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EXHIBIT 10.3
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ASSUMPTION AGREEMENT AND
AMENDED AND RESTATED CREDIT AGREEMENT
AMONG
TRANSWESTERN PUBLISHING COMPANY LLC
AND
TWP CAPITAL CORP. II,
AS BORROWERS
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,
CANADIAN IMPERIAL BANK OF COMMERCE,
AS ADMINISTRATIVE AGENT
AND
FIRST UNION NATIONAL BANK,
AS DOCUMENTATION AGENT
DATED AS OF NOVEMBER 6, 1997
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS......................................................................2
1.1 Defined Terms................................................................2
1.2 Other Definitional Provisions...............................................20
SECTION 2. ASSUMPTION OF THE LOANS.........................................................21
2.1 Assumption by the Borrowers of the Existing Borrowers' Obligations..........21
2.2 Release of the Existing Borrowers...........................................21
SECTION 3. AMOUNT AND TERMS OF COMMITMENTS.................................................22
3.1 Revolving Credit Commitments................................................22
3.2 Procedure for Revolving Credit Borrowing....................................23
3.3 Fees........................................................................23
3.4 Termination or Reduction of Revolving Credit Commitments....................23
3.5 Term Loans..................................................................24
3.6 Closing Date Term Loan Borrowings...........................................24
3.7 Repayment of Loans; Evidence of Debt........................................25
3.8 Optional Prepayments; Mandatory Prepayments and Revolving Credit
Commitment Reductions......................................................26
3.9 Conversion and Continuation Options.........................................28
3.10 Minimum Amounts and Maximum Number of Tranches..............................28
3.11 Interest Rates and Payment Dates............................................28
3.12 Computation of Interest and Fees............................................29
3.13 Inability to Determine Interest Rate........................................29
3.14 Pro Rata Treatment and Payments.............................................30
3.15 Illegality..................................................................31
3.16 Requirements of Law.........................................................31
3.17 Taxes.......................................................................32
3.18 Indemnity...................................................................34
3.19 Change of Lending Office; Mandatory Assignment..............................34
SECTION 4. REPRESENTATIONS AND WARRANTIES..................................................35
4.1 Financial Condition.........................................................35
4.2 No Change...................................................................36
4.3 Existence; Compliance with Law..............................................37
4.4 Power; Authorization; Enforceable Obligations...............................37
4.5 No Legal Bar................................................................37
4.6 No Material Litigation......................................................38
4.7 No Default..................................................................38
4.8 Ownership of Property; Liens................................................38
4.9 Intellectual Property.......................................................38
4.10 No Burdensome Restrictions..................................................38
4.11 Taxes.......................................................................38
4.12 Federal Regulations.........................................................39
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4.13 ERISA.......................................................................39
4.14 Investment Company Act; Other Regulations...................................39
4.15 Purpose of Loans............................................................39
4.16 Environmental Matters.......................................................40
4.17 Solvency....................................................................40
4.18 Accuracy of Information.....................................................41
4.19 Employee Matters, etc.......................................................41
4.20 Security Documents..........................................................41
4.21 Ownership...................................................................41
SECTION 5. CONDITIONS PRECEDENT............................................................42
5.1 Conditions to Effectiveness.................................................42
5.2 Conditions to Each Loan.....................................................43
SECTION 6. AFFIRMATIVE COVENANTS...........................................................44
6.1 Financial Statements........................................................44
6.2 Certificates; Other Information.............................................45
6.3 Conduct of Business and Maintenance of Existence............................46
6.4 Maintenance of Property; Insurance..........................................46
6.5 Inspection of Property; Books and Records; Discussions......................46
6.6 Notices.....................................................................47
6.7 Environmental Laws..........................................................48
6.8 Additional Collateral; Subsidiaries.........................................48
6.9 Interest Rate Protection....................................................49
SECTION 7. NEGATIVE COVENANTS..............................................................49
7.1 Financial Condition Covenants...............................................49
7.2 Limitation on Indebtedness..................................................51
7.3 Limitation on Liens.........................................................52
7.4 Limitation on Guarantee Obligations.........................................53
7.5 Limitation on Fundamental Changes...........................................53
7.6 Limitation on Sale of Assets................................................53
7.7 Limitation on Leases........................................................54
7.8 Limitation on Distributions.................................................54
7.9 Limitation on Capital Expenditures..........................................56
7.10 Limitation on Investments, Loans and Advances...............................56
7.11 Limitation on Transactions with Affiliates..................................58
7.12 Limitation on Sales and Leasebacks..........................................59
7.13 Limitation on Changes in Fiscal Year........................................59
7.14 Limitation on Negative Pledge Clauses.......................................59
7.15 Limitation on Lines of Business.............................................59
7.16 Limitation on Designated Senior Debt........................................59
7.17 Limitation on Activities of Holdings........................................59
7.18 Limitation on Optional Payments and Modifications of Subordinated
Debt......................................................................59
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SECTION 8. EVENTS OF DEFAULT...............................................................60
SECTION 9. THE AGENTS......................................................................63
9.1 Appointment.................................................................63
9.2 Delegation of Duties........................................................63
9.3 Exculpatory Provisions......................................................63
9.4 Reliance by Agents..........................................................64
9.5 Notice of Default...........................................................64
9.6 Non-Reliance on Agents and Other Lenders....................................64
9.7 Indemnification.............................................................65
9.8 Agents in Their Individual Capacity.........................................65
9.9 Successor Administrative Agent..............................................65
9.10 Releases of Collateral......................................................66
SECTION 10. MISCELLANEOUS..................................................................66
10.1 Amendments and Waivers......................................................66
10.2 Notices.....................................................................67
10.3 No Waiver; Cumulative Remedies..............................................67
10.4 Survival of Representations and Warranties..................................67
10.5 Payment of Expenses and Taxes...............................................68
10.6 Successors and Assigns; Participations and Assignments......................68
10.7 Adjustments; Set-off........................................................71
10.8 Counterparts................................................................71
10.9 Severability................................................................71
10.10 Integration.................................................................71
10.11 GOVERNING LAW...............................................................71
10.12 Submission To Jurisdiction; Waivers.........................................72
10.13 Acknowledgements............................................................72
10.14 Partner Liability...........................................................73
10.15 Confidentiality.............................................................73
10.16 WAIVERS OF JURY TRIAL.......................................................73
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SCHEDULES
Schedule 1.1 Commitments and Addresses
Schedule 1.2 Executive Agreement Signatories
Schedule 3.7 Amortization
Schedule 4.2 Material Adverse Effect
Schedule 4.3 Disclosure Schedule
Schedule 4.21 Ownership
Schedule 7.2 Existing Indebtedness
Schedule 7.3 Existing Liens
Schedule 7.4 Existing Guarantee Obligations
EXHIBITS
Exhibit A Form of Revolving Credit Note
Exhibit B Form of Term Note
Exhibit C Form of Borrowers Security Agreement
Exhibit D Form of Holdings Pledge Agreement
Exhibit E Form of Assignment and Acceptance
Exhibit F Form of Borrowing Certificate
Exhibit G Form of Opinion of Counsel to Borrowers (▇▇▇▇▇▇▇▇ & ▇▇▇▇▇)
Exhibit H Form of Conversion/Continuation
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ASSUMPTION AGREEMENT AND AMENDED AND RESTATED CREDIT AGREEMENT,
dated as of November 6, 1997, among TransWestern Publishing Company LLC, a
Delaware limited liability company (the "Company"), TWP Capital Corp. II, a
Delaware corporation and a wholly owned Subsidiary of the Company ("TWP Capital
II"; the Company and TWP Capital II, collectively, the "Borrowers"), the several
banks and other financial institutions from time to time parties to this
Agreement (the "Lenders"), Canadian Imperial Bank of Commerce, New York Agency,
as administrative agent for the Lenders hereunder (in such capacity, the
"Administrative Agent") and First Union National Bank, a national banking
association, as documentation agent for the Lenders hereunder (in such capacity,
the "Documentation Agent" and, together with the Administrative Agent, the
"Agents").
W I T N E S S E T H :
WHEREAS, pursuant to the Credit Agreement, dated as of October 1,
1997 (the "Existing Credit Agreement"), among TransWestern Publishing Company,
L.P., a Delaware limited partnership (the "Predecessor Company"), TWP Capital
Corp., a Delaware corporation and wholly owned Subsidiary of the Predecessor
Company (the "Predecessor Subsidiary"; together with the Predecessor Company,
the "Existing Borrowers"), the several banks and other financial institutions
parties thereto, CIBC, as administrative agent thereunder, and First Union, as
documentation agent thereunder, such lenders have agreed to make, and have made,
certain loans and other extensions of credit to the Existing Borrowers;
WHEREAS, the Existing Borrowers intend to enter into a series of
transactions which will result in (i) the transfer of all of the assets and
liabilities of the Predecessor Company to the Company, including the transfer of
all obligations under the Existing Credit Agreement, (ii) the renaming of the
Predecessor Company from TransWestern Publishing Company, L.P to TransWestern
Holdings L.P. ("Holdings"), (iii) the issuance of approximately $33,000,000 of
senior discount notes by Holdings, the proceeds of which will be used to
repurchase or redeem approximately $33,000,000 of preferred partnership units of
the Predecessor Company and (iv) the assumption by the Borrowers of all
obligations of the Existing Borrowers under the Existing Credit Agreement
(collectively, the "Contemplated Transactions"); and
WHEREAS, the Borrowers have requested that the Lenders and the
Agents enter into this Assumption Agreement and Amended and Restated Credit
Agreement to amend certain provisions of the Existing Credit Agreement and for
the purposes, among others, of (i) transferring the obligations of the Existing
Borrowers under the Existing Credit Agreement to the Borrowers and (ii)
permitting the Contemplated Transactions, and the Lenders and the Agents have
agreed to do so.
NOW THEREFORE, the parties hereto hereby agree that, effective on
the Closing Date, the Borrowers shall assume, on a joint and several basis, all
obligations of the
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Existing Borrowers under the Existing Credit Agreement, and the Existing Credit
Agreement shall be superseded, amended and restated to read in its entirety as
follows:
SECTION 1. DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, the following terms
shall have the following meanings:
"ABR": at any time, a rate per annum equal to the higher of (a)
the Prime Rate and (b) the Federal Funds Rate as quoted by the
Administrative Agent plus 1/2 of 1%. Each change in the ABR shall take
effect simultaneously with the corresponding change or changes in the
Prime Rate or the Federal Funds Rate.
"ABR Loans": Loans the rate of interest applicable to which is
based upon the ABR.
"Acquisition Debt": Indebtedness of the Company (other than
Loans) issued as part of the consideration for a Permitted Acquisition,
provided that (a) such Indebtedness is unsecured, (b) either (i) all the
terms and conditions of such Indebtedness are satisfactory in form and
substance to the Required Lenders, as evidenced by their prior written
approval thereof, or (ii) the Revolving Credit Commitments are,
contemporaneously with the issuance of such Indebtedness, permanently
reduced in accordance with subsection 3.4(a) by an amount equal to the
principal amount thereof, and (c) after giving effect to the issuance
thereof, no Default or Event of Default shall have occurred and be
continuing.
"Administrative Agent": as defined in the preamble hereto.
"Affiliate": as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person. For
purposes of this definition, "control" of a Person means the power,
directly or indirectly, to direct or cause the direction of the
management and policies of such Person, whether by contract or
otherwise.
"Agents": as defined in the preamble hereto.
"Agreement": this Assumption Agreement and Amended and Restated
Credit Agreement, as amended, supplemented or otherwise modified from
time to time.
"Applicable Margin": for each Revolving Credit Loan and Term
Loan, the rate per annum set forth in the table below opposite the Total
Leverage Ratio then in effect; such Applicable Margin shall be in effect
for the period beginning the second Business Day following the date on
which the Pricing Certificate provided pursuant to subsection 6.2(b) is
delivered to the Lenders and ending on the first Business Day
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following the date on which the Pricing Certificate provided pursuant to
subsection 6.2(b) is delivered to the Lenders and ending on the first
Business Day following the date on which the next such Pricing
Certificate is delivered to the Lenders; provided, that, if for any
reason the Pricing Certificate required by subsection 6.2(b) is not
delivered in accordance with such subsection to the Lenders, the Total
Leverage Ratio shall, for purposes of determining the Applicable Margin,
be deemed to be greater than or equal to 6.25 to 1.00 for each day
during the period from and including the day such Pricing Certificate
was required to be delivered pursuant to subsection 6.2(b) to the day
such Pricing Certificate is so delivered; and provided, further, that
for the period from and including the Closing Date to the first Business
Day following the date on which the Borrowers shall deliver the first
Pricing Certificate pursuant to subsection 6.2(b), the Total Leverage
Ratio shall, for purposes of determining Applicable Margin, be deemed to
be greater than or equal to 6.25 to 1.00.
APPLICABLE APPLICABLE
MARGIN FOR MARGIN FOR
TOTAL LEVERAGE RATIO ABR LOANS LIBOR LOANS
Revolving Credit Loans
Greater than or equal to 6.25 to 1.00 1.500% 2.500%
Less than 6.25 to 1.00 and greater 1.375% 2.375%
than or equal to 6.00 to 1.00
Less than 6.00 to 1.00 and greater 1.125% 2.125%
than or equal to 5.50 to 1.00
Less than 5.50 to 1.00 and greater 0.875% 1.875%
than or equal to 5.00 to 1.00
Less than 5.00 to 1.00 and greater 0.625% 1.625%
than or equal to 4.50 to 1.00
Less than 4.50 to 1.00 0.375% 1.375%
Term Loans
Greater than or equal to 6.25 to 1.00 1.750% 2.750%
Less than 6.25 to 1.00 and greater 1.625% 2.625%
than or equal to 6.00 to 1.00
Less than 6.00 to 1.00 and greater 1.375% 2.375%
than or equal to 5.50 to 1.00
Less than 5.50 to 1.00 and greater 1.125% 2.125%
than or equal to 5.00 to 1.00
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APPLICABLE APPLICABLE
MARGIN FOR MARGIN FOR
TOTAL LEVERAGE RATIO ABR LOANS LIBOR LOANS
Less than 5.00 to 1.00 0.875% 1.875%
"Asset Sale": any sale or other disposition (including any
Permitted Disposition) or series of related sales or other dispositions
by either Borrower or any Subsidiary of any asset or assets of such
Borrower or Subsidiary (including any sale and leaseback of assets) and
any issuance by any Subsidiary of any shares of Capital Stock of such
Subsidiary to any Person other than the Company or any wholly owned
Subsidiary; provided, that any sale of assets expressly permitted by
subsections 7.6(a) through (d) shall not constitute an "Asset Sale"
hereunder.
"Assignee": as defined in subsection 10.6(c).
"Available Commitment": as to any Lender at any time, an amount
equal to the excess, if any, of (a) the amount of such Lender's
Revolving Credit Commitment over (b) the aggregate principal amount of
all Revolving Credit Loans outstanding to such Lender.
"Board of Directors": (i) in the case of a Person that is a
limited partnership, the board of directors of its corporate general
partner or any committee authorized to act therefor (or, if the general
partner is itself a limited partnership, the board of directors of such
general partner's corporate general partner or any committee authorized
to act therefor), (ii) in the case of a Person that is a corporation,
the board of directors of such Person or any committee authorized to act
therefor and (iii) in the case of any other Person, the board of
directors, management committee or similar governing body or any
authorized committee thereof responsible for the management of the
business and affairs of such Person.
"Borrowers Security Agreement": the Assumed Amended and Restated
Borrowers Security Agreement to be executed and delivered by the Company
and TWP Capital II, substantially in the form of Exhibit C, as the same
may be amended, supplemented or otherwise modified from time to time.
"Borrowers": as defined in the preamble hereto.
"Borrowing Date": any Business Day specified in a notice
pursuant to subsection 3.2 or 3.6 as a date on which the Company
requests the Lenders to make Loans hereunder.
"Bridge Period": that time period from the Closing Date until
the receipt by the Lenders of audited consolidated financial statements
of the Borrowers and their
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Subsidiaries for the fiscal year ending April 30, 1998 and the related
compliance certificate delivered pursuant to subsection 6.2(a) and (b).
"Bridge Securities Purchase Agreement": the Bridge Securities
Purchase Agreement, dated as of October 1, 1997, among the Predecessor
Company, the Predecessor Subsidiary, CIBC Wood Gundy Securities Corp.,
First Union Corporation and the other signatories thereto.
"Business": as defined in subsection 3.16.
"Business Day": a day other than a Saturday, Sunday or other day
on which commercial banks in New York City, New York or London, England
are authorized or required by law to close.
"Capital Expenditures": of any Person for any period the amount,
without duplication, of expenditures (including by way of the
acquisition of securities of a Person or otherwise), determined in
accordance with GAAP, for such period in respect of the purchase or
other acquisition of fixed or capital assets (excluding (i) any such
asset acquired in connection with normal replacement and maintenance
programs properly charged to current operations, (ii) expenditures made
with the proceeds of insurance and awards of condemnation and (iii)
assets acquired as part of a Permitted Acquisition).
"Capital Stock": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person
other than a corporation (including general and limited partnership
interests in a partnership) and any and all warrants or options to
purchase any of the foregoing.
"Cash Equivalents": (a) securities with maturities of six months
or less from the date of acquisition issued or fully guaranteed or
insured by the United States Government or any agency thereof, (b)
certificates of deposit, time deposits, overnight bank deposits, bankers
acceptances and repurchase agreements of any commercial bank which has
combined capital and surplus in excess of $200,000,000 having maturities
of six months or less from the date of acquisition, (c) commercial paper
of an issuer rated at least A-1 by Standard & Poor's Corporation or P-1
by ▇▇▇▇▇'▇ Investors Service, Inc., or carrying an equivalent rating by
a nationally recognized rating agency if both of the two named rating
agencies cease publishing ratings of investments having maturities of
six months or less from the date of acquisition and (d) shares of money
market mutual or similar funds which invest exclusively in assets
satisfying the requirements of clauses (a) through (c) of this
definition.
"Cash Interest Coverage Ratio": EBITDA for any period of four
consecutive fiscal quarters divided by Cash Interest Expense for such
period.
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"Cash Interest Expense": for any period, Interest Expense for
such period, excluding (a) interest paid in kind or by accretion or
addition to principal, (b) amortization of commissions, discounts, fees,
costs and other charges paid in connection with the incurrence of
Indebtedness and (c) other interest costs not paid in cash.
"CIBC": Canadian Imperial Bank of Commerce, New York Agency.
"Closing Date": the date on which the conditions precedent set
forth in subsection 5.1 shall be satisfied.
"Code": the Internal Revenue Code of 1986, as amended from time
to time.
"Collateral": all assets of the Loan Parties, now owned or
hereinafter acquired, upon which a Lien is purported to be created by
any Security Document.
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Company within the
meaning of Section 4001 of ERISA or is part of a group which includes
the Company and which is treated as a single employer under Section 414
of the Code.
"Company": as defined in the preamble hereto.
"Consolidated Net Income": of any Person for any period,
consolidated net income of such Person for such period determined in
accordance with GAAP.
"Contemplated Transactions": as defined in the recitals hereto.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Conversion Securities": Promissory notes issued by the
Predecessor Company and the Predecessor Subsidiary pursuant to Section
3.6 of the Bridge Securities Purchase Agreement in an aggregate
principal amount not to exceed $100,000,000 or any related Refinancing
Indebtedness.
"Current Assets": at a particular date, with respect to any
Person, all amounts (other than cash and Cash Equivalents and assets
which would not otherwise be included in "total current assets" in
accordance with GAAP but for the fact that such assets are being held
for sale) which would, in conformity with GAAP, be set forth opposite
the caption "total current assets" (or any like caption) on a balance
sheet of such Person at such date.
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"Current Liabilities": at a particular date, with respect to any
Person, all amounts which would, in conformity with GAAP, be set forth
opposite the caption "total current liabilities" (or any like caption)
on a balance sheet of such Person at such date (other than current
maturities of long term debt).
"Day 45": the day that is 45 days after the Closing Date.
"Default": any of the events specified in Section 7, whether or
not any requirement set forth therein for the giving of notice, the
lapse of time, or both, has been satisfied.
"Disclosure Schedule": Schedule 4.3 hereto.
"Documentation Agent": as defined in the preamble hereto.
"Dollars" and "$": dollars in lawful currency of the United
States of America.
"EBITDA": of any Person for any period, Consolidated Net Income
of such Person for such period plus, without duplication and to the
extent reflected as a charge in the statement of such Consolidated Net
Income, the sum of (a) provision for income tax expense (including,
without limitation, any income taxes that would be payable if the
Company were to become a taxable entity for purposes of Federal, state
or local income taxes), (b) Interest Expense, (c) depreciation and
amortization expense, (d) any extraordinary, non-recurring or unusual
losses or expenses (including, whether or not otherwise includable as a
separate item in the statement of such Consolidated Net Income, losses
on the sales of assets outside of the ordinary course of business and
transaction expenses incurred in connection with the Recapitalization)
and (e) distributions to the Equity Compensation Trust and any payments
made by the Equity Compensation Trust minus, without duplication and to
the extent reflected as income in the statement of such Consolidated Net
Income, any extraordinary, non-recurring or unusual gains (including,
whether or not otherwise includable as a separate item in the statement
of such Consolidated Net Income, gains on the sales of assets outside of
the ordinary course of business); provided that (i) in computing EBITDA
for any period any Permitted Acquisition or Permitted Disposition
occurring during such period shall be deemed to have been completed on
the first day of such period and (ii) EBITDA may be adjusted for
projected cost savings and other pro forma adjustments relating to any
Permitted Acquisition if such savings or adjustments would be permitted
under applicable Securities and Exchange Commission (or any successor or
analogous Governmental Authority) regulations or are approved in writing
by the Required Lenders.
"Employment Agreements": collectively, the Employment Agreements
entered into by the Predecessor Company with ▇▇. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, as assigned to the Company on November 6, 1997.
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"Environmental Laws": any and all foreign, Federal, state, local
or municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees, requirements of any Governmental Authority or other
Requirements of Law (including common law) regulating, relating to or
imposing liability or standards of conduct concerning protection of
human health or the environment, as now or may at any time hereafter be
in effect.
"Equity Compensation Trust": the trust established for the
benefit of certain members of management and certain full time employees
of the Predecessor Company pursuant to the terms of the Equity
Compensation Trust Agreement, dated as of November 4, 1993, as amended,
between TransWestern Publishing Company, L.P. and the Trustees named
therein, or any trust established for such purposes on substantially
identical terms for such members of management and full time employees
of the Company a copy of which shall be delivered to each Agent.
"Equity Consideration": any consideration given by the Company in
connection with a Permitted Acquisition or proposed Permitted
Acquisition consisting of equity interests issued by the Company or the
Predecessor Company or cash proceeds from the sale of equity interests
in the Company.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Event of Default": any of the events specified in Section 7,
provided that any requirement set forth therein for the giving of
notice, the lapse of time, or both, has been satisfied.
"Excess Cash Flow": for any period of the Company, the excess of
(a) the sum, without duplication, of (i) EBITDA of the Company for such
period, (ii) the amount of returned surplus assets of any pension plan
received by the Company during such period to the extent not included in
Net Income to determine EBITDA for such period or any prior period
commencing on or subsequent to the Closing Date, (iii) decreases in
Working Capital of the Company and its Subsidiaries for such period and
(iv) extraordinary, non-recurring or unusual cash gains during such
period included in Consolidated Net Income of the Company for such
period, over (b) the sum, without duplication, of (i) the aggregate
amount of cash Capital Expenditures permitted pursuant to subsection 7.9
and made by the Company and its Subsidiaries during such period, (ii)
the aggregate amount of payments of principal in respect of any
Indebtedness of the Company or any of its Subsidiaries not prohibited
hereunder during such period, including, but not limited to, prepayments
made pursuant to subsection 3.8(a) (other than prepayments of Loans made
pursuant to subsections 3.8(b), (c), (d), (e) and prepayments of
Revolving Credit Loans to the extent not accompanied by reductions of
the Revolving Credit Commitments), (iii) increases in Working Capital of
the Company for such period, (iv) Interest Expense of the Company and
its Subsidiaries for such period, (v) taxes paid in cash by the Company
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or any of its Subsidiaries in such period, (vi) cash distributions made
in such period by the Company for payment of taxes to the extent
permitted under subsection 7.8(a), (vii) any cash payments, made by the
Company in accordance with subsection 7.8(d) during such period for the
purchase of shares of its Capital Stock from departing officers and
employees and on account of Subordinated Management Notes, (viii) any
cash payments made by the Company or any of its Subsidiaries for
acquisitions made during such period pursuant to subsection 7.10(e) and
(ix) Management Fees paid during such period; notwithstanding the
parenthetical phrase included in clause (b)(ii) above, the amount
described in such clause (b)(ii) shall include the amount of any
mandatory prepayment of the Loans to the extent that clause (a) of this
definition includes a corresponding amount directly attributable to the
event giving rise to such mandatory prepayment (such as, for example,
the portion of the Net Cash Proceeds from an Asset Sale applied as a
mandatory prepayment of the Loans representing the ordinary gain
realized in such Asset Sale).
"Executive Agreements": collectively, (a) the Executive
Agreements entered into by the Predecessor Company with ▇▇. ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ on October 1, 1997, and (b) the Executive
Agreements entered into by the Predecessor Company with those officers
and employees of the Company listed on Schedule 1.2 hereto and any other
officers and employees of the Company who shall enter into an Executive
Agreement with the Company subsequent to the Closing Date, all such
agreements referred to in this clause (b) in substantially the form of
Exhibit K-2 to the Purchase Agreement and, in the case of all such
Agreements entered into prior to November 6, 1997, as assigned to the
Company on November 6, 1997.
"Existing Borrowers Security Agreement": the Borrowers Security
Agreement (as defined in the Existing Credit Agreement).
"Existing Credit Agreement": as defined in the recitals hereto.
"Facilities Termination Date": October 1, 2004.
"Federal Funds Rate": for any day, a rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers, as published at 11:00 a.m. (New York City time) 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 it.
"Financing Lease": any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance
with GAAP to be capitalized on a balance sheet of the lessee.
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"First Union": First Union National Bank, a national banking
association.
"Fixed Charge Ratio": EBITDA for any period of four consecutive
fiscal quarters divided by Fixed Charges for the Company for such
period.
"Fixed Charges": for the Company for any period the sum of (a)
Total Debt Service for such period, (b) distributions for the payment of
taxes made by the Company during such period pursuant to subsection
7.8(a), (c) the aggregate amount of Capital Expenditures permitted
pursuant to subsection 7.9 and made by the Company and its Subsidiaries
during such period and (d) cash dividend payments made by the Company
pursuant to subsection 7.8(g) during such period, in each case
determined on a consolidated basis in accordance with GAAP.
"GAAP": generally accepted accounting principles in the United
States of America in effect from time to time.
"General Partner": TransWestern Communications Company, Inc., a
Delaware corporation and the general partner of Holdings.
"Governmental Authority": any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another
Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing person has
issued a reimbursement, counterindemnity or similar obligation, in
either case guaranteeing or in effect guaranteeing any Indebtedness,
leases, dividends or other obligations (the "primary obligations") of
any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation of
the guaranteeing person, whether or not contingent, (i) to purchase any
such primary obligation or any property constituting direct or indirect
security therefor, (ii) to advance or supply funds (1) for the purchase
or payment of any such primary obligation or (2) to maintain working
capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation or (iv)
otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the
term Guarantee Obligation shall not include endorsements of instruments
for deposit or collection in the ordinary course of business. The amount
of any Guarantee Obligation of any guaranteeing person shall be deemed
to be the lower of (a) an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such
guaranteeing person
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may be liable pursuant to the terms of the instrument embodying such
Guarantee Obligation, unless such primary obligation and the maximum
amount for which such guaranteeing person may be liable are not stated
or determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person's maximum reasonably anticipated
liability in respect thereof as determined by the Company in good faith.
"High-Yield Debt": as defined in subsection 7.2(b).
"Holdings Pledge Agreement": the Holdings Pledge Agreement to be
executed and delivered by Holdings in favor of the Administrative Agent,
substantially in the form of Exhibit D, as the same may be amended,
supplemented or otherwise modified from time to time.
"Indebtedness": of any Person at any date, (a) all indebtedness
of such Person for borrowed money or for the deferred purchase price of
property or services (other than (i) current trade liabilities incurred
in the ordinary course of business and payable in accordance with
customary practices, (ii) any "earn-out" or similar obligations payable
to the sellers in connection with any Permitted Acquisition based upon a
percentage of the earnings or the cash flow of the business acquired and
(iii) obligations of the Company or any of its Subsidiaries in respect
of advance payments or deposits by its customers for goods or services
to be sold by the Company or such Subsidiary), (b) any other
indebtedness of such Person which is evidenced by a note, bond,
debenture or similar instrument, (c) all obligations of such Person
under Financing Leases, (d) all obligations, contingent or otherwise, of
such Person in respect of acceptances, letters of credit and similar
facilities issued or created for the account of such Person, (e) all
liabilities secured by any Lien on any property owned by such Person
where such Person has not assumed or otherwise become liable for the
payment thereof and (f) for the purposes of subsection 7.2 and Section
7(e) only, all obligations, contingent or otherwise, of such Person in
respect of Interest Rate Agreements.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245
of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Interest Expense": of any Person for any period the amount of
interest expense (including that attributable to Financing Leases)
payable with respect to all outstanding Indebtedness of such Person,
including, without limitation or duplication, all commissions, discounts
and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing and all net amounts payable by such Person
under Interest Rate Agreements, determined in accordance with GAAP.
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"Interest Payment Date": (a) as to any ABR Loan, the first day of
each January, April, July and October, (b) as to any LIBOR Loan having
an Interest Period of three months or less, the last day of such
Interest Period, and (c) as to any LIBOR Loan having an Interest Period
longer than three months, each day which is three months, or a whole
multiple thereof, after the first day of such Interest Period and the
last day of such Interest Period.
"Interest Period": with respect to any LIBOR Loan:
(i) initially, the period commencing on the borrowing
or conversion date, as the case may be, with respect to such
LIBOR Loan and ending one, two, three or six months thereafter,
as selected by the Borrowers in their notice of borrowing or
notice of conversion, as the case may be, given with respect
thereto; and
(ii) thereafter, each period commencing on the last
day of the next preceding Interest Period applicable to such
LIBOR Loan and ending one, two, three or six months thereafter,
as selected by the Borrowers by irrevocable notice to the
Administrative Agent by 11:00 a.m. New York City time not less
than three Business Days prior to the last day of the then
current Interest Period with respect thereto;
provided that, all of the foregoing provisions relating to Interest
Periods are subject to the following:
(1) if any Interest Period pertaining to a LIBOR Loan
would otherwise end on a day that is not a Business Day, such
Interest Period shall be extended to the next succeeding Business
Day unless the result of such extension would be to carry such
Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Business
Day;
(2) any Interest Period that would otherwise extend beyond
the Revolving Credit Termination Date or beyond the date final
payment is due on the Term Loans shall end on the Revolving
Credit Termination Date or such date of final payment, as the
case may be;
(3) any Interest Period pertaining to a LIBOR Loan 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 end on
the last Business Day of a calendar month; and
(4) the Borrowers shall select Interest Periods so as not
to require a payment or prepayment of any LIBOR Loan during an
Interest Period for such Loan.
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"Interest Rate Agreement": with respect to any Person, any
interest rate swap agreement, interest rate future, interest rate
option, interest rate cap or collar or other interest rate hedge
arrangement, to or under which such Person is a party or a beneficiary.
"Lease Expense": for any Person for any period, the aggregate
amount of fixed and contingent rentals payable by such Person,
determined on a consolidated basis in accordance with GAAP, for such
period with respect to operating leases of real and personal property.
"Lenders": as defined in the preamble hereto.
"LIBOR": the rate of interest determined on the basis of the rate
for deposits in Dollars for a period equal to the applicable Interest
Period commencing on the first day of such Interest Period appearing on
Telerate Page 3750 as of 11:00 a.m. (London time) two (2) Business Days
prior to the first day of the applicable Interest Period. If, for any
reason, such rate is not available, then "LIBOR" shall be determined by
the Administrative Agent to be the arithmetic average (rounded upward,
if necessary, to the nearest one-sixteenth of one percent (1/16%)) of
the rate per annum at which deposits in Dollars would be offered by
first class banks in the London interbank market to the Administrative
Agent at approximately 11:00 a.m. (London time) two (2) Business Days
prior to the first day of the applicable Interest Period for a period
equal to such Interest Period and in an amount substantially equal to
the amount of the applicable Loan.
"LIBOR Rate": for any Interest Period, LIBOR for such Interest
Period.
"LIBOR Loans": Loans bearing interest at a rate determined with
reference to the LIBOR Rate.
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title
retention agreement and any Financing Lease having substantially the
same economic effect as any of the foregoing).
"Loan": any loan made by any Lender pursuant to this Agreement.
"Loan Documents": this Agreement, any Notes, the Security
Documents and any document delivered in connection herewith by any new
Subsidiary of the Company pursuant to subsection 6.8.
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"Loan Parties": the Company, TWP Capital II and any new
Subsidiary of the Company that delivers any documents in connection
herewith pursuant to subsection 6.8.
"Management Fees": as defined in subsection 7.11.
"Material Adverse Effect": a material adverse effect on (a) the
business, assets, condition (financial or otherwise) or results of
operations of the Borrowers and their Subsidiaries, taken as a whole or
(b) the validity or enforceability of this or any of the other Loan
Documents or the rights or remedies of the Agents or the Lenders
hereunder or thereunder.
"Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or
any hazardous or toxic substances, materials or wastes, defined or
regulated as such in or under any Environmental Law, including, without
limitation, asbestos, polychlorinated biphenyls and urea-formaldehyde
insulation.
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": (a) in connection with any Asset Sale, the
cash proceeds (including any payments received by way of deferred
payment of principal pursuant to a note or installment receivable or
purchase price adjustment receivable or otherwise) of such Asset Sale
net of all reasonable attorneys' fees, accountants' fees, investment
banking fees, brokerage commissions, survey costs, title insurance
premiums, required debt payments (other than pursuant hereto), amounts
required to be paid to any Person (other than the Company) owning a
beneficial interest in the assets subject to such Asset Sale, reasonable
amounts to be provided by the Company as a reserve, in accordance with
GAAP, against any liabilities associated with such Asset Sale and
retained by the Company (provided, that, if any amount of such reserve
shall be released or reversed, the amount of such release or reversal
shall be "Net Cash Proceeds"), and other customary fees and expenses in
connection therewith and net of taxes (including income taxes of
partners) paid or payable as a result thereof and net of purchase price
adjustments which are in amounts ascertainable on the date of such Asset
Sale and which are reasonably expected to be payable in connection
therewith within 6 months of such date and (b) in connection with any
issuance of any equity or debt securities or instruments or the
incurrence of loans, the cash proceeds (including any cash payments
received by way of deferred payment of principal pursuant to a note or
installment receivable or purchase price adjustment receivable or
otherwise) received from such issuance, net of all reasonable investment
banking fees, legal fees, accountants fees, underwriting discounts and
commissions and other customary fees and expenses in connection
therewith, provided that notwithstanding the foregoing, no fees
described in clauses (a) or (b) above shall be deducted in determining
such Net Cash Proceeds to the extent such fees are payable to an
Affiliate of the Company.
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"Non-Excluded Taxes": as defined in subsection 3.17.
"Notes": the collective reference to the Revolving Credit Notes
and the Term Notes.
"Original Closing Date": the "Closing Date", as defined in the
Existing Credit Agreement.
"Participant": as defined in subsection 10.6(b).
"Partnership Agreement": the Third Amended and Restated
Agreement of Limited Partnership of Holdings, dated as of October 1,
1997, as amended, modified or supplemented in accordance with the terms
thereof.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Percentage": as to any Lender at any time the percentage which
the sum, without duplication, of such Lender's Revolving Credit
Commitment and the aggregate principal amount of such Lender's Term
Loans then outstanding then constitutes of the sum, without duplication,
of the aggregate Revolving Credit Commitments then in effect and Term
Loans then outstanding (or, at any time after the Revolving Credit
Commitments shall have expired or terminated, the percentage which the
aggregate principal amount of such Lender's Loans then outstanding
constitutes of the aggregate principal amount of the Loans then
outstanding).
"Permitted Acquisition": as defined in subsection 7.10(e).
"Permitted Disposition": as defined in subsection 7.6(e).
"Person": an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which the Company or a Commonly
Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"Pricing Certificate": as defined in subsection 6.2(b).
"Prime Rate": at any time, the rate of interest per annum
publicly announced from time to time by CIBC as its prime rate. Each
change in the Prime Rate shall be effective as of the opening of
business on the day such change in the Prime Rate occurs. The parties
hereto acknowledge that the rate announced publicly by CIBC as
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its Prime Rate is an index or base rate and shall not necessarily be its
lowest rate charged to its customers or other banks.
"Properties": as defined in subsection 3.16.
"Purchase Agreement": the Securities Purchase and Redemption
Agreement, dated as of August 27, 1997 and amended as of October 1,
1997, among TWP, the Predecessor Company, the General Partner, and
certain limited partners of the Company and certain stockholders of the
General Partner, and as assigned as of October 1, 1997 by TWP to ▇▇▇▇▇▇
▇. ▇▇▇ Equity Fund III and certain of its Affiliates.
"Recapitalization": the recapitalization of the Predecessor
Company pursuant to the Purchase Agreement and, specifically, the
transactions contemplated by subsections 1, 2, 3 and 4 thereof.
"Refinancing Indebtedness": Indebtedness that refunds, refinances
or extends the High-Yield Debt or the Conversion Securities, but only to
the extent that (i) the Refinancing Indebtedness is subordinated to the
obligations of the Borrowers hereunder to at least the same extent as
the Conversion Securities or High-Yield Debt being refunded, refinanced
or extended, (ii) the Refinancing Indebtedness is scheduled to mature
either (a) no earlier than the Conversion Securities or High-Yield Debt
being refunded, refinanced or extended, or (b) after the Facilities
Termination Date, (iii) the portion, if any, of the Refinancing
Indebtedness that is scheduled to mature on or prior to the Facilities
Termination Date has a weighted average life to maturity at the time
such Refinancing Indebtedness is incurred that is equal to or greater
than the weighted average life to maturity of the portion of Conversion
Securities or High- Yield Debt being refunded, refinanced or extended
that is scheduled to mature on or prior to the Facilities Termination
Date, (iv) such Refinancing Indebtedness is in an aggregate principal
amount that is equal to or less than the sum of (a) the aggregate
principal amount then outstanding under the Conversion Securities or
High-Yield Debt being refunded, refinanced or extended, (b) the amount
of accrued and unpaid interest, if any, and premiums owed, if any, not
in excess of preexisting prepayment provisions on such Conversion
Securities or High-Yield Debt being refunded, refinanced or extended and
(c) the amount of customary fees, expenses and costs related to the
incurrence of such Refinancing Indebtedness, and (v) such Refinancing
Indebtedness is incurred by the Borrowers.
"Register": as defined in subsection 10.6(d).
"Regulation U": Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
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"Reportable Event": any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the thirty day
notice period is waived under subsections .13, .14, .16, .18, .19 or .20
of PBGC Reg. Section 2615.
"Required Lenders": at any time, Lenders the Percentages of
which aggregate more than 50%; provided that notwithstanding the
foregoing, Required Lenders shall at all times be at least two Lenders.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents
of such Person, and any law, treaty, rule or regulation or determination
of an arbitrator or a court or other Governmental Authority, in each
case applicable to or binding upon such Person or any of its property or
to which such Person or any of its property is subject.
"Reserve Percentage": the maximum daily arithmetic reserve
requirement imposed by the Board of Governors of the Federal Reserve
System (or any successor) under Regulation D on Eurocurrency Liabilities
(as defined in Regulation D) for the applicable Interest Period as of
the first day of such Interest Period, but subject to any changes in
such reserve requirement becoming effective during the Interest Period.
For purposes of calculating the Reserve Percentage, the reserve
requirement shall be as set forth in Regulation D without benefit of
credit for prorations, exemptions or offsets under Regulation D, and
further without regard to whether or not any Lender elects to actually
fund any Loan or portion thereof with Eurocurrency Liabilities.
"Responsible Officer": each of the chief executive officer and
the president of the Company and, with respect to financial matters, the
chief financial officer of the Company and with respect to financial
matters relating to the Predecessor Company, the chief financial officer
of the Predecessor Company.
"Revolving Credit Commitment": as to any Lender, the obligation
of such Lender to make Revolving Credit Loans to the Borrowers hereunder
in an aggregate principal amount at any one time outstanding not to
exceed the amount set forth opposite such Lender's name on Schedule 1.1
under the heading "Revolving Credit Commitment" or, in the case of any
Lender that is an Assignee, the amount of the assigning Lender's
Revolving Credit Commitment assigned to such Assignee pursuant to
subsection 10.6 (in each case as such amount may be changed from time to
time (including, without limitation, as a result of assignment by one
Lender to another) in accordance with the provisions of this Agreement).
"Revolving Credit Commitment Percentage": as to any Lender at
any time, the percentage which such Lender's Revolving Credit Commitment
then constitutes of the aggregate Revolving Credit Commitments then in
effect (or, at any time after the Revolving Credit Commitments shall
have expired or terminated, the percentage which the aggregate principal
amount of such Lender's Revolving Credit Loans then
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outstanding constitutes of the aggregate principal amount of the Loans
then outstanding).
"Revolving Credit Commitment Period": the period from and
including the Closing Date to, but not including the Revolving Credit
Termination Date, or such earlier date on which the Revolving Credit
Commitments shall terminate as provided herein.
"Revolving Credit Loans": as defined in subsection 3.1.
"Revolving Credit Note": as defined in subsection 3.7(e).
"Revolving Credit Termination Date": October 1, 2003.
"Security Documents": the collective reference to the Borrowers
Security Agreement, the Holdings Pledge Agreement and all other security
documents hereafter delivered to the Administrative Agent granting a
Lien on any asset or assets of any Person to secure the obligations and
liabilities of the Borrowers hereunder and under any of the other Loan
Documents or to secure any guarantee of any such obligations and
liabilities in the case of each such other security document, as the
same may be amended, supplemented or otherwise modified according to the
terms thereof.
"Senior Debt": All Indebtedness of the Company and its
Subsidiaries other than Subordinated Debt.
"Senior Discount Notes": the senior discount notes issued by
Holdings on the date hereof for aggregate gross proceeds of
approximately $32,500,000 on the terms and conditions set forth in the
Offering Memorandum with respect thereto dated the date hereof.
"Senior Leverage Ratio": at any date, all then outstanding Senior
Debt divided by EBITDA for the then most recently ended period of four
consecutive fiscal quarters for which financial statements shall have
been delivered to the Lenders.
"Senior Subordinated Increasing Rate Notes": as defined in
subsection 5.1(l).
"Single Employer Plan": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"Solvent": with respect to any Person on a particular date, the
condition that on such date, (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including,
without limitation, probable liability in respect of contingent
liabilities, of such Person, (b) the present fair salable value, on a
going concern basis, of the assets of such Person is not less than the
amount that will be
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required to pay the probable liability of such Person on its debts as
they become absolute and matured, (c) such Person does not intend to,
and does not believe that it will, incur debts or liabilities beyond
such Person's ability to pay as such debts and liabilities mature, and
(d) such Person is not engaged in business or a transaction, and is not
about to engage in business or a transaction, for which such Person's
property would constitute an unreasonably small amount of capital.
"Subordinated Debt": the Senior Subordinated Increasing Rate
Notes, the Conversion Securities, the High-Yield Debt (including, with
respect to the Conversion Securities and the High-Yield Debt, any
related Refinancing Indebtedness), the Subordinated Management Notes and
any other Indebtedness of the Borrowers which by its terms is expressly
subordinated to the Senior Debt pursuant to subordination provisions
approved in writing by the Required Lenders and all other terms and
conditions of which shall have been approved in writing by the Required
Lenders.
"Subordinated Management Notes": promissory notes of the Company
or the Predecessor Company (which will be assumed by the Company on the
Closing Date) issued to ▇▇. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and
those officers and employees of the Company listed on Schedule 1.2
hereto and any other officers and employees of the Company who shall
enter into an Executive Agreement with the Company subsequent to the
Original Closing Date in accordance with the provisions of Sections 3
and 4 of the Executive Agreement to which such person is a party (as
such Executive Agreements are in effect on the Original Closing Date),
provided that all the terms and conditions of such notes that are not
specified in such Section, including, without limitation, those relating
to subordination, shall be in form and substance satisfactory to the
Required Lenders, as evidenced by their prior written approval thereof,
it being understood that such notes will not be satisfactory to the
Required Lenders unless they include provisions prohibiting payments to
be made thereunder (a) during the Bridge Period and (b) if, after giving
effect to such payment, the Total Leverage Ratio would be equal to or
greater than 5.5 to 1.0 or any Event of Default under Sections 7(a),
(c), (f) and (h) shall have occurred and be continuing and provided,
further, that payments pursuant to the Subordinated Management Notes may
only be made in accordance with subsection 7.8.
"Subsidiary": as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the
time owned, or the management of which is otherwise controlled, directly
or indirectly through one or more intermediaries, or both, by such
Person. Unless otherwise expressly stated, all references to the term
Subsidiary shall be deemed to be to a Subsidiary of the Company.
"Term Loan": as defined in subsection 3.5.
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"Term Note": as defined in subsection 3.7(e).
"Total Amount Expended": when used with respect to any Permitted
Acquisition or proposed Permitted Acquisition, the total amount expended
or, as the case may be, proposed to be expended by the Company as the
purchase consideration for such Permitted Acquisition, whether in cash,
by issuance of Acquisition Debt, by assumption of debt or otherwise, but
shall exclude (i) any Equity Consideration and (ii) any "earn-out" or
similar obligations payable to the sellers based upon a percentage of
the earnings or cash flow of the business acquired.
"Total Debt Service": for any Person for any period, the sum of
(a) regularly scheduled mandatory principal payments on Indebtedness
(other than the Revolving Credit Loans) for such period, (b) required
scheduled reductions of the Revolving Credit Commitments during such
period in accordance with subsection 3.4(c) and (c) Cash Interest
Expense for such period.
"Total Indebtedness": of any Person, as of the date of
determination, all Indebtedness of such Person which, in accordance with
GAAP, would be included as indebtedness on a consolidated balance sheet
of such Person at such date.
"Total Leverage Ratio": at any date, all then outstanding Total
Indebtedness divided by EBITDA for the then most recently ended period
of four consecutive fiscal quarters for which financial statements shall
have been delivered to the Lenders.
"Tranche": the collective reference to LIBOR Loans the then
current Interest Periods with respect to all of which begin on the same
date and end on the same later date (whether or not such Loans shall
originally have been made on the same day); Tranches may be identified
as "LIBOR Tranches".
"Transferee": as defined in subsection 10.6(f).
"TWP": TWP Recapitalization Corp.
"TWP Capital II": as defined in the preamble hereto.
"Type": as to any Loan, its nature as an ABR Loan or a LIBOR
Loan.
"Working Capital": the excess of Current Assets over Current
Liabilities.
1.2 OTHER DEFINITIONAL PROVISIONS. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in any Notes or any certificate or other document made or delivered
pursuant hereto.
(b) As used herein and in any Notes, and any certificate or other
document made or delivered pursuant hereto, accounting terms relating to the
Borrowers and their
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Subsidiaries not defined in subsection 1.1 and accounting terms partly defined
in subsection 1.1, to the extent not defined, shall have the respective meanings
given to them under GAAP, provided, however, that if there shall occur any
change after the date hereof in GAAP and such change affects the method of
calculating any component used in determining compliance with the financial
covenants set forth in subsection 7.1, GAAP as in effect on the date hereof
shall be applied in computing such components and determining such compliance,
and the Company shall deliver a certificate showing in reasonable detail a
reconciliation in respect of such adjustments concurrently with the delivery of
relevant financial statements hereunder.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified. The words include, includes and including shall be deemed
to be followed by the phrase "without limitation".
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. ASSUMPTION OF THE LOANS
2.1 ASSUMPTION BY THE BORROWERS OF THE EXISTING BORROWERS'
OBLIGATIONS. To induce the Agents and the Lenders to consent to the Contemplated
Transactions, including, without limitation, the transfer of all of the
Predecessor Company's assets to the Company, the Borrowers hereby expressly
agree that, effective on the Closing Date, the Borrowers will assume and be
obligated to pay and perform all the obligations and liabilities of the Existing
Borrowers to the Agents and the Lenders under the Existing Credit Agreement and
any other agreement executed in connection with the Existing Credit Agreement,
and the parties hereto agree that effective on the Closing Date, the Existing
Credit Agreement shall be superseded, amended and restated to read in its
entirety as set forth in this Agreement.
2.2 RELEASE OF THE EXISTING BORROWERS. In consideration of the
assumption by the Borrowers provided for in subsection 2.1 hereof and subject to
the fulfillment of the conditions set forth in subsection 5.1, (i) the Existing
Borrowers shall on the Closing Date be fully released from all their respective
obligations and liabilities under the Existing Credit Agreement, the Existing
Borrowers Security Agreement and any other Loan Documents, as such term is
defined in the Existing Credit Agreement (together with the Existing Borrowers
Security Agreement, the "Existing Loan Documents"), (ii) all Liens created by
the Existing Loan Documents on assets of the Existing Borrowers that are not
transferred to the Company on the Closing Date shall be released as of the
Closing Date, and all assets transferred by the Predecessor Company to the
Company shall be transferred subject to the Lien created by the Existing Loan
Documents, but the Existing Borrowers shall be released from all obligations and
liabilities with respect to such Liens on such transferred
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assets (which assets shall thereafter be subject to Liens pursuant to the
Borrowers Security Agreement) and (iii) the Lenders hereby consent to the
Contemplated Transactions. However, notwithstanding the foregoing, if any assets
of the Predecessor Company are not transferred to the Company on or prior to Day
45 and such failure to transfer shall result in any of the representations and
warranties set forth in Section 4 being untrue in any material respect on the
date that is 46 days after the Closing Date, then on such 46th day the releases
provided for in the preceding sentence shall be automatically revoked and the
obligations, liabilities and Liens of the Existing Borrowers under the Existing
Credit Agreement and the Existing Loan Documents shall be automatically
reinstated (provided that the reinstated amount of such obligations and
liabilities, the recourse with respect to such obligations and liabilities, and
such Liens shall be limited to the assets not so transferred to the Company and
only for so long as the failure to effect such transfer shall cause any of such
representations and warranties to continue to be untrue). The Lenders will on
the Closing Date deliver to the Company, marked cancelled, all promissory notes
delivered to them pursuant to the Existing Credit Agreement (it being understood
that such delivery shall not reflect a satisfaction of the indebtedness
evidenced thereby but shall reflect the full release of the Existing Borrowers
from all of their respective obligations and liabilities under the Existing
Credit Agreement and the assumption by the Borrowers of all such obligations and
liabilities as provided in subsection 2.1, the Lenders being entitled to receive
new promissory notes evidencing such indebtedness pursuant to subsection
3.7(e)). The Administrative Agent will, on the day which is 46 days following
the Closing Date (so long as the release of the Existing Borrowers shall not
have been revoked in accordance with the above provisions of this paragraph),
execute and deliver to the Predecessor Company all such UCC-3 forms and other
instruments necessary to reflect the release provided for in this paragraph as
shall be reasonably requested by the Predecessor Company and submitted to the
Administrative Agent on or prior to such 46th day. The Borrowers understand and
agree that the release of the Existing Borrowers from their obligations and
liabilities under the Existing Borrowers Security Agreement is not intended to
release any assets of the Predecessor Company that are transferred to the
Company from the Lien originally created by the Existing Borrowers Security
Agreement and that such Lien shall continue against the Borrowers (but not the
Existing Borrowers) on such transferred assets and be governed by the provisions
of the Borrowers Security Agreement.
SECTION 3. AMOUNT AND TERMS OF COMMITMENTS
3.1 REVOLVING CREDIT COMMITMENTS. (a) Subject to the terms and
conditions hereof, each Lender severally agrees to make revolving credit loans
("Revolving Credit Loans") to the Borrowers from time to time during the
Revolving Credit Commitment Period in an aggregate principal amount at any one
time outstanding not to exceed the amount of such Lender's Revolving Credit
Commitment. During the Revolving Credit Commitment Period the Borrowers may use
the Revolving Credit Commitments by borrowing, prepaying the Revolving Credit
Loans in whole or in part, and reborrowing, all in accordance with the terms and
conditions hereof;
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(b) The Revolving Credit Loans may from time to time be (i) LIBOR
Loans, (ii) ABR Loans or (iii) a combination thereof, as determined by the
Borrowers and notified to the Administrative Agent in accordance with
subsections 3.2 and 3.9, provided that no Revolving Credit Loan shall be made as
a LIBOR Loan after the day that is one month prior to the Revolving Credit
Termination Date.
3.2 PROCEDURE FOR REVOLVING CREDIT BORROWING. The Borrowers may
borrow under the Revolving Credit Commitments during the Revolving Credit
Commitment Period on any Business Day, provided that the Borrowers shall give
the Administrative Agent irrevocable written notice (which notice must be
received by the Administrative Agent prior to 12:00 Noon, New York City time,
(a) three Business Days prior to the requested Borrowing Date, if all or any
part of the requested Revolving Credit Loans are to be initially LIBOR Loans or
(b) one Business Day prior to the requested Borrowing Date, otherwise),
specifying (i) the amount to be borrowed, (ii) the requested Borrowing Date,
(iii) whether the borrowing is to be of LIBOR Loans, ABR Loans or a combination
thereof and (iv) if the borrowing is to be entirely or partly of LIBOR Loans,
the respective amounts of each such Type of Loan and the respective lengths of
the initial Interest Periods therefor. Each borrowing under the Revolving Credit
Commitments shall be in an amount equal to $1,000,000 or a whole multiple of
$100,000 in excess thereof. Upon receipt of any such notice from the Borrowers,
the Administrative Agent shall promptly notify each Lender thereof. Upon receipt
of such notice from the Administrative Agent, each Lender will make the amount
of its pro rata share of each borrowing available to the Administrative Agent
for the account of the Borrowers at the office of the Administrative Agent
specified in subsection 10.2 prior to 11:00 a.m., New York City time, on the
Borrowing Date requested by the Borrowers in funds immediately available to the
Administrative Agent. Such borrowing will then be made available to the
Borrowers by the Administrative Agent crediting the account of the Company on
the books of such office with the aggregate of the amounts made available to the
Administrative Agent by the Lenders and in like funds as received by the
Administrative Agent.
3.3 FEES. The Borrowers jointly and severally agree to pay to the
Administrative Agent for the account of each Lender a commitment fee for the
period from and including the first day of the Revolving Credit Commitment
Period to the Revolving Credit Termination Date, computed at the rate of 1/2 of
1% per annum on the average daily amount of the Available Commitment of such
Lender during the period for which payment is made, payable quarterly in arrears
on the first day of each January, April, July and October and on the Revolving
Credit Termination Date or such earlier date as the Revolving Credit Commitments
shall terminate as provided herein, commencing on the first of such dates to
occur after the Original Closing Date.
3.4 TERMINATION OR REDUCTION OF REVOLVING CREDIT COMMITMENTS. (a)
The Borrowers shall have the right, upon not less than three Business Days'
notice to the Administrative Agent, to terminate the Revolving Credit
Commitments or, from time to time, to reduce the amount of the Revolving Credit
Commitments. Any such reduction shall be in
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an amount equal to $5,000,000 or a whole multiple of $100,000 in excess thereof
and shall reduce permanently the Revolving Credit Commitments then in effect.
(b) The Revolving Credit Commitments shall automatically be
permanently be reduced as set forth in the following paragraph (c) and as set
forth in subsection 3.8.
(c) The Revolving Credit Commitments shall automatically be
permanently reduced according to the following schedule, commencing on January
1, 2000, by the amount set forth below opposite each such date:
January 1, 2000 $1,500,000
April 1, 2000 $1,500,000
July 1, 2000 $1,500,000
October 1, 2000 $1,500,000
January 1, 2001 $1,500,000
April 1, 2001 $1,500,000
July 1, 2001 $1,500,000
October 1, 2001 $1,500,000
January 1, 2002 $1,500,000
April 1, 2002 $1,500,000
July 1, 2002 $1,500,000
October 1, 2002 $1,500,000
January 1, 2003 $5,500,000
April 1, 2003 $5,500,000
July 1, 2003 $5,500,000
October 1, 2003 $5,500,000
Each such reduction shall be accompanied by prepayment of the Revolving Credit
Loans (together with fees and interest accrued thereon to the date of such
prepayment and any additional amounts owing under subsection 3.18) to the
extent, if any, that the Revolving Credit Loans then outstanding exceed the
amount of the Revolving Credit Commitments as so reduced.
3.5 TERM LOANS. Subject to the terms and conditions hereof, each
Lender severally agrees to continue a term loan (each a "Term Loan",
collectively, the "Term Loans") to the Borrowers on the Original Closing Date in
an amount equal to the amount set forth opposite such Lender's name on Schedule
1.1 under the heading "Term Loan". The Term Loans may from time to time be (i)
LIBOR Loans, (ii) ABR Loans or (iii) a combination thereof, as determined by the
Borrowers and notified to the Administrative Agent in accordance with
subsections 3.6 and 3.9.
3.6 CLOSING DATE TERM LOAN BORROWINGS. [intentionally omitted]
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3.7 REPAYMENT OF LOANS; EVIDENCE OF DEBT. (a) The Borrowers
jointly and severally hereby unconditionally promise to pay to the
Administrative Agent for the account of each Lender (i) the then unpaid
principal amount of each Revolving Credit Loan of such Lender on the Revolving
Credit Termination Date (or such earlier date on which the Revolving Credit
Loans become due and payable pursuant to Section 7), and (ii) the principal
amount of the Term Loan of such Lender, in quarterly installments on the dates
set forth on Schedule 3.7, in the aggregate principal amounts for all Lenders
set forth on said Schedule opposite the date of such installment (or the then
unpaid principal amount of such Term Loan, on the date that the Term Loans
become due and payable pursuant to Section 7 or otherwise). The Borrowers
jointly and severally hereby further agree to pay interest on the unpaid
principal amount of the Loans from time to time outstanding from the Original
Closing Date until payment in full thereof at the rates per annum, and on the
dates, set forth in subsection 3.11.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Borrowers to such
Lender resulting from each Loan of such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.
(c) The Administrative Agent shall maintain the Register pursuant
to subsection 10.6(d), and a subaccount therein for each Lender, in which shall
be recorded (i) the amount of each Revolving Credit Loan and Term Loan made
hereunder, the Type thereof and each Interest Period applicable thereto, (ii)
the amount of any principal or interest due and payable or to become due and
payable from the Borrowers to each Lender hereunder and (iii) both the amount of
any sum received by the Administrative Agent hereunder from the Borrowers and
each Lender's share thereof.
(d) The entries made in the Register and the accounts of each
Lender maintained pursuant to subsection 3.7(b) shall, to the extent permitted
by applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrowers therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the joint
and several obligation of the Borrowers to repay (with applicable interest) the
Loans made to such Borrower by such Lender in accordance with the terms of this
Agreement.
(e) The Borrowers agree that, upon the request to the
Administrative Agent by any Lender, the Borrowers will execute and deliver to
such Lender (i) a promissory note of the Borrowers evidencing the Revolving
Credit Loans of such Lender, substantially in the form of Exhibit A with
appropriate insertions as to date and principal amount (a "Revolving Credit
Note"), and/or (ii) a promissory note of the Borrowers evidencing the Term Loan
of such Lender, substantially in the form of Exhibit B with appropriate
insertions as to date and principal amount (a "Term Note").
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3.8 OPTIONAL PREPAYMENTS; MANDATORY PREPAYMENTS AND REVOLVING
CREDIT COMMITMENT REDUCTIONS. (a) The Borrowers may on the last day of any
Interest Period with respect thereto (or on any other day if the prepayment
referred to herein is accompanied by all amounts payable by the Borrowers
pursuant to subsection 3.18), in the case of LIBOR Loans, or at any time and
from time to time, in the case of ABR Loans, prepay the Loans, in whole or in
part, without premium or penalty, upon one Business Days' written notice in the
case of ABR Loans and three Business Days' written notice in the case of LIBOR
Loans to the Administrative Agent, specifying the date and amount of prepayment
and whether the prepayment is of LIBOR Loans, ABR Loans or a combination
thereof, and, if of a combination thereof, the amount allocable to each and
specifying whether the prepayment is of Term Loans, Revolving Credit Loans or a
combination thereof and, if a combination thereof, the amount allocable to each.
Upon receipt of any such notice the Administrative Agent shall promptly notify
each Lender thereof. If any such notice is given, the amount specified in such
notice shall be due and payable on the date specified therein, together with any
amounts payable pursuant to subsection 3.18. Partial optional prepayments of the
Term Loans pursuant to this subsection 3.8(a) shall be applied ratably to the
remaining installments of principal thereof. Amounts prepaid on account of the
Term Loans may not be reborrowed. Partial prepayments shall be in an aggregate
principal amount of $50,000 or a whole multiple thereof.
(b) If, subsequent to the Closing Date, either Borrower or any
Subsidiary shall receive Net Cash Proceeds from any Asset Sale and shall not
have applied all or a portion of such Net Cash Proceeds to the purchase or
acquisition of other assets within 180 days after such Asset Sale, an amount
equal to such unapplied Net Cash Proceeds shall, on the 180th day following the
receipt of such Net Cash Proceeds, be applied toward the prepayment of the Loans
and reduction of the Revolving Credit Commitments as set forth in subsection
3.8(f), provided that no prepayment or Revolving Credit Commitment reduction
shall be required pursuant to this paragraph unless the aggregate amount of all
Net Cash Proceeds from Asset Sales exceeds an amount equal to (i) $1,000,000 in
any fiscal year or (ii) $5,000,000 subsequent to the Original Closing Date (and
such prepayments shall be required only to the extent of such excess).
(c) If the Company's Total Leverage Ratio determined as of the
last day of any fiscal year, commencing with the fiscal year beginning May 1,
1998 and ending December 31, 1998, equals or exceeds 5.00 to 1.0, the Borrowers
shall, within 120 days from the end of such fiscal year, prepay the Loans and
reduce the Revolving Credit Commitments as set forth in subsection 3.8(f) in an
amount equal to 50% of Excess Cash Flow for such fiscal year.
(d) If, subsequent to the Original Closing Date, either Borrower
or any Subsidiary shall receive insurance proceeds (or proceeds from a
condemnation award) in excess of amounts used to restore or replace any affected
properties or equipment within 180 days from the date of the related loss or
condemnation, it shall promptly apply an amount equal to such excess to prepay
the Loans and reduce the Revolving Credit Commitments as set forth in subsection
3.8(f).
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(e) If the Company's Total Leverage Ratio determined as of the
date of any issuance of any equity securities of the Company or of any
incurrence of Indebtedness by the Company or any of its Subsidiaries (in each
case after giving effect to such issuance or incurrence and the application of
the proceeds thereof) equals or exceeds 5.00 to 1.0, the Borrowers shall prepay
the Loans and reduce the Revolving Credit Commitments as set forth in subsection
3.8(f) by an amount equal to (x) 100% of the Net Cash Proceeds of such equity
issuance (other than Equity Consideration used to make or finance Permitted
Acquisitions as permitted by subsection 7.10(e) and equity issuances used to
finance the repurchase of partnership interests or other equity participation
rights of departing officers or employees of the Company as permitted by
subsection 7.8(c)) and (y) to the extent that the aggregate Net Cash Proceeds of
all incurrences of Indebtedness by the Company (including the High-Yield Debt)
and its Subsidiaries permitted by this Agreement subsequent to the Original
Closing Date exceeds $100,000,000, 100% of such excess; provided, however, that
(i) if the Company's Total Leverage Ratio determined as described above is less
than 5.00 to 1.0, a mandatory prepayment of the Loans and reduction of the
Revolving Credit Commitments shall be required in accordance with this paragraph
in connection with any issuance of equity by the Company except that the
percentage referred to in clause (x) shall be reduced from 100% to 50% and (ii)
notwithstanding anything to the contrary herein, in any case described in clause
(y) where the Indebtedness incurred consists solely of High-Yield Debt or
Conversion Securities, (A) the Net Cash Proceeds thereof shall be applied to
repay any and all then outstanding Conversion Securities or Senior Subordinated
Increasing Rate Notes and (B) any surplus of such Net Cash Proceeds remaining
shall be applied solely to prepay any then outstanding Revolving Credit Loans
(and shall not be applied to prepay any Term Loans and shall not reduce the
Revolving Credit Commitments).
(f) All mandatory prepayments pursuant to subsections 3.8(b), (c)
and (d) and, except as provided in clause (ii) of the proviso thereto,
subsection 3.8(e) shall be applied first, to the permanent repayment of the Term
Loans and second, to the permanent reduction of the Revolving Credit Commitments
and, to the extent required by subsection 3.8(g), to the prepayment of Revolving
Credit Loans, in each case together with interest accrued to the date of such
prepayment and any amounts payable under subsection 3.18. Mandatory prepayments
of the Term Loans shall be applied (i) to each remaining installment of the Term
Loans in the inverse order of the maturity of such installments, in the case of
prepayments pursuant to subsections 3.8(c) and (e), and (ii) ratably to the
remaining installments of the Term Loans, in the case of prepayments pursuant to
subsections 3.8(b) and (d). Mandatory prepayments of the Term Loans may not be
reborrowed. All mandatory permanent reductions of the Revolving Credit
Commitments shall be applied to reduce the Revolving Credit Commitments in
inverse order of the Revolving Credit Commitment reductions provided for in
subsection 3.4(c) until reduced to zero.
(g) If at any time the aggregate principal amount of the
Revolving Credit Loans exceeds the aggregate Revolving Credit Commitments, the
Borrowers shall prepay the Revolving Credit Loans in an amount equal to such
excess together with interest accrued to the date of such prepayment and any
amounts payable under subsection 3.18.
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3.9 CONVERSION AND CONTINUATION OPTIONS. (a) The Borrowers may
elect from time to time to convert LIBOR Loans to ABR Loans by giving the
Administrative Agent at least two Business Days' prior irrevocable notice of
such election substantially in the form of Exhibit H, provided that any such
conversion of LIBOR Loans may only be made on the last day of an Interest Period
with respect thereto. The Borrowers may elect from time to time to convert ABR
Loans to LIBOR Loans by giving the Administrative Agent at least three Business
Days' prior irrevocable written notice of such election substantially in the
form of Exhibit H. Any such notice of conversion to LIBOR Loans shall specify
the length of the initial Interest Period or Interest Periods therefor. Upon
receipt of any such notice the Administrative Agent shall promptly notify each
Lender thereof. All or any part of outstanding LIBOR Loans and ABR Loans may be
converted as provided herein, provided that (i) no Loan may be converted into a
LIBOR Loan when any Default or Event of Default has occurred and is continuing
and the Administrative Agent has or the Required Lenders have determined that
such a conversion is not appropriate and (ii) no Loan may be converted into a
LIBOR Loan after the date that is one month prior to the Revolving Credit
Termination Date (in the case of conversions of Revolving Credit Loans) or the
date of the final installment of principal of the Term Loans.
(b) Any LIBOR Loans may be continued as such upon the expiration
of the then current Interest Period with respect thereto by the Borrowers giving
written notice to the Administrative Agent substantially in the form of Exhibit
H, in accordance with the applicable provisions of the term "Interest Period"
set forth in subsection 1.1, of the length of the next Interest Period to be
applicable to such Loans, provided that no LIBOR Loan may be continued as such
(i) when any Default or Event of Default has occurred and is continuing and the
Administrative Agent has or the Required Lenders have determined that such a
continuation is not appropriate or (ii) after the date that is one month prior
to the Revolving Credit Termination Date (in the case of continuations of
Revolving Credit Loans) or the date of the final installment of principal of the
Term Loans and provided, further, that if the Borrowers shall fail to give such
written notice or if such continuation is not permitted such Loans shall be
automatically converted to ABR Loans on the last day of such then expiring
Interest Period.
3.10 MINIMUM AMOUNTS AND MAXIMUM NUMBER OF TRANCHES. All
borrowings, conversions and continuations of Loans hereunder and all selections
of Interest Periods hereunder shall be in such amounts and be made pursuant to
such elections so that, after giving effect thereto, the aggregate principal
amount of the Loans comprising each LIBOR Tranche shall be equal to $1,000,000
or a whole multiple of $100,000 in excess thereof. In no event shall there be
more than seven LIBOR Tranches outstanding at any time.
3.11 INTEREST RATES AND PAYMENT DATES. (a) Each LIBOR Loan shall
bear interest for each day during each Interest Period with respect thereto at a
rate per annum equal to the LIBOR Rate determined for such day plus the
Applicable Margin.
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(b) Each ABR Loan shall bear interest at a rate per annum equal
to the ABR plus the Applicable Margin.
(c) Upon the occurrence and during the continuance of any Event
of Default under Section 7(a) (i) all outstanding LIBOR Loans will bear interest
at a rate per annum 2.00% in excess of the rate per annum otherwise applicable
thereto until the end of the Interest Period then in effect with respect thereto
and thereafter at a rate per annum 2.00% in excess of the ABR from time to time
in effect plus the Applicable Margin and (ii) all outstanding ABR Loans will
bear interest at a rate per annum 2.00% in excess of the ABR from time to time
in effect plus the Applicable Margin. Any interest, fees or other amounts (other
than principal) payable hereunder that are not paid when due shall bear interest
until paid in full at a rate per annum equal to the ABR from time to time in
effect plus the Applicable Margin.
(d) Interest shall be payable in arrears on each Interest Payment
Date, provided that interest accruing pursuant to paragraph (c) of this
subsection shall be payable from time to time on demand.
3.12 COMPUTATION OF INTEREST AND FEES. (a) Revolving Credit
Commitment fees and, whenever it is calculated on the basis of the ABR, interest
shall be calculated on the basis of a 365- (or 366-, as the case may be) day
year for the actual days elapsed; otherwise, interest shall be calculated on the
basis of a 360-day year for the actual days elapsed. The Administrative Agent
shall as soon as practicable notify the Company and the Lenders of each
determination of a LIBOR Rate. Any change in the interest rate on a Loan
resulting from a change in the ABR shall become effective as of the opening of
business on the day on which such change becomes effective. The Administrative
Agent shall as soon as practicable notify the Company and the Lenders of the
effective date and the amount of each such change in interest rate.
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrowers and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrowers, deliver to the
Company a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to subsection 3.11(a) or (c).
3.13 INABILITY TO DETERMINE INTEREST RATE. If prior to the first
day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrowers) that,
by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the LIBOR Rate for such
Interest Period, or
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(b) the Administrative Agent shall have received notice from the
Required Lenders that the LIBOR Rate determined or to be determined for
such Interest Period will not adequately and fairly reflect the cost to
such Lenders (as conclusively certified by such Lenders) of making or
maintaining their affected LIBOR Loans during such Interest Period and
the Borrowers shall not have entered into a written agreement providing
to the affected Lenders compensation satisfactory to such Lenders for
such inadequately and unfairly reflected cost.
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Company and the Lenders as soon as practicable thereafter. If such notice is
given (x) any LIBOR Loans requested to be made on the first day of such Interest
Period shall be made as ABR Loans, (y) any Loans that were to have been
converted on the first day of such Interest Period to LIBOR Loans shall be
converted to or continued as ABR Loans and (z) any outstanding LIBOR Loans shall
be converted, on the first day of such Interest Period, to ABR Loans. Until such
notice has been withdrawn by the Administrative Agent, no further LIBOR Loans
shall be made or continued as such, nor shall the Borrowers have the right to
convert Loans to LIBOR Loans.
3.14 PRO RATA TREATMENT AND PAYMENTS. (a) Each borrowing by the
Borrowers of Revolving Credit Loans from the Lenders hereunder, each payment by
the Borrowers on account of any commitment fee hereunder and any reduction of
the Revolving Credit Commitments of the Lenders shall be made pro rata according
to the respective Revolving Credit Commitment Percentages of the Lenders. Each
payment (including each prepayment) by the Borrowers on account of principal of
and interest on the Term Loans shall be made pro rata according to the
respective outstanding principal amounts of the Term Loans then held by the
Lenders. Each payment (including each prepayment) by the Borrowers on account of
principal of and interest on the Revolving Credit Loans shall be made pro rata
according to the respective outstanding principal amounts of the Revolving
Credit Loans then held by the Lenders. All payments (including prepayments) to
be made by the Borrowers hereunder, whether on account of principal, interest,
fees or otherwise, shall be made without set off or counterclaim and shall be
made prior to 1:00 P.M., New York City time, on the due date thereof to the
Administrative Agent, for the account of the Lenders, at the Administrative
Agent's office specified in subsection 10.2, in Dollars and in immediately
available funds. The Administrative Agent shall distribute such payments to the
Lenders promptly upon receipt in like funds as received. If any payment
hereunder becomes due and payable on a day other than a Business Day, such
payment shall be extended to the next succeeding Business Day, and, with respect
to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension.
(b) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its Revolving Credit Commitment Percentage of such
borrowing available to the Administrative Agent, the Administrative Agent may
assume that such Lender is making such amount available to the Administrative
Agent, and the Administrative Agent may, in reliance upon such assumption, make
available to the Borrowers a corresponding amount. If such
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amount is not made available to the Administrative Agent by the required time on
the Borrowing Date therefor, such Lender shall pay to the Administrative Agent,
on demand, such amount with interest thereon at a rate equal to the daily
average Federal Funds Effective Rate for the period until such Lender makes such
amount immediately available to the Administrative Agent. A certificate of the
Administrative Agent submitted to any Lender with respect to any amounts owing
under this subsection shall be conclusive in the absence of manifest error. If
such Lender's Revolving Credit Commitment Percentage of such borrowing is not
made available to the Administrative Agent by such Lender within three Business
Days of such Borrowing Date, the Administrative Agent shall also be entitled to
recover such amount with interest thereon at the rate per annum applicable to
ABR Loans hereunder, on demand, from the Borrowers.
3.15 ILLEGALITY. Notwithstanding any other provision herein, if
the adoption of or any change in any Requirement of Law or in the interpretation
or application thereof shall make it unlawful for any Lender to make or maintain
LIBOR Loans as contemplated by this Agreement, (a) the commitment of such Lender
hereunder to make LIBOR Loans, continue LIBOR Loans as such and convert ABR
Loans to LIBOR Loans shall forthwith be cancelled and (b) such Lender's Loans
then outstanding as LIBOR Loans, if any, shall be converted automatically to ABR
Loans on the respective last days of the then current Interest Periods with
respect to such Loans or within such earlier period as required by law. If any
such conversion of a LIBOR Loan occurs on a day which is not the last day of the
then current Interest Period with respect thereto, the Borrowers shall pay to
such Lender such amounts, if any, as may be required pursuant to subsection
3.18.
3.16 REQUIREMENTS OF LAW. (a) If the adoption of or any change in
any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement, any Note or any LIBOR Loan
made by it, or change the basis of taxation of payments to such Lender
in respect thereof (except for Non- Excluded Taxes covered by subsection
3.17 and changes in the rate of tax on the overall net income of such
Lender);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the LIBOR Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or
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maintaining LIBOR Loans or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrowers shall be jointly and severally
obligated to promptly pay such Lender such additional amount or amounts as will
compensate such Lender for such increased cost or reduced amount receivable.
(b) If any Lender shall have determined that the adoption of or
any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder to a level below that which such Lender
or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy) by an amount deemed by such Lender to
be material, then from time to time, the Borrowers shall be jointly and
severally obligated to promptly pay to such Lender such additional amount or
amounts as will compensate such Lender for such reduction.
(c) In the event that after the date hereof a Lender is required
to maintain reserves of the type contemplated by the definition of "Reserve
Percentage", such Lender may require the Borrowers, jointly and severally, to
pay, promptly after receiving notice of the amount due, additional interest on
the related LIBOR Loan of such Lender at a rate per annum determined by such
Lender up to but not exceeding the excess of (i) (A) the applicable LIBOR Rate
divided by (B) one minus the Reserve Percentage over (ii) the applicable LIBOR
Rate.
(d) If any Lender becomes entitled to claim any additional
amounts or additional interest pursuant to this subsection, it shall promptly
notify the Company (with a copy to the Administrative Agent) of the event by
reason of which it has become so entitled; provided that the Borrowers shall not
be required to compensate a Lender pursuant to this subsection for any
additional amounts or additional interest incurred more than three months prior
to the date on which such Lender notifies the Company of such event giving rise
to such additional amounts or additional interest and of such Lender's intention
to make claim therefor under this subscription; and provided, further, that, if
any adoption or change of any Requirement in Law or other event giving rise to
such claim for additional amounts is retroactive, then the three-month period
referred to above shall be extended to include the period of retroactive effect
thereof. A certificate as to any additional amounts payable pursuant to this
subsection submitted by such Lender to the Company (with a copy to the
Administrative Agent) shall be conclusive in the absence of manifest error. The
agreements in this subsection shall survive the termination of this Agreement
and the payment of the Loans and all other amounts payable hereunder.
3.17 TAXES. (a) All payments made by the Borrowers under this
Agreement and any Notes shall be made free and clear of, and without deduction
or withholding for or on account of, any present or future income, stamp or
other taxes, levies,
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imposts, duties, charges, fees, deductions or withholdings, now or hereafter
imposed, levied, collected, withheld or assessed by any Governmental Authority,
excluding net income taxes and franchise or similar taxes (imposed in lieu of
net income taxes) imposed on any Agent or Lender as a result of a present or
former connection between such Agent or Lender and the jurisdiction of the
Governmental Authority imposing such tax or any political subdivision or taxing
authority thereof or therein (other than any such connection arising solely from
such Agent or Lender having executed, delivered or performed its obligations or
received a payment under, or enforced, this Agreement or any Note). If any such
non-excluded taxes, levies, imposts, duties, charges, fees deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts
payable to any Agent or Lender hereunder or under any Note, the amounts so
payable to any Agent or Lender shall be increased to the extent necessary to
yield to any Agent or Lender (after payment of all Non-Excluded Taxes) interest
or any such other amounts payable hereunder at the rates or in the amounts
specified in this Agreement, provided, however, that the Borrowers shall not be
required to increase any such amounts payable to any Lender that is not
organized under the laws of the United States of America or a state thereof if
such Lender fails to comply with the requirements of paragraph (b) of this
subsection. Whenever any Non-Excluded Taxes are payable by the Borrowers, as
promptly as possible thereafter the Borrowers shall send to the Administrative
Agent for its own account or for the account of such Lender, as the case may be,
a certified copy of an original official receipt received by the Borrowers
showing payment thereof. If the Borrowers fail to pay any Non-Excluded Taxes
when due to the appropriate taxing authority or fails to remit to the
Administrative Agent the required receipts or other required documentary
evidence, the Borrowers shall be jointly and severally obligated to indemnify
the Agents and the Lenders for any incremental taxes, interest or penalties that
may become payable by either Agent or any Lender as a result of any such
failure. The agreements in this subsection shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.
(b) Each Lender that is not incorporated under the laws of the
United States of America or a state thereof shall:
(i) deliver to the Company and the Administrative Agent (A)
two duly completed copies of United States Internal Revenue Service Form
1001 or 4224, or successor applicable form, as the case may be, and (B)
an Internal Revenue Service Form W-8 or W-9, or successor applicable
form, as the case may be;
(ii) deliver to the Company and the Administrative Agent two
further copies of any such form or certification on or before the date
that any such form or certification expires or becomes obsolete and
after the occurrence of any event requiring a change in the most recent
form previously delivered by it to the Company; and
(iii) obtain such extensions of time for filing and complete
such forms or certifications as may reasonably be requested by the
Borrowers or the Administrative Agent;
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unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender so advises the Company and the
Administrative Agent. Such Lender shall certify (i) in the case of a Form 1001
or 4224, that it is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes and (ii) in
the case of a Form W-8 or W-9, that it is entitled to an exemption from United
States backup withholding tax. Each Person that shall become a Lender or a
Participant pursuant to subsection 10.6 shall, upon the effectiveness of the
related transfer, be required to provide all of the forms and statements
required pursuant to this subsection, provided that in the case of a Participant
such Participant shall furnish all such required forms and statements to the
Lender from which the related participation shall have been purchased.
3.18 INDEMNITY. The Borrowers jointly and severally agree to
indemnify each Lender and to hold each Lender harmless from any loss or expense
which such Lender may sustain or incur as a consequence of (a) default by the
Borrowers in making a borrowing of, conversion into or continuation of LIBOR
Loans after the Borrowers have given a notice requesting the same in accordance
with the provisions of this Agreement, (b) default by the Borrowers in making
any prepayment after the Borrowers have given a notice thereof in accordance
with the provisions of this Agreement or (c) the making of a prepayment of LIBOR
Loans on a day which is not the last day of an Interest Period with respect
thereto. Such indemnification may include an amount equal to the excess, if any,
of (i) the amount of interest which would have accrued on the amount so prepaid,
or not so borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
such Interest Period (or, in the case of a failure to borrow, convert or
continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Loans provided
for herein (excluding, however, the Applicable Margin included therein, if any)
over (ii) the amount of interest (as reasonably determined by such Lender) which
would have accrued to such Bank on such amount by placing such amount on deposit
for a comparable period with leading banks in the interbank eurodollar market.
This covenant shall survive the termination of this Agreement and the payment of
the Loans and all other amounts payable hereunder.
3.19 CHANGE OF LENDING OFFICE; MANDATORY ASSIGNMENT. (a) Each
Lender agrees that if it makes any demand for payment under subsection 3.16 or
3.17(a), or if any adoption or change of the type described in subsection 3.15
shall occur with respect to it, it will use reasonable efforts (consistent with
its internal policy and legal and regulatory restrictions and so long as such
efforts would not be disadvantageous to it, as determined in its sole
discretion) to designate a different lending office if the making of such a
designation would reduce or obviate the need for the Borrowers to make payments
under subsection 3.16 or 3.17(a), or would eliminate or reduce the effect of any
adoption or change described in subsection 3.15.
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(b) If the Borrowers shall be required to pay any additional
amounts or other payments to any Lender in accordance with subsection 3.16 or
3.17(a) or if any Lender shall, in accordance with subsection 3.15, no longer be
obligated to make or maintain Eurodollar Loans hereunder, the Borrowers may, at
their own expense and in their sole discretion, unless such Lender has
theretofore removed or cured the conditions which result in the obligation to
pay such additional amounts or other payments or which result in such
illegality, as the case may be, after reasonable notice to the Administrative
Agent and such Lender, require such Lender to transfer or assign, in whole or in
part, without recourse (in accordance with subsection 10.6), all or part of its
interests, rights and obligations under this Agreement to another bank or
financial institution reasonably acceptable to the Administrative Agent
(provided that the Borrowers, with the full cooperation of such Lender, can
identify a bank or financial institution reasonably acceptable to the
Administrative Agent which is ready, willing and able to be an Assignee with
respect thereto) which shall assume such assigned obligations (which Assignee
may be another Lender, if such Assignee Lender accepts such assignment);
provided that (A) the Assignee or the Borrowers, as the case may be, shall have
paid to such Lender in immediately available funds the principal of and interest
accrued to the date of such payment on the Loans made by it hereunder and all
other amounts owed to it hereunder, including, without limitation, any amounts
owing pursuant to subsection 3.18 and any amounts that would be owing under said
subsection if such Loans were prepaid on the date of such assignment, and (B)
such assignment does not conflict with any law, rule or regulation or order of
any Governmental Authority.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into this Agreement
and to make the Loans, the Borrowers hereby represent and warrant to the Agents
and each Lender that:
4.1 FINANCIAL CONDITION. (a) The balance sheet of the Predecessor
Company as at April 30, of each of 1995, 1996 and 1997 and the related
statements of income and of cash flows for the fiscal year ended on such date,
reported on by Ernst & Young, copies of which have heretofore been furnished to
each Lender, are complete and correct in all material respects and present
fairly in all material respects the financial condition of the Predecessor
Company as at such date, and the results of its operations and its cash flows
for the fiscal year then ended.
(b) The unaudited balance sheet of the Predecessor Company as at
July 31, 1997 and the related unaudited statements of income and of cash flows
for the three-month period ended on such date (such statements include the
deferred revenue report dated September 20, 1997), certified by a Responsible
Officer, copies of which have heretofore been furnished to each Lender, are, in
management's reasonable judgment, complete and correct in all material respects
and present fairly in all material respects the financial condition of the
Predecessor Company as at such date, and the results of its operations and
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its cash flows for the three-month period then ended (subject to normal year-end
audit adjustments and the absence of footnote disclosure).
(c) All such financial statements referred to in subsection
3.1(a) and (b), including the related schedules and notes thereto, have been
prepared in accordance with GAAP applied consistently throughout the periods
involved (except as approved by such accountants or Responsible Officer, as the
case may be, and as disclosed therein and except that the unaudited financial
statements referred to in subsection 3.1(b) may not be accompanied by notes
thereto). The Predecessor Company did not have, at the date of the most recent
balance sheet referred to above, any material Guarantee Obligation, contingent
liability or liability for taxes, or any long-term lease or unusual forward or
long-term commitment, including, without limitation, any interest rate or
foreign currency swap or exchange transaction, which is not reflected in the
foregoing statements or in the notes thereto. During the period from April 30,
1997 to and including the date hereof there has been no sale, transfer or other
disposition by Holdings (with the exception of the Contemplated Transactions) or
the Company of any material part of its business or property and no purchase or
other acquisition of any business or property (including any capital stock of
any other Person) material in relation to the financial condition of Holdings or
the Company, as the case may be, at April 30, 1997.
(d) The unaudited pro forma balance sheet of the Predecessor
Company as at July 31, 1997, and the related unaudited pro forma statements of
income and of cash flows for the three months ended on such date, certified by a
Responsible Officer, copies of which have heretofore been furnished to each
Lender, have been prepared in good faith based on reasonable assumptions for the
purposes of fairly presenting the pro forma financial condition of the
Predecessor Company as at such date after giving effect to (i) the
Recapitalization, (ii) the payment of estimated fees and expenses, financing
costs and distributions related to the transactions contemplated hereby and
thereby and (iii) the making of the Loans on the Original Closing Date in
accordance with this Agreement, as if all such transactions described in clauses
(i) through (iii) had occurred on such date.
(e) Immediately prior to the transfer of the Predecessor
Company's assets to the Company and the completion of the other Contemplated
Transactions, the Company shall have no material assets or liabilities.
4.2 NO CHANGE. (a) Since April 30, 1997, there has been no
development or event which has had or would reasonably be expected to have a
Material Adverse Effect, and (b) except (i) as permitted pursuant to subsection
7.8, (ii) as set forth on Schedule 4.2 hereto and (iii) as made on the Original
Closing Date in connection with the Recapitalization in accordance with the
terms hereof, during the period from such date to and including the date hereof
no dividends or other distributions have been declared, paid or made upon the
Capital Stock of the Predecessor Company or the Company nor has any of the
Capital Stock of the Predecessor Company or the Company been redeemed, retired,
purchased or otherwise acquired for value by the Predecessor Company or the
Company, as the case may be, other
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than the redemption of preferred partnership interests in the Predecessor
Company with the proceeds of the Senior Discount Notes.
4.3 EXISTENCE; COMPLIANCE WITH LAW. Except, until Day 45, as set
forth on the Disclosure Schedule, each Loan Party (a) is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, (b) has the power and authority, and the legal right, to own and
operate its property, to lease the property it operates as lessee and to conduct
the business in which it is currently engaged, (c) is duly qualified and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
except to the extent that failure to be so qualified or in good standing would
not reasonably be expected to have a Material Adverse Effect and (d) is in
compliance with all Requirements of Law except to the extent that the failure to
comply therewith would not, in the aggregate, be reasonably expected to have a
Material Adverse Effect.
4.4 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. Each Loan
Party has the power and authority, and the legal right, to make, deliver and
perform the Loan Documents to which it is a party and, in the case of the
Borrowers, to borrow hereunder and has taken all necessary corporate or
partnership action to authorize the execution, delivery and performance of the
Loan Documents to which it is a party and, in the case of the Borrowers, to
authorize the borrowings on the terms and conditions of this Agreement and any
Notes. Except, until Day 45, as set forth on the Disclosure Schedule, no consent
or authorization of, filing with, notice to or other act by or in respect of,
any Governmental Authority or any other Person is required in connection with
the borrowings hereunder or with the execution, delivery, performance, validity
or enforceability of the Loan Documents, except as may be required to perfect
the Liens created thereby. This Agreement has been, and each other Loan Document
to which it is a party will be, duly executed and delivered on behalf of each
Loan Party thereto. This Agreement constitutes, and each other Loan Document to
which it is a party when executed and delivered will constitute, a legal, valid
and binding obligation of each Loan Party thereto, enforceable against such Loan
Party in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
4.5 NO LEGAL BAR. Except, until Day 45, as set forth on the
Disclosure Schedule, the execution, delivery and performance of the Loan
Documents by each Loan Party thereto, the borrowings hereunder and the use of
the proceeds thereof will not violate any Requirement of Law or Contractual
Obligation (other than Contractual Obligations the failure of the Company to
have good title to which would not result in the representation set forth in
subsection 4.8 being untrue) of any Loan Party and will not result in, or
require, the creation or imposition of any Lien (other than imposed by any
Security Document) on or their respective properties or revenues pursuant to any
such Requirement of Law or Contractual Obligation or on any of the limited or
general partnership interests in the Company.
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4.6 NO MATERIAL LITIGATION. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Borrowers, threatened by or against any Loan Party or
against any of its properties or revenues (a) with respect to any of the Loan
Documents or any of the transactions contemplated hereby or thereby, or (b)
which would reasonably be expected to have a Material Adverse Effect.
4.7 NO DEFAULT. No Loan Party is in default under or with respect
to any of its Contractual Obligations in any respect which would reasonably be
expected to have a Material Adverse Effect. No Default or Event of Default has
occurred and is continuing.
4.8 OWNERSHIP OF PROPERTY; LIENS. On the Closing Date there will
be transferred by the Predecessor Company to the Company all of the following
assets owned by the Predecessor Company on the Closing Date: receivables,
customer lists and inventory located at property owned or leased by the
Predecessor Company; after giving effect to such transfer the Company will have
good title to such assets, and none of such assets will be subject to any Lien
except as permitted by subsection 7.3. Except, until Day 45, as set forth on the
Disclosure Schedule, the Borrowers have good record and marketable title in fee
simple to, or a valid leasehold interest in, all its real property, and good
title to, or a valid leasehold interest in, all its other material property
(other than real property and assets described in the preceding sentence), and
none of such property described in this sentence is subject to any Lien (except
as permitted by subsection 7.3), except insofar as the failure to have such
title or leasehold interest or the presence of any non-permitted Lien would not
reasonably be expected to have a Material Adverse Effect.
4.9 INTELLECTUAL PROPERTY. Except, until Day 45, as set forth in
the Disclosure Schedule, each Borrower owns, or is licensed to use, all
trademarks, tradenames, copyrights, technology, know-how, data bases, listing
information and processes necessary for the conduct of its business as currently
conducted except for those the failure to own or license which would not
reasonably be expected to have a Material Adverse Effect (the "Intellectual
Property"). No claim has been asserted and is pending by any Person challenging
or questioning the use of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property, nor do the Borrowers know of
any valid basis for any such claim. The use of such Intellectual Property by
each Borrower does not infringe on the rights of any Person, except for such
claims and infringements that, in the aggregate, would not reasonably be
expected to have a Material Adverse Effect.
4.10 NO BURDENSOME RESTRICTIONS. No Requirement of Law or
Contractual Obligation of any Loan Party has had or would reasonably be expected
to have a Material Adverse Effect.
4.11 TAXES. Each Loan Party has filed or caused to be filed all
tax returns which, to the knowledge of the Borrowers, are required to be filed
and has paid all taxes shown to be due and payable on said returns or on any
assessments made against it or any of its property and all other taxes, fees or
other charges imposed on it or any of its property by
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any Governmental Authority (other than any the amount or validity of which are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of the Borrowers or such Loan Party, as the case may be); no tax Lien has
been filed, and, to the knowledge of the Borrowers, no claim is being asserted,
with respect to any such tax, fee or other charge except for such claims and tax
liens that, in the aggregate, would not reasonably be expected to have a
Material Adverse Effect.
4.12 FEDERAL REGULATIONS. No part of the proceeds of any Loans
will be used for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation G or Regulation
U of the Board of Governors of the Federal Reserve System, in violation of such
regulations as now and from time to time hereafter in effect. If requested by
any Lender or the Administrative Agent, the Borrowers will furnish to the
Administrative Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form G-1 or FR Form U-1 referred to in
said Regulation G or Regulation U, as the case may be.
4.13 ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan, and
each Plan has complied in all material respects with the applicable provisions
of ERISA and the Code. No termination of a Single Employer Plan has occurred,
and no Lien in favor of the PBGC or a Plan has arisen, during such five-year
period. The present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits. Neither the Company nor any Commonly Controlled Entity
has had a complete or partial withdrawal from any Multiemployer Plan, and
neither the Company nor any Commonly Controlled Entity would become subject to
any liability under ERISA if the Company or any such Commonly Controlled Entity
were to withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made. No such Multiemployer Plan is in Reorganization or Insolvent.
4.14 INVESTMENT COMPANY ACT; OTHER REGULATIONS. Neither Borrower
is an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
Neither Borrower is subject to regulation under any Federal or State statute or
regulation (other than Regulation X of the Board of Governors of the Federal
Reserve System) which limits its ability to incur Indebtedness.
4.15 PURPOSE OF LOANS. The proceeds of the Loans shall be used by
the Borrowers (a) for working capital purposes, capital expenditures and general
corporate purposes in the ordinary course of business and (b) for Permitted
Acquisitions.
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4.16 ENVIRONMENTAL MATTERS. Except as would not reasonably be
expected to have a Material Adverse Effect, to the best knowledge of the
Borrowers:
(a) The facilities and properties owned, leased or operated by
the Borrowers (the "Properties") do not contain any Materials of Environmental
Concern in amounts or concentrations which (i) constitute a violation of, or
(ii) could reasonably be expected to give rise to liability under, any
Environmental Law;
(b) The Properties and all operations at the Properties are in
compliance with all applicable Environmental Laws, and there is no contamination
at, under or about the Properties or violation of any Environmental Law with
respect to the Properties or the business operated by the Borrowers (the
"Business") which could interfere with the continued operation of the Properties
or impair the fair saleable value thereof;
(c) The Borrowers have not received any written notice of
violation, alleged violation, non-compliance, liability or potential liability
regarding environmental matters or compliance with Environmental Laws with
regard to any of the Properties or the Business, nor do the Borrowers have
knowledge or reason to believe that any such notice will be received or is being
threatened;
(d) Materials of Environmental Concern have not been transported
or disposed of from the Properties in violation of, or in a manner or to a
location which could reasonably be expected to give rise to liability under, any
Environmental Law, nor have any Materials of Environmental Concern been
generated, treated, stored or disposed of at, on or under any of the Properties
in violation of, or in a manner that could reasonably be expected to give rise
to liability under, any applicable Environmental Law;
(e) No judicial proceeding or governmental or administrative
action is pending or, to the knowledge of the Borrowers, threatened, under any
Environmental Law to which the Borrowers are or will be named as a party with
respect to the Properties or the Business, nor are there any consent decrees or
other decrees, consent orders, administrative orders or other orders outstanding
under any Environmental Law with respect to the Properties or the Business; and
(f) There has been no release or threat of release of Materials
of Environmental Concern at or from the Properties, or arising from or related
to the operations of the Borrowers in connection with the Properties or
otherwise in connection with the Business, in violation of or in amounts or in a
manner that could reasonably be expected to give rise to liability under
Environmental Laws.
4.17 SOLVENCY. Each Borrower is, and after giving effect to the
consummation of the Recapitalization and to the incurrence of all Indebtedness
and obligations being incurred in connection herewith and therewith will be and
will continue to be, Solvent.
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4.18 ACCURACY OF INFORMATION. No statement or information
contained in this Agreement, any other Loan Document or any other document,
certificate or statement furnished in writing to the Agents or the Lenders or
any of them, by or on behalf of any Loan Party for use in connection with the
transactions contemplated by this Agreement or the other Loan Documents,
contained as of the date such statement, information, document or certificate
was so furnished any untrue statement of any fact material to the interests of
the Agents or any Lender, or omitted to state a fact necessary in order to make
the statements contained herein or therein not misleading in any respect
material to the interests of the Agents or any Lender.
4.19 EMPLOYEE MATTERS, ETC. (a) None of the employees of the
Borrowers are subject to any collective bargaining agreement, (b) except as
expressly disclosed to the Lenders prior to the making of the representation and
warranty contained herein, no petition for certification or union election is
pending with respect to the employees of any Borrower and no union or collective
bargaining unit has sought such certification or recognition with respect to the
employees of the Borrowers, and (c) there are no strikes, slowdowns, work
stoppages, unfair labor practice complaints, grievances, arbitration proceedings
or controversies pending or, to the best knowledge of the Borrowers, threatened
against either Borrower by any of its employees, other than employee grievances
or controversies arising in the ordinary course of business that would not in
the aggregate be reasonably expected to have a Material Adverse Effect and (d)
each Borrower, and to the Borrower's best knowledge, no partner or employee of
the Borrowers are subject to any employment agreement or non-competition
agreement with any former employer or any other Person which agreement would
reasonably be expected to have a Material Adverse Effect.
4.20 SECURITY DOCUMENTS. The Borrowers Security Agreement is
effective to create in favor of the Administrative Agent, for the benefit of the
Lenders, a legal, valid and enforceable security interest in the Collateral
described therein and proceeds thereof, and, after financing statements in
appropriate form are filed in the offices specified on Schedule 4 to the
Borrowers Security Agreement, the Borrowers Security Agreement shall at all
times constitute a fully perfected Lien on, and security interest in, all right,
title and interest of the Loan Parties in such Collateral and the proceeds
thereof, as security for the Obligations (as defined in the Borrowers Security
Agreement), in each case prior and superior in right to any other Person, other
than with respect to Liens expressly permitted by Section 7.3.
4.21 OWNERSHIP. Schedule 4.21 is a complete and correct list of,
as of the Closing Date, (a) the owners of the LLC interests of the Company and
(b) the owners of Holdings and each owner's respective ownership percentage. As
of the Closing Date and thereafter, all the issued and outstanding Capital Stock
of the Company will be owned by Holdings.
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SECTION 5. CONDITIONS PRECEDENT
5.1 CONDITIONS TO EFFECTIVENESS. The effectiveness of this
Agreement, and the agreement of each Lender to make any extension of credit
hereunder on the Closing Date, shall be subject to the satisfaction of the
following conditions precedent:
(a) Loan Documents. The Administrative Agent shall have received
(i) this Agreement, executed and delivered by a duly authorized officer
of each Borrower, with a counterpart for each Lender, (ii) the Borrowers
Security Agreement, executed and delivered by a duly authorized officer
of the party thereto, with a counterpart or a conformed copy for each
Lender and (iii) the Holdings Pledge Agreement, executed and delivered
by a duly authorized officer of Holdings, with a counterpart or a
conformed copy for each Lender.
(b) Related Agreements. The Administrative Agent shall have
received, with a copy for each Lender, true and correct copies,
certified as to authenticity by the Borrower, such other documents or
instruments as may be in existence and reasonably requested by the
Agents, including, without limitation, a copy of the Employment
Agreements, the Executive Agreements, the Equity Compensation Trust
Agreement and a copy of any debt instrument, security agreement or other
material contract to which the Company, Holdings or TWP Capital II may
be a party and requested by the Agents.
(c) Borrowing Certificate. The Administrative Agent shall have
received, with a counterpart for each Lender, a certificate of the
Borrowers, dated the Closing Date, substantially in the form of Exhibit
F, with appropriate insertions and attachments, satisfactory in form and
substance to the Agents, executed by the respective President or any
Vice President and the Secretary or any Assistant Secretary of each
Borrower.
(d) Proceedings of the Borrowers. The Administrative Agent shall
have received, with a counterpart for each Lender, a copy of the
resolutions and other proceedings, in form and substance satisfactory to
the Agents authorizing (i) the execution, delivery and performance of
this Agreement and the other Loan Documents to which it is a party, (ii)
the borrowings contemplated hereunder and (iii) the granting by it of
the Liens created pursuant to the Borrowers Security Agreement,
certified by the respective Secretary or an Assistant Secretary of each
Borrower as of the Closing Date, which certificate shall be in form and
substance reasonably satisfactory to the Agents and shall state that the
resolutions and other actions thereby certified have not been amended,
modified, revoked or rescinded.
(e) Borrowers and Holdings Incumbency Certificates. The
Administrative Agent shall have received, with a counterpart for each
Lender, a certificate of Holdings, the Company and TWP Capital II, dated
the Closing Date, as to the incumbency and signature of the officers of
Holdings, the Company and TWP Capital
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II executing any Loan Document reasonably satisfactory in form and
substance to the Agents, executed by the respective President or any
Vice President and the Secretary or any Assistant Secretary of Holdings,
the Company or TWP Capital II, as the case may be.
(f) Corporate and LLC Documents. The Administrative Agent shall
have received, with a counterpart for each Lender, true and complete
copies of (i) the Certificate of Formation of Limited Liability Company,
the Limited Liability Company Agreement and any other organizational
documents of Company and (ii) the certificate of incorporation and
by-laws of TWP Capital II, in each case certified as of the Closing Date
as complete and correct copies thereof by the respective Secretary or an
Assistant Secretary of the Company or TWP Capital II, as the case may
be.
(g) Legal Opinions. The Administrative Agent shall have received,
with a counterpart for each Lender the executed legal opinion of
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, counsel to the Company and TWP Capital II,
substantially in the form of Exhibit G.
(h) Actions to Perfect Liens. The Administrative Agent shall have
received (i) evidence in form and substance reasonably satisfactory to
the Administrative Agent that all filings, recordings, registrations and
other actions, including, without limitation, the filing of duly
executed financing statements on form UCC-1, necessary or, in the
opinion of the Administrative Agent, desirable to perfect the Liens
created by the Security Documents shall have been completed or that all
documents necessary to complete the foregoing shall have been executed
and delivered to the Administrative Agent.
(i) Insurance. The Agents shall have received evidence in form
and substance satisfactory to them that all of the requirements of
subsection 7.4 shall have been satisfied.
5.2 CONDITIONS TO EACH LOAN. The agreement of each Lender to make
any extension of credit requested to be made by it on any date (including,
without limitation, its initial extension of credit) is subject to the
satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the representations
and warranties made by the Loan Parties in or pursuant to the Loan
Documents shall be true and correct in all material respects on and as
of such date as if made on and as of such date.
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
Loans requested to be made on such date.
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Each borrowing by the Borrowers hereunder shall constitute a representation and
warranty by the Borrowers as of the date thereof that the conditions contained
in this subsection have been satisfied or waived in accordance with subsection
10.1.
SECTION 6. AFFIRMATIVE COVENANTS
The Borrowers hereby agree that, so long as the Revolving Credit
Commitments remain in effect or any Loan is outstanding, the Borrowers shall
and, where applicable, shall cause each Subsidiary to:
6.1 FINANCIAL STATEMENTS. Furnish to each Lender:
(a) as soon as available, but in any event within 90 days after
the end of each fiscal year of the Company, a copy of the balance sheet
of the Company and its consolidated subsidiaries as at the end of such
year and the related statements of income and retained earnings and of
cash flows for such year, setting forth in each case in comparative form
the figures for the previous year, reported on without a "going concern"
or like qualification or exception, or qualification arising out of the
scope of the audit, by Ernst & Young or other independent certified
public accountants of nationally recognized standing accompanied by a
comparison to the budget delivered pursuant to subsection 6.2(c) for
such year;
(b) as soon as available, but in any event not later than 45 days
after the end of (i) each of the first three quarterly periods of each
fiscal year of each of the Company and its consolidated Subsidiaries,
the unaudited balance sheet of each of the Company and its consolidated
Subsidiaries as at the end of such period and the related unaudited
statements of income and retained earnings and of cash flows of each of
the Company and its consolidated Subsidiaries for such period and the
portion of the fiscal year through the end of such period, setting forth
in each case in comparative forms the figures for the previous year and
for the budget delivered pursuant to subsection 6.2(c) for such year,
certified by a Responsible Officer as being fairly stated in all
material respects (subject to normal year-end audit adjustments and the
absence of footnote disclosure); and
(c) as soon as available, but in any event not later than 30 days
after the end of each calendar month, the unaudited interim balance
sheet of the Company and its consolidated Subsidiaries as at the end of
such month and the related unaudited interim statements of income and
retained earnings and of cash flows of the Company and its consolidated
Subsidiaries for such one-month period and the portion of the fiscal
year through the end of such month, setting forth in each case in
comparative form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects
(subject to normal year-end audit adjustments and the absence of
footnote disclosure);
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all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and, except for the
financial statements referred to in paragraph (c) above, in accordance with GAAP
(provided that, with respect to the financial statements referred to in
paragraphs (b) above, such statements shall be prepared in accordance with GAAP
in the judgment of senior management of the Company) applied consistently
throughout the periods reflected therein and with prior periods (except as
approved by such accountants or officer, as the case may be, and disclosed
therein and except that the unaudited financial statements referred to in
subsection 6.1(b) and (c) may not be accompanied by notes thereto) and shall be
accompanied by a management discussion and analysis in respect of the fiscal
periods reported on therein.
6.2 CERTIFICATES; OTHER INFORMATION. Furnish to each Lender:
(a) concurrently with the delivery of the financial statements
referred to in subsection 6.1(a), a certificate of the independent
certified public accountants reporting on such financial statements in
such form (if any) as may be consistent with the then general practice
of such accountants stating that in making the examination necessary
therefor no knowledge was obtained of any Default or Event of Default,
except as specified in such certificate;
(b) concurrently with the delivery of the financial statements
referred to in subsections 6.1(a) and (b), a certificate of a
Responsible Officer (a "Pricing Certificate") (i) stating that, to the
best of such Responsible Officer's knowledge except as specified in such
certificate, each of the Company, its Subsidiaries and TWP Capital II
during such period have observed or performed all of its covenants and
other agreements, and satisfied every condition, contained in this
Agreement and the other Loan Documents to be observed, performed or
satisfied by it, and that such Responsible Officer has obtained no
knowledge of any Default or Event of Default, (ii) including
calculations and information demonstrating in reasonable detail whether
or not the Borrowers have complied with the requirements of subsections
7.1, 7.2(e). 7.3(h), 7.6(b) and (e), 7.7, 7.8, 7.9 and 7.10(d) and (e)
and (iii) describing in reasonable detail any material Guarantee
Obligation, contingent liability or liability for taxes, or any
long-term lease or unusual forward or long-term commitment, in each case
which are not reflected in such financial statements;
(c) not later than thirty days prior to the end of each fiscal
year of the Company, a copy of the projections by the Company of the
operating budget and cash flow budget of the Company and its
consolidated Subsidiaries for the succeeding fiscal year, such
projections to be accompanied by a certificate of a Responsible Officer
to the effect that such projections have been prepared on the basis of
reasonable assumptions and that such Responsible Officer has no reason
to believe they are incorrect or misleading in any material respect and
by a written management discussion, in reasonable detail, of such
assumptions;
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(d) promptly upon receipt thereof, copies of all final reports
submitted to the Company by independent certified public accountants in
connection with each annual, interim or special financial audit of the
books of the Company and its consolidated Subsidiaries made by such
accountants, including, without limitation, any final comment letter
submitted by such accountants to management in connection with their
annual audit;
(e) within five days after the same are sent, copies of all
financial statements and reports which the Company sends to its
partners, and within five days after the same are filed, copies of all
financial statements and reports which the Company may make to, or file
with, the Securities and Exchange Commission or any successor or
analogous Governmental Authority; and
(f) promptly, such additional financial and other information as
any Lender may from time to time reasonably request.
6.3 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. Continue to
engage in business of the same general type as now conducted by it (or as
otherwise allowed by subsection 7.15) and preserve, renew and keep in full force
and effect its existence and take all reasonable action to maintain all rights,
privileges and franchises necessary or desirable, in the Company's opinion, in
the normal conduct of its business except as otherwise permitted pursuant to
subsection 7.5; comply with all Contractual Obligations and Requirements of Law
except to the extent that failure to comply therewith would not, in the
aggregate, reasonably be expected to have a Material Adverse Effect; and
continue in effect in all material respects its practices in respect of advance
payments as in effect on the Original Closing Date.
6.4 MAINTENANCE OF PROPERTY; INSURANCE. Keep all property useful
and necessary, in the Company's opinion, in its business in good working order
and condition (subject to normal wear and tear in the ordinary course of
business); maintain with financially sound and reputable insurance companies
insurance on all its property in at least such amounts and against at least such
risks (but including in any event public liability, product liability and
business interruption) as are usually insured against in the same general area
by companies engaged in the same or a similar business; and furnish to each
Lender, upon written request, full information as to the insurance carried.
6.5 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. Keep
proper books of records and account in which complete, true and correct entries
in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities; and permit
representatives of any Lender, upon giving prior notice to the Company, to visit
and inspect any of its properties and examine and make abstracts from any of its
books and records at any reasonable time and as often as may reasonably be
desired and to discuss the business, operations, properties and financial and
other condition of the Company, its consolidated Subsidiaries and ▇▇▇
▇▇
▇▇
▇▇▇▇▇▇▇ ▇▇ with officers and employees of such parties and with its independent
certified public accountants.
6.6 NOTICES. Promptly give notice to the Administrative Agent and
each Lender of:
(a) the occurrence of any Default or Event of Default as soon as
possible and no later than five Business Days after a Responsible
Officer of the Company knows or has reason to know thereof;
(b) any (i) default or event of default under any Contractual
Obligation of the Company or (ii) litigation, investigation or
proceeding which may exist at any time between the Company and any
Governmental Authority, which is more likely than not to be determined
adversely to the Company and, if so determined, would be reasonably
expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Company in which
the amount involved is $1,000,000 or more and not covered by insurance
or in which injunctive or similar relief is sought;
(d) (i) any release or discharge by the Company of any Material
of Environmental Concern required to be reported under Environmental
Laws to any Governmental Authority; (ii) any condition, circumstance,
occurrence or event that could result in a liability under Environmental
Laws where such liability would reasonably be expected to have a
Material Adverse Effect or would reasonably be expected to result in the
imposition of any Lien or other material restriction on the title,
ownership or transferability of any material Property; and (iii) any
proposed action to be taken by the Company that could subject the
Company to any material additional or different requirements or
liabilities under Environmental Law where such requirements or
liabilities would reasonably be expected to have a Material Adverse
Effect;
(e) the following events, as soon as possible and in any event
within 30 days after the Company knows or has reason to know thereof:
(i) the occurrence or expected occurrence of any Reportable Event with
respect to any Plan, a failure to make any required contribution to a
Plan, the creation of any Lien in favor of the PBGC or a Plan or any
withdrawal from, or the termination, Reorganization or Insolvency of,
any Multiemployer Plan or (ii) the institution of proceedings or the
taking of any other action by the PBGC or the Company or any Commonly
Controlled Entity or any Multiemployer Plan with respect to the
withdrawal from, or the terminating, Reorganization or Insolvency of,
any Plan;
(f) any development or event which would reasonably be expected
to have a Material Adverse Effect as soon as possible and no later than
five Business Days after the Company knows or has reason to know
thereof; and
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(g) the termination, resignation or replacement of either of the
chairman or the president and chief executive officer of the Company,
and (together with copies thereof) the execution of any modification of
Employment Agreement, or any new employment agreement, with any such
officer.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Company proposes to take with respect thereto.
6.7 ENVIRONMENTAL LAWS. (a) Comply with, and ensure compliance by
all tenants and subtenants, if any, with, all applicable Environmental Laws and
obtain and comply with and maintain, and ensure that all tenants and subtenants
obtain and comply with and maintain, any and all licenses, approvals,
notifications, registrations or permits required by applicable Environmental
Laws, except to the extent that failure to do so would not reasonably be
expected to have a Material Adverse Effect.
(b) Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply with all lawful orders and directives of
all Governmental Authorities regarding Environmental Laws, except, in each case,
to the extent that the failure to do so would not reasonably be expected to have
a Material Adverse Effect.
6.8 ADDITIONAL COLLATERAL; SUBSIDIARIES. (a) With respect to any
assets of the type covered by the Borrowers Security Agreement acquired after
the Closing Date, and, upon the occurrence and during the continuance of an
Event of Default and at the request of the Required Lenders, with respect to any
other assets or property of the Borrowers, as to which the Administrative Agent,
for the benefit of the Lenders, does not have a perfected Lien (i) execute and
deliver to the Administrative Agent such amendments to this Agreement or the
Borrowers Security Agreement or such other documents as the Administrative Agent
reasonably requests in order to grant to the Administrative Agent, for the
benefit of the Lenders, a security interest in such assets, (ii) take all
actions reasonably requested by the Administrative Agent to grant to the
Administrative Agent, for the benefit of the Lenders, a perfected first priority
security interest in such assets, including without limitation, the filing of
Uniform Commercial Code financing statements in such jurisdictions as may be
required by the Borrowers Security Agreement or by law or as may be requested by
the Administrative Agent and (iii) if requested by the Administrative Agent,
deliver to the Administrative Agent legal opinions relating to the matters
described in the preceding clauses (i) and (ii) to the extent such matters were
addressed in the legal opinion delivered pursuant to subsection 5.1(h), which
opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent.
(b) With respect to any Subsidiary of the Company created or acquired
after the Closing Date by the Company, (i) execute and deliver, or cause to be
executed and delivered, to the Administrative Agent a pledge agreement, in form,
scope and substance satisfactory to the Administrative Agent, granting to the
Administrative Agent, for the benefit
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of the Lenders, a perfected first priority security interest in the Capital
Stock of such Subsidiary at any time held by the Company or a Subsidiary of the
Company, (ii) deliver to the Administrative Agent the certificates representing
such Capital Stock, if any, together with undated stock powers, executed in
blank, (iii) cause such Subsidiary to execute and deliver a guarantee (which
guarantee shall be senior to all other Indebtedness of such guarantor), in form
and substance satisfactory to the Administrative Agent, in respect to all
obligations of the Borrowers hereunder and under the Loan Documents, (iv) cause
such Subsidiary to execute and deliver a security agreement, in form and
substance satisfactory to the Administrative Agent, securing such Subsidiary's
obligations under such guarantee and covering the types of assets covered by the
Borrowers Security Agreement and (v) if requested by the Administrative Agent,
deliver to the Administrative Agent legal opinions relating to the matters
described in the preceding clauses (i), (ii) and (iii), which opinions shall be
in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.
6.9 INTEREST RATE PROTECTION. Within 120 days following the
Original Closing Date, enter into Interest Rate Agreements effectively fixing or
capping for a period of at least two years the rate of interest payable on at
least 50% of the Company's Total Indebtedness (provided that, for purposes of
this subsection, the rate of interest payable on the Senior Subordinated
Increasing Rate Notes and the High-Yield Debt shall be deemed to be effectively
fixed).
SECTION 7. NEGATIVE COVENANTS
The Borrowers hereby agree that, so long as the Revolving Credit
Commitments remain in effect or any Loan is outstanding, the Borrowers shall
not, nor shall they permit any Subsidiary to, directly or indirectly:
7.1 FINANCIAL CONDITION COVENANTS.
(a) Senior Leverage. Permit the Senior Leverage Ratio of the
Company at any time during any period specified below to be greater than
the Senior Leverage Ratio set forth opposite such period below:
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Senior
Period Leverage Ratio
------ --------------
End of Bridge Period to March 31, 1999 4.00:1.00
April 1, 1999 to December 31, 1999 3.50:1.00
January 1, 2000 to December 31, 2000 3.00:1.00
January 1, 2001 to December 31, 2001 2.50:1.00
January 1, 2002 to the Facilities Termination Date 2.00:1.00
(b) Total Leverage. Permit the Total Leverage Ratio of the
Company at any time during any period specified below to be greater than
the Total Leverage Ratio set forth opposite such period below:
Total
Period Leverage Ratio
------ --------------
End of Bridge Period to March 31, 1999 6.50:1.00
April 1, 1999 to December 31, 1999 6.00:1.00
January 1, 2000 to December 31, 2000 5.50:1.00
January 1, 2001 to December 31, 2001 5.00:1.00
January 1, 2002 to December 31, 2002 4.00:1.00
January 1, 2003 to the Facilities Termination Date 3.50:1.00
(c) Maintenance of EBITDA. Permit EBITDA of the Company for the
twelve-month period of the Company ending on February 28, 1998 to be
less than $26,000,000.
(d) Cash Interest Coverage. Permit, for any period of four
consecutive fiscal quarters ending during any period specified below,
the Cash Interest Coverage Ratio to be less than the ratio set forth
opposite such period below:
Cash Interest
Period Coverage Ratio
------ --------------
Original Closing Date to December 31, 1998 1.40:1.00
January 1, 1999 to December 31, 1999 1.50:1.00
January 1, 2000 to December 31, 2000 1.75:1.00
January 1, 2001 to December 31, 2001 2.00:1.00
January 1, 2002 to the Facilities Termination Date 2.50:1.00
(e) Fixed Charge Coverage. Permit for any period of twelve
consecutive months ended on a date for which the Company is required to
deliver to the Lenders financial statements pursuant to subsection
6.1(a) or (b) the Fixed Charge Ratio to be equal to or less than 1.05 to
1.0.
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7.2 LIMITATION ON INDEBTEDNESS. Create, incur, assume or suffer
to exist any Indebtedness, except:
(a) Indebtedness of the Borrowers under this Agreement;
(b) the Senior Subordinated Increasing Rate Notes, the Conversion
Securities and subordinated unsecured high-yield Indebtedness of the
Borrowers (including any related Refinancing Indebtedness, the
"High-Yield Debt") the proceeds of which are at least sufficient, and
shall be used, to prepay the Senior Subordinated Increasing Rate Notes
or the Conversion Securities; provided that (i) the cash interest rate
payable on the High-Yield Debt shall not exceed 11.75% per annum and the
maximum interest rate payable thereon shall not exceed 15% per annum,
(ii) there shall be no scheduled payments of principal of the High-Yield
Debt prior to the date which is one year following the Facilities
Termination Date and (iii) all other terms and conditions of the
High-Yield Debt shall be substantially as set forth in the form of
indenture set forth as Exhibit G to the Bridge Securities Purchase
Agreement with any incomplete items included therein being completed in
a manner consistent with market terms for subordinated debt issued under
Rule 144A or in a public offering;
(c) Indebtedness outstanding on the Closing Date and listed on
Schedule 7.2(c);
(d) Indebtedness incurred not later than 180 days after the
acquisition of fixed or capital assets to finance the acquisition of
such fixed or capital assets (whether pursuant to a loan, a Financing
Lease or otherwise) permitted pursuant to subsection 7.9, in a principal
amount not to exceed 75% of the original purchase price of such property
at the time it was acquired, provided that the aggregate principal
amount of such Indebtedness incurred in any fiscal year of the Company
shall not exceed an amount equal to $1,000,000;
(e) Indebtedness under any Interest Rate Protection Agreement not
entered into for speculative purposes;
(f) Indebtedness of a Person which becomes a Subsidiary after the
date hereof, provided that (i) such Indebtedness existed at the time
such Person became a Subsidiary and was not created in anticipation of
the acquisition and (ii) immediately after giving effect to the
acquisition of such Person by the Company or any Subsidiary no Default
or Event of Default shall have occurred and be continuing;
(g) Acquisition Debt; and
(h) the Subordinated Management Notes.
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7.3 LIMITATION ON LIENS. Create, incur, assume or suffer to exist
any Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being contested in
good faith by appropriate proceedings, provided that adequate reserves
with respect thereto are maintained on the books of the Company in
conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 60 days or
which are being contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
(d) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case
materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of the
Company or such Subsidiary;
(f) Liens in existence on the Closing Date listed on Schedule
7.3, securing Indebtedness permitted by subsection 7.2(c), provided that
no such Lien is spread to cover any additional property after the
Closing Date and that the amount of Indebtedness secured thereby is not
increased;
(g) Liens securing Indebtedness permitted by subsection 7.2(d)
incurred to finance the acquisition of fixed or capital assets, provided
that (i) such Liens shall be created not later than 180 days after the
acquisition of such fixed or capital assets, (ii) such Liens do not at
any time encumber any property other than the property financed by such
Indebtedness, (iii) the principal amount of Indebtedness secured thereby
is not increased;
(h) additional Liens securing liabilities in an aggregate amount
not to exceed $100,000 at any time outstanding; and
(i) Liens created or modified pursuant to the Security Documents.
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7.4 LIMITATION ON GUARANTEE OBLIGATIONS. Create, incur, assume or
suffer to exist any Guarantee Obligation except (a) Guarantee Obligations in
existence on the Closing Date and listed on Schedule 7.4, (b) Guarantee
Obligations of the Company in respect of liabilities of any Subsidiary entered
into in the ordinary course of business and not prohibited by this Agreement or
any other Loan Document and (c) Guarantee Obligations of Subsidiaries entered
into in accordance with subsection 6.8 (the "Senior Subsidiary Guarantees") and
subordinated Guarantee Obligations of such Subsidiaries that are entered into in
accordance with the Bridge Securities Purchase Agreement or any indenture
pursuant to which High-Yield Debt is issued provided that such subordinated
Guarantee Obligations are subordinated to the Senior Subsidiary Guarantees on
the terms and conditions set forth in the Bridge Securities Purchase Agreement
or, as the case may be, the indenture pursuant to which High-Yield Debt is
issued.
7.5 LIMITATION ON FUNDAMENTAL CHANGES. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, or make any material change in its present method of conducting business
other than in connection with (a) the Recapitalization, (b) Permitted
Acquisitions and (c) any transaction in which TWP Capital II, the Company, the
General Partner and any holding company thereof (provided such holding company
has no liabilities) are merged, consolidated or otherwise combined.
7.6 LIMITATION ON SALE OF ASSETS. Convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables and leasehold interests), whether
now owned or hereafter acquired, or permit any Subsidiary to issue any shares of
its Capital Stock to any Person other than the Company or a wholly owned
Subsidiary, except:
(a) the sale or other disposition of obsolete or worn out
property in the ordinary course of business;
(b) the sale or other disposition of any property (other than
inventory) in the ordinary course of business at fair market value,
provided that the aggregate book value of all assets so sold or disposed
of by the Borrowers and their Subsidiaries in any period of twelve
consecutive months shall not exceed $100,000;
(c) the sale of inventory in the ordinary course of business;
(d) the sale or discount without recourse of accounts receivable,
such sale or discount arising in the ordinary course of business, at
fair market value in connection with the compromise or collection
thereof;
(e) the sale or other disposition of any property not covered by
paragraphs (a) through (d) above or the issuance by any Subsidiary of
shares of Capital Stock of such Subsidiary (any such non-excepted sale,
disposition or issuance described in this
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paragraph, a "Permitted Disposition"); provided that (i) the EBITDA
generated by or attributable to all such assets and Capital Stock sold
in any fiscal year does not exceed 10% of EBITDA for the prior fiscal
year, (ii) no Default or Event of Default exists immediately before or
after giving effect to such Permitted Disposition and (iii) any Net Cash
Proceeds not applied to purchase other assets within 180 days after the
Permitted Disposition are applied to permanently reduce the Term Loans
and the Revolving Credit Commitments in accordance with subsection 3.8;
and
(f) so long as no Default or Event of Default shall have occurred
and be continuing or would result therefrom, the transfer of any assets
by the Company to TWP Capital II and the transfer of any assets by
either Borrower to any new Subsidiary created or acquired after the
Closing Date with respect to which the requirements of subsection 6.8(c)
shall have been fulfilled and which, immediately prior to such transfer,
shall have no material obligations or liabilities.
7.7 LIMITATION ON LEASES. Permit Lease Expense for any fiscal
year of the Company to exceed $3,000,000.
7.8 LIMITATION ON DISTRIBUTIONS. Declare or pay any dividend
(other than dividends payable solely in common stock or non-redeemable preferred
stock of the Borrowers) on, or make any payment on account of, or set apart
assets for a sinking or other analogous fund for, the purchase, redemption,
defeasance, retirement or other acquisition of, any shares of any class of
Capital Stock of either Borrower or any warrants or options to purchase any such
Stock, whether now or hereafter outstanding, or make any other distribution in
respect thereof, either directly or indirectly, whether in cash or property or
in obligations of either Borrower or any Subsidiary, except:
(a) the Company may make cash distributions to Holdings, the
proceeds of which are used by Holdings to make distributions to be used
for the payment by the holders of partnership interests Holdings of
income taxes attributable to the net income of the Company in accordance
with the terms of Section 5.1(b) of the Partnership Agreement as in
effect on the Original Closing Date, provided that (i) prior to the
making of such distribution, the Company shall have delivered to the
Administrative Agent a letter in form and substance satisfactory to the
Agents from independent public accountants detailing the highest
federal, state and local tax rates applicable to the partners of
Holdings (after giving effect to deductions for such state and local
taxes applicable thereto) and (ii) the maximum percentage permitted to
be so distributed as set forth in Section 5.1(b) of the Partnership
Agreement with respect to any fiscal year of Holdings shall not exceed
the percentage representing the maximum aggregate rate set forth in
clause (i) above for such fiscal year;
(b) (i) the transactions to be made in connection with the
Recapitalization and (ii) cash distributions made to Holdings from the
sale of High-Yield Debt, the proceeds of which are used to pay off
Indebtedness created under the Bridge Securities Purchase Agreement;
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(c) distributions to Holdings for the purpose of repurchases by
Holdings of shares of its Capital Stock from departing officers or
employees or payments on Subordinated Management Notes from the proceeds
of any substantially contemporaneous issuance of shares of its Capital
Stock;
(d) so long as (i) no Default or Event of Default under Section
7(a), (c), (f) or (h) shall have occurred and be continuing or would
result therefrom and (ii) the Total Leverage Ratio after giving effect
thereto and to the incurrence of any Indebtedness in connection
therewith would be less than 5.5 to 1.0, the Company may at any time
subsequent to the Bridge Period make cash distributions to Holdings for
the purchase of shares of Holdings' Capital Stock from departing
officers and employees (including, without limitation, in accordance
with the provisions of Section 4 of the respective Executive Agreements)
and/or make payments or prepayments under any Subordinated Management
Notes, provided that the aggregate amount of such purchases and payments
shall not exceed (x) $2,000,000 in any year or (y) $10,000,000
subsequent to the Original Closing Date;
(e) to the extent that the Company does not for any reason effect
by means of a cash payment to Holdings to repurchase shares of Holdings'
Capital Stock required pursuant to Sections 3 and 4 of the respective
Executive Agreements, the Company shall be permitted to effect such
purchase by the delivery of a Subordinated Management Note in an amount
required by such Sections;
(f) the Company may make cash distributions to the Equity
Compensation Trust (or to Holdings in respect of the Equity Compensation
Trust) an amount not to exceed $5,500,000 (50% of which amount shall be
paid in October 1997 with the remaining 50% of such amount to be paid in
October 1998);
(g) so long as no Default or Event of Default shall have occurred
and be continuing or would result therefrom, the Company may, after the
fifth anniversary of the issuance of the Senior Discount Notes, pay cash
dividends to Holdings in amount sufficient to permit Holdings to make
scheduled interest payments (including payments, not to exceed $100,000
in the aggregate, to Holdings to make payments as liquidated damages to
the holders of the Senior Discount Notes under the registration rights
agreement relating to the Senior Discount Notes) on the Senior Discount
Notes (it being agreed that, for purposes of determining whether or not
a Default or Event of Default would result under subsection 7.1(e) as a
result of the payment of any cash dividend pursuant to this paragraph,
such determination will be made on a pro forma basis for the then most
recently ended period of twelve consecutive months for which the Company
shall have delivered to the Lenders financial statements pursuant to
subsection 6.1(a) or (b) assuming that such cash dividend was paid
during such period); and
(h) provided that the payment thereof would be treated as an
operating expense in the computation of Consolidated Net Income of the
Company, the
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Company may pay dividends to Holdings in amounts, when added to any
loans made for such purpose pursuant to subsection 7.10(h), that are
needed to pay the reasonable expenses (excluding the payment of interest
on indebtedness) incurred by Holdings, TWP Capital or the General
Partner in the ordinary course of its business.
7.9 LIMITATION ON CAPITAL EXPENDITURES. Make or commit to make
(by way of the acquisition of securities of a Person or otherwise) any Capital
Expenditure except for Capital Expenditures in the ordinary course of business
not exceeding, in the aggregate for the Company and its Subsidiaries during any
fiscal year of the Company, an amount equal to $2,000,000, it being understood
that (x) the Company and its Subsidiaries may carry over for one fiscal year the
amount of Capital Expenditures permitted to have been made, but not made, in the
immediately preceding fiscal year (it being agreed that, for purposes of this
clause (x), Capital Expenditures in any fiscal year of the Company shall be
deemed made first from the $2,000,000 permitted amount for such fiscal year and
then from any amount carried over into such fiscal year in accordance with this
clause (x)), and (y) repayments in any fiscal year of Indebtedness incurred
pursuant to subsection 7.2(d) shall not be included in determining the amount of
Capital Expenditures in such fiscal year for the purposes hereof to the extent
that such Indebtedness was included in determining the amount of Capital
Expenditures for the purpose hereof in the fiscal year in which such
Indebtedness was incurred.
7.10 LIMITATION ON INVESTMENTS, LOANS AND ADVANCES. Make any
advance, loan, extension of credit or capital contribution to, or purchase any
stock, bonds, notes, debentures or other securities of or any assets
constituting a business unit of, or make any other investment in, any other
Person, except:
(a) extensions of trade credit in the ordinary course of
business;
(b) acquisition of securities of a Person as a means of making
Capital Expenditures permitted pursuant to subsection 7.9, subject to
the limitations set forth therein;
(c) investments in Cash Equivalents;
(d) contributions to Holdings permitted under subsections 7.8 and
7.9;
(e) loans and advances to officers and employees in the ordinary
course of business provided that the aggregate principal amount thereof
outstanding at any time does not exceed $100,000;
(f) any acquisition by the Company or any of its Subsidiaries of
a business through the purchase or other acquisition of all or a portion
of the assets or Capital Stock of any Person provided that the business
or assets acquired fall within the restrictions of subsection 7.15 (a
"Permitted Acquisition"); provided that:
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(i) the Total Amount Expended in connection with all
Permitted Acquisitions shall not exceed (x) in the aggregate in
any fiscal year of the Company, $15,000,000 or (y) for any single
Permitted Acquisition or series of related Permitted Acquisitions
either (1) $7,5000,000, if the Total Leverage Ratio of the
Company calculated after giving effect to the proposed Permitted
Acquisition and the financing thereof is equal to or greater than
5.00 to 1.00, or (2) $10,000,000, if the Total Leverage Ratio of
the Company calculated after giving effect to the proposed
Permitted Acquisition and the financing thereof is less than 5.00
to 1.00;
(ii) no Default or Event of Default shall have
occurred and be continuing on the date thereof or after giving
effect to the proposed Permitted Acquisition, and at the request
of the Administrative Agent, the Administrative Agent shall have
received within five days prior to the consummation of such
Permitted Acquisition a certificate of a Responsible Officer of
the Company confirming such statement; and
(iii) the Lenders shall have received not later than
the date of completion of such Permitted Acquisition, (I)
available information regarding such Permitted Acquisition
(including historical and projected revenue and cash flow and
purchase price), (II) a pro forma consolidated balance sheet of
the Company and its consolidated Subsidiaries as at the end of
the most recent period for which financial statements shall have
been delivered to the Lenders pursuant to subsection 6.1(a) or
(b), adjusted to give effect to the consummation of such
Permitted Acquisition and all other Permitted Acquisitions
consummated prior to such date and any related financings and
other transactions contemplated thereby (the "Acquisition Pro
Forma Balance Sheet") which such Acquisition Pro Forma Balance
Sheet shall demonstrate compliance with the requirements of the
Loan Documents before and after giving effect to such Permitted
Acquisition through and including the Facilities Termination Date
and (III) a pro forma consolidated income statement of the
Company and its consolidated Subsidiaries for the twelve-month
period ended on the date of the Acquisition Pro Forma Balance
Sheet adjusted as set forth in clause (II) of this clause (iii);
provided, however, that notwithstanding anything to the contrary in this
subsection 7.10(e):
(I) regardless of the form of consideration or the source
of financing, the Total Amount Expended in connection with all
Permitted Acquisitions may not exceed $60,000,000 in the
aggregate during any period of four consecutive fiscal quarters
(provided that, as used in this clause (iv), "Total Amount
Expended" shall include any and all Equity Consideration used for
any Permitted Acquisition);
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(II) the Company may (subject to clauses (I) and (III) of
this proviso) make Permitted Acquisitions in any fiscal year
subject only to satisfaction of the requirements set forth in the
preceding clause (ii), so long as the Total Amount Expended in
connection with all Permitted Acquisitions during such year does
not exceed $1,000,000; and
(III) except for the currently contemplated acquisition by
the Company from NTD Publishing Inc. of directories servicing the
Seattle, Washington area, the Total Amount Expended in connection
with which does not exceed $4,500,000, neither the Company nor
any Subsidiary will be permitted to make any acquisition of
another business (whether through purchases of stock or assets or
otherwise), at any time during the Bridge Period unless the
consideration for such acquisition consists solely of Equity
Consideration;
(g) loans to officers and employees of the Company, the proceeds
of which are used to purchase Capital Stock of the Company (other than
any preferred stock or similar interest with a mandatory redemption
feature other than any such features provided for in an Executive
Agreement); and
(h) provided that the making thereof would be treated as an
operating expense in the computation of Consolidated Net Income of the
Company, the Company may make loans to Holdings in amounts, when added
to any dividends paid pursuant to subsection 7.8(h), that are needed to
pay the reasonable expenses (excluding the payment of interest on
indebtedness) incurred by Holdings, TWP Capital or the General Partner
in the ordinary course of its business.
7.11 LIMITATION ON TRANSACTIONS WITH AFFILIATES. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate unless
such transaction is (a) otherwise permitted under this Agreement, (b) in the
ordinary course of the business of the Borrowers and their Subsidiaries and (c)
upon fair and reasonable terms no less favorable to the applicable Borrower or
Subsidiary than it would obtain in a comparable arm's length transaction with a
Person which is not an Affiliate; provided that, notwithstanding anything in
this Agreement to the contrary, the Company may (i) unless a Default under
subsection 7(a) has occurred and is continuing or would result therefrom and the
Administrative Agent has or the Required Lenders have determined the payment of
management fees is not appropriate and have so notified the Company, pay
management fees in an aggregate amount not to exceed $500,000 in any fiscal year
of the Company pursuant to the Management Agreement referenced in Section 14.13
of the Purchase Agreement (the "Management Fees"), provided that if, as a result
of the continued existence of such a Default, payment of the Management Fees
otherwise due in any fiscal year is not permitted by this clause (i) to be paid
in such fiscal year, (x) such Management Fees may be paid in any subsequent
fiscal year if, after giving effect thereto, no such Default under Section 7(a)
shall have occurred and be continuing and (y) the payment of such deferred
Management Fees in such subsequent fiscal year shall be disregarded in
determining whether any other Management Fees may be paid in
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such subsequent fiscal year in accordance with the provisions of this clause
(i), and (ii) reimburse any Affiliate for amounts expended by such Affiliate in
cash on behalf of the Company or any Subsidiary.
7.12 LIMITATION ON SALES AND LEASEBACKS. Enter into any
arrangement with any Person providing for the leasing by either Borrower or any
Subsidiary of real or personal property which has been or is to be sold or
transferred by such Borrower or such Subsidiary to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of such Borrower or such
Subsidiary.
7.13 LIMITATION ON CHANGES IN FISCAL YEAR. Permit the fiscal year
of the Company to end on a day other than April 30, 1998, December 31, 1998 or
December 31 of any calendar year thereafter.
7.14 LIMITATION ON NEGATIVE PLEDGE CLAUSES. Enter into with any
Person any agreement, other than (a) this Agreement and (b) purchase money
mortgages or Financing Leases permitted by this Agreement (in which cases, any
prohibition or limitation shall only be effective against the assets financed
thereby), which prohibits or limits the ability of either Borrower or any
Subsidiary to create, incur, assume or suffer to exist any Lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired, to secure
the obligations of the Borrowers and the Subsidiaries hereunder or under any
other Loan Document.
7.15 LIMITATION ON LINES OF BUSINESS. Enter into any business,
either directly or through any Subsidiary, except for the business of providing
directory services or classified advertising.
7.16 LIMITATION ON DESIGNATED SENIOR DEBT. Permit any
Indebtedness to be designated as "Designated Senior Debt" or "Designated Senior
Indebtedness" as such terms are defined in the Bridge Securities Purchase
Agreement or any indenture pursuant to which any High-Yield Debt shall be
issued.
7.17 LIMITATION ON ACTIVITIES OF HOLDINGS. Permit Holdings to
engage in any business other than the provision of management to the Company, or
own any material assets other than its membership interest in the Company and
the Predecessor Subsidiary.
7.18 LIMITATION ON OPTIONAL PAYMENTS AND MODIFICATIONS OF
SUBORDINATED DEBT. (a) Make any optional payment or prepayment on or redemption
or defeasance of any Subordinated Debt (except for prepayments of Acquisition
Debt or, to the extent permitted by subsection 7.8, Subordinated Management
Notes), or (b) amend, modify or change, or consent or agree to any amendment,
modification or change to any of the terms relating to the payment or prepayment
of principal of or interest on, any Subordinated Debt (other than any such
amendment, modification or change which would extend the maturity or reduce the
amount of any payment of principal thereof or which would reduce the rate or
extend the date for payment of interest thereon); provided that, in connection
with any issuance of equity by the Company, if the Company's Total Leverage
Ratio, determined as described in subsection 3.8(e) is less than 5.00 to 1.0,
then the Company may apply up to
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50% of the Net Cash Proceeds from such equity issuance to prepay (i) the
High-Yield Debt in accordance with any indenture pursuant to which such
Indebtedness is issued or (ii) the Conversion Securities in accordance with the
Bridge Securities Purchase Agreement.
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrowers shall fail to pay any principal of any Loan
when due in accordance with the terms thereof or hereof; or the
Borrowers shall fail to pay any interest on any Loan, or any other
amount payable hereunder, within five days after any such interest or
other amount becomes due in accordance with the terms thereof or hereof;
or
(b) Any representation or warranty made or deemed made by either
Borrower or any other Loan Party herein or in any other Loan Document or
which is contained in any certificate, document or financial or other
written statement furnished by it at any time under or in connection
with this Agreement or any such other Loan Document shall prove to have
been incorrect in any material respect on or as of the date made or
deemed made; or
(c) Either Borrower or any other Loan Party shall default in the
observance or performance of any agreement contained in Section 6 hereof
and Section 4 of the Borrowers Security Agreement; or
(d) Either Borrower or any other Loan Party shall default in the
observance or performance of any other agreement contained in this
Agreement or any other Loan Document (other than as provided in
paragraphs (a) through (c) of this Section), and such default shall
continue unremedied for a period of 30 days after the earlier of (i) the
first date on which a Responsible Officer of the Company learns of such
default and (ii) receipt by the Company of notice thereof from an Agent
or any Lender; or
(e) Either Borrower shall (i) default in any payment of principal
of or interest of any of its Indebtedness (other than the Loans) or in
the payment of any Guarantee Obligation, beyond the period of grace (not
to exceed 30 days), if any, provided in the instrument or agreement
under which such Indebtedness or Guarantee Obligation was created, if
the aggregate amount of the Indebtedness and/or Guarantee Obligations in
respect of which such default or defaults shall have occurred is at
least $1,000,000; or (ii) default in the observance or performance of
any other agreement or condition relating to any such Indebtedness or
Guarantee Obligation or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur
or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Guarantee
Obligation (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the
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giving of notice if required, such Indebtedness to become due prior to
its stated maturity or such Guarantee Obligation to become payable; or
(f) (i) Either Borrower shall commence any case, proceeding or
other action (A) under any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency, reorganization
or relief of debtors, seeking to have an order for relief entered with
respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it
or its debts, or (B) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or
any substantial part of its assets, or either Borrower shall make a
general assignment for the benefit of its creditors; or (ii) there shall
be commenced against either Borrower any case, proceeding or other
action of a nature referred to in clause (i) above which (A) results in
the entry of an order for relief or any such adjudication or appointment
or (B) remains undismissed, undischarged or unbonded for a period of 60
days; or (iii) there shall be commenced against either Borrower any
case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process on a claim exceeding
$1,000,000 against all or any substantial part of its assets which
results in the entry of an order for any such relief which shall not
have been vacated, discharged, or stayed or bonded pending appeal within
60 days from the entry thereof; or (iv) either Borrower shall take any
action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or (iii)
above; or (v) either Borrower shall generally not, or shall be unable
to, or shall admit in writing its inability to, pay its debts as they
become due; or
(g) (i) Any Person shall engage in any "prohibited transaction"
(as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan or any Lien in favor of the PBGC or a Plan
shall arise on the assets of the Company or any Commonly Controlled
Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is, in the reasonable opinion of the Required
Lenders, likely to result in the termination of such Plan for purposes
of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA, (v) the Company or any Commonly
Controlled Entity shall, or in the reasonable opinion of the Required
Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer
Plan or (vi) any other event or condition shall occur or exist with
respect to a Plan; and in each case in clauses (i) through (vi) above,
such event or condition, together with all other such events or
conditions, if any, could have a Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against
either Borrower involving in the aggregate a liability (not paid or
fully covered by
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insurance) of $1,000,000 or more, and all such judgments or decrees
shall not have been vacated, discharged, stayed or bonded pending appeal
within 60 days from the entry thereof; or
(i) (i) Any of the Security Documents shall cease, for any
reason, to be in full force and effect, or the Borrowers or any other
Loan Party which is a party to any of the Security Documents shall so
assert or (ii) the Lien created by any of the Security Documents shall
cease to be enforceable and of the same effect and priority purported to
be created thereby; or
(j) (i) ▇▇▇▇▇▇ ▇. ▇▇▇ Equity Fund III, L.P. and its Affiliates
shall, at any time prior to the date upon which Holdings, either
Borrower or any Subsidiary to which assets shall be transferred as
permitted by subsection 7.6(f) shall have completed an initial
registered public offering of shares of its Capital Stock, (1) cease to
own, directly or indirectly, shares of Capital Stock representing at
least 20% of the equity interest in Holdings and (2) not have the power
(whether or not exercised) to elect a majority of the Board of Directors
of the Company or Holdings, or (ii) there shall occur any "Change in
Control" as such term (or any comparable term) is defined in the
indenture pursuant to which the High-Yield Debt shall be issued or (iii)
Holdings shall, at any time subsequent to the Closing Date, cease to own
99% of the ownership interests in the Company; or
(k) The representations and warranties set forth in Section 4
that are qualified by the phrase "except, until Day 45, as set forth in
the Disclosure Schedule" shall not be true and correct in all material
respects on the day that is 46 days after the Closing Date;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) of this Section with respect to either
Borrower, automatically the Revolving Credit Commitments shall immediately
terminate and the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement shall immediately become due and payable, and
(B) if such event is any other Event of Default, either or both of the following
actions may be taken: (i) with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Company, declare the Revolving
Credit Commitments to be terminated forthwith, whereupon the Revolving Credit
Commitments shall immediately terminate; and (ii) with the consent of the
Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Company,
declare the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement to be due and payable forthwith, whereupon
the same shall immediately become due and payable. Except as expressly provided
above in this Section, presentment, demand, protest and all other notices of any
kind are hereby expressly waived.
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SECTION 9. THE AGENTS
9.1 APPOINTMENT. Each Lender hereby irrevocably designates and
appoints the Administrative Agent as the administrative agent of such Lender
under this Agreement and the other Loan Documents, and each such Lender
irrevocably authorizes the Administrative Agent, in such capacity, to take such
action on its behalf under the provisions of this Agreement and the other Loan
Documents and to exercise such powers and perform such duties as are expressly
delegated to the Administrative Agent by the terms of this Agreement and the
other Loan Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent. Notwithstanding any provision to the contrary contained
elsewhere in this Agreement, the Documentation Agent shall not have any rights,
duties or responsibilities, except those expressly set forth herein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Documentation Agent.
9.2 DELEGATION OF DUTIES. The Administrative Agent and the
Documentation Agent may execute any of their respective duties under this
Agreement and the other Loan Documents by or through agents or attorneys-in-fact
and shall be entitled to advice of counsel concerning all matters pertaining to
such duties. Neither the Administrative Agent nor the Documentation Agent shall
be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
9.3 EXCULPATORY PROVISIONS. Neither the Administrative Agent, the
Documentation Agent nor any of their respective officers, directors, employees,
agents, attorneys-in-fact or Affiliates shall be (i) liable for any action
lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement or any other Loan Document (except for its or
such Person's own gross negligence or willful misconduct) or (ii) responsible in
any manner to any of the Lenders for any recitals, statements, representations
or warranties made by the Borrowers or any officer thereof contained in this
Agreement or any other Loan Document or in any certificate, report, statement or
other document referred to or provided for in, or received by the Administrative
Agent or the Documentation Agent under or in connection with, this Agreement or
any other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of the Borrowers to perform their obligations hereunder or
thereunder. Neither the Administrative Agent nor the Documentation Agent shall
be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books or records of the Borrowers.
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9.4 RELIANCE BY AGENTS. Each Agent shall be entitled to rely, and
shall be fully protected in relying, upon any Note, writing, resolution, notice,
consent, certificate, affidavit, letter, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Borrowers), independent accountants and other experts
selected by such Agent. Each Agent may deem and treat the payee of any Note as
the owner thereof for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with the Administrative
Agent. The Agents shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless they shall first
receive such advice or concurrence of the Required Lenders as they deem
appropriate or they shall first be indemnified to their satisfaction by the
Lenders against any and all liability and expense which may be incurred by them
by reason of taking or continuing to take any such action. Each Agent shall in
all cases be fully protected in acting, or in refraining from acting, under this
Agreement and the other Loan Documents in accordance with a request of the
Required Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all future holders of
the Loans.
9.5 NOTICE OF DEFAULT. Neither Agent shall be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless such Agent has received notice from a Lender or either Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall give
notice thereof to the Lenders. The Administrative Agent shall take such action
with respect to such Default or Event of Default as shall be directed by the
Required Lenders; provided that (i) the Administrative Agent shall not be
required to take any action that exposes the Administrative Agent to liability
or that is contrary to this Agreement or applicable law and (ii) unless and
until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders.
9.6 NON-RELIANCE ON AGENTS AND OTHER LENDERS. Each Lender
expressly acknowledges that neither the Administrative Agent, the Documentation
Agent nor any of their respective officers, directors, employees, agents,
attorneys-in-fact or Affiliates has made any representations or warranties to it
and that no act by either Agent hereinafter taken, including any review of the
affairs of the Borrowers, shall be deemed to constitute any representation or
warranty by such Agent to any Lender. Each Lender represents to the Agents that
it has, independently and without reliance upon the Administrative Agent, the
Documentation Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrowers and made its own decision to
make its Loans hereunder and enter into this Agreement. Each Lender also
represents that it will, independently and without reliance upon the Agents or
any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or
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not taking action under this Agreement and the other Loan Documents, and to make
such investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Borrowers. Except for notices, reports and other documents expressly required to
be furnished to the Lenders by the Administrative Agent hereunder, neither Agent
shall have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of the Borrowers which
may come into the possession of such Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates.
9.7 INDEMNIFICATION. The Lenders agree to indemnify each Agent in
its capacity as such (to the extent not reimbursed by the Borrowers and without
limiting the obligation of the Borrowers to do so), ratably according to their
respective Percentages in effect on the date on which indemnification is sought
(or, if indemnification is sought after the date upon which the Revolving Credit
Commitments shall have terminated and the Loans shall have been paid in full,
ratably in accordance with their Percentages immediately prior to such date),
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever which may at any time (including, without limitation, at any
time following the payment of the Loans) be imposed on, incurred by or asserted
against such Agent in any way relating to or arising out of, the Revolving
Credit Commitments, this Agreement, any of the other Loan Documents or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by such Agent
under or in connection with any of the foregoing; provided that no Lender shall
be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from such Agent's gross negligence or willful
misconduct. The agreements in this subsection shall survive the payment of the
Loans and all other amounts payable hereunder.
9.8 AGENTS IN THEIR INDIVIDUAL CAPACITY. Each Agent and its
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Borrowers as though such Agent were not the
Administrative or Documentation Agent, as the case may be, hereunder and under
the other Loan Documents. With respect to the Loans made by them, the Agents
shall have the same rights and powers under this Agreement and the other Loan
Documents as any Lender and may exercise the same as though they were not the
Administrative Agent and Documentation Agent, as the case may be, and the terms
"Lender" and "Lenders" shall include the Agents in their individual capacity.
9.9 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may
resign as Administrative Agent upon 10 days' notice to the Lenders. If the
Administrative Agent shall resign as Administrative Agent under this Agreement
and the other Loan Documents, then the Required Lenders shall appoint from among
the Lenders a successor agent for the Lenders, which successor agent shall be
approved by the Borrowers, whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed
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on the part of such former Administrative Agent or any of the parties to this
Agreement or any holders of the Loans. After any retiring Administrative Agent's
resignation as Administrative Agent, the provisions of this Section 8 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under this Agreement and the other Loan Documents.
9.10 RELEASES OF COLLATERAL. In connection with the sale or other
disposition of Collateral permitted under subsection 7.6, the Administrative
Agent shall, and is hereby authorized by the Lenders to, promptly, upon the
request of the Borrowers and at the sole expense of the Borrowers, take all
actions reasonably necessary to release the Collateral subject to such sale or
other disposition and shall take any other actions reasonably requested by the
Borrowers to effect the transactions permitted under subsection 7.6.
SECTION 10. MISCELLANEOUS
10.1 AMENDMENTS AND WAIVERS. Neither this Agreement nor any other
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this subsection. The
Required Lenders may, or, with the written consent of the Required Lenders, the
Administrative Agent may, from time to time, (a) enter into with the Borrowers
written amendments, supplements or modifications hereto and to the other Loan
Documents for the purpose of adding any provisions to this Agreement or the
other Loan Documents or changing in any manner the rights of the Lenders or of
the Borrowers hereunder or thereunder or (b) waive, on such terms and conditions
as the Required Lenders or the Administrative Agent, as the case may be, may
specify in such instrument, any of the requirements of this Agreement or the
other Loan Documents or any Default or Event of Default and its consequences;
provided, however, that no such waiver and no such amendment, supplement or
modification shall (i) reduce the amount or extend the scheduled date of
maturity of any Loan or of any installment thereof, or reduce the stated rate of
any interest or fee payable hereunder or extend the scheduled date of any
payment thereof or increase the amount or extend the expiration date of any
Lender's Revolving Credit Commitment or amend the provisions of the first three
sentences of subsection 3.14(a), in each case without the consent of each
Lender, or (ii) amend, modify or waive any provision of this subsection or
reduce the percentage specified in the definition of Required Lenders, or
consent to the assignment or transfer by the Borrowers of any of their rights
and obligations under this Agreement and the other Loan Documents or release all
or substantially all of the Collateral, in each case without the written consent
of all the Lenders, or (iii) amend, modify or waive any provision of Section 8
without the written consent of the then Administrative Agent. Any such waiver
and any such amendment, supplement or modification shall apply equally to each
of the Lenders and shall be binding upon the Borrowers, the Lenders, the
Administrative Agent and all future holders of the Loans. In the case of any
waiver, the Borrowers, the Lenders and the Administrative Agent shall be
restored to their former positions and rights hereunder and under the other Loan
Documents, and any Default or Event of Default waived shall be deemed to be
cured and not continuing; no such waiver shall extend to any subsequent or other
Default or Event of Default or impair any right consequent thereon.
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10.2 NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission), and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made when delivered, or three days after
being deposited in the mail, postage prepaid, or, in the case of telecopy
notice, when received, addressed as follows in the case of the Borrowers and the
Administrative Agent, and as set forth in Schedule 1.1 in the case of the other
parties hereto, or to such other address as may be hereafter notified by the
respective parties hereto:
The Borrowers: TransWestern Publishing Company LLC
TWP Capital Corp. II
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇.
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
The Administrative
Agent: Canadian Imperial Bank of Commerce
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Canadian Imperial Bank of Commerce
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Agency Services
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to subsection 3.2, 3.4, 3.6, 3.8, 3.9 or 3.14 shall not
be effective until received.
10.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and
no delay in exercising, on the part of the Administrative Agent or any Lender,
any right, remedy, power or privilege hereunder or under the other Loan
Documents shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
10.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans hereunder.
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10.5 PAYMENT OF EXPENSES AND TAXES. The Borrowers jointly and
severally agree (a) to pay or reimburse the Agents for all their respective
out-of-pocket costs and expenses incurred in connection with the development,
preparation, syndication and execution of, and any amendment, supplement or
modification to, this Agreement and the other Loan Documents and any other
documents prepared in connection herewith or therewith, and the consummation and
administration of the transactions contemplated hereby and thereby, including,
without limitation, the reasonable fees and disbursements of counsel to the
Agents, (b) to pay or reimburse the Lenders and the Agents for their reasonable
costs and expenses incurred in connection with the enforcement or preservation
of any rights under this Agreement, the other Loan Documents and any such other
documents, including, without limitation, the fees and disbursements of counsel
(including the allocated fees and expenses of in-house counsel) to the Lenders
and the Agents, (c) to pay, indemnify, and hold each Lender and each of the
Agents harmless from, any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other taxes, if any, which may be payable or determined to be payable
in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Loan Documents and any such other documents, and (d)
to pay, indemnify, and hold each Lender and each of the Agents harmless from and
against any and all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, the other Loan Documents or
the use of the proceeds of the Loans in connection with the Recapitalization and
any such other documents, including, without limitation, any of the foregoing
relating to the violation of, noncompliance with or liability under, any
Environmental Law applicable to the operations of the Company or any of the
Properties (all the foregoing in this clause (d), collectively, the "indemnified
liabilities"), provided, that the Borrowers shall have no obligation hereunder
to the Agents or any Lender with respect to indemnified liabilities arising from
(i) the gross negligence or willful misconduct of the Agents or any such Lender
or (ii) legal proceedings commenced against the Agents or any such Lender by any
security holder or creditor thereof arising out of and based upon rights
afforded any such security holder or creditor solely in its capacity as such.
The agreements in this subsection shall survive repayment of the Loans and all
other amounts payable hereunder.
10.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS. (a)
This Agreement shall be binding upon and inure to the benefit of the Borrowers,
the Lenders, the Agents and their respective successors and assigns, except that
the Borrowers may not assign or transfer any of their rights or obligations
under this Agreement without the prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time sell to one
or more banks or other entities ("Participants") participating interests in any
Loan owing to such Lender, any Revolving Credit Commitment of such Lender or any
other interest of such Lender hereunder and under the other Loan Documents. In
the event of any such sale by a Lender of a participating interest to a
Participant, such Lender's obligations under this Agreement to the
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other parties to this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain the
holder of any such Loan for all purposes under this Agreement and the other Loan
Documents, and the Borrowers and the Administrative Agent shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. The Borrowers
agree that if amounts outstanding under this Agreement are due or unpaid, or
shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall, to the maximum extent
permitted by applicable law, be deemed to have the right of setoff in respect of
its participating interest in amounts owing under this Agreement to the same
extent as if the amount of its participating interest were owing directly to it
as a Lender under this Agreement, provided that, in purchasing such
participating interest, such Participant shall be deemed to have agreed to share
with the Lenders the proceeds thereof as provided in subsection 10.7(a) as fully
as if it were a Lender hereunder. The Borrowers also agree that each Participant
shall be entitled to the benefits of subsections 3.16, 3.17 and 3.18 with
respect to its participation in the Revolving Credit Commitments and the Loans
outstanding from time to time as if it was a Lender; provided that, in the case
of subsection 3.17, such Participant shall have complied with the requirements
of said subsection and provided, further, that no Participant shall be entitled
to receive any greater amount pursuant to any such subsection than the
transferor Lender would have been entitled to receive in respect of the amount
of the participation transferred by such transferor Lender to such Participant
had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time and from
time to time assign to any Lender or any affiliate thereof or, with the consent,
unless an Event of Default has occurred and is continuing, of the Borrowers
(except in the case of assignments made by CIBC and First Union National Bank in
connection with its initial syndication of the Loans and Revolving Credit
Commitments) and the Administrative Agent (which consents shall not be
unreasonably withheld or delayed) to an additional bank or financial institution
(an "Assignee") all or any part of its rights and obligations under this
Agreement and the other Loan Documents pursuant to an Assignment and Acceptance,
substantially in the form of Exhibit E, executed by such Assignee, such
assigning Lender and delivered to the Administrative Agent for its acceptance
and recording in the Register, provided that, in the case of any such assignment
to an additional bank or financial institution, the sum of the aggregate
principal amount of the Loans and the aggregate amount of the Available
Commitment being assigned and, if such assignment is of less than all of the
rights and obligations of the assigning Lender, the sum of the aggregate
principal amount of the Loans and the aggregate amount of the Available
Commitment remaining with the assigning Lender are each not less than $5,000,000
(or such lesser amount as may be agreed to by the Borrowers and the
Administrative Agent). Upon such execution, delivery, acceptance and recording,
from and after the effective date determined pursuant to such Assignment and
Acceptance, (x) the Assignee thereunder shall be a party hereto and, to the
extent provided in such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder with a Revolving Credit Commitment as set
forth therein, and (y) the assigning Lender thereunder shall, to the extent
provided in such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance
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covering all or the remaining portion of an assigning Lender's rights and
obligations under this Agreement, such assigning Lender shall cease to be a
party hereto). Notwithstanding any provision of this paragraph (c) and paragraph
(e) of this subsection, the consent of the Borrowers shall not be required, and,
unless requested by the Assignee and/or the assigning Lender, new Notes shall
not be required to be executed and delivered by the Borrowers, for any
assignment which occurs at any time when any of the events described in Section
7(f) shall have occurred and be continuing. Notwithstanding any provision of
this paragraph (c) and paragraph (e) of this subsection, no Assignment and
Acceptance shall be effective unless and until it shall have been accepted by
the Administrative Agent and recorded in the Register as provided in paragraph
(d) of this subsection.
(d) The Administrative Agent, on behalf of the Borrowers, shall
maintain at the address of the Administrative Agent referred to in subsection
10.2 a copy of each Assignment and Acceptance delivered to it and a register
(the "Register") for the recordation of the names and addresses of the Lenders
and the Revolving Credit Commitments of, and principal amounts of the Loans
owing to, each Lender from time to time. The entries in the Register shall be
conclusive, in the absence of manifest error, and the Borrowers, the
Administrative Agent and the Lenders may (and, in the case of any Loan or other
obligation hereunder not evidenced by a Note, shall) treat each Person whose
name is recorded in the Register as the owner of a Loan or other obligation
hereunder as the owner thereof for all purposes of this Agreement and the other
Loan Documents, notwithstanding any notice to the contrary. Any assignment of
any Loan or other obligation hereunder not evidenced by a Note shall be
effective only upon appropriate entries with respect thereto being made in the
Register. The Register shall be available for inspection by the Borrowers or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of an Assignment and Acceptance executed by
an assigning Lender and an Assignee together with payment to the Administrative
Agent of a registration and processing fee of $3,500, the Administrative Agent
shall (i) promptly accept such Assignment and Acceptance and (ii) on the
effective date determined pursuant thereto record the information contained
therein in the Register and give notice of such acceptance and recordation to
the Lenders and the Borrowers.
(f) The Borrowers authorize each Lender to disclose, subject to
the provisions of subsection 10.15, to any Participant or Assignee (each, a
"Transferee") and any prospective Transferee any and all financial information
in such Lender's possession concerning the Borrowers and its Affiliates which
has been delivered to such Lender by or on behalf of the Borrowers pursuant to
this Agreement or which has been delivered to such Lender by or on behalf of the
Borrowers in connection with such Lender's credit evaluation of the Borrowers
and its Affiliates prior to becoming a party to this Agreement.
(g) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this subsection concerning assignments of
Loans and Notes relate only to absolute assignments and that such provisions do
not prohibit assignments creating security interests, including, without
limitation, any pledge or assignment by a Lender of any Loan or Note to any
Federal Reserve Bank in accordance with applicable law.
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10.7 ADJUSTMENTS; SET-OFF. (a) If any Lender (a "benefitted
Lender") shall at any time receive any payment of all or part of its Loans, or
interest thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or proceedings of
the nature referred to in Section 7(f), or otherwise), in a greater proportion
than any such payment to or collateral received by any other Lender, if any, in
respect of such other Lender's Loans, or interest thereon, such benefitted
Lender shall purchase for cash from the other Lenders a participating interest
in such portion of each such other Lender's Loans, or shall provide such other
Lenders with the benefits of any such collateral, or the proceeds thereof, as
shall be necessary to cause such benefitted Lender to share the excess payment
or benefits of such collateral or proceeds ratably with each of the Lenders;
provided, however, that if all or any portion of such excess payment or benefits
is thereafter recovered from such benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to the
Borrowers, any such notice being expressly waived by the Borrowers to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Borrowers hereunder (whether at the stated maturity, by acceleration or
otherwise) to set-off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Borrowers. Each Lender agrees
promptly to notify the Borrowers and the Administrative Agent after any such
set-off and application made by such Lender, provided that the failure to give
such notice shall not affect the validity of such set-off and application.
10.8 COUNTERPARTS. This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts
(including by facsimile transmission), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. A set of the
copies of this Agreement signed by all the parties shall be lodged with the
Borrowers and the Administrative Agent.
10.9 SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.10 INTEGRATION. This Agreement and the other Loan Documents
represent the agreement of the Borrowers, the Agents and the Lenders with
respect to the subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Agents or any Lender relative to subject
matter hereof not expressly set forth or referred to herein or in the other Loan
Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY,
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AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.
10.12 SUBMISSION TO JURISDICTION; WAIVERS. Each Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgement
in respect thereof, to the non-exclusive general jurisdiction of the
Courts of the State of New York, the courts of the United States of
America for the Southern District of New York, and appellate courts from
any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have
to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such Borrower at its address set forth in subsection 10.2 or
at such other address of which the Administrative Agent shall have been
notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit
the right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this subsection any special, exemplary, punitive or
consequential damages.
10.13 ACKNOWLEDGEMENTS. Each Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution
and delivery of this Agreement and the other Loan Documents;
(b) neither of the Agents nor any Lender has any fiduciary
relationship with or duty to such Borrower arising out of or in
connection with this Agreement or any of the other Loan Documents, and
the relationship between the Agents and Lenders, on one hand, and such
Borrower, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Lenders or among the Borrowers and the Lenders.
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10.14 PARTNER LIABILITY. None of the limited partners (or any of
their respective heirs, representatives, successors or assigns) of Holdings will
have any personal liability for the payment of the Loans or any other
obligations secured pursuant to the Security Documents or for the performance of
any obligations of the Borrowers or any Subsidiaries under this Agreement,
whether arising by law or contract.
10.15 CONFIDENTIALITY. Each Lender agrees to keep confidential
any written information (a) provided to it by or on behalf of the Borrowers
pursuant to or in connection with this Agreement or (b) obtained by such Lender
based on a review of the books and records of the Borrowers; provided that
nothing herein shall prevent any Lender from disclosing any such information (i)
to the Agents or any other Lender, (ii) to any Transferee which agrees to comply
with the provisions of this subsection, (iii) to its employees, directors,
agents, attorneys, accountants and other professional advisors, (iv) upon the
request or demand of any Governmental Authority having jurisdiction over such
Lender, (v) in response to any order of any court or other Governmental
Authority or as may otherwise be required pursuant to any Requirement of Law,
(vi) which has been publicly disclosed other than in breach of this Agreement,
or (vii) in connection with the exercise of any remedy hereunder.
10.16 WAIVERS OF JURY TRIAL. THE BORROWERS, THE AGENTS AND THE
LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN.
[rest of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered by their proper and duly authorized officers
as of the day and year first above written.
TRANSWESTERN PUBLISHING COMPANY LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------
Title: Vice President and Chief Financial
Officer
TWP CAPITAL CORP. II
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------
Title: Vice President and Chief Financial
Officer
CANADIAN IMPERIAL BANK OF COMMERCE,
NEW YORK AGENCY, as Administrative Agent
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------------
Title: Director, CIBC ▇▇▇▇▇▇▇▇▇▇▇ Corp.,
as Agent
CIBC INC., as a Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------------
Title: Director, CIBC ▇▇▇▇▇▇▇▇▇▇▇ Corp.,
as Agent
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FIRST UNION NATIONAL BANK, as
Documentation Agent and as a Lender
By: /s/ ▇▇▇ ▇▇▇▇▇▇
------------------------------------------
Title: