1
Exhibit 10.2
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REVOLVING LOAN CREDIT AGREEMENT
DATED AS OF DECEMBER 19, 1997
AMONG
AMSCAN HOLDINGS, INC.,
AS BORROWER,
THE LENDERS LISTED HEREIN,
AS LENDERS,
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.,
AS ARRANGER AND SYNDICATION AGENT,
AND
FLEET NATIONAL BANK,
AS ADMINISTRATIVE AGENT
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AMSCAN HOLDINGS, INC.
REVOLVING LOAN CREDIT AGREEMENT
TABLE OF CONTENTS
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SECTION 1.
DEFINITIONS............................... 3
1.1 Certain Defined Terms..................................... 3
1.2 Accounting Terms; Utilization of GAAP for Purposes of
Calculations Under Agreement.............................. 41
1.3 Other Definitional Provisions and Rules of Construction... 41
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS................ 42
2.1 Commitments; Making of Loans; the Register; Notes......... 42
2.2 Interest on the Revolving Loans........................... 46
2.3 Fees...................................................... 49
2.4 Prepayments and Reductions in Revolving Loan Commitments;
General Provisions Regarding Payments; Application of
Proceeds of Collateral and Payments Under Subsidiary
Guaranty.................................................. 50
2.5 Use of Proceeds........................................... 55
2.6 Special Provisions Governing Eurodollar Rate Loans........ 55
2.7 Increased Costs; Taxes; Capital Adequacy.................. 58
2.8 Obligation of Lenders and Issuing Lenders to Mitigate..... 62
2.9 Defaulting Lenders........................................ 63
2.10 Removal or Replacement of a Lender........................ 64
SECTION 3.
LETTERS OF CREDIT............................ 66
3.1 Issuance of Letters of Credit and Lenders' Purchase of
Participations Therein.................................... 66
3.2 Letter of Credit Fees..................................... 69
3.3 Drawings and Reimbursement of Amounts Paid Under Letters
of Credit................................................. 70
3.4 Obligations Absolute...................................... 73
3.5 Indemnification; Nature of Issuing Lenders' Duties........ 74
3.6 Increased Costs and Taxes Relating to Letters of Credit... 75
SECTION 4.
CONDITIONS TO LOANS AND LETTERS OF CREDIT................ 76
4.1 Conditions to Initial Revolving Loans..................... 76
(i)
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4.2 Conditions to All Revolving Loans......................... 84
4.3 Conditions to Letters of Credit........................... 85
SECTION 5.
COMPANY'S REPRESENTATIONS AND WARRANTIES................. 86
5.1 Organization, Powers, Qualification, Good Standing,
Business and Subsidiaries................................. 86
5.2 Authorization of Borrowing, etc........................... 87
5.3 Financial Condition....................................... 88
5.4 No Material Adverse Change; No Restricted Junior
Payments.................................................. 89
5.5 Title to Properties; Liens; Real Property................. 89
5.6 Litigation; Adverse Facts................................. 90
5.7 Payment of Taxes.......................................... 90
5.8 Performance of Agreements; Materially Adverse Agreements;
Material Contracts........................................ 91
5.9 Governmental Regulation................................... 91
5.10 Securities Activities..................................... 91
5.11 Employee Benefit Plans.................................... 91
5.12 Certain Fees.............................................. 92
5.13 Environmental Protection.................................. 92
5.14 Employee Matters.......................................... 93
5.15 Solvency.................................................. 93
5.16 Matters Relating to Collateral............................ 93
5.17 Related Agreements........................................ 94
5.18 Disclosure................................................ 95
5.19 AXEL Credit Agreement..................................... 95
SECTION 6.
COMPANY'S AFFIRMATIVE COVENANTS..................... 96
6.1 Financial Statements and Other Reports.................... 96
6.2 Corporate Existence, etc..................................102
6.3 Payment of Taxes and Claims; Tax Consolidation............102
6.4 Maintenance of Properties; Insurance; Application of Net
Insurance/Condemnation Proceeds...........................102
6.5 Inspection Rights; Audits of Inventory and Accounts
Receivable; Lender Meeting................................104
6.6 Compliance with Laws, etc.................................105
6.7 Environmental Review and Investigation, Disclosure, Etc.;
Company's Actions Regarding Hazardous Materials Activities,
Environmental Claims and Violations of Environmental
Laws......................................................105
6.8 Execution of Subsidiary Guaranty and Personal Property
Collateral Documents by Certain Subsidiaries and Future
Subsidiaries..............................................108
(ii)
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6.9 Conforming Leasehold Interests; Matters Relating to
` Real Property Collateral..................................109
6.10 Interest Rate Protection..................................112
6.11 Cash Management Systems...................................112
SECTION 7.
COMPANY'S NEGATIVE COVENANTS.......................113
7.1 Indebtedness..............................................113
7.2 Liens and Related Matters.................................116
7.3 Investments; Joint Ventures...............................117
7.4 Contingent Obligations....................................118
7.5 Restricted Junior Payments................................119
7.6 Financial Covenants.......................................119
7.7 Restriction on Fundamental Changes; Asset Sales and
Acquisitions..............................................124
7.8 Consolidated Capital Expenditures.........................126
7.9 Sales and Lease-Backs.....................................127
7.10 Transactions with Shareholders and Affiliates.............127
7.11 Disposal of Subsidiary Stock..............................127
7.12 Conduct of Business.......................................128
7.13 Amendments or Waivers of Certain Related Agreements;
Amendments of Documents Relating to Subordinated
Indebtedness..............................................128
7.14 Fiscal Year...............................................128
SECTION 8.
EVENTS OF DEFAULT............................129
8.1 Failure to Make Payments When Due.........................129
8.2 Default in Other Agreements...............................129
8.3 Breach of Certain Covenants...............................129
8.4 Breach of Warranty........................................129
8.5 Other Defaults Under Revolving Loan Documents.............130
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc......130
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc........130
8.8 Judgments and Attachments.................................131
8.9 Dissolution...............................................131
8.10 Employee Benefit Plans....................................131
8.11 Change in Control.........................................131
8.12 Invalidity of Subsidiary Guaranty; Failure of Security;
Repudiation of Obligations................................132
8.13 Failure to Consummate Merger..............................132
8.14 Amendment of Certain Documents of Company.................132
SECTION 9.
AGENTS..................................133
(iii)
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9.1 Appointment...............................................133
9.2 Powers and Duties; General Immunity.......................135
9.3 Representations and Warranties; No Responsibility For
Appraisal of Creditworthiness............................136
9.4 Right to Indemnity........................................137
9.5 Successor Agent...........................................137
9.6 Collateral Documents and Guaranties.......................138
SECTION 10.
MISCELLANEOUS..............................139
10.1 Assignments and Participations in Loans and Letters of
Credit....................................................139
10.2 Expenses..................................................142
10.3 Indemnity.................................................143
10.4 Set-Off; Security Interest in Deposit Accounts............144
10.5 Ratable Sharing...........................................144
10.6 Amendments and Waivers....................................145
10.7 Independence of Covenants.................................146
10.8 Notices...................................................146
10.9 Survival of Representations, Warranties and Agreements....147
10.10 Failure or Indulgence Not Waiver; Remedies
Cumulative................................................147
10.11 Marshalling; Payments Set Aside...........................147
10.12 Severability..............................................148
10.13 Obligations Several; Independent Nature of Lenders'
Rights....................................................148
10.14 Headings..................................................148
10.15 Applicable Law............................................148
10.16 Successors and Assigns....................................148
10.17 Consent to Jurisdiction and Service of Process............149
10.18 Waiver of Jury Trial......................................149
10.19 Confidentiality...........................................150
10.20 Counterparts; Effectiveness...............................150
Signature pages S-1
(iv)
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EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
IV [INTENTIONALLY OMITTED]
V FORM OF REVOLVING NOTE
VI FORM OF COMPLIANCE CERTIFICATE
VII-A FORM OF OPINION OF WACHTELL, LIPTON, ▇▇▇▇▇ & ▇▇▇▇
VII-B FORM OF OPINION OF ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
VIII FORM OF OPINION OF O'MELVENY & ▇▇▇▇▇
IX FORM OF ASSIGNMENT AGREEMENT
X FORM OF CERTIFICATE RE NON-BANK STATUS
XI FORM OF FINANCIAL CONDITION CERTIFICATE
XII FORM OF COMPANY PLEDGE AGREEMENT
XIII FORM OF COMPANY SECURITY AGREEMENT
XIV FORM OF SUBSIDIARY GUARANTY
XV FORM OF SUBSIDIARY PLEDGE AGREEMENT
XVI FORM OF SUBSIDIARY SECURITY AGREEMENT
XVII FORM OF MORTGAGE
XVIII FORM OF COLLATERAL ACCESS AGREEMENT
XIX FORM OF BORROWING BASE CERTIFICATE
(v)
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SCHEDULES
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
4.1C CORPORATE AND CAPITAL STRUCTURE; OWNERSHIP; MANAGEMENT
4.1F INDEBTEDNESS TO BE REPAID UNDER EXISTING CREDIT AGREEMENTS
5.1 SUBSIDIARIES OF COMPANY
5.5 REAL PROPERTY
5.6 LITIGATION
5.8 MATERIAL CONTRACTS
5.13 ENVIRONMENTAL MATTERS
6.11 CASH MANAGEMENT SYSTEM
7.1 CERTAIN EXISTING INDEBTEDNESS
7.2 CERTAIN EXISTING LIENS
7.3 CERTAIN EXISTING INVESTMENTS
7.4 CERTAIN EXISTING CONTINGENT OBLIGATIONS
7.10 CERTAIN TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES
(vi)
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AMSCAN HOLDINGS, INC.
REVOLVING LOAN CREDIT AGREEMENT
This REVOLVING LOAN CREDIT AGREEMENT is dated as of December 19, 1997 and
entered into by and among AMSCAN HOLDINGS, INC., a Delaware corporation
("Company"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P., ("GSCP") as arranger (in such
capacity, "Arranger"), and as syndication agent (in such capacity, "Syndication
Agent"), THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (each,
including GSCP and Fleet (as hereinafter defined), individually referred to
herein as a "Lender" and collectively as "Lenders"), and FLEET NATIONAL BANK
("Fleet"), as administrative agent for Lenders (in such capacity,
"Administrative Agent").
R E C I T A L S
WHEREAS, GSII (this and other capitalized terms used in these recitals
without definition being used as defined in subsection 1.1) has formed Confetti
Acquisition, Inc., a Delaware corporation ("Newco") for the purpose of entering
into a series of recapitalization transactions pursuant to the Recapitalization
Agreement;
WHEREAS, on or before the Closing Date, Newco and Company shall have
consummated the transactions contemplated under the Recapitalization Agreement,
and in connection with such transactions, Company will have, following the
Merger of Newco with and into Company, not less than $75,000,000 of equity
financing, consisting of (i) approximately $7,500,000 in shares of Company
retained by current shareholders, (ii) approximately $750,000 in cash common
equity contributions by certain Management Investors (which contributions will
be financed by Company and will be made following consummation of the Merger)
and (iii) approximately $67,500,000 in equity financing from Newco, which equity
financing shall have been contributed to Newco immediately prior to the Merger
as follows: (x) an amount not less than $61,875,000 in cash by GSII, (y)
approximately $4,500,000 of Old Management Shares (valued at the highest cash
price offered to public shareholders in the Acquisition) contributed by a
certain Management Investor in exchange for common stock of Newco which will be
converted in the Merger into shares of Company Common Stock and (z)
approximately $1,125,000 of restricted shares of common stock of Newco granted
to a certain Management Investor which will be converted in the Merger into
shares of Company Common Stock;
WHEREAS, pursuant to the Recapitalization Agreement, on the Closing Date,
Newco will be merged with and into Company, with Company being the surviving
corporation in such merger;
REVOLVING LOAN CREDIT AGREEMENT EXECUTION
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WHEREAS, on or before the Closing Date, Company will issue and sell not
less than $110,000,000 in aggregate principal amount of Senior Subordinated
Notes;
WHEREAS, on the date hereof Company has entered into a separate AXEL
Credit Agreement (such credit agreement as amended, supplemented, refinanced,
renewed, extended, or otherwise modified from time to time, the "AXEL Credit
Agreement") with Fleet National Bank as administrative agent, (the "AXEL
Facility Agent"), ▇▇▇▇▇▇▇ Sachs Credit Partners L.P. as arranger and syndication
agent and the financial institutions named therein as lenders (the "AXEL
Lenders") pursuant to which AXEL Lenders have agreed to extend certain credit
facilities to Company the proceeds of which will be used together with the
proceeds of the issuance and sale of the Senior Subordinated Notes and the
equity financing described above, to fund the Recapitalization Financing
Requirements.
WHEREAS, Lenders have agreed to extend certain credit facilities to
Company pursuant to the terms and conditions of this Agreement, the proceeds of
which will be used (i) together with the proceeds of the AXEL facility under the
AXEL Credit Agreement and the issuance and sale of the Senior Subordinated Notes
and the equity financing described above, to fund the Recapitalization Financing
Requirements, and (ii) to provide financing for working capital and other
general corporate purposes of Company and its Subsidiaries;
WHEREAS, on the date hereof the Administrative Agent and the AXEL Facility
Agent have entered into an Intercreditor Agreement pursuant to which the
Administrative Agent and the AXEL Facility Agent have appointed Fleet to serve
as collateral agent and representative (in such capacity, the "Collateral
Agent") for the Lenders, the AXEL Lenders, the Administrative Agent, the AXEL
Facility Agent and the other agents under this Agreement and the AXEL Credit
Agreement (collectively, the "Secured Parties") and agreed to the terms on which
Collateral, the benefits of guarantees and the proceeds thereof will be shared
between the credit facilities;
WHEREAS, Company desires to secure all of the Obligations hereunder and
under the other Loan Documents by granting to Collateral Agent, on behalf of
Secured Parties, a first priority Lien on substantially all of its real,
personal and mixed property, including a pledge of all of the capital stock of
each of its Domestic Subsidiaries and 66% of the capital stock of each of its
Foreign Subsidiaries; and
WHEREAS, all of the Domestic Subsidiaries of Company have agreed to
guarantee the Obligations hereunder and under the other Loan Documents and to
secure their guaranties by granting to Collateral Agent, on behalf of Secured
Parties, a first priority Lien on substantially all of their respective personal
and mixed property, including a pledge of all of the capital stock of each of
their respective Domestic Subsidiaries and 66% of the capital stock of each of
their respective Foreign Subsidiaries:
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Company, Lenders and Agents agree as
follows:
REVOLVING LOAN CREDIT AGREEMENT EXECUTION
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SECTION 1.
DEFINITIONS
1.1 Certain Defined Terms.
The following terms used in this Agreement shall have the following
meanings:
"Account" means, with respect to any Person, all present and future
rights of such Person to payment for goods sold or leased or for services
rendered (except those evidenced by instruments or chattel paper), whether
now existing or hereafter arising and wherever arising, and whether or not
they have been earned by performance.
"Adjusted Eurodollar Rate" means, for any Interest Rate
Determination Date with respect to an Interest Period for a Eurodollar
Rate Loan, the interest rate per annum (rounded upward, if necessary, to
the nearest 1/32 of one percent) as determined on the basis of the offered
rates for deposits in U.S. dollars, for a period of time comparable to
such Interest Period which appears on the Telerate Page 3750 as of 11:00
a.m. (New York time) two Business Days before the first day of such
Interest Period; provided, however, that if the rate described above does
not appear on the Telerate System on any applicable interest determination
date, the Adjusted Eurodollar Rates shall be the rate (rounded upward as
described above, if necessary) for deposits in U.S. dollars for a period
substantially equal to the interest period on the Reuters Page "LIBO" (or
such other page as may replace the LIBO page on that service for the
purpose of displaying such rates), as of 11:00 a.m. (London time) two
Business Days before the first day of such Interest Period.
If both the Telerate and Reuters system are unavailable, then the
rate for that date will be determined on the basis of the offered rates
for deposits in U.S. dollars for a period of time comparable to such
Interest Period which are offered by four major banks in the London
interbank market at approximately 11:00 a.m. (New York time) two Business
Days before the first day of such Interest Period as selected by the
Administrative Agent. The principal London office of each of the four
major London banks will be requested to provide a quotation of its U.S.
dollar deposit offered rate. If at least two such quotations are provided,
the rate for that date will be the arithmetic mean of the quotations. If
fewer than two quotations are provided as requested, the rate for that
date will be determined on the basis of the rates quoted for loans in U.S.
dollars to leading European banks for a period of time comparable to such
Interest Period offered by major banks in New York City at approximately
11:00 a.m. (New York time) two Business Days before the first day of such
Interest Period. In the event that the Administrative Agent is unable to
obtain any such quotation as provided above, it will be deemed that the
Adjusted Eurodollar Rate for such Interest Rate cannot be determined.
REVOLVING LOAN CREDIT AGREEMENT EXECUTION
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In the event that the Board of Governors of the Federal Reserve
System shall impose a Eurodollar Rate Reserve Percentage with respect to
Eurocurrency Liabilities, the Adjusted Eurodollar Rate for an Interest
Period shall be equal to the amount determined above for such Interest
Period divided by a percentage equal to 100% minus the Eurodollar Rate
Reserve Percentage for such Interest Period.
"Administrative Agent" has the meaning assigned to that term in the
introduction to this Agreement and also means and includes any successor
Administrative Agent appointed pursuant to subsection 9.5A.
"Affected Lender" has the meaning assigned to that term in
subsection 2.6C.
"Affiliate", as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control
with, that Person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling",
"controlled by" and "under common control with"), as applied to any
Person, means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of that
Person, whether through the ownership of voting securities or by contract
or otherwise.
"Agent" means, individually, each of Arranger, Syndication Agent,
Collateral Agent and Administrative Agent and "Agents" means Arranger,
Syndication Agent, Collateral Agent and Administrative Agent,
collectively.
"Agreement" means this Revolving Loan Credit Agreement dated as of
December 19, 1997, as it may be amended, supplemented or otherwise
modified from time to time.
"Applicable Leverage Ratio" means, with respect to any date of
determination, the Consolidated Leverage Ratio set forth in the most
recent Compliance Certificate delivered pursuant to subsection 6.1(iv)
hereof, provided that (i) the Applicable Leverage Ratio for the period
from the Closing Date to but excluding the fifth Business Day following
delivery of the first Compliance Certificate pursuant to subsection
6.1(iv) hereof, shall be deemed to be no less than 5.25:1, (ii) no change
in the Applicable Leverage Ratio shall be effective until five Business
Days after the date on which Administrative Agent receives a Compliance
Certificate pursuant to subsection 6.1(iv) calculating the Consolidated
Leverage Ratio and (iii) in the event the Company fails to deliver to the
Administrative Agent a Compliance Certificate calculating the Consolidated
Leverage Ratio in accordance with subsection 6.1(iv) when required
thereunder, then the Applicable Leverage Ratio shall be deemed to be not
less than 5.25:1 from the date such Compliance Certificate was due until
the date the Company shall deliver such Compliance Certificate.
REVOLVING LOAN CREDIT AGREEMENT EXECUTION
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"Applicable Revolving Base Rate Margin" means, as at any date of
determination, a rate per annum equal to the percentage set forth below
opposite the Applicable Leverage Ratio in effect as of such date of
determination with any change in the Applicable Revolving Base Rate Margin
to be effective on the date of any corresponding change in the Applicable
Leverage Ratio.
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Applicable Leverage Ratio Applicable Revolving Base Rate Margin
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5.25:1.00 or greater 1.25%
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4.75:1.00 or greater, but less than 1.00%
5.25:1.00
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4.25:1.00 or greater, but less than 0.75%
4.75:1.00
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3.75:1.00 or greater, but less than 0.50%
4.25:1.00
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3.25:1.00 or greater, but less than 0.25%
3.75:1.00
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less than 3.25:1.00 0.00%
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"Applicable Revolving Commitment Fee Percentage" means, as at any
date of determination, a rate per annum equal to the percentage set forth
below opposite the Applicable Leverage Ratio in effect as of such date of
determination, any change in the Applicable Revolving Commitment Fee
Percentage to be effective on the date of any corresponding change in the
Applicable Leverage Ratio:
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Applicable Leverage Ratio Applicable Revolving Commitment Fee
Percentage
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4.75:1.00 or greater 0.50%
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3.75:1.00 or greater, but less than 0.375%
4.75: 1.00
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less than 3.75:1.00 0.25%
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"Applicable Revolving Eurodollar Rate Margin" means, as at any date
of determination, with respect to any Eurodollar Rate Loans a rate per
annum equal to the percentage set forth below opposite the Applicable
Leverage Ratio in effect as of the first day of the Interest Period for
such Eurodollar Rate Loans:
REVOLVING LOAN CREDIT AGREEMENT EXECUTION
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Applicable Leverage Ratio Applicable Revolving Eurodollar Rate Margin
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5.25:1.00 or greater 2.25%
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4.75:1.00 or greater, but less than 2.00%
5.25: 1.00
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4.25:1.00 or greater, but less than 1.750%
4.75:1.00
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3.75:1.00 or greater, but less than 1.50%
4.25:1.00
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3.25:1.00 or greater, but less than 1.25%
3.75:1.00
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2.75:1.00 or greater, but less than 0.875%
3.25:1.00
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less than 2.75:1.00 0.625%
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"Arranger" has the meaning assigned to that term in the introduction
to this Agreement.
"Asset Sale" means the sale by Company or any of its Subsidiaries to
any Person other than Company or any of its wholly-owned Subsidiaries of
(i) any of the stock of any of Company's Subsidiaries, (ii) substantially
all of the assets of any division or line of business of Company or any of
its Subsidiaries, or (iii) any other assets (whether tangible or
intangible) of Company or any of its Subsidiaries (other than (a)
inventory sold in the ordinary course of business (b) sales of Cash
Equivalents for the fair market value thereof, and (c) any such other
assets to the extent that the aggregate value of such assets sold in any
single transaction or related series of transactions is equal to $500,000
or less).
"Assignment Agreement" means an Assignment Agreement in
substantially the form of Exhibit IX annexed hereto.
"Auxiliary Pledge Agreement" means each pledge agreement or similar
instrument governed by the laws of a country other than the United States,
executed on the Closing Date pursuant to subsection 4.1I(v) or from time
to time thereafter in accordance with subsection 6.8 by Company or any
Domestic Subsidiary that owns capital stock of one or more Foreign
Subsidiaries organized in such country, in form and substance satisfactory
to Collateral Agent, as such Auxiliary Pledge Agreement may be amended,
supplemented or otherwise modified from time to time, and "Auxiliary
Pledge Agreements" means all such pledge agreements or instruments,
collectively.
REVOLVING LOAN CREDIT AGREEMENT EXECUTION
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"AXEL(TM)" or "AXELs(TM)" means a loan made by an AXEL Lender to
Company as an amortization extended loan pursuant to the AXEL Credit
Agreement. The term AXEL is a registered trademark of ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
"AXEL Credit Agreement" means the AXEL Credit Agreement dated as of
December 19, 1997 among Company, the financial institutions from time to
time parties thereto, GSCP, as arranger and syndication agent, and Fleet,
as administrative agent as such AXEL Credit Agreement may be amended,
supplemented, refinanced, renewed, extended or otherwise modified from
time to time.
"AXEL Commitment" means a commitment of an AXEL Lender to extend an
AXEL under the AXEL Credit Agreement, and "AXEL Commitments" means such
commitments of all AXEL Lenders in the aggregate.
"AXEL Facility Agent" has the meaning assigned to that term in the
introduction to this Agreement.
"AXEL Lender" means a lender under the AXEL Credit Agreement holding
an outstanding AXEL or having an AXEL Commitment, and "AXEL Lenders" means
any such lender or lenders under the AXEL Credit Agreement, collectively.
"AXEL Loan Documents" means the AXEL Credit Agreement, the AXEL
Notes, the Subsidiary Guaranty, the Collateral Documents and the
Intercreditor Agreement.
"AXEL Notes" means the promissory notes of Company issued pursuant
to the AXEL Credit Agreement as they may be amended, supplemented or
otherwise modified from time to time.
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"Base Rate" means, at any time, the higher of (x) the Prime Rate or
(y) the rate which is 1/2 of 1% in excess of the Federal Funds Effective
Rate.
"Base Rate Loans" means Revolving Loans bearing interest at rates
determined by reference to the Base Rate as provided in subsection 2.2A.
"Borrowing Base" means, as at any date of determination, an
aggregate amount (determined with reference to the most recent Borrowing
Base Certificate delivered pursuant to subsection 6.1(xviii)) equal to:
(i) eighty-five percent (85%) of Eligible Accounts Receivable of
Company and Subsidiary Guarantors plus
REVOLVING LOAN CREDIT AGREEMENT EXECUTION
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(ii) fifty-five percent (55%) of Eligible Inventory of Company and
Subsidiary Guarantors minus
(iii) the aggregate amount of any reserves established by
Administrative Agent, in the exercise of its commercially reasonable
judgment, against Eligible Accounts Receivable and Eligible
Inventory of Company and Subsidiary Guarantors;
provided that Administrative Agent, in the exercise of its commercially
reasonable judgment, may (a) increase or decrease reserves against
Eligible Accounts Receivable and Eligible Inventory of any Loan Party and
(b) reduce the advance rates provided in this definition, or (c) restore
such advance rates to any level equal to or below the advance rates in
effect as of the Closing Date and provided further that if any Inventory
is held on or in any leased property, leased trailer or warehouse and the
applicable lessor or warehouseman has not entered into a Collateral Access
Agreement in favor of Administrative Agent, Administrative Agent may take
a reserve against the value of such Inventory equal to the lesser of (a)
the value of such Inventory included in the Borrowing Base and (b) two
months lease payments or warehouse storage payments payable to the
applicable lessor or warehouseman.
"Borrowing Base Certificate" means a completed certificate
substantially in the form of Exhibit XIX annexed hereto.
"Business Day" means any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the State of New York or is a
day on which banking institutions located in such state are authorized or
required by law or other governmental action to close.
"Capital Lease", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that,
in conformity with GAAP, is accounted for as a capital lease on the
balance sheet of that Person.
"Cash" means money, currency or a credit balance in a Deposit
Account.
"Cash Equivalents" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally
guaranteed as to interest and principal by the United States Government or
(b) issued by any agency of the United States the obligations of which are
backed by the full faith and credit of the United States, in each case
maturing within one year after such date; (ii) marketable direct
obligations issued by any state of the United States of America or any
political subdivision of any such state or any public instrumentality
thereof, in each case maturing within one year after such date and having,
at the time of the acquisition thereof, the highest rating obtainable from
either Standard & Poor's Ratings Group ("S&P") or ▇▇▇▇▇'▇ Investors
Service, Inc. ("Moody's"); (iii) commercial paper
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maturing no more than one year from the date of creation thereof and
having, at the time of the acquisition thereof, a rating of at least A-1
from S&P or at least P-1 from Moody's; (iv) certificates of deposit or
bankers' acceptances maturing within one year after such date and issued
or accepted by any Lender or by any commercial bank organized under the
laws of the United States of America or any state thereof or the District
of Columbia that (a) is at least "adequately capitalized" (as defined in
the regulations of its primary Federal banking regulator) and (b) has Tier
1 capital (as defined in such regulations) of not less than $100,000,000
(each Lender and each commercial bank being referred to herein as a "Cash
Equivalent Bank"); (v) shares of any money market mutual fund that (a) has
at least 95% of its assets invested continuously in the types of
investments referred to in clauses (i) and (ii) above, (b) has net assets
of not less than $500,000,000, and (c) has the highest rating obtainable
from either S&P or Moody's; and (vi) with respect to Foreign Subsidiaries,
investments of the types described in clause (iv) above issued by a Cash
Equivalent Bank or any commercial bank of recognized international
standing chartered in the country where such Foreign Subsidiary is
domiciled having unimpaired capital and surplus of at least $500,000,000.
"Certificate of Merger" means the Certificate of Merger dated as of
December 19, 1997 for the Merger of Newco with and into Company, as in
effect on the Closing Date.
"Certificate re Non-Bank Status" means a certificate substantially
in the form of Exhibit X annexed hereto delivered by a Lender to
Administrative Agent pursuant to subsection 2.7B(iii).
"Closing Date" means the date on or before December 19, 1997, on
which the initial Revolving Loans or AXELs are funded.
"Collateral" means, collectively, all of the real, personal and
mixed property (including capital stock) in which Liens are purported to
be granted pursuant to the Collateral Documents as security for the
Obligations.
"Collateral Access Agreement" means any landlord waiver, mortgagee
waiver, bailee letter or any similar acknowledgement or agreement of any
landlord in respect of any Leased Property or mortgagee in respect of any
real property in which Company or any of its Subsidiaries owns or holds a
fee interest and which is subject to a mortgage, held by such mortgagee,
in either case where any Collateral is located or any warehouseman or
processor in possession of any Inventory of any Loan Party, substantially
in the form of Exhibit XVIII annexed hereto with such changes thereto as
may be agreed to by Collateral Agent in the reasonable exercise of its
discretion.
"Collateral Accounts" has the meaning assigned to that term in the
Intercreditor Agreement.
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"Collateral Agent" has the meaning assigned to that term in the
introduction to this Agreement.
"Collateral Documents" means the Company Pledge Agreement, the
Company Security Agreement, the Subsidiary Pledge Agreements, the
Subsidiary Security Agreements, the Mortgages, the Auxiliary Pledge
Agreements and all other instruments or documents delivered by any Loan
Party pursuant to this Agreement or any of the other Loan Documents in
order to grant to Collateral Agent, on behalf of Secured Parties, a Lien
on any real, personal or mixed property of that Loan Party as security for
the Obligations.
"Commercial Letter of Credit" means any letter of credit or similar
instrument issued for the purpose of providing the primary payment
mechanism in connection with the purchase of any materials, goods or
services by Company or any of its Subsidiaries in the ordinary course of
business of Company or such Subsidiary.
"Company" means Company as the surviving corporation in the Merger.
"Company Common Stock" means the shares of common stock of Company
par value $0.10 per share.
"Company Pledge Agreement" means the Company Pledge Agreement
executed and delivered by Company on the Closing Date, substantially in
the form of Exhibit XII annexed hereto, as such Company Pledge Agreement
may thereafter be amended, supplemented or otherwise modified from time to
time.
"Company Security Agreement" means the Company Security Agreement
executed and delivered by Company on the Closing Date, substantially in
the form of Exhibit XIII annexed hereto, as such Company Security
Agreement may thereafter be amended, supplemented or otherwise modified
from time to time.
"Compliance Certificate" means a certificate substantially in the
form of Exhibit VI annexed hereto delivered to Administrative Agent and
Lenders by Company pursuant to subsection 6.1(iv).
"Confidential Information Memorandum" means that certain
Confidential Information Memorandum prepared by GSCP relating to the AXELs
and Revolving Loans dated November 1997.
"Conforming Leasehold Interest" means any Recorded Leasehold
Interest as to which the lessor has agreed in writing for the benefit of
Administrative Agent (which writing has been delivered to Collateral
Agent), whether under the terms of the applicable lease, under the terms
of a Landlord Consent and Estoppel, or otherwise, to the matters
described in the definition of ""Landlord Consent and
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Estoppel," which interest, if a subleasehold or sub-subleasehold interest,
is not subject to any contrary restrictions contained in a superior lease
or sublease.
"Consolidated Adjusted EBITDA" means, for any period, the sum of the
amounts for such period of (i) Consolidated Net Income, (ii) Consolidated
Interest Expense, (iii) provisions for taxes based on income, (iv) total
depreciation expense, (v) total amortization expense, (vi) to the extent
otherwise deducted in determining Consolidated Net Income, (a)
non-recurring expenses and fees relating to Company's initial public
offering in December 1996 in an amount not to exceed $16,000,000 and (b)
certain special bonuses paid by Company in 1996, in an aggregate amount
not to exceed $4,200,000 pursuant to certain profit-sharing arrangements
that were terminated by Company in connection with such initial public
offering, (vii) to the extent otherwise deducted in determining
Consolidated Net Income, non-recurring expenses and charges relating to
the transactions contemplated by the Related Agreements and the Loan
Documents including any special bonuses payable in connection therewith
and (viii) other non-cash items reducing Consolidated Net Income including
provisions for minority interests but only to the extent such items have
been deducted from operating income for such period in determining
Consolidated Net Income less other non-cash items increasing Consolidated
Net Income, all of the foregoing as determined on a consolidated basis for
Company and its Subsidiaries in conformity with GAAP.
"Consolidated Capital Expenditures" means, for any period, the sum,
without duplication, of (i) the aggregate of all expenditures (whether
paid in cash or other consideration or accrued as a liability) by Company
and its Subsidiaries during that period that, in conformity with GAAP, are
included in "additions to property, plant or equipment" or comparable
items reflected in the consolidated statement of cash flows of Company and
its Subsidiaries, but excluding any such expenditures relating to future
acquisitions and (ii) the aggregate amount of all additions to assets on
the consolidated balance sheet of Company and its Subsidiaries during that
period in conformity with GAAP in connection with Capital Leases
consummated by Company and its Subsidiaries. Notwithstanding the
foregoing, Consolidated Capital Expenditures shall not include any amounts
reinvested from Net Asset Sale Proceeds, Net Insurance/Condemnation
Proceeds or any amounts spent on Permitted Business Acquisitions.
"Consolidated Cash Interest Expense" means, for any period, amounts
included in Consolidated Interest Expense for such period paid or payable
in Cash (excluding amortization of original issue discount and
amortization of debt issuance costs).
"Consolidated Current Assets" means, as at any date of
determination, the total assets of Company and its Subsidiaries on a
consolidated basis which may
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properly be classified as current assets in conformity with GAAP,
excluding any Cash and Cash Equivalents.
"Consolidated Current Liabilities" means, as at any date of
determination, the total liabilities of Company and its Subsidiaries on a
consolidated basis which may properly be classified as current liabilities
in conformity with GAAP excluding all Revolving Loans and the current
portion of any long-term Indebtedness.
"Consolidated Excess Cash Flow" means, for any period, an amount (if
positive) equal to (i) the sum, without duplication, of the amounts for
such period of (a) Consolidated Adjusted EBITDA and (b) the Consolidated
Working Capital Adjustment minus (ii) the sum, without duplication, of the
amounts for such period of (a) voluntary and scheduled repayments of
Consolidated Total Debt (excluding repayments of Revolving Loans except to
the extent the Revolving Loan Commitments are permanently reduced in
connection with such repayments), (b) the sum of Consolidated Capital
Expenditures and any expenditures during such period relating to
acquisitions to the extent excluded from Consolidated Capital Expenditures
(in each case net of any proceeds of any related financings with respect
to such expenditures), (c) Consolidated Cash Interest Expense, (d) the
provision for current taxes based on income of Company and its
Subsidiaries and payable in cash with respect to such period and (e) any
non-recurring restructuring charges and charges related to cost savings
paid in cash during such period.
"Consolidated Fixed Charges" means, for any period, the sum (without
duplication) of the amounts for such period of (i) Consolidated Cash
Interest Expense, (ii) provisions for taxes based on income, (iii)
scheduled repayments of principal on the Loans and other Indebtedness, and
(iv) Consolidated Capital Expenditures to the extent paid for in cash, all
of the foregoing as determined on a consolidated basis for Company and its
Subsidiaries in conformity with GAAP.
"Consolidated Interest Expense" means, for any period, total
interest expense (without reduction for interest income) (including that
portion attributable to Capital Leases in accordance with GAAP and
capitalized interest) of Company and its Subsidiaries on a consolidated
basis with respect to all outstanding Indebtedness of Company and its
Subsidiaries, including (i) all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance
financing and net costs under Interest Rate Agreements, in each case,
attributable to such period and (ii) commitment fees on the unused portion
of the Revolving Loan Commitment as set forth in subsection 2.3A, but
excluding, however, any amounts referred to in subsection 2.3B payable to
Agents and Lenders on or before the Closing Date and any amounts referred
to in subsection 2.3B of the AXEL Credit Agreement payable to the AXEL
Facility Agent, any other agents under the AXEL Credit Agreement and the
AXEL Lenders on or before the Closing Date.
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"Consolidated Leverage Ratio" means, as at any date of
determination, the ratio of (i) Consolidated Total Debt as of such date of
determination to (ii) Consolidated Adjusted EBITDA for the four-Fiscal
Quarter period ending (a) on such date of determination or (b) if such
date of determination is not the last day of a Fiscal Quarter, on the last
day of the Fiscal Quarter immediately preceding such date of
determination.
"Consolidated Net Income" means, for any period, the net income (or
loss) of Company and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with
GAAP; provided that there shall be excluded (i) the income (or loss) of
any Person (other than a Subsidiary of Company) in which any other Person
(other than Company or any of its Subsidiaries) has a joint interest,
except to the extent of the amount of dividends or other distributions
actually paid to Company or any of its Subsidiaries by such Person during
such period, (ii) the income (or loss) of any Person accrued prior to the
date it becomes a Subsidiary of Company or is merged into or consolidated
with Company or any of its Subsidiaries or that Person's assets are
acquired by Company or any of its Subsidiaries, (iii) the income of any
Subsidiary of Company to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary of that income is
not at the time permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary, (iv) any after-tax
gains or losses attributable to Asset Sales or returned surplus assets of
any Pension Plan, and (v) (to the extent not included in clauses (i)
through (iv) above) any net extraordinary gains or net non-cash
extraordinary losses.
"Consolidated Net Worth" means, as at any date of determination, the
sum of the capital stock and additional paid-in capital plus retained
earnings (or minus accumulated deficits) of Company and its Subsidiaries
on a consolidated basis determined in conformity with GAAP.
"Consolidated Total Debt" means, as at any date of determination,
the aggregate stated balance sheet amount of all Indebtedness of Company
and its Subsidiaries, determined on a consolidated basis in accordance
with GAAP.
"Consolidated Working Capital" means, as at any date of
determination, Consolidated Current Assets minus Consolidated Current
Liabilities.
"Consolidated Working Capital Adjustment" means, for any period on a
consolidated basis, the amount (which may be a negative number) equal to
Consolidated Working Capital as of the beginning of such period minus
Consolidated Working Capital as of the end of such period.
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"Contingent Obligation", as applied to any Person, means any direct
or indirect liability, contingent or otherwise, of that Person (i) with
respect to any Indebtedness, lease, dividend or other obligation of
another if the primary purpose or intent thereof by the Person incurring
the Contingent Obligation is to provide assurance to the obligee of such
obligation of another that such obligation of another will be paid or
discharged, or that any agreements relating thereto will be complied with,
or that the holders of such obligation will be protected (in whole or in
part) against loss in respect thereof, (ii) with respect to any letter of
credit issued for the account of that Person or as to which that Person is
otherwise liable for reimbursement of drawings, or (iii) under Hedge
Agreements. Contingent Obligations shall include (a) the direct or
indirect guaranty, endorsement (otherwise than for collection or deposit
in the ordinary course of business), co-making, discounting with recourse
or sale with recourse by such Person of the obligation of another, (b) the
obligation to make take-or-pay or similar payments if required regardless
of non-performance by any other party or parties to an agreement, and (c)
any liability of such Person for the obligation of another through any
agreement (contingent or otherwise) (X) to purchase, repurchase or
otherwise acquire such obligation or any security therefor, or to provide
funds for the payment or discharge of such obligation (whether in the form
of loans, advances, stock purchases, capital contributions or otherwise)
or (Y) to maintain the solvency or any balance sheet item, level of income
or financial condition of another if, in the case of any agreement
described under subclauses (X) or (Y) of this sentence, the primary
purpose or intent thereof is as described in the preceding sentence. The
amount of any Contingent Obligation shall be equal to the amount of the
obligation so guaranteed or otherwise supported or, if less, the amount to
which such Contingent Obligation is specifically limited.
"Contractual Obligation", as applied to any Person, means any
provision of any Security issued by that Person or of any material
indenture, mortgage, deed of trust, contract, undertaking, agreement or
other instrument to which that Person is a party or by which it or any of
its properties is bound or to which it or any of its properties is
subject.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement or arrangement to which Company or any of its
Subsidiaries is a party.
"Default Excess" has the meaning assigned to that term in subsection
2.9.
"Default Period" has the meaning assigned to that term in subsection
2.9.
"Defaulted Revolving Loan" has the meaning assigned to that term in
subsection 2.9.
"Defaulting Lender" has the meaning assigned to that term in
subsection 2.9.
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"Deposit Account" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate
of deposit.
"Dollars" and the sign "$" mean the lawful money of the United
States of America.
"Domestic Subsidiary" means a Subsidiary of Company that is
organized under the laws of a state of the United States or the District
of Columbia.
"Eligible Accounts Receivable" means, with respect to Company or any
Subsidiary Guarantor, the aggregate amount of Accounts of such Loan Party
deemed by Administrative Agent, in the exercise of its commercially
reasonable judgment, to be eligible for inclusion in the calculation of
the Borrowing Base. In determining the amount to be so included, the face
amount of such Accounts shall be reduced by the amount of all returns,
discounts, deductions, claims, credits, charges, or other allowances.
Unless otherwise approved in writing by Administrative Agent, an Account
shall not be included in Eligible Account Receivable if:
(i) it arises out of a sale made by such Loan Party to another Loan
Party; or
(ii) it is unpaid for (a) more than 60 days after its due date or
(b) either more than 120 days after the date of invoice if such
Account is not a Seasonal/Promotional Account or 180 days after the
date of the invoice if such Account is a Seasonal/Promotional
Account; or
(iii) it is from the same account debtor or its Affiliate and fifty
percent (50%) or more of all Accounts from that account debtor (and
its Affiliates) are ineligible under clause (ii) above; or
(iv) when aggregated with all other Accounts of an account debtor,
such Account exceeds 15% in face value of all Accounts of all Loan
Parties then outstanding, but only to the extent of such excess,
unless such excess is supported by an irrevocable letter of credit
or other form of assurance satisfactory to Administrative Agent (as
to form, substance and issuer) and assigned to and directly drawable
by Administrative Agent provided that this clause (iv) shall not
apply to Accounts of Party City Corporation; or
(v) the account debtor for such Account is a creditor of such Loan
Party, has or has asserted a right of setoff against such Loan
Party, or has disputed its liability or otherwise has made any claim
with respect to such Account or any other Account which has not been
resolved, in each case to the extent of the amount owed by such Loan
Party to such account debtor, the amount of
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such actual or asserted right of setoff, or the amount of such
dispute or claim, as the case may be; or
(vi) the account debtor is (or its assets are) the subject of an
Insolvency Event; or
(vii) such Account is not payable in Dollars or the account debtor
for such Account is located outside the continental United States,
unless such Account is supported by an irrevocable letter of credit
satisfactory to Administrative Agent (as to form, substance and
issuer) and assigned to and directly drawable by Administrative
Agent; or
(viii) the sale to the account debtor is on a ▇▇▇▇-and-hold,
guarantied sale, sale-and-return, sale on approval or consignment
basis or was made pursuant to any other written agreement providing
for repurchase or return; or
(ix) Administrative Agent determines by its own credit analysis that
collection of such Account is uncertain or that such Account is not
likely to be paid; or
(x) the account debtor is the United States of America or any
department, agency or instrumentality thereof, unless such Loan
Party duly assigns its rights to payment of such Account to
Administrative Agent pursuant to the Assignment of Claims Act of
1940, as amended (31 U.S.C. ss.ss.3727 et seq.); or
(xi) unless such Account relates to permitted dated receivables, the
goods giving rise to such Account have not been shipped and
delivered to and accepted by the account debtor, the services giving
rise to such Account have not been performed and accepted, or such
Account otherwise does not represent a final sale; or
(xii) such Account does not comply with all Requirements of Law,
including the Federal Consumer Credit Protection Act, the Federal
Truth in Lending Act and Regulation Z of the Board of Governors of
the Federal Reserve System; or
(xiii) such Account is subject to any adverse security deposit,
progress payment or other similar advance made by or for the benefit
of the applicable account debtor; or
(xiv) such Account is not subject to a valid and perfected first
priority Lien in favor of Administrative Agent for the benefit of
Lenders or does not otherwise conform to the representations and
warranties contained in the Revolving Loan Documents.
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provided that Administrative Agent, in the exercise of its commercially
reasonable judgment, may impose additional restrictions (or eliminate the
same) to the standards of eligibility set forth in this definition.
"Eligible Assignee" means (A) (i) a commercial bank organized under
the laws of the United States or any state thereof; (ii) a savings and
loan association or savings bank organized under the laws of the United
States or any state thereof; (iii) a commercial bank organized under the
laws of any other country or a political subdivision thereof; provided
that (x) such bank is acting through a branch or agency located in the
United States or (y) such bank is organized under the laws of a country
that is a member of the Organization for Economic Cooperation and
Development or a political subdivision of such country; and (iv) any other
entity which is an "accredited investor" (as defined in Regulation D under
the Securities Act) which extends credit or buys loans as one of its
businesses including insurance companies, mutual funds and lease financing
companies; and (B) any Lender, and any Related Fund or any Affiliate of
any Lender; provided that no Loan Party or any Subsidiary of any Loan
Party shall be an Eligible Assignee.
"Eligible Inventory" means, with respect to Company or any
Subsidiary Guarantor, the aggregate amount of Inventory of such Loan Party
deemed by Administrative Agent, in the exercise of its commercially
reasonable judgment, to be eligible for inclusion in the calculation of
the Borrowing Base. In determining the amount to be so included, Inventory
shall be valued at the lower of cost or market on a basis consistent with
such Loan Party's current and historical accounting practices. Unless
otherwise approved in writing by Administrative Agent, an item of
Inventory shall not be included in Eligible Inventory if:
(i) it is not owned solely by such Loan Party or such Loan Party
does not have good, valid and marketable title thereto; or
(ii) it is not located in the United States; or
(iii) it is not located on property (including trailers) owned or
leased by such Loan Party or in a contract warehouse, in each case
subject to a Collateral Access Agreement executed by any applicable
mortgagee, lessor or contract warehouseman, as the case may be, (or,
if not subject to a Collateral Access Agreement, subject to such
reserves against such Inventory as the Administrative Agent may deem
appropriate as set forth in the second proviso of the definition of
"Borrowing Base") and segregated or otherwise separately
identifiable from goods of others, if any, stored on the premises;
provided that any goods in transit to property owned or leased by a
Loan Party or to a contract warehouse, in each case subject to a
Collateral Access Agreement executed by any applicable mortgagee,
lessor or contract warehouseman, shall not be excluded under this
clause (iii) so long as title to such goods has
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passed to a Loan Party, and delivery to the property or warehouse of
the Loan Party is reasonably expected within 15 days; or
(iv) it is not subject to a valid and perfected first priority Lien
in favor of Collateral Agent except, with respect to Inventory
stored at sites described in clause (iii) above, to the extent such
Lien is subject to Liens for unpaid rent or normal and customary
warehousing charges; provided that any goods in transit to property
owned or leased by a Loan Party or to a contract warehouse, in each
case subject to a Collateral Access Agreement executed by any
applicable mortgagee, lessor or contract warehouseman, shall not be
excluded under this clause (iv) so long as title to such goods has
passed to a Loan Party, and delivery to the property or warehouse of
the Loan Party is reasonably expected within 15 days; or
(v) it is in excess of the amount required for 18 months supply of
such item of Inventory based on sales for the 12-month period ending
as of the end of the most recently ended Fiscal Quarter, provided
that this clause (v) shall not apply to Inventory in new stock
keeping units first purchased or produced by Company on or after the
first day of the 12-month period ending as of the end of the most
recently ended Fiscal Quarter; or
(vi) it consists of goods returned or rejected by such Loan Party's
customers that are not first-quality goods or are obsolete or goods
in transit to third parties other than to warehouse sites or
trailers covered by a Collateral Access Agreement or subject to such
reserves as the Administrative Agent may deem appropriate as set
forth in the second proviso of the definition of "Borrowing Base";
or
(vii) it is not first-quality goods, is obsolete (i.e. such item is
not included in the Company's current or next-scheduled catalog) or
does not otherwise conform to the representations and warranties
contained in the Revolving Loan Documents;
provided that Administrative Agent, in the exercise of its commercially
reasonable judgment, may impose additional restrictions (or eliminate the
same) to the standards of eligibility set forth in this definition.
"Employee Benefit Plan" means any "employee benefit plan" as defined
in Section 3(3) of ERISA which is or was maintained or contributed to by
Company, any of its Subsidiaries or any of their respective ERISA
Affiliates.
"Employment Agreements" means, collectively, the employment
agreements and stock and option agreements between the Company and certain
employees of the Company as set forth on Schedule 4.1C annexed hereto, in
certain cases providing
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for the exclusive employment of such Persons by Company, in the form
provided to Arranger and Administrative Agent pursuant to subsection 4.1C
on or prior to the Closing Date.
"Environmental Claim" means any investigation, notice, notice of
violation, claim, action, suit, proceeding, demand, abatement order or
other order or directive (conditional or otherwise), by any governmental
authority or any other Person, arising (i) pursuant to or in connection
with any actual or alleged violation of any Environmental Law, (ii) in
connection with any Hazardous Materials or any actual or alleged Hazardous
Materials Activity, or (iii) in connection with any actual or alleged
damage, injury, threat or harm to natural resources or the environment.
"Environmental Laws" means any and all current or future statutes,
ordinances, orders, rules, regulations, guidance documents, judgments,
Governmental Authorizations, or any other requirements of governmental
authorities relating to (i) environmental matters, including those
relating to any Hazardous Materials Activity, (ii) the generation, use,
storage, transportation or disposal of Hazardous Materials, or (iii)
occupational safety and health, industrial hygiene, land use or the
protection of human, plant or animal health or welfare, in any manner
applicable to Company or any of its Subsidiaries or any Facility,
including the Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. ss. 9601 et seq.), the Hazardous Materials
Transportation Act (49 U.S.C. ss. 1801 et seq.), the Resource Conservation
and Recovery Act (42 U.S.C. ss. 6901 et seq.), the Federal Water Pollution
Control Act (33 U.S.C. ss. 1251 et seq.), the Clean Air Act (42 U.S.C. ss.
7401 et seq.), the Toxic Substances Control Act (15 U.S.C. ss. 2601 et
seq.), the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C.
ss.136 et seq.), the Occupational Safety and Health Act (29 U.S.C. ss. 651
et seq.), the Oil Pollution Act (33 U.S.C. ss. 2701 et seq) and the
Emergency Planning and Community Right-to-Know Act (42 U.S.C. ss. 11001 et
seq.), each as amended or supplemented, any analogous present or future
state or local statutes or laws, and any regulations promulgated pursuant
to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any successor thereto.
"ERISA Affiliate" means, as applied to any Person, (i) any
corporation which is a member of a controlled group of corporations within
the meaning of Section 414(b) of the Internal Revenue Code of which that
Person is a member; (ii) any trade or business (whether or not
incorporated) which is a member of a group of trades or businesses under
common control within the meaning of Section 414(c) of the Internal
Revenue Code of which that Person is a member; and (iii) any member of an
affiliated service group within the meaning of Section 414(m) or (o) of
the Internal Revenue Code of which that Person, any corporation described
in clause (i) above or any trade or business described in clause (ii)
above is a member. Any
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former ERISA Affiliate of Company or any of its Subsidiaries shall
continue to be considered an ERISA Affiliate of Company or such Subsidiary
within the meaning of this definition with respect to the period such
entity was an ERISA Affiliate of Company or such Subsidiary and with
respect to liabilities arising after such period for which Company or such
Subsidiary could be liable under the Internal Revenue Code or ERISA.
"ERISA Event" means (i) a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect
to any Pension Plan (excluding those for which the provision for 30-day
notice to the PBGC has been waived by regulation); (ii) the failure to
meet the minimum funding standard of Section 412 of the Internal Revenue
Code with respect to any Pension Plan (whether or not waived in accordance
with Section 412(d) of the Internal Revenue Code) or the failure to make
by its due date a required installment under Section 412(m) of the
Internal Revenue Code with respect to any Pension Plan or the failure to
make any required contribution to a Multiemployer Plan; (iii) the
provision by the administrator of any Pension Plan pursuant to Section
4041(a)(2) of ERISA of a notice of intent to terminate such plan in a
distress termination described in Section 4041(c) of ERISA; (iv) the
withdrawal by Company, any of its Subsidiaries or any of their respective
ERISA Affiliates from any Pension Plan with two or more contributing
sponsors or the termination of any such Pension Plan resulting in
liability pursuant to Section 4063 or 4064 of ERISA; (v) the institution
by the PBGC of proceedings to terminate any Pension Plan, or the
occurrence of any event or condition which could reasonably be expected to
constitute grounds under ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan; (vi) the imposition of
liability on Company, any of its Subsidiaries or any of their respective
ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason
of the application of Section 4212(c) of ERISA; (vii) the withdrawal of
Company, any of its Subsidiaries or any of their respective ERISA
Affiliates in a complete or partial withdrawal (within the meaning of
Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if there is
any potential liability therefor, or the receipt by Company, any of its
Subsidiaries or any of their respective ERISA Affiliates of notice from
any Multiemployer Plan that it is in reorganization or insolvency pursuant
to Section 4241 or 4245 of ERISA, or that it intends to terminate or has
terminated under Section 4041A or 4042 of ERISA; (viii) the occurrence of
an act or omission which could reasonably be expected to give rise to the
imposition on Company, any of its Subsidiaries or any of their respective
ERISA Affiliates of fines, penalties, taxes or related charges under
Chapter 43 of the Internal Revenue Code or under Section 409, Section
502(c), (i) or (l), or Section 4071 of ERISA in respect of any Employee
Benefit Plan; (ix) the assertion of a material claim (other than routine
claims for benefits) against any Employee Benefit Plan other than a
Multiemployer Plan or the assets thereof, or against Company, any of its
Subsidiaries or any of their respective ERISA Affiliates in connection
with any Employee Benefit Plan; (x) receipt from the Internal Revenue
Service of notice of the failure of any
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Pension Plan (or any other Employee Benefit Plan intended to be qualified
under Section 401(a) of the Internal Revenue Code) to qualify under
Section 401(a) of the Internal Revenue Code, or the failure of any trust
forming part of any Pension Plan to qualify for exemption from taxation
under Section 501(a) of the Internal Revenue Code; or (xi) the imposition
of a Lien pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue
Code or pursuant to ERISA with respect to any Pension Plan.
"Eurocurrency Liabilities" has the meaning specified in Regulation D
of the Board of Governors of the Federal Reserve System, as in effect from
time to time.
"Eurodollar Rate Loans" means Revolving Loans bearing interest at
rates determined by reference to the Adjusted Eurodollar Rate as provided
in subsection 2.2A.
"Eurodollar Rate Reserve Percentage" means, for any Interest Period
for all Eurodollar Rate Loans comprising part of the same Borrowing, the
reserve percentage applicable two Business Days before the first day of
such Interest Period under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve
requirement) for a member bank of the Federal Reserve System in New York
City with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities (or with respect to any other category of
liabilities that includes deposits by reference to which the interest rate
on Eurodollar Rate Loans is determined) having a term equal to such
Interest Period.
"Event of Default" means each of the events set forth in Section 8.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"Exchange Rate" means, on any date when an amount expressed in a
currency other than Dollars is to be determined with respect to any Letter
of Credit, the nominal rate of exchange of the applicable Issuing Lender
in the New York foreign exchange market for the purchase by such Issuing
Lender (by cable transfer) of such currency in exchange for Dollars at
12:00 noon (New York time) one Business Day prior to such date, expressed
as a number of units of such currency per one Dollar.
"Existing Credit Agreements" means any and all credit agreements
entered into by Company, in each case as amended prior to the Closing
Date, as set forth on Schedule 4.1F.
"Facilities" means any and all real property (including all
buildings, fixtures or other improvements located thereon) now, hereafter
or heretofore owned, leased,
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operated or used by Company or any of its Subsidiaries or any of their
respective predecessors or Affiliates.
"Federal Funds Effective Rate" means, for any period, a fluctuating
interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the
next preceding Business Day) by the Federal Reserve Bank of New York, or,
if such rate is not so published for any day which is a Business Day, the
average of the quotations for such day on such transactions received by
Administrative Agent from three Federal funds brokers of recognized
standing selected by Administrative Agent.
"Fee Property" means any real property owned in fee simple by any
Loan Party, other than any such real property designated from time to time
by Collateral Agent in its sole discretion as not being required to be
included in the Collateral.
"Financial Plan" has the meaning assigned to that term in subsection
6.1(xiii).
"First Priority" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document, that (i)
such Lien has priority over any other Lien on such Collateral (other than
Liens permitted pursuant to subsection 7.2A) and (ii) such Lien is the
only Lien (other than Permitted Encumbrances and Liens permitted pursuant
to subsection 7.2) to which such Collateral is subject.
"Fiscal Quarter" means a fiscal quarter of any Fiscal Year.
"Fiscal Year" means the fiscal year of Company and its Subsidiaries
ending on December 31 of each calendar year. For purposes of this
Agreement, any particular Fiscal Year shall be designated by reference to
the calendar year in which such Fiscal Year ends.
"Fleet" has the meaning assigned to that term in the introduction to
this Agreement.
"Flood Hazard Property" means a Mortgaged Property located in an
area designated by the Federal Emergency Management Agency as having
special flood or mud slide hazards.
"Foreign Subsidiary" means a Subsidiary of Company other than a
Domestic Subsidiary.
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"Funding and Payment Office" means (i) the office of Administrative
Agent located at Fleet National Bank, ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or (ii) such other office of Administrative Agent as
may from time to time hereafter be designated as such in a written notice
delivered by Administrative Agent to Company and each Lender.
"Funding Date" means the date of the funding of a Revolving Loan.
"Funding Default" has the meaning assigned to that term in
subsection 2.9.
"GAAP" means, subject to the limitations on the application thereof
set forth in subsection 1.2, generally accepted accounting principles set
forth in opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such
other statements by such other entity as may be approved by a significant
segment of the accounting profession, in each case as the same are
applicable to the circumstances as of the date of determination.
"Governmental Authorization" means any permit, license,
authorization, plan, directive, consent order or consent decree of or from
any federal, state or local governmental authority, agency or court.
"GSCP" has the meaning assigned to that term in the introduction to
this Agreement.
"GSII" means, collectively, GS Capital Partners II, L.P., GS Capital
Partners II Offshore, L.P., ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, L.P. and Bridge Street Fund 1997, L.P.
"Hazardous Materials" means (i) any chemical, material or substance
at any time defined as or included in the definition of "hazardous
substances", "hazardous wastes", "hazardous materials", "extremely
hazardous waste", "acutely hazardous waste", "radioactive waste",
"biohazardous waste", "pollutant", "toxic pollutant", "contaminant",
"restricted hazardous waste", "infectious waste", "toxic substances", or
any other term or expression intended to define, list or classify
substances by reason of properties harmful to health, safety or the indoor
or outdoor environment (including harmful properties such as ignitability,
corrosivity, reactivity, carcinogenicity, toxicity, reproductive toxicity,
"TCLP toxicity" or "EP toxicity" or words of similar import under any
applicable Environmental Laws); (ii) any oil, petroleum, petroleum
fraction or petroleum derived substance; (iii) any drilling fluids,
produced waters and other wastes associated with the exploration,
development or production of crude oil, natural gas or geothermal
resources; (iv) any flammable substances or explosives; (v) any
radioactive materials; (vi) any asbestos-containing materials; (vii) urea
formaldehyde foam insulation; (viii) electrical equipment which contains
any oil or
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dielectric fluid containing polychlorinated biphenyls; (ix) pesticides;
and (x) any other chemical, material or substance, exposure to which is
prohibited, limited or regulated by any governmental authority or which
may or could pose a hazard to the health and safety of the owners,
occupants or any Persons in the vicinity of any Facility or to the indoor
or outdoor environment.
"Hazardous Materials Activity" means any past, current or future
activity, event or occurrence involving any Hazardous Materials, including
the use, manufacture, possession, storage, holding, presence, existence,
location, Release, threatened Release, discharge, placement, generation,
transportation, processing, construction, treatment, abatement, removal,
remediation, disposal, disposition or handling of any Hazardous Materials,
and any corrective action or response action with respect to any of the
foregoing.
"Hedge Agreement" means an Interest Rate Agreement or a Currency
Agreement designed to hedge against fluctuations in interest rates or
currency values, respectively.
"Increased Cost Lender" has the meaning assigned to that term in
subsection 2.10.
"Indebtedness", as applied to any Person, means (i) all indebtedness
for borrowed money, (ii) that portion of obligations with respect to
Capital Leases that is properly classified as a liability on a balance
sheet in conformity with GAAP, (iii) notes payable and drafts accepted
representing extensions of credit whether or not representing obligations
for borrowed money, (iv) any obligation owed for all or any part of the
deferred purchase price of property or services (excluding any such
obligations incurred under ERISA), which purchase price is (a) due more
than six months from the date of incurrence of the obligation in respect
thereof or 12 months in the case of a bona fide trade payable or (b)
evidenced by a note or similar written instrument, and (v) all
indebtedness secured by any Lien on any property or asset owned or held by
that Person regardless of whether the indebtedness secured thereby shall
have been assumed by that Person or is nonrecourse to the credit of that
Person. Obligations under Interest Rate Agreements and Currency Agreements
constitute (X) in the case of Hedge Agreements, Contingent Obligations,
and (Y) in all other cases, Investments, and in neither case constitute
Indebtedness. Any contingent earnout obligations incurred pursuant to any
acquisition agreements shall constitute Contingent Obligations and not
Indebtedness until actually earned and thereafter shall constitute
Indebtedness until paid.
"Indemnitee" has the meaning assigned to that term in subsection
10.3.
"Insolvency Event" means, with respect to any Person, the occurrence
of any of the events described in subsection 8.6 or 8.7; provided that,
solely for purposes of
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32
this definition, any references to Company or any of its Subsidiaries in
subsection 8.6 or 8.7 shall be deemed to be a reference to such Person.
"Insolvency Laws" means the Bankruptcy Code or any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect in the
United States of America or any state thereof.
"Intellectual Property" means all patents, trademarks, tradenames,
copyrights, technology, know-how and processes used in or necessary for
the conduct of the business of Company and its Subsidiaries as currently
conducted that are material to the condition (financial or otherwise),
business or operations of Company and its Subsidiaries, taken as a whole.
"Intercreditor Agreement" means the Intercreditor Agreement dated as
of December 19, 1997 among the Administrative Agent, the AXEL Facility
Agent, the Collateral Agent the Company and the Subsidiary Guarantors as
such agreement may be amended, supplemented or otherwise modified from
time to time.
"Interest Payment Date" means (i) with respect to any Base Rate
Loan, each March 15, June 15, September 15 and December 15 of each year,
commencing on the first such date to occur after the Closing Date, and
(ii) with respect to any Eurodollar Rate Loan, the last day of each
Interest Period applicable to such Eurodollar Rate Loan; provided that in
the case of each Interest Period of longer than three months "Interest
Payment Date" shall also include each date that is three months, or an
integral multiple thereof, after the commencement of such Interest Period.
"Interest Period" has the meaning assigned to that term in
subsection 2.2B.
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement to which Company or any of its
Subsidiaries is a party.
"Interest Rate Determination Date" means, with respect to any
Interest Period, the second Business Day prior to the first day of such
Interest Period.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter, and any
successor statute.
"Inventory" means, with respect to any Person as of any date of
determination, all goods, merchandise and other personal property which
are then held by such Person for sale or lease, including raw materials
and work in process.
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"Investment" means (i) any direct or indirect purchase or other
acquisition by Company or any of its Subsidiaries of, or of a beneficial
interest in, any Securities of any other Person (including any Subsidiary
of Company), (ii) any direct or indirect redemption, retirement, purchase
or other acquisition for value, by any Subsidiary of Company from any
Person other than Company or any of its Subsidiaries, of any equity
Securities of such Subsidiary, (iii) any direct or indirect loan, advance
(other than advances to employees for moving, entertainment and travel
expenses, drawing accounts and similar expenditures in the ordinary course
of business) or capital contribution by Company or any of its Subsidiaries
to any other Person, including all indebtedness and accounts receivable
from that other Person that are not current assets or did not arise from
sales to that other Person in the ordinary course of business, or (iv)
Interest Rate Agreements or Currency Agreements not constituting Hedge
Agreements. The amount of any Investment shall be the original cost of
such Investment plus the cost of all additions thereto, without any
adjustments for increases or decreases in value, or write-ups, write-downs
or write-offs with respect to such Investment.
"Issuing Lender" means, with respect to any Letter of Credit, the
Lender which agrees or is otherwise obligated to issue such Letter of
Credit, determined as provided in subsection 3.1B(ii).
"Joint Venture" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form;
provided that in no event shall any corporate Subsidiary of any Person be
considered to be a Joint Venture to which such Person is a party.
"Landlord Consent and Estoppel" means, with respect to any Leasehold
Property, a letter, certificate or other instrument in writing from the
lessor under the related lease, satisfactory in form and substance to
Collateral Agent, pursuant to which such lessor agrees, for the benefit of
Collateral Agent, (i) to the matters contained in the form of Collateral
Access Agreement applicable to a Leasehold Property, and (ii) to such
other matters relating to such Leasehold Property as Collateral Agent may
reasonably request, including, without limitation that without any further
consent of such lessor or any further action on the part of the Loan Party
holding such Leasehold Property, such Leasehold Property may be encumbered
pursuant to a Mortgage and may be assigned to the purchaser at a
foreclosure sale or in a transfer in lieu of such a sale (and to a
subsequent third party assignee if Collateral Agent, any Lender, or an
Affiliate of either so acquires such Leasehold Property).
"Leasehold Property" means any leasehold interest of any Loan Party
as lessee under any lease of real property, other than any such leasehold
interest designated from time to time by Collateral Agent in its sole
discretion as not being required to be included in the Collateral.
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"Lender" and "Lenders" means the persons identified as "Lenders" and
listed on the signature pages of this Agreement, together with their
successors and permitted assigns pursuant to subsection 10.1; provided
that the term "Lenders", when used in the context of a particular
Commitment, shall mean Lenders having that Commitment.
"Letter of Credit" or "Letters of Credit" means Commercial Letters
of Credit and Standby Letters of Credit issued or to be issued by Issuing
Lenders for the account of Company pursuant to subsection 3.1.
"Letter of Credit Usage" means, as at any date of determination, the
sum of (i) the maximum aggregate amount which is or at any time thereafter
may become available for drawing under all Letters of Credit then
outstanding plus (ii) the aggregate amount of all drawings under Letters
of Credit honored by Issuing Lenders and not theretofore reimbursed by
Company (including any such reimbursement out of the proceeds of Revolving
Loans pursuant to subsection 3.3B). For purposes of this definition, any
amount described in clause (i) or (ii) of the preceding sentence which is
denominated in a currency other than Dollars shall be valued based on the
applicable Exchange Rate for such currency as of the applicable date of
determination.
"Lien" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional
sale or other title retention agreement, any lease in the nature thereof,
and any agreement to give any security interest) and any option, trust or
other preferential arrangement having the practical effect of any of the
foregoing.
"Loan Documents" means the Revolving Loan Documents and the AXEL
Loan Documents.
"Loan Party" means each of Company and any of Company's Subsidiaries
from time to time executing a Loan Document, and "Loan Parties" means all
such Persons, collectively.
"Management Investors" means the management officers and employees
of Company and its Subsidiaries identified as Management Investors on
Schedule 4.1C annexed hereto.
"Margin Stock" has the meaning assigned to that term in Regulation U
of the Board of Governors of the Federal Reserve System as in effect from
time to time.
"Material Adverse Effect" means (i) a material adverse effect upon
the business, operations, properties, assets, condition (financial or
otherwise) or prospects of Company or any of its Subsidiaries or (ii) the
impairment in any material respect
REVOLVING LOAN CREDIT AGREEMENT EXECUTION
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35
of the ability of the Loan Parties, taken as a whole, to perform, or of
Administrative Agent or Lenders to enforce, the Obligations.
"Material Contract" means any contract or other arrangement to which
Company or any of its Subsidiaries is a party (other than the Loan
Documents) for which breach, nonperformance, cancellation or failure to
renew could reasonably be expected to have a Material Adverse Effect.
"Material Domestic Subsidiary" means each Domestic Subsidiary of
Company now existing or hereafter acquired or formed by Company which, on
a consolidated basis for such Subsidiary and its Subsidiaries, (i) for the
most recent Fiscal Year account for more than 5% of the consolidated
revenues of Company and its Subsidiaries or (ii) as at the end of such
Fiscal Year, was the owner of more than 5% of the consolidated assets of
Company and its Subsidiaries.
"Material Leasehold Property" means a Leasehold Property reasonably
determined by Administrative Agent to be of material value as Collateral
or of material importance to the operations of Company or any of its
Subsidiaries; provided, however that, excepting any such Leasehold
Properties set forth on Schedule 4.1I annexed hereto, no Leasehold
Property with respect to which the aggregate amount of all rents payable
during any one Fiscal Year is not expected to exceed $500,000 shall be a
"Material Leasehold Property".
"Merger" means the merger of Newco with and into Company in
accordance with the terms of the Recapitalization Agreement, with Company
being the surviving corporation in such Merger.
"Mortgage" means a security instrument (whether designated as a deed
of trust or a mortgage or by any similar title) executed and delivered by
any Loan Party, substantially in the form of Exhibit XVII annexed hereto
or in such other form as may be approved by Collateral Agent in its sole
discretion, in each case with such changes thereto as may be recommended
by Collateral Agent's local counsel based on local laws or customary local
mortgage or deed of trust practices. "Mortgages" means all such
instruments collectively.
"Mortgaged Property" has the meaning assigned to that term in
subsection 6.9.
"Mortgage Policy" has the meaning assigned to that term in
subsection 6.9.
"Multiemployer Plan" means any Employee Benefit Plan which is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
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"Net Asset Sale Proceeds" means, with respect to any Asset Sale,
Cash payments (including any Cash received by way of deferred payment
pursuant to, or by monetization of, a note receivable or otherwise, but
only as and when so received) received from such Asset Sale, net of any
bona fide direct costs, including, without limitation, all transaction
costs, incurred in connection with such Asset Sale, including (i) income
taxes reasonably estimated to be actually payable within two years of the
date of such Asset Sale as a result of any gain recognized in connection
with such Asset Sale and (ii) payment of the outstanding principal amount
of, premium or penalty, if any, and interest on any Indebtedness
that is secured by a Lien on the stock or assets in question and that is
prior to the Lien securing the Revolving Loans on such stock or assets and
is required to be repaid under the terms thereof as a result of such Asset
Sale.
"Net Insurance/Condemnation Proceeds" means any Cash payments or
proceeds received by Company or any of its Subsidiaries (i) under any
business interruption or casualty insurance policy in respect of a covered
loss thereunder or (ii) as a result of the taking of any assets of Company
or any of its Subsidiaries by any Person pursuant to the power of eminent
domain, condemnation or otherwise, or pursuant to a sale of any such
assets to a purchaser with such power under threat of such a taking, in
each case net of (x) any actual and reasonable documented costs incurred
by Company or any of its Subsidiaries in connection with the adjustment or
settlement of any claims of Company or such Subsidiary in respect thereof
and (y) any amounts required to be applied to the repayment of any
Indebtedness secured by a Lien which is prior to any Liens of the Lenders
on the asset or assets that are subject to the taking, condemnation or
casualty but excluding, however, in each case any payments or proceeds
relating to assets having a value of $500,000 or less in any single
transaction or related series of transactions.
"Newco" has the meaning assigned to that term in the introduction to
this Agreement.
"Newco Common Stock" means the shares of common stock of Newco par
value $0.10 per share to be converted into shares of Company Common Stock
upon consummation of the Merger.
"Non-Consenting Lender" has the meaning assigned to that term in
subsection 2.10.
"Notice of Borrowing" means a notice substantially in the form of
Exhibit I annexed hereto delivered by Company to Administrative Agent
pursuant to subsection 2.1B with respect to a proposed borrowing.
"Notice of Conversion/Continuation" means a notice substantially in
the form of Exhibit II annexed hereto delivered by Company to
Administrative Agent pursuant
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37
to subsection 2.2D with respect to a proposed conversion or continuation
of the applicable basis for determining the interest rate with respect to
the Revolving Loans specified therein.
"Notice of Issuance of Letter of Credit" means a notice
substantially in the form of Exhibit III annexed hereto delivered by
Company to Administrative Agent pursuant to subsection 3.1B(i) with
respect to the proposed issuance of a Letter of Credit.
"Obligations" means all obligations of every nature of each Loan
Party from time to time owed to Agents, Lenders or their respective
Affiliates or any of them under the Revolving Loan Documents, whether for
principal, interest, reimbursement of amounts drawn under Letters of
Credit, fees, expenses, indemnification or otherwise.
"Officers' Certificate" means, as applied to any corporation, a
certificate executed on behalf of such corporation by its chairman of the
board (if an officer) or its president or one of its vice presidents and
by its chief financial officer or its treasurer; provided that every
Officers' Certificate with respect to the compliance with a condition
precedent to the making of any Revolving Loans hereunder shall include (i)
a statement that the officer or officers making or giving such Officers'
Certificate have read such condition and any definitions or other
provisions contained in this Agreement relating thereto, (ii) a statement
that, in the opinion of the signers, they have made or have caused to be
made such examination or investigation as is necessary to enable them to
express an informed opinion as to whether or not such condition has been
complied with, and (iii) a statement as to whether, in the opinion of the
signers, such condition has been complied with.
"Old Management Shares" means shares of Company Common Stock held by
Management Investors prior to the consummation of the Merger.
"Operating Lease" means, as applied to any Person, any lease
(including leases that may be terminated by the lessee at any time) of any
property (whether real, personal or mixed) that is not a Capital Lease
other than any such lease under which that Person is the lessor.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal
Revenue Code or Section 302 of ERISA.
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"Permitted Business Acquisition" has the meaning assigned to that
term in subsection 7.7(vi).
"Permitted Encumbrances" means the following types of Liens
(excluding any such Lien imposed pursuant to Section 401(a)(29) or 412(n)
of the Internal Revenue Code or by ERISA, any such Lien relating to or
imposed in connection with any Environmental Claim, and any such Lien
expressly prohibited by any applicable terms of any of the Collateral
Documents):
(i) Liens for taxes, assessments or governmental charges or
claims the payment of which is not, at the time, required by
subsection 6.3;
(ii) statutory Liens of landlords, statutory Liens of banks
and rights of set-off, statutory Liens of carriers, warehousemen,
mechanics, repairmen, workmen and materialmen, and other Liens
imposed by law, in each case incurred in the ordinary course of
business (a) for amounts not yet overdue or (b) for amounts that are
overdue and that (in the case of any such amounts overdue for a
period in excess of 15 days) are being contested in good faith by
appropriate proceedings, so long as (1) such reserves or other
appropriate provisions, if any, as shall be required by GAAP shall
have been made for any such contested amounts, and (2) in the case
of a Lien with respect to any portion of the Collateral, such
contest proceedings conclusively operate to stay the sale of any
portion of the Collateral on account of such Lien;
(iii) Liens incurred or deposits made in the ordinary course
of business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, trade contracts,
performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money), so
long as no foreclosure, sale or similar proceedings have been
commenced with respect to any portion of the Collateral on account
thereof;
(iv) any attachment or judgment Lien not constituting an Event
of Default under subsection 8.8;
(v) leases or subleases granted to third parties in accordance
with any applicable terms of the Collateral Documents and not
interfering in any material respect with the ordinary conduct of the
business of Company or any of its Subsidiaries or resulting in a
material diminution in the value of any Collateral as security for
the Obligations;
(vi) easements, rights-of-way, covenants, conditions,
restrictions, encroachments, and other defects or irregularities in
title, in each case which
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do not and will not interfere in any material respect with the
ordinary conduct of the business of Company or any of its
Subsidiaries or result in a material diminution in the value of
any Collateral as security for the Obligations;
(vii) any (a) interest or title of a lessor or sublessor under
any lease permitted by subsection 7.9, (b) restriction or
encumbrance that the interest or title of such lessor or sublessor
may be subject to, or (c) subordination of the interest of the
lessee or sublessee under such lease to any restriction or
encumbrance referred to in the preceding clause (b), so long as the
holder of such restriction or encumbrance agrees to recognize the
rights of such lessee or sublessee under such lease;
(viii) Liens arising from filing UCC financing statements
relating solely to leases permitted by this Agreement;
(ix) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection
with the importation of goods;
(x) any zoning or similar law or right reserved to or vested
in any governmental office or agency to control or regulate the use
of any real property;
(xi) Liens securing obligations (other than obligations
representing Indebtedness for borrowed money) under operating,
reciprocal easement or similar agreements entered into in the
ordinary course of business of Company and its Subsidiaries; and
(xii) licenses of patents, trademarks and other intellectual
property rights granted by Company or any of its Subsidiaries in the
ordinary course of business and not interfering in any material
respect with the ordinary conduct of the business of Company or such
Subsidiary.
"Person" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures,
associations, companies, trusts, banks, trust companies, land trusts,
business trusts or other organizations, whether or not legal entities, and
governments (whether federal, state or local, domestic or foreign, and
including political subdivisions thereof) and agencies or other
administrative or regulatory bodies thereof.
"Pledged Collateral" means, collectively, the "Pledged Collateral"
as defined in the Company Pledge Agreement and the Subsidiary Pledge
Agreements.
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"Potential Event of Default" means a condition or event that, after
notice or lapse of time or both, would constitute an Event of Default.
"Prime Rate" means the rate that Fleet announces from time to time
as its prime lending rate, as in effect from time to time. The Prime Rate
is a reference rate and does not necessarily represent the lowest or best
rate actually charged to any customer. Fleet or any other Lender may make
commercial loans or other loans at rates of interest at, above or below
the Prime Rate.
"Pro Forma Basis" means, with respect to compliance with the
Consolidated Leverage Test for purposes of subsections 7.1(viii), 7.1(x)
or 7.7(vi), compliance with the Consolidated Leverage Test after giving
effect to acquisitions and incurrence or assumption of any Indebtedness in
connection therewith. For purposes of such calculations any Indebtedness
incurred under subsection 7.1(viii), 7.1(x) or 7.7(vi) or otherwise
incurred or assumed in connection with an acquisition subsequent to the
beginning of the four quarter calculation period, but on or prior to the
date of calculation of the Consolidated Leverage Test, shall be deemed to
have been incurred or assumed at the beginning of such four quarter
calculation period. In addition, for such purposes, acquisitions will be
given pro forma effect as follows:
(i) (A) acquisitions that have been made or are being made by the
Company or any of its Subsidiaries during the four-quarter
reference period or subsequent to such reference period and on
or prior to the calculation date (including through mergers or
consolidations and including any related financing
transactions) shall be deemed to have occurred on the first
day of the four-quarter reference period, and
(B) for purposes of determining the pro forma effects of any
such acquisition, Consolidated Adjusted EBITDA shall be
increased to reflect the annualized amount of any cost savings
expected by the Company to be realized in connection with such
acquisition (from steps to be taken not later than the first
anniversary of such acquisition, and without reduction for any
non-recurring charges expected in connection with such
acquisition), as set forth in an Officers' Certificate signed
by the Company's chief executive and chief financial officers
(which shall be determinative of such matters) which states
(x) the amount of such increase, (y) that such increase is
based on the reasonable beliefs of the officers executing such
Officers' Certificate at the time of such execution (and that
estimates of cost savings from prior acquisitions have been
reevaluated and updated) and (z) that any related incurrence
of Indebtedness is permitted pursuant to this Agreement.
(ii) Consolidated Adjusted EBITDA shall be further increased to
reflect the annualized amount of any cost savings expected by the
Company but not
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yet realized in respect of any acquisition made by the Company
during the four fiscal quarters immediately preceding the
four-quarter calculation period prior to the calculation date, to
the extent such cost savings are (x) expected to result from steps
taken not later than the first anniversary of the relevant
acquisition and (y) determined and certified as set forth in clause
(i) above.
In addition, in calculating the Consolidated Leverage Ratio, discontinued
operations will be given pro forma effect by excluding any Consolidated
Adjusted EBITDA attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses disposed of on or prior
to the calculation date.
"Pro Rata Share" means with respect to all payments, computations
and other matters relating to the Revolving Loan Commitment or the
Revolving Loans of any Lender or any Letters of Credit issued or
participations therein purchased by any Lender, the percentage obtained by
dividing (x) the Revolving Loan Exposure of that Lender by (y) the
aggregate Revolving Loan Exposure of all Lenders, in any such case as the
applicable percentage may be adjusted by assignments permitted pursuant to
subsection 10.1.
"Qualified Public Offering" means any sale of capital stock of the
Company to the public pursuant to an offering registered under the
Securities Act of 1933 pursuant to which the Company receives cash
proceeds (net of all fees and expenses (including underwriting discounts
and legal, investment banking and accounting and other professional fees)
and disbursements actually incurred in connection therewith) in an amount
not less than $50,000,000.
"Real Property Asset" means, at any time of determination, any
interest then owned by any Loan Party in any real property.
"Recapitalization Agreement" means that certain Agreement and Plan
of Merger between Company and Newco dated as of August 10, 1997, in the
form delivered to Arranger, Administrative Agent and Lenders prior to
their execution of this Agreement and as such agreement may be amended
from time to time thereafter to the extent permitted under subsection
7.15A.
"Recapitalization Consideration" means payments required under
Article II of the Recapitalization Agreement.
"Recapitalization Documents" means the Recapitalization Agreement
and all other instruments or documents relating to the Recapitalization
Agreement.
"Recapitalization Financing Requirements" means the aggregate of all
amounts necessary (i) to pay the Recapitalization Consideration, (ii) to
refinance all
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Indebtedness outstanding under the Existing Credit Agreements, and (iii)
to pay Transaction Costs.
"Recorded Leasehold Interest" means a Leasehold Property with
respect to which a Record Document (as hereinafter defined) has been
recorded in all places necessary or desirable, in Collateral Agent's
reasonable judgment, to give constructive notice of such Leasehold
Property to third-party purchasers and encumbrancers of the affected real
property. For purposes of this definition, the term "Record Document"
means, with respect to any Leasehold Property, (a) the lease evidencing
such Leasehold Property or a memorandum thereof, executed and acknowledged
by the owner of the affected real property, as lessor, or (b) if such
Leasehold Property was acquired or subleased from the holder of a Recorded
Leasehold Interest, the applicable assignment or sublease document,
executed and acknowledged by such holder, in each case in form sufficient
to give such constructive notice upon recordation and otherwise in form
reasonably satisfactory to Administrative Agent.
"Register" has the meaning assigned to that term in subsection 2.1D.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Reimbursement Date" has the meaning assigned to that term in
subsection 3.3B.
"Related Agreements" means, collectively, the Certificate of Merger,
the Stockholders Agreement, the Voting Agreement, the Employment
Agreements, the Tax Indemnification Agreement, the Recapitalization
Agreement and the Senior Subordinated Note Indenture.
"Related Fund" means, with respect to any Lender that is a fund that
invests in commercial loans, any other fund that invests in commercial
loans and is managed by the same investment advisor as such Lender or by
an Affiliate of such investment advisor.
"Release" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of Hazardous Materials into the indoor or
outdoor environment (including the abandonment or disposal of any barrels,
containers or other closed receptacles containing any Hazardous
Materials), including the movement of any Hazardous Materials through the
air, soil, surface water or groundwater.
"Replacement Lender" has the meaning assigned to that term in
subsection 2.10.
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"Requirement of Law" means, with respect to any Person, (i) the
certificate or articles of incorporation, by-laws and other organizational
or governing documents of such Person, (ii) any law, treaty, rule,
regulation or determination of an arbitrator, court or other governmental
authority binding on such Person or any of its property, or (iii) any
franchise, license, lease, permit, certificate, authorization,
qualification, easement, right of way, or right of approval binding on
such Person or any of its property.
"Required Prepayment Date" has the meaning assigned to that term in
subsection 2.4.
"Requisite Lenders" means Lenders having or holding more than 50% of
the aggregate Revolving Loan Exposure of all Lenders.
"Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
stock of Company now or hereafter outstanding, except a dividend payable
solely in shares of that class of stock to the holders of that class, (ii)
any redemption, retirement, sinking fund or similar payment, purchase or
other acquisition for value, direct or indirect, of any shares of any
class of stock of Company now or hereafter outstanding, (iii) any payment
made to retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire shares of any class of stock of Company
now or hereafter outstanding, and (iv) any payment or prepayment of
principal of, premium, if any, or interest on, or redemption, purchase,
retirement, defeasance (including in-substance or legal defeasance),
sinking fund or similar payment with respect to, any Subordinated
Indebtedness.
"Revolving Loan Commitment" means the commitment of a Lender to make
Revolving Loans to Company pursuant to subsection 2.1A, and "Revolving
Loan Commitments" means such commitments of all Lenders in the aggregate.
"Revolving Loan Commitment Termination Date" means December 31,
2002.
"Revolving Loan Documents" means this Agreement, the Revolving
Notes, the Letters of Credit (and any applications for, or reimbursement
agreements or other documents or certificates executed by Company in favor
of an Issuing Lender relating to, the Letters of Credit), the Subsidiary
Guaranty, the Collateral Documents, any Hedging Agreements with Lenders
and the Intercreditor Agreement.
"Revolving Loan Exposure" means, with respect to any Lender as of
any date of determination (i) prior to the termination of the Revolving
Loan Commitments, that Lender's Revolving Loan Commitment and (ii) after
the termination of the Revolving Loan Commitments, the sum of (a) the
aggregate outstanding principal amount of the Revolving Loans of that
Lender plus (b) in the event that Lender is
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an Issuing Lender, the aggregate Letter of Credit Usage in respect of all
Letters of Credit issued by that Lender (in each case net of any
participations purchased by other Lenders in such Letters of Credit or any
unreimbursed drawings thereunder) plus (c) the aggregate amount of all
participations purchased by that Lender in any outstanding Letters of
Credit or any unreimbursed drawings under any Letters of Credit.
"Revolving Loans" means the loans made by Lenders to Company
pursuant to subsection 2.1A.
"Revolving Notes" means (i) the promissory notes of Company issued
pursuant to subsection 2.1E on the Closing Date and (ii) any promissory
notes issued by Company pursuant to the last sentence of subsection
10.1B(i) in connection with assignments of the Revolving Loan Commitments
and Revolving Loans of any Lenders, in each case substantially in the form
of Exhibit V annexed hereto, as they may be amended, supplemented or
otherwise modified from time to time.
"Seasonal/Promotional Accounts" means (i) Accounts relating to sales
of merchandise which Accounts are categorized as seasonal by the Company
consistent with past practices and (ii) Accounts which are categorized as
promotional consistent with past practices of the Company because such
Accounts are with new Account Debtors (including, without limitation, new
stores for existing Account Debtors) or relate to new products.
"Secured Parties" has the meaning assigned to that term in the
introduction to this Agreement.
"Securities" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds,
debentures, notes, or other evidences of indebtedness, secured or
unsecured, convertible, subordinated or otherwise, or in general any
instruments commonly known as "securities" or any certificates of
interest, shares or participations in temporary or interim certificates
for the purchase or acquisition of, or any right to subscribe to, purchase
or acquire, any of the foregoing provided that "Securities" shall not
include any earnout agreement or obligation or any employee bonus or other
incentive compensation plan or agreement.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, and any successor statute.
"Senior Subordinated Note Indenture" means the indenture pursuant to
which the Senior Subordinated Notes are issued, as such indenture may be
amended from time to time to the extent permitted under subsection 7.15B.
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"Senior Subordinated Notes" means the $110,000,000 in aggregate
principal amount of 9,875% Senior Subordinated Notes due 2007 of Company
issued pursuant to the Senior Subordinated Note Indenture.
"Solvent" means, with respect to any Person, that as of the date of
determination both (A) (i) the then fair saleable value of the property of
such Person is (y) greater than the total amount of liabilities (including
contingent liabilities) of such Person and (z) not less than the amount
that will be required to pay the probable liabilities on such Person's
then existing debts as they become absolute and matured considering all
financing alternatives and potential asset sales reasonably available to
such Person; (ii) such Person's capital is not unreasonably small in
relation to its business or any contemplated or undertaken transaction;
and (iii) such Person does not intend to incur, or believe (nor should it
reasonably believe) that it will incur, debts beyond its ability to pay
such debts as they become due; and (B) such Person is "solvent" within the
meaning given that term and similar terms under applicable laws relating
to fraudulent transfers and conveyances. For purposes of this definition,
the amount of any contingent liability at any time shall be computed as
the amount that, in light of all of the facts and circumstances existing
at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
"Standby Letter of Credit" means any standby letter of credit or
similar instrument issued for the purpose of supporting (i) Indebtedness
of Company or any of its Subsidiaries in respect of industrial revenue or
development bonds or financings, (ii) workers' compensation liabilities of
Company or any of its Subsidiaries, (iii) the obligations of third party
insurers of Company or any of its Subsidiaries arising by virtue of the
laws of any jurisdiction requiring third party insurers, (iv) obligations
with respect to Capital Leases or Operating Leases of Company or any of
its Subsidiaries, and (v) performance, payment, deposit or surety
obligations of Company or any of its Subsidiaries, in any case if required
by law or governmental rule or regulation or in accordance with custom and
practice in the industry; provided that Standby Letters of Credit may not
be issued for the purpose of supporting (a) trade payables or (b) any
Indebtedness constituting "antecedent debt" (as that term is used in
Section 547 of the Bankruptcy Code).
"Stockholders Agreement" means the Stockholders Agreement dated as
of December 19, 1997 by and among Company, GSII, the Estate of ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇▇ and certain other individuals and as such agreement may be
amended from time to time thereafter to the extent permitted under
subsection 7.14A.
"Subordinated Indebtedness" means (i) the Indebtedness of Company
evidenced by the Senior Subordinated Notes and (ii) any other Indebtedness
of Company subordinated in right of payment to the Obligations pursuant to
documentation containing maturities, amortization schedules, covenants,
defaults, remedies,
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subordination provisions and other material terms in form and substance
satisfactory to Administrative Agent and Requisite Lenders.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, limited liability company, association, joint venture or
other business entity of which more than 50% of the total voting power of
shares of stock or other ownership interests entitled (without regard to
the occurrence of any contingency) to vote in the election of the Person
or Persons (whether directors, managers, trustees or other Persons
performing similar functions) having the power to direct or cause the
direction of the management and policies thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the
other Subsidiaries of that Person or a combination thereof.
"Subsidiary Guarantor" means any Subsidiary of Company that executes
and delivers a counterpart of the Subsidiary Guaranty on the Closing Date
or from time to time thereafter pursuant to subsection 6.8.
"Subsidiary Guaranty" means the Subsidiary Guaranty executed and
delivered by existing Domestic Subsidiaries of Company on the Closing Date
and to be executed and delivered by additional Domestic Subsidiaries of
Company from time to time thereafter in accordance with subsection 6.8,
substantially in the form of Exhibit XIV annexed hereto, as such
Subsidiary Guaranty may hereafter be amended, supplemented or otherwise
modified from time to time.
"Subsidiary Pledge Agreement" means each Subsidiary Pledge Agreement
executed and delivered by an existing Subsidiary Guarantor on the Closing
Date or executed and delivered by any additional Subsidiary Guarantor from
time to time thereafter in accordance with subsection 6.8, in each case
substantially in the form of Exhibit XV annexed hereto, as such Subsidiary
Pledge Agreement may be amended, supplemented or otherwise modified from
time to time, and "Subsidiary Pledge Agreements" means all such Subsidiary
Pledge Agreements, collectively.
"Subsidiary Security Agreement" means each Subsidiary Security
Agreement executed and delivered by an existing Subsidiary Guarantor on
the Closing Date or executed and delivered by any additional Subsidiary
Guarantor from time to time thereafter in accordance with subsection 6.8,
in each case substantially in the form of Exhibit XVI annexed hereto, as
such Subsidiary Security Agreement may be amended, supplemented or
otherwise modified from time to time, and "Subsidiary Security Agreements"
means all such Subsidiary Security Agreements, collectively.
"Supplemental Collateral Agent" has the meaning assigned to that
term in subsection 9.1D.
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"Syndication Agent" has the meaning assigned to that term in the
introduction to this Agreement.
"Tax" or "Taxes" means any present or future tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature and whatever
called, by whomsoever, on whomsoever and wherever imposed, levied,
collected, withheld or assessed; provided that "Tax on the overall net
income" of a Person shall be construed as a reference to a tax imposed by
the jurisdiction in which that Person is organized or in which that
Person's principal office (and/or, in the case of a Lender, its lending
office) is located or in which that Person (and/or, in the case of a
Lender, its lending office) is deemed to be doing business on all or part
of the net income, profits or gains (whether worldwide, or only insofar as
such income, profits or gains are considered to arise in or to relate to a
particular jurisdiction, or otherwise) of that Person (and/or, in the case
of a Lender, its lending office).
"Tax Indemnification Agreement" means the Tax Indemnification
Agreement dated as of August 10, 1997 by and between Company, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ and the Estate of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ and as such agreement
may be amended from time to time thereafter to the extent permitted under
subsection 7.14A.
"Terminated Lender" has the meaning assigned to that term in
subsection 2.10.
"Title Company" means, collectively one or more title insurance
companies that are members of ALTA and are reasonably satisfactory to
Arranger and Administrative Agent.
"Total Utilization of Revolving Loan Commitments" means, as at any
date of determination, the sum of (i) the aggregate principal amount of
all outstanding Revolving Loans (other than Revolving Loans made for the
purpose of reimbursing the applicable Issuing Lender for any amount drawn
under any Letter of Credit but not yet so applied) plus (ii) the Letter of
Credit Usage.
"Transaction Costs" means the fees, costs and expenses payable by
Company in connection with the transactions contemplated by the Loan
Documents and the Related Agreements.
"UCC" means the Uniform Commercial Code (or any similar or
equivalent legislation) as in effect in any applicable jurisdiction.
"Unreinvested Asset Sale Proceeds" means that portion, if any, of
any Net Asset Sale Proceeds that shall not have been reinvested by Company
and its Subsidiaries in the business of Company and its Subsidiaries
within six months after the date of receipt by Company or any of its
Subsidiaries of such Net Asset Sale
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Proceeds or, in the case of Net Asset Sale Proceeds from the sale of the
▇▇▇▇▇▇▇, New York, Montreal, Quebec or Melbourne, Australia properties,
(i) that portion of Net Asset Sale Proceeds that is not subject to a
binding agreement with a third party to reinvest such Net Asset Sale
Proceeds entered into within six months after the date of receipt of such
Net Asset Sale Proceeds or (ii) if subject to such a binding agreement,
that portion of such Net Asset Sale Proceeds that shall not have been
reinvested within nine months of such binding agreement, such reinvestment
to be evidenced by an Officers' Certificate, satisfactory in form and
substance to Administrative Agent, delivered by Company to Administrative
Agent prior to the expiration of such six-month period and demonstrating
in reasonable detail the reinvestment of such Net Asset Sale Proceeds as
aforesaid.
"Voting Agreement" means the Voting Agreement dated as of August 10,
1997 by and between Newco and the Estate of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ and as such agreement may be amended from time to
time thereafter to the extent permitted under subsection 7.14A.
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under
Agreement.
Except as otherwise expressly provided in this Agreement, all accounting
terms not otherwise defined herein shall have the meanings assigned to them in
conformity with GAAP. Financial statements and other information required to be
delivered by Company to Lenders pursuant to clauses (i), (ii), (iii) and (xiii)
of subsection 6.1 shall be prepared in accordance with GAAP as in effect at the
time of such preparation (and delivered together with the reconciliation
statements provided for in subsection 6.1(v)). Calculations in connection with
the definitions, covenants and other provisions of this Agreement shall utilize
accounting principles and policies in conformity with those used to prepare the
financial statements referred to in subsection 5.3.
1.3 Other Definitional Provisions and Rules of Construction.
A. Any of the terms defined herein may, unless the context otherwise
requires, be used in the singular or the plural, depending on the reference.
B. References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided.
C. The use herein of the word "include" or "including", when following any
general statement, term or matter, shall not be construed to limit such
statement, term or matter to the specific items or matters set forth immediately
following such word or to similar items or matters, whether or not nonlimiting
language (such as "without limitation" or "but not limited to" or words of
similar import) is used with reference thereto, but rather
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shall be deemed to refer to all other items or matters that fall within the
broadest possible scope of such general statement, term or matter.
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 Commitments; Making of Loans; the Register; Notes.
A. Commitments. Subject to the terms and conditions of this Agreement and
in reliance upon the representations and warranties of Company herein set forth,
each Lender hereby severally agrees, subject to the limitations set forth below
with respect to the maximum amount of Revolving Loans permitted to be
outstanding from time to time, to lend to Company from time to time during the
period from the Closing Date to but excluding the Revolving Loan Commitment
Termination Date an aggregate amount not exceeding its Pro Rata Share of the
aggregate amount of the Revolving Loan Commitments to be used for the purposes
identified in subsection 2.5A. The original amount of each Lender's Revolving
Loan Commitment is set forth opposite its name on Schedule 2.1 annexed hereto
and the aggregate original amount of the Revolving Loan Commitments is
$50,000,000; provided that the Revolving Loan Commitments of Lenders shall be
adjusted to give effect to any assignments of the Revolving Loan Commitments
pursuant to subsection 10.1B; and provided, further that the amount of the
Revolving Loan Commitments shall be reduced from time to time by the amount of
any reductions thereto made pursuant to subsections 2.4A(ii) and 2.4A(iii). Each
Lender's Revolving Loan Commitment shall expire on the Revolving Loan Commitment
Termination Date and all Revolving Loans and all other amounts owed hereunder
with respect to the Revolving Loans and the Revolving Loan Commitments shall be
paid in full no later than that date; provided that each Lender's Revolving Loan
Commitment shall expire immediately and without further action on January 31,
1998 if the AXELs are not funded on or before that date. Amounts borrowed under
this subsection 2.1A may be repaid and reborrowed to but excluding the Revolving
Loan Commitment Termination Date.
Anything contained in this Agreement to the contrary notwithstanding, the
Revolving Loans and the Revolving Loan Commitments shall be subject to the
following limitations in the amounts and during the periods indicated:
(i) in no event shall the Total Utilization of Revolving Loan
Commitments at any time exceed either (a) the Revolving Loan Commitments
then in effect or (b) the sum of the Borrowing Base then in effect plus
all amounts spent through such date on Permitted Business Acquisitions
(other than amounts funded through equity issuances or indebtedness other
than Revolving Loans); and
(ii) for 30 consecutive days during each consecutive twelve-month
period, the aggregate outstanding principal amount of all Revolving Loans
shall not exceed
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$10,000,000 plus all amounts spent on Permitted Business Acquisitions
(other than amounts funded through equity issuances or indebtedness other
than Revolving Loans).
B. Borrowing Mechanics. Revolving Loans made on any Funding Date (other
than Revolving Loans made pursuant to subsection 3.3B for the purpose of
reimbursing any Issuing Lender for the amount of a drawing under a Letter of
Credit issued by it) shall be in an aggregate minimum amount of (x) $1,000,000
and integral multiples of $100,000 in excess of that amount in the case of
Eurodollar Rate Loans and (y) $100,000 and integral multiples of $100,000 in
excess of that amount in the case of Base Rate Loans. Whenever Company desires
that Lenders make Revolving Loans it shall deliver to Administrative Agent a
Notice of Borrowing no later than 10:00 A.M. (New York City time) at least three
Business Days in advance of the proposed Funding Date (in the case of a
Eurodollar Rate Loan) or at least one Business Day in advance of the proposed
Funding Date (in the case of a Base Rate Loan). The Notice of Borrowing shall
specify (i) the proposed Funding Date (which shall be a Business Day), (ii) the
amount requested, (iii) whether such Revolving Loans shall be Base Rate Loans or
Eurodollar Rate Loans, (iv) in the case of any Revolving Loans requested to be
made as Eurodollar Rate Loans, the initial Interest Period requested therefor
and (v) that, after giving effect to the requested Revolving Loans, the Total
Utilization of Revolving Loan Commitments will not exceed the Revolving Loan
Commitment then in effect or the sum of the Borrowing Base then in effect and
amounts spent on Permitted Business Acquisitions (other than amounts funded
through equity issuances or indebtedness other than Revolving Loans). Revolving
Loans may be continued as or converted into Base Rate Loans and Eurodollar Rate
Loans in the manner provided in subsection 2.2D. In lieu of delivering the
above-described Notice of Borrowing, Company may give Administrative Agent
telephonic notice by the required time of any proposed borrowing under this
subsection 2.1B; provided that such notice shall be promptly confirmed in
writing by delivery of a Notice of Borrowing to Administrative Agent on or
before the applicable Funding Date.
Neither Administrative Agent nor any Lender shall incur any liability to
Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to borrow on behalf of Company or
for otherwise acting in good faith under this subsection 2.1B, and upon funding
of Revolving Loans by Lenders in accordance with this Agreement pursuant to any
such telephonic notice Company shall have effected Revolving Loans hereunder.
Company shall notify Administrative Agent prior to the funding of any
Revolving Loans in the event that any of the matters to which Company is
required to certify in the applicable Notice of Borrowing is no longer true and
correct as of the applicable Funding Date, and the acceptance by Company of the
proceeds of any Revolving Loans shall constitute a re-certification by Company,
as of the applicable Funding Date, as to the matters to which Company is
required to certify in the applicable Notice of Borrowing.
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Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a Notice
of Borrowing for a Eurodollar Rate Loan (or telephonic notice in lieu thereof)
shall be irrevocable on and after the related Interest Rate Determination Date,
and Company shall be bound to make a borrowing in accordance therewith.
C. Disbursement of Funds. All Revolving Loans under this Agreement shall
be made by Lenders simultaneously and proportionately to their respective Pro
Rata Shares, it being understood that no Lender shall be responsible for any
default by any other Lender in that other Lender's obligation to make a
Revolving Loan requested hereunder nor shall the Revolving Loan Commitment of
any Lender be increased or decreased as a result of a default by any other
Lender in that other Lender's obligation to make a Revolving Loan requested
hereunder. Promptly after receipt by Administrative Agent of a Notice of
Borrowing pursuant to subsection 2.1B (or telephonic notice in lieu thereof),
Administrative Agent shall notify each Lender of the proposed borrowing. Each
Lender shall make the amount of its Revolving Loan available to Administrative
Agent not later than 12:00 Noon (New York City time) on the applicable Funding
Date, in same day funds in Dollars, at the Funding and Payment Office. Except as
provided in subsection 3.3B with respect to Revolving Loans used to reimburse
any Issuing Lender for the amount of a drawing under a Letter of Credit issued
by it, upon satisfaction or waiver of the conditions precedent specified in
subsections 4.1 (in the case of Revolving Loans made on the Closing Date) and
4.2 (in the case of all Revolving Loans), Administrative Agent shall make the
proceeds of such Revolving Loans available to Company on the applicable Funding
Date by causing an amount of same day funds in Dollars equal to the proceeds of
all such Revolving Loans received by Administrative Agent from Lenders to be
credited to the account of Company at the Funding and Payment Office.
Unless Administrative Agent shall have been notified by any Lender prior
to the Funding Date for any Revolving Loans that such Lender does not intend to
make available to Administrative Agent the amount of such Lender's Revolving
Loan requested on such Funding Date, Administrative Agent may assume that such
Lender has made such amount available to Administrative Agent on such Funding
Date and Administrative Agent may, in its sole discretion, but shall not be
obligated to, make available to Company a corresponding amount on such Funding
Date. If such corresponding amount is not in fact made available to
Administrative Agent by such Lender, Administrative Agent shall be entitled to
recover such corresponding amount on demand from such Lender together with
interest thereon, for each day from such Funding Date until the date such amount
is paid to Administrative Agent, at the customary rate set by Administrative
Agent for the correction of errors among banks for three Business Days and
thereafter at the Base Rate. If such Lender does not pay such corresponding
amount forthwith upon Administrative Agent's demand therefor, Administrative
Agent shall promptly notify Company and Company shall immediately pay such
corresponding amount to Administrative Agent together with interest thereon, for
each day from such Funding Date until the date such amount is paid to
Administrative Agent, at the rate payable under this Agreement for Base Rate
Loans. Nothing in this subsection 2.1C shall be deemed to relieve any Lender
from its obligation to fulfill its Revolving Loan
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Commitments hereunder or to prejudice any rights that Company may have against
any Lender as a result of any default by such Lender hereunder.
D. The Register.
(i) Administrative Agent shall maintain, at its address referred to
in subsection 10.8, a register for the recordation of the names and
addresses of Lenders and the Revolving Loan Commitments and Revolving
Loans of each Lender from time to time (the "Register"). The Register
shall be available for inspection by Company or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(ii) Administrative Agent shall record in the Register the Revolving
Loan Commitment and the Revolving Loans from time to time of each Lender
and each repayment or prepayment in respect of the principal amount of the
Revolving Loans of each Lender. Any such recordation shall be conclusive
and binding on Company and each Lender, absent manifest error; provided
that failure to make any such recordation, or any error in such
recordation, shall not affect any Lender's Revolving Loan Commitments or
Company's Obligations in respect of any applicable Revolving Loans.
(iii) Each Lender shall record on its internal records (including
the Notes held by such Lender) the amount of each Revolving Loan made by
it and each payment in respect thereof. Any such recordation shall be
conclusive and binding on Company, absent manifest error; provided that
failure to make any such recordation, or any error in such recordation,
shall not affect any Lender's Revolving Loan Commitments or Company's
Obligations in respect of any applicable Revolving Loans; and provided,
further that in the event of any inconsistency between the Register and
any Lender's records, the recordations in the Register shall govern.
(iv) Company, Administrative Agent and Lenders shall deem and treat
the Persons listed as Lenders in the Register as the holders and owners of
the corresponding Revolving Loan Commitments and Revolving Loans listed
therein for all purposes hereof, and no assignment or transfer of any such
Revolving Loan Commitment or Revolving Loan shall be effective, in each
case unless and until an Assignment Agreement effecting the assignment or
transfer thereof shall have been accepted by Administrative Agent and
recorded in the Register as provided in subsection 10.1B(ii). Prior to
such recordation, all amounts owed with respect to the applicable
Revolving Loan Commitment or Revolving Loan shall be owed to the Lender
listed in the Register as the owner thereof, and any request, authority or
consent of any Person who, at the time of making such request or giving
such authority or consent, is listed in the Register as a Lender shall be
conclusive and binding on any subsequent holder, assignee or transferee of
the corresponding Revolving Loan Commitments or Revolving Loans.
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(v) Company hereby designates Fleet to serve as Company's agent
solely for purposes of maintaining the Register as provided in this
subsection 2.1D, and Company hereby agrees that, to the extent Fleet
serves in such capacity, Fleet and its officers, directors, employees,
agents and affiliates shall constitute Indemnitees for all purposes under
subsection 10.3.
E. Notes. Company shall execute and deliver on the Closing Date to each
Lender (or to Administrative Agent for that Lender) a Revolving Note
substantially in the form of Exhibit V annexed hereto to evidence that Lender's
Revolving Loans, in the principal amount of that Lender's Revolving Loan
Commitment and with other appropriate insertions.
2.2 Interest on the Revolving Loans.
A. Rate of Interest. Subject to the provisions of subsections 2.6 and 2.7,
each Revolving Loan shall bear interest on the unpaid principal amount thereof
from the date made through maturity (whether by acceleration or otherwise) at a
rate determined by reference to the Base Rate or the Adjusted Eurodollar Rate.
The applicable basis for determining the rate of interest with respect to any
Revolving Loan shall be selected by Company initially at the time a Notice of
Borrowing is given with respect to such Revolving Loan pursuant to subsection
2.1B. The basis for determining the interest rate with respect to any Revolving
Loan may be changed from time to time pursuant to subsection 2.2D. If on any day
a Revolving Loan is outstanding with respect to which notice has not been
delivered to Administrative Agent in accordance with the terms of this Agreement
specifying the applicable basis for determining the rate of interest, then for
that day that Revolving Loan shall bear interest determined by reference to the
Base Rate. Subject to the provisions of subsections 2.2E and 2.7, the Revolving
Loans shall bear interest through maturity as follows:
(i) if a Base Rate Loan, then at the sum of the Base Rate plus the
Applicable Revolving Base Rate Margin then in effect; or
(ii) if a Eurodollar Rate Loan, then at the sum of the Adjusted
Eurodollar Rate plus the Applicable Revolving Eurodollar Rate Margin then
in effect.
B. Interest Periods. In connection with each Eurodollar Rate Loan, Company
may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each an
"Interest Period") to be applicable to such Revolving Loan, which Interest
Period shall be, at Company's option, either a one-, two-, three-or six-month
period; provided that:
(i) the initial Interest Period for any Eurodollar Rate Loan shall
commence on the Funding Date in respect of such Revolving Loan, in the
case of a Revolving Loan initially made as a Eurodollar Rate Loan, or on
the date specified
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in the applicable Notice of Conversion/Continuation, in the case of a
Revolving Loan converted to a Eurodollar Rate Loan;
(ii) in the case of immediately successive Interest Periods
applicable to a Eurodollar Rate Loan continued as such pursuant to a
Notice of Conversion/Continuation, each successive Interest Period shall
commence on the day on which the next preceding Interest Period expires;
(iii) if an Interest Period would otherwise expire on a day that is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided that, if any Interest Period would
otherwise expire on a day that is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(iv) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (v) of this subsection 2.2B, end on the
last Business Day of a calendar month;
(v) no Interest Period with respect to any portion of the Revolving
Loans shall extend beyond the Revolving Loan Commitment Termination Date;
(vi) there shall be no more than seven (7) Interest Periods
outstanding at any time under this Agreement and the AXEL Credit
Agreement; and
(vii) in the event Company fails to specify an Interest Period for
any Eurodollar Rate Loan in the applicable Notice of Borrowing or Notice
of Conversion/Continuation, Company shall be deemed to have selected an
Interest Period of one month.
C. Interest Payments. Subject to the provisions of subsection 2.2E,
interest on each Revolving Loan shall be payable in arrears on and to each
Interest Payment Date applicable to that Revolving Loan, upon any prepayment of
that Revolving Loan (to the extent accrued on the amount being prepaid) and at
maturity (including final maturity); provided that in the event any Revolving
Loans that are Base Rate Loans are prepaid pursuant to subsection 2.4A(i),
interest accrued on such Revolving Loans through the date of such prepayment
shall be payable on the next succeeding Interest Payment Date applicable to Base
Rate Loans (or, if earlier, at final maturity).
D. Conversion or Continuation. Subject to the provisions of subsection
2.6, Company shall have the option (i) to convert at any time all or any part of
its outstanding Revolving Loans equal to $1,000,000 and integral multiples of
$100,000 in excess of that amount from Base Rate Loans to Eurodollar Rate Loans
or (ii) to convert at any time all or any part of its outstanding Revolving
Loans equal to $100,000 and integral multiples of
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$100,000 in excess of that amount from Eurodollar Rate Loans to Base Rate Loans
upon the expiration of any Interest Period applicable to a Eurodollar Rate Loan,
to continue all or any portion of such Revolving Loan equal to $1,000,000 and
integral multiples of $100,000 in excess of that amount as a Eurodollar Rate
Loan; provided, however, that a Eurodollar Rate Loan may only be converted into
a Base Rate Loan on the expiration date of an Interest Period applicable
thereto.
Company shall deliver a Notice of Conversion/Continuation to
Administrative Agent no later than 10:00 A.M. (New York City time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan) and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan). A Notice of Conversion/Continuation
shall specify (i) the proposed conversion/continuation date (which shall be a
Business Day), (ii) the amount to be converted/continued, (iii) the nature of
the proposed conversion/continuation, (iv) in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan, the requested Interest Period, and (v)
in the case of a conversion to, or a continuation of, a Eurodollar Rate Loan,
that no Potential Event of Default or Event of Default has occurred and is
continuing. In lieu of delivering the above-described Notice of
Conversion/Continuation, Company may give Administrative Agent telephonic notice
by the required time of any proposed conversion/continuation under this
subsection 2.2D; provided that such notice shall be promptly confirmed in
writing by delivery of a Notice of Conversion/Continuation to Administrative
Agent on or before the proposed conversion/continuation date. Upon receipt of
written or telephonic notice of any proposed conversion/continuation under this
subsection 2.2D, Administrative Agent shall promptly transmit such notice by
telefacsimile or telephone to each Lender.
Neither Administrative Agent nor any Lender shall incur any liability to
Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to act on behalf of Company or for
otherwise acting in good faith under this subsection 2.2D, and upon conversion
or continuation of the applicable basis for determining the interest rate with
respect to any Revolving Loans in accordance with this Agreement pursuant to any
such telephonic notice Company shall have effected a conversion or continuation,
as the case may be, hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a Notice
of Conversion/Continuation for conversion to, or continuation of, a Eurodollar
Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable on and
after the related Interest Rate Determination Date, and Company shall be bound
to effect a conversion or continuation in accordance therewith.
E. Default Rate. Upon the occurrence and during the continuation of any
Event of Default, the outstanding principal amount of all Revolving Loans and,
to the extent permitted by applicable law, any interest payments thereon not
paid when due and any fees
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and other amounts then due and payable hereunder, shall thereafter bear interest
(including post-petition interest in any proceeding under the Bankruptcy Code or
other applicable bankruptcy laws) payable upon demand at a rate that is 2% per
annum in excess of the interest rate otherwise payable under this Agreement with
respect to the applicable Revolving Loans (or, in the case of any such fees and
other amounts, at a rate which is 2% per annum in excess of the interest rate
otherwise payable under this Agreement for Base Rate Loans); provided that, in
the case of Eurodollar Rate Loans, upon the expiration of the Interest Period in
effect at the time any such increase in interest rate is effective such
Eurodollar Rate Loans shall thereupon become Base Rate Loans and shall
thereafter bear interest payable upon demand at a rate which is 2% per annum in
excess of the interest rate otherwise payable under this Agreement for Base Rate
Loans. Payment or acceptance of the increased rates of interest provided for in
this subsection 2.2E is not a permitted alternative to timely payment and shall
not constitute a waiver of any Event of Default or otherwise prejudice or limit
any rights or remedies of Administrative Agent or any Lender.
F. Computation of Interest. Interest on the Revolving Loans shall be
computed on the basis of a 360-day year, in each case for the actual number of
days elapsed in the period during which it accrues. In computing interest on any
Revolving Loan, the date of the making of such Revolving Loan or the first day
of an Interest Period applicable to such Revolving Loan or, with respect to a
Base Rate Loan being converted from a Eurodollar Rate Loan, the date of
conversion of such Eurodollar Rate Loan to such Base Rate Loan, as the case may
be, shall be included, and the date of payment of such Revolving Loan or the
expiration date of an Interest Period applicable to such Revolving Loan or, with
respect to a Base Rate Loan being converted to a Eurodollar Rate Loan, the date
of conversion of such Base Rate Loan to such Eurodollar Rate Loan, as the case
may be, shall be excluded; provided that if a Revolving Loan is repaid on the
same day on which it is made, one day's interest shall be paid on that Revolving
Loan.
2.3 Fees.
A. Commitment Fees. Company agrees to pay to Administrative Agent, for
distribution to each Lender in proportion to that Lender's Pro Rata Share,
commitment fees for the period from and including the Closing Date to and
excluding the Revolving Loan Commitment Termination Date equal to the average of
the daily excess of the Revolving Loan Commitments over the sum of (i) the
aggregate principal amount of outstanding Revolving Loans plus (ii) the Letter
of Credit Usage multiplied by the Applicable Commitment Fee Percentage such
commitment fees to be calculated on the basis of a 360-day year and the actual
number of days elapsed and to be payable quarterly in arrears on March 15, June
15, September 15 and December 15 of each year, commencing on the first such date
to occur after the Closing Date, and on the Revolving Loan Commitment
Termination Date.
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B. Other Fees. Company agrees to pay to Arranger and Administrative Agent
such other fees in the amounts and at the times separately agreed upon between
Company, Arranger and Administrative Agent.
2.4 Prepayments and Reductions in Revolving Loan Commitments; General
Provisions Regarding Payments; Application of Proceeds of Collateral and
Payments Under Subsidiary Guaranty.
A. Prepayments and Unscheduled Reductions in Revolving Loan
Commitments.
(i) Voluntary Prepayments. Company may, upon not less than one
Business Day's prior written or telephonic notice, in the case of Base
Rate Loans, and three Business Days' prior written or telephonic notice,
in the case of Eurodollar Rate Loans, in each case given to Administrative
Agent by 12:00 Noon (New York City time) on the date required and, if
given by telephone, promptly confirmed in writing to Administrative Agent
(which original written or telephonic notice Administrative Agent will
promptly transmit by telefacsimile or telephone to each Lender), at any
time and from time to time prepay any Revolving Loans on any Business Day
in whole or in part in an aggregate minimum amount of $1,000,000 and
integral multiples of $500,000 in excess of that amount. Notice of
prepayment having been given as aforesaid, the principal amount of the
Revolving Loans specified in such notice shall become due and payable on
the prepayment date specified therein. Any such voluntary prepayment shall
be applied as specified in subsection 2.4A(iv).
(ii) Voluntary Reductions of Revolving Loan Commitments. Company
may, upon not less than three Business Days' prior written or telephonic
notice confirmed in writing to Administrative Agent (which original
written or telephonic notice Administrative Agent will promptly transmit
by telefacsimile or telephone to each Lender), at any time and from time
to time terminate in whole or permanently reduce in part, without premium
or penalty, the Revolving Loan Commitments in an amount up to the amount
by which the Revolving Loan Commitments exceed the Total Utilization of
Revolving Loan Commitments at the time of such proposed termination or
reduction; provided that any such partial reduction of the Revolving Loan
Commitments shall be in an aggregate minimum amount of $1,000,000 and
integral multiples of $500,000 in excess of that amount. Company's notice
to Administrative Agent shall designate the date (which shall be a
Business Day) of such termination or reduction and the amount of any
partial reduction, and such termination or reduction of the Revolving Loan
Commitments shall be effective on the date specified in Company's notice
and shall reduce the Revolving Loan Commitment of each Lender
proportionately to its Pro Rata Share. Any such voluntary reduction of the
Revolving Loan Commitments shall be applied as specified in subsection
2.4A(iv).
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(iii) Mandatory Prepayments and Mandatory Reductions of Revolving
Loan Commitments. The AXELs under the AXEL Credit Agreement and the
Revolving Loans shall be prepaid and/or the Revolving Loan Commitments
shall be permanently reduced in the amounts and under the circumstances
set forth below, all such prepayments and/or reductions to be applied as
set forth below or as more specifically provided in subsection 2.4A(iv):
(a) Prepayments and Reductions From Unreinvested Asset Sale
Proceeds. No later than the first Business Day following the date on
which any Net Asset Sale Proceeds become Unreinvested Asset Sale
Proceeds, Company shall prepay the AXELs under the AXEL Credit
Agreement and the Revolving Loans and/or the Revolving Loan
Commitments shall be permanently reduced in an aggregate amount
equal to such Unreinvested Asset Sale Proceeds; provided, further
that, with respect to an Asset Sale of any asset owned by a Foreign
Subsidiary, the Unreinvested Asset Sale Proceeds in respect thereof
shall be applied (i) first, to the extent such Unreinvested Net
Asset Sale Proceeds may be repatriated to the United States without
in the reasonable judgment of the Company resulting in a material
tax liability to Company in relation to the amount of proceeds to be
repatriated, to prepay the AXELs under the AXEL Credit Agreement and
the Revolving Loans and/or permanently reduce the Revolving Loan
Commitments as set forth above in this subsection 2.4A(iii)(a), (ii)
second, to the extent of any remaining portion of such Unreinvested
Asset Sale Proceeds, to finance the general corporate purposes of
such Foreign Subsidiary so long as the aggregate of all such amounts
so applied by all Foreign Subsidiaries with respect to Asset Sales
consummated after the Closing Date does not exceed $5,000,000, and
(iii) third, to the extent of any remaining portion of such
Unreinvested Asset Sale Proceeds, to prepay the AXELs under the AXEL
Credit Agreement and the Revolving Loans and/or reduce the Revolving
Loan Commitments as set forth above in this subsection 2.4A(iii)(a).
Concurrently with any determination by Company that any portion of
any Unreinvested Asset Sale Proceeds of any Foreign Subsidiary will
be applied as described in clause (ii) of the immediately preceding
proviso, Company shall deliver to Agent an Officers' Certificate (w)
certifying that such Unreinvested Asset Sale Proceeds cannot be
repatriated to the United States without resulting in a material tax
liability to Company and the reasons therefor, (y) specifying the
amount of Unreinvested Asset Sale Proceeds to be retained by such
Foreign Subsidiary as described in said clause (ii) and the
cumulative aggregate amount of all such Unreinvested Asset Sale
Proceeds so retained by all Foreign Subsidiaries since the date of
this Agreement and (z) demonstrating the derivation of the
Unreinvested Asset Sale Proceeds of the correlative Asset Sale from
the gross sales price thereof.
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(b) Prepayments and Reductions from Net Insurance/Condemnation
Proceeds. No later than the first Business Day following the date of
receipt by Administrative Agent or by Company or any of its
Subsidiaries of any Net Insurance/Condemnation Proceeds that are
required to be applied to prepay the AXELs under the AXEL Credit
Agreement and the Revolving Loans and/or reduce the Revolving Loan
Commitments pursuant to the provisions of subsection 6.4C or the
Intercreditor Agreement, Company shall prepay the AXELs under the
AXEL Credit Agreement and the Revolving Loans and/or the Revolving
Loan Commitments shall be permanently reduced in an aggregate amount
equal to the amount of such Net Insurance/Condemnation Proceeds.
(c) Prepayments and Reductions Due to Issuance of Debt or
Equity Securities. On the date of receipt by Company or any of its
Subsidiaries of the Cash proceeds (any such proceeds, net of
underwriting discounts and commissions and other reasonable costs
and expenses associated therewith, including reasonable legal fees
and expenses, being "Net Securities Proceeds") from the issuance of
any debt (other than debt permitted by Section 7.1) or equity
Securities of Company or any of its Subsidiaries to any Person other
than Company or any of its Subsidiaries (and excluding any private
issuances of Company Common Stock after the Closing Date to the
extent such funds would not be required to prepay any other
Indebtedness of the Company and its Subsidiaries) after the Closing
Date, Company shall prepay the AXELs under the AXEL Credit Agreement
and the Revolving Loans and/or the Revolving Loan Commitments shall
be permanently reduced in an aggregate amount equal to such Net
Securities Proceeds.
(d) Prepayments and Reductions from Consolidated Excess Cash
Flow. In the event that there shall be Consolidated Excess Cash Flow
for any Fiscal Year (commencing with Fiscal Year 1998), Company
shall, no later than 90 days after the end of such Fiscal Year,
prepay the AXELs under the AXEL Credit Agreement and the Revolving
Loans and/or the Revolving Loan Commitments shall be permanently
reduced in an aggregate amount equal to 75% of such Consolidated
Excess Cash Flow; provided that for any Fiscal Year in which the
Consolidated Leverage Ratio as of the end of any such Fiscal Year is
less than 3.75:1, such percentage of Consolidated Excess Cash Flow
applied to prepay the AXELs under the AXEL Credit Agreement or
reduce Revolving Loan Commitments shall be reduced to 50%.
(e) Calculations of Net Proceeds Amounts; Additional
Prepayments and Reductions Based on Subsequent Calculations.
Concurrently with any prepayment of the AXELs under the AXEL Credit
Agreement and the Revolving Loans and/or reduction of the Revolving
Loan Commitments pursuant to subsections 2.4A(iii)(a)-(d), Company
shall deliver to Administra-
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tive Agent an Officers' Certificate demonstrating the calculation of
the amount (the "Net Proceeds Amount") of the applicable
Unreinvested Asset Sale Proceeds or Net Insurance/Condemnation
Proceeds, the applicable Net Securities Proceeds (as such term is
defined in subsection 2.4A(iii)(c)) or the applicable Consolidated
Excess Cash Flow, as the case may be, that gave rise to such
prepayment and/or reduction. In the event that Company shall
subsequently determine that the actual Net Proceeds Amount was
greater than the amount set forth in such Officers' Certificate,
Company shall promptly make an additional prepayment of the AXELs
under the AXEL Credit Agreement and the Revolving Loans (and/or, if
applicable, the Revolving Loan Commitments shall be permanently
reduced) in an amount equal to the amount of such excess, and
Company shall concurrently therewith deliver to Administrative Agent
an Officers' Certificate demonstrating the derivation of the
additional Net Proceeds Amount resulting in such excess.
(f) Prepayments Due to Reductions or Restrictions of Revolving
Loan Commitments or Due to Insufficient Borrowing Base. Company
shall from time to time prepay the Revolving Loans to the extent
necessary to give effect to the limitations set forth in clauses (i)
and (ii) of the second paragraph of subsection 2.1A.
(iv) Application of Prepayments.
(a) Application of Voluntary Prepayments by Type of Loans and
Order of Maturity. Any voluntary prepayments pursuant to subsection
2.4A(i) shall be applied as specified by Company in the applicable
notice of prepayment.
(b) Application of Mandatory Prepayments by Type of Loans. Any
amount (the "Applied Amount") required to be applied as a mandatory
prepayment of the AXELs under the AXEL Credit Agreement or the
Revolving Loans and/or a reduction of the Revolving Loan Commitments
pursuant to subsections 2.4A(iii)(a)-(e) shall be applied first to
prepay the AXELs under the AXEL Credit Agreement to the full extent
thereof, second, to the extent of any remaining portion of the
Applied Amount, to prepay the Revolving Loans to the full extent
thereof and to further permanently reduce the Revolving Loan
Commitments by the amount of such prepayment, and third, to the
extent of any remaining portion of the Applied Amount, to further
permanently reduce the Revolving Loan Commitments to the full extent
thereof and to cash collateralize any Letters of Credit outstanding
(with any such amounts held in the Collateral Accounts pursuant to
the Intercreditor Agreement). Any prepayments of the Revolving Loans
under subsection 2.4A(iii)(f) shall be applied to reduce the
Revolving Loans.
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(c) Application of Prepayments to Base Rate Loans and
Eurodollar Rate Loans. Considering Revolving Loans being prepaid,
any prepayment thereof shall be applied first to Base Rate Loans, to
the full extent thereof before application to Eurodollar Rate Loans,
in a manner which minimizes the amount of any payments required to
be made by Company pursuant to subsection 2.6D.
B. General Provisions Regarding Payments.
(i) Manner and Time of Payment. All payments by Company of
principal, interest, fees and other Obligations hereunder and under the
Revolving Notes shall be made in Dollars in same day funds, without
defense, setoff or counterclaim, free of any restriction or condition, and
delivered to Administrative Agent not later than 12:00 Noon (New York City
time) on the date due at the Funding and Payment Office for the account of
Lenders; funds received by Administrative Agent after that time on such
due date shall be deemed to have been paid by Company on the next
succeeding Business Day. Company hereby authorizes Administrative Agent to
charge its accounts with Administrative Agent in order to cause timely
payment to be made to Administrative Agent of all principal, interest,
fees and expenses due hereunder (subject to sufficient funds being
available in its accounts for that purpose).
(ii) Application of Payments to Principal and Interest. Except as
provided in subsection 2.2C, all payments in respect of the principal
amount of any Revolving Loan shall include payment of accrued interest on
the principal amount being repaid or prepaid, and all such payments (and,
in any event, any payments in respect of any Revolving Loan on a date when
interest is due and payable with respect to such Loan) shall be applied to
the payment of interest before application to principal.
(iii) Apportionment of Payments. Aggregate principal and interest
payments shall be apportioned among all outstanding Revolving Loans to
which such payments relate, in each case proportionately to Lenders'
respective Pro Rata Shares. Administrative Agent shall promptly distribute
to each Lender, at its primary address set forth below its name on the
appropriate signature page hereof or at such other address as such Lender
may request, its Pro Rata Share of all such payments received by
Administrative Agent and the commitment fees of such Lender when received
by Administrative Agent pursuant to subsection 2.3. Notwithstanding the
foregoing provisions of this subsection 2.4C(iii), if, pursuant to the
provisions of subsection 2.6B, any Notice of Conversion/Continuation is
withdrawn as to any Affected Lender or if any Affected Lender makes Base
Rate Loans in lieu of its Pro Rata Share of any Eurodollar Rate Loans,
Administrative Agent shall give effect thereto in apportioning payments
received thereafter.
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(iv) Payments on Business Days. Whenever any payment to be made
hereunder shall be stated to be due on a day that is not a Business Day,
such payment shall be made on the next succeeding Business Day and such
extension of time shall be included in the computation of the payment of
interest hereunder or of the commitment fees hereunder, as the case may
be.
(v) Notation of Payment. Each Lender agrees that before disposing of
any Note held by it, or any part thereof (other than by granting
participations therein), that Lender will make a notation thereon of all
Revolving Loans evidenced by that Revolving Note and all principal
payments previously made thereon and of the date to which interest thereon
has been paid; provided that the failure to make (or any error in the
making of) a notation of any Revolving Loan made under such Revolving Note
shall not limit or otherwise affect the obligations of Company hereunder
or under such Revolving Note with respect to any Revolving Loan or any
payments of principal or interest on such Revolving Note.
2.5 Use of Proceeds.
A. Revolving Loans. The proceeds of the Revolving Loans shall be applied
by Company (i) in an amount up to $1,000,000 to finance the transactions
contemplated by the Recapitalization Agreement and (ii) for working capital and
general corporate purposes, which may include future Permitted Business
Acquisitions (provided that no more than $25,000,000 may be borrowed for
Permitted Business Acquisitions) and the making of intercompany loans to any of
Company's wholly-owned Subsidiaries, in accordance with subsection 7.1(iv), for
their own working capital and general corporate purposes.
B. Margin Regulations. No portion of the proceeds of any borrowing under
this Agreement shall be used by Company or any of its Subsidiaries in any manner
that might cause the borrowing or the application of such proceeds to violate
Regulation G, Regulation U, Regulation T or Regulation X of the Board of
Governors of the Federal Reserve System or any other regulation of such Board or
to violate the Exchange Act, in each case as in effect on the date or dates of
such borrowing and such use of proceeds.
2.6 Special Provisions Governing Eurodollar Rate Loans.
Notwithstanding any other provision of this Agreement to the contrary, the
following provisions shall govern with respect to Eurodollar Rate Loans as to
the matters covered:
A. Determination of Applicable Interest Rate. As soon as practicable after
10:00 A.M. (New York City time) on each Interest Rate Determination Date,
Administrative Agent shall determine (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties) the interest rate that
shall apply to the Eurodollar Rate Loans for which an interest rate is then
being determined for the applicable Interest Period and
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shall promptly give notice thereof (in writing or by telephone confirmed in
writing) to Company and each Lender.
B. Inability to Determine Applicable Interest Rate. In the event that
Administrative Agent shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate Loans, that by reason of
circumstances affecting the Eurodollar market adequate and fair means do not
exist for ascertaining the interest rate applicable to such Eurodollar Rate
Loans on the basis provided for in the definition of Adjusted Eurodollar Rate,
Administrative Agent shall on such date give notice (by telefacsimile or by
telephone confirmed in writing) to Company and each Lender of such
determination, whereupon (i) no Revolving Loans may be made as, or converted to,
Eurodollar Rate Loans until such time as Administrative Agent notifies Company
and Lenders that the circumstances giving rise to such notice no longer exist
and (ii) any Notice of Borrowing or Notice of Conversion/Continuation given by
Company with respect to the Revolving Loans in respect of which such
determination was made shall be deemed to be rescinded by Company.
C. Illegality or Impracticability of Eurodollar Rate Loans. In the event
that on any date any Lender shall have determined (which determination shall be
final and conclusive and binding upon all parties hereto but shall be made only
after consultation with Company and Administrative Agent) that the making,
maintaining or continuation of its Eurodollar Rate Loans (i) has become unlawful
as a result of compliance by such Lender in good faith with any law, treaty,
governmental rule, regulation, guideline or order (or would conflict with any
such treaty, governmental rule, regulation, guideline or order not having the
force of law even though the failure to comply therewith would not be unlawful)
or (ii) has become impracticable, or would cause such Lender material hardship,
as a result of contingencies occurring after the date of this Agreement which
materially and adversely affect the Eurodollar market or the position of such
Lender in that market, then, and in any such event, such Lender shall be an
"Affected Lender" and it shall on that day give notice (by telefacsimile or by
telephone confirmed in writing) to Company and Administrative Agent of such
determination (which notice Administrative Agent shall promptly transmit to each
other Lender). Thereafter (a) the obligation of the Affected Lender to make
Revolving Loans as, or to convert Revolving Loans to, Eurodollar Rate Loans
shall be suspended until such notice shall be withdrawn by the Affected Lender,
(b) to the extent such determination by the Affected Lender relates to a
Eurodollar Rate Loan then being requested by Company pursuant to a Notice of
Borrowing or a Notice of Conversion/Continuation, the Affected Lender shall make
such Revolving Loan as (or convert such Revolving Loan to, as the case may be) a
Base Rate Loan, (c) the Affected Lender's obligation to maintain its outstanding
Eurodollar Rate Loans (the "Affected Loans") shall be terminated at the earlier
to occur of the expiration of the Interest Period then in effect with respect to
the Affected Loans or when required by law, and (d) the Affected Loans shall
automatically convert into Base Rate Loans on the date of such termination.
Notwithstanding the foregoing, to the extent a determination by an Affected
Lender as described above relates to a Eurodollar Rate Loan then being requested
by Company
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pursuant to a Notice of Borrowing or a Notice of Conversion/Continuation,
Company shall have the option, subject to the provisions of subsection 2.6D, to
rescind such Notice of Borrowing or Notice of Conversion/Continuation as to all
Lenders by giving notice (by telefacsimile or by telephone confirmed in writing)
to Administrative Agent of such rescission on the date on which the Affected
Lender gives notice of its determination as described above (which notice of
rescission Administrative Agent shall promptly transmit to each other Lender).
Except as provided in the immediately preceding sentence, nothing in this
subsection 2.6C shall affect the obligation of any Lender other than an Affected
Lender to make or maintain Revolving Loans as, or to convert Revolving Loans to,
Eurodollar Rate Loans in accordance with the terms of this Agreement.
D. Compensation For Breakage or Non-Commencement of Interest Periods.
Company shall compensate each Lender, upon written request by that Lender (which
request shall set forth the basis for requesting such amounts), for all
reasonable losses, expenses and liabilities (including any interest paid by that
Lender to lenders of funds borrowed by it to make or carry its Eurodollar Rate
Loans and any loss, expense or liability sustained by that Lender in connection
with the liquidation or re-employment of such funds) which that Lender may
sustain: (i) if for any reason (other than a default by that Lender) a borrowing
of any Eurodollar Rate Loan does not occur on a date specified therefor in a
Notice of Borrowing or a telephonic request for borrowing, or a conversion to or
continuation of any Eurodollar Rate Loan does not occur on a date specified
therefor in a Notice of Conversion/Continuation or a telephonic request for
conversion or continuation, (ii) if any prepayment (including any prepayment
pursuant to subsection 2.4A(i)) or other principal payment or any conversion of
any of its Eurodollar Rate Loans occurs on a date prior to the last day of an
Interest Period applicable to that Eurodollar Rate Loan, (iii) if any prepayment
of any of its Eurodollar Rate Loans is not made on any date specified in a
notice of prepayment given by Company, or (iv) as a consequence of any other
default by Company in the repayment of its Eurodollar Rate Loans when required
by the terms of this Agreement.
E. Booking of Eurodollar Rate Loans. Any Lender may make, carry or
transfer Eurodollar Rate Loans at, to, or for the account of any of its branch
offices or the office of an Affiliate of that Lender.
F. Assumptions Concerning Funding of Eurodollar Rate Loans. Calculation of
all amounts payable to a Lender under this subsection 2.6 and under subsection
2.7A shall be made as though that Lender had actually funded each of its
relevant Eurodollar Rate Loans through the purchase of a Eurodollar deposit
bearing interest at the rate obtained pursuant to clause (i) of the definition
of Adjusted Eurodollar Rate in an amount equal to the amount of such Eurodollar
Rate Loan and having a maturity comparable to the relevant Interest Period and
through the transfer of such Eurodollar deposit from an offshore office of that
Lender to a domestic office of that Lender in the United States of America;
provided, however, that each Lender may fund each of its Eurodollar Rate Loans
in any
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manner it sees fit and the foregoing assumptions shall be utilized only for the
purposes of calculating amounts payable under this subsection 2.6 and under
subsection 2.7A.
G. Eurodollar Rate Loans After Default. After the occurrence of and during
the continuation of a Potential Event of Default or an Event of Default, (i)
Company may not elect to have a Revolving Loan be made or maintained as, or
converted to, a Eurodollar Rate Loan after the expiration of any Interest Period
then in effect for that Revolving Loan and (ii) subject to the provisions of
subsection 2.6D, any Notice of Borrowing or Notice of Conversion/Continuation
given by Company with respect to a requested borrowing or
conversion/continuation that has not yet occurred shall be deemed to be
rescinded by Company.
2.7 Increased Costs; Taxes; Capital Adequacy.
A. Compensation for Increased Costs and Taxes. Subject to the provisions
of subsection 2.7B (which shall be controlling with respect to the matters
covered thereby and to the extent a Lender is not entitled to payment under the
terms of Section 2.7B, it shall not be entitled to such payment pursuant to this
subsection 2.7A), in the event that any Lender shall determine (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that any law, treaty or governmental rule, regulation
or order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a court or
governmental authority, in each case that becomes effective after the date
hereof, or compliance by such Lender with any guideline, request or directive
issued or made after the date hereof by any central bank or other governmental
or quasi-governmental authority (whether or not having the force of law):
(i) subjects such Lender (or its applicable lending office) to any
additional Tax (other than any Tax on the overall net income of such
Lender) with respect to this Agreement or any of its obligations hereunder
or any payments to such Lender (or its applicable lending office) of
principal, interest, fees or any other amount payable hereunder;
(ii) imposes, modifies or holds applicable any reserve (including
any marginal, emergency, supplemental, special or other reserve), special
deposit, compulsory loan, FDIC insurance or similar requirement against
assets held by, or deposits or other liabilities in or for the account of,
or advances or loans by, or other credit extended by, or any other
acquisition of funds by, any office of such Lender (other than any such
reserve or other requirements with respect to Eurodollar Rate Loans that
are reflected in the definition of Adjusted Eurodollar Rate); or
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(iii) imposes any other condition (other than with respect to a Tax
matter) on or affecting such Lender (or its applicable lending office) or
its obligations hereunder or the Eurodollar market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Revolving Loans hereunder or to reduce
any amount received or receivable by such Lender (or its applicable lending
office) with respect thereto by an amount considered by the Lender to be
material; then, in any such case, Company shall promptly pay to such Lender,
upon receipt of the statement referred to in the next sentence, such additional
amount or amounts (in the form of an increased rate of, or a different method of
calculating, interest or otherwise as such Lender in its sole discretion shall
determine) as may be necessary to compensate such Lender for any such increased
cost or reduction in amounts received or receivable hereunder. Such Lender shall
deliver to Company (with a copy to Administrative Agent) a written statement,
setting forth in reasonable detail the basis for calculating the additional
amounts owed to such Lender under this subsection 2.7A, which statement shall be
conclusive and binding upon all parties hereto absent manifest error.
B. Withholding of Taxes.
(i) Payments to Be Free and Clear. All sums payable by Company under
this Agreement and the other Revolving Loan Documents shall (except to the
extent required by law) be paid free and clear of, and without any
deduction or withholding on account of, any Tax (other than a Tax on the
overall net income of any Lender) imposed, levied, collected, withheld or
assessed by or within the United States of America or any political
subdivision in or of the United States of America or any other
jurisdiction from or to which a payment is made by or on behalf of Company
or by any federation or organization of which the United States of America
or any such jurisdiction is a member at the time of payment.
(ii) Grossing-up of Payments. If Company or any other Person is
required by law to make any deduction or withholding on account of any
such Tax from any sum paid or payable by Company to Administrative Agent
or any Lender under any of the Revolving Loan Documents:
(a) Company shall notify Administrative Agent of any such
requirement or any change in any such requirement as soon as Company
becomes aware of it;
(b) Company shall pay any such Tax before the date on which
penalties attach thereto, such payment to be made (if the liability
to pay is imposed on Company) for its own account or (if that
liability is imposed on Administrative Agent or such Lender, as the
case may be) on behalf of and in the name of Administrative Agent or
such Lender;
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(c) the sum payable by Company in respect of which the
relevant deduction, withholding or payment is required shall be
increased to the extent necessary to ensure that, after the making
of that deduction, withholding or payment, Administrative Agent or
such Lender, as the case may be, receives on the due date a net sum
equal to what it would have received had no such deduction,
withholding or payment been required or made; and
(d) within 30 days after paying any sum from which it is
required by law to make any deduction or withholding, and within 30
days after the due date of payment of any Tax which it is required
by clause (b) above to pay, Company shall deliver to Administrative
Agent evidence satisfactory to the other affected parties of such
deduction, withholding or payment and of the remittance thereof to
the relevant taxing or other authority;
provided that no such additional amount shall be required to be paid to
any Lender under clause (c) above except to the extent that any change
after the date hereof (in the case of each Lender listed on the signature
pages hereof) or after the date of the Assignment Agreement pursuant to
which such Lender became a Lender (in the case of each other Lender) in
any such requirement for a deduction, withholding or payment as is
mentioned therein shall result in an increase in the rate of such
deduction, withholding or payment from that in effect at the date of this
Agreement or at the date of such Assignment Agreement, as the case may be,
in respect of payments to such Lender.
(iii) Evidence of Exemption from U.S. Withholding Tax.
(a) Each Lender that is organized under the laws of any
jurisdiction other than the United States or any state or other
political subdivision thereof (for purposes of this subsection
2.7B(iii), a "Non-US Lender") shall deliver to Administrative Agent
for transmission to Company, on or prior to the Closing Date (in the
case of each Lender listed on the signature pages hereof) or on or
prior to the date of the Assignment Agreement pursuant to which it
becomes a Lender (in the case of each other Lender), and at such
other times as may be necessary in the determination of Company or
Administrative Agent (each in the reasonable exercise of its
discretion), (1) two original copies of Internal Revenue Service
Form 1001 or 4224 (or any successor forms), properly completed and
duly executed by such Lender, together with any other certificate or
statement of exemption required under the Internal Revenue Code or
the regulations issued thereunder to establish that such Lender is
not subject to deduction or withholding of United States federal
income tax with respect to any payments to such Lender of principal,
interest, fees or other amounts payable under any of the Revolving
Loan Documents or (2) if such Lender is not a "bank" or other Person
described in Section 881(c)(3) of the Internal Revenue Code and
cannot deliver either
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Internal Revenue Service Form 1001 or 4224 pursuant to clause (1)
above, a Certificate re Non-Bank Status together with two original
copies of Internal Revenue Service Form W-8 (or any successor form),
properly completed and duly executed by such Lender, together with
any other certificate or statement of exemption required under the
Internal Revenue Code or the regulations issued thereunder to
establish that such Lender is not subject to deduction or
withholding of United States federal income tax with respect to any
payments to such Lender of interest payable under any of the
Revolving Loan Documents.
(b) Each Lender required to deliver any forms, certificates or
other evidence with respect to United States federal income tax
withholding matters pursuant to subsection 2.7B(iii)(a) hereby
agrees, from time to time after the initial delivery by such Lender
of such forms, certificates or other evidence, whenever a lapse in
time or change in circumstances renders such forms, certificates or
other evidence obsolete or inaccurate in any material respect, that
such Lender shall promptly (1) deliver to Administrative Agent for
new original copies of Internal Revenue Service Form 1001 or 4224,
or a Certificate re Non-Bank Status and two original copies of
Internal Revenue Service Form W-8, as the case may be, properly
completed and duly executed by such Lender, together with any other
certificate or statement of exemption required in order to confirm
or establish that such Lender is not subject to deduction or
withholding of United States federal income tax with respect to
payments to such Lender under the Revolving Loan Documents or (2)
notify Administrative Agent and Company of its inability to deliver
any such forms, certificates or other evidence.
(c) Company shall not be required to pay any additional amount
to any Non-US Lender under clause (c) of subsection 2.7B(ii) if such
Lender shall have failed to satisfy the requirements of clause (a)
or (b)(1) of this subsection 2.7B(iii); provided that if such Lender
shall have satisfied the requirements of subsection 2.7B(iii)(a) on
the Closing Date (in the case of each Lender listed on the signature
pages hereof) or on the date of the Assignment Agreement pursuant to
which it became a Lender (in the case of each other Lender), nothing
in this subsection 2.7B(iii)(c) shall relieve Company of its
obligation to pay any additional amounts pursuant to clause (c) of
subsection 2.7B(ii) in the event that, as a result of any change in
any applicable law, treaty or governmental rule, regulation or
order, or any change in the interpretation, administration or
application thereof, such Lender is no longer properly entitled to
deliver forms, certificates or other evidence at a subsequent date
establishing the fact that such Lender is not subject to withholding
as described in subsection 2.7B(iii)(a).
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C. Capital Adequacy Adjustment. If any Lender shall have determined that
the adoption, effectiveness, phase-in or applicability after the date hereof of
any law, rule or regulation (or any provision thereof) regarding capital
adequacy, or any change therein or in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Lender
(or its applicable lending office) with any guideline, request or directive
regarding capital adequacy (whether or not having the force of law) of any such
governmental authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of, or with reference to,
such Lender's Revolving Loans or Revolving Loan Commitments or Letters of Credit
or participations therein or other obligations hereunder with respect to the
Revolving Loans or the Letters of Credit to a level below that which such Lender
or such controlling corporation could have achieved but for such adoption,
effectiveness, phase-in, applicability, change or compliance (taking into
consideration the policies of such Lender or such controlling corporation with
regard to capital adequacy) by an amount considered by the Lender to be
material, then from time to time, within five Business Days after receipt by
Company from such Lender of the statement referred to in the next sentence,
Company shall pay to such Lender such additional amount or amounts as will
compensate such Lender or such controlling corporation on an after-tax basis for
such reduction. Such Lender shall deliver to Company (with a copy to Administra-
tive Agent) a written statement, setting forth in reasonable detail the basis of
the calculation of such additional amounts, which statement shall be conclusive
and binding upon all parties hereto absent manifest error.
2.8 Obligation of Lenders and Issuing Lenders to Mitigate.
Each Lender and Issuing Lender agrees that, as promptly as practicable
after the officer of such Lender or Issuing Lender responsible for administering
the Revolving Loans or Letters of Credit of such Lender or Issuing Lender, as
the case may be, becomes aware of the occurrence of an event or the existence of
a condition that would cause such Lender to become an Affected Lender or that
would entitle such Lender or Issuing Lender to receive payments under subsection
2.7 or subsection 3.6, it will, to the extent not inconsistent with the internal
policies of such Lender or Issuing Lender and any applicable legal or regulatory
restrictions, use reasonable efforts (i) to make, issue, fund or maintain the
Revolving Loan Commitments of such Lender or the affected Revolving Loans or
Letters of Credit of such Lender or Issuing Lender through another lending or
letter of credit office of such Lender or Issuing Lender, or (ii) take such
other measures as such Lender or Issuing Lender may deem reasonable, if as a
result thereof the circumstances which would cause such Lender to be an Affected
Lender would cease to exist or the additional amounts which would otherwise be
required to be paid to such Lender or Issuing Lender pursuant to subsection 2.7
or subsection 3.6 would be materially reduced and if, as determined by such
Lender or Issuing Lender in its sole discretion, the making, issuing, funding or
maintaining of such Revolving Loan Commitments or Revolving Loans or Letters of
Credit through such other lending or letter of credit office or in accordance
with such other measures, as the
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case may be, would not otherwise materially adversely affect such Revolving Loan
Commitments or Revolving Loans or Letters of Credit or the interests of such
Lender or Issuing Lender; provided that such Lender or Issuing Lender will not
be obligated to utilize such other lending or letter of credit office pursuant
to this subsection 2.8 unless Company agrees to pay all incremental expenses
incurred by such Lender or Issuing Lender as a result of utilizing such other
lending or letter of credit office as described in clause (i) above. A
certificate as to the amount of any such expenses payable by Company pursuant to
this subsection 2.8 (setting forth in reasonable detail the basis for requesting
such amount) submitted by such Lender or Issuing Lender to Company (with a copy
to Administrative Agent) shall be conclusive absent manifest error.
2.9 Defaulting Lenders.
Anything contained herein to the contrary notwithstanding, in the event
that any Lender (a "Defaulting Lender") defaults (a "Funding Default") in its
obligation to fund any Revolving Loan (a "Defaulted Revolving Loan") in
accordance with subsection 2.1 as a result of the appointment of a receiver or
conservator with respect to such Lender at the direction or request of any
regulatory agency or authority, then (i) during any Default Period (as defined
below) with respect to such Defaulting Lender, such Defaulting Lender shall be
deemed not to be a "Lender" for purposes of voting on any matters (including the
granting of any consents or waivers) with respect to any of the Revolving Loan
Documents, (ii) to the extent permitted by applicable law, until such time as
the Default Excess (as defined below) with respect to such Defaulting Lender
shall have been reduced to zero, (a) any voluntary prepayment of the Revolving
Loans pursuant to subsection 2.4B(i) shall, if Company so directs at the time of
making such voluntary prepayment, be applied to the Revolving Loans of other
Lenders as if such Defaulting Lender had no Revolving Loans outstanding and the
Revolving Loan Exposure of such Defaulting Lender were zero, and (b) any
mandatory prepayment of the Revolving Loans pursuant to subsection 2.4B(iii)
shall, if Company so directs at the time of making such mandatory prepayment, be
applied to the Revolving Loans of other Lenders (but not to the Revolving Loans
of such Defaulting Lender) as if such Defaulting Lender had funded all Defaulted
Revolving Loans of such Defaulting Lender, it being understood and agreed that
Company shall be entitled to retain any portion of any mandatory prepayment of
the Revolving Loans that is not paid to such Defaulting Lender solely as a
result of the operation of the provisions of this clause (b), (iii) such
Defaulting Lender's Revolving Loan Commitment and outstanding Revolving Loans
and such Defaulting Lender's Pro Rata Share of the Letter of Credit Usage shall
be excluded for purposes of calculating the commitment fee payable to Lenders
pursuant to subsection 2.3A in respect of any day during any Default Period with
respect to such Defaulting Lender, and such Defaulting Lender shall not be
entitled to receive any commitment fee pursuant to subsection 2.3A with respect
to such Defaulting Lender's Revolving Loan Commitment in respect of any Default
Period with respect to such Defaulting Lender, and (iv) the Total Utilization of
Revolving Loan Commitments as at any date of determination shall be calculated
as if such Defaulting Lender had funded all Defaulted Revolving Loans of such
Defaulting Lender.
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For purposes of this Agreement, (I) "Default Period" means, with respect
to any Defaulting Lender, the period commencing on the date of the applicable
Funding Default and ending on the earliest of the following dates: (A) the date
on which all Revolving Loan Commitments are cancelled or terminated and/or the
Obligations are declared or become immediately due and payable, (B) the date on
which (1) the Default Excess with respect to such Defaulting Lender shall have
been reduced to zero (whether by the funding by such Defaulting Lender of any
Defaulted Revolving Loans of such Defaulting Lender or by the non-pro rata
application of any voluntary or mandatory prepayments of the Revolving Loans in
accordance with the terms of this subsection 2.9 or by a combination thereof)
and (2) such Defaulting Lender shall have delivered to Company and
Administrative Agent a written reaffirmation of its intention to honor its
obligations under this Agreement with respect to its Revolving Loan Commitment,
and (C) the date on which Company, Administrative Agent and Requisite Lenders
waive all Funding Defaults of such Defaulting Lender in writing, and (II)
"Default Excess" means, with respect to any Defaulting Lender, the excess, if
any, of such Defaulting Lender's Pro Rata Share of the aggregate outstanding
principal amount of Revolving Loans of all Lenders (calculated as if all
Defaulting Lenders (other than such Defaulting Lender) had funded all of their
respective Defaulted Revolving Loans) over the aggregate outstanding principal
amount of Revolving Loans of such Defaulting Lender.
No Revolving Loan Commitment of any Lender shall be increased or
otherwise affected, and, except as otherwise expressly provided in this
subsection 2.9, performance by Company of its obligations under this Agreement
and the other Revolving Loan Documents shall not be excused or otherwise
modified, as a result of any Funding Default or the operation of this subsection
2.9. The rights and remedies against a Defaulting Lender under this subsection
2.9 are in addition to other rights and remedies which Company may have against
such Defaulting Lender with respect to any Funding Default and which
Administrative Agent or any Lender may have against such Defaulting Lender with
respect to any Funding Default.
2.10 Removal or Replacement of a Lender.
A. Anything contained in this Agreement to the contrary notwithstanding,
in the event that:
(i) (a) any Lender (an "Increased-Cost Lender") shall give notice to
Company that such Lender is an Affected Lender or that such Lender is
entitled to receive payments under subsection 2.7 or subsection 3.6, (b)
the circumstances which have caused such Lender to be an Affected Lender
or which entitle such Lender to receive such payments shall remain in
effect, and (c) such Lender shall fail to withdraw such notice within five
Business Days after Company's request for such withdrawal; or
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(ii) (a) any Lender shall become a Defaulting Lender, (b) the
Default Period for such Defaulting Lender shall remain in effect, and (c)
such Defaulting Lender shall fail to cure the default as a result of which
it has become a Defaulting Lender within five Business Days after
Company's request that it cure such default; or
(iii) (a) in connection with any proposed amendment, modification,
termination, waiver or consent with respect to any of the provisions of
this Agreement as contemplated by clauses (i) through (v) of the first
proviso to subsection 10.6A, the consent of Requisite Lenders shall have
been obtained but the consent of one or more of such other Lenders (each a
"Non-Consenting Lender") whose consent is required shall not have been
obtained, and (b) the failure to obtain Non-Consenting Lenders' consents
does not result solely from the exercise of Non-Consenting Lenders' rights
(and the withholding of any required consents by Non-Consenting Lenders)
pursuant to the second proviso to subsection 10.6A;
then, and in each such case, Company shall have the right, at its option, to
remove or replace the applicable Increased-Cost Lender, Defaulting Lender or
Non-Consenting Lender (the "Terminated Lender") to the extent permitted by
subsection 2.10B.
B. Company may, by giving written notice to Administrative Agent and any
Terminated Lender of its election to do so:
(i) elect to (a) terminate the Revolving Loan Commitment, if any, of
such Terminated Lender upon receipt by such Terminated Lender of such
notice and (b) prepay on the date of such termination any outstanding
Revolving Loans made by such Terminated Lender, together with accrued and
unpaid interest thereon and any other amounts payable to such Terminated
Lender hereunder pursuant to subsection 2.6, subsection 2.7 or subsection
3.6 or otherwise; provided that, in the event such Terminated Lender has
any Revolving Loans outstanding at the time of such termination, the
written consent of Administrative Agent and Requisite Lenders (which
consent shall not be unreasonably withheld or delayed) shall be required
in order for Company to make the election set forth in this clause (i); or
(ii) elect to cause such Terminated Lender (and such Terminated
Lender hereby irrevocably agrees) to assign its outstanding Revolving
Loans and its Revolving Loan Commitment, if any, in full at par to one or
more Eligible Assignees (each a "Replacement Lender") in accordance with
the provisions of subsection 10.1B; provided that (a) on the date of such
assignment, Company shall pay any amounts payable to such Terminated
Lender pursuant to subsection 2.6, subsection 2.7 or subsection 3.6 or
otherwise as if it were a prepayment and (b) in the event such Terminated
Lender is a Non-Consenting Lender, each Replacement Lender shall consent,
at the time of such assignment, to each matter in respect of which such
Terminated Lender was a Non-Consenting Lender;
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provided that (X) Company may not make either of the elections set forth in
clauses (i) or (ii) above with respect to any Non-Consenting Lender unless
Company also makes one of such elections with respect to each other Terminated
Lender which is a Non-Consenting Lender and (Y) Company may not make either of
such elections with respect to any Terminated Lender that is an Issuing Lender
unless, prior to the effectiveness of such election, Company shall have caused
each outstanding Letter of Credit issued by such Issuing Lender to be cancelled.
C. Upon the prepayment of all amounts owing to any Terminated Lender and
the termination of such Terminated Lender's Revolving Loan Commitment, if any,
pursuant to clause (i) of subsection 2.10B, (i) Schedule 2.1 shall be deemed
modified to reflect any corresponding changes in the Revolving Loan Commitments
and (ii) such Terminated Lender shall no longer constitute a "Lender" for
purposes of this Agreement; provided that any rights of such Terminated Lender
to indemnification under this Agreement (including under subsections 2.6D, 2.7,
3.6, 10.2 and 10.3) shall survive as to such Terminated Lender.
SECTION 3.
LETTERS OF CREDIT
3.1 Issuance of Letters of Credit and Lenders' Purchase of Participations
Therein.
A. Letters of Credit. In addition to Company requesting that Lenders make
Revolving Loans pursuant to subsection 2.1A, Company may request, in accordance
with the provisions of this subsection 3.1, from time to time during the period
from the Closing Date to but excluding the Revolving Loan Commitment Termination
Date, that one or more Lenders issue Letters of Credit for the account of
Company for the purposes specified in the definitions of Commercial Letters of
Credit and Standby Letters of Credit. Subject to the terms and conditions of
this Agreement and in reliance upon the representations and warranties of
Company herein set forth, any one or more Lenders may, but (except as provided
in subsection 3.1B(ii)) shall not be obligated to, issue such Letters of Credit
in accordance with the provisions of this subsection 3.1; provided that Company
shall not request that any Lender issue (and no Lender shall issue):
(i) any Letter of Credit if, after giving effect to such issuance,
the Total Utilization of Revolving Loan Commitments would exceed the
Revolving Loan Commitments then in effect or the Borrowing Base then in
effect;
(ii) any Letter of Credit if, after giving effect to such issuance,
the Letter of Credit Usage would exceed $15,000,000;
(iii) any Standby Letter of Credit having an expiration date later
than the earlier of (a) the date which is 30 days prior to the Revolving
Loan Commitment Termination Date and (b) the date which is not more than
365 days from the date
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of issuance of such Standby Letter of Credit; provided that the
immediately preceding clause (b) shall not prevent any Issuing Lender from
agreeing that a Standby Letter of Credit will automatically be extended
for one or more successive periods not to exceed one year each unless such
Issuing Lender elects not to extend for any such additional period; and
provided, further that such Issuing Lender shall elect not to extend such
Standby Letter of Credit if it has knowledge that an Event of Default has
occurred and is continuing (and has not been waived in accordance with
subsection 10.6) at the time such Issuing Lender must elect whether or not
to allow such extension; or
(iv) any Commercial Letter of Credit having an expiration date (a)
later than the earlier of (X) the date which is 30 days prior to the
Revolving Loan Commitment Termination Date and (Y) the date which is 180
days from the date of issuance of such Commercial Letter of Credit or (b)
that is otherwise unacceptable to the applicable Issuing Lender in its
reasonable discretion.
B. Mechanics of Issuance.
(i) Notice of Issuance. Whenever Company desires the issuance of a
Letter of Credit, it shall deliver to Administrative Agent a Notice of
Issuance of Letter of Credit substantially in the form of Exhibit III
annexed hereto no later than 12:00 Noon (New York City time) at least
three Business Days (in the case of Standby Letters of Credit) or five
Business Days (in the case of Commercial Letters of Credit), or in each
case such shorter period as may be agreed to by the Issuing Lender in any
particular instance, in advance of the proposed date of issuance. The
Notice of Issuance of Letter of Credit shall specify (a) the proposed date
of issuance (which shall be a Business Day), (b) whether the Letter of
Credit is to be a Standby Letter of Credit or a Commercial Letter of
Credit, (c) the face amount of the Letter of Credit, (d) in the case of a
Letter of Credit which Company requests to be denominated in a currency
other than Dollars, the currency in which Company requests such Letter of
Credit to be issued, (e) the expiration date of the Letter of Credit, (f)
the name and address of the beneficiary, (g) either the verbatim text of
the proposed Letter of Credit or the proposed terms and conditions
thereof, including a precise description of any documents to be presented
by the beneficiary which, if presented by the beneficiary prior to the
expiration date of the Letter of Credit, would require the Issuing Lender
to make payment under the Letter of Credit, and (h) that, after giving
effect to the issuance of the Letter of Credit, the Total Utilization of
Revolving Loan Commitments will not exceed the Revolving Loan Commitments
then in effect or the Borrowing Base then in effect; provided that the
Issuing Lender, in its reasonable discretion, may require changes in the
text of the proposed Letter of Credit or any such documents; and provided,
further that no Letter of Credit shall require payment against a
conforming draft to be made thereunder on the same business day (under the
laws of the jurisdiction in which the office of the Issuing Lender to
which such draft is required to be presented is
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located) that such draft is presented if such presentation is made after
10:00 A.M. (in the time zone of such office of the Issuing Lender) on such
business day.
Company shall notify the applicable Issuing Lender (and
Administrative Agent, if Administrative Agent is not such Issuing Lender)
prior to the issuance of any Letter of Credit in the event that any of the
matters to which Company is required to certify in the applicable Notice
of Issuance of Letter of Credit is no longer true and correct as of the
proposed date of issuance of such Letter of Credit, and upon the issuance
of any Letter of Credit Company shall be deemed to have re-certified, as
of the date of such issuance, as to the matters to which Company is
required to certify in the applicable Notice of Issuance of Letter of
Credit.
(ii) Determination of Issuing Lender. Upon receipt by Administrative
Agent of a Notice of Issuance of Letter of Credit pursuant to subsection
3.1B(i) requesting the issuance of a Letter of Credit, in the event
Administrative Agent elects to issue such Letter of Credit, Administrative
Agent shall promptly so notify Company, and Administrative Agent shall be
the Issuing Lender with respect thereto. In the event that Administrative
Agent, in its sole discretion, elects not to issue such Letter of Credit,
Administrative Agent shall promptly so notify Company, whereupon Company
may request any other Lender to issue such Letter of Credit by delivering
to such Lender a copy of the applicable Notice of Issuance of Letter of
Credit. Any Lender so requested to issue such Letter of Credit shall
promptly notify Company and Administrative Agent whether or not, in its
sole discretion, it has elected to issue such Letter of Credit, and any
such Lender which so elects to issue such Letter of Credit shall be the
Issuing Lender with respect thereto. In the event that all other Lenders
shall have declined to issue such Letter of Credit, notwithstanding the
prior election of Administrative Agent not to issue such Letter of Credit,
Administrative Agent shall be obligated to issue such Letter of Credit and
shall be the Issuing Lender with respect thereto, notwithstanding the fact
that the Letter of Credit Usage with respect to such Letter of Credit and
with respect to all other Letters of Credit issued by Administrative
Agent, when aggregated with Administrative Agent's outstanding Revolving
Loans, may exceed Administrative Agent's Revolving Loan Commitment then in
effect; provided that Administrative Agent shall not be obligated to issue
any Letter of Credit denominated in a foreign currency which in the
judgment of Administrative Agent is not readily and freely available.
(iii) Issuance of Letter of Credit. Upon satisfaction or waiver (in
accordance with subsection 10.6) of the conditions set forth in subsection
4.3, the Issuing Lender shall issue the requested Letter of Credit in
accordance with the Issuing Lender's standard operating procedures.
(iv) Notification to Lenders. Upon the issuance of any Letter of
Credit the applicable Issuing Lender shall promptly notify Administrative
Agent and each other Lender of such issuance, which notice shall be
accompanied by a copy of such Letter
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of Credit. Promptly after receipt of such notice (or, if Administrative
Agent is the Issuing Lender, together with such notice), Administrative
Agent shall notify each Lender of the amount of such Lender's respective
participation in such Letter of Credit, determined in accordance with
subsection 3.1C.
(v) Reports to Lenders. Within 15 days after the end of each month
ending after the Closing Date, so long as any Letter of Credit shall have
been outstanding during such month, each Issuing Lender shall deliver to
each other Lender a report setting forth for such month the daily
aggregate amount available to be drawn under the Letters of Credit issued
by such Issuing Lender that were outstanding during such month.
C. Lenders' Purchase of Participations in Letters of Credit. Immediately
upon the issuance of each Letter of Credit, each Lender shall be deemed to, and
hereby agrees to, have irrevocably purchased from the Issuing Lender a
participation in such Letter of Credit and any drawings honored thereunder in an
amount equal to such Lender's Pro Rata Share of the maximum amount which is or
at any time may become available to be drawn thereunder.
3.2 Letter of Credit Fees.
Company agrees to pay the following amounts with respect to Letters of
Credit issued hereunder:
(i) with respect to each Standby Letter of Credit, (a) a fronting
fee, payable directly to the applicable Issuing Lender for its own
account, equal to 0.25% per annum of the daily amount available to be
drawn under such Standby Letter of Credit and (b) a letter of credit fee,
payable to Administrative Agent for the account of Lenders, equal to the
Applicable Revolving Eurodollar Rate Margin in effect with respect to
Eurodollar Rate Loans from time to time multiplied by the daily amount
available to be drawn under such Standby Letter of Credit, each such
fronting fee or letter of credit fee to be payable in arrears on and to
(but excluding) each March 15, June 15, September 15 and December 15 of
each year and computed on the basis of a 360-day year for the actual
number of days elapsed;
(ii) with respect to each Commercial Letter of Credit, (a) a
fronting fee, payable directly to the applicable Issuing Lender for its
own account, equal to 0.25% per annum of the daily amount available to be
drawn under such Commercial Letter of Credit and (b) a letter of credit
fee, payable to Administrative Agent for the account of Lenders, equal to
the Applicable Revolving Eurodollar Rate Margin in effect with respect to
Eurodollar Rate Loans from time to time multiplied by the daily amount
available to be drawn under such Commercial Letter of Credit, each such
fronting fee or letter of credit fee to be payable in arrears on and to
(but
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excluding) each March 15, June 15, September 15 and December 15 of
each year and computed on the basis of a 360-day year for the actual
number of days elapsed; and
(iii) with respect to the issuance, amendment or transfer of each
Letter of Credit and each payment of a drawing made thereunder (without
duplication of the fees payable under clauses (i) and (ii) above),
documentary and processing charges payable directly to the applicable
Issuing Lender for its own account in accordance with such Issuing
Lender's standard schedule for such charges in effect at the time of such
issuance, amendment, transfer or payment, as the case may be.
For purposes of calculating any fees payable under clauses (i) and (ii) of this
subsection 3.2, the daily amount available to be drawn under any Letter of
Credit shall be determined as of the close of business on any date of
determination. Promptly upon receipt by Administrative Agent of any amount
described in clause (i)(b) or (ii)(b) of this subsection 3.2, Administrative
Agent shall distribute to each Lender its Pro Rata Share of such amount.
3.3 Drawings and Reimbursement of Amounts Paid Under Letters of Credit.
A. Responsibility of Issuing Lender With Respect to Drawings. In
determining whether to honor any drawing under any Letter of Credit by the
beneficiary thereof, the Issuing Lender shall be responsible only to examine the
documents delivered under such Letter of Credit with reasonable care so as to
ascertain whether they appear on their face to be in accordance with the terms
and conditions of such Letter of Credit.
B. Reimbursement by Company of Amounts Paid Under Letters of Credit. In
the event an Issuing Lender has determined to honor a drawing under a Letter of
Credit issued by it, such Issuing Lender shall immediately notify Company and
Administrative Agent, and Company shall reimburse such Issuing Lender on or
before the Business Day immediately following the date on which such drawing is
honored (the "Reimbursement Date") in an amount in Dollars (which amount, in the
case of a drawing under a Letter of Credit which is denominated in a currency
other than Dollars, shall be calculated by reference to the applicable Exchange
Rate) and in same day funds equal to the amount of such honored drawing;
provided that, anything contained in this Agreement to the contrary
notwithstanding, (i) unless Company shall have notified Administrative Agent and
such Issuing Lender prior to 10:00 A.M. (New York City time) on the date such
drawing is honored that Company intends to reimburse such Issuing Lender for the
amount of such honored drawing with funds other than the proceeds of Revolving
Loans, Company shall be deemed to have given a timely Notice of Borrowing to
Administrative Agent requesting Lenders to make Revolving Loans that are Base
Rate Loans on the Reimbursement Date in an amount in Dollars (which amount, in
the case of a drawing under a Letter of Credit which is denominated in a
currency other than Dollars, shall be calculated by reference to the applicable
Exchange Rate) equal to the amount of such honored drawing and (ii) subject to
satisfaction or waiver of the conditions specified in subsection 4.2B, Lenders
shall, on the Reimbursement Date, make Revolving Loans that are Base Rate Loans
in the amount of
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such honored drawing, the proceeds of which shall be applied directly by
Administrative Agent to reimburse such Issuing Lender for the amount of such
honored drawing; and provided, further that if for any reason proceeds of
Revolving Loans are not received by such Issuing Lender on the Reimbursement
Date in an amount equal to the amount of such honored drawing, Company shall
reimburse such Issuing Lender, on demand, in an amount in same day funds equal
to the excess of the amount of such honored drawing over the aggregate amount
of such Revolving Loans, if any, which are so received. Nothing in this
subsection 3.3B shall be deemed to relieve any Lender from its obligation to
make Revolving Loans on the terms and conditions set forth in this Agreement,
and Company shall retain any and all rights it may have against any Lender
resulting from the failure of such Lender ato make such Revolving Loans under
this subsection 3.3B.
C. Payment by Lenders of Unreimbursed Amounts Paid Under Letters of
Credit.
(1) Payment by Lenders. In the event that Company shall fail for any
reason to reimburse any Issuing Lender as provided in subsection 3.3B in
an amount (calculated, in the case of a drawing under a Letter of Credit
denominated in a currency other than Dollars, by reference to the
applicable Exchange Rate) equal to the amount of any drawing honored by
such Issuing Lender under a Letter of Credit issued by it, such Issuing
Lender shall promptly notify each other Lender of the unreimbursed amount
of such honored drawing and of such other Lender's respective
participation therein based on such Lender's Pro Rata Share. Each Lender
shall make available tob such Issuing Lender an amount equal to its
respective participation, in Dollars and in same day funds, at the office
of such Issuing Lender specified in such notice, not later than 12:00 Noon
(BNew York City time) on the first business day (under the laws of the
jurisdiction in which such office of such Issuing Lender is located) after
the date notified by such Issuing Lender. In the event that any Lender
fails to make available to such Issuing Lender on such business day the
amount of such Lender's participation in such Letter of Credit as provided
in this subsection 3.3C, such Issuing Lender shall be entitled to recover
such amount on demand from such Lender together with interest thereon at
the rate customarily used by such Issuing Lender for the correction of
ettors among banks for three Business Days and thereafter at the Base
Rate. Nothing in this subsection 3.3C shall be deemed to prejudice the
right of any Lender to recover from any Issuing Lender any amounts made
available by such Lender to such Issuing Lender pursuant to this
subsection 3.3C in the event that it is determined by the final judgment
of a court of competent jurisdiction that the payment with respect to a
Letter of Credit by such Issuing Lender in respect of which payment was
made by such Lender constituted gross negligence or willful misconduct on
the part of such Issuing Lender.
(ii) Distribution to Lenders of Reimbursements Received From
Company. In the event any Issuing Lender shall have been reimbursed by
other Lenders pursuant to subsection 3.3C(i) for all or any portion of any
drawing honored by such Issuing Lender under a Letter of Credit issued by
it, such Issuing Lender shall
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distribute to each other Lender which has paid all amounts payable by it
under subsection 3.3C(i) with respect to such honored drawing such other
Lender's Pro Rata Share of all payments subsequently received by such
Issuing Lender from Company in reimbursement of such honored drawing when
such payments are received. Any such distribution shall be made to a
Lender at its primary address set forth below its name on the appropriate
signature page hereof or at such other address as such Lender may request.
D. Interest on Amounts Paid Under Letters of Credit.
(i) Payment of Interest by Company. Company agrees to pay to each
Issuing Lender, with respect to drawings honored under any Letters of
Credit issued by it, interest on the amount paid by such Issuing Lender in
respect of each such honored drawing from the date such drawing is honored
to but excluding the date such amount is reimbursed by Company (including
any such reimbursement out of the proceeds of Revolving Loans pursuant to
subsection 3.3B) at a rate equal to (a) for the period from the date such
drawing is honored to but excluding the Reimbursement Date, the rate then
in effect under this Agreement with respect to Revolving Loans that are
Base Rate Loans and (b) thereafter, a rate which is 2% per annum in excess
of the rate of interest otherwise payable under this Agreement with
respect to Revolving Loans that are Base Rate Loans. Interest payable
pursuant to this subsection 3.3D(i) shall be computed on the basis of a
360-day year for the actual number of days elapsed in the period during
which it accrues and shall be payable on demand or, if no demand is made,
on the date on which the related drawing under a Letter of Credit is
reimbursed in full.
(ii) Distribution of Interest Payments by Issuing Lender. Promptly
upon receipt by any Issuing Lender of any payment of interest pursuant to
subsection 3.3D(i) with respect to a drawing honored under a Letter of
Credit issued by it, (a) such Issuing Lender shall distribute to each
other Lender, out of the interest received by such Issuing Lender in
respect of the period from the date such drawing is honored to but
excluding the date on which such Issuing Lender is reimbursed for the
amount of such drawing (including any such reimbursement out of the
proceeds of Revolving Loans pursuant to subsection 3.3B), the amount that
such other Lender would have been entitled to receive in respect of the
letter of credit fee that would have been payable in respect of such
Letter of Credit for such period pursuant to subsection 3.2 if no drawing
had been honored under such Letter of Credit, and (b) in the event such
Issuing Lender shall have been reimbursed by other Lenders pursuant to
subsection 3.3C(i) for all or any portion of such honored drawing, such
Issuing Lender shall distribute to each other Lender which has paid all
amounts payable by it under subsection 3.3C(i) with respect to such
honored drawing such other Lender's Pro Rata Share of any interest
received by such Issuing Lender in respect of that portion of such honored
drawing so reimbursed by other Lenders for the period from the date on
which such Issuing Lender was so reimbursed by other
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Lenders to but excluding the date on which such portion of such honored
drawing is reimbursed by Company. Any such distribution shall be made to a
Lender at its primary address set forth below its name on the appropriate
signature page hereof or at such other address as such Lender may request.
3.4 Obligations Absolute.
The obligation of Company to reimburse each Issuing Lender for drawings
honored under the Letters of Credit issued by it and to repay any Revolving
Loans made by Lenders pursuant to subsection 3.3B and the obligations of Lenders
under subsection 3.3C(i) shall be unconditional and irrevocable and shall be
paid strictly in accordance with the terms of this Agreement under all
circumstances including any of the following circumstances:
(i) any lack of validity or enforceability of any Letter of Credit;
(ii) the existence of any claim, set-off, defense or other right
which Company or any Lender may have at any time against a beneficiary or
any transferee of any Letter of Credit (or any Persons for whom any such
transferee may be acting), any Issuing Lender or other Lender or any other
Person or, in the case of a Lender, against Company, whether in connection
with this Agreement, the transactions contemplated herein or any unrelated
transaction (including any underlying transaction between Company or one
of its Subsidiaries and the beneficiary for which any Letter of Credit was
procured);
(iii) any draft or other document presented under any Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any
respect;
(iv) payment by the applicable Issuing Lender under any Letter of
Credit against presentation of a draft or other document which does not
substantially comply with the terms of such Letter of Credit;
(v) any adverse change in the business, operations, properties,
assets, condition (financial or otherwise) or prospects of Company or any
of its Subsidiaries;
(vi) any breach of this Agreement or any other Loan Document by any
party thereto;
(vii) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing; or
(viii) the fact that an Event of Default or a Potential Event of
Default shall have occurred and be continuing;
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provided, in each case, that payment by the applicable Issuing Lender under the
applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of such Issuing Lender under the circumstances in question
(as determined by a final judgment of a court of competent jurisdiction).
3.5 Indemnification; Nature of Issuing Lenders' Duties.
A. Indemnification. In addition to amounts payable as provided in
subsection 3.6, Company hereby agrees to protect, indemnify, pay and save
harmless each Issuing Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of counsel and allocated costs of internal
counsel) which such Issuing Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Letter of Credit by such Issuing
Lender, other than as a result of (a) the gross negligence or willful misconduct
of such Issuing Lender as determined by a final judgment of a court of competent
jurisdiction or (b) subject to the following clause (ii), the wrongful dishonor
by such Issuing Lender of a proper demand for payment made under any Letter of
Credit issued by it or (ii) the failure of such Issuing Lender to honor a
drawing under any such Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure or de facto
government or governmental authority (all such acts or omissions herein called
"Governmental Acts").
B. Nature of Issuing Lenders' Duties. As between Company and any Issuing
Lender, Company assumes all risks of the acts and omissions of, or misuse of the
Letters of Credit issued by such Issuing Lender by, the respective beneficiaries
of such Letters of Credit. In furtherance and not in limitation of the
foregoing, such Issuing Lender shall not be responsible for: (i) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
any such Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) failure of the beneficiary of
any such Letter of Credit to comply fully with any conditions required in order
to draw upon such Letter of Credit; (iv) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any such
Letter of Credit or of the proceeds thereof; (vii) the misapplication by the
beneficiary of any such Letter of Credit of the proceeds of any drawing under
such Letter of Credit; or (viii) any consequences arising from causes beyond the
control of such Issuing Lender, including any Governmental Acts, and none of the
above shall affect or impair, or prevent the vesting of, any of such Issuing
Lender's rights or powers hereunder.
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In furtherance and extension and not in limitation of the specific
provisions set forth in the first paragraph of this subsection 3.5B, any action
taken or omitted by any Issuing Lender under or in connection with the Letters
of Credit issued by it or any documents and certificates delivered thereunder,
if taken or omitted in good faith, shall not put such Issuing Lender under any
resulting liability to Company.
Notwithstanding anything to the contrary contained in this subsection 3.5,
Company shall retain any and all rights it may have against any Issuing Lender
for any liability arising solely out of the gross negligence or willful
misconduct of such Issuing Lender, as determined by a final judgment of a court
of competent jurisdiction.
3.6 Increased Costs and Taxes Relating to Letters of Credit.
Subject to the provisions of subsection 2.7B (which shall be controlling
with respect to the matters covered thereby and to the extent a Lender is not
entitled to payment under the terms of Section 2.7B, it shall not be entitled to
payment pursuant to this section), in the event that any Issuing Lender or
Lender shall determine (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties hereto) that any law, treaty
or governmental rule, regulation or order, or any change therein or in the
interpretation, administration or application thereof (including the
introduction of any new law, treaty or governmental rule, regulation or order),
or any determination of a court or governmental authority, in each case that
becomes effective after the date hereof, or compliance by any Issuing Lender or
Lender with any guideline, request or directive issued or made after the date
hereof by any central bank or other governmental or quasi-governmental authority
(whether or not having the force of law):
(i) subjects such Issuing Lender or Lender (or its applicable
lending or letter of credit office) to any additional Tax (other than any
Tax on the overall net income of such Issuing Lender or Lender) with
respect to the issuing or maintaining of any Letters of Credit or the
purchasing or maintaining of any participations therein or any other
obligations under this Section 3, whether directly or by such being
imposed on or suffered by any particular Issuing Lender;
(ii) imposes, modifies or holds applicable any reserve (including
any marginal, emergency, supplemental, special or other reserve), special
deposit, compulsory loan, FDIC insurance or similar requirement in respect
of any Letters of Credit issued by any Issuing Lender or participations
therein purchased by any Lender; or
(iii) imposes any other condition (other than with respect to a Tax
matter) on or affecting such Issuing Lender or Lender (or its applicable
lending or letter of credit office) regarding this Section 3 or any Letter
of Credit or any participation therein;
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and the result of any of the foregoing is to increase the cost to such Issuing
Lender or Lender of agreeing to issue, issuing or maintaining any Letter of
Credit or agreeing to purchase, purchasing or maintaining any participation
therein or to reduce any amount received or receivable by such Issuing Lender or
Lender (or its applicable lending or letter of credit office) with respect
thereto by an amount considered by such Issuing Lender or Lender to be material;
then, in any case, Company shall promptly pay to such Issuing Lender or Lender,
upon receipt of the statement referred to in the next sentence, such additional
amount or amounts as may be necessary to compensate such Issuing Lender or
Lender for any such increased cost or reduction in amounts received or
receivable hereunder. Such Issuing Lender or Lender shall deliver to Company a
written statement, setting forth in reasonable detail the basis for calculating
the additional amounts owed to such Issuing Lender or Lender under this
subsection 3.6, which statement shall be conclusive and binding upon all parties
hereto absent manifest error.
SECTION 4.
CONDITIONS TO LOANS AND LETTERS OF CREDIT
The obligations of Lenders to make Revolving Loans and the issuance of
Letters of Credit hereunder are subject to the satisfaction of the following
conditions.
4.1 Conditions to Initial Revolving Loans.
The obligations of Lenders to make any Revolving Loans to be made on the
Closing Date are, in addition to the conditions precedent specified in
subsection 4.2, subject to prior or concurrent satisfaction of the following
conditions:
A. Loan Party Documents. On or before the Closing Date, Company shall, and
shall cause each other Loan Party to, deliver to Lenders (or to Administrative
Agent for Lenders with sufficient originally executed copies, where appropriate,
for each Lender and its counsel) the following with respect to Company or such
Loan Party, as the case may be, each, unless otherwise noted, dated the Closing
Date:
(i) Certified copies of the Certificate or Articles of Incorporation
of such Person, together with a good standing certificate from the
Secretary of State of its jurisdiction of incorporation and each other
state in which such Person is qualified as a foreign corporation to do
business and, to the extent generally available, a certificate or other
evidence of good standing as to payment of any applicable franchise or
similar taxes from the appropriate taxing authority of each of such
jurisdictions, each dated a recent date prior to the Closing Date;
(ii) Copies of the Bylaws of such Person, certified as of the
Closing Date by such Person's corporate secretary or an assistant
secretary;
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(iii) Resolutions of the Board of Directors of such Person approving
and authorizing the execution, delivery and performance of the Revolving
Loan Documents and Related Agreements to which it is a party, certified as
of the Closing Date by the corporate secretary or an assistant secretary
of such Person as being in full force and effect without modification or
amendment;
(iv) Signature and incumbency certificates of the officers of such
Person executing the Revolving Loan Documents to which it is a party;
(v) Executed originals of the Revolving Loan Documents to which such
Person is a party; and
(vi) Such other documents as Arranger or Administrative Agent may
reasonably request.
B. No Material Adverse Effect. Since December 31, 1996, no Material
Adverse Effect (in the opinions of Arranger and Administrative Agent) shall have
occurred.
C. Corporate and Capital Structure, Ownership, Management, Etc.
(i) Corporate Structure. The corporate organizational structure of
Company and its Subsidiaries, both before and after giving effect to the
Merger, shall be as set forth on Schedule 4.1C annexed hereto.
(ii) Capital Structure and Ownership. The capital structure and
ownership of Company, both before and after giving effect to the Merger,
shall be as set forth on Schedule 4.1C annexed hereto.
(iii) Management; Employment Agreements. The management structure of
Company after giving effect to the Merger shall be as set forth on
Schedule 4.1C annexed hereto. Arranger and Administrative Agent shall have
received duly executed copies of, and shall be satisfied with the form and
substance of, the Employment Agreements as set forth on Schedule 4.1C
annexed hereto.
D. Proceeds of Debt and Equity Capitalization of Newco and Company.
(i) Debt and Equity Capitalization of Company. On or before the
Closing Date, Newco and Company shall have consummated the transactions
contemplated under the Recapitalization Agreement, and in connection with
such transactions, Company will have, following the Merger of Newco with
and into Company, not less than $75,000,000 of equity financing,
consisting of (i) approximately $7,500,000 in shares of Company retained
by current shareholders, (ii) approximately $750,000 in cash common equity
contributions by certain Management Investors (which contributions will be
financed by Company and will be made following consummation
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of the Merger) and (iii) approximately $67,500,000 in equity financing
from Newco, which equity financing shall have been contributed to Newco
immediately prior to the Merger as follows: (x) an amount not less than
$61,875,000 in cash by GSII, (y) approximately $4,500,000 of Old
Management Shares (valued at the highest cash price offered to public
shareholders in the Acquisition) contributed by a certain Management
Investor in exchange for common stock of Newco which will be converted in
the Merger into shares of Company Common Stock and (z) approximately
$1,125,000 of restricted shares of common stock of Newco granted to a
certain Management Investor which will be converted in the Merger into
shares of Company Common Stock. On or before the Closing Date, Company
shall have issued and sold not less than $110,000,000 in aggregate
principal amount of Senior Subordinated Notes.
(ii) Use of Proceeds by Company. Company shall have provided
evidence satisfactory to Arranger and Administrative Agent that the
proceeds of the debt and equity capitalization of Company described in the
immediately preceding clause (i) have been contributed or irrevocably
committed, prior to the application of the proceeds of any Revolving Loans
made on the Closing Date, to the payment of a portion of the
Recapitalization Financing Requirements.
E. Related Agreements.
(i) Form of Senior Subordinated Note Indenture. The Senior
Subordinated Note Indenture shall be in the form that has been approved by
Arranger and Administrative Agent or that would otherwise have been
permitted to be made pursuant to subsection 7.14B if the Senior
Subordinated Notes were issued and outstanding at the time of any such
change.
(ii) Approval of Certain Related Agreements. The Recapitalization
Agreement, the Certificate of Merger, the Stockholders Agreement, the
Voting Agreement, the Employment Agreements and the Tax Indemnification
Agreement shall each be satisfactory in form and substance to Arranger and
Administrative Agent.
(iii) Related Agreements in Full Force and Effect. Arranger and
Administrative Agent shall each have received a fully executed or
conformed copy of each Related Agreement (including all schedules and
exhibits thereto) and any material documents executed in connection
therewith, and each Related Agreement shall be in full force and effect
and no provision thereof shall have been modified or waived in any respect
determined by Arranger or Administrative Agent to be material, in each
case without the consent of Arranger and Administrative Agent.
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F. Matters Relating to Existing Indebtedness of Company and its
Subsidiaries.
(i) Termination of Existing Credit Agreements and Related Liens;
Existing Letters of Credit. On the Closing Date, Company and its
Subsidiaries shall have (a) repaid in full all Indebtedness outstanding
under the Existing Credit Agreements as set forth on Schedule 4.1F (the
aggregate principal amount of which Indebtedness shall not exceed
$48,000,000), (b) terminated any commitments to lend or make other
extensions of credit thereunder, (c) delivered to Arranger and
Administrative Agent all documents or instruments necessary to release all
Liens securing Indebtedness or other obligations of Company and its
Subsidiaries thereunder, and (d) made arrangements satisfactory to
Arranger and Administrative Agent with respect to the cancellation of any
letters of credit outstanding thereunder or the issuance of Letters of
Credit to support the obligations of Company and its Subsidiaries with
respect thereto.
(ii) Existing Indebtedness to Remain Outstanding. Arranger and
Administrative Agent shall have received an Officers' Certificate of
Company stating that, after giving effect to the transactions described in
this subsection 4.1F, the Indebtedness of Loan Parties (other than
Indebtedness under the Loan Documents and the Senior Subordinated Notes)
shall consist of (a) approximately $6,379,156 in aggregate principal
amount of outstanding Indebtedness described in Part I of Schedule 7.1
annexed hereto and (b) Indebtedness in an aggregate amount not to exceed
$4,643,679 in respect of Capital Leases described in Part II of Schedule
7.1 annexed hereto. The terms and conditions of all such Indebtedness
shall be in form and in substance satisfactory to Arranger, Administrative
Agent and Requisite Lenders.
G. Necessary Governmental Authorizations and Consents; Expiration of
Waiting Periods, Etc. Company shall have obtained all Governmental
Authorizations and all consents of other Persons, in each case that are
necessary or advisable in connection with the Merger, the other transactions
contemplated by the Loan Documents and the Related Agreements, and the continued
operation of the business conducted by Company and its Subsidiaries in
substantially the same manner as conducted prior to the consummation of the
Merger, and each of the foregoing shall be in full force and effect, in each
case other than those the failure to obtain or maintain which, either
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect. All applicable waiting periods shall have expired
without any action being taken or threatened by any competent authority which
would restrain, prevent or otherwise impose adverse conditions on the Merger or
the financing thereof. No action, request for stay, petition for review or
rehearing, reconsideration, or appeal with respect to any of the foregoing shall
be pending, and the time for any applicable agency to take action to set aside
its consent on its own motion shall have expired.
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H. Consummation of Merger.
(i) All conditions to the Merger set forth in the Recapitalization
Agreement shall have been satisfied or the fulfillment of any such
conditions shall have been waived with the consent of Arranger,
Administrative Agent and Requisite Lenders;
(ii) the Merger shall have become effective in accordance with the
terms of the Recapitalization Agreement, the Certificate of Merger and the
laws of the State of Delaware;
(iii) Transaction Costs shall not exceed an amount previously agreed
to by Arranger, and Arranger shall have received evidence to its
satisfaction to such effect; and
(iv) Arranger and Administrative Agent shall have received an
Officers' Certificate of Company to the effect set forth in clauses
(i)-(iii) above.
I. Security Interests in Personal and Mixed Property. Collateral Agent
shall have received evidence satisfactory to it that Company and Subsidiary
Guarantors shall have taken or caused to be taken all such actions, executed and
delivered or caused to be executed and delivered all such agreements, documents
and instruments, and made or caused to be made all such filings and recordings
(other than the filing or recording of items described in clauses (iii), (iv)
and (v) below) that may be necessary or, in the opinion of Collateral Agent,
desirable in order to create in favor of Collateral Agent, for the benefit of
Secured Parties, a valid and (upon such filing and recording) perfected First
Priority security interest in the entire personal and mixed property Collateral.
Such actions shall include the following:
(i) Schedules to Collateral Documents. Delivery to Collateral Agent
of accurate and complete schedules to all of the applicable Collateral
Documents.
(ii) Stock Certificates and Instruments. Delivery to Collateral
Agent of (a) certificates (which certificates shall be accompanied by
irrevocable undated stock powers, duly endorsed in blank and otherwise
satisfactory in form and substance to Collateral Agent) representing all
capital stock pledged pursuant to the Company Pledge Agreement and the
Subsidiary Pledge Agreements and (b) all promissory notes or other
instruments (duly endorsed, where appropriate, in a manner satisfactory to
Collateral Agent) evidencing any Collateral;
(iii) Lien Searches and UCC Termination Statements. Delivery to
Arranger and Administrative Agent of (a) the results of a recent search,
by a Person satisfactory to Arranger and Administrative Agent, of all
effective UCC financing statements and fixture filings and all judgment
and tax lien filings which may have
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been made with respect to any personal or mixed property of any Loan
Party, together with copies of all such filings disclosed by such search,
and (b) UCC termination statements duly executed by all applicable Persons
for filing in all applicable jurisdictions as may be necessary to
terminate any effective UCC financing statements or fixture filings
disclosed in such search (other than any such financing statements or
fixture filings in respect of Liens permitted to remain outstanding
pursuant to the terms of this Agreement).
(iv) UCC Financing Statements and Fixture Filings. Delivery to
Collateral Agent of UCC financing statements and, where appropriate,
fixture filings, duly executed by each applicable Loan Party with respect
to all personal and mixed property Collateral of such Loan Party, for
filing in all jurisdictions as may be necessary or, in the reasonable
opinion of Collateral Agent, desirable to perfect the security interests
created in such Collateral pursuant to the Collateral Documents;
(v) Auxiliary Pledge Agreements. Execution and delivery to
Collateral Agent of Auxiliary Pledge Agreements with respect to the stock
of all Foreign Subsidiaries organized under the laws of all jurisdictions
with respect to which Collateral Agent deems an Auxiliary Pledge Agreement
necessary or advisable to perfect or otherwise protect the First Priority
Liens granted to Collateral Agent on behalf of Secured Parties in such
stock, and the taking of all such other actions under the laws of such
jurisdictions as Collateral Agent may deem necessary or advisable to
perfect or otherwise protect such Liens; and
(vi) Opinions of Local Counsel. Delivery to Arranger and
Administrative Agent of (a) an opinion of counsel (which counsel shall be
reasonably satisfactory to Arranger and Administrative Agent) under the
laws of each state in the United States in which any personal or mixed
property Collateral with an aggregate value in excess of $500,000 is
located with respect to the creation and perfection of the security
interests in favor of Collateral Agent in such Collateral and such other
matters governed by the laws of such jurisdiction regarding such security
interests as Arranger and Administrative Agent may reasonably request and
(b) an opinion of counsel (which counsel shall be reasonably satisfactory
to Arranger and Administrative Agent) under the laws of Quebec, Canada and
England as to the perfection of the pledge of stock of Foreign
Subsidiaries organized in those jurisdictions, in each case in form and
substance reasonably satisfactory to Arranger and Administrative Agent.
J. Environmental Reports. Arranger and Administrative Agent shall have
received such reports and other information, in form, scope and substance
satisfactory to Arranger and Administrative Agent, as Arranger and
Administrative Agent may reasonably require regarding environmental matters
relating to Company and its Subsidiaries and the Facilities, which reports shall
include (i) that certain Environmental Assessment dated October 7, 1997,
prepared by Pilko & Associates, Inc. for Confetti Acquisitions, Inc.
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\covering the Facilities located at Anaheim, California, ▇▇▇▇▇▇▇, New York, East
Providence, Rhode Island, ▇▇▇▇▇▇▇▇, New York, Louisville, Kentucky, Montreal
(▇▇▇▇▇▇▇▇), Quebec, Canada and Newburgh, New York, (the "Environmental
Assessment Report"), and (ii) a letter from Pilko & Associates, Inc. in form and
substance reasonably satisfactory to Administrative Agent allowing Arranger,
Administrative Agent, Collateral Agent and the Lenders to rely on the
Environmental Assessment Report to the same extent that Newco and Company may
rely thereon.
K. Financial Statements; Pro Forma Balance Sheet. On or before the Closing
Date, Lenders shall have received from Company (i) audited financial statements
of Company and its Subsidiaries for Fiscal Years ended December 31, 1994, 1995
and 1996, consisting of balance sheets and the related consolidated statements
of income, stockholders' equity and cash flows for such Fiscal Years, (ii)
unaudited financial statements of Company and its Subsidiaries as at September
30, 1997, consisting of a balance sheet and the related consolidated statements
of income, stockholders' equity and cash flows for the nine-month period ending
on such date, all in reasonable detail and certified by the chief financial
officer of Company that they fairly present the financial condition of Company
and its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, subject to changes
resulting from audit and normal year-end adjustments, (iii) pro forma
consolidated balance sheets of Company and its Subsidiaries as of November 30,
1997, prepared in accordance with GAAP and reflecting the consummation of the
Merger, the related financings and the other transactions contemplated by the
Loan Documents and the Related Agreements, which pro forma financial statements
shall be in form and substance satisfactory to Lenders and (iv) pro forma
financial statements (including consolidated balance sheets, statements of
operations, stockholders' equity and cash flows) of Company and its Subsidiaries
for the 10-year period commencing on the Closing Date, which pro forma financial
statements shall be in form and substance satisfactory to Lenders.
L. Solvency Assurances. On the Closing Date, Arranger, Administrative
Agent and Lenders shall have received (i) a letter from Houlihan, Lokey, ▇▇▇▇▇▇
& ▇▇▇▇▇, dated the Closing Date and addressed to Arranger, Administrative Agent
and Lenders, in form and substance satisfactory to Arranger and Administrative
Agent and with appropriate attachments, and (ii) a Financial Condition
Certificate dated the Closing Date, substantially in the form of Exhibit XI
annexed hereto and with appropriate attachments, in each case demonstrating
that, after giving effect to the consummation of the Merger, the related
financings and the other transactions contemplated by the Loan Documents and the
Related Agreements, Company will be Solvent.
M. Evidence of Insurance. Collateral Agent shall have received a
certificate from Company's insurance broker or other evidence satisfactory to it
that all insurance required to be maintained pursuant to subsection 6.4 is in
full force and effect and that Collateral Agent on behalf of Secured Parties has
been named as additional insured and/or loss payee thereunder to the extent
required under subsection 6.4.
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N. Opinions of Counsel to Loan Parties. Lenders and their respective
counsel shall have received (i) originally executed copies of one or more
favorable written opinions of (a) Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇, special
counsel for Loan Parties, in form and substance reasonably satisfactory to
Administrative Agent and Arranger and its counsel, dated as of the Closing Date
and setting forth substantially the matters in the opinions designated in
Exhibit VII-A annexed hereto and as to such other matters as Administrative
Agent or Arranger and acting on behalf of Lenders may reasonably request and (b)
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ counsel for Loan Parties, in form and substance reasonably
satisfactory to Administrative Agent and Arranger and its counsel, dated as of
the Closing Date and setting forth substantially the matters in the opinions
designated in Exhibit VII-B annexed hereto and as to such other matters as
Administrative Agent or Arranger and acting on behalf of Lenders may reasonably
request, and (ii) evidence satisfactory to Arranger and Administrative Agent
that Company has requested such counsel to deliver such opinions to Lenders.
O. Opinions of Arranger and Administrative Agent's Counsel. Lenders shall
have received originally executed copies of one or more favorable written
opinions of O'Melveny & ▇▇▇▇▇ LLP, counsel to Arranger and Administrative Agent,
dated as of the Closing Date, substantially in the form of Exhibit VIII annexed
hereto and as to such other matters as Arranger and Administrative Agent may
reasonably request.
P. Fees. Company shall have paid to Arranger and Administrative Agent, for
distribution (as appropriate) to Arranger, Administrative Agent and Lenders, the
fees payable on the Closing Date referred to in subsection 2.3.
Q. Representations and Warranties; Performance of Agreements. Company
shall have delivered to Arranger and Administrative Agent an Officers'
Certificate, in form and substance satisfactory to Arranger and Administrative
Agent, to the effect that the representations and warranties in Section 5 hereof
are true, correct and complete in all material respects on and as of the Closing
Date to the same extent as though made on and as of that date (or, to the extent
such representations and warranties specifically relate to an earlier date, that
such representations and warranties were true, correct and complete in all
material respects on and as of such earlier date) and that Company shall have
performed in all material respects all agreements and satisfied all conditions
which this Agreement provides shall be performed or satisfied by it on or before
the Closing Date except as otherwise disclosed to and agreed to in writing by
Arranger, Administrative Agent and Requisite Lenders.
R. Completion of Proceedings. All corporate and other proceedings taken or
to be taken in connection with the transactions contemplated hereby and all
documents incidental thereto not previously found acceptable by Administrative
Agent, acting on behalf of Lenders, or Arranger and its counsel shall be
satisfactory in form and substance to Administrative Agent and Arranger and such
counsel, and Administrative Agent, Arranger
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and such counsel shall have received all such counterpart originals or certified
copies of such documents as Administrative Agent or Arranger may reasonably
request.
S. Borrowing Base Certificate. Administrative Agent shall have received a
Borrowing Base Certificate dated as of November 30, 1997, in form, scope and
substance satisfactory to Arranger and Administrative Agent.
T. Cash Management System. Administrative Agent shall have received
evidence satisfactory to it that Company and its Subsidiaries have established
and maintain a cash management system in form and substance reasonably
satisfactory to the Administrative Agent and in accordance with subsection 6.11.
U. Collateral Access Agreements. Company and each applicable Subsidiary
Guarantor shall have used its reasonable good faith efforts to obtain, in the
case of any Leasehold Property or any real property in which Company or any of
its Subsidiaries owns or holds a fee interest and which is subject to a mortgage
held by a third-party mortgagee holding inventory or equipment with an aggregate
fair market value exceeding $500,000, a Collateral Access Agreement with respect
thereto, in each case in form and substance reasonably satisfactory to Arranger
and Administrative Agent.
V. AXEL Credit Agreement. Arranger and Administrative Agent shall each
have received a fully executed or conformed copy of the AXEL Credit Agreement
satisfactory in form and substance to Arranger and Administrative Agent. The
AXEL Credit Agreement shall be in full force and effect and the conditions to
advances of the AXELs thereunder shall have been satisfied or waived by the AXEL
Lenders.
4.2 Conditions to All Revolving Loans.
The obligations of Lenders to make Revolving Loans on each Funding Date
are subject to the following further conditions precedent:
A. Administrative Agent shall have received before that Funding Date,
in accordance with the provisions of subsection 2.1B, an originally executed
Notice of Borrowing, in each case signed by the chief executive officer, the
chief financial officer or the treasurer or corporate controller of Company or
by any executive officer of Company designated by any of the above-described
officers on behalf of Company in a writing delivered to Administrative Agent.
B. As of that Funding Date:
(i) The representations and warranties contained herein and in the
other Revolving Loan Documents shall be true, correct and complete in all
material respects on and as of that Funding Date to the same extent as
though made on and as of that date, except to the extent such
representations and warranties specifically
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relate to an earlier date, in which case such representations and
warranties shall have been true, correct and complete in all material
respects on and as of such earlier date;
(ii) No event shall have occurred and be continuing or would result
from the consummation of the borrowing contemplated by such Notice of
Borrowing that would constitute an Event of Default or a Potential Event
of Default;
(iii) Each Loan Party shall have performed in all material respects
all agreements and satisfied all conditions which this Agreement provides
shall be performed or satisfied by it on or before that Funding Date;
(iv) No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain any Lender from
making the Revolving Loans to be made by it on that Funding Date;
(v) The making of the Revolving Loans requested on such Funding Date
shall not violate any law including Regulation G, Regulation T, Regulation
U or Regulation X of the Board of Governors of the Federal Reserve System;
and
(vi) There shall not be pending or, to the knowledge of Company,
threatened, any action, suit, proceeding, governmental investigation or
arbitration against or affecting Company or any of its Subsidiaries or any
property of Company or any of its Subsidiaries that has not been disclosed
by Company in writing pursuant to subsection 5.6 or 6.1(x) prior to the
making of the last preceding Revolving Loans (or, in the case of the
initial Revolving Loans, prior to the execution of this Agreement), and
there shall have occurred no development not so disclosed in any such
action, suit, proceeding, governmental investigation or arbitration so
disclosed, that, in either event, in the opinion of Administrative Agent
or of Requisite Lenders, would be expected to have a Material Adverse
Effect; and no injunction or other restraining order shall have been
issued and no hearing to cause an injunction or other restraining order to
be issued shall be pending or noticed with respect to any action, suit or
proceeding seeking to enjoin or otherwise prevent the consummation of, or
to recover any damages or obtain relief as a result of, the transactions
contemplated by this Agreement or the making of Revolving Loans hereunder.
4.3 Conditions to Letters of Credit.
The issuance of any Letter of Credit hereunder (whether or not the
applicable Issuing Lender is obligated to issue such Letter of Credit) is
subject to the following conditions precedent:
A. On or before the date of issuance of the initial Letter of Credit
pursuant to this Agreement, the initial Revolving Loans shall have been
made.
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B. On or before the date of issuance of such Letter of Credit,
Administrative Agent shall have received, in accordance with the
provisions of subsection 3.1B(i), an originally executed Notice of
Issuance of Letter of Credit, in each case signed by the chief executive
officer, the chief financial officer or the treasurer or corporate
controller of Company or by any executive officer of Company designated by
any of the above-described officers on behalf of Company in a writing
delivered to Administrative Agent, together with all other information
specified in subsection 3.1B(i) and such other documents or information as
the applicable Issuing Lender may reasonably require in connection with
the issuance of such Letter of Credit.
C. On the date of issuance of such Letter of Credit, all conditions
precedent described in subsection 4.2B shall be satisfied to the same
extent as if the issuance of such Letter of Credit were the making of a
Revolving Loan and the date of issuance of such Letter of Credit were a
Funding Date.
SECTION 5.
COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make the
Revolving Loans, to induce Issuing Lenders to issue Letters of Credit and to
induce other Lenders to purchase participations therein, Company represents and
warrants to each Lender, on the date of this Agreement, on each Funding Date and
on the date of issuance of each Letter of Credit, that the following statements
are true, correct and complete:
5.1 Organization, Powers, Qualification, Good Standing, Business and
Subsidiaries.
A. Organization and Powers. Each Loan Party is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation as specified in Schedule 5.1 annexed hereto as it
may be supplemented pursuant to subsection 6.1(xvi). Each Loan Party has all
requisite corporate power and authority to own and operate its properties, to
carry on its business as now conducted and as proposed to be conducted, to enter
into the Revolving Loan Documents and Related Agreements to which it is a party
and to carry out the transactions contemplated thereby.
B. Qualification and Good Standing. Each Loan Party is qualified to do
business and in good standing in every jurisdiction where its assets are located
and wherever necessary to carry out its business and operations, except in
jurisdictions where the failure to be so qualified or in good standing has not
had and could not reasonably be expected to have a Material Adverse Effect.
C. Conduct of Business. Company and its Subsidiaries are engaged only in
the businesses permitted to be engaged in pursuant to subsection 7.14.
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D. Subsidiaries. All of the Subsidiaries of Company as of the Closing Date
are identified in Schedule 5.1 annexed hereto, as said Schedule 5.1 may be
supplemented from time to time pursuant to the provisions of subsection
6.1(xvi). The capital stock of each of the Subsidiaries of Company identified in
Schedule 5.1 annexed hereto (as so supplemented) is duly authorized, validly
issued, fully paid and nonassessable and none of such capital stock constitutes
Margin Stock. Each of the Subsidiaries of Company identified in Schedule 5.1
annexed hereto (as so supplemented) is a corporation duly organized, validly
existing and in good standing under the laws of its respective jurisdiction of
incorporation set forth therein, has all requisite corporate power and authority
to own and operate its properties and to carry on its business as now conducted
and as proposed to be conducted, and is qualified to do business and in good
standing in every jurisdiction where its assets are located and wherever
necessary to carry out its business and operations, in each case except where
failure to be so qualified or in good standing or a lack of such corporate power
and authority has not had and could not reasonably be expected to have a
Material Adverse Effect. Schedule 5.1 annexed hereto (as so supplemented)
correctly sets forth, as of the Closing Date, the ownership interest of Company
and each of its Subsidiaries in each of the Subsidiaries of Company identified
therein.
5.2 Authorization of Borrowing, etc.
A. Authorization of Borrowing. The execution, delivery and performance of
the Revolving Loan Documents and the Related Agreements have been duly
authorized by all necessary corporate action on the part of each Loan Party that
is a party thereto.
B. No Conflict. The execution, delivery and performance by Loan Parties of
the Revolving Loan Documents and the Related Agreements to which they are
parties and the consummation of the transactions contemplated by the Revolving
Loan Documents and such Related Agreements do not and will not (i) violate any
provision of any law or any governmental rule or regulation applicable to
Company or any of its Subsidiaries, the Certificate or Articles of Incorporation
or Bylaws of Company or any of its Subsidiaries or any order, judgment or decree
of any court or other agency of government binding on Company or any of its
Subsidiaries, (ii) conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any Contractual Obligation of
Company or any of its Subsidiaries, except for any breach or default which could
not reasonably be expected to have a Material Adverse Effect, (iii) result in or
require the creation or imposition of any Lien upon any of the properties or
assets of Company or any of its Subsidiaries (other than any Liens created under
any of the Revolving Loan Documents in favor of Administrative Agent on behalf
of Lenders), or (iv) require any approval of stockholders or any approval or
consent of any Person under any Contractual Obligation of Company or any of its
Subsidiaries, except for such approvals or consents which will be obtained on or
before the Closing Date and disclosed in writing to Lenders and such consents
the failure of which to receive could not reasonably be expected to have a
Material Adverse Effect.
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C. Governmental Consents. The execution, delivery and performance by Loan
Parties of the Revolving Loan Documents and the Related Agreements to which they
are parties and the consummation of the transactions contemplated by the
Revolving Loan Documents and such Related Agreements do not and will not require
any registration with, consent or approval of, or notice to, or other action to,
with or by, any federal, state or other governmental authority or regulatory
body the failure of which to receive could not reasonably be expected to cause a
Material Adverse Effect.
D. Binding Obligation. Each of the Revolving Loan Documents and Related
Agreements has been duly executed and delivered by each Loan Party that is a
party thereto and is the legally valid and binding obligation of such Loan
Party, enforceable against such Loan Party in accordance with its respective
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights generally
or by equitable principles relating to enforceability.
E. Valid Issuance of Company Common Stock and Senior Subordinated
Notes.
(i) Company Common Stock. The Company Common Stock to be issued in
the Merger on or before the Closing Date, when issued and delivered, will
be duly and validly issued, fully paid and nonassessable. No stockholder
of Company has or will have any preemptive rights to subscribe for any
additional equity Securities of Company. The issuance and sale of such
Company Common Stock, upon such issuance and sale, will either (a) have
been registered or qualified under applicable federal and state securities
laws or (b) be exempt therefrom.
(ii) Senior Subordinated Notes. Company has the corporate power and
authority to issue the Senior Subordinated Notes. The Senior Subordinated
Notes, when issued and paid for, will be the legally valid and binding
obligations of Company, enforceable against Company in accordance with
their respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or
limiting creditors' rights generally or by equitable principles relating
to enforceability. The subordination provisions of the Senior Subordinated
Notes will be enforceable against the holders thereof and the Revolving
Loans and all other monetary Obligations hereunder are and will be within
the definition of "Senior Debt" and "Designated Senior Debt" included in
such provisions. The Senior Subordinated Notes, when issued and sold, will
either (a) have been registered or qualified under applicable federal and
state securities laws or (b) be exempt therefrom.
5.3 Financial Condition.
Company has heretofore delivered to Lenders, at Lenders' request, the
following financial statements and information: (i) the audited consolidated
balance sheets of Company and its Subsidiaries as at December 31, 1996 and the
related consolidated
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statements of income, stockholders' equity and cash flows of Company and its
Subsidiaries for the Fiscal Year then ended and (ii) the unaudited consolidated
balance sheets of Company and its Subsidiaries as at September 30, 1997 and the
related unaudited consolidated statements of income, stockholders' equity and
cash flows of Company and its Subsidiaries for the nine-months then ended. All
such statements were prepared in conformity with GAAP and fairly present, in all
material respects, the financial position (on a consolidated basis) of the
entities described in such financial statements as at the respective dates
thereof and the results of operations and cash flows (on a consolidated basis)
of the entities described therein for each of the periods then ended, subject,
in the case of any such unaudited financial statements, to changes resulting
from audit and normal year-end adjustments. Company does not (and will not
following the funding of the initial Revolving Loans) have any Contingent
Obligation, contingent liability or liability for taxes, long-term lease or
unusual forward or long-term commitment that is not reflected in the foregoing
financial statements or the notes thereto and which in any such case is material
in relation to the business, operations, properties, assets, condition
(financial or otherwise) or prospects of Company or any of its Subsidiaries.
5.4 No Material Adverse Change; No Restricted Junior Payments.
Since December 31, 1996, no event or change has occurred that has caused
or evidences, either in any case or in the aggregate, a Material Adverse Effect.
Other than with respect to the Recapitalization Consideration and the repayment
of debt outstanding prior to the effectiveness of the Merger, neither Company
nor any of its Subsidiaries has directly or indirectly declared, ordered, or set
apart any sum or property which has not yet been paid for, any Restricted Junior
Payment or agreed to do so except as permitted by subsection 7.5.
5.5 Title to Properties; Liens; Real Property.
A. Title to Properties; Liens. Except for Permitted Encumbrances and
Liens, Company and its Subsidiaries have (i) good, sufficient and legal title to
(in the case of fee interests in real property), (ii) valid leasehold interests
in (in the case of leasehold interests in real or personal property), or (iii)
good title to (in the case of all other personal property), all of their
respective properties and assets reflected in the financial statements referred
to in subsection 5.3 or in the most recent financial statements delivered
pursuant to subsection 6.1, in each case except for assets disposed of since the
date of such financial statements in the ordinary course of business or as
otherwise permitted under subsection 7.7. All such properties and assets are
free and clear of Liens other than Permitted Encumbrances and other Liens
permitted under this Agreement.
B. Real Property. As of the Closing Date, Schedule 5.5 annexed hereto
contains a true, accurate and complete list of (i) all Fee Properties and (ii)
all leases, subleases or assignments of leases (together with all amendments,
modifications, supplements, renewals or extensions of any thereof) affecting
each Real Property Asset of any Loan Party,
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regardless of whether such Loan Party is the landlord or tenant (whether
directly or as an assignee or successor in interest) under such lease, sublease
or assignment. As of the Closing Date, except as specified in Schedule 5.5
annexed hereto, each agreement listed in clause (ii) of the immediately
preceding sentence is in full force and effect and Company does not have
knowledge of any material default that has occurred and is continuing
thereunder, and each such agreement constitutes the legally valid and binding
obligation of each applicable Loan Party, enforceable against such Loan Party in
accordance with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors'
rights generally or by equitable principles.
5.6 Litigation; Adverse Facts.
Except as set forth in Schedule 5.6 annexed hereto, there are no actions,
suits, proceedings, arbitrations or governmental investigations (whether or not
purportedly on behalf of Company or any of its Subsidiaries) at law or in
equity, or before or by any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign (including any Environmental Claims) that are pending or, to the
knowledge of Company, threatened against or affecting Company or any of its
Subsidiaries or any property of Company or any of its Subsidiaries and that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. Neither Company nor any of its Subsidiaries (i) is in
violation of any applicable laws (including Environmental Laws) that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect, or (ii) is subject to or in default with respect to any
final judgments, writs, injunctions, decrees, rules or regulations of any court
or any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.
5.7 Payment of Taxes.
Except to the extent permitted by subsection 6.3, all material tax returns
and reports of Company and its Subsidiaries required to be filed by any of them
have been timely filed, and all taxes shown on such tax returns to be due and
payable and all assessments, fees and other governmental charges upon Company
and its Subsidiaries and upon their respective properties, assets, income,
businesses and franchises which are due and payable have been paid when due and
payable. Company knows of no proposed material tax assessment against Company or
any of its Subsidiaries which is not being actively contested by Company or such
Subsidiary in good faith and by appropriate proceedings; provided that such
reserves or other appropriate provisions, if any, as shall be required in
conformity with GAAP shall have been made or provided therefor.
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5.8 Performance of Agreements; Materially Adverse Agreements; Material
Contracts.
A. Neither Company nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse of time or both, would
constitute such a default, except where the consequences, direct or indirect, of
such default or defaults, if any, would not have a Material Adverse Effect.
B. Neither Company nor any of its Subsidiaries is a party to or is
otherwise subject to any agreements or instruments or any charter or other
internal restrictions which, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect.
C. Schedule 5.8 contains a true, correct and complete list of all the
Material Contracts in effect on the Closing Date. Except as described on
Schedule 5.8, all such Material Contracts are in full force and effect and no
defaults currently exist thereunder other than any such defaults or failure to
be in force and effect which could not reasonably be expected to result in a
Material Adverse Effect.
5.9 Governmental Regulation.
Neither Company nor any of its Subsidiaries is subject to regulation under
the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of the Obligations
unenforceable.
5.10 Securities Activities.
A. Neither Company nor any of its Subsidiaries is engaged principally, or
as one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying any Margin Stock.
B. Following application of the proceeds of each AXEL under the AXEL
Credit Agreement and the Revolving Loan, not more than 25% of the value of the
assets (either of Company only or of Company and its Subsidiaries on a
consolidated basis) subject to the provisions of subsection 7.2 or 7.7 or
subject to any restriction contained in any agreement or instrument, between
Company and any Lender or any Affiliate of any Lender, relating to Indebtedness
and within the scope of subsection 8.2, will be Margin Stock.
5.11 Employee Benefit Plans.
A. Company, each of its Subsidiaries and each of their respective ERISA
Affiliates are in compliance with all applicable provisions and requirements of
ERISA and
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the regulations and published interpretations thereunder with respect
to each Employee Benefit Plan, and have performed all their obligations under
each Employee Benefit Plan. Each Employee Benefit Plan which is intended to
qualify under Section 401(a) of the Internal Revenue Code is so qualified.
B. No ERISA Events have occurred or are reasonably expected to occur which
could reasonably be expected to result in liabilities to the Company or any of
its Subsidiaries in excess of $1,000,000 in the aggregate.
C. As of the most recent valuation date for any Pension Plan, the excess
of (1) the actuarial present value (determined on the basis of reasonable
assumptions employed by the independent actuary for each Pension Plan for
purposes of Section 412 of the Internal Revenue Code or Section 302 of ERISA) of
benefit liabilities (as defined in Section 4001(a)(16) of ERISA) over (2) the
fair market value of the assets of such Pension Plan, individually or in the
aggregate for all Pension Plans (excluding for purposes of such computation any
Pension Plans with respect to which assets exceed benefit liabilities), does not
exceed $5,000,000.
D. As of the most recent valuation date for each Multiemployer Plan for
which the actuarial report is available, the potential liability of Company, its
Subsidiaries and their respective ERISA Affiliates for a complete withdrawal
from such Multiemployer Plan (within the meaning of Section 4203 of ERISA), when
aggregated with such potential liability for a complete withdrawal from all
Multiemployer Plans, based on information available pursuant to Section 4221(e)
of ERISA, does not exceed $5,000,000.
5.12 Certain Fees.
Except as described in the Confidential Information Memorandum, no
broker's or finder's fee or commission will be payable with respect to this
Agreement or any of the transactions contemplated hereby, and Company hereby
indemnifies Lenders against, and agrees that it will hold Lenders harmless from,
any claim, demand or liability for any such broker's or finder's fees alleged to
have been incurred in connection herewith or therewith and any expenses
(including reasonable fees, expenses and disbursements of counsel) arising in
connection with any such claim, demand or liability.
5.13 Environmental Protection.
Except as set forth in Schedule 5.13 annexed hereto:
(i) neither Company nor any of its Subsidiaries nor any of their
respective Facilities or operations are subject to any outstanding written
order, consent decree or settlement agreement with any Person relating to
(a) any Environmental Law, (b) any Environmental Claim, or (c) any
Hazardous Materials Activity;
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(ii) neither Company nor any of its Subsidiaries has received any
letter or request for information under Section 104 of the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C. ss.
9604) or any comparable state law;
(iii) there are and, to Company's knowledge, have been no
conditions, occurrences, or Hazardous Materials Activities which could
reasonably be expected to form the basis of an Environmental Claim against
Company or any of its Subsidiaries;
(iv) neither Company nor any of its Subsidiaries nor, to Company's
knowledge, any predecessor of Company or any of its Subsidiaries has filed
any notice under any Environmental Law indicating past or present
treatment of Hazardous Materials at any Facility, and none of Company's or
any of its Subsidiaries' operations involves the generation,
transportation, treatment, storage or disposal of hazardous waste, as
defined under 40 C.F.R. Parts 260-270 or any state equivalent;
(v) compliance with all current or reasonably foreseeable future
requirements pursuant to or under Environmental Laws will not,
individually or in the aggregate, have a reasonable possibility of giving
rise to a Material Adverse Effect.
Notwithstanding anything in this subsection 5.13 to the contrary, no event
or condition has occurred or is occurring with respect to Company or any of its
Subsidiaries relating to any Environmental Law, any Release of Hazardous
Materials, or any Hazardous Materials Activity, including any matter disclosed
on Schedule 5.13 annexed hereto, which individually or in the aggregate has had
or could reasonably be expected to have a Material Adverse Effect.
5.14 Employee Matters.
There is no strike or work stoppage in existence or threatened involving
Company or any of its Subsidiaries that could reasonably be expected to have a
Material Adverse Effect.
5.15 Solvency.
Each Loan Party is and, upon the incurrence of any Obligations by such
Loan Party on any date on which this representation is made, will be, Solvent.
5.16 Matters Relating to Collateral.
A. Creation, Perfection and Priority of Liens. The execution and delivery
of the Collateral Documents by Loan Parties, together with (i) the actions taken
on or prior to the
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date hereof pursuant to subsections 4.1I, 6.8 and 6.9 and (ii) the delivery to
Collateral Agent of any Pledged Collateral not delivered to Collateral Agent at
the time of execution and delivery of the applicable Collateral Document (all of
which Pledged Collateral has been so delivered) are effective to create in favor
of Collateral Agent for the benefit of Secured Parties, as security for the
respective Secured Obligations (as defined in the applicable Collateral Document
in respect of any Collateral), a valid and perfected First Priority Lien on all
of the Collateral, and all filings and other actions necessary or desirable to
perfect and maintain the perfection and First Priority status of such Liens have
been duly made or taken and remain in full force and effect, other than the
filing of any UCC financing statements delivered to Collateral Agent for filing
(but not yet filed) and the periodic filing of UCC continuation statements in
respect of UCC financing statements filed by or on behalf of Collateral Agent.
B. Governmental Authorizations. No authorization, approval or other action
by, and no notice to or filing with, any governmental authority or regulatory
body is required for either (i) the pledge or grant by any Loan Party of the
Liens purported to be created in favor of Collateral Agent pursuant to any of
the Collateral Documents or (ii) the exercise by Collateral Agent of any rights
or remedies in respect of any Collateral (whether specifically granted or
created pursuant to any of the Collateral Documents or created or provided for
by applicable law), except for filings or recordings contemplated by subsection
5.16A and except as may be required, in connection with the disposition of any
Pledged Collateral, by laws generally affecting the offering and sale of
securities.
C. Absence of Third-Party Filings. Except such as may have been filed in
favor of Collateral Agent as contemplated by subsection 5.16A, no effective UCC
financing statement, fixture filing or other instrument similar in effect
covering all or any part of the Collateral is on file in any filing or recording
office.
D. Margin Regulations. The pledge of the Pledged Collateral pursuant to
the Collateral Documents does not violate Regulation G, T, U or X of the Board
of Governors of the Federal Reserve System.
E. Information Regarding Collateral. All information supplied to
Collateral Agent by or on behalf of any Loan Party with respect to any of the
Collateral (in each case taken as a whole with respect to any particular
Collateral) is accurate and complete in all material respects.
5.17 Related Agreements.
A. Delivery of Related Agreements. Company has delivered to Lenders
complete and correct copies of each Related Agreement and of all exhibits and
schedules thereto.
B. Warranties of Company. Except to the extent otherwise set forth herein
or in the schedules hereto, each of the representations and warranties given by
Company in the
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Recapitalization Agreement is true and correct in all material respects as of
the date hereof (or as of any earlier date to which such representation and
warranty specifically relates) and will be true and correct in all material
respects as of the Closing Date (or as of such earlier date, as the case may
be), in each case subject to the qualifications set forth in the schedules to
the Recapitalization Agreement.
C. Survival. Notwithstanding anything in the Recapitalization Agreement to
the contrary, the representations and warranties of Company set forth in
subsection 5.17B shall, solely for purposes of this Agreement, survive the
Closing Date for the benefit of Lenders.
5.18 Disclosure.
No representation or warranty of Company or any of its Subsidiaries
contained in the Confidential Information Memorandum or in any Loan Document or
in any other document, certificate or written statement furnished to Lenders by
or on behalf of Company or any of its Subsidiaries for use in connection with
the transactions contemplated by this Agreement contains any untrue statement of
a material fact or omits to state a material fact (known to Company, in the case
of any document not furnished by it) necessary in order to make the statements
contained herein or therein not misleading in light of the circumstances in
which the same were made. Any projections and pro forma financial information
contained in such materials are based upon good faith estimates and assumptions
believed by Company to be reasonable at the time made, it being recognized by
Lenders that such projections as to future events are not to be viewed as facts
and that actual results during the period or periods covered by any such
projections may differ from the projected results. There are no facts known (or
which should upon the reasonable exercise of diligence be known) to Company
(other than matters of a general economic nature) that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect
and that have not been disclosed herein or in such other documents, certificates
and statements furnished to Lenders for use in connection with the transactions
contemplated hereby.
5.19 AXEL Credit Agreement.
A. Delivery of AXEL Credit Agreement. Company has delivered to Lenders
complete and correct copies of the AXEL Credit Agreement and of all exhibits and
schedules thereto.
B. Warranties of Company. Except to the extent otherwise set forth herein
or in the schedule hereto, each of the representations and warranties given by
Company in the AXEL Credit Agreement is true and correct in all material
respects as of the date hereof (or as of any earlier date to which such
representation and warranty specifically relates) and will be true and correct
in all material respects as of the Closing Date (or as of such earlier date, as
the case may be), in each case subject to the qualifications set forth in the
schedules to the AXEL Credit Agreement.
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SECTION 6.
COMPANY'S AFFIRMATIVE COVENANTS
Company covenants and agrees that, so long as any of the Revolving Loan
Commitments hereunder shall remain in effect and until payment in full of all of
the Revolving Loans and other Obligations and the cancellation or expiration of
all Letters of Credit, unless Requisite Lenders shall otherwise give prior
written consent, Company shall perform, and shall cause each of its Subsidiaries
to perform, all covenants in this Section 6.
6.1 Financial Statements and Other Reports.
Company will maintain, and cause each of its Subsidiaries to maintain, a
system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in conformity
with GAAP. Company will deliver to Administrative Agent and Lenders:
(i) Monthly Financials: as soon as available and in any event within
30 days after the end of each month ending after the Closing Date (or
within 45 days after the end of each month which ends a Fiscal Quarter),
the consolidated balance sheets of Company and its Subsidiaries as at the
end of such month and the related consolidated statements of income,
stockholders' equity and cash flows of Company and its Subsidiaries for
such month and for the period from the beginning of the then current
Fiscal Year to the end of such month, setting forth in each case in
comparative form the corresponding figures for the corresponding periods
of the previous Fiscal Year and the corresponding figures from the
Financial Plan for the current Fiscal Year, to the extent prepared on a
monthly basis, all in reasonable detail and certified by the chief
financial officer of Company that they fairly present, in all material
respects, the financial condition of Company and its Subsidiaries as at
the dates indicated and the results of their operations and their cash
flows for the periods indicated, subject to changes resulting from audit
and normal year-end adjustments, for such month and for the period from
the beginning of the then current Fiscal Year to the end of such month;
(ii) Quarterly Financials: as soon as available and in any event
within 45 days after the end of each of first three Fiscal Quarters of
each year, (a) the consolidated balance sheets of Company and its
Subsidiaries as at the end of such Fiscal Quarter and the related
consolidated statements of income, stockholders' equity and cash flows of
Company and its Subsidiaries for such Fiscal Quarter and for the period
from the beginning of the then current Fiscal Year to the end of such
Fiscal Quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding periods of the previous Fiscal
Year and the corresponding figures from the Financial Plan for the current
Fiscal Year, all in reasonable detail and certified by the chief financial
officer of Company that they fairly present, in all material respects, the
financial condition of Company and its
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Subsidiaries as at the dates indicated and the results of their operations
and their cash flows for the periods indicated, subject to changes
resulting from audit and normal year-end adjustments, and (b) a narrative
report describing the operations of Company and its Subsidiaries in the
form of the MD&A, which is prepared by the Company for public filing for
such Fiscal Quarter and for the period from the beginning of the then
current Fiscal Year to the end of such Fiscal Quarter;
(iii) Year-End Financials: as soon as available and in any event
within 90 days after the end of each Fiscal Year, (a) the consolidated
balance sheets of Company and its Subsidiaries as at the end of such
Fiscal Year and the related consolidated statements of income,
stockholders' equity and cash flows of Company and its Subsidiaries for
such Fiscal Year, setting forth in each case in comparative form the
corresponding figures for the previous Fiscal Year and the corresponding
figures from the Financial Plan for the Fiscal Year covered by such
financial statements, all in reasonable detail and certified by the chief
financial officer of Company that they fairly present, in all material
respects, the financial condition of Company and its Subsidiaries as at
the dates indicated and the results of their operations and their cash
flows for the periods indicated, (b) a narrative report describing the
operations of Company and its Subsidiaries in the form prepared for
presentation to senior management for such Fiscal Year, and (c) a report
thereon of independent certified public accountants of recognized national
standing selected by Company and satisfactory to Administrative Agent,
which report shall be unqualified, shall express no doubts about the
ability of Company and its Subsidiaries to continue as a going concern,
and shall state that such consolidated financial statements fairly
present, in all material respects, the consolidated financial position of
Company and its Subsidiaries as at the dates indicated and the results of
their operations and their cash flows for the periods indicated in
conformity with GAAP applied on a basis consistent with prior years
(except as otherwise disclosed in such financial statements) and that the
examination by such accountants in connection with such consolidated
financial statements has been made in accordance with generally accepted
auditing standards;
(iv) Officers' and Compliance Certificates: together with each
delivery of financial statements of Company and its Subsidiaries pursuant
to subdivisions (ii) and (iii) above, (a) an Officers' Certificate of
Company stating that the signers have reviewed the terms of this Agreement
and have made, or caused to be made under their supervision, a review in
reasonable detail of the transactions and condition of Company and its
Subsidiaries during the accounting period covered by such financial
statements and that such review has not disclosed the existence during or
at the end of such accounting period, and that the signers do not have
knowledge of the existence as at the date of such Officers' Certificate,
of any condition or event that constitutes an Event of Default or
Potential Event of Default, or, if any such condition or event existed or
exists, specifying the nature and period of existence thereof and what
action Company has taken, is taking and proposes to take with respect
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thereto; and (b) a Compliance Certificate demonstrating in reasonable
detail (1) compliance during and at the end of the applicable accounting
periods with the restrictions contained in Section 7, in each case to the
extent compliance with such restrictions is required to be tested at the
end of the applicable accounting period and (2) with respect to any Net
Asset Sale Proceeds received by Company or any of its Subsidiaries during
the second Fiscal Quarter immediately preceding the Fiscal Quarter in
which the applicable accounting period ends, whether or not all or any
portion of such Net Asset Sale Proceeds shall have become Unreinvested
Asset Sale Proceeds;
(v) Reconciliation Statements: if, as a result of any change in
accounting principles and policies from those used in the preparation of
the audited financial statements referred to in subsection 5.3, the
consolidated financial statements of Company and its Subsidiaries
delivered pursuant to subdivisions (ii), (iii) or (xiii) of this
subsection 6.1 will differ in any material respect from the consolidated
financial statements that would have been delivered pursuant to such
subdivisions had no such change in accounting principles and policies been
made, then (a) together with the first delivery of financial statements
pursuant to subdivision (ii), (iii) or (xiii) of this subsection 6.1
following such change, consolidated financial statements of Company and
its Subsidiaries for (y) the current Fiscal Year to the effective date of
such change and (z) the two full Fiscal Years immediately preceding the
Fiscal Year in which such change is made, in each case prepared on a pro
forma basis as if such change had been in effect during such periods, and
(b) together with each delivery of financial statements pursuant to
subdivision (ii), (iii) or (xiii) of this subsection 6.1 following such
change, a written statement of the chief accounting officer or chief
financial officer of Company setting forth the differences (including any
differences that would affect any calculations relating to the financial
covenants set forth in subsection 7.6) which would have resulted if such
financial statements had been prepared without giving effect to such
change;
(vi) Accountants' Certification: together with each delivery of
consolidated financial statements of Company and its Subsidiaries pursuant
to subdivision (iii) above, a written statement by the independent
certified public accountants giving the report thereon (a) stating that
their audit examination has included a review of the terms of this
Agreement and the other Revolving Loan Documents as they relate to
accounting matters, (b) stating whether, in connection with their audit
examination, any condition or event that constitutes an Event of Default
or Potential Event of Default has come to their attention and, if such a
condition or event has come to their attention, specifying the nature and
period of existence thereof; provided that such accountants shall not be
liable by reason of any failure to obtain knowledge of any such Event of
Default or Potential Event of Default that would not be disclosed in the
course of their audit examination, and (c) stating that based on their
audit examination nothing has come to their attention that causes them to
believe either or both that the information contained in the certificates
delivered therewith
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pursuant to subdivision (iv) above is not correct or that the matters set
forth in the Compliance Certificates delivered therewith pursuant to
clause (b) of subdivision (iv) above for the applicable Fiscal Year are
not stated in accordance with the terms of this Agreement;
(vii) Accountants' Reports: promptly upon receipt thereof (unless
restricted by applicable professional standards), copies of all reports
submitted to Company by independent certified public accountants in
connection with each annual, interim or special audit of the financial
statements of Company and its Subsidiaries made by such accountants,
including any comment letter submitted by such accountants to management
in connection with their annual audit;
(viii) SEC Filings and Press Releases: promptly upon their becoming
available, copies of (a) all financial statements, reports, notices and
proxy statements sent or made available generally by Company to its
security holders or by any Subsidiary of Company to its security holders
other than Company or another Subsidiary of Company, (b) all regular and
periodic reports and all registration statements (other than on Form S-8
or a similar form) and prospectuses, if any, filed by Company or any of
its Subsidiaries with any securities exchange or with the Securities and
Exchange Commission or any governmental or private regulatory authority,
and (c) all press releases and other statements made available generally
by Company or any of its Subsidiaries to the public concerning material
developments in the business of Company or any of its Subsidiaries;
(ix) Events of Default, etc.: promptly upon any officer of Company
obtaining knowledge (a) of any condition or event that constitutes an
Event of Default or Potential Event of Default, or becoming aware that any
Lender has given any notice (other than to Administrative Agent) or taken
any other action with respect to a claimed Event of Default or Potential
Event of Default, (b) that any Person has given any notice to Company or
any of its Subsidiaries or taken any other action with respect to a
claimed default or event or condition of the type referred to in
subsection 8.2, (c) of any condition or event that would be required to be
disclosed in a current report filed by Company with the Securities and
Exchange Commission on Form 8-K (Items 1, 2, 4, 5 and 6 of such Form as in
effect on the date hereof) if Company were required to file such reports
under the Exchange Act, or (d) of the occurrence of any event or change
that has caused or evidences, either in any case or in the aggregate, a
Material Adverse Effect, an Officers' Certificate specifying the nature
and period of existence of such condition, event or change, or specifying
the notice given or action taken by any such Person and the nature of such
claimed Event of Default, Potential Event of Default, default, event or
condition, and what action Company has taken, is taking and proposes to
take with respect thereto;
(x) Litigation or Other Proceedings: (a) promptly upon any officer
of Company obtaining knowledge of (X) the institution of, or non-frivolous
threat of,
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any action, suit, proceeding (whether administrative, judicial or
otherwise), governmental investigation or arbitration against or affecting
Company or any of its Subsidiaries or any property of Company or any of
its Subsidiaries (collectively, "Proceedings") not previously disclosed in
writing by Company to Lenders or (Y) any material development in any
Proceeding that, in any case:
(1) if adversely determined, has a reasonable possibility of
giving rise to a Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the consummation of,
or to recover any damages or obtain relief as a result of, the
transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to Company to enable Lenders and their counsel to
evaluate such matters; and (b) within twenty days after the end of each
Fiscal Quarter, a schedule of all Proceedings involving an alleged
liability of, or claims against or affecting, Company or any of its
Subsidiaries equal to or greater than $500,000, and promptly after request
by Administrative Agent such other information as may be reasonably
requested by Administrative Agent to enable Administrative Agent and its
counsel to evaluate any of such Proceedings;
(xi) ERISA Events: promptly upon becoming aware of the occurrence of
or forthcoming occurrence of any ERISA Event, a written notice specifying
the nature thereof, what action Company, any of its Subsidiaries or any of
their respective ERISA Affiliates has taken, is taking or proposes to take
with respect thereto and, when known, any action taken or threatened by
the Internal Revenue Service, the Department of Labor or the PBGC with
respect thereto;
(xii) ERISA Notices: with reasonable promptness, copies of (a) each
Schedule B (Actuarial Information) to the annual report (Form 5500 Series)
filed by Company, any of its Subsidiaries or any of their respective ERISA
Affiliates with the Internal Revenue Service with respect to each Pension
Plan; (b) all notices received by Company or any of its Subsidiaries from
a Multiemployer Plan sponsor concerning an ERISA Event; and (c) copies of
such other documents or governmental reports or filings relating to any
Employee Benefit Plan as Administrative Agent shall reasonably request;
(xiii) Financial Plans: as soon as practicable and in any event no
later than 30 days prior to the beginning of each Fiscal Year, a
consolidated plan and financial forecast for such Fiscal Year and each
succeeding Fiscal Year through the Revolving Loan Commitment Termination
Date (the "Financial Plan" for such Fiscal Years), including (a)
forecasted consolidated balance sheets and forecasted consolidated
statements of income and cash flows of Company and its Subsidiaries for
each such
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Fiscal Year, together with pro forma Compliance Certificates for each such
Fiscal Year and an explanation of the assumptions on which such forecasts
are based, (b) forecasted consolidated statements of income and cash flows
of Company and its Subsidiaries for each month of the first such Fiscal
Year, together with an explanation of the assumptions on which such
forecasts are based, and (c) such other information and projections as any
Lender may reasonably request;
(xiv) Insurance: as soon as practicable and in any event by the last
day of each Fiscal Year, a report in form and substance satisfactory to
Administrative Agent outlining all material insurance coverage maintained
as of the date of such report by Company and its Subsidiaries and all
material insurance coverage planned to be maintained by Company and its
Subsidiaries in the immediately succeeding Fiscal Year;
(xv) Board of Directors: with reasonable promptness, written notice
of any change in the Board of Directors of Company;
(xvi) New Subsidiaries: promptly upon any Person becoming a
Subsidiary of Company, a written notice setting forth with respect to such
Person (a) the date on which such Person became a Subsidiary of Company
and (b) all of the data required to be set forth in Schedule 5.1 annexed
hereto with respect to all Subsidiaries of Company (it being understood
that such written notice shall be deemed to supplement Schedule 5.1
annexed hereto for all purposes of this Agreement);
(xvii) Material Contracts: promptly, and in any event within ten
Business Days after any Material Contract of Company or any of its
Subsidiaries is terminated or amended in a manner that is materially
adverse to Company or such Subsidiary, as the case may be, or any new
Material Contract is entered into, a written statement describing such
event with copies of such material amendments or new contracts, and an
explanation of any actions being taken with respect thereto;
(xviii) Borrowing Base Certificate: As soon as available and in any
event within ten Business Days after the last Business Day of each month
ending after the Closing Date, a Borrowing Base Certificate dated as of
the last Business Day of such month, together with any additional
schedules and other information that Administrative Agent may reasonably
request (it being understood that (a) Company, in addition to such monthly
Borrowing Base Certificates, may from time to time deliver to
Administrative Agent and Lenders, on any Business Day after the Closing
Date, a Borrowing Base Certificate dated as of a recent day, together with
any additional schedules and other information that Administrative Agent
may reasonably request, and (b) the most recent Borrowing Base Certificate
described in this subdivision (xix) that is delivered to Administrative
Agent shall be used in calculating the Borrowing Base as of any date of
determination); and
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(xix) Other Information: with reasonable promptness, such other
information and data with respect to Company or any of its Subsidiaries as
from time to time may be reasonably requested by any Lender.
6.2 Corporate Existence, etc.
Except as permitted under subsection 7.7, Company will, and will cause
each of its Subsidiaries to, at all times preserve and keep in full force and
effect its corporate existence and all rights and franchises material to its
business; provided, however that neither Company nor any of its Subsidiaries
shall be required to preserve any such right or franchise if the Board of
Directors of Company or such Subsidiary shall determine that the preservation
thereof is no longer desirable in the conduct of the business of Company or such
Subsidiary, as the case may be, and that the loss thereof is not disadvantageous
in any material respect to Company, such Subsidiary or Lenders.
6.3 Payment of Taxes and Claims; Tax Consolidation.
A. Company will, and will cause each of its Subsidiaries to, pay all
material taxes, assessments and other governmental charges imposed upon it or
any of its properties or assets or in respect of any of its income, businesses
or franchises before any penalty accrues thereon, and all claims (including
claims for labor, services, materials and supplies) for sums that have become
due and payable and that by law have or may become a Lien upon any of its
properties or assets, prior to the time when any penalty or fine shall be
incurred with respect thereto; provided that no such charge or claim need be
paid if it is being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted, so long as (1) such reserve or other
appropriate provision, if any, as shall be required in conformity with GAAP
shall have been made therefor and (2) in the case of a charge or claim which has
or may become a Lien against any of the Collateral, such contest proceedings
conclusively operate to stay the sale of any portion of the Collateral to
satisfy such charge or claim.
B. Company will not, nor will it permit any of its Subsidiaries to, file
or consent to the filing of any consolidated income tax return with any Person
(other than Company or any of its Subsidiaries).
6.4 Maintenance of Properties; Insurance; Application of Net
Insurance/Condemnation Proceeds.
A. Maintenance of Properties. Company will, and will cause each of its
Subsidiaries to, maintain or cause to be maintained in good repair, working
order and condition, ordinary wear and tear excepted, all material properties
used or useful in the business of Company and its Subsidiaries (including all
Intellectual Property) and from time to time will make or cause to be made all
appropriate repairs, renewals and replacements
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thereof except where the failure to maintain such properties could not
reasonably be expected in any individual case or in the aggregate to have a
Material Adverse Effect.
B. Insurance. Company will maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability insurance, third
party property damage insurance, business interruption insurance and casualty
insurance with respect to liabilities, losses or damage in respect of the
assets, properties and businesses of Company and its Subsidiaries as may
customarily be carried or maintained under similar circumstances by corporations
of established reputation engaged in similar businesses, in each case in such
amounts (giving effect to self-insurance), with such deductibles, covering such
risks and otherwise on such terms and conditions as shall be customary for
corporations similarly situated in the industry. Without limiting the generality
of the foregoing, Company will maintain or cause to be maintained (i) flood
insurance with respect to each Flood Hazard Property that is located in a
community that participates in the National Flood Insurance Program, in each
case in compliance with any applicable regulations of the Board of Governors of
the Federal Reserve System, and (ii) replacement value casualty insurance on the
Collateral under such policies of insurance, with such insurance companies, in
such amounts, with such deductibles, and covering such risks as are at all times
satisfactory to Administrative Agent in its commercially reasonable judgment.
Each such policy of insurance shall (a) name Collateral Agent for the benefit of
Secured Parties as an additional insured thereunder as its interests may appear
and (b) in the case of each business interruption and casualty insurance policy,
contain a loss payable clause or endorsement, satisfactory in form and substance
to Collateral Agent, that names Collateral Agent for the benefit of Secured
Parties as the loss payee thereunder for any covered loss in excess of
$1,500,000 and provides for at least 30 days prior written notice to
Administrative Agent of any modification or cancellation of such policy.
C. Application of Net Insurance/Condemnation Proceeds.
(i) Business Interruption Insurance. Upon receipt by Company or any
of its Subsidiaries of any business interruption insurance proceeds
constituting Net Insurance/Condemnation Proceeds, (a) so long as no Event
of Default shall have occurred and be continuing, Company or such
Subsidiary may retain and apply such Net Insurance/Condemnation Proceeds
for working capital purposes, and (b) if an Event of Default shall have
occurred and be continuing, Company shall apply an amount equal to such
Net Insurance/Condemnation Proceeds to prepay AXELs under the AXEL Credit
Agreement and the Revolving Loans (and/or the Revolving Loan Commitments
shall be reduced) as provided in subsection 2.4A(iii)(b);
(ii) Casualty Insurance/Condemnation Proceeds. Upon receipt by
Company or any of its Subsidiaries of any Net Insurance/Condemnation
Proceeds other than from business interruption insurance, (a) so long as
no Event of Default shall have occurred and be continuing, Company shall,
or shall cause one or more of its Subsidiaries to, (1) subject to clause
(iv) below, promptly and diligently and in
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any event within six months of receipt apply such Net
Insurance/Condemnation Proceeds to pay or reimburse the costs of
repairing, restoring or replacing the assets in respect of which such Net
Insurance/Condemnation Proceeds were received or (2) to the extent not so
applied or applied pursuant to clause (iv) below within six months of
receipt by Company or any of its Subsidiaries, to prepay the AXELs under
the AXEL Credit Agreement and the Revolving Loans (and/or the Revolving
Loan Commitments shall be reduced) as provided in subsection 2.4A(iii)(b),
and (b) if an Event of Default shall have occurred and be continuing,
Company shall apply an amount equal to such Net Insurance/Condemnation
Proceeds to prepay the AXELs under the AXEL Credit Agreement and the
Revolving Loans (and/or the Revolving Loan Commitments shall be reduced)
as provided in subsection 2.4A(iii)(b).
(iii) Net Insurance/Condemnation Proceeds Received by Collateral
Agent. Upon receipt by Collateral Agent of any Net Insurance/Condemnation
Proceeds as loss payee, such loss proceeds shall be held and applied in
accordance with the terms of the Intercreditor Agreement.
(iv) Reinvestment of Insurance Proceeds. So long as no Event of
Default or Potential Event of Default shall have occurred and be
continuing, Company and its Subsidiaries may reinvest in the business of
Company and its Subsidiaries up to $1,000,000 per year of Net
Insurance/Condemnation Proceeds recovered by Company or any of its
Subsidiaries provided that such funds are reinvested within six months of
receipt by Company or any of its Subsidiaries.
6.5 Inspection Rights; Audits of Inventory and Accounts Receivable; Lender
Meeting.
A. Inspection Rights. Company shall, and shall cause each of its
Subsidiaries to, permit any authorized representatives designated by any Lender
to visit and inspect any of the properties of Company or of any of its
Subsidiaries, to inspect, copy and take extracts from its and their financial
and accounting records, and to discuss its and their affairs, finances and
accounts with its and their officers and independent public accountants
(provided that Company may, if it so chooses, be present at or participate in
any such discussion), all upon reasonable notice and at such reasonable times
during normal business hours and as often as may reasonably be requested.
B. Audits of Inventory and Accounts Receivable. Company shall, and shall
cause each of its Subsidiaries to, permit any authorized representatives
designated by Administrative Agent to conduct audits of all Inventory and
accounts receivable of Loan Parties at any time and from time to time after the
Closing Date, such audit to be in form and substance reasonably acceptable to
Administrative Agent, all upon reasonable notice and at such reasonable times
during normal business hours as may reasonably be requested, provided that so
long as no Event of Default shall exist and be continuing Administrative Agent
may not conduct more than one such audit in any twelve month period.
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C. Lender Meeting. Company will, upon the request of Arranger,
Administrative Agent or Requisite Lenders, participate in a meeting of
Administrative Agent and Lenders once during each Fiscal Year to be held at
Company's corporate offices (or at such other location as may be agreed to by
Company and Administrative Agent) at such time as may be agreed to by Company
and Administrative Agent.
6.6 Compliance with Laws, etc.
Company shall comply, and shall cause each of its Subsidiaries and all
other Persons on or occupying any Facilities to comply, with the requirements of
all applicable laws, rules, regulations and orders of any governmental authority
(including all Environmental Laws), noncompliance with which could reasonably be
expected to cause, individually or in the aggregate, a Material Adverse Effect.
6.7 Environmental Review and Investigation, Disclosure, Etc.; Company's
Actions Regarding Hazardous Materials Activities, Environmental Claims and
Violations of Environmental Laws.
A. Environmental Review and Investigation. Company agrees that
Administrative Agent may, from time to time and in its reasonable discretion,
(i) retain, at Company's expense, an independent professional consultant to
review any environmental audits, investigations, analyses and reports relating
to Hazardous Materials prepared by or for Company and (ii) conduct its own
investigation of any Facility; provided that, in the case of any Facility no
longer owned, leased, operated or used by Company or any of its Subsidiaries,
Company shall only be obligated to use its good faith and reasonable efforts to
obtain permission for Administrative Agent's professional consultant to conduct
an investigation of such Facility. For purposes of conducting such a review
and/or investigation, Company hereby grants to Administrative Agent and its
agents, employees, consultants and contractors the right to enter into or onto
any Facilities currently owned, leased, operated or used by Company or any of
its Subsidiaries and to perform such tests on such property (including taking
samples of soil, groundwater and suspected asbestos-containing materials) as are
reasonably necessary in connection therewith. Any such investigation of any
Facility shall be conducted, unless otherwise agreed to by Company and
Administrative Agent, during normal business hours and, to the extent reasonably
practicable, shall be conducted so as not to interfere with the ongoing
operations at such Facility or to cause any damage or loss to any property at
such Facility. Company and Administrative Agent hereby acknowledge and agree
that any report of any investigation conducted at the request of Administrative
Agent pursuant to this subsection 6.7A will be obtained and shall be used by
Administrative Agent and Lenders for the purposes of Lenders' internal credit
decisions, to monitor and police the Revolving Loans and to protect Lenders'
security interests, if any, created by the Revolving Loan Documents.
Administrative Agent agrees to deliver a copy of any such report to Company with
the understanding that Company acknowledges and agrees that (x) it will
indemnify and hold harmless Administrative Agent and each Lender from any costs,
losses or liabilities relating to
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Company's use of or reliance on such report, (y) neither Administrative Agent
nor any Lender makes any representation or warranty with respect to such
report, and (z) by delivering such report to Company, neither Administrative
Agent nor any Lender is requiring or recommending the implementation of any
suggestions or recommendations contained in such report.
B. Environmental Disclosure. Company will deliver to Administrative Agent
and Lenders:
(i) Environmental Audits and Reports. As soon as practicable
following receipt thereof, copies of all environmental audits,
investigations, analyses and reports of any kind or character, whether
prepared by personnel of Company or any of its Subsidiaries or by
independent consultants, governmental authorities or any other Persons,
with respect to significant environmental matters at any Facility or with
respect to any Environmental Claims;
(ii) Notice of Certain Releases, Remedial Actions, Etc. Promptly
upon the occurrence thereof, written notice describing in reasonable
detail (a) any Release required to be reported by Company or any of its
Subsidiaries to any federal, state or local governmental or regulatory
agency under any applicable Environmental Laws, (b) any remedial action
taken by Company or any of its Subsidiaries or any other Person of which
Company has knowledge in response to (1) any Hazardous Materials
Activities the existence of which has a reasonable possibility of
resulting in one or more Environmental Claims having, individually or in
the aggregate, a Material Adverse Effect, or (2) any Environmental Claims
that, individually or in the aggregate, have a reasonable possibility of
resulting in a Material Adverse Effect, and (c) Company's discovery of any
occurrence or condition on any real property adjoining or in the vicinity
of any Facility that reasonably could be expected to cause such Facility
or any part thereof to be subject to any material restrictions on the
ownership, occupancy, transferability or use thereof under any
Environmental Laws.
(iii) Written Communications Regarding Environmental Claims,
Releases, Etc. As soon as practicable following the sending or receipt
thereof,by Company or any of its Subsidiaries, a copy of any and all
written communications with respect to (a) any Environmental Claims that,
individually or in the aggregate, are reasonably expected to have a
Material Adverse Effect, (b) any Release required to be reported by
Company or any of its Subsidiaries to any federal, state or local
governmental or regulatory agency, and (c) any request made to Company or
any of its Subsidiaries for information from any governmental agency that
suggests such agency is investigating whether Company or any of its
Subsidiaries may be potentially responsible for any Hazardous Materials
Activity.
(iv) Notice of Certain Proposed Actions Having Environmental Impact.
Prompt written notice describing in reasonable detail (a) any proposed
acquisition
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of stock, assets, or property by Company or any of its Subsidiaries that
could reasonably be expected to (1) expose Company or any of its
Subsidiaries to, or result in, Environmental Claims that would have,
individually or in the aggregate, a Material Adverse Effect or (2) result
in Company or any of its Subsidiaries failing to maintain in full force
and effect all material Governmental Authorizations required under any
Environmental Laws for their respective operations and (b) any proposed
action to be taken by Company or any of its Subsidiaries to modify current
operations in a manner that could reasonably be expected to subject
Company or any of its Subsidiaries to any additional obligations or
requirements under any Environmental Laws.
(v) Other Information. With reasonable promptness, such other
documents and information as from time to time may be reasonably requested
by Administrative Agent in relation to any matters disclosed pursuant to
this subsection 6.7.
C. Company's Actions Regarding Hazardous Materials Activities,
Environmental Claims and Violations of Environmental Laws.
(i) Remedial Actions Relating to Hazardous Materials Activities.
Company shall promptly undertake, and shall cause each of its Subsidiaries
promptly to undertake, any and all investigations, studies, sampling,
testing, abatement, cleanup, removal, remediation or other response
actions necessary to remove, remediate, clean up or ▇▇▇▇▇ any Hazardous
Materials Activity on, under or about any Facility that is in violation of
any Environmental Laws or that presents a material risk of giving rise to
an Environmental Claim. In the event Company or any of its Subsidiaries
undertakes any such action with respect to any Hazardous Materials,
Company or such Subsidiary shall conduct and complete such action in
compliance with all applicable Environmental Laws and in accordance with
the policies, orders and directives of all federal, state and local
governmental authorities except when, and only to the extent that,
Company's or such Subsidiary's liability with respect to such Hazardous
Materials Activity is being contested in good faith by Company or such
Subsidiary.
(ii) Actions with Respect to Environmental Claims and Violations of
Environmental Laws. Company shall promptly take, and shall cause each of
its Subsidiaries promptly to take, any and all actions necessary to (i)
cure any violation of applicable Environmental Laws by Company or its
Subsidiaries and (ii) make an appropriate response to any Environmental
Claim against Company or any of its Subsidiaries and discharge any
obligations it may have to any Person thereunder.
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6.8 Execution of Subsidiary Guaranty and Personal Property Collateral
Documents by Certain Subsidiaries and Future Subsidiaries.
A. Execution of Subsidiary Guaranty and Personal Property Collateral
Documents. In the event that any Domestic Subsidiary existing on the Closing
Date that has not previously executed the Subsidiary Guaranty hereafter owns or
acquires assets with an aggregate fair market value (without netting such fair
market value against any liability of such Subsidiary) exceeding $500,000, or in
the event that any Person becomes a Material Domestic Subsidiary after the date
hereof, Company will promptly notify Collateral Agent of that fact and cause
such Subsidiary to execute and deliver to Collateral Agent a counterpart of the
Subsidiary Guaranty and a Subsidiary Pledge Agreement and a Subsidiary Security
Agreement and to take all such further actions and execute all such further
documents and instruments (including actions, documents and instruments
comparable to those described in subsection 4.1I) as may be necessary or, in the
opinion of Collateral Agent, desirable to create in favor of Collateral Agent,
for the benefit of Secured Parties, a valid and perfected First Priority Lien on
all of the personal and mixed property assets of such Subsidiary described in
the applicable forms of Collateral Documents.
B. Subsidiary Charter Documents, Legal Opinions, Etc. Company shall
deliver to Collateral Agent, together with such Revolving Loan Documents, (i)
certified copies of such Subsidiary's Certificate or Articles of Incorporation,
together with a good standing certificate from the Secretary of State of the
jurisdiction of its incorporation and each other state in which such Person is
qualified as a foreign corporation to do business and, to the extent generally
available, a certificate or other evidence of good standing as to payment of any
applicable franchise or similar taxes from the appropriate taxing authority of
each of such jurisdictions, each to be dated a recent date prior to their
delivery to Collateral Agent, (ii) a copy of such Subsidiary's Bylaws, certified
by its corporate secretary or an assistant secretary as of a recent date prior
to their delivery to Collateral Agent, (iii) a certificate executed by the
secretary or an assistant secretary of such Subsidiary as to (a) the fact that
the attached resolutions of the Board of Directors of such Subsidiary approving
and authorizing the execution, delivery and performance of such Revolving Loan
Documents are in full force and effect and have not been modified or amended and
(b) the incumbency and signatures of the officers of such Subsidiary executing
such Revolving Loan Documents, and (iv) a favorable opinion of counsel to such
Subsidiary, in form and substance satisfactory to Collateral Agent and its
counsel, as to (a) the due organization and good standing of such Subsidiary,
(b) the due authorization, execution and delivery by such Subsidiary of such
Revolving Loan Documents, (c) the enforceability of such Revolving Loan
Documents against such Subsidiary, (d) such other matters (including matters
relating to the creation and perfection of Liens in any Collateral pursuant to
such Revolving Loan Documents) as Collateral Agent may reasonably request, all
of the foregoing to be satisfactory in form and substance to Administrative
Agent and its counsel.
C. Foreign Subsidiary Loan Documents. In the event that any Foreign
Subsidiary existing on the Closing Date whose shares have not been pledged
pursuant to an
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Auxiliary Pledge Agreement owns or acquires assets with an aggregate fair market
value (without netting such fair market value against any liability of such
Subsidiary) exceeding $1,500,000, or in the event that any person becomes a
Foreign Subsidiary which owns assets with an aggregate fair market value
(without netting such fair market value against any liability of such
Subsidiary) exceeding $1,500,000, Company will promptly notify Collateral Agent
of that fact and shall or cause the applicable subsidiary which owns equity in
such Foreign Subsidiary to execute and deliver to Collateral Agent an Auxiliary
Pledge Agreement in form and substance satisfactory to Collateral Agent; to take
all such further actions and execute such further documents and instruments as
may be necessary or, in the opinion of Collateral Agent reasonably desirable, to
perfect a Lien on the equity interests of such Foreign Subsidiary for the
benefit of Secured Parties and to deliver to Collateral Agent an opinion of
counsel (which counsel shall be reasonably acceptable to Collateral Agent) as to
the enforceability of the Auxiliary Pledge Agreement under the laws of such
Foreign Subsidiary's jurisdiction of organization and such other matters as
Collateral Agent may reasonably request (including as to the perfection of liens
on such equity interests).
D. If at any time JCS Realty acquires any personal property assets
with an aggregate fair market value (without netting such fair market value
against any liability of JCS Realty) in excess of $500,000, Company will
promptly notify Collateral Agent of that fact and cause JCS Realty to execute
and deliver all documents and to take all such further actions as may be
necessary or, in the opinion of Collateral Agent, desirable to create in favor
of Collateral Agent, for the benefit of Secured Parties, a valid and perfected
First Priority Lien on such property in all relevant jurisdictions.
6.9 Conforming Leasehold Interests; Matters Relating to Real Property
Collateral.
A. Conforming Leasehold Interests. If Company or any of its Subsidiaries
acquires any Leasehold Property, Company shall, or shall cause such Subsidiary
to, use its reasonable and good faith efforts (without requiring Company or such
Subsidiary to relinquish any material rights or incur any material obligations
or to expend more than a nominal amount of money over and above the
reimbursement, if required, of the Landlord's reasonable out-of-pocket costs,
including attorneys' fees) to cause such Leasehold Property to be a Conforming
Leasehold Interest.
B. Mortgages, Etc. From and after the Closing Date, in the event that (i)
Company or any Subsidiary Guarantor acquires any fee interest in real property
or any Material Leasehold Property, (ii) with respect to any Material Leasehold
Property or any real property in which Company has a fee interest in on or prior
to the Closing Date, any first priority mortgage existing on or prior to the
Closing Date on such property is removed or (iii) at the time any Person becomes
a Subsidiary Guarantor, such Person owns or holds any fee interest in real
property or any Material Leasehold Property, in all cases excluding any such
Real Property Asset the encumbrancing of which requires the consent of any
applicable lessor or (in the case of clause (iii) above) then-existing senior
lienholder, where Company and its Subsidiaries are unable to obtain such
lessor's or senior lienholder's
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consent (any such non-excluded Real Property Asset described in the foregoing
clause (i), (ii) or (iii) being a "Mortgaged Property"), Company or such
Subsidiary Guarantor shall promptly notify Collateral Agent, and shall deliver
upon Collateral Agent's written request, as soon as practicable after such
Person acquires such Mortgaged Property or becomes a Subsidiary Guarantor, as
the case may be, the following:
(i) Mortgage. A fully executed and notarized Mortgage duly recorded
in all appropriate places in all applicable jurisdictions, encumbering the
interest of such Loan Party in such Mortgaged Property;
(ii) Opinions of Counsel. (a) A favorable opinion of counsel to such
Loan Party, in form and substance satisfactory to Collateral Agent and its
counsel, as to the due authorization, execution and delivery by such Loan
Party of such Mortgage and such other matters as Collateral Agent may
reasonably request, and (b) if required by Collateral Agent, an opinion of
counsel (which counsel shall be reasonably satisfactory to Collateral
Agent) in the state in which such Mortgaged Property is located with
respect to the enforceability of such Mortgage and such other matters
(including any matters governed by the laws of such state regarding
personal property security interests in respect of any Collateral) as
Collateral Agent may reasonably request, in each case in form and
substance reasonably satisfactory to Collateral Agent;
(iii) Landlord Consent and Estoppel; Recorded Leasehold Interest. In
the case of a Mortgaged Property consisting of a Leasehold Property, (a)
if such Leasehold Property is holding or will hold inventory or equipment
with an aggregate fair market value exceeding $500,000, a Landlord Consent
and Estoppel provided that Company shall only be required to use
reasonable and good faith efforts to obtain such Landlord Consent and
Estoppel and in no event shall Company be obligated to pay any fee, charge
or other consideration to any landlord in order to obtain such Landlord
Consent and Estoppel, other than, if required, the landlord's reasonable
out-of-pocket costs, including attorneys' fees and (b) if such Leasehold
Property is a Recorded Leasehold Interest, evidence to that effect
(iv) Title Insurance. (a) If reasonably requested by Collateral
Agent, an ALTA mortgagee title insurance policy or an unconditional
commitment therefor (a "Mortgage Policy") issued by the Title Company with
respect to such Mortgaged Property, in an amount satisfactory to
Collateral Agent, insuring fee simple title to, or a valid leasehold
interest in, such Mortgaged Property vested in such Loan Party and
assuring Collateral Agent that such Mortgage creates a valid and
enforceable First Priority mortgage Lien on such Mortgaged Property,
subject only to, if available in the state in which such Mortgaged
Property is located, a standard survey exception and to Permitted
Encumbrances, which Mortgage Policy (1) shall include, if available in the
state in which such Mortgaged Property is located, an endorsement for
mechanics' liens, for future advances under this Agreement and for any
other matters
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reasonably requested by Collateral Agent and (2) shall provide for such
affirmative insurance and such reinsurance as Collateral Agent may
reasonably request, all of the foregoing in form and substance reasonably
satisfactory to Collateral Agent; and (b) evidence satisfactory to
Collateral Agent that such Loan Party has (i) delivered to the Title
Company all certificates and affidavits customarily required by the Title
Company in connection with the issuance of the Mortgage Policy and (ii)
paid to the Title Company or to the appropriate governmental authorities
all expenses and premiums of the Title Company in connection with the
issuance of the Mortgage Policy and all recording and stamp taxes
(including mortgage recording and intangible taxes) payable in connection
with recording the Mortgage in the appropriate real estate records;
provided however, that Administrative Agent shall allow for such
reasonable revisions to the applicable mortgage and shall otherwise take
such steps as are reasonable and customary to minimize recording, mortgage
recording, stamp, documentary and intangible taxes, at Company's cost;
(v) Title Report. If no Mortgage Policy is required with respect to
such Mortgaged Property, a title report issued by the Title Company with
respect thereto, dated not more than 30 days prior to the date such
Mortgage is to be recorded and satisfactory in form and substance to
Collateral Agent;
(vi) Copies of Documents Relating to Title Exceptions. Copies of all
recorded documents listed as exceptions to title or otherwise referred to
in the Mortgage Policy or title report delivered pursuant to clause (iv)
or (v) above;
(vii) Matters Relating to Flood Hazard Properties. (a) Evidence,
which may be in the form of a letter from an insurance broker or a
municipal engineer, as to (1) whether such Mortgaged Property is a Flood
Hazard Property and (2) if so, whether the community in which such Flood
Hazard Property is located is participating in the National Flood
Insurance Program, (b) if such Mortgaged Property is a Flood Hazard
Property, such Loan Party's written acknowledgement of receipt of written
notification from Collateral Agent (1) that such Mortgaged Property is a
Flood Hazard Property and (2) as to whether the community in which such
Flood Hazard Property is located is participating in the National Flood
Insurance Program, and (c) in the event such Mortgaged Property is a Flood
Hazard Property that is located in a community that participates in the
National Flood Insurance Program, evidence that Company has obtained flood
insurance in respect of such Flood Hazard Property to the extent required
under the applicable regulations of the Board of Governors of the Federal
Reserve System; and
(viii) Environmental Audit. If required by Collateral Agent, reports
and other information, in form, scope and substance satisfactory to
Collateral Agent and prepared by environmental consultants satisfactory to
Collateral Agent, concerning any environmental hazards or liabilities to
which Company or any of its Subsidiaries may be subject with respect to
such Mortgaged Property.
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C. Real Estate Appraisals. Company shall, and shall cause each of its
Subsidiaries to, permit an independent real estate appraiser satisfactory to
Collateral Agent, upon reasonable notice, to visit and inspect any Additional
Mortgaged Property for the purpose of preparing an appraisal of such Mortgaged
Property satisfying the requirements of any applicable laws and regulations (in
each case to the extent required under such laws and regulations as determined
by Collateral Agent in its discretion).
6.10 Interest Rate Protection.
At all times after the date which is 45 days after the Closing Date,
Company shall maintain in effect one or more Interest Rate Agreements with
respect to the AXELs and the Revolving Loans, each such Interest Rate Agreement
to be for a term of not less than three years from the Closing Date and in form
and substance reasonably satisfactory to Administrative Agent, which Interest
Rate Agreements shall effectively limit the Unadjusted Eurodollar Rate Component
(as hereinafter defined) of the interest costs to Company (i) with respect to an
aggregate notional principal amount of not less than 25% of the aggregate
principal amount of the AXELs outstanding on the Closing Date (based on the
assumption that such notional principal amount was a Eurodollar Rate Loan (as
defined under the AXEL Credit Agreement) with an Interest Period (as defined
under the AXEL Credit Agreement) of three months) to a rate equal to not more
than 9% per annum and (ii) with respect to an aggregate notional principal
amount of not less than 25% of the aggregate principal amount of the AXELs
outstanding on the Closing Date (based on the assumption that such notional
principal amount was a Eurodollar Rate Loan (as defined under the AXEL Credit
Agreement) with an Interest Period (as defined under the AXEL Credit Agreement)
of three months) to a rate equal to not more than 10% per annum. For purposes of
this subsection 6.10, the term "Unadjusted Eurodollar Rate Component" means that
component of the interest costs to Company under the AXEL Credit Agreement in
respect of a Eurodollar Rate Loan that is based upon the rate obtained pursuant
to the definition of Adjusted Eurodollar Rate under the AXEL Credit Agreement
without giving effect to the last paragraph thereof.
6.11 Cash Management Systems.
Company shall establish and thereafter maintain a cash management system
for the Loan Parties in form and substance reasonably satisfactory to the
Arranger and the Administrative Agent. The terms and conditions of such cash
management system shall be as set forth in Schedule 6.11 annexed hereto.
6.12 Trademarks and Patents.
If Company or any of its Subsidiaries acquires any material patents,
trademarks or copyrights, Company shall promptly notify the Collateral Agent of
that fact and, if requested by Administrative Agent, Company shall, or cause the
applicable Subsidiary to, execute and deliver to Collateral Agent supplemental
security agreements and take such other actions
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as the Collateral Agent may reasonably request to create in favor of Collateral
Agent, for the benefit of Secured Parties, a valid and perfected First Priority
Lien on such patents, trademarks or copyrights.
SECTION 7.
COMPANY'S NEGATIVE COVENANTS
Company covenants and agrees that, so long as any of the Revolving Loan
Commitments hereunder shall remain in effect and until payment in full of all of
the Revolving Loans and other Obligations and the cancellation or expiration of
all Letters of Credit, unless Requisite Lenders shall otherwise give prior
written consent, Company shall perform, and shall cause each of its Subsidiaries
to perform, all covenants in this Section 7.
7.1 Indebtedness.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or guaranty, or otherwise become
or remain directly or indirectly liable with respect to, any Indebtedness,
except:
(i) Company may become and remain liable with respect to the
Obligations;
(ii) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations permitted by subsection 7.4 and, upon
any matured obligations actually arising pursuant thereto, the
Indebtedness corresponding to the Contingent Obligations so extinguished;
(iii) Company may become and remain liable with respect to
Indebtedness to any of its wholly-owned Subsidiaries, and any wholly-owned
Subsidiary of Company may become and remain liable with respect to
Indebtedness to Company or any other wholly-owned Subsidiary of Company;
provided that (a) all such intercompany Indebtedness shall be evidenced by
promissory notes subject to a first priority perfected pledge in favor of
Lenders, (b) all such intercompany Indebtedness owed by Company to any of
its Subsidiaries shall be subordinated in right of payment to the payment
in full of the Obligations pursuant to the terms of the applicable
promissory notes or an intercompany subordination agreement, (c) any
payment by any Subsidiary of Company under any guaranty of the Obligations
shall result in a pro tanto reduction of the amount of any intercompany
Indebtedness owed by such Subsidiary to Company or to any of its
Subsidiaries for whose benefit such payment is made, and (d) the aggregate
principal amount of all Indebtedness of all Foreign Subsidiaries to
Company and its Domestic Subsidiaries shall not exceed $2,000,000 at any
time outstanding;
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(iv) Company and its Subsidiaries, as applicable, may remain liable
with respect to Indebtedness described in Schedule 7.1 annexed hereto;
(v) Company may become and remain liable with respect to
Indebtedness evidenced by the Senior Subordinated Notes in an amount not
to exceed $110,000,000;
(vi) Company and its Subsidiaries may become and remain liable with
respect to Indebtedness in an aggregate amount not to exceed $5,000,000 at
any time outstanding in respect of (i) purchase money Indebtedness
incurred to finance the purchase price of specific assets and Capital
Leases so long as, upon default, the holder of such Indebtedness may seek
recourse or payment against Company and its Subsidiaries only through the
return or sale of the assets financed thereby and (ii) Indebtedness of a
person which becomes a Subsidiary, provided such Indebtedness is recourse
only to such Subsidiary, and neither Company nor any of its other
Subsidiaries have any obligations in respect thereof;
(vii) Company's Foreign Subsidiaries may become and remain liable
with respect to Indebtedness in an aggregate amount not to exceed
$2,000,000 outstanding at any time under any overdraft facility with a
foreign bank used to fund working capital obligations of such Foreign
Subsidiary;
(viii) Company may become and remain liable for additional unsecured
subordinated Indebtedness with substantially the same terms as the
Subordinated Notes the net proceeds of which are used solely to fund
Permitted Business Acquisitions provided that (a) no Event of Default or
Potential Event of Default shall exist and be continuing at the time of
the incurrence thereof, (b) the aggregate amount of such Indebtedness
shall not exceed $40,000,000 at any time, (c) each dollar of Indebtedness
incurred under this clause (viii) is matched with proceeds of additional
Common Stock of Company either issued in a private issuance after the
Closing Date or transferred to the seller as a portion of the
consideration for such sale, which are invested substantially concurrently
in such Permitted Business Acquisition, at a ratio of not more than 1.33:1
(additional Indebtedness to additional equity without giving effect to any
equity counted under clause (x)(b)(3) of this subsection 7.1), (d) after
giving effect to the Permitted Business Acquisition being financed with
such Indebtedness (and the incurrence of such Indebtedness), the
Consolidated Leverage Ratio on a Pro Forma Basis for the four (4) Fiscal
Quarters most recently completed prior to the date of such incurrence
shall not exceed 5.5 to 1.0 (or such lesser ratio in effect as of the end
of the most recently ended Fiscal Quarter under subsection 7.6C), and (e)
Company shall deliver to Administrative Agent at least 10 days prior to
such incurrence an Officer's Certificate certifying the matters set forth
in clauses (a)-(d) above.
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\
(ix) Company and its Subsidiaries may become and remain liable for
any Indebtedness replacing or refinancing any Indebtedness permitted under
clauses (iv), (vi), (vii) or (xi) of this subsection 7.1 provided that (a)
the principal amount of such Indebtedness does not exceed the principal
amount of the Indebtedness being refinanced or replaced, (b) such
Indebtedness has a final maturity on or later than the final maturity of
the Indebtedness being refinanced or replaced and a weighted average life
to maturity equal to or greater than the weighted average life to maturity
of the Indebtedness being refinanced or replaced, (c) the interest rate
(or, where applicable, interest rate margin) and fees applicable to such
Indebtedness is not higher than those applicable to the Indebtedness being
refinanced or replaced, (d) the covenants, defaults and prepayment
provisions, taken as a whole, are not more burdensome or restrictive on
the Company and its Subsidiaries than those applicable to the Indebtedness
being refinanced or replaced, (e) such Indebtedness is secured only by
Liens permitted under Section 7.2 for the Indebtedness being refinanced or
replaced; (f) such Indebtedness is incurred by Company or the Restricted
Subsidiary who is the obligor on the Indebtedness being refinanced or
replaced and (g) if the Indebtedness being refinanced or replaced is
subordinated to the Obligations, such Indebtedness is subordinated to the
Obligations on terms not less favorable to the Lenders than those
applicable to the Indebtedness being refinanced or replaced;
(x) Company may become and remain liable for (a) AXELs under the
AXEL Credit Agreement in an aggregate principal amount not to exceed
$117,000,000 at any time (reduced by any principal payments actually made
thereon) and (b) additional AXELs under the AXEL Credit Agreement in an
aggregate principal amount not to exceed $10,000,000, provided in the case
of this clause (b) that (1) no Event of Default or Potential Event of
Default shall exist and be continuing at the time of the incurrence of
such AXELs, (2) the net proceeds of such AXELs are used solely to fund
Permitted Business Acquisitions, (3) each dollar of Indebtedness incurred
under this clause (x)(b) is matched with proceeds of additional Common
Stock of Company either issued in a private issuance after the Closing
Date or transferred to the seller as a portion of the consideration for
such sale, which are invested substantially concurrently in such Permitted
Business Acquisition, at a ratio of not less than 3.5:1 (additional equity
to additional AXELs without giving effect to any equity counted under
clause (viii)(c) of this subsection 7.1), (4) after giving effect to the
Permitted Business Acquisition being financed with such Indebtedness (and
the incurrence of such Indebtedness), the Consolidated Leverage Ratio on a
Pro Forma Basis for the four (4) Fiscal Quarters most recently completed
prior to the date of such incurrence shall not exceed 5.5 to 1.0 (or such
lesser ratio in effect as of the end of the most recently ended Fiscal
Quarter under subsection 7.6C), and (5) Company shall deliver to
Administrative Agent at least 10 days prior to such incurrence an
Officer's Certificate certifying the matters set forth in clauses (1)-(4)
above; and
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(xi) Company and its Subsidiaries may become and remain liable with
respect to other Indebtedness in an aggregate principal amount not to
exceed $5,000,000 at any time outstanding.
7.2 Liens and Related Matters.
A. Prohibition on Liens. Company shall not, and shall not permit any of
its Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of Company or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the Uniform Commercial Code of any State or under any similar
recording or notice statute, except:
(i) Permitted Encumbrances;
(ii) Liens granted pursuant to the Collateral Documents securing the
Obligations and obligations of Company and its Subsidiaries under the AXEL
Loan Documents;
(iii) Liens described in Schedule 7.2 annexed hereto;
(iv) Indebtedness incurred under subsection 7.1(vi) may be secured
by Liens on assets acquired or financed through the incurrence of such
Indebtedness or on the assets of the newly acquired Subsidiary, provided
that such Indebtedness was not created in contemplation of the acquisition
of such Subsidiary by Company or one of its Subsidiaries;
(v) Other Liens securing Indebtedness in an aggregate amount not to
exceed $5,000,000 at any time outstanding.
B. Equitable Lien in Favor of Lenders. If Company or any of its
Subsidiaries shall create or assume any Lien upon any of its properties or
assets, whether now owned or hereafter acquired, other than Liens excepted by
the provisions of subsection 7.2A, it shall make or cause to be made effective
provision whereby the Obligations will be secured by such Lien equally and
ratably with any and all other Indebtedness secured thereby as long as any such
Indebtedness shall be so secured; provided that, notwithstanding the foregoing,
this covenant shall not be construed as a consent by Requisite Lenders to the
creation or assumption of any such Lien not permitted by the provisions of
subsection 7.2A.
C. No Further Negative Pledges. Except with respect to specific property
encumbered to secure payment of particular Indebtedness or to be sold pursuant
to an executed agreement with respect to an Asset Sale, neither Company nor any
of its Subsidiaries shall
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enter into any agreement (other than the Senior Subordinated Note Indenture or
any other agreement prohibiting only the creation of Liens securing Subordinated
Indebtedness and the AXEL Credit Agreement) prohibiting the creation or
assumption of any Lien upon any of its properties or assets, whether now owned
or hereafter acquired.
D. No Restrictions on Subsidiary Distributions to Company or Other
Subsidiaries. Except as provided herein or in the AXEL Credit Agreement, Company
will not, and will not permit any of its Subsidiaries to, create or otherwise
cause or suffer to exist or become effective any consensual encumbrance or
restriction of any kind on the ability of any such Subsidiary to (i) pay
dividends or make any other distributions on any of such Subsidiary's capital
stock owned by Company or any other Subsidiary of Company, (ii) repay or prepay
any Indebtedness owed by such Subsidiary to Company or any other Subsidiary of
Company, (iii) make loans or advances to Company or any other Subsidiary of
Company, or (iv) transfer any of its property or assets to Company or any other
Subsidiary of Company.
7.3 Investments; Joint Ventures.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, make or own any Investment in any Person, including any
Joint Venture, except:
(i) Company and its Subsidiaries may make and own Investments in
Cash Equivalents;
(ii) Company and its Subsidiaries may make intercompany loans to the
extent permitted under subsection 7.1(iii);
(iii) Company and its Subsidiaries may make Consolidated Capital
Expenditures permitted by subsection 7.8;
(iv) Company and its Subsidiaries may continue to own the
Investments owned by them and described in Schedule 7.3 annexed hereto;
(v) Company and its wholly owned Domestic Subsidiaries may make and
own investments in other wholly owned Domestic Subsidiaries;
(vi) Company and its wholly owned Domestic Subsidiaries may make and
own Investments in Persons that, as a result of such Investments, become
additional wholly-owned Domestic Subsidiaries, to the extent such
Investments are permitted under subsection 7.7(vi); provided that Company
shall, and shall cause its Subsidiaries to, comply with the requirements
of subsections 6.8 and 6.9 with respect to each such additional Domestic
Subsidiaries;
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(vii) Company and its wholly owned Domestic Subsidiaries may make
additional Investments in their respective Foreign Subsidiaries; provided
that (a) the amount of all such Investments constituting equity
Investments does not exceed $3,500,000 in the aggregate for all such
Investments since the Closing Date and (b) the amount of all such
Investments constituting loans or advances does not exceed the amount
permitted under subsection 7.1(iii);
(viii) Company and its Subsidiaries may make and own other
Investments in an aggregate amount not to exceed at any time $7,000,000.
Notwithstanding the foregoing, so long as no Event of Default or Potential Event
of Default shall exist and be continuing, Company and its Subsidiaries may make
and hold investments funded solely with the proceeds of any issuance of Company
Common Stock in a private issuance after the Closing Date.
7.4 Contingent Obligations.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or become or remain liable with respect to any
Contingent Obligation, except:
(i) Subsidiaries of Company may become and remain liable with
respect to Contingent Obligations in respect of the Subsidiary Guaranty;
(ii) Company and its Subsidiaries may become and remain liable in
respect of obligations under any Hedge Agreements;
(iii) Company may become and remain liable with respect to
Contingent Obligations in respect of Letters of Credit; Company and its
Domestic Subsidiaries may become and remain liable with respect to
Contingent Obligations in respect of other Commercial Letters of Credit in
an aggregate amount not to exceed at any time $3,000,000 and Contingent
Obligations in respect of other Standby Letters of Credit in an aggregate
amount not to exceed at any time $2,000,000; and Foreign Subsidiaries may
become and remain liable with respect to Contingent Obligations in respect
of other Commercial Letters of Credit obtained in the ordinary course of
business in an aggregate amount not to exceed at any time $2,000,000;
(iv) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations in respect of customary indemnification,
purchase price adjustment and contingent earnout obligations incurred in
connection with Asset Sales or other sales or purchases of assets,
provided that the aggregate amount of all obligations of Company and its
Subsidiaries in respect of purchase price adjustments and contingent
earnouts may not exceed $5,000,000 at any time;
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(v) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations under guarantees in the ordinary course
of business of the obligations of suppliers, customers, franchisees and
licensees of Company and its Subsidiaries in an aggregate amount not to
exceed at any time $1,000,000;
(vi) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations in respect of any Indebtedness of
Company or any of its Subsidiaries permitted by subsection 7.1;
(vii) Company and its Subsidiaries, as applicable, may remain liable
with respect to Contingent Obligations described in Schedule 7.4 annexed
hereto; and
(viii) Company and its Subsidiaries may become and remain liable
with respect to other Contingent Obligations; provided that the maximum
aggregate liability, contingent or otherwise, of Company and its
Subsidiaries in respect of all such Contingent Obligations shall at no
time exceed $5,000,000.
7.5 Restricted Junior Payments.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, declare, order, pay, make or set apart any sum for any
Restricted Junior Payment; provided that so long as no Event of Default or
Potential Event of Default shall then exist and be continuing Company may (i)
make regularly scheduled payments of interest in respect of any Subordinated
Indebtedness in accordance with the terms of, and only to the extent required
by, and subject to the subordination provisions contained in, the indenture or
other agreement pursuant to which such Subordinated Indebtedness was issued, as
such indenture or other agreement may be amended from time to time to the extent
permitted under subsection 7.15B and (ii) repurchase stock and options from
officers, directors and employees in accordance with the terms of the
Stockholders' Agreement in an aggregate amount not to exceed (i) $5,000,000 per
year in the case of any then current or former chief executive officer, (ii)
$2,500,000 per year in the aggregate in the case of all other officers,
directors and employees and (iii) $10,000,000 in the aggregate for all such
Persons after the Closing Date.
7.6 Financial Covenants.
A. Minimum Fixed Charge Coverage Ratio. Company shall not permit the ratio
of (i) Consolidated Adjusted EBITDA to (ii) Consolidated Fixed Charges for any
four-Fiscal Quarter period ending on any of the dates set forth below to be less
than the correlative ratio indicated:
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===============================================
Minimum
Period Fixed Charge
Ending Coverage Ratio
===============================================
March 31, 1998 1.00:1.00
-----------------------------------------------
June 30, 1998 1.00:1.00
-----------------------------------------------
September 30, 1998 1.00:1.00
-----------------------------------------------
December 31, 1998 1.00:1.00
-----------------------------------------------
March 31, 1999 1.00:1.00
-----------------------------------------------
June 30, 1999 1.00:1.00
-----------------------------------------------
September 30, 1999 1.00:1.00
-----------------------------------------------
December 31, 1999 1.00:1.00
-----------------------------------------------
March 31, 2000 1.10:1.00
-----------------------------------------------
June 30, 2000 1.10:1.00
-----------------------------------------------
September 30, 2000 1.10:1.00
-----------------------------------------------
December 31, 2000 1.10:1.00
-----------------------------------------------
March 31, 2001 1.15:1.00
-----------------------------------------------
June 30, 2001 1.15:1.00
-----------------------------------------------
September 30, 2001 1.15:1.00
-----------------------------------------------
December 31, 2001 1.15:1.00
-----------------------------------------------
March 31, 2002 1.20:1.00
-----------------------------------------------
June 30, 2002 1.20:1.00
-----------------------------------------------
September 30, 2002 1.20:1.00
-----------------------------------------------
December 31, 2002 1.20:1.00
===============================================
B. Minimum Consolidated Adjusted EBITDA. Company shall not permit
Consolidated Adjusted EBITDA for any four Fiscal Quarter period ending on the
dates set forth below to be less than the correlative amount indicated:
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==============================================
Minimum
Period Consolidated
Ending Adjusted
EBITDA
==============================================
March 31, 1998 35,000,000
----------------------------------------------
June 30, 1998 36,000,000
----------------------------------------------
September 30, 1998 36,500,000
----------------------------------------------
December 31, 1998 37,500,000
----------------------------------------------
March 31, 1999 38,500,000
----------------------------------------------
June 30, 1999 39,500,000
----------------------------------------------
September 30, 1999 40,000,000
----------------------------------------------
December 31, 1999 40,500,000
----------------------------------------------
March 31, 2000 41,000,000
----------------------------------------------
June 30, 2000 41,500,000
----------------------------------------------
September 30, 2000 42,000,000
----------------------------------------------
December 31, 2000 42,500,000
----------------------------------------------
March 31, 2001 43,125,000
----------------------------------------------
June 30, 2001 43,750,000
----------------------------------------------
September 30, 2001 44,375,000
----------------------------------------------
December 31, 2001 45,000,000
----------------------------------------------
March 31, 2002 45,875,000
----------------------------------------------
June 30, 2002 46,750,000
----------------------------------------------
September 30, 2002 47,625,000
----------------------------------------------
December 31, 2002 48,500,000
==============================================
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C. Maximum Debt to EBITDA Ratio. Company shall not permit the ratio of (i)
Consolidated Total Debt to (ii) Consolidated Adjusted EBITDA as of the last day
of any four Fiscal Quarter period ending on any of the dates set forth below to
exceed the correlative ratio indicated:
==============================================
Maximum
Period Debt to EBITDA
Ending Ratio
==============================================
March 31, 1998 6.60:1.00
----------------------------------------------
June 30, 1998 6.40:1.00
----------------------------------------------
September 30, 1998 6.35:1.00
----------------------------------------------
December 31, 1998 6.10:1.00
----------------------------------------------
March 31, 1999 5.90:1.00
----------------------------------------------
June 30, 1999 5.80:1.00
----------------------------------------------
September 30, 1999 5.70:1.00
----------------------------------------------
December 31, 1999 5.50:1.00
----------------------------------------------
March 31, 2000 5.40:1.00
----------------------------------------------
June 30, 2000 5.25:1.00
----------------------------------------------
September 30, 2000 5.10:1.00
----------------------------------------------
December 31, 2000 5.00:1.00
----------------------------------------------
March 31, 2001 4.85:1.00
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June 30, 2001 4.70:1.00
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September 30, 2001 4.55:1.00
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December 31, 2001 4.40:1.00
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March 31, 2002 4.20:1.00
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June 30, 2002 4.10:1.00
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September 30, 2002 3.90:1.00
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December 31, 2002 3.70:1.00
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D. Certain Calculations. With respect to calculations of Consolidated
Adjusted EBITDA and Consolidated Fixed Charges for any four-Fiscal Quarter
period including the Closing Date, such calculations shall be made on a pro
forma basis assuming, in each case, that the Closing Date, the Merger, the
repayment of debt to be repaid in connection with the Closing, the issuance and
sale of the Company Common Stock and the related borrowings by Company pursuant
to this Agreement, the AXEL Credit Agreement and the Senior Subordinated Note
Indenture occurred on the first day of the applicable four-Fiscal Quarter period
and assuming further, for purposes of calculation of the pro forma interest
accrued on AXELs and Revolving Loans during such four quarter periods prior to
the Closing Date, that (i) all Revolving Loans outstanding were Eurodollar Rate
Loans and that the applicable reference interest rates were the average
effective Adjusted Eurodollar Rates on the Revolving Loans for the period from
the Closing Date through the date of determination and (ii) all AXELs
outstanding were Eurodollar Rate Loans (as defined in the AXEL Credit Agreement)
and that the applicable reference interest rates were the average effective
Adjusted Eurodollar Rates (as defined in the AXEL Credit Agreement) on the AXELs
for the period from the Closing Date through the date of determination, all such
calculations to be in form and substance satisfactory to Arranger and
Administrative Agent. In addition, during the first three Fiscal Quarters of
Fiscal Year 1998, in calculating Consolidated Fixed Charges for any such period,
such calculation shall be made using actual Consolidated Capital Expenditures
paid in Cash from the beginning of Fiscal Year 1998 and annualized.
With respect to any period during which new Subsidiaries, assets or
businesses are acquired pursuant to subsection 7.7(vi), for purposes of
determining compliance with the financial covenants set forth in this subsection
7.6, calculations of Consolidated Adjusted EBITDA and Consolidated Fixed Charges
shall exclude non-recurring restructuring charges associated with such
transactions, one time costs associated with financing raised and equity issued
pursuant to subsections 7.1 (viii) and 7.1(x) and the costs associated with the
realization of cost savings described in the next sentence, provided that such
exclusion shall not apply with respect to any non recurring restructuring
charges and charges in connection with cost savings to the extent they are paid
in cash but only in the period in which they are paid in cash. Consolidated
Adjusted EBITDA and Consolidated Fixed Charges shall also be calculated with
respect to such periods and such Subsidiaries, assets or businesses on a pro
forma basis (including (without duplication for amounts otherwise included in
Consolidated Adjusted EBITDA) pro forma adjustments for cost savings which have
actually occurred (annualizing such cost savings) and arise out of events which
are directly attributable to a specific transaction, are factually supportable
and are expected to have a continuing impact, including, without limitation,
cost savings resulting from head count reductions, closure of facilities and
similar restructuring charges, which pro forma adjustments shall be certified in
an Officers Certificate of the Company) using the historical financial
statements of all entities or assets so acquired or to be acquired and the
consolidated financial statements of Company and its Subsidiaries which shall be
reformulated (i) as if such acquisition, and any acquisitions which have been
consummated during such four quarter period, and any Indebtedness or other
liabilities incurred in connection with
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any such acquisition had been consummated or incurred at the beginning of such
four quarter period (and assuming that such Indebtedness bears interest during
any portion of the applicable measurement period prior to the relevant
acquisition at the weighted average of the interest rates applicable to such
Indebtedness during the period in which it is actually outstanding), and (ii)
otherwise in conformity with certain procedures to be agreed upon between
Administrative Agent and Company, all such calculations to be in form and
substance satisfactory to Administrative Agent.
In addition, in calculating compliance with Subsection 7.6A, discontinued
operations will be given pro forma effect as follows:
(1) Consolidated Adjusted EBITDA attributable to discontinued
operations, as determined in accordance with GAAP, and operations or
businesses disposed of on or prior to the calculation date, shall be
excluded, and
(2) Consolidated Fixed Charges attributable to discontinued operations,
as determined in accordance with GAAP, and operations or businesses
disposed of on or prior to the calculation date, shall be excluded,
but only to the extent that the obligations giving rise to such
Consolidated Fixed Charges will not be obligations of the Company or
any of its Subsidiaries following the Calculation Date.
7.7 Restriction on Fundamental Changes; Asset Sales and Acquisitions.
Company shall not, and shall not permit any of its Subsidiaries to, alter
the corporate, capital or legal structure of Company or any of its Subsidiaries,
or enter into any transaction of merger or consolidation, or liquidate, wind-up
or dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease or sub-lease (as lessor or sublessor), transfer or otherwise dispose of,
in one transaction or a series of transactions, all or any part of its business,
property or assets, whether now owned or hereafter acquired, or acquire by
purchase or otherwise all or substantially all the business, property or fixed
assets of, or stock or other evidence of beneficial ownership of, any Person or
any division or line of business of any Person, except:
(i) any Subsidiary of Company may be merged with or into Company or
any wholly-owned Subsidiary Guarantor, or be liquidated, wound up or
dissolved, or all or any part of its business, property or assets may be
conveyed, sold, leased, transferred or otherwise disposed of, in one
transaction or a series of transactions, to Company or any wholly-owned
Subsidiary Guarantor; provided that, in the case of such a merger, Company
or such wholly-owned Subsidiary Guarantor shall be the continuing or
surviving corporation;
(ii) Company and its Subsidiaries may make Consolidated Capital
Expenditures permitted under subsection 7.8;
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(iii) Company and its Subsidiaries may dispose of obsolete, worn out
or surplus property in the ordinary course of business and any assets
acquired in connection with the acquisition of another Person or a
division or line of business of such Person which the Company reasonably
determines are surplus assets;
(iv) Company and its Subsidiaries may sell or otherwise dispose of
assets in transactions that do not constitute Asset Sales; provided that
the consideration received for such assets shall be in an amount at least
equal to the fair market value thereof;
(v) subject to subsection 7.12, Company and its Subsidiaries may (x)
sell the ▇▇▇▇▇▇▇, New York, Melbourne, Australia and Montreal, Quebec real
estate and (y) make other Asset Sales of assets having a fair market value
not in excess of $1,000,000 per year; provided that (1) the consideration
received for such assets shall be in an amount at least equal to the fair
market value thereof; (2) the consideration received shall be at least 85%
cash; and (3) no later than the first Business Day following the date of
receipt by Company or any of its Subsidiaries of any Net Asset Sale
Proceeds of such Asset Sale, Company shall deliver to Agent an Officers'
Certificate, satisfactory in form and substance to Administrative Agent,
demonstrating the derivation of the Net Asset Sale Proceeds of such Asset
Sale from the gross sales price received in connection therewith; and
(vi) Company and its Subsidiaries may acquire all or substantially
all the business, property or fixed assets of, or stock or other evidence
of beneficial ownership of, any Person or any division or line of business
of any Person that is in the same line of business as Company and its
Subsidiaries ("Permitted Business Acquisitions"); provided that the
aggregate consideration paid in respect of all such Permitted Business
Acquisitions does not exceed $10,000,000 in the aggregate (excluding
common stock of Company transferred to the seller as part of the
consideration for a Permitted Business Acquisition). Notwithstanding the
foregoing, expenditures on Permitted Business Acquisitions in an aggregate
amount in excess of $10,000,000 will be permitted; provided that, (a) any
amounts in excess of $25,000,000 (excluding common stock of Company
transferred to the seller as part of the consideration for a Permitted
Business Acquisition) are funded solely from the proceeds of the
incurrence of additional subordinated debt in accordance with subsection
7.1(viii), the proceeds of the incurrence of additional AXELs under
subsection 7.1(x) and/or the proceeds of an issuance of additional Company
Common Stock in a private issuance after the Closing Date, (b) Company
shall give Administrative Agent at least 10 days' notice of the proposed
transaction, and copies of the definitive documentation relating thereto,
(c) Company shall deliver an Officer's Certificate to Administrative Agent
and Lenders in form and substance reasonably satisfactory to
Administrative Agent, together with the related financial statements,
demonstrating in reasonable detail that, after giving effect to such
acquisition (including any Indebtedness incurred or assumed therein) the
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Consolidated Leverage Ratio, determined on a Pro Forma Basis for the most
recently completed four-Fiscal Quarter period, shall be not more than
5.50:1.00 (or such lesser Consolidated Leverage Ratio as may be required
pursuant to subsection 7.6C at the time of such acquisition).
7.8 Consolidated Capital Expenditures.
Company shall not, and shall not permit its Subsidiaries to, make or incur
Consolidated Capital Expenditures, in any Fiscal Year ending on a date set forth
below (or any four quarter period ending on any date set forth below on or prior
to December 31, 1998), in an aggregate amount in excess of the corresponding
amount (the "Maximum Consolidated Capital Expenditures Amount") set forth below
opposite such date; provided that the Maximum Consolidated Capital Expenditures
Amount for any Fiscal Year, commencing with Fiscal Year 1999, shall be increased
by an amount equal to the excess, if any, (but in no event more than 50% of the
Maximum Consolidated Capital Expenditures Amount for the previous Fiscal Year
(or, in the case of Fiscal Year 1999, for the four Fiscal Quarter period ending
as of December 31, 1998) of the Maximum Consolidated Capital Expenditures Amount
(as adjusted in accordance with this proviso) over the actual amount of
Consolidated Capital Expenditure for the previous Fiscal Year (or, in the case
of Fiscal Year 1999, for the four Fiscal Quarter period ending as of December
31, 1998):
==============================================
Period Maximum
Ending Consolidated Capital
Expenditures
==============================================
March 31, 1998 7,500,000
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June 30, 1998 8,250,000
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September 30, 1998 7,250,000
----------------------------------------------
December 31, 1998 7,000,000
----------------------------------------------
December 31, 1999 10,000,000
----------------------------------------------
December 31, 2000 10,500,000
----------------------------------------------
December 31, 2001 10,500,000
----------------------------------------------
December 31, 2002 11,000,000
==============================================
Notwithstanding the foregoing, the Company and its Subsidiaries may fund
Consolidated Capital Expenditures in excess of the foregoing limits from any
proceeds of an additional issuance of Company common stock in a private issuance
after the Closing Date.
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7.9 Sales and Lease-Backs.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, become or remain liable as lessee or as a guarantor or
other surety with respect to any lease, whether an Operating Lease or a Capital
Lease, of any property (whether real, personal or mixed), whether now owned or
hereafter acquired, (i) which Company or any of its Subsidiaries has sold or
transferred or is to sell or transfer to any other Person (other than Company or
any of its Subsidiaries) or (ii) which Company or any of its Subsidiaries
intends to use for substantially the same purpose as any other property which
has been or is to be sold or transferred by Company or any of its Subsidiaries
to any Person (other than Company or any of its Subsidiaries) in connection with
such lease.
7.10 Transactions with Shareholders and Affiliates.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction (including
the purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder of 10% or more of any class of equity Securities of
Company or with any Affiliate of Company or of any such holder, on terms that
are less favorable to Company or that Subsidiary, as the case may be, than those
that might be obtained at the time from Persons who are not such a holder or
Affiliate; provided that the foregoing restriction shall not apply to (i) any
transaction between Company and any of its wholly owned Subsidiaries or between
any of its wholly owned Subsidiaries, (ii) any transaction between Company or
any of its wholly owned Subsidiaries and ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., GSCP or GSII or
any Affiliate of any of them, (iii) reasonable and customary fees paid to
members of the Boards of Directors of Company and its Subsidiaries or (iv) any
transactions described on Schedule 7.10.
7.11 Disposal of Subsidiary Stock.
Except for any sale of 100% of the capital stock or other equity
Securities of any of its Subsidiaries in compliance with the provisions of
subsection 7.7(v), Company shall not:
(i) directly or indirectly sell, assign, pledge or otherwise
encumber or dispose of any shares of capital stock or other equity
Securities of any of its Subsidiaries, except to qualify directors if
required by applicable law; or
(ii) permit any of its Subsidiaries directly or indirectly to sell,
assign, pledge or otherwise encumber or dispose of any shares of capital
stock or other equity Securities of any of its Subsidiaries (including
such Subsidiary), except to Company, another Subsidiary of Company, or to
qualify directors if required by applicable law.
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7.12 Conduct of Business.
From and after the Closing Date, Company shall not, and shall not permit
any of its Subsidiaries to, engage in any business other than (i) the businesses
engaged in by Company and its Subsidiaries on the Closing Date and similar or
related businesses and (ii) such other lines of business as may be consented to
by Requisite Lenders.
7.13 Amendments or Waivers of Certain Related Agreements; Amendments of
Documents Relating to Subordinated Indebtedness.
A. Amendments or Waivers of Certain Related Agreements. Neither Company
nor any of its Subsidiaries will agree to any material amendment to, or waive
any of its material rights under, any Related Agreement (other than any Related
Agreement evidencing or governing any Subordinated Indebtedness) after the
Closing Date without in each case obtaining the prior written consent of
Requisite Lenders to such amendment or waiver.
B. Amendments of Documents Relating to Subordinated Indebtedness. Company
shall not, and shall not permit any of its Subsidiaries to, amend or otherwise
change the terms of any Subordinated Indebtedness, or make any payment
consistent with an amendment thereof or change thereto, if the effect of such
amendment or change is to increase the interest rate on such Subordinated
Indebtedness, change (to earlier dates) any dates upon which payments of
principal or interest are due thereon, change any event of default or condition
to an event of default with respect thereto (other than to eliminate any such
event of default or increase any grace period related thereto), change the
redemption, prepayment or defeasance provisions thereof, change the
subordination provisions of such Subordinated Indebtedness (or of any guaranty
thereof), or change any collateral therefor (other than to release such
collateral), or if the effect of such amendment or change, together with all
other amendments or changes made, is to increase materially the obligations of
the obligor thereunder or to confer any additional rights on the holders of such
Subordinated Indebtedness (or a trustee or other representative on their behalf)
which would be adverse to Company or Lenders.
7.14 Fiscal Year
Company shall not change its Fiscal Year-end from December 31.
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SECTION 8.
EVENTS OF DEFAULT
If any of the following conditions or events ("Events of Default") shall
occur:
8.1 Failure to Make Payments When Due.
Failure by Company to pay any installment of principal of any Revolving
Loan when due, whether at stated maturity, by acceleration, by notice of
voluntary prepayment, by mandatory prepayment or otherwise; failure by Company
to pay when due any amount payable to an Issuing Lender in reimbursement of any
drawing under a Letter of Credit; or failure by Company to pay any interest on
any Revolving Loan or any fee or any other amount due under this Agreement
within three days after the date due; or
8.2 Default in Other Agreements.
(i) Failure of Company or any of its Subsidiaries to pay when due any
principal of or interest on or any other amount payable in respect of one or
more items of Indebtedness (other than Indebtedness referred to in subsection
8.1) or Contingent Obligations with an aggregate principal amount of $5,000,000
or more, in each case beyond the end of any grace period provided therefor; or
(ii) breach or default by Company or any of its Subsidiaries with respect to any
other material term of (a) one or more items of Indebtedness or Contingent
Obligations in the individual or aggregate principal amounts referred to in
clause (i) above or (b) any loan agreement (including the AXEL Credit
Agreement), mortgage, indenture or other agreement relating to such item(s) of
Indebtedness or Contingent Obligation(s), if the effect of such breach or
default is to cause, or to permit the holder or holders of that Indebtedness or
Contingent Obligation(s) (or a trustee on behalf of such holder or holders) to
cause, that Indebtedness or Contingent Obligation(s) to become or be declared
due and payable prior to its stated maturity or the stated maturity of any
underlying obligation, as the case may be (upon the giving or receiving of
notice, lapse of time, both, or otherwise); or
8.3 Breach of Certain Covenants.
Failure of Company to perform or comply with any term or condition
contained in subsection 2.5 or 6.2 or Section 7 of this Agreement; or
8.4 Breach of Warranty.
Any representation, warranty, certification or other statement made by
Company or any of its Subsidiaries in any Loan Document or in any statement or
certificate at any time given by Company or any of its Subsidiaries in writing
pursuant hereto or thereto or in connection herewith or therewith shall be false
in any material respect on the date as of which made; or
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8.5 Other Defaults Under Revolving Loan Documents.
Any Loan Party shall default in the performance of or compliance with any
term contained in this Agreement or any of the other Revolving Loan Documents,
other than any such term referred to in any other subsection of this Section 8,
and such default shall not have been remedied or waived within 30 days after the
earlier of (i) an executive officer of Company or such Loan Party becoming aware
of such default or (ii) receipt by Company and such Loan Party of notice from
Administrative Agent or any Lender of such default; or
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc.
(i) A court having jurisdiction in the premises shall enter a decree or
order for relief in respect of Company or any of its Subsidiaries in an
involuntary case under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, which decree
or order is not stayed; or any other similar relief shall be granted under any
applicable federal or state law; or (ii) an involuntary case shall be commenced
against Company or any of its Subsidiaries under the Bankruptcy Code or under
any other applicable bankruptcy, insolvency or similar law now or hereafter in
effect; or a decree or order of a court having jurisdiction in the premises for
the appointment of a receiver, liquidator, sequestrator, trustee, custodian or
other officer having similar powers over Company or any of its Subsidiaries, or
over all or a substantial part of its property, shall have been entered; or
there shall have occurred the involuntary appointment of an interim receiver,
trustee or other custodian of Company or any of its Subsidiaries for all or a
substantial part of its property; or a warrant of attachment, execution or
similar process shall have been issued against any substantial part of the
property of Company or any of its Subsidiaries, and any such event described in
this clause (ii) shall continue for 60 days unless dismissed, bonded or
discharged; or
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc.
(i) Company or any of its Subsidiaries shall have an order for relief
entered with respect to it or commence a voluntary case under the Bankruptcy
Code or under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, or shall consent to the entry of an order for relief in an
involuntary case, or to the conversion of an involuntary case to a voluntary
case, under any such law, or shall consent to the appointment of or taking
possession by a receiver, trustee or other custodian for all or a substantial
part of its property; or Company or any of its Subsidiaries shall make any
assignment for the benefit of creditors; or (ii) Company or any of its
Subsidiaries shall be unable, or shall fail generally, or shall admit in writing
its inability, to pay its debts as such debts become due; or the Board of
Directors of Company or any of its Subsidiaries (or any committee thereof) shall
adopt any resolution or otherwise authorize any action to approve any of the
actions referred to in clause (i) above or this clause (ii); or
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8.8 Judgments and Attachments.
Any money judgment, writ or warrant of attachment or similar process
involving in the aggregate at any time an amount in excess of $5,000,000 (in
either case not adequately covered by insurance as to which a solvent and
unaffiliated insurance company has acknowledged coverage) shall be entered or
filed against Company or any of its Subsidiaries or any of their respective
assets and shall remain undischarged, unvacated, unbonded or unstayed for a
period of 60 days (or in any event later than five days prior to the date of any
proposed sale thereunder); or
8.9 Dissolution.
Any order, judgment or decree shall be entered against Company or any of
its Subsidiaries decreeing the dissolution or split up of Company or that
Subsidiary and such order shall remain undischarged or unstayed for a period in
excess of 30 days; or
8.10 Employee Benefit Plans.
There shall occur one or more ERISA Events which individually or in the
aggregate results in or might reasonably be expected to result in liability of
Company or any of its Subsidiaries in excess of $5,000,000 during the term of
this Agreement; or the excess of (1) the actuarial present value (determined on
the basis of reasonable assumptions employed by the independent actuary for each
Pension Plan for purposes of Section 412 of the Internal Revenue Code or Section
302 of ERISA) of benefit liabilities (as defined in Section 4001(a)(16) of
ERISA) over (2) the fair market value of the assets of such Pension Plan,
individually or in the aggregate for all Pension Plans (excluding for purposes
of such computation any Pension Plans with respect to which assets exceed
benefit liabilities), exceeds $7,500,000; or
8.11 Change in Control.
If (i) prior to a Qualified Public Offering GSII together with any
Affiliates of GSII shall cease to beneficially own and control 51% or more of
the combined voting power of all Securities of the Company, (ii) following
consummation of a Qualified Public Offering any Person or any two or more
Persons acting in concert shall have acquired beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission under the
Exchange Act), directly or indirectly, of Securities of Company (or other
Securities convertible into such Securities) representing more of the combined
voting power of all Securities of Company than is owned by GSII and its
Affiliates at such time, or (iii) a "Change of Control" as defined in the Senior
Subordinated Notes Indenture occurs; or
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8.12 Invalidity of Subsidiary Guaranty; Failure of Security; Repudiation of
Obligations.
At any time after the execution and delivery thereof, (i) the Subsidiary
Guaranty for any reason, other than the satisfaction in full of all Obligations,
shall cease to be in full force and effect (other than in accordance with its
terms) or shall be declared to be null and void, (ii) any Collateral Document
shall cease to be in full force and effect (other than by reason of a release of
Collateral thereunder in accordance with the terms hereof or thereof, the
satisfaction in full of the Obligations or any other termination of such
Collateral Document in accordance with the terms hereof or thereof) or shall be
declared null and void, or Administrative Agent shall not have or shall cease to
have a valid and perfected First Priority Lien in any Collateral purported to be
covered thereby, in each case for any reason other than the failure of
Administrative Agent or any Lender to take any action within its control, or
(iii) any Loan Party shall contest the validity or enforceability of any Loan
Document in writing or deny in writing that it has any further liability,
including with respect to future advances by Lenders, under any Loan Document to
which it is a party; or
8.13 Failure to Consummate Merger.
The Merger shall not be consummated in accordance with this Agreement and
the applicable Related Agreements concurrently with the making of the initial
Revolving Loans, or the Merger shall be unwound, reversed or otherwise rescinded
in whole or in part for any reason; or
8.14 Amendment of Certain Documents of Company.
Company shall agree to any material amendment to, or waive any of its
material rights under, or otherwise change any material terms of, any of the
Recapitalization Documents, in each case as in effect on the Closing Date, in a
manner adverse to Company or any of its Subsidiaries or to Lenders without the
prior written consent of Administrative Agent and Requisite Lenders;
THEN (i) upon the occurrence of any Event of Default described in subsection 8.6
or 8.7, each of (a) the unpaid principal amount of and accrued interest on the
Revolving Loans, (b) an amount equal to the maximum amount that may at any time
be drawn under all Letters of Credit then outstanding (whether or not any
beneficiary under any such Letter of Credit shall have presented, or shall be
entitled at such time to present, the drafts or other documents or certificates
required to draw under such Letter of Credit), and (c) all other Obligations
shall automatically become immediately due and payable, without presentment,
demand, protest or other requirements of any kind, all of which are hereby
expressly waived by Company, and the obligation of each Lender to make any
Revolving Loan, the obligation of Administrative Agent to issue any Letter of
Credit and the right of any Lender to issue any Letter of Credit hereunder shall
thereupon terminate, and (ii) upon the occurrence and during the continuation of
any other Event of Default, Administrative Agent shall, upon the written request
or with the written consent of Requisite Lenders, by
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written notice to Company, declare all or any portion of the amounts described
in clauses (a) through (c) above to be, and the same shall forthwith become,
immediately due and payable, and the obligation of each Lender to make any
Revolving Loan, the obligation of Administrative Agent to issue any Letter of
Credit and the right of any Lender to issue any Letter of Credit hereunder shall
thereupon terminate; provided that the foregoing shall not affect in any way the
obligations of Lenders under subsection 3.3C(i).
Any amounts described in clause (b) above, when received by Administrative
Agent, shall be held by Collateral Agent pursuant to the terms of the
Intercreditor Agreement and shall be applied as therein provided.
Notwithstanding anything contained in the second preceding paragraph, if
at any time within 60 days after an acceleration of the Revolving Loans pursuant
to clause (ii) of such paragraph Company shall pay all arrears of interest and
all payments on account of principal which shall have become due otherwise than
as a result of such acceleration (with interest on principal and, to the extent
permitted by law, on overdue interest, at the rates specified in this Agreement)
and all Events of Default and Potential Events of Default (other than
non-payment of the principal of and accrued interest on the Revolving Loans, in
each case which is due and payable solely by virtue of acceleration) shall be
remedied or waived pursuant to subsection 10.6, then Requisite Lenders, by
written notice to Company, may at their option rescind and annul such
acceleration and its consequences; but such action shall not affect any
subsequent Event of Default or Potential Event of Default or impair any right
consequent thereon. The provisions of this paragraph are intended merely to bind
Lenders to a decision which may be made at the election of Requisite Lenders and
are not intended, directly or indirectly, to benefit Company, and such
provisions shall not at any time be construed so as to grant Company the right
to require Lenders to rescind or annul any acceleration hereunder or to preclude
Administrative Agent or Lenders from exercising any of the rights or remedies
available to them under any of the Revolving Loan Documents, even if the
conditions set forth in this paragraph are met.
SECTION 9.
AGENTS
9.1 Appointment.
A. Appointment of Agents. GSCP is hereby appointed Arranger and
Syndication Agent hereunder, and each Lender hereby authorizes Arranger and
Syndication Agent to act as its agent in accordance with the terms of this
Agreement and the other Revolving Loan Documents. Fleet is hereby appointed
Administrative Agent hereunder and under the other Revolving Loan Documents and
each Lender hereby authorizes Administrative Agent to act as its agent in
accordance with the terms of this Agreement and the other Revolving Loan
Documents. Fleet is also being appointed Collateral Agent under the
Intercreditor Agreement and each Lender hereby authorizes Collateral Agent to
act as its agent
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in accordance with the terms of the Intercreditor Agreement and the other
Revolving Loan Documents. Each Agent hereby agrees to act upon the express
conditions contained in this Agreement and the other Revolving Loan Documents,
as applicable. The provisions of this Section 9 are solely for the benefit of
Agents and Lenders and Company shall have no rights as a third party beneficiary
of any of the provisions thereof. In performing its functions and duties under
this Agreement, each Agent shall act solely as an agent of Lenders and does not
assume and shall not be deemed to have assumed any obligation towards or
relationship of agency or trust with or for Company or any of its Subsidiaries.
Each of Arranger and Syndication Agent, without consent of or notice to any
party hereto, may assign any and all of its rights or obligations hereunder to
any of its Affiliates. As of the Closing Date, all obligations of Arranger and
Syndication Agent hereunder shall terminate.
B. Appointment of Supplemental Collateral Agents. It is the purpose of
this Agreement and the other Revolving Loan Documents that there shall be no
violation of any law of any jurisdiction denying or restricting the right of
banking corporations or associations to transact business as agent or trustee in
such jurisdiction. It is recognized that in case of litigation under this
Agreement or any of the other Revolving Loan Documents, and in particular in
case of the enforcement of any of the Revolving Loan Documents, or in case
Administrative Agent deems that by reason of any present or future law of any
jurisdiction it may not exercise any of the rights, powers or remedies granted
herein or in any of the other Revolving Loan Documents or take any other action
which may be desirable or necessary in connection therewith, it may be necessary
that Administrative Agent appoint an additional individual or institution as a
separate trustee, co-trustee, collateral agent or collateral co-agent (any such
additional individual or institution being referred to herein individually as a
"Supplemental Collateral Agent" and collectively as "Supplemental Collateral
Agents").
In the event that Administrative Agent appoints a Supplemental Collateral
Agent with respect to any Collateral, (i) each and every right, power, privilege
or duty expressed or intended by this Agreement or any of the other Revolving
Loan Documents to be exercised by or vested in or conveyed to Administrative
Agent with respect to such Collateral shall be exercisable by and vest in such
Supplemental Collateral Agent to the extent, and only to the extent, necessary
to enable such Supplemental Collateral Agent to exercise such rights, powers and
privileges with respect to such Collateral and to perform such duties with
respect to such Collateral, and every covenant and obligation contained in the
Revolving Loan Documents and necessary to the exercise or performance thereof by
such Supplemental Collateral Agent shall run to and be enforceable by either
Agent or such Supplemental Collateral Agent, and (ii) the provisions of this
Section 9 and of subsections 10.2 and 10.3 that refer to Administrative Agent
shall inure to the benefit of such Supplemental Collateral Agent and all
references therein to Administrative Agent shall be deemed to be references to
Administrative Agent and/or such Supplemental Collateral Agent, as the context
may require.
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Should any instrument in writing from Company or any other Loan Party be
required by any Supplemental Collateral Agent so appointed by Administrative
Agent for more fully and certainly vesting in and confirming to him or it such
rights, powers, privileges and duties, Company shall, or shall cause such Loan
Party to, execute, acknowledge and deliver any and all such instruments promptly
upon request by Administrative Agent. In case any Supplemental Collateral Agent,
or a successor thereto, shall die, become incapable of acting, resign or be
removed, all the rights, powers, privileges and duties of such Supplemental
Collateral Agent, to the extent permitted by law, shall vest in and be exercised
by Administrative Agent until the appointment of a new Supplemental Collateral
Agent.
9.2 Powers and Duties; General Immunity.
▇. ▇▇▇▇▇▇; Duties Specified. Each Lender irrevocably authorizes each Agent
to take such action on such Lender's behalf and to exercise such powers, rights
and remedies hereunder and under the other Revolving Loan Documents as are
specifically delegated or granted to such Agent by the terms hereof and thereof,
together with such powers, rights and remedies as are reasonably incidental
thereto. Each Agent shall have only those duties and responsibilities that are
expressly specified in this Agreement and the other Revolving Loan Documents.
Each Agent may exercise such powers, rights and remedies and perform such duties
by or through its agents or employees. No Agent shall have, by reason of this
Agreement or any of the other Revolving Loan Documents, a fiduciary relationship
in respect of any Lender; and nothing in this Agreement or any of the other
Revolving Loan Documents, expressed or implied, is intended to or shall be so
construed as to impose upon any Agent any obligations in respect of this
Agreement or any of the other Revolving Loan Documents except as expressly set
forth herein or therein.
B. No Responsibility for Certain Matters. No Agent shall be responsible to
any Lender for the execution, effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement or any other
Loan Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statements or in any
financial or other statements, instruments, reports or certificates or any other
documents furnished or made by any of Agent to Lenders or by or on behalf of
Company to any Agent or any Lender in connection with the Revolving Loan
Documents and the transactions contemplated thereby or for the financial
condition or business affairs of Company or any other Person liable for the
payment of any Obligations, nor shall any Agent be required to ascertain or
inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained in any of the Revolving Loan
Documents or as to the use of the proceeds of the Revolving Loans or as to the
existence or possible existence of any Event of Default or Potential Event of
Default. Anything contained in this Agreement to the contrary notwithstanding,
Administrative Agent shall not have any liability arising from confirmations of
the amount of outstanding Revolving Loans or the Letter of Credit Usage or the
component amounts thereof.
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C. Exculpatory Provisions. None of Agents nor any of their respective
officers, partners, directors, employees or agents shall be liable to Lenders
for any action taken or omitted by any Agent under or in connection with any of
the Revolving Loan Documents except to the extent caused by such Agent's gross
negligence or willful misconduct. Each Agent shall be entitled to refrain from
any act or the taking of any action (including the failure to take an action) in
connection with this Agreement or any of the other Revolving Loan Documents or
from the exercise of any power, discretion or authority vested in it hereunder
or thereunder unless and until such Agent shall have received instructions in
respect thereof from Requisite Lenders (or such other Lenders as may be required
to give such instructions under subsection 10.6) and, upon receipt of such
instructions from Requisite Lenders (or such other Lenders, as the case may be),
such Agent shall be entitled to act or (where so instructed) refrain from
acting, or to exercise such power, discretion or authority, in accordance with
such instructions. Without prejudice to the generality of the foregoing, (i)
each Agent shall be entitled to rely, and shall be fully protected in relying,
upon any communication, instrument or document believed by it to be genuine and
correct and to have been signed or sent by the proper person or persons, and
shall be entitled to rely and shall be protected in relying on opinions and
judgments of attorneys (who may be attorneys for Company and its Subsidiaries),
accountants, experts and other professional advisors selected by it; and (ii) no
Lender shall have any right of action whatsoever against any Agent as a result
of such Agent acting or (where so instructed) refraining from acting under this
Agreement or any of the other Revolving Loan Documents in accordance with the
instructions of Requisite Lenders (or such other Lenders as may be required to
give such instructions under subsection 10.6).
D. Agent Entitled to Act as Lender. The agency hereby created shall in no
way impair or affect any of the rights and powers of, or impose any duties or
obligations upon, any Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the Revolving Loans and the Letters of
Credit, each Agent shall have the same rights and powers hereunder as any other
Lender and may exercise the same as though it were not performing the duties and
functions delegated to it hereunder, and the term "Lender" or "Lenders" or any
similar term shall, unless the context clearly otherwise indicates, include each
Agent in its individual capacity. Any Agent and its Affiliates may accept
deposits from, lend money to and generally engage in any kind of banking, trust,
financial advisory or other business with Company or any of its Affiliates as if
it were not performing the duties specified herein, and may accept fees and
other consideration from Company for services in connection with this Agreement
and otherwise without having to account for the same to Lenders.
9.3 Representations and Warranties; No Responsibility For Appraisal of
Creditworthiness.
Each Lender represents and warrants that it has made its own independent
investigation of the financial condition and affairs of Company and its
Subsidiaries in connection with the making of the Revolving Loans and the
issuance of Letters of Credit
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hereunder and that it has made and shall continue to make its own appraisal of
the creditworthiness of Company and its Subsidiaries. No Agent shall have any
duty or responsibility, either initially or on a continuing basis, to make any
such investigation or any such appraisal on behalf of Lenders or to provide any
Lender with any credit or other information with respect thereto, whether coming
into its possession before the making of the Revolving Loans or at any time or
times thereafter, and no Agent shall have any responsibility with respect to the
accuracy of or the completeness of any information provided to Lenders.
9.4 Right to Indemnity.
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify each Agent, to the extent that such Agent shall not have been
reimbursed by Company, for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including counsel fees and disbursements) or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against such
Agent in exercising its powers, rights and remedies or performing its duties
hereunder or under the other Revolving Loan Documents or otherwise in its
capacity as such Agent in any way relating to or arising out of this Agreement
or the other Revolving Loan Documents; provided that no Lender shall be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from such
Agent's gross negligence or willful misconduct and provided further that any
such indemnification of the Collateral Agent shall be on the terms described in
section 6(c) of the Intercreditor Agreement. If any indemnity furnished to any
Agent for any purpose shall, in the opinion of such Agent, be insufficient or
become impaired, such Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished.
9.5 Successor Agent.
Successor Administrative Agent. Administrative Agent may resign at any
time by giving 30 days' prior written notice thereof to Lenders and Company, and
Administrative Agent may be removed at any time with or without cause by an
instrument or concurrent instruments in writing delivered to Company and
Administrative Agent and signed by Requisite Lenders. Upon any such notice of
resignation or any such removal, Requisite Lenders shall have the right, upon
five Business Days' notice to Company, to appoint a successor Administrative
Agent. If no successor Administrative Agent shall have been so appointed by
Requisite Lenders and shall have accepted such appointment within 30 days after
the notice of the intent of the Administrative Agent to resign, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent, that successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring or removed Administrative
Agent and the retiring or removed Administrative Agent
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shall be discharged from its duties and obligations under this Agreement. After
any retiring or removed Administrative Agent's resignation or removal hereunder
as Administrative Agent, the provisions of this Section 9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement.
9.6 Collateral Documents and Guaranties.
Each Lender hereby further authorizes Administrative Agent, on behalf of
and for the benefit of Lenders, to enter into the Intercreditor Agreement and to
appoint the Collateral Agent thereunder as agent for and representative of
Lenders. Under the terms of the Intercreditor Agreement the Collateral Agent is
authorized to enter into each Collateral Document as secured party and to be the
agent for and representative of Secured Parties under the Subsidiary Guaranty,
and each Lender agrees to be bound by the terms of the Intercreditor Agreement,
each Collateral Document and the Subsidiary Guaranty. Administrative Agent shall
not enter into or consent to any material amendment, modification or termination
of the Intercreditor Agreement without the prior consent of Requisite Lenders.
Each Lender acknowledges that under the terms of the Intercreditor Agreement
without further written consent or authorization from Lenders, Collateral Agent
may execute any documents or instruments necessary to (a) release any Lien
encumbering any item of Collateral that is the subject of a sale or other
disposition of assets permitted by this Agreement or to which Requisite Lenders
have otherwise consented or (b) release any Subsidiary Guarantor from the
Subsidiary Guaranty if all of the capital stock of such Subsidiary Guarantor is
sold to any Person (other than an Affiliate of Company) pursuant to a sale or
other disposition permitted hereunder or to which Requisite Lenders or Lenders
(as applicable) have otherwise consented. Anything contained in any of the
Revolving Loan Documents to the contrary notwithstanding, Company,
Administrative Agent and each Lender hereby agree that (X) no Lender shall have
any right individually to realize upon any of the Collateral under any
Collateral Document or to enforce the Subsidiary Guaranty, it being understood
and agreed that all powers, rights and remedies under the Collateral Documents
and the Subsidiary Guaranty may be exercised solely by Collateral Agent for the
benefit of Secured Parties in accordance with the terms thereof, and (Y) in the
event of a foreclosure by Collateral Agent on any of the Collateral pursuant to
a public or private sale, Collateral Agent or any Secured Party may be the
purchaser of any or all of such Collateral at any such sale and Collateral
Agent, as agent for and representative of Secured Parties (but not any Secured
Party or Secured Parties in its or their respective individual capacities unless
Requisite Lenders shall otherwise agree in writing) shall be entitled, for the
purpose of bidding and making settlement or payment of the purchase price for
all or any portion of the Collateral sold at any such public sale, to use and
apply any of the Obligations as a credit on account of the purchase price for
any collateral payable by Collateral Agent at such sale. The Lenders each
further acknowledge and agree that pursuant to the Intercreditor Agreement and
the Collateral Documents, Collateral Agent will act as the fonde de pouvoir
(holder of the power of attorney) of the holders from time to time of Notes
issued pursuant hereto to the extent necessary or desirable for the purposes of
creating, maintaining or enforcing any Liens or guarantees created or
established under any
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Collateral Documents contemplated hereby to be executed under the laws of the
Province of Quebec, Canada including, without limiting the generality of the
foregoing, entering into any such Collateral Documents and exercising all or
any of the rights, powers, trusts or duties conferred upon the Collateral Agent
therein and in the Intercreditor Agreement and each holder of Notes by
receiving and holding same accepts and confirms the appointment of the
collateral Agent as fonde de pouvoir (holder of the power of attorney) of such
holder for such purposes.
SECTION 10.
MISCELLANEOUS
10.1 Assignments and Participations in Loans and Letters of Credit.
A. General. Subject to subsection 10.1B, each Lender shall have the right
at any time to (i) sell, assign or transfer to any Eligible Assignee, or (ii)
sell participations to any Person in, all or any part of its Revolving Loan
Commitments or any Revolving Loan or Revolving Loans made by it or its Letters
of Credit or participations therein or any other interest herein or in any other
Obligations owed to it; provided that no such sale, assignment, transfer or
participation shall, without the consent of Company, require Company to file a
registration statement with the Securities and Exchange Commission or apply to
qualify such sale, assignment, transfer or participation under the securities
laws of any state; provided, further that no such sale, assignment or transfer
described in clause (i) above shall be effective unless and until an Assignment
Agreement effecting such sale, assignment or transfer shall have been accepted
by Administrative Agent and recorded in the Register as provided in subsection
10.1B(ii); provided, further that no such sale, assignment, transfer or
participation of any Letter of Credit or any participation therein may be made
separately from a sale, assignment, transfer or participation of a corresponding
interest in the Revolving Loan Commitment and the Revolving Loans of the Lender
effecting such sale, assignment, transfer or participation. Except as otherwise
provided in this subsection 10.1, no Lender shall, as between Company and such
Lender, be relieved of any of its obligations hereunder as a result of any sale,
assignment or transfer of, or any granting of participations in, all or any part
of its Revolving Loan Commitments or the Revolving Loans, the Letters of Credit
or participations therein, or the other Obligations owed to such Lender.
B. Assignments.
(i) Amounts and Terms of Assignments. Each Revolving Loan
Commitment, Revolving Loan, Letter of Credit or participation therein, or
other Obligation may (a) be assigned in any amount to another Lender, or
to a Related Fund or an Affiliate of the assigning Lender or another
Lender, with the giving of notice to Company, Administrative Agent and
Syndication Agent or (b) be assigned in an aggregate amount of not less
than $5,000,000 (or such lesser amount as shall
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constitute the aggregate amount of the Revolving Loan Commitments,
Revolving Loans, Letters of Credit and participations therein, and other
Obligations of the assigning Lender) to any other Eligible Assignee with
the giving of notice to Company and with the consent of Administrative
Agent and Syndication Agent (which consent shall not be unreasonably
withheld or delayed). To the extent of any such assignment in accordance
with either clause (a) or (b) above, the assigning Lender shall be
relieved of its obligations with respect to its Revolving Loan
Commitments, Revolving Loans, Letters of Credit or participations therein,
or other Obligations or the portion thereof so assigned. The parties to
each such assignment shall execute and deliver to Administrative Agent,
for its acceptance and recording in the Register, an Assignment Agreement,
together with a processing and recordation fee of $500, if such assignment
is to another Lender or an Affiliate or Related Fund of the assigning
Lender, or $2000, if such assignment is to any other Eligible Assignee,
and such forms, certificates or other evidence, if any, with respect to
United States federal income tax withholding matters as the assignee under
such Assignment Agreement may be required to deliver to Administrative
Agent pursuant to subsection 2.7B(iii)(a). Upon such execution, delivery,
acceptance and recordation, from and after the effective date specified in
such Assignment Agreement, (y) the assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment Agreement, shall have the
rights and obligations of a Lender hereunder and (z) the assigning Lender
thereunder shall, to the extent that rights and obligations hereunder have
been assigned by it pursuant to such Assignment Agreement, relinquish its
rights (other than any rights which survive the termination of this
Agreement under subsection 10.9B) and be released from its obligations
under this Agreement (and, in the case of an Assignment Agreement covering
all or the remaining portion of an assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to be a party
hereto; provided that, anything contained in any of the Revolving Loan
Documents to the contrary notwithstanding, if such Lender is the Issuing
Lender with respect to any outstanding Letters of Credit such Lender shall
continue to have all rights and obligations of an Issuing Lender with
respect to such Letters of Credit until the cancellation or expiration of
such Letters of Credit and the reimbursement of any amounts drawn
thereunder). The Revolving Loan Commitments hereunder shall be modified to
reflect the Revolving Loan Commitment of such assignee and any remaining
Revolving Loan Commitment of such assigning Lender and, if any such
assignment occurs after the issuance of the Revolving Notes hereunder, the
assigning Lender shall, upon the effectiveness of such assignment or as
promptly thereafter as practicable, surrender its applicable Revolving
Notes to Administrative Agent for cancellation, and thereupon new
Revolving Notes shall be issued to the assignee and/or to the assigning
Lender, substantially in the form of Exhibit V annexed hereto, as the case
may be, with appropriate insertions, to reflect the new Revolving Loan
Commitments of the assignee and/or the assigning Lender.
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(ii) Acceptance by Administrative Agent; Recordation in Register.
Upon its receipt of an Assignment Agreement executed by an assigning
Lender and an assignee representing that it is an Eligible Assignee,
together with the processing and recordation fee referred to in subsection
10.1B(i) and any forms, certificates or other evidence with respect to
United States federal income tax withholding matters that such assignee
may be required to deliver to Administrative Agent pursuant to subsection
2.7B(iii)(a), Administrative Agent shall, if Administrative Agent has
consented to the assignment evidenced thereby (to the extent such consent
is required pursuant to subsection 10.1B(i)), (a) accept such Assignment
Agreement by executing a counterpart thereof as provided therein (which
acceptance shall evidence any required consent of Administrative Agent to
such assignment), (b) record the information contained therein in the
Register, and (c) give prompt notice thereof to Company. Administrative
Agent shall maintain a copy of each Assignment Agreement delivered to and
accepted by it as provided in this subsection 10.1B(ii).
C. Participations. The holder of any participation, other than an
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except action
directly affecting (i) the extension of the regularly scheduled maturity of any
portion of the principal amount of or interest on any Revolving Loan allocated
to such participation or (ii) a reduction of the principal amount of or the rate
of interest payable on any Revolving Loan allocated to such participation, and
all amounts payable by Company hereunder (including amounts payable to such
Lender pursuant to subsections 2.6D, 2.7 and 3.6) shall be determined as if such
Lender had not sold such participation. Company and each Lender hereby
acknowledge and agree that, solely for purposes of subsections 10.4 and 10.5,
(a) any participation will give rise to a direct obligation of Company to the
participant and (b) the participant shall be considered to be a "Lender".
D. Assignments to Federal Reserve Banks. In addition to the assignments
and participations permitted under the foregoing provisions of this subsection
10.1, any Lender may assign and pledge all or any portion of its Revolving
Loans, the other Obligations owed to such Lender, and its Revolving Notes to any
Federal Reserve Bank as collateral security pursuant to Regulation A of the
Board of Governors of the Federal Reserve System and any operating circular
issued by such Federal Reserve Bank; provided that (i) no Lender shall, as
between Company and such Lender, be relieved of any of its obligations hereunder
as a result of any such assignment and pledge and (ii) in no event shall such
Federal Reserve Bank be considered to be a "Lender" or be entitled to require
the assigning Lender to take or omit to take any action hereunder.
E. Information. Each Lender may furnish any information concerning Company
and its Subsidiaries in the possession of that Lender from time to time to
assignees and participants (including prospective assignees and participants),
subject to subsection 10.19.
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F. Representations of Lenders. Each Lender listed on the signature pages
hereof hereby represents and warrants (i) that it is an Eligible Assignee
described in clause (A) of the definition thereof; (ii) that it has experience
and expertise in the making of or investing in loans such as the Revolving
Loans; and (iii) that it will make its Revolving Loans for its own account in
the ordinary course of its business and without a view to distribution of such
Revolving Loans within the meaning of the Securities Act or the Exchange Act or
other federal securities laws (it being understood that, subject to the
provisions of this subsection 10.1, the disposition of such Revolving Loans or
any interests therein shall at all times remain within its exclusive control).
Each Lender that becomes a party hereto pursuant to an Assignment Agreement
shall be deemed to agree that the representations and warranties of such Lender
contained in Section 2(c) of such Assignment Agreement are incorporated herein
by this reference.
10.2 Expenses.
Whether or not the transactions contemplated hereby shall be consummated,
Company agrees to pay promptly (i) all the actual and reasonable costs and
expenses of preparation of the Revolving Loan Documents and any consents,
amendments, waivers or other modifications thereto; (ii) all the costs of
furnishing all opinions by counsel for Company (including any opinions requested
by Lenders as to any legal matters arising hereunder) and of Company's
performance of and compliance with all agreements and conditions on its part to
be performed or complied with under this Agreement and the other Revolving Loan
Documents including with respect to confirming compliance with environmental,
insurance and solvency requirements; (iii) the reasonable fees, expenses and
disbursements of counsel to Arranger and counsel to Administrative Agent (in
each case including allocated costs of internal counsel) in connection with the
negotiation, preparation, execution and administration of the Revolving Loan
Documents and any consents, amendments, waivers or other modifications thereto
and any other documents or matters requested by Company; (iv) all the actual
costs and reasonable expenses of creating and perfecting Liens in favor of
Collateral Agent on behalf of Secured Parties pursuant to any Collateral
Document, including filing and recording fees, expenses and taxes, stamp or
documentary taxes, search fees, title insurance premiums, and reasonable fees,
expenses and disbursements of counsel to Arranger and counsel to Administrative
Agent and of counsel providing any opinions that Arranger, Administrative Agent
or Requisite Lenders may request in respect of the Collateral Documents or the
Liens created pursuant thereto; (v) all the actual costs and reasonable expenses
(including the reasonable fees, expenses and disbursements of any auditors,
accountants or appraisers and any environmental or other consultants, advisors
and agents employed or retained by Administrative Agent or Arranger and its
counsel) of obtaining and reviewing any appraisals provided for under subsection
4.1L or 6.9C, any environmental audits or reports provided for under subsection
4.1M or 6.9B(viii) and any audits or reports provided for under subsection 4.1K
or 6.5B with respect to Inventory and accounts receivable of Company and its
Subsidiaries; (vi) all the actual costs and reasonable expenses (including the
reasonable fees, expenses and disbursements of any consultants, advisors and
agents employed or retained by Administrative Agent and
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its counsel) in connection with the custody or preservation of any of the
Collateral; (vii) all other actual and reasonable costs and expenses incurred by
Syndication Agent, Arranger or Administrative Agent in connection with the
syndication of the Revolving Loan Commitments and the negotiation, preparation
and execution of the Revolving Loan Documents and any consents, amendments,
waivers or other modifications thereto and the transactions contemplated
thereby; and (viii) after the occurrence of an Event of Default, all costs and
expenses, including reasonable attorneys' fees (including allocated costs of
internal counsel) and costs of settlement, incurred by Arranger, Administrative
Agent and Lenders in enforcing any Obligations of or in collecting any payments
due from any Loan Party hereunder or under the other Revolving Loan Documents by
reason of such Event of Default (including in connection with the sale of,
collection from, or other realization upon any of the Collateral or the
enforcement of the Subsidiary Guaranty) or in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement in the
nature of a "work-out" or pursuant to any insolvency or bankruptcy proceedings.
10.3 Indemnity.
In addition to the payment of expenses pursuant to subsection 10.2,
whether or not the transactions contemplated hereby shall be consummated,
Company agrees to defend (subject to Indemnitees' selection of counsel),
indemnify, pay and hold harmless Agents and Lenders, and the officers, partners,
directors, employees, agents and affiliates of any of Agents and Lenders
(collectively called the "Indemnitees"), from and against any and all
Indemnified Liabilities (as hereinafter defined); provided that Company shall
not have any obligation to any Indemnitee hereunder with respect to any
Indemnified Liabilities to the extent such Indemnified Liabilities arise solely
from the gross negligence or willful misconduct of that Indemnitee as determined
by a final, non-appealable judgment of a court of competent jurisdiction.
As used herein, "Indemnified Liabilities" means, collectively, any and all
liabilities, obligations, losses, damages (including natural resource damages),
penalties, actions, judgments, suits, claims (including Environmental Claims),
costs (including the costs of any investigation, study, sampling, testing,
abatement, cleanup, removal, remediation or other response action necessary to
remove, remediate, clean up or ▇▇▇▇▇ any Hazardous Materials Activity), expenses
and disbursements of any kind or nature whatsoever (including the reasonable
fees and disbursements of counsel for Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened by
any Person, whether or not any such Indemnitee shall be designated as a party or
a potential party thereto, and any fees or expenses incurred by Indemnitees in
enforcing this indemnity), whether direct, indirect or consequential and whether
based on any federal, state or foreign laws, statutes, rules or regulations
(including securities and commercial laws, statutes, rules or regulations and
Environmental Laws), on common law or equitable cause or on contract or
otherwise, that may be imposed on, incurred by, or asserted against any such
Indemnitee, in any manner relating to or arising out of (i) this Agreement or
the other Revolving Loan Documents or the Related Agreements or the transactions
contemplated hereby or thereby
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(including Lenders' agreement to make the Revolving Loans hereunder or the use
or intended use of the proceeds thereof or the issuance of Letters of Credit
hereunder or the use or intended use of any thereof, or any enforcement of any
of the Revolving Loan Documents (including any sale of, collection from, or
other realization upon any of the Collateral or the enforcement of the
Subsidiary Guaranty)), (ii) the statements contained in the commitment letter
delivered by any Lender to Company with respect thereto, or (iii) any
Environmental Claim or any Hazardous Materials Activity relating to or arising
from, directly or indirectly, any past or present activity, operation, land
ownership, or practice of Company or any of its Subsidiaries.
To the extent that the undertakings to defend, indemnify, pay and hold
harmless set forth in this subsection 10.3 may be unenforceable in whole or in
part because they are violative of any law or public policy, Company shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.
10.4 Set-Off; Security Interest in Deposit Accounts.
In addition to any rights now or hereafter granted under applicable law
and not by way of limitation of any such rights, upon the occurrence of any
Event of Default each Lender is hereby authorized by Company at any time or from
time to time, subject to the consent of Administrative Agent, without notice to
Company or to any other Person (other than Administrative Agent), any such
notice being hereby expressly waived, to set off and to appropriate and to apply
any and all deposits (general or special, including Indebtedness evidenced by
certificates of deposit, whether matured or unmatured, but not including trust
accounts) and any other Indebtedness at any time held or owing by that Lender to
or for the credit or the account of Company against and on account of the
obligations and liabilities of Company to that Lender under this Agreement, the
Letters of Credit and participations therein and the other Revolving Loan
Documents, including all claims of any nature or description arising out of or
connected with this Agreement, the Letters of Credit and participations therein
or any other Revolving Loan Document, irrespective of whether or not (i) that
Lender shall have made any demand hereunder or (ii) the principal of or the
interest on the Revolving Loans or any amounts in respect of the Letters of
Credit or any other amounts due hereunder shall have become due and payable
pursuant to Section 8 and although said obligations and liabilities, or any of
them, may be contingent or unmatured. Company hereby further grants to
Collateral Agent and each Lender a security interest in all deposits and
accounts maintained with Administrative Agent or such Lender as security for the
Obligations.
10.5 Ratable Sharing.
Lenders hereby agree among themselves that if any of them shall, whether
by voluntary payment (other than a voluntary prepayment of Revolving Loans made
and applied in accordance with the terms of this Agreement), by realization upon
security,
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through the exercise of any right of set-off or banker's lien, by counterclaim
or cross action or by the enforcement of any right under the Revolving Loan
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, amounts payable in
respect of Letters of Credit, fees and other amounts then due and owing to that
Lender hereunder or under the other Revolving Loan Documents (collectively, the
"Aggregate Amounts Due" to such Lender) which is greater than the proportion
received by any other Lender in respect of the Aggregate Amounts Due to such
other Lender, then the Lender receiving such proportionately greater payment
shall (i) notify Administrative Agent and each other Lender of the receipt of
such payment and (ii) apply a portion of such payment to purchase participations
(which it shall be deemed to have purchased from each seller of a participation
simultaneously upon the receipt by such seller of its portion of such payment)
in the Aggregate Amounts Due to the other Lenders so that all such recoveries of
Aggregate Amounts Due shall be shared by all Lenders in proportion to the
Aggregate Amounts Due to them; provided that if all or part of such
proportionately greater payment received by such purchasing Lender is thereafter
recovered from such Lender upon the bankruptcy or reorganization of Company or
otherwise, those purchases shall be rescinded and the purchase prices paid for
such participations shall be returned to such purchasing Lender ratably to the
extent of such recovery, but without interest. Company expressly consents to the
foregoing arrangement and agrees that any holder of a participation so purchased
may exercise any and all rights of banker's lien, set-off or counterclaim with
respect to any and all monies owing by Company to that holder with respect
thereto as fully as if that holder were owed the amount of the participation
held by that holder.
10.6 Amendments and Waivers.
A. No amendment, modification, termination or waiver of any provision of
the Revolving Loan Documents, or consent to any departure by the Company
therefrom, shall in any event be effective without the written concurrence of
Requisite Lenders; provided that no such amendment, modification, termination,
waiver or consent shall, without the consent of each Lender (with Obligations
directly affected in the case of the following clause (i)): (i) extend the
scheduled final maturity of any Revolving Loan or Revolving Note, or extend the
stated expiration date of any Letter of Credit beyond the Revolving Loan
Commitment Termination Date, or reduce the rate of interest on any Revolving
Loan (other than any waiver of any increase in the interest rate applicable to
any Revolving Loan pursuant to subsection 2.2E) or any commitment fees or letter
of credit fees payable hereunder, or extend the time for payment of any such
interest or fees, or reduce the principal amount of any Revolving Loan or any
reimbursement obligation in respect of any Letter of Credit, (ii) amend, modify,
terminate or waive any provision of this subsection 10.6, (iii) reduce the
percentage specified in the definition of "Requisite Lenders" (it being
understood that, with the consent of Requisite Lenders, additional extensions of
credit pursuant to this Agreement may be included in the determination of
"Requisite Lenders" on substantially the same basis as the Revolving Loan
Commitments and the Revolving Loans are included on the Closing Date), (iv)
consent to the assignment or transfer by the
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Company of any of its rights and obligations under this Agreement or (v)
release all or substantially all the Liens granted pursuant to the Collateral
Documents (including Liens on real property) or to release any Subsidiary from
the Subsidiary Guaranty if such release would constitute a release of all or
substantially all of the Collateral; provided, further that no such amendment,
modification, termination or waiver shall (1) increase the Revolving Loan
Commitments of any Lender over the amount thereof then in effect without the
consent of such Lender (it being understood that no amendment, modification or
waiver of any condition precedent, covenant, Potential Event of Default or Event
of Default shall constitute an increase in the Revolving Loan Commitment of any
Lender, and that no increase in the available portion of any Revolving Loan
Commitment of any Lender shall constitute an increase in such Revolving Loan
Commitment of such Lender); (2) amend, modify, terminate or waive any obligation
of Lenders relating to the purchase of participations in Letters of Credit as
provided in subsection 3.1C without the written concurrence of Administrative
Agent and of each Issuing Lender which has a Letter of Credit then outstanding
or which has not been reimbursed for a drawing under a Letter of Credit issued
it; or (3) amend, modify, terminate or waive any provision of Section 9 as the
same applies to any Agent, or any other provision of this Agreement as the same
applies to the rights or obligations of any Agent, in each case without the
consent of such Agent.
B. Administrative Agent may, but shall have no obligation to, with the
concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of that Lender. Any waiver or consent shall be effective only
in the specific instance and for the specific purpose for which it was given. No
notice to or demand on the Company in any case shall entitle Company to any
other or further notice or demand in similar or other circumstances. Any
amendment, modification, termination, waiver or consent effected in accordance
with this subsection 10.6 shall be binding upon each Lender at the time
outstanding, each future Lender and, if signed by Company, the Company.
10.7 Independence of Covenants.
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.
10.8 Notices.
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States mail
or courier service and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage prepaid
and properly addressed; provided that notices to Arranger, Syndication
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Agent or Administrative Agent shall not be effective until received. For the
purposes hereof, the address of each party hereto shall be as set forth under
such party's name on the signature pages hereof or (i) as to Company and
Administrative Agent, such other address as shall be designated by such Person
in a written notice delivered to the other parties hereto and (ii) as to each
other party, such other address as shall be designated by such party in a
written notice delivered to Administrative Agent and Company.
10.9 Survival of Representations, Warranties and Agreements.
A. All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the
Revolving Loans and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of Company set forth in subsections 2.6D, 2.7, 3.5A,
3.6, 10.2, 10.3 and 10.4 and the agreements of Lenders set forth in subsections
9.2C, 9.4 and 10.5 shall survive the payment of the Revolving Loans, the
cancellation or expiration of the Letters of Credit and the reimbursement of any
amounts drawn thereunder, and the termination of this Agreement.
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of Administrative Agent or any Lender in
the exercise of any power, right or privilege hereunder or under any other
Revolving Loan Document shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other power, right or privilege. All
rights and remedies existing under this Agreement and the other Revolving Loan
Documents are cumulative to, and not exclusive of, any rights or remedies
otherwise available.
10.11 Marshalling; Payments Set Aside.
Neither Administrative Agent nor any Lender shall be under any obligation
to marshal any assets in favor of Company or any other party or against or in
payment of any or all of the Obligations. To the extent that Company makes a
payment or payments to Administrative Agent or Lenders (or to Administrative
Agent for the benefit of Lenders), or Administrative Agent or Lenders enforce
any security interests or exercise their rights of setoff, and such payment or
payments or the proceeds of such enforcement or setoff or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, any other state or federal law, common law or any equitable
cause, then, to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied, and all Liens, rights and remedies therefor
or related thereto, shall be revived and continued in full
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force and effect as if such payment or payments had not been made or such
enforcement or setoff had not occurred.
10.12 Severability.
In case any provision in or obligation under this Agreement or the
Revolving Notes shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
10.13 Obligations Several; Independent Nature of Lenders' Rights.
The obligations of Lenders hereunder are several and no Lender shall be
responsible for the obligations or Revolving Loan Commitments of any other
Lender hereunder. Nothing contained herein or in any other Loan Document, and no
action taken by Lenders pursuant hereto or thereto, shall be deemed to
constitute Lenders as a partnership, an association, a joint venture or any
other kind of entity. The amounts payable at any time hereunder to each Lender
shall be a separate and independent debt, and each Lender shall be entitled to
protect and enforce its rights arising out of this Agreement and it shall not be
necessary for any other Lender to be joined as an additional party in any
proceeding for such purpose.
10.14 Headings.
Section and subsection headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
10.15 Applicable Law.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES.
10.16 Successors and Assigns.
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of Lenders (it being understood that
Lenders' rights of assignment are subject to subsection 10.1). Neither Company's
rights or obligations hereunder nor any interest
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therein may be assigned or delegated by Company without the prior written
consent of all Lenders.
10.17 Consent to Jurisdiction and Service of Process.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS
THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇. BY EXECUTING AND
DELIVERING THIS AGREEMENT, COMPANY, FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN
ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO COMPANY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH
SUBSECTION 10.8;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER COMPANY IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST COMPANY IN
THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 10.17 RELATING TO
JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST
EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402
OR OTHERWISE.
10.18 Waiver of Jury Trial.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER REVOLVING LOAN DOCUMENTS OR
ANY DEALINGS BETWEEN THEM RELATING
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TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE LENDER/BORROWER
RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this waiver is intended to
be all-encompassing of any and all disputes that may be filed in any court and
that relate to the subject matter of this transaction, including contract
claims, tort claims, breach of duty claims and all other common law and
statutory claims. Each party hereto acknowledges that this waiver is a material
inducement to enter into a business relationship, that each has already relied
on this waiver in entering into this Agreement, and that each will continue to
rely on this waiver in their related future dealings. Each party hereto further
warrants and represents that it has reviewed this waiver with its legal counsel
and that it knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION 10.18 AND EXECUTED BY EACH OF
THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER
REVOLVING LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE
OBLIGATIONS MADE HEREUNDER. In the event of litigation, this Agreement may be
filed as a written consent to a trial by the court.
10.19 Confidentiality.
Each Lender shall hold all non-public information obtained pursuant to the
requirements of this Agreement in accordance with such Lender's customary
procedures for handling confidential information of this nature and in
accordance with safe and sound banking practices (and any Lender without such
customary procedures agrees to keep such information confidential), it being
understood and agreed by Company that in any event a Lender may make disclosures
to Affiliates or Related Funds of such Lender or disclosures reasonably required
by any bona fide assignee, transferee or participant in connection with the
contemplated assignment or transfer by such Lender of any Revolving Loans or any
participations therein (so long as such Persons agree in advance in writing to
keep such information confidential) or disclosures required or requested by any
governmental agency or representative thereof or pursuant to legal process;
provided that, unless specifically prohibited by applicable law or court order,
each Lender shall notify Company of any request by any governmental agency or
representative thereof (other than any such request in connection with any
examination of the financial condition of such Lender by such governmental
agency) for disclosure of any such non-public information prior to disclosure of
such information; and provided, further that in no event shall any Lender be
obligated or required to return any materials furnished by Company or any of its
Subsidiaries.
10.20 Counterparts; Effectiveness.
This Agreement and any amendments, waivers, consents or supplements hereto
or in connection herewith may be executed in any number of counterparts and by
different
REVOLVING LOAN CREDIT AGREEMENT EXECUTION
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parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument; signature pages may be detached from
multiple separate counterparts and attached to a single counterpart so that all
signature pages are physically attached to the same document. This Agreement
shall become effective upon the execution of a counterpart hereof by each of the
parties hereto and receipt by Company and Administrative Agent of written or
telephonic authorization of delivery thereof.
[Remainder 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 respective officers thereunto duly
authorized as of the date first written above.
COMPANY:
AMSCAN HOLDINGS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
Notice Address:
Amscan Holdings, Inc.
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
REVOLVING LOAN CREDIT AGREEMENT EXECUTION
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AGENTS AND LENDERS:
▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS L.P.,
as Arranger and Syndication Agent
By: /s/
------------------------
Authorized Signatory
Notice Address:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P.
16th Floor
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇ (Credit)
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P.
27th Floor
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇ (Operations)
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
REVOLVING LOAN CREDIT AGREEMENT
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FLEET NATIONAL BANK,
individually and as Administrative Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Director
Notice Address:
Fleet National Bank
One Federal Street, 5th Floor
Mail Stop MAOFD05P
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Fleet National Bank
One ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Duly Authorized Signatory
Notice Address:
GE Capital
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇,
Associate
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
GE Capital
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Senior Vice President
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
REVOLVING LOAN CREDIT AGREEMENT
▇-▇
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
Notice Address:
Southern Pacific Bank
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Southern Pacific Bank
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
REVOLVING LOAN CREDIT AGREEMENT
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TRANSAMERICA BUSINESS CREDIT CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President
Notice Address:
Transamerica Business Credit Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇-▇▇▇
▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇ (Credit)
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Transamerica Business Credit Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇-▇▇▇
▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (Operations)
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
REVOLVING LOAN CREDIT AGREEMENT
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