and any request, authority or
consent of any Person who, at the time of making such request or giving
such authority or consent, is listed in the Register as a Lender shall be
conclusive and binding on any subsequent holder, assignee or transferee of
the corresponding Commitments or Loans.
(v) The Company hereby designates CSFB and any financial institution
serving as a successor Administrative Agent to serve as the Company's
agent solely for purposes of maintaining the Register as provided in this
subsection 2.1D, and the Company hereby agrees that, to the extent CSFB
serves in such capacity, CSFB and its officers, directors, employees,
agents and affiliates shall constitute Indemnitees for all purposes under
subsection 10.3.
E. Notes. The Company shall execute and deliver on the Closing Date to
each Lender (or to the Administrative Agent for that Lender) (i) a Term A Note
substantially in the form of Exhibit IV-A annexed hereto, respectively, to
evidence that Lender's Term A Loans in the principal amount of that Lender's
Term A Loans and with other appropriate insertions, and each Lender's Term A
Notes shall evidence such Lender's Pro Rata Share of such respective amounts,
(ii) a Term B Note substantially in the form of Exhibit IV-B annexed hereto,
respectively, to evidence that Lender's Term B Loans in the principal amount of
that Lender's Term B Loans and with other appropriate insertions, and each
Lender's Term B Notes shall evidence such Lender's Pro Rata Share of such
respective amounts, (iii) a Revolving Note substantially in the form of Exhibit
V-A annexed hereto to evidence that Lender's Revolving Loans, in the principal
amount of that Lender's Revolving Loan Commitment and with other appropriate
insertions and (iv) a Swing Line Note substantially in the form of Exhibit V-B
annexed hereto to evidence that Lender's Swing Line Loans, in the principal
amount of that Lender's Swing Line Loan Commitment and with other appropriate
insertions. The Notes and the Obligations evidenced thereby shall be governed
by, subject to and benefit from all of the terms and conditions of this
Agreement and the other Loan Documents and shall be secured by the Collateral.
2.2 Interest on the Loans.
A. Rate of Interest. Subject to the provisions of subsections 2.6 and 2.7,
each Term Loan and each Revolving Loan shall bear interest on the unpaid
principal amount thereof from the date made to maturity (whether by acceleration
or otherwise) at a rate determined by reference to the Base Rate or the Reserve
Adjusted Eurodollar Rate, as the case may be. Subject to the provisions of
subsection 2.7, each Swing Line Loan shall bear interest on the unpaid principal
amount thereof from the date made to maturity (whether by acceleration or
otherwise) at a rate determined by reference to the Base Rate. The applicable
basis for determining the rate of interest with respect to any Loan shall be
selected by the Company initially at the time a Notice of Borrowing is given
with respect to such Loan pursuant to subsection 2.1B. The basis for determining
the interest rate with respect to any Term Loan or any Revolving Loan may be
changed from time to time pursuant to subsection 2.2D. If on any day any Term
Loan or Revolving Loan is outstanding with respect to which notice has not been
delivered to the Administrative Agent in accordance with the terms of this
Agreement specifying the applicable basis for determining the rate of interest,
then for that day that Loan shall bear interest determined by reference to the
Base Rate. Subject
46
to the provisions of subsections 2.2E and 2.7, the Term Loans and the Revolving
Loans shall bear interest through maturity as follows:
(i) if a Base Rate Loan, then at the sum of the Base Rate plus
the Applicable Base Rate Margin; or
(ii) if a Eurodollar Rate Loan, then at the sum of the Reserve
Adjusted Eurodollar Rate plus the Applicable Eurodollar Rate Margin.
Subject to the provisions of subsections 2.2E and 2.7, the Swing Line
Loans shall bear interest to maturity at the sum of the Base Rate plus the
Applicable Base Rate Margin for Revolving Loans less the Applicable Commitment
Fee Percentage.
B. Interest Periods. In connection with each Eurodollar Rate Loan, the
Company may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, on behalf of the Company select an
interest period (each an "Interest Period") to be applicable to such Loan, which
Interest Period shall be, at the Company's option, either a one, two, three or
six month period; provided that:
(i) the initial Interest Period for any Eurodollar Rate Loan shall
commence on the Funding Date in respect of such Loan, in the case of a
Loan initially made as a Eurodollar Rate Loan, or on the date specified in
the applicable Notice of Conversion/Continuation, in the case of a Loan
converted to a Eurodollar Rate Loan;
(ii) in the case of immediately successive Interest Periods
applicable to a Eurodollar Rate Loan continued as such pursuant to a
Notice of Conversion/Continuation, each successive Interest Period shall
commence on the day on which the next preceding Interest Period expires;
(iii) if an Interest Period would otherwise expire on a day that is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided that, if any Interest Period would
otherwise expire on a day that is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(iv) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (v) of this subsection 2.2B, end on the
last Business Day of a calendar month;
(v) no Interest Period with respect to any portion of the Term A
Loans shall extend beyond March 31, 2004, no Interest Period with respect
to any portion of the Term B Loans shall extend beyond September 30, 2005,
and no Interest Period with respect to any portion of the Revolving Loans
shall extend beyond the Revolving Loan Commitment Termination Date;
(vi) no Interest Period with respect to any portion of the Term
Loans shall extend beyond a date on which the Company is required to make
a scheduled payment of principal of the Term A Loans or the Term B Loans,
as the case may be, unless the aggregate principal amount of Term A Loans
or Term B Loans, as the case may be, that are Base Rate Loans plus the
aggregate
47
principal amount of Term A Loans or Term B Loans, as the case may be, that
are Eurodollar Rate Loans with Interest Periods expiring on or before such
date equals or exceeds the principal amount required to be paid on the
Term A Loans or Term B Loans, as the case may be, on such date;
(vii) the Company may not select an Interest Period of longer than
one month prior to the end of the Initial Period;
(viii) there shall be no more than five (5) Interest Period
outstanding at any time during the Initial Period, and thereafter no more
than ten (10) Interest Periods shall be outstanding at any time; and
(ix) in the event the Company fails to specify an Interest Period
for any Eurodollar Rate Loan in the applicable Notice of Borrowing or
Notice of Conversion/Continuation, the Company shall be deemed to have
selected an Interest Period of one month.
C. Interest Payments. Subject to the provisions of subsection 2.2E,
interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity, by acceleration or otherwise); provided that in the event that any
Swing Line Loans, Revolving Loans or any Term Loans that are Base Rate Loans are
prepaid pursuant to subsection 2.4B(i), interest accrued on such Loans through
the date of such prepayment shall be payable on the next succeeding Interest
Payment Date applicable to Base Rate Loans (or, if earlier, at final maturity).
D. Conversion or Continuation. Subject to the provisions of subsection
2.6, the Company shall have the option (i) to convert at any time all or any
part of its outstanding Term Loans or Revolving Loans equal to $2,000,000 and
integral multiples of $500,000 in excess of that amount from Loans bearing
interest at a rate determined by reference to one basis to Loans bearing
interest at a rate determined by reference to an alternative basis (provided
that any Loan being converted to a Eurodollar Rate Loan shall be in a minimum
amount of $2,500,000 and integral multiples of $500,000 in excess of such
amount) or (ii) upon the expiration of any Interest Period applicable to a
Eurodollar Rate Loan, to continue all or any portion of such Loan equal to
$2,500,000 and integral multiples of $500,000 in excess of that amount as a
Eurodollar Rate Loan; provided, however, that a Eurodollar Rate Loan may only be
converted into a Base Rate Loan on the expiration date of an Interest Period
applicable thereto.
The Company shall deliver a Notice of Conversion/Continuation to the
Administrative Agent no later than 11:00 a.m. (New York time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan), and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan). A Notice of Conversion/Continuation
shall specify (i) the proposed conversion/continuation date (which shall be a
Business Day), (ii) the amount and type of the Loan to be converted/continued,
(iii) the nature of the proposed conversion/continuation, (iv) in the case of a
conversion to, or a continuation of, a Eurodollar Rate Loan, the requested
Interest Period, and (v) in the case of a conversion to, or a continuation of, a
Eurodollar Rate Loan, that no Default or Event of Default has occurred and is
continuing. In lieu of delivering the above-described Notice of
Conversion/Continuation, the Company may give the Administrative Agent
telephonic notice by the required time of any proposed conversion/continuation
under this subsection 2.2D; provided that such notice shall be promptly
confirmed in writing by delivery of a Notice of Conversion/Continuation to the
Administrative Agent on or before the proposed conversion/continuation date.
48
Neither the Administrative Agent nor any Lender shall incur any liability
to the Company in acting upon any telephonic notice referred to above that the
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to act on behalf of the Company or
for otherwise acting in good faith under this subsection 2.2D, and upon
conversion or continuation of the applicable basis for determining the interest
rate with respect to any Loans in accordance with this Agreement pursuant to any
such telephonic notice the Company shall have effected a conversion or
continuation, as the case may be, hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a Notice
of Conversion/Continuation for conversion to, or continuation of, a Eurodollar
Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable on and
after the related Interest Rate Determination Date, and the Company shall be
bound to effect a conversion or continuation in accordance therewith.
E. Post-Default Interest. Upon the occurrence and during the continuation
of any Event of Default, the outstanding principal amount of all Loans and, to
the extent permitted by applicable law, any interest payments thereon not paid
when due and any fees and other amounts then due and payable hereunder, shall
thereafter bear interest (including post-petition interest in any proceeding
under the Bankruptcy Code, or other applicable bankruptcy or insolvency laws)
payable upon demand at a rate that is 2% per annum in excess of the interest
rate otherwise payable under this Agreement with respect to the applicable Loans
(or, in the case of any such fees and other amounts, at a rate which is 2% per
annum in excess of the interest rate otherwise payable under this Agreement for
Revolving Loans bearing interest at a rate determined by reference to the Base
Rate); provided that, in the case of Eurodollar Rate Loans, upon the expiration
of the Interest Period in effect at the time any such increase in interest rate
is effective such Eurodollar Rate Loans shall thereupon become Base Rate Loans
and shall thereafter bear interest payable upon demand at a rate equal to 2% per
annum in excess of the interest rates otherwise payable under this Agreement for
Base Rate Loans that are Term A Loans, Term B Loans, or Revolving Loans, as
applicable. Payment or acceptance of the increased rates of interest provided
for in this subsection 2.2E is not a permitted alternative to timely payment and
shall not constitute a waiver of any Event of Default or otherwise prejudice or
limit any rights or remedies of the Administrative Agent or any Lender.
F. Computation of Interest. Interest on Loans shall be computed on the
basis of a 360-day year (a 365 or 366-day year, as applicable, in the case of
Base Rate Loans based on the Prime Rate) and for the actual number of days
elapsed in the period during which it accrues. In computing interest on any
Loan, the date of the making of such Loan or the first day of an Interest Period
applicable to such Loan or, with respect to a Base Rate Loan being converted
from a Eurodollar Rate Loan, the date of conversion of such Eurodollar Rate Loan
to such Base Rate Loan, as the case may be, shall be included, and the date of
payment of such Loan or the expiration date of an Interest Period applicable to
such Loan or, with respect to a Base Rate Loan being converted to a Eurodollar
Rate Loan, the date of conversion of such Base Rate Loan to such Eurodollar Rate
Loan, as the case may be, shall be excluded; provided that if a Loan is repaid
on the same day on which it is made, one day's interest shall be paid on that
Loan.
2.3 Fees.
A. Commitment Fees.
(i) Revolving Loan Commitments. The Company agrees to pay to the
Administrative Agent, for distribution to each Lender in proportion to
that Lender's Pro Rata
49
Share of the Revolving Loan Commitments, commitment fees for the period
from and including the date hereof to and excluding the Revolving Loan
Commitment Termination Date equal to the sum of (x) the average of the
daily excess of the Revolving Loan Commitments over the sum of the
aggregate principal amount of Revolving Loans outstanding (but not any
Swing Line Loans outstanding) plus (y) the Letter of Credit Usage
multiplied by the Applicable Commitment Fee Percentage.
(ii) Term Loan Commitments. The Company agrees to pay to the
Administrative Agent, for distribution to each Lender in proportion to
that Lender's Pro Rata Share of the applicable Commitments, commitment
fees in respect of each type of Term Loan Commitments for the period from
and excluding the date hereof to and excluding the earlier of October 16,
1998 and the Closing Date equal to the product of the aggregate amount of
such type of Term Loan Commitments and the Applicable Commitment Fee
Percentage.
(iii) Calculation and Payment. All of the foregoing commitment fees
shall be calculated on the basis of a 360-day year and the actual number
of days elapsed and shall be payable in arrears on the Closing Date, the
last Business Day in each of March, June, September and December of each
year, commencing in December 1998, and on the Revolving Loan Commitment
Termination Date.
B. Annual Administrative Fee. The Company agrees to pay to the
Administrative Agent an annual administrative fee in such amounts as may have
been or hereafter be agreed between them from time to time.
C. Other Agent Fees. The Company agrees to pay such other fees as may have
been or hereafter be agreed upon from time to time.
2.4 Repayments, Prepayments and Reductions in Commitments; General Provisions
Regarding Payments.
A. Scheduled Payments of Term Loans.
(i) Scheduled Payments of Term A Loans. The Company shall make
principal payments on the Term A Loans in installments on the dates set
forth below, each such installment to be in an amount equal to the
corresponding percentages set forth below of the principal amount of the
Term A Loans as of the Closing Date:
--------------------------------------------------------
SCHEDULED REPAYMENT
DATE OF
TERM A LOANS
--------------------------------------------------------
March 31, 1999 2.75%
June 30, 1999 2.75%
September 30, 1999 2.75%
December 31, 1999 2.75%
--------------------------------------------------------
March 31, 2000 5.00%
June 30, 2000 5.00%
50
--------------------------------------------------------
SCHEDULED REPAYMENT
DATE OF
TERM A LOANS
--------------------------------------------------------
September 30, 2000 5.00%
December 31, 2000 5.00%
--------------------------------------------------------
March 31, 2001 5.25%
June 30, 2001 5.25%
September 30, 2001 5.25%
December 31, 2001 5.25%
--------------------------------------------------------
March 31, 2002 5.25%
June 30, 2002 5.25%
September 30, 2002 5.25%
December 31, 2002 5.25%
--------------------------------------------------------
March 31, 2003 6.00%
June 30, 2003 6.00%
September 30, 2003 6.00%
December 31, 2003 6.00%
--------------------------------------------------------
March 31, 2004 3.00%
--------------------------------------------------------
; provided that the scheduled installments of principal of the Term A
Loans set forth above shall be reduced in connection with any voluntary or
mandatory prepayments of the Term A Loans in accordance with subsection
2.4C; and provided, further that the final installment specified above for
the repayment by the Company of the Term A Loans shall be in an amount, if
such amount is different from that specified above, sufficient to repay
all amounts owing by the Company under this Agreement with respect to the
Term A Loans.
(ii) Scheduled Payments of Term B Loans. The Company shall make
principal payments on the Term B Loans in installments on the dates set
forth below, each such installment to be in an amount equal to the
corresponding percentages set forth below of the principal amount of the
Term B Loans as of the Closing Date:
--------------------------------------------------------
SCHEDULED REPAYMENT
DATE OF
TERM B LOANS
--------------------------------------------------------
March 31, 1999 0.25%
June 30, 1999 0.25%
September 30, 1999 0.25%
December 31, 1999 0.25%
--------------------------------------------------------
March 31, 2000 0.25%
June 30, 2000 0.25%
September 30, 2000 0.25%
December 31, 2000 0.25%
51
--------------------------------------------------------
SCHEDULED REPAYMENT
DATE OF
TERM B LOANS
--------------------------------------------------------
March 31, 2001 0.25%
June 30, 2001 0.25%
September 30, 2001 0.25%
December 31, 2001 0.25%
--------------------------------------------------------
March 31, 2002 0.25%
June 30, 2002 0.25%
September 30, 2002 0.25%
December 31, 2002 0.25%
--------------------------------------------------------
March 31, 2003 0.25%
June 30, 2003 0.25%
September 30, 2003 0.25%
December 31, 2003 0.25%
--------------------------------------------------------
March 31, 2004 0.25%
June 30, 2004 0.25%
September 30, 2004 0.25%
December 31, 2004 0.25%
--------------------------------------------------------
March 31, 2005 0.25%
June 30, 2005 0.25%
September 30, 2005 93.50%
; provided that the scheduled installments of principal of the Term B
Loans set forth above shall be reduced in connection with any voluntary or
mandatory prepayments of the Term B Loans in accordance with subsection
2.4C; and provided, further that the final installment specified above for
the repayment by the Company of the Term B Loans shall be in an amount, if
such amount is different from that specified above, sufficient to repay
all amounts owing by the Company under this Agreement with respect to the
Term B Loans.
B. Prepayments and Reductions in Commitments.
(i) Voluntary Prepayments. The Company may, upon written or
telephonic notice to the Administrative Agent on or prior to 11:00 a.m.
(New York time) on the date of prepayment, which notice, if telephonic,
shall be promptly confirmed in writing, at any time and from time to time
prepay, without premium or penalty, any Swing Line Loan on any Business
Day in whole or in part in an aggregate minimum amount of $500,000 and
integral multiples of $100,000 in excess of that amount. In addition, so
long as no Swing Line Loans are then outstanding, the Company may, upon
not less than three (3) Business Days' prior written or telephonic notice,
promptly confirmed in writing to the Administrative Agent (which notice
the Administrative Agent will promptly transmit by facsimile or telephone
to each Lender), at any time and from time to time prepay, without premium
or penalty (except as set forth in subsection 2.4B(iv) below), the Loans
(other than Swing Line Loans) on any Business Day in whole or in part in
an aggregate minimum amount of (a) in the case of Base Rate Loans,
$2,000,000 and integral multiples of $500,000 in excess of that amount,
and (b) in the case of Eurodollar Rate Loans, $2,500,000 and integral
52
multiples of $500,000 in excess of that amount; provided, however, that in
the event the Company shall prepay a Eurodollar Rate Loan other than on
the expiration of the Interest Period applicable thereto, the Company
shall, at the time of such prepayment, also pay any amounts payable under
subsection 2.6D hereof. Notice of prepayment having been given as
aforesaid, the Loans shall become due and payable on the prepayment date
specified in such notice and in the aggregate principal amount specified
therein. Any voluntary prepayments pursuant to this subsection 2.4B(i)
shall be applied as specified in subsection 2.4C.
(ii) Voluntary Reductions of Revolving Loan Commitments. The Company
may, upon not less than three (3) Business Days' prior written or
telephonic notice, promptly confirmed in writing to the Administrative
Agent (which notice the Administrative Agent will promptly transmit by
facsimile or telephone to each Lender), at any time and from time to time
terminate in whole or permanently reduce in part, without premium or
penalty, the Revolving Loan Commitments in an amount up to the amount by
which the Revolving Loan Commitments exceed the Total Utilization of
Revolving Loan Commitments at the time of such proposed termination or
reduction; provided that any such partial reduction of the Revolving Loan
Commitments shall be in an aggregate minimum amount of $2,500,000 and
integral multiples of $500,000 in excess of that amount. The Company's
notice to the Administrative Agent shall designate the date (which shall
be a Business Day) of such termination or reduction and the amount of any
partial reduction, and such termination or reduction of the Revolving Loan
Commitments shall be effective on the date specified in such notice and
shall reduce the Revolving Loan Commitment of each Lender proportionately
to its Pro Rata Share.
(iii) Mandatory Prepayments.
The Loans shall be prepaid in the manner provided in subsection 2.4C
upon the occurrence of the following circumstances:
(a) Prepayments from Asset Sales. No later than the first
(1st) Business Day following the date of receipt by the Parent, the
Company or any of its Subsidiaries of Cash Proceeds of any Asset
Sale, the Company shall prepay the Term Loans in an amount equal to
the Net Cash Proceeds received; provided that (I) if the Company
shall have delivered a Reinvestment Notice to the Administrative
Agent no later than one (1) Business Day after the consummation of
such Asset Sale (other than Asset Sales described in Schedule 7.7
annexed hereto) and no Default or Event of Default exists at the
time of such consummation or delivery of such notice, the Company
shall not be required to make any prepayment with the proceeds of
such Asset Sale to the extent that (x) all or any portion of such
proceeds are reinvested in Reinvestment Assets within two hundred
seventy (270) days from the date of receipt of such proceeds, and
(y) after giving effect thereto, the aggregate amount of proceeds
(other than (1) Permitted Testing Center Proceeds, and (2) proceeds
of Asset Sales described in Schedule 7.7 annexed hereto in an amount
not to exceed $5,000,000) not used to make mandatory prepayments of
Term Loans pursuant to this proviso and the corresponding proviso to
subsection 2.4B(iii)(d) shall not exceed $10,000,000 measured on a
cumulative basis from the Closing Date; (II) if at any time the
aggregate amount of Net Cash Proceeds (including, without
limitation, Permitted Testing Center Proceeds) in respect of which
Reinvestment Notices have been delivered and which have not yet been
reinvested in Reinvestment Assets or used to repay Loans shall
exceed $10,000,000, then the Borrower shall promptly deliver all
such Net Cash Proceeds (including the portion not in excess of
$10,000,000) to the Collateral Agent
53
to be held and applied by it in accordance with the terms of the
Collateral Account Agreement; and (III) on each Reinvestment
Prepayment Date, an amount equal to the Reinvestment Prepayment
Amount with respect to the relevant Reinvestment Event shall be
applied to prepay the Term Loans. Concurrently with any prepayment
of Loans pursuant to this subsection 2.4B(iii)(a), the Company shall
deliver to the Administrative Agent an Officer's Certificate
demonstrating in detail reasonably satisfactory to the
Administrative Agent the derivation of the Net Cash Proceeds of the
correlative Asset Sale from the gross sales price thereof. In
addition, in the event that the Company shall, at any time after
receipt of proceeds of any Reinvestment Event requiring a prepayment
pursuant to this subsection 2.4B(iii)(a), determine that the
prepayments previously made in respect of such Reinvestment Event
were in an aggregate amount less than that required by the terms of
this subsection 2.4B(iii)(a), the Company shall promptly cause to be
made an additional prepayment of the Term Loans in an amount equal
to the amount of any such deficit, and the Company shall
concurrently therewith deliver to the Administrative Agent an
Officer's Certificate demonstrating the derivation of the additional
proceeds resulting in such deficit.
(b) Prepayments Due to Issuance of Debt. On or prior to the
first (1st) Business Day after receipt by the Parent, the Company or
any of its Subsidiaries of any proceeds of any Indebtedness (other
than the Loans and any other Indebtedness permitted by this
Agreement), the Company shall prepay the Term Loans in an amount
equal to the amount of such proceeds; provided that payment or
acceptance of the amounts provided for in this subsection
2.4B(iii)(b) shall not constitute a waiver of any Event of Default
resulting from the incurrence of such Indebtedness or otherwise
prejudice any rights or remedies of the Administrative Agent or any
Lender.
(c) Prepayments Due to Issuance of Equity Securities. On or
prior to the first (1st) Business Day after receipt by the Parent,
the Company or any of their respective Subsidiaries of any Equity
Proceeds (other than, so long as no Default or Event of Default
shall have occurred and be continuing or result therefrom, (x)
Equity Proceeds of up to $5,000,000 in the aggregate received by the
Parent, the Company or any of their respective Subsidiaries as
payment of the exercise price under any option for any shares of
Capital Stock of the Parent held by any officer or employee of the
Parent, the Company or any of their respective Subsidiaries, and (y)
Equity Proceeds received by the Parent, the Company or any of their
respective Subsidiaries solely to the extent that such Equity
Proceeds are used within one Business Day of such receipt to finance
a Permitted Acquisition and are not realized from a Public
Offering), the Company shall prepay the Term Loans in an amount
equal to such Equity Proceeds.
(d) Prepayments Due to Insurance and Condemnation Proceeds. No
later than the first (1st) Business Day following the date of
receipt by the Company or any of its Subsidiaries of any cash
payments under any insurance policy as a result of any damage to or
loss of all or any portion of the Collateral or any other tangible
asset (net of actual and documented reasonable costs incurred by the
Company or any of its Subsidiaries in connection with adjustment and
settlement thereof, "Insurance Proceeds") or any proceeds resulting
from the taking of assets by the power of eminent domain,
condemnation or otherwise (net of actual and documented reasonable
costs incurred by the Company or any of its Subsidiaries in
connection with adjustment and settlement thereof,
54
"Condemnation Proceeds") (any such event resulting in the recovery
of Insurance Proceeds or Condemnation Proceeds, a "Recovery Event"),
the Company shall prepay the Term Loans in an amount equal to the
Insurance Proceeds or Condemnation Proceeds, as the case may be,
received; provided, that, if the Company shall have delivered a
Reinvestment Notice to the Administrative Agent no later than five
(5) Business Days prior to the consummation of such Recovery Event
and no Default or Event of Default exists at the time of such
consummation or delivery of such notice, the Company shall not be
required to make any prepayment with the proceeds of such Recovery
Event to the extent that (x) all or any portion of such proceeds are
reinvested in Reinvestment Assets within one hundred eighty (180)
days from the date of receipt of such proceeds, and (y) after giving
effect thereto, the aggregate amount of proceeds not used to make
mandatory prepayments of Term Loans pursuant to this proviso and the
corresponding proviso to subsection 2.4B(iii)(a) shall not exceed
$10,000,000 measured on a cumulative basis from the Closing Date;
provided, further, that, on each Reinvestment Prepayment Date, an
amount equal to the Reinvestment Prepayment Amount with respect to
the relevant Reinvestment Event shall be applied to prepay the Term
Loans. Concurrently with any prepayment of Loans pursuant to this
subsection 2.4B(iii)(d), the Company shall deliver to the
Administrative Agent an Officer's Certificate demonstrating in
detail reasonably satisfactory to the Administrative Agent the
derivation of the Insurance Proceeds or Condemnation Proceeds, as
the case may be, of the correlative Recovery Event. In addition, in
the event that the Company shall, at any time after receipt of
proceeds of any Reinvestment Event requiring a prepayment pursuant
to this subsection 2.4B(iii)(d), determine that the prepayments
previously made in respect of such Reinvestment Event were in an
aggregate amount less than that required by the terms of this
subsection 2.4B(iii)(d), the Company shall promptly cause to be made
an additional prepayment of the Term Loans in an amount equal to the
amount of any such deficit, and the Company shall concurrently
therewith deliver to the Administrative Agent an Officer's
Certificate demonstrating the derivation of the additional proceeds
resulting in such deficit.
(e) Prepayments Due to Reductions or Restrictions of Revolving
Loan Commitments. The Company shall prepay the Swing Line Loans
and/or Revolving Loans from time to time to the extent necessary so
that (1) the Total Utilization of Revolving Loan Commitments shall
not at any time exceed the Revolving Loan Commitments then in
effect, and (2) the aggregate principal amount of all outstanding
Swing Line Loans shall not at any time exceed the Swing Line Loan
Commitment then in effect. All Swing Line Loans shall be prepaid in
full prior to the prepayment of any Revolving Loans pursuant to this
subsection 2.4B(iii)(e). If at any time that there are no Revolving
Loans and Swing Line Loans outstanding (whether after giving effect
to any prepayment thereof pursuant to this subclause (e) or
otherwise) the Total Utilization of Revolving Loan Commitments
exceeds the Revolving Loan Commitment, the Company shall deposit
into the Collateral Account such amounts as are necessary so that,
after giving effect thereto, the amount on deposit in the Collateral
Account pursuant to this subclause (e) is at least equal to such
excess.
(f) Prepayments from Consolidated Excess Cash Flow. In the
event that there shall be Consolidated Excess Cash Flow for any
Fiscal Year (commencing with the Fiscal Year ending December 31,
1999), the Company shall, no later than ninety-five (95) days after
the end of such Fiscal Year, prepay the Term Loans in an aggregate
amount
55
equal to (x) if the Leverage Ratio is greater than 3.0x, 75% of such
Consolidated Excess Cash Flow, and (y) if the Leverage Ratio is
equal to or less than 3.0x, 50% of such Consolidated Excess Cash
Flow.
(g) Prepayments Due to Termination or Cancellation of State
Contracts. On or prior to the first (1st) Business Day after receipt
by the Company or any of its Subsidiaries of any termination
payments, settlement or judgment awards or similar payments in
connection with, or as a result of the termination or cancellation
of, any State Contract, the Company shall prepay the Term Loans in
an amount equal to the amount of such termination payments, awards
or similar payments; provided that payment or acceptance of the
amounts provided for in this subsection 2.4B(iii)(g) shall not
constitute a waiver of any Default or Event of Default resulting
from the termination or cancellation of any State Contract or
otherwise prejudice any rights or remedies of the Agents or any
Lender.
(iv) Prepayment Fee. Together with any prepayment of the Loans, the
Company shall pay a prepayment fee as follows:
(a) Voluntary Prepayments. Any voluntary prepayment of Term B
Loans required on or prior to (x) the first (1st) Anniversary of the
Closing Date pursuant to subsection 2.4B(i) shall be accompanied by
a prepayment fee in an amount equal to 2% of the amount of such
prepayment, and (y) the second (2nd) Anniversary of the Closing Date
pursuant to subsection 2.4B(i) shall be accompanied by a prepayment
fee in an amount equal to 1% of the amount of such prepayment.
(b) Mandatory Prepayments. Any mandatory prepayment of Term B
Loans required on or prior to the second (2nd) Anniversary of the
Closing Date pursuant to subsection 2.4B(iii) (other than subsection
2.4(B)(iii)(f)) shall be accompanied by a prepayment fee in an
amount equal to 1% of the amount of such prepayment.
(c) Reimbursement. Except as provided in subclauses (a) and
(b) above, no premium or penalty shall be payable as a result of any
prepayment of the Loans; provided, that any and all prepayments of
the Loans shall be accompanied by payment of any amounts owing or
payable to the Lenders under subsection 2.6D.
C. Application of Prepayments.
(i) Application of Prepayments by Type of Loans. Any voluntary
prepayments pursuant to subsection 2.4B(i) shall be applied: first to
repay outstanding Swing Line Loans to the full extent thereof, and second
to repay the types of Loans as specified in the correlative notice of
prepayment and, absent such specification, to repay outstanding Term
Loans. Any amount required to be applied as a prepayment of Term Loans
pursuant to subsection 2.4B(iii) or this subsection 2.4C(i) shall be
applied to prepay the two (2) different tranches of Term Loans ratably to
the full extent thereof; provided that, in the case of any such prepayment
of the Term Loans, (a) the Company shall use reasonable efforts to notify
the Lenders of such prepayment five (5) Business Days in advance of
payment to the Administrative Agent of such amount, (b) upon receipt of
such payment, the Administrative Agent shall notify the Lenders of such
payment, (c) in the event any Lender with Term B Loans elects to waive
such Lender's right to receive such
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prepayment in respect of any such Loans, such Lender shall so advise the
Administrative Agent in writing no later than the close of business on the
date it receives such notice from the Administrative Agent and (d) upon
receipt of such written advice from such Lender, the Administrative Agent
shall apply the amount waived by such Lender to prepay the Term A Loans.
(ii) Application of Prepayments of Term Loans to Installments. The
amount of any voluntary prepayments of Term A Loans or Term B Loans, as
applicable, shall be applied to reduce each scheduled installment thereof
set forth in subsection 2.4A(i) or 2.4A(ii), as applicable, that is unpaid
in the inverse order that such installments are scheduled to occur. The
amount of any mandatory prepayments applied to Term A Loans or Term B
Loans, as applicable, shall be applied to ratably reduce each scheduled
installment of principal thereof set forth in subsection 2.4A(i) or
2.4A(ii), as applicable.
(iii) Application of Prepayments of Loans to Base Rate Loans and
Eurodollar Rate Loans. Considering Loans constituting Term A Loans, Term B
Loans and Revolving Loans being prepaid separately, any prepayment thereof
shall be applied first to Base Rate Loans to the full extent thereof
before application to Eurodollar Rate Loans, in each case in a manner
which minimizes the amount of any payments required to be made by the
Company pursuant to subsection 2.6D.
(iv) Application of Prepayment Fee. Any prepayment fee paid in
connection with any prepayment shall be paid ratably to the applicable
holders of the Loans then being prepaid.
D. Application of Proceeds of Collateral and Payments Under Guaranties.
(i) Application of Proceeds of Collateral. Except as provided in
subsection 2.4B(iii) with respect to prepayments from Net Cash Proceeds,
Insurance Proceeds or Condemnation Proceeds, all proceeds received by the
Administrative Agent or the Collateral Agent, as the case may be, in
respect of any sale of, collection from, or other realization upon all or
any part of the Collateral under any Collateral Document may, in the
discretion of the Collateral Agent, be held by the Collateral Agent as
Collateral for, and/or (then or at any time thereafter) applied in full or
in part by the Administrative Agent against, the applicable Secured
Obligations (as defined in such Collateral Document) in the following
order of priority:
(a) to the payment of all costs and expenses of such sale,
collection or other realization, including without limitation
reasonable compensation to such Agents and their agents and counsel,
and all other reasonable expenses, liabilities and advances made or
incurred by such Agents in connection therewith, and all amounts for
which such Agents are entitled to indemnification under such
Collateral Document and all advances made by the Collateral Agent
thereunder for the account of the applicable Loan Party, and to the
payment of all reasonable costs and expenses paid or incurred by the
Collateral Agent in connection with the exercise of any right or
remedy under such Collateral Document, all in accordance with the
terms of this Agreement and such Collateral Document;
(b) thereafter, to the extent of any excess proceeds, to the
payment of all other such Secured Obligations for the ratable
benefit of the holders thereof; and
(c) thereafter, to the extent of any excess proceeds, to the
payment to or upon
57
the order of such Loan Party or to whosoever may be lawfully
entitled to receive the same or as a court of competent jurisdiction
may direct.
(ii) Application of Payments Under Guaranties. All payments received
by the Administrative Agent under any Guaranty shall be applied promptly
from time to time by the Administrative Agent in the following order of
priority:
(a) to the payment of the reasonable costs and expenses of any
collection or other realization under such Guaranty, including
without limitation reasonable compensation to the Administrative
Agent and its agents and counsel, and all expenses, liabilities and
advances made or incurred by the Administrative Agent in connection
therewith, all in accordance with the terms of this Agreement and
such Guaranty;
(b) thereafter, to the extent of any excess such payments, to
the payment of all other Guarantied Obligations (as defined in such
Guaranty) for the ratable benefit of the holders thereof; and
(c) thereafter, to the extent of any excess such payments, to
the payment to the applicable Guarantor or to whosoever may be
lawfully entitled to receive the same or as a court of competent
jurisdiction may direct.
E. General Provisions Regarding Payments.
(i) Manner and Time of Payment. All payments by the Company of
principal, interest, fees and other Obligations hereunder and under the
Notes shall be made in same day funds and without defense, setoff or
counterclaim, free of any restriction or condition, and delivered to the
Administrative Agent not later than 12:00 Noon (New York time) on the date
due at the Funding and Payment Office for the account of the Lenders;
funds received by the Administrative Agent after that time on such due
date shall be deemed to have been paid by the Company on the next
succeeding Business Day. The Company hereby authorizes the Administrative
Agent to charge its accounts with the Administrative Agent in order to
cause timely payment to be made to the Administrative Agent of all
principal, interest, fees and expenses due hereunder (subject to
sufficient funds being available in its accounts for that purpose).
(ii) Application of Payments to Principal, Interest and Prepayment
Fees. Except as provided in subsection 2.2C, all payments in respect of
the principal amount of any Loan shall include payment of accrued interest
and prepayment fees, if any, on the principal amount being repaid or
prepaid, and all such payments (and in any event any payments made in
respect of any Loan on a date when interest is due and payable with
respect to such Loan) shall be applied to the payment of interest and
prepayment fees, if any, before application to principal.
(iii) Apportionment of Payments. Aggregate principal, prepayment
fees and interest payments shall be apportioned among all outstanding
Loans to which such payments relate, in each case proportionately to the
Lenders' respective Pro Rata Shares. The Administrative Agent shall
promptly distribute to each Lender, at its applicable Lending Office
specified on Schedule 2.1 or at such other address as such Lender may
request, its Pro Rata Share of all such payments received by the
Administrative Agent and the commitment fees of such Lender when received
by the Administrative Agent pursuant to subsection 2.3. Notwithstanding
the foregoing provisions of
58
this subsection 2.4E(iii) if, pursuant to the provisions of subsection
2.6C, any Notice of Conversion/Continuation is withdrawn as to any
Affected Lender or if any Affected Lender makes Base Rate Loans in lieu of
its Pro Rata Share of any Eurodollar Rate Loans, the Administrative Agent
shall give effect thereto in apportioning payments received thereafter.
(iv) Payments on Business Days. Except if expressly provided
otherwise, whenever any payment to be made hereunder shall be stated to be
due on a day that is not a Business Day, such payment shall be made on the
next succeeding Business Day and such extension of time shall be included
in the computation of the payment of interest hereunder or of the
commitment fees hereunder, as the case may be.
(v) Notation of Payment. Each Lender agrees that before disposing of
any Note held by it, or any part thereof (other than by granting
participations therein), that Lender will make a notation thereon of all
Loans evidenced by that Note and all principal payments previously made
thereon and of the date to which interest thereon has been paid; provided
that the failure to make (or any error in the making of) a notation of any
Loan made under such Note shall not limit or otherwise affect such
disposition or the obligations of the Company hereunder or under such Note
with respect to any Loan or any payments of principal or interest on such
Note.
2.5 Use of Proceeds.
A. Term Loans and Initial Revolving Loans. The proceeds of Term Loans and
the Initial Revolving Loans made to Company shall be applied, together with the
proceeds of the Senior Discount Notes, the Senior Subordinated Notes and the
Equity Contribution and approximately $77,000,000 of cash on hand at ENR to (i)
finance the purchase price for the Shares (or portion thereof) payable in
connection with the Shares Acquisitions and the ENR Merger consideration, (ii)
repay (or, in the case of the Existing Senior Notes and Existing Senior
Subordinated Notes, purchase or defease to redemption) in full the Existing
Indebtedness, (iii) repay or make, as applicable, the intercompany loans
described in the definition of "Transactions" and (iv) pay the Transaction
Costs.
B. Revolving Loans; Swing Line Loans. The proceeds of any Revolving Loans
(other than the Revolving Loans referenced in subsection 2.5A) and any Swing
Line Loans shall be applied by the Company for working capital and general
corporate purposes of the Company and its Subsidiaries other than Excluded
Foreign Subsidiaries.
C. Compliance With Laws. The Company undertakes that no portion of the
proceeds of any Loans or other extensions of credit under this Agreement shall
be used by any Loan Party in any manner which would be illegal under, or which
would cause the invalidity or unenforceability (in each case in whole or in
part) of any Loan Document under, any applicable law.
D. Margin Regulations. Without limiting the generality of subsection 2.5C,
no portion of the proceeds of any borrowing under this Agreement shall be used
by the Company or any of its Subsidiaries in any manner that might cause the
borrowing or the application of such proceeds to violate Regulation U,
Regulation T or Regulation X of the Board of Governors of the Federal Reserve
System or any other regulation of such Board or to violate the Exchange Act, in
each case as in effect on the date or dates of such borrowing and such use of
proceeds.
2.6 Special Provisions Governing Eurodollar Rate Loans.
59
Notwithstanding any other provision of this Agreement to the contrary, the
following provisions shall govern with respect to Eurodollar Rate Loans as to
the matters covered:
A. Determination of Applicable Interest Rate. As soon as practicable after
11:00 A.M. (New York time) on each Interest Rate Determination Date, the
Administrative Agent shall determine (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties) the interest rate that
shall apply to the Eurodollar Rate Loans for which an interest rate is then
being determined for the applicable Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to the Company
and each Lender.
B. Inability to Determine Applicable Interest Rate. In the event that the
Administrative Agent shall have reasonably determined (which determination shall
be final and conclusive and binding upon all parties hereto), on any Interest
Rate Determination Date with respect to any Eurodollar Rate Loans, that by
reason of circumstances arising after the date of this Agreement affecting the
London interbank market, adequate and fair means do not exist for ascertaining
the interest rate applicable to such Loans on the basis provided for in the
definition of Reserve Adjusted Eurodollar Rate the Administrative Agent shall on
such date give notice (by telecopy or by telephone confirmed in writing) to the
Company and each Lender of such determination, whereupon (i) no Loans may be
made or continued as, or converted to, Eurodollar Rate Loans, until such time as
the Administrative Agent notifies the Company and the Lenders that the
circumstances giving rise to such notice no longer exist (such notification not
to be unreasonably withheld or delayed) and (ii) any Notice of Borrowing or
Notice of Conversion/Continuation given by the Company with respect to the Loans
in respect of which such determination was made shall be deemed to be rescinded
by the Company.
C. Illegality or Impracticability of Eurodollar Rate Loans. In the event
that on any date any Lender shall have reasonably determined (which
determination shall be final and conclusive and binding upon all parties hereto
but shall be made only after consultation with the Company and the
Administrative Agent) that the making, maintaining or continuation of its
Eurodollar Rate Loans (i) has become unlawful as a result of compliance by such
Lender in good faith with any law, treaty, governmental rule, regulation,
guideline or order (or would conflict with any such treaty, governmental rule,
regulation, guideline or order not having the force of law even though the
failure to comply therewith would not be unlawful) or (ii) has become
impracticable, or would cause such Lender material hardship, as a result of
contingencies occurring after the date of this Agreement which materially and
adversely affect the London interbank market, then, and in any such event, such
Lender shall be an "Affected Lender" and it shall on that day give notice (by
telecopy or by telephone confirmed in writing) to the Company and the
Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each other Lender). Thereafter (a) the
obligation of the Affected Lender to make Loans as, or to convert Loans to,
Eurodollar Rate Loans, shall be suspended until such notice shall be withdrawn
by the Affected Lender, (b) to the extent such determination by the Affected
Lender relates to a Eurodollar Rate Loan then being requested by the Company
pursuant to a Notice of Borrowing or a Notice of Conversion/Continuation, the
Affected Lender shall make such Loan as (or convert such Loan to, as the case
may be) a Base Rate Loan, (c) the Affected Lender's obligation to maintain its
outstanding Eurodollar Rate Loans, as the case may be (the "Affected Loans"),
shall be terminated at the earlier to occur of the expiration of the Interest
Period then in effect with respect to the Affected Loans or when required by
law, and (d) the Affected Loans shall automatically convert into Base Rate Loans
on the date of such termination. Notwithstanding the foregoing, to the extent a
determination by an Affected Lender as described above relates to a Eurodollar
Rate Loan then being requested by the Company pursuant to a
60
Notice of Borrowing or a Notice of Conversion/Continuation, the Company shall
have the option, subject to the provisions of subsection 2.6D, to rescind such
Notice of Borrowing or Notice of Conversion/ Continuation as to all Lenders by
giving notice (by telecopy or by telephone confirmed in writing) to the
Administrative Agent of such rescission on the date on which the Affected Lender
gives notice of its determination as described above (which notice of rescission
the Administrative Agent shall promptly transmit to each other Lender). Except
as provided in the immediately preceding sentence, nothing in this subsection
2.6C shall affect the obligation of any Lender other than an Affected Lender to
make or maintain Loans as, or to convert Loans to, Eurodollar Rate Loans in
accordance with the terms of this Agreement.
D. Compensation For Breakage or Non-Commencement of Interest Periods. The
Company shall compensate each Lender, upon written request by that Lender (which
request shall set forth the basis for requesting such amounts), for all
reasonable losses, expenses and liabilities (including, without limitation, any
interest paid by that Lender to the Lenders of funds borrowed by it to make or
carry its Eurodollar Rate Loans and any actual loss, expense or liability
sustained by that Lender in connection with the liquidation or re-employment of
such funds) which that Lender may sustain: (i) if for any reason (other than a
default by that Lender) a borrowing of any Eurodollar Rate Loan does not occur
on a date specified therefor in a Notice of Borrowing or a telephonic request
for borrowing, or a conversion to or continuation of any Eurodollar Rate Loan
does not occur on a date specified therefor in a Notice of
Conversion/Continuation or a telephonic request for conversion or continuation,
(ii) if any prepayment (including any prepayment pursuant to subsection 2.4B) or
conversion of any of its Eurodollar Rate Loans occurs on a date that is not the
last day of an Interest Period applicable to that Loan, (iii) if any prepayment
of any of its Eurodollar Rate Loans is not made on any date specified in a
notice of prepayment given by the Company, or (iv) as a consequence of any other
default by the Company in the repayment of its Eurodollar Rate Loans when
required by the terms of this Agreement.
E. Booking of Eurodollar Rate Loans. Any Lender may make, carry or
transfer Eurodollar Rate Loans at, to, or for the account of any of its branch
offices or the office of an Affiliate of that Lender.
F. Assumptions Concerning Funding of Eurodollar Rate Loans. Calculation of
all amounts payable to a Lender under this subsection 2.6 and under subsection
2.7A shall be made as though that Lender had actually funded each of its
relevant Eurodollar Rate Loans through the purchase of a Eurodollar deposit
bearing interest at the rate obtained pursuant to clause (i) of the definition
of Reserve Adjusted Eurodollar Rate in an amount equal to the amount of such
Eurodollar Rate Loan and having a maturity comparable to the relevant Interest
Period and, through the transfer of such Eurodollar deposit from an offshore
office of that Lender to a domestic office of that Lender in the United States
of America; provided, however, that each Lender may fund each of its Eurodollar
Rate Loans in any manner it sees fit and the foregoing assumptions shall be
utilized only for the purposes of calculating amounts payable under this
subsection 2.6 and under subsection 2.7A.
G. Eurodollar Rate Loans After Default. After the occurrence of and during
the continuation of a Default or Event of Default, (i) the Company may not elect
to have a Loan be made or maintained as, or converted to, a Eurodollar Rate Loan
after the expiration of any Interest Period then in effect for that Loan and
(ii) subject to the provisions of subsection 2.6D, any Notice of Borrowing or
Notice of Conversion/Continuation given by the Company with respect to a
requested borrowing or conversion/continuation that has not yet occurred shall
be deemed to be rescinded by the Company.
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2.7 Increased Costs; Taxes; Capital Adequacy.
A. Compensation for Increased Costs and Taxes. Subject to the provisions
of subsection 2.7B, in the event that any Lender shall determine (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that any law, treaty or governmental rule, regulation
or order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a court or
governmental authority, in each case that becomes effective after the Closing
Date, or compliance by such Lender with any guideline, request or directive
issued or made after the date hereof by any central bank or other governmental
or quasi-governmental authority (whether or not having the force of law):
(i) results in a change in the basis of taxation of such Lender (or
its applicable lending office) (other than a change with respect to any
Tax on the overall net income of such Lender) with respect to this
Agreement or any of its obligations hereunder or any payments to such
Lender (or its applicable lending office) of principal, interest, fees or
any other amount payable hereunder;
(ii) imposes, modifies or holds applicable any reserve (including
without limitation any marginal, emergency, supplemental, special or other
reserve), special deposit, compulsory loan, FDIC insurance or similar
requirement against assets held by, or deposits or other liabilities in or
for the account of, or advances or loans by, or other credit extended by,
or any other acquisition of funds by, any office of such Lender (other
than any such reserve or other requirements with respect to Eurodollar
Rate Loans that are reflected in the definition of Reserve Adjusted
Eurodollar Rate); or
(iii) imposes any other condition (other than with respect to a Tax
matter) on or affecting such Lender (or its applicable lending office) or
its obligations hereunder, or the London interbank market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Eurodollar Rate Loans hereunder or to
reduce any amount received or receivable by such Lender (or its applicable
lending office) with respect thereto; then, in any such case, the Lender shall
promptly notify the Company and the Administrative Agent thereof and the Company
shall promptly pay to such Lender, upon receipt of the statement referred to in
the next sentence, such additional amount or amounts (in the form of an
increased rate of, or a different method of calculating, interest or otherwise
as such Lender shall reasonably determine) as may be necessary to compensate
such Lender for any such increased cost or reduction in amounts received or
receivable hereunder. Such Lender shall deliver to the Company (with a copy to
the Administrative Agent) a written statement, setting forth in reasonable
detail the basis for calculating the additional amounts owed to such Lender
under this subsection 2.7A, which statement shall be conclusive and binding upon
all parties hereto absent manifest error.
B. Withholding of Taxes.
(i) Payments to Be Free and Clear. All sums payable by the Company
under this Agreement and the other Loan Documents shall (except to the
extent required by law) be paid free and clear of, and without any
deduction or withholding on account of, any Tax (other than a Tax on the
overall net income of the Administrative Agent or any Lender) imposed,
levied, collected,
62
withheld or assessed by or within the United States of America.
(ii) Withholding of Taxes. Subject to the provisions of subsection
2.7B(iii), if the Company or any other Person is required by law to make
any deduction or withholding on account of any Tax (other than a Tax on
the overall net income of the Administrative Agent or any Lender) from any
sum paid or payable by the Company to the Administrative Agent or any
Lender under any of the Loan Documents:
(a) The Company shall notify the Administrative Agent of any
such requirement or any change in any such requirement as soon as
practicable;
(b) The Company shall pay any such Tax before the date on
which penalties attach thereto, such payment to be made (if the
liability to pay is imposed on the Company) for its own account or
(if that liability is imposed on the Administrative Agent or such
Lender, as the case may be) on behalf of and in the name of the
Administrative Agent or such Lender;
(c) the sum payable by the Company in respect of which the
relevant deduction, withholding or payment is required shall be
increased to the extent necessary to ensure that, after the making
of that deduction, withholding or payment, the Administrative Agent
or such Lender, as the case may be, receives on the due date a net
sum equal to what it would have received had no such deduction,
withholding or payment of such tax been required or made; and
(d) within 30 days after paying any sum from which it is
required by law to make any deduction or withholding, and within 30
days after the due date of payment of any Tax which it is required
by clause (b) above to pay, the Company shall deliver to the
Administrative Agent evidence satisfactory to the other affected
parties of such deduction, withholding or payment and of the
remittance thereof to the relevant taxing or other authority;
provided that no such additional amount shall be required to be paid to any
Lender under clause (c) above except to the extent that any change after the
Closing Date or after the date of the Assignment Agreement pursuant to which
such Lender became a Lender (in the case of each other Lender) in any such
requirement for a deduction, withholding or payment as is mentioned therein
shall result in an increase in the rate of such deduction, withholding or
payment from that in effect at the date of this Agreement or at the date of such
Assignment Agreement, as the case may be, in respect of payments to such Lender.
(iii) Evidence of Exemption from U.S. Withholding Tax.
(a) Each Lender that is not a United States Person (as such
term is defined in Section 7701(a)(30) of the Internal Revenue Code)
for U.S. federal income tax purposes (for purposes of this
subsection 2.7B(iii), a "Non-US Lender") shall deliver to each of
the Administrative Agent and the Company, on or prior to the Closing
Date, in the case of a Lender that is an assignee or transferee of
an interest under this Agreement pursuant to Sections 10.1, or on or
prior to the date of the Assignment Agreement pursuant to which it
becomes a Lender, and at such other times as may be necessary in the
determination of the Company or the Administrative Agent (each in
the reasonable exercise of its discretion), (1) two original copies
of Internal Revenue Service Form 1001 or 4224 (or
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any successor forms), accurately completed and duly executed by such
Lender, together with any other certificate or statement of
exemption required under the Internal Revenue Code or the
regulations issued thereunder to establish that such Lender is not
subject to deduction or withholding of United States federal income
tax with respect to any payments to such Lender of principal,
interest, fees or other amounts payable under any of the Loan
Documents or (2) if such Lender is not a "bank" or other Person
described in Section 881(c)(3) of the Internal Revenue Code and
cannot deliver either Internal Revenue Service Form 1001 or 4224
pursuant to clause (1) above, a Certificate of Non-Bank Status
together with an original copy of Internal Revenue Service Form W-8
(or any successor form), properly completed and duly executed by
such Lender, together with any other certificate or statement of
exemption required under the Internal Revenue Code or the
regulations issued thereunder to establish that such Lender is not
subject to deduction or withholding of United States federal income
tax with respect to any payments to such Lender of interest payable
under any of the Loan Documents.
(b) Each Lender required to deliver any forms, certificates or
other evidence with respect to United States federal income tax
withholding matters pursuant to subsection 2.7B(iii)(a) hereby
agrees, from time to time after the initial delivery by such Lender
of such forms, certificates or other evidence, whenever a lapse in
time or change in circumstances renders such forms, certificates or
other evidence obsolete or inaccurate in any material respect, such
Lender shall (1) deliver to each of the Administrative Agent and the
Company two new original copies of Internal Revenue Service Form
1001 or 4224, or a Certificate of Non-Bank Status and an original
copy of Internal Revenue Service Form W-8, as the case may be,
accurately completed and duly executed by such Lender, together with
any other certificate or statement of exemption required in order to
confirm or establish that such Lender is not subject to deduction or
withholding of or is subject to a reduced rate of withholding of
United States federal income tax with respect to payments to such
Lender under the Loan Documents or (2) immediately notify the
Administrative Agent and the Company of its inability to deliver any
such forms, certificates or other evidence.
(c) The Company shall not be required to pay any additional
amount to any Non-US Lender under clause (c) of subsection 2.7B(ii)
in respect of deductions or withholdings of United States federal
income taxes if such Lender shall have failed to satisfy the
requirements of subsection 2.7B(iii)(a) or 2.7B(iii)(b); provided
that if such Lender shall have satisfied such requirements on the
Closing Date or on the date of the Assignment Agreement pursuant to
which it became a Lender (in the case of each other Lender), nothing
in this subsection 2.7B(iii)(c) shall relieve the Company of its
obligation to pay any additional amounts pursuant to clause (c) of
subsection 2.7B(ii) in the event that, as a result of any change
after the Closing Date in any applicable law, treaty or governmental
rule, regulation or order, or any change in the interpretation,
administration or application thereof, such Lender is no longer
properly entitled to deliver forms, certificates or other evidence
at a subsequent date establishing the fact that such Lender is not
subject to withholding as described in subsection 2.7B(iii)(a) or
2.7B(iii)(b).
C. Capital Adequacy Adjustment. If any Lender shall have determined that
the adoption, effectiveness, phase-in or applicability after the Closing Date of
any law, rule or regulation (or any provision thereof) regarding capital
adequacy, or any change therein or in the interpretation or
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administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or its applicable lending office) with any guideline, request or
directive regarding capital adequacy (whether or not having the force of law) of
any such governmental authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on the capital of such Lender or
any corporation controlling such Lender as a consequence of, or with reference
to, such Lender's Loans or Commitments or Letters of Credit or participations
therein or other obligations hereunder with respect to the Loans or the Letters
of Credit to a level below that which such Lender reasonably determines such
Lender or such controlling corporation could have achieved but for such
adoption, effectiveness, phase-in, applicability, change or compliance (taking
into consideration the policies of such Lender or such controlling corporation
with regard to capital adequacy), then from time to time, within fifteen
Business Days after receipt by the Company from such Lender of the statement
referred to in the next sentence, the Company shall pay to such Lender such
additional amount or amounts as will compensate such Lender or such controlling
corporation on an after-tax basis for such reduction. Such Lender shall deliver
to the Company (with a copy to the Administrative Agent) a written statement,
setting forth in reasonable detail the basis of the calculation of such
additional amounts, which statement shall be conclusive and binding upon all
parties hereto absent manifest error.
D. Substitute Lenders. In the event the Company is required under the
provisions of this subsection 2.7 to make payments in a material amount to any
Lender or in the event any Lender fails to lend to the Company in accordance
with this Agreement, the Company may, so long as no Default or Event of Default
shall have occurred and be continuing, elect to terminate such Lender as a party
to this Agreement; provided that, concurrently with such termination, (i) the
Company shall pay that Lender all principal, interest and fees and other amounts
(including without limitation amounts, if any, owed under this subsection 2.7)
due to be paid to such Lender with respect to all periods through such date of
termination, (ii) another financial institution satisfactory to the Company and
the Administrative Agent (or, in the event the Administrative Agent is also the
Lender to be terminated, the successor Administrative Agent) shall agree, as of
such date, to become a Lender for all purposes under this Agreement (whether by
assignment or amendment) and to assume all obligations of the Lender to be
terminated as of such date, and (iii) all documents and supporting materials
necessary, in the judgment of the Administrative Agent (or, in the event the
Administrative Agent is also the Lender to be terminated, the successor
Administrative Agent) to evidence the substitution of such Lender shall have
been received and approved by the Administrative Agent as of such date.
2.8 Obligation of Lenders and Issuing Bank to Mitigate.
Each Lender and the Issuing Bank agrees that, as promptly as practicable
after the officer of such Lender or the Issuing Bank responsible for
administering the Loans or Letters of Credit of such Lender or the Issuing Bank,
as the case may be, becomes aware of the occurrence of an event or the existence
of a condition that would cause such Lender to become an Affected Lender or that
would entitle such Lender or the Issuing Bank to receive payments under
subsection 2.7 or subsection 3.6, it will, to the extent not inconsistent with
the internal policies of such Lender or the Issuing Bank and any applicable
legal or regulatory restrictions, use reasonable efforts (i) to make, issue,
fund or maintain the Commitments of such Lender or the affected Loans or Letters
of Credit of such Lender or the Issuing Bank through another lending or letter
of credit office of such Lender or the Issuing Bank, or (ii) take such other
measures as such Lender or the Issuing Bank may deem reasonable, if as a result
thereof the circumstances which
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would cause such Lender to be an Affected Lender would cease to exist or the
additional amounts which would otherwise be required to be paid to such Lender
or the Issuing Bank pursuant to subsection 2.7 or subsection 3.6 would be
materially reduced and if, as determined by such Lender or the Issuing Bank in
its sole discretion, the making, issuing, funding or maintaining of such
Commitments or Loans or Letters of Credit through such other the lending or
letter of credit office or in accordance with such other measures, as the case
may be, would not otherwise materially adversely affect such Commitments or
Loans or Letters of Credit or the interests of such Lender or the Issuing Bank;
provided that such Lender or the Issuing Bank will not be obligated to utilize
such other lending or letter of credit office pursuant to this subsection 2.8
unless the Company agrees to pay all incremental expenses incurred by such
Lender or the Issuing Bank as a result of utilizing such other lending or letter
of credit office. A certificate as to the amount of any such expenses payable by
the Company pursuant to this subsection 2.8 (setting forth in reasonable detail
the basis for requesting such amount) submitted by such Lender or the Issuing
Bank to the Company (with a copy to the Administrative Agent) shall be
conclusive absent manifest error.
SECTION 3.
LETTERS OF CREDIT
3.1 Issuance of Letters of Credit and Lenders' Purchase of Participations
Therein.
A. Letters of Credit. In addition to the Company requesting that Lenders
make Revolving Loans pursuant to subsection 2.1A(iii) and that the Swing Line
Lender make Swing Line Loans pursuant to subsection 2.1A(iv), the Company may
request, in accordance with the provisions of this subsection 3.1, from time to
time during the period from the Closing Date to but excluding the date which is
five (5) Business Days before the Revolving Loan Commitment Termination Date,
that the Issuing Bank issue Letters of Credit for the account of the Company for
the purposes specified in the definitions of Commercial Letters of Credit and
Standby Letters of Credit. Subject to and upon the terms and conditions of this
Agreement and in reliance upon the representations and warranties of Loan
Parties herein set forth, the Issuing Bank agrees to issue such Letters of
Credit in accordance with the provisions of this subsection 3.1; provided that
the Company shall not request that the Issuing Bank issue (and the Issuing Bank
shall not issue):
(i) any Letter of Credit if, after giving effect to such issuance,
the Total Utilization of Revolving Loan Commitments would exceed the
Revolving Loan Commitments then in effect;
(ii) any Letter of Credit if, after giving effect to such issuance,
the Letter of Credit Usage would exceed the Letter of Credit Subfacility
Commitment;
(iii) any Standby Letter of Credit having an expiration date later
than the earlier of (a) five (5) Business Days prior to the Revolving Loan
Commitment Termination Date and (b) the date which is one year from the
date of issuance of such Standby Letter of Credit; provided, that the
immediately preceding clause (b) shall not prevent the Issuing Bank from
agreeing that a Standby Letter of Credit will automatically be extended
for one or more successive periods absent a Default or Event of Default,
subject to the immediately preceding clause (a), not to exceed one year
each unless the Issuing Bank elects not to extend for any such additional
period; provided, further, that, unless the Requisite Lenders otherwise
consent, the Issuing Bank shall give notice that it will not extend such
Standby Letter of Credit if it has knowledge that a Default or Event of
Default has occurred and is continuing on the last day on which such
Issuing Bank may give notice to the beneficiary that it will not extend
such Standby Letter of Credit;
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(iv) any Commercial Letter of Credit (a) having an expiration date
later than the earlier of (x) thirty (30) days prior to the Revolving Loan
Commitment Termination Date and (y) the date which is one hundred eighty
(180) days from the date of issuance of such Commercial Letter of Credit
or (b) that is otherwise unacceptable to the Issuing Bank in its
reasonable discretion;
(v) any Letter of Credit denominated in a currency other than
Dollars; or
(vi) any Letter of Credit during any period when a Lender Default
exists, unless the Issuing Bank has entered into arrangements satisfactory
to it and the Company to eliminate the Issuing Bank's risk with respect to
the Defaulting Lender, including by cash collateralizing such Defaulting
Lender's Pro Rata Share of the Letter of Credit Usage (after giving effect
to the issuance of the proposed Letter of Credit).
B. Mechanics of Issuance.
(i) Notice of Issuance. Whenever the Company desires the issuance of
a Letter of Credit, it shall deliver to the Issuing Bank, at the Letter of
Credit Issuing Office, and the Administrative Agent, at the Funding and
Payment Office, a Notice of Issuance of Letter of Credit no later than
12:00 Noon (New York time) at least five (5) Business Days, or such
shorter period as may be agreed to by the Issuing Bank in any particular
instance, in advance of the proposed date of issuance. The Notice of
Issuance of Letter of Credit shall specify (a) the proposed date of
issuance (which shall be a Business Day), (b) the face amount of or
maximum aggregate liability under, as applicable, the Letter of Credit,
(c) the expiration date of the Letter of Credit, (d) the name and address
of the beneficiary, and (e) the verbatim text of the proposed Letter of
Credit or the proposed terms and conditions thereof, including a precise
description of any documents and the verbatim text of any certificates to
be presented by the beneficiary which, if presented by the beneficiary
prior to the expiration date of the Letter of Credit, would require the
Issuing Bank to make payment thereunder; provided that the Issuing Bank,
in its reasonable discretion, may require changes in the text of the
proposed Letter of Credit or any such documents or certificates; provided
further that no Letter of Credit shall require payment against a
conforming draft or other request for payment to be made thereunder on the
same business day (under the laws of the jurisdiction in which the office
of the Issuing Bank to which such draft or other request for payment is
required to be presented is located) that such draft or other request for
payment is presented if such presentation is made after 10:00 A.M. (in the
time zone of such office of the Issuing Bank) on such Business Day.
The Company shall notify the Issuing Bank and the Administrative
Agent prior to the issuance of any Letter of Credit in the event that any
of the matters to which the Company is required to certify in the
applicable Notice of Issuance of Letter of Credit is no longer true and
correct as of the proposed date of issuance of such Letter of Credit, and
upon the issuance of any Letter of Credit, the Company shall be deemed to
have re-certified, as of the date of such issuance, as to the matters to
which the Company is required to certify in the applicable Notice of
Issuance of Letter of Credit.
(ii) Issuance of Letter of Credit. Upon satisfaction or waiver (in
accordance with subsection 10.6) of the conditions set forth in subsection
4.3, the Issuing Bank shall issue the requested Letter of Credit in
accordance with the Issuing Lender's standard procedures, and upon
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its issuance of such Letter of Credit the Issuing Bank shall promptly
notify the Administrative Agent and each Lender of such issuance, which
notice shall be accompanied by a copy of such Letter of Credit.
(iii) Reports to Lenders. Within thirty (30) days after the end of
each calendar quarter ending after the Closing Date, so long as any Letter
of Credit shall have been outstanding during such calendar quarter, the
Issuing Bank shall deliver to the Administrative Agent and the
Administrative Agent shall deliver to each Lender a report setting forth
for such calendar quarter the daily maximum amount available to be drawn
under the Letters of Credit that were outstanding during such calendar
quarter.
C. Lenders' Purchase of Participations in Letters of Credit. Immediately
upon the issuance of each Letter of Credit, each Lender shall be deemed to, and
hereby agrees to, have irrevocably purchased from the Issuing Bank a
participation in such Letter of Credit and any drawings honored or payments made
thereunder in an amount equal to such Lender's Pro Rata Share (with respect to
the Revolving Loan Commitments) of the maximum amount which is or at any time
may become available to be drawn or required to be paid thereunder.
3.2 Letter of Credit Fees.
The Company agrees to pay the following amounts to the Issuing Bank with
respect to Letters of Credit issued by it for the account of the Company:
(i) with respect to each Letter of Credit, (a) a fronting fee equal
to 0.25% per annum of the daily maximum amount available to be drawn under
such Letter of Credit and (b) a Letter of Credit fee equal to the product
of (x) the then Applicable Eurodollar Rate Margin with respect to
Revolving Loans and (y) the daily maximum amount available to be drawn
under such Letter of Credit, in each case payable in arrears on and to the
last Business Day in each of March, June, September and December of each
year, commencing December 1998, and on the Revolving Loan Commitment
Termination Date and computed on the basis of a 360-day year for the
actual number of days elapsed; and
(ii) with respect to the issuance, amendment or transfer of each
Letter of Credit and each drawing made thereunder (without duplication of
the fees payable under clause (i) above), documentary and processing
charges in accordance with such Issuing Lender's standard schedule for
such charges in effect at the time of such issuance, amendment, transfer
or drawing, as the case may be.
Promptly upon receipt by such Issuing Bank of any amount described in clause
(i)(b) of this subsection 3.2, such Issuing Bank shall distribute to each other
Lender having Revolving Loan Exposure its Pro Rata Share of such amount.
3.3 Drawings and Payments and Reimbursement of Amounts Drawn or Paid Under
Letters of Credit.
A. Responsibility of Issuing Bank With Respect to Requests For Drawings
and Payments. In determining whether to honor any drawing or request for payment
under any Letter of Credit by the beneficiary thereof, the Issuing Bank shall be
responsible only to determine that the
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documents and certificates required to be delivered under such Letter of Credit
have been delivered and that they comply on their face with the requirements of
such Letter of Credit.
B. Reimbursement by the Company of Amounts Drawn or Paid Under Letters of
Credit. In the event an Issuing Bank has determined to honor a drawing or
request for payment under a Letter of Credit issued by it, the Issuing Bank
shall immediately notify the Company and the Administrative Agent, and the
Company shall reimburse such Issuing Bank on or before the Business Day on which
such drawing is honored or such payment is made (the applicable "Reimbursement
Date") in an amount in same day funds equal to the amount of such honored
drawing; provided that, anything contained in this Agreement to the contrary
notwithstanding, (i) unless the Company shall have notified the Administrative
Agent and the Issuing Bank prior to 12:00 Noon (New York time) on the date of
such honored drawing or request for payment that the Company intends to
reimburse such Issuing Bank for the amount of such honored drawing or payment
with funds other than the proceeds of Revolving Loans, the Company shall be
deemed to have given a timely Notice of Borrowing to the Administrative Agent
requesting the Lenders to make Revolving Loans which are Base Rate Loans on the
applicable Reimbursement Date in an amount equal to the amount of such honored
drawing or payment and (ii) subject to satisfaction or waiver of the conditions
specified in subsection 4.2B, the Lenders shall, on the applicable Reimbursement
Date, make Revolving Loans in the amount of such honored drawing or payment, the
proceeds of which shall be applied directly by the Administrative Agent to
reimburse the Issuing Bank for the amount of such honored drawing or payment;
provided further that if for any reason proceeds of Revolving Loans are not
received by the Issuing Bank on the applicable Reimbursement Date in an amount
equal to the amount of such honored drawing or payment, the Company shall
reimburse the Issuing Bank, on demand, in an amount in same day funds equal to
the excess of the amount of such honored drawing or payment over the aggregate
amount of such Revolving Loans, if any, which are so received. Nothing in this
subsection 3.3B shall be deemed to relieve any Lender from its obligation to
make Revolving Loans on the terms and conditions set forth in this Agreement,
and the Company shall retain any and all rights it may have against any Lender
resulting from the failure of such Lender to make such Revolving Loans under
this subsection 3.3B.
C. Payment by Lenders of Unreimbursed Drawings or Payments Under Letters
of Credit.
(i) Payment by Lenders. In the event that the Company shall fail for
any reason to reimburse any Issuing Bank as provided in subsection 3.3B in
an amount equal to the amount of any honored drawing or payment made by
such Issuing Bank under a Letter of Credit issued by it, such Issuing Bank
shall promptly notify each other Lender of the unreimbursed amount of such
honored drawing or payment and of such other Lender's respective
participation therein based on such Lender's Pro Rata Share of the
Revolving Loan Commitments. Each Lender shall make available to such
Issuing Bank an amount equal to its respective participation, in same day
funds, at the office of such Issuing Bank specified in such notice, not
later than 2:00 P.M. (New York time) on the first business day (under the
laws of the jurisdiction in which such office of such Issuing Bank is
located) after the date notified by such Issuing Bank. In the event that
any Lender fails to make available to such Issuing Bank on such business
day the amount of such Lender's participation in such Letter of Credit as
provided in this subsection 3.3C, such Issuing Bank shall be entitled to
recover such amount on demand from such Lender together with interest
thereon at the rate customarily used by such Issuing Bank for the
correction of errors among banks for three Business Days and thereafter at
the Base Rate. Nothing in this subsection 3.3C shall be deemed to
prejudice the right of any Lender to recover from any Issuing Bank any
amounts made available
69
by such Lender to such Issuing Bank pursuant to this subsection 3.3C in
the event that it is determined by the final judgment of a court of
competent jurisdiction that the payment with respect to a Letter of Credit
by such Issuing Bank in respect of which payment was made by such Lender
constituted gross negligence or willful misconduct on the part of such
Issuing Bank.
(ii) Distribution to Lenders of Reimbursements Received From the
Company. In the event any Issuing Bank shall have been reimbursed by other
Lenders pursuant to subsection 3.3C(i) for all or any portion of any
honored drawing or payment made by such Issuing Bank under a Letter of
Credit issued by it, such Issuing Bank shall distribute to each other
Lender which has paid all amounts payable by it under subsection 3.3C(i)
with respect to such honored drawing or payment such other Lender's Pro
Rata Share of all payments subsequently received by such Issuing Bank from
the Company in reimbursement of such honored drawing or payment when such
payments are received. Any such distribution shall be made to a Lender at
its primary address set forth below its name on the appropriate signature
page hereof or at such other address as such Lender may request.
D. Interest on Amounts Drawn or Paid Under Letters of Credit.
(i) Payment of Interest by the Company. The Company agrees to pay to
each Issuing Bank, with respect to drawings or payments made under any
Letters of Credit issued by it, interest on the amount paid by such
Issuing Bank in respect of each such drawing or payment from the date such
drawing is honored or payment is made to but excluding the date such
amount is reimbursed by the Company (including any such reimbursement out
of the proceeds of Revolving Loans pursuant to subsection 3.3B) at a rate
equal to (a) for the period from the date such drawing is honored or
payment is made to but excluding the applicable Reimbursement Date, the
Base Rate plus the Applicable Base Rate Margin with respect to Revolving
Loans, and (b) thereafter, a rate which is 2% per annum in excess of the
rate of interest described in the foregoing clause (a). Interest payable
pursuant to this subsection 3.3D(i) shall be computed on the basis of a
360-day year for the actual number of days elapsed in the period during
which it accrues and shall be payable on demand or, if no demand is made,
on the date on which the related drawing or payment under a Letter of
Credit is reimbursed in full.
(ii) Distribution of Interest Payments by Issuing Bank. Promptly
upon receipt by any Issuing Bank of any payment of interest pursuant to
subsection 3.3D(i), (a) such Issuing Bank shall distribute to each other
Lender, out of the interest received by such Issuing Bank in respect of
the period from the date of the applicable honored drawing or payment
under a Letter of Credit issued by such Issuing Bank to but excluding the
date on which such Issuing Bank is reimbursed for the amount of such
drawing or payment (including any such reimbursement out of the proceeds
of Revolving Loans pursuant to subsection 3.3B), the amount that such
other Lender would have been entitled to receive in respect of the Letter
of Credit fee that would have been payable in respect of such Letter of
Credit for such period pursuant to subsection 3.2 if no drawing had been
honored or payment had been made under such Letter of Credit, and (b) in
the event such Issuing Bank shall have been reimbursed by other Lenders
pursuant to subsection 3.3C(i) for all or any portion of such drawing or
payment, such Issuing Bank shall distribute to each other Lender which has
paid all amounts payable by it under subsection 3.3C(i) with respect to
such drawing or payment such other Lender's Pro Rata Share of any interest
received by such Issuing Bank in respect of that portion of such drawing
or payment so reimbursed by other Lenders for the period from the date on
which such Issuing Bank was so reimbursed by other Lenders to and
including the date on
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which such portion of such drawing or payment is reimbursed by the
Company. Any such distribution shall be made to a Lender at its Lending
Office set forth on Schedule 2.1 or at such other address as such Lender
may request.
3.4 Obligations Absolute.
The obligation of the Company to reimburse each Issuing Bank for drawings
honored or payments made under the Letters of Credit issued by it and to repay
any Revolving Loans made by the Lenders pursuant to subsection 3.3B and the
obligations of the Lenders under subsection 3.3C(i) shall be unconditional and
irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances including, without limitation, the following
circumstances:
(i) any lack of validity or enforceability of any Letter of Credit;
(ii) the existence of any claim, set-off, defense or other right
which the Company or any Lender may have at any time against a beneficiary
or any transferee of any Letter of Credit (or any Persons for whom any
such transferee may be acting), any Issuing Bank or other Lender or any
other Person or, in the case of a Lender, against the Company whether in
connection with this Agreement, the transactions contemplated herein or
any unrelated transaction (including any underlying transaction between
the Company or one of its Subsidiaries and the beneficiary for which any
Letter of Credit was procured);
(iii) any draft, demand, certificate or other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) payment by the applicable Issuing Bank under any Letter of
Credit against presentation of a demand, draft or certificate or other
document which appears to substantially comply with the terms of such
Letter of Credit;
(v) any adverse change in the business, operations, properties,
assets, condition (financial or otherwise) or prospects of the Company or
any of its Subsidiaries;
(vi) any breach of this Agreement or any other Loan Document by any
party thereto;
(vii) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing; or
(viii) the fact that Default or Event of Default shall have occurred
and be continuing;
provided, in each case, that payment by the applicable Issuing Bank under the
applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of such Issuing Bank under the circumstances in question (as
determined by a final judgment of a court of competent jurisdiction).
3.5 Indemnification; Nature of Issuing Lender's Duties.
A. Indemnification. In addition to amounts payable as provided in
subsection 3.6, the Company hereby agrees to protect, indemnify, pay and save
harmless each Issuing Bank from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including
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reasonable fees, expenses and disbursements of counsel and allocated costs of
internal counsel) which such Issuing Bank may incur or be subject to as a
consequence, direct or indirect, of (i) the issuance of any Letter of Credit by
such Issuing Bank, other than as a result of (a) the gross negligence or willful
misconduct of such Issuing Bank as determined by a final judgment of a court of
competent jurisdiction or (b) subject to the following clause (ii), the wrongful
dishonor by such Issuing Bank of a proper demand for payment made under any
Letter of Credit issued by it or (ii) the failure of such Issuing Bank to honor
a drawing or other request for payment under any such Letter of Credit as a
result of any act or omission, whether rightful or wrongful, of any present or
future de jure or de facto government or governmental authority (all such acts
or omissions herein called "Governmental Acts").
B. Nature of Issuing Bank's Duties. As between the Company and any Issuing
Bank, the Company assumes all risks of the acts and omissions of, or misuse of
the Letters of Credit issued by such Issuing Bank by, the respective
beneficiaries of such Letters of Credit. In furtherance and not in limitation of
the foregoing, such Issuing Bank shall not be responsible for: (i) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
any such Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) failure of the beneficiary of
any such Letter of Credit to comply fully with any conditions required in order
to draw upon such Letter of Credit; (iv) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any such
Letter of Credit or of the proceeds thereof; (vii) the misapplication by the
beneficiary of any such Letter of Credit of the proceeds of any drawing or
payment under such Letter of Credit; or (viii) any consequences arising from
causes beyond the control of such Issuing Bank, including without limitation any
Governmental Acts, and none of the above shall affect or impair, or prevent the
vesting of, any of such Issuing Lender's rights or powers hereunder.
In furtherance and extension and not in limitation of the specific
provisions set forth in the first paragraph of this subsection 3.5B, any action
taken or omitted by any Issuing Bank under or in connection with the Letters of
Credit issued by it or any documents and certificates delivered thereunder, if
taken or omitted in good faith, shall not put such Issuing Bank under any
resulting liability to the Company.
Notwithstanding anything to the contrary contained in this subsection 3.5,
the Company shall retain any and all rights it may have against any Issuing Bank
for any liability arising solely out of the gross negligence or willful
misconduct of such Issuing Bank, as determined by a final judgment of a court of
competent jurisdiction.
3.6 Increased Costs and Taxes Relating to Letters of Credit.
In the event that any Issuing Bank or any Lender shall determine (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that any law, treaty or governmental rule, regulation
or order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a court or
governmental authority, in each case that becomes effective after the Closing
Date, or compliance by any Issuing Bank or Lender with any guideline, request or
72
directive issued or made after the Closing Date by any central bank or other
governmental or quasi-governmental authority (whether or not having the force of
law):
(i) results in any change in the basis of taxation of such Issuing
Bank or any Lender (or its applicable lending or letter of credit office)
(other than a change with respect to any Tax on the overall net income of
such Issuing Bank or Lender) with respect to the issuing or maintaining of
any Letters of Credit or the purchasing or maintaining of any
participations therein or any other obligations under this Section 3,
whether directly or by such being imposed on or suffered by any particular
Issuing Bank;
(ii) imposes, modifies or holds applicable any reserve (including
without limitation any marginal, emergency, supplemental, special or other
reserve), special deposit, compulsory loan, FDIC insurance or similar
requirement in respect of any Letters of Credit issued by any Issuing Bank
or participations therein purchased by any Lender; or
(iii) imposes any other condition on or affecting such Issuing Bank
or Lender (or its applicable lending or letter of credit office) regarding
this Section 3 or any Letter of Credit or any participation therein;
and the result of any of the foregoing is to increase the cost to such Issuing
Bank or Lender of agreeing to issue, issuing or maintaining any Letter of Credit
or agreeing to purchase, purchasing or maintaining any participation therein or
to reduce any amount received or receivable by such Issuing Bank or Lender (or
its applicable lending or letter of credit office) with respect thereto; then,
in any case, the Company shall promptly pay to such Issuing Bank or Lender, upon
receipt of the statement referred to in the next sentence, such additional
amount or amounts (reasonably determined by such Issuing Bank or Lender) as may
be necessary to compensate such Issuing Bank or Lender for any such increased
cost or reduction in amounts received or receivable hereunder. Such Issuing Bank
or Lender shall deliver to the Company a written statement, setting forth in
reasonable detail the basis for calculating the additional amounts owed to such
Issuing Bank or Lender under this subsection 3.6, which statement shall be
conclusive and binding upon all parties hereto absent manifest error.
SECTION 4.
CONDITIONS TO LOANS AND LETTERS OF CREDIT
The obligations of the Lenders to make loans and of the Issuing Bank to
issue Letters of Credit hereunder are subject to the satisfaction of the
following conditions.
4.1 Conditions to Term Loans; Initial Revolving Loans.
The obligations of the Lenders to make the Term Loans and the Revolving
Loans to be made on the Closing Date are, in addition to the conditions
precedent specified in subsection 4.2, subject to prior or concurrent
satisfaction of the following conditions:
A. Parent and Company Documents. On or before the Closing Date, each of
the Parent and the Company shall deliver or cause to be delivered to the Lenders
and Agents (or to the Administrative Agent for the Lenders with sufficient
originally executed copies, where appropriate, for each Lender and Agent and its
counsel) the following, each, unless otherwise noted, dated the Closing Date:
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(i) Certified copies of its Certificate of Incorporation, together
with a good standing certificate from the Secretary of State of the State
of Delaware, each state in which any of its Real Property Asset is located
and each other state in which it is qualified as a foreign corporation to
do business, each dated a recent date prior to the Closing Date;
(ii) Copies of its Bylaws, certified as of the Closing Date by its
corporate secretary or an assistant secretary;
(iii) Resolutions of its Board of Directors approving and
authorizing the execution, delivery and performance of this Agreement and
the other Loan Documents and the Transaction Documents to which it is a
party or by which it or its assets may be bound as of the Closing Date,
certified as of the Closing Date by its corporate secretary or an
assistant secretary as being in full force and effect without modification
or amendment;
(iv) Incumbency certificates of its officers executing this
Agreement and the other Loan Documents to which it is a party as of the
Closing Date;
(v) Executed originals of this Agreement and the other Loan
Documents to which it is a party;
(vi) Certified copies of each of the other Transaction Documents to
which it is a party; and
(vii) Such other documents as the Administrative Agent may
reasonably request.
B. Subsidiary Documents. On or before the Closing Date, the Company shall
deliver or cause to be delivered to the Lender and Agents (or to the
Administrative Agent for the Lenders with sufficient originally executed copies,
where appropriate, for each Lender and Agent and its counsel) the following for
each of its Subsidiaries (which may be waived by the Agents for any Subsidiaries
of the Company with respect to the items described in clause (i) below) after
giving effect to the Transactions, each, unless otherwise noted, dated the
Closing Date:
(i) Certified copies of the Organizational Certificate, together
with a good standing certificate from the applicable Governmental
Authority of its jurisdiction of incorporation, organization or formation,
each state in which a Real Property Asset of such Subsidiary is located
and each other jurisdiction in which it is qualified as a foreign
corporation or other entity to do business, each dated a recent date prior
to the Closing Date;
(ii) Copies of the Organizational Documents of such Subsidiary,
certified as of the Closing Date by its corporate secretary or an
assistant secretary;
(iii) Copies of the Organizational Authorizations of such Subsidiary
approving and authorizing the execution, delivery and performance of the
Subsidiary Guaranty or the Foreign Subsidiary Guaranty, as the case may
be, and the other Loan Documents to which such Subsidiary is party,
certified as of the Closing Date by its corporate secretary or an
assistant secretary as being in full force and effect without modification
or amendment;
(iv) Incumbency certificates of its officers executing the
Subsidiary Guaranty or the
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Foreign Subsidiary Guaranty, as the case may be, and the other Loan
Documents to which such Subsidiary is party;
(v) Executed originals of the Subsidiary Guaranty or the Foreign
Subsidiary Guaranty, as the case may be, and the other Loan Documents to
which such Subsidiary is party, it being understood that (a) the
Collateral Documents to which Newmall and ▇▇▇▇▇▇▇ UK are to be parties
shall, if requested by the Agents, be governed by English law pursuant to
documentation reasonably satisfactory in form and substance to the Agents
and (b) Excluded Foreign Subsidiaries shall not be required to become
parties to the Loan Documents;
(vi) Certified copies of each of the other Transaction Documents to
which such Subsidiary is a party; and
(vii) Such other documents as any Agent may reasonably request.
C. Consummation of Transactions.
(i) (a) Each of the Transaction Documents (other than the
documentation described in clause (viii) of the definition thereof) shall
be in form and substance reasonably satisfactory to the Agents and each
such Transaction Document shall be in full force and effect; provided that
the terms and conditions of any Transaction Document dated and delivered
to the Agents and the Lenders prior to the date hereof shall be deemed
satisfactory to the Agents and the Lenders to the extent there has been no
material amendments or other modifications thereto and (b) all conditions
to the Transactions set forth in the Transaction Documents (other than the
documentation described in clause (viii) of the definition thereof) shall
have been satisfied or the fulfillment of any such conditions shall have
been waived with the consent of the Agents;
(ii) the Existing Investors shall have made, and Newmall shall have
received, the Equity Contribution and Newmall shall have applied the
proceeds thereof to repay the Newmall ESP Intercompany Indebtedness and
the Agents shall have received evidence reasonably satisfactory to it of
the foregoing;
(iii) the Newmall Stock Contribution shall have been consummated in
accordance with the Newmall Stock Contribution Agreement and the Agents
shall have received evidence reasonably satisfactory to them of the
foregoing;
(iv) (a) the Parent shall have effected and consummated the issuance
of the Senior Discount Notes and received gross cash proceeds, net of
reasonable fees and expenses, of at least $100,000,000 in connection
therewith, the Parent shall have contributed such proceeds to the Company
and the Agents shall have received evidence reasonably satisfactory to
them of the foregoing, and (b) the Company shall have effected and
consummated the issuance of the Senior Subordinated Notes and received
gross cash proceeds, net of reasonable fees and expenses, of at least
$100,000,000 and the Agents shall have received evidence satisfactory to
them of the foregoing;
(v) each of the Debt Tender Offer, the purchase of all Existing
Senior Notes and Existing Senior Subordinated Notes tendered pursuant
thereto (or, to the extent not tendered pursuant thereto, the defeasance
thereof to the respective earliest possible voluntary redemption
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dates thereunder following the Closing Date) and the Existing Indentures
Amendments shall have been effected and consummated and the Agents shall
have received evidence reasonably satisfactory to them of the foregoing;
(vi) Stone Rivet shall have effected and consummated the Shares
Tender Offer and the Shares Acquisition for an aggregate purchase price,
when taken together with the consideration to be paid pursuant to the ENR
Merger and option spread payments, not in excess of $266,300,000 and the
Agents shall have received evidence reasonably satisfactory to them of the
foregoing;
(vii) the ENR Merger shall have been effected and consummated and
the Agents shall have received a certified copy of the Merger Certificate;
(viii) the Company Stock Contribution shall have been consummated in
accordance with the Company Stock Contribution Agreement and the Agents
shall have received evidence reasonably satisfactory to them of the
foregoing;
(ix) the inter-company loans contemplated by the definition of
"Transactions" shall have been made and the Agents shall have received
evidence reasonably satisfactory to them of the foregoing;
(x) all restricted cash of ENR and its Subsidiaries (including,
without limitation, cash securing any of their Indebtedness or other
obligations, but excluding up to $5,000,000 of cash securing performance
bonds in respect of State Contracts and certain outstanding letters of
credit) shall have become unrestricted cash and shall have been used
towards the funding of the Transactions and Transaction Costs;
(xi) each of the other Transactions shall have been effected and
consummated to the reasonable satisfaction of the Agents; and
(xii) the Agents shall be reasonably satisfied with all matters
relating to the Transactions that could have a Material Adverse Effect,
including, without limitation, with (a) all material legal, tax and
accounting matters relating to the Transactions, and (b) the ability of
Subsidiaries of the Company, ENR and ESP to transfer funds to the Company,
ENR and ESP and the withholding tax consequences thereof.
D. Repayment of Existing Debt. After giving effect to the Transactions,
all Existing Debt shall have been paid in full (or, in the case of the Existing
Senior Notes and the Existing Senior Subordinated Notes, purchased pursuant to
the Debt Tender Offer or, to the extent not tendered pursuant thereto, a notice
to redeem on the earliest possible voluntary redemption dates thereunder
following the Closing Date shall have been delivered), any commitments to lend
thereunder shall have been terminated, all security interests created to secure
the obligations arising in connection therewith shall have been terminated or
effectively assigned to the Collateral Agent for the benefit of the Lenders, and
the Company shall have delivered to the Administrative Agent UCC-3 termination
statements or assignments (or comparable forms) and any and all other
instruments of release, satisfaction, assignment and/or reconveyance (or
evidence of the filing thereof) as may be necessary or advisable to terminate or
assign to the Collateral Agent for the benefit of the Lenders all such security
interests and all other security interests in the Collateral. The aggregate
amount of principal and premium required to repay, purchase and defease, as
applicable, all of the Existing Debt shall not exceed $442,800,000 or such
larger amount, if any, as is satisfactory to the Requisite Lenders in their sole
discretion.
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E. Necessary Consents. The Parent and the Company shall have obtained all
consents of Governmental Authorities and other Persons necessary or advisable in
connection with the Transactions and the continued operation of the business
conducted by the Company and its Subsidiaries, and each of the foregoing shall
be in full force and effect and in form and substance reasonably satisfactory to
the Agents (other than those listed on Schedule 4.1E the failure to obtain
which, either individually or in the aggregate, is not reasonably likely to have
a Material Adverse Effect). All applicable waiting periods shall have expired
without any action being taken or threatened by any competent authority which
would restrain, prevent or otherwise impose adverse conditions on the
Transactions or the financing thereof and no action, request for stay, petition
for review or rehearing, reconsideration or appeal shall be pending and any time
for agency action to set aside its consent on its own motion has expired.
F. Perfection of Security Interests. The Parent and the Company shall have
taken or caused to be taken such actions in such a manner so that the Collateral
Agent has a valid and perfected First Priority security interest in the entire
personal property (both tangible and intangible) and mixed Collateral. Such
actions shall include, without limitation: (i) the delivery pursuant to the
applicable Collateral Documents of (a) such certificates or other instruments
(each of which shall be registered in the name of the Collateral Agent or
properly endorsed in blank for transfer or accompanied by irrevocable undated
stock or equivalent powers duly endorsed in blank, all in form and substance
satisfactory to the Collateral Agent) representing all of the shares or other
interests of Capital Stock required to be pledged pursuant to the Collateral
Documents and (b) all promissory notes or other instruments (duly endorsed,
where appropriate, in a manner satisfactory to the Collateral Agent) evidencing
any Collateral; (ii) the delivery to the Collateral Agent of (a) the results of
a recent search, by a Person satisfactory to the Collateral Agent, of all
effective UCC financing statements and fixture filings and all judgment and tax
lien filings which may have been made with respect to any personal or mixed
property of any Loan Party, together with copies of all such filings disclosed
by such search; (iii) the delivery to the Collateral Agent of Uniform Commercial
Code financing statements executed by the applicable Loan Parties as to all such
Collateral granted by such Loan Parties for all jurisdictions as may be
necessary or desirable to perfect Administrative Agent's security interest in
such Collateral; (iv) the delivery to the Collateral Agent of evidence
reasonably satisfactory to the Collateral Agent that all other filings
(including, without limitation, Uniform Commercial Code termination statements
and releases and filings with the PTO and the United States Copyright Office
with respect to Intellectual Property of the Company and its Subsidiaries),
recordings and other actions the Collateral Agent deems necessary or advisable
to establish, preserve and perfect the First Priority Liens granted to the
Collateral Agent in personal (both tangible and intangible) and mixed property
shall have been made; and (v) such other filings, registrations, recordings and
other actions the Collateral Agent deems necessary or advisable to establish,
preserve and perfect the First Priority Liens granted to the Collateral Agent in
any Collateral, which by the nature, location or pledgor thereof, should be made
or taken in or with respect to any foreign jurisdiction.
G. Real Property. The Administrative Agent and the Collateral Agent shall
have received from the Company and each applicable Subsidiary Guarantor unless
waived by the Administrative Agent (in which case, any waived items shall be
delivered pursuant to subsection 6.12D):
(i) Closing Date Mortgages. Fully executed and notarized Mortgages
(each a "Closing Date Mortgage" and, collectively, the "Closing Date
Mortgages"), in proper form for recording in all appropriate places in all
applicable jurisdictions, encumbering each Real Property Asset listed in
Schedule 4.1G annexed hereto (each a "Closing Date Mortgaged Property"
and, collectively, the "Closing Date Mortgaged Properties");
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(ii) [RESERVED];
(iii) Title Insurance. (a) ALTA standard form mortgagee title
insurance policies or unconditional commitments therefor (the "Closing
Date Mortgage Policies") issued by the Title Company with respect to the
Closing Date Mortgaged Properties listed in Schedule 4.1G annexed hereto,
in amounts not less than the respective amounts designated on such
Schedule with respect to any particular Closing Date Mortgaged Properties,
insuring fee simple title to, or a valid leasehold interest in, each such
Closing Date Mortgaged Property vested in such Loan Party and insuring the
Collateral Agent that the applicable Closing Date Mortgages create valid
and enforceable First Priority mortgage Liens on the respective Closing
Date Mortgaged Properties encumbered thereby, subject only to a standard
survey exception limited to matters occurring after the date of the most
recent survey, which Closing Date Mortgage Policies (1) shall include an
endorsement for mechanics' liens, for future advances under this Agreement
and for any other matters reasonably requested by the Collateral Agent and
(2) shall provide for affirmative insurance and such reinsurance as the
Collateral Agent may reasonably request, all of the foregoing in form and
substance reasonably satisfactory to the Collateral Agent; and (b)
evidence satisfactory to the Collateral Agent that such Loan Party has (i)
delivered to the Title Company all certificates and affidavits required by
the Title Company in connection with the issuance of the Closing Date
Mortgage Policies and (ii) paid to the Title Company or to the appropriate
governmental authorities all expenses and premiums of the Title Company
and all other sums required in connection with the issuance of the Closing
Date Mortgage Policies and all recording and stamp taxes (including
mortgage recording and intangible taxes) payable in connection with
recording the Closing Date Mortgages in the appropriate real estate
records;
(iv) Title Reports. With respect to each Closing Date Mortgaged
Property listed in Schedule 4.1G annexed hereto, a title report issued by
the Title Company with respect thereto, dated a date, and in form and
substance, satisfactory to the Administrative Agent;
(v) Copies of Documents Relating to Title Exceptions. Copies of all
recorded documents listed as exceptions to title or otherwise referred to
in the Closing Date Mortgage Policies or in the title reports delivered
pursuant to clause (iv) above; and
(vi) Matters Relating to Flood Hazard Properties. (a) Evidence,
which may be in the form of a letter from an insurance broker or a
municipal engineer, as to whether (1) any Closing Date Mortgaged Property
is a Flood Hazard Property and (2) the community in which any such Flood
Hazard Property is located is participating in the National Flood
Insurance Program, (b) if there are any such Flood Hazard Properties, such
Loan Party's written acknowledgment of receipt of written notification
from Administrative Agent (1) as to the existence of each such Flood
Hazard Property and (2) as to whether the community in which each such
Flood Hazard Property is located is participating in the National Flood
Insurance Program, and (c) in the event any such Flood Hazard Property is
located in a community that participates in the National Flood Insurance
Program, evidence that Company has obtained flood insurance in respect of
such Flood Hazard Property to the extent required under the applicable
regulations of the Board of Governors of the Federal Reserve System.
H. Solvency Appraisal; Financial Condition Certificate. The Company shall
have delivered to the Administrative Agent (with copies for each Lender) (i) a
certificate from the chief
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financial officer of the Company, substantially in the form of Exhibit XVI
annexed hereto, and (ii) an opinion from an independent valuation consultant in
form, scope and substance satisfactory to the Agents, in each case, dated the
Closing Date and with appropriate attachments, demonstrating that after giving
effect to the consummation of the Transactions and the financing transactions
contemplated hereby, the Company and its Subsidiaries are and will be Solvent.
I. Transaction Costs. On or prior to the Closing Date, the Company shall
have delivered to the Administrative Agent (with copies for each Lender) a
schedule, in a form satisfactory to the Agents, setting forth the Company's
reasonable best estimate of the Transaction Costs (other than fees payable to
any of the Agents) and such estimate (together with all fees payable to the
Agents) shall not exceed $53,000,000.
J. Opinions of Loan Parties' Counsel. The Agents and their respective
counsel shall have received originally executed copies for each Agent and Lender
of one or more favorable written opinions of (i) White & Case LLP, special New
York counsel for the Loan Parties, and (ii) Shaw, Pittman, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇,
special counsel for the Loan Parties, in each case in form and substance
reasonably satisfactory to Agents and their counsel, dated as of the Closing
Date and setting forth substantially the matters in the opinions designated in
Exhibits X - A and B, respectively, and otherwise reasonably satisfactory to the
Agents.
K. Opinions of Counsel in the Transactions. The Agents and their
respective counsel shall have received copies of each legal opinion delivered by
any counsel for any Loan Party pursuant to the Transaction Documents, together
with a letter from counsel rendering each such opinion authorizing the Agents
and the Lenders to rely upon the applicable opinion to the same extent as though
it were addressed to the Agents and the Lenders.
L. Opinions of Administrative Agent's Counsel. The Agents shall have
received originally executed copies for each Agent and Lender of one or more
favorable written opinions of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, special
counsel to the Administrative Agent, dated as of the Closing Date, substantially
in the form of Exhibit XI annexed hereto and as to such other matters as the
Administrative Agent acting on behalf of the Lenders may reasonably request.
M. Fees and Expenses. The Company shall have paid to the Administrative
Agent, for distribution (as appropriate) to the Agents and the Lenders, the fees
payable on the Closing Date referred to in subsection 2.3 and any expenses owing
to any such Person by the Company as of the Closing Date.
N. Financial Statements. On or before the Closing Date, the Administrative
Agent and the Lenders shall have received from each of the Company, ENR and ESP,
the financial information and projections described in subsection 5.3 hereof,
together with supporting documentation in respect thereof, all in form and
substance satisfactory to the Agents.
O. Insurance Appraisal; Evidence of Insurance. The Administrative Agent
shall have received (i) a copy of the insurance report, prepared by Persons
reasonably satisfactory to the Agents, with respect to the Company and its
Subsidiaries and such report shall be in form, scope and substance satisfactory
to the Agents, and (ii) satisfactory certificates of insurance with respect to
each of the insurance policies required pursuant to subsection 6.4, and the
Agents shall be satisfied with the nature and scope of these insurance policies.
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P. Environmental. (i) The Administrative Agent shall have received
information in form, scope and substance reasonably satisfactory to the Agents
with respect to all Environmental Liabilities to which any Loan Party or its
Subsidiaries may be subject, and (ii) the Agents shall be reasonably satisfied
that the amount and nature of any such Environmental Liabilities and the plans
of each Loan Party with respect thereto, could not be reasonably expected to
have a Material Adverse Effect.
Q. No Material Adverse Effect. (i) Since December 31, 1997, (x) no
Material Adverse Effect shall have occurred, and (y) there shall not have been
any material adverse change, or any event, condition (financial or otherwise) or
development that could reasonably be expected to have a material adverse change,
in or affecting the general affairs, industry, management, condition, financial
position, prospects, shareholders equity or results of operations of the Company
Group taken as a whole, the ESP Group taken as a whole or the ENR Group taken as
a whole, (ii) any information submitted to Agents shall not have been
inaccurate, incomplete or misleading in any respect, which the Agents, in their
good faith judgment, deem to be material and adverse, and (iii) there shall not
have occurred or become known to any of the Agents or the Lenders any event or
events, adverse condition or change that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
R. Corporate and Capital Structure, Ownership, Management, Etc.
(i) Corporate Structure. The corporate organizational structure of
the Company and its Subsidiaries, both before and after giving effect to
the Transactions, shall be as set forth on Schedule 4.1R annexed hereto.
(ii) Capital Structure and Ownership. The respective capital
structures and ownership of the Parent and the Company, in each case after
giving effect to the Transactions, shall be as set forth on Schedule 4.1R
annexed hereto.
(iii) Management; Employment Contracts. The management structure of
the Company after giving effect to the Transactions shall be as set forth
on Schedule 4.1R annexed hereto. The Agents shall have received copies of,
and shall be reasonably satisfied with the form and substance of, any and
all employment contracts with senior management of the Company and its
Subsidiaries after giving effect to the Transactions.
S. Representations and Warranties; Performance of Agreements. The Company
shall have delivered to the Agents (with a sufficient number of originally
executed counterparts for the Lenders) an Officer's Certificate, in form and
substance satisfactory to the Agents, to the effect that the representations and
warranties in Section 5 hereof are true and correct in all material respects on
and as of the Closing Date, and both before and after giving effect to the
Transactions, to the same extent as though made on and as of that date and that
the Company shall have performed in all material respects all agreements and
satisfied all conditions which this Agreement provides shall be performed or
satisfied by them on or before the Closing Date.
T. Completion of Proceedings. All corporate and other proceedings taken or
to be taken in connection with the transactions contemplated hereby and all
documents incidental thereto shall be satisfactory in form and substance to the
Agents and their respective counsel, and the Agents and such counsel shall have
received all such counterpart originals or certified copies of such documents,
instruments and legal opinions as any of the Agents may reasonably request.
U. No Litigation. There shall be no litigation or administrative
proceedings or other legal or
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regulatory developments, actual or threatened, that, singly or in the aggregate,
could reasonably be expected to have a Material Adverse Effect or that has a
reasonable likelihood of restraining, preventing or imposing burdensome
conditions on any of the Transactions.
4.2 Conditions to All Loans.
The obligations of the Lenders to make Loans on each Funding Date are
subject to the following further conditions precedent:
A. The Administrative Agent shall have received before that Funding Date,
in accordance with the provisions of subsection 2.1B, an originally executed
Notice of Borrowing, in each case signed by the chief executive officer or the
chief financial officer of the Company or by any executive officer of the
Company designated by any of the above-described officers on behalf of the
Company in a writing delivered to the Administrative Agent.
B. As of that Funding Date:
(i) The representations and warranties contained herein and in the
other Loan Documents shall be true and correct in all material respects on
and as of that Funding Date to the same extent as though made on and as of
that date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case such representations
and warranties shall have been true and correct in all material respects
on and as of such earlier date;
(ii) No event shall have occurred and be continuing or would result
from the consummation of the borrowing contemplated by such Notice of
Borrowing that would constitute a Default or Event of Default;
(iii) Each Loan Party shall have performed in all material respects
all agreements and satisfied all conditions which this Agreement and the
other Loan Documents provide shall be performed or satisfied by it on or
before that Funding Date;
(iv) No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain any Lender from
making the Loans to be made by it, on that Funding Date;
(v) The making of the Loans requested on such Funding Date shall not
violate any law including, without limitation, Regulation T, Regulation U
or Regulation X of the Board of Governors of the Federal Reserve System;
and
(vi) There shall not be pending or, to the knowledge of the Company,
threatened, any action, suit, proceeding, Environmental Claim,
governmental investigation or arbitration against or affecting the Parent,
the Company or any of the Company's Subsidiaries or any property of the
Parent, the Company or any of the Company's Subsidiaries that has not been
disclosed by the Company in writing and that is required to be so
disclosed pursuant to subsection 5.6, 5.13 or 6.1(x) prior to the making
of the last preceding Loans, and there shall have occurred no development
not so disclosed in any such action, suit, proceeding, Environmental
Claim, governmental investigation or arbitration so disclosed that, in
either event, in the opinion of the Administrative Agent or of the
Requisite Lenders, would be expected to have a Material Adverse
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Effect; and no injunction or other restraining order shall have been
issued and no hearing to cause an injunction or other restraining order to
be issued shall be pending or noticed with respect to any action, suit or
proceeding seeking to enjoin or otherwise prevent the consummation of, or
to recover any damages or obtain relief as a result of any of the
transactions contemplated by this Agreement, including the making of Loans
hereunder.
4.3 Conditions to Letters of Credit.
The issuance of any Letter of Credit hereunder (whether or not the
applicable Issuing Bank is obligated to issue such Letter of Credit) is subject
to the satisfaction on or prior to October 16, 1998 of the conditions set forth
in subsection 4.1 and the satisfaction of the following additional conditions
precedent:
A. On or before the date of issuance of such Letter of Credit, the Issuing
Bank and the Administrative Agent shall have received, in accordance with the
provisions of subsection 3.1B(i), an originally executed Notice of Issuance of
Letter of Credit, signed by the chief executive officer or the chief financial
officer or by any executive officer of the Company designated by any of the
above-described officers on behalf of the Company and the Company in a writing
delivered to the Administrative Agent, together with all other information
specified in subsection 3.1B(i) and such other documents or information as the
applicable Issuing Bank may reasonably require in connection with the issuance
of such Letter of Credit.
B. On the date of issuance of such Letter of Credit, all conditions
precedent described in subsection 4.2B shall be satisfied to the same extent as
if the issuance of such Letter of Credit were the making of a Loan and the date
of issuance of such Letter of Credit were a Funding Date.
SECTION 5.
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement and to make
the Loans, to induce the Issuing Bank to issue Letters of Credit and to induce
the other Lenders to purchase participations therein, each of the Parent and the
Company represents and warrants to each Lender and the Issuing Bank, on the date
of this Agreement, on the Closing Date, on each Funding Date, and on the date of
issuance of each Letter of Credit, that the following statements are true and
correct.
5.1 Organization, Powers, Qualification, Good Standing, Business and
Subsidiaries.
A. Organization and Powers. The Parent, the Company and each of the
Company's Subsidiaries which is a corporation are duly organized, validly
existing and in good standing under the laws of their respective states of
organization. Each Subsidiary of the Company which is a partnership or limited
liability company is a duly organized and validly existing limited partnership
or limited liability company under the laws of its jurisdiction of formation and
is in good standing in such jurisdiction. The Parent, the Company and each of
the Company's Subsidiaries has all requisite corporate, partnership or limited
liability company (as applicable) power and authority to own and operate their
respective properties and to carry on their respective business as now conducted
and as proposed to be conducted, and each Loan Party has all requisite
corporate, partnership or limited liability company (as applicable) power and
authority to enter into the Loan Documents, to carry out the transactions
contemplated thereby and, in the case of the Company, to issue and pay the
Notes.
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B. Qualification and Good Standing. The Parent, the Company and each of
the Company's Subsidiaries are qualified or authorized to do business and in
good standing in every jurisdiction where their respective assets are located
and wherever necessary to carry out their respective businesses and operations,
except in jurisdictions where the failure to be so qualified or in good standing
has not had and will not have a Material Adverse Effect.
C. Conduct of Business. The Parent, the Company and the Company's
Subsidiaries are engaged only in the businesses permitted to be engaged in
pursuant to subsections 7.12 and 7.15.
D. The Company and Subsidiaries. All of the Subsidiaries of the Company as
of the Closing Date (after giving effect to the Transactions) are identified in
Schedule 5.1 annexed hereto, as it may be supplemented from time to time in
accordance with the provisions of subsection 6.9. The Capital Stock or other
equity interests of the Company and each of the Subsidiaries identified in
Schedule 5.1 annexed hereto is duly authorized, validly issued, fully paid and
nonassessable and none of such Capital Stock (other than Capital Stock of ENR
prior to the ENR Merger) or other equity interests constitutes Margin Stock.
Schedule 5.1 annexed hereto correctly sets forth the ownership interest of the
Company in each of its Subsidiaries identified therein. Other than the Company,
the Parent has no direct Subsidiaries or Investments in any Person.
5.2 Authorization of Borrowing, etc.
A. Authorization of Borrowing. The execution, delivery and performance of
the Loan Documents and the issuance, delivery and payment of the Notes have been
duly authorized by all necessary corporate and/or partnership (as applicable)
action on the part of each of the Loan Parties party thereto.
B. No Conflict. After giving effect to the consummation of the
transactions contemplated hereby to occur on the Closing Date, the execution,
delivery and performance by each of the applicable Loan Parties of the Loan
Documents, the issuance, delivery and payment of the Notes and the consummation
of the transactions contemplated by the Loan Documents do not and will not (i)
violate any provision of any law or any governmental rule or regulation
applicable to the Parent, the Company or any of the Company's Subsidiaries, the
Organizational Certificate or any other Organizational Documents of the Parent,
the Company or any of the Company's Subsidiaries or any order, judgment or
decree of any court or other agency of government binding on the Parent, the
Company or any of the Company's Subsidiaries, (ii) conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a default
under any Contractual Obligation of the Parent, the Company or any of the
Company's Subsidiaries, (iii) result in or require the creation or imposition of
any Lien upon any of the properties or assets of the Parent, the Company or any
of the Company's Subsidiaries (other than any Liens created under any of the
Loan Documents in favor of the Collateral Agent), or (iv) require any approval
of stockholders, partners or members or any approval or consent of any Person
under any Contractual Obligation of the Parent, the Company or any of the
Company's Subsidiaries, except for such approvals or consents which will be
obtained on or before the Closing Date and have been disclosed in writing to the
Lenders.
C. Governmental Consents. The execution, delivery and performance by the
Loan Parties of the Loan Documents, the issuance, delivery and payment of the
Notes and the consummation of the transactions contemplated by the Loan
Documents do not and will not require any registration with, consent or approval
of, or notice to, or other action to, with or by, any federal, state or other
83
governmental authority or regulatory body except to the extent obtained on or
before the Closing Date.
D. Binding Obligation. Each of the Loan Documents has been duly executed
and delivered by each of the Loan Parties party thereto and is the legally valid
and binding obligation of each such Loan Party, enforceable against such Loan
Party in accordance with its respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors' rights generally or by equitable principles relating to
enforceability.
E. Collateral Documents. The security interests created in favor of the
Collateral Agent under the Collateral Documents will at all times from and after
the Closing Date constitute, as security for the obligations purported to be
secured thereby, a legal, valid and enforceable security interest in and
perfected First Priority Lien on all of the Collateral referred to therein in
favor of the Collateral Agent for the benefit of the Lenders. Each Loan Party
has good title to its respective Collateral. No consents, filings or recordings
are required in order to perfect (or maintain the perfection or priority of) the
security interests purported to be created by any of the Collateral Documents,
other than such as have been obtained and which remain in full force and effect
and other than the filing of Uniform Commercial Code Financing Statements
delivered to the Collateral Agent for filing but not yet filed, and the periodic
filing of Uniform Commercial Code continuation statements in respect of Uniform
Commercial Code financing statements filed by or on behalf of the Collateral
Agent.
F. Absence of Third-Party Filings. Except such as may have been filed in
favor of the Collateral Agent as contemplated by subsection 5.2E and except as
set forth on Schedule 7.2A annexed hereto, (i) no effective UCC financing
statement, fixture filing or other instrument similar in effect covering all or
any part of the Collateral is on file in any filing or recording office and (ii)
no effective filing covering all or any part of the IP Collateral is on file
with the PTO or any other Governmental Authority.
G. Margin Regulations. Immediately after giving effect to the ENR Merger,
the Capital Stock of ENR shall not be Margin Stock. Neither the making of the
Loans nor the pledge of the Collateral (including, with limitation, the Capital
Stock of ENR) pursuant to the Collateral Documents violates Regulation T,
Regulation U or Regulation X of the Board of Governors of the Federal Reserve
System.
5.3 Financial Condition; Projections.
A. Financial Statements. The Company has heretofore delivered to the
Lenders, at the Lenders' request, the following financial statements and
information:
(i) with respect to the Company, (a) pro forma quarterly
consolidated balance sheets of the Company and its Subsidiaries as at June
30, 1998, together with a related pro forma consolidated statements of
income for the Fiscal Quarter then ended, reflecting the consummation of
the Transactions, and (b) pro forma annual Statements of income of the
Company and its Subsidiaries for Fiscal Year 1997, reflecting the
consummation of the Transactions;
(ii) with respect to ESP, (a) unaudited consolidated balance sheets
of ESP and its Subsidiaries as at June 30, 1998 and March 31, 1998,
together with the related consolidated statements of income and cash flows
for such period, and (b) audited financial statements of ESP and its
Subsidiaries for Fiscal Years 1995, 1996 and 1997, consisting of
consolidated balance sheets and the related consolidated statements of
income for such Fiscal Years, together with the
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reports on such consolidated financial statements of the applicable
certified public accountants setting forth in each case in comparative
form the corresponding figures for the previous Fiscal Year; and
(iii) with respect to ENR, (a) unaudited consolidated balance sheets
of ENR and its Subsidiaries as at December 31, 1997, June 30, 1998 and
March 31, 1998, in each case, for the fiscal quarter then ended, together
with the related consolidated and consolidating statements of income and
cash flows for such period, and (b) audited financial statements of ENR
and its Subsidiaries for each of its fiscal years ended September 30,
1995, 1996 and 1997, consisting of consolidated balance sheets and the
related consolidated statements of income, operations, stockholder's
equity and cash flows for such fiscal year, together with the report on
such consolidated financial statements of the applicable certified public
accountants setting forth in each case in comparative form the
corresponding figures for the previous fiscal year;
together will all supporting documentation for any of the foregoing reasonably
requested by the Administrative Agent. All such statements were prepared in
conformity with GAAP and fairly present, in all material respects, the financial
position (on a consolidated basis) of the entities described in such financial
statements as at the respective dates thereof and the results of operations and
cash flows (on a consolidated basis) of the entities described therein for each
of the periods then ended, subject, in the case of any such unaudited financial
statements, to changes resulting from audit and normal year-end adjustments and
the absence of footnote disclosure required in accordance with GAAP. Neither the
Company nor any of its Subsidiaries has any Contingent Obligation, contingent
liability or liability for taxes, long-term lease or unusual forward or
long-term commitment that is not reflected in the financial statements referred
to in the preceding clauses of this subsection, the most recent financial
statements delivered pursuant to subsection 6.1 or the notes thereto and which
in any such case is material in relation to the business, operations,
properties, assets, condition (financial or otherwise) or prospects of the
Company and its Subsidiaries taken as a whole or (but only in the case of any
making or deemed making of this representation and warranty at any time on or
prior to the Closing Date) ENR and its Subsidiaries taken as a whole.
B. Projections. On and as of the Closing Date, the projections of the
Company and its Subsidiaries for the period from January 1, 1998 through
December 31, 2006 previously delivered to the Lenders (the "Projections") are
based on good faith estimates and assumptions made by the management of the
Company, it being recognized, however, that projections as to future events are
not to be viewed as facts and that the actual results during the period or
periods covered by the Projections may differ from the projected results and
that the differences may be material. Notwithstanding the foregoing, as of the
Closing Date, management of the Company believed that the Projections were
reasonable and attainable.
5.4 No Material Adverse Change; No Restricted Payments.
Since December 31, 1997, no event or change has occurred that has caused
or evidences or could reasonably be expected to cause, either individually or in
the aggregate, a Material Adverse Effect. Since December 31, 1997, neither the
Company nor any of its Subsidiaries has directly or indirectly declared,
ordered, paid or made, or set apart any sum or property for, any Restricted
Payment or agreed to do so except as permitted by subsection 7.5 and except for
the Transactions.
5.5 Title to Properties; Liens; Real Property; Intellectual Property.
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A. Title to Properties; Liens. After giving effect to the transactions
contemplated hereby and by the other Transaction Documents to occur on the
Closing Date, the Company and its Subsidiaries have good and marketable fee
simple to or a valid leasehold interest in all of their respective properties
and assets reflected in the financial statements referred to in subsection 5.3
or in the most recent financial statements delivered pursuant to subsection 6.1,
except for assets disposed of since the date of such financial statements in the
ordinary course of business or as otherwise permitted under subsection 7.7 and
except for such defects that neither individually nor in the aggregate could
reasonably be expected to have a Material Adverse Effect. Except as permitted by
this Agreement, all such properties and assets are free and clear of Liens.
B. Real Property. As of the Closing Date, Schedule 5.5B annexed hereto
contains a true, accurate and complete list of (i) all fee interests of any Loan
Party in real property and the Loan Party which owns such fee interest and (ii)
all Leasehold Properties of any Loan Party. Except as specified in Schedule 5.5B
annexed hereto, each lease or sublease, as applicable, for each such Leasehold
Property is in full force and effect and the Company does not have knowledge of
any material default by any party thereto that has occurred and is continuing
thereunder, and each such agreement constitutes the legally valid and binding
obligation of each applicable Loan Party, enforceable against such Loan Party in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or limiting
creditors' rights generally or by equitable principles.
C. Intellectual Property. The Company and its Subsidiaries own or have the
valid right to use all trademarks and service marks, tradenames, patents,
copyrights, trade secrets and technology used in or necessary to conduct the
Company's and its Subsidiaries' business (collectively, the "Intellectual
Property"), free and clear of any and all Liens other than Permitted
Encumbrances. All registrations therefor are in full force and effect and are
valid and enforceable. The conduct of the Company's and its Subsidiaries'
business as currently conducted, including, but not limited to, all products,
processes or services, made, offered or sold by the Company and its
Subsidiaries, does not infringe upon, violate, misappropriate or dilute any
intellectual property of any third party which infringement, violation,
misappropriation or dilution could reasonably be expected to have a Material
Adverse Effect. To the best of the Company's and its Subsidiaries' knowledge, no
third party is infringing upon the Intellectual Property in any material
respect. Except as set forth in Schedule 5.5C, there is no pending or to the
best of the Company's and its Subsidiaries' knowledge, threatened claim or
litigation contesting the Company's right to own or use any material
Intellectual Property or the validity or enforceability thereof.
5.6 Litigation; Adverse Facts.
There is no action, suit, proceeding, arbitration or governmental
investigation (whether or not purportedly on behalf of the Company or any of its
Subsidiaries) at law or in equity or before or by any federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, pending or, to the knowledge of the
Company (after due inquiry), threatened against or affecting the Parent, the
Company or any of the Company's Subsidiaries or any property of the Parent, the
Company or any of the Company's Subsidiaries that, either individually or in the
aggregate together with all other such actions, proceedings and investigations,
has had, or could reasonably be expected to result in, a Material Adverse
Effect. Neither the Parent, the Company nor any of the Company's Subsidiaries is
(i) in violation of any applicable law that has had, or could reasonably be
expected to result in, a Material Adverse Effect or (ii) subject to or in
default with respect to any final judgment, writ, injunction, decree, rule or
regulation of any court or any federal, state, municipal or other
86
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, that has had, or could reasonably be expected to result in,
a Material Adverse Effect.
5.7 Payment of Taxes.
Except to the extent permitted by subsection 6.3, all material tax returns
and reports of the Parent, the Company and the Company's Subsidiaries required
to be filed by any of them have been timely filed and are true, correct and
complete in all material respects, and all material taxes, assessments, fees and
other governmental charges upon the Parent, the Company and the Company's
Subsidiaries and upon their respective properties, assets, income, businesses
and franchises which are due and payable have been paid when due and payable.
Neither the Parent, the Company nor any of the Company's Subsidiaries knows of
any proposed tax assessment against the Parent, the Company or any of the
Company's Subsidiaries other than those which are being actively contested by
the Parent, the Company or such Subsidiary in good faith and by appropriate
proceedings and for which reserves or other appropriate provisions, if any, as
may be required in conformity with GAAP shall have been made or provided
therefor.
5.8 Performance of Agreements; Materially Adverse Agreements.
A. Neither the Parent, the Company nor any of its Subsidiaries is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any of its Contractual Obligations, and no
condition exists that, with the giving of notice or the lapse of time or both,
would constitute such a default, except, in each case, individually or in the
aggregate, where the consequences, direct or indirect, of such default or
defaults, if any, would not have a Material Adverse Effect. Each State Contract
in effect as of the Closing Date after giving effect to the Transactions is
listed on Schedule 5.8 annexed hereto.
B. Neither the Parent, the Company nor any of its Subsidiaries is a party
to or is otherwise subject to any agreement or instrument or any charter or
other internal restriction which has had, or could reasonably be expected (based
upon assumptions that are reasonable at the time made) to result in,
individually or in the aggregate, a Material Adverse Effect.
5.9 Governmental Regulation.
Neither the Parent, the Company nor any of its Subsidiaries is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act or the Investment Company Act of 1940 or
under any other federal or state statute or regulation which may limit its
ability to incur Indebtedness or which may otherwise render all or any portion
of the Obligations unenforceable.
5.10 Securities Activities.
Neither the Parent, the Company nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock.
5.11 Employee Benefit Plans.
A. Schedule 5.11 annexed hereto sets forth a list of each Pension Plan,
Multiemployer Plan,
87
and each "welfare plan" (as defined in Section 3(1) of ERISA) which provides
post-retirement benefits other than benefits as required under Part 6 of Title I
of ERISA. The Company and each of its ERISA Affiliates are in compliance with
all applicable provisions and requirements of ERISA with respect to each
Employee Benefit Plan, and have performed all their obligations under each
Employee Benefit Plan, except to the extent that any non-compliance with ERISA
or any such failure to perform would not have a Material Adverse Effect on the
Company or any of its ERISA Affiliates. No material liability to the PBGC (other
than required premium payments), the Internal Revenue Service, any Plan or any
trust established under Title IV of ERISA has been, or is expected by the
Company or any of its ERISA Affiliates to be, incurred by the Company or any of
its ERISA Affiliates.
B. No ERISA Event has occurred which has resulted or is reasonably likely
to result in any material liability of the Company or any of its ERISA
Affiliates to the PBGC or to any other Person.
C. Except to the extent required under Section 4980B of the Internal
Revenue Code and/or Section 601 of ERISA, neither the Company nor any of its
Subsidiaries maintains or contributes to any employee welfare benefit plan (as
defined in Section 3(1) of ERISA) that provides health or welfare benefits
(through the purchase of insurance or otherwise) for any retired or former
employees of the Company or any of its Subsidiaries other than as set forth on
Schedule 5.11 annexed hereto.
D. No Pension Plan has an Unfunded Current Liability in an amount that
would have a Material Adverse Effect.
E. The Borrower and each or its ERISA Affiliates have complied with the
requirements of Section 515 of ERISA with respect to each Multiemployer Plan and
is not in "default" (as defined in Section 4219(c)(5) of ERISA) with respect to
payments to a Multiemployer Plan, except to the extent that such non-compliance
therewith or default would not, either individually or in the aggregate, have a
Material Adverse Effect. As of the most recent valuation date for each
Multiemployer Plan for which the actuarial report is available, the potential
liability of the Company, its Subsidiaries and their respective ERISA Affiliates
for a complete withdrawal from such Multiemployer Plan (within the meaning of
Section 4203 of ERISA), when aggregated with such potential liability for a
complete withdrawal from all Multiemployer Plans, based on information available
pursuant to Section 4221(e) of ERISA, could not reasonably be expected to have a
Material Adverse Effect.
5.12 Certain Fees.
No broker's or finder's fee or commission will be payable with respect to
this Agreement or any of the loan transactions contemplated hereby, and the
Company hereby indemnifies the Lenders against, and agrees that it will hold the
Lenders harmless from, any claim, demand or liability for any such broker's or
finder's fees alleged to have been incurred in connection herewith or therewith
and any expenses (including reasonable fees, expenses and disbursements of
counsel) arising in connection with any such claim, demand or liability.
5.13 Environmental Matters.
(i) The Company, each of its Subsidiaries (including without
limitation, all operations and conditions at or in the Facilities
presently owned and operated by the Company or its Subsidiaries), and, to
the knowledge of the Company (after due inquiry), each of the tenants
under any leases or occupancy agreements affecting any portion of any
Facilities presently owned
88
or operated by the Company or its Subsidiaries, are in compliance with all
applicable Environmental Laws (which compliance includes, but is not
limited to, the possession by the Company, each of its Subsidiaries and
each of such tenants of all permits and other Governmental Authorizations
required under applicable Environmental Laws, and compliance with the
terms and conditions thereof), except where failure to be in compliance
would not have a Material Adverse Effect. Neither the Company nor any of
its Subsidiaries, nor, to the knowledge of the Company (after due
inquiry), any tenants under any leases or occupancy agreements affecting
any portion of the Facilities presently owned or operated by the Company
or its Subsidiaries has received any communication (written or oral),
whether from a Governmental Authority, citizens group, employee or
otherwise, alleging that the Company, any of its Subsidiaries, or any such
tenant is not in such compliance, and there are no past or present (or to
the best knowledge of the Company, future) actions, activities,
circumstances conditions, events or incidents that may prevent or
interfere with such compliance in the future.
(ii) There is no Environmental Claim pending or threatened against
the Company or any of its Subsidiaries or, to the best knowledge of the
Company, against any Person whose liability for any Environmental Claim
the Company or any of its Subsidiaries has or may have retained or assumed
either contractually or by operation of law, in each such case which,
individually or in the aggregate, would have a Material Adverse Effect.
(iii) There are no past or present (or to the best knowledge of the
Company, future) actions, activities, circumstances, conditions, events or
incidents, including, without limitation, the Release or presence of any
Hazardous Material, which could reasonably be expected to form the basis
of any Environmental Claim against the Company or any of its Subsidiaries,
or to the best knowledge of the Company, against any Person whose
liability for any Environmental Claim the Company or any of its
Subsidiaries has or may have retained or assumed either contractually or
by operation of law, in each such case which would have a Material Adverse
Effect.
(iv) The Company and its Subsidiaries have not, and to the best
knowledge of the Company, no other Person has placed, stored, deposited,
discharged, buried, dumped or disposed of Hazardous Materials or any other
wastes produced by, or resulting from, any business, commercial or
industrial activities, operations or processes, on, beneath or adjacent to
any property currently or formerly owned, operated or leased by the
Company or any of its Subsidiaries, except for inventories of such
substances to be used, and wastes generated therefrom, in the ordinary
course of business of the Company and its Subsidiaries (which inventories
and wastes, if any, were and are stored or disposed of in accordance with
applicable Environmental Laws and in a manner such that there has been no
Release of any such substances), in each case, which, individually or in
the aggregate, would have a Material Adverse Effect.
(v) No Lien in favor of any Person relating to or in connection with
any Environmental Claim has been filed or has been attached to any
Facility.
(vi) Without in any way limiting the generality of the foregoing,
except as would not have a Material Adverse Effect, none of the Facilities
contain any: underground storage tanks; asbestos; polychlorinated
biphenyls ("PCBs"); underground injection ▇▇▇▇▇; radioactive materials; or
septic tanks or waste disposal pits in which process wastewater or any
Hazardous Materials have been discharged or disposed.
89
5.14 Employee Matters.
There is no strike or work stoppage in existence or threatened involving
the Company or any of its Subsidiaries that could reasonably be expected to have
a Material Adverse Effect.
5.15 Solvency.
Each Loan Party is, and the Parent, the Company and its Subsidiaries,
taken as a whole, are, and, upon the incurrence of any Obligations by any Loan
Party (including, without limitation, the making of the Loans, the delivery of
the Guaranties and the Liens created by the Collateral Documents) on any date on
which this representation is made, and after giving effect to the Transactions
and the incurrence of Indebtedness in connection therewith, will be, Solvent.
5.16 Transaction Documents
A. Delivery of Transaction Documents. The Parent and the Company have
delivered to the Agents complete and correct copies of each Transaction Document
and of all exhibits and schedules thereto.
B. Representations and Warranties. Except to the extent otherwise set
forth herein or in the schedules hereto, (i) each of the representations and
warranties of any Loan Party made in any other Transaction Document and (ii) to
the best of the Company's knowledge, each of the representations and warranties
of any party other than a Loan Party, an Agent or a Lender made in any
Transaction Document, in each case, except to the extent set forth in the
schedules to such Transaction Documents, was true and correct in all material
respects as of the Closing Date (or as of any earlier date to which such
representation and warranty specifically relates).
C. Governmental Authorizations. All Governmental Authorizations and all
other authorizations, approvals and consents of any other Person required by the
Transaction Documents or to consummate the Transactions have been obtained and
are in full force and effect.
D. Conditions and Consummation. On the Closing Date, (i) all of the
conditions to effecting or consummating the Transactions set forth in the
Transaction Documents have been duly satisfied or, with the consent of the
Requisite Lenders, waived, and (ii) each of the Transactions have been
consummated in accordance with the Transaction Documents and all applicable
laws.
5.17 Disclosure.
The representations and warranties of the Parent, the Company and its
Subsidiaries contained in the Loan Documents and the information contained in
the other documents, certificates and written statements furnished to any of the
Agents or the Lenders (including, without limitation, the Information
Memorandum) by or on behalf of the Parent, the Company or any of its
Subsidiaries for use in connection with the transactions contemplated by this
Agreement or any other Loan Document, when taken together, do not contain any
untrue statement of a material fact or omit to state a material fact (known to
the Company or the applicable Subsidiary, in the case of any document not
furnished by it) necessary in order to make the statements contained herein or
therein not misleading in light of the circumstances in which the same were
made. Any projections and pro forma financial information contained in such
materials are based upon good faith estimates and assumptions believed by the
Company to be reasonable at the time
90
made, it being recognized by the Agents and the Lenders that such projections as
to future events are not to be viewed as facts and that actual results during
the period or periods covered by any such projections may differ from the
projected results and that the differences may be material. There is no fact
known to the Company (other than matters of a general economic nature) that has
had, or could reasonably be expected to result in, a Material Adverse Effect and
that has not been disclosed herein or in such other documents, certificates and
statements furnished to the Lenders for use in connection with the transactions
contemplated hereby.
5.18 Subordination of Subordinated Indebtedness.
The subordination provisions of any Subordinated Indebtedness are
enforceable against the holders thereof, and the Loans and other monetary
Obligations hereunder are and will be within the definition of "Senior
Indebtedness" or "Senior Debt", as the case may be, included in such provisions.
5.19 Year 2000 Problems.
The Company and its Subsidiaries have (i) engaged in a process of
assessment of the existence of the Year 2000 Problems reasonably appropriate to
the scope and complexity of their respective Systems; (ii) adopted and are
successfully implementing a plan of correction ("Plan of Correction") which, the
Company reasonably believes will result in a substantial elimination of Year
2000 Problems (and, in any event, all Year 2000 Problems which could reasonably
be expected to have a Material Adverse Effect) which might have a Material
Adverse Effect and, in the case of all Systems (as defined in the definition of
Year 2000 Problems) critical to the business or operations of the Company and
its Subsidiaries, elimination in all material respects of Year 2000 Problems
prior to any processing failure of a System or Systems due to Year 2000 Problems
which might have a Material Adverse Effect; (iii) adopted and are successfully
implementing validation procedures calculated to test on an ongoing basis the
sufficiency of the Plan of Correction, its implementation, and the correction of
Year 2000 Problems in substantially all Systems and all Systems critical to the
business or operations of the Company and its Subsidiaries; (iv) adopted and are
successfully implementing policies and procedures requiring regular reports to,
and monitoring by, senior management of the Company concerning the foregoing
matters; and (v) provided the Administrative Agent true and correct copies of
the written Plan of Correction, and related implementation budgets, reviewed and
approved by each applicable Subsidiary's Board of Directors.
The Company reasonably believes that, as relating to each of the Company
Group taken as a whole, the ESP Group taken as a whole and the ENR Group taken
as a whole, (x) the assessment and correction of Year 2000 Problems, including,
without limitation, the Plan of Correction, and the testing of all Systems and
the correction of Year 2000 Problems, in each case, which, individually or in
the aggregate, if not corrected could reasonably be expected to have a Material
Adverse Effect, will be completed on or prior to June 30, 1999, (y) a Material
Adverse Effect will not occur as a result of any Year 2000 Problem, and (z) the
aggregate costs and expenses incurred and reasonably expected to be incurred in
connection with the assessment and correction of Year 2000 Problems, including,
without limitation, the Plan of Correction, and the testing and monitoring of
all Systems and the correction of Year 2000 Problems, could not reasonably be
expected to have a Material Adverse Effect.
5.20 Tax Classification.
Each of Newmall and ▇▇▇▇▇▇▇ UK has made a timely and effective election to
be as of the Closing Date, and at all times from and after the Closing Date,
will be, disregarded as an entity separate
91
from its owner within the meaning of Treasury Regulation Section 1.7701-3(b)
under the Internal Revenue Code and each similar state or local tax law.
5.21 Parent.
On the Closing Date, after giving effect to the Transactions, the Parent
(i) has not incurred, directly or indirectly, any Indebtedness or any other
obligation or liability whatsoever (whether absolute, contingent or otherwise)
other than its obligations under the Transaction Documents to which it is a
party, (ii) is the owner of all of the outstanding Capital Stock of the Company
and has not created or suffered to exist any Lien upon any property or assets
owned by it, including, without limitation, the Capital Stock of the Company,
other than the Liens created under the Collateral Documents to which it is a
party, (iii) is not engaged in any business or activity and does not own any
assets or property other than holding the Capital Stock of the Company and
performing its obligations under the Transaction Documents to which it is a
party and (iv) is not a party to, or bound by, any document, instrument or
agreement other than the Loan Documents and Transaction Documents to which it is
a party.
SECTION 6.
AFFIRMATIVE COVENANTS
The Parent and the Company covenant and agree that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all of
the Loans and other Obligations and the cancellation or expiration of all
Letters of Credit, unless the Requisite Lenders shall otherwise give prior
written consent, the Parent and the Company shall perform, and shall cause each
of its Subsidiaries to perform, all covenants in this Section 6.
6.1 Financial Statements and Other Reports.
The Company will maintain, and cause each of its Subsidiaries to maintain,
a system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in conformity
with GAAP. The Company will deliver to the Administrative Agent:
(i) Monthly Financials: as soon as available and in any event within
thirty (30) days after each calendar month-end commencing with the
calendar month ending October 31, 1998, or in the case of the third month
of any fiscal quarter, within forty-five (45) days after the end of such
month, (a) the respective consolidated balance sheets as at the end of
each fiscal month of the Company Group, the Company Group excluding
Excluded Foreign Subsidiaries, the ENR Group and the ESP Group, in each
case, together with the related consolidated statements of income, and
consolidated statement of cash flows of each such Group for such month and
for the period from the beginning of the then current Fiscal Year to the
end of such month, setting forth, in the case of statements of income
only, in comparative form the corresponding figures for the corresponding
periods of the previous fiscal year and the corresponding figures from the
consolidated plan and financial forecast for the current Fiscal Year
delivered pursuant to subsection 6.1(xiii), all prepared in accordance
with the GAAP and in reasonable detail and certified by the chief
financial officer of the Company that they fairly present, in all material
respects, the financial condition of each such Group as at the dates
indicated and the results of their operations and their cash flows for the
periods indicated, subject to changes resulting from audit and normal
year-end adjustments; (b) the consolidating work sheets of each of the
Company Group, the Company Group excluding
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Excluded Foreign Subsidiaries, the ESP Group (as an integrated unit) and
the ENR Group (as an integrated unit) as the end of each fiscal month for
the period from the beginning of the then current Fiscal Year to the end
of such month, all prepared in accordance with the GAAP and in reasonable
detail and certified by the chief financial officer of the Company that
they fairly present, in all material respects, the financial condition of
the Company Group, the Company Group excluding Excluded Foreign
Subsidiaries, the ESP Group (as an integrated unit) and the ENR Group (as
an integrated unit) as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, subject to
changes resulting from audit and normal year-end adjustments; and (c) a
narrative report describing the operations of each of the Company Group,
the Company Group excluding Excluded Foreign Subsidiaries, the ESP Group
and the ENR Group taken as a whole, in the form prepared for presentation
to senior management for such month and for the period from the beginning
of the then current Fiscal Year to the end of such month;
(ii) Quarterly Financials: as soon as available and in any event
within forty-five (45) days after the end of each Fiscal Quarter
commencing with the Fiscal Quarter ending September 30, 1998, (a) the
respective consolidated balance sheets of the Company Group, the Company
Group excluding Excluded Foreign Subsidiaries, the ESP Group and the ENR
Group as at the end of such Fiscal Quarter and the related consolidated
statements of income and consolidated statement of cash flows each such
Group for such Fiscal Quarter and for the period from the beginning of the
then current Fiscal Year to the end of such Fiscal Quarter, setting forth,
in the case of statements of income only, in comparative form the
corresponding figures for the corresponding periods of the previous fiscal
year and the corresponding figures from the consolidated plan and
financial forecast for the current Fiscal Year delivered pursuant to
subsection 6.1(xiii), all prepared in accordance with the GAAP and in
reasonable detail and certified by the chief financial officer of the
Company that they fairly present, in all material respects, the financial
condition of each such Group as at the dates indicated and the results of
their operations and their cash flows for the periods indicated, subject
to changes resulting from audit and normal year-end adjustments; (b) the
consolidating work sheets of the Company Group, the Company Group
excluding Excluded Foreign Subsidiaries, the ESP Group (as an integrated
unit) and the ENR Group (as an integrated unit) as the end of such Fiscal
Quarter for the period from the beginning of the then current Fiscal Year
to the end of such Fiscal Quarter, all prepared in accordance with the
GAAP and in reasonable detail and certified by the chief financial officer
of the Company that they fairly present, in all material respects, the
financial condition of the Company Group, the Company Group excluding
Excluded Foreign Subsidiaries, the ESP Group (as an integrated unit) and
the ENR Group (as an integrated unit) as at the dates indicated and the
results of their operations and their cash flows for the periods
indicated, subject to changes resulting from audit and normal year-end
adjustments; and (c) a narrative report describing the operations of the
Company Group, the Company Group excluding Excluded Foreign Subsidiaries,
the ESP Group and the ENR Group, in each case, taken as a whole, in the
form prepared for presentation to senior management for such Fiscal
Quarter and for the period from the beginning of the then current Fiscal
Year to the end of such Fiscal Quarter;
(iii) Year-End Financials: as soon as available and in any event
within ninety (90) days after the end of each Fiscal Year, (a) the
respective consolidated balance sheets of the Company Group, the Company
Group excluding Excluded Foreign Subsidiaries, the ESP Group and the ENR
Group as at the end of such Fiscal Year and the related consolidated
statements of income and consolidated statement of cash flows of each such
Group for such Fiscal Year, setting forth, in the case of statements of
income only, in comparative form the corresponding figures for
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the previous fiscal year and the corresponding figures from the
consolidated plan and financial forecast delivered pursuant to subsection
6.1(xiii) for the Fiscal Year covered by such financial statements, all
prepared in accordance with the GAAP and in reasonable detail and
certified by the chief financial officer of the Company that they fairly
present, in all material respects, the financial condition of each such
Group as at the dates indicated and the results of their operations and
their cash flows for the periods indicated; (b) the consolidating work
sheets of the Company Group, the Company Group excluding Excluded Foreign
Subsidiaries, the ESP Group (as an integrated unit) and the ENR Group (as
an integrated unit) at the end of such Fiscal Year for such Fiscal Year,
all prepared in accordance with the GAAP and in reasonable detail and
certified by the chief financial officer of the Company that they fairly
present, in all material respects, the financial condition of the Company
Group, the Company Group excluding Excluded Foreign Subsidiaries, the ESP
Group (as an integrated unit) and the ENR Group (as an integrated unit) as
at the dates indicated and the results of their operations and their cash
flows for the periods indicated; (c) a narrative report describing the
operations of the Company Group, the Company Group excluding Excluded
Foreign Subsidiaries, the ESP Group and the ENR Group, in each case, taken
as a whole, in the form prepared for presentation to senior management for
such Fiscal Year; and (d) in the case of such consolidated financial
statements of the Company Group, a report thereon of independent certified
public accountants of recognized national standing selected by the Company
and reasonably satisfactory to the Administrative Agent, which report
shall be unqualified as to going concern and scope of audit, and shall
state that such consolidated financial statements fairly present, in all
material respects, the consolidated financial position of the Company and
its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated in conformity
with GAAP applied on a basis consistent with prior years (except as
otherwise disclosed in such financial statements) and that the audit by
such accountants in connection with such consolidated financial statements
has been made in accordance with generally accepted auditing standards;
(iv) Officer's and Compliance Certificates: together with each
delivery of financial statements of the Company and its Subsidiaries
pursuant to subdivisions (ii) and (iii) above, (a) an Officer's
Certificate of the Company stating that the signer has reviewed the terms
of this Agreement and has made, or caused to be made under his or her
supervision, a review in reasonable detail of the transactions and
condition of the Company and its Subsidiaries during the accounting period
covered by such financial statements and that such review has not
disclosed the existence during or at the end of such accounting period,
and that the signer did not have knowledge of the existence as at the date
of such Officer's Certificate, of any condition or event that constitutes
an Default or Event of Default, or, if any such condition or event existed
or exists, specifying the nature and period of existence thereof and what
action the Company has taken, is taking and proposes to take with respect
thereto; and (b) a Compliance Certificate demonstrating in reasonable
detail compliance during and at the end of the applicable accounting
periods with the restrictions contained in Section 7;
(v) Reconciliation Statements: if, as a result of any change in
accounting principles and policies from those used in the preparation of
the audited financial statements referred to in subsection 5.3, the
consolidated financial statements of any Group delivered pursuant to
subdivisions (i), (ii), (iii) or (xiii) of this subsection 6.1 will differ
in any material respect from the consolidated financial statements that
would have been delivered pursuant to such subdivisions had no such change
in accounting principles and policies been made, then (a) together with
the first delivery of financial statements pursuant to subdivision (i),
(ii), (iii) or (xiii) of this subsection 6.1 following such change,
consolidated financial statements of each affected Group for (y) the
current
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Fiscal Year to the effective date of such change and (z) the two (2) full
fiscal years immediately preceding the Fiscal Year in which such change is
made, in each case prepared on a pro forma basis as if such change had
been in effect during such periods, and (b) together with each delivery of
financial statements pursuant to subdivision (i), (ii), (iii) or (xiii) of
this subsection 6.1 following such change, a written statement of the
chief accounting officer or chief financial officer of the Company setting
forth the differences which would have resulted if such financial
statements had been prepared without giving effect to such change, if
reasonably requested by the Administrative Agent;
(vi) Accountants' Certification: together with each delivery of
consolidated financial statements of the Company and its Subsidiaries
pursuant to subdivision (iii) above, a written statement by the
independent certified public accountants giving the report thereon (a)
stating that their audit has included a reading of the terms of this
Agreement and the other Loan Documents as they relate to the covenants set
forth in subsection 7.6 and accounting matters, and (b) stating whether,
in connection with their audit examination, any condition or event,
insofar as such condition or event relates to the covenants set forth in
subsection 7.6 or accounting matters, that constitutes an Default or Event
of Default has come to their attention and, if such a condition or event
has come to their attention, specifying the nature and period of existence
thereof; provided that such accountants shall not be liable by reason of
any failure to obtain knowledge of any such Default or Event of Default
that would not be disclosed in the course of their audit examination;
(vii) Accountants' Reports: promptly upon receipt thereof (unless
restricted by applicable professional standards), copies of all reports
submitted to the Company by a national independent certified public
accountants in connection with each annual, interim or special audit of
the financial statements of the Company and its Subsidiaries made by such
accountants, including, without limitation, any comment letter submitted
by such accountants to management in connection with their annual audit;
(viii) SEC Filings and Press Releases: promptly upon their becoming
available, copies of (a) all financial statements, reports, notices and
proxy statements sent or made available generally by the Company to its
security holders, (b) all regular and periodic reports and all
registration statements (other than on Form S-8 or a similar form) and
prospectuses, if any, filed by the Company or any of its Subsidiaries with
any securities exchange or with the Securities and Exchange Commission or
any governmental or private regulatory authority, and (c) all press
releases and other statements made available generally by the Company or
any of its Subsidiaries to the public concerning material developments in
the business of the Company or any of its Subsidiaries;
(ix) Events of Default, etc.: promptly upon any officer of the
Company obtaining knowledge (a) of any condition or event that constitutes
a Default or an Event of Default, or becoming aware that any Lender has
given any notice (other than to the Administrative Agent) or taken any
other action with respect to a claimed Default or Event of Default, (b)
that any Person has given any notice to the Company or any of its
Subsidiaries or taken any other action with respect to a claimed default
or event or condition of the type referred to in subsection 8.2, (c) of
any condition or event that would be required to be disclosed in a current
report filed by the Company with the Securities and Exchange Commission on
Form 8-K (Items 1, 2, 4, 5 and 6 of such Form as in effect on the date
hereof) if the Company were required to file such reports under the
Exchange Act, or (d) of the occurrence of any event or change that has
caused or evidences or could be reasonably expected to cause, either in
any case or in the aggregate, a Material Adverse
95
Effect, an Officer's Certificate specifying the nature and period of
existence of such condition, event or change, or specifying the notice
given or action taken by any such Person and the nature of such claimed
Default, Event of Default, default, event or condition, and what action
the Company (or applicable Subsidiary) has taken, is taking and proposes
to take with respect thereto;
(x) Litigation or Other Proceedings: (a) promptly upon any officer
of the Company obtaining knowledge of (X) the institution of, or threat
of, any action, suit, proceeding (whether administrative, judicial or
otherwise), Environmental Claim, governmental investigation or arbitration
against or affecting the Company or any of its Subsidiaries or any
property of the Company or any of its Subsidiaries (collectively,
"Proceedings") not previously disclosed in writing by the Company to the
Lenders or (Y) any material development in any Proceeding that, in any
case:
(a) could reasonably be expected to have a Material Adverse
Effect; or
(b) seeks to enjoin or otherwise prevent the consummation of,
or to recover any damages or obtain relief as a result of, the
transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to the Company to enable the Lenders and their
counsel to evaluate such matters; and (b) within forty-five (45) days
after the end of each fiscal quarter of the Company, a schedule of all
Proceedings involving an alleged liability of, or claims against or
affecting, the Company or any of its Subsidiaries equal to or greater than
$2,500,000 and promptly after request by the Administrative Agent such
other information as may be reasonably requested by the Administrative
Agent to enable the Administrative Agent and its counsel to evaluate any
of such Proceedings;
(xi) ERISA Events: promptly upon the Company becoming aware of the
occurrence of any ERISA Event that would result in a material liability of
the Company or any of its ERISA Affiliates, a written notice specifying
the nature thereof, what action the Company or any of its ERISA Affiliates
has taken, is taking or proposes to take with respect thereto and, when
known, any action taken or threatened by the Internal Revenue Service, the
Department of Labor or the PBGC with respect thereto;
(xii) ERISA Notices: with reasonable promptness, copies of (a) all
written notices received by the Company or any of its ERISA Affiliates
from a Multiemployer Plan sponsor concerning an ERISA Event; and (b) such
other documents or governmental reports or filings relating to any
Employee Benefit Plan as the Administrative Agent shall reasonably
request;
(xiii) Financial Plans: as soon as practicable and in any event no
later than the beginning of each Fiscal Year, a monthly consolidated and
consolidating plan and financial forecast for the next succeeding Fiscal
Year, including without limitation (a) forecasted consolidated balance
sheet and forecasted consolidated and consolidating statements of income
and consolidated statement of cash flows of the Company and its
Subsidiaries for such Fiscal Year, together with a pro forma Compliance
Certificate for such Fiscal Year and an explanation of the assumptions on
which such forecasts are based, and (b) such other information and
projections as the Administrative Agent may reasonably request, it being
understood that, for purposes of the foregoing consolidating plans and
forecasts, the Subsidiaries of the Company shall be deemed to be the ENR
Group exclusive of Excluded Foreign Subsidiaries (taken as one entity),
the ESP
96
Group exclusive of Excluded Foreign Subsidiaries (taken as one entity) and
the Exclusive Foreign Subsidiaries (taken as one entity);
(xiv) Insurance: as soon as practicable and in any event by the last
day of each Fiscal Year, a report in form and substance satisfactory to
the Administrative Agent outlining all material insurance coverage
maintained as of the date of such report by the Company and its
Subsidiaries and all material insurance coverage planned to be maintained
by the Company and its Subsidiaries in the immediately succeeding Fiscal
Year;
(xv) Environmental Audits and Reports: as soon as practicable
following receipt thereof, copies of all environmental audits and reports,
whether prepared by personnel of the Company or any of its Subsidiaries or
by independent consultants, with respect to environmental matters at any
Facility presently owned or operated by the Company or its Subsidiaries or
which relate to any Environmental Liabilities of the Company or its
Subsidiaries which, in any such case, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect;
(xvi) Regulatory Notices: as soon as practicable, notification of
any change in any law, rule or regulation relating to vehicle emissions
testing or regulations or any other business of the Company and its
Subsidiaries which could reasonably be expected to have a Material Adverse
Effect;
(xvii) Material Contracts: promptly after (a) any Material Contract
is terminated or expires or is renewed or is, amended or otherwise
modified in any material manner, (b) any new Material Contract is entered
into, or (c) any notice or other communication is delivered by any party
to any Material Contract pursuant thereto or in respect thereof relating
to (x) any financial matter or other matter having financial consequences
in excess of $2,500,000 or (y) any other non-financial matter which could
reasonably be expected to have material consequence to the business of the
Company or any of its Subsidiaries other than an Excluded Foreign
Subsidiary (whether or not constituting a Material Adverse Effect), notice
and a copy thereof and, in the case of any such renewal, amendment, other
modification or new Material Contract, a description in reasonable detail
of the material terms thereof; and
(xviii) Other Information: with reasonable promptness, such other
information and data with respect to the Parent, the Company or any of the
Company's Subsidiaries as from time to time may be reasonably requested by
the Administrative Agent or the Requisite Lenders.
6.2 Corporate Existence
Except as permitted under subsection 7.7, the Parent and the Company will,
and will cause each of its Subsidiaries to, at all times preserve and keep in
full force and effect its corporate existence and all rights and franchises
material to the business of the Company and its Subsidiaries (on a consolidated
basis) or the Loan Parties, taken as a whole.
6.3 Payment of Taxes and Claims; Tax Consolidation.
A. The Parent and the Company will, and will cause each of its
Subsidiaries to, pay all taxes, assessments and other governmental charges
imposed upon it or any of its properties or assets or in respect
97
of any of its income, businesses or franchises before any penalty accrues
thereon, and all claims (including, without limitation, claims for labor,
services, materials and supplies) for sums that have become due and payable
which, if unpaid, might become a Lien (other than a Permitted Encumbrance) upon
any of its properties or assets; provided that no such tax, charge or claim need
be paid if being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted and if such reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP shall have been
made therefor.
B. The Parent and the Company will not, nor will it permit any of its
Subsidiaries to, file or consent to the filing of any consolidated, combined or
other similar income tax return with any Person (other than the Parent, the
Company and Subsidiaries of the Company).
6.4 Maintenance of Properties; Insurance.
The Company will, and will cause each of its Subsidiaries to, maintain or
cause to be maintained in good repair, working order and condition, ordinary
wear and tear excepted, all material properties used or useful in the business
of the Company and its Subsidiaries and from time to time will make or cause to
be made all appropriate repairs, renewals and replacements thereof. The Company
will maintain or cause to be maintained, with financially sound and reputable
insurers, insurance with respect to its properties and business and the
properties and businesses of its Subsidiaries against loss or damage of the
kinds and with respect to liability customarily carried or maintained under
similar circumstances by corporations of established reputation engaged in
similar businesses. Each such policy of casualty insurance covering damage to or
loss of property (other than property of any Foreign Subsidiary that is not a
Foreign Subsidiary Guarantor) shall name the Collateral Agent for the benefit of
the Lenders as additional insured and as the loss payee thereunder for all
losses, subject to application of proceeds as required by subsection
2.4B(iii)(d), each such policy of liability insurance coverage shall name each
of the Lenders and Agents as additional insureds, and all such policies of
insurance shall provide for at least thirty (30) days' prior written notice to
the Collateral Agent of any modification or cancellation of such policy.
6.5 Inspection; Lender Meeting.
Each of the Parent and the Company shall, and shall cause each of its
Subsidiaries to, permit the Administrative Agent and (unless a Default or Event
of Default has occurred and is continuing, at the expense of the applicable
Lender) any authorized representatives designated by any Lender to visit and
inspect any of the properties of the Parent, the Company or any of the Company's
Subsidiaries, including its and their financial and accounting records, and to
make copies and take extracts therefrom, and to discuss its and their affairs,
finances and accounts with its and their officers and independent public
accountants, all upon reasonable advance notice and at such reasonable times
during normal business hours and as often as may be reasonably requested.
Without in any way limiting the foregoing, the Company will, upon the request of
the Administrative Agent, participate in a meeting of the Administrative Agent
and the Lenders once during each Fiscal Year to be held at the Company's
corporate offices (or such other location as may be agreed to by the Company and
the Administrative Agent) at such time as may be agreed to by the Company and
the Administrative Agent.
6.6 Compliance with Laws, etc.
The Parent and the Company shall, and shall cause each of its Subsidiaries
to, comply with the requirements of all applicable laws, rules, regulations and
orders of any governmental authority,
98
noncompliance with which, individually or in the aggregate with other
non-compliances, could reasonably be expected to cause a Material Adverse
Effect.
6.7 Environmental Disclosure and Inspection.
A. The Company shall, and shall cause each of its Subsidiaries to,
exercise all due diligence in order to comply and cause (i) all tenants under
any leases or occupancy agreements affecting any portion of the Facilities
presently owned or operated by the Company or its Subsidiaries and (ii) all
other Persons on or occupying such property, to comply with all Environmental
Laws, noncompliance with which could reasonably be expected to cause a Material
Adverse Effect.
B. The Company agrees that the Administrative Agent may, from time to
time, retain, at the Company's expense, an independent professional consultant
reasonably acceptable to the Company to review any report relating to Hazardous
Materials prepared by or for the Company and to conduct its own investigation of
any Facility currently owned, leased, operated or used by the Company or any of
its Subsidiaries, if (x) a Default or an Event of Default shall have occurred
and be continuing, or (y) the Administrative Agent reasonably believes (1) that
an occurrence relating to such Facility is likely to give rise to an
Environmental Liability or (2) that a violation of an Environmental Law on or
around such Facility has occurred or is likely to occur, which could, in either
such case, reasonably be expected to result in a Material Adverse Effect. The
Company agrees to use all reasonable efforts to obtain permission for the
Administrative Agent's professional consultant to conduct its own investigation
of any such Facility previously owned, leased, operated or used by the Company
or any of its Subsidiaries. The Company shall use its reasonable efforts to
obtain for the Administrative Agent and its agents, employees, consultants and
contractors the right, upon reasonable notice to the Company, to enter into or
on to the Facilities currently owned, leased, operated or used by the Company or
any of its Subsidiaries to perform such tests on such property as are reasonably
necessary to conduct such a review and/or investigation. Any such investigation
of any Facility shall be conducted, unless otherwise agreed to by the Company
and the Administrative Agent, during normal business hours and, to the extent
reasonably practicable, shall be conducted so as not to interfere with the
ongoing operations at any such Facility or to cause any damage or loss to any
property at such Facility. The Company and the Administrative Agent hereby
acknowledge and agree that any report of any investigation conducted at the
request of the Administrative Agent pursuant to this subsection 6.7B will be
obtained and shall be used by the Administrative Agent and the Lenders for the
purposes of the Lenders' internal credit decisions, to monitor and police the
Loans and to protect the Lenders' security interests, if any, created by the
Loan Documents, and the Administrative Agent and the Lenders hereby acknowledge
and agree any such report will be kept confidential by them to the extent
permitted by law except as provided in the following sentence. The
Administrative Agent agrees to deliver a copy of any such report to the Company
with the understanding that the Company acknowledges and agrees that (i) it will
indemnify and hold harmless the Administrative Agent and each Lender from any
costs, losses or liabilities relating to the Company's use of or reliance on
such report, (ii) neither Agent nor any Lender makes any representation or
warranty with respect to such report, and (iii) by delivering such report to the
Company, neither the Administrative Agent nor any Lender is requiring or
recommending the implementation of any suggestions or recommendations contained
in such report.
C. The Company shall promptly advise the Administrative Agent in writing
and in reasonable detail of (i) any Release or threatened Release of any
Hazardous Materials required to be reported to any federal, state, local or
foreign governmental or regulatory agency under any applicable Environmental
Laws, (ii) any and all communications (written or
99
oral) with respect to any pending or threatened Environmental Claims in each
such case which, individually or in the aggregate, have a reasonable possibility
of giving rise to a Material Adverse Effect or any and all material
communications (written or oral) with respect to any Release or threatened
Release of Hazardous Materials, (iii) any Cleanup performed by the Company or
any other Person in response to (x) any Hazardous Materials on, under or about
any Facility, the existence of which has a reasonable possibility of resulting
in an Environmental Liability having a Material Adverse Effect, or (y) any
Environmental Liabilities that could have a Material Adverse Effect, (iv) the
Company's discovery of any occurrence or condition on any property that could
cause any Facility presently owned or operated by the Company or its
Subsidiaries or any part thereof to be subject to any restrictions on the
ownership, occupancy, transferability or use thereof under any Environmental
Laws, and (v) any request for information from any governmental agency that
fairly suggests such agency is investigating whether the Company or any of its
Subsidiaries may be potentially responsible for a Release or threatened Release
of Hazardous Materials.
D. The Company shall promptly notify the Administrative Agent of (i) any
proposed acquisition of stock, assets, or property by the Company or any of its
Subsidiaries that could reasonably be expected to expose the Company or any of
its Subsidiaries to, or result in, Environmental Liability that could have a
Material Adverse Effect or that could reasonably be expected to have a material
adverse effect on any Governmental Authorization then held by the Company or any
of its Subsidiaries and (ii) any proposed action to be taken by the Company or
any of its Subsidiaries to commence manufacturing, industrial or other similar
operations that could reasonably be expected to subject the Company or any of
its Subsidiaries to additional Environmental Laws, that are materially different
from the Environmental Laws applicable to the operations of the Company and its
Subsidiaries as of the Closing Date.
E. The Company shall, at its own expense, provide copies of such documents
or information as the Administrative Agent may reasonably request in relation to
any matters disclosed pursuant to this subsection 6.7.
6.8 The Company's Remedial Action Regarding Hazardous Materials.
The Company shall promptly take, and shall cause each of its Subsidiaries
promptly to take, any and all necessary remedial action in connection with the
presence, handling, storage, use, disposal, transportation or Release or
threatened Release of any Hazardous Materials on, under or affecting any
Facility in order to comply with all applicable Environmental Laws and
Governmental Authorizations unless the failure to so comply could not reasonably
be expected to have a Material Adverse Effect. In the event the Company or any
of its Subsidiaries undertakes any Cleanup action with respect to the presence,
Release or threatened Release of any Hazardous Materials on or affecting any
Facility, the Company or such Subsidiary shall conduct and complete such Cleanup
action in material compliance with all applicable Environmental Laws, and in
accordance with the policies, orders and directives of all federal, state and
local governmental authorities except when, and only to the extent that, the
Company's or such Subsidiary's liability for such presence, handling, storage,
use, disposal, transportation or Release or threatened Release of any Hazardous
Materials is being contested in good faith by the Company or such Subsidiary.
6.9 Execution of Guaranty and Collateral Documents by Future Subsidiaries.
In the event that any Person becomes a Subsidiary of the Company
(including, without limitation, any Domestic Subsidiary created in accordance
with subsection 7.7(viii)), the Company will promptly notify the Administrative
Agent of that fact and, unless such Subsidiary is an Excluded Foreign Subsidiary
or an SPC, cause such Subsidiary on or prior to the time it becomes a Subsidiary
to execute and deliver to the Administrative Agent and the Collateral Agent a
counterpart of the Subsidiary and Parent Guaranty or
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the Foreign Subsidiary Guaranty, as the case may be, and the Pledge Agreement
and the Security Agreement or the Foreign Subsidiary Pledge Agreement and a
foreign law governed security agreement, as the case may be, and to take all
such further action and execute all such further documents and instruments as
may be required to grant and perfect in favor of the Collateral Agent, for the
benefit of the Lenders, a First Priority security interest in all of the real,
mixed and personal property assets of such Subsidiary; provided, that a Foreign
Subsidiary shall not be required to enter into any Loan Document and become a
Foreign Subsidiary Guarantor if either (x) the grant by such Foreign Subsidiary
of a Lien on all of its assets as security for the Obligations or (y) the
guaranteeing by such Foreign Subsidiary of the Obligations, or both, would in
the good faith reasonable judgment of the Company, result in adverse tax
consequences to the Company. In addition, the Company shall pledge (if it is the
direct owner of Capital Stock of such Subsidiary) or shall cause each of its
applicable Subsidiaries (other than a Foreign Subsidiary that is not a Foreign
Subsidiary Guarantor) to pledge (if any of such other Subsidiaries is the direct
owner of Capital Stock of such Subsidiary, each such owner, whether the Company
or any of its other Subsidiaries, the "Pledging Parent") all of the Capital
Stock of such Subsidiary, including any SPC (or 65% of such Capital Stock if
such Subsidiary is an Excluded Foreign Subsidiary or a Foreign Subsidiary which
is not required to be a Foreign Subsidiary Guarantor hereunder) to the
Collateral Agent pursuant to the applicable Collateral Documents and to take all
such further action and execute all such further documents and instruments as
may be required to grant and perfect in favor of the Collateral Agent, for the
benefit of the Lenders, a First Priority security interest in such Capital
Stock. The Company shall deliver to the Administrative Agent, together with such
Loan Documents, in the case of each such Subsidiary that is required to be a
party to any Loan Document: (i) (a) certified copies of such Subsidiary's
Organizational Certificate together, if applicable, with a good standing
certificate from the Secretary of State of the jurisdiction of its
incorporation, formation or organization, as applicable, each to be dated a
recent date prior to their delivery to the Administrative Agent, (b) a copy of
such Subsidiary's Organizational Documents, certified by its secretary or an
assistant corporate secretary (or Person holding an equivalent title or having
equivalent duties and responsibilities) as of a recent date prior to their
delivery to the Administrative Agent, (c) a certificate executed by the
secretary or an assistant secretary of such Subsidiary as to (x) the incumbency
and signatures of the officers of such Subsidiary executing such Guaranty, the
Collateral Documents and the other Loan Documents to which such Subsidiary is a
party and (y) the fact that the attached Organizational Authorizations of such
Subsidiary authorizing the execution, delivery and performance of such Guaranty,
such Collateral Documents and such other Loan Documents are in full force and
effect and have not been modified or rescinded, and (ii) a favorable opinion of
counsel to such Subsidiary, that is reasonably satisfactory to the Agents and
their counsel, as to (a) the due organization and good standing of such
Subsidiary, (b) the due authorization, execution and delivery by such Subsidiary
of such Guaranty, the Collateral Documents and any other Loan Documents to which
it is a party and (c) the enforceability of such Guaranty and such Collateral
Documents against such Subsidiary, (d) the validity and perfection of the
security interests granted by such Subsidiary (and by the Pledging Parent of
such Subsidiary in respect of the Capital Stock of such Subsidiary (including
each Foreign Subsidiary and SPC)) in favor of the Collateral Agent pursuant to
the Collateral Documents, and (e) such other matters as any Agent may reasonably
request, all of the foregoing to be reasonably satisfactory in form and
substance to the Administrative Agent, the Collateral Agent and their counsel.
In addition, the Company shall promptly deliver a supplement to Schedule 5.1 to
the Administrative Agent if any Subsidiary is created or acquired.
6.10 Interest Rate Protection.
At all times, commencing ninety (90) days after the Closing Date, the
Company shall maintain in effect one or more Interest Rate Agreements in form
and substance satisfactory to the Administrative
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Agent to the extent necessary so that, at all times, interest on the portion of
the outstanding principal amount of Term Loans equal to at least 50% of the
aggregate outstanding principal amount of the Term Loans is covered by such
Interest Rate Agreements.
6.11 Further Assurances.
A. In General. At any time or from time to time upon the request of the
Administrative Agent or the Collateral Agent, the Company will, at its expense,
promptly execute, acknowledge and deliver such further documents and do such
other acts and things as the Administrative Agent or the Collateral Agent may
reasonably request in order to effect fully the purposes of the Loan Documents
and to provide for payment of the Obligations in accordance with the terms of
this Agreement, the Notes and the other Loan Documents. In furtherance and not
in limitation of the foregoing, the Company shall take, and cause each of its
Subsidiaries to take, such actions as the Administrative Agent or the Collateral
Agent may reasonably request from time to time (including, without limitation,
the execution and delivery of guaranties, security agreements, pledge
agreements, mortgages, deeds of trust, landlord's consents and estoppels, stock
powers, financing statements and other documents, the filing or recording of any
of the foregoing, title insurance with respect to any of the foregoing that
relates to an interest in real property, and the delivery of stock certificates
and other collateral with respect to which perfection is obtained by possession)
to ensure that the Obligations are guarantied by the Guarantors and are secured
by substantially all of the assets of the Company and its Subsidiaries and all
of the outstanding Capital Stock of the Company.
B. State Contracts. The Company shall use all reasonable commercial
efforts to obtain (i) in the case of any State Contract in existence on the
Closing Date, as promptly as practicable after the Closing Date, and (ii) in the
case of any other State Contract, in connection with the execution and delivery
thereof, a consent, in form and substance reasonably satisfactory to the
Collateral Agent, of each Governmental Authority and other Persons party thereto
to the collateral assignment to the Collateral Agent, as security for the
Obligations, by each Loan Party thereto of all such Loan Party's right, title
and interest in, to and under such State Contract. In addition, the Company
shall use all reasonable commercial efforts to obtain, pursuant to documentation
reasonably satisfactory to the Administrative Agent, any necessary consent of
the Illinois Environmental Protection Agency to the pledge of the Capital Stock
of Envirotest Illinois, Inc. to the Collateral Agent pursuant to the Pledge
Agreement and the transfer of such Capital Stock pursuant to the terms thereof.
C. Registration of Copyrights. The Company agrees to file in the United
States Copyright Office, on or prior to November 20, 1998, applications to
register the copyrights in the material unregistered computer software programs
identified on Schedule 1(c) (which shall include all such computer software
programs except the software licensed from ▇▇▇▇▇▇ Aircraft). The Company shall
provide to the Collateral Agent proof of the submission of such applications
promptly after such submission thereof, so that the Collateral Agent may record
its Lien in the United States Copyright Office against such applications. The
Company shall further advise the Collateral Agent of the issuance of any and all
registrations in respect thereof, along with the related registration numbers,
promptly upon the issuance of such registrations, so that the Collateral Agent
may record evidence of its lien in the United States Copyright Office against
such registrations.
6.12 Conforming Leasehold Interests; Matters Relating to Additional and Closing
Real Property Collateral.
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A. Notice of Property Acquisition. As promptly as practicable and in any
event no later than the date of acquisition by the Company or any of its
Subsidiaries (other than Excluded Foreign Subsidiaries or Foreign Subsidiaries
which are not required to be Foreign Subsidiary Guarantors hereunder) of any
interest in real property (whether fee or leased), the Company shall deliver
written notice to the Administrative Agent and the Collateral Agent of such
acquisition.
B. Conforming Leasehold Interests. If the Company or any of its
Subsidiaries (other than Excluded Foreign Subsidiaries and Foreign Subsidiaries
which are not required to be Foreign Subsidiary Guarantors hereunder) acquires
any Leasehold Property, the Company shall promptly notify the Administrative
Agent and the Collateral Agent and the Company shall, or shall cause such
Subsidiary to, use its reasonable best efforts (without requiring the Company or
such Subsidiary to relinquish any material rights or incur any material
obligations or to expend more than a nominal amount of money over and above the
reimbursement, if required, of the landlord's out-of-pocket costs, including
attorneys fees) to cause such Leasehold Property to be a Conforming Leasehold
Interest.
C. Additional Mortgages, Etc. From and after the Closing Date, in the
event that (i) the Company or any of its Subsidiaries (other than Excluded
Foreign Subsidiaries and Foreign Subsidiaries which are not required to be
Foreign Subsidiary Guarantors hereunder) acquires any fee interest in real
property, (ii) the Company or any of its Subsidiaries (other than Excluded
Foreign Subsidiaries and Foreign Subsidiaries which are not required to be
Foreign Subsidiary Guarantors hereunder) acquires any leasehold interest in any
real property (other than any leased real property (a) with respect to which the
aggregate payments under the term of the lease are less than $250,000 per annum,
(b) that does not contain any financial records not contained elsewhere, (c)
that does not have any personal property located thereon with an aggregate value
in excess of $1,000,000 and (d) that is not otherwise material to the operation
of the business of the Company or any of its Subsidiaries (each such property
meeting all of the foregoing requirements being an "Excluded Leased Asset"), or
(iii) at the time any Person becomes a Subsidiary Guarantor, such Person owns or
holds any fee interest in real property or any leasehold interest in real
property (other than an Excluded Leased Asset) (any such real property asset
described in the foregoing clauses (i), (ii) or (iii) being an "Additional
Mortgaged Property"), the Company or such Subsidiary shall deliver to the
Collateral Agent, as soon as practicable after such Person acquires such
Additional Mortgaged Property the following:
(i) Additional Mortgage and Assignment of Rents and Leases. A fully
executed and notarized Mortgage (an "Additional Mortgage"), fully executed
and notarized Assignment of Rents and Leases and fully executed Uniform
Commercial Code fixture filings and other financing statements, each in
proper form for recording in all appropriate places in all applicable
jurisdictions, encumbering the interest of such Loan Party in such
Additional Mortgaged Property;
(ii) Opinions of Counsel. (a) A favorable opinion of counsel to such
Loan Party, in form and substance, and from a counsel, reasonably
satisfactory to the Collateral Agent and its counsel, as to the due
authorization, execution and delivery by such Loan Party of such
Additional Mortgage and additional Assignment of Rents and Leases and
fixture filings and other financing statements and such other matters as
the Administrative Agent may reasonably request, and (b) if required by
the Administrative Agent, an opinion of counsel (which counsel shall be
reasonably satisfactory to the Administrative Agent) in the state in which
such Additional Mortgaged Property is located with respect to the
enforceability of the Additional Mortgage and Assignment of Rent and
Leases to be recorded in such state and such other matters (including
without limitation any matters governed by the laws of such state
regarding personal property security interests in respect
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of any Collateral) as the Collateral Agent may reasonably request, in each
case in form and substance reasonably satisfactory to the Administrative
Agent;
(iii) Landlord Consent and Estoppel; Recorded Leasehold Interest. In
the case of any Additional Mortgaged Property consisting of a Leasehold
Property, (a) a Landlord Consent and Estoppel and (b) evidence that such
Leasehold Property is a Recorded Leasehold Interest;
(iv) Title Insurance. (a) An ALTA standard form mortgagee title
insurance policy or an unconditional commitment therefor (an "Additional
Mortgage Policy") issued by the Title Company with respect to such
Additional Mortgaged Property, in an amount satisfactory to the Collateral
Agent, insuring fee simple title to, or a valid leasehold interest in,
such Additional Mortgaged Property vested in such Loan Party and insuring
the Collateral Agent that such Additional Mortgage creates a valid and
enforceable First Priority mortgage Lien on such Additional Mortgaged
Property, subject (unless a survey is delivered pursuant to clause (vi)
below) only to a standard survey exception limited to matters occurring
after the date of the most recent survey, which Additional Mortgage Policy
(1) shall include an endorsement for mechanics' liens, for future advances
under this Agreement and for any other matters reasonably requested by the
Collateral Agent and (2) shall provide for affirmative insurance and such
reinsurance as the Collateral Agent may reasonably request, all of the
foregoing in form and substance reasonably satisfactory to the Collateral
Agent; and (b) evidence satisfactory to the Administrative Agent that such
Loan Party has (i) delivered to the Title Company all certificates and
affidavits required by the Title Company in connection with the issuance
of the Additional Mortgage Policy and (ii) paid to the Title Company or to
the appropriate governmental authorities all expenses and premiums of the
Title Company in connection with the issuance of the Additional Mortgage
Policy and all recording and stamp taxes (including mortgage recording and
intangible taxes) payable in connection with recording the Additional
Mortgage in the appropriate real estate records;
(v) Title Report. If no Additional Mortgage Policy is required with
respect to such Additional Mortgaged Property, a title report issued by
the Title Company with respect thereto, dated not more than thirty (30)
days prior to the date such Additional Mortgage is to be recorded and
satisfactory in form and substance to the Collateral Agent;
(vi) Surveys and Appraisals. A survey and appraisal with respect to
such Additional Mortgaged Property dated a date, prepared by a Person and
in form and substance reasonably satisfactory to the Collateral Agent.
(vii) Copies of Documents Relating to Title Exceptions. Copies of
all recorded documents listed as exceptions to title or otherwise referred
to in the Additional Mortgage Policy or title report delivered pursuant to
clause (iv) or (v) above;
(viii) Matters Relating to Flood Hazard Properties. (a) Evidence,
which may be in the form of a letter from an insurance broker or a
municipal engineer, as to (1) whether such Additional Mortgaged Property
is a Flood Hazard Property and (2) if so, whether the community in which
such Flood Hazard Property is located is participating in the National
Flood Insurance Program, (b) if such Additional Mortgaged Property is a
Flood Hazard Property, such Loan Party's written acknowledgment of receipt
of written notification from the Collateral Agent (1) that such Additional
Mortgaged Property is a Flood Hazard Property and (2) as to whether the
community in which such Flood Hazard Property is located is participating
in the National Flood
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Insurance Program, and (c) in the event such Additional Mortgaged Property
is a Flood Hazard Property that is located in a community that
participates in the National Flood Insurance Program, evidence that the
Company has obtained flood insurance in respect of such Flood Hazard
Property to the extent required under the applicable regulations of the
Board of Governors of the Federal Reserve System; and
(ix) Environmental Audit. Reports and other information, in form,
scope and substance satisfactory to the Administrative Agent and the
Collateral Agent and prepared by environmental consultants satisfactory to
the Administrative Agent and the Collateral Agent, concerning any
environmental hazards or liabilities to which the Company or any of its
Subsidiaries may be subject with respect to such Additional Mortgaged
Property;
provided, that notwithstanding anything to the contrary contained in this
subsection 6.12C, neither the Company nor any of its Subsidiaries shall be
required to deliver any of the items (other than an Additional Mortgage and
Additional Mortgage Policy) set forth in this subsection 6.12C with respect to
(x) any property to the extent that the Administrative Agent or the Collateral
Agent has waived delivery of such items (which waiver the Administrative Agent
or Collateral Agent may grant or withhold in its sole discretion), and (y) any
property owned or leased by an Excluded Foreign Subsidiary or any other Foreign
Subsidiary of the Company that is not required to be a Foreign Subsidiary
Guarantor.
D. Closing Date Mortgaged Properties; Landlord Consents and Estoppel. The
Company shall, at its sole cost and expense, cause to be delivered to the
Collateral Agent (i) to the extent requested from time to time by the
Administrative Agent or the Collateral Agent, in respect of such Closing Date
Mortgaged Properties as may be designated by such Agent, the documents described
in subsection 6.12C(vi), (ii) to the extent requested from time to time by the
Administrative Agent or the Collateral Agent in respect of any Leasehold
Property of any Loan Party listed on Schedule 5.5B, any instrument, agreement or
other document (including, without limitation, a Mortgage) described in
subsection 6.12C in respect of Additional Mortgaged Properties, but only to the
extent obtainable with respect to each such Real Property Asset after using
reasonable best efforts, and (iii) on or prior to November 20, 1998, the items
required to have been delivered pursuant to subsection 4.1G which were waived by
the Administrative Agent, all such documents and items to be in form and
substance reasonably satisfactory to the Administrative Agent and the Collateral
Agent. In addition, the Company shall (a) cause to be made, executed and
delivered such adjustments, modifications and replacements to any documents
delivered pursuant to this subsection 6.12D or subsection 4.1G that may from
time to time be requested by either such Agent, and (b) cause all of the
Collateral Agent's costs and expenses (including attorneys' fees) related to
such deliveries, and title insurance costs, expenses and premiums, recording
fees, mortgage recording and similar taxes, and all related fees, costs and
expenses to be paid on or before November 20, 1998 with respect to the
deliveries under the preceding clause (iii), and on demand with respect to
deliveries under the other provisions of this subsection 6.12D.
6.13 Year 2000 Problems.
The Company shall (i) promptly advise the Administrative Agent of any
material (A) disruption or delay in the implementation of the Plan of
Correction, as the same may be updated from time to time, including any
determination by the Company, any senior manager of the Company or any
Subsidiary of the Company, or any consultant known to the Company or any
Subsidiary of the Company with respect to Year 2000 Problems ("Consultant") that
there is or will be a failure to achieve any of the objectives specifically
identified in subdivision (ii) of subsection 5.19, or (B) change in the written
Plan of Correction
105
or Related implementation budget referred to in subdivision (v) of subsection
5.19, or any later version thereof furnished to the Administrative Agent; (ii)
afford to the Administrative Agent and its representatives, upon three (3) days'
notice to the Company, reasonable access to the Company's and its Subsidiaries'
properties, personnel, service providers, vendors and records for the purpose of
enabling the Administrative Agent to assess the adequacy of, and the record of
performance of the Company and its Subsidiaries with respect to, the Plan of
Correction, Related financial performance and conformity of actual performance
with Related implementation budgets; and (iii) periodically report to the
Administrative Agent, in such form as the Administrative Agent may reasonably
request, on (a) the progress of the Company and its Subsidiaries in implementing
the Plan of Correction, (b) the budget for, and actual financial performance
with respect to, implementation of the Plan of Correction and (c) the assessment
of the Company, any senior manager of the Company or any Subsidiary of the
Company, or any Consultant of the adequacy of the Plan of Correction or the
Related implementation budget.
6.14 ENR Transfer.
The Parent and the Company shall cause the ENR Transfer to be effected and
consummated pursuant to the documentation described in clause (viii) of the
definition of Transaction Documents and the Company shall pledge and deliver the
Capital Stock of ENR to the Collateral Agent pursuant to the Collateral
Documents and the Parent and the Company shall cause all conditions and
requirements under the Collateral Documents with respect to the pledging of
Capital Stock to be fulfilled to the satisfaction of the Collateral Agent, in
each such case, on or prior to November 20, 1998.
SECTION 7.
NEGATIVE COVENANTS
The Parent and the Company covenant and agree that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all of
the Loans and other Obligations and the cancellation or expiration of all
Letters of Credit, unless the Requisite Lenders shall otherwise give prior
written consent, the Company shall perform, and shall cause each of its
Subsidiaries to perform, all covenants in this Section 7.
7.1 Indebtedness.
The Parent and the Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or guaranty, or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness or preferred stock, except:
(i) Each of the Loan Parties may become and remain liable with
respect to its respective Obligations;
(ii) The Company and its Subsidiaries, as applicable, may remain
liable with respect to Indebtedness described in Schedule 7.1 annexed
hereto, and, until the Closing Date, the Existing Debt; and the Company
may become and remain liable with respect to up to $4,500,000 of
Indebtedness under the note described in clause (i) of the definition of
"Permitted Acquisition";
(iii) The Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations permitted by subsection 7.4 and,
upon any matured obligations actually arising pursuant thereto, the
Indebtedness corresponding to the Contingent Obligations so
106
extinguished;
(iv) The Company and its Subsidiaries may become and remain liable
with respect to Indebtedness under Capital Leases capitalized on the
consolidated balance sheet of the Company and its Subsidiaries and other
Indebtedness secured by Liens permitted under subsection 7.2A(iii);
provided, that the aggregate amount of all Indebtedness outstanding under
this clause (iv) (other than any such Indebtedness arising under Capital
Leases entered into as part of a sale and lease-back transaction permitted
by subsection 7.8) at any time shall not exceed $30,000,000; provided that
(a) no more than $2,500,000 of such Indebtedness may be used to finance
the acquisition of assets other than Permitted Testing Center Assets, and
(b) no more than $15,000,000 of such Indebtedness may be recourse to the
Company and its Subsidiaries (other than SPCs) or their respective assets;
provided, further, that any Liens securing such Indebtedness do not at any
time cover or encumber any assets or property other than the assets or
property financed by such Indebtedness;
(v) The Company may become and remain liable with respect to
Indebtedness to any of its Subsidiaries other than Excluded Foreign
Subsidiaries, any wholly-owned Subsidiary Guarantor that is a Domestic
Subsidiary may become and remain liable with respect to Indebtedness to
the Company or any other wholly-owned Subsidiary Guarantor that is a
Domestic Subsidiary, any Subsidiary of the Company which is not a
Subsidiary Guarantor may become and remain liable with respect to
Indebtedness to any other Subsidiary of the Company (other than an
Excluded Foreign Subsidiary) which is not a Subsidiary Guarantor, and any
Foreign Subsidiary may become and remain liable with respect to
Indebtedness owing to the Company or any other Subsidiary to the extent
such Investment is permitted by subsection 7.3(ix); provided that, in each
case, (a) all such intercompany Indebtedness shall be evidenced by
promissory notes which (other than in the case of any such promissory
notes issued to Subsidiaries which are not Subsidiary Guarantors) shall
have been pledged to the Collateral Agent pursuant to the Collateral
Documents, (b) all such intercompany Indebtedness owed by the Company to
any of its respective Subsidiaries shall be unsecured and subordinated in
right of payment to the payment in full of the Obligations pursuant to the
terms of the applicable promissory notes or an intercompany subordination
agreement that in any such case, are reasonably satisfactory to the
Administrative Agent, and (c) any payment by the Company or by any
Subsidiary of the Company under any guaranty of the Obligations shall
result in a pro tanto reduction of the amount of any intercompany
Indebtedness owed by the Company or by such Subsidiary to the Company or
to any of its Subsidiaries for whose benefit such payment is made;
(vi) The Company and its Subsidiaries may become and remain liable
with respect to Indebtedness under Interest Rate Agreements required under
subsection 6.10;
(vii) The Parent may become and remain liable with respect to the
Senior Discount Notes;
(viii) The Company may become and remain liable with respect to the
Senior Subordinated Notes;
(ix) Foreign Subsidiaries that are not Foreign Subsidiary Guarantors
may become and remain liable with respect to other Indebtedness so long as
(a) such Indebtedness is without recourse to the Loan Parties and their
respective assets, and (b) the amount of Indebtedness incurred by any such
Foreign Subsidiary does not exceed an amount equal to two times the total
107
cash equity investment from time to time (but not excluding retained
earnings) contributed to or paid into such Foreign Subsidiary; and
(x) The Company and the Subsidiary Guarantors may become and remain
liable with respect to other Indebtedness in an aggregate principal amount
not to exceed at any time outstanding $5,000,000.
7.2 Liens and Related Matters.
A. Prohibition on Liens. The Parent and the Company shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly, create, incur,
assume or permit to exist any Lien on or with respect to any property or asset
of any kind (including any document or instrument in respect of goods or
accounts receivable) of the Company or any of its Subsidiaries, whether now
owned or hereafter acquired, or any income or profits therefrom, or file or
permit the filing of, or permit to remain in effect, any financing statement, or
other similar notice of any Lien with respect to any such property, asset,
income or profits under the Uniform Commercial Code of any state or under any
similar recording or notice statute, except (solely with respect to the Company
and its Subsidiaries):
(i) Permitted Encumbrances;
(ii) Liens described in Schedule 7.2A annexed hereto, and, until the
Closing Date, Liens securing Existing Debt;
(iii) Purchase money security interests (including mortgages,
conditional sales, Capital Leases and any other title retention or
deferred purchase devices) in real or tangible personal property of the
Company or any of its Subsidiaries acquired after the Closing Date and
existing or created at the time of acquisition thereof or within thirty
(30) days thereafter, and the renewal, extension and refunding of any such
security interest in an amount not exceeding the amount thereof remaining
unpaid immediately prior to such renewal, extension or refunding;
provided, that the Indebtedness secured by such Lien is permitted by
subsection 7.1(iv) or subsection 7.1(x); provided, further, that such
Liens do not at any time (including, without limitation, in connection
with any renewal, extension and refunding) cover or encumber any assets or
property other than the assets or property financed by such Indebtedness;
(iv) Liens on assets of the Company and its Subsidiaries not
otherwise permitted under this subsection 7.2A, securing obligations
(other than Indebtedness) in an aggregate amount not to exceed $2,500,000
at any time outstanding;
(v) Liens in favor of the Collateral Agent granted pursuant to the
Collateral Documents or granted in favor of any Agent or Lender pursuant
to subsection 10.4 hereof;
(vi) Liens securing Indebtedness of Excluded Foreign Subsidiaries
permitted under subsection 7.1(ix); provided, that such Liens do not at
any time cover or encumber any assets or property other than the assets or
property of an Excluded Foreign Subsidiary; and
(vii) At any time prior to the consummation of the ENR Merger, Liens
on Margin Stock.
108
B. No Further Negative Pledges. Except with respect to specific property
encumbered to secure payment of particular Indebtedness or to be sold pursuant
to an executed agreement with respect to an Asset Sale, neither the Parent, the
Company nor any of their respective Subsidiaries (other than Excluded Foreign
Subsidiaries and SPCs) shall enter into any agreement (other than the Loan
Documents and the Senior Discount Note Indenture and Senior Subordinated Note
Indenture, as each such indenture is in effect on the Closing Date) prohibiting
the creation or assumption of any Lien upon any of its properties or assets,
whether now owned or hereafter acquired.
C. No Restrictions on Subsidiary Distributions to the Company or Other
Subsidiaries. Except as otherwise provided herein or in the Senior Subordinated
Note Indenture or the Senior Discount Note Indenture, each as in effect on the
Closing Date, the Parent and the Company will not, and will not permit any of
its Subsidiaries (other than Excluded Foreign Subsidiaries and SPCs) to, create
or otherwise cause or suffer to exist or become effective any consensual
encumbrance, limitation or restriction of any kind on the ability of any
Subsidiary of the Company to (i) pay dividends or make any other distributions
on any of such Subsidiary's Capital Stock owned by the Company or any other
Subsidiary of the Company, (ii) repay or prepay any Indebtedness owed by such
Subsidiary to the Company or any other Subsidiary of the Company, (iii) make
loans or advances to the Company or any other Subsidiary of the Company, or (iv)
transfer any of its property or assets to the Company or any other Subsidiary of
the Company.
7.3 Investments; Joint Ventures.
The Parent and the Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, make or own any Investment in any
Person except:
(i) (a) The Parent may own all of the outstanding Capital Stock of
the Company, and (b) the Company and its Subsidiaries may (x) continue to
own the Investments owned by them as of the Closing Date in any
Subsidiaries of the Company, and (y) make and own additional Investments
in any Subsidiary which is in the Related Subsidiary Group of the Company
or such Subsidiary, as applicable, at the time each such additional
Investment is made, and (z) make and own Investments in any wholly-owned
Domestic Subsidiary that is a Subsidiary Guarantor;
(ii) The Company and its Subsidiaries may make and own intercompany
loans to the extent permitted by subsection 7.1(v);
(iii) The Company and its Subsidiaries may make and own Investments
in Cash Equivalents;
(iv) The Company and its Subsidiaries may make and own Consolidated
Capital Expenditures permitted by subsection 7.6D;
(v) The Company and its Subsidiaries may make and own Investments
contemplated by the ENR Merger Agreement, the ENR Transfer, the Shares
Offer to Purchase and the Debt Tender Offer;
(vi) The Company and its Subsidiaries may make loans to officers of
the Company and its Subsidiaries (a) in an aggregate amount not to exceed
$4,500,000 outstanding at any time solely for the purpose of reimbursing
such officers for the amount of income taxes payable by such
109
officers in connection with shares of Capital Stock of the Parent issued
to such officers after October 1, 1998 and prior to the Closing Date;
provided that such shares are pledged to the Company or Subsidiary making
such loans, and such loans and shares are pledged to the Collateral Agent
pursuant to the Collateral Documents, and (b) in an additional aggregate
outstanding amount not to exceed $500,000 at any time;
(vii) The Company may make Investments in the Financial Services
Affiliate in aggregate amount not to exceed $3,000,000 so long as (x) no
creditor of the Financial Services Affiliate has or would have recourse to
the Company or any of its Subsidiaries, whether as a result of the
organizational structure of the Financial Services Affiliate, by
contractual obligation or operation of law or otherwise, and (y) the
Financial Services Program is in effect and in operation with respect to
new sales by ESP of its products;
(viii) The Company and its Subsidiaries may make and own Permitted
Acquisitions; and
(ix) The Company and its Subsidiaries may make (and thereafter
continue to own) other Investments in Foreign Subsidiaries, SPCs and joint
ventures:
(a) in Fiscal Year 1999, in an aggregate amount not to exceed
$15,000,000;
(b) in Fiscal Year 2000, in an aggregate amount not to exceed
the sum of (x) $10,000,000 plus (y) any amounts permitted to be
invested but not invested pursuant to clause (a) above;
(c) in Fiscal Year 2001, in an aggregate amount not to exceed
the sum of (x) the lesser of $10,000,000 and any amounts permitted
to be invested but not invested pursuant to clause (b) above plus
(y) if, and so long as, the Leverage Ratio is less than 3.0:1.0
after giving effect to each such Investment, $10,000,000; and
(d) thereafter, if, and so long as, the Leverage Ratio is less
than 3.0:1.0 after giving effect to each such Investment, an
aggregate amount not to exceed the excess of (x) $10,000,000 over
(y) the aggregate amount of Investments made pursuant to clause
(c)(y) above;
provided, in each case, that, no Default or Event of Default shall have
occurred and be continuing or result therefrom; and, provided, further,
that all Investments permitted under this Subsection 7.3(ix) made or owned
by the Company and its Subsidiaries in SPCs may not exceed $5,000,000 in
the aggregate at any time.
7.4 Contingent Obligations.
The Parent and the Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create or become or remain liable with
respect to any Contingent Obligation, except:
(i) The Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations in respect of Letters of Credit;
the Subsidiary Guarantors may become and remain liable with respect to
Contingent Obligations arising under the guaranties and the performance
bonds and guaranties described on Schedule 7.4 annexed hereto; and the
Subsidiary Guarantors may become and remain liable with respect to
Contingent Obligations arising under the
110
Senior Subordinated Note Indenture in respect of the Senior Subordinated
Notes;
(ii) The Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations in respect of customary
indemnification and purchase price adjustment obligations of any such
Person incurred in connection with Asset Sales or other sales of assets;
(iii) The Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations under guarantees in the ordinary
course of business of the obligations of suppliers, landlords, customers,
franchisees and licensees of the Company and its Subsidiaries in an
aggregate amount not to exceed at any time $2,500,000;
(iv) The Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations in respect of unsecured guaranties
of any obligations (other than obligations in respect of any Indebtedness)
of the Company or any of its Subsidiaries permitted under this Agreement
in an aggregate amount not to exceed at any time $2,500,000; and
(v) The Company and its Subsidiaries may become and remain liable
with respect to other Contingent Obligations; provided, that the maximum
aggregate liability, contingent or otherwise, of the Company and its
Subsidiaries in respect of all such Contingent Obligations shall at no
time exceed $2,500,000;
provided, however, that (x) neither the Company nor any of its Subsidiaries
shall incur any Contingent Obligations in respect of any obligations of any SPC,
and (y) neither the Company nor any of its Subsidiaries (other than an Excluded
Foreign Subsidiary) shall incur any Contingent Obligations in respect of any
obligations of any Excluded Foreign Subsidiary.
7.5 Restricted Payments.
The Parent and the Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, declare, order, pay, make or set apart
any sum for any Restricted Payment; provided that, so long as no Default or
Event of Default has occurred and is continuing or would result therefrom, the
Company and its Subsidiaries may (i) make regularly scheduled payments of
interest in respect of any Subordinated Indebtedness in accordance with the
terms of, and only to the extent required by, and subject to the subordination
provisions contained in, the indenture or other agreement pursuant to which such
Subordinated Indebtedness was issued, as such indenture or other agreement may
be amended from time to time to the extent permitted under subsection 7.13B,
(ii) make Restricted Payments on the Closing Date in respect of the Existing
Senior Subordinated Notes to the extent contemplated by the Transaction
Documents, (iii) repurchase shares of, or options to purchase shares of, Capital
Stock of the Parent, the Company or any of its Subsidiaries from employees,
former employees, directors or former directors of the Company or any of its
Subsidiaries (or permitted transferees of such employees, former employees,
directors or former directors), pursuant to the terms of the agreements
(including employment agreements) or plans (or amendments thereto) approved by
the Board of Directors under which such individuals purchase or sell or are
granted the option to purchase or sell, shares of such Capital Stock, provided,
that the aggregate amount of such repurchases shall not exceed $1,500,000 in any
calendar year or $5,000,000 in the aggregate from and after the Closing Date,
(iv) make Restricted Payments to any member of the Related Subsidiary Group of
the Company or such Subsidiary, as applicable, and the pro rata share to any
other Person owning Capital Stock of such Subsidiary, (v) make Restricted
Payments to the Parent (a) in an amount sufficient, but not to exceed $500,000
per Fiscal Year, to enable the Parent to pay necessary
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operating expenses and other reasonable administrative expenses, and (b) to
enable the Parent to pay foreign, federal, state or local tax liabilities, not
to exceed the amount of any tax liabilities that would otherwise be payable by
the Company and its Subsidiaries to the appropriate taxing authorities if they
filed separate tax returns to the extent that the Parent has an obligation to
pay such tax liabilities relating to the operations, assets or capital of the
Company and its Subsidiaries, provided, that any such payments described in this
clause (v) shall either be used by the Parent to pay the applicable liabilities
within thirty (30) days of receipt of such payment or refunded to the payor, and
(vi) on any date occurring on or after April 30, 2004, make Restricted Payments
to the Parent in an amount equal to the accrued but unpaid interest on the
Senior Discount Notes scheduled to be paid by the Parent on such date in cash;
provided that (a) no Default or Event of Default shall have occurred and be
continuing or result therefrom, (b) the Company shall be in Pro Forma Compliance
after giving effect to such Restricted Payment, assuming for such purpose that
(x) the maximum Leverage Ratios set forth in subsection 7.6C were each lower by
0.35x, (y) such Restricted Payment and the immediately preceding Restricted
Payment, if any, made pursuant to this clause (vi) are included as part of
Consolidated Fixed Charges for purposes of calculating the denominator of the
Fixed Charge Coverage Ratio, and (z) such Restricted Payment and the immediately
preceding Restricted Payment, if any, made pursuant to this clause (vi) are
included as part of Consolidated Interest Expense for purposes of calculating
the denominator of the Interest Coverage Ratio and (c) the Parent shall
forthwith use such Restricted Payment to pay such interest to the trustee for
the holders of the Senior Discount Notes.
7.6 Financial Covenants.
A. Minimum Interest Coverage Ratio. The ratio (the "Interest Coverage
Ratio") of (i) Consolidated Adjusted EBITDA to (ii) Consolidated Interest
Expense for any four-Fiscal Quarter period ending during or at the end of any of
the periods set forth below (each applicable four-Fiscal Quarter period being a
"Calculation Period") shall not be less than the correlative ratio indicated
below:
-----------------------------------------------------------
Period During Which Minimum Interest
Calculation Period Ends Coverage Ratio
-----------------------------------------------------------
10/1/98 through 12/31/98 2.00:1.00
-----------------------------------------------------------
1/1/99 through 12/31/99 2.00:1.00
-----------------------------------------------------------
1/1/00 through 12/31/00 2.25:1.00
-----------------------------------------------------------
1/1/01 through 12/31/01 2.50:1.00
-----------------------------------------------------------
1/1/02 through any time thereafter 3.00:1.00
-----------------------------------------------------------
B. Minimum Fixed Charge Coverage Ratio. The ratio (the "Fixed Charge
Coverage Ratio") of (i) Consolidated Adjusted EBITDA to (ii) Consolidated Fixed
Charges at the end of any Calculation Period shall not be less than the
correlative ratio indicated below:
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-----------------------------------------------------------
Minimum Fixed
Period During Which Charge
Calculation Period Ends Coverage Ratio
-----------------------------------------------------------
1/1/99 through 12/31/00 1.00:1:00
---------------------------------------- ---------------
1/1/01 through 12/31/01 1.05:1.00
---------------------------------------- ---------------
1/1/02 through 12/31/03 1.10:1.00
---------------------------------------- ---------------
1/1/04 through any time thereafter 1.20:1.00
C. Maximum Leverage Ratio. The ratio (the "Leverage Ratio") of (i)
Consolidated Total Debt as of the last day (any such day being a "Calculation
Date") of any Fiscal Quarter ending during any of the periods set forth below,
to (ii) Consolidated Adjusted EBITDA for the four-Fiscal Quarter period ending
on such Calculation Date shall not exceed the correlative ratio indicated below:
-------------------------------------------------------
Period During Which Maximum
Calculation Date Occurs Leverage Ratio
-------------------------------------------------------
10/1/98 through 12/31/99 5.00:1.00
-------------------------------------------------------
1/1/00 through 12/31/00 4.00:1.00
-------------------------------------------------------
1/1/01 through 12/31/01 3.50:1.00
-------------------------------------------------------
1/1/02 through any time thereafter 3.00:1.00
-------------------------------------------------------
D. Consolidated Capital Expenditures. The Company shall not, and shall not
permit its Subsidiaries to, make or incur Consolidated Capital Expenditures in
any Fiscal Year (or specified portion thereof) in an aggregate amount in excess
of the corresponding amount (the "Maximum Consolidated Capital Expenditures
Amount") set forth below opposite such Fiscal Year (or such portion thereof) as
indicated below; provided, that the Maximum Consolidated Capital Expenditures
Amount for any Fiscal Year shall be increased by an amount equal to 50% of the
excess, if any, of (i) the Maximum Consolidated Capital Expenditures Amount
(excluding, and without giving effect to, any increases thereto from any prior
carry over of amounts pursuant to this subsection) for the previous Fiscal Year
(or specified portion thereof) over (ii) the actual amount of Consolidated
Capital Expenditures for such previous Fiscal Year (or specified portion
thereof):
-----------------------------------------------------------
Fiscal Year Maximum Consolidated
(or Portion Thereof) Capital Expenditures Amount
-----------------------------------------------------------
1998 $15,000,000
-----------------------------------------------------------
1999 $13,000,000
-----------------------------------------------------------
2000 $7,000,000
-----------------------------------------------------------
-----------------------------------------------------------
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-----------------------------------------------------------
2001 and thereafter $6,000,000
-----------------------------------------------------------
In addition to the foregoing amounts, the Company and its Subsidiaries may make
or incur Consolidated Capital Expenditures in connection with (i) the State
Contract for the Northern Kentucky Emissions Testing Program, BP010138, awarded
in June 1998, in an aggregate amount not to exceed $5,700,000 (including,
without limitation, all amounts incurred or expended prior to the Closing Date),
which amounts shall not be subject to the foregoing proviso, and (ii) the
build-out of Permitted Testing Center Assets, commencing in Fiscal Year 1999, in
an aggregate amount not to exceed the sum of (x) $25,000,000 plus (y) if, and so
long as the Leverage Ratio is less than 3.0:1.0 after giving effect thereto,
$10,000,000, of which sum not more than $15,000,000 may be made or incurred in
any Fiscal Year, and which amounts shall not be subject to the foregoing
proviso. Notwithstanding anything to the contrary contained herein, the Company
and its Domestic Subsidiaries shall not make or incur Consolidated Capital
Expenditures in property, plant or equipment which is not located in the United
States of America.
E. Certain Calculations.
(i) With respect to any period during which any Permitted
Acquisition occurs or any business of any other Person is acquired by the
Company or any of its Subsidiaries as permitted pursuant to the terms
hereof, for purposes of determining compliance or Pro Forma Compliance
with the financial covenants set forth in this subsection 7.6,
Consolidated Adjusted EBITDA and Consolidated Interest Expense shall be
calculated with respect to such periods and such Permitted Acquisition or
business on a pro forma basis (including pro forma adjustments arising out
of events which are directly attributable to a specific transaction, are
factually supportable and are expected to have a continuing impact, in
each case, determined on a basis consistent with Article 11 of Regulation
S-X under the Securities Act, which pro forma adjustments shall be
certified by the chief financial officer of the Company) using the
historical financial statements of all entities or business so acquired or
to be acquired and the consolidated financial statements of the Company
and its Subsidiaries which shall be reformulated (a) as if such
acquisition, and any acquisitions which have been consummated during such
period, and any Indebtedness or other liabilities incurred in connection
with any such acquisition, had been consummated or incurred at the
beginning of such period (and assuming that such Indebtedness bears
interest during any portion of the applicable measurement period prior to
the relevant acquisition at the weighted average of the interest rates
applicable to outstanding Loans during such period), and (b) otherwise in
conformity with such procedures as may be agreed upon between the
Administrative Agent and the Company, all such calculations to be in form
and substance satisfactory to the Administrative Agent.
(ii) With respect to any period during which any Subsidiary of the
Company or any business of the Company or any of its Subsidiaries is sold
or otherwise disposed of, for purposes of determining compliance with the
financial covenants set forth in this subsection 7.6, Consolidated
Adjusted EBITDA and Consolidated Interest Expense shall be calculated with
respect to such periods and such Subsidiaries or businesses on a pro forma
basis (including pro forma adjustments arising out of events which are
directly attributable to a specific transaction, are factually supportable
and are expected to have a continuing impact, in each case, determined on
a basis consistent with Article 11 of Regulation S-X under the Securities
Act, which pro forma adjustments shall be certified by the chief financial
officer of the Company) using the consolidated financial statements of the
Company and its Subsidiaries which shall be reformulated (a) as if such
sale or disposition, and any sales or dispositions which have been
consummated during such period, and any Indebtedness or other liabilities
assumed by the acquirer thereof in connection
114
with any such sale or disposition, had been consummated or assumed at the
beginning of such period, and (b) otherwise in conformity with such
procedures as may be agreed upon between the Administrative Agent and the
Company, all such calculations to be in form and substance satisfactory to
the Administrative Agent.
F. State Contract Terminations.
On each date of the expiration, termination, cancellation, rescission or
other material adverse amendment or modification of any State Contract, the
Company shall be in Pro Forma Compliance, assuming, for purposes of the
foregoing, that (i) such expiration, termination, cancellation, rescission or
other material amendment or modification took effect as of the beginning of the
most recently completed Calculation Period, (ii) the Permitted Testing Center
Assets attributable to such State Contract and no longer useful in connection
therewith were sold at the beginning of such period at prices proposed by the
Company and agreed upon by the Administrative Agent (or, absent such agreement,
their respective net book values), (iii) the reasonably estimated net cash
proceeds of such sales, and any other payments received by the Company or any
Subsidiary Guarantor from any applicable Governmental Authority in connection
with any such termination, were used to repay outstanding Term A Loans (and
thereafter Term B Loans), or any other Indebtedness permitted hereby that is
secured by such Indebtedness, as of the beginning of such period, and (iv) any
price increases which became effective during such period under any then State
Contract became effective as of the beginning of such period. As promptly as
practicable after the occurrence of any such expiration, cancellation,
termination, rescission or other material amendment or modification, but in any
event within thirty (30) days thereof, the Company shall deliver to the
Administrative Agent an Officer's Certificate of the chief financial officer of
the Company demonstrating in reasonable detail whether the Company is in such
Pro Forma Compliance.
7.7 Restriction on Fundamental Changes; Asset Sales.
The Parent and the Company shall not, and shall not permit any of its
Subsidiaries to, alter the corporate, capital or legal structure of the Parent,
the Company or any of its Subsidiaries, create any new Subsidiaries or enter
into any transaction of merger or consolidation (other than the ENR Merger), or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, lease, sub-lease, transfer or otherwise dispose
of all or any of its business or assets, whether now owned or hereafter
acquired, or (other than pursuant to the ENR Merger, the ENR Transfer, the
Shares Acquisition and the Debt Tender Offer) acquire by purchase or otherwise
all or a substantial part of the business or assets of, or Capital Stock or
other evidence of beneficial ownership of, any Person or any unit or division
thereof, except:
(i) Any Subsidiary of the Company may be merged with or into the
Company or any wholly-owned Subsidiary of its Related Subsidiary Group, or
be liquidated, wound up or dissolved, or all or any part of its business,
property or assets may be conveyed, sold, leased, transferred or otherwise
disposed of, in one transaction or a series of transactions, to the
Company or any wholly-owned Subsidiary of its Related Subsidiary Group;
provided that, in the case of such a merger involving the Company, the
Company shall be the continuing or surviving corporation, in the case of
any such merger involving a Domestic Subsidiary (but not the Company), a
Domestic Subsidiary shall be the continuing or surviving corporation and
in the case of any other such merger involving a Subsidiary Guarantor, a
wholly-owned Subsidiary Guarantor shall be the continuing or surviving
corporation;
115
(ii) [RESERVED];
(iii) The Company and its Subsidiaries may acquire inventory,
equipment and other assets in the ordinary course of business;
(iv) The Company and its Subsidiaries may grant Liens permitted
pursuant to subsection 7.2A and may sell or otherwise dispose of assets in
transactions that do not constitute Asset Sales; provided that the
consideration received for such assets shall be in an amount at least
equal to the fair market value thereof (determined in good faith by the
board of directors of the Company) and no less than 80% thereof shall be
paid in cash;
(v) The Company and its Subsidiaries may make (a) Permitted Testing
Center Asset Sales, (b) Asset Sales of assets described in Schedule 7.7
annexed hereto in an aggregate amount not to exceed $5,000,000 for all
such sales, and (c) other Asset Sales of assets having a fair market value
(determined in good faith by the board of directors of the Company) not in
excess of $10,000,000 in the aggregate measured on a cumulative basis from
the Closing Date; provided that, in each such case, (x) the consideration
received for such assets shall be in an amount at least equal to the fair
market value thereof (determined in good faith by the board of directors
of the Company); (y) not less than 80% of the consideration received
therefor shall be cash; and (z) the proceeds of such Asset Sales shall be
applied as required by subsection 2.4B(iii)(a);
(vi) The Company and its Subsidiaries may make Asset Sales to any
Governmental Authority to the extent required by any State Contract as in
effect pursuant to this Agreement; provided that the proceeds of such
Asset Sales shall be applied to prepay Term Loans pursuant to subsection
2.4B(iii)(a);
(vii) The Company and its Subsidiaries may (a) enter into sale and
lease-back transactions permitted by subsection 7.8, (b) enter into
Permitted Acquisitions and (c) make Investments permitted by subsection
7.3(ix); and
(viii) The Company may create new Subsidiaries; provided that, (a)
concurrently with or prior to the formation of each such Subsidiary, the
Company or such Subsidiary, as applicable, shall deliver or cause to be
delivered each of the items and execute each of the documents, if any,
required pursuant to subsection 6.9, and (b) each newly formed Domestic
Subsidiary shall be a wholly-owned Subsidiary of the Company.
At any time prior to the consummation of the ENR Merger, the Company and its
Subsidiaries may make Asset Sales in respect of Margin Stock; provided that (x)
the consideration received for such assets shall be in an amount at least equal
to the fair market value thereof (determined in good faith by the board of
directors of the Company); (y) not less than 100% of the consideration received
therefor shall be Cash and cash and cash equivalents; and (z) the proceeds of
such Asset Sales shall be applied to repay Term Loans pursuant to subsection
2.4B(iii)(a).
7.8 Sales and Lease-Backs.
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, become or remain liable as lessee or as a guarantor or
other surety with respect to any lease, whether an Operating Lease or a Capital
Lease, of any property (whether real, personal or mixed), whether now
116
owned or hereafter acquired, (i) which the Company or any of its Subsidiaries
has sold or transferred or is to sell or transfer to any other Person (other
than the Company or any of its Subsidiaries) or (ii) which the Company or any of
its Subsidiaries intends to use for substantially the same purpose as any other
property which has been or is to be sold or transferred by the Company or any of
its Subsidiaries to any Person (other than the Company or any of its
Subsidiaries) in connection with such lease, unless (v) the proceeds of such
sale are used to prepay Term Loans pursuant to subsection 2.4B(iii)(a), (w) the
Company shall be in Pro Forma Compliance after giving effect to such sale or
sale and leaseback transaction, (x) no Default or Event of Default has occurred
and is continuing or would result therefrom, (y) the aggregate fair market value
of all assets subject to such sale and lease-back transactions is not in excess
of $10,000,000 and (z) the sale price for each such sale shall be the fair
market value of the applicable asset or property and shall be paid in cash.
7.9 Sale or Discount of Receivables.
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, sell with recourse, or discount or otherwise sell for
less than the face value thereof, any of its notes or accounts receivable.
7.10 Transactions with Shareholders and Affiliates.
The Parent and the Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction (including, without limitation, the purchase, sale, lease or
exchange of any property or the rendering of any service) with any holder of 5%
or more of any class of equity Securities of the Parent, the Company or such
Subsidiary or with any Affiliate of the Parent or the Company or of any such
Subsidiary or holder, on terms that are less favorable to the Parent, the
Company or that Subsidiary, as the case may be, than those that might be
obtained at the time from Persons who are not such a holder or Affiliate;
provided that the foregoing restriction shall not apply to (i) transactions
between the Company and any wholly-owned Subsidiary Guarantor, (ii) reasonable
and customary fees paid to members of the boards of directors of the Company and
its Subsidiaries, (iii) management fees paid by the Company to Alchemy in an
aggregate amount of up to $1,000,000 per year, plus reasonable out-of-pocket
expenses related thereto; provided that no more than $150,000 of such fees per
year may be paid during such times as any Default or Event of Default has
occurred and is continuing, (iv) loans and advances permitted hereby to officers
and employees of the Company and its Subsidiaries and (v) the consummation of
the transactions described in clause (i) of the definition of Permitted
Acquisitions.
7.11 Ownership of Subsidiary Stock.
The Company shall not:
(i) directly or indirectly sell, assign, pledge or otherwise
encumber or dispose of any shares of Capital Stock or other equity
Securities of any of its Subsidiaries, except as permitted under this
Agreement and the Collateral Documents or to qualify directors if required
by applicable law;
(ii) except as a result of a sale permitted hereby of all of the
outstanding Capital Stock of a Subsidiary Guarantor to a third-party,
permit any Capital Stock of any Subsidiary Guarantor that is a
wholly-owned Domestic Subsidiary to be directly or indirectly owned by any
Loan Party
117
other than the Company or a Subsidiary Guarantor that is a wholly-owned
Domestic Subsidiary; provided that this clause shall not prevent Newmall
or ▇▇▇▇▇▇▇ UK from continuing to directly or indirectly, as applicable,
own (a) Capital Stock of ▇▇▇▇▇▇▇ US and its Subsidiaries (other than Stone
Rivet) immediately prior to the consummation of any of the Transactions,
or (b) until the date on which the ENR Transfer is required to have been
consummated pursuant to Section 6.14, Stone Rivet, ENR and their
respective Subsidiaries; or
(iii) permit any of its Subsidiaries directly or indirectly to sell,
assign, pledge or otherwise encumber or dispose of any shares of Capital
Stock or other equity Securities of any of its Subsidiaries (including
such Subsidiary), except as permitted under this Agreement and the
Collateral Documents, to the Company or another wholly owned Subsidiary of
the Company or to qualify directors if required by applicable law.
7.12 Conduct of Business.
A. The Company and Its Operating Subsidiaries. The Company shall not, and
shall not permit any of its Subsidiaries to, engage in any business other than
(i) the businesses engaged in by the Company and its Subsidiaries on the Closing
Date as described in the Information Memorandum and (ii) such other lines of
business as may be reasonably related thereto.
B. The Holding Companies. The Company shall not permit any Holding Company
to (i) incur, directly or indirectly, any Indebtedness other than the
Obligations under the Loan Documents to which any such Holding Company is a
party and its obligations under the Senior Subordinated Subsidiary Guaranty,
(ii) create or suffer to exist any Lien upon any property or assets now owned or
hereafter acquired by such Holding Company other than the Liens created under
the Collateral Documents to which such Holding Company is a party, (iii) engage
in any business or own any assets other than holding the Capital Stock of such
Holding Company's direct Subsidiaries; (iv) consolidate with or merge with or
into, or convey, transfer or lease all or substantially all its assets to, any
Person other than the Company or another Subsidiary Guarantor; or (v) sell or
otherwise dispose of any Capital Stock of any of such Holding Company's
Subsidiaries other than to the Company or a wholly-owned Domestic Subsidiary
which is a Subsidiary Guarantor.
7.13 Amendments or Waivers of Certain Agreements.
A. Amendments or Waivers of Certain Agreements and Documents. None of the
Parent, the Company nor any of its respective Subsidiaries shall terminate or
agree to any amendment, restatement, supplement or other modification to, or
waive any of its rights under, any (i) Transaction Document (other than the
Existing Indentures Amendments and the Loan Documents), (ii) Organizational
Certificate or Organizational Document, or (iii) State Contract, if such
termination, amendment, restatement, supplement, modification or waiver, in the
case of clauses (i) and (ii), would be materially adverse to the Company, any
Subsidiaries of the Company or the Lenders, and, in the case of clause (iii),
could reasonably be expected to have a Material Adverse Effect.
B. Amendments of Documents Relating to Indebtedness. The Parent and the
Company shall not, and shall not permit any of their respective Subsidiaries to,
amend or otherwise change the terms of the Ohio Debt or any Indebtedness under
the Senior Discount Note Related Documents or the Senior Subordinated Note
Related Documents, or make any payment consistent with an amendment thereof or
change thereto, if the effect of such amendment or change is to increase the
interest rate on such
118
Indebtedness, change (to earlier dates) any dates upon which payments of
principal or interest are due thereon, change any event of default or condition
to an event of default with respect thereto (other than to eliminate any such
event of default or increase any grace period related thereto), change the
redemption, prepayment or defeasance provisions thereof, change the
subordination provisions thereof (or of any guaranty thereof), or change any
collateral therefor (other than to release such collateral), or if the effect of
such amendment or change, together with all other amendments or changes made, is
to increase materially the obligations of the obligor thereunder or to confer
any additional rights on the holders of such Indebtedness (or trustee or other
representative on their behalf) which would be adverse to the Parent, the
Company or the Lenders.
C. Preferred Stock. Neither the Company nor any Subsidiary of the Company
shall amend, restate, supplement or otherwise modify its Organizational
Certificate if the effect of such amendment, restatement, supplement or
modification is to provide for the issuance of any preferred stock of the
Company or of any of its Subsidiaries or the filing or amendment of any
certificate of designation with respect thereto.
7.14 Fiscal Year.
Neither the Company nor any of its Subsidiaries shall change its Fiscal
Year-end from December 31.
7.15 Parent Restrictions.
Notwithstanding anything to the contrary contained herein, the Parent
shall not (i) incur, directly or indirectly, any Indebtedness or any other
obligation or liability whatsoever other than the Indebtedness and obligations
under the Transaction Documents to which it is a party, (ii) create or suffer to
exist any Lien upon any property or assets now owned or hereafter acquired by it
other than the Liens created under the Collateral Documents to which it is a
party, (iii) engage in any business or activity or own any assets other than
holding the Capital Stock of the Company and performing its obligations under
the Transaction Documents; (iv) consolidate with or merge with or into, or
convey, transfer or lease all or substantially all its assets to, any Person;
(v) sell or otherwise dispose of any Capital Stock of any of its Subsidiaries;
(vi) create or acquire any Subsidiary or make or own any Investment in any
Person other than the Company; (vii) fail to hold itself out to the public as a
legal entity separate and distinct from any other Person; or (viii) issue or
sell any Capital Stock for cash unless all Equity Proceeds of such sale and
issuance are forthwith contributed to the Company and applied by the Company in
accordance with subsection 2.4B(iii).
7.16 Corporate Separateness.
The Company and its Subsidiaries on the one hand and the Parent on the
other hand shall (a) conduct their respective business solely in their own
respective names and through their own respective authorized officers and agents
so as not to mislead others as to their identity and all oral and written
communications, (b) abide by all corporate formalities and procedures (as
applicable) as required by this Agreement or the laws of their respective
jurisdictions of formation, including, without limitation, the maintenance of
current books and records, (c) not permit any of the financial statements of the
Company or any of its Subsidiaries or the Parent in any way to suggest that the
assets of the Company or any of its Subsidiaries are available to pay claims of
creditors of the Parent and shall ensure that the financial statements of the
Company and its Subsidiaries shall not be consolidated with the financial
statements of the Parent and that none of the assets of the Company and its
Subsidiaries will be consolidated or otherwise
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reflected on the financial statements of the Parent, (d) hold the Company or any
of its Subsidiaries out as having agreed to pay or become liable for the debts
or obligations of the Parent, (e) not operate or purport to operate as an
integrated, single economic unit with respect to each other and not seek or
obtain credit or incur any obligation to any third Person (other than
obligations under the Loan Documents and the Senior Subordinated Note Related
Documents) based upon the assets of the other, (f) not have any intercompany
claims between each other, (g) manage their own liabilities, obligations and
expenses separate and apart from the other and each shall provide for and pay
out of their own respective assets their own respective liabilities, obligations
and expenses, (h) maintain and continue to maintain an arm's length relationship
with the other, (i) keep correct and complete records, books of account,
financial statements, accounting records and bank accounts separate and apart
from those of the other, (j) not seek the dissolution or winding up in whole, or
in part, of the other, and (k) ensure that the funds and other assets of the
Parent will be identifiable and will not be commingled with those of the Company
or its Subsidiaries, and the assets and liabilities of the Parent shall and
shall continue to be readily distinguishable from the assets and liabilities of
the Company or its Subsidiaries. The foregoing provisions of this subsection
7.16 shall apply mutatis mutandi to the Company and the Subsidiary Guarantors on
the one hand and all Excluded Foreign Subsidiaries on the other hand.
7.17 Loaner Inventory.
The Company shall not, and shall not permit any of its Subsidiaries to,
loan any of their respective equipment or inventory to any Person other than a
member of its Related Subsidiary Group; provided that the Company and its
Subsidiaries may loan up to $2,500,000 of equipment and inventory (based on the
higher of cost and fair market value) to their respective customers for training
purposes in the ordinary course of business of the Company and its Subsidiaries
and in a manner consistent with past practices.
SECTION 8.
EVENTS OF DEFAULT
IF any of the following conditions or events ("Events of Default") shall
occur:
8.1 Failure to Make Payments When Due.
Failure by the Company to pay any installment of principal of any Loan
when due, whether at stated maturity, by acceleration, by notice of prepayment
or otherwise; failure by the Company to pay when due any amount payable to an
Issuing Bank in reimbursement of any drawing honored or payment made under a
Letter of Credit; or failure by the Company to pay any interest on any Loan or
any fee or any other amount due under this Agreement or any other Loan Document
within five (5) days after the date due; or
8.2 Default in Other Agreements.
(i) Failure of the Parent, the Company or any of its Subsidiaries to pay
when due (a) any principal of or interest on any Indebtedness (other than
Indebtedness referred to in subsection 8.1) in an individual principal amount of
$2,500,000 or more or any items of Indebtedness with an aggregate principal
amount of $5,000,000 or more or (b) any Contingent Obligation in an individual
principal amount of $2,500,000 or more or any Contingent Obligations with an
aggregate principal amount of $5,000,000 or more, in each case beyond the end of
any grace period provided therefor; or (ii) breach or default by the Company or
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any of its Subsidiaries with respect to any other term of (a) any evidence of
any Indebtedness in an individual principal amount of $2,500,000 or more or any
items of Indebtedness with an aggregate principal amount of $5,000,000 or more
or any Contingent Obligation in an individual principal amount of $2,500,000 or
more or any Contingent Obligations with an aggregate principal amount of
$5,000,000 or more or (b) any loan agreement, mortgage, indenture or other
agreement relating to such Indebtedness or Contingent Obligation(s), or the
occurrence of any other event, condition or circumstance in respect of any such
Indebtedness or Contingent Obligations if in any case under this clause (ii) the
effect of such breach or default or event, condition or circumstance is to
cause, or to permit the holder or holders of that Indebtedness or Contingent
Obligation(s) (or a trustee on behalf of such holder or holders) to cause, that
Indebtedness or Contingent Obligation(s) to become or be declared due and
payable (or redeemable) prior to its stated maturity or the stated maturity of
any underlying obligation, as the case may be (upon the giving or receiving of
notice, lapse of time, both, or otherwise); or
8.3 Breach of Certain Covenants.
Failure of any Loan Party to perform or comply with any term or condition
contained in subsection 2.4, 2.5, 6.1, 6.2, 6.12 or Section 7 of this Agreement;
or
8.4 Breach of Warranty.
Any representation, warranty, certification or other statement made by the
Parent, the Company or any of its Subsidiaries in any Loan Document or in any
statement or certificate at any time given by the Parent, the Company or any of
its Subsidiaries in writing pursuant hereto or thereto or in connection herewith
or therewith shall be false in any material respect on the date as of which
made; or
8.5 Other Defaults Under Loan Documents.
Any Loan Party shall default in the performance of or compliance with any
term contained in this Agreement or any of the other Loan Documents, other than
any such term referred to in any other subsection of this Section 8, and such
default shall not have been remedied or waived within thirty (30) days after the
occurrence of such default; or
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc.
(i) A court having jurisdiction in the premises shall enter a decree or
order for relief in respect of the Parent or the Company or any of their
respective Subsidiaries in an involuntary case under the Bankruptcy Code or
under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, which decree or order is not stayed; or any other similar
relief shall be granted under any applicable federal or state law; or (ii) an
involuntary case shall be commenced against the Parent or the Company or any of
their respective Subsidiaries under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect; or
a decree or order of a court having jurisdiction in the premises for the
appointment of a receiver, liquidator, sequestrator, trustee, custodian or other
officer having similar powers over the Parent or the Company or any of their
respective Subsidiaries, or over all or a substantial part of its property,
shall have been entered; or there shall have occurred the involuntary
appointment of an interim receiver, trustee or other custodian of the Parent or
the Company or any of its Subsidiaries for all or a substantial part of its
property; or a warrant of attachment, execution or similar process shall have
been issued against any substantial part of the property of the Parent or the
Company or any of their respective Subsidiaries, and any such event described in
this clause
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(ii) shall continue for sixty (60) days unless dismissed, bonded or discharged;
or
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc.
(i) the Parent or the Company or any of their respective Subsidiaries
shall have an order for relief entered with respect to it or commence a
voluntary case under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, or shall
consent to the entry of an order for relief in an involuntary case, or to the
conversion of an involuntary case to a voluntary case, under any such law, or
shall consent to the appointment of or taking possession by a receiver, trustee
or other custodian for all or a substantial part of its property; or the Parent
or the Company or any of their respective Subsidiaries shall make any assignment
for the benefit of creditors; or (ii) the Parent or the Company or any of their
respective Subsidiaries shall be unable, or shall fail generally, or shall admit
in writing its inability, to pay its debts as such debts become due; or the
Board of Directors of the Parent or the Company or any of their respective
Subsidiaries (or any committee thereof) shall adopt any resolution or otherwise
authorize any action to approve any of the actions referred to in clause (i)
above or this clause (ii); or
8.8 Judgments and Attachments.
Any money judgment, writ or warrant of attachment or similar process
involving (i) in any individual case an amount in excess of $2,000,000 or (ii)
in the aggregate at any time an amount in excess of $3,000,000 (in either case
not adequately covered by insurance as to which a solvent and unaffiliated
insurance the Company has acknowledged coverage) shall be entered or filed
against the Parent, the Company or any of its Subsidiaries or any of their
respective assets and shall remain undischarged, unvacated, unbonded or unstayed
for a period of thirty (30) days (or in any event later than five days prior to
the date of any proposed sale thereunder); or
8.9 Dissolution.
Any order, judgment or decree shall be entered against the Parent, the
Company or any of its Subsidiaries decreeing the dissolution or split up of the
Company or that Subsidiary and such order shall remain undischarged or unstayed
for a period in excess of thirty (30) days; or
8.10 Employee Benefit Plans.
There shall occur one or more of the following: (i) ERISA Events which
individually or in the aggregate results in or could reasonably be expected to
result in a Material Adverse Effect; (ii) there shall exist an Unfunded Current
Liability, individually or in the aggregate for all Pension Plans (excluding for
purposes of such computation any Pension Plans with respect to which there is no
Unfunded Current Liability), which will have or could reasonably be expected to
result in a Material Adverse Effect; (iii) the Company of one of its ERISA
Affiliates shall have engaged in a transaction which is prohibited under Section
4975 of the Code of Section 406 of ERISA which could result in the imposition of
a liability which would have a Material Adverse Effect on the Company or any of
its ERISA Affiliates; or (iv) the Company or any of its ERISA Affiliates shall
fail to pay when due an amount which shall have become liable to pay to the
PBGC, any Pension or a trust established under Title IV of ERISA; or
8.11 Change in Control.
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(i) Prior to the consummation of Public Offerings of common stock of the
Parent resulting in Equity Proceeds to the Parent (and capital contributions to
the Company) of at least $35,000,000, (a) AIP shall at any time not own, or
Alchemy shall not at any time control (directly or indirectly), in the
aggregate, at least 45% of the combined voting power of the Parent's voting
Securities; (b) a majority of the members of the Board of Directors of the
Parent shall not be Continuing Directors; or (c) any Person (other than
Alchemy), including a "group" (within the meaning of Sections 13(d) and 14(d)(2)
of the Exchange Act) which includes such Person, shall purchase or otherwise
acquire (or have the right to purchase or otherwise acquire), directly or
indirectly, beneficial ownership of Securities of the Parent (such person shall
be deemed to have "beneficial ownership" of all shares that any such person has
the right to purchase or otherwise acquire, whether such right is exercisable
immediately or only after the passage of time) and, as a result of such purchase
or acquisition (or such right to purchase or otherwise acquire), such Person
(together with its associates and Affiliates), shall directly or indirectly
beneficially own in the aggregate Securities representing more than 25% of the
combined voting power of the Parent's voting Securities; (ii) at any time
thereafter, (a) AIP shall own, or Alchemy shall control, directly or indirectly,
in the aggregate, a lesser percentage of the combined voting power of the
Parent's voting Securities than any other holder, including a "group" (within
the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) which includes
such holder, of such voting Securities; (b) a majority of the members of the
Board of Directors of the Parent shall not be Continuing Directors; or (c) any
Person (other than Alchemy), including a "group" (within the meaning of Sections
13(d) and 14(d)(2) of the Exchange Act) which includes such Person, shall
purchase or otherwise acquire (or have the right to purchase or otherwise
acquire), directly or indirectly, beneficial ownership of Securities of the
Parent and, as a result of such purchase or acquisition (or such right to
purchase or otherwise acquire), such Person (together with its associates and
Affiliates), shall directly or indirectly beneficially own in the aggregate
Securities representing more than 25% of the combined voting power of the
Parent's voting Securities (such person shall be deemed to have "beneficial
ownership" of all shares that any such person has the right to purchase or
otherwise acquire, whether such right is exercisable immediately or only after
the passage of time); or (iii) the Parent shall at any time fail to directly or
indirectly own and control 100% of all the issued and outstanding Capital Stock
of the Company (whether voting or non-voting, and whether common or preferred
stock, options or rights to acquire Capital Stock or otherwise); or
8.12 Invalidity of Guaranties.
At any time after the execution and delivery thereof, any Guaranty of the
Obligations of the Company for any reason, other than the satisfaction in full
of all Obligations, ceases to be in full force and effect or is declared to be
null and void, or any Loan Party denies in writing that it has any further
liability, including without limitation with respect to future advances by the
Lenders, under any Loan Document to which it is a party; or
8.13 Failure of Security.
Any Collateral Document shall, at any time, cease to be in full force and
effect (other than by reason of a release of Collateral thereunder in accordance
with the terms hereof or thereof, the satisfaction in full of the Obligations or
any other termination of such Collateral Document in accordance with the terms
hereof or thereof) or shall be declared null and void, or the validity or
enforceability thereof shall be contested in writing by any Loan Party, or the
Collateral Agent shall not have or shall cease to have a valid security interest
in any Collateral purported to be covered thereby, perfected and with the
priority required by the relevant Collateral Document, for any reason other than
the failure of the Collateral Agent, the Administrative Agent or any Lender to
take any action within its control, subject only to Liens permitted
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under the applicable Collateral Documents;
THEN (i) upon the occurrence of any Event of Default described in subsection 8.6
or 8.7, each of (a) the unpaid principal amount of and accrued interest on the
Loans, (b) an amount equal to the maximum amount that may at any time be drawn
under all Letters of Credit then outstanding (whether or not any beneficiary
under any such Letter of Credit shall have presented, or shall be entitled at
such time to present, the drafts or other documents or certificates required to
draw under such Letter of Credit) and (c) all other Obligations shall
automatically become immediately due and payable, without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by the Company, and the obligation of each Lender to make any Loan, the
obligation of the Issuing Bank to issue any Letter of Credit shall thereupon
terminate, and (ii) upon the occurrence and during the continuation of any other
Event of Default, the Administrative Agent shall, upon the written request of
the Requisite Lenders, by written notice to the Company, declare all or any
portion of the amounts described in clauses (a) through (c) above to be, and the
same shall forthwith become, immediately due and payable, and the obligation of
each Lender to make any Loan and the obligation of the Issuing Bank to issue any
Letter of Credit shall thereupon terminate; provided that the foregoing shall
not affect in any way the obligations of the Lenders under subsection 3.3C(i).
Any amounts described in clause (i)(b) above, when received by the
Administrative Agent or the Collateral Agent, shall be held by the Collateral
Agent pursuant to the terms of the Collateral Account Agreement and shall be
applied as therein provided.
Notwithstanding anything contained in the second preceding paragraph, if
at any time within sixty (60) days after an acceleration of the Loans pursuant
to such paragraph the Company shall pay all arrears of interest and all payments
on account of principal which shall have become due otherwise than as a result
of such acceleration (with interest on principal and, to the extent permitted by
law, on overdue interest, at the rates specified in this Agreement) and all
Defaults and Events of Default (other than non-payment of the principal of and
accrued interest on the Loans, in each case which is due and payable solely by
virtue of acceleration) shall be remedied or waived pursuant to subsection 10.6,
then the Requisite Lenders, by written notice to the Company, may at their
option rescind and annul such acceleration and its consequences; but such action
shall not affect any subsequent Default or Event of Default or impair any right
consequent thereon. The provisions of this paragraph are intended merely to bind
the Lenders to a decision which may be made at the election of the Requisite
Lenders and are not intended to benefit the Company and do not grant the Company
the right to require the Lenders to rescind or annul any acceleration hereunder
or preclude the Agents or the Lenders from exercising any of the rights or
remedies available to them under any of the Loan Documents, even if the
conditions set forth in this paragraph are met.
SECTION 9.
AGENTS
9.1 Appointment.
A. CSFB is hereby appointed the Administrative Agent hereunder and under
the other Loan Documents. DLJ Capital is hereby appointed the Syndication Agent
hereunder and under the Loan Documents. CSFB is hereby appointed the Collateral
Agent hereunder and under the Collateral Documents. CSFB and DLJ Securities are
hereby appointed the Arrangers hereunder and under the Loan Documents. Each
Lender hereby authorizes each Agent to act as its agent in accordance with the
terms of
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this Agreement and the other Loan Documents. Each Agent agrees to act upon the
express conditions contained in this Agreement and the other Loan Documents, as
applicable. The provisions of this Section 9 are solely for the benefit of the
Agents and the Lenders and the Company shall have no rights as a third party
beneficiary of any of the provisions thereof. In performing its functions and
duties under this Agreement, each Agent shall act solely as an agent of the
Lenders and does not assume and shall not be deemed to have assumed any
obligation towards or relationship of agency or trust with or for the Company or
any of its Subsidiaries. Upon the conclusion of the Initial Period, all
obligations of the Arrangers hereunder shall terminate and thereafter, the
Arrangers shall have no obligations or liabilities under any of the Loan
Documents.
B. Appointment of Supplemental Collateral Agents. It is the purpose of
this Agreement and the other Loan Documents that there shall be no violation of
any law of any jurisdiction denying or restricting the right of banking
corporations or associations to transact business as agent or trustee in such
jurisdiction. It is recognized that in case of litigation under this Agreement
or any of the other Loan Documents, and in particular in case of the enforcement
of any of the Loan Documents, or in case the Administrative Agent or the
Collateral Agent deems that by reason of any present or future law of any
jurisdiction the Administrative Agent or the Collateral Agent may not exercise
any of the rights, powers or remedies granted herein or in any of the other Loan
Documents or take any other action which may be desirable or necessary in
connection therewith, it may be necessary that the Administrative Agent or the
Collateral Agent appoint an additional individual or institution as a separate
trustee, co-trustee, collateral agent or collateral co-agent (any such
additional individual or institution being referred to herein individually as a
"Supplemental Collateral Agent" and collectively as "Supplemental Collateral
Agents").
In the event that the Administrative Agent or the Collateral Agent
appoints a Supplemental Collateral Agent with respect to any Collateral, (i)
each and every right, power, privilege or duty expressed or intended by this
Agreement or any of the other Loan Documents to be exercised by or vested in or
conveyed to the Administrative Agent or the Collateral Agent with respect to
such Collateral shall be exercisable by and vest in such Supplemental Collateral
Agent to the extent, and only to the extent, necessary to enable such
Supplemental Collateral Agent to exercise such rights, powers and privileges
with respect to such Collateral and to perform such duties with respect to such
Collateral, and every covenant and obligation contained in the Loan Documents
and necessary to the exercise or performance thereof by such Supplemental
Collateral Agent shall run to and be enforceable by either the Administrative
Agent or the Collateral Agent or such Supplemental Collateral Agent, and (ii)
the provisions of this Section 9 and of subsections 10.2 and 10.3 that refer to
the Administrative Agent or the Collateral Agent shall inure to the benefit of
such Supplemental Collateral Agent and all references therein to the
Administrative Agent or the Collateral Agent shall be deemed to be references to
the Administrative Agent or the Collateral Agent and/or such Supplemental
Collateral Agent, as the context may require.
Should any instrument in writing from the Company or any other Loan Party
be required by any Supplemental Collateral Agent so appointed by the
Administrative Agent or the Collateral Agent for more fully and certainly
vesting in and confirming to him or it such rights, powers, privileges and
duties, the Company shall, or shall cause such Loan Party to, execute,
acknowledge and deliver any and all such instruments promptly upon request by
the Administrative Agent or the Collateral Agent. In case any Supplemental
Collateral Agent, or a successor thereto, shall die, become incapable of acting,
resign or be removed, all the rights, powers, privileges and duties of such
Supplemental Collateral Agent, to the extent permitted by law, shall vest in and
be exercised by the Administrative Agent or the Collateral Agent until the
appointment of a new Supplemental Collateral Agent.
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9.2 Powers; General Immunity.
A. Duties Specified. Each Lender irrevocably authorizes each Agent to take
such action on such Lender's behalf and to exercise such powers hereunder and
under the other Loan Documents as are specifically delegated to such Agent by
the terms hereof and thereof, together with such powers as are reasonably
incidental thereto. Each Agent shall have only those duties and responsibilities
that are expressly specified in this Agreement and the other Loan Documents and
it may perform such duties by or through its agents or employees. No Agent shall
have, by reason of this Agreement or any of the other Loan Documents, a
fiduciary relationship in respect of any Lender; and nothing in this Agreement
or any of the other Loan Documents, expressed or implied, is intended to or
shall be so construed as to impose upon any Agent any obligations in respect of
this Agreement or any of the other Loan Documents except as expressly set forth
herein or therein.
B. No Responsibility for Certain Matters. No Agent shall be responsible to
any Lender for the execution, effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement or any other
Loan Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statement or in any
financial or other statements, instruments, reports or certificates or any other
documents furnished by any Agent to the Lenders or by or on behalf of the
Company and/or its Subsidiaries to any Agent or any Lender in connection with
the Loan Documents and the transactions contemplated thereby or for the
financial condition or business affairs of the Company or any other Person
liable for the payment of any Obligations, nor shall any Agent be required to
ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained in any of the Loan
Documents or as to the use of the proceeds of the Loans or the use of the
Letters of Credit or as to the existence or possible existence of any Default or
Event of Default. Anything contained in this Agreement to the contrary
notwithstanding, the Administrative Agent shall not have any liability arising
from confirmations of the amount of outstanding Loans or the Total Utilization
of Revolving Loan Commitments or the component amounts thereof.
C. Exculpatory Provisions. Neither any Agent nor any of such Agent's
respective officers, directors, employees or agents shall be liable to the
Lenders for any action taken or omitted by such Agent under or in connection
with any of the Loan Documents except to the extent caused by such Agent's gross
negligence or willful misconduct. If any Agent shall request instructions from
the Lenders with respect to any act or action (including the failure to take an
action) in connection with this Agreement or any of the other Loan Documents,
such Agent shall be entitled to refrain from such act or taking such action
unless and until such Agent shall have received instructions from the Requisite
Lenders (or such other Lenders as may be required to give such instructions
under subsection 10.6). Without prejudice to the generality of the foregoing,
(i) such Agent shall be entitled to rely, and shall be fully protected in
relying, upon any communication, instrument or document believed by it to be
genuine and correct and to have been signed or sent by the proper person or
persons, and shall be entitled to rely and shall be protected in relying on
opinions and judgments of attorneys (who may be attorneys for the Company and
its Subsidiaries), accountants, experts and other professional advisors selected
by it; and (ii) no Lender shall have any right of action whatsoever against such
Agent as a result of such Agent acting or (where so instructed) refraining from
acting under this Agreement or any of the other Loan Documents in accordance
with the instructions of the Requisite Lenders (or such other Lenders as may be
required to give such instructions under subsection 10.6). Such Agent shall be
entitled to refrain from exercising any power, discretion or authority vested in
it under this Agreement or any of the other Loan Documents unless and until it
has obtained the instructions of the Requisite Lenders (or such other Lenders as
may be required to give such
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instructions under subsection 10.6).
D. Agents Entitled to Act as the Lender. The agency hereby created shall
in no way impair or affect any of the rights and powers of, or impose any duties
or obligations upon, any Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the Loans and the Letters of Credit, each
Agent shall have the same rights and powers hereunder as any other Lender and
may exercise the same as though it were not performing the duties and functions
delegated to it hereunder, and the term "Lender" or "Lenders" or any similar
term shall, unless the context clearly otherwise indicates, include such Agent
in its individual capacity. Each Agent and its Affiliates may accept deposits
from, lend money to and generally engage in any kind of banking, trust,
financial advisory or other business with the Company or any of its Affiliates
as if it were not performing the duties specified herein, and may accept fees
and other consideration from the Company and/or its Subsidiaries for services in
connection with this Agreement and otherwise without having to account for the
same to the Lenders.
9.3 Representations and Warranties; No Responsibility For Appraisal of
Creditworthiness.
Each Lender represents and warrants that it has made its own independent
investigation of the financial condition and affairs of the Company and its
Subsidiaries in connection with the making of the Loans and the issuance of
Letters of Credit hereunder and that it has made and shall continue to make its
own appraisal of the creditworthiness of the Company and its Subsidiaries. No
Agent shall have any duty or responsibility, either initially or on a continuing
basis, to make any such investigation or any such appraisal on behalf of the
Lenders or, except as expressly provided elsewhere in this Agreement to provide
any Lender with any credit or other information with respect thereto, whether
coming into its possession before the making of the Loans or at any time or
times thereafter, and no Agent shall have any responsibility with respect to the
accuracy of or the completeness of any information provided to the lenders.
9.4 Right to Indemnity.
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify each Agent, to the extent that such Agent shall not have been
reimbursed by the Company, for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including, without limitation, reasonable counsel fees and disbursements) or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by or asserted against such Agent in performing its duties hereunder or under
the other Loan Documents or otherwise in its capacity as such Agent in any way
relating to or arising out of this Agreement or the other Loan Documents;
provided that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from such Agent's gross negligence or
willful misconduct. If any indemnity furnished to any Agent for any purpose
shall, in the opinion of such Agent, be insufficient or become impaired, such
Agent may call for additional indemnity and cease, or not commence, to do the
acts indemnified against until such additional indemnity is furnished.
9.5 Successor Administrative Agent and Swing Line Lender.
A. Successor Administrative Agent. The Administrative Agent may resign at
any time by giving thirty (30) days' prior written notice thereof to the Lenders
and the Company and shall so resign upon the written request of the Company,
provided, that the Company shall have the right to request such resignation of
the Administrative Agent only so long as (i) CSFB is then the Administrative
Agent and the
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Commitments of CSFB as Lender shall equal an amount less than 5% of the
aggregate Commitment of all Lenders, (ii) no Default or Event of Default shall
have occurred and be continuing, and (iii) Alchemy shall have directed the
Company to make such request and Alchemy shall own or control at least 51% of
the combined voting power of the voting Securities of each the Company, each
Holding Company, ESP and ENR. Upon any such notice of resignation, the Requisite
Lenders shall have the right, upon five (5) Business Days' notice to the
Company, to appoint a successor Administrative Agent. Upon the acceptance of any
appointment as the Administrative Agent hereunder by a successor Administrative
Agent, that successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring the
Administrative Agent and the retiring the Administrative Agent shall be
discharged from its duties and obligations under this Agreement. After any
retiring the Administrative Agent's resignation hereunder as the Administrative
Agent, the provisions of this Section 9 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was the Administrative Agent
under this Agreement.
B. Successor Swing Line Lender. Any resignation of the Administrative
Agent pursuant to subsection 9.5A shall also constitute the resignation of CSFB
or its successor as the Swing Line Lender, and any successor Administrative
Agent appointed pursuant to subsection 9.5A shall, upon its acceptance of such
appointment, become the successor Swing Line Lender for all purposes hereunder.
In such event (i) the Company shall prepay any outstanding Swing Line Loans made
by the retiring Administrative Agent in its capacity as Swing Line Lender, (ii)
upon such prepayment, the retiring Administrative Agent and Swing Line Lender
shall surrender the Swing Line Note held by it to the Company for cancellation,
and (iii) the Company shall issue a new Swing Line Note to the successor
Administrative Agent and Swing Line Lender substantially in the form of Exhibit
V-B annexed hereto, in the principal amount of the Swing Line Loan Commitment
then in effect and with other appropriate insertions.
9.6 Collateral Documents; Successor Collateral Agent.
Each Lender hereby further authorizes the Collateral Agent to enter into
each Collateral Document as secured party on behalf of and for the benefit of
the Lenders and the other beneficiaries named therein and agrees to be bound by
the terms of each Collateral Document; provided that the Collateral Agent shall
not enter into or consent to any amendment, modification, termination or waiver
of any provision contained in any Collateral Document without the prior consent
of the Requisite Lenders (or, if required pursuant to subsection 10.6, all the
Lenders); provided further, however, that, without further written consent or
authorization from any Lender, the Collateral Agent may execute any documents or
instruments necessary to effect the release of any asset constituting Collateral
from the Lien of the applicable Collateral Document in the event that such asset
is sold or otherwise disposed of in a transaction effected in accordance with
subsection 7.7(iv), 7.7(v), 7.7(vi) or 7.7(vii) or to the extent otherwise
required by any Collateral Document. Anything contained in any of the Loan
Documents to the contrary notwithstanding, each Lender agrees that no Lender
shall have any right individually to realize upon any of the Collateral under
any Collateral Document (including without limitation through the exercise of a
right of set-off against call deposits of such Lender in which any funds on
deposit in the Collateral Account may from time to time be invested), it being
understood and agreed that all rights and remedies under the Collateral
Documents may be exercised solely by the Collateral Agent for the benefit of the
Lenders and the other beneficiaries named therein in accordance with the terms
thereof. The Collateral Agent may resign at any time, and a successor Collateral
Agent may be appointed, in accordance with subsection 9.5 as if such subsection
9.5 applied to the Collateral Agent in lieu of the Administrative Agent.
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SECTION 10.
MISCELLANEOUS
10.1 Assignments and Participations in Loans, Letters of Credit.
A. General. Subject to subsection 10.1B or 10.1C, as applicable, each
Lender shall have the right at any time to (i) sell, assign, transfer or
negotiate to any Eligible Assignee, or (ii) sell participations to any Person
in, all or any part of its Commitments (together with its Letters of Credit or
participations therein made or arising pursuant to its Revolving Loan
Commitment) or any Loan or Loans made by it or any other interest herein or in
any other Obligations owed to it; provided that no such sale, assignment,
transfer or participation shall, without the consent of the Company, require the
Company to file a registration statement with the Securities and Exchange
Commission or apply to qualify such sale, assignment, transfer or participation
under the securities laws of any state; provided further that no such sale,
assignment or transfer described in clause (i) above shall be effective unless
and until an Assignment Agreement effecting such sale, assignment or transfer
shall have been accepted by the Administrative Agent and recorded in the
Register as provided in subsection 10.1B(ii); provided, further that no such
sale, assignment, transfer or participation of any Letter of Credit or any
participation therein may be made separately from a sale, assignment, transfer
or participation of a corresponding interest in the Revolving Loan Commitment
and the Revolving Loans of the Lender effecting such sale, assignment, transfer
or participation. Except as otherwise provided in this subsection 10.1, no
Lender shall, as between the Company and such Lender, be relieved of any of its
obligations hereunder as a result of any sale, assignment, transfer or
negotiation of, or any granting of participations in, all or any part of its
Commitments or the Loans, the Letters of Credit or participations therein or the
other Obligations owed to such Lender.
B. Assignments.
(i) Amounts and Terms of Assignments. Each Commitment, Loan, Letter
of Credit, or participation therein or other Obligation may (a) be
assigned in any amount to another Lender who is a Non-Defaulting Lender,
or to an Approved Fund or an Affiliate of the assigning Lender or another
Lender who, in either such case, is a Non-Defaulting Lender, with the
giving of notice to the Company and the Administrative Agent or (b) be
assigned in an aggregate amount of not less than $5,000,000 (or such
lesser amount as shall constitute the aggregate amount of the Commitments,
Loans, Letters of Credit, and participations therein and other Obligations
of the assigning Lender) to any other Eligible Assignee with the consent
of the Administrative Agent (such consent not to be unreasonably withheld)
and, so long as no Default or Event of Default shall have occurred and be
continuing, following consultation with the Company. To the extent of any
such assignment in accordance with either clause (a) or (b) above, the
assigning Lender shall be relieved of its obligations with respect to its
Commitments, Loans, Letters of Credit, or participations therein or other
Obligations or the portion thereof so assigned. The parties to each such
assignment shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register, an Assignment Agreement,
together with a processing fee of $3,500 payable by the assigning Lender,
such certificates, documents or other evidence, if any, with respect to
United States federal income tax withholding matters as the assignee under
such Assignment Agreement may be required to deliver to the Administrative
Agent pursuant to subsection 2.7B(iii)(a) and, if requested by the
Administrative Agent, a completed administrative questionnaire in the
Administrative Agent's customary form with respect to the assignee under
such Assignment Agreement. Upon such execution, delivery, acceptance and
recordation, from
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and after the effective date specified in such Assignment Agreement, (y)
the assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment Agreement, shall have the rights and obligations of a Lender
hereunder and (z) the assigning Lender thereunder shall, to the extent
that rights and obligations hereunder have been assigned by it pursuant to
such Assignment Agreement, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an Assignment
Agreement covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be
a party hereto); provided that, anything contained in any of the Loan
Documents to the contrary notwithstanding, if such Lender is the Issuing
Bank such Lender shall continue to have all rights and obligations of the
Issuing Bank with respect to outstanding Letters of Credit until the
cancellation or expiration of such Letters of Credit and the reimbursement
of any amounts drawn thereunder. The Commitments hereunder shall be
modified to reflect the Commitments of such assignee and any remaining
Commitments of such assigning Lender and, if any such assignment occurs
after the issuance of the Notes hereunder, the assigning Lender shall
surrender its applicable Notes and, upon such surrender, new Notes shall
be issued to the assignee and, if applicable, to the assigning Lender,
substantially in the form of Exhibit IV-A or B or Exhibit V-A annexed
hereto, as the case may be, with appropriate insertions, to reflect the
new Commitments and/or outstanding Term Loans of the assignee and the
assigning Lender.
(ii) Acceptance by the Administrative Agent; Recordation in
Register. Upon its receipt of an Assignment Agreement executed by an
assigning Lender and an assignee representing that it is an Eligible
Assignee, together with the processing fee referred to in subsection
10.1B(i) and any certificates, documents or other evidence with respect to
United States federal income tax withholding matters that such assignee
may be required to deliver to the Administrative Agent pursuant to
subsection 2.7B(iii), the Administrative Agent shall, if such Assignment
Agreement has been completed and is in substantially the form of Exhibit
XII hereto and if the Administrative Agent has consented to the assignment
evidenced thereby (to the extent such consent is required pursuant to
subsection 10.1B(i)), (a) accept such Assignment Agreement by executing a
counterpart thereof as provided therein (which acceptance shall evidence
any required consent of the Administrative Agent to such assignment), (b)
record the information contained therein in the Register, and (c) give
prompt notice thereof to the Company. The Administrative Agent shall
maintain a copy of each Assignment Agreement delivered to and accepted by
it as provided in this subsection 10.1B(ii).
C. Participations. The holder of any participation, other than an
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except action
(i) effecting the extension of the final maturity of the Loan allocated to such
participation, (ii) effecting a reduction of the principal amount of or
affecting the rate of interest payable on any Loan or any fee allocated to such
participation, (iii) releasing all or substantially all of the Collateral, or
(iv) releasing all or substantially all of the Guarantors from their obligations
under the Guaranties, and all amounts payable by the Company hereunder. The
Company and each Lender hereby acknowledge and agree that, solely for purposes
of subsections 2.6D, 2.7, 3.6, 10.2, 10.3, 10.4 and 10.5, (a) any participation
will give rise to a direct obligation of the Company to the participant and (b)
the participant shall be considered to be a "Lender"; provided that the
aggregate amount payable to a Lender and its participants pursuant to
subsections 2.6D, 2.7, 3.6, 10.2 and 10.3 shall not exceed the amount that would
have been payable to such Lender as if such Lender had not sold such
participation.
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D. Assignments to Federal Reserve Banks. In addition to the assignments
and participations permitted under the foregoing provisions of this subsection
10.1, any Lender may assign and pledge all or any portion of its Loans, the
other Obligations owed to such Lender and its Notes to any Federal Reserve Bank
as collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any operating circular issued by such Federal Reserve
Bank; provided that (i) no Lender shall, as between the Company and such Lender,
be relieved of any of its obligations hereunder as a result of any such
assignment and pledge and (ii) in no event shall such Federal Reserve Bank be
considered to be a "Lender" or be entitled to require the assigning Lender to
take or omit to take any action hereunder.
E. Information. Each Lender may furnish any information concerning the
Company and its Subsidiaries in the possession of that Lender from time to time
to assignees and participants (including prospective assignees and
participants), subject to subsection 10.20.
F. Limitation. No assignee, participant or other transferee or any
Lender's rights shall be entitled to receive any greater payment under
subsection 2.7 than such Lender would have been entitled to receive with respect
to the rights transferred, unless such transfer is made with the Company's prior
written consent or at a time when the circumstances giving rise to such greater
payment did not exist.
10.2 Expenses.
Whether or not the transactions contemplated hereby shall be consummated,
the Company agrees to pay promptly (i) all the actual and reasonable costs and
out of pocket expenses of the Agents in connection with the preparation of the
Loan Documents; (ii) all the actual and reasonable costs of furnishing all
opinions by counsel for the Company (including without limitation any opinions
requested by the Lenders or Agents as to any legal matters arising hereunder)
and of the Company's performance of and compliance with all agreements and
conditions on its part to be performed or complied with under this Agreement and
the other Loan Documents including, without limitation, with respect to
confirming compliance with environmental and insurance requirements; (iii) the
reasonable fees, expenses and disbursements of counsel to the Agents (including
allocated costs of internal counsel) in connection with the negotiation,
preparation, execution and administration of the Loan Documents and the Loans
and any consents, amendments, waivers or other modifications hereto or thereto
and any other documents or matters requested by the Company; (iv) all other
actual and reasonable costs and expenses incurred by the Agents in connection
with the negotiation, preparation and execution of the Loan Documents and the
transactions contemplated hereby and thereby; and (v) after the occurrence of a
Default or Event of Default, all the respective costs and expenses, including
reasonable attorneys' fees (including allocated costs of internal counsel) and
costs of settlement, incurred by the Agents and the Lenders in enforcing any
Obligations of or in collecting any payments due from the Company hereunder or
under the other Loan Documents by reason of such Default or Event of Default or
in connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a "work-out" or pursuant to any
insolvency or bankruptcy proceedings.
10.3 Indemnity.
In addition to the payment of expenses pursuant to subsection 10.2,
whether or not the transactions contemplated hereby shall be consummated, the
Company agrees to defend, indemnify, pay and hold harmless the Agents and the
Lenders, and the officers, directors, employees, agents, attorneys and
affiliates of the Agents and the Lenders (collectively called the "Indemnitees")
from and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs,
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expenses and disbursements of any kind or nature whatsoever (including without
limitation the reasonable fees and disbursements of counsel for such
Indemnitees, and all such fees and disbursements, as well as other costs and
expenses, incurred by Indemnitees in connection with any investigative,
administrative or judicial proceeding commenced or threatened by any Person,
whether or not any such Indemnitee shall be designated as a party or a potential
party thereto), whether direct, indirect or consequential and whether based on
any federal, state or foreign laws, statutes, rules or regulations (including
without limitation securities and commercial laws, statutes, rules or
regulations and Environmental Laws), on common law or equitable cause or on
contract or otherwise, that may be imposed on, incurred by, or asserted against
any such Indemnitee, in any manner relating to or arising out of this Agreement
or the other Loan Documents or the transactions contemplated hereby or thereby
(including without limitation the Lenders' agreement to make the Loans hereunder
or the use or intended use of the proceeds of any of the Loans or the issuance
of Letters of Credit hereunder or the use or intended use of any of the Letters
of Credit) or any Environmental Liabilities that arise from or relate to the
management, use, control, ownership, occupancy or operation of any Facility or
assets of any Loan Party or its subsidiaries (including without limitation, all
on-site and off-site activities involving Hazardous Materials), or the Release
or threatened Release of any Hazardous Materials (or allegations of the same) on
or from any of the Facilities or on or from any other property where Hazardous
Materials are or were (or are or were alleged to be) Released or threatened to
be Released in connection with any of the Facilities or the business of any of
the Loan Parties, their subsidiaries, or any predecessor in interest to the Loan
Parties or their subsidiaries (collectively called the "Indemnified
Liabilities"); provided that the Company shall not have any obligation to any
Indemnitee hereunder with respect to any Indemnified Liabilities to the extent,
and only to the extent, of any particular liability, obligation, loss, damage,
penalty, claim, cost, expense or disbursement that arose from the gross
negligence or willful misconduct of that Indemnitee as determined by a final
judgment of a court of competent jurisdiction. To the extent that the
undertaking to defend, indemnify, pay and hold harmless set forth in the
preceding sentence may be unenforceable because it is violative of any law or
public policy, the Company shall contribute the maximum portion that it is
permitted to pay and satisfy under applicable law to the payment and
satisfaction of all Indemnified Liabilities incurred by the Indemnitees or any
of them.
10.4 Set-Off; Security Interest in Deposit Accounts.
In addition to any rights now or hereafter granted under applicable law
and not by way of limitation of any such rights, upon the occurrence and during
the continuance of any Event of Default, each Lender is hereby authorized by the
Company at any time or from time to time, without notice to the Company or to
any other Person, any such notice being hereby expressly waived, to set off and
to appropriate and to apply any and all deposits (general or special, including,
but not limited to, Indebtedness evidenced by certificates of deposit, whether
matured or unmatured, but not including trust accounts) and any other
Indebtedness at any time held or owing by that Lender (at any office of that
Lender wherever located) to or for the credit or the account of the Company
against and on account of the obligations and liabilities of the Company to that
Lender under this Agreement, the Notes, the Letters of Credit and participations
therein, including, but not limited to, all claims of any nature or description
arising out of or connected with this Agreement, the Notes, the Letters of
Credit and participations therein or any other Loan Document, irrespective of
whether or not (i) that Lender shall have made any demand hereunder or (ii) the
principal of or the interest on the Loans or any amounts in respect of the
Letters of Credit or any other amounts due hereunder shall have become due and
payable pursuant to Section 8 and although said obligations and liabilities, or
any of them, may be contingent or unmatured. The Company hereby further grants
to the Administrative Agent and each Lender a security interest in all deposits
and accounts maintained with the Administrative Agent or such Lender as security
for the Obligations.
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10.5 Ratable Sharing.
The Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment (other than a voluntary prepayment of Loans made
and applied in accordance with the terms of this Agreement), by realization upon
security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Loan
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, amounts payable in
respect of Letters of Credit, fees and other amounts then due and owing to that
Lender hereunder or under the other Loan Documents (collectively, the "Aggregate
Amounts Due" to such Lender) which is greater than the proportion received by
any other Lender in respect of the Aggregate Amounts Due to such other Lender,
then the Lender receiving such proportionately greater payment shall (i) notify
the Administrative Agent and each other Lender of the receipt of such payment
and (ii) apply a portion of such payment to purchase participations (which it
shall be deemed to have purchased from each seller of a participation
simultaneously upon the receipt by such seller of its portion of such payment)
in the Aggregate Amounts Due to the other Lenders so that all such recoveries of
Aggregate Amounts Due shall be shared by all the Lenders in proportion to the
Aggregate Amounts Due to them; provided that if all or part of such
proportionately greater payment received by such purchasing the Lender is
thereafter recovered from such Lender upon the bankruptcy, reorganization or
insolvency proceeding of the Company or otherwise, those purchases shall be
rescinded and the purchase prices paid for such participations shall be returned
to such purchasing Lender ratably to the extent of such recovery, but without
interest. The Company expressly consents to the foregoing arrangement and agrees
that any holder of a participation so purchased may exercise any and all rights
of banker's lien, set-off or counterclaim with respect to any and all monies
owing by the Company to that holder with respect thereto as fully as if that
holder were owed the amount of the participation held by that holder.
10.6 Amendments and Waivers.
A. No amendment, modification, termination or waiver of any provision of
this Agreement or of the Notes, or consent to any departure by the Company or
any other Loan Party therefrom, shall in any event be effective without the
written concurrence of the Requisite Lenders; provided that any such amendment,
modification, termination, waiver or consent which: (a) reduces the principal
amount of any of the Loans; (b) reduces the percentage specified in the
definition of the "Requisite Lenders" (it being understood that, with the
consent of the Requisite Lenders, additional extensions of credit pursuant to
this Agreement may be included in the definition of the "Requisite Lenders" on
substantially the same basis as the Term A Loans, Term A Loan Commitments, Term
B Loans, Term B Loan Commitments, Revolving Loans and Revolving Loan Commitments
are included on the Closing Date); (c) changes in any manner any provision of
this Agreement which, by its terms, expressly requires the approval or
concurrence of all the Lenders; (d) postpones the scheduled final maturity date
of any of the Loans; (e) postpones the date or reduces the amount of any
scheduled payment (but not prepayment) of principal of any of the Loans or of
any scheduled reduction of the Revolving Credit Commitments; (f) postpones the
date on which any interest or any fees are payable; (g) decreases the interest
rate borne by any of the Loans (other than any waiver of any increase in the
interest rate applicable to any of the Loans pursuant to subsection 2.2E) or the
amount of any fees payable hereunder; (h) increases the maximum duration of
Interest Periods permitted hereunder; (i) releases all or substantially all of
the Collateral; (j) except as required by any Guaranty, releases any of the
Guarantors from their obligations under the Guaranties; (k) reduces the amount
or postpones the due date of any amount payable in respect of, or extends the
required expiration
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date of, any Letter of Credit; (l) changes the obligations of the Lenders
relating to the purchase of participations in Letters of Credit in any manner
that could be adverse to any Issuing Bank; or (m) changes in any manner the
provisions contained in subsection 8.1 or this subsection 10.6; shall be
effective only if evidenced by a writing signed by or on behalf of all the
Lenders to whom Obligations are owed or who have Commitments outstanding being
directly affected by such amendment, modification, termination, waiver or
consent; provided further that no such amendment, modification, termination or
waiver of any such provision of any Collateral Document having the effect of
securing thereunder additional Indebtedness (other than Indebtedness comprising
Obligations and Hedge Agreements) by the Collateral shall be effective without
the written concurrence of Lenders having or holding more than 66-2/3% of the
sum of the aggregate Tranche A Term Loan Exposure of all Lenders plus the
aggregate Tranche B Term Loan Exposure of all Lenders plus the aggregate
Revolving Loan Exposure of all Lenders. In addition, (i) any amendment,
modification, termination or waiver of any of the provisions contained in
Section 4 shall be effective only if evidenced by a writing signed by or on
behalf of the Administrative Agent and the Requisite Lenders, (ii) no amendment,
modification, termination or waiver of any provision of any Note shall be
effective without the written concurrence of the Lender which is the holder of
that Note, (iii) no increase in the Commitments of any Lender over the amount
thereof then in effect shall be effective without the written concurrence of
that Lender, it being understood and agreed that in no event shall waivers or
modifications of conditions precedent, covenants, Defaults, Events of Default or
of a mandatory prepayment or a reduction of any or all of the Commitments be
deemed to constitute an increase of the Commitment of any Lender and that an
increase in the available portion of any Commitment of any Lender shall not be
deemed to constitute an increase in the Commitment of such Lender, (iv) no
amendment, modification, termination or waiver of any provision of subsection
2.1A(iv) or any other provision of this Agreement relating to the Swing Line
Loan Commitment or the Swing Line Loans shall be effective without the written
concurrence of the Swing Line Lender, (v) no amendment, modification,
termination or waiver of any provision of Section 3 relating to the rights or
obligations of the Issuing Bank shall be effective without the written
concurrence of the Issuing Bank with respect to any Letter of Credit then
outstanding, and (vi) no amendment, modification, termination or waiver of any
provision of Section 9 or of any other provision of this Agreement which, by its
terms, expressly requires the approval or concurrence of the Administrative
Agent shall be effective without the written concurrence of the Administrative
Agent. The Administrative Agent may, but shall have no obligation to, with the
concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of that Lender and no amendment, modification, termination or
waiver of any provision of subsection 2.4 which has the effect of changing any
voluntary or mandatory prepayments or Commitment reductions applicable to any
Class (the "Affected Class") in a manner that disproportionately disadvantages
such Class relative to the other Class shall be effective without the written
concurrence of the Requisite Class Lenders of the Affected Class (it being
understood and agreed that any amendment, modification, termination or waiver of
any such provision which only postpones or reduces any voluntary or mandatory
prepayment or Commitment reduction from those set forth in subsection 2.4 with
respect to one Class but not the other Classes shall be deemed to
disproportionately disadvantage such one Class but not to disproportionately
disadvantage such other Classes for purposes of this clause). Any waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which it was given. No notice to or demand on the Company in any
case shall entitle the Company to any other or further notice or demand in
similar or other circumstances. Any amendment, modification, termination, waiver
or consent effected in accordance with this subsection 10.6 shall be binding
upon each Lender at the time outstanding, each future Lender and, if signed by
the Company, on the Company. Prior to or simultaneously with any request for any
amendment, waiver or other modification of subsection 7.6D that arises out of
the Company's or any of its Subsidiaries' making a bid for, or entering into, a
State Contract, the Company shall deliver to each Lender a reasonably detailed
summary of the material terms of such bid or contract.
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B. If, in connection with any proposed change, waiver, discharge or
termination to any of the provision of this Agreement as contemplated by the
proviso in the first sentence of this subsection 10.6, the consent of the
Requisite Lenders is obtained but consent of one or more of such other Lenders
whose consent is required is not obtained, then, so long as no Default shall
have occurred and be continuing, the Company may, so long as all non-consenting
Lenders are so treated, elect to terminate such Lender as a party to this
Agreement; provided that, concurrently with such termination, (i) the Company
shall pay that Lender all principal, interest and fees and other amounts due to
be paid to such Lender with respect to all periods through such date of
termination, (ii) another bank, financial institution or other entity
satisfactory to the Company and the Administrative Agent (or if the
Administrative Agent is also a Lender to be terminated, the successor
Administrative Agent) shall agree, as of such date, to become a Lender for all
purposes under this Agreement (whether by assignment or amendment) and to assume
all obligations of the Lender to be terminated as of such date, and (iii) all
documents and supporting materials necessary, in the judgment of the
Administrative Agent (or if the Administrative Agent is also a Lender to be
terminated, the successor Administrative Agent) to evidence the substitution of
such Lender shall have been received and approved by the Administrative Agent as
of such date.
10.7 Independence of Covenants.
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another such covenant shall not avoid the occurrence of an
Default or Event of Default if such action is taken or condition exists.
10.8 Notices.
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telecopied, telexed or sent by United States mail or
courier service and shall be deemed to have been given when delivered in person
or by courier service, upon receipt of telecopy or telex, or four Business Days
after depositing it in the United States mail, registered or certified, with
postage prepaid and properly addressed; provided that notices to the
Administrative Agent shall not be effective until received. For the purposes
hereof, the address of each party hereto shall be as set forth on Schedule 10.8
attached hereto, or such other address as shall be designated by such party in a
written notice delivered to the Administrative Agent and the Company.
10.9 Survival of Representations, Warranties and Agreements.
A. All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the Loans
and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of the Company set forth in subsections 2.6D, 2.7,
3.5A, 3.6, 10.2, 10.3 and 10.4 and the agreements of the Lenders set forth in
subsections 9.2C, 9.4, 10.4, 10.5 and 10.20 shall survive the payment of the
Loans, the cancellation or expiration of the Letters of Credit and the
reimbursement of any amounts drawn or paid thereunder, and the termination of
this Agreement.
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10.10 Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of any Agent or any Lender in the exercise
of any power, right or privilege hereunder or under any other Loan Document
shall impair such power, right or privilege or be construed to be a waiver of
any default or acquiescence therein, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further exercise thereof or
of any other power, right or privilege. All rights and remedies existing under
this Agreement and the other Loan Documents are cumulative to, and not exclusive
of, any rights or remedies otherwise available.
10.11 Marshalling; Payments Set Aside.
Neither any Agent nor any Lender shall be under any obligation to marshal
any assets in favor of the Company or any other party or against or in payment
of any or all of the Obligations. To the extent that the Company makes a payment
or payments to the Administrative Agent or the Lenders (or to the Administrative
Agent or Collateral Agent for the benefit of the Lenders), or any Agent or the
Lenders enforce any security interests or exercise their rights of setoff, and
such payment or payments or the proceeds of such enforcement or setoff or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, any other state or federal law, common
law or any equitable cause, then, to the extent of such recovery, the obligation
or part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefor or Related thereto, shall be revived and continued in full
force and effect as if such payment or payments had not been made or such
enforcement or setoff had not occurred.
10.12 Severability.
In case any provision in or obligation under this Agreement or the Notes
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
10.13 Obligations Several; Independent Nature of the Lenders' Rights.
The obligations of the Lenders hereunder are several and no Lender shall
be responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in any other Loan Document, and no action taken by
the Lenders pursuant hereto or thereto, shall be deemed to constitute the
Lenders as a partnership, an association, a joint venture or any other kind of
entity. The amounts payable at any time hereunder to each Lender shall be a
separate and independent debt, and each Lender shall be entitled to protect and
enforce its rights arising out of this Agreement and it shall not be necessary
for any other Lender to be joined as an additional party in any proceeding for
such purpose.
10.14 Maximum Amount.
A. It is the intention of the Company and the Lenders to conform strictly
to the usury and similar laws relating to interest from time to time in force,
and all agreements between the Loan Parties and their respective Subsidiaries
and the Lenders, whether now existing or hereafter arising and whether oral or
written, are hereby expressly limited so that in no contingency or event
whatsoever, whether by acceleration of maturity hereof or otherwise, shall the
amount paid or agreed to be paid in the aggregate to the Lenders as interest
(whether or not designated as interest, and including any amount otherwise
136
designated but deemed to constitute interest by a court of competent
jurisdiction) hereunder or under the other Loan Documents or in any other
agreement given to secure the Indebtedness or obligations of the Company to the
Lenders, or in any other document evidencing, securing or pertaining to the
Indebtedness evidenced hereby, exceed the maximum amount permissible under
applicable usury or such other laws (the "Maximum Amount"). If under any
circumstances whatsoever fulfillment of any provision hereof, or any of the
other Loan Documents, at the time performance of such provision shall be due,
shall involve exceeding the Maximum Amount, then, ipso facto, the obligation to
be fulfilled shall be reduced to the Maximum Amount. For the purposes of
calculating the actual amount of interest paid and/or payable hereunder in
respect of laws pertaining to usury or such other laws, all sums paid or agreed
to be paid to the holder hereof for the use, forbearance or detention of the
Indebtedness of the Company evidenced hereby, outstanding from time to time
shall, to the extent permitted by Applicable Law, be amortized, pro-rated,
allocated and spread from the date of disbursement of the proceeds of the Notes
until payment in full of all of such Indebtedness, so that the actual rate of
interest on account of such Indebtedness is uniform through the term hereof. The
terms and provisions of this subsection shall control and supersede every other
provision of all agreements between the Company or any endorser of the Notes and
the Lenders.
B. If under any circumstances any Lender shall ever receive an amount
which would exceed the Maximum Amount, such amount shall be deemed a payment in
reduction of the principal amount of the Loans and shall be treated as a
voluntary prepayment under subsection 2.4B(i) and shall be so applied in
accordance with subsection 2.4 hereof or if such excessive interest exceeds the
unpaid balance of the Loans and any other Indebtedness of the Company in favor
of such Lender, the excess shall be deemed to have been a payment made by
mistake and shall be refunded to the Company.
10.15 Headings.
Section and subsection headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
10.16 Applicable Law.
THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
10.17 Successors and Assigns.
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of the Lenders (it being understood that
the Lenders' rights of assignment are subject to subsection 10.1). Neither the
Company's nor the Parent's rights or obligations hereunder nor any interest
therein may not be assigned or delegated by the Company or the Parent without
the prior written consent of all Lenders.
10.18 Consent to Jurisdiction and Service of Process.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST THE COMPANY OR THE PARENT ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY
OBLIGATIONS THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇
▇▇▇
▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH OF THE
COMPANY AND THE PARENT, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN
ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO THE COMPANY OR THE PARENT, AS APPLICABLE, AT ITS ADDRESS
PROVIDED IN ACCORDANCE WITH SUBSECTION 10.8;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE COMPANY OR THE PARENT,
AS APPLICABLE, IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE
CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST THE COMPANY
OR THE PARENT IN THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 10.18 RELATING TO
JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST
EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402
OR OTHERWISE.
10.19 Waiver of Jury Trial.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/BORROWER RELATIONSHIP OR OTHER RELATIONSHIP THAT IS BEING ESTABLISHED.
The scope of this waiver is intended to be all-encompassing of any and all
disputes that may be filed in any court and that relate to the subject matter of
this transaction, including, without limitation, contract claims, tort claims,
breach of duty claims and all other common law and statutory claims. Each party
hereto acknowledges that this waiver is a material inducement to enter into a
business relationship, that each has already relied on this waiver in entering
into this Agreement, and that each will continue to rely on this waiver in their
Related future dealings. Each party hereto further warrants and represents that
it has reviewed this waiver with its legal counsel and that it knowingly and
voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER
138
SPECIFICALLY REFERRING TO THIS SUBSECTION 10.19 AND EXECUTED BY EACH OF THE
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS
MADE HEREUNDER. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
10.20 Confidentiality.
Each Lender shall hold all non-public information obtained pursuant to the
requirements of this Agreement which has been identified as confidential by the
Company in accordance with such Lender's customary procedures for handling
confidential information of this nature and in accordance with safe and sound
banking practices, it being understood and agreed by the Company that in any
event a Lender may make disclosures reasonably required by any bona fide
assignee, transferee or participant in connection with the contemplated
assignment or transfer by such Lender of any Loans or any participation therein
or as required or requested by any governmental agency or representative thereof
or pursuant to legal process; provided that nothing herein shall prevent any
Agent or any Lender from disclosing any such information (i) to the
Administrative Agent or any other Lender, (ii) any of its employees, directors
and officers who need to know such information in accordance with customary
banking or commercial lending practices and affiliates of Lenders, employees,
directors and officers of such affiliates, and agents, accountants, attorneys
and other professional advisors of Lenders who receive such information having
been made aware of the confidential nature thereof, (iii) upon the request or
demand of any Governmental Authority having jurisdiction over it, (iv) in
response to any order of any court or other Governmental Authority or as may
otherwise be required pursuant to any Applicable Laws, (v) if required to do so
in connection with any litigation or similar proceeding, (vi) which has been
publicly disclosed other than in breach of this subsection 10.20, (vii) to the
National Association of Insurance Commissioners or any securities exchange or
any similar organization, or any nationally recognized rating agency that
requires access to information about a Lender's investment portfolio in
connection with ratings issued with respect to such Lender or (viii) in
connection with the exercise of any remedy hereunder or under any other Loan
Document. In the event that any Lender discloses any information pursuant to
clauses (iv) or (v) of the preceding sentence, such Lender will, either before
or after such disclosure, give notice thereof to the Company if such Lender is
lawfully permitted to do so; and provided, further that in no event shall any
Lender be obligated or required to return any materials furnished by the Company
or any of its Subsidiaries.
10.21 Counterparts; Effectiveness.
This Agreement and any amendments, waivers, consents or supplements hereto
or in connection herewith may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
139
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
THE COMPANY: ENVIRONMENTAL SYSTEMS
PRODUCTS HOLDINGS INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------
Name:
Title:
THE PARENT: ENVIROSYSTEMS CORP.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------
Name:
Title:
140
AGENTS AND LENDERS: CREDIT SUISSE FIRST BOSTON,
individually and as the Administrative
Agent, an Arranger and the Collateral
Agent
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
DLJ CAPITAL FUNDING, INC.,
individually and as the Syndication Agent
By:
-----------------------------
Name:
Title:
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION,
as an Arranger
By:
-----------------------------
Name:
Title:
141
Reference: Environmental Systems Products Holdings, Inc.
Credit Agreement
GREEN TREE FINANCIAL SERVICING
CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
142
BHF-BANK AKTIENGESELLSCHAFT
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Assistant Vice President
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Assistant Vice President
143
BALANCED HIGH-YIELD FUND II LTD.
C/O BHF-BANK AKTIENGESELLSCHAFT
ACTING THROUGH ITS NEW YORK
BRANCH, AS ATTORNEY IN FACT
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Assistant Vice President
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Assistant Vice President
144
ALLSTATE LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Authorized Signatory
145
OCTAGON LOAN TRUST
By: Octagon Credit Investors, as manager
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
146
OSPREY INVESTMENTS PORTFOLIO
By: Citibank, N.A., as Manager
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President
147
GCB INVESTMENT PORTFOLIO
By: Citibank, N.A.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
148
TORONTO DOMINION (NEW YORK), INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: VICE PRESIDENT
149
CYPRESSTREE INVESTMENT MANAGEMENT
COMPANY, INC.
As: Attorney-in-Fact and on behalf of First
Allmerica Financial Life Insurance Company
as Portfolio Manager
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: MANAGING DIRECTOR
150
FIRST SOURCE FINANCIAL LLP,
By: First Source Financial, Inc., Its
Agent/Manager
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇, N.A.
By: /s/ A. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------
Name: A. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
153
KZH ING-2 LLC
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Agent
154
KZH ING-3 LLC
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Agent
155
KZH SOLEIL LLC
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Agent
156
KZH SOLEIL-2 LLC
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Agent
157
KZH CYPRESSTREE-1 LLC
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Agent
158
KZH RIVERSIDE LLC
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Agent
159
METROPOLITAN LIFE INSURANCE
COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director
▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇
By: /s/ [Illegible]
-----------------------------
Name: [Illegible]
Title: [Illegible]
161